ACQ - <span class="simulate_din_font">AutoCanada Inc. announces an increase in earnings for the quarter ended March 31, 2012 and an increase in its quarterly dividend:</span> (CAD 0.15)

Company: Autocanada Inc
Stock Name: ACQ
Amount: CAD 0.15
Announcement Date: 08/05/2012
Record Date: 29/05/2012

Dividend Detail:

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A conference call to discuss the results for the reporting period ended
March 31, 2012 will be held on May 9, 2012 at 10:00 a.m. Eastern time
(8:00 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, May 8, 2012 /CNW/ - AutoCanada Inc. (the "Company" or
"AutoCanada") (TSX: ACQ) today announced financial results for the
reporting period ended March 31, 2012.

������������������������������������������������������������������2012 First Quarter Operating Results Revenue increased 17.8% or $37.6 million Gross profit increased by 17.6% or $6.4 million Same store revenue increased by 20.2% Same store gross profit increased by 18.3% EBITDA was $6.8 million vs. $4.0 million in Q1 of 2011, a 68.2% increase Pre-tax net earnings increased by $2.9 million or 107% to $5.6 million Net earnings increased by $2.1 million or 106% to $4.1 million The number of same store new vehicles retailed increased by 15.1% The number of same store used vehicles retailed increased by 23.6% Same store repair orders completed for the quarter were up 5.7%

In commenting on the financial results for the three month period ended
March 31, 2012, Pat Priestner, Chief Executive Officer of AutoCanada
Inc. stated that, "The first quarter of 2012 was a very strong quarter
for the Company with increases in revenue, gross profit and volume
sales in all four business streams. The strong sales performance in the
first quarter of 2012 resulted in another record first quarter in terms
of pre-tax earnings and EBITDA."

Commenting on the announcement of an increase in its quarterly dividend,
Mr. Priestner stated, "Our continued strong results were a primary
factor in our decision to raise the dividend for the fifth consecutive
quarter.�� Management believes that raising the quarterly dividend to an
annual rate of $0.60 per share will 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."

First Quarter 2012 Highlights

• 
  The Company generated net earnings of $4.1 million or earnings per share
  of $0.21 versus earnings per share of $0.10 in the first quarter of
  2011.�� Pre-tax earnings increased by $2.9 million to $5.6 million in
  the first quarter of 2012 as compared to $2.0 million in the same
  period in 2011.
  


• 
  Same store revenue increased by 20.2% in the first quarter of 2012,
  compared to the same quarter in 2011.�� Same store gross profit
  increased by 18.3% in the first quarter of 2012, compared to the same
  quarter in 2011.
  


• 
  Revenue from existing and new dealerships increased 17.8% to $248.4
  million in the first quarter of 2012 from $210.8 million in the same
  quarter in 2011.
  


• 
  Gross profit from existing and new dealerships increased 17.6% to $42.8
  million in the first quarter of 2012 from $36.4 million in the same
  quarter in 2011.
  


• 
  EBITDA increased 68.2% to $6.8 million in the first quarter of 2012 from
  $4.0 million in the same quarter in 2011.
  


• 
  Free cash flow remained constant at $3.2 million in the first quarter of
  2012 or $0.16 per share as compared to the first quarter of 2011,
  mainly due to income taxes paid in 2012.
  


• 
  Adjusted free cash flow increased to $4.2 million in the first quarter
  of 2012 or $0.21 per share as compared to $3.7 million or $0.18 per
  share in 2011.
  


• 
  Adjusted return on capital employed increased to 4.7% in the first
  quarter of 2012 as compared to 2.6% in 2011.
  


• 
  Return on capital employed on a trailing 12 month basis of 22.4% as
  compared to 13.3% at March 31, 2011.
  

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
2012:

(In thousands of dollars)		��	��	��	��	��	��	��	��	��
��	��	��	��		��	��	Total
Record date	Payment date	��	��	��	��	��	Declared		Paid
��	��	��	��	��	��	��	$		$
February 28, 2012 May 31, 2012	March 15, 2012 June 15, 2012	��	��	��	��	��	2,783 2,982		2,783 -
��	��	��	��	��	��	��	��	��

On May 8, 2012, the Board declared a quarterly eligible dividend of
$0.15 per common share on AutoCanada's outstanding Class A common
shares, payable on June 15, 2012 to shareholders of record at the close
of business on May 31, 2012.�� The quarterly eligible dividend of $0.15
represents an annual dividend rate of $0.60 per share or a 7% increase
in the dividend from the prior quarter.�� When compared to the annual
dividend rate at March 31, 2011, the Company has increased the dividend
by 200% from an annual rate of $0.20 to the new annualized rate of
$0.60 per share. The next scheduled dividend review will be in August
of 2012.

