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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Components of Company's Deferred Tax Assets and Liabilities

The significant components of the Company’s deferred tax assets and liabilities are as follows:

		December  31, 2012 $				December  31, 2011 $
Deferred tax assets:
Vessels and equipment			58,825				76,582
Tax losses carried forward(1)			427,443				380,299
Other			64,194				95,312
Total deferred tax assets			550,462				552,193
Deferred tax liabilities:
Vessels and equipment			26,503				60,776
Long-term debt			33,764				24,918
Other			40,117				45,624
Total deferred tax liabilities			100,384				131,318
Net deferred tax assets			450,078				420,875
Valuation allowance			(421,343	)			(398,559	)
Net deferred tax assets			28,735				22,316

(1) Substantially all of the Company’s net operating loss carryforwards of $1.69 billion relate to its Australian ship-owning subsidiaries and its Norwegian subsidiaries. These net operating loss carryforwards are available to offset future taxable income in the respective jurisdictions, and can be carried forward indefinitely.

Components of Provision for Income Taxes

The components of the provision for income taxes are as follows:

		Year Ended December 31, 2012 $				Year Ended December 31, 2011 $				Year Ended December 31, 2010 $
Current			9,167				(6,768	)			(13,129	)
Deferred			5,239				2,478				19,469
Income tax recovery (expense)			14,406				(4,290	)			6,340

Reconciliations of Income Tax Rates and Actual Tax Charge

Reconciliations of the tax charge related to the relevant year at the applicable statutory income tax rates and the actual tax charge related to the relevant year are as follows:

		Year Ended December 31, 2012 $				Year Ended December 31, 2011 $				Year Ended December 31, 2010 $
Net loss before taxes			(325,522	)			(372,131	)			(172,975	)
Net loss not subject to taxes			(129,307	)			(341,473	)			(416,684	)
Net (loss) income subject to taxes			(196,215	)			(30,658	)			243,709
At applicable statutory tax rates			(15,808	)			(8,987	)			57,737
Permanent and currency differences			(253,143	)			(172,368	)			(104,514	)
Adjustments to valuation allowances and uncertain tax positions			250,327				179,675				40,863
Other			4,218				5,970				(426	)
Tax expense (recovery) related to the current year			(14,406	)			4,290				(6,340	)

Unrecognized Tax Benefits, Recorded in Other Long-term Liabilities

The following is a roll-forward of the Company’s unrecognized tax benefits, recorded in other long-term liabilities, from January 1, 2010 to December 31, 2012:

		Year ended December 31, 2012 $				Year ended December 31, 2011 $				Year ended December 31, 2010 $
Balance of unrecognized tax benefits as at January 1			39,804				45,302				40,943
Increase for positions taken in prior years			—				83				4,037
Increase for positions related to the current year			4,560				3,308				8,979
Decreases for positions taken in prior years			(5,085	)			—				(4,557	)
Decreases related to statute of limitations			(9,915	)			(8,889	)			(4,100	)
Balance of unrecognized tax benefits as at December 31			29,364				39,804				45,302

X

- Definition

Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section 50

-Paragraph 9

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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