2024 REPORT TO SHAREHOLDERS - Canadian Tire Corporation 2024 REPORT TO SHAREHOLDERS Canadian Tire Corporation This page has been left blank intentionally. CTC | 2024 REPORT TO SHAREHOLDERS 01 MESSAGE FROM THE CHAIRMAN OF THE BOARD CHAIRMAN OF THE BOARD Message from J. Michael Owens DEAR SHAREHOLDERS, As we reflect on 2024, one thing is clear: the retail landscape in Canada is undergoing a profound and permanent transformation. The competitive pressures we once viewed as cyclical have become the norm. Global mega- competitors continue to intensify their presence in our space, consumer expectations are evolving rapidly, and economic uncertainties persist. Those who wait for perfect conditions in which to compete will be left behind. Thus, for CTC, 2024 was a reset year where the management team skillfully balanced performing in the present while preparing for the future. CTC | 2024 REPORT TO SHAREHOLDERS 02 I commend Greg Hicks and his management team for their steady hand in 2024 and significantly improved financial performance over 2023. Against a tough macroeconomic backdrop, their efforts strengthened CTC’s position and delivered strong shareholder returns. Despite their progress, they remain acutely aware of the sector challenges and are preparing accordingly. Together, management and the Board have discussed the tough question of what it takes to be a top Canadian retailer in this highly competitive, rapidly evolving environment. We challenged management to examine whether CTC has the talent, assets, and core capabilities to compete with both traditional and digital-first retailers. Management met this call, and through their rigorous evaluation emerged True North: CTC’s bold plan to transform in a transforming world. Through their True North strategy, management aims to amplify CTC’s differentiator – customer relationships – while driving higher performance and, ultimately, accelerated shareholder value. Their strategic capital allocation prioritizes customer relationships, retail performance, a symbiotic loyalty system, and a restructured organization with agility and scale. True North is about more than incremental improvement; it is about positioning CTC for sustainable, long-term success. As a Board, we fully endorse management’s True North strategy and recognize our responsibility in shaping its success. By building a Board comprising Directors with the skills for today and tomorrow, we are well-positioned to provide the insight and oversight required to support the leadership team’s performance while they transform the business. I thank my fellow Directors for their commitment to this important endeavour. I also want to thank Martha and Owen Billes whose family has built a strong, trusted Canadian company; as we move forward, we will continue to balance the power of this legacy with the promise of new opportunities. Finally, to our Shareholders: thank you for your continued trust in us. We look forward to your participation at our Annual Meeting of Shareholders. Sincerely, J. Michael Owens CHAIRMAN, BOARD OF DIRECTORS, CANADIAN TIRE CORPORATION MESSAGE FROM THE CHAIRMAN OF THE BOARD True North is about more than incremental improvement; it is about positioning CTC for sustainable, long-term success. CTC | 2024 REPORT TO SHAREHOLDERS 03 MESSAGE FROM THE PRESIDENT AND CEO PRESIDENT AND CHIEF EXECUTIVE OFFICER Message from Greg Hicks DEAR SHAREHOLDERS, As we entered 2024, we anticipated it would be a tough year, and our clear focus helped us navigate one of the most challenging consumer environments in recent history. Inflation-weary consumers remained cautious despite interest rate cuts, while geopolitical tensions amplified the complexity. Amid these challenges, we leveraged existing strengths, seized new opportunities, and identified further efficiencies. Ultimately, by controlling the controllables, investing in our future, and remaining fiercely committed to our Brand Purpose – We Are Here to Make Life in Canada Better – we ended the year stronger than we began. CTC | 2024 REPORT TO SHAREHOLDERS 04 MESSAGE FROM THE PRESIDENT AND CEO In 2024, we improved the customer experience by enhancing our omnichannel shopping capabilities. Our One Digital Platform, in-store technology upgrades, and refreshed and expanded stores delivered a more seamless customer experience. Leveraging insights from our rich, first-party data, we deepened connections with Triangle members, adding everyday value through our partnership with Petro-Canada. Our first major multi-banner loyalty campaign, Max Stack, drove record membership growth and reinforced Triangle as the backbone of our retail ecosystem. Furthermore, through our choice to retain full ownership of Canadian Tire Financial Services (CTFS), we strengthened our ability to drive sales and deliver value to loyalty members and shareholders. We also made Canadian Tire Corporation (CTC) more tech-enabled and efficient. We advanced our supply chain modernization, completing upgrades at our Calgary and Montreal distribution centres and optimizing our capacity by selling the redundant Brampton facility. Following the success of our internal chatbot, ChatCTC, we launched CeeTee, our AI-powered shopping assistant. CeeTee has already proven its worth: customers using it are far more likely to recommend and purchase products, showcasing how AI can enhance the shopping journey. Furthermore, we have built CeeTee as a scalable, proprietary platform to enable hyper-personalized, convenient, and engaging shopping across all of our retail banners. Our efforts and progress are tied to our commitment to Canadians. In 2024, we were named the most trustworthy Canadian company by Statista and Newsweek and the number one Canadian retailer in the inaugural Canadian Harris Reputation Poll. For the third consecutive year, Canadian Tire Retail (CTR) maintained its position as the number one most trusted brand within its peer set in Canada on our Brand Trust Index, which we measure by partnering with a globally renowned research firm. This recognition speaks not only to Canadians’ trust in our products, services, and shopping experiences but also in our community support. In 2024, Canadian Tire Jumpstart Charities reached the impressive milestone of four million kids helped since 2005. Through our Women’s Sport Initiative, we continued to advance gender parity in sports. Across the country, Dealers and frontline employees stepped up for their communities through everything from local fundraisers to disaster relief. I thank them for being there for Canadians – especially when they need us most. Reflecting on the past three years, we’ve made good progress advancing our business through our Better Connected strategy. Since 2022, we have invested $1.8 billion to upgrade our retail omnichannel network, supply chain, data, and technology. We refreshed a quarter of our CTR stores, bolstered our digital capabilities, and drove more efficiency in our supply chain operations. We are harnessing the power of the Triangle and partnering for scale, growing our total active membership to 11.7 million in 2024, and our active registered members to 9.2 million. Together, these achievements create a springboard for our next horizon strategy, True North, through which we will engineer a new chapter of prosperity for this iconic Canadian brand. CTC | 2024 REPORT TO SHAREHOLDERS 05 True North is a transformation strategy that builds on our strengths and the enlightenment we have gained in recent years. We now have deeper customer connections and insights, and we are equipped with the right technologies, including AI, for a new era of retail. And we are putting these capabilities to work. By reorganizing our structures and processes, we will introduce agility and scale and, over time, will generate leading shareholder value. There is no question that we are transforming and building our business in complicated times. While we see many consumer and economic green shoots, we also recognize and understand the encroaching competitive and global trade threats. In these past years, we have developed a hard-earned resilience and the capacity to navigate structural uncertainty, which gives us the conviction to invest in our company and Canada. My confidence in our future is rooted in those who stand by CTC: our Dealers, team members, customers, and communities. Thank you to Mike Owens and the Board of Directors for their guidance and Martha and Owen Billes for their unwavering support. And to our valued Shareholders: thank you for being part of this journey. In 2024, we returned close to $360 million of capital to you through dividends and announced our fifteenth consecutive dividend increase; as we move forward, we are committed to driving even more value for you by transforming CTC. While challenges persist, our commitment to making life in Canada better is iron-clad. This is not a tagline. This defines our Company. Our transformation is underway, and we are inspired by the opportunity to create a more prosperous future for all Canadians. Best, Greg Hicks PRESIDENT AND CHIEF EXECUTIVE OFFICER, CANADIAN TIRE CORPORATION MESSAGE FROM THE PRESIDENT AND CEO True North is a transformation strategy that builds on our strengths and the enlightenment we have gained in recent years. Management’s Discussion and Analysis AND Consolidated Financial Statements Management’s Discussion and Analysis Canadian Tire Corporation, Limited Fourth Quarter and Full-Year 2024 Management’s Discussion and Analysis Canadian Tire Corporation, Limited Fourth Quarter and Full-Year 2024 Table of Contents 1.0 PREFACE 1 2.0 COMPANY AND INDUSTRY OVERVIEW 3 3.0 HISTORICAL PERFORMANCE HIGHLIGHTS 4 4.0 COMPANY STRATEGY 6 5.0 FINANCIAL PERFORMANCE 7 5.1 Consolidated Financial Performance 7 5.2 Retail Segment Performance 12 5.3 Financial Services Segment Performance 19 5.4 CT REIT Segment Performance 23 6.0 BALANCE SHEET ANALYSIS, LIQUIDITY, AND CAPITAL RESOURCES 26 7.0 EQUITY 35 8.0 TAX MATTERS 36 9.0 ACCOUNTING POLICIES AND ESTIMATES 36 10.0 NON-GAAP FINANCIAL MEASURES AND RATIOS 39 11.0 RISKS AND RISK MANAGEMENT 56 12.0 INTERNAL CONTROLS AND PROCEDURES 66 13.0 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE 67 14.0 CAUTION REGARDING FORWARD-LOOKING INFORMATION 67 15.0 RELATED PARTIES 69 1.0 Preface 1.1 Definitions In this document, the terms “we”, “us”, “our”, “Company”, “Canadian Tire Corporation”, “CTC”, and “Corporation” refer to Canadian Tire Corporation, Limited, on a consolidated basis. This document also refers to the Corporation’s three reportable operating segments: the “Retail segment”, the “Financial Services segment”, and the “CT REIT segment”. The financial results for the Retail segment are delivered by the businesses operated by the Company under the Company’s retail banners, which include Canadian Tire, PartSource, Petroleum, Canadian Tire Gas+, Party City, Mark’s, Helly Hansen, SportChek, Sports Experts, Atmosphere, Pro Hockey Life (PHL), Sports Rousseau, and Hockey Experts. In this document: “Canadian Tire” refers to the general merchandise retail and services business carried on under the Canadian Tire name and trademarks. “Canadian Tire Gas+” or “Petroleum” refers to the retail petroleum business carried on under the Canadian Tire Gas+ name and trademarks, in addition to the Petro-Canada branded gas stations owned by CTC. “Canadian Tire Retail” or “CTR” refer to the general merchandise retail and services businesses carried on under the Canadian Tire, PartSource, PHL, and Party City names and trademarks. “CT REIT” refers to the business carried on by CT Real Estate Investment Trust and its subsidiaries, including CT REIT Limited Partnership (CT REIT LP). “Financial Services” refers to the business carried on by the Company’s Financial Services subsidiaries, namely Canadian Tire Bank (CTB or the Bank) and CTFS Bermuda Ltd. (CTFS Bermuda), a Bermuda reinsurance company. “Franchise Trust” refers to a legal entity sponsored by a third-party bank that originates and services loans to certain Dealers for their purchases of inventory and fixed assets (Dealer loans). “Helly Hansen” refers to the international wholesale and retail businesses that operate under the Helly Hansen and Musto names and trademarks. “Jumpstart” refers to Canadian Tire Jumpstart Charities. “Mark’s” refers to the retail and commercial wholesale businesses carried on by Mark’s Work Wearhouse Ltd. under the Mark’s, L’Équipeur, Mark’s WorkPro, L’Équipeur Pro, Mark’s Commercial and L’Équipeur Commercial names and trademarks. “Owned Brands” refers to brands owned by the Company and managed within the Retail segment. “PartSource stores” refers to stores that operate under the PartSource name and trademarks. “Party City” refers to the party supply business carried on under the Party City name and trademarks in Canada. “SportChek” refers to the retail business carried on by FGL Sports Ltd. under the SportChek, Sports Experts, Atmosphere, Sports Rousseau, Hockey Experts, and L’Entrepôt du Hockey names and trademarks, unless the context requires otherwise. Other terms that are capitalized in this document are defined the first time they are used. MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 1 This document contains trade names, trademarks, and service marks of CTC and other organizations, all of which are the property of their respective owners. Solely for convenience, the trade names, trademarks, and service marks referred to herein appear without the ® or TM symbol. 1.2 Forward-Looking Information This Management’s Discussion and Analysis (MD&A) contains information that may constitute forward-looking information within the meaning of applicable securities laws. Forward-looking information provides insights regarding Management’s current expectations and plans and allows investors and others to better understand the Company’s anticipated financial position, results of operations and operating environment. Readers are cautioned that such information may not be appropriate for other purposes. Although the Company believes that the forward-looking information in this MD&A is based on information, assumptions and beliefs that are current, reasonable, and complete, such information is necessarily subject to a number of business, economic, competitive and other risk factors that could cause actual results to differ materially from Management’s expectations and plans as set forth in such forward-looking information. The Company cannot provide assurance that any financial or operational performance, plans, or aspirations forecast will actually be achieved or, if achieved, will result in an increase in the Company’s share price. Refer to section 14.0 in this MD&A for a more detailed discussion of the Company’s use of forward-looking information. 1.3 Review and Approval by the Board of Directors The Board of Directors, on the recommendation of its Audit Committee, approved the contents of this MD&A on February 12, 2025. 1.4 Quarterly and Annual Comparisons in the MD&A Unless otherwise indicated, all comparisons of results for Q4 2024 (13 weeks ended December 28, 2024) are compared against results for Q4 2023 (13 weeks ended December 30, 2023) and all comparisons of results for the full-year 2024 (52 weeks ended December 28, 2024) are compared against results for the full-year 2023 (52 weeks ended December 30, 2023). 1.5 Accounting Framework The annual consolidated financial statements have been prepared in accordance with IFRS Accounting Standards, also referred to as Generally Accepted Accounting Principles (GAAP), using the accounting policies described in Note 3 of the 2024 Consolidated Financial Statements. 1.6 Accounting Estimates and Assumptions The preparation of the Company’s consolidated financial statements that conforms to IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB), requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of the consolidated financial statements and the reported revenue and expenses during the reporting period. Refer to section 9.1 in this MD&A for further information. 1.7 Key Performance Measures The Company uses certain key performance measures, which provide useful information to both Management and investors in measuring the financial performance and financial condition of the Company. These measures are classified as GAAP measures, non-GAAP financial measures, non-GAAP ratios, capital management measures, and supplementary financial measures, as well as non-financial measures. Readers are cautioned that the non-GAAP financial measures have no standardized meanings under IFRS Accounting Standards and, therefore, may not be comparable to similar terms used by other companies. Refer to section 10.0 for additional information on these metrics. Many of the non-GAAP financial measures in this document are adjusted to normalize the results for certain activities Management does not believe reflect the ongoing business. Unless otherwise noted, analysis of changes in normalized results applies equally to changes in the reported results. 1.8 Rounding and Percentages Rounded numbers are used throughout the MD&A. All year-over-year percentage changes are calculated on whole dollar amounts except in the presentation of Basic and Diluted earnings per share (EPS), in which year- over-year percentage changes are based on fractional amounts. MANAGEMENT’S DISCUSSION AND ANALYSIS 2 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 2.0 Company and Industry Overview Canadian Tire Corporation, Limited (TSX: CTC.A) (TSX: CTC) and its subsidiaries, are a group of companies that include a Retail segment, a Financial Services segment 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 Automotive, Fixing, Living, Playing, and Seasonal & Gardening divisions. PartSource, Canadian Tire Gas+, Party City and Pro Hockey Life are key parts of the Company’s retail network. The Retail segment also includes Mark's, Mark's WorkPro, a leading source of casual and industrial wear; and SportChek, Hockey Experts, Sports Experts and Atmosphere, which offer the best activewear brands. CTC’s 1,700 retail and gasoline outlets are supported and strengthened by our Financial Services segment and the tens of thousands of people employed across Canada and around the world by the Company, and its Canadian Tire Associate Dealers (Dealers), franchisees, and petroleum retailers. In addition, Canadian Tire Corporation owns Helly Hansen, a leading global brand in sportswear and workwear based in Oslo, Norway, whose results are included in the Retail segment. A description of the Company’s business and select core capabilities can be found in the Company’s 2024 Annual Information Form (AIF), including section 2 “Description of the Business” and on the Company’s Corporate (https:// corp.canadiantire.ca) and Investor Relations (https://corp.canadiantire.ca/investors) websites. MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 3 3.0 Historical Performance Highlights 3.1 Select Annual Consolidated Financial Trends The following table provides selected annual consolidated financial and non-financial information for the last three fiscal periods. The financial information has been prepared in accordance with IFRS Accounting Standards. (C$ in millions, except per share amounts and number of retail locations) 2024 2023 2022 Consolidated Comparable sales growth1, 2 (1.7) % (2.9) % 2.7 % Retail sales, excluding Petroleum2 $ 15,802.4 $ 16,073.3 $ 16,580.7 Revenue 16,357.8 16,656.5 17,810.6 Net income 971.9 339.1 1,182.8 Normalized net income4 3 787.7 716.1 1,250.9 Basic EPS 15.96 3.79 17.70 Diluted EPS 15.92 3.78 17.60 Normalized diluted EPS4 3 12.62 10.37 18.75 Total assets 22,240.6 21,978.3 22,102.3 Total non-current financial liabilities 8,119.6 8,345.1 7,794.8 Financial Services gross average accounts receivable (total portfolio) 2 7,373.6 7,141.5 6,654.2 Number of retail locations 1,704 1,695 1,704 Cash dividends declared per share $ 7.0250 $ 6.9250 $ 6.2750 Stock price (CTC.A)5 152.87 140.72 141.50 1 Does not include Helly Hansen. 2 For further information about this measure see section 10.2 of this MD&A. 3 Refer to section 5.1.1 in this MD&A for a description of normalizing items. 4 This is a non-GAAP financial measure. For further information and a detailed reconciliation see section 10.1.1 of this MD&A. 5 Closing share price as of the date closest to the Company’s fiscal year end. MANAGEMENT’S DISCUSSION AND ANALYSIS 4 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS REVENUE BY BANNER/UNIT* ($ millions) 2022 2023 2024 0 5,000 10,000 15,000 20,000 Canadian Tire Retail Financial Services SportChek Mark’s Petroleum *Excludes CT REIT Helly Hansen FINANCIAL SERVICES GROSS AVERAGE ACCOUNTS RECEIVABLE AND ALLOWANCE RATE ($ millions) (Allowance % rate) 12.6% 12.5% 12.4% 2022 2023 2024 5,500 5,750 6,000 6,250 6,500 6,750 7,000 7,250 7,500 7,750 8,000 8,250 8,500 10.0% 11.0% 12.0% 13.0% GAAR Allowance Rate STORES AND RETAIL REVENUE Retail revenue ($ billions) Number of stores $16.4 $15.2 $14.8 2022 2023 2024 5 6 7 8 9 10 11 12 13 14 15 16 17 1660 1680 1700 1720 1740 1760 1780 Store count Retail revenue NORMALIZED DILUTED EPS AND DIVIDENDS PER SHARE ($ per share) (Dividends $ per share) 6.2750 6.9250 7.0250 2022 2023 2024 $5 $10 $15 $20 $25 $30 $0 $1 $2 $3 $4 $5 $6 $7 $8 Normalized diluted EPS Dividends per share MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 5 4.0 Company Strategy Better Connected Strategy Since 2022, the Company has been executing its Better Connected strategy, modernizing core retail foundational elements by investing in the business, with total Operating Capital Expenditures of $1.8 billion. Over that time, the company has also returned $1.9 billion to shareholders, by way of share repurchases and dividends paid. 1 The third year of the Company’s Better Connected strategy has seen CTC: • Roll out further CTR store investment projects, taking the total to close to a quarter of the Company’s 502 CTR stores since 2022. Combined with new store formats and refreshed stores at other banners, CTC has added an incremental ~1 million of retail square feet across its banners over the same period. The Company also drove value by monetizing redundant real estate assets during 2024. • Bolster its digital capabilities, better connecting digital and physical channels and supporting $1.1 billion in annual eCommerce sales . These enhancements have contributed to an enhanced customer experience, as demonstrated by improved customer Net Promoter Scores (NPS). 2 • Continue to strengthen the Owned Brands portfolio across our banners, growing and elevating our largest brands such as Motomaster, which delivered double-digit growth in 2024. Since 2022, an additional three brands have achieved annual sales of over $100 million, taking the total to 17. Owned Brands continued to deliver a significant margin differential vis a vis National Brands. Customer attachment to these brands remains strong. • Grow the base of active registered Triangle members, from 7.8 million at the end of 2021 to 9.2 million at the end of 2024. Direct scan Loyalty Penetration2 is up by 480 bps, delivering even stronger first party data on which to build. • Continue to transform its supply chain network and invest in IT network modernization and resilience. Supply chain investments have included optimized capacity utilization and automated fulfilment at existing distribution centres (DC) and regional capacity expansion in Western Canada with a new DC in Metro Vancouver, set to open in 2025. 1 This is a non-GAAP financial measure. For further information and a detailed reconciliation see section 10.1 of this MD&A. 2 For further information about this measure see section 10.2 of this MD&A. MANAGEMENT’S DISCUSSION AND ANALYSIS 6 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 5.0 Financial Performance 5.1 Consolidated Financial Performance 5.1.1 Consolidated Financial Results (C$ in millions, except where noted) Q4 2024 Q4 2023 Change 2024 2023 Change Retail sales1 $ 5,380.5 $ 5,323.4 1.1 % $ 18,177.7 $ 18,504.1 (1.8) % Revenue $ 4,507.3 $ 4,443.0 1.5 % $ 16,357.8 $ 16,656.5 (1.8) % Gross margin dollars $ 1,529.6 $ 1,536.8 (0.5) % $ 5,618.7 $ 5,703.6 (1.5) % Gross margin rate1 33.9 % 34.6 % (65) bps 34.3 % 34.2 % 11 bps Other expense (income) $ (243.0) $ 3.2 NM2 $ (291.8) $ 34.4 NM2 Selling, general and administrative expenses 967.7 983.5 (1.6) % 3,553.3 3,675.7 (3.3) % Depreciation and amortization 192.2 196.3 (2.1) % 762.2 771.2 (1.2) % Net finance costs (income) 83.6 90.8 (7.9) % 349.0 321.5 8.6 % Change in fair value of redeemable financial instrument — — NM2 — 328.0 NM2 Income before income taxes $ 529.1 $ 263.0 101.2 % $ 1,246.0 $ 572.8 117.5 % Income tax expense (recovery) 97.4 65.8 48.0 % 274.1 233.7 17.3 % Effective tax rate1 18.4 % 25.0 % 22.0 % 40.8 % Net income $ 431.7 $ 197.2 119.0 % $ 971.9 $ 339.1 186.6 % Net income attributable to: Shareholders of Canadian Tire Corporation $ 411.5 $ 172.5 138.6 % $ 887.7 $ 213.3 316.2 % Non-controlling interests 20.2 24.7 (18.0) % 84.2 125.8 (33.1) % $ 431.7 $ 197.2 119.0 % $ 971.9 $ 339.1 186.6 % Basic EPS $ 7.40 $ 3.10 NM2 $ 15.96 $ 3.79 NM2 Diluted EPS $ 7.37 $ 3.09 NM2 $ 15.92 $ 3.78 NM2 Weighted average number of Common and Class A Non-Voting Shares outstanding: Basic 55,624,885 55,623,542 — % 55,625,884 56,228,680 (1.1) % Diluted 55,827,453 55,761,553 0.1 % 55,766,848 56,457,450 (1.2) % 1 For further information about this measure see section 10.2 of this MD&A. 2 Not meaningful. Non-Controlling Interests The following table outlines the net income attributable to the Company’s non-controlling interests. For additional details, refer to Note 15 to the Company’s 2024 Consolidated Financial Statements. (C$ in millions) Q4 2024 Q4 2023 2024 2023 Financial Services1 Non-controlling interest 0.0% (2023 – 0.0%) $ — $ 5.5 $ — $ 48.4 CT REIT Non-controlling interest 31.6% (2023 – 31.6%) 18.9 18.3 78.0 72.5 Retail segment subsidiary Non-controlling interest 50.0% (2023 – 50.0%) 1.3 0.9 6.2 4.9 Net income attributable to non-controlling interests $ 20.2 $ 24.7 $ 84.2 $ 125.8 1 During the fourth quarter of 2023, the Company completed the repurchase of Scotiabank’s 20 percent non-controlling interest in CTFS Holdings Limited (CTFS). MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 7 Normalizing Items In the fourth quarter of 2024, the Company sold a property in Brampton, Ontario (the Brampton DC), which was no longer necessary for CTC’s distribution centre requirements as a result of strategic supply chain investments and consolidation in recent years. The transaction resulted in a gain in Other expense (income) of $241.0 million, or $222.9 million net of an inventory write-down of $18.1 million to expedite a reduction of inventory and facilitate the sale, which is recorded in Cost of producing revenue. The Company also completed its strategic review of its Financial Services business, which resulted in $18.1 million in Selling, general and administrative expenses (SG&A), of which $8.7 million related to transaction costs and is recorded in the Retail segment and $9.4 million related to an asset write-off reported in the Financial Services segment related to costs associated with strategic initiatives previously pursued. There were no other normalizing items in the first three quarters of 2024. The full year results of operations in 2023 included a $21.6 million targeted headcount reduction charge recorded in SG&A, $11.3 million in costs and recoveries associated with the fire at the A.J. Billes Distribution Centre (the DC fire) recorded in Other expense (income), $33.3 million related to the impact of Bill C-47 GST/HST Legislative Amendments (GST/HST-related charge) recorded in SG&A, as well as $328.0 million Change in fair value of redeemable financial instrument prior to the repurchase of Scotiabank’s interest in CTFS. These items are discussed in detail in section 5.1.1 of the Company’s Q4 2023 MD&A. (C$ in millions) Q4 2024 Q4 2023 2024 2023 Gain on sale of Brampton DC, net of inventory write-down $ (222.9) $ — $ (222.9) $ — Expenses related to the strategic review of CTFS 18.1 — 18.1 — Targeted headcount reduction charge — 21.6 — 21.6 DC fire expense — — — 11.3 GST/HST-related charge — — — 33.3 Change in fair value of redeemable financial instrument — — — 328.0 Total income before income taxes impact $ (204.8) $ 21.6 $ (204.8) $ 394.2 Selected Normalized Metrics – Consolidated (C$ in millions, except where noted) Normalizing Items1 Normalized Q4 20242 Normalizing Items1 Normalized Q4 20232 Q4 2024 Q4 2023 Change3 Revenue $ 4,507.3 $ — $ 4,507.3 $ 4,443.0 $ — $ 4,443.0 1.5 % Cost of producing revenue 2,977.7 (18.1) 2,959.6 2,906.2 — 2,906.2 1.8 % Gross margin dollars $ 1,529.6 $ 18.1 $ 1,547.7 $ 1,536.8 $ — $ 1,536.8 0.7 % Gross margin rate4 33.9 % 40 bps 34.3 % 34.6 % — bps 34.6 % (25) bps Other expense (income) $ (243.0) $ 241.0 $ (2.0) $ 3.2 $ — $ 3.2 NM5 Selling, general and administrative expenses 967.7 (18.1) 949.6 983.5 (21.6) 961.9 (1.3) % Depreciation and amortization 192.2 — 192.2 196.3 — 196.3 (2.1) % Net finance costs (income) 83.6 — 83.6 90.8 — 90.8 (7.9) % Income before income taxes $ 529.1 $ (204.8) $ 324.3 $ 263.0 $ 21.6 $ 284.6 13.9 % Income tax expense (recovery) 97.4 (20.6) 76.8 65.8 5.7 71.5 7.4 % Net income $ 431.7 $ (184.2) $ 247.5 $ 197.2 $ 15.9 $ 213.1 16.1 % Net income attributable to shareholders of CTC 411.5 (184.2) 227.3 172.5 15.9 188.4 20.6 % Diluted EPS $ 7.37 $ (3.30) $ 4.07 $ 3.09 $ 0.29 $ 3.38 20.4 % 1 Refer to Normalizing Items table in this section for more details. 2 These normalized measures (excluding Revenue, Depreciation and amortization, and Net finance costs) are non-GAAP financial measures or non-GAAP ratios. For further information and a detailed reconciliation see section 10.1 of this MD&A. 3 Change is between normalized results. 4 For further information about this measure see section 10.2 of this MD&A. 5 Not meaningful. MANAGEMENT’S DISCUSSION AND ANALYSIS 8 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS (C$ in millions, except where noted) Normalizing Items Normalized 2024 Normalizing Items Normalized 2023 2024 2023 Change3 2 1 2 1 Revenue $ 16,357.8 $ — $ 16,357.8 $ 16,656.5 $ — $ 16,656.5 (1.8) % Cost of producing revenue 10,739.1 (18.1) 10,721.0 10,952.9 — 10,952.9 (2.1) % Gross margin dollars $ 5,618.7 $ 18.1 $ 5,636.8 $ 5,703.6 $ — $ 5,703.6 (1.2) % Gross margin rate 34.3 % 11 bps 34.5 % 34.2 % — bps 34.2 % 22 bps 4 Other expense (income) $ (291.8) $ 241.0 $ (50.8) $ 34.4 $ (11.3) $ 23.1 NM5 Selling, general and administrative expenses 3,553.3 (18.1) 3,535.2 3,675.7 (54.9) 3,620.8 (2.4) % Depreciation and amortization 762.2 — 762.2 771.2 — 771.2 (1.2) % Net finance costs (income) 349.0 — 349.0 321.5 — 321.5 8.6 % Change in fair value of redeemable financial instrument NM — — — 328.0 (328.0) — 5 Income before income taxes $ 1,246.0 $ (204.8) $ 1,041.2 $ 572.8 $ 394.2 $ 967.0 7.7 % Income tax expense (recovery) 274.1 (20.6) 253.5 233.7 17.2 250.9 1.0 % Net income $ 971.9 $ (184.2) $ 787.7 $ 339.1 $ 377.0 $ 716.1 10.0 % Net income attributable to shareholders of CTC 887.7 (184.2) 703.5 213.3 372.0 585.3 20.2 % Diluted EPS $ 15.92 $ (3.30) $ 12.62 $ 3.78 $ 6.59 $ 10.37 21.7 % 1 Refer to Normalizing Items table in this section for more details. 2 These normalized measures (excluding Revenue, Depreciation and amortization, and Net finance costs) are non-GAAP financial measures or non-GAAP ratios. For further information and a detailed reconciliation see section 10.1 of this MD&A. 3 Change is between normalized results. 4 For further information about this measure see section 10.2 of this MD&A. 5 Not meaningful. Consolidated Results Commentary Q4 Income before income taxes was $529.1 million, an increase of $266.1 million. Normalized Income before income taxes was up $39.7 million or 13.9 percent, driven by improved Retail segment profitability. Diluted EPS was $7.37 in the fourth quarter. Normalized Diluted EPS was $4.07, up 20.4 percent or $0.69 compared to the fourth quarter of 2023. On a full-year basis, Consolidated Income before income taxes was $1,246.0 million, an increase of $673.2 million. Normalized Consolidated Income before income taxes was up $74.2 million or 7.7 percent, driven by improved Retail segment profitability. Diluted EPS was $15.92, Normalized Diluted EPS was $12.62, up 21.7 percent or $2.25. Q4 2024 Full Year Consol- idated Results Summary p Diluted EPS: $4.28 per share p Diluted EPS: $12.14 per share • Consolidated Revenue was $4,507.3 million, an increase of $64.3 million or 1.5 percent. Consolidated Revenue excluding Petroleum was $4,002.6 million, an increase of 1.6 percent. The increase was driven by the Retail segment, as well as growth in the Financial Services segment. 1 • Consolidated Revenue was $16,357.8 million, a decrease of $298.7 million or 1.8 percent. Consolidated Revenue excluding Petroleum was $14,281.2 million, a decrease of 1.7 percent, driven by the Retail segment, partially offset by revenue growth in the Financial Services segment. • Consolidated Gross margin dollars were $1,529.6 million, a decrease of $7.2 million or 0.5 percent from the prior year. Normalized consolidated Gross margin increased by $10.9 million due to growth in the Retail segment, partially offset by a decline in the Financial Services segment. • Consolidated Gross margin dollars were $5,618.7 million, a decrease of $84.9 million, or 1.5 percent from the prior year. Normalized consolidated Gross margin decreased by $66.8 million due to decreases in both the Financial Services and Retail segments. 1 For further information about this measure see section 10.2 of this MD&A. MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 9 — — — 328.0 (328.0) — 5 Consolidated Results Commentary (continued) Q4 2024 Full Year • Other expense (income) was $(243.0) million, favourable by $246.2 million. Normalized Other expense (income) was favourable by $5.2 million. Consolidated SG&A were $967.7 million, a decrease of $15.8 million or 1.6 percent compared to prior year. Normalized SG&A decreased by $12.3 million driven by the Retail segment, partially offset by increases in the Financial Services segment. Depreciation and amortization was $192.2 million, a decrease of 2.1 percent from the prior year, driven by lower depreciation on Supply Chain lease assets and lower depreciation and amortization relating to IT hardware and software. Net finance costs were $83.6 million, down 7.9 percent from the prior year due to lower borrowings and lower interest rates, partially offset by higher interest on CT REIT debentures. Income tax expense was $97.4 million, up compared to $65.8 million in the prior year, due to higher Income before income taxes, partially offset by tax benefits relating to capital property dispositions in the quarter. When adjusted for normalizing items, Income tax expense increased by $5.3 million or 7.4 percent due to higher Normalized Income before income taxes. Diluted EPS was $7.37, an increase of $4.28 compared to the prior year. Normalized Diluted EPS increased by $0.69 compared to the prior year, primarily due to an increase in Net income attributable to the reasons above and the increase in the Company’s controlling interest following the Q4 2023 CTFS repurchase. • Other expense (income) was $(291.8) million, favourable by $326.2 million compared to an expense of $34.4 million in the prior year. Normalized Other expense (income) was favourable by $73.9 million driven by gain on property sales in Ontario and British Columbia and insurance recoveries related indirect costs from the DC fire incurred in 2023, as well as a one-time cost to exit a supply chain contract in the prior year. Consolidated SG&A was $3,553.3 million, a decrease of $122.4 million or 3.3 percent compared to the prior year. Normalized SG&A decreased $85.6 million. The decrease was driven by the Retail segment, partially offset by increases in the Financial Services segment. Depreciation and amortization was $762.2 million, a decrease of 1.2 percent from the prior year, driven by lower depreciation on Supply Chain lease assets and lower depreciation and amortization relating to IT hardware and software. Net finance costs were $349.0 million, up 8.6 percent from the prior year, due to higher borrowings, mainly to fund the Q4 2023 repurchase of Scotiabank’s interest in CTFS as well as higher interest on CT REIT debentures. Income tax expense was $274.1 million, up compared to $233.7 million in the prior year, primarily due to higher Income before income taxes, partially offset by tax benefits relating to capital property dispositions in the current year as well as the non-deductibility of the expense related to the change in fair value of redeemable financial instrument in 2023. When adjusted for normalizing items, Income tax expense was relatively flat. Diluted EPS was $15.92, an increase of $12.14 compared to the prior year. Normalized Diluted EPS increased by $2.25 compared to the prior year, primarily due to an increase in Net income attributable to the reasons above, and increase in the Company’s controlling interest following the Q4 2023 CTFS repurchase, as well as lower effective tax rate. • • • • • • • • • • MANAGEMENT’S DISCUSSION AND ANALYSIS 10 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 5.1.2 Consolidated Key Performance Measures (C$ in millions) increase/(decrease) Q4 2024 Q4 2023 Change Selling, general and administrative expenses $ 967.7 $ 983.5 $ (15.8) Normalized selling, general and administrative expenses 1 949.6 961.9 (12.3) Normalized SG&A as a percentage of revenue 1 2 21.1 % 21.6 % (58) bps Income before income taxes $ 529.1 $ 263.0 $ 266.1 Normalized income before income taxes 1 324.3 284.6 39.7 Normalized EBITDA as a percentage of revenue2 3 1 13.4 % 13.0 % 41 bps 1 Refer to section 5.1.1 in this MD&A for a description of normalizing items. 2 This is a non-GAAP ratio. For further information and a detailed reconciliation see section 10.1 of this MD&A. 3 Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA). (C$ in millions) increase/(decrease) 2024 2023 Change Selling, general and administrative expenses $ 3,553.3 $ 3,675.7 $ (122.4) Normalized selling, general and administrative expenses 1 3,535.2 3,620.8 (85.6) Normalized SG&A as a percentage of revenue2 1 21.6 % 21.7 % (13) bps Income before income taxes $ 1,246.0 $ 572.8 $ 673.2 Normalized income before income taxes 1 1,041.2 967.0 74.2 Normalized EBITDA as a percentage of revenue2 1 13.3 % 12.6 % 75 bps 1 Refer to section 5.1.1 in this MD&A for a description of normalizing items. 2 This is a non-GAAP ratio. For further information and a detailed reconciliation see section 10.1 of this MD&A. Changes in the percentages disclosed are driven by the related Revenue, SG&A, and Income before income taxes variances discussed under the Consolidated Results commentary in the previous charts. 5.1.3 Seasonal Trend Analysis The following table shows the consolidated financial performance of the Company by quarter for the last two years. As discussed in section 5.1.1 of the Company’s 2023 MD&A, the Company implemented a change in accounting estimate beginning in the first quarter of 2023, with no change to the historical amounts reported which resulted in a change in the phasing of quarterly earnings. (C$ in millions, except per share amounts) Q4 2024 Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Revenue $ 4,507.3 4,192.9 4,132.7 3,524.9 $ 4,443.0 $ 4,250.5 $ 4,255.8 $ 3,707.2 $ 5,340.4 Net income 431.7 220.7 223.5 96.0 197.2 (27.8) 126.9 42.8 562.6 Diluted EPS 7.37 3.59 3.56 1.38 3.09 (1.19) 1.76 0.13 9.09 MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 11 5.2 Retail Segment Performance 5.2.1 Retail Segment Financial Results (C$ in millions, except where noted) Q4 2024 Q4 2023 Change 2024 2023 Change Retail sales $ 5,380.5 1 $ 5,323.4 1.1 % $ 18,177.7 $ 18,504.1 (1.8) % Revenue $ 4,123.2 $ 4,070.0 1.3 % $ 14,812.4 $ 15,171.3 (2.4) % Gross margin dollars $ 1,336.8 $ 1,338.8 (0.1) % $ 4,798.5 $ 4,846.7 (1.0) % Gross margin rate 32.4 % 1 32.9 % (47) bps 32.4 % 31.9 % 45 bps Other expense (income) $ (282.1) $ (35.8) NM2 $ (424.4) $ (115.3) NM2 Selling, general and administrative expenses 873.5 899.2 (2.8) % 3,203.1 3,320.9 (3.5) % Depreciation and amortization 240.1 235.6 1.9 % 951.6 958.2 (0.7) % Net finance costs (income) 68.6 78.1 (12.2) % 296.0 275.9 7.3 % Income before income taxes $ 436.7 $ 161.7 170.0 % $ 772.2 $ 407.0 89.7 % 1 For further information about this measure see section 10.2 of this MD&A 2 Not meaningful. Selected Normalized Metrics – Retail (C$ in millions, except where noted) Normalizing Items1 Normalized Q4 20242 Normalizing Items1 Normalized Q4 20232 Q4 2024 Q4 2023 Change3 Revenue $ 4,123.2 $ — $ 4,123.2 $ 4,070.0 $ — $ 4,070.0 1.3 % Cost of producing revenue 2,786.4 (18.1) 2,768.3 2,731.2 — 2,731.2 1.4 % Gross margin dollars $ 1,336.8 $ 18.1 $ 1,354.9 $ 1,338.8 $ — $ 1,338.8 1.2 % Gross margin rate4 32.4 % 44 bps 32.9 % 32.9 % — bps 32.9 % (3) bps Other expense (income) $ (282.1) $ 241.0 $ (41.1) $ (35.8) $ — $ (35.8) 14.8 % Selling, general and administrative expenses 873.5 (8.7) 864.8 899.2 (19.6) 879.6 (1.7) % Depreciation and amortization 240.1 240.1 235.6 — 235.6 1.9 % Net finance costs (income) 68.6 — 68.6 78.1 — 78.1 (12.2 %) Income before income taxes $ 436.7 $ (214.2) $ 222.5 $ 161.7 $ 19.6 $ 181.3 22.7 % 1 Refer to section 5.1.1 in this MD&A for a description of normalizing items. 2 These normalized measures (excluding Revenue, Depreciation and amortization, and Net finance costs) are non-GAAP financial measures. For further information and a detailed reconciliation see section 10.1 of this MD&A. 3 Change is between normalized results. 4 For further information about this measure see section 10.2 of this MD&A. MANAGEMENT’S DISCUSSION AND ANALYSIS 12 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS (C$ in millions, except where noted) Normalizing Items1 Normalized 20242 Normalizing Items1 Normalized 20232 2024 2023 Change3 Revenue $ 14,812.4 $ — $ 14,812.4 $ 15,171.3 $ — $ 15,171.3 (2.4) % Cost of producing revenue 10,013.9 (18.1) 9,995.8 10,324.6 — 10,324.6 (3.2) % Gross margin dollars $ 4,798.5 $ 18.1 $ 4,816.6 $ 4,846.7 $ — $ 4,846.7 (0.6) % Gross margin rate4 32.4 % 11 bps 32.5 % 31.9 % — bps 31.9 % 57 bps Other expense (income) $ (424.4) $ 241.0 $ (183.4) $ (115.3) $ (11.3) $ (126.6) 44.9 % Selling, general and administrative expenses 3,203.1 (8.7) 3,194.4 3,320.9 (19.6) 3,301.3 (3.2) % Depreciation and amortization 951.6 — 951.6 958.2 — 958.2 (0.7) % Net finance costs 296.0 — 296.0 275.9 — 275.9 7.3 % Income before income taxes $ 772.2 $ (214.2) $ 558.0 $ 407.0 $ 30.9 $ 437.9 27.4 % 1 Refer to section 5.1.1 in this MD&A for a description of normalizing items. 2 These normalized measures (excluding Revenue, Depreciation and amortization, and Net finance costs) are non-GAAP financial measures. For further information and a detailed reconciliation see section 10.1 of this MD&A. 3 Change is between normalized results. 4 For further information about this measure see section 10.2 of this MD&A. MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 13 5.2.2 Retail Segment Key Performance Measures (Year-over-year percentage change, C$ in millions, except as noted) Q4 2024 Q4 2023 Change 2024 2023 Change Revenue1 $ 4,123.2 $ 4,070.0 1.3 % $ 14,812.4 $ 15,171.3 (2.4) % Revenue, excluding Petroleum 3,618.5 3,566.9 1.4 % 12,735.8 13,040.2 (2.3) % Store count 1,704 1,695 Retail square footage (in millions) 35.3 34.9 Retail sales growth2 1.1 % (7.1) % (1.8) % (3.9) % Retail sales growth, excluding Petroleum2 1.2 % (6.9) % (1.7) % (3.1) % Consolidated Comparable sales growth2, 3 1.1 % (6.8) % (1.7) % (2.9) % Retail Return on Invested Capital (ROIC)4, 5 9.4 % 7.9 % 150 bps n/a n/a Retail normalized SG&A as a percentage of revenue excluding Petroleum2,5 6 23.9 % 24.7 % (76) bps 25.1 % 25.3 % (23) bps Owned Brands penetration rate7 39.2 % 39.5 % (32) bps 37.5 % 37.5 % (6) bps Revenue1, 8 $ 2,187.2 $ 2,172.6 0.7 % $ 8,452.6 $ 8,699.3 (2.8) % Store count9 671 663 Retail square footage (in millions) 24.2 24.0 Sales per square foot2, 10 $ 497 $ 510 (2.5) % n/a n/a Retail sales growth2, 11 1.3 % (6.9) % (1.9) % (3.1) % Comparable sales growth2 1.1 % (6.8) % (2.0) % (2.9) % Revenue1 $ 546.8 $ 552.2 (1.0) % $ 1,897.7 $ 1,952.3 (2.8) % Store count 371 371 Retail square footage (in millions) 7.2 7.2 Sales per square foot2, 12 $ 315 $ 317 (0.6) % n/a n/a Retail sales growth2, 13 0.2 % (6.8) % (1.3) % (3.5) % Comparable sales growth2 0.4 % (6.4) % (0.7) % (3.2) % Revenue1, 14 $ 575.3 $ 561.7 2.4 % $ 1,523.3 $ 1,532.0 (0.6 %) Store count 383 380 Retail square footage (in millions) 3.8 3.7 Sales per square foot2, 12 $ 410 $ 408 0.5 % n/a n/a Retail sales growth2, 15 2.4 % (7.6) % — % (2.2) % Comparable sales growth2 1.8 % (7.2) % (0.1) % (1.9) % Revenue1 $ 306.5 $ 274.0 11.9 % $ 841.7 $ 837.2 0.6 % Revenue1 $ 504.7 $ 503.1 0.3 % $ 2,076.6 $ 2,131.1 (2.6) % Gas bar locations 279 281 Gross margin dollars $ 52.4 $ 52.6 (0.5) % $ 210.2 $ 214.0 (1.8) % Retail sales growth2 0.3 % (8.2) % (2.3) % (8.9) % Gasoline volume growth in litres 1.4 % (3.0) % (2.1) % (0.8) % Comparable store gasoline volume growth in litres2 0.6 % (1.4) % (2.5) % 1.8 % 1 Revenue reported for CTR, SportChek, Mark’s and Petroleum for the 13 and 52 weeks ended December 28, 2024 includes inter-segment revenue of $7.7 million (2023 – $1.1 million) and $10.9 million (2023 - $4.2 million), respectively. Helly Hansen revenue represents external revenue only. Therefore, in aggregate, revenue for CTR, SportChek, Mark’s, Petroleum, and Helly Hansen will not equal total revenue for the Retail segment. 2 For further information about this measure see section 10.2 of this MD&A. 3 Comparable sales growth excludes Petroleum. 4 Retail ROIC is calculated on a rolling 12-month basis based on normalized earnings. 5 This is a non-GAAP financial measure. For further information and a detailed reconciliation see section 10.1 of this MD&A. 6 Refer to section 5.1.1 in this MD&A for a description of normalizing items. 7 The 2023 figure has been restated to conform to the current-year presentation. 8 Revenue includes revenue from Canadian Tire, PartSource, PHL, Party City and Franchise Trust. 9 Store count includes stores from Canadian Tire, and other banner stores of 169 (2023: 161 stores). Other banners include PartSource, PHL, and Party City. 10 Sales per square foot figures are calculated on a rolling 12-month basis. Retail space excludes seasonal outdoor garden centres, auto service bays, warehouse, and administrative space. 11 Retail sales growth includes sales from Canadian Tire, PartSource, PHL, Party City and the labour portion of Canadian Tire’s auto service sales. 12 Sales per square foot figures are calculated on a rolling 12-month basis, include both corporate and franchise stores and warehouse, and administrative space. 13 Retail sales growth includes sales from both corporate and franchise stores. 14 Revenue includes the sale of goods to Mark’s franchise stores, Retail sales from Mark’s corporate stores, Mark’s wholesale revenue from its commercial division, and includes ancillary revenue relating to embroidery and alteration services. 15 Retail sales growth includes Retail sales from Mark’s corporate and franchise stores but excludes revenue relating to alteration and embroidery services. MANAGEMENT’S DISCUSSION AND ANALYSIS 14 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 9 The following chart shows the Retail segment, excluding Petroleum, Retail sales and Revenue performance by quarter for the last two years. As discussed in section 5.1.1 of the Company’s 2023 MD&A, the Company implemented a change in accounting estimate beginning in the first quarter of 2023 which impacted Revenue, excluding Petroleum, with no change to the historical amounts reported; Retail sales, excluding Petroleum were not impacted by this change. Year-over-year Retail Sales and Revenue Growth 0.2% 2.4% (2.5)% (0.1)% (1.9)% (6.9)% (3.1)% (1.9)% (4.7)% (1.4)% 1.2% (1.7)% 2.3% 5.6% (5.0)% (1.2)% 0.3% (19.7)% (7.5)% (6.6)% (4.3)% (0.8)% 1.4% 2.3% Retail sales, excluding Petroleum Revenue, excluding Petroleum Q4 2022 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 2024 MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 15 The following chart shows the Retail segment, excluding Petroleum, Retail sales and Revenue performance by quarter for the last two Retail Segment Commentary Q4 Retail income before income taxes was $436.7 million, up $275.0 million or $41.2 million on a normalized basis driven by favourable gross margin, as a result of higher revenue, lower operating expenses as well as lower net finance costs. On a full-year basis, Retail income before income taxes was $772.2 million, up $365.2 million or $120.1 million on a normalized basis, with favourable gross margin rate and lower operating expenses offsetting higher net finance costs and lower revenue. p q p Q4 2024 Full Year Retail Sales p $57.1 million or 1.1% 1.1% in Comparable sales growth Retail sales were $5,380.5 million, an increase of 1.1 percent. Excluding Petroleum, Retail sales grew, up 1.2 percent, or $55.6 million compared to the prior year, despite the impact of the Canada Post strike, driven by strong December sales across all banners; loyalty sales1 were up 4 percent. CTR Retail sales were up 1.3 percent driven by strong performance in Automotive, partially offset by declines in Living and Seasonal & Gardening. While consumer demand in discretionary categories lagged, essential categories were up 4.2 percent. SportChek retail sales were up 0.2 percent. Top performing categories were Hockey, Hydration and Lifestyle Footwear. M ark's r etail sales we re up 2.4 percent driven by growth in Industrial Businesses and Casualwear, partially offset by decline in Casual Footwear. G as + re tail s ales wer e up 0.3 percent due to higher gas volumes, partially offset by lower per litre gas prices. p $53.2 million or 1.3% 1.4% excluding Petroleum Retail Revenue was $4,123.2 million, up $53.2 million, mainly due to higher shipments at CTR, and strong Helly Hansen growth across all channels, as well as sales growth at Mark’s. q $326.4 million or 1.8% 1.7% in Comparable sales growth Retail sales were $18,177.7 million, a decrease of 1.8 percent. Excluding Petroleum, Retail sales declined 1.7 percent or $270.9 million compared to the prior year, impacted by soft consumer demand, and continued weakness in discretionary categories, as well as unseasonable weather in Q2 2024. The decrease was partly offset by sales growth in Q4. eCommerce penetration increased, with eCommerce sales stable at $1.1 billion. 