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Income Taxes (Tables)

12 Months Ended

Jun. 25, 2017

The components of income before income taxes consist of the following:

Provision for income taxes consists of the following:

Reconciliation from the federal statutory tax rate to the effective tax rate is as follows:

	For the Fiscal Year Ended
	June 25, 2017			June 26, 2016			June 28, 2015
Federal statutory tax rate		35.0	%		35.0	%		35.0	%
Foreign income taxed at different rates		(10.2	)		(7.7	)		(3.2	)
Repatriation of foreign earnings and withholding taxes		1.4			(1.0	)		(0.3	)
Change in valuation allowance		(0.5	)		(3.7	)		(5.6	)
Domestic production activities deduction		2.0			(0.5	)		(1.3	)
Research and other credits		(5.1	)		4.8			(0.4	)
State income taxes, net of federal tax benefit		0.2			1.5			1.8
Change in uncertain tax positions		1.8			1.2			5.4
Settlement of certain intercompany foreign currency transactions		—			—			5.6
Indefinite reinvestment assertion		—			—			(14.2	)
Renewable energy credits		—			—			(1.9	)
Nondeductible expenses and other		0.6			1.6			3.9
Effective tax rate		25.2	%		31.2	%		24.8	%

The significant components of UNIFI’s deferred tax assets and liabilities consist of the following:

	June 25, 2017			June 26, 2016
Deferred tax assets:
Investments, including unconsolidated affiliates	$	7,737		$	8,337
State tax credits		338			361
Accrued liabilities and valuation reserves		3,952			3,660
NOL carryforwards		7,854			3,952
Intangible assets, net		3,932			4,349
Incentive compensation plans		2,487			3,297
Foreign tax credits		789			—
Capital loss carryforward		1,746			—
Research credit carryforward		1,115			—
Other items		5,224			4,668
Total gross deferred tax assets		35,174			28,624
Valuation allowance		(17,957	)		(13,550	)
Net deferred tax assets		17,217			15,074
Deferred tax liabilities:
Property, plant and equipment		(26,417	)		(17,098	)
Other		(63	)		(580	)
Total deferred tax liabilities		(26,480	)		(17,678	)
Net deferred tax liabilities	$	(9,263	)	$	(2,604	)

The balances and activity for UNIFI’s deferred tax valuation allowance are as follows:

	For the Fiscal Year Ended
	June 25, 2017			June 26, 2016			June 28, 2015
Balance at beginning of year	$	(13,550	)	$	(15,606	)	$	(18,615	)
(Increase) decrease in valuation allowance		(4,407	)		2,056			3,009
Balance at end of year	$	(17,957	)	$	(13,550	)	$	(15,606	)

Components of UNIFI’s deferred tax valuation allowance are as follows:

	For the Fiscal Year Ended
	June 25, 2017			June 26, 2016			June 28, 2015
Investment in a former domestic unconsolidated affiliate	$	(6,269	)	$	(6,418	)	$	(6,503	)
Equity-method investment in PAL		(1,520	)		(2,102	)		(3,261	)
Certain losses carried forward ⁽¹⁾		(5,924	)		(5,030	)		(4,162	)
State NOLs		(108	)		—			—
Other foreign NOLs ⁽²⁾		(3,347	)		—			—
Foreign tax credits		(789	)		—			(1,680	)
Total deferred tax valuation allowance	$	(17,957	)	$	(13,550	)	$	(15,606	)

(1)	Certain U.S. NOLs and capital losses outside the U.S. consolidated tax filing group.

(2)	Presented net of certain NOL carryforward deferred tax assets.

A reconciliation of beginning and ending gross amounts of unrecognized tax benefits is as follows:

	For the Fiscal Year Ended
	June 25, 2017			June 26, 2016			June 28, 2015
Balance at beginning of year	$	4,532		$	4,029		$	983
Gross increases related to current period tax positions		473			110			3,469
Gross increases related to tax positions in prior periods		711			1,058			18
Gross decreases related to settlements with tax authorities		(480	)		(274	)		(178	)
Gross decreases related to lapse of applicable statute of limitations		—			(391	)		(263	)
Balance at end of year	$	5,236		$	4,532		$	4,029