9.	Income Taxes

The components of the income tax provision (benefit) are as follows:


(in thousands)	2011			2010		2009
Current:
Federal	$	30,850		$	25,911	$	15,689
State		2,377			2,197		1,597
Foreign		—			—		(67	)

		33,227			28,108		17,219

Deferred:
Federal		(1,927	)		393		(481	)
State		(70	)		34		(51	)
Foreign		—			—		144

		(1,997	)		427		(388	)

Total	$	31,230		$	28,535	$	16,831

The following is a reconciliation of income taxes at the statutory tax rate to the Company's effective tax rate:


	2011			2010			2009
Federal taxes at statutory rate		35.0	%		35.0	%		35.0	%
State taxes, net of Federal tax benefit		1.8			1.9			2.3
Proceeds from 2011 receipt of officer's life insurance		(0.8	)		—			—
Stock-based compensation		0.1			0.1			0.2
Other		0.9			1.2			1.3

Effective tax rate		37.0	%		38.2	%		38.8	%

Deferred income taxes result from timing differences in the recognition of revenue and expense for tax and financial statement purposes. The sources of temporary differences are as follows:


(in thousands)	December 31, 2011			December 25, 2010
Assets:
Inventories	$	6,704		$	4,530
Accounts receivable		8,902			6,291
Accrued expenses		2,288			2,337
Other		1,801			878

Gross deferred tax assets		19,695			14,036

Liabilities:
Depreciation		2,129			258
Goodwill		9,149			9,633
Other		1,497			—

Gross deferred tax liabilities		12,775			9,891

Net deferred tax assets before valuation allowance		6,920			4,145
Valuation allowance		(1,424	)		(646	)

Net deferred tax assets	$	5,496		$	3,499

In fiscal 2011 and fiscal 2010, we recorded a valuation allowance totaling $0.8 million and $0.5 million, respectively, against certain foreign tax loss carryforwards.

Based on our history of taxable income and our projection of future earnings, we believe that it is more likely than not that sufficient taxable income will be generated in the foreseeable future to realize the remaining net deferred tax assets.

As of December 31, 2011, the undistributed earnings of our Swedish subsidiary were approximately $8.3 million. We intend to repatriate all of these earnings during 2012. During the year ended December 31, 2011, we recognized a tax benefit of $0.1 million related to this repatriation. The benefit recorded does not include the impact of future operating results.

At December 31, 2011, we have $2.2 million of unrecognized tax benefits, $1.4 million of which would affect our effective tax rate if recognized.

The following table summarizes the change in uncertain tax benefit reserves for the three years ended December 31, 2011:


(in thousands)	2011			2010			2009
Balance at beginning of year	$	2,532		$	2,175		$	1,752
Reductions due to lapses in statutes of limitations		(65	)		(8	)		(48	)
Reductions due to payments for tax positions settled		(702	)		—			—
Reductions due to reversals of prior year positions		(210	)		—			—
Additions based on tax positions taken during the current period		606			365			471

Balance at end of year	$	2,161		$	2,532		$	2,175

We recognize interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2011, we have approximately $0.2 million of accrued interest related to uncertain tax positions.

The last year examined by the IRS was 2005, and all years up through and including that year are closed by examination. We are currently under examination for tax years 2006 - 2007 by one state tax authority to which we are subject to tax. In addition, we are also under examination for the tax years 2007-2009 by another state tax authority to which we are subject to tax. The tax years 2007-2011 remain open to examination by the remaining major taxing jurisdictions in the United States to which we are subject. The tax years 2007-2011 remain open to examination in Sweden for our Swedish subsidiary.