Income taxes (Tables)

12 Months Ended

Dec. 31, 2013

The provision for income taxes consists of the following:



			Provision for income taxes
Year ended December 31, 2013	Pre-tax (loss)/ income $’000		Current $’000		Deferred $’000	Total $’000

Bermuda	(17,696	)	—		—	—
United States	(3,955	)	(369	)	100	(269	)
Rest of the world	6,659		17,538		359	17,897

	(14,992	)	17,169		459	17,628



			Provision for income taxes
Year ended December 31, 2012	Pre-tax (loss)/ income $’000		Current $’000	Deferred $’000		Total $’000

Bermuda	(8,244	)	—	—		—
United States	1,903		3,656	(647	)	3,009
Rest of the world	14,442		16,540	2,102		18,642

	8,101		20,196	1,455		21,651



			Provision for income taxes
Year ended December 31, 2011	Pre-tax (loss)/ income $’000		Current $’000	Deferred $’000		Total $’000

Bermuda	(23,436	)	—	—		—
United States	13,918		3,986	(561	)	3,425
Rest of the world	4,881		16,663	(477	)	16,186

	(4,637	)	20,649	(1,038	)	19,611

Schedule of reconciliation of provision for income taxes

The reconciliation of earnings/(losses) before provision for income taxes and earnings from unconsolidated companies, net of tax at the statutory tax rate to the provision for income taxes is shown in the table below:



	2013		2012		2011
Year ended December 31,	$'000		$'000		$'000

Earnings/(losses) before provision for income taxes and earnings from unconsolidated companies, net of tax	(14,992	)	8,101		(4,637	)

Tax charge at statutory tax rate of Nil%⁽¹⁾	—		—		—

Exchange rate movements on deferred tax	(3,207	)	83		(2,094	)
Other permanent items	674		2,943		106
Change in valuation allowance	13,015		6,093		11,795
Difference in taxation rates	7,353		11,421		9,067
Change in provisions for uncertain tax positions	(1,788	)	(174	)	817
Change in tax rates	(276	)	600		(222	)
Deferred tax charge for derivatives	2,119		—		—
Other	(262	)	685		142

Provision for income taxes	17,628		21,651		19,611

⁽¹⁾ The Company is resident in Bermuda, which does not impose an income tax.

Schedule of net deferred tax liabilities



	2013		2012		2011
Year ended December 31,	$’000		$’000		$’000

Operating loss carry-forwards	122,500		93,466		61,708
Pensions	321		1,899		2,161
Share-based compensation	3,146		2,813		1,647
Trademarks	5,075		5,563		3,868
Other	9,173		9,197		2,897
Less: Valuation allowance	(110,780	)	(97,376	)	(50,746	)

Net deferred tax assets	29,435		15,562		21,535

Other	(7,962	)	(5,267	)	(4,609	)
Property, plant and equipment	(183,174	)	(171,016	)	(172,643	)

Deferred tax liabilities	(191,136	)	(176,283	)	(177,252	)

Net deferred tax liabilities	(161,701	)	(160,721	)	(155,717	)

Schedule of unrecognized tax benefits

At December 31, 2013, the total amounts of unrecognized tax benefits included the following:



	Total		Principal		Interest		Penalties
Year ended December 31, 2013	$’000		$’000		$’000		$’000

Balance, January 1, 2013	4,581		2,874		1,174		533
Additional uncertain tax provision identified during the year	2,720		2,716		(4	)	8
Increase to uncertain tax provision on prior year positions	737		559		138		40
Uncertain tax provisions paid during the year	(737	)	(559	)	(138	)	(40	)
Decrease to uncertain tax provisions on prior year positions	(3,924	)	(2,302	)	(1,127	)	(495	)
Decreases as a result of expiration of the statute of limitations	(387	)	(351	)	(36	)	—
Foreign exchange	(2	)	(2	)	—		—

Balance at December 31, 2013	2,988		2,935		7		46

At December 31, 2013, OEH recognized a $2,988,000 liability in respect of its uncertain tax positions. Of the unrecognized tax benefit at December 31, 2013, if recognized, $2,054,000 would affect the effective tax rate.

At December 31, 2012, the total amounts of unrecognized tax benefits included the following:



	Total		Principal		Interest		Penalties
Year ended December 31, 2012	$’000		$’000		$’000		$’000

Balance at January 1, 2012	4,755		3,169		1,148		438
Additional uncertain tax provision identified during the year	403		401		2		—
Increase to uncertain tax provision on prior year positions	444		151		168		125
Uncertain tax provisions paid during the year	—		—		—		—
Decrease to uncertain tax provisions on prior year positions	—		—		—		—
Decreases as a result of expiration of the statute of limitations	(686	)	(622	)	(64	)	—
Foreign exchange	(335	)	(225	)	(80	)	(30	)

Balance at December 31, 2012	4,581		2,874		1,174		533

At December 31, 2012, OEH recognized a $4,581,000 liability in respect of its uncertain tax positions. The entire balance of unrecognized tax benefit at December 31, 2012, if recognized, would affect the effective tax rate.

At December 31, 2011, the total amounts of unrecognized tax benefits included the following:



	Total		Principal		Interest		Penalties
Year ended December 31, 2011	$’000		$’000		$’000		$’000

Balance, January 1, 2011	8,194		4,550		1,627		2,017
Additional uncertain tax provision identified during the year	—		—		—		—
Increase to uncertain tax provision on prior year positions	817		600		132		85
Uncertain tax provisions paid during the year	(642	)	(306	)	(192	)	(144	)
Decrease to uncertain tax provisions on prior year positions	(3,178	)	(1,500	)	(358	)	(1,320	)
Decreases as a result of expiration of the statute of limitations	—		—		—		—
Foreign exchange	(436	)	(175	)	(61	)	(200	)

Balance, December 31, 2011	4,755		3,169		1,148		438

At December 31, 2011, OEH recognized a $4,755,000 liability in respect of its uncertain tax positions. The entire balance of unrecognized tax benefit at December 31, 2011, if recognized, would affect the effective tax rate.