-- Total interest expense for the fourth quarter was $16.6 million compared to $19.4 million in the prior year quarter. Interest expense was lower than the prior year quarter as a result of lower average debt levels due to Superior's ongoing focus to reduce its total debt levels.-- Corporate costs were $3.5 million in the fourth quarter which was consistent with the prior year period.-- Superior's dividend re-investment program (DRIP) generated proceeds of $3.6 million during the fourth quarter ($14.2 million year-to-date). Proceeds from the DRIP will be used to reduce existing debt levels. The DRIP provides Superior's shareholders with the opportunity to reinvest their cash dividends in the future growth of the business at a 5% discount to the market price of Superior's common shares.-- Superior's total debt (including convertible debentures) to Compliance EBITDA improved to 4.4X as at December 31, 2012, compared to 5.1X as at December 31, 2011. Superior continues to make progress on reducing its total leverage by focusing on debt reduction, including reducing working capital requirements and improving business operations. See "Debt Management Update" for details on Superior's anticipated December 31, 2013 total debt to EBITDA ratio.-- On January 3, 2013, Superior early redeemed $50.0 million of its 5.85%, October 31, 2015 convertible debentures. The early redemption allows for Superior to benefit from lower average interest rates in addition to actively managing its balance sheet maturities. Superior has no material balance sheet maturities which require refinancing in 2013.
CRA Income Tax Update
On February 11, 2013, Superior received a proposal letter from Canada Revenue Agency ("CRA") which confirms the CRA's intent to challenge the tax consequences of Superior's corporate conversion transaction which occurred on December 31, 2008. The CRA has indicated in their proposal letter that they intend to challenge the transaction on the basis of the acquisition of control rules, in addition to the general anti-avoidance rules of the Income Tax Act (Canada). As previously disclosed on September 20, 2012, Superior anticipated receiving a proposal letter from CRA in due course. Superior has 30 days to respond to the letter. Superior's understanding is that the CRA will then proceed with a Notice of Reassessment for Superior's 2009, 2010 and 2011 taxation years. Superior is required to pay 50% of the resultant tax liability; Superior anticipates that the 50% payment required would be approximately $10 million for 2009 through 2011 and approximately $5 million for Superior's 2012 taxation year once that information is filed with CRA and then ultimately reassessed. Superior has 90 days from the Notice of Reassessment to prepare and file a Notice of Objection which would be reviewed by the CRA's appeals division. If the CRA is not in agreement with Superior's Notice of Objection, Superior has the option to file its case with the Tax Court of Canada. Superior anticipates that legal proceedings through the various tax courts would take between 2 to 4 years.
Superior remains confident in the appropriateness of its tax filing position and the expected tax consequences of the Conversion and intends to vigorously defend such position. Superior strongly believes that the acquisition of control or the general anti-avoidance rules do not apply to the Conversion and intends to file its future tax returns on a basis consistent with its view of the outcome of the Conversion. See press release "Superior Plus Corp. Provides Update on Review of Conversion Transaction and Settlement Related to Power Purchase Agreement with TransCanada" dated September 20, 2012, for additional details on this matter including the potential financial implications of a reassessment.