A conference call to discuss the results for the reporting period ended September 30, 2013 will be held on November 8,  2013 at 11:00 a.m. Eastern time (9:00 a.m. Mountain time). To participate in the conference call, please dial 1-888-231-8191 or (647) 427-7450 approximately 10 minutes prior to the call. A live and archived audio webcast of the conference call will also be available on the Company's website www.autocan.ca.

EDMONTON, Nov. 7, 2013 /CNW/ - AutoCanada Inc. (the "Company" or "AutoCanada") (TSX: ACQ) today announced financial results for the reporting period ended September 30, 2013.

2013 Third Quarter Operating Results Revenue increased 35.1% or $104.9 million to $403.5 million Gross profit increased by 35.1% or $17.6 million to $67.7 million Same store revenue increased by 19.9% Same store gross profit increased by 18.5% EBITDA was $16.6 million vs. $10.6 million in 2012, a 56.6% increase Pre-tax earnings increased by $5.7 million or 62.1% to $14.9 million Net earnings increased by $4.2 million or 61.1% to $11.0 million Earnings per share increased by 47.8% to $0.507 from $0.343 Same store new vehicles retailed increased by 19.4% Same store used vehicles retailed increased by 9.6% Same store repair orders completed for the quarter were up 6.0%

In commenting on the financial results for the three month period ended September 30, 2013, Pat Priestner, Chairman and CEO of AutoCanada Inc. stated that, "We are very pleased with the results of the third quarter of 2013, in which we exceeded the $400 million mark in quarterly revenue for the first time in Company history. The strong growth during the quarter can be attributed to gross profit increases in all four of our business lines - new vehicles, used vehicles, finance and insurance, and parts, service and collision repair.  Recent acquisitions have contributed to the above 30% increases in each of our four business lines during the quarter, however much of the growth can be attributed to same store revenue and gross profit increases of 19.9% and 18.5%, respectively, during the quarter."

With respect to recently completed acquisitions and future growth opportunities, Mr. Priestner further stated, "We are very pleased to be able to further execute upon the acquisition guidance we released earlier in the year with the recent additions of Courtesy Chrysler located in Calgary, Alberta, and Eastern Chrysler located in Winnipeg, Manitoba.  These two stores are very well established and provide us with a strong foundation for building regional platforms in these two great cities."

Commenting on the announcement of an increase in its quarterly dividend, Mr. Priestner stated, "We are positive in our outlook for Canadian new vehicle sales for the remainder of 2013 and into the next year, which are factors in our decision to raise the dividend for the eleventh consecutive quarter.  Management believes that raising the quarterly dividend to an annual rate of $0.84 per share shall continue to provide an attractive yield to investors and will continue to attract investors who seek a combination of both growth opportunity and a regular income stream."

Third Quarter 2013 Highlights

• The Company generated net earnings of $11.0 million or earnings per share of $0.507 versus earnings per share of $0.344 in the third quarter of 2012.  Pre-tax earnings increased by $5.7 million to $14.9 million in the third quarter of 2013 as compared to $9.2 million in the same period in 2012.
• Same store revenue increased by 19.9% in the third quarter of 2013, compared to the same quarter in 2012.  Same store gross profit increased by 18.5% in the third quarter of 2013, compared to the same quarter in 2012.
• Revenue from existing and new dealerships increased 35.1% to $403.5 million in the third quarter of 2013 from $298.6 million in the same quarter in 2012.
• Gross profit from existing and new dealerships increased 35.1% to $67.7 million in the third quarter of 2013 from $50.1 million in the same quarter in 2012.
• EBITDA increased 56.6% to $16.6 million in the third quarter of 2013 from $10.6 million in the same quarter in 2012.
• Free cash flow increased to $7.2 million in the third quarter of 2013 or $0.33 per share as compared $8.7 million or $0.44 per share in the third quarter of 2012.
• Adjusted free cash flow increased to $14.6 million in the third quarter of 2013 or $0.68 per share as compared to $9.5 million or $0.48per share in 2012.
• Adjusted return on capital employed increased to 7.8% in the third quarter of 2013 as compared to 7.0% in 2012.
• Adjusted return on capital employed on a trailing 12 month basis of 29.7% as compared to 22.8% at September 30, 2012.

