ANNUAL
FINANCIAL
RESULTS
2024
AUTOCAN.CA
Consolidated Financial Statements
For the year¼DecemberČ1ļċĉċč
PricewaterhouseCoopers LLP
Stantec Tower, 10220 103rd Avenue North West, Suite 2200, Edmonton, Alberta, Canada T5J 0K4
T.: +1 780 441 6700, F.: +1 780 441 6776, Fax to mail: ca_edmonton_main_fax@pwc.com
“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.
Independent auditor’s report
To the Shareholders of AutoCanada Inc.
Our opinion
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the financial position of AutoCanada Inc. and its subsidiaries (together, the Company) as at
December 31, 2024 and 2023, and its financial performance and its cash flows for the years then ended in
accordance with International Financial Reporting Standards as issued by the International Accounting
Standards Board (IFRS Accounting Standards).
What we have audited
The Company’s consolidated financial statements comprise:
the consolidated statements of comprehensive (loss) income for the years ended December 31, 2024
and 2023;
the consolidated statements of financial position as at December 31, 2024 and 2023;
the consolidated statements of changes in equity for the years then ended;
the consolidated statements of cash flows for the years then ended; and
the notes to the consolidated financial statements, comprising material accounting policy information
and other explanatory information.
Basis for opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of
the consolidated financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Company in accordance with the ethical requirements that are relevant to our
audit of the consolidated financial statements in Canada. We have fulfilled our other ethical responsibilities
in accordance with these requirements.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements for the year ended December 31, 2024. These matters were
addressed in the context of our audit of the consolidated financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
How our audit addressed the key audit matter
Impairment and recoveries of intangible assets
Refer to note 3 – Material accounting policy
information, note 5 – Critical accounting estimates,
note 18 – Discontinued operation and note 20 –
Intangible assets and goodwill to the consolidated
financial statements.
The Company had intangible assets of $630,467
thousand as at December 31, 2024, of which the
entirety relates to the Canadian Operations
segment. The Company reclassified $36,762 of
intangible assets held for sale as at December 31,
2024 associated with the U.S. Operations segment.
Management performs an impairment test at least
annually, or more frequently if events or changes in
circumstances indicate that they may be impaired.
For the purposes of assessing impairment, assets
are grouped as cash generating units (CGUs), the
lowest level for which there are separately
identifiable cash flows. An impairment is recorded
when the recoverable amounts of assets are less
than their carrying amounts. The recoverable
amount of each CGU is based on the higher of fair
value less costs to dispose (FVLCD) or value in use
(VIU). Impairment losses, other than those relating
to goodwill, are evaluated for potential reversals of
impairment when events or changes in
circumstances warrant such consideration. Under
the FVLCD approach, fair value is calculated based
on an applicable multiple applied to projected
earnings before interest, taxes, depreciation and
amortization (EBITDA). In arriving at the FVLCD,
management considers projected operating
margins, growth rates and EBITDA multiples as
Our approach to addressing the matter included the
following procedures, among others:
Tested how management determined the
recoverable amount for certain CGUs for which
events or changes in circumstances have been
identified, which included the following:
‒
Tested the appropriateness of the
approaches used and the mathematical
accuracy of FVLCD and VIU calculations.
‒
Tested the reasonableness of the projected
operating margins, growth rates and
discount rates applied by management in
the applicable calculations by comparing
them to the budget, management's
strategic plans approved by the Board,
available third party published economic
data and the results historically achieved by
the respective CGUs.
‒
Professionals with specialized skill and
knowledge in the field of valuation assisted
in testing the reasonableness of the
discount rates applied by management
based on available data of comparable
companies and in testing the
reasonableness of the EBITDA multiples by
comparing to market data, as well as
assessing the valuation methodologies
used.
‒
Tested the accuracy and completeness of
underlying data used in the FVLCD and
VIU calculations.
Key audit matter
How our audit addressed the key audit matter
significant assumptions. Under the VIU approach,
the discounted cash flow (DCF) method is used,
which involves projecting cash flows and converting
them into a present value equivalent through
discounting. Significant assumptions used in the
VIU approach include projected EBITDA, growth
rates and discount rates. Based on the impairment
assessment, the net recoveries of impairment for
the year ended December 31, 2024 were $7,612
thousand allocated to indefinite life intangibles
within the Canadian Operations segment.
Management recorded impairment of $15,833
thousand on indefinite life intangibles within the
discontinued U.S. Operations segment.
We considered this a key audit matter due to (i) the
significance of the intangible asset balances and (ii)
the significant judgment made by management in
determining the recoverable amounts of the CGUs,
including the use of significant assumptions. This
has resulted in a high degree of subjectivity and
audit effort in performing audit procedures to test
the significant assumptions. Professionals with
specialized skill and knowledge in the field of
valuation assisted us in performing our procedures.
Tested the disclosures made in the
consolidated financial statements, including the
sensitivity of the significant assumptions used.
Other information
Management is responsible for the other information. The other information comprises the Management’s
Discussion and Analysis.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the
consolidated financial statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with IFRS Accounting Standards, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to liquidate
the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting
process.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Company to
cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial
information of the entities or business units within the Company as a basis for forming an opinion on
the consolidated financial statements. We are responsible for the direction, supervision and review of
the audit work performed for purposes of the group audit. We remain solely responsible for our audit
opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the consolidated financial statements of the current period and
are therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Richard Probert.
/s/PricewaterhouseCoopers LLP
Chartered Professional Accountants
Edmonton, Alberta
March 19, 2025
AutoCanada Inc.
Consolidated Statements of Comprehensive (Loss) Income
For the Years Ended
(in thousands of Canadian dollars except for share and per share amounts)
December 31,
2024
$
December 31,
2023
Revised (1)
$
Continuing operations
Revenue (Note 6)
5,351,672
5,607,194
Cost of sales (Note 7)
(4,469,395)
(4,629,532)
Gross profit
882,277
977,662
Operating expenses (Note 8)
(735,312)
(777,159)
Operating profit before other income
146,965
200,503
Lease and other income (Note 10)
7,850
12,775
Gain on disposal of assets, net (Note 10)
29,781
442
Net impairment losses on trade and other receivables
(8,737)
(2,230)
(Impairment) recoveries of non-financial assets (Note 20, 24)
(4,542)
3,538
Operating profit
171,317
215,028
Finance costs (Note 11)
(129,678)
(123,020)
Finance income (Note 11)
2,674
3,346
(Loss) gain on redemption liabilities (Note 14)
(486)
3,639
Other gains (losses), net
846
(321)
Income for the year before tax from continuing operations
44,673
98,672
Income tax expense (Note 12)
8,035
30,699
Net income for the year from continuing operations
36,638
67,973
Net loss for the year from discontinued operation (Note 18)
(103,386)
(14,192)
Net (loss) income for the year
(66,748)
53,781
Other comprehensive income (loss)
Items that may be reclassified to profit or loss
Foreign operations currency translation (Note 18)
8,032
6,489
Change in fair value of cash flow hedge (Note 25)
(206)
1,800
Income tax relating to these items
51
(458)
Other comprehensive income for the year, net of tax
7,877
7,831
Comprehensive (loss) income for the year
(58,871)
61,612
Net (loss) income for the year attributable to:
AutoCanada shareholders
(68,233)
50,490
Non-controlling interests
1,485
3,291
(66,748)
53,781
Net (loss) income for the year attributable to AutoCanada shareholders
arises from:
Continuing operations
35,153
64,682
Discontinued operation
(103,386)
(14,192)
(68,233)
50,490
Comprehensive (loss) income for the year attributable to:
AutoCanada shareholders
(60,356)
58,321
Non-controlling interests
1,485
3,291
(58,871)
61,612
Comprehensive (loss) income for the year attributable to AutoCanada
shareholders arises from:
Continuing operations
34,998
66,024
Discontinued operation
(95,354)
(7,703)
(60,356)
58,321
Page 1 • AutoCanada
AutoCanada Inc.
Consolidated Statements of Comprehensive (Loss) Income (continued)
For the Years Ended
(in thousands of Canadian dollars except for share and per share amounts)
December 31,
2024
$
December 31,
2023
Revised (1)
$
Net (loss) income per share attributable to AutoCanada shareholders:
Basic from continuing operations
1.51
2.75
Basic from discontinued operation
(4.44)
(0.61)
Basic
(2.93)
2.14
Diluted from continuing operations
1.46
2.65
Diluted from discontinued operation
(4.29)
(0.59)
Diluted
(2.83)
2.06
Weighted average shares
Basic (Note 30)
23,316,008
23,561,236
Diluted (Note 30)
24,137,069
24,450,681
1 Comparative period revised to reflect current period presentation. See Note 18 - "Discontinued Operation" for
additional information.
The accompanying notes are an integral part of these consolidated financial statements.
Approved on behalf of the Company
(signed) Paul W. Antony
(signed) Barry L. James
Paul W. Antony, Director
Barry L. James, Director
Page 2 • AutoCanada
AutoCanada Inc.
Consolidated Statements of Financial Position
(in thousands of Canadian dollars)
ASSETS
Current assets
Cash
67,343
103,146
Trade and other receivables (Note 15)
173,568
222,076
Inventories (Note 16)
947,278
1,154,311
Current tax recoverable
10,205
22,187
Other current assets (Note 21)
11,993
15,718
Derivative financial instruments (Note 25)1
376
—
1,210,763
1,517,438
Assets held for sale (Note 17, 18)
332,693
22,152
Total current assets
1,543,456
1,539,590
Property and equipment (Note 19)
312,014
378,269
Right-of-use assets (Note 24)
389,958
405,105
Other long-term assets (Note 21)
16,501
16,708
Deferred income tax (Note 12)
18,840
35,444
Derivative financial instruments (Note 25)
—
3,920
Intangible assets (Note 20)
630,467
682,137
Goodwill (Note 20)
94,592
98,266
Total assets
3,005,828
3,159,439
LIABILITIES
Current liabilities
Trade and other payables (Note 22)
177,473
238,427
Revolving floorplan facilities (Note 23)
1,010,579
1,174,595
Current tax payable
3,766
—
Vehicle repurchase obligations (Note 26)
3,705
1,982
Indebtedness (Note 23)
24,108
744
Lease liabilities (Note 24)
35,780
28,411
Redemption liabilities (Note 14)
23,066
22,580
Other liabilities (Note 27)
11,063
12,325
Derivative financial instruments (Note 25)
1,741
—
1,291,281
1,479,064
Liabilities directly associated with assets held for sale (Note 18)
201,966
—
Total current liabilities
1,493,247
1,479,064
Long-term indebtedness (Note 23)
517,543
562,178
Long-term lease liabilities (Note 24)
421,392
469,013
Long-term redemption liabilities (Note 14)
25,000
25,000
Derivative financial instruments (Note 25)
8,705
2,219
Other long-term liabilities (Note 27)
—
1,368
Deferred income tax (Note 12)
44,613
55,768
Total liabilities
2,510,500
2,594,610
EQUITY
Attributable to AutoCanada shareholders
468,027
534,847
Attributable to non-controlling interests
27,301
29,982
Total equity
495,328
564,829
3,005,828
3,159,439
December 31,
2024
$
December 31,
2023
$
1 Comparative current derivative financial instrument asset of $2,318 has not been reclassified to conform with current year
presentation as it was included in other current assets as at December 31, 2023 (Note 25).
Commitments and contingencies (Note 28)
The accompanying notes are an integral part of these consolidated financial statements.
Page 3 • AutoCanada
AutoCanada Inc.
Consolidated Statements of Changes in Equity
For the Year Ended
(in thousands of Canadian dollars)
Attributable to AutoCanada shareholders
Share
capital
$
Treasury
shares
$
Contributed
surplus
$
Share
repurchase
(deficit)
(Note 30)
$
Cumulative
translation
adjustment
$
OCI hedge
reserve
$
Retained
earnings
$
Total
capital
$
Non-
controlling
interests
$
Total
equity
$
Balance, January 1, 2024
434,632
(319)
4,117
(51,525)
7,889
155
139,898
534,847
29,982
564,829
Net (loss) income
—
—
—
—
—
—
(68,233)
(68,233)
1,485
(66,748)
Other comprehensive income
—
—
—
—
8,032
(155)
—
7,877
—
7,877
Dividends paid by subsidiaries to
non-controlling interests
—
—
—
—
—
—
—
—
(4,294)
(4,294)
Non-controlling interests issued
—
—
—
—
—
—
—
—
3,865
3,865
Repurchase of common shares
under the Normal Course Issuer
Bid (Note 30)
(8,486)
—
—
(1,456)
—
—
—
(9,942)
—
(9,942)
Acquisition of non-controlling
interests
—
—
(1,749)
—
—
—
—
(1,749)
(3,737)
(5,486)
Settlement of share-based awards
(Note 29, 30)
—
—
(1,715)
—
—
—
—
(1,715)
—
(1,715)
Treasury shares acquired
(Note 30)
—
(1,625)
—
—
—
—
—
(1,625)
—
(1,625)
Deferred tax on share-based
payments
—
—
534
—
—
—
—
534
—
534
Shares settled from treasury
(Note 30)
—
1,629
(1,629)
—
—
—
—
—
—
—
Share-based compensation
(Note 29)
—
—
8,033
—
—
—
—
8,033
—
8,033
Balance, December 31, 2024
426,146
(315)
7,591
(52,981)
15,921
—
71,665
468,027
27,301
495,328
The accompanying notes are an integral part of these consolidated financial statements.
Page 4 • AutoCanada
AutoCanada Inc.
