Canadian Tire releases fourth quarter earnings - Retail sales up 6.8%; adjusted net earnings down 3.0%



    
    2008 retail sales up 5.3%; adjusted net earnings for the year down 2.2%
    Quarterly dividend payments continue at $0.21 per share
    

    TORONTO, Feb. 12 /CNW/ - Canadian Tire Corporation, Limited (CTC, CTC.a)
today released its unaudited fourth quarter earnings and year-end results.
Despite challenging market conditions, the Company reported an increase of
6.8% in retail sales in the fourth quarter compared to the same period in
2007, reflecting strong sales of seasonal merchandise, improvements in
pricing, promotional programs and an extra sales week.
    "Our fourth quarter operating results demonstrate the unique positioning
and strength of our retail offering," said Stephen Wetmore, president and CEO,
Canadian Tire Corporation. "We enter the new year well-positioned to adapt to
and respond to the changing Canadian economy."


    
                   ----------------------------------------------------------
    Consolidated           2008(2)   Year-over-        2008(2)     Year-over-
    Highlights(1):     4th quarter  year change      full year    year change
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Retail sales     $ 3.2 billion        6.8%     $ 10.6 billion        5.3%
    Gross operating
     revenue         $ 2.6 billion        3.3%      $ 9.1 billion        6.0%
    EBITDA(3)       $277.3 million        4.1%     $892.7 million        1.3%
    Adjusted        $192.0 million        2.0%     $572.5 million      (4.5)%
     earnings
     before income
     taxes (excludes
     non-operating
     gains and
     losses)(4)
    Net earnings    $101.2 million     (22.9)%     $374.2 million      (9.1)%
    Adjusted net    $129.9 million      (3.0)%     $395.3 million      (2.2)%
     earnings
     (excludes
     non-operating
     gains and
     losses)(4)
    Basic earnings
     per share              $ 1.24     (22.9)%             $ 4.59      (9.1)%
    Adjusted basic
     earnings per
     share (excludes
     non-operating          $ 1.59      (3.0)%             $ 4.85      (2.2)%
     gains and losses)(4)


    (1) All dollar figures in this table are rounded.
    (2) Fiscal 2008 sales and earnings figures are based on a 14 week period
        for the fourth quarter and a 53-week period for the year compared to
        13 weeks for the quarter and 52 weeks for the year in 2007.
    (3) Earnings before interest, taxes, depreciation and amortization. Non-
        GAAP measure.  Please refer to Section 12.0 of the 2007 Management's
        Discussion and Analysis.
    (4) Non-GAAP measure. Please refer to Section 12.0 of the 2007
        Management's Discussion and Analysis.
    

    "While our EBITDA for the quarter and the full year grew modestly despite
the impact of increased costs associated with our strategic initiatives, our
net earnings were additionally impacted by non-cash mark-to-market adjustments
on our interest rate hedges discussed below," stated Wetmore.
    The table below provides a reconciliation of adjusted net earnings for
the fourth quarter 2008 and for 2008 as a whole.

    
    ($ in millions)                    Q4 2008    Change      2008    Change
    -------------------------------------------------------------------------
    Net earnings                         101.2   (22.9)%   $ 374.2     (9.1)%
    -------------------------------------------------------------------------
    Adjustments:
      Executive retirement obligations    (4.2)               (3.4)
      Gain on disposal of property
       and equipment                       1.9                 3.5
      Net effect of securitization
       activities                         (7.1)               (1.9)
      Delayed start interest rate
       swaps                             (19.3)              (19.3)
    -------------------------------------------------------------------------
      Adjusted net earnings              129.9    (3.0%)     395.3     (2.2)%
    -------------------------------------------------------------------------
    

    Canadian Tire uses derivative financial instruments, such as hedges and
swaps, to manage financial risks related to interest rate, foreign exchange
and equity-based compensation. As at January 3, 2009, long-term delayed start
interest rate swaps, which had been put in place 10 years ago to manage the
Company's long-term interest expense by fixing interest rates at a then
attractive rate, now no longer meet the requirements for hedge accounting and
accordingly $19.3 million after-tax was expensed in the fourth quarter.
    The Company has a number of additional financial instruments in place. At
year end, on a mark-to-market basis, the value of these items was a net in the
money position of approximately $177.8 million. This amount is substantially
included in the Accumulated Other Comprehensive Income ("AOCI") section of the
Company's Unaudited Consolidated Balance Sheet. The most significant item
included in AOCI is in the money foreign exchanges hedges, which total $149.5
million pre-tax. In the absence of a material strengthening of the Canadian
dollar versus the US dollar, this gain will positively impact the cost of
inventory purchases during the next six to nine months.
    The remaining mark-to-market adjustments on hedges that do not qualify
for hedge accounting have been reflected in operating earnings.
    Wetmore noted that "in a year that became more challenging with each
successive quarter, CTC delivered growth across virtually all of its
businesses in the fourth quarter and for the full year in 2008."

    
    Highlights of top-line performance by business

    (year-over-year percentage change)                     Q4 2008      2008
    -------------------------------------------------------------------------
    CTR retail sales(1)                                       9.1%      3.8%
    CTR gross operating revenue                               3.3%      3.6%
    CTR net shipments                                         3.0%      3.5%
    Mark's retail sales                                       5.9%      3.5%
    Petroleum retail sales                                  (3.5)%     12.2%
    Petroleum gasoline volume                                 4.1%    (0.6)%
    Financial Services' credit card sales                     1.4%      6.7%
    Financial Services' gross average receivables             6.6%      7.2%
    -------------------------------------------------------------------------
    (1) Includes sales from Canadian Tire stores, PartSource stores, sales
        from CTR's online web store and the labour portion of CTR's auto
        service sales.



    Business Overview

    CANADIAN TIRE RETAIL (CTR)(1)

    ($ in millions)     Q4        Q4
                      2008    2007(2)   Change       2008    2007(2)  Change
    -------------------------------------------------------------------------
    Retail
     sales(3)    $ 2,364.2  $ 2,166.2     9.1%  $ 7,617.8  $ 7,338.0     3.8%
    Same store
     sales(4)
     (year-over-year
     % change)        7.3%     (1.8)%                1.8%     (0.5)%
    Gross operating
     revenue     $ 1,636.4  $ 1,583.7     3.3%  $ 5,669.1  $ 5,473.5     3.6%
    Net shipments
     (year-over-year
     % change)        3.0%       0.4%                3.5%       2.3%
    Earnings before
     income taxes   $ 26.6      $81.0  (67.1)%    $ 249.2    $ 302.4  (17.6)%
    -------------------------------------------------------------------------
    Adjustments:
      Gain on disposals
       of property and
       equipment(5)    3.7        7.3                 7.4       17.6
      Executive
       retirement
       obligations   (6.2)        0.3               (5.1)      (6.2)
      Delayed start
       interest
       rate swaps   (28.7)          -              (28.7)          -
    -------------------------------------------------------------------------
    Adjusted
     earnings
     before
     income
     taxes(6)       $ 57.8     $ 73.4  (21.3)%    $ 275.6    $ 291.0   (5.3)%
    -------------------------------------------------------------------------

    (1) Fiscal 2008 sales and earnings figures are based on a 14-week period
        for the fourth quarter and a 53-week period for the year compared to
        13-weeks for the quarter and 52-weeks for the year in 2007.
    (2) 2007 figures have been restated for the implementation, on a
        retrospective basis, of the CICA HB 3031- Inventories. Please refer
        to note 2 in the Consolidated Financial Statements
    (3) Includes sales from Canadian Tire stores, PartSource stores, sales
        from CTR's online web store and the labour
        portion of CTR's auto service sales.
    (4) Same store sales include sales from stores that have been open for
        more than 53 weeks in the same location.
    (5) Includes fair market value adjustments and impairments on property
        and equipment.
    (6) Non-GAAP measure. Please refer to section 12.0 in the 2007
        Management's Discussion and Analysis.
    