Dividends

Management reviews the Company's financial results on a monthly basis.  The Board of Directors reviews the financial results on a quarterly basis, or as requested by Management, and determine whether a dividend shall be paid based on a number of factors.

The following table summarizes the dividends declared by the Company in 2013:

(In thousands of dollars)
							Total
Record date	Payment date						Declared		Paid
							$		$
February 28, 2013 May 31, 2013 August 30, 2013	March 15, 2013 June 17, 2013 September 16, 2013						3,579 3,777 4,344		3,579 3,777 4,344

On November 7, 2013, the Board declared a quarterly eligible dividend of $0.21 per common share on AutoCanada's outstanding Class A common shares, payable on December 16, 2013 to shareholders of record at the close of business on November 29, 2013.  The quarterly eligible dividend of $0.21 represents an annual dividend rate of $0.84 per share.

Eligible dividend designation
For purposes of the enhanced dividend tax credit rules contained in the Income Tax Act (Canada) (the "ITA") and any corresponding provincial and territorial tax legislation, all dividends paid by AutoCanada or any of its subsidiaries in 2010 and thereafter are designated as "eligible dividends" (as defined in 89(1) of the ITA), unless otherwise indicated.  Please consult with your own tax advisor for advice with respect to the income tax consequences to you of AutoCanada Inc. designating dividends as "eligible dividends".

SELECTED QUARTERLY FINANCIAL INFORMATION

The following table shows the unaudited results of the Company for each of the eight most recently completed quarters.  The results of operations for these periods are not necessarily indicative of the results of operations to be expected in any given comparable period.

(In thousands of dollars except Operating Data and  gross profit %)
	Q4 2011	Q1 2012	Q2 2012	Q3 2012	Q4 2012	Q1 2013	Q2 2013	Q3 2013
Income Statement Data
New vehicles	142,880	147,383	186,649	190,139	159,205	174,410	254,403	257,543
Used vehicles	53,719	60,453	62,822	62,816	57,260	62,656	77,113	85,975
Parts, service & collision repair	28,822	27,084	29,075	28,658	30,025	29,667	34,629	37,341
Finance, insurance & other	12,974	13,556	16,386	17,023	15,156	17,551	22,620	22,676
Revenue	238,395	248,476	294,932	298,636	261,646	284,284	388,765	403,535
New vehicles	11,267	12,046	14,646	15,461	15,422	15,941	20,664	20,510
Used vehicles	4,574	4,412	4,238	3,994	3,668	3,790	5,794	6,242
Parts, service & collision repair	14,588	14,057	15,299	15,144	15,386	15,231	17,586	20,113
Finance, insurance & other	11,824	12,344	14,867	15,513	13,866	16,164	20,783	20,831
Gross profit	42,253	42,859	49,050	50,112	48,342	51,126	64,827	67,696
Gross profit %	17.7%	17.2%	16.6%	16.8%	18.5%	18.0%	16.7%	16.8%
Operating expenses	34,086	35,381	37,659	38,361	37,739	40,353	48,639	51,080
Operating exp. as % of gross profit	80.7%	82.6%	76.8%	76.6%	78.1%	78.9%	75.0%	75.5%
Finance costs - floorplan	1,872	1,935	2,510	2,645	1,741	1,560	1,745	1,770
Finance costs - long-term debt	234	230	256	267	231	195	175	120
Reversal of impairment of intangibles	(25,543)	-	-	-	(222)	-	-	-
Income from investments in associates	-	-	83	130	255	201	648	555
Income taxes	8,144	1,441	2,216	2,379	2,540	2,309	3,976	3,920
Net earnings 4	23,608	4,113	6,712	6,807	6,605	6,822	10,823	10,968
EBITDA 1, 4 Basic earnings per share Diluted earnings per share	7,553 1.187 1.187	6,809 0.207 0.207	10,212 0.338 0.338	10,592 0.344 0.344	10,276 0.334 0.334	10,511 0.345 0.345	16,463 0.532 0.532	16,607 0.507 0.507
Operating Data Vehicles (new and used) sold	6,313	6,836	8,154	8,087	6,703	7,341	10,062	10,325
Vehicles (new and used) sold including GM5	6,313	6,836	8,557	8,783	7,378	8,123	11,399	11,405
New vehicles sold including GM5	4,180	4,403	5,964	6,178	4,956	5,665	8,246	8,023
New retail vehicles sold	3,405	3,434	4,400	4,410	3,982	4,118	5,487	5,986
New fleet vehicles sold	775	969	1,313	1,265	549	1,036	1,923	1,365
Used retail vehicles sold	2,133	2,433	2,441	2,412	2,172	2,187	2,652	2,974
Number of service & collision repair orders completed	75,911	74,439	78,104	78,944	78,001	77,977	93,352	97,074
Absorption rate 2	91%	81%	89%	89%	85%	82%	90%	88%
# of dealerships at period end	24	24	24	24	24	25	27	29
# of same store dealerships 3	21	21	21	22	22	22	22	22
# of managed dealerships at period end	0	0	2	2	2	3	3	3
# of service bays at period end	333	333	333	333	333	341	368	388
Same store revenue growth 3	24.8%	20.2%	2.4%	8.0%	7.4%	12.9%	26.2%	19.9%
Same store gross profit growth 3	20.6%	18.3%	7.1%	7.9%	11.9%	16.9%	25.8%	18.5%
Balance Sheet Data
Cash and cash equivalents	53,641	53,403	51,198	54,255	34,471	41,975	35,058	37,940
Restricted cash	-	-	-	-	10,000	10,000	10,000	-
Accounts receivable	42,448	51,364	52,042	54,148	47,944	57,144	69,136	62,105
Inventories	137,017	155,694	201,188	194,015	199,117	217,246	232,249	236,351
Revolving floorplan facilities	150,816	178,145	221,174	212,840	203,525	225,387	246,325	228,526