1 CTR Retail sales were down 1.9 percent driven by declines in Living, Seasonal & Gardening, Fixing and Playing categories, partially offset by growth in Automotive. SportChek retail sales declined 1.3 percent led by declines in Casual Clothing, Skiing/Snowboards, and Outerwear, partially offset by growth in Footwear and Team Sports. Mark's retail sales were flat as growth in Men's Casualwear and Children's Apparel & Footwear were offset by declines in Industrial Businesses. G as + re tail s ales decl ined 2.3 percent due to lower gas volumes and lower per litre gas prices. q $358.9 million or 2.4% q 2.3% excluding Petroleum Retail Revenue was $14,812.4 million, down $358.9 million, driven by lower shipments at CTR, a decline in Petroleum revenue, and lower franchise shipments and wholesale revenue at other banners. • • • • • • • • • • Revenue • • 1 For further information about this measure see section 10.2 of this MD&A. MANAGEMENT’S DISCUSSION AND ANALYSIS 16 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS p q Gross Margin q $2.0 million or 0.1% q $48.2 million or 1.0% 47 bps in gross margin rate 45 bps in gross margin rate q 56 bps in gross margin rate, excluding Petroleum1 p 50 bps in gross margin rate, excluding Petroleum Retail Gross margin dollars were $1,336.8 million, a decrease of $2.0 million. Excluding Petroleum, Gross margin dollars were $1,284.4 million, a decrease of $1.8 million, or 0.1 percent. Normalized Gross margin dollars increased by $16.1 million driven by the increase in Revenue previously described. Retail Gross margin dollars were $4,798.5 million, a decrease of $48.2 million. Excluding Petroleum, Gross margin dollars were $4,588.3 million, a decrease of $44.4 million, or 1.0 percent. Normalized Gross margin dollars, excluding Petroleum , decreased by $26.7 million driven by the decline in Revenue previously described, partially offset by a favourable Gross margin rate. 2 Gross margin rate, excluding Petroleum, was 35.5 percent, a decrease of 56 bps. Normalized gross margin rate, excluding Petroleum, was 36.0 percent, a decrease of 7 bps, primarily due to increased promotional intensity, partially offset by favourable banner sales mix. Gross margin rate, excluding Petroleum, was 36.0 percent, an increase of 50 bps. Normalized gross margin rate, excluding Petroleum, was 36.2 percent, an increase of 64 bps driven by strong performance at CTR and Helly Hansen. Other Expense (Income) q $246.3 million or 687.5% q $309.1 million or 268.1% Other expense (income) was $(282.1) million, favourable by $246.3 million. Excluding the $(241.0) million gain on the sale of Brampton DC, Normalized Other expense (income) was favourable by $5.3 million. Other expense (income) was $(424.4) million, favourable by $309.1 million. Excluding the $(241.0) million gain on the sale of Brampton DC, as well as $11.3 million charge related to the DC fire in 2023, Normalized Other expense (income) was favourable by $56.8 million, driven by a gain on the sale of a retail property, insurance recoveries related to the indirect costs from the DC fire, as well as a one- time cost to exit a supply chain contract in the prior year. SG&A q $25.7 million or 2.8% q $117.8 million or 3.5% SG&A was $873.5 million, a decrease of $25.7 million, or 2.8 percent. Normalized SG&A decreased by $14.8 million primarily driven by lower volume-related supply chain costs as well as personnel costs. SG&A was $3,203.1 million, a decrease of $117.8 million, or 3.5 percent. Normalized SG&A decreased by $106.9 million primarily driven by lower Supply Chain and IT costs, partially offset by higher store operations. Supply chain costs decreased as a result of lower volumes and increased efficiencies, compared to the prior year when the Company incurred indirect costs relating to the DC fire. IT expenses declined mainly due to lower project and consulting costs. Personnel costs were also lower. Depreciation and amortization p $4.5 million or 1.9% q $6.6 million or 0.7 % Depreciation and amortization increased by $4.5 million. Depreciation and amortization was relatively flat to the prior year. ($951.6 million, a decrease of $6.6 million) Net Finance Costs q $9.5 million or 12.2% p $20.1 million or 7.3% Net finance costs decreased due to lower borrowings and lower interest rates. Net finance costs increased due to higher borrowings, mainly to fund the Q4 2023 repurchase of Scotiabank’s interest in CTFS. 2 This is a non-GAAP financial measure. For further information and a detailed reconciliation see section 10.1 of this MD&A. Retail Segment Commentary (continued) Q4 2024 Full Year • • • • • • • • • • • • 1 For further information about this measure see section 10.2 of this MD&A. MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 17 Gross Full Year • Retail Segment Commentary (continued) Q4 2024 Full Year • Earnings Summary p $275.0 million or 170% p $365.2 million or 89.7% Income before income taxes increased by $275.0 million. Normalized Income before income taxes increased by $41.2 million, attributable to the reasons above. Income before income taxes increased by $365.2 million. Normalized Income before income taxes increased by $120.1 million, attributable to the reasons above. 5.2.3 Retail Segment Seasonal Trend Analysis Quarterly Revenue and Income (loss) before income taxes are affected by seasonality. The following table shows the Retail’s segment financial performance of the Company by quarter for the last two years. As discussed in section 5.1.1 of the Company’s 2023 MD&A, the Company implemented a change in accounting estimate beginning in the first quarter of 2023 which impacted Revenue and Income (loss) before income taxes, with no change to the historical amounts reported. Retail sales were not affected by this change. (C$ in millions) Q4 2024 Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Retail sales $ 5,380.5 $ 4,539.5 $ 5,000.2 $ 3,257.5 $ 5,323.4 $ 4,639.3 $ 5,214.9 $ 3,326.5 $ 5,729.4 Revenue 4,123.2 3,797.8 3,754.8 3,136.6 4,070.0 3,867.3 3,896.1 3,337.9 4,990.9 Income (loss) before income taxes 436.7 164.8 170.1 0.6 161.7 239.0 85.6 (79.3) 642.4 MANAGEMENT’S DISCUSSION AND ANALYSIS 18 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 5.3 Financial Services Segment Performance 5.3.1 Financial Services Segment Financial Results (C$ in millions) Q4 2024 Q4 2023 Change 2024 2023 Change Revenue $ 388.9 $ 379.9 2.4 % $ 1,560.2 $ 1,507.3 3.5 % Gross margin dollars $ 175.4 $ 181.7 (3.5) % $ 741.9 $ 783.4 (5.3) % Gross margin rate1 45.1 % 47.8 % (275) bps 47.5 % 52.0 % (443) bps Other expense (income) $ 1.2 $ 1.4 (14.2) % $ (1.1) $ 5.5 NM2 Selling, general and administrative expenses 107.4 96.2 11.5 % 388.4 394.7 (1.6) % Depreciation and amortization 2.6 2.3 14.4 % 9.4 9.7 (3.0) % Net finance costs (income) (3.3) (3.4) (3.9) % (16.8) (11.5) 45.7 % Income before income taxes $ 67.5 $ 85.2 (20.7) % $ 362.0 $ 385.0 (6.0) % 1 For further information about this measure see section 10.2 of this MD&A. 2 Not meaningful. Selected Normalized Metrics – Financial Services (C$ in millions, except where noted) Normalizing Items1 Normalized Q4 20242 Normalizing Items1 Normalized Q4 20232 Q4 2024 Q4 2023 Change Revenue 3 $ 388.9 $ — $ 388.9 $ 379.9 $ — $ 379.9 2.4 % Gross margin dollars 175.4 — 175.4 181.7 — 181.7 (3.5) % Gross margin rate4 45.1 % — bps 45.1 % 47.8 % — bps 47.8 % (275) bps Other expense (income) $ 1.2 $ — $ 1.2 $ 1.4 $ — $ 1.4 (14.3) % Selling, general and administrative expenses 107.4 (9.4) 98.0 96.2 (2.0) 94.2 4.0 % Depreciation and amortization 2.6 — 2.6 2.3 — 2.3 14.4 % Net finance costs (income) (3.3) — (3.3) (3.4) — (3.4) (3.9) % Income before income taxes $ 67.5 $ 9.4 $ 76.9 $ 85.2 $ 2.0 $ 87.2 (11.8) % 1 Refer to section 5.1.1 for a description of normalizing items. 2 These normalized measures (Selling, general and administrative expenses and Income before income taxes) are non-GAAP financial measures. For further information and a detailed reconciliation see section 10.1 of this MD&A. 3 Change is between normalized results. 4 For further information about this measure see section 10.2 of this MD&A. (C$ in millions, except where noted) Normalizing Items1 Normalized 20242 Normalizing Items1 Normalized 20232 2024 2023 Change3 Revenue $ 1,560.2 $ — $ 1,560.2 $ 1,507.3 $ — $ 1,507.3 3.5 % Gross margin dollars 741.9 — 741.9 783.4 — 783.4 (5.3) % Gross margin rate4 47.5 % 10 bps 47.6 % 52.0 % — bps 52.0 % (443) bps Other expense (income) $ (1.1) $ — $ (1.1) $ 5.5 $ — $ 5.5 NM5 Selling, general and administrative expenses 388.4 (9.4) 379.0 394.7 (35.3) 359.4 5.5 % Depreciation and amortization 9.4 — 9.4 9.7 — 9.7 (3.0) % Net finance costs (income) (16.8) — (16.8) (11.5) — (11.5) 45.7 % Income before income taxes $ 362.0 $ 9.4 $ 371.4 $ 385.0 $ 35.3 $ 420.3 (11.6) % 1 Refer to section 5.1.1 for a description of normalizing items. 2 These normalized measures (Selling, general and administrative expenses and Income before income taxes) are non-GAAP financial measures. For further information and a detailed reconciliation see section 10.1 of this MD&A. 3 Change is between normalized results. 4 For further information about this measure see section 10.2 of this MD&A. 5 Not meaningful. MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 19 Financial Services Segment Commentary Financial Services segment Income before income taxes was $67.5 million in the quarter, a $17.7 million decrease from the prior year and down $10.3 million on a normalized basis. Higher net write-offs and operating expenses were only partially offset by higher revenues, while cardholder engagement remained strong. Cardholder performance was as expected, with increased write-offs relative to the prior year. The Past Due Credit Card Receivable (PD2+) rate remained stable ending the quarter relatively flat to the prior year. The Expected Credit Loss (ECL) allowance for loans receivable was $935.8 million, an increase of $9.6 million from Q4 2023 driven by growth in receivables. On a full-year basis, Financial Services segment Income before income taxes was $362.0 million, a decrease of $23.0 million from the prior year and down $48.9 million on a normalized basis. Continued pressure is expected in Gross margin due to higher write-offs and funding cost. p p q Q4 2024 Full Year Revenue p $9.0 million or 2.4% $52.9 million or 3.5% • • • • • • • • Revenue for the quarter was $388.9 million, an increase of $9.0 million, or 2.4 percent compared to the prior year. The increase in Revenue was mainly due to higher interest income. Revenue was $1,560.2 million, an increase of $52.9 million, or 3.5 percent compared to the prior year. The increase in Revenue was mainly due to higher interest income. Gross Margin Dollars q $6.3 million or 3.5% q $41.5 million or 5.3% Gross margin dollars were $175.4 million, a decrease of $6.3 million, or 3.5 percent from the prior year. The decrease was mainly due to higher net impairment losses and funding costs, as expected, partially offset by Revenue growth. Gross margin dollars were $741.9 million, a decrease of $41.5 million, or 5.3 percent. The decrease was mainly due to higher net impairment losses and funding costs, partially offset by Revenue growth. SG&A $11.2 million or 11.5% q $6.3 million or 1.6% SG&A was $107.4 million, an increase of $11.2 million, or 11.5 percent. Normalized SG&A increased $3.8 million, primarily due to higher marketing expenses and volume driven costs. SG&A was $388.4 million, a decrease of $6.3 million or 1.6 percent. Normalized SG&A increased $19.6 million mainly due to higher processing and other volume driven costs. Earnings Summary $17.7 million or 20.7% q $23.0 million or 6.0% Income before income taxes was $67.5 million, a decrease of $17.7 million, or 20.7 percent. Normalized Income before income taxes was $76.9 million, a decrease of $10.3 million attributable to the reasons noted above. Income before income taxes was $362.0 million, a decrease of $23.0 million or 6.0 percent. Normalized Income before income taxes was $371.4 million, a decrease of $48.9 million attributable to the reasons above. MANAGEMENT’S DISCUSSION AND ANALYSIS 20 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 5.3.2 Financial Services Segment Key Performance Measures (C$ in millions, except where noted) Q4 2024 Q4 2023 Change 2024 2023 Change Credit card sales growth1 3.5 % (0.6) % 1.6 % 0.1 % GAAR1 $ 7,465 $ 7,294 2.3 % $ 7,374 $ 7,141 3.3 % Revenue (as a percentage of GAAR)1, 2 21.2 % 21.1 % n/a n/a Average number of accounts with a balance (thousands) 2,335 2,340 (0.2) % 2,318 2,319 — % Average account balance (whole $) 1 $ 3,197 $ 3,118 2.6 % $ 3,180 $ 3,080 3.3 % Net credit card write-off rate1, 2 7.0 % 6.1 % n/a n/a Past due credit card receivables rate3 3.6 % 3.6 % n/a n/a Allowance rate 12.4 % 12.5 % n/a n/a Return on receivables1, 2 4.9 % 5.4 % n/a n/a 1 For further information about this measure see section 10.2 of this MD&A. 2 Figures are calculated on a rolling 12-month basis. 3 This is a non-GAAP financial measure. For further information and a detailed reconciliation see section 10.1 of this MD&A. Financial Services Segment Scorecard To evaluate the overall performance of the Financial Services segment, the following scorecard demonstrates how Financial Services is progressing towards achieving its strategic objectives. p p q p q p q Q4 2024 vs. Q4 2023 Growth 2.3% in GAAR 3.5% in credit card sales growth 0.2% in average number of accounts with a balance 2.6% in average account balance GAAR increased by 2.3 percent over last year driven by continued strong cardholder engagement, which resulted in increased account balances, up 2.6 percent, on strong credit card sales activity during the quarter. Credit card sales increased by 3.5 percent over the prior year driven by higher spend at external merchants partially offset by lower Petroleum sales. Performance 48 bps in Return on receivables 5 bps in Revenue as a percentage of GAAR Return on receivables decreased by 48 bps compared to the prior year due to lower full year earnings and increased GAAR. Revenue as a percentage of GAAR increased by 5 bps compared to the prior year as revenue growth outpaced growth in GAAR. Operational metrics p 3 bps in PD2+ rate 92 bps in net credit card write-off rate 12.4% allowance rate, down 12 bps p The PD2+ rate remained stable, finishing largely unchanged from the prior year. The increase in the net write-off rate compared to the prior year was driven by an expected increase in net write-off dollars relative to receivable growth. The allowance rate decreased by 12 bps to 12.4 percent, despite a $9.6 million incremental increase in the ECL allowance, remaining within the previously disclosed range of 11.5 to 13.5 percent. • • • • • • • MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 21 5.3.2 Financial Services Segment Seasonal Trend Analysis Quarterly operating net income and revenue are affected by seasonality. The following table shows the financial performance of the segment by quarter for the last two years. (C$ in millions) Q4 2024 Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Revenue $ 388.9 $ 399.1 $ 383.2 $ 389.0 $ 379.9 $ 393.1 $ 364.5 $ 369.8 $ 357.2 Income before income taxes 67.5 110.3 88.5 95.7 85.2 125.7 55.4 118.7 86.8 MANAGEMENT’S DISCUSSION AND ANALYSIS 22 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 5.4 CT REIT Segment Performance 5.4.1 CT REIT Segment Financial Results (C$ in millions) Q4 2024 Q4 2023 Change 2024 2023 Change Property revenue1 $ 145.4 $ 140.0 3.9 % $ 578.7 $ 552.8 4.7 % Property expense1 30.9 28.8 7.0 % 125.7 115.5 8.8 % General and administrative expense (G&A) 2.8 4.1 (30.9) % 16.1 15.2 5.8 % Net finance costs 31.2 29.5 5.9 % 121.8 114.0 6.8 % Fair value (gain) loss adjustment2 (54.8) 39.3 NM3 (119.1) 78.6 NM3 Income before income taxes $ 135.3 $ 38.3 NM3 $ 434.2 $ 229.5 89.3 % Adjustment from fair value to amortized cost method on Investment property Fair value gain (loss) adjustment 54.8 (39.3) NM3 119.1 (78.6) NM3 (Gain) realized on sale of property — — — (12.8) — NM3 Depreciation 20.7 19.7 5.1 % 80.9 77.7 4.1 % Income before income taxes, applying CTC accounting policies $ 59.8 $ 57.9 3.3 % $ 247.0 $ 230.4 7.2 % 1 For further information about this measure see section 10.2 of this MD&A. 2 Fair value is eliminated on consolidation. CTC recognized a $12.8 million gain on the sale of CT REIT's property in Chilliwack, British Columbia in Q2 2024, which is reclassed to Other expense (income) upon consolidation. 3 Not meaningful The following shows the CT REIT year-over-year Property revenue performance by quarter for the last two years. Year-over-year Property Revenue Growth 4.4% 3.5% 4.2% 4.0% 3.2% 3.5% 3.7% 4.9% 4.8% 5.2% 3.9% 4.7% Property Revenue Q4 2022 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 2024 MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 23 CT REIT Segment Commentary CT REIT segment income increased $1.9 million due to higher Property revenue, and lower general and administrative expenses, partially offset by higher Property expense and Net finance costs during the quarter. p • • • • • • • • • • • • Q4 2024 Full Year Property Revenue $5.4 million or 3.9% p $25.9 million or 4.7% Property revenue was $145.4 million, an increase of $5.4 million, or 3.9 percent. The increase was mainly due to property operating expense recoveries, contractual rent escalations, developments completed during 2023, and intensifications completed during 2023 and 2024. Property revenue was $578.7 million, an increase of $25.9 million, or 4.7 percent. The increase was mainly due to property operating expense and capital expenditures recoveries, contractual rent escalations, developments completed during 2023, intensifications completed during 2023 and 2024, as well as lease surrender revenue. Property Expense p $2.1 million or 7.0% p $10.2 million or 8.8% Property expense was $30.9 million, an increase of $2.1 million, or 7.0 percent due to higher property taxes. Property expense was $125.7 million, an increase of $10.2 million, or 8.8 percent due to higher operating expenses and property taxes. G&A q $1.3 million or 30.9% p $0.9 million or 5.8% G&A was $2.8 million, a decrease of $1.3 million, primarily due to lower mark-to-market of variable compensation expense. G&A was $16.1 million, an increase of $0.9 million, primarily due to increased personnel compensation. Depreciation p $1.0 million or 5.1% p $3.2 million or 4.1% Depreciation was $20.7 million, an increase of $1.0 million or 5.1 percent due to intensifications, developments, and property acquisition completed during 2023 and 2024. Depreciation was $80.9 million, an increase of $3.2 million or 4.1 percent due to intensifications and developments completed during 2023 and 2024. Net Finance Costs p $1.7 million or 5.9% p $7.8 million or 6.8% Net finance costs were $31.2 million, an increase of $1.7 million or 5.9 percent, driven by the issuance of Series I senior unsecured debentures in Q4 2023, higher interest rates on Series 4 Class C LP Units refinanced in Q2, and lower capitalized interest on properties under development, partially offset by lower Credit Facilities interest costs due to a lower outstanding balance. Net finance costs were $121.8 million, an increase of $7.8 million or 6.8 percent, driven by the issuance of Series I senior unsecured debentures in Q4 2023, lower capitalized interest on properties under development, and higher interest rates on Series 4 Class C LP Units refinanced in Q2, partially offset by lower Credit Facilities interest costs due to a lower outstanding balance, and higher interest earned with cash on hand during the year. Earnings Summary p $1.9 million or 3.3% p $16.6 million or 7.2% Income before income taxes was $59.8 million, an increase of $1.9 million or 3.3 percent attributable to the reasons above. Income before income taxes was $247.0 million, an increase of $16.6 million or 7.2 percent attributable to the reasons above. MANAGEMENT’S DISCUSSION AND ANALYSIS 24 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 5.4.2 CT REIT Segment Key Performance Measures MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 25 Net Operating Income (NOI) Funds from Operations (FFO) Adjusted Funds from Operations (AFFO) (C$ in millions) Q4 2024 Q4 2023 Change 2024 2023 Change Net operating income1 $ 115.6 $ 111.5 3.6 % $ 457.6 $ 439.0 4.3 % Funds from operations1 79.0 77.7 1.7 % 314.7 307.9 2.2 % Adjusted funds from operations1 73.0 71.5 2.1 % 292.4 283.4 3.2 % 1 This measure is a non-GAAP financial measure. For further information and a detailed reconciliation see section 10.1.6 of this MD&A. NOI for the quarter increased by 3.6 percent compared to the prior year primarily due to the increase in same property NOI, coupled with an increase in NOI due to properties acquired and developed in 2023 and 2024. FFO for the quarter increased by 1.7 percent compared to the prior year, primarily due to the acquisition, intensifications and developments completed during 2023 and 2024, partially offset by higher interest costs. AFFO for the quarter increased by 2.1 percent compared to the prior year, primarily due to the acquisition, intensifications and developments completed during 2023 and 2024, and rent escalations, partially offset by higher interest costs. 6.0 Balance Sheet Analysis, Liquidity, and Capital Resources 6.1 Selected Balance Sheet Highlights At the end of Q4 2024, CTC had fully repaid the $895.0 million of borrowings, $495.0 million of short-term borrowings and $400.0 million term loan, associated with its October 2023 repurchase of 20% of CTFS. Selected line items from the Company’s assets and liabilities, as at December 28, 2024 and the year-over-year change versus December 30, 2023, are noted below: p Change in Total assets $ 262.3 Change in Total liabilities q $ 381.2 Year-over-year change in assets Selected Assets December 28, 2024 Trade and other receivables 1,263.0 111.7 Loans receivable (current portion) 6,697.5 129.2 Merchandise inventories 2,558.3 (135.4) Property and equipment 5,394.4 174.9 Right-of-use-assets 2,034.8 101.0 Year-over-year change in liabilities Selected Liabilities December 28, 2024 Deposits (current and long-term) 3,557.4 193.1 Trade and other payables 2,931.4 242.0 Short-term borrowings 295.8 (669.9) Long-term debt (current and long- term portion) 4,555.9 (408.6) 125.6 Lease liabilities 2,490.1 Assets Trade and other receivables p $111.7 million The increase was primarily due to a favourable change in fair values of derivative contracts due to higher foreign exchange rates. Loans receivable (current portion) p $129.2 million The increase is primarily due to higher average credit card account balances, partially offset by a related higher allowance. Merchandise inventories q $135.4 million Inventory declined 5.0 percent compared to prior year. Active management of inventory across all banners contributed to the decline in inventory. Property and equipment p $174.9 million The increase was primarily driven by the Company's store investments. Right-of-use- assets p $101.0 million The increase was driven by the renewal of leases, and thus longer lease terms remaining, based on review of expiring leases performed during the year. MANAGEMENT’S DISCUSSION AND ANALYSIS 26 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS Long-term debt (current and long- term portion) Liabilities Deposits (current and long-term) p $193.1 million The increase was mainly due to growth in GIC deposits to fund credit card loans receivable growth in the Financial Services segment. Trade and other payables p $242.0 million The increase was due to timing and volume of payments related to inventory purchases. Short-term borrowings q $669.9 million The decrease is primarily due to cash generated from operations, improvements in working capital, and capital allocation decisions that contributed to repaying short-term borrowings. The reduction occurred despite an additional $495.0 million drawn in Q4 2023 to partially finance the Company’s repurchase of Scotiabank’s 20 percent interest in CTFS. q $408.6 million The decrease is due to the early repayment of the $400 million term loan borrowed in Q4 2023 to partially finance the Company’s repurchase of Scotiabank’s 20 percent interest in CTFS. Lease liabilities p $125.6 million The increase was driven by the renewal of leases that were soon to be expiring based on review of expiring leases performed during the year. MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 27 6.2 Summary Cash Flows Selected line items from the Company’s Consolidated Statements of Cash Flows for the quarters and years ended December 28, 2024 and December 30, 2023 are noted in the following tables: (C$ in millions) Q4 2024 Q4 2023 Change Cash generated from (used for) operating activities $ 875.3 $ 869.9 $ 5.4 Cash generated from (used for) investing activities 171.7 (353.0) 524.7 Cash generated from (used for) financing activities (925.4) (664.6) (260.8) Cash generated (used) in the period $ 121.6 $ (147.7) $ 269.3 (C$ in millions) 2024 2023 Change Cash generated from (used for) operating activities $ 2,063.8 $ 1,353.7 $ 710.1 Cash generated from (used for) investing activities (264.1) (747.8) 483.7 Cash generated from (used for) financing activities (1,635.3) (621.0) (1,014.3) Cash generated (used) in the period $ 164.4 $ (15.1) $ 179.5 Q4 2024 Full Year Operating activities p $5.4 million change p $710.1 million change • Cash generated in operating activities was relatively flat in comparison to the same quarter in the prior year, however it was as a result of changes in loans receivable in the Financial Services segment offset by working capital changes for the Company. • The increase in cash generated from operating activities was primarily driven by changes in working capital, loans receivable and lower cash taxes. Investing activities p $524.7 million change p $483.7 million change • The increase in cash generated from investing activities was primarily driven by proceeds on disposition of the Brampton DC, in addition to lower acquisition of long-term investments and lower additions to property and equipment in comparison to the same quarter in the prior year. • The increase in cash generated from investing activities was primarily driven by proceeds on disposition of various properties, including the Brampton DC. Financing activities q $260.8 million change q $1,014.3 million change • The increase in cash used for financing activities was primarily due to the repayment of long-term debt attributable to term loans made in the prior year to repurchase Scotiabank's 20 percent interest in CTFS. • The increase in cash used for financing activities was primarily due to the current year repayment of long-term debt and short-term borrowings that were issued in the prior year to finance the repurchase of Scotiabank's 20 percent interest in CTFS, and partially offset by fewer repurchases of Class A Non-Voting Shares under the Company’s Normal Course Issuer Bid (NCIB) compared to the prior year. MANAGEMENT’S DISCUSSION AND ANALYSIS 28 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 6.3 Capital Management The definition of capital varies from company to company, from industry to industry, and for different purposes. In the process of managing the Company’s capital, Management includes the following items in its definition of capital, which includes Glacier Credit Card Trust (GCCT) indebtedness but excludes Franchise Trust indebtedness because it is a legal liability of the Dealers: (C$ in millions) 2024 % of total 2023 % of total Capital components Deposits $ 1,171.4 8.0 % $ 1,041.7 6.9 % Short-term borrowings 295.8 2.0 % 965.7 6.4 % Current portion of long-term debt 680.4 4.6 % 560.5 3.7 % Long-term debt 3,875.5 26.5 % 4,404.0 29.4 % Long-term deposits 2,386.0 16.3 % 2,322.6 15.5 % Total debt $ 8,409.1 57.4 % $ 9,294.5 61.9 % Share capital 625.9 4.3 % 598.7 4.0 % Retained earnings 5,614.4 38.3 % 5,128.2 34.1 % Total capital under management $ 14,649.4 100.0 % $ 15,021.4 100.0 % The Company’s capital management objectives are as follows: • Ensuring sufficient liquidity and the ability to access additional capital from multiple sources, if required, to meet its financial obligations when due and execute its operating and strategic plans; and • Minimizing its after-tax cost of capital while taking into consideration the key risks outlined in section 11.0 of this MD&A including current and future industry, market, and economic risks and conditions. 6.3.1 Canadian Tire Bank's Regulatory Environment CTB manages its capital under guidelines established by the Office of the Superintendent of Financial Institutions of Canada (OSFI). OSFI’s regulatory capital guidelines are based on the international Basel Committee on Banking Supervision framework entitled Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems, which came into effect in Canada on January 1, 2013. Basel III is a global regulatory accord that was introduced to enhance the regulation, supervision, and risk management practices within the banking sector. The Bank has implemented several capital policies, procedures, and controls, including an annual Internal Capital Adequacy Assessment Process (ICAAP). These measures support the Bank in achieving its goals and objectives. The Bank’s objectives include maintaining adequate levels of capital to: • meet all applicable regulatory requirements; • maintain and reinforce confidence in the safety and soundness of the Bank; • support growth in assets and liabilities; and • offset unexpected operating and investment losses and volatility. As at the end of Q4 2024, the Bank complied with all regulatory capital requirements established by OSFI, and its internal targets as determined by its ICAAP. MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 29 6.4 Investing 6.4.1 Capital Expenditures The Company’s capital expenditures for the periods ended December 28, 2024 and December 30, 2023 were as follows: (C$ in millions) 2024 2023 Modernization and efficiency enablers $ 63.3 $ 78.0 Omnichannel customer experience 296.7 391.4 Fulfillment infrastructure and automation 118.4 145.9 Operating capital expenditures $ 478.4 $ 615.3 1 CT REIT acquisitions and developments excluding vend-ins from CTC 96.7 68.1 Total capital expenditures $ 575.1 $ 683.4 2 1 This measure is a non-GAAP financial measure. For further information and a detailed reconciliation see section 10.1 of this MD&A. 2 Capital expenditures are presented on an accrual basis and include software additions, but exclude right-of-use asset additions, acquisitions relating to business combinations, intellectual properties, and tenant allowances received. Full Year Total capital expenditures q $108.3 million • The Company’s full year operating capital expenditures and total capital expenditures were $478.4 million and $575.1 million respectively, a decrease of $136.9 million and $108.3 million from the prior year. The decrease was driven by fewer ongoing store capital projects, and postponing projects related to CTR Network Transformation. MANAGEMENT’S DISCUSSION AND ANALYSIS 30 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS Operating Capital Expenditures Capital Commitments The Company had commitments of approximately $122.4 million as at December 28, 2024 (December 30, 2023 – $173.8 million) for the acquisition of tangible and intangible assets. The following contains forward-looking information and readers are cautioned that actual results may vary. The Company’s 2024 full-year operating capital expenditures were $478.4 million, within the previously-disclosed range in Q3 2024 of $475.0 million to $525.0 million. The Company plans to fund the strategy, sustain the business, and continue prudent capital management and expects 2025 full-year operating capital expenditures to be in the range of $525.0 to $575.0 million. 6.5 Liquidity and Financing Management is focused on ensuring that the Company has sufficient liquidity, both through maintaining a strong balance sheet and the ability to access additional capital from multiple sources. Several alternative liquidity sources are available to its Retail, Financial Services, and CT REIT segments to meet their financial obligations when due and to execute their operating and strategic plans. As at December 28, 2024 Financial Services (C$ in millions) Consolidated Retail CT REIT Cash and cash equivalents $ 475.6 $ 172.9 $ 299.6 $ 3.1 Short-term investments 128.4 — 128.4 — Total net cash and cash equivalents and short-term investments1 $ 604.0 $ 172.9 $ 428.0 $ 3.1 Committed Bank Lines of Credit 4,397.2 2,997.2 1,100.0 300.0 Less: Borrowings outstanding2 2.0 — — 2.0 Less: U.S. commercial paper outstanding — — — — Less: Letters of credit outstanding 2.5 — — 2.5 Available Committed Bank Lines of Credit $ 4,392.7 $ 2,997.2 $ 1,100.0 $ 295.5 Liquidity1 $ 4,996.7 $ 3,170.1 $ 1,528.0 $ 298.6 1 This measure is a non-GAAP financial measure with no standardized meaning under IFRS Accounting Standards and therefore may not be comparable to similar measures presented by other issuers. 2 For further information about this measure see section 10.2 of this MD&A. The Company ended the quarter with $604.0 million in cash and short-term investments, net of bank indebtedness, and $5.0 billion in liquidity with $3.2 billion, $1.5 billion, and $298.6 million at its Retail, Financial Services, and CT REIT segments, respectively. The Company ended the quarter with no Short-term borrowings in the Retail and Financial Services segments. Other Short-term borrowings include $293.8 million of GCCT asset-backed commercial paper notes, and a $2.0 million prime draw in CT REIT. As at Q4 2024, CTC, CT REIT, CTB, and Helly Hansen each complied with all financial covenants under the agreements for the committed bank lines of credit listed in the following Financing Source table: MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 31 Financing Source Committed Bank Lines of Credit and Securitized Note Purchase Facility • Provided by a syndicate of eight Canadian and two international financial institutions, $1.975 billion in an unsecured bank line of credit is available to the Retail segment for general corporate purposes, expiring in May 2029. As of December 28, 2024, the Retail segment had no borrowings outstanding on this bank line of credit. • Provided by a syndicate of five Canadian financial institutions, $1.0 billion in an unsecured bank line of credit is available to the Retail segment for general corporate purposes, expiring in May 2025. As of December 28, 2024, there were no borrowings outstanding on this bank line of credit. • Helly Hansen has a 175 million Norwegian Krone (NOK) secured overdraft facility ($22.2 million of Canadian dollar equivalent) provided by a Norwegian bank, which automatically renewed in January and will expire in January 2026. As of December 28, 2024, Helly Hansen had no borrowings outstanding on its facility. • Provided by a syndicate of seven Canadian financial institutions, $300 million in an unsecured bank line of credit is available to CT REIT for general business purposes, expiring in May 2029. As of December 28, 2024, CT REIT had $2.0 million outstanding on its bank line of credit. • Scotiabank has provided CTB with a $400 million unsecured bank line of credit and a $700 million securitized note purchase facility for the purchase of senior and subordinated credit card asset- backed notes issued by GCCT, both expiring in April 2025. As of December 28, 2024, CTB had no borrowings outstanding on its bank line of credit and a nominal amount owing on its note purchase facility. Commercial Paper Programs • CTC has a U.S. dollar-denominated commercial paper program (U.S. CP) that allows it to issue up to a maximum aggregate principal amount of US $1.0 billion of unsecured short-term promissory notes in the United States. Terms to maturity for the promissory notes range from one to 270 days from the date of issue. Notes are issued at a discount and rank equally in right of payment with all other present and future unsecured and unsubordinated obligations to creditors of CTC. As of December 28, 2024, CTC had no U.S. commercial paper outstanding. • Concurrent with CTC’s US$ commercial paper issuances, CTC enters into foreign exchange derivatives to hedge the foreign currency risk associated with both the principal and interest components of the borrowings under the program. CTC does not designate these debt derivatives as hedges for accounting purposes. • GCCT has an asset-backed commercial paper (ABCP) program that allows it to issue up to a maximum aggregate principal amount of $300 million of short-term credit card asset-backed promissory notes. As of December 28, 2024, GCCT had $293.8 million of ABCP notes outstanding. Medium-Term Notes, Term Loan and Senior Unsecured Debentures • As of December 28, 2024, CTC had an aggregate principal amount of $1,150.0 million of medium- term notes outstanding and fully repaid the $400 million term loan. • As of December 28, 2024, CT REIT had an aggregate principal amount of $1,425.0 million of senior unsecured debentures outstanding. Asset-backed Senior and Subordinated Term Notes • As of December 28, 2024, GCCT had an aggregate principal amount of $1,980.0 million of credit card asset-backed term notes outstanding, consisting of $1,851.3 million principal amount of senior term notes and $128.7 million principal amount of subordinated term notes. Broker GIC Deposits • Funds continue to be readily available to CTB through broker networks. As of December 28, 2024, CTB held $2,946.5 million in broker GIC deposits. Retail Deposits • Retail deposits consist of High Interest Savings (HIS) and retail GIC deposits held by CTB, available both within and outside tax-free savings accounts. As of December 28, 2024, CTB held $610.9 million in retail deposits. Real Estate • CTC can undertake strategic real estate transactions involving properties not owned by CT REIT. It also owns an investment in CT REIT in the form of publicly traded CT REIT Units. As of December 28, 2024, CTC had a 68.4 percent effective ownership interest in CT REIT. • Additional sources of funding are available to CT REIT, as appropriate, including the ability to access debt and equity markets, subject to the terms and conditions of CT REIT’s Declaration of Trust and all applicable regulatory requirements. • As of December 28, 2024, CT REIT had an aggregate principal amount of $8.5 million of mortgages, secured by certain investment properties, outstanding. MANAGEMENT’S DISCUSSION AND ANALYSIS 32 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS Credit Ratings A credit rating generally provides an indication of the risk that the borrower will not fulfill its full obligations in a timely manner with respect to both interest and principal commitments. Ratings for long-term debt instruments range from highest credit quality (generally “AAA”) to default in payment (generally “D”). Ratings for short-term debt instruments range from “R-1 (high)” (Morningstar DBRS), “A-1+” (S&P), “P-1” (Moody’s), or “F1+” (Fitch), representing the highest credit quality to “D” (Morningstar DBRS, S&P and Fitch) and “not prime” (Moody’s) for the lowest credit quality of securities rated. Morningstar DBRS S&P Moody’s Fitch Credit Rating Summary Rating Trend Rating Outlook Rating Outlook Rating Outlook Canadian Tire Corporation Issuer rating1 BBB Stable BBB Stable — — — — Medium-term notes BBB Stable BBB — — — — — U.S. Commercial Paper — — A-2 — P-2 — — — Glacier Credit Card Trust Asset-backed senior-term notes AAA (sf) — AAA (sf) — — — — — Asset-backed subordinated- term notes A (sf) — A (sf) — — — — — Asset-backed commercial paper R-1 (high) (sf) — — — — — F1+ (sf) — CT REIT Issuer rating BBB Stable BBB Stable — — — — Senior unsecured debentures BBB Stable BBB — — — — — 1 S&P has also assigned the Company a short-term issuer rating of A-2. 6.5.1 Contractual Obligations, Guarantees, and Commitments The Company funds capital expenditures, working capital needs, dividend payments, and other financing needs, such as debt repayments and Class A Non-Voting Share purchases under a NCIB, from a combination of sources. The following table shows the Company’s contractual obligations to be paid over the next five years and beyond. The Company believes it had the ability to meet these contractual obligations as at December 28, 2024. 2030 & beyond (C$ in millions) 2025 2026 2027 2028 2029 Total Deposits $ 1,183.1 $ 493.1 $ 692.6 $ 702.5 $ 497.6 $ — $ 3,568.9 Total debt1 680.4 958.0 825.0 900.1 250.0 950.0 4,563.5 Lease obligations2 487.9 448.7 369.9 296.5 218.0 1,193.3 3,014.3 Purchase obligations 2,560.3 369.1 340.1 269.4 195.6 87.4 3,821.9 Other obligations 27.0 15.1 13.9 10.0 5.6 12.0 83.6 Interest payments 311.1 283.5 233.6 144.2 78.4 135.4 1,186.2 $ 5,249.8 $ 2,567.5 $ 2,475.1 $ 2,322.7 $ 1,245.2 $ 2,378.1 $ 16,238.4 1 Includes current debt, long-term debt (senior and subordinated term notes), GCCT term notes, and mortgages. Details of both can be found in Note 23 to the 2024 Consolidated Financial Statements. 2 Excludes reasonably certain options of $249.31 million (2023 - $232.8 million). In the normal course of business, the Company enters into numerous agreements that may contain features that meet the definition of a guarantee. For a discussion of the Company’s significant guarantees and commitments, refer to Note 35 of the 2024 Consolidated Financial Statements. The Company’s maximum exposure to credit risk with respect to such guarantees and commitments is provided in Note 5 of the 2024 Consolidated Financial Statements. MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 33 MANAGEMENT’S DISCUSSION AND ANALYSIS 34 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 6.6 Funding Costs The table below shows the funding costs relating to short-term and long-term debt, excluding deposits held by CTB, Franchise Trust indebtedness, and lease liability interest: (C$ in millions) 2024 2023 Interest expense1 $ 266.0 $ 240.2 Cost of debt1 4.61 % 4.09 % 1 For further information about this measure see section 10.2 of this MD&A. For a discussion of the liquidity and credit risks associated with the Company’s ability to generate sufficient resources to meet its financial obligations, refer to section 11.2 in this MD&A. 7.0 Equity The following contains forward-looking information and readers are cautioned that actual results may vary. 7.1 Shares Outstanding (C$ in millions) 2024 2023 Authorized 3,423,366 Common Shares 100,000,000 Class A Non-Voting Shares Issued 3,423,366 Common Shares (2023 – 3,423,366) $ 0.2 $ 0.2 52,197,823 Class A Non-Voting Shares (2023 – 52,197,823) $ 625.7 598.5 $ 625.9 $ 598.7 MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 35 Each year, the Company files a Notice of Intention to Make a NCIB Notice of Intention with the Toronto Stock Exchange (TSX) which allows it to repurchase its Class A Non-Voting Shares on the open market through the facilities of the TSX and/or alternative Canadian trading systems, if eligible, at the market price of the shares at the time of repurchase or as otherwise permitted under the rules of the TSX and applicable securities laws. Shares repurchased by the Company pursuant to the NCIB are restored to the status of authorized but unissued shares. Security holders may obtain a copy of the notice, without charge, by contacting the Corporate Secretary of the Company. On February 16, 2023, the TSX accepted the Company’s Notice of Intention to repurchase up to 5.1 million Class A Non-Voting Shares during the period March 2, 2023 to March 1, 2024 (2023-24 NCIB). On February 15, 2024, the TSX accepted the Company’s Notice of Intention to repurchase up to 4.9 million Class A Non-Voting Shares during the period March 2, 2024 to March 1, 2025 (2024-25 NCIB). Also on February 15, 2024, the TSX accepted a new Automatic Securities Purchase Plan (ASPP) which expires on March 1, 2025 (2024-25 ASPP) and which allows a designated broker to execute repurchases under the 2024-25 NCIB during the Company’s blackout periods, subject to pre-defined parameters. On November 9, 2023, as part of its capital management plan, the Company announced its intention to repurchase up to $200 million of its Class A Non-Voting Shares during 2024, in excess of the amount required for anti-dilutive purposes, pursuant to the Company’s NCIBs in 2024. To date, no such repurchases have occurred. On November 7, 2024, the Company announced its intention to repurchase up to $200 million of its Class A Non- Voting Shares, in excess of the amount required for anti-dilutive purposes, in 2025. Any such repurchases will be made under the 2024-25 NCIB and/or a renewed NCIB, subject to regulatory approvals. 7.2 Dividends The Company has a long-term dividend payout ratio target of approximately 30 to 40 percent of the prior year’s normalized net income, after considering the period-end cash position, future cash flow requirements, capital market conditions, and investment opportunities. The dividend payout ratio may fluctuate in any particular year. 1 1 For further information about this measure see section 10.1 of this MD&A. On November 7, 2024, the Company announced an increase in its annual dividend for the 15th consecutive year, to $7.10 per Common Voting and Class A Non-Voting Share, an increase of approximately 1.4 percent over 2023. On February 12, 2025, the Company’s Board of Directors declared dividends of $1.775 per share payable on June 1, 2025 to shareholders of record as of April 30, 2025. The dividend is considered an “eligible dividend” for tax purposes. 7.3 Equity Derivative Contracts The Company enters into equity-derivative contracts to partially offset its exposure to fluctuations in stock options, performance share units, restricted share units, and deferred share units. The Company currently uses floating- rate equity forwards. During the fourth quarter of 2024, 195,000 units of equity-forward contracts that hedged stock options, performance share units, restricted share units, and deferred share units settled and resulted in a cash receipt from counterparties of approximately $1.9 million. The Company entered into 270,000 units of new equity- forward contracts in the fourth quarter of 2024 with a hedge rate of $154.42. 8.0 Tax Matters In the ordinary course of business, the Company is subject to ongoing audits by tax authorities. While the Company has determined that its tax filing positions are appropriate and supportable, from time-to-time certain matters are reviewed and challenged by the tax authorities. With respect to temporary differences relating to and arising from the Company’s investment in its subsidiaries, the Company is able to control and has no plans that would result in the realization of the respective temporary differences. Accordingly, the Company has not provided for deferred taxes relating to these respective temporary differences that might otherwise occur from transactions relating to the Company’s investment in its subsidiaries. Refer to the Income Taxes accounting policy described in Note 3 of the 2024 Consolidated Financial Statements. The Company regularly reviews the potential for adverse outcomes with respect to tax matters. The Company believes that the ultimate disposition of these matters will not have a material adverse effect on its liquidity, consolidated financial position, or net income, because the Company has determined 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. Income taxes for the quarter ended December 28, 2024 were $97.4 million (2023 - $65.8 million). The Effective tax rate for the quarter ended December 28, 2024 decreased to 18.4 percent (2023 - 25.0 percent), primarily due to an increase in tax benefits relating to capital property dispositions in the quarter. When adjusted for normalizing items , the Effective tax rate for the quarter ended was 23.7 percent for 2024 and 25.1 percent for 2023. 2 1 Income taxes for the full year ended December 28, 2024 were $274.1 million compared with $233.7 million in 2023. The Effective tax rate for the full year ended December 28, 2024 decreased to 22.0 percent from 40.8 percent in 2023 primarily due to an increase in tax benefits relating to capital property dispositions and the non- deductible change in the fair value of the redeemable financial instrument in 2023. When adjusted for normalizing items1 , the Effective tax rate2 for the full year was 24.3 percent for 2024 and 25.9 percent for 2023. 1 Refer to section 5.1.1 in this MD&A for a description of normalizing items. 2 This measure is a non-GAAP ratio. For further information and a detailed reconciliation see section 10.1 of this MD&A. MANAGEMENT’S DISCUSSION AND ANALYSIS 36 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 9.0 Accounting Policies and Estimates 9.1 Critical Accounting Estimates The Company estimates certain amounts, which are reflected in its consolidated financial statements using detailed financial models based on historical experience, current trends, and other assumptions. Actual results could differ from those estimates. In Management’s judgment, the accounting estimates and policies detailed in Note 2 and Note 3 to the Company’s 2024 Consolidated Financial Statements, do not require Management to make assumptions about matters that are highly uncertain and, accordingly, none of those estimates are considered a “critical accounting estimate” as defined in Form 51-102F1 – Management’s Discussion and Analysis, published by the Canadian Securities Administrators, except for the allowance for loan impairment in the Financial Services segment. Details of the accounting policies subject to judgments and estimates that the Company believes could have the most significant impact on the amounts recognized in its consolidated financial statements are described in Note 2 to the Company’s 2024 Consolidated Financial Statements. 9.2 Changes in Accounting Policies Standards, Amendments and Interpretations Issued and Adopted Lease Liability in a Sale and Leaseback In September 2022, the IASB issued amendments to IFRS 16 – Leases relating to sale leaseback transactions for seller-lessees. The amendment adds a requirement that measuring lease payments or revised lease payments shall not result in the recognition of a gain or loss that relates to the right-of-use asset retained by the seller- lessee. The amendments are effective for annual reporting periods beginning on or after January 1, 2024. The Company adopted these amendments in the current year and determined there to be no material impact on the consolidated financial statements. Non-current Liabilities with Covenants In October 2022, the IASB issued amendments to IAS 1 – Presentation of Financial Statements, which specifies that covenants whose compliance is assessed after the reporting date do not affect the classification of debt as current or non-current at the reporting date. Instead, the amendments require disclosure of information about these covenants in the notes to the financial statements. The amendments are effective for annual reporting periods beginning on or after January 1, 2024. The Company adopted these amendments in the current year and determined there to be no material impact on the consolidated financial statements. Supplier Finance Arrangements In May 2023, the IASB issued amendments to IAS 7 – Statement of Cash Flows and IFRS 7 – Financial Instruments: Disclosures. The amendments add requirements to disclose information that allows users to assess how supplier finance arrangements affect an entity’s liabilities, cash flows, and exposure to liquidity risk. The amendments are effective for annual reporting periods beginning on or after January 1, 2024. The Company adopted these amendments in the current year and determined there to be no material impact on the consolidated financial statements. Standards, Amendments, and Interpretations Issued but not yet Adopted The following new standards, amendments, and interpretations have been issued but are not effective for the fiscal year ended December 28, 2024 and, accordingly, have not been applied in preparing these consolidated financial statements. Lack of Exchangeability In August 2023, the IASB issued amendments to IAS 21 – The Effects of Changes in Foreign Exchange Rates in relation to Lack of Exchangeability. The amendments require entities to apply a consistent approach in assessing whether a currency can be exchanged into another currency and in determining the exchange rate to use and the disclosures to provide when it cannot. These amendments are effective for annual reporting periods beginning on or after January 1, 2025, with early adoption permitted. The Company assessed the impact of the amendments and determined there to be no material impact on the consolidated financial statements. MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 37 Classification and Measurement of Financial Instruments In May 2024, the IASB issued amendments to IFRS Accounting Standards 9 – Financial Instruments and IFRS Accounting Standards 7 – Financial Instruments: Disclosures. The amendments relate to settling financial liabilities using an electronic payment system and assessing contractual cash flow characteristics of financial assets, including those with ESG-linked features. The IASB also amended disclosure requirements relating to investments in equity instruments designated at fair value through other comprehensive income and added disclosure requirements for financial instruments with contingent features. The amendments are effective for annual periods beginning on or after January 1, 2026, with early adoption permitted. The Company is assessing the impacts to the consolidated financial statements. Presentation and Disclosure in Financial Statements In April 2024, the IASB issued the new standard IFRS 18 – Presentation and Disclosure in Financial Statements that will replace IAS 1 – Presentation of Financial Statements. The new standard introduces newly defined subtotals on the income statement, requirements for aggregation and disaggregation of information, and disclosure of management performance measures in the financial statements. The new standard is effective for annual reporting periods beginning on or after January 1, 2027, with early adoption permitted. The Company is assessing the impacts to the consolidated financial statements. Annual Improvements In July 2024, the IASB issued IFRS Accounting Standards Annual Improvements – Volume 11, which clarifies wording, correcting minor consequences, oversights, or conflicts among requirements in the Standards. The amendments affect IFRS 1 - First-time Adoption of International Financial Reporting Standards, IFRS 7 - Financial Instruments: Disclosures, IFRS 9 - Financial Instruments, IFRS 10 - Consolidated Financial Statements, and IAS 7 - Statement of Cash Flows. These amendments will be effective for annual periods beginning on or after January 1, 2026, with early adoption permitted. The implementation of these amendments is not expected to have a significant impact on the Company. Contracts Referencing Nature- dependent Electricity In December 2024, the IASB issued amendments to IFRS 9 and IFRS 7 - Contracts Referencing Nature- dependent Electricity. The amendments apply only to nature-dependent electricity contracts, which are those that generate variable levels based on uncontrollable factors such as weather conditions. These amendments will be effective for annual periods beginning on or after January 1, 2026, with early adoption permitted. Implementation of these amendments is not expected to have an impact on the Company. MANAGEMENT’S DISCUSSION AND ANALYSIS 38 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 10.0 Non-GAAP Financial Measures and Ratios 10.1 Non-GAAP Financial Measures and Ratios The Company prepares and presents its financial information on a GAAP basis. Management uses many measures to assess performance, including non-GAAP financial measures and non-GAAP ratios. Non-GAAP financial measures and non-GAAP ratios have no standardized meanings under GAAP and may not be comparable to similar measures of other companies. 