AutoCanada Inc. — Management Reports 2024

Mar 7, 2024

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Fourth Quarter Management Discussion & Analysis

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autocan.ca

2023

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

For the three-month period and year ended December 31, 2023

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Table of Contents

MANAGEMENT'S DISCUSSION AND ANALYSIS

1.	Reader Advisories and Forward-Looking Statements	1
2.	Executive Summary	2
3.	Market and Outlook	6
4.	Results of Operations	7
5.	Acquisitions, Divestitures, and Other Recent Developments	18
6.	Liquidity and Capital Resources	19
7.	Related Party Transactions	23
8.	Outstanding Shares	24
9.	Dividends	24
10.	Free Cash Flow	24
11.	Critical Accounting Estimates and Accounting Policy Developments	25
12.	Disclosure Controls and Internal Controls Over Financial Reporting	25
13.	Risk Factors	26
14.	Non-GAAP and Other Financial Measures	27
15.	Non-GAAP and Other Financial Measure Reconciliations	30
16.	Selected Annual Financial Information	34
17.	Selected Quarterly Financial Information	35
18.	Segmented Operating Results Data	36
19.	Same Store Results Data	38
20.	Count of Operations	39

1. READER ADVISORIES AND FORWARD-LOOKING STATEMENTS

This Management’s Discussion & Analysis (“MD&A”) was prepared as of March 6, 2024, to assist readers in understanding AutoCanada Inc.’s (the “Company” or “AutoCanada”) consolidated financial performance for the three-month period and year ended December 31, 2023, and significant trends that may affect AutoCanada’s future performance. The following discussion and analysis should be read in conjunction with the audited annual consolidated financial statements and accompanying notes of AutoCanada as at and for the year ended December 31, 2023 (the “Annual Financial Statements”). The Annual Financial Statements have been prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (the “IFRS Accounting Standards”). IFRS Accounting Standards are referred to as GAAP in this MD&A. All amounts presented in this MD&A are reported in Canadian dollars and have been rounded to the nearest thousand dollars, unless otherwise stated.

The Company’s Board of Directors, upon recommendation of its Audit Committee, approved the contents of this MD&A on March 6, 2024.

To provide more meaningful information, this MD&A typically refers to the operating results for the three-month period and year ended December 31, 2023 of the Company, and compares these to the operating results of the Company for the three-month period and year ended December 31, 2022.

This MD&A also makes reference to certain non-GAAP measures ("Non-GAAP Measures"), capital management measures, and supplementary financial measures to assist users in assessing AutoCanada’s performance. Non-GAAP measures and other financial measures do not have any standard meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers. These measures are identified and described under section 14 Non-GAAP and Other Financial Measures.

Same store metrics include only Canadian dealerships and related businesses which have been owned for at least two full years since acquisition. Comparisons to prior year results are impacted by acquisitions. Refer to Section 5 Acquisitions, Divestitures, and Other Recent Developments and Section 19 Same Store Results Data for further details.

Additional information regarding the Company, including the Annual Information Form for the year ended December 31, 2023 (the "AIF") is available on SEDAR at www.sedarplus.ca and the Company's website at www.autocan.ca.

FORWARD-LOOKING STATEMENTS

Certain statements contained in the MD&A are forward-looking statements and information (collectively “forwardlooking statements”), within the meaning of the applicable Canadian securities legislation. We hereby provide cautionary statements identifying important factors that could cause 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”, “plan”, “seek”, “may”, “intend”, “likely”, “will”, “believe”, “shall” 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.

Details of the Company’s material forward-looking statements are included in the Company’s most recent AIF. The AIF and other documents filed with securities regulatory authorities (accessible through the SEDAR website www.sedarplus.ca) 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 the 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.

AutoCanada • 2023 Fourth Quarter Report • Page 1

2. EXECUTIVE SUMMARY

Business Overview

Canadian Operations

AutoCanada's Canadian Operations segment currently operates 66 franchised dealerships in Canada, comprised of 25 brands, in 8 provinces. AutoCanada currently sells Acura, Alfa Romeo, Audi, BMW, Buick, Cadillac, Chevrolet, Chrysler, Dodge, FIAT, Ford, GMC, Honda, Hyundai, Infiniti, Jeep, Kia, Mazda, Mercedes-Benz, MINI, Nissan, Porsche, Ram, Subaru, and Volkswagen branded vehicles. In addition, AutoCanada's Canadian Operations segment currently operates 3 used vehicle dealerships and 1 used vehicle auction business supporting the Used Digital Division, 13 RightRide division locations, and 11 stand-alone collision centres within our group of 27 collision centres. In 2023, our Canadian dealerships sold approximately 89,600 new and used retail vehicles.

U.S. Operations

AutoCanada's U.S. Operations segment, operating as Leader Automotive Group ("Leader"), currently operates 18 franchised dealerships comprised of 16 brands, in Illinois, USA. Leader currently sells Audi, Chevrolet, Chrysler, Dodge, Honda, Hyundai, Jeep, Kia, Lincoln, Mercedes-Benz, Porsche, Ram, Subaru, Toyota, Volkswagen, and Volvo branded vehicles. In 2023, our U.S. dealerships sold approximately 13,800 new and used retail vehicles.

Seasonality

The Company’s results from operations for the three-month period ended December 31, 2023 are not necessarily indicative of the results that may be expected for the full fiscal year due to seasonal variations in sales levels. The Company’s operating results and financial performance have historically been lower in the first and fourth quarters than during the second and third quarters of each year. The timing of acquisitions and divestitures may also cause substantial fluctuations in operating results from quarter to quarter.

AutoCanada • 2023 Fourth Quarter Report • Page 2

2023 Fourth Quarter Key Highlights and Recent Developments

All comparisons presented below are between the three-month period ended December 31, 2023 and the threemonth period ended December 31, 2022, unless otherwise indicated.

AutoCanada Key Highlights

• Revenue was $1,483.8 million as compared to $1,388.2 million in the prior year, an increase of 6.9%

• Net (loss) income for the period was $(22.6) million versus $14.8 million in the prior year, a decrease of (252.8)%

• Diluted earnings per share was $(0.81), a decrease of $(1.33) from $0.52 in the prior year

• Consolidated ownership of the Used Digital Division, recognizing $36.7 million of share-based compensation expense and $1.8 million of related transaction costs in operating expenses, resulting in a $1.50 reduction to diluted earnings per share

• Adjusted EBITDA[1] was $46.4 million versus $51.0 million in the prior year, a decrease of $(4.6) million

FOURTH QUARTER RESULTS

	Three-Months Ended December 31
Consolidated Financial Results	2023 2022 % Change
Revenue Gross profit Gross profit percentage2 Operating expenses Net (loss) income Basic net (loss) income per share attributable to AutoCanada shareholders Diluted net(loss)incomeper share attributable to AutoCanada shareholders	1,483,794 1,388,206 6.9% 257,842 242,622 6.3% 17.4% 17.5% (0.1) ppts 250,816 197,397 27.1% (22,630) 14,810 (252.8)% (0.84) 0.55 (252.7)% (0.81) 0.52 (255.8)%
Adjusted EBITDA Adjusted EBITDA margin1	46,437 51,043 (9.0)% 3.1% 3.7% (0.6) ppts
New retail vehicles sold (units) Used retail vehicles sold (units) New vehicle gross profit per retail unit2 Used vehicle gross profit per retail unit2 Parts, service and collision repair ("PS&CR") gross profit Finance,insurance and other("F&I") grossprofitper retail unit average2	9,580 8,100 18.3% 13,777 14,418 (4.4)% 5,439 5,833 (6.8)% 1,548 897 72.6% 108,054 95,661 13.0% 3,299 3,596 (8.3)%
Normalized operating expenses before depreciation1 Normalized operatingexpenses before depreciation as a % ofgrossprofit1	193,918 178,710 8.5% 75.2% 73.7% 1.5ppts
Floorplan financingexpense	19,809 15,675 26.4%

Consolidated revenue increased due to higher new vehicle sales, contributions from PS&CR and recent acquisitions offset by lower used vehicle sales in U.S. Operations. Growth in new vehicle revenue was driven primarily from higher new vehicle sales volumes and reflecting the continued recovery in new vehicle inventories. PS&CR revenue growth reflected continued strong demand, with aftermarket operations continuing to benefit from increased average age of vehicle that resulted from constrained new light vehicle supply during the pandemic.

Consolidated gross profit increased as a result of contributions from new vehicle sales, PS&CR operations and recent acquisitions.[2]

Operating expenses increased primarily as a result of share-based compensation expenses related to the consolidation of ownership of Used Digital Division (see Section 7 Related Party Transactions for further information). Normalized operating expenses before depreciation, which excludes share-based compensation, transaction costs, and other non-recurring costs, increased as a result of recent acquisitions.

1 See Section 14 Non-GAAP and Other Financial Measures for further information regarding the composition of these Non-GAAP

Measures.

2 See Section 14 Non-GAAP and Other Financial Measures for further information regarding the composition of these supplementary measures.

AutoCanada • 2023 Fourth Quarter Report • Page 3

Floorplan financing expenses increased as a result of higher interest rates and rising new inventory levels partially offset by lower used vehicle inventory levels.

The net loss for the period resulted from higher gross profits and operating expenses for the reasons stated above, including share-based compensation expense related to the ownership consolidation of Used Digital Division, combined with higher floorplan financing expenses.

Adjusted EBITDA for the period and adjusted EBITDA margin decreased primarily as result of higher operating expenses combined with increased flooring expenses.

Canadian Operations Highlights

	Three-Months Ended December 31
Canadian Financial Results	2023 2022 % Change
Revenue Gross profit Gross profit percentage Operating expenses Net(loss)income	1,277,752 1,172,712 9.0% 225,134 208,317 8.1% 17.6% 17.8% (0.2) ppts 218,699 166,513 31.3% (16,020) 15,043 (206.5)%
Adjusted EBITDA Adjusted EBITDA margin	47,945 46,027 4.2% 3.8% 3.9% (0.1) ppts
New retail vehicles sold (units) Used retail vehicles sold (units) Used-to-new retail units ratio3	8,161 7,112 14.7% 11,805 11,689 1.0% 1.45 1.64 (11.6)%
New vehicle gross profit per retail unit Used vehicle gross profit per retail unit PS&CR gross profit F&Igrossprofitper retail unit average	5,401 5,598 (3.5)% 1,948 1,190 63.7% 93,375 82,008 13.9% 3,234 3,503 (7.7)%

Revenue increased as a result of contributions from new vehicle sales, higher PS&CR operating performance, and recent acquisitions, offset by declines in used vehicle revenues. Growth in new vehicle revenue was driven by higher new retail vehicle sales volumes and higher average selling prices. PS&CR gross profit increased as a result of strong customer demand for maintaining existing vehicles and recent acquisitions. F&I gross profit per retail unit average decreased reflecting a growing proportion of retail vehicle sales being purchased without dealer financing, resulting in fewer opportunities to sell higher margin warranty and insurance products.[3]

Adjusted EBITDA was up due to contributions from stronger new vehicle sales and PS&CR operations, and recent acquisitions, partially offset by higher operating expenses and floorplan financing expenses.

Refer to Section 5 Acquisitions, Divestitures, and Other Recent Developments for acquisitions included in the Q4 2023 results.

Same Store Metrics - Canadian Operations Highlights

	Three-Months Ended December 31
Same Store - Canadian Operations Financial Results	2023 2022 % Change
Revenue Gross profit Grossprofitpercentage	1,025,232 996,992 2.8% 174,440 174,213 0.1% 17.0% 17.5% (0.5) ppts
New retail vehicles sold (units) Used retail vehicles sold (units) Used-to-new retail units ratio	6,205 5,714 8.6% 9,495 10,131 (6.3)% 1.53 1.77 (13.6)%
New vehicle gross profit per retail unit Used vehicle gross profit per retail unit PS&CR gross profit F&Igrossprofitper retail unit average	5,507 5,724 (3.8)% 1,951 1,100 77.4% 68,342 66,466 2.8% 3,504 3,739 (6.3)%

3 See Section 14 Non-GAAP and Other Financial Measures for further information regarding the composition of this supplementary measure.

AutoCanada • 2023 Fourth Quarter Report • Page 4

Same store metrics include only Canadian dealerships and related businesses that have been owned for at least two full years since acquisition and make up 80.2% of Canadian Operations revenue and 77.5% of gross profit in the current quarter. Please refer to Section 19 Same Store Results Data for further information.

Revenue increased as a result of contributions from new vehicle sales and PS&CR operations offset by declines in used vehicle sales and F&I. New vehicle gross profit per retail unit declined reflecting higher sales of lower priced vehicles compared to last year. Used vehicle gross profit per retail unit increased as management continued to prioritize maintaining gross profit on retail unit sales coupled with a larger used vehicle inventory provision recorded last year. The increase in PS&CR gross profit and decrease in F&I gross profit per retail unit average occurred for the same reasons as noted above in Canadian Operations.

U.S. Operations Highlights

	Three-Months Ended December 31
U.S. Financial Results	2023 2022 % Change
Revenue Gross profit Gross profit percentage Operating expenses Net(loss)income	206,042 215,494 (4.4)% 32,708 34,305 (4.7)% 15.9% 15.9% — ppts 32,117 30,884 4.0% (6,610) (233) (2736.9)%
Adjusted EBITDA Adjusted EBITDA margin	(1,508) 5,016 (130.1)% (0.7)% 2.3% (3.0) ppts
New retail vehicles sold (units) Used retail vehicles sold (units) Used-to-new retail units ratio	1,419 988 43.6% 1,972 2,729 (27.7)% 1.39 2.76 (49.6)%
New vehicle gross profit per retail unit Used vehicle gross profit per retail unit PS&CR gross profit F&Igrossprofitper retail unit average	5,657 7,527 (24.8)% (845) (359) (135.4)% 14,679 13,653 7.5% 3,680 4,064 (9.4)%

Revenue and gross profit declined due to lower used vehicle sales and lower F&I performance offset by contributions from PS&CR operations and new vehicle sales. Used vehicle revenue declines reflect lower sales volumes which also impacted F&I through lower warranty and insurance sales. Used vehicle performance was negatively impacted by historical inventory procurement and management processes as well as market dynamics that made sourcing optimal used vehicle inventory more challenging. New vehicle sales volumes increased significantly offset by lower average selling prices as new inventory levels continued to normalize.

