2011 Annual Report Financial Supplements - BDO

NOTES TOFINANCIAL STATEMENTSDECEMBER 31, 2011, 2010 AND 2009(Amounts in Millions of Philippine Pesos, Except Per Share Data or As Indicated)The reconciliation of the tax on pretax profit computed at the statutory tax rates to tax expenseis shown below.BDO Unibank Group2011 2010 2009Tax on pretax profit at 30% P 3,665 P 3,154 P 2,328Adjustment for income subjected to lowerincome tax rates ( 191)( 444) ( 633)Tax effects of:Income exempt from tax ( 3,253) ( 3,037) ( 1,010)Non-deductible expenses 2,208 2,439 585Deductible temporary differences not recognized ( 1,043) 489 51Net operating loss carryover (NOLCO)not recognized ( 114)( 1,374) 14Tax-exempt income of FCDU - - ( 1,314)Others 358 404 1,638Tax expense reported in profit or loss P 1,630 P 1,631 P 1,659Parent Bank2011 2010 2009Tax on pretax profit at 30% P 3,046 P 2,919 P 2,286Adjustment for income subjected to lowerincome tax rates ( 133) ( 404) ( 531)Tax effects of:Deductible temporary differences not recognized ( 995) 477 1,439Income exempt from tax ( 2,966)( 2,960) ( 1,015)Non-deductible expenses 1,993 2,266 542NOLCO not recognized (applied) ( 115) ( 1,360) ( 458)Tax-exempt income of FCDU - - ( 1,314)Others 369 359 314Tax expense reported in profit or loss P 1,199 P 1,297 P 1,263The components of the net deferred tax assets (see Note 13) as of December 31 follow:Statements of Financial PositionBDO Unibank GroupParent Bank2011 2010 2011 2010Deferred tax assets:Allowance for impairment P 6,024 P 6,012 P 5,916 P 5,916Unamortized past service cost 577 564 576 560Lease income differential 82 74 82 74NOLCO 43 9 - -Others 13 36 - -6,739 6,695 6,574 6,550Deferred tax liabilities:Revaluation increment 480 499 477 497Lease income differential 189 180 - -Changes in fair values of AFS 63 62 - -Capitalized interest 56 58 56 58Others 466 312 455 3081,254 1,111 988 863Net Deferred Tax Assets P 5,485 P 5,584 P 5,586 P 5,687