9 9 6 • Impairment charges and reversals related to royalty, stream and working interests; • Impairment of investments; • Gains/losses on sale of royalty, stream and working interests; • Gains/losses on investments; • Foreign exchange gains/losses and other income/expenses; and • Unusual non-recurring items. Management uses Adjusted EBITDA and Adju sted EBITDA per share to evaluate the underlying operating performance of Franco-N evada as a whole for the reporting periods presented, to assist with the planning and forecasting of future operating results, and to supplement information in its financial statements. Management believes that in addition to measures prepared in accordance with IFRS such as Net Income and EPS, our investors and analysts use Adjusted EBITDA and Adjusted EBITDA per share to evaluate the results of the underlying business of Franco-Nevada, particularly since the excluded items are typically not included in our guidance, with the exception of depletion and depreciation expense. While the adjustments to net income and EPS in these measures include items that are both recurring and non-recurring, management believes that Adjusted EBITDA and Adjusted EBITDA per share are useful measures of Franco- Nevada’s performance because they adjust for items which may not relate to or have a disproportionate effect on the period in which they are recognized, impact the comparability of our core operat ing results from period to peri od, are not always reflective of the underlying operating performance of our business and/or are not necessarily indicative of future operating results. Adjusted EBITDA and Adjusted EBITDA per share are only intended to provide additional information to investors and analysts and should not be considered in isolation or as a subs titute for measures of performance prepared in accordance with IFRS. They do not have any standardized meaning under IFRS and may not be comparable to similar measures presented by other issuers. Reconciliation of Net Income to Adjusted EBITDA For the three For the year months ended ended December 31, December 31, (expressed in millions, except per share amounts) 2021 2020 2021 2020 Net income $ 220.9 $ 176.7 $ 733.7 $ 326.2 Income tax expense 44.7 21.5 124.1 13.3 Finance expenses 0.9 0.8 3.6 3.5 Finance income (0.7) (0.7) (3.7) (3.7) Depletion and depreciation 78.2 67.5 299.6 241.0 Impairment (reversals) and charges (75.5) (9.6) (68.0) 262.1 Foreign exchange loss (gain) and other (income) expenses 1.3 (2.5) 3.0 (2.8) Impairment (reversals) and charges $ 269.8 $ 253.7 $ 1,092.3 $ 839.6 Foreign exchange loss (gain) and other (income) expenses 191.2 190.9 191.1 190.3 Basic earnings per share $ 1.16 $ 0.93 $ 3.84 $ 1.71 Income tax expense 0.22 0.11 0.65 0.07 Finance expenses Nil Nil 0.02 0.01 Finance income Nil Nil (0.02) (0.02) Depletion and depreciation 0.41 0.35 1.57 1.27 Impairment charges (0.39) (0.05) (0.36) 1.38 Foreign exchange loss (gain) and other (income) expenses 0.01 (0.01) 0.02 (0.01) Adjusted EBITDA per share $ 1.41 $ 1.33 $ 5.72 $ 4.41