Compute these ratios for each of the last three years.

Total Assets Turnover Ratio=sales (or operating) revenue/Average total assets

Return on Assets= Net earnings+Interest expense(net of tax)/Average total assets

Hello can you please show me how to calculate these based on the attached files and how you determined what numbers to use. Like where the interest expense is and net of tax because I'm having a hard time calculating these

Annual Report | 2013 Reitmans is Canada's leading specialty retailer. We are customer driven, value oriented and committed to excellence. By promoting innovation, growth, development and teamwork, we strive to serve our customers the best quality/value proposition in the marketplace. To Our Shareholders Fiscal 2013 was a most challenging and difficult year. In June 2012, the Company installed a new warehouse management system. Complications associated with the system resulted in a serious disruption in the flow of inventory to stores in the third quarter of fiscal 2013, resulting in significant declines in sales, gross margin and earnings before income taxes. Sales for fiscal 2013 (53 weeks) decreased 1.9% to $1,000,513,000 as compared with $1,019,397,000 for the year ended January 28, 2012 (52 weeks). This decrease in sales is due primarily to a net reduction of 31 stores in fiscal 2013 and lower store traffic in a challenging retail environment. The Company's gross margin for fiscal 2013 decreased to 62.8% from 64.4% for fiscal 2012. Net earnings for fiscal 2013 decreased 44.0% to $26,619,000 ($0.41 diluted earnings per share) as compared with $47,539,000 ($0.72 diluted earnings per share) for fiscal 2012. For fiscal 2013, adjusted EBITDA decreased by $35,837,000 or 28.3% to $90,951,000 as compared with $126,788,000 for fiscal 2012. During the year, the Company opened 54 new stores, closed 85 and remodelled 54 stores at a capital cost of $74,000,000. Accordingly, at February 2, 2013, there were 911 stores in operation, consisting of 361 Reitmans, 146 Smart Set, 73 RW&CO., 72 Thyme Maternity, 153 Penningtons and 106 Addition Elle, as compared with a total of 942 stores as at January 28, 2012. In addition, there were 20 Thyme Maternity boutiques (\"shop-in-shop\") in select Babies\"R\"Us locations in Canada and 154 boutiques in select Babies\"R\"Us stores in the United States. In fiscal 2014, we expect to open 30 new stores, close 25 stores and remodel 31 stores at a capital cost of $34,000,000. Management is disappointed with the results for fiscal 2013 and has taken action in the merchandising and marketing activities of each of its banners to improve sales and profitability. Additionally, the Company has undertaken an initiative to improve efficiencies and reduce overhead across head office and field functions. The Company has addressed the issues related to the warehouse management system and continues to improve the flow of goods to the stores and optimize system performance. We continue to upgrade our technology platform and distribution centre and to invest in our people with skills development and management training programs. Our cash resources and infrastructure allow us to seek out new business opportunities through acquisition and development. At the Board of Directors meeting held on April 4, 2013, a quarterly cash dividend (constituting eligible dividends) of $0.20 per share on all outstanding Class A non-voting and Common shares of the Company was declared payable April 25, 2013 to shareholders of record April 12, 2013. With regard to dividend policy, the Board of Directors considered the Company's earnings per share, cash flow from operations, the level of planned capital expenditures and its cash and marketable securities. The Board of Directors decided to maintain its quarterly dividend on the basis of a targeted payout ratio of approximately 50% to 80% of sustainable earnings per share, 50% to 75% of cash flow from operations and the ability to augment the dividend from the approximately $170,000,000 of liquidity on the Company's balance sheet, if these targets are missed in a given year. The Board of Directors will review these guidelines again at the end of its current fiscal year. The Company continues to execute its strategy of delivering fashionable clothing at excellent prices to Canadian consumers. We are proud of our achievements over the past 87 years and most confident of our future. We believe that we have the very best specialty retailing assets in Canada. Our operations are led and staffed by highly motivated, extremely competent professionals. I extend sincere thanks and appreciation to all our associates, suppliers, customers and shareholders. These are the people who have made possible our many years of success and on whom we rely for the continued growth of the Company. On behalf of the Board of Directors, (signed) Jeremy H. Reitman Chairman and Chief Executive Officer Montreal, April 4, 2013 The Year at a Glance Sales $1,000,513,000 Adjusted EBITDA\t1 -1.9% $90,951,000 -28.3% Pre-tax earnings $35,136,000 -46.7% Net earnings $26,619,000 -44.0% $0.41 -43.1% Earnings per share\t2 Cash and investments $169,256,000 -36.9% Stores 911 -3.3% These highlights include a reference to adjusted EBITDA, a non-GAAP financial measure. Adjusted EBITDA is defined as earnings before income taxes, dividend income, interest income, realized gains or losses on disposal of available-for-sale financial assets, impairment losses on available-for-sale financial assets, interest expense, depreciation, amortization and net impairment losses related to property and equipment. The Company believes this measure provides meaningful information on the Company's performance and operating results. However, readers should know that such a non-GAAP financial measure has no standardized meaning as prescribed by IFRS and may not be comparable to similar measures presented by other companies. Accordingly, it should not be considered in isolation. 1 Earnings per share on a fully diluted basis. 