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 %)	��	��	��	��	��	��	��	��
��	Q2 2010	Q3 2010	Q4 2010	Q1 2011	Q2 2011	Q3 2011	Q4 2011	Q1 2012
Income Statement Data	��	��	��	��	��	��	��	��
�� New vehicles	144,655	141,533	113,967	128,303	196,850	172,688	142,880	147,383
�� Used vehicles	57,181	50,922	45,414	44,906	52,054	55,351	53,719	60,453
�� Parts, service & collision repair	27,501	26,540	28,351	26,462	28,256	26,871	28,673	26,913
�� Finance, insurance & other	12,442	11,060	10,151	11,113	13,577	14,109	13,046	13,648
Revenue	241,779	230,055	197,883	210,784	290,737	269,019	238,318	248,397
��	��	��	��	��	��	��	��	��
�� New vehicles	11,030	9,983	9,023	9,725	13,974	12,740	11,267	12,046
�� Used vehicles	4,906	4,221	3,659	3,486	4,302	5,020	4,573	4,412
�� Parts, service & collision repair	14,612	14,031	13,994	13,277	15,159	14,493	14,551	14,004
�� Finance, insurance & other	11,107	9,843	9,050	9,947	12,117	12,641	11,853	12,386
Gross profit	41,655	38,078	35,725	36,435	45,552	44,894	42,244	42,848
��	��	��	��	��	��	��	��	��
Gross profit %	17.2%	16.6%	18.1%	17.3%	15.7%	16.7%	17.7%	17.2%
Operating expenses	34,280	33,207	32,010	31,891	35,127	35,742	34,086	35,381
Operating exp. as % of gross profit	82.3%	87.2%	89.6%	87.5%	77.1%	79.6%	80.7%	82.6%
Finance costs - floorplan	2,230	2,042	1,594	1,685	2,311	2,190	1,871	1.935
Finance costs - long-term debt	230	278	332	283	323	296	234	230
Reversal of impairment of intangibles	-	-	(8,059)	-	-	-	(25,543)	-
Income taxes	1,330	692	2,418	690	2,029	1,646	8,144	1,441
Net earnings 4	3,624	1,983	7,575	1,994	5,951	5,230	23,608	4,113
EBITDA 1, 4 Basic earnings (loss) per share Diluted earnings (loss) per share	6,164 0.182 0.182	4,011 0.100 0.100	3,469 0.381 0.381	4,047 0.100 0.100	9,321 0.299 0.299	8,216 0.263 0.263	7,547 1.187 1.187	6,808 0.207 0.207
��	��	��	��	��	��	��	��	��
Operating Data Vehicles (new and used) sold	6,994	6,350	5,219	5,826	8,210	7,649	6,313	6,836
New retail vehicles sold	3,614	3,358	3,008	3,050	4,158	3,907	3,405	3,434
New fleet vehicles sold	919	831	306	796	1,900	1,340	775	969
Used retail vehicles sold	2,461	2,161	1,905	1,980	2,152	2,402	2,133	2,433
Number of service & collision repair orders completed	80,072	77,285	77,037	72,360	80,851	76,176	75,911	74,439
Absorption rate 2	87%	85%	86%	80%	91%	90%	91%	81%
# of dealerships at period end	23	23	23	23	22	22	24	24
# of same store dealerships 3	19	19	21	22	21	21	21	21
# of service bays at period end	339	339	339	339	322	322	333	333
Same store revenue growth 3	19.4%	6.7%	2.4%	2.7%	19.3%	21.6%	24.8%	20.2%
Same store gross profit growth 3	7.5%	(4.0)%	2.9%	2.9%	8.2%	22.9%	20.6%	18.3%
��	��	��	��	��	��	��	��	��
Balance Sheet Data	��	��	��	��	��	��	��	��
Cash and cash equivalents	31,880	34,329	37,541	39,337	43,837	49,366	53,641	53,403
Accounts receivable	46,787	37,149	32,832	42,108	51,539	44,172	42,448	51,380
Inventories	177,294	137,507	118,088	134,710	149,481	159,732	136,869	155,778
Revolving floorplan facilities	194,388	145,652	124,609	152,075	172,600	175,291	150,816	178,145

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.
��	��	��

The following table summarizes the results for the three-month period
ended March 31, 2012 on a same store basis by revenue source and
compares these results to the same period in 2011.

