Income Taxes:

Components of income (loss) before income taxes consists of the following (in thousands):



	2014		2013			2012
U.S.	$	30,291	$	(58,625	)	$	28,053
Foreign	6,843		6,484			1,820
Total	$	37,134	$	(52,141	)	$	29,873

The provision (credit) for income taxes consists of the following (in thousands):



	2014			2013			2012
Current
Federal	$	9,725		$	10,377		$	(8,711	)
State	733			(1,870		)	430
Foreign	3,725			923			5,222
	14,183			9,430			(3,059		)
Deferred	(5,396		)	(27,914		)	3,926
	$	8,787		$	(18,484	)	$	867

A reconciliation of the U.S. statutory tax rates to the effective tax rates on income follows:



	2014		2013		2012
U.S. Statutory Rate	35.0	%	35.0	%	35.0	%
State Taxes, Net of Federal Tax Benefit	2.0	%	1.1	%	1.8	%
Impact of Foreign Operations and Tax Rates	0.7	%	5.3	%	4.2	%
Impact of Dividends Received	(0.8	)%	1.1	%	(2.2	)%
Changes to Unrecognized Tax Benefits	1.2	%	(0.5	)%	(16.0	)%
Impact of Restructuring Actions	—	%	(2.1	)%	(18.7	)%
Benefits on State Credits and NOL's, Net of Valuation Allowance	(0.4	)%	4.3	%	—	%
*Change in Accounting Method	(7.8	)%	—	%	—	%
**Other, Net	(6.2	)%	(8.7	)%	(1.2	)%
Effective Tax Rate	23.7	%	35.5	%	2.9	%

* "Change in Accounting Method" in fiscal 2014 relates to a taxpayer election filed in the current year, which provided the Company a tax benefit that was previously unavailable.

** “Other, Net” in fiscal 2014 includes (4.8)% for the impact of U.S. manufacturers deduction and (1.4)% for other items, and in fiscal 2013 includes (10.8)% for the impact of goodwill impairment and 2.1% for other items.

The components of deferred income taxes were as follows (in thousands):



Current Asset (Liability):	2014			2013
Difference Between Book and Tax Related to:
Inventory	$	13,504		$	13,697
Payroll Related Accruals	4,741			3,870
Warranty Reserves	10,247			9,897
Workers Compensation Accruals	2,547			2,685
Other Accrued Liabilities	12,191			14,618
Pension Cost	—			746
Net Operating Loss/State Credit Carryforwards	585			4,608
Miscellaneous	5,143			(2,587		)
Deferred Income Tax Asset (Liability)	$	48,958		$	47,534
Long-Term Asset (Liability):
Difference Between Book and Tax Related to:
Pension Cost	$	25,272		$	35,663
Accumulated Depreciation	(45,397		)	(54,339		)
Intangibles	(43,062		)	(44,611		)
Accrued Employee Benefits	44,827			45,016
Postretirement Health Care Obligation	22,530			27,787
Warranty	6,718			7,227
Valuation Allowance	(15,241		)	(12,725		)
Net Operating Loss/State Credit Carryforwards	19,629			17,236
Miscellaneous	(98		)	6,290
Deferred Income Tax Asset (Liability)	$	15,178		$	27,544

Deferred tax assets were generated during the current year as a result of foreign income tax loss carryforwards in the amount of $2.7 million. At June 29, 2014, there are $3.7 million of foreign income tax loss carryforwards, consisting of $1.9 million which have no expiration date, and $1.8 million which will expire within the next 5 to 10 years. A deferred tax asset of $16.5 million exists at June 29, 2014 related to state income tax losses and state tax credit carryforwards. If not utilized against future taxable income, this amount will expire from 2015 through 2028. Realization of the deferred tax assets are contingent upon generating sufficient taxable income prior to expiration of these carryforwards. At June 29, 2014, a valuation allowance of $2.9 million is recorded for the foreign losses which the Company believes are unlikely to be realized in the future. In addition, a valuation allowance of $12.3 million is recorded related to state tax credits that are unlikely to be realized.

The Company does not record deferred income taxes applicable to undistributed earnings of foreign subsidiaries for which the Company intends to reinvest such earnings indefinitely outside of the U.S. The undistributed earnings amounted to approximately $65.9 million at June 29, 2014. If the Company were to distribute these earnings, foreign tax credits may become available under current law to reduce the resulting U.S. income tax. Determination of the amount of unrecognized deferred tax liability related to these earnings is not practicable.

The change to the gross unrecognized tax benefits of the Company during the fiscal year ended June 29, 2014 and June 30, 2013 is reconciled as follows:

Unrecognized Tax Benefits (in thousands):



	2014			2013			2012
Beginning Balance	$	6,949		$	6,717		12,040
Changes based on tax positions related to prior year	380			—			—
Additions based on tax positions related to current year	378			997			429
Settlements with taxing authorities	—			(39		)	(516		)
Lapse of statute of limitations	(50		)	(726		)	(5,236		)
Ending Balance	$	7,657		$	6,949		$	6,717

As of June 29, 2014, gross unrecognized tax benefits that, if recognized, would impact the effective tax rate were $6.5 million. Of that amount, there is a reasonable possibility that approximately $2.8 million of the current remaining unrecognized tax benefits may be recognized within the next twelve months due to the resolution of audits or expiration of statutes of limitations.

The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. The total expense (income) recognized for fiscal years 2014, 2013 and 2012 was $0.1 million, $0.2 million, and $(1.0) million, respectively.

As of June 29, 2014 and June 30, 2013, the Company had $1.2 million and $0.9 million, respectively, accrued for the payment of interest and penalties.

At June 29, 2014 and June 30, 2013, the liability for uncertain tax positions, inclusive of interest and penalties, was $8.8 million and $7.9 million, respectively, which is recorded as an other long-term liability within the Consolidated Balance Sheets.

Income tax returns are filed in the U.S., state, and foreign jurisdictions and related audits occur on a regular basis. In the U.S., the Company is no longer subject to U.S. federal income tax examinations before fiscal 2010 and is currently under audit by various state and foreign jurisdictions. The Company is no longer subject to tax examinations before fiscal 2004 in its major foreign jurisdictions.