Full-year revenue tops
GWL's 2023 Annual Report includes the Company's audited annual consolidated financial statements and Management's Discussion and Analysis ("MD&A") for the fiscal year ended
"
Loblaw Companies Limited ("Loblaw") delivered another quarter of strong operational and financial results as it maintained its focus on retail excellence. Loblaw's value proposition, private label brands, and personalized PC Optimum™ offers continued to resonate with customers seeking quality and value. This resulted in traffic growth and continued market share momentum in food retail. Loblaw recorded an internal food inflation lower than
Choice Properties Real Estate Investment Trust ("
The Company operates through its two reportable operating segments:
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
2023 FOURTH QUARTER HIGHLIGHTS
- Revenue was
$14,700 million , an increase of$558 million , or 3.9%. - Adjusted EBITDA(1) was
$1,694 million , an increase of$104 million , or 6.5%. - Adjusted EBITDA(1) from the publicly traded operating companies(i) was
$1,705 million , an increase of$123 million , or 7.8%. - Net loss available to common shareholders of the Company from continuing operations was
$38 million ($0.30 per common share), an improvement of$76 million ($0.53 per common share), or 66.7%. - Adjusted net earnings available to common shareholders of the Company(1) from continuing operations were
$342 million , a decrease of$27 million , or 7.3%, due to the unfavourable year-over-year impact of the fair value adjustment on other investments and an increase in income tax expense. - Adjusted diluted net earnings per common share(1) from continuing operations were
$2.51 , a decrease of$0.08 per common share, or 3.1%. - Contribution to adjusted net earnings available to common shareholders of the Company(1) from continuing operations from the publicly traded operating companies(i) was
$378 million , an increase of$18 million , or 5.0%. - Repurchased for cancellation 1.1 million common shares at a cost of
$165 million . - GWL Corporate free cash flow(1) was
$413 million , an increase of$212 million , or 105.5%.
2023 ANNUAL HIGHLIGHTS
- Revenue was
$60,124 million , an increase of$3,076 million , or 5.4%. - Adjusted EBITDA(1) was
$6,953 million , an increase of$402 million , or 6.1%. - Adjusted EBITDA(1) from the publicly traded operating companies(i) was
$7,000 million , an increase of$433 million , or 6.6%. - Net earnings available to common shareholders of the Company from continuing operations were
$1,496 million ($10.75 per common share), a decrease of$282 million ($1.45 per common share), or 15.9%. - Adjusted net earnings available to common shareholders of the Company(1) from continuing operations were
$1,467 million , an increase of$35 million , or 2.4%. - Adjusted diluted net earnings per common share(1) from continuing operations were
$10.54 , an increase of$0.73 per common share, or 7.4%. - Contribution to adjusted net earnings available to common shareholders of the Company(1) from continuing operations from the publicly traded operating companies(i) was
$1,614 million , an increase of$88 million , or 5.8%. - Repurchased for cancellation 6.3 million common shares at a cost of
$1,001 million . - Dividends paid to common shareholders of the Company were
$381 million , an increase of$14 million , or 3.8%. - GWL Corporate free cash flow(1) was
$1,283 million , an increase of$390 million , or 43.7%.
(i) | Publicly traded operating companies is the contribution to the Company's financial performance from its controlling interest in |
CONSOLIDATED RESULTS OF OPERATIONS
Unless otherwise indicated, all financial information reflects the Company's results from continuing operations.
($ millions except where otherwise indicated) | Quarters Ended | Years Ended | |||||||||||||||||||
For the periods ended as indicated | $ Change | % Change | $ Change | % Change | |||||||||||||||||
Revenue | $ 14,700 | $ 14,142 | $ 558 | 3.9 % | $ 60,124 | $ 57,048 | $ 3,076 | 5.4 % | |||||||||||||
Operating income | $ 1,076 | $ 1,264 | $ (188) | (14.9) % | $ 4,363 | $ 4,553 | $ (190) | (4.2) % | |||||||||||||
Adjusted EBITDA(1) from: | |||||||||||||||||||||
Loblaw | $ 1,631 | $ 1,491 | $ 140 | 9.4 % | $ 6,639 | $ 6,173 | $ 466 | 7.5 % | |||||||||||||
Choice Proerties | $ 238 | $ 223 | $ 15 | 6.7 % | $ 940 | $ 897 | $ 43 | 4.8 % | |||||||||||||
Effect of consolidation | $ (164) | $ (132) | $ (32) | (24.2) % | $ (579) | $ (503) | $ (76) | (15.1) % | |||||||||||||
Publicly traded operating companies | $ 1,705 | $ 1,582 | $ 123 | 7.8 % | $ 7,000 | $ 6,567 | $ 433 | 6.6 % | |||||||||||||
GWL Corporate | $ (11) | $ 8 | $ (19) | (237.5) % | $ (47) | $ (16) | $ (31) | (193.8) % | |||||||||||||
Adjusted EBITDA(1) | $ 1,694 | $ 1,590 | $ 104 | 6.5 % | $ 6,953 | $ 6,551 | $ 402 | 6.1 % | |||||||||||||
Adjusted EBITDA margin(1) | 11.5 % | 11.2 % | 11.6 % | 11.5 % | |||||||||||||||||
Net (loss) earnings | $ (28) | $ (104) | $ 76 | 73.1 % | $ 1,540 | $ 1,822 | $ (282) | (15.5) % | |||||||||||||
Loblaw(i) | $ 285 | $ 279 | $ 6 | 2.2 % | $ 1,102 | $ 1,007 | $ 95 | 9.4 % | |||||||||||||
$ (445) | $ (579) | $ 134 | 23.1 % | $ 797 | $ 744 | $ 53 | 7.1 % | ||||||||||||||
Effect of consolidation | $ 142 | $ 180 | $ (38) | (21.1) % | $ (248) | $ 127 | $ (375) | (295.3) % | |||||||||||||
Publicly traded operating companies | $ (18) | $ (120) | $ 102 | 85.0 % | $ 1,651 | $ 1,878 | $ (227) | (12.1) % | |||||||||||||
GWL Corporate | $ (20) | $ 6 | $ (26) | (433.3) % | $ (155) | $ (100) | $ (55) | (55.0) % | |||||||||||||
Net (loss) earnings available | $ (38) | $ (114) | $ 76 | 66.7 % | $ 1,496 | $ 1,778 | $ (282) | (15.9) % | |||||||||||||
Discontinued operations(ii) | $ — | $ — | $ — | — % | $ — | $ (6) | $ 6 | 100.0 % | |||||||||||||
Net (loss) earnings available | $ (38) | $ (114) | $ 76 | 66.7 % | $ 1,496 | $ 1,772 | $ (276) | (15.6) % | |||||||||||||
