Rogers 2012 Annual Report Download - page 101

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9. INCOME TAXES:
(a) Income tax expense (benefit):
The components of income tax expense (benefit) for the years ended
December 31, 2012 and 2011 were as follows:
Year ended
December 31,
2012
Year ended
December 31,
2011
Continuing operations:
Current income tax expense (benefit) $ 428 $ (136)
Deferred tax expense (benefit):
Origination and reversal of temporary
differences 160 721
Revaluation of deferred tax balances
due to legislative changes 54 (28)
Recognition of previously
unrecognized deferred tax assets (22) (12)
Total deferred tax expense 192 681
Income tax expense from continuing
operations 620 545
Income tax expense from discontinued
operations (note 6) (10) (10)
Total income tax expense $ 610 $ 535
Income tax expense from continuing operations varies from the
amounts that would be computed by applying the statutory income
tax rate to income before income taxes for the following reasons:
2012 2011
Statutory income tax rate 26.4% 28.0%
Computed income tax expense $ 621 $ 598
Increase (decrease) in income taxes resulting
from:
Revaluation of deferred tax balances due to
legislative changes 54 (28)
Tax rate differential on origination and
reversal of temporary differences –(31)
Non-taxable portion of capital gain (61) –
Recognition of previously unrecognized
deferred tax assets (22) (12)
Impairment of goodwill and intangible assets 11 –
Stock-based compensation 94
Other items 814
Income tax expense from continuing operations $ 620 $ 545
Due to Canadian federal and provincial enacted corporate income tax
rate changes, the statutory income tax rate for the Company
decreased from 28.0% in 2011 to 26.4% in 2012.
(b) Deferred tax assets and liabilities:
The net deferred tax liability consists of the following:
2012 2011
Deferred tax assets $31$30
Deferred tax liabilities (1,501) (1,390)
Net deferred tax liability $ (1,470) $ (1,360)
The movement of net deferred tax assets and liabilities are summarized as follows:
Deferred tax assets (liabilities) PP&E and Inventory
Goodwill
and other
intangibles
Stub period
income and
partnership
reserve
Non-capital
income tax loss
carryforwards Other Total
January 1, 2011 $ (464) $ (360) $ (138) $ 54 $ 305 $ (603)
Benefit (expense) in net income (18) (8) (669) 47 (33) (681)
Benefit (expense) in OCI – – – – (21) (21)
Acquisitions (2) (53) – 3 (3) (55)
December 31, 2011 (484) (421) (807) 104 248 (1,360)
Benefit (expense) in net income (117) 61 72 (79) (129) (192)
Benefit (expense) in OCI – – – – 82 82
December 31, 2012 $ (601) $ (360) $ (735) $ 25 $ 201 $ (1,470)
As at December 31, 2012, the Company had Canadian non-capital loss
carryforwards of $75 million, and foreign non-capital loss
carryforwards of $50 million. If not utilized, the majority of the
Canadian and foreign tax losses will expire after 2025. As at
December 31, 2012, the Company had approximately $44 million of
available capital losses to offset future capital gains.
As at December 31, 2012 and 2011, deferred tax assets have not been
recognized in respect of the following items:
2012 2011
Capital losses in Canada $44$41
Tax losses in foreign jurisdictions 34 45
Deductible temporary differences in foreign
jurisdictions 45 45
$ 123 $ 131
The Company has taxable temporary differences associated with its
investment in Canadian domestic subsidiaries. No deferred tax
2012 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 97