    CTR's retail sales increased 9.1% over the same quarter in 2007
reflecting a significant increase in sales of winter-related merchandise in
the quarter, as well as an increase in the kitchen and tools categories.
Overall, same store sales were up 7.3% compared to the fourth quarter of 2007.
Retail sales and same store sales were particularly strong with the addition
of the 53rd trading week in 2008.
    Increases in shipment levels were lower than those for retail sales in
the quarter as CTR Dealers sought to manage their inventory levels due to the
expectation of a slowing economy.
    CTR's fourth quarter adjusted earnings were $57.8 million, down 21.3%
from the fourth quarter in 2007. The overall margin rate as a percentage of
gross operating revenue for the quarter was consistent year-over-year,
reflecting a number of items, including the benefits of purchasing with hedged
Canadian dollars and higher dealer rents. Adjusted operating earnings were
impacted by additional mark-to-market adjustments on interest rate hedges and
swaps which totaled approximately $8 million; costs associated with CTR's
long- term productivity and efficiency initiatives such as Automotive
Infrastructure, CTR Change Program and IT renewal; and higher advertising and
administrative costs due to the addition of the 53rd trading week.
    For the year, retail sales increased 3.8%, while same store sales were up
1.8%. Adjusted earnings before taxes were $275.6 million compared with $291.0
million in 2007. By year end, corporate inventories were at forecasted levels,
but still higher than in 2007 due to spring and summer seasonal carry over
products which will be shipped to CTR Dealers in 2009.
    In addition to completing 36 Concept 20/20 projects in 2008, CTR also
launched its new Smart store format in Welland and Orleans, Ontario and opened
four Small Market stores. The two new concepts have been well-received by
customers and are performing above expectations.
    In 2008, PartSource acquired 11 new corporate stores, opened 2 new hub
stores, retrofitted 3 existing stores into hub stores and converted 5
franchise stores to corporate stores bringing the total store network to 86.

    
    CANADIAN TIRE PETROLEUM (Petroleum)(3)

                        Q4         Q4
    ($ in millions)   2008       2007   Change       2008       2007   Change
    -------------------------------------------------------------------------
    Sales volume
     (millions
     of litres)      469.1      450.5     4.1%    1,727.0    1,737.5   (0.6)%
    Retail sales    $447.0     $463.1   (3.5)%   $1,988.1   $1,771.6    12.2%
    Gross operating
     revenue        $414.3     $434.1   (4.6)%   $1,871.2   $1,666.5    12.3%
    Earnings before
     income taxes     $6.1       $3.7    66.6%      $26.6      $20.5    30.4%
    -------------------------------------------------------------------------
    Adjustments:
      Loss on
       disposals of
       property and
       equipment(1) $(0.2)     $(0.7)              $(0.5)     $(2.7)
    -------------------------------------------------------------------------
    Adjusted earnings
     before income
     taxes(2)         $6.3       $4.4    43.2%      $27.1      $23.2    17.1%
    -------------------------------------------------------------------------

    (1) Includes asset impairment losses.
    (2) Non-GAAP measure. Please refer to section 12.0 of the 2007
        Management's Discussion and Analysis
    (3) Fiscal 2008 sales and earnings figures are based on a 14-week period
        for the fourth quarter and a 53-week for the year compared to 13-week
        for the quarter and 52-week for the year in 2007.
    

    Petroleum's gasoline sales volumes rose 4.1% over the comparable period
in 2007; while convenience stores sales increased 13.5% over the fourth
quarter in 2007. Both increases are primarily due to an extra week of sales in
2008.
    Petroleum recorded earnings before taxes of $6.1 million, a 66.6%
increase compared to the $3.7 million recorded in the same period in 2007.
    For the year, Petroleum posted earnings before taxes of $26.6 million, an
increase of 30.4% over the $20.5 million recorded in 2007. Performance both in
the quarter and for the full year was due to strong margins and effective
expense management.
    In addition to opening 9 new gas bars in 2008, Petroleum also rebuilt 3
gas bars and refurbished 21 existing gas bars to enhance the customer
experience and better reflect the Canadian Tire brand. Petroleum now operates
273 gas bars, 266 convenience stores and kiosks and 74 car washes.

    
    MARK'S WORK WEARHOUSE (Mark's)(5)

    ($ in millions)     Q4        Q4
                      2008    2007(6)   Change       2008    2007(6)  Change
    -------------------------------------------------------------------------
    Total
     retail
     sales(1)       $408.4     $385.7     5.9%   $1,008.5      974.9     3.5%
    Same store
     sales(2)
     (% increase
     over
     prior year)      3.9%       1.4%                0.3%       4.8%
    Gross operating
     revenue(3)     $355.7     $326.2     9.0%     $872.4     $825.3     5.7%
    -------------------------------------------------------------------------
    Earnings before
     income taxes    $71.7      $67.0     7.0%      $75.9      $98.0  (22.5)%
    -------------------------------------------------------------------------
    Adjustments:
      Loss on
       disposals
       of property and
       equipment     (0.5)      (0.2)               (0.9)      (1.0)
    -------------------------------------------------------------------------
    Adjusted earnings
     before income
     taxes(4)        $72.2      $67.2     7.4%      $76.8      $99.0  (22.4)%
    -------------------------------------------------------------------------

    (1) Includes retail sales from corporate and franchise stores.
    (2) Mark's same store sales exclude new stores, stores not open for the
        full period in each year and store closures. A 13 week to 13 week
        comparison would produce a (0.3%) same store sales decrease in the
        fourth quarter and a 52 week to 52 week comparison would produce a
        (1.4%) same stores sales decrease for the year.
    (3) Gross operating revenue includes retail sales at corporate stores
        only.
    (4) Non-GAAP measure. Please refer to section 12.0 of the 2007
        Management's Discussion and Analysis.
    (5) Fiscal 2008 sales and earnings figures are based on a 14-week period
        for the fourth quarter and a 53 week period for the year, compared to
        13 weeks for the quarter in 2007 and 52 weeks for the year in 2007.
    (6) 2007 figures have been restated for the implementation on a
        retrospective basis of the CICA HB 3031- Inventories. Please refer to
        note 2 in the Consolidated Financial Statements
    

    Mark's sales were positively impacted by the severe winter weather in
Canada for the last three weeks of the year, which led to strong sales of
industrial wear. As a result, Mark's fourth quarter retail sales increased by
5.9%, from $385.7 million last year to $408.4 million this year. Adjusted pre-
tax earnings for the quarter increased 7.4% from the comparable period in
2007, reflecting positive same store sales growth, when comparing 14 weeks to
13 weeks, improvements in margins due to improved purchase markup, fewer
markdowns and effective expense management, offset somewhat by a higher shrink
accrual.
    Despite a strong fourth quarter, adjusted pre-tax earnings for the year
were down 22.4% from $99.0 million in 2007 to $76.8 million this year, due to
a decline in the gross margin rate caused by the higher shrink of inventory in
the second quarter, flat annual same stores sales when comparing 53 weeks to
52 weeks, and higher expenses associated with new store and infrastructure
additions.
    At the end of the year, inventories on hand were well-controlled and down
11.0% on a per square foot basis year-over-year, reflecting conservative
activity on fall merchandise orders, effective markdown management and strong
sell through of industrial winter merchandise.
    In 2008, Mark's opened 18 new corporate stores, relocated 11 corporate
stores and one franchise store and expanded 6 corporate stores bringing the
total store network to 372 stores. In addition, Mark's now has three mobile
stores.

    
    CANADIAN TIRE FINANCIAL SERVICES (Financial Services)

                        Q4         Q4
    ($ in millions)   2008       2007   Change       2008       2007   Change
    -------------------------------------------------------------------------
    Total managed
     portfolio
     end of period                               $4,120.9   $3,952.2     4.3%
    Gross operating
     revenue         212.4      190.3    11.6%      820.4      745.9    10.0%
    Earnings before
     income taxes    $45.1      $32.6    38.6%     $189.5     $190.3   (0.4)%
    -------------------------------------------------------------------------
    Adjustments:

    Gain on
     disposal of shares  -          -                   -       18.4
    Net effect of
     securitization
     activities(1)  (10.6)     (10.6)               (2.9)     (14.4)
    Loss on disposals
     of property
     and equipment       -      (0.1)               (0.6)      (0.4)
    -------------------------------------------------------------------------
    Adjusted
     earnings before
     income
     taxes(2)        $55.7      $43.3    29.0%     $193.0     $186.7    3.4%
    -------------------------------------------------------------------------

    (1) Includes initial gain/loss on the sale of loans receivable,
        amortization of servicing liability, change in securitization
        reserve and gain/loss on reinvestment.
    (2) Non-GAAP measure. Please refer to section 12.0 in the 2007
        Management's Discussion and Analysis.
    