Consolidated Statements of Changes in Equity
For the Year Ended
(in thousands of Canadian dollars)
Attributable to AutoCanada shareholders
Share
capital
$
Treasury
shares
$
Contributed
surplus
(deficit)
$
Share
repurchase
(deficit)
$
Cumulative
translation
adjustment
$
OCI hedge
reserve
$
Retained
earnings
$
Total
capital
$
Non-
controlling
interests
$
Total
equity
$
Balance at December 31, 2022
as originally presented
433,693
(672)
(64,743)
—
1,400
(1,187)
89,408
457,899
28,898
486,797
Reclassification of share
repurchase (deficit)
—
—
51,525
(51,525)
—
—
—
—
—
—
Balance, January 1, 2023
433,693
(672)
(13,218)
(51,525)
1,400
(1,187)
89,408
457,899
28,898
486,797
Net income
—
—
—
—
—
—
50,490
50,490
3,291
53,781
Other comprehensive income
—
—
—
—
6,489
1,342
—
7,831
—
7,831
Dividends paid by subsidiaries to
non-controlling interests
—
—
—
—
—
—
—
—
(3,595)
(3,595)
Non-controlling interests arising
on acquisition
—
—
—
—
—
—
—
—
1,388
1,388
Forward share purchase (Note 27)
—
—
(1,972)
—
—
—
—
(1,972)
—
(1,972)
Purchase of Used Digital Division
Minority Interest (Note 14)
—
—
13,831
—
—
—
—
13,831
—
13,831
Repayment of Executive Advance
—
—
1,624
—
1,624
—
1,624
Settlement of share-based awards
(Note 29, 30)
939
—
(1,473)
—
—
—
—
(534)
—
(534)
Treasury shares acquired
(Note 30)
—
(47)
—
—
—
—
—
(47)
—
(47)
Deferred tax on share-based
payments
—
—
(760)
—
—
—
—
(760)
—
(760)
Shares settled from treasury
(Note 30)
—
400
(400)
—
—
—
—
—
—
—
Share-based compensation
(Note 29)
—
—
6,485
—
—
—
—
6,485
—
6,485
Balance, December 31, 2023
434,632
(319)
4,117
(51,525)
7,889
155
139,898
534,847
29,982
564,829
The accompanying notes are an integral part of these consolidated financial statements.
Page 5 • AutoCanada
AutoCanada Inc.
Consolidated Statements of Cash Flows
For the Years Ended
(in thousands of Canadian dollars)
December 31,
2024
$
December 31,
2023
$
Cash provided by (used in):
Operating activities
Net (loss) income for the year
(66,748)
53,781
Adjustments for:
Income tax expense (Note 12)
21,733
30,584
Finance costs (Note 11, 18)
155,598
145,939
Depreciation of right-of-use assets (Note 24)
35,919
33,443
Depreciation of property and equipment (Note 19)
25,843
25,030
Amortization of intangible assets (Note 20)
503
529
Gain on disposal of assets, net (Note 10)
(29,781)
(422)
Share-based compensation (Note 29)
8,033
6,485
Share-based compensation - Used Digital Division (Note 14, 29)
—
36,725
Unrealized fair value changes on foreign exchange forward contracts (Note 25)
3,853
(2,267)
Revaluation of redemption liabilities (Note 14)
486
(3,639)
Net impairment (recoveries) of non-financial assets (Note 20, 24)
21,058
(3,538)
Net change in non-cash working capital (Note 36)
1,325
(3,552)
177,822
319,098
Income taxes paid
(537)
(58,371)
Interest paid
(144,412)
(140,292)
Tax withholdings paid on settlement of share-based awards
(1,247)
(901)
31,626
119,534
Investing activities
Business acquisitions, net of cash acquired (Note 13)
(20,197)
(47,027)
Purchases of property and equipment (Note 19)
(33,282)
(77,416)
Additions to intangible assets (Note 20)
(790)
(2,102)
Settlement of prior year business acquisitions
(491)
817
Proceeds on sale of property and equipment
63,123
299
Proceeds on divestiture of dealerships (Note 34)
59,497
—
67,860
(125,429)
Financing activities
Proceeds from indebtedness (Note 23)
635,046
674,560
Repayment of indebtedness (Note 23)
(657,730)
(669,334)
Repayment of executive advance
—
1,624
Repurchase of common shares under Normal Course Issuer Bid (Note 30)
(9,942)
—
Payments for purchase of Used Digital Division minority interest (Note 35)
(22,500)
—
Shares settled from treasury (Note 30)
4
353
Proceeds from exercise of stock options, net
—
279
Acquisition of non-controlling interests
(5,486)
—
Proceeds from sale of equity interest in 15154871 Canada Inc.
—
25,000
Settlement of redemption liabilities
—
(1,444)
Repayment of loan by non-controlling interests
2,961
3,083
Dividends paid to non-controlling interests
(4,294)
(3,595)
Principal portion of lease payments
(31,984)
(28,828)
(93,925)
1,698
Effect of exchange rate changes on cash
(1,359)
(958)
Net increase (decrease) in cash
4,202
(5,155)
Cash at beginning of year
103,146
108,301
Cash at end of year
107,348
103,146
Included in cash per balance sheet
67,343
103,146
Included in the assets of the discontinued operation (Note 18)
40,005
—
Cash flows of discontinued operation (Note 18)
The accompanying notes are an integral part of these consolidated financial statements.
Page 6 • AutoCanada
AutoCanada Inc.
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2024 and 2023
(in thousands of Canadian dollars except for share and per share amounts)
1 General information
AutoCanada Inc. (“AutoCanada” or the “Company”) is incorporated in Alberta, Canada with common shares
listed on the Toronto Stock Exchange (“TSX”) under the symbol of “ACQ”. The business of AutoCanada, held in
its subsidiaries, is the operation of franchised automobile dealerships and related businesses in the Provinces of
British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nova Scotia and New Brunswick, and in
the State of Illinois in the United States. The Company offers a diversified range of automotive products and
services, including new vehicles, used vehicles, vehicle leasing, vehicle parts, vehicle maintenance and
collision repair services, extended service contracts, vehicle protection products, after-market products, and
auction services. The Company also arranges financing and insurance for vehicle purchases by its customers
through third-party finance and insurance sources. The address of its registered office is 200, 15511 123 Avenue
NW, Edmonton, Alberta, Canada, T5V 0C3.
2 Basis of presentation
These annual consolidated financial statements ("Annual Financial Statements") have been prepared in
accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (“IFRS
Accounting Standards”).
The preparation of Annual Financial Statements in accordance with IFRS Accounting Standards requires the use
of certain critical accounting estimates. The areas where assumptions and estimates are significant to the
Annual Financial Statements are described in Note 5.
The Company’s retail automobile dealerships and related businesses in its Canadian Operations and its collision
repair services in its U.S. Operations are presented herein as continuing operations. The Company’s retail
automobile dealerships in its U.S. Operations have been classified and presented as a discontinued operation
(Note 18).
These Annual Financial Statements were approved by the Board of Directors on March 19, 2025.
3 Material accounting policy information
The significant accounting policies used in the preparation of these Annual Financial Statements are as follows:
Basis of measurement
The Annual Financial Statements have been prepared under the historical cost convention, except for the
revaluation of certain financial assets and financial liabilities to fair value, including derivative instruments and
redemption liabilities.
Principles of consolidation
The Annual Financial Statements comprise the financial statements of AutoCanada and its subsidiaries.
Subsidiaries are all entities over which the Company has control. The Company uses judgment in determining
the entities that it controls and therefore consolidates. Judgment is also applied in determining whether the
Company controls the entities in which it does not have full ownership rights. Most often, judgment involves
reviewing contractual rights to determine if rights are participating (giving power over one entity) or protective
rights (protecting the Company’s interest without giving it power). Subsidiaries are fully consolidated from the
date control is transferred to the Company, and are no longer consolidated on the date control ceases.
Non-controlling interests represent equity interests in subsidiaries owned by outside parties.
Page 7 • AutoCanada
Business combinations
Business combinations are accounted for using the acquisition method of accounting when the acquired set of
activities and assets meet the definition of a business and control is transferred to the Company. This involves
recognizing identifiable assets (including intangible assets not previously recognized by the acquiree) and
liabilities (including contingent liabilities) of acquired businesses at fair value at the acquisition date. The
excess of acquisition cost over the fair value of the identifiable net assets acquired is recorded as goodwill. If
the acquisition cost is less than the fair value of the net assets acquired, the fair value of the net assets is re-
assessed and any remaining difference is recognized directly in the Consolidated Statements of
Comprehensive (Loss) Income. Transaction costs are expensed as incurred.
Contingent consideration is classified as either equity or a financial liability. Any subsequent change to the fair
value of contingent consideration is recognized in the Consolidated Statements of Comprehensive (Loss)
Income.
Non-controlling interests
Non-controlling interests are measured initially at their proportionate share of the acquiree’s or entity's
identifiable net assets at the date of acquisition or date the interest was granted. Certain arrangements contain
a vesting component where the non-controlling interest vests over a specified period.
Non-controlling interests issued in subsidiaries of the Company are recognized at their proportionate share at
the date of issuance.
Revenue recognition
(a) New and Used Vehicles
The Company sells new and used vehicles at its franchised dealerships, used dealerships, and related
businesses. The transaction price for a vehicle sale is determined with the customer at the time of sale.
Customers often trade in their own vehicle and apply the value against the purchase price of a new or used
vehicle. The trade-in vehicle is considered non-cash consideration and is measured at fair value, based on
external and internal market data, and applied toward the contract price for the purchased vehicle.
When a vehicle is sold, control is transferred at a point in time upon delivery of the vehicle to the customer,
which is generally at time of sale. The Company does not directly finance customers’ vehicle purchases or
leases, however, in many cases, third-party financing is arranged for the sale or lease of vehicles to its
customers in exchange for a fee paid to the Company by the third-party financial institution. The Company
receives payment directly from the customer at the time of sale or from the third-party financial institution
(referred to as contracts-in-transit or vehicle receivables, which are part of the Company's receivables from
contracts with customers) within a short period of time following the sale.
(b) Parts and service, and Collision Repair
The Company sells parts and services related to customer-paid repairs and maintenance, repairs and
maintenance under manufacturer warranties and extended service contracts, and collision-related repairs.
Each automotive repair and maintenance service is a single performance obligation that includes both the
parts and labour associated with the service. Payment for automotive service work is typically due upon
completion of the service, which is generally completed within a short period of time from contract
inception. The transaction price for automotive repair and maintenance services is based on the parts used,
the number of labour hours applied, and standardized hourly labour rates. The Company satisfies its
performance obligations, transfers control, and recognizes revenue over time for repair and maintenance
services because it is creating an asset with no alternative use and has an enforceable right to payment for
performance completed to date.
The transaction price for retail counter parts sales is determined at the time of sale based on the quantity
and price of each product purchased. Payment is typically due at the time of sale, or within a short period of
time following the sale. Control is generally considered to transfer at the point of sale or when the products
are shipped, which typically occurs the same day as or within a few days of the sale.
(c) Finance insurance commissions and fees
The Company arranges financing for customers through various financial institutions and receives a
commission from the lender based on the difference between the interest rate charged to the customer and
the interest rate set by the financing institution, or a flat fee.
Page 8 • AutoCanada
The Company also receives commissions for facilitating the sale of third-party insurance products to
customers, including credit and life insurance policies and extended service contracts. These commissions
are recorded as revenue at the time the customer enters into the contract and the Company is entitled to
the commission. The Company is not the obligor under any of these contracts. In the case of finance
contracts, a customer may fail to pay their contract, thereby terminating the contract. Customers may also
terminate extended service contracts, which are fully paid at purchase, and become eligible for refunds of
unused premiums. In these circumstances, a portion of the commissions the Company receives may be
charged back to the Company based on the terms of the contracts. These chargebacks are a form of
variable consideration, and the Company only recognizes commission revenue at the estimated amount of
consideration to which it ultimately expects to be entitled. This estimate is based on historical chargeback
experience arising from similar contracts, including the impact of refinance and default rates on retail
finance contracts and cancellation rates on extended service contracts and other insurance products.
For the majority of finance and insurance product sales, the Company’s performance obligation is to arrange
for the provision of goods or services by another party. This performance obligation is satisfied when the
finance and insurance product is delivered to the end-customer, generally at the time of the vehicle sale. As
an agent, revenue is recognized as the net amount retained after paying the third-party provider for the
goods or services that party is responsible for fulfilling.
Taxation
(a) Deferred tax
Deferred tax is recognized on temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the Consolidated Statements of Financial Position. Deferred tax is calculated
using tax rates and laws that have been enacted or substantively enacted at the end of the reporting period,
and which are expected to apply when the related deferred income tax asset is realized or the deferred
income tax liability is settled.
Deferred tax liabilities:
●Are generally recognized for all taxable temporary differences; and
●Are not recognized on temporary differences that arise from goodwill which is not deductible for tax
purposes.
Deferred tax assets:
●Are recognized to the extent it is probable that taxable profits will be available against which the
deductible temporary differences can be utilized; and
●Are reviewed at the end of the reporting period and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax assets and liabilities are not recognized in respect of temporary differences that arise on initial
recognition of assets and liabilities, outside of a business combination, that affect neither accounting nor
taxable profit and do not give rise to equal taxable and deductible temporary differences.
Deferred tax assets and liabilities are not recognized in respect of temporary differences between the
carrying amount and tax bases of investments in subsidiaries where the company is able to control the
timing of the reversal of the temporary differences and it is probable that the differences will not reverse in
the foreseeable future.
(b) Current tax
Management periodically evaluates positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. Provisions are established where appropriate on the
basis of amounts expected to be paid to the tax authorities.
Manufacturer incentives and other rebates
Various incentives from manufacturers are received based on achieving certain objectives, such as specified
sales volume targets. These incentives are typically based on units sold to retail or fleet customers. These
manufacturer incentives are recognized as a reduction of new vehicle cost of sales when earned, generally at
the latter of the time the related vehicles are sold or upon attainment of the particular program goals.
Manufacturer rebates to the Company's dealerships and assistance for floorplan interest are reflected as a
reduction in the carrying value of each vehicle purchased by the Company. These incentives are recognized as
a reduction to the cost of sales as the related vehicles are sold.
Page 9 • AutoCanada
Manufacturer advertising rebates that are reimbursements of costs associated with specific advertising
expenses are earned in accordance with the respective manufacturers’ reimbursement-based advertising
assistance programs, which is typically after the corresponding advertising expenses have been incurred, and
are reflected as a reduction in advertising expense included in administrative costs as an operating expense in
the Consolidated Statements of Comprehensive (Loss) Income.
Financial instruments
The Company’s financial assets, including cash, trade and other receivables, and other assets are measured at
amortized cost.
