TORONTO, July 29,
2022 /CNW/ - George Weston Limited (TSX: WN) ("GWL"
or the "Company") today announced its consolidated unaudited
results for the 12 weeks ended June 18,
2022(2).
GWL's 2022 Second Quarter Report has been filed on SEDAR
and is available at sedar.com and in the Investor Centre section of
the Company's website at weston.ca.
"Loblaw and Choice Properties delivered strong and consistent
operating results during the second quarter and are well-positioned
in the current economic environment," said Galen G. Weston, Chairman and CEO, George Weston
Limited. "George Weston's strong and
stable market-leading businesses continue to drive long-term value
as they execute against their strategic agendas."
Loblaw Companies Limited ("Loblaw") delivered strong operational
and financial results as it continued to execute on retail
excellence in its core businesses, while advancing its growth and
efficiencies initiatives. Loblaw's drug retail performance
continued to drive overall margin expansion, as sales benefited
from growth in higher margin front store categories. Loblaw's
positive trend in food retail continued with its conventional
stores performing well relative to peers and sales growth in its
discount banners, heightened by the strength of No
Frills® and Maxi® hard-discount stores and
Loblaw's value focused control brand no name®. In the
quarter, Loblaw continued to pursue its strategic growth agenda by
completing the acquisition of Lifemark Health Group ("Lifemark")
and announcing PC Express Rapid Delivery, furthering
Loblaw's purpose to help Canadians Live Life Well.
Choice Properties Real Estate Investment Trust ("Choice
Properties") delivered solid operating results in the second
quarter with improved occupancy across its portfolio and
advancements in its development initiatives. With a focus on its
long-term strategy, Choice Properties continued to execute on its
mixed-use and industrial development projects and completed seven
property transactions totaling $228
million. Subsequent to the end of the second quarter of
2022, Choice Properties successfully issued $500 million of 10-year term unsecured debentures
and redeemed $300 million of
debentures coming due, reinforcing its strong and flexible capital
structure.
2022 SECOND QUARTER HIGHLIGHTS
George Weston Limited's net earnings available to common
shareholders of the Company from continuing operations were
$640 million in the second quarter of 2022, an increase of
$525 million compared to the second
quarter of 2021. The increase was due to the favourable
year-over-year net impact of adjusting items totaling
$472 million and an improvement in the Company's consolidated
underlying operating performance of $53 million. Diluted net
earnings per common share from continuing operations were
$4.36, an increase of $3.62 per common share when compared to the
second quarter of 2021.
Adjusted net earnings available to common shareholders of the
Company(1) from continuing operations were
$328 million in the second quarter of 2022, an increase of
$53 million, or 19.3%, compared to the second quarter of 2021.
The increase was primarily due to the improvement in the underlying
operating performance of Loblaw and lower adjusted net interest
expense and other financing charges(1), partially offset
by an increase in the adjusted effective tax
rate(1).
Adjusted diluted net earnings per common share(1)
from continuing operations were $2.23
in the second quarter of 2022, an increase of $0.43 per common share, or 23.9%, compared to the
second quarter of 2021. The increase was due to the improvement in
adjusted net earnings available to common shareholders of the
Company(1) from continuing operations and the favourable
impact of share repurchases.
CONSOLIDATED RESULTS OF OPERATIONS
The Company's results reflect the year-over-year impact of the
fair value adjustment of the Trust Unit liability as a result of
the significant changes in Choice Properties' unit price, recorded
in net interest expense and other financing charges. The Company's
results are impacted by market price fluctuations of Choice
Properties' Trust Units on the basis that the Trust Units held by
unitholders, other than the Company, are redeemable for cash at the
option of the holder and are presented as a liability on the
Company's consolidated balance sheet. The Company's financial
results are positively impacted when the Trust Unit price declines
and negatively impacted when the Trust Unit price increases.
In 2021, the Company sold its entire Weston Foods bakery
business. The Company's interest in Weston Foods is presented
separately as discontinued operations in the Company's results.
Unless otherwise indicated, all financial information represents
the Company's results from continuing operations.
(unaudited)
($ millions except
where otherwise
indicated)
For the periods ended
as indicated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
|
|
|
|
24 Weeks
Ended
|
|
|
|
|
|
Jun. 18,
2022
|
Jun. 19,
2021(3)
|
$ Change
|
|
% Change
|
|
Jun. 18,
2022
|
Jun. 19,
2021(3)
|
$ Change
|
|
% Change
|
|
Revenue
|
$
|
12,979
|
|
$
12,637
|
$
342
|
|
2.7 %
|
|
$
|
25,386
|
|
$
24,654
|
$
732
|
|
3.0 %
|
|
Operating
income
|
$
|
649
|
|
$
1,065
|
$
(416)
|
|
(39.1) %
|
|
$
|
1,815
|
|
$
1,893
|
$
(78)
|
|
(4.1) %
|
|
Adjusted
EBITDA(1)
|
$
|
1,588
|
|
$
1,462
|
$
126
|
|
8.6 %
|
|
$
|
3,010
|
|
$
2,762
|
$
248
|
|
9.0 %
|
|
Adjusted EBITDA
margin(1)
|
|
12.2 %
|
|
11.6 %
|
|
|
|
|
|
11.9 %
|
|
11.2 %
|
|
|
|
|
Net earnings
attributable to
shareholders of the
Company from continuing
operations
|
$
|
650
|
|
$
125
|
$
525
|
|
420.0 %
|
|
$
|
1,023
|
|
$
73
|
$
950
|
|
1,301.4 %
|
|
Net earnings (loss)
available to
common shareholders
of the Company
|
$
|
634
|
|
$
108
|
$
526
|
|
487.0 %
|
|
$
|
997
|
|
$
46
|
$
951
|
|
2,067.4 %
|
|
Continuing
operations
|
$
|
640
|
|
$
115
|
$
525
|
|
456.5 %
|
|
$
|
1,003
|
|
$
53
|
$
950
|
|
1,792.5 %
|
|
Discontinued
operations
|
$
|
(6)
|
|
$
(7)
|
$
1
|
|
14.3 %
|
|
$
|
(6)
|
|
$
(7)
|
$
1
|
|
14.3 %
|
|
Adjusted net earnings
available
to common shareholders
of the Company(1) from
continuing operations
|
$
|
328
|
|
$
275
|
$
53
|
|
19.3 %
|
|
$
|
610
|
|
$
520
|
$
90
|
|
17.3 %
|
|
Diluted net earnings
(loss) per
common share ($)
|
$
|
4.32
|
|
$
0.70
|
$
3.62
|
|
517.1 %
|
|
$
|
6.77
|
|
$
0.28
|
$
6.49
|
|
2,317.9 %
|
|
Continuing
operations
|
$
|
4.36
|
|
$
0.74
|
$
3.62
|
|
489.2 %
|
|
$
|
6.81
|
|
$
0.33
|
$
6.48
|
|
1,963.6 %
|
|
Discontinued
operations
|
$
|
(0.04)
|
|
$
(0.04)
|
$
—
|
|
— %
|
|
$
|
(0.04)
|
|
$
(0.05)
|
$
0.01
|
|
20.0 %
|
|
Adjusted diluted net
earnings
per common share(1) from
continuing operation ($)
|
$
|
2.23
|
|
$
1.80
|
$
0.43
|
|
23.9 %
|
|
$
|
4.13
|
|
$
3.40
|
$
0.73
|
|
21.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In the second quarter of 2022, the Company recorded net earnings
available to common shareholders of the Company from continuing
operations of $640 million ($4.36 per common share), an increase of
$525 million ($3.62 per common
share) compared to the same period in 2021. The increase was due to
the favourable year-over-year net impact of adjusting items
totaling $472 million ($3.19 per
common share) and an improvement of $53 million ($0.43 per common share) in the consolidated
underlying operating performance of the Company described
below.
- The favourable year-over-year net impact of adjusting items
totaling $472 million ($3.19 per common share) was primarily due
to:
-
- the favourable year-over-year impact of the fair value
adjustment of the Trust Unit liability of $764 million ($5.18
per common share) as a result of the decrease in Choice Properties'
unit price in the second quarter of 2022;
- the favourable year-over-year impact of the prior year fair
value adjustment of the forward sale agreement of Loblaw common
shares of $50 million ($0.33 per common share). The Company settled the
net debt associated with the forward sale agreement in the fourth
quarter of 2021; and
- the income tax recovery related to the remeasurement of
deferred tax balances for the Choice Properties' disposition of six
office assets (the "Office Asset Sale") to Allied Properties Real
Estate Investment Trust ("Allied") of $46
million ($0.31 per common
share). See "Choice Properties Other Business Matters" section of
this News Release for further information;
partially offset by,
-
-
- the unfavourable year-over-year impact of the fair value
adjustment on investment properties of $210
million ($1.39 per common
share) primarily driven by Choice Properties, net of consolidation
adjustments in Other and Intersegment;
- the unfavourable impact of the fair value adjustment on Choice
Properties' investment in real estate securities of Allied of
$146 million ($0.99 per common share) as a result of a decrease
in Allied's Class B Unit price since the closing of the Office
Asset Sale on March 31, 2022 to the
end of the second quarter of 2022; and
- the unfavourable impact of the charge related to the commodity
tax matter at Loblaw of $45 million ($0.31 per common share). See "Loblaw Other
Business Matters" section of this News Release for further
information.
- The improvement in the Company's consolidated underlying
operating performance of $53 million
($0.43 per common share) was due
to:
-
- the favourable underlying operating performance of Loblaw;
and
- a decrease in adjusted net interest expense and other financing
charges(1);
partially offset by,
-
-
- an increase in the adjusted effective tax rate(1)
primarily attributable to an increase in tax expense as a result of
GWL's participation in Loblaw's Normal Course Issuer Bid ("NCIB")
program.
