Canadian Tire Corporation (CTC) 2020年年度報告「TSX」.pdf

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1、canadian tire corporation2020 REPORT TO SHAREHOLDERSiiicanadian tire corporation2020 REPORT TO SHAREHOLDERSivMESSAGE FROM MAUREEN J.SABIA,CHAIRMAN OF THE BOARDDEAR SHAREHOLDERS,We have all been through a tumultuous year.It has been challenging for my colleagues on the Board,for ourmanagement and for

2、 all of you.It has been especially challenging for our CEO,Greg Hicks,who was confronted,a mere day after he was appointed CEO,with leading the Company in a world dominated by COVID-19 and the restrictions that followed in its wake.Greg understood how difficult the road ahead would be,but viewed the

3、 situation as providing opportunities as well as challenges.Our strong results in 2020 have shown how resilient Canadian Tire proved to be under his leadership,despite the unprecedented impacts on theCompanys business.Given the circumstances,your Board of Directors quickly stepped up and,in the firs

4、t few months,held weekly calls with management to address the Companys response to the pandemic and to support management in its efforts to operate the business in unprecedented times.The Board also established an ad hoc subcommittee to serve as a resource to management on key strategic issues.Throu

5、ghout the year,the Board has continued to oversee the impacts of COVID-19 on the Company and managements responses thereto,with particular emphasis on its impacts on operations,customers,employees,financial performance,risk management and liquidity.At the same time,the Board worked with management o

6、n opportunities to grow the Companys business,especially in eCommerce where Canadian Tire experienced record growth.The Board spent much of its time on the strategic direction of the Tire both during and after the pandemic and overseeing the huge number of internal communications with our employees

7、and external communications with our customers and shareholders.With the support of the Board,our skilled management navigated through the pandemic effectively.The Company was able to move with agility and purpose,implementing swift operational changes as circumstances changed.Our goal was(and still

8、 is)to ensure that Canadian Tire remains strong and even more relevant to Canadians.What we accomplished in 2020 could not have been done without hard work,and very long hours and days.Onbehalf of the Board,I say a BIG thank you to our management at every level for their energy,their stamina and the

9、ir commitment to making the Tire resilient in the face of overwhelming adverse conditions.Their goal wasto ensure that Canadian Tire continued to be there for Canadians.01Going forward,Canadian Tire is committed to transforming the Company to focus on being customer-centric anddigitally savvy.We are

10、 committed to an omni-channel strategy which includes both bricks and mortar storesand online business.This has served us very well during COVID-19 and will serve us well in the months and years post the pandemic.Based on my personal experience and the experience of many others,working from home is

11、not sustainable.It is stressful,time-consuming and lacks the value of human interaction.Working virtually made our job so much harder.In spite of the fact that working from home has not been optimal,our employees have been magnificent in ensuring that their work continued unabated.So many worked and

12、 are still working a seven-day week.Our Associate Dealers worked tirelessly,often on short notice,to adapt to ever-changing circumstances in a superb effort to continue to serve their customers.I am very proud of their efforts.Given the importance of ESG-related issues,we have decided to transform t

13、he Boards Brand and Community Committee into a Brand and Corporate Responsibility Committee.This Committee will be responsible for all matters that could impact our iconic brand.An important part of its duties will be ESG matters as we believe these are critical to the health of our brand.I have lon

14、g believed that business must be successful in order to provide the jobs,products and services that Canadians need.Therefore,business should be proactive in finding ways to encourage public policies that promote business profitability and growth.The private sector and Canadian Tire in particular has

15、 an important role to play in working with the public sector to get Canada on the path to economic recovery.Indeed,only through a true partnership between the private sector and governments at all levels can we overcome the challenges posed by the pandemic.Jim Goodfellow will not be standing for re-

16、election to our Board in May.Jim has been one of our leading directors and he will be missed.He has had a long association with the Tire and my colleagues and I have always considered him a mentor and a friend.He has contributed much to our success and I am pleased that he has agreed to remain on th

17、e Board of Canadian Tire Bank.It is with deep regret that we must say farewell to Claude LHeureux.His place on the Board will be taken bySylvain Leroux,a fellow Associate Dealer,subject to shareholder approval.Claude has been the gold standard of Associate Dealers on the Board.His knowledge of the C

18、ompany,his courage,his insights and his statesmanlike approach to issues made him a hugely valuable contributor to our discussions and decisions.We will miss his wise counsel and his friendship.I am very pleased to welcome Steve Frazier to our Board of Directors,subject to shareholder approval.Mr.Fr

19、azier has recently retired from Amazon where for some 20 years he was a senior executive with both international and domestic responsibilities.He led the U.K.,China and Brazil businesses,private brands,and Amazons B2B marketplace in multiple global markets.Finally,I want to thank you,our shareholder

20、s,for your continued support and trust.The resilience shown by Canadian Tire during 2020 is yet another indication of the strength of our iconic Company,a company that refuses to accept anything less than the best it can be in the service of its customersin spite of very challenging circumstances.In

21、 a matter of weeks,we ramped up our eCommerce business to unprecedented levels a billion dollars in 2020.Circumstances drove us to do in weeks what,innormal circumstances,we planned to do in three years.As our founder A.J.Billes always counselled:strive always to make things better.That counsel has

22、become our mantra.I want to say once again what a privilege it is for me to work for Canadian Tire,a company that is endlessly fascinating,a company that has a tradition of going from success to success.It is a company that is,truly,part of the fabric of Canada.I know that an even more impressive fu

23、ture lies ahead.Maureen Sabia,Chairman of the Board02DEAR SHAREHOLDERS,It is with great pride that I write my first letter to you as CEO of Canadian Tire Corporation.Its an honour and a privilege to lead an iconic Company that is woven into the fabric of our nations culture.2020 was a year unlike an

24、y other.We all faced significant personal and professional challenges,many of which continue today.Although we were navigating uncharted waters,we had a powerful compass in the words of our founder,A.J.Billes,who instilled in our great Company the value of“striving always to make things better.”In t

25、urn,our team rallied around our purpose of being there for our customers,communities,and each other.To our Associate Dealers and the tens of thousands of team members across our family of companies:thank you.Thank you for your unshakeable resilience,grit and determination in the face of complex and

26、relentless obstacles.MESSAGE FROM GREG HICKS,PRESIDENT AND CHIEF EXECUTIVE OFFICERStriving Always To Make Things Better03Internally,the challenges of COVID-19 gave us an opportunity to reshape the culture of our Company,including how we communicate,how we show up for each other,and how we work.Manag

27、ing the crisis snapped our teams together around shared objectives:no longer was there time for meetings before meetings,vertical hierarchies and egos.By working horizontally towards common outcomes focused on the customer,we were faster and more agile than ever before.We recognized that we were liv

28、ing in a time that would redefine us and we werent going to waste the chance to learn,grow and,ultimately,be better connected to our customers,our communities,and each other.We aligned to a common goal:protecting the health and safety of our employees and customers while ensuring Canadians had acces

29、s to the products,services and support they needed.Our frontline store,contact centre and Distribution Centre staff,as well as Dealers and corporate employees,collaborated to solve problems and implement new and better processes for our customers.Our customers wanted and needed more options when it

30、came to how and when they could shop.So,in addition to enhancing the capacity and stability of our website to process an unprecedented volume of eCommerce orders,we launched Curbside Pick Up in a matter of days,enabling our customers to get products that simply couldnt wait for shipping.Knowing that

31、 being there for life in Canada is about more than the products we sell or services we provide,our stores and Dealers stepped up for their communities with donations and support.In 2020 welaunched Canadian Tires$5 million COVID-19 Response Fund and Jumpstart initiated its$8 million Sport Relief Fund

32、.And through the creation of a formal Diversity,Inclusion and Belonging(DIB)team and ongoing DIB initiatives and programs,we embarked on a journey to ensure our culture is one where our people feel seen,heard and that they belong.Not all of our solutions were perfect,but we quickly realized that str

33、iving always to make things better doesnt mean striving always to make things perfect.We evolved developing newfound agility by embracing the mindset of progress over perfection.WHAT 2020 TAUGHT US04Although it was out of necessity that we embraced new ways of working,our results prove that we havet

34、apped into something powerful.Following decades of investment to build a resilient and sustainable business model,our diversified segments serve as a strategic advantage and solid defence against uncertainty.The year was unquestionably difficult:the challenges of 2020 impacted all parts of our busin

35、ess.However,our core Retail segment proved integral,safely providing the products and services Canadians needed throughout the pandemic.Our retail sales(excluding Petroleum)grew a remarkable 11%in the year.We continued to make progress in improving our operating leverage,a goal of our Operational Ef

36、ficiency program,and achieved an impressive 15.7%growth in our normalized retail income before tax.And while the first two quarters of the year were significantly impacted by the pandemic,the team drove outstanding results in the second half,with EPS eclipsing 2019s full yearperformance and growing

37、48%year-over-year.Our full year normalized diluted EPS was$13.00,essentially flat to the 2019 level of$13.04.At the onset of the pandemic,there were questions about the risk in our Financial Services portfolio,but our team navigated remarkably.With demonstrated risk management capabilities,access to

38、 multiple sources of liquidity,and a robust provision for potential credit losses,we enter 2021 prepared for the future.We also welcomed 1.8 million new members into our Triangle Rewards credit card and loyalty program in 2020.The crisis reintroduced many Canadians to Canadian Tire.The real opportun

39、ity now is to engage with and prove to new members that we have the right assortment of products for life in Canada,and the omni-channel presence to enable shopping where and how they want.Customers experienced new ways of shopping our family of companies,and our eCommerce business grew to$1.6 billi

40、on a 183%increase over the prior year.OUR RESULTS05Our differentiated Owned Brands portfolio performed extremely well,with penetration across our business now at 37%.Our Helly Hansen business also demonstrated resiliency and is strengthening our core business bydifferentiating our positioning at Spo

41、rtChek and Marks,and we see runway in the U.S.and internationally.Foundational to our resilience is our capital strength.With$2 billion in cash and short-term investments,and$3billion,$3.9 billion and$299 million in liquidity at our Retail,Financial Services and REIT segments,respectively,we have th

42、e capacity to absorb impacts of an uncertain environment while retaining the flexibility to invest and grow in areas of strategic importance.Additionally,in November,we approved a 3.3%increase in our annual dividend,reflecting 11 years of consecutive increases.Despite the challenging retail environm

43、ent,we remain focused on accelerating our shift to greater digitization and delivering relevant experiences for our customers.Were expediting larger structural cost improvements and changing the way we work to make the efforts permanent.We are adopting hybrid,agile work models across the enterprise,

44、all focused on improving experiences for our customers.06I want to thank you our shareholders for your continued belief in,support of,and commitment to CTC.We in turn are committed to you,and I want you to know what you can expect from me.The crisis helped me recognize that the barriers to boldness

45、and speed are less about technology,scale and capital,and more about mindset regarding what is possible and what one is willing to do,including being committed to collaboration and having the courage to challenge bureaucratic chains of command and the processes that slow us down.This learning and th

46、e management of our Operational Efficiency program serve as our blueprint for changing the way we operate to enable our strategy,become more efficient,and secure our competitive position.Financially,Operational Efficiency is focused on stream-lining our business,doing things once,and reducing our ex

47、penses to help us improve our bottom line performance and return value to our shareholders,including over$200 million in run rate savings by 2022.I will ensure we are good stewards of capital:COVID-19 pushed the organizations focus on capital intopurview.I will urge our teams to prioritize the best

48、areas of our business in which to invest.I will challenge conventional capital allocation and eliminate the phrase“because we have always done it this way”from our vocabulary.Finally,Ive heard from shareholders and investors that we have not been adequately telling our story.Among the lessons of 202

49、0 was the power of frequent and transparent communication with all our stakeholders.My initial commitment to communication has not wavered over the last year,and I hope you are beginning to feel the difference.Trust that going forward,we will be focused on furthering your understanding of our perfor

