About Loblaw Companies

Loblaw Companies Limited, a food and pharmacy company, engages in the grocery, pharmacy, health and beauty, apparel, general merchandise, financial services, and wireless mobile products and services businesses in Canada. The company is a subsidiary of George Weston Limited. The company operates franchise food retail stores in its network. Segments The company operates through two segments, Retail and Financial Services. Retail This segment consists primarily of corporate and franchise-owned retail food and associate-owned drug stores, as well as includes in-store pharmacies and other health and beauty products, apparel and other general merchandise and supports the PC Optimum Program. This segment’s revenue includes the sale of goods and services to customers through corporate stores and consolidated franchise stores and associates, and sales to non-consolidated franchise stores and independent wholesale account customers. The company recognizes revenue made through corporate stores, consolidated franchise stores and associates at the time the point of sale is made or when service is delivered to the customers. It recognizes revenue made through nonconsolidated franchise stores and independent wholesale customers at the time of delivery of inventory and when administrative and management services are rendered. Financial The Financial Services segment provides credit card and everyday banking services, the PC Optimum Program, insurance brokerage services, and telecommunication services. This segment’s revenue includes interest income on credit card loans, credit card service fees, commissions, and other revenue related to financial services. The company, through President’s Choice Bank (PC Bank), a wholly owned subsidiary of the company, has credit card receivables that are stated net of an allowance. The company, through PC Bank, participates in various securitization programs that provide the primary source of funds for the operation of its credit card business. PC Bank maintains and monitors co-ownership interest in credit card receivables with independent securitization trusts, in accordance with its financing requirements. Eagle Credit Card Trust PC Bank participates in a single seller revolving co-ownership securitization program with Eagle Credit Card Trust (Eagle) and continues to service the credit card receivables on behalf of Eagle, but does not receive any fee for its servicing obligations and has a retained interest in the securitized receivables represented by the right to future cash flows after obligations to investors have been met. Regulation The company is subject to capital requirements from the Office of the Superintendent of Financial Institutions (OSFI), the primary regulator of PC Bank. In addition to the regulatory capital ratios requirement, PC Bank is subject to the Basel III Leverage ratio and OSFI’s Guideline on Liquidity Adequacy Requirements. History Loblaw Companies Limited was founded in 1919. The company is a Canadian public company incorporated in 1956.