Income Taxes

Reconciliations between the effective tax rate on income/(loss) from continuing operations before income taxes and the federal statutory rate are presented below.



	December 25, 2011					December 26, 2010					December 27, 2009
(In thousands)	Amount			% of Pre-tax		Amount			% of Pre-tax		Amount			% of Pre-tax
Tax at federal statutory rate	$	(1,302	)	35.0	%	$	62,027		35.0	%	$	1,321		35.0	%
State and local taxes, net	15,095			(406.0	)	19,010			10.7		12,418			329.1
Effect of enacted changes in tax laws	(1,520		)	40.9		11,370			6.4		11,743			311.2
Reduction in uncertain tax positions	(12,105		)	325.6		(21,722		)	(12.2	)	(22,338		)	(592.0	)
Loss/(gain) on Company-owned life insurance	36			(1.0	)	(3,319		)	(1.9	)	(4,156		)	(110.1	)
Non-deductible goodwill	34,992			(941.2	)	—			—		852			22.5
Other, net	1,310			(35.2	)	1,150			0.7		2,366			62.7
Income tax expense	$	36,506		*		$	68,516		38.7		$	2,206		58.4


*	The effective tax rate in 2011 is not meaningful because a portion of the non-cash charge in the second quarter of 2011 for the impairment of the Regional Media Group's goodwill was non-deductible.

The components of income tax expense as shown in our Consolidated Statements of Operations were as follows:



(In thousands)	December 25, 2011			December 26, 2010			December 27, 2009
Current tax (benefit)/expense
Federal	$	(19,559	)	$	14,354		$	(23,748	)
Foreign	1,110			682			784
State and local	(5,786		)	(7,791		)	(19,261		)
Total current tax (benefit)/expense	(24,235		)	7,245			(42,225		)
Deferred tax expense/(benefit)
Federal	14,523			52,735			27,320
Foreign	37,471			(1,384		)	(3,546		)
State and local	8,747			9,920			20,657
Total deferred tax expense	60,741			61,271			44,431
Income tax expense	$	36,506		$	68,516		$	2,206

We recognized a net operating loss carryforward (“loss carryforward”) for federal tax purposes of $23.1 million as of December 25, 2011 and $0 as of December 26, 2010. In accordance with federal tax law, the loss carryforward has a life of 20 years.

State tax operating loss carryforwards totaled $15.1 million as of December 25, 2011 and $8.7 million as of December 26, 2010. Such loss carryforwards expire in accordance with provisions of applicable tax laws and have remaining lives generally ranging from 1 to 20 years.

The components of the net deferred tax assets and liabilities recognized in our Consolidated Balance Sheets were as follows:



(In thousands)	December 25, 2011			December 26, 2010
Deferred tax assets
Retirement, postemployment and deferred compensation plans	$	447,156		$	420,745
Accruals for other employee benefits, compensation, insurance and other	39,572			56,280
Accounts receivable allowances	7,114			9,587
Other	109,946			91,424
Gross deferred tax assets	603,788			578,036
Valuation allowance	(39,824		)	—
Net deferred tax assets	$	563,964		$	578,036
Deferred tax liabilities
Property, plant and equipment	$	143,308		$	141,052
Intangible assets	42,150			44,568
Investments in joint ventures	15,095			11,796
Other	10,073			56,044
Gross deferred tax liabilities	210,626			253,460
Net deferred tax asset	$	353,338		$	324,576
Amounts recognized in the Consolidated Balance Sheets
Deferred tax asset – current	$	73,055		$	68,875
Deferred tax asset – long-term	280,283			255,701
Net deferred tax asset	$	353,338		$	324,576

We assess whether a valuation allowance should be established against deferred tax assets based on the consideration of both positive and negative evidence using a “more likely than not” standard. In making such judgments, significant weight is given to evidence that can be objectively verified. We evaluated our deferred tax assets for recoverability using a consistent approach that considers our three-year historical cumulative income/(loss), including an assessment of the degree to which any such losses were due to items that are unusual in nature (e.g., impairments of non-deductible goodwill and intangible assets).

In 2011, we recorded a valuation allowance of $39.8 million for deferred tax assets primarily associated with net operating losses of non-U.S. operations as we determined these assets were not realizable on a more-likely-than-not basis. In connection with this assessment, we also reversed a deferred tax liability, included in the “Deferred tax liabilities - other” line in the table above, originally established for the U.S. tax consequences associated with recognizing the net operating losses of the non-U.S. operations. The net impact on 2011 income tax expense was nominal as the valuation allowance was almost completely offset by the reversal of the deferred tax liability.

Income tax benefits related to the exercise or vesting of equity awards reduced current taxes payable by $1.6 million in 2011, $2.1 million in 2010 and $1.0 million in 2009.

As of December 25, 2011 and December 26, 2010, “Accumulated other comprehensive loss, net of income taxes” in our Consolidated Balance Sheets and for the years then ended in our Consolidated Statements of Changes in Stockholders’ Equity was net of deferred tax assets of approximately $370 million and $280 million, respectively.

A reconciliation of unrecognized tax benefits is as follows:



(In thousands)	December 25, 2011			December 26, 2010			December 27, 2009
Balance at beginning of year	$	55,636		$	70,578		$	92,582
Gross additions to tax positions taken during the current year	4,094			2,565			3,545
Gross reductions to tax positions taken during the current year	—			—			—
Gross additions to tax positions taken during the prior year	460			—			—
Gross reductions to tax positions taken during the prior year	(970		)	(13,347		)	(13,484		)
Reductions from settlements with taxing authorities	(1,941		)	—			—
Reductions from lapse of applicable statutes of limitations	(9,308		)	(4,160		)	(12,065		)
Balance at end of year	$	47,971		$	55,636		$	70,578

The total amount of unrecognized tax benefits that would, if recognized, affect the effective income tax rate was approximately $31 million as of December 25, 2011 and $36 million as of December 26, 2010.

We also recognize accrued interest expense and penalties related to the unrecognized tax benefits within income tax expense or benefit. The total amount of accrued interest and penalties was approximately $16 million as of December 25, 2011 and approximately $18 million as of December 26, 2010. The total amount of accrued interest and penalties was a net benefit of $1.4 million in 2011, $6.3 million in 2010 and $4.4 million in 2009.

With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years prior to 2004. Management believes that our accrual for tax liabilities is adequate for all open audit years. This assessment relies on estimates and assumptions and may involve a series of complex judgments about future events.

It is reasonably possible that certain income tax examinations may be concluded, or statutes of limitation may lapse, during the next 12 months, which could result in a decrease in unrecognized tax benefits of approximately $19 million that would, if recognized, impact the effective tax rate.