44
YOU SHOULD CONSULT YOUR OWN ADVISOR REGARDING THE U.S. FEDERAL INCOME TAX
CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR COMMON
SHARES IN LIGHT OF YOUR PARTICULAR CIRCUMSTANCES.
Definition of a U.S. Holder
As used herein, the term “U.S. Holder” means a beneficial owner of our securities that is (a) an individual citizen or
resident of the United States for U.S. federal income tax purposes; (b) a corporation (or other entity taxable as a
corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States or
any state thereof or the District of Columbia; (c) an estate the income of which is subject to U.S. federal income
taxation regardless of its source; or (d) a trust, if (i) a court within the United States can exercise primary supervision
over the administration of the trust and one or more U.S. persons are authorized to control all substantial decisions
of the trust or (ii) a valid election is in effect under applicable Treasury Regulations to treat such trust as a United
States person.
Passive Foreign Investment Company Rules
We will be classified as a passive foreign investment company (a “PFIC”) in any taxable year in which, after taking
into account the income and assets of certain subsidiaries, either (i) at least 75% of our gross income is passive
income, or (ii) at least 50% of the average value of our assets is attributable to assets that produce or are held for the
production of passive income. Whether or not we will be classified as a PFIC in any taxable year is a factual
determination and will depend upon our assets, the market value of our common shares, and our activities in each
year and is therefore subject to change.
We believe that we were likely classified as a PFIC for the period ended December 31, 2014, and may be a PFIC in
subsequent years. The tests for determining PFIC status depend upon a number of factors, some of which are beyond
our control and can be subject to uncertainties. Accordingly, we cannot provide certainty to U.S. Holders that we
were or were not a PFIC for the period ended December 31, 2014, or any future year. We will use commercially
reasonable efforts to provide information as to our status as a PFIC and the PFIC status of any subsidiary in which
the Company owns more than 50% of such subsidiary’s total aggregate voting power to U.S. Holders who make a
written request for such information.
If we are classified as a PFIC for any taxable year, the so-called “excess distribution” regime will apply to any U.S.
Holder of common shares that does not make a QEF election or mark-to-market election, as described below. Under
the excess distribution regime, (i) any gain the U.S. Holder realizes on the sale or other disposition of the common
shares (possibly including a gift, exchange in a corporate reorganization, or grant as security for a loan) and any
“excess distribution” that we make to such U.S. Holder (generally, any distributions to such holder in respect of the
common shares during a single taxable year that are greater than 125% of the average annual distributions received
by such U.S. Holder in the three preceding years or, if shorter, such holder’s holding period for the common shares),
will be treated as ordinary income that was earned ratably over each day in such U.S. Holder’s holding period for
the common shares; (ii) the portion of any excess distributions allocated to the current year or prior years before the
first day of the first taxable year beginning after December 31, 1986, in which we became a PFIC would be
includible by the U.S. Holder as ordinary income in the current year; (iii) the portion of such gain or distribution that
is allocable to prior taxable years during which we were a PFIC will be subject to tax at the highest rate applicable to
ordinary income for the relevant taxable years, regardless of the tax rate otherwise applicable to such U.S. Holder
and without reduction for deductions or loss carryforwards; and (iv) the interest charge generally applicable to
underpayments of tax will be imposed with respect of the tax attributable to each such year. The interest charge
discussed above generally will be non-deductible interest expense for individual U.S. Holders.
Certain elections may be available with respect to our common shares (the so-called “QEF,” “mark-to-market,” and
“deemed sale” elections) if we are a PFIC, but these elections may accelerate the recognition of taxable income and
may result in the recognition of ordinary income.
