2014

George Weston Limited - 2012 First Quarter Results(1).

TORONTO, May 8, 2012 /CNW/ - George Weston Limited (TSX: WN) ("GWL") and its subsidiaries (collectively the "Company") today is announcing its unaudited results for the 12 weeks ended March 24, 2012.

The Company's Q1 2012 Quarterly Report to Shareholders, including the Company's unaudited interim period condensed consolidated financial statements and Management's Discussion and Analysis ("MD&A") for the 12 weeks ended March 24, 2012, is available in the Investor Centre section of the Company's website at www.weston.ca and has been filed with the System for Electronic Document Analysis and Retrieval ("SEDAR") and will be available at www.sedar.com.

CONSOLIDATED RESULTS OF OPERATIONS
George Weston Limited's first quarter 2012 adjusted basic net earnings per common share(2) were $0.89 compared to $1.07 in the same period in 2011, a decrease of $0.18. The decrease was primarily attributable to a decline in the operating performance of Loblaw Companies Limited ("Loblaw"), partially offset by a decline in the effective income tax rate. The decline in the operating performance of Loblaw was primarily due to increased transportation costs and higher input costs that were not entirely passed on to the consumer including the incremental investment related to Loblaw's customer proposition, a charge related to the transition of certain Ontario conventional stores to the more cost effective and efficient operating terms of collective agreements ratified in the third quarter of 2010 and incremental costs related to investments in information technology ("IT") and supply chain(3).

(unaudited)                    
($ millions except where otherwise indicated)           12 Weeks Ended  
As at or for the periods ended as indicated          Mar. 24, 2012       Mar. 26, 2011       Change
Sales             $  7,224       $  7,148       1.1%
Operating income             $  274       $  303       (9.6)%
Adjusted operating income(2)             $  311       $  380       (18.2)%
Adjusted operating margin(2)              4.3%        5.3%        
Net interest expense and other financing charges       $  44       $  66       (33.3)%
Income taxes       $  59       $  72       (18.1)%
Net earnings attributable to shareholders of the Company       $  124       $  105       18.1%
Net earnings       $  171       $  165       3.6%
Basic net earnings per common share ($)       $  0.89       $  0.74       20.3%
Adjusted basic net earnings per common share(2) ($)       $  0.89       $  1.07       (16.8)%
Adjusted EBITDA(2)             $  495       $  546       (9.3)%
Adjusted EBITDA margin(2)              6.9%        7.6%        
               

The Company's basic net earnings per common share were $0.89 compared to $0.74 in the same period in 2011, an increase of $0.15, or 20.3%. Adjusted basic net earnings per common share(2) declined $0.18, or 16.8%, and excluded the year-over-year favourable impact of certain items, primarily the fair value adjustment of the forward sale agreement for 9.6 million Loblaw common shares, restructuring and other charges and the fair value adjustment of commodity derivatives at Weston Foods.

The Company uses non-GAAP financial measures. See the "Non-GAAP Financial Measures" section of this News Release for more information on these non-GAAP financial measures.

OPERATING SEGMENTS

Weston Foods

(unaudited)         12 Weeks Ended
($ millions)       Mar. 24, 2012   Mar. 26, 2011
Sales     $  425   $  410
Operating income     $  60   $  19
Adjusted operating income(2)     $  59   $  57
Adjusted operating margin(2)       13.9%     13.9%
Adjusted EBITDA(2)     $  73   $  71
Adjusted EBITDA margin(2)       17.2%     17.3%
               

Weston Foods sales in the first quarter of 2012 increased by 3.7% to $425 million compared to same period in 2011. Foreign currency translation positively impacted sales by approximately 0.8%. Excluding this impact, sales increased 2.9% due to the positive impact of higher pricing across key product categories of 4.2%, partially offset by a decrease in volumes of 1.3% when compared to the same period in 2011.

Weston Foods operating income in the first quarter of 2012 was $60 million compared to $19 million in the same period in 2011. The change in restructuring and other charges, the fair value adjustment of commodity derivatives and share-based compensation net of equity derivatives had a year-over-year favourable impact of $39 million on Weston Foods operating income.

