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INCOME TAXES
 12 Months Ended
Dec. 29, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Income (loss) before income taxes by jurisdiction is as follows:
Year Ended
December 29, 2024December 31, 2023December 25, 2022
 (In thousands)
U.S.$1,428,497 $26,887 $928,709 
Foreign(16,228)338,335 96,764 
Total$1,412,269 $365,222 $1,025,473 
The components of income tax expense (benefit) are set forth below:
Year Ended
December 29, 2024December 31, 2023December 25, 2022
 (In thousands)
Current
Federal$172,269 $(19,727)$169,660 
Foreign113,194 59,326 52,995 
State and other34,752 (3,369)34,985 
Total current320,215 36,230 257,640 
Deferred
Federal21,334 12,783 14,654 
Foreign(25,697)(10,573)5,694 
State and other9,194 4,465 947 
Total deferred4,831 6,675 21,295 
Total$325,046 $42,905 $278,935 
The effective tax rate for 2024 was 23.0% compared to 11.7% for 2023 and 27.2% for 2022.
The following table reconciles the statutory U.S. federal income tax rate to the Company’s effective income tax rate:
Year Ended
December 29, 2024December 31, 2023December 25, 2022
Federal income tax rate21.0 %21.0 %21.0 %
State tax rate, net2.4 0.6 3.2 
Global intangible low-taxed income0.1 — — 
Mexico tax audit— — 3.8 
Intercompany financing(0.9)(5.7)(1.9)
Permanent items1.7 (0.9)(0.9)
Difference in U.S. statutory tax rate and foreign country effective tax rate2.3 5.2 1.2 
Rate change(0.5)(0.7)(0.9)
Foreign currency translation(0.8)(7.4)(0.9)
Tax credits(0.8)(3.0)(0.4)
Change in reserve for unrecognized tax benefits0.1 — (0.4)
Change in valuation allowance(0.2)6.9 2.8 
Return to provision0.1 (4.1)— 
Other(1.5)(0.2)0.6 
Total23.0 %11.7 %27.2 %
Included in the Mexico tax audit item in above table 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.

Significant components of the Company’s deferred tax liabilities and assets are as follows:
December 29, 2024December 31, 2023
 (In thousands)
Deferred tax liabilities
PP&E and identified intangible assets$495,571 $519,458 
Inventories93,513 99,144 
Incentive compensation— 8,984 
Operating lease assets63,717 81,942 
Other6,959 2,534 
Total deferred tax liabilities659,760 712,062 
Deferred tax assets
U.S. net operating losses14,603 24,902 
Foreign net operating losses49,166 55,583 
Credit carry forwards20,099 23,985 
Allowance for credit losses3,532 5,167 
Accrued liabilities92,565 81,156 
Workers’ compensation7,172 5,361 
Incentive compensation1,161 — 
Operating lease liabilities63,717 80,823 
Advance payments— 22,774 
Interest expense limitations72,615 93,685 
Other27,918 26,428 
Total deferred tax assets352,548 419,864 
Valuation allowance(86,257)(88,460)
Net deferred tax assets266,291 331,404 
Net deferred tax liabilities$393,469 $380,658 
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 29, 2024, 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 29, 2024, the Company’s valuation allowance is $86.3 million, of which $10.6 million relates to our Europe operations, $0.3 million relates to our Mexico operations, $50.9 million relates to Onix Investments UK Limited, Sandstone Holdings Sàrl and Arkose Investments ULC, indirect subsidiaries of Pilgrim’s, $11.9 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 BalanceAdditionsDeductionsEnding Balance
(In thousands)
Valuation allowance
2024$88,460 $637 $(2,840)$86,257 
202364,361 25,296 (1,197)88,460 
202224,261 43,188 (3,088)64,361 
As of December 29, 2024, the Company had federal and state net operating loss carry forwards of approximately $48.4 million that begin to expire in 2025. The Company also had Mexico net operating loss carry forwards as of December 29, 2024 of approximately $0.8 million that begin to expire in 2028. The Company also had U.K. net operating loss carry forwards as of December 29, 2024 of approximately $177.2 million that may be carried forward indefinitely.
As of December 29, 2024, the Company had approximately $5.4 million of state tax credit carry forwards that begin to expire in 2025.
For the years ended December 29, 2024 and December 31, 2023, there is a tax effect of $(9.4) million and $(2.1) million, respectively, reflected in other comprehensive loss.
For the years ended December 29, 2024 and December 31, 2023, 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 29, 2024December 31, 2023
 (In thousands)
Unrecognized tax benefits, beginning of year$37,565 $27,585 
Increase as a result of tax positions taken during prior years— 17,415 
Decrease for lapse in statute of limitations(8,300)(7,201)
Decrease for tax positions of prior years(296)(234)
Unrecognized tax benefits, end of year$28,969 $37,565 
Included in unrecognized tax benefits of $29.0 million as of December 29, 2024, was $15.1 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 29, 2024, the Company had recorded a liability of $7.6 million for interest and penalties. During 2024, accrued interest and penalty amounts related to uncertain tax positions increased by $1.7 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. With few exceptions, the Company is no longer subject to examinations by taxing authorities for years prior to 2020 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. There was no tax sharing receivable or payable accrued for the 2024 tax year.