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Loblaw To Record Approx. $368 Mln Charge In Q3 - Quick Facts

Loblaw Companies Limited (L.TO) announced, on September 7, 2018, the Tax Court of Canada issued a ruling for Loblaw in its decision relating to Glenhuron Bank Limited, a wholly-owned subsidiary of Loblaw that was wound up in 2013. Loblaw estimates that if it is unsuccessful in its appeal of the decision, it would be required to pay tax and interest of approximately $368 million. After deducting amounts already paid, the incremental cash payment would be approximately $242 million. Loblaw will record a charge of approximately $368 million or $0.98 per share in the third quarter of 2018.

Loblaw expects that it would be able to fund the required payment from cash on hand and without any impact on its capital investment plans, dividend growth or its share buyback program.

"We are pleased with the court's finding that Loblaw did not take any steps to avoid Canadian tax. We are, however, disappointed with the court's interpretation of a technical provision in the legislation. We strongly disagree and will appeal," said Sarah Davis, President, Loblaw Companies Limited.

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