AutoCanada Income Fund releases financial results for the reporting period ended December 31, 2007



    A conference call to discuss the results for the period ended
    December 31, 2007 will be held on March 19, 2008 at 3 p.m. Eastern time.
    To participate in the conference call, please dial 1-800-733-7560 or
    (416) 644-3415 approximately 10 minutes prior to the call. A live and
    archived audio webcast of the conference call will also be available on
    the Fund's website www.autocan.ca.

    EDMONTON, March 19 /CNW/ - AutoCanada Income Fund (the "Fund")
(TSX: ACQ.UN) today announced financial results for the year ended December
31, 2007 and the three-month period ended December 31, 2007. For information
purposes, the Fund has also provided a compilation of results for the year
ended December 31, 2006, combining financial results of the Fund for the
period from May 11, 2006 to December 31, 2006 with selected unaudited results
of the operations of Canada One Auto Group ("CAG"), the Fund's predecessor for
the period from January 1, 2006 to May 10, 2006.

    
                       2007 Annual Operating Highlights

                     - Revenue increased by 20.3%
                     - Gross profit increased by 22.8%
                     - Same store revenue increased by 11.3%
                     - Same store gross profit increased by 12.1%
                     - EBITDA increased by 19.5%
                     - The Fund retailed 23,300 vehicles
                     - The Fund completed 231,700 repair orders


                       2007 Fourth Quarter Operating Highlights

                     - Revenue increased by 11.7%
                     - Gross profit increased by 15.9%
                     - Same store revenue increased by 5.3%
                     - Same store gross profit increased by 6.5%
                     - EBITDA increased by 8.2%


    2007 Highlights

    -   For the period from January 1, 2007 to December 31, 2007, the Fund
        generated net earnings of $3,359 or basic earnings per unit of
        $0.186, standardized distributable cash of $0.884 per unit and
        adjusted distributable cash of $1.147 per unit, and declared
        distributions of $1.00 per unit, for a standardized payout ratio of
        113.0% and an adjusted payout ratio of 87.6%.

    -   Same store revenue and gross profit increased by 11.3% and 12.1%
        respectively in the year ended December 31, 2007, compared to the
        results of the Fund and its predecessor to the 2006 year.

    -   Revenue from existing and new dealerships increased by 20.3% to
        $834.8 million in the year ended December 31, 2007 from the
        $693.7 million that was generated by the Fund and its predecessor in
        2006.

    -   Gross profit from existing and new dealerships increased by 22.8% to
        $138.9 million in the year ended December 31, 2007 from the
        $113.1 million that was generated by the Fund and its predecessor in
        the 2006 year.

    -   EBITDA increased by 19.5% to $25.1 million in the year ended
        December 31, 2007 from the $21.0 million that was generated by the
        Fund and its predecessor in the 2006 year.

    -   Net earnings decreased by 77.5% to $3.8 million in the year ended
        December 31, 2007 from $16.7 million in the 2006 year largely as a
        result of a charge of $17.4 million relating to future income taxes.
        As disclosed in the second quarter of 2007 amendments to Canada's
        Income Tax Act related to publicly traded income trusts announced in
        October 2006 took effect on June 22, 2007. The consequences of these
        changes to Canadian income tax legislation are that public income
        trusts will no longer be able to deduct distributions from taxable
        income (which transfers the tax burden to unitholders). Starting in
        2011, public income trusts must pay taxes of 29.5% and 28.0% for 2012
        and beyond. Distributions will be taxed similar to dividends. As a
        result, as required by Canadian accounting policies, The Fund
        recorded future income taxes of approximately $17.4 million related
        to the legislative amendments that will take effect in 2011.

    -   The Fund continued to execute its acquisition strategy, which
        includes expanding its presence in Western Canada, by financing the
        acquisition and entering into a management services agreement with
        respect to Grande Prairie Nissan on February 7, 2007 as well as
        entering into a similar arrangement with respect to a new Nissan
        Dealership in Prince George, British Columbia which commenced
        operations on August 31, 2007.

    -   The Fund commenced operations of its Open Point in Grande Prairie,
        Alberta, Grande Prairie Mitsubishi in June of 2007.

