Income Taxes

6 Months Ended

Jul. 02, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company and its subsidiaries file income tax returns in the United States and various state and international jurisdictions. In the normal course of business, the Company is regularly audited by U.S. federal, state and local, and international tax authorities in various tax jurisdictions.

Our effective tax rate ("ETR") from continuing operations was (3.1)% for the six months ended July 2, 2023 and 21.8% for the six months ended June 26, 2022.

The following items caused the year-to-date ETR to be significantly different from the prior year ETR:

•during the six months ended July 2, 2023, the Company recorded an impairment of goodwill related to the Film and TV reporting unit of $231.2 million with no tax benefit. The Company also recorded a net discrete tax benefit of $8.9 million, exclusive of the goodwill impairment, primarily associated with a tax benefit on the impairment of trade names in the Entertainment segment, offset by stock-based compensation and net activity related to uncertain tax

positions, primarily interest accruals, combined with the phasing of the Company's income earned throughout 2023, and;

•during the six months ended June 26, 2022, the Company recorded a net discrete tax benefit of $3.2 million, primarily associated with the release of certain valuation allowances during the first quarter.

The Company is no longer subject to U.S. federal income tax examinations for years before 2012. With few exceptions, the Company is no longer subject to U.S. state or local and non-U.S. income tax examinations by tax authorities in its major jurisdictions for years before 2016. The Company is currently under income tax examination by the Internal Revenue Service and in several U.S. state and local and non-U.S. jurisdictions.