Income Taxes

9 Months Ended

12 Months Ended

Jan. 31, 2013

Apr. 30, 2012

Income Taxes

11. Income taxes:

As we operate in several tax jurisdictions, our income is subject to various rates of taxation. The income tax recovery (expense) differs from the amount that would have resulted from applying the Luxembourg statutory income tax rates to loss from continuing operations before income taxes as follows:

	Nine months ended
	January 31, 2013			January 31, 2012
Loss from continuing operations before income tax	$	(37,699	)	$	(39,670	)
Combined Luxemburg statutory income tax rate		29	%		29	%
Income tax recovery calculated at statutory rate		10,933			11,504
(Increase) decrease in income tax recovery (expense) resulting from:
Rate differences in various jurisdictions		19,623			33,316
Change in tax law		(1,158	)		(977	)
Non-deductible items		(27,481	)		(23,869	)
Other foreign taxes		(15,229	)		(8,185	)
Non-deductible portion of capital losses		185			1,092
Non-taxable income		21,745			2,113
Adjustments to prior years		(2,030	)		(5,863	)
Functional currency adjustments		858			(8,493	)
Valuation allowance		(57,338	)		1,707
Other		(714	)		(463	)
Income tax recovery (expense)	$	(50,606	)	$	1,882

As at January 31, 2013, there was $17.7 million in unrecognized tax benefits, of which $10.3 million would have an impact on the effective tax rate, if recognized.

During the nine months ended January 31, 2013, a $4.0 million uncertain tax position was identified and recorded. This includes interest and penalties of $1.4 million. As of January 31, 2013 and April 30, 2012, interest and penalties totaling $4.2 million and $2.9 million, respectively, were accrued.

17. Income taxes:

The Company’s income tax recovery (expense) is comprised as follows:

	For the year ended
	April 30, 2012			April 30, 2011			April 30, 2010
Current income tax recovery (expense):
Luxembourg	$	(2,294	)	$	(5,857	)	$	(7,615	)
Foreign		(13,751	)		1,631			(37,016	)
		(16,045	)		(4,226	)		(44,631	)
Deferred income tax recovery (expense):
Related to origination and reversal of temporary differences from foreign jurisdictions		23,452			56,355			35,358
Change in valuation allowance		(55,624	)		(19,213	)		(24	)
Income tax recovery (expense)	$	(48,217	)	$	32,916		$	(9,297	)

During the year ended April 30, 2012, the change in valuation allowance includes an adjustment to the opening balance due to a change in judgment about the realizability of the related deferred tax assets in future years in addition to valuation allowance against current year losses.

The components of loss from continuing operations before income tax is comprised as follows:

	For the year ended
	April 30, 2012			April 30, 2011			April 30, 2010
Luxembourg	$	(38,499	)	$	5,411		$	61,930
Foreign		7,823			(100,394	)		(127,699	)
	$	(30,676	)	$	(94,983	)	$	(65,769	)

As the Company operates in several tax jurisdictions, its income is subject to various rates of taxation. The income tax recovery (expense) differs from the amount that would have resulted from applying the Luxembourg statutory income tax rates to loss before taxes as follows:

	For the year ended
	April 30, 2012			April 30, 2011			April 30, 2010
Loss from continuing operations before income tax	$	(30,676	)	$	(94,983	)	$	(65,769	)
Combined Luxemburg statutory income tax rate		29	%		29	%		29	%
Income tax recovery calculated at statutory rate		8,896			27,545			19,073
(Increase) decrease in income tax recovery (expense) resulting from:
Rate differences in various jurisdictions		33,522			60,930			73,116
Change in tax law		(3,558	)		493			(1,283	)
Non-deductible items		(29,365	)		(58,007	)		(88,132	)
Other foreign taxes		(14,846	)		(7,740	)		(15,593	)
Non-deductible portion of capital losses (gains)		991			(373	)		4,301
Non-taxable income		10,292			1,442			3,781
Adjustments to prior years		(3,399	)		(2,047	)		7,781
Functional currency adjustments		4,627			32,163			(13,468	)
Valuation allowance		(55,624	)		(19,213	)		(24	)
Other		247			(2,277	)		1,151
Income tax recovery (expense)	$	(48,217	)	$	32,916		$	(9,297	)

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The tax effects of temporary differences that give rise to significant portions of deferred income tax assets and deferred income tax liabilities are presented below:

