Orbit Garant 2012 annual rep O rt 27 RECONCILIATION OF NONIFRS FINANCIAL MEASURES Financial data has been prepared in conformity with IFRS However certain measures used in this discussion and analysis do not have any standardized meaning under IFRS and could be calculated differently by other companies The Company believes that certain nonI FRS fnancial measures when presented in conjunction with comparable IFRS fnancial measures are useful to investors and other readers because the information is an appropriate measure for evaluating the Companys operating performance Internally the Company uses this nonIFRS fnancial information as an indicator of business performance These measures are provided for information purposes i n addition to and not as a substitute for measures of fnancial performance prepared in accordance with IFRS NonIFRS financial measures EBITDA Proft for the period before fnance income and costs income tax expenses and amortization Adjusted gross margin Contract revenue less operating cost Operating expenses comprise material and service expenses personnel expenses other operating expenses excluding amortization E b ITDA Reconciliation of EBITDA Three months Three months T welve months Twelve months unaudited ended ended ended ended in millions of dollars June 30 2012 June 30 2011 June 30 2012 June 30 2011 Net earnings for the period 13 46 104 114 Finance costs 04 02 13 06 Income tax expense 09 20 47 53 Amortization 29 25 115 87 EBITDA 55 93 279 260 Adjusted gross margin Although adjusted gross margin is not a recognized fnancial measure defned by IFRS it is a widely recognized measure used i n the mineral drilling industry As a result management believes it provides a useful and comparable benchmark for evaluati ng the Companys performance Three months Three months T welve months Twelve months unaudited ended ended ended ended in millions of dollars June 30 2012 June 30 2011 June 30 2012 June 30 2011 Contract revenue 436 410 1548 1277 Cost of contract revenue including amortization 359 309 1211 992 Less amortization 21 19 85 68 Direct costs 338 290 1126 924 Adjusted gross proft 98 120 422 353 Adjusted gross margin 1 226 292 273 276 1 Adjusted gross proft divided by Contract revenue X 100 OUTSTANDING SECURITIES AS OF SEPTEM b ER 19 2012 Number of shares 33276519 Number of options 2623000 Fully diluted 35899519 In fscal 2012 the Company issued 300000 options at an exercise price of 560 and 10500 options were exercised at an exercise price of 100 per share On December 16 2011 217082 shares were issued for the acquisition of Lantech Drilling