Management's Discussion and Analysis (cont’d) 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.  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  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: 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  IMPAIRMEnT OF nOn-FInAnCIALASSETS. 41 ANNUAL REPORT 2011 Q4 2011 Q4 2010 Diluted Earnings Per Share Diluted Earnings Per Share Based on Based on Average  Year-end Average  Year-end Shares  Shares Shares 2011 Shares ($000)  Outstanding Outstanding  Outstanding Outstanding Net Income $ (3,020)   $  (0.20)   $  (0.20)  $  1,686  $  0.11  $  0.11  Add back  Business acquisition, integration and other costs  7,963 0.52 0.52 613 0.04 0.04  Intercompany dividend withholding tax 800 0.05 0.05 1,006 0.07 0.07  5,743 0.38 0.38  3,305 0.21 0.22  Stock Compensation Expense, including  income tax adjustment  963 0.06 0.06  2,367 0.15 0.15  Adjusted Net Income 6,706 0.44 0.44  5,672 0.37 0.37  Shares outstanding (000s)  15,087  15,087  Dilutive effect of stock options outstanding at year-end (000s)   203  203  Year-end 2011 dilutive shares (000s)  15,290 15,290 15,374   15,290 