Management's Discussion and Analysis (cont’d) Return on Equity (ROE) is calculated as follows: Net income, excluding after-tax business acquisition, integration  costs and other income or expenses  Divided by: Average common equity Average equity is calculated using common  equity for each of the preceding 13-month periods  Our return on equity (ROE) in 2011 was 17.5%. Income,  excluding business acquisition, integration costs and other  income or expenses, increased in 2011 and average debt  levels were higher, both contributing to a higher ROE in 2011.  Increased borrowing for the Icelandic USA Acquisition in  December 2011 is expected 1  to increase average leverage and return in equity for 2012. Excluding the Icelandic USA  Acquisition, ROE in 2011 was unchanged at 17.5%. All earnings before interest and taxes, excluding business acquisition,  integration costs and other income or expenses  Trailing 12-month earnings before interest and taxes as a  percentage of net sales is calculated as follows: Divided by: Sales, as disclosed on the consolidated statement of income  Our trailing 12-month earnings before interest and taxes  (EBIT) as a percentage of net sales revenue is 6.7%. This ratio  has improved slightly over the last year due to the Viking  Acquisition, where margins are higher on value-added  products and as we continue to improve performance from operations.  In 2011, our return on assets managed (ROAM) was 14.7%,  lower than our benchmark by 0.3 percentage points. Adjusted EBITDA in 2011 increased by $7.5 million over 2010;  however, the Icelandic USA average assets managed for one  month are included when income was included for only a  few days. Excluding the assets and income of Icelandic USA,  ROAM was 15.6%. Divided by: Average assets managed “Assets managed” include all assets,  excluding employee future benefits, and deferred income taxes, and less accounts payable Average assets managed is calculated  using the average net assets managed for each of the preceding 13-month periods  Adjusted EBITDA (as defined on page 37) less depreciation and  amortization = Earnings before interest and taxes (EBIT),  Return on Assets Managed (ROAM) is calculated as follows: Each of these is discussed below. Benchmark  2011 Actual Returns On assets managed  15.0%  14.7% On equity  14.0%  17.5% Profitability Trailing 12-month EBIT as  a percentage of net sales  6.0%  6.7% Financial Strength Interest-bearing debt to trailing  12-month EBITDA (not to exceed)  3.0x  4.4x Inventory Management Inventory turns  4.2x  3.7x % 2007* 2008* 2009* 2010 2011 0 2 4 6 8 10 12 14 16 18 14.7% Return on assets managed (also known as Return on Capital Employed) Based on EBIT (1)  (1) Excluding the pre-tax amount for business acquisition, integration costs,  and other income or expenses  * In accordance with Canadian GAAP (not restated) % 2007* 2008* 2009* 2010 2011 0 2 4 6 8 10 12 14 16 18 20 17.5% Return on equity Based on net income (1) (1) Excluding the after-tax amount for business acquisition, integration costs,  and other income or expenses  * In accordance with Canadian GAAP (not restated) 19 ANNUAL REPORT 2011