The Company’s financial liabilities include trade and other payables, revolving floorplan facilities, vehicle
repurchase obligations, current and long-term indebtedness, derivative financial instruments, redemption
liabilities and lease liabilities. Financial liabilities are measured at amortized cost except for redemption
liabilities, non-hedge interest swaps, contingent consideration and embedded derivative, which are carried at
fair value through profit or loss. A financial liability is derecognized when the obligation under the liability is
discharged or cancelled or expires. When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability are substantially modified, the
Company considered both quantitative and qualitative factors in determining whether such an exchange or
modification is treated as the derecognition of the original liability and the recognition of a new liability. The
difference in the respective carrying amounts is recognized in the Consolidated Statements of Comprehensive
(Loss) Income.
Cash
Cash includes cash on hand, highly liquid investment grade short-term investments with maturities of three
months or less and other liquid deposits held with financial institutions.
Trade and other receivables
Trade and other receivables are amounts due from customers, financial institutions and suppliers that arise
from providing services or sale of goods in the ordinary course of business. Trade and other receivables are
recognized initially at fair value and subsequently measured at amortized cost using the effective interest
method. The Company applies the simplified approach to measuring expected credit losses, which uses a
lifetime expected credit loss allowance for all trade receivables. The carrying amount of the asset is reduced
through the use of an allowance account, and the amount of the loss is recognized as an expense in net
impairment losses on trade and other receivables in the Consolidated Statements of Comprehensive (Loss)
Income.
When a trade and other receivable is uncollectible, it is written off against the allowance account for trade and
other receivables. Subsequent recoveries of amounts previously written off are credited against net impairment
losses on trade and other receivables in the Consolidated Statements of Comprehensive (Loss) Income.
Inventories
New, used and demonstrator vehicle inventories are recorded at the lower of cost and net realizable value, with
cost determined on a specific item basis. Parts and accessories inventories are carried at the lower of cost and
net realizable value. Inventories of parts and accessories are accounted for using the “weighted-average cost”
method.
In determining net realizable value for new vehicles, the Company primarily considers the age of the vehicles
along with the timing of annual and model changeovers. For used vehicles, the Company considers seasonality,
recent market data and trends such as loss histories along with the current age of the inventory. Parts
inventories are primarily assessed considering excess quantity and continued usefulness of the part. The risk of
loss in value related to parts inventories is minimized since excess or obsolete parts can generally be returned
to the manufacturer.
Non-current assets (or disposal groups) held for sale and discontinued operation
Non-current assets (or disposal groups) are classified as assets held for sale when their carrying amount is to be
recovered principally through a sale transaction, rather than continuing use, and a sale is highly probable.
Assets (or disposal groups) designated as held for sale are held at the lower of carrying amount at designation
and fair value less costs to sell.
An impairment loss is recognized for any initial or subsequent write-down of the asset (or disposal group) to fair
value less costs to sell. A gain is recognized for any subsequent increases in fair value less costs to sell of an
asset (or disposal group), but not in excess of any cumulative impairment loss previously recognized. A gain or
loss not previously recognized by the date of the sale of the non-current asset (or disposal group) is recognized
at the date of derecognition.
Page 10 • AutoCanada
Depreciation is not charged against property and equipment classified as held for sale (including those that are
part of a disposal group).
Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are
presented separately from the other assets in the Consolidated Statements of Financial Position. The liabilities
of a disposal group classified as held for sale are presented separately from other liabilities in the Consolidated
Statements of Financial Position.
A discontinued operation is a component of the Company that has been disposed of or is classified as held for
sale and that represents a separate major line of business or geographical area of operations, is part of a single
coordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired
exclusively with a view to resale. The results of a discontinued operation are presented separately in the
Consolidated Statements of Comprehensive (Loss) Income.
Property and equipment
Property and equipment are stated at cost less accumulated depreciation and any accumulated impairment
losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. Residual values,
useful lives and methods of depreciation are reviewed, and adjusted if appropriate, at each financial year end.
Land is not depreciated. Other than as noted below, depreciation of property and equipment is provided for
over the estimated useful life of the assets on a declining balance basis at the following annual rates:
Machinery and equipment
20 %
Furniture, fixtures and other
20 %
Company and lease vehicles
30 %
Computer equipment
30 %
Buildings are depreciated on a straight-line basis over the estimated useful lives of the buildings ranging from
10 to 40 years. Useful lives are determined based on independent appraisals.
The useful life of leasehold improvements is determined to be the lesser of the lease term or the estimated
useful life of the improvement. Leasehold improvements are depreciated using the straight-line method over
the useful life of the asset.
Depreciation of leased vehicles is based on a straight-line depreciation of the difference between the cost and
the estimated residual value at the end of the lease over the term of the lease. Leased vehicle residual values
are regularly reviewed to determine whether depreciation rates are reasonable.
Intangible assets
(a) Intangible assets
Intangible assets acquired in a business combination consist of rights under franchise agreements ("Dealer
Agreements") and certifications with automobile manufacturers. The Company has determined that Dealer
Agreements and certifications will continue to contribute to cash flows indefinitely and, therefore, have
indefinite lives due to the following reasons:
●Specific Dealer Agreements continue indefinitely by their terms; and
●Specific Dealer Agreements and certifications have limited terms, but are routinely renewed without
substantial cost to the Company.
Intangible assets are carried at cost less accumulated impairment losses. When acquired in a business
combination, the cost is determined in connection with the purchase price allocation based on their
respective fair values at the acquisition date. The fair value is determined based on the multi-period excess
earnings method, using the discounted cash flow model. When market value is not readily determinable,
cost is determined using generally accepted valuation methods based on revenues, costs, or other
appropriate criteria.
Intangible assets acquired separately are measured on initial recognition at cost. Intangible assets with finite
lives are amortized over the useful economic life and assessed for impairment whenever there is an
indication that the intangible asset may be impaired. The amortization expense on intangible assets with
finite lives is recognized in the statement of profit or loss in the expense category that is consistent with the
function of the intangible assets.
Page 11 • AutoCanada
(b) Research and development costs
Research costs are expensed as incurred. Development expenditures on an individual project are
recognized as an intangible asset when the Company can demonstrate:
●The technical feasibility of completing the intangible asset so that the asset will be available for use
or sale;
●Its intention to complete and its ability and intention to use or sell the asset;
●How the asset will generate future economic benefits;
●The availability of resources to complete the asset; and
●The ability to measure reliably the expenditure during development.
Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any
accumulated amortization and accumulated impairment losses. Amortization of the asset begins when
development is complete, and the asset is available for use. It is amortized over the period of expected
future benefit. Amortization is recorded in operating expenses. During the period of development, the asset
is tested for impairment annually.
(c) Software as a Service (SaaS)
Service fees associated with SaaS arrangements are recognized as an expense in the period that they are
incurred, unless it can be determined that the terms of the service arrangement provide the Company with
an identifiable asset. Costs that are incurred that are directly relatable to configuration or customization of
such SaaS arrangements are also assessed for whether they meet the definition of an asset, those that do
not meet the criteria are expensed as incurred or expensed over the term of the contract if they are not able
to be separately identified from the SaaS arrangement.
Impairment
Impairments are recorded when the recoverable amounts of assets are less than their carrying amounts. The
recoverable amount is the higher of an asset’s fair value less costs to dispose or its value in use. Impairment
losses, other than those relating to goodwill, are evaluated for potential reversals of impairment when events or
changes in circumstances warrant such consideration.
(a) Non-financial assets
The carrying values of non-financial assets with finite lives, such as property and equipment and right-of-use
assets, are assessed for impairment whenever events or changes in circumstances indicate that their
carrying amounts may not be recoverable. For the purposes of assessing impairment, assets are grouped as
cash generating units (CGUs), the lowest levels for which there are separately identifiable cash flows.
(b) Intangible assets and goodwill
The carrying values of all intangible assets with indefinite lives and goodwill are reviewed for impairment
whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.
Additionally, the carrying values of identifiable intangible assets with indefinite lives and goodwill are tested
annually for impairment. Specifically:
●Our Dealer Agreements and certifications with indefinite lives are subject to an annual impairment
assessment. For purposes of impairment testing, the fair value of the Company's Dealer Agreements
is determined using a combination of a discounted cash flow approach and earnings multiple
approach.
●For the purpose of impairment testing, goodwill is allocated to CGUs based on the level at which
management monitors it, which is not higher than an operating segment before aggregation.
Goodwill is allocated to those CGUs that are expected to benefit from the business combination in
which the goodwill arose.
Trade and other payables
Trade and other payables are obligations to pay for goods or services that have been acquired in the ordinary
course of business. Trade and other payables are recognized initially at fair value, subsequently measured at
amortized cost, and classified as current liabilities if payment is due within one year.
Page 12 • AutoCanada
Leases
(a) The Company as a lessee
The Company leases various properties with agreements ranging from 1 to 23 years but may have extension
options as described below. Lease terms are negotiated on an individual basis and contain a wide range of
different terms and conditions.
The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a
straight-line basis.
Lease liabilities include the net present value of fixed payments (including in-substance fixed payments) less
any lease incentives receivable, variable lease payments that are based on an index or a rate, amounts
expected to be payable by the lessee under residual value guarantees, the exercise price of a purchase
option if the lessee is reasonably certain to exercise that option, and payments of penalties for terminating
the lease if the lease term reflects the lessee exercising that option. The lease payments are discounted
using the interest rate implicit in the lease, if that rate can be determined, or the Company’s incremental
borrowing rate.
Right-of-use assets are measured at cost comprising the amount of the initial measurement of lease liability
and any lease payments made at or before the commencement date less any lease incentives received, any
initial direct costs, and restoration costs.
Payments associated with short-term leases and leases of low-value assets are recognized on a straight-line
basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-
value assets comprise IT equipment and office furniture.
(b) The Company as a lessor
Lease obligations are classified as either operating or finance, based on the substance of the transaction at
inception of the lease. Classification is reassessed if the terms of the lease are changed.
(i) Finance leases
Leases in which substantially all the risks and rewards of ownership are transferred are classified as
finance leases.
When assets are leased out under a finance lease, the present value of the lease payments is recognized
as a receivable. The difference between the gross receivable and the present value of the receivable is
recognized as unearned finance income.
(ii) Operating leases
Leases in which a significant portion of the risks and rewards of ownership is retained by the lessor are
classified as operating leases.
When assets are leased out under an operating lease, the asset is included in the Consolidated
Statements of Financial Position based on the nature of the asset. Lease income on operating leases is
recognized over the term of the lease on a straight-line basis.
Redemption liabilities
The potential cash payments related to put options issued by the Company over the equity of subsidiary
companies are accounted for as financial liabilities when such options are to be settled in cash or a variable
number of shares. The amount that may become payable under the option on exercise is initially recognized at
fair value within redemption liabilities with a corresponding charge directly to equity attributable to
AutoCanada shareholders or share-based compensation. Subsequently, if the Company revises its estimates,
the carrying amount of the redemption liability is adjusted and the adjustment will be recognized as income or
expenses in the Consolidated Statements of Comprehensive (Loss) Income. Put options that are not exercisable
for at least one year from the Consolidated Statements of Financial Position date are presented as long-term
redemption liabilities.
Share-based payments
The Company operates a number of share-based compensation plans for the benefit of certain employees and
directors, as described in Note 29.
The accounting for a share-based payment plan is based on whether the arrangement is classified as equity-
settled or cash-settled. Equity-settled arrangements are those in which the Company receives services as
consideration for its own equity instruments. Cash-settled arrangements arise where the Company pays the
employee cash amounts based on the value of the Company’s shares.
Page 13 • AutoCanada
The fair value of equity-settled awards is recognized as an expense over the vesting period with a
corresponding increase in equity or redemption liabilities. The total amount to be expensed is determined by
reference to the fair value of the options at the grant date.
Foreign currency translation
The financial results of the dealerships that operate in the United States (U.S.) are translated from the functional
currency of U.S. dollars into the reporting currency of Canadian dollars upon consolidation. Assets and
liabilities have been translated to the reporting currency of Canadian dollars using the exchange rates in effect
on the Consolidated Statements of Financial Position dates. Revenue and expense accounts are translated
using the average exchange rate during the period. The cumulative translation adjustments associated with the
net assets of foreign subsidiaries are recorded in accumulated other comprehensive income in the
Consolidated Statements of Changes in Equity.
Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and
liabilities of the foreign operation and translated at the closing exchange rate.
Derivative financial instruments
Derivatives are recognized initially at fair value on the date of contract inception and are subsequently re-
measured to current fair value at the end of each reporting period. The accounting for subsequent changes in
fair value depends on whether the instrument is designated as a hedging instrument and, if so, the nature of the
item being hedged. The Company currently does not hold any derivatives for trading or speculative purposes.
At the inception of the hedge relationship, the Company documents the economic relationship between the
hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking
hedge transactions. The effective portion of changes in the fair value of qualifying hedging derivatives is
recognized as a reserve within equity. The gain or loss relating to any ineffective portion is recognized
immediately in profit or loss. The periodic net settlement of the interest rate swap is recognized in profit or loss
within finance costs at the same time as the interest expense on the hedged borrowings.
Upon the expiry, sale, or termination of a hedging instrument, any cumulative deferred gain or loss and
deferred costs of hedging remain in equity until the original hedged transactions occur.
Further information on the Company’s risk management and hedge accounting is presented in Note 25.
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative
instrument that does not qualify for hedge accounting are recognized immediately in profit or loss and are
included in Revenue and Finance costs, as disclosed in Note 25.
The full fair value of a derivative instrument is classified as a non-current asset or liability when the remaining
maturity of the hedged item is greater than one year.
Segment reporting
The Company’s Chief Operating Decision Maker ("CODM") is identified as the Executive Chair and is responsible
for allocating resources and assessing the performance of each dealership. Supporting the CODM is the
President, North American Operations, who reports to the CODM. The Company will report segmented
information by Canadian Operations and U.S. Operations. Each reportable operating segment is comprised of
retail automobile dealerships and related businesses, which have been aggregated based on their economic
similarities.
The Company's CODM measures the performance of each operating segment based on operating profit, which
is defined as income before income taxes, net finance costs and other income (expense). The segmented
information is set out in Note 37.
