Cogeco 2002 Annual Report Download - page 30

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29
Cogeco Cable Inc.
5. Unusual items
2002 2001
Charge related to staffing reduction program $ 4,925 $—
Write-off of certain fixed assets —28,963
Write-off of certain deferred charges —798
Write-off of an investment —720
$ 4,925 $ 30,481
In 2002, the Corporation completed a staff reduction program. As a result, a charge of $4,925,000 has been
recorded as an unusual item for the payment of employee severances.
In 2001, the Corporation wrote off an amount of $29,258,000 for the IP telephony project as a result of the
unforeseen level of effort required to deploy the IP solution. Furthermore, in 2001, the Corporation wrote off an
amount of $1,223,000 related to other assets.
6. Income taxes
2002 2001
Current (recovery) $ (449) $ 3,390
Future 5,364 (25,054)
$ 4,915 $ (21,664)
The following table provides the reconciliation between statutory federal and provincial income taxes and the
effective consolidated income tax rate:
2002 2001
Income taxes at combined income tax rate of 38.8% (41.3% in 2001) $ 3,377 $ (6,551)
Income (loss) subject to lower tax rates (1,614) 1,874
Reduction in income taxes as a result
of changes in substantially enacted tax rates (406) (23,783)
Income taxes arising from the non-deductible
amortization of customer base —3,280
Large corporation tax 3,500 3,479
Other 58 37
Income taxes at effective income tax rate $ 4,915 $ (21,664)
The income tax effect of temporary differences that give rise to a significant portion of future income tax assets
and liabilities are as follows:
2002 2001
Future income tax assets:
Non-capital loss carryforwards $ 45,353 $ 30,557
Other 4,531 5,219
Total future income tax assets 49,884 35,776
Future income tax liabilities:
Fixed assets 67,931 54,011
Deferred charges 11,719 8,059
Customer base 142,901 141,321
Total future income tax liabilities 222,551 203,391
Net future income tax liabilities $ 172,667 $ 167,615