INCOME TAXES

6 Months Ended

Jul. 02, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company recognized an income tax benefit of $62.8 million and $39.9 million for the three and six months ended July 2, 2022, respectively, resulting in effective tax rates of (395.0)% and (20.5)%. These effective tax rates differ from the U.S. statutory tax rate primarily due to a benefit associated with the anticipated disposition of the Company's Oil & Gas business, the continued reorganization of the supply chain, the impact of lower forecasted earnings in North America and the re-measurement of uncertain tax positions. Excluding the impacts of the acquisition-related and other charges, the effective tax rates were (3.9)% and 6.4% for the three and six months ended July 2, 2022, respectively. These effective tax rates differ from the U.S. statutory tax rate due to the items discussed above, excluding the benefit associated with the anticipated disposition of the Company's Oil & Gas business.

The Company recognized income tax expense of $67.3 million and $182.8 million for the three and six months ended July 3, 2021, respectively, resulting in effective tax rates of 13.6% and 17.1%. Excluding the impacts of the acquisition-related and other charges, the effective tax rates were 14.3% and 17.5% for the three and six months ended July 3, 2021, respectively. These effective tax rates differ from the U.S. statutory tax rate primarily due to tax on foreign earnings, the re-measurement of uncertain tax position reserves, the re-measurement of the deferred tax assets and liabilities due to foreign corporate income tax rate changes, and the tax benefit of equity-based compensation.

The Company considers many factors when evaluating and estimating its tax positions and the impact on income tax expense, which may require periodic adjustments, and which may not accurately anticipate actual outcomes. It is reasonably possible that the amount of the unrecognized benefit with respect to certain of the Company's unrecognized tax positions will significantly increase or decrease within the next twelve months. However, based on the uncertainties associated with finalizing audits with the relevant tax authorities including formal legal proceedings, it is not possible to reasonably estimate the impact of any such change.