Page 14 • AutoCanada
4 New and amended accounting standards issued
Accounting standards and amendments issued and adopted in 2024
Non-current liabilities with covenants and classification of liabilities as current or non-current
(Amendments to IAS 1)
In October 2022, IASB issued amendments to IAS 1 to further clarify the earlier amendments, stating that
liabilities are classified as either current or non-current based on the rights that exist at the end of a reporting
period. Covenants of loan arrangements will not affect classification of a liability as current or non-current at
the reporting date if the entity must only comply with the covenants after the reporting date. Only those
covenants that must be complied with as at or before the reporting date will affect classification, even if the
covenant is tested for compliance after the reporting date. Additional disclosures are required in the instances
that a company classifies a liability as non-current and that liability is subject to covenants that must be
complied with within 12 months of the reporting date.
Lease liability in a sale and leaseback (Amendments to IFRS 16)
In September 2022, narrow-scope amendments to IFRS 16 Leases ("IFRS 16") were made, finalizing
requirements on how a company accounts for sale and leaseback transactions, specifically addressing
treatment after the date of transaction. These amendments specify that, in measuring the lease liability
subsequent to the sale and leaseback, the seller-lessee determines the "lease payments" and ''revised lease
payments" in a manner preventing the seller-lessee from recognizing any amount of the gain or loss related to
the right of use retained. This may particularly affect transactions where lease payments encompass variable
payments that do not use an index or a rate.
Supplier finance arrangements (Amendments to IAS 7 and IFRS 7)
Amendments to IAS 7 and IFRS 7 were made in August 2023, requiring new disclosures related to supplier
finance arrangements ("SFA's") with the objective to provide information about SFAs that enables investors to
assess the effects on a company's liabilities, cash flows and exposure to liquidity risk. Further, these
amendments specify the terms and conditions of SFAs that these new disclosures requirements are within
scope for annual periods during the first year of application.
The amendments listed above did not have a material impact on the amounts recognized in prior periods and
are not expected to significantly affect the current or future periods.
Accounting standards and amendments issued but not yet adopted in 2024
Certain new standards, interpretations, amendments, and improvements to existing standards were issued by
the IASB or International Financial Reporting Interpretations Committee (“IFRIC”) that are not effective for the
year ended December 31, 2024, and have not been applied in the preparation of these Annual Financial
Statements.
The standards issued that are applicable to the Company are as follows:
Lack of Exchangeability (Amendments to IAS 21)
In August 2023, the IASB amended IAS 21 to help entities to determine whether a currency is exchangeable into
another currency, and which spot exchange rate to use when it is not.
The amendments are effective for annual reporting periods beginning on or after January 1, 2025. The Company
does not expect this amendment to have a material impact on its operations or financial statements.
Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7)
On May 30, 2024, the IASB issued targeted amendments to IFRS 9 and IFRS 7 to respond to recent questions
arising in practice, and to include new requirements not only for financial institutions but also for corporate
entities. These amendments:
●clarify the date of recognition and derecognition of some financial assets and liabilities, with a new
exception for some financial liabilities settled through an electronic cash transfer system;
●clarify and add further guidance for assessing whether a financial asset meets the solely payments of
principal and interest (SPPI) criterion;
●add new disclosures for certain instruments with contractual terms that can change cash flows (such
as some financial instruments with features linked to the achievement of environment, social and
governance targets); and
●update the disclosures for equity instruments designated at fair value through other comprehensive
income (FVOCI).
Page 15 • AutoCanada
The amendments are effective for annual reporting periods beginning on or after January 1, 2026, these
amendments are to be applied retrospectively in accordance with IAS 8, with early adoption permitted. The
Company is assessing the potential impact of this standard.
Presentation and disclosure of information in financial statements (IFRS 18)
IFRS 18 will replace IAS 1 Presentation of financial statements, introducing new requirements that will help to
achieve comparability of the financial performance of similar entities and provide more relevant information
and transparency to users. Even though IFRS 18 will not impact the recognition or measurement of items in the
financial statements, its impacts on presentation and disclosure are expected to be pervasive, in particular
those related to the statement of financial performance and providing management-defined performance
measures within the financial statements.
The standard is effective for annual reporting periods beginning on or after January 1, 2027, this standard is to
be applied retrospectively in accordance with IAS 8, with early adoption permitted. The Company is assessing
the potential impact of this standard.
5 Critical accounting estimates
The preparation of Annual Financial Statements requires management to make estimates about the future.
Estimates are continuously evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
Actual results may differ from these estimates. Critical estimates and assumptions were used to determine the
value of the following assets and liabilities.
Intangible assets and goodwill
Intangible assets and goodwill generally arise from business combinations. The Company applies the
acquisition method of accounting for these transactions, which involves the allocation of the cost of an
acquisition to the underlying net assets acquired based on their respective estimated fair values. As part of this
allocation process, the Company must identify and attribute values to the intangible assets acquired.
Management applies significant judgement in estimating the fair value of the intangible assets. These
determinations involve significant estimates and assumptions regarding projected operating margins, terminal
growth rates and discount rates.
These estimates and assumptions determine the amount allocated to intangible assets and goodwill. If future
events or results differ significantly from these estimates and assumptions, the Company may record
impairment charges in the future.
The Company tests at least annually or more frequently if events or changes in circumstances indicate that they
may be impaired, in accordance with its accounting policies. The recoverable amounts of CGUs have been
estimated based on the greater of fair value less costs to dispose and value in use calculations (Note 20).
Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the Consolidated Statements of
Financial Position cannot be measured based on quoted prices in active markets, their fair value is measured
using valuation techniques including the discounted cash flow ("DCF") method. The inputs to these models are
taken from observable market data where possible, but where this is not feasible, a degree of judgement is
required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit
risk and volatility. Changes in assumptions relating to these factors could affect the reported fair value of
financial on instruments. See Note 32 for further disclosure.
Inventories
Inventories are recorded at the lower of cost and net realizable value with cost determined on a specific item
basis for new and used vehicles. In determining net realizable value for new vehicles, the Company primarily
considers the age of the vehicles along with the timing of annual and model changeovers. For used vehicles,
the Company considers seasonality, recent market data and trends such as loss histories along with the current
age of the inventory. The determination of net realizable value for inventories involves the use of estimates.
Page 16 • AutoCanada
Redemption liabilities
Redemption liabilities arise during business combinations where non-controlling interest shareholders have the
right to require the Company to redeem their equity interests in certain non-wholly owned subsidiaries (refer to
Note 14). The redemption amounts are determined with reference to the future profitability generated by those
subsidiaries and their operating businesses. The Company will initially recognize a financial liability at the
present value of the estimated redemption amount, and at the end of each subsequent reporting period, the
Company will revisit its estimates. If the Company revises its estimates, the Company will adjust the carrying
amount of the financial liability to reflect revised estimated profitability and the adjustments will be recognized
as income or expenses in the Consolidated Statements of Comprehensive (Loss) Income.
Leases
i.
Critical judgments in determining the lease term
Extension and termination options are included in a number of property leases held by the Company. In
determining the lease term, management considers all facts and circumstances that create an economic
incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods
after termination options) are only included in the lease term if the lease is reasonably certain to be extended
(or not terminated). Potential future cash outflows have not been included in the lease liability if it is not
reasonably certain that the leases will be extended.
The assessment is reviewed if a significant event or a significant change in circumstances occurs that affects
this assessment and that is within the control of the lessee.
ii. Estimation uncertainty arising from variable lease payments
Certain leases contain variable payment terms that are linked to the consumer price index.
Deferred taxes
The extent to which deferred tax assets are recognized is based on estimates of future profitability.
Management has concluded that it is probable that the deferred tax assets will be recovered using estimated
future taxable income, based on approved business plans and budgets for each segment. The estimates will be
updated in future periods, which may result in increases or decreases in the amount of deferred tax assets
recognized based on the amount judged to be probable of recovery.
6 Revenue
2024
$
2023
Revised (1)
$
New vehicles
2,306,112
2,242,329
Used vehicles
2,054,855
2,360,703
Parts and service
556,297
565,571
Collision repair
130,913
116,123
Finance, insurance and other
303,495
322,468
Revenue
5,351,672
5,607,194
1 Comparative period revised to reflect current period presentation for: i) reclassification of discontinued operation (Note 18);
and ii) reclassification from parts, service and collision repair to collision repair.
Page 17 • AutoCanada
7 Cost of sales
2024
$
2023
Revised (1)
$
New vehicles
2,135,316
2,045,808
Used vehicles
1,988,369
2,243,078
Parts and service
254,317
260,931
Collision repair
65,718
59,051
Finance, insurance and other
25,675
20,664
Cost of sales
4,469,395
4,629,532
1 Comparative period revised to reflect current period presentation for: i) reclassification of discontinued operation (Note 18);
and ii) reclassification from parts, service and collision repair to collision repair.
8 Operating expenses
2024
$
2023
Revised (1)
$
Employee costs (Note 9)
445,819
495,939
Administrative costs
228,048
222,318
Facility lease costs
4,747
5,152
Depreciation of right-of-use assets (Note 24)
32,797
30,495
Depreciation of property and equipment (Note 19)
23,398
22,726
Amortization of intangible assets (Note 20)
503
529
Operating expenses
735,312
777,159
1 Comparative period revised to reflect current period presentation. See Note 18 Discontinued operation for additional
information.
9 Employee costs
Operating expenses incurred in respect of employees were as follows:
2024
$
2023
Revised (1)
$
Wages, salaries and commissions
382,385
404,808
Withholding taxes and insurance
35,091
30,946
Employee benefits
14,572
16,579
Share-based compensation (Note 29)
8,033
43,210
Termination and other benefits
5,738
396
Employee costs
445,819
495,939
1 Comparative period revised to reflect current period presentation. See Note 18 Discontinued operation for additional
information.
Page 18 • AutoCanada
10 Lease and other income and gain on disposal of assets, net
2024
$
2023
Revised (1)
$
Lease and other income
Lease and rental income
5,948
8,743
Other income
1,902
4,032
7,850
12,775
Gain on disposal of assets, net
Gain on lease terminations, net
1,460
391
(Loss) gain on disposals of property and equipment, net
(2,375)
51
Gain on disposal of assets held for sale (Note 17)
30,696
—
29,781
442
1 Comparative period revised to reflect current period presentation. See Note 18 Discontinued operation for additional
information.
11 Finance costs and finance income
2024
$
2023
Revised (1)
$
Finance costs
Interest on long-term indebtedness
25,560
29,498
Interest on lease liabilities (Note 24)
31,837
29,680
Loss on extinguishment of debt
—
1,382
Unrealized fair value changes on non-hedging instruments (Note 25)
10,030
928
Amortization of terminated hedges (Note 25)
—
3,067
67,427
64,555
Floorplan financing
64,118
60,528
Interest rate swap settlements (Note 25)
(4,774)
(6,624)
Other finance costs
2,907
4,561
129,678
123,020
Finance income
Interest on net investment in lease (Note 24)
58
61
Short-term bank deposits
2,616
3,285
2,674
3,346
1 Comparative period revised to reflect current period presentation. See Note 18 Discontinued operation for additional
information.
Page 19 • AutoCanada
12 Taxation
Reconciliation of effective income tax rate for the year ended December 31, 2024 is as follows:
2024
$
2023
Revised (1)
$
Income for the year before tax from continuing operations
44,673
98,672
Income for the year before tax multiplied by the blended rate of Canadian corporate
tax of 25.5% (2023 - 25.4%)
11,401
25,063
Effects of:
Tax losses and deductible temporary differences not recognized
—
—
Adjustment in respect of prior years
612
14
Impact of non-deductible and other permanent items
(4,598)
4,985
Impact of recovery of non-financial assets
(289)
(225)
Impact of change in substantively enacted rates
(32)
18
Impact of income tax rate differentials
99
638
Other, net
842
206
Income tax expense
8,035
30,699
Effective income tax rate
18.0 %
31.1 %
1 Comparative period revised to reflect current period presentation. See Note 18 Discontinued operation for additional
information.
Segmented components of income tax:
2024
$
2023
$
Canada
15,222
21,964
U.S.
—
—
Current income tax expense
15,222
21,964
Canada
(7,187)
8,735
U.S.
—
—
Deferred income tax expense
(7,187)
8,735
Total income tax expense
8,035
30,699
Income tax expense attributable to:
2024
$
2023
$
Continuing operations:
Income tax expense
15,222
21,964
Deferred income tax (recovery) expense
(7,187)
8,735
8,035
30,699
Discontinued operation:
Income tax expense (recovery)
—
(115)
Deferred income tax expense
13,698
—
13,698
(115)
Total income tax expense
21,733
30,584
Components of deferred income tax:
2024
$
2023
$
Deferred tax asset
18,840
35,444
Deferred tax liability
(44,613)
(55,768)
Net deferred tax liability
(25,773)
(20,324)
Page 20 • AutoCanada
The movements of deferred tax assets and liabilities are shown below:
Deferred tax
assets
(liabilities)
Deferred
income from
partnerships
$
Property
and
equipment
$
Intangible
assets
and
goodwill
$
Right-of-
use assets
net of lease
liabilities
$
Derivative
financial
instruments
$
Non-
capital
losses
$
Share-
based
payments
$
Other
$
Total
$
January 1,
2023
(4,606)
(758)
(37,552)
12,846
(3,209) 15,206
1,777
6,370
(9,926)
(Expense)
benefit
charged to
income taxes
(2,173)
(703)
(3,113)
1,886
(320)
(4,249)
1,015 (1,078)
(8,735)
Amounts
charged to
other
comprehensive
income
—
—
—
—
(458)
—
—
—
(458)
Amounts
charged to
contributed
surplus (deficit)
—
—
—
—
—
—
(760)
—
(760)
Acquisition of
subsidiaries
(Note 13)
—
(151)
—
—
—
—
—
—
(151)
Other
—
25
(314)
—
—
—
—
(5)
(294)
December 31,
2023
(6,779)
(1,587)
(40,979)
14,732
(3,987) 10,957
2,032
5,287
(20,324)
(Expense)
benefit
charged to
income taxes
5,244
(1,578)
(2,845)
2,418
3,445
1,105
1,243 (1,845)
7,187
Amounts
charged to
other
comprehensive
income
—
—
—
—
51
—
—
—
51
Amounts
charged to
contributed
surplus
—
—
—
—
—
—
534
—
534
Derecognition
of US deferred
tax asset
—
—
(13,698)
—
—
—
—
472
(13,226)
Other
—
—
—
—
—
—
—
5
5
December 31,
2024
(1,535)
(3,165)
(57,522)
17,150
(491)
12,062
3,809
3,919
(25,773)
Changes in the deferred income tax components are adjusted through deferred tax expense. Of the above
components of the deferred income tax (liability) asset, ($1,535) (2023 - $(6,779)) is expected to be recovered
within 12 months.
