(6) Income Taxes:

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


	2011			2010		2009
Current
Federal	$	(2,908	)	$	4,740	$	(1,152	)
State		(177	)		305		(336	)
Foreign		4,667			3,658		2,557

		1,582			8,703		1,069
Deferred		6,117			3,755		7,368

	$	7,699		$	12,458	$	8,437

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


	2011		2010		2009
U.S. Statutory Rate		35.0%		35.0%		35.0%
State Taxes, Net of Federal Tax Benefit		0.9%		0.9%		0.8%
Foreign Taxes		(16.2%)		1.9%		(4.3%)
Benefit on Dividends Received		(2.7%)		(1.6%)		(1.5%)
Changes to Unrecognized Tax Benefits		1.5%		(10.9%)		(7.5%)
*Other		5.5%		0.1%		(1.6%)

Effective Tax Rate		24.0%		25.4%		20.9%

* "Other" in fiscal 2011 includes 11.5% for the impact of goodwill impairment and -6% for the impact of current and prior year R&D tax credits.

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


Current Asset (Liability):	2011			2010
Difference Between Book and Tax Related to:
Inventory	$	15,940		$	13,626
Payroll Related Accruals		4,798			4,725
Warranty Reserves		11,927			11,464
Workers Compensation Accruals		2,194			2,035
Other Accrued Liabilities		13,150			17,655
Pension Cost		927			1,032
Miscellaneous		(6,773	)		(9,399	)

Deferred Income Tax Asset (Liability)	$	42,163		$	41,138

Long-Term Asset (Liability):	2011			2010
Difference Between Book and Tax Related to:
Pension Cost	$	52,404		$	95,375
Accumulated Depreciation		(52,749	)		(45,075	)
Intangibles		(63,356	)		(75,090	)
Accrued Employee Benefits		36,386			33,676
Postretirement Health Care Obligation		44,408			52,711
Warranty		5,588			4,823
Valuation Allowance		(7,259	)		(9,130	)
Net Operating Loss/State Credit Carryforwards		9,370			10,475
Miscellaneous		6,209			4,728

Deferred Income Tax Asset (Liability)	$	31,001		$	72,493

The deferred tax assets that were generated as a result of foreign income tax loss carryforwards and tax incentives in the amount of $4.9 million are potentially not useable by certain foreign subsidiaries. If not utilized against taxable income, $4.5 million will expire from 2012 through 2022. The remaining $0.4 million has no expiration date. In addition, a deferred tax asset of $4.5 million was generated as a result of state income tax loss and state incentive tax credit carryforwards. If not utilized against future taxable income, this amount will expire from 2012 through 2026. Realization of the deferred tax assets are contingent upon generating sufficient taxable income prior to expiration of these carryforwards. Management believes that realization of the foreign deferred tax assets is unlikely, therefore valuation allowances were established in the amount of $4.9 million. In addition, state tax credits in the amount of $2.4 million are potentially not useable against future state income taxes.

The Company has not recorded deferred income taxes applicable to undistributed earnings of foreign subsidiaries because the Company intends to reinvest such earnings indefinitely outside of the U.S. The undistributed earnings amounted to approximately $49.5 million at July 3, 2011. 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 July 3, 2011 is reconciled as follows:

Unrecognized Tax Benefits (in thousands):


Beginning Balance at June 27, 2010	$	12,302
Changes based on tax positions related to prior year		193
Additions based on tax positions related to current year		1,520
Settlements with taxing authorities		(1,072	)
Lapse of statute of limitations		(903	)

Balance at July 3, 2011	$	12,040

The presentation of Unrecognized Tax Benefits was modified in fiscal 2011 to show the gross impact of uncertain tax positions in the rollforward schedule. The net unrecognized tax benefit as of July 3, 2011 and June 27, 2010 is $9.9 million and $10.8 million, respectively.

As of July 3, 2011, $9.9 million represents the portion of gross unrecognized tax benefits that, if recognized, would impact the effective tax rate. As of June 27, 2010, $11.1 million represents the portion of net unrecognized tax benefits that, if recognized, would impact the effective tax rate.

The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. As of July 3, 2011 and June 27, 2010, the Company had $5.7 million and $5.9 million, respectively, accrued for the payment of interest and penalties.

There is a reasonable possibility that approximately $4.7 million of the current remaining unrecognized tax benefits may be recognized by the end of fiscal year 2012 as a result of a lapse in the statute of limitations in certain foreign jurisdictions.

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 2009 and is currently under audit by various state and foreign jurisdictions. With respect to the Company's major foreign jurisdictions, it is no longer subject to tax examinations before fiscal 2001.