07
METRO INC. is a leader in the Canadian food industry with annual sales of close to $11 billion. It holds the second position in Canada’s two largest markets, Québec and
Ontario, operating a network of 553 food stores under the following banners: Metro,
Metro Plus, A&P, Dominion, Loeb, Ultra Food & Drug, The Barn Markets, Super C and Food
Basics. METRO also operates 263 drugstores under the Brunet, Clini Plus, Pharmacy and
Drug Basics banners. METRO, throughout its network, employs 65,000 people.
Financial Highlights
Message to Shareholders
Operations Review
Management’s Discussion and Analysis
Consolidated Financial Statements
Financial Retrospective
Directors and Officers
Shareholder Information
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16
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Transfert agent and registrar
Computershare
Investor Services
Stock listing
Toronto Stock Exchange
Ticker Symbol: MRU.A
Auditors
Ernst & Young LLP
Chartered Accountants
Head office address
11011 Maurice-Duplessis Blvd.
Montréal, Québec H1C 1V6
The Annual Information Form may be obtained from the
Investor Relations Department:
Tel.: (514) 643-1055
E-mail: finance@metro.ca
Vous pouvez vous procurer la version française de ce rapport auprès du service des relations avec les investisseurs.
METRO INC.’s corporate information and press releases are available on the Internet at the following address: www.metro.ca
Annual meeting
The Annual General Meeting of Shareholders will be held on January 29, 2008 at 11:00 a.m. at the:
Omni Mont-Royal Hotel
1050 Sherbrooke Street West
Montréal, Québec H3A 2R6
07
Declaration Date
January 28, 2008
April 15, 2008
August 6, 2008
September 23, 2008
Record Date
February 15, 2008
May 12, 2008
August 19, 2008
October 28, 2008
* Subject to approval by the Board of Directors.
Payment Date
March 10, 2008
June 2, 2008
September 3, 2008
November 18, 2008
*
2008 fIsCAl yEAR
PROJECTIONS Any statement contained in the present Report, which does not constitute an historical fact, may be deemed a projection. Verbs such as “believe”, “foresee”, “estimate” and other similar expressions appearing in the present Report generally indicate projections. These projections do not provide guarantees as to the future performance of METRO INC. and are subject to risks, both known and unknown, as well as uncertainties which may cause the outlook, profitability and actual results of METRO INC. to differ significantly from the profitability or future results stated or implied by these projections.

Operating results
(Millions of dollars)
Sales
EBITDA
(1) (2)
Adjusted EBITDA (1) (2) (4)
Operating income
Adjusted operating income (2)
Net earnings
Adjusted net earnings (2) (3)
Cash flows from operating activities
Financial structure
(Millions of dollars)
Total assets
Long-term debt
Shareholders’ equity
Per share
(Dollars)
Net earnings
Fully diluted net earnings
Adjusted fully diluted net earnings (2) (3)
Book value
Dividend
Financial ratios
(%)
EBITDA (1) (2) /sales
Operating income/sales
Return on shareholders’ equity
Share price
(Dollars)
High
Low
Closing price
(At year-end)
2007
(52 weeks)
10,644.6
625.5
656.0
459.8
490.3
276.6
295.0
363.3
4,273.9
1,038.9
1,932.3
2.40
2.37
2.53
16.88
0.45
5.9
4.3
15.1
41.78
33.23
35.00
(1) Earnings before interest, taxes, depreciation and amortization
(2) See section on “Non-GAAP measurements” on page 28
(3) For more information, see the “Net earnings adjustments“ table on page 20
(4) For more information, see the “EBITDA adjustments“ table on page 20
2006
(53 weeks)
10,944.0
610.5
628.0
432.6
450.1
253.0
257.6
392.0
4,163.9
1,116.6
1,723.8
2.21
2.18
2.22
15.02
0.415
5.6
4.0
15.6
36.00
28.47
33.60
Change
(%)
(2.7)
2.5
4.5
6.3
8.9
9.3
14.5
(7.3)
2.6
(7.0)
12.1
8.6
8.7
14.0
12.4
8.4
16.1
16.7
4.2
07
Sales
(Millions of dollars)
Adjusted net earnings (2) (3)
(Millions of dollars)
Adjusted fully diluted net earnings per share (2) (3)
(Dollars)
Shareholders’ equity
(Millions of dollars)
03 04 05 06 07 03 04 05 06 07 03 04 05 06 07 03 04 05 06 07
annual report 2007

During the year, METRO successfully faced and overcame numerous challenges. The integration of A&P Canada’s information systems with those of METRO was completed on schedule and the synergies generated by the acquisition of A&P Canada have exceeded our expectations.
The coming years will continue to be challenging, with increasing competition in the Canadian food industry, particularly with the development of new concepts.
As a member of METRO’s Board of Directors since 1987, a few months after it became a public company, I have observed first hand the many challenges this Company has faced and how it was able to successfully meet them.
In 1987, the Company acquired 12 Super C stores. Despite its initial difficulties, today
Super C has 58 stores and is one of our better performers. In 1992, the Company acquired 48 Steinberg stores, despite having encountered serious financial difficulties two years previously. Thanks to this acquisition, the Company expanded its footprint in Québec areas where it was under-represented. In 1998, with the consolidation of the food industry in Canada, many questioned the future of METRO. In 1999, the Company acquired the Loeb banner in Ontario and in the following years successfully defended and increased its market share while maintaining a strong, solid financial position. The acquisition of A&P Canada, in 2005, boosted the Company into second place in terms of market share in
Canada’s two largest markets, Québec and
Ontario. None of this would have been possible without a solid management team and strong strategic planning. Today, METRO is a leader in the Canadian food industry.
During these past twenty years, the Board of Directors has been involved in every step of the Company’s growth and has also played a major role in supporting

the management team, making the right decisions at the right time.
As a director, Chairman of the Board of Directors and Chair of the Corporate
Governance committee, I have been able to participate in the implementation of better corporate governance. One of the first rules that our Board implemented was ensuring that the majority of Board members were independent. Over the years, the Board of Directors put in place other measures aimed at improving corporate governance, including the revision of the code of ethics, the implementation of a continuous education program for Board members, the design of clear, written mandates for the Board, its committees as well as for the chairman, and the development of a list of competencies and expectations vis-à-vis its members. We can state proudly today that the Company is at least at par with other public companies with regard to corporate governance.
On behalf of the Board of Directors, I would like to take this opportunity to thank Bobbie
Andrea Gaunt for her contribution and support. Ms. Gaunt is leaving the Board of Directors, which she joined following the acquisition of A&P Canada. I also wish to welcome Réal Raymond, until recently
President and Chief Executive Officer of
National Bank of Canada, who will be nominated as a director at the January 29, 2008
Annual General Meeting of Shareholders.
Pierre H. Lessard, President and Chief
Executive Officer since 1990, will be retiring as of April 1, 2008, thus making 2008 a significant year in the Company’s history. METRO has experienced remarkable growth under his guidance: the Company’s net earnings have increased for 17 consecutive years, market capitalisation increased 70 times to over
$4 billion by 2007 fiscal year-end, and sales have increased by 500%. On behalf of the
Board of Directors, the shareholders and the management of METRO, I thank him and wish him a well-deserved and happy retirement.
Eric Richer La Flèche, who has held the position of Executive Vice-President and Chief Operating Officer for the last three years, will assume the position of
President and Chief Executive Officer as of April 1, 2008. I wish to offer my congratulations to Mr. Richer La Flèche for his appointment and I am sure that METRO will continue to flourish under his guidance, in the best interest of all concerned: clients, retailers, employees, shareholders and all other interested parties.
annual report 2007

For the 17 th consecutive year, net earnings rose in 2007, reaching $276.6 million, an increase of 9.3% over $253 million in 2006. Fully diluted net earnings per share were $2.37 compared to $2.18 last year, an increase of 8.7%.
Excluding non-recurring items recorded in the past two fiscal years, along with the effect of having a 53 rd week in 2006, the 2007 adjusted net earnings
(1)
would have been
$295 million compared to $251.2 million in 2006, an increase of 17.4%. On the same basis, adjusted net earnings per share (1) would have been $2.53 compared to $2.16 for 2006, an increase of 17.1%.
September 2007. In the spring of 2008, we will launch our Selection products.
We are also working on finalizing our plan regarding the rationalization of our five supermarket banners in Ontario and we will announce our intentions in 2008.
An important achievement in 2007 was the implementation of our information systems at A&P Canada. We now use one integrated system throughout the Company.
Our sales were $10,644.6 million, down
2.7% over the previous year. Excluding the effect of the 53 rd week in 2006, lower tobacco sales due to the decision of a major tobacco supplier to bypass wholesalers and sell directly to retailers, and the loss of revenues due to the sale, in the fourth quarter of 2006, of our interest in a grocery wholesaler, sales would have risen by 2%.
Our first objective is to grow the Company in order to create value for our shareholders.
We believe that a superior rate of return on capital, and increases in earnings and dividends per share will result in share appreciation. The dividend paid out during
2007 was $0.45 per share, an 8.4% increase over 2006. A total of $51.8 million in dividends was paid in 2007, representing 20.5% of the net income for 2006. For the 13 th consecutive year, the return on shareholder’s equity was above 15%, at 15.1%. The performance of METRO shares over the past 17, 10 and
5 fiscal years was 4,646%, 328% and 101% respectively, a performance superior to the
Canadian food industry sector.
Fiscal 2007 was a year of great challenges.
Following the acquisition of A&P Canada in
August 2005, we put in place an integration and rationalization plan, and we made major progress in its implementation since then.
Among other things, we converted our Super C discount stores in Ontario to the Food Basics banner and we closed some stores that were overlapping. We also established a national procurement group that contributed to attaining recurring synergies of over $90 million per year, exceeding our initial forecast of $60 million at the time of the acquisition. We also completed the appraisal of our portfolio of different private brands and decided to consolidate them throughout the organization under two brands: Irresistibles and Selection .
Their introduction to the marketplace began with the launch of the Irresistibles brand in
At the end of fiscal 2007, our financial position was very solid, despite our investment, together with our retailers, of $342.8 million in our ongoing program of expanding and remodelling our retail network. We had cash and cash equivalents of $100.5 million, an authorized but unused line of credit of
$400 million and a debt ratio (long-term debt to total capital) of 35%. Since our acquisition of A&P Canada, we have reimbursed
$255.5 million of our long-term debt.
During fiscal 2007, we also repurchased
822,300 Class A Subordinate shares for a total consideration of $28.9 million.
(1) See section on “Non-GAAP measurements” on page 28
annual report 2007

Again this year, we have budgeted investments, including those of our retailers, of over $300 million for the opening, expansion and remodelling of our retail network. We will continue to improve our merchandising programs in our supermarkets and discount stores, while emphasizing our cost controls, in order to maintain our competitiveness in the current environment. All these programs, combined with dynamic and committed teams of managers, allow us to look at the future with confidence.
These record results were achieved through the dedication and hard work of all our employees and retailers, and I wish to thank them for their support. After 17 years as President and Chief Executive Officer of
METRO, I have decided to retire when my employment contract expires on April 1, 2008.
I would like to thank each member of our management team for their unconditional commitment over these many years, and the members of the Board of Directors for their constant support. Their contribution was absolutely essential to the Company’s success. I would also like to thank our shareholders for their continued trust. I am confident that my successor, Eric Richer
La Flèche, who has been Executive Vice-
President and Chief Operating Officer for three years, and the management team at METRO will continue our tradition of excellence, growth and value creation for shareholders.

07
January
The implementation of our information systems across all Ontario distribution centres
may
The consolidation of three food service distribution centres into one located in Boucherville
February mcmahon distributeur pharmaceutique inc. moves to a larger distribution centre in Montréal
June
METRO’s reusable bags win the coveted
Phénix de l’environnement for management of recycled material
annual report 2007

July
The implementation of our information systems at the retail level in A&P Canada is completed
September
A&P expands its plastic bag recycling program to all Food Basics stores
June
METRO’s reusable bags win the coveted
Phénix de l’environnement for management of recycled material
June
The launch of our internal environmental program for employees, Leave it greener
September
Launch of METRO’s new Irresistibles brand
September
Opening of the
74 th metro Plus store, located in Gatineau
7 annual report 2007

07
annual report 2007

mETRO is a leader in food distribution in Canada and is the second largest food retailer in Québec and Ontario, the two largest food retail markets in Canada. The Company, throughout its network, operates 553 grocery stores and 263 drugstores, and employs
65,000 people.
* Millions of square feet
annual report 2007

07

2007 was the second year of a vast and ambitious integration and rationalization plan developed following the acquisition of A&P Canada. This plan was built around three principal pillars: our network of stores, the integration of our operations as well as the implementation of our information systems.
We decided, after our store network review in 2006, to convert the Super C discount food stores in Ontario to the Food Basics banner. In 2006, we closed a few overlapping stores that were no longer needed as a result of the acquisition of A&P Canada. In 2007, we also analyzed the possibility of rationalizing our five supermarket banners in the Ontario market: A&P, Dominion,
Loeb, ultra Food & Drug and The Barn Markets. Over the next fiscal year, we will announce our plans in this regard.
Throughout this analysis, we studied new market trends, consumer preferences and tastes, and used focus groups to gather consumer reaction to our project. As a result of this work, we are optimistic about its success.
During the course of the last two years, we have exchanged and adopted best business practices between the two provinces. Among other things, we introduced new products and programs in our two markets. We also established a national procurement group aimed at delivering the best costs for groceries and fresh products, and to develop new private brand programs. This national procurement group contributed significantly to the $90 million recurring annual synergies we achieved this fiscal year.
New private brands Following extensive research in 2007, we decided on two new private brands, which over the course of the next two years will replace the existing collection of private labels in both provinces. Our two-tier private brand offering will be available throughout our network, thereby reducing the total number of products and achieving synergies, while simplifying our message to consumers.
annual report 2007

Officially launched in the fall of 2007, our Irresistibles brand offers consumers premium quality products and exclusivities that reflect both market trends and changing consumer habits. Healthy, organic, allergy-free and fair trade are characteristics that distinguish our
Irresistibles line of products. Irresistibles products will also be complemented by the new Irresistibles Life Smart/Mieux-Être sub-brand. These health products respond to several strict criteria, such as containing no hydrogenated oil, artificial flavour or artificial colouring. They must also be low in fat, calories and salt; they must be a source of fibre and added value (prebiotic, Omega 3, inulin, probiotic and antioxidant) and be a source of vitamins and minerals.
By next spring, 850 products will be progressively introduced to the market and will complete the Irresistibles product line.
In the spring of 2008, we will be introducing our second private brand, Selection . The products in this brand category are equivalent in quality to national brands but are priced lower, offering consumers an excellent value. Over 2,000 products will be introduced on a progressive basis. We will have completed the changeover to the full range of Selection products within two years. At the same time, we will be introducing over the counter pharmaceutical products to Selection ’s health and beauty product lines.
Following the acquisition of A&P Canada, we reached an agreement with the vendor,
A&P uS, whereby we would continue to share their information systems for a period of two years, during which time we would implement our own systems.
In 2006, we concentrated our efforts on setting up our conversion plan and we completed the year with the implementation of the financial modules.
In 2007, we implemented our information systems in every sector of A&P Canada’s operations.
Five distribution centres, 236 stores, purchasing, marketing, real estate, engineering, human resources and payroll, along with several other functions migrated towards our new information systems. We now use a single integrated information system throughout the Company.
2 annual report 2007

The Company’s 379 supermarkets are spread across Québec and Ontario. This network consists of modern, convivial stores that are established in most communities. Our Metro and
Metro Plus banners in Québec as well as our A&P, Dominion,
Loeb, ultra Food & Drug and The Barn Markets banners in Ontario offer consumers fresh, top quality products and wide variety, delivered with personalized service in a warm, responsible and user-friendly environment.
Our supermarkets strive to offer consumers a unique shopping experience. The architecture, design and decor give consumers an opportunity to discover a variety of products and services in a specialized boutique atmosphere.
From boutiques dedicated to offering grocery products and frozen foods, meat, fish and seafood to deli, cheese, baked goods and health and beauty products, we also have readyto-eat foods prepared by chefs in-store, fresh-cut flowers, prepared cut fruit, organic products and sushi counters.
Our commercial offering is continuously being enriched with new products and services, ensuring customer satisfaction and loyalty. Ethnic products, gift cards with magnetic strips, automatic DVD rental kiosks, as well as small change converters are among the new services customers appreciate.
In most of our Ontario supermarkets, we also offer the
Air Miles ® loyalty program.
The shopping experience our customers enjoy is ensured by the know-how of all our store employees. The METRO
School of Professionals delivers employee training that enables each of them to respond effectively and efficiently to the needs of our customers.
Our website, www.metro.ca, has again been recognized as one of the most popular sites in Québec and has been ranked 6 th among most visited sites. Visitors are able to find over 3,000 recipes, menu ideas, a section on The Art Of Living as well as advice from our experts.
Our 174 discount stores, featuring Super C in Québec and Food Basics in Ontario, are the destination of choice for price-conscious consumers. By providing somewhat reduced variety and service, we can meet their needs and expectations for lower prices.