    Financial Services' total managed portfolio of loan receivables was $4.1
billion at the end of the fourth quarter, an increase of 4.3% over the
approximate $4.0 billion at the end of the comparable 2007 period. Growth in
receivables slowed during the quarter to well below historical levels due to
lower growth in credit card usage.
    The net write-off rate for the total managed portfolio on a rolling 12-
month basis was 6.34% compared to 5.76% in the comparable period. The increase
reflects the impact of deteriorating economic conditions and the associated
higher bankruptcies, as well as the refinement of the treatment of consumer
proposals effective November 2008 which increased the write-off rate by 23
bps.
    Financial Services had a very strong fourth quarter with adjusted net
earnings increasing 29.0% from $43.3 million in the comparable period last
year to $55.7 million for the quarter driven by higher revenues and tight
expense management. Fourth quarter earnings were negatively impacted by $2.4
million due to the refinement in the treatment of consumer proposals noted
above.
    Financial Services continued its retail banking pilot and at quarter-end
had more than $166 million in high rate savings accounts, $973 million in
total GIC deposits and $139 million in outstanding mortgage balances.

    2009 COMMENTARY

    OPERATIONS

    "While we are very pleased with our momentum coming into 2009,
particularly in our core retail businesses, the year ahead is projected to be
challenging for all retailers, due to the impact of the global economic
slowdown and declining consumer confidence among Canadians," said Wetmore.
    Given the unprecedented volatility in the Canadian economy and the
difficulty in assessing the potential magnitude of the impact of the above
conditions on CTC's business, Management will not be providing a specific
earnings per share guidance range for the year. Management will, however,
continue to provide information on its operations, growth and productivity
initiatives, capital plan and liquidity as appropriate throughout the year.
    If the Canadian economy and employment continues to be weak, CTC could
experience declining same store sales and margins in its retail businesses,
lower growth in receivables at CTFS as consumers reduce their credit card
usage, higher bankruptcies and write-offs and further increases in funding
costs across its businesses.

    
    CTC is well-positioned, however, in that:

    -   CTR has extremely strong consumer brands, a loyal customer base and a
        wide range of everyday products which are competitively priced and
        relevant to a cost-conscious consumer.
    -   Mark's emphasis on private label products, many of which have added
        features and benefits to improve customer satisfaction, has in the
        recent past allowed Mark's to continue to grow its business, despite
        adverse business conditions.
    -   Over the last year, Financial Services has taken numerous steps to
        reduce its exposure to accounts with higher credit risk.
    

    CTC's focus in 2009 will be based on a balanced approach to maximize
earnings potential through focused growth initiatives, strong expense
management and on-going improvements in financial flexibility, while also
continuing to invest in long-term growth and productivity.
    "Canadian Tire is financially strong and is well-positioned to manage
through this economic downturn. We have a solid cash position, manageable debt
levels and despite the potential challenges, we remain confident in our
strategy and will continue to take the prudent actions necessary to ensure
Canadian Tire is well-positioned to take full advantage of the economic
recovery when it comes," Wetmore added.

    Key initiatives in 2009 will include:

    Growth

    Despite the challenging economy, CTC continues to believe it has
significant opportunities to drive long-term growth across each of its retail
businesses. While the level of capital commitment is significantly reduced
from 2008, the following investments reflect continued confidence in the
future potential of the businesses that make up CTC:

    
    -   Growth of the CTR, Mark's, Petroleum and PartSource networks,
        including ongoing store expansions and upgrades with contemplated
        development of up to 40 projects for CTR of which approximately 6
        projects will be new to market. Square footage growth in CTR year
        over year will be approximately 2% and will be focused on further
        testing and expansion of the Smart and Small Market store concepts.
        Square footage growth at Mark's will be approximately 5% in 2009
        versus 2008.

    -   Investment in new technology and supply chain infrastructure and the
        further development of PartSource stores with expanded warehouses
        (hub stores) across Canada to drive growth at CTR and PartSource. In
        total, 16 hub stores are expected to be open by the end of 2009.

    -   At CTFS selected investment in balance transfer offers, leverage of
        the relaunched credit cards with PayPass capability and the launch of
        new credit cards to drive managed growth of loan receivables.

    Productivity and Efficiency Initiatives

    CTC plans to continue with its long-term productivity and efficiency
investments. On a net basis, including benefits, these programs are expected
to cost approximately $44.0 million in 2009. The programs include:

    -   The Automotive Infrastructure program is designed to support the
        growth of CTR's automotive business, as well as the growth of the
        PartSource chain of stores. The program, which will be fully
        implemented by 2011, will make auto parts more accessible to the
        customer, broaden and optimize the automotive parts assortment, as
        well as improve the customer experience by leveraging improvements of
        in-store technology and processes. The program will provide
        significant top and bottom line benefits for CTR, PartSource and
        Dealers as the various phases of the program are deployed over the
        next several years.

    -   The CTR Change Program represents a significant investment in new
        systems, together with major changes in processes and organizational
        structures, which will streamline major merchandising and marketing
        capabilities within CTR. For example: price management, promotional
        planning, vendor relationship management, assortment and markdown
        management.

    -   IT renewal represented by a multi-year program designed to upgrade
        the technology infrastructure which supports CTR, Petroleum and
        PartSource. Renewal will provide increased functionality, reduced
        risk, lower operating costs and a simplified overall architecture.

    -   A variety of smaller projects, all designed to manage compliance risk
        or to lower operating costs and provide business units with enhanced
        functionality for improved decision-making.
    

    OPERATING EXPENSES

    Early in 2009, CTR's new 1.5 million square foot distribution centre in
Coteau du Lac will open on time and on budget. This new facility will support
future sales growth at CTR and enable the closing of two much smaller third
party facilities in Montreal and Toronto. Net annualized incremental costs
upon opening the facility are estimated at $35.9 million pre-tax. Over the
next several years, the throughput volume of this facility will increase and
with improving productivity and declining depreciation charges, this
incremental cost will be largely mitigated.

    CAPITAL

    Total projected capital expenditures for 2009 will be in the range of
$380 million to $400 million, (down from 2008 expenditures of approximately
$472 million) the majority of which will support store and network expansions.
As of the date of this release, only $150 million of the 2009 planned
expenditures has been committed. Management will look for every opportunity to
manage this capital in the most effective way, including spending lower
amounts if considered appropriate.

    FUNDING AND LIQUIDITY

    Overall, CTC was very active in 2008 in securing various funding sources
to support the Company's on-going growth. As the year progressed and
traditional sources of financing such as the Medium Term Note ("MTN") program
and securitization were not available, CT Bank developed a new cost effective
funding source through broker deposits and by the year end had secured a
balance of $973 million in total GIC deposits with an average term of 30
months. In addition, high rate savings accounts provided an additional $166
million of funding.
    Like all companies, CTC has been exposed to significantly higher bank
fees as banks re-price the cost of financing. CTC will continue to look for
cost-effective sources of funding despite the credit markets being "frozen"
for a number of typical sources of financing. While CTC has no concerns about
its ability to fund its operations in 2009 and beyond, financing will clearly
come at a significantly increased cost. Given the unprecedented volatility in
the financial markets, CTC will be conservative in that it will ensure it has
more than sufficient access to liquidity, even if it comes at the expense of
short-term profitability.
    For 2009, no corporate debt maturities are scheduled, but late in the
year, term notes at Glacier Credit Card Trust of $625 million will mature
which will result in a corresponding increase in receivables at Financial
Services, unless the notes are re-financed.
    Working capital optimization will continue to be a focus, building on the
positive trends exhibited late in 2008 at both CTR and Mark's. Inventory
reduction in particular will be a focus for CTR as on-hand seasonal carry-over
product is flowed to CTR stores during the spring and summer season.
    To meet the operating and capital demands of 2009, management expects to
have available:

    
    -   Operating cash flow

    -   Further broker deposits

    -   High rate savings receipts

    -   Committed bank lines
    

    As of January 3rd, 2009, CTC had $1.22 billion in committed lines of
credit of which $775 million will be increased in term to two years, with
annual renewals, subject only to the completion of legal documentation, which
is expected by the end of February. The balance of the lines are committed
until early 2010 and are typically extended on a quarterly basis thereafter.