    -   On November 5, 2007, the Fund announced that it has been awarded a
        Mitsubishi Open Point in Prince George, British Columbia to be called
        Northland Mitsubishi.

    Fourth Quarter 2007 Highlights

    -   For the fourth quarter of 2007, the Fund generated standardized
        distributable cash of $0.156 per unit and adjusted distributable cash
        of $0.242 per unit, and declared distributions of $0.250 per unit,
        for a standardized payout ratio of 160.2% and an adjusted payout
        ratio of 103.3%.

    -   Same store revenue and gross profit increased by 5.3% and 6.5%
        respectively in the fourth quarter of 2007, compared to same quarter
        in 2006.

    -   Revenue from existing and new dealerships increased by 11.7% to
        $196,711 million in the fourth quarter of 2007 from $176,079 million
        in the same quarter in 2006.

    -   Gross profit from existing and new dealerships increased by 15.9% to
        $33,522 million in the fourth quarter of 2007 from $28,930 million in
        the same quarter in 2006.

    -   EBITDA increased by 8.2% to $5.3 million in the fourth quarter of
        2007 from $4.9 million in the same quarter in 2006.

    -   Net earnings increased by 78.6% to $6.5 million in the fourth quarter
        of 2007 from $3.6 million in the same quarter in 2006.
    

    "We are very pleased with the financial results for the 2007 year,
especially the continued organic growth of our existing dealerships" said
Patrick Priestner, AutoCanada's founder and Chief Executive Officer. "We
continue to strengthen our relationships with the OEM's that we currently
represent as well as new OEM's that the Fund does not currently do business
with. We are very pleased with the progress that we have made in executing our
business strategy and believe that we are well positioned for further growth
as a result of these efforts. Unlike the United States, Canadian retail
automotive sales remain strong and predicted to remain robust in 2008. The
Canadian new vehicle industry was up 2.4% in 2007 and I am pleased to see that
the Fund's new vehicle sales increased 14.5% on same store basis for the year.
The fourth quarter of 2007 provided a challenging business environment as a
result of the rapid appreciation of the Canadian dollar. Manufacturers have
reacted to the appreciation of the Canadian dollar by offering increased
incentives and lowering retail prices of new vehicles which in turn resulted
in lower used vehicle prices. As a result, Canadians have been taking
advantage of their improved purchasing power and although prices have
declined, our margins remain relatively unchanged."

    Distributions to Unitholders

    The Fund's policy is to distribute annually to Unitholders available cash
provided by operations after cash required for capital expenditures, working
capital reserves, growth capital reserves and other reserves considered
advisable by the Trustees of the Fund. The policy allows the Fund to make
stable monthly distributions to its Unitholders based on the Fund's estimate
of distributable cash for the year. The Fund pays cash distributions on or
about the 15th of each month to Unitholders of record on the last business day
of the previous month.
    The following table summarizes the distributions declared by the Fund for
the period from January 1, 2007 to December 31, 2007.

    
    (In thousands of dollars)

                                                Exchangeable
                                  Fund Units       Units          Total
                    Payment      -------------- -------------- --------------
    Record date     date       Declared  Paid Declared  Paid Declared  Paid
                                     $      $       $      $       $      $

    January 31,     February 15,    912    912     775    775   1,687  1,687
     2007            2007
    February 28,    March 15,       912    912     775    775   1,687  1,687
    2007             2007
    March 31,       April 16,       912    912     775    775   1,687  1,687
     2007            2007
    April 30,       May 15,         912    912     775    775   1,687  1,687
     2007            2007
    May 31, 2007    June 15, 2007   912    912     775    775   1,687  1,687
    June 29, 2007   July 16, 2007   912    912     775    775   1,687  1,687
    July 31, 2007   August 15,      912    912     776    776   1,688  1,688
                     2007
    August 31,      September 17,   912    912     776    776   1,688  1,688
     2007            2007
    September 28,   October 15,     912    912     776    776   1,688  1,688
     2007            2007
    October 31,     November 15,    913    913     775    775   1,688  1,688
     2007            2007
    November 30,    December 17,    912    912     776    776   1,688  1,688
     2007            2007
    December 31,    January 15,(1)  912      -     775      -   1,687      -
     2007            2008
                                --------------------------------------------
                                 10,945 10,033   9,304  8,529  20,249 18,562

    Note:
    (1) Distributions payable to all Unitholders in the amount of $1,687 as
        at December 31, 2007 were paid in January, 2008.

