INCOME TAXES |
3 Months Ended |
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Mar. 31, 2026 | |
| INCOME TAXES | |
| INCOME TAXES | NOTE 10—INCOME TAXES Income tax provisions for interim periods are generally based on an estimated annual effective income tax rate calculated separately from the effect of significant, infrequent, or unusual items related specifically to interim periods. The income tax impacts of discrete items are recognized in the period these occur. Our effective tax rate for the three months ended March 31, 2026 and 2025 was a benefit of 19.0% and 31.2%, respectively, excluding the impact of discrete items. Discrete items for the periods included items for management compensation and stock-based compensation. The lower effective tax rate for the quarter ended March 31, 2026 compared to March 31, 2025 was primarily driven by a lower expected percentage depletion deduction. Legislation—On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. Changes made by the OBBBA include, but are not limited to, the reinstatement of 100% bonus depreciation, the reinstatement of immediate expensing for domestic research and experimentation costs, and changes to the calculation of the foreign-derived intangible income deduction and the interest expense limitation. It also added metallurgical coal to the list of “critical minerals” eligible for the section 45X Advanced Manufacturing Tax Credit. The Section 45X credit (also known as the advanced manufacturing production credit), as amended, provides a tax credit equal to 2.5% of the production costs for metallurgical coal produced during tax years 2026 through 2029. We have incorporated the effects of the OBBBA in our income tax provision and recorded a Section 45X credit of $2.6 million for the three months ended March 31, 2026 within Cost of sales on our Consolidated Statements of Operations.
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