11. Income Taxes

        The provision (benefit) for income taxes consists of the following (in thousands):

        The reconciliation of income tax provision that would result from applying the federal statutory rate to income tax provision as shown in the accompanying consolidated statements of income is as follows:

        The increase in our effective tax rate for fiscal 2011 versus fiscal 2010 is primarily attributable to the increase in earnings before income taxes. The decrease in 2010 versus 2009 was primarily due to more favorable general business and tax credits, primarily the FICA Tip Tax Credit, as a percent of current year income, which did not change at the same rate as the decrease in income.

        The Company's total deferred tax assets and liabilities at December 25, 2011, and December 26, 2010, are as follows (in thousands):

        The Company's federal and state deferred taxes at December 25, 2011, and December 26, 2010, are as follows (in thousands):

        Realization of net deferred tax assets are dependent upon profitable operations and future reversals of existing taxable temporary differences. Although realization is not assured, the Company believes it is more likely than not that the net recorded benefits will be realized through the reduction of future taxable income. The amount of the net deferred tax assets is considered realizable; however, it could be reduced in the near term if actual future taxable income is lower than estimated, or if there are differences in the timing or amount of future reversals of existing taxable temporary differences.

        The Company has federal alternative minimum tax credits of $1.3 million available with no expiration date. The Company also has general business and other tax credits totaling $12.9 million available to offset future taxes which expire through 2031.

        The Company adopted the requirements for accounting for uncertain tax positions on January 1, 2007. Under this interpretation, in order to recognize an uncertain tax benefit, the taxpayer must be able to more likely than not sustain the position, and the measurement of the benefit is calculated as the largest amount that is more than 50 percent likely to be realized upon resolution of the benefit. The Company has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The only periods subject to examination for the Company's federal and state returns are the 2007 through 2011 tax years.

        The following table summarizes the Company's unrecognized tax benefits (in thousands):

        The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is approximately $206,000. The Company does not anticipate significant changes in the aggregate amount of unrecognized tax benefits within the next twelve months, other than nominal tax settlements.

        The Company's policy for recording interest and penalties associated with audits is to record such items as a component of income before taxes. Penalties are recorded in Other (gains) losses, net, and interest paid or received is recorded in interest expense in the statement of income. In 2011, 2010, and 2009 no penalties were recorded. In 2011, 2010, and 2009 we recorded nominal interest expense on the identifiable tax liabilities.