    Distributions are paid on Fund Units and Exchangeable Units. As of
    December 31, 2007 the following numbers of units were outstanding:

    Fund Units                                                    10,949,500
    Exchangeable Units                                             9,307,500
                                                                 ------------

                                                                  20,257,000
                                                                 ------------
                                                                 ------------
    

    During the year ended December 31, 2007, the Fund declared distributions
of $1.00 per Fund Unit to Unitholders and holders of Exchangeable Units. The
distributions in the period ended December 31, 2007 were funded from cash flow
generated from operations. The Fund reviews its distribution policy on a
periodic basis.

    SELECTED ANNUAL FINANCIAL INFORMATION AND RESULTS FROM OPERATIONS

    The following table shows: the audited results of the Fund from May 11,
2006 to December 31, 2006, the combined unaudited results of CAG and the Fund
for the year ended December 31, 2006 and the audited results of the Fund for
the year ended December 31, 2007. 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 %)              The Fund       The Fund       The Fund
                                                      & CAG
                                                     Combined
                                      (Audited)     (Unaudited)     (Audited)

                                        May 11,    January 1 to        2007
                                       2006 to       December
                                      December       31, 2006
                                      31, 2006

    Income Statement Data
    Revenue                            471,932        693,712        834,815
      New vehicles                     264,438        378,124        472,602
      Used vehicles                    130,809        201,639        224,991
      Parts, service & collision
       repair                           51,776         77,861         92,140
      Finance, insurance & other        24,909         36,088         45,082
    Gross profit                        77,523        113,113        138,892
      New vehicles                      17,980         25,964         32,512
      Used vehicles                     12,471         18,101         19,685
      Parts, service & collision
       repair                           23,249         34,875         44,289
      Finance, insurance & other        23,823         34,173         42,406
      Gross profit %                     16.4%          16.3%          16.6%
    Sales, general & admin expenses     56,408         84,125        103,715
    Floorplan interest expense           5,195          7,745          9,594
    Other interest & bank charges          546            949          1,250
    Future income taxes                      -              -         17,364
    Net earnings(1)(5)                  12,474         16,700          3,759
    EBITDA(2)(5)                        15,521         20,979         25,077
    Basic earnings (loss) per unit       0.616            n/a          0.186
    Diluted earnings (loss) per unit     0.616            n/a          0.185

    Operating Data
    Vehicles (new and used) sold         13,082         19,350        23,296
    New retail vehicles sold              6,455          9,141        11,135
    New fleet vehicles sold               1,107          1,708         2,521
    Used retail vehicles sold             5,520          8,501         9,640
    Number of service & collision
     repair orders completed            142,303        215,232       231,723
    Absorption rate(3)                      94%            92%           98%
    No. of dealerships                       16             16            19
    No. of same store dealerships(4)          9              9            11
    No. of service bays at period end       245            245           260
    Same store revenue growth(4)            n/a           4.4%         11.3%
    Same store gross profit growth(4)       n/a          10.6%         12.1%

    (1) Net earnings for CAG from January 1, 2006 to May 10, 2006 are net
        earnings as defined by GAAP plus income taxes, stock-based
        compensation and shareholder bonuses (including the performance
        component related to dealership management's compensation) to be
        consistent with the results of the Fund from May 11, 2006 to
        December 31, 2006.
    (2) EBITDA has been calculated as described under "Non-GAAP Measures"
        above. EBITDA for CAG is defined under "Non-GAAP Measures" with the
        exception that to facilitate comparison to the Fund we have added
        stock-based compensation and shareholder bonuses (including the
        performance component related to dealership management's
        compensation) expensed by CAG.
    (3) Absorption has been calculated as described under "Non-GAAP
        Measures" above.
    (4) 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.
    (5) 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 also cause substantial fluctuations in
        operating results from quarter to quarter.

