Management Discussion & Analysis SUMMARY OF QUARTERLY RESULTS  OUTSTANDING SHARES  OUTLOOK  64  2011 Annual Report  Alaris Royalty Corp. In the year ended December 31, 2011, the Corporation issued: 2,464,800 shares by way of short form  prospectus; 531,850 shares as a result of the exercise of warrants; 10,375 shares as a result of the exercise of  options; 10,331 shares under the Restricted Share Unit (“RSU”) Plan; and 31,250 shares that vested to  Directors under the RSU Plan. During the year ended December 31, 2011, at the Annual General Meeting,  shareholders approved conversion of 666,665 non-voting shares to voting shares. The Corporation has  authorized, issued and outstanding, 19,475,210 voting common shares as at December 31, 2011. At December 31, 2011, the Corporation had authorized, issued and outstanding, 19,475,210 voting  common shares. All periods reflect the implementation of IFRS. Q4-2011 includes a recovery of deferred income taxes of  $2.3 million. Q2-2011 includes the significant gains from the LifeMark Transaction. The net income for  the three months ended December 31, 2010 was lower than the previous quarter due to a $0.4 million  future income tax expense recorded in the period. Amounts are in thousands except for income (loss) per unit/share:  The warrants were exercisable at $7.50 at any time up to twenty-four (24) months from the date of their  issue (October 22, 2009), subject to a mandatory exercise if, at the Corporation’s option, any time after  twelve (12) months from their issue, if the volume weighted average price of the voting common shares on  the Toronto Stock Exchange is above $9.00 per common share for twenty (20) consecutive trading days.  The warrants expired in October 2011.  At December 31, 2011, 384,400 restricted share units and 929,775 stock options were outstanding under  the Corporation’s long-term incentive compensation plans. The weighted average exercise price of the  outstanding options is $12.96.  Subsequent to December 31, 2011, the Corporation issued 1,533 shares to satisfy the dividend requirement  under the RSU Plan. At March 15, 2012, the Corporation had 19,476,743 common shares outstanding.  Alaris’ agreements with the Partners provide for payments estimated to provide the Corporation  approximately $27.8 million of revenues for 2012. For the first quarter of 2012, those same agreements call  for revenues of approximately $6.9 million for the Corporation. Annual general and administrative  expenses are currently estimated at $3.2 million annually and include all public company costs. The senior  debt facility is drawn to $6.5 million (reduced to $4.5 million subsequent to year end) and the annual  interest rate on that debt was approximately 6.0% at December 31, 2011. Cash requirements after net  Q4-11  Q3-11  Q2-11  Q1-11  Q4-10  Q3-10  Q2-10  Q1-10  Revenue 5,815 4,842 32,957 5,635 4,403 4,165 3,897 4,194 Income from  operations  6,369 2,721 22,710 2,925 2,100 2,808 2,478 2,599 Basic and Diluted  Income (loss) per  Share/Unit  $0.36  $0.35  $0.16  $0.16  $1.34  $1.30  $0.17  $0.17  $0.15  $0.14  $0.20  $0.20  $0.20  $0.19  $0.22  $0.21 