Annual Report 2011 - PGS

Notes to the consolidated financial statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Tax effects of the Company’s temporary differences are summarized as follows:
December 31,
(In thousands of dollars) 2011 2010
Deferred tax assets
MultiClient library (27,898) (105,590)
Derivatives --- (7,882)
Employee benefits (20,205) (23,740)
Tax loss carry-forwards (223,983) (244,509)
Tax credits (18,069) (28,921)
Other (33,752) (49,423)
Income tax assets, gross (323,907) (460,065)
Deferred tax liability
Property and equipment 29,885 26,047
Intangible assets 21,425 17,417
Derivatives 4,146 11,749
Current accruals/liabilities 7,898 14,873
Deferred taxable gain/revenue 30,887 77,895
Other 2,344 18,925
Deferred tax liabilities, gross 96,585 166,906
Deferred tax assets, net (227,322) (293,159)
Deferred tax assets not recognized in the consolidated statements of financial position 66,533 103,150
Net recognized deferred tax assets (160,789) (190,009)
Net deferred tax (assets) in the consolidated statements of financial position is presented as follows:
December 31,
(In thousands of dollars) 2011 2010
Deferred tax assets (177,923) (210,766)
Deferred tax liabilities 17,134 20,757
Net deferred tax (assets) (160,789) (190,009)
The Company has substantial recognized deferred tax assets in different jurisdictions, predominantly in Norway. Available
evidence, including recent profits and estimates of projected future taxable income, has supported a more likely than not
conclusion that the related deferred tax assets would be realized in the future. The Company also has substantial deferred tax
assets, predominantly in Brazil and the UK, which have not been recognized because the future utilization is uncertain.
Tax losses carried forward both recognized and unrecognized and expiration periods as of December 31, 2011 are summarized
as follows:
(In thousands of dollars)
Brazil 76,407 No expiry
Norway 410,143 No expiry
Singapore 174,982 No expiry
UK 136,289 No expiry
Other 64,876 2012 - No expiry
Losses carried forward 862,697
It is the Company's current view that unremitted earnings from international operations are expected to be reinvested
indefinitely, and as a result, no Norwegian taxes have been provided for unremitted earnings.
With its multi-national operations, the Company is subject to taxation in many jurisdictions around the world with increasingly
complex tax laws. The Company has possible issues (mostly related to uncertain tax positions like permanent establishment
issues) in several jurisdictions that could eventually make it liable to pay material amounts in taxes relating to prior years. The
Company recognizes liabilities for uncertain tax positions if it is considered more likely than not that additional tax will be due,
based upon management’s assessment of the most likely outcome. Total accrued contingent tax liabilities as of December 31,
2011 was $8.0 million, of which $0.8 million is recorded as income taxes payable and $7.2 million as other long-term liabilities.
As of December 31, 2010, such amount totalled $13.3 million, of which $1.6 million recorded as income taxes payable and
$11.7 million as other long-term liabilities.
PGS ANNUAL REPORT 2011 18
PGS Annual Report 2011 89