Income Taxes

3 Months Ended

Mar. 30, 2024

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.

Income tax expense was $3.5 million in the three months ended March 30, 2024, compared to income tax expense of $21.5 million in the three months ended April 1, 2023. The Company’s year-to-date effective income tax rate at March 30, 2024 was 7.1%, compared to (32.2)% at April 1, 2023.

The changes in the effective tax rate for the three-months ended March 30, 2024 compared to the prior year primarily relate to discrete divestiture activity recorded during the quarter ended April 1, 2023 and the integration of the CMC acquisition. The year-to-date income tax expense in 2024 and 2023 includes a discrete benefit of $2.6 million and discrete expense of $0.1 million, respectively, recorded in connection with share-based compensation.

The Organization for Economic Co-operation and Development introduced Base Erosion and Profit Shifting Pillar 2 rules that seek to impose a global minimum income tax rate of 15%. Numerous countries have enacted legislation in connection therewith that is effective on January 1, 2024. We have evaluated the impact of this legislation based on Entegris’ current global operations and it is not expected to have a material impact on the annual effective tax rate and there was not a material impact to the quarter ending March 30, 2024. We will continue to update our analysis and monitor the ongoing legislation throughout the year.