Canadian Tire Corporation’s (CTC's) objectives when managing capital are:
- ensuring sufficient liquidity to support its financial obligations when due and execute its operating and strategic plans
- maintaining healthy liquidity reserves and the ability to access additional capital from multiple sources, if required; and
- minimizing the after-tax cost of capital while taking into consideration key risks including current and future industry, market, and economic risks and conditions
The Company manages its capital structure over the long term to optimize the balance among capital efficiency,
financial flexibility, and risk mitigation. Management calculates ratios to approximate the methodologies of credit
rating agencies and other market participants on a current and prospective basis. To assess its effectiveness in
managing capital, Management monitors these ratios against target ranges.
The Company has a policy to manage capital. As part of the overall management of capital, Management and the
Audit Committee of the Board of Directors review the Company’s compliance with and performance against, the
policy. In addition, periodic review of the policy is performed to ensure consistency with risk tolerances.
In order to maintain or adjust the capital structure, the Company has the flexibility to adjust discretionary capital
spending, adjust the amount of credit card loans receivables outstanding, issue debt or equity, early redeem outstanding debt, purchase the Company’s Class A Non-Voting Shares, adjust the amount of dividends paid to
shareholders, monetize various assets, and engage in sale and leaseback transactions of real estate properties.
Financial covenants are reviewed by Management on an ongoing basis to monitor compliance.
The key financial covenant for Canadian Tire Corporation, Limited is a requirement for the Retail segment to
maintain a ratio of total indebtedness to total capitalization equal to or lower than a specified maximum
percentage (as defined in the Canadian Tire Corporation, Limited’s bank credit agreements, but which excludes
consideration of CTFS Holdings Limited, CT REIT, Franchise Trust, and their respective subsidiaries).
Canadian
Tire Corporation, Limited was in compliance with all financial covenants under its credit agreements as at
April 1, 2023.
Helly Hansen is required to comply with covenants established under its bank credit agreements, and was in
compliance with all financial covenants thereunder as at April 1, 2023.
CT REIT is required to comply with covenants established under its
Declaration of Trust, Trust Indenture and bank credit agreement and was in compliance with all financial
covenants thereunder as at April 1, 2023.