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INCOME TAXES | 12 Months Ended
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Dec. 25, 2016
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Income before income taxes by jurisdiction is as follows:
| 2016 |  | 2015 |  | 2014
| (In thousands)
U.S. | $ | 532,853 |  |  | $ | 920,250 |  |  | $ | 953,027 |
Foreign | 139,782 |  |  | 72,508 |  |  | 149,364 |
Total | $ | 672,635 |  |  | $ | 992,758 |  |  | $ | 1,102,391 |
The components of income tax expense (benefit) are set forth below:
| 2016 |  | 2015 |  | 2014
| (In thousands)
Current: |  |  |
Federal | $ | 165,989 |  |  | $ | 248,821 |  |  | $ | 262,403 |
Foreign | 50,130 |  |  | 43,638 |  |  | 22,867 |
State and other | 20,211 |  |  | 26,019 |  |  | 24,056 |
Total current | 236,330 |  |  | 318,478 |  |  | 309,326 |
Deferred: |  |  |  |  |
Federal | (3,529 | ) |  | 32,819 |  |  | 29,737 |
Foreign | (880 | ) |  | (11,249 | ) |  | 31,332 |
State and other | 985 |  |  | 6,748 |  |  | 20,558 |
Total deferred | (3,424 | ) |  | 28,318 |  |  | 81,627 |
| $ | 232,906 |  |  | $ | 346,796 |  |  | $ | 390,953 |
The effective tax rate for 2016 was 34.6% compared to 34.9% for 2015 and 35.5% for 2014. The following table reconciles the statutory U.S. federal income tax rate to the Company’s effective income tax rate:
| 2016 |  | 2015 |  | 2014 |
Federal income tax rate | 35.0 |  | % | 35.0 |  | % | 35.0 |  | %
State tax rate, net | 2.4 |  |  | 2.3 |  |  | 2.6 |  |
Permanent items | (0.3 | ) |  | 0.1 |  |  | 0.4 |  |
Domestic production activity | (1.3 | ) |  | (1.9 | ) |  | (2.4 | ) |
Difference in U.S. statutory tax rate and foreign country effective tax rate | (1.4 | ) |  | (0.9 | ) |  | (1.0 | ) |
Tax credits | (0.6 | ) |  | (0.7 | ) |  | — |  |
Other | 0.8 |  |  | 1.0 |  |  | 0.9 |  |
Total | 34.6 |  | % | 34.9 |  | % | 35.5 |  | %
Significant components of the Company’s deferred tax liabilities and assets are as follows:
| December 25, 2016 |  | December 27, 2015
| (In thousands)
Deferred tax liabilities: |  |  |
PP&E and identified intangible assets | $ | 182,433 |  |  | $ | 151,761 |
Inventories | 93,114 |  |  | 97,743 |
Insurance claims and losses | 42,186 |  |  | 39,800 |
Other | 6,252 |  |  | 15,054 |
Total deferred tax liabilities | 323,985 |  |  | 304,358 |
Deferred tax assets: |  |  |
Net operating losses | 3,396 |  |  | 4,297 |
Foreign net operating losses | 13,446 |  |  | 16,595 |
Credit carry forwards | 2,080 |  |  | 2,638 |
Allowance for doubtful accounts | 4,274 |  |  | 4,382 |
Accrued liabilities | 57,567 |  |  | 56,753 |
Workers compensation | 38,834 |  |  | 41,217 |
Pension and other postretirement benefits | 21,903 |  |  | 22,559 |
Other | 46,066 |  |  | 31,956 |
Total deferred tax assets | 187,566 |  |  | 180,397 |
Valuation allowance | (6,232 | ) |  | (7,921 | )
Net deferred tax assets | 181,334 |  |  | 172,476 |
Net deferred tax liabilities | $ | 142,651 |  |  | $ | 131,882 |
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carry back and carry forward periods), projected future taxable income and tax-planning strategies in making this assessment. As of December 25, 2016, the Company believes it has sufficient positive evidence to conclude that realization of its federal and state net deferred tax assets is more likely than not to be realized. The decrease in valuation allowance of $1.7 million during 2016 was primarily due to a decrease in capital loss carry-forwards and foreign net operating losses. As of December 25, 2016, the Company’s valuation allowance is $6.2 million, of which $0.7 million relates to capital loss carry forwards and state net operating losses and $5.5 million relates to its Mexico operations. As of December 25, 2016, the Company had state net operating loss carry forwards of approximately $112.5 million that will begin