- Diluted net earnings per common share from continuing
operations also included the favourable impact of shares purchased
for cancellation over the last 12 months ($0.08 per common share) pursuant to the Company's
NCIB.
Adjusted net earnings available to common shareholders of the
Company(1) from continuing operations were
$328 million, an increase of $53 million, or 19.3%,
compared to the same period in 2021 due to the improvement in the
Company's consolidated underlying operating performance described
above. Adjusted diluted net earnings per common share(1)
from continuing operations were $2.23
per common share in the second quarter of 2022, an increase of
$0.43 per common share, or 23.9%,
compared to the same period in 2021. The increase was due to the
favourable performance in adjusted net earnings available to common
shareholders(1) from continuing operations and the
favourable impact of share repurchases.
CONSOLIDATED OTHER BUSINESS MATTERS
GWL CORPORATE(4) FINANCING ACTIVITIES
The Company completed the following financing activities
during the periods indicated below. The cash impacts of these
activities are set out below:
(unaudited)
($ millions)
|
|
12 Weeks
Ended
|
|
|
24 Weeks
Ended
|
|
|
Jun. 18,
2022
|
|
Jun. 19,
2021
|
|
|
Jun. 18,
2022
|
|
Jun. 19,
2021
|
|
GWL's NCIB – purchased
and cancelled
|
|
$
|
(278)
|
|
$
(141)
|
|
|
$
|
(325)
|
|
$
(166)
|
|
GWL's participation in
Loblaw's NCIB
|
|
309
|
|
172
|
|
|
|
319
|
|
338
|
|
GWL's credit facility
repayment
|
|
—
|
|
—
|
|
|
|
(121)
|
|
—
|
|
Settlement of net debt
associated with equity forward
sale agreement
|
|
—
|
|
(53)
|
|
|
|
—
|
|
(53)
|
|
Net cash flow from
(used in) above activities
|
|
$
|
31
|
|
$
(22)
|
|
|
$
|
(127)
|
|
$
119
|
|
|
|
|
|
|
|
|
|
|
|
|
GWL's NCIB – Purchased and Cancelled
Shares In the second quarter of 2022, the
Company purchased and cancelled 1.8 million shares (2021 – 1.2
million shares) under its NCIB. As at June
18, 2022, the Company had 144.7 million shares outstanding
(June 19, 2021 – 150.6 million shares).
In the second quarter of 2022, the Company entered into an
automatic share purchase plan ("ASPP") with a broker in order to
facilitate the repurchase of the Company's common shares under its
NCIB. During the effective period of the ASPP, the Company's broker
may purchase common shares at times when the Company would not be
active in the market.
Refer to Section 3.6, "Share Capital" of the MD&A in the
Company's 2022 Second Quarter Report for more information.
GWL's Participation in Loblaw's
NCIB The Company participates in Loblaw's NCIB
in order to maintain its proportionate percentage ownership
interest. During the second quarter of 2022, GWL received proceeds
of $309 million (2021 – $172
million) from the sale of Loblaw shares.
REPORTABLE OPERATING SEGMENTS
The Company operates through its two reportable operating
segments: Loblaw and Choice Properties. Other and Intersegment
includes eliminations, intersegment adjustments related to the
consolidation and cash and short-term investments held by the
Company. All other company level activities that are not allocated
to the reportable operating segments, such as interest expense,
corporate activities and administrative costs are included in Other
and Intersegment.
Loblaw has two reportable operating segments, retail and
financial services. Loblaw's retail segment consists primarily of
food retail and drug retail. Loblaw provides Canadians with
grocery, pharmacy and healthcare services, health and beauty,
apparel, general merchandise and financial services.
Choice Properties owns, manages and develops a high-quality
portfolio of commercial retail, industrial, mixed-use and
residential properties across Canada.
Excerpt of Segment Information
The accounting policies of the reportable operating segments are
the same as those described in the Company's 2021 audited annual
consolidated financial statements. The Company measures each
reportable operating segment's performance based on adjusted
EBITDA(1) and adjusted operating income(1).
No reportable operating segment is reliant on any single external
customer.
|
|
12 Weeks
Ended
|
|
|
|
Jun. 18,
2022
|
|
|
Jun. 19,
2021(3)
|
(unaudited)
($ millions)
|
|
Loblaw
|
Choice
Properties
|
Other
and
Intersegment
|
Total
|
|
|
Loblaw
|
Choice
Properties
|
Other and
Intersegment
|
Total
|
|
Revenue
|
|
$
12,847
|
$
313
|
$ (181)
|
$
12,979
|
|
|
$ 12,491
|
$
324
|
$ (178)
|
$ 12,637
|
|
Operating income
(loss)
|
|
$
740
|
$
(451)
|
$
360
|
$
649
|
|
|
$
750
|
$
503
|
$
(188)
|
$
1,065
|
|
Net interest expense
(income) and other
financing charges
|
|
152
|
(439)
|
(51)
|
(338)
|
|
|
161
|
418
|
(76)
|
503
|
|
Earnings (loss)
before income taxes from
continuing operations
|
|
$
588
|
$
(12)
|
$
411
|
$
987
|
|
|
$
589
|
$
85
|
$ (112)
|
$
562
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
$
740
|
$
(451)
|
$
360
|
$
649
|
|
|
$
750
|
$
503
|
$
(188)
|
$
1,065
|
|
Depreciation and
amortization
|
|
633
|
1
|
(82)
|
552
|
|
|
614
|
1
|
(74)
|
541
|
|
Adjusting
items(i)
|
|
124
|
676
|
(413)
|
387
|
|
|
5
|
(281)
|
132
|
(144)
|
|
Adjusted
EBITDA(i)
|
|
$
1,497
|
$
226
|
$
(135)
|
$
1,588
|
|
|
$
1,369
|
$
223
|
$
(130)
|
$
1,462
|
|
Depreciation and
amortization(ii)
|
|
519
|
1
|
(82)
|
438
|
|
|
497
|
1
|
(74)
|
424
|
|
Adjusted operating
income(i)
|
|
$
978
|
$
225
|
$
(53)
|
$
1,150
|
|
|
$
872
|
$
222
|
$
(56)
|
$
1,038
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i)
|
Certain items are
excluded from operating income to derive adjusted
EBITDA(1). Adjusted EBITDA(1) is used
internally by management when analyzing segment underlying
operating performance.
|
(ii)
|
Excludes $114 million
(2021 – $117 million) of amortization of intangible assets acquired
with Shoppers Drug Mart Corporation ("Shoppers Drug Mart") and
Lifemark, recorded by Loblaw.
|
|
|
24 Weeks
Ended
|
|
|
|
Jun. 18,
2022
|
|
|
Jun. 19,
2021(3)
|
(unaudited)
($ millions)
|
|
Loblaw
|
Choice
Properties
|
Other
and
Intersegment
|
Total
|
|
|
Loblaw
|
Choice
Properties
|
Other and
Intersegment
|
Total
|
|
Revenue
|
|
$
25,109
|
$
641
|
$
(364)
|
$
25,386
|
|
|
$ 24,363
|
$
651
|
$
(360)
|
$ 24,654
|
|
Operating
income
|
|
$
1,476
|
$
178
|
$ 161
|
$
1,815
|
|
|
$
1,365
|
$
788
|
$
(260)
|
$
1,893
|
|
Net interest expense
(income) and other
financing charges
|
|
294
|
(197)
|
(113)
|
(16)
|
|
|
321
|
765
|
(38)
|
1,048
|
|
Earnings before
income taxes from
continuing operations
|
|
$
1,182
|
$
375
|
$ 274
|
$
1,831
|
|
|
$
1,044
|
$
23
|
$
(222)
|
$
845
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
$
1,476
|
$
178
|
$ 161
|
$
1,815
|
|
|
$
1,365
|
$
788
|
$
(260)
|
$
1,893
|
|
Depreciation and
amortization
|
|
1,264
|
2
|
(165)
|
1,101
|
|
|
1,224
|
2
|
(160)
|
1,066
|
|
Adjusting
items(i)
|
|
98
|
271
|
(275)
|
94
|
|
|
(4)
|
(342)
|
149
|
(197)
|
|
Adjusted
EBITDA(i)
|
|
$
2,838
|
$
451
|
$
(279)
|
$
3,010
|
|
|
$
2,585
|
$
448
|
$ (271)
|
$
2,762
|
|
Depreciation and
amortization(ii)
|
|
1,033
|
2
|
(165)
|
870
|
|
|
990
|
2
|
(160)
|
832
|
|
Adjusted operating
income(i)
|
|
$
1,805
|
$
449
|
$ (114)
|
$
2,140
|
|
|
$
1,595
|
$
446
|
$ (111)
|
$
1,930
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i)
|
Certain items are
excluded from operating income to derive adjusted
EBITDA(1). Adjusted EBITDA(1) is used
internally by management when analyzing segment underlying
operating performance.
|
(ii)
|
Excludes $231 million
(2021 – $234 million) of amortization of intangible assets acquired
with Shoppers Drug Mart and Lifemark, recorded by
Loblaw.