Adjusted EBITDA declined due to lower used vehicle and F&I gross profit coupled with higher operating expenses and floorplan financing costs.

Other Recent Developments

During the quarter:

• On November 16, 2023, the Company announced that it had been awarded the rights to open a Porsche Classic & Service Centre (the "Centre") in Windsor, Ontario. The Centre will be the first Porsche Classic centre in Canada and will be a Genuine Porsche service and parts centre. It is expected to be completed in the fourth quarter of 2025.

• On November 17, 2023, the Company entered into a $25.0 million forward interest rate swap with a deferred start date of December 1, 2023 and fixed one-month Canadian Dollar Offered Rate ("CDOR") of 4.10%. The swap has an initial settlement date of December 1, 2026 and may be extended by the counterparty to December 1, 2028.

• On December 27, 2023, iA Financial Group (“iA”) invested $25 million for a 10% common equity interest in AutoCanada’s business unit that will sell finance, insurance and warranty products to buyers of private owner-sold vehicles on Kijiji’s online marketplace ("Online C2C F&I Business"). The Company also purchased the 19.1% interest in its Used Digital Division from the Executive Chair of the Company and Other Sellers (collectively the “Minority Interest Holders”) for $23.9 million in cash, funded from the proceeds of the iA investment and $7.5 million in share units issuable to the Executive Chair and issuance of performance share units (“PSUs”) to the Other Sellers. The share units and PSUs will be settled through the delivery of AutoCanada shares acquired in the market. The Minority Interest Holders have agreed to use their after-tax cash proceeds to purchase AutoCanada shares in the market.

AutoCanada • 2023 Fourth Quarter Report • Page 5

After the quarter:

• On February 1, 2024, the Company entered into a $75.0 million interest rate swap with a fixed one-month CDOR of 3.77%. The swap has an initial settlement date of February 1, 2027 and may be extended by the counterparty to February 1, 2029.

• On February 1, 2024, the Company completed the previously announced sale of two properties located in British Columbia and Alberta to CanadaOne Auto Group for cash consideration of $41.4 million plus customary closing adjustments. The land and buildings were presented on AutoCanada's balance sheet as assets held for sale as at December 31, 2023. Refer to Section 5 Acquisitions, Divestitures, and Other Recent Developments for additional information.

• On March 1, 2024, the newly built open point dealership, Maple Ridge GM, located in Maple Ridge, B.C., commenced operations. The dealership consists of a dealership and service facility with 14 service bays and is the Company’s first GM dealership in the Metro Vancouver area.

• On March 6, 2024, the Company received approval from the Toronto Stock Exchange (“TSX”) for the renewal of its normal course issuer bid (“NCIB”). Pursuant to the NCIB, AutoCanada may purchase up to 1,329,106 common shares during the twelve-month period commencing March 11, 2024 and ending March 10, 2025 or such earlier date as the Company may complete its purchases under the NCIB. As at March 6, 2024, there were 23,611,175 common shares issued and outstanding.

3. MARKET AND OUTLOOK

In both the U.S. and Canada, new light vehicle inventory is normalizing following COVID-19 supply shortages. In Canada, DesRosiers Automotive Consultants is currently forecasting 2024 new vehicle sales of approximately 1.8 million units, which is an increase over 2023 new vehicle units sold of 1.7 million. This increasing new light vehicle inventory is expected to result in normalizing gross profit per retail unit, a trend that has been noted for the past several quarters in the U.S., where inventory replenishment is tracking ahead of Canada. However, because Canadian dealers did not sell over manufacturer's suggested retail price ("MSRP") during the pandemic, the impact on gross profit per retail unit as Canadian inventory levels recover may diverge from the experience in the U.S. to date. Additionally, AutoCanada continues to focus on used vehicle acquisition and efficiency plans to outperform the broader used car market. Furthermore, the Company is focused on the commercial launch of the Kijiji F&I and Instant Cash Offer ("ICO") initiatives, which are slated to occur by the end of June and October 2024, respectively.

In August 2023, following two months of operational strategy sessions, Project Elevate was launched across the organization. Project Elevate is a five-year business plan that is focused on three priorities:

1. Maximizing gross profit;

2. Optimizing cost structure; and

3. Modernizing corporate infrastructure.

In November 2023, the Company announced key management changes and additions in support of Project Elevate, including appointing Jeffrey Thorpe as President, North American Operations, Brian Feldman as Chief Operating Officer, and adding Drew Forret as Chief Administrative and Transformation Officer and Michael Fera as Vice President, Financial Planning and Analysis.

In January 2024, management completed the restructuring of its U.S. Operations and also initiated implementation of its Canadian operating standards in its U.S. business. This included new and used vehicle sales practices, new and used inventory procurement and management, F&I certification and training, and PS&CR best practices. These changes are expected to result in gradual improvement of the U.S. Operations that will bring this segment to sustainable profitability by the end of 2024.

Management also made progress on execution of Project Elevate initiatives in its Canadian Operations during the fourth quarter of 2023 and to date in 2024. Projects to modernize corporate infrastructure in support of achieving efficiencies are underway in Finance, HR, and Information Technology, and best practices playbooks have been implemented across several functions. The Company has also launched and continues to develop training and recruitment programs to support employees in achieving optimal outcomes. Management has developed new standard operating expense targets by brand, which will be implemented across its Canadian Operations, by the end of June 2024. These accomplishments are foundational to our 5-year objective to close the gap to normalized peer profitability.

While higher interest rates are expected to continue to impact customer affordability, some of the direct impacts may be partially offset by vehicle financing products which provide flexibility in financing terms, inclusive of incentives and term extensions. In the current macro environment, we remain agile and will adjust vehicle inventory and F&I product offerings and other aspects of the business, where necessary, to meet customer needs.

We will remain opportunistic in our approach to capital allocation between share buybacks, acquisitions, and other growth initiatives, with the objective of maximizing shareholder returns over the long term.

AutoCanada • 2023 Fourth Quarter Report • Page 6

4. RESULTS OF OPERATIONS

Fourth Quarter Operating Results

Revenues and Gross Profit

The following tables summarize revenue and gross profit for the three-month periods and years ended December 31:

	Three-Months Ended December 31	Three-Months Ended December 31	Three-Months Ended December 31
	2023 $	2022 $	Change $ Change %
New vehicles Used vehicles Parts, service and collision repair Finance,insurance and other	605,918 592,990 202,448 82,438	508,008 626,397 168,544 85,257	97,910 19.3% (33,407) (5.3)% 33,904 20.1% (2,819) (3.3)%
Total revenue	1,483,794	1,388,206	95,588 6.9%
New vehicles Used vehicles Parts, service and collision repair Finance,insurance and other	52,728 20,004 108,054 77,056	48,218 17,775 95,661 80,968	4,510 9.4% 2,229 12.5% 12,393 13.0% (3,912) (4.8)%
Totalgrossprofit	257,842	242,622	15,220 6.3%
		Year Ended December 31
	2023 $	2022 $	Change $ Change %
New vehicles Used vehicles Parts, service and collision repair Finance,insurance and other	2,554,227 2,726,476 782,326 373,774	2,160,565 2,870,145 642,665 367,244	393,662 18.2% (143,669) (5.0)% 139,661 21.7% 6,530 1.8%
Total revenue	6,436,803	6,040,619	396,184 6.6%
New vehicles Used vehicles Parts, service and collision repair Finance,insurance and other	222,840 129,213 417,026 352,708	219,312 121,299 353,512 348,750	3,528 1.6% 7,914 6.5% 63,514 18.0% 3,958 1.1%
Totalgrossprofit	1,121,787	1,042,873	78,914 7.6%

Allocation of Revenue

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40.8% 36.6% 39.7% 35.8%
40.0% 45.2% 42.3% 47.5%
13.6% 12.1% 12.2% 10.6%
5.6% 6.1% 5.8% 6.1%
Three-Months Ended Three-Months Ended Year Ended December 31, Year Ended December 31,
December 31, 2023 December 31, 2022 2023 2022
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Three-Months Ended
December 31, 2023
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Parts, service and collision repair Finance, insurance and other
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New vehicles Used vehicles

AutoCanada • 2023 Fourth Quarter Report • Page 7

Allocation of Gross Profit

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20.4% 19.9% 19.9% 21.0%
7.8% 7.3% 11.5% 11.7%
39.4%
41.9% 37.2% 33.9%
29.9% 33.4% 31.4% 33.4%
Three-Months Ended Three-Months Ended Year Ended December 31, Year Ended December 31,
December 31, 2023 December 31, 2022 2023 2022
New vehicles Used vehicles Parts, service and collision repair Finance, insurance and other
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Gross Profit Percentages

The following table summarizes gross profit percentages for the three-month periods and years ended December 31:

	Three-Months Ended December 31	Year Ended December 31
	2023 2022 Change ppts	2023 2022 Change ppts
New vehicles Used vehicles Parts, service and collision repair Finance,insurance and other	8.7 % 9.5 % (0.8) 3.4 % 2.8 % 0.6 53.4 % 56.8 % (3.4) 93.5 % 95.0 % (1.5)	8.7 % 10.2 % (1.5) 4.7 % 4.2 % 0.5 53.3 % 55.0 % (1.7) 94.4 % 95.0 % (0.6)
Totalgrossprofitpercentage	17.4 % 17.5 % (0.1)	17.4 % 17.3 % 0.1

New vehicles

For the three-month period ended December 31, 2023

The following table summarizes the financial metrics for the three-month period ended December 31, 2023 and changes compared to the three-month period ended December 31, 2022.

	Three-Months Ended December 31, 2023	Change
New Vehicle Financial Results	Canada U.S. Total	Canada U.S. Total
Revenue Gross profit Grossprofitpercentage(%)	524,650 81,268 605,918 45,007 7,721 52,728 8.6% 9.5% 8.7%	17.8% 29.6% 19.3% 10.4% 3.8% 9.4% (0.6) ppts (2.4) ppts (0.8) ppts
New retail vehicles sold (units) New fleet vehicles sold (units) New vehicle gross profit per retail unit ($) New Vehicle Inventory days of supply (days) Average selling priceper new vehicle($)1	8,161 1,419 9,580 670 — 670 5,401 5,657 5,439 98 61 93 59,410 57,271 59,114	14.7% 43.6% 18.3% (0.3)% —% (0.3)% (3.5)% (24.8)% (6.8)% 22 15 20 3.9% (9.8)% 2.1%
Same store revenue Same store gross profit Same store gross profit percentage (%) Same store new retail vehicles sold (units) Same store new fleet vehicles sold(units)	418,780 34,828 8.3% 6,205 613	10.9% 3.8% (0.6) ppts 8.6% (1.9)%

1 See Section 14 Non-GAAP and Other Financial Measures for further information regarding the composition of this supplementary measure.

AutoCanada • 2023 Fourth Quarter Report • Page 8

Consolidated Operations

New vehicle revenue and gross profit increased due to higher new vehicle sales volumes in Canada and the U.S. and contributions from recent acquisitions offset by lower average selling prices in the U.S., which also resulted in declines in new vehicle gross profit per retail unit and gross profit percentage. New vehicle inventory levels continue to recover with new vehicle inventory days of supply increasing to 93 days during the quarter (2022 - 73 days).

Canadian Operations and Same Store Results

Canadian Operations and same store new vehicle revenue and gross profit increased due to higher sales volumes, higher average selling prices and contributions from acquisitions.

U.S. Operations

New vehicle revenue increased due to higher retail sales volumes partially offset by lower average selling prices, which are normalizing with rising new vehicle inventory levels.

For the year ended December 31, 2023

The following table summarizes the financial metrics for the year ended December 31, 2023 and changes compared to the year ended December 31, 2022.

	Year Ended December 31, 2023 Change
New Vehicle Financial Results	Canada U.S. Total Canada U.S. Total
Revenue Gross profit Grossprofitpercentage(%)	2,242,329 311,898 2,554,227 20.2% 5.5% 18.2% 196,521 26,319 222,840 11.1% (38.0)% 1.6% 8.8% 8.4% 8.7% (0.7) ppts (6.0) ppts (1.5) ppts
New retail vehicles sold (units) New fleet vehicles sold (units) New vehicle gross profit per retail unit ($) Average selling priceper new vehicle($)	34,843 5,320 40,163 11.7% 5.8% 10.9% 2,594 — 2,594 37.1% —% 37.1% 5,559 5,004 5,486 (0.4)% (40.8)% (8.3)% 59,896 58,627 59,738 6.2% (0.3)% 5.4%
Same store revenue Same store gross profit Same store gross profit percentage (%) Same store new retail vehicles sold (units) Same store new fleet vehicles sold(units)	1,822,930 13.2% 156,718 0.8% 8.6% (1.1) ppts 26,834 4.7% 2,335 36.2%

Consolidated Operations

New vehicle revenues and gross profit increased due to higher sales volumes, higher average selling price per new vehicle, and contributions from recent acquisitions. New vehicle gross profit percentage declined largely as a result of lower average selling prices in the U.S. Operations compared to the prior year.

Canadian Operations and Same Store Results

Canadian Operations and same store new vehicle revenue and gross profit increased for the reasons stated above.

U.S. Operations

New vehicle revenue increased due to higher new vehicle sales volumes. Gross profit decreased largely due to lower average selling prices per new vehicle as compared to the prior year.

AutoCanada • 2023 Fourth Quarter Report • Page 9

Used vehicles

For the three-month period ended December 31, 2023

The following table summarizes the financial metrics for the three-month period ended December 31, 2023 and changes compared to the three-month period ended December 31, 2022.