2 5-year Highlights For the years ended: (in thousands except per share amounts) (unaudited) 20131 20121 20111 20101 20091 SALES 1st Quarter 2nd\tQuarter 3rd\tQuarter 4th\tQuarter Total $\t217,094 279,513 236,247 267,659 $\t1,000,513 $\t219,296 286,075 254,072 259,954 $\t1,019,397 $\t235,745 292,026 262,515 268,714 $\t1,059,000 $\t231,652 286,071 270,684 268,120 $\t1,056,527 $\t228,318 289,502 271,240 261,801 $\t1,050,861 RESULTS FROM OPERATING ACTIVITIES 1st Quarter 2nd\tQuarter 3rd\tQuarter 4th\tQuarter Total $\t(110) 34,466 (893) (2,621) $\t30,842 $\t5,018 40,968 10,609 5,224 $\t61,819 $\t22,825 53,612 27,819 19,886 $\t124,142 $\t10,814 38,100 27,076 21,879 $\t97,869 $\t25,372 49,165 33,358 14,852 $\t122,747 NET EARNINGS (LOSS) 1st Quarter 2nd\tQuarter 3rd\tQuarter 4th\tQuarter Total $\t(53) 27,714 38 (1,080) $\t26,619 $\t624 31,680 10,561 4,674 $\t47,539 $\t15,770 38,706 20,692 13,817 $\t88,985 $\t7,801 26,426 18,921 14,088 $\t67,236 $\t18,436 35,385 23,004 8,981 $\t85,806 BASIC EARNINGS (LOSS) PER SHARE 1st Quarter 2nd\tQuarter 3rd\tQuarter 4th\tQuarter Total $\t0.00 0.42 0.00 (0.01) $\t0.41 $\t0.01 0.48 0.16 0.07 $\t0.72 $\t0.23 0.58 0.31 0.21 $\t1.33 $\t0.11 0.38 0.28 0.21 $\t0.98 $\t0.26 0.50 0.33 0.13 $\t1.21 NET EARNINGS BASIC EARNINGS PER SHARE $\t26,619 $\t0.41 $\t47,539 $\t0.72 $\t88,985 $\t1.33 $\t67,236 $\t0.98 $\t85,806 $\t1.21 SHAREHOLDERS' EQUITY PER SHARE $\t455,018 $\t7.05 $\t492,852 $\t7.51 $\t512,800 $\t7.73 $\t510,166 $\t7.55 $\t522,539 $\t7.43 911 942 968 977 973 DIVIDENDS PAID $\t52,068 $\t52,654 $\t51,895 $\t49,351 $\t50,885 STOCK PRICE AT YEAR-END CLASS A NON-VOTING COMMON $\t12.39 $\t11.85 $\t14.64 $\t14.98 $\t17.81 $\t18.18 $\t16.14 $\t15.00 $\t10.68 $\t8.75 NUMBER OF STORES 1 The years ended 2013, 2012 and 2011 are reported under International Financial Reporting Standards (\"IFRS\"). All other years ended are presented in accordance with previous Canadian generally accepted accounting principles and have not been restated to IFRS. 2 140 70 60 50 40 30 0 RESULTS FROM OPERATING ACTIVITIEs1 SALES 1 2013 10 2013 20 2012 0 2013 20 in millions of dollars 40 2012 2013 2012 2011 2010 2009 990 2011 1000 60 2010 1010 2009 1020 in millions of dollars 80 2012 1030 in millions of dollars 80 100 1040 970 90 2011 1050 980 100 120 2010 1060 2009 1070 NET EARNINGS1 53 540 20.0 52 15.0 51 520 SHAREHOLDERS' EQUITY1 1 RETURN ON EQUITY1 50 49 2011 47 2010 48 2009 2013 2012 0.0 2011 5.0 2010 2013 2012 2011 420 2010 440 2009 460 in millions of dollars 10.0 percentage 480 2009 in millions of dollars 500 DIVIDENDS The years ended 2013, 2012 and 2011 are reported under International Financial Reporting Standards (\"IFRS\"). All other years ended are presented in accordance with previous Canadian generally accepted accounting principles and have not been restated to IFRS. 3 Newfoundland Prince Edward Island Nova Scotia New Brunswick Qubec Ontario Manitoba Saskatchewan Alberta British Columbia Northwest Territories Yukon 14 2 19 14 84 117 13 12 45 39 1 1 3 3 5 4 41 52 5 3 15 15 - 1 1 3 16 28 2 2 10 10 - 2 1 21 26 2 2 10 8 - 4 1 8 4 28 56 6 6 21 19 - 2 2 4 30 38 3 3 17 7 - Total 361 146 73 72 153 106 Reitmans Smart Set RW&CO. Thyme Penningtons AdditionElle Stores Across Canada 4 24 6 37 30 220 317 31 28 118 98 1 1 911 Stores REITMANS Operating 361 stores averaging 4,600 sq. ft., Reitmans understands and fulfills the need of every woman of every shape to look and feel beautiful. Canada's largest women's apparel specialty chain and leading fashion brand, Reitmans has developed strong customer loyalty through superior service, insightful marketing and quality merchandise. Reitmans' fashions can also be purchased online at reitmans.com. SMART SET With 146 stores, averaging 3,400 sq. ft., Smart Set is a style destination where young women come together to inspire and be inspired. From wear-to-work separates, denim, essentials and accessories, we offer the latest styles in women's fashions to mix, match and innovate. RW & CO. RW&CO. is an aspirational lifestyle brand, which is passionate about Fashion catering to a customer with an urban mindset. Offering fashions for Him and Her that blend the latest trends with style, quality and with a unique attention to detail. RW&CO. operates 73 stores averaging 4,500 sq. ft. in premium locations in major shopping malls. THYME MATERNITY Thyme Maternity, Canada's leading fashion brand for moms-to-be, offers current styles for every aspect of life, from casual to work, plus a complete line of nursing fashions and accessories. Thyme's unique \"full of life experience\" delivers future moms valuable advice, fashion tips and product knowledge to help them on the incredible journey during and after pregnancy. Thyme operates 72 stores averaging 2,300 sq. ft. in major malls and power centres nationwide, as well as 20 Thyme shop-in-shops in select Babies\"R\"Us locations in Canada and 154 in Babies\"R\"Us locations in the United States. PENNINGTONS Canadian leader of the plus size market, Penningtons offers trend-right styles and affordable quality while creating a unique inspiring shopping experience for our customers. The plus size fashion destination for sizes 14-32, Penningtons operates 153 stores across Canada averaging 6,000 sq. ft. and an e-commerce site at penningtons.com. From head-to-toe, our customers will find the best fitted clothing such as intimate apparel, basic to fashion denim, work to weekend outfits, footwear and activewear. ADDITION ELLE Addition Elle is Canada's leading fashion destination for plus size women. Addition Elle's vision of offering \"Fashion Democracy\" delivers the latest \"must-have\" trends to updated fashion essentials in an inspiring shopping environment. From casual daywear to amazing dresses, contemporary career, sexy intimates, accessories, footwear, high performance activewear and the largest assortment of premium denim labels - it's all here. Addition Elle's fashion for plus size women comprises a phenomenal range of fashions for all - always with a focus on fashion, quality and fit. Addition Elle operates 106 stores averaging 6,000 sq. ft. in major malls and power centres nationwide and an e-commerce site at additionelle.com. 5 Management's Discussion and Analysis of Financial Condition and Results of Operations For the fiscal year ended FEBRUARY 2, 2013 The following Management's Discussion and Analysis of Financial Condition and Results of Operations (\"MD&A\") of Reitmans (Canada) Limited and its subsidiaries (\"Reitmans\" or the \"Company\") should be read in conjunction with the audited consolidated financial statements of Reitmans as at and for the fiscal years ended February 2, 2013 and January 28, 2012 and the notes thereto which are available at www.sedar.com. This MD&A is dated April 4, 2013. All financial information contained in this MD&A and Reitmans' audited consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (\"IFRS\") as issued by the International Accounting Standards Board (\"IASB\"). All amounts in this report are in Canadian dollars, unless otherwise noted. The audited consolidated financial statements and this MD&A were reviewed by