9. Income taxes

The components of income tax expense (“tax provision”) are included in the table below.

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The tax provision is computed based upon income before income taxes from both U.S. and foreign operations. U.S. income before income taxes was $108.6 million, $34.0 million, and $186.6 million in fiscal 2026, 2025, and 2024, respectively, and foreign income before income taxes was $358.8 million, $216.6 million, and $445.6 million, in fiscal 2026, 2025, and 2024, respectively.

On July 4, 2025, the U.S. government enacted the One Big Beautiful Bill Act (the “OBBB”). The bill includes extensions of current tax provisions and makes many significant tax changes. Most of the provisions enacted by the OBBB take effect in fiscal year 2025 to 2027. The Company expects no material adverse impact related to the OBBB in fiscal 2026. The Company will continue to monitor OBBB developments and update the potential impacts on its consolidated financial statements as new information becomes available.

The Organization for Economic Co-operation and Development (OECD) has enacted a new global minimum tax framework known as Pillar Two. These rules have been agreed to by most OECD members. The OECD has since issued administrative guidance providing transition and safe harbor rules including the Side-by-Side package which exempts

US-parented MNE Groups from the Income Inclusion Rule (IIR) and the Undertaxed Profits Rule (UTPR) in other jurisdictions. The Company was subject to Pillar Two rules starting in fiscal 2025. As of June 27, 2026, Pillar Two taxes do not have a significant impact on the Company’s income tax expense. The Company is continuing to monitor the relevant developments and evaluate the potential impacts.

The Company asserts that all its unremitted foreign earnings are permanently reinvested, and any unrecorded liabilities related to this assertion are not material.

Reconciliation of the U.S. federal statutory income tax rate to the effective income tax rate is as follows:

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Reconciliations of the U.S. federal statutory income tax rate to the effective income tax rates, prior to the adoption of ASU 2023-09, are as follows:

The Company applies the guidance in ASC 740 Income Taxes, which requires management to use its judgment to the appropriate weighting of all available evidence when assessing the need for the establishment or the release of valuation allowances. As part of this analysis, the Company examines all available evidence on a jurisdiction-by-jurisdiction basis and weighs the positive and negative evidence when determining the need for full or partial valuation allowances. The evidence considered for each jurisdiction includes, among other items: (i) the historic levels and types of income or losses over a range of time periods, which may extend beyond the most recent three fiscal years depending upon the historical volatility of income in an individual jurisdiction; (ii) expectations and risks associated with underlying estimates of future taxable income, including considering the historical trend of down-cycles in the Company’s served industries; (iii) jurisdictional specific limitations on the utilization of deferred tax assets, including when such assets expire; and (iv) prudent and feasible tax planning strategies.

The significant components of deferred tax assets and liabilities, included in “Other assets” on the consolidated balance sheets, are as follows:

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The change in valuation allowances in fiscal 2026 from fiscal 2025 was related to a $1.0 million decrease resulting from current year activities and true ups related to prior years, and a $4.4 million decrease resulting from changing foreign exchange rates.

As of June 27, 2026, the Company had net operating and capital loss carry-forwards of approximately $1.23 billion, of which $18.9 million will expire during fiscal 2027 and fiscal 2028, $208.2 million have expiration dates ranging from fiscal 2029 to fiscal 2045, and the remaining $1.00 billion have no expiration date. A significant portion of these losses are not expected to be realized in the foreseeable future and have valuation allowances against them. The carrying value of the Company’s net operating and capital loss carry-forwards depends on the Company’s ability to generate sufficient future taxable income in certain tax jurisdictions.

Estimated liabilities for unrecognized tax benefits are included in “Accrued expenses and other” and “Other liabilities” on the consolidated balance sheets. These contingent liabilities relate to various tax matters that result from uncertainties in the application of complex income tax regulations in the numerous jurisdictions in which the Company operates. As of June 27, 2026, unrecognized tax benefits were $123.9 million. Accrued interest expense and penalties related to unrecognized tax benefits are $32.0 million and $28.0 million as of the end of fiscal 2026 and 2025, respectively.

Reconciliations of the beginning and ending liability balances for unrecognized tax benefits, excluding interest and penalties, are as follows:

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The Company conducts business globally and consequently files income tax returns in numerous jurisdictions, including those listed in the following table. It is also routinely subject to audit in these and other countries. The Company is no longer subject to audit in its major jurisdictions for periods prior to fiscal 2016. The years remaining subject to audit, by major jurisdiction, are as follows:

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