We continue to enhance the diversity of our ethnic product line to better respond to the needs of different communities.
We have created a smaller discount store format that is designed for smaller markets. During the year, we opened two such stores under the Super C banner in Québec.
The new decor in our discount stores, with a distinctive new signature and colours clearly identifying the Fresh zone and
Grocery zone, continued to be successfully deployed across the network in 2007.
We have 185 drugstores in Québec under our Brunet and
Clini Plus banners, and 78 drugstores in Ontario under our
Pharmacy and Drug Basics banners. Our drugstores offer professional, personalized service that is based first and foremost on health. In Ontario, our drugstores are located inside our food stores, thus benefiting from high traffic.
The Company is conscious of its social responsibilities and strives to offer employees a work atmosphere that is healthy and stimulating, to respect the environment, to promote health and food safety and to be active in the community.
The Company considers it a responsibility to respect and promote the environment. In 1998, we created an environmental policy that outlines in detail the measures we take to respect our legal environmental commitments and to improve our environmental performance on a continuous basis. This commitment is reflected in, among other things, our programs that manage recyclable material such as the recuperation of paper, cardboard and plastic in our stores and distribution centres. Due in part to these programs, in 2007, two affiliated Metro retailers won awards from Recyc-Québec’s Ici on recycle program. In Ontario, our stores offer consumers a plastic bag recycling program.
In 2006, the Company was the first to launch its own reusable bag program across all banners. This initiative was recognized in June 2007 when Québec’s Ministry of Sustainable Development awarded METRO the Phénix de l’environnement, its highest distinction. Over 3 million reusable bags have been sold in our stores in Québec and
Ontario since their launch.
To launch the Leave it greener program, METRO offered employees a reusable coffee mug to reduce or eliminate
Styrofoam cups.

The Company continues to innovate in the environmental field, most recently with phosphate-free and biodegradable products identified at shelf level. These initiatives are publicized through our new Leave it greener marketing program.
We are aware of the key role we play in the food chain and our responsibilities regarding food health and safety. We work closely with government authorities and we enforce the highest health and food safety standards throughout the distribution chain. Ongoing training programs are available to all employees. Our main meat processing and distribution centres are HACCP accredited (Hazard Analysis and Critical Control Point), the world’s highest standard in the industry. We have put in place tracing systems that would enable us, if necessary, to recall a given product. The labelling on our private brand products informs consumers of the product’s nutrition values. We have also developed an emergency plan that would be deployed in the event of an avian flu pandemic.
The Company is conscious of its economic and social role within the community. The Company worked closely with the Québec government and joined in the awareness campaign launched by the government in 2007, mangezquebec.com, a program created to promote fruits and vegetables grown in Québec. At the same time, the Company worked with the Ontario government to promote homegrown products in Ontario in the Buy Ontario program. The
Company supports organizations and institutions working in the fields of education, health and well being. METRO was an integral part of a charity program called Growing Great
Kids in Ontario, which raises funds for children’s nutrition, care and support.
5 annual report 2007

07
TABLE OF CONTENTS
Vision and strategies
Company profile
Principal performance indicators
Highlights
Operating results
Quarterly highlights
Financial position
Cash position
Sources of financing
Contractual obligations
Derivative financial instruments
Related party transactions
Fourth quarter
Non-GAAP measurements
Significant accounting estimates
New accounting policies
Subsequent event
Disclosure controls and procedures
Risk management
Outlook
16 annual report 2007
The following Management Discussion and Analysis sets out the financial position and consolidated results of METRO INC. for the fiscal year ended September 29, 2007, and should be read in conjunction with the annual consolidated financial statements and the accompanying notes as at September 29, 2007. The present analysis is based upon information as at November 30, 2007 unless otherwise indicated. Additional information, including the Annual Information Form and Certification Letters for fiscal 2007, is available on the SEDAR website at www.sedar.com.
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Our vision is to create, over time, value for our shareholders. We believe that a superior rate of return on capital, and increases in earnings and dividends per share will result in share appreciation. Our strategies extend over several aspects n
Maintaining a retail network ranking among the most modern and competitive in the various segments in which we operate n
Developing merchandising programs adapted to the needs of the consumer and to our economic and competitive environment n
Offering consumers a wide variety of quality products, including distinctive private label products n
Implementing management and operational methods to increase both our efficiency and our profitability n
Training and developing our employees in order to ensure our longevity and expansion n
Aiming for a solid financial position n
Remaining poised to take advantage of opportunities to expand our share of the food and pharmaceutical markets.
The Company ranks second in the two largest markets of the Canadian food industry, Québec and Ontario.
The Company, as a retailer and a distributor, operates under different banners within the traditional supermarket and discount segments. For those consumers wanting service, variety, freshness and quality, we operate
379 supermarkets under the banners Metro, Metro Plus, A&P, Dominion, Loeb, Ultra Food & Drug and The Barn
Markets. The 174 discount stores operating under the Super C and Food Basics banners offer products at low prices to consumers who are both cost and quality conscious. The majority of these stores are either corporate or owned by variable interest entities (VIEs) and their financial statements are consolidated with those of the Company.
A large number of Metro and Metro Plus stores and some Loeb stores are operated by independent owners bound to the Company by leases or affiliation agreements. Supplying these stores contributes to our sales. The Company also acts as a distributor by providing small-surface food stores and convenience stores with banners that reflect their environment and customer base. Supplying these stores, as well as restaurant chains and convenience stores owned by oil companies, also contributes to the Company’s sales.
We also act as franchisor and distributor for the 185 franchised Brunet and Clini Plus drugstores, owned by independent pharmacists. Our sales include the royalties received from the franchisees as well as through our role as their supplier.
We also operate 78 drugstores under the banners Pharmacy and Drug Basics. Their sales are included in those of the
Company. Supplying non-franchised drugstores and various health centres also contributes to our sales.
In order to ensure that our strategies are effective and that our objectives are reached, we rely upon various performance indicators, the principal being as follows n
Sales n
Earnings before interest, taxes, depreciation and amortization as a percentage of sales n
Net earnings as a percentage of sales n
Return on shareholders’ equity n
Total retail floor space in square footage
The following comments are based in part on these principal performance indicators.
Total Square Footage
(Millions of square feet)
Adjusted EBITDA (1) (2) (3)
(Millions of dollars)
(1) Adjusted earnings before interest, taxes, depreciation
and amortization
(2) See section on “Non-GAAP measurements” on page 28
(3) For more information, see “EBITDA adjustments” table on page 20 03 04 05 06 07 03 04 05 06 07
17 annual report 2007

(Millions of dollars, unless otherwise indicated)
Sales
Net earnings
Adjusted net earnings (1)
Fully diluted net earnings
per share
(Dollars)
Adjusted fully diluted net earnings
per share (1) (Dollars)
Return on shareholders’ equity
(%)
Dividend rate per share
(Dollars)
Total assets
Longt-term debt
2007
(52 weeks)
10,644.6
276.6
295.0
2.37
2.53
15.1
0.45
4,273.9
1,038.9
2006
(53 weeks)
10,944.0
253.0
257.6
2.18
2.22
15.6
0.415
4,163.9
1,116.6
Change
(%)
(2.7)
9.3
14.5
8.7
14.0
—
8.4
2.6
(7.0)
2005
(52 weeks)
6,646.5
190.4
190.4
1.92
1.92
16.1
0.385
3,927.3
1,205.0
Change
(%)
64.7
32.9
35.3
13.5
15.6
—
7.8
6.0
(7.3)
Sales were $10,644.6 million in 2007, a 2.7% decrease compared with 2006. Sales for 2006 had increased by 64.7%, to $10,944 million compared to $6,646.5 million for 2005. The decrease in sales for 2007 compared with 2006 is due primarily to the impact of the 53 rd week in fiscal 2006, decreased sales of tobacco products as a result of a major tobacco manufacturer’s decision to sell directly to retailers as of the fall of 2006 and lost sales due to the disposal, at the end of the fourth quarter of 2006, of our interest in a grocery wholesaler. Excluding these items, sales for 2007 would have increased by 2%. The principal reason for the increase in sales for 2006 compared with 2005 was the
Company’s acquisition of A&P Canada on August 13, 2005. This acquisition, with sales of approximately $4.6 billion, contributed to six weeks of fiscal 2005 and to all 53 weeks of 2006. Net earnings for fiscal 2007 were $276.6 million, a 9.3% increase compared with the previous fiscal year. Net earnings for 2006 had increased by 32.9%, to
$253 million compared to $190.4 million for 2005. The marked increase in net earnings for 2006 compared with that from 2006 to 2007 is due primarily to A&P Canada’s contribution to all 53 weeks of fiscal 2006 compared with its contribution to six weeks of fiscal 2005. Fully diluted net earnings per share increased by 8.7% in 2007, to $2.37.
Fully diluted net earnings per share for 2006 had increased by 13.5%, to $2.18 compared to $1.92 in 2005. This marked increase in fully diluted net earnings per share for 2006 compared with that from 2006 to 2007 is also due to the
A&P Canada acquisition at the end of fiscal 2005.
The Company recorded non-recurring events for both 2007 and 2006. These events consisted of pre-tax integration and rationalization costs of $30.5 million for 2007 and $28 million for 2006, a pre-tax investment disposal gain of
$10.5 million for 2006 and net decreases in income tax expenses of $1.8 million for 2007 and $5.5 million for 2006.
Excluding these non-recurring events, adjusted net earnings (1) for fiscal 2007 would have been $295 million compared to $257.6 million for 2006, a 14.5% increase. Adjusted fully diluted net earnings per share (1) for 2007 would have been $2.53 compared to $2.22 for 2006, a 14% increase.
Return on shareholders’ equity totalled 15.1% in 2007, 15.6 % in 2006 and 16.1% in 2005. Annual dividends totalled
$51.8 million in 2007, $47.5 million in 2006 and $38.9 million in 2005, respectively representing 20.5%, 25% and 23% of net earnings for the preceding fiscal years. Total assets were $4,273.9 million in 2007, $4,163.9 million in 2006 and
$3,927.3 million in 2005. Long-term debt was $1,038.9 million in 2007, $1,116.6 million in 2006 and $1,205 million in 2005.
(1) See section on “Non-GAAP measurements” on page 28
18 annual report 2007

SALES Sales were $10,644.6 million in 2007 compared to $10,944 million in 2006, a 2.7% decrease. Excluding the 53 rd week in fiscal 2006, decreased sales of tobacco products and lost sales due to the disposal, at the end of the fourth quarter of 2006, of our interest in a grocery wholesaler, sales for 2007 would have increased by 2% compared with 2006.
Explanation of sales variation
(Millions of dollars, unless otherwise indicated)
Sales
53 rd week
Tobacco products sales decrease
Disposal of interest in a grocery wholesaler
Adjusted sales (1)
2007
10,644.6
—
—
—
10,644.6
2006
10,944.0
(198.6)
(202.9)
(102.1)
10,440.4
Change
(%)
(2.7)
1.8
1.9
1.0
2.0
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA) (1) Earnings before interest, taxes, depreciation and amortization were $625.5 million for fiscal 2007, or 5.9% of sales, compared to $610.5 million or 5.6% of sales for 2006. Our share of earnings from our investment in Alimentation Couche-Tard was $25.3 million for fiscal 2007, compared to $22.3 million for the previous year.
Following the acquisition of A&P Canada, we developed an integration and rationalization plan for our operations.
This three-part plan dealt with our store network, the integration of our operations and the implementation of our information systems at A&P Canada.
This integration and rationalization plan, initially estimated at $55 million over two years and having generated costs of $28 million in fiscal 2006, was revised during 2007 in order to properly integrate the Loeb Canada operations with those of A&P Canada. Costs of $30.5 million were recorded for 2007.
Integration and rationalization costs
(Millions of dollars)
Stores
Integration of operations
Implementation of information systems
2007
8.4
10.6
11.5
30.5
2006
11.9
13.9
2.2
28.0
Total
20.3
24.5
13.7
58.5
Excluding these non-recurring events, the contribution of the 53 rd week in fiscal 2006 and our share of earnings from our investment in Alimentation Couche-Tard, EBITDA for 2007 would have been $630.7 million or 5.9% of sales, compared to $594.3 million or 5.5% of sales for the previous fiscal year.
Despite more competitive market conditions, we managed to improve fiscal 2007 gross margin levels against the previous year’s.
In fiscal 2007, we realized over $90 million in synergies, exceeding the target of $60 million a year we had set when we acquired A&P Canada. These synergies consist mainly of lower costs for goods purchased for resale.
(1) See section on “Non-GAAP measurements” on page 28
19 annual report 2007

EBITDA adjustments
(Millions of dollars, unless otherwise indicated)
EBITDA (1)
Integration and rationalization costs
Investment disposal gain
Adjusted EBITDA (1)
Share of earnings from our
investment in Alimentation
Couche-Tard
53 rd week
Adjusted EBITDA excluding share
of earnings and 53 rd week
EBITDA
Fiscal 2007
Sales
625.5 10,644.6
30.5 —
— —
656.0 10,644.6
(25.3)
—
—
—
630.7 10,644.6
EBITDA /
Sales (%)
5.9
0.3
—
6.2
(0.3)
—
5.9
EBITDA
Fiscal 2006
Sales
610.5 10,944.0
28.0 —
(10.5) —
628.0 10,944.0
(22.3)
(11.4)
—
(198.6)
594.3 10,745.4
EBITDA /
Sales (%)
5.6
0.2
(0.1)
5.7
(0.2)
—
5.5
INTEREST, DEPRECIATION AND AMORTIZATION Total depreciation and amortization expenses for fiscal 2007 were $165.7 million compared to $177.9 million for the previous fiscal year. This decrease results primarily from additional amortization charges in fiscal 2006, following the reassessment of the useful life of certain assets.
Interest expenses totalled $61.6 million for fiscal 2007, versus $68.7 million for 2006. This decrease is due primarily to a debt reduction of $79.9 million in fiscal 2007. Interest rates for fiscal 2007 averaged 5.4% compared to 5% for the previous fiscal year.
INCOME TAXES Income tax expenses for fiscal 2007 totalled $125.2 million, representing an effective tax rate of 31.4%, compared with income tax expenses of $107 million and an effective tax rate of 29.4% for the previous year.
During each of these fiscal years, authorities approved future tax rate changes applicable to large corporations.
These tax rate changes brought about a net decrease in our future income tax liabilities as well as corresponding income tax expense decreases of $1.8 million for 2007 and $5.5 million for 2006. Excluding net income tax expense decreases, our effective tax rate would have been 31.9% for fiscal 2007 and 30.9% for 2006.
NET EARNINGS Net earnings for fiscal 2007 were $276.6 million, compared to $253 million in 2006, a 9.3% increase. Fully diluted net earnings per share increased by 8.7%, to $2.37, compared to $2.18 for the previous year.
Excluding pre-tax integration and rationalization costs of $30.5 million for 2007 and $28 million for 2006, a pre-tax investment disposal gain of $10.5 million for 2006 and net decreases in income tax expenses of $1.8 million for 2007 and $5.5 million for 2006, adjusted net earnings
(1)
for fiscal 2007 would have been $295 million, a 14.5% increase compared to $257.6 million for the previous fiscal year. Adjusted fully diluted net earnings per share (1) would have been $2.53, a 14% increase compared to $2.22 for 2006. Excluding the impact of the 53 rd week of 2006, adjusted net earnings (1) and adjusted fully diluted net earnings per share (1) for 2007 increased by 17.4% and 17.1% respectively.
Net earnings adjustments
Net earnings
Integration and rationalization
costs after taxes
Gain on disposal of investment
after taxes
Decrease in tax expense
Adjusted net earnings (1)
53 rd week
Adjusted net earnings (1)
excluding 53 rd week
Fiscal 2007
(Millions Fully diluted of dollars) EPS (Dollars)
276.6 2.37
20.2
—
(1.8)
295.0
—
295.0
0.18
—
(0.02)
2.53
—
2.53
Fiscal 2006 Change (%)
(Millions Fully diluted of dollars) EPS (Dollars) Net earnings
Fully diluted
EPS
253.0 2.18 9.3 8.7
18.7
(8.6)
(5.5)
257.6
(6.4)
251.2
0.16
(0.07)
(0.05)
2.22
(0.06)
2.16
14.5
17.4
14.0
17.1
(1) See section on “Non-GAAP measurements” on page 28
20 annual report 2007