    Management will continue to monitor market conditions and consider the
following actions to lock down longer-term financing, as it warrants:

    
    -   Securitization of receivables

    -   Corporate MTNs

    -   Sale and leaseback of selected CTR store properties
    

    Short-term funding needs will be met through corporate and Glacier CP
programs.
    Overall, Management is very confident that it has sufficient liquidity to
support its funding requirements throughout 2009.

    DIVIDENDS

    The Board of Directors today declared a quarterly dividend paymentof 21
cents per share, unchanged from the amount paid in the last quarter of 2008,
which will be paid on June 1, 2009 to shareholders of record as of April 30,
2009. 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.


    FORWARD-LOOKING STATEMENTS

    This document contains forward-looking statements. These forward-looking
statements relate to, among other things, our objectives, goals, strategies,
intentions, plans, beliefs, expectations and estimates, and can generally be
identified by the use of words such as "may", "will", "could", "should",
"would", "suspect", "outlook", "expect", "intend", "estimate", "anticipate",
"believe", "plan", "forecast", "objective" and "continue" (or the negative
thereof) and words and expressions of similar import, and include statements
concerning possible or assumed future results. Certain material factors or
assumptions are applied in making forward-looking statements, and actual
results may differ materially from those expressed or implied in such
statements. Information about material factors that could cause actual results
to differ materially from expectations and about material factors or
assumptions applied in making forward-looking statements may be found in the
body of this document, as well as in the 2007 Management's Discussion and
Analysis ("MD&A").
    The forward-looking information contained in this earnings release is
presented for the purpose of assisting the Company's security holders and
financial analysts in understanding its financial position and results of
operations 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. When relying on the forward-looking statements to make
decisions with respect to the Company, investors and others should carefully
consider the foregoing factors and other uncertainties and potential events.
Although the Company believes that the expectations reflected in such forward-
looking statements are reasonable, such statements involve risks and
uncertainties, and undue reliance should not be placed on such statements. The
Company does not undertake to update any forward-looking statements, including
those statements that are incorporated by reference herein, whether written or
oral, that may be made from time to time by or on its behalf, except in
accordance with 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. EDT on
Thursday, February 12, 2009. 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), operates more than
1,200 general merchandise and apparel retail stores and gas stations in an
inter-related network of businesses engaged in retail, financial services and
petroleum. Canadian Tire Retail, Canada's most shopped general merchandise
retailer, with 475 stores operated by dealers across Canada offers a unique
mix of products and services through three specialty categories in which the
organization is the market leader - Automotive, Sports and Leisure, and Home
Products. www.canadiantire.ca offers Canadians the opportunity to research
more than 25,000 products online. PartSource is an automotive parts specialty
chain with 86 stores designed to meet the needs of purchasers of automotive
parts - professional automotive installers and serious do-it-yourselfers.
Canadian Tire Petroleum is one of the country's largest and most productive
independent retailers of gasoline, operating 273 gas bars, 266 convenience
stores and kiosks, and 74 car washes. Mark's Work Wearhouse is one of the
country's leading apparel retailers operating 372 stores in Canada. Under the
Clothes that Work(TM) marketing strategy, Mark's sells apparel and footwear in
work, work-related, casual and active-wear categories, as well as health-care
and business-to-business apparel. www.marks.com offers Canadians the
opportunity to shop for Mark's products online. Canadian Tire Financial
Services has issued over 5 million Canadian Tire MasterCards and also markets
related financial products and services for retail and petroleum customers.
Canadians can also access Financial Services online at www.ctfs.com. Over
57,000 Canadians work across Canadian Tire's organization from coast-to-coast
in the enterprise's retail, financial services, and petroleum businesses.


    
                             2008 FOURTH QUARTER
                          INTERIM REPORT FINANCIALS



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

                             14 weeks     13 weeks     53 weeks     52 weeks
    (Dollars in                 ended,       ended,       ended,       ended,
     millions except        January 3, December 29,   January 3, December 29,
     per share amounts)          2009         2007         2009         2007
    -------------------------------------------------------------------------
                                        (Restated -               (Restated -
                                           Notes 2                   Notes 2
                                            and 15)                   and 15)

    Gross operating
     revenue              $   2,587.8  $   2,505.1  $   9,121.3  $   8,606.1
    -------------------------------------------------------------------------

    Operating expenses
      Cost of merchandise
       sold and all other
       operating expenses
       except for the
       undernoted items       2,304.6      2,232.1      8,199.6      7,694.0
      Net interest
       expense (Note 7)          65.9         24.9        122.6         63.1
      Depreciation and
       amortization              61.9         57.1        228.9        206.9
      Employee Profit
       Sharing Plan               5.9          6.7         29.0         30.9
    -------------------------------------------------------------------------
    Total operating
     expenses                 2,438.3      2,320.8      8,580.1      7,994.9
    -------------------------------------------------------------------------

    Earnings before
     income taxes               149.5        184.3        541.2        611.2

    Income taxes
      Current                    68.4         72.4        209.1        210.7
      Future                    (20.1)       (19.4)       (42.1)       (11.2)
    -------------------------------------------------------------------------
    Income taxes                 48.3         53.0        167.0        199.5
    -------------------------------------------------------------------------

    Net earnings          $     101.2  $     131.3  $     374.2  $     411.7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted
     earnings per share   $      1.24  $      1.61  $      4.59  $      5.05
    -------------------------------------------------------------------------

    Weighted average
     number of Common
     and Class A
     Non-Voting Shares
     outstanding           81,538,127   81,512,263   81,517,702   81,502,273
    -------------------------------------------------------------------------



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

                             14 weeks     13 weeks     53 weeks     52 weeks
                                ended,       ended,       ended,       ended,
                            January 3, December 29,   January 3, December 29,
    (Dollars in millions)        2009         2007         2009         2007
    -------------------------------------------------------------------------
                                        (Restated -               (Restated -
                                           Notes 2                   Notes 2
                                            and 15)                   and 15)

    Cash generated from
     (used for):

    Operating activities
      Net earnings        $     101.2  $     131.3  $     374.2  $     411.7
      Items not affecting
       cash
        Depreciation and
         amortization            61.9         57.1        228.9        206.9
        Net provision for
         loans receivable
         (Note 3)                32.0         34.3         87.3         81.4
        Changes in fair
         value of
         derivative
         instruments             39.1         (7.9)        55.6         (2.2)
        Other                     9.4            -          7.9          2.5
        Employee future
         benefits expense
         (Note 4)                 1.6          1.6          6.4          6.5
        Fair market value
         adjustment and
         impairments on
         property and
         equipment                0.8          1.1          2.5          3.9
        Impairment of other
         long-term investments
         (Note 11)                1.0            -          2.0          1.3
        Gain on disposals
         of property and
         equipment               (3.7)        (7.3)        (7.8)       (17.4)
        Future income taxes     (20.1)       (19.4)       (42.1)       (11.2)
        Securitization loans
         receivable             (11.6)       (12.2)       (51.9)       (52.7)
        Gain on sales of
         loans receivable
         (Note 3)               (10.2)       (16.6)       (73.7)       (83.6)
        Gain on
         disposals/redemptions
         of shares                  -            -            -        (18.4)
    -------------------------------------------------------------------------
                                201.4        162.0        589.3        528.7
    -------------------------------------------------------------------------
    Changes in other working
     capital components         253.2        387.9       (406.9)      (467.1)
    -------------------------------------------------------------------------
    Cash generated from
     operating activities       454.6        549.9        182.4         61.6
    -------------------------------------------------------------------------

    Investing activities
        Additions to
         property and
         equipment              (61.2)      (167.7)      (436.9)      (587.7)
        Investment in loans
         receivable, net       (105.1)      (227.1)      (140.5)      (296.5)
        Purchases of stores      (8.0)        (4.6)       (36.5)       (11.4)
        Net securitization
         of loans receivable   (272.0)      (403.2)       (31.7)      (420.1)
        Long-term receivables
         and other assets       (28.7)         1.2        (27.2)        20.8
        Other long-term
         investments            (19.6)           -        (19.6)           -
        Reclassification of
         other long-term
         investments (Note 11)      -            -            -         (8.9)
        Other                    (0.7)        (0.8)        (4.2)        (3.9)
        Proceeds on
         disposition of
         property and
         equipment                9.5         10.9        240.1         30.0
        Proceeds on
         disposals/redemptions
         of shares                  -            -            -         18.4
    -------------------------------------------------------------------------
    Cash used for investing
     activities                (485.8)      (791.3)      (456.5)    (1,259.3)
    -------------------------------------------------------------------------