1	EBITDA has been calculated as described under "NON-GAAP MEASURES".
2	Absorption has been calculated as described under "NON-GAAP MEASURES".
3	Same store revenue growth & same store gross profit growth is calculated using franchised automobile dealerships that we have owned for at least 2 full years.
4	The results from operations have been lower in the first and fourth quarters of each year, largely due to consumer purchasing patterns during the holiday season, inclement weather and the reduced number of business days during the holiday season. As a result, our financial performance is generally not as strong during the first and fourth quarters than during the other quarters of each fiscal year. The timing of acquisitions may have also caused substantial fluctuations in operating results from quarter to quarter.
5	The Company has investments in General Motors dealerships that are not consolidated. This number includes 100% of vehicles sold by these dealerships in which we have less than 100% investment.

The following table summarizes the results for the three and nine month periods ended September 30, 2013 on a same store basis by revenue source and compares these results to the same period in 2012.

Same Store Revenue and Vehicles Sold
	For the Three Months Ended			For the Nine Months Ended
(in thousands of dollars)	September 30, 2013	September 30, 2012	% Change	September 30, 2013	September 30, 2012	% Change
Revenue Source
New vehicles - retail	185,459	148,379	25.0%	508,888	410,588	23.9%
New vehicles - fleet	38,149	37,585	1.5%	122,724	101,267	21.2%
New vehicles	223,608	185,964	20.2%	631,612	511,855	23.4%
Used vehicles - retail	55,845	47,722	17.0%	155,517	144,992	7.3%
Used vehicles - wholesale	19,232	12,680	51.7%	51,064	35,519	43.8%
Used vehicles	75,077	60,402	24.3%	206,581	180,511	14.4%
Finance, insurance and other	19,449	16,389	18.7%	56,791	45,542	24.7%
Subtotal	318,134	262,755	21.1%	894,984	737,908	21.3%
Parts, service and collision repair	30,459	27,891	9.2%	89,917	82,604	8.9%
Total	348,593	290,646	19.9%	984,901	820,512	20.0%
New retail vehicles sold	5,108	4,278	19.4%	14,144	11,866	19.2%
New fleet vehicles sold	1,306	1,265	3.2%	4,255	3,547	20.0%
Used retail vehicles sold	2,550	2,326	9.6%	7,114	7,063	0.7%
Total	8,964	7,869	13.9%	25,513	22,476	13.5%
Total vehicles retailed	7,658	6,604	13.8%	21,258	18,929	12.3%

The following table summarizes the results for the three and nine month periods ended September 30, 2013 on a same store basis by revenue source and compares these results to the same period in 2012.

