AnnuAl RepoRt 2012 - PGS
AnnuAl RepoRt 2012 - PGS AnnuAl RepoRt 2012 - PGS
142 noteS to tHe FInAnCIAl StAteMentS note 1 - summary oF signiFicant accounting policies Petroleum Geo-Services Group (“the Company”) has prepared its consolidated financial statements in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European Union, while the financial statements for Petroleum Geo-Services ASA (“PGS ASA”) are prepared in accordance with accounting principles generally accepted in Norway (“N GAAP”). PGS ASA applies the same accounting policies as described in Note 2 in the notes to the consolidated financial statements where relevant, except that unrealized foreign exchange gain (loss) on long-term intercompany loans is recognized in the statement of operations. The financial statements are presented in Norwegian Kroner (“NOK”). Shares in subsidiaries (see Note 7) are presented at cost less impairment. Impairment is recognized based upon the carrying value of the individual shares and net intercompany receivables in the subsidiaries less the estimated recoverable amount (based on discounted estimated future cash flows). If and when estimated recoverable amounts increase, impairment charges are reversed. There is no fixed plan for repayment of long-term intercompany receivables. Investments in associated companies are presented at cost less impairment. Impairment is recognized based upon the carrying value of the investment less the estimated recoverable amount (based upon observable market price). Proposed dividend to shareholders for the year is recognized as a liability at year end because it is considered more likely than not that the dividend will be approved by the General Assembly the following year. note 2 - intercompany transactions PGS ASA has significant intercompany transactions with its subsidiaries. Transactions with subsidiaries are mainly related to business support functions and financing activities. Intercompany transactions in the Statements of Operations consist of: (In thousands of NOK) 2012 2011 2010 Revenue 140,349 116,633 125,401 Cost of sales 2,004 1,953 1,845 Salaries and other operating expenses 115,794 37,534 63,183 Interest expense (income), net (Note 3) (26,691) (35,560) (4,693) Other financial items, net (Note 4) (643) 35,206 (1,103) Dividends/group contribution received from subsidiaries (932,028) (1,535,705) (400,000) Intercompany transactions, net 981,913 1,613,205 466,169 note 3 - interest expense, net Interest expense, net, consists of: (In thousands of NOK) 2012 2011 2010 Interest income, external 14,379 19,510 7,340 Interest income, intercompany 510,744 442,504 147,118 Interest expense, external (290,313) (287,221) (319,787) Interest expense, intercompany (484,053) (406,944) (142,424) Total (249,243) (232,151) (307,753) NOTES PGS ANNUAL REPORT 2012 Year ended December 31, Year ended December 31,
note 4 - otHer Financial items, net Other financial items, net, consist of: Year ended December 31, (In thousands of NOK) 2012 2011 2010 Amendment fees USD 950 million Credit Facilities (Note 12) - - (42,895) Gain (loss) on repurchase of convertible bonds (43,678) (31,176) - write-down of long term receivables (Note 8) - (44,694) - Foreign currency (loss) gain 151,709 (154,774) (63,740) Other (53,295) (22,237) (14,151) Total 54,735 (252,881) (120,786) note 5 - income taxes Reconciliation of income tax (benefit) expense to taxes computed at nominal tax rate on income before income taxes: (In thousands of NOK) 2012 2011 2010 Income (loss) before income taxes 949,569 937,338 (600,190) Norwegian statutory tax rate 28% 28% 28% Provision (benefit) for income taxes at the statutory rate 265,879 262,455 (168,053) Increase (reduction) in income taxes from: Non-taxable gain on sale of shares in subsidiary, net - (1,858) (29,368) Impairment (reversal) of shares in subsidiaries and associated companies (4,110) 147,658 170,033 Non-taxable dividends/ group contribution (188,859) (356,218) (28,506) Impairment of intercompany receivables (59,370) 249,433 - Other permanent items 21,006 (8,225) (33,285) Change in deferred tax assets not recognized in balance sheet - 6,032 4,559 Income tax (benefit) expense 34,547 299,277 (84,620) (In thousands of NOK) 2012 2011 temporary differences relates to: Property and equipment 295 524 Pension liabilities 6,996 6,624 Intercompany receivables 108,731 134,920 Unrealized (losses/accruals) gain 5,916 18,800 Shares in foreign