    SELECTED QUARTERLY FINANCIAL INFORMATION AND RESULTS FROM OPERATIONS

    The following table shows the unaudited results of the Fund: For the
51-day period ended June 30, 2006, the three-month period ended September 30,
2006, the three-month period ended December 31, 2006, the three-month period
ended March 31, 2007, the three-month period ended June 30, 2007, the
three-month period ended September 30, 2007, and the three-month period ended
December 31, 2007. 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 %)

                                   The Fund   The Fund   The Fund

                                      Q2         Q3         Q4
                                     2006       2006       2006
                                  (51 days)

    Income Statement Data
    Revenue                         105,992    189,861    176,079
      New vehicles                   59,044    106,424     98,970
      Used vehicles                  30,487     53,897     46,425
      Parts, service & collision
       repair                        10,734     19,632     21,410
      Finance, insurance & other      5,727      9,908      9,274
    Gross profit                     17,775     30,818     28,930
      New vehicles                    4,190      6,792      6,998
      Used vehicles                   3,294      5,563      3,614
      Parts, service & collision
       repair                         5,014      8,721      9,514
      Finance, insurance & other      5,277      9,742      8,804
      Gross profit %                  16.8%      16.2%      16.4%
    Sales, general & admin expenses  12,245     22,481     21,682
    Floorplan interest expense        1,256      1,854      2,085
    Other interest & bank charges        24        117        405
    Future income taxes                   -          -          -
    Net earnings(1)(5)                3,631      5,220      3,623
    EBITDA(2)(5)                      4,249      6,366      4,906

    Operating Data
    Vehicles (new and used) sold      3,023      5,369      4,690
    New retail vehicles sold          1,515      2,741      2,199
    New fleet vehicles sold             211        371        525
    Used retail vehicles sold         1,297      2,257      1,966
    Number of service & collision
     repair orders completed         32,565     54,345     55,393
    Absorption rate(3)                  n/a        97%        96%
    No. of dealerships                   14         14         16
    No. of same store
     dealerships(4)                       9          9          9
    No. of service bays at
     period end                         223        223        245
    Same store revenue
     growth(4)                          n/a       3.8%      10.4%
    Same store gross profit
     growth(4)                          n/a      12.5%       6.3%

    Balance Sheet Data
    Cash and cash equivalents        20,271     20,265     20,880
    Accounts receivable              25,875     30,562     27,742
    Inventories                     145,888    101,252    112,680
    Revolving floorplan facilities  146,283    103,297    113,357


    (In thousands of dollars except
    Operating Data and gross profit %)

                                   The Fund   The Fund   The Fund   The Fund

                                      Q1         Q2         Q3         Q4
                                     2007       2007       2007       2007

    Income Statement Data
    Revenue                         194,379    214,711    229,014    196,711
      New vehicles                  109,862    117,204    133,853    111,683
      Used vehicles                  53,020     62,389     59,114     50,468
      Parts, service & collision
       repair                        21,908     23,228     23,142     23,863
      Finance, insurance & other      9,590     11,890     12,905     10,697
    Gross profit                     31,292     36,777     37,301     33,522
      New vehicles                    7,000      8,312      9,024      8,176
      Used vehicles                   4,914      6,082      4,943      3,746
      Parts, service & collision
       repair                        10,223     11,305     11,267     11,494
      Finance, insurance & other      9,155     11,078     12,067     10,106
      Gross profit %                  16.1%      17.1%      16.3%      17.0%
    Sales, general & admin expenses  23,634     27,522     26,905     25,654
    Floorplan interest expense        2,069      2,414      2,679      2,432
    Other interest & bank charges       316        326        312        296
    Future income taxes                   -     19,107        443     (2,186)
    Net earnings(1)(5)                4,483    (13,362)     6,168      6,470
    EBITDA(2)(5)                      5,424      6,743      7,600      5,310

    Operating Data
    Vehicles (new and used) sold      5,440      6,089      6,404      5,363
    New retail vehicles sold          2,295      2,866      3,344      2,630
    New fleet vehicles sold             886        535        543        557
    Used retail vehicles sold         2,259      2,688      2,517      2,176
    Number of service & collision
     repair orders completed         57,876     58,157     58,138     57,552
    Absorption rate(3)                  92%        94%       104%        93%
    No. of dealerships                   17         18         19         19
    No. of same store
     dealerships(4)                       9          9         11         11
    No. of service bays at
     period end                         250        256        260        260
    Same store revenue
     growth(4)                        24.1%       6.6%       8.2%       5.3%
    Same store gross profit
     growth(4)                        20.1%      13.4%       7.2%       6.5%

