90 Financial Instruments The Company uses derivative financial instruments to manage risks from fluctuations in exchange and interest rates. These instruments include interest rate and cross-currency exchange agreements. All such instruments are only used for risk management pur- poses. The Company accounts for these financial instruments as hedges and as a result the carrying values of the financial instruments are not adjusted to reflect their current market value. The net receipts or payments arising from financial instru- ments relating to the management of interest risks are recognized in interest expense over the term of the instrument. Foreign exchange gains or losses arising on cross- currency agreements used to hedge U.S. dollar denominated debt are deferred until maturity of the agreement at which time they are offset by the foreign currency hedge. If the Company’s exchange agreements ceased to be effective as hedges, for example, if current interest rate and current exchange rates varied significantly from the hedged rates, previously unrecognized gains or losses pertaining to the hedging transactions would be recognized in income at the time the hedge ceases to be effective. No compensation expense is recognized for stock options granted under the Company’s Stock Option Plan. Consideration paid by employees and senior officers on the exercise of stock options is credited to share capital. Consideration paid by the Company under the Company’s Employee Share Purchase Plan is included in operat- ing, general and administrative expenses. Basic and fully diluted earnings per share have been calculated using the weighted average number of Class A Voting and Class B Non-Voting Shares outstanding during the year. For purposes of determining fully diluted earnings per share, the weighted average number of Class A Voting and Class B Non-Voting Shares outstanding has been calculated as though all the dilutive options had been exercised at the begin- ning of the year, or date of issuance, if later. Basic and fully diluted cash flow from operations per share have been calculated using the cash flow from operations before the net change in non-cash working capital balances related to operations. Stock-Based Compensation Earnings per Share