	Three-Months Ended December 31, 2023	Change
Used Vehicle Financial Results	Canada U.S. Total	Canada U.S. Total
Revenue Gross profit (loss) Grossprofitpercentage(%)	505,065 87,925 592,990 22,176 (2,172) 20,004 4.4% (2.5)% 3.4%	(1.2)% (23.7)% (5.3)% 12.8% (14.9)% 12.5% 0.6ppts (0.9) ppts 0.6ppts
Used retail vehicles sold (units) Used vehicle gross profit per retail unit ($) Used Vehicle Inventory days of supply (days) Average selling priceper used vehicle($)1	11,805 1,972 13,777 1,948 (845) 1,548 81 64 78 42,784 44,587 43,042	1.0% (27.7)% (4.4)% 63.7% (135.4)% 72.6% (9) (1) (7) (2.2)% 5.6% (0.9)%
Same store revenue Same store gross profit Same store gross profit percentage (%) Same store used retail vehicles sold(units)	417,741 16,260 3.9% 9,495	(4.9)% 8.7% 0.5 ppts (6.3)%

1 See Section 14 Non-GAAP and Other Financial Measures for further information regarding the composition of this supplementary measure.

Consolidated Operations

Used vehicle revenue decreased as a result of a lower used retail sales volume in the U.S. partially offset by higher sales volumes in Canada arising from recent acquisitions.

Used vehicle gross profit and used vehicle gross profit per retail unit sold increased in Canadian Operations due to a larger used vehicle inventory provision recorded in the prior year coupled with contributions from recent acquisitions and a focus on maintaining margins as new vehicle inventory levels continue to recover. U.S. Operations were negatively impacted by historical inventory procurement and market dynamics that made sourcing optimal lower priced used vehicle inventory more challenging, and resulted in difficulty selling higher priced inventory. Active inventory management resulted in used vehicle inventory days of supply decreasing to 78 days (2022 - 85 days). As a result of selling more new vehicles, the used-to-new retail units ratio for the current quarter decreased from 1.78 to 1.44.

Canadian Operations and Same Store Results

Canadian Operations and same store used vehicle revenues decreased due to lower average selling prices partially offset by higher sales volumes from recent acquisitions.

U.S. Operations

Used vehicle revenue, gross profit, and gross profit percentage decreased for the reasons stated above.

For the year ended December 31, 2023

The following table summarizes the financial metrics for the year ended December 31, 2023 and changes compared to the year ended December 31, 2022.

	Year Ended December 31, 2023 Change
Used Vehicle Financial Results	Canada U.S. Total Canada U.S. Total
Revenue Gross profit Grossprofitpercentage(%)	2,360,703 365,773 2,726,476 (1.8)% (21.6)% (5.0)% 117,625 11,588 129,213 (2.0)% 821.9% 6.5% 5.0% 3.2% 4.7% —ppts 2.9ppts 0.5ppts
Used retail vehicles sold (units) Used vehicle gross profit per retail unit ($) Average selling priceper used vehicle($)	54,714 8,453 63,167 4.9% (26.2)% (0.7)% 1,864 952 1,742 (9.2)% 110.6% (1.2)% 43,146 43,271 43,163 (6.4)% 6.2% (4.3)%
Same store revenue Same store gross profit Same store gross profit percentage (%) Same store used retail vehicles sold(units)	1,978,785 (8.3)% 95,792 (12.1)% 4.8% (0.2) ppts 44,850 (4.0)%

AutoCanada • 2023 Fourth Quarter Report • Page 10

Consolidated Operations

Used vehicle revenue decreased as a result of lower used sales volumes in the U.S. coupled with lower average selling prices in Canada as a result of declining affordability in the current high interest rate environment offset by contributions from recent acquisitions. Used vehicle gross profit increased due to higher average selling prices in the U.S., a larger used vehicle inventory provision recorded in the U.S. last year, and contributions from recent acquisitions. On a trailing twelve month ("TTM") basis, the used-to-new retail ratio decreased from 1.76 last year to 1.57.

Canadian Operations and Same Store Results

Canadian Operations used vehicle revenue and gross profit decreased as a result of lower average selling prices, partially offset by higher sales volumes. Same store used vehicle revenue and gross profit decreased as a result of lower sales volumes and lower average selling prices.

U.S. Operations

Used vehicle revenue decreased reflecting lower unit sales volumes. Used vehicle gross profit and gross profit percentage increased as a result of the reasons stated above.

Parts, service and collision repair

For the three-month period ended December 31, 2023

The following table summarizes the financial metrics for the three-month period ended December 31, 2023 and changes compared to the three-month period ended December 31, 2022.

	Three-Months Ended December 31, 2023 Change
PS&CR Financial Results	Canada U.S. Total Canada U.S. Total
Revenue Gross profit Grossprofitpercentage(%)	178,080 24,368 202,448 21.8% 9.3% 20.1% 93,375 14,679 108,054 13.9% 7.5% 13.0% 52.4% 60.2% 53.4% (3.7) ppts (1.0) ppts (3.4) ppts
Same store revenue Same store gross profit Same storegrossprofitpercentage(%)	129,626 10.2% 68,342 2.8% 52.7% (3.8) ppts

Consolidated Operations

PS&CR revenue and gross profit increased reflecting higher service and collision repair orders[4] ("RO's") due to contributions from recent acquisitions and strong customer demand as the age of vehicles increased due to the limited availability of new vehicles over the past few years. Gross profit percentage decreased due to a change in sales mix, including more lower margin warranty and collision related work.

Canadian Operations and Same Store Results

Canadian Operations and same store PS&CR revenue and gross profit increased, and gross profit percentage decreased for the reasons stated above.

U.S. Operations

PS&CR revenue and gross profit increased and gross profit percentage decreased due to the sales mix issue noted above.

4 See Section 14 Non-GAAP and Other Financial Measures for further information regarding the composition of this supplementary measure.

AutoCanada • 2023 Fourth Quarter Report • Page 11

For the year ended December 31, 2023

The following table summarizes the financial metrics for the year ended December 31, 2023 and changes compared to the year ended December 31, 2022.

	Year Ended December 31, 2023 Change
PS&CR Financial Results	Canada U.S. Total Canada U.S. Total
Revenue Gross profit Grossprofitpercentage(%)	681,694 100,632 782,326 21.9% 20.7% 21.7% 361,712 55,314 417,026 18.4% 15.2% 18.0% 53.1% 55.0% 53.3% (1.5) ppts (2.6) ppts (1.7) ppts
Same store revenue Same store gross profit Same storegrossprofitpercentage(%)	516,860 9.7% 275,884 7.7% 53.4% (1.0) ppts

Consolidated Operations

PS&CR revenue and gross profit increased reflecting higher RO's due to contributions from recent acquisitions and strong customer demand as average vehicle age increased. Gross profit percentage decreased due to a change in sales mix, including more lower margin warranty and collision related work.

Canadian Operations and Same Store Results

Canadian Operations and same store PS&CR revenue and gross profit increased, and gross profit percentage decreased for the reasons stated above.

U.S. Operations

PS&CR revenue and gross profit increased, and gross profit percentage decreased for the reasons stated above.

Finance, insurance and other

Finance and insurance products are sold with both new and used retail vehicles.

For the three-month period ended December 31, 2023

The following table summarizes the financial metrics for the three-month period ended December 31, 2023 and changes compared to the three-month period ended December 31, 2022.

	Three-Months Ended December 31, 2023 Change
F&I Financial Results	Canada U.S. Total Canada U.S. Total
Revenue Gross profit Grossprofitpercentage(%)	69,957 12,481 82,438 (0.1)% (18.1)% (3.3)% 64,576 12,480 77,056 (2.0)% (17.4)% (4.8)% 92.3% 100.0% 93.5% (1.8) ppts 0.8ppts (1.5) ppts
F&Igrossprofitper retail unit average($)	3,234 3,680 3,299 (7.7)% (9.4)% (8.3)%
Same store revenue Same store gross profit Same store gross profit percentage (%) Same store F&Igrossprofitper retail unit average($)	59,085 (5.6)% 55,010 (7.2)% 93.1% (1.6) ppts 3,504 (6.3)%

Consolidated Operations

F&I revenue, gross profit and gross profit per retail unit average decreased despite a higher total retail vehicle[5] sales volumes due to a growing proportion of retail vehicle sales being purchased without dealer financing resulting in fewer opportunities to sell warranty and insurance products.

Canadian Operations and Same Store Results

F&I revenue, gross profit, gross profit per retail unit average, and gross profit percentage decreased for the reasons stated above. Same store F&I revenue and gross profit per retail unit average decreased as a result of a decline in same store total retail units sold.

U.S. Operations

F&I revenue, gross profit and gross profit per retail unit average decreased reflecting a decrease in total retail units sold and an increase in retail vehicle sales being purchased without dealer financing.

5 See Section 14 Non-GAAP and Other Financial Measures for further information regarding the composition of this supplementary measure.

AutoCanada • 2023 Fourth Quarter Report • Page 12

For the year ended December 31, 2023

The following table summarizes the financial metrics for the year ended December 31, 2023 and changes compared to the year ended December 31, 2022.

	Year Ended December 31, 2023 Change
F&I Financial Results	Canada U.S. Total Canada U.S. Total
Revenue Gross profit Grossprofitpercentage(%)	322,468 51,306 373,774 6.7% (21.1)% 1.8% 301,804 50,904 352,708 6.2% (21.1)% 1.1% 93.6% 99.2% 94.4% (0.5) ppts —ppts (0.6) ppts
F&Igrossprofitper retail unit average($)	3,370 3,696 3,413 (1.2)% (5.6)% (2.3)%
Same store revenue Same store gross profit Same store gross profit percentage (%) Same store F&Igrossprofitper retail unit average($)	277,135 0.5% 260,936 (0.4)% 94.2% (0.8) ppts 3,640 0.6%

Consolidated Operations

F&I revenue and gross profit increased reflecting higher total retail sales volumes and contributions from recent acquisitions. Gross profit per retail unit average and gross profit percentage decreased reflecting a growing proportion of retail vehicle sales being purchased without dealer financing, resulting in lower warranty and insurance product sales.

Canadian Operations and Same Store Results

Canadian Operations revenue and gross profit increased, and gross profit percentage decreased for the reasons stated above. Same store F&I revenue and gross profit remained flat as compared to the prior year.

U.S. Operations

F&I revenue and gross profit decreased reflecting decreased total retail unit sales volume.

Operating expenses

Operating expenses excludes floorplan financing costs, which are presented as Finance Costs. These costs are included in adjusted EBITDA as only interest on long-term indebtedness is added back. Refer to Section 14 NonGAAP and Other Financial Measures for the composition of adjusted EBITDA. The components of operating expenses are noted below.

Employee Costs

Associated with employing staff both at dealerships and at corporate head office, and include salaries, wages, benefits, and share-based compensation expense. Dealership employees are largely commission based, making employee costs variable in nature. Our dealership pay structures are tied to meeting sales objectives, maintaining Customer Satisfaction Index ("CSI"), as well as improving gross profit and net income.

Administrative Costs

Comprise the remaining costs of operating our dealerships and corporate head office. Advertising, utilities, service shop consumables, information processing, insurance, acquisition related transaction costs, and consulting costs comprise a significant portion of administrative costs. Administrative costs can be fixed, variable, or semi-variable in nature.

Facility Lease and Storage Costs

Relate to the cost of short-term ancillary and supplemental leasing arrangements that support dealership facilities.

Depreciation of Right-of-Use Assets

Relates to the right-of-use assets that arise upon the inception of a lease arrangement. The right-of-use asset is depreciated on a straight-line basis over the shorter of the asset's useful life and the lease term.

Depreciation of Property and Equipment

Relates to the depreciation of the dealership assets, including buildings, machinery and equipment, leasehold improvements, company and lease vehicles, furniture, and computer hardware. Depreciation rates vary based on the nature of the asset.

AutoCanada • 2023 Fourth Quarter Report • Page 13

The following tables summarize operating expenses, operating expenses before depreciation, normalized operating expenses before depreciation, operating expenses before depreciation as a percentage of gross profit, and normalized operating expenses before depreciation as a percentage of gross profit for the three-month period and year ended December 31, 2023 and changes compared to the respective three-month period and year ended December 31, 2022.

	Three-Months Ended December 31, 2023 Change
	Canada U.S. Total Canada U.S. Total
Employee costs Administrative costs1 Expected credit losses on trade and other receivables Facility lease and storage costs Depreciation and amortization3	144,486 21,258 165,744 38.9% 10.4% 34.4% 57,711 9,408 67,119 18.0% (9.4)% 13.2% 1,225 36 1,261 406.2% (52.6)% 296.5% 1,419 — 1,419 935.8% N/A 935.8% 13,858 1,415 15,273 5.0% 21.6% 6.3%
Operating expenses Less: Depreciation and amortization3	218,699 32,117 250,816 31.3% 4.0% 27.1% (13,858) (1,415) (15,273) (5.0)% (21.6)% (6.3)%
Operating expenses before depreciation Less: Acquisition-related costs (including Used Digital Division transaction costs) Software implementation costs Share-based compensation expense	204,841 30,702 235,543 33.6% 3.3% 28.7% (2,415) — (2,415) 7.9% N/A 7.9% (677) — (677) N/A N/A N/A (38,533) — (38,533) 1,749.0% N/A 1,749.0%
Normalized operating expenses before depreciation	163,216 30,702 193,918 9.5% 3.3% 8.5%
Operating expenses before depreciation as a percentage of gross profit (%) Normalized operating expenses before depreciation as a percentage of gross profit (%)	91.0% 93.9% 91.4% 17.4 ppts 7.2 ppts 15.9 ppts 72.5% 93.9% 75.2% 1.0 ppts 7.2 ppts 1.5 ppts
	Year Ended December 31, 2023 Change
	Canada U.S. Total Canada U.S. Total
Employee costs Administrative costs1 Expected credit losses on trade and other receivables2 Facility lease and storage costs Depreciation and amortization3	495,939 87,614 583,553 13.9% 2.9% 12.1% 222,318 42,655 264,973 13.0% 12.2% 12.9% 2,230 353 2,583 130.4% 15.7% 102.9% 5,152 — 5,152 87.7% N/A 87.7% 53,750 5,252 59,002 13.1% 17.2% 13.5%
Operating expenses Less: Depreciation and amortization3	779,389 135,874 915,263 14.1% 6.2% 12.9% (53,750) (5,252) (59,002) (13.1)% (17.2)% (13.5)%
Operating expenses before depreciation Less: Acquisition-related costs (including Used Digital Division transaction costs) Software implementation costs Share-based compensation expense	725,639 130,622 856,261 14.2% 5.8% 12.8% (5,391) — (5,391) 9.9% N/A 9.6% (677) — (677) N/A N/A N/A (43,210) — (43,210) 644.9% N/A 644.9%
Normalized operating expenses before depreciation	676,361 130,622 806,983 8.2% 5.8% 0.0%
Operating expenses before depreciation as a percentage of gross profit Normalized operating expenses before depreciation as a percentage of gross profit	74.2% 90.6% 76.3% 2.5 ppts 11.6 ppts 3.5 ppts 69.2% 90.6% 71.9% (1.3) ppts 11.6 ppts 0.1 ppts

1 Reclassification of comparative figure for presentation purposes. The Company previously included amortization of intangibles assets in administrative expenses. Prior year comparative has been revised by reclassifying $374 out of administrative costs and presented on a separate line. See Section 18 Segmented Operating Results Data for a detailed breakdown of operating expenses.

