## Interest-bearing debt to trailing 12-month EbITDA is calculated as follows: 

Interest-bearing debt, being bank loans, plus current and long-term portions of long-term debt and capital lease obligations 

Divided by: Adjusted EBITDA, which is defined on page 37 

Interest-bearing debt to trailing 12-month Adjusted EBITDA is 4.4 times on a pro forma basis to include the income of the Icelandic USA Acquisition, based on the interest-bearing debt at the end of fiscal 2011. This is higher than last year as debt increased in December 2011 due to the Icelandic USA Acquisition. On a pro forma basis, including the historical EBITDA and near term synergies expected from the Icelandic USA Acquisition, the ratio is 3.7 times. Our intent is to bring the interest-bearing debt to 12-month EBITDA ratio to our target of 3.0 times as soon as possible. 

## Inventory turns is calculated as follows: 

Cost of sales for the year Divided by: 

Average inventory available for sale or use as of the end of each month of the year It includes raw material, finished goods, packaging and ingredients, but excludes maintenance parts and inventory in transit and in inspection 

Our inventory turns in 2011 were 3.7 times. Our target in 2010 was 5.0 times. As many of our products come from various parts of the world, the resulting lead-time is long and, given our commitment to ensuring that we meet customer service requirements, this results in an inventory level that is higher than ideal. Given this dynamic, we changed the benchmark target in 2011 to 4.2 times to reflect what we think is achievable in our current business environment. This is a more realistic target for inventory turns due to the long supply chain and seasonality for our products. 

## 2. STRATEGIC MEASURES 

Our performance against key metrics will tell us whether we are achieving our strategic objectives. We made considerable progress in 2011 by focusing on these metrics. 

## 2.1 OUR BRANDS 

## MARkET SHARE 

The market shares of our retail brands speak volumes. Food service market shares are hard to measure, as there is no independent source that tracks food service sales in a manner comparable to the retail channel. However, based on our information and knowledge of the market, we are clearly the market leader in Canada and are now the largest frozen value-added seafood supplier in the USA after the acquisitions in 2010 and 2011. 

We track retail market share information by purchasing syndicated data. We measure share on a rolling four-week, twelve- or thirteen-week, and fifty-two week basis, and have good insight as to whether consumers are responding to our new product ideas and promotions. In Canada, we are the leader in the retail channel, with a market share more than twice the size of our nearest competitor. In the United States, our Fisher Boy brand has a strong presence in certain regions and Sea Cuisine  has a growing importance in the prepared seafood category. 

## DISTRIbuTIOn 

An important measure for retail distribution is “all commodity volume” (ACV). This is a measure of the volume of the traditional grocery stores as a percentage of total stores in a market (Canada or the United States) in which our products are sold. An increase in ACV means that our products are in more stores and, therefore, available to more consumers in more markets, which should translate into increased sales. In Canada, our ACV approaches 100% as High Liner  products can be found in virtually all grocery stores. In the U.S., our brands, which include Fisher Boy, High Liner and Sea Cuisine,  have a smaller share of the total frozen seafood category than  High Liner  in Canada. ACV for all High Liner  umbrella branded products was nearing 61% at the end of 2011 compared to 57% at the end of last year. In some regions in the U.S., this is substantially higher. In Mexico, although we do not track ACV, we are confident in our position as a leading seafood supplier in the major centres. 

In Canada, we use ACNielsen ®  to track market share and ACV of our retail brands in grocery, mass merchandising, general merchandising, club stores, and distributors. In the U.S., we use Information Resources Inc. (“IRI”) to track market share and ACV of our retail brands, where it tracks sales in traditional grocery stores and Wal-Mart supercentres, but excludes club stores and other mass merchandisers. Since we are well represented in these channels in the U.S., we believe our actual ACV is higher than that as presented by IRI. 