Page 21 • AutoCanada
The unrecognized deductible temporary differences relating to the U.S Operations are as follows:
2024
$
2023
$
Total U.S. deductible temporary differences
187,302
128,543
Less:
U.S. unrecognized deductible temporary differences, other than tax losses
(85,904)
(25,637)
U.S. unrecognized tax losses
(101,398)
(56,521)
Total unrecognized deductible temporary differences
(187,302)
(82,158)
Net recognized deductible temporary differences relating to the U.S.
Operations
—
46,385
Net recognized deferred tax asset
—
13,226
As at December 31, 2024, the Company has recognized the benefit of $nil (2023 - $46,385) of the deductible
temporary differences relating to the U.S. discontinued operations, as a deferred tax asset. Deferred tax assets
have not been recognized in respect of these items because it is not probable that future taxable profit will be
available against which the Company will be able to use these benefits.
The Company's U.S. Operations have federal and state net operating losses of $101,398 and $118,225,
respectively (2023 - $56,521 and $71,989). The federal losses can be carried forward indefinitely, while the state
losses expire, between 2038 and 2044.
The Company also has Canadian non-capital losses of $48,849 (2023 - $45,619) available to reduce future
taxable income, until their expiry between 2032 and 2044.
Pillar Two legislation has been enacted in Canada and is effective for the Group’s financial year beginning 1
January 2024. AutoCanada has performed an assessment of the group’s exposure to Pillar Two income taxes
based on the most recent information available regarding the financial performance of the constituent entities
of AutoCanada. Based on the assessment performed, AutoCanada is not subject to Pillar Two top-up taxes for
the year ending December 31, 2024.
Page 22 • AutoCanada
13 Business acquisitions
During the year ended December 31, 2024, the Company completed a business acquisition that was accounted
for using the acquisition method.
Acquisition of Nurse Chevrolet Cadillac and Collision Centre
On June 24, 2024, the Company acquired substantially all of the assets of Nurse Chevrolet Cadillac Dealership
and Collision Centre in Oshawa, Ontario. The acquisition supports management's strategic objectives of further
expanding the Company's automobile dealership presence and collision centre capacity in the Province of
Ontario.
The estimated provisional purchase price allocations, which are subject to the finalization of the valuation of
acquired assets and assumed liabilities, of the business acquisitions completed during the year ended
December 31, 2024 are summarized as follows:
Total
$
Current assets
Cash
2
Trade and other receivables
91
Inventories
2,687
2,780
Long-term assets
Property and equipment
1,495
Right-of-use assets
18,850
Intangible assets
14,820
Total assets
37,945
Current liabilities
Trade and other payables
122
Lease liabilities
70
192
Long-term liabilities
Lease liabilities
18,780
Total liabilities
18,972
Net identifiable assets acquired
18,973
Goodwill
1,226
Total net assets acquired
20,199
Total consideration
20,199
The goodwill is attributable to the workforce, synergies from combining operations of the acquirees and
profitability of the acquired businesses. Goodwill of $nil is deductible for tax purposes.
The results of operations of the acquired entities are included in the Consolidated Statements of
Comprehensive (Loss) Income from the date of acquisition. Such results of operations and the related assets
and liabilities at the statement of financial position date are included in the Consolidated Statements of
Financial Position.
The results of operations of the acquired entities since the acquisition dates contributed an insignificant
amount of revenue and net income to the Consolidated Statements of Comprehensive (Loss) Income for the
period ended December 31, 2024. Had the acquisitions occurred at January 1, 2024, consolidated pro-forma
revenue and net loss for the period ended December 31, 2024 would have been $6,132,440 and ($67,287)
respectively.
Page 23 • AutoCanada
These amounts have been calculated using the subsidiary's results and adjusting them for:
●Income tax expense (recovery); and
●Leasing arrangements as if they had been entered into on January 1, 2024.
Transaction costs of $198 have been expensed and recorded in operating expenses.
Prior year business acquisitions
During the 12-month period ended December 31, 2024, new information was obtained about circumstances
that existed at the acquisition date, which resulted in certain adjustments of the fair value of net identifiable
assets acquired for the following acquisitions:
●DCC Hail, acquired in February 2023
●Premier Chevrolet Cadillac Buick GMC Dealership and Collision Centre, acquired in April 2023
●London Auto Collision Limited, acquired in May 2023
These adjustments are not significant and have been adjusted for prospectively in these Annual Financial
Statements. Provisional amounts upon acquisition were previously disclosed in the Annual Financial Statements
for the year ended December 31, 2023 for the above acquisitions.
14
Interest in subsidiaries
Certain subsidiaries of the Company have non-controlling interests ("NCI") held by other parties. The interests
in these subsidiaries are summarized as follows:
Subsidiary
Principal place of
business
Proportion of
ownership interests
held by non-
controlling interests
Proportion of voting
rights held by non-
controlling interests
Ericksen M-B Ltd.
Alberta
10 %
10 %
GI G Auto HoldCo Inc.
British Columbia
10 %
10 %
WBG Auto HoldCo Ltd.
Manitoba
10 %
10 %
WAM Motors LP
Manitoba
5 %
5 %
Brantford Auto LP
Ontario
10 %
10 %
PCCBG Auto HoldCo Inc.
Ontario
5 %
5 %
15154871 Canada Inc.
Ontario
10 %
— %
AutoCanada C Holdings Inc.
Quebec
15 %
15 %
Canbec Automobile Inc.
Quebec
15 %
15 %
Auto Bugatti Inc.
Quebec
25 %
25 %
RS M Motors LP
Quebec
5 %
5 %
NBFG Auto Holdco Inc..
Saskatchewan
5 %
5 %
2282239 Alberta Ltd.
Saskatchewan
10 %
10 %
2282237 Alberta Ltd.
Saskatchewan
10 %
10 %
The subsidiaries are companies that own automotive dealerships and related businesses. For purposes of
disclosure, the non-controlling interest profit and loss, and accumulated non-controlling interest of the
subsidiaries at the end of the reporting period are reported in aggregate as the subsidiaries are similar in nature
and risk, based on assessment of the interest and industry classification.
The Company provides long-term loans to specific NCI parties, and these are presented as other assets (Note
21).
Page 24 • AutoCanada
15154871 Canada Inc. redemption liability
A wholly owned subsidiary of the Company is the general partner of AutoCanada UD LP, a limited partnership
("the Partnership") that holds the interest in 15154871 Canada Inc., a subsidiary of the Partnership, that sells
finance, insurance, and warranty products to buyers of private owner-sold vehicles on Kijiji's online
marketplaces (the "Online C2C F&I Business"). The arrangement with the non-controlling shareholder in the
Online C2C F&I Business contains put options whereby the non-controlling shareholder is able to sell its shares
back to the Company. The put options are recognized as redemption liabilities, measured at their fair value on
the Consolidated Statements of Financial Position. The fair value is determined based on the equity value of the
related subsidiary. The fair value of the put options and associated redemption liabilities has been determined
as $25,000 as at December 31, 2024 (2023 - $25,000) .
The arrangement also contains a call option whereby the Company is able to purchase the shares from the non-
controlling shareholder at the higher of $75,000 and the fair value of such shares. The call option is recognized
as a financial asset, measured at fair value on the Consolidated Statements of Financial Position. The fair value
is determined based on the equity value of the related subsidiary. The fair value of the call option and
associated financial asset has been determined as $nil as at December 31, 2024 (2023 - $nil).
Other redemption liabilities
Certain NCI entities contain put options, whereby the non-controlling shareholders are able to sell their shares
back to the Company. These put options are recognized as redemption liabilities, measured at their fair value
on the Consolidated Statements of Financial Position. The fair value is determined based on the equity value of
the related subsidiary (Note 33). Those options eligible to be executed in the next fiscal year are presented as
current liabilities.
The continuity of the aggregate redemption liabilities is summarized as follows:
December 31,
2024
$
December 31,
2023
$
Beginning of period
47,580
27,269
Additions in the year
—
25,000
Adjustment to fair value - Used Digital Division (Note 29)
—
36,725
Derecognition on settlement
—
(37,775)
Adjustment to fair value - other
486
(3,639)
End of period
48,066
47,580
Current redemption liabilities
23,066
22,580
Long-term redemption liabilities
25,000
25,000
Prior year purchase of minority interest in Used Digital Division
On December 27, 2023, the Company completed the purchase of the minority 19.1% interest (the "Used Digital
Division Minority Interest") in the Partnership from a company controlled by the Executive Chair and dealership
management. The aggregate purchase consideration of $37,775 consisted of $23,944 in cash, funded from the
proceeds of the Online C2C F&I Business investment, $7,500 in stock units, and $6,331 in performance share
units (Note 29). The fair value of the transaction was determined to be $37,775.
For the year ended December 31, 2024, cash paid to settle the Used Digital Division Minority Interest was
$22,500 (2023 - $1,444) (Note 35).
Page 25 • AutoCanada
15 Trade and other receivables
December 31,
2024
$
December 31,
2023
$
Trade receivables
137,831
185,919
Sales tax receivable
29,363
25,341
Other receivables
8,324
14,064
175,518
225,324
Less: Expected loss allowance (Note 32)
(1,950)
(3,248)
Trade and other receivables
173,568
222,076
The Company is exposed to normal credit risk with respect to its accounts receivable and maintains provisions
for expected credit losses (Note 32). Potential for such losses is mitigated because there is no significant
exposure to any single customer and because customer creditworthiness is evaluated before credit is
extended.
16 Inventories
December 31,
2024
$
December 31,
2023
$
New vehicles
487,955
542,978
Demonstrator vehicles
78,919
78,092
Used vehicles
333,933
475,126
Parts and accessories
46,471
58,115
Inventories
947,278
1,154,311
Amounts recognized in the Consolidated Statements of Comprehensive (Loss) Income:
December 31,
2024
$
December 31,
2023 (1)
$
Inventory expensed as cost of sales
4,354,391
4,568,760
Writedowns on vehicles included in cost of sales
35,944
12,815
Demonstrator expenses included in administrative costs
6,043
13,328
1 Comparative period revised to reflect current period presentation. See Note 18 Discontinued operation for additional
information.
For the year ended December 31, 2024, the Company performed a comprehensive assessment on the net
realizable value of inventory. Provisions recorded on inventory were based on specific criteria regarding model
and year of production and reflect management's estimate of market pricing trends and seasonality.
17 Assets and liabilities held for sale
Land and buildings
The Company committed to sell specific land and buildings in Alberta, Ontario, and New Brunswick, which are
included in the Canadian Operations segment. The net assets have been reclassified as held for sale in these
Consolidated Statements of Financial Position.
On February 1, 2024, the Company completed the sale of two properties consisting of land and buildings in
British Columbia and Alberta for cash consideration of $41,370 net of closing adjustments as part of a
settlement agreement announced on September 8, 2023. These properties were previously held for sale as at
December 31, 2023. A gain of $19,218 was recognized on the sale.
On May 1, 2024, the Company completed the sale of a property in Alberta consisting of land and building for
cash consideration of $10,000. The property was previously held for sale as at March 31, 2024. A gain of $3,418
was recognized on the sale.
Page 26 • AutoCanada
On September 10, 2024, the Company completed the sale of a property consisting of land and building in
Alberta for cash consideration of $2,295. The property was previously held for sale as at June 30, 2024. A gain
of $1,247 was recognized on the sale.
During the year ended December 31, 2024, the Company recorded a gain on disposal of assets of $23,883
(2023 - $nil).
As at December 31, 2024, assets held for sale in the Canadian Operations segment include land and buildings
of $6,658 (2023 - $22,152).
Dealerships sold during the year
During the year ended December 31, 2024, the Company classified three dealerships in the Canadian
Operations segment as held for sale and completed the sale of these dealerships for cash consideration of
$59,497 (Note 34). A pre-tax gain of $6,813 was recognized on the sale.
Impairment charges as a result of reclassification as held for sale
Under IFRS Accounting Standards, when non-current assets meet the criteria to be classified as held for sale,
this is also considered to be an impairment indicator and the non-current assets must be measured at the lower
of cost and the fair value less costs to sell. Any resulting impairment must be allocated to goodwill and then to
the other non-current assets on a pro-rata basis. During the year ended December 31, 2024, the Company
recorded an impairment charge of $7,782 (Note 20) related to a dealership in the Canadian Operations segment
that was determined to be impaired. The $7,782 impairment charge was allocated to intangible assets as
goodwill was previously fully impaired.
Assets and liabilities held for sale directly associated with discontinued operation
As at December 31, 2024, the Company's retail automobile dealerships in its U.S. Operations have been
presented as a discontinued operation and the assets and liabilities directly associated have been classified as
held for sale (Note 18).
Impairment charges as a result of reclassification as held for sale
During the year ended December 31, 2024, the Company recorded an impairment charge of $5,123 (Note 20)
related to two dealerships in the U.S. Operations segment that were determined to be impaired. The $5,123
impairment charge was allocated first to goodwill for $683 with the remainder allocated to intangible assets as
goodwill was fully impaired.
The reconciliation of assets held for sale on the Consolidated Statements of Financial Position is as follows:
December 31,
2024
$
December 31,
2023
$
Assets held for sale from Canadian operations
6,658
22,152
Assets held for sale directly associated with discontinued operation (Note 18)
326,035
—
Assets held for sale
332,693
22,152
Liabilities directly associated with assets held for sale
201,966
—
Liabilities directly associated with assets held for sale
201,966
—
Page 27 • AutoCanada
18 Discontinued operation
As at December 31, 2024, the Company was engaged in an active program to locate buyers for its retail
automobile dealerships in its U.S. Operations segment. The Company’s retail automobile dealerships in its U.S.
