FOR IMMEDIATE RELEASE December 12, 2014

Empire Company Reports Fiscal 2015 Second Quarter Results Empire Company Limited (“Empire” or the “Company”) (TSX: EMP.A) today announced financial results for its second quarter ended November 1, 2014. In the second quarter, the Company recorded adjusted net earnings from continuing operations, net of noncontrolling interest, of $128.2 million ($1.39 per diluted share) compared to $83.4 million ($1.22 per diluted share) in the second quarter last year, a 13.9 percent increase on a per share basis. Second Quarter Highlights • • • • • • • • (1) (2)

Sales of $5,995.1 million, up $1,580.8 million or 35.8 percent. Sobeys’ same-store sales (1) increased 1.7 percent. EBITDA (1) of $324.3 million compared to $196.8 million last year, up $127.5 million or 64.8 percent. Adjusted EBITDA (1) of $332.2 million compared to $222.0 million last year, up $110.2 million or 49.6 percent. Net earnings from continuing operations, net of non-controlling interest, of $116.9 million compared to $60.5 million last year, a 93.2 percent increase. Adjusted net earnings from continuing operations (1), net of non-controlling interest, of $128.2 million compared to $83.4 million last year, a 53.7 percent increase. Adjusted EPS (2) from continuing operations (fully diluted) of $1.39 compared to $1.22 last year, a 13.9 percent increase. Free cash flow (1) generation of $140.0 million compared to $169.6 million last year. Funded debt to total capital (1) ratio of 34.7 percent versus 38.0 percent at May 3, 2014. See “Non-GAAP Financial Measures” section of this news release. Earnings per share (“EPS”).

Marc Poulin, President and CEO of Empire Company Limited stated, “We are pleased with our second quarter results and our progress year-to-date. Growth in consolidated sales in the second quarter of 35.8 percent and in adjusted net earnings from continuing operations of 53.7 percent largely reflects the impact of the acquisition of Canada Safeway combined with Sobeys’ sales and merchandising initiatives, including new and innovative commercial programs as part of the Company’s purpose to help Canadians Eat Better, Feel Better, and Do Better. “We realized synergies from the Canada Safeway acquisition of $31.5 million in the quarter and are on schedule with our integration plan. We remain focused on the ongoing promotion of our food-focused culture, while continuing to secure operational efficiencies and cost reductions across the organization.” 115 King Street • Stellarton, NS • B0K 1S0

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Dividend Declaration The Board of Directors declared a quarterly dividend of $0.27 per share on both the Non-Voting Class A shares and the Class B common shares that will be payable on January 30, 2015 to shareholders of record on January 15, 2015. These dividends are eligible dividends as defined for the purposes of the Income Tax Act (Canada) and applicable provincial legislation and, therefore, qualify for the favourable tax treatment applicable to such dividends. Discontinued Operations On November 1, 2013, the Company announced that Empire Theatres completed the sale of 46 theatres with 397 screens in separate transactions with Cineplex Inc. and Landmark Cinemas as previously announced on June 27, 2013. As a result of the sale, financial results related to Empire Theatres, as previously reported in the investments and other operations segment, have been included in discontinued operations in the condensed consolidated statements of earnings for the 13 and 26 weeks ended November 2, 2013. CONSOLIDATED OPERATING RESULTS ($ in millions, except per share amounts) Sales EBITDA (2) Adjusted EBITDA (2) Operating income (2) Net earnings from continuing operations (3) Net earnings from discontinued operations Net earnings (3) Adjusted net earnings from continuing operations (2)(3) EPS from continuing operations (fully diluted) (2)(3) Adjusted EPS from continuing operations (fully diluted) (2)(3) (1) (2) (3)

