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Cheba Hut “Toasted” Subs Trademark Acquisition and Royalty Dividend Increase Acquisition Facility Expansion June 18, 2025
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(TSX: DIV) Legal Disclaimer Notice The contents of this presentation are for information purposes only. This presentation does not constitute an offer to sell securities of DiversifiedR o y a l t yC o r p .( "DIV“o rt h e“Corporation”) or any other entity and it is not soliciting an offer to buy any such securities. This document may contain product names, trade names, trademarks and services marks of DIV and its affiliates and of other e ntities and organizations, all of which are the properties of their respective owners. All dollar amounts herein are expressed in C anadian dollars unless otherwise indicated. Forward Looking Information Certain statements contained in this presentation may constitute “forward-looking information" or “financial outlook” within the meaning of appl icable securities laws that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievem ents expressed or implied by such forward-looking information or financial outlook. The use of any of the words “anticipate”, “continue”, “estimate”, “expect”, “intend”, “may”, “will”, ”project”, “should”, “believe”, “confident”, “plan” and “intends” and similar expressions are intended to identify forward- looking information, although not all forward-looking information contains these identifying words. Specifically, forward-looking informatio n or financial outlook in this presentation includes, but is not limited to, statements made in relation to: Cheba Hut Franchising, Inc. (“ Cheba Hut”) has a strong pipeline of new locations; Cheba Hut’s 11 newly opened or plan ned to open locations in 2025; increasing exposure for DIV’s unique royalt y structure in the U.S. market; DIV management believes that Cheba Hut’s three multi-unit franchisees operating 37 locations across 7 states is a testament to Cheba Hut’s st rong store-level economics; Cheba Hut expects to open 11 new franchise locations in 2025 and 16-18 new locations per year in 2026 and 2027; uses of funds; DIV expects that Cheba Hut has no significant correlation with any of D IV’s existing royalty partners; DIV will be actively promoting the Transaction throughout the U.S. franchise community; DIV will have approximately $45 million of capacity on its acquisition facility at closing; the expected fi nancial impact of the indirect acquisition (the “ Acquisition”) by DIV through its subsidiary Cheeb Royalties Limited Partnership (“ Cheeb LP”) of the worldwide trademarks portfolio and certain other intellectual property rights utilized by Cheba Hut (the “ Cheba Rights”) and the immediate licence of the Cheba Rights back to Cheba Hut for a royalty payment (together with the Acquisition, the “ Transaction”) on DIV, including on its pro-forma adjusted revenue, pro-forma normalized EBITDA, pro-forma distributable cash and pro-forma distributable cash per share and the statement that DIV will increase its annual dividend. The forward-looking information and financial outlook contained herein involves known and unknown risks, uncertainties and other factors that may cause actual results or events, performance, or achievements of DIV to differ materially from those anticipated or implied therein. DIV believes that the expectations reflected in the forward-looking information and financial- outlook are reasonable, but no assurance can be given that these expectatio ns will prove to be correct. In particular there can be no assurance that: DI V will realize the expected benefits of the Transaction or that it will be accretive; the actual tax implications of theTransaction on DIV will be consistent with the tax implications expected by DIV; the Transaction will be successful; Cheba Hut will meet its business objectives, including its objectives with respect to the future growth; Cheba Hut will make the required royalty payments required under the licence and royalty agreement and otherwise complywith its obligations under the agreements governing the Transaction; Cheba Hut will not be adversely affected by the other risks facing its business; the foodservice market will grow at currently forecasted rates or that any such growth will correlate with the performance of Cheba Hut; DIV may not increase its dividend in accordance with the currently expected timing or amounts; DIV will be able to make monthly dividend payments to the holders of its common sh ares; or DIV will achieve any of its corporate objectives. Given these uncertainties, readers are cautioned that the forward-looking information and financial outlook included in this presentation are not guarantees of future performance, and such forward-looking information and financial outlook should not be unduly relied upon. More information about the risks and uncertainties affecting DIV’s business and the businesses