2 For table presentation purposes, prior period government assistance has been reclassed into expected credit losses on trade and other receivables. See Section 18 Segmented Operating Results Data for a detailed breakdown of operating expenses.

3 See Section 18 Segmented Operating Results Data for a breakdown of the types of depreciation and amortization.

AutoCanada • 2023 Fourth Quarter Report • Page 14

The Company considers operating expenses before depreciation as a percentage of gross profit and normalized operating expenses before depreciation as a percentage of gross profit indicators of operating performance and expense control.

Operating Expenses

For the three-month period ended December 31, 2023

Consolidated Operations

Operating expenses before depreciation and operating expenses before depreciation as a percentage of gross profit increased due to recent acquisitions and share-based compensation expenses related to the consolidation of ownership of the Used Digital Division and one-off software implementation costs. Normalized operating expenses before depreciation increased due to recent acquisitions.

Canadian Operations

Operating expenses before depreciation and operating expenses before depreciation as a percentage of gross profit increased for the reasons stated above while normalized operating expenses before depreciation as a percentage of gross profit were lower.

U.S. Operations

Operating expenses before depreciation and operating expenses before depreciation as a percentage of gross profit increased due to higher advertising costs, insurance, and technology expenses.

For the year ended December 31, 2023

Consolidated Operations

Operating expenses before depreciation and operating expenses before depreciation as a percentage of gross profit increased due to recent acquisitions and share based compensation expenses related to the ownership consolidation of the Used Digital Division.

Canadian Operations

Operating expenses before depreciation and operating expenses before depreciation as a percentage of gross profit increased for the reasons stated above.

U.S. Operations

Operating expenses before depreciation and operating expenses before depreciation as a percentage of gross profit increased largely due to higher advertising costs, insurance, and property tax expenses.

Net (Loss) Income and Adjusted EBITDA

See Section 15 Non-GAAP and Other Financial Measure Reconciliations for the composition of adjusted EBITDA and adjusted EBITDA margin.

For the three-month period ended December 31, 2023

The following table summarizes net (loss) income and adjusted EBITDA for the three-month periods ended December 31:

	Three-Months Ended December 31, 2023 Three-Months Ended December 31, 2022 Canada U.S. Total Canada U.S. Total
Net (loss) income for the period Adjusted EBITDA Adjusted EBITDA margin	(16,020) (6,610) (22,630) 15,043 (233) 14,810 47,945 (1,508) 46,437 46,027 5,016 51,043 3.8 % (0.7)% 3.1 % 3.9 % 2.3 % 3.7 %

Net (Loss) Income

Net loss decreased as a result of higher operating expenses primarily from the ownership consolidation of the Used Digital Division and higher floorplan costs, partially offset by increased gross profits from new vehicle sales, PS&CR operations and contributions from recent acquisitions.

Adjusted EBITDA

Adjusted EBITDA and adjusted EBITDA margin both declined primarily as result of lower contributions from the U.S., increased flooring expenses, and lower used retail vehicle sales.

AutoCanada • 2023 Fourth Quarter Report • Page 15

Adjusted EBITDA ($ Millions) and Adjusted EBITDA Margin %

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5.4%
4.0%
3.1%
2.9%
45.0 94.1 66.7 46.4
Q1 2023 Q2 2023 Q3 2023 Q4 2023
Adjusted EBITDA Adjusted EBITDA Margin %
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For the year ended December 31, 2023

The following table summarizes net income (loss) and adjusted EBITDA for the years ended December 31:

	Year Ended December 31, 2023 Year Ended December 31, 2022 Canada U.S. Total Canada U.S. Total
Net income (loss) for the year Adjusted EBITDA Adjusted EBITDA margin	67,973 (14,192) 53,781 76,263 14,797 91,060 246,522 5,717 252,239 232,419 32,755 265,174 4.4 % 0.7 % 3.9 % 4.5 % 3.6 % 4.4 %

Net Income (Loss)

Net income decreased compared to prior year as a result of lower contributions from the U.S., higher floorplan financing costs and higher operating expenses, partially offset by contributions from recent acquisitions.

Adjusted EBITDA

Adjusted EBITDA and adjusted EBITDA margin declined for the reasons stated above.

Finance costs

The Company incurs finance costs on its revolving floorplan facilities, indebtedness, lease liabilities under IFRS 16, and unrealized fair value changes on interest rate swaps.

The Company enters into interest swap agreements for the purpose of managing exposure to interest rate fluctuations. Any changes in the fair value of these instruments are recorded as finance costs as the Company has elected to not apply hedge accounting to these contracts. Current interest rate swap agreements include a $50.0 million swap contract that matures in 2024, and $227.8 million in swap contracts maturing in 2025 to 2026 which help to mitigate interest rate risk in the current high interest rate environment. For further details, refer to Note 24 in the Annual Financial Statements.

On February 10, 2022, the Company recognized a $9.9 million loss in relation to the extinguishment of the $250 Million Notes (as defined in Section 6 Liquidity and Capital Resources) in Q1 2022. Concurrent with the redemption of the $250 Million Notes, the associated embedded derivative was extinguished, resulting in a loss of $29.3 million recognized in Q1 2022. As at December 31, 2023, the fair value of the embedded derivative relating to the $350 Million Notes (as defined in Section 6 Liquidity and Capital Resources) was $nil. For further details over the embedded derivatives, refer to Note 31 in the Annual Financial Statements.

AutoCanada • 2023 Fourth Quarter Report • Page 16

The following table details the finance costs during the three-month periods and years ended December 31:

	Three-Months Ended December 31	Year Ended December 31
	2023 $ 2022 $	2023 $ 2022 $
Finance costs: Interest on long-term indebtedness Interest on lease liabilities Loss on extinguishment of debt Unrealized fair value changes on non-hedging instruments Amortization of terminated hedges Loss on extinguishment of embedded derivative	9,858 8,121 8,470 8,283 — — 1,211 (264) 616 817 — —	40,911 29,325 33,019 29,828 1,382 9,860 928 (9,303) 3,067 3,268 — 29,306
Floorplan financing Interest rate swap settlements Other finance costs	20,155 16,957 19,809 15,675 (1,779) (575) 1,055 (657)	79,307 92,284 68,596 33,644 (6,624) 1,084 4,660 4,466
	39,240 31,400	145,939 131,478

During the three-month period ended December 31, 2023, finance costs for revolving floorplan facilities increased compared to prior year reflecting an increase in floorplan interest rates, higher new vehicle inventory balances, partially offset by lower used vehicle inventories.

Income taxes

The following table summarizes income taxes for the three-month periods and years ended December 31:

	Three-Months Ended December 31	Year Ended December 31
	2023 $ 2022 $	2023 $ 2022 $
Current tax Deferred tax(recovery)	738 4,487 3,797 5,507	21,849 43,545 8,735 (10,721)
Total income tax expense	4,535 9,994	30,584 32,824
Effective income tax rate	(25.1)% 40.3%	36.3% 26.5%
Statutoryincome tax rate	25.4% 25.5%	25.4% 25.5%

The period-over-period change in effective rate for the three-months and year ended December 31, 2023 is primarily due to unrecognized deferred tax assets, adjustments in respect of prior years and other permanent items, relative to the change in earnings.

AutoCanada • 2023 Fourth Quarter Report • Page 17

5. ACQUISITIONS, DIVESTITURES, AND OTHER RECENT DEVELOPMENTS

The Company has completed the following transactions since January 1, 2023:

Dealership Open Points

Maple Ridge GM

On March 1, 2024, the newly built open point dealership, Maple Ridge GM, commenced operations. The dealership consists of a dealership and service facility with 14 service bays and is the Company’s first GM dealership in the Metro Vancouver area.

Porsche Classic & Service Centre (the "Centre")

On November 16, 2023, the Company announced that it had been awarded the rights to open a Porsche Classic & Service Centre in Windsor, Ontario. The Centre will be the first Porsche Classic centre in Canada and will be a Genuine Porsche service and parts centre. The Centre complements Porsche Centre London, AutoCanada's existing Porsche dealership in London, Ontario and is expected to be completed in the fourth quarter of 2025.

Acquisitions

DCCHail Paintless Dent Repair Collision Centre

On February 23, 2023, the Company acquired 100% of the shares of DCCHail, a paintless dent repair service provider operating throughout western Canada.

Premier Chevrolet Cadillac Buick GMC and Collision Centre

On April 17, 2023, the Company acquired substantially all of the assets of Premier Chevrolet Cadillac Buick GMC dealership and collision centre located in Windsor, Ontario.

London Auto Collision Centre

On May 1, 2023, the Company acquired 100% of the shares of London Auto Collision, a collision centre located in London, Ontario.

Divestitures

Settlement of Legal Proceedings and Sale of Properties to CanadaOne Auto Group

On September 8, 2023, the Company and CanadaOne Auto Group ("COAG") agreed to resolve their legal proceedings that were commenced in 2019. As part of this resolution, AutoCanada has agreed to sell to COAG two properties on which COAG dealerships are located, and COAG has agreed to amend the leases for two AutoCanada dealerships located on properties owned by COAG.

On February 1, 2024, the Company completed the sale of two land and buildings in British Columbia and Alberta to COAG for cash consideration of $41.4 million plus customary closing adjustments. The land and buildings were presented as assets held for sale in the Annual Financial Statements.

Other Recent Developments

Kijiji Relationship

On March 31, 2023, the Company announced the continuation of Kijiji’s role as the Company’s preferred online marketplace partner in Canada, as well as the integration of consumer solutions developed by the Company’s Used Digital Division on Kijiji, including a solution to offer F&I products as well as an instant cash offer to Kijiji users.

$25 Million Investment by iA Financial Group ("iA") and Consolidation of Ownership of Used Digital Division

On December 27, 2023, iA invested $25 million for a 10% common equity interest in AutoCanada’s business unit that will sell finance, insurance and warranty products to buyers of private owner-sold vehicles on Kijiji’s online marketplace ("Online C2C F&I Business"). The Company also purchased the 19.1% interest in its Used Digital Division from the Executive Chair of the Company and Other Sellers (collectively the “Minority Interest Holders”) for $23.9 million in cash, funded from the proceeds of the iA investment and $7.5 million in share units issuable to the Executive Chair and issuance of performance share units (“PSUs”) to the Other Sellers. The share units and PSUs will be settled through the delivery of AutoCanada shares acquired in the market. The Minority Interest Holders have agreed to use their after-tax cash proceeds to purchase AutoCanada shares in the market.

AutoCanada • 2023 Fourth Quarter Report • Page 18

6. LIQUIDITY AND CAPITAL RESOURCES

Management is focused on maximizing enterprise liquidity while minimizing cost and risk within the Company’s overall strategic framework. Liquidity risk may arise due to general day-to-day cash requirements and in the management of assets, liabilities and capital resources. Liquidity risk is managed against financial leverage to meet obligations and commitments in a balanced manner.

The principal uses of funds are for capital expenditures, funding acquisitions, debt service and share repurchases. The Company has historically met these requirements by using cash generated from operating activities and through short-term and long-term indebtedness.

Sources of Cash

Credit Facilities

The Company entered into an amended and restated $1,610 million syndicated credit agreement (“Credit Facility”) with the Bank of Nova Scotia (“Scotiabank”), the Canadian Imperial Bank of Commerce (“CIBC”), the Royal Bank of Canada (“RBC”), HSBC Bank Canada ("HSBC"), ATB Financial (“ATB”), the Bank of Montreal (“BMO”), and the Toronto Dominion Bank (“TD”).

On February 3, 2023, the Company amended the Credit Facility including: (i) increases to the revolving and flooring facility limits (ii) changes to the pricing grid, (iii) other administrative and structural changes to meet ongoing operational needs, and (iv) extended the maturity date to April 14, 2026. The $375 million revolving facility is comprised of a $225 million borrowing base facility tranche and $150 million goodwill facility tranche. The Credit Facility includes an accordion feature that allows the revolving credit facility and the wholesale flooring facilities to be increased by certain amounts. The Credit Facility agreement can be found at www.sedarplus.ca.

The following table reflects the limits, amounts drawn and capacity of the Credit Facility as at December 31, 2023:

Type of Facility	Limit	Drawn	Available Capacity
Revolving credit1	375,000	187,000	188,000
Inventoryfloorplan and lease financing	1,235,000	728,935	506,065
Total	1,610,000	915,935	694,065

1 The amount drawn as presented excludes unamortized deferred financing costs. As at December 31, 2023, the Company had total liquidity[6] of $291.1 million comprised of cash and $188.0 million available under the Credit Facility.