    Balance Sheet Data
    Cash and cash equivalents        24,268     21,077     20,179     18,014
    Accounts receivable              31,200     35,980     39,940     34,274
    Inventories                     117,034    132,814    147,419    142,128
    Revolving floorplan facilities  118,974    133,731    152,390    143,655

    (1) Net earnings for CAG from January 1, 2006 to May 10, 2006 are net
        earnings as defined by GAAP plus income taxes, stock-based
        compensation and shareholder bonuses (including the performance
        component related to dealership management's compensation) to be
        consistent with the results of the Fund from May 11, 2006 to
        December 31, 2006.
    (2) EBITDA has been calculated as described under "Non-GAAP Measures"
        above. EBITDA for CAG is defined under "Non-GAAP Measures" with the
        exception that to facilitate comparison to the Fund we have added
        stock-based compensation and shareholder bonuses (including the
        performance component related to dealership management's
        compensation) expensed by CAG.
    (3) Absorption has been calculated as described under "Non-GAAP
        Measures" above.
    (4) 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.
    (5) 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 also cause substantial fluctuations in
        operating results from quarter to quarter.

    The following tables summarizes gross profit for the year ended
December 31, 2007 on a same store basis and compares these results to the same
period in 2006.

             Same Store Gross Profit and Gross Profit Percentage
    -------------------------------------------------------------------------
                                       For the Year Ended
                         ----------------------------------------------------
    (In thousands of          Gross Profit               Gross Profit %
     dollars except %    -------------------------  -------------------------
     change and gross   Dec. 31, Dec. 31,    %     Dec. 31, Dec. 31,    %
     profit %)            2007     2006    Change    2007     2006    Change
                          ----     ----    ------    ----     ----    ------
    Revenue Source
    New vehicles         22,703   19,536    16.2%     7.0%     6.9%     0.1%
    Used vehicles        11,883   11,897   (0.1)%     8.1%     8.6%   (0.5)%
    Parts, service and
     collision repair    30,865   26,115    18.2%    47.9%    45.1%     2.8%
    Finance, insurance
     and other           29,826   27,408     8.8%    94.4%    95.5%   (1.1)%
                         ------   ------     ----    -----    -----   ------
    Total                95,277   84,956    12.1%    16.9%    16.7%     0.2%
                         ------   ------    -----    -----    -----     ----
                         ------   ------    -----    -----    -----     ----

    The following table summarizes the results for the three-month period
ended December 31, 2007 on a same store basis by revenue source and compares
these results to the same period in 2006.

             Same Store Gross Profit and Gross Profit Percentage
    -------------------------------------------------------------------------
                                   For the Three-Month Period Ended
                         ----------------------------------------------------
    (In thousands of          Gross Profit               Gross Profit %
     dollars except %    -------------------------  -------------------------
     change and gross   Dec. 31, Dec. 31,    %     Dec. 31, Dec. 31,    %
     profit %)            2007     2006    Change    2007     2006    Change
                          ----     ----    ------    ----     ----    ------
    Revenue Source
    New vehicles          5,542    5,081     9.1%     7.3%     7.0%     0.3%
    Used vehicles         2,059    2,198   (6.3)%     6.6%     7.5%   (0.9)%
    Parts, service and
     collision repair     7,930    6,939    14.3%    48.5%    44.4%     4.1%
    Finance, insurance
     and other            6,878    6,830     0.7%    93.6%    96.0%   (2.3)%
                          -----    -----     ----    -----    -----   ------
    Total                22,409   21,048     6.5%    17.1%    16.9%     0.2%
                         ------   ------     ----    -----    -----     ----
                         ------   ------     ----    -----    -----     ----
    

