NOLs: Determining Net Income/(Loss) & Provision for Taxes

Hey guys,

I'm no nol (net operating loss) pro by any means, so could use some help. In short, what are the mechanics of NOLs? Is the full NOL netted against pretax income to determine taxes to be paid? Seems too simplistic.

Here's a hypothetical situation I could use input on. Looking to calculate (1) net income/(loss) for years below, (2) remaining NOLs.
If someone's willing to help w/ a model, that would be incredible:

European co with 30m euros in NOLs going into 2011

Corp tax rate: 35%

Est. pretax income (EBT) by year:
2011: -2m (confirming: negative)
2012: -17m (confirming: negative)
2013: 5m
2014: 42m

Thanks for the help!

All Europe

Comments (9)

Nov 9, 2011

2010 2011 2012 2013 2014

EBT (30m) (2m) (17m) 5m 42m
Tax 0 0 0 1.75m 14.7m
Net Income/(Loss) (30m) 0 (8.5m) 5m 28.525m
Ending NOL Balance (10.5m) (8.5m) (2.975m) (1.225m) 0

something like this?

Nov 9, 2011

Yeah, that's what I'm looking for! Thanks! What's the calculation for that? You got a model it seems if you were able to run that fast...

Nov 9, 2011

Also, wondering why you have the NOL balance becoming less beneficial between 2010 and 2011 even though EBT was negative.

Nov 9, 2011

it was a napkin math, sorry. don't even know if it's accurate.
I must have screwed up lol, but i'm sure you get the point.
I shouldn't have taken out 2m out of NOL balance to make the 2m loss zero sum in 2011

Nov 9, 2011

Ha! Well thank you for the help. Still looking for a model if anyone has it.

Nov 10, 2011

Ok, I'm all set. Built a model out from scratch. Worked great.

Nov 10, 2011

Anyone pls?

Nov 10, 2011