Air New Zealand 2011 Annual Report Download - page 19

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3. TAXATION EXPENSE
GROUP
2011
$M
GROUP
2010
$M
COMPANY
2011
$M
COMPANY
2010
$M
Current taxation expense
Current year 28 (46) 69 2
Adjustment for prior periods 5 (6) 4 (8)
33 (52) 73 (6)
Deferred taxation expense
Origination and reversal of temporary differences (25) 16 (29) 2
Impact of changes in depreciation on building assets *** - (20) - (19)
Reduction in tax rate * - 15 - 8
(25) 11 (29) (9)
Total taxation credit/(expense) recognised in earnings 8 (41) 44 (15)
Reconciliation of effective tax rate
Profit before taxation 73 123 179 (30)
Taxation at income tax rate (22) (37) (54) 9
Adjustments
Non-deductible expenses (5) (1) (1) (1)
Non-taxable income - 3 77 8
Impact of corporate tax rate change * - 15 - 8
Over/(under) provided in prior periods ** 35 (2) 18 (18)
Changes in depreciation on building assets *** - (20) - (19)
Other - 1 4 (2)
Taxation credit/(expense) 8 (41) 44 (15)
* The New Zealand corporate income tax rate will reduce to 28% from the commencement of the 2012 income year. The impact of the
tax rate change included in the 2010 comparatives was calculated based on the forecasted deferred tax liability for Air New Zealand
at 30 June 2011 (which was subject to a number of variables including foreign exchange movements). A $3 million credit adjustment
is included in the current year in “Over/(under) provided in prior periods” to reflect the impact based on the actual deferred tax liability
at 30 June 2011.
** The balance of “Over/(under) provided in prior periods” largely relates to non-taxable income derived from the sale of two Boeing
747-400 aircraft in the 2009 income year. The Inland Revenue Department has agreed with this position given the particular
circumstances and application of historical tax legislation only applying to certain leases entered into prior to May 1999.
*** Tax deductions for depreciation on certain buildings with an estimated life of 50 years or more are not available from the start of the
2012 income year. This adjustment reflects expected future depreciation deductions that can no longer be claimed.
IMPUTATION CREDITS
GROUP
2011
$M
GROUP
2010
$M
COMPANY
2011
$M
COMPANY
2010
$M
Balance at the beginning of the year 33 47 33 39
Taxation (refunds)/payments (5) 16 (5) 16
Credits attached to distributions received - - - 8
Credits attached to distributions paid (32) (30) (32) (30)
Other 1 - 1 -
Balance at the end of the year (3) 33 (3) 33
AIR NEW ZEALAND ANNUAL FINANCIAL RESULTS 2011