(Millions of dollars, unless otherwise indicated)
Sales
Q1 (2)
Q2 (2)
Q3 (3)
Q4 (4)
Year
Net earnings
Q1 (2)
Q2 (2)
Q3 (3)
Q4 (4)
Year
Adjusted net earnings
(1)
Q1 (2)
Q2 (2)
Q3 (3)
Q4 (4)
Year
Fully diluted net earnings per share
(Dollars)
Q1 (2)
Q2 (2)
Q3 (3)
Q4 (4)
Year
Adjusted fully diluted net earnings per share
(1) (Dollars)
Q1 (2)
Q2 (2)
Q3 (3)
Q4 (4)
Year
(2) 12 weeks
(3) 16 weeks
(4) 2007 - 12 weeks, 2006 - 13 weeks
2007
(52 weeks)
2,515.0
2,356.2
3,341.0
2,432.4
10,644.6
67.9
61.8
89.3
57.6
276.6
71.6
65.5
91.1
66.8
295.0
0.58
0.53
0.77
0.49
2.37
0.62
0.56
0.78
0.57
2.53
2006
(53 weeks)
2,521.7
2,412.1
3,336.7
2,673.5
10,944.0
32.0
57.0
85.1
78.9
253.0
49.6
58.7
78.3
71.0
257.6
0.28
0.49
0.73
0.68
2.18
0.43
0.50
0.68
0.61
2.22
Change
(%)
112.2
8.4
4.9
(27.0)
9.3
44.4
11.6
16.3
(5.9)
14.5
107.1
8.2
5.5
(27.9)
8.7
(0.3)
(2.3)
0.1
(9.0)
(2.7)
44.2
12.0
14.7
(6.6)
14.0
The variations in our results over the last four quarters are due primarily to the effect of our integration plan during those quarters, and the synergies achieved.
Quarterly sales for 2007, with those for 2006, were affected by decreased sales of tobacco products, lost sales due to the disposal, in the fourth quarter of 2006, of our interest in a grocery wholesaler, the fact that Christmas week fell in the first quarter of 2007 rather than the second quarter as in 2006 and the impact of the 53 rd week in fiscal 2006.
Excluding these items, sales for the first, second, third and fourth quarters of 2007 would have increased by 0.6%,
3%, 3.2% and 0.7% respectively, compared with the corresponding quarters of 2006.
Net earnings and fully diluted net earnings per share for the last four quarters were affected by, among other things, integration and rationalization costs related to the A&P Canada acquisition, an investment disposal gain and income tax expense variations resulting from fluctuations in tax rates applicable to large corporations announced by both governments.
(1) See section on “Non-GAAP measurements” on page 28
21 annual report 2007

Excluding these non-recurring events, increases in adjusted net earnings (1) and adjusted fully diluted net earnings per share
(1)
for the first three quarters of 2007, compared with those for the corresponding quarters of 2006, are due primarily to more effective merchandising programs and further synergies.
Excluding the impact of the 53 rd week in fiscal 2006, adjusted net earnings
(1)
and adjusted fully diluted net earnings per share (1) for the fourth quarter of 2007 increased compared with those for the corresponding quarter of the previous fiscal year.
(Millions of dollars)
Net earnings
Integration
and rationalization
costs after taxes
Gain on disposal
of investment after taxes
(Decrease) increase
in tax expense
Adjusted net earnings (1)
53 rd week
Adjusted net earnings (1)
excluding 53 rd week
Q1 Q2
2007
Q3 Q4
Fiscal year Q1
67.9 61.8 89.3 57.6 276.6 32.0
3.7
—
—
71.6 65.5
—
71.6
3.7
—
—
—
65.5
3.6
—
(1.8)
91.1
9.2
—
—
20.2
—
(1.8)
66.8 295.0
12.3
—
5.3
49.6
Q2
2006
Q3 Q4
Fiscal year
57.0 85.1 78.9 253.0
1.7
—
—
58.7
2.6
—
(9.4)
78.3
2.1
(8.6)
(1.4)
64.6
18.7
(8.6)
(5.5)
91.1 66.8 295.0 49.6 58.7 78.3 71.0 257.6
— — — — — — (6.4) (6.4)
251.2
(Dollars) Q1 Q2
2007
Q3 Q4
Fiscal year Q1 Q2
2006
Q3 Q4
Fiscal year
Fully diluted net earnings
per share
Integration and rationalization
0.58 0.53 0.77 0.49 2.37 0.28 0.49 0.73 0.68 2.18
costs after taxes per share 0.04 0.03 0.03 0.08 0.18 0.10 0.01 0.03 0.02 0.16
Gain on disposal of investment
after taxes per share
(Decrease) increase in tax
— — — — — — — — (0.07) (0.07)
expense per share — — (0.02) — (0.02) 0.05 — (0.08) (0.02) (0.05)
Adjusted fully diluted
net earnings per share (1)
53 rd week
Adjusted fully diluted
net earnings per share (1)
excluding 53 rd week
0.62 0.56 0.78 0.57 2.53 0.43 0.50 0.68 0.61 2.22
— — — — — — — — (0.06) (0.06)
0.62 0.56 0.78 0.57 2.53 0.43 0.50 0.68 0.55 2.16
The Company’s financial position was very solid at the end of fiscal 2007. Cash and cash equivalents totalled
$100.5 million as at September 29, 2007. Our $400 million authorized line of credit remained unused. Our long-term debt corresponds to 35% of the combined total of long-term debt and shareholders’ equity (long-term debt/total capital).
(1) See section on “Non-GAAP measurements” on page 28
22 annual report 2007

At the end of the fiscal year, the main elements of our long-term debt were as follows:
Credit Facility A
Medium-term Series A Notes
Medium-term Series B Notes
Interest rate
Rates fluctuate with changes
in bankers’ acceptance rates
4.98% fixed rate
5.97% fixed rate
Balance due
(Millions of dollars)
394.5
Maturity
August 15, 2012
200.0 October 15, 2015
400.0 October 15, 2035
At the end of the fiscal year, interest rate swap agreements in the notional amount of $150 million were outstanding under Credit Facility A. These agreements provide for the exchange of variable interest payments for fixed interest payments according to the following terms:
Fixed rates
3.9480%
3.9820%
4.0425%
Notional amount
(Millions of dollars)
Maturity
50 November 23, 2008
50 December 16, 2009
50 December 16, 2010
Giving effect to these swap agreements, at the end of fiscal 2007, long-term indebtedness comprised $750 million at fixed rates ranging from 4.3980% to 5.97% and $244.5 million at variable rates which fluctuate with changes in bankers’ acceptance rates.
Our principal financial ratios were as follows:
Financial structure
Long-term debt (Millions of dollars)
Shareholders’ equity
(Millions of dollars)
Long-term debt/total assets (%)
Results
EBITDA
(1)
/Interest
(Times)
As at
September 29
2007
1,038.9
1,932.3
35.0
2007
10.2
As at
September 30
2006
1,116.6
1,723.8
39.3
2006
8.9
CAPITAL STOCk
(Thousands)
Balance as at beginning of fiscal year
Share issue
Share redemption
Share conversion
Acquisition of treasury shares
Balance as at fiscal year-end
Balance as at November 30, 2007
and December 1, 2006
Class A
Subordinate Shares
2007 2006
113,852
659
(822)
76
(82)
113,683
112,215
113,504
377
—
43
(72)
113,852
114,052
Class B
Shares
2007
880
—
—
(76)
—
804
772
2006
923
—
—
(43)
—
880
858
(1) See section on “Non-GAAP measurements” on page 28
23 annual report 2007

STOCk OPTION PLAN
Number of stock options (Thousands)
Exercise prices
(Dollars)
Weighted average exercise price (Dollars)
PERFORMANCE ShARE uNITS PLAN
Performance share units
(Thousands)
Weighted average maturity
(Months)
As at As at As at
November 30 September 29 September 30
2007 2007 2006
3,709 3,738 4,233
11.80 to 39.17 11.80 to 39.17 8.73 to 33.87
22.31 22.40 20.85
As at As at As at
November 30 September 29 September 30
2007 2007 2006
146
21
124
22
48
30
ISSuER BID PROGRAM The issuer bid program provides the Company with an additional option for using excess funds. Thus, we will be able to decide, in the shareholders’ best interest, to reimburse debt or to repurchase shares of the Company. The Company could repurchase, in the normal course of business between September 5, 2006 and September 4, 2007, up to 3 million of its Class A Subordinate Shares representing approximately 2.6% of its issued and outstanding shares as at the close of the Toronto Stock Exchange on August 7, 2006. The issuer bid program has been renewed so that the Company may repurchase, in the normal course of business between
September 5, 2007 and September 4, 2008, up to 4 million of its Class A Subordinate Shares representing approximately 3.5% of its issued and outstanding shares as at the close of the Toronto Stock Exchange on
August 8, 2007. Repurchases will be made through the stock exchange at market price and in accordance with its policies and regulations. The Class A Subordinate Shares so repurchased will be cancelled. Over fiscal 2007, as part of its normal course of business, the Company repurchased 822,300 Class A Subordinate Shares at an average share price $35.23, for a total of $28.9 million.
DIVIDEND POLICY The Company’s dividend policy is to pay an annual dividend representing approximately
20% of net earnings for the previous fiscal year before extraordinary items. For the thirteenth consecutive year, the Company paid quarterly dividends to its shareholders. The annual dividend increased by 8.4%, to $0.45 per share, compared to $0.415 in 2006, for total dividends of $51.8 million in 2007 compared to $47.5 million in 2006, a
9.1% increase. On an annualized basis, dividends paid in 2007 represented approximately 20.5% of net earnings for the preceding fiscal year, compared to 25% in 2006.
ShARE TRADING The value of METRO shares remained in the $33.23 to $41.78 range throughout fiscal 2007
($28.47 to $36.00 in 2006). A total of 56.1 million shares traded on the Toronto Stock Exchange during the fiscal year
(41.7 million in 2006). The closing price on Friday, September 28, 2007 was $35.00, compared to $33.60 at the end of fiscal 2006. Since fiscal year-end, the value of METRO shares has remained in the $26.15 to $35.85 range. The closing price on November 30, 2007 was $29.00. METRO shares have maintained sustained growth over the last 17 years, reflecting a performance superior to that of the S&P/TSX index and the food industry sector index.
Dividend per Share
(Dollars)
03 04 05 06 07
24 annual report 2007
Comparative Share Price Performance*
5,593.71
METRO Inc.
S&P/TSX Food Retail
S&P/TSX
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07
982.20
644.00
* $100 invested on
September 30, 1990 in shares, including reinvestment of dividends and measured each year on September 30

OPERATING ACTIVITIES Operating activities generated cash flows in the amount of $363.3 million in fiscal 2007, compared to $392 million in the previous fiscal year. This decrease is due primarily to changes in non-cash working capital from operating activities.
INVESTING ACTIVITIES Investing activities required $258.9 million in fiscal 2007, compared to $181.9 million for the previous fiscal year. This increase is due primarily to the acquisition of additional fixed assets related to new store construction, expansion and renovation projects. In 2007, we acquired additional fixed assets for a total amount of $229.7 million compared to $170.7 million in 2006.
In fiscal 2007, the Company and retailers invested $342.8 million in our retail network for a gross expansion of 858,000 square feet or 4.6%, and a net expansion of 178,000 square feet. Major renovations and expansions of 53 stores were completed and 15 new stores were opened.
FINANCING ACTIVITIES Financing activities required outflows of $169.6 million over fiscal 2007, compared to
$138.2 million over fiscal 2006. This increase in outflows is attributable mainly to the redemption of shares in the amount of $28.9 million in 2007. There was no redemption of shares in 2006.
Our operating activities generated cash flows in the amount of $363.3 million in 2007. These cash flows were sufficient to finance our investing activities, including the acquisition of $273.3 million in fixed and intangible assets.
At 2007 fiscal year-end, our financial position was principally comprised of cash and cash equivalents in the amount of $100.5 million, an unused revolving line of credit in the amount of $400 million, Credit Facility A in the amount of
$394.5 million, $200 million in medium-term notes at a rate of 4.98% maturing in 2015 and $400 million in mediumterm notes at a rate of 5.97% maturing in 2035.
We believe that cash flows from next year’s operating activities should also be sufficient to finance the Company’s investing and financing activities, including investments of $300 million in fixed and intangible assets.
(Millions of dollars)
Payment commitments by fiscal year
2008
2009
2010
2011
2012
2013 and thereafter
Service Operating Lease/
Loans
Medium-term Capital lease contract lease sublease notes commitments commitments commitments commitments (1)
1.4
1.2
0.9
0.4
394.7
6.6
405.2
33.8
33.8
33.8
33.8
33.8
1,179.2
1,348.2
7.7
7.2
6.5
5.2
5.2
34.7
66.5
82.7
80.3
42.7
14.8
0.1
—
220.6
144.2
140.3
127.0
113.8
104.1
613.0
1,242.4
35.3
33.1
30.6
28.5
26.6
207.6
361.7
Total
305.1
295.9
241.5
196.5
564.5
2,041.1
3,644.6
(1) The Company has lease commitments with varying terms through 2031, to lease premises which it sublets to clients, generally
under the same conditions
25 annual report 2007

The Company adopted a risk management policy, approved by the Board of Directors in December 2005, setting forth guidelines relating to its use of derivative financial instruments. These guidelines prohibit the use of derivatives for speculative purposes. In 2007, the Company used derivative financial instruments as described in Notes 2, 3 and 22 to the consolidated financial statements.
We have concluded transactions with companies controlled by members of the Board of Directors, namely Maryse
Labonté, Serge Ferland and Jacques Chevrefils, who was a member of the Board of Directors until the Annual
General Meeting of Shareholders held on January 24, 2006. In the normal course of business, sales are made to stores operated by these companies. Also, sales transactions have been concluded with a company affiliated with the Company up to August 2006 and service charges have been incurred relating to information systems provided by A&P US. Note 20 to the financial statements provides further information regarding these transactions.
(Millions of dollars, unless otherwise indicated)
Sales
Earnings before interest, taxes, depreciation and amortization (1)
Adjusted earnings before interest, taxes, depreciation
and amortization (1)
Net earnings
Adjusted net earnings (1)
Fully diluted net earnings per share
(Dollars)
Adjusted fully diluted net earnings per share (1) (Dollars)
Cash flows from:
Operating activities
Investing activities
Financing activities
2007
(12 weeks)
2,432.4
134.9
149.0
57.6
66.8
0.49
0.57
44.8
(70.6)
(120.7)
2006
(13 weeks)
2,673.5
170.1
162.8
78.9
71.0
0.68
0.61
72.5
(53.2)
(112.0)
SALES Sales for the fourth quarter of 2007 were $2,432.4 million versus $2,673.5 million recorded for the corresponding quarter of the previous fiscal year, a 9% decrease. Excluding the 53 rd week of 2006, decreased sales of tobacco products and lost sales due to the disposal, in the fourth quarter of 2006, of our interest in a grocery wholesaler, sales would have increased by 0.7%. Same-store sales increased by 0.2% in the fourth quarter of 2007.
Explanation on sales variation
(Millions of dollars, unless otherwise indicated)
Sales
53 rd week
Tobacco products sales decrease
Disposal of interest in a grocery wholesaler
Adjusted sales
(1)
2007
(12 weeks)
2,432.4
—
—
—
2,432.4
2006
(13 weeks)
2,673.5
(198.6)
(41.0)
(17.5)
2,416.4
Change
(%)
(9.0)
7.3
1.7
0.7
0.7
Change
(%)
(9.0)
(20.7)
(8.5)
(27.0)
(5.9)
(27.9)
(6.6)
—
—
—
(1) See section on “Non-GAAP measurements” on page 28
26 annual report 2007

EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA) (1) EBITDA for the fourth quarter of 2007 were $134.9 million versus $170.1 million for the same quarter last year. Fourth quarter integration and rationalization costs were $14.1 million in 2007 and $3.2 million in 2006. We also realized an investment disposal gain of $10.5 million before taxes in the fourth quarter of 2006. Our fourth quarter share of earnings from our investment in Alimentation Couche-Tard was $7.6 million in 2007 compared to $5.2 million in 2006.
Excluding these non-recurring items, the impact of the 53 rd week on 2006 fourth quarter EBITDA, as well as the share of earnings from our investment in Alimentation Couche-Tard, 2007 fourth quarter EBITDA would have been $141.4 million or 5.8% of sales versus $146.2 million or 5.9% of sales in 2006. Despite more competitive market conditions, we managed to keep fourth quarter gross margin levels similar to those for the corresponding quarter of the previous fiscal year.
INTEREST, DEPRECIATION AND AMORTIZATION Depreciation and amortization expenses totalled
$39.7 million for the fourth quarter of 2007, compared to $42.7 million for the corresponding quarter of the previous year. This decrease results primarily from additional amortization charges in fiscal 2006 following the reassessment of the useful life of certain assets. Fourth quarter interest expenses totalled $14 million versus
$15.7 million for the corresponding quarter of the previous year.
INCOME TAXES The 2007 fourth quarter income tax expenses of $26.1 million represent an effective tax rate of 32.1%. The 2006 fourth quarter tax expenses of $32.7 million represented an effective tax rate of 29.3%. In 2007, the Canadian government completed milestones in the approval process for the federal budget providing, among other things, a 0.5% decrease in the large business tax rate, effective January 1, 2011.
In the fourth quarter of 2006, we completed the purchase price allocation for A&P Canada, notably for the value of future income tax assets and liabilities. The decrease in the federal large business tax rate announced in 2006 brought about an adjustment in future income tax assets and liabilities, as defined by the final purchase price allocation for A&P Canada as well as an equivalent decrease of $1.4 million in our tax expense for the fourth quarter of 2006.
Excluding all these additional tax expense changes, the effective tax rate for the 2007 fourth quarter would have been 32.1% versus 30.5% for the 2006 fourth quarter.
NET EARNINGS Net earnings for the fourth quarter of 2007 were $57.6 million compared to $78.9 million for the corresponding quarter of fiscal 2006. Fully diluted net earnings per share were $0.49 compared to $0.68 last year. Excluding integration and rationalization costs of $14.1 million before taxes for 2007 fourth quarter and of
$3.2 million before taxes for the corresponding quarter of 2006, as well as the $1.4 million tax expense decrease and the investment disposal gain of $10.5 million before taxes in the fourth quarter of 2006, adjusted net earnings (1) for the fourth quarter of 2007 would have been $66.8 million, compared to $71 million for the corresponding quarter of 2006. Adjusted fully diluted net earnings per share (1) would have been $0.57 compared to $0.61 for the corresponding quarter of 2006. Excluding the impact of the 53 rd week in 2006 estimated at $6.4 million, adjusted net earnings (1) and adjusted fully diluted net earnings per share (1) for the fourth quarter of 2007 would have been up 3.4% and 3.6% respectively.
(1) See section on “Non-GAAP measurements” on page 28
27 annual report 2007

Net earnings adjustments
4 th quarter 2007
(Millions Fully diluted of dollars) EPS (dollars)
0.49 Net earnings
Integration and rationalization
costs after taxes
Gain on disposal of investment
after taxes
Decrease in tax expense
57.6
9.2
—
—
Adjusted net earnings (1)
53 rd week
Adjusted net earnings
(1)
excluding 53 rd week
66.8
—
66.8
(1) See section on “Non-GAAP measurements” below
0.08
—
—
0.57
—
0.57
4 th quarter 2006 Change (%)
(Millions Fully diluted of dollars) EPS (dollars) Net earnings
Fully diluted
EPS
78.9 0.68 (27.0) (27.9)
2.1
(8.6)
(1.4)
71.0
(6.4)
64.6
0.02
(0.07)
(0.02)
0.61
(0.06)
0.55
(5.9)
3.4
(6.6)
3.6
CASh POSITION
Operating activities Operating activities generated cash flows of $44.8 million in the fourth quarter of 2007 compared to $72.5 million for the corresponding quarter of 2006. The differences in 2007 fourth quarter cash flows compared with those for the corresponding quarter of fiscal 2006 are mainly the consequence of changes in noncash working capital from operating activities.
Investing activities Investing activities required $70.6 million in the fourth quarter of 2007 compared to $53.2 million in the corresponding quarter of 2006. This variation in investing activities is attributable mainly to proceeds from an investment disposal realized in 2006.
Financing activities Financing activities required an outflow of $120.7 million in the fourth quarter of 2007 versus outflows of $112 million in the fourth quarter of 2006. This increase is attributable mainly to share redemption for $28.4 million in 2007, versus none in 2006.
In addition to the Canadian generally accepted accounting principles (GAAP) sales and earnings measurements provided, we have included certain non-GAAP sales and earnings measurements. These measurements are presented for information purposes only. They do not have a standardized meaning prescribed by GAAP and therefore may not be comparable to similar measurements presented by other public companies.
ADjuSTED SALES Adjusted sales is a measurement of sales that excludes non-recurring items. We believe that presenting sales without non-recurring items leaves readers of financial statements better informed as to the current period and corresponding period’s sales, thus enabling them to better evaluate the Company’s performance.
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA) EBITDA is a measurement of earnings that excludes interest, taxes, depreciation and amortization. We believe that EBITDA is a measurement commonly used by readers of financial statements to evaluate a company’s operational cashgenerating capacity and ability to discharge its financial expenses.
ADjuSTED EBITDA, ADjuSTED NET EARNINGS AND ADjuSTED FuLLY DILuTED NET EARNINGS PER ShARE
Adjusted EBITDA, adjusted net earnings and adjusted fully diluted net earnings per share are earnings measurements that exclude non-recurring items. We believe that presenting earnings without non-recurring items leaves readers of financial statements better informed as to the current period and corresponding period’s earnings, thus enabling them to better evaluate the Company’s performance and judge its future outlook.
28 annual report 2007

This Management’s Discussion and Analysis is based upon the Company’s consolidated financial statements, prepared in accordance with GAAP and presented in Canadian dollars, our unit of measure. The preparation and presentation of the consolidated financial statements and other financial information contained in this
Management’s Discussion and Analysis involves a judicious choice of appropriate accounting principles and methods whose application requires the making of estimates and enlightened judgements. Our estimates are based upon assumptions which we believe to be reasonable, such as those based upon passed experience. These estimates constitute the basis for our judgements regarding the book value of assets and liabilities that would not otherwise be readily available through other sources. Use of other methods of estimation might have yielded different amounts than those presented. Actual results could differ from these estimates.
INVENTORIES Wholesale inventories are valued at the lower of cost, determined by the average cost method net of certain considerations received from vendors, and net realizable value. Retail inventories are valued at the retail price less the gross margin and certain considerations received from vendors. Determination of gross margins requires, on the part of management, judgements and estimates, which could impact inventory valuation on the balance sheet and operating results.
FIXED ASSETS AND INTANGIBLE ASSETS WITh DEFINITE LIFE Fixed assets and intangible assets with definite life are recorded at cost. They are depreciated and amortized on a straight-line basis over their useful lives for the Company, represented by the period during which we anticipate that an asset will contribute to future cash flows. The use of different assumptions with regard to useful life could result in different book values for these assets as well as for depreciation and amortization expenses.
INTANGIBLE ASSETS WITh INDEFINITE LIFE An intangible asset with indefinite life is tested for impairment annually or more often if events or changes in circumstances indicate that it might be impaired. When the carrying amount of an intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to the excess. The use of different assumptions to estimate fair value could result in different fair values and, consequently, different book values for these assets and operating results.
GOODWILL Goodwill represents the excess of the purchase price over the fair value of net assets acquired.
Goodwill is tested for impairment annually or more often if events or changes in circumstances indicate that it might be impaired. The impairment test consists of a comparison of the fair value of the reporting unit to which goodwill is assigned with its carrying amount. We use the indicated earnings method to determine the fair value of our reporting units, which requires estimates and assumptions regarding discount rate and indicated earnings.
The use of different assumptions when applying the indicated earnings method could result in different fair values and, consequently, different book values for goodwill and operating results.
IMPAIRMENT OF LONG-LIVED ASSETS Long-lived assets (excluding goodwill and intangible assets with indefinite useful life) are tested for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When the carrying amount of an asset is greater than the undiscounted future cash flows directly related to its use and eventual disposal, an impairment loss is estimated by the excess of its carrying amount over its fair value. We use the discounted future cash flows method to determine fair value, which requires estimates and assumptions regarding discount rate and future cash flows. The use of different assumptions when applying the discounted future cash flows method could result in different fair values and, consequently, different book values for long-lived assets and operating results.
EMPLOYEE FuTuRE BENEFITS The Company offers several defined benefit and defined contribution plans that provide most employees with pension, other retirement and post-employment benefits. The cost of pension and other retirement benefits earned by employees is determined from actuarial calculations according to the projected benefit method prorated on services. This method applies management’s best-estimate assumptions regarding returns on the plan assets, salary escalation, age of retirement and estimated health-care costs. The use of different assumptions could result in different book values for accrued benefit and expenses for defined benefit plans.
29 annual report 2007

STOCk-BASED COMPENSATION AND OThER STOCk-BASED PAYMENTS A stock-based compensation expense for stock options is calculated, based on the fair value method, using the Black & Scholes model and must be recorded for all attributions since September 29, 2002. In order to establish fair value, we use estimates and assumptions to determine risk-free interest rate, expected term, anticipated volatility and anticipated dividend yield.
The use of different assumptions could affect stock-based compensation expense on the statement of earnings.
INCOME TAXES The Company follows the liability method of accounting for income taxes. Under this method, future income tax assets and liabilities are accounted for based on estimated taxes recoverable or payable that would result from the recovery or settlement of the carrying amount of assets and liabilities. Future tax assets and liabilities are measured using substantively enacted tax rates expected to be in effect when the temporary differences are expected to reverse. Determination of income taxes and future taxes thus requires the use of estimates, assumptions and judgements, which, if applied differently, could result in different book values for future taxes on the balance sheet as well as for income tax expenses on the statement of earnings.
FINANCIAL INSTRuMENTS Cash and cash equivalents, investments in companies and derivative financial instruments are valued at fair value. Gains/losses resulting from reassessment at each period end are recorded in net income, in the case of cash and cash equivalents, and in comprehensive income, in the case of investments in companies and derivative financial instruments. The use of different assumptions to estimate fair value could result in different book values and, consequently, affect the net income statement or the comprehensive income statement, as the case may be.
ADOPTED IN 2007
COMPREhENSIVE INCOME, FINANCIAL INSTRuMENTS AND hEDGES In the first quarter of 2007, the Company adopted the following new accounting standards issued by the Canadian Institute of Chartered
Accountants (CICA):
Section 1530 “Comprehensive Income” , introduces a new financial statement which shows the change in equity of an enterprise from transactions and other events and circumstances from non-owner sources.
Section 3855 “Financial Instruments — Recognition and Measurement” , establishes standards for recognizing and measuring financial instruments, namely financial assets, financial liabilities and derivatives.
The new standard lays out how financial instruments are to be recognized depending on their classification.
Depending on financial instruments’ classification, changes in subsequent measurements are recognized in net income or comprehensive income.
The Company has implemented the following classification: n
Cash and cash equivalents are classified as “Financial Assets Held for Trading”. These financial assets are marked-to-market through net income at each period end.
n
Accounts receivable and loans to certain customers are classified as “Loans and Receivables”. After their initial fair value measurement, they are measured at amortized cost using the effective interest rate method. For the
Company, the measured amount generally corresponds to cost.
n
Investments in companies are classified as “Available-for-sale Securities”. These financial assets are markedto-market through comprehensive income at each period end.
n
Bank loans, accounts payable, credit facilities, notes, loans payable and obligations under capital leases are classified as “Other Financial Liabilities”. After their initial fair value measurement, they are measured at amortized cost using the effective interest rate method. For the Company, the measured amount generally corresponds to cost.
30 annual report 2007

Section 3865 “Hedges” , whose application is optional, establishes how hedge accounting may be applied. The
Company, in keeping with its risk management strategy, has decided to apply hedge accounting to its interest rate swaps and treat them as cash flow hedges. These derivatives are marked-to-market at each period end and resulting gains/losses are recognized in comprehensive income to the extent the hedging relationship is effective.
These new standards have to be applied without restatement of prior period amounts. Upon initial application all adjustments to the carrying amount of financial assets and liabilities shall be recognized as an adjustment to the opening balance of retained earnings or accumulated other comprehensive income, depending on the classification of existing assets or liabilities. The Company has recognized a $0.4 million adjustment to the opening balance of accumulated other comprehensive income with respect to the interest rate swaps designated as cash flow hedges. No adjustment has been recognized to the opening balance of retained earnings.
ADOPTED IN 2006
ACCOuNTING BY A VENDOR FOR CONSIDERATION GIVEN TO A CuSTOMER (INCLuDING A RESELLER
OF ThE VENDOR’S PRODuCTS) The Company adopted, in the third quarter of fiscal 2006, EIC-156 “Accounting by a Vendor for Consideration Given to a Customer (including a Reseller of the Vendor’s Products)”.
Under this new standard, the rebates granted by the Company to its retailers have to be reclassified as a reduction in sales rather than as cost of sales. The new standard was applied retroactively with restatement of prior interim financial statements.
DISCLOSuRES BY ENTITIES SuBjECT TO RATE REGuLATION At the end of fiscal 2006, the Company adopted accounting guideline AcG-19 “Disclosures by Entities Subject to Rate Regulation”.
This new guideline requires that entities which provide products subject to rate regulation present additional information explaining the nature of the rate regulation, its economic impact and its effect on the financial statements.
RECENTly ISSuED
The following accounting standards were recently issued by the CICA.
CAPITAL AND FINANCIAL INSTRuMENTS In December 2006, the CICA issued three new Handbook sections regarding capital and financial instruments, i.e. Sections 1535, 3862 and 3863, which are effective for interim and annual financial statements relating to fiscal years beginning on or after October 1, 2007. The Company intends to apply these new standards in the first quarter ending December 22, 2007, and does not foresee that these new sections will have a material effect on its results, financial position and cash flows.
Section 1535 “Capital Disclosures” establishes standards for disclosing information about an entity’s capital and how it is managed. These standards require an entity to disclose the following: n
its objectives, policies and processes for managing capital; n
summary quantitative data about what it manages as capital; n
whether during the period it complied with any externally imposed capital requirements to which it is subject; n
when the entity has not complied with such requirements, the consequences of such non-compliance.
Section 3862 “Financial Instruments – Disclosures” modifies the disclosure requirements for financial instruments that were included in Section 3861 “Financial Instruments – Disclosure and Presentation” . The new standards require entities to provide disclosures in their financial statements that enable users to evaluate: n
the significance of financial instruments for the entity’s financial position and performance; n
the nature and extent of risks arising from financial instruments to which the entity is exposed during the period and at the balance sheet date, and how the entity manages those risks.
Section 3863 “Financial Instruments – Presentation” carries forward unchanged the presentation requirements of the old Section 3861 “Financial Instruments – Disclosure and Presentation”.
31 annual report 2007

INVENTORIES In March 2007, the CICA issued the new Section 3031 “Inventories” which will replace Section 3030
“Inventories” . The new Section prescribes measurement of inventories at the lower of cost and net realizable value.
It provides guidance on the determination of cost, allows the use of the retail method, prohibits use in the future of the last-in, first-out (LIFO) method, and requires reversal of previous write-downs when there is a subsequent increase in the value of inventories. It also requires greater disclosure regarding inventories and the cost of sales.
The new standards will be effective for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2008. The Company is currently evaluating their effect on its results, financial position and cash flows as well as the possibility of early application.
On November 29, 2007, the Company took advantage of an option to purchase shares that had been granted by
The Great Atlantic & Pacific Tea Company (A&P US), purchasing 1.5 million Class A Subordinate Shares, sold by A&P US, for a total amount of $40.9 million. The shares purchased were cancelled and recorded as part of the
Company’s share buyback program.
The President and Chief Executive Officer and the Senior Vice-President and Chief Financial Officer of the Company are responsible for the implementation and maintenance of disclosure controls and procedures, as provided for in
Regulation 52-109 issued by the Canadian Securities Administrators. They are assisted in this task by the Disclosure
Committee, which is comprised of members of the Company’s senior management.
An evaluation was completed under their supervision in order to measure the effectiveness of the controls and procedures relating to the preparation of disclosure documentation, including this Management’s Discussion and Analysis, the Annual Financial Statements, the Annual Information Form and the Management Proxy Circular.
Based upon this evaluation, the President and Chief Executive Officer and the Senior Vice-President and Chief
Financial Officer of the Company concluded that the disclosure controls and procedures were effective as at the end of the fiscal year ended September 29, 2007 and, more specifically, that the design of these controls and procedures provides reasonable assurance that important information relating to the Company, including its consolidated subsidiaries, is communicated to them in a timely manner for the preparation of this disclosure documentation.
In the normal course of business, the Company is exposed to certain risks, which could impact upon its profitability.
In order to counteract these risks, we have implemented various strategies specifically adapted to the principal risk factors.
MARkET The intensification of competition, the possible arrival of new competitors and the changing needs of our consumers are constant concerns for the Company. In order to maintain its leadership in Québec and Ontario, the Company has developed a successful market segmentation strategy. Our different banners seek to meet the needs of different market segments and are supported by merchandising programs adapted to their specific clientele.
Our supermarket banners offer a wide variety of products at competitive prices and place special emphasis on customer service. This merchandising approach is supported by an extensive range of private brand products to encourage customer loyalty, and by the expertise of in-store teams to ensure responsiveness to market trends and customer needs. Staff quality remains a significant asset and the training programs provided by METRO’s School of Professionals ensure that this advantage is maintained.
Our discount store banners, for their part, aim to offer the market’s best quality/price ratio to consumers who are both cost and quality conscious. Our merchandising strategy focuses on this specific demand.
Our drugstore banners also target the satisfaction of specific market segments in the pharmaceutical industry.
Our pharmacists and owner-pharmacists offer clients both advice and a variety of services.
All our other banners also have developed strategies adapted to their particular target market segments. Lastly, the ongoing investment programs in all stores ensure that our retail network is among the most modern in Canada.
32 annual report 2007

CREDIT The Company holds accounts receivable from affiliated customers, mainly generated from sales to these customers. In order to guard against affiliated customers’ credit losses, we have adopted a credit policy that clearly defines the credit conditions that we offer to our customers as well as the guarantees required. The vast majority of our accounts receivable is guaranteed by affiliated customer assets.
PRICE OF FuEL, ENERGY AND PuBLIC SERVICES The Company is a large consumer of public services, electricity, natural gas and fuel. Unexpected increases in the price of these items may have a negative impact on the Company’s financial position and operating results in the event that it could not adjust its prices accordingly.
LAWS, TAX ISSuES AND ACCOuNTING Changes brought to laws, regulations, rules and policies impacting the Company’s operations, as well as new accounting standards adopted by relevant authorities, may have a significant effect on the Company’s financial and operating results. The Company may incur substantial expenses in complying with these amendments.
LABOuR RELATIONS The Company employs, including through the VIEs, close to 47,500 people, about 43,500 of whom are covered by nearly 200 collective agreements. The Company’s policy is to negotiate agreements with different maturity dates, incorporating terms and conditions that ensure its competitiveness, and with durations that promote a favourable labour climate in all its business sectors. We have experienced some minor labour conflicts over the last few years but expect to maintain good labour relations in the future.
ENVIRONMENT The Company adopted a formal environment policy several years ago, which requires the
Company to take the necessary measures in order to ensure compliance with applicable legislation and improve its environmental performance on a continuing basis. A committee comprised of management staff ensures implementation of this policy and of various programs to reduce the impact of our operations on the environment.
In addition, environmental audits are conducted regularly in all of the Company’s facilities and corrective action, if required, is quickly taken.
FOOD SAFETY The Company is exposed to potential liability regarding its commercial operations, including possible liability and costs related to defective products, cleanliness of food and contamination and handling of products. Such liabilities may arise from the fabrication, treatment or labelling, conception, preparation, storage, distribution or presentation of products. The major portion of our sales is generated from food products, and thus the Company could be vulnerable in case of a widespread food poisoning epidemic or an increase in public health concerns regarding certain food products. Such a situation could have a negative effect on the Company’s returns and financial results.
The Company applies very strict food-safety controls and procedures throughout its whole distribution chain.
All employees receive continuous training in this area. Our main meat processing and distribution facilities are
Hazard Analysis and Critical Control Point (HACCP) accredited, the industry’s highest international standard.
Our systems also enable us to trace a given meat product distributed from any of our main distribution centres to its consumer point-of-sale.
CRISIS MANAGEMENT AND EMERGENCY PLAN The Company has developed crisis management and emergency plans for all of its operations. A steering committee supervises and regularly reviews all the plans of all the divisions and departments. These plans provide for several physical back-up premises in case of a disaster, generators in case of power blackouts and a backup computer as powerful as the existing central computer. We have also implemented a crisis management plan in the event of an avian flu pandemic.
INSuRANCE The Company limits its exposure to operating risks by maintaining insurance with financially stable and reputable insurers. In addition, loss prevention and control programs have been implemented in order to reduce the financial impact of operating risks.
CLAIMS In the normal course of business, we are exposed to various claims and proceedings. The Company limits its exposure by maintaining insurance to cover the risk of claims related to its operations. Four years ago,
Regroupement des marchands actionnaires Inc. instituted proceedings against the Company, alleging the right of certain retailer-shareholders to re-convert into Class B Shares those Class B Shares, which they had previously converted to Class A Subordinate Shares. The Company is contesting the validity of this claim and we believe that any forthcoming settlement in respect of this claim will not have a material effect on the financial position or on the earnings of the Company.
33 annual report 2007

In January 2007, the Company was named in a suit brought by beneficiaries of a multiemployer pension plan.
They claim that plan assets were mismanaged and are seeking, among others, damages of $1 billion from the trustees and the employers. The Company is one of the 443 employers affected by the suit and did not participate in managing the plan. The Company forcefully contests the suit’s merits and considers that it will have no future financial obligation relating to this recourse. The Company has recently received notice from counsel for the beneficiaries who brought this suit indicating that he has received instructions from his clients to discontinue the action against the employers, including the Company.
DERIVATIVE FINANCIAL INSTRuMENTS The Company uses derivative financial instruments, primarily interest rate swaps, in order to manage the risks and costs associated with its financing activities. The Company conducts its operations in accordance with the risk management policy statement approved by the Board of Directors in December
2005. The Company’s policy prohibits the use of derivative financial instruments for speculative purposes. This policy cannot, however, guarantee that the Company will not suffer any losses relating to derivative financial instruments.
Again this year, we have budgeted investments, including those of our retailers, of over $300 million for the opening, expansion and remodelling of our retail network. We will continue to improve our merchandising programs in our supermarkets and discount stores, while emphasizing our cost controls, in order to maintain our competitiveness in the current environment. All these programs, combined with dynamic and committed teams of managers, allow us to look at the future with confidence.
Montréal, Canada, November 30, 2007
34 annual report 2007

The preparation and presentation of the consolidated financial statements of METRO INC. and the other financial information contained in this Annual Report are the responsibility of management. This responsibility is based on a judicious choice of appropriate accounting principles and methods, the application of which requires making estimates and informed judgements. It also includes ensuring that the financial information in the Annual Report is consistent with the consolidated financial statements. The consolidated financial statements were prepared in accordance with Canadian generally accepted accounting principles and were approved by the Board of Directors.
METRO INC. maintains accounting systems and internal controls over the financial reporting process which, in the opinion of management, provide reasonable assurance regarding the accuracy, relevance and reliability of financial information and the well-ordered, efficient management of the Company’s affairs.
The Board of Directors fulfills its duty, to oversee management in the performance of its financial reporting responsibilities and to review the consolidated financial statements and Annual Report, principally through its Audit Committee. This Committee is comprised solely of directors who are independent of the Company and is also responsible for making recommendations for the nomination of external auditors. Also, it holds periodic meetings with members of management as well as internal and external auditors, to discuss internal controls, auditing matters and financial reporting issues. The external and internal auditors have access to the Committee without management. The Audit Committee has reviewed the consolidated financial statements and Annual Report of METRO INC. and recommended their approval to the Board of Directors.
The enclosed consolidated financial statements were audited by Ernst & Young LLP,
Chartered Accountants, and their report indicates the extent of their audit and their opinion on the consolidated financial statements.
07
PIERRE H. LESSARD, FCA
President and Chief Executive Officer
Montréal, Canada, November 2, 2007
RICHARD DUFRESNE
Senior Vice-President and Chief Financial Officer
To the Shareholders of METRO INC.
We have audited the consolidated balance sheets of METRO INC. as at September 29, 2007 and September 30, 2006, and the consolidated statements of earnings, retained earnings, comprehensive income and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at September 29, 2007 and September 30, 2006 and the results of its operations and its cash flows for the years then ended in accordance with
Canadian generally accepted accounting principles.
07
ERNST & YOUNg LLP
Chartered Accountants
Montréal, Canada, November 2, 2007
35 annual report 2007

07
Years ended September 29, 2007 and September 30, 2006
(Millions of dollars, except for earnings per share)
Sales
(notes 20 and 21)
Cost of sales and operating expenses (notes 17 and 18)
Share of earnings in public company subject
to significant influence
Integration and rationalization costs
(note 4)
Earnings before interest, taxes, depreciation
and amortization
Depreciation and amortization
(note 5)
Operating income
Interest, net
Short term
Long term
Earnings before income taxes
Income taxes
(note 6)
Earnings before minority interest
Minority interest
Net earnings
Earnings per share
(note 7)
Basic
Fully diluted
See accompanying notes
2007
(52 weeks)
$ 10,644.6
10,013.9
(25.3)
30.5
2006
(53 weeks)
$ 10,944.0
10,327.8
(22.3)
28.0
$ 276.6
$
$
625.5
165.7
459.8
(2.7)
64.3
61.6
398.2
125.2
273.0
(3.6)
2.40
2.37
610.5
177.9
432.6
(1.9)
70.6
68.7
363.9
107.0
256.9
3.9
$ 253.0
$ 2.21
$ 2.18
36 annual report 2007

As at September 29, 2007 and September 30, 2006
(Millions of dollars)
ASSETS
Current assets
Cash and cash equivalents
Accounts receivable
(notes 8 and 20)
Inventories
Prepaid expenses
Future income taxes (note 6)
Investments and other assets
(note 8)
Fixed assets
(note 9)
Intangible assets
(note 10) goodwill
Accrued benefit assets
(note 17)
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Bank loans
(note 11)
Accounts payable
Income taxes payable
Current portion of long-term debt
(note 12)
Long-term debt
(note 12)
Accrued benefit obligations (note 17)
Future income taxes
(note 6)
Other long-term liabilities
(note 13)
Minority interest
Shareholders’ equity
Capital stock (note 14)
Contributed surplus
(note 15)
Retained earnings
Accumulated other comprehensive income
(note 16)
Commitments and contingencies
(notes 18 and 19)
See accompanying notes
On behalf of the Board:
PIERRE H. LESSARD, FCA
Director
MICHEL LABONTé
Director
$ 0.3
1,049.5
36.8
7.3
1,093.9
1,116.6
60.6
115.0
44.2
9.8
2,440.1
709.0
1.6
1,013.2
—
1,723.8
$ 4,163.9
2006
$ 165.7
302.1
565.5
11.3
16.7
1,061.3
117.9
1,129.9
331.7
1,490.1
33.0
$ 4,163.9
$ 0.1
1,043.6
20.3
5.1
1,069.1
1,038.9
54.9
139.0
33.7
6.0
2,341.6
714.8
2.0
1,214.3
1.2
1,932.3
$ 4,273.9
2007
$ 100.5
327.8
588.2
12.1
26.1
1,054.7
151.0
1,202.8
342.1
1,490.1
33.2
$ 4,273.9
07
37 annual report 2007

07
Years ended September 29, 2007 and September 30, 2006
(Millions of dollars)
Balance – beginning of year
Net earnings
Dividends
Share redemption premium
(note 14)
Balance – end of year
See accompanying notes
2007
(52 weeks)
$ 1,013.2
276.6
(51.8)
(23.7)
$ 1,214.3
2006
(53 weeks)
$ 807.7
253.0
(47.5)
—
$ 1,013.2
07
Years ended September 29, 2007 and September 30, 2006
(Millions of dollars)
Net earnings
Other comprehensive income
Change in fair value of derivatives designated as
cash flow hedges (net of income taxes of $0.4)
Comprehensive income
See accompanying notes
2007
(52 weeks)
$ 276.6
0.8
$ 277.4
2006
(53 weeks)
$ 253.0
—
$ 253.0
38 annual report 2007

Years ended September 29, 2007 and September 30, 2006
(Millions of dollars)
Operating activities
Net earnings
Non cash items
Integration and rationalization costs
(note 4)
Share of earnings in a public company subject
to significant influence
Depreciation and amortization
Amortization of deferred financing costs
Losses on disposal and write-off of fixed
and intangible assets
gain on disposal of investment
(note 8)
Future income taxes
Stock-based compensation cost
Excess of amounts paid for employee future
benefits over current period cost
Minority interest
Net change in non-cash working capital related to operations
Investing activities
Net change in investments
Dividends from public company subject
to significant influence
Acquisition of fixed assets
Disposal of fixed assets
Acquisition of intangible assets
Financing activities
Net change in bank loans
Issuance of shares
(note 14)
Redemption of shares (note 14)
Acquisition of treasury shares
(note 14)
Increase of long-term debt
Repayment of long-term debt
Net change in other long-term liabilities
Dividends paid
Distribution to minority interest
Net change in cash and cash equivalents
Cash and cash equivalents – beginning of year
Cash and cash equivalents – end of year
Other information
Interest paid
Income taxes paid
See accompanying notes
2007
(52 weeks)
$ 276.6
6.6
(25.3)
165.7
2.0
3.3
(1.4)
14.0
3.5
(5.9)
(3.6)
435.5
(72.2)
363.3
3.4
2.5
(229.7)
8.5
(43.6)
(258.9)
(0.2)
11.1
(28.9)
(3.2)
3.3
(84.8)
(14.9)
(51.8)
(0.2)
(169.6)
(65.2)
165.7
$ 100.5
$ 62.2
$ 127.7
2006
(53 weeks)
14.5
2.1
(170.7)
12.8
(40.6)
(181.9)
—
5.4
—
(2.1)
601.5
(692.0)
(3.1)
(47.5)
(0.4)
(138.2)
71.9
93.8
$ 165.7
$ 52.8
$ 88.6
$ 253.0
5.3
(22.3)
177.9
2.8
12.0
(10.5)
(4.6)
1.7
(20.2)
3.9
399.0
(7.0)
392.0
07
39 annual report 2007

Notes to consolidated financial statements
(Millions of dollars, except for data per share)
1
METRO INC. (the Company) is one of the leading Canadian food retailers and distributors. The Company operates, in Québec and Ontario, a network of stores in the conventional and discount food distribution and pharmacy sectors. The regions within which the Company’s operations are concentrated have been grouped together in a single operating segment in light of their similar economic characteristics.
2
The consolidated financial statements of the Company, in Canadian dollars, have been prepared by management in accordance with Canadian generally accepted accounting principles (gAAP) which require management to make estimates and assumptions that affect the amounts recorded in the consolidated financial statements and presented in the accompanying notes. Actual results could differ from these estimates. The Company’s consolidated financial statements have been properly prepared within the reasonable limits of materiality and in conformity with the accounting policies summarized below:
Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, as well as those of variable interest entities (VIEs) for which the Company is the primary beneficiary. All intercompany transactions and balances were eliminated on consolidation.
Cash and Cash equivalents Cash and cash equivalents consist of cash on hand, bank balances, highly liquid investments (with an initial term of three months or less), restricted bank balances of VIEs ($23.1 as at September 29, 2007 and $23.8 as at September 30, 2006), outstanding deposits and cheques in transit. They are classified as “Financial Assets Held for Trading” and are marked-to-market through net income at each period end.
aCCounts reCeivable Accounts receivable are classified as “Loans and Receivables”. After their initial fair value measurement, they are measured at amortized cost using the effective interest rate method. For the Company, the measured amount generally corresponds to cost.
inventory valuation Wholesale inventories are valued at the lower of cost, determined by the average cost method net of certain considerations received from vendors, and net realizable value. Retail inventories are valued at the retail price less the gross margin and certain considerations received from vendors.
investments and other assets The investment in a public company subject to significant influence is accounted for using the equity method.
Investments in companies are classified as “Available-for-sale Securities” and are marked-to-market through comprehensive income at each period end.
Loans to certain customers are classified as “Loans and Receivables”. After their initial fair value measurement, they are measured at amortized cost using the effective interest rate method. For the Company, the measured amount generally corresponds to cost.
Fixed assets Fixed assets are recorded at cost. Buildings and equipment are depreciated on a straight-line basis over their useful lives. Leasehold improvements are depreciated on a straight-line basis over the shorter of their useful lives or the remaining lease term. The depreciation method and estimate of the useful life of fixed assets are reviewed annually.
Buildings
Equipment
Leasehold improvements
40 years
3 to 20 years
5 to 20 years
40 annual report 2007

