Canadian Tire Corporation Announces Strong Fourth Quarter and Full Year Results

• Financial results reflect Q4 2017 performance compared to Q4 2016.
• Retail segment revenue increased $300.5 million, or 9.0%. Excluding Petroleum, retail segment revenue increased 8.5%.
• Canadian Tire Retail saw retail sales increase 3.8% and same store sales were up 3.5%.
• Retail and same store sales at FGL were up 5.5% and 5.8% respectively.
• Mark's retail sales increased 3.9% and same store sales were up 3.4%.

FULL YEAR

• Financial results reflect 2017 performance compared to 2016.
• Retail segment revenue increased $695.7 million, or 6.1%. Excluding Petroleum, retail segment revenue was up 5.1%.
• Canadian Tire Retail sales increased 3.4% and same store sales increased 2.7%.
• FGL's retail sales increased 2.4% and same store sales increased 2.0%.
• Mark's retail sales increased 4.7% and same store sales were up 4.2%.

CT REIT OVERVIEW

• As disclosed in the Q4 and year-end 2017 CT REIT earnings release on February 12, 2018, CT REIT added over 1.5 million square feet of gross leasable area (GLA) in 2017, including approximately one million square feet of GLA in the fourth quarter.

FINANCIAL SERVICES OVERVIEW

• Income before income taxes increased $4.2 million, or 4.9% in the fourth quarter, and increased $23.4 million, or 6.4%, for the full year over 2016.
• Gross average credit card receivables (GAAR) was up 8.1% in Q4 and for the full year GAAR was up 7.2% over 2016.

CAPITAL ALLOCATION

CAPITAL EXPENDITURES

• Total operating capital expenditures were $384.2 million for the year, down from $455.8 million in 2016, and slightly below the previously disclosed range of $400 million to $425 million.
• For fiscal 2017, the Company's capital expenditures required for distribution capacity of $42.5 million were within the previously announced disclosed range of $25 million to $50 million, which includes expenditures required to bring the Bolton Distribution Centre, located in the town of Caledon, Ontario (Bolton DC), into active service.

QUARTERLY DIVIDEND

On February 14, 2018, the Company declared dividends payable to holders of Class A Non-Voting Shares and Common Shares at a rate of $0.90 per share payable on June 1, 2018 to shareholders of record as of April 30, 2018. The dividend is considered an "eligible dividend" for tax purposes.

SHARE REPURCHASE

On November 9, 2017, the Company announced its intention to purchase $550 million of its Class A Non-Voting Shares (the "2018 Share Purchase Intention"), in excess of the amount required for anti-dilutive purposes, by the end of 2018. To date, the Company has purchased $169.5 million of Class A Non-Voting Shares in partial fulfilment of its 2018 Share Purchase Intention, leaving $380.5 million that is expected to be purchased during the remainder of fiscal 2018.

NORMAL COURSE ISSUER BID

The Company announced its intention to make a normal course issuer bid (the "2018 NCIB") to purchase from March 2, 2018 to March 1, 2019 up to 5.9 million Class A Non-Voting Shares, which represents 9.9% of the 59.8 million approximate public float of Class A Non-Voting Shares issued and outstanding as at February 14, 2018. There were 62,651,561 Class A Non-Voting Shares issued and outstanding as at February 14, 2018.

The Company intends to purchase Class A Non-Voting Shares under the 2018 NCIB for two purposes: (i) to fulfill the 2018 Share Purchase Intention as part of its capital management plan; and (ii) to offset the dilutive effect of the issuance of Class A Non-Voting Shares pursuant to its dividend reinvestment and stock option plans, consistent with the Company's policy.

Other than pursuant to private agreements under an issuer bid exemption order issued by a securities regulatory authority or such other means as may be permitted by a securities regulatory authority under applicable securities laws, purchases of Class A Non-Voting Shares pursuant to the 2018 NCIB will be made by means of open market transactions through the facilities of the TSX and/or alternative Canadian trading systems, if eligible, at the market price of the Class A Non-Voting Shares at the time of purchase or as otherwise permitted under the rules of the TSX and applicable securities laws. For open market transactions, the Company will be subject to a daily purchase limit of 46,795 Class A Non-Voting Shares, which represents 25% of 187,180, the average daily trading volume of the Class A Non-Voting Shares on the TSX, net of purchases made by the Company through the TSX, for the six months ended January 31, 2018. The Class A Non-Voting Shares purchased by the Company pursuant to the 2018 NCIB will be restored to the status of authorized but unissued shares.

The Company also announced that it will enter into an automatic share purchase plan (the "ASPP") with its designated broker to facilitate purchases of Class A Non-Voting Shares under the 2018 NCIB at times when the Company would not ordinarily be permitted to make such purchases due to its internal trading black-out periods or applicable regulatory restrictions. Pursuant to the ASPP, before entering into a black-out period, the Company may, but is not required to, instruct its designated broker to make purchases of Class A Non-Voting Shares under the 2018 NCIB during the ensuing black-out period. Any such instructions will be subject to specified limits, including price, volume and frequency, as determined by the Company. Within these specified limits, the designated broker has discretion with respect to the purchase of the Class A Non-Voting Shares under the 2018 NCIB during the black-out period in accordance with the rules of the TSX.

