Income Taxes

3 Months Ended

Mar. 27, 2022

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The Company had income tax expense of $1.1 million and $9.5 million in the first quarters of 2022 and 2021, respectively. The Company’s effective tax rates from continuing operations were 19.1% and 18.7% for the first quarters of 2022 and 2021, respectively. The decrease in income tax expense and increase in effective tax rate in the first quarter of 2022 were primarily due to lower income from continuing operations resulting from costs related to The Athletic acquisition. Excluding the tax benefit resulting from the special item related to the acquisition of The Athletic, tax expense in the first quarter of 2022 exceeded tax expense in the first quarter of 2021 primarily due to a lower benefit in the first quarter of 2022 from stock appreciation on stock-based awards that settled in the quarters.

Beginning in 2022, the Tax Cuts and Jobs Act of 2017 eliminates the option to deduct research and development expenditures immediately in the year incurred and instead requires taxpayers to capitalize and amortize such expenditures over five years. If Congress does not repeal or defer the effective date of this provision, we expect our 2022 cash tax payments will increase significantly as compared to 2021. We would also expect significant increases to our deferred tax assets as we begin to capitalize our research and development expenditures.