$

13 Weeks Ended Nov. 1, Nov. 2, 2014 2013 (1) 5,995.1 $ 4,414.3 324.3 196.8 332.2 222.0 204.2 106.4

($) Change $ 1,580.8 127.5 110.2 97.8

$

26 Weeks Ended Nov. 1, Nov. 2, 2014 2013 (1) 12,217.8 $ 9,009.6 667.0 419.0 676.9 454.3 423.8 240.3

$

($) Change 3,208.2 248.0 222.6 183.5

116.9

60.5

56.4

240.0

143.1

96.9

116.9

108.7 169.2

(108.7) (52.3)

240.0

91.1 234.2

(91.1) 5.8

128.2

83.4

44.8

259.9

173.1

86.8

$

1.27

$

0.89

$

0.38

$

2.60

$

2.10

$

0.50

$

1.39

$

1.22

$

0.17

$

2.81

$

2.54

$

0.27

Amounts have been reclassified to correspond to the current presentation on the condensed consolidated statement of earnings. See “Non-GAAP Financial Measures” section of this news release. Net of non-controlling interest.

Sales Consolidated sales for the 13 weeks ended November 1, 2014 were $5,995.1 million compared to $4,414.3 million in the second quarter last year, an increase of $1,580.8 million or 35.8 percent. The growth in sales is primarily the result of sales from Safeway operations and food inflation, slightly offset by increased competitive square footage in the market, store closures and divestitures, and ongoing competitive intensity. During the second quarter, Sobeys’ same-store sales increased 1.7 percent from the same period last year.

115 King Street • Stellarton, NS • B0K 1S0

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EBITDA Consolidated EBITDA in the second quarter was $324.3 million compared to $196.8 million in the second quarter last year, a $127.5 million or 64.8 percent increase. EBITDA margin increased to 5.41 percent in the second quarter from 4.46 percent in the same period last year. These increases relate to the food retailing segment, and the impact of the Safeway operations and synergies realized since the acquisition. After adjusting EBITDA for items which are considered not indicative of underlying business operating performance, as presented in the following table, second quarter adjusted EBITDA was $332.2 million compared to $222.0 million in the second quarter last year, an increase of $110.2 million or 49.6 percent. Adjusted EBITDA margin was 5.54 percent in the second quarter compared to 5.03 percent last year. The table below provides a reconciliation of EBITDA to adjusted EBITDA for the 13 and 26 weeks ended November 1, 2014 compared to the 13 and 26 weeks ended November 2, 2013. ($ in millions) (1) EBITDA (consolidated) Adjustments: Loss on the disposal of manufacturing facilities Transaction costs associated with the Canada Safeway acquisition Organizational realignment and restructuring costs Plant closure Adjusted EBITDA (consolidated) (1)

13 Weeks Ended Nov. 1, 2014 Nov. 2, 2013 $ 324.3 $ 196.8

$

26 Weeks Ended Nov. 1, 2014 Nov. 2, 2013 $ 667.0 $ 419.0

7.2

-

7.2

-

0.7

16.8

1.7

26.9

7.9 332.2

8.4 25.2 222.0

1.0 9.9 676.9

8.4 35.3 454.3

$

$

$

EBITDA generated from Empire Theatres has been recorded in discontinued operations for fiscal 2014.

Operating Income Consolidated operating income in the second quarter was $204.2 million, an increase of $97.8 million or 91.9 percent from the $106.4 million recorded in the second quarter last year. Operating income was impacted primarily by the factors affecting EBITDA, offset by depreciation and amortization expenses related to the food retailing operating segment, when compared to the same period last year. Finance Costs Finance costs, net of finance income, for the 13 weeks ended November 1, 2014 were $41.0 million, an increase of $19.9 million from the $21.1 million recorded in the same period last year. This increase is primarily the result of higher interest expense due to increased debt levels as a result of financing for the Canada Safeway acquisition.