Same Store Gross Profit and Gross Profit Percentage

AutoCanada Inc.
Condensed Interim Consolidated Statements of Comprehensive Income
(Unaudited)
(in thousands of Canadian dollars except for share and per share amounts)

	Three month period ended	Three month period ended	Nine month period ended	Nine month period ended
	September 30, 2013 $	September 30, 2012 $	September 30, 2013 $	September 30, 2012 $
Revenue (Note 6)	403,535	298,636	1,076,584	842,045
Cost of sales (Note 7)	(335,839)	(248,525)	(892,935)	(700,023)
Gross profit	67,696	50,111	183,649	142,022
Operating expenses (Note 8)	(51,080)	(38,361)	(140,073)	(111,401)
Operating profit before other income (expense)	16,616	11,750	43,576	30,621
Loss on disposal of assets	(27)	(1)	(34)	(61)
Income from investments in associates (Note 12)	555	130	1,405	213
Operating profit	17,144	11,879	44,947	30,773
Finance costs (Note 9)	(2,477)	(3,143)	(6,754)	(8,464)
Finance income (Note 9)	221	449	625	1,357
Net comprehensive income for the period before      taxation	14,888	9,185	38,818	23,666
Income tax (Note 10)	3,920	2,379	10,205	6,036
Net comprehensive income for the period	10,968	6,806	28,613	17,630
Earnings per share
Basic	0.507	0.343	1.389	0.888
Diluted	0.507	0.343	1.389	0.888
Weighted average shares
Basic	21,638,882	19,804,014	20,606,391	19,853,694
Diluted	21,638,882	19,804,014	20,606,391	19,853,694

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

Approved on behalf of the Company:

(Signed) "Gordon R. Barefoot", Director                  (Signed) "Michael Ross", Director

AutoCanada Inc.
Condensed Interim Consolidated Statements of Financial Position
(Unaudited)
(in thousands of Canadian dollars except for share and per share amounts)

	September 30, 2013  (Unaudited) $	December 31,  2012  (Audited) $
ASSETS
Current assets
Cash and cash equivalents	37,940	34,471
Restricted cash	-	10,000
Trade and other receivables (Note 13)	62,105	47,944
Inventories (Note 14)	236,351	199,117
Other current assets	1,815	1,102
	338,211	292,634
Property and equipment (Note 15)	67,097	38,513
Investments in associates (Note 12)	12,771	4,730
Intangible assets (Note 16)	96,322	66,403
Goodwill (Note 16)	8,645	380
Other long-term assets	7,360	7,699
	530,406	410,359
Current liabilities
Trade and other payables (Note 17)	52,139	35,587
Revolving floorplan facilities (Note 18)	228,526	203,525
Current tax payable	6,763	3,719
Current lease obligations	1,611	1,282
Current indebtedness (Note 18)	2,816	3,000
	291,855	247,113
Long-term indebtedness (Note 18)	33,647	23,937
Deferred tax	19,843	14,809
	345,345	285,859
EQUITY	185,061	124,500
	530,406	410,359

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

AutoCanada Inc. 
Condensed Interim Consolidated Statements of Changes in Equity
For the Periods Ended 
(Unaudited)
(in thousands of Canadian dollars)