    Financing activities
        Net change in
         deposits (Note 15)     838.4         76.3      1,024.1        113.1
        Class A Non-Voting
         Share transactions       6.0         (4.2)         7.0          0.2
        Issuance of
         long-term debt          (0.1)       300.7          0.1        300.9
        Commercial paper       (367.2)      (135.4)           -            -
        Dividends               (17.1)       (15.2)       (66.4)       (58.8)
        Repayment of
         long-term debt          (1.9)        (2.1)      (156.2)        (4.5)
    -------------------------------------------------------------------------
    Cash generated from
     financing activities       458.1        220.1        808.6        350.9
    -------------------------------------------------------------------------

    Cash generated (used)
     in the period              426.9        (21.3)       534.5       (846.8)
    Cash and cash
     equivalents, beginning
     of period                    2.1        (84.2)      (105.5)       741.3
    -------------------------------------------------------------------------
    Cash and cash
     equivalents, end of
     period (Note 8)      $     429.0  $    (105.5) $     429.0  $    (105.5)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



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

                             14 weeks     13 weeks     53 weeks     52 weeks
                                ended,       ended,       ended,       ended,
                            January 3, December 29,   January 3, December 29,
    (Dollars in millions)        2009         2007         2009         2007
    -------------------------------------------------------------------------
                                        (Restated -               (Restated -
                                           Notes 2)                  Notes 2)

    Net earnings          $     101.2  $     131.3  $     374.2  $     411.7
    Other comprehensive
     income (loss), net
     of taxes
      Gain (loss) on
       derivatives
       designated as
       cash flow hedges,
       net of tax of
       $56.7 and $68.9
       (2007 - $4.7 and
       $40.3), respectively     117.4          3.3        139.7        (80.2)
      Reclassification
       to non-financial
       asset of (gain) loss
       on derivatives
       designated as cash
       flow hedges, net of
       tax of $18.5 and
       $10.1 (2007 - $3.3
       and $11.5),
       respectively             (38.4)         7.5        (20.5)        22.8
      Reclassification to
       earnings of loss
       (gain) on
       derivatives
       designated as cash
       flow hedges, net
       of tax of $9.2 and
       $12.0 (2007 - $0.7
       and $0.7),
       respectively              22.0          1.4         28.0         (1.2)
    -------------------------------------------------------------------------
    Other comprehensive
     income (loss)              101.0         12.2        147.2        (58.6)
    -------------------------------------------------------------------------
    Comprehensive income  $     202.2  $     143.5  $     521.4  $     353.1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



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

                                                       53 weeks     52 weeks
                                                          ended,       ended,
                                                      January 3, December 29,
    (Dollars in millions)                                  2009         2007
    -------------------------------------------------------------------------
                                                                  (Restated -
                                                                     Notes 2)
    Share capital
    Balance, beginning of period                    $     700.7  $     702.7
    Transactions, net (Note 5)                             14.7         (2.0)
    -------------------------------------------------------------------------
    Balance, end of period                          $     715.4  $     700.7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Contributed surplus
    Balance, beginning of period                    $       2.3  $       0.1
    Transactions, net                                      (2.3)         2.2
    -------------------------------------------------------------------------
    Balance, end of period                          $         -  $       2.3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Retained earnings
    Balance, beginning of period as previously
     reported                                       $   2,440.9  $   2,083.7
    Transitional adjustment on adoption of new
     accounting policies (Note 2)                          14.2         20.1
    -------------------------------------------------------------------------
    Balance, beginning of period as restated            2,455.1      2,103.8
    Net earnings for the period                           374.2        411.7
    Dividends                                             (68.4)       (60.4)
    Repurchase of Class A Non-Voting Shares                (5.4)           -
    -------------------------------------------------------------------------
    Balance, end of period                          $   2,755.5  $   2,455.1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Accumulated other comprehensive income (loss)
    Balance, beginning of period                    $     (50.0) $       8.6
    Other comprehensive income (loss) for the
     period                                               147.2        (58.6)
    -------------------------------------------------------------------------
    Balance, end of period                          $      97.2  $     (50.0)
    -------------------------------------------------------------------------
    Retained earnings and accumulated other
     comprehensive income                           $   2,852.7  $   2,405.1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



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

    (Dollars in millions)                             January 3, December 29,
    As at                                                  2009         2007
    -------------------------------------------------------------------------
                                                                  (Restated -
                                                                     Notes 2
                                                                      and 15)

    ASSETS
    Current assets
      Cash and cash equivalents (Note 8)            $     429.0  $         -
      Accounts receivable                                 824.1        715.0
      Loans receivable (Note 3)                         1,683.4      1,486.1
      Merchandise inventories (Note 2)                    917.5        778.7
      Income taxes recoverable                             64.2         53.2
      Prepaid expenses and deposits                        40.2         29.5
      Future income taxes                                  20.2         75.7
    -------------------------------------------------------------------------
      Total current assets                              3,978.6      3,138.2
    -------------------------------------------------------------------------
    Long-term receivables and other assets (Note 3)       265.4        231.2
    Other long-term investments, net (Note 11)             25.2          7.6
    Goodwill                                               70.7         51.8
    Intangible assets                                      58.4         52.4
    Property and equipment, net                         3,389.8      3,283.6
    -------------------------------------------------------------------------
      Total assets                                  $   7,788.1  $   6,764.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES
    Current liabilities
      Bank indebtedness (Note 8)                    $         -  $     105.5
      Deposits                                            540.7        111.5
      Accounts payable and other                        1,444.2      1,740.4
      Current portion of long-term debt                    14.8        156.3
    -------------------------------------------------------------------------
      Total current liabilities                         1,999.7      2,113.7
    -------------------------------------------------------------------------
    Long-term debt                                      1,373.5      1,341.8
    Future income taxes                                    45.9         71.8
    Long-term deposits                                    598.7          3.8
    Other long-term liabilities                           202.2        125.6
    -------------------------------------------------------------------------
      Total liabilities                                 4,220.0      3,656.7
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY
    Share capital (Note 5)                                715.4        700.7
    Contributed surplus                                       -          2.3
    Accumulated other comprehensive income (loss)          97.2        (50.0)
    Retained earnings                                   2,755.5      2,455.1
    -------------------------------------------------------------------------
      Total shareholders' equity                        3,568.1      3,108.1
    -------------------------------------------------------------------------
      Total liabilities and shareholders' equity    $   7,788.1  $   6,764.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    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 52
        weeks ended December 29, 2007 contained in our 2007 Annual Report.

        The preparation of the financial statements in conformity with 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 items such as
        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.

        The quarter and year ended January 3, 2009 consisted of 14 weeks and
        53 weeks, respectively while the quarter and year ended December 29,
        2007 consisted of 13 weeks and 52 weeks, respectively.

    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 52 weeks ended December 29, 2007, except
        as noted below.

        Merchandise inventories

        Effective, December 30, 2007 (the first day of the Company's 2008
        fiscal year), the Company implemented, on a retrospective basis with
        restatement, the Canadian Institute of Chartered Accountants (CICA)
        Handbook Section 3031 - Inventories, which is effective for interim
        and annual financial statements for fiscal years beginning on or
        after January 1, 2008.

        This new standard provides guidance on the determination of cost and
        requires inventories to be measured at the lower of cost and net
        realizable value. The cost of inventories includes the cost of
        purchase and other costs incurred in bringing the inventories to
        their present location and condition. Costs such as storage costs,
        administrative overheads that do not contribute to bringing the
        inventories to their present location and condition, and selling
        costs are specifically excluded from the cost of inventories and are
        expensed in the period incurred. Reversals of previous write-downs to
        net realizable value are now required when there is a subsequent
        increase in the value of inventories. The cost of inventories should
        be determined using either a first-in, first-out or weighted average
        cost formula. Techniques for the measurement of cost of inventories,
        such as the retail method or standard cost method, may be used for
        convenience if the results approximate actual cost. The new standard
        also requires additional disclosures including the accounting
        policies adopted in measuring inventories, the carrying amount of
        inventories, amount of inventories recognized as an expense during
        the period, the amount of write-downs during the period and the
        amount of any reversal of write-downs that is recognized as a
        reduction of expenses.