Weston Foods adjusted operating income(2) was $59 million in the first quarter of 2012 compared to $57 million in the same period in 2011, an increase of $2 million, or 3.5%. Weston Foods adjusted operating margin(2) remained unchanged at 13.9% in the first quarters of both 2012 and 2011. Adjusted operating income(2) in the first quarter of 2012 was positively impacted by higher pricing in key product categories and the benefits realized from productivity improvements and other cost reduction initiatives, which were partially offset by higher commodity and fuel costs and lower sales volumes in the first quarter of 2012 compared to the same period in 2011.

Loblaw

(unaudited)         12 Weeks Ended
($ millions)       Mar. 24, 2012     Mar. 26, 2011
Sales     $  6,937   $  6,872
Operating income     $  237   $  301
Adjusted operating income(2)      $  252   $  323
Adjusted operating margin(2)       3.6%     4.7%
Adjusted EBITDA(2)     $  422   $  475
Adjusted EBITDA margin(2)       6.1%     6.9%
               

In the first quarter of 2012, Loblaw executed on its plan. Despite a decline in year-over-year operating income, store conditions improved, Loblaw made steady progress on its IT implementation and took a disciplined approach to improving its customer proposition.

Loblaw sales in the first quarter of 2012 increased by 0.9% to $6,937 million compared to the same period in 2011. Retail segment sales increased by 0.8% and same-store sales declined by 0.7% (2011 - 0.1%), both negatively impacted by the effect of one less day of store operations estimated to be between 0.8% to 1.0%. Sales in food and drugstore were flat, gas bar sales growth was strong, sales in general merchandise, excluding apparel, were flat and sales growth in apparel was strong. Loblaw experienced modest average quarterly internal food price inflation during the first quarters of 2012 and 2011, which was lower than the average quarterly national food price inflation of 3.7% (2011 - 2.5%) as measured by "The Consumer Price Index for Food Purchased from Stores". Since the end of the first quarter of 2011, Loblaw opened 25 corporate and franchise stores and closed five corporate and franchise stores, resulting in a net increase of 0.6 million square feet, or 1.2%. Loblaw sales in the first quarter of 2012 were also positively impacted by an increase in revenue from its Financial Services segment, which includes President's Choice Bank ("PC Bank"), a subsidiary of Loblaw. The increase in Financial Services segment revenue was primarily driven by higher interchange fee income, interest income and PC Telecom revenues when compared to the same period in 2011.

Loblaw operating income in the first quarter of 2012 decreased by 21.3% to $237 million from $301 million in the same period in 2011.

Loblaw adjusted operating income(2) was $252 million in the first quarter of 2012 compared to $323 million in the same period in 2011. Loblaw adjusted operating margin(2) was 3.6% compared to 4.7% in the same period in 2011. The decreases in adjusted operating income(2) and adjusted operating margin(2) were attributable to increased transportation costs and higher input costs outpacing internal food price inflation, changes in the value of Loblaw's investments in its franchise business, a charge related to the transition of certain Ontario conventional stores to the more cost effective and efficient operating terms of collective agreements ratified in the third quarter of 2010 and incremental costs related to investments in IT and supply chain. These decreases were partially offset by other operating cost efficiencies and improved shrink. Higher input costs that were not entirely passed on to the consumer included an estimated $10 million incremental investment in Loblaw's customer proposition. Loblaw's adjusted operating income(2) was also negatively impacted by the continued investment in the growth of its Financial Services segment, which includes PC Bank.

NET INTEREST EXPENSE AND OTHER FINANCING CHARGES
In the first quarter of 2012, net interest expense and other financing charges decreased by $22 million to $44 million compared to the same period in 2011. The decrease was due to an increase of $22 million in non-cash income related to the fair value adjustment of the forward sale agreement for 9.6 million Loblaw common shares. Excluding this impact, net interest expense and other financing charges were flat compared to the same period in 2011.

INCOME TAXES
In the first quarter of 2012, income tax expense was $59 million compared to $72 million in the same period in 2011. The effective income tax rate decreased to 25.7% in the first quarter of 2012 compared to 30.4% in the same period in 2011. The decrease was primarily due to a decrease in income tax expense related to certain prior year income tax matters, reductions in the federal and Ontario statutory income tax rates and a reduction in non-deductible amounts.

