Note 7 - Income Taxes |
3 Months Ended | ||
|---|---|---|---|
Mar. 31, 2026 | |||
| Notes to Financial Statements | |||
| Income Tax Disclosure [Text Block] |
For interim financial reporting, the annual tax rate is based on pre-tax income (loss) before equity in income of joint ventures. We have historically calculated the income tax expense/(benefit) during interim reporting periods by applying a full year estimated Annual Effective Tax Rate (“AETR”) to income (loss) before income taxes, excluding infrequent or unusual discrete items, for the reporting period. For the three months ended March 31, 2026, we concluded, consistent with prior periods, that using an AETR would not provide a reliable estimate of income taxes due to the forecasting methodology used to project income (loss) before income taxes, resulting in significant changes in the estimated AETR. Thus, we concluded to use a discrete effective tax rate, which treats the year-to-date period as an annual period, to calculate income taxes for the three months ended March 31, 2026.
Our effective tax rates was 318.5% for the three months ended March 31, 2026, and was (20.1% for the three months ended March 31, 2025.
Our effective tax rate was driven primarily by the mix of taxable income between jurisdictions with different tax regimes, in particular in our MENA and ESSA regions and jurisdictions subject to deemed profit taxes. The initial recognition of deferred taxes related to the Coretrax Acquisition reduced our effective tax rate in the first quarter of 2025 and was not repeated in the first quarter of 2026.
Impact of the One Big Beautiful Bill Act (OBBBA)
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