50、mance and where we intend to go in the future.BEING THERE FOR YOU:OUR SHAREHOLDERS07THE NEXT 100 YEARSWhen we finally reach the other side of the pandemic,there will be another challenge,a new competitor,the next disruption.But we will always overcome because CTC is nothing if not resilient.Between

51、the combination of our unique Dealer model,the strength of our Triangle Rewards program,and the relevance,breadth and depth of our assortment,we are well-positioned to continue engaging with and supporting our customers in 2021 and beyond.Know that as CEO,my number one job is to bring together all o

52、ur assets to deliver a truly connected customer experience.To do this,we will need to invest accordingly and be bolder about our strategic agenda.We need to focus and allocate greater resources to the businesses that maximize our potential and are well-positioned to deliver strong returns.Given chan

53、ging consumer needs,disruptive technologies and competitors,our businesses must work together to ensure we are continuing to engage and drive relevance with our customers.Consider for a moment our network of stores in a different way:we have 12.5 million square feet of warehouse space with$4 billion

54、 worth of inventory,all within a 15-minute drive of 90%of Canadians.Whats more,these warehouses just happen to be attached to 34 million square feet of product showrooms where customers can touch,feel,and buy product.Through Triangle Rewards,over 70%of Canadian households,or 10 million Canadians,are

55、 enrolled in our best-in-class loyalty program,and in 2020,we had 800 million visits to our websites.We have the assets needed to compete.But if we want to win,we must connect these assets to create and deliver relevant experiences for our customers.In closing,I want to thank our Board of Directors

56、for their confidence in me both in March 2020 and today,following more than a year of COVID-19 turbulence.I am extremely grateful for the Boards unwavering support and guidance.For me,2020 was a masterclass in leadership.The pandemic illuminated a fact that would have come to light eventually:“the w

57、ay weve always done things”was simply not going to work.So,weve changed course when it comes to how we work and are charting a new path to growth.Know that we will continueto be there for our employees,customers,communities and shareholders,not by standing still,but by embracing progress over perfec

58、tion,and striving always to make life in Canada better.Sincerely,Greg Hicks,President and CEO,Canadian Tire Corporation 08managements discussion and analysis AND consolidated financial statements10Managements Discussion and AnalysisCanadian Tire Corporation,Limited Fourth Quarter and Full-Year 2020T

59、able of Contents1.0PREFACE12.0COMPANY AND INDUSTRY OVERVIEW33.0HISTORICAL PERFORMANCE HIGHLIGHTS44.0EVENTS THAT IMPACTED THE COMPANY THIS YEAR65.0FINANCIAL PERFORMANCE8 5.1 Consolidated Financial Performance8 5.2 Retail Segment Performance14 5.3 Financial Services Segment Performance20 5.4 CT REIT S

60、egment Performance236.0BALANCE SHEET ANALYSIS,LIQUIDITY,AND CAPITAL RESOURCES267.0EQUITY348.0TAX MATTERS359.0ACCOUNTING POLICIES,ESTIMATES,AND NON-GAAP MEASURES3510.0KEY RISKS AND RISK MANAGEMENT4611.0INTERNAL CONTROLS AND PROCEDURES5612.0ENVIRONMENTAL AND SOCIAL RESPONSIBILITY5713.0FORWARD-LOOKING

61、STATEMENTS AND OTHER INVESTOR COMMUNICATION5814.0RELATED PARTIES601.0Preface1.1 Definitions In this document,the terms“we”,“us”,“our”,“Company”,“Canadian Tire Corporation”,“CTC”,and“Corporation”refer to Canadian Tire Corporation,Limited,on a consolidated basis.This document also refers to the Corpor

62、ations three reportable operating segments:the“Retail segment”,the“Financial Services segment”,and the“CT REIT segment”.The financial results for the Retail segment are delivered by the businesses operated by the Company under the Companys retail banners,which include Canadian Tire,PartSource,Petrol

63、eum,Gas+,Party City,Marks,Marks Work Wearhouse,Lquipeur,Helly Hansen,SportChek,Sports Experts,Atmosphere,Pro Hockey Life(“PHL”),National Sports,Sports Rousseau,and Hockey Experts.In this document:“Canadian Tire”refers to the general merchandise retail and services businesses carried on under the Can

64、adian Tire,PartSource,PHL,and Party City names and trademarks,and the retail petroleum business carried on by Petroleum.“Canadian Tire stores”and“Canadian Tire gas bars”refer to stores and gas bars(which may include convenience stores,car washes,and propane stations)that operate under the Canadian T

65、ire and Gas+names and trademarks.“Owned brands”refers to brands owned by the Company and are managed by the consumer brands division of the Retail segment.“CT REIT”refers to the business carried on by CT Real Estate Investment Trust and its subsidiaries,including CT REIT Limited Partnership(“CT REIT

66、 LP”).“Financial Services”refers to the business carried on by the Companys Financial Services subsidiaries,namely Canadian Tire Bank(“CTB”or“the Bank”)and CTFS Bermuda Ltd.(“CTFS Bermuda”),a Bermuda reinsurance company.“Helly Hansen”refers to the international wholesale and retail businesses that o

67、perate under the Helly Hansen and Musto brands.“Jumpstart”refers to Canadian Tire Jumpstart Charities.“Marks”refers to the retail and commercial wholesale businesses carried on by Marks Work Wearhouse Ltd.,and“Marks stores”including stores that operate under the Marks,Marks Work Wearhouse,and Lquipe

68、ur names and trademarks.“PartSource stores”refers to stores that operate under the PartSource name and trademarks.“Party City”refers to the party supply business that operate under the Party City name and trademarks in Canada.“Petroleum”refers to the retail petroleum business carried on under the Ca

69、nadian Tire and Gas+names and trademarks.“SportChek”refers to the retail business carried on by FGL Sports Ltd.,including stores that operate under the SportChek,Sports Experts,Atmosphere,National Sports,Sports Rousseau,and Hockey Experts names and trademarks.Other terms that are capitalized in this

70、 document are defined the first time they are used.MANAGEMENTS DISCUSSION AND ANALYSISCANADIAN TIRE CORPORATION 2020 REPORT TO SHAREHOLDERS 1 of 134This document contains trade names,trademarks,and service marks of CTC and other organizations,all of which are the property of their respective owners.

71、Solely for convenience,the trade names,trademarks,and service marks referred to herein appear without the or TM symbol.1.2 Forward-Looking Statements This Managements Discussion and Analysis(“MD&A”)contains statements that are forward-looking and may constitute“forward-looking information”within the

72、 meaning of applicable securities legislation.Actual results or events may differ materially from those forecasted and from statements of the Companys plans or aspirations that are made in this MD&A because of the risks and uncertainties associated with the Corporations businesses and the general ec

73、onomic environment.The Company cannot provide any assurance that any forecast financial or operational performance,plans,or aspirations will actually be achieved or,if achieved,will result in an increase in the Companys share price.Refer to section 13.0 in this MD&A for a more detailed discussion of

74、 the Companys use of forward-looking statements.1.3 Review and Approval by the Board of Directors The Board of Directors,on the recommendation of its Audit Committee,approved the contents of this MD&A on February 17,2021.1.4 Quarterly and Annual Comparisons in the MD&A Unless otherwise indicated,all

75、 comparisons of results for Q4 2020(14 weeks ended January 2,2021)are compared against Q4 2019(13 weeks ended December 28,2019)and all comparisons of results for the full year 2020(53 weeks ended January 2,2021)are compared against results for full year 2019(52 weeks ended December 28,2019).1.5 Acco

76、unting Framework The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards(“IFRS”),also referred to as Generally Accepted Accounting Principles(“GAAP”),using the accounting policies described in Note 3 to the consolidated financial statem

77、ents.1.6 Accounting Estimates and Assumptions The preparation of consolidated financial statements that conform to IFRS requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of the consol

78、idated financial statements and the reported amounts of revenue and expenses during the reporting period.Refer to section 9.1 in this MD&A for further information.1.7 Key Operating Performance Measures and Additional GAAP and Non-GAAP Financial Measures The Company has identified several key operati

79、ng performance measures and non-GAAP financial measures which Management believes are useful in assessing the performance of the Company;however,readers are cautioned that some of these measures may not have standardized meanings under IFRS and,therefore,may not be comparable to similar terms used b

80、y other companies.Refer to section 9.3.1 and 9.3.2 for additional information on these metrics.1.8 Rounding and Percentages Rounded numbers are used throughout the MD&A.All year-over-year percentage changes are calculated on whole dollar amounts except in the presentation of basic and diluted earnin

81、gs per share(“EPS”),in which year-over-year percentage changes are based on fractional amounts.MANAGEMENTS DISCUSSION AND ANALYSIS2 of 134 CANADIAN TIRE CORPORATION 2020 REPORT TO SHAREHOLDERS2.0Company and Industry OverviewCanadian Tire Corporation,Limited,(TSX:CTC.A)(TSX:CTC),is a family of busine

82、sses that includes a Retail segment,a Financial Services division and CT REIT.Our retail business is led by Canadian Tire,which was founded in 1922 and provides Canadians with products for life in Canada across its Living,Playing,Fixing,Automotive and Seasonal&Gardening divisions.PartSource,Gas+,Par

83、ty City and Pro Hockey Life are key parts of the Canadian Tire network.The Retail segment also includes Marks,a leading source for casual and industrial wear;and SportChek,Hockey Experts,Sports Experts,National Sports,Intersport and Atmosphere,which offer the best active wear brands.The approximatel

84、y 1,741 retail and gasoline outlets are supported and strengthened by our Financial Services division and the tens of thousands of people employed across Canada and around the world by the Company and its Canadian Tire Associate Dealers(“Dealers”),franchisees and petroleum retailers.In addition,Cana

85、dian Tire Corporation owns and operates Helly Hansen,a leading global brand in sportswear and workwear based in Oslo,Norway.A description of the Companys business and select core capabilities can be found in the Companys 2020 Annual Information Form(“2020 AIF”),including section 2“Description of the

86、 Business”and on the Companys Corporate(https:/corp.canadiantire.ca/English/home/default.aspx)and Investor Relations(https:/corp.canadiantire.ca/English/investors/default.aspx)websites.MANAGEMENTS DISCUSSION AND ANALYSISCANADIAN TIRE CORPORATION 2020 REPORT TO SHAREHOLDERS 3 of 1343.0Historical Perf

87、ormance Highlights3.1 Selected Annual Consolidated Financial Trends The following table provides selected annual consolidated financial and non-financial information for the last three fiscal periods.The financial information has been prepared in accordance with IFRS.As a result of COVID-19,consolid

88、ated earnings and EPS were impacted by a number of items in 2020,refer to section 4.0 in this MD&A for further information regarding the events that impacted the Company in 2020.The fourth quarter and full year 2020 results include one additional week of retail operations compared to the fourth quar

89、ter and full year 2019 results.(C$in millions,except per share amounts and number of retail locations)2020120192018Consolidated comparable sales growth2NM 3.6%2.2%Retail Sales excluding Petroleum$15,172.7$13,669.0$13,151.1 Revenue$14,871.0$14,534.4$14,058.7 Net income862.6 894.8 783.0 Normalized4 ne

90、t income904.9 923.3 870.4 Basic EPS12.35 12.60 10.67 Diluted EPS12.31 12.58 10.64 Normalized3 diluted EPS13.00 13.04 11.95 Total assets20,377.1 19,518.3 17,286.8 Total non-current financial liabilities48,353.3 7,535.3 7,597.1 Financial Services gross average accounts receivables(total portfolio)6,00

91、8.6 6,253.5 5,825.3 Number of retail locations1,741 1,746 1,700 Cash dividends declared per share$4.5875$4.2500$3.7375 Stock price(CTC.A)5167.33 140.63 142.08 1The full year 2020 results include one additional week of retail operations compared to the full year 2019.2Does not include Helly Hansen.Du

92、e to the pervasive temporary store closures across all banners in the first half of 2020,Management believes that consolidated comparable sales growth for the full year 2020 is not a meaningful metric.3 Refer to section 5.1.1 for details on normalized items.4 Includes short and long-term deposits,lo

93、ng-term debt including the current portion,long-term derivative liabilities included in other long-term liabilities,and the redeemable financial instrument.5 Closing share price as of the date closest to the Companys fiscal year end.MANAGEMENTS DISCUSSION AND ANALYSIS4 of 134 CANADIAN TIRE CORPORATI

94、ON 2020 REPORT TO SHAREHOLDERS REVENUE BY BANNER/UNIT*($millions)201820192020*05,00010,00015,00020,000Canadian TireFinancial ServicesSportChekMarksPetroleum*Excludes CT REITHelly Hansen*2020 results are based on a 53 week period.FINANCIAL SERVICES GROSS AVERAGEACCOUNTS RECEIVABLE($millions)201820192

95、0204,5004,7505,0005,2505,5005,7506,0006,2506,500STORES AND RETAIL REVENUERetail revenue($billions)Number of stores$12.8$13.2$13.6201820192020*1011121314165016751700172517501775Store countRetail revenue*2020 results are based on a 53 week period.NORMALIZED DILUTED EPS AND DIVIDENDS PER SHARE($per sha

96、re)(Dividends$per share)3.73754.25004.5875201820192020*$6$8$10$12$14$0$1$2$3$4$5Normalized Diluted EPSDividends per share*2020 results are based on a 53 week period.MANAGEMENTS DISCUSSION AND ANALYSISCANADIAN TIRE CORPORATION 2020 REPORT TO SHAREHOLDERS 5 of 1344.0Events that Impacted the Company th

97、is YearDuring 2020,the Coronavirus(“COVID-19”)pandemic had an impact on the Canadian and global economies and on consumer purchasing behaviours.These impacts,combined with the temporary closure of certain stores and the introduction of new safety protocols,significantly affected the Companys operati

98、ons and financial performance in the year.In response to the COVID-19 pandemic,the Company implemented a number of comprehensive operational and risk management strategies to support its businesses and to protect the health and well-being of its employees,customers,Dealers and franchisees through th

99、e pandemic.These strategies also allowed the Company to continue to provide Canadians and their communities with essential products and services and demonstrated the resilience of the Companys business model.The issuance of COVID-19 related government guidelines and restrictions,as well as the Compa

100、nys focus on the health and well-being of its employees,customers,Dealers and franchisees,impacted the Companys operations in several areas.In the second quarter,203 Canadian Tire Retail stores in Ontario were temporarily closed for five weeks and,for the majority of the quarter,all SportChek and Ma

101、rks were also temporarily closed.With the resurgence of COVID-19 in the second half of the fourth quarter,stores across the Retail banners in Manitoba,Ontario,and Quebec were subject to further restrictions and store closures.These restrictions and closures in the fourth quarter did not have a mater

102、ial impact to the Companys financial results.Throughout this time,the Company continued to serve customers online,offering curbside pickup and deliver-to-home across its Retail banners.Helly Hansen operations were also impacted by store closures and restrictions throughout 2020,which affected its st

103、ores as well as the stores and operations of its wholesale customers.Reduced store hours and customer capacity limitations also impacted all banners.The Company introduced enhanced cleaning protocols and actions to support physical distancing,including the installation of plexiglass and floor decals

104、.The ability of Financial Services to acquire new credit card customers was affected by the temporary store closures and reduced store hours throughout the year.From March 22,2020 to mid-August 2020 the Company and its Dealers implemented a special support payment for all active front-line employees

105、 in recognition of their commitment to serve their communities during the pandemic.On April 9,2020,the Company launched a$5 million Canadian Tire COVID-19 Response Fund to help Canadians and their communities respond to the pandemic.The COVID-19 pandemic has also had a significant impact on communit

106、y sports and recreation.During the year,with the Companys support,Jumpstart launched the$8 million Jumpstart Sport Relief Fund-a fund developed to help sport and recreation organizations deliver programming.In December 2020,CTC donated$12 million of funding to the Jumpstart Sport Relief Fund to prov

107、ide further support of this initiative in 2021.Impact on CustomersThe Companys multi-category assortment continues to provide Canadians with the things they need for the jobs and joys of life in Canada.Throughout the year,the Company saw a significant shift in customer shopping behaviour by increasi

108、ngly moving to online purchasing.For the full year,eCommerce sales were approximately$1.6 billion and penetration rates were more than double 2019 rates for all banners.The Companys ongoing ability to satisfy its customers shopping preferences and achieve its operational objectives depends upon its

109、ability to maintain key supply chain operations,distribution,logistics and transportation arrangements.These arrangements were significantly challenged in 2020 by the COVID-19 pandemic as a result of unprecedented customer demand for certain products.The Companys supply chain processes and technolog

110、ies provide visibility across the end-to-end supply chain network and support the Companys ability to proactively address potential disruptions as a result of consumer demand arising from the MANAGEMENTS DISCUSSION AND ANALYSIS6 of 134 CANADIAN TIRE CORPORATION 2020 REPORT TO SHAREHOLDERSCOVID-19 pa

111、ndemic.Key strategic relationships with vendors and the ability to utilize inventory across banners aided the Companys ability to address customer demand during the year.The Financial Services segment continued to support its cardholders throughout the COVID-19 pandemic by implementing various relie

112、f programs to meet cardholders needs.Impact on Financial PerformanceDuring the first three quarters of the year,Retail segment income before taxes was negatively impacted by$92.7 million,driven primarily by:(1)$59.5 million of additional selling,general and administrative expenses(“SG&A”)attributabl

113、e to the Companys COVID-19 efforts in the second and third quarters of 2020,including special support payments for active front-line employees which ended in August and enhanced safety protocols for employees and customers;and(2)$27.9 million of impairment costs recognized in other expenses(income)d

114、uring the second quarter of 2020 related to the impact that the macro-economic environment is expected to have on the timing of certain growth strategies related to the Companys Musto sailing brand and on future cash flows of select SportChek stores.While the Company continues to incur costs in rela

115、tion to enhanced safety protocols,no material non-recurring costs were incurred in the fourth quarter.The Company also saw a reduction in customer spending in the Financial Services segment during the year due to the COVID-19 pandemic and experienced lower account acquisition as a result of restrict

116、ions in the Companys store network.In the first quarter,at the onset of the pandemic,the Company recorded an expense of$44.9 million relating to an increase in the expected credit loss(“ECL”)allowance resulting from assumption changes relating to COVID-19.Over the balance of the year,the Company con

117、tinued to assess and update the underlying assumptions in the ECL allowance in the normal course of business,including with regards to the impacts of the COVID-19 pandemic.On a full year basis,the Company has estimated that the above COVID-19 related net expenses have negatively impacted consolidate

118、d results by$137.6 million,or$1.60 in earnings per share.Given the considerable ongoing uncertainty regarding the duration and severity of COVID-19 and its impact on the economy,consumer demand,and operations,the Company withdrew its financial aspirations previously provided in the Companys 2019 Rep

119、ort to Shareholders and does not believe it is appropriate at this time to provide forward-looking information.Impact on LiquidityThe heightened uncertainty arising from COVID-19 and its impact on the economic environment and capital markets in 2020 led to an increased emphasis within the Company on

120、 liquidity and capital management.Management believes the Companys multi-category assortment,healthy balance sheet,Triangle Rewards program,credit card value proposition,access to multiple sources of liquidity for all its businesses,and the essential role it plays in communities across Canada have p

121、ositioned the Company well to manage through these unprecedented times.During the year,the Company took appropriate actions to ensure a strong ongoing cash position and financial flexibility,including reducing operating costs at head office and corporate stores,reducing discretionary capital expendi

122、tures and working capital requirements across the Company,and pausing its share repurchases other than for anti-dilutive purposes.The Company is in a strong liquidity position with the ability to access capital from multiple sources as outlined in Section 6.5 of this MD&A.To strengthen this position

123、,in 2020,the Company secured additional credit by entering into a committed bank credit facility for$710 million with five Canadian financial institutions.This facility is available until June 30,2022.The Company ended the year with a strong balance sheet,no outstanding borrowing on any of its Canad

124、ian credit facilities and was in compliance with all of its financial covenants.On March 31,2020,related to the COVID-19 pandemic,S&P downgraded the Companys long-term issuer rating and medium-term notes rating from“BBB+”to“BBB”and placed a“Negative”outlook on the Companys long-term issuer rating.On

125、 April 7,2020,related to the COVID-19 pandemic,DBRS Morningstar placed the Companys long-term issuer rating and medium-term notes rating to“under review with negative implications”and on June 5,MANAGEMENTS DISCUSSION AND ANALYSISCANADIAN TIRE CORPORATION 2020 REPORT TO SHAREHOLDERS 7 of 1342020 down

126、graded the Companys long-term issuer rating and medium-term notes rating from“BBB(high)”to“BBB”,with“Stable”trends.5.0Financial Performance5.1 Consolidated Financial Performance The fourth quarter and full year 2020 results include one additional week of retail operations compared to the fourth quar

127、ter and full year 2019 results.5.1.1 Consolidated Financial Results(C$in millions,except where noted)Q4 2020Q4 2019Change20202019ChangeRetail sales1$5,317.2$4,838.2 9.9%$16,864.4$15,879.0 6.2%Revenue$4,874.5$4,316.7 12.9%$14,871.0$14,534.4 2.3%Gross margin dollars$1,849.9$1,503.0 23.1%$5,076.6$4,873

128、.8 4.2%Gross margin as a%of revenue 37.9%34.8%313 bps 34.1%33.5%60 bpsOther expense(income)$18.9$2.0 NM2$48.7$(13.4)NM2Selling,general and administrative expenses 1,053.6 943.7 11.6%3,599.3 3,437.5 4.7%Net finance costs 58.8 66.0 (11.0)%256.5 266.8 (3.9)%Income before income taxes$718.6$491.3 46.3%$

129、1,172.1$1,182.9 (0.9)%Income taxes expense 196.8 125.4 57.0%309.5 288.1 7.4%Effective tax rate 27.4%25.5%26.4%24.4%Net income$521.8$365.9 42.6%$862.6$894.8 (3.6)%Net income attributable to:Shareholders of Canadian Tire Corporation$488.8$334.1 46.3%$751.8$778.4 (3.4)%Non-controlling interests 33.0 31

130、.8 3.6%110.8 116.4 (4.8)%$521.8$365.9 42.6%$862.6$894.8 (3.6)%Basic EPS$8.04$5.42 48.2%$12.35$12.60 (2.0)%Diluted EPS$7.97$5.42 47.0%$12.31$12.58 (2.2)%Weighted average number of Common and Class A Non-Voting Shares outstanding:Basic60,807,577 61,592,583NM260,896,809 61,794,565NM2Diluted61,358,623 6

131、1,669,335NM261,090,111 61,861,486NM21 Retail sales is a key operating performance measure.Refer to section 9.3.1 in this MD&A for additional information.2 Not meaningful.Non-Controlling InterestsThe following table outlines the net income attributable to the Companys non-controlling interests.For ad

132、ditional details,refer to Note 15 to the Companys 2019 consolidated financial statements.(C$in millions)Q4 2020Q4 201920202019Financial ServicesNon-controlling interest percentage 20.0%(2019 20.0%)$16.7$15.9$47.2$61.7 CT REITNon-controlling interest percentage 30.8%(2019 30.6%)15.7 15.2 62.4 51.3 Re

133、tail segment subsidiaryNon-controlling interest percentage 50.0%(2019 50.0%)0.6 0.7 1.2 3.4 Net income attributable to non-controlling interests$33.0$31.8$110.8$116.4 MANAGEMENTS DISCUSSION AND ANALYSIS8 of 134 CANADIAN TIRE CORPORATION 2020 REPORT TO SHAREHOLDERSOperational Efficiency programDuring

134、 2020,the Company continued to focus on executing its Operational Efficiency program and related initiatives and remains committed and on track to deliver its targeted$200+million in annualized savings by 2022.As part of this program,and,as the Company continues to evolve and grow its brand,a decisi

135、on was made to close all 18 National Sports retail stores and eCommerce channel to eliminate duplication across banners.The costs associated with these closures included$9.5 million in inventory write-offs recorded in cost of producing revenue and$17.2 million in asset write-offs recorded in other e

136、xpenses(income).The items were considered normalizing items as described in the next section.Normalizing ItemsThe results of operations in 2020 and 2019 include costs related to the Companys Operational Efficiency program and Party City acquisition-related costs which were considered as normalizing

137、items.The Companys Operational Efficiency program includes costs in relation to severance,consulting,IT-project related costs,and the costs associated with the closure of the National Sports banner as described above.(C$in millions)Q4 2020Q4 201920202019Operating Efficiency program$35.3$6.5$56.7$34.

138、4 Party City:Acquisition-related costs 2.3 Fair value adjustment for inventories acquired1 2.4 2.4 Total$35.3$8.9$56.7$39.1 1 Relates to the fair value adjustment to Party Citys inventory recorded as part of the acquisition on October 1,2019.Normalized results are non-GAAP measures and do not have s

139、tandardized meanings under IFRS and,therefore,may not be comparable to similar terms used by other companies.For further information and a reconciliation to GAAP measures,refer to section 9.3.2 in this MD&A.Selected Normalized Metrics Consolidated(C$in millions,except where noted)Q4 2020Normalizing

140、Items1Normalized Q4 2020 Q4 2019Normalizing Items1Normalized Q4 2019 Change2Revenue$4,874.5$4,874.5$4,316.7$4,316.7 12.9%Cost of producing revenue 3,024.6 (9.5)3,015.1 2,813.7 (2.4)2,811.3 7.2%Gross margin$1,849.9$9.5$1,859.4$1,503.0$2.4$1,505.4 23.5%Gross margin rate 37.9%20 bps 38.1%34.8%6 bps 34.

141、9%327 bpsOther expense$18.9$(17.2)$1.7$2.0$(1.3)$0.7 142.9%Selling,general and administrative expenses 1,053.6 (8.6)1,045.0 943.7 (5.2)938.5 11.3%Net finance costs 58.8 58.8 66.0 66.0 (11.0)%Income before income taxes$718.6$35.3$753.9$491.3$8.9$500.2 50.7%Income tax expense 196.8 8.7 205.5 125.4 2.4

142、 127.8 60.8%Net income$521.8$26.6$548.4$365.9$6.5$372.4 47.3%Net income attributable to shareholders of CTC 488.8 26.6 515.4 334.1 6.5 340.6 51.3%Diluted EPS$7.97$0.43$8.40$5.42$0.11$5.53 51.9%1 Refer to Normalizing Items table in this section for more details.2 Change is between normalized results.

143、MANAGEMENTS DISCUSSION AND ANALYSISCANADIAN TIRE CORPORATION 2020 REPORT TO SHAREHOLDERS 9 of 134(C$in millions,except where noted)2020Normalizing Items1Normalized 2020 2019Normalizing Items1Normalized 2019 Change2Revenue$14,871.0$14,871.0$14,534.4$14,534.4 2.3%Cost of producing revenue 9,794.4 (9.5

144、)9,784.9 9,660.6 (2.4)9,658.2 1.3%Gross margin$5,076.6$9.5$5,086.1$4,873.8$2.4$4,876.2 4.3%Gross margin rate 34.1%6 bps 34.2%33.5%2 bps 33.5%64 bpsOther expense(income)$48.7$(17.2)$31.5$(13.4)$(1.3)$(14.7)NM3Selling,general and administrative expenses 3,599.3 (30.0)3,569.3 3,437.5 (35.4)3,402.1 4.9%

145、Net finance costs 256.5 256.5 266.8 266.8 (3.9)%Income before income taxes$1,172.1$56.7$1,228.8$1,182.9$39.1$1,222.0 0.6%Income tax expense 309.5 14.4 323.9 288.1 10.6 298.7 8.4%Net income$862.6$42.3$904.9$894.8$28.5$923.3 (2.0)%Net income attributable to shareholders of CTC 751.8 42.3 794.1 778.4 2

146、8.5 806.9 (1.6)%Diluted EPS$12.31$0.69$13.00$12.58$0.46$13.04 (0.3)%1 Refer to Normalizing Items table in this section for more details.2 Change is between normalized results.3 Not meaningful.MANAGEMENTS DISCUSSION AND ANALYSIS10 of 134 CANADIAN TIRE CORPORATION 2020 REPORT TO SHAREHOLDERSConsolidat

147、ed Results CommentaryDiluted EPS for the fourth quarter of 2020 increased significantly,driven by shipments to Dealers at Canadian Tire and strong sales at Marks.The Retail segment normalized income before taxes increased by 70.1 percent,with Retail revenue growing by 20.1 percent and normalized gro

148、ss margin rate(excluding Petroleum)increasing by 168 bps,led by strong performance at Canadian Tire.The Financial Services segment income before taxes grew by 5.6 percent,driven mainly by a$27.3 million reduction in the allowance for loans receivable due largely to a year over year decline in receiv

149、ables.Despite lower growth in cardholder sales and receivables volume,Financial Services aging metrics continued to be favourable.Strong performance in the Retail segment in the last half of 2020 resulted in normalized diluted EPS of$13.00 for the full year 2020,only slightly lower than 2019,despite

150、 the impact of the COVID-19 pandemic on the operations and financial results of the Company in the first half of the year.As a result of COVID-19,consolidated earnings and EPS were impacted by a number of items in 2020.Refer to section 4.0 in this MD&A for further information regarding the events th

151、at impacted the Company this year.The fourth quarter and full year 2020 results include one additional week of retail operations compared to the fourth quarter and full year 2019 results.Q4 2020Full YearConsol-idated Results SummarypDiluted EPS:$2.55 per share,or 47.0%qDiluted EPS:$0.27 per share,or

152、 2.2%Consolidated revenue increased$557.8 million,or 12.9 percent.Excluding Petroleum,consolidated revenue increased 17.4 percent mainly attributable to exceptional revenue growth in the Retail segment,partially offset by lower revenue in the Financial Services segment.Retail segment revenue increas

153、ed mainly due to strong growth at Canadian Tire driven primarily by higher shipments and the Companys cost and margin-sharing arrangement with its Dealers,an increase in revenue at Marks and Helly Hansen,and one additional week of retail operations,which were partially offset by lower revenue at Spo

154、rtChek.The revenue decline in the Financial Services segment was mainly attributable to lower credit charges and lower card sales revenue.Consolidated revenue increased$336.6 million,or 2.3 percent.Excluding Petroleum,consolidated revenue increased 6.9 percent driven by the exceptional revenue growt

155、h in the Retail segment in the second half of the year partially offset by a decline in revenue in the Financial Services segment.Retail segment revenue increase was driven by strong growth in Canadian Tire,the inclusion of Party City,and one additional week of retail operations partially offset by

156、temporary store closures during the second quarter.The revenue decline in the Financial Services segment was mainly attributable to lower card sales revenue and lower credit charges.Consolidated gross margin dollars increased$346.9 million,or 23.1 percent.Normalized gross margin increased by$354.0 m

157、illion,or 23.5 percent,which is primarily attributable to the Retail segment driven primarily by growth at Canadian Tire as well as Marks,Helly Hansen and one additional week of retail operations.Gross margin increased in the Financial Services segment attributable mainly to a decrease in ECL allowa

158、nce compared to prior year.Consolidated gross margin dollars increased$202.8 million,or 4.2 percent.Normalized gross margin increased by$209.9 million,or 4.3 percent,which is primarily attributable to the Retail segment driven by strong growth at Canadian Tire,inclusion of Party City,and,one additio

159、nal week of retail operations during the year,partially offset by temporary store closures during the second quarter.The Financial Services segment gross margin declined due to lower revenue and an increase in the ECL allowance compared to prior year.Other expense increased by$16.9 million primarily

160、 attributable to asset write-offs relating to the Operational Efficiency program initiatives during the quarter.Normalized other expense was relatively flat compared to prior year with an increase of$1.0 million.Other income decreased by$62.1 million mainly related to the Retail segment,mainly attri

161、butable to asset write-offs related to the Operational Efficiency program initiatives in fourth quarter of 2020,an impairment charge of$27.9 million in the second quarter of 2020,higher real estate gains related to property disposition incurred in the prior year,and,higher non-operating foreign exch

162、ange losses at Helly Hansen.MANAGEMENTS DISCUSSION AND ANALYSISCANADIAN TIRE CORPORATION 2020 REPORT TO SHAREHOLDERS 11 of 134Consolidated Results Commentary(continued)Q4 2020Full YearConsolidated SG&A expenses increased by$109.9 million,or 11.6 percent.Normalized consolidated SG&A increased$106.5 m

163、illion,or 11.3 percent.The increase was mainly attributable to an increase in personnel costs driven by one additional week of retail operations in the quarter and the impact of higher shipment volumes on supply chain costs,an increase in IT-related costs,marketing spend and other expenses which inc

164、lude a donation made to Jumpstart in the quarter,partially offset by lower variable compensation expenses and Operational Efficiency program savings compared to the prior year.Consolidated SG&A expenses increased by$161.8 million or 4.7 percent.Normalized consolidated SG&A expenses increased by$167.

165、2 million,or 4.9 percent.This increase was mainly attributable to higher SG&A expenses in the fourth quarter of 2020 and included net costs in relation to the events that impacted the year.Net finance costs during the quarter decreased primarily due to lower medium-term and short-term funding volume

166、 and rates compared to the prior year.Net finance costs were lower compared to the prior year mainly attributable to lower medium-term and short-term funding volume and rates which was partially offset by a one-time benefit of$6.9 million relating to interest income on tax settlement in the prior ye

167、ar.Income taxes for the quarter was an expense of$196.8 million,compared to$125.4 million in the prior year.The increase in income tax expense was primarily due to higher income and higher non-deductible stock-option expense in the quarter.Income taxes for the period was$309.5 million compared to$28

168、8.1 million,an increase of$21.4 million compared to the prior year due to higher non-deductible stock-option expense,favourable tax settlement in the prior year which was partially offset by higher non-controlling interest relating to CT REIT.Normalized diluted EPS for the quarter was$8.40,an increa

169、se of$2.87,or 51.9 percent from prior year.The increase in earnings was primarily driven by strong growth in the Retail segment driven by Canadian Tire and one additional week of retail operations during the quarter,partially offset by,lower earnings in the Financial Services segment and higher inco

170、me taxes.Normalized diluted EPS was$13.00,a decrease of$0.04,or 0.3 percent from prior year.Earnings were relatively flat for the full year as the growth in the Retail segment in the second half of the year was offset by temporary store closures in the Retail segment banners during the first half of

171、 the year,and,higher income taxes.Diluted EPS and Normalized diluted EPS was negatively impacted by$1.60,due to the net expenses relating to events that impacted the Company this year.Refer to Section 4.0 of this MD&A for further details on the events that impacted the Company this year.5.1.2 Consol

172、idated Key Operating Performance Measures,Excluding Petroleum Key operating performance measures do not have standard meanings under IFRS and,therefore,may not be comparable to similar terms used by other companies.Refer to section 9.3.1 in this MD&A for definitions and further information.(C$in mil

173、lions)increase/(decrease)Q4 2020Q4 2019ChangeNormalized1 SG&A expenses adjusted for rent expense2(excluding depreciation and amortization3)and excluding Petroleum,as a percentage of revenue4,5 21.4%22.4%(102)bpsNormalized1 EBITDA adjusted for rent expense2 and excluding Petroleum,as a percentage of

174、revenue4,5 18.7%15.7%299 bps1 Refer to section 5.1.1 for a description of normalizing items.2 Adjustments to SG&A include an addition of depreciation on right-of-use assets and net finance costs relating to lease liability as an estimate for rent expense.3 Depreciation and amortization excluded amou

175、nted to$100.3 million(2019-$100.7 million).4 Revenue excludes Petroleum revenue,EBITDA excludes Petroleum gross margin.5 Normalized SG&A adjusted for rent expense and normalized EBITDA adjusted for rent expense are non-GAAP measures;refer to section 9.3.2 in this MD&A for a reconciliation of these n

176、on-GAAP measures to the related GAAP measure and additional information.MANAGEMENTS DISCUSSION AND ANALYSIS12 of 134 CANADIAN TIRE CORPORATION 2020 REPORT TO SHAREHOLDERS(C$in millions)increase/(decrease)20202019ChangeNormalized1 SG&A expenses adjusted for rent expense2(excluding depreciation and am

177、ortization3)and excluding Petroleum,as a percentage of revenue4,5 24.1%24.7%(53 bps)Normalized1 EBITDA adjusted for rent expense2 and excluding Petroleum,as a percentage of revenue4,5 12.1%12.8%(67)bps1 Refer to section 5.1.1 for a description of normalizing items.2 Adjustments to SG&A include an ad

178、dition of depreciation on right-of-use assets and net finance costs relating to lease liability as an estimate for rent expense.3 Depreciation and amortization excluded amounted to$399.8 million(2019-$385.1 million).4 Revenue excludes Petroleum revenue,Earnings before Interest,Tax,Depreciation and A

179、mortization(“EBITDA”)excludes Petroleum gross margin.5 Normalized SG&A adjusted for rent expense and normalized EBITDA adjusted for rent expense are non-GAAP measures;refer to section 9.3.2 in this MD&A for a reconciliation of these non-GAAP measures to the related GAAP measure and additional inform

180、ation.Consolidated Key Operating Performance Measures,Excluding Petroleum,CommentaryAs a result of COVID-19,key operating performance measures,excluding Petroleum,were impacted by a number of items.Refer to section 4.0 in this MD&A for further information regarding the events that impacted the Compa

181、ny this year.Q4 2020Full YearNormalized SG&A expenses adjusted for rent expense(excluding depreciation and amortization)and excluding Petroleum as a percentage of Revenueq102 bpsq53 bpsNormalized SG&A expenses adjusted for rent(excluding depreciation and amortization)and Petroleum,as a percentage of

182、 revenue,decreased 102 bps.The decrease in rate was mainly attributable to the growth in revenue,excluding Petroleum of$671.3 million,or 17.4 percent compared to prior year driven by the Retail segment attributable mainly to Canadian Tire and Marks.The rate of growth in revenue outpaced the increase

183、 in SG&A which benefited from lower variable compensation expenses and Operational Efficiency program savings compared to the prior year.Normalized SG&A expenses adjusted for rent(excluding depreciation and amortization)and Petroleum,as a percentage of revenue,decreased 53 bps.The decrease in rate w

184、as mainly attributable to the increase in revenue,excluding Petroleum compared to prior year driven by the Retail segment.The increase in revenue was partially offset by an increase in SG&A,which included net costs in relation to events that impacted the Company during the year as outlined in sectio

185、n 4.0 of this MD&A.Normalized EBITDA adjusted for rent expense and excluding Petroleum,as a percentage of Revenuep299 bpsq67 bpsNormalized EBITDA adjusted for rent expense as a percentage of revenue,excluding Petroleum,increased 299 bps.The increase in rate was mainly driven by the increase in Retai

186、l segment revenue attributable mainly to strong growth in Canadian Tire and Marks.The rate also benefited from lower variable compensation expenses and Operational Efficiency program savings in the Retail segment which was partially offset by lower earnings in Financial Services segment.Normalized E

187、BITDA adjusted for rent expense as a percentage of revenue,excluding Petroleum decreased 67 bps.The decrease in rate was mainly attributable to the increase in SG&A which included net costs of$137.6 million relating to events that impacted the Company this year and lower earnings from the Financial

188、Services segment compared to last year.These decreases were partially offset by an increase in earnings in the Retail segment driven by strong growth at Canadian Tire.5.1.3 Seasonal Trend Analysis The following table shows the consolidated financial performance of the Company by quarter for the last

189、 two years.The quarterly trend could be impacted by non-operational items,such as those items referenced in section 4.0 of this MD&A.(C$in millions,except per share amounts)Q4 20201Q3 2020Q2 2020Q1 2020Q4 2019Q3 2019Q2 2019Q1 2019Revenue$4,874.5$3,986.4$3,161.8$2,848.3$4,316.7$3,636.7$3,686.6$2,894.

190、4 Net income 521.8 326.3 2.3 12.2 365.9 227.7 203.8 97.4 Normalized net income2 548.4 331.9 6.9 17.7 372.4 243.8 209.7 97.4 Diluted EPS 7.97 4.84 (0.33)(0.22)5.42 3.20 2.87 1.12 Normalized diluted EPS2 8.40 4.93 (0.25)(0.13)5.53 3.46 2.97 1.12 1 The fourth quarter of 2020 results include one additio

191、nal week of retail operations compared to the fourth quarter of 2019.2 Refer to section 5.1.1 for a description of normalizing items.MANAGEMENTS DISCUSSION AND ANALYSISCANADIAN TIRE CORPORATION 2020 REPORT TO SHAREHOLDERS 13 of 1345.2 Retail Segment Performance The fourth quarter and full year 2020

192、results include one additional week of retail operations compared to the fourth quarter and full year 2019 results except for comparable sales growth and comparable gasoline volume growth.5.2.1 Retail Segment Financial Results(C$in millions)Q4 2020Q4 2019Change20202019ChangeRetail sales1$5,317.2$4,8

193、38.2 9.9%$16,864.4$15,879.0 6.2%Revenue$4,582.2$3,989.2 14.9%$13,620.0$13,209.8 3.1%Gross margin dollars$1,630.3$1,304.2 25.0%$4,358.7$4,075.8 6.9%Gross margin as a%of revenue 35.6%32.7%289 bps 32.0%30.9%115 bpsOther(income)$(10.1)$(28.3)(64.0%)$(70.8)$(138.8)(49.0)%Selling,general and administrativ

194、e expenses 1,011.9 923.0 9.7%3,471.0 3,326.6 4.3%Net finance costs 50.6 57.9 (12.7%)220.2 240.2 (8.3)%Income before income taxes$577.9$351.6 64.4%$738.3$647.8 14.0%1 Retail sales is a key operating performance measure.Refer to section 9.3.1 in this MD&A for additional information.Normalized results

195、are non-GAAP measures and do not have standardized meanings under IFRS and,therefore,may not be comparable to similar terms used by other companies.For further information and a reconciliation to GAAP measures,refer to section 9.3.2 in this MD&A.Selected Normalized Metrics Retail(C$in millions,excep

196、t where noted)Q4 2020Normalizing Items1Normalized Q4 2020 Q4 2019Normalizing Items1Normalized Q4 2019 Change2Revenue$4,582.2$4,582.2$3,989.2$3,989.2 14.9%Cost of producing revenue 2,951.9 (9.5)2,942.4 2,685.0 (2.4)2,682.6 9.7%Gross margin$1,630.3$9.5$1,639.8$1,304.2$2.4$1,306.6 25.5%Gross margin rat

197、e 35.6%20 bps 35.8%32.7%6 bps 32.8%303 bpsOther(income)$(10.1)$(17.2)$(27.3)$(28.3)$(1.3)$(29.6)(7.8)%Selling,general and administrative expenses 1,011.9 (8.6)1,003.3 923.0 (5.2)917.8 9.3%Net finance costs 50.6 50.6 57.9 57.9 (12.7)%Income before income taxes$577.9$35.3$613.2$351.6$8.9$360.5 70.1%1

198、Refer to section 5.1.1 for a description of normalizing items.2 Change is between normalized results.(C$in millions,except where noted)2020Normalizing Items1Normalized 2020 2019Normalizing Items1Normalized 2019 Change2Revenue$13,620.0$13,620.0$13,209.8$13,209.8 3.1%Cost of producing revenue 9,261.3

199、(9.5)9,251.8 9,134.0 (2.4)9,131.6 1.3%Gross margin$4,358.7$9.5$4,368.2$4,075.8$2.4$4,078.2 7.1%Gross margin rate 32.0%7 bps 32.1%30.9%2 bps 30.9%120 bpsOther(income)$(70.8)$(17.2)$(88.0)$(138.8)$(1.3)$(140.1)(37.2%)Selling,general and administrative expenses 3,471.0 (30.0)3,441.0 3,326.6 (35.4)3,291

200、.2 4.6%Net finance costs 220.2 220.2 240.2 240.2 (8.3%)Income before income taxes$738.3$56.7$795.0$647.8$39.1$686.9 15.7%1 Refer to section 5.1.1 for a description of normalizing items.2 Change is between normalized results.MANAGEMENTS DISCUSSION AND ANALYSIS14 of 134 CANADIAN TIRE CORPORATION 2020

201、REPORT TO SHAREHOLDERS5.2.2 Retail Segment Key Operating Performance Measures Key operating performance measures do not have standard meanings under IFRS and,therefore,may not be comparable to similar terms used by other companies.Refer to section 9.3.1 in this MD&A for further information.Due to th

202、e pervasive temporary store closures across all banners in the first half of the year,Management believes that comparable sales year to date is not a meaningful metric.Due to the fact that the Companys sales per square foot metric utilizes comparable sales,Management believes that the metric is also

203、 materially impacted by store closures during the year.The fourth quarter and full year 2020 results include one additional week of retail operations compared to the fourth quarter and full year 2019 results,except for comparable sales growth and comparable gasoline volume growth,which are calculate

204、d on a comparable 13 week and 52 week period for the quarter and full year respectively.(Year-over-year percentage change,C$in millions,except as noted)Q4 2020Q4 2019Change20202019ChangeRevenue1$4,582.2$3,989.2 14.9%$13,620.0$13,209.8 3.1%Revenue,excluding Petroleum 4,227.3 3,520.8 20.1%12,261.3 11,

205、315.3 8.4%Store count 1,741 1,746 Retail square footage(in millions)34.5 34.6 Retail sales growth 9.9%4.3%6.2%2.5%Retail sales growth,excluding Petroleum 13.6%5.1%11.0%3.9%Consolidated comparable sales growth2 9.5%3.9%NM12 3.6%Retail ROIC3 9.4%9.0%n/an/aRevenue1,4$2,864.0$2,233.7 28.2%$8,639.5$7,418

206、.0 16.5%Store count5 667 667 Retail square footage(in millions)23.4 23.5 Sales per square foot6$501$441 13.6%n/an/aRetail sales growth7 17.1%6.6%17.6%4.5%Comparable sales growth2 12.8%4.8%NM12 3.8%Revenue1$604.8$619.4 (2.3)%$1,814.8$2,036.3 (10.9)%Store count 397 402 Retail square footage(in million

207、s)7.5 7.5 Sales per square foot8$277$305 (9.0)%n/an/aRetail sales growth9 0.5%1.3%(8.5)%2.6%Comparable sales growth2(3.0)%2.0%NM12 3.3%Revenue1,10$533.4$476.3 12.0%$1,213.2$1,274.3 (4.8)%Store count 381 380 Retail square footage(in millions)3.6 3.6 Sales per square foot8$334$360 (7.2)%n/an/aRetail s

208、ales growth11 11.9%1.5%(5.5)%2.4%Comparable sales growth2 7.6%1.8%NM12 2.5%Revenue1$196.1$176.0 11.4%$541.9$554.2 (2.2)%Revenue1$354.9$468.4 (24.2)%$1,358.7$1,894.5 (28.3)%Gas bar locations 296 297 Gross margin dollars$48.7$40.7 19.6%$170.1$168.2 1.1%Retail sales growth(18.8)%(1.1)%(23.4)%(5.7)%Gaso

209、line volume growth in litres(14.8)%(2.4)%(19.1)%(0.6)%Comparable store gasoline volume growth in litres2(18.9)%(2.7)%(20.1)%(0.5)%1 Revenue reported for Canadian Tire,SportChek,Marks and Petroleum include inter-segment revenue.Helly Hansen revenue represents external revenue only(the prior period fi

210、gures for Helly Hansen have been restated to align with current year presentation).Therefore,in aggregate,revenue for Canadian Tire,SportChek,Marks,Petroleum,and Helly Hansen will not equal total revenue for the Retail segment.2 Comparable sales growth excludes Petroleum.Canadian Tire banner include

211、s PartSource,PHL and Party City.Comparable sales growth and comparable store gasoline volume growth in litres have been calculated by aligning the 2019 fiscal calendar to match the 2020 fiscal calendar(i.e.,sales from the last week in 2020 are not included in the calculation for comparable purposes)

212、,and,includes the impact of temporary store closures in the fourth quarter of 2020.Refer to section 9.3.1 in this MD&A for additional information on comparable sales growth.3 Retail Return on Invested Capital(“ROIC”)is calculated on a rolling 12-month basis based on normalized earnings.Refer to sect

213、ion 9.3.1 in this MD&A for additional information.4 Revenue includes revenue from Canadian Tire,PartSource,PHL,Party City and Franchise Trust.5 Store count includes stores from Canadian Tire,and other banner stores of 163(2019:163 stores).Other banners include PartSource,PHL and Party City.6 Sales p

214、er square foot figures are calculated on a rolling 12-month basis,for the current year,this calculation includes the period in which the stores were temporarily closed in the Retail segment.Retail space does not include seasonal outdoor garden centres,auto service bays,or warehouse and administrativ

215、e space.7 Retail sales growth includes sales from Canadian Tire,PartSource,PHL,Party City and the labour portion of Canadian Tires auto service sales.MANAGEMENTS DISCUSSION AND ANALYSISCANADIAN TIRE CORPORATION 2020 REPORT TO SHAREHOLDERS 15 of 1348 Sales per square foot figures are calculated on a

216、rolling 12-month basis,include both corporate and franchise stores and warehouse and administrative space.For the current year,this calculation includes the period in which the stores were temporarily closed in the Retail segment.9 Retail sales growth includes sales from both corporate and franchise

217、 stores.10 Revenue includes the sale of goods to Marks franchise stores,retail sales from Marks corporate stores,Marks wholesale revenue from its commercial division,and includes ancillary revenue relating to embroidery and alteration services.11 Retail sales growth includes retail sales from Marks

218、corporate and franchise stores,but excludes ancillary revenue relating to alteration and embroidery services.12 Not meaningful.The following chart shows the Retail Segment,excluding Petroleum,retail sales and revenue performance by quarter for the last two years.The quarterly trend could be impacted

219、 by non-operational items,such as those referenced in section 4.0 of this MD&A.The fourth quarter and full year 2020 results include one additional week of retail operations compared to the fourth quarter and full year 2019.Year-over-year Retail Sales and Revenue Growth6.3%2.3%2.7%5.1%3.9%(2.5)%9.3%

220、19.1%13.6%11.0%5.2%7.8%1.2%5.1%4.8%(1.8)%(8.4)%18.6%20.1%8.4%Retail Sales,excluding PetroleumRevenue,excluding PetroleumQ1 2019Q2 2019Q3 2019Q4 20192019Q1 2020Q2 2020Q3 2020Q4 20202020MANAGEMENTS DISCUSSION AND ANALYSIS16 of 134 CANADIAN TIRE CORPORATION 2020 REPORT TO SHAREHOLDERSRetail Segment Com

221、mentaryStrong omni-channel performance in the fourth quarter of 2020 drove comparable sales growth of 9.5 percent,led by strong performance at Canadian Tire.eCommerce sales also contributed to healthy top line growth,up 142 percent compared to the prior year,with penetration rate more than double 20

222、19 levels.Retail segment normalized income before taxes was up 70.1 percent,again,driven by strong performance at Canadian Tire.Despite domestic and global store closures and other restrictions throughout the year,full year 2020 retail sales(excluding Petroleum)grew 11 percent,primarily driven by Ca

223、nadian Tire.eCommerce sales reached$1.6 billion,up$1.0 billion,or 183 percent,with Canadian Tire delivering eCommerce sales growth of over 250 percent.For 2020,Retail segment normalized income before taxes grew 15.7 percent,driven by strong top line performance.As a result of COVID-19,Retail segment

224、 earnings were impacted by a number of items in 2020.Refer to section 4.0 in this MD&A for further information regarding the events that impacted the Company in 2020.The fourth quarter and full year 2020 results include one additional week of retail operations compared to the fourth quarter and full

225、 year 2019 results except for comparable sales growth which is calculated on a comparable 13 week period.Q4 2020Full YearRetail Salesp$479.0 million or 9.9%p$985.4 million or 6.2%p9.5%in comparable sales growthThe fourth quarter results reflect exceptional omni-channel growth in retail sales across

226、all Retail banners and growth in comparable sales driven by Canadian Tire and Marks,partially offset by a decline in SportChek.Retail sales across all banners benefited from an additional week of operations in the quarter compared to prior year.Retail sales,excluding Petroleum,grew 13.6 percent or$5

227、81.7 million.All banners experienced strong growth in the digital channel,almost doubling their eCommerce penetration rates compared to prior year.Strong retail sales growth for the year was attributable to strong sales growth at Canadian Tire,which was partially offset by retail sales decline acros

228、s other retail banners that were negatively impacted by temporary store closures during the first half of the year.Excluding Petroleum,retail sales grew by 11.0 percent,or$1,503.7 million.Strong eCommerce penetration growth across all banners contributed to growth in retail sales with all banners en

229、ding the year with more than double the penetration rate compared to prior year.Retail sales across all banners also benefited from an additional week of operations in the year.Canadian Tire retail sales had strong growth of 17.1 percent.The increase in retail sales was across almost all lines of bu

230、siness,with approximately two thirds of categories generating double digit growth led by Seasonal,Kitchen,and Tools,which were partially offset by declines in automotive repairs categories as Canadians continue to commute less and tires partially driven by warmer winter.The banner saw strong growth

231、in basket size compared to prior year.Canadian Tire retail sales had strong growth of 17.6 percent despite the temporary closures during the first half of the year.Retail sales growth was driven by strength in product assortment with top performing categories of Kitchen,Tools,Back Yard Living,and,Ga

232、rdening being the largest contributors to growth,which was partially offset by declines in the automotive related categories.The inclusion of Party City and strong demand for eCommerce also contributed to the increase in retail sales.retail sales were relatively flat for the quarter,up by 0.5 percen

233、t.Strong sales in the first half of the quarter were offset by temporary store closures and restrictions in certain provinces in the second half of the quarter.eCommerce sales continued to deliver strong growth.retail sales decreased 8.5 percent primarily attributable to temporary store closures in

234、the first half of the year.Growth in eCommerce partially offset the temporary store closures with an increase in penetration rates to more than double of 2019.retail sales were higher by 11.9 percent.eCommerce sales continued to contribute to retail sales growth as did the Industrial Businesses,Acce

235、ssories,and Ladies Casualwear categories.retail sales decreased 5.5 percent primarily attributable to temporary store closures during the first half of the year.Growth in eCommerce partially offset the temporary store closures with an increase in penetration rates to more than double of 2019.Petrole

236、um retail sales decreased 18.8 percent due to lower gas volume and lower per litre gas prices compared to the prior year,partially offset by higher non-gas sales.Petroleum retail sales decreased by 23.4 percent mainly attributable to lower per litre gas prices and lower gas volume,which were partial

237、ly offset by higher non-gas sales.MANAGEMENTS DISCUSSION AND ANALYSISCANADIAN TIRE CORPORATION 2020 REPORT TO SHAREHOLDERS 17 of 134Retail Segment Commentary(continued)Q4 2020Full YearRevenuep$593.0 million or 14.9%p$410.2 million or 3.1%p20.1%excluding Petroleump8.4%excluding PetroleumThe exception

238、al growth in revenue was led by performance at Canadian Tire driven primarily by strong shipment growth and the impact of the Companys cost and margin-sharing arrangement with its Dealers.Strong retail sales growth at Marks and Helly Hansen also contributed to the growth in revenue.Revenue across al

239、l banners also benefited from an additional week of operations in the quarter.These increases were partially offset by revenue declines attributable to temporary store closures in certain provinces during the second half of the quarter.Retail revenue increased during the year driven by strong growth

240、 at Canadian Tire primarily attributable to strong shipment growth,the impact of the Companys cost and margin-sharing arrangement with its Dealers,and the inclusion of Party City.Revenue across all banners also benefited from an additional week of operations in the year.These increases were partiall

241、y offset by revenue declines at other banners that were negatively impacted by temporary store closures during the first half of the year.Gross Marginp$326.1 million or 25.0%p$282.9 million or 6.9%p289 bps in gross margin ratep115 bps in gross margin ratep25.2%excluding Petroleump7.2%excluding Petro

242、leump 153 bps in gross margin rate,excluding Petroleumq 37 bps in gross margin rate,excluding PetroleumExcluding Petroleum,gross margin dollars increased by$318.1 million,despite the inclusion of inventory write-downs related to the Operational Efficiency program,primarily driven by a strong increas

243、e in revenue attributable to the reasons described above.Excluding Petroleum,gross margin dollars increased by$281.0 million,despite the inclusion of inventory write-downs related to the Operational Efficiency program recorded in the fourth quarter of 2020,primarily driven by a strong increase in re

244、venue attributable to the reasons as described above.Normalized gross margin rate excluding Petroleum increased by 168 bps.The increase in the normalized gross margin rate was driven by Canadian Tire,attributable mainly to favourable product mix and the impact of the Companys cost and margin-sharing

245、 arrangement with its Dealers.Most other Retail banners,including Helly Hansen,also saw rate increases.Normalized gross margin rate excluding Petroleum decreased by 32 bps.The decrease in the gross margin rate was mainly attributable to unfavourable sales mix among banners and higher eCommerce sales

246、 driven by the temporary store closures,which typically have a lower margin at SportChek and Marks.These decreases were partially offset by a gross margin rate increase at Canadian Tire mainly attributable to favourable business mix and the impact of the Companys cost and margin-sharing arrangement

247、with its Dealers.MANAGEMENTS DISCUSSION AND ANALYSIS18 of 134 CANADIAN TIRE CORPORATION 2020 REPORT TO SHAREHOLDERSRetail Segment Commentary(continued)Q4 2020Full YearOther Incomeq$18.2 million or 64.0%q$68.0 million or 49.0%Other income was lower by$18.2 million primarily attributable to asset writ

248、e-offs during the quarter.Normalized other income was relatively flat compared to prior year with a decrease of$2.3 million.Other income was lower by$68 million,including asset write-offs recorded in the fourth quarter of 2020.Normalized other income decreased by$52.1 million attributable to an impa

249、irment charge of$27.9 million,a decline in real estate gains,and non-operational foreign exchange losses at Helly Hansen compared to the prior year.Selling,General&Administr-ative Expensesp$88.9 million or 9.7%p$144.4 million or 4.3%Normalized SG&A expenses increased by$85.5 million,or 9.3 percent,p

250、rimarily attributable to an increase in personnel,marketing spend,and other expenses.Personnel costs increased mainly attributable to one additional week of operations in the quarter as well as higher volume related supply chain costs.Marketing costs increased mainly due to timing of spend between q

251、uarters,and other expenses increased in part due to the donation to Jumpstart in the quarter.These increases were partially offset by lower variable compensation expenses and Operational Efficiency program savings compared to the prior year.Normalized SG&A expenses increased by$149.8 million,or 4.6

252、percent.This increase was attributable to the inclusion of Party City,one additional week of operations in the year,an increase in personnel costs relating to supply chain volume related increases,IT-related costs,other expenses and the events that impacts the Company during the year as outlined in

