XML 41 R21.htm IDEA: XBRL DOCUMENT
v3.24.0.1

INCOME TAXES | 12 Months Ended
--- | ---
Dec. 31, 2023
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Income (loss) before income taxes by jurisdiction is as follows:
| Year Ended
| December 31, 2023 |  | December 25, 2022 |  | December 26, 2021
| (In thousands)
U.S. | $ | 26,887 |  |  | $ | 928,709 |  |  | $ | (141,940) |
Foreign | 338,335 |  |  | 96,764 |  |  | 234,330 |
Total | $ | 365,222 |  |  | $ | 1,025,473 |  |  | $ | 92,390 |
The components of income tax expense (benefit) are set forth below:
| Year Ended
| December 31, 2023 |  | December 25, 2022 |  | December 26, 2021
| (In thousands)
Current: |  |  |  |  |
Federal | $ | (19,727) |  |  | $ | 169,660 |  |  | $ | 22,591 |
Foreign | 59,326 |  |  | 52,995 |  |  | 115,772 |
State and other | (3,369) |  |  | 34,985 |  |  | 9,150 |
Total current | 36,230 |  |  | 257,640 |  |  | 147,513 |
Deferred: |  |  |  |  |
Federal | 12,783 |  |  | 14,654 |  |  | (52,147) |
Foreign | (10,573) |  |  | 5,694 |  |  | (16,225) |
State and other | 4,465 |  |  | 947 |  |  | (18,019) |
Total deferred | 6,675 |  |  | 21,295 |  |  | (86,391) |
Total | $ | 42,905 |  |  | $ | 278,935 |  |  | $ | 61,122 |
The effective tax rate for 2023 was 11.7% compared to 27.2% for 2022 and 66.2% for 2021. The following table reconciles the statutory U.S. federal income tax rate to the Company’s effective income tax rate:
| Year Ended
| December 31, 2023 |  | December 25, 2022 |  | December 26, 2021
Federal income tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State tax rate, net | 0.6 |  |  | 3.2 |  |  | (4.5) |
Mexico tax audit | — |  |  | 3.8 |  |  | — |
Intercompany financing | (5.7) |  |  | (1.9) |  |  | (14.1) |
Permanent items | (0.9) |  |  | (0.9) |  |  | 1.7 |
Difference in U.S. statutory tax rate and foreign country effective tax rate | 5.2 |  |  | 1.2 |  |  | 22.3 |
Rate change | (0.7) |  |  | (0.9) |  |  | 26.6 |
Foreign currency translation | (7.4) |  |  | (0.9) |  |  | 10.6 |
Tax credits | (3.0) |  |  | (0.4) |  |  | (4.1) |
Change in reserve for unrecognized tax benefits | — |  |  | (0.4) |  |  | 7.3 |
Change in valuation allowance | 6.9 |  |  | 2.8 |  |  | (0.2) |
Return to provision | (4.1) |  |  | — |  |  | — |
Other | (0.2) |  |  | 0.6 |  |  | (0.4) |
Total | 11.7 | % |  | 27.2 | % |  | 66.2 | %
Included in the return to provision is a decrease of (4.2)% in the effective tax rate related to a return to provision amount from the 2020 federal income tax return due to deconsolidation. The amount was recorded during the year ended December 31, 2023. Included in the Mexico tax audit is an increase of 3.8% in the effective tax rate related to the Mexican tax authority’s claim that Avícola Pilgrim’s Pride de Mexico, S.A. de C.V. (“Avícola”) should have considered dividends paid out of its subsidiaries as partially taxable in tax years 2009 and 2010. The amount was recorded during the year ended December 25, 2022. Included in the change in reserve for unrecognized tax benefits is an increase of 7.0% in the effective tax rate related to interest deductions in the U.K. for tax years 2017 through 2021. The amount was recorded during the year ended December 25, 2021. Significant components of the Company’s deferred tax liabilities and assets are as follows:
| December 31, 2023 |  | December 25, 2022
| (In thousands)
Deferred tax liabilities: |  |  |
PP&E and identified intangible assets | $ | 519,458 |  |  | $ | 547,113 |
Inventories | 99,144 |  |  | 99,889 |
Incentive compensation | 8,984 |  |  | 11,138 |
Operating lease assets | 81,942 |  |  | 76,914 |
Other | 2,534 |  |  | 7,867 |
Total deferred tax liabilities | 712,062 |  |  | 742,921 |
Deferred tax assets: |  |  |
U.S. net operating losses | 24,902 |  |  | 12,297 |
Foreign net operating losses | 55,583 |  |  | 53,801 |
Credit carry forwards | 23,985 |  |  | 18,102 |
Allowance for credit losses | 5,167 |  |  | 9,197 |
Accrued liabilities | 81,156 |  |  | 127,714 |
Workers’ compensation | 5,361 |  |  | 4,192 |
Pension and other postretirement benefits | — |  |  | 3,351 |
Operating lease liabilities | 80,823 |  |  | 76,914 |
Advance payments | 22,774 |  |  | 68,361 |
