Income Taxes

9 Months Ended

Oct. 28, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The provision (benefit) for income taxes is based on the current estimate of the annual effective tax rate and is adjusted as necessary for quarterly events.

For the third quarter of 2023, the Company’s effective tax rate was 24.1% compared to 25.0% in the third quarter of 2022. The third quarter of 2023 rate differed from the Company’s combined estimated federal and state statutory rate primarily due to foreign earnings taxed at a lower rate than the Company’s combined federal and state statutory rate. The third quarter of 2022 rate was consistent with the Company’s combined federal and state statutory rate.

For year-to-date 2023, the Company’s effective tax rate was 20.6% compared to 13.2% for year-to-date 2022. The year-to-date 2023 rate differed from the Company's combined estimated federal and state statutory rate primarily due to non-deductible liabilities related to contingent consideration and Contingent Compensation Payments. The year-to-date 2022 rate was lower than the Company’s combined estimated federal and state statutory rate primarily due to the recognition of excess tax benefits related to share-based compensation awards that vested in the respective period.

The Company paid income taxes in the amount of $6 million and $18 million for the third quarter of 2023 and 2022, respectively. Year-to-date income taxes paid were $65 million and $158 million for 2023 and 2022, respectively.