Reitmans' Audit Committee and were approved by its Board of Directors on April 4, 2013. Additional information about Reitmans is available on the Company's website at www.reitmans.ca or on the SEDAR website at www.sedar.com. FORWARD-LOOKING STATEMENTS All of the statements contained herein, other than statements of fact that are independently verifiable at the date hereof, are forward-looking statements. Such statements, based as they are on the current expectations of management, inherently involve numerous risks and uncertainties, known and unknown, many of which are beyond the Company's control. Such risks include but are not limited to: the impact of general economic conditions, general conditions in the retail industry, seasonality, weather and other risks included in public filings of the Company. Consequently, actual future results may differ materially from the anticipated results expressed in forward-looking statements. The reader should not place undue reliance on the forward-looking statements included herein. These statements speak only as of the date made and the Company is under no obligation and disavows any intention to update or revise such statements as a result of any event, circumstances or otherwise, except to the extent required under applicable securities law. NON-GAAP FINANCIAL MEASURES In addition to discussing earnings in accordance with IFRS, this MD&A provides adjusted EBITDA as a supplementary earnings measure, which is defined as earnings (loss) before income taxes, dividend income, interest income, realized gains or losses on disposal of available-for-sale financial assets, impairment losses on available-for-sale financial assets, interest expense, depreciation, amortization and net impairment losses related to property and equipment. The Company also discloses same store sales, which are defined as sales generated by stores that have been open for at least one year. The Company believes these measures provide meaningful information on the Company's performance and operating results. However, readers should know that these non-GAAP financial measures have no standardized meaning as prescribed by IFRS and may not be comparable to similar measures presented by other companies. Accordingly, they should not be considered in isolation. MD&A Reitmans (Canada) Limited 6 Management's Discussion and Analysis The following table reconciles earnings (loss) before income taxes to adjusted EBITDA for the twelve and three months ended February 2, 2013 and January 28, 2012: For the twelve months ended February 2, 2013 January 28, 2012 Earnings (loss) before income taxes Dividend income Interest income Impairment losses on available-for-sale financial assets Interest expense Depreciation, amortization and net impairment losses Adjusted EBITDA $\t65,872,000 (3,462,000) (1,367,000) 73,000 682,000 64,990,000 $\t126,788,000 $\t35,136,000 (3,526,000) (1,062,000) 156,000 592,000 59,655,000 $\t90,951,000 For the three months ended February 2, 2013 January 28, 2012 $\t(1,449,000) (911,000) (203,000) 50,000 139,000 15,514,000 $\t13,140,000 $\t6,700,000 (864,000) (419,000) - 162,000 16,442,000 $\t22,021,000 CORPORATE OVERVIEW Reitmans is a Canadian ladies' wear specialty apparel retailer. The Company has six banners: Reitmans, Smart Set, RW&CO., Thyme Maternity, Penningtons and Addition Elle. Each banner is focused on a particular niche in the retail marketplace with a distinct marketing program as well as a unique website thereby allowing the Company to continue to enhance its brands and strengthen customer loyalty. The Company has several competitors in each niche, including local, regional and national chains of specialty stores and department stores, as well as foreign-based competitors. The Company's stores are located in malls, retail power centres, strip plazas and on major shopping streets across Canada. The Company continues to enhance all areas of its business by investing in stores, technology and people. The Company continues to offer Canadian consumers affordable fashions and accessories at the best value reflecting price and quality. The Company offers e-commerce website shopping for the Reitmans banner and its plus-size banners (Penningtons and Addition Elle) and is continuing to develop the infrastructure required to launch e-commerce for the other banners. These online channels offer customers convenience, selection and ease of purchase, while enhancing customer loyalty and continuing to build the brands. In addition to its individual retail outlets, the Company operates 20 Thyme Maternity boutiques (\"shop-in-shop\") in select Babies\"R\"Us locations in Canada and provides access to e-commerce website shopping through the Babies\"R\"Us Canadian website. In June 2012, the Company announced a partnership with Babies\"R\"Us to sell Thyme Maternity apparel and accessories in the United States. At April 4, 2013, Thyme Maternity products are available in the U.S. in 154 Babies\"R\"Us stores and online through the Babies\"R\"Us U.S. website. These new retail channels offer Thyme Maternity customers an easy and convenient offering along with the opportunity to access Thyme Maternity merchandise via the Internet. RETAIL BANNERS Number of stores at January 28, 2012 Q1 Openings Q1 Closings Q2 Openings Q2 Closings Q3 Openings Q3 Closings Q4 Openings Q4 Closings Number of stores at February 2, 2013 362 150 66 76 152 116 20 942 4 4 1 1 5 1 - 16 2 1 1 3 3 3 20 33 1 - 2 - 5 3 - 11 5 1 - - 5 7 - 18 5 - 4 2 4 3 - 18 4 2 - 2 3 2 - 13 1 1 1 - 4 2 - 9 1 5 - 2 6 7 - 21 361 146 73 72 153 106 - 911 - - - 7 - 7 - - - - - - - - - 2 154 156 - - - 20 154 174 Reitmans Smart Set RW&CO. Thyme Maternity1 Penningtons Addition Elle Cassis Total Excludes boutiques in Babies\"R\"Us shop-in-shop locations 1 Thyme Maternity shop-in-shop locations: Babies\"R\"Us - Canada Babies\"R\"Us - US Babies\"R\"Us - Total 10 - 10 1 - 1 7 Reitmans (Canada) Limited Management's Discussion and Analysis Store closings take place for a variety of reasons as the viability of each store and its location is constantly monitored and assessed for continuing profitability. In most cases when a store is closed, merchandise at that location is sold off in the normal course of business and any unsold merchandise remaining at the closing date is generally transferred to other stores operating under the same banner for sale in the normal course of business. In June 2012, the Company installed a new warehouse management system. As previously announced on August 15, 2012, complications associated with the system resulted in a