Kontoor Brands, Inc.

NOTE 19 —INCOME TAXES

The following table presents income before income taxes used to calculate the provision for income taxes:

The following table presents components of the provision for income taxes:

86 Kontoor Brands, Inc. 2025 Form 10-K

A reconciliation of the U.S. federal statutory income tax rate to our effective tax rate for the year ended December 2025 is as follows:

(1) The state and local jurisdictions that contribute to the majority (greater than 50%) of the tax effect in this category include California, Texas, and Virginia for 2025.

Kontoor Brands, Inc. 2025 Form 10-K 87

The following table presents a reconciliation of the differences between income taxes computed by applying the statutory federal income tax rate and "income taxes" recorded in the Company's statements of operations for the years ended December 2024 and 2023, respectively:

Foreign rate differences include tax benefits of $8.3 million, $7.2 million and $5.4 million in 2025, 2024 and 2023, respectively, from statutorily exempt foreign income.

During the year ended December 2023, the Company was granted local income tax credits in a foreign jurisdiction totaling $65.5 million that will expire in 2031. A full valuation allowance was recorded against these tax credits in the Company's financial statements and has been presented net in the table above.

The following table summarizes income taxes paid (net of refunds) exceeding 5 percent of total income taxes paid (net of refunds) in the following jurisdictions:

88 Kontoor Brands, Inc. 2025 Form 10-K

The following table presents the components of "deferred income tax assets" and "deferred income tax liabilities" recorded in the Company's balance sheets:

At the end of 2025, the Company is not asserting indefinite reinvestment with regard to short-term liquid assets of its foreign subsidiaries. All other foreign earnings, including basis differences of certain foreign subsidiaries, continue to be considered indefinitely reinvested. The Company has determined the unrecorded deferred tax liability on its indefinitely reinvested foreign earnings is approximately $0.9 million, primarily related to withholding taxes.

The Company has $69.5 million of local income tax credit carryforwards in a foreign jurisdiction that will expire in 2033, as well as $44.4 million of potential tax benefits for foreign operating loss and tax credit carryforwards, $23.1 million of which will expire between 2026 and 2035. In addition, there are potential tax benefits for domestic operating loss and foreign tax credit carryforwards of $2.7 million that will expire between 2027 and 2035, as well as $6.6 million of potential tax benefits for state operating loss and credit carryforwards, $5.4 million of which expire between 2026 and 2044.

A valuation allowance has been provided where it is more likely than not that deferred tax assets related to operating loss and tax credit carryforwards will not be realized. Valuation allowances totaled $69.5 million for local income tax credit carryforwards in a foreign jurisdiction, $34.7 million for foreign operating loss and tax credit carryforwards and $16.2 million for other foreign deferred income tax assets. In addition, there are valuation allowances of $2.7 million for domestic operating loss and foreign tax credit carryforwards, $1.4 million for other domestic deferred income taxes assets, as well as $4.2 million for state operating loss and credit carryforwards

During 2025, the Company recorded an $8.5 million increase in valuation allowances related to local income tax credits due to the impact of foreign currency effects. In addition, the Company recorded tax expense of $3.3 million due to a net increase in valuation allowances related to current year foreign operating losses and other deferred income tax assets, inclusive of foreign currency effects. The Company also recorded tax expense of $0.7 million due to an allowance booked against federal deferred income taxes, partially offset with a tax benefit due to a $0.4 million decrease in valuation allowances related to state operating loss and credit carryforwards as well as other state deferred income tax assets. Additionally, the Company recorded a $34.0 million increase in valuation allowance through purchase accounting.

Kontoor Brands, Inc. 2025 Form 10-K 89

The following table presents a reconciliation of the change in the accrual for unrecognized income tax benefits:

The unrecognized tax benefits of $14.4 million at the end of 2025, if recognized, would reduce tax expense and the annual effective tax rate.

The Company files a consolidated U.S. federal income tax return, as well as separate and combined income tax returns in numerous state and international jurisdictions. In the U.S., the IRS examinations for tax years through 2023 have been effectively settled. In addition, the Company is currently subject to examination by various state and international tax authorities. Management regularly assesses the potential outcomes of both ongoing and future examinations for the current and prior years and has concluded that the Company’s provision for income taxes is adequate. The outcome of any one examination is not expected to have a material impact on the Company’s financial statements.

90 Kontoor Brands, Inc. 2025 Form 10-K