Excluding the impact of these items in both years, Torstar's effective tax rate was 30.5% in 2012 and 31.6% in 2011. The Canadian statutory rate was 26.5% in 2012, which was lower than the 28.25% Canadian statutory rate in 2011. The Canadian statutory rate had previously been planned to be reduced to 26.25% in 2012 and further to 25% by 2014. The Ontario government passed legislation during 2012 to indefinitely postpone this planned tax rate reduction. Torstar recorded a tax benefit of $0.2 million in 2012 in respect of this tax rate change.
Torstar's effective tax rate is higher than the Canadian statutory rate due to the impact of non-deductible expenses and income earned in foreign jurisdictions subject to higher rates of tax.
Net income attributable to equity shareholders
Torstar reported net income attributable to equity shareholders of $103.2 million or $1.30 per share in 2012 down $114.5 million or $1.44 per share from $217.7 million or $2.74 per share in 2011. Excluding the impact of CTV in 2011, Torstar would have reported net income attributable to equity shareholders of $143.1 million or $1.80 per share in 2011.
The 2013 revenue outlook for the Media Segment remains uncertain. Print advertising continues to be challenged by shifts in spending by advertisers and economic uncertainty. Early indications in 2013 are that print advertising revenue remains soft. Digital revenue is expected to grow in 2013. Cost reductions remain an important area of focus. The Media Segment is anticipated to realize $15.6 million of savings in 2013 from restructuring initiatives undertaken through the end of 2012. Management anticipates pursuing further cost reductions as the year progresses including recent restructuring initiatives in the Media Segment which are expected to result in annualized net savings of $6.6 million, $5.0 million of which are expected to be realized in 2013. In addition, fixed price arrangements with the suppliers of a majority of Torstar's newsprint requirements are expected to reduce newsprint costs by approximately $3.5 million in 2013. Net investment spending associated with growth initiatives in 2013 is anticipated to be consistent with 2012 levels.
Harlequin finished 2012 with operating earnings down $7.9 million compared to the prior year, excluding the impact of foreign exchange. Digital revenue growth and print declines began to moderate in North America as some stability emerged in print and digital sales during 2012. This trend is expected to continue. Overseas markets are expected to continue to face economic challenges particularly in Europe. After a challenging 2012, which included the impact of a competitor's bestseller and the introduction of higher author royalties on digital sales, Harlequin's earnings are anticipated to be relatively stable in 2013. However, earnings are expected to be lower in the first quarter due to the timing of the increase in author royalties on digital sales part way through 2012 and the strong results posted in the first quarter of 2012. If the Canadian dollar remains at its current levels relative to the U.S. dollar and overseas currencies, Harlequin anticipates the impact of foreign exchange to be relatively neutral in 2013.
Effective January 1, 2013 Torstar will be required to adopt the amended IAS 19 accounting standard surrounding Employee Benefits. After restating 2012 for the adoption of this standard, it is expected that 2013 employee future benefit expense will increase by approximately $2.0 million.
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