To supplement our financial results presented in accordance with GAAP, this release includes the following measures defined by the Securities and Exchange Commission as non-GAAP financial measures: pro forma effective tax rate, pro forma net income (earnings) per share and free cash flow. These non-GAAP measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may be different from non-GAAP measures used by other companies, limiting the usefulness of the measures for comparison with other companies. Management believes providing investors with an operating view consistent with how it manages the Company provides enhanced transparency into the operating results of the Company, as described in more detail by category below.
The tables below provide reconciliations between the GAAP and non-GAAP measures.
Pro forma effective tax rate
The Company's income tax expense is periodically impacted by discrete tax items that are not reflective of income tax expense incurred as a result of current period earnings. Therefore, management believes the effective tax rate and income tax provision before the effect of certain discrete tax items are important measures to permit investors' consistent comparison between periods. In the first three quarters of 2024 there were no such discrete tax items identified.
(In thousands) |
| 13-Weeks Ended |
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| 39-Weeks Ended |
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| September 28, |
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| September 30, |
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| September 28, |
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| September 30, |
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| 2024 |
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| 2023 |
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| 2024 |
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| 2023 |
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| $ |
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| ETR(1) |
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| ETR(1) |
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GAAP income tax provision |
| $ | 87,139 |
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| 17.9 | % |
| $ | 22,328 |
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| 8.0 | % |
| $ | 203,560 |
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| 17.3 | % |
| $ | 69,810 |
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| 8.5 | % |
Pro forma discrete tax item: |
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Tax effect of state rate change(2) |
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| — |
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| (2,269) |
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| — |
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| (2,269) |
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| Pro forma income tax provision |
| $ | 87,139 |
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| 17.9 | % |
| $ | 20,059 |
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| 7.2 | % |
| $ | 203,560 |
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| 17.3 | % |
| $ | 67,541 |
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| 8.3 | % |
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| (1) Effective tax rate is calculated by taking the income tax provision divided by income before taxes, as presented on the face of the Condensed Consolidated Statements of Income. |
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| (2) In third quarter 2023, the Company recognized $2.3 million of tax expense due to the revaluation of deferred tax assets associated with the change in corporate income tax rate for the state of Kansas. The impact of the revaluation of these deferred tax assets was not reflective of income tax expense incurred as a result of current period earnings. |
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