Note 4.

Income Taxes

As of July 2, 2017, the Company had approximately $14.3 million of total unrecognized income tax benefits. Included in this amount were a total of $9.7 million of unrecognized income tax benefits that, if recognized, would affect the Company’s effective tax rate. While it is expected that the amount of unrecognized tax benefits will change in the next 12 months, the Company does not expect the change to have a significant impact on the results of operations or the financial position of the Company.

The Company’s accounting policy is to recognize interest and penalties accrued relating to unrecognized income tax benefits as part of its provision for income taxes. The Company accrued approximately $0.2 million and $0.3 million during the three and six months ended July 2, 2017, respectively, and had an accrued balance of $1.5 million of interest and penalties as of July 2, 2017.

The Company operates in multiple taxing jurisdictions, both within and outside the U.S. In certain situations, a taxing authority may challenge positions that the Company has adopted in its income tax filings. The Company, with a few exceptions (none of which are material), is no longer subject to income tax examinations by tax authorities for years prior to 2010.

Provision for taxes was $13.4 million and $23.5 million during the three and six months ended July 2, 2017, respectively. The effective tax rate was 22.9% as compared to 21.3% in the prior year. The higher effective tax rate was primarily due to a change in the mix of earnings.