INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2013

Components of loss before recovery of income taxes

The components of loss before recovery of income taxes were as follows:



	2013			2012			2011
Domestic	$	(574,527	)	$	(205,612	)	$	(41,374	)
Foreign	(739,925		)	(188,616		)	23,374
	$	(1,314,452	)	$	(394,228	)	$	(18,000	)

Components of recovery of income taxes

The components of recovery of income taxes were as follows:



	2013			2012			2011
Current:
Domestic	$	3,403		$	7,189		$	3,554
Foreign	80,010			56,337			36,337
	83,413			63,526			39,891
Deferred:
Domestic	—			(11,886		)	(21,763		)
Foreign	(534,196		)	(329,843		)	(195,687		)
	(534,196		)	(341,729		)	(217,450		)
	$	(450,783	)	$	(278,203	)	$	(177,559	)

Reconciliation of reported recovery of income taxes from the expected amount calculated by applying the Canadian statutory rate to income before recovery of income taxes

The reasons for this difference and the related tax effects are as follows:



	2013			2012			2011
Loss before recovery of income taxes	$	(1,314,452	)	$	(394,228	)	$	(18,000	)
Expected Canadian statutory rate	26.9		%	26.9		%	28.3		%
Expected recovery of income taxes	(353,588		)	(106,047		)	(5,085		)
Non-deductible amounts:
Amortization	—			6,173			22,251
Share-based compensation	13,096			6,258			14,045
Merger and acquisition costs	1,090			24,210			—
In-process research and development	—			3,228			—
Non-taxable gain on disposal of investments	—			(3,056		)	(15,384		)
Changes in enacted income tax rates	6,555			(4,459		)	(18,313		)
Canadian dollar foreign exchange gain for Canadian tax purposes	635			9,098			40,667
Change in valuation allowance related to foreign tax credits and net operating losses	70,154			—			—
Change in valuation allowance on Canadian deferred tax assets and tax rate changes	143,945			(34,245		)	(57,249		)
Change in uncertain tax positions	—			15,433			(8,568		)
Foreign tax rate differences	(407,604		)	(226,764		)	(180,301		)
Unrecognized income tax benefit of losses	—			32,019			22,187
Withholding taxes on foreign income	3,393			7,954			5,473
Alternative minimum and other taxes	—			(4,528		)	2,513
Taxable foreign income	55,350			10,675			—
Deferred intercompany profit	(5,726		)	(10,371		)	—
Other	21,917			(3,781		)	205
	$	(450,783	)	$	(278,203	)	$	(177,559	)

Schedule of tax effect of major items recorded as deferred tax assets and liabilities

The tax effect of major items recorded as deferred tax assets and liabilities is as follows:



	2013			2012
Deferred tax assets:
Tax loss carryforwards	$	957,703		$	293,547
Tax credit carryforwards	126,415			77,426
Scientific Research and Experimental Development pool	62,883			65,718
Research and development tax credits	83,669			67,683
Provisions	577,509			211,486
Plant, equipment and technology	38,339			7,478
Deferred revenue	12,549			60,850
Deferred financing and share issue costs	—			118,369
Share-based compensation	42,987			19,828
Other	76,464			23,453
Total deferred tax assets	1,978,518			945,838
Less valuation allowance	(477,573		)	(124,515		)
Net deferred tax assets	1,500,945			821,323
Deferred tax liabilities:
Intangible assets	2,884,288			1,610,386
Unremitted earnings	563,775			191,129
Deferred financing and share issue costs⁽¹⁾	16,598			—
Prepaid expenses	(353		)	1,094
Total deferred tax liabilities	3,464,308			1,802,609
Net deferred income taxes	$	(1,963,363	)	$	(981,286	)

____________________________________


(1)	The equivalent prior year liability balance of $36.3 million is offset in the assets line: Deferred financing and share issue costs.

Summary of open tax years by jurisdiction

Certain of these tax years are expected to remain open indefinitely.



Jurisdiction:		Open Years
United States - Federal		2011 - 2012
Canada		2005 - 2012
Brazil		2006 - 2012
Germany		2011 - 2012
France		2011 - 2012
China		2009 -2012
Ireland		2008 - 2012
Netherlands		2011 - 2012

Reconciliation of the beginning and ending amounts of unrecognized tax benefits

The following table presents a reconciliation of the beginning and ending amounts of unrecognized tax benefits:



	2013			2012			2011
Balance, beginning of year	$	127,978		$	102,290		$	110,857
Acquisition of B&L	52,183			—			—
Acquisition of Medicis	—			6,556			—
Additions based on tax positions related to the current year	60,678			3,492			2,701
Additions for tax positions of prior years	19,543			19,036			—
Reductions for tax positions of prior years	(10,801		)	(1,396		)	(11,268		)
Lapse of statute of limitations	(2,045		)	(2,000		)	—
Balance, end of year	$	247,536		$	127,978		$	102,290

- 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.

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