6Income Taxes

For the three months ended December 30, 2016 and January 1, 2016, the Company’s earnings before income taxes, income tax expense and effective income tax rate were as follows:



	Three Months Ended
	December 30		January 1
(thousands, except tax rate data)	2016		2016
Loss before income taxes	$	(45)	$	(519)
Income tax (benefit) expense		(4,101)		15
Effective income tax rate		9113.3%		-2.9%

The change in the Company’s effective tax rate for the three months ended December 30, 2016 versus the prior year period was primarily due to the impact of a foreign tax credit net tax benefit of about $4,200 generated by the repatriation of approximately $22,000 in the period from foreign jurisdictions into the U.S. Also, the Company recorded tax benefit of $397 realized from the exercise of the share-based payment arrangements during the three-month period ended December 30, 2016. See “Note 14 – New Accounting Pronouncements” in the notes to the Company’s accompanying condensed consolidated financial statements for further discussion.

Adverse changes in profitability and financial outlook in both the U.S. and/or foreign jurisdictions or changes in the Company’s geographic footprint may require changes in valuation allowances in order to reduce the Company’s deferred tax assets. Such changes may drive fluctuations in the effective tax rate. The impact of the Company’s operations in jurisdictions where a valuation allowance is assessed, primarily in the foreign locations, is removed from the overall effective tax rate methodology and recorded directly based on year to date results for the year for which no tax expense or benefit can be recognized. The tax jurisdictions that have a valuation allowance for the periods ended December 30, 2016 and January 1, 2016 were:



December 30		January 1
2016		2016
	Australia		Australia
	Austria		France
	France		Italy
	Indonesia		Japan
	Italy		Netherlands
	Japan		New Zealand
	Netherlands		Spain
	New Zealand		Switzerland
	Spain
	Switzerland

The Company regularly assesses the adequacy of its provisions for income tax contingencies in accordance with the applicable authoritative guidance on accounting for income taxes. As a result, the Company may adjust the reserves for unrecognized tax benefits due to the impact of changes in its assumptions or as a result of new facts and developments, such as changes to interpretations of relevant tax law, assessments from taxing authorities, settlements with taxing authorities and lapses of statutes of limitation. The Company’s 2017 fiscal year tax expense is anticipated to include approximately $500 related to uncertain income tax positions.

In accordance with its accounting policy, the Company recognizes accrued interest and penalties related to unrecognized benefits as a component of income tax expense. The Company is projecting accrued interest of $250 related to uncertain income tax positions for the fiscal year ending September 29, 2017.

The Company files income tax returns, including returns for its subsidiaries, with federal, state, local and foreign taxing jurisdictions. The Company is currently undergoing income tax examinations in Italy, France, Germany and Indonesia. As of the date of this report, the following tax years remain open to examination by the respective tax jurisdictions:


Jurisdiction	Fiscal Years
United States	2013-2016
Canada	2012-2016
France	2012-2016
Germany	2009-2016
Italy	2011-2016
Japan	2013-2016
Switzerland	2006-2016