disruption in the flow of inventory to stores in the third quarter of the year ended February 2, 2013 (\"fiscal 2013\"). The disruption resulted in estimated loss of sales and a corresponding decline in gross margin, earnings before income taxes and adjusted EBITDA between $7,000,000 and $15,000,000 in the third quarter of fiscal 2013. There was no significant impact in the fourth quarter of fiscal 2013. The Company has addressed the issues related to the warehouse management system and continues to improve the flow of goods to the stores and optimize system performance. THREE-YEAR REVIEW OF SELECTED FINANCIAL INFORMATION February 2, 2013 January 29, 2011 $\t1,000,513,000 35,136,000 26,619,000 $\t1,019,397,000 65,872,000 47,539,000 $\t1,059,000,000 127,802,000 88,985,000 0.41 0.41 594,555,000 52,623,000 0.80 Sales Earnings before income taxes Net earnings Earnings per share (\"EPS\") Basic Diluted Total assets Total non-current liabilities Dividends per share For the fiscal years ended January 28, 2012 0.72 0.72 648,764,000 51,877,000 0.80 1.33 1.32 679,339,000 55,248,000 0.78 The year ended January 28, 2012 (\"fiscal 2012\") commenced with disappointing sales in the first quarter, primarily due to poor weather and a difficult retail environment marked by increased promotional activity. Economic conditions continued to impact the Company further into fiscal 2012 as consumer confidence levels remained weak. The first six months of fiscal 2013 were challenging as economic factors continued to contribute to softer sales in a more promotional environment. In the third quarter of fiscal 2013, sales were significantly impacted by a disruption in the flow of inventory to stores as a result of difficulties experienced with the deployment of a new warehouse management system. The Company's gross margin, and ultimately net earnings, can be significantly impacted by fluctuations in the Canadian dollar in relation to the US dollar. In the year ended January 29, 2011 (\"fiscal 2011\"), significant improvement in the Canadian dollar vis--vis the US dollar resulted in a positive impact to the gross profit of approximately $22,000,000. In fiscal 2012 the Canadian dollar traded in ranges comparable to fiscal 2011, however increased promotional activity offset gains from the stronger Canadian dollar. In fiscal 2013 volatility of the Canadian dollar moderated, but as consumer demand weakened due to economic conditions and higher consumer debt, higher promotional activity resulted. In addition, in fiscal 2012 the Company incurred costs related to the closure of the Cassis banner of approximately $6,000,000 pre-tax while in fiscal 2013 the Company's gross margin was impacted by a disruption in the flow of inventory to stores as described above. Despite a challenging retail environment over the past three years, the Company's balance sheet continues to remain solid. The Company has continued to maintain a strong position in cash, cash equivalents and marketable securities. Inventories, although trending somewhat higher on a per store basis, continue to be closely managed. The Company has increased its capital expenditures significantly over the past three years for store renovation activity and other capital expenditures. In fiscal 2010, the Company had reduced its capital expenditures and has gradually returned to pre-recession levels. Fiscal 2013 capital expenditures amounted to $84,433,000. The Company's fiscal year ends on the Saturday closest to the end of January. The fiscal year ended February 2, 2013 includes 53 weeks instead of the normal 52 weeks. The inclusion of an extra week occurs every fifth or sixth fiscal year due to the Company's floating year-end. STRATEGIC INITIATIVES The Company continues to position itself for growth and has undertaken a number of strategic initiatives to enhance the brands, improve productivity at all levels through system advances and foster a culture of process improvements. Some of the ongoing initiatives include: The Company has embarked on a rebranding of the Reitmans, Smart Set, Addition Elle and Penningtons banners with an increased focus on fashion and affordability which will continue throughout fiscal 2014. The Company continues to expand its offering to Thyme U.S.A. customers through its partnership with Babies\"R\"Us. This business endeavor offers the Company an opportunity to introduce its merchandise into the U.S. market through its shop-in-shop boutiques. Reitmans (Canada) Limited 8 Management's Discussion and Analysis Early in fiscal 2014 the Company will launch e-commerce for the Smart Set, RW&CO. and Thyme Maternity banners with fulfillment through the Company's existing distribution centre. The Company has partnered with EziBuy Ltd., a New Zealand based retailer, to sell Addition Elle merchandise through the partner's online sales channel. EziBuy Ltd. is a multi-channel retailer offering fashion clothing and home decor in Australia and New Zealand. Continuation of a companywide supply chain optimization and retail enterprise initiative, internally branded as \"SCORE\Annual Report 2015 We are customer driven, value oriented and committed to excellence. By promoting innovation, growth, development and teamwork, Reitmans is Canada's leading specialty retailer we strive to serve our customers the best quality/value proposition in the marketplace. Fiscal 2015 was a challenging year. Sales for fiscal 2015 were $939,376,000 as compared with $960,397,000 for fiscal 2014, a decrease of 2.2%, impacted by a net reduction of 55 stores as the Company closes underperforming locations. Same store sales1 increased 1.2% with mall and power centre stores decreasing 0.2% and e-commerce sales increasing 63.5%. Mall and power centre stores were impacted by e-commerce alternatives, a highly competitive environment and consumers with near record high debt levels. Sales through the various banners' e-commerce channels continued to show strong growth, although representing a small proportion of total Company sales. The Company's gross margin for fiscal 2015 was 60.4% compared with 61.9% for fiscal 2014. The Company's gross margin includes gains on foreign exchange contracts previously reported in finance income (gain of $10,921,000 for fiscal 2015 and $12,455,000 for fiscal 2014). Net earnings for fiscal 2015 were $13,415,000 ($0.21 diluted earnings per share) as compared with net earnings of $10,788,000 ($0.17 diluted earnings per share) for fiscal 2014. The increase in net earnings was primarily attributable to the closure of non-performing stores and previously reported