General and Administrative Expenses GA increased slightly in 2006 versus 2005 from 764287 to 813178 Normalized EBITD A Normalized EBITD A in 2006 was 2671306 an increase of 1484882 from the 1186424 achieved in 2005 If the impact of the pastefill contract and bonuses to directors are excluded EBITD A in 2005 was 1223483 and 2006 represented an increase of 118 over the prior year Also in 2005 bonuses to directors were paid in the amount of 1150000 F inancial Expenses Interest costs in 2006 were 189851 as Garant operated at a very low level of leverage This is similar to the 102123 seen in 2005 Amortization Amortization is comparable to 2005 T otal amortization in each of 2005 and 2006 was 734846 and 738523 respectively Net Earnings Net earnings for the year totalled 1082807 as compared to 277769 achieved in 2005 The average tax rate for the Company in 2006 was 32 an increase over 20 in 2005 due to a significant part of the taxable income taxed at the rate without small businesses deduction Effect of Exchange Rate P rior to the acquisition of Drift in April 2007 all of the Companys revenue was denominated in Canadian dollars The Companys main exposure to exchange rate fluctuations arose from certain purchases denominated in US dollars which in fiscal 2007 totalled approximately 1 million The acquisition of Drift has resulted in certain of the Companys revenues being received in US dollars and certain expenses being paid in US dollars After accounting for these revenues costs taxes and other USdollardenominated purchases management estimates its net US dollar exposure at approximately US10 million per year A ccordingly fluctuations in the US dollar against the Canadian dollars do not have a significant impact on the financial results of the Company Seasonality The revenue of the Company shows some seasonal trends although fluctuations due to seasonality are not significant In the underground drilling division scheduled mine shutdowns over the holiday and summer periods at some locations result in lower revenue in these periods than would otherwise be the case In the domestic surface drilling division weather conditions in the spring and fall often cause drilling programs to pause or be planned around the seasonal fluctuations Similarly in the international surface drilling division weather conditions at certain times of the year make drilling difficult resulting in revenue fluctuations Liquidity and Capital R esources The Companys primary sources of liquidity are from operations and borrowings under its Existing Credit Agreement The Company plans to enter into the New Credit Agreement upon the closing of the Offering See Description of Debt The Company has historically used cash from operations to maintain its existing drills and fund the building or purchase of new rigs to expand capacity and other working capital needs The Company currently has an operating facility of up to 7 million to manage working capital requirements throughout the year Net cash flows from operating activities increased by 890397 in 2007 over 2006 This was mainly attributable to an increase in the net earnings 48