Diluted net (loss) earnings | $ (0.30) | $ (0.83) | $ 0.53 | 63.9 % | $ 10.75 | $ 12.16 | $ (1.41) | (11.6) % | |||||||||||||
Continuing operations | $ (0.30) | $ (0.83) | $ 0.53 | 63.9 % | $ 10.75 | $ 12.20 | $ (1.45) | (11.9) % | |||||||||||||
Discontinued operations(ii) | $ — | $ — | $ — | — % | $ — | $ (0.04) | $ 0.04 | 100.0 % | |||||||||||||
Loblaw(i) | $ 332 | $ 304 | $ 28 | 9.2 % | $ 1,309 | $ 1,194 | $ 115 | 9.6 % | |||||||||||||
$ 103 | $ 92 | $ 11 | 12.0 % | $ 409 | $ 384 | $ 25 | 6.5 % | ||||||||||||||
Effect of consolidation | $ (57) | $ (36) | $ (21) | (58.3) % | $ (104) | $ (52) | $ (52) | (100.0) % | |||||||||||||
Publicly traded operating companies | $ 378 | $ 360 | $ 18 | 5.0 % | $ 1,614 | $ 1,526 | $ 88 | 5.8 % | |||||||||||||
GWL Corporate | $ (36) | $ 9 | $ (45) | (500.0) % | $ (147) | $ (94) | $ (53) | (56.4) % | |||||||||||||
Adjusted net earnings available | $ 342 | $ 369 | $ (27) | (7.3) % | $ 1,467 | $ 1,432 | $ 35 | 2.4 % | |||||||||||||
Adjusted diluted net earnings | $ 2.51 | $ 2.59 | $ (0.08) | (3.1) % | $ 10.54 | $ 9.81 | $ 0.73 | 7.4 % | |||||||||||||
(i) | Contribution from Loblaw, net of non-controlling interests. |
(ii) | In 2021, the Company completed the sale of the |
Net loss available to common shareholders of the Company from continuing operations was $38 million (
The adjusting items in the fourth quarter of 2023 had a favourable year-over-year net impact on net loss available to common shareholders of the Company from continuing operations totaling $103 million (
- the favourable year-over-year impact of the fair value adjustment of the Trust Unit liability of
$280 million ($1.86 per common share) as a result of the increase inChoice Properties' unit price; and - the favourable year-over-year impact of the fair value adjustment on
Choice Properties' investment in real estate securities of Allied Properties Real Estate Investment Trust ("Allied") of$43 million ($0.32 per common share) as a result of the increase in Allied's unit price;
partially offset by,
- the unfavourable year-over-year impact of the fair value adjustment on investment properties of
$218 million ($1.55 per common share) driven byChoice Properties , net of the effect of consolidation.
Adjusted net earnings available to common shareholders of the Company(1) from continuing operations in the fourth quarter of 2023 were $342 million, a decrease of $27 million, or 7.3%, compared to the same period in 2022. The decrease was driven by:
- the unfavourable year-over-year impact of
$45 million at GWL Corporate primarily due to the unfavourable year-over-year impact of the fair value adjustment on other investments and an increase in income tax expense as a result of GWL's participation in Loblaw's Normal Course Issuer Bid ("NCIB") program and lapping certain recoveries realized for prior taxation periods;
partially offset by,
- the favourable year-over-year impact of
$18 million from the contribution of the publicly traded operating companies.
Adjusted diluted net earnings per common share(1) from continuing operations were
CONSOLIDATED OTHER BUSINESS MATTERS
The Company completed the following GWL Corporate financing activities:
NCIB – Purchased and Cancelled Shares In the fourth quarter of 2023, the Company purchased and cancelled 1.1 million shares (2022 – 1.7 million shares) for aggregate consideration of
In the fourth quarter of 2023, 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 2023 Annual Report for more information.
Participation in Loblaw's NCIB The Company participates in Loblaw's NCIB in order to maintain its proportionate percentage ownership interest. In the fourth quarter of 2023, GWL received proceeds of $238 million (2022 – $49 million) from the sale of Loblaw common shares.
REPORTABLE OPERATING SEGMENTS
The Company operates through its two reportable operating segments:
Loblaw has two reportable operating segments, retail and financial services. Loblaw's retail segment consists primarily of food retail and drug retail. Loblaw provides Canadians with grocery, pharmacy and healthcare services, health and beauty products, apparel, general merchandise and financial services.
Excerpt of Segment Information
The accounting policies of the reportable operating segments are the same as those described in the Company's 2023 audited annual consolidated financial statements. The Company measures each reportable operating segment's performance based on adjusted EBITDA(1). No reportable operating segment is reliant on any single external customer.
Quarters Ended | ||||||||||||||||
($ millions) | Loblaw | Choice Properties | Total | Effect of | GWL | Total | Loblaw | Choice Properties | Total | Effect of | GWL | Total | ||||
Revenue | $ 355 | $ — | $ 315 | $ (180) | $ — | |||||||||||
Operating income | $ 941 | $ 191 | $ 1,132 | $ (45) | $ (11) | $ 1,076 | $ 869 | $ 404 | $ 1,273 | $ (16) | $ 7 | $ 1,264 | ||||
Net interest expense | 195 | 636 | 831 | (171) | — | 660 | 172 | 983 | 1,155 | (238) | (1) | 916 | ||||
Earnings (loss) | $ 746 | $ (445) | $ 301 | $ 126 | $ (11) | $ 416 | $ 697 | $ (579) | $ 118 | $ 222 | $ 8 | $ 348 | ||||
Operating income | $ 941 | $ 191 | $ 1,132 | $ (45) | $ (11) | $ 1,076 | $ 869 | $ 404 | $ 1,273 | $ (16) | $ 7 | $ 1,264 | ||||
Depreciation and | 680 | — | 680 | 667 | 1 | 668 | ||||||||||
Adjusting items(i) | 10 | 47 | 57 | (45) | (182) | (227) | ||||||||||
Adjusted EBITDA(i) | $ 1,631 | $ 238 | $ 1,869 | $ 1,491 | $ 223 | $ 1,714 | ||||||||||
(i) | Certain items are excluded from operating income to derive adjusted EBITDA(1). |
Years Ended | ||||||||||||||||
($ millions) | Loblaw | Choice Properties | Total | Effect of | GWL | Total | Loblaw | Choice Properties | Total | Effect of | GWL | Total | ||||
Revenue | $ 1,335 | $ — | $ 1,265 | $ (721) | $ — | |||||||||||
Operating income | $ 3,696 | $ 1,001 | $ 4,697 | $ (50) | $ 4,363 | $ 3,334 | $ 1,083 | $ 4,417 | $ 159 | $ (23) | $ 4,553 | |||||
