Canadian Tire Corporation (CTC) 2012年年度報告「TSX」.pdf

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1、ANNUAL REPORT 2012CANADIAN TIRE CORPORATION A FAMILY OF COMPANIES?INVESTMENT STRENGTHS?FINANCIAL HIGHLIGHTS?BUSINESS AT A GLANCE?MESSAGE FROM THE CHAIRMAN?MESSAGE FROM THE CEO?BUSINESS STRATEGY?CANADIAN TIRE RETAIL?FGL SPORTS?MARKS?FINANCIAL SERVICES?OUR COMMITMENT TO OUR COMMUNITY?CANADIAN TIRE JUM

2、PSTART CHARITIES?FINANCIAL ASPIRATIONS?OUR LEADERSHIP TEAM?MESSAGE FROM THE CFO?FINANCIAL PERFORMANCEtable of CONTENTSCANADIAN TIRE CORPORATION IS A FAMILY OF COMPANIES THAT PUTS THE CUSTOMER AT THE CENTRE OF EVERYTHING WE DO.WE HAVE ONE OF THE COUNTRYS STRONGEST BRANDS,SUPPORTED BY MORE THAN 1,700

3、LOCATIONS ACROSS CANADA,A BROAD OFFERING OF RETAIL PRODUCTS,HOME SERVICES AND FINANCIAL SERVICES,AN IMPRESSIVE WEB PRESENCE AND A NEW,LEADING-EDGE TECHNOLOGY STRATEGY.WE ARE COMMITTED TO DELIVERING ON OUR STRATEGIC INITIATIVES AND CREATING VALUE FOR SHAREHOLDERS OVER THE LONG TERM.YOUR INVESTMENT IN

4、 CANADIAN TIRE IS SUPPORTED BY THESE KEY STRENGTHS:9.3%DILUTED EPS(10-YEAR CAGR*)12.1%DIVIDENDS DECLARED(10-YEAR CAGR)3.6%TOTAL SHAREHOLDER RETURN(10-YEAR CAGR)investment strengthsCANADIAN TIRE CORPORATION ANNUAL REPORT 01 STRONG COMPETITIVE ADVANTAGE?Family of Companies includes some of the most re

5、cognized and respected retail brands in Canada?Canadas leading retailer in dozens of key sports,Automotive,Living and Fixing categories?Extremely successful Financial Services business supports Retail companies?Diverse product mix,strong in-house brands and exclusive products EXTENSIVE REACH AND SCA

6、LE?Stores located within 15 minutes of 90%of Canadians?One of the countrys largest commercial real estate portfolios?Strong web presence,including some of the countrys most-visited sites?Flyers and catalogues reach over 11 million households each week?MasterCard INNOVATION?State-of-the-art store con

7、cepts for all banners?Increased use of technology across all businesses,including award-winning mobile app,in-store displays,digital catalogue and online marketing?Extensive use of exclusive,private-label brands,including 60 innovative apparel and footwear products?Innovative loyalty program,generat

8、ing customer insights?Sustainable practices integrated across the business STRONG FINANCIAL POSITION?Multiple sources of liquidity?History of consistent dividend increases?Focus on delivering sustainable earnings growth*CAGR refers to the Compound Annual Growth Rate.DOUGLAS COUPLANDS INFINITE TIRES

9、art installation at the Marine Drive Shopping Complex in Vancouver,British ColumbiaCONSOLIDATEDRevenueEBITDAIncome before income taxesNet incomeCapital expenditures Cash generated from operating activities$11,427.21,138.5677.2499.2 334.8743.0$10,387.1 1,058.2 629.9467.0364.7 1,405.5 10.0%7.6%7.5%6.9

10、%(8.2)%(47.1)%RETAIL SEGMENTRetail salesRevenueEBITDAIncome before income taxes$12,852.510,381.2798.7400.3$11,668.39,363.5 768.9410.810.1%10.9%3.9%(2.6)%FINANCIAL SERVICES SEGMENTRevenueIncome before income taxes$981.9276.9$960.4219.1 2.2%26.4%PER SHAREBasic earningsDiluted earningsDividends declare

11、d$6.136.101.25$5.735.711.1256.9%6.9%11.1%KEY FINANCIAL MEASURESCanadian Tire Retail sales(POS)growthRetail return on invested capital(ROIC)Financial services return on receivables(ROR)0.8%6.67%6.76%2.0%7.68%5.45%FOR MORE INFORMATION,INCLUDING DETAILED FINANCIAL DOCUMENTS,PLEASE VISIT CORP.CANADIANTI

12、RE.CA?CANADIAN TIRE CORPORATION MAINTAINED ITS STRONG FINANCIAL POSITION IN 2012 WHILE POSTING EXCELLENT REVENUE AND EARNINGS PERFORMANCE ACROSS THE COMPANY.($C IN MILLIONS,EXCEPT PER SHARE AMOUNTS)CANADIAN TIRE CORPORATION ANNUAL REPORT 0320122011%CHANGEWE ARE PART OF COMMUNITIES FROM COAST-TO-COAS

13、T,AND NO ONE KNOWS CANADA OR UNDERSTANDS THE NEEDS OF CANADIANS LIKE WE DO.OUR PRODUCTS AND SERVICES REFLECT OUR DIVERSE CUSTOMERS,THEIR LOVE OF SPORTS AND THE OUTDOORS AND THEIR PASSION FOR THEIR HOMES AND AUTOMOBILES.business at a glanceCORP.CANADIANTIRE.CATHE CANADIAN TIRE FAMILY OF COMPANIES CAR

14、RIES BEST-IN-CLASS,PRIVATE-LABEL AND PREMIER NATIONAL BRANDS.CANADIAN TIRE CORPORATION ANNUAL REPORT 05CANADIAN TIRE RETAILOne of Canadas most trusted brands,Canadian Tire is focused on the everyday jobs and joys of our customers.With 490 retail locations and a robust online community,we sell more p

15、roducts,in more places,than any other Canadian retailer.We are Canadas store.CANADIAN TIRES RETAIL CATEGORIES INCLUDE:LIVING Home organization,cleaning,pet care and kitchen Patio,barbeques and gardening FIXING Tools,hardware and paint PLAYING Fitness and sporting goods Outdoor recreation DRIVING Aut

16、o parts Tires Auto Service PartSource Gas+Roadside Assistance FINANCIAL SERVICES Financial Services provides customers with?We complement the retail businesses across the Family of Companies with a host of products and services such as equal payment plan options,in-store instant credit,Canadian Tire

17、 Home Services and home and auto insurance.The Canadian Tire MasterCard portfolio has more than four million card members.MARKS Marks is the largest retailer of mens apparel and footwear in Canada.We also have a growing womens apparel and footwear business.With 386 stores operating under Marks,Marks

18、 Work Wearhouse and LEquipeur,as well as M,we provide Canadians from coast-to-coast with a wide selection of products known for comfort,durability,value and innovation.FGL SPORTS FGL Sports is the number one sports retailer in Canada,selling a vast assortment of sports-related products,from athletic

19、 footwear to leisure apparel.We are the conduit between Canadians and the best sports brands in the world.We believe in the importance of living healthy,active lives and we share the countrys passion for the outdoors.With more than 495 stores across Canada,FGL Sports provides the products and servic

20、es that help sport enthusiasts of all skill levels succeed.FGL SPORTS RETAIL BANNERS INCLUDE:Sport Chek Sports Experts Atmosphere National Sports IntersportCANADIAN TIRE HAS A PROUD HERITAGE.AND IN 2012,OUR 90TH BIRTHDAY,WE PUBLISHED THE HISTORY OF OUR FIRST 90 YEARS,LIVING THE CANADIAN DREAM-HOW CA

21、NADIAN TIRE BECAME CANADAS STORE.The book is all about leadership,entrepreneur-ship and innovation,the hallmarks that distinguish Canadian Tire.It chronicles the fascinating path Canadian Tire has travelled to become the Canadian icon it is.And it is about the many,many thousands of employees who ha

22、ve made the journey with us.Much can be learned from a company whose values have been preserved for over 90 years and whose evolution has been unique.I am not sure anyone today would set out to design a company like Canadian Tire Corporation.Our company?!?#?&?and in spite of its unique evolutionary

23、journey.But,proud as we are of our heritage,all of us at?And we have bold ambitions.message FROM THE CHAIRMANMAUREEN J.SABIACORP.CANADIANTIRE.CAOn January 23,2013,Canadian Tire announced the largest-ever corporate commitment to amateur sport in Canadian history.Canadian Tire,Sport Chek and Sports Ex

24、perts have become premier sponsors of Canadas Olympic Team?!?#?a staggering array of partnerships with Canadas leading sports federations and with Canadian Olympians and leading athletes.?partnerships in sport are being enthusiastically embraced by our family of companies and are proving to be a hug

25、e source of pride and excite-ment for our Dealers,franchisees and employees across the country.We believe in the power of sport.That is why we have been committed to our Jumpstart initiative that gives disadvantaged children the opportunity to get in the game and?gives them.But our ambition does not

26、 stop with our Olympic sponsorship.We are committed to the next 90 years in which innovation,execution and customer centric strategies will form the basis of our continued success.We will be Canadas sports store,serving customers at every level of athletic ambition.In January,2013 we opened the most

27、 digitally-savvy sports store in fact,the most digital retail environment of any kind in North America.?#?!?#?/?Toronto uses 140 interactive screens to deliver 54 channels of custom content and has numerous destinations throughout the store with products for customers that can be customized to their

28、 individual preferences.I think it is interesting that,in the 1950s,Yonge?!?#?as the Billes brothers reinvented the retail experi-ence at Canadian Tire.More than 60 years later we are still innovating as a company.The digital lessons being learned in Sport Cheks retail lab?our businesses.We will cre

29、ate a new standard for an exciting retail experience,both physically and digitally.In March 2013 we will introduce our e-catalogue and we are well advanced on our e-commerce strategy.At the Tire,we refer to all of this as smart commerce.We will introduce new Canadians to life in Canada and provide t

30、hem with the products and the know-how they require to enjoy their new lives in Canada.And young Canadians will enthusiasti-cally embrace our stores as their parents and grandparents have done.?&?Canadian Tire Bank,will continue to meet the?with new services and new products.Our talented executive t

31、eam led by Stephen Wetmore,supported by our hard-working Board of Directors is proactively pursuing both organic and net new growth opportunities that will provide even greater value to our shareholders.And we will pursue bold new initiatives designed to make Canadian Tire even more attractive to ou

32、r long term investors.!?#?of our shareholders and the ever changing needs of our customers.We are on an exciting journey of unremitting ambition.On a more sober note,Alan Rossy will not stand for re election to the Board at our AGM.All of us enjoyed working with Alan and we want to extend to him our

33、 appreciation of the value he brought to us.With the approval of our shareholders,we will welcome Pierre Boivin,President and CEO of Claridge Inc.and the immediate past CEO of the Montreal Canadiens,to our Board.Sincerely,Maureen J.Sabia,Chairman of the BoardOur history in Playing comes from our her

34、itage brand Canadian Tire Retail.Over several years,we have relentlessly been making the changes necessary to exceed our customers expectations throughout Canadian Tire in partnership with our Associate Dealer network and are together creating a powerful destination for customers:“Canadas Store.”Dur

35、ing 2012,we launched more than 85 Smart Stores.The new Living merchandising and marketing strategy was incorporated into 73 stores and we opened 50 new outdoor recreational Pro Shops which exceeded even our expectations.Evolving from bricks and mortar to digital and online,investments in next-in-cla

36、ss technology have positioned us to be a leader in smart commerce and the next generation of the retail experience.Canadian Tire is launching a game changing new digital experience for customers in 2013 that combines the best of a magazine and catalogue with embedded social media feeds and increased

37、 product information.Meanwhile,in early 2013,FGL Sports and Sport Chek opened a game-changing retail lab store,delivering next-in-class retail and digital innovations for an unparalleled shopping experience.All of these investments require changing the way we think changing our assumptions of how to

38、 win in retail and I couldnt be more pleased with our progress.Our heritage in Playing and sport resulted in our acquisition of FGL Sports in 2011 and throughout 2012 this premier sports division continued to deliver everything we had envisioned.Between the Your Better Starts Here brand campaign,dig