|
|
|
Other and Intersegment includes the following items:
|
|
12 Weeks
Ended
|
|
|
|
Jun. 18,
2022
|
|
|
Jun. 19,
2021(3)
|
(unaudited)
($ millions)
|
|
Revenue
|
Operating
Income
|
Net
Interest
Expense
and Other
Financing
Charges
|
|
|
Revenue
|
Operating
Income
|
Net
Interest
Expense
and Other
Financing
Charges
|
|
Elimination of internal
lease arrangements
|
|
$
(125)
|
$ (35)
|
$
(23)
|
|
|
$
(127)
|
$ (36)
|
$
(25)
|
|
Elimination of cost
recovery
|
|
(56)
|
—
|
—
|
|
|
(51)
|
—
|
—
|
|
Recognition of
depreciation on Choice Properties'
investment properties classified as fixed assets
by
the Company and measured at cost
|
|
—
|
(12)
|
—
|
|
|
—
|
(18)
|
—
|
|
Fair value adjustment
on investment properties
|
|
—
|
415
|
(5)
|
|
|
—
|
(132)
|
—
|
|
Fair value adjustment
on Choice Properties'
Exchangeable Units
|
|
—
|
—
|
570
|
|
|
—
|
—
|
(289)
|
|
Fair value adjustment
on Trust Unit liability
|
|
—
|
—
|
(576)
|
|
|
—
|
—
|
188
|
|
Unit distributions on
Exchangeable Units paid by
Choice
Properties to GWL
|
|
—
|
—
|
(73)
|
|
|
—
|
—
|
(72)
|
|
Unit distributions on
Trust Units paid by Choice
Properties, excluding amounts paid to GWL
|
|
—
|
—
|
52
|
|
|
—
|
—
|
51
|
|
Fair value adjustment
of the forward sale agreement
for Loblaw common shares
|
|
—
|
—
|
—
|
|
|
—
|
—
|
58
|
|
Other
|
|
—
|
(8)
|
4
|
|
|
—
|
(2)
|
13
|
|
Total
|
|
$
(181)
|
$
360
|
$ (51)
|
|
|
$
(178)
|
$
(188)
|
$
(76)
|
|
|
|
|
|
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
|
|
Jun. 18,
2022
|
|
|
Jun. 19,
2021(3)
|
(unaudited)
($ millions)
|
|
Revenue
|
Operating
Income
|
Net
Interest
Expense
and Other
Financing
Charges
|
|
|
Revenue
|
Operating
Income
|
Net
Interest
Expense
and Other
Financing
Charges
|
|
Elimination of internal
lease arrangements
|
|
$
(253)
|
$ (73)
|
$
(45)
|
|
|
$
(255)
|
$ (75)
|
$
(50)
|
|
Elimination of cost
recovery
|
|
(111)
|
—
|
—
|
|
|
(105)
|
—
|
—
|
|
Recognition of
depreciation on Choice Properties'
investment properties classified as fixed assets
by
the Company and measured at cost
|
|
—
|
(22)
|
—
|
|
|
—
|
(24)
|
—
|
|
Fair value adjustment
on investment properties
|
|
—
|
296
|
(2)
|
|
|
—
|
(147)
|
—
|
|
Fair value adjustment
on Choice Properties'
Exchangeable Units
|
|
—
|
—
|
451
|
|
|
—
|
—
|
(507)
|
|
Fair value adjustment
on Trust Unit liability
|
|
—
|
—
|
(483)
|
|
|
—
|
—
|
427
|
|
Unit distributions on
Exchangeable Units paid by
Choice Properties to GWL
|
|
—
|
—
|
(146)
|
|
|
—
|
—
|
(146)
|
|
Unit distributions on
Trust Units paid by Choice
Properties, excluding amounts paid to GWL
|
|
—
|
—
|
103
|
|
|
—
|
—
|
102
|
|
Fair value adjustment
of the forward sale agreement
of Loblaw common shares
|
|
—
|
—
|
—
|
|
|
—
|
—
|
111
|
|
Reversal of Loblaw gain
on the sale of disposition of
property to Choice Properties
|
|
—
|
(19)
|
—
|
|
|
—
|
—
|
—
|
|
Other
|
|
—
|
(21)
|
9
|
|
|
—
|
(14)
|
25
|
|
Total
|
|
$
(364)
|
$ 161
|
$
(113)
|
|
|
$
(360)
|
$
(260)
|
$
(38)
|
|
|
|
|
|
|
|
|
|
|
Loblaw Operating Results
(unaudited)
($ millions except
where otherwise
indicated)
For the periods ended
as indicated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
|
|
|
|
Jun. 18,
2022
|
Jun. 19,
2021
|
$ Change
|
|
% Change
|
|
Jun. 18,
2022
|
Jun. 19,
2021
|
$ Change
|
|
% Change
|
|
Revenue
|
|
$
12,847
|
|
$
12,491
|
$
356
|
|
2.9 %
|
|
|
$
25,109
|
|
$ 24,363
|
$
746
|
|
3.1 %
|
|
Operating
income
|
|
$
740
|
|
$
750
|
$
(10)
|
|
(1.3) %
|
|
|
$
1,476
|
|
$
1,365
|
$
111
|
|
8.1 %
|
|
Adjusted
EBITDA(1)
|
|
$
1,497
|
|
$
1,369
|
$
128
|
|
9.3 %
|
|
|
$
2,838
|
|
$
2,585
|
$
253
|
|
9.8 %
|
|
Adjusted EBITDA
margin(1)
|
|
11.7 %
|
|
11.0 %
|
|
|
|
|
|
11.3 %
|
|
10.6 %
|
|
|
|
|
Depreciation and
amortization(i)
|
|
$
633
|
|
$
614
|
$
19
|
|
3.1 %
|
|
|
$
1,264
|
|
$
1,224
|
$
40
|
|
3.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i)
|
Depreciation and
amortization in the second quarter of 2022 includes $114 million
(2021 – $117 million) and $231 million (2021 – $234 million)
year-to-date of amortization of intangible assets acquired with
Shoppers Drug Mart and Lifemark.
|
|
|
Revenue Loblaw revenue in the second quarter of
2022 was $12,847 million, an
increase of $356 million, or 2.9%, compared to the same
period in 2021, driven by an increase in retail sales and an
improvement in financial services revenue.
Retail sales were $12,623 million, an increase of
$341 million, or 2.8%, compared to the same period
in 2021. The increase was primarily driven by the following
factors:
- food retail sales were $8,981
million (2021 – $8,878
million) and food retail same-store sales grew by 0.9% (2021
– declined by 0.1%) for the quarter;
-
- the Consumer Price Index as measured by The Consumer Price
Index for Food Purchased from Stores was 9.6% (2021 – 0.5%) which
was generally in line with Loblaw's internal food inflation;
and
- food retail basket size decreased and traffic increased in the
quarter when compared to the second quarter of 2021.
- drug retail sales were $3,642
million (2021 – $3,404
million) and drug retail same-store sales grew by 5.6% (2021
– 9.6%) for the quarter;
-
- pharmacy and healthcare services same-store sales growth was
6.1% (2021 – 17.2%), benefiting from an increase in acute and
chronic prescription volumes from the continued economic
re-opening. The number of prescriptions dispensed increased by 2.3%
(2021 – 1.9%). On a same-store basis, the number of prescriptions
dispensed increased by 2.3% (2021 – 0.3%) and the average
prescription value increased by 3.6% (2021 – 15.9%);
- pharmacy and healthcare services sales included Lifemark
revenues from the date of acquisition of $49
million. Lifemark revenues are excluded from same-store
sales; and
- front store same-store sales increased by 5.2% (2021 – 3.6%),
benefiting from the continued economic re-opening.
During the second quarter of 2022, one food and drug store was
opened, and one food and drug store was closed, resulting in a net
increase in retail square footage of 0.1 million square feet, or
0.1%.
Financial services revenue in the second quarter of 2022
increased by $25 million compared to the same period in 2021.
The increase was primarily driven by higher interest income
and credit card related fees from normalizing credit card
receivable balances and higher interchange income from an increase
in customer spending, partially offset by lower sales attributable
to The Mobile Shop.
Operating Income Loblaw operating income in the
second quarter of 2022 was $740 million, a decrease of
$10 million, or 1.3%, compared to the same period in 2021. The
decrease included the unfavourable year-over-year net impact of
adjusting items totaling $116 million, partially offset by the
improvements in underlying operating performance of
$106 million described below:
- the unfavourable year-over-year net impact of adjusting items
totaling $116 million was primarily
due to:
-
- the unfavourable impact of the charge related to the
President's Choice Bank ("PC Bank") commodity tax matter of
$111 million;
- the unfavourable impact of the Lifemark transaction costs of
$13 million; and
- the unfavourable year-over-year impact of the fair value
adjustment of derivatives of $7
million;
partially offset by,
-
-
- the favourable year-over-year impact of restructuring and other
related costs of $8 million; and
- the favourable year-over-year impact of gain on sale of
non-operating properties of $4
million.
- the improvement in underlying operating performance of
$106 million was primarily due to an
increase in retail gross profit, partially offset by an increase in
retail selling, general and administrative expenses ("SG&A")
and depreciation and amortization.
Adjusted EBITDA(1) Loblaw adjusted
EBITDA(1) in the second quarter of 2022 was
$1,497 million, an increase of
$128 million, or 9.3%, compared to the same period in 2021.
The increase was primarily due to an increase in retail of
$129 million, partially offset by a
decrease in financial services of $1
million.
Retail adjusted EBITDA(1) in the second
quarter of 2022 increased by $129 million driven by an
increase in retail gross profit of $169 million, partially
offset by an unfavourable increase in retail SG&A of
$40 million.
- Retail gross profit percentage of 31.4% increased by 50 basis
points compared to the same period in 2021, driven by favourable
changes in drug retail sales mix. Food retail margins were
stable.
- Retail SG&A as a percentage of sales was 19.9%, a
favourable decrease of 30 basis points compared to the same period
in 2021. The favourable decrease was primarily due to lower
COVID-19 related expenses, partially offset by higher costs from
the normalization of post-lockdown expenses.