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Income Taxes The Company’s effective income tax rate for the 13 weeks ended November 1, 2014 was 25.2 percent compared to 26.3 percent in the same quarter last year. The decrease in the effective income tax rate is primarily due to the timing of the realization of tax benefits compared to the same period last year. Net Earnings and Adjusted Net Earnings from Continuing Operations Consolidated net earnings from continuing operations, net of non-controlling interest, in the second quarter equaled $116.9 million ($1.27 per diluted share) compared to $60.5 million ($0.89 per diluted share) in the second quarter last year. After factoring in the impact of the adjustments for items which are considered not indicative of underlying business operating performance, Empire recorded adjusted net earnings from continuing operations, net of non-controlling interest, of $128.2 million ($1.39 per diluted share) for the 13 weeks ended November 1, 2014 compared to $83.4 million ($1.22 per diluted share) recorded in the second quarter last year, a 53.7 percent increase. For the quarter ended November 1, 2014, Empire had a weighted average number of shares outstanding (fully diluted) of 92.3 million compared to 68.2 million for the same period last year.

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The following table reconciles reported net earnings from continuing operations, net of non-controlling interest, to adjusted net earnings from continuing operations. ($ in millions, except per share amounts, net of tax) Net earnings from continuing operations (1) by segment : Food retailing Investments and other operations (1) Net earnings from continuing operations (2) EPS from continuing operations (fully diluted) Adjustments: Loss on the disposal of manufacturing facilities Intangible amortization associated with the Canada Safeway acquisition Finance costs associated with the network rationalization Transaction costs associated with the Canada Safeway acquisition Plant closure Finance costs associated with the Canada Safeway acquisition Organizational realignment and restructuring costs Adjusted net earnings from (1) continuing operations Adjusted net earnings from (1) continuing operations by segment : Food retailing Investments and other operations Adjusted net earnings from (1) continuing operations Adjusted EPS from continuing operations (2) (fully diluted) (1) (2)

13 Weeks Ended Nov. 1, 2014 Nov. 2, 2013

26 Weeks Ended Nov. 1, 2014 Nov. 2, 2013

$

$

$

$ $

100.4 16.5 116.9 1.27

$ $

56.3 4.2 60.5 0.89

$

5.0

$

-

$

$ $

213.9 26.1 240.0 2.60

$ $

135.5 7.6 143.1 2.10

$

5.0

$

-

4.7

-

10.7

-

1.1

-

2.3

-

0.5 -

12.4 -

1.2 0.7

19.5 -

-

5.4

-

5.4

11.3

5.1 22.9

19.9

5.1 30.0

$

128.2

$

83.4

$

259.9

$

173.1

$

111.7 16.5

$

74.1 9.3

$

233.8 26.1

$

160.4 12.7

$

128.2

$

83.4

$

259.9

$

173.1

$

1.39

$

1.22

$

2.81

$

2.54

Net of non-controlling interest. Empire had a weighted average number of shares outstanding (fully diluted) of 92.3 million in the second quarter compared to 68.2 million in the second quarter last year. This increase is due to the acquisition of Canada Safeway and the issuance of 24,265,000 Non-Voting Class A shares in the third quarter of fiscal 2014.

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Net Earnings The following table reconciles Empire’s segmented net earnings from continuing operations, net of non-controlling interest, to net earnings, net of non-controlling interest, for the 13 and 26 weeks ended November 1, 2014 compared to the 13 and 26 weeks ended November 2, 2013. ($ in millions, except per share amounts, net of tax) Net earnings from continuing operations by segment (1): Food retailing Investments and other operations

13 Weeks Ended Nov. 1, 2014 Nov. 2, 2013

$

100.4

$

16.5

56.3

($) Change

$

4.2

44.1

26 Weeks Ended Nov. 1, 2014 Nov. 2, 2013

$

213.9

$

26.1

12.3

135.5

($) Change

$

7.6

78.4 18.5

Net earnings from continuing operations (1)

$

116.9

$

60.5

$

56.4

$

240.0

$

143.1

$

96.9

EPS from continuing operations (fully diluted) (2)

$

1.27

$

0.89

$

0.38

$

2.60

$

2.10

$

0.50

Net earnings from discontinued operations Net earnings by segment (1): Food retailing Investments and other operations Net earnings (1) EPS (fully diluted) (2) (1) (2)

-

108.7

-

(108.7)

91.1

(91.1)

$

100.4

$

56.3

$

44.1

$

213.9

$

135.5

$

78.4

$ $

16.5 116.9 1.27

$ $

112.9 169.2 2.48

$ $

(96.4) (52.3) (1.21)

$ $

26.1 240.0 2.60

$ $

98.7 234.2 3.44

$ $

(72.6) 5.8 (0.84)

Net of non-controlling interest. Empire had a weighted average number of shares outstanding (fully diluted) of 92.3 million in the second quarter compared to 68.2 million in the second quarter last year. This increase is due to the acquisition of Canada Safeway and the issuance of 24,265,000 Non-Voting Class A shares in the third quarter of fiscal 2014.

Net earnings from discontinued operations in the second quarter of fiscal 2015 equaled $ nil million ($ nil per diluted share) compared to $108.7 million ($1.59 per diluted share) in the same quarter last year. FINANCIAL PERFORMANCE BY SEGMENT The Company operates and reports on two business segments: 1) Food Retailing, which consists of wholly-owned subsidiary Sobeys Inc. (“Sobeys”), and 2) Investments and Other Operations, which as of November 1, 2014 included investments in Crombie REIT (41.5 percent equity accounted interest; 39.3 percent fully diluted) and interests in Genstar.

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FOOD RETAILING The following table presents the food retailing segment’s contribution to Empire’s consolidated sales, gross profit, EBITDA, adjusted EBITDA, operating income, net earnings, net of non-controlling interest, and adjusted net earnings, net of noncontrolling interest.

($ in millions) Sales Gross profit EBITDA Adjusted EBITDA Operating income Net earnings (2) Adjusted net earnings (2) (1) (2)

$

13 Weeks Ended (1) Nov. 1, Nov. 2, 2014 2013 5,995.1 $ 4,416.8 1,480.9 993.3 301.5 190.1 309.4 206.9 181.6 99.8 100.4 56.3 111.7 74.1

($) Change $ 1,578.3 487.6 111.4 102.5 81.8 44.1 37.6

$

26 Weeks Ended (1) Nov. 1, Nov. 2, 2014 2013 12,217.8 $ 9,011.7 3,026.8 2,031.1 630.7 405.3 640.6 432.2 387.8 226.8 213.9 135.5 233.8 160.4

($) Change $ 3,206.1 995.7 225.4 208.4 161.0 78.4 73.4

Net of consolidation adjustments which includes a purchase price allocation from the privatization of Sobeys. Net of non-controlling interest.

Sales Empire’s food retailing segment reported sales of $5,995.1 million for the 13 weeks ended November 1, 2014, an increase of $1,578.3 million or 35.7 percent over the same quarter last year. The growth in sales is primarily the result of sales from Safeway operations and food inflation, slightly offset by increased competitive square footage in the market, store closures and divestitures, and ongoing competitive intensity. Sobeys’ same-store sales increased 1.7 percent during the second quarter of fiscal 2015. Gross Profit For the second quarter of fiscal 2015, Sobeys’ gross profit was $1,480.9 million, an increase of $487.6 million or 49.1 percent compared to the same period last year. Gross margin in the second quarter increased 221 basis points to 24.70 percent compared to 22.49 percent in the same period last year. The increase in gross margin is significantly impacted by gross profit contribution related to Safeway operations. Overall gross profit and gross margin in the second quarter were impacted by the following factors: (i) the Canada Safeway acquisition and related synergies; (ii) inflation; and (iii) a highly promotional environment.

115 King Street • Stellarton, NS • B0K 1S0

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EBITDA EBITDA contribution from Sobeys to Empire in the second quarter was $301.5 million (5.03 percent of sales) in the second quarter compared to a $190.1 million (4.30 percent of sales) contribution in the same quarter last year, an increase of $111.4 million or 58.6 percent. EBITDA was impacted mainly by Safeway operations and synergies of $31.5 million (2014 – $ nil) realized during the second quarter of fiscal 2015 related to the Canada Safeway acquisition. These, combined with the other factors affecting gross profit as previously mentioned, had a net positive effect on EBITDA. After adjusting for items which are considered not indicative of underlying business operating performance, adjusted EBITDA contribution from Sobeys to Empire in the second quarter was $309.4 million (5.16 percent of sales), an increase of $102.5 million or 49.5 percent from the $206.9 million (4.68 percent of sales) recorded in the same period last year. Adjusted EBITDA was impacted by the loss on the disposal of manufacturing facilities combined with reduced transaction costs related to the Canada Safeway acquisition of $0.7 million (2014 – $16.8 million). ($ in millions) EBITDA (contributed by Sobeys) Adjustments: Loss on the disposal of manufacturing facilities Transaction costs associated with the Canada Safeway acquisition Plant closure Adjusted EBITDA

13 Weeks Ended Nov. 1, 2014 Nov. 2, 2013 $ 301.5 $ 190.1

7.2

$

0.7 7.9 309.4

26 Weeks Ended Nov. 1, 2014 Nov. 2, 2013 $ 630.7 $ 405.3

7.2

-

$

16.8 16.8 206.9

$

1.7 1.0 9.9 640.6

-

$

26.9 26.9 432.2

Operating Income Sobeys’ operating income contribution to Empire in the second quarter was $181.6 million (3.03 percent of sales) compared to $99.8 million (2.26 percent of sales) in the second quarter last year, an increase of $81.8 million or 82.0 percent. Operating income was impacted primarily by Safeway operations combined with the factors affecting EBITDA, offset by depreciation and amortization expenses of $21.1 million and $6.3 million, respectively, when compared to the same period last year. Net Earnings Sobeys contributed net earnings, net of non-controlling interest, to Empire in the second quarter of $100.4 million compared to $56.3 million in the same period last year, an increase of $44.1 million or 78.3 percent. This increase is mainly the result of the inclusion of Safeway operations. After adjusting for items which are considered not indicative of underlying business operating performance, Sobeys contributed adjusted net earnings, net of non-controlling interest, of $111.7 million compared to $74.1 million in same period last year, an increase of $37.6 million or 50.7 percent.

115 King Street • Stellarton, NS • B0K 1S0

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The table below reconciles net earnings, net of non-controlling interest, to adjusted net earnings, net of non-controlling interest, for the 13 and 26 weeks ended November 1, 2014 compared to the 13 and 26 weeks ended November 2, 2013. ($ in millions) (1) Net earnings (contributed by Sobeys) (2) Adjustments : Loss on the disposal of manufacturing facilities Intangible amortization associated with the Canada Safeway acquisition Finance costs associated with the network rationalization Transaction costs associated with the Canada Safeway acquisition Plant closure Finance costs associated with the Canada Safeway acquisition Adjusted net earnings (1) (2)

(1)

13 Weeks Ended Nov. 1, 2014 Nov. 2, 2013 $ 100.4 $ 56.3

$

26 Weeks Ended Nov. 1, 2014 Nov. 2, 2013 $ 213.9 $ 135.5

5.0

-

5.0

-

4.7

-

10.7

-

1.1

-

2.3

-

0.5 -

12.4 -

1.2 0.7

19.5 -

11.3 111.7

5.4 17.8 74.1

19.9 233.8

5.4 24.9 160.4

$

$

$

Net of non-controlling interest. All adjustments are net of income taxes.

INVESTMENTS AND OTHER OPERATIONS The table below presents investments and other operations’ contribution to Empire’s consolidated sales, EBITDA, operating income, net earnings from continuing operations, net earnings from discontinued operations and net earnings. ($ in millions) (1) Sales (1) EBITDA Operating income (loss) (2) Crombie REIT (3) Real estate partnerships Other operations, net of corporate (1) expenses Net earnings from continuing operations Net earnings from discontinued operations Net earnings (1) (2) (3)

13 Weeks Ended Nov. 1, Nov. 2, 2014 2013 $ $ 0.8 22.8 6.7

($) Change $ (0.8) 16.1

26 Weeks Ended Nov. 1, Nov. 2, 2014 2013 $ 4.2 36.3 13.7

($) Change $ (4.2) 22.6

9.0 11.4

5.4 8.0

3.6 3.4

16.3 19.4

12.1 11.1

4.2 8.3

2.2 22.6 16.5

(6.8) 6.6 4.2

9.0 16.0 12.3

0.3 36.0 26.1

(9.7) 13.5 7.6

10.0 22.5 18.5

(108.7) (96.4)

26.1

91.1 98.7

(91.1) (72.6)

16.5

108.7 112.9

Results generated from Empire Theatres have been recorded in discontinued operations for fiscal 2014. 41.5 percent equity accounted interest in Crombie REIT (as at November 2, 2013 – 42.1 percent interest). Interests in Genstar.

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Operating Income Investments and other operations contributed operating income of $22.6 million in the 13 weeks ended November 1, 2014 versus $6.6 million in the same period last year, an increase of $16.0 million. The contributors to operating income in the second quarter of fiscal 2015 were as follows: •

Equity accounted earnings from the Company’s investment in Crombie REIT were $9.0 million in the 13 weeks ended November 1, 2014, an increase of $3.6 million from the $5.4 million recorded in the second quarter of fiscal 2014. The increase was driven primarily by gains on property sales.

•

Equity accounted earnings from the Company’s investments in real estate partnerships (Genstar) were $11.4 million in the 13 weeks ended November 1, 2014, an increase of $3.4 million compared to $8.0 million recorded in the same period last year, primarily as a result of stronger lot and housing sales.

•

Other operations, net of corporate expenses, contributed operating income (loss) of $2.2 million in the second quarter of fiscal 2015, an improvement of $9.0 million from the $(6.8) million recorded in the same quarter last year. The improvement in operating income can be attributed to organizational realignment and restructuring costs of $ nil in the current quarter compared to costs incurred of $8.4 million in the same period last year.

Net Earnings Investments and other operations contributed $16.5 million to Empire’s consolidated net earnings in the second quarter of fiscal 2015 compared to $112.9 million in the same period last year. The $96.4 million decline is attributed to a decrease in net earnings from discontinued operations of $108.7 million and is partially offset by an increase in net earnings from continuing operations of $12.3 million. The $108.7 million decrease in net earnings from discontinued operations can be attributed to a $105.3 million gain on the disposal of assets relating to the sale of Empire Theatres in fiscal 2014.

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CONSOLIDATED FINANCIAL CONDITION The acquisition of Canada Safeway effective November 3, 2013, resulted in a significant change to the capital structure of the Company as a result of capital stock issuance of $1,844.1 million and long-term debt issuance of $3,025.0 million. The financial condition measures are presented in the table below. ($ in millions, except per share and ratio calculations) Shareholders’ equity, net of non-controlling interest (1) Book value per common share Long-term debt, including current portion (1) Funded debt to total capital (1) Net funded debt to net total capital (1)(2)(3) Funded debt to EBITDA (1)(2)(4) EBITDA to interest expense Current assets to current liabilities Total assets (1) (2) (3) (4)

Nov. 1, 2014 $ $ $

5,872.1 63.60 3,123.6 34.7% 31.9% 3.1x 6.1x 1.2x 12,140.8

$

May 3, 2014 $ $ $

$

5,700.5 61.75 3,497.9 38.0% 35.0% 4.6x 5.8x 1.0x 12,238.0

Nov. 2, 2013 $ $ $

$

3,957.7 58.23 1,140.5 22.4% 8.1% 1.3x 13.5x 1.1x 10,279.7

See “Non-GAAP Financial Measures” section of this news release. Ratios for May 3, 2014 and November 2, 2013 exclude EBITDA and interest expense relating to discontinued operations. Calculation uses trailing four-quarter EBITDA. Calculation uses trailing four-quarter EBITDA and interest expense.

