The following questions pertain to Canadian Tire's long-term debt:
a. How much long-term debt was outstanding on December 31, 2011? How much of that long-term debt was classified as current? What does it mean when long-term debt is classified as a current liability? What is the purpose of classifying long-term debt as current?
b. How much did Canadian Tire have outstanding from its Series 2008-1 senior notes on December 31, 2011? When does this debt mature? What is the interest rate on the debt? Why is it important and useful for stakeholders to know the maturity and interest rate associated with a loan obligation?
c. What was Canadian Tire's interest expense in fiscal 2010 and 2011? How much interest did Canadian Tire pay in those years? Why are the interest expense and the amount of interest paid different?
d. How much is scheduled to be repaid to lenders in each of the next five years? In examining the scheduled repayments, do you have any concerns? Explain.
e. In Note 26, Canadian Tire states, "The Company has provided covenants to certain of its lenders. The Company was in compliance with all of its covenants in 2011 and 2010." Why is this statement provided and do you find it useful?