Rogers 2008 Annual Report Download - page 128

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124 ROGERS COMMUNICATIONS INC. 2008 ANNUAL REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
25. CANADIAN AND UNITED STATES ACCOUNTING POLICY DIFFERENCES
(E) In April 2004, a proceeding was brought against Fido and other
Canadian wireless carriers claiming damages totalling $160 million,
breach of contract, breach of confidence, breach of fiduciary duty
and, as an alternative to the damages claims, an order for specific
performance of a conditional agreement relating to the use of 38
MHz of MCS Spectrum. The Plaintiff has also brought a proceeding
against Inukshuk Wireless Partnership (“Inukshuk”), the Company’s
50% owned joint venture asserting a claim against the MCS
Spectrum licences that were transferred from Fido to Inukshuk.
Inukshuk brought a motion to have the separate action against
it dismissed. In May 2008, the Court dismissed the separate action
brought against Inukshuk. The appeal of this decision was heard in
January 2009. The Company is awaiting a decision from the Court.
The Company believes it has good defences to the claim and no
amounts have been provided in the accounts.
(F) The Company believes that it has adequately provided for
income taxes based on all of the information that is currently
available. The calculation of income taxes in many cases, however,
requires significant judgment in interpreting tax rules and
regulations. The Company’s tax filings are subject to audits, which
could materially change the amount of current and future income
tax assets and liabilities, and could, in certain circumstances, result
in the assessment of interest and penalties.
(G) There exist certain other claims and potential claims against
the Company, none of which is expected to have a material adverse
effect on the consolidated financial position of the Company.
The consolidated financial statements of the Company have been
prepared in accordance with GAAP as applied in Canada. In the
following respects, GAAP, as applied in the United States, differs
from that applied in Canada.
If United States GAAP were employed, net income for the years
ended December 31, 2008 and 2007 would be adjusted as follows:
2008 2007
Net income for the year based on Canadian GAAP $ 1,002 $ 637
Gain on sale of cable systems (B) (4) (4)
Pre-operating costs capitalized (C) 1 4
Capitalized interest, net of related depreciation (D) 11 10
Financial instruments (E) (76) 210
Stock-based compensation (F) (32) 3
Income taxes (H) 90 125
Installation revenues and costs, net (I) 10 (4)
Other (2) 3
Net income for the year based on United States GAAP $ 1,000 $ 984
Net income per share based on United States GAAP:
Basic $ 1.57 $ 1.54
Diluted 1.57 1.53
If United States GAAP were employed, comprehensive income for
the years ended December 31, 2008 and December 31, 2007 would
be adjusted as follows:
2008 2007
Comprehensive income for the year based on Canadian GAAP $ 857 $ 901
Impact of United States GAAP differences on net income (2) 347
Change in fair value of derivative instruments, net of income taxes of $88 (2007 – $100) (E) 5 (126)
Change in funded status of pension plans for unrecognized amounts, net of income taxes of $6 (2007 – $6) (G) 16 (15)
Comprehensive income for the year based on United States GAAP $ 876 $ 1,107