Financial services adjusted EBITDA(1) decreased by
$1 million compared to the same period in 2021. Financial
services continues to benefit from the economic re-opening, but
earnings have decreased due to the year-over-year impact of the
expected credit loss provision from lapping a larger prior year
release of $12 million versus the
current quarter release of $4
million.
Depreciation and Amortization Loblaw depreciation
and amortization in the second quarter of 2022 was
$633 million, an increase of $19 million compared to the
same period in 2021, primarily driven by an increase in
depreciation of information technology ("IT") and leased assets.
Included in depreciation and amortization is the amortization of
intangible assets acquired with Shoppers Drug Mart and Lifemark of
$114 million (2021 – $117 million).
Consolidation of Franchises Loblaw has more than
500 franchise food retail stores in its network. Non-controlling
interests at Loblaw represent the share of earnings that relates to
Loblaw's food retail franchisees and is impacted by the timing of
when profit sharing with franchisees is agreed and finalized under
the terms of the agreements. Loblaw's net earnings attributable to
non-controlling interests were $38 million in the second
quarter of 2022. When compared to the second quarter of 2021, this
represented a decrease of $18 million, or 32.1%. The decrease
in non-controlling interests was primarily driven by a decline in
franchisee earnings.
Loblaw Other Business Matters
Lifemark Health Group On May
10, 2022, Loblaw acquired Lifemark for $832 million. Lifemark is the leading provider of
outpatient physiotherapy, massage therapy, occupational therapy,
chiropractic, mental health, and other ancillary rehabilitation
services through its more than 300 clinics across Canada. Revenue of $49
million and nominal net earnings were contributed by
Lifemark from the date of acquisition. Net earnings includes
amortization related to the acquired intangible assets of
$3 million.
PC Bank Commodity Tax Matter On July 19, 2022, the Tax Court of Canada ("Tax Court") released its decision
relating to PC Bank, a subsidiary of Loblaw. The Tax Court ruled
that PC Bank is not entitled to claim notional input tax credits
for certain payments it made to Loblaws Inc. in respect of
redemptions of loyalty points. PC Bank is planning to appeal the
decision.
Although Loblaw believes in the merits of its position, it
recorded a charge during the second quarter of $111 million, inclusive of interest. Loblaw
believes that this provision is sufficient to cover its liability
from the initial reassessment period in 2009 through to the end of
the second quarter of 2022, if the appeal is ultimately
unsuccessful.
Choice Properties Operating Results
(unaudited)
($ millions except
where otherwise
indicated)
For the periods ended
as indicated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12 Weeks
Ended
|
|
|
|
|
|
|
24 Weeks
Ended
|
|
|
|
|
|
Jun. 18,
2022
|
Jun. 19,
2021
|
|
$ Change
|
|
% Change
|
|
Jun. 18,
2022
|
Jun. 19,
2021
|
|
$ Change
|
|
% Change
|
|
Revenue
|
|
$
313
|
|
|
$
324
|
|
$
(11)
|
|
(3.4) %
|
|
|
$
641
|
|
|
$
651
|
|
$
(10)
|
|
(1.5) %
|
|
Net interest (income)
expense and
other financing charges(i)
|
|
$
(439)
|
|
|
$
418
|
|
$
(857)
|
|
(205.0) %
|
|
|
$
(197)
|
|
|
$
765
|
|
$
(962)
|
|
(125.8) %
|
|
Net (loss)
income
|
|
$
(12)
|
|
|
$
85
|
|
$
(97)
|
|
(114.1) %
|
|
|
$
375
|
|
|
$
23
|
|
$
352
|
|
1,530.4 %
|
|
Funds from
Operations(1)
|
|
$
175
|
|
|
$
172
|
|
$
3
|
|
1.7 %
|
|
|
$
350
|
|
|
$
342
|
|
$
8
|
|
2.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i)
|
Net interest (income)
expense and other financing charges includes a fair value
adjustment on Exchangeable Units.
|
|
|
Revenue Revenue in the second quarter of 2022 was
$313 million, a decrease of
$11 million, or 3.4%, compared to the same period in 2021, and
included $183 million (2021 –
$181 million) generated from tenants within Loblaw.
The decrease in revenue in the second quarter of 2022 was
primarily driven by:
- foregone revenue following the Office Asset Sale as described
below;
partially offset by,
- higher rental rates in the retail and industrial portfolio;
and
- increased capital recoveries.
Net Interest (Income) Expense and Other Financing
Charges Net interest income and other financing charges
in the second quarter of 2022 were $439 million compared to
net interest expense and other financing charges of
$418 million in the same period in 2021. The change of
$857 million was primarily driven by the favourable
year-over-year impact of the fair value adjustment on the Class B
LP units ("Exchangeable Units") of $859 million.
Net (Loss) Income Net loss in the second quarter of
2022 was $12 million, compared to net income of
$85 million in the same period in 2021. The change of
$97 million was primarily driven by:
- the unfavourable change in the adjustment to fair value of
investment properties, including those held within equity accounted
joint ventures, due to capitalization rate expansion in the retail
portfolio as a result of rising interest rates;
- the unfavourable change in the adjustment to fair value of
investment in real estate securities due to the change in Allied's
unit price; and
- a decrease in rental revenue as described above;
partially offset by,
- lower net interest expense and other financing charges as
described above.
Funds from Operations(1) Funds from
Operations(1) in the second quarter of 2022 was
$175 million, an increase of $3 million compared to the
same period in 2021. The increase was primarily due to
distributions from Choice Properties' investment in real estate
securities of Allied and higher interest income from the
consideration received as part of the Office Asset Sale on
March 31, 2022, partially offset by the decrease in
rental revenue as described above.
Choice Properties Other Business Matters
Strategic Disposition On March 31, 2022, Choice Properties completed the
Office Asset Sale. The consideration received consisted of
11,809,145 exchangeable Class B limited partnership units of Allied
Properties Exchangeable Limited Partnership ("Allied Class B
Units"), an affiliated entity of Allied, with a fair value of
$551 million on the transaction date,
and a promissory note with a fair value of $193 million (face
value of $200 million).
OUTLOOK(2)
For 2022, the Company expects adjusted net
earnings(1) from continuing operations to increase due
to the results from its operating segments, and to use excess cash
to repurchase shares.
Loblaw Loblaw will continue to execute on retail
excellence in its core grocery and pharmacy businesses while
advancing its growth initiatives in 2022. In the third year of the
pandemic, Loblaw's businesses remain well placed to service the
everyday needs of Canadians. However, Loblaw cannot predict the
precise impacts of COVID-19, the related industry volatility and
inflationary environment on its 2022 financial results.
On a full year basis, Loblaw continues to expect:
- its retail business to grow earnings faster than sales;
- to invest approximately $1.4
billion in capital expenditures, net of proceeds from
property disposals, reflecting incremental store and distribution
network investments; and
- to return capital to shareholders by allocating a significant
portion of free cash flow to share repurchases.
Based on its year to date operating and financial performance
and momentum exiting the second quarter, Loblaw expects full year
adjusted net earnings per common share(1) growth in the
mid-to-high teens.
Choice Properties Choice Properties' goal is to
provide net asset value appreciation through stable net operating
income growth and capital preservation, all with a long-term focus.
Choice Properties' business model, stable tenant base, strong
balance sheet, and disciplined approach to financial management
will continue to position it well for future success.
At the end of the second quarter of 2022, Choice Properties'
diversified portfolio of retail, industrial, residential and
mixed-use properties was 97.6% occupied and leased to high-quality
tenants across Canada. Choice
Properties' portfolio is primarily leased to necessity-based
tenants and logistics providers, who are less sensitive to economic
volatility and therefore provide stability to Choice Properties'
overall portfolio. This stability is evident in Choice Properties'
ability to consistently deliver strong financial and operating
results. Choice Properties continues to experience positive leasing
momentum across its portfolio and expects occupancy to remain
stable for the remainder of the year as it has substantially
addressed its 2022 lease renewal exposure.
In 2021, Choice Properties made the strategic decision to focus
its time and capital on the opportunities available in its core
business of essential retail and industrial, its growing
residential platform and its robust development pipeline. This
decision led to Choice Properties' strategic sale of six
high-quality office properties to Allied on March 31, 2022. Choice Properties will no longer
be focusing its reporting on office as a stand-alone asset
class.
Choice Properties continues to advance its development program,
which provides Choice Properties with the best opportunity to add
high-quality real estate to its portfolio at a reasonable cost and
drive net asset value appreciation over time. Choice Properties has
a mix of active development projects ranging in size, scale, and
complexity, including retail intensification projects, industrial
development and rental residential projects located in urban
markets with a focus on transit accessibility.
Since the start of the year, concerns over inflation have
resulted in a significant increase in interest rates with the Bank
of Canada ("BoC") already raising
the overnight rate by 200 basis points, with further rate hikes
anticipated for the remainder of 2022. Choice Properties
anticipates that rising interest rates may put further downward
pressure on the fair value of its properties in the second half of
2022. In light of the current economic environment, Choice
Properties continues to monitor the impact of the rising rate
environment, and has taken proactive steps to ensure it maintains
its financial strength and stability.