Revolving Credit Capacity

The revolving facility provides capacity for operational and growth purposes. The revolving credit balance is included in the calculation of the Company's leverage ratios and certain associated interest charges are added back in the Company's calculation of Adjusted EBITDA.

Floorplan Financing Capacity

The wholesale flooring facilities provides capacity for the purposes of financing the wholesale purchase of new, used, demonstrator and leased vehicle inventory. The facilities are demand in nature and draws are secured by 'floored' inventory. As advances are secured by vehicle inventory and characterized as demand loans, the floorplan indebtedness is classified as a current liability on the Company’s consolidated balance sheet. As floorplan financing is standard in the retail automotive industry and considered to be an operational necessity, the floorplan balance is excluded in the calculation of the Company’s leverage ratios and related floorplan financing expenses are included in the Company's calculation of adjusted EBITDA.

Other Floorplan Financing

The Company has multiple standalone floorplan facilities with other lenders outside of the Credit Facility. The following table provides a breakdown of the Company’s floorplan facilities as at December 31, 2023:

Lender	Limit	Drawn	Available Capacity
Credit Facility – Floorplan	1,235,000	728,935	506,065
Other Canadian Floorplan Facilities	457,345	331,021	126,324
Other U.S. Floorplan Facility	168,632	114,639	53,993
Total	1,860,977	1,174,595	686,382

6 See Section 14 Non-GAAP and Other Financial Measures for further information regarding the composition of this supplementary financial measure.

AutoCanada • 2023 Fourth Quarter Report • Page 19

Financial Covenants

Under the terms of the Credit Facility and various standalone floorplan financing facilities and Original Equipment Manufacturers ("OEM") franchise agreements, the Company is required to comply with certain financial covenants. At December 31, 2023, the Company was in compliance with all of these financial covenants.

The following table summarizes financial covenants under the Credit Facility as at December 31, 2023:

Credit Facility Financial Covenants	Requirement Q4 2023
Senior net funded debt to bank EBITDA ratio Total net funded debt to bank EBITDA ratio Fixed charge coverage ratio	Shall not exceed 2.50 0.67 Shall not exceed 4.00 2.39 Shall not be less than 1.20 3.63

The Credit Facility financial covenants are calculated on a pre-IFRS 16 basis. As the majority of the Company’s subsidiaries are parties to the Credit Facility, the financial covenants are generally based on the consolidated financial statements of the Company with modifications and adjustments as agreed to and permitted under the terms of the Credit Facility. As such, the precise inputs for the Credit Facility financial covenant calculations, including but not limited to bank EBITDA and other funded debt, cannot be directly derived from the financial information available within the Company’s consolidated financial statements.

Total Net Funded Debt Covenant Summary

The following table summarizes the Company’s Total Net Funded Debt for purposes of calculating Total Net Funded Debt to Bank EBITDA Ratio:

	December 31, 2023 $ December 31, 2022 $
Credit Facility, net of unamortized deferred financing costs $350 Million Notes, net of unamortized deferred financing costs Other funded debt accordingto Credit Facility	186,222 178,588 345,401 344,502 18,263 6,846
Total Funded Debt Less: Allowable Cash Nettingaccordingto Credit Facility	549,886 529,936 (69,788) (70,000)
Total Net Funded Debt	480,098 459,936

The following illustrates Total Net Funded Debt and Total Net Funded Debt to Bank EBITDA Ratio for the trailing five quarters.

Total Net Funded Debt ($Millions) and Total Net Funded Debt to Bank EBITDA Ratio

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----- Start of picture text -----

2.39
2.25
2.18
2.08
2.00
460 465 460 449 480
Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023
Total Net Funded Debt Total Net Funded Debt to Bank EBITDA Ratio
----- End of picture text -----

Senior Unsecured Notes

On February 7, 2022, the Company issued Senior Unsecured Notes of $350 million aggregate principal amount (“$350 Million Notes”) at par for a stated interest rate of 5.75% to fund the February 10, 2022 redemption of the then outstanding $250 million senior unsecured notes (“$250 Million Notes”) and for general corporate purposes. The $350 Million Notes have a seven-year term and mature on February 7, 2029 with interest payable semi-annually on February 7 and August 7 of each year. The $350 Million Notes can be redeemed by the Company or the note holders under certain terms and conditions as outlined in the $350 Million Notes indenture, which can be found at www.sedarplus.ca.

AutoCanada • 2023 Fourth Quarter Report • Page 20

Non-Recourse Mortgage Financing

On June 22, 2022, the Company executed a non-recourse mortgage for the land and construction costs associated with the development of two dealerships on a property in Maple Ridge, British Columbia. The mortgage is comprised of three facilities with an aggregate limit of $39.0 million, at a variable interest rate of prime + 1.50% (combined total rate of 8.70% as at December 31, 2023). The mortgage has a three-year term, twenty-year amortization, and require monthly interest-only payments until construction is complete. As at December 31, 2023, the value of this mortgage, net of unamortized deferred financing costs, was $13.5 million (2022 - $13.5 million).

On June 30, 2022, the Company executed two non-recourse mortgages totaling $18.6 million to fund the purchase of land and buildings in Windsor, Ontario and London, Ontario. The mortgages have a five-year term with a fixed interest rate of 7.07%, and require quarterly installments of principal and interest based on a twenty-five-year amortization, with the outstanding mortgage balance due at the end of the term. As at December 31, 2023, the value of the mortgages, net of unamortized deferred financing costs, was $17.6 million (2022 - $18.4 million).

As at December 31, 2023, the combined value of the mortgages, net of unamortized deferred financing costs, was $31.2 million (2022 - $31.9 million). The Credit Facility allows for up to $100 million of non-recourse mortgages and are excluded for purposes of calculating the Credit Facility financial covenants.

Gross Lease Adjusted Indebtedness[7] Summary

Gross lease adjusted leverage ratio[8] is a leverage measure used by management to evaluate the leverage of the Company as it includes lease liabilities under IFRS 16 in the calculation of gross lease adjusted indebtedness. The Company has targeted a gross lease adjusted leverage ratio of 4.5x or less. The following table summarizes the Company's gross lease adjusted indebtedness and gross lease adjusted leverage ratio

	December 31, 2023 $ December 31, 2022 $
Credit facility, net of unamortized deferred financing costs $350 Million Notes, net of unamortized deferred financing costs Non-recourse mortgages and other debt	186,222 178,588 345,401 344,502 31,299 32,038
Total indebtedness Add: Lease liabilities	562,922 555,128 497,424 484,877
Gross lease adjusted indebtedness	1,060,346 1,040,005
Adjusted EBITDA - trailingtwelve months1	252,239 265,174
Gross lease adjusted leverage ratio	4.20x 3.92x

1 The Company has revised the comparative figure to back out $374 of amortization of intangible assets.

The following chart illustrates the gross lease adjusted indebtedness and gross lease adjusted leverage ratios for the trailing five quarters. The Q4 2022 to Q3 2023 gross lease adjusted leverage ratios in the following chart have been revised to back out $374 of amortization of intangible assets of the applicable TTM adjusted EBITDA.

Gross Lease Adjusted Indebtedness ($Millions) and Gross Lease Adjusted Leverage Ratio

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4.23 4.20
3.92 3.80 4.02
1,040 1,049 1,011 1,032 1,060
Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023
Gross lease adjusted indebtedness Gross lease adjusted leverage ratio
----- End of picture text -----

7 See Section 14 Non-GAAP and Other Financial Measures for further information regarding the composition of this capital management measure.

8 See Section 14 Non-GAAP and Other Financial Measures for further information regarding the composition of this Non-GAAP Measure.

AutoCanada • 2023 Fourth Quarter Report • Page 21

Uses of Cash

Non-Growth Capital Expenditures

Non-growth capital expenditures are capital expenditures incurred to maintain existing levels of service and is largely affected by replacement and purchases of fixed operations equipment. These include the following:

• Capital expenditures to replace property and equipment

• Any costs incurred to enhance the operational life of existing property and equipment

Non-growth capital expenditures can fluctuate from period to period depending on our needs to upgrade or replace existing property and equipment.

Growth Capital Expenditures

Growth capital expenditures are discretionary capital expenditures incurred to expand sales and service capacity. They represent cash outlays intended to provide additional future cash flows and are expected to provide benefit in future periods. These include the following:

• Expansions

• New locations and open point construction

• Re-imaging mandated by manufacturers

• Relocations

For the year ended December 31, 2023, the Company incurred $49.7 million in capital expenditures related to the construction of the Maple Ridge GM Open Point and OEM mandated reimaging of various dealership properties. In addition, the Company incurred $7.7 million in real estate acquisition expenditures.

Capital expenditures is reported in aggregate in Note 18 of the Annual Financial Statements. The following table breaks down capital expenditures for the periods indicated into non-growth and growth capital expenditures and real estate acquisitions.

	Three-Months Ended December 31	Year Ended December 31
	2023 $ 2022 $	2023 $ 2022 $
Non-growth capital expenditures Growth capital expenditures1	1,676 5,922 11,010 15,449	13,363 11,309 49,692 36,098
Total capital expenditures Real estate acquisition expenditures1	12,686 21,371 1,361 6,555	63,055 47,407 7,659 15,790
Total capital related expenditures	14,047 27,926	70,714 63,197

1 Categorization reclasses occurred in Q4 2023 between growth capital expenditures and real estate acquisition expenditures for the Q1 2023, Q2 2023 and Q3 2023 periods. These reclasses did not impact total capital related expenditures incurred in 2023.

Capital Commitments

At December 31, 2023, the Company is committed to capital expenditure obligations in the amount of approximately $5.4 million related to dealership relocations, reimagings, and open points with expected completion of these commitments in 2024. The Company is in discussions with OEMs to adjust spending and/or capital commitments as appropriate for changing conditions.

Dealership relocations and reimagings are usually associated with OEM requirements. Many OEMs provide assistance in the form of additional incentives or contribute funding if facilities meet specified requirements. We expect certain facility upgrades may generate additional OEM incentive payments. It is also expected certain capital commitments may be reimbursed by the respective landlords that own the facilities.

The Company manages our liquidity to ensure access to sufficient funding at acceptable costs to fund our ongoing operating requirements and future capital expenditures. We expect to pay for our future capital commitments out of existing cash balances and financing through borrowings on our Credit Facility.

Working Capital

Under the franchise agreements with OEM partners, the Company is required to maintain a minimum level of working capital within each individual dealership. These individual dealership requirements serve to provide the Company with a baseline liquidity target and strive to maintain working capital in excess of the prescribed minimum thresholds.

AutoCanada • 2023 Fourth Quarter Report • Page 22

The Company is actively focused on managing working capital through various initiatives including improved collection processes, management of payables and maximizing the utilization of inventory floorplan financing. The efficacy and effectiveness of these initiatives may be influenced by the OEM working capital framework. As such, our ability to transfer cash from subsidiaries as well as fund capital expenditures, acquisitions, dividends, or other commitments in the future may be limited if sufficient funds are not generated by the Company or its subsidiaries. At current levels, working capital is sufficient to meet our ongoing commitments and operational requirements for the business.

Corporate Credit Rating

The Company is rated by S&P Global Ratings (“S&P”), an independent credit rating agency.

On January 12, 2022, S&P issued a research update where the following changes were made:

• AutoCanada Issuer Credit Rating: 'B+' (Stable) from 'B'

• Senior Notes Rating: 'B+' from 'B'

On January 30, 2023 and June 26, 2023, S&P issued a research update where the Company's Issuer Credit Rating remained unchanged at 'B+'.

7. RELATED PARTY TRANSACTIONS

Transactions with related companies

During the year, there were transactions with companies controlled by the Executive Chair. These counterparties are:

• A vehicle wholesale and export business that supplies and purchases used vehicles with the Company

• A firm, that provides administrative, limited transportation, and other support services

All significant transactions between AutoCanada and related parties were reviewed by the Company's Board of Directors and are based on normal commercial terms and conditions. A summary of the transactions are as follows:

	2023	2022
	$	$
Administrative and other support and sourcing fees	1,566	2,208
Used vehicle(sales to) purchases from relatedparties	(1,755)	199
	(189)	2,407

Executive Advance

During the year ended December 31, 2021, the Company issued a $2.0 million loan to the former President, collateralized by his outstanding stock options under the Company's existing Stock Option Plan. The loan was interest bearing at a rate of 1.00% (2022 - 1.00%) per annum and was being repaid on a monthly basis. As the loan was considered to represent an advance against share-based compensation secured against the Company's shares, it was treated as an equity instrument. The loan was fully repaid during the period ended December 31, 2023 (2022 - $1.6 million).

Used Digital Division

A company controlled by the Executive Chair held a 15% common interest in AutoCanada UD LP (the "Partnership"), which vested at the time of grant. Changes in the value of the 15% interest are recorded in operating expenses.

On December 27, 2023, the Company consolidated the Used Digital Division and the 15% interest in the Partnership was purchased from a company controlled by the Executive Chair for aggregate purchase consideration of $30.0 million consisting of $22.5 million in cash, funded from the proceeds of the Online C2C F&I Business investment, and $7.5 million in stock units. The agreement requires $15.0 million of the cash purchase consideration to be used by the company controlled by the Executive Chair to purchase the Company's common shares within a two-year period from the closing date. The shares purchased by the company controlled by the Executive Chair may not be disposed of until the earlier of a two-year period or certain market price conditions being satisfied. As of December 31, 2023, the Company has recorded the cash consideration of $22.5 million in trade and other payables.

Note 33 of the Annual Financial Statements summarizes the transactions between the Company and its related parties.

AutoCanada • 2023 Fourth Quarter Report • Page 23

Key Management Personnel Compensation

Key management personnel consists of the Company's executive officers and directors. Key management personnel compensation is as follows:

	2023	2022
	$	$
Employee costs (including Directors)	6,597	4,808
Short-term employee benefits	198	102
Used Digital Division equity issuance	28,950	391
Share-based compensation	4,503	1,830
	40,248	7,131

8. OUTSTANDING SHARES

As at December 31, 2023, the Company had 23,611,175 (2022 - 23,551,137) common shares outstanding. Basic and diluted weighted average number of shares outstanding for the three-month period ended December 31, 2023 were 23,598,710 and 24,448,178, respectively. Basic and diluted weighted average number of shares outstanding for the year ended December 31, 2023 were 23,561,236 and 24,450,681, respectively. As at March 6, 2024, there were 23,611,175 common shares issued and outstanding.

