United States and foreign earnings before income taxes and minority interest were as follows:

 

The provision (benefit) for income taxes is comprised of the following:

 

The components of the net deferred tax asset as of are summarized in the table below.

 

 

The Company maintains valuation allowances when it is more likely than that all or a portion of a deferred tax asset will be realized. Changes in valuation allowances from period to period are included in the tax provision in the period of change. In determining whether a valuation allowance is required, the Company takes into account such factors as prior earnings history, expected future earnings, carry-back and carry-forward periods, and tax strategies that could potentially enhance the likelihood of realization of a deferred tax asset. During fiscal the Company reported operating income in certain foreign jurisdictions where the loss carryforward period is unlimited. The Company has evaluated the likelihood of whether the net deferred tax assets related to these jurisdictions would be realized and concluded that based primarily upon the uncertainty to achieve levels of sustained improvement and uncertain exchange rates in these jurisdictions; (a) it is more likely than that of deferred tax assets would be realized; and that (b) a full valuation allowance on the balance of deferred tax assets relating to these jurisdictions continues to be necessary. The Company recorded a net increase in valuation allowance of in fiscal due to higher cumulative operating losses in these jurisdictions. Management believes that it is more likely than that the results of future operations will generate sufficient taxable income and foreign source income to realize the remaining deferred tax assets.

 

Following is a reconciliation of the applicable U.S. federal income taxes to the actual income taxes reflected in the statements of operations:

The Company has provided additional U.S. income taxes on cumulative earnings of consolidated foreign subsidiaries that are considered to be reinvested indefinitely. The Company reaffirms its position that these earnings remain permanently invested, and has plans to repatriate funds to the U.S. for the foreseeable future. These earnings relate to ongoing operations and were approximately at Such earnings could become taxable upon the sale or liquidation of these foreign subsidiaries or upon dividend repatriation. It is practicable to estimate the amount of unrecognized withholding taxes and deferred tax liability on such earnings. The Company’s intent is for such earnings to be reinvested by the subsidiaries or to be repatriated only when it would be tax effective through the utilization of foreign tax credits.

 

Annually, the Company files income tax returns in various taxing jurisdictions inside and outside the United States. In general, the tax years that remain subject to examination are through for our major operations in Italy, Belgium and Japan. The tax years open to examination in the U.S. are for years subsequent to fiscal

 

The Company has approximately of unrecognized tax benefits as of which, if recognized would impact the effective tax rate. During the fiscal year the amount of unrecognized tax benefits increased primarily due to reserves established for the current year. During the next months, the Company anticipates closure of the Internal Revenue Service audit of fiscal year This could result in a significant change to the unrecognized tax benefits. The Company’s policy is to accrue interest and penalties related to unrecognized tax benefits in income tax expense.

 

Below is a reconciliation of beginning and ending amount of unrecognized tax benefits:

 

 

Substantially all of the Company’s unrecognized tax benefits as of if recognized, would affect the effective tax rate. As of and the amounts accrued for interest and penalties totaled and respectively, and are included in the reconciliation above.