39、ital innovations and new stores,they have been inject-ing a new excitement into the family.FGL Sports has exceeded our financial targets which has allowed us to pursue an aggressive growth strategy for its super brand,Sport Chek.In 2012,our new management team started to reinvigorate our Marks appar

40、el brand.While delivering strong financial results and introducing M and new marketing campaigns,I believe they have also begun the next decade of growth for Marks which captures its unique positioning in the Canadian marketplace.2013 will be an important year as our management team seeks to recaptu

41、re the growth trajectory that Marks saw in the mid 2000s.Our Financial Services division has grown from a triangle company into a division serving the entire Family of Companies launching a new Sport Chek branded credit card and deferred payment services in 2012.They are also working closely with ou

42、r retail businesses to develop new platforms for growth,including the Canadian Tire Drivers Academy,the expansion of Home Services and the continued promotion of in-store financing.Our commitment to the power of sport extends throughout our Company and is embodied in our support of Jumpstart,which r

43、eached a milestone in 2012 by helping its 500,000th child in Canada to get in the game.Now through our sponsorships in Canadas major sport categories,our Family of Companies has taken its rightful place in support-ing healthy and active living for Canadians.This past year marked our 90th anniversary

44、 of providing Canadians with the products and services they need for life in Canada.We have grown with our country through the years.While we believe you should be very proud of the Companys heritage and legacy,we must continue to adapt if we are to move forward with strength.Mobile technology is ra

45、dically changing the way we do business and every process that supports it.Knowledge gained from our successful loyalty trial coupled with our digital strategy will keep our brand relevant as we head towards our 100th anniversary.We are focused on creating long term sustainable shareholder value and

46、 we thank you for your continued support.Sincerely,Stephen G.Wetmore,President and CEOmessage from the CeoStePheN G.Wetmorecanadian tire cOrPOratiOn ANNuAL REPORT 072012 WaS a buSy,exCitiNG aNd SuCCeSSful year for CaNadiaN tire CorPoratioN aNd itS loyal CuStomerS.aCroSS our family of ComPaNieS,fiNaN

47、Cial PerformaNCe WaS StroNG.We aChieved a 10%iNCreaSe iN reveNueS,CloSely maNaGed exPeNditureS aNd iNCreaSed our divideNd for the third CoNSeCutive year.At the heart of our brand is an understanding of everyday life in Canada.While most of our competitors must stay true to their American roots,we ar

48、e proudly Canadian and have taken a bold move to become the largest supporter of amateur sports in the country,anchored by our top tier partnership with Canadas Olympic Team for the next eight years.CTC_EN_2012_AReport_V35_Mar18.indd 93/19/13 10:53 AM?THE CANADIAN TIRE FAMILY OF COMPANIES REMAINS FO

49、CUSED ON GROWTH THROUGH FOUR STRATEGIC PILLARS.THE FOUNDATION OF OUR FIVE-YEAR FINANCIAL ASPIRATIONS,THESE STRATEGIC OBJECTIVES WILL CONTINUE TO DRIVE OUR BUSINESS FORWARD IN THE YEARS AND DECADES TO COME.Our core retail business,Canadian Tire Retail,operates in the Living,Fixing,Playing and Driving

50、 categories.We are executing initiatives that will grow the business,reinforce our brand and deliver exceptional customer experiences across our network.CONTINUE ROLLING OUT NEW CONCEPT,CAPITAL-LIGHT CANADIAN TIRE RETAIL STORES Completed more than 85 Smart Store and Small Market projects in 2012 App

51、roximately 70 store projects planned for 2013 Expanding“store-within-a-store”concept:converting 400 stores to new Living format in 2013 and doubling the number of outdoor recreation Pro Shops Short,medium and long term vision for the store network RETAIN AND GROW MARKET-LEADING POSITIONS Focus on le

52、adership in high-growth categories Tailor store assortments to meet local customer needs Reinforce our authority in AutomotiveSKILLFULLY EXECUTE OUR KEY OPERATIONAL PRIORITIES Build a digital platform that draws on the national reach and scale of our existing network of stores Continue to gain insig

53、ht and learnings from loyalty pilot program Utilitze our investment in the Automotive Infrastructure program to strengthen our market position1/STRENGTHEN CORE RETAILCORP.CANADIANTIRE.CA?of programs that improve productivity.We continue to:Q?X?Z?Maintain a strong corporate culture that recognizes th

54、at our leadership team and employees are one of our companys greatest assets Support the recently opened Marine Drive Shopping Complex in Vancouver,which brings together all three banners Canadian Tire,Marks and Sport Chek in one location Implement new merchandise procurement initiatives Focus on bu

55、siness sustainability as an innovation strategy that complements and supports our strategic growth objectives.Recognized as a leader in business sustainability through numerous awards in 2012,including:?GLOBE Award for Best Green Retailing Practices?Named one of the 50 Best Corporate Citizens in Can

56、ada by Corporate Knights?categories.We will continue to invest in our heritage businesses and develop new services and programs to support our leadership position.Our Family of Companies contributes to the overarching goals we have set.Strengthen our position as Canadas ultimate authority in sports

57、Partner with strategic vendors and organizations such as the Canadian Olympic Team and NASCAR Expand innovative automobile products and service offerings Retain and grow market share in core brands and apparel categories“Install what we sell”through Home Services Q?=?Seek out meaningful acquisitions

58、 and new selling platform?Announced intent to purchase Pro Hockey Life Sporting Goods Inc.Launch new digital technology,mobile and e-commerce functionality Continue to develop gas bars in new service centres along Highway 400 and Highway 401 in Ontario Launched new Canadian Tire Drivers Academy pilo

59、t program Installed rooftop solar energy systems at eight Canadian Tire stores in southern Ontario to supply renewable energy directly to the electrical grid4/CREATE NEW GROWTH PLATFORMSCANADIAN TIRE CORPORATION ANNUAL REPORT 09?CANADIAN TIRE UNDERSTANDS THE JOBS AND JOYS OF LIFE IN CANADA AND WE OF

60、FER A RANGE OF PRODUCTS AND SERVICES THAT ARE UNMATCHED IN THE COUNTRY.WE ARE CANADAS STORE.From the very beginning,when the entrepreneurial Billes brothers set out to deliver quality products at the best price,they focused on their customers needs.As Canadian consumers and life in Canada have evolv

61、ed over the years,so have we.Over the last nine decades,our catalyst for change has remained consistent.Every expansion,every new store opening,every new product or service introduced to our store shelves and our service bays has been inspired by our customers.?aggressive“cash back”promotions with t

62、he?!?#Canadas?_&?program with the Nova Scotia-based pilot of?!?#?|?program that ranks among the best in the country for customer value and gives us greater insight into our customers.Our heritage business,Automotive,continued to deliver the latest and most innovative products to our customers.For th

63、e past several years,Canadian Tires automotive executives have successfully hosted “Combustion Chamber”events an automotive product search program that invites our vendors to showcase their newest,most innovative product offerings.In 2012 the automotive team took the search?&?event at SEMA(Specialty

64、 Equipment Market Association),the worlds premier automo-tive specialty products trade event.Our team met with top vendors from around the globe to ensure our stores are stocked with leading products that will appeal to all our?owners to driving enthusiasts.In our Fixing category,we expanded the pai

65、nt selection to include top quality brands such as OriginsTM by Benjamin Moore.To accompany the launch of this exclusive product we invested in new colour matching and blending technology,as well as employee training by design experts in order to deliver an industry-leading customer experience.In 20

66、12,we launched our Pro Shop hunting and?:?category.In key markets,this store experience is designed to meet niche market demands by delivering an expanded selection of products,including top brands at excellent value.These stores are staffed with trained product specialists to ensure an enhanced cus

67、tomer experience.?program in Winnipeg last year,we also launched a national store redesign that delivers the best product assortment and customer experience in the market.We are committed to maintaining our position as a leading retailer of small appliances in Canada by creating an intuitive,solutio

68、n-based experience with an expanded product selection.This Living strategy will ensure that in 2013 we continue to deliver the premium brands and excellent value our customers have come to expect from us.One unique factor that sets Canadian Tire apart in the Canadian retail market is our Associate D

69、ealer model.Operating as individual entrepreneurs,Associate Dealers know their communities and their customers.We think and operate nationally,but the strength of our Associate Dealers enables us to execute locally.Looking forward,we will continue to innovate and expand our product selection,roll ou

70、t new?across Canada.If the acquisition receives regu-latory approval and is concluded,Pro Hockey Life will operate as a banner under FGL Sports,joining super brands such as Sport Chek and Sports Experts.The acquisition would strengthen our position as a leading sports retailer and continue to help u

71、pcoming recreational and professional athletes succeed.We know Canadians want an authentic sports retail brand and as we move into 2013 we will?ourselves to be relevant,unique and exciting.In January 2013,we announced strategic partnerships between Sport Chek and Sports Experts and Canadas Olympic a

72、nd Paralympic Teams and major national sports federations.Our continued support of commu-nity and amateur athletics will help us eliminate barriers to participating in sport,enable our budding stars to make the most of their talent,and make the Canadian Tire family the number one supporter of athlet

73、ics in Canada.In-store and online,FGL Sports continues to push boundaries,seeking new and innovative ways to engage with consumers.IN-STORE AND ONLINE,FGL SPORTS CONTINUES TO PUSH BOUNDARIES,SEEKING NEW AND INNOVATIVE WAYS TO ENGAGE WITH CONSUMERS.FGL SPORTS OFFERS THE LARGEST SELECTION OF SKI AND S

74、NOWBOARD EQUIPMENT IN NORTH AMERICA.K2TM Superf ree ERP 10.0CANADIAN TIRE CORPORATION ANNUAL REPORT 13While industrial apparel and footwear are our heritage businesses,mens and womens casual apparel and footwear remain a strategic priority for us and now comprise much of our sales.In 2012,we remaine

75、d focused on developing and bringing to market an innovative product assortment.We introduced anti-slip footwear tailored for the hospitality industry and expanded our assortment of products containing T-Max temperature regulating insulation to include outer-wear,sweaters,lined denim,socks and boots

76、.We also continued our Marks Work Wearhouse rebranding efforts,opening or rebranding 81 stores under the Marks banner.The rebranding involved new exterior and interior signs,improved in-store merchandising,upgraded lighting and larger,?supported by a new national advertising campaign and a public re

77、lations program.Consumer response to the rebranding continues to be positive,and the style,comfort,quality and value of our products has been strong,attracting many new customers.In September,we improved and relaunched our website,M.The site now offers a much broader product assortment,a sleeker use

78、r experience and more interactive features.Visits,transactions and sales have increased dramatically since the relaunch and in the coming year we will continue to look for ways to improve and enhance the customer experience.Our ImagewearTM business-to-business division is Canadas largest supplier of

79、 branded industrial apparel,footwear and promotional items.Developing tailored apparel and footwear for a client base of medium and large-sized businesses,Imagewear posted another year of strong sales?increased sales to existing clients as well as through new clients.The coming year will be another

80、exciting one for Marks.Not only will we continue rebranding stores across the country but we will increase consumer perception of Marks as a retailer of both industrial and casual apparel and footwear.In addition,we will enhance our purchasing and supply chain capabilities to improve merchandise sty

81、le and consistency,expand margins and improve inventory management.We will continue to pursue our goal of providing customers with smart clothes for everyday life and work,and we will unwaveringly pursue improvements in all aspects of our business.?MARKS PROVIDES CANADIANS WITH SMART CLOTHES FOR EVE

82、RYDAY LIVING.OUR CLOTHING AND FOOTWEAR ARE DURABLE,HIGH-QUALITY AND COMFORTABLE WITH INNOVATIVE FEATURES AND BENEFITS.MARKS HAS THE#1 MARKET SHARE IN WORKWEAR.Dakota Anti-Slip Lace UpCORP.CANADIANTIRE.CACanadian Tire is one of the few retailers in Canada that has its own Financial Services division.