of its royalty partn ers can be found in the “Risk Factors” section of its Annual Information Form dated March 24, 2025 and the “Risk Factors” section of its management’s discussion and analysis for the three months ended Marh 31, 2025 that are available und e rD I V ’ sp r o f i l eo nS E D A R +a twww.sedarplus.ca. In formulating the forward-looking information contained herein, management has assumed that, among other things, Cheba Hut will be successful in m eeting its stated corporate objectives, including its growth targets; DIV will realize the expected benefits of the Transaction; the Cheba Hut business will not suffer any material adverse effect; the actual tax implications of the Transaction and the payment of the Royalty on DIV will be consistent with the tax implications expected by DIV; and the business and economic conditions affecting DIV and Cheba Hut will continue substantially in the ordinary cours e, including without limitation with respect to general industry conditions, general levels of economic activity and regulations. These assumptions, although considered reasonable by management at the time of preparation, may prove to be incorrect. To the extent any forward-looking information in this presentation constitute a “financial outlook” within the meaning of applicable securities la ws, such information is being provided to assist investors in understanding the potential financial impact of the Transaction and the dividend increase on DIV. All of the forward-looking information and financial outlook disclosed in this presentation is qualified by these cautionary statements and other c autionary statements or factors contained herein, and there can be no assurance that the actual results or developments contemplated thereby will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, DIV contemplated by such forward-looking information and financial outlook contained herein. The forward-looking information and financial outlook included in this presentation is made as of the date of th is presentation and DIV assumes no obligation to publicly update or revise such information to reflect new events or circumstances, except as may be required by applicable law. Third Party Information This presentation includes market information, industry data and forecas ts obtained from independent industry publications, market research and analyst reports, surveys and other publicly available sources. Although DIV believes these sources to be generally reliable, such information cannot be verified with complete certainty. Accordingly, the accuracy and completeness of this information is not guaranteed. DIV has not independently verified any of the information from third party sources referred to in this presentation nor ascertained the underlying assumptions relied upon by such sources. 2
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(TSX: DIV) Non-IFRS Measures Management believes that disclosing certain non-IFRS financial measures , non-IFRS ratios and supplementary financial measures provides readers with important information regarding the DIV’s financial performance and its ability to pay dividends and the performance of its royalty partners and the financial impacts to DIV of the Transaction. By considering these measures in combination with the most closely comparable IFRS measure, management believes that investors are provided with additional and more useful information about DIV, its royalty partners and the Transaction than investors would hav e if they simply considered IFRS measures alone. The non-IFRS financial measures, non-IFRS ratios and supplementary financial measures used in this presentation do not have standardized meanings prescribed by IFRS and therefore a re unlikely to be comparable to similar measures presented by other issuers. Investors are cautioned that non-IFRS financial measures should not be construed as a substitute or an alternative to net income or cash flows from operating activities as determined in accordance with IFRS. The non-IFRS financial measures used in this presentation are EBITDA, normalized EBITDA, run-rate normalized EBITDA, pro-forma normalized EBITDA , distributable cash, run-rate distributable cash, pro-forma distributable cash, DIV royalty entitlement, DIV royalty entitlement, net of NND Royalties LP expen ses, adjusted revenue, run-rate adjusted revenue, pro-forma adjusted revenue and pro-forma dividends declared. For an explanation of the composition of DIV royalty entitlement, DIV royalty entitlement, net of NND Royalties LP e xpenses, adjusted revenue, EBITDA and normalized EBITDA, including reco nciliations to the most directly comparable IFRS measure, see DIV’s management discussion and analysis for the three months ended March 31, 2025, a copy of which is available under DIV’s profile on SEDAR+ atwww.sedarplus.ca, which is incorporated by reference herein. Run-rate normalized EBITDA is calculated as DIV’s normalized EBITDA