    About AutoCanada

    The Fund commenced business operations on May 11, 2006, when it completed
an initial public offering (the "IPO") of 10,209,500 trust units ("Fund
Units"), at a price of $10 per unit, for aggregate gross proceeds of
$102,095,000. Concurrent with the closing of the IPO, the Fund used the
proceeds from the IPO to acquire an indirect 50.4% interest in AutoCanada
Limited Partnership ("AutoCanada LP") and AutoCanada LP used such net proceeds
to acquire the net assets (the "Purchased Assets") of Canada One Auto Group.
On May 31, 2006, as a result of the exercise of the over allotment option
granted to underwriters, the Fund acquired a further 3.65% interest in the
Purchased Assets and thus increased its total interest in the Purchased Assets
to 54.05%.
    AutoCanada is Canada's only publicly traded entity with interests
exclusively in the operation of franchised automobile dealerships. Through its
54% interest in AutoCanada LP, it operates or manages 19 franchised automobile
dealerships in six provinces and has over 1,070 employees. It currently sells
various new vehicle brands, including Chrysler, Dodge, Jeep(R), Hyundai,
Mitsubishi, Subaru, and, through managed dealerships, Nissan. In 2007, its
franchised automobile dealerships sold approximately 23,300 vehicles and
processed approximately 231,700 service and collision repair orders in 260
service bays, generating revenue of approximately $835 million.

    Forward Looking Statements

    Certain statements contained in management's discussion and analysis
include statements which contain words such as "anticipate", "expect",
"estimate", "could", "should", "expect", "plan", "seek", "may", "intend",
"likely", "will", "believe" and similar expressions, statements relating to
matters that are not historical facts, and such statements of the beliefs,
intentions and expectations of AutoCanada about development, results and
events which will or may occur in the future, constitute "forward-looking
information" within the meaning of applicable Canadian securities legislation
and are based on certain assumptions and analysis made by AutoCanada and
derived from experience and perceptions. Forward-looking information in
management's discussion and analysis includes, but is not limited to: trends
and developments in the automotive industry; business strategies and outlooks;
expansion and growth of business and operations; and anticipated acquisitions.
    All such forward-looking information is based on certain assumptions and
analyses made by AutoCanada in light of management's experience and perception
of historical trends, current conditions and expected future developments, as
well as other factors AutoCanada believes are appropriate in the
circumstances. The risks, uncertainties, and assumptions are difficult to
predict and may affect operations, and may include, without limitation:
foreign exchange fluctuations; equipment and labour shortages and inflationary
costs; general economic conditions; industry conditions; changes in applicable
environmental, taxation and other laws and regulations as well as how such
laws and regulations are interpreted and enforced; operating risks; risks
inherent in the ability to generate sufficient cash flow from operations to
meet current and future obligations; increased competition; stock market
volatility; opportunities available to or pursued by AutoCanada; the ability
to obtain financing as and when needed; and other factors, many of which are
beyond the control of AutoCanada. The foregoing factors are not exhaustive and
are further discussed in AutoCanada's final prospectus dated May 3, 2006 and
the Fund's Annual Information Form for the year ended December 31, 2007 both
of which are filed on SEDAR at www.sedar.com.

    Actual results, performance or achievements could differ materially from
those expressed in, or implied by, this forward-looking information and,
accordingly, no assurance can be given that any of the events anticipated by
the forward-looking information will transpire or occur, or if any of them do
so, what benefits will be derived therefrom. Except as required by applicable
law, AutoCanada disclaims any intention or obligation to update or revise any
forward-looking information, whether as a result of new information, future
events or otherwise. The forward-looking information contained in this
management's discussion and analysis are expressly qualified by this
cautionary statement.