At the end of the second quarter, Empire’s consolidated ratio of funded debt to total capital was 34.7 percent (May 3, 2014 – 38.0 percent) with cash and cash equivalents of $376.5 million (May 3, 2014 – $429.3 million). Shareholders’ equity, net of non-controlling interest, increased $1,914.4 million or 48.4 percent over the second quarter last year to $5,872.1 million. Book value per common share increased to $63.60 at the end of the second quarter versus $58.23 at November 2, 2013. Free Cash Flow Free cash flow is used to measure the change in the Company’s cash available for additional investing, dividends and/or debt reduction. The following table reconciles free cash flow to GAAP cash flows from operating activities for the 13 and 26 weeks ended November 1, 2014 and the 13 and 26 weeks ended November 2, 2013. ($ in millions) Cash flows from operating activities Plus: proceeds on disposal of property, equipment and investment property Less: property, equipment and investment property purchases Free cash flow

13 Weeks Ended Nov. 1, 2014 Nov. 2, 2013 $ 181.1 $ 10.8 45.2

$

(86.3) 140.0 $

26 Weeks Ended Nov. 1, 2014 Nov. 2, 2013 $ 559.1 $ 178.8

271.1 (112.3) 169.6 $

165.0 (192.1) 532.0 $

279.5 (220.5) 237.8

Free cash flow generation in the second quarter of fiscal 2015 was $140.0 million compared to $169.6 million generated in the same quarter last year. This decrease in free cash flow was mainly the result of a decrease in proceeds on the disposal of property, equipment and investment property offset by an increase in cash flows from operating activities.

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SUBSEQUENT EVENT Subsequent to the close of the second quarter ended November 1, 2014, Sobeys sold and leased back eight properties from Crombie REIT. Total proceeds from the transaction were $101.0 million, the majority of which was used to repay bank borrowings. Assets of $96.9 million have been included in assets held for sale for these properties as at November 1, 2014. Subsequent to the close of the second quarter ended November 1, 2014, Sobeys entered into an agreement with Canada Bread Company, Limited to sell two bread manufacturing facilities. The sales are expected to occur during the Company’s fourth quarter of fiscal 2015. Total proceeds from the transaction will be approximately $32.0 million. FORWARD-LOOKING INFORMATION This news release contains forward-looking information that reflects management’s current expectations related to matters such as future financial performance and operating results of the Company. Expressions such as “anticipates”, “expects”, “believes”, “estimates”, “could”, “intends”, “may”, “plans”, “will”, “would” and other similar expressions or the negative of these terms are generally indicative of forward-looking statements. Forward-looking statements contained in this news release include anticipated benefits from the Canada Safeway acquisition, including the effectiveness of integration efforts and our ability to secure operational efficiencies and cost reductions across the organization, which may be impacted by the timing and integration efforts, and statements related to completion and use of proceeds from the sale of manufacturing facilities which are subject to closing conditions. By its very nature, forward-looking information requires the Company to make assumptions and is subject to inherent risks and uncertainties which give rise to the possibility that the Company’s expectations or objectives will not prove to be accurate. These forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from such statements. These uncertainties and risks are discussed in the Company’s materials filed with the Canadian securities regulatory authorities from time to time, including the Risk Management section of the annual Management’s Discussion and Analysis (“MD&A”). Readers are urged to consider these and other risks, uncertainties and assumptions carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such forward-looking information. The forward-looking information in this news release reflects the Company’s expectations as at December 12, 2014 and is subject to change after this date. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company other than as required by applicable securities laws.

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NON-GAAP FINANCIAL MEASURES There are measures included in this news release that do not have a standardized meaning under GAAP and therefore may not be comparable to similarly titled measures presented by other publicly traded companies. The Company includes these measures because it believes certain investors use these measures as a means of assessing financial performance. Empire’s definition of the non-GAAP terms are as follows: •

Same-store sales are sales from stores in the same location in both reporting periods.