	2012			2011
Deferred income tax assets:
Pension and other employee benefits	$	18,573		$	16,716
Losses carried forward		356,697			295,652
Deferred costs		—			1,146
Current accounts payable and receivable		9,139			6,093
Intangible assets		—			3,140
Total deferred income tax assets		384,409			322,747
Valuation allowance		(227,838	)		(165,877	)
Net deferred income tax assets	$	156,571		$	156,870
Deferred income tax liabilities:
Intangible assets	$	(6,501	)	$	—
Property, plant and equipment		(56,144	)		(29,635	)
Deferred capital gains and deferred revenue		(54,508	)		(64,968	)
Long-term debt		(4,964	)		(11,917	)
Deferred costs		(5,897	)		—
Other		(2,873	)		(1,077	)
Net deferred income taxes	$	25,684		$	49,273
Distributed as follows:
Current deferred income tax assets	$	8,542		$	7,596
Current deferred income tax liabilities		(11,729	)		(13,035	)
Long-term deferred income tax assets		48,943			90,882
Long-term deferred income tax liabilities		(20,072	)		(36,170	)
	$	25,684		$	49,273

As at April 30, 2012, the Company has non-capital loss carry forwards for Luxembourg and other foreign jurisdictions that are available to reduce taxable income in future years. These non-capital loss carry forwards expire as follows:

	2013		2015		2017 and thereafter		No expiry date		Total
Tax losses (i):
Africa	$	—	$	10,913	$	955	$	12,458	$	24,326
Australia		—		—		—		46,669		46,669
Brazil		—		—		—		88,279		88,279
Canada		—		—		145,196		—		145,196
Denmark		—		—		—		29,458		29,458
Netherlands		2,727		—		13,275		—		16,002
Norway		—		—		—		457,479		457,479
Ireland		—		—		—		16,986		16,986
United Kingdom		—		—		—		98,237		98,237
Luxembourg		—		—		—		251,825		251,825
United States		—		—		19,072		—		19,072
Other		—		—		25,371		200		25,571
	$	2,727	$	10,913	$	203,869	$	1,001,591	$	1,219,100

(i) Represents the gross amount of tax loss carry forwards translated at closing exchange rates at April 30, 2012.

The Company has also accumulated approximately $184.6 million in capital losses (April 30, 2011 -$184.8 million), which carry forward indefinitely. None of the capital losses are available to reduce future capital gains realized in Luxembourg, and $184.6 million are available to reduce future capital gains realized in other foreign jurisdictions (April 30, 2011 – $184.8 million).

As at April 30, 2012, the Company has provided a valuation allowance in respect of $494.6 million of the non-capital losses (April 30, 2011 – $430.6 million) (2012 – Luxembourg – $251.8 million, other jurisdictions – $242.8 million; 2011 – Luxembourg – $278.0 million, other jurisdictions – $152.6 million) and $184.6 million (April 30, 2011 – $184.8 million) of the capital losses in other foreign jurisdictions. The benefit anticipated from the utilization of the remaining non–capital and capital losses has been recorded as a deferred income tax asset.

Uncertain tax positions:

The following table summarizes activity of the total amounts of unrecognized tax benefits:

	For the year ended
	April 30, 2012			April 30, 2011			April 30, 2010
Opening balance	$	15,302		$	16,448		$	15,834
Additions in the current year		8,014			122			8,914
Reductions in current year		(6,643	)		(2,181	)		(1,840	)
Reduction due to lapse of statutory limitations		—			—			(9,848	)
Foreign exchange		(748	)		913			3,388
Total	$	15,925		$	15,302		$	16,448

The following table summarizes information regarding income tax related interest and penalties:

	For the year ended
	April 30, 2012			April 30, 2011			April 30, 2010
Net reduction in interest and penalties	$	(227	)	$	(628	)	$	(1,029	)

The total amount of interest and penalties accrued on the balance sheet at April 30, 2012 was $2.9 million (2011 – $3.1 million).

General tax contingencies:

The Company is subject to taxes in different countries. Taxes and fiscal risks recognized in the Consolidated Financial Statements reflect the Company’s best estimate of the outcome based on the facts known at the balance sheet date in each individual country. These facts may include, but are not limited to, change in tax laws and interpretation thereof in the various jurisdictions where the Company operates. They may have an impact on the income tax as well as the resulting assets and liabilities. Any differences between tax estimates and final tax assessments are charged to the statement of operations in the period in which they are incurred.

In addition, the Company’s business and operations are complex and include a number of significant financings, acquisitions and dispositions. The determination of earnings, payroll and other taxes involves many factors including the interpretation of tax legislation in multiple jurisdictions in which the Company is subject to ongoing tax assessments. When applicable, the Company adjusts the previously recorded income tax expense, direct costs, interest and the associated assets and liabilities to reflect its change in estimates or assessments. These adjustments could materially change the Company’s results of operations.