initiatives to reduce costs across the organization. For fiscal 2015, adjusted EBITDA1 was $64,805,000 as compared with $70,453,000 in fiscal 2014, a decrease of $5,648,000 or 8.0% largely attributable to lower sales and margins. On November 25, 2014 the Company announced its plan to close all Smart Set stores. In fiscal 2015, 35 Smart Set stores were closed. The Company will convert 74 stores to other banners by October 31, 2015 while 20 stores will be closed upon expiry of their leases. During the year, the Company opened 12 new stores and closed 67. Accordingly, at January 31, 2015, there were 823 stores in operation, consisting of 341 Reitmans, 139 Penningtons, 105 Addition Elle, 76 RW&CO., 68 Thyme Maternity and 94 Smart Set, as compared with a total of 878 stores as at February 1, 2014. In addition, there were 21 Thyme Maternity shop-in-shop boutiques in select Babies\"R\"Us locations in Canada. We expect to open 6 new stores, close 51 stores, remodel 45 stores and convert 74 Smart Set stores at a capital cost of approximately $20,000,000. To Our Shareholders The Company continues to execute its strategy of delivering fashionable clothing at excellent prices to Canadian consumers. We are proud of our achievements over the past 89 years and most confident of our future. We believe that we have the very best specialty retailing assets in Canada. Our operations are led and staffed by highly motivated, extremely competent professionals. We extend sincere thanks and appreciation to all our associates, suppliers, customers and shareholders. These are the people who have made possible our many years of success and on whom we rely for the growth of the Company. On behalf of the Board of Directors, (signed) Jeremy H. Reitman Chairman and Chief Executive Officer Montreal, April 1, 2015 1 Please refer to the note on non-GAAP financial measures included in the Management's Discussion & Analysis. 2 5-year Highlights 2015 2014 SALES 1st\tQuarter 2nd\tQuarter 3rd\tQuarter 4th\tQuarter Total $\t206,478 258,326 238,295 236,277 $\t939,376 $\t216,861 253,445 249,414 240,677 $\t960,397 RESULTS FROM OPERATING ACTIVITIES 2 1st\tQuarter 2nd\tQuarter 3rd\tQuarter 4th\tQuarter Total For the years ended: (in thousands except per share amounts) (unaudited) $\t(16,629) 10,904 14,078 4,143 $\t12,496 NET EARNINGS (LOSS) 1st\tQuarter 2nd\tQuarter 3rd\tQuarter 4th\tQuarter Total 20131 2012 2011 $\t217,094 279,513 236,247 267,659 $\t1,000,513 $\t219,296 286,075 254,072 259,954 $\t1,019,397 $\t235,745 292,026 262,515 268,714 $\t1,059,000 $\t(5,117) 13,463 6,133 (11,373) $\t3,106 $\t(736) 35,211 (1,135) (2,538) $\t30,802 $\t5,018 40,968 10,609 4,493 $\t61,088 $\t22,825 53,612 27,819 19,886 $\t124,142 $\t(13,415) 9,557 12,866 4,407 $\t13,415 $\t(2,586) 10,182 5,763 (2,571) $\t10,788 $\t(119) 27,649 (29) (1,145) $\t26,356 $\t624 31,680 10,561 4,674 $\t47,539 $\t15,770 38,706 20,692 13,817 $\t88,985 BASIC EARNINGS (LOSS) PER SHARE 1st\tQuarter 2nd\tQuarter 3rd\tQuarter 4th\tQuarter Total $\t(0.21) 0.15 0.20 0.07 $\t0.21 $\t(0.04) 0.16 0.09 (0.04) $\t0.17 $\t0.00 0.42 0.00 (0.02) $\t0.40 $\t0.01 0.48 0.16 0.07 $\t0.72 $\t0.23 0.58 0.31 0.21 $\t1.33 NET EARNINGS BASIC EARNINGS PER SHARE $\t13,415 $\t0.21 $\t10,788 $\t0.17 $\t26,356 $\t0.40 $\t47,539 $\t0.72 $\t88,985 $\t1.33 SHAREHOLDERS' EQUITY PER SHARE $\t421,123 $\t6.52 $\t423,431 $\t6.56 $\t454,893 $\t7.04 $\t492,852 $\t7.51 $\t512,800 $\t7.73 823 878 911 942 968 DIVIDENDS PAID $\t12,917 $\t41,981 $\t52,068 $\t52,654 $\t51,895 Share PRICE AT YEAR-END CLASS A NON-VOTING COMMON $\t8.10 $\t7.11 $\t5.56 $\t5.61 $\t12.39 $\t11.85 $\t14.64 $\t14.98 $\t17.81 $\t18.18 NUMBER OF STORES 1 Adjusted to reflect the impact from the implementation of the amendments to IAS 19, Employee Benefits. 2 Adjusted to reflect the reclassification of realized and unrealized gains and losses on foreign exchange contracts not eligible for hedge accounting to conform with presentation in the current year. Gains and losses on these foreign exchange contracts were previously reported in finance income and finance costs as described in the Management's Discussion and Analysis. 120 1080 1060 100 1040 1020 in millions of dollars in millions of dollars 980 960 940 920 900 880 60 40 20 2011 2012 2013 2014 2015 0 2011 2012 2013 2014 2015 860 RESULTS FROM OPERATING ACTIVITIES1, 2 80 saleS 1000 100 600 90 500 80 70 NET EARNINGS1 in millions of dollars 50 40 30 20 10 3 300 200 100 0 2011 2012 2013 2014 2015 0 SHAREHOLDERS' EQUITY1 400 2011 2012 2013 2014 2015 in millions of dollars 60 60 20.0 18.0 50 16.0 RETURN ON EQUITY1 12.0 in millions of dollars 10.0 8.0 6.0 4.0 2.0 0 2011 2012 2013 2014 2015 percentage 40 DIVIDENDS 30 20 1 The year ended 2013 has been adjusted to reflect the impact from the implementation of the amendments to IAS 19, Employee Benefits. 10 2 Adjusted to reflect the reclassification of realized and unrealized gains and losses on foreign exchange contracts not eligible for hedge accounting to conform with presentation in the current year. Gains and losses on these foreign exchange contracts were previously reported in finance income and finance costs as described in the Management's Discussion and Analysis. 0 2011 2012 2013 2014 2015 14.0 Reitmans Penningtons AdditionElle RW&CO. Thyme Smart Set total Stores 4 Stores Across Canada 14 3 2 1 - - 3 1 - - - 2 19 6 2 1 1 1 13 4 3 3 1 3 82 25 30 16 21 36 110 51 39 29 25 33 12 5 3 3 2 3 11 6 3 2 2 2 40 20 17 11 10 8 35 18 6 10 6 6 1 - - - - - 1 - - - - - 20 6 30 27 210 287 28 26 106 81 1 1 341 139 105 76 68 94 823 Newfoundland Prince Edward Island Nova Scotia New Brunswick Qubec Ontario Manitoba Saskatchewan Alberta British Columbia Northwest Territories Yukon Reitmans offers a unique combination of superior fit, fashion, quality and value. With 341 stores across Canada averaging 4,600 sq. ft., Reitmans is the preferred destination for women looking to update their wardrobe with the latest styles and colours for an affordable price. While Reitmans enjoys a strong reputation for service and benefits from a broad and loyal customer base, it will continue to strive to create an engaging customer experience by being there for her whenever she chooses to shop. Reitmans' fashions can also be purchased online at reitmans.com. Canadian leader of plus-size apparel, Penningtons offers unparalleled value to our customers by providing fit expertise, quality and a unique inspiring shopping experience. Penningtons is the \"Art of Affordable Fashion!