Net interest | 803 | 204 | 1,007 | (116) | (2) | 889 | 683 | 339 | 1,022 | (119) | 10 | 913 | ||||
Earnings before | $ 2,893 | $ 797 | $ 3,690 | $ (48) | $ 3,474 | $ 2,651 | $ 744 | $ 3,395 | $ 278 | $ (33) | $ 3,640 | |||||
Operating income | $ 3,696 | $ 1,001 | $ 4,697 | $ (50) | $ 4,363 | $ 3,334 | $ 1,083 | $ 4,417 | $ 159 | $ (23) | $ 4,553 | |||||
Depreciation and | 2,906 | 3 | 2,909 | 2,795 | 3 | 2,798 | ||||||||||
Adjusting items(i) | 37 | (64) | (27) | 44 | (189) | (145) | ||||||||||
Adjusted EBITDA(i) | $ 6,639 | $ 940 | $ 7,579 | $ 6,173 | $ 897 | $ 7,070 | ||||||||||
(i) Certain items are excluded from operating income to derive adjusted EBITDA(1). |
Effect of consolidation includes the following items:
Quarters Ended | ||||||||||
($ millions) | Revenue | Operating Income | Net Interest Expense and Other Financing Charges | Revenue | Operating Income | Net Interest Expense and Other Financing Charges | ||||
Elimination of intercompany rental revenue | $ (190) | $ (20) | $ — | $ (184) | $ (27) | $ — | ||||
Elimination of internal lease arrangements | 4 | (9) | (29) | 4 | (15) | (25) | ||||
Asset impairments, net of recoveries | — | (7) | — | — | 4 | — | ||||
Elimination of intersegment real estate transactions | — | (34) | — | — | — | — | ||||
Recognition of depreciation on | — | (15) | — | — | (2) | — | ||||
Fair value adjustment on investment properties | — | 40 | 1 | — | 24 | 6 | ||||
Unit distributions on Exchangeable Units paid by | — | — | (74) | — | — | (73) | ||||
Unit distributions on Trust Units paid by Choice | — | — | 51 | — | — | 51 | ||||
Fair value adjustment on | — | — | (502) | — | — | (859) | ||||
Fair value adjustment on Trust Unit liability | — | — | 382 | — | — | 662 | ||||
Total | $ (186) | $ (45) | $ (171) | $ (180) | $ (16) | $ (238) | ||||
Years Ended | ||||||||||
($ millions) | Revenue | Operating Income | Net Interest Expense and Other Financing Charges | Revenue | Operating Income | Net Interest Expense and Other Financing Charges | ||||
Elimination of intercompany rental revenue | $ (752) | $ (19) | $ — | $ (733) | $ 2 | $ — | ||||
Elimination of internal lease arrangements | 12 | (97) | (120) | 12 | (97) | (104) | ||||
Asset impairments, net of recoveries | — | (7) | — | — | 4 | — | ||||
Elimination of intersegment real estate transactions | — | (39) | — | — | (4) | — | ||||
Recognition of depreciation on | — | (29) | — | — | (13) | — | ||||
Fair value adjustment on investment properties | — | (93) | 3 | — | 286 | 1 | ||||
Reversal of Loblaw gain on the sale of disposition of | — | — | — | — | (19) | — | ||||
Unit distributions on Exchangeable Units paid by | — | — | (296) | — | — | (293) | ||||
Unit distributions on Trust Units paid by Choice | — | — | 207 | — | — | 205 | ||||
Fair value adjustment on | — | — | 321 | — | — | 170 | ||||
Fair value adjustment on Trust Unit liability | — | — | (231) | — | — | (98) | ||||
Total | $ (740) | $ (284) | $ (116) | $ (721) | $ 159 | $ (119) | ||||
Loblaw Operating Results
($ millions except where otherwise indicated) For the periods ended as indicated | ||||||||||||||||||||
Quarters Ended | Years Ended | |||||||||||||||||||
$ Change | % Change | $ Change | % Change | |||||||||||||||||
Revenue | $ 14,531 | $ 14,007 | $ 524 | 3.7 % | $ 56,504 | $ 3,025 | 5.4 % | |||||||||||||
Operating income | $ 941 | $ 869 | $ 72 | 8.3 % | $ 3,696 | $ 3,334 | $ 362 | 10.9 % | ||||||||||||
Adjusted EBITDA(1) | $ 1,631 | $ 1,491 | $ 140 | 9.4 % | $ 6,639 | $ 6,173 | $ 466 | 7.5 % | ||||||||||||
Adjusted EBITDA margin(1) | 11.2 % | 10.6 % | 11.2 % | 10.9 % | ||||||||||||||||
Depreciation and amortization | $ 680 | $ 667 | $ 13 | 1.9 % | $ 2,906 | $ 2,795 | $ 111 | 4.0 % | ||||||||||||
Revenue Loblaw revenue in the fourth quarter of 2023 was
Retail sales in the fourth quarter of 2023 were
- food retail sales were
$9,774 million (2022 –$9,514 million ) and food retail same-store sales grew by 2.0% (2022 – 8.4%) for the quarter;- the Consumer Price Index ("CPI") as measured by The Consumer Price Index for Food Purchased from Stores was 4.9% (2022 – 11.2%) which was higher than Loblaw's internal food inflation; and
- food retail traffic increased and basket size decreased.
- drug retail sales were
$4,383 million (2022 –$4,180 million ) and drug retail same-store sales grew by 4.6% (2022 – 8.7%) for the quarter;- pharmacy and healthcare services same-store sales growth was 8.0% (2022 – 5.4%). On a same-store basis, the number of prescriptions dispensed increased by 3.4% (2022 – 2.2%) and the average prescription value increased by 3.4% (2022 – 2.3%); and
- front store same-store sales growth was 1.7% (2022 – 11.5%).
Financial services revenue in the fourth quarter of 2023 was
Operating Income Loblaw operating income in the fourth quarter of 2023 was $941 million, an increase of $72 million, or 8.3%, compared to the same period in 2022.
Adjusted EBITDA(1) Loblaw adjusted EBITDA(1) in the fourth quarter of 2023 was
Retail adjusted EBITDA(1) in the fourth quarter of 2023 increased by $114 million, driven by an increase in retail gross profit of $221 million, partially offset by an increase in retail selling, general and administrative expenses ("SG&A") of $107 million.
- Retail gross profit percentage in the fourth quarter of 2023 was 31.1%, which was in line with the full-year gross profit percentage of 31.0%, and was higher by 50 basis points compared to the same period in 2022 (2022 – decreased by 30 basis points). The increase was driven by lapping of high-intensity prior year promotional activities and the scaling of the external freight business, partially offset by higher shrink.
- Retail SG&A as a percentage of sales was 20.3%, an increase of 10 basis points compared to the same period in 2022, driven by the year-over-year impact of labour costs including expenses related to the ratification of union labour agreements, partially offset by operating leverage from higher sales.
Financial services adjusted EBITDA(1) increased by
Depreciation and Amortization Loblaw depreciation and amortization in the fourth quarter of 2023 was
Loblaw Other Business Matters
Network Optimization During the fourth quarter of 2023 and on a full-year basis, Loblaw recorded charges of $25 million and $70 million associated with network optimization, respectively. Included in the charges was accelerated depreciation of $7 million and $24 million, as described above, and other charges. Loblaw finalized plans for 2024 that are expected to result in the conversion of 30 Provigo stores to Maxi discount stores in
Choice Properties Operating Results
($ millions except where otherwise indicated) For the periods ended as indicated | ||||||||||||||||||||
Quarters Ended | Years Ended | |||||||||||||||||||
$ Change | % Change | $ Change | % Change | |||||||||||||||||
Revenue | $ 355 | $ 315 | $ 40 | 12.7 % | $ 1,335 | $ 1,265 | $ 70 | 5.5 % | ||||||||||||
Net interest expense and other financing charges | $ 636 | $ 983 | $ (347) | (35.3) % | $ 204 | $ 339 | $ (135) | (39.8) % | ||||||||||||
Net (loss) income | $ (445) | $ (579) | $ 134 | 23.1 % | $ 797 | $ 744 | $ 53 | 7.1 % | ||||||||||||
Funds from Operations(1) | $ 185 | $ 174 | $ 11 | 6.3 % | $ 726 | $ 698 | $ 28 | 4.0 % | ||||||||||||
Revenue
Excluding the impact of the sale of residential inventory, revenue in the fourth quarter of 2023 was
- higher rental rates primarily in the retail and industrial portfolios;
- higher capital and operating recoveries; and
- acquisitions and completed developments.
Net Interest Expense and Other Financing Charges
- the favourable year-over-year change of the fair value adjustment on the Exchangeable Units of
$357 million as a result of the increase inChoice Properties' unit price in the quarter;
partially offset by,
- the unfavourable year-over-year change of the fair value adjustment on the financial real estate assets; and
- an increase in interest expense on long-term debt due to higher interest rates and a higher average debt balance compared to the same period in 2022.
Net Loss
- lower net interest expense and other financing charges as described above;
- the favourable year-over-year change of the fair value adjustment of investment in real estate securities of
$47 million as a result of an increase in Allied's unit price; and - an increase in revenues as described above;
partially offset by,
- the unfavourable year-over-year change of the fair value adjustment of investment properties, including those held within equity accounted joint ventures, of
$276 million as a result of a fair value loss recognized in the fourth quarter of 2023 compared to a fair value gain in the same period in 2022.
Funds from Operations(1) Funds from Operations(1) in the fourth quarter of 2023 increased by
Choice Properties Other Business Matters
Subsequent Events On
On
OUTLOOK(2)
For 2024, the Company expects adjusted net earnings(1) to increase due to the results from its operating segments, and to use excess cash to repurchase shares.
Loblaw Loblaw will execute on retail excellence while advancing its growth initiatives with the goal of continuing to deliver consistent operational and financial results in 2024. Loblaw's businesses remain well positioned to meet the everyday needs of Canadians.
For the full-year 2024, Loblaw expects:
- its retail business to grow earnings faster than sales;
- adjusted net earnings per common share(1) growth in the high single-digits;
- to continue investing in its store network and distribution centres by investing a net amount of
$1.8 billion in capital expenditures, which reflects gross capital investments of approximately$2.2 billion , net of approximately$400 million of proceeds from property disposals; and - to return capital to shareholders by allocating a significant portion of free cash flow to share repurchases.
- stable occupancy across the portfolio, resulting in 2.5% - 3.0% year-over-year growth in Same-Asset NOI, cash basis(3);
- annual FFO(1) per unit diluted(3) in a range of
$1.02 to$1.03 , reflecting 2.0% - 3.0% year-over-year growth; and - strong leverage metrics, targeting Adjusted Debt to EBITDAFV(3) slightly below 7.5x.
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 including further healthcare reform, future liquidity, planned capital investments, and the status and impact of IT systems implementations. 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" sections of the MD&A in the Company's 2023 Annual Report and the Company's Annual Information Form for the year ended
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.
DECLARATION OF QUARTERLY DIVIDENDS
Subsequent to the end of the fourth quarter of 2023, 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 | |
Preferred Shares, Series I | |
Preferred Shares, Series III | |
Preferred Shares, Series IV | |
Preferred Shares, Series V |
SELECTED FINANCIAL INFORMATION
The following includes selected quarterly financial information which is prepared by management in accordance with International Financial Reporting Standards as issued by the
Consolidated Statements of Earnings
(millions of Canadian dollars except where otherwise indicated) | ||||||||||||
For the periods ended as indicated | (12 weeks) | (12 weeks) | (52 weeks) | (52 weeks) | ||||||||
Revenue | $ 14,700 | $ 14,142 | $ 60,124 | $ 57,048 | ||||||||
Operating Expenses | ||||||||||||
Cost of inventories sold | 9,879 | 9,587 | 40,513 | 38,528 | ||||||||
Selling, general and administrative expenses | 3,745 | 3,291 | 15,248 | 13,967 | ||||||||
13,624 | 12,878 | 55,761 | 52,495 | |||||||||
Operating Income | 1,076 | 1,264 | 4,363 | 4,553 | ||||||||
Net Interest Expense and Other Financing Charges | 660 | 916 | 889 | 913 | ||||||||
Earnings Before Income Taxes | 416 | 348 | 3,474 | 3,640 | ||||||||
Income Taxes | 169 | 213 | 849 | 831 | ||||||||
Net Earnings from Continuing Operations | 247 | 135 | 2,625 | 2,809 | ||||||||
Net Loss from Discontinued Operations | — | — | — | (6) | ||||||||
Net Earnings | 247 | 135 | 2,625 | 2,803 | ||||||||
Attributable to: | ||||||||||||
Shareholders of the Company | (28) | (104) | 1,540 | 1,816 | ||||||||
Non-Controlling Interests | 275 | 239 | 1,085 | 987 | ||||||||
Net Earnings | $ 247 | $ 135 | $ 2,625 | $ 2,803 | ||||||||
Net (Loss) Earnings per Common Share - Basic ($) | $ (0.28) | $ (0.81) | $ 10.88 | $ 12.29 | ||||||||
Continuing Operations | $ (0.28) | $ (0.81) | $ 10.88 | $ 12.33 | ||||||||
Discontinued Operations | $ — | $ — | $ — | $ (0.04) | ||||||||
Net (Loss) Earnings per Common Share - Diluted ($) | $ (0.30) | $ (0.83) | $ 10.75 | $ 12.16 | ||||||||
Continuing Operations | $ (0.30) | $ (0.83) | $ 10.75 | $ 12.20 | ||||||||
Discontinued Operations | $ — | $ — | $ — | $ (0.04) | ||||||||
Consolidated Balance Sheets
As at | ||||||
(millions of Canadian dollars) | 2023 | 2022 | ||||
ASSETS | ||||||
Current Assets | ||||||
Cash and cash equivalents | $ 2,451 | $ 2,313 | ||||
Short-term investments | 472 | 503 | ||||
Accounts receivable | 1,377 | 1,273 | ||||
Credit card receivables | 4,132 | 3,954 | ||||
Inventories | 5,829 | 5,855 | ||||
Prepaid expenses and other assets | 629 | 675 | ||||
Assets held for sale | 46 | 80 | ||||
Total Current Assets | 14,936 | 14,653 | ||||
Fixed Assets | 11,857 | 11,130 | ||||
Right-of-Use Assets | 4,408 | 4,208 | ||||
Investment Properties | 5,366 | 5,144 | ||||
884 | 996 | |||||
Intangible Assets | 6,009 | 6,527 | ||||
4,879 | 4,853 | |||||
Deferred Income Taxes | 138 | 98 | ||||
Security Deposits | 38 | 36 | ||||
Other Assets | 1,255 | 1,313 | ||||
Total Assets | $ 49,770 | $ 48,958 | ||||
LIABILITIES | ||||||
Current Liabilities | ||||||
Bank indebtedness | $ 13 | $ 8 | ||||
Trade payables and other liabilities | 6,887 | 6,730 | ||||
Loyalty liability | 123 | 180 | ||||
Provisions | 121 | 116 | ||||
Income taxes payable | 307 | 246 | ||||
Demand deposits from customers | 166 | 125 | ||||
Short-term debt | 850 | 700 | ||||
Long-term debt due within one year | 2,355 | 1,383 | ||||
Lease liabilities due within one year | 880 | 835 | ||||
Associate interest | 370 | 434 | ||||
Total Current Liabilities | 12,072 | 10,757 | ||||
Provisions | 96 | 84 | ||||
Long-Term Debt | 12,641 | 13,401 | ||||
Lease Liabilities | 4,563 | 4,323 | ||||
Trust Unit Liability | 3,881 | 4,112 | ||||
Deferred Income Taxes | 1,870 | 2,007 | ||||
Other Liabilities | 1,184 | 1,094 | ||||
Total Liabilities | 36,307 | 35,778 | ||||
EQUITY | ||||||
Share Capital | 3,325 | 3,433 | ||||
Retained Earnings | 5,421 | 5,075 | ||||
Contributed Surplus | (2,275) | (1,864) | ||||
Accumulated Other Comprehensive Income | 204 | 197 | ||||
Total Equity Attributable to Shareholders of the Company | 6,675 | 6,841 | ||||
Non-Controlling Interests | 6,788 | 6,339 | ||||
Total Equity | 13,463 | 13,180 | ||||
Total Liabilities and Equity | $ 49,770 | $ 48,958 | ||||
Consolidated Statements of Cash Flows
(millions of Canadian dollars) For the periods ended as indicated | ||||||||||||
(12 weeks) | (12 weeks) | (52 weeks) | (52 weeks) | |||||||||
Operating Activities | ||||||||||||
Net earnings | $ 247 | $ 135 | $ 2,625 | $ 2,803 | ||||||||
Add (deduct): | ||||||||||||
Net interest expense and other financing charges | 660 | 916 | 889 | 913 | ||||||||
Income taxes | 169 | 213 | 849 | 831 | ||||||||
Depreciation and amortization | 602 | 577 | 2,532 | 2,407 | ||||||||
Loss on sale of discontinued operations, after income taxes | — | — | — | 6 | ||||||||
Asset impairments, net of recoveries | 23 | 22 | 24 | 30 | ||||||||
Adjustment to fair value of investment properties and assets held for sale | 43 | (232) | (26) | (734) | ||||||||
Adjustment to fair value of investment in real estate securities | (27) | 20 | 64 | 248 | ||||||||
Change in allowance for credit card receivables | 25 | 4 | 50 | 1 | ||||||||
Change in provisions | 5 | (35) | 17 | (9) | ||||||||
Change in gross credit card receivables | (211) | (279) | (228) | (512) | ||||||||
Change in non-cash working capital | 61 | 84 | (75) | (577) | ||||||||
Income taxes paid | (152) | (156) | (1,028) | (592) | ||||||||
Interest received | 16 | 12 | 73 | 66 | ||||||||
Other | 52 | (15) | 85 | 31 | ||||||||
Cash Flows from Operating Activities | 1,513 | 1,266 | 5,851 | 4,912 | ||||||||
Investing Activities | ||||||||||||
Fixed asset and investment properties purchases | (619) | (681) | (1,935) | (1,446) | ||||||||
Intangible asset additions | (91) | (111) | (407) | (419) | ||||||||
Acquisition of Lifemark, net of cash acquired | — | — | — | (813) | ||||||||
Proceeds from disposal of assets | 193 | 69 | 409 | 239 | ||||||||
Lease payments received from finance leases | 3 | 2 | 13 | 12 | ||||||||
Disposal (purchases) of short-term investments | 205 | (37) | 31 | 376 | ||||||||
Repayments (advances) of mortgages, loans and notes receivable | 187 | 22 | 229 | (134) | ||||||||
Decrease (increase) in security deposits | 1 | 250 | (2) | 41 | ||||||||
(Purchases) disposal of long-term securities | (31) | (70) | 45 | (180) | ||||||||
Other | 12 | 3 | (49) | (256) | ||||||||
Cash Flows used in Investing Activities | (140) | (553) | (1,666) | (2,580) | ||||||||
Financing Activities | ||||||||||||
(Decrease) increase in bank indebtedness | (9) | (8) | 5 | (44) | ||||||||
Increase in short-term debt | 200 | 100 | 150 | 250 | ||||||||
Increase in demand deposits from customers | 19 | 16 | 41 | 50 | ||||||||
Long-term debt – Issued | 163 | 380 | 1,939 | 2,609 | ||||||||
– Repayments | (184) | (258) | (1,714) | (1,817) | ||||||||
Interest paid | (212) | (195) | (918) | (818) | ||||||||
Cash rent paid on lease liabilities – Interest | (49) | (44) | (207) | (185) | ||||||||
Cash rent paid on lease liabilities – Principal | (111) | (97) | (654) | (576) | ||||||||
Share capital – Issued | — | 13 | 7 | 36 | ||||||||
– Purchased and held in trusts | — | — | (7) | (14) | ||||||||
– Purchased and cancelled | (165) | (276) | (1,001) | (994) | ||||||||
Loblaw common share capital – Issued | 22 | 16 | 61 | 88 | ||||||||
– Purchased and held in trusts | — | (75) | (72) | (138) | ||||||||
– Purchased and cancelled | (256) | (79) | (882) | (700) | ||||||||
Dividends – To common shareholders | (8) | (8) | (381) | (367) | ||||||||
– To preferred shareholders | (3) | (3) | (44) | (44) | ||||||||
– To non-controlling interests | (69) | (64) | (272) | (256) | ||||||||
Proceeds from financial liabilities | 18 | — | 47 | 8 | ||||||||
Other | (48) | (9) | (147) | (94) | ||||||||
Cash Flows used in Financing Activities | (692) | (591) | (4,049) | (3,006) | ||||||||
Effect of foreign currency exchange rate changes on | 3 | 3 | 2 | 3 | ||||||||
Change in Cash and Cash Equivalents | 684 | 125 | 138 | (671) | ||||||||
Cash and Cash Equivalents, Beginning of Period | 1,767 | 2,188 | 2,313 | 2,984 | ||||||||
Cash and Cash Equivalents, End of Period | $ 2,451 | $ 2,313 | $ 2,451 | $ 2,313 | ||||||||
(i) | Certain comparative figures have been restated to conform with current year presentation. |
Basic and Diluted Net Earnings per Common Share
(millions of Canadian dollars except where otherwise indicated) | ||||||||||||
For the periods ended as indicated | (12 weeks) | (12 weeks) | (52 weeks) | (52 weeks) | ||||||||
Net (loss) earnings attributable to shareholders | $ (28) | $ (104) | $ 1,540 | $ 1,816 | ||||||||
Less: Discontinued Operations | — | — | — | (6) | ||||||||
Net (loss) earnings from continuing operations | $ (28) | $ (104) | $ 1,540 | $ 1,822 | ||||||||
Prescribed dividends on preferred shares in share capital | (10) | (10) | (44) | (44) | ||||||||
Net (loss) earnings from continuing operations available to | $ (38) | $ (114) | $ 1,496 | $ 1,778 | ||||||||
Reduction in net earnings due to dilution at Loblaw | (3) | (3) | (12) | (11) | ||||||||
Net (loss) earnings from continuing operations available to | $ (41) | $ (117) | $ 1,484 | $ 1,767 | ||||||||
Weighted average common shares outstanding (in millions) | 134.8 | 141.3 | 137.5 | 144.2 | ||||||||
Dilutive effect of equity-based compensation(i)(in millions) | — | — | 0.5 | 0.6 | ||||||||
Diluted weighted average common shares outstanding | 134.8 | 141.3 | 138.0 | 144.8 | ||||||||
Net (loss) earnings per common share - Basic ($) | ||||||||||||
Continuing Operations | $ (0.28) | $ (0.81) | $ 10.88 | $ 12.33 | ||||||||
Discontinued Operations | $ — | $ — | $ — | $ (0.04) | ||||||||
Net (loss) earnings per common share - Diluted ($) | ||||||||||||
Continuing Operations | $ (0.30) | $ (0.83) | $ 10.75 | $ 12.20 | ||||||||
Discontinued Operations | $ — | $ — | $ — | $ (0.04) | ||||||||
(i) | In the fourth quarter of 2023 and year-to-date, nominal (2022 – nominal) potentially dilutive instruments were excluded from the computation of diluted net earnings (loss) per common share as they were anti-dilutive. |
2023 FOURTH QUARTER REPORT
The Company's annual audited consolidated financial statements and MD&A for the year ended
MODERN SLAVERY ACT REPORT
In compliance with the Fighting Against Forced Labour and Child Labour in Supply Chains Act (referred to as
INVESTOR RELATIONS
Shareholders, security analysts and investment professionals should direct their requests to
Additional financial information has been filed electronically with various securities regulators in
Ce rapport est disponible en français.
Endnotes | |
(1) | See the "Non-GAAP and Other Financial Measures" section in Appendix 1 of this News Release, which includes the reconciliation of such non-GAAP and other financial 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 2023 Annual 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.sedarplus.ca. |
(3) | For more information on |
APPENDIX 1: NON-GAAP AND OTHER FINANCIAL MEASURES
The Company uses non-GAAP and other 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 and other financial measures of
Management uses these and other non-GAAP and other 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 adjusts for these 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.
Quarters Ended | ||||||||||||||
($ millions) | Loblaw | Choice | Effect of | GWL | Consolidated | Loblaw | Choice | Effect of | GWL | Consolidated | ||||
Net loss attributable to shareholders | $ (28) | $ (104) | ||||||||||||
Add impact of the following: | ||||||||||||||
Non-controlling interests | 275 | 239 | ||||||||||||
Income taxes | 169 | 213 | ||||||||||||
Net interest expense and other | 660 | 916 | ||||||||||||
Operating income | $ 941 | $ 191 | $ (45) | $ (11) | $ 1,076 | $ 869 | $ 404 | $ (16) | $ 7 | $ 1,264 | ||||
Add (deduct) impact of the following: | ||||||||||||||
Amortization of intangible assets | $ 115 | $ — | $ — | $ — | $ 115 | $ 115 | $ — | $ — | $ — | $ 115 | ||||
Fair value adjustment on | — | 74 | (40) | — | 34 | — | (202) | (24) | — | (226) | ||||
Fair value adjustment of derivatives | 14 | — | — | — | 14 | 11 | — | — | — | 11 | ||||
Fair value adjustment on non- | 9 | — | — | — | 9 | (6) | — | — | — | (6) | ||||
Fair value adjustment of | — | (27) | — | — | (27) | — | 20 | — | — | 20 | ||||
Recoveries related to | (13) | — | — | — | (13) | — | — | — | — | — | ||||
Gain on sale of non-operating | — | — | (1) | — | (1) | (50) | — | — | — | (50) | ||||
Adjusting items | $ 125 | $ 47 | $ (41) | $ — | $ 131 | $ 70 | $ (182) | $ (24) | $ — | $ (136) | ||||
Adjusted operating income | $ 238 | $ (86) | $ (11) | $ 1,207 | $ 939 | $ 222 | $ (40) | $ 7 | $ 1,128 | |||||
Depreciation and amortization | 565 | — | (78) | — | 487 | 552 | 1 | (92) | 1 | 462 | ||||
Adjusted EBITDA | $ 1,631 | $ 238 | $ (164) | $ (11) | $ 1,694 | $ 1,491 | $ 223 | $ (132) | $ 8 | $ 1,590 | ||||
(i) | Depreciation and amortization for the calculation of adjusted EBITDA excludes amortization of intangible assets, acquired with |
Years Ended | ||||||||||||||
($ millions) | Loblaw | Choice | Effect of | GWL | Consolidated | Loblaw | Choice | Effect of | GWL | Consolidated | ||||
Net earnings attributable to | $ 1,540 | $ 1,822 | ||||||||||||
Add impact of the following: | ||||||||||||||
Non-controlling interests | 1,085 | 987 | ||||||||||||
Income taxes | 849 | 831 | ||||||||||||
Net interest expense and other | 889 | 913 | ||||||||||||
Operating income | $ (284) | $ (50) | $ 4,363 | $ 159 | $ (23) | $ 4,553 | ||||||||
Add (deduct) impact of the following: | ||||||||||||||
Amortization of intangible assets | $ 499 | $ — | $ — | $ — | $ 499 | $ 497 | $ — | $ — | $ — | $ 497 | ||||
Fair value adjustment on | — | (128) | 93 | — | (35) | — | (442) | (286) | — | (728) | ||||
Fair value adjustment of derivatives | 16 | — | — | — | 16 | (5) | — | — | — | (5) | ||||
Fair value adjustment on non- | 9 | — | — | — | 9 | (6) | — | — | — | (6) | ||||
Fair value adjustment of | — | 64 | — | — | 64 | — | 248 | — | — | 248 | ||||
Charges related to | 24 | — | — | — | 24 | 111 | — | — | — | 111 | ||||
Gain on sale of non-operating | (12) | — | (8) | — | (20) | (57) | — | — | — | (57) | ||||
Transaction costs and other | — | — | — | — | — | 16 | 5 | — | — | 21 | ||||
Restructuring and other related | — | — | — | — | — | (15) | — | 19 | — | 4 | ||||
Foreign currency translation and | — | — | — | — | — | — | — | — | 3 | 3 | ||||
Adjusting items | $ 536 | $ (64) | $ 85 | $ — | $ 557 | $ 541 | $ (189) | $ (267) | $ 3 | $ 88 | ||||
Adjusted operating income | $ 937 | $ (199) | $ (50) | $ 4,920 | $ 894 | $ (108) | $ (20) | $ 4,641 | ||||||
Depreciation and amortization | 2,407 | 3 | (380) | 3 | 2,033 | 2,298 | 3 | (395) | 4 | 1,910 | ||||
Adjusted EBITDA | $ 940 | $ (579) | $ (47) | $ 6,953 | $ 6,173 | $ 897 | $ (503) | $ (16) | $ 6,551 | |||||
(i) | Depreciation and amortization for the calculation of adjusted EBITDA excludes amortization of intangible assets, acquired with |
The following items impacted adjusted EBITDA in 2023 and 2022:
Amortization of intangible assets acquired with Shoppers Drug Mart and Lifemark The acquisition of
The acquisition of Lifemark in 2022 included approximately
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.
Fair value adjustment of derivatives Loblaw is exposed to commodity price and
Fair value adjustment on non-operating properties The Company measures non-operating properties, which are investment properties and assets held for sale that were transferred from investment properties, at fair value. Under the fair value model, non-operating properties are initially measured at cost and subsequently measured at fair value. Fair value using the income approach include assumptions as to market rental rates for properties of similar size and condition located within the same geographical areas, recoverable operating costs for leases with tenants, non-recoverable operating costs, vacancy periods, tenant inducements and terminal capitalization rates. Gains and losses arising from changes in the fair value are recognized in operating income in the period in which they arise.
Fair value adjustment of investment in real estate securities Choice Properties received Allied Class
Charges (recoveries) related to
In the second quarter of 2022, Loblaw recorded a charge of
Gain on sale of non-operating properties In the fourth quarter of 2023, Loblaw did not record any gain or loss related to the sale of non-operating properties (2022 – gain of
In the fourth quarter of 2023 and year-to-date,
Transaction costs and other related expenses In connection with the acquisition of Lifemark during 2022, Loblaw recorded acquisition costs of
During the first quarter of 2022,
Restructuring and other related (recoveries) 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 first quarter of 2022, Loblaw recorded approximately $15 million of restructuring and other related recoveries mainly in connection to the previously announced closure of two distribution centres in
In the first quarter of 2022, included in Loblaw's restructuring and other related recoveries was a gain of $19 million related to the disposition of a property to
ADJUSTED NET EARNINGS AVAILABLE TO COMMON SHAREHOLDERS FROM CONTINUING OPERATIONS AND ADJUSTED DILUTED NET EARNINGS PER COMMON SHARE FROM CONTINUING OPERATIONS The Company believes that adjusted net earnings available to common shareholders from continuing operations and adjusted diluted net earnings per common share from continuing operations are useful in assessing the Company's underlying operating performance and in making decisions regarding the ongoing operations of its business.
The following table reconciles adjusted net earnings available to common shareholders of the Company from continuing operations and adjusted net earnings attributable to shareholders of the Company from continuing operations to net (loss) earnings attributable to shareholders of the Company and then to net (loss) earnings available to common shareholders of the Company from continuing operations reported for the periods ended as indicated.
($ millions except where otherwise indicated) | Quarters Ended | Years Ended | ||||||||||
Net (loss) earnings attributable to shareholders of | $ (28) | $ (104) | $ 1,540 | $ 1,816 | ||||||||
Less: Net loss from discontinued operations | — | — | — | (6) | ||||||||
Net (loss) earnings attributable to shareholders of the | $ (28) | $ (104) | $ 1,540 | $ 1,822 | ||||||||
Less: Prescribed dividends on preferred shares in | (10) | (10) | (44) | (44) | ||||||||
Net (loss) earnings available to common shareholders of | $ (38) | $ (114) | $ 1,496 | $ 1,778 | ||||||||
Less: Reduction in net earnings due to dilution at Loblaw | (3) | (3) | (12) | (11) | ||||||||
Net (loss) earnings available to common shareholders | $ (41) | $ (117) | $ 1,484 | $ 1,767 | ||||||||
Net (loss) earnings attributable to shareholders of the | $ (28) | $ (104) | $ 1,540 | $ 1,822 | ||||||||
Adjusting items (refer to the following table) | 380 | 483 | (29) | (346) | ||||||||
Adjusted net earnings attributable to shareholders of | $ 352 | $ 379 | $ 1,511 | $ 1,476 | ||||||||
Less: Prescribed dividends on preferred shares in | (10) | (10) | (44) | (44) | ||||||||
Adjusted net earnings available to common shareholders | $ 342 | $ 369 | $ 1,467 | $ 1,432 | ||||||||
Less: Reduction in net earnings due to dilution at Loblaw | (3) | (3) | (12) | (11) | ||||||||
Adjusted net earnings available to common shareholders | $ 339 | $ 366 | $ 1,455 | $ 1,421 | ||||||||
Diluted weighted average common shares outstanding | 134.8 | 141.3 | 138.0 | 144.8 | ||||||||
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 (loss) earnings available to common shareholders of the Company from continuing operations and diluted net (loss) earnings per common share from continuing operations as reported for the periods ended as indicated.
