Mohawk Industries MHK United States — Effective Income Tax Rate Reconciliation, Percent

The geographic dispersion of earnings and losses contributes to the annual changes in the Company’s effective tax rates. Approximately 21% of the Company’s current year earnings before income taxes was generated in the U.S. The Company is also subject to taxation in other jurisdictions where it has operations, including Australia, Belgium, Brazil, Bulgaria, France, Ireland, Italy, Luxembourg, Malaysia, Mexico, the Netherlands, New Zealand, Poland, Russia, Spain and the United Kingdom. The effective tax rates that the Company accrues in these jurisdictions vary widely, but they are generally lower than the Company’s overall effective tax rate. The Company’s domestic effective tax rates for the years ended December 31, 2025, 2024 and 2023 were 35.3%, 20.3%, and (5.2)%, respectively, and its non-U.S. effective tax rates for the years ended December 31, 2025, 2024 and 2023 were 17.3%, 19.6%, and 71.3%, respectively. The difference in rates applicable in foreign jurisdictions results from many factors, including lower statutory rates, increase in valuation allowance, historical loss carry-forwards, financing arrangements, and other factors. The Company’s effective tax rate has been and will continue to be impacted by the geographical dispersion of the Company’s earnings and losses. To the extent that domestic earnings increase while the foreign earnings remain flat or decrease, or increase at a lower rate, the Company’s effective tax rate will increase.