1.
Loblaw Companies Ltd.<br />A Recommendation for the Concordia Pension Fund<br />Mark Bundang <br />Zachary Elias<br />David Mascitto<br />Eric Wand<br />Lei Wang <br />

2.
Loblaws: A History<br />Loblaw started in 1919 by Theodore Pringle Loblaw<br />Grew to 80 stores<br />George Weston Limited acquired Loblaw in 1947<br />Incorporated Loblaw Companies in 1956<br />Maintains 63% control of the company<br />Family-owned “Controlled Company”<br />Succession of control from father to son<br />

3.
Loblaws: Current Status<br />Over 1000 stores across Canada and the United States<br />Over 30B in sales per year<br />Controls a Financial Institution (PC Financial)<br />140,000 employees<br />Voted one of Canada’s Top 100 Employers<br />Top 10 Companies to Work For<br />One of Canada’s Greenest Employers in 2010<br />

4.
Strategic Outlook<br />Loblaw Companies Ltd is committed to a strategy developed under three core themes: Simplify, Innovate and Grow. <br />Weston: to be the best provider of bakery solutions and fresh dairy products to its customers.<br />Loblaws: to be the best in one-stop shopping for everyday household needs for Canadian consumers<br />

5.
Financial Outlook<br /><ul><li>Key Indicators

6.
Cash Flow</li></li></ul><li>Financial Outlook (cont’d)<br /><ul><li>Loblaws & Weston

7.
Share identical risks?

8.
“Internal Control over Financial Reporting”

9.
“Enterprise Risks and Risk Management”

10.
Share identical Responsibility-auditor?

11.
“Management’s Statement of Responsibility for Financial Reporting”

12.
“Independent Auditor’s report”</li></li></ul><li>Board Composition<br />Stephen E. <br />Bachand<br />Paul M. <br />Beeston<br />Gordon A.M. <br />Currie<br />Anthony S. <br />Fell<br />Anthony R. <br />Graham<br />John S. <br />Lacey<br />Allan L. <br />Leighton<br />Nancy H.O. <br />Lockhart<br />Pierre <br />Michaud<br />Thomas <br />O'Neill<br />Karen <br />Radford<br />Galen G. <br />Weston<br />John D. <br />Wetmore<br />

13.
Board Composition<br />13 nominees (and current directors) <br />11 men + 2 women<br />7 independents + 6 non-independents<br />Diverse experience<br />Retail, professional sports, banking, technology<br />All have extensive executive management experience in corporations other than Loblaw and Weston (except Galen Jr.)<br />

14.
Executive Chairman<br />Deputy Chair and President<br />Allan L. Leighton<br />Executive Chairman position created specifically for Galen Jr. 4 years ago.<br />Galen Jr.’s experience pales in comparison to rest of board.<br />Mr. Leighton is strategically placed to guide and mentor Galen Jr. <br />Galen G. Weston<br />

15.
Typical Director Profile<br />

16.
Loblaw Interlocking Overview<br />Public Board Interlocking is minimal<br />5 of 13 are interlocked with BCE or Weston<br />Interlocking may not be black & white<br />Alan Leighton is Deputy Chairman of Loblaw and Weston<br />Gordon Currie is Exec. Vice President and Chief Legal Officer at Loblaw and Weston<br />

17.
Public Board Interlocking<br />

18.
Committee Membership<br />

19.
Governance Committee<br />5 of 13 directors sit on board (incl. Chair)<br />Responsible to oversee compensation<br />Evaluate director performance<br />“It’s like grading your own midterm” – Professor Riven<br />

20.
Executive Committee<br />

21.
Executive Committee<br />Maintains a basic charter<br />Hold key positions at Loblaw and Weston<br />Deputy Chairman<br />Executive Chairman<br />Engages when ``it is not practicable for the full board to meet``<br />No meeting in 2009<br />

22.
Audit Committee<br />Made up entirely of independent directors<br />Members are financially literate<br />Oversee financial reporting, internal controls, disclosure controls, etc.<br />Must approve of any non-audit services provided by external auditors<br />Comply with applicable securities law rules<br />

23.
Financial Compensation<br />Compensation is determined by Corporate Governance Committee<br />Directors can<br />Opt for Deferred Share Units (DSU) as compensation<br />Choose the amount of DSUs they will receive<br />All but one Director receive DSUs--with varying proportions (ex. 100%, 50%, 86%)<br />DSU demonstrate a commitment to the long-term success of the company<br />

24.
CCGG Guidelines: Disclosure Practices<br />Section B.1 – Director selection and orientation: <br />Missing the skills matrix of its director talents<br />Missing an attendance list for orientation and continuing education programs<br />Section B.2 – Director background<br />Missing each director's "area of expertise" in the biographies<br />

25.
Disclosure Practices (cont’d)<br />Section B.3 – Director share ownership guidelines and continual reinvestment <br />Missing year-over-year change in share or DSU ownership for each director<br />Section B.4 – Director compensation / reinvestment programs and option plans<br />Loblaw's met with all the disclosure standards<br />

26.
Shareholder Relations<br />Approximately 40% of the company is owned by external shareholders.<br />Commendable Shareholder Relations for the “Minority”<br />Excellent Communication<br />Timely Reports<br />Webcasts of Earnings Reports and Quarterly Statements<br />Strict set of rules in its “Disclosure Policy”<br />

27.
Environmental Footprint<br />

28.
Recommendation<br />Based on the financials and the corporate governance of Loblaw Companies Ltd.:<br />Buy!<br />Risks:<br />Galen Jr. is young and inexperienced, but has surrounded himself with strong board members and leaders.<br />

29.
Questions?<br />

30.
Non-Public Board Conflict of Interest<br />

31.
Loblaw Pros vs. Cons<br />

32.
Closing Thoughts<br />Loblaw is fairly transparent to board and committee membership<br />Successfully leverages of NP 58-201<br />New Director Orientation<br />Continuous Training<br />Board Nominations<br />Succession Planning<br />“Don`t just look at board independence and size of a board... Look at the quality of the directors” – Shropshire, C.<br />

33.
Shrinking Environmental Impact<br />Leadership in Energy and Environmental Design (LEED) Loblaws Superstores<br />Sustainable Site Development<br />Water / Energy Efficiency (Solar, Wind power)<br />Materials Selection<br />Indoor Environmental Quality<br />First to establish “bag-less” service<br />Plastic bags are bio-degradeable<br />

34.
Green Is Good Business<br />PC Organics!<br />Save your health (at a healthy price premium)<br />No More Plastic Bags!<br />Unless you pay 5 cents for each one<br />Less Packaging!<br />Lower manufacturing costs, but you pay the same price<br />PC G.R.E.E.N! (44 products)<br />Save the environment and feel so good about it.<br />Margins are so tight that a 50M savings equals 5B in sales!<br />