Rogers 2008 Annual Report Download - page 104

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100 ROGERS COMMUNICATIONS INC. 2008 ANNUAL REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Employee stock options are not considered dilutive after the
May 28, 2007 amendment to stock option plans (note 19(a)(i)).
8. NET INCOME PER SHARE
2008 2007
Numerator:
Net income for the year, basic and diluted $ 1,002 $ 637
Denominator (in millions):
Weighted average number of shares outstanding – basic 638 638
Effect of dilutive securities:
Employee stock options – 4
Weighted average number of shares outstanding – diluted 638 642
Net income per share:
Basic $ 1.57 $ 1.00
Diluted 1.57 0.99
The following table sets forth the calculation of basic and diluted
net income per share:
In 2000, the Company received a $241 million payment (the
“Termination Payment”) from Le Group Vidéotron Ltée
(“Vidéotron”) in respect of the termination of a merger agreement
between the Company and Vidéotron. In 2006, the Company
received a Notice of Reassessment from the Canada Revenue
Agency (“CRA”) in respect of the Termination Payment. The
Company challenged the Notice of Reassessment and, in 2006,
recorded a future income tax charge of $25 million based on the
expected resolution of this issue. During the year ended December
31, 2007, the Company was advised by the CRA that its challenge
was successful and, as a result, a future income tax recovery of
$25 million was recorded to reverse the charge recorded in 2006.
During 2008, the Company recorded the benefit of an income tax
credit of $65 million arising from the harmonization of the Ontario
provincial income tax system with the Canadian federal income tax
system. The resulting income tax credit will be available to reduce
future Ontario income taxes over the next five years.
During 2008, the Company recorded an increase in its valuation
allowance of $25 million. Of this increase, $19 million relates to
future tax assets in foreign jurisdictions and was recorded as an
increase in income tax expense in the statement of income. The
remaining $6 million relates primarily to unrealized losses on
investments and financial instruments and was charged to other
comprehensive income.
During 2007, the Company recorded a future income tax recovery
of $20 million relating to a decrease in the valuation allowance
recorded primarily in respect of realized and unrealized capital
losses.
As at December 31, 2008, the Company has the following Canadian
non-capital income tax losses available to reduce future years’
income for income tax purposes:
Income tax losses expiring in the year ending December 31:
2009 $ 24
2010 19
2011 – 2013 –
Thereafter 868
$ 911
In addition to the amounts above, as at December 31, 2008, the
Company had approximately $162 million in non-capital income tax
losses in foreign subsidiaries expiring between 2021 and 2028.
As at December 31, 2008, the Company had approximately
$263 million of available capital losses to offset future capital
gains.