DECLARATION OF QUARTERLY DIVIDENDS
Subsequent to the end of the second quarter of 2022, the
Company's Board of Directors declared a quarterly dividend on GWL
Common Shares, Preferred Shares, Series I, Preferred Shares, Series
III, Preferred Shares, Series IV and Preferred Shares,
Series V payable as follows:
|
Common
Shares
|
$0.660 per share
payable October 1, 2022, to shareholders of
record September 15,
2022;
|
|
|
|
|
|
|
Preferred Shares,
Series I
|
$0.3625 per share
payable September 15, 2022, to
shareholders of record
August 31, 2022;
|
|
|
|
|
|
|
Preferred Shares,
Series III
|
$0.3250 per share
payable October 1, 2022, to shareholders
of record September 15, 2022;
|
|
|
|
|
|
|
Preferred Shares,
Series IV
|
$0.3250 per share
payable October 1, 2022, to shareholders
of record September 15, 2022;
|
|
|
|
|
|
|
Preferred Shares,
Series V
|
$0.296875 per share
payable October 1, 2022, to
shareholders of record September 15, 2022.
|
|
NON-GAAP FINANCIAL MEASURES
The Company uses non-GAAP financial measures and ratios as it
believes these measures and ratios provide useful information to
both management and investors with regard to accurately assessing
the Company's financial performance and financial condition.
Further, certain non-GAAP measures of Loblaw and Choice
Properties are included in this document. For more information on
these measures, refer to the materials filed by Loblaw and Choice
Properties, which are available on sedar.com or at loblaw.ca or
choicereit.ca, respectively.
Management uses these and other non-GAAP financial measures to
exclude the impact of certain expenses and income that must be
recognized under GAAP when analyzing underlying consolidated and
segment operating performance, as the excluded items are not
necessarily reflective of the Company's underlying operating
performance and make comparisons of underlying financial
performance between periods difficult. The Company excludes
additional items if it believes doing so would result in a more
effective analysis of underlying operating performance. The
exclusion of certain items does not imply that they are
non-recurring.
These measures do not have a standardized meaning prescribed by
GAAP and therefore they may not be comparable to similarly titled
measures presented by other publicly traded companies, and should
not be construed as an alternative to other financial measures
determined in accordance with GAAP. Unless otherwise indicated, all
financial information represents the Company's results from
continuing operations.
ADJUSTED EBITDA The Company believes adjusted
EBITDA is useful in assessing and making decisions regarding the
underlying operating performance of the Company's ongoing
operations and in assessing the Company's ability to generate cash
flows to fund its cash requirements, including its capital
investment program.
The following table reconciles adjusted EBITDA to operating
income, which is reconciled to GAAP net earnings attributable to
shareholders of the Company from continuing operations reported for
the periods ended as indicated.
|
|
12 Weeks
Ended
|
|
|
|
Jun. 18,
2022
|
|
|
|
|
Jun. 19,
2021(3)
|
(unaudited)
($ millions)
|
|
Loblaw
|
Choice
Properties
|
Other &
Intersegment
|
Consolidated
|
|
|
Loblaw
|
Choice
Properties
|
Other &
Intersegment
|
Consolidated
|
|
Net earnings
attributable to shareholders of the
Company from continuing operations
|
|
|
|
|
$
650
|
|
|
|
|
|
$
125
|
|
Add impact of the
following:
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests
|
|
|
|
|
224
|
|
|
|
|
|
236
|
|
Income
taxes
|
|
|
|
|
113
|
|
|
|
|
|
201
|
|
Net interest (income)
expense and other
financing charges
|
|
|
|
|
(338)
|
|
|
|
|
|
503
|
|
Operating income
(loss)
|
|
$
740
|
$
(451)
|
$
360
|
$
649
|
|
|
$
750
|
$
503
|
$
(188)
|
$ 1,065
|
|
Add (deduct) impact of
the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets acquired
with Shoppers Drug Mart
|
|
$
111
|
$
—
|
$
—
|
$
111
|
|
|
$
117
|
$
—
|
$
—
|
$
117
|
|
Amortization of
intangible assets acquired
with Lifemark
|
|
3
|
—
|
—
|
3
|
|
|
—
|
—
|
—
|
—
|
|
Fair value adjustment
of investment in real
estate securities
|
|
—
|
159
|
—
|
159
|
|
|
—
|
—
|
—
|
—
|
|
Charge related to PC
Bank commodity tax
matter
|
|
111
|
—
|
—
|
111
|
|
|
—
|
—
|
—
|
—
|
|
Fair value adjustment
on investment
properties
|
|
—
|
517
|
(415)
|
102
|
|
|
—
|
(281)
|
132
|
(149)
|
|
Transaction costs and
other related expenses
|
|
13
|
—
|
—
|
13
|
|
|
—
|
—
|
—
|
—
|
|
Fair value adjustment
of derivatives
|
|
4
|
—
|
—
|
4
|
|
|
(3)
|
—
|
—
|
(3)
|
|
Restructuring and
other related costs
|
|
—
|
—
|
—
|
—
|
|
|
8
|
—
|
—
|
8
|
|
Gain on sale of
non-operating properties
|
|
(4)
|
—
|
—
|
(4)
|
|
|
—
|
—
|
—
|
—
|
|
Foreign currency
translation and other
company level activities
|
|
—
|
—
|
2
|
2
|
|
|
—
|
—
|
—
|
—
|
|
Adjusting
items
|
|
$
238
|
$
676
|
$
(413)
|
$
501
|
|
|
$
122
|
$
(281)
|
$
132
|
$
(27)
|
|
Adjusted operating
income
|
|
$
978
|
$
225
|
$
(53)
|
$
1,150
|
|
|
$
872
|
$
222
|
$
(56)
|
$ 1,038
|
|
Depreciation and
amortization excluding the
impact of the above
adjustments(i)
|
|
519
|
1
|
(82)
|
438
|
|
|
497
|
1
|
(74)
|
424
|
|
Adjusted
EBITDA
|
|
$
1,497
|
$
226
|
$
(135)
|
$
1,588
|
|
|
$ 1,369
|
$
223
|
$
(130)
|
$ 1,462
|
|
|
|
|
|
|
|
|
|
|
|
(i)
|
Depreciation and
amortization for the calculation of adjusted EBITDA excludes $114
million (2021 – $117 million) of amortization of intangible assets,
acquired with Shoppers Drug Mart and Lifemark, recorded by
Loblaw.
|
|
|
24 Weeks
Ended
|
|
|
|
Jun. 18,
2022
|
|
|
Jun. 19,
2021(3)
|
(unaudited)
($ millions)
|
|
Loblaw
|
Choice
Properties
|
Other
&
Intersegment
|
Consolidated
|
|
|
Loblaw
|
Choice
Properties
|
Other &
Intersegment
|
Consolidated
|
|
Net earnings
attributable to shareholders of the
Company from continuing operations
|
|
|
|
|
$
1,023
|
|
|
|
|
|
$
73
|
|
Add impact of the
following:
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests
|
|
|
|
|
466
|
|
|
|
|
|
406
|
|
Income
taxes
|
|
|
|
|
342
|
|
|
|
|
|
366
|
|
Net interest (income)
expense and other
financing charges
|
|
|
|
|
(16)
|
|
|
|
|
|
1,048
|
|
Operating
income
|
|
$
1,476
|
$
178
|
$
161
|
$
1,815
|
|
|
$ 1,365
|
$ 788
|
$
(260)
|
$ 1,893
|
|
Add (deduct) impact of
the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets acquired
with Shoppers Drug Mart
|
|
$
228
|
$
—
|
$
—
|
$
228
|
|
|
$
234
|
$
—
|
$
—
|
$
234
|
|
Amortization of
intangible assets acquired
with Lifemark
|
|
3
|
—
|
—
|
3
|
|
|
—
|
—
|
—
|
—
|
|
Fair value adjustment
of investment in real
estate securities
|
|
—
|
159
|
—
|
159
|
|
|
—
|
—
|
—
|
—
|
|
Charge related to PC
Bank commodity tax
matter
|
|
111
|
—
|
—
|
111
|
|
|
—
|
—
|
—
|
—
|
|
Fair value adjustment
on investment
properties
|
|
—
|
107
|
(296)
|
(189)
|
|
|
—
|
(342)
|
147
|
(195)
|
|
Transaction costs and
other related expenses
|
|
16
|
5
|
—
|
21
|
|
|
—
|
—
|
—
|
—
|
|
Fair value adjustment
of derivatives
|
|
(10)
|
—
|
—
|
(10)
|
|
|
(11)
|
—
|
—
|
(11)
|
|
Restructuring and
other related
(recoveries) costs
|
|
(15)
|
—
|
19
|
4
|
|
|
12
|
—
|
—
|
12
|
|
Gain on sale of
non-operating properties
|
|
(4)
|
—
|
—
|
(4)
|
|
|
(5)
|
—
|
2
|
(3)
|
|
Foreign currency
translation and other
company level activities
|
|
—
|
—
|
2
|
2
|
|
|
—
|
—
|
—
|
—
|
|
Adjusting
items
|
|
$
329
|
$
271
|
$
(275)
|
$
325
|
|
|
$
230
|
$ (342)
|
$
149
|
$
37
|
|
Adjusted operating
income
|
|
$
1,805
|
$
449
|
$
(114)
|
$
2,140
|
|
|
$ 1,595
|
$ 446
|
$
(111)
|
$ 1,930
|
|
Depreciation and
amortization excluding the
impact of the above
adjustments(i)
|
|
1,033
|
2
|
(165)
|
870
|
|
|
990
|
2
|
(160)
|
832
|
|
Adjusted
EBITDA
|
|
$
2,838
|
$
451
|
$
(279)
|
$
3,010
|
|
|
$ 2,585
|
$ 448
|
$
(271)
|
$ 2,762
|
|
|
|
|
|
|
|
|
|
|
|
(i)
|
Depreciation and
amortization for the calculation of adjusted EBITDA excludes $231
million (2021 – $234 million) of amortization of intangible assets,
acquired with Shoppers Drug Mart and Lifemark, recorded by
Loblaw.
|
|
|
The following items impacted adjusted EBITDA in 2022 and
2021:
Amortization of intangible assets acquired with Shoppers
Drug Mart The acquisition of Shoppers Drug Mart
in 2014 included approximately $6 billion of definite
life intangible assets, which are being amortized over their
estimated useful lives. Annual amortization associated with the
acquired intangible assets will be approximately $500 million
until 2024 and will decrease thereafter.
