DAYLIGHT ENERGY PROVIDES 2010 TAX INFORMATION FOR U.S. SHAREHOLDERS
CALGARY, March 2, 2011 (DAY - TSX) Daylight Energy Ltd. ("Daylight") is pleased to provide 2010 tax
information for its U.S. shareholders.
The following information is being provided to assist U.S. individuals in reporting distributions and
dividends received during 2010 on their Internal Revenue Service ("IRS") Form 1040, "U.S.
Individual Income Tax Return" ("Form 1040"). This summary is of a general nature only and is not
intended to be legal or tax advice to any investor or potential investor. Readers should consult
their own legal and tax advisors as to their particular tax consequences and reporting obligations.
On May 7th, 2010, Daylight Resources Trust (the "Trust") converted from a trust to a corporation,
named Daylight Energy Ltd. Unitholders of the Trust received, for each trust unit held, one common
share of Daylight. For U.S. taxpayers, the conversion is expected to be a tax-free rollover, so no
capital gains are expected to be triggered for most typical U.S. investors. Following the conversion,
the Trust discontinued cash distributions and Daylight commenced paying cash dividends with the
final trust distribution paid on May 17, 2010 to unitholders of record on April 30, 2010.
DIVIDENDS PAID AS A CORPORATION
In consultation with its U.S. tax advisors, Daylight has determined that dividends paid to individual U.S.
shareholders should be considered "qualified dividends" for U.S. federal income tax purposes and be
eligible for the reduced tax rates applicable to long-term capital gains.
From June to December 2010, Daylight paid "qualified dividends", before withholding tax, as outlined
below.
Record Date
Payment Date
Dividend
($CDN)
Conversion
Rate (1)
Taxable
Qualified
Dividend
($US)
May 31, 2010
June 15, 2010
$0.05
0.9720
$0.048600
June 30, 2010
July 15, 2010
$0.05
0.9613
$0.048065
July 30, 2010
August 16, 2010
$0.05
0.9586
$0.047930
August 31, 2010
September 15, 2010
$0.05
0.9726
$0.048630
September 30, 2010
October 15, 2010
$0.05
0.9893
$0.049465
October 29, 2010
November 15, 2010
$0.05
0.9935
$0.049675
November 30, 2010
December 15, 2010
$0.05
0.9965
$0.049825
Total
(1) Bank of Canada Noon Rate
$0.35
$0.342190
-2DISTRIBUTIONS PAID AS A TRUST
From January to May 2010, Daylight paid cash distributions, before withholding tax, as outlined below.
Record Date
Payment Date
Distribution
($CDN)
Conversion
Rate (1)
Distribution
($US)
Taxable
Qualified
Dividend
($US)
Return of
Capital
($US)
December 31, 2009
January 15, 2010
$0.08
0.9721
$0.077768
$0.00
$0.077768
January 29, 2010
February 15, 2010
$0.08
0.9542
$0.076336
$0.00
$0.076336
February 26, 2010
March 15, 2010
$0.08
0.9788
$0.078304
$0.00
$0.078304
March 31, 2010
April 15, 2010
$0.08
0.9986
$0.079888
$0.00
$0.079888
April 30, 2010
May 17, 2010
$0.08
0.9611
$0.076888
$0.00
$0.076888
$0.389184
$0.00
$0.389184
Total
$0.40
(1) Bank of Canada Noon Rate
Units Held Outside of a Qualified Retirement Plan
The cash distributions the Trust paid from January to May 2010 to U.S. individual unitholders represent
a 100% return of capital.
For U.S. federal income tax purposes, in reporting a return of capital with respect to distributions
received, U.S. unitholders are required to reduce the cost base of their trust units by the total amount
of distributions received that represent a return of capital. This amount is non-taxable if it is a return
of cost base in the trust units. If the full amount of the cost base has been recovered, any further
return of capital distributions should be reported as capital gains.
U.S. unitholders are encouraged to utilize the Qualified Dividends and Capital Gain Tax Worksheet of
Form 1040 to determine the amount of tax that may be otherwise applicable.
U.S. unitholders who hold their trust units through a stockbroker or other intermediary should receive
tax reporting information from their stockbroker or other intermediary. We expect that the
stockbroker or other intermediary will issue a Form 1099–DIV, "Dividends and Distributions" or a
substitute form developed by the stockbroker or other intermediary. Daylight does not provide
unitholders with Form 1099-DIV. Information on the Form 1099-DIV issued by the brokers or other
intermediaries may not accurately reflect the information in this press release for a variety of reasons.
Investors should consult their brokers and tax advisors to ensure that the information presented here is
accurately reflected on their tax returns. Brokers and/or intermediaries may or may not be required to
issue an amended Form 1099-DIV.
The information in this release is provided for general information only and is not intended to be an
exhaustive discussion of all possible income tax consequences. Investors are encouraged to seek advice
from a qualified tax advisor in their country of residence to obtain guidance with respect to the
appropriate tax treatment of their distributions.
-3Units Held Within a Qualified Retirement Plan
No amounts are required to be reported on an IRS Form 1040 where Daylight units are held within a
qualified retirement plan.
CANADIAN WITHHOLDING TAX
For Canadian income tax purposes, 100% of distributions and dividends payable to non-residents of
Canada are normally subject to a 25% Canadian withholding tax. However, the withholding tax for
residents of the United States is reduced to 15% in accordance with a reciprocal tax treaty between
Canada and the United States.
Where shares are held outside a qualified retirement account, U.S taxpayers may be eligible for a
foreign tax credit with respect to the Canadian withholding taxes paid. Where shares are held in a
qualified retirement account, the same withholding taxes apply but the amount is not creditable for
U.S. tax purposes. U.S. taxpayers may apply for a reimbursement of withholding taxes from Canada
Revenue Agency by completing Form NR7-R "Application for Refund of Part XIII Tax Withheld" where
shares are held in certain qualified retirement accounts.
The amount of Canadian tax withheld should be reported on Form 1116, "Foreign Tax Credit (Individual,
Estate, or Trust)". Information regarding the amount of Canadian tax withheld in 2010 should be
determined from your own records and is not available from Daylight. Amounts over withheld, if any,
from Canada should be claimed as a refund from the Canada Revenue Agency no later than two years
after the calendar year in which the tax was withheld and should not be claimed as a credit against
your U.S. income tax liability.
Daylight is a growing intermediate oil and natural gas producing company with a high quality suite of
resource play assets in Western Canada. Our highly focused team utilizes our technical expertise in
exploitation, development, and acquisitions to create long-term value for our shareholders. Our team
has developed a multi-year inventory of repeatable, low risk exploitation resource play projects with
substantial potential reserve additions on assets we currently own and control in the premier Pembina
Cardium light oil fairway and in the premier Deep Basin area of Alberta and British Columbia.
Daylight has approximately 210 million common shares outstanding which trade on the TSX under the
symbol DAY. Daylight Series C and D convertible debentures trade on the TSX under the symbols
DAY.DB.C and DAY.DB.D, respectively.
For further information, please contact:
Daylight Energy Ltd.
Anthony Lambert, President & CEO
Telephone: 403-213-5306
Email: [email protected]
Steve Nielsen, Vice President & CFO
Telephone: 403-213-5312
Email: [email protected]
-4-
INVESTOR RELATIONS
Brian Prokop, Vice President, Capital Markets
T: (403) 536-4664
Toll Free: 1-877-266-6901
[email protected]
www.daylightenergy.com