    Non-GAAP Measures

    References to "EBITDA" are to earnings before interest expense (other
than interest expense on floorplan financing and other interest), income
taxes, depreciation and amortization. Management believes that, in addition to
earnings or loss, EBITDA is a useful supplemental measure of both performance
and cash available for distribution before debt service, changes in working
capital, capital expenditures and income taxes.
    References to "standardized distributable cash" and "adjusted
distributable cash" are to cash flow provided by operating activities
available for distribution to Unitholders of the Fund (the "Unitholders") in
accordance with the distribution policies of the Fund. Standardized
distributable cash and adjusted distributable cash of the Fund are measures
generally used by Canadian open-ended trusts as an indicator of financial
performance. As two of the factors that may be considered relevant by
prospective investors is the cash distributed by the Fund relative to the
price of the Units, management believes that standardized distributable cash
and adjusted distributable cash of the Fund are useful supplemental measures
that may assist prospective investors in assessing an investment in the Fund.
Standardized distributable cash is calculated as cash flows from operating
activities, including the effects of changes in non-cash working capital, less
total capital expenditures. Adjusted distributable cash is calculated as cash
flows provided by operating activities before changes in non-cash working
capital, less purchases of non-growth property and equipment.
    References to "standardized payout ratio" represent a comparison of
distributions declared to standardized distributable cash. References to
"adjusted payout ratio" represent a comparison of distributions declared to
adjusted distributable cash. Management believes that both standardized payout
ratio and adjusted payout ratio are indicators of the Fund's conservatism and
its ability to continue to make distributions to unitholders at current rates.
    EBITDA, standardized distributable cash, adjusted distributable cash,
standardized payout ratio and adjusted payout ratio are not earnings measures
recognized by GAAP and do not have standardized meanings prescribed by GAAP.
Investors are cautioned that EBITDA, standardized distributable cash, adjusted
distributable cash, standardized payout ratio and adjusted payout ratio should
not replace net earnings or loss (as determined in accordance with GAAP) as an
indicator of the Fund's performance, of its cash flows from operating,
investing and financing activities or as a measure of its liquidity and cash
flows. The Fund's methods of calculating EBITDA, adjusted distributable cash,
and adjusted payout ratio may differ from the methods used by other issuers.
Therefore, the Fund's EBITDA, adjusted distributable cash, and adjusted payout
ratio may not be comparable to similar measures presented by other issuers.
For a reconciliation of adjusted distributable cash to standardized
distributable cash, please see "Adjusted Distributable Cash" below.
    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 and do not include expenses pertaining
to head office. 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.
    Additional information about AutoCanada Income Fund is available at the
Fund's website at www.autocan.ca and www.sedar.com.

    
    AutoCanada Income Fund
    Consolidated Balance Sheet
    As at December 31, 2007
    -------------------------------------------------------------------------

    (expressed in Canadian dollar thousands)
                                                          2007          2006

    ASSETS                                                   $             $

    Current assets
    Cash and cash equivalents                           18,014        20,880
    Restricted cash (note 5)                             4,356         3,476
    Accounts receivable                                 34,274        27,742
    Inventories (note 6)                               142,128       112,680
    Due from related parties                                28         2,640
    Prepaid expenses                                     1,561         1,419
                                                    -----------   -----------
                                                       200,361       168,837

    Property & equipment (note 7)                       11,445        11,839
    Intangible assets (note 8)                          79,956        79,034
    Goodwill                                            82,501        78,744
    Other assets                                            78            78
                                                    -----------   -----------
                                                       374,341       338,532
                                                    -----------   -----------
                                                    -----------   -----------
    LIABILITIES

    Current liabilities
    Accounts payable and accrued liabilities            22,488        23,521
    Revolving floorplan facilities (note 9)            143,655       113,357
    Distributions payable (note 14)                      1,687         1,687
    Current portion of long-term debt (note 10)            210            96
    Current portion of obligation under capital
     lease                                                 112            72
                                                    -----------   -----------

                                                       168,152       138,733

    Long-term debt (note 10)                            10,394         5,535

    Obligation under capital lease                         395           240
    Future income taxes (note 16)                       17,364             -
                                                    -----------   -----------

                                                       196,305       144,508
                                                    -----------   -----------
    Contingencies (note 12)

    UNITHOLDERS' EQUITY

    Fund units (note 13(a) and (b))                    105,200       105,200
    Exchangeable units (note 13(c))                     88,847        88,847
    Contributed surplus (note 13(d))                       957           455
    Deficit                                            (16,968)         (478)
                                                    -----------   -----------

                                                       178,036       194,024
                                                    -----------   -----------

                                                       374,341       338,532
                                                    -----------   -----------
                                                    -----------   -----------



    AutoCanada Income Fund
    Consolidated Statement of Operations, Comprehensive Income and Deficit
    For the year ended December 31, 2007 and for the period from
    January 4, 2006, including operations from May 11, 2006
    (date of commencement of operations) to December 31, 2006
    -------------------------------------------------------------------------