for the three months ended December 31, 2024 and March 31, 2025, multiplied by two for purposes of annualizing such amount. Pro-forma normalized EBITDA is calculated as the run-rate normalized EBITDA plus the amount of the estimat ed initial adjusted revenue contribution from Cheba Hut less incremental operating expenses. See Appendix A for a reconciliation of run-rate normalized EBITDA and pro-forma adjusted normalized EBITDA to DIV’s net income, the closest comparable IFRS measure, for the three months ended December 31, 202 4 and March 31, 2025. DIV management believes run-rate normalized EBITDA is a useful supplemental measure as it provides investors with an indication of cash available for distribution prior to debt service needs, in terest expenditures and non-recurring items, as applicable, and pro-forma normalized EBITDA is a useful supplemental measure as it provides investors with an indication of cash available for distribution including the impact of the Transaction prior to debt service needs, interest expenditures and non-recurring items, as applicable. Run-rate adjusted revenue is calculated as the sum of DIV’s adjusted revenue for each of the three months ended December 31, 2024 and March 31, 2025, mul tiplied by two for purposes of annualizing such amounts, plus the amount of Mr. Lube’s roll-in of royalties from 5 net new locations on May 1, 2025. Pro-forma adjusted revenue is calculated as the run-rate adjusted rev enue plus the amount of the initial adjusted revenue contribution payable by Cheba Hut. See Appendix C for a reconciliation of run-rate adjusted revenue and pro-forma adjusted revenue to DIV’s revenue, the closest comparable IFRS measure, for the three months ended December 31, 2024 and March 31, 2025. DIV management believes run-rate adjusted revenue provides useful information as it provides supplemental information regarding DIV’s consolidated revenues, and pro-forma adjusted revenue provides useful information as it provides supplemental information regarding DIV’s consolidated revenues after giving effect to the Transaction. Run-rate distributable cash is calculated as the sum of DIV’s distributable cash for each of the three months ended December 31, 2024 and March 31, 2025 , multiplied by two for purposes of annualizing such amount, plus the after- tax amount of Mr. Lube’s roll-in of royalties from 5 net new store locations on May 1, 2025, less adjustments for interest income and current tax. Pro-fo rma distributable cash is calculated as is calculated as run-rate distributable cash plus the amount of the estimated initial adjusted revenue contribution payable by Cheba Hut less incremental operating expenses, interest expenses and taxes. See Appendix B for a reconciliation of run-rate distributable cash and pro-forma distributable cash to DIV’s net income, the closest comparable IFRS measure, for the three months ended December 31, 2024 and March 31, 2025 . DIV management believes run-rate distributable cash provides useful information as it provides supplemental information regarding DIV’s ability to generate cash available for payment of dividends after adjusting for non-recurring expenses and pro-forma distributable cash provides useful information as it provides supplemental information regarding DIV’s ability to generate cash available for payment of dividends after giving effect to the Transaction. Pro-forma dividends declared is calculated as DIV’s new annualized dividend of $0.275 per share multiplied by the number of DIV common shares issued a nd outstanding as of March 31, 2025. Pro-forma dividends declared is used to calculate the pro-forma payout ratio, and thus management believes that it provides useful information as to DIV’s expected future aggregate annualized dividend payments. The non-IFRS ratios used in this presentation are pro-forma payout ratio, run-rate payout ratio, pro-forma distributable cash per share and run-rat e distributable cash per share. Pro-forma payout ratio is calculated as pro-forma dividends declared divided by pro-forma distributable cash. Run-rate payout ratio is calculated by dividing the dividends per share during the peri od by the run-rate distributable cash per share generated in that period. Pro-forma distributable cash per share is calculated by dividing the pro-forma distributable cash by the number of DIV common shares issued and outstanding as o f March 31, 2025. Run-rate distributable cash per share is calculated by dividing the run-rate distributable cash by the number of DIV common shares issued and outstanding as of March 31, 2025. See Appendix B for further deta ils as to how pro-forma payout ratio, run-rate payout ratio, pro-forma distributable cash per share and run-rate distributable cash per share are calculated. DIV management believes that (i) the pro-forma payout ratio provides useful information as it provides supplemental information regarding DIV’s ability to generate cash to pay dividends following