content_image/146669.jpg
The effective rate in the fourth quarter of 2010 was 70.1% due to a dividend paid in December of 2010 from our U.S. subsidiary to the parent. This dividend was in connection with the financing structure implemented for the Viking Acquisition, and resulted in withholding tax of $1.0 million, which is recorded in our income tax expense for 2010. 

In addition, the Canadian income tax rules changed in 2010 regarding the tax deductibility of stock option expense. The cash settling of stock options by employees was no longer deductible to the employer if the employee is entitled to the stock option deduction. Generally, the stock option deduction is only available to employees when they acquire securities of their employer or if the employer makes an election to forgo the deduction for a cash payment. The Company has 

reviewed the changes to these rules and will elect to forgo the tax deduction on any amount paid to the employee in respect of the employee’s disposition of their rights under the Company’s stock option program. During the fourth quarter of 2010, we recorded $2.4 million of stock compensation expense, which increased our effective tax rate. As well, a deferred income tax asset of $0.5 million from 2010 and the first three quarters of 2010 needed to be expensed during the fourth quarter when the income tax rules changed regarding the tax deductibility of stock compensation expense. 

The table below shows the impact of non-operating, one-time acquisition costs, and stock option expense on our diluted earnings per share for the fourth quarter of 2010 and 2011. 

<img src='content_image/146669.jpg'>

## 7. CRITICALACCOUNTING ESTIMATES 

The preparation of the Company’s financial statements requires management to make critical judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the reporting date. On an ongoing basis, management evaluates its judgments, estimates and assumptions using historical experience and various other factors it believes to be reasonable under the given circumstances. Actual outcomes may differ from these estimates under different assumptions and conditions that could require a material adjustment to the reported carrying amounts in the future. 

The most significant critical judgment made by management in applying the Company’s accounting policies that could impact the amounts recognized in the consolidated financial statements is in relation to management’s assessment of arrangements containing a lease and lease classification. 

The most significant estimates made by management include the following: 

## IMPAIRMEnT OF nOn-FInAnCIALASSETS. 

At each balance sheet date, the Company reviews the carrying amounts of its property, plant and equipment and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. Individual assets are grouped together as a cash generating unit (“CGU”) for impairment assessment purposes at the lowest level at which there are 

