SUMMARY OF QUARTERLY RESULTS  OUTSTANDING SHARES  CRA UPDATE  Annual Report  2013  Management Discussion & Analysis 24  Alaris intends to file a notice of objection to the Notice of Reassessment and has 90 days from the date the Notice of Reassessment  is mailed to do so. Alaris is required to pay a deposit of 50% of the assessed tax liability (plus interest) at that time. Alaris’ total federal  and provincial assessed tax liability (as described in the Notice of Reassessment) is estimated to be $3.6 million and Alaris will be  required to pay a deposit of approximately $1.8 million on that amount, with the remaining amount not payable until the dispute with  the CRA is resolved and only if the result is not in Alaris’ favor. Although the Corporation does not expect to receive any additional  reassessments in respect of its taxation years subsequent to July 14, 2009 until matters under the Notice of Reassessment have been  resolved, the Corporation may also be reassessed with respect to the deduction of its non-capital losses in all of its tax filings  subsequent to July 14, 2009. In such event, Alaris’ aggregate total assessed tax liability (including interest) is estimated to be  approximately $25 million (see table below) and the total aggregate deposits Alaris would be required to pay in order to contest such  Any future reassessment of the Corporation’s non-capital losses by the CRA on any of its other tax filings to date would not affect the  Corporation’s current annualized dividend of $1.44 per share, nor would it change Alaris’ long-term strategy, even if the CRA's position  was ultimately upheld. Alaris’ current annualized payout ratio of approximately 80% will allow it to pay both current, and future cash  taxes while maintaining the current dividend rate. Alaris expects to fully utilize its current tax assets by mid-2015. Therefore,  management has been managing Alaris’ payout ratio to a target level so that upon the eventual utilization of all of its available tax  assets, and its requirement to begin paying cash taxes in Canada, the dividend would be sustainable at its current level. This target  is achieved at today’s ratio of 80%.  In management’s view, the CRA's reassessment of Alaris, and certain of its recent reassessments of other Canadian companies, is  part of a broader initiative on the CRA's part to challenge companies with respect to the use of tax assets. Alaris has received legal  (tax) advice that Alaris should be entitled to deduct the non-capital losses, and as such, Alaris is of the opinion that its tax filings to  date are correct and will withstand any reassessment by the CRA. Alaris intends to vigorously defend its tax filing position.  In January 2014, the Corporation received proposal letters (the “Proposal Letters”) from the Canada Revenue Agency (the “CRA”)  wherein the CRA advised that it intended to reassess Alaris and deny the deduction of certain non-capital losses claimed by Alaris for  the taxation year ended July 14, 2009. The CRA indicated in the Proposal Letters that it intends to reassess Alaris on the basis that  there occurred an acquisition of control in 2006 in connection with a reorganization of the Corporation. The Corporation then received  a notice of reassessment (the “Notice of Reassessment”) from the CRA in February 2014 pursuant to which the CRA did deny the  deduction of the non-capital losses claimed by Alaris for the taxation year ended July 14, 2009 and was challenging Alaris’ July 14,  2009 tax filing based on the acquisition of control rules of the Income Tax Act (Canada). Subsequent to December 31, 2013, the Corporation issued 2,227 shares as a result of the exercise of options and 26,250 shares that  vested to Directors under the RSU Plan. At March 7, 2014, the Corporation had 28,722,171 common shares outstanding.  At December 31, 2013, 233,207 RSUs and 1,748,998 stock options were outstanding under the Corporation’s long-term incentive  compensation plans. The weighted average exercise price of the outstanding options is $23.67.  In the year ended December 31, 2013, the Corporation issued: 5,888,000 shares by way of short form prospectus; 181,821 by way of  a private placement; 241,021 shares as a result of the exercise of options; and 46,250 shares under the Restricted Share Unit (“RSU”)  Plan.  At December 31, 2013, the Corporation had authorized, issued and outstanding, 28,693,694 voting common shares. In Q2 2013, the Corporation recorded a $13.1 million gain on the reduction of the financial interest in LifeMark and in Q4 2013, the  Corporation recorded a $15.5 million loss on SHS that affected both revenue and earnings in those periods.  Amounts are in thousands except for income (loss) per unit/share:  Q4-13  Q3-13  Q2-13  Q1-13  Q4-12  Q3-12  Q2-12  Q1-12  Revenue  (758)  15,229  24,351  10,807  9,037  8,792  7,239  7,038  Earnings  (2,856)  8,388  17,597  6,689  4,931  4,868  4,160  3,957  Basic and Diluted Income (loss) per  Share/Unit  ($0.10)  ($0.09)  $0.30  $0.29  $0.70  $0.68  $0.27  $0.26  $0.22  $0.22  $0.22  $0.21  $0.21  $0.20  $0.20  $0.20 