the completion of the Transaction and the increase to the dividend, (ii) run-rate payout ratio pro vides supplemental information regarding the extent to which DIV distributes cash as dividends after adjusting for non-recurring expenses, (iii) run-rate distributable cash per share provides supplemental information regardin g DIV’s ability, on a per-share basis, to generate cash available for payment of dividends after adjusting for non-recurring expenses and (iv) pro-forma distributa ble cash per share provides supplemental information regarding DIV’s abi lity, on a per-share basis, to generate cash available for payment of dividends after giving effect to the Transaction. System sales is a supplementary financial measure and is a reference to the top-line sales revenue reported to Cheba Hut by all Cheba Hut franchisees. D IV’s management believes system sales is a useful measure as it provides investors with an indication of performance of the franchisees underlying Cheba Hut’s business. Run-rate system sales is a supplementary financial measure and is the system sales for the Cheba Hut locations that were in operation during period of the three months ended March 31, 2025 multiplied by four for purposes of annualizing such amount. Same store sales growth or SSSG is a supplementary financial measure and is a reference to the percentage increase in system sales over the prior compar able period for Cheba Hut locations that were in operation in both the current and prior periods, excluding stores that were permanently closed. DIV’s management believes that SSSG is a useful measure as it provides inve stors with an indication of the change in year-over-year sales of Cheba Hut locations. Royalty acquisition multiple is a supplementary financial measure and is calculated as the purchase price for the royalty (prior to any potential post-closing adjustments) divided by the annual royalty payment. 3
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(TSX: DIV) Executive Summary Cheba Hut, founded in 1998, is a 77-location fast casual toasted submarine sandwich franchise, with ~US$174M of run-rate system sales1 Cheba Hut is an excellent royalty partner for DIV: Proven business model: operating in 19 states, with strong historical growth, 11 newly opened or planned to open locations in 2025, plus strong pipeline of new locations Strong unit economics: excellent franchisee profitability, strong SSSG, low churn Second U.S. royalty transaction: increasing exposur e for DIV’s unique franchisor royalty structure in the U.S. market 4 DetailsItem US$36M - 9.0x royalty acquisition multiple2 on $4M 1st year royaltyPurchase Price US$4M initial royalty – growing annually4Annual Royalty US$10M (US$5M at DIV and US$5M at new LP subsidiary, Cheeb LP) New term debt Approximately US$18M (no contractual amortization for 12 months – expect to pay down over 12 months with free cashflow and royalty partner debt refinancings) Acquisition Facility Line Drawdown Approximately US$8.5M cash on handRemainder of purchase price (and transaction expense) Distributable cash per share 3 increases from $0.2714 to $0.2897 (6.8%)Accretion 1) Run-rate system sales is a supplementary financial measure. See “Non-IFRS Measures”. 2) Royalty acquisition multiple is a supplementary financial measure. See “Non-IFRS Measures”. 3) Distributable cash per share is a no n-IFRS ratio. See “Non-IFRS Measures”. 4) At a rate equal to the greater of 3.5% and the U.S. CPI + 1.5% per year
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(TSX: DIV) Cheba Hut – Store Level Economics The cost to build out a new Cheba Hut location, including initial franchise fee, is ~US$850,000 Cheba Hut’s average location generates revenue of ~US$2.4 million with an estimated 10% to 12% store level EBITDA 1 margin (~US$275,000), resulting in a ~3- year payback Cheba Hut has three multi-unit franchisees operating 37 locations across 7 states in t h eU . S .–D I Vm a n a g e m e n tb e l i e v e st h i si sat e s t a m e n tt oC h e b aH u t ’ ss t r o n gs t o r e - level economics Overall, Cheba Hut’s store level economics are superior 5 1) EBITDA is a non-IFRS financial measure. See “Non-IFRS Measures”.
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(TSX: DIV) SSSG Cheba Hut’s SSSG1 has been positive each of the past three fiscal years and its Q1 2025 SSSG1 was 4.1% SSSG over this period was a combination of increased foot traffic and menu price increases 6 0% 5% 10% 15% 20% SSSG% 13.2% 18.2% 5.0% 4.1% SSSG % Q1 2025 2024 2023 2022 1) SSSG is a supplementary financial measure. See “Non-IFRS Measures”.
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(TSX: DIV) System Sales Growth Cheba Hut’s system sales 1 have grown from ~US$65 million in 2021 to ~US$149 million in 2024, representing a 32% CAGR: 7 $0 $20 $40 $60 $80 $100 $120 $140 $160 2021 2022 2023 2024 Millions System Sales 1) System sales is a supplementary financial measure. See “Non-IFRS Measures”.