\" The plus-size fashion destination for sizes 14-32, Penningtons operates 139 stores across Canada averaging 6,000 sq. ft. and is available online at penningtons.com. Addition Elle is Canada's leading fashion destination for plus-size women. Addition Elle's vision of \"Fashion Democracy\" delivers the latest trends to updated fashion essentials in an inspiring shopping environment, offering casual daywear, dresses, contemporary career, sexy intimates, accessories, footwear, high performance activewear and a large assortment of premium denim labels. Addition Elle operates 105 stores averaging 6,000 sq. ft. in major malls and power centres nationwide and an e-commerce site at additionelle.com. RW&CO. is an aspirational lifestyle brand which caters to men and women with an urban mindset. Whether for work or for weekend, RW&CO. offers fashion that blends the latest trends with style, quality and a unique attention to detail. RW&CO. operates 76 stores averaging 4,500 sq. ft. in premium locations in major shopping malls across Canada, as well as an e-commerce site at rw-co.com. Thyme Maternity, Canada's leading fashion brand for modern moms-to-be, offers current styles for every aspect of life, from casual to work, including a complete line of nursing fashion and accessories. Thyme brings future moms valuable advice, fashion tips and product knowledge to help them on their incredible journey during and after pregnancy. Thyme operates 68 stores averaging 2,300 sq. ft. in major malls and power centres nationwide, as well as 21 Thyme shop-in-shops in select Babies\"R\"Us locations in Canada. Thyme Maternity fashions can also be purchased online at thymematernity.com. With 94 stores, averaging 3,400 sq. ft., Smart Set is a style destination offering wear-to-work separates, denim, essentials and accessories. Smart Set offers the latest styles in women's fashions to mix, match and innovate. Smart Set fashions can also be purchased online at smartset.ca. 5 The following Management's Discussion and Analysis of Financial Condition and Results of Operations (\"MD&A\") of Reitmans (Canada) Limited and its subsidiaries (\"Reitmans\" or the \"Company\") should be read in conjunction with the audited consolidated financial statements of Reitmans as at and for the fiscal year ended January 31, 2015 (\"fiscal 2015\") and February 1, 2014 (\"fiscal 2014\") and the notes thereto which are available at www.sedar.com. This MD&A is dated April 1, 2015. All financial information contained in this MD&A and Reitmans' audited consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (\"IFRS\"), also referred to as Generally Accepted Accounting Principles (\"GAAP\"), as issued by the International Accounting Standards Board (\"IASB\"). All monetary amounts in this report are in thousands of Canadian dollars, except per share amounts. The audited consolidated financial statements and this MD&A were reviewed by Reitmans' Audit Committee and were approved by its Board of Directors on April 1, 2015. Additional information about Reitmans is available on the Company's website at www.reitmans.ca or on the SEDAR website at www.sedar.com. FORWARD-LOOKING STATEMENTS Management's Discussion and Analysis 6 of Financial Condition and Results of Operations FOR THE FISCAL YEAR ENDED January 31, 2015 Reitmans (Canada) Limited All of the statements contained herein, other than statements of fact that are independently verifiable at the date hereof, are forward-looking statements. Such statements, based as they are on the current expectations of management, inherently involve numerous risks and uncertainties, known and unknown, many of which are beyond the Company's control. Such risks include but are not limited to: the impact of general economic conditions, general conditions in the retail industry, seasonality, weather and other risks included in public filings of the Company, including those described in the \"Operating Risk Management\" and \"Financial Risk Management\" sections of this MD&A. Consequently, actual future results may differ materially from the anticipated results expressed in forward-looking statements, which reflect the Company's expectations only as of the date of this MD&A. Forward-looking statements are based upon the Company's current estimates, beliefs and assumptions, which are based on management's perception of historical trends, current conditions and currently expected future developments, as well as other factors it believes are appropriate in the circumstances. Specific forward-looking statements in this MD&A include, but are not limited to, statements with respect to the Company's anticipated future results and events, future liquidity, planned capital expenditures, amount of pension plan contributions, status and impact of systems implementation, the ability of the Company to successfully implement its strategic initiatives and cost reduction and productivity improvement initiatives as well as the impact of such initiatives. The reader should not place undue reliance on any forward-looking statements included herein. These statements speak only as of the date made and the Company is under no obligation and disavows any intention to update or revise such statements as a result of any event, circumstances or otherwise, except to the extent required under applicable securities law. Management's Discussion and Analysis NON-GAAP FINANCIAL MEASURES In addition to discussing earnings in accordance with IFRS, this MD&A provides adjusted earnings before interest, taxes, depreciation and amortization (\"adjusted EBITDA\") as a non-GAAP financial measure. Adjusted EBITDA is defined as net earnings before income tax expense, other income, dividend income, interest income, realized gains or losses on disposal of available-for-sale financial assets, interest expense, depreciation, amortization and net impairment losses. The following table reconciles the most comparable GAAP measure, net earnings, to adjusted EBITDA. Management believes that adjusted EBITDA is an important indicator of the Company's ability to generate liquidity through operating cash flow to fund working capital needs and fund capital expenditures and uses the metric for this purpose. The exclusion of dividend and interest income eliminates the impact of revenue derived from non-operational activities. The exclusion of depreciation, amortization and impairment charges eliminates the non-cash impact. The intent of adjusted EBITDA is to provide additional useful information to investors and analysts and the measure does not have any standardized meaning under IFRS. Adjusted EBITDA should therefore not be considered in isolation or used in