Operations segment represent a geographical area of the Company’s operations, therefore, its results have
been presented as a discontinued operation.
The assets and liabilities have been reclassified as held for sale as at December 31, 2024 (Note 17).
Financial performance and cash flow information
The financial performance and cash flow information for the year ended December 31, 2024 and December 31,
2023 is summarized as follows:
December 31,
2024
$
December 31,
2023
$
Revenue
747,300
829,609
Cost of sales
(644,941)
(685,484)
Gross profit
102,359
144,125
Operating expenses
(151,143)
(135,521)
Operating (loss) profit before other income
(48,784)
8,604
Lease and other income, net
1,532
381
Loss on disposal of assets, net
—
(20)
Net impairment losses on trade and other receivables
—
(353)
Impairment of non-financial assets (Note 20)
(11,393)
—
Impairment loss recognized on remeasurement to fair value less cost to
dispose (Note 20)
(5,123)
—
Operating (loss) profit
(63,768)
8,612
Finance costs
(25,920)
(22,919)
Loss for the year before taxation from discontinued operation
(89,688)
(14,307)
Income tax expense (recovery) (Note 12)
13,698
(115)
Net loss from discontinued operation
(103,386)
(14,192)
Exchange differences on translation of discontinued operation
8,032
6,489
Other comprehensive loss from discontinued operation
8,032
6,489
December 31,
2024
$
December 31,
2023
$
Net cash inflow from operating activities
33,017
1,022
Net cash outflow from investing activities
(2,441)
(9,280)
Net cash outflow from financing activities
(8,878)
(5,756)
Net increase (decrease) in cash from discontinued operation
21,698
(14,014)
Page 28 • AutoCanada
The following assets and liabilities were reclassified as held for sale in relation to the discontinued operation as
at December 31, 2024:
December 31,
2024
$
Current assets:
Cash
40,005
Trade and other receivables
28,389
Inventories
127,456
Current tax recoverable
1,203
Other current assets
369
197,422
Property and equipment
47,619
Right-of-use assets
40,555
Intangible assets
36,762
Goodwill
3,677
Assets held for sale
326,035
Current liabilities:
Trade and other payables
47,904
Revolving floorplan facilities
79,789
Lease liabilities
7,472
Other liabilities
1,373
136,538
Lease liabilities
65,313
Other liabilities
115
Liabilities directly associated with assets held for sale
201,966
The cumulative foreign exchange losses recognized in other comprehensive income in relation to the
discontinued operation as at December 31, 2024 were $15,921.
Civil investigation
As at December 31, 2024, the Company recorded an accrual in the U.S. Operations segment for the monetary
relief of $28,778 ($20,000 USD) (Note 28) included in Trade and other payables in Liabilities directly associated
with assets held for sale in the discontinued operation.
Page 29 • AutoCanada
19 Property and equipment
Company
& lease
vehicles
$
Leasehold
improvements
$
Machinery
&
equipment
$
Land &
buildings1, 2
$
Furniture,
fixtures &
other
$
Computer
equipment
$
Total
$
Cost:
January 1, 2023
41,039
80,606
45,879
247,342
21,892
13,555
450,313
Capital expenditures
—
24,421
6,530
25,807
2,948
3,349
63,055
Business combinations (Note 13)
2,994
393
3,304
—
55
5
6,751
Acquisition of real estate
—
—
—
7,659
—
—
7,659
Disposals
—
(721)
(549)
(581)
(67)
(2,192)
(4,110)
Prior year business acquisitions
(Note 13)
207
(11)
(791)
—
—
—
(595)
Transfers to assets held for sale
—
—
—
(29,891)
—
—
(29,891)
Transfer from inventory, net
13
—
—
—
—
—
13
Foreign currency translation
(156)
(129)
(181)
(436)
(71)
(32)
(1,005)
December 31, 2023
44,097
104,559
54,192
249,900
24,757
14,685
492,190
Capital expenditures
—
13,358
7,814
11
3,217
3,418
27,818
Business combinations (Note 13)
27
859
419
—
190
—
1,495
Disposals
—
(16,816)
(1,900)
(10,911)
(1,196)
(1,645)
(32,468)
Transfers to assets held for sale
(8,911)
(14,873)
(10,087)
(26,979)
(4,008)
(1,739)
(66,597)
Transfers to inventory, net
(2,264)
—
—
—
—
—
(2,264)
Foreign currency translation
564
1,086
774
1,600
323
121
4,468
December 31, 2024
33,513
88,173
51,212
213,621
23,283
14,840
424,642
Accumulated depreciation:
January 1, 2023
(8,549)
(23,339)
(24,490)
(27,970)
(11,175)
(9,198)
(104,721)
Depreciation (Note 8)
(5,567)
(4,134)
(4,042)
(5,167)
(2,276)
(1,540)
(22,726)
Depreciation recorded in
discontinued operation
(207)
(313)
(1,049)
(140)
(431)
(164)
(2,304)
Disposals
—
544
441
591
93
2,133
3,802
Prior year business acquisitions
(Note 13)
—
—
386
—
—
—
386
Transfers to assets held for sale
—
—
—
7,739
—
—
7,739
Transfers to inventory, net
3,694
—
—
—
—
—
3,694
Foreign exchange
17
19
97
6
44
26
209
December 31, 2023
(10,612)
(27,223)
(28,657)
(24,941)
(13,745)
(8,743)
(113,921)
Depreciation (Note 8)
(5,048)
(3,386)
(4,737)
(5,438)
(2,976)
(1,813)
(23,398)
Depreciation recorded in
discontinued operation
(260)
(520)
(1,027)
(131)
(348)
(159)
(2,445)
Disposals
—
5,874
1,451
1,795
909
1,430
11,459
Transfers to assets held for sale
1,063
1,432
5,588
500
2,447
1,290
12,320
Transfers to inventory, net
4,265
—
—
—
—
—
4,265
Foreign exchange
(77)
(98)
(418)
(31)
(185)
(99)
(908)
December 31, 2024
(10,669)
(23,921)
(27,800)
(28,246)
(13,898)
(8,094)
(112,628)
Carrying amount:
December 31, 2023
33,485
77,336
25,535
224,959
11,012
5,942
378,269
December 31, 2024
22,844
64,252
23,412
185,375
9,385
6,746
312,014
1 As at December 31, 2024, the Company owns land of $60,571 (2023 - $78,724), which is not subject to depreciation.
2 As at December 31, 2024 $nil (2023 - $53,412) of construction-in-progress amounts are included in land and buildings and are
not subject to depreciation until the assets are available for use.
Page 30 • AutoCanada
The Company started the construction of a dealership facility in Maple Ridge, British Columbia on January 24,
2022. This project was completed in 2024. The construction was financed with the Company's non-revolving
term facilities (Note 23). The amount of borrowing costs capitalized during the year ended December 31, 2024
was $189 (2023 - $1,077).
During the year ended December 31, 2024, management did not identify any property and equipment that were
impaired and no (2023 - $nil) impairment losses were recorded.
20 Intangible assets and goodwill
Intangible assets consist of rights under franchise agreements with automobile manufacturers and internally
generated software costs. Intangible assets and goodwill are tested for impairment annually as at December 31
or more frequently, if events or changes in circumstances indicate that they may be impaired.
The Company determined there were indicators of impairment as a result of the decline in market capitalization
of the Company when compared to the book value of the net assets at June 30, 2024. Three U.S. dealerships
recorded an impairment charge on indefinite-lived identifiable intangible assets amounting to $11,393 (2023 -
$nil). The impairment charge for two dealerships was determined using the Value in Use method ("VIU") and the
impairment charge for the other dealership was determined using the Fair Value less Cost to Dispose method
("FVLCD").
The Company determined there was an indicator of impairment as a result of the decline in market
capitalization of the Company when compared to the book value of the net assets at December 31, 2024. The
Company performed an annual test for impairment as at December 31, 2024 and recorded an impairment
charge on indefinite-lived identifiable intangible assets of $3,241 (2023 - $2,131) in the Canadian Operations.
For the year ended December 31, 2024, $nil (2023 - $nil) impairment charges on goodwill were recorded. As
part of the annual test, one Canadian dealership (2023 - two) recorded a recovery of impairment on indefinite-
lived identifiable intangible assets amounting to $(7,612) (2023 - $(5,669)). The improvements in financial
performance that resulted in the recovery of impairment on indefinite-lived identifiable intangible assets was
driven by management changes and process improvements within the Canadian dealership. The impairment
charges and recoveries for all three dealerships were determined using VIU.
Impairment charges as a result of reclassification as held for sale
For the year ended December 31, 2024, impairment charges of $7,782 related to a dealership in the Canadian
Operations that was sold during the year and $5,123 related to two dealerships in the U.S. Operations were
recorded as a result of the reclassification as held for sale (Note 17) (2023 - nil).
The net impairment for the year ended December 31, 2024 relates to the Company's reportable segments as
follows:
Canadian
Operations
$
U.S.
Operations
$
Total
$
Leases (note 24)
1,130
—
1,130
Intangible assets
3,412
15,833
19,245
Goodwill
—
683
683
4,542
16,516
21,058
Page 31 • AutoCanada
The changes in the book value of intangible assets and goodwill for the year ended December 31, 2024 were as
follows:
Intangible assets
$
Goodwill
$
Total
$
Indefinite life
Definite life
Total
Cost:
January 1, 2023
691,268
4,392
695,660
186,940
882,600
Acquisitions
18,940
—
18,940
16,283
35,223
Additions
2,102
—
2,102
—
2,102
Prior year business acquisitions
—
—
—
3,755
3,755
Effect of foreign currency translation
(1,273)
—
(1,273)
(2,099)
(3,372)
December 31, 2023
711,037
4,392
715,429
204,879
920,308
Acquisitions (Note 13)
14,820
—
14,820
1,226
16,046
Additions
53
737
790
—
790
Prior year business acquisitions
—
—
—
(892)
(892)
Transfer to assets held for sale (Note 18)
(57,472)
—
(57,472)
(83,248)
(140,720)
Divestitures (Note 34)
(22,267)
—
(22,267)
—
(22,267)
Effect of foreign currency translation
4,646
—
4,646
6,728
11,374
December 31, 2024
650,817
5,129
655,946
128,693
784,639
Accumulated amortization and
impairment:
January 1, 2023
36,399
—
36,399
108,856
145,255
Impairment
2,131
—
2,131
—
2,131
Recoveries of impairment
(5,669)
—
(5,669)
—
(5,669)
Amortization of intangible assets (Note 8)
—
529
529
—
529
Effect of foreign currency translation
(98)
—
(98)
(2,243)
(2,341)
December 31, 2023
32,763
529
33,292
106,613
139,905
Impairment
11,024
—
11,024
—
11,024
Recoveries of impairment
(7,612)
—
(7,612)
—
(7,612)
Impairment recorded in discontinued
operation
15,833
—
15,833
683
16,516
Amortization of intangible assets (Note 8)
—
503
503
—
503
Transfer to assets held for sale (Note 18)
(20,710)
—
(20,710)
(79,571)
(100,281)
Divestitures (Note 34)
(7,782)
—
(7,782)
—
(7,782)
Effect of foreign currency translation
931
—
931
6,376
7,307
December 31, 2024
24,447
1,032
25,479
34,101
59,580
Carrying amount:
December 31, 2023
678,274
3,863
682,137
98,266
780,403
December 31, 2024
626,370
4,097
630,467
94,592
725,059
Additions to intangible assets for internally generated software costs have a finite useful life.
Page 32 • AutoCanada
Carrying value
CGUs have been determined to be individual dealerships. The following table shows the carrying amount of
indefinite-lived identifiable intangible assets and goodwill by CGU:
December 31, 2024
$
December 31, 2023
$
Cash Generating Unit
Intangible
assets
Goodwill
Total
Intangible
assets
Goodwill
Total
AL
27,807
6,135
33,942
27,807
6,135
33,942
AF
29,495
922
30,417
29,495
922
30,417
CI
27,265
2,919
30,184
27,265
2,919
30,184
AZ
21,250
3,970
25,220
21,250
3,970
25,220
U
24,494
506
25,000
24,494
506
25,000
AD
22,300
2,629
24,929
22,300
2,629
24,929
A
22,293
—
22,293
14,681
—
14,681
S
21,806
—
21,806
21,806
—
21,806
D
18,044
3,724
21,768
18,044
3,724
21,768
AO
21,687
—
21,687
21,687
—
21,687
AH
20,384
—
20,384
20,384
—
20,384
CR
18,940
382
19,322
18,940
382
19,322
T
18,599
—
18,599
18,599
—
18,599
BS
15,335
3,058
18,393
15,335
3,029
18,364
BI
10,305
6,111
16,416
10,305
6,887
17,192
SE
14,820
1,226
16,046
—
—
—
G
14,235
1,677
15,912
14,235
1,677
15,912
X
14,065
1,740
15,805
14,065
1,740
15,805
I
15,520
—
15,520
15,520
—
15,520
P
15,078
—
15,078
15,078
—
15,078
AE
14,496
—
14,496
14,496
—
14,496
CG
53
14,292
14,345
—
14,233
14,233
AP
12,496
941
13,437
12,496
941
13,437
AI
11,470
1,903
13,373
11,470
1,903
13,373
AK
13,176
—
13,176
15,306
—
15,306
CK
10,990
1,132
12,122
10,990
1,132
12,122
M
11,549
—
11,549
11,549
—
11,549
AR
9,263
950
10,213
9,263
950
10,213
AX
—
—
—
23,306
—
23,306
Q
—
—
—
18,196
—
18,196
CF
—
—
—
13,102
—
13,102
CT
—
—
—
9,424
628
10,052
Other CGUs less than $10,000 1
153,252
40,375
193,627
161,249
43,959
205,208
Carrying amount
630,467
94,592
725,059
682,137
98,266
780,403
1 CGUs under $10,000 have been aggregated together, determined to be appropriate given the size of the Company.
Page 33 • AutoCanada
Recoverable amounts
The following table shows the recoverable amounts of CGUs, with impairments or recoveries of impairments
recorded in either the current year or prior year, that have not been fully impaired:
Canadian Operations
Cash Generating Unit
FVLCD or
VIU
December 31,
2024
$
December 31,
2023
$
A
VIU
25,554
17,900
AK
VIU
14,905
—
Other CGUs less than $10,000 (1)
VIU
9,917
11,273
1 CGUs under $10,000 have been aggregated together, determined to be appropriate given the size of the Company.
Comparatives in the table have been updated to aggregate CGU's under $10,000.