As at December 31, 2023, the value of the shares held in trust to hedge equity-based compensation plans was $0.3 million (2022 – $0.7 million), which was comprised of 12,465 (2022 - 48,667) shares.

Normal Course Issuer Bid

During the three-month period and year ended December 31, 2023, the Company did not repurchase any common shares under its Normal Course Issuer Bid, which expired on December 27, 2023.

9. DIVIDENDS

AutoCanada’s Board of Directors (“Board”), in consultation with management, continually evaluates the Company’s dividend policy, with a focus on maximizing shareholder value. The declaration of dividends is subject to the discretion of the Board and is evaluated periodically and may be revised.

Considering current market factors and capital allocation priorities, the Board has decided to defer any reinstatement of a dividend until further notice.

10. FREE CASH FLOW

Free cash flow[9] can fluctuate significantly as a result of seasonality in our business operations including changes in trade receivables, inventories, and the timing of the payments of trade payables and revolving floorplan facilities.

	Q4 2023 Q3 2023	Q2 2023	Q1 2023	Q4 2022 Q3 2022 Q2 2022 Q1 2022
Cash (used in) provided by operating activities1 Deduct: Purchase of non-growth capital expenditures	(19,853) 31,028 (1,676) (2,304)	55,005 (5,889)	53,354 (3,494)	37,931 37,453 64,935 7,279 (5,922) (2,343) (1,617) (1,427)
Free cash flow1 Free cash flow - TTM1	(21,529) 28,724 106,171 159,709	49,116 166,095	49,860 180,297	32,009 35,110 63,318 5,852 136,289 111,883 89,145 93,630

1 Certain items have been reclassified within the statement of cash flows. As a result, the year-to-date balances have been corrected and we have restated the Q3 2022 and Q4 2022 quarterly amounts. Refer to Note 36 of the Annual Financial Statements.

9 See Section 14 Non-GAAP and Other Financial Measures for further information regarding the composition of this Non-GAAP Measure.

AutoCanada • 2023 Fourth Quarter Report • Page 24

The following table summarizes the net decrease in cash due to changes in non-cash working capital for the year ended December 31:

	Year ended
	December 31, 2023 $ December 31, 2022 $
Trade and other receivables Inventories Other current assets Trade and other payables1 Revolving floorplan facilities Other liabilities	(6,640) (68,460) (175,899) (223,908) (5,206) 824 (270) (7,515) 184,981 270,794 (518) 176
Net change in non-cash working capital1	(3,552) (28,089)

• 1 Reclassification of comparative figure for presentation purposes. The Company previously included a portion of interest paid in trade and other payables. Prior year comparative has been revised by reclassifying $0.1 million relating to interest paid out of trade and other payables and presented on a separate line on the statements of cash flows. Refer to Note 36 of the Annual Financial Statements.

Changes in non-cash working capital balances can be impacted by a number of factors including seasonal sales trends, strategic decisions regarding inventory levels and the addition of new dealerships.

11. CRITICAL ACCOUNTING ESTIMATES AND ACCOUNTING POLICY DEVELOPMENTS

A complete listing of critical accounting policies, estimates, judgments and measurement uncertainty can be found in Notes 3, 4, and 5 of the Annual Financial Statements.

Certain new standards, interpretations, amendments, and improvements to existing standards were issued by the International Accounting Standards Board or International Financial Reporting Interpretations Committee (“IFRIC”) that are not yet effective for the financial year ended December 31, 2023. A listing of the standards issued which are applicable to the Company can be found in Note 4 of the Annual Financial Statements.

The company adopted the amendments to IAS 12, IAS 1 and IFRS Practice Statement 2, and IAS 8 effective for the interim and audited annual consolidated financial statements commencing January 1, 2023. The amendment standards are further explained in Note 4 of the Annual Financial Statements.

12. DISCLOSURE CONTROLS AND INTERNAL CONTROLS OVER FINANCIAL REPORTING

Disclosure Controls & Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in reports filed with securities regulatory authorities is recorded, processed, summarized, and reported on a timely basis, and is accumulated and communicated to the Company’s management, including the Executive Chair and Chief Financial Officer (“CFO”) to allow timely decisions regarding required disclosure.

As of December 31, 2023, the Executive Chair and CFO, evaluated the effectiveness of the design and operation of its disclosure controls and procedures, as defined in National Instrument 52–109 of the Canadian Securities Administrators, and have concluded that the Company’s disclosure controls and procedures are effective.

Internal Controls over Financial Reporting

Management is responsible for establishing and maintaining adequate internal controls over financial reporting. These controls include policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

AutoCanada • 2023 Fourth Quarter Report • Page 25

All control systems contain inherent limitations, no matter how well designed. As a result, management acknowledges that its internal controls over financial reporting will not prevent or detect all misstatements due to error or fraud. In addition, management’s evaluation of controls can provide only reasonable, not absolute, assurance that all control issues that may result in material misstatements, if any, have been detected.

Management, under the supervision of and with the participation of the Executive Chair and CFO, evaluated the effectiveness of the Corporation’s internal controls over financial reporting (as defined under national Instrument 52–109 Certification of Disclosure in Issuers’ Annual and Interim Filings). In making this evaluation, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commissions (“COSO”) in Internal Control – Integrated Framework (2013) . Based on that evaluation, the Executive Chair and CFO have concluded that, as at December 31, 2023, the Corporation’s internal controls over financial reporting were effective. This evaluation took into consideration the Corporation’s Corporate Disclosure Policy and the functioning of its Disclosure Policy Committee.

Changes in Internal Control over Financial Reporting

During the year ended December 31, 2023, there were no changes in the Company’s disclosure controls or internal controls over financial reporting that materially affected, or would be reasonably likely to materially affect, such controls.

13. RISK FACTORS

AutoCanada faces a number of business risks that could cause future results to differ materially from those results disclosed in this MD&A. Investors and the public should carefully consider our business risks, other uncertainties and potential events as well as the inherent uncertainty of forward looking statements (See Section 1, Reader Advisories and Forward-Looking Statements) when making investment decisions with respect to AutoCanada. If any of the business risks identified by AutoCanada were to occur, our business, financial condition, results of operations, cash flows or prospects could be materially adversely affected. In such case, the trading price of our shares could decline. There may be impacts on general economic conditions, as a result of elevated inflation and/or broadening of inflationary pressures across a wide array of goods and services, higher interest rates, economic recession, the ongoing Ukrainian and Middle East conflicts, pandemics, and other factors, resulting in reduced demand for vehicle sales and service. When and if these economic conditions worsen or stagnate, it can have a material adverse effect on consumer demand for vehicles or service generally, demand from particular consumer categories or demand for particular vehicle types. It can also negatively impact availability of credit to finance vehicle purchases for all or certain categories of consumers. This could result in lower sales, decreased margins on units sold, and decreased profits. Any significant change or deterioration in economic conditions could have a material adverse effect on AutoCanada’s business, financial condition, results of operations, cash flows or prospects.

Additional risks and uncertainties not presently known to us or that management currently deems immaterial may also adversely affect our business and operations. A comprehensive discussion of the known risk factors of AutoCanada and additional business risks is available in our AIF that is available on the SEDAR website at www.sedarplus.ca.

AutoCanada • 2023 Fourth Quarter Report • Page 26

14. NON-GAAP AND OTHER FINANCIAL MEASURES

This MD&A contains certain financial measures that do not have any standardized meaning prescribed by 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 income (loss) or to cash provided by (used in) operating, investing, financing activities, cash, and indebtedness determined in accordance with GAAP, as indicators of our performance. We provide these additional Non-GAAP Measures, capital management measures, and supplementary financial measures to assist investors in determining the Company's ability to generate earnings and cash provided by (used in) operating activities and to provide additional information on how these cash resources are used.

All financial measures can be presented on different basis, including differing segmentation and periods of time. While management may use a subset of the underlying data (including geographic segmentation or differing time) to calculate the relevant financial measures. the underlying method of calculation as defined below does not change. See below for list of potential presentation basis:

• Canadian Operations segment: See Section 18 Segmented Operating Results Data for additional information

• U.S. Operations segment: See Section 18 Segmented Operating Results Data for additional information

• Consolidated basis: See Section 18 Segmented Operating Results Data for additional information

• Same store basis: See Section 19 Same Store Results Data for additional information

Non-GAAP Measures, capital management measures, and supplementary financial measures referenced in the MD&A are listed and defined below.

Non-GAAP Measures and Capital Management Measures

Cautionary Note Regarding Non-GAAP Measures

Adjusted EBITDA, adjusted EBITDA margin, free cash flow, gross lease adjusted leverage ratio, normalized operating expenses before depreciation and normalized operating expenses before depreciation as a percentage of gross profit 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, cash flows from operating, investing and financing activities or as a measure of liquidity and cash flows. The Company’s methods of calculating referenced Non-GAAP Measures may differ from the methods used by other issuers. Therefore, these measures may not be comparable to similar measures presented by other issuers.

We list and define Non-GAAP Measures below:

Adjusted EBITDA

Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) is an indicator of a company’s operating performance over a period of time and ability to incur and service debt. Adjusted EBITDA provides an indication of the results generated by our principal business activities prior to:

• Interest expense (other than interest expense on floorplan financing), income taxes, depreciation, and amortization;

• Charges that introduce volatility unrelated to operating performance by virtue of the impact of external factors (such as share-based compensation amounts attributed to certain equity issuances as part of the Used Digital Division);

• Non-cash charges (such as impairment, recoveries, gains or losses on derivatives, revaluation of contingent consideration and revaluation of redemption liabilities);

• Charges outside the normal course of business (such as restructuring, gains and losses on dealership divestitures and real estate transactions); and

• Charges that are non-recurring in nature (such as provisions for settlement income).

The Company believes adjusted EBITDA provides improved continuity with respect to the comparison of our operating performance over a period of time.

Adjusted EBITDA Margin

Adjusted EBITDA margin is an indicator of a company’s operating performance specifically in relation to our revenue performance.

The Company believes adjusted EBITDA margin provides improved continuity with respect to the comparison of our operating performance with retaining and growing profitability as our revenue and scale increases over a period of time.

AutoCanada • 2023 Fourth Quarter Report • Page 27

Free Cash Flow

Free cash flow is a measure used by management to evaluate the Company's performance. While the closest 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 operating activities (including the net change in non-cash working capital balances) is available after certain capital expenditures (excluding growth capital expenditures, acquisitions of dealerships and related facilities, and share buy-backs). It should be noted that although management considers 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 such purposes. Refer to Section 10 for further details.

Gross Lease Adjusted Leverage Ratio

Gross lease adjusted leverage ratio is a measure used by management to evaluate the leverage of the Company.

The Company believes this measure provides more meaningful analysis as this measure is used by the credit rating agency for their analysis. Gross lease adjusted leverage ratio is calculated as gross lease adjusted indebtedness divided by Adjusted EBITDA on a TTM basis.

Gross Lease Adjusted Indebtedness - Capital Management Measure

Gross lease adjusted indebtedness is a capital management measure used by management to evaluate the leverage of the Company.

Gross lease adjusted indebtedness is calculated as total indebtedness, which is net of unamortized deferred financing costs, adjusted for embedded derivative, plus lease liabilities (under IFRS 16).

Normalized Operating Expenses Before Depreciation

Normalized operating expenses before depreciation is an indicator of a company’s operating expense before depreciation over a period of time, normalized for the following items:

• Transaction costs related to acquisitions, dispositions, and open points;

• Software implementation costs associated with the configuration or customization of software as a service arrangement; and

• Share-based compensation expense.

The Company believes normalized operating expenses before depreciation provides a comparison of our operating expense normalized for transactions that are not indicative of the Company's operating expenses over time. Note the current definition of normalized operating expenses before depreciation differs from previous definitions.

Normalized Operating Expenses Before Depreciation as a Percentage of Gross Profit

Normalized operating expenses before depreciation as a percentage of gross profit is a measure of a company’s normalized operating expenses before depreciation over a period of time in relation to gross profit.

The Company believes this measure provides a comparison of our operating performance normalized for transactions that are not indicative of the Company's operating expenses over time.

Supplementary Financial Measures

We list and define supplementary financial measures below:

Average Selling Price per New Vehicle

Average selling price per new vehicle is new vehicle revenue for the referenced period, divided by the number of total new vehicles sold during the referenced period.

Average Selling Price per Used Vehicle

Average selling price per used vehicle is used vehicle revenue for the referenced period, divided by the number of used retail vehicles sold during the referenced period.

F&I Gross Profit Per Retail Unit Average

F&I gross profit per retail unit average is F&I gross profit divided by the total retail vehicles sold by the Company.

Gross profit percentage

Gross profit percentage is gross profit divided by revenue.

AutoCanada • 2023 Fourth Quarter Report • Page 28

Liquidity

Liquidity is calculated by adding cash and available revolver facility, less revolver balance drawn.

New Fleet Vehicles

New fleet vehicles represents new fleet vehicles (excluding retail vehicles) sold by the Company.

New Vehicle Gross Profit Per Retail Unit

New vehicle gross profit per retail unit is new retail vehicle gross profit divided by new retail vehicles sold by the Company.

New Retail Vehicles

New retail vehicles represents new retail vehicles (excluding fleet vehicles) sold by the Company.

New Vehicle Inventory Days of Supply

New vehicle inventory days of supply is an average ending balance of prior quarter and current quarter new vehicle and demo vehicle inventory divided by current quarter new and demo vehicle cost of sales, multiplying the total by days in the quarter.

Operating Expenses Before Depreciation

Operating expenses before depreciation is operating expenses less depreciation and amortization.

Operating Expenses Before Depreciation as a Percentage of Gross Profit

Operating expenses before depreciation as a percentage of gross profit is operating expenses before depreciation, divided by gross profit.

