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## MANAGEMENT’S DISCUSSION & ANALYSIS (CONT’D) 

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*  2009 has been converted to USD by taking the previously reported Canadian dollar amount and converting it at the annual exchange rate for the year. 2009 is in accordance with Canadian GAAP (not restated to IFRS). 

In 2013 our ROAM was 13.5%, compared to our benchmark of 15.0%. Adjusted EBITDA in 2013 decreased by 6.3 million over 2012 but average net assets managed also decreased, principally inventory. The net result is that ROAM did not change significantly from what we reported at the end of 2012. The American Pride Acquisition, completed on October 1, 2013, increased our net assets managed for three months in 2013. As these assets were purchased based on achieving the synergies projected there is a mismatch between the assets acquired and the returns in the current year. Also, production challenges encountered after our Danvers plant closure in the first quarter of 2013, had a negative effect on this ratio. 

## Return on equity (“ROE”) is calculated as follows: 

Adjusted Net Income (calculated as under the heading “Non-IFRS Financial Measures” in the Introduction section of this MD&A, except including stock-based compensation expense). 

## Divided by: 

Average common equity  (calculated using the common equity month-end balance for each of the proceeding 13 months). 

## Return on Assets Managed (also known as Return on Capital Employed) Based on Adjusted EBITDA 

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*  2009 has been converted to USD by taking the previously reported Canadian dollar amount and converting it at the annual average exchange rate for the year. 2009 is in accordance with Canadian GAAP (not restated to IFRS). 

Our ROE in 2013 was 20.4%. Adjusted Net Income increased 8.4% in 2013 over 2012 and average common equity increased by 7.0% in 2013, increasing ROE to above our target of 18.0%. 

## Trailing 12-month Adjusted EBIT as a percentage of net sales is calculated as follows: 

Adjusted EBIT  as defined under the heading “Non-IFRS Financial Measures” in the Introduction section of this MD&A. 

## Divided by: 

Sales as disclosed on the consolidated statement of income. 

Our trailing 12-month Adjusted EBIT as a percentage of net sales revenue is 7.4%. This ratio has deteriorated over the last year due to the issues encountered in 2013 related to the closure of the Danvers plant and due to American Pride having lower margins than those High Liner Foods has traditionally achieved. We have a plan to increase the margins from American Pride’s operations based on the attainment of synergies. 

## Return on Equity Based on Adjusted Net Income 

