Income Taxes |
3 Months Ended |
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Apr. 03, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The Company's effective tax rate for the first quarter of 2026 and 2025 was 7.3% and 15.5%, respectively. The effective tax rate for the first quarter of 2026 is lower than the statutory tax rate primarily due to the impact of the foreign-derived deduction eligible income, excess tax benefits from stock-based compensation awards and percentage depletion. The effective tax rate for the first quarter of 2025 was lower than the statutory tax rate primarily due to the impact of percentage depletion, the foreign-derived intangible income deduction, and the advanced manufacturing production credit. The effective tax rate for the first quarter of 2026 and 2025 included a net discrete income tax effect of $1.6 million benefit and $0.1 million expense, respectively, primarily related to stock-based compensation awards. Government Tax Credits Pursuant to The Inflation Reduction Act of 2022 (IRA), the Company is eligible for the Advanced Manufacturing Production Credit (production credit). The production credit provides an annual cash benefit for a portion of the production costs for the sale of certain critical minerals produced in the U.S. and sold during the year. The Company records the production credit as a reduction in cost of goods sold as the applicable items are produced and sold. U.S. GAAP does not address the accounting for government grants received by a business entity that are outside the scope of ASC 740. Our accounting policy is to analogize to IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, under IFRS Accounting Standards. We recognize the benefit of the production credit by applying IAS 20 in pretax income on a systematic basis in line with its recognition of the expenses that the grant is intended to compensate. Pillar Two The Organization for Economic Co-operation and Development (OECD) introduced rules to establish a global minimum corporate tax rate, commonly referred to as Pillar Two. Many of the key non-U.S. jurisdictions where the Company operates have enacted Pillar Two legislation. While the U.S. has negotiated a “side-by-side” arrangement for the existing U.S. minimum taxes with the intent to exempt U.S. multinational companies from certain Pillar Two provisions, the timing and consistency of implementation across jurisdictions continue to evolve. The Pillar Two minimum tax is treated as a period cost and is not expected to have a material impact on the Company’s effective tax rate or consolidated results of operations, financial position, or cash flows in 2026. We will continue to evaluate the impact of Pillar Two legislation on the current and future reporting periods.
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