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(TSX: DIV) New Units Pipeline Cheba Hut currently has 8 locations under construction, 20 franchisees are actively searching for real estate, and 53 franchise agreements have been signed Cheba Hut expects to open 11 new franchise locations in 2025 and 16-18 new locations per year in 2026 and 2027 8 Locations Opened 77 Franchise Agreement Signed 53 Real Estate Search 20 In Construction 8 Cheba Hut Locations and Pipeline
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(TSX: DIV) Cheba Hut – Menu Cheba Hut showcases over 30 signature sub sandwiches highlighting the harmony between great tasting food and … well, a very specific counter-culture 1 1 For clarity, no THC products are sold at any Cheba Hut location 9
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(TSX: DIV) Cheba Hut – Competitive Advantage Cheba Hut management believes its competitive advantage is based on an overall business model focused on quality and authenticity: Unique cannabis-themed concept (unique in the space) Laid-back sandwich-shop chain that is family-friendly and known for niche, very tasty toasted subs, plus snacks & desserts Every location has a local identity with custom artwork unique to the market Fun and relaxed atmosphere with focus on authenticity Unique sub flavours – proprietary homemade recipes High-quality ingredients Most stores are in suburban markets 10
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(TSX: DIV) Cheba Hut – Management Scott Jennings – Founder Opened the first Cheba Hut location in 1998 in Tempe, Arizona Marc Torres – Chief Executive Officer From 2014 to 2020, Marc was the Chief Operating Officer, overseeing the operations at Cheba Hut and from 2005 to 2014, was store manager and franchise consultant Jimmy Wedding – Chief Financial Officer Prior to Cheba Hut, Jimmy was VP, Senior Middle Market Relationship Manager at Umpqua Bank and prior to that held a VP position at FirstBank Seth Larson – Chief Relationship Officer Has been working at Cheba Hut since 2005 All members of Cheba Hut’s senior management team are shareholders 11
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(TSX: DIV) Royalty Transaction DIV is purchasing a US$4 million (C$5.6 million) royalty from Cheba Hut at a 9x royalty acquisition multiple 1 for an initial purchase price of US$36 million (C$50.4 million) The following table outlines the approximate sources and uses of funds to finance the acquisition: * USD/CAD FX rate assumption of 1.4x 12 C$*US$Uses ‘000C$*US$Sources ‘000 C$50,400US$36,000Acquisition of trademarksC$25,200US$18,000Acquisition Facility C$700US$500Transaction expensesC$14,000US$10,000Credit Facility at Cheeb LP and DIV C$11,900US$8,500Cash on hand C$51,100US$36,500Total UsesC$51,100US$36,500Total Sources 1) Royalty acquisition multiple is a supplementary financial measure. See “Non-IFRS Measures”.
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(TSX: DIV) Impact to DIV 13 Pro FormaCurrent Run Rate $76.9M Adjusted Revenue1 $71.3M Adjusted Revenue1 $72.4M Normalized EBITDA1 $66.8M Normalized EBITDA1 $48.6M Distributable Cash1 $45.5M Distributable Cash1 $0.2897 Distributable Cash Per Share1 $0.2714 Distributable Cash Per Share1 1) Run-rate adjusted revenue, pro-forma adjusted revenue, run-rate normalized EBITDA, pro-forma normalized EBITDA, run-rate distributable cash and pro-forma distributable cash are non-IFRS financial measures and run-rate distributable cash per share and pro-forma distributable cash per share are non-IFRS ratios. See “Non-IFRS Measures”.
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(TSX: DIV) 14 Pro Forma Adjusted Portfolio Revenue %1 4% 7% 5% 12% 7% 11% 43% 6% 5% 1) The percentages of adjusted revenues as presented are based on pro-forma adjusted revenue. Pro-forma adjusted revenue is a non-IFRS financial measure. See “Non-IFRS Measures”.
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(TSX: DIV) Summary History of Success. Cheba Hut, founded in 1998, is a high-quality franchisor with 77 locations across 19 US states Pure Franchisor: 75 of 77 Cheba Hut locations are franchise locations Strong Store Level Economics: Cheba Hut’s average location sales of ~US$2.4 million – store level EBITDA2 of ~$275,000 – strong track record of positive SSSG Strong Pipeline: Cheba Hut expects to open 11 locations in 2025 and 16 to 18 locations each year thereafter Experienced Management Team: Cheba Hut has an experienced and motivated management team Royalty Structure: 9x royalty acquisition multiple 1 – royalty structured with a hedge to inflation (U.S. CPI + 150 bps) – floor of 3.5% annual royalty increase Diversification: Cheba Hut, with locations across the U.S., is expected to have no correlation with DIV’s other royalty partners US Royalty Partner #2: Cheba Hut represents DIV’s second U.S. royalty transaction – DIV will be actively promoting this transaction throughout the U.S. franchise community Cheba Hut is an excellent royalty partner for DIV – it is a profitable, well-run franchisor with a proven business model and attractive growth prospects 15 1) Royalty acquisition multiple is a supplementa ry financial measure. See “Non-IFRS Measures”. 2) EBITDA is a non-IFRS financial measure. See “Non-IFRS Measures”.
