Note 15: Income Taxes

At April 29, 2006, and April 30, 2005, we had state net operating losses and credits that, if fully utilized, would result in a tax reduction of approximately $11.1 million and $14.7 million, respectively. Due to the uncertainty of their actual utilization, we established a valuation reserve at the end of each year in the amounts of $8.7 million and $11.4 million for fiscal 2006 and fiscal 2005, respectively. These state net operating losses and credits expire between fiscal 2007 and fiscal 2026. During fiscal 2006, it became apparent that some tax benefits would not be used as the business operations in certain tax jurisdictions were terminated. Consequently, both the gross amount of these tax benefits and the related reserve were reduced by $3.9 million. In addition, the valuation reserve related to tax credits was increased by $0.8 million. Furthermore, at April 29, 2006, and April 30, 2005, our foreign subsidiaries had realized net operating losses that, if fully utilized, would result in a tax reduction of approximately $3.6 million and $1.1 million, respectively. Due to the uncertainty of their actual utilization, we established a valuation reserve of $1.8 million and $0.8 million at April 29, 2006, and April 30, 2005, respectively.