WINNEBAGO INDUSTRIES INCWGO
WINNEBAGO INDUSTRIES INC Income Taxes Disclosure
Income Taxes
Income tax expense consisted of the following:
| (in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Current | |||||||||||||||||
| Federal | $ | (0.8) | $ | 10.4 | $ | 38.2 | |||||||||||
| State | 2.3 | 6.9 | 8.8 | ||||||||||||||
| Total | 1.5 | 17.3 | 47.0 | ||||||||||||||
| Deferred | |||||||||||||||||
| Federal | 5.3 | 7.1 | 15.9 | ||||||||||||||
| State | (2.4) | 1.0 | 0.4 | ||||||||||||||
| Total | 2.9 | 8.1 | 16.3 | ||||||||||||||
| Income tax provision | $ | 4.4 | $ | 25.4 | $ | 63.3 | |||||||||||
As of August 30, 2025 and August 31, 2024, $7.3 million and $6.8 million of U.S. federal income taxes receivable was included in prepaid expenses and other current assets on the Consolidated Balance Sheets, respectively.
A reconciliation of the U.S. statutory income tax rate to our effective income tax rate is as follows:
| 2025 | 2024 | 2023 | |||||||||||||||
| U.S. federal statutory rate | 21.0 | % | 21.0 | % | 21.0 | % | |||||||||||
| State taxes, net of federal benefit | 2.3 | % | 8.4 | % | 3.1 | % | |||||||||||
| Income tax credits | (10.1) | % | (8.9) | % | (1.1) | % | |||||||||||
| Non-deductible compensation | 7.6 | % | 6.6 | % | 1.1 | % | |||||||||||
| Non-deductible debt inducement | — | % | 19.4 | % | — | % | |||||||||||
| Non-deductible goodwill impairment | — | % | 16.6 | % | — | % | |||||||||||
| Valuation allowance | (0.3) | % | 5.0 | % | — | % | |||||||||||
| Tax-free and dividend income | (1.2) | % | (1.1) | % | (0.1) | % | |||||||||||
| Uncertain tax position settlements and adjustments | (2.1) | % | (1.7) | % | 0.1 | % | |||||||||||
| Other items | (2.7) | % | 0.9 | % | (1.4) | % | |||||||||||
| Effective tax provision rate | 14.5 | % | 66.2 | % | 22.7 | % | |||||||||||
Our effective tax rate decreased to 14.5% in Fiscal 2025 compared to 66.2% in Fiscal 2024 primarily due to the prior year's non-deductible debt inducement loss and non-deductible goodwill impairment and, in Fiscal 2025, increased favorable return to provision adjustments and reduced change in the valuation allowance over lower pre-tax income.
The tax effects of temporary differences that give rise to deferred income taxes were as follows:
| (in millions) | August 30, 2025 | August 31, 2024 | |||||||||
| Warranty reserves | $ | 17.9 | $ | 19.3 | |||||||
| Deferred compensation | 1.7 | 2.5 | |||||||||
| Self-insurance reserve | 3.6 | 4.4 | |||||||||
| Stock-based compensation | 4.2 | 4.5 | |||||||||
| Leases | 13.4 | 15.0 | |||||||||
| Convertible notes | 13.7 | 16.5 | |||||||||
| Capitalized research and development costs | 29.6 | 23.8 | |||||||||
| Other | 15.6 | 14.0 | |||||||||
| Valuation allowance | (1.8) | (1.9) | |||||||||
| Interest limitation | 12.5 | 4.1 | |||||||||
| Total deferred tax assets | 110.4 | 102.2 | |||||||||
| Intangibles | 73.3 | 61.5 | |||||||||
| Depreciation | 30.9 | 30.2 | |||||||||
| Leases | 12.1 | 13.5 | |||||||||
| Total deferred tax liabilities | 116.3 | 105.2 | |||||||||
| Total deferred income tax liabilities, net | $ | 5.9 | $ | 3.0 | |||||||
Changes in the unrecognized tax benefits are as follows:
| (in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Balance at beginning of year | $ | 4.9 | $ | 5.5 | $ | 5.0 | |||||||||||
| Gross decreases-tax positions in a prior year | (1.3) | (1.7) | (1.5) | ||||||||||||||
| Gross increases-tax positions in a prior year | — | 0.2 | 1.0 | ||||||||||||||
| Gross increases-current year tax positions | 0.8 | 0.9 | 1.0 | ||||||||||||||
| Balance at end of year | 4.4 | 4.9 | 5.5 | ||||||||||||||
| Accrued interest and penalties | 0.4 | 0.5 | 0.6 | ||||||||||||||
| Total unrecognized tax benefits | $ | 4.8 | $ | 5.4 | $ | 6.1 | |||||||||||
The amount of unrecognized tax benefits is not expected to change materially within the next 12 months. If the remaining uncertain tax positions are ultimately resolved favorably, $4.4 million of unrecognized tax benefits would have a favorable impact on our effective tax rate. It is our policy to recognize interest and penalties accrued relative to unrecognized tax benefits in income tax expense.
We file a U.S. Federal tax return, as well as returns in various international and state jurisdictions. Although certain years are no longer subject to examination by the Internal Revenue Service ("IRS") and various state taxing authorities, net operating loss carryforwards generated in those years may still be adjusted upon examination by the IRS or state taxing authorities. As of August 30, 2025, our federal returns from Fiscal 2022 to present are subject to review by the IRS. With limited exception, state returns from Fiscal 2021 to present continue to be subject to review by state taxing jurisdictions. Several years may lapse before an uncertain tax position is audited and finally resolved and it is difficult to predict the outcome of such audits. We believe we have adequately reserved for our exposure to potential additional payments for uncertain tax positions in our liability for unrecognized tax benefits.
Recent Tax Legislation
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, which included various provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act and restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in Fiscal 2025 and others implemented through Fiscal 2027.
During Fiscal 2025, none of the relevant provisions of the OBBBA had a significant impact on our consolidated financial statements. Beginning in Fiscal 2026, the OBBBA could have a more significant impact, particularly related to the reinstatement of 100% bonus depreciation, previously capitalized and unamortized U.S. research and development costs, and changes to interest deductibility. We will continue to assess the implications of the OBBBA.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Oct 22, 2025 | Showing above |
| 2024 | Oct 23, 2024 | |
| 2023 | Oct 18, 2023 | |
| 2022 | Oct 19, 2022 | |
| 2021 | Oct 20, 2021 | |
| 2020 | Oct 21, 2020 | |
| 2019 | Oct 23, 2019 | |
| 2018 | Oct 18, 2018 | |
| 2017 | Oct 20, 2017 | |
| 2016 | Oct 18, 2016 | |
| 2015 | Oct 27, 2015 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.