Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

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

	December 31, 2023			December 31, 2022			December 26, 2021
(In thousands)	Amount		% of Pre-tax	Amount		% of Pre-tax	Amount		% of Pre-tax
Tax at federal statutory rate	$	63,544	21.0	$	49,560	21.0	$	61,005	21.0
State and local taxes, net	18,445		6.1	16,855		7.1	16,378		5.6
Increase/(decrease) in uncertain tax positions	1,763		0.6	(220)		(0.1)	2,782		1.0
(Gain)/loss on company-owned life insurance	(735)		(0.2)	857		0.4	(712)		(0.2)
Nondeductible expense	1,492		0.5	780		0.3	593		0.2
Nondeductible executive compensation	2,175		0.7	3,985		1.7	4,140		1.4
Stock-based awards expense/(benefit)	478		0.2	(1,119)		(0.5)	(5,461)		(1.9)
Deduction for foreign-derived intangible income	(3,985)		(1.3)	(3,166)		(1.3)	(2,972)		(1.0)
Research and experimentation credit	(12,683)		(4.2)	(6,699)		(2.8)	(5,571)		(1.9)
Other, net	(658)		(0.2)	1,261		0.5	348		0.1
Income tax expense	$	69,836	23.2	$	62,094	26.3	$	70,530	24.3

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

(In thousands)	December 31, 2023		December 31, 2022		December 26, 2021
Current tax expense/(benefit)
Federal	$	56,139	$	75,495	$	55,110
Foreign	2,590		1,897		1,042
State and local	30,901		30,855		20,736
Total current tax expense	89,630		108,247		76,888
Deferred tax expense/(benefit)
Federal	(12,715)		(36,344)		(5,651)
State and local	(7,079)		(9,809)		(707)
Total deferred tax expense	(19,794)		(46,153)		(6,358)
Income tax expense	$	69,836	$	62,094	$	70,530

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

(In thousands)	December 31, 2023		December 31, 2022
Deferred tax assets
Retirement, postemployment and deferred compensation plans	$	60,398	$	67,797
Accruals for other employee benefits, compensation, insurance and other	36,968		31,335
Net operating losses(1)	42,944		52,522
Operating lease liabilities	14,144		18,403
Capitalized research and development costs (2)	68,113		55,370
Other	36,387		32,974
Gross deferred tax assets	$	258,954	$	258,401
Valuation allowance	(3,240)		(4,258)
Net deferred tax assets	$	255,714	$	254,143
Deferred tax liabilities
Property, plant and equipment	$	37,950	$	44,698
Intangible assets	79,718		88,115
Operating lease right-of-use assets	9,626		15,453
Other	13,915		9,514
Gross deferred tax liabilities	$	141,209	$	157,780
Net deferred tax asset	$	114,505	$	96,363

(1) Includes federal tax operating loss carryforwards acquired in connection with The Athletic Media Company acquisition.

(2) As a result of the Tax Cuts and Jobs Act, see Liquidity and Capital Resources section in the Management’s Discussion and Analysis of Financial Condition and Results of Operations for more information.

Federal tax operating loss carryforwards acquired in connection with The Athletic Media Company acquisition totaled $38 million as of December 31, 2023. Such losses have remaining lives of up to 14 years.

State tax operating loss carryforwards totaled $6.8 million as of December 31, 2023, and $6.9 million as of December 31, 2022. Such loss carryforwards expire in accordance with provisions of applicable tax laws and have remaining lives of up to 18 years.

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 (i.e., impairments of nondeductible goodwill and intangible assets).

We had a valuation allowance totaling $3.2 million as of December 31, 2023, and a valuation allowance totaling $4.3 million as of December 31, 2022, for deferred tax assets primarily associated with net operating losses of U.S. subsidiaries, as we determined these assets were not realizable on a more-likely-than-not basis.

We had an income tax payable of $23.2 million as of December 31, 2023, compared with an income tax payable of $7.0 million as of December 31, 2022.

Income tax benefits related to the exercise or vesting of equity awards reduced current taxes payable by $10 million, $6.1 million and $11.5 million in 2023, 2022 and 2021, respectively.

As of December 31, 2023, and December 31, 2022, 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 $137 million and $139 million, respectively.

A reconciliation of unrecognized tax benefits is as follows:

(In thousands)	December 31, 2023		December 31, 2022		December 26, 2021
Balance at beginning of year	$	5,528	$	5,891	$	6,737
Gross additions to tax positions taken during the current year	2,466		1,504		1,389
Gross additions to tax positions taken during the prior year	877		73		2,458
Gross reductions to tax positions taken during the prior year	(8)		—		(150)
Reductions from settlements with taxing authorities	(1,185)		(1,116)		(3,534)
Reductions from lapse of applicable statutes of limitations	(604)		(824)		(1,009)
Balance at end of year	$	7,074	$	5,528	$	5,891

The total amount of unrecognized tax benefits that would, if recognized, affect the effective income tax rate was approximately $6 million and $5 million as of December 31, 2023, and December 31, 2022, respectively.

In 2023 and 2022, we recorded a $1.9 million and a $2.2 million income tax benefit, respectively, due to a reduction in the Company’s reserve for uncertain tax positions.

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 $1.9 million and $1.5 million as of December 31, 2023, and December 31, 2022, respectively. The total amount of accrued interest and penalties was $0.3 million in 2023, a net benefit of $0.1 million in 2022 and a net benefit of less than $0.1 million in 2021.

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 2013. 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 twelve months, which could result in a decrease in unrecognized tax benefits of $3.5 million that would, if recognized, reduce the effective tax rate.