10.1.1 Normalizing non-GAAP financial measures Management considers both reported and normalized results and measures useful in evaluating the performance of the core business operations of the Company. Management uses normalized results to assess changes in financial performance across periods on a comparable basis by removing specified items not related to the core business operations of the Company that are infrequent and non-operational in nature. The items, which can include acquisition-related transaction costs, restructuring or discontinued operations costs, operational efficiency program costs, one-time costs for new program rollouts, and infrequent non-operational fair value adjustments, are removed from Cost of producing revenue, SG&A and Other expense (income) where applicable. Explanations of normalizing items can be found in subsection 5.1.1. Normalized Cost of Producing Revenue Normalized cost of producing revenue is most directly comparable to Cost of producing revenue, a GAAP measure reported in the consolidated financial statements. The following table reconciles normalized cost of producing revenue to cost of producing revenue. (C$ in millions) Q4 2024 Q4 2023 2024 2023 Cost of producing revenue $ 2,977.7 $ 2,906.2 $ 10,739.1 $ 10,952.9 Less normalizing items: Inventory write-down related to the sale of Brampton DC 18.1 — 18.1 — Normalized cost of producing revenue $ 2,959.6 $ 2,906.2 $ 10,721.0 $ 10,952.9 Retail Normalized Cost of Producing Revenue Retail normalized cost of producing revenue is most directly comparable to Retail cost of producing revenue, a GAAP measure reported in the consolidated financial statements. The following table reconciles Retail normalized cost of producing revenue to Retail cost of producing revenue. (C$ in millions) Q4 2024 Q4 2023 2024 2023 Cost of producing revenue $ 2,977.7 $ 2,906.2 $ 10,739.1 $ 10,952.9 Less: Other operating segments 191.3 175.0 725.2 628.3 Retail cost of producing revenue $ 2,786.4 $ 2,731.2 $ 10,013.9 $ 10,324.6 Less normalizing items: Inventory write-down related to the sale of Brampton DC 18.1 — 18.1 — Retail normalized cost of producing revenue $ 2,768.3 $ 2,731.2 $ 9,995.8 $ 10,324.6 MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 39 Normalized Gross Margin and Normalized Gross Margin Rate Normalized gross margin and normalized gross margin rate are used as additional measures when assessing the amount of revenue retained after incurring direct costs associated with the products and services the Company provides. The following table reconciles normalized gross margin to gross margin, a GAAP measure reported in the consolidated financial statements. Normalized gross margin rate is normalized gross margin divided by revenue. (C$ in millions) Q4 2024 Q4 2023 2024 2023 Gross margin $ 1,529.6 $ 1,536.8 $ 5,618.7 $ 5,703.6 Add normalizing items: Inventory write-down related to the sale of Brampton DC 18.1 — 18.1 — Normalized gross margin $ 1,547.7 $ 1,536.8 $ 5,636.8 $ 5,703.6 Retail Normalized Gross Margin and related measures Retail normalized gross margin, Retail normalized gross margin excluding Petroleum, Retail normalized gross margin rate, and Retail normalized gross margin rate excluding Petroleum are used as additional measures when assessing the amount of revenue retained after incurring direct costs associated with the products and services the Company provides. Retail normalized gross margin and its successive derivations are most directly comparable to gross margin, a GAAP measure reported in the consolidated financial statements. Retail normalized gross margin rate is retail normalized gross margin divided by revenue. Retail normalized gross margin rate excluding Petroleum is retail normalized gross margin excluding Petroleum, divided by revenue excluding Petroleum. (C$ in millions) Q4 2024 Q4 2023 2024 2023 Gross margin $ 1,529.6 $ 1,536.8 $ 5,618.7 $ 5,703.6 Less: Other operating segments 192.8 198.0 820.2 856.9 Retail gross margin $ 1,336.8 $ 1,338.8 $ 4,798.5 $ 4,846.7 Add normalizing items: Inventory write-down related to the sale of Brampton DC 18.1 — 18.1 — Retail normalized gross margin $ 1,354.9 $ 1,338.8 $ 4,816.6 $ 4,846.7 Less: Petroleum gross margin 52.4 52.6 210.2 214.0 Retail normalized gross margin excluding Petroleum $ 1,302.5 $ 1,286.2 $ 4,606.4 $ 4,632.7 Normalized Other Expense (Income) The following table reconciles Normalized Other expense (income) to Other expense (income), the most directly comparable GAAP measure reported in the consolidated financial statements. (C$ in millions) Q4 2024 Q4 2023 2024 2023 Other expense (income) $ (243.0) $ 3.2 $ (291.8) $ 34.4 Add normalizing items: Gain on sale of Brampton DC 241.0 — 241.0 — DC fire expense — — — (11.3) Normalized Other expense (income) $ (2.0) $ 3.2 $ (50.8) $ 23.1 MANAGEMENT’S DISCUSSION AND ANALYSIS 40 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS (C$ in millions) Q4 2024 Q4 2023 2024 2023 Other expense (income) $ (243.0) $ 3.2 $ (291.8) $ 34.4 Less: Other operating segments 39.1 39.0 132.6 149.7 Retail Other expense (income) $ (282.1) $ (35.8) $ (424.4) $ (115.3) Add normalizing items: Gain on sale of Brampton DC 241.0 — 241.0 — DC fire expense — — — (11.3) Retail Normalized Other expense (income) $ (41.1) $ (35.8) $ (183.4) $ (126.6) (C$ in millions) Q4 2024 Q4 2023 2024 2023 Selling, general and administrative expenses $ 967.7 $ 983.5 $ 3,553.3 $ 3,675.7 Less normalizing items: Expenses related to the strategic review of CTFS 18.1 — 18.1 — Targeted headcount reduction charge — 21.6 — 21.6 GST/HST-related charge — — — 33.3 Normalized Selling, general and administrative expenses $ 949.6 $ 961.9 $ 3,535.2 $ 3,620.8 (C$ in millions) Q4 2024 Q4 2023 2024 2023 Selling, general and administrative expenses $ 967.7 $ 983.5 $ 3,553.3 $ 3,675.7 Less: Other operating segments 94.2 84.3 350.2 354.8 Retail Selling, general and administrative expenses $ 873.5 $ 899.2 $ 3,203.1 $ 3,320.9 Less normalizing items: Expenses related to the strategic review of CTFS 8.7 — 8.7 — Targeted headcount reduction charge — 19.6 — 19.6 Retail Normalized Selling, general and administrative expenses $ 864.8 $ 879.6 $ 3,194.4 $ 3,301.3 MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 41 Retail Normalized Other Expense (Income) The following table reconciles Retail Normalized Other expense (income) to Other expense (income), a GAAP measure reported in the consolidated financial statements. Normalized SG&A and Normalized SG&A as a Percentage of Revenue Normalized SG&A is used as an additional measure when assessing the performance of the Company’s ongoing operations. Normalized SG&A is most directly comparable to SG&A, a GAAP measure reported in the consolidated financial statements. SG&A is adjusted for normalizing items. Normalized SG&A as a percentage of Revenue is a non-GAAP ratio calculated by dividing Normalized SG&A by Revenue. Retail Normalized SG&A and Retail Normalized SG&A as a Percentage of Revenue excluding Petroleum Retail Normalized SG&A is used as an additional measure when assessing the performance of the Company’s ongoing operations. This metric is most directly comparable to SG&A, a GAAP measure reported in the consolidated financial statements. Retail SG&A is adjusted for normalizing items. Retail Normalized SG&A as a percentage of Revenue excluding Petroleum is a non-GAAP ratio that is calculated by dividing Retail Normalized SG&A by Retail Revenue excluding Petroleum. (C$ in millions) Q4 2024 Q4 2023 2024 2023 Selling, general and administrative expenses $ 967.7 $ 983.5 $ 3,553.3 $ 3,675.7 Less: Other operating segments 860.3 887.3 3,164.9 3,281.0 Financial Services Selling, general and administrative expenses $ 107.4 $ 96.2 $ 388.4 $ 394.7 Less normalizing items: Expenses related to the strategic review of CTFS 9.4 — 9.4 — Targeted headcount reduction charge — 2.0 — 2.0 GST/HST-related charge — — — 33.3 Financial Services Normalized Selling, general and administrative expenses $ 98.0 $ 94.2 $ 379.0 $ 359.4 (C$ in millions) Q4 2024 Q4 2023 2024 2023 Income before income taxes $ 529.1 $ 263.0 $ 1,246.0 $ 572.8 Add normalizing items: Gain on sale of Brampton DC, net of inventory write-down (222.9) — (222.9) — Expenses related to the strategic review of CTFS 18.1 — 18.1 — Targeted headcount reduction charge — 21.6 — 21.6 DC fire expense — — 11.3 GST/HST-related charge — — — 33.3 Change in fair value of redeemable financial instrument — — 328.0 Normalized Income before income taxes $ 324.3 $ 284.6 $ 1,041.2 $ 967.0 (C$ in millions) Q4 2024 Q4 2023 2024 2023 Income before income taxes $ 529.1 $ 263.0 $ 1,246.0 $ 572.8 Less: Other operating segments 92.4 101.3 473.8 165.8 Retail Income before income taxes $ 436.7 $ 161.7 $ 772.2 $ 407.0 Add normalizing items: Gain on sale of Brampton DC, net of inventory write-down (222.9) — (222.9) — Expenses related to the strategic review of CTFS 8.7 — 8.7 — Targeted headcount reduction charge — 19.6 — 19.6 DC fire expense — — — 11.3 Retail Normalized Income before income taxes $ 222.5 $ 181.3 $ 558.0 $ 437.9 MANAGEMENT’S DISCUSSION AND ANALYSIS 42 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS Financial Services Normalized SG&A Financial Services Normalized SG&A is used as an additional measure when assessing the performance of the Company’s ongoing operations. This metric is most directly comparable to SG&A, a GAAP measure reported in the consolidated financial statements. Financial Services SG&A is adjusted for normalizing items. Normalized Income Before Income Taxes Normalized Income before income taxes is used as an additional measure to assess the Company’s underlying operating performance and assists in making decisions regarding the ongoing operations of its business. The following table reconciles Normalized Income before income taxes to Income before income taxes which is a GAAP measure reported in the consolidated financial statements. Retail Normalized Income Before Income Taxes Retail Normalized Income before income taxes is used as an additional measure to assess the Company’s underlying operating performance and assists in making decisions regarding the ongoing operations of its business. The following table reconciles Retail Normalized Income before income taxes to Income before income taxes which is a GAAP measure reported in the consolidated financial statements. (C$ in millions) Q4 2024 Q4 2023 2024 2023 Income before income taxes $ 529.1 $ 263.0 $ 1,246.0 $ 572.8 Less: Other operating segments 461.6 177.8 884.0 187.8 Financial Services Income before income taxes $ 67.5 $ 85.2 $ 362.0 $ 385.0 Add normalizing items: Expenses related to the strategic review of CTFS 9.4 — 9.4 — Targeted headcount reduction charge — 2.0 — 2.0 GST/HST-related charge — — — 33.3 Financial Services Normalized Income before income taxes $ 76.9 $ 87.2 $ 371.4 $ 420.3 (C$ in millions) Q4 2024 Q4 2023 2024 2023 Income tax expense $ 97.4 $ 65.8 $ 274.1 $ 233.7 Add tax effect of normalizing items: Gain on sale of Brampton DC, net of inventory write-down (25.6) — (25.6) — Expenses related to the strategic review of CTFS 4.9 — 4.9 — Targeted headcount reduction charge — 5.7 — 5.7 DC fire expense — — — 3.0 GST/HST-related charge — — — 8.5 Normalized Income tax expense (recovery) $ 76.8 $ 71.5 $ 253.5 $ 250.9 MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 43 Financial Services Normalized Income Before Income Taxes Financial Services Normalized Income before income taxes is used as an additional measure to assess the Company’s underlying operating performance and assists in making decisions regarding the ongoing operations of its business. The following table reconciles Financial Services Normalized Income before income taxes to Income before income taxes which is a GAAP measure reported in the consolidated financial statements. Normalized Income Tax Expense (Recovery) and Normalized Effective Tax Rate Management uses Normalized Income tax expense (recovery) to calculate Normalized Net income. The tax effect of normalizing items is calculated by multiplying normalizing items by the statutory tax rate. The following table reconciles Normalized Income tax expense (recovery) to Income tax expense (recovery) which is a GAAP measure reported in the consolidated financial statements. Normalized effective tax rate is calculated by dividing Normalized Income tax expense (recovery) by Normalized Income before income taxes. (C$ in millions, except per share amounts) Q4 2024 Q4 2023 2024 2023 Net income $ 431.7 $ 197.2 $ 971.9 $ 339.1 Net income attributable to shareholders 411.5 172.5 887.7 213.3 Add normalizing items, net of tax: Gain on sale of Brampton DC, net of inventory write-down Expenses related to the strategic review of CTFS 13.2 — 13.2 — $ (197.4) $ — $ (197.4) $ — Targeted headcount reduction charge — 15.9 — 15.9 DC fire expense GST/HST-related charge1 — — — — — — 8.4 24.7 Change in fair value of redeemable financial instrument — — — 328.0 Normalized Net income $ 247.5 $ 213.1 $ 787.7 $ 716.1 Normalized Net income attributable to shareholders1 $ 227.3 $ 188.4 $ 703.5 $ 585.3 Normalized Diluted EPS $ 4.07 $ 3.38 $ 12.62 $ 10.37 MANAGEMENT’S DISCUSSION AND ANALYSIS 44 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS Normalized Net Income, Normalized Net Income Attributable to Shareholders, Normalized Diluted Earnings per Share, and Dividend Payout Ratio Normalized Net income, Normalized Net income attributable to shareholders, and Normalized Diluted EPS are used as additional measures when assessing the Company’s underlying operating performance. The following table reconciles Normalized Net income, Normalized Net income attributable to shareholders and Normalized Diluted EPS to Net income, a GAAP measure reported in the consolidated financial statements. Dividend payout ratio is calculated by dividing total dividends by the prior year’s Normalized Net income. 1 $5.0 million relates to non-controlling interests and is not included in the sum of Normalized net income attributable to shareholders. (C$ in millions) Q4 2024 Q4 2023 2024 2023 Income before income taxes $ 529.1 $ 263.0 $ 1,246.0 $ 572.8 Add: Depreciation and amortization1 197.3 203.2 785.1 802.2 Net finance costs (income) 83.6 90.8 349.0 321.5 EBITDA $ 810.0 $ 557.0 $ 2,380.1 $ 1,696.5 Add normalizing items: Gain on sale of Brampton DC, net of inventory write-down (222.9) — (222.9) — Expenses related to the strategic review of CTFS 18.1 — 18.1 — Targeted headcount reduction charge — 21.6 — 21.6 DC fire expense — — — 11.3 GST/HST-related charge — — — 33.3 Change in fair value of redeemable financial instrument — — — 328.0 Normalized EBITDA $ 605.2 $ 578.6 $ 2,175.3 $ 2,090.7 MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 45 10.1.2. EBITDA EBITDA and related measures EBITDA, Normalized EBITDA, and Normalized EBITDA as a percentage of Revenue are used as additional measures when assessing the performance of the Company’s ongoing operations and its ability to generate cash flows to fund its cash requirements, including capital expenditures. EBITDA and its successive derivations are most directly comparable to Income before income tax, a GAAP measure reported in the consolidated financial statements and is adjusted by deducting Net finance costs (income) and Depreciation and amortization. EBITDA itself is then adjusted for normalizing items. Normalized EBITDA as a Percentage of Revenue is a non-GAAP Ratio calculated by dividing the Normalized EBITDA by Revenue. 1 Depreciation and amortization reported in Cost of producing revenue for the 13 and 52 weeks ended December 28, 2024 was $5.1 million (2023 – $6.9 million) and $22.9 million (2023 – $31.0 million), respectively. (C$ in millions) Q4 2024 Q4 2023 2024 2023 Income before income taxes $ 529.1 $ 263.0 $ 1,246.0 $ 572.8 Less: Other operating segments 92.4 101.3 473.8 165.8 Retail Income before income taxes $ 436.7 $ 161.7 $ 772.2 $ 407.0 Add: Depreciation and amortization1 245.2 242.5 974.5 989.2 Net finance costs (income) 68.6 78.1 296.0 275.9 Retail EBITDA $ 750.5 $ 482.3 $ 2,042.7 $ 1,672.1 Add normalizing items: Gain on sale of Brampton DC, net of inventory write-down Expenses related to the strategic review of CTFS 8.7 — 8.7 — (222.9) — (222.9) — Targeted headcount reduction charge — 19.6 — 19.6 DC fire expense — — — 11.3 Retail Normalized EBITDA $ 536.3 $ 501.9 $ 1,828.5 $ 1,703.0 MANAGEMENT’S DISCUSSION AND ANALYSIS 46 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS Retail EBITDA and related measures Retail EBITDA and Retail Normalized EBITDA are used as additional measures when assessing the performance of the Retail segment’s ongoing operations and its ability to generate cash flows to meet requirements, including capital expenditures. Retail EBITDA and its successive derivations are most directly comparable to Income before income tax, a GAAP measure reported in the consolidated financial statements and is adjusted by deducting Net finance costs (income) and Depreciation and amortization. Retail EBITDA is then adjusted for normalizing items. 1 Depreciation and amortization reported in Cost of producing revenue for the 13 and 52 weeks ended December 28, 2024 was $5.1 million (2023 – $6.9 million) and $22.9 million (2023 – $31.0 million), respectively. (C$ in millions) Q4 2024 Q4 2023 2024 2023 Income before income taxes $ 529.1 $ 263.0 $ 1,246.0 $ 572.8 Less: Other operating segments 461.6 177.8 884.0 187.8 Financial Services Income before income taxes $ 67.5 $ 85.2 $ 362.0 $ 385.0 Add: Depreciation and amortization 2.6 2.3 9.4 9.7 Net finance costs (income) (3.3) (3.4) (16.8) (11.5) Financial Services EBITDA $ 66.8 $ 84.1 $ 354.6 $ 383.2 CT REIT EBITDA and related measures (C$ in millions) Q4 2024 Q4 2023 2024 2023 Income before income taxes $ 529.1 $ 263.0 $ 1,246.0 $ 572.8 Less: Other operating segments 393.8 224.7 811.8 343.3 CT REIT Income before income taxes $ 135.3 $ 38.3 $ 434.2 $ 229.5 Add: Net finance costs (income) 31.2 29.5 121.8 114.0 CT REIT EBITDA1 $ 166.5 $ 67.8 $ 556.0 $ 343.5 Add: Fair value (gain) loss adjustment (54.8) 39.3 (119.1) 78.6 CT REIT EBITFV $ 111.7 $ 107.1 $ 436.9 $ 422.1 MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 47 Financial Services EBITDA Financial Services EBITDA is used as an additional measure when assessing the performance of the Financial Services segment’s ongoing operations and its ability to generate cash flows to fund its cash requirements. Financial Services EBITDA is most directly comparable to Income before income tax, a GAAP measure reported in the consolidated financial statements and is adjusted by deducting Net finance costs (income) and Depreciation and amortization. CT REIT EBITDA and CT REIT EBITFV are used as additional measures when assessing the performance of the CT REIT segment’s ongoing operations and its ability to generate cash flows to fund its cash requirements, including capital expenditures. CT REIT EBITDA and its successive derivations are most directly comparable to Income before income tax, a GAAP measure reported in the consolidated financial statements and is adjusted by deducting Net finance costs (income) and Depreciation and amortization. CT REIT EBITDA is then adjusted for fair value changes. 1 CT REIT applies a fair value model to account for its Investment property, as a result CT REIT does not recognize Depreciation and amortization in its segmented results. As at December 28, 2024 (C$ in millions) Consolidated Retail Financial Services CT REIT Consolidated net debt Short-term deposits $ 1,171.4 $ — $ 1,171.4 $ — Long-term deposits 2,386.0 — 2,386.0 — Short-term borrowings 295.8 — 293.8 2.0 Long-term debt 4,555.9 1,150.8 1,974.9 1,430.2 Total debt $ 8,409.1 $ 1,150.8 $ 5,826.1 $ 1,432.2 Cash and cash equivalents1 (475.6) (172.9) (299.6) (3.1) Short-term investments1 (128.4) — (128.4) — Long-term investments1 (72.8) (12.8) (60.0) — Net debt $ 7,732.3 $ 965.1 $ 5,338.1 $ 1,429.1 Intercompany debt — (226.5) 129.5 97.0 Outstanding Class C CT REIT LP units $ — $ (1,451.1) $ — $ 1,451.1 Adjusted net debt $ 7,732.3 $ (712.5) $ 5,467.6 $ 2,977.2 (C$ in millions) Consolidated Retail Financial Services CT REIT Consolidated net debt Short-term deposits $ 1,041.7 $ — $ 1,041.7 $ — Long-term deposits 2,322.6 — 2,322.6 — Short-term borrowings 965.7 525.6 440.1 — Long-term debt 4,964.5 1,550.3 1,984.8 1,429.4 Total debt Cash and cash equivalents1 (311.2) (85.6) (205.8) (19.8) Short-term investments1 Long-term investments (108.2) (8.3) (99.9) — 1 $ 9,294.5 $ 2,075.9 (177.2) $ 5,789.2 — $ 1,429.4 (177.2) — Net debt $ 8,697.9 $ 1,982.0 $ 5,306.3 $ 1,409.6 Intercompany debt — (87.8) 87.8 — Outstanding Class C CT REIT LP units $ — $ (1,451.6) $ — $ 1,451.6 Adjusted net debt $ 8,697.9 $ 442.6 $ 5,394.1 $ 2,861.2 (C$ in millions) 2024 2023 Total additions1 $ 636.8 $ 668.6 Add: Change in accrued additions and other non-cash items (61.7) $ 14.8 Less: CT REIT acquisitions and developments excluding vend-ins from CTC 96.7 $ 68.1 Operating capital expenditures $ 478.4 $ 615.3 MANAGEMENT’S DISCUSSION AND ANALYSIS 48 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 10.1.3 Other Consolidated Non-GAAP Financial Measures Adjusted Net Debt The following tables present the components of adjusted net debt. The Company believes that Adjusted net debt is relevant in assessing the amount of financial leverage employed. 1 Includes regulatory reserves. As at December 30, 2023 1 Includes regulatory reserves. Operating Capital Expenditures Operating capital expenditures is used to assess the resources used to maintain capital assets at their productive capacity. Operating capital expenditures is most directly comparable to the Total additions, a GAAP measure reported in the consolidated financial statements. 1 This line appears on the Consolidated Statement of Cash Flows under Investing activities. (C$ in millions, except where noted) 2024 2023 Income before income taxes $ 1,246.0 $ 572.8 Less: Other operating segments 473.8 165.8 Retail Income before income taxes $ 772.2 $ 407.0 Add normalizing items: Gain on sale of Brampton DC, net of inventory write-down (222.9) — Expenses related to the strategic review of CTFS Targeted headcount reduction-related charge — 19.6 DC fire expense 8.7 — — 11.3 Retail Normalized Income before income taxes $ 558.0 $ 437.9 Less: Retail intercompany adjustments1 Add: Retail interest expense2 344.3 323.5 Retail depreciation of right-of-use assets Retail effective tax rate 25.2 % 28.4 % Add: Retail taxes 218.5 601.2 (323.7) 213.2 622.7 (332.2) Retail return $ 961.3 $ 838.7 Average total assets Less: Average assets in other operating segments 4,334.4 4,421.3 $ 22,333.6 $ 22,173.6 Average Retail assets Less: Average Retail intercompany adjustments1 4,339.8 3,722.2 Average Retail trade payables and accrued liabilities3 Average Franchise Trust assets 583.8 517.0 $ 17,999.2 2,803.9 $ 17,752.3 2,841.2 Average Retail invested capital $ 10,271.7 $ 10,671.9 Retail ROIC 9.4 % 7.9 % MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 49 10.1.4 Other Retail Retail Return on Invested Capital Retail ROIC is calculated as Retail return divided by the Retail invested capital. Retail return is defined as trailing 12-month Retail after-tax earnings excluding interest expense, lease related depreciation expense, inter-segment earnings, and any normalizing items. Retail invested capital is defined as Retail segment total assets, less Retail segment trade payables and accrued liabilities and inter-segment balances based on an average of the trailing four quarters. Retail return and Retail invested capital are non-GAAP financial measures, which the Company does not consider useful in isolation. The Company believes that Retail ROIC is useful in assessing the Retail segment’s performance relative to shareholder investment. 1 Intercompany adjustments include intercompany income received from CT REIT which is included in the Retail segment, and intercompany investments made by the Retail segment in CT REIT and CTFS. 2 Excludes Franchise Trust. 3 Trade payables and accrued liabilities include Trade and other payables, Short-term derivative liabilities, Short-term provisions and Income tax payables. (C$ in millions) 2024 2023 Cash generated from operating activities $ 2,066.5 $ 1,354.3 Less: Other operating segments 380.5 220.0 Retail cash generated from operating activities $ 1,686.0 $ 1,134.3 Retail capital expenditures, net of tenant allowances (449.2) (475.6) Retail payment of lease liabilities (principal portion), net of payments received (602.2) (656.2) Retail free cash flow $ 634.6 $ 2.5 Dividends from Financial Services to Retail 358.0 344.4 Distributions from CT REIT to Retail 212.1 206.7 Available Retail cash flow $ 1,204.7 $ 553.6 (C$ in millions) 2024 2023 Income before income taxes $ 1,246.0 $ 572.8 Less: Other operating segments 473.8 165.8 Retail income before income taxes $ 772.2 $ 407.0 Adjustments for: Income from Financial Services and CT REIT (340.5) (328.3) Retail depreciation and amortization 974.5 989.1 Retail change in working capital 507.9 102.5 Retail income taxes, interest costs and other (228.1) (36.0) Retail cash generated from operating activities $ 1,686.0 $ 1,134.3 MANAGEMENT’S DISCUSSION AND ANALYSIS 50 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS Retail Free Cash Flow Retail free cash flow is a measure used to assess the Company’s ability to generate cash from its Retail operations. Retail free cash flow is defined as cash generated by Retail operating activities less capital expenditures and lease rent payments. Available Retail cash flow is free cash flow plus distributions received from Financial Services and CT REIT. Management believes that available Retail cash flow is an important measure in evaluating the Company’s ability to fund its shareholder distributions, financing activities, and potential business acquisitions. The following table reconciles cash generated from operating activities, a GAAP measure reported in the consolidated financial statements, to available Retail cash flow. The following table reconciles Retail income before income taxes to Retail cash from operating activities. (C$ in millions, except where noted) Q4 2024 Q4 2023 2024 2023 Revenue $ 4,507.3 $ 4,443.0 $ 16,357.8 $ 16,656.5 Less: Other operating segments and other banners 4,200.8 4,169.0 15,516.1 15,819.3 Helly Hansen Revenue (CAD) NOK/CAD average FX rate $ 306.5 $ 274.0 7.88 $ 841.7 7.96 $ 837.2 7.85 7.82 Helly Hansen Revenue (Kroner) $ 2,415.2 $ 2,182.0 $ 6,607.3 $ 6,546.9 NOK/CAD constant FX rate 7.96 7.96 7.82 7.82 Helly Hansen Revenue (constant currency) $ 303.4 $ 274.1 $ 844.9 $ 837.2 (C$ in millions) 2024 2023 Current portion of loans receivable $ 6,697.5 $ 6,568.3 Add: ECL allowance 935.9 926.3 Less: Other discounts or adjustments 195.4 157.4 Line of credit and current portion of dealer loans 63.2 73.2 Total gross credit card receivables $ 7,374.8 $ 7,264.0 Less: Loans no more than 30 days past due 7,108.7 7,004.5 Past due gross credit card receivables $ 266.1 $ 259.5 MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 51 Helly Hansen Revenue on a Constant Currency Basis Helly Hansen revenue on a constant currency basis is used to assess revenue variations by removing the effect of changes in foreign exchange rates. This is accomplished by applying the same foreign exchange rate to current and comparative periods. This measure is most directly comparable to Revenue, a GAAP measure reported in the consolidated financial statements. 10.1.5 Other Financial Services Past Due Credit Card Receivables Rate PD2+ rate is calculated by dividing gross credit card receivables that are two cycles or more overdue (30+ days past due) by total gross credit card receivables. Both components exclude allowances and discounts. Gross past due credit card receivables, total gross credit card receivables and PD2+ are non-GAAP financial measures and a non-GAAP ratio, respectively. The ratio of past due credit card receivables provides Management and investors with an additional measure to assess the quality and health of credit card loan assets. Past due gross credit card receivables and total gross credit card receivables provide insight into the book value of cardholder balances in our portfolio at the reporting date; however, observed in isolation do not provide meaningful information. (C$ in millions) Q4 2024 Q4 2023 2024 2023 Revenue $ 4,507.3 $ 4,443.0 $ 16,357.8 $ 16,656.5 Less: Other operating segments 4,361.9 4,303.0 15,779.1 16,103.7 CT REIT Property revenue $ 145.4 $ 140.0 $ 578.7 $ 552.8 Less: CT REIT Property expense 30.9 28.8 125.7 115.5 CT REIT property straight-line rent revenue (1.1) (0.3) (4.6) (1.7) CT REIT net operating income $ 115.6 $ 111.5 $ 457.6 $ 439.0 MANAGEMENT’S DISCUSSION AND ANALYSIS 52 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 10.1.6 Other CT REIT CT REIT Net Operating Income NOI is defined as Property revenue less Property expense adjusted further for straight-line rent. This measure is most directly comparable to Revenue, a GAAP measure reported in the consolidated financial statements. Management believes that NOI is a useful key indicator of performance as it represents a measure of property operations over which Management has control. NOI is also a key input in determining the value of the portfolio. NOI should not be considered as an alternative to Property revenue or Net income and Comprehensive income, both of which are determined in accordance with GAAP. The following table shows the relationship of NOI to GAAP Revenue and Property expense in CT REIT’s Consolidated Statements of Income and Comprehensive Income: CT REIT Funds from Operations (FFO) and Adjusted Funds from Operations Funds from Operations FFO is a non-GAAP financial measure of operating performance used by the real estate industry, particularly by publicly traded entities that own and operate income-producing properties. This measure is most directly comparable to Net income and Comprehensive income, GAAP measures reported in the consolidated financial statements. FFO should not be considered as an alternative to Net income or Cash flow provided by operating activities determined in accordance with IFRS Accounting Standards. CT REIT calculates its FFO in accordance with Real Property Association of Canada’s publication “REALPAC Funds From Operations & Adjusted Funds From Operations for IFRS” (REALPAC FFO & AFFO). The use of FFO, together with the required IFRS Accounting Standards presentations, have been included for the purpose of improving the understanding of the operating results of CT REIT. Management believes that FFO is a useful measure of operating performance that, when compared period over period, reflects the impact on operations of trends in occupancy levels, rental rates, operating costs and property taxes, acquisition activities and interest costs, and provides a perspective of the financial performance that is not immediately apparent from Net income determined in accordance with IFRS Accounting Standards. FFO adds back items to Net income that do not arise from operating activities, such as fair-value adjustments. FFO, however, still includes non-cash revenues relating to accounting for straight-line rent and makes no deduction for the recurring capital expenditures necessary to sustain the existing earnings stream. Adjusted Funds from Operations AFFO is a non-GAAP financial measure of recurring economic earnings used in the real estate industry to assess an entity’s distribution capacity. This measure is most directly comparable to Net income and Comprehensive income, GAAP measures reported in the consolidated financial statements. AFFO should not be considered as an alternative to Net income or Cash flows provided by operating activities determined in accordance with IFRS Accounting Standards. CT REIT calculates its AFFO in accordance with REALPAC’s FFO and AFFO. CT REIT calculates AFFO by adjusting FFO for non-cash income and expense items such as amortization of straight-line rents. FFO is also adjusted as a reserve for maintaining productive capacity required for sustaining property infrastructure and revenue from real estate properties and direct leasing costs. As property capital (C$ in millions) Q4 2024 Q4 2023 2024 2023 Income before income taxes $ 529.1 $ 263.0 $ 1,246.0 $ 572.8 Less: Other operating segments 393.8 224.7 $ 811.8 343.3 CT REIT income before income taxes $ 135.3 $ 38.3 $ 434.2 $ 229.5 Add: CT REIT fair value (gain) loss adjustment (54.8) 39.3 (119.1) 78.6 CT REIT deferred taxes (0.3) (0.6) (0.1) — CT REIT lease principal payments on right-of-use assets (0.2) (0.2) (0.8) (0.9) CT REIT fair value of equity awards (1.4) 0.5 (0.7) (0.6) CT REIT internal leasing expense 0.4 0.4 1.2 1.3 CT REIT funds from operations $ 79.0 $ 77.7 $ 314.7 $ 307.9 Less: CT REIT properties straight-line rent revenue (1.1) (0.3) (4.6) (1.7) CT REIT direct leasing costs 0.2 0.3 0.9 1.2 CT REIT capital expenditure reserve 6.9 6.2 26.0 25.0 CT REIT adjusted funds from operations $ 73.0 $ 71.5 $ 292.4 $ 283.4 MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 53 expenditures do not occur evenly during the fiscal year or from year to year, the capital expenditure reserve in the AFFO calculation, which is used as an input in assessing the REIT’s distribution payout ratio, is intended to reflect an average annual spending level. The reserve is primarily based on average expenditures determined by building condition reports prepared by independent consultants. Management believes that AFFO is a useful measure of operating performance similar to FFO as described, adjusted for the impact of non-cash income and expense items. Diluted FFO per unit and Diluted AFFO per unit Diluted FFO per unit and Diluted AFFO per unit are calculated by dividing FFO or AFFO by the weighted average number of units outstanding on a diluted basis. Management believes that these measures are useful to investors to assess the effect of this measure as it relates to their holdings. The following table reconciles GAAP Income before income taxes to FFO and further reconciles FFO to AFFO: 10.2 Supplementary Financial Measures Average Account Balance Average account balance measures average aggregate account balances in the credit card portfolio, excluding lines of credit and personal loans, divided by the average number of credit card accounts, for the applicable period. Borrowings Outstanding Borrowings outstanding represents drawdowns from committed bank lines of credit. Credit Card Sales and Credit Card Sales Growth Credit card sales is a measure of the net sales charged to credit cards. Credit card sales growth excludes balance transfers and represents year-over-year percentage change. Comparable Sales Comparable sales is commonly used in the retail industry to identify sales growth generated by a Company’s existing store network and removes the effect of opening and closing stores in the period. The calculation includes sales from all stores that have been open for a minimum of one year and one week, as well as eCommerce sales. Comparable sales do not form part of the Company’s consolidated financial statements. Management applies this measure to Consolidated results (including and excluding Petroleum), the Retail segment (including and excluding Petroleum), and all banners under the Retail segment (including but not limited to Canadian Tire Retail, SportChek and Mark’s). MANAGEMENT’S DISCUSSION AND ANALYSIS 54 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS Cost of Debt Cost of debt represents the weighted average finance costs as a percentage of total short-term and long-term debt during the period. eCommerce Sales eCommerce sales refers to sales generated by the Company’s online presence. Only eCommerce sales from corporate stores are included in the Company’s consolidated financial statements. Management applies this measure to Consolidated results, the Retail segment, and banners under the Retail segment. ECL Allowance Rate This measure is the total allowance for expected credit losses as a percentage of total gross loans receivable for the Financial Services segment. Effective Tax Rate Effective tax rate is the tax expense for the period divided by the income before income taxes for the same period. Gross Average Accounts Receivable GAAR is the average accounts receivable from credit cards, personal loans, and lines of credit, before allowances for expected credit losses. Measures using GAAR apply only to the Financial Services segment. Gross Margin Rate Gross margin rate is gross margin divided by revenue. Gross Margin Dollars excluding Petroleum and Gross Margin Rate excluding Petroleum Gross margin dollars excluding Petroleum captures gross margin dollars in the consolidated entity or Retail segment, as measured according to the Company’s IFRS Accounting Standards accounting policy, while excluding gross margin dollars from Petroleum sales. Gross margin rate excluding Petroleum is calculated by dividing gross margin excluding Petroleum by revenue excluding Petroleum. Interest Expense Interest expense represents the finance cost of short-term and long-term debt, which includes lines of credit, medium-term notes, debentures, and senior and subordinated term notes. This metric excludes deposits held by CTB, Franchise Trust indebtedness, and lease liability interest. Loyalty Sales and Loyalty Sales as a Percentage of Retail Sales (Loyalty Penetration) Loyalty sales are Retail sales attributable to Triangle members measured by the percentage of transactions in which loyalty cards are scanned at point-of-sale (loyalty scan rate). Loyalty sales as a percentage of retail sales is calculated by dividing loyalty sales by Retail sales. Net Credit Card Write-off Rate Net credit card write-off rate measures write-offs of credit card balances only, net of recoveries for the past twelve months, as a percentage of the credit card GAAR. Owned Brands Penetration Owned Brands penetration is calculated by dividing sales of Owned Brands by Retail sales. Personalized Sales Personalized sales are Retail sales made to loyalty members through personalized offers. Property Revenue Property revenue includes all amounts earned from tenants pursuant to lease agreements including property taxes, operating costs, and other recoveries. Property Expense Property expense consists primarily of property taxes, operating costs, and property management costs (including any outsourcing of property management services). MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 55 Retail Sales Retail sales refers to the point-of-sale value of all goods and services sold to retail customers at stores operated by Dealers, Mark’s and SportChek franchisees, and Petroleum retailers, at corporately-owned stores across all banners under the Retail segment, services provided as part of the Home Services offering, and of goods sold through the Company’s online sales channels, that in aggregate do not form part of the Company’s consolidated financial statements. Management applies this measure to Consolidated results (including and excluding Petroleum), the Retail segment (including and excluding Petroleum), and all banners under the Retail segment (including but not limited to Canadian Tire Retail, SportChek, Mark’s, Helly Hansen, Canadian Tire Gas+, and Owned Brands). Retail SG&A Rate and Retail SG&A as a Percentage of Revenue excluding Petroleum Retail SG&A rate is calculated by dividing Retail SG&A by Retail revenue. Retail SG&A as a percentage of revenue excluding Petroleum is calculated by dividing Retail SG&A by Retail revenue excluding Petroleum. Return on Receivables (ROR) ROR assesses the profitability of the Financial Services’ total portfolio of receivables. ROR is calculated by dividing Financial Services’ income before income tax and gains/losses on disposal of property and equipment by the average of Financial Services’ total-managed portfolio over a rolling 12-month period. Revenue as Percentage of GAAR Revenue as percentage of GAAR for the Financial Services segment is the rolling 12-month revenue divided by gross average accounts receivable. Revenue Excluding Petroleum Revenue excluding Petroleum captures revenue in the consolidated entity and Retail segment, as measured according to the Company’s IFRS Accounting Standards accounting policy, while excluding revenues from petroleum sales. Sales per Square Foot Comparisons of sales per square foot metrics over several periods help identify whether existing assets are being made more productive by the Company’s introduction of new store layouts and merchandising strategies. Sales per square foot is calculated on a rolling 12-month basis for the Retail segment. This calculation includes the period in which stores were temporarily closed. For Canadian Tire, retail space does not include seasonal outdoor garden centres, auto service bays, warehouses, and administrative space. For SportChek and Mark’s, it includes both corporate and franchise stores and warehouse and administrative space. MANAGEMENT’S DISCUSSION AND ANALYSIS 56 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 11.0 Risks and Risk Management Overview The effective management of risk is a key priority for the Board and Senior Management. Balanced risk-taking and effective risk management create valuable business returns and shareholder value, as well as market opportunities and competitive advantages, all of which support profitable growth over the long term. CTC has adopted an Enterprise Risk Management (ERM) Policy and Framework, Risk Appetite Statements and other policies designed to identify, assess, manage, monitor, escalate and report risks that, alone or in combination with other interrelated risks, could have a significant adverse impact on the Company’s brand, financial performance and/or ability to achieve its strategic objectives (key risks). The Company is modernizing its ERM Framework and through that process, Management has refined its key risks to align with CTC’s evolving strategic objectives and the dynamic business environment. For further information on the ERM Policy and Framework, please refer to Section 2.6 of the Company’s 2024 AIF. The following section provides a description of key risks as well as other risks that may have a material adverse effect on the Company, grouped into business and operational risks, and financial risks. In addition to the risks described below, there may be additional risks and uncertainties not currently known to Management, or risks that are not considered material at this time which may evolve and materially and adversely affect the Company in the future. The actual effect of any risk may be materially different than what is currently anticipated. Many of the risks are interconnected, influencing the likelihood and impact of other risks. CTC strives to implement appropriate measures and risk management strategies to address its key risks. Management regularly reviews its risk management strategies and measures for sufficiency given the dynamic nature of the risks, as well as emerging risks and/or trends, which might have an impact on CTC’s residual risk exposures. However, there can be no assurance that these strategies and measures will successfully mitigate these risks. When considering whether to purchase or sell securities of CTC, investors and others should carefully consider these risks (including that risk management strategies and measures may not successfully mitigate such risks) as well as other uncertainties and factors that may adversely impact CTC’s future performance. For a further discussion of risks that affect CT REIT, please refer to Section 5 in CT REIT’s Annual Information Form and Section 12.0 in CT REIT’s Management’s Discussion and Analysis for the period ended December 31, 2024, which are not incorporated herein by reference. 