Notes to consolidated financial statements
(Millions of dollars, except for data per share) leases The Company accounts for capital leases in instances when it has acquired substantially all the benefits and risks incident to ownership of the leased property. The cost of assets under capital leases represents the present value of minimum lease payments and is amortized on a straight-line basis over the lease term. Assets under capital leases are presented under “Fixed assets” in the consolidated balance sheet.
Leases that do not transfer substantially all the benefits and risks incident to ownership of the property are accounted for as operating leases.
intangible assets Intangible assets with definite useful lives are recorded at cost and are amortized on a straight-line basis over their useful lives. The amortization method and estimate of the useful life of an intangible asset are reviewed annually.
Leasehold rights
Software
Improvements and development of retail network loyalty
Prescription files
20 to 40 years
3 to 10 years
5 to 20 years
10 years
Intangible assets with indefinite lives, such as banners and private labels and some agreements, are recorded at cost and are not subject to amortization. Intangible assets not subject to amortization are tested for impairment annually or more often if events or changes in circumstances indicate that the asset might be impaired. When the impairment test indicates that the carrying amount of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to the excess.
goodwill goodwill represents the excess of the purchase price over the fair value of net assets acquired. goodwill is tested for impairment annually or more often if events or changes in circumstances indicate that it might be impaired. The impairment test first consists of a comparison of the fair value of the reporting unit to which goodwill is assigned with its carrying amount. When the carrying amount of a reporting unit exceeds its fair value, the fair value of the reporting unit’s goodwill is compared with its carrying amount to measure the amount of the impairment loss, if any. Any impairment loss is charged to earnings in the period in which the loss is incurred.
The Company uses the indicated earnings method to determine the fair value of reporting units.
impairment oF long-lived assets Long-lived assets, excluding goodwill and intangible assets with indefinite useful lives, are assessed for impairment whenever events or changes in circumstances indicate that this carrying amount may not be recoverable by comparing their carrying amount with their expected net undiscounted future cash flows directly associated to its use and eventual disposal. The impairment loss, the amount by which the carrying amount of the assets exceeds their fair value, if any, is charged to earnings.
deFerred FinanCing Costs Financing costs related to long-term credit facilities are deferred and amortized using the effective interest rate method over the term of the corresponding loans. When long-term credit facilities are repaid, the corresponding financing costs are charged to earnings. Deferred financing costs are presented under
“Intangible assets” in the consolidated balance sheet and the related amortization under “Long-term interest” in the consolidated statement of earnings.
employee Future beneFits The Company accounts for employee future benefit plan assets and obligations and related costs of defined benefit pension plans and other retirement benefits and other post-employment benefit plans under the following accounting policies: n
The accrued benefit obligations and the cost of pension and other retirement benefits earned by participants are determined from actuarial calculations according to the projected benefit method prorated on services based on management’s best estimate assumptions relating to return on the plan assets, salary escalation, retirement age of participants and estimated health-care costs.
41 annual report 2007

Notes to consolidated financial statements
(Millions of dollars, except for data per share)
2
n
For the purpose of calculating the estimated rate of return on the plan assets, assets are assessed at fair value.
n
Pension obligations are discounted based on current market interest rates.
n
Actuarial gains or losses arise from the difference between the actual long-term rate of return on plan assets for a period and the expected long-term rate of return on plan assets for that period, or from changes in actuarial assumptions used to determine the accrued benefit obligations.
n
The excess of the net actuarial gain or loss over 10% of accrued benefit obligations, or over 10% of the fair value of the plan assets where such amount is higher, is amortized over the average remaining service period of active participants. The average remaining service period of active participants covered by the pension plans is 14 years and the average remaining service period of active participants covered by the other post employment benefit plans is 15 years.
n
Past service costs arising from plan amendments are deferred and amortized on a straight-line basis over the average remaining service period of the active participants at the date of amendment.
The cost of defined contribution pension plans, which includes multi-employer pension plans, is expensed as contributions are due.
other FinanCial liabilities Bank loans, accounts payable, credit facilities, notes, loans payable, and obligations under capital leases are classified as “Other Financial Liabilities”. After their initial fair value measurement, they are measured at amortized cost using the effective interest rate method. For the Company, the measured amount generally corresponds to cost.
sales reCognition Retail sales made by corporate stores and stores for which the Company is the primary beneficiary are recognized at the time of sale to the customer and, for affiliated stores and other customers, when the goods are delivered. The rebates granted by the Company to its retailers are recorded as a reduction in sales.
reCognition oF Considerations reCeived From a vendor Certain cash considerations received from a vendor are to be considered as an adjustment of the prices of the vendor’s products and are therefore characterized as a reduction of cost of sales and related inventories when recognized in the consolidated statements of earnings and consolidated balance sheets. Certain exceptions apply if the consideration is a payment for assets or services delivered to the vendor or for reimbursement of selling costs incurred to promote the vendor’s products.
These other considerations received from a vendor are accounted for, according to their nature, under sales or as a reduction of cost of sales and operating expenses.
Foreign CurrenCy translation Monetary items on the balance sheet are translated at the exchange rate in effect at year-end, while non-monetary items are translated at the historical exchange rates. Revenues and expenses are translated at the rates of exchange in effect on the transaction date or at the average exchange rate for the period. gains or losses resulting from the translation are included in current period earnings.
inCome taxes The Company follows the liability method of accounting for income taxes. Under this method, future income tax assets and liabilities are accounted for based on estimated taxes recoverable or payable that would result from the recovery or settlement of the carrying amount of assets and liabilities. Future tax assets and liabilities are measured using substantively enacted tax rates expected to be in effect when the temporary differences are expected to reverse. Changes in these amounts are included in current period earnings.
stoCk-based Compensation and other stoCk-based payments The Company recognizes stockbased compensation expense and other stock-based payments in earnings based on the fair value method for stock options granted since September 29, 2002. The Black & Scholes model is used to determine the fair value on the award date of stock options. Compensation expense is recognized over the expected term of the award.
42 annual report 2007

Notes to consolidated financial statements
(Millions of dollars, except for data per share) perFormanCe share unit plan The Company establishes the value of the compensation related to the performance share unit plan based on the market value of the Company’s Class A Subordinate Shares at grant date. The compensation expense is recognized over the vesting period. The impact of changes in the number of performance share units is recorded in the period where the estimate is revised. The grant qualifies as an equity instrument.
earnings per share Net earnings per share are calculated based on the weighted average number of Class A
Subordinate Shares and Class B Shares outstanding during the year. Fully diluted net earnings per share are calculated using the treasury stock method and take into account all the elements that have a dilutive effect.
FinanCial instruments In accordance with its risk management strategy, the Company uses derivative financial instruments. Designation as a hedge is only allowed if, both at the inception of the hedge and throughout the hedge period, the changes in the fair value or cash flows of the derivative financial instrument are expected to offset the changes in the fair value or cash flows of the hedged item attributable to the hedged risks. The Company does not enter into derivative financial instruments for speculative purposes.
The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedge transactions. This process includes linking all derivatives to forecasted foreign currency cash flows or to specific assets and liabilities. The Company also formally documents and assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative financial instruments that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.
The derivative financial instruments used by the Company primarily consist of interest rate swaps that enable the
Company to substitute the variable rate interest payments with fixed rate interest payments. The Company has decided to apply hedge accounting to its interest rate swaps and treat them as cash flow hedges. These derivatives are marked-to-market at each period end and resulting gains/losses are recognized in comprehensive income to the extent the hedging relationship is effective.
FisCal year The Company’s fiscal year ends on the last Saturday of September. The fiscal years ended
September 29, 2007 and September 30, 2006 include 52 and 53 weeks of operations, respectively.
3
ADOPTED IN 2007
Comprehensive inCome, FinanCial instruments and hedges In the first quarter of 2007, the
Company adopted the following new accounting standards issued by the Canadian Institute of Chartered
Accountants (CICA):
Section 1530 “Comprehensive Income” , introduces a new financial statement which shows the change in equity of an enterprise from transactions and other events and circumstances from non-owner sources.
Section 3855 “Financial Instruments — Recognition and Measurement” , establishes standards for recognizing and measuring financial instruments, namely financial assets, financial liabilities and derivatives.
The new standard lays out how financial instruments are to be recognized depending on their classification.
Depending on financial instruments’ classification, changes in subsequent measurements are recognized in net income or comprehensive income.
43 annual report 2007

Notes to consolidated financial statements
(Millions of dollars, except for data per share)
3
The Company has implemented the following classification: n
Cash and cash equivalents are classified as “Financial Assets Held for Trading”. These financial assets are marked-to-market through net income at each period end.
n
Accounts receivable and loans to certain customers are classified as “Loans and Receivables”. After their initial fair value measurement, they are measured at amortized cost using the effective interest rate method.
For the Company, the measured amount generally corresponds to cost.
n
Investments in companies are classified as “Available-for-sale Securities”. These financial assets are markedto-market through comprehensive income at each period end.
n
Bank loans, accounts payable, credit facilities, notes, loans payable, and obligations under capital leases are classified as “Other Financial Liabilities”. After their initial fair value measurement, they are measured at amortized cost using the effective interest rate method. For the Company, the measured amount generally corresponds to cost.
Section 3865 “Hedges” , whose application is optional, establishes how hedge accounting may be applied. The
Company, in keeping with its risk management strategy, has decided to apply hedge accounting to its interest rate swaps and treat them as cash flow hedges. These derivatives are marked-to-market at each period end and resulting gains/losses are recognized in comprehensive income to the extent the hedging relationship is effective.
These new standards have to be applied without restatement of prior period amounts. Upon initial application all adjustments to the carrying amount of financial assets and liabilities shall be recognized as an adjustment to the opening balance of retained earnings or accumulated other comprehensive income, depending on the classification of existing assets or liabilities. The Company has recognized a $0.4 adjustment to the opening balance of accumulated other comprehensive income with respect to the interest rate swaps designated as cash flow hedges.
No adjustment has been recognized to the opening balance of retained earnings.
ADOPTED IN 2006 aCCounting by a vendor For Consideration given to a Customer (inCluding a reseller oF the vendor’s produCts) The Company adopted, in the third quarter of fiscal 2006, EIC-156 “Accounting by a Vendor for Consideration Given to a Customer (including a Reseller of the Vendor’s Products)” . Under this new standard, the rebates granted by the Company to its retailers have to be reclassified as a reduction in sales rather than as cost of sales. The new standard was applied retroactively with restatement of prior interim financial statements.
disClosures by entities subjeCt to rate regulation At the end of fiscal 2006, the Company adopted accounting guideline Acg-19 “Disclosures by Entities Subject to Rate Regulation” . This new guideline requires that entities which provide products subject to rate regulation present additional information explaining the nature of the rate regulation, its economic impact and its effect on the financial statements.
RECENTLY ISSUED
Capital and FinanCial instruments In December 2006, the CICA issued three new Handbook sections regarding capital and financial instruments, i.e. Sections 1535, 3862 and 3863, which are effective for interim and annual financial statements relating to fiscal years beginning on or after October 1, 2007. The Company intends to apply these new standards in the first quarter ending December 22, 2007, and does not foresee that these new sections will have a material effect on its results, financial position and cash flows.
Section 1535 “Capital Disclosures” establishes standards for disclosing information about an entity’s capital and how it is managed. These standards require an entity to disclose the following: n
its objectives, policies and processes for managing capital; n
summary quantitative data about what it manages as capital; n
whether during the period it complied with any externally imposed capital requirements to which it is subject; n
when the entity has not complied with such requirements, the consequences of such non-compliance.
44 annual report 2007

Notes to consolidated financial statements
(Millions of dollars, except for data per share)
Section 3862 “Financial Instruments – Disclosures” modifies the disclosure requirements for financial instruments that were included in Section 3861 “Financial Instruments – Disclosure and Presentation” . The new standards require entities to provide disclosures in their financial statements that enable users to evaluate: n
the significance of financial instruments for the entity’s financial position and performance; n
the nature and extent of risks arising from financial instruments to which the entity is exposed during the period and at the balance sheet date, and how the entity manages those risks.
Section 3863 “Financial Instruments – Presentation” carries forward unchanged the presentation requirements of the old Section 3861 “Financial Instruments – Disclosure and Presentation”.
inventories In March 2007, the CICA issued the new Section 3031 “Inventories” which will replace Section 3030
“Inventories”.
The new Section prescribes measurement of inventories at the lower of cost and net realizable value.
It provides guidance on the determination of cost, allows the use of the retail method, prohibits use in the future of the last-in, first-out (LIFO) method, and requires reversal of previous write-downs when there is a subsequent increase in the value of inventories. It also requires greater disclosure regarding inventories and the cost of sales. The new standard will be effective for interim and annual financial statements relating to fiscal years beginning on or after
January 1, 2008. The Company is currently evaluating their effect on its results, financial position and cash flows as well as the possibility of early application.
4
Following the acquisition of A&P Canada, the Company developed a plan to integrate and rationalize its operations.
This initial three-part plan dealt with the store network, the integration of overall operations, and the implementation of information systems at A&P Canada.
The integration and rationalization plan’s initial anticipated cost was $55 over two years. With $28 incurred in fiscal 2006, it was revised in the third quarter of 2007 to allow for a fuller integration of Loeb Canada’s operations into A&P Canada’s. Costs of $30.5 were recorded in fiscal 2007, some of which were for the Loeb integration’s completion in the next fiscal year. Total costs recorded over the two years following the acquisition of A&P Canada were $58.5.
Plan’s costs stemming from A&P Canada operations are included in the purchase price allocation and costs stemming from the acquiring entity’s operations are recorded in the statement of earnings at the time they are incurred and are described as follows:
By Nature of Project
Stores
Integration of operations
Implementation of information systems
2007
$ 8.4
10.6
11.5
$ 30.5
2006
$ 11.9
13.9
2.2
$ 28.0
Total
$ 20.3
24.5
13.7
$ 58.5
45 annual report 2007

Notes to consolidated financial statements
(Millions of dollars, except for data per share)
4
By Nature of Costs
Retention bonuses,
termination benefits
and others
Training and
IT implementation
Vacant premises
Assets write-off
Beginning liability
$
$
2.1
—
1.5
3.6
Incurred in 2007
$ 10.3
11.5
2.1
$ 23.9
6.6
$ 30.5
$
Paid
7.0
10.2
1.3
$ 18.5
$
$
Ending liability
5.4
1.3
2.3
9.0
Incurred in 2006
Incurred
Total
$ 18.1
2.2
2.4
$ 22.7
5.3
$ 28.0
$ 28.4
13.7
4.5
$ 46.6
11.9
$ 58.5
5
Fixed assets
Intangible assets
6
The main components of the provision for income taxes were as follows:
Payable
Future
The effective income tax rates were as follows:
Combined statutory income tax rate
Changes
Impact of federal tax rate decrease of 0.5% (3.12% in 2006)
on future taxes ($1.8 in 2007 and $10.8 in 2006)
Impact of Québec tax rate increase of 3% on future taxes ($5.3 in 2006)
Share of earnings of a public company subject to significant influence
gain on disposal of investment
Other
2007
$ 134.3
31.4
$ 165.7
2006
$ 148.0
29.9
$ 177.9
2007
$ 111.2
14.0
$ 125.2
2006
$ 111.6
(4.6)
$ 107.0
2007
32.3%
(0.5)
—
(0.9)
—
0.5
31.4%
2006
31.8%
(3.0)
1.5
(0.8)
(0.4)
0.3
29.4%
46 annual report 2007

Notes to consolidated financial statements
(Millions of dollars, except for data per share)
Future taxes reflect the net tax impact of timing differences between the value of assets and liabilities for accounting and tax purposes. The main components of the Company’s future tax assets and liabilities were as follows:
2007 2006
Future tax assets
Accrued expenses, provisions and other reserves that are
tax-deductible only at the time of disbursement
Deferred tax losses
Excess of tax value over net book value of assets under capital leases
Employee future benefits
Current portion
Long-term future tax assets
Future tax liabilities
Accumulated equity earnings from a public company
subject to significant influence
Employee future benefits
Interest rate swaps
Excess of net book value over tax value
Fixed assets
Intangible assets
goodwill
Long-term future tax liabilities
Long-term future tax assets
Long-term future tax liabilities, net
$ 19.1
21.6
11.6
19.2
71.5
26.1
45.4
(18.9)
(11.6)
(0.6)
(39.0)
(97.9)
(16.4)
(184.4)
45.4
$ (139.0)
$ 23.8
10.1
11.0
20.4
65.3
16.7
48.6
(14.7)
(10.7)
—
(29.0)
(94.3)
(14.9)
(163.6)
48.6
$ (115.0)
7
Basic net earnings per share and fully diluted net earnings per share were calculated based on the following number of shares:
(Millions)
Weighted average number of shares outstanding – Basic
Dilutive effect under stock option plan and performance share units
Weighted average number of shares outstanding – Diluted
2007
115.0
1.6
116.6
2006
114.6
1.3
115.9
47 annual report 2007