        The Company's new policy to correspond with the new standard is as
        follows:

        Merchandise inventories are carried at the lower of cost and net
        realizable value, with cost being determined as weighted average
        cost.

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


        (Dollars in millions)                 Increase / (Decrease)
                                   ------------------------------------------
                                    December 29, 2007      December 30, 2006
                                   ------------------------------------------
        Retained earnings                       $14.2                  $20.1
        Inventories                              22.0                   31.5
        Income taxes recoverable                 (5.8)                     -
        Future income tax assets                 (2.0)                  (5.3)
        Accounts payable and other                  -                    0.6
        Income taxes payable                        -                    5.5

        In addition, the retrospective impact on net earnings for the 13
        weeks ended December 29, 2007 was an increase of $6.3 million, or
        $0.08 per share, and for the 52 weeks ended December 29, 2007 a
        reduction of $5.9 million, or $0.07 per share.

        Included in "cost of merchandise sold and all other operating
        expenses except for the undernoted items" for the 14 weeks and 53
        weeks ended January 3, 2009 is $1,811.9 million (2007 - $1,797.6
        million) and $6,422.0 million (2007 - $6,060.8 million),
        respectively, of inventory recognized as an expense, which included
        $19.3 million (2007 - $11.0 million) and $68.2 million (2007 - $42.6
        million), respectively, of write-downs of inventory as a result of
        net realizable value being lower than cost. Inventory write-downs
        recognized in previous periods and reversed in the current quarter
        and year to date and the comparative quarter and year to date were
        insignificant.

        Financial instruments

        Effective, December 30, 2007, the Company implemented the new CICA
        Handbook Section 3862 "Financial Instruments - Disclosures" and CICA
        Handbook Section 3863 "Financial Instruments - Presentation". These
        standards replaced the existing CICA Handbook Section 3861 "Financial
        Instruments - Disclosure and Presentation". They require increased
        disclosures regarding the risks associated with financial instruments
        and how these risks are managed. These new standards carry forward
        the presentation standards for financial instruments and non-
        financial derivatives but provide additional guidance for the
        classification of financial instruments, from the perspective of the
        issuer, between liabilities and equity. The adoption of these new
        standards did not require any changes to the Company's accounting,
        but does require additional note disclosure, which is included in
        note 10.

        Capital management disclosures

        Effective, December 30, 2007, the Company implemented the new CICA
        Handbook Section 1535 "Capital Disclosures" which is effective for
        fiscal years beginning on or after October 1, 2007. The new standard
        requires entities to disclose information about their objectives,
        policies and processes for managing capital, as well as their
        compliance with any externally imposed capital requirements. The
        adoption of this new standard did not require any changes to the
        Company's accounting, but does require additional note disclosure,
        which is included in note 9.

        Future accounting changes

        Goodwill and intangible assets

        In February 2008, the CICA issued CICA HB 3064 - Goodwill and
        Intangible Assets, which replaces CICA HB 3062 - Goodwill and Other
        Intangible Assets as well as CICA HB 3450 - Research and Development.

        This new standard provides guidance on the recognition, measurement,
        presentation and disclosure of goodwill and intangible assets.

        As this standard applies to interim and annual financial statements
        for fiscal years beginning on or after October 1, 2008, the Company
        will adopt this new standard effective January 4, 2009 (the first day
        of the Company's 2009 fiscal year) retrospectively with a restatement
        of prior periods. It is anticipated that the restatement upon
        adoption will not result in a significant impact on pre-tax earnings
        and total assets.

        International Financial Reporting Standards (IFRS)

        In February 2008, the CICA announced that Canadian generally accepted
        accounting principles (GAAP) for publicly accountable enterprises
        will be replaced by International Financial Reporting Standards
        (IFRS) for fiscal years beginning on or after January 1, 2011.
        Companies will be required to provide IFRS comparative information
        for the previous fiscal year. 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
        information will be prepared under IFRS. The Company expects the
        transition to IFRS to impact accounting, financial reporting,
        internal control over financial reporting, taxes, IT 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.

    3.  Loans Receivable

        The Company sells pools of loans receivable (the Loans) to third
        party trusts (the Trusts) 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
        Loans are removed from the Consolidated Balance Sheets.

        The Company retains the interest-only strip, and, for the personal
        loan securitization, a subordinated interest in the loans sold (the
        "seller's interest") and cash deposited with one of the Trusts (the
        "securitization reserve"), which are components of retained
        interests. The interest-only strip represents the present value of
        the expected spread to be earned over the collection period on the
        loans receivable sold. The expected spread is equal to the yield
        earned, less the net write-offs and interest expense on the loans
        receivable sold. The seller's interest and securitization reserve
        provide the Trust with a source of funds in the event that the
        interest and principal collected on the Loans is not sufficient to
        pay the Trust's creditors. The Trusts' recourse to the Company is
        limited to the interest-only strip, the seller's interest and the
        securitization reserve and for the credit card loan securitization,
        the additional enhancement required to be maintained.

        The proceeds of the sale are deemed to be the cash received,
        interest-only strip and securitization reserve, less any servicing
        obligation assumed. The servicing liability represents the Company's
        estimated cost of servicing the securitized loans and is amortized
        over the life of the securitized loans. The proceeds are allocated
        between the Loans, interest-only strip, seller's interest and
        securitization reserve based on their relative fair value at the date
        of sale, with any excess or deficiency recorded as a gain or loss on
        sale, respectively.

        The Trusts have not been consolidated in these financial statements
        because either they meet the criteria for a qualified special purpose
        entity (which are exempt from consolidation) or the Company is not
        the primary beneficiary.

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

                                                          Average balances
                                                        for the      for the
       (Dollars in          Total principal amount     53 weeks     52 weeks
        millions)           of receivables as at(1)       ended        ended
                            ----------------------- -------------------------
                            January 3, December 29,   January 3, December 29,
                                 2009         2007         2009         2007
                          ------------ ------------ ------------ ------------
        Total net managed
         credit card loans  $ 3,780.4    $ 3,681.3    $ 3,601.5    $ 3,370.2
        Credit card loans
         sold                (2,216.0)    (2,233.7)    (2,592.9)    (2,602.0)
                          ------------ ------------ ------------ ------------
        Credit card loans
         held                 1,564.4      1,447.6      1,008.6        768.2

        Total net managed
         personal loans(2)       83.8        140.2        114.2        179.7
        Personal loans sold         -        (56.0)       (17.8)       (85.1)
                          ------------ ------------ ------------ ------------
        Personal loans held      83.8         84.2         96.4         94.6

        Total net managed
         mortgage loans(3)      138.8         35.4         76.0         13.1
                          ------------ ------------ ------------ ------------

        Total net managed
         line of credit
         loans(4)                20.6            -         23.7            -
                          ------------ ------------ ------------ ------------

        Total loans
         receivable           1,807.6      1,567.2    $ 1,204.7    $   875.9
                                                    ------------ ------------
                                                    ------------ ------------
        Less: long-term
         portion(5)            (124.2)       (81.1)
                          ------------ ------------

        Current portion of
         loans receivable   $ 1,683.4    $ 1,486.1
                          ------------ ------------

        (1)   Amounts shown are net of allowance for credit losses.
        (2)   Personal loans are unsecured loans that are provided to
              qualified existing credit cardholders 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. The securitized portfolio
              of personal loans of $43.7 million was repurchased in May 2008
              for $26.7 million.
        (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.
        (4)   Line of credit portfolio was purchased in January 2008 for
              $29.6 million.
        (5)   The long-term portion of loans is included in "Long-term
              receivables and other assets".

        Net credit losses for the owned portfolio for the 14 weeks and 53
        weeks ended January 3, 2009 were $32.0 million (2007 - $34.3 million)
        and $87.3 million (2007 - $81.4 million), respectively. Net credit
        losses for the total managed portfolio for the 14 weeks and 53 weeks
        ended January 3, 2009 were $67.6 million (2007 - $58.5 million) and
        $249.2 million (2007 - $217.3 million), respectively.

    4.  Employee Future Benefits

        The net employee future benefit expense for the 14 weeks and 53 weeks
        ended January 3, 2009 was $1.6 million (2007 - $1.6 million) and $6.4
        million (2007 - $6.5 million), respectively.