11.1 Business and Operational Risks Strategic Agility The Company selects, invests in, resources and executes on strategies intended to address opportunities, predict market activity and positively differentiate its performance in the marketplace. Macroeconomic and geopolitical conditions, emerging and disruptive technologies, and dynamic competitive forces may fundamentally alter the assumptions underlying the Company’s strategy. The Company’s success depends on, among other things, its ability to be agile and responsive to trends and developments, and to pivot its strategic direction, as needed, in a timely and effective manner. The Company’s diverse internal operations, ongoing projects and investments, legacy IT systems, existing contractual obligations and dependence on third parties, including Franchise Holders (defined below), may create challenges in its ability to respond in an agile manner. In addition, the scope, complexity, and pace of change of strategic initiatives undertaken by the Company may impact its ability to execute on those initiatives, achieve the anticipated benefits, and build the capabilities to sustain those benefits, and may also divert attention from the performance of the business. Any future acquisitions, dispositions, partnerships, and similar transactions must be successfully executed and, where applicable, integrated into the Company’s strategies and operations to realize any anticipated synergies and other benefits, which may be subject to significant uncertainty. The Company’s strategy may include cost-saving measures, which could impact its strategic agility, and the Company may also fail to realize the anticipated cost savings. Should any of these risks materialize, the Company may experience material adverse impacts on its strategic objectives, financial performance and operations, including reduced shareholder returns, which may lead to shareholder activism. MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 57 Franchise Operations The Company’s Canadian Tire stores and Party City stores are operated by Dealers, certain SportChek banner stores (Sports Experts, Atmosphere, Hockey Experts and Sports Rousseau) and Mark’s stores are operated by franchisees, and the Company’s Petroleum gas bars are operated by independent retailers (together with the Dealers and other franchisees, for the purposes of this section only, collectively referred to as Franchise Holders). Franchise Holders are independent business operators that have entered into agreements with the Company to operate their respective stores in a manner consistent with CTC’s standards, requiring the Company to manage complex relationships and contractual arrangements. A substantial portion of the Company’s revenues come from sales to Dealers and other amounts paid by Franchise Holders and, as a result, poor performance by Franchise Holders could negatively impact the Company’s financial results. The success of the operations and financial performance of Franchise Holders may be negatively affected by factors beyond the Company’s control. In many cases, Franchise Holders are subject to similar risks to the Company, including with respect to macroeconomic conditions, seasonality, talent, supply chain and customer trends, which may impact both their, and ultimately CTC’s, operations and financial performance. As independent business operators, Franchise Holders may not operate their stores in a manner consistent with CTC’s standards (despite contractual obligations), which may adversely impact their financial performance and, by association, their actions may be attributed by customers to CTC or its banners, damaging the Company’s reputation. Franchise Holders may fail to effectively support the implementation of marketing programs and operational and strategic initiatives, which could adversely impact the effectiveness of the Company’s strategy and related tactics. New or existing franchise legislation or other legal requirements may impact the Company’s ability to operate or result in additional liability to the Company as a franchisor. CTC may also become involved in legal disputes with one or more Franchise Holders. Should any of these risks materialize, the Company may experience material adverse effects on its strategic objectives, financial performance and operations, including reduced revenue from sales to Franchise Holders and margin sharing arrangements with Dealers, loss of reputation and diminished customer experience. Brand and Reputation CTC must protect and strengthen its reputation and build brand trust and equity to enhance the value and identity of its brands. The strength of CTC’s brand and reputation depends on, among other things, providing a relevant product assortment that meets evolving customer needs, and operating in a manner that meets the expectations of its customers and other stakeholders. Negative media coverage and social media activity, including in connection with failures in cyber security, data and privacy, regulatory compliance, management of environmental, social and governance (ESG) matters such as talent, climate change and responsible sourcing, or customer or employee interactions, could impact the Company’s brand and reputation. Actions of Franchise Holders, over whom the Company does not have control, may also be attributed to the Company, which may negatively impact the Company’s brand and reputation. Should any of these risks materialize, the Company may experience material adverse impacts on its strategic objectives, financial performance and operations, including decreased sales and market share, challenges attracting and retaining talent, and a loss of stakeholder trust and connection. Geopolitical Conditions Global operations of the Company include the sourcing and supply chain aspects of the Retail segment and the Helly Hansen business. To reliably, efficiently and effectively source its products and operate internationally, the Company must anticipate and respond to known and unknown geopolitical conditions in countries where the Company or its vendors operate, particularly in Asia. Geopolitical conditions include the implementation of trade restrictions, quotas, tariffs or other import-related taxes, changes in government commitments and direction, civil unrest in foreign countries, changes in diplomatic or trade relationships, and wars, terrorism or other conflicts. In February 2025, the United States government announced proposed tariffs against Canadian goods and the Canadian government announced proposed retaliatory tariffs against U.S. goods, which may or may not be enacted. The breadth of goods these tariffs may cover if they are enacted, how long they may be in effect and whether additional tariffs or further trade restrictions may be imposed are also uncertain. Tariffs and other trade restrictions may result in adverse macroeconomic conditions (such as reduced gross domestic product and increased inflation and unemployment), and the Company may experience material adverse impacts, including reduced sales and increased cost of goods and consumer credit risk. The duration and scale of geopolitical conditions are uncertain. International conflicts such as wars or acts of terrorism may exacerbate global tensions, potentially leading to further trade restrictions, additional or expanded conflicts, or other geopolitical developments. Should any of these risks materialize, the Company may experience material adverse impacts on MANAGEMENT’S DISCUSSION AND ANALYSIS 58 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS its strategic objectives, financial performance and operations, including supply chain disruptions, reduced sales, increased costs, regulatory non-compliance, increased cyber security threats, loss of reputation and reduced or lost access to certain global markets. Talent Workforce The Company must attract, retain and develop an appropriately skilled, diverse and committed workforce, including retail managers and sales associates, personnel who staff its distribution centres and contact centres, and other professionals, to support its operations. The Company’s ability to meet its workforce needs and the associated costs are subject to a wide variety of external factors, such as increased market pressures on wage rates, unemployment levels, and health and other insurance costs; the impact of changes to legislation and regulations; changing demographics and expectations among the workforce; shifts in labour relations; and the Company’s reputation in the labour market. Should any of these risks materialize, the Company may experience material adverse impacts on its strategic objectives, financial performance and operations, including increased wages, higher turnover and diminished customer experience. Key personnel The Company relies on Executives and other key personnel to drive its growth and success, including cultivating a meaningful and productive corporate culture. The market for talent is highly competitive, and CTC’s ability to attract and retain key individuals depends on a variety of factors, such as the availability of qualified individuals, the attractiveness of CTC as an employer and CTC’s ability to provide competitive compensation and benefits. Should any of these risks materialize, the Company may experience material adverse impacts on its strategic objectives, financial performance and operations, including increased costs and reduced strategic agility and competitive positioning. Macroeconomic Conditions The Company’s business is subject to fluctuations and fundamental changes in the external environment at the regional, provincial, national and global level. Macroeconomic conditions, such as inflation, unemployment levels, gross domestic product, consumer income and debt levels, and demographics are impacted by government fiscal, and monetary policies, interest rates, tax rates and policies, political uncertainty, geopolitical conditions, foreign currency rates, pandemics or epidemics, and natural disasters, as applicable. Macroeconomic conditions and the factors influencing these conditions are inherently uncertain, volatile and beyond the Company’s control. Adverse macroeconomic conditions can lead to reduced customer spending levels, shifting purchase patterns towards less profitable products or categories outside the Company’s assortment, and increased costs of goods, services, talent, equipment and real estate matters (such as higher lease rates and increased property development and renovation costs), as well as disruptions to commerce and international trade. Should any of these risks materialize, the Company may experience material adverse impacts on its strategic objectives, financial performance and operations, including reduced sales, increased costs and supply chain disruptions. Technology Infrastructure The Company is increasingly dependent on the functionality of its technologies to support its operations, such as financial reporting and accounting, inventory management and replenishment, data management and customer interactions. The retail digital platforms operated by the Company play an integral role in facilitating an omnichannel shopping experience and must be maintained and adapted over time to meet the needs of its customers. The Company’s legacy IT systems can be rigidly designed, difficult to scale, and less adaptable and efficient over time. Technological changes and solutions are critical to the Company’s strategic plans, but can be slow, costly and difficult to implement, resulting in increased risk of failures or outages. Failures or outages in the availability, capacity or sustainability of these systems, which may be caused by, for example, software, hardware or telecommunication failures or employee or third-party error or malfeasance, may result in disruptions to the business. Should any of these risks materialize, the Company may experience material adverse impacts on its strategic objectives, financial performance and operations, including financial losses due to downtime, increased costs to maintain the systems and migrate to new IT systems, slower implementation of strategic initiatives and loss of reputation. MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 59 Emerging and Disruptive Technology Emerging and disruptive technologies are impacting the Company’s business model and operations, including advancements in areas such as artificial intelligence (AI). AI is an increasingly complex and fast-moving space with varied applications, including generative AI and machine learning. These technologies can potentially render existing businesses, products and services obsolete, eliminate competitive advantages, reduce barriers to competition for new competitive entrants and fundamentally change customer expectations, requiring the Company to assess and adopt new technologies, and mitigate the impacts of technological disruptions. New technologies may require significant resources and investment, with no guarantee of achieving the desired outcomes or recovering the costs incurred. In addition, the adoption of any new technologies brings additional challenges and concerns that require diligent management and oversight, such as privacy and ethical issues, cyber security risks, and algorithmic biases, deficiencies or inaccuracies. These risks may be impacted by the proliferation and adoption of these technologies across the broader market and evolving stakeholder expectations to leverage new and innovative technologies. Should any of these risks materialize, the Company may experience material adverse impacts on its strategic objectives, financial performance and operations, including reduced sales and competitive positioning, increased costs, regulatory non-compliance and potential litigation. Cyber Security The Company’s IT systems, as well as those of its third-party service providers, vendors and strategic partners, are subject to the increasing frequency and sophistication of global cyber security threats, such as ransomware attacks, malware, denial of service, viruses, worms, phishing, internal and external security breaches and other known or unknown disruptive events. These systems, including relevant hardware and software, may also contain exploitable vulnerabilities, bugs, or defects. Cyber security threats can be orchestrated by insiders or external actors, including sophisticated criminal organizations, each with different motives and skill levels. Geopolitical conditions can also influence the motivations of certain external actors, potentially increasing the risk of cyber security threats. The methods used to gain unauthorized access, disable, modify, or degrade service or sabotage systems are constantly evolving, and are increasingly difficult to protect against. The IT systems that the Company relies upon, including back-up systems, are also vulnerable to damage, interruption, disability or failures arising from a variety of potential issues, such as physical theft, fire, power loss, computer and telecommunication failures or other catastrophic events. Technological changes and solutions are critical to the Company’s strategic plans and the Company’s systems are increasingly aging, which necessitate the introduction of new systems and technologies, including emerging technologies, and may create new exposure to cyber security threats. Should any of these risks materialize, the Company may experience material adverse impacts on its strategic objectives, financial performance and operations, including business disruptions, financial losses due to downtime, increased costs, loss of reputation, potential litigation and regulatory non-compliance. A cyber security breach at the Company may also impact third parties such as vendors or customers, leading to potential liabilities or compensation to those parties. The Company has a cyber security program pursuant to which it has implemented and actively monitors policies, processes and controls to protect the Company’s IT systems, and monitors risks with respect to third-party IT systems. Accountability for the Company’s cyber security program, operations and governance is held by the Chief Information Security Officer who reports to, and is supported by, the Chief Information & Technology Officer. Security protocols and information security policies facilitate compliance with information security standards, including those relating to personal information of customers and employees. Furthermore, CTC has implemented additional cyber security measures with respect to employee training, monitoring and testing, systems protection, and business continuity and contingency planning, and has established security processes and standards for its third-party service providers. However, there can be no assurance that these measures will successfully mitigate these risks. Data and Privacy In the normal course of business, the Company and its third-party service providers collect, store, use, destroy and, where appropriate, disclose, sensitive and confidential data and information, such as the personal information of its customers and employees, proprietary information of CTC and its business partners, and other information. Data, analytics and technology are becoming increasingly relevant to the Company’s business operations and strategy, informing and enhancing retail offerings and driving customer engagement and spending MANAGEMENT’S DISCUSSION AND ANALYSIS 60 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS patterns. The Company must ensure the integrity, reliability and security of this information in a manner compliant with privacy laws that govern the Company’s collection, storage, use and disclosure of this information to support its business operations and strategy. The Company’s ability to collect and use data for these purposes may be hampered by evolving privacy laws that create significant costs or necessitate changes to business practices. Should any of these risks materialize, the Company may experience material adverse impacts on its strategic objectives, financial performance and operations, including decreased sales and competitive positioning, loss of reputation, regulatory non-compliance, potential litigation, and business and reporting disruptions. Third Parties CTC relies on third parties, over whom the Company does not have control, for various aspects of the Company’s business and operations. Third-party vendors must manufacture products of an appropriate quantity and quality and in a timely manner to support the Company’s sale of products to customers and its Franchise Holders. Various suppliers, consultants and other service providers support the Company across a range of enterprise matters, such as strategy, technology, procurement, supply chain, customer service, marketing and advertising, flyer delivery and cyber security. The Company also relies on other third parties, such as joint venture participants as well as loyalty and other partners, to support the achievement of its strategic objectives. Third parties are, in turn, subject to a variety of risks which may impact their performance of contractual obligations owed to CTC and ultimately CTC’s operations. For example, third parties may experience business or supply chain disruptions that hinder their ability to manufacture products sold by the Company or provide services to the Company, as applicable, or the Company’s third parties may become financially unstable or insolvent, impacting the performance of their obligations. In addition, CTC may fail to effectively manage the scope, complexity and materiality of relationships with third parties to ensure ongoing business operations. Should any of these risks materialize, the Company may experience material adverse impacts on its strategic objectives, financial performance and operations, including increased costs, reduced sales, decreased product diversification, product quality issues or recalls, insufficient inventory, and loss of reputation. Supply Chain CTC relies on internal resources and third-party logistics providers to manage the movement of goods between vendors, the Company’s distribution centres and stores operated by the Company or its Franchise Holders. A substantial portion of the Company’s product assortment is sourced from foreign vendors, particularly in Asia, broadening the Company’s exposure to supply chain-related challenges. The integrity, reliability and costs associated with the Company’s supply chain may be impacted by a wide variety of external factors, such as macroeconomic conditions (including foreign currency rates) and geopolitical conditions (including civil unrest, trade disputes and tariffs), raw material and component shortages, fuel availability, labour shortages or stoppages, responsible sourcing issues, supply and demand for freight services, including capacity at ports, climate change and weather events, pandemics or epidemics, and natural disasters. In the event of supply chain disruptions, including shortages, the Company may seek alternative sources of products, if available, which may increase costs due to higher product and freight costs. Should any of these risks materialize, the Company may experience material adverse impacts on its strategic objectives, financial performance and operations, including supply chain disruptions, insufficient inventory, reduced sales, decreased margin and loss of reputation. Responsible Sourcing The Company’s business relies on a global supply chain, with many vendors based in countries which carry greater risks of human rights, worker safety and environmental issues. The Company maintains a Supplier Code of Business Conduct that outlines the standards vendors must adhere to, covering topics such as occupational health and safety, child labour, forced or involuntary labour, compensation and human rights. Although there are mechanisms in place to monitor vendors and address non-conformances, there can be no assurance that those mechanisms will be sufficient or that responsible sourcing risks will not materialize. Further, responsible sourcing risks exist along the Company’s entire supply chain, but the Company has limited visibility to the suppliers beyond its direct vendors. The Company’s global supply chain model also garners heightened levels of public scrutiny, and allegations may arise, whether founded or unfounded, of business practices that are contrary to the Company’s standards. Should any of these risks materialize, the Company may experience material adverse impacts on its strategic objectives, financial performance and operations, including product recalls, loss of reputation, regulatory non-compliance and potential litigation. MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 61 Loyalty Program Triangle Rewards, the Company’s loyalty program, is a key enabler of sustained cross-banner customer engagement and personalized marketing, which supports the Company’s operations and growth. Failure to invest in Triangle Rewards, deliver relevant and personalized customer offers and experiences, preserve positive customer perceptions and adapt to evolutions in the loyalty landscape, may limit CTC’s ability to attract, engage and retain Triangle Rewards members. Partnerships with other loyalty programs are intended to help grow Triangle Rewards; however, the Company may be unable to identify and negotiate arrangements with attractive and uncommitted loyalty partners complimentary to CTC’s business. Further, the Company must execute on and integrate its loyalty partnerships in a timely and effective manner, which may be challenging due to the complex nature of such partnerships, in order to realize the anticipated benefits. Loyalty partners may experience reputational issues which may negatively impact the applicable partnership and CTC’s brand and reputation. In addition, Triangle Rewards relies on continued access and consent to use customer data. Developments that reduce access, such as legal developments, customer preferences or reduced customer trust, could impair the success of the program. Should any of these risks materialize, the Company may experience material adverse impacts on its strategic objectives and financial performance, including decreased sales and market share. Competitive Environment The Company operates in highly competitive and constantly evolving markets, and its success in maintaining and growing market share depends on, among other things, its ability to anticipate and address these competitive pressures. The Company’s retail banners compete for customers, employees, store sites, products and services with many new and established international, national and regional businesses and retail hyperscalers. Helly Hansen competes with other specialty brands in the outdoor sports apparel, footwear and workwear markets. Petroleum competes with other national and regional operators of gas bars, convenience stores and car washes. CTB competes with other banks and financial institutions in the highly regulated and competitive Canadian credit card and deposit product market. Competitors may build and sustain brand awareness and gain market share more rapidly and effectively than the Company and may attempt to capture market share through actions such as reduced pricing, enhanced value offerings, liquidations and promotions, as applicable. The Company’s success in competing for market share depends on its ability to recognize changes in macroeconomic conditions, and customer trends, preferences and spending patterns, along with other trends and developments impacting its strategy, and respond in a timely and effective manner. Should any of these risks materialize, the Company may experience material adverse impacts on its strategic objectives and financial performance, including decreased sales, margin and market share. Customer Trends The success of the Company’s retail business relies upon its ability to anticipate and respond in a timely and agile manner to shifts in customer trends, preferences and spending patterns, which can be challenging to predict. These include preferences for online shopping (including the online experience), increased demand for particular product categories and shifting spending priorities between discretionary and essential spending. The Company’s ability to anticipate and respond to changing tastes and preferences depends on many factors, including the availability of accurate and relevant data, and relies upon the Company’s ability to procure relevant product assortments, market those assortments to drive customer conversion, manage inventory levels and implement competitive pricing and promotion strategies. Should any of these risks materialize, the Company may experience material adverse impacts on its strategic objectives and financial performance, including reduced sales, insufficient or excess inventory, product markdowns, and loss of reputation. Seasonality The Company’s business is seasonal in nature, with the fourth quarter typically generating the largest share of revenue and earnings, and the first quarter the least. The Retail segment derives a significant amount of its revenue from the sale of seasonal merchandise, such as outdoor home and garden products in spring and summer, and cold weather products and Christmas merchandise during the winter. Any issues that may affect sales or operations will have a more pronounced impact on the Company if they occur during key seasons. For example, any business or supply chain disruptions, which may be caused by cyber security breaches, technology failures, staffing shortages, climate change and weather events, natural disasters, pandemics or epidemics, and geopolitical developments, may hamper the Company’s ability to capitalize on key seasons. In addition, if key regions experience unusual weather patterns, particularly during the winter, historical sales of certain products, including seasonal merchandise, may not occur or may shift to other quarters, and products in stores may be MANAGEMENT’S DISCUSSION AND ANALYSIS 62 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS incompatible with weather conditions. Should any of these risks materialize, the Company may experience material adverse impacts on its strategic objectives and financial performance, including reduced sales and excess or insufficient inventory. Legal Regulatory Compliance The Company is subject to a wide variety of laws and regulations, such as those involving privacy, employment, franchise, consumer protection, securities, tax, product safety, product labelling, intellectual property, environmental, health and safety, anti-trust and competition, trade, ESG and other matters. These, and potential additional legislation and regulations, are subject to change and may impose constraints on CTC’s operations, increase the cost of operating the business, or require substantial future capital or other expenditures. The Company’s Financial Services segment operates in a highly regulated industry, with unique regulatory requirements that are more onerous than a traditional retail enterprise. Failure by the Company to comply with applicable laws, regulations and orders could subject the Company to civil or regulatory actions, investigations or proceedings, such as fines, assessments, injunctions or recalls. Should any of these risks materialize, the Company may experience material adverse impacts on its strategic objectives, financial performance and operations, including loss of reputation, increased costs and reduced sales. Litigation The Company is involved in, and potentially subject to, claims, disputes and legal proceedings. These may include product liability claims, intellectual property infringement lawsuits, commercial disputes, shareholder class actions, derivative claims and disputes with Franchise Holders. In some cases, the Company relies on legal proceedings to enforce its rights, including with respect to contractual arrangements and intellectual property. The potential outcome of litigation is uncertain, and the Company may not be successful. Should any of these risks materialize, the Company may experience material adverse impacts on its strategic objectives, financial performance and operations, including increased costs, loss of reputation and diversion of Management’s time and attention. Climate Change The effects of climate change are driving international coordinated efforts for a transition to a low-carbon economy, and requires the Company to adapt its operations and business model in response to how it is impacted by, and contributes to, the effects of climate change. Climate change poses physical risks, which encompass increasing mean temperatures and the increasing frequency and severity of weather-related events such as floods, wildfires and windstorms, and transition risks, such as policy, regulatory, market or technology changes that may arise as part of the transition to a low-carbon economy. These risks may be impacted by the willingness, or lack thereof, of governments, industries and other actors to organize and decarbonize global economies. Moreover, the adaptation and transition strategies required to manage these risks may require significant operating changes and expenditures. Should any of these risks materialize, the Company may experience material adverse impacts on its financial performance and operations, including store operation, supply chain and other business disruptions, physical damage to the Company’s assets, product category obsolescence, and increased procurement (related to fuels, electricity, production, transportation and raw materials), insurance and other costs. Environmental, Social and Governance The Company actively manages its priority ESG topics, some of which can pose a direct risk to the Company’s business, as described in the talent, cyber security, data and privacy, climate change and responsible sourcing risks. In connection with these priority topics, the Company has developed ESG reporting and established publicly announced strategies, targets and commitments. These goals, commitments and targets reflect the Company’s current plans and aspirations, but there is no certainty that they will meet the expectations of its stakeholders. Further, they are subject to various risks and uncertainties related to financial and operational feasibility and the implementation of relevant government and industry initiatives, which may lead the Company to adjust, refine, or withdraw these goals, commitments and targets in the future. Should any of these risks materialize, the Company may experience material adverse impacts on its strategic objectives and operations, including loss of reputation and challenges attracting and retaining talent. MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 63 Business Disruptions The Company’s operations and critical business services are at risk of business disruptions. Business disruptions can occur as a result of various incidents, such as climate change and weather events, natural disasters, fires, pandemics or epidemics, work stoppages, supply chain disruptions, boycotts, geopolitical conditions, cyber security breaches, prolonged IT systems failures, power failures, border closures, acts of terrorism, and other national or international catastrophes. The length of any disruption may be uncertain, and there is no assurance that the Company’s operations and critical business services will be able to resume in the same manner, and on a timely basis, after such an event. Should any of these business disruptions materialize, the Company may experience material adverse impacts on its strategic objectives, financial performance and operations, including reduced sales, increased costs and loss of reputation. 11.2 Financial Risks The Company has exposure to credit risk, liquidity risk and market risk. For further information on the Company’s financial instruments, their classification, their impact on financial statements, and determination of fair value, refer to Notes 3 and 34 of the 2024 Consolidated Financial Statements. The Company is also exposed to other financial risks, including with respect to commodity price and insurance. Credit The Company’s relationships with its customers and other counterparties can create credit risk, which is a risk of loss if the counterparty fails to meet their contractual obligations. The risk arises principally from operations of the Bank’s credit card loan portfolio, CTC’s interaction with its Franchise Holders and wholesale customers, and its financial instruments, which are discussed in more detail below. Adverse macroeconomic conditions, such as reduced gross domestic product and consumer income levels, and increased inflation, unemployment and debt levels may increase credit risk. Consumer Credit Risk Through the granting of credit cards, the Bank is exposed to consumer credit risk with respect to the ability and willingness of the Bank’s customers to repay loans owing to it. Refer to Note 9 of the 2024 Consolidated Statements for information on the credit quality and performance of loans receivable. Should any of these risks materialize, the Company may experience material adverse impacts on its financial performance, including provisions for credit losses and reduced cash flows and liquidity. CTB manages consumer credit risk by: maintaining credit risk management policies, processes and controls; employing credit-scoring models to monitor the creditworthiness of customers; using technology to make informed credit decisions for each new and existing customer account to limit credit risk exposure; adopting technology to improve the effectiveness of the collection process; and monitoring macroeconomic conditions, including consumer debt, income and unemployment levels, and other factors, including interest rates. However, there can be no assurance that these measures will successfully mitigate these risks. Franchise Holder Credit Risk The Company is also exposed to credit risk in connection with its business dealings with its Franchise Holders and wholesale customers, who may be unable or unwilling to satisfy their debts. In addition, CTC is exposed to credit risks through its guarantees of standby letters of credit (LCs) in connection with Franchise Trust’s Dealer loan portfolio and CTC’s guarantees provided to third parties for bank debt or inventory buybacks for certain Franchise Holders, which may be called upon by the issuing banks. Should any of these risks materialize, the Company may experience material adverse impacts on its financial performance, including provisions for credit losses and bad debts, reduced cash flows and liquidity. For additional information on guarantees and commitments, refer to Note 35 of the 2024 Consolidated Statements. Financial Instrument Counterparty Credit Risk Counterparty credit risk includes risk relating to cash balances, investment activity, and the use of financial derivatives. Exposure to counterparty credit risk may occur any time funds are extended, committed or invested through an actual or implied contractual agreement. Should any of these risks materialize, the Company may experience material adverse impacts on its financial performance, including provisions for credit losses, fair value adjustments and reduced cash flows and liquidity. MANAGEMENT’S DISCUSSION AND ANALYSIS 64 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS The Financial Risk Management Board Policy (FRM Policy) governs the Company’s approach to managing its exposure to financial instrument counterparty credit risk. The Company’s financial instrument portfolio is diversified across financial institutions, provincial and federal governments and, to a lesser extent, corporate issuers and asset-backed issuers. The FRM Policy mandates transacting only with highly-rated financial institutions and other counterparties managed within the specific limits for credit exposure and term-to-maturity pursuant to the policy. However, there can be no assurance that these measures will successfully mitigate these risks. Liquidity The Company requires sufficient and cost-effective liquidity to meet the obligations associated with its indebtedness and other financial liabilities. Its ability to service these obligations depends on cash flows from operating activities and financing sources such as bank lines of credit, commercial paper programs, broker guaranteed investment certificate (GIC) deposits, retail deposits, new public or private issuances of debt or equity and securitization of credit card loans receivable through GCCT. For information regarding the Company’s financing sources, refer to section 6.5 of this MD&A. At times, operational cash flows may be insufficient and liquidity risk would arise if the Company were unable to access its funding sources in a cost-effective manner. Macroeconomic conditions, such as reduced consumer income levels and increased inflation, unemployment and debt levels may increase liquidity risk. The Company’s ability to obtain and maintain cost-effective financing depends on its credit ratings, and credit ratings may be downgraded due to various reasons, including reduced revenues, increased debt levels and adverse macroeconomic conditions. Should any of these risks materialize, the Company may experience material adverse impacts on its strategic objectives, financial performance and operations, which may lead to the Company seeking additional funding on unfavourable terms, delaying or limiting its capital expenditures, foregoing potential opportunities, liquidating assets or restructuring its debt. The FRM Policy governs the Company’s approach to managing its exposure to liquidity risk. The Company uses a consolidated cash flow forecast model to regularly monitor its near-term and longer-term cash flow requirements, which assists in optimizing its short-term cash and indebtedness position while evaluating longer- term funding and capital allocation strategies. In addition, CTB’s Asset Liability Management Policy governs its approach to managing its exposure to liquidity risk through a liquidity management framework and satisfaction of applicable regulatory requirements. However, there can be no assurance that these measures will successfully mitigate these risks. Market Market risk is the risk that changes in market prices, such as foreign currency rates, interest rates and other prices, will affect the Company’s income or the value of its holdings of financial instruments. The Company uses financial instruments to mitigate certain market risks including foreign currency, interest rate and other price risks (such as equity prices impacting compensation expense); however, there can be no assurance that these measures will fully mitigate these risks while optimizing the return. Foreign Currency Risk While the Company’s sales are predominately in Canadian dollars, a significant amount of its merchandise is sourced globally. In 2024, approximately 49 percent of Canadian Tire Retail, 35 percent of Mark’s, and 19 percent of SportChek inventory purchases were sourced directly from vendors outside Canada and denominated primarily in U.S. dollars (USD). Helly Hansen also sources most of its inventory purchases from vendors in Asia, and such purchases are denominated in USD and Euros. Fluctuations in foreign currency exchange rates are driven by various factors, including macroeconomic conditions and geopolitical developments. These fluctuations can impact the cost of purchases when converted back to Canadian dollars. Certain vendors may adjust their prices due to their own exposure to currency fluctuations which may affect the price they charge the Company for merchandise. The Company may attempt to pass on the impacts from currency fluctuations to customers; however, its ability to do so would be subject to market conditions. Should any of these risks materialize, the Company may experience material adverse impacts on its financial performance, including increased inventory costs and decreased margin. The FRM Policy governs the Company’s approach to managing foreign currency risk, including hedging forecasted USD purchases with foreign exchange derivatives. The Company has hedged a significant portion of near-term forecasted USD purchases to minimize the immediate impacts of adverse changes in foreign currency exchange rates. However, there can be no assurance that these measures will fully mitigate this risk, and sustained changes in foreign currency exchange rates may impact purchasing costs over time. MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 65 Interest Rate Risk The FRM Policy governs the Company’s approach to managing its exposure to interest rate risk, requiring a minimum of 75 percent of the Company’s consolidated debt (short-term and long-term debt excluding Franchise Trust) to be carried at fixed interest rates. As a result, a one percent change in interest rates would not materially affect the Company’s Net income or equity due to minimal floating interest rate exposure. The Company is exposed to interest rate changes from its short-term Retail and Financial Services segment borrowings (bank lines of credit and U.S. and GCCT commercial paper programs), variable rate long-term debt (Series H medium-term notes), and the Financial Services segment’s future issuances of HIS account deposits and TFSA deposits. The Company is also exposed to interest rate risk through the refinancing of maturing debt and long-term GICs as well as from its impact on the credit risk of consumers, and Franchise Holders as discussed above. Changes in interest rates can be favourable or unfavourable, and are impacted by various factors, including macroeconomic conditions. Should any of these risks materialize, the Company may experience material adverse impacts on its financial performance, including increased borrowing costs, reduced cash flows, and forgone opportunities for investment and growth. The Company manages its exposure to future interest rate increases by entering into interest rate derivatives and exercising early termination or redemption options under its financial liabilities. CTB has hedged a portion of its planned issuances of GCCT asset-backed term notes and broker GIC deposits in 2025 to 2029 with interest rate derivatives. Additionally, CTB holds short-term interest-bearing investments in reserve to comply with liquidity and regulatory requirements and charges interest on credit cards, which may offset certain interest rate fluctuations. However, there can be no assurance that these measures will successfully mitigate these risks. Commodity Price The operating performance of Petroleum is dependent on the global oil market and the commodity price of oil. The Company must balance price fluctuations against its ability or desire to pass those costs along to the customer or absorb them internally. Global oil prices can be influenced by macroeconomic conditions, changes in the global demand for oil, trading behaviours of commodities speculators, geopolitical developments and disruptions in the supply chain for oil. Should any of these risks materialize, the Company may experience material adverse impacts on its strategic objectives and financial performance, including reduced sales and decreased margin. Insurance The Company has insurance coverage reflecting limits of liability, retentions, deductibles, premiums, and terms and conditions that Management believes are reasonable based on the nature and size of CTC’s operations. The Company is not insured against all losses, such as losses resulting from acts of war, terrorism, nuclear disasters, pandemics or epidemics, reputational harm, product recalls, strikes, riots and certain natural disasters, any of which may expose the Company to significant losses and costs should these events occur. Even for events covered by insurance, there can be no assurance that its policies will compensate CTC for all losses. The availability of adequate insurance coverage on reasonable terms is subject to a variety of factors including conditions in relation to the insurance industry, as well as the Company’s past claims and risk profile. Insurers may also dispute coverage with respect to claims submitted. Should any of these risks materialize, the Company may experience material adverse impacts on its financial performance and operations, including increased costs. MANAGEMENT’S DISCUSSION AND ANALYSIS 66 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 12.0 Internal Controls and Procedures 12.1 Disclosure Controls and Procedures Management is responsible for establishing and maintaining a system of controls and procedures over the public disclosure of financial and non-financial information regarding the Company. Such controls and procedures are designed to provide reasonable assurance that all relevant material information is gathered and reported to Senior Management on a timely basis, including the CEO and the CFO, so that they can make appropriate decisions regarding public disclosure. As required by CSA National Instrument 52-109 - Certification of Disclosure in Issuers’ Annual and Interim Filings (“NI 52-109”), an evaluation of the adequacy of the design (quarterly) and effective operation (annually) of the Company’s disclosure controls and procedures was conducted under the supervision of Management, including the CEO and the CFO, as at December 28, 2024. Based on that evaluation, the CEO and the CFO have concluded that the design and operation of the system of disclosure controls and procedures were effective as at December 28, 2024. 12.2 Internal Control over Financial Reporting Management is also responsible for establishing and maintaining appropriate internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and preparation of consolidated financial statements for external purposes in accordance with IFRS Accounting Standards. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation and may not prevent or detect misstatements. As also required by NI 52-109, Management, including the CEO and the CFO, evaluates the adequacy of the design (quarterly) and the effective operation (annually) of the Company’s internal control over financial reporting using the framework established by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework (2013). Based on that evaluation, the CEO and the CFO have concluded that the design and operation of the internal control over financial reporting were effective as at December 28, 2024. 12.3 Changes in Internal Control over Financial Reporting During the quarter and year ended December 28, 2024, there were no changes in the Company’s internal control over financial reporting that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting. MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 67 13.0 Environmental, Social, and Governance CTC’s brand purpose, We Are Here to Make Life in Canada Better, guides all actions related to the Company’s business strategy, including CTC’s approach to ESG matters. The Company has identified the ESG topics that are most relevant to the Enterprise and its stakeholders, and organized these topics into four pillars: CTC’s ESG Topics Environment Climate Change Circularity: Product, Packaging and Operational Waste People and Community Talent, Culture and Belonging Community Impact Responsible Sourcing Supply Chain: People Supply Chain: Planet Product Safety and Quality Governance Corporate Governance Business Ethics Privacy and Cyber Security CTC publishes an annual ESG Report which outlines its approach to ESG, including underlying strategies and targets. The report includes a Climate Data Index and disclosures against the Sustainability Accounting Standards Board (SASB) standards. The Company also publishes reports on specific ESG matters, including an annual Forced Labour and Child Labour Report and an annual Diversity, Inclusion & Belonging Year-in-Review. These reports are available at: https://corp.canadiantire.ca/Environmental-Social-Governance/default.aspx, and are not incorporated herein by reference. For additional details on the Company’s approach to ESG, please refer to section 2.8 of the 2024 AIF. 14.0 Caution Regarding Forward-Looking Information This document contains information that may constitute forward-looking information within the meaning of applicable securities laws. Forward-looking information provides insights regarding Management’s current expectations and plans and allows investors and others to better understand the Company’s anticipated financial position, results of operations and operating environment. Readers are cautioned that such information may not be appropriate for other purposes. Statements containing forward-looking information are neither historical facts nor assurances of future performance. Forward-looking information included or incorporated by reference in this document includes, but is not limited to, information with respect to: • the Company’s operating capital expenditure expectations in section 6.4.1; and • the Company’s intention to repurchase its Class A Non-Voting Shares in section 7.0. Other non-historical information may also constitute forward-looking information, including, but not limited to, information concerning Management’s current expectations relating to possible or assumed prospects and results, the Company’s strategic objectives and priorities, its actions and the results of those actions, and the economic and business outlook for the Company. Often, but not always, forward-looking information can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “believe”, “estimate”, “plan”, “can”, “could”, “should”, “would”, “outlook”, “target”, “forecast”, “anticipate”, “aspire”, “foresee”, “continue”, “ongoing” or the negative of these terms or variations of them or similar terminology. By its nature, forward-looking information is based on estimates and assumptions and information currently available to Management. Among other things, and except where noted, Management has assumed that there will be no material adverse changes to future regional, provincial, national and global macroeconomic conditions (such as inflation, gross domestic product and consumer income and debt levels), geopolitical conditions (including tariffs) consumer spending levels, interest rates, foreign exchange rates, regulatory environment (including taxes), and the Company’s competitive position in the retail landscape, earnings prospects and liquidity. Management has also assumed that there will be no material changes to the Company’s strategic and capital allocation priorities, that anticipated cost savings and operational efficiencies will be achieved, that anticipated benefits from initiatives, partnerships or acquisitions will be realized and that all required regulatory approvals will MANAGEMENT’S DISCUSSION AND ANALYSIS 68 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS be received. There can be no assurance that the estimates and assumptions upon which forward-looking information is based will prove to be correct. Although the Company believes that the forward-looking information in this document is based on information, estimates and assumptions that are reasonable, such information is necessarily subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied in such forward-looking information. These risks, uncertainties and other factors are set out below and include those described in section 11.0 (Risks and Risk Management) in this MD&A and all subsections therein: • failure of the Company to respond to evolving trends and developments and execute on acquisitions, divestitures, projects, investments and cost saving measures; • poor operating or financial performance by Dealers, franchisees and independent retailers; • damage to the Company’s brand and reputation; • adverse geopolitical conditions, including trade restrictions, tariffs (such as tariffs and retaliatory tariffs by the United States and Canada), changes in government commitments and international conflicts; • failure to attract, retain and develop its workforce, including executives and other key employees; • adverse macroeconomic conditions, such as increased inflation and consumer debt levels and lower gross domestic product and consumer income levels; • increasing dependence on technology and legacy IT systems, with increased risk of system failures or outages; • emergence of disruptive technologies, including AI; • increasing frequency and sophistication of global cyber security threats and potential cyber security breaches; • evolving privacy laws, which may impact the collection, use and disclosure of customer and other data that support the Company’s strategy; • reliance on third parties which are in turn subject to a variety of risks that could impact their performance; • supply chain disruptions and product shortages; • failure to identify human rights, worker safety, environmental or other issues in the Company’s supply chain; • failure to attract, retain and grow membership in the Company’s loyalty program and expand and execute loyalty partnerships; • failure to maintain and grow market share given the highly competitive and constantly evolving markets in which the Company operates; • shifts in customer trends, preferences and spending patterns; • risks associated with the seasonal nature of the Company’s business, including the impact of unusual weather patterns; • changes in laws and regulations to which the Company is subject to, and any involvement in claims, disputes or legal proceedings; • risks associated with climate change, including physical risks and transition risks; • risks associated with the Company’s management of its priority ESG topics; • business disruptions and challenges restoring operations and critical business services; • credit risks from a counterparty failing to meet its contractual obligations, including financial instrument counterparty credit risk and consumer, Dealer and franchisee credit risks; • insufficient liquidity to meet the obligations associated with the Company’s indebtedness and other financial liabilities; • the risk that changes in market prices, resulting from foreign currency rate and interests rate fluctuations, will affect the Company’s income or value of its holdings of financial instruments; • price fluctuations in the commodity price of oil; and • the unavailability of adequate insurance coverage on reasonable terms. Investors and other readers are urged to consider the foregoing risks, uncertainties, factors, and assumptions carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such forward-looking information. In addition, the Company cautions that the foregoing lists of risks and assumptions are not exhaustive, and other risks, uncertainties and factors could also adversely affect the Company’s results and may cause actual results to differ materially from those expressed or implied in the forward-looking information. The forward-looking information contained herein is based on information, estimates and assumptions as of the date hereof. The Company does not undertake to update any forward-looking information, whether written or oral, except as is required by applicable laws. Information contained in or otherwise accessible through the websites referenced in this MD&A does not form part of this MD&A and is not incorporated by reference into this MD&A. All references to such websites are inactive textual references and are for information only. MANAGEMENT’S DISCUSSION AND ANALYSIS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 69 This document contains trade names, trademarks and service marks of CTC and other organizations, all of which are the property of their respective owners. Solely for convenience, the trade names, trademarks, and service marks referred to herein appear without the ® or ™ symbol. Commitment to Disclosure and Investor Communication The Company strives to maintain a high standard of disclosure and investor communication and has been recognized as a leader in financial reporting practices. Reflecting the Company’s commitment to full and transparent disclosure, the Investor Relations section of the Company’s website at: https:// investors.canadiantire.ca, includes the following documents and information of interest to investors: • Annual and Quarterly Report to Shareholders; • Quarterly earnings news releases, fact sheets, and other materials including conference call transcripts and webcasts (archived for one year); • Supplementary information including investor presentations and videos; • the Annual Information Form; • the Management Information Circular; • Information for Debtholders; and • The Company’s Approach to Corporate Governance. The Company’s Report to Shareholders, Annual Information Form, Management Information Circular and quarterly financial statements and MD&A are also available at http://www.sedarplus.ca. If you would like to contact the Investor Relations department directly, email investor.relations@cantire.com. 15.0 Related Parties Martha Billes and Owen Billes, in aggregate, beneficially own, or control or direct approximately 61.4 percent of the Common Shares of the Company through two privately held companies, Tire ‘N’ Me Pty. Ltd. and Albikin Management Inc. Transactions with Dealer members of the Company’s Board of Directors represented less than one percent of the Company’s total revenue and were in accordance with established Company policy applicable to all Dealers. Other transactions with related parties, as defined by IFRS Accounting Standards, were not significant during the year. February 12, 2025 CANADIAN TIRE CORPORATION, LIMITED CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 28, 2024 and December 30, 2023 70 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL STATEMENTS 72 INDEPENDENT AUDITOR’S REPORT 73 CONSOLIDATED FINANCIAL STATEMENTS: Consolidated Balance Sheets 77 Consolidated Statements of Income 78 Consolidated Statements of Comprehensive Income 79 Consolidated Statements of Cash Flows 80 Consolidated Statements of Changes in Equity 81 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 1. The Company and its Operations 82 Note 2. Basis of Preparation 82 Note 3. Material Accounting Policy Information 86 Note 4. Capital Management 96 Note 5. Financial Risk Management 98 Note 6. Operating Segments 101 Note 7. Cash and Cash Equivalents 103 Note 8. Trade and Other Receivables 104 Note 9. Loans Receivable 104 Note 10. Long-Term Receivables and Other Assets 107 Note 11. Goodwill and Intangible Assets 108 Note 12. Investment Property 110 Note 13. Property and Equipment 111 Note 14. Leases 112 Note 15. Subsidiaries 114 Note 16. Income Taxes 116 Note 17. Deposits 118 Note 18. Trade and Other Payables 119 Note 19. Provisions 119 Note 20. Contingencies 119 Note 21. Short-Term Borrowings 120 Note 22. Loans 120 Note 23. Long-Term Debt 121 Note 24. Other Long-Term Liabilities 122 Note 25. Employment Benefits 122 Note 26. Share Capital 124 Note 27. Share-Based Payments 126 Note 28. Revenue 128 Note 29. Cost of Producing Revenue 129 Note 30. Selling, General and Administrative Expenses 129 Note 31. Depreciation and Amortization 130 Note 32. Net Finance Costs 130 Note 33. Notes to the Consolidated Statements of Cash Flows 130 Note 34. Financial Instruments 131 Note 35. Guarantees and Commitments 133 Note 36. Related Parties 135 Index to the Consolidated Financial Statements and Notes CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 71 The Management of Canadian Tire Corporation, Limited (Company) is responsible for the integrity and reliability of the accompanying consolidated financial statements. These consolidated financial statements have been prepared by Management in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board and include amounts based on judgments and estimates. All financial information in our Management's Discussion and Analysis is consistent with these consolidated financial statements. Management is responsible for establishing and maintaining adequate systems of internal control over financial reporting. These systems are designed to provide reasonable assurance that the financial records are reliable and form a proper basis for the timely and accurate preparation of financial statements. Management has assessed the effectiveness of the Company’s internal controls over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and concluded that the Company's internal controls over financial reporting were effective as at the date of these consolidated statements. The Board of Directors oversees Management’s responsibilities for the consolidated financial statements primarily through the activities of its Audit Committee, which comprises solely of directors who are neither officers nor employees of the Company. This Committee meets with Management and the Company’s independent auditors, Deloitte LLP, to review the consolidated financial statements and recommend approval by the Board of Directors. The Audit Committee is responsible for making recommendations to the Board of Directors with respect to the appointment of and, subject to the approval of the shareholders authorizing the Board of Directors to do so, approving the remuneration and terms of engagement of the Company’s auditors. The Audit Committee also meets with the auditors, without the presence of Management, to discuss the results of their audit. The consolidated financial statements have been audited by Deloitte LLP, in accordance with Canadian generally accepted auditing standards. Their report is presented on the following page. Greg Hicks Gregory Craig President and Chief Executive Officer Executive Vice-President and Chief Financial Officer February 12, 2025 Management’s Responsibility for Financial Statements 72 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS Independent Auditor’s Report To the Shareholders of Canadian Tire Corporation, Limited Opinion We have audited the consolidated financial statements of Canadian Tire Corporation, Limited (the “Company”), which comprise the consolidated balance sheets at December 28, 2024 and December 30, 2023, and the consolidated statements of income, consolidated statements of comprehensive income, consolidated statements of cash flows and consolidated statements of changes in equity for the years then ended, and notes to the consolidated financial statements, including material accounting policy information (collectively referred to as the “financial statements”). In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at December 28, 2024 and December 30, 2023, and its financial performance and its cash flows for the years then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (“IASB”). Basis for Opinion We conducted our audit in accordance with Canadian generally accepted auditing standards (“Canadian GAAS”). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 28, 2024. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Assessment of impairment of assets - Refer to Note 11 to the consolidated financial statements Key Audit Matter description The Company’s evaluation of goodwill for impairment involves the comparison of the recoverable amount of each cash generating unit to its carrying value. The recoverable amount of the SportChek CGU is estimated using a value in use (“VIU”) model, determined using discounted cash flows based on an after tax discount rate. This requires management to make significant estimates and assumptions related to the projected revenues and associated earnings before income taxes, depreciation and amortization (“EBITDA”) margins, terminal growth rate, and discount rate. Changes in these assumptions could have a significant impact on the recoverable amount. Management determined that the recoverable amounts of the SportChek CGU exceeded their carrying value as of the measurement date and, therefore, no impairment loss was recognized. Given the significant judgments made by management to estimate the VIU of the SportChek CGU, performing audit procedures to evaluate the reasonableness of the estimates and assumptions related to the projected cash flows, terminal growth rate, and discount rate required a high degree of auditor judgment and an increased extent of effort, which included the involvement of fair value specialists. How the Key Audit Matter Was Addressed in the Audit: Our audit procedures related to the projected revenues and associated EBITDA margins, terminal growth rate and discount rate for the SportChek CGU used by management to determine the recoverable amount, included the following, among others: • Evaluated management’s ability to accurately forecast future revenues and EBITDA margins by comparing actual results to management’s historical forecasts. CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 73 ◦ ◦ ◦ ◦ ◦ ◦ ◦ ◦ ◦ ◦ ◦ • Evaluated the reasonableness of management’s forecasts of future revenues and EBITDA margins by comparing forecasts to: Historical revenues and operating margins. Internal communications to management and the Board of Directors. Underlying analyses detailing business strategies and growth plans. Third-party economic research, projected and historical growth of SportChek’s peer group. • With the assistance of our fair value specialists; Compared the terminal growth rate to available industry data and expected long term inflation rates. Evaluated the reasonableness of the discount rate by testing the source information underlying the determination of the discount rate and developing a range of independent estimates and compared those to the discount rate used. Allowance on credit card loans receivable - Refer to Note 2 and 9 to the consolidated financial statements Key Audit Matter description The Company’s estimate of allowance on credit card loans receivable is measured using an expected credit loss (“ECL”) model. The allowance on credit card loans receivable represents a complex accounting estimate based on an assessment of the probability of default (“PD”), exposure at default (“EAD”) and loss given default (“LGD”) of each cardholder. The Company’s ECL model employs an analysis of historical data, economic indicators and experience of delinquency and default, to estimate the amount of credit card loans receivable that may default as a result of past or future events, with certain adjustments for other relevant circumstances influencing the recoverability of these credit card loans. ECL allowances are measured at amounts equal to either (i) 12-month ECL; or (ii) lifetime ECL for those credit card loans that have experienced a significant increase in credit risk (“SICR”) since initial recognition or when there is objective evidence of impairment. The allowance on credit card loans receivable was identified as a key audit matter given the inherent complexity of the models, assumptions, judgments and the interrelationship of these variables in measuring the ECL. Although many estimates and assumptions are required, those with the highest degree of subjectivity and impact on the allowance are related to the PD, EAD, LGD, SICR, lifetime credit losses, effective interest rate, forward looking scenarios including the weighting of those scenarios and the application of expert credit judgment. These matters required a high degree of auditor judgment and increased audit effort, including the involvement of financial modelling specialists. How the Key Audit Matter Was Addressed in the Audit: Our audit procedures related to testing the models, assumptions and judgments used by management to estimate the ECL included the following, among others: • Evaluated the effectiveness of management’s internal controls related to the credit card portfolio data, the governance and oversight over the modelled results and the use of expert credit judgment. • Evaluated the completeness and accuracy of the data used in the estimate of ECL. • With the assistance of financial modelling specialists: Evaluated the Company’s ECL methodology and key assumptions used for compliance with IFRS Accounting Standards. Evaluated the appropriateness of the methodology and inputs used in the models to estimate PD, EAD, LGD, SICR, lifetime credit losses, effective interest rate and the design of the forward-looking scenarios including the weighting of those scenarios. Evaluated the quantitative assessments of the ECL by comparing management’s estimate of PD to actual default rates and comparing management’s estimates of EAD and LGD to actual loss experience. On a sample basis, independently recalculated the ECL. Evaluated the qualitative assessments included in the ECL by comparing management’s expert credit judgments against macroeconomic trends and evaluating those judgments to ensure they are reflective of the credit quality of the credit card portfolio. Independent Auditor’s Report 74 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS Independent Auditor’s Report CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 75 Other Information Management is responsible for the other information. The other information comprises: • Management’s Discussion and Analysis • The information, other than the financial statements and our auditor’s report thereon, in the Annual Report. Our opinion on the financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. We obtained Management’s Discussion and Analysis prior to the date of this auditor’s report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in this auditor’s report. We have nothing to report in this regard. The Annual Report is expected to be made available to us after the date of the auditor’s report. If, based on the work we will perform on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact to those charged with governance. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS Accounting Standards as issued by the IASB, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company’s financial reporting process. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement Independent Auditor’s Report 76 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS Deloitte LLP resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Company as a basis for forming an opinion on the financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. The engagement partner on the audit resulting in this independent auditor’s report is Adam Charles Burke. Chartered Professional Accountants Licensed Public Accountants Toronto, Ontario February 12, 2025 (C$ in millions) December 28, 2024 December 30, 20231 ASSETS Cash and cash equivalents (Note 7) $ 475.6 $ 311.2 Short-term investments 128.4 177.2 Trade and other receivables (Note 8) 1,263.0 1,151.3 Loans receivable (Note 9) 6,697.5 6,568.3 Merchandise inventories 2,558.3 2,693.7 Income taxes recoverable 9.3 125.9 Prepaid expenses and deposits 212.0 246.6 Assets classified as held for sale 3.8 18.9 Total current assets 11,347.9 11,293.1 Long-term receivables and other assets (Note 10) 711.9 645.8 Long-term investments 72.8 108.2 Goodwill and intangible assets (Note 11) 2,176.2 2,254.7 Investment property (Note 12) 436.7 443.7 Property and equipment (Note 13) 5,394.4 5,219.5 Right-of-use assets (Note 14) 2,034.8 1,933.8 Deferred income taxes (Note 16) 65.9 79.5 Total assets $ 22,240.6 $ 21,978.3 LIABILITIES Deposits (Note 17) $ 1,171.4 $ 1,041.7 Trade and other payables (Note 18) 2,931.4 2,689.4 Provisions (Note 19) 186.2 219.9 Short-term borrowings (Note 21) 295.8 965.7 Loans (Note 22) 563.2 519.9 Current portion of lease liabilities (Note 14) 418.5 378.5 Income taxes payable 88.5 13.4 Current portion of long-term debt (Note 23) 680.4 560.5 Total current liabilities 6,335.4 6,389.0 Long-term provisions (Note 19) 67.1 59.8 Long-term debt (Note 23) 3,875.5 4,404.0 Long-term deposits (Note 17) 2,386.0 2,322.6 Long-term lease liabilities (Note 14) 2,071.6 1,986.0 Deferred income taxes (Note 16) 245.5 182.1 Other long-term liabilities (Note 24) 171.2 190.0 Total liabilities 15,152.3 15,533.5 EQUITY Share capital (Note 26) 625.9 598.7 Accumulated other comprehensive income (loss) (85.3) (181.8) Retained earnings 5,614.4 5,128.2 Equity attributable to shareholders of Canadian Tire Corporation 6,155.0 5,545.1 Non-controlling interests (Note 15) 933.3 899.7 Total equity 7,088.3 6,444.8 Total liabilities and equity $ 22,240.6 $ 21,978.3 J. Michael Owens Nadir Patel Director Director CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 77 As at 1 Certain prior-year figures have been restated to conform to the current-year presentation. The related notes form an integral part of these consolidated financial statements. Consolidated Balance Sheets CONSOLIDATED FINANCIAL STATEMENTS (C$ in millions, except share and per share amounts) December 28, 2024 December 30, 2023 Revenue (Note 28) Cost of producing revenue (Note 29) 10,739.1 10,952.9 $ 16,357.8 $ 16,656.5 Gross margin Other expense (income) (Note 13) Selling, general and administrative expenses ((Note 30)) Depreciation and amortization (Note 31) Net finance costs (income) (Note 32) Change in fair value of redeemable financial instrument (Note 34) 5,618.7 (291.8) 3,553.3 762.2 349.0 — 5,703.6 34.4 3,675.7 771.2 321.5 328.0 Income before income taxes Income tax expense (recovery) (Note 16) 274.1 233.7 1,246.0 572.8 Net income $ 971.9 $ 339.1 Net income (loss) attributable to: Shareholders of Canadian Tire Corporation Non-controlling interests (Note 15) $ 887.7 $ 213.3 84.2 125.8 $ 971.9 $ 339.1 Basic earnings per share $ 15.96 $ 3.79 Diluted earnings per share $ 15.92 $ 3.78 Weighted average number of Common and Class A Non-Voting Shares outstanding: Basic Diluted 55,625,884 55,766,848 56,228,680 56,457,450 Consolidated Statements of Income 78 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS For the years ended The related notes form an integral part of these consolidated financial statements. (C$ in millions) December 28, 2024 December 30, 2023 Net income $ 971.9 $ 339.1 Other comprehensive income (loss), net of taxes Items that may be reclassified subsequently to Net income (loss): Net fair value gains (losses) on inventory cash flow hedges 178.4 (7.2) Net fair value gains (losses) on derivatives designated as cash flow hedges excluding time value of swaptions 16.3 (38.4) Changes in fair value of the time value of swaptions Reclassification of losses (gains) to income Currency translation adjustment Items that will not be reclassified subsequently to Net income (loss): Actuarial gains (losses) (8.5) (8.8) (11.7) 17.3 38.5 0.8 (51.1) (6.4) Other comprehensive income (loss) $ 183.0 $ (63.8) Other comprehensive income (loss) attributable to: Shareholders of Canadian Tire Corporation $ 183.0 $ (74.0) Non-controlling interests — 10.2 $ 183.0 $ (63.8) Comprehensive income $ 1,154.9 $ 275.3 Comprehensive income attributable to: Shareholders of Canadian Tire Corporation $ 1,070.7 $ 139.3 Non-controlling interests 84.2 136.0 $ 1,154.9 $ 275.3 Consolidated Statements of Comprehensive Income CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 79 For the years ended The related notes form an integral part of these consolidated financial statements. (C$ in millions) December 28, 2024 December 30, 20231 Cash generated from (used for): Operating activities Net income (loss) $ 971.9 $ 339.1 Adjustments for: Depreciation of property and equipment, investment property, and right-of-use assets 664.9 675.2 Impairment on property and equipment, investment property, and right-of-use assets Income taxes 274.1 233.7 Net finance costs (Note 32) Amortization of intangible assets (Note 11) 120.2 127.0 Loss (gain) on disposal of property and equipment, investment property, assets held for sale and right-of-use assets Change in fair value of redeemable financial instrument (Note 34) — 328.0 Non-cash charge related to fire at A.J. Billes Distribution Centre Total except as noted below 2,109.1 2,081.3 Interest paid Interest received 44.0 38.8 Income taxes paid (received) Change in loans receivable (139.0) (289.3) Change in operating working capital and other 8.6 349.0 (279.6) — 6.3 321.5 (2.7) 53.2 (413.6) (46.9) 510.2 (366.1) (210.5) 99.5 Cash generated from (used for) operating activities 2,063.8 1,353.7 Investing activities Additions to property and equipment and investment property (576.3) (580.9) Additions to intangible assets Total additions (636.8) (668.6) Acquisition of short-term investments Proceeds from maturity and disposition of short-term investments 271.2 269.9 Proceeds on disposition of property and equipment, investment property, intangible assets and assets held for sale Lease payments received for finance subleases (principal portion) 16.0 19.8 Acquisition of long-term investments and other Change in Franchise Trust loans receivable (43.2) (47.2) (60.5) (87.7) (183.0) 321.1 (9.4) (210.9) 0.1 (110.9) Cash generated from (used for) investing activities (264.1) (747.8) Financing activities Dividends paid Distributions paid to non-controlling interests (70.3) (142.1) Net issuance (repayments) of short-term borrowings Net issuance (repayments) of Franchise Trust loans 43.2 47.2 Issuance of long-term debt Repayment of long-term debt (960.4) (1,040.1) Payment of lease liabilities (principal portion) Payment of transaction costs relating to long-term debt (2.0) (6.0) Purchase of Class A Non-Voting Shares Repurchase of Scotiabank’s 20 percent interest in CTFS Holdings Limited — (904.5) Net receipts (payments) on financial instruments Change in deposits 187.8 393.5 (359.8) (669.9) 550.0 (349.3) (29.8) 25.2 (360.8) 389.6 1,750.0 (425.2) (376.1) 53.5 Cash generated from (used for) financing activities (1,635.3) (621.0) Cash generated (used) in the period 164.4 (15.1) Cash and cash equivalents, beginning of period 311.2 326.3 Cash and cash equivalents, end of period (Note 7) $ 475.6 $ 311.2 Consolidated Statements of Cash Flows 80 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS For the years ended 1 Certain prior-year figures have been restated to conform to the current-year presentation. The related notes form an integral part of these consolidated financial statements. CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 81 Total accumulated other comprehensive income (loss) Equity attributable to shareholders of Canadian Tire Corporation Total accumulated other comprehensive income (loss) Equity attributable to non- controlling interests Cash flow hedges & other Currency translation adjustment Share capital Retained earnings Total equity (C$ in millions) Balance at December 30, 2023 $ 598.7 $ 44.6 $ (226.4) $ (181.8) $ 5,128.2 $ 5,545.1 $ 899.7 $ 6,444.8 Net income (loss) — — — — 887.7 887.7 84.2 971.9 Other comprehensive income (loss) — 177.4 (11.7) 165.7 17.3 183.0 — 183.0 Total comprehensive income (loss) — 177.4 (11.7) 165.7 905.0 1,070.7 84.2 1,154.9 Transfers of cash flow hedge losses (gains) to non-financial assets — (69.2) — (69.2) — (69.2) — (69.2) Contributions and distributions to shareholders of Canadian Tire Corporation Issuance of Class A Non-Voting Shares (Note 26) 29.6 — — — — 29.6 — 29.6 Purchase of Class A Non-Voting Shares (Note 26) (29.8) — — — — (29.8) — (29.8) Excess of purchase price over average cost (Note 26) 27.4 — — — (27.4) — — — Dividends — — — — (391.4) (391.4) — (391.4) Contributions and distributions to non-controlling interests Issuance of trust units to non-controlling interests, net of transaction costs — — — — — — 19.7 19.7 Distributions and dividends to non-controlling interests — — — — — — (70.3) (70.3) Total contributions and distributions 27.2 (69.2) — (69.2) (418.8) (460.8) (50.6) (511.4) Balance at December 28, 2024 $ 625.9 $ 152.8 $ (238.1) $ (85.3) $ 5,614.4 $ 6,155.0 $ 933.3 $ 7,088.3 Total accumulated other comprehensive income (loss) Equity attributable to shareholders of Canadian Tire Corporation1 Total accumulated other comprehensive income (loss) Equity attributable to non- controlling interests1 Cash flow hedges & other1 Currency translation adjustment Share capital Retained earnings Total equity (C$ in millions) Balance at December 31, 2022 $ 587.8 $ 132.9 $ (175.3) $ (42.4) $ 5,070.2 $ 5,615.6 $ 1,423.6 $ 7,039.2 Net income (loss) — — — — 213.3 213.3 125.8 339.1 Other comprehensive income (loss) — (16.5) (51.1) (67.6) (6.4) (74.0) 10.2 (63.8) Total comprehensive income (loss) — (16.5) (51.1) (67.6) 206.9 139.3 136.0 275.3 Transfers of cash flow hedge losses (gains) to non-financial assets — (89.9) — (89.9) — (89.9) — (89.9) Contributions and distributions to shareholders of Canadian Tire Corporation Issuance of Class A Non-Voting Shares (Note 26) 27.9 — — — — 27.9 — 27.9 Purchase of Class A Non-Voting Shares (Note 26) (376.1) — — — — (376.1) — (376.1) Change in automatic share purchase plan commitment (Note 26) 8.1 — — — 98.6 106.7 — 106.7 Excess of purchase price over average cost (Note 26) 351.0 — — — (351.0) — — — Dividends — — — — (386.2) (386.2) — (386.2) Extinguishment of Redeemable Financial Instrument (Note 34) — — — — 895.0 895.0 — 895.0 Change in interests in subsidiary, including transaction costs (Note 15) — 18.1 — 18.1 (405.3) (387.2) (517.3) (904.5) Contributions and distributions to non-controlling interests Issuance of trust units to non-controlling interests, net of transaction costs — — — — — — (0.5) (0.5) Distributions and dividends to non-controlling interests — — — — — — (142.1) (142.1) Total contributions and distributions 10.9 (71.8) — (71.8) (148.9) (209.8) (659.9) (869.7) Balance at December 30, 2023 $ 598.7 $ 44.6 $ (226.4) $ (181.8) $ 5,128.2 $ 5,545.1 $ 899.7 $ 6,444.8 1 Certain prior-year figures have been restated to conform to the current-year presentation. The related notes form an integral part of these consolidated financial statements. Consolidated Statements of Changes in Equity NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 82 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 1. The Company and its Operations Canadian Tire Corporation, Limited is a Canadian public company primarily domiciled in Canada. Its registered office is 2180 Yonge Street, Toronto, Ontario, M4P 2V8, Canada. It is listed on the Toronto Stock Exchange (TSX – CTC, CTC.A). Canadian Tire Corporation, Limited and entities it controls are together referred to in these consolidated financial statements as the “Company”, “CTC” or “Canadian Tire Corporation”. Refer to Note 15 for the Company’s major subsidiaries. The Company comprises three main business operations, which offer a wide range of retail goods and services, including general merchandise, apparel, sporting goods, petroleum, financial services, including a bank, and real estate operations. Details of the Company’s three reportable operating segments are provided in Note 6. This document contains trade names, trademarks, and service marks of CTC and other organizations, all of which are the property of their respective owners. Solely for convenience, the trade names, trademarks, and service marks referred to herein appear without the ® or TM symbol. 2. Basis of Preparation Fiscal Year The fiscal year of the Company consists of a 52 or 53-week period ending on the Saturday closest to December 31. The fiscal years for the consolidated financial statements and notes presented for 2024 and 2023 are the 52- week periods ended December 28, 2024 and December 30, 2023, respectively. Statement of Compliance These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB) using the accounting policies described herein. These consolidated financial statements were authorized for issuance by the Company’s Board of Directors on February 12, 2025. Basis of Presentation These consolidated financial statements have been prepared on a historical cost basis, except for the following items, which are measured at fair value: • financial instruments at Fair Value Through Profit or Loss (FVTPL); • financial instruments at Fair Value Through Other Comprehensive Income (FVOCI); • derivative financial instruments; • liabilities for share-based payment plans; and • initial recognition of assets acquired and liabilities assumed in a business combination. In addition, the post-employment defined benefit obligation is recorded at its discounted present value. Functional and Presentation Currency These consolidated financial statements are presented in Canadian dollars ($ or C$), the Company’s functional currency. Judgments and Estimates The preparation of these consolidated financial statements in accordance with IFRS Accounting Standards requires Management to make judgments and estimates that affect: • the application of accounting policies; • the reported amounts of assets and liabilities; • disclosures of contingent assets and liabilities; and • the amounts of revenue and expenses recognized during the reporting periods. Actual results may differ from estimates made in these consolidated financial statements. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 83 Judgments are made in the selection and assessment of the Company’s accounting policies. Estimates are used mainly in determining the measurement of recognized transactions and balances. Estimates are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Judgments and estimates are often interrelated. The Company’s judgments and estimates are continually re-evaluated to assess whether they remain appropriate. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in future periods affected. The duration and long-term effects on CTC from macroeconomic conditions remain uncertain and Management continues to monitor and assess the impact on the business and on certain judgments and estimates, including the recoverable amount of goodwill and intangible assets. The section below contains details of the accounting policies subject to judgments and estimates that the Company believes could have the most significant impact on the amounts recognized in these consolidated financial statements. Impairment of Assets The Company uses judgment in determining the grouping of assets to identify its Cash Generating Units (CGU) for purposes of testing for impairment of property and equipment and goodwill and intangible assets. The Company has determined that its Retail CGUs comprise individual stores or groups of stores. In testing for impairment, goodwill acquired in a business combination is allocated to the CGUs that are expected to benefit from the synergies of the business combination. In testing for impairment of intangibles with indefinite lives, these assets are allocated to the CGUs to which they relate. Furthermore, on a quarterly basis, judgment is used in determining whether there has been an indication of impairment, which would require the completion of a quarterly impairment test, in addition to the annual requirement. The Company’s estimate of a CGU’s or group of CGUs’ recoverable amount, based on Value in Use (VIU), involves estimating future cash flows. Future cash flows are estimated based on multi-year extrapolation of the most recent historical actual results or budgets and a terminal value is calculated by discounting the final year in perpetuity. The growth rate applied to the terminal value is based on the Bank of Canada’s target inflation rate or Management’s estimate of the growth rate specific to the item being tested. The future cash flow estimates are then discounted to their present value using an appropriate discount rate that incorporates a risk premium specific to each business. The Company’s determination of a CGU’s or group of CGUs’ recoverable amount based on Fair Value Less Cost to Sell (FVLCS) uses factors such as royalty rates and related revenue projections or market rental rates for comparable assets based on an after-tax discount rate, consistent with the assumptions that a market participant would make. Merchandise Inventories Merchandise inventories are carried at the lower of cost and net realizable value. The estimation of net realizable value is based on the most reliable evidence available of the amount the merchandise inventories are expected to realize. Additionally, estimation is required for inventory provisions due to shrinkage. Income and Other Taxes In calculating current and deferred income and other taxes, the Company uses judgment when interpreting the tax rules in jurisdictions where the Company operates. The Company also uses judgment in classifying transactions and assessing probable outcomes of claimed deductions, which considers expectations of future operating results, the timing and reversal of temporary differences and possible audits of income tax and other tax filings by tax authorities. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 84 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS Consolidation The Company uses judgment in determining the entities that it controls and consolidates accordingly. An entity is controlled when the Company has power over an entity, exposure or rights to variable returns from its involvement with the entity and is able to use its power over the entity to affect its return from the entity. The Company has power over an entity when it has existing rights that give it the current ability to direct the relevant activities, which are the activities that significantly affect investees’ returns. Since power comes from rights, power can result from contractual arrangements. However, certain contractual arrangements contain rights that are designed to protect the Company’s interest, without giving it power over the entity. Allowance on Loans Receivable The Company’s estimate of allowances on credit card loans receivable is based on an Expected Credit Loss (ECL) approach that employs an analysis of historical data, economic indicators, and experience of delinquency and default to estimate the amount of loans that may default as a result of past or future events, with certain adjustments for other relevant circumstances influencing the recoverability of these loans receivable. Impairment of loans is assessed based on whether there has been a significant increase in credit risk since origination and incorporation of forward-looking information in the measurement of ECL. Default rates, loss rates and the expected timing of future recoveries are periodically benchmarked against actual outcomes to ensure that they remain appropriate. Future customer behaviour may be affected by several factors, including changes in interest and unemployment rates and credit card program design changes. Post-Employment Benefits The accounting for the Company’s post-employment benefit plan requires the use of assumptions. The accrued benefit liability is calculated using actuarial data and the Company’s best estimates of future salary escalations, retirement ages of employees, employee turnover, mortality rates, market discount rates, and expected health and dental care costs. Lease Liabilities For the measurement of lease liabilities, Management considers all factors that create an economic incentive to exercise extension options, or not exercise termination options available in its leasing arrangements. Extension options, or periods subject to termination options, are only included in the lease term if Management determines it is reasonably certain to be extended or not terminated. The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment and it is within the control of the lessee. The Company generally uses the lessee’s incremental borrowing rate when initially recording property leases. For property leases, the implicit rates are not readily available as information from the lessor regarding the fair value of underlying assets and initial direct costs incurred by the lessor relating to the leased assets are not available. The Company determines the incremental borrowing rate as the rate of interest that the lessee would pay to borrow over a similar term and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use-asset in a similar economic environment. Other Other estimates include determining the useful lives and depreciation methods applied to investment property and intangible assets for the purposes of depreciation and amortization; in accounting for and measuring items such as deferred revenue, provisions, and purchase price adjustments on business combinations; and in measuring certain fair values, including those relating to the valuation of assets and liabilities acquired in a business combinations, share-based payments, and financial instruments. Standards, Amendments and Interpretations Issued and Adopted Lease Liability in a Sale and Leaseback In September 2022, the IASB issued amendments to IFRS 16 – Leases relating to sale leaseback transactions for seller-lessees. The amendment adds a requirement that measuring lease payments or revised lease payments shall not result in the recognition of a gain or loss that relates to the right-of-use asset retained by the seller- lessee. The amendments are effective for annual reporting periods beginning on or after January 1, 2024. The Company adopted these amendments in the current year and determined there to be no material impact on the consolidated financial statements. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 85 Non-current Liabilities with Covenants In October 2022, the IASB issued amendments to IAS 1 – Presentation of Financial Statements, which specifies that covenants whose compliance is assessed after the reporting date do not affect the classification of debt as current or non-current at the reporting date. Instead, the amendments require disclosure of information about these covenants in the notes to the financial statements. The amendments are effective for annual reporting periods beginning on or after January 1, 2024. The Company adopted these amendments in the current year and determined there to be no material impact on the consolidated financial statements. Supplier Finance Arrangements In May 2023, the IASB issued amendments to IAS 7 – Statement of Cash Flows and IFRS 7 – Financial Instruments: Disclosures. The amendments add requirements to disclose information that allows users to assess how supplier finance arrangements affect an entity’s liabilities, cash flows, and exposure to liquidity risk. The amendments are effective for annual reporting periods beginning on or after January 1, 2024. The Company adopted these amendments in the current year and determined there to be no material impact on the consolidated financial statements. Standards, Amendments, and Interpretations Issued but not yet Adopted The following new standards, amendments, and interpretations have been issued but are not effective for the fiscal year ended December 28, 2024 and, accordingly, have not been applied in preparing these consolidated financial statements. Lack of Exchangeability In August 2023, the IASB issued amendments to IAS 21 – The Effects of Changes in Foreign Exchange Rates in relation to Lack of Exchangeability. The amendments require entities to apply a consistent approach in assessing whether a currency can be exchanged into another currency and in determining the exchange rate to use and the disclosures to provide when it cannot. These amendments are effective for annual reporting periods beginning on or after January 1, 2025, with early adoption permitted. The Company assessed the impact of the amendments and determined there to be no material impact on the consolidated financial statements. Classification and Measurement of Financial Instruments In May 2024, the IASB issued amendments to IFRS 9 – Financial Instruments and IFRS 7 – Financial Instruments: Disclosures. The amendments relate to settling financial liabilities using an electronic payment system and assessing contractual cash flow characteristics of financial assets, including those with Environmental, Social, and Governance (ESG)-linked features. The IASB also amended disclosure requirements relating to investments in equity instruments designated at FVOCI and added disclosure requirements for financial instruments with contingent features. The amendments are effective for annual periods beginning on or after January 1, 2026, with early adoption permitted. The Company is assessing the impacts to the consolidated financial statements. Presentation and Disclosure in Financial Statements In April 2024, the IASB issued the new standard IFRS 18 – Presentation and Disclosure in Financial Statements that will replace IAS 1 – Presentation of Financial Statements. The new standard introduces newly defined subtotals on the income statement, requirements for aggregation and disaggregation of information, and disclosure of management performance measures in the financial statements. The new standard is effective for annual reporting periods beginning on or after January 1, 2027, with early adoption permitted. The Company is assessing the impacts to the consolidated financial statements. Annual Improvements In July 2024, the IASB issued IFRS Accounting Standards Annual Improvements – Volume 11, which clarifies wording, correcting minor consequences, oversights, or conflicts among requirements in the Standards. The amendments affect IFRS 1 - First-time Adoption of International Financial Reporting Standards, IFRS 7 - Financial Instruments: Disclosures, IFRS 9 - Financial Instruments, IFRS 10 - Consolidated Financial Statements, and IAS 7 - Statement of Cash Flows. These amendments will be effective for annual periods beginning on or after NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 86 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS January 1, 2026, with early adoption permitted. The implementation of these amendments is not expected to have a significant impact on the Company. Contracts Referencing Nature- dependent Electricity In December 2024, the IASB issued amendments to IFRS 9 and IFRS 7 - Contracts Referencing Nature- dependent Electricity. The amendments apply only to nature-dependent electricity contracts, which are those that generate variable levels based on uncontrollable factors such as weather conditions. These amendments will be effective for annual periods beginning on or after January 1, 2026, with early adoption permitted. Implementation of these amendments is not expected to have an impact on the Company. 3. Material Accounting Policy Information The following accounting policies have been applied consistently to all periods presented in these consolidated financial statements, except as noted below. Basis of Consolidation These consolidated financial statements include the accounts of Canadian Tire Corporation and entities it controls. An entity is controlled when the Company has the ability to direct the relevant activities of the entity, has exposure or rights to variable returns from its involvement with the entity, and is able to use its power over the entity to affect its returns from the entity. Refer to Note 15.1 for details of the Company’s significant controlled entities. The results of certain subsidiaries that have different year ends have been included in these consolidated financial statements for the 52-week periods ended December 28, 2024 and December 30, 2023. The year end of CT Real Estate Investment Trust (CT REIT), Helly Hansen Group AS, Franchise Trust and CTFS Holdings Limited and their subsidiaries is December 31. Income or loss and each component of Other Comprehensive Income (OCI) are attributed to the shareholders of the Company and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance on consolidation. When the proportion of the equity held by non-controlling interests changes, the Company adjusts the carrying amounts of the controlling and non-controlling interests to reflect the changes in their relative interest in the subsidiary. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the shareholders of the Company. Business Combinations The Company applies the acquisition method in accounting for business combinations by allocating the purchase price to the fair value of the assets acquired at the acquisition date, with any difference recognized as goodwill. The purchase price, or the consideration transferred, includes the recognized amount of any non-controlling interests in the acquiree, the fair value of the assets transferred (including cash), liabilities incurred by the Company on behalf of the acquiree, the fair value of any contingent consideration and equity interests issued by the Company. The Company determines the fair value of assets acquired by applying either the cost, market or income approach that provides the most reliable support for the specific asset. Market approaches are applied to property and securities that are available in the public market. The cost approach is applied to other major asset classes. The income approach is applied in calculating the fair value of intangible assets. Transaction costs that the Company incurs in connection with a business combination are expensed immediately. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 87 Joint Arrangement A joint arrangement is an arrangement in which two or more parties have joint control. Joint control is the contractually agreed sharing of control whereby decisions about relevant activities require unanimous consent of the parties sharing control. A joint arrangement is classified as a joint operation when the parties that have joint control have rights to the assets and obligations for the liabilities related to the arrangement. The Company’s interest in a joint operation includes assets, liabilities, revenues, and expenses in relation to the joint operation, along with its share of any assets and liabilities jointly held, and its share of revenue and expenses earned or incurred jointly. CT REIT has a one-half interest in Canada Square, a mixed-use commercial property in Toronto, Ontario (the Co- Ownership), pursuant to a Co-Ownership arrangement. The Co-Ownership is a joint arrangement as the material decisions about relevant activities require unanimous consent of the co-owners. This joint arrangement is a joint operation as each co-owner has rights to the assets and obligations for the liabilities related to the Co-Ownership. Investments in Joint Ventures and Associates (under the Equity Method) A joint venture is a joint arrangement where the investees have rights to the net assets of the arrangement. The Company has significant influence over an associate if it has the power to participate in the financial and operating policy decisions of the investee but does not meet the definition of control or joint control. The Company recognizes its interest in associates and joint ventures in Long-term receivables and other assets in the Consolidated Balance Sheets. The Company measures its interest using the equity method, where the investment is initially recognized at cost and adjusted thereafter for the investors’ share of the changes in the investee’s net assets. The investment is reviewed at the end of each reporting period for indicators of impairment, and if such evidence exists, the Company recognizes an impairment loss in Other expense (income) in the Consolidated Statements of Income. Impairment losses are limited to the recoverable amount of the investment. Functional and Presentation Currency Each of the Company’s foreign operations determines its own functional currency with transactions of each foreign operation measured using that functional currency. Assets and liabilities of foreign operations having a functional currency other than the Canadian dollar are translated to the Canadian dollar presentation currency at the rate of exchange prevailing at the reporting date, and revenues and expenses are translated at average rates during the period. Exchange differences are accumulated as a component of equity. On the disposal of a foreign operation, or the loss of control, the component of accumulated other comprehensive income (AOCI) relating to that foreign operation is reclassified to Other expense (income) in the Consolidated Statements of Income. Foreign Currency Transactions and Balances Transactions in foreign currencies are translated into the entity’s functional currency at rates in effect at the date of the transaction. Monetary assets and liabilities in foreign currencies are translated into the entity’s functional currency at the closing exchange rate at the balance sheet date. Non-monetary items that are measured in terms of historical cost are translated into the entity’s functional currency at the exchange rate at the date of the original transaction. Exchange gains or losses arising from translation are recorded in Other expense (income) or Cost of producing revenue as applicable in the Consolidated Statements of Income. Financial Instruments Recognition, Derecognition and Initial Measurement Financial instruments can include cash, derivatives, or any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognized in the Consolidated Balance Sheets when the Company becomes a party to the contractual provisions of a financial instrument. A financial asset is derecognized when the contractual rights to the cash flows from the asset expire or when the Company transfers substantially all the risks and rewards of ownership in the financial asset to another party. Any interest in transferred financial assets created or retained by the Company is recognized as a separate asset or liability. A financial liability is derecognized when its contractual obligations are discharged, cancelled, or expire. All financial instruments are measured at fair value on initial recognition. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 88 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities, other than financial assets and financial liabilities classified as FVTPL, are added to or deducted from the fair value on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities classified as FVTPL are recognized immediately in Net income. Classification at Initial Recognition and Subsequent Measurement At initial recognition, the Company classifies financial assets according to the Company’s business model for managing the financial assets and the contractual terms of the cash flows. Financial assets are classified in one of the following measurement categories: (i) amortized cost, (ii) FVOCI, and (iii) FVTPL. Financial liabilities are classified and subsequently measured at amortized cost except for financial liabilities at FVTPL, which are those that either meet the definition of held for trading or are designated as FVTPL. Financial Instruments at Amortized Cost, including Impairment Financial liabilities are subsequently measured at amortized cost using the effective interest method with gains and losses recognized in Net income in the period that the liability is derecognized, except for financial liabilities classified as FVTPL. Financial assets are subsequently measured at amortized cost if both the following conditions are met, and they are not designated as FVTPL: • the financial asset is held within a business model with the objective to hold financial assets to collect contractual cash flows; and • the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Gains and losses are recognized in profit or loss when the asset is derecognized, modified, or impaired. Financial assets are subsequently measured at amortized cost using the effective interest method, and are subject to impairment, with a loss allowance, ECL, recognized on either a 12-month or a lifetime ECL basis. A 12-month ECL represents the loss expected from default events that are possible within 12-months of the reporting date. This 12-month ECL is recognized in the same reporting period as the initial recognition. The following types of financial assets are measured at 12-month ECL: • investments determined to have low credit risk at the reporting date with a credit risk rating equivalent to investment grade; and • other financial assets, such as loans receivable, for which credit risk has not increased significantly since initial recognition. All other financial assets measured at amortized cost are impaired using a lifetime ECL model, which represents credit losses from all probable default events over the expected life of a financial instrument. The loss allowance is measured at lifetime ECL if there is a significant increase in credit risk, which is assessed based on changes in the probability of default since initial recognition along with borrower specific qualitative information, or when the loan is more than 30 days past due. ECL is calculated as the product of the probability of default, exposure at default and loss given default over the remaining expected life of the loans and discounted to the reporting date. The ECL model also incorporates forward-looking information, which increases the degree of judgment required as to how changes in macroeconomic factors will affect ECLs, such as current and forecast unemployment rates. The methodologies and assumptions, including any forecasts of future economic conditions, are reviewed regularly. Credit card loans are considered impaired and in default when they are 90 days past due or there is sufficient doubt regarding the collectability of principal and/or interest. Where a customer has initiated the consumer proposal insolvency process, the estimated credit card loans receivable is based on the present value of expected future cash flows outlined in the terms of the consumer proposal agreement received. Credit card loans over 180 days past due are written down to the present value of the expected future cash flows. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 89 Financial Instruments at Fair Value Through Other Comprehensive Income Financial assets are classified as FVOCI when the financial asset meets the business model objective by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specific dates to cash flows that are solely payments of principal and interest. Financial assets, in the form of equity instruments, can be designated as FVOCI or otherwise default as FVTPL. Financial instruments classified as FVOCI are measured at fair value, with changes in fair value recorded in Other comprehensive income in the period in which they arise. Subsequent changes in fair value of investments in equity instruments designated as FVOCI are accumulated in Other comprehensive income and are not reclassified to the Consolidated Statements of Income, while distributions received from these investments are recognized in the Consolidated Statements of Income. Financial Instruments at Fair Value Through Profit or Loss All financial assets not classified as amortized cost, or designated as FVOCI, are measured at FVTPL. This includes derivative financial assets that are not part of a designated hedging relationship. Financial liabilities, including derivative liabilities, are classified as FVTPL when the financial instrument is either held for trading or designated as such upon initial recognition. Financial instruments are classified as held for trading if acquired principally for the purpose of selling in the near future or if part of an identified portfolio of financial instruments that the Company manages together and has a recent actual pattern of short-term profit-making. Financial instruments classified as FVTPL are measured at fair value, with changes in fair value recorded in Net income in the period they arise, to the extent they are not part of the effective portion of a designated hedging relationship. Derivative Financial Instruments The Company enters into various derivatives as part of a strategy to manage its foreign currency and interest rate exposures. The Company also enters into equity derivative contracts to hedge a portion of future share-based payment expenses. The Company does not enter into derivatives for trading purposes. All derivative instruments are measured at fair value including embedded derivatives contained within financial or non-financial contracts that are not closely related to the host contract. The gain or loss that results from remeasurement at each reporting period is immediately recognized in Net income unless the derivative qualifies and is designated as a hedging instrument, in which case the timing of the recognition in Net income depends on the nature of the hedge relationship. Cash Flow Hedges For cash flow hedges, the effective portion of the changes in the fair value of the hedging derivative, net of taxes, is recognized in OCI, while the ineffective and unhedged portions are recognized immediately in Net income. Amounts recorded in AOCI are reclassified to Net income in the periods when the hedged item affects Net income. When a forecast transaction that is hedged results in the recognition of a non-financial asset or liability, the gains and losses previously recognized in AOCI are directly transferred from AOCI to the initial measurement of the cost of the non-financial asset or liability. When hedge accounting is discontinued, there is no further deferral of changes in market value of the derivative to OCI. The amounts previously deferred remain in AOCI until the cash flows relating to underlying exposure affects Net income; at this time the related AOCI is reclassified to Net income. If hedge accounting is discontinued due to the hedged item no longer expected to occur, the amount previously deferred in AOCI is immediately reclassified to Net income. The Company enters into foreign currency derivative contracts to hedge its exposure against foreign currency risk on future payments of foreign-currency-denominated inventory purchases and expenses. The critical terms of the foreign currency derivative contracts align with the hedged item on a 1:1 basis. Hedge ineffectiveness may arise if the timing of the hedged transactions changes from the original estimate. Once the inventory is received, the Company transfers the related AOCI amount to merchandise inventories and subsequent changes in the fair value of the foreign currency derivative contracts are recorded in Net income as they occur. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 90 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS The Company enters into interest rate swap and swaption contracts to hedge and manage the exposure against interest rate risk on the future interest payments of certain debt issuances. The critical terms of the interest rate swap and swaptions contracts align with the hedged item and have a 1:1 hedge ratio. In accordance with IFRS 9, the Company designates the change in fair value of the intrinsic value of the instrument as the hedging instrument. Change in the fair value of the time value of the option is also deferred in OCI and is amortized to the Consolidated Statements of Income as a component of Net finance cost on a systematic and rational basis over the period during which the underlying interest of the underlying debt affects profit or loss. Hedge ineffectiveness may arise if the timing of the hedged transactions changes from the original estimate. When hedged expenses are incurred, the Company reclassifies the related AOCI amount to the expense. Cash and Cash Equivalents Cash and cash equivalents are defined as cash plus highly liquid and rated certificates of deposit or commercial paper with an original term to maturity of three months or less. Short-Term Investments Short-term investments are investments in highly liquid and rated certificates of deposit, commercial paper or other securities, primarily Canadian and United States government securities and notes of other creditworthy parties, with an original term to maturity of more than three months and remaining term to maturity of less than one year. The Company’s exposure to credit, currency and interest rate risks relating to other investments is disclosed in Note 5. Trade and Other Receivables The Company recognizes a loss allowance based on lifetime ECL for trade and other receivables. It is estimated based on the Company’s historical loss experience, adjusted for factors specific to the debtors and an assessment of both the current and forecast direction of conditions at the reporting date. The loss and any subsequent recoveries of amounts written off, are recognized in Selling, general and administrative expenses in the Consolidated Statements of Income. Loans Receivable Loans receivable consists of credit card loans, as well as loans to certain Dealers, who are independent third- party operators of Canadian Tire stores. Impairment losses are recorded in Cost of producing revenue in the Consolidated Statements of Income. Long-Term Investments Investments in highly liquid and rated securities with a remaining term to maturity of greater than one year are classified as long-term investments. The Company’s exposure to credit, currency and interest rate risks relating to other investments is disclosed in Note 5. Debt Debt is classified as current when the Company expects to settle the liability in its normal operating cycle, it holds the liability primarily for the purpose of trading, the liability is due to be settled within 12 months after the date of the Consolidated Balance Sheets, or it does not have the right to defer settlement of the liability for at least 12 months after the date of the Consolidated Balance Sheets. Merchandise Inventories Merchandise inventories are carried at the lower of cost and net realizable value. Net realizable value is the estimated selling price of inventory during the normal course of business less estimated selling expenses. The cost of merchandise inventories is determined based on weighted average cost and includes costs incurred in bringing the merchandise inventories to their present location and condition. All inventories are finished goods. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 91 Cash consideration received from vendors is recognized as a reduction to the cost of related inventory, unless the cash consideration received is either a reimbursement of incremental costs incurred by the Company or a payment for assets or services delivered to the vendor. Intangible Assets Intangible assets include goodwill, indefinite life, and finite life intangible assets. Goodwill represents the excess of the cost of an acquisition over the fair value of the Company’s share of the identifiable assets acquired and liabilities assumed in a business combination. Goodwill is measured at cost less any accumulated impairment and is not amortized. Intangible assets with indefinite useful lives are measured at cost, less any accumulated impairment and are not amortized. Intangible assets with finite useful lives are recognized when the asset is identifiable (either separable or resulting from contractual or legal rights), the Company controls the asset, there are expected future economic benefits which will flow to the Company, and costs can be measured reliably. Intangible assets with finite useful lives are measured at cost and are amortized on a straight-line basis over their estimated useful lives, generally for a period of two to ten years. The Company capitalizes implementation costs associated with software as a service activities where the activities create and meet the recognition criteria of an intangible asset. Refer below to the Impairment of Asset policy. Expenditures on research activities are expensed as incurred. Investment Property Investment property is property held to earn rental income or for appreciation of capital or both. The Company has determined that properties it provides to its Dealers, franchisees and agents are not investment properties as they relate to the Company’s operating activities. This was determined based on certain criteria such as whether the Company provides significant ancillary services to the lessees of the property. The Company includes property that it leases to third parties (other than Dealers, franchisees, or agents) in investment property. Investment property is measured and depreciated in the same manner as property and equipment. Property and Equipment Property and equipment are measured at cost less accumulated depreciation and any accumulated impairment except for land and properties during construction which are measured at cost less any accumulated impairment. The cost of an item of property or equipment includes initial estimates of the cost of dismantling and removing the item and restoring the site on which it is located. Depreciation is calculated on a straight-line basis over the following estimated useful lives, after adjusting the cost for the asset’s estimated residual value: Asset Category Estimated Useful Lives Buildings 10 – 45 years Fixtures and equipment 3 – 25 years Leasehold improvements Shorter of term of lease or estimated useful life Borrowing Costs Borrowing costs directly attributable to the acquisition or construction of a qualifying asset are capitalized. All other borrowing costs are recognized in Cost of producing revenue or in Net finance costs in the Consolidated Statements of Income in the period in which they are incurred. Leases Lessee The Company assesses whether a contract is or contains a lease at inception of a contract. Leases are recognized as a right-of-use asset and corresponding liability at the commencement date. Right-of-use assets are measured at cost which is calculated as the amount of the initial measurement of lease liability plus any lease payments made on or before the commencement date, any initial direct costs and related restoration costs. The right-of-use assets are depreciated on a straight-line basis over the shorter of the lease NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 92 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS term and the useful life of the underlying asset. If a lease transfers ownership of the underlying asset or if the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease and is recognized in Depreciation and amortization in the Consolidated Statements of Income. Lease liabilities are measured at the present value of fixed payments (including in-substance fixed payments), variable lease payments that depend on an index or a rate, amounts expected to be payable by the lessee under residual value guarantees, and where the lessee is reasonably certain to exercise an option, the exercise price of that purchase option and payments of penalties for terminating the lease. The lease liability is net of lease incentives receivable. The lease payments are discounted using the interest rate implicit in the lease or, if that rate cannot be determined, the Company’s incremental borrowing rate. The period over which the lease payments are discounted is the lease term, including renewal options that the Company is reasonably certain to exercise. Renewal options are included in a number of leases across the Company. Each lease payment draws down the lease liability while the unwinding of the discount is reflected as a finance cost. The finance cost is recognized in Net finance costs in the Consolidated Statements of Income over the lease period to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Payments associated with short-term leases, with a lease term of 12 months or less, and leases of low-value assets are recognized as an expense on a straight-line basis in Selling, general and administrative expenses in the Consolidated Statements of Income. Variable lease payments that do not depend on an index or a rate or subject to a fair market value renewal are expensed as incurred and recognized in Selling, general and administrative expenses in the Consolidated Statements of Income. Lessor When the Company is the lessor in an operating lease, rental income is recognized in Revenue in the Consolidated Statements of Income on a straight-line basis over the term of the lease. Subleases When the Company enters into sublease arrangements as an intermediate lessor, it determines whether the sublease is a finance sublease or operating sublease by reference to the right-of-use asset arising from the head lease. When the Company is an intermediate lessor, it accounts for the head lease and the sublease as two separate contracts. A sublease is a finance sublease if substantially all the risks and rewards of the related head lease right-of-use asset have been transferred to the sub-lessee. For finance subleases, the Company derecognizes the corresponding right-of-use asset and records a net investment in the finance sublease and corresponding interest income is recognized in net finance costs in the Consolidated Statements of Income. The net investment in the sublease is recognized in Trade and other receivables and Long-term receivables and other assets in the Consolidated Balance Sheets, for the current and non-current portions respectively. Impairment of Assets Property and equipment, investment property, right-of-use assets and intangible assets with finite useful lives are assessed for indicators of impairment at the end of each reporting period. If indicators exist, then the recoverable amount of the asset is estimated. Goodwill, intangible assets with indefinite useful lives and intangible assets not yet available for use are not amortized but are tested for impairment at least annually or whenever there is an indicator that the asset may be impaired. These assets do not generate their own cashflows, as a result goodwill, intangible assets with indefinite useful lives, and intangible assets not yet available for use are allocated to the CGUs, or groups of CGUs (such as the Company’s banners identified in Note 6 Operating Segments), to which they relate. A CGU is the smallest identifiable group of assets whose continuing use generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Once allocated, the recoverable amount of the CGU is estimated for impairment testing. The recoverable amount of an asset or CGU is defined as the higher of its fair value less cost to sell and its VIU. In assessing VIU, the estimated future cash flows are discounted to their present value, using a discount rate that NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 93 includes a risk premium specific to each line of business. The Company estimates cash flows which are extrapolated over a period of up to five years adding a terminal value calculated by discounting the final year in perpetuity. The growth rate applied to the terminal values is based on the Bank of Canada’s target inflation rate or a growth rate specific to the item being tested. An impairment loss is recognized when the carrying amount of an asset, or of the CGU to which it belongs, exceeds the recoverable amount and is recognized in Other expense (income) in the Consolidated Statements of Income. Any impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the CGU and then to the other assets of the CGU. Impairments of goodwill cannot be reversed. Impairments of other assets recognized in prior periods are assessed at the end of each reporting period to determine if the indicators of impairment have reversed or no longer exist. An impairment loss is reversed if the estimated recoverable amount exceeds the carrying amount; however, the resulting carrying amount may not exceed the carrying amount that would have been determined had no impairment been recognized in prior periods. Employee Benefits Short-Term Benefits The Company recognizes a liability and an expense for short-term benefits such as bonuses, profit-sharing and employee stock purchases if the Company has a present legal obligation or constructive obligation to pay these amounts as a result of past service provided by the employees. Post-Employment Benefits The Company provides certain health care, dental care, life insurance and other benefits, but not pensions, for certain retired employees pursuant to Company policy. The Company accrues the cost of these employee benefits over the periods in which the employees earn the benefits. The cost of employee benefits earned is actuarially determined using the projected benefit method prorated on length of service and Management’s best estimate of retirement ages of employees, employee turnover, life expectancy, and expected health and dental care costs. The costs are discounted at a rate based on market rates as at the measurement date. Actuarial gains and losses are recorded in OCI and are permanently transferred to Retained earnings at the end of the year. Share-Based Payments Stock options are granted to employees allowing the recipient to exercise the stock option or receive a cash payment equal to the difference between the market price of the Company’s Class A Non-Voting Shares at the exercise date and the exercise price of the stock option. These stock options are considered to be compound instruments. The fair value of compound instruments is measured at each reporting date, taking into account the terms and conditions on which the rights to cash or equity instruments are granted. The corresponding expense and liability are recognized over the respective vesting period. The fair value of the amount payable to employees with respect to share unit plans and trust unit plans, settled in cash, is recorded in Selling, General and Administrative expenses as the services are provided over the vesting period. The fair value of the liability is remeasured at each reporting date with the change in the liability recognized in Selling, general and administrative expenses in the Consolidated Statements of Income. Provisions A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period. Where the effect of discounting is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The provision for sales and warranty returns relates to the Company’s obligation for defective goods in current store inventories and defective goods sold to customers that have yet to be returned, after-sales service for replacement parts and future corporate store sales returns. Accruals for sales and warranty returns are NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 94 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS estimated on the basis of historical returns and are recorded as a reduction to Revenue in the Consolidated Statements of Income. Site restoration and decommissioning provisions arise from legal or constructive obligations associated with the removal of underground fuel storage tanks and site remediation costs on the retirement of certain property and equipment and with the termination of certain lease agreements. The obligations are initially measured using an expected value approach and are discounted to present value. Share Capital Shares issued by the Company are recorded at the value of proceeds received. Repurchased shares are removed from equity. No gain or loss is recognized in Net income on the purchase, sale, issue, or cancellation of the Company’s shares. Share purchases are charged to Share capital at the average cost per share outstanding and the excess between the purchase price and the average cost is allocated to Retained earnings. Revenue Sale of Goods Revenue from the sale of goods includes merchandise sold to Dealers, Mark’s, SportChek and Party City franchisees, the sale of gasoline through agents, the sale of goods to the general public by Mark’s, PartSource, SportChek, Helly Hansen as well as the sale of goods through Helly Hansen’s wholesale channels. Revenue from the sale of goods is recognized when the goods are delivered, measured at the fair value of the consideration received less an appropriate deduction for actual and expected returns, discounts, rebates and warranty and customer loyalty program costs, net of sales taxes. 2 1 Customer Loyalty Programs Loyalty reward credits issued as part of a sales transaction result in revenue being deferred until the loyalty reward is redeemed. In addition, an obligation arises from the loyalty program when the Company sells merchandise to the Dealers, for which reward credits may be issued as part of the subsequent sales transaction. The obligation is measured at fair value by reference to the fair value of the rewards that could be redeemed and based on the estimated probability of their redemption. Interest Income on Loans Receivable Interest income, including interest charged on loans receivable, is determined using the effective interest method and recognized in Revenue in the Consolidated Statements of Income. Services Rendered Service revenue primarily includes merchant, interchange and processing fees, cash advance fees, foreign exchange fees, and service charges on the loans receivable of the Financial Services operating segment. Service revenue is recognized according to the contractual provisions of the arrangement, which is generally when the service is provided or over the contractual period. Merchant, interchange and processing fees, cash advance fees and foreign exchange fees on credit card transactions are recognized as revenue at the time transactions are completed. Reinsurance Revenue Reinsurance revenue earned through credit card operations in each reporting period represents the changes in liabilities for remaining coverage that relate to services for which the Company expects to receive consideration and an allocation of premiums that relate to recovering insurance acquisition cash flows. Royalties and Licence Fees Royalties and licence fees include licence fees from Dealers, Petroleum agents and royalties from Mark’s and SportChek franchisees. Royalties and licence fee revenues are recognized as they are earned in accordance with the substance of the relevant agreement, which is generally based on percentage of sales. 1 “SportChek” refers to the retail business carried on by FGL Sports Ltd., including stores operated under the SportChek, Sports Experts, Atmosphere, Sports Rousseau and Hockey Experts names and trademarks. 2 “Party City” refers to the party supply business that operates under the Party City name and trademarks in Canada. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 95 Rental Income Rental income from operating leases where the Company is the lessor is recognized on a straight-line basis over the terms of the respective leases. Vendor Rebates The Company records cash consideration from vendors as a reduction in the price of vendors’ products and recognizes it as a reduction to the cost of related inventory or, if the related inventory has been sold, to the Cost of producing revenue in the Consolidated Statements of Income. Certain exceptions apply where the cash consideration received is either a reimbursement of incremental selling costs incurred by the Company or a payment for assets or services delivered to the vendor, in which case the cost is reflected as a reduction in Selling, general and administrative expenses in the Consolidated Statements of Income. The Company recognizes rebates that are at the vendor’s discretion when the vendor either pays the rebates or agrees to pay them. Net Finance Costs Net finance cost comprises finance costs reduced by finance income. Finance costs comprise interest expense on borrowings (including borrowings relating to the Dealer Loan Program), unwinding of the discount on provisions, as well as finance cost on lease liabilities and is net of borrowing costs that have been capitalized. Interest on deposits is recorded in Cost of producing revenue in the Consolidated Statements of Income. Finance income comprises interest income on funds invested and interest income on lease receivables for finance subleases. Interest income is recognized as it accrues using the effective interest method. Income Taxes The Income tax expense for the year comprises current and deferred income tax. Income tax expense is recognized in Net income except to the extent that it relates to items recognized either in OCI or directly in equity, for which the income tax expense is recognized in OCI or in equity, respectively. Income tax expense is calculated based on the tax laws enacted or substantively enacted at the reporting date in the countries where the Company operates and generates taxable income. Deferred income tax is recognized using the liability method for unused tax losses, unused tax benefits and temporary differences arising between the tax bases of assets and liabilities and their carrying amounts. However, deferred income tax is not recognized if it arises from the initial recognition of goodwill or the initial recognition of an asset or liability in a transaction, other than a business combination that, at the time of the transaction, affects neither accounting nor taxable income, and does not give rise to equal taxable and deductible temporary differences. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted at the reporting date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled. Deferred income tax assets are recognized only to the extent that it is probable that future taxable income will be available against which the temporary differences can be utilized. Deferred income tax liabilities are provided on temporary differences arising from investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. The Company has applied the temporary mandatory exception from the recognition and disclosure of deferred tax related to the implementation of Pillar Two model rules. Earnings per Share Basic earnings per share is calculated by dividing the Net income attributable to the shareholders of the Company by the weighted average number of Common and Class A Non-Voting shares outstanding during the reporting period. Diluted earnings per share is calculated by dividing the Net income attributable to the shareholders of the (C$ in millions) 2024 % of total 2023 % of total Capital components Deposits $ 1,171.4 8.0 % $ 1,041.7 6.9 % Short-term borrowings 295.8 2.0 % 965.7 6.4 % Current portion of long-term debt 680.4 4.6 % 560.5 3.7 % Long-term debt 3,875.5 26.5 % 4,404.0 29.4 % Long-term deposits 2,386.0 16.3 % 2,322.6 15.5 % Total debt $ 8,409.1 57.4 % $ 9,294.5 61.9 % Share capital 625.9 4.3 % 598.7 4.0 % Retained earnings 5,614.4 38.3 % 5,128.2 34.1 % Total capital under management $ 14,649.4 100.0 % $ 15,021.4 100.0 % NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 96 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS Company by the weighted average number of shares outstanding adjusted for the effects of all potentially dilutive equity instruments, which comprise employee stock options. 4. Capital Management The Company’s capital management objectives are as follows: • ensure sufficient liquidity to meet financial obligations when due and execute operating and strategic plans; • maintain healthy liquidity reserves with the ability to access additional capital from multiple sources, if required; and • minimize after-tax cost of capital while taking into consideration the key risks including current and future industry, market, and economic risks and conditions. The definition of capital varies from company to company, industry to industry and for different purposes. In the process of managing the Company’s capital, Management includes the following items in its definition of capital, which includes Glacier Credit Card Trust (GCCT) indebtedness but excludes Franchise Trust indebtedness because it is a legal liability of the Dealers: The Company monitors its capital structure by measuring debt-to-earnings ratios and manages its debt service and other fixed obligations by tracking its interest and other coverage ratios and forecasting corporate liquidity. The Company manages its capital structure over the long term to optimize the balance among cost of capital, capital efficiency, financial flexibility, and risk mitigation. Management calculates ratios that approximate the methodologies of credit rating agencies and other market participants on a current and prospective basis. To assess its effectiveness in managing leverage, Management monitors these ratios against targeted ranges. 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, repurchase 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 the Company 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 Company’s bank credit agreements, but which excludes consideration of CTFS Holdings Limited, CT REIT, Franchise Trust, and their respective subsidiaries). The Company was in compliance with all financial covenants under its credit agreements as at December 28, 2024 and December 30, 2023. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 97 Helly Hansen is required to comply with covenants established under its bank overdraft agreement, and was in compliance with all financial covenants thereunder as at December 28, 2024 and December 30, 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 December 31, 2024 and December 31, 2023. Canadian Tire Bank (CTB or the Bank), a federally regulated Schedule 1 bank, is required to comply with regulatory requirements for capital, and other regulatory requirements that have an impact on its business operations and certain financial covenants established under its bank credit agreements. CTB’s Management reviews the Bank’s compliance with and performance against its capital management policy, with policy limits exceeding the regulatory minimums. In addition, the policy is reviewed periodically to ensure consistency with risk tolerances. CTB manages its capital under guidelines established by the Office of the Superintendent of Financial Institutions of Canada (OSFI). OSFI’s regulatory capital guidelines are based on the international Basel Committee on Banking Supervision framework entitled Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems (Basel III), which came into effect in Canada on January 1, 2013. Basel III is a global regulatory accord that was introduced to enhance the regulation, supervision, and risk management practices within the banking sector. The Bank has implemented several capital policies, procedures, and controls, including an annual Internal Capital Adequacy Assessment Process (ICAAP). These measures support the Bank in achieving its goals and objectives. The Bank’s objectives include maintaining adequate levels of capital to: • meet all applicable regulatory requirements; • maintain and reinforce confidence in the safety and soundness of the Bank; • support growth in assets and liabilities; and • offset unexpected operating and investment losses and volatility. OSFI’s regulatory capital guidelines under Basel III allow for two tiers of capital: Tier 1 and Tier 2. Tier 1 capital incorporates Common Equity Tier 1 capital which includes common shares, retained earnings, and accumulated other comprehensive income, less regulatory adjustments. The Bank currently does not hold any additional Tier 1 capital instruments. Tier 2 capital consists of the eligible portion of general allowances. The capital and leverage ratios are prescribed in OSFI’s Capital Adequacy Requirements and Leverage Requirements Guidelines. The capital ratios are calculated as regulatory capital divided by risk-weighted assets (RWA). The leverage ratio provides an overall measure of the adequacy of an institution’s capital and is calculated as the total Tier 1 capital divided by the leverage exposure. RWA includes a credit risk component for all on-balance sheet assets weighted for the risk inherent in each type of asset, off-balance sheet financial instruments, an operational risk component based on a percentage of the trailing 3-year annual average adjusted gross income and a market-risk component for assets held for trade. For the purposes of calculating RWA, securitized assets are considered off-balance sheet and, therefore, except for the Bank’s retained exposures, are not included in the RWA calculation. The leverage exposure is the sum of on-balance sheet exposures, derivative exposures, securities financing transaction exposures, subordinate loans, and a portion of unused credit limits, with a reduction for off-balance sheet items, which include securitized assets. As at December 31, 2024 and December 31, 2023, the Bank complied with all regulatory capital requirements established by OSFI, and its internal targets as determined by its ICAAP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 98 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 5. Financial Risk Management 5.1 Overview The Company has exposure to credit risk, liquidity risk and market risk. For further information on the Company’s financial instruments, their classification, their impact on financial statements, and determination of fair value, refer to Notes 3 and 34. 5.2 Risk Management Framework The Company’s Financial Risk Management Board Policy (the FRM Policy) serves to identify and analyze the risks faced by the Company, set acceptable risk tolerance limits and controls, and monitor risks and adherence to those limits. The financial risk management strategies and systems are reviewed regularly to ensure they remain consistent with the Company’s objectives, risk tolerance, and current market trends and conditions. The Company, through its hiring, training, management standards and procedures, aims to uphold its disciplined and constructive control environment in which all employees understand their roles and obligations. 5.3 Credit Risk The Company’s relationships with its customers and other counterparties can create credit risk, which is a risk of loss if the counterparty fails to meet its contractual obligations. The risk arises principally from operations of the Bank’s credit card loan portfolio, CTC’s interaction with its Dealers, franchisees, wholesale customers, and its financial instruments, which are discussed in more detail below. Adverse macroeconomic conditions, such as reduced gross domestic product, consumer income levels, increased inflation, unemployment and debt levels may increase credit risk. 5.3.1 Consumer Credit Risk Through the granting of credit cards, the Bank is exposed to consumer credit risk with respect to the ability and willingness of the Bank’s customers to repay loans owing to it. Refer to Note 9 for information on the credit quality and performance of loans receivable. Should any of these risks materialize, the Company may experience material adverse impacts on its financial performance, including provisions for credit losses and reduced cash flows and liquidity. CTB manages consumer credit risk by: maintaining credit risk management policies, processes and controls; employing credit-scoring models to monitor the creditworthiness of customers; using technology to make informed credit decisions for each new and existing customer account to limit credit risk exposure; adopting technology to improve the effectiveness of the collection process; and monitoring macroeconomic conditions, including consumer debt, income and unemployment levels, and other factors, including interest rates. However, there can be no assurance that these measures will successfully mitigate these risks. 5.3.2 Dealer/Franchisee Credit Risk The Company is also exposed to credit risk in connection with its business dealings with its Dealers, franchisees, and wholesale customers, who may be unable or unwilling to satisfy their debts. In addition, CTC is exposed to credit risks through its guarantees of standby Letters of Credit (LC) in connection with Franchise Trust’s Dealer loan portfolio and CTC’s guarantees provided to third parties for bank debt or inventory buybacks for certain Dealers and franchisees, which may be called upon by the issuing banks. Should any of these risks materialize, the Company may experience material adverse impacts on its financial performance, including provisions for credit losses and bad debts, reduced cash flows and liquidity. For additional information on guarantees and commitments, refer to Note 35. 5.3.3 Financial Instrument Counterparty Credit Risk Counterparty credit risk includes risk relating to cash balances, investment activity, and the use of financial derivatives. Exposure to counterparty credit risk may occur any time funds are extended, committed or invested through an actual or implied contractual agreement. Should any of these risks materialize, the Company may experience material adverse impacts on its financial performance, including provisions for credit losses, fair value adjustments and reduced cash flows and liquidity. The FRM Policy governs the Company’s approach to managing its exposure to financial instrument counterparty credit risk. The Company’s financial instrument portfolio is diversified across financial institutions, provincial and 5.3.4 Additional Credit Risk Exposure NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 99 federal governments and, to a lesser extent, corporate issuers and asset-backed issuers. The FRM Policy mandates transacting only with highly rated financial institutions and other counterparties managed within the specific limits for credit exposure and term-to-maturity pursuant to the policy. However, there can be no assurance that these measures will successfully mitigate these risks. The Company’s maximum exposure to credit risk, over and above amounts recognized in the Consolidated Balance Sheets, include the following: (C$ in millions) 2024 2023 Undrawn loan commitments $ 12,819.1 $ 12,033.7 Guarantees 246.4 365.3 Total $ 13,065.5 $ 12,399.0 5.4 Liquidity Risk The Company requires sufficient and cost-effective liquidity to meet the obligations associated with its indebtedness and other financial liabilities. Its ability to service these obligations depends on cash flows from operating activities and financing sources such as bank lines of credit, commercial paper programs, broker guaranteed investment certificate (GIC) deposits, retail deposits, new public or private issuances of debt or equity and securitization of credit card loans receivable through GCCT. At times, operational cash flows may be insufficient and liquidity risk would arise if the Company were unable to access its funding sources in a cost- effective manner. Macroeconomic conditions, such as reduced consumer income levels, increased inflation, unemployment and debt levels may increase liquidity risk. The Company’s ability to obtain and maintain cost- effective financing depends on its credit ratings, and credit ratings may be downgraded due to various reasons, including reduced revenues, increased debt levels, and adverse macroeconomic conditions. Should any of these risks materialize, the Company may experience material adverse impacts on its strategic objectives, financial performance and operations, which may lead to the Company seeking additional funding on unfavourable terms, delaying or limiting its capital expenditures, foregoing potential opportunities, liquidating assets, or restructuring its debt. The FRM Policy governs the Company’s approach to managing its exposure to liquidity risk. The Company uses a consolidated cash flow forecast model to regularly monitor its near-term and longer-term cash flow requirements, which assists in optimizing its short-term cash and indebtedness position while evaluating longer-term funding and capital allocation strategies. In addition, CTB’s Asset Liability Management Policy governs its approach to managing its exposure to liquidity risk through a liquidity management framework and satisfaction of applicable regulatory requirements. However, there can be no assurance that these measures will successfully mitigate these risks. The following sources of financing are available to the Company to mitigate liquidity risk: • $1.975 billion in an unsecured committed bank line of credit from a syndicate of eight Canadian and two international financial institutions, expiring in May 2029, for general corporate purposes and to back-stop the unsecured short-term promissory notes issued in the U.S. as outlined below. • Following the repurchase of Scotiabank’s 20% interest in CTFS Holdings Limited, during Q4 2023, the Company secured an additional $1.0 billion unsecured committed bank line of credit with five Canadian financial institutions, expiring in May 2025 for general corporate purposes. • The Company can issue up to an aggregate principal amount of U.S. $1.0 billion of unsecured short-term promissory notes in the U.S. Terms to maturity for the promissory notes range from one to 270 days from the date of issue. Notes are issued at a discount and rank equally in right of payment with all other present and future unsecured and unsubordinated obligations to creditors of the Company. • A $300.0 million unsecured committed bank line of credit to CT REIT from a syndicate of seven Canadian financial institutions, expiring in May 2029, for general business purposes. • Scotiabank provides CTB with a $400.0 million unsecured committed bank line of credit and a $700.0 million committed securitized note purchase facility for the purchase of senior and subordinated credit card asset-backed notes issued by GCCT, both expiring in April 2025. (C$ in millions) 2025 2026 2027 2028 2029 Thereafter Total Non-derivative financial liabilities Deposits1,2 $ 1,183.1 $ 493.3 $ 692.6 $ 702.5 $ 497.6 $ — $ 3,569.1 Trade and other payables (Note 18) 2,411.3 — — — — — 2,411.3 Short-term borrowings 295.8 — — — — — 295.8 Loans 563.2 — — — — — 563.2 Long-term debt 680.4 950.0 825.0 900.0 250.0 949.6 4,555.0 Mortgages 0.4 8.1 — — — — 8.5 Interest payments3 311.1 283.5 233.6 144.2 78.4 135.4 1,186.2 Total $ 5,445.3 $ 1,734.9 $ 1,751.2 $ 1,746.7 $ 826.0 $ 1,085.0 $ 12,589.1 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 100 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS • A $300.0 million committed liquidity facility from a syndicate of five Canadian financial institutions, serves as backstop protection to GCCT’s Series 1997-1 credit card asset-backed commercial paper (ABCP) program, expiring in June 2027. In addition to the unsecured committed bank lines of credit outlined above, the Company has access to additional funding sources including internal cash generation, commercial paper programs and new public or private issuances of debt or equity. CTB has access to broker GIC deposits, retail deposits (including GIC and High- Interest Savings (HIS) accounts), and securitization of credit card loans receivable through GCCT. CTB also holds high quality liquid assets, as required by regulators, which can be used under a stressed funding requirement. Due to its diversified funding sources, the Company minimizes concentrations of liquidity risk. The following table summarizes the Company’s contractual maturities for its financial liabilities, including both principal and interest payments: 1 Deposits exclude the GIC broker fee discount of $11.7 million. 2 The average remaining term of the GIC deposits is 29 months as at December 28, 2024. 3 Includes interest payments on deposits, short-term borrowings, loans, and long-term debt. It is not expected that the cash flows included in the maturity analysis would occur significantly earlier or at significantly different amounts. 5.5 Market Risk Market risk is the risk that changes in market prices, such as foreign currency rates, interest rates and other prices, will affect the Company’s income or the value of its holdings of financial instruments. The Company uses financial instruments to mitigate certain market risks including foreign currency, interest rate and other price risks (such as equity prices impacting compensation expense); however, there can be no assurance that these measures will fully mitigate the risks while optimizing the return. 5.5.1 Foreign Currency Risk While the Company’s sales are predominately in Canadian dollars, a significant amount of its merchandise is sourced globally. In 2024, approximately 49 percent of Canadian Tire Retail, 35 percent of Mark’s, and 19 percent of SportChek inventory purchases were sourced directly from vendors outside Canada and denominated primarily in U.S. dollars (USD). Helly Hansen also sources most of its inventory purchases from vendors in Asia, and such purchases are denominated in USD and Euros. Fluctuations in foreign currency exchange rates are driven by various factors, including macroeconomic conditions and geopolitical developments. These fluctuations can impact the cost of purchases when converted back to Canadian dollars. Certain vendors may adjust their prices due to their own exposure to currency fluctuations which may affect the price they charge the Company for merchandise. The Company may attempt to pass on the impacts from currency fluctuations to customers, however, its ability to do so would be subject to market conditions. Should any of these risks materialize, the Company may experience material adverse impacts on its financial performance, including increased inventory costs and decreased margin. The FRM Policy governs the Company’s approach to managing foreign currency risk, including hedging forecasted USD purchases with foreign exchange derivatives. The Company has hedged a significant portion of near-term forecasted USD purchases to minimize the immediate impacts of adverse changes in foreign currency NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 101 exchange rates. However, there can be no assurance that these measures will fully mitigate this risk, and sustained changes in foreign currency exchange rates may impact purchasing costs over time. 5.5.2 Interest Rate Risk The FRM Policy governs the Company’s approach to managing its exposure to interest rate risk, requiring a minimum of 75 percent of the Company’s consolidated debt (short-term and long-term debt excluding Franchise Trust) to be carried at fixed interest rates. As a result, a one percent change in interest rates would not materially affect the Company’s Net income or equity due to minimal floating interest rate exposure. The Company is exposed to interest rate changes from its short-term Retail and Financial Services segment borrowings (bank lines of credit and U.S. and GCCT commercial paper programs), variable rate long-term debt (Series H medium-term notes), and the Financial Services segment’s future issuances of HIS account deposits and Tax Free Savings account (TFSA) deposits. The Company is also exposed to interest rate risk through the refinancing of maturing debt and long-term GICs as well as from its impact on the credit risk of consumers, Dealers and franchisees as discussed above. Changes in interest rates can be favourable or unfavourable, and are impacted by various factors, including macroeconomic conditions. Should any of these risks materialize, the Company may experience material adverse impacts on its financial performance, including increased borrowing costs, reduced cash flows, and forgone opportunities for investment and growth. The Company manages its exposure to future interest rate increases by entering into interest rate derivatives and exercising early termination or redemption options under its financial liabilities. CTB has hedged a portion of its planned issuances of GCCT asset-backed term notes and broker GIC deposits in 2025 to 2029 with interest rate derivatives. Additionally, CTB holds short-term interest-bearing investments in reserve to comply with liquidity and regulatory requirements and charges interest on credit cards, which may offset certain interest rate fluctuations. However, there can be no assurance that these measures will successfully mitigate these risks. 6. Operating Segments The Company has three reportable operating segments: Retail, Financial Services, and CT REIT. The reportable operating segments are strategic business units offering different products and services. They are separately managed due to their distinct nature. The following summary describes the operations of each of the Company’s reportable segments: • The retail business is conducted under a number of banners including Canadian Tire, Canadian Tire Gas+ (Petroleum), Mark’s, PartSource, Helly Hansen, Party City in Canada, and various SportChek banners. Retail also includes the Dealer Loan Program (Franchise Trust issues loans to certain Dealers). Non-CT REIT real estate is included in Retail. • Financial Services issues Canadian Tire's Triangle brand credit cards, including Triangle Mastercard, Triangle World Elite Mastercard, and Cash Advantage Mastercard. Financial Services also markets insurance products, and provides settlement services to the Company’s affiliates. Financial Services includes CTB, a federally regulated Schedule I bank that manages and finances the Company’s consumer Mastercard portfolio, as well as an existing block of Canadian Tire branded line of credit loans. CTB also accepts deposits in HIS account deposits, including TFSA and GIC deposits, both directly and through third-party brokers. Financial Services also includes GCCT, a structured entity established to purchase co-ownership interests in the Company’s credit card loans receivable, and CTFS Bermuda Ltd., a Bermuda reinsurance company. GCCT issues debt to third-party investors to fund its purchases. • CT REIT is an unincorporated, closed-end real estate investment trust. CT REIT holds a geographically- diversified portfolio of properties in Canada, mainly comprising Canadian Tire banner stores, Canadian Tire anchored retail developments, mixed-use commercial property, and industrial properties. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 102 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 1 2 Performance is measured based on segment income before income taxes, as included in internal management reports. Management has determined that this measure is the most relevant in evaluating segment results and allocating resources. Information regarding the results of each reportable operating segment is as follows: 2024 2023 Eliminations and adjustments Eliminations and adjustments Financial Services Financial Services Retail CT REIT Total Retail CT REIT Total (C$ in millions) External revenue $ 14,801.5 $ 1,508.3 $ 61.6 $ (13.6) $ 16,357.8 $ 15,167.1 $ 1,455.5 $ 58.5 $ (24.6) $ 16,656.5 Intercompany revenue 10.9 51.9 517.1 (579.9) — 4.2 51.8 494.3 (550.3) — Total revenue 14,812.4 1,560.2 578.7 (593.5) 16,357.8 15,171.3 1,507.3 552.8 (574.9) 16,656.5 Cost of producing revenue 10,013.9 818.3 — (93.1) 10,739.1 10,324.6 723.9 — (95.6) 10,952.9 Gross margin 4,798.5 741.9 578.7 (500.4) 5,618.7 4,846.7 783.4 552.8 (479.3) 5,703.6 Other expense (income) (424.4) (1.1) — 133.7 (291.8) (115.3) 5.5 — 144.2 34.4 Selling, general and administrative expenses 3,203.1 388.4 141.8 (180.0) 3,553.3 3,320.9 394.7 130.7 (170.6) 3,675.7 Depreciation and amortization 951.6 9.4 — (198.8) 762.2 958.2 9.7 — (196.7) 771.2 Net finance costs (income) 296.0 (16.8) 121.8 (52.0) 349.0 275.9 (11.5) 114.0 (56.9) 321.5 Change in fair value of redeemable financial instrument — — — — — — — — 328.0 328.0 Fair value loss (gain) on investment properties — — (119.1) 119.1 — — — 78.6 (78.6) — Income (loss) before income taxes $ 772.2 $ 362.0 $ 434.2 $ (322.4) $ 1,246.0 $ 407.0 $ 385.0 $ 229.5 $ (448.7) $ 572.8 Items included in the above: Interest income1 118.3 1,349.7 1.5 (71.1) 1,398.4 110.6 1,277.0 0.5 (70.5) 1,317.6 Interest expense2 378.8 230.6 123.3 (202.7) 530.0 354.6 202.4 114.5 (203.9) 467.6 1 Interest income includes $35.5 million for the Retail Segment and $1,332.4 million for the Financial Services Segment offset by $(13.6) million in Eliminations and adjustments recognized in External Revenue above. Refer to Note 28. 2 Interest expense includes $230.0 million for the Financial Services Segment offset by $(93.1) million in Eliminations and adjustments recognized in Cost of producing revenue above. Refer to Note 29. Transactions among reportable operating segments are carried out at arm's length prices. The eliminations and adjustments include the following items: • reclassifications of certain revenues and costs in the Financial Services segment to net finance costs (income); • conversion from CT REIT’s fair value investment property measurement policy to the Company’s cost model, including the recording of depreciation and impairment; and • intersegment eliminations and adjustments including intercompany rent, property management fees, credit card processing fees and the change in fair value of the redeemable financial instrument. While the Company primarily operates in Canada, it also operates in foreign jurisdictions predominantly through Helly Hansen. Foreign revenue earned by Helly Hansen amounted to $777.9 million for the year ended December 28, 2024 (December 30, 2023 – $770.6 million). Property and equipment, intangible assets (brand and goodwill) and right-of-use assets located outside of Canada was $903.4 million as at December 28, 2024 (December 30, 2023 – $917.4 million). Capital expenditures by reportable operating segment are as follows: 2024 2023 Financial Services Financial Services Retail CT REIT Total Retail CT REIT Total (C$ in millions) Capital expenditures1 $ 473.5 $ 4.9 $ 96.7 $ 575.1 $ 610.1 $ 5.2 $ 68.1 $ 683.4 1 Capital expenditures are presented on an accrual basis and include software additions, but exclude right-of-use asset additions, acquisitions relating to business combinations and intellectual property additions. (C$ in millions) 2024 2023 Retail $ 17,935.6 $ 17,883.7 Financial Services 7,430.5 7,289.6 CT REIT 7,249.2 6,966.3 Eliminations and adjustments1 (10,374.7) (10,161.3) Total assets2 $ 22,240.6 $ 21,978.3 (C$ in millions) 2024 2023 Retail $ 10,371.2 $ 10,828.4 Financial Services 6,308.0 6,165.3 CT REIT 3,150.5 3,118.5 Eliminations and adjustments (4,677.4) (4,578.7) Total liabilities1 $ 15,152.3 $ 15,533.5 (C$ in millions) 2024 2023 Cash $ 423.6 $ 258.1 Cash equivalents Restricted cash and cash equivalents1 23.9 28.1 29.1 24.0 Total cash and cash equivalents2 $ 475.6 $ 311.2 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 103 Right-of-use asset additions by reportable operating segment are as follows: 2024 2023 Financial Services Financial Services (C$ in millions) Retail CT REIT Total Retail CT REIT Total Right-of-use asset additions $ 456.3 $ — $ — $ 456.3 $ 378.6 $ — $ 4.0 $ 382.6 Total assets by reportable operating segment are as follows: 1 Elimination are made to remove intercompany leases and investments in subsidiaries. Adjustments are made to measure investment properties at amortized cost. 2 The Company employs a shared-services model for several of its back-office functions including finance, information technology, human resources and legal. As a result, expenses relating to these functions are allocated on a systematic and rational basis to the reportable operating segments. The associated assets and liabilities are not allocated among segments in the presented measures of segmented assets and liabilities. Total liabilities by reportable operating segment are as follows: 1 The Company employs a shared-services model for several of its back-office functions including finance, information technology, human resources and legal. As a result, expenses relating to these functions are allocated on a systematic and rational basis to the reportable operating segments. The associated assets and liabilities are not allocated among segments in the presented measures of segmented assets and liabilities. The eliminations and adjustments include the following items: • conversion from CT REIT’s fair value investment property valuation policy to the Company’s cost model, including the recording of accumulated depreciation; and • intersegment eliminations. 7. Cash and Cash Equivalents Cash and cash equivalents, comprise the following: 1 Restricted cash and cash equivalents of $23.9 million (December 30, 2023 – $19.8 million) relates to GCCT and is restricted for the purpose of paying principal and interest to note holders and additional funding costs. $4.2 million (December 30, 2023 – $4.2 million) represents Helly Hansen’s operational items. 2 Included in cash and cash equivalents are amounts held in reserve in support of CTB’s liquidity and regulatory requirements (refer to Note 33.1). NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 104 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 8. Trade and Other Receivables Trade and other receivables include the following: (C$ in millions) 2024 2023 Trade receivables $ 829.6 $ 843.7 Other receivables 218.8 212.9 Net investment in subleases 21.2 18.0 Derivatives (Note 34.2) 193.4 76.7 $ 1,263.0 $ 1,151.3 Trade receivables are primarily from Dealers, franchisees and Helly Hansen’s wholesale customers. This is a large and geographically dispersed group whose receivables, individually, generally comprise less than one percent of the total balance outstanding. Other receivables are primarily receivables from vendors and tenants, and insurance receivables. Receivables from Dealers are in the normal course of business and include cost and margin-sharing arrangements. The credit range period on sale of goods is between one and 180 days. 9. Loans Receivable Quantitative information about the Company’s loans receivable portfolio is as follows: Total amount of receivables1 (C$ in millions) 2024 2023 Credit card loans2 $ 6,634.5 $ 6,495.6 Dealer and other loans 3 566.1 521.9 Total loans receivable 7,200.6 7,017.5 Less: long-term portion4 503.1 449.2 Current portion of loans receivable $ 6,697.5 $ 6,568.3 1 Amounts shown are net of allowance for loans receivable. 2 Includes line of credit loans. 3 Loans issued to certain Dealers by Franchise Trust (refer to Note 22). 4 The long-term portion of loans receivable is included in long-term receivables and other assets and includes Dealer loans of $500.4 million (December 30, 2023 – $447.4 million). For the year ended December 28, 2024, cash received from interest earned on credit cards and loans was $1,239.4 million (December 30, 2023 – $1,165.9 million). Loans to Dealers are secured by the Canadian Tire store assets of the respective Dealers’ corporations. The Company’s exposure to loans receivable credit risk resides at Franchise Trust and at the Bank. No allowances have been made for Dealer loans given the historical performance and the nature of the collateral. Credit risk at the Bank is influenced mainly by the individual characteristics of each credit card customer. The Bank uses sophisticated credit scoring models, monitoring technology and collection modelling techniques to implement and manage strategies, policies, and limits that are designed to control risk. Loans receivable are generated by a large and geographically dispersed group of customers in Canada. Current credit exposure is limited to the loss that would be incurred if all the Bank’s counterparties were to default at the same time. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 105 A continuity of the Company’s allowances for loans receivable is as follows: 2024 Lifetime ECL – not credit-impaired (Stage 2) Lifetime ECL – credit-impaired (Stage 3) 12-month ECL (Stage 1) (C$ in millions) Total Balance at December 30, 2023 $ 362.1 $ 234.8 $ 329.4 $ 926.3 Increase (decrease) during the period Write-offs (15.9) (54.2) (569.8) (639.9) Recoveries — — 104.6 104.6 New loans originated 32.7 — — 32.7 Transfers to Stage 1 94.4 (60.9) (33.5) — to Stage 2 (35.9) 43.2 (7.3) — to Stage 3 (31.5) (55.5) 87.0 — Net remeasurements (55.4) 119.7 447.9 512.2 Balance at December 28, 2024 $ 350.5 $ 227.1 $ 358.3 $ 935.9 2023 Lifetime ECL – not credit-impaired (Stage 2) Lifetime ECL – credit-impaired (Stage 3) 12-month ECL (Stage 1) (C$ in millions) Total Balance at January 1, 2022 $ 423.9 $ 197.4 $ 275.8 $ 897.1 Increase (decrease) during the period Write-offs (13.6) (33.9) (496.7) (544.2) Recoveries — — 91.6 91.6 New loans originated 36.0 — — 36.0 Transfers to Stage 1 72.1 (40.3) (31.8) — to Stage 2 (35.6) 41.7 (6.1) — to Stage 3 (31.3) (33.2) 64.5 — Net remeasurements (89.4) 103.1 432.1 445.8 Balance at December 30, 2023 $ 362.1 $ 234.8 $ 329.4 $ 926.3 Credit card loans are considered impaired when a payment is over 90 days past due or there is sufficient doubt regarding the collectability of the outstanding balance. No collateral is held against loans receivable, except for loans to Dealers, as discussed above. The Bank continues to seek recovery of amounts that were written off during the period, unless the Bank no longer has the right to collect, the receivable has been sold to a third party, or all reasonable efforts to collect have been exhausted. (C$ in millions) Stage 1 Stage 2 Stage 3 Total Low risk $ 3,484.5 $ 32.6 $ — $ 3,517.1 Moderate risk 1,957.6 119.8 — 2,077.4 High risk 897.5 409.5 668.8 1,975.8 Total gross carrying amount 6,339.6 561.9 668.8 7,570.3 ECL allowance 350.4 227.1 358.3 935.8 Net carrying amount $ 5,989.2 $ 334.8 $ 310.5 $ 6,634.5 (C$ in millions) Stage 1 Stage 2 Stage 3 Total Low risk $ 3,615.3 $ 28.5 $ — $ 3,643.8 Moderate risk 1,717.5 98.5 — 1,816.0 High risk 924.3 402.4 635.4 1,962.1 Total gross carrying amount 6,257.1 529.4 635.4 7,421.9 ECL allowance 362.1 234.8 329.4 926.3 Net carrying amount $ 5,895.0 $ 294.6 $ 306.0 $ 6,495.6 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 106 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS The following table sets out information about the credit risk exposure of loans receivable: 2024 2023 Transfers of Financial Assets Glacier Credit Card Trust GCCT is a structured entity created to securitize some of the Bank’s credit card loans receivable. The Bank has transferred co-ownership interest in certain credit card loans receivable to GCCT and has determined, for the purposes of accounting, consolidation of GCCT is appropriate. The associated liabilities, as at December 28, 2024 and December 30, 2023, secured by these assets, include the commercial paper notes and term notes on the Consolidated Balance Sheets and are carried at amortized cost. For legal purposes, the co-ownership interests in the Bank’s credit card loans receivable owned by GCCT have been legally sold to GCCT and are not available to the creditors of the Bank. Furthermore, GCCT’s liabilities are not legal liabilities of the Company. The table below sets out the carrying amounts and the fair values of the Bank’s transferred credit card loans receivable and the associated liabilities. 2024 2023 (C$ in millions) Carrying amount Fair value Carrying amount Fair value Credit card loans receivable transferred1 $ 2,274.1 $ 2,274.1 $ 2,283.3 $ 2,283.3 Associated liabilities 2,268.7 2,325.8 2,277.8 2,277.2 Net position $ 5.4 $ (51.7) $ 5.5 $ 6.1 1 The fair value measurement of credit card loans receivable is categorized within Level 2 of the fair value hierarchy. For definitions of the levels refer to Note 34.2. OSFI regulations prevent the Bank from extending liquidity and/or credit support to GCCT over and above the existing arrangements. The Bank has not identified any factors arising from current market circumstances that could lead to a need to change the substance of the Bank’s relationship with GCCT. There have been no relevant changes in the capital structure of GCCT since the Bank’s assessment for consolidation. Franchise Trust The consolidated financial statements include a portion (silo) of Franchise Trust, a legal entity sponsored by a third-party bank that originates and services loans to certain Dealers for their purchases of inventory and fixed assets (Dealer loans). The Company has arranged for several major Canadian banks to provide standby LCs to Franchise Trust as credit support for the Dealer loans. Franchise Trust has sold all its rights in the LCs and outstanding Dealer loans to other independent trusts set up by major Canadian banks (Co-owner Trusts) that raise funds in capital markets to finance their purchase of these undivided co-ownership interests. Due to the retention of substantially all the risks and rewards relating to these Dealer loans, the transfers are accounted for as secured financing transactions. Accordingly, the Company continues to recognize the current portion of these NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 107 assets in Loans receivable and the long-term portion in Long-term receivables and other assets and records the associated liability secured by these assets as Loans, being the loans that Franchise Trust has incurred to fund the Dealer loans. The Dealer loans and Loans are initially recorded at fair value and subsequently carried at amortized cost. 2024 2023 (C$ in millions) Carrying amount Fair value Carrying amount Fair value Dealer loans1 $ 563.2 $ 563.2 $ 520.0 $ 520.0 Associated liabilities (Note 22) 563.2 563.2 520.0 520.0 Net position $ — $ — $ — $ — 1 The fair value measurement of Dealer loans is categorized within Level 2 of the fair value hierarchy. For definitions of the levels refer to Note 34.2 The Dealer loans have been legally sold and are not available to the creditors of the Company. Loans are not legal liabilities of the Company. If a Dealer defaults on a loan, the Company has the right to purchase such loan from the Co-owner Trusts, at which time the Co-owner Trusts will assign such Dealer’s debt instrument and related security documentation to the Company. The assignment of this documentation provides the Company with first-priority security rights over all such Dealer’s assets, subject to certain prior ranking statutory claims. In most cases, the Company expects to recover any payments made to purchase a defaulted loan, including any associated expenses. In the event the Company does not choose to purchase a defaulted Dealer loan, the Co- owner Trusts may draw against the LCs. The Co-owner Trusts may also draw against the LCs to cover any shortfalls in certain related fees owing to them. In any case, where a draw is made against the LCs, the Company has agreed to reimburse the bank issuing the LCs for the amount so drawn. Refer to Note 35 for further information. 10. Long-Term Receivables and Other Assets Long-term receivables and other assets include the following: (C$ in millions) 2024 2023 Loans receivable (Note 9) $ 503.1 $ 449.2 Net investment in subleases 85.8 87.6 Derivatives (Note 34.2) 59.2 44.8 Other receivables 12.9 12.1 Total long-term receivables 661.0 593.7 Other 50.9 52.1 $ 711.9 $ 645.8 Included in Other in Long-term receivables and other assets is the Company’s minority interest in Ashcroft Terminal Ltd., a 320-acre inland transload and storage terminal strategically located at the intersection of both Canadian Pacific Railways Limited and Canadian National Railways Company railway networks in British Columbia. The interest was acquired on July 28, 2021 and comprises the Company’s initial investment of $40 million in addition to adjustments required under the equity method of accounting. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 108 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 11. Goodwill and Intangible Assets The following table presents the changes in cost and accumulated amortization and impairment of the Company’s goodwill and intangible assets: 2024 Goodwill and Indefinite-life intangible assets Finite-life intangible assets Franchise agreements and other intangibles Banners and trademarks Other intangibles Goodwill Software Total (C$ in millions) Cost Balance, beginning of year $ 848.8 $ 880.4 $ 167.9 $ 1,593.3 $ 11.7 $ 3,502.1 Additions — — — 56.0 — 56.0 Disposals/retirements — (1.5) — (56.3) — (57.8) Currency translation adjustment (6.1) (6.2) — — — (12.3) Balance, end of year $ 842.7 $ 872.7 $ 167.9 $ 1,593.0 $ 11.7 $ 3,488.0 Accumulated amortization and impairment Balance, beginning of year $ (4.0) $ (17.0) $ — $ (1,214.7) $ (11.7) $ (1,247.4) Amortization for the year — — — (120.2) — (120.2) Impairment — — — — — — Disposals/retirements — — — 55.8 — 55.8 Balance, end of year $ (4.0) $ (17.0) $ — $ (1,279.1) $ (11.7) $ (1,311.8) Net carrying amount, end of year $ 838.7 $ 855.7 $ 167.9 $ 313.9 $ — $ 2,176.2 2023 Goodwill and Indefinite-life intangible assets Finite-life intangible assets Franchise agreements and other intangibles Banners and trademarks Other intangibles (C$ in millions) Goodwill Software Total Cost Balance, beginning of year $ 867.2 $ 901.6 $ 167.7 $ 1,515.2 $ 11.7 $ 3,463.4 Additions — 3.4 0.2 80.0 — 83.6 Disposals/retirements — — — (1.9) — (1.9) Currency translation adjustment (18.4) (24.6) — — — (43.0) Balance, end of year $ 848.8 $ 880.4 $ 167.9 $ 1,593.3 $ 11.7 $ 3,502.1 Accumulated amortization and impairment Balance, beginning of year $ (4.0) $ (16.6) $ — $ (1,089.5) $ (11.7) $ (1,121.8) Amortization for the year — — — (127.0) — (127.0) Impairment — (0.4) — — — (0.4) Disposals/retirements — — — 1.8 — 1.8 Balance, end of year $ (4.0) $ (17.0) $ — $ (1,214.7) $ (11.7) $ (1,247.4) Net carrying amount, end of year $ 844.8 $ 863.4 $ 167.9 $ 378.6 $ — $ 2,254.7 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 109 The following table presents the details of the Company’s goodwill and indefinite-life intangible assets: 2024 2023 Indefinite-life Intangible Assets Indefinite-life Intangible Assets (C$ in millions) Goodwill Goodwill Helly Hansen $ 347.6 $ 437.0 $ 353.7 $ 443.2 SportChek 362.5 338.5 362.5 340.0 Canadian Tire 71.9 171.6 71.9 171.6 Mark’s 56.7 76.5 56.7 76.5 Total $ 838.7 $ 1,023.6 $ 844.8 $ 1,031.3 The Company’s banners and trademarks, which include SportChek, Mark’s, Helly Hansen, Party City and acquired private-label brands, represent legal trademarks of the Company with expiry dates ranging from 2025 to 2038 with further renewals at the Company’s election and discretion dependent on use. As the Company currently has no approved plans to change its store banners and intends to continue to use and renew its trademarks and private-label brands at each expiry date for the foreseeable future, there is no foreseeable limit to the period over which the assets are expected to generate net cash inflows. Therefore, these intangible assets are considered to have indefinite useful lives. Franchise agreements have expiry dates with options to renew or have indefinite lives. As the Company intends to renew these agreements at each renewal date for the foreseeable future, there is no foreseeable limit to the period over which the franchise agreements and franchise locations will generate net cash inflows. Therefore, these assets are considered to have indefinite useful lives. Borrowing costs capitalized were $2.4 million (December 30, 2023 – $3.2 million). The capitalization rate used to determine the amount of borrowing costs capitalized during the year was 5.6 percent (December 30, 2023 – 5.9 percent). Amortization expense of software and other finite-life intangible assets is included in Depreciation and amortization in the Consolidated Statements of Income. Impairment of Intangible Assets and Subsequent Reversal The Company performed its annual impairment test on goodwill and indefinite-life intangible assets for all CGUs. During 2024, for all goodwill and intangible assets, the estimated recoverable amount is based on VIU, which exceeds the carrying amount. The cash flow projections included specific estimates for up to five years and terminal growth rates to extrapolate cash flow projections beyond the period covered by the most recent forecasts, except as noted below. The key assumptions used in the estimation of the recoverable amount for all CGUs are set out below. 2024 2023 Discount rate 7.0 to 10.3 % 8.3 to 11.5 % Terminal growth rate 2.0 to 3.0 % 2.0 to 3.0 % A change in the assumptions used in testing SportChek and Helly Hansen goodwill and intangible assets could cause the carrying amount to exceed the estimated recoverable amount. As SportChek and Helly Hansen are the banners most sensitive to changes in assumptions, the following mutually exclusive changes in assumptions would result in the carrying value being equal to the recoverable amount: Increase in Discount Rate Decreases in Terminal Growth Rate SportChek 2.5 % 3.3 % Helly Hansen 1.8 % 2.3 % (C$ in millions) 2024 2023 Cost Balance, beginning of year $ 542.8 $ 508.1 Additions 9.5 34.7 Other1 (3.8) — Balance, end of year $ 548.5 $ 542.8 Accumulated depreciation and impairment Balance, beginning of year $ (99.1) $ (86.6) Depreciation for the year (11.7) (10.8) Other1 (1.0) (1.7) Balance, end of year $ (111.8) $ (99.1) Net carrying amount, end of year2 $ 436.7 $ 443.7 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 110 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS In addition, changes in assumptions for revenue and EBITDA growth could also cause the carrying amount to exceed the estimated recoverable amount. There were no impairment charges nor reversal of impairments for indefinite-life intangible assets (December 30, 2023 – $0.4 million). There were no impairment charges nor reversal of impairments for finite-life intangible assets (December 30, 2023 – nil). There were no impairment charges for goodwill (December 30, 2023 – nil). 12. Investment Property The following table presents changes in the cost and the accumulated depreciation and impairment on the Company’s investment property: 1 Other includes disposals, retirements, impairment, reclassifications and transfers. The Company reclassified $3.8 million (December 30, 2023 - nil) of property including $0.3 million in accumulated amortization to Held for sale. 2 Investment property includes $5.7 million (December 30, 2023 – $5.9 million) right-of-use assets related to operating subleases where the Company is an intermediate lessor. The investment properties generated rental income of $65.3 million (December 30, 2023 – $61.5 million). Direct operating expenses (including repairs and maintenance) arising from investment property recognized in Net income were $27.1 million (December 30, 2023 – $24.1 million). The estimated fair value of investment property was $619.8 million (December 30, 2023 – $616.9 million). This recurring fair value measurement is categorized within Level 3 of the fair value hierarchy (refer to Note 34.2 for definition of levels). The Company determines the fair value of investment property by applying a pre-tax discount rate to the annual rental income for the current leases. The discount rate ranged from 5.00 percent to 8.68 percent (December 30, 2023 – 4.75 percent to 8.46 percent). The cash flows are for a term of five years, including a terminal value. The Company has real estate management expertise that is used to perform the valuation of investment property and has also completed independent appraisals on certain investment property owned by CT REIT. Impairment of Investment Property and Subsequent Reversal Any impairment or reversals of impairment are reported in Other expense (income) in the Consolidated Statements of Income. The Company recorded an impairment loss of $1.3 million for investment property (December 30, 2023 – $1.7 million). There was no reversal of impairments for investment property (December 30, 2023 – nil). NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 111 13. Property and Equipment The following table presents changes in the cost and the accumulated depreciation and impairment on the Company’s property and equipment: 2024 Fixtures and equipment Leasehold improvements Construction in progress (C$ in millions) Land Buildings Total Cost Balance, beginning of year $ 1,135.2 $ 4,118.8 $ 2,242.7 $ 1,525.3 $ 422.5 $ 9,444.5 Additions 24.1 105.4 241.8 142.0 (3.6) 509.7 Disposals/retirements1 (3.9) (9.1) (76.7) (4.1) — (93.8) Currency translation adjustment — — (0.5) (0.6) (0.1) (1.2) Other2 (8.0) (81.4) 14.4 33.9 (47.7) (88.8) Balance, end of year $ 1,147.4 $ 4,133.7 $ 2,421.7 $ 1,696.5 $ 371.1 $ 9,770.4 Accumulated depreciation and impairment Balance, beginning of year $ (5.7) $ (2,011.5) $ (1,340.8) $ (867.0) $ — $ (4,225.0) Depreciation for the year — (80.9) (159.6) (79.0) — (319.5) Net impairment (loss) reversal — (0.2) (0.1) (1.1) — (1.4) Disposals/retirements1 — 7.1 71.6 3.4 — 82.1 Other2 — 85.0 2.8 — — 87.8 Balance, end of year $ (5.7) $ (2,000.5) $ (1,426.1) $ (943.7) $ — $ (4,376.0) Net carrying amount, end of year $ 1,141.7 $ 2,133.2 $ 995.6 $ 752.8 $ 371.1 $ 5,394.4 1 Disposals includes $53.6 million of assets no longer in use with a net book value of nil. 2 Other includes reclassifications, transfers, tenant allowances and transfer of Brampton DC to Held for sale. 2023 Fixtures and equipment Leasehold improvements Construction in progress (C$ in millions) Land Buildings Total Cost Balance, beginning of year $ 1,100.7 $ 3,915.6 $ 1,904.1 $ 1,430.3 $ 647.0 $ 8,997.7 Additions 41.1 209.5 394.4 121.4 (198.0) 568.4 Disposals/retirements1, 3 — (1.2) (69.5) (6.9) (15.1) (92.7) Currency translation adjustment — — 0.2 — — 0.2 Other2 (6.6) (5.1) 13.5 (19.5) (11.4) (29.1) Balance, end of year $ 1,135.2 $ 4,118.8 $ 2,242.7 $ 1,525.3 $ 422.5 $ 9,444.5 Accumulated depreciation and impairment Balance, beginning of year $ (6.0) $ (1,942.7) $ (1,256.8) $ (798.1) $ — $ (4,003.6) Depreciation for the year — (80.5) (151.3) (75.0) — (306.8) Net impairment (loss) reversal — — (2.1) 0.1 — (2.0) Disposals/retirements1, 3 0.3 0.9 63.3 5.0 — 69.5 Other2 — 10.8 6.1 1.0 — 17.9 Balance, end of year $ (5.7) $ (2,011.5) $ (1,340.8) $ (867.0) $ — $ (4,225.0) Net carrying amount, end of year $ 1,129.5 $ 2,107.3 $ 901.9 $ 658.3 $ 422.5 $ 5,219.5 1 Disposals includes $59.0 million of assets no longer in use with a net book value of nil. 2 Other includes reclassifications, transfers and tenant allowances. The Company reclassified $33.1 million of property including $17.5 million in accumulated amortization to assets held for sale. 3 Disposals/retirements include amounts derecognized due to the fire at the AJ Billes Distribution Centre. Reimbursements from third parties of $19.4 million were accrued and recognized in Other expense (income) in the Consolidated Statements of Income. During the year, the Company transferred the Brampton DC property with a carrying value of $5.9 million to Held for sale. The subsequent disposal of the Brampton DC resulted in a gain of $241.0 million recognized in Other expense (income) in the Consolidated Statement of Income. (C$ in millions) Property Non-property Total Balance, beginning of year $ 1,872.5 $ 61.3 $ 1,933.8 Additions 429.4 26.9 456.3 Depreciation for the year (314.4) (20.4) (334.8) Impairment (5.8) — (5.8) Disposals/retirements and other (14.8) 0.1 (14.7) Balance, end of year $ 1,966.9 $ 67.9 $ 2,034.8 (C$ in millions) Property Non-property1 Total Balance, beginning of year $ 1,868.0 $ 64.0 $ 1,932 Additions 359.0 23.6 382.6 Depreciation for the year (329.6) (26.5) (356.1) Impairment (3.9) — (3.9) Disposals/retirements and other (21.0) 0.2 (20.8) Balance, end of year $ 1,872.5 $ 61.3 $ 1,933.8 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 112 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS The Company capitalized borrowing costs of $14.7 million (December 30, 2023 – $14.6 million) relating to property and equipment under construction. The rate used to determine the amount of borrowing costs capitalized during the year was 5.2 percent (December 30, 2023 – 5.2 percent). Impairment of Property and Equipment and Subsequent Reversal There was a net impairment of $1.4 million (December 30, 2023 – net impairment of $2.0 million). Any impairment or reversal of impairment is reported in Other expense (income) in the Consolidated Statements of Income. 14. Leases 14.1 As a Lessee Extension and termination options are included in a number of leases across the Company, particularly for property related leases. These terms are used to maximize the operational flexibility of managing contracts. The majority of the extension and termination options held are exercisable only by the Company and not by the respective lessor. 14.1.1 Right-of-use Assets The following table presents changes to the carrying amount of the Company’s right-of-use assets at the end of the reporting period: 2024 1 1 Non-property leases consist of leased IT equipment, supply chain and transportation related assets. 2023 1 Non-property leases consist of leased IT equipment, supply chain and transportation related assets. Impairment of Right-of-use Assets and Subsequent Reversal There was an impairment charge of $5.8 million (December 30, 2023 – impairment charge of $3.9 million). Any impairment or reversal of impairment is reported in Other expense (income) in the Consolidated Statements of Income. (C$ in millions) 2024 2023 Less than one year $ 497.5 $ 454.8 One to five years 1,489.7 1,493.9 More than five years 1,276.5 1,174.7 Total undiscounted lease obligation1 $ 3,263.7 $ 3,123.4 (C$ in millions) 2024 2023 Less than one year $ 26.4 $ 22.5 One to two years 24.2 23.7 Two to three years 21.2 21.0 Three to four years 15.8 17.3 Four to five years 13.6 12.1 More than five years 25.8 21.6 Total undiscounted lease payments receivable 127.0 118.2 Unearned finance income (20.0) (12.6) Net investment in subleases $ 107.0 $ 105.6 (C$ in millions) 2024 2023 Less than one year $ 38.7 $ 37.7 One to two years 35.9 34.6 Two to three years 30.3 31.0 Three to four years 25.3 25.0 Four to five years 19.8 19.7 More than five years 62.0 69.0 Total $ 212.0 $ 217.0 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 113 14.1.2 Undiscounted Cash Flows Total lease liabilities of $2,490.1 million (December 30, 2023 - $2,364.5 million) include annual lease payments for property and non-property leases of: 1 Excludes $200.6 million (December 30, 2023 – $280.1 million) commitment for lease agreements signed but not yet commenced. 14.2 As a Lessor The Company leases out a number of its investment properties (refer to Note 12) and has certain sublease arrangements with the majority having an option to renew after the expiry date. The lessee does not have an option to purchase the property at the expiry of the lease period. 14.2.1 Net Investment in Subleases The table below summarizes the Company’s contractual cash flows from its net investment in subleases. 14.2.2 Operating Leases The table below summarizes the Company’s future undiscounted annual minimum lease payments receivable from lessees under non-cancellable operating leases. Name of subsidiary Principal activity Ownership Interest Country of incorporation and operation 2024 2023 CTFS Holdings Limited1 Banking, processing credit card transactions at Canadian Tire Retail Banners, marketing of insurance products, and reinsurance Canada 100.0 % 100.0 % Canadian Tire Real Estate Limited Real estate Canada 100.0 % 100.0 % CT Real Estate Investment Trust Real estate Canada 68.4 % 68.4 % FGL Sports Ltd. (SportChek) Retailer of sporting equipment, apparel and footwear Canada 100.0 % 100.0 % Franchise Trust2 Canadian Tire Dealer Loan Program Canada 0.0 % 0.0 % Glacier Credit Card Trust3 Financing program to purchase co-ownership interests in the Bank’s credit card loans Canada 0.0 % 0.0 % Mark’s Work Wearhouse Ltd. Retailer of clothing and footwear Canada 100.0 % 100.0 % Helly Hansen Group AS Holding company for “Helly Hansen” branded global wholesaler of sportswear and workwear Norway 100.0 % 100.0 % NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 114 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 15. Subsidiaries 15.1 Control of Subsidiaries and Composition of the Company These Consolidated Financial Statements include entities controlled by Canadian Tire Corporation. Control exists when the Company has the ability to direct the relevant activities of the entity, has exposure or rights to variable returns from its involvement with the entity, and is able to use its power over the entity to affect its returns from the entity. The financial statements of these entities are included in these consolidated financial statements from the date that control commences until the date that control ceases. Details of the Company’s significant entities are as follows: 1 Legal entity CTFS Holdings Limited, incorporated in 2014, is the parent company of CTB and CTFS Bermuda Ltd. CTB's principal activity is banking, marketing of insurance products and processing credit card transactions at the Company’s stores. CTFS Bermuda Ltd.’s principal activity is reinsurance. 2 Franchise Trust is a legal entity sponsored by a third-party bank that originates loans to certain Dealers under the Dealer Loan program. The Company does not have any share ownership in Franchise Trust; however, the Company has determined that it has the ability to direct the relevant activities and returns on the silo of assets and liabilities of Franchise Trust that relate to the Canadian Tire Dealer Loan Program. As the Company has control over this silo of assets and liabilities, it is consolidated in these financial statements. 3 GCCT was formed to meet specific business needs of the Company, namely to buy co-ownership interests in the Company’s credit card loans receivable. GCCT issues debt to third-party investors to fund such purchases. The Company does not have any share ownership in GCCT; however, the Company has determined that it is able to direct the relevant activities and returns of GCCT. As the Company has control over GCCT from an accounting perspective, it is consolidated in these financial statements. 15.2 Details of Non-wholly Owned Subsidiaries that have Non-Controlling Interests The portion of net assets and income attributable to third parties is reported as non-controlling interests and Net income attributable to non-controlling interests in the Consolidated Balance Sheets and Consolidated Statements of Income, respectively. The non-controlling interests of CT REIT were initially measured at fair value on the date of acquisition. (C$ in millions) CT REIT1 Other2 Total Non-controlling interests 31.6 % 50.0 % Current assets $ 11.4 $ 30.2 $ 41.6 Non-current assets 7,237.8 60.1 7,297.9 Current liabilities 619.0 15.7 634.7 Non-current liabilities 2,531.4 34.8 2,566.2 Net assets 4,098.8 39.8 4,138.6 Revenue $ 578.7 $ 298.5 $ 877.2 Net income attributable to non-controlling interests $ 78.0 $ 6.2 $ 84.2 Equity attributable to non-controlling interests 916.9 16.4 933.3 Distributions to non-controlling interests (68.0) (2.3) (70.3) (C$ in millions) CTFS Holdings Limited1 CT REIT2,4 Other3 Total4 Non-controlling interests — % 31.6 % 50.0 % Current assets N/A $ 28.6 $ 17.5 $ 46.1 Non-current assets N/A 6,937.7 52.7 6,990.4 Current liabilities Non-current liabilities N/A N/A 332.6 2,785.9 3.7 35.7 336.3 2,821.6 Net assets — 3,847.8 30.8 3,878.6 Revenue $ 1,632.6 $ 552.8 $ 285.5 $ 2,470.9 Net income attributable to non-controlling interests Equity attributable to non-controlling interests $ 48.4 — $ 72.5 887.3 $ 4.9 12.4 $ 125.8 899.7 Distributions to non-controlling interests (73.8) (65.5) (2.8) (142.1) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 115 The following table summarizes the information relating to non-controlling interests: 2024 1 Net income attributable to non-controlling interests is based on net income of CT REIT adjusted to convert to the Company’s cost method, including recording of depreciation. 2 Net income attributable to non-controlling interests is based on net income of the subsidiary adjusted for contractual requirements as stipulated in the ownership agreement. 2023 1 Net income attributable to non-controlling interests is based on the net income of CTFS Holdings Limited adjusted for contractual requirements as stipulated in the Universal Shareholder agreement, until October 31, 2023, when the Company reacquired the 20% interest. As a result, the net assets of CTFS Holdings Limited are not attributable to non-controlling interests as at December 30, 2023. 2 Net income attributable to non-controlling interests is based on net income of CT REIT adjusted to convert to the Company’s cost method, including recording of depreciation. 3 Net income attributable to non-controlling interests is based on net income of the subsidiary adjusted for contractual requirements as stipulated in the ownership agreement. 4 Certain prior-year figures have been restated to conform to the current-year presentation. Recognized in other comprehensive income Balance, beginning of year Recognized in profit or loss Recognized in equity Balance, end of year (C$ in millions) Provisions, deferred revenue and reserves $ 95.5 $ 29.9 $ — $ 1.9 $ 127.3 Property and equipment (120.8) (35.6) — (0.6) (157.0) Intangible assets (285.2) 4.9 — 1.6 (278.7) Employee benefits 42.1 1.3 (6.2) — 37.2 Cash flow hedges (16.2) — (61.0) 23.3 (53.9) Right-of-use asset and lease liabilities 128.0 (5.8) — 0.1 122.3 Non-capital losses carryforward 45.1 (29.3) — (0.7) 15.1 Other 8.9 (1.0) — 0.2 8.1 Net deferred tax asset (liability)1 $ (102.6) $ (35.6) $ (67.2) $ 25.8 $ (179.6) Recognized in other comprehensive income Balance, beginning of year Recognized in profit or loss Recognized in equity Balance, end of year (C$ in millions) Provisions, deferred revenue and reserves $ 209.3 $ (113.7) $ — $ (0.1) $ 95.5 Property and equipment (82.9) (37.6) — (0.3) (120.8) Intangible assets (273.0) (17.2) — 5.0 (285.2) Employee benefits 38.6 1.1 2.4 — 42.1 Cash flow hedges (50.8) — 3.1 31.5 (16.2) Right-of-use asset and lease liabilities 133.2 (5.4) — 0.2 128.0 Non-capital losses carryforward 32.9 14.0 — (1.8) 45.1 Other 4.0 4.1 — 0.8 8.9 Net deferred tax asset (liability)1 $ 11.3 $ (154.7) $ 5.5 $ 35.3 $ (102.6) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 116 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 16. Income Taxes 16.1 Deferred Income Tax Assets and Liabilities The amount of deferred tax assets or liabilities recognized in the Consolidated Balance Sheets and the corresponding movement recognized in the Consolidated Statements of Income, Consolidated Statements of Changes in Equity, or resulting from a business combination is as follows: 2024 1 Includes the net amount of deferred tax assets of $65.9 million and deferred tax liabilities of $245.5 million. 2023 1 Includes the net amount of deferred tax assets of $79.5 million and deferred tax liabilities of $182.1 million. No deferred tax is recognized on the amount of temporary differences arising from the difference between the carrying amount of the investment in subsidiaries, branches and associates and interests in joint arrangements accounted for in these consolidated financial statements and the cost amount for tax purposes of the investment. The Company is able to control the timing of the reversal of these temporary differences and believes it is probable that they will not reverse in the foreseeable future. The amount of these taxable temporary differences was approximately $2.6 billion at December 28, 2024 (December 30, 2023 – $2.5 billion). No deferred tax asset is recognized for the carryforward of unused tax losses and unused tax credits to the extent that it is not probable that future taxable profit will be available against which to use the unused tax losses and tax credits. The amount of these deductible temporary differences was approximately $187.9 million at December 28, 2024 (December 30, 2023 – $187.8 million). The Government of Canada enacted the Global Minimum Tax Act (the GMTA) on June 20, 2024, which implements the Organisation for Economic Co-operation and Development’s 15% global minimum corporate tax regime for certain multinational enterprises (Pillar Two) in Canada. The GMTA and other corresponding foreign Pillar Two legislation are effective for the Company’s fiscal year beginning January 1, 2024. (C$ in millions) 2024 2023 Current tax expense Current period $ 207.5 $ 103.0 Adjustments with respect to prior years 31.0 (24.0) $ 238.5 $ 79.0 Deferred tax expense (benefit) Deferred income tax expense relating to the origination and reversal of temporary differences $ 67.4 $ 129.7 Deferred income tax (benefit) expense adjustments with respect to prior years (31.8) 25.0 35.6 154.7 Total income tax expense $ 274.1 $ 233.7 (C$ in millions) 2024 2023 Net fair value gains (losses) on derivatives designated as cash flow hedges excluding time value of swaptions $ 6.3 $ (14.9) Changes in fair value of the time value of swaptions (3.3) 15.0 Reclassification of losses (gains) to income (3.4) 0.3 Net fair value gains (losses) on inventory cash flow hedges 61.4 (3.5) Actuarial gains (losses) 6.2 (2.4) Total income tax expense (benefit) $ 67.2 $ (5.5) (C$ in millions) 2024 2023 Income before income taxes $ 1,246.0 $ 572.8 Income taxes based on the applicable statutory tax rate of 26.41% (December 30, 2023 – 26.42%) $ 329.0 $ 151.3 Adjustment to income taxes resulting from: Non-taxable portion of capital gains (33.1) (0.1) Income attributable to non-controlling interests in flow-through entities (22.0) (20.3) Non-deductible stock option expense 1.7 3.5 Non-deductibility of change in fair value of redeemable financial instrument — 86.9 Tax losses not benefitted — 7.8 Other (1.5) 4.6 Income tax expense $ 274.1 $ 233.7 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 117 The Company performed an assessment of its potential exposure to Pillar Two income taxes and determined that Pillar Two effective tax rates in most of the jurisdictions in which the Company operates are above 15%. In jurisdictions where the transitional safe harbour rules do not apply and the Pillar Two effective tax rate is below 15%, the Company has insignificant exposure to Pillar Two income taxes. Therefore, the Company has not provided for current tax expense related to Pillar Two. The Company has applied the temporary mandatory exception from the recognition and disclosure of deferred taxes related to the implementation of Pillar Two model rules. 16.2 Income Tax Expense The following are the major components of income tax expense: Income tax expense (benefit) recognized in other comprehensive income was as follows: Reconciliation of Income Tax Expense Income taxes in the Consolidated Statements of Income vary from amounts that would be computed by applying the statutory income tax rate for the following reasons: NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 118 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS The applicable statutory tax rate is the aggregate of the Canadian federal income tax rate of 15.0 percent (December 30, 2023 – 15.0 percent) and the Canadian provincial income tax rate of 11.41 percent (December 30, 2023 – 11.42 percent). In the ordinary course of business, the Company is subject to ongoing audits by tax authorities. While the Company has determined that its tax filing positions are appropriate and supportable, occasionally certain matters are reviewed and challenged by the tax authorities. The Company regularly reviews the potential for adverse outcomes with respect to tax matters. The Company believes that their ultimate disposition will not have a material adverse effect on its liquidity, Consolidated Balance Sheets, or Net income because the Company has determined 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. 17. Deposits Total deposits of $3,557.4 million (December 30, 2023 - $3,364.3 million) consist of broker deposits and retail deposits. Cash from broker deposits is generated from GIC offerings through broker channels rather than direct receipts from retail customers. Broker deposits are offered for varying terms ranging from 30 days to five years and issued broker GICs are non-redeemable prior to maturity (except in rare circumstances). Total short-term and long-term broker deposits outstanding at December 28, 2024, were $2,946.5 million (December 30, 2023 – $2,734.4 million). Retail deposits consist of HIS deposits, retail GICs and TFSA deposits. Total retail deposits outstanding at December 28, 2024, were $610.9 million (December 30, 2023 – $629.9 million). For repayment requirements of deposits refer to Note 5.4. The following are the effective rates of interest: 2024 2023 GIC deposits 3.88 % 3.42 % HIS account deposits 3.62 % 3.22 % (C$ in millions) 2024 2023 Trade payables and accrued liabilities $ 2,411.4 $ 2,160.1 Derivatives (Note 34.2) 15.1 63.5 Financial liabilities 2,426.5 2,223.6 Deferred revenue 351.6 342.4 Other 153.3 123.4 $ 2,931.4 $ 2,689.4 Sales and warranty returns Site restoration and decommissioning (C$ in millions) Other Total Balance, beginning of year $ 188.1 $ 57.4 $ 34.2 $ 279.7 Charges, net of reversals 596.2 22.5 9.3 628.0 Utilizations (601.2) (27.2) (30.5) (658.9) Discount adjustments 6.0 (1.5) — 4.5 Balance, end of year $ 189.1 $ 51.2 $ 13.0 $ 253.3 Current provisions 177.1 5.7 3.4 186.2 Long-term provisions 12.0 45.5 9.6 67.1 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 119 18. Trade and Other Payables Trade and other payables include the following: Deferred revenue consists mainly of unearned revenue relating to gift cards and customer loyalty program rewards. Deferred revenue will be recognized as revenue as the customer utilizes gift cards and loyalty rewards are redeemed. The majority of deferred revenue is expected to be redeemed within one year from issuance. $311.8 million included in deferred revenue at the beginning of the period was recognized as revenue in 2024 (December 30, 2023 – $292.8 million). Other consists primarily of the short-term portion of share-based payment transactions and sales taxes payable. The payment terms for trade payables range from due immediately to 180 days (December 30, 2023 – due immediately to 180 days). 