Interest expense limitations | 93,685 |  |  | 37,353 |
Other | 26,428 |  |  | 33,785 |
Total deferred tax assets | 419,864 |  |  | 445,067 |
Valuation allowance | (88,460) |  |  | (64,361) |
Net deferred tax assets | 331,404 |  |  | 380,706 |
Net deferred tax liabilities | $ | 380,658 |  |  | $ | 362,215 |
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 31, 2023, the Company believes it has sufficient positive evidence to conclude that realization of its federal, state and foreign net deferred tax assets are more likely than not to be realized. As of December 31, 2023, the Company’s valuation allowance is $88.5 million, of which $11.0 million relates to our U.K. and Europe operations, $0.1 million relates to our Mexico operations, $53.0 million relates to Onix Investments UK Limited, Sandstone Holdings Sàrl and Arkose Investments ULC, indirect subsidiaries of Pilgrim’s, $11.8 million relates to our Puerto Rico operations, $11.8 million relates to U.S. foreign tax credits and $0.8 million relates to state net operating losses.
| Beginning Balance |  | Additions |  | Deductions |  | Ending Balance
| (In thousands)
Valuation allowance: |  |  |  |  |  |  |
2023 | $ | 64,361 |  |  | $ | 25,296 |  |  | $ | (1,197) |  |  | $ | 88,460 |
2022 | 24,261 |  |  | 43,188 |  |  | (3,088) |  |  | 64,361 |
2021 | 33,678 |  |  | — |  |  | (9,417) |  |  | 24,261 |
As of December 31, 2023, the Company had state net operating loss carry forwards of approximately $104.8 million that begin to expire in 2024. The Company also had Mexico net operating loss carry forwards as of December 31, 2023 of approximately $4.3 million that begin to expire in 2028. The Company also had U.K. net operating loss carry forwards as of December 31, 2023 of approximately $202.6 million that may be carried forward indefinitely. As of December 31, 2023, the Company had approximately $5.8 million of state tax credit carry forwards that begin to expire in 2024. For the years ended December 31, 2023 and December 25, 2022, there is a tax effect of $(2.1) million and $(2.5) million, respectively, reflected in other comprehensive loss. For the years ended December 31, 2023 and December 25, 2022, there are immaterial tax effects reflected in income tax expense due to excess tax benefits and shortfalls related to stock-based compensation. See “Note 1. Business and Summary of Significant Accounting Policies” for additional information. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
| December 31, 2023 |  | December 25, 2022
| (In thousands)
Unrecognized tax benefits, beginning of year | $ | 27,585 |  |  | $ | 20,242 |
Increase as a result of tax positions taken during prior years | 17,415 |  |  | 13,950 |
Decrease for lapse in statute of limitations | (7,201) |  |  | (6,473) |
Decrease for tax positions of prior years | (234) |  |  | (134) |
Unrecognized tax benefits, end of year | $ | 37,565 |  |  | $ | 27,585 |
Included in unrecognized tax benefits of $37.6 million as of December 31, 2023, was $18.0 million of tax benefits that, if reco gnized, 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 31, 2023, the Company had recorded a liability of $5.9 million for interest and penalties. During 2023, accrued interest and penalty amounts related to uncertain tax positions increased by $2.7 million. The Company operates in the U.S. (including multiple state jurisdictions), Puerto Rico and several foreign locations including Mexico, the U.K., the Republic of Ireland, and continental Europe. With few exceptions, the Company is no longer subject to examinations by taxing authorities for years prior to 2019 in U.S. federal, state and local jurisdictions, for years prior to 2010 in Mexico, and for years prior to 2017 in the U.K. The Company has a tax sharing agreement with JBS USA Holdings effective for tax years beginning 2010. $1.4 million net tax receivable was accrued in 2023 as a capital contribution and an account receivable from a related party in our Consolidated Balance Sheet. The 2023 tax sharing accrual is related to true-ups of prior year tax sharing accruals. No tax sharing receivable or payable is accrued for the 2023 tax year.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration