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INCOME TAXES
 12 Months Ended
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:    
202120202019
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:
202120202019
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:
202120202019
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:
20212020
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
20212020
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:
20212020
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.