10. Income Taxes

The variance in the effective tax rate for fiscal 2025 as compared to fiscal 2024 was primarily due to the tax benefit from the release of a portion of the Company's income tax reserves as a result of a lapse of the statute of limitations for federal tax purposes.

Net deferred tax assets are attributed to the jurisdictions in which the Company operates. As of January 31, 2026 and 2025, respectively, $12,112 and $24,557 were attributable to U.S. federal, $17,743 and $18,256 were attributed to state jurisdictions and $5,767 and $5,654 were attributed to foreign jurisdictions.

As of January 31, 2026, certain non-U.S. subsidiaries of the Company had net operating loss carryforwards for tax purposes of approximately $48,324 that do not expire. Certain U.S. subsidiaries of the Company had state net operating loss carryforwards for tax purposes of approximately $16,653 that expire from 2031 through 2044 and approximately $7,471 that do not expire. Certain U.S. subsidiaries of the Company had state credit carryforwards for tax purposes of approximately $4,402 that expire from 2027 through 2030. As of January 31, 2026, the Company had a full valuation allowance for certain foreign net operating loss carryforwards and a partial valuation allowance against state credit carryforwards where it was uncertain the carryforwards would be utilized. The Company had no valuation allowance for certain other foreign and state net operating loss carryforwards where management believes it is more-likely-than-not the tax benefit of these carryforwards will be realized.

The Company continues to maintain a valuation allowance against its net deferred tax assets in the United Kingdom. Due to the recent improvement in the United Kingdom business results, the Company continues to monitor the need for this valuation allowance. If the Company determines that it is more likely than not that these assets will be realized in the future, a release of some or all of the valuation allowance may occur, which would result in a one-time tax benefit in the period of release.

As of January 31, 2026, approximately $176,667 of cash and cash equivalents were held by the Company’s non-U.S. subsidiaries for which no deferred taxes have been provided. The Company has accumulated undistributed earnings generated by foreign subsidiaries of approximately $260,475. Since such earnings have previously been subject to the one-time deemed repatriation transition tax required by the U.S. Tax Cuts and Jobs Act or other U.S. tax requirements on undistributed foreign earnings, any additional taxes due with respect to such earnings or the excess of the amount for financial reporting over the tax basis of our foreign investments would generally be limited to foreign and state taxes. The Company continues to believe that foreign earnings are indefinitely reinvested excluding earnings that have previously been subject to the one-time deemed repatriation transition tax required by the U.S. Tax Cuts and Jobs Act. With respect to outside basis differences in all other non-U.S. subsidiaries, the Company expects that either (i) such basis differences will not reverse in the foreseeable future, or (ii) such basis differences will reverse in a tax-neutral manner.

The total amount of net unrecognized tax benefits that, if recognized, would impact the Company’s effective tax rate were $1,765 and $1,044 as of January 31, 2026 and 2025, respectively. The Company accrues interest and penalties related to unrecognized tax benefits in income tax expense in the Consolidated Statements of Income, which is consistent with the recognition of these items in prior reporting periods. During fiscal 2026, 2025 and 2024, the Company recognized expense of $122, benefits of $5,878 and expense of $1,629, respectively, related to interest and penalties. The Company accrued $459 and $337 for the payment of interest and penalties as of January 31, 2026 and 2025, respectively.

The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The Company is under audit in certain state and foreign jurisdictions. Certain federal, foreign and state jurisdictions are subject to audit from fiscal 2010 to 2025. In December 2025, the Company received notification that the Company's fiscal 2024 U.S. income tax return was selected for examination.

Cash income taxes paid, net of refunds, by the Company were $104,319 and $55,164 for fiscal 2025 and 2024, respectively.

Tax Credit Investment

On February 10, 2023, the Company committed $100,000 to purchase an equity membership interest in a federal low-income housing tax credit entity. An initial payment of $20,000 was paid at closing with the remaining balance payable in quarterly installments over a five-year period beginning in fiscal 2024. The present value of such payments was $62,120 and was recorded as an increase to the initial tax credit investment asset and liability. In exchange for the total payments of $100,000, the Company expects to realize a comparable amount of tax credits and other tax benefits that will reduce its future federal income tax payments. Although the investment vehicle is considered a variable interest entity, the Company is not the primary beneficiary, and therefore, the investment is not consolidated. The Company has elected to use the practical expedient method of amortization, which approximates the proportional amortization method, to amortize the investment to income tax expense in proportion to the tax credits received over an estimated 10-year tax credit period beginning in the first quarter of fiscal 2024. During fiscal 2026, 2025 and 2024, interest expense related to the accretion of the liability was $3,640, $4,906 and $6,190, respectively. Included in "Income tax expense" in the Consolidated Statements of Income was amortization of the investment of $17,029, $17,224 and $15,906 for fiscal 2026, 2025 and 2024, respectively. Also included in "Income tax expense" in the Consolidated Statements of Income were income tax credits and other income tax benefits of $23,563, $24,110 and $22,575 for fiscal 2026, 2025 and 2024, respectively. The carrying value of the investment is recorded in "Other assets" in the Consolidated Balance Sheets. The liabilities for the present value of the estimated future capital contributions are recorded

in "Accrued expenses and other current liabilities" and "Other non-current liabilities" in the Consolidated Balance Sheets. The following table summarizes the balances related to the investment at January 31, 2026 and 2025: