George Weston Limited Provides Preliminary Unaudited Financial Update for the 2007 Fourth Quarter and Fiscal Year Ended December 31, 2007(1).



    TORONTO, Feb. 14 /CNW/ - George Weston Limited (TSX: WN) ("Weston" or the
"Company") today is providing a financial update for the fourth quarter of
2007 and the fiscal year ended December 31, 2007 based on management's review
of preliminary unaudited results for these periods.
    Basic net earnings per common share from continuing operations for the
fourth quarter were $1.07 compared to basic net loss per common share from
continuing operations of $3.42 in 2006. For the year, basic net earnings per
common share from continuing operations were $3.92 compared to $0.43 in 2006.
Adjusted basic net earnings per common share from continuing operations(2) for
the quarter and for the year were $0.89 and $4.26, respectively, compared to
$1.14 and $4.98 for the same periods last year.

    
    Consolidated Fourth Quarter and Full Year Highlights

                                                 Quarters Ended
                                 --------------
    ($ millions except where     Dec. 31, 2007   Dec. 31, 2006        Change
     otherwise indicated)           (unaudited)     (unaudited)
    -------------------------------------------------------------------------
    Sales                             $  7,692        $  7,578          1.5%
    Operating income (loss)                181            (630)
    Operating margin                      2.4%          (8.3)%
    Net earnings (loss) from
     continuing operations                 151            (428)
    Basic net earnings (loss)
     per common share from
     continuing operations ($)            1.07           (3.42)
    Basic net earnings (loss)
     per common share ($)                 1.07           (3.33)
    -------------------------------------------------------------------------
    Adjusted operating income(2)           302             359       (15.9)%
    Adjusted EBITDA(2)                     458             513       (10.7)%
    Adjusted operating margin(2)          4.1%            5.0%
    Adjusted basic net earnings
     per common share from
     continuing operations(2) ($)         0.89            1.14       (21.9)%
    -------------------------------------------------------------------------
                                 --------------


                                                   Years Ended
                                 --------------
    ($ millions except where     Dec. 31, 2007   Dec. 31, 2006        Change
     otherwise indicated)           (unaudited)
    -------------------------------------------------------------------------
    Sales                             $ 32,815        $ 32,167          2.0%
    Operating income (loss)              1,094             537
    Operating margin                      3.3%            1.7%
    Net earnings (loss) from
     continuing operations                 563             110
    Basic net earnings (loss)
     per common share from
     continuing operations ($)            3.92            0.43
    Basic net earnings (loss)
     per common share ($)                 3.92            0.52
    -------------------------------------------------------------------------
    Adjusted operating income(2)         1,408           1,643       (14.3)%
    Adjusted EBITDA(2)                   2,079           2,324       (10.5)%
    Adjusted operating margin(2)          4.5%            5.4%
    Adjusted basic net earnings
     per common share from
     continuing operations(2) ($)         4.26            4.98       (14.5%)
    -------------------------------------------------------------------------
                                 --------------

    The fourth quarter results of the Company concluded a year of
transformational change for the Loblaw operating segment amidst intense
competition and consequent pressure on earnings. By contrast, the Weston Foods
operating segment showed improved performance over last year.

    CONSOLIDATED RESULTS OF OPERATIONS

    Sales

    Sales and sales growth excluding the impact of tobacco sales and variable
interest entities ("VIEs")(2) are summarized below.

    Total Sales and Sales Growth Excluding the Impact of VIEs(2)

                                      Quarters Ended          Years Ended
                                  ----------            ----------
                                    Dec. 31,   Dec. 31,   Dec. 31,   Dec. 31,
    ($ millions except                 2007       2006       2007       2006
    where otherwise indicated)   (unaudited)(unaudited)(unaudited)
    -------------------------------------------------------------------------
    Total sales                   $   7,692  $   7,578  $  32,815  $  32,167
    Less: Sales attributable to
           tobacco sales                219        242      1,013      1,423
          Sales attributable to
           the consolidation
           of VIEs                      108         92        456        383
    -------------------------------------------------------------------------
    Sales excluding the impact of
     tobacco sales and VIEs(2)    $   7,365  $   7,244  $  31,346  $  30,361
    -------------------------------------------------------------------------
                                  ----------            ----------



    Total Sales and Sales Growth Excluding the Impact of Tobacco Sales
    and VIEs(2)

                                     Quarters Ended          Years Ended
                                  ----------            ----------
    	                                Dec. 31,   Dec. 31,   Dec. 31,  Dec. 31,
                                       2007       2006       2007       2006
                                 (unaudited)(unaudited)(unaudited)
    -------------------------------------------------------------------------
    Total sales growth                 1.5%       3.2%       2.0%       3.1%
    Less: Impact on sales growth
           attributable to
           tobacco sales             (0.4)%     (1.8)%     (1.4)%     (1.0)%
          Impact on sales growth
           attributable to the
           consolidation of VIEs       0.2%     (0.1)%       0.2%     (0.2)%
    -------------------------------------------------------------------------
    Sales growth excluding the
     impact of tobacco sales
     and VIEs(2)                       1.7%       5.1%       3.2%       4.3%
    -------------------------------------------------------------------------
                                  ----------            ----------
    

    Sales for the fourth quarter of 2007 of $7.7 billion increased 1.5%
compared to 2006, including a decline of 0.4% due to the continued decrease in
tobacco sales at Loblaw and an increase of 0.2% in sales related to the
consolidation of certain Loblaw franchisees. On a year-to-date basis, sales
increased 2.0% to $32.8 billion including a decline of 1.4% due to the
continued decrease in tobacco sales at Loblaw and an increase of 0.2% in sales
related to the consolidation of certain Loblaw franchisees. The translation of
United States dollar denominated sales in the Weston Foods operating segment
reduced consolidated sales growth by 1.2% for the fourth quarter of 2007 and
0.5% on a year-to-date basis.

    Operating Income

    Operating income for the fourth quarter of 2007 increased $811 million
from 2006 to $181 million. For the full year, operating income increased
$557 million from the prior year to $1,094 million.
    The 2006 operating loss was affected by an $800 million non-cash goodwill
impairment charge by Loblaw, related to the goodwill associated with the
acquisition of Provigo Inc. in 1998.
    Adjusted operating income(2) for the fourth quarter of 2007 was
$302 million compared to $359 million in 2006, a decline of 15.9%. For the
full year, adjusted operating income(2) was $1,408 million compared to
$1,643 million in 2006, a decline of 14.3%. Consolidated adjusted operating
margin(2) for the fourth quarter of 2007 was 4.1% compared to 5.0% in 2006 and
was 4.5% compared to 5.4% on a year-to-date basis.
    Items which were excluded in arriving at adjusted operating income(2) and
margin(2), as well as adjusted EBITDA(2) and margin(2), are set out below.

    
                                      Quarters Ended          Years Ended
                                  ----------            ----------
                                    Dec. 31,   Dec. 31,   Dec. 31,   Dec. 31,
                                       2007       2006       2007       2006
    ($ millions)                 (unaudited)(unaudited)(unaudited)
    -------------------------------------------------------------------------
    Net earnings (loss) from
      continuing operations       $     151  $    (428) $     563  $     110
    Add (deduct) impact of
     the following:
      Minority interest                  22       (289)       130        (82)
      Income taxes                       46         (3)       236        256
      Interest (income) expense
       and other financing charges      (38)        90        165        253
    -------------------------------------------------------------------------
    Operating income (loss)             181       (630)     1,094        537
    Add (deduct) impact of the
     following:
      Net effect of stock-based
       compensation and the
       associated equity
       derivatives                       77        (11)       109         60
      Restructuring and other
       charges                           39         51        227         90
      Commodity futures fair
       value adjustment                   6         (3)       (19)
      Inventory liquidation               3         68         15         68
      VIEs                               (4)                  (11)        (8)
      Curtailment of
       post-retirement plan                                    (7)
      Loblaw goodwill
       impairment charge                           800                   800
      Ontario collective labour
       agreement                                    84                    84
      Departure entitlement charge                                        12
    -------------------------------------------------------------------------
    Adjusted operating income(2)        302        359      1,408      1,643
    Add (deduct) impact of the
     following:
      Depreciation and
       amortization                     162        159        704        705
      VIE depreciation and
       amortization                      (6)        (5)       (33)      (24)
    -------------------------------------------------------------------------
    Adjusted EBITDA(2)            $     458  $     513  $   2,079  $   2,324
    -------------------------------------------------------------------------
                                  ----------            ----------

    For the fourth quarter, basic net earnings per common share from
continuing operations were $1.07 compared to a basic net loss per common share
from continuing operations of $3.42 in 2006. For 2007, basic net earnings per
common share from continuing operations were $3.92 compared to $0.43 in 2006.
Adjustments in arriving at adjusted basic net earnings per common share from
continuing operations(2) are outlined in the table below.


                                      Quarters Ended          Years Ended
                                  ----------            ----------
                                    Dec. 31,   Dec. 31,   Dec. 31,   Dec. 31,
                                       2007       2006       2007       2006
    ($)                          (unaudited)(unaudited)(unaudited)
    -------------------------------------------------------------------------
    Basic net earnings (loss) per
     common share from continuing
     operations                   $    1.07  $   (3.42) $    3.92  $    0.43
    Add (deduct) impact of the
     following:
      Net effect of stock-based
       compensation and the
       associated equity
       derivatives                     0.41      (0.03)      0.63       0.38
      Restructuring and other
       charges                         0.13       0.20       0.72       0.36
      Commodity futures fair value
       adjustment                      0.02      (0.01)     (0.10)
      Inventory liquidation                       0.21       0.04       0.21
      VIEs                             0.05                  0.04
      Curtailment of
       post-retirement plan                                 (0.03)
      Loblaw goodwill impairment
       charge                                     3.84                  3.84
      Ontario collective labour
       agreement                                  0.26                  0.26
      Departure entitlement charge                                      0.04
      Accounting for Loblaw
       forward sale agreement         (0.64)      0.09      (0.81)     (0.40)
      Changes in statutory income
       tax rates                      (0.15)                (0.15)     (0.14)
    -------------------------------------------------------------------------
    Adjusted basic net earnings
     per common share from
     continuing operations(2)     $    0.89  $    1.14  $    4.26  $    4.98
    -------------------------------------------------------------------------
                                  ----------            ----------
    

    After adjusting for the above noted items, Weston's adjusted basic net
earnings per common share from continuing operations(2) were $0.89 (2006 -
$1.14) for the fourth quarter and $4.26 (2006 - $4.98) for the full year.

    OPERATING SEGMENTS

    The Company's consolidated sales and operating income were impacted by
each of its reportable operating segments as follows:

    WESTON FOODS

    Sales

    During the year, Weston Foods sales were positively impacted by pricing
actions taken and the continued shift to premium products. The negative impact
of translating United States dollar denominated sales was the primary factor
in the decline in sales growth in the fourth quarter.
    Weston Foods sales for the fourth quarter of 2007 of $932 million
decreased 5.5% compared to the same period in 2006 mainly as a result of the
negative impact of foreign currency translation on reported sales growth of
approximately 9.4%. Price increases across key product categories combined
with changes in sales mix increased sales by 4.3% for the fourth quarter of
2007. Overall volume decreased 0.4% for the fourth quarter of 2007 as growth
in certain higher margin categories was more than offset by declines in other
categories.
    For 2007, sales of $4.3 billion were 1.2% lower than in 2006. Foreign
currency translation negatively impacted reported sales growth by
approximately 3.4%. Price increases across key product categories combined
with changes in sales mix increased sales by 3.5% for 2007. Overall volume
decreased 1.3% for 2007 and was negatively impacted by approximately 0.7% due
to the combined effect of the exit from the United States frozen foodservice
bagel business during the third quarter of 2006 and the discontinuance of
contract manufacturing of biscuits for certain customers during 2006. The
factors contributing to the remaining 0.6% decline were largely the same as
those impacting the fourth quarter.
    The following sales analysis excludes the impact of foreign currency
translation.
    Fresh bakery sales increased approximately 5.9% in the fourth quarter and
4.5% for the year compared to the same periods in 2006, driven by price
increases in key product categories combined with changes in sales mix. For
the fourth quarter and for 2007, branded volume increases in the Arnold and
Thomas' brands in the United States and D'Italiano brand in Canada were more
than offset by volume declines in other categories, particularly in food
service and in private label products. Continued growth in whole grain
products and the introduction of new and expanded products, such as Thomas'
100 Calorie English Muffins, Thomas' mini square bagels and product innovation
in the Wonder+ line, contributed positively to branded sales growth in 2007.
    Fresh-baked sweet goods sales, primarily sold under the Entenmann's
brand, were flat compared to 2006 in the fourth quarter and declined 0.8% for
the year. Volume declines driven by softness in full size categories were
partially offset by the introduction of new and expanded products, such as the
Entenmann's 100 Calorie Little Bites.
    Frozen bakery sales increased approximately 4.3% in the fourth quarter
and 3.8% for the year compared to the same periods in 2006. Fourth quarter
sales growth was driven mainly by higher volumes, price increases and changes
in sales mix. Volumes for the year were flat as volume gains were offset by
the decline in volumes caused by the exit from the United States frozen
foodservice bagel business early in the third quarter of 2006.
    Dairy and bottled beverage sales increased approximately 4.2% in the
fourth quarter and 3.6% for the year compared to 2006, driven mainly by
pricing, volume gains and improvements in sales mix as growth continued to be
experienced in a number of key categories particularly value added and bottled
products.
    Biscuit sales in the fourth quarter were flat and decreased 11.0% for the
year compared to the same periods in 2006. The full year sales decline was due
to significantly lower sales volume in certain categories and the discontinued
contract manufacturing for certain customers during 2006.

    
    Operating Income

                                      Quarters Ended          Years Ended
                                  ----------            ----------
                                    Dec. 31,   Dec. 31,   Dec. 31,   Dec. 31,
                                       2007       2006       2007       2006
    ($ millions)                 (unaudited)(unaudited)(unaudited)
    -------------------------------------------------------------------------
    Operating income              $      49  $      67  $     366  $     256
    Add (deduct) impact of the
     following:
      Net effect of stock-based
       compensation and the
       associated equity
       derivatives                       25         (5)        37         23
      Commodity futures fair
       value adjustment                   6         (3)       (19)
      Restructuring and other
       charges                            3         16          5         46
      Curtailment of
       post-retirement plan                                    (7)
    -------------------------------------------------------------------------
    Adjusted operating income(2)         83         75        382        325
    Depreciation and amortization        28         26        116        115
    -------------------------------------------------------------------------
    Adjusted EBITDA(2)            $     111  $     101  $     498  $     440
    -------------------------------------------------------------------------
                                  ----------            ----------

    Weston Foods operating income of $49 million for the fourth quarter of
2007 decreased by $18 million, or 26.9%, compared to operating income of
$67 million in 2006. Operating margin was 5.3% compared to 6.8% in the fourth
quarter of 2006.

    In the fourth quarter of 2007, Weston Foods recognized the following in
operating income:

    -  a charge of $25 million (2006 - income of $5 million) for the net
       effect of stock-based compensation and the associated equity
       derivatives;
    -  a charge of $6 million (2006 - income of $3 million) related to the
       commodity futures fair value adjustment; and
    -  a charge of $3 million (2006 - $16 million) related to restructuring
       and other charges for restructuring plans, the details of which are
       more fully discussed below.

    After adjusting for the above-noted items, adjusted operating income(2) in
the fourth quarter of 2007 increased by $8 million, or 10.7%, to $83 million
compared to $75 million in the fourth quarter of 2006. Adjusted operating
margin(2) increased to 8.9% in the fourth quarter of 2007 compared to 7.6% in
2006. Foreign currency translation negatively impacted 2007 adjusted operating
income(2) growth by approximately 12.0 percentage points. Adjusted EBITDA
margin(2) increased to 11.9% from 10.2% in 2006.
    The improvement in adjusted operating margin(2) was the result of positive
pricing actions net of inflation, favourable mix and productivity
improvements. Inflationary cost pressures related to certain ingredients,
primarily flour, oils and sugar, continued to escalate in the fourth quarter
relative to the first three quarters of 2007. Pricing and other actions,
including cost reduction initiatives such as reduced product returns,
mitigated the impact of inflationary cost pressures.
    During the fourth quarter of 2007, a reduction in insurance reserves,
relating primarily to workers' compensation benefits in the United States,
resulted in a benefit of $8 million and was recorded in operating income. This
benefit was largely a result of favourable experience in workers compensation
claims and an increased focus on workplace safety programs.
    Weston Foods operating income of $366 million for 2007 increased by
$110 million, or 43.0%, compared to operating income of $256 million in 2006.
Operating margin was 8.5% compared to 5.9% in 2006.

    In 2007, Weston Foods recognized the following in operating income:

    -  a charge of $37 million (2006 - $23 million) for the net effect of
       stock-based compensation and the associated equity derivatives;
    -  income of $19 million (2006 - nil) related to the commodity futures
       fair value adjustment;
    -  a charge of $5 million (2006 - $46 million) related to restructuring
       and other charges for restructuring plans, the details of which are
       more fully discussed below; and
    -  income of $7 million (2006 - nil) related to the curtailment of a
       post-retirement plan.

    After adjusting for the above-noted items, adjusted operating income(2) in
2007 increased by $57 million, or 17.5%, to $382 million compared to
$325 million in 2006. Adjusted operating margin(2) increased to 8.9% in 2007
compared to 7.5% in 2006. Foreign currency translation negatively impacted
2007 adjusted operating income(2) growth by approximately 4.3 percentage
points. Adjusted EBITDA margin(2) increased to 11.6% from 10.1% in 2006.
    Weston Foods 2007 adjusted operating income(2) was positively impacted by
sales growth, primarily due to price increases combined with changes in sales
mix, and the benefits realized from the continued focus on cost reduction
initiatives, including restructuring activities. Pricing and other actions
mitigated the impact of inflationary cost pressures related to certain
ingredients, primarily flour, oils and sugar.
    Profitability in the United States fresh-baked sweet goods category
declined in 2007 and remained a challenge as a result of changing consumer
eating and shopping preferences and a high fixed cost manufacturing and
distribution structure. Weston Foods is addressing these challenges with the
previously announced downsizing of its fresh-baked goods facility in Bay
Shore, New York, which is expected to be complete by the third quarter of
2008.
    Weston Foods continues to evaluate strategic and cost reduction
initiatives related to its manufacturing assets, distribution networks and
administrative infrastructure with the objective of ensuring a low cost
operating structure. Certain of these initiatives are in progress while others
are still in the planning stages.

    Weston Foods approved several restructuring plans in 2007 including:

    -  the transfer of the manufacturing of two lines of certain private
       label English muffins in the United States to third-party producers or
       other Weston Foods manufacturing lines already in place, which was
       completed in the third quarter of 2007;
    -  the exit of certain bread and roll manufacturing lines in the
       Southeastern United States and the transfer of the production
       associated with these lines to third-party producers or other Weston
       Foods manufacturing lines already in place. This process was completed
       in the first quarter of 2007;
    -  the restructure of the Ontario frozen bakery distribution operations
       and the further restructure of the Quebec fresh bakery distribution
       operations. In addition, restructuring of the dairy distribution
       network was approved in the fourth quarter. The bakery and dairy plans
       are expected to be substantially completed in 2008;
    -  the exit and transfer of certain distribution and transportation
       activities in the mid-Western United States to third-party logistic
       providers. The plan is expected to be completed by the end of the
       second quarter in 2008; and
    -  the consolidation, relocation and restructure of certain sales and
       administrative functions in the United States, which was completed by
       year end 2007.

    The following was recorded relating to significant restructuring plans
approved prior to 2007:

    -  a deferred gain in accordance with the terms and conditions of the
       sale and leaseback of a production facility, as part of the plan
       approved in 2005 to restructure the United States biscuit operations.
       The plan was substantially completed in 2006;
    -  a gain on sale of a production facility as part of the plan approved
       in 2006 to close an ice-cream cone baking facility in Los Angeles,
       California, which was completed in the second quarter of 2007; and
    -  a loss on sale of a production facility as part of the plan approved
       in 2006 to close a frozen bagel plant in Nebraska, which was completed
       during the second quarter of 2007.
    

    During the fourth quarter of 2007, Weston Foods recognized $3 million of
restructuring and other charges in connection with all of these restructuring
plans as well as other plans approved in previous years. These restructuring
and other charges consisted of $3 million of other exit related costs. For the
year, Weston Foods recognized $5 million of restructuring and other charges,
consisting of $13 million of employee termination benefits and other exit
related costs, $6 million of accelerated depreciation and a gain of
$14 million on the sale of fixed assets.

    LOBLAW

    Total sales for the fourth quarter of 2007 increased $183 million, or
2.7%, to $7.0 billion compared to $6.8 billion in the fourth quarter of 2006.
Sales volume based on retail units sold grew by 3.6% in the fourth quarter
compared to the same period last year. Same-store sales increased by 2.6%.
Total sales excluding the impact of tobacco sales and variable interest
entities(2) increased by 2.9%.
    Total sales increases in the fourth quarter of 2007 were achieved by
positive growth in both item and customer counts despite internal food price
deflation. Total sales increases were realized in Ontario, Quebec and western
Canada. Total sales increased in food and drugstore while general merchandise
sales were lower because of the intentional restriction of inventory as Loblaw
continued to work on optimizing inventory controls, product mix and markdown
strategies.

    
    Total Sales and Sales Excluding the Impact of Tobacco Sales and VIEs(2)

                                      Quarters Ended          Years Ended
                                  ----------            ----------
                                    Dec. 31,   Dec. 31,   Dec. 31,   Dec. 31,
                                       2007       2006       2007       2006
    ($ millions)                 (unaudited)(unaudited)(unaudited)
    -------------------------------------------------------------------------
    Total sales                   $   6,967  $   6,784  $  29,384  $  28,640
    Less: Sales attributable to
           tobacco sales                219        242      1,013      1,423
          Sales attributable to
           the consolidation of
           VIEs                         108         92        456        383
    -------------------------------------------------------------------------
    Sales excluding the impact of
     tobacco sales  and VIEs(2)   $   6,640  $   6,450  $  27,915  $  26,834
    -------------------------------------------------------------------------
                                  ----------            ----------



    Sales Growth and Same-Store Sales Growth(2)

                                      Quarters Ended          Years Ended
                                  ----------            ----------
                                    Dec. 31,   Dec. 31,   Dec. 31,   Dec. 31,
                                       2007       2006       2007       2006
                                 (unaudited)(unaudited)(unaudited)
    -------------------------------------------------------------------------
    Total sales growth                  2.7%       3.5%       2.6%       3.7%
    -------------------------------------------------------------------------
    Less: Impact on sales
           growth attributable
           to tobacco sales           (0.4)%     (2.0)%     (1.7)%     (1.2)%
          Impact on sales
           growth attributable
           to the consolidation
           of VIEs                      0.2%     (0.2)%       0.3%     (0.1)%
    -------------------------------------------------------------------------
    Sales growth excluding
     the impact of tobacco
     sales and VIEs(2)                  2.9%       5.7%       4.0%       5.0%
    -------------------------------------------------------------------------
    Same-store sales growth             2.6%       1.3%       2.4%       0.8%
    -------------------------------------------------------------------------
    Same-store sales growth
     excluding the impact of
     decreased tobacco sales(2)         2.7%       3.3%       3.4%       2.0%
    -------------------------------------------------------------------------
                                  ----------            ----------


    The following factors explain the major components in the change in fourth
quarter sales over the prior period:

      -  continued sales growth in the Real Canadian Superstore banner in
         Ontario;
      -  national food price inflation as measured by "The Consumer Price
         Index for Food Purchased from Stores" ("CPI") was 0.8% for the
         fourth quarter of 2007 compared to approximately 1.5% in the same
         period of 2006. This measure of inflation does not necessarily
         reflect the effect of inflation on the specific mix of goods offered
         in Loblaw stores. Loblaw's analysis indicates that it had internal
         retail food price deflation of approximately 1.6%;
      -  positive volume growth of 3.6% based on retail units sold; and
      -  8 new corporate and franchised stores were opened and 8 were closed
         during the fourth quarter resulting in a net increase of 0.1 million
         square feet, or 0.1%, compared to the third quarter of 2007.
    

    Sales for 2007 increased $744 million, or 2.6%, to $29.4 billion compared
to $28.6 billion in 2006. Total sales excluding the impact of tobacco sales
and VIEs(2) increased by 4.0%. The following factors in addition to the
quarterly factors mentioned above further explain the change in full year
sales over 2006:
    
      -  same-store sales growth excluding the impact of decreased tobacco
         sales increased 3.4%. In the third quarter of 2006, a major tobacco
         supplier commenced shipping directly to certain customers of
         Loblaw's cash & carry and wholesale club network, adversely
         impacting sales. This loss of sales affects comparisons to 2006 for
         the first three quarters of 2007;
      -  national food price inflation as measured by "The Consumer Price
         Index for Food Purchased from Stores" ("CPI") was 2.7% for 2007
         compared to approximately 2.3% in 2006. Loblaw's analysis indicates
         that its internal retail food price inflation for 2007 is
         approximately 1.3% compared to last year;
      -  positive volume growth of 1.9% based on retail units sold; and
      -  34 new corporate and franchised stores were opened and 79 stores
         were closed, including 46 stores that were closed as part of a
         previously announced store operations restructuring plan, and stores
         which underwent conversions and major expansions. Net retail square
         footage decreased 0.1 million square feet, or (0.2)%, in 2007 from
         year end 2006.
    

    Operating Income

    Operating income of $132 million for the fourth quarter of 2007 increased
by $829 million compared to an operating loss of $697 million in 2006.
Operating margin was 1.9% compared to (10.3)% in the fourth quarter of 2006.
The 2006 operating loss was affected by an $800 million non-cash goodwill
impairment charge related to the goodwill associated with the acquisition of
Provigo Inc. in 1998.
    In the fourth quarter of 2007, Loblaw recognized the following in
operating income:

    
      -  charge of $29 million (2006 - nil) related to Project Simplify
         involving restructuring and streamlining of merchandising and store
         operations. Costs comprised $19 million for employee termination
         benefits including severance, additional pension costs resulting
         from the termination of employees and retention costs; and
         $10 million of other costs, primarily consulting;

      -  charge of $7 million (2006 - nil) in connection with the previously
         announced plan to restructure Loblaw's supply chain network;

      -  nil (2006 - $35 million) in connection with the previously announced
         closure of certain stores in the Quebec and Atlantic markets and in
         the wholesale network that were part of the store operations
         restructuring activities;

      -  charge of $52 million (2006 - income of $6 million) for the net
         effect of stock-based compensation and the associated equity
         forwards. The majority of the expense in the fourth quarter of 2007
         included a non-cash loss on equity forwards of $55 million (2006 -
         income of $10 million) resulting from a decline in Loblaw's share
         price during the fourth quarter of 2007. At the end of fourth
         quarter of 2007, Loblaw had cumulative equity forwards to buy 4.8
         million (2006 - 4.8 million) of its common shares;

      -  charge of $3 million (2006 - $68 million) from the previously
         announced liquidation of excess general merchandise inventory in the
         fourth quarter of 2006. The liquidation was completed as expected in
         the fourth quarter of 2007;

      -  income of $4 million (2006 - nil) resulting from the consolidation
         of VIEs;

      -  nil (2006 - charge of $800 million) for a non-cash goodwill
         impairment charge related to the goodwill established on the
         acquisition of Provigo Inc. in 1998; and

      -  nil (2006 - charge of $84 million) related to the ratification of a
         new four-year collective agreement with members of certain Ontario
         locals of the UFCW.
    

    After adjusting for the above-noted items, adjusted operating income(2)
in the fourth quarter of 2007 decreased by $65 million, or 22.9%, to $219
million compared to $284 million in the fourth quarter of 2006. Adjusted
operating margin(2) decreased to 3.3% in the fourth quarter of 2007 as growth
in operating expenses exceeded growth in sales compared to 4.4% in 2006.
Adjusted EBITDA margin(2) decreased to 5.2% from 6.4% in 2006.
    In addition, adjusted operating income(2) in the fourth quarter of 2007
was influenced by the following items:

    
      -  gross margin declined approximately $60 million from 2006, which
         represents 0.9% of sales, primarily due to targeted price
         reductions, to provide value to customers and drive same-store sales
         and sales volumes, and changes in sales mix, partially offset by
         improvements in shrink;

      -  incremental consulting costs compared to the prior year, other than
         those in connection with Project Simplify, amounted to $12 million
         including expenses related to new supply chain and information
         technology improvement initiatives of $6 million;

      -  a gain of $11 million from the sale of an office building in
         Calgary, Alberta; and

      -  incremental non-cash fixed asset impairment charge of $9 million
         related to asset carrying values in excess of fair values at
         specific store locations. The charge in the fourth quarter of 2007
         was $33 million compared to $24 million in the fourth quarter of
         2006.
    

    Gross margin percentage continued to decline in the fourth quarter of
2007 as a result of Loblaw's continued investment in lower prices, as part of
its Credit for Value initiative, to drive same-store sales growth in a
targeted manner across the country. Sales increases in the quarter were
insufficient to offset margin declines. Loblaw continues to experience higher
store labour costs due to marketplace pressures and achieved reduced inventory
shrink expenses in the fourth quarter of 2007 compared to the same quarter
last year.

    The following table outlines items which were excluded in arriving at
adjusted operating income(2), adjusted operating margin(2), and adjusted
EBITDA(2) and adjusted EBITDA margin(2):

    
                                      Quarters Ended          Years Ended
                                  ----------            ----------
                                    Dec. 31,   Dec. 31,   Dec. 31,   Dec. 31,
                                       2007       2006       2007       2006
    ($ millions)                 (unaudited)(unaudited)(unaudited)
    -------------------------------------------------------------------------
    Operating income (loss)       $     132  $    (697) $     728  $     281
    Add (deduct) impact of the
     following:
      Net effect of stock-based
       compensation and the
       associated equity forwards        52         (6)        72         37
      Restructuring and
       other charges                     36         35        222         44
      Inventory liquidation               3         68         15         68
      VIEs                               (4)                  (11)        (8)
      Goodwill impairment
       charge                                      800                   800
      Ontario collective
       labour agreement                             84                    84
      Departure entitlement
       charge                                                             12
    -------------------------------------------------------------------------
    Adjusted operating
     income(2)                          219        284      1,026      1,318
    Add (deduct) impact of the
     following:
      Depreciation and
       amortization                     134        133        588        590
      VIE depreciation and
       amortization                      (6)        (5)       (33)       (24)
    -------------------------------------------------------------------------
    Adjusted EBITDA(2)            $     347  $     412  $   1,581  $   1,884
    -------------------------------------------------------------------------
                                  ----------            ----------
    

    Operating income of $728 million for 2007 year-to-date increased by
$447 million compared to $281 million in 2006, and resulted in an operating
margin of 2.5% as compared to 1.0% in 2006.
    During 2007, Loblaw recognized the following in operating income:

    
      -  charge of $197 million (2006 - nil) related to Project Simplify
         involving restructuring and streamlining of merchandising and store
         operations. Costs comprised $139 million for employee termination
         benefits including severance, additional pension costs resulting
         from the termination of employees and retention costs; and $58
         million of other costs, primarily consulting. Total restructuring
         costs under this plan, comprised primarily of severance costs, are
         now anticipated to be approximately $200 million with the remaining
         costs to be expensed in 2008;

      -  charge of $9 million (2006 - $8 million) in connection with the
         previously announced plan to restructure Loblaw's supply chain
         network;

      -  charge of $16 million (2006 - $35 million) in connection with the
         previously announced closure of certain stores in the Quebec and
         Atlantic markets and in the wholesale network that were part of the
         store operations restructuring activities;

      -  charge of $72 million (2006 - $37 million) for the net effect of
         stock-based compensation and the associated equity forwards. The
         majority of the expense in 2007 included a non-cash loss on equity
         forwards of $67 million (2006 - $32 million) resulting from a
         decline in Loblaw's share price during the year;

      -  charge of $15 million (2006 - $68 million) for the liquidation of
         general merchandise inventory discussed previously;

      -  income of $11 million (2006 - $8 million) resulting from the
         consolidation of VIEs;

      -  nil (2006 - charge of $1 million) related to the head office move
         and reorganization of the operation support functions;

      -  nil (2006 - charge of $800 million) for a non-cash goodwill
         impairment charge related to the goodwill established on the
         acquisition of Provigo Inc. in 1998;

      -  nil (2006 - charge of $84 million) related to the ratification of a
         new four-year collective agreement with members of certain Ontario
         locals of the UFCW; and

      -  nil (2006 - charge of $12 million) related to a departure
         entitlement charge.
    

    After adjusting for the above-noted items, adjusted operating income(2)
for 2007 year-to-date decreased by $292 million, or 22.2%, to $1,026 million
compared to $1,318 million in 2006. Adjusted operating margin(2) decreased to
3.7% in 2007 compared to 4.9% in 2006 as growth in operating expenses exceeded
growth in sales. Adjusted EBITDA margin(2) decreased to 5.7% from 7.0% in
2006.
    In addition, the 2007 adjusted operating income(2) was also influenced by
the following items:

    
      -  incremental consulting costs compared to the prior year, other than
         those in connection with Project Simplify, amounted to $75 million
         including expenses related to new supply chain and information
         technology improvement initiatives of $16 million;

      -  pharmacy-related operating income was reduced by $25 million due to
         legislative changes introduced in 2006 by the Ontario government;

      -  adjustments in estimates related to post-employment and long term
         disability benefits and deferred product development and information
         technology costs reduced operating income by $24 million;

      -  costs associated with the change in Loblaw's executive bonus plan
         were $11 million;

      -  a gain of $11 million from the sale of an office building in
         Calgary, Alberta;

      -  incremental non-cash fixed asset impairment charge of $6 million
         related to asset carrying values in excess of fair values at
         specific store locations. The 2007 charge was $33 million compared
         to $27 million in 2006; and

      -  the gross margin percentage decreased as described previously.
    

    Loblaw continues to invest in what it believes will be higher return
expansions and renovations to its existing store base, with a focus on
improving same-store sales. As stated last quarter, Loblaw expects to invest
an estimated $700 to $800 million in net capital expenditures. Approximately
two-thirds of these funds are expected to be used in remodeling, expanding and
maintaining existing stores and a small increase in square footage, with the
remainder split two-thirds in upgrading information systems and one-third on
supply chain infrastructure.
    During the quarter as planned, Loblaw sold property and a partially
constructed building for a purchase price of $110 million. Loblaw leased back
the property from the buyer for a term of 20 years, with options to renew, and
in turn, subleased the property to a third party logistics provider. Loblaw
has also entered into a warehousing and distribution agreement with the third
party logistics provider, which will use this property to provide services to
Loblaw.

    Liquidity and Capital Resources

    During the fourth quarter of 2007, Dominion Bond Rating Service ("DBRS")
placed Loblaw's long term and short term credit ratings Under Review with
Negative Implications; and Standard & Poor's ("S&P") placed Loblaw's long term
and short term credit ratings on CreditWatch with negative implications. In
addition, DBRS placed the Company's long term, preferred shares and short term
credit ratings Under Review with Negative Implications; and S&P placed the
Company's long term, preferred shares and short term credit ratings on
CreditWatch with negative implications.
    On February 7, 2008, Loblaw's long term corporate credit and senior
unsecured debt ratings were downgraded by S&P to "BBB" from "BBB+". In
addition, S&P downgraded Loblaw's commercial paper rating to "A-2" from "A-1
(low)". Loblaw was removed from CreditWatch with negative implications and the
outlook was changed to "negative". Also, DBRS downgraded Loblaw's long term
credit rating to "BBB (high)" from "A (low)" with a Negative trend. DBRS also
lowered Loblaw's short term credit rating to "R-2 (high)" from "R-1 (low)"
with a Stable trend.
    As a result of the DBRS downgrade of the short term credit rating, Loblaw
no longer expects to be able to issue commercial paper, however, it expects it
will be able to secure short term funding from other sources for the
foreseeable future. Furthermore, the credit rating downgrades of Loblaw
resulted in a possible termination of the independent funding trust agreement
for Loblaw's franchisees. If left unaddressed, Loblaw's franchisees' access to
financing through the structure involving the independent funding trusts would
be affected and the standby letter of credit in the amount of $44 million
provided to the independent funding trust by Loblaw would be drawn upon. The
gross principal amount of the franchisee loans outstanding at the end of 2007
was $418 million. Loblaw is currently in the process of securing alternative
financing arrangements for the benefit of its franchisees in order to address
this issue. In the event Loblaw restructures the independent funding trusts,
any new alternative financing structure which may be implemented would need to
be reviewed to determine if there are any implications with respect to the
consolidation of VIEs.

    On February 12, 2008, DBRS downgraded the Company's long term credit
rating to "BBB" from "BBB (high)" with a Stable trend. DBRS also lowered the
Company's short term credit rating to "R-2 (high)" from "R-1 (low)" with a
Stable trend. As a result of the DBRS downgrade of the short term credit
rating, the Company no longer expects to be able to issue commercial paper,
however, it expects it will be able to secure short term funding from other
sources for the foreseeable future.

    Outlook(1)

    In 2008, Weston Foods anticipates challenging market conditions as
unprecedented increases for ingredient and other input costs are expected.
Weston Foods plans to offset these higher input costs by ongoing cost
reduction initiatives and pricing as necessary.
    Loblaw's sales volumes have been positively responding to its investments
in lower prices to give value to its customers. Loblaw expects this to
continue in 2008. Investments in price will also continue. However, Loblaw
expects that cost reductions in 2008 will help to support its profitability.
Sales, margins and profitability in the first half of 2008 in relation to 2007
may be affected by more difficult comparables.

    (1) This News Release contains forward-looking information. See Forward-
    Looking Statements section of this News Release 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.sedar.com and at www.weston.ca.
    (2) See Non-GAAP Financial Measures section of this News Release.

    Non-GAAP Financial Measures

    The Company reports its financial results in accordance with Canadian
GAAP. However, the Company has included certain non-GAAP financial measures
and ratios which it believes provide useful information to both management and
readers of this News Release in measuring the financial performance of the
Company for the reasons set out below. These measures do not have a
standardized meaning prescribed by Canadian GAAP and, therefore, may not be
comparable to similarly titled measures presented by other publicly traded
companies. They should not be construed as an alternative to other financial
measures determined in accordance with Canadian GAAP.

    Sales and Sales Growth Excluding the Impact of Tobacco Sales and VIEs

    These financial measures exclude the impact on sales from the decrease in
tobacco sales and from the consolidation by the Company of certain independent
franchisees. Tobacco sales continued to decrease through the end of third
quarter 2007 as a result of a major tobacco supplier shipping directly to
certain customers of Loblaw's cash & carry and wholesale club network
commencing in the third quarter of 2006. These impacts on sales are excluded
because the Company believes this allows for a more effective analysis of the
operating performance of the Company. A reconciliation of the financial
measures to the Canadian GAAP financial measures is included in the table
"Total Sales and Sales Excluding the Impact of Tobacco Sales and VIEs" on
pages 2 and 7 of this News Release. Sales growth excluding the impact of
tobacco sales and VIEs is included in the table "Total Sales Growth and Sales
Growth Excluding the Impact of Tobacco Sales and VIEs" on page 2 of this News
Release and the table "Sales Growth and Same-Store Sales Growth" on page 8 of
this News Release. Loblaw same-store sales growth and same-store sales growth
excluding the impact of decreased tobacco sales is included in the table
"Sales Growth and Same-Store Sales Growth" on page 8 of this News Release.

    Adjusted Operating Income and Margin

    The table on page 3 of this News Release reconciles operating income
(loss) and adjusted operating income to Canadian GAAP net earnings (loss) from
continuing operations based on management's review of preliminary unaudited
results for the quarters and years ended December 31, 2007 and 2006. For each
of its reportable operating segments, the tables on pages 5 and 10 of this
News Release reconciles segment adjusted operating income to segment operating
income. Items listed in these reconciliations are excluded because the Company
believes adjusted operating income allows for a more effective analysis of the
operating performance of the Company. In addition, the excluded items affect
the comparability of the financial results and could potentially distort the
analysis of trends. The exclusion of these items does not imply they are non-
recurring. Adjusted operating income and margin are useful to management in
assessing the Company's performance and in making decisions regarding the
ongoing operations of its business.
    Adjusted operating margin is calculated as adjusted operating income
divided by sales excluding the impact of tobacco sales and VIEs.

