INCOME TAXES (Tables)

12 Months Ended

Sep. 27, 2014

Income from continuing operations by location, the provision (benefit) for income taxes and the effective tax rate

The following table reflects income from continuing operations by location, the provision for income taxes and the effective tax rate for fiscal 2014, 2013, and 2012:



	Fiscal
(dollar amounts in thousands)	2014			2013			2012
United States operations	$	7,700		$	(4,340	)	$	(6,111	)
Foreign operations	69,433			71,008			180,362
Income from operations before tax	77,133			66,668			174,251
Provision for income taxes	14,145			7,310			13,671
Net income	$	62,988		$	59,358		$	160,580
Effective tax rate	18.3		%	11.0		%	7.8		%

Provision (benefit) for income taxes from continuing operations

The following table reflects the provision for income taxes from continuing operations for fiscal 2014, 2013, and 2012:



	Fiscal
(in thousands)	2014		2013			2012
Current:
Federal	$	843	$	(212	)	$	4,103
State	78		291			942
Foreign	5,534		1,732			5,497
Deferred:
Federal	5,474		985			4,169
State	5		5			48
Foreign	2,211		4,509			(1,088		)
Provision for income taxes	$	14,145	$	7,310		$	13,671

Effective income tax rate reconciliation

The following table reflects the difference between the provision for income taxes and the amount computed by applying the statutory federal income tax rate for fiscal 2014, 2013, and 2012:



	Fiscal
(in thousands)	2014			2013			2012
Computed income tax expense based on U.S. statutory rate	$	26,997		$	23,334		$	60,988
Effect of earnings of foreign subsidiaries subject to different tax rates	(9,763		)	(11,193		)	(30,067		)
Benefits from foreign approved enterprise zones	(17,423		)	(9,626		)	(22,138		)
Dividend income	8,190			—			—
Effect of permanent items	(298		)	664			152
Changes in valuation allowance	(1,820		)	1,429			1,261
Foreign operations (withholding taxes, deferred taxes on unremitted earnings, US taxation of foreign earnings)	5,906			1,789			12,604
Reserve for uncertain tax positions	131			683			(7,626		)
State income tax expense	2,241			(734		)	(394		)
Other, net	(16		)	964			(1,109		)
Provision for income taxes	$	14,145		$	7,310		$	13,671

Net deferred tax balance

The following table reflects the net deferred tax balance, composed of the tax effects of cumulative temporary differences for fiscal 2014 and 2013:



	Fiscal
(in thousands)	2014			2013
Inventory reserves	$	692		$	1,127
Other accruals and reserves	3,713			3,349
Net operating loss carryforwards	666			779
Valuation allowance	(780		)	(768		)
Total short-term deferred tax asset	$	4,291		$	4,487

Total short-term deferred tax liability	106			221
Net short-term deferred tax asset	$	4,185		$	4,266

Domestic tax credit carryforwards	$	688		$	1,611
Net operating loss carryforwards	27,361			28,138
Stock options	703			1,299
Other	400			926
	29,152			31,974
Valuation allowance	(23,844		)	(25,676		)
Total long-term deferred tax asset (1)	$	5,308		$	6,298

Repatriation of foreign earnings, including foreign withholding taxes	$	43,204		$	41,322
Depreciable assets	3,013			1,887
Prepaid expenses and other	300			—
Total long-term deferred tax liability	$	46,517		$	43,209
Net long-term deferred tax liability	$	41,209		$	36,911
Total net deferred tax liability	$	37,024		$	32,645


(1)	Included in other assets on the Consolidated Balance Sheets are deferred tax assets of $3.8 million and $3.8 million as of September 27, 2014 and September 28, 2013, respectively.

Unrecognized tax benefits

The beginning and ending balances of the Company's unrecognized tax benefits are reconciled below for fiscal 2014, 2013, and 2012:



	Fiscal
(in thousands)	2014			2013			2012
Unrecognized tax benefit, beginning of year	$	6,869		$	6,186		$	13,702
Additions for tax positions, current year	—			—			—
Additions for tax positions, prior year	717			2,485			110
Reductions for tax positions, prior year	(394		)	(1,802		)	(7,626		)
Unrecognized tax benefit, end of year	$	7,192		$	6,869		$	6,186