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INCOME TAXES
 12 Months Ended
Dec. 25, 2021
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The components of income from continuing operations before income taxes and the related provision for income taxes are presented below:
 Fiscal Year
 202120202019
(in thousands)
Income before income taxes:   
U.S. $129,598 $226,935 $108,326 
Non-U.S. 351,112 220,179 195,758 
Total income before income taxes$480,710 $447,114 $304,084 
Income tax provision (benefit):   
Current:   
Federal$32,728 $38,192 $18,101 
Foreign60,197 35,410 43,489 
State9,257 6,623 9,915 
Total current102,182 80,225 71,505 
Deferred:   
Federal(27,486)386 (3,226)
Foreign13,891 5,583 (17,111)
State(6,714)(4,386)(1,145)
Total deferred(20,309)1,583 (21,482)
Total provision for income taxes$81,873 $81,808 $50,023 
Included in the fiscal year 2019 income tax expense of $50.0 million is a $20.6 million tax benefit for the recognition of $315.5 million of historical foreign net operating loss deferred tax assets, partially offset by a $294.9 million valuation allowance. Prior to 2019, these deferred tax assets were not recognized as the Company believed the ability to utilize the net operating losses
was remote. As a result of both changes to U.S. tax law and European tax legislation, the Company made changes in 2019 to its financing structure, resulting in the ability to utilize a portion of the net operating losses previously considered remote in nature. 
Reconciliations of the statutory U.S. federal income tax rate to effective tax rates are as follows:
Fiscal Year
202120202019
U.S. statutory income tax rate21.0 %21.0 %21.0 %
Foreign tax rate differences0.1 1.2 2.7 
State income taxes, net of federal tax benefit0.8 0.4 2.6 
Non-deductible compensation1.2 1.0 1.7 
Research tax credits and enhanced deductions(5.0)(3.4)(4.4)
Stock-based compensation(4.3)(2.7)(2.2)
Enacted tax rate changes3.0 0.7 (0.4)
Tax on unremitted earnings1.8 1.3 1.7 
Impact of tax uncertainties0.7 (0.2)(2.6)
Impact of acquisitions and restructuring(1.6)0.5 2.7 
Net operating loss deferred tax asset recognition, net of valuation allowance (NOL DTA)— (0.1)(6.8)
Other(0.7)(1.4)0.5 
Effective income tax rate17.0 %18.3 %16.5 %
The components of deferred tax assets and liabilities are as follows:
December 25, 2021December 26, 2020
(in thousands)
Deferred tax assets:
Compensation$28,900 $32,118 
Accruals and reserves23,760 17,970 
Net operating loss and credit carryforwards410,156 406,085 
Operating lease liability65,592 43,646 
Other8,323 4,253 
Valuation allowance(315,645)(334,845)
Total deferred tax assets221,086 169,227 
Deferred tax liabilities:
Goodwill and other intangibles(280,081)(202,430)
Depreciation related(35,514)(33,277)
Venture capital investments(16,018)(32,848)
Tax on unremitted earnings(21,060)(27,707)
Right-of-use assets(64,257)(43,557)
Other(3,650)(8,710)
Total deferred tax liabilities(420,580)(348,529)
Net deferred taxes$(199,494)$(179,302)
The Company has recognized its deferred tax assets on the belief that it is more likely than not that they will be realized. The only exceptions relate to deferred tax assets primarily for net operating losses in Luxembourg, Sweden, certain capital losses, and fixed assets in the U.K.
A reconciliation of the Company’s beginning and ending valuation allowance are as follows:
Fiscal Year
202120202019
Beginning balance$334,845 $309,962 $9,788 
Additions (reductions) charged to income tax provision, net1,023 (2,707)299,197 
Additions due to acquisitions7,747 — 924 
Reductions due to divestitures, restructuring(4,706)— — 
Currency translation and other(23,264)27,590 53 
Ending balance$315,645 $334,845 $309,962 
As of December 25, 2021, the Company had tax-effected deferred tax assets for net operating loss carryforwards of $368.5 million, as compared to $369.0 million as of December 26, 2020. Of this amount, $24.9 million are definite-lived and begin to expire in 2022, and the remainder of $343.6 million can be carried forward indefinitely. The Company has deferred tax assets for tax credit carryforwards of $41.7 million. Of this amount, $40.4 million are definite-lived and begin to expire after 2038, the remainder of $1.3 million can be carried forward indefinitely. Additionally, the Company records a benefit to operating income for research and development and other credits in Quebec, France, the Netherlands, and the U.K. related to its DSA facilities. Additionally, the Company records a benefit to operating income for research and development and other credits in Quebec, France, the Netherlands, and the U.K. related to its DSA facilities.
A reconciliation of the Company’s beginning and ending unrecognized income tax benefits is as follows:
Fiscal Year
202120202019
(in thousands)
Beginning balance$24,970 $19,665 $18,827 
Additions to tax positions for current year9,544 7,044 3,691 
Additions to tax positions for prior years2,476 4,589 5,234 
Reductions to tax positions for prior years(1,330)(127)(1,033)
Settlements(1,870)(5,859)(274)
Expiration of statute of limitations(1,198)(342)(6,780)
Ending balance$32,592 $24,970 $19,665 
The $7.6 million increase in unrecognized income tax benefits during fiscal year 2021 as compared to the corresponding period in 2020 is primarily attributable to tax positions associated with our international financing structure, an additional year of Canadian Scientific Research and Experimental Development (SR&ED) credit, and acquired uncertain tax positions.
The amount of unrecognized income tax benefits that, if recognized, would favorably impact the effective tax rate was $30.0 million as of December 25, 2021 and $22.6 million as of December 26, 2020. The $7.4 million increase is primarily due to the same items noted above. It is reasonably possible as of December 25, 2021 that the liability for unrecognized tax benefits for the uncertain tax position will decrease by approximately $10 million over the next twelve-month period. The Company continues to recognize interest and penalties related to unrecognized income tax benefits in income tax expense. The total amount of cumulative accrued interest related to unrecognized income tax benefits as of December 25, 2021 and December 26, 2020 was $1.7 million and $2.4 million, respectively. Interest expense recorded as a component of income taxes was immaterial for all periods. There were no accrued penalties related to unrecognized income tax benefits as of December 25, 2021 or as of December 26, 2020.
The Company conducts business in a number of tax jurisdictions. As a result, it is subject to tax audits on a regular basis including, but not limited to, such major jurisdictions as the U.S., the U.K., China, France, Germany, and Canada. With few exceptions, the Company is no longer subject to U.S. and international income tax examinations for years before 2018.
The Company and certain of its subsidiaries have ongoing tax controversies in the U.S., Canada, Germany, and France. The Company does not anticipate resolution of these audits will have a material impact on its consolidated financial statements.