    5.  Share Capital

        (Dollars in millions)                         January 3, December 29,
                                                           2009         2007
                                                    -------------------------
        Authorized
          3,423,366 Common Shares
          100,000,000 Class A Non-Voting Shares
        Issued
          3,423,366 Common Shares
           (December 29, 2007 - 3,423,366)          $       0.2  $       0.2
          78,178,066 Class A Non-Voting Shares
           (December 29, 2007  - 78,048,062)              715.2        700.5
                                                    ------------ ------------
                                                    $     715.4  $     700.7
                                                    ------------ ------------
                                                    ------------ ------------

        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, to the extent
        of any previous net excess from the issue of shares, with any
        remainder allocated to retained earnings.

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

        (Dollars in                 53 weeks ended           52 weeks ended
         millions)                 January 3, 2009         December 29, 2007
                          ------------------------- -------------------------
                             Number         $          Number         $
                          ------------ ------------ ------------ ------------
        Shares outstanding
         at the beginning
         of the period     78,048,062        700.5   78,047,456        702.5
        Issued                649,804         36.9      457,606         35.1
        Repurchased          (519,800)       (29.9)    (457,000)       (34.9)
        Excess of
         repurchase price
         over issue price
         (issue price over
         repurchase price)          -          7.7            -         (2.2)
                          ------------ ------------ ------------ ------------
        Shares outstanding
         at the end of
         the period        78,178,066        715.2   78,048,062        700.5
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------

    6.  Stock-based Compensation Plans

        All stock-based compensation plans are as disclosed in the most
        recently issued annual financial statements for the 52 weeks ended
        December 29, 2007 except as follows:

        2008 Performance Share Unit Plan

        The Company has granted 2008 performance share units (2008 PSUs) to
        certain employees. Each 2008 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 2008 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 14 weeks and 53 weeks ended
        January 3, 2009, $1.4 million and $2.9 million of compensation
        expense was recorded for the 2008 PSUs, respectively.

    7.  Segmented Information - Statement of Earnings

        ---------------------------------------------------------------------
                             14 weeks     13 weeks     53 weeks     52 weeks
                                ended        ended        ended        ended
                            January 3, December 29,   January 3, December 29,
                                 2009         2007         2009         2007
                                       (Restated -               (Restated -
        (Dollars in                    Notes 2 and               Notes 2 and
         millions)                              15)                       15)
        ---------------------------------------------------------------------
        Gross operating
         revenue
          CTR             $   1,636.4  $   1,583.7  $   5,669.1  $   5,473.5
          Financial
           Services             212.4        190.3        820.4        745.9
          Petroleum             414.3        434.1      1,871.2      1,666.5
          Mark's                355.7        326.2        872.4        825.3
          Eliminations          (31.0)       (29.2)      (111.8)      (105.1)
                         ----------------------------------------------------
          Total gross
           operating
           revenue        $   2,587.8  $   2,505.1  $   9,121.3  $   8,606.1
        ---------------------------------------------------------------------
        Earnings before
         income taxes
          CTR             $      26.6  $      81.0  $     249.2  $     302.4
          Financial
           Services              45.1         32.6        189.5        190.3
           Petroleum              6.1          3.7         26.6         20.5
           Mark's                71.7         67.0         75.9         98.0
                         ----------------------------------------------------
           Total earnings
            before income
            taxes               149.5        184.3        541.2        611.2
                         ----------------------------------------------------
        Income taxes             48.3         53.0        167.0        199.5
                         ----------------------------------------------------
        Net earnings      $     101.2  $     131.3  $     374.2  $     411.7
        ---------------------------------------------------------------------
        Net Interest
         expense(1)
          CTR             $      55.5  $      18.6  $     103.2  $      59.0
          Financial
           Services               9.3          5.4         15.1          1.0
           Mark's                 1.1          0.9          4.3          3.1
                         ----------------------------------------------------
           Total interest
            expense       $      65.9  $      24.9  $     122.6  $      63.1
        ---------------------------------------------------------------------
        Depreciation and
         amortization
         expense
          CTR             $      46.9  $      44.2  $     174.6  $     159.1
          Financial
           Services               3.5          3.4         13.5         12.8
          Petroleum               4.9          4.4         17.2         16.7
          Mark's                  6.6          5.1         23.6         18.3
                         ----------------------------------------------------
          Total deprec-
           iation and
           amortization
           expense        $      61.9  $      57.1  $     228.9  $     206.9
        ---------------------------------------------------------------------
        (1)   Net interest expense includes interest on short-term and long-
              term debt, offset by passive interest income. Interest on long-
              term debt for the 14 weeks and 53 weeks ended January 3, 2009
              was $60.3 million (2007 - $20.5 million) and $117.9 million
              (2007 - $67.1 million), respectively.

        Segmented Information - Total Assets

        ---------------------------------------------------------------------
                                                      January 3, December 29,
                                                           2009         2007
                                                                 (Restated -
        (Dollars in millions)                                         Note 2)
        ---------------------------------------------------------------------

        CTR                                         $   5,802.5  $   5,732.4

        Financial Services                              2,552.8      1,852.0

        Petroleum                                         352.9        573.4

        Mark's                                            510.4        464.1

        Eliminations                                   (1,430.5)    (1,857.1)
                         ----------------------------------------------------
        Total                                       $   7,788.1  $   6,764.8
        ---------------------------------------------------------------------


    8.  Cash and Cash Equivalents (Bank Indebtedness)

        The components of cash and cash equivalents (bank indebtedness) are:

                                                      January 3, December 29,
        (Dollars in millions)                              2009         2007
                                                    ------------ ------------
        Cash                                        $      59.2  $      71.8
        Line of credit borrowings                             -       (316.8)
        Short-term investments                            369.8        139.5
                                                    ------------ ------------
        Cash and cash equivalents (bank
         indebtedness)                              $     429.0  $    (105.5)
                                                    ------------ ------------
                                                    ------------ ------------


    9.  Capital Management Disclosures

        The Company's objectives when managing capital are:

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

        Management includes the following items in its definition of capital:


        (Dollars in         January 3,              December 29,
         millions)               2009   % of total         2007   % of total
                          ------------------------ --------------------------
        Current portion
         of long-term
         debt             $      14.8         0.3%  $     156.3         3.4%
        Long-term debt        1,373.5        25.1%      1,341.8        28.8%
        Long-term deposits      598.7        11.0%          3.8         0.1%
        Other long-term
         liabilities(1)           3.2         0.1%         10.6         0.2%
        Share capital           715.4        13.1%        700.7        15.0%
        Contributed
         surplus                    -          - %          2.3         0.0%
        Components of
         accumulated other
         comprehensive
         loss(2)                    -          - %         (8.5)      (0.2)%
        Retained earnings     2,755.5        50.4%      2,455.1        52.7%
                          ------------------------ --------------------------
        Net capital under
         management       $   5,461.1       100.0%  $   4,662.1       100.0%
                          ------------------------ --------------------------
                          ------------------------ --------------------------

        (1)   Long-term liabilities that are derivative or hedge instruments
              related to capital items only.
        (2)   Components of other comprehensive loss 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 monitors
        certain key ratios to ensure they are within targeted ranges.

                                                      January 3, December 29,
                                                           2009       2007(1)
                                                     ------------------------
        Debt ratio
          Long-term debt to total capitalization(2)       34.2%        31.2%
        Coverage ratio
          Interest coverage(3)                        5.4 times   10.7 times
                                                     ------------------------

        (1)   2007 results have been restated for the implementation, on a
              retrospective basis, of CICA HB 3031 - Inventories.
        (2)   Long-term debt includes the current portion of long-term debt.
              Capitalization is based on current and long-term debt, long-
              term deposits, future income taxes, other long-term liabilities
              and shareholders' equity.
        (3)   Interest coverage is calculated on a rolling 12-month basis for
              short-term and long-term interest on debt, net of short-term
              interest income.

        As part of existing debt agreements, two key financial covenants are
        monitored on an on-going basis by management to ensure compliance
        with the agreements. The key covenants are as follows:

        -  net tangible assets coverage - 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
        - 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 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.
        -  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 two tiers of capital approved
        under OSFI's current regulatory capital guidelines. As at December
        31, 2008 (the bank's fiscal fourth quarter), 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
        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 of 12% for Tier
        1 and Total capital ratios and within internal maximum targets of
        11.0 times for the assets to capital multiple. OSFI's minimum Tier 1
        and Total capital ratios for Canadian banks are 7% and 10%,
        respectively.