Notes to consolidated financial statements
(Millions of dollars, except for data per share)
8
Investment at equity in a public company including share of earnings until
July 22, 2007 (July 23, 2006) (quoted market value: as at September 29, 2007
– $423.2; as at September 30, 2006 – $498.2)
Investments in companies
Interest rate swaps
Loans to certain customers bearing interest at floating rates, repayable
in monthly instalments, maturing through 2013
Assets held for sale
Other assets
Current portion included in receivables
2007
$ 133.1
0.1
1.8
9.2
8.8
7.4
160.4
9.4
$ 151.0
$
$
2006
110.3
0.1
—
8.6
5.8
—
124.8
6.9
117.9
During fiscal 2006, the Company sold its interest in a company accounted for under the cost method, for an amount of $12.8 realizing a pre-tax gain on disposal of $10.5.
9
Land
Buildings
Equipment
Leasehold
improvements
Assets under capital
leases
2007
Cost
Accumulated depreciation
$ 166.6
365.1
821.8
$ —
83.2
389.7
414.3
35.7
$ 1,803.5
118.2
9.6
$ 600.7
Net book value
$ 166.6
281.9
432.1
296.1
26.1
$ 1,202.8
2006
Cost
Accumulated depreciation
$ 158.9
336.4
731.4
$ —
81.9
300.6
348.6
35.7
$ 1,611.0
92.8
5.8
$ 481.1
Net book
Value
$ 158.9
254.5
430.8
255.8
29.9
$ 1,129.9
Net acquisitions under capital leases and other acquisitions of assets excluded from the consolidated statement of cash flows was nil in 2007 (2006 - $0.2).
48 annual report 2007

Notes to consolidated financial statements
(Millions of dollars, except for data per share)
10
Intangible assets with
definite lives
Leasehold rights
Software
Improvements
and development
of retail network
loyalty
Prescription files
Deferred financing
costs
Intangible assets with
indefinite lives
Banners
Private labels
and agreements
2007
Cost
Accumulated amortization
$ 75.3
132.5
194.7
7.4
15.7
425.6
53.3
55.2
108.5
$ 534.1
$ 28.1
63.3
93.9
1.1
5.6
192.0
—
—
—
$ 192.0
Net book value
$ 47.2
69.2
100.8
6.3
10.1
233.6
53.3
55.2
108.5
$ 342.1
2006
Cost
Accumulated amortization
$ 75.8
106.7
188.8
7.4
15.7
394.4
53.3
55.2
108.5
$ 502.9
$ 25.8
52.0
89.4
0.4
3.6
171.2
—
—
—
$ 171.2
Net book
Value
$ 50.0
54.7
99.4
7.0
12.1
223.2
53.3
55.2
108.5
$ 331.7
Net acquisitions of intangible assets excluded from the consolidated statement of cash flows amounted to $1.6 in 2007
(2006 - $1.5).
11
On August 8, 2007, the Company renegotiated conditions of its banking credit facilities relative to the $400 revolving line of credit which is unused and Credit Facility A in the amount of $394.5 as described under note 12.
The expiry term for these credit facilities has been extended to August 2012 and the relative interest rates have been reduced. The line of credit bears interest at rates with changes in bankers’ acceptance rates and is not secured. As at September 29, 2007 and September 30, 2006, the line of credit was unused. The consolidated
VIEs have demand revolving credit facilities totalling $6.3 ($6.1 in 2006) bearing interest at prime, unsecured and expiring on various dates up to 2008. As at September 29, 2007, $0.1 ($0.3 as at September 30, 2006) of the demand revolving credit facilities had been drawn at a rate of 6.25% (6% as at September 30, 2006).
49 annual report 2007

Notes to consolidated financial statements
(Millions of dollars, except for data per share)
12
The Credit Facility A bears interest at rates which fluctuate with changes in bankers’ acceptance rates and is unsecured.
Credit Facility A, at a rate of 5.14% (2006 – 4.45%) repayable on August 15, 2012
or earlier
Series A notes bearing interest at a nominal rate of 4.98%, maturing
on October 15, 2015 and retractable by the issuer at any time prior to maturity
Series B notes bearing interest at a nominal rate of 5.97%, maturing
on October 15, 2035 and retractable by the issuer at any time prior to maturity
Loans, maturing on various dates through 2011, bearing interest
at a rate of 5.7% (2006 – 5.6%)
Obligations under capital leases, bearing interest at an effective rate
of 10.2% (2006 – 10.9%)
Current portion
2007
$ 394.5
200.0
400.0
10.7
38.8
1,044.0
5.1
$ 1,038.9
2006
$ 469.3
200.0
400.0
10.4
44.2
1,123.9
7.3
$ 1,116.6
Minimum payments required on long-term debt over the next fiscal years were as follows:
2008
2009
2010
2011
2012
2013 and thereafter
Loans
Obligations
Medium-term under capital notes leases
$ 1.4
1.2
0.9
0.4
394.7
6.6
$ 405.2
$ —
—
—
—
—
600.0
$ 600.0
$
$
7.7
7.2
6.5
5.2
5.2
34.7
66.5
Total
$ 9.1
8.4
7.4
5.6
399.9
641.3
$ 1,071.7
The minimum payments in respect of the obligations under capital leases included interest amounting to $27.7 on these obligations (2006 – $32.4).
13
Lease liabilities
Integration and rationalization plan-related liabilities
Other liabilities
$
2007
27.5
1.8
4.4
$ 33.7
$
2006
27.2
17.0
—
$ 44.2
50 annual report 2007

Notes to consolidated financial statements
(Millions of dollars, except for data per share)
14
authorized Unlimited number of First Preferred Shares, non-voting, without par value, issuable in series.
Unlimited number of Class A Subordinate Shares, bearing one voting right per share, participating, convertible into Class B Shares in the event of a takeover bid involving Class B Shares, without par value.
Unlimited number of Class B Shares, bearing 16 voting rights per share, participating, convertible in the event of disqualification into an equal number of Class A Subordinate Shares on the basis of one Class A Subordinate
Share for each Class B Share held, without par value.
outstanding
Balance as at September 24, 2005
Shares issued for cash
Acquisition of treasury shares
excluding premium of $1.7
Transfer from contributed surplus
– options exercised
Conversion of Class B Shares into
Class A Subordinate Shares
Balance as at September 30, 2006
Shares issued for cash
Shares redeemed for cash,
excluding premium of $23.7
Acquisition of treasury shares
excluding premium of $2.7
Transfer from contributed surplus –
options exercised
Conversion of Class B Shares into
Class A Subordinate Shares
Balance as at September 29, 2007
Class A
Subordinate Shares
Number
(Thousands)
113,504
377
(72)
—
43
113,852
659
(822)
(82)
—
76
113,683
$ 701.9
5.4
$
(0.4)
0.2
0.2
707.3
11.1
(5.2)
(0.5)
0.4
0.1
713.2
Number
(Thousands)
Class B
Shares
923
—
—
—
(43)
880
—
—
—
—
(76)
804
$
$
1.9
—
—
—
(0.2)
1.7
—
—
—
—
(0.1)
1.6
$
$
Total
703.8
5.4
(0.4)
0.2
—
709.0
11.1
(5.2)
(0.5)
0.4
—
714.8
stoCk option plan The Company has a stock option plan for certain employees with options to purchase up to 10,000,000 Class A Subordinate Shares. The subscription price of each Class A Subordinate Share issuable upon exercise of options under the plan is equal to the market price of the shares on the day prior to the day the option was granted and must be paid in full at the time the option is exercised. While the Board of Directors determines other terms and conditions for the exercise of options, options may not extend beyond a five-year period from the date the option may initially be exercised, in whole or in part, and the total period may never exceed ten years from the date the option was granted. Options may generally be exercised two years after they were granted and vest at the rate of 20% per year.
51 annual report 2007

Notes to consolidated financial statements
(Millions of dollars, except for data per share)
14
The options outstanding and the changes during the year were summarized as follows:
Balance as at September 24, 2005 granted
Exercised
Cancelled
Balance as at September 30, 2006 granted
Exercised
Cancelled
Balance as at September 29, 2007
Weighted average
Number exercise price
(Thousands) (Dollars)
4,374
265
(373)
(33)
19.72
30.41
14.09
23.56
4,233
200
(658)
(37)
3,738
20.85
37.55
16.79
26.76
22.40
The table below summarizes information regarding the stock options outstanding and exercisable as at
September 29, 2007:
Options outstanding Exercisable options
Range of exercise prices
(Dollars)
Number
(Thousands)
Weighted average remaining
Weighted average period exercise price
(Months) (Dollars)
Weighted average
Number exercise price
(Thousands) (Dollars)
11.80 to 17.23
18.43 to 27.25
29.74 to 39.17
455
2,847
436
3,738
15.3
26.1
73.0
30.3
14.07
22.01
33.65
22.40
372
2,240
—
2,612
13.37
21.43
—
20.28
The weighted average fair value of $10.49 (2006 - $9.65) for stock options granted during the year was established at the time of grant using the Black & Scholes model and based on the following weighted average assumptions: risk-free interest rate of 4.3% (2006 – 4.2%), expected six-year term (2006 – six-year term), anticipated volatility of
25.1% (2006 – 30%) and an anticipated 1.5% dividend yield (2006 – 1.5%). Compensation expense for these options amounted to $2.1 for the fiscal year ended September 29, 2007 ($1.3 for fiscal year ended September 30, 2006). perFormanCe share unit plan The Company has a performance share unit (PSU) plan. Under this program, senior executives and other key employees (participants) periodically receive a given number of PSUs which may increase if the Company meets certain financial performance indicators. The PSUs entitle the participant to Class A Subordinate Shares of the Company, or at the latter’s discretion, the cash equivalent.
PSUs vest over a period of three years.
52 annual report 2007

Notes to consolidated financial statements
(Millions of dollars, except for data per share)
PSU outstanding and changes during the year were summarized as follow:
Balance as at Septembre 24, 2005 granted for the current period (may reach 80,087)
Cancelled
Balance as at Septembre 30, 2006 granted following the achievement of performance indicators related to previous fiscal year granted for the current period (may reach 82,176)
Cancelled
Balance as at September 29, 2007
Number
(units)
—
50,032
(1,584)
48,448
29,270
51,941
(5,840)
123,819
The Company instructed a trustee to purchase Class A Subordinate Shares of the Company on the stock market.
During fiscal 2007, the trustee purchased 82,000 Class A Subordinate Shares of the Company for a consideration of
$3.2. A total of 154,000 shares were held in trust for participants until the PSUs shall have vested or been cancelled.
The trust, considered a variable interest entity, is consolidated in the Company’s financial statements with the value of the acquired shares presented as treasury shares reducing capital stock.
A compensation expense of $1.4 was recorded during fiscal 2007 under this PSU plan (2006 – $0.4).
15
Balance – beginning of year
Stock-base compensation cost
Stock options exercised
Acquisition of treasury shares
Balance – end of year
$
$
2007
1.6
3.5
(0.4)
(2.7)
2.0
$
$
2006
1.8
1.7
(0.2)
(1.7)
1.6
16
Derivatives designated as cash flow hedges constitute the sole item in Accumulated Other Comprehensive Income.
The changes that occurred during the year were as follows:
Adjusted opening balance due to the new accounting policies adopted regarding
financial instruments (net of income taxes of $0.2)
(note 3)
Change in fair value of derivatives designated during the period
(net of income taxes of $0.4)
Balance – end of year
$
$
2007
0.4
0.8
1.2
2006
—
—
—
53 annual report 2007

Notes to consolidated financial statements
(Millions of dollars, except for data per share)
17
The Company maintains defined benefit and defined contribution plans for eligible employees, which provide to its beneficiaries pension, complementary benefit to retirement and post-retirement benefits based on number of years of service and for few plans based on average final pay. The benefit pension plans are capitalized with the
Company’s contributions and other benefit plans are funded by the beneficiaries. The Company also offers health care benefits, life insurance and other benefits for employees and eligible retirees.
The Company’s defined benefit and defined contribution plan expenses were as follows as at September 29, 2007 and September 30, 2006, measurement dates:
Defined contribution plans
Defined benefit plans
Current service cost and plan’s administration fees
Interest cost
Actual return on plan assets
Actuarial (gain) loss
Plan amendments
Difference between established cost and reported cost
for fiscal year with respect to the following items:
Difference between established return and actual
return on plan assets
Actuarial gain (loss)
Plan amendments
$
Pension
plans
$ 25.0
23.7
28.3
(57.4)
(15.1)
7.4
(13.1)
19.3
16.2
(6.9)
15.5
40.5
2007
Other plans
$ 0.5
$
1.4
2.0
—
(3.2)
(1.3)
(1.1)
—
3.5
1.0
3.4
3.9
Pension plans
$ 22.1
2006
$
$
23.1
25.6
(39.4)
4.1
0.2
13.6
4.7
(2.9)
0.1
15.5
37.6 $
Other plans
0.3
1.0
2.0
—
4.8
—
7.8
—
(4.6)
—
3.2
3.5
54 annual report 2007

Notes to consolidated financial statements
(Millions of dollars, except for data per share)
The information on defined benefit plans was as follows:
Accrued benefit obligations
Balance at beginning of year
Business acquisition
Current service cost
Interest cost
Participant contributions
Plan amendments
Benefits paid
Actuarial (gain) loss
Balance at end of year
Plan assets
Fair value at beginning of year
Actual return on plan assets
Employer contributions
Participant contributions
Benefits paid
Plan’s administration fees
Fair value at end of year
Funded status – deficit
Unamortized past service costs
Unamortized net actuarial (gain) loss
Valuation allowance on accrued benefits assets
Accrued benefit assets (obligations)
Accrued benefit assets
Accrued benefit obligations
Pension
plans
$ 520.4
—
23.2
28.3
3.2
7.4
(24.7)
(15.1)
542.7
516.7
57.4
21.4
3.2
(24.7)
(0.5)
573.5
30.8
9.1
(23.5)
(1.1)
15.3
33.2
$ (17.9)
2007
Other plans
$ 43.1
—
1.4
2.0
—
(1.3)
(3.6)
(3.2)
38.4
—
—
3.6
—
(3.6)
—
—
(38.4)
(1.1)
2.5
—
(37.0)
—
$ (37.0)
Pension plans
$ 483.9
2.1
22.6
25.6
3.1
0.2
(21.2)
4.1
520.4
461.6
39.4
34.3
3.1
(21.2)
(0.5)
516.7
(3.7)
2.2
12.0
(1.0)
9.5
33.0
$ (23.5)
2006
Other plans
$ 39.9
—
1.0
2.0
—
—
(4.6)
4.8
43.1
(43.1)
—
6.0
—
(37.1)
—
$ (37.1)
—
—
4.6
—
(4.6)
—
—
The pension plans were allocated as follow:
Accrued benefit obligations exceeding
fair value of assets
Fair value of assets exceeding accrued
benefit obligations
Accrued benefit obligations
$
$
190.4
390.7
Defined benefit plans other than retirement plans were not funded.
2007
Fair value of assets
$ 135.0
$ 438.5
Accrued benefit obligations
2006
Fair value of assets
$
$
272.7
290.8
$
$
215.8
300.9
55 annual report 2007

Notes to consolidated financial statements
(Millions of dollars, except for data per share)
17
Total cash payments for employee future benefits, consisting of cash contributed by the Company to its funded pension plans and cash payments directly to beneficiaries for its unfunded other benefit plans were $24.8 in 2007
(2006 – $38.9).
The most recent actuarial valuations with respect to the capitalization of the Company’s pension plans were prepared on various dates ranging from July 2004 to September 2006. The next valuations will be on various dates ranging from November 2007 to June 2009.
The plan assets are held in trust and their weighted average distributions as of the measurement dates,
September 29, 2007, and September 30, 2006, were as follows:
Assets classes
Stocks
Bonds
Other
2007
62%
34%
4%
2006
61%
36%
3%
The principal actuarial assumptions used by the Company were as follows:
Accrued benefit obligations
Discount rate
Compensation growth rate
Cost of benefits
Discount rate
Projected long-term return on plan assets
Compensation growth rate
Pension
plans
5.5%
3.75%
5.25%
7.5%
3.5%
2007
Other plans
5.5%
3.75%
5.25%
—
3.5%
Pension plans
2006
5.25%
3.5%
5.25%
7.5%
3.5%
Other plans
5.25%
3.5%
5.25%
—
3.5%
For valuation purposes, the annual hypothetical growth rate of covered health care costs per participant was estimated at 9.5% in 2007 (2006 – 9.6%). According to the assumptions retained, this rate should diminish gradually before stabilizing at 4.9% in 2016. A one-percentage-point increase or decrease in the hypothetical growth rate would have the following effects:
Effect on the cost of recorded benefits
Effect on accrued benefit obligations
$
$
1%
increase
0.2
2.9
$
$
1%
decrease
(0.2)
(2.4)
56 annual report 2007