OUTLOOK(1)
This outlook reflects the underlying operating performance of the Company's operating segments as discussed below.

For the full year 2012, Weston Foods expects to deliver sales in line with 2011 as market conditions are expected to remain challenging. Higher commodity and input costs experienced in the first quarter are expected to continue in the second quarter of 2012, putting increased pressure on operating margins when compared to the same periods in 2011. Weston Foods will continue its efforts to reduce costs through improved efficiencies and ongoing cost reduction initiatives in an effort to achieve full year operating margins in line with those in 2011.

Loblaw is focused on consistent execution to exceed customer expectations with the right assortment, improved in-store experience and competitive prices across all banners. For the full year 2012, Loblaw estimates operating income to be down year-over-year, with more pressure in the first half of the year, as it does not expect its operations to cover the incremental costs related to investments in IT and supply chain and the ongoing investments in its customer proposition.

For the remainder of 2012, George Weston Limited anticipates adjusted basic net earnings per common share(2) to be down year-over-year, primarily due to the impact of the incremental costs at Loblaw.

(1)      This News Release contains forward-looking information. See Forward-Looking Statements for a discussion of material factors that could cause actual results to differ materially from the conclusions, forecasts and projections herein and of the material factors and assumptions that were applied in presenting the conclusions, forecasts and projections presented herein. This News Release must be read in conjunction with George Weston Limited's filings with securities regulators made from time to time, all of which can be found at www.weston.ca and www.sedar.com.
(2)      See non-GAAP financial measures.
(3)      Incremental costs related to investments in IT and supply chain include IT costs, depreciation and amortization and supply chain project costs.

NON-GAAP FINANCIAL MEASURES
In this News Release the Company uses the following non-GAAP financial measures: adjusted operating income and adjusted operating margin, adjusted EBITDA and adjusted EBITDA margin and adjusted basic net earnings per common share. The Company believes these non-GAAP financial measures provide useful information to both management and investors in measuring the financial performance of the Company for the reasons outlined below.

Certain expenses and income that must be recognized under GAAP are not necessarily reflective of the Company's underlying operating performance. For this reason, management uses certain non-GAAP financial measures to exclude the impact of these items when analyzing consolidated and segment underlying operating performance. These non-GAAP financial measures are also helpful in assessing underlying operating performance on a consistent basis.

From time to time, the Company may exclude 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. Loblaw does not report its results of operations on an adjusted basis, however the Company excludes the impact of certain Loblaw items, as applicable, when reporting its consolidated and segment results.

These non-GAAP financial 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 they should not be construed as an alternative to other financial measures determined in accordance with GAAP.


Adjusted Operating Income and Adjusted EBITDA
The Company believes adjusted operating income is useful in assessing the Company's underlying operating performance and in making decisions regarding the ongoing operations of its business. The Company believes adjusted EBITDA is also useful in assessing 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 tables reconcile adjusted operating income and adjusted EBITDA to GAAP net earnings attributable to shareholders of the Company reported for the periods ended as indicated.

        12 Weeks Ended
      Mar. 24, 2012       Mar. 26, 2011 
(unaudited)
($ millions)
  Weston
Foods
    Loblaw     Other(1)      Consolidated     Weston
Foods 
    Loblaw     Other(1)       Consolidated 
Net earnings attributable to shareholders of the Company                   $  124                     $  105
Add impact of the following:                                              
Non-controlling interests                     47                       60
Income taxes                       59                       72
Net interest expense and other financing charges                     44                       66
Operating income (loss) $ 60   $ 237   $  (23)   $  274   $  19   $  301   $  (17)   $  303
Add (deduct) impact of the following:                                              
Restructuring and other charges(2)   1     3           4     6     29           35
Fair value adjustment of commodity derivatives at Weston Foods   (3)                    (3)     16                 16
Share-based compensation net of equity derivatives   1     12           13     16     (7)           9
Foreign currency translation losses               23     23                 17     17
Adjusted operating income $  59   $  252   $       $  311   $  57   $  323       $  380
Depreciation and amortization   14     170           184     14     152                 166
Adjusted EBITDA $  73   $  422   $       $  495   $  71   $  475       $  546
(1)      Operating income in the first quarter of 2012 included a loss of $23 million (2011 - $17 million) related to the effect of foreign currency translation on a portion of the U.S. dollar denominated cash and short term investments held by foreign operations.
(2)     Other charges at Loblaw in the first quarter of 2012 included $3 million (2011 - $21 million) related to changes in Loblaw's distribution network. In the first quarter of 2011, a charge of $8 million was also recorded related to an internal realignment of Loblaw's business centered around its two primary store formats, conventional and discount.

 First quarter year-over-year changes in the following items influenced operating income:

Restructuring and other charges  The Company continuously evaluates strategic and cost reduction initiatives related to its store infrastructure, manufacturing assets, distribution networks and administrative infrastructure with the objective of ensuring a low cost operating structure. Restructuring activities related to these initiatives are ongoing. The details of restructuring and other charges are included in the "Reportable Operating Segments" section of the MD&A included in GWL's Q1 2012 Quarterly Report to Shareholders.

Fair value adjustment of commodity derivatives at Weston Foods  Weston Foods is exposed to commodity price fluctuations primarily as a result of purchases of certain raw materials, fuels and utilities. In accordance with the Company's risk management strategy, Weston Foods enters into commodity derivatives to reduce the impact of price fluctuations in forecasted raw material purchases over a specified period of time. These commodity derivatives are not acquired for trading or speculative purposes. Hedge accounting is not applied to these commodity derivatives and as a result, changes in their fair value, which include realized and unrealized gains and losses related to future purchases of raw materials, are recorded in operating income. In the first quarter of 2012, Weston Foods recorded income of $3 million (2011 - a charge of $16 million) related to the fair value adjustment of exchange traded commodity derivatives. Despite the impact of accounting for these commodity derivatives on the Company's reported results, the derivatives have the economic impact of largely mitigating the associated risks arising from price fluctuations in the underlying commodities during the period that the commodity derivatives are held.

Share-based compensation net of equity derivatives  Both GWL and Glenhuron Bank Limited have entered into equity derivatives to partially hedge their exposure to the impact of increases in the value of GWL and Loblaw common shares on share-based compensation cost. The amount of net share-based compensation cost recorded in operating income is mainly dependent upon changes in the value of GWL and Loblaw common shares and the number and vesting of outstanding restricted share units ("RSU") and performance share units ("PSU") relative to the number of common shares underlying the equity derivatives. The Company assesses stock option plan, RSU plan, PSU plan and equity derivative impacts on a net basis and therefore the impact of stock options is also excluded from operating income when management reviews consolidated and segment operating performance. In the first quarter of 2012, a charge of $13 million (2011 - $9 million) was recorded related to share-based compensation net of equity derivatives.

Foreign currency translation losses  The Company's consolidated financial statements are expressed in Canadian dollars. A portion of the Company's (excluding Loblaw's) net assets are denominated in U.S. dollars and as a result, the Company is exposed to foreign currency translation gains and losses. The impact of foreign currency translation on a portion of the U.S. dollar denominated net assets, primarily cash and short term investments, held by foreign operations is recorded in operating income. In the first quarter of 2012, foreign currency translation losses of $23 million (2011 - $17 million) were recorded in operating income as a result of the appreciation of the Canadian dollar.

Adjusted Basic Net Earnings per Common Share
The Company believes adjusted basic net earnings per common share is 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 basic net earnings per common share to GAAP basic net earnings per common share reported for the periods ended as indicated.

(unaudited)             12 Weeks Ended
($)               Mar. 24, 2012           Mar. 26, 2011
Basic net earnings per common share       $  0.89   $  0.74
(Deduct) add impact of the following(1):                
Fair value adjustment of the forward sale agreement for 9.6 million Loblaw common shares     (0.25)           (0.12)
Restructuring and other charges         0.02           0.13
Fair value adjustment of commodity derivatives at Weston Foods     (0.02)           0.09
Share-based compensation net of equity derivatives         0.07           0.10
Foreign currency translation losses         0.18           0.13
Adjusted basic net earnings per common share       $  0.89   $  1.07
                 
(1)  Net of interest, income taxes and non-controlling interests, as applicable.


In addition to the items described in the "Adjusted Operating Income and Adjusted EBITDA" section above, the first quarter year-over-year change in the following item also influenced basic net earnings per common share:

Fair value adjustment of the forward sale agreement for 9.6 million Loblaw common shares  The fair value adjustment of the forward sale agreement for 9.6 million Loblaw common shares is non-cash and is included in consolidated net interest expense and other financing charges. The adjustment is determined by changes in the value of the underlying Loblaw shares. At maturity, any cash paid under the forward sale agreement could be offset by the sale of the underlying Loblaw common shares. The first quarter year-over-year increase in income related to the fair value adjustment of the forward sale agreement for 9.6 million Loblaw common shares was $0.13 per common share and was attributable to a greater decrease in the market price of Loblaw common shares in the first quarter of 2012 compared to the same period in 2011.

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 and opportunities. These forward-looking statements are typically identified by words such as "anticipate", "expect", "believe", "foresee", "could", "estimate", "goal", "intend", "plan", "seek", "strive", "will", "may" and "should" and similar expressions, as they relate to the Company and its management. In this News Release, forward-looking statements include the Company's continued expectations that for the full year 2012:

For Weston Foods:

  • sales will be in line with 2011;
  • commodity and input costs in the first half of 2012 will be higher than the comparable period in 2011, putting increased pressure on operating margins in the first half of 2012 when compared to the same period in 2011; and
  • efforts will be made to achieve full year operating margins in line with those in 2011.

For Loblaw Companies Limited ("Loblaw"):

  • there will be incremental costs related to investments in information technology ("IT") and supply chain, as well as continued investment in Loblaw's customer proposition; and
  • operating income will be down year-over-year, with more pressure in the first half of the year, as a result of Loblaw's expectation that its operations will not cover the incremental costs related to the investments in IT and supply chain and its customer proposition.

For the Company:

  • adjusted basic net earnings per common share(1) will be down year-over-year.

These forward-looking statements are not historical facts but reflect the Company's current expectations concerning future results and events. They also reflect management's current assumptions regarding the risks and uncertainties referred to below and their respective impact on the Company. In addition, the Company's expectation with regard to Weston Foods' operating margins in 2012 is based in part on the assumptions that there will be no significant unanticipated increase in the price of commodities and other input costs that Weston Foods will not be able to offset through pricing, improved efficiencies and ongoing cost reduction initiatives. The Company's expectation with regard to Loblaw's operating income in 2012 is based in part on the assumptions that Loblaw achieves its plan to increase net retail square footage by 1% and there are no unexpected adverse events or costs related to Loblaw's investments in IT and supply chain. The Company's expectation with regard to adjusted basic net earnings per common share(1) in 2012 is based in part on the assumption that interest rates, income tax rates and the Company's ownership interest in Loblaw will be similar to those in 2011.

These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including, but not limited to:

  • failure to realize sales growth, anticipated cost savings or operating efficiencies from the Company's major initiatives, including investments in the Company's IT systems and the Company's IT systems implementation, or unanticipated results from these initiatives;
  • the inability of the Company's IT infrastructure to support the requirements of the Company's business;
  • unanticipated results associated with the Company's strategic initiatives and the impact of acquisitions or dispositions of businesses on the Company's future revenues and earnings;
  • heightened competition, whether from current competitors or new entrants to the marketplace;
  • changes in economic conditions including the rate of inflation or deflation, changes in interest and foreign currency exchange rates and changes in derivative and commodity prices;
  • public health events;
  • risks associated with product defects, food safety and product handling;
  • failure to achieve desired results in labour negotiations, including the terms of future collective bargaining agreements which could lead to work stoppages;
  • the inability of the Company to manage inventory to minimize the impact of obsolete or excess inventory and to control shrink;
  • failure by the Company to maintain appropriate records to support its compliance with accounting, tax or legal rules, regulations and policies;
  • the availability and increased costs relating to raw materials, ingredients and utilities, including electricity and fuel;
  • failure of the Company's franchised stores to perform as expected;
  • reliance on the performance and retention of third-party service providers including those associated with the Company's supply chain and apparel business;
  • supply and quality control issues with vendors;
  • changes to or failure to comply with laws and regulations affecting the Company and its businesses, including changes to the regulation of generic prescription drug prices and the reduction of reimbursement under public drug benefit plans and the elimination or reduction of professional allowances paid by drug manufacturers;
  • changes in the Company's income, commodity, other tax and regulatory liabilities including changes in tax laws, regulations or future assessments;
  • any requirement of the Company to make contributions to its registered funded defined benefit pension plans or the multi-employer pension plans in which it participates in excess of those currently contemplated;
  • the risk that the Company would experience a financial loss if its counterparties fail to meet their obligations in accordance with the terms and conditions of their contracts with the Company; and
  • the inability of the Company to collect on its credit card receivables.

This is not an exhaustive list of the factors that may affect the Company's forward-looking statements. Other risks and uncertainties not presently known to the Company or that the Company presently believes are not material could also cause actual results or events to differ materially from those expressed in its forward-looking statements. Additional risks and uncertainties are discussed in the Company's materials filed with the Canadian securities regulatory authorities from time to time, including the Enterprise Risks and Risk Management section of the MD&A included in GWL's Q1 2012 Quarterly Report to Shareholders and Section 12, "Enterprise Risks and Risk Management", of MD&A included in GWL's 2011 Annual Report. 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. The Company disclaims any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

(1)   See non-GAAP financial measures.

 

SELECTED FINANCIAL INFORMATION
The following includes selected quarterly financial information which is prepared by management in accordance with International Financial Reporting Standards ("IFRS") and is based on the Company's 2012 First Quarter Report to Shareholders. This financial information does not contain all disclosures required by IFRS, and accordingly, this financial information should be read in conjunction with the Company's 2011 Annual Report and 2012 First Quarter Report to Shareholders available in the Investor Centre section of the Company's website at www.weston.ca.

Condensed Consolidated Statements of Earnings
(unaudited)

      12 Weeks Ended
($ millions except where otherwise indicated)     Mar. 24, 2012     Mar. 26, 2011
Revenue   $  7,224   $  7,148
Operating Expenses              
  Cost of inventories sold       5,422     5,341
  Selling, general and administrative expenses     1,528     1,504
                     6,950     6,845
Operating Income       274     303
Net Interest Expense and Other Financing Charges     44     66
Earnings Before Income Taxes       230     237
Income Taxes       59     72
Net Earnings       171     165
Attributable to:              
  Shareholders of the Company       124     105
  Non-Controlling Interests       47     60
Net Earnings   $  171   $  165
Net Earnings per Common Share ($)
           
Basic   $  0.89   $  0.74
Diluted   $  0.89   $  0.71
               

Condensed Consolidated Balance Sheets
(unaudited)

            As at
($ millions)           Mar. 24, 2012           Mar. 26, 2011           Dec. 31, 2011
ASSETS                  
Current Assets                  
  Cash and cash equivalents   $  1,134   $  754   $  1,372
  Short term investments     2,221     2,323     2,362
  Accounts receivable     549     479     559
  Credit card receivables     1,987     1,887     2,101
  Inventories     2,027     2,020     2,147
  Income taxes recoverable     52     17     37
  Prepaid expenses and other assets     129     102     122
  Assets held for sale     18     68     32
Total Current Assets     8,117     7,650     8,732
Fixed Assets     9,135     8,835     9,172
Investment Properties     95     74     82
Goodwill and Intangible Assets     1,545     1,548     1,555
Deferred Income Taxes     299     288     295
Security Deposits     348     248     367
Franchise Loans Receivable     352     315     331
Other Assets     831     859     789
Total Assets   $  20,722   $  19,817   $  21,323
LIABILITIES                  
Current Liabilities                  
  Bank indebtedness                        $  1   $  3
  Trade and other payables   $  3,263     3,280     3,940
  Provisions     65     99     67
  Short term debt     1,290     1,251     1,280
  Long term debt due within one year     82     352     87
Total Current Liabilities     4,700     4,983     5,377
Provisions     91     94     94
Long Term Debt     6,753     6,164     6,757
Deferred Income Taxes     175     164     160
Other Liabilities     997     751     1,033
Capital Securities     222     221     222
Total Liabilities      12,938     12,377     13,643
EQUITY                  
Share Capital     950     950     950
Contributed Surplus     19     25     24
Retained Earnings     4,584     4,362     4,496
Accumulated Other Comprehensive Loss     (25)     (33)     (11)
Total Equity Attributable to Shareholders of the Company     5,528     5,304     5,459
Non-Controlling Interests     2,256     2,136     2,221
Total Equity     7,784     7,440     7,680
Total Liabilities and Equity   $  20,722   $  19,817   $  21,323
                   

Condensed Consolidated Statements of Cash Flow
(unaudited)

    12 Weeks Ended
($ millions)     Mar. 24, 2012     Mar. 26, 2011
Operating Activities            
  Net earnings     $   171   $   165
  Income taxes     59     72
  Net interest expense and other financing charges     44     66
  Depreciation and amortization     184     166
  Foreign currency translation losses     23     17
  Income taxes paid     (73)     (78)
  Interest received     9     17
  Net decrease in credit card receivables     114     110
  Change in non-cash working capital     (580)     (541)
  Fixed assets and other related impairments     3     4
  Other     8     (4)
Cash Flows used in Operating Activities     (38)     (6)
Investing Activities            
  Fixed asset purchases     (144)     (162)
  Change in short term investments     103     901
  Business acquisitions  - net of cash acquired           (12)
  Proceeds from fixed asset sales     1     5
  Change in franchise investments and other receivables     (17)     (1)
  Change in security deposits     14     183
  Other           (7)
Cash Flows (used in) from Investing Activities     (43)     907
Financing Activities            
  Change in bank indebtedness     (4)     (11)
  Change in short term debt     10     380
  Long term debt - Issued       23     57
                             - Retired       (29)     (858)
  Subsidiary share capital - Issued     2     3
                                           - Retired       (2)      
  Interest paid     (92)     (111)
  Dividends   -  To common shareholders     (46)     (1,046)
                     - To preferred shareholders     (11)     (11)
Cash Flows used in Financing Activities     (149)     (1,597)
Effect of foreign currency exchange rate changes on cash and cash equivalents     (8)     (3)
Change in Cash and Cash Equivalents     (238)     (699)
Cash and Cash Equivalents, Beginning of Period     1,372     1,453
Cash and Cash Equivalents, End of Period     $   1,134   $   754
             

2011 ANNUAL REPORT AND 2012 FIRST QUARTER REPORT TO SHAREHOLDERS
The Company's 2011 Annual Report and 2012 First Quarter Report to Shareholders are available in the Investor Centre section of the Company's website at www.weston.ca and have been filed with SEDAR and will be available at www.sedar.com.

INVESTOR RELATIONS
Shareholders, security analysts and investment professionals should direct their requests to Mr. Geoffrey H. Wilson, Senior Vice President, Financial Control and Investor Relations, at the Company's Executive Office or by e-mail at investor@weston.ca.

Additional financial information has been filed electronically with the Canadian securities regulatory authorities in Canada through SEDAR. This News Release includes selected information on Loblaw Companies Limited, a 63.0%-owned public reporting subsidiary company with shares trading on the Toronto Stock Exchange. For information regarding Loblaw, readers should also refer to the materials filed by Loblaw with the Canadian securities regulatory authorities from time to time. These filings are also maintained at Loblaw's corporate website at www.loblaw.ca.

CONFERENCE CALL AND WEBCAST PRESENTATION
George Weston Limited will host a conference call as well as an audio webcast on Tuesday, May 8, 2012 at 11:00 a.m. (EST). To access via tele-conference, please dial (647) 427-7450. The playback will be available two hours after the event at (416) 849-0833, passcode: 68967311#. To access via audio webcast, please visit the Investor Centre section of www.weston.ca. Pre-registration will be available.

ANNUAL MEETING
The George Weston Limited Annual Meeting of Shareholders will be held on Thursday, May 10, 2012 at 11:00 a.m. (EST) at The Royal Conservatory, Koerner Hall, TELUS Centre for Performance and Learning, 273 Bloor Street West, Toronto, Ontario, Canada. To access via tele-conference, please dial (647) 427-7450. The playback will be available two hours after the event at (416) 849-0833, passcode: 66303839#. To access via audio webcast, please visit the Investor Centre section of www.weston.ca. Pre-registration will be available.

 

 

SOURCE George Weston Limited



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