	Share  capital $	Treasury  shares $	Contributed  surplus $	Total  capital $	Accumulated  deficit $	Equity $
Balance,  January 1, 2013	190,435	(935)	4,423	193,923	(69,423)	124,500
Net comprehensive income	-	-	-	-	28,613	28,613
Dividends declared on common shares (Note 20)	-	-	-	-	(11,647)	(11,647)
Common shares issued (Note 20)	43,811	-	-	43,811	-	43,811
Common shares repurchased (Note 20)	-	(557)	-	(557)	-	(557)
Restricted share units settled (Note 20)	-	202	-	202	-	202
Share-based compensation - vested	-	-	378	378	-	378
Share-based compensation - settled	-	-	(239)	(239)	-	(239)
Balance, September 30, 2013	234,246	(1,290)	4,562	237,518	(52,457)	185,061
	Share  capital $	Treasury  shares $	Contributed  surplus $	Total  capital $	Accumulated  deficit $	Equity $
Balance, January 1, 2012	190,435	-	3,918	194,353	(81,358)	112,995
Net comprehensive income	-	-	-	-	17,630	17,630
Dividends declared on common shares (Note 20)	-	-	-	-	(8,935)	(8,935)
Common shares repurchased (Note 20)	-	(910)	-	(910)	-	(910)
Share-based compensation	-	-	475	475	-	475
Balance, September 30, 2012	190,435	(910)	4,393	193,918	(72,663)	121,255

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

AutoCanada Inc.
Condensed Interim Consolidated Statements of Cash Flows
For the Periods Ended
(Unaudited)
(in thousands of Canadian dollars)

			Three month period ended September 30, 2013	Three month period ended September 30, 2012	Nine month period ended September 30, 2013	Nine month period ended September 30, 2012
Cash flows from operating activities:
Net comprehensive income			10,968	6,807	28,613	17,630
Income taxes (Note 10)			3,920	2,379	10,205	6,036
Amortization of prepaid rent			113	113	339	339
Amortization of property and equipment (Note 8)			1,599	1,140	4,278	3,193
Loss on disposal of assets			27	1	34	61
Share-based compensation			751	205	1,744	565
Income from investments in associates (Note 12)			(555)	(130)	(1,405)	(213)
Income taxes paid			(1,589)	(485)	(8,748)	(3,584)
Net change in non-cash working capital (Note 22)			(7,447)	(795)	(6,748)	(4,710)
			7,787	9,235	28,312	19,317
Cash flows from investing activities:
Business acquisitions (Note 11)			(38,756)	-	(65,368)	(4,154)
Investments in associates (Note 12)			-	-	(7,057)	-
Purchases of property and equipment (Note 15)			(677)	(9,161)	(7,437)	(13,150)
Prepayments of rent			-	-	-	(540)
Proceeds on sale of property and equipment			3,239	-	3,254	28
Reduction in restricted cash			10,000	-	10,000	-
Dividends received from investment in associate			421	-	421	-
			(25,773)	(9,161)	(66,187)	(17,816)
Cash flows from financing activities:
Proceeds from long-term debt			25,094	6,250	41,593	9,250
Repayment of long-term indebtedness			(146)	(98)	(31,900)	(292)
Common shares repurchased			-	-	(513)	(910)
Dividends paid			(4,291)	(3,169)	(11,647)	(8,935)
Proceeds from issuance of treasury shares (Note 20)			211	-	43,811	-
			20,868	2,983	41,344	(887)
Increase in cash			2,882	3,057	3,469	614
Cash and cash equivalents at beginning of period			35,058	51,198	34,471	53,641
Cash and cash equivalents at end of period			37,940	54,255	37,940	54,255

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

ABOUT AUTOCANADA

AutoCanada is one of Canada's largest multi-location automobile dealership groups, currently operating 32 franchised dealerships in six provinces and has over 1,500 employees. AutoCanada currently sells Chrysler, Dodge, Jeep, Ram, FIAT, Chevrolet, GMC, Buick, Infiniti, Nissan, Hyundai, Subaru, Mitsubishi, Audi, and Volkswagen branded vehicles. In 2012, our dealerships sold approximately 30,000 vehicles and processed approximately 309,000 service and collision repair orders in our 333 service bays during that time.

Our dealerships derive their revenue from the following four inter-related business operations: new vehicle sales; used vehicle sales; parts, service and collision repair; and finance and insurance. While new vehicle sales are the most important source of revenue, they generally result in lower gross profits than parts, service and collision repair operations and finance and insurance sales. Overall gross profit margins increase as revenues from higher margin operations increase relative to revenues from lower margin operations. We earn fees for arranging financing on new and used vehicle purchases on behalf of third parties.  Under our agreements with our retail financing sources we are required to collect and provide accurate financial information, which if not accurate, may require us to be responsible for the underlying loan provided to the consumer.