    (expressed in Canadian dollar thousands except unit and per unit amounts)

                                                                 Period from
                                                                May 11, 2006
                                                    Year ended            to
                                                   December 31,  December 31,
                                                          2007          2006

                                                             $             $
    Revenue
    Vehicles                                           740,385       418,808
    Parts, service and collision repair                 92,140        51,766
    Other                                                2,290         1,348
                                                   --------------------------

                                                       834,815       471,932
    Cost of sales                                      695,923       394,409
                                                   --------------------------

    Gross profit                                       138,892        77,523
                                                   --------------------------

    Expenses
    Selling, general and administrative                103,715        56,408
    Interest (note 17)                                  10,844         5,741
    Amortization                                         3,210         2,900
                                                   --------------------------

                                                       117,769        65,049
                                                   --------------------------

    Earnings before income taxes                        21,123        12,474
    Future income taxes (note 16)                       17,364             -
                                                   --------------------------

    Net earnings & comprehensive
    income for the year (note 2(b))                      3,759        12,474
    Deficit, beginning of year                            (478)            -
    Distributions declared (note 14)                   (20,249)      (12,952)
                                                   --------------------------

    Deficit, end of year                               (16,968)         (478)
                                                   --------------------------
                                                   --------------------------

    Earnings per unit
    Basic                                                0.186         0.616
                                                   --------------------------
                                                   --------------------------

    Diluted                                              0.185         0.616
                                                   --------------------------
                                                   --------------------------

    Weighted average units
    Basic                                           20,257,000    20,257,000
                                                   --------------------------
                                                   --------------------------

    Diluted                                         20,295,943    20,323,714
                                                   --------------------------
                                                   --------------------------



    AutoCanada Income Fund
    Consolidated Statement of Cash Flows
    For the year ended December 31, 2007 and for the period from
    January 4, 2006, including operations from May 11, 2006
    (date of commencement of operations) to December 31, 2006
    -------------------------------------------------------------------------

    (expressed in Canadian dollar thousands)

                                                                 Period from
                                                                May 11, 2006
                                                    Year ended            to
                                                   December 31,  December 31,
                                                          2007          2006

    Cash provided by (used in)                               $             $

    Operating activities
    Net earnings for the period                          3,759        12,474
    Items not affecting cash
      Future income taxes (note 16)                     17,364             -
      Unit-based compensation (note 13(d))                 502           455
      Amortization                                       3,210         2,900
      (Gain) loss on disposal of property &
       equipment                                            (9)            5
                                                   --------------------------

                                                        24,826        15,834
    Net change in non-cash working capital balances     (3,806)       13,479
                                                   --------------------------

                                                        21,020        29,313

    Investing activities
    Business acquisitions (note 3)                                  (101,662)
    Investment in variable interest entity (note 4)     (4,727)            -
    Purchase of property & equipment                    (3,107)       (1,236)
    Proceeds on sale of property & equipment               200           197
    Restricted cash                                       (880)        1,431
    Cash acquired on acquisition                             -         4,925
                                                   --------------------------

                                                        (8,514)      (96,345)
                                                   --------------------------

    Financing activities
    Net proceeds from issuance of units (note 3)                      93,572
    Proceeds from long-term debt                         7,293         5,674
    Repayment of long-term debt                         (2,320)          (43)
    Repayment of obligation under capital lease            (96)          (26)
    Distributions paid to Unitholders                  (20,249)      (11,265)
                                                   --------------------------

                                                       (15,372)       87,912
                                                   --------------------------

    Increase (decrease) in cash                         (2,866)       20,880
    Cash and cash equivalents, beginning
    of period                                           20,880             -
                                                   --------------------------

    Cash and cash equivalents, end of period            18,014        20,880
                                                   --------------------------
                                                   --------------------------

    Supplementary information

      Cash interest paid                                10,912         5,674
      Transfer of inventory to property & equipment      1,495         1,257
      Transfer of property & equipment to inventory      1,904         1,022
    





For further information:

For further information: Tom Orysiuk, CA, Executive Vice-President and
Chief Financial Officer, Phone: (780) 732-3139, Email: torysiuk@autocan.ca

Organization Profile

AUTOCANADA INCOME FUND

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