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(TSX: DIV) Dividend Increase – Acquisition Facility Expansion DIV’s strong balance sheet (cash on hand, under-levered existing royalty LP’s, undrawn acquisition facility) will enable it to fully fund the Cheba Hut trademark acquisition without the need to raise equity This is a game-changer for DIV as all pr ior trademark acquisitions have been funded concurrently, or shortly after, with an equity raise DIV expects to generate cash flow from its below 100% pro forma payout ratio1 and DIV’s dividend reinvestment plan (DRIP) program to pay down the acquisition facility in full The board of directors of DIV have approved a 10% increase in the annual dividend from $0.25 per share to $0.275 per share, effective July 2025 Furthermore, DIV’s acquisition facility has been increased from $50 million to $70 million At closing, DIV will have approximately $45 million of capacity on its acquisition facility 16 1) Pro-forma payout ratio is a non-IF RS ratio. See “Non-IFRS Measures”.
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(TSX: DIV) Appendix A 17 The following table reconciles net income for the three months ended December 31, 2024 and March 31, 2025 to normalized EBITDA, pro‐forma normalized EBITDA and run‐rate normalized EBITDA: AB = ( A +B) x 2 (Cdn$000's) Q4 2024 Q1 2025 Annualized Revenues 17,032 15,639 65,342 Operating expenses (10,025) (1,408) (22,866) Finance and other costs (1,339) (3,241) (9,160) Income before income taxes 5,668 10,990 33,316 Income tax expense (1,653) (2,997) (9,300) Net income 4,015 7,993 24,016 Interest expense on credit facilities 3,368 3,150 13,036 Income tax expense 1,653 2,997 9,300 Depreciation expense 25 24 98 EBITDA (1) 9,061 14,164 46,450 Adjustments: Share‐based compensation 645 368 2,026 Impairment (reversal) loss 8,204 ‐ 16,408 Other finance costs, net (2,044) 995 (2,098) Fair value adjustment on financial instruments 15 (904) (1,778) Payment of lease obligations (28) (28) (112) DIV Royalty Entitlement, net of NND Royalties LP expenses(1) 1,314 1,325 5,278 Normalized EBITDA(1) 17,167 15,920 66,174 Mr. Lube roll‐in ‐ May 1, 2025(3) 668 Run‐Rate Normalized EBITDA(1) 66,842 Cheba Hut Normalized EBITDA contribution (2) 5,550 Pro‐Forma Normalized EBITDA(1) 72,392 1) EBITDA, Normalized EBITDA, as well as the run‐rate and pro‐forma representations thereof and DIV Royalty Entitlement, net of NND Royalty LP expenses are non‐IFRS measures. See "Non‐IFRS Measures" 2) The Cheeba Hut Normalized EBITDA contribution is calculated as the initial adjusted revenue contribution of USD$4,000,000 payable by Cheba Hut, multiplied by a USD to CAD exchange rate of $1.4:1, less incremental operating expenses of $50,000 3) Adjustment for Mr. Lube’s roll‐in of royalties from 5 net new store locations on May 1, 2025, assuming incremental annual net system sales (system sales is a non‐IFRS supplementary measure and as such, does not have a standardized meaning under IFRS ‐ see the disclosure under the heading “Description of Non‐IFRS Financial Me asure s, Non‐IFRS Ratios and Supplementary Financial Measures” in DIV’s management discussion and analysis for the three months and year ended December 31, 2024 and three months ended March 31, 2025) of $8.4 million, multiplied by 7.95% royalty rate
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(TSX: DIV) Appendix B 18 The following table reconciles net income for the three months ended December 31, 2024 and March 31, 2025 to run‐rate distributable cash and pro‐forma distributable cash and illustrates the calculation of run‐rate distributable cash per share, pro‐forma distributable cash per share, run‐rate payout ratio and pro‐forma payout ratio: AB = ( A +B) x 2 (Cdn$000's) Q4 2024 Q1 2025 Annualized Net income 4,015 7,993 24,016 Interest expense on credit facilities 3,368 3,150 13,036 Income tax expense 1,653 2,997 9,300 Depreciation expense 25 24 98 EBITDA (1) 9,061 14,164 46,450 Adjustments: Share‐based compensation 645 368 2,026 Impairment (reversal) loss 8,204 ‐ 16,408 Other finance costs, net (2,044) 995 (2,098) Fair value adjustment on financial