Cogeco 2006 Annual Report Download - page 59

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Notes to Consolidated Financial Statements COGECO CABLE INC. 2006 57
12. FOREIGN CURRENCY TRANSLATION ADJUSTMENT
The change in the foreign currency translation adjustment included in shareholders’ equity is the result of the fl uctuation
in the exchange rates on translation of net investments in self-sustaining foreign operations and foreign exchange gains
or losses related to long-term debt denominated in foreign currency used to hedge net investments. The net change in
foreign currency translation adjustment for 2006 is as follows:
(amounts are in thousands of dollars) $
EFFECT OF EXCHANGE RATE VARIATION ON TRANSLATION OF NET INVESTMENTS
IN SELF-SUSTAINING FOREIGN SUBSIDIARIES (12,412)
EFFECT OF EXCHANGE RATE VARIATION ON TRANSLATION OF LONG-TERM DEBT
DESIGNATED AS HEDGE OF NET INVESTMENTS IN SELF-SUSTAINING
SUBSIDIARIES, NET OF INCOME TAXES OF $1,703,000 7,960
(4,452)
13. EARNINGS PER SHARE
The following table provides a reconciliation between basic and diluted earnings per share:
(amounts are in thousands of dollars, except number of shares and per share data) 2006 2005
$ $
NET INCOME 65,556 28,721
WEIGHTED AVERAGE NUMBER OF MULTIPLE VOTING
AND SUBORDINATE VOTING SHARES OUTSTANDING 39,990,239 39,964,857
EFFECT OF DILUTIVE STOCK OPTIONS(1) 172,784 161,587
WEIGHTED AVERAGE NUMBER OF DILUTED MULTIPLE VOTING
AND SUBORDINATE VOTING SHARES OUTSTANDING 40,163,023 40,126,444
EARNINGS PER SHARE
BASIC 1.64 0.72
DILUTED 1.63 0.72
(1) IN 2006, A TOTAL OF 150,647 STOCK OPTIONS (55,665 IN 2005) WERE EXCLUDED FROM THE CALCULATION OF DILUTED EARNINGS PER SHARE SINCE THE EXERCICE
PRICE OF THE OPTIONS WAS GREATER THAN THE AVERAGE SHARE PRICE OF THE SUBORDINATE VOTING SHARES.
Each unit credited gives the right to a Dividend Equivalent equal to the amount of dividend per share paid on the subordinate
voting shares of the Corporation. The Dividend Equivalent is converted into additional units. The units do not confer on
the participant the right to acquire shares or other securities of the Corporation under any circumstances and the participant
shall not, by holding units or otherwise be considered a shareholder of the Corporation nor have any rights to become a
shareholder as a result. During fi scal 2006 and 2005, no performance unit were granted to employees by the Corporation.
In 2006, an expense amounting to $139,000 ($197,000 in 2005) has been recorded related to this plan.
11. CAPITAL STOCK (continued)