Income Taxes

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

The Company’s tax provision or benefit from income taxes for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the Company updates an estimate of the annual effective tax rate, and if the estimated tax rate changes, we make a cumulative adjustment.

The Company recorded income tax (benefit) expense of ($2.1) million and $2.9 million for the three and nine months ended September 30, 2023, respectively, compared to income tax (benefit) expense of ($7.0) million and $30.4 million for the three and nine months ended October 1, 2022, respectively. The Company’s effective income tax rate was (6.8%) and 2.0% for the three and nine months ended September 30, 2023, respectively, compared to 8.7% and 16.7% for the three and nine months ended October 1, 2022, respectively.

The changes in our effective tax rate for the three and nine months ended September 30, 2023 compared to the prior year are primarily driven by temporary changes in the U.S. tax regulations pertaining to foreign tax credits and changes to the jurisdictional income mix resulting from the Acquisition of CMC Materials in the three and nine month periods ended September 30, 2023.