Same Store Revenue and Vehicles Sold
��	For the Three-Month Period Ended
(In thousands of dollars except % change and vehicle data)	March 31, 2012	March 31, 2011	% Change
��	��	��	��
Revenue Source New vehicles	139,748	118,452	18.0%
Used vehicles	58,099	�������� 43,047	35.0%
Finance, insurance and other	12,984	10,480	23.9%
Subtotal	210,831	171,979	22.6%
Parts, service and collision repair	25,554	24,622	3.8%
Total	236,385	196,601	20.2%
��	��	��	��
New vehicles - retail sold	3,155	�������� 2,740	15.1%
New vehicles - fleet sold	969	758	27.8%
Used vehicles sold	2,305	1,865	23.6%
Total	6,429	5,363	19.9%
Total vehicles retailed	5,460	4,605	18.6%
��	��	��	��

The following table summarizes the results for the three months ended
March 31, 2012 on a same store basis by revenue source and compares
these results to the same period in 2011.

Same Store Gross Profit and Gross Profit Percentage
��	For the Three-Month Period Ended
��	Gross Profit				��		Gross Profit %
(In thousands of dollars except % change and gross profit %)	Mar. 31, 2012		Mar. 31, 2011	% Change	��		Mar. 31, 2012		Mar. 31, 2011	% Change
Revenue Source	��		��	��	��		��		��	��
New vehicles	11,418		9,227	23.7%	��		8.2%		7.8%	0.4%
Used vehicles	4,175		3,429	21.8%	��		7.2%		8.0%	�������� (0.8)%
Finance, insurance and other	11,892		9,471	25.6%	��		91.6%		90.4%	�������������� 1.2%
Subtotal	27,485		22,127	24.2%	��		��		��	��
Parts, service and collision repair	13,299		�� 12,335	7.8%	��		52.0%		50.1%	�������������� 1.9%
Total	40,784		34,462	18.3%	��		17.3%		17.5%	(0.3)%
��	��	��	��	��	��	��	��

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
��	March 31, 2012 $	March 31, 2011 $
Revenue (Note 6)	������������248,397��	������������210,784��
Cost of sales (Note 7)	������������(205,548)��	������������(174,349)��
Gross profit	������������42,849��	������������36,435��
Operating expenses (Note 8)	������������(35,381)��	������������(31,891)��
Operating profit before other income	������������7,468��	������������4,544��
Loss on disposal of assets	������������(27)��	������������(7)��
Operating profit	������������7,441��	������������4,537��
Finance costs (Note 9)	������������(2,330)��	������������(2,120)��
Finance income (Note 9)	������������443��	������������267��
Net comprehensive income for the period before taxation	������������5,554��	������������2,684��
Income tax (Note 10)	������������1,441��	������������690��
Net comprehensive income for the period	������������4,113��	������������1,994��
��	��	��
Earnings per share (Note 18)��	��	��
Basic��	������������0.207��	������������0.100��
Diluted��	������������0.207��	������������0.100��
��	��	��
Weighted average shares (Note 18)��	��	��
Basic��	������������19,880,930��	������������19,880,930��
Diluted��	������������19,880,930��	������������19,880,930��

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) "Robin Salmon",
Director

AutoCanada Inc.

