INCOME TAXES

Domestic and foreign income before provision for income tax is as follows:



(In thousands)	March 31, 2012		April 2, 2011		April 3, 2010
Domestic	$	40,666	$	58,040	$	42,260
Foreign	$	48,832	$	52,041	$	39,011
Total	$	89,498	$	110,081	$	81,271

The income tax provision contains the following components:



(In thousands)	March 31, 2012			April 2, 2011		April 3, 2010
Current
Federal	$	8,505		$	14,982	$	10,088
State	2,275			2,111		887
Foreign	5,954			7,226		9,334
Total current	$	16,734		$	24,319	$	20,309
Deferred
Federal	7,522			4,931		4,103
State	(597		)	438		259
Foreign	(1,047		)	413		(1,770		)
Total deferred	$	5,878		$	5,782	$	2,592
Total	$	22,612		$	30,101	$	22,901

Included in the federal income tax provisions for fiscal 2012, 2011 and 2010 are approximately $1.6 million, $10.8 million and $8.1 million, respectively, provided on foreign source income of approximately $6.2 million, $31.0 million and $23.2 million for fiscal 2012, 2011 and 2010, respectively, for taxes which are payable in the United States.

Tax affected, significant temporary differences comprising the net deferred tax assets/(liabilities) are as follows:



(In thousands)	March 31, 2012			April 2, 2011
Depreciation	$	(17,208	)	$	(9,447	)
Amortization	(19,249		)	(20,597		)
Inventory	4,224			2,244
Hedging	(589		)	1,120
Accruals and reserves	6,352			5,950
Net operating loss carry-forward	3,354			7,241
Stock Based Compensation	8,649			7,725
Tax credit carry-forward, net	2,328			1,583
Gross Deferred Taxes	(12,139		)	(4,181		)
Less valuation allowance	$	(1,569	)	$	(3,630	)
Net deferred tax liabilities	$	(13,708	)	$	(7,811	)

As of March 31, 2012, the Company has approximately $4.7 million in U.S. acquisition and approximately $1.2 million in French acquisition related net operating loss carry-forwards that it believes are more likely than not that they will be realized. The Company also has $2.3 million in gross federal and state tax credits available to offset future tax. The Company has established valuation allowances to reduce the value of tax assets to amounts that it deems to be realizable. The valuation allowance is made up of $0.4 million acquisition-related R&D credits and $1.2 million acquisition-related net operating losses. The net operating loss carry-forwards are subject to separate limitations and will expire beginning in 2020.

Approximately $167 million of our foreign subsidiary undistributed earnings are deemed to be indefinitely reinvested outside the US. Determination of the amount of unrecognized deferred U.S. income taxes is not practical because of the complexities associated with this hypothetical calculation. Accordingly we have not provided U.S. income taxes on these earnings. The income tax provision from operations differs from tax provision computed at the 35% U.S. federal statutory income tax rate due to the following:



(In thousands)	March 31, 2012					April 2, 2011					April 3, 2010

Tax at federal statutory rate	$	31,324		35.0	%	$	38,528		35.0	%	$	28,444		35.0	%
Domestic Manufacturing Deduction	(700		)	(0.8	)%	(1,120		)	(1.0	)%	(883		)	(1.1	)%
Difference between U.S. and foreign tax	(8,539		)	(9.5	)%	(8,610		)	(7.9	)%	(4,392		)	(5.4	)%
State income taxes net of federal benefit	1,136			1.3	%	1,741			1.6	%	764			0.9	%
Repatriation of Earnings	—			—	%	(506		)	(0.5	)%	(1,574		)	(1.9	)%
Other, net	(609		)	(0.7	)%	68			0.1	%	542			0.7	%
Income tax provision	$	22,612		25.3	%	$	30,101		27.3	%	$	22,901		28.2	%

Unrecognized Tax Benefits

Unrecognized tax benefits represent uncertain tax positions for which reserves have been established. As of March 31, 2012, we had $6.9 million of unrecognized tax benefits, of which $6.6 million will impact the effective tax rate, if recognized. As of April 2, 2011, we had $4.7 million of unrecognized tax benefits, of which $4.3 million will impact the effective tax rate, if recognized.

During the fiscal year ended March 31, 2012 our unrecognized tax benefits were increased by $2.1 million as a result of additional tax benefits arising in the prior year return and current year provision from the usage of acquired net operating losses with a valuation allowance recorded. This was in addition to reserves set up for other various tax matters in the amount of $0.2 million.

The following table summarizes the activity related to our gross unrecognized tax benefits for the fiscal years ending April 2, 2011 and March 31, 2012:



(In thousands)	March 31, 2012			April 2, 2011
Beginning Balance	$	4,669		$	4,620
Additions based upon positions related to the current year	1,124			20
Additions for tax positions of prior years	1,216			1,641
Reductions of tax positions	(124		)	(1,042		)
Settlements with taxing authorities	—			—
Closure of statute of limitations	—			(570		)
Ending Balance	$	6,885		$	4,669

As of March 31, 2012 we anticipate that the liability for unrecognized tax benefits for uncertain tax positions could change by up to $0.8 million in the next twelve months, as a result of closure of various foreign statutes of limitations.

Our historic practice has been and continues to be to recognize interest and penalties related to Federal, state and foreign income tax matters in income tax expense. Approximately $1.0 million and $0.7 million was accrued for interest and penalties at March 31, 2012 and April 2, 2011, respectively and is not included in the amounts above.

We conduct business globally and, as a result, file consolidated and separate Federal, state and foreign income tax returns in multiple jurisdictions. In the normal course of business, we are subject to examination by taxing authorities throughout the world. With few exceptions, we are no longer subject to U.S. federal, state and local, or foreign income tax examinations for years before 2008.