    Adjusted EBITDA and Margin

    The table on page 3 of this News Release reconciles adjusted earnings
before interest, income taxes, depreciation and amortization ("EBITDA") to
Canadian GAAP net earnings (loss) from continuing operations based on
management's review of preliminary unaudited results for the quarters and
years ended December 31, 2007 and December 31, 2006. For each of its
reportable operating segments, the tables on pages 5 and 10 of this News
Release reconciles segment adjusted EBITDA to segment operating income.
Adjusted EBITDA is useful to management in assessing the Company's performance
of its ongoing operations and its ability to generate cash flows to fund its
cash requirements, including the Company's capital investment program.
    Adjusted EBITDA margin is calculated as adjusted EBITDA divided by sales
excluding the impact of tobacco sales and VIEs.

    Adjusted Basic Net Earnings per Common Share from Continuing Operations

    The table on page 4 of this News Release reconciles adjusted basic net
earnings per common share from continuing operations to Canadian GAAP basic
net earnings (loss) per common share from continuing operations based on
management's review of preliminary unaudited results for the quarters and
years ended December 31, 2007 and December 31, 2006. Items listed in the
reconciliation are excluded because the Company believes this allows for a
more effective analysis of the operating performance of the Company. In
addition, the excluded items affect the comparability of the financial results
and could potentially distort the analysis of trends. The exclusion of these
items does not imply they are non-recurring. Adjusted basic net earnings per
common share from continuing operations is useful to management in assessing
the Company's performance and in making decisions regarding the ongoing
operations of its business.

    2007 ANNUAL CONSOLIDATED FINANCIAL STATEMENTS AND MANAGEMENT'S DISCUSSION
    AND ANALYSIS ("MD&A")

    Weston's audited consolidated financial statements and MD&A for the year
ended December 31, 2007 will be released on or before March 31, 2008. Both
documents will be contained in Weston's 2007 Annual Report and will be
available in the Investor Zone section of Weston's website at www.weston.ca,
or at www.sedar.com.

    INVESTOR RELATIONS

    Shareholders, security analysts and investment professionals should
direct their requests to Mr. Geoffrey H. Wilson, Senior Vice President, Shared
Financial Services at the Company's Executive Office or by e-mail at
investor@weston.ca.
    Additional information has been filed electronically with various
securities regulators in Canada through the System for Electronic Document
Analysis and Retrieval (SEDAR). This News Release includes selected
information on Loblaw Companies Limited, a 62%-owned public reporting 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 on Loblaw's corporate website at www.loblaw.ca.

    CONFERENCE CALL AND WEBCAST PRESENTATION

    George Weston Limited will host a conference call on February 14, 2008 at
    11:00 AM (EST).

    To access the conference call, dial (416) 644-3419 or visit our website
at www.weston.ca to access the webcast. The replay will be available one hour
following the live event. To access the replay dial (416) 640-1917   
passcode: 21260609 followed by number sign.

    Full details are available on the George Weston Limited website at
www.weston.ca.

    FORWARD-LOOKING STATEMENTS

    This News Release for George Weston Limited and its subsidiaries
(collectively, the "Company" or "Weston") 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 include a preliminary
unaudited financial update for its fourth quarter and fiscal year 2007. Words
such as "anticipate", "expect", "believe", "could", "estimate", "goal",
"intend", "plan", "seek", "strive", "will", "may" and "should" and similar
expressions, as they relate to the Company and its management, are intended to
identify forward-looking statements. These forward-looking statements are not
historical facts but reflect the Company's current expectations concerning
future results and events.

    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. These risks and uncertainties include, but are not
limited to: changes in economic conditions; changes in consumer spending and
preferences, heightened competition, whether from new competitors or current
competitors; the availability and cost of raw materials and ingredients, fuels
and utilities; changes in the Company's or its competitors' pricing
strategies; failure of the Company's franchised stores to perform as expected;
risks associated with the terms and conditions of financing programs offered
to the Company's franchisees; failure to realize anticipated cost savings and
operating efficiencies from the Company's major initiatives, including
investments in the Company's information technology systems, supply chain
investments and other cost reduction and simplification initiatives; the
ability of the Company's information technology infrastructure to support the
requirements of the Company's business; the ability of the Company to identify
obsolete or excess inventory and to control shrink; failure to execute
successfully and in a timely manner the Company's major initiatives, including
the implementation of strategies and introduction of innovative products;
unanticipated costs associated with the Company's strategic initiatives,
including those related to compensation costs; the ability of the Company's
supply chain to service the needs of the Company's stores; deterioration in
the Company's relationship with its employees, particularly through periods of
change in the Company's business; failure to achieve desired results in labour
negotiations, including the terms of future collective bargaining agreements;
changes to the regulatory environment in which the Company operates; the
adoption of new accounting standards and changes in the Company's use of
accounting estimates including in relation to inventory valuation;
fluctuations in the Company's earnings due to changes in the value of equity
forward contracts relating to the Company's and Loblaw's common shares;
changes in the Company's tax liabilities resulting from changes in tax laws or
future assessments; detrimental reliance on the performance of third-party
service providers; public health events; the ability of the Company to obtain
external financing; the ability of the Company to attract and retain key
executives; and supply and quality control issues with vendors. These and
other risks and uncertainties are discussed in the Company's materials filed
with the Canadian securities regulatory authorities from time to time,
including the Risks and Risk Management section of the MD&A included in the
Company's 2006 Annual Report. 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.
    In addition to these risks and uncertainties, the material assumptions
used in making the forward-looking statements contained herein and in
particular in the section entitled "Outlook" on page 12 of this News Release,
include: there is no material change in economic conditions from those of
2007; patterns of consumer spending and preferences are reasonably consistent
with historical trends; there is no significant change in competitive
conditions, whether related to new competitors or current competitors; there
is no unexpected change in the Company's or its competitors' current pricing
strategies; the Company's franchised stores perform as expected; the Company
successfully offers new and innovative products and executes its strategies as
planned; anticipated cost savings and operating efficiencies are achieved,
including those from the Company's cost reduction and simplification
initiatives; and there are no significant regulatory, tax or accounting
changes or other significant events occurring outside the ordinary course of
business.
    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.





For further information:

For further information: Geoff Wilson, Senior Vice President, Shared
Financial Services, (416) 922-2500


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