substitute for measures of performance prepared in accordance with IFRS. Other companies may calculate adjusted EBITDA differently. From time to time, the Company may exclude additional items if it believes doing so would result in a more effective analysis of underlying operating performance. The exclusion of certain items does not imply that they are non-recurring. The Company uses a key performance indicator (\"KPI\"), same store sales, to assess store performance (including each banner's e-commerce store) and sales growth. Same store sales are defined as sales generated by stores that have been continuously open during both of the periods being compared and include e-commerce sales. The same store sales metric compares the same calendar days for each period. Although this KPI is expressed as a ratio, it is a non-GAAP financial measure that does not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures used by other companies. Management uses same store sales in evaluating the performance of stores and considers it useful in helping to determine what portion of new sales has come from sales growth and what portion can be attributed to the opening of new stores. Same store sales is a measure widely used amongst retailers and is considered useful information for both investors and analysts. Same store sales should therefore not be considered in isolation or used in substitute for measures of performance prepared in accordance with IFRS. The following table reconciles net earnings (loss) to adjusted EBITDA for the three months and fiscal year ended January 31, 2015 and February 1, 2014: For the three months ended January 31, 2015 February 1, 2014 Net earnings (loss) Depreciation, amortization and net impairment losses Other income 1 Dividend income Interest income Realized (gains) losses on disposal of available-for-sale financial assets Impairment losses on available-for-sale financial assets Interest expense Income tax expense (recovery) Adjusted EBITDA Adjusted ebitda as % of sales 1 $\t4,407 12,265 - (409) (377) (4,045) 384 88 1,829 $\t14,142 5.99% $\t(2,571) 17,312 (6,054) (873) (184) 248 2,007 114 (1,863) $\t8,136 3.38% For the fiscal year ended January 31, 2015 February 1, 2014 $\t13,415 54,038 - (2,298) (994) (4,820) 958 394 4,112 $\t64,805 6.90% $\t10,788 63,724 (6,054) (3,481) (621) 248 2,699 496 2,654 $\t70,453 7.34% Other income comprises a gain on sale of intellectual property rights and proceeds from the settlement of a trademark dispute. Reitmans (Canada) Limited 7 Management's Discussion and Analysis CORPORATE OVERVIEW The Company has a single reportable segment which derives its revenue from the sale of ladies' specialty apparel to consumers through its six retail banners. The Company's stores are primarily located in malls and retail power centres across Canada. The Company currently operates under the following banners: The Reitmans banner, operating 341 stores averaging 4,600 sq. ft., is Canada's largest women's apparel specialty chain and leading fashion brand. Reitmans has developed strong customer loyalty through superior service, insightful marketing and quality merchandise. Penningtons is a leader in the Canadian plus-size market, offering trend-right styles and affordable quality for plus-size fashion sizes 14-32. Penningtons operates 139 stores in power centres across Canada averaging 6,000 sq. ft. Addition Elle is a fashion destination for plus-size women with a focus on fashion, quality and fit delivering the latest \"must-have\" trends to updated fashion essentials in an inspiring shopping environment. Addition Elle operates 105 stores averaging 6,000 sq. ft. in major malls and power centres nationwide. RW&CO. operates 76 stores averaging 4,500 sq. ft. in premium locations in major shopping malls, catering to a customer with an urban mindset by offering fashions for men and women. 8 Thyme Maternity is a leading fashion brand for moms-to-be, offering current styles for every aspect of life, from casual to work, plus a complete line of nursing fashions and accessories. Thyme operates 68 stores averaging 2,300 sq. ft. in major malls and power centres across Canada. In addition, the Company operates 21 Thyme Maternity shop-in-shop boutiques in select Babies\"R\"Us locations in Canada. In June 2014 the Company closed its remaining Thyme Maternity shop-in-shop boutiques in the U.S. With 94 stores, averaging 3,400 sq. ft., Smart Set is a style destination offering the latest styles in women's fashions to mix, match and innovate from wear-to-work separates, denim, essentials and accessories. On November 25, 2014 the Company announced its plan to close all Smart Set stores. Management determined that its optimum strategy to improve operating results was to refocus its sales and merchandising efforts either through conversion of Smart Set stores to other Company banners or through store closures. The majority of the stores that will be converted will occur by October 31, 2015 while the remaining stores are anticipated to close by the year ending January 28, 2017. The Smart Set banner sales for fiscal 2015 were $88,856 as compared to $95,764 for fiscal 2014, while losses from operating activities for fiscal 2015 were $10,030 as compared to $29,499 for fiscal 2014 (including an allocation of general overhead costs). The Smart Set banner non-cash asset write-offs amounted to $3,085 for fiscal 2015. The Company does not anticipate inventory write-downs or material employee severance costs. E-Commerce The Company also offers e-commerce website shopping for all of its banners. These online channels offer customers convenience, selection and ease of purchase, while enhancing customer loyalty and continuing to build the brands. Reitmans (Canada) Limited Management's Discussion and Analysis RETAIL BANNERS Number of stores at February 1, 2014 Q1 Openings 349 152 101 77 70 129 878 1 1 1 - - - 3 Reitmans Penningtons Addition Elle RW&CO. Thyme Maternity1 Smart Set Total 1 Q1 Closings Q2 Openings Q2 Closings Q3 Openings Q3 Closings Q4 Openings Number of stores at January 31, 2015 Q4 Closings (5) (7) - - (2) (5) (19) - - 1 - - - 1 (2) (3) (1) (1) - (11) (18) 2 - 3 3 - - 8 (2) (2) - - - (6) (10) - - - - - - - (2) (2) - (3) - (13) (20) 341 139 105 76 68 94 823 - (102) (102) - - - (2) (67) (69) - - - - - - - - - - - - 21 - 21 Excludes boutiques in Babies\"R\"Us shop-in-shop locations. Thyme Maternity shop-in-shop locations: Babies\"R\"Us - Canada Babies\"R\"Us - U.S. Babies\"R\"Us - Total 23 169 192 - - - Store closings take place for a variety of reasons as the viability of each store and its location is constantly monitored and assessed for continuing profitability. In most cases when a store is closed, merchandise at that location is sold off in the normal course of business and any unsold merchandise remaining at the closing date is generally transferred to other stores operating under the same banner for sale in the normal course of business. 