The ASPP will commence on March 2, 2018 and terminate on the earliest of the date on which: (i) the purchase limit under the 2018 NCIB has been reached; (ii) the 2018 NCIB expires; and (iii) the Company terminates the ASPP in accordance with its terms. The ASPP constitutes an "automatic securities purchase plan" under applicable Canadian securities laws.

The Company's proposed 2018 NCIB and ASPP are subject to regulatory approval. 

Under the Company's normal course issuer bid which began on March 2, 2017 and expires on March 1, 2018 (the "2017 NCIB"), the Company received approval to purchase up to 6.0 million Class A Non-Voting Shares. To date, the Company has purchased a total of 4,153,505 Class A Non-Voting Shares by means of open market transactions through the facilities of the TSX and/or alternative Canadian trading systems under the Company's 2017 NCIB, at the volume weighted average price of $155.37.

To view a PDF version of Canadian Tire Corporation's full quarterly earnings report please see: http://files.newswire.ca/116/CTC_Q4_2017.pdf

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking information that reflects management's current expectations related to matters such as future financial performance and operating results of the Company. Forward-looking statements are provided for the purposes of providing information about management's current expectations and plans and allowing investors and others to get a better understanding of our anticipated financial position, results of operations and operating environment. Readers are cautioned that such information may not be appropriate for other purposes.

Certain statements other than statements of historical facts included in this press release may constitute forward-looking information, including but not limited to, statements concerning the Company's intentions and expectations for continued growth and profitability in 2018, the Company's intention to make a normal course issuer bid with respect to the purchase of its Class A Non-Voting Shares as well as statements concerning the Company's intention to enter into an automatic securities purchase plan pursuant to which the Company's designated broker may purchase Class A Non-Voting Shares under the Company's normal course issuer bid, under the heading "Normal Course Issuer Bid".

By its very nature, forward-looking information requires us to make assumptions and is subject to inherent risks and uncertainties, which give rise to the possibility that the Company's assumptions, estimates, analyses, beliefs and opinions may not be correct and that the Company's expectations and plans will not be achieved. Although the Company believes that the forward-looking information in this press release is based on information, assumptions and beliefs which are current, reasonable and complete, this information is necessarily subject to a number of factors, risks and uncertainties that could cause actual results to differ materially from management's expectations and plans as set forth in such forward-looking information.

For more information on the risks, uncertainties and assumptions that could cause the Company's actual results to differ from current expectations, refer to section 2.11 (Risk Factors) of our Annual Information Form for fiscal 2017 and to sections 7.2.4 (Retail segment business risks), 7.3.2 (CT REIT segment business risks), 7.4.3 (Financial Services segment business risks) and 12.0 (Enterprise risk management) and all subsections thereunder of our  Management's Discussion and Analysis for the year ended December 30, 2017, as well as the Company's other public filings, available at www.sedar.com and at www.corp.canadiantire.ca.

The forward-looking statements and information contained herein are based on certain factors and assumptions as of the date hereof and do not take into account the effect that transactions or non-recurring or other special items announced or occurring after the statements are made have on the Company's business. The Company does not undertake to update any forward-looking information, whether written or oral, that may be made from time to time by it or on its behalf, to reflect new information, future events or otherwise, except as is required by applicable securities laws.

CONFERENCE CALL

Canadian Tire will conduct a conference call to discuss information included in this news release and related matters at 2:00 p.m. ET on February 15, 2018. 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.

ABOUT CANADIAN TIRE CORPORATION

Canadian Tire Corporation, Limited, (TSX:CTC.A) (TSX:CTC) or "CTC," is a family of businesses that includes a Retail segment, a Financial Services division and CT REIT. Our retail business is led by Canadian Tire, which was founded in 1922 and provides Canadians with products for life in Canada across its Living, Playing, Fixing, Automotive and Seasonal categories. PartSource and Gas+ are key parts of the Canadian Tire network. The Retail segment also includes Mark's, a leading source for casual and industrial wear, and FGL Sports (Sport Chek, Hockey Experts, Sports Experts, National Sports, Intersport, Pro Hockey Life and Atmosphere), which offers the best active wear brands. The approximately 1,700 retail and gasoline outlets are supported and strengthened by our Financial Services division and the tens of thousands of people employed across the country by the Company and its local dealers, franchisees and petroleum retailers. For more information, visit Corp.CanadianTire.ca.

CANADIAN TIRE CORPORATION, LIMITED

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Q4 2017

Condensed Consolidated Balance Sheets (Unaudited)
As at
(C$ in millions)	December 30, 2017		December 31, 2016
ASSETS
Cash and cash equivalents	$	437.0	$	829.7
Short-term investments	132.5		117.2
Trade and other receivables	681.1		690.8
Loans receivable	5,613.2		5,138.4
Merchandise inventories	1,769.8		1,710.7
Income taxes recoverable	48.3		42.5
Prepaid expenses and deposits	113.1		103.8
Assets classified as held for sale	1.1		4.6
Total current assets	8,796.1		8,637.7
Long-term receivables and other assets	717.8		763.7
Long-term investments	165.0		175.2
Goodwill and intangible assets	1,292.9		1,280.3
Investment property	344.7		266.4
Property and equipment	4,193.3		4,097.2
Deferred income taxes	114.4		82.3
Total assets	$	15,624.2	$	15,302.8
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