83、This presents unique?retail divisions,while providing a channel of growth for Financial Services itself.Whether the product is a new lending platform,such as the new Sport Chek MasterCard,or instant credit,growth in our credit card and lending business will be driven by staying relevant to our custo

84、mers.X?X?#?2012 performance included:lower write-offs,continued expense control,improved yield management and new payment terms.This?&?X?greater integration within Canadian Tire Retails marketing activities.Our strong Financial Services portfolio comple-ments our retail companies.After launching in-

85、store?_&?through marketing efforts in 2012.These options now support the sale of large-ticket items and are positioned as a key driver of sales and receivables growth for Financial Services.They also serve as the basis for further expansion of our Canadian Tire Home Services offerings.The Canadian T

86、ire Drivers Academy hit the road this year with pilot programs in Toronto and St.Catharines,Ontario.Created in partnership among Financial Services,Canadian Tire Retail and local Dealers,the Canadian Tire Drivers Academy was developed to establish relation-ships among young and new Canadians as well

87、 as expand our customer demographic.During the two-week program,students move between the classroom,the drivers seat and the Canadian Tire service bay,where they learn about car mainte-nance.This holistic approach to driver education is unique to the Canadian Tire Drivers Academy and differentiates

88、our program from others in the marketplace.Behind the scenes,Financial Services continues to invest in technological and analytics advance-ments that will enable us to sustain our industry-leading results in fraud prevention,collections and credit risk.The year ahead for Financial Services is bright

89、,and the team is focused on two key priorities.?-ing business.This will be accomplished through greater collaboration with the Canadian Tire Family of Companies,with support from our world-class call centre operations,which were once again recognized as the best in North America by SQM,a leading cal

90、l centre industry research group.A second priority for 2013 is maximizing customer engagement on both our online and mobile platforms.We plan to develop an integrated mobile solution that presents key?&?services and loyalty rewards.This unique offering will?X?FINANCIAL SERVICES PROVIDES A STRONG POR

91、TFOLIO OF PRODUCTS AND SERVICES TO COMPLEMENT OUR RETAIL BUSINESSES.WHETHER SUPPORTING THE LAUNCH OF NEW BUSINESSES AND SERVICES OR DRIVING CHANGES,FINANCIAL SERVICES UNIQUE CAPABILITIES HAVE PROVEN TO BE VALUABLE ASSETS FOR THE CORPORATION.THERE ARE MORE THAN FOUR MILLION CANADIAN TIRE MASTERCARDS

92、IN CIRCULATION.CANADIAN TIRE CORPORATION ANNUAL REPORT 15?WE SUPPORT CANADIANS LOVE OF THE OUTDOORS AND THEIR HOMES We are Canadas company for everyday living,whether outdoors or inside the home.From the products and services we sell to the community activities we support,we are passionate about bri

93、nging families together and promoting more sustainable communities.WE ARE LOCAL EMPLOYERS AND COMMUNITY LEADERS?values and rewards employees for outstanding work.Along with our local Dealers,franchisees,agents and store managers,we support local decision-making and do what is right for our customers

94、 where they live.WE ENCOURAGE ACTIVE AND HEALTHY LIVING We play an important role in supporting active and healthy families.Whether its through a?&?&?a wide range of activities,indoors and out.Canadian Tire Jumpstart Charities is dedicated to enriching the lives of kids in need through sports and ph

95、ysical activity.WE ARE PROUD OF OUR PRODUCTS AND SERVICES Our products and services are designed for life in Canada,and we stand behind them.FOR 90 YEARS,OUR STORES HAVE BEEN AN INTEGRAL PART OF THE COMMUNITIES IN WHICH WE OPERATE.THE CANADIAN TIRE FAMILY OF COMPANIES CONTINUES ITS LEGACY OF COMMUNI

96、TY SUPPORT THROUGH NATIONAL AND LOCAL PROGRAMS INITIATED AND EXECUTED BY OUR DEALERS,FRANCHISEES,STORE OPERATORS,EMPLOYEES AND THE CORPORATION.AMATEUR SPORTS We believe in the power of sport to unite families,neighbourhoods and the nation.Whether someone aspires to be a champion at the playground or

97、 on the podium,we believe we have a role to play in helping Canadians succeed.Today,we support hundreds of local community sports teams and national sports federations,including the Canadian Olympic and Paralympic Teams,the Greater Toronto Hockey League,St.Marys University Womens Hockey Program,the

98、Canadian Soccer Association,Skate Canada,Hockey Canada,the Canadian Junior Golf Association,Alpine Canada Alpin and the Canadian Games Council.INJURY PREVENTION PROGRAMS In 2012,Canadian Tire worked with government and community partners across the country to educate families about safety.Our initia

99、tives included winter driving events,?&?awareness seminars.COMMUNITY LEADERSHIP Through our national network of stores and more than 85,000 employees,we have continued Canadian Tires history of local leadership.Our Family of Companies is involved in community initiatives including military base supp

100、ort at home and overseas,and days of service supporting local charitable organizations.CORP.CANADIANTIRE.CAour commitment to our community?IN CANADA,ONE IN THREE FAMILIES CANNOT AFFORD TO ENROL THEIR CHILDREN IN ORGANIZED SPORTS AND RECREATION.THE GOAL OF JUMPSTART CHARITIES IS TO GIVE CHILDREN ACRO

101、SS THE COUNTRY AN OPPORTUNITY TO PARTICIPATE IN A VARIETY OF ACTIVITIES THAT HELP DEVELOP HEALTHY LIFESTYLES,LEADERSHIP AND INTERPERSONAL SKILLS.During 2012,Jumpstart distributed$12 million back into Canadian communities to help kids who otherwise could not have participated in sports and recreation

102、.It was a great year for Jumpstart,and a number of initiatives,driven from across the Family of Companies,garnered support and recognition while raising more money than ever.Jumpstart Pedal for Kids brought together cycling enthusiasts from Canadian Tire Retail,FGL Sports,Marks,Financial Services an

103、d Jumpstart to bike the 500 kilometres from Kingston to Niagara Falls,Ontario.The pack of riders was joined by Martha Billes,chairman of Canadian?&?&?In Welland,Ontario,children will be able to play baseball at the brand new Canadian Tire JumpstartBilles Family Field.And the community of Port aux Ba

104、sques,Newfoundland,had the thrill of a lifetime this past summer.After winning an internal fundraising contest for the Jumpstart Red Ball campaign,the local Canadian Tire Dealer hosted a community celebration and street party featuring“guest-of-honour,”Stanley Cup champion and Olympic gold medalist

105、Jonathan Toews.Since Jumpstarts inception in 2005,more than?assistance to help them participate in sports and recreation.This historic milestone was reached thanks to the combined efforts of the Canadian Tire Family of Companies,Canadian Tire Dealers and their store staff,and Petroleum Agents.A supp

106、ortive Canadian government,community partners,corporate partners,vendors,customers and donors were also crucial.While reaching this milestone was exciting,we know that we can do much,much more.Jumpstart has set new and ambitious goals.Our new president,Johnny Misley,will lead our charity?=?_?&?hope

107、to double annual revenues to$28.3 million and to help three times as many kids each year.Our vision is about more than getting children involved in sports and recreation;it is about making Canada a place where all kids have?playground to podium.THIS YEAR,JUMPSTART DISTRIBUTED$12 MILLION BACK INTO CA

108、NADIAN COMMUNITIES.JUMPSTART HAS HELPED MORE THAN 540,000 KIDS SINCE 2005.ONE IN THREE CANADIAN FAMILIES CANNOT AFFORD TO ENROL THEIR CHILDREN IN ORGANIZED SPORTS OR RECREATIONAL ACTIVITIES.CANADIAN TIRE CORPORATION ANNUAL REPORT 17IN APRIL 2010,WE OUTLINED A FIVE-YEAR PLAN AND STRATEGIC OBJECTIVES

109、THAT ARE THE FOUNDATION OF OUR FINANCIAL ASPIRATIONS.?!?!FINANCIAL SERVICESRETURN ON RECEIVABLES#!?$!TOTAL RETURN TO SHAREHOLDERS(including dividends)10%+RETAIL ROIC&!?#!CONSOLIDATED EPS ANNUAL GROWTH!?!CANADIAN TIRE RETAIL SALES ANNUAL GROWTH?aspirations*Pl ease see secti on 5.2 of the 2012 Managem

110、ent s Di scussi on and Anal ysi s for further i nformati on on Canadi an Ti re Corporati on s?CORP.CANADIANTIRE.CAMAUREEN J.SABI ATORONTO,ON,CANADANON-EXECUTIVE CHAIRMAN OF THE BOARD I AI N C.AI TCHI SON?HOWELL,NJ,USAMARTHA G.BI LLES?CALGARY,AB,CANADA OWEN G.BI LLES?ST.CATHARINES,ON,CANADA?TORONTO,O

111、N,CANADAJOHN A.F.FURLONG?VANCOUVER,BC,CANADAJAMES L.GOODFELLOW?OAKVILLE,ON,CANADAJONATHAN LAMPE?TORONTO,ON,CANADA?!?OTTAWA,ON,CANADAFRANK POTTER?TORONTO,ON,CANADATI MOTHY R.PRI CE?TORONTO,ON,CANADAALAN P.ROSSY?MONTREAL,QC,CANADAPETER B.SAUNDERS?NAPLES,FL,USAGRAHAM W.SAVAGE?TORONTO,ON,CANADAGEORGE A.

112、VALLANCE?LANGLEY,BC,CANADASTEPHEN G.WETMORETORONTO,ON,CANADAPRESIDENT AND CHIEF EXECUTIVE OFFICER1 AUDIT COMMITTEE/CHAIRMAN,GRAHAM W.SAVAGE2 GOVERNANCE COMMITTEE/CHAIRMAN,JONATHAN LAMPE3 MANAGEMENT RESOURCES AND COMPENSATION COMMITTEE/CHAIRMAN,FRANK POTTER4 SOCIAL RESPONSIBILITY COMMITTEE/CHAIRMAN,T

113、IMOTHY R.PRICEEXECUTIVE LEADERSHIP TEAM STEPHEN G.WETMORE Q?:?&?&?MARCO MARRONE Q?&?:?&?&?DEAN MCCANN Q?:?&?X?X?&?&?MI CHAEL B.MEDLI NE President,FGL Sports and Marks and Executive Vice-President,Canadian Tire Corporation,LimitedMARY L.TURNER Q?&?X?HARRY P.TAYLOR Q?&?#?ROBYN A.COLLVER Senior Vice-Pr

114、esident,Secretary and General Counsel,Canadian Tire Corporation,LimitedDOUGLAS B.NATHANSON Q?&?&?EUGENE ROMAN Q?:?&?&?JOHN D.SALT Senior Vice-President,Supply Chain,Canadian Tire Corporation,LimitedKENNETH SI LVER Senior Vice-President,Corporate Strategy and Real Estate,Canadian Tire Corporation,Lim

115、itedGREGORY CRAI G Senior Vice-President,Finance,Canadian Tire Corporation,Limited DUNCAN FULTON Senior Vice-President,Communications and Corporate Affairs,Canadian Tire Corporation,LimitedDAVI D R.HI CKS Senior Vice-President,Dealer Relations and Store Operations,Canadian Tire Retail ALLAN MACDONAL

116、D Senior Vice-President,Automotive and Marketing,Canadian Tire RetailREGI NALD J.MCLAY Senior Vice-President,Merchandise Sourcing,Canadian Tire Retail DAVI D MOCK Senior Vice-President,Merchandising,Canadian Tire Retail?ON BEHALF OF THE BOARD OF DIRECTORS I WANT TO TELL OUR SHAREHOLDERS HOW WELL THE

117、Y ARE SERVED BY THE TALENTED MANAGEMENT TEAM UNDER THE EXCEPTIONAL LEADERSHIP OF STEPHEN WETMORE.THE RELATIONSHIP BETWEEN YOUR HARDWORKING DIRECTORS AND YOUR MANAGEMENT IS AS EFFECTIVE AND PRODUCTIVE AS IT HAS EVER BEEN.WE CHALLENGE EACH OTHER CONTINUALLY AND OUT OF THESE CHALLENGES EMERGES AN ALIGN

118、MENT ON STRATEGIC AND OPERATIONAL ISSUES THAT CREATES LONG TERM VALUE.MAUREEN J.SABIA,CHAIRMAN OF THE BOARDCANADIAN TIRE CORPORATION ANNUAL REPORT 19board ofDIRECTORSIT HAS BEEN A TREMENDOUS YEAR OF ACCOMPLISHMENT FOR CANADIAN TIRE.AS A SHAREHOLDER,YOU SHOULD FEEL CONFIDENT THAT THE GROWTH STRATEGY

119、PUT IN PLACE UNDER STEPHEN WETMORES DIRECTION THE STRATEGY BEING CARRIED OUT BY THE MORE THAN 85,000 EMPLOYEES ACROSS CANADA IS LEADING US ON A PATH OF CONTINUED GROWTH AND SUCCESS.One major accomplishment in 2012 was the integration of FGL Sports into the Canadian Tire Family of Companies.Without a

120、 doubt,much of the success can be attributed to the folks who have worked tirelessly to ensure sales targets are met and synergies are delivered.However,the success and in large part the initial acquisition itself is also due to the strength of Canadian?#?as they are sustainable.Our retail businesse

121、s?and we have ample access to bank lines as sources of liquidity.Our Financial Services segment is generating cash above the needs of the business,with multiple sources of funding for its receivables portfolios.Further augmenting?position in real estate,including some of the most desirable retail lo

122、cations in Canada.Overall,this supports our strong balance sheet,investment-grade debt ratings and excellent access to liquidity.X?&?aspirations.Progressing towards these aspirations?X?to Canadian Tires executive leadership team.The prime levers for meeting our earnings-driven aspirations are effect

123、ive cost controls and?&?&?we are scrutinizing how we spend a clear acknowledgment that we must spend more wisely given the increasing competitive pressures in the marketplace.?spending smarter.A prime example of this is the sports partnership announcement that we made early in 2013,which includes a

124、reallocation of our marketing spend to promote several of our retail banners as Premier National Partners of the Canadian Olympic Team.The partnership represents a reallocation of spending that we believe will help build our sports strategy and strengthen an area of our business that were passionate

125、 about and view as a long-term competitive differentiator.The partnership will become a cornerstone of our marketing efforts not only externally,but internally among our employees as we all celebrate the Olympic spirit.Our primary goal with respect to capital allocation?90 daysTotal190 days 90 daysT

126、otalTrade and other receivables$13.5$14.5$28.0$27.0$14.1$41.1Loans receivable176.652.7129.394.069.2163.2Total$90.1$67.2$157.3$121.0$83.3$204.31No past due loans for Franchise Trust and FGL Sports.A loan is considered past due when the counterparty has not made a payment by the contractual due date.C

127、redit card and line of credit loan balances arewritten off when a payment is 180 days in arrears.Line of credit loans are considered impaired when a payment is over 90 days in arrears and are written offwhen a payment is 180 days in arrears.Personal loans are considered impaired when a payment is ov

128、er 90 days in arrears and are written off when apayment is 365 days in arrears.No collateral is held against loans receivable.6.3.4 Securities and derivativesThe Company has a Securities and Derivatives Policy in place for management of the various risks(including counterparty risk)related to invest

129、ment activity and useof financial derivatives.The overall credit risk compliance mechanisms established in this policy include,but are not limited to,credit rating requirements,approvalauthorities,counterparty limits,notional limits,maximum term to maturity limits,industry sector limits and portfoli

130、o diversification requirements.The Companys credit exposure of its investment portfolio is spread across financial institutions,provincial and federal governments and,to a lesser extent,corporate issuers,with limitations as to the amount,term to maturity and industry concentration levels.The Company

131、 limits its exposure to credit risk byinvesting only in highly liquid and rated certificates of deposit,commercial paper or other approved securities and only with counterparties that are dual ratedand have a credit rating in the“A”category or better.The Company limits its credit exposure to financi

132、al derivatives by transacting only with highly rated counterparties and managing within specific limits forcredit exposure,notional amounts and term to maturity.CORP.CANADIANTIRE.CANOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS6.3.5 Credit enhancement and guarantees providedThe Company may be requir

133、ed to provide credit enhancement for individual Dealers borrowings in the form of standby letters of credit or guarantees ofthird-party bank debt agreements in respect of the financing programs available to the Dealers.See Note 39.6.4 Liquidity riskLiquidity risk is the risk that the Company will en

134、counter difficulty in meeting the obligations associated with its financial liabilities that are settled by deliveringcash or another financial asset.The Companys approach to managing liquidity is to ensure,as far as possible,that it will always have sufficient liquidity tomeet its liabilities when

135、due,under both normal and stressed conditions,without incurring unacceptable losses or risking damage to the Companysreputation.The Company has in place a leverage and liquidity policy to manage its exposure to liquidity risk.Management has identified key financial credit metric ratios and calculate

136、s these ratios in a manner to approximate the methodology of debt rating agenciesand other market participants.Management regularly monitors these metrics against industry-accepted targets to maintain investment-grade ratings fromtwo credit rating agencies.In addition to the leverage and liquidity p

137、olicy,the Company has in place an Asset Liability Management Board policy specific to the Bank.It is the Banksobjective to ensure the availability of adequate funds by maintaining a strong liquidity management framework and to satisfy all applicable regulatory andstatutory requirements.The Asset Lia

138、bility Management Board Policy dictates liquidity and funding limits and requires the establishment of an annual Liquidityand Funding Plan that includes risk measurement methodologies,scenario analysis and stress testing and also provides roles,responsibilities and key actionsin managing a liquidity

139、 crisis.Stress tests are conducted on a regular basis for a variety of bank-specific and market-wide stress scenarios(individually and incombination)to identify sources of potential strain and to ensure that current exposures remain in accordance with the Banks established liquidity risktolerance.St

140、ress test scenarios include disruption to the securitization funding market,immediate terminations within broker deposits,unexpected andpersistent withdrawals of retail deposits,funding pressure for the Company,which affects the amount of intercompany borrowing available to the Bank,andbalance sheet

141、 growth greater than forecast.The Asset Liability Management Board Policy dictates the following liquidity limits for the Bank:a minimum liquid assets/demand deposits ratio of 30 per cent;and a minimum liquid assets/total deposits ratio of 15 per cent.The Company uses a detailed consolidated cash fl

142、ow forecast model to regularly monitor its near-term and longer-term cash flow requirements,whichassists in optimizing its short-term cash and bank indebtedness position and evaluating longer-term funding strategies.As of December 29,2012,theCompany had$1.5 billion in committed bank lines of credit,

143、$1.2 billion of which is available under a four-year syndicated credit agreement dated June 29,2012.The syndicated credit facility is available to the Company until June 29,2016,and can be extended for an additional 364-day period in June2013.The remaining lines of credit have been established pursu

144、ant to bilateral credit agreements that are available to the Company until late 2013.TheCompany has the ability to request an extension of each of the bilateral credit agreements each quarter for an additional 90-day period.The Company has access to a number of alternative financing sources in order

145、 to ensure that the appropriate level of liquidity is available to meet itsstrategic objectives including:committed bank lines totalling$1.5 billion,a commercial paper program and medium-term notes program for the issuance of$750 million available to April 2013,and sale and leaseback transactions.As

146、sets of the Bank are funded through securitization of credit card receivablesthrough GCCT,broker guaranteed investment certificate(GIC)deposits,retail GIC deposits and high-interest savings(HIS)account deposits.Due to the diversification of its funding sources,the Company is not exposed to any conce

147、ntration risk regarding liquidity.The following table summarizes the Companys contractual maturity for its financial liabilities,including both principal and interest payments:(C$in millions)20132014201520162017ThereafterTotalNon-derivative financial liabilitiesBank indebtedness$86.0$86.0Deposits11,

148、318.5420.2235.3143.0313.32,430.3Trade and other payables1,498.71,498.7Short-term borrowings118.9118.9Loans payable623.7623.7Long-term debt2637.6252.5564.6200.0634.9550.02,839.6Finance lease obligations24.917.215.511.98.888.3166.6Interest payment3187.7135.698.075.353.7536.21,086.5Total non-derivative

149、 financial liabilities$4,496.0$825.5$913.4$430.2$1,010.7$1,174.5$8,850.3Total derivative financial liabilities13.10.213.3Total$4,509.1$825.7$913.4$430.2$1,010.7$1,174.5$8,863.61Deposits exclude the GIC broker fee discount of$7.5 million.2The contract maturity of long-term debt excludes debt issue co

150、sts of$7.7 million and the benefit on the effective portion of the cash flow hedges of$0.6 million.3Includes interest payments on deposits,short-term borrowings,loans payable,long-term debt and finance lease obligations.CANADIAN TIRE CORPORATION ANNUAL REPORT 91NOTES TO THE CONSOLIDATED FINANCIAL ST

151、ATEMENTSIt is not expected that the cash flows included in the maturity analysis could occur significantly earlier or at significantly different amounts except for deposits.The cash flows from deposits are not expected to vary significantly provided the expected cash flows from customers maintain a

152、stable or increasingbalance.6.5 Market riskMarket risk is the risk that changes in market prices,such as foreign exchange rates,interest rates and equity prices,will affect the Companys income orthe value of its holdings of financial instruments.The objective of market risk management is to manage m

153、arket risk exposures within acceptable parameterswhile optimizing the return.The Company has in place foreign exchange,interest rate and equity risk management policies to manage its exposure tomarket risk.These policies establish guidelines on how the Company is to manage the market risk inherent t

154、o the business and provide mechanisms toensure business transactions are executed in accordance with established limits,processes and procedures.All such transactions are carried out within the guidelines established in the respective financial risk management policies as approved by the Board ofDir

155、ectors.Generally,the Company seeks to apply hedge accounting in order to manage volatility in its net income.6.5.1 Foreign currency riskThe Company has significant demand for foreign currencies,primarily United States dollars,due to global sourcing.The Companys exposure to foreignexchange rate risk

156、is managed through a comprehensive Foreign Exchange Risk Management Policy that sets forth specific guidelines and parameters,including monthly hedge percentage guidelines,for entering into foreign exchange hedge transactions for anticipated U.S.-dollar-denominated purchases.The Company enters into

157、foreign exchange contracts,primarily in U.S.dollars,to hedge future purchases of foreign-currency-denominated goods andservices.The Companys exposure to a sustained movement in the currency markets is affected by competitive forces and future prevailing marketconditions.6.5.2 Interest rate riskThe C

158、ompany has a policy in place whereby a minimum of 75 per cent of its long-term debt(term greater than one year)and lease obligations must be atfixed versus floating interest rates.The Company is in compliance with this policy.The Company may enter into interest rate swap contracts to manage itscurre

159、nt and anticipated exposure to interest rate price risk.The Company has no interest rate swap contracts outstanding at December 29,2012,otherthan interest rate swap contracts with a notional amount of$28.9 million(2011$45.7 million)in connection with the Dealer loans held by Franchise Trust(Note 24)

160、.A one per cent change in interest rates would not materially affect the Companys net income or equity as the Company has minimal floating interest rateexposure as the indebtedness of the Company is predominantly at fixed rates.The Companys exposure to interest rate changes is predominantly driven b

161、ythe Financial Services business to the extent that the interest rates on future GIC deposits,HIS account deposits,tax free savings account(TFSA)depositsand securitization transactions are market-dependent.Partially offsetting this will be rates charged on credit cards and future liquidity pool inve

162、stment ratesavailable to the Bank.7.Operating segmentsThe Company has two reportable operating segments,Retail and Financial Services.The reportable operating segments are strategic business units offeringdifferent products and services.They are separately managed due to their distinct nature.The fo

163、llowing summary describes the operations in each of theCompanys reportable segments:Retail comprises the Living,Playing&Fixing,Automotive,Apparel and Sporting Goods categories.The retail business is conducted through a number ofbanners,including Canadian Tire Retail(CTR),Canadian Tire Gas(“Petroleum

164、”),Marks,PartSource,and various FGL Sports banners.Retail also includesthe Dealer Loan Program(the portion(silo)of Franchise Trust that issues loans to Dealers),a financing program established to provide an efficient andcost-effective way for Dealers to access the majority of the financing required

165、for their store operations.Financial Services markets a range of Canadian-Tire-branded credit cards,including the Canadian Tire Options MasterCard,the Cash AdvantageMasterCard,the Gas Advantage MasterCard and the Sport Chek MasterCard.Financial Services also markets insurance and warranty products.T

166、heBank,a wholly owned subsidiary of Canadian Tire Financial Services Limited,is a federally regulated bank that manages and finances the Companysconsumer MasterCard,Visa and retail credit card portfolios,as well as an existing block of Canadian-Tire-branded personal loan and line of creditportfolios

167、.The Bank also offers and markets HIS account deposits,TFSA deposits and GIC deposits,both directly and through third-party brokers.Financial Services includes GCCT,a financing program established to purchase co-ownership interests in the Companys credit card loans.GCCT issuesdebt to third-party inv

168、estors to fund its purchases.Performance is measured based on segment income before income taxes,as included in the internal management reports reviewed by the CompanysChief Executive Officer.Management has determined that this measure is the most relevant in evaluating segment results.CORP.CANADIAN

169、TIRE.CANOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSInformation regarding the results of each reportable operating segment is as follows:20122011(C$in millions)RetailFinancialServicesEliminationsandadjustmentsTotalRetailFinancialServices1Eliminationsandadjustments1TotalExternal revenue$10,380.9$967

170、.0$79.3$11,427.2$9,362.8$948.3$76.0$10,387.1Intercompany revenue0.314.9(15.2)0.712.1(12.8)Total revenue10,381.2981.964.111,427.29,363.5960.463.210,387.1Cost of producing revenue7,545.9445.3(61.9)7,929.36,916.8478.4(68.8)7,326.4Gross margin2,835.3536.6126.03,497.92,446.7482.0132.03,060.7Other income(

171、expense)3.02.75.718.8(0.4)18.4Operating expenses2,364.8263.671.82,700.21,982.0264.770.32,317.0Operating income473.5275.754.2803.4483.5216.961.7762.1Net finance(income)costs73.2(1.2)54.2126.272.7(2.2)61.7132.2Income before income taxes$400.3$276.9$677.2$410.8$219.1$629.9Items included in the above:De

172、preciation and amortization$325.2$9.9$335.1$285.4$10.7$296.1Interest income35.3691.5(1.5)725.345.7678.7(4.2)720.2Interest expense83.4134.9(1.5)216.890.1139.4(4.2)225.31Financial Services operating segment results for the year ended December 31,2011,have been reclassified to correspond to the current

173、-year presentation.Certain revenues and costs that were previouslypresented in finance income and finance costs that are directly related to funding Financial Services loans receivable have been presented in revenue and cost of producing revenue.This reclassification presentsFinancial Services resul

174、ts as it manages and views its business and how the results are being presented to the Companys CEO.These revenues and costs are considered financing activities for external reportingand are therefore reported in net finance costs in the consolidated statements of income.As a result of the reclassif

175、ication of Financial Services results for the year ended December 31,2011,external revenueincreased by$7.1 million,cost of producing revenue increased by$68.8 million,gross margin decreased by$61.7 million,operating income decreased by$61.7 million and net finance costs decreased by$61.7million.Ther

176、e is no impact to income before income taxes.The reclassifications in Financial Services operating segment results are reversed in elimination and adjustments,resulting in no impact to theconsolidated statements of income.The eliminations and adjustments include the following items:reclassifications

177、 of certain revenues and costs in the Financial Services segment to finance income and finance costs;reclassifications of revenues and operating expenses to reflect loyalty program accounting in accordance with IFRS Interpretations Committee(IFRIC)13for the Companys Canadian Tire Money programs;and

178、inter-segment eliminations.Capital expenditures by reportable operating segment are as follows:20122011(C$in millions)RetailFinancialServicesEliminationsandadjustmentsTotalRetailFinancialServicesEliminationsandadjustmentsTotalCapital expenditures1$329.4$5.4$334.8$357.9$6.8$364.71Capital expenditures

179、 are presented on an accrual basis and include intangible software additions(Note 36).Total assets by reportable operating segment are as follows:(C$in millions)20122011Retail1$7,950.3$7,772.5Financial Services5,429.94,684.0Eliminations1(198.8)(117.7)Total$13,181.4$12,338.81Retail operating segment

180、assets and eliminations no longer include investment in Financial Services subsidiaries.Prior-period figures have been restated to correspond to the current-year presentation.There is noimpact on total assets on the consolidated balance sheets as a result of this change in presentation.CANADIAN TIRE

181、 CORPORATION ANNUAL REPORT 93NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS8.Business combinations8.1 Acquisition of FGL SportsThe Company acquired control of FGL Sports on August 18,2011,through its approximately 97 per cent ownership of the issued and outstanding Class“A”shares(“the Common shares”

182、)of FGL Sports that were acquired on and prior to August 18,2011.The Company acquired the remaining Commonshares of FGL Sports on August 25,2011.FGL Sports is a Canadian retailer of sporting goods offering a comprehensive assortment of brand-name and private-label products operating stores fromcoast

183、 to coast under the following corporate and franchise banners:Sport Chek,Sports Experts,Intersport,Atmosphere,the TechShop,Nevada BobsGolf,Hockey Experts,Sport Mart,National Sports,Athletes World,S3 and Fitness Source.The acquisition of FGL Sports increased the Companys operation in the Sporting Goo

184、ds category of its retail operating segment.A significant portion ofFGL Sports sales are in athletic apparel and footwear,with the balance of sales in sporting hard goods that complement the Companys existing assortmentof sporting goods.The acquisition of retail banners like Sport Chek and Sports Ex

185、perts is thus a natural extension of the Companys sporting goodsbusiness.For the year ended December 31,2011,FGL Sports contributed revenue of$645.6 million and net income of$29.4 million to the Companys results.FGL Sports recorded$32.6 million of capital expenditures during the 19 weeks from the da

186、te of acquisition to December 31,2011.8.1.1 Consideration transferredThe acquisition date fair value of consideration transferred is as follows:(C$in millions)Cash$765.2Fair value of previously held interests35.4Total consideration transferred$800.68.1.2 Fair value of identifiable assets acquired an

187、d liabilities assumed as at acquisition dateThe fair value of identifiable assets acquired and liabilities assumed as at the acquisition date are as follows:(C$in millions)Cash and cash equivalents$25.3Trade and other receivables1111.1Loans receivable0.8Merchandise inventories455.9Income taxes recov

188、erable3.4Prepaid expenses and deposits11.1Long-term receivables and other assets4.9Intangible assets382.3Property and equipment155.1Trade and other payables(288.9)Short-term borrowings(241.9)Provisions(31.0)Deferred income taxes(58.2)Other long-term liabilities(37.7)Total net identifiable assets$492

189、.21Gross trade and other receivables acquired is$112.4 million,of which$1.3 million was expected to be uncollectible as at the acquisition date.8.1.3 Goodwill arising on acquisition of FGL SportsGoodwill was recognized as a result of the acquisition as follows:(C$in millions)Total consideration tran

190、sferred$800.6Less:Total net identifiable assets492.2Goodwill$308.4CORP.CANADIANTIRE.CANOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSThe goodwill recognized on acquisition of FGL Sports is attributable mainly to the expected future growth potential from the expanded customer base ofFGL Sports banners

191、 and brands and the network of stores which are predominantly mall-based and provide access to the 1835-year-old customersegment.None of the goodwill recognized is expected to be deductible for income tax purposes.For the year ended December 31,2011,the Company incurred acquisition-related costs of$

192、12.1 million relating to external legal fees,consulting fees anddue diligence costs.These costs are included in administrative expenses in the consolidated statements of income.For the year ended December 31,2011,a pre-tax gain of$10.4 million was recognized relating to the Companys previously held

193、interest in FGL Sportsprior to the acquisition date.The gain is recognized in other income in the consolidated statements of income and is included as part of the fair value ofpreviously held interests included in the total consideration transferred,noted in the table above.The impact of the acquisi

194、tion on the consolidated statements of cash flows for the year ended December 31,2011,is as follows:(C$in millions)Total consideration transferred$765.2Cash and cash equivalents acquired(25.3)Acquisition of FGL Sports$739.98.2 Other acquisitionsDuring the year ended December 29,2012,the Company acqu

195、ired three franchise operations for total consideration of$6.9 million,of which$2.6 millionwas in the form of a promissory note payable.The fair value of identifiable assets acquired and liabilities assumed includes$0.1 million in trade and otherreceivables,$2.5 million in inventory,$4.2 million in

196、intangible assets,$0.4 million in property and equipment and$0.3 million in liabilities.The purpose ofthese acquisitions is to convert franchise businesses into corporate stores.The Company acquired control of Golden Viking Sports on July 1,2012,through its 100 per cent ownership of the issued and o

197、utstanding shares for totalconsideration of$2.4 million,net of cash and cash equivalents acquired.The fair value of identifiable assets acquired and liabilities assumed includes$1.4 million in trade and other receivables,$3.8 million in inventory,$0.6 million in prepaid expenses and deposits,$4.2 mi

198、llion in liabilities and$0.1 million indeferred income taxes liability.In addition,$0.9 million in goodwill was recognized as a result of this acquisition.The purpose of this acquisition is to growthe Companys wholesale business,especially in the U.S.During the year ended December 31,2011,the Compan

199、y acquired three franchise operations for total consideration of$7.7 million,of which$3.3 millionwas in the form of promissory notes payable.The fair value of identifiable assets acquired includes$3.6 million in intangible assets and$0.3 million inproperty and equipment.In addition,$0.5 million in g

200、oodwill was recognized as a result of these acquisitions.The purpose of these acquisitions is to convertfranchise businesses into corporate stores.9.Cash and cash equivalentsCash and cash equivalents comprise of the following:(C$in millions)20122011Cash$40.5$79.6Cash equivalents533.6233.4Restricted

201、cash and cash equivalents1441.412.8Total cash and cash equivalents1,015.5325.8Bank indebtedness(86.0)(124.8)Cash and cash equivalents,net of bank indebtedness$929.5$201.01Relates to GCCT and is restricted for the purposes of paying out note holders and additional funding costs.10.Short-term investme

202、nts(C$in millions)20122011Unrestricted short-term investments$167.3$195.4Restricted short-term investments11.61.0$168.9$196.41Relates to GCCT and is restricted for the purposes of paying out note holders and additional funding costs.CANADIAN TIRE CORPORATION ANNUAL REPORT 95NOTES TO THE CONSOLIDATED

203、 FINANCIAL STATEMENTS11.Trade and other receivables(C$in millions)20122011Trade and other receivables$743.6$800.9Derivatives6.515.8Total financial assets(Note 37)750.1816.7Other0.512.6$750.6$829.3Trade and other receivables are primarily receivables from Dealers,vendors,franchisees and agents.Receiv

204、ables from Dealers are in the normal course of business,including cost-sharing and financing arrangements.The average credit period on sales ofgoods is between one and 90 days.Interest(ranging from 0.0 per cent to prime plus 5.0 per cent)is charged on amounts past due.Receivables from vendors are on

205、 account of rebate and commercial discounts receivable from vendors.The Companys exposures to credit risks and impairment losses related to trade and other receivables are disclosed in Note 6.3.12.Loans receivableQuantitative information about the Companys loans receivable portfolio is as follows:To

206、tal principal amount of receivables1Average balance1(C$in millions)2012201120122011Credit card loans$4,234.3$4,026.8$3,979.5$3,900.5Line of credit loans7.58.88.210.0Personal loans20.53.31.66.4Total Financial Services loans receivable4,242.34,038.9$3,989.3$3,916.9Dealer loans3623.7628.7Other loans7.7

207、8.8Total loans receivable4,873.74,676.4Less:long-term portion4608.0594.7Current portion of loans receivable$4,265.7$4,081.71Amounts shown are net of allowance for loan impairment.2Personal loans are unsecured loans that are provided to qualified existing credit card holders for terms of one to five

208、years.Personal loans have fixed monthly payments of principal and interest;however,thepersonal loans can be repaid at any time without penalty.3Dealer loans issued by Franchise Trust(Note 24).4The long-term portion of loans receivable is included in long-term receivables and other assets and include

209、s Dealer loans of$601.5 million(2011$587.5 million).The gross impairment loss on loans receivable for the year ended December 29,2012,was$323.7 million(2011$352.0 million).Recoveries of bad debtsfor the year ended December 29,2012,were$58.1 million(2011$50.0 million).For the year ended December 29,2

210、012,the amount of cash received from interest earned on credit cards and loans was$669.6 million(2011$655.3million).Transfers of financial assetsGlacier Credit Card TrustGCCT is a special purpose entity that was created to securitize credit card loans receivable.As at December 29,2012,the Bank has t

211、ransferred$1,479.0 million(2011$1,454.7 million)in credit card loans receivable to GCCT but has retained substantially all of the credit risk associated with thetransferred assets.Due to retention of substantially all of the risks and rewards on these assets,the Bank continues to recognize these ass

212、ets within loansreceivable,and the transfers are accounted for as secured financing transactions.The associated liability as at December 29,2012,of$1,901.3 million(2011$1,451.7 million),secured by these assets,includes the commercial paper and term notes on the consolidated balance sheets and is car

213、ried atamortized cost.The Bank is exposed to the majority of ownership risks and rewards of the GCCT and,hence,it is consolidated.The carrying amount of theassets approximates their fair value.The difference between the credit card loans receivable transferred and the associated liabilities is shown

214、 below.20122011(C$in millions)Carrying amountFair valueCarrying amountFair valueCredit card loans receivable transferred$1,479.0$1,479.0$1,454.7$1,454.7Associated liabilities1,901.31,933.91,451.71,500.7Net position$(422.3)$(454.9)$3.0$(46.0)CORP.CANADIANTIRE.CANOTES TO THE CONSOLIDATED FINANCIAL STA

215、TEMENTSFor legal purposes,the co-ownership interests in the Banks receivables that are owned by GCCT have been sold at law to GCCT and are not available tothe creditors of the Bank.The Bank has not identified any factors arising from current market circumstances that could lead to a need for the Ban

216、k to extend liquidity and/or creditsupport to GCCT over and above the existing arrangements or that could otherwise change the substance of the Banks relationship with GCCT.Therehave been no changes in the capital structure of GCCT since the Banks assessment for consolidation.Franchise TrustThe cons

217、olidated financial statements include a portion(silo)of Franchise Trust,a legal entity sponsored by a third-party bank that originates and servicesloans to Dealers for their purchases of inventory and fixed assets(“the Dealer loans”).The Company has arranged for several major Canadian banks to provi

218、de standby letters of credit(“the LCs”)to Franchise Trust as credit support for theDealer loans.During 2004,Franchise Trust sold all of its rights in the LCs and the then outstanding Dealer loans to other independent trusts set up by majorCanadian banks(“the Co-owner Trusts”)that raise funds in the

219、capital markets to finance their purchase of these undivided co-ownership interests.Due tothe retention of substantially all of the risks and rewards relating to these Dealer loans,the transfers are accounted for as secured financing transactionsand,accordingly,the Company continues to recognize the

220、 current portion of these assets in loans receivable($22.2 million at December 29,2012,and$41.2 million at December 31,2011)and the long-term portion in long-term receivables and other assets($601.5 million at December 29,2012,and$587.5million at December 31,2011)and records the associated liability

221、 secured by these assets as loans payable($623.7 million at December 29,2012,and$628.7 million at December 31,2011),being the loans that Franchise Trust has incurred to fund the Dealer loans.The Dealer loans and loans payable areinitially recorded at fair value and subsequently carried at amortized

222、cost.20122011(C$in millions)Carrying amountFair valueCarrying amountFair valueDealer loans$623.7$623.8$628.7$629.5Associated liabilities623.7623.7628.7628.7Net position$0.1$0.8The Dealer loans have been sold at law and are not available to the creditors of the Company.Loans payable are not legal lia

223、bilities of the Company.In the event that a Dealer defaults on a loan,the Company has the right to purchase such loan from the Co-owner Trusts,at which time the Co-ownerTrusts will assign such Dealers debt instrument and related security documentation to the Company.The assignment of this documentat

224、ion provides theCompany with first-priority security rights over all of such Dealers assets,subject to certain prior ranking statutory claims.In most cases,the Companywould expect to recover any payments made to purchase a defaulted loan,including any associated expenses.In the event the Company doe

225、s not chooseto purchase a defaulted Dealer loan,the Co-owner Trusts may draw against the LCs.The Co-owner Trusts may also draw against the LCs to cover any shortfalls in certain related fees owing to them.In any case where a draw is made againstthe LCs,the Company has agreed to reimburse the bank is

226、suing the LCs for the amount so drawn.In the event that all the LCs had been fully drawnsimultaneously,the maximum payment by the Company under this reimbursement obligation would have been$164.0 million at December 29,2012(2011$137.2 million).The Company has not recorded any liability for these amo

227、unts,due to the credit quality of the Dealer loans and to the nature of theunderlying collateral,represented by the inventory and fixed assets of the borrowing Dealers.13.Assets classified as held for saleLand and buildings are transferred to assets classified as held for sale from property and equi

228、pment and investment property when they meet the criteria tobe assets classified as held for sale.Land and buildings previously included in assets classified as held for sale are transferred to property and equipment orinvestment property,as appropriate,when it is determined that they no longer meet

229、 the criteria to be assets classified as held for sale.Land and buildings classified as assets held for sale generally relate to former stores in the Retail segment that have relocated to newer sites.The Companyis actively marketing these properties to third parties,and they will be sold when terms

230、and conditions acceptable to the Company are reached.During the year ended December 29,2012,the Company recorded impairment of$1.8 million(2011$nil)as it was determined that the FVLCS was lessthan the carrying amount.During the year ended December 29,2012,the Company recorded reversal of impairment

231、of$1.0 million(2011$nil)as a resultof the FVLCS exceeding the carrying amount.The impairment and reversal of impairment are recorded in the Companys Retail operating segment.Theimpairment and reversal of impairment are reported in other income in the consolidated statements of income.During the year

232、 ended December 29,2012,the Company sold assets held for sale and recorded a gain of$11.1 million(2011$7.4 million),which isreported in other income in the consolidated statements of income.CANADIAN TIRE CORPORATION ANNUAL REPORT 97NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS14.Long-term receivabl

233、es and other assets(C$in millions)20122011Loans receivable(Note 12)$608.0$594.7Mortgages receivable61.163.9Derivatives4.44.4Other receivables1.91.6Total financial assets(Note 37)675.4664.6Other5.84.3$681.2$668.9Mortgages receivableThe Company has a long-term mortgage receivable with an interest rate

234、 of 12 per cent and repayment of principal until 2016.15.Goodwill and intangible assetsThe following table presents the changes in cost and accumulated amortization and impairment of the Companys intangible assets:2012Indefinite-life intangible assetsand goodwillFinite-life intangible assets(C$in mi

235、llions)GoodwillOtherintangiblesSoftwareOtherintangiblesTotalCostBalance,beginning of year$377.6$380.9$847.0$22.4$1,627.9Additions internally developed64.764.7Additions linked to business combinations0.94.25.1Other additions0.21.41.6Disposals/retirements(3.0)(0.2)(3.2)Other movements and transfers(0.

236、3)0.3Balance,end of year$378.5$385.0$910.1$22.5$1,696.1Accumulated depreciation and impairmentBalance,beginning of year$(516.4)$(1.5)$(517.9)Amortization for year(83.9)(2.3)(86.2)Impairment losses(1.6)(0.9)(2.5)Disposals/retirements2.42.4Other(2.0)(2.0)Balance,end of year$(1.6)$(598.8)$(5.8)$(606.2)

237、Net carrying amount,end of year$376.9$385.0$311.3$16.7$1,089.92011Indefinite-life intangible assetsand goodwillFinite-life intangible assets(C$in millions)GoodwillOtherintangiblesSoftwareOtherintangiblesTotalCostBalance,beginning of year$68.7$60.4$688.1$817.2Additions internally developed0.4125.0125

238、.4Additions related to business combinations308.9320.143.422.4694.8Disposals/retirements(9.5)(9.5)Balance,end of year$377.6$380.9$847.0$22.4$1,627.9Accumulated depreciation and impairmentBalance,beginning of year$(455.8)$(455.8)Amortization for year(64.8)(1.5)(66.3)Disposals/retirements4.24.2Balance

239、,end of year$(516.4)$(1.5)$(517.9)Net carrying amount,end of year$377.6$380.9$330.6$20.9$1,110.0CORP.CANADIANTIRE.CANOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSThe following table presents the details of the Companys goodwill:(C$in millions)20122011FGL Sports$309.3$308.4Marks52.252.2CTR15.417.0Tot

240、al$376.9$377.6The following table presents the details of the Companys indefinite-life other intangible assets:(C$in millions)20122011FGL Sports corporate banners$184.4$184.4FGL Sports franchise banners77.977.9FGL Sports private-label brands7.27.2FGL Sports franchise agreements46.746.9Marks store ba

241、nner46.046.0Marks franchise locations16.212.1Marks private-label brands4.04.0Marks franchise agreements2.02.0Other trademarks0.60.4Total$385.0$380.9The following table presents the details of the Companys finite-life other intangible assets:(C$in millions)20122011FGL Sports customer relationships$7.

242、6$9.6FGL Sports private-label brands0.50.6FGL Sports off-market leases8.610.7Total$16.7$20.9FGL Sports corporate and franchise banners represent legal trademarks of the Company and have expiry dates ranging from 2018 to 2023.Marks storebanners(“Marks Work Wearhouse/Lquipeur”)represent legal trademar

243、ks of the Company and expire in 2021.FGL Sports and Marks private-labelbrands have legal expiry dates.The Company currently has no approved plans to change its store banners,other than those announced,and intends tocontinue to renew all trademarks and private-label brands at each expiry date indefin

244、itely.The Company expects these assets to generate cash flows inperpetuity.Therefore,these intangible assets are considered to have indefinite useful lives.FGL Sports franchise agreements,Marks franchise locations,and Marks franchise agreements have expiry dates with options to renew or have indefin

245、ite lives.The Companys intention is to renew these agreements ateach renewal date indefinitely,and the Company expects the franchise agreements and franchise locations will generate cash flows in perpetuity.Therefore,these assets are considered to have indefinite useful lives.Other finite-life intan

246、gible assets include FGL Sports customer relationships,certain private-label brands and off-market leases that the Company hasassessed as having limited life terms.These assets are being amortized over a term of five years.The amount of borrowing costs capitalized in 2012 was$1.7 million(2011$1.7 mi

247、llion).The capitalization rate used to determine the amount of borrowingcosts capitalized during the year was 5.7 per cent(2011 5.7 per cent).The amount of research and development expenditures recognized as an expense in 2012 was$6.7 million(2011$4.4 million).Amortization expense of finite-life int

248、angible assets is included in distribution costs,sales and marketing expenses and administrative expenses in theconsolidated statements of income.Impairment of intangible assets and subsequent reversalThe Company performed its annual impairment test of goodwill and indefinite-life intangible assets

249、using the following key rates:FGL SportsMarksCTRDiscount rate(pre-tax)10.9%10.9%10.912.3%Growth rate2.0%2.0%2.03.0%CANADIAN TIRE CORPORATION ANNUAL REPORT 99NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDuring the year ended December 29,2012,the Company recorded an impairment on software intangibles

250、 of$0.9 million(2011$nil)as part of its bannerrationalization plan at FGL Sports.In addition,the Company recorded$1.6 million(2011$nil)of impairment on goodwill related to the purchase of Retailstores.These impairments pertain to the Companys Retail operating segment and are reported in other income

251、 in the consolidated statements of income.There were no reversals of impairment recorded in 2012 and 2011.For all other goodwill and intangible assets,the estimated recoverable amount exceeded the carrying amount.There is no reasonable possible change inassumptions that would cause the carrying amou