to expire in 2017. The Company also had Mexico net operating loss carry forwards at December 25, 2016 of approximately $28.9 million that begin to expire in 2017. As of December 25, 2016, the Company had approximately $1.8 million of state tax credit carry forwards that begin to expire in 2018. On November 6, 2009, H.R. 3548 was signed into law and included a provision that allowed most business taxpayers an increased carry back period for net operating losses incurred in 2008 or 2009. As a result, during 2009 the Company utilized $547.7 million of its U.S. federal net operating losses under the expanded carry back provisions of H.R. 3548 and filed a claim for refund of $169.7 million. The Company received $122.6 million in refunds from the Internal Revenue Service (“IRS”) from the carry back claims during 2010. The Company anticipates receipt of the remainder of its claim pending resolution of its litigation with the IRS. See “Note 17. Commitments and Contingencies” for additional information. The Company has not provided any deferred income taxes on the undistributed earnings of its Mexico and Puerto Rico subsidiaries as of December 25, 2016 based upon the determination that such earnings will be indefinitely reinvested. It is not practicable to determine the amount of incremental taxes that might arise if these earnings were to be remitted. For the fifty-two weeks ended December 25, 2016 and December 27, 2015, there is a tax effect of $3.2 million and $2.2 million, respectively, reflected in other comprehensive income. For the fifty-two weeks ended December 27, 2015, there is a tax effect of $6.5 million reflected in additional paid-in capital due to excess tax benefits related to compensation on dividend equivalent rights and vested stock awards. There were no excess tax benefits for the fifty-two weeks ended December 25, 2016. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
| December 25, 2016 |  | December 27, 2015
| (In thousands)
Unrecognized tax benefits, beginning of year | $ | 17,110 |  |  | $ | 17,396 |
Increase as a result of tax positions taken during the current year | 1,031 |  |  | 1,015 |
Increase as a result of tax positions taken during prior years | 16 |  |  | 27 |
Decrease as a result of tax positions taken during prior years | (140 | ) |  | (139 | )
Decrease for lapse in statute of limitations | (1,204 | ) |  | (1,189 | )
Unrecognized tax benefits, end of year | $ | 16,813 |  |  | $ | 17,110 |
Included in unrecognized tax benefits of $16.8 million at December 25, 2016, was $7.3 million of tax benefits that, if recognized, would reduce the Company’s effective tax rate. It is not practicable at this time to estimate the amount of unrecognized tax benefits that will change in the next twelve months. The Company recognizes interest and penalties related to unrecognized tax benefits in its provision for income taxes. As of December 25, 2016, the Company had recorded a liability of $8.2 million for interest and penalties. During 2016, accrued interest and penalty amounts related to uncertain tax positions decreased by $1.2 million. The Company operates in the U.S. (including multiple state jurisdictions), Puerto Rico and Mexico. With few exceptions, the Company is no longer subject to U.S. federal, state or local income tax examinations for years prior to 2010 and is no longer subject to Mexico income tax examinations by taxing authorities for years prior to 2010. The Company has a tax sharing agreement with JBS USA Holdings effective for tax years beginning 2010. The net tax receivable for tax year 2016 of $5.0 million was accrued in 2016 as a capital contribution and an account receivable from a related party in our Consolidated Balance Sheet.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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