INCOME TAXES |
3 Months Ended |
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Mar. 31, 2026 | |
| Income Tax Disclosure [Abstract] | |
| INCOME TAXES | INCOME TAXES Our estimated annual effective tax rate (EAETR) is based on full-year expectations of pretax earnings, statutory tax rates and permanent differences between book and tax accounting such as percentage depletion. For interim financial reporting, we calculate our quarterly income tax provision in accordance with the EAETR. Each quarter, we update our EAETR based on our revised full-year expectation of pretax earnings and calculate the income tax provision so that the year-to-date income tax provision reflects the EAETR. Significant judgment is required in determining our EAETR. Certain taxes may be computed outside of the EAETR and recognized when the event occurs, such as payments of share-based awards and significant, unusual, or infrequently occurring events. In the first quarter of 2026, we recorded income tax expense from continuing operations of $45.9 million compared to $33.8 million in the first quarter of 2025. The increase in tax expense was primarily due to the increase in pretax earningsAs discussed in Note 8, in May 2022, Mexican government officials unexpectedly and arbitrarily shut down our Calica operations in Mexico. In 2025, Calica had deferred tax assets (including net operating losses) of $37.3 million against which we have a full valuation allowance recorded. In 2026, we project a $6.3 million increase in deferred tax assets against which we have recorded a valuation allowance as a component of the EAETR. A majority of the deferred tax assets relate to a net operating loss (NOL) carryforward which would expire between 2032 and 2036 if not utilized. Should the Mexican government lift the shutdown and/or if we are successful in our North American Free Trade Agreement (NAFTA) claim, we will reevaluate the need for a valuation allowance against the deferred tax assets. Additionally, Calica is under examination by the Mexican Servicio de Administración Tributaria (SAT) for tax years 2018 and 2019. In the fourth quarter of 2025, SAT issued Calica an audit findings letter for 2018. Among other claims, SAT asserts that Calica had no right to mine and has denied its cost of goods sold deduction. We have recognized the full tax benefit associated with Calica’s cost of goods sold deduction in Mexico, as we believe it is more likely than not that the position will be sustained based upon the technical merits of the position. This position is strictly binary as our tax liability hinges entirely on the legal basis that Calica had the necessary rights to conduct its mining operations during the period in question. Should we be unsuccessful in defending this tax position related to the 2018 audit, we may incur a one-time cash outflow and tax expense of approximately $35 million, which includes $23 million of interest and penalties. We project Alabama NOL carryforward deferred tax assets at December 31, 2026 of $44.5 million against which we have a valuation allowance of $32.4 million. We expect $9.5 million of the Alabama NOL carryforward to expire in 2026 resulting in a tax benefit of $0.8 million (recorded as a component of the EAETR) compared to the previous amount of valuation allowance recorded. Almost all of the Alabama NOL carryforward would expire between 2026 and 2029 if not utilized. In August 2022, the Inflation Reduction Act (IRA) was signed into law, effective for tax years beginning on or after January 1, 2023. The IRA introduced a corporate alternative minimum tax (CAMT) of 15% applicable to corporations with adjusted financial statement income (AFSI) in excess of $1 billion determined on a prior three-year average. In 2026, we anticipate our average AFSI will exceed the applicable threshold which subjects us to CAMT for the current year and all future years. However, we do not expect to pay any CAMT in 2026. In July 2025, President Trump signed into law H.R.1 - One Big Beautiful Bill Act. Certain provisions relevant to us became effective beginning January 1, 2026, but none are material to our effective tax rate. A summary of our deferred tax assets and liabilities is included in Note 9 “Income Taxes” in our Annual Report on Form 10-K for the year ended December 31, 2025.
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