19. Provisions The following table presents the changes to the Company’s provisions: 2024 20. Contingencies Legal Matters The Company is party to a number of legal and regulatory proceedings and has determined that each such proceeding constitutes a routine matter incidental to the business it conducts, and the ultimate disposition of the proceedings will not have a material effect on its consolidated Net income, cash flows, or financial position. (C$ in millions) 2024 2023 CTC – U.S. CP Outstanding (C$ equivalent) $ — $ 365.6 CTC (excluding Helly Hansen) – Unsecured Bank Lines — 160.0 CT REIT – Unsecured Bank Lines 2.0 — GCCT – ABCP Outstanding 293.8 293.1 CTB – Unsecured Bank Line and Note Purchase Facility — 147.0 Total short-term borrowings $ 295.8 $ 965.7 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 120 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 21. Short-Term Borrowings Short-term borrowings include commercial paper notes issued by the Company and GCCT, note purchase facility borrowings issued by GCCT, and borrowings on the unsecured committed bank lines of credit of the Company, CTB, and CT REIT. Short-term borrowings may bear interest payable monthly, at maturity, or be sold at a discount and mature at face value. The commercial paper notes are short-term notes issued with varying original maturities of 364 days or less for GCCT’s ABCP and 270 days or less for the Company’s U.S. CP at interest rates fixed at the time of each issuance or increase and are recorded at amortized cost. Short-term borrowings consists of the following: 22. Loans Franchise Trust, a special-purpose entity, is a legal entity sponsored by a third-party bank that originates loans to certain Dealers. Loans are what Franchise Trust incurs to fund Dealer loans, which are secured by such Dealers’ store assets. These loans are not direct legal liabilities of the Company but have been consolidated in the accounts of the Company as the Company effectively controls the silo of Franchise Trust containing the Canadian Tire Dealer Loan Program (refer to note 15.1). Loans, which are initially recognized at fair value and are subsequently measured at amortized cost, are due within one year. 2024 2023 (C$ in millions) Face value Carrying amount Face value Carrying amount Medium-term notes (CTC) Series 2, 6.5%, due April 13, 2028 150.0 151.2 150.0 151.1 Series 2, 6.57%, due February 24, 2034 200.0 201.7 200.0 201.8 Series B, 5.610%, due September 4, 2035 200.0 199.7 200.0 199.8 Series G, 5.372%, due September 16, 2030 400.0 398.6 400.0 398.6 Series H, CORRA + 1.00%, due September 14, 2026 200.0 199.6 200.0 199.6 Debentures (CT REIT) Series B, 3.527%, due June 9, 2025 200.0 199.9 200.0 199.8 Series D, 3.289%, due June 1, 2026 200.0 199.8 200.0 199.7 Series E, 3.469%, due June 16, 2027 175.0 174.7 175.0 174.6 Series F, 3.865%, due December 7, 2027 200.0 199.6 200.0 199.5 Series G, 2.371%, due January 6, 2031 150.0 149.4 150.0 149.3 Series H, 3.029%, due February 5, 2029 250.0 249.1 250.0 248.9 Series I, 5.828%, due June 14, 2028 250.0 249.0 250.0 248.6 Senior asset-backed term notes (GCCT) Series 2019-1, 2.280%, due June 6, 20241 — — 523.6 523.2 Series 2020-1, 1.388%, due September 22, 20251 448.8 447.9 Series 2022-1, 4.958%, due September 20, 20271 420.7 419.4 420.8 418.9 Series 2023-1, 5.681%, due September 20, 20281 467.5 465.6 467.5 465.0 Series 2024-1, 4.740%, September 20, 20261 514.3 512.7 — — Subordinated asset-backed term notes (GCCT) Series 2019-1, 3.430%, due June 6, 20241 — — 36.4 36.4 Series 2020-1, 2.438%, due September 22, 20251 31.2 31.2 31.2 31.2 Series 2022-1, 6.108%, due September 20, 20271 29.3 29.3 29.3 29.3 Series 2023-1, 6.881%, due September 20, 20281 32.5 32.5 32.5 32.5 Series 2024-1, 5.588%, September 20, 20261 35.7 35.8 — — Mortgages Term Loan, adjusted CORRA/CDOR + 1.25%, repaid Q4 2024 — — 400.0 399.7 448.8 8.5 448.5 8.6 8.9 9.1 Total debt $ 4,563.5 $ 4,555.9 $ 4,974.0 $ 4,964.5 Current 680.4 680.4 560.5 560.5 Non-current 3,883.1 3,875.5 4,413.5 4,404.0 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 121 23. Long-Term Debt Long-term debt includes the following: 1 The expected repayment date as defined in the series supplemental indenture. The carrying amount of long-term debt is net of debt issuance costs of $12.6 million (December 30, 2023 – $14.4 million). Senior and Subordinated Credit Card Asset-Backed Term Notes (GCCT) The asset-backed senior and subordinated term notes issued by GCCT are securitized by a co-ownership interest in a pool of loans receivable that are owing by selected credit card customer accounts of the Bank (Securitized Pool). These notes are recorded at amortized cost using the effective interest method. Subject to the payment of certain priority amounts, the senior asset-backed term notes of a series have recourse on a priority basis to the allocable collections from such series’ co-ownership interest in the Securitized Pool. The (C$ in millions) 2024 2023 Post employment benefits (Note 25) Derivatives (Note 34.2) 141.5 6.3 160.1 16.3 Other 23.4 13.6 $ 171.2 $ 190.0 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 122 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS subordinated asset-backed term notes of such series have recourse to such series’ allocable collections on a subordinated basis to the senior asset-backed term notes of such series in terms of the priority of payment of principal and, in some circumstances, interest. The entitlement of noteholders and other parties to such assets is governed by the priority and payment provisions set forth in GCCT’s Trust Indenture dated November 29, 1995, as amended, and the related series supplements under which the outstanding series of notes were issued as well as the series purchase agreements which set forth the Bank’s overcollateralization credit enhancement. Repayment of the principal of the series 2020-1, 2022-1, 2023-1 and 2024-1 asset-backed term notes is scheduled for the expected repayment dates indicated in the preceding table. None of the GCCT’s asset-backed term notes are otherwise early redeemable by GCCT or the Bank. During a contractual liquidation period prior to the expected repayment date of a particular series’ notes, collections from the Securitized Pool allocable to GCCT with respect to the liquidating series as well as all outstanding series in their revolving periods will be accumulated by the custodian. If any amount remained owing after the expected repayment date, collections from the Securitized Pool allocable to GCCT with respect to the liquidating series as well as any outstanding series in their revolving periods will be applied to pay such amount until a specified termination date. Principal repayments may commence earlier than a series’ expected repayment date (an amortization period) if certain events occur including: • the Bank (as seller or servicer) failing to make required payments to GCCT or failing to meet covenant or other contractual terms; • the performance of the Securitized Pool failing to achieve set criteria; and • insufficient credit card loans receivable in the Securitized Pool. None of these events occurred in the Bank’s year ended December 31, 2024 and December 31 2023. Medium-Term Notes and Debentures Medium-term notes and debentures are unsecured and those issued by the Company (except Series H) and CT REIT with initial terms greater than two years are redeemable by the Company or CT REIT, as applicable, in whole or in part, at any time, at the greater of par or a formula price based upon interest rates at the time of redemption. The $200.0 million Series H medium-term note was redeemable by the Company, in whole or in part, at any time on or after September 14, 2024, at par. Term Loan During the fourth quarter 2023, to partially fund the repurchase of Scotiabank’s 20% interest in CTFS Holdings Limited, the Company entered into a $400 million term loan, originally due April 2025. The term loan was repaid in December 2024. Mortgages Mortgages payable as at December 28, 2024 had a weighted average interest rate of 3.24 percent and a maturity date of March 1, 2026. 24. Other Long-Term Liabilities Other long-term liabilities include the following: Other primarily includes the long-term portion of share-based payment transactions. (C$ in millions) 2024 2023 Change in the present value of defined benefit obligation Defined benefit obligation, beginning of year $ 160.1 $ 146.7 Current service cost 1.5 1.4 Interest cost 7.2 7.4 Actuarial loss (gain) arising from changes in demographic assumptions (17.5) — Actuarial loss (gain) arising from changes in financial assumptions (3.3) 10.7 Actuarial loss (gain) arising from changes in experience assumptions (2.8) (1.9) Benefits paid (3.7) (4.2) Defined benefit obligation, end of year1 $ 141.5 $ 160.1 2024 2023 Defined benefit obligation, end of year: Discount rate 4.70 % 4.60 % Net benefit plan expense for the year: Discount rate 4.60 % 5.10 % NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 123 25. Employment Benefits Profit-Sharing Program The Company has a profit-sharing program for certain employees. The amount awarded to employees is contingent on the Company’s profitability but shall be equal to at least one percent of the Company’s previous year’s net profits after income tax. A portion of the award (Base Award) is contributed to a Deferred Profit Sharing Plan (DPSP) for the benefit of the employees. The maximum amount of the Company’s Base Award contribution to the DPSP per employee per year is subject to limits set by the Income Tax Act. Each participating employee is required to invest and maintain 10 percent of the Base Award in a Company share fund of the DPSP. The share fund holds both Common Shares and Class A Non-Voting Shares. The Company’s contributions to the DPSP, with respect to each employee, vest 20 percent after one year of continuous service and 100 percent after two years of continuous service. In 2024, the Company contributed $32.9 million (December 30, 2023 – $31.1 million) under the terms of the DPSP. Post Employment Benefits: Defined Benefit Plan The Company provides certain health care, dental care, life insurance, and other benefits to certain retired employees pursuant to the Company’s policies. The Company does not have a pension plan. Information about the Company’s defined benefit plan is as follows: 1 The accrued benefit obligation is not funded because funding is provided when benefits are paid. Accordingly, there are no plan assets. Significant actuarial assumptions used: To measure the defined benefit obligation, a 2.84 percent weighted average health care cost trend rate is assumed for 2024 (December 30, 2023 – 3.26 percent). The rate is assumed to decrease gradually to 1.67 percent for 2040 and remain at that level thereafter. The most recent actuarial valuation of the obligation was performed as of December 28, 2024. The cumulative amount of actuarial losses before tax recognized in equity at December 28, 2024, was $7.0 million (December 30, 2023 – $30.6 million). Sensitivity Analysis: The Company’s defined benefit plan is exposed to actuarial risks such as the health care cost trend rate, the discount rate and the life expectancy assumptions. The following table provides the sensitivity of the defined (C$ in millions) 2024 Sensitivity analysis Accrued benefit obligation A fifty basis point change in assumed discount rates Increase Decrease $ (9.2) $ 10.3 A one-percentage-point change in assumed health care cost trend rates 10.9 (9.1) A one-year change in assumed life expectancy 3.2 (3.2) (C$ in millions) 2024 2023 Authorized 3,423,366 Common Shares 100,000,000 Class A Non-Voting Shares Issued 3,423,366 Common Shares (2023 – 3,423,366) $ 0.2 $ 0.2 52,197,823 Class A Non-Voting Shares (2023 – 52,197,823) 625.7 598.5 $ 625.9 $ 598.7 (C$ in millions) 2024 2023 Number $ Number $ Shares outstanding at beginning of the year 52,197,823 $ 598.5 54,276,998 $ 587.6 Issued under the dividend reinvestment plan 204,758 29.6 178,555 27.9 Repurchased1 (204,758) (29.8) (2,257,730) (376.1) Change in accrued liability for ASPP commitment — — — 8.1 Excess of repurchase price over average cost — 27.4 — 351.0 Shares outstanding at end of the year 52,197,823 $ 625.7 52,197,823 $ 598.5 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 124 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS benefit obligation to these assumptions. For each sensitivity test, the impact of a reasonably possible change in a single factor is shown with other assumptions left unchanged. The weighted-average duration of the defined benefit plan obligation at December 28, 2024 is 13.8 years (December 30, 2023 – 14.3 years). 26. Share Capital Share capital consists of the following: All issued shares are fully paid. The Company does not hold any of its Common or Class A Non-Voting Shares. Neither the Common nor Class A Non-Voting Shares have a par value. During 2024 and 2023, the Company issued and repurchased Class A Non-Voting Shares. The Company’s Class A Non-Voting Share repurchases were made pursuant to its Normal-Course Issuer Bid (NCIB) program, in connection with its anti-dilutive policy and announced share repurchase intention. The following transactions occurred with respect to Class A Non-Voting Shares during 2024 and 2023: 1 Repurchased shares, pursuant to the Company’s NCIB program, have been restored to the status of authorized but unissued shares. The Company records shares repurchased on a transaction date basis. The dilutive effect of employee stock options is 140,964 (December 30, 2023 – 228,770). Material Characteristics of Common Shares The holders of Common Shares of CTC are entitled to vote at all meetings of holders of Common Shares, including the election of 13 of the 16 Directors to be elected at the upcoming annual meeting of shareholders and the appointment of the external auditor. Each Common Share carries one vote. In addition, each holder of Common Shares at any time is entitled to have all or any number of the Common Shares held by such holder NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 125 converted into Class A Non-Voting Shares on the basis of one Class A Non-Voting Share for each Common Share. The foregoing is a summary of certain conditions attached to the Common Shares of CTC and is qualified by reference to CTC's articles of amendment dated December 15, 1983, which are available on SEDAR+ at https://www.sedarplus.ca and on the Company’s website at https://corp.canadiantire.ca. Material Characteristics of Class A Non-Voting Shares The holders of Class A Non-Voting Shares of CTC are entitled to vote on the election of three of the 16 Directors to be elected at the upcoming annual meeting of shareholders. With the exception of (i) the entitlement to vote for the election of three Directors, or, if the number of directors of CTC exceeds 17, one-fifth of the Directors of CTC, calculated to the nearest whole number, (ii) the entitlement to vote in the circumstances referred to under the heading “Change in Class A Non-Voting Shares and Common Shares” below, and, (iii) as provided under applicable law, the holders of Class A Non-Voting Shares are not entitled as such to vote at any meeting of shareholders of CTC. Subject to the foregoing, each Class A Non-Voting Share carries one vote. However, the articles of CTC provide that in the event an offer to purchase Common Shares is made to all or substantially all holders of Common Shares or is required by law or by the TSX to be made to all holders of Common Shares in Ontario (other than an offer to purchase both classes of shares at the same price per share and on the same terms and conditions) and a majority of the Common Shares then issued and outstanding are tendered to and taken up by the party making the offer, the holders of Class A Non-Voting Shares will thereafter be entitled to one vote per share at all shareholder meetings and the Class A Non-Voting Shares shall be designated as “Class A Shares”. The Common Shares and Class A Non-Voting Shares are each generally voted separately as a class. As a result, aggregating the voting rights attached to the Common Shares and Class A Non-Voting Shares is not relevant to any corporate action currently contemplated. The foregoing is a summary of certain conditions attached to the Class A Non-Voting Shares of CTC and is qualified by reference to CTC’s articles of amendment dated December 15, 1983, which are available on SEDAR+ at https://www.sedarplus.ca and on the Company’s website at https:// corp.canadiantire.ca. Rights Upon Liquidation, Dissolution or Winding Up In the event of the liquidation, dissolution or winding up of CTC, whether voluntary or involuntary, or any other distribution of assets of CTC among its shareholders for the purpose of winding up its affairs, all of the property of CTC available for distribution to the holders of Class A Non-Voting Shares and the holders of Common Shares shall be paid or distributed equally share for share to the holders of Class A Non-Voting Shares and to the holders of Common Shares without preference or distinction or priority of one share over another. Change in Class A Non-Voting Shares and Common Shares Except as provided above, neither the Class A Non-Voting Shares nor the Common Shares shall be changed in any manner whatsoever whether by way of subdivision, consolidation, reclassification, exchange or otherwise unless contemporaneously therewith the other class of shares is changed in the same manner and in the same proportion. Also, the authorized number of Common Shares and Class A Non-Voting Shares cannot be increased without the prior approval of the holders of at least two-thirds of the shares of each such class represented and voted at a meeting of shareholders called for the purpose of considering such an increase. Dividends Dividend Rights When fixed cumulative preferential dividends aggregating one cent per share per annum have been paid or declared and set apart for payment on all of the outstanding Class A Non-Voting Shares with respect to the current year and each preceding year and a non-cumulative dividend aggregating one cent per share per annum has been paid or declared and set apart for payment on all of the outstanding Common Shares with respect to the current year, any and all additional dividends, including stock dividends or other distributions to shareholders, will be paid or declared and set apart for payment or otherwise distributed in equal amounts per share on all Class A Non-Voting Shares and all Common Shares at the time outstanding without preference or distinction or priority of one share over another. 2024 Weighted average exercise price Number of options 2023 Number of options Weighted average exercise price Outstanding at beginning of year 1,150,597 $ 146.44 1,293,009 $ 132.26 Granted Exercised and surrendered1 588,046 (117,186) 132.87 90.28 256,735 (336,595) 167.31 102.62 Forfeited (151,244) 162.94 (62,552) 174.87 Outstanding at end of year 1,470,213 $ 143.79 1,150,597 $ 146.44 Stock options exercisable at end of year 290,738 314,529 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 126 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS Dividend Information As of December 28, 2024, the Company had dividends declared and payable to holders of Class A Non-Voting Shares and Common Voting Shares of $98.7 million (December 30, 2023 – $97.3 million) at a rate of $1.7750 per share (December 30, 2023 – $1.7500 per share). On February 12, 2025, the Company’s Board of Directors declared a dividend of $1.7750 per share payable on June 1, 2025 to shareholders of record as of April 30, 2025. Dividends per share declared were $7.0250 in 2024 (December 30, 2023 – $6.9250). 27. Share-Based Payments The Company’s share-based payment plans are described below. Stock Options The Company granted stock options to certain employees that enable such employees to exercise those stock options and subscribe for Class A Non-Voting Shares or surrender their options and receive a cash payment. Such cash payment is calculated as the difference between the fair market value of Class A Non-Voting Shares as at the surrender date and the exercise price of the option. Stock options vest over a three-year period. All outstanding stock options have a term of seven years. At December 28, 2024, and December 30, 2023, the aggregate number of Class A Non-Voting Shares authorized for issuance under the stock option plan was 3,387,702. Stock option transactions during 2024 and 2023 were as follows: 1 The weighted average market price of the Company's shares when the options were exercised in 2024 was $150.50 (December 30, 2023 – $170.50). Options outstanding Options exercisable Weighted average remaining contractual life1 Weighted average exercise price Number of outstanding options Number of exercisable options Range of exercise prices $ 187.25 176,431 4.25 — $ — 177.09 66,009 0.16 — — 173.14 158,566 3.22 — — 167.80 215,637 5.24 — — 144.35 77,951 1.16 77,951 144.35 132.87 562,832 6.22 — — 80.49 212,787 2.23 212,787 80.49 $ 80.49 to 187.25 1,470,213 4.40 290,738 $ 97.61 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 127 The following table summarizes information about stock options outstanding and exercisable at December 28, 2024: 1 Weighted average remaining contractual life is expressed in years. Performance Share Units (PSUs) and Performance Units (PUs) The Company grants PSUs to certain of its employees that generally vest after three years. Each PSU entitles the participant to receive a cash payment equal to the fair market value of the Company’s Class A Non-Voting Shares on the date set out in the PSU plan, multiplied by a factor determined by specific performance-based criteria and a relative total shareholder return modifier. CT REIT grants PUs to certain of its employees that generally vest after three years. Each PU entitles the participant to receive a cash payment equal to the fair market value of units of CT REIT on the date set out in the PU plan, multiplied by a factor determined by specific performance-based criteria. Restricted Share Units (RSUs) and Restricted Units (RUs) The Company grants RSUs to certain of its employees that generally vest on a graduated basis, with one-third vesting each year on the anniversary date of the grant. Each RSU entitles the participant to receive a cash payment equal to the fair market value of the Company’s Class A Non-Voting Shares on the date set out in the RSU plan. CT REIT offers a RU plan for its Executives. RUs may be issued as discretionary grants or, Executives may elect to receive all or a portion of their annual bonus in RUs. At the end of the vesting period, which is generally three years from the date of grant (in the case of discretionary grants) and five years from the annual bonus payment date (in the case of deferred bonus), an Executive receives an equivalent number of units issued by CT REIT or, at the Executive’s election, the cash equivalent thereof. Deferred Share Units (DSUs) and Deferred Units (DUs) The Company offers DSU plans to certain of its Executives and to members of its Board of Directors. Under the Executives’ DSU plan, eligible Executives may elect to receive all or a portion of their annual bonus in DSUs. The Executives’ DSU plan also provides for the granting of discretionary DSUs. Under the Directors’ DSU plan, eligible Directors may defer all or a portion of their annual director fees into DSUs. DSUs received under both the Executives’ and Directors’ DSU plans are settled in cash following termination of service with the Company and/or the Board based on the fair market value of the Company’s Class A Non-Voting Shares on the settlement date. CT REIT also offers a DU plan for members of its Board of Trustees. Under this plan, eligible trustees may elect to receive all or a portion of their annual trustee fees in DUs. DUs are settled through the issuance of an equivalent number of units of CT REIT or, at the election of the trustee, cash, following termination of service with the Board. Stock options 2024 2023 PSUs RSUs Stock options PSUs RSUs Share price at end of year (C$) $ 152.87 $ 152.87 $ 152.87 $ 140.72 $ 140.72 $ 140.72 Weighted average exercise price (C$) 1 $ 144.45 N/A N/A $ 145.09 N/A N/A Expected remaining life (years) 3.6 2.0 1.0 3.1 0.6 1.0 Expected dividends 4.3 % 4.4 % 4.3 % 5.1 % 6.8 % 5.0 % Expected volatility2 24.9 % 21.5 % 18.4 % 26.4 % 24.2 % 23.0 % Risk-free interest rate 2.8 % 2.8 % 3.0 % 4.0 % 5.2 % 5.0 % (C$ in millions) 2024 2023 Expense (recovery) arising from share-based payment transactions $ 38.1 $ 47.3 Effect of hedging arrangements (10.9) (5.7) Total expense included in Net income $ 27.2 $ 41.6 2024 2023 Financial Services Adjust- ments Financial Services Adjust- ments (C$ in millions) Retail CT REIT Total Retail CT REIT Total Sale of goods $ 14,222.1 $ — $ — $ — $ 14,222.1 $ 14,573.1 $ — $ — $ — $ 14,573.1 Interest income on loans receivable 35.5 1,332.4 — (13.6) 1,354.3 31.9 1,265.0 — (19.1) 1,277.8 Royalties and licence fees 60.1 — — — 60.1 64.4 — — — 64.4 Services rendered 14.8 175.9 — — 190.7 17.1 190.5 — (5.5) 202.1 Rental income 469.0 — 61.6 — 530.6 480.6 — 58.5 — 539.1 $ 14,801.5 $ 1,508.3 $ 61.6 $ (13.6) $ 16,357.8 $ 15,167.1 $ 1,455.5 $ 58.5 $ (24.6) $ 16,656.5 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 128 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS All Plans The fair value of stock options, PSUs and RSUs at the end of the year was determined using the Black-Scholes option pricing model with the following inputs: 1 Reflects expected forfeitures. 2 Reflects historical volatility over a period of time similar to the remaining life of the stock options, which may not necessarily be the actual outcome. Service and non-market performance conditions attached to the transactions are not considered in determining fair value. The Company enters into equity derivative transactions to hedge share-based payments and does not apply hedge accounting. The expense recognized for share-based compensation is summarized as follows: The total carrying amount of liabilities for share-based payment transactions at December 28, 2024, was $78.4 million (December 30, 2023 – $66.2 million). The intrinsic value of the liability for vested benefits at December 28, 2024, was $35.8 million (December 30, 2023 – $36.2 million). 28. Revenue External revenue by reportable operating segment is as follows: (C$ in millions) 2024 2023 Canadian Tire $ 8,452.6 $ 8,699.3 SportChek 1,897.7 1,952.3 Mark’s 1,523.3 1,532.0 Helly Hansen1 841.7 837.2 Petroleum 2,076.6 2,131.1 Other and intersegment eliminations1 9.6 15.2 $ 14,801.5 $ 15,167.1 (C$ in millions) 2024 2023 Inventory cost of sales1 $ 10,024.8 $ 10,324.0 Net impairment loss on loans receivable 509.2 449.6 Finance costs on deposits 136.9 106.3 Other 68.2 73.0 $ 10,739.1 $ 10,952.9 (C$ in millions) 2024 2023 Personnel expenses $ 1,603.2 $ 1,677.1 Occupancy 505.9 523.9 Marketing and advertising 413.4 398.2 Information systems 379.5 348.2 Other 651.3 728.3 $ 3,553.3 $ 3,675.7 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 129 Retail revenue breakdown is as follows: 1 Helly Hansen revenue represents external revenue only. Major Customers The Company does not rely on any one customer. 29. Cost of Producing Revenue Cost of producing revenue consists of the following: 1 Inventory cost of sales includes depreciation for the year ended December 28, 2024 of $22.9 million (December 30, 2023 – $31.0 million). Inventory write-downs, as a result of net realizable value being lower than cost, recognized in the year ended December 28, 2024 were $93.7 million (December 30, 2023 – $127.1 million). Inventory write-downs recognized in prior periods and reversed in the year ended December 28, 2024 were $9.3 million (December 30, 2023 – $8.9 million). The reversal of write-downs was the result of actual losses being lower than previously estimated. The write-downs and reversals are included in Inventory cost of sales, with the exception of the write-downs resulting from the 2023 fire at the A.J. Billes Distribution Centre which were recognized in Other expense (income) in the Consolidated Statements of Income. 30. Selling, General and Administrative Expenses Selling, general and administrative expenses consist of the following: (C$ in millions) 2024 2023 Depreciation of property and equipment and investment property1 $ 314.1 $ 288.1 Depreciation of right-of-use assets1 327.9 356.1 Amortization of intangible assets 120.2 127.0 $ 762.2 $ 771.2 (C$ in millions) 2024 2023 Finance costs 289.3 259.8 Finance costs on lease liabilities 103.8 101.5 Finance (income) $ (38.7) $ (35.2) Finance (income) on lease receivables (5.4) (4.6) $ 321.5 (C$ in millions) 2024 Lease liabilities Deposits Long-term debt Balance, beginning of year $ 2,364.5 $ 3,364.3 $ 4,964.5 Cash changes: Payment of lease liabilities (principal portion) Change in deposits — 187.8 — (349.3) — — Long-term debt issuance — — 550.0 Long-term debt repayment — — (960.0) Mortgage repayment Payment of transaction costs related to long-term debt — — (2.0) — — (0.4) Total changes from financing cash flows (349.3) 187.8 (412.4) Non-cash and other changes: New leases, interest accretion, currency translation adjustment and other 474.9 — 0.1 Amortization of broker commission — 5.3 — Amortization of debt issuance costs — — 3.7 Balance, end of year $ 2,490.1 $ 3,557.4 $ 4,555.9 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 130 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 31. Depreciation and Amortization 1 Inventory cost of sales includes depreciation for the year ended December 28, 2024 of $22.9 million (December 30, 2023 – $31.0 million). 32. Net Finance Costs Net finance costs consists of the following: $ 349.0 33. Notes to the Consolidated Statements of Cash Flows Changes in liabilities arising from financing activities comprise the following: (C$ in millions) Lease liabilities Deposits Long-term debt Balance, beginning of year $ 2,407.6 $ 2,965.7 $ 4,257.7 Cash changes: Payment of lease liabilities (principal portion) (425.2) — — Change in deposits — 393.5 — Long-term debt issuance — — 1,750.0 Long-term debt repayment — — (984.0) Mortgage repayment — — (56.1) Payment of transaction costs related to long-term debt — — (6.0) Total changes from financing cash flows (425.2) 393.5 703.9 Non-cash and other changes: New leases, interest accretion, currency translation adjustment and other 382.1 — (0.6) Amortization of broker commission — 5.1 — Amortization of debt issuance costs — — 3.5 Balance, end of year $ 2,364.5 $ 3,364.3 $ 4,964.5 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 131 2023 33.1 Cash and Marketable Investments Held in Reserve Cash and marketable investments includes reserves held by the Financial Services segment in support of its liquidity and regulatory requirements. As at December 28, 2024, reserves held by Financial Services totalled $361.6 million (December 30, 2023 – $404.5 million) and includes restricted cash disclosed in Note 7 as well as short-term investments. 34. Financial Instruments 34.1 Fair Value of Financial Instruments Fair values have been determined for measurement and/or disclosure purposes based on the following: Cash and cash equivalents, Trade and other receivables, Loans receivable, Bank indebtedness, Trade and other payables, Short-term borrowings, and Loans are carried at amounts that approximate their fair value either due to their short-term nature or because they are derivatives carried at fair value. Long-term receivables and other assets are carried at amounts that approximate their fair value because their carrying amounts reflect current market interest rates or because they are derivatives carried at fair value. Fair values of financial instruments reflect the credit risk of the Company and counterparties when appropriate. Investments in Debt Securities The fair values of financial assets are determined using a combination of discounted cash flow models using inputs for which market-observable prices exist, and where available, comparison to similar instruments and other valuation models. Derivatives The fair value of derivatives is estimated using readily observable market inputs and standard valuation models, as follows: Foreign exchange forward contracts are estimated by discounting the difference between the contractual forward price and the current forward price and applying a risk-free rate to reflect the maturity of the contract. Interest rate swaps and swaptions, are estimated using data inputs on the measurement date and are verified against external valuation sources. (C$ in millions) 2024 2023 Category Level Level Trade and other receivables FVTPL1 2 $ 38.3 2 $ 14.0 Trade and other receivables Effective hedging instruments 2 155.1 2 62.7 Long-term receivables and other assets Effective hedging instruments 2 59.2 2 44.8 Trade and other payables FVTPL1 2 6.8 2 34.9 Trade and other payables Effective hedging instruments 2 8.3 2 28.6 Other long-term liabilities FVTPL1 2 3.2 2 0.8 Other long-term liabilities Effective hedging instruments 2 3.1 2 15.5 Net Asset (Liability) position $ 231.2 $ 41.7 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 132 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS Equity derivatives are calculated referencing share price movements adjusted for interest, using market interest rates specific to the terms of the underlying derivative contracts, and are verified against external valuation sources. Redeemable Financial Instrument From October 1, 2014 through October 31, 2023, Scotiabank held an option to sell, requiring the Company to purchase, all of their interest in CTFS Holdings Limited. As a result, the Company recognized a redeemable financial instrument, held at FVTPL, through October 31, 2023. During the third quarter of 2023, the Company remeasured the redeemable financial instrument, resulting in a $328.0 million charge in the Consolidated Statements of Income. On October 31, 2023, the Company repurchased the outstanding 20 percent interest in CTFS Holdings Limited for $895.0 million. The transaction extinguished the Company’s redeemable financial instrument through retained earnings. 34.2 Fair Value of Financial Assets and Financial Liabilities Classified Using the Fair Value Hierarchy The Company uses a fair value hierarchy to categorize the inputs used to measure the fair value of financial assets and financial liabilities, the levels of which are: Level 1 – Inputs are unadjusted quoted prices of identical instruments in active markets; Level 2 – Inputs are other than quoted prices included in Level 1 but are observable for the asset or liability, either directly or indirectly; and Level 3 – Inputs are not based on observable market data. The following table presents the financial instruments measured at fair value classified by the fair value hierarchy: 1 Relates to derivatives not designated as hedging instruments. There were no transfers in either direction between levels for the financial instruments remaining at the end of the reporting period in 2024 or 2023 with the exception of the redeemable financial instrument transferred from Level 3 to Level 2 during the third quarter of 2023. As at (C$ in millions) December 28, 2024 December 30, 2023 Carrying amount Fair value Carrying amount Fair value Short-term investments $ 128.4 $ 128.7 $ 177.2 $ 177.8 Long-term investments 72.8 73.8 108.2 110.0 Long-term debt1 4,555.9 4,668.2 4,964.5 4,950.1 Deposits 3,557.4 3,641.6 3,364.3 3,355.5 (C$ in millions) 2024 2023 Net (loss) gain on: Financial instruments designated and/or classified as FVTPL1 $ (30.8) $ (320.0) Interest income (expense): Total interest income calculated using effective interest method for financial instruments that are not at FVTPL 1,392.1 1,312.8 Total interest expense calculated using effective interest method for financial instruments that are not at FVTPL (418.4) (357.0) Fee expense arising from financial instruments that are not at FVTPL: Other fee expense (26.4) (18.9) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 133 34.3 Fair Value Measurement of Investments, Debt, and Deposits The fair value measurement of investments, debt and deposits is categorized within Level 2 of the fair value hierarchy (refer to Note 34.2). The fair values of the Company’s investments, debt and deposits compared to the carrying amounts are as follows: 1 Includes current portion of Long-term debt. The difference between the fair values and the carrying amounts (excluding transaction costs, which are included in the carrying amount of debt) is due to changes in market interest rates for similar instruments. The fair values are determined by discounting the associated future cash flows using current market interest rates for items of similar risk. 34.4 Items of Income, Expense, Gains or Losses The following table presents certain amounts of income, expense, gains, or losses, arising from financial instruments that were recognized in Net income or equity: 1 Excludes gains (losses) on cash flow hedges, which are effective hedging relationships and are reflected on the Consolidated Statements of Comprehensive Income. 35. Guarantees and Commitments Guarantees In the normal course of business, the Company enters into numerous agreements that may contain features that meet the definition of a guarantee. A guarantee is defined to be a contract (including an indemnity) that contingently requires the Company to make payments to the guaranteed party based on (i) changes in an underlying interest rate, foreign exchange rate, equity or commodity instrument, index or other variable that is related to an asset, a liability or an equity security of the counterparty; (ii) failure of another party to perform under an obligating agreement; or (iii) failure of a third party to pay its indebtedness when due. The Company has provided the following significant guarantees and other commitments to third parties: Standby Letters of Credit Franchise Trust, a legal entity sponsored by a third-party bank, originates loans to certain Dealers for their purchase of Canadian Tire store inventory and fixed assets. While Franchise Trust is consolidated as part of these financial statements, the Company has arranged for several major Canadian banks to provide standby LCs to Franchise Trust to achieve the required “AAA” equivalent credit rating of the funding of the Dealer loan portfolio. Franchise Trust has sold all its rights in the LCs to the Co-owner Trusts. Franchise Trust, on behalf of the Co- NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 134 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS owner Trusts, may draw against the LCs in certain pre-defined circumstances. Should a draw be made against an LC, the Company agrees to reimburse the bank issuing such standby LC for the amount so drawn. The Company has not recorded any liability for these amounts due to there having been no historical draws made by Franchise Trust under such LCs, the credit quality of the Dealer loans, and the nature of the underlying collateral represented by the inventory and fixed assets of the borrowing Dealers. The Company’s maximum exposure as at December 28, 2024 under the LCs was $136.1 million (December 30, 2023 – $119.4 million). The Company has obtained documentary and standby LCs aggregating $37.2 million (December 30, 2023 – $24.9 million) relating to the importation of merchandise inventories and to facilitate various real estate activities. Business and Property Dispositions In connection with agreements for the sale of all or part of a business or property and in addition to indemnifications relating to failure to perform covenants and breach of representations and warranties, the Company has agreed to indemnify the purchasers against claims from its past conduct, including environmental remediation. Typically, the term and amount of such indemnification will be determined by the parties in the agreements. The nature of these indemnification agreements prevents the Company from estimating the maximum potential liability required to be paid to counterparties. Historically, the Company has not made any significant payments under such additional indemnification agreements and any related unpaid accruals are minimal at the end of the fiscal year in the consolidated financial statements. Lease Agreements Guarantees The Company has guaranteed leases on certain franchise stores in the event the franchisees are unable to meet their remaining lease commitments. These lease agreements have expiration dates through October 2033. The maximum amount that the Company may be required to pay under these agreements is $4.8 million (December 30, 2023 – $5.4 million). In addition, the Company could be required to make payments for percentage rents, realty taxes, and common area costs. No amount has been accrued in the consolidated financial statements with respect to these lease agreements. Third-Party Financial Guarantees The Company has guaranteed certain bank loans of certain Dealers. These third-party financial guarantees require the Company to make payments if the Dealer fails to make scheduled debt payments. The majority of these third-party financial guarantees have expiration dates extending up to and including January 2027 and any extension is at the Company’s discretion. The Company’s maximum exposure as at December 28, 2024 under these financial guarantees was $15.6 million (December 30, 2023 – $7.2 million). The Company has entered into agreements to buy back certain franchisee-owned merchandise inventory should the banks foreclose on any of the applicable franchisees. The initial terms of the buy-back agreements are for one year and any extension is at the Company’s discretion. The Company’s maximum exposure as at December 28, 2024 under these buy-back agreements was $24.6 million (December 30, 2023 – $19.1 million). No amount has been accrued in the consolidated financial statements with respect to these guarantees and buy- back agreements. Indemnification of Lenders and Agents Under Credit Facilities In the ordinary course of business, the Company has agreed to indemnify its lenders under various credit facilities against costs or losses resulting from changes in laws and regulations that would increase the lenders’ costs and from any legal action brought against the lenders relating to the use of the loan proceeds. These indemnifications generally extend for the term of the credit facilities and do not provide any limit on the maximum potential liability. Historically, the Company has not made any significant indemnification payments under such agreements and no amount has been accrued in the consolidated financial statements with respect to these indemnification agreements. Other Indemnification Agreements In the ordinary course of business, the Company provides other additional indemnification agreements to counterparties in transactions such as lease transactions, service arrangements, investment banking agreements, securitization agreements, indemnification of trustees under indentures for outstanding public debt, Director and (C$ in millions) 2024 2023 Salaries and short-term employee benefits $ 17.5 $ 16.4 Share-based payments and other 11.4 9.0 $ 28.9 $ 25.4 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 135 Officer indemnification agreements, escrow agreements, price escalation clauses, sales of assets (other than dispositions of businesses noted) and the arrangements with Franchise Trust noted. These additional indemnification agreements require the Company to compensate the counterparties for certain amounts and costs incurred, including costs resulting from changes in laws and regulations (including tax legislation) or as a result of litigation claims or statutory sanctions that may be suffered by a counterparty as a consequence of the transaction. The terms of these additional indemnification agreements vary based on the contract and do not provide any limit on the maximum potential liability. Historically, the Company has not made any significant payments under such additional indemnifications and no amount has been accrued in the consolidated financial statements with respect to these additional indemnification commitments. The Company’s exposure to credit risks related to the above-noted guarantees are disclosed in Note 5. Capital and Other Commitments As at December 28, 2024, the Company had capital commitments for the acquisition of property and equipment, investment property and intangible assets for an aggregate cost of approximately $122.4 million (December 30, 2023 – $173.8 million). As at December 28, 2024 the Company had other commitments of $2.5 million (December 30, 2023 – $3.9 million). 36. Related Parties Martha Billes and Owen Billes, in aggregate, beneficially own, or control or direct approximately 61.4 percent of the Common Shares of the Company through two privately held companies, Tire ‘N’ Me Pty. Ltd. and Albikin Management Inc. Transactions with Dealer members of the Company’s Board of Directors represented less than one percent of the Company’s total revenue and were in accordance with established Company policy applicable to all Dealers. Other transactions with related parties, as defined by IFRS Accounting Standards, were not significant during the year. The following outlines the compensation of the Company’s Board of Directors and key Management personnel (the Company’s Chief Executive Officer, Chief Financial Officer and certain other Senior Officers): 2024 Quarterly Information (C$ in millions, except where noted) First Quarter (December 31, 2023 to March 30, 2024) Second Quarter (March 31, 2024 to June 29, 2024) Third Quarter (June 30, 2024 to September 28, 2024) Fourth Quarter (September 29, 2024 to December 28, 2024) Total (Store numbers are cumulative at end of period) Retail segment Revenue Income before income taxes 0.6 170.1 164.8 436.7 772.2 CT REIT segment Revenue 144.2 144.5 144.6 145.4 578.7 Income before income taxes Financial Services segment Revenue Income before income taxes 95.7 88.5 110.3 67.5 362.0 $ 3,136.6 101.1 389.0 $ 3,754.8 103.3 383.2 $ 3,797.8 94.5 399.1 $ 4,123.2 135.3 388.9 $ 14,812.4 434.2 1,560.2 Total Revenue $ 3,524.9 $ 4,132.7 $ 4,192.9 $ 4,507.3 $ 16,357.8 Cost of producing revenue 2,274.7 2,725.4 2,761.3 2,977.7 10,739.1 Other expense (income) (0.9) (12.5) (35.4) (243.0) (291.8) Selling, general and administrative expenses 848.2 844.5 892.9 967.7 3,553.3 Depreciation and amortization 190.6 189.9 189.5 192.2 762.2 Net finance costs 90.5 89.6 85.3 83.6 349.0 Income taxes 25.8 72.3 78.6 97.4 274.1 Net income 96.0 223.5 220.7 431.7 971.9 Net income attributable to shareholders of Canadian Tire Corporation 76.8 198.8 200.6 411.5 887.7 Net income attributable to non-controlling interests 19.2 24.7 20.1 20.2 84.2 Basic EPS1 1.38 3.57 3.61 7.40 15.96 Diluted EPS 1.38 3.56 3.59 7.37 15.92 1 Canadian Tire Retail sales growth2, 9 (0.7) % (5.5) % (2.0) % 1.3 % (1.9) % Comparable sales growth3, 9 (0.6) % (5.6) % (2.2) % 1.1 % (2.0) % Number of Canadian Tire stores 502 502 502 502 Number of Other Canadian Tire stores4 161 165 169 169 SportChek Retail sales growth5 (7.5) % (1.7) % 2.0 % 0.2 % (1.3) % Comparable sales growth3 Number of SportChek stores 369 367 367 371 (6.5) % (0.9) % 2. 9 % 0. 4 % (0.7) % Canadian Tire Petroleum Number of gas bars 280 278 278 279 Mark’s Retail sales growth6 (1.5) % (0.9) % (2.0) % 2.4 % 0.0 % Comparable sales growth3 (1.2) % (0.8) % (2.3) % 1.8 % (0.1) % Number of Mark’s stores 380 382 383 383 Financial Services segment Average number of accounts with a balance (thousands)7 2,293 2,315 2,331 2,335 2,318 Average account balance ($)7, 9 3,177 3,160 3,187 3,197 3,180 Gross average accounts receivable (millions)8 7,284 7,316 7,429 7,465 7,374 136 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 2024 Quarterly Information CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 137 First Quarter Second Quarter Third Quarter Fourth Quarter (December 31, (March 31, 2024 (June 30, 2024 (September 29, 2023 to March to June 29, to September 2024 to December (C$ in millions, except where noted) 30, 2024) 2024) 28, 2024) 28, 2024) Total Class A Non-Voting Shares High $ 150.16 $ 147.00 $ 162.46 $ 163.00 $ 163.00 Low 128.88 126.25 134.37 147.39 126.25 Close 135.10 135.74 161.20 152.87 152.87 Volume (thousands of shares) 15,970 14,866 13,335 14,512 58,683 Common Shares High $ 282.00 $ 275.36 $ 244.44 $ 233.56 $ 282.00 Low 243.87 211.00 202.00 199.00 199.00 Close 248.00 221.50 220.10 199.00 199.00 Volume (thousands of shares) 12 14 12 13 51 1 Basic EPS is calculated by dividing the net income attributable to shareholders of Canadian Tire Corporation by the weighted average number of Common and Class A Non-Voting shares outstanding during the reporting period. Diluted EPS is calculated by dividing the net income attributable to shareholders of Canadian Tire Corporation by the weighted average number of shares outstanding adjusted for the effects of all dilutive potential equity instruments, which comprise employee stock options. 2 Retail sales growth includes sales from Canadian Tire, PartSource, PHL, Party City and the labour portion of Canadian Tire’s auto service sales. 3 Comparable sales growth excludes Petroleum. The Canadian Tire banner includes PartSource, PHL and Party City. Refer to section 10.2 in this MD&A for additional information on Comparable sales growth. 4 Other Canadian Tire banners include PartSource, PHL and Party City. 5 Retail sales include sales from both corporate and franchise stores. 6 Retail sales growth includes Retail sales from Mark’s corporate and franchise stores but excludes revenue relating to alteration and embroidery services. 7 Credit card portfolio only. 8 Total portfolio of loans receivable. 9 For further information about this measure see section 10.2 (Supplementary Financial Measures) of the Company’s MD&A included in this document. 138 CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 2023 Quarterly Information First Quarter Second Quarter Third Quarter Fourth Quarter (July 2, 2023 to September 30, 2023) (January 1, 2023 to April 1, 2023) (April 2, 2023 to July 1, 2023) (October 1, 2023 to December 30, 2023) Total (C$ in millions, except where noted) (Store numbers are cumulative at end of period) Retail segment Revenue $ 3,337.9 $ 3,896.1 $ 3,867.3 $ 4,070.0 $ 15,171.3 Income before income taxes (79.3) 85.6 239.0 161.7 407.0 Financial Services segment Revenue 369.8 364.5 393.1 379.9 1,507.3 Income before income taxes 118.7 55.4 125.7 85.2 385.0 CT REIT segment Revenue 137.5 137.8 137.5 140.0 552.8 Income before income taxes 70.5 109.4 11.3 38.3 229.5 Total Revenue $ 3,707.2 $ 4,255.8 $ 4,250.5 $ 4,443.0 $ 16,656.5 Cost of producing revenue 2,425.3 2,807.4 2,814.0 2,906.2 10,952.9 Other expense (income) 79.0 79.0 (126.8) 3.2 34.4 Selling, general and administrative expenses 871.2 929.3 891.7 983.5 3,675.7 Depreciation and amortization 192.1 188.8 194.0 196.3 771.2 Net finance costs 73.0 77.4 80.3 90.8 321.5 Change in fair value of redeemable financial instrument — — 328.0 — 328.0 Income taxes 23.8 47.0 97.1 65.8 233.7 Net income 42.8 126.9 (27.8) 197.2 339.1 Net income attributable to shareholders of Canadian Tire Corporation 7.8 99.4 (66.4) 172.5 213.3 Net income attributable to non-controlling interests 35.0 27.5 38.6 24.7 125.8 Basic EPS1 0.14 1.77 (1.19) 3.10 3.79 Diluted EPS1 0.13 1.76 (1.19) 3.09 3.78 Canadian Tire Retail sales growth2, 9 (4.9) % (0.1) % (0.9) % (6.9) % (3.1) % Comparable sales growth3, 9 (4.8) % 0. 1 % (0.6) % (6.8) % (2.9) % Number of Canadian Tire stores 504 503 502 502 Number of Other Canadian Tire stores4 161 161 161 161 SportChek Retail sales growth5 3.9 % (0.2) % (7.6) % (6.8) % (3.5) % Comparable sales growth3 3. 7 % 0.1 % (7.4) % (6.4) % (3.2) % Number of SportChek stores 372 370 370 371 Canadian Tire Petroleum Number of gas bars 282 282 282 281 Mark’s Retail sales growth6 5. 0 % 0.1 % (0.1) % (7.6) % (2.2) % Comparable sales growth3 4.8 % 0. 4 % 0.2 % (7.2) % (1.9) % Number of Mark’s stores 379 379 379 380 Financial Services segment Average number of accounts with a balance (thousands)7 2,278 2,319 2,338 2,340 2,319 Average account balance($)7, 9 3,059 3,057 3,084 3,118 3,080 Gross average accounts receivable (millions)8 6,971 7,089 7,212 7,294 7,141 2023 Quarterly Information CANADIAN TIRE CORPORATION 2024 REPORT TO SHAREHOLDERS 139 First Quarter Second Quarter Third Quarter Fourth Quarter (July 2, 2023 to (January 1, 2023 (April 2, 2023 to September 30, (October 1, 2023 to (C$ in millions, except where noted) to April 1, 2023) July 1, 2023) 2023) December 30, 2023) Total Class A Non-Voting Shares High $ 176.84 $ 185.89 $ 189.82 $ 148.61 $ 189.82 Low 142.72 162.51 143.64 131.46 131.46 Close 176.37 181.12 146.05 140.72 140.72 Volume (thousands of shares) 17,615 13,722 11,232 13,499 56,068 Common Shares High $ 336.00 $ 327.00 $ 300.00 $ 288.08 $ 336.00 Low 249.99 288.00 254.80 250.00 249.99 Close 327.00 288.00 285.00 280.00 280.00 Volume (thousands of shares) 13 5 14 11 43 1 Basic EPS is calculated by dividing the net income attributable to shareholders of Canadian Tire Corporation by the weighted average number of Common and Class A Non-Voting shares outstanding during the reporting period. Diluted EPS is calculated by dividing the net income attributable to shareholders of Canadian Tire Corporation by the weighted average number of shares outstanding adjusted for the effects of all dilutive potential equity instruments, which comprise employee stock options. 2 Retail sales growth includes sales from Canadian Tire, PartSource, PHL, Party City and the labour portion of Canadian Tire’s auto service sales. 3 Comparable sales growth excludes Petroleum. The Canadian Tire banner includes PartSource, PHL and Party City. Refer to section 10.2 in this MD&A for additional information on Comparable sales growth. 4 Other Canadian Tire banners include PartSource, PHL and Party City. 5 Retail sales include sales from both corporate and franchise stores. 6 Retail sales growth includes Retail sales from Mark’s corporate and franchise stores but excludes revenue relating to alteration and embroidery services. 7 Credit card portfolio only. 8 Total portfolio of loans receivable. 9 For further information about this measure see section 10.2 (Supplementary Financial Measures) of the Company’s MD&A included in this document. 9 0 Contact HEAD OFFICE CANADIAN TIRE CORPORATION, LIMITED 2180 Yonge Street P.O. Box 770, Station K Toronto, Ontario M4P 2V8 Canada Telephone: 416-480-3000 Website: http://corp.canadiantire.ca INVESTOR RELATIONS CONTACT Karen Keyes Head of Investor Relations karen.keyes@cantire.com Investor Relations: investor.relations@cantire.com MEDIA CONTACT Stephanie Nadalin Vice-President, Communications stephanie.nadalin@cantire.com Media Inquiries: mediainquiries@cantire.com REGISTRAR AND TRANSFER AGENT COMPUTERSHARE TRUST COMPANY OF CANADA 100 University Avenue, 8th floor Toronto, Ontario M5J 2Y1 Canada Toll-free (Canada and U.S.): 1-877-982-8768 Telephone (Global): 514-982-7122 Email: service@computershare.com This page has been left blank intentionally.