Condensed Interim Consolidated Statements of Financial Position

(Unaudited)

(in thousands of Canadian dollars except for share and per share
amounts)

��	March 31, ������������2012�� (Unaudited) $	December 31, ������������2011�� (Audited) $
ASSETS	��	��
Current assets	��	��
Cash and cash equivalents	������������53,403��	������������53,641��
Trade and other receivables (Note 11)	������������51,380��	������������42,448��
Inventories (Note 12)	������������155,778��	������������137,040��
Other current assets	������������1,303��	������������1,120��
��	������������261,864��	������������234,249��
Property and equipment	������������24,846��	������������25,975��
Intangible assets	������������66,181��	������������66,181��
Goodwill	������������380��	������������380��
Other long-term assets	������������8,036��	������������7,609��
��	������������361,307��	������������334,394��
LIABILITIES	��	��
Current liabilities	��	��
Trade and other payables (Note 13)	������������31,924��	������������32,303��
Revolving floorplan facilities (Note 14)	������������178,145��	������������150,816��
Current tax payable	������������9,204��	������������2,046��
Current lease obligations (Note 15)	������������663��	������������1,204��
Current indebtedness (Note 14)	������������2,833��	������������2,859��
��	������������222,769��	������������189,228��
Long-term indebtedness (Note 14)	������������20,071��	������������20,115��
Deferred tax	������������3,875��	������������12,056��
��	������������246,715��	������������221,399��
EQUITY	��	��
Share capital (Note 18)	������������190,435��	������������190,435��
Contributed surplus	������������4,186��	������������3,918��
Accumulated deficit	������������(80,029)��	������������(81,358)��
��	������������114,592��	������������112,995��
��	������������361,307��	������������334,394��

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 $	Contributed surplus $	Total capital $	Accumulated deficit $	Equity $
Balance,�� January 1, 2012��	������������190,435��	������������3,918��	������������194,353��	������������(81,358)��	������������112,995��
Net comprehensive income	������������-��	������������-��	������������-��	������������4,113��	������������4,113��
Dividends declared on common shares	������������-��	������������-��	������������-��	������������(2,784)��	������������(2,784)��
Share based compensation	������������-��	������������268��	������������268��	������������-��	������������268��
Balance, March 31, 2012	������������190,435��	������������4,186��	������������194,621��	������������(80,029)��	������������114,592��
��	��	��	��	��	��
��	Share capital $	Contributed surplus $	Total capital $	Accumulated deficit $	Equity $
Balance, January 1, 2011��	������������190,435��	������������3,918��	������������194,353��	������������(111,979)��	������������82,374��
Net comprehensive income	������������-��	������������-��	������������-��	������������1,994��	������������1,994��
Dividends declared on common shares	������������-��	������������-��	������������-��	������������(795)��	������������(795)��
Balance, March 31, 2011	������������190,435��	������������3,918��	������������194,353��	������������(110,780)��	������������83,573��

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 March 31, 2012	Three month period ended March 31, 2011
Cash provided by (used in):	��	��	��	��
Operating activities	��	��	��	��
Net comprehensive income before tax	��	��	������������4,113��	������������1,994��
Income taxes	��	��	������������1,441��	������������690��
Amortization of prepaid rent	��	��	������������113��	������������113��
Amortization of property and equipment	��	��	������������1,024��	������������1,080��
Share-based compensation	��	��	������������163��	������������-��
Loss on disposal of assets	��	��	������������27��	������������7��
Income taxes paid	��	��	������������(2,372)��	������������-��
Net change in non-cash working capital	��	��	������������(1,001)��	������������284��
��	��	��	������������3,508��	������������4,168��
Investing activities	��	��	��	��
Purchases of property and equipment	��	��	������������(361)��	������������(930)��
Prepayments of rent	��	��	������������(540)��	������������(540)��
Proceeds on sale of property and equipment	��	��	������������33��	������������-��
��	��	��	������������(868)��	������������(1,470)��
Financing activities	��	��	��	��
Repayment of long-term indebtedness	��	��	������������(94)��	������������(107)��
Dividends paid	��	��	������������(2,784)��	������������(795)��
��	��	��	������������(2,878)��	������������(902)��
Increase (decrease) in cash	��	��	������������(238)��	������������1,796��
Cash and cash equivalents at beginning of period	��	��	������������53,641��	������������37,541��
Cash and cash equivalents at end of period	��	��	������������53,403��	������������39,337��

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 25 franchised dealerships in
British Columbia, Alberta, Manitoba, Ontario, New Brunswick and Nova
Scotia. In 2012, our dealerships sold approximately 28,000 vehicles and
processed approximately 300,000��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 used vehicle sales, 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 website
www.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.

��

For further information:

Jeff Christie, CA
Vice-President, Finance
Phone:�� (780) 732-7164 Email:��jchristie@autocan.ca