8. INCOME TAXES

The domestic ("Singapore") and foreign components of income before income taxes were comprised of the following:


	Fiscal Year Ended March 31,
	2011	2010	2009
	(In thousands)
Domestic	$ (17,122)	$ 86,411	$ (1,090,863)
Foreign	632,719	(103,186)	(4,990,075)
Total	$ 615,597	$ (16,775)	$ (6,080,938)

The provision for (benefit from) income taxes consisted of the following:


	Fiscal Year Ended March 31,
	2011	2010	2009
	(In thousands)
Current:
Domestic	$ (972)	$ 50	$ 3,461
Foreign	24,000	(18,529)	68,581
	23,028	(18,479)	72,042
Deferred:
Domestic	(319)	1,077	895
Foreign	(3,331)	(17,967)	(67,728)
	(3,650)	(16,890)	(66,833)
Provision for (benefit from) income taxes	$ 19,378	$ (35,369)	$ 5,209

The domestic statutory income tax rate was approximately 17.0% in fiscal years 2011, 2010 and 2009. The reconciliation of the income tax expense (benefit) expected based on domestic statutory income tax rates to the expense (benefit) for income taxes included in the consolidated statements of operations is as follows:


	Fiscal Year Ended March 31,
	2011	2010	2009
	(In thousands)
Income taxes based on domestic statutory rates	$ 104,652	$ (2,852)	$ (1,033,760)
Effect of tax rate differential	25,861	(40,728)	38,440
Intangible amortization	12,055	15,279	23,098
Change in liability for uncertain tax positions	(29,205)	(80,175)	8,339
Goodwill impairment	—	—	1,011,496
Change in valuation allowance	(90,033)	69,076	(50,225)
Other	(3,952)	4,031	7,821
Provision for income taxes	$ 19,378	$ (35,369)	$ 5,209

A number of countries in which the Company is located allow for tax holidays or provide other tax incentives to attract and retain business. In general, these holidays were secured based on the nature, size and location of the Company's operations. The aggregate dollar effect on the Company's income resulting from tax holidays and tax incentives to attract and retain business for the fiscal years ended March 31, 2011, 2010 and 2009 were $66.5 million, $65.4 million and $85.3 million, respectively. For the fiscal year ended March 31, 2011, the effect on basic and diluted earnings per share was $0.09 and $0.08, respectively, and the effect on basic and diluted loss per share during fiscal years 2010 and 2009 were $0.08 and $0.10, respectively. Unless extended or otherwise renegotiated, the Company's existing holidays will expire in the fiscal years ending March 31, 2012 through fiscal 2018.

The components of deferred income taxes are as follows:


	As of March 31,
	2011	2010
	(In thousands)
Deferred tax liabilities:
Fixed assets	$ (28,534)	$ -
Total deferred tax liabilities	(28,534)	-
Deferred tax assets:
Fixed assets	57,360	24,512
Intangible assets	238,254	342,495
Deferred compensation	10,821	10,049
Inventory valuation	17,376	22,238
Provision for doubtful accounts	7,994	9,448
Net operating loss and other carryforwards	2,739,795	2,773,599
Others	—	146,965
	3,071,600	3,329,306
Valuation allowances	(2,994,186)	(3,280,827)
Net deferred tax assets	77,414	48,479
Net deferred tax asset	$ 48,880	$ 48,479
The net deferred tax asset is classified as follows:
Current asset (classified as other current assets)	$ 936	$ 1,205
Long-term asset	47,944	47,274
Total	$ 48,880	$ 48,479

The Company has tax loss carryforwards of approximately $7.9 billion, a portion of which begin expiring in 2012. Utilization of the tax loss carryforwards and other deferred tax assets is limited by the future earnings of the Company in the tax jurisdictions in which such deferred assets arose. As a result, management is uncertain as to when or whether these operations will generate sufficient profit to realize any benefit from the deferred tax assets. The valuation allowance provides a reserve against deferred tax assets that are not more likely than not to be realized by the Company. However, management has determined that it is more likely than not that the Company will realize certain of these benefits and, accordingly, has recognized a deferred tax asset from these benefits. The change in valuation allowance is net of certain increases and decreases to prior year losses and other carryforwards that have no current impact on the tax provision. Approximately $34.0 million of the valuation allowance relates to income tax benefits arising from the exercise of stock options, which if realized will be credited directly to shareholders' equity and will not be available to benefit the income tax provision in any future period.

The amount of deferred tax assets considered realizable, however, could be reduced or increased in the near-term if facts, including the amount of taxable income or the mix of taxable income between subsidiaries, differ from management's estimates.

The Company does not provide for income taxes on approximately $500.0 million of undistributed earnings of its foreign subsidiaries as of March 31, 2011, as such earnings are not intended by management to be repatriated in the foreseeable future. Determination of the amount of the unrecognized deferred tax liability on these undistributed earnings is not practicable.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:



	Fiscal Year Ended March 31,
	2011	2010
	(In thousands)
Balance, beginning of fiscal year	$ 129,888	$ 221,401
Additions based on tax position related to the current year	12,443	10,605
Additions for tax positions of prior years	25,572	15,693
Reductions for tax positions of prior years	(35,090)	(63,134)
Reductions related to lapse of applicable statute of limitations	(2,342)	(3,123)
Settlements	(1,187)	(55,412)
Other	5,343	3,858
Balance, end of fiscal year	$ 134,627	$ 129,888

The Company's unrecognized tax benefits are subject to change over the next twelve months primarily as a result of the expiration of certain statutes of limitations and as audits are settled. The Company is not currently aware of any such changes that may have a material impact on its consolidated results of operations, financial condition and cash flow.

The Company and its subsidiaries file federal, state, and local income tax returns in multiple jurisdictions around world. With few exceptions, the Company is no longer subject to income tax examinations by tax authorities for years before 2000.

The entire amount of unrecognized tax benefits at March 31, 2011, may affect the annual effective tax rate if the benefits are eventually recognized.

The Company recognizes interest and penalties accrued related to unrecognized tax benefits within the Company's tax expense. During the fiscal years ended March 31, 2011 and 2010, the Company recognized interest of approximately $5.0 million and $5.3 million, respectively, and no penalties. The Company had approximately $5.5 million and $66.8 million accrued for the payment of interest as of the fiscal years ended March 31, 2011 and 2010, respectively. The Company had $0 and $0.3 million accrued for the payment of penalties for the fiscal years ended March 31, 2011 and 2010, respectively.