Service and Collision Repair Orders ("Repair Orders" or "RO's")

Service and collision repair orders represents total repair orders completed and sold by the Company's parts and service departments and collision centres.

Total New Vehicles

Total new vehicles represents new fleet and new retail vehicles sold by the Company.

Total Retail Vehicles

Total retail vehicles represents new and used retail vehicles (excluding fleet and wholesale vehicles) sold by the Company.

Total Vehicles

Total vehicles represents new retail, used retail, and fleet vehicles (excluding wholesale vehicles) sold by the Company.

Used Vehicle Gross Profit Per Retail Unit

Used vehicle gross profit per retail unit is used retail vehicle (excluding wholesale vehicles) gross profit divided by used retail vehicles sold by the Company.

Used Retail Vehicles

Used retail vehicles represents used retail vehicles (excluding wholesale vehicles) sold by the Company.

Used-to-new retail units ratio

Used-to-new retail units ratio is used retail vehicles divided by new retail vehicles sold by the Company.

Used Vehicle Inventory Days of Supply

Used vehicle inventory days of supply is an average ending balance of prior quarter and current quarter used vehicle inventory divided by current quarter used vehicle cost of sales, multiplying the total by days in the quarter.

Used Wholesale Vehicles

Used wholesale vehicles represents used wholesale vehicles (excluding retail vehicles) sold by the Company.

AutoCanada • 2023 Fourth Quarter Report • Page 29

15. NON-GAAP AND OTHER FINANCIAL MEASURE RECONCILIATIONS

Adjusted EBITDA and Segmented Adjusted EBITDA

The following tables illustrate adjusted EBITDA and segmented adjusted EBITDA for the three-month periods and years ended December 31:

	Three-Months Ended December 31, 2023 Three-Months Ended December 31, 2022 Canada U.S. Total Canada U.S. Total
Net(loss)income for theperiod	(16,020) (6,610) (22,630) 15,043 (233) 14,810
Add back: Income tax expense (recovery) Depreciation of right of use assets Depreciation of property and equipment Amortization of intangible assets1 Interest on long-term indebtedness Lease liabilityinterest	4,546 (11) 4,535 9,908 86 9,994 7,943 743 8,686 7,658 668 8,326 5,787 672 6,459 5,168 496 5,664 128 — 128 374 — 374 7,020 2,838 9,858 5,100 3,021 8,121 7,630 840 8,470 7,305 978 8,283
	17,034 (1,528) 15,506 50,556 5,016 55,572
Add back: Recoveries of non-financial assets Share-based compensation - Used Digital Division (Gain) loss on redemption liabilities Unrealized fair value changes in derivative instruments Amortization of loss on terminated hedges Unrealized foreign exchange losses Used Digital Division transaction costs Software implementation costs (Gain)loss on disposal of assets	(3,538) — (3,538) (8,691) — (8,691) 36,725 — 36,725 391 — 391 (3,639) — (3,639) 4,829 — 4,829 (1,437) — (1,437) (2,496) — (2,496) 616 — 616 817 — 817 108 — 108 497 — 497 1,774 — 1,774 — — — 677 — 677 — — — (375) 20 (355) 124 — 124
Adjusted EBITDA1	47,945 (1,508) 46,437 46,027 5,016 51,043

1 The Company has revised the comparative figure to back out $374 of amortization of intangible assets.

AutoCanada • 2023 Fourth Quarter Report • Page 30

	Year Ended December 31, 2023 Year Ended December 31, 2022 Canada U.S. Total Canada U.S. Total
Net income(loss)for theyear	67,973 (14,192) 53,781 76,263 14,797 91,060
Add back: Income tax expense (recovery) Depreciation of right of use assets Depreciation of property and equipment Amortization of intangible assets1 Interest on long-term indebtedness Lease liabilityinterest	30,699 (115) 30,584 29,626 3,198 32,824 30,495 2,948 33,443 28,033 2,748 30,781 22,726 2,304 25,030 19,117 1,735 20,852 529 — 529 374 — 374 29,498 11,413 40,911 22,605 6,720 29,325 29,680 3,339 33,019 26,271 3,557 29,828
	211,600 5,697 217,297 202,289 32,755 235,044
Add back: Recoveries of non-financial assets Share-based compensation - Used Digital Division (Gain) loss on redemption liabilities Loss on extinguishment of debt Unrealized fair value changes in derivative instruments Amortization of loss on terminated hedges Unrealized foreign exchange losses (gains) Loss on extinguishment of embedded derivative Used Digital Division transaction costs Software implementation costs (Gain)loss on disposal of assets	(3,538) — (3,538) (8,691) — (8,691) 36,725 — 36,725 391 — 391 (3,639) — (3,639) 4,829 — 4,829 1,382 — 1,382 9,860 — 9,860 (1,339) — (1,339) (9,321) — (9,321) 3,067 — 3,067 3,268 — 3,268 255 — 255 192 — 192 — — — 29,306 — 29,306 1,774 — 1,774 — — — 677 — 677 — — — (442) 20 (422) 296 — 296
Adjusted EBITDA1	246,522 5,717 252,239 232,419 32,755 265,174

1 The Company has revised the comparative figure to back out $374 of amortization of intangible assets.

Adjusted EBITDA Margin

The following tables illustrate adjusted EBITDA margin for the three-month periods and years ended December 31:

	Three-Months Ended December 31, 2023 Three-Months Ended December 31, 2022 Canada U.S. Total Canada U.S. Total
Adjusted EBITDA1 Revenue	47,945 (1,508) 46,437 46,027 5,016 51,043 1,277,752 206,042 1,483,794 1,172,712 215,494 1,388,206
Adjusted EBITDA Margin	3.8 % (0.7)% 3.1 % 3.9 % 2.3 % 3.7 %

1 The Company has revised the comparative figure to back out $374 of amortization of intangible assets.

	Year Ended December 31, 2023 Year Ended December 31, 2022
	Canada U.S. Total Canada U.S. Total
Adjusted EBITDA1 Revenue	246,522 5,717 252,239 232,419 32,755 265,174 5,607,194 829,609 6,436,803 5,129,658 910,961 6,040,619
Adjusted EBITDA Margin	4.4 % 0.7 % 3.9 % 4.5 % 3.6 % 4.4 %

1 The Company has revised the comparative figure to back out $374 of amortization of intangible assets.

AutoCanada • 2023 Fourth Quarter Report • Page 31

Free Cash Flow

The following table illustrates free cash flow for the last eight consecutive quarters. Refer to Section 10 for further details.

	Q4 2023 Q3 2023	Q2 2023	Q1 2023	Q4 2022 Q3 2022 Q2 2022 Q1 2022
Cash (used in) provided by operating activities1 Deduct: Purchase of non-growth capital expenditures	(19,853) 31,028 (1,676) (2,304)	55,005 (5,889)	53,354 (3,494)	37,931 37,453 64,935 7,279 (5,922) (2,343) (1,617) (1,427)
Free cash flow1 Free cash flow - TTM1	(21,529) 28,724 106,171 159,709	49,116 166,095	49,860 180,297	32,009 35,110 63,318 5,852 136,289 111,883 89,145 93,630

1 Certain items have been reclassified within the statement of cash flows. As a result, the year-to-date balances have been corrected and we have restated the Q3 2022 and Q4 2022 quarterly amounts. Refer to Note 36 of the Annual Financial Statements.

Normalized Operating Expenses Before Depreciation and Normalized Operating Expenses Before Depreciation as a Percentage of Gross Profit

The following tables illustrate segmented normalized operating expenses before depreciation and normalized operating expenses before depreciation as a percentage of gross profit, for the three-month periods and years ended December 31:

	Three-Months Ended December 31, 2023	Three-Months Ended December 31, 2022
	Canada U.S. Total	Canada U.S. Total
Operating expenses Deduct: Depreciation of right of use assets Depreciation of property and equipment Amortization of intangible assets	218,699 32,117 250,816 166,513 30,884 197,397 (7,943) (743) (8,686) (7,658) (668) (8,326) (5,787) (672) (6,459) (5,168) (496) (5,664) (128) — (128) (374) — (374)
Operating expenses before depreciation Normalizing Items: Add back: Acquisition-related costs (including Used Digital Division transaction costs) Software implementation costs Share-based compensation expense	204,841 30,702 235,543 153,313 29,720 183,033 (2,415) — (2,415) (2,239) — (2,239) (677) — (677) — — — (38,533) — (38,533) (2,084) — (2,084)
Normalized operating expenses before depreciation Grossprofit	163,216 30,702 193,918 148,990 29,720 178,710 225,134 32,708 257,842 208,317 34,305 242,622
Normalized operating expenses before depreciation as a percentage of gross profit	72.5 % 93.9 % 75.2 % 71.5 % 86.6 % 73.7 %

AutoCanada • 2023 Fourth Quarter Report • Page 32

	Year Ended December 31, 2023	Year Ended December 31, 2022
	Canada U.S. Total	Canada U.S. Total
Operating expenses	779,389 135,874 915,263 683,064 127,954 811,018
Deduct: Depreciation of right of use assets Depreciation of property and equipment Amortization of intangible assets	(30,495) (2,948) (33,443) (28,033) (2,748) (30,781) (22,726) (2,304) (25,030) (19,117) (1,735) (20,852) (529) — (529) (374) — (374)
Operating expenses before depreciation Normalizing Items: Add back: Acquisition-related costs (including Used Digital Division transaction costs) Software implementation costs Share-based compensation expense	725,639 130,622 856,261 635,540 123,471 759,011 (5,391) — (5,391) (4,905) (13) (4,918) (677) — (677) — — — (43,210) — (43,210) (5,801) — (5,801)
Normalized operating expenses before depreciation Grossprofit	676,361 130,622 806,983 624,834 123,458 748,292 977,662 144,125 1,121,787 886,623 156,250 1,042,873
Normalized operating expenses before depreciation as a percentage of gross profit	69.2 % 90.6 % 71.9 % 70.5 % 79.0 % 71.8 %

Gross Lease Adjusted Indebtedness and Gross Lease Adjusted Leverage Ratio Reconciliation

The following table illustrates the Company’s gross lease adjusted indebtedness and gross lease adjusted leverage ratio as at December 31, 2023 and December 31, 2022:

	December 31, 2023 $ December 31, 2022 $
Credit facility, net of unamortized deferred financing costs $350 Million Notes, net of unamortized deferred financing costs Non-recourse mortgages and other debt	186,222 178,588 345,401 344,502 31,299 32,038
Total indebtedness	562,922 555,128
Add: Lease liabilities	497,424 484,877
Gross lease adjusted indebtedness	1,060,346 1,040,005
Adjusted EBITDA - trailingtwelve months1	252,239 265,174
Gross lease adjusted leverage ratio	4.20x 3.92x

1 The Company has revised the comparative figure to back out $374 of amortization of intangible assets.

AutoCanada • 2023 Fourth Quarter Report • Page 33

16. SELECTED ANNUAL FINANCIAL INFORMATION

The following table shows the results of the Company for the years ended December 31, 2023 and December 31, 2022.

	2023	2022
Income Statement Data
New vehicles	2,554,227	2,160,565
Used vehicles	2,726,476	2,870,145
Parts, service and collision repair	782,326	642,665
Finance, insurance and other	373,774	367,244
Revenue	6,436,803	6,040,619
New vehicles	222,840	219,312
Used vehicles	129,213	121,299
Parts, service and collision repair	417,026	353,512
Finance, insurance and other	352,708	348,750
Gross Profit	1,121,787	1,042,873
Gross profit %	17.4%	17.3 %
Operating expenses	915,263	811,018
Operating expenses as a % of gross profit	81.6%	77.8 %
Operating profit	223,640	254,551
Net income	53,781	91,060
Diluted net income per share attributable to AutoCanada shareholders	2.06	3.03
Adjusted EBITDA3	252,239	265,174
Operating Data
New retail vehicles sold	40,163	36,216
Used retail vehicles sold	63,167	63,611
Total retail vehicles sold	103,330	99,827
# of dealerships at year end1	87	86
# of same store dealerships1, 2	51	49
# of service bays atyear end	1,382	1,367

1 Dealerships is defined as 83 franchised automobile dealerships and Used Digital Division dealerships (including 3 used vehicle dealerships and 1 used vehicle auction).

2 Same store dealerships is defined as Canadian franchised automobile dealerships and Used Digital Division dealerships that have been owned for at least two full years since acquisition.

3 The Company has revised the comparative figure to back out $374 of amortization of intangible assets.

AutoCanada • 2023 Fourth Quarter Report • Page 34

17. SELECTED QUARTERLY FINANCIAL INFORMATION

The following table shows the results of the Company for each of the eight most recently completed quarters. Results from operations are subject to seasonality and have historically been lower in the first and fourth quarters and higher in the second and third quarters. In addition, results may be impacted by acquisitions and are not necessarily indicative of the results of operations to be expected in any given comparable period.