252、nt to exceed the recoverable amount.Capital commitmentsThe Company has no commitments for the acquisition of intangible assets(2011$nil).16.Investment propertyThe following table presents the changes in the cost and accumulated depreciation and impairment on the Companys investment property:(C$in mi

253、llions)20122011CostBalance,beginning of year$90.7$84.8Additions19.36.6Disposals/retirements(0.2)(0.2)Reclassified from held for sale17.9Other movements and transfers(1.7)(0.5)Balance,end of year$126.0$90.7Accumulated depreciation and impairmentBalance,beginning of year$(18.3)$(16.2)Depreciation for

254、the year(2.7)(2.6)Impairment(0.7)Reversals of impairment1.41.1Reclassified from held for sale(9.3)Other movements and transfers(1.3)(0.6)Balance,end of year$(30.9)$(18.3)Net carrying amount,end of year$95.1$72.4The investment property generated rental income of$10.1 million(2011$9.3 million).Direct

255、operating expenses(including repairs and maintenance)arising from investment property recognized in net income were$5.0 million(2011$4.0million).The Company determines the fair value of each commercial property by applying a pre-tax capitalization rate to the rental income for the current leases.The

256、capitalization rate ranged from 5.25 per cent to 11.0 per cent(2011 5.0 per cent to 11.0 per cent).The cash flows are for a term of five years,including aterminal value.The Company has real estate management expertise that is used to perform the valuation of investment property.As such,a valuation h

257、asnot been performed by an independent valuation specialist.The estimated fair value of investment property was$198.7 million(2011$138.6 million).Impairment of investment property and subsequent reversalDuring the year ended December 29,2012,the Company recorded reversal of impairment of$1.4 million

258、(2011$1.1 million)on properties where it wasdetermined that the FVLCS exceeded their carrying amount.The Company recorded impairment of$0.7 million(2011$nil)on properties where the FVLCSis less than their carrying amount.These properties pertain to the Companys Retail operating segment.The impairmen

259、t and reversal of impairment arereported in other income in the consolidated statements of income.Capital commitmentsThe Company has no commitments for the acquisition of investment property(2011$nil).CORP.CANADIANTIRE.CANOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS17.Property and equipmentThe foll

260、owing table presents the changes in the cost and accumulated depreciation and impairment on the Companys property and equipment:2012(C$in millions)LandBuildingsFixtures andequipmentLeaseholdimprovementsAssets underfinance leaseConstructionin progressTotalCostBalance,beginning of year$750.2$2,589.6$8

261、26.0$712.5$267.4$137.0$5,282.7Additions5.324.562.533.012.1111.8249.2Additions related to businesscombinations0.40.4Disposals/retirements(1.3)(3.3)(26.6)(4.7)(8.6)(44.5)Classified as held for sale(9.9)(15.2)(0.3)(0.3)0.6(25.1)Other movements and transfers88.118.437.72.3(147.1)(0.6)Balance,end of year

262、$744.3$2,683.7$880.4$778.2$273.2$102.3$5,462.1Accumulated depreciation andimpairmentBalance,beginning of year$(1.4)$(1,014.8)$(545.6)$(216.5)$(138.5)$(1,916.8)Additions(96.6)(71.9)(55.1)(22.6)(246.2)Impairment0.1(1.0)(2.1)(4.4)(7.4)Disposals/retirements(0.1)1.924.34.08.638.7Classified as held for sa

263、le1.37.70.10.5(0.2)9.4Other movements and transfers(0.1)3.83.7Balance,end of year$(0.1)$(1,102.9)$(591.4)$(271.5)$(152.7)$(2,118.6)Net carrying amount,end of year$744.2$1,580.8$289.0$506.7$120.5$102.3$3,343.52011(C$in millions)LandBuildingsFixtures andequipmentLeaseholdimprovementsAssets underfinanc

264、e leaseConstruction inprogressTotalCostBalance,beginning of year$751.8$2,522.0$747.5$548.5$262.2$129.0$4,961.0Additions3.673.068.870.99.76.7232.7Additions related to businesscombinations9.119.727.397.32.0155.4Disposals/retirements(0.1)(1.5)(16.9)(4.0)(2.2)(0.1)(24.8)Classified as held for sale(11.4)

265、(25.3)(36.7)Other movements and transfers(2.8)1.7(0.7)(0.2)(2.3)(0.6)(4.9)Balance,end of year$750.2$2,589.6$826.0$712.5$267.4$137.0$5,282.7Accumulated depreciation andimpairmentBalance,beginning of year$(3.2)$(937.3)$(492.4)$(181.3)$(114.8)$(1,729.0)Additions(95.0)(67.5)(38.7)(26.0)(227.2)Impairment

266、(1.3)(0.3)(1.6)Disposals/retirements0.11.114.03.82.121.1Classified as held for sale13.913.9Other movements and transfers3.02.80.3(0.3)0.26.0Balance,end of year$(1.4)$(1,014.8)$(545.6)$(216.5)$(138.5)$(1,916.8)Net carrying amount,end of year$748.8$1,574.8$280.4$496.0$128.9$137.0$3,365.9The Company ca

267、pitalized borrowing costs of$2.1 million(2011$4.1 million)on indebtedness related to property and equipment under construction.Therate used to determine the amount of borrowing costs capitalized during the year was 5.7%(2011 5.7%).CANADIAN TIRE CORPORATION ANNUAL REPORT 101NOTES TO THE CONSOLIDATED

268、FINANCIAL STATEMENTSThe carrying amount of assets under finance leases at December 29,2012,comprises of$58.7 million(2011$68.8 million)in buildings and$61.8 million(2011$60.1 million)in fixtures and equipment.The carrying amount of property and equipment whose title was restricted is$nil(2011$nil).T

269、he amount of compensation from third parties included in net income for property and equipment that was impaired,lost or given up was$0.1 million(2011$0.4 million).Impairment of property and equipment and subsequent reversalDuring the year ended December 29,2012,the Company recorded impairment of$7.

270、4 million(2011$1.6 million),related primarily to its bannerrationalization plan at FGL Sports.The impairment pertains to the Companys Retail operating segment and is reported in other income in the consolidatedstatements of income.There was no reversal of impairment in 2012 or 2011.Capital commitmen

271、tsThe Company has commitments of approximately$28.5 million at December 29,2012 for the acquisition of property and equipment(2011$39.8 million).18.Deferred income tax assets and liabilitiesThe tax-effected unused tax losses and temporary differences that result in deferred tax assets(liabilities)an

272、d the amount of deferred taxes recognized inthe net income or equity are as follows:2012(C$in millions)Balance,beginningof yearRecognized innet incomeRecognized in othercomprehensive incomeAcquired inbusiness combinationBalance,endof yearReserves and deferred income$103.5$0.8$104.3Property and equip

273、ment(52.6)(3.2)(55.8)Intangible assets(135.1)(7.2)(142.3)Employee benefits27.61.93.933.4Financial instruments(4.0)4.70.7Finance lease assets and obligations11.60.211.8Site restoration and decommissioning2.80.33.1Deferred items1.0(0.9)0.1Inventory(2.0)2.3(0.1)0.2Non-capital loss17.9(10.0)7.9Other(0.7

274、)(0.7)Net deferred tax asset(liability)1$(29.3)$(16.5)$8.6$(0.1)$(37.3)2011(C$in millions)Balance,beginningof yearRecognized innet incomeRecognized in othercomprehensive incomeAcquired inbusiness combinationBalance,endof yearReserves and deferred income$77.9$8.6$17.0$103.5Property and equipment(50.3

275、)(2.3)(52.6)Intangible assets(43.4)(2.9)(88.8)(135.1)Employee benefits21.90.84.927.6Financial instruments13.0(17.0)(4.0)Finance lease assets and obligations11.8(0.2)11.6Site restoration and decommissioning2.60.22.8Deferred items(0.3)(0.2)1.51.0Inventory3.6(5.6)(2.0)Non-capital loss0.117.817.9Other1.

276、4(1.3)(0.1)Net deferred tax asset(liability)2$34.6$6.4$(12.1)$(58.2)$(29.3)1Includes the net amount of deferred tax assets of$40.4 million and deferred tax liabilities of$77.7 million.2Includes the net amount of deferred tax assets of$36.8 million and deferred tax liabilities of$66.1 million.CORP.CA

277、NADIANTIRE.CANOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSNo deferred tax is recognized on the unremitted earnings of non-Canadian subsidiaries to the extent that the Company is able to control the timing of thereversal of the temporary difference,and it is probable that it will not reverse in the

278、foreseeable future.The taxable temporary difference in respect of theamount of undistributed earnings of non-Canadian subsidiaries was approximately$132.7 million at December 29,2012(2011$125.3 million).19.DepositsDeposits consist of broker deposits and retail deposits.Cash from broker deposits is r

279、aised through sales of GICs through brokers rather than directly to the retail customer.Broker deposits are offered for varyingterms ranging from 30 days to five years,and all issued GICs are non-redeemable prior to maturity(except in certain rare circumstances).Total short-termand long-term broker

280、deposits outstanding at December 29,2012,were$1,579.7 million(2011$1,597.4 million).Retail deposits consist of HIS deposits,retail GICs and TFSA deposits.Total retail deposits outstanding at December 29,2012,were$843.1 million(2011$687.1 million).Repayment requirements(C$in millions)2013$505.1201442

281、0.22015235.32016143.02017313.3Current and long-term broker and retail deposits1,616.9High-interest savings accounts813.4Total1$2,430.31The carrying amount of deposits as of December 29,2012 is net of$7.5 million of GIC broker discount fees(2011$6.1 million).Effective rates of interest20122011GIC dep

282、osits3.73%3.86%HIS account deposits1.90%2.06%20.Trade and other payables(C$in millions)20122011Trade payables and accrued liabilities$1,498.7$1,509.2Derivatives13.12.8Total financial liabilities(Note 37)1,511.81,512.0Deferred revenue41.239.5Insurance reserve13.812.9Other64.576.5$1,631.3$1,640.9Defer

283、red revenue consists mainly of unearned insurance premiums,unearned roadside assistance revenue and unearned revenue related to gift certificatesand gift cards.Other consists of sales taxes payable.The average credit period on trade payables is five to 90 days(2011 five to 90 days).CANADIAN TIRE COR

284、PORATION ANNUAL REPORT 103NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS21.ProvisionsThe following table presents the changes to the Companys provisions:2012(C$in millions)Sales and warrantyreturnsSite restoration anddecommissioningOnerous contractsCustomer loyaltyOtherTotalBalance,beginning of year

285、$113.2$26.8$7.1$68.1$31.8$247.0Charges,net of reversals242.811.50.4112.81.0368.5Utilizations(245.7)(5.0)(2.8)(107.7)(16.0)(377.2)Unwinding of discount1.00.41.4Change in discount rate0.90.9Balance,end of year$111.3$34.6$4.7$73.2$16.8$240.6Less:Current provisions108.67.31.566.12.3185.8Long-term provis

286、ions$2.7$27.3$3.2$7.1$14.5$54.8Sales and warranty returnsThe provision for sales and warranty returns relates to the Companys obligation to stores within its Dealer network for defective goods in their currentinventories and defective goods sold to customers throughout its store operations that have

287、 yet to be returned,as well as after sales and service forreplacement parts.Site restoration and decommissioningIn the normal course of business,the Company leases property and has a legal or constructive obligation to return the sites to their original or agreed-uponstate at the end of the lease te

288、rm.Onerous contractsThe Company recognizes a provision for onerous lease contracts on premises that are no longer being used due to store closures.Customer loyaltyThe Company maintains a provision related to its loyalty programs,including paper-based Canadian Tire Money issued at Petroleum gas bars

289、and toDealers and Electronic Canadian Tire Money on-the-Card issued whenever consumers make a Canadian Tire Options MasterCard purchase.In addition,the Company is testing a new loyalty program called Canadian Tire Money Advantage.All forms of loyalty can be redeemed only at the Canadian Tire Retails

290、tores for merchandise at the option of the consumer.An obligation arises from the above customer loyalty program when the Dealers pay the Company to acquire paper-based Canadian Tire Money becausethe Dealers retain the right to return Canadian Tire Money to the Company for refund in cash.An obligati