Notes to consolidated financial statements
(Millions of dollars, except for data per share)
18
obligations under leases and serviCe agreements The Company has operating lease commitments, with varying terms through 2028, to lease premises and equipment used for business purposes.
The minimum payment balance amounted to $1,242.4 as at September 29, 2007 ($1,212.8 as at September 30, 2006).
The minimum lease payments over the next fiscal years are as follows: $144.2 in 2008; $140.3 in 2009; $127.0 in 2010,
$113.8 in 2011; $104.1 in 2012 and $613.0 for 2013 and thereafter.
In addition, the Company has leases with varying terms through 2031, to lease premises which it sublets to clients, generally under the same terms and conditions. The minimum payment balance under these leases was $361.7 as at September 29, 2007 ($318.0 as at September 30, 2006) and the average annual payments for the next five years are $30.8.
The Company also has commitments under service contracts staggered over various periods through 2012.
The minimum payment balance amounted to $220.6 as at September 29, 2007 ($239.8 as at September 30, 2006).
The minimum payments over the next fiscal years are as follows: $82.7 in 2008; $80.3 in 2009; $42.7 in 2010;
$14.8 in 2011 and $0.1 in 2012.
19
endorsements For certain of its customers with whom business relationships are established, the Company assumes a contingent liability as guarantor of lease agreements with varying terms through 2019 for which the average annual lease payments for the next five years are $1.2. The maximum contingent liability under these endorsements as at September 29, 2007 was $9.1. Also, the Company has endorsed loans granted to certain customers by financial institutions, with varying terms through 2015, for a maximum amount of $22.5. The balance of these loans as at September 29, 2007 was $22.5. In return, the Company holds a movable hypothec on the shares of the Company held by its customers, as well as second hypothecs on the inventories, movable goods, intangible goods and accounts receivable. The guarantees and hypothecs sufficiently cover the balance of these loans. No liability has been recorded in respect of these endorsements for the years ended September 29, 2007 and September 30, 2006.
Claims In January 2007, the Company was named in a suit brought by beneficiaries of a multiemployer pension plan. They claim that plan assets were mismanaged and are seeking, among others, damages of $1 billion from the trustees and the employers. The Company is one of the 443 employers affected by the suit and did not participate in managing the plan. The Company forcefully contests the suit’s merits and considers that it will have no future financial obligation relating to this recourse. The Company has recently received notice from counsel for the beneficiaries who brought this suit indicating that he has received instructions from his clients to discontinue the action against the employers including the Company.
In the normal course of business, various proceedings and claims are instituted against the Company. The
Company contests the validity of these claims and proceedings and management believes that any forthcoming settlement in respect of these claims will not have a material effect on the financial position or on the consolidated earnings of the Company.
57 annual report 2007

Notes to consolidated financial statements
(Millions of dollars, except for data per share)
20
During the year, sales to companies controlled by members of the Board of Directors totalled $23.7 (2006 – $38.9) and no sales were done to an affiliated company (2006 – $3.5). These transactions were conducted in the normal course of business and were accounted for at the exchange amount. As at September 29, 2007, accounts receivable included a balance of $0.7 ($0.7 as at September 30, 2006) resulting from these transactions.
As an integral part of the purchase for A&P Canada in 2005 an information system service agreement was entered into with A&P US to provide information system services to A&P Canada. The agreement covered a two-year period expiring on August 12, 2007. The costs related to information system services, have been established at approximately $20 per year and totalled $14.8 for the year ended September 29, 2007 (2006 – $22.4).
21
The Company sells certain products subject to price regulation: drugs In Québec, the Minister of Health and Social Services establishes, by regulation, the list of drugs whose cost is covered by the basic prescription drug insurance plan and regulates the selling price of such drugs. The list of drugs is established pursuant to the Act respecting prescription drug insurance . A profit margin, under the government-determined ceiling, may be added to the set price pursuant to the Regulation respecting the conditions on which manufacturers and wholesalers of medications shall be recognized.
In Ontario, the Ministry of Health and Long-Term Care establishes, by regulation, the list of drugs whose cost is covered by the Ontario Drug Benefit Act and regulates the selling price of such drugs. milk Milk prices are regulated by the Act respecting the marketing of agricultural, food and fish products and the Règlement sur les prix du lait aux consommateurs . The Régie des marchés agricoles et alimentaires du
Québec sets milk prices by determining the minimum and maximum prices based on the three regions covering the territory of the Province of Québec. beer Beer prices are regulated by the Act respecting liquor permits and the Regulation respecting promotion, advertising and educational programs relating to alcoholic beverages . The Régie des alcools, des courses et des jeux du Québec sets beer prices based on the percentage of alcohol content. wine Wine prices are regulated by the Act respecting the Société des alcools du Québec and the Regulation respecting the terms of sale of alcoholic beverages by holders of a grocery permit . The retail price of permitted alcoholic beverages may not be less than the retail price set by the Société des alcools du Québec.
The product price lists mentioned above are periodically updated. Sales of products subject to price regulation totalled $921.5 in 2007 (2006 – $873.3). Sales accounting is the same whether the price is regulated or not.
58 annual report 2007

Notes to consolidated financial statements
(Millions of dollars, except for data per share)
22
In the normal course of business, the Company is exposed primarily to interest rate fluctuation risks. The Company manages these risks through the use of derivative financial instruments, that is, bond rate locks to lock in interest rates and interest rate swaps. The Company’s management is responsible for determining acceptable levels of risk and uses the derivative financial instruments solely to hedge its existing liabilities or obligations, and not to generate a profit from trading transactions.
Interest rate swaps were contracted in 2006 for a total notional amount of $150 of Credit Facility A. Those derivative financial instruments are used as hedges. Unrealized fair market gains or losses are not recognized. These contracts enable the Company to substitute the variable rate interest payments with fixed rate interest payments under the following conditions:
Objective
Fixing debt cost
Fixing debt cost
Fixing debt cost
Fixed rate
3.9480%
3.9820%
4.0425%
Notional amount
$ 50
$ 50
$ 50
Maturity
November 23, 2008
December 16, 2009
December 16, 2010
Fair value The financial instruments’ book and fair values were as follows:
Investments and other assets
Available-for-sale financial assets
Investments in companies
Loans and receivables
Loans to certain customers
Derivatives designated as cash flow hedges
Interest rate swaps
Long-term debt
Other financial liabilities
Credit Facility A
Series A notes
Series B notes
Loans
Obligations under capital leases
$
$
$
$
As at September 29, 2007
Book value
Fair value
0.1
9.1
1.8
394.5
200.0
400.0
10.7
38.8
$ 1,044.0
$
$
$
0.1
9.1
1.8
$ 394.5
186.2
356.6
10.7
50.2
$ 998.2
As at September 30, 2006
Book value
Fair value
$
$
0.1
8.6
—
$ 469.3
200.0
400.0
10.4
44.2
$ 1,123.9
$
$
$
0.1
8.6
0.6
$ 469.3
199.8
410.3
10.4
53.7
$ 1,143.5
The fair value of cash and cash equivalents, accounts receivable, bank loans and accounts payable approximates their carrying value because of the short-term maturity of these instruments.
The fair value of investments in companies, public companies for the most part, is evaluated based on stock market prices at the balance sheet date.
59 annual report 2007

Notes to consolidated financial statements
(Millions of dollars, except for data per share)
22
The fair value of loans to certain customers, credit facilities and loans payable is equivalent to their carrying value since their interest rates are comparable to market rates.
The fair value of the derivative financial instruments generally reflects the estimates of the amounts the Company would receive by way of settlement of favourable contracts or that it would pay to terminate unfavourable contracts at the balance sheet date. These fair values are estimated using the current market interest rate and compare with prices obtained from major financial institutions.
The fair value of notes represents the obligations that the Company would have to face in the event of the negotiation of similar notes under current market conditions.
The fair value of the obligations under capital leases represents the obligations that the Company would have to face in the event of the negotiation of similar leases under current market conditions.
Credit risk The Company sells its products to numerous customers in Canada. The Company performs ongoing credit evaluations of its customers. As at September 29, 2007 and September 30, 2006, no customer accounted for over
10% of total accounts receivable.
The Company is subject to risk related to the off-balance-sheet nature of derivative financial instruments, whereby counterparty failure would result in economic losses or favorable contracts. However, as the counterparties to these derivative financial instruments are major financial institutions, the Company expects that they will satisfy their obligations under the contracts.
23
On November 29, 2007, the Company took advantage of an option to purchase shares that had been granted by
The great Atlantic & Pacific Tea Company (A&P US), purchasing 1.5 million Class A Subordinate Shares sold by
A&P US for a total amount of $40.9. The shares purchased were cancelled and recorded as part of the Company’s share buyback program.
24
Certain comparative figures have been reclassified to conform with the presentation adopted in the current year.
60 annual report 2007

Summary of results
(Millions of dollars)
Sales
EBITDA (1)
Adjusted EBITDA
(1) (2) (4)
Depreciation and amortization
Operating income
Adjusted operating income (2)
Interest
Income taxes
Adjusted income taxes (2)
Net earnings
Adjusted net earnings
(2) (3)
Financial structure
(Millions of dollars)
Working capital
Current assets
Current liabilities
Fixed assets
Intangible assets goodwill
Total assets
Long-term debt
Shareholders’ equity
Financial ratios
EBITDA (1) /sales
(%)
Operating income/sales
(%)
Net earnings/sales
(%)
Cash flows from operating activities/sales
(%)
Return on shareholders’ equity
(%)
Long-term debt/shareholders’ equity
(xx:1)
Working capital
(xx:1)
Interest coverage
(Times)
Share
(Dollars)
Net earnings
Fully diluted net earnings
Adjusted fully diluted net earnings (2) (3)
Dividend
Book value
Market price
High
Low
Number of shares outstanding
at year-end
(Millions)
Weighted average number of shares
outstanding
(Millions)
Trading volume
(Millions)
2007
(52 weeks)
10,644.6
625.5
656.0
165.7
459.8
490.3
61.6
125.2
137.3
276.6
295.0
(14.4)
1,054.7
1,069.1
1,202.8
342.1
1,490.1
4,273.9
1,038.9
1,932.3
5.9
4.3
2.6
3.4
15.1
0.54
0.99
7.5
2.40
2.37
2.53
0.45
16.88
41.78
33.23
114.5
115.0
56.1
(1) Earnings before interest, taxes, depreciation and amortization
(2) See section on “Non-GAAP measurements” on page 28
(3) For more information, see the “Net earnings adjustments“ table on page 20
(4) For more information, see the “EBITDA adjustments“ table on page 20
2006
(53 weeks)
10,944.0
610.5
628.0
177.9
432.6
450.1
68.7
107.0
119.9
253.0
257.6
(32.6)
1,061.3
1,093.9
1,129.9
331.7
1,490.1
4,163.9
1,116.6
1,723.8
5.6
4.0
2.3
3.6
15.6
0.65
0.97
6.3
2.21
2.18
2.22
0.415
15.02
36.00
28.47
114.7
114.6
41.7
2004
(52 weeks)
5,946.5
320.0
320.0
71.7
248.3
248.3
3.5
76.0
76.0
168.8
168.8
(11.6)
607.3
618.9
504.9
175.3
190.0
1,563.8
9.0
852.1
5.4
4.2
2.8
5.2
21.2
0.01
0.98
70.9
1.73
1.72
1.72
0.325
8.81
22.75
17.22
96.6
97.6
47.4
2005
(52 weeks)
6,646.5
365.0
365.0
87.2
277.8
277.8
7.4
81.0
81.0
190.4
190.4
(82.9)
960.9
1,043.8
1,106.4
194.8
1,543.7
3,927.3
1,205.0
1,513.3
5.5
4.2
2.9
4.2
16.1
0.80
0.92
37.7
1.94
1.92
1.92
0.385
13.23
35.50
18.50
114.4
98.1
39.5
2003
(52 weeks)
5,716.3
315.1
315.1
64.9
250.2
250.2
2.8
80.6
80.6
166.8
166.8
(46.3)
640.1
686.4
475.9
159.2
182.8
1,505.3
8.8
740.1
5.5
4.4
2.9
3.6
24.3
0.01
0.93
89.4
1.68
1.67
1.67
0.265
7.57
20.20
15.76
97.8
99.0
32.8
61 annual report 2007

07 board oF direCtors
Pierre Brunet (1) (3)
Montréal, Québec
Director
Marc DeSerres (2) (4)
Westmount, Québec
Director
Claude Dussault (3)
Toronto, Ontario
Director
Serge Ferland (1)
Québec City, Québec
Director
Bobbie Andrea gaunt (2) (3)
Saugatuck, Michigan
Director
Paule gauthier (2) (3)
Québec City, Québec
Director
Paul gobeil (1)
Ottawa, Ontario
Vice-Chairman of the Board
Christian W.E. Haub (1) (4) greenwich, Connecticut
Director
Maurice Jodoin (1) (3) (4)
Montréal, Québec
Chairman of the Board
Maryse Labonté
Saint-Sylvestre, Québec
Director
Michel Labonté (2)
Montréal, Québec
Director
Pierre H. Lessard (1)
Westmount, Québec
Chairman of the Executive
Committee
Marie-José Nadeau (2) (4)
Montréal , Québec
Director
Bernard A. Roy (1) (4)
Montréal, Québec
Director management oF metro inC.
Pierre H. Lessard
President and
Chief Executive Officer
Eric Richer La Flèche
Executive Vice-President and Chief Operating Officer
Alain Brisebois (5)
Senior Vice-President
Ontario Division
Johanne Choinière
Senior Vice-President
National Procurement and Corporate Brands
Richard Dufresne
Senior Vice-President and Chief Financial Officer
Robert Sawyer (5)
Senior Vice-President
Québec Division
Jacques Couture
Vice-President
Information Systems
Paul Dénommée
Vice-President
Corporate Controller
Alain Picard
Vice-President
Human Resources
Simon Rivet
Vice-President general Counsel and Secretary management oF québeC region
Robert Sawyer (5)
Senior Vice-President
Pierre Paul Bourdon
Vice-President
Food Services
Denise Martin
Vice-President and general Manager
McMahon Distributeur pharmaceutique inc.
management oF ontario region
Alain Brisebois (5)
Senior Vice-President
(1) Member of the Executive
Committee
(2) Member of the Audit
Committee
(3) Member of the Human
Resources Committee
(4) Member of the Corporate governance and
Nomination Committee
(5) As of January 3, 2008, Alain
Brisebois will become Senior
Vice-President, Québec
Division, and Robert Sawyer will become Senior Vice-
President, Ontario Division.
62 annual report 2007

07
METRO INC. is a leader in the Canadian food industry with annual sales of close to $11 billion. It holds the second position in Canada’s two largest markets, Québec and
Ontario, operating a network of 553 food stores under the following banners: Metro,
Metro Plus, A&P, Dominion, Loeb, Ultra Food & Drug, The Barn Markets, Super C and Food
Basics. METRO also operates 263 drugstores under the Brunet, Clini Plus, Pharmacy and
Drug Basics banners. METRO, throughout its network, employs 65,000 people.
Financial Highlights
Message to Shareholders
Operations Review
Management’s Discussion and Analysis
Consolidated Financial Statements
Financial Retrospective
Directors and Officers
Shareholder Information
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16
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2
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62
63
Transfert agent and registrar
Computershare
Investor Services
Stock listing
Toronto Stock Exchange
Ticker Symbol: MRU.A
Auditors
Ernst & Young LLP
Chartered Accountants
Head office address
11011 Maurice-Duplessis Blvd.
Montréal, Québec H1C 1V6
The Annual Information Form may be obtained from the
Investor Relations Department:
Tel.: (514) 643-1055
E-mail: finance@metro.ca
Vous pouvez vous procurer la version française de ce rapport auprès du service des relations avec les investisseurs.
METRO INC.’s corporate information and press releases are available on the Internet at the following address: www.metro.ca
Annual meeting
The Annual General Meeting of Shareholders will be held on January 29, 2008 at 11:00 a.m. at the:
Omni Mont-Royal Hotel
1050 Sherbrooke Street West
Montréal, Québec H3A 2R6
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Declaration Date
January 28, 2008
April 15, 2008
August 6, 2008
September 23, 2008
Record Date
February 15, 2008
May 12, 2008
August 19, 2008
October 28, 2008
* Subject to approval by the Board of Directors.
Payment Date
March 10, 2008
June 2, 2008
September 3, 2008
November 18, 2008
*
2008 fIsCAl yEAR
PROJECTIONS Any statement contained in the present Report, which does not constitute an historical fact, may be deemed a projection. Verbs such as “believe”, “foresee”, “estimate” and other similar expressions appearing in the present Report generally indicate projections. These projections do not provide guarantees as to the future performance of METRO INC. and are subject to risks, both known and unknown, as well as uncertainties which may cause the outlook, profitability and actual results of METRO INC. to differ significantly from the profitability or future results stated or implied by these projections.