Income Taxes

6 Months Ended

Aug. 03, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The provision 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 second quarter of 2024, the Company’s effective tax rate was 22.4% compared to 144.2% in the second quarter of 2023. The second quarter of 2024 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 estimated federal and state statutory rate. The second quarter of 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 under the terms of the Merger Agreement.

For year-to-date 2024, the Company’s effective tax rate was 35.9% compared to 62.0% for year-to-date 2023. The year-to-date 2024 rate differed from the Company’s combined estimated federal and state statutory rate primarily due to additional tax expense from the vesting of share-based compensation awards. 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 under the terms of the Merger Agreement.

The Company paid income taxes in the amount of $31 million and $43 million for the second quarter of 2024 and 2023, respectively. Year-to-date income taxes paid were $37 million and $59 million for 2024 and 2023, respectively.