253、Section 4 of this MD&A.These increases were partially offset by a decrease in marketing spend and Operational Efficiency program savings compared to the prior year.Earnings Summaryp$226.3 million or 64.4%p$90.5 million or 14.0%Normalized income before income taxes increased$252.7 million.The increas

254、e in income was attributable mainly to a strong increase in gross margin partially offset by an increase in the SG&A expenses attributable to the reasons described above.Normalized income before income taxes increased by$108.1 million.The increase was primarily driven by strong growth at Canadian Ti

255、re attributable to strong shipment growth and the Companys margin sharing arrangement with its Dealers.Strong growth in eCommerce sales across all banners and an additional week of operations in the quarter compared to prior year.These increases were partially offset by the impact of store closures

256、across all banners,lower other income and higher SG&A expenses attributable to the reasons described above.MANAGEMENTS DISCUSSION AND ANALYSISCANADIAN TIRE CORPORATION 2020 REPORT TO SHAREHOLDERS 19 of 1345.2.3 Retail Segment Seasonal Trend Analysis Quarterly operating net income and revenue are aff

257、ected by seasonality.The fourth quarter typically generates the greatest contribution to revenues and earnings,and the first quarter the least.The following table shows the retail segment financial performance of the Company by quarter for the last two years.The quarterly trend could be impacted by

258、non-operational items,such as those items referenced in section 4.0 of this MD&A.(C$in millions,except per share amounts)Q4 20201Q3 2020Q2 2020Q1 2020Q4 2019Q3 2019Q2 2019Q1 2019Retail sales$5,317.2$4,414.4$4,375.7$2,757.1$4,838.2$3,904.3$4,303.7$2,832.8 Revenue 4,582.2 3,684.8 2,849.8 2,503.2 3,989

259、.2 3,296.3 3,360.3 2,564.0 Income(loss)before income taxes 577.9 326.2 (66.2)(99.6)351.6 170.6 139.1 (13.5)Normalized2(loss)income before income taxes 613.2 333.8 (59.9)(92.1)360.5 192.7 147.2 (13.5)1 The fourth quarter of 2020 results include one additional week of retail operations compared to the

260、 fourth quarter of 2019.2 Refer to section 5.1.1 for a description of normalizing items.5.3 Financial Services Segment Performance 5.3.1 Financial Services Segment Financial Results(C$in millions)Q4 2020Q4 2019Change20202019ChangeRevenue$295.3$333.0 (11.3)%$1,248.4$1,334.1 (6.4)%Gross margin dollars

261、$206.6$186.5 10.8%$645.7$737.2 (12.4)%Gross margin as a%of revenue 69.9%56.0%1,395 bps 51.7%55.3%(354)bpsOther(income)expense$(0.2)$0.5 (130.6)%$0.6$1.9 (67.0)%Selling,general and administrative expenses 91.6 76.8 19.0%319.3 310.0 3.0%Net finance(income)(0.4)(0.3)30.4%(1.5)(1.0)50.9%Income before in

262、come taxes$115.6$109.5 5.6%$327.3$426.3 (23.2)%Financial Services Segment CommentaryRefer to section 4.0 in this MD&A for further information regarding the events that impacted the Company this year.During the fourth quarter,income before income taxes increased$6.1 million resulting primarily from a

263、n increase in gross margin of$20.1 million.Gross margin increased due primarily to lower net impairment losses of$61.9 million driven by lower net write-offs and favourable changes in the allowance for loans receivable,partially offset by a$37.7 million decline in revenue as a result of an 8.8 perce

264、nt reduction in gross average accounts receivable(“GAAR”),and an increase in borrowing costs.GAAR was lower compared to the prior year due to customer payment trends and the reduction in new accounts acquired during the year.Allowance for loans receivable was reduced by$27.3 million in the quarter d

265、ue largely to a year over year decline in receivables.The credit card receivables portfolio continues to be operationally strong,having ended the quarter with an 80 bps improvement to the past due credit card receivables(“PD2+”)rate.Full year,income before income taxes declined$99.0 million resultin

266、g primarily from a 6.4 percent,or$85.7 million,decrease in revenue relative to the prior year.The decline in revenue was primarily attributable to lower credit card sales and continued strong customer payments which resulted in a year over year decline in receivables.Within the year,Financial Servic

267、es increased its allowances for loans receivable by$67.2 million primarily due to the economic uncertainty as a result of COVID-19,which was entirely offset by lower than expected insolvency volumes.Throughout the year,the portfolio remained operationally strong with historically low delinquency tre

268、nds and an 80 bps improvement to the PD2+rate.MANAGEMENTS DISCUSSION AND ANALYSIS20 of 134 CANADIAN TIRE CORPORATION 2020 REPORT TO SHAREHOLDERSFinancial Services Segment Commentary(continued)Q4 2020Full YearRevenueq$37.7 million or 11.3%q$85.7 million or 6.4%The decline in revenue was mainly attrib

269、utable to lower credit charges due to the decline in GAAR and lower insurance revenue compared to prior year.The decline in revenue was primarily attributable to lower credit card sales leading to lower credit charges,transaction fee revenue and insurance revenue.Gross Marginp10.8%in gross margin do

270、llarsq12.4%in gross margin dollarsThe increase in gross margin dollars was attributable to lower net impairment losses of$61.9M driven by lower net write-offs and a reduction in the ECL allowance,which were partially offset by a decrease in revenue and higher funding costs.The decrease in gross marg

271、in dollars was primarily attributable to a decline in revenue and higher funding costs which were partially offset by lower net impairment.SG&A Expensesp$14.8 million or 19.0%p$9.3 million or 3.0%The increase in SG&A expenses was primarily due to an increase in marketing investments related to the c

272、ontinued expansion of digital acquisition and personnel related expenses.The increase in SG&A expenses was primarily due to increases in marketing,information systems and personnel related expenses,which were partially offset by lower volume-driven operational expenses.Earnings Summaryp$6.1 million

273、or 5.6%q$99.0 million or 23.2%The increase in income before income taxes was primarily due to a higher gross margin which was partially offset by an increase in SG&A expenses compared to the prior year.Earnings were negatively impacted by a decline in gross margin partially offset by savings in volu

274、me-driven operational expenses.5.3.2 Financial Services Segment Key Operating Performance Measures Key operating performance measures do not have standard meanings under IFRS and,therefore,may not be comparable to similar terms used by other companies.Refer to section 9.3.1 in this MD&A for definiti

275、ons and further information on performance measures.(C$in millions)except where notedQ4 2020Q4 2019Change20202019ChangeCredit card sales growth1 1.1%3.3%(3.9)%5.4%GAAR$5,833.9$6,398.3 (8.8)%$6,008.6$6,253.5 (3.9)%Revenue2(as a%of GAAR)20.78%21.33%n/an/aAverage number of accounts with a balance3(thou

276、sands)2,074 2,148 (3.5)%2,060 2,112 (2.5)%Average account balance3(whole$)$2,813$2,978 (5.6)%$2,915$2,959 (1.5)%Net credit card write-off rate2,3 5.82%6.20%n/an/aPD2+3,4 1.97%2.77%n/an/aAllowance rate5 14.77%12.18%n/an/aOperating expenses2(as a%of GAAR)5.31%4.96%n/an/aReturn on receivables2 5.45%6.8

277、2%n/an/a1 Credit card sales growth excludes balance transfers.Represents year-over-year percentage change.2 Figures are calculated on a rolling 12-month basis.3 Credit card portfolio only.4 Credit card receivables more than 30 days past due as a percentage of total-ending credit card receivables.5 T

278、he allowance rate was calculated based on the total-managed portfolio of loans receivable.MANAGEMENTS DISCUSSION AND ANALYSISCANADIAN TIRE CORPORATION 2020 REPORT TO SHAREHOLDERS 21 of 134Financial Services Segment ScorecardTo evaluate the overall financial performance of the Financial Services segm

279、ent,the following scorecard provides a balanced view on how Financial Services is progressing towards achieving its strategic objectives.Q4 2020 vs Q4 2019Growthq8.8%in GAARp1.1%in credit card sales growthq3.5%in average number of accounts with a balanceq5.6%in average account balanceGAAR declined b

280、y 8.8 percent relative to last year due to a 5.6 percent decline in average account balances and a 3.5 percent decline in average active accounts.The decrease in average active accounts was primarily due to lower new credit card acquisitions as a result of temporary store closures in the first half

281、of the year and continued restrictions in the Companys store network,which impacted the ability to acquire new credit card customers throughout the year.Performanceq137 bps in return on receivablesq56 bps in revenue as a%of GAARp36 bps in OPEX as a%of GAARReturn on receivables declined by 137 bps co

282、mpared to the prior year due to both a decrease in earnings and a decline in GAAR.Lower earnings were mainly due to a decrease in revenue and higher SG&A and funding expenses.Operating expenses as a percentage of GAAR increased by 36 bps compared to the prior year due to a lower GAAR and an increase

283、 in operating expenses resulting from increased marketing costs associated with the continued development and expansion of digital acquisition and personnel-related expenses.Operational metricsq80 bps in PD2+rateq39 bps in net credit card write-off ratep14.77%allowance rate,up 259 bpsSignificant imp

284、rovement in the PD2+rate,which was a result of improved risk across the portfolio.The decrease in the net write-off rate compared to the prior year is primarily driven by a decline in insolvencies,consistent within the industry.The allowance rate increased by 259 bps to 14.77 percent largely due to

285、the year over year decline in receivables and an increase in ECL allowance as a result of Managements expectations of increases in future losses associated with the ongoing impacts of COVID-19 on the economy and the eventual end of government-backed financial stimulus programs.5.3.3 Financial Servic

286、es Segment Seasonal Trend Analysis Quarterly operating net income and revenue are affected by seasonality.In the first quarter,the Financial Services segment would typically contribute the majority of consolidated earnings.The following table shows the financial performance of the segment by quarter

287、 for the last two years.The quarterly trend could be impacted by non-operational items,such as those items referenced in section 4.0 of this MD&A.(C$in millions,except per share amounts)Q4 2020Q3 2020Q2 2020Q1 2020Q4 2019Q3 2019Q2 2019Q1 2019Revenue$295.3$301.3$309.9$341.9$333.0$343.0$329.3$328.8 In

288、come before income taxes 115.6 90.5 51.0 70.2 109.5 108.9 95.5 112.4 MANAGEMENTS DISCUSSION AND ANALYSIS22 of 134 CANADIAN TIRE CORPORATION 2020 REPORT TO SHAREHOLDERS5.4 CT REIT Segment Performance 5.4.1 CT REIT Segment Financial Results(C$in millions)Q4 2020Q4 2019Change20202019ChangeProperty reve

289、nue$126.8$123.7 2.5%$502.3$489.0 2.7%Property expense 27.8 26.8 3.7%110.8 106.1 4.4%General and administrative expense(“G&A”)3.9 3.5 8.3%12.9 14.2 (8.9)%Net finance costs 27.2 27.1 0.7%107.9 108.8 (0.8)%Fair value loss(gain)adjustment 53.9 (10.6)NM1 87.4 (47.3)NM1Income before income taxes$14.0$76.9

290、 (81.8)%$183.3$307.2 (40.3)%1 Not meaningful.The following shows the CT REIT year-over-year property revenue and AFFO performance by quarter for the last two years.The quarterly trend could be impacted by non-operational items,such as those items referenced in section 4.0 of this MD&A.Year-over-year

291、 Property Revenue and AFFO Growth4.2%2.6%3.5%3.7%3.5%4.3%2.9%1.2%2.5%2.7%8.3%6.8%11.5%10.7%9.3%7.7%6.3%3.7%4.2%5.4%Property RevenueAFFOQ1 2019Q2 2019Q3 2019Q4 20192019Q1 2020Q2 2020Q3 2020Q4 20202020MANAGEMENTS DISCUSSION AND ANALYSISCANADIAN TIRE CORPORATION 2020 REPORT TO SHAREHOLDERS 23 of 134CT