Quarters Ended | |||||||||||||||||||
Net (Loss) Earnings Available | Diluted | Net (Loss) Earnings Available | Diluted | ||||||||||||||||
($ millions except where | Loblaw(i) | Choice | Effect of | GWL | Consol- | Consol- | Loblaw(i) | Choice | Effect of | GWL | Consol- | Consol- | |||||||
Continuing Operations | $ 285 | $ (445) | $ 142 | $ (20) | $ (38) | $ (0.30) | $ 279 | $ (579) | $ 180 | $ 6 | $ (114) | $ (0.83) | |||||||
Add (deduct) impact of | |||||||||||||||||||
Amortization of intangible | $ 45 | $ — | $ — | $ — | $ 45 | $ 0.33 | $ 41 | $ — | $ — | $ — | $ 41 | $ 0.29 | |||||||
Fair value adjustment | — | 73 | (80) | — | (7) | (0.05) | — | (208) | (17) | — | (225) | (1.60) | |||||||
Fair value adjustment | 5 | — | — | — | 5 | 0.04 | 5 | — | — | — | 5 | 0.03 | |||||||
Fair value adjustment | 3 | — | — | — | 3 | 0.02 | (2) | — | — | — | (2) | (0.01) | |||||||
Fair value adjustment | — | (27) | 2 | — | (25) | (0.19) | — | 20 | (2) | — | 18 | 0.13 | |||||||
Recoveries related to | (6) | — | — | — | (6) | (0.04) | — | — | — | — | — | — | |||||||
Gain on sale of non- | — | — | (1) | — | (1) | (0.01) | (19) | — | — | — | (19) | (0.13) | |||||||
Fair value adjustment | — | — | 382 | — | 382 | 2.83 | — | — | 662 | — | 662 | 4.69 | |||||||
Fair value adjustment | — | 502 | (502) | — | — | — | — | 859 | (859) | — | — | — | |||||||
Outside basis difference | — | — | — | (16) | (16) | (0.12) | — | — | — | 3 | 3 | 0.02 | |||||||
Adjusting items Continuing | $ 47 | $ 548 | $ (199) | $ (16) | $ 380 | $ 2.81 | $ 25 | $ 671 | $ (216) | $ 3 | $ 483 | $ 3.42 | |||||||
Adjusted Continuing Operations | $ 332 | $ 103 | $ (57) | $ (36) | $ 342 | $ 2.51 | $ 304 | $ 92 | $ (36) | $ 9 | $ 369 | $ 2.59 | |||||||
(i) | Contribution from Loblaw, net of non-controlling interests. |
(ii) | Net of income taxes and non-controlling interests, as applicable. |
(iii) | Trust Units held by unitholders other than the Company 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 through net interest expense and other financing charges. |
(iv) | The Company recorded a deferred tax recovery 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. |
Years Ended | |||||||||||||||||
Net Earnings Available | Diluted | Net Earnings Available to Common Shareholders of the Company | Diluted | ||||||||||||||
($ millions except where | Loblaw(i) | Choice | Effect of | GWL | Consol- | Consol- | Loblaw(i) | Choice | Effect of | GWL | Consol- | Consol- | |||||
Continuing Operations | $ 1,102 | $ 797 | $ (248) | $ (155) | $ 1,496 | $ 10.75 | $ 1,007 | $ 744 | $ 127 | $ (100) | $ 1,778 | $ 12.20 | |||||
Add (deduct) impact of | |||||||||||||||||
Amortization of intangible | $ 194 | $ — | $ — | $ — | $ 194 | $ 1.41 | $ 191 | $ — | $ — | $ — | $ 191 | $ 1.32 | |||||
Fair value adjustment | — | (131) | 65 | — | (66) | (0.48) | — | (443) | (202) | — | (645) | (4.45) | |||||
Fair value adjustment | 6 | — | — | — | 6 | 0.04 | (2) | — | — | — | (2) | (0.01) | |||||
Fair value adjustment | 3 | — | — | — | 3 | 0.02 | (2) | — | — | — | (2) | (0.01) | |||||
Fair value adjustment | — | 64 | (5) | — | 59 | 0.42 | — | 248 | (20) | — | 228 | 1.57 | |||||
Charges related to | 9 | — | — | — | 9 | 0.07 | 45 | — | — | — | 45 | 0.31 | |||||
Gain on sale of non- | (5) | — | (6) | — | (11) | (0.08) | (22) | — | — | — | (22) | (0.15) | |||||
Transaction costs and | — | — | — | — | — | — | 7 | 5 | — | — | 12 | 0.08 | |||||
Restructuring and | — | — | — | — | — | — | (7) | — | 17 | — | 10 | 0.07 | |||||
Fair value adjustment | — | — | (231) | — | (231) | (1.67) | — | — | (98) | — | (98) | (0.68) | |||||
Fair value adjustment | — | (321) | 321 | — | — | — | — | (170) | 170 | — | — | — | |||||
Outside basis difference | — | — | — | 8 | 8 | 0.06 | — | — | — | 4 | 4 | 0.03 | |||||
Remeasurement of | — | — | — | — | — | — | — | — | (46) | — | (46) | (0.32) | |||||
Recovery related to | — | — | — | — | — | — | (23) | — | — | — | (23) | (0.16) | |||||
Foreign currency | — | — | — | — | — | — | — | — | — | 2 | 2 | 0.01 | |||||
Adjusting items Continuing | $ 207 | $ (388) | $ 144 | $ 8 | $ (29) | $ (0.21) | $ 187 | $ (360) | $ (179) | $ 6 | $ (346) | $ (2.39) | |||||
Adjusted Continuing Operations | $ 1,309 | $ 409 | $ (104) | $ (147) | $ 1,467 | $ 10.54 | $ 1,194 | $ 384 | $ (52) | $ (94) | $ 1,432 | $ 9.81 | |||||
(i) | Contribution from Loblaw, net of non-controlling interests. |
(ii) | Net of income taxes and non-controlling interests, as applicable. |
(iii) | Trust Units held by unitholders other than the Company 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 through net interest expense and other financing charges. |
(iv) | The Company recorded a deferred tax expense 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. |
(v) | In the second quarter of 2022, the Company remeasured certain deferred tax balances as a result of the Office Asset Sale. |
(vi) | In 2021, the |
GWL CORPORATE FREE CASH FLOW GWL Corporate free cash flow is generated from dividends received from Loblaw, distributions received from
Quarters Ended | Years Ended | |||||||||||
($ millions) | ||||||||||||
Dividends from Loblaw | $ 73 | $ 69 | $ 290 | $ 272 | ||||||||
Distributions from | 84 | 82 | 334 | 330 | ||||||||
GWL Corporate cash flow from operating businesses | $ 157 | $ 151 | $ 624 | $ 602 | ||||||||
Proceeds from participation in Loblaw's NCIB | 238 | 49 | 847 | 558 | ||||||||
GWL Corporate, financing, and other costs(i) | 27 | 2 | (77) | (114) | ||||||||
Income taxes paid | (9) | (1) | (111) | (153) | ||||||||
GWL Corporate free cash flow | $ 413 | $ 201 | $ 1,283 | $ 893 | ||||||||
(i) | GWL Corporate includes all other company level activities that are not allocated to the reportable operating segments, such as net interest expense, corporate activities and administrative costs. Also included are preferred share dividends. |
CHOICE PROPERTIES' FUNDS FROM OPERATIONS
Funds from Operations is calculated in accordance with the
The following table reconciles
($ millions) | Quarters Ended | Years Ended | ||||||||||
Net (loss) income | $ (445) | $ (579) | $ 797 | $ 744 | ||||||||
Add (deduct) impact of the following: | ||||||||||||
Amortization of intangible assets | — | — | 1 | 1 | ||||||||
Transaction costs and other related expenses | — | — | — | 5 | ||||||||
Adjustment to fair value of unit-based compensation | 1 | 2 | (1) | 1 | ||||||||
Fair value adjustment on Exchangeable Units | 503 | 859 | (321) | (170) | ||||||||
Fair value adjustment on investment properties | 74 | (193) | (114) | (113) | ||||||||
Fair value adjustment on investment property held in | (1) | (14) | (17) | (329) | ||||||||
Fair value adjustment of investment in real estate securities | (27) | 21 | 64 | 248 | ||||||||
Capitalized interest on equity accounted joint ventures | 3 | 3 | 12 | 9 | ||||||||
Unit distributions on Exchangeable Units | 74 | 73 | 296 | 293 | ||||||||
Internal expenses for leasing | 3 | 2 | 9 | 9 | ||||||||
Funds from Operations | $ 185 | $ 174 | $ 726 | $ 698 | ||||||||
SOURCE
© Canada Newswire, source