Cogeco 2013 Annual Report Download - page 72

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Consolidated financial statements COGECO CABLE INC. 2013 71
The following table provides the reconciliation between income tax expense at the Canadian statutory federal and provincial income tax rates
and the consolidated income tax expense:
Years ended August 31, 2013 2012
(in thousands of Canadian dollars) $$
Profit before income taxes 247,925 248,173
Combined income tax rate 26.96% 27.29%
Income tax expense at combined income tax rate 66,845 67,726
Adjustment for losses or profit subject to lower or higher tax rates 1,003 1,003
Increase in net deferred tax liabilities as a result of an increase in substantively enacted tax rate —11,716
Decrease in income taxes from changes in tax legislation on partnerships income —(3,450)
Income taxes arising from non-deductible expenses 3,517 815
Tax impacts related to investments in foreign operations (9,554) —
Changes in valuation allowance 39 —
Other 992 846
Income tax expense at effective income tax rate 62,842 78,656
The following table shows deferred income taxes resulting from temporary differences between the carrying amounts of assets and liabilities
for accounting purposes and the amounts used for tax purposes, as well as tax loss carryforwards:
At August 31, 2013 2012
(In thousands of Canadian dollars) $$
Property, plant and equipment (167,663) (87,451)
Intangible assets (387,344) (147,428)
Deferred and prepaid revenue 4,735 2,709
Partnerships income (53,629) (71,121)
Non-capital losses and other tax credit carryforwards, net of valuation allowance 109,365 5,827
Other (2,175) (391)
Net deferred tax liabilities (496,711) (297,855)
Financial statement presentation
Deferred tax assets 127,796 20,867
Deferred tax liabilities (624,507) (318,722)
Net deferred tax liabilities (496,711) (297,855)
The movements in deferred tax asset and liability balances during fiscal 2013 and 2012 were as follows:
Year ended August 31, 2013
Balance
beginning of
the year
Recognized
in profit or
loss
Recognized in
other
comprehensive
income
Acquisition
through
business
combinations
Cumulative
translation
adjustment Balance end
of the year
(In thousands of Canadian dollars) $ $ $ $ $ $
Property, plant and equipment (87,451) 12,982 — (88,598) (4,596) (167,663)
Intangible assets (147,428) (2,075) — (225,065) (12,776) (387,344)
Deferred and prepaid revenue 2,709 1,754 — 166 106 4,735
Partnerships income (71,121) 17,492 — — — (53,629)
Non-capital losses and other tax credits
carryforwards, net of valuation allowance 5,827 (6,583) — 104,296 5,825 109,365
Other (391) (1,736) (1,083) 1,128 (93) (2,175)
(297,855) 21,834 (1,083) (208,073) (11,534) (496,711)