Orbit Garant 2012 annual rep O rt 27 RECONCILIATION OF NON-IFRS 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 non-I 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 Company’s operating performance. Internally, the Company uses this non-IFRS 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. Non-IFRS 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 1.3 4.6 10.4 11.4 Finance costs 0.4 0.2 1.3 0.6 Income tax expense 0.9 2.0 4.7 5.3 Amortization 2.9 2.5 11.5 8.7 EBITDA 5.5 9.3 27.9 26.0 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 Company’s 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 43.6 41.0 154.8 127.7 Cost of contract revenue (including amortization) 35.9 30.9 121.1 99.2 Less amortization (2.1) (1.9) (8.5) (6.8) Direct costs 33.8 29.0 112.6 92.4 Adjusted gross proft 9.8 12.0 42.2 35.3 Adjusted gross margin (%) (1) 22.6 29.2 27.3 27.6 (1) Adjusted gross proft, divided by Contract revenue X 100 OUTSTANDING SECURITIES AS OF SEPTEM b ER 19, 2012 Number of shares 33,276,519 Number of options 2,623,000 Fully diluted 35,899,519 In fscal 2012, the Company issued 300,000 options at an exercise price of $5.60 and 10,500 options were exercised at an exercise price of $1.00 per share. On December 16, 2011, 217,082 shares were issued for the acquisition of Lantech Drilling.