FORWARD LOOKING STATEMENTS

Certain statements contained in this press release are forward-looking statements and information (collectively "forward-looking statements"), within the meaning of the applicable Canadian securities legislation.  We hereby provide cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in these forward-looking statements.  Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as "will likely result", "are expected to", "will continue", "is anticipated", "projection", "vision", "goals", "objective", "target", "schedules", "outlook", "anticipate", "expect", "estimate", "could", "should", "expect", "plan", "seek", "may", "intend", "likely", "will", "believe" and similar expressions are not historical facts and are forward-looking and may involve estimates and assumptions and are subject to risks, uncertainties and other factors some of which are beyond our control and difficult to predict.  Accordingly, these factors could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements.  Therefore, any such forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this document.

The Company's Annual Information Form and other documents filed with securities regulatory authorities (accessible through the SEDAR websitewww.sedar.com describe the risks, material assumptions and other factors that could influence actual results and which are incorporated herein by reference.

Further, any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by applicable law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events.  New factors emerge from time to time, and it is not possible for management to predict all of such factors and to assess in advance the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.

NON-GAAP MEASURES

This press release contains certain financial measures that do not have any standardized meaning prescribed by Canadian GAAP.  Therefore, these financial measures may not be comparable to similar measures presented by other issuers.  Investors are cautioned these measures should not be construed as an alternative to net earnings (loss) or to cash provided by (used in) operating, investing, and financing activities determined in accordance with Canadian GAAP, as indicators of our performance.  We provide these measures to assist investors in determining our ability to generate earnings and cash provided by (used in) operating activities and to provide additional information on how these cash resources are used.  We list and define these "NON-GAAP MEASURES" below:

EBITDA

EBITDA is a measure commonly reported and widely used by investors as an indicator of a company's operating performance and ability to incur and service debt, and as a valuation metric.  The Company believes EBITDA assists investors in comparing a company's performance on a consistent basis without regard to depreciation and amortization and asset impairment charges which are non-cash in nature and can vary significantly depending upon accounting methods or non-operating factors such as historical cost.  References to "EBITDA" are to earnings before interest expense (other than interest expense on floorplan financing and other interest), income taxes, depreciation, amortization and asset impairment charges.

EBIT

EBIT is a measure used by management in the calculation of Return on capital employed (defined below).  Management's calculation of EBIT is EBITDA (calculated above) less depreciation and amortization.

Free Cash Flow

Free cash flow is a measure used by management to evaluate its performance.  While the closest Canadian GAAP measure is cash provided by operating activities, free cash flow is considered relevant because it provides an indication of how much cash generated by operations is available after capital expenditures.  It shall be noted that although we consider this measure to be free cash flow, financial and non-financial covenants in our credit facilities and dealer agreements may restrict cash from being available for distributions, re-investment in the Company, potential acquisitions, or other purposes.  Investors should be cautioned that free cash flow may not actually be available for growth or distribution of the Company.  References to "Free cash flow" are to cash provided by (used in) operating activities (including the net change in non-cash working capital balances) less capital expenditures (not including acquisitions of dealerships and dealership facilities).

Adjusted Free Cash Flow

Adjusted free cash flow is a measure used by management to evaluate its performance. Adjusted free cash flow is considered relevant because it provides an indication of how much cash generated by operations before changes in non-cash working capital is available after deducting expenditures for non-growth capital assets.  It shall be noted that although we consider this measure to be adjusted free cash flow, financial and non-financial covenants in our credit facilities and dealer agreements may restrict cash from being available for distributions, re-investment in the Company, potential acquisitions, or other purposes.  Investors should be cautioned that adjusted free cash flow may not actually be available for growth or distribution of the Company.  References to "Adjusted free cash flow" are to cash provided by (used in) operating activities (before changes in non-cash working capital balances) less non-growth capital expenditures.

