(a)Initial application of standards, interpretations and amendments to standards and interpretations in the reporting period

(b)Standards, interpretations and amendments to standards and interpretations not yet effective and not yet applied

Although much of the substance of IAS 1, Presentation of Financial Statements, will carry over into the new standard:

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The new standard is effective for annual reporting periods beginning on or after January 1, 2027, with earlier adoption permitted. We are continuing to assess the impacts of the new standard and, other than as set out above, do not expect the totality of our financial disclosure to be materially affected by the application of the new standard.

Statement of income and other comprehensive income presentation Of most significance, relative to our historical practice, IFRS 18, Presentation and Disclosure in Financial Statements, will newly define what income and expenses are to be classified in the operating and financing categories of, and will newly introduce an investing category to, our statement of income and other comprehensive income.

The income and expenses arising from investments in associates and joint ventures accounted for applying the equity method will be classified in the newly introduced investing category of the statement of income and other comprehensive income. Relative to our historical practice (see Note 7), the possible effect of applying the new standard for primary financial statement purposes will be reclassifying equal and offsetting amounts between operating income* and investing income; such possible effect is not currently expected to be material.

Irrespective of an entity’s capital structure financial policies’ approach to cash management, the new standard prescribes that an entity such as ourselves classify any income generated from cash and cash equivalents as investing income. We manage our financing expense on a net basis by offsetting income on cash and cash equivalents against such expense and thus, historically, have not separately recognized such income as a revenue. Relative to our historical practice (see Note 9), the possible effect of applying the new standard for primary financial statement purposes will be to increase the investing income and financing expense* by equal and offsetting amounts; such possible effect is not currently expected to be material.

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The new standard requires that the income and expenses from other assets, such as investment properties (as defined by IFRS Accounting Standards), which do not comprise a specified main business activity and which generate a return individually and largely independently of our other resources, be classified in the newly introduced investing category of our statement of income and other comprehensive income. Relative to our historical practice, the possible effect of applying the new standard for primary financial statement purposes will be reclassifying equal and offsetting amounts between operating income* and investing income; such possible effect is not currently expected to be material.

Foreign exchange differences arise due to fluctuations in foreign exchange rates between the time of a foreign currency-denominated transaction and its settlement. We manage such differences as a part of our financing management. As such, we establish hedging relationships and apply hedge accounting for a significant portion of our U.S. dollar-denominated transactions. However, it is not practicable to establish hedging relationships and apply hedge accounting for all foreign currency-denominated transactions. In our instance, primarily in respect of unhedged foreign exchange exposures (or not accounted for as a foreign currency translation adjustments arising from translating financial statements of foreign operations), the new standard prescribes that the default classification for foreign exchange differences is to be operating activities, irrespective of an entity’s financing management. Relative to our historical practice (see Note 9), the possible effect of applying the new standard for primary financial statement purposes will be reclassifying any such equal and offsetting default foreign exchange differences between Goods and services purchased within operating activities* and financing expense*; such possible effect is not currently expected to be material.

Management-defined performance measures

IFRS 18, Presentation and Disclosure in Financial Statements will require financial statement disclosure of management-defined performance measures (which the new standard restricts to subtotals of income and expense and, among other requirements, which are used in public communications outside of the financial statements) and their reconciliation to the most directly comparable listed or required IFRS Accounting Standard totals or subtotals. Management-defined performance measures present management’s view of only limited aspects of management-defined financial performance as a whole*** and are not necessarily comparable with measures sharing similar labels or descriptions provided by other entities.

Judgment is required in identifying which of our measures may be management-defined performance measures. Due consideration must be given to the view that differing opinions may reasonably exist regarding what constitutes a performance measure and/or a management-defined performance measure, particularly so when a measure is multi-faceted and serves multiple purposes. On a continuing basis, as we continue to develop and evolve our business, we review and evolve our measures, including total of reportable segments measures and capital management measures, to identify those which may have become possible management-defined performance measures, and we review our possible management-defined performance measures to assess whether they may have ceased to be such.

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Our management-defined performance measures possibly include, among others, adjusted net income attributable to Common Shares (the numerator of adjusted net income per basic share). Adjusted net income excludes the effects of (if, and as, applicable):

Adjusted net income attributable to Common Shares is a measure used to evaluate performance at a consolidated level and excludes items that, in management’s view, may obscure underlying trends in business performance or are atypical items that do not reflect our ongoing operations. It should not be considered an alternative to Net income (loss) in measuring our performance.

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