9 THREE-YEAR REVIEW OF SELECTED FINANCIAL INFORMATION For the fiscal years ended January 31, 2015 February 1, 2014 February 2, 20131 (52 weeks) (52 weeks) (53 weeks) Total of stores at end of fiscal year 2 Sales Earnings before income taxes Net earnings Earnings per share (\"EPS\") Basic Diluted Total assets Total non-current liabilities Dividends per share 823 $\t939,376 17,527 13,415 878 $\t960,397 13,442 10,788 911 $\t1,000,513 34,778 26,356 0.21 0.21 584,391 48,600 $\t0.20 0.17 0.17 589,939 51,039 $\t0.65 0.40 0.40 594,968 52,792 $\t0.80 1 Certain figures have been adjusted to reflect the impact from the implementation of the amendments to IAS 19 Employee Benefits and adjusted to reflect a reclassification of certain items to conform with - presentation in the current year. 2 Excludes boutiques in Babies\"R\"Us shop-in-shop locations. Reitmans (Canada) Limited Management's Discussion and Analysis Sales over the last three years were impacted by a challenging retail environment. Weak economic conditions, the influx of foreign entrants into Canada and increased e-commerce competition have resulted in a highly competitive landscape as retailers aggressively compete in a limited consumer marketplace. Additionally, as the Company looked to close underperforming stores, it has decreased its store count, with a net reduction of 88 stores over two years. Fiscal 2013 sales included an additional week, due to the Company's retail calendar, resulting in an increase of approximately $13,600 in sales. Despite this increase, sales in fiscal 2013 were significantly impacted by a disruption in the flow of inventory to stores as a result of difficulties experienced with the deployment of a new warehouse management system. Sales for fiscal 2014 were weak, with particularly poor performance in the Smart Set banner, despite its efforts to regain acceptance by consumers through repositioning and rebranding. In fiscal 2015 the net reduction of stores contributed to lower sales in a highly competitive environment and greater e-commerce alternatives. The Smart Set banner continued to perform poorly in fiscal 2015 in a highly competitive niche and was impacted by significant discounting as it competed with many retailers targeting the same customer demographics. In fiscal 2015 the Company announced its plan to close all Smart Set stores. The Company's gross profit, and ultimately net earnings, have been significantly impacted by fluctuations in the Canadian dollar in relation to the U.S. dollar. In the last three years, the Canadian dollar has seen a significant weakening vis--vis the U.S. dollar. This has resulted in increased merchandise costs as virtually all merchandise payments are settled in U.S. dollars. In fiscal 2013, the Canadian dollar traded close to par with the U.S. dollar. As consumer demand weakened due to economic conditions higher promotional activity resulted. Fiscal 2013 margins were also impacted by a disruption in the flow of inventory to stores as noted above. In fiscal 2014 the Canadian dollar began to depreciate significantly vis--vis the U.S. dollar impacting the Company's gross margin while sales continued to be under pressure due to the competitive landscape. In fiscal 2014 gross profit was further impacted by substantial discounting in the Smart Set banner. Additionally, in deciding to exit the U.S. marketplace for Thyme Maternity shop-in-shop boutiques, gross profit was also impacted by significant discounting in its U.S. operations. In fiscal 2015, as the Canadian dollar further depreciated against the U.S. dollar, the Company's gross margin was negatively impacted which was offset by improved inventory and markdown management. 10 Despite a challenging retail environment over the past three years, the Company's balance sheet has remained strong. The Company has continued to maintain a strong position in cash, cash equivalents and marketable securities. Inventories, although trending somewhat higher on a per store basis, continue to be closely managed. The Company invested considerably in capital expenditures for fiscal 2013 in both store renovations and systems technology at the head office. In fiscal 2014, the Company significantly reduced its capital expenditures to $34,524 and to $28,960 in fiscal 2015. This level of expenditure is below earlier estimates due to cancellations and postponements of planned renovations and store openings. Reitmans (Canada) Limited Management's Discussion and Analysis STRATEGIC INITIATIVES The Company has undertaken a number of strategic initiatives to enhance its brands, improve productivity and profitability at all levels through system advances and foster a culture of process improvements. Ongoing and new Company initiatives include: Initiatives Status The Company recently announced a plan to close the stores operating under the Smart Set banner. It is in the early stages of executing its planned conversion and closure of the remaining Smart Set stores. Over the next twelve to eighteen months the Company plans to convert approximately 74 of its remaining Smart Set stores to other banners while closing 20 stores. This strategy is expected to improve operating results by allowing the Company to refocus its sales and merchandising efforts on the remaining banners. In March 2015, the Company launched a Penningtons product offering through Amazon.com in the U.S. This entrance into e-commerce in the U.S. provides the Company with an introduction of its plus-size offering in the U.S. market while leveraging its current buying and distribution systems. The Company is committed to continued investment in e-commerce, including improvements in customer relationship management and technology. The Company continues to invest in e-commerce, including the deployment of mobile technology in fiscal 2015. An initiative is underway to optimize the use of the Company's customer relationship database through technological improvements such as advanced email technology enabling targeted marketing. The Company is pleased with the continued growth in e-commerce sales. Continuation of a companywide supply chain optimization and retail enterprise initiative, internally branded as \"SCORE\\f