Impairment test of indefinite life intangible assets
The assumptions and sensitivities applied in the intangible assets impairment test are described as follows:
Valuation techniques
The Company did not make any changes to the valuation methodology used to assess impairment in the
current year. The recoverable amount of each CGU is based on the greater of fair value less cost to dispose and
value in use.
Value in use
VIU is predicated upon the value of the future cash flows that a business will generate going forward. The
DCF method is used, which involves projecting cash flows and converting them into a present value
equivalent through discounting. The discounting process uses a rate of return that is commensurate with
the risk associated with the business or asset and the time value of money. This model requires assumptions
about growth rates, earnings before interest, taxes, depreciation, and amortization ("EBITDA"), and discount
rates.
Fair value less costs to dispose
FVLCD assumes that companies operating in the same industry will share similar characteristics and that the
Company's values will correlate to those characteristics. Therefore, a comparison of a CGU to similar
companies may provide a reasonable basis to estimate fair value. Under this model, fair value is calculated
based on an applicable multiple applied to projected EBITDA. Data for EBITDA multiples was based on recent
comparable transactions and management estimates. Multiples used in the test for impairment for each
CGU were in the range of 2.5 to 10.0 times forecasted EBITDA for CGUs tested for impairment on June 30,
2024, and in the range of 2.5 and 8.8 times forecasted EBITDA for CGUs tested for impairment on
December 31, 2024 (2023 - 2.5 to 10.0 times).
Significant assumptions for VIU
Projected EBITDA and growth rates
The assumptions used are based on the Company’s internal budget, which is approved by the Board of
Directors. The Company projects operating margins and cash flows for a period of one year and applies
growth rates in the cash flow forecast period commensurate with industry forecasts. In arriving at its
forecasts, the Company considers past experiences, economic trends, and inflation as well as industry and
market trends. Management applied a growth rate between 0.5% and 8.5% in its projections for CGUs tested
for impairment on June 30, 2024, and a growth rate between 0.0% and 2.1% in its projections for CGUs
tested for impairment on December 31, 2024 (2023 - 0.5% and 8.5%).
Page 34 • AutoCanada
Discount rates
The Company applies a discount rate to calculate the present value of its projected cash flows. The discount
rate represents the Company’s internally computed weighted average cost of capital (“WACC”) for each
CGU with appropriate adjustments for the risks associated with the CGUs in which intangible assets are
allocated. The WACC is an estimate of the overall required rate of return on an investment for both debt and
equity owners and serves as the basis for developing an appropriate discount rate. Determination of the
discount rate requires separate analysis of the cost of equity and debt, and considers a risk premium based
on an assessment of risks related to the projected cash flows of each CGU. Management applied a discount
rate between 11.42% and 12.76% in its projections for CGUs tested for impairment on June 30, 2024, and a
discount rate between 11.09% and 12.33% in its projections for CGUs tested for impairment on December 31,
2024 (2023 - 11.80% and 12.88%).
Significant assumptions for FVLCD
Projected EBITDA
The Company’s assumptions for projected EBITDA are based on the Company’s internal budget, which is
approved by the Board of Directors. In arriving at the projected EBITDA, the Company considers projected
operating margins and growth rates as significant assumptions, past experiences, economic trends, and
inflation as well as industry and market trends.
EBITDA multiples
EBITDA multiples are based on recent comparable transactions, market comparatives, and management
estimates.
Sensitivity
As there are CGUs that have intangible assets with original costs that exceed their current year carrying
amounts, the Company expects future impairments and recoveries of impairments to occur as market
conditions change and risk premiums used in developing the discount rate change.
The recoverable amount of each CGU is sensitive to changes in market conditions and could result in material
changes in the carrying value of intangible assets in the future. Based on sensitivity analysis, no reasonably
possible change in key assumptions would cause the recoverable amount of any CGU to have a significant
change from its current valuation except for the CGUs identified below.
CGUs, which use VIU as the basis of recoverable amount, for which a reasonably possible change in key
assumptions would cause an impairment, along with the change required for an impairment to occur are as
follows:
Cash Generating Unit
Change in
discount rate
Change in
growth rate
Carrying
amount
$
Recoverable
amount exceeds
carrying amount
$
December 31, 2024
C
0.20 %
1.66 %
4,267
187
BS
0.25 %
2.12 %
22,409
562
AP
0.61 %
2.48 %
22,772
1,520
W
0.31 %
2.49 %
8,001
418
I
0.09 %
1.01 %
14,778
—
December 31, 2023
AE
0.80 %
3.46 %
20,464
—
AK
0.09 %
0.40 %
18,135
—
Page 35 • AutoCanada
CGUs, which use FVLCD as the basis of recoverable amount, for which a reasonably possible change in key
assumptions would cause an impairment, along with the change required for an impairment to occur are as
follows:
Cash Generating Unit
Change in
multiple
Recoverable
amount
$
Carrying
amount
$
Recoverable
amount exceeds
carrying amount
$
December 31, 2024
AI
0.01
12,613
12,613
—
December 31, 2023
CR
1.4
19,322
19,322
—
21 Other assets
December 31, 2024
$
December 31, 2023
$
Current
Long-term
Current
Long-term
Prepaid expenses
11,923
2,092
13,283
1,346
Derivative financial instruments (Note 25)
—
—
2,318
—
Other assets
—
13,557
—
14,498
Net investment in lease (Note 24)
70
852
117
864
Other assets
11,993
16,501
15,718
16,708
Other assets of $13,557 (2023 - $14,498) relates to long-term loans receivable from the respective non-
controlling interests (Note 14).
22 Trade and other payables
December 31,
2024
$
December 31,
2023
$
Trade payables
76,789
75,079
Accruals and provisions
36,687
87,445
Sales tax payable
30,300
32,757
Wages and withholding taxes payable
33,697
43,146
Trade and other payables
177,473
238,427
The following table provides a continuity schedule of all recorded provisions:
Employee
costs
$
Legal and
other
$
Total
$
January 1, 2023
2,378
5,778
8,156
Provisions made during the year
1,244
—
1,244
Amounts expired or disbursed
(2,046)
(2,797)
(4,843)
December 31, 2023
1,576
2,981
4,557
Provisions made during the year
1,636
—
1,636
Amounts expired or disbursed
(1,087)
—
(1,087)
December 31, 2024
2,125
2,981
5,106
Page 36 • AutoCanada
23 Revolving floorplan facilities and indebtedness
This note provides information about the contractual terms of the Company’s interest bearing debt, which is
measured at amortized cost. For more information about the Company’s exposure to interest rate, foreign
currency, and liquidity risk, refer to Note 32.
December 31,
2024
$
December 31,
2023
$
Revolving floorplan facilities
Revolving floorplan facilities - Syndicate (ii)
596,585
728,935
Revolving floorplan facilities - Ally Financial (viii)
42,247
114,639
Revolving floorplan facilities - VW Credit Canada, Inc. (iii)
107,162
103,246
Revolving floorplan facilities - RBC (v)
80,160
69,544
Revolving floorplan facilities - BMW Financial (iv)
67,301
65,810
Revolving floorplan facilities - Mercedes-Benz Financial (vii)
55,756
50,973
Revolving floorplan facilities - GM Financial (vi)
61,368
41,448
Total revolving floorplan facilities
1,010,579
1,174,595
Indebtedness
Revolving term facilities (ii)
Revolving term facility
156,931
187,000
Unamortized deferred financing costs
(2,053)
(778)
154,878
186,222
Non-revolving term facilities
Non-recourse mortgages (ix)
40,104
31,235
Unamortized deferred financing costs
(45)
(47)
40,059
31,188
Senior unsecured notes
Senior unsecured notes (i)
350,000
350,000
Unamortized deferred financing costs
(3,700)
(4,599)
346,300
345,401
Other debt
Other long-term debt
414
111
Total indebtedness
541,651
562,922
Current indebtedness
24,108
744
Long-term indebtedness
517,543
562,178
The following table shows the movement of indebtedness during the years ended December 31, 2024 and
December 31, 2023:
2024
$
2023
$
Balance, January 1
562,922
555,128
Amortization of deferred financing costs
1,413
1,220
Draws and additions
635,046
674,560
Repayments and redemption
(657,730)
(669,334)
Other
—
1,348
Balance, December 31
541,651
562,922
Terms and conditions of outstanding loans are as follows:
i.
The Company has Senior Unsecured Notes ("the New Issuance Notes"), with a $350,000 aggregate
principal amount (2023 - $350,000), issued at par for a stated interest rate of 5.75% (2023 - 5.75%). The
New Issuance Notes have a term of seven years and mature on February 7, 2029. Interest is payable semi-
annually on February 7 and August 7 of each year the New Issuance Notes are outstanding.
Page 37 • AutoCanada
The New Issuance Notes agreement contains certain redemption options whereby the Company can
redeem all or part of the New Issuance Notes at prices set forth in the agreement, following certain dates
specified in the agreement. In addition, at any time prior to February 7, 2025, the Company may at its
option redeem up to 40% of the aggregate principal amount of the New Issuance Notes with net cash
proceeds from equity offerings at a specified redemption price in the agreement. The New Issuance Note
holders also have the right to require the Company to redeem the New Issuance Notes or a portion
thereof, at the redemption prices set forth in the agreement in the event of a change in control. These
redemption features constitute embedded derivatives that are required to be separated from the New
Issuance Notes and measured at fair value.
The embedded derivative components of these compound financial instruments are measured at fair
value at each reporting date with gains or losses in fair value recognized through profit or loss. For the
year ended December 31, 2024, the Company recognized an embedded derivative of $nil (2023 - $nil)
related to these redemption options.
ii.
On April 22, 2024, the Company amended its syndicated credit agreement. The amendment included the
creation of a $25,000 leasehold facility and increasing total aggregate bank facilities to $1,635,000. The
credit facility term was also extended to April 22, 2027.
On September 27, 2024, the Company amended its syndicated credit agreement to increase the
Company's maximum permitted Total Net Funded Debt to EBITDA Ratio from 4.00:1.00 to 7.00:1.00 for
the period from July 1, 2024 to September 30, 2024, 7.50:1.00 for the period from October 1, 2024 to
March 31, 2025, 5.50:1.00 for the period from April 1, 2025 to June 30, 2025, 4.50:1.00 for the period from
July 1, 2025 to September 30, 2025. After September 30, 2025, the Company's maximum permitted Total
Net Funded Debt to EBITDA Ratio will revert to 4.00:1.00 until the end of the agreement term. The
Company's maximum permitted Fixed Charge Coverage Ratio was decreased from 1.20:1.00 to 1.00:1.00
for the period from July 1, 2024, to March 31, 2025. After March 31, 2025, the Company's maximum
permitted Fixed Charge Coverage Ratio will revert to 1.20:1.00 until the end of the agreement term. No
changes were made to the Company's Senior Net Funded Debt to EBITDA Ratio. Other changes included
increased interest rates across the revolver, leasehold, floorplan and lease facilities, a reduction in the
proportion of used floorplan, and other administrative limitations that are applicable during the covenant
relief period.
On December 27, 2024, the Company amended its syndicated credit agreement to include add-backs of
up to CAD $35,000 for specific one-time expenses, including $20,000 USD provisioned for Federal Trade
Commission settlement expenses (Note 28), in the definition of EBITDA, for purposes of determining
compliance with the Company’s financial covenants under the senior credit facility for the rolling four
quarter period from December 31, 2024, to September 30, 2025.
In the case of advances under the revolving facility, the margins above the prime rate, banker’s
acceptance rate or U.S. base rate are subject to a pricing grid based on the then applicable ratio of senior
net funded debt to EBITDA as noted below. As at December 31, 2024, advances at the prime rate or U.S.
base rate plus 1.75% (2023 - 0.75%) for total of 7.20% (2023 - 7.95%), or at the Canadian Overnight Repo
Rate Average ("CORRA") rate plus 2.75% (2023 - Canadian Dollar Offered Rate (“CDOR”) plus 1.75%) for
total of 6.65% (2023 - 6.22%) at December 31, 2024. The wholesale leasing facilities bear interest rates of
CORRA plus 2.00% (2023 - CDOR plus 1.75%) for a total of 5.90% (2023 - 7.15%). The wholesale floorplan
facilities bear interest rates of CORRA plus 1.00%-1.15% (2023 - CDOR plus 1.00%) for a total of 4.90% to
5.05% (2023 - 6.40%), except for facility for floorplan of used export vehicles, which bears interest rates of
CORRA plus 1.50% (2023 - CDOR plus 1.25%) for total of 5.40% (2023 - 6.65%).
The agreement has certain reporting requirements and financial covenants. Financial covenants are based
on total operations (continuing operations and discontinued operations). The floorplan facility is
collateralized by each individual dealership’s inventories that are directly financed by the facility. The
revolving credit facility is collateralized by certain of the Company’s real property and fixed assets, as well
as certain current receivable and inventory assets not otherwise pledged as collateral.
iii.
VW Credit Canada, Inc. (“VCCI”) provides floorplan financing for new and used vehicles for all of the
Company’s Volkswagen, Audi, and Porsche dealerships (the “VCCI facilities”). As at December 31, 2024,
the maximum amount of financing was $152,350 (2023 - $122,995). The VCCI facilities bear interest of RBC
prime rate plus 0.00%–0.25% (2023 - 0.00%-0.25%). The RBC prime rate was 5.45% at December 31, 2024
(2023 - 7.20%). The combined total interest rates were 5.45%-5.70% (2023 - 7.20%-7.45%). The VCCI
facilities have certain reporting requirements and financial covenants and are collateralized by all of the
dealerships' assets financed by VCCI. The individual notes payable of the VCCI facilities are due when the
related vehicle is sold.
Page 38 • AutoCanada
iv.
