|By PR Newswire||
|November 20, 2012 08:01 AM EST||
TORONTO, Nov. 20, 2012 /CNW/ - George Weston Limited (TSX: WN) ("GWL") today announced its consolidated unaudited results for the 16 weeks ended October 6, 2012 and announced a quarterly common share dividend increase to $0.38 per share, representing an increase of $0.02 per common share.
George Weston Limited and its subsidiaries are together referred to as
the "Company". The Company's Q3 2012 Quarterly Report to Shareholders,
including the Company's unaudited interim period condensed consolidated
financial statements and Management's Discussion and Analysis ("MD&A")
for the 16 and 40 weeks ended October 6, 2012, is available in the
Investor Centre section of the Company's website at www.weston.ca and has been filed with the System for Electronic Document Analysis and
Retrieval ("SEDAR") and will be available at www.sedar.com.
|CONSOLIDATED RESULTS OF OPERATIONS|
|($ millions except where otherwise indicated)||16 Weeks Ended||40 Weeks Ended|
|For the periods ended as indicated||Oct. 6, 2012||Oct. 8, 2011||Change||Oct. 6, 2012||Oct. 8, 2011||Change|
|Sales||$||10,164||$||10,061||1.0 %||$||25,015||$||24,740||1.1 %|
|Operating income||$||475||$||557||(14.7) %||$||1,072||$||1,257||(14.7) %|
|Adjusted operating income(2)||$||506||$||507||(0.2) %||$||1,181||$||1,327||(11.0) %|
|Adjusted operating margin(2)||5.0 %||5.0 %||4.7 %||5.4 %|
|Net interest expense and other financing charges||$||131||$||94||39.4 %||$||247||$||258||(4.3) %|
|Income taxes||$||101||$||112||(9.8) %||$||215||$||253||(15.0) %|
|Net earnings attributable to shareholders of the Company||$||160||$||264||(39.4) %||$||421||$||526||(20.0) %|
|Net earnings||$||243||$||351||(30.8) %||$||610||$||746||(18.2) %|
|Basic net earnings per common share ($)||$||1.14||$||1.94||(41.2) %||$||3.02||$||3.81||(20.7)%|
|Adjusted basic net earnings per common share(2) ($)||$||1.49||$||1.44||3.5 %||$||3.44||$||3.85||(10.6) %|
|Adjusted EBITDA(2)||$||765||$||743||3.0 %||$||1,816||$||1,901||(4.5) %|
|Adjusted EBITDA margin(2)||7.5 %||7.4 %||7.3 %||7.7 %|
George Weston Limited's third quarter 2012 adjusted basic net earnings per common share(2) were $1.49 compared to $1.44 in the same period in 2011, an increase of $0.05. The increase was primarily attributable to an increase in operating performance at Weston Foods and a decrease in income tax expense, partially offset by a decline in the operating performance of Loblaw Companies Limited ("Loblaw"). The decline in the operating performance of Loblaw was primarily due to an increase in labour and other operating costs and incremental costs related to investments in information technology ("IT") and supply chain(3), partially offset by increases in gross profit and foreign exchange gains and higher operating income from its Financial Services segment. Increased labour costs included incremental investments in Loblaw's customer proposition that were not covered by operations. Incremental investments in shrink also partially offset the increase in gross profit.
The Company's basic net earnings per common share were $1.14 compared to $1.94 in the same period in 2011, a decrease of $0.80. Adjusted basic net earnings per common share(2) increased $0.05 and excluded the year-over-year unfavourable net impact of certain items, primarily the impact of certain foreign currency translation and the fair value adjustment of the forward sale agreement for 9.6 million Loblaw common shares, partially offset by the fair value adjustment of commodity derivatives at Weston Foods.
Subsequent to the end of the third quarter of 2012, Loblaw announced its plan to reduce a number of head office and administrative positions. Focused primarily on management and office positions, the plan is expected to affect approximately 700 jobs. Loblaw expects to take an estimated charge of $60 million in the fourth quarter of 2012, reflecting the anticipated costs of the planned reductions.
The Company uses non-GAAP financial measures. See the "Non-GAAP Financial Measures" section of this News Release for more information on these non-GAAP financial measures.
|(unaudited)||16 Weeks Ended||40 Weeks Ended|
|($ millions)||Oct. 6, 2012||Oct. 8, 2011||Oct. 6, 2012||Oct. 8, 2011|
|Adjusted operating income(2)||$||94||$||87||$||218||$||209|
|Adjusted operating margin(2)||17.4 %||16.0 %||16.0 %||15.3 %|
|Adjusted EBITDA margin(2)||20.7 %||19.3 %||19.3 %||18.6 %|
Weston Foods sales in the third quarter of 2012 decreased by 0.7% to $541 million from $545 million in the same period in 2011. Foreign currency translation positively impacted sales by approximately 0.4%. Excluding this impact, sales decreased 1.1% mainly due to a decrease in volumes of 1.2% compared to the same period in 2011.
Weston Foods operating income in the third quarter of 2012 was $114 million compared to $77 million in the same period in 2011, an increase of $37 million. The increase was primarily due to the favourable impact of the change in the fair value adjustment of commodity derivatives and share-based compensation net of equity derivatives of $35 million and an improvement in adjusted operating income(2) of $7 million as described below.
Weston Foods adjusted operating income(2) was $94 million in the third quarter of 2012 compared to $87 million in the same period in 2011. Weston Foods adjusted operating margin(2) was 17.4% compared to 16.0% in the same period in 2011. Adjusted operating income(2) in the third quarter of 2012 was positively impacted by lower commodity and other input costs and the benefits realized from productivity improvements and other cost reduction initiatives. These benefits were partially offset by lower sales volumes compared to the same period in 2011.
|(unaudited)||16 Weeks Ended||40 Weeks Ended|
|($ millions)||Oct. 6, 2012||Oct. 8, 2011||Oct. 6, 2012||Oct. 8, 2011|
|Adjusted operating income(2)||$||412||$||420||$||963||$||1,118|
|Adjusted operating margin(2)||4.2 %||4.3 %||4.0 %||4.7 %|
|Adjusted EBITDA margin(2)||6.6 %||6.6 %||6.4 %||6.9 %|
In the third quarter of 2012, the Loblaw team executed the plan. Targeted investments in the customer proposition are delivering clear results, the infrastructure program remains on track, and planned efficiencies are beginning to come through. Loblaw is pleased with the fundamental progress to date.
Loblaw sales in the third quarter of 2012 increased by 1.0% to $9,827 million from $9,727 million in the same period in 2011. Retail segment sales increased by 0.7% and same-store sales declined by 0.2% (2011 - increased by 1.3%). Sales growth in food, drugstore and gas bar was modest, sales in general merchandise, excluding apparel, declined moderately and sales in apparel were flat. Loblaw experienced modest average quarterly internal food price inflation during the third quarter of 2012 and moderate average quarterly food price inflation during the third quarter of 2011, which were lower than the average quarterly national food price inflation of 1.8% (2011 - 4.9%) as measured by "The Consumer Price Index for Food Purchased from Stores". In the last twelve months, Loblaw opened 19 corporate and franchise stores and closed eight corporate and franchise stores, resulting in a net increase of 0.3 million square feet, or 0.6%. Loblaw sales in the third quarter of 2012 were also positively impacted by an increase in revenue from its Financial Services segment, which includes President's Choice Bank, a subsidiary of Loblaw. The increase in Financial Services segment revenue was primarily driven by higher PC Telecom revenues and higher interest and interchange fee income when compared to the same period in 2011.
Loblaw operating income in the third quarter of 2012 was $403 million compared to $419 million in the same period in 2011, a decrease of $16 million. The decrease was mainly due to the gain on sale of a portion of a Loblaw property recorded in the third quarter of 2011 of $14 million and a decline in adjusted operating income(2) of $8 million as described below.
Loblaw adjusted operating income(2) was $412 million in the third quarter of 2012 compared to $420 million in the same period in 2011. Adjusted operating margin(2) was 4.2% compared to 4.3% in the same period in 2011. The decreases in adjusted operating income(2) and adjusted operating margin(2) were primarily attributable to an increase in labour and other operating costs and incremental costs related to investments in IT and supply chain(3), partially offset by increases in gross profit and foreign exchange gains and higher operating income from its Financial Services segment. Increased labour costs included an estimated $10 million of incremental investments in Loblaw's customer proposition that were not covered by operations. Incremental investments in shrink also partially offset the increase in gross profit by an estimated $5 million.
NET INTEREST EXPENSE AND OTHER FINANCING CHARGES
In the third quarter of 2012, net interest expense and other financing charges increased by $37 million to $131 million compared to the same period in 2011. Net interest expense and other financing charges are impacted by the fair value adjustment of the forward sale agreement for 9.6 million Loblaw common shares. This fair value adjustment had an unfavourable year-over-year impact in the third quarter of 2012 of $35 million. Excluding this impact, net interest expense and other financing charges increased by $2 million compared to the same period in 2011.
In the third quarter of 2012, income tax expense decreased to $101 million from $112 million, and the effective income tax rate increased to 29.4% from 24.2%, compared to the same period in 2011. The increase in the effective income tax rate was primarily due to non-deductible foreign currency translation losses recorded in the third quarter of 2012 (2011 - non-taxable foreign currency translation gains), partially offset by reductions in the federal and Ontario statutory income tax rates and a recovery on the revaluation of deferred tax assets on the enactment of the revised Ontario corporate income tax rate.
The Company is updating its fiscal 2012 outlook.
For the full year 2012, Weston Foods expects to deliver sales slightly lower than 2011. Weston Foods expects full year adjusted operating margin(2) to be consistent with the margin experienced on a year-to-date basis.
For the fourth quarter of 2012, Loblaw estimates adjusted operating income(2) to be generally in line with the fourth quarter of 2011.
George Weston Limited anticipates full year adjusted basic net earnings per common share(2) to be down year-over-year, as Loblaw expects its full year earnings performance to be down year-over-year.
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 expectations that for the full year 2012:
For Weston Foods:
- sales will be slightly lower than 2011; and
- full year adjusted operating margin(2) will be consistent with the margin experienced on a year-to-date basis.
- there will be incremental costs related to investments in IT and supply chain, as well as incremental investments in Loblaw's customer proposition; and
- fourth quarter 2012 adjusted operating income(2) to be generally in line with the fourth quarter 2011.
For the Company:
- full year adjusted basic net earnings per common share(2) 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' adjusted operating margins(2) 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 adjusted operating income(2) 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(2) 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;
- the inability of the Company to realize anticipated cost savings and efficiencies, including those resulting from restructuring;
- 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 franchise 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 ("MEPP") 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 the Company's 2012 Third Quarter Report to Shareholders and Section 12, "Enterprise Risks and Risk Management", of the MD&A included in the Company'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)||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
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.
|16 Weeks Ended|
|Oct. 6, 2012||Oct. 8, 2011|
|Net earnings attributable to shareholders of the Company||$||160||$||264|
|Add impact of the following:|
|Net interest expense and other financing charges||131||94|
|Operating income (loss)||$||114||$||403||$||(42)||$||475||$||77||$||419||$||61||$||557|
|Add (deduct) impact of the following:|
|Restructuring and other charges(2)||3||3||2||2|
|Fair value adjustment of commodity derivatives|
|at Weston Foods||(20)||(20)||4||4|
|Share-based compensation net of|
|MEPP withdrawal liability incurred|
|by Weston Foods||(1)||(1)|
|Net Weston Foods insurance proceeds||(5)||(5)|
|Gain on sale of a portion of a Loblaw property||(14)||(14)|
|Foreign currency translation loss (gain)||42||42||(61)||(61)|
|Adjusted operating income||$||94||$||412||$||$||506||$||87||$||420||$||$||507|
|Depreciation and amortization||18||241||259||18||218||236|
|(1)||Operating income in the third quarter of 2012 included a loss of $42 million (2011 - gain of $61 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)||Restructuring and other charges included $2 million (2011 - nil) of accelerated depreciation incurred by Weston Foods.|
|40 Weeks Ended|
|Oct. 6, 2012||Oct. 8, 2011|
|Net earnings attributable to shareholders|
|of the Company||$||421||$||526|
|Add impact of the following:|
|Net interest expense and other financing charges||247||258|
|Operating income (loss)||$||186||$||928||$||(42)||$||1,072||$||151||$||1,063||$||43||$||1,257|
|Add (deduct) impact of the following:|
|Restructuring and other charges(2)||9||9||18||8||31||39|
Fair value adjustment of commodity derivatives
at Weston Foods
|Share-based compensation net of equity|
|MEPP withdrawal liability incurred|
|by Weston Foods||34||34|
|Certain prior years' commodity tax matters|
|Net Weston Foods insurance proceeds||(5)||(5)|
|Gain on sale of a portion of a Loblaw property||(14)||(14)|
|Foreign currency translation loss (gain)||42||42||(43)||(43)|
|Adjusted operating income||$||218||$||963||$||$||1,181||$||209||$||1,118||$||$||1,327|
|Depreciation and amortization||45||590||635||45||529||574|
|(1)||Year-to-date operating income included a loss of $42 million (2011 - gain of $43 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.|
Year-to-date other charges at Loblaw included $9 million (2011 - $23
million) related to changes in Loblaw's distribution network. Other
charges in 2011 also included a charge of $8 million related to an
internal realignment of Loblaw's business centered around its two
primary store formats, conventional and discount. Restructuring and
other charges included $3 million (2011 - nil) of accelerated
depreciation incurred by Weston Foods.
The year-over-year changes in the following items influenced operating income in the third quarter of 2012:
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 the Company's Q3 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 third quarter of 2012, Weston Foods recorded income of $20 million (2011 - a charge of $4 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 GWL and Glenhuron Bank Limited have entered into equity derivatives. These derivatives partially hedge 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 its 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 third quarter of 2012, a charge of $7 million (2011 - $24 million) was recorded related to share-based compensation net of equity derivatives.
Multi-employer pension plan withdrawal liability incurred by Weston Foods In the second quarter of 2012, Weston Foods withdrew from one of the United States MEPPs in which it participated and recorded a withdrawal liability. In the third quarter of 2012, the Company paid its withdrawal liability.
Net Weston Foods insurance proceeds During the third quarter of 2011, Weston Foods received net insurance proceeds of $5 million representing insurance proceeds related to the loss of a Quebec facility, net of charges incurred.
Gain on sale of a portion of a Loblaw property During the third quarter of 2011, Loblaw recorded a gain of $14 million related to the sale of a portion of a property in North Vancouver, British Columbia.
Foreign currency translation losses and gains 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 losses and gains. 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 third quarter of 2012, a foreign currency translation loss of $42 million (2011 - gain of $61 million) was recorded in operating income as a result of the appreciation (2011 - depreciation) of the Canadian dollar.
Adjusted Basic Net Earnings per Common Share
The Company believes adjusted basic net earnings per common share is useful in assessing the Company's underlying operating performance and in making decisions regarding the ongoing operations of its business.
The following table reconciles adjusted basic net earnings per common share to GAAP basic net earnings per common share reported for the periods ended as indicated.
|(unaudited)||16 Weeks Ended||40 Weeks Ended|
|($)||Oct. 6, 2012||Oct. 8, 2011||Oct. 6, 2012||Oct. 8, 2011|
|Basic net earnings per common share||$||1.14||$||1.94||$||3.02||$||3.81|
|Add (Deduct) impact of the following(1):|
|Fair value adjustment of the forward sale agreement|
|for 9.6 million Loblaw common shares||0.10||(0.11)||(0.24)||(0.19)|
|Restructuring and other charges||0.02||0.02||0.09||0.16|
|Fair value adjustment of commodity derivatives at Weston Foods||(0.11)||0.03||(0.09)||0.18|
|Share-based compensation net of equity derivatives||0.02||0.12||0.17||0.26|
|MEPP withdrawal liability incurred by Weston Foods||(0.01)||0.16|
|Certain prior years' commodity tax matters at Loblaw||0.05|
|Net Weston Foods insurance proceeds||(0.03)||(0.03)|
|Gain on sale of a portion of a Loblaw property||(0.06)||(0.06)|
|Foreign currency translation loss (gain)||0.33||(0.47)||0.33||(0.33)|
|Adjusted basic net earnings per common share||$||1.49||$||1.44||$||3.44||$||3.85|
|(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 year-over-year changes in the following item also influenced basic net earnings per common share in the third quarter of 2012:
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. In the third quarter of 2012, a charge of $0.10 (2011 - income of $0.11) was recorded in net interest expense and other financing charges as a result of the increase (2011 - decrease) in the market price of Loblaw common shares.
SELECTED FINANCIAL INFORMATION
The following includes selected quarterly financial information which is prepared by management in accordance with International Financial Reporting Standards ("IFRS") and is based on the Company's 2012 Third Quarter Report to Shareholders. This financial information does not contain all disclosures required by IFRS, and accordingly, this financial information should be read in conjunction with the Company's 2011 Annual Report and 2012 Third Quarter Report to Shareholders available in the Investor Centre section of the Company's website at www.weston.ca.
Condensed Consolidated Statements of Earnings
|(unaudited)||16 Weeks Ended||40 Weeks Ended|
|(millions of Canadian dollars except where otherwise indicated)||Oct. 6, 2012||Oct.8, 2011||Oct. 6, 2012||Oct. 8, 2011|
|Cost of inventories sold||7,657||7,640||18,830||18,627|
|Selling, general and administrative expenses||2,032||1,864||5,113||4,856|
|Net Interest Expense and Other Financing Charges||131||94||247||258|
|Earnings Before Income Taxes||344||463||825||999|
|Shareholders of the Company||160||264||421||526|
|Net Earnings per Common Share ($)|
Condensed Consolidated Balance Sheets
|(millions of Canadian dollars)||Oct. 6, 2012||Oct. 8, 2011||Dec. 31, 2011|
|Cash and cash equivalents||$||1,067||$||1,399||$||1,372|
|Short term investments||2,407||2,445||2,362|
|Credit card receivables||2,073||1,911||2,101|
|Income taxes recoverable||49||21||37|
|Prepaid expenses and other assets||116||158||122|
|Assets held for sale||30||30||32|
|Total Current Assets||8,415||8,624||8,732|
|Goodwill and Intangible Assets||1,573||1,554||1,555|
|Deferred Income Taxes||311||307||295|
|Franchise Loans Receivable||365||316||331|
|Trade and other payables||3,498||3,540||3,940|
|Short term debt||1,309||1,270||1,280|
|Long term debt due within one year||219||386||87|
|Total Current Liabilities||5,096||5,284||5,377|
|Long Term Debt||6,637||6,380||6,757|
|Deferred Income Taxes||181||161||160|
|Accumulated Other Comprehensive Loss||(35)||(1)||(11)|
|Total Equity Attributable to Shareholders of the Company||5,661||5,513||5,459|
|Total Liabilities and Equity||$||21,215||$||20,825||$||21,323|
Condensed Consolidated Statements of Cash Flow
|(unaudited)||16 Weeks Ended||40 Weeks Ended|
|(millions of Canadian dollars)||Oct. 6, 2012||Oct. 8, 2011||Oct. 6, 2012||Oct. 8, 2011|
|Net interest expense and other financing charges||131||94||247||258|
|Depreciation and amortization||261||236||638||574|
|Foreign currency translation loss (gain)||42||(61)||42||(43)|
|Income taxes paid||(73)||(72)||(209)||(216)|
|Change in credit card receivables||(15)||63||28||86|
|Change in non-cash working capital||(138)||59||(426)||(387)|
|Fixed assets and other related impairments||4||7||9|
|Gain on disposal of assets||(1)||(12)||(3)||(11)|
|Cash Flows from Operating Activities||547||771||1,172||1,305|
|Fixed asset purchases||(314)||(333)||(712)||(665)|
|Change in short term investments||(439)||(359)||(119)||880|
|Business acquisition - net of cash acquired||(12)|
|Proceeds from fixed asset sales||19||45||35||51|
|Change in franchise investments and other receivables||(4)||(19)||(1)||9|
|Change in security deposits||(7)||13||19||197|
|Goodwill and intangible asset additions||(3)||(1)||(44)||(6)|
|Cash Flows (used in) from Investing Activities||(748)||(654)||(822)||454|
|Change in bank indebtedness||6||(3)||(3)|
|Change in short term debt||10||10||29||399|
|Long term debt||- Issued||12||104||49||320|
|Share capital||- Issued||1|
|Dividends||- To common shareholders||(93)||(93)||(185)||(1,186)|
|- To preferred shareholders||(19)||(19)||(41)||(41)|
|- To minority shareholders||(43)||(43)||(65)||(57)|
|Cash Flows used in Financing Activities||(278)||(177)||(643)||(1,824)|
|Effect of foreign currency exchange rate changes on|
|cash and cash equivalents||(13)||13||(12)||11|
|Change in Cash and Cash Equivalents||(492)||(47)||(305)||(54)|
|Cash and Cash Equivalents, Beginning of Period||1,559||1,446||1,372||1,453|
|Cash and Cash Equivalents, End of Period||$||1,067||$||1,399||$||1,067||$||1,399|
2012 THIRD QUARTER REPORT TO SHAREHOLDERS
The Company's 2011 Annual Report and 2012 Third 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.
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 [email protected].
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, November 20, 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: 43697887#. 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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Sep. 30, 2014 10:30 AM EDT Reads: 1,564
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