subsidiaries 94,465 96,640 Compensation cost employee share options 738 9,801 Convertible notes valuation - (55,307) Interest rate swaps (a) 28,169 43,046 Other 15,301 - Tax losses carried forward 587,208 644,370 Deferred tax assets 847,820 899,418 Deferred tax assets not recognized in the balance sheet (94,466) (96,640) Deferred tax assets 753,354 802,778 (a) Change in deferred tax for interest swaps is recognized directly to shareholders’ equity (see Note 11). Year ended December 31, Year ended December 31, PGS ASA recognizes deferred tax assets when they are “more likely than not” of being realized. As of December 31, 2012, PGS ASA has recognized deferred tax assets of NOK 753.4 million (NOK 802.8 million as of December 31, 2011) as available evidence, including consolidated budgets, recent profits and estimates of projected near term future taxable income, supported a more likely than not conclusion that the deferred tax assets would be realized. 143 PGS ANNUAL REPORT 2012 NOTES
- Page 92 and 93: 92 Marine Contract and MultiClient
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- Page 98 and 99: 98 The tax effects of the Company
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- Page 112 and 113: 112 Senior notes In December 2012,
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- Page 154 and 155: 154 As of December 31, 2012, PGS AS
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note 4 - otHer Financial items, net<br />
Other financial items, net, consist of:<br />
Year ended December 31,<br />
(In thousands of NOK) <strong>2012</strong> 2011 2010<br />
Amendment fees USD 950 million Credit Facilities (Note 12) - - (42,895)<br />
Gain (loss) on repurchase of convertible bonds (43,678) (31,176) -<br />
write-down of long term receivables (Note 8) - (44,694) -<br />
Foreign currency (loss) gain 151,709 (154,774) (63,740)<br />
Other (53,295) (22,237) (14,151)<br />
Total 54,735 (252,881) (120,786)<br />
note 5 - income taxes<br />
Reconciliation of income tax (benefit) expense to taxes computed at nominal tax rate on income before income taxes:<br />
(In thousands of NOK) <strong>2012</strong> 2011 2010<br />
Income (loss) before income taxes 949,569 937,338 (600,190)<br />
Norwegian statutory tax rate 28% 28% 28%<br />
Provision (benefit) for income taxes at the statutory rate 265,879 262,455 (168,053)<br />
Increase (reduction) in income taxes from:<br />
Non-taxable gain on sale of shares in subsidiary, net - (1,858) (29,368)<br />
Impairment (reversal) of shares in subsidiaries and associated companies (4,110) 147,658 170,033<br />
Non-taxable dividends/ group contribution (188,859) (356,218) (28,506)<br />
Impairment of intercompany receivables (59,370) 249,433 -<br />
Other permanent items 21,006 (8,225) (33,285)<br />
Change in deferred tax assets not recognized in balance sheet - 6,032 4,559<br />
Income tax (benefit) expense 34,547 299,277 (84,620)<br />
(In thousands of NOK) <strong>2012</strong> 2011<br />
temporary differences relates to:<br />
Property and equipment 295 524<br />
Pension liabilities 6,996 6,624<br />
Intercompany receivables 108,731 134,920<br />
Unrealized (losses/accruals) gain 5,916 18,800<br />
Shares in foreign subsidiaries 94,465 96,640<br />
Compensation cost employee share options 738 9,801<br />
Convertible notes valuation - (55,307)<br />
Interest rate swaps (a) 28,169 43,046<br />
Other 15,301 -<br />
Tax losses carried forward 587,208 644,370<br />
Deferred tax assets 847,820 899,418<br />
Deferred tax assets not recognized in the balance sheet (94,466) (96,640)<br />
Deferred tax assets 753,354 802,778<br />
(a) Change in deferred tax for interest swaps is recognized directly to shareholders’ equity (see Note 11).<br />
Year ended December 31,<br />
Year ended December 31,<br />
<strong>PGS</strong> ASA recognizes deferred tax assets when they are “more likely than not” of being realized. As of December 31, <strong>2012</strong>, <strong>PGS</strong> ASA has recognized<br />
deferred tax assets of NOK 753.4 million (NOK 802.8 million as of December 31, 2011) as available evidence, including consolidated budgets, recent profits<br />
and estimates of projected near term future taxable income, supported a more likely than not conclusion that the deferred tax assets would be realized.<br />
143<br />
<strong>PGS</strong> ANNUAL REPORT <strong>2012</strong> NOTES
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