instruments 15 (904) (1,778) Payment of lease obligations (28) (28) (112) DIV Royalty Entitlement, net of NND Royalties LP expenses(1) 1,314 1,325 5,278 Normalized EBITDA(1) 17,167 15,920 66,174 Add: interest income 139 135 548 Less: Distributions on echangeable MRM units (34) (48) (164) Less: current tax expense (1,301) (1,719) (6,040) Less: interest expense on credit facilities (3,368) (3,150) (13,036) Distributable cash(1) 12,603 11,138 47,482 Adjustments: Mr. Lube roll‐in ‐ May 1, 2025, net of taxes(2) 487 Interest income adjustment (493) Run‐rate current tax adjustment (2,000) Run‐Rate Distributable Cash(1) 45,476 Cheba Hut Distributable Cash Contribution (3) 3,075 Pro‐Forma Distributable Cash(1) 48,551 Dividends declared (4) 41,892 Run‐rate payout ratio(1) 92.1% Run‐rate distributable cash per share(1)(6) 0.2714$ Pro forma Dividends Declared (1), (5) 46,081 Pro‐forma payout ratio(1) 94.9% Pro‐forma distributable cash per share(1)(7) 0.2897$ 1) EBITDA, Normalized EBITDA, run‐rate distributable cash, pro‐forma distributable cash and pro‐forma dividends declared are non‐IFRS measures. Run‐rate payout ratio, pro‐forma payout ratio, run‐rate distributable cash per share and pro‐forma distributable cash per share are non‐IFRS ratios. See “Non‐IFRS Me asures" 2) Adjustment for Mr. Lube’s roll‐in of royalties from 5 net new store locations on May 1, 2025, assuming incremental annual net system sales (system sales is a non‐IFRS supplementary measure and as such, does not have a standardized meaning under IFRS ‐ see the disclosure under the heading “Description of Non‐IFRS Financial Me asure s, Non‐IFRS Ratios and Supplementary Financial Measures” in DIV’s management discussion and analysis for the three months and year ended December 31, 2024 and three months ended March 31, 2025) of $8.4 million, multiplied by 7.95% royalty rate, less marginal income taxes assumed at 27% 3) Cheba Hut contribution is calculated as the initial adjusted revenue contribution of USD$4,000,000, multiplied by USD to CAD exchange rate of $1.4:1, less incremental operating expenses of $50,000, interest expense of $1,890,000 and taxes of $586 4) Current dividend policy of $0.25 per share multiplied by the number of DIV common shares issued and outstanding as at March 31, 2025 5) Future dividend policy of $0.275 per share multiplied by the number of DIV common shares issued and outstanding as at March 31, 2025 6) Run‐rate distributable cash divided by the number of DIV common shares issued and outstanding as at March 31, 2025 7) Pro‐forma distributable cash divided by the number of DIV common shares issued and outstanding as at March 31, 2025
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(TSX: DIV) Appendix C 19 The following table reconciles Revenue for the three months ended December 31, 2024 and March 31, 2025 to adjusted revenue, run‐rate adjusted revenue and pro‐forma adjusted revenue: (a) (b) =(a+b) x 2 (Cdn$000's) Q4 2024 Q1 2025 Annualized Revenue 17,032 15,639 65,342 DIV Royalty Entitlement(1) 1,320 1,329 5,298 Adjusted revenue(1) 18,352 16,968 70,640 Adjustment: Mr. Lube roll‐in ‐ May 1, 2025(2) 668 Run‐rate Adjusted Revenue(1) 71,308 Cheba Hut contribution(3) 5,600 Pro‐Forma Adjusted Revenue(1) 76,908 1) DIV Royalty Entitlement, adjusted revenue, run‐rate adjusted revenue and pro‐forma adjusted revenue are non‐IFRS measures. See “Non‐IFRS Me asure s" 2) Adjustment for Mr. Lube’s roll‐in of royalties from 5 net new store locations on May 1, 2025, assuming incremental annual net system sales (system sales is a non‐IFRS supplementary measure and as such, does not have a standardized meaning under IFRS ‐ see the disclosure under the heading “Description of Non‐IFRS Financial Me asure s, Non‐IFRS Ratios and Supplementary Financial Measures” in DIV’s management discussion and analysis for the three months and year ended December 31, 2024 and three months ended March 31, 2025) of $8.4 million, multiplied by 7.95% royalty rate 3) Cheba Hut contribution is calculated as the initial adjusted revenue contribution of USD$4,000,000 payable by Cheba Hut, multiplied by a USD to CAD exchange rate of $1.4:1