Amortization of intangible assets acquired with
Lifemark The acquisition of Lifemark in the second
quarter of 2022 included approximately $299 million of definite life intangible assets,
which are being amortized over their estimated useful lives.
Fair value adjustment of investment in real estate
securities Choice Properties received Allied Class B
Units as part of the consideration for the Office Asset Sale on
March 31, 2022. Choice Properties
recognized these units as investments in real estate securities.
The investment in real estate securities is exposed to market price
fluctuations of Allied trust units. An increase (decrease) in the
market price of Allied trust units results in income (a charge) to
operating income.
Charge related to PC Bank commodity tax matter In
the second quarter of 2022, Loblaw recorded a charge of
$111 million, inclusive of interest.
On July 19, 2022, the Tax Court
released its decision and ruled that PC Bank is not entitled to
claim notional input tax credits for certain payments it made to
Loblaws Inc. in respect of redemptions of loyalty points. PC Bank
is planning to appeal the decision.
Fair value adjustment on investment properties The
Company measures investment properties at fair value. Under the
fair value model, investment properties are initially measured at
cost and subsequently measured at fair value. Fair value is
determined based on available market evidence. If market evidence
is not readily available in less active markets, the Company uses
alternative valuation methods such as discounted cash flow
projections or recent transaction prices. Gains and losses on fair
value are recognized in operating income in the period in which
they are incurred. Gains and losses from disposal of investment
properties are determined by comparing the fair value of disposal
proceeds and the carrying amount and are recognized in operating
income.
Transaction costs and other related expenses In
connection with the acquisition of Lifemark, in the second quarter
of 2022 and year-to-date Loblaw recorded $13
million and $16 million,
respectively, of acquisition costs.
During the first quarter of 2022 and year-to-date, Choice
Properties recorded advisory, legal, personnel, and other costs
related to the Office Asset Sale totaling $5
million.
Fair value adjustment of derivatives Loblaw is
exposed to commodity price and U.S. dollar exchange
rate fluctuations. In accordance with Loblaw's commodity risk
management policy, Loblaw enters into exchange traded futures
contracts and forward contracts to minimize cost volatility related
to fuel prices and the U.S. dollar exchange rate. These derivatives
are not acquired for trading or speculative purposes. Pursuant to
Loblaw's derivative instruments accounting policy, changes in the
fair value of these instruments, which include realized
and unrealized gains and losses are recorded in
operating income. Despite the impact of accounting for these
commodity and foreign currency derivatives on Loblaw's reported
results, the derivatives have the economic impact of largely
mitigating the associated risks arising from price and exchange
rate fluctuations in the underlying commodities and U.S. dollar
commitments.
Restructuring and other related costs The Company
continuously evaluates strategic and cost reduction initiatives
related to its store infrastructure, distribution networks and
administrative infrastructure with the objective of ensuring a low
cost operating structure. Only restructuring activities that
are publicly announced related to these initiatives are considered
adjusting items.
In the second quarter of 2022, Loblaw did not record any
restructuring and other related recoveries or charges (2021 –
a charge of $8 million).
Year-to-date, Loblaw recorded approximately $15 million (2021 – charges of $12 million) of restructuring and other related
recoveries mainly in connection with the previously announced
closure of two distribution centres in Laval and Ottawa. In the first quarter of 2022, Loblaw
disposed of one of its distribution centres for proceeds of
$26 million and recognized a gain of $19 million, which was partially offset by
$4 million of restructuring and other
related costs. Loblaw invested to build a modern and efficient
expansion to its Cornwall
distribution centre to serve its food and drug retail businesses in
Ontario and Quebec and volumes have been transferred.
Included in Loblaw's restructuring and other related recoveries
was a gain of $19 million related to
the disposition of a property to Choice Properties. On
consolidation, the $19 million
recovery recorded by Loblaw was reversed as it was an intercompany
transaction.
Gain on sale of non-operating properties In
the second quarter of 2022 and year-to-date, Loblaw disposed of
non-operating properties to a third party and recorded a gain
of $4 million (2021 – nil and
$5 million year-to-date).
In 2021, Choice Properties disposed of a property and incurred a
nominal loss which was recognized in fair value adjustment of
investment properties. On consolidation, the Company recorded the
property as fixed assets and recognized at cost less accumulated
depreciation. As a result, on consolidation an incremental
$2 million loss was recognized in
Other and Intersegment.
ADJUSTED NET INTEREST EXPENSE AND OTHER FINANCING
CHARGES The Company believes adjusted net interest
expense and other financing charges is useful in assessing the
ongoing net financing costs of the Company.
The following table reconciles adjusted net interest expense and
other financing charges to GAAP net interest (income) expense and
other financing charges reported for the periods ended as
indicated.
(unaudited)
($ millions)
|
12 Weeks
Ended
|
|
|
24 Weeks
Ended
|
|
Jun. 18,
2022
|
|
Jun. 19,
2021(3)
|
Jun. 18,
2022
|
|
Jun. 19,
2021(3)
|
Net interest (income)
expense and other financing
charges
|
|
$
(338)
|
|
|
$ 503
|
|
$
|
(16)
|
|
|
$ 1,048
|
|
Add: Fair value
adjustment of the Trust Unit liability
|
|
576
|
|
|
(188)
|
|
|
483
|
|
|
(427)
|
|
Recovery related to
Glenhuron
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
Fair value adjustment
of the forward sale
agreement for Loblaw common shares
|
|
—
|
|
|
(58)
|
|
|
—
|
|
|
(111)
|
|
Adjusted net interest
expense and other
financing charges
|
|
$
238
|
|
|
$ 257
|
|
$
|
478
|
|
|
$
510
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In addition to certain items described in the "Adjusted EBITDA"
section above, the following items impacted adjusted net interest
expense and other financing charges in 2022 and 2021:
Fair value adjustment of the Trust Unit liability
The Company is exposed to market price fluctuations as a
result of the Choice Properties Trust Units held by unitholders
other than the Company. These Trust Units are presented as a
liability on the Company's consolidated balance sheets as they are
redeemable for cash at the option of the holder, subject to certain
restrictions. This liability is recorded at fair value at each
reporting date based on the market price of Trust Units at the
end of each period. An increase (decrease) in the market price
of Trust Units results in a charge (income) to net interest expense
and other financing charges.
Recovery related to Glenhuron In the first quarter
of 2022, Loblaw reversed $35 million
of previously recorded charges, of which $33
million was recorded as income tax recovery and $2 million was recorded as interest income. In
addition, interest of $9 million, before taxes was recorded in
respect of interest income earned on expected cash tax refunds.
Fair value adjustment of the forward sale agreement for
Loblaw common shares The fair value adjustment of the
forward sale agreement for Loblaw common shares is included in net
interest expense and other financing charges. The adjustment is
determined by changes in the value of the underlying Loblaw
common shares. An increase (decrease) in the market price of Loblaw
common shares results in a charge (income) to net interest expense
and other financing charges. The Company settled the net debt
associated with the forward sale agreement in the fourth quarter of
2021.
ADJUSTED INCOME TAXES AND ADJUSTED EFFECTIVE TAX
RATE The Company believes the adjusted effective tax rate
applicable to adjusted earnings before taxes is useful in assessing
the underlying operating performance of its business.
The following table reconciles the effective tax rate applicable
to adjusted earnings before taxes to the GAAP effective tax rate
applicable to earnings before taxes as reported for the periods
ended as indicated.
(unaudited)
($ millions except
where otherwise indicated)
|
|
12 Weeks
Ended
|
|
|
24 Weeks
Ended
|
|
|
Jun. 18,
2022
|
Jun. 19,
2021(3)
|
Jun. 18,
2022
|
Jun. 19,
2021(3)
|
Adjusted operating
income(i)
|
|
$
1,150
|
|
$ 1,038
|
|
$
2,140
|
|
$ 1,930
|
|
Adjusted net interest
expense and other
financing charges(i)
|
|
238
|
|
257
|
|
478
|
|
510
|
|
Adjusted earnings
before taxes
|
|
$
912
|
|
$
781
|
|
$
1,662
|
|
$ 1,420
|
|
Income taxes
|
|
$
113
|
|
$
201
|
|
$
342
|
|
$
366
|
|
Add:
|
Tax impact of items
excluded from adjusted
earnings before taxes(ii)
|
|
89
|
|
17
|
|
69
|
|
45
|
|
|
Remeasurement of
deferred tax balances
|
|
46
|
|
—
|
|
46
|
|
—
|
|
|
Outside basis
difference in certain
Loblaw shares
|
|
18
|
|
—
|
|
(19)
|
|
(16)
|
|
|
Recovery related to
Glenhuron
|
|
—
|
|
—
|
|
33
|
|
—
|
|
Adjusted income
taxes
|
|
$
266
|
|
$
218
|
|
$
471
|
|
$
395
|
|
Effective tax rate
applicable to earnings before taxes
|
|
11.4 %
|
|
35.8 %
|
|
18.7 %
|
|
43.3 %
|
|
Adjusted effective tax
rate applicable to adjusted
earnings before taxes
|
|
29.2 %
|
|
27.9 %
|
|
28.3 %
|
|
27.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i)
|
See reconciliations of
adjusted operating income and adjusted net interest expense and
other financing charges above.
|
(ii)
|
See the adjusted EBITDA
table and the adjusted net interest expense and other financing
charges table above for a complete list of items excluded from
adjusted earnings before taxes.
|
|
|
In addition to certain items described in the "Adjusted EBITDA"
and "Adjusted Net Interest Expense and Other Financing Charges"
sections above, the following items impacted adjusted income taxes
and the adjusted effective tax rate in 2022 and 2021:
Remeasurement of deferred tax balances
As a result of the Office Asset Sale, the Company revalued
certain deferred tax balances which resulted in an income tax
recovery of $46 million.
