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INCOME TAXES | 12 Months Ended
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Dec. 25, 2021
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Earnings before income taxes and equity in earnings of nonconsolidated subsidiaries are as follows:
| 2021 |  | 2020 |  | 2019
United States | $ | 202,051 |  |  | $ | 169,281 |  |  | $ | 166,108 |
Foreign | 58,032 |  |  | 23,487 |  |  | 33,750 |
| $ | 260,083 |  |  | $ | 192,768 |  |  | $ | 199,858 |
Income tax expense (benefit) consists of:
| 2021 |  | 2020 |  | 2019
Current: |  |  |  |  |
Federal | $ | 30,031 |  |  | $ | 30,431 |  |  | $ | 27,809 |
State | 8,891 |  |  | 8,302 |  |  | 5,568 |
Foreign | 20,644 |  |  | 12,730 |  |  | 13,130 |
| 59,566 |  |  | 51,463 |  |  | 46,507 |
Non-current: | 1,777 |  |  | (451) |  |  | (240) |
Deferred: |  |  |  |  |
Federal | 4,587 |  |  | (6,086) |  |  | 47 |
State | 558 |  |  | (822) |  |  | 160 |
Foreign | (5,074) |  |  | 5,511 |  |  | 1,279 |
| 71 |  |  | (1,397) |  |  | 1,486 |
| $ | 61,414 |  |  | $ | 49,615 |  |  | $ | 47,753 |
The reconciliations of the statutory federal income tax rate and the effective tax rate follows:
| 2021 |  | 2020 |  | 2019
Statutory federal income tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes, net of federal benefit | 2.9 |  |  | 3.5 |  |  | 2.5 |
Carryforwards, credits and changes in valuation allowances | 1.5 |  |  | (1.6) |  |  | (1.0) |
Foreign tax rate differences | (0.1) |  |  | (1.7) |  |  | 0.3 |
Changes in unrecognized tax benefits | 0.7 |  |  | 0.2 |  |  | (0.1) |
Goodwill and intangible impairment | — |  |  | 2.4 |  |  | — |
Other | (2.4) |  |  | 1.9 |  |  | 1.2 |
| 23.6 | % |  | 25.7 | % |  | 23.9 | %
Fiscal 2021 includes $1,894 of U.S. tax benefits related to foreign taxes paid offset by $5,102 of valuation allowance recorded against the Offshore and other complex steel structures deferred tax assets. Fiscal year 2020 includes $4,651 of tax expense related to non-tax deductible impairment of goodwill. Fiscal year 2020 also includes $1,100 of tax expense primarily related to restructuring charges for which no tax benefits have been recorded due to the increase in valuation allowance. Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating loss and tax credit carryforwards. The tax effects of significant items comprising the Company’s net deferred income tax assets/liabilities are as follows:
| 2021 |  | 2020
Deferred income tax assets: |  |  |
Accrued expenses and allowances | $ | 21,241 |  |  | $ | 17,203 |
Tax credits and loss carryforwards | 83,690 |  |  | 81,912 |
Defined benefit pension liability | 134 |  |  | 30,623 |
Inventory allowances | 2,818 |  |  | — |
Accrued compensation and benefits | 24,302 |  |  | 23,545 |
Lease liabilities | 41,128 |  |  | 23,715 |
Deferred compensation | 10,893 |  |  | 13,883 |
Gross deferred income tax assets | 184,206 |  |  | 190,881 |
Valuation allowance | (54,256) |  |  | (44,451) |
Net deferred income tax assets | 129,950 |  |  | 146,430 |
Deferred income tax liabilities: |  |  |
Property, plant and equipment | 37,686 |  |  | 35,701 |
Intangible assets | 48,244 |  |  | 43,699 |
Inventory allowances | — |  |  | 5,705 |
Lease assets | 41,128 |  |  | 23,715 |
Other deferred tax liabilities | 5,041 |  |  | 5,248 |
Total deferred income tax liabilities | 132,099 |  |  | 114,068 |
Net deferred income tax asset (liability) | $ | (2,149) |  |  | $ | 32,362 |
Deferred income tax assets (liabilities) are presented as follows on the Consolidated Balance Sheets:
Balance Sheet Caption | 2021 |  | 2020
Other assets | $ | 45,700 |  |  | $ | 74,051 |
Deferred income taxes | (47,849) |  |  | (41,689) |
Net deferred income tax asset (liability) | $ | (2,149) |  |  | $ | 32,362 |
Management of the Company has reviewed recent operating results and projected future operating results. The Company's belief that realization of its net deferred tax assets is more likely than not is based on, among other factors, changes in operations that have occurred in recent years and available tax planning strategies. At December 25, 2021 and December 26, 2020 respectively, there were $83,690 and $81,912 relating to tax credits and loss carryforwards. Valuation allowances have been established for certain losses that reduce deferred tax assets to an amount that will, more likely than not, be realized. During fiscal 2021, it was determined no longer more likely than not that the Offshore and complex steel structures reporting unit, based in Denmark, would generate future taxable income so a valuation allowance of $5,102 was recognized against their tax loss carryforwards. Also in 2021, the Company recorded a valuation allowance of $6,472 against the tax attributes related to the acquisition of Prospera. The deferred tax assets at December 25, 2021 that are associated with tax loss and tax credit carryforwards not reduced by valuation allowances expire in periods starting in 2023. Uncertain tax positions included in other non-current liabilities are evaluated in a two-step process, whereby (1) the Company determines whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more likely than not recognition threshold, the Company would recognize the largest amount of tax benefit that is greater than fifty percent likely to be realized upon ultimate settlement with the related tax authority. The following summarizes the activity related to our unrecognized tax benefits in 2021 and 2020, in thousands:
| 2021 |  | 2020
Gross unrecognized tax benefits—beginning of year | $ | 1,864 |  |  | $ | 2,300 |
Gross increases—tax positions in prior period | 1,315 |  |  | — |
Gross decreases—tax positions in prior period | (6) |  |  | (1) |
Gross increases—current‑period tax positions | 240 |  |  | 398 |
Settlements with taxing authorities | — |  |  | (183) |
Lapse of statute of limitations | (749) |  |  | (650) |
Gross unrecognized tax benefits—end of year | $ | 2,664 |  |  | $ | 1,864 |
There are approximately $406 of uncertain tax positions for which reversal is reasonably possible during the next 12 months due to the closing of the statute of limitations. The nature of these uncertain tax positions is generally the computation of a tax deduction or tax credit. During 2021, the Company recorded a reduction of its gross unrecognized tax benefit of $749 with $592 recorded as a reduction of income tax expense, due to the expiration of statutes of limitation in the United States. During 2020, the Company recorded a reduction of its gross unrecognized tax benefit of $650, with $513 recorded as a reduction of its income tax expense, due to the expiration of statutes of limitation in the United States. In addition to these amounts, there was an aggregate of $1,758 and $845 of interest and penalties at December 25, 2021 and December 26, 2020, respectively. The Company’s policy is to record interest and penalties directly related to income taxes as income tax expense in the Consolidated Statements of Earnings. The Company files income tax returns in the U.S. and various states as well as foreign jurisdictions. Tax years 2017 and forward remain open under U.S. statutes of limitation. The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $4,324 and $2,547 at December 25, 2021 and December 26, 2020, respectively.

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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