NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 9: INCOME TAXES Income Tax Expense (Benefit) Years ended December 31 Note 2013 2012 Continuing operations: Current income tax expense $ 513 $ 428 Deferred tax expense (benefit): Origination and reversal of temporary differences 89 160 Revaluation of deferred tax balances due to legislative changes 8 54 Recognition of previously unrecognized deferred tax assets (14) (22) Total deferred tax expense 83 192 Income tax expense from continuing operations 596 620 Income tax expense from discontinued operations 6 – (10) Total income tax expense $ 596 $ 610 2013 2012 Statutory income tax rate 26.5% 26.4% Computed income tax expense $ 600 $ 619 Increase (decrease) in income taxes resulting from: Revaluation of deferred tax balances due to legislative changes 8 54 Non-taxable portion of capital gains (9) (61) Recognition of previously unrecognized deferred tax assets (14) (22) Impairment of goodwill and intangible assets – 11 Non-deductible stock-based compensation 8 9 Other items 3 10 Income tax expense from continuing operations $ 596 $ 620 The table below shows the difference between income tax expense from continuing operations, and income tax expense computed by applying the statutory income tax rate to income before income taxes. Our statutory income tax rate increased from 26.4% in 2012 to 26.5% in 2013 because of changes in Canadian provincial corporate income tax rates. Deferred Tax Assets and Liabilities The table below summarizes the movement of net deferred tax assets and liabilities during 2013 and 2012. As at December 31, 2013 and 2012, we had not recognized deferred tax assets for the following items. There are taxable temporary differences associated with our investment in Canadian domestic subsidiaries. We do not record deferred tax liabilities for temporary differences when we are able to control the timing of the reversal, and the reversal is not probable in the foreseeable future. Reversing these temporary differences would not result in any significant tax implications. 2013 2012 Deferred tax assets $ 31 $ 31 Deferred tax liabilities (1,702) (1,501) Net deferred tax liability $ (1,671) $ (1,470) Deferred tax assets (liabilities) Property, plant and equipment and Inventory Goodwill and other intangibles Stub period income and partnership reserve Non-capital loss carryforwards Other Total January 1, 2012 $ (484) $ (421) $ (807) $ 104 $ 248 $ (1,360) Benefit (expense) in net income (117) 61 72 (79) (129) (192) Benefit (expense) in other comprehensive income – – – – 82 82 December 31, 2012 (601) (360) (735) 25 201 (1,470) Benefit (expense) in net income (135) (9) 141 19 (99) (83) Benefit (expense) in other comprehensive income – – – – (49) (49) Acquisitions (16) (60) – 2 5 (69) December 31, 2013 $ (752) $ (429) $ (594) $ 46 $ 58 $ (1,671) 2013 2012 Capital losses in Canada that can be applied against future capital gains $43 $4 4 Tax losses in foreign jurisdictions that expire between 2023 and 2033 17 34 Deductible temporary differences in foreign jurisdictions 32 45 $92 $ 123 106 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT