Canadian Tire releases fourth quarter earnings - Results impacted by
challenging economy & unseasonable weather - Focused efforts in 2009 position
company well for long-term growth

    
    -   2009 full year adjusted net earnings down 12.2%, primarily due to
        increased provisions at Financial Services
    -   Strong financial management results in improved liquidity, a strong
        balance sheet and significantly reduced capital expenditures
    -   Increases in sales in growth categories in core CTR business and
        positive momentum from new format stores
    -   Investor Conference scheduled in April 2010 to discuss details of
        long-term strategy
    

TORONTO, Feb. 11 /CNW/ - Canadian Tire Corporation, Limited (CTC, CTC.a) today released its unaudited fourth quarter earnings and year-end results, and provided insight into the Company's evolving strategy for driving sustainable long-term growth. The reported results reflect a 52 week fiscal year in 2009 compared to a 53 week fiscal year in 2008, which significantly influenced sales comparisons with the prior year for the fourth quarter and full year, and accordingly sales for the same calendar week basis are also provided to facilitate comparisons (see Highlights of Top-line Performance by Business chart below).

"Despite the challenging market conditions, we achieved our number one priority of successfully managing through uncertain economic times, focused on margin performance, optimizing capital expenditures, retiring expensive debt and lowering on-hand inventory at CTR," commented Stephen Wetmore, President and CEO, Canadian Tire Corporation. "Our results were in line with our expectations for the year, and entering the fourth quarter, we were positioned to exceed our expectations had seasonal weather prevailed. However, we ended 2009 in one of our strongest financial positions in the last decade and are now focused on improving returns on retail assets and growing free cash flow."

"Our Financial Services division delivered $145.3 million of adjusted earnings before income taxes in 2009 and remains an extremely well managed business and a critical strategic asset to CTC," added Wetmore. "Credit card losses and our conservative approach to carrying excess cash at Financial Services are the primary reasons for CTC's decline in earnings in 2009. However, we have seen a stabilization in late 2009 of key credit metrics, positioning the division for growth in 2010."

For the year, a significant increase in credit card loan losses in the Financial Services business was the primary reason for CTC's 12.2% decline in adjusted net earnings. Lower retail sales in winter related categories at Canadian Tire Retail (CTR) and Mark's Work Wearhouse (Mark's) contributed to a decrease of 19.8% in adjusted net earnings in the fourth quarter compared to the same quarter in 2008.

The Company is encouraged by the positive results of its new format CTR stores with both the Smart and Small Market stores demonstrating double digit increases in key categories. Significantly lower sales of discretionary and winter related merchandise in the fourth quarter were offset, in part, by sales increases in targeted CTR growth categories, including household cleaning, kitchen and pet care.

2009 CONSOLIDATED FINANCIAL HIGHLIGHTS

Fiscal 2009 sales and earnings figures are based on a 13-week period for the fourth quarter and a 52-week period for the year compared to a 14-week period for the fourth quarter in 2008 and a 53-week period for the year in 2008. Where noted, comparisons are also provided on a same calendar week basis to facilitate comparison of the results.

    
                   ----------------------------------------------------------
    Consolidated         2009       Year-over-       2009        Year-over-
    Highlights(1):    4th quarter  year change     full year    year change
    -------------------------------------------------------------------------

    Retail sales   $  3.0 billion       (7.0)%   $ 10.0 billion       (5.6)%
    Gross operating
     revenue       $  2.4 billion       (5.8)%   $  8.7 billion       (4.8)%
    EBITDA(2)      $248.7 million      (10.1)%   $873.7 million       (2.0)%
    Adjusted
     earnings
     before income
     taxes
     (excludes
     non-operating
     gains and
     losses)(3)    $153.5 million      (20.2)%   $498.3 million      (13.2)%
    Net earnings   $ 96.2 million       (5.2)%   $335.0 million      (10.8)%
    Adjusted net
     earnings
     (excludes
     non-operating
     gains and
     losses)(3)    $104.4 million      (19.8)%   $348.0 million      (12.2)%
    Basic earnings
     per share     $         1.18       (5.4)%   $         4.10      (10.9)%
    Adjusted basic
     earnings per
     share
     (excludes
     non-operating
     gains and
     losses)(3)    $         1.28      (20.0)%   $         4.26      (12.4)%

    (1) All dollar figures in this table are rounded.
    (2) Earnings before interest, taxes, depreciation and amortization. Non-
        GAAP measure. Please refer to Section 18.0 of the 2008 Management's
        Discussion and Analysis.
    (3) Non-GAAP measure. Please refer to Section 18.0 of the 2008
        Management's Discussion and Analysis.
    

Net earnings for the fourth quarter were impacted by the non-operating items indicated below:

    
    ($ in millions)                    Q4 2009    Change      2009    Change
    -------------------------------------------------------------------------
    Net earnings                      $   96.2    (5.2)%  $  335.0   (10.8)%
    Less after-tax adjustment for:
      Former CEO retirement
       obligation                          0.0                 0.3
      Redemption of debentures            (5.2)               (4.1)
      Net effect of securitization
       activities                         (0.7)               (5.3)
      Costs associated with the sale
       of the mortgage portfolio          (3.6)               (3.6)
      Gain (loss) on disposals of
       property and equipment              1.3                (0.3)
    -------------------------------------------------------------------------
    Adjusted net earnings             $  104.4   (19.8)%  $  348.0   (12.2)%
    -------------------------------------------------------------------------
    

HIGHLIGHTS OF TOP-LINE PERFORMANCE BY BUSINESS

Retail sales and gross revenues for both the fourth quarter and full year 2009 were impacted by the additional week in the prior year comparative for our retail businesses. Below are highlights of the top-line performance by business, including retail sales compared on a same calendar week basis.

    
                                         As reported(2)   On a same calendar
                                                              week basis(3)
    (year-over-year percentage                               Q4
      change)                        Q4 2009(2)   2009(2)   2009(3)   2009(3)
    -------------------------------------------------------------------------
    CTR retail sales(1)                 (8.3)%    (2.8)%    (3.1)%    (1.1)%
    CTR gross operating revenue         (8.7)%    (2.1)%       N/A       N/A
    CTR net shipments                   (8.6)%    (2.4)%       N/A       N/A
    Mark's retail sales                 (4.1)%    (4.8)%      0.7%    (3.5)%
    Petroleum retail sales              (3.0)%   (16.8)%       N/A       N/A
    Petroleum gasoline volume           (8.1)%    (1.1)%       N/A       N/A
    Financial Services' credit card
     sales                                3.4%      2.4%       N/A       N/A
    Financial Services' gross average
     receivables                          1.8%      4.1%       N/A       N/A
    -------------------------------------------------------------------------
    (1) Includes sales from Canadian Tire stores, PartSource stores and the
        labour portion of CTR's auto service sales.
    (2) Fiscal 2009 sales and earnings figures are based on a 13-week period
        for the fourth quarter and a 52-week period for the year compared to
        14 weeks for the fourth quarter in 2008 and 53 weeks for the year in
        2008.
    (3) Selected retail sales figures have been provided on a comparable
        "same calendar week basis" for fiscal 2008, to make fiscal 2009 sales
        more comparable to the prior year
    

Business Overview

    
    CANADIAN TIRE RETAIL (CTR)(1)

                       Q4      Q4
    ($ in millions)   2009    2008(2)   Change      2009    2008(2)   Change
    -------------------------------------------------------------------------
    Retail
     sales(3)     $2,167.8  $2,364.2    (8.3)%  $7,407.2  $7,617.8    (2.8)%
    Same store
     sales(4)
     (year-over-
     year %
     change)         (9.4%)     7.3%               (4.2%)     1.8%
    Gross
     operating
     revenue       1,494.4   1,636.4    (8.7)%   5,552.2   5,669.1    (2.1)%
    Net shipments
     (year-over-
     year %
     change)         (8.6%)     3.0%               (2.4%)     3.5%
    -------------------------------------------------------------------------
    Earnings
     before income
     taxes            38.0      26.7     42.4%     261.6     249.4      4.9%
    Less
     adjustment
     for:
      Redemption
       of
       debentures     (7.7)        -                (6.1)        -
      Delayed-start
       interest rate
       swap              -     (28.7)                  -     (28.7)
      Gain on
       disposals of
       property and
       equipment(5)    2.2       3.7                 1.8       7.4
      Former CEO
       retirement
       obligation      0.0      (6.2)                0.5      (5.1)
    -------------------------------------------------------------------------
    Adjusted
     earnings
     before
     income
     taxes(6)     $   43.5  $   57.9   (24.8)%  $  265.4  $  275.8    (3.7)%
    -------------------------------------------------------------------------
    (1) Fiscal 2009 sales and earnings figures are based on a 13-week period
        for the fourth quarter and a 52-week period for the year compared to
        14 weeks for the fourth quarter in 2008 and 53 weeks for the year in
        2008.
    (2) 2008 figures have been restated for implementation, on a
        retrospective basis, of the CICA HB 3064 Goodwill and Intangible
        Assets and the amendments to CICA HB 1000 - Financial Statement
        Concepts. Please refer to Note 2 in the Consolidated Financial
        Statements.
    (3) Includes sales from Canadian Tire stores, PartSource stores and the
        labour portion of CTR's auto service sales.
    (4) Same store sales include sales from all stores that have been open
        for more than 53 weeks.
    (5) Includes fair market value adjustments and impairments on property
        and equipment.
    (6) Non-GAAP measure. Please refer to section 18.0 in the 2008
        Management's Discussion and Analysis.
    

CTR's fourth quarter retail sales decreased 8.3% and same store sales decreased 9.4% from the same quarter in 2008 due in part to an additional 53rd trading week in the 2008 comparative. When adjusted on the same calendar week basis, fourth quarter retail sales in 2009 declined a more modest 3.1% and same store sales by 4.1%.

When adjusted for the calendar differences in 2008, sales in key growth categories, including household cleaning, kitchen and pet care, significantly increased in the quarter, but were more than offset by reduced sales of electronics and other discretionary merchandise. In addition, the lack of snow, especially in Ontario and Quebec, resulted in substantially lower sales of winter tires, seasonally oriented auto parts, shovels and snowblowers in comparison with the fourth quarter of 2008. The prior year's sales also benefited from the introduction of winter tire legislation in Quebec.

Despite a decline in net shipments year over year, CTR maintained stable margins over the same quarter last year, supply chain costs were reduced and savings were realized in payroll, advertising and other operating expenses due to effective cost management and lower volumes.

Unadjusted fourth quarter earnings increased 42.4%, influenced significantly by the impact of the unwind of the delayed start interest rate swap in the prior year results. In the current year, the Company took advantage of the opportunity to retire debentures, prior to their 2010 maturity date. While the net cost associated with this redemption decision impacted the current quarter by $7.7 million, it will result in significant interest savings in future quarters.

As a result of the Company's completion of major capital intensive initiatives, including the Eastern Canada distribution centre and Concept 20/20 store rollouts, depreciation expense increased year over year, although this is expected to moderate in future years as the Company rolls out new store concepts that are less capital-intensive.

During the quarter, CTR replaced one traditional store with a Smart store, opened 25 Smart store retrofits and opened 3 incremental Small Market stores with 2 of them offering a full size Mark's, bringing the total number of stores in the network to 479.

In 2009, PartSource built 3 new stores including 1 hub store, retrofitted 1 existing store to a hub store, converted 7 franchise stores to corporate stores and closed 2 stores. As a result, there were 87 stores at the end of the year, including 10 hub stores.

    
    CANADIAN TIRE FINANCIAL SERVICES (Financial Services)

                       Q4      Q4
    ($ in millions)   2009    2008(1)   Change      2009    2008(1)   Change
    -------------------------------------------------------------------------
    Total managed
     portfolio
     (end of
     period)                                    $4,108.5  $4,120.9    (0.3)%
    Gross
     operating
     revenue      $  237.7  $  212.4     11.9%  $  909.9  $  820.4     10.9%
    -------------------------------------------------------------------------
    Earnings
     before
     income
     taxes            38.4      45.8   (16.0)%     131.9     192.0   (31.3)%
    Less
     adjustment
     for:
      Costs
       associated
       with the
       sale of the
       mortgage
       portfolio      (5.3)        -                (5.3)        -
      Gain (loss)
       on disposals
       of property
       and equipment   0.4         -                (0.3)     (0.6)
      Net effect of
       securitization
       activities(2)  (1.0)    (10.6)               (7.8)     (2.9)
    -------------------------------------------------------------------------
    Adjusted
     earnings
     before
     income
     taxes(3)     $   44.3  $   56.4   (21.5)%  $  145.3  $  195.5   (25.7)%
    -------------------------------------------------------------------------
    (1) 2008 figures have been restated for implementation, on a
        retrospective basis, of the CICA HB 3064 Goodwill and Intangible
        Assets and the amendments to CICA HB 1000 - Financial Statement
        Concepts. Please refer to Note 2 in the Consolidated Financial
        Statements.
    (2) Includes initial gain/loss on the sale of loans receivable,
        amortization of servicing liability, change in securitization reserve
        and gain/loss on reinvestment.
    (3) Non-GAAP measure. Please refer to section 18.0 in the 2008
        Management's Discussion and Analysis.
    

Financial Services' total managed portfolio of loans receivable was $4.1 billion at the end of the fourth quarter, a decrease of 0.3% from the comparable 2008 period due mainly to the sale of the mortgage portfolio in the fourth quarter, as noted below. Ending credit card receivables increased 4.7% from last year due to increased average balances reflecting selective credit limit increases, balance transfer offers and slower customer payments.

Financial Services' gross operating revenue was $237.7 million in the quarter, an 11.9% increase over the $212.4 million recorded in the prior year, reflecting an increase in yield resulting from various pricing initiatives and an increase in credit card loans receivable.

Adjusted earnings before income taxes for the fourth quarter decreased 21.5% from the comparable 2008 period primarily due to a significant increase in the loan loss provision. The return on receivables for the total managed portfolio was 3.57% versus 5.00% in 2008. This was due primarily to the increase in net write-off rate for the total managed portfolio on a rolling 12-month basis, which was 7.58% compared to 6.34% in the comparable 2008 period, and overall aging of past due credit card accounts, which deteriorated by 32 basis points from December 2008.

While the increased provisioning, reflecting the increase in consumer bankruptcies and proposals due to the softer economy, impacted the Company's results, national statistics indicate that Financial Services continues to experience a lower growth in bankruptcies than the Canadian average due to credit risk management strategies adopted over the past few years. Financial Services partially compensated for the higher provisioning by continuing to reduce its operating cost structure.

As previously announced, Financial Services sold its mortgage portfolio to National Bank during the quarter for proceeds of $162.2 million, which approximated book value. Total costs relating to the sale and wind-down of mortgage activities to the end of December 2009 were $5.3 million. Financial Services will continue to develop its retail and broker deposit business. At the end of the fourth quarter, Financial Services had approximately $2.1 billion in deposit balances, which provides a cost-effective source of financing for credit card growth.

As at January 1, 2010, Financial Services has successfully implemented the required changes to its credit granting under new government regulations for the financial services industry. The remaining changes to interest calculations and payment allocation methodology will be completed by the required date of September 1, 2010.

    
    MARK'S WORK WEARHOUSE (Mark's)(1)

                       Q4      Q4
    ($ in millions)   2009    2008(2)   Change      2009    2008(2)   Change
    -------------------------------------------------------------------------
    Retail
     sales(3)     $  391.7  $  408.4    (4.1)%  $  960.0  $1,008.5    (4.8)%
    Same store
     sales(4)       (4.9)%      3.9%              (6.0)%      0.3%
    Gross operating
     revenue(5)      340.3     355.7    (4.3)%     833.8     872.4    (4.4)%
    -------------------------------------------------------------------------
    Earnings before
     income taxes     63.1      71.2    (11.4%)     61.5      75.0   (18.0)%
    Less adjustment
     for:
      Loss on
       disposals of
       property and
       equipment      (0.4)     (0.5)               (1.2)     (0.9)
    -------------------------------------------------------------------------
    Adjusted
     earnings
     before
     income
     taxes(6)     $   63.5  $   71.7    (11.4%) $   62.7  $   75.9   (17.4)%
    -------------------------------------------------------------------------
    (1) Fiscal 2009 sales and earnings figures are based on a 13-week period
        for the fourth quarter and a 52-week period for the year compared to
        14 weeks for the fourth quarter in 2008 and 53 weeks for the year in
        2008.
    (2) 2008 figures have been restated for implementation, on a
        retrospective basis, of the CICA HB 3064 Goodwill and Intangible
        Assets and the amendments to CICA HB 1000 - Financial Statement
        Concepts. Please refer to Note 2 in the Consolidated Financial
        Statements.
    (3) Includes retail sales from corporate and franchise stores.
    (4) Mark's same store sales exclude new stores, stores not open for the
        full period in each year and store closures.
    (5) Gross operating revenue includes retail sales at corporate stores
        only.
    (6) Non-GAAP measure. Please refer to section 18.0 in the 2008
        Management's Discussion and Analysis.
    

Mark's fourth quarter total retail sales declined 4.1%, primarily due to the 2009 fourth quarter being 13 weeks compared to 14 weeks in 2008 and a shift in the calendar weeks. Adjusted on a calendar week basis, fourth quarter total retail sales increased by 0.7%. This is considered a very reasonable performance for a clothing retailer in the face of an extremely weak economy and uncertain consumer behaviour and reflects the strength of the Mark's product offering, based on its CLOTHES THAT WORK(R) strategy.

Mark's ladies wear experienced a 5.5% corporate store sales increase (a 11.4% increase when adjusted for the calendar differences) in the quarter and were strongest in accessories, outerwear and knitwear. Men's wear and industrial wear corporate store sales decreased by 4.5% (0.1% decrease when adjusted for the calendar differences) and 8.7% (4.3% decrease when adjusted for the calendar differences), respectively in the quarter.

On a regional basis, the largest sales declines were experienced in the resource based provinces of Alberta and British Columbia, reflective of the weaknesses in the labour market conditions in those regions, which particularly impacted sales of Mark's industrial wear. Overall, Mark's continues to focus on introducing products into its CLOTHES THAT WORK assortment that are better designed and engineered, and which are expected to drive long-term growth across all categories.

Mark's pre-tax earnings decreased 11.4% in the fourth quarter of 2009 as a result of lower sales and a 132 basis point reduction in margins, reflecting lower inventory markups, currency effects and a small amount of markdown/clearance activity. Mark's partially compensated for this by effective cost management.

During the quarter, Mark's opened 5 new stores, 3 of which were CTR/Mark's combo stores, expanded 1 corporate store and 1 franchise store, relocated 1 franchise store and closed 1 corporate store to bring the total number of stores in the network to 378.

    
    CANADIAN TIRE PETROLEUM (Petroleum)(1)

                       Q4        Q4
    ($ in millions)   2009      2008    Change      2009      2008    Change
    -------------------------------------------------------------------------
    Sales volume
     (millions of
     litres)         431.3     469.1    (8.1)%   1,708.8   1,727.0    (1.1)%
    Retail sales  $  433.5  $  447.0    (3.0)%  $1,653.7  $1,988.1   (16.8)%
    Gross operating
     revenue         398.8     414.3    (3.7)%   1,515.1   1,871.2   (19.0)%
    -------------------------------------------------------------------------
    Earnings before
     income taxes      1.9       6.1   (69.1)%      24.2      26.6    (9.1)%
    Less adjustment
     for:
      Loss on
       disposals of
       property and
       equipment(2)   (0.3)     (0.2)               (0.7)     (0.5)
    -------------------------------------------------------------------------
    Adjusted
     earnings
     before
     income
     taxes(3)     $    2.2  $    6.3   (65.6)%  $   24.9  $   27.1    (8.4)%
    -------------------------------------------------------------------------
    (1) Fiscal 2009 sales and earnings figures are based on a 13-week period
        for the fourth quarter and a 52-week period for the year compared to
        14 weeks for the fourth quarter in 2008 and 53 weeks for the year in
        2008.
    (2) Includes asset impairment losses.
    (3) Non-GAAP measure. Please refer to section 18.0 in the 2008
        Management's Discussion and Analysis.
    

Petroleum's revenue declined 3.7% in the fourth quarter of 2009 compared to the prior year, due to an additional 53rd trading week in the 2008 comparative. Gasoline margins declined late in the year compared to a year ago due to margin pressure in the market. Convenience store sales and car wash sales continued to show strong growth, up 15.0% and 8.5% respectively, when adjusted for the 53rd trading week.

