freefall51

Time to Pull the Trigger on Four Oil Service Stocks

On RIGs taxes:

From RIG's 10Q filing ending June 20, 08 I understand

1.) They are a Cayman Islands company. The earnings are not subject to income tax in the Cayman Islands because the country does not levy tax on corporate income.

2.) They pay taxes all over the world through operation of various subsidiaries in a number of countries throughout the world. Income taxes have been provided based upon the tax laws and rates in the countries in which operations are conducted and income is earned. .

3.) They pay taxes in the US only for key subsidiaries that reside in the US.

4.) The estimated annual effective tax rate for the six months ended June 30, 2008 and June 30, 2007 was 12.5 percent and 14.9 percent, respectively based on estimated annual income before income taxes for each period after adjusting for certain items such as net gains on rig sales and various other discrete items.

5.) The taxation rate is low and has dropped since last year. Due to the diversity of the places where taxes are paid, I would assume a certain stability of the tax rate. The big unknown is the liability for unrecognized tax benefits that increased to $482 million, including interest and penalties. This may or may not be due some time later. There are some disputes going on with the tax authorities in the US and Brazil.

As a consolation in case of liquidation of the company the liability probably wont be paid off.

Time to Pull the Trigger on Four Oil Service Stocks

You are speaking my mind.