23. Income Taxes The components of the Group’s deferred taxes as of December 31, 2009 and 2008 are as follows: Net deferred tax assets 2009 Deferred tax assets on: Allowance for probable losses Unrealized gain, deposits and accruals for various expenses on real estate transactions Retirement benefits Share-based payments NOLCO MCIT Others Deferred tax liabilities on: Capitalized interest and other expenses Others Net deferred tax assets
(In Thousands)
2008
P = 832,834
P = 796,299
321,177 100,466 82,784 19,052 27,323 484,134 1,867,770
446,236 144,850 62,265 28,854 5,214 233,895 1,717,613
(471,778) – (471,778) P = 1,395,992
(553,912) (30,854) (584,766) P = 1,132,847
Net deferred tax liabilities 2009 Deferred tax assets on: Unrealized gain, deposits and accruals for various expenses on real estate transactions NOLCO Others Deferred tax liabilities on: Excess of financial realized gross profit over taxable realized gross profit Capitalized interest and other expenses Others Net deferred tax liabilities
(In Thousands)
P = 17 – 809 826 (147,368) (37,151) (23,732) (208,251) (P = 207,425)
2008
P = 63,593 36,984 13,347 113,924 (137,854) (117,271) (44,335) (299,460) (P = 185,536)
The Group has NOLCO amounting to P =5.6 billion and P = 7.2 billion in 2009 and 2008, respectively, which were not recognized. Further, deferred tax assets from the excess MCIT over regular corporate income tax amounting to P = 38.6 million in 2009 and P =41.2 million in 2008 and from unrealized gain on real estate sales amounting to P = 4.8 million as of December 31, 2007, respectively, were also not recognized, since management believes that there would not be sufficient taxable income against which the benefits of the deferred tax assets may be utilized. As of December 31, 2009, NOLCO and MCIT that can be claimed as deduction from future taxable income or used as deductions against income tax liabilities are as follows: Year incurred
Expiry Date
2007 2008 2009
2010 2011 2012
NOLCO MCIT (In Thousands) P = 2,095,519 P = 20,248 2,282,936 17,482 1,336,734 28,197 P = 5,715,189 P = 65,927
At December 31, 2009 and 2008, deferred tax liabilities have not been recognized on the undistributed earnings and cumulative translation adjustment of foreign subsidiaries, associates and jointly controlled entities since the timing of the reversal of the temporary difference can be controlled by the Group and management does not expect the reversal of the temporary differences in the foreseeable future. The undistributed earnings and cumulative translation adjustment amounted to P = 1,626.7 million and P = 2,051.0 million as of December 31, 2009 and 2008, respectively. 2009 Annual REPORT 133