292、REIT Segment CommentaryQ4 2020Full YearProperty Revenuep$3.1 million or 2.5%p$13.3 million or 2.7%The$3.1 million increase was mainly due to contractual rent escalation,additional base rent relating to properties acquired and intensifications completed during 2020 and 2019.The$13.3 million increase

293、was mainly due to contractual rent escalation,additional base rent relating to properties acquired and intensifications completed during 2020 and 2019.Property Expensep$1.0 million or 3.7%p$4.7 million or 4.4%The increase of$1.0 million in property expense was mainly attributable to property acquisi

294、tions in the current year and higher expected credit losses.The increase of$4.7 million in property expense was mainly attributable to higher expected credit losses,gross rent abatements for some of REITs tenants and increased operating expenses related to property acquisitions completed during 2020

295、 and 2019.G&A Expensesp$0.4 million or 8.3%q$1.3 million or 8.9%G&A is overall in line with prior year.The decrease of$1.3 million in G&A was mainly driven by lower operating costs,partially offset by higher personnel compensation and higher income tax expense.Net FinanceCostp$0.1 million or 0.7%q$0

296、.9 million or 0.8%Net finance cost is overall in line with prior year.Decrease was mainly attributable to lower interest on Class C LP Units,lower capitalized interest on development projects in 2020 and lower utilization of credit facilities,partially offset by costs related to the redemption of th

297、e Series C senior unsecured debentures and increased interest expense on lease liabilities.Fair Value Adjustment on Investment Propertiesp$64.5 millionp$134.7 millionThe fair value adjustment on investment properties was a loss mainly attributable to the updated inputs and assumptions in the propert

298、y-appraisal models.This fair value adjustment is eliminated upon consolidation and,as such,has not been described in section 4.0 of this MD&A.The fair value adjustment on investment properties was a loss mainly attributable to the updated inputs and assumptions in the property appraisal models.This

299、fair value adjustment is eliminated upon consolidation and,as such,has not been described in section 4.0 of this MD&A.Earnings Summaryq$62.9 million or 81.8%q$123.9 million or 40.3%The decrease in earnings was primarily due to the fair value adjustments on investment properties partially offset by a

300、n increase in property revenue.The decrease in earnings was primarily due to the fair value adjustments on investment properties and higher property expense,partially offset by an increase in property revenue and a decrease in G&A and net finance costs.MANAGEMENTS DISCUSSION AND ANALYSIS24 of 134 CA

301、NADIAN TIRE CORPORATION 2020 REPORT TO SHAREHOLDERS5.4.2 CT REIT Segment Key Operating Performance Measures Key operating performance measures do not have standard meanings under IFRS and,therefore,may not be comparable to similar terms used by other companies.Refer to section 9.3.1 in this MD&A for

302、 definitions and further information on performance measures.(C$in millions)Q4 2020Q4 2019Change20202019ChangeNet operating income1$96.8$93.4 3.7%$381.5$368.8 3.5%Funds from operations1 68.1 66.6 2.0%270.8 261.9 3.4%Adjusted funds from operations1 59.8 57.3 4.2%236.5 224.3 5.4%1 Non-GAAP measures ex

303、clude all fair value adjustments,refer to section 9.3.2 in this MD&A for additional information.Net operating income(NOI)NOI for the quarter and full year increased by 3.7 percent and 3.5 percent respectively compared to the prior year,primarily due to the acquisition of income-producing properties

304、and Properties Under Development completed in 2020 and 2019.NOI is a non-GAAP measure.Refer to section 9.3.2 for additional information.Funds from operations(FFO)FFO for the quarter and full year increased by 2.0 percent and 3.4 percent respectively compared to the prior year,primarily due to the im

305、pact of NOI variances.FFO is a non-GAAP measure.Refer to section 9.3.2 for additional information.Adjusted funds from operations(AFFO)AFFO for the quarter and full year increased by 4.2 percent and 5.4 percent respectively compared to the prior year,primarily due to the impact of NOI variances.AFFO

306、is a non-GAAP measure.Refer to section 9.3.2 for additional information.MANAGEMENTS DISCUSSION AND ANALYSISCANADIAN TIRE CORPORATION 2020 REPORT TO SHAREHOLDERS 25 of 1346.0Balance Sheet Analysis,Liquidity,and Capital Resources6.1 Selected Balance Sheet Highlights Selected line items from the Compan

307、ys assets and liabilities,as at January 2,2021 and the year-over-year change versus December 28,2019,are noted below:Total changep$858.8 Selected Asset2020 BalanceCash and cash equivalents 1,327.2 Short-term investments 643.0 Loans receivable 5,031.8 Merchandise inventories 2,312.9 Long-term receiva

308、bles and other assets 631.9 Goodwill and intangible assets 2,372.8 Total changep$528.8 Selected Liability2020 BalanceShort-term borrowings 165.4 Loans 506.6 Long-term debt(current and long-term portion)4,266.2 Deposits(current and long term)3,509.7 Year-over-year change inassets1,121.7441.3(782.0)10

309、0.0(175.9)(41.5)Year-over-year change inliabilities(284.6)(114.9)(252.2)1,065.5AssetsCash and cash equivalentsp$1,121.7 million Increase was primarily due to cash generated from operating activities,partially offset by investing activities and financing activities.Refer to section 6.2 for further de

310、tails.Short-term investmentsp$441.3 millionShort-term investments increased as the Company ended the year with an improved liquidity position in both the Retail and Financial Services segments.Loans receivableq$782.0 millionDecrease was mainly attributable to lower credit card sales,strong customer

311、payments and lower active accounts,resulting in fewer credit card loans and lower Dealer loans.Merchandise inventoriesp$100.0 millionIncrease was mainly due to higher inventory at Canadian Tire,partially offset by a decline at SportChek,Marks and Helly Hansen.Long-term receivables and other assetsq$

312、175.9 millionDecrease was mainly attributable to timing of Dealer loans receivable.Goodwill and intangible assets q$41.5 millionDecrease during the year was mainly attributable to impairment charge in the second quarter relating to Musto brand and higher amortization of software due to reduced spend

313、ing on IT-related activities in the current year.MANAGEMENTS DISCUSSION AND ANALYSIS26 of 134 CANADIAN TIRE CORPORATION 2020 REPORT TO SHAREHOLDERSLiabilitiesShort-term borrowingsq$284.6 millionThe decrease in the short-term borrowings was mainly due to lower borrowings on the bank credit facility a

314、nd issuances of commercial paper in the Financial Services segment ending the year with an improved liquidity position.Loansq$114.9 millionDecrease in loans was mainly attributable to lower Dealer loans receivable.Long-term debt(current and long-term portion)q$252.2 millionDecrease was mainly attrib

315、utable to the repayment of the$250 million of medium-term notes.Deposits(current and long term)p$1,065.5 million Increase was mainly due to increases in High Interest Savings(“HIS”)deposits and long-term guaranteed investment certificates(“GIC”)in the Financial Services segment.6.2 Summary Cash Flow

316、s The Companys cash and cash equivalents position,net of bank indebtedness,was$1,327.2 million as at January 2,2021.Selected line items from the Companys Consolidated Statements of Cash Flows for the quarters and years ended January 2,2021 and December 28,2019 are noted in the following tables:(C$in

317、 millions)Q4 2020Q4 2019ChangeCash generated from operating activities$762.6$1,106.8$(344.2)Cash(used for)investing activities(332.5)(354.0)21.5 Cash(used for)financing activities(398.9)(744.3)345.4 Cash generated in the period$31.2$8.5$22.7(C$in millions)20202019ChangeCash generated from operating

318、activities$2,442.8$1,087.6$1,355.2 Cash(used for)investing activities(848.0)(758.7)(89.3)Cash(used for)financing activities(462.7)(604.2)141.5 Cash generated(used)in the period$1,132.1$(275.3)$1,407.4 MANAGEMENTS DISCUSSION AND ANALYSISCANADIAN TIRE CORPORATION 2020 REPORT TO SHAREHOLDERS 27 of 134Q

319、4 2020Full YearOperating activitiesq$344.2 million changep$1,355.2 million changeExcluding the impact of the change in loans receivable,operating activities used$515.8 million more in cash compared to change in the prior year due to changes within Retail segment working capital driven by higher inve

320、ntory and the timing of vendor payments.Conversely,loans receivable improved the cash balance by$171.6 million as a result of lower cardholder activity.Excluding the impact of the change in loans receivable,cash generated from operating activities increased$159.7 million primarily attributable to th

321、e timing of taxes paid in the current year.The change in loans receivable further improved the cash balance by$1,195.5 million as less cash was used in the year.Loans receivable balance declined as a result of lower cardholder activity.Investing activitiesq$21.5 million changep$89.3 million changeTh

322、e decrease in cash used for investing activities was due to lower spending on capital expenditures in the current year and the acquisition of Party City in the prior year.The decrease was partially offset by higher acquisition of short-term investments due to the Companys improved liquidity position

323、.The increase in cash used for investing activities was primarily due to higher acquisition of short-term investments due to the Companys improved liquidity position,partially offset by lower spending on capital expenditures in the current year and the impact of the acquisition of Party City in 2019

324、.Financing activitiesq$345.4 million changeq$141.5 million changeThe decrease in cash used for financing activities was primarily driven by an increase in long-term deposits due to the greater issuance of HIS deposits in the Financial Services segment.The decrease in cash used for financing activiti

325、es was primarily driven by the increase in long-term deposits due to increases in HIS deposits and long-term GICs in the Financial Services segment and the repayment of$250 million medium-term notes.Furthermore,in the prior year,additional cash was generated from net proceeds from the sale and issua

326、nce of CT REIT units amounting to$228.9 million.6.3 Capital Management The definition of capital varies from company to company,from industry to industry,and for different purposes.In the process of managing the Companys capital,Management includes the following items in its definition of capital an

327、d includes GCCT indebtedness but excludes Franchise Trust indebtedness:(C$in millions)2020%of total2019%of totalCapital componentsDeposits$1,228.0 9.3%$790.8 6.4%Short-term borrowings 165.4 1.3%450.0 3.7%Current portion of long-term debt 150.5 1.1%788.2 6.5%Long-term debt 4,115.7 31.1%3,730.2 30.3%L

328、ong-term deposits 2,281.7 17.2%1,653.4 13.4%Total debt$7,941.3 60.0%$7,412.6 60.3%Redeemable financial instrument 567.0 4.3%567.0 4.6%Share capital 597.0 4.5%588.0 4.8%Contributed surplus 2.9%2.9%Retained earnings 4,136.9 31.2%3,729.6 30.3%Total capital under management$13,245.1 100.0%$12,300.1 100.

329、0%MANAGEMENTS DISCUSSION AND ANALYSIS28 of 134 CANADIAN TIRE CORPORATION 2020 REPORT TO SHAREHOLDERSThe Companys objectives when managing capital are:ensuring sufficient liquidity to support its financial obligations and execute its operating and strategic plans;maintaining healthy liquidity reserve

330、s and access to capital;and minimizing the after-tax cost of capital while taking into consideration current and future industry,market,and economic risks and conditions.6.3.1 Canadian Tire Banks Regulatory Environment CTB manages its capital under guidelines established by the Office of the Superin

331、tendent of Financial Institutions of Canada(“OSFI”).OSFIs regulatory capital guidelines are based on the international Basel Committee on Banking Supervision framework entitled Basel III:A Global Regulatory Framework for More Resilient Banks and Banking Systems(“Basel III”),which came into effect in

332、 Canada on January 1,2013,and measures capital in relation to credit,market and operational risks.The Bank has various capital policies and procedures and controls,including an Internal Capital Adequacy Assessment Process(“ICAAP”),which it utilizes to achieve its goals and objectives.The Banks objec

333、tives include:holding sufficient capital to maintain the confidence of investors and depositors;and being an appropriately capitalized institution,as measured internally,defined by regulatory authorities and compared with the Banks peers.As at Q4 2020 and 2019,CTB complied with all regulatory capital guidelines established by OSFI,its internal targets as determined by its ICAAP and all financial c