Income before income taxes was as follows:

Taxes on income consisted of the following:

The provision for income taxes at our effective tax rate differed from the statutory rate as follows:

In fiscal years 2015, 2016, and 2017, we elected to permanently reinvest the historical earnings of all of our foreign subsidiaries.  We have not provided for deferred taxes on approximately $254,800 of undistributed earnings of such subsidiaries.  These earnings could become subject to additional income tax if they are remitted as dividends to the U.S. parent company, loaned to the U.S. parent company, or upon sale of subsidiary stock.  Should we decide to repatriate these undistributed foreign earnings, we would need to record a deferred tax liability of approximately $49,000 related to earnings.

The increase in the effective tax rate during fiscal 2017 was primarily due to the absence of the retroactive reinstatement of the research and experimentation tax credit recorded in fiscal 2016, and changes in the jurisdictional mix of income.

The decrease in the effective tax rate during fiscal 2016 was primarily due to the absence of income taxes incurred in fiscal 2015 related to the restructuring of our operations in Taiwan, the reinstatement of the research and experimentation tax credit in December 2015, and the benefit of $928 related to domestic production deductions.  This was partially offset by a change in the mix of earnings among various jurisdictions in which we operate, including a scheduled reduction in the benefit available under our tax holiday in South Korea from 100% to 50% of the statutory tax rate.

The results of operations for the fiscal year ended September 30, 2015 included tax adjustments to correct prior period amounts, which we determined to be immaterial to the prior periods to which they related.  These adjustments, relating to the tax treatment of intercompany activities between certain of our foreign and U.S. operations, were recorded in fiscal 2015 and reduced full year net income by $868 and diluted earnings per share by approximately $0.04.

The Company had operated under a tax holiday in South Korea in conjunction with our investment in research, development and manufacturing facilities there, which expired at the end of fiscal 2017. This arrangement allowed for a tax at 50% of the statutory rate in effect in South Korea for fiscal years 2016 and 2017, following a 0% tax rate in fiscal years 2013, 2014, and 2015. This tax holiday reduced our fiscal 2017, 2016, and 2015 income tax provision by approximately $5,018, $3,771 and $5,446, respectively.  This tax holiday increased our fiscal 2017, 2016, and 2015 diluted earnings per share by approximately $0.20, $0.15, and $0.22, respectively.

The accounting guidance regarding uncertainty in income taxes prescribes a threshold for the financial statement recognition and measurement of tax positions taken or expected to be taken on a tax return.  Under these standards, we may recognize the tax benefit of an uncertain tax position only if it is more likely than not that the tax position will be sustained by the taxing authorities, based on the technical merits of the position.

The following table presents the changes in the balance of gross unrecognized tax benefits during the last three fiscal years:

The entire balance of unrecognized tax benefits shown above as of September 30, 2017 and 2016, would affect our effective tax rate if recognized.  We recognize interest and penalties related to uncertain tax positions as income tax expense in our financial statements.  Interest accrued on our Consolidated Balance Sheet was $100 and $65 at September 30, 2017 and 2016, respectively, and any interest and penalties charged to expense in fiscal years 2017, 2016 and 2015 was not material.

At September 30, 2017, the tax periods open to examination by the U.S. federal government included fiscal years 2014 through 2017.  We believe the tax periods open to examination by U.S. state and local governments include fiscal years 2013 through 2017 and the tax periods open to examination by foreign jurisdictions include fiscal years 2012 through 2017. We do not anticipate a significant change to the total amount of unrecognized tax benefits within the next 12 months.

Significant components of net deferred tax assets and liabilities were as follows:

As of September 30, 2017, the Company had foreign, federal and state net operating loss carryforwards (NOLs) of $5,642, $26,075 and $35,999, respectively, which will expire over the period between fiscal year 2018 and fiscal year 2037, for which we have recorded a $1,039 gross valuation allowance, all of which was attributable to foreign NOLs.  The majority of the federal and state NOLs are attributable to the NexPlanar acquisition.  As of September 30, 2017, the Company had $1,577 in state tax credit carryforwards, for which we have recorded a $1,409 gross valuation allowance.  As of September 30, 2017, the Company had a capital loss carryforward of $2,772, for which we have recorded a full valuation allowance.  As of September 30, 2017, the Company had foreign and federal tax credit carryforwards of $4,811 and $3,765, respectively, which will expire beginning in fiscal years 2028 through 2038.