In 2009, Petroleum built 3 new sites and refurbished/rebuilt 11 sites during the year to enhance the customer experience and better reflect the Canadian Tire brand. Petroleum now operates 272 gas bars, 267 convenience stores and kiosks, and 73 car washes.

2010 COMMENTARY

STRATEGIC PRIORITIES

The long-term growth and success of CTC will primarily be driven by a healthy core CTR business. During 2010, the company will focus on programs to increase the long-term return on the assets employed in the business. These will include programs to improve the overall customer experience and consistency in customer service between stores, leveraging industry-leading core assets in the automotive business, and positioning each Canadian Tire business unit to actively support and drive consumers to the core CTR business. This strategy will enable the corporation to optimize the significant investments already made in store and supply chain infrastructure and is expected to drive sustainable, long-term earnings growth.

Key areas of focus in 2010 will build on the momentum of programs and initiatives begun in 2009:

    
    -   Continued roll-out of capital-light CTR Smart stores (25 retrofits
        completed in Q4 2009)
    -   Evolution of key productivity initiatives including CTR change
        program and IT renewal designed to improve operating efficiencies,
        and improved project execution
    -   Began development of a redesigned and enhanced loyalty program
        providing deeper customer insights and greater rewards
    -   Significant staffing and process changes within CTR Marketing,
        Merchandising and Store Operations to improve core processes and to
        increase the resources available to drive an enhanced customer
        experience at store level
    -   Refocused and aligned core automotive assets with a single focus on
        gaining market share and strengthening the Canadian Tire brand
    -   Centralized key support functions designed to decrease operating
        costs and improve operating efficiencies for business units
    -   Reduced operating expenses, lower CAPEX ($273 million in 2009 versus
        an original budget of $390 million) and lower on-hand inventory
        levels at CTR
    -   Development of enhanced supply chain and operations capabilities at
        Mark's through new technology investments
    -   Ongoing focus on credit risk management at Financial Services;
        mortgage business sold in Q4 to allow focus on optimizing credit card
        operations in support of the core business
    -   Strong financial management resulting in improved liquidity, a strong
        balance sheet and reconfirmed credit ratings
    -   Focused initiative on enhancing performance management across the
        organization, including improved execution on key strategic
        initiatives and better integrated operating and strategic planning
        processes
    

All of these activities are expected to start delivering benefits in 2010/2011, including improvements in retail ROIC. However, the benefits will be partially offset by a number of expected headwinds in 2010 which will affect Financial Services, including $8-10 million impact on earnings due to new financial services regulations, $8 million cost for chip card launch, $5 million cost for sales tax harmonization, and other sales tax changes. In addition, increased year-over-year costs of approximately $10 million supporting key strategic initiatives will occur, principally at CTR.

"Canadian Tire has a strong core retail business and among the best assets of any retailer in Canada - as a result of billions of dollars of infrastructure and store-improvement investments over the last 15 years and a highly entrepreneurial Dealer network," added Wetmore. "Looking forward, our focus will be on maximizing the return on our investments in our stores, driving growth in our core CTR business and aligning all of our other businesses to help improve returns at CTR."

The company will share more details on its strategic priorities at an Investor Conference and media day on April 7, 2010.

CAPITAL

Based on the Company's continued focus on optimizing investments and providing long-term improvements to retail ROIC, capital expenditures will continue to be below historic levels in 2010 and beyond. Total projected capital expenditures for 2010 will be in the range of $280 to $300 million, the majority of which will support store and network expansions, and key productivity initiatives. Store retail investment will include approximately 60 CTR Smart store retrofits and 6 new to market CTR stores, approximately 8 new or replacement Mark's stores, and approximately 19 new or refurbished gasoline outlets.

Going forward, capital expenditures will more closely match depreciation charges as the Company has reduced its capital expenditures requirements versus historic norms, principally because the Company is building less square footage than previously and the new CTR store formats are less capital-intensive than previous formats. Management will look for every opportunity to manage this capital in the most effective way.

FUNDING AND LIQUIDITY

Canadian Tire enters 2010 with one of its strongest financial positions in the last decade - with ready access to capital through diversified channels, including $1.2 billion in committed lines of credit and $2.1 billion in deposits. Canadian Tire will retire $300 million of debt maturing in 2010, which it does not expect to refinance, and has no corporate debt maturing in either 2011 or 2012.

Overall, Management remains confident that given the various sources of funding available, particularly for Financial Services, the Corporation has more than sufficient cost-effective funding to support its businesses for the foreseeable future.

DIVIDENDS

The Board of Directors has approved quarterly dividend payments during 2010 of $0.21 per share. The 2010 quarterly dividend payment is unchanged from the amount paid each quarter in 2009. Declaration of the first quarter dividend is expected in March 2010 for payment on June 1, 2010 to shareholders of record as of April 30, 2010. These dividends are considered "eligible dividends" for tax purposes.

Canadian Tire's policy is to maintain dividend payments equal to approximately 15% to 20% of the prior year's normalized basic net earnings per share, after giving consideration to the period end cash position, future cash requirements, market conditions and investment opportunities. Normalized net earnings per share for this purpose exclude gains and losses on the sale of credit card and loans receivable and non-recurring items but include gains and losses on the ordinary course disposition of property and equipment.

NORMAL COURSE ISSUER BID

Canadian Tire also announced that it intends to make a normal course issuer bid (NCIB) to purchase, from February 19, 2010 to February 18, 2011, through the facilities of the Toronto Stock Exchange (TSX), certain of its outstanding Class A Non-Voting Shares. As at February 10, 2010, there were 78,247,986 Class A Non-Voting Shares issued and outstanding. The number of Class A Non-Voting Shares which may be purchased during the period of the bid will not exceed 3.5 million Class A Non-Voting Shares, which is approximately 5.6 percent of 62.9 million shares, the approximate public float of Class A Non-Voting Shares issued and outstanding as of February 10, 2010.

Canadian Tire has a policy of purchasing Class A Non-Voting Shares to offset the dilutive effects of the issuance of Class A Non-Voting Shares pursuant to the Company's employee profit sharing plan, stock option plan, share purchase plan and dividend reinvestment plan. Canadian Tire intends to continue that policy. In addition, Canadian Tire may purchase additional Class A Non-Voting Shares if the Board of Directors of Canadian Tire determines, after consideration of market conditions and Canadian Tire's financial flexibility and investment opportunities, that a purchase of additional Class A Non-Voting Shares is an appropriate means of enhancing the value of the remaining Class A Non-Voting Shares.

The number of Class A Non-Voting Shares purchased during 2009 pursuant to an NCIB was 742,198. The average price at which such purchases were made was $50.52 per Class A Non-Voting Share, including commissions.

Any purchases made pursuant to the NCIB will be made in accordance with the rules of the TSX and will be made at the market price of the Class A Non-Voting Shares at the time of the acquisition. Canadian Tire will make no purchases of Class A Non-Voting Shares other than open market purchases which may be made during the period that the NCIB is outstanding. Subject to any block purchases made in accordance with the rules of the TSX, Canadian Tire will be subject to a daily repurchase restriction of 48,241 Class A Non-Voting Shares, which represent 25 percent of the average daily trading volume of Canadian Tire's Class A Non-Voting Shares on the TSX for the six months ended January 31, 2010.

Canadian Tire's NCIB is subject to regulatory approval.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking information. Forward-looking information includes, but is not limited to, statements concerning management's expectations relating to possible or assumed future results, our strategic goals and our priorities, and the economic and business outlook for us, for each of our business segments and for the economy generally. Often but not always, forward-looking information can be identified by the use of forward-looking terminology such as "may", "will", "expect", "believe", "estimate", "plan", "could", "should", "would", "outlook", "forecast", "anticipate", "foresee", "continue" or the negative of these terms or variations of them or similar terminology. Forward-looking information is based on the reasonable assumptions, estimates, analysis and opinions of management made in light of its experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable at the date that such statements are made. The forward-looking information contained in this press release is presented for the purpose of assisting the Company's security holders and financial analysts in understanding its financial position and results of operation as at and for the periods ended on the dates presented and the Company's strategic priorities and objectives, and may not be appropriate for other purposes. By its very nature, forward-looking information requires the Company to make assumptions and is subject to inherent risks and uncertainties, which give rise to the possibility that the Company's predictions, forecasts, projections, expectations or conclusions will not prove to be accurate, that the Company's assumptions may not be correct and that the Company's objectives, strategic goals and priorities will not be achieved.

Although the Company believes that the predictions, forecasts, projections, expectations or conclusions reflected in the forward-looking information are based on information and assumptions which are current, reasonable and complete, this information is necessarily subject to a number of factors that could cause actual results to differ materially from management's predictions, forecasts, projections, expectations or conclusions as set forth in such forward-looking information for a variety of reasons. These factors include (a) credit, market, operational, liquidity and funding risks, including changes in interest rates or tax rates; (b) the ability of Canadian Tire to attract and retain quality employees, Dealers, Canadian Tire Petroleum agents and PartSource and Mark's Work Wearhouse store operators and franchisees; (c) the willingness of customers to shop at our stores or acquire our financial products and services; (d) risks and uncertainties relating to information management, technology, product safety, competition, seasonality, commodity price and business disruption, consumer credit, securitization funding, and foreign currency; and (e) the risks and uncertainties that could cause actual results or the material factors and assumptions applied in preparing forward-looking information to differ materially from predictions, forecasts, projections, expectations or conclusions, which risks and uncertainties are discussed in the "Risk Factors" section of our Annual Information Form for fiscal 2008 and in our 2008 Management's Discussion and Analysis. For more information on the risks, uncertainties and assumptions that could cause the Company's actual results to differ from current expectations, please read the entire body of this press release and refer to the Company's public filings available at www.sedar.com and at www.canadiantire.ca.

We caution that the foregoing list of important factors is not exhaustive and other factors could also adversely affect our results. Investors and other readers are urged to consider the foregoing risks, uncertainties and assumptions carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such forward-looking information. Statements that include forward-looking information do not take into account the effect that transactions or non-recurring or other special items announced or occurring after the statements are made have on the Company's business. For example, they do not include the effect of any dispositions, acquisitions, asset write-downs or other charges announced or occurring after such statements are made. The forward-looking information in this press release reflects the Company's expectations as of the date hereof and is subject to change after this date. The Company does not undertake to update any forward-looking information, whether written or oral, that may be made from time to time by it or on its behalf, to reflect new information, future events or otherwise, unless required by applicable securities laws.

REVIEW BY BOARD OF DIRECTORS

The Canadian Tire Board of Directors, on the recommendation of its Audit Committee, has approved the contents of this disclosure.

CONFERENCE CALL

Canadian Tire will conduct a conference call to discuss information included in this news release and related matters at 4:30 p.m. EST on February 11, 2010. The conference call will be available simultaneously and in its entirety to all interested investors and the news media through a webcast at http://corp.canadiantire.ca/EN/investors, and will be available through replay at this website for 12 months.

Canadian Tire Corporation, Limited (TSX: CTC.a, CTC), is comprised of five business units: Canadian Tire Retail, one of Canada's most-shopped general merchandise retailers with 479 stores; PartSource, an automotive parts specialty chain with 87 stores; Canadian Tire Petroleum, one of the country's largest and most productive independent retailers of gasoline, operating 272 gas bars, 267 convenience stores and kiosks, and 73 car washes; Mark's Work Wearhouse, one of the country's leading apparel retailers operating 378 stores in Canada; and Canadian Tire Financial Services that has issued over five million Canadian Tire MasterCard credit cards and markets related financial products and services for retail and petroleum customers. More than 57,000 Canadians work across Canadian Tire's organization from coast-to-coast in the enterprise's retail, financial services, and petroleum businesses.

    
                             2009 FOURTH QUARTER

                          INTERIM REPORT FINANCIALS


    Consolidated Statements of Earnings (Unaudited)
    -------------------------------------------------------------------------

                             13 weeks     14 weeks     52 weeks     53 weeks
    (Dollars in millions        ended,       ended,       ended,       ended,
     except per share       January 2,   January 3,   January 2,   January 3,
     amounts)                    2010         2009         2010         2009
    -------------------------------------------------------------------------
                                       (Restated -               (Restated -
                                            Note 2)                   Note 2)

    Gross operating
     revenue              $   2,437.7  $   2,587.8  $   8,686.5  $   9,121.3
    -------------------------------------------------------------------------

    Operating expenses
      Cost of merchandise
       sold and all other
       operating expenses
       except for the
       undernoted items
       (Note 13)              2,184.6      2,305.1      7,788.1      8,200.5
      Net interest expense
       (Note 8)                  42.7         65.9        147.0        122.6
      Depreciation and
       amortization              64.6         61.1        247.5        226.2
      Employee profit
       sharing plan               4.4          5.9         24.7         29.0
    -------------------------------------------------------------------------
    Total operating
     expenses                 2,296.3      2,438.0      8,207.3      8,578.3

    Earnings before income
     taxes                      141.4        149.8        479.2        543.0

    Income taxes
      Current                    49.8         67.8        135.2        209.1
      Future                     (4.6)       (19.5)         9.0        (41.5)
    -------------------------------------------------------------------------
    Income taxes                 45.2         48.3        144.2        167.6
    -------------------------------------------------------------------------

    Net earnings          $      96.2  $     101.5  $     335.0  $     375.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted
     earnings per share   $      1.18  $      1.24  $      4.10  $      4.60
    -------------------------------------------------------------------------

    Weighted average
     number of Common and
     Class A Non-Voting
     Shares outstanding    81,692,260   81,538,127   81,678,775   81,517,702
    -------------------------------------------------------------------------



    Consolidated Statements of Cash Flows (Unaudited)
    -------------------------------------------------------------------------

                             13 weeks     14 weeks     52 weeks     53 weeks
                                ended,       ended,       ended,       ended,
                            January 2,   January 3,   January 2,   January 3,
    (Dollars in millions)        2010         2009         2010         2009
    -------------------------------------------------------------------------
                                       (Restated -               (Restated -
                                            Note 2)                   Note 2)

    Cash generated from
     (used for):

    Operating activities
      Net earnings        $      96.2  $     101.5  $     335.0  $     375.4
      Items not affecting
       cash
        Depreciation             50.7         45.2        193.7        168.6
        Net provision for
         loans receivable
         (Note 3)                52.3         32.0        181.2         87.3
        Amortization of
         intangible assets       13.9         15.8         53.8         57.6
        Future income taxes      (4.6)       (19.5)         9.0        (41.5)
        Employee future
         benefits expense
         (Note 5)                 1.5          1.6          6.0          6.4
        Other                     7.7          9.4          4.0          7.9
        Impairments on
         property and
         equipment                0.4          0.8          1.9          2.5
        Loss on disposal
         of mortgage
         portfolio                0.6            -          0.6            -
        Impairment of other
         long-term
         investments              0.6          1.0          1.1          2.0
        Gain on disposals
         of property and
         equipment               (2.2)        (3.7)        (1.6)        (7.8)
        Changes in fair
         value of derivative
         instruments             11.7         39.1        (11.4)        55.6
        Gain on sales of
         loans receivable
          (Note 3)               (7.4)       (10.2)       (39.2)       (73.7)
        Securitization loans
         receivable              (8.1)       (11.6)       (39.4)       (51.9)
    -------------------------------------------------------------------------
                                213.3        201.4        694.7        588.4
    -------------------------------------------------------------------------
    Changes in other working
     capital components         145.0        252.7       (275.9)      (406.9)
    -------------------------------------------------------------------------
    Cash generated from
     operating activities       358.3        454.1        418.8        181.5
    -------------------------------------------------------------------------

    Investing activities
        Net securitization
         of loans receivable   (111.6)      (272.0)      (532.3)       (31.7)
        Additions to property
         and equipment          (52.0)       (34.4)      (220.0)      (359.5)
        Investment in loans
         receivable, net       (125.7)      (105.1)      (208.5)      (140.5)
        Additions to
         intangible assets      (19.0)       (26.3)       (67.8)       (76.5)
        Other long-term
         investments                -        (19.6)       (50.7)       (19.6)
        Short-term
         investments            130.0            -        (38.0)           -
        Other                    (1.9)        (0.7)        (7.7)        (4.2)
        Purchases of stores      (2.3)        (8.0)        (6.1)       (36.5)
        Long-term receivables
         and other assets        (1.5)       (28.7)        (3.1)       (27.2)
        Proceeds on
         disposition of
         property and
         equipment               15.5          9.4         27.8        239.5
        Proceeds on disposal
         of mortgage
         portfolio              162.2            -        162.2            -
        Proceeds on
         disposition of
         intangible assets          -          0.1            -          0.6
    -------------------------------------------------------------------------
    Cash used for investing
     activities                  (6.3)      (485.3)      (944.2)      (455.6)
    -------------------------------------------------------------------------

    Financing activities
        Net change in
         deposits              (265.0)       838.4        917.3      1,024.1
        Issuance of long-term
         debt (Note 4)              -            -        200.1          0.2
        Class A Non-Voting
         Share transactions      (7.8)         6.0         (0.9)         7.0
        Repayment of
         long-term
         debt (Note 4)         (151.9)        (2.0)      (165.4)      (156.3)
        Dividends               (17.1)       (17.1)       (68.7)       (66.4)
        Commercial paper            -       (367.2)           -            -
    -------------------------------------------------------------------------
    Cash (used for)
     generated from
     financing activities      (441.8)       458.1        882.4        808.6
    -------------------------------------------------------------------------

    Cash (used) generated
     in the period              (89.8)       426.9        357.0        534.5
    Cash and cash
     equivalents, beginning
     of period                  875.8          2.1        429.0       (105.5)
    -------------------------------------------------------------------------
    Cash and cash
     equivalents, end of
     period (Note 9)      $     786.0  $     429.0  $     786.0  $     429.0
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Consolidated Statements of Comprehensive Income (Unaudited)
    -------------------------------------------------------------------------

                             13 weeks     14 weeks     52 weeks     53 weeks
                                ended,       ended,       ended,       ended,
                            January 2,   January 3,   January 2,   January 3,
    (Dollars in millions)        2010         2009         2010         2009
    -------------------------------------------------------------------------
                                       (Restated -               (Restated -
                                            Note 2)                   Note 2)

    Net earnings          $      96.2  $     101.5  $     335.0  $     375.4
    Other comprehensive
     income (loss), net
     of taxes
      (Loss) gain on
       derivatives
       designated as
       cash flow hedges,
       net of tax of $10.2
       and $33.7 (2008 -
       $56.7 and $68.9),
       respectively             (23.6)       117.4        (80.7)       139.7
      Reclassification to
       non-financial asset
       of (gain) loss on
       derivatives
       designated as cash
       flow hedges, net of
       tax of $7.9 and
       $31.1 (2008 - $18.5
       and $10.1),
       respectively              16.5        (38.4)       (58.5)       (20.5)
      Reclassification to
       earnings of (gain)
       loss on derivatives
       designated as cash
       flow hedges, net of
       tax of $0.1 and
       $0.9 (2008 - $9.2
       and $12.0),
       respectively               0.1         22.0         (1.9)        28.0
    -------------------------------------------------------------------------
    Other comprehensive
     (loss) income               (7.0)       101.0       (141.1)       147.2
    -------------------------------------------------------------------------
    Comprehensive income  $      89.2  $     202.5  $     193.9  $     522.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Consolidated Statements of Changes in Shareholders' Equity (Unaudited)
    -------------------------------------------------------------------------

                                                       52 weeks     53 weeks
                                                          ended,       ended,
                                                      January 2,   January 3,
    (Dollars in millions)                                  2010         2009
    -------------------------------------------------------------------------
                                                                 (Restated -
                                                                      Note 2)

    Share capital
    Balance, beginning of period                    $     715.4  $     700.7
    Transactions, net (Note 6)                              5.0         14.7
    -------------------------------------------------------------------------
    Balance, end of period                          $     720.4  $     715.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Contributed surplus                                       -
    Balance, beginning of period                    $         -  $       2.3
    Transactions, net                                       0.2         (2.3)
    -------------------------------------------------------------------------
    Balance, end of period                          $       0.2  $         -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Retained earnings
    Balance, beginning of period as previously
     reported                                       $   2,755.5  $   2,455.1
    Transitional adjustment on adoption of new
     accounting policies - HB 1000/3064 (Note 2)           (3.1)        (4.3)
    -------------------------------------------------------------------------
    Balance, beginning of period as restated            2,752.4      2,450.8
    Transitional adjustment on adoption of new
     accounting policies - EIC 173 (Note 2)                 1.1            -
    Net earnings for the period                           335.0        375.4
    Dividends                                             (68.7)       (68.4)
    Repurchase of Class A Non-Voting Shares                (6.1)        (5.4)
    -------------------------------------------------------------------------
    Balance, end of period                          $   3,013.7  $   2,752.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Accumulated other comprehensive income (loss)
    Balance, beginning of period                    $      97.2  $     (50.0)
    Transitional adjustment on adoption of new
     accounting policies - EIC 173 (Note 2)                (2.5)           -
    Other comprehensive (loss) income for the period     (141.1)       147.2
    -------------------------------------------------------------------------
    Balance, end of period                          $     (46.4) $      97.2
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Retained earnings and accumulated other
     comprehensive income (loss)                    $   2,967.3  $   2,849.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Consolidated Balance Sheets (Unaudited)
    -------------------------------------------------------------------------

    (Dollars in millions)                             January 2,   January 3,
    As at                                                  2010         2009
    -------------------------------------------------------------------------
                                                                 (Restated -
                                                                      Note 2)

    ASSETS
    Current assets
      Cash and cash equivalents (Note 9)            $     786.0  $     429.0
      Short-term investments (Note 9)                      64.0            -
      Accounts receivable                                 835.9        824.1
      Loans receivable (Note 3)                         2,274.8      1,683.4
      Merchandise inventories                             933.6        917.5
      Income taxes recoverable                             94.7         64.6
      Prepaid expenses and deposits                        40.7         40.2
      Future income taxes                                  82.8         20.2
    -------------------------------------------------------------------------
      Total current assets                              5,112.5      3,979.0
    -------------------------------------------------------------------------
    Long-term receivables and other assets (Note 3)       110.6        262.1
    Other long-term investments, net                       48.8         25.2
    Goodwill                                               71.8         70.7
    Intangible assets                                     265.4        247.9
    Property and equipment, net                         3,180.4      3,198.9
    -------------------------------------------------------------------------
      Total assets                                  $   8,789.5  $   7,783.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES
    Current liabilities
      Deposits (Note 10)                            $     863.4  $     540.7
      Accounts payable and other                        1,391.4      1,444.2
      Current portion of long-term debt                   309.3         14.8
    -------------------------------------------------------------------------
      Total current liabilities                         2,564.1      1,999.7
    -------------------------------------------------------------------------
    Long-term debt                                      1,101.9      1,373.5
    Future income taxes                                    49.8         44.7
    Long-term deposits (Note 10)                        1,196.9        598.7
    Other long-term liabilities                           188.9        202.2
    -------------------------------------------------------------------------
      Total liabilities                                 5,101.6      4,218.8
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY
    Share capital (Note 6)                                720.4        715.4
    Contributed surplus                                     0.2            -
    Accumulated other comprehensive income (loss)         (46.4)        97.2
    Retained earnings                                   3,013.7      2,752.4
    -------------------------------------------------------------------------
      Total shareholders' equity                        3,687.9      3,565.0
    -------------------------------------------------------------------------
      Total liabilities and shareholders' equity    $   8,789.5  $   7,783.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Notes to the Consolidated Financial Statements (Unaudited)
    -------------------------------------------------------------------------

    1.  Basis of Presentation

        These unaudited interim consolidated financial statements (the
        financial statements) have been prepared by Management in accordance
        with Canadian generally accepted accounting principles (GAAP) and
        include the accounts of Canadian Tire Corporation, Limited and its
        subsidiaries, collectively referred to as the "Company". These
        financial statements do not contain all disclosures required by
        Canadian GAAP for annual financial statements and accordingly, these
        financial statements should be read in conjunction with the most
        recently issued annual financial statements for the 53 weeks ended
        January 3, 2009 contained in our 2008 Annual Report.

        The preparation of the financial statements in conformity with
        Canadian GAAP requires Management to make estimates and assumptions
        that affect the reported amounts of assets and liabilities and
        disclosures of contingent assets and liabilities at the date of the
        financial statements and the reported amounts of revenue and expenses
        during the reporting period. Actual results could differ from these
        estimates. Estimates are used when accounting for a number of items
        including, but not limited to, income taxes, impairment of assets
        (including goodwill), employee benefits, product warranties,
        inventory provisions, amortization, uncollectible loans,
        environmental reserves, asset retirement obligations, financial
        instruments, and the liability for the Company's loyalty programs.

    2.  Change in Accounting Policies

        These financial statements follow the same accounting policies and
        methods of their application as the most recently issued annual
        financial statements for the 53 weeks ended January 3, 2009, except
        as noted below.

        Financial Statement Concepts

        Effective, January 4, 2009 (the first day of the Company's 2009
        fiscal year), the Company applied the amendments issued by the
        Canadian Institute of Chartered Accountants (CICA) to HB 1000 -
        Financial Statement Concepts, which clarify the criteria for
        recognition of an asset and the timing of expense recognition,
        specifically, deleting the guidance permitting the deferral of costs.
        The new requirements are effective for interim and annual financial
        statements for fiscal years beginning on or after October 1, 2008.
        The Company applied the amendments to CICA HB 1000 in conjunction
        with CICA HB 3064 - Goodwill and Intangible Assets.

        Goodwill and Intangible Assets

        Effective, January 4, 2009, the Company implemented, on a
        retrospective basis with restatement, the CICA HB 3064 - Goodwill and
        Intangible Assets, which was effective for interim and annual
        financial statements for fiscal years beginning on or after
        October 1, 2008.

        This new standard provides guidance on the recognition, measurement,
        presentation and disclosure of goodwill and intangible assets,
        including internally developed intangibles, and is consistent with
        the revised asset definition and recognition criteria in CICA HB
        1000 - Financial Statement Concepts. Under the new standard, costs
        related to development projects can be recorded as assets only if
        they meet the definition of an intangible asset.

        Additionally, internally developed computer software that is not an
        integral part of the related hardware was previously included in
        property and equipment. The new standard requires these costs to be
        included in intangible assets. As these costs have a limited useful
        life, they continue to be amortized over a 5 year period.

        As a result of the retrospective implementation of these standards,
        the cumulative impact on previously reported balances on the
        following dates is as follows:

        ($ in millions)                                Increase / (Decrease)
                                                    -------------------------
                                                      January 3, December 29,
                                                           2009         2007
                                                    -------------------------
        Retained earnings                           $      (3.1) $      (4.3)
        Long-term receivables and other assets             (3.3)        (4.6)
        Intangible assets                                 189.5        174.0
        Property and equipment                           (190.9)      (175.8)
        Income taxes recoverable                            0.4          0.4
        Future income tax liabilities                      (1.2)        (1.7)

        In addition, the retrospective impact on depreciation and
        amortization for the 14 weeks and 53 weeks ended January 3, 2009 was
        a decrease of $0.8 million and $2.7 million, respectively. The
        retrospective impact of the write-off of deferred development costs
        on cost of merchandise sold and all other operating expenses for the
        14 weeks and 53 weeks ended January 3, 2009 was an increase of $0.5
        and $0.9 million, respectively. The retrospective impact on net
        earnings for the 14 weeks ended January 3, 2009 was an increase of
        $0.3 million, or $nil per share, and for the 53 weeks ended
        January 3, 2009 was an increase of $1.2 million, or $0.01 per share.

        Credit Risk and the Fair Value of Financial Assets and Financial
        Liabilities

        Effective, January 4, 2009, the Company implemented, on a
        retrospective basis without restatement of prior periods, the CICA
        Emerging Issues Committee (EIC) 173 - Credit Risk and the Fair Value
        of Financial Assets and Financial Liabilities, which is effective for
        interim and annual financial statements for periods ending on or
        after January 20, 2009.

        This EIC clarifies that an entity's own credit risk and the credit
        risk of the counterparty should be taken into account in determining
        the fair value of financial assets and financial liabilities,
        including derivative instruments, rather than using a risk free rate.

        Entities are required to re-measure financial assets and liabilities,
        including derivative instruments, as at the beginning of the period
        of adoption (i.e. the beginning of fiscal 2009) to take into account
        its own credit risk and the respective counterparty's credit risk.
        Any resulting difference would be recorded as an adjustment to
        retained earnings, except a) derivatives in a fair value hedging
        relationship accounted for by the "shortcut method", in which case
        the resulting difference would adjust the basis of the hedged item;
        and b) derivatives in cash flow hedging relationships, in which case
        the resulting difference would be recorded in accumulated other
        comprehensive income (AOCI).

        As a result of the retrospective implementation of this new standard,
        opening accumulated other comprehensive income decreased by
        $2.5 million and opening retained earnings increased by $1.1 million.

        Future Accounting Changes

        International Financial Reporting Standards

        In February 2008, the CICA announced that Canadian GAAP for publicly
        accountable enterprises will be replaced by International Financial
        Reporting Standards (IFRS) for fiscal years beginning on or after
        January 1, 2011. Accordingly, the conversion from Canadian GAAP to
        IFRS will be applicable to the Company's reporting for the first
        quarter of 2011, for which the current and comparative 2010
        information will be prepared under IFRS. The Company expects the
        transition to IFRS to impact accounting, financial reporting,
        internal control over financial reporting, taxes, information systems
        and processes as well as certain contractual arrangements. The
        Company is currently assessing the impact of the transition to IFRS
        in the above areas and has deployed additional trained resources and
        formal project management practices and governance to ensure the
        timely conversion to IFRS.

        Business Combinations

        In January 2009, the CICA issued CICA HB 1582 - Business
        Combinations, which will replace CICA HB 1581 - Business
        Combinations. The CICA also issued CICA HB 1601 - Consolidated
        Financial Statements and CICA HB 1602 - Non-Controlling Interests,
        which will replace CICA HB 1600 - Consolidated Financial Statements.
        The objective of the new standards is to harmonize Canadian GAAP for
        business combinations and consolidated financial statements with the
        International and U.S. accounting standards. The new standards are to
        be applied prospectively to business combinations for which the
        acquisition date is on or after the beginning of the first annual
        reporting period, commencing January 1, 2011, with earlier
        application permitted. Assets and liabilities that arose from
        business combinations whose acquisition dates preceded the
        application of the new standards will not be adjusted upon
        application of these new standards. The Company has elected not to
        adopt the new standard prior to 2011.

        Financial Instruments - Recognition and Measurement

        In April 2009, the CICA amended CICA HB 3855 - Financial Instruments
        - Recognition and Measurement. The amendment included a paragraph
        relating to embedded prepayment options. This amendment is effective
        for interim and annual financial statements relating to fiscal years
        beginning on or after January 1, 2011 with early adoption permitted.
        The new standard has no impact on the Company.

        Financial Instruments - Disclosures

        In June 2009, the CICA amended CICA HB 3862 - Financial Instruments -
        Disclosures, which adopted the amendments recently issued by the
        International Accounting Standards Boards (IASB) to IFRS 7 -
        Financial Instruments: Disclosures, which was issued in March 2009.
        These amendments are applicable to publicly accountable enterprises
        and those private enterprises, co-operative business enterprises,
        rate-regulated enterprises and not-for-profit organizations that
        choose to apply Section 3862.

        The amendments enhance disclosures about fair value measurements,
        including the relative reliability of the inputs used in those
        measurements, and about the liquidity risk of financial instruments.
        Section 3862 now requires that all financial instruments measured at
        fair value be categorized into one of three hierarchy levels,
        described as follows, for disclosure purposes. Each level is based on
        the transparency of the inputs used to measure the fair values of
        assets and liabilities:

        -  Level 1 - inputs are unadjusted quoted prices of identical
           instruments in active markets;
        -  Level 2 - inputs are other than quoted prices included in Level 1
           that are observable for the asset or liability, either directly or
           indirectly; and
        -  Level 3 - inputs are not based on observable market data.

        The amendments are effective for annual financial statements for
        fiscal years ending after September 30, 2009, with early adoption
        permitted. To provide relief for financial statement preparers, and
        consistent with IFRS 7, the CICA decided that an entity need not
        provide comparative information for the disclosures required by the
        amendments in the first year of application. The required disclosures
        will be reflected in the Company's annual financial statements.

        Financial Instruments - Impairment of Debt Instruments

        In August 2009, the CICA amended CICA HB 3855 - Financial Instruments
        - Recognition and Measurement and concurrently CICA HB 3025 -
        Impaired Loans. These amendments affect the classifications that are
        required or allowed for debt instruments, as well as the impairment
        model for held-to-maturity financial assets. The amendments, which
        are effective for annual financial statements relating to fiscal
        years beginning on or after November 1, 2008, have no impact on the
        Company.

        Multiple Deliverable Revenue Arrangements

        In December 2009, the EIC issued EIC-175 - Multiple Deliverable
        Revenue Arrangements, which may be applied prospectively and should
        be applied to revenue arrangements with multiple deliverables entered
        into or materially modified in the first annual fiscal period
        beginning on or after January 1, 2011. Early adoption is permitted.

        This EIC requires a vendor to allocate arrangement consideration at
        the inception of an arrangement to all deliverables using the
        relative selling price method. It also provides guidance on the level
        of evidence of the standalone selling price required to separate
        deliverables when more objective evidence of the selling price is not
        available. Given the requirement to use the relative selling price
        method of allocating arrangement consideration, it prohibits the use
        of the residual method. The Company will assess the potential impact
        of this standard.

    3.  Loans Receivable

        The Company sells co-ownership interests in a pool of credit card
        receivables to a third party Trust (the Trust) in transactions known
        as securitizations. The transactions are accounted for as sales in
        accordance with CICA Accounting Guideline 12 (AcG-12), Transfers of
        Receivables, and the receivables are removed from the Consolidated
        Balance Sheets.

        In accordance with AcG-12, an asset called an "Interest Only Strip"
        is created to account for the difference between the market value of
        the transfer and the proceeds received. It represents the present
        value of the excess spread to be earned over the expected life of the
        receivables, specifically the yield less the write offs and interest
        expense of the Trust. Similarly, a servicing liability is established
        representing an estimate of Canadian Tire Bank's cost to service the
        receivables over the expected life.

        The Trust's recourse to the Company is limited to customer payments
        received on the portion of receivables in the pool that represent
        over-collateralization. The proceeds of any sale are the sum of the
        cash proceeds and the increase in the interest-only strip, less the
        sum of any transaction costs and increase in the servicing liability.

        The assets and liabilities of the Trust have not been consolidated in
        these financial statements because the Trust meets the criteria for a
        qualified special purpose entity and therefore is exempt from
        consolidation.

        Quantitative information about loans managed and securitized by the
        Company is as follows:

                                                         Average balances
                            Total principal amount   for the 52   for the 53
        ($ in millions)     of receivables as at(1) weeks ended  weeks ended
                          ------------------------- -------------------------
                            January 2,   January 3,   January 2,   January 3,
                                 2010         2009         2010         2009
                          ------------ ------------ ------------ ------------
        Total net managed
         credit card
         loans            $   3,932.8  $   3,780.4  $   3,742.4  $   3,601.5
        Credit card loans
         sold                (1,693.4)    (2,216.0)    (2,044.1)    (2,592.9)
                          ------------ ------------ ------------ ------------
        Credit card loans
         held                 2,239.4      1,564.4      1,698.3      1,008.6

        Total net managed
         personal loans(2)       34.0         83.8         56.2        114.2
        Personal loans
         sold                       -            -            -        (17.8)
                          ------------ ------------ ------------ ------------
        Personal loans
         held                    34.0         83.8         56.2         96.4

        Total net managed
         mortgage loans(3)          -        138.8        141.0         76.0
                          ------------ ------------ ------------ ------------

        Total net managed
         line of credit
         loans                   15.6         20.6         18.1         23.7
                          ------------ ------------ ------------ ------------

        Total loans
         receivable           2,289.0      1,807.6  $   1,913.6  $   1,204.7
                                                    ------------ ------------
                                                    ------------ ------------
        Less: long-term
         portion(4)             (14.2)      (124.2)
                          ------------ ------------

        Current portion
         of loans
         receivable       $   2,274.8  $   1,683.4
                          ------------ ------------
                          ------------ ------------
        (1) Amounts shown are net of allowance for credit losses.
        (2) Personal loans are unsecured loans that are provided to qualified
            existing credit card holders for terms of three to five years.
            Personal loans have fixed monthly payments of principal and
            interest; however, the personal loans can be repaid at any time
            without penalty.
        (3) Mortgage loans are issued for terms of up to ten years, have
            fixed or variable interest rates, are secured and include a mix
            of both high and low ratio loans. High ratio loans are fully
            insured and low ratio loans are partially insured. During the
            quarter, the Company sold its mortgage portfolio, totaling
            approximately $162 million, resulting in a pre-tax loss of
            $0.6 million.
        (4) The long-term portion of loans is included in long-term
            receivables and other assets.

        Net credit losses for the owned portfolio for the 13 weeks and 52
        weeks ended January 2, 2010 were $52.3 million (2008 - $32.0 million)
        and $181.2 million (2008 - $87.3 million), respectively. Net credit
        losses for the total managed portfolio for the 13 weeks and 52 weeks
        ended January 2, 2010 were $86.2 million (2008 - $67.6 million) and
        $337.7 million (2008 - $249.2 million), respectively. Net credit
        losses consist of total write-offs (including regular and bankruptcy
        write-offs and consumer proposals), net of recoveries and any changes
        in allowances.

    4.  Long-Term Debt

        On June 1, 2009, the Company issued $200.0 million of 7 year medium
        term notes, which mature and are repayable on June 1, 2016, and bear
        interest at 5.65 percent, payable semi-annually.

        On October 22, 2009, the Company redeemed $150 million of debentures,
        which were to mature on May 10, 2010, and bore interest at 12.10%. As
        a result of this redemption, the Company paid a redemption premium of
        $9.4 million on the redemption date. The debentures were hedged by
        interest rate swaps that were to mature on May 10, 2010 but were
        terminated early in connection with the redemption. Hedge accounting
        for these swaps ceased upon the redemption announcement. As a result,
        for the 13 weeks and 52 weeks ended January 2, 2010, $1.7 million and
        $3.3 million respectively of benefit was amortized to earnings. For
        the 13 weeks and 52 weeks ended January 2, 2010, $7.7 million and
        $6.1 million pre-tax losses were recorded, respectively. These
        amounts were included in long-term interest expense.

    5.  Employee Future Benefits

        The net employee future benefit expense for the 13 weeks and 52 weeks
        ended January 2, 2010 was $1.5 million (2008 - $1.6 million) and
        $6.0 million (2008 - $6.4 million), respectively.

    6.  Share Capital

        ($ in millions)                               January 2,   January 3,
                                                           2010         2009
                                                    ------------ ------------
        Authorized
          3,423,366 Common Shares
          100,000,000 Class A Non-Voting Shares
        Issued
          3,423,366 Common Shares (January 3, 2009
           - 3,423,366)                             $       0.2  $       0.2
          78,178,066 Class A Non-Voting Shares
           (January 3, 2009  - 78,178,066)                720.2        715.2
                                                    ------------ ------------
                                                    $     720.4  $     715.4
                                                    ------------ ------------
                                                    ------------ ------------

        The Company issues and repurchases Class A Non-Voting Shares. The net
        excess of the issue price over the repurchase price results in
        contributed surplus. The net excess of the repurchase price over the
        issue price is allocated first to contributed surplus, if any, with
        any remainder allocated to retained earnings.

        The following transactions occurred with respect to Class A Non-
        Voting Shares:

                                52 weeks ended            53 weeks ended
        ($ in millions)        January 2, 2010           January 3, 2009
                          ------------------------- -------------------------
                            Number          $         Number          $
                          ------------ ------------ ------------ ------------
        Shares outstanding
         at the beginning
         of the period     78,178,066        715.2   78,048,062        700.5
        Issued                742,198         36.6      649,804         36.9
        Repurchased          (742,198)       (37.5)    (519,800)       (29.9)
        Excess of
         repurchase price
         over issue price           -          5.9            -          7.7
                          ------------ ------------ ------------ ------------
        Shares outstanding
         at the end of the
         period            78,178,066        720.2   78,178,066        715.2
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------

    7.  Stock-based Compensation Plans

        All stock-based compensation plans are as disclosed in the most
        recently issued annual financial statements for the 53 weeks ended
        January 3, 2009, except as follows:

        2009 Performance Share Unit Plan

        The Company has granted 2009 Performance Share Units (2009 PSUs) to
        certain employees. Each 2009 PSU entitles the participant to receive
        a cash payment in an amount equal to the weighted average closing
        price of Class A Non-Voting Shares traded on the Toronto Stock
        Exchange for the 20-day period prior to and including the last day of
        the performance period, multiplied by an applicable multiplier
        determined by specific performance-based criteria. Compensation
        expense related to 2009 PSUs is accrued over the performance period
        based on the expected total compensation to be paid out at the end of
        the performance period. For the 13 weeks and 52 weeks ended
        January 2, 2010, $1.6 million and $5.3 million of compensation
        expense was recorded for the 2009 PSUs, respectively.