        During the twelve months ended December 31, 2008, 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"). For the comparative period, the Bank
        complied with the capital guidelines issued by OSFI under the then
        current Basel I Capital Accord ("Basel I").

    10. 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)
                          ---------------------------------------------------
        (Dollars in         January 3, December 29,   January 3, December 29,
         millions)               2009         2007         2009         2007
                          ---------------------------------------------------
        Balance, beginning
         of year          $      51.5  $      30.4  $       2.7  $       2.9
        Provision for
         credit losses           78.0         75.8          9.3          5.6
        Recoveries               15.0         11.5          0.7          0.2
        Write-offs              (92.7)       (66.2)        (9.2)        (6.0)
                          ---------------------------------------------------
        Balance, end of
         period           $      51.8  $      51.5  $       3.5  $       2.7
                          ---------------------------------------------------

                               Accounts receivable            Total(2)
                          ---------------------------------------------------
        (Dollars in         January 3, December 29,   January 3, December 29,
         millions)               2009         2007         2009         2007
                          ---------------------------------------------------
        Balance, beginning
         of year          $       5.0  $       4.6  $      59.2  $      37.9
        Provision for
         credit losses            1.0          0.4         88.3         81.8
        Recoveries                0.3          0.1         16.0         11.8
        Write-offs               (3.0)        (0.1)      (104.9)       (72.3)
                          ---------------------------------------------------
        Balance, end of
         period           $       3.3  $       5.0  $      58.6  $      59.2
                          ---------------------------------------------------
        (1)   Other Loans include personal loans, mortgages loans and lines
              of credit loans.
        (2)   Relates to Company owned receivables.

        Foreign currency risk

        The Company has significant demand for foreign currencies, primarily
        United States dollars, due to global sourcing. However, it mitigates
        its exposure to foreign exchange rate risk through active hedging
        programs and through its ability, subject to competitive conditions,
        to pass on changes in foreign currency exchange rates through
        pricing.

        Liquidity risk

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

        (Dollars in
         millions)            1 year   2 years   3 years   4 years    5 years
                           --------------------------------------------------
        Deposits           $   545.7 $   162.4 $    95.6 $    39.3 $   301.5
        Accounts payable
         and other           1,425.4         -         -         -         -
        Long-term debt          14.7     458.9      21.1       8.4       6.5
        Interest payment(1)    100.1      89.5      62.7      56.1     118.8
        Other                      -       9.7         -         -       8.1
                           --------------------------------------------------
        Total              $ 2,085.9 $   720.5 $   179.4 $   103.8 $   434.9
                           --------------------------------------------------
                           --------------------------------------------------

        (Dollars in
         millions)        Thereafter     Total
                          ---------------------
        Deposits           $       - $ 1,144.5
        Accounts payable
         and other                 -   1,425.4
        Long-term debt         862.9   1,372.5
        Interest payment(1)    665.3   1,092.5
        Other                      -      17.8
                           --------------------
        Total              $ 1,528.2 $ 5,052.7
                           --------------------
                           --------------------

        (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 that requires a minimum of 75% of its long term debt (term
        greater than one year) to be at fixed versus floating interest rates.
        The Company is in compliance with the policy.

    11. Other Long-Term Investments

        Included in other long-term investments is the Company's remaining
        investment of $5.6 million (2007 - $7.6 million) in Canadian third-
        party asset-backed commercial paper ("ABCP") issued by a number of
        trusts with an original cost of $8.9 million.

        The market for Canadian third-party ABCP, which was greatly impacted
        by the global disruption in the market experienced in August 2007,
        has been addressed in a formal restructuring proposal. Based on
        information provided to investors who hold ABCP through the formal
        restructuring proposal and market changes during the year, the
        Company recorded an additional $2.0 million before-tax provision for
        impairment of the ABCP during 2008. The total charge for impairment
        is $3.3 million or 37 percent of the original value of the ABCP. The
        valuation model used by the Company to estimate the fair value of the
        ABCP incorporates discounted cash flows considering the best
        available information regarding market conditions and other factors
        that a market participant would consider for such investments. The
        valuation assumed a redemption term of approximately nine years
        corresponding to the expected maturities of the ABCP held by the
        Company. As indicated above, the Company's valuation assumed that the
        replacement notes will bear interest rates similar to short-term
        instruments and that such rates would be commensurate with the nature
        of the underlying assets and their associated cash flows. The Company
        used a weighted average discount rate of 7.35%.

        Subsequent to the year-end, on January 21, 2009, the Company received
        restructured ABCP as designed in the Montreal Accord. The $8.9
        million MAV II notes are floating rate notes with expected payouts in
        eight years in January 2017. Accrued interest owed from August 2007
        to present is expected in two payments, the first was received on
        January 21, 2009 at 3.21 per cent of face value ($0.3 million), and
        the rest will be received at a future date.

        There still remains some uncertainty regarding the value of the
        underlying assets, the amount and timing of cash flows and whether a
        secondary market can be established for the new notes and this could
        give rise to a further change in the value of the Company's
        investment in ABCP. While these changes could positively or
        negatively affect the Company's future earnings, it would not be
        considered material to the Company's overall financial position,
        given the relatively small amount of ABCP held at January 3, 2009.
        The write-down of the Company's investment in ABCP had no effect to
        date on the Company's debt covenants, debt ratings or compliance with
        banking regulations governing the Financial Services segment or
        Canadian Tire Bank. The Company does not expect a material adverse
        impact on its business as a result of the current third-party ABCP
        liquidity issue.

    12. Supplementary Cash Flow Information

        The Company paid income taxes during the 14 weeks ended January 3,
        2009 of $49.5 million (2007 - $44.4 million) and made interest
        payments of $35.5 million (2007 - $31.4 million). For the 53 weeks
        ended January 3, 2009, the Company paid income taxes of $220.1
        million (2007 - $348.4 million) and made interest payments of $108.7
        million (2007 - $88.5 million).

        During the 14 weeks ended January 3, 2009, property and equipment
        were acquired at an aggregate cost of $134.9 million (2007 - $194.8
        million). During the 53 weeks ended January 3, 2009, property and
        equipment were acquired at an aggregate cost of $471.9 million (2007
        - $592.7 million). The amount of property and equipment acquired that
        is included in accounts payable and other at January 3, 2009 was
        $102.1 million (2007 - $65.1 million).

    13. 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 the Company's
        consolidated earnings, cash flow or financial position.

    14. 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 $189.0 million. Although the Company has appealed these
        reassessments, current tax legislation requires the Company to remit
        to the CRA and its provincial counterparts approximately $117.0
        million related to this matter, of which $112.7 million had been
        remitted by the end of the quarter.


        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.

    15. Comparative Figures

        Passive interest income has been reclassified from gross operating
        revenue to net short-term interest expense on the consolidated
        statement of earnings.

        The Company's wholly-owned subsidiary, Canadian Tire Bank, began
        taking deposits from customers commencing in 2007. Previously, these
        amounts were classified in accounts payable and other in the
        consolidated balance sheets and in changes in other working capital
        components in the consolidated statements of cash flows. Commencing
        in the second quarter of 2008, these deposits are shown as current
        and long-term deposits in the consolidated balance sheets and a
        separate line in financing activities in the consolidated statements
        of cash flows. The prior period's figures have been reclassified to
        conform to the current year's presentation.

    Interest Coverage Exhibit to the Consolidated Financial Statements
    (unaudited)

        The Company's long-term interest requirements for the 53 weeks ended
        January 3, 2009, after annualizing interest on long-term debt issued
        and retired during this period, amounted to $129.2 million. The
        Company's earnings before interest on long-term debt and income taxes
        for the 53 weeks then ended were $659.0 million, which is 5.1 times
        the Company's long-term interest requirements for this period.
    

    %SEDAR: 00000534EF




For further information:

For further information: Media: Lisa Gibson, (416) 544-7655,
lgibson@cantire.com; Investors: Karen Meagher, (416) 480-8058,
karen.meagher@cantire.com

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Canadian Tire Corporation, Limited

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