Outside basis difference in certain Loblaw shares
The Company recorded a deferred tax recovery of $18 million quarter-to-date (2021 – nil) and a
deferred tax expense of $19 million
year-to-date (2021 – $16 million) on temporary differences in
respect of GWL's investment in certain Loblaw shares that are
expected to reverse in the foreseeable future as a result of GWL's
participation in Loblaw's NCIB.
Recovery related to Glenhuron In the first quarter
of 2022, Loblaw reversed $35 million
of previously recorded charges, of which $33
million was recorded as income tax recovery and $2 million was recorded as interest income. In
addition, interest of $9 million,
before taxes was recorded in respect of interest income earned on
expected cash tax refunds.
ADJUSTED NET EARNINGS AVAILABLE TO COMMON SHAREHOLDERS FROM
CONTINUING OPERATIONS AND ADJUSTED DILUTED NET EARNINGS PER COMMON
SHARE FROM CONTINUING OPERATIONS The Company believes
that adjusted net earnings available to common shareholders from
continuing operations and adjusted diluted net earnings per common
share from continuing operations are useful in assessing the
Company's underlying operating performance and in making decisions
regarding the ongoing operations of its business.
The following table reconciles adjusted net earnings available
to common shareholders of the Company from continuing operations
and adjusted net earnings attributable to shareholders of the
Company from continuing operations to net earnings attributable to
shareholders of the Company and then to net earnings available to
common shareholders of the Company from continuing operations
reported for the periods ended as indicated.
(unaudited)
($ millions except
where otherwise indicated)
|
12 Weeks
Ended
|
|
|
24 Weeks
Ended
|
|
Jun. 18,
2022
|
|
Jun. 19,
2021(3)
|
Jun. 18,
2022
|
|
Jun. 19,
2021(3)
|
Net earnings
attributable to shareholders of the Company
|
|
$ 644
|
|
|
$ 118
|
|
|
$
1,017
|
|
|
$
66
|
|
Less: Net loss
from discontinued operations
|
|
(6)
|
|
|
(7)
|
|
|
(6)
|
|
|
(7)
|
|
Net earnings
attributable to shareholders of the Company
from continuing operations
|
|
$ 650
|
|
|
$ 125
|
|
|
$ 1,023
|
|
|
$
73
|
|
Less: Prescribed
dividends on preferred shares in
share
capital
|
|
(10)
|
|
|
(10)
|
|
|
(20)
|
|
|
(20)
|
|
Net earnings available
to common shareholders
of the Company from continuing operations
|
|
$ 640
|
|
|
$ 115
|
|
|
$ 1,003
|
|
|
$
53
|
|
Less: Reduction
in net earnings due to dilution at Loblaw
|
|
(2)
|
|
|
(2)
|
|
|
(4)
|
|
|
(3)
|
|
Net earnings available
to common shareholders from
continuing operations for diluted earnings per
share
|
|
$ 638
|
|
|
$ 113
|
|
|
$
999
|
|
|
$
50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to shareholders of the Company
from continuing operations
|
|
$ 650
|
|
|
$ 125
|
|
|
$ 1,023
|
|
|
$
73
|
|
Adjusting items (refer
to the following table)
|
|
(312)
|
|
|
160
|
|
|
(393)
|
|
|
467
|
|
Adjusted net earnings
attributable to shareholders
of the Company from continuing operations
|
|
$ 338
|
|
|
$ 285
|
|
|
$
630
|
|
|
$ 540
|
|
Less: Prescribed
dividends on preferred shares in
share
capital
|
|
(10)
|
|
|
(10)
|
|
|
(20)
|
|
|
(20)
|
|
Adjusted net earnings
available to common shareholders
of the Company from continuing operations
|
|
$ 328
|
|
|
$ 275
|
|
|
$
610
|
|
|
$ 520
|
|
Less: Reduction
in net earnings due to dilution at Loblaw
|
|
(2)
|
|
|
(2)
|
|
|
(4)
|
|
|
(3)
|
|
Adjusted net earnings
available to common shareholders
for diluted earnings per share from continuing
operations
|
|
$ 326
|
|
|
$ 273
|
|
|
$
606
|
|
|
$
517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average common shares outstanding (in millions)
|
|
146.3
|
|
|
151.8
|
|
|
146.8
|
|
|
152.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table reconciles adjusted net earnings available
to common shareholders of the Company from continuing operations
and adjusted diluted net earnings per common share from continuing
operations to GAAP net earnings available to common shareholders of
the Company from continuing operations and diluted net earnings per
common share from continuing operations as reported for the periods
ended as indicated.
|
12 Weeks
Ended
|
|
|
Jun. 18,
2022
|
|
Jun. 19,
2021(3)
|
(unaudited)
($ except where
otherwise indicated)
|
Net
Earnings
Available to
Common
Shareholders of
the Company
($ millions)
|
|
Diluted
Net
Earnings
Per
Common
Share
|
|
Net
Earnings
Available to
Common
Shareholders of
the Company
($ millions)
|
|
Diluted
Net
Earnings
Per
Common
Share
|
|
Continuing
Operations
|
|
$
640
|
|
$
4.36
|
|
|
$
115
|
|
$
0.74
|
|
Add (deduct) impact of
the following(i):
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets acquired with Shoppers
Drug Mart
|
|
$
43
|
|
$
0.30
|
|
|
$
46
|
|
$
0.30
|
|
Amortization of
intangible assets acquired with Lifemark
|
|
1
|
|
0.01
|
|
|
—
|
|
—
|
|
Fair value adjustment
of investment in real estate securities
|
|
146
|
|
0.99
|
|
|
—
|
|
—
|
|
Charge related to PC
Bank commodity tax matter
|
|
45
|
|
0.31
|
|
|
—
|
|
—
|
|
Fair value adjustment
on investment properties
|
|
85
|
|
0.58
|
|
|
(125)
|
|
(0.81)
|
|
Transaction costs and
other related expenses
|
|
7
|
|
0.05
|
|
|
—
|
|
—
|
|
Fair value adjustment
of derivatives
|
|
2
|
|
0.01
|
|
|
(1)
|
|
(0.01)
|
|
Restructuring and
other related costs
|
|
—
|
|
—
|
|
|
2
|
|
0.01
|
|
Gain on sale of
non-operating properties
|
|
(2)
|
|
(0.02)
|
|
|
—
|
|
—
|
|
Fair value adjustment
of the Trust Unit liability
|
|
(576)
|
|
(3.94)
|
|
|
188
|
|
1.24
|
|
Fair value adjustment
of the forward sale agreement for Loblaw
common shares
|
|
—
|
|
—
|
|
|
50
|
|
0.33
|
|
Remeasurement of
deferred tax balances
|
|
(46)
|
|
(0.31)
|
|
|
—
|
|
—
|
|
Outside basis
difference in certain Loblaw shares
|
|
(18)
|
|
(0.12)
|
|
|
—
|
|
—
|
|
Foreign currency
translation and other company level activities
|
|
1
|
|
0.01
|
|
|
—
|
|
—
|
|
Adjusting items
Continuing Operations
|
|
$
(312)
|
|
$
(2.13)
|
|
|
$
160
|
|
$
1.06
|
|
Adjusted Continuing
Operations
|
|
$
328
|
|
$
2.23
|
|
|
$
275
|
|
$
1.80
|
|
|
|
|
|
|
|
|
|
(i)
|
Net of income taxes and
non-controlling interests, as applicable.
