Everus Construction Group Inc

Note 10 –Income Taxes

The Company’s quarterly income tax provision is measured using an estimate of its consolidated annual effective tax rate, adjusted in the current period for discrete income tax items, within the periods presented.

For the three and nine months ended September 30, 2024, income tax expense was $14.0 million and $37.6 million, respectively, resulting in an effective tax rate of 25.1% and 25.7%, respectively. The effective tax rates for the three and nine months ended September 30, 2024 differed from the 2024 statutory tax rate of 21% primarily due to state income taxes, net of federal income taxes, and certain unfavorable permanent book-tax differences due to meals and entertainment expenses.

For the three and nine months ended September 30, 2023, income tax expense was $11.4 million and $32.8 million, respectively, resulting in an effective tax rate of 24.1% and 24.6%, respectively. The effective tax rates for the three and nine months ended September 30, 2023 differed from the 2023 statutory tax rate of 21% primarily due to state income taxes, net of federal income taxes, and certain unfavorable permanent book-tax differences due to market performance as well as meals and entertainment expenses.

The effective tax rates for the three and nine months ended September 30, 2024 differed from the effective tax rates for the three and nine months ended September 30, 2023 due to changes in the Company’s permanent book-tax differences between those periods, specifically increased permanent add-back for meals and entertainment expenses.