•

Gross profit is calculated as sales less cost of sales.

•

Gross margin is gross profit divided by sales.

•

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is calculated as net earnings from continuing operations before finance costs (net of finance income), income taxes, and depreciation and amortization of intangibles.

•

EBITDA margin is EBITDA divided by sales.

•

Adjusted EBITDA is EBITDA excluding items which are considered not indicative of underlying business operating performance.

•

Operating income, or earnings before interest and taxes (“EBIT”), is calculated as net earnings from continuing operations before finance costs (net of finance income) and income taxes.

•

Operating income margin is operating income divided by sales.

•

Interest expense is calculated as interest expense on financial liabilities measured at amortized cost plus losses on cash flow hedges reclassified from other comprehensive income.

•

Adjusted net earnings from continuing operations is net earnings from continuing operations, net of non-controlling interest, excluding items which are considered not indicative of underlying business operating performance. These adjustments include items which are non-recurring or one-time in nature and items that result in a truer economic representation of the underlying business on a comparative basis.

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Funded debt is all interest bearing debt, which includes bank loans, bankers’ acceptances and long-term debt.

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Net funded debt is calculated as funded debt less cash and cash equivalents.

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Total capital is calculated as funded debt plus shareholders’ equity, net of noncontrolling interest.

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Net total capital is total capital less cash and cash equivalents.

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Funded debt to total capital ratio is funded debt divided by total capital.

115 King Street • Stellarton, NS • B0K 1S0

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Net funded debt to net total capital ratio is net funded debt divided by net total capital.

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Funded debt to EBITDA ratio is funded debt divided by trailing four-quarter EBITDA.

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EBITDA to interest expense ratio is trailing four-quarter EBITDA divided by trailing four-quarter interest expense.

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Book value per common share is shareholders’ equity, net of non-controlling interest, divided by total common shares outstanding.

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Free cash flow is calculated as cash flows from operating activities, plus proceeds on disposal of property, equipment and investment property, less property, equipment and investment property purchases.

For a more complete description of Empire’s non-GAAP terms, please see Empire’s MD&A for the second quarter ended November 1, 2014. CONFERENCE CALL INFORMATION The Company will hold an analyst call on Friday, December 12, 2014 beginning at 2:30 p.m. (Eastern Standard Time) during which senior management will discuss the Company’s financial results for the second quarter ended November 1, 2014. To join this conference call, dial (888) 231-8191 outside the Toronto area or (647) 427-7450 from within the Toronto area. To secure a line, please call 10 minutes prior to the conference call; you will be placed on hold until the conference call begins. The media and investing public may access this conference call via a listen mode only. You may also listen to a live audiocast of the conference call by visiting the Company’s website located at www.empireco.ca. Replay will be available by dialing (855) 859-2056 and entering passcode 39397182 until midnight December 19, 2014, or on the Company’s website for 90 days following the conference call. UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS To view and download the Company’s unaudited interim condensed consolidated financial statements for the second quarter of fiscal 2015 ended November 1, 2014, please access the following link: Q2 Fiscal 2015 Unaudited Interim Condensed Consolidated Financial Statements This information is also available for download at www.sedar.com or by accessing the Investor Centre section of the Company’s website at www.empireco.ca.

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ABOUT EMPIRE Empire Company Limited (TSX: EMP.A) is a Canadian company headquartered in Stellarton, Nova Scotia. Empire’s key businesses include food retailing and related real estate. With over $24 billion in annualized sales and $12.1 billion in assets, Empire and its subsidiaries, franchisees and affiliates employ more than 125,000 people. Additional financial information relating to Empire, including the Company’s Annual Information Form, can be found on the Company’s website at www.empireco.ca or at www.sedar.com. For further information, please contact: Media Contact Andrew Walker Senior Vice President Communications & Corporate Affairs Sobeys Inc. (905) 214-6711

Investor Contact Stewart Mahoney, CFA Senior Vice President Treasury & Investor Relations Empire Company Limited (902) 752-8371 ext. 3499

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