|
|
24 Weeks
Ended
|
|
|
Jun. 18,
2022
|
|
Jun. 19,
2021(3)
|
(unaudited)
($ except where
otherwise indicated)
|
Net
Earnings
Available to
Common
Shareholders of
the Company
($ millions)
|
|
Diluted
Net
Earnings
Per
Common
Share
|
|
Net
Earnings
Available to
Common
Shareholders
of
the Company
($ millions)
|
|
Diluted
Net
Earnings
Per
Common
Share
|
|
Continuing
Operations
|
|
$
1,003
|
|
$
6.81
|
|
|
$
53
|
|
$
0.33
|
|
Add (deduct) impact of
the following(i):
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets acquired with Shoppers
Drug Mart
|
|
$
89
|
|
$
0.60
|
|
|
$
91
|
|
$
0.59
|
|
Amortization of
intangible assets acquired with Lifemark
|
|
1
|
|
0.01
|
|
|
—
|
|
—
|
|
Fair value adjustment
of investment in real estate securities
|
|
146
|
|
0.99
|
|
|
—
|
|
—
|
|
Charge related to PC
Bank commodity tax matter
|
|
45
|
|
0.31
|
|
|
—
|
|
—
|
|
Fair value adjustment
on investment properties
|
|
(158)
|
|
(1.08)
|
|
|
(163)
|
|
(1.07)
|
|
Transaction costs and
other related expenses
|
|
12
|
|
0.08
|
|
|
—
|
|
—
|
|
Fair value adjustment
of derivatives
|
|
(4)
|
|
(0.03)
|
|
|
(4)
|
|
(0.03)
|
|
Restructuring and
other related costs
|
|
10
|
|
0.08
|
|
|
4
|
|
0.03
|
|
Gain on sale of
non-operating properties
|
|
(2)
|
|
(0.02)
|
|
|
—
|
|
—
|
|
Fair value adjustment
of the Trust Unit liability
|
|
(483)
|
|
(3.29)
|
|
|
427
|
|
2.81
|
|
Fair value adjustment
of the forward sale agreement for Loblaw
common shares
|
|
—
|
|
—
|
|
|
96
|
|
0.63
|
|
Remeasurement of
deferred tax balances
|
|
(46)
|
|
(0.31)
|
|
|
—
|
|
—
|
|
Outside basis
difference in certain Loblaw shares
|
|
19
|
|
0.13
|
|
|
16
|
|
0.11
|
|
Recovery related to
Glenhuron
|
|
(23)
|
|
(0.16)
|
|
|
—
|
|
—
|
|
Foreign currency
translation and other company level activities
|
|
1
|
|
0.01
|
|
|
—
|
|
—
|
|
Adjusting items
Continuing Operations
|
|
$
(393)
|
|
$
(2.68)
|
|
|
$
467
|
|
$
3.07
|
|
Adjusted Continuing
Operations
|
|
$
610
|
|
$
4.13
|
|
|
$
520
|
|
$
3.40
|
|
|
|
|
|
|
|
|
|
|
|
|
(i)
|
Net of income taxes and
non-controlling interests, as applicable.
|
|
|
FREE CASH FLOW FROM CONTINUING OPERATIONS The
Company believes free cash flow is useful in assessing the
Company's cash available for additional financing and investing
activities.
The following table reconciles free cash flow to GAAP measures
reported for the periods ended as indicated.
(unaudited)
($ millions)
|
|
12 Weeks
Ended
|
|
|
|
|
24 Weeks
Ended
|
|
|
|
Jun. 18,
2022
|
Jun. 19,
2021(3)
|
$ Change
|
|
Jun. 18,
2022
|
Jun. 19,
2021(3)
|
$ Change
|
|
Cash flows from
operating activities
|
|
$
1,118
|
|
|
$
1,702
|
|
$
(584)
|
|
|
$
1,875
|
|
|
$
2,613
|
|
$
(738)
|
|
Less: Cash flows
from operating activities from
discontinued
operations
|
|
—
|
|
|
19
|
|
(19)
|
|
|
—
|
|
|
16
|
|
(16)
|
|
Cash flows from
operating activities from
continuing operations
|
|
$
1,118
|
|
|
$
1,683
|
|
$
(565)
|
|
|
$
1,875
|
|
|
$
2,597
|
|
$
(722)
|
|
Less: Interest
paid
|
|
184
|
|
|
195
|
|
(11)
|
|
|
398
|
|
|
439
|
|
(41)
|
|
Capital
investments(i)
|
|
362
|
|
|
278
|
|
84
|
|
|
569
|
|
|
501
|
|
68
|
|
Lease payments,
net
|
|
203
|
|
|
198
|
|
5
|
|
|
346
|
|
|
338
|
|
8
|
|
Free cash
flow from continuing operations
|
|
$
369
|
|
|
$
1,012
|
|
$
(643)
|
|
|
$
562
|
|
|
$
1,319
|
|
$
(757)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i)
|
During 2022, there were
no additions to fixed assets in Loblaw related to prepayments that
were made in 2021 and transferred from other assets. During 2021,
additions to fixed assets in Loblaw included prepayments that were
made in 2020 and transferred from other assets of nil in the second
quarter of 2021 and $1 million year-to-date.
|
|
|
CHOICE PROPERTIES' FUNDS FROM OPERATIONS Choice
Properties considers Funds from Operations to be a useful measure
of operating performance as it adjusts for items included in net
income that do not arise from operating activities or do not
necessarily provide an accurate depiction of its performance.
Funds from operations is calculated in accordance with the Real
Property Association of Canada's
Funds from Operations & Adjusted Funds from Operations for
International Financial Reporting Standards ("IFRS") issued in
January 2022.
The following table reconciles Choice Properties' Funds from
Operations to net income for the periods ended as
indicated.
(unaudited)
($ millions)
|
12 Weeks
Ended
|
|
24 Weeks
Ended
|
|
|
Jun. 18,
2022
|
|
|
Jun. 19,
2021
|
|
|
Jun. 18,
2022
|
|
|
Jun. 19,
2021
|
|
Net (loss)
income
|
|
$
(12)
|
|
|
$
85
|
|
|
$
375
|
|
|
$
22
|
|
Add (deduct) impact of
the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
Transaction costs and
other related expenses
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
Other fair value
gains, net
|
|
(2)
|
|
|
3
|
|
|
(1)
|
|
|
2
|
|
Fair value adjustment
on Exchangeable Units
|
|
(570)
|
|
|
289
|
|
|
(451)
|
|
|
507
|
|
Fair value adjustment
on investment properties
|
|
524
|
|
|
(269)
|
|
|
221
|
|
|
(328)
|
|
Fair value adjustment
on investment property held in
equity accounted joint ventures
|
|
(1)
|
|
|
(12)
|
|
|
(112)
|
|
|
(14)
|
|
Fair value adjustment
of investment in real estate
securities
|
|
159
|
|
|
—
|
|
|
159
|
|
|
—
|
|
Capitalized interest
on equity accounted joint ventures
|
|
2
|
|
|
1
|
|
|
3
|
|
|
2
|
|
Unit distributions on
Exchangeable Units
|
|
73
|
|
|
73
|
|
|
146
|
|
|
146
|
|
Internal expenses for
leasing
|
|
2
|
|
|
2
|
|
|
4
|
|
|
4
|
|
Funds from
Operations
|
|
$
175
|
|
|
$ 172
|
|
|
$
350
|
|
|
$ 342
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FORWARD-LOOKING STATEMENTS
This News Release contains forward-looking statements about the
Company's objectives, plans, goals, aspirations, strategies,
financial condition, results of operations, cash flows,
performance, prospects, opportunities and legal and regulatory
matters. Specific forward-looking statements in this News Release
include, but are not limited to, statements with respect to the
Company's anticipated future results, events and plans, strategic
initiatives and restructuring, regulatory changes, and economic
conditions. These specific forward-looking statements are contained
throughout this News Release including, without limitation, in the
"Outlook" section of this News Release. Forward-looking statements
are typically identified by words such as "expect", "anticipate",
"believe", "foresee", "could", "estimate", "goal", "intend",
"plan", "seek", "strive", "will", "may", "should" and similar
expressions, as they relate to the Company and its management.
Forward-looking statements reflect the Company's estimates,
beliefs and assumptions, which are based on management's perception
of historical trends, current conditions and expected future
developments, as well as other factors it believes are appropriate
in the circumstances. The Company's estimates, beliefs and
assumptions are inherently subject to significant business,
economic, competitive and other uncertainties and contingencies
regarding future events, and as such, are subject to change. The
Company can give no assurance that such estimates, beliefs and
assumptions will prove to be correct.
Numerous risks and uncertainties could cause the Company's
actual results to differ materially from those expressed, implied
or projected in the forward-looking statements, including those
described in the "Enterprise Risks and Risk Management" section,
of the MD&A in the Company's 2021 Annual Report and the
Company's Annual Information Form for the year ended
December 31, 2021.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which reflect the Company's
expectations only as of the date of this News Release. Except as
required by law, the Company does not undertake to update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise.
2022 SECOND QUARTER REPORT
The Company's 2021 Annual Report and 2022 Second Quarter Report
are available in the Investor Centre section of the Company's
website at www.weston.ca and have been filed on SEDAR and are
available at www.sedar.com.
INVESTOR RELATIONS
Shareholders, security analysts and investment professionals
should direct their requests to Roy
MacDonald, Group Vice-President, Investor Relations, at the
Company's Executive Office or by e-mail at investor@weston.ca.
Additional financial information has been filed electronically
with various securities regulators in Canada through SEDAR. This News Release
includes selected information on Loblaw, a public company with
shares trading on the Toronto Stock Exchange ("TSX"). For
information regarding Loblaw, readers should refer to the materials
filed by Loblaw on SEDAR from time to time. These filings are also
maintained on Loblaw's corporate website at www.loblaw.ca.
This News Release also includes selected information on Choice
Properties, a public real estate investment trust with units
trading on the TSX. For information regarding Choice Properties,
readers should refer to the materials filed by Choice Properties on
SEDAR from time to time. These filings are also maintained on
Choice Properties' website at www.choicereit.ca.
Ce rapport est disponible en français.
|
|
Endnotes
|
|
|
(1)
|
See the "Non-GAAP
Financial Measures" section of this News Release, which includes
the reconciliation of such non-GAAP measures to the most directly
comparable GAAP measures.
|
(2)
|
This News Release
contains forward-looking information. See "Forward-Looking
Statements" section of this News Release and the Company's 2022
Second Quarter Report for a discussion of material factors that
could cause actual results to differ materially from the forecasts
and projections herein and of the material factors and assumptions
that were used when making these statements. This News Release
should be read in conjunction with GWL's filings with securities
regulators made from time to time, all of which can be found at
www.weston.ca and www.sedar.com.
|
(3)
|
Comparative figures
have been restated to conform with current year
presentation.
|
(4)
|
GWL Corporate refers to
the non-consolidated financial results and metrics of GWL. GWL
Corporate is a subset of Other and Intersegment.
|
|
|
SOURCE George Weston Limited