	Q4 2023 Q3 2023	Q2 2023	Q1 2023 Q4 2022	Q3 2022	Q2 2022 Q1 2022
Income Statement Data New vehicles Used vehicles Parts, service and collision repair Finance, insurance and other	605,918 673,363 592,990 690,071 202,448 196,162 82,438 97,825	706,350 739,916 204,968 105,028	568,596 508,008 703,499 626,397 178,748 168,544 88,483 85,257	557,492 807,236 161,805 97,416	583,870 511,195 840,998 595,514 160,307 152,009 100,851 83,720
Revenue	1,483,794 1,657,421	1,756,262	1,539,326 1,388,206	1,623,949	1,686,026 1,342,438
New vehicles Used vehicles Parts, service and collision repair Finance, insurance and other	52,728 60,304 20,004 31,862 108,054 104,135 77,056 93,924	62,324 47,035 110,961 98,418	47,484 48,218 30,312 17,775 93,876 95,661 83,310 80,968	58,760 32,627 88,707 93,540	58,950 53,384 34,125 36,772 90,713 78,431 95,490 78,752
Gross Profit	257,842 290,225	318,738	254,982 242,622	273,634	279,278 247,339
Gross profit percentage Operating expenses Operating expenses as a % of gross profit Net (loss) income Diluted net (loss) income per share attributable to AutoCanada shareholders Adjusted EBITDA3	17.4% 17.5% 250,816 223,830 97.3% 77.1% (22,630) 22,799 (0.81) 0.81 46,437 66,719	18.1% 229,016 71.9% 45,228 1.75 94,055	16.6% 17.5% 211,601 197,397 83.0% 81.4% 8,384 14,810 0.32 0.52 45,028 51,043	16.8% 207,266 75.7% 32,870 1.16 76,374	16.6% 18.4% 212,709 193,646 76.2% 78.3% 39,058 4,322 1.33 0.10 75,561 62,196
Operating Data New retail vehicles sold Used retail vehicles sold	9,580 10,555 13,777 16,878	11,257 17,222	8,771 8,100 15,290 14,418	9,186 17,381	9,878 9,052 17,740 14,072
Total retail vehicles sold	23,357 27,433	28,479	24,061 22,518	26,567	27,618 23,124
# of dealerships at period end1 # of same store dealerships1, 2 # of service bays at period end	87 87 51 50 1,382 1,382	87 50 1,355	86 86 50 49 1,354 1,367	85 49 1,331	82 80 49 49 1,322 1,293

1 Dealerships is defined as 83 franchised automobile dealerships and Used Digital Division dealerships (including 3 used vehicle dealerships and 1 used vehicle auction).

2 Same store dealerships is defined as Canadian franchised automobile dealerships and Used Digital Division dealerships that have been owned for at least two full years since acquisition.

• 3 The Company has revised the Q4 2022 comparative figure to back out $374 of amortization of intangible assets.

AutoCanada • 2023 Fourth Quarter Report • Page 35

18. SEGMENTED OPERATING RESULTS DATA

Canadian Operations and U.S. Operations Segmented Operating Highlights

The following table shows the segmented operating results for the Company for the three-month periods ended December 31, 2023 and December 31, 2022.

	Three-Months Ended December 31, 2023 Three-Months Ended December 31, 2022
	Canada $ U.S. $ Total $ Canada $ U.S. $ Total $
New vehicles Used vehicles Parts, service and collision repair Finance,insurance and other	524,650 81,268 605,918 445,288 62,720 508,008 505,065 87,925 592,990 511,154 115,243 626,397 178,080 24,368 202,448 146,245 22,299 168,544 69,957 12,481 82,438 70,025 15,232 85,257
Total revenue	1,277,752 206,042 1,483,794 1,172,712 215,494 1,388,206
New vehicles Used vehicles Parts, service and collision repair Finance,insurance and other	45,007 7,721 52,728 40,781 7,437 48,218 22,176 (2,172) 20,004 19,665 (1,890) 17,775 93,375 14,679 108,054 82,008 13,653 95,661 64,576 12,480 77,056 65,863 15,105 80,968
Totalgrossprofit	225,134 32,708 257,842 208,317 34,305 242,622
Employee costs Administrative costs1, 2 Expected credit losses on trade and other receivables2 Facility lease and storage costs Depreciation of right-of-use assets Depreciation of property and equipment Amortization of intangible assets	144,486 21,258 165,744 104,029 19,260 123,289 57,711 9,408 67,119 48,905 10,384 59,289 1,225 36 1,261 242 76 318 1,419 — 1,419 137 — 137 7,943 743 8,686 7,658 668 8,326 5,787 672 6,459 5,168 496 5,664 128 — 128 374 — 374
Total operating expenses	218,699 32,117 250,816 166,513 30,884 197,397
Operating profit before other income	6,435 591 7,026 41,804 3,421 45,225
Operating data New retail vehicles sold Used retail vehicles sold	8,161 1,419 9,580 7,112 988 8,100 11,805 1,972 13,777 11,689 2,729 14,418
Total retail vehicles sold	19,966 3,391 23,357 18,801 3,717 22,518
# of dealerships at period end2 # of service bays atperiod end	69 18 87 68 18 86 1,152 230 1,382 1,144 223 1,367

1 Reclassification of comparative figure for presentation purposes. The Company previously included amortization of intangibles assets in administrative expenses. Prior year comparative has been revised by reclassifying $374 out of administrative costs and presented on a separate line.

2 The Q4 2022 quarter-to-date and year-to-date figures reflect an adjustment made to expected credit losses on trade and other receivables and administrative costs for the nine-month period ended September 30, 2022 as disclosed in Q3 2023 MD&A. Total operating expenses remain unchanged.

3 Dealerships is defined as 18 U.S. franchised automobile dealerships, 65 Canadian franchised automobile dealerships and Used Digital Division dealerships (including 3 used vehicle dealerships and 1 used vehicle auction) as at December 31, 2023.

AutoCanada • 2023 Fourth Quarter Report • Page 36

The following table shows the segmented operating results for the Company for the years ended December 31, 2023 and December 31, 2022.

	Year Ended December 31, 2023 Year Ended December 31, 2022
	Canada $ U.S. $ Total $ Canada $ U.S. $ Total $
New vehicles Used vehicles Parts, service and collision repair Finance,insurance and other	2,242,329 311,898 2,554,227 1,864,803 295,762 2,160,565 2,360,703 365,773 2,726,476 2,403,400 466,745 2,870,145 681,694 100,632 782,326 559,277 83,388 642,665 322,468 51,306 373,774 302,178 65,066 367,244
Total revenue	5,607,194 829,609 6,436,803 5,129,658 910,961 6,040,619
New vehicles Used vehicles Parts, service and collision repair Finance,insurance and other	196,521 26,319 222,840 176,843 42,469 219,312 117,625 11,588 129,213 120,042 1,257 121,299 361,712 55,314 417,026 305,514 47,998 353,512 301,804 50,904 352,708 284,224 64,526 348,750
Totalgrossprofit	977,662 144,125 1,121,787 886,623 156,250 1,042,873
Employee costs Government assistance Administrative costs1 Expected credit losses on trade and other receivables Facility lease and storage costs Depreciation of right-of-use assets Depreciation of property and equipment Amortization of intangible assets	495,939 87,614 583,553 435,371 85,144 520,515 — — — (264) — (264) 222,318 42,655 264,973 196,720 38,022 234,742 2,230 353 2,583 968 305 1,273 5,152 — 5,152 2,745 — 2,745 30,495 2,948 33,443 28,033 2,748 30,781 22,726 2,304 25,030 19,117 1,735 20,852 529 — 529 374 — 374
Total operating expenses	779,389 135,874 915,263 683,064 127,954 811,018
Operating profit before other income	198,273 8,251 206,524 203,559 28,296 231,855
Operating data New retail vehicles sold Used retail vehicles sold	34,843 5,320 40,163 31,188 5,028 36,216 54,714 8,453 63,167 52,160 11,451 63,611
Total retail vehicles sold	89,557 13,773 103,330 83,348 16,479 99,827
# of dealerships at period end2 # of service bays atperiod end	69 18 87 68 18 86 1,152 230 1,382 1,144 223 1,367

1 Reclassification of comparative figure for presentation purposes. The Company previously included amortization of intangibles assets in administrative expenses. Prior year comparative has been revised by reclassifying $374 out of administrative costs and presented on a separate line.

2 Dealerships is defined as 18 U.S. franchised automobile dealerships, 65 Canadian franchised automobile dealerships and Used Digital Division dealerships (including 3 used vehicle dealerships and 1 used vehicle auction) as at December 31, 2023.

AutoCanada • 2023 Fourth Quarter Report • Page 37

19. SAME STORE RESULTS DATA

Same store is defined as a Canadian franchised automobile dealership, stand-alone collision centre, stand-alone RightRide location, and Used Digital Division operating entity that has been owned for at least two full years since acquisition.

Number of Same Store by Province

The following table summarizes the number of same store as at December 31, 2023 by Province:

	British
	Columbia	**Alberta **	Saskatchewan	Manitoba	Ontario	Quebec	Atlantic	Total
Stellantis	3	8	1	1	1	—	2	16
Hyundai	1	3	—	—	3	—	—	7
General Motors	1	—	3	1	—	—	—	5
Volkswagen	3	3	—	1	—	—	—	7
Nissan/Infiniti	1	3	—	—	2	—	—	6
BMW/MINI	—	—	—	—	—	2	—	2
Audi	—	—	—	1	—	—	—	1
Subaru	—	1	—	—	—	—	—	1
Mercedes-Benz	—	1	—	—	—	1	—	2
Mazda	—	—	—	—	—	1	—	1
Ford	—	—	—	—	1	—	—	1
RightRide	1	2	1	1	2	—	—	7
Used Digital	—	—	—	—	2	—	—	2
Collision centres	1	—	—	—	—	2	—	3
Total	11	21	5	5	11	6	2	61

The following table summarizes same store revenue, gross profit and vehicles sold for the three-month periods and years ended December 31:

	Three-Months Ended December 31 Year Ended December 31 2023 2022 % Change 2023 2022 % Change
New vehicles Used vehicles Parts, service and collision repair Finance,insurance and other	418,780 377,487 10.9% 1,822,930 1,610,656 13.2% 417,741 439,319 (4.9)% 1,978,785 2,158,735 (8.3)% 129,626 117,629 10.2% 516,860 471,018 9.7% 59,085 62,557 (5.6)% 277,135 275,623 0.5%
Total revenue	1,025,232 996,992 2.8% 4,595,710 4,516,032 1.8%
New vehicles Used vehicles Parts, service and collision repair Finance,insurance and other	34,828 33,537 3.8% 156,718 155,429 0.8 % 16,260 14,962 8.7% 95,792 108,970 (12.1) % 68,342 66,466 2.8% 275,884 256,197 7.7 % 55,010 59,248 (7.2)% 260,936 261,871 (0.4)%
Totalgrossprofit	174,440 174,213 0.1% 789,330 782,467 0.9%
New retail vehicles sold (units) Used retail vehicles sold(units)	6,205 5,714 8.6% 26,834 25,636 4.7% 9,495 10,131 (6.3)% 44,850 46,705 (4.0)%
Total vehicles retailed(units)	15,700 15,845 (0.9)% 71,684 72,341 (0.9)%

The following table summarizes same store gross profit percentage for the three-month periods and years ended December 31:

	Three-Months Ended December 31	Year Ended December 31
	2023 2022	2023 2022
New vehicles Used vehicles Parts, service and collision repair Finance,insurance and other	8.3% 8.9% 3.9% 3.4% 52.7% 56.5% 93.1% 94.7%	8.6% 9.7% 4.8% 5.0% 53.4% 54.4% 94.2% 95.0%
Totalgrossprofitpercentage	17.0% 17.5%	17.2% 17.3%

AutoCanada • 2023 Fourth Quarter Report • Page 38

The following table summarizes same store revenue and gross profit by province for the three-month periods and years ended December 31:

	Three-Months Ended December 31 Year Ended December 31 2023 2022 % Change 2023 2022 % Change
British Columbia Alberta Saskatchewan Manitoba Ontario Quebec Atlantic	130,052 134,273 (3.1) % 599,520 626,458 (4.3)% 350,539 331,023 5.9 % 1,647,238 1,587,612 3.8% 97,056 99,754 (2.7) % 390,626 396,487 (1.5)% 80,005 75,589 5.8 % 352,283 339,890 3.6% 167,231 168,054 (0.5) % 748,739 760,368 (1.5)% 165,760 147,001 12.8 % 691,569 621,489 11.3% 34,589 41,298 (16.2)% 165,735 183,728 (9.8)%
Total revenue	1,025,232 996,992 2.8 % 4,595,710 4,516,032 1.8%
British Columbia Alberta Saskatchewan Manitoba Ontario Quebec Atlantic	17,811 23,875 (25.4)% 94,464 112,489 (16.0)% 72,334 62,506 15.7% 322,820 285,101 13.2% 15,073 16,531 (8.8)% 66,197 69,754 (5.1)% 12,860 13,039 (1.4)% 61,114 62,788 (2.7)% 25,843 28,696 (9.9)% 118,640 122,700 (3.3)% 25,381 23,878 6.3% 102,473 103,130 (0.6)% 5,138 5,688 (9.7)% 23,622 26,505 (10.9)%
Totalgrossprofit	174,440 174,213 0.1% 789,330 782,467 0.9%

20. COUNT OF OPERATIONS

The following table sets lists the current count and same store count for franchised dealerships, RightRide locations and Used Digital Division dealerships ("RightRide Locations"), and collision centres, organized by province and state.

						Same Store
		Same Store		Same Store		Stand-Alone
	Franchised	Franchised	RightRide	RightRide	Collision	Collision
Location	Dealerships	Dealerships 1	Locations	Locations1	Centres2	Centres1
Canada	66	49	16	9	27	3
Alberta	19	19	4	2	4	—
Atlantic	2	2	1	—	1	—
British Columbia	10	9	1	1	1	1
Manitoba	5	4	2	1	4	—
Ontario	22	7	7	4	9	—
Quebec	4	4	—	—	4	2
Saskatchewan	4	4	1	1	4	—
U.S.	18	—	—	—	—	—
Illinois3	18	N/A	—	—	—	—
Total	84	49	16	9	27	3

1 Same store means the franchised automobile dealership, used digital operating entity, stand-alone collision centre, and RightRide location has been owned for at least two full years since opening or acquisition. The operating location is then considered in the quarter, thereafter, as same store. For same store analysis purposes, we have only considered Canadian operating locations.

• 2 Collision centres includes 11 stand-alone collision centres within our group of 27 collision centres.

3 This franchise dealership count includes 2 individual storefronts that consists of multiple franchises. One including: Audi, Mercedes-Benz, Lincoln, Subaru, Volkswagen and Volvo and another including: Porsche, Audi, Mercedes-Benz and Volkswagen.

AutoCanada • 2023 Fourth Quarter Report • Page 39

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AutoCanada Inc. 200 - 15511 123 Avenue NW Edmonton, AB • T5V 0C3 www.autocan.ca

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