2011 Annual Report - BDO

NOTES TOFINANCIAL STATEMENTSThe reconciliation of tax on pre-tax income computed at the applicable statutory rates to taxexpense attributable to continuing operations follows:2011 2010Tax on pretax income at 30% P 195,340,934 P 219,803,578Adjustment for income subjected tolower tax rates ( 63,673,099 ) ( 28,950,071 )Tax effects of:Income exempted from income taxes ( 41,108,900 ) ( 106,306,220 )Income from FCDU ( 60,917,869 ) ( 36,999,219 )Non-deductible interest andother expenses 70,090,783 35,408,905Expiration of previously recognizednet operating loss carryover(NOLCO) 8,906,853 -Effect of recognition of previouslyunrecognized DTA ( 4,519,435 ) -Unrecognized MCIT 1,184,416 7,437,308Benefit from previously unrecognizedNOLCO - ( 6,100,000 )Tax expense reported in thestatements of income P 105,303,683 P 84,294,281The net deferred tax assets (included as part of Other Resources – see Note 10) as ofDecember 31 relate to the following:Statements of financial positionStatements of income2011 2010 2011 2010Deferred tax assetsNOLCO P 70,309,703 P 8,906,853 P 61,402,850 ( P 11,522,034 )Unrealized foreign exchangelosses - 24,990,300 ( 24,990,300 ) 9,705,407Unamortized past service cost 241,587 448,661 ( 207,074 ) ( 207,074 )Retirement payable 8,953,483 - 8,953,483 -Deferred tax liabilitiesUnrealized gain on tradingsecurities ( 49,114,132 ) ( 5,469,982) ( 43,644,150 ) 3,852,911Unrealized foreign exchangegains ( 26,478,252 ) - ( 26,478,252 ) -Net deferred tax assets P 3,912,389 P 28,875,832Deferred tax income (expense) (P 24,963,444 ) P 1,829,210