Adjusted Average Capital Employed

Adjusted average capital employed is a measure used by management to determine the amount of capital invested in AutoCanada and is used in the measure of Adjusted Return on Capital Employed (described below).  Adjusted average capital employed is calculated as the average balance of interest bearing debt for the period (including current portion of long term debt, excluding revolving floorplan facilities) and the average balance of shareholders equity for the period, adjusted for impairments of intangible assets, net of deferred tax.  Management does not include future income tax, non-interest bearing debt, or revolving floorplan facilities in the calculation of adjusted average capital employed as it does not consider these items to be capital, but rather debt incurred to finance the operating activities of the Company.

Absorption Rate

Absorption rate is an operating measure commonly used in the retail automotive industry as an indicator of the performance of the parts, service and collision repair operations of a franchised automobile dealership. Absorption rate is not a measure recognized by GAAP and does not have a standardized meaning prescribed by GAAP. Therefore, absorption rate may not be comparable to similar measures presented by other issuers that operate in the retail automotive industry.  References to ''absorption rate'' are to the extent to which the gross profits of a franchised automobile dealership from parts, service and collision repair cover the costs of these departments plus the fixed costs of operating the dealership, but does not include expenses pertaining to our head office. For this purpose, fixed operating costs include fixed salaries and benefits, administration costs, occupancy costs, insurance expense, utilities expense and interest expense (other than interest expense relating to floor plan financing) of the dealerships only.

Average Capital Employed

Average capital employed is a measure used by management to determine the amount of capital invested in AutoCanada and is used in the measure of Return on Capital Employed (described below).  Average capital employed is calculated as the average balance of interest bearing debt for the period (including current portion of long term debt, excluding revolving floorplan facilities) and the average balance of shareholders equity for the period.  Management does not include future income tax, non-interest bearing debt, or revolving floorplan facilities in the calculation of average capital employed as it does not consider these items to be capital, but rather debt incurred to finance the operating activities of the Company.

Return on Capital Employed

Return on capital employed is a measure used by management to evaluate the profitability of our invested capital.  As a corporation, management of AutoCanada may use this measure to compare potential acquisitions and other capital investments against our internally computed cost of capital to determine whether the investment shall create value for our shareholders.  Management may also use this measure to look at past acquisitions, capital investments and the Company as a whole in order to ensure shareholder value is being achieved by these capital investments.  Return on capital employed is calculated as EBIT (defined above) divided by Average Capital Employed (defined above).

Adjusted Return on Capital Employed

Adjusted return on capital employed is a measure used by management to evaluate the profitability of our invested capital.  As a corporation, management of AutoCanada may use this measure to compare potential acquisitions and other capital investments against our internally computed cost of capital to determine whether the investment shall create value for our shareholders.  Management may also use this measure to look at past acquisitions, capital investments and the Company as a whole in order to ensure shareholder value is being achieved by these capital investments.  Adjusted return on capital employed is calculated as EBIT (defined above) divided by Adjusted Average Capital Employed (defined above).

Cautionary Note Regarding Non-GAAP Measures

EBITDA, EBIT, Free Cash Flow, Adjusted Free Cash Flow, Absorption Rate, Average Capital Employed and Return on Capital Employed are not earnings measures recognized by GAAP and do not have standardized meanings prescribed by GAAP.  Investors are cautioned that these non-GAAP measures should not replace net earnings or loss (as determined in accordance with GAAP) as an indicator of the Company's performance, of its cash flows from operating, investing and financing activities or as a measure of its liquidity and cash flows. The Company's methods of calculating EBITDA, EBIT, Free Cash Flow, Adjusted Free Cash Flow, Absorption Rate, Average Capital Employed and Return on Capital Employed may differ from the methods used by other issuers. Therefore, the Company's EBITDA, EBIT, Free Cash Flow, Adjusted Free Cash Flow, Absorption Rate, Average Capital Employed and Return on Capital Employed may not be comparable to similar measures presented by other issuers.

Additional information about AutoCanada Inc. is available at the Company's website at www.autocan.ca and www.sedar.com.

SOURCE AutoCanada Inc.