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The foreign exchange gain for the three months ended March 31, 2013 comprised approximately $2 million related to the translation into Canadian dollars of the Corporation's US dollar-denominated long-term other asset representing the book value of the Corporation's expropriated investment in Belize Electricity (Notes 18 and 20). For the three months ended March 31, 2012 a foreign exchange loss of approximately $1.5 million was recognized on the translation into Canadian dollars of the above-noted long-term other asset.
The acquisition-related expenses are associated with the pending acquisition of CH Energy Group (Notes 1, 19 and 21).
9. FINANCE CHARGES
Quarter Ended March 31($ millions) 2013 2012----------------------------------------------------------------------------Interest - Long-term debt and capital lease and finance obligations 94 94 - Short-term borrowings 2 1Debt component of AFUDC (7) (4)---------------------------------------------------------------------------- 89 91--------------------------------------------------------------------------------------------------------------------------------------------------------
10. INCOME TAXES
Income taxes differ from the amount that would be expected to be generated by applying the enacted combined Canadian federal and provincial statutory income tax rate to earnings before income taxes. The following is a reconciliation of consolidated statutory income taxes to consolidated effective income taxes.
Quarter Ended March 31($ millions, except as noted) 2013 2012----------------------------------------------------------------------------Combined Canadian federal and provincial statutory income tax rate 29.0% 29.0%----------------------------------------------------------------------------Statutory income tax rate applied to earnings before income taxes 51 45Difference in Canadian provincial statutory rates applicable to subsidiaries in different Canadian jurisdictions (6) (6)Difference between Canadian statutory rate and rates applicable to foreign subsidiaries (2) (2)Items capitalized for accounting purposes but expensed for income tax purposes (16) (15)Difference between capital cost allowance and amounts claimed for accounting purposes (2) 3Non-deductible expenses 1 -Difference between enacted and substantively enacted income tax ratesassociated with Part VI.1 tax 2 -Difference between employee future benefits paid and amounts expensed for accounting purposes 1 -Other 1 (2)----------------------------------------------------------------------------Income taxes 30 23----------------------------------------------------------------------------Effective income tax rate 17.1% 14.7%--------------------------------------------------------------------------------------------------------------------------------------------------------
