Cogeco 2006 Annual Report Download - page 50

Download and view the complete annual report

Please find page 50 of the 2006 Cogeco annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 80

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80

48 COGECO CABLE INC. 2006 Notes to Consolidated Financial Statements
The income tax effect of temporary differences that give rise to a signifi cant portion of future income tax assets and
liabilities are as follows:
(amounts are in thousands of dollars) 2006 2005
$ $
FUTURE INCOME TAX ASSETS:
NON-CAPITAL LOSS CARRYFORWARDS 18,616 29,931
DEFERRED AND PREPAID INCOME 6,453 6,328
OTHER 467 913
TOTAL FUTURE INCOME TAX ASSETS 25,536 37,172
FUTURE INCOME TAX LIABILITIES:
FIXED ASSETS 67,952 62,350
DEFERRED CHARGES 13,536 12,961
CUSTOMER BASE 159,981 172,592
FOREIGN EXCHANGE GAIN ON LONG-TERM DEBT 1,703 —
TOTAL FUTURE INCOME TAX LIABILITIES 243,172 247,903
NET FUTURE INCOME TAX LIABILITIES 217,636 210,731
As at August 31, 2006, the Corporation and its Canadian subsidiaries had accumulated income tax losses amounting to
approximatively $53,917,000, the benefi ts of which have been recognized in these fi nancial statements. These losses
expire as follows:
(amounts are in thousands of dollars) 2008 2009 2010 2014 2026
$ $ $ $ $
21,184 20,289 1,011 2,007 9,426
As at December 31, 2005, the Corporation’s subsidiary, Cabovisão – Televisão por Cabo, S.A., had deductible temporary
differences which may be used for an indefi nite period. The related benefi ts have not been recognized in these fi nancial
statements. The Corporation’s subsidiary has also income tax losses of approximately €204,432,000 ($289,394,000)
which may be used to reduce future years taxable income. In accordance with the Portuguese Companies Income Tax Code
(“CIRC”), tax losses incurred in a fi nancial year can be carried forward and deducted from taxable profi ts of one or more of
the following six fi nancial years. However, the CIRC provides for certain exceptions whereby the general rule stated above
ceases to apply. One such exception is that tax losses cannot be deducted if the ownership of at least 50% of the social
capital changes from the moment when the tax losses were generated, unless a request is fi led before such change in the
ownership takes place, subject to approval by the Portuguese tax authorities. To this effect, a request for preservation of tax
losses was fi led by Cabovisão on July 28, 2006. The benefi ts resulting from these tax losses have not been recognized in
these fi nancial statements. These losses expire as follows:
(amounts are in thousands of dollars) 2006 2007 2008 2009 2010 2011
$ $ $ $ $ $
13,751 32,671 108,087 30,628 48,719 55,538
4. INCOME TAXES (continued)