    8.  Segmented Information - Statement of Earnings

        ---------------------------------------------------------------------
                                          14 weeks                  53 weeks
                                             ended                     ended
                             13 weeks    January 3,    52 weeks    January 3,
                                ended         2009        ended         2009
                            January 2, (Restated -    January 2, (Restated -
        ($ in millions)          2010       Note 2)        2010       Note 2)
        ---------------------------------------------------------------------
        Gross operating
         revenue
          CTR             $   1,494.4  $   1,636.4  $   5,552.2  $   5,669.1
          Financial
           Services             237.7        212.4        909.9        820.4
          Petroleum             398.8        414.3      1,515.1      1,871.2
          Mark's                340.3        355.7        833.8        872.4
          Eliminations          (33.5)       (31.0)      (124.5)      (111.8)
        ---------------------------------------------------------------------
          Total gross
           operating
           revenue        $   2,437.7  $   2,587.8  $   8,686.5  $   9,121.3
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        Earnings before
         income taxes
          CTR             $      38.0  $      26.7  $     261.6  $     249.4
          Financial
           Services              38.4         45.8        131.9        192.0
          Petroleum               1.9          6.1         24.2         26.6
          Mark's                 63.1         71.2         61.5         75.0
        ---------------------------------------------------------------------
          Total earnings
           before income
           taxes                141.4        149.8        479.2        543.0

          Income taxes           45.2         48.3        144.2        167.6
        ---------------------------------------------------------------------

          Net earnings    $      96.2  $     101.5  $     335.0  $     375.4
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        Net Interest
         expense(1)
          CTR             $      26.2  $      55.5  $      82.9  $     103.2
          Financial
           Services              16.2          9.3         62.4         15.1
          Mark's                  0.3          1.1          1.7          4.3
        ---------------------------------------------------------------------
          Total interest
           expense        $      42.7  $      65.9  $     147.0  $     122.6
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

        Depreciation and
         amortization
         expense
          CTR             $      50.4  $      46.9  $     191.2  $     174.4
          Financial
           Services               2.4          2.8         11.0         11.0
          Petroleum               4.7          4.9         18.0         17.2
          Mark's                  7.1          6.5         27.3         23.6
        ---------------------------------------------------------------------
          Total
           depreciation
           and
           amortization
           expense        $      64.6  $      61.1  $     247.5  $     226.2
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------
        (1) Net interest expense includes interest on short-term and long-
            term debts, offset by passive interest income (includes interest
            income earned on bank deposits, ancillary investments and all
            inter-company interest income). Interest on long-term debt for
            the 13 weeks and 52 weeks ended January 2, 2010 was $39.5 million
            (2008 - $60.3 million) and $130.0 million (2008 -
            $117.9 million), respectively.


        Segmented Information - Total Assets

        ---------------------------------------------------------------------
                                                                   January 3,
                                                                        2009
                                                      January 2, (Restated -
        ($ in millions)                                    2010       Note 2)
        ---------------------------------------------------------------------

        CTR                                         $   5,810.7  $   5,801.8

        Financial Services                              3,319.0      2,550.6

        Petroleum                                         279.7        352.9

        Mark's                                            493.3        509.0

        Eliminations                                   (1,113.2)    (1,430.5)

        ---------------------------------------------------------------------
        Total                                       $   8,789.5  $   7,783.8
        ---------------------------------------------------------------------
        ---------------------------------------------------------------------

    9.  Cash and Cash Equivalents

        The components of cash and cash equivalents are:

                                                      January 2,   January 3,
        ($ in millions)                                    2010         2009
                                                    ------------ ------------

        Cash (bank overdraft)                       $     (48.5) $      59.2
        Cash equivalents                                  834.5        369.8
                                                    ------------ ------------
        Cash and cash equivalents                   $     786.0  $     429.0
                                                    ------------ ------------
                                                    ------------ ------------

        Cash equivalents are highly liquid and rated certificates of deposit
        or commercial paper with an original term to maturity of 3 months or
        less.

        Investments in highly liquid and rated certificates of deposits,
        commercial paper or other securities with an original term to
        maturity of more than 3 months and a remaining term to maturity of
        less than one year are classified as short-term investments.

    10. Deposits

        Deposits consist of broker deposits and retail deposits.

        Cash from broker deposits is raised through sales of guaranteed
        investment certificates (GICs) through brokers rather than directly
        to the retail customer. Individual balances up to $100,000 are Canada
        Deposit Insurance Corporation (CDIC) insured. Broker deposits are
        offered for varying terms ranging from 30 days to five years, and all
        issued GICs are non-redeemable prior to maturity (except in certain
        rare circumstances). Total short-term and long-term broker deposits
        outstanding at January 2, 2010 were $1,514.8 million (2008 -
        $926.8 million).

        Retail deposits consist of high interest savings deposits, retail
        GICs and tax-free savings deposits. Total retail deposits outstanding
        at January 2, 2010 were $545.5 million (2008 - $212.6 million).

    11. Capital Management Disclosures

        The Company's objectives when managing capital are:

        -  minimizing the after-tax cost of capital;
        -  maintaining healthy liquidity reserves and access to capital; and
        -  maintaining flexibility in capital structure to ensure the ongoing
           ability to execute the Strategic Plan.

        The current economic environment has not changed the Company's
        objectives in managing capital.

        Management includes the following items in its definition of capital:

                            January 2,                January 3,
        ($ in millions)          2010   % of total         2009   % of total
                          ------------------------- -------------------------
        Current portion of
         long-term debt   $     309.3         4.9%  $      14.8         0.3%
        Long-term debt        1,101.9        17.4%      1,373.5        25.2%
        Long-term deposits    1,196.9        18.9%        598.7        11.0%
        Other long-term
         liabilities(1)           1.3          - %          3.2         0.1%
        Share capital           720.4        11.4%        715.4        13.1%
        Contributed surplus       0.2          - %            -          - %
        Retained earnings     3,013.7        47.4%      2,752.4        50.3%

                          ------------------------- -------------------------
        Net capital under
         management       $   6,343.7       100.0%  $   5,458.0       100.0%
                          ------------------------- -------------------------
                          ------------------------- -------------------------
        (1) Long-term liabilities that are derivative or hedge instruments
            relating to capital items only.

        The Company has in place various policies which it uses to manage
        capital, including a leverage and liquidity policy and a securities
        and derivatives policy. As part of the overall management of capital,
        Management's Financial Risk Management Committee and the Audit
        Committee of the Board review the Company's compliance with, and
        performance against, these policies.

        In addition, Management's Financial Risk Management Committee and the
        Audit Committee of the Board perform periodic reviews of the policies
        to ensure they remain consistent with the risk tolerance acceptable
        to the Company and with current market trends and conditions.

        To assess its effectiveness in managing capital, Management
        historically monitored certain key ratios to ensure they are within
        targeted ranges. As a result of growth in our Financial Services
        business, changes in how Financial Services is funded and the pending
        impact of IFRS, these previously disclosed ratios are no longer
        considered relevant by Management. Management is currently
        undertaking a review to identify the most relevant key ratios.

        Under the existing debt agreements, key financial covenants are
        monitored on an on-going basis by Management to ensure compliance
        with the agreements. The key covenants are as follows:

        -  maintaining a specified minimum net tangible assets coverage,
           which is calculated as:
           -  total assets less intangible assets, current liabilities
              (excluding current portion of long-term debt), and liability
              for employee future benefits,
           -  divided by long-term debt (including current portion of long-
              term debt).
        -  limitations on surplus available for distribution to shareholders
           whereby the Company is restricted from distributions
           (including dividends and redemptions or purchases of shares)
           exceeding its accumulated net income over a defined period.

        The Company was in compliance with these key covenants during the
        period.

        The Company's wholly-owned subsidiary, Canadian Tire Bank (the Bank),
        manages its capital under guidelines established by the Office of the
        Superintendent of Financial Institutions Canada (OSFI). The
        regulatory capital guidelines measure capital in relation to credit,
        market and operational risks. The Bank has various capital policies,
        procedures and controls which it utilizes to achieve its goals and
        objectives.

        The Bank's objectives include:

        -  providing sufficient capital to maintain the confidence of
           depositors;
        -  being an appropriately capitalized institution, as measured
           internally, defined by regulatory authorities and compared with
           the Bank's peers; and
        -  achieving the lowest overall cost of capital consistent with
           preserving the appropriate mix of capital elements to meet target
           capitalization levels.

        The Bank's total capital consists of three tiers of capital approved
        under OSFI's current regulatory capital guidelines. As at
        December 31, 2009 (the Bank's fiscal quarter end), Tier 1 capital
        includes common shares and retained earnings reduced by net
        securitization exposures. The Bank currently does not hold any
        instruments in Tier 2 or Tier 3 capital. Risk-weighted assets (RWA),
        referenced in the regulatory guidelines, include all on-balance sheet
        assets weighted for the risk inherent in each type of asset as well
        as an operational risk component based on a percentage of average
        risk-weighted revenues.

        The Bank's ratios are above internal minimum targets for Tier 1 and
        Total capital ratios. The Bank is within its internal maximum target
        for the assets to capital multiple. OSFI's minimum Tier 1 and Total
        capital ratios for Canadian banks are 7 percent and 10 percent,
        respectively. During the 3 months ended December 31, 2009 and the
        comparative period, the Bank complied with the capital guidelines
        issued by OSFI under the "International Convergence of Capital
        Measurement and Capital Standards - A Revised Framework" (Basel II).

    12. Financial Instruments Disclosures

        Allowance for credit losses

        The Company's allowances for receivables are maintained at levels
        which are considered adequate to absorb future credit losses. A
        continuity of the Company's allowances for credit losses is as
        follows:

                               Credit card loans           Other loans(1)
                          ---------------------------------------------------
                            January 2,   January 3,   January 2,   January 3,
        ($ in millions)          2010         2009         2010         2009
                          ---------------------------------------------------
        Balance, beginning
         of year          $      51.8  $      51.5  $       3.5  $       2.7
        Provision for
         credit losses          175.6         78.0          5.6          9.3
        Recoveries               19.8         15.0          0.8          0.7
        Write-offs             (163.3)       (92.7)        (7.8)        (9.2)

                          ---------------------------------------------------
        Balance, end of
         period           $      83.9  $      51.8  $       2.1  $       3.5
                          ---------------------------------------------------
                          ---------------------------------------------------


                             Accounts receivable               Total
                          ---------------------------------------------------
                            January 2,   January 3,   January 2,   January 3,
        ($ in millions)          2010         2009         2010         2009
                          ---------------------------------------------------
        Balance, beginning
         of year          $       3.3  $       5.0  $      58.6  $      59.2
        Provision for
         credit losses            3.0          1.0        184.2         88.3
        Recoveries                0.2          0.3         20.8         16.0
        Write-offs               (3.0)        (3.0)      (174.1)      (104.9)

                          ---------------------------------------------------
        Balance, end of
         period           $       3.5  $       3.3  $      89.5  $      58.6
                          ---------------------------------------------------
                          ---------------------------------------------------
        (1) Other Loans include personal loans, mortgage loans and line of
            credit loans.

        Foreign currency risk

        The Company has significant demand for foreign currencies, primarily
        United States dollars, due to global sourcing. However, it manages
        its exposure to foreign exchange rate risk through a comprehensive
        Foreign Exchange Risk Management Policy that sets forth specific
        guidelines and parameters, including monthly hedge percentage
        guidelines, for entering into foreign exchange hedge transactions for
        anticipated U.S. dollar-denominated purchases. The Company's
        exposure, however, to a sustained movement in the currency markets,
        is impacted by competitive forces and future prevailing market
        conditions.

        Liquidity risk

        The following table summarizes the Company's contractual maturity for
        its financial liabilities. The table includes both interest and
        principal cash flows.

        ($ in millions)        1 year      2 years      3 years      4 years
                          ---------------------------------------------------

        Deposits          $     872.2  $     160.5  $     239.9  $     470.1
        Accounts payable
         and other            1,339.8            -            -            -
        Long-term debt          309.3         21.2          8.5          6.7
        Interest payment(1)     120.5         97.6         95.5        112.3
        Other                       -          0.9            -          5.1
                          ---------------------------------------------------
        Total             $   2,641.8  $     280.2  $     343.9  $     594.2
                          ---------------------------------------------------
                          ---------------------------------------------------


        ($ in millions)       5 years   Thereafter        Total
                          --------------------------------------

        Deposits          $     326.4  $         -  $   2,069.1
        Accounts payable
         and other                  -            -      1,339.8
        Long-term debt            3.6      1,058.5      1,407.8
        Interest payment(1)      88.6        633.5      1,148.0
        Other                     1.3            -          7.3
                          --------------------------------------
        Total             $     419.9  $   1,692.0  $   5,972.0
                          --------------------------------------
                          --------------------------------------
        (1) Includes interest payments on deposits and long-term debt.

        Interest rate risk

        The Company is exposed to interest rate risk, which it manages
        through the use of interest rate swaps. The Company has a policy in
        place whereby a minimum of 75 percent of its long-term debt (term
        greater than one year) and lease obligations must be at fixed versus
        floating interest rates. The Company is in compliance with this
        policy.

    13. Merchandise Inventory

        Included in "cost of merchandise sold and all other operating
        expenses except for the undernoted items" for the 13 weeks and 52
        weeks ended January 2, 2010 is $1,670.9 million (2008 -
        $1,811.9 million) and $5,856.0 million (2008 - $6,422.0 million),
        respectively, of inventory recognized as an expense, which included
        $14.3 million (2008 - $19.3 million) and $55.7 million (2008 -
        $68.2 million), respectively, of write-downs of inventory as a result
        of net realizable value being lower than cost. Inventory write-downs
        recognized in previous years and reversed in the current quarter and
        the comparative quarter were insignificant.

    14. Supplementary Cash Flow Information

        The Company paid income taxes during the 13 weeks ended January 2,
        2010 of $28.6 million (2008 - $49.5 million) and made interest
        payments of $63.1 million (2008 - $35.5 million). For the 52 weeks
        ended January 2, 2010, the Company paid income taxes of
        $165.2 million (2008 - $220.1 million) and made interest payments of
        $173.9 million (2008 - $108.7 million), including $31.8 million
        related to the settlement of delayed start swaps and $9.4 million
        related to the early redemption of debentures.

        During the 13 weeks and 52 weeks ended January 2, 2010, property and
        equipment were acquired at an aggregate cost of $62.6 million (2008 -
        $107.8 million) and $202.8 million (2008 - $394.5 million),
        respectively. The amount of property and equipment acquired that is
        included in accounts payable and other at January 2, 2010 was
        $22.7 million (2008 - $101.2 million).

        During the 13 weeks and 52 weeks ended January 2, 2010, intangible
        software was acquired at an aggregate cost of $18.6 million (2008 -
        $27.1 million) and $70.3 million (2008 - $77.4 million),
        respectively. The amount of intangible software acquired that is
        included in accounts payable and other at January 2, 2010 was
        $2.6 million (2008 - $0.9 million).

    15. Legal Matters

        The Company and certain of its subsidiaries are party to a number of
        legal proceedings. The Company believes that each such proceeding
        constitutes a routine legal matter incidental to the business
        conducted by the Company and that the ultimate disposition of the
        proceedings will not have a material effect on its consolidated
        earnings, cash flows, or financial position.

        In October 2004, a motion for authorization to proceed with a class
        action against the Company's wholly-owned subsidiary, Canadian Tire
        Bank (the Bank), and a number of other banks was filed by a Quebec-
        based consumers' group. The class action alleges that the cash
        advance transaction fees charged by the Bank are not permitted under
        the Consumer Protection Act (Quebec). The claim seeks a return of all
        fees assessed against cardholders for cash advances, plus interest
        and punitive damages per class member. The class action was certified
        against the Bank on November 1, 2006. The class is comprised of all
        persons in Quebec who have a credit card agreement with the Bank and
        who have paid fees for cash advances in Canada or abroad since
        October 1, 2001. The Company believes it has a solid defense to the
        claim on the basis that banks are not required to comply with
        provincial legislation because banking and cost of borrowing
        disclosure is a matter of exclusive federal jurisdiction.
        Accordingly, no provision has been made for amounts, if any, that
        would be payable in the event of an adverse outcome. If adversely
        decided, the present total aggregate exposure to the Bank is expected
        to be approximately $16 million.

        In June 2009, a similar lawsuit against another financial institution
        was heard by the Quebec Supreme Court questioning the legality of
        foreign exchange fees on credit cards transactions. The Court ruled
        in favour of the plaintiff, although the decision is being appealed
        to the Quebec Court of Appeal. One consequence of this decision is
        that it may affect other outstanding lawsuits, including the action
        filed against the Bank noted in the preceding paragraph.

    16. Tax Matters

        In the ordinary course of business, the Company is subject to ongoing
        audits by tax authorities. While the Company believes that its tax
        filing positions are appropriate and supportable, from time to time,
        certain matters are reviewed and challenged by the tax authorities.

        The main issues challenged by the Canada Revenue Agency (CRA) relate
        to the tax treatment of commissions paid to foreign subsidiaries of
        the Company (covering periods from 1995 to 2007), and dividends
        received on an investment made by a wholly-owned subsidiary of the
        Company related to reinsurance (covering periods from 1999 to 2003).

        The applicable provincial tax authorities have reassessed and are
        also expected to issue further reassessments on these matters for the
        corresponding periods.

        The Company has agreed with the CRA to settle the commissions issue
        for the period 1995-2003, although the determination of the final tax
        liability pursuant to the settlement is subject to the verification
        by the CRA of certain information provided by the Company. The
        Company believes the provincial tax authorities will also reassess on
        the same basis. The Company does not have a significant exposure on
        this issue subsequent to the 2003 taxation year.

        The reassessments with respect to the dividends received issue are
        based on multiple grounds, some of which are highly unusual. The
        Company has appealed the reassessments and the matter is currently
        pending before the Tax Court of Canada. If the CRA (and applicable
        provincial tax authorities) were entirely successful in their
        reassessments - an outcome that the Company and its tax advisors
        believe to be unlikely - it is estimated that the total liability of
        the Company for additional taxes, interest and penalties could be
        approximately $193 million. Although the Company has appealed these
        reassessments, current tax legislation requires the Company to remit
        to the CRA and its provincial counterparts approximately $120 million
        related to this matter, all of which has been remitted.

        The Company regularly reviews the potential for adverse outcomes in
        respect of tax matters. The Company believes that the ultimate
        disposition of the settlements, finalization of the commissions
        issue, resolution of the dividends received issue and other tax
        matters, will not have a material adverse effect on its liquidity,
        consolidated financial position or results of operations because the
        Company believes that it has adequate provision for these tax
        matters. Should the ultimate tax liability materially differ from the
        provision, the Company's effective tax rate and its earnings could be
        affected positively or negatively in the period in which the matters
        are resolved.

        The full year provision has been reduced by $9.1 million due to the
        retroactive change in legislation relating to the taxation of gains
        realized from the disposition of shares during 2006 and 2007 and a
        revision to the prior year's estimated tax expense.


        Interest Coverage Exhibit to the Consolidated Financial Statements
        (unaudited)
        ---------------------------------------------------------------------

        The Company's long-term interest requirements for the 52 weeks ended
        January 2, 2010, after annualizing interest on long-term debt issued
        and retired during this period, amounted to $111.5 million. The
        Company's earnings before interest on long-term debt and income taxes
        for the 52 weeks ended January 2, 2010 were $608.2 million, which is
        5.5 times the Company's long-term interest requirements for this
        period.
    

%SEDAR: 00000534EF

SOURCE Canadian Tire Corporation, Limited

For further information: For further information: Media: Amy Cole, (416) 544-7655, amy.cole@cantire.com; Investors: Karen Meagher, (416) 480-8058, karen.meagher@cantire.com

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Canadian Tire Corporation, Limited

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