291、on also arises when the Company issueselectronic-based Canadian Tire Money on-the-Card or Canadian Tire Money Advantage.These obligations are measured at fair value by reference to thefair value of the awards for which they could be redeemed based on the estimated probability of their redemption and

292、 are expensed to sales and marketingexpenses in the consolidated statements of income.OtherOther provisions include liabilities for severance under restructuring arrangements,the cost of legal issues that have not yet been settled and other claims.The amount and timing of when the Company expects to

293、 discharge these liabilities are uncertain and are based on the Companys best estimates.22.ContingenciesLegal mattersThe Company and certain of its subsidiaries are party to a number of legal proceedings.The Company has determined that each such proceedingconstitutes a routine legal matter incidenta

294、l to the business conducted by the Company and that the ultimate disposition of the proceedings will not have amaterial effect on its consolidated net income,cash flows or financial position.The Bank is the subject of two class action proceedings regarding allegations that certain fees charged on th

295、e Bank-issued credit cards are not permittedunder the Quebec Consumer Protection Act.The Bank has determined that it has a solid defense to both actions on the basis that banking and cost ofborrowing disclosure are matters of exclusive federal jurisdiction.Accordingly,no provision has been made for

296、amounts,if any,that would be payable in theevent of an adverse outcome.If the court rules against the Company,the total aggregate exposure would be approximately$26.2 million at December 29,2012.CORP.CANADIANTIRE.CANOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS23.Short-term borrowingsShort-term borr

297、owings include commercial paper notes and bank line of credit borrowings.The commercial paper notes are short-term notes issued withvarying original maturities of one year or less,typically 90 days or less,at interest rates fixed at the time of each renewal.Short-term borrowings may bearinterest pay

298、able at maturity or be sold at a discount and mature at face value.Commercial paper notes issued by the Company are recorded at amortizedcost.24.Loans payableFranchise Trust,an SPE,is a legal entity sponsored by a third-party bank that originates loans to Dealers.Loans payable are the loans that Fra

299、nchise Trusthas incurred to fund the loans to Dealers.These loans are not direct legal liabilities of the Company but have been consolidated in the accounts of theCompany as the Company effectively controls the silo of Franchise Trust containing the Dealer loan program.Loans payable,which are initia

300、lly recognized at fair value and are subsequently measured at amortized cost,are due within one year.25.Long-term debtLong-term debt includes the following:20122011(C$in millions)FacevalueCarryingamountFacevalueCarryingamountSenior notes1Series 2006-2,4.405%,May 20,2014$238.7$238.7$238.7$238.7Series

301、 2008-1,5.027%,February 20,2013600.0599.5600.0598.3Series 2010-1,3.158%,November 20,2015250.0249.0250.0248.8Series 2012-1,2.807%,May 20,2017200.0199.0Series 2012-2,2.394%,October 20,2017400.0398.0Subordinated notes1Series 2006-2,4.765%,May 20,201413.913.913.913.9Series 2008-1,6.027%,February 20,2013

302、34.934.934.934.8Series 2010-1,4.128%,November 20,201514.614.614.614.5Series 2012-1,3.827%,May 20,201711.611.6Series 2012-2,3.174%,October 20,201723.323.3Medium-term notes4.95%due June 1,2015300.0299.6300.0299.45.65%due June 1,2016200.0198.9200.0198.66.25%due April 13,2028150.0149.4150.0149.46.32%due

303、 February 24,2034200.0199.1200.0199.15.61%due September 4,2035200.0199.2200.0199.2Finance lease obligations166.6166.6176.4176.4Promissory note2.62.64.54.5Total debt$3,006.2$2,997.9$2,383.0$2,375.6Current$661.9$661.9$27.9$27.9Non-current2,344.32,336.02,355.12,347.7Total debt$3,006.2$2,997.9$2,383.0$2

304、,375.61Senior and subordinated notes are those of GCCT.The carrying amount of long-term debt is net of debt issuance costs of$7.7 million(2011$6.6 million)and the benefit on the effective portion of the fairvalue hedges of$0.6 million(2011 benefit of$0.8 million).Senior and subordinated notesAsset-b

305、acked series senior and subordinated notes issued by the Company are recorded at amortized cost using the effective interest method.Subject to the payment of certain priority amounts,the series senior notes have recourse on a priority basis to the related series ownership interest.Theseries subordin

306、ated notes have recourse to the related series ownership interests on a subordinated basis to the series senior notes in terms of the priorityCANADIAN TIRE CORPORATION ANNUAL REPORT 105NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSof payment of principal and,in some circumstances,interest.The series

307、 notes,together with certain other permitted obligations of GCCT,are secured bythe assets of GCCT.The entitlement of note holders and other parties to such assets is governed by the priority and payment provisions set forth in theGCCT Indenture and the related series supplements under which these se

308、ries of notes were issued.Repayment of the principal of the series 2006-2,2008-1,2010-1,2012-1 and 2012-2 notes is scheduled to commence and be completed on the expectedrepayment dates indicated in the preceding table.Following repayment of principal owing,and in some circumstances interest,under th

309、e series seniornotes,collections distributed to GCCT in respect of the related ownership interests will be applied to pay principal owing under series subordinated notes.Principal repayments may commence earlier than these scheduled commencement dates if certain events occur,including:the Bank faili

310、ng to make required distributions to GCCT or failing to meet covenant or other contractual terms;the performance of the receivables failing to achieve set criteria;and insufficient receivables in the pool.None of these events occurred in the year ended December 29,2012.Medium-term notesMedium-term n

311、otes are unsecured and are redeemable by the Company,in whole or in part,at any time,at the greater of par or a formula price based uponinterest rates at the time of redemption.Finance lease obligationsFinance leases relate to distribution centres,fixtures and equipment.The Company generally has the

312、 option to renew such leases or purchase the leasedassets at the conclusion of the lease term.During 2012,interest rates on finance leases ranged from 0.81 per cent to 12.75 per cent.Remaining terms atDecember 29,2012,were one to 169 months.Finance lease obligations are payable as follows:20122011(C

313、$in millions)FutureminimumleasepaymentsInterestPresentvalue ofminimumleasepaymentsFutureminimumleasepaymentsInterestPresentvalue ofminimumleasepaymentsDue in less than one year$34.5$9.6$24.9$33.9$10.3$23.6Due between one year and two years25.88.617.230.19.420.7Due between two years and three years23

314、.37.815.523.18.514.6Due between three years and four years18.97.011.921.07.713.3Due between four years and five years15.26.48.818.37.011.3More than five years118.530.288.3129.736.892.9$236.2$69.6$166.6$256.1$79.7$176.4Promissory notesPromissory notes were issued as part of store acquisitions(Note 8.

315、2).These notes are non-interest-bearing.Debt covenantsThe Company has provided covenants to certain of its lenders.The Company was in compliance with all of its covenants as at December 29,2012.26.Other long-term liabilities(C$in millions)20122011Employee benefits(Note 27)$125.9$108.6Deferred gains2

316、4.227.0Deferred revenue18.320.3Derivatives(Note 37)0.23.9Other44.845.9$213.4$205.7Deferred gains relate to the sale and leaseback of certain distribution centres.The deferred gains are amortized over the terms of the leases.CORP.CANADIANTIRE.CANOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSOther incl

317、udes unearned insurance premiums,unearned roadside assistance revenue,deferred lease inducements and off-market leases.27.Post-employment benefitsProfit-sharing plan for certain employeesThe Company has a profit-sharing plan for certain of its employees.The amount awarded to employees is contingent

318、on the Companys profitability.Themaximum contribution is 6.75 per cent of earnings before income taxes,after certain adjustments.A portion of the award is contributed to a DPSP for thebenefit of the employees.The maximum amount of the Companys contribution to the DPSP per employee per year is subjec

319、t to limits set by the IncomeTax Act.Each participating employee is required to invest and maintain 10 per cent of the portion of their award required to be contributed to the DPSP in aCompany share fund of the DPSP.The share fund holds both Common Shares and Class A Non-Voting Shares.The Companys c

320、ontributions to the DPSPin respect of each employee vest 20 per cent after one year of continuous service and 100 per cent after two years of continuous service.In 2012,the Company contributed$20.0 million(2011$19.8 million)under the terms of the DPSP.Defined benefit planThe Company provides certain

321、 health care,dental care,life insurance and other benefits for certain retired employees pursuant to Company policy.TheCompany does not have a pension plan.Information about the Companys defined benefit plan is as follows:(C$in millions)20122011Change in the present value of defined benefit obligati

322、onDefined benefit obligation,beginning of year$107.4$84.3Current service cost2.51.8Interest cost4.94.9Actuarial loss13.419.1Benefits paid(3.3)(2.7)Defined benefit obligation,end of year1124.9107.4Unamortized past service credits1.01.2Accrued benefit liability$125.9$108.61The accrued benefit obligati

323、on is not funded because funding is provided when benefits are paid.Accordingly,there are no plan assets.(C$in millions)20122011Components of non-pension post-retirement benefit costAmounts recognized in net income:Current service cost$2.5$1.8Interest cost4.94.9Amortization of past service credits(0

324、.3)(0.4)Total recognized in net income$7.1$6.3Amount recognized in other comprehensive income:Actuarial loss immediately recognized$13.4$19.1Total recognized in other comprehensive income$13.4$19.1Significant actuarial assumptions used:20122011Defined benefit obligation,end of year:Discount rate4.00

325、%4.50%Net benefit plan expense for the year:Discount rate4.50%5.75%For measurement purposes,a 6.20 per cent weighted average health care trend rate is assumed for 2012(2011 7.28 per cent).The rate is assumed todecrease gradually to 4.50 per cent for 2032(2011 decrease gradually to 4.50 per cent for

326、2029)and remain at that level thereafter.The most recent actuarial valuation of the obligation was performed as of December 31,2012.The next required valuation will be as of December 31,2015.CANADIAN TIRE CORPORATION ANNUAL REPORT 107NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSThe cumulative amoun

327、t of actuarial losses before tax recognized in equity at December 29,2012,was$40.8 million(2011$27.4 million).Sensitivity analysis:Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans.A one-percentage-point change inassumed health care cost

328、 trend rates would have the following effects for 2012:(C$in millions)IncreaseDecreaseTotal of current service and interest cost$0.9$(0.7)Accrued benefit obligation10.7(8.8)28.Share capital(C$in millions)20122011Authorized3,423,366 Common Shares100,000,000 Class A Non-Voting SharesIssued3,423,366 Co

329、mmon Shares(2011 3,423,366)$0.2$0.277,720,401 Class A Non-Voting Shares(2011 78,020,208)687.8710.3$688.0$710.5All issued shares are fully paid.The Company does not hold any of its Common or Class A Non-Voting Shares.Neither the Common nor Class ANon-Voting Shares have a par value.During 2012 and 201

330、1,the Company issued and repurchased Class A Non-Voting Shares.The net excess of the issue price over the repurchase priceresults in contributed surplus.The net excess of the repurchase price over the issue price is allocated first to contributed surplus,with any remainderallocated to retained earni

331、ngs.The following transactions occurred with respect to Class A Non-Voting Shares during 2012 and 2011:20122011(C$in millions)Number$Number$Shares outstanding at beginning of the year78,020,208$710.378,020,007$711.4IssuedDividend reinvestment plan69,5454.671,6044.3Stock option plan2001,200Employee P

332、rofit Sharing Plan59,0784.159,4913.6Dealer profit sharing plans54,7243.759,3023.7Repurchased(483,354)(33.1)(191,396)(11.9)Excess of issue price over repurchase price(1.8)(0.8)Shares outstanding at end of the year77,720,401$687.878,020,208$710.3Since 1988 the Company has followed an anti-dilution pol

333、icy.The Company repurchases shares to substantially offset the dilutive effects of issuing Class ANon-Voting Shares pursuant to various corporate programs and in 2012 the Company purchased an additional 299,806 Class A Non-Voting Shares.Conditions of Class A Non-Voting Shares and Common SharesThe holders of Class A Non-Voting Shares are entitled to receive a preferential cumulative dividend at the