Income Taxes

9 Months Ended

Sep. 29, 2024

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.

The effective tax rate ("ETR") was 23.1% for the three months ended September 29, 2024, and 20.8% for the three months ended October 1, 2023. The following items caused the third quarter ETR in 2024 to be different from the third quarter 2023 ETR:

•During the three months ended September 29, 2024 the Company recorded a discrete tax expense of $1.1 million, primarily associated with the interest accruals on uncertain tax positions.

•During the three months ended October 1, 2023 the Company recorded a discrete tax benefit of $104.4 million, primarily associated with the loss on assets held for sale.

The ETR was 24.1% for the nine months ended September 29, 2024, and 8.0% for the nine months ended October 1, 2023. The following items caused the year-to-date ETR in 2024 to be significantly different from the 2023 year-to-date ETR:

•During the nine months ended September 29, 2024, the Company recorded unfavorable adjustments to the 2023 Loss on Sale of the Film & TV reporting unit of $24.4 million with no tax benefit. The Company also recorded a net discrete tax expense of $1.8 million, primarily associated with stock-based compensation.

•During the nine months ended October 1, 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 $113.3 million, exclusive of the goodwill impairment, primarily associated with tax benefits on the impairment of trade names in the Film & TV reporting unit in the second quarter and loss on assets held for sale of $473.0 million in the third quarter.