The provision (benefit) for income taxes consists of:

Income (loss) before income taxes consists of the following:

Deferred income taxes reflect the net tax effects of tax carryovers and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the balances for income tax purposes. Significant components of the Company's deferred tax assets and liabilities as of December 31, 2011 and December 25, 2010 are as follows:

The breakdown between current and long-term deferred tax assets and deferred tax liabilities as of December 31, 2011 and December 25, 2010 is as follows:

Current deferred tax assets and current deferred tax liabilities are included in captions "Prepaid expenses and other current assets" and "Accrued Liabilities", respectively, on the consolidated balance sheet. Non-current deferred tax assets and non-current deferred tax liabilities are included in captions "Other assets" and "Other long-term liabilities", respectively, on the consolidated balance sheet.

As of December 31, 2011, substantially all of the Company's U.S. and foreign deferred tax assets, net of deferred tax liabilities, continued to be subject to a valuation allowance. The realization of these assets is dependent on substantial future taxable income which, at December 31, 2011, in management's estimate, is not more likely than not to be achieved. In 2011, the net valuation allowance decreased by $245 million primarily for decreases in deferred tax assets related to the utilization of net operating losses due to pre-tax book income and a change in the book to tax basis in investments. In 2010, the net valuation allowance decreased by $56 million primarily for decreases in deferred tax assets related to the utilization of net operating losses due to pre-tax book income and the utilization of foreign research and development credits to offset prior period audit adjustments, net of an increase in U.S. deferred tax assets, primarily for foreign tax credits arising from withholding taxes. In 2009, the net valuation allowance decreased by $93 million primarily for decreases in deferred tax assets related to tax deductible goodwill, intangibles and discount of convertible notes.

The following is a summary of the various tax attribute carryforwards the Company had as of December 31, 2011. The amounts presented below include amounts related to excess stock option deductions, as discussed above.

The table below displays reconciliation between statutory federal income taxes and the total provision (benefit) for income taxes.

The Company has made no provision for U.S. income taxes on approximately $414 million of cumulative undistributed earnings of certain foreign subsidiaries through December 31, 2011 because it is the Company's intention to permanently reinvest such earnings. If such earnings were distributed, the Company would incur additional income taxes of approximately $141 million (after an adjustment for foreign tax credits). These additional income taxes may not result in income tax expense or a cash payment to the Internal Revenue Service, but may result in the utilization of deferred tax assets that are currently subject to a valuation allowance.

The Company's operations in Singapore and Malaysia currently operate under tax holidays, which will expire in whole or in part at various dates through 2014. Certain of the tax holidays may be extended if specific conditions are met. The net impact of these tax holidays was to increase the Company's net income by $9 million and $7 million, in 2011 and 2010, respectively (less than $.01 per share, diluted). Due to losses, the tax holidays did not impact the Company's net income in 2009.

A reconciliation of the gross unrecognized tax benefits is as follows:

The amount of unrecognized tax benefits that would impact the effective tax rate was $4 million, $8 million, and $11 million as of December 31, 2011, December 25, 2010, and December 26, 2009, respectively. As of December 31, 2011, the Company had $2 million of accrued interest and no accrued penalties related to unrecognized tax benefits. As of December 25, 2010, the Company had accrued interest and penalties related to unrecognized tax benefits of $10 million and $1 million, respectively. As of December 26, 2009, the Company had accrued interest and penalties related to unrecognized tax benefits of $16 million and $5 million, respectively. The Company recognizes potential accrued interest and penalties to unrecognized tax benefits as interest expense and income tax expense, respectively.

The Company recorded a reduction of interest expense of $2 million and a decrease of $1 million of penalty expense in its consolidated statement of operations in 2011. The Company recorded a reduction of interest expense of $6 million and a decrease of $4 million of penalty expense in its consolidated statement of operations in 2010. The Company recorded net interest expense of $2 million and a decrease of $24 million of penalty expense in its consolidated statement of operations in 2009. During the 12 months beginning January 1, 2012, the Company expects to reduce its unrecognized tax benefits by approximately $4 million primarily as a result of the expiration of tax holidays. The Company does not believe it is reasonably possible that other unrecognized tax benefits will materially change in the next 12 months. However, the resolutions and/or closure of open audits are highly uncertain.

As of December 25, 2010, the Canada Revenue Agency, or CRA, has completed its audit of ATI for the years 2000 through 2004 and issued its final Notice of Assessment. During the second quarter of 2010, the U.S. Internal Revenue Service completed its audit of the U.S. Federal income tax returns for the years ending 2004 through 2006 inclusive. As of December 31, 2011 the German tax authorities completed its audit of AMD's German subsidiaries for the tax years 2001 through 2004. AMD and its subsidiaries have several foreign, foreign provincial, and U.S. state audits in process at any one point in time. The Company has provided for uncertain tax positions that require a liability under the adopted method to account for uncertainty in income taxes. The Company has not recognized any current or long-term deferred tax assets under a valuation allowance as a result of the application of uncertainty in income taxes in ASC 740 for unrecognized tax benefits as of December 31, 2011.