BMW Financial Services Canada (“BMW Financial”), a division of BMW Canada Inc., provides floorplan
financing for new, used and demonstrator vehicles for all of the Company’s BMW dealerships (the “BMW
Facilities”). As at December 31, 2024, the maximum advance limit was $118,750 (2023 - $118,050). The
BMW Facilities bears interest rate of prime minus 0.40% (2023 - 0.40%) per 360 day annum for a total of
5.05% at December 31, 2024 (2023 - 6.80%). The BMW Facilities have certain reporting requirements and
financial covenants and are collateralized by the dealerships’ movable and immovable property.
v.
Royal Bank of Canada ("RBC") provides floorplan financing for new, used and demonstrator vehicles for
five of the Company’s dealerships (the “RBC Facilities”). As at December 31, 2024, the maximum advance
limit was $129,500 (2023 - $99,500). The RBC Facilities bear interest rates of RBC’s Cost of Funds Rate
plus 0.00%-0.15% (2023 - 0.00%-0.15%). As at December 31, 2024 the RBC’s Cost of Funds Rate was
4.45% (2023 - 6.34%). The combined total interest rates were 4.45%-4.60% (2023 - 6.34%-6.49%). The RBC
Facilities have certain reporting requirements and financial covenants and are collateralized by the new,
used, and demonstrator inventory financed by RBC and a general security agreement from the dealerships
financed by RBC.
vi.
General Motors Financial of Canada (the "GM Financial Facilities") provides floorplan financing for new,
used, service loaner, and demonstrator vehicles for three of the Company's dealerships. GM Financial
Facilities bear interest of prime rate minus 0.25%. As at December 31, 2024, the prime rate was 5.45%
(2023 - 6.95%) for a total interest rate of 5.20% (2023 - 6.95%). The maximum amount of financing was
$75,800 (2023 - $51,300). The GM Financial Facilities have certain reporting requirements and are
collateralized by the new, used, and demonstrator inventory financed by GM Financial and a general
security agreement from the Company's three dealerships financed by GM Financial.
vii.
Mercedes-Benz Financial (the “Mercedes-Benz Facilities”) provides floorplan financing for new, used and
demonstrator vehicles for two of the Company’s dealerships. As at December 31, 2024, the maximum
amount of financing was $65,500 (2023 - $65,500). The facilities bear interest at CORRA plus 1.80%-2.10%
per annum (2023 - CDOR plus 1.50%-1.80%) for total of 5.36%-5.66% (2023 - 6.90%-7.20%). The Mercedes-
Benz Facilities have certain reporting requirements and financial covenants and are collateralized by the
new, used, and demonstrator inventory financed by Mercedes-Benz Financial and a general security
agreement from the Company’s dealerships financed by Mercedes-Benz Financial.
viii. Ally Financial (the "Ally facility") provides U.S. floorplan financing for new, used, and demonstrator vehicles
in the Company's U.S dealerships. As at December 31, 2024, the facility limit was $127,500 USD (2023 –
$127,500 USD). The Ally facility bears interest at Secured Overnight Financing Rate ("SOFR") plus 4% (2023
- the Ally Bank prime rate). As at December 31, 2024, the effective rate was 8.63% (2023 - 8.50%). The
floorplan facility has certain reporting requirements and financial covenants and is collateralized by each
individual dealership’s inventories that are directly financed by the facility.
ix.
The Company executed a non-recourse mortgage financing for a previously purchased property in Maple
Ridge, BC. The non-recourse mortgage arrangement funds land value as well as building associated with
the development of two dealerships. The mortgage was refinanced as of September 2024 at a variable
interest rate of prime + 1.00% (2023 - 1.50%) with a combined total rate of 6.45% as at December 31, 2024
(2023 - 8.70%). The mortgage has a one-year term, twenty-five-year amortization, and will require monthly
interest plus principal payments. As at December 31, 2024, the Company has drawn $23,364 (2023 -
$13,575) on the facilities to partially fund land and building value.
The Company has executed two non-recourse mortgage financings for previously purchased properties in
Windsor, ON and London, ON. The $7,120 and $11,480 non-recourse mortgage arrangements (2023 -
$7,120 and $11,480), respectively, funds land and building value only. The mortgages have a five-year term
with a fixed interest rate of 7.07% (2023 - 7.07%). The mortgages 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.
The underlying real estate is pledged as collateral on the non-recourse mortgages in the amount of the
loan, as at December 31, 2024 the carrying value of the pledged real estate is $85,465 (2023 - $83,358).
As at December 31, 2024, $24,108 (2023 - $744) of non-recourse mortgage loans is classified as current.
The Company was in compliance with its debt covenants as at December 31, 2024.
Page 39 • AutoCanada
24 Leases
The below table summarizes the right-of-use asset and lease liability movement for the Company's properties:
December 31,
2024
$
December 31,
2023
Revised (1)
$
Right-of-use assets, beginning of period
405,105
396,369
Additions
48,981
40,279
Acquisitions (Note 13)
18,850
6,205
Depreciation (Note 8)
(32,797)
(30,495)
Depreciation recorded in discontinued operation
(3,122)
(2,948)
Disposals
(8,758)
(3,350)
Impairment
(1,130)
—
Effect of foreign currency translation
3,384
(955)
Transfers to assets held for sale (Note 18)
(40,555)
—
Right-of-use assets, end of period
389,958
405,105
December 31,
2024
$
December 31,
2023
Revised (1)
$
Lease liabilities, beginning of period
497,424
484,877
Additions
48,981
40,279
Acquisitions (Note 13)
18,850
6,205
Repayments
(66,612)
(61,969)
Interest expense (Note 11)
31,837
29,680
Interest expense recorded in discontinued operation
3,130
3,339
Transfers to liabilities held for sale (Note 18)
(72,785)
—
Disposals
(10,218)
(3,678)
Effect of foreign currency translation
6,565
(1,309)
Lease liabilities, end of period
457,172
497,424
Current lease liabilities
35,780
28,411
Long-term lease liabilities
421,392
469,013
1 Comparative period revised to reflect current period presentation. See Note 18 Discontinued operation for additional
information.
For the year ended December 31, 2024, the Company had total cash outflows relating to the principal portion
for leases of $24,934 (2023 - $22,700).
Other disclosures
Other than depreciation, the following amounts have been recognized in income:
2024
$
2023
$
Expenses related to short-term leases (included in operating expenses)
363
798
Expenses related to leases of low-value assets that are not shown above as short-
term leases (included in operating expenses)
46
131
Income from sub-leasing right-of-use assets (included in lease and other income)
58
114
As at December 31, 2024, potential undiscounted cash outflows of $589,945 (2023 - $613,975), have not been
included in the lease liability as it is not reasonably certain the extension options will be exercised. The financial
effect of including reasonably certain extension options in leases liabilities and right-of-use assets is $103,941
(2023 - $107,120).
Page 40 • AutoCanada
Leases as lessor
Finance lease
For the year ended December 31, 2024, the Company has sub-leased one property that has been presented as a
net investment in lease in other assets (Note 21) and recognized interest income on lease receivables of $58
(2023 - $61) (Note 11).
The following table sets out a maturity analysis of lease receivables, showing the undiscounted lease payments
to be received after December 31, 2024:
Total
$
2025
123
2026
127
2027
133
2028
136
2029
142
Thereafter
534
Total undiscounted lease receivable
1,195
Unearned finance income
273
Net investment in the lease
922
25 Derivative financial instruments
Derivative financial instruments are held for the purpose of managing exposure to fluctuations in foreign
exchange rates and interest rates.
Foreign exchange risk
The Company uses foreign exchange forward contracts to economically hedge foreign currency risk. These
contracts are not designated as hedges for accounting purposes and changes in fair value are immediately
recognized in net income.
Interest rate risk
The Company enters into interest rate swap agreements to hedge the variable rates of the syndicated floorplan
facility transforming the variable rate exposure to fixed rate obligations. As at December 31, 2024, the Company
had no designated cash flow hedges.
On February 1, 2024, the Company entered into a new fixed interest rate swap that fixed Canadian Overnight
Repo Rate Average ("CORRA") at 3.77% with a notional amount of $75,000 to economically hedge the variable
rate of debt. The swap has an initial maturity date of February 1, 2029, but can be terminated earlier by the
counterparty on February 1, 2027. Changes in the fair value of these instruments will be recorded in finance
costs as the Company has not elected to apply hedge accounting to this contract.
On November 28, 2024, the Company entered into a new interest rate swap with a notional amount of $50,000
to economically hedge the variable rate of debt. These instruments have a deferred start date of June 2, 2025,
and a settlement period of June 2030. Changes in the fair value of these instruments will be recorded in finance
costs as the Company has not elected to apply hedge accounting to these contracts.
On November 28 and December 2, 2024, the Company entered into two new interest rate swaps with a total
notional amount of $49,795 to economically hedge the variable rate of debt. These instruments have a deferred
start date of March 3, 2025, and a settlement period of March 2030. Changes in the fair value of these
instruments will be recorded in finance costs as the Company has not elected to apply hedge accounting to
these contracts.
On December 2, 3, 5 and 9, 2024, the Company entered into four new interest rate swaps with a total notional
amount of $78,005 to economically hedge the variable rate of debt. These instruments have a deferred start
date of March 1, 2025, and a settlement period of March 2030. Changes in the fair value of these instruments
will be recorded in finance costs as the Company has not elected to apply hedge accounting to these
contracts.
Page 41 • AutoCanada
Swaps currently in place cover approximately 77.81% (2023 - 38.11%) of the variable principal outstanding on
the syndicate revolving floorplan facilities. The swaps fix CORRA rates in the range between 2.46% - 4.53%
(2023 - 2.19% - 4.53%) and the variable rates of the wholesale floorplan facilities bears an interest rate of CORRA
plus 1.00% (2023 - CDOR plus 1.00%), which, at the end of the reporting period, was 4.90% to 5.05% (2023 -
6.40%).
The swap contracts require settlement of net interest receivable or payable every 28 to 32 days. The settlement
dates coincide with the dates on which interest is payable on the underlying debt.
During the years ended December 31, 2024, and December 31, 2023, there were no changes to the designation
of cash flow hedges.
The fair values and notional amounts of derivative financial instruments are as follows:
Foreign exchange
forward contracts
Interest rate swaps
Non-hedges
$
Cash flow hedges
$
Non-hedges
$
Total
$
December 31, 2024
Derivative financial instruments - current
assets
—
—
376
376
Derivative financial instruments - current
liabilities
1,741
—
—
1,741
Derivative financial instruments - non
current liabilities
—
—
8,705
8,705
Notional values
56,800 USD
— CAD
480,600 CAD
Maturity
2025
2025 - 2030
December 31, 2023
Other current assets (Note 21 )
2,112
206
—
2,318
Derivative financial instruments - non
current assets
—
—
3,920
3,920
Derivative financial instruments - non
current liabilities
—
—
2,219
2,219
Notional values
61,000 USD
50,000 CAD
227,800 CAD
Maturity
2024
2024
2025 - 2026
Change in fair value of outstanding
hedging instruments since January 1
—
(196)
—
(196)
Change in value of hedged item used to
determine hedge effectiveness
—
196
—
196
The weighted average hedge rate of cash flow hedges was 3.27% (2023 - 3.04%).
Page 42 • AutoCanada
Unrealized and realized pre-tax gains and (losses) on derivative instruments recognized in net income and other
comprehensive income on the Consolidated Statements of Comprehensive (Loss) Income are:
Net income
$
Other
comprehensive
income
$
Total
$
For the year ended December 31, 2024
Change in fair value of hedging instruments
—
(206)
(206)
Unrealized fair value changes on non-hedging instruments
(Note 11)
(10,030)
—
(10,030)
Interest rate swap settlements (Note 11)
4,774
—
4,774
Unrealized fair value changes on foreign exchange forward
contracts
(3,853)
—
(3,853)
Realized loss on foreign exchange forward contracts
(2,292)
—
(2,292)
(11,401)
(206)
(11,607)
For the year ended December 31, 2023
Change in fair value of hedging instruments
—
(1,267)
(1,267)
Unrealized fair value changes on non-hedging instruments
(Note 11)
(928)
—
(928)
Amortization of terminated hedges (Note 11)
(3,067)
3,067
—
Interest rate swap settlements (Note 11)
6,624
—
6,624
Unrealized fair value changes on foreign exchange forward
contracts
2,267
—
2,267
Realized loss on foreign exchange forward contracts
(928)
—
(928)
3,968
1,800
5,768
Effect of IBOR reform
Following the financial crisis, the reform and replacement of benchmark interest rates such as CDOR and other
interbank offered rates ("IBORs") has become a priority for global regulators (referred to as "IBOR reform"). The
Canadian Alternative Reference Rate Working Group ("CARR") was created to identify and seek to develop a
new risk-free Canadian dollar interest rate benchmark. An enhanced Canadian Oversight Repo Rate Average
("CORRA") has been designed to comply with recommendations of the Financial Stability Board as part of a
global effort to reform benchmark interest rates. All of the Company's hedging instruments have been
transitioned to CORRA.
26 Vehicle repurchase obligations
The Company operates service loaner programs and provides vehicles to a third-party vehicle rental company
with individual terms not to exceed 12 months, at which time the Company has an obligation to repurchase
each vehicle at a predetermined amount. As a result, the Company has recorded the contractual repurchase
amounts as outstanding vehicle repurchase obligations and has classified the liability as current due to the
short-term nature of the obligation.
Page 43 • AutoCanada
27 Other liabilities
December 31, 2024
$
December 31, 2023
$
Current
Long-term
Current
Long-term
Equity forward
11,063
—
11,063
—
Restructuring charges
—
—
1,262
1,368
Other liabilities
11,063
—
12,325
1,368
Equity forward liability
The Company has entered into equity forward purchase agreements with a major Canadian financial institution
to reduce its cash and income exposure to fluctuations in its share price relating to the Restricted Share Units
("RSUs"), Performance Share Units ("PSUs"), Stock Units, Deferred Share Units ("DSUs"), and Share Appreciation
Rights ("SARs"). Pursuant to the agreement, the Company receives the economic benefit of share price
appreciation and suffers the economic loss of share price depreciation, while providing payments to the
financial institution for the institution's cost of funds minus dividends. As the agreement requires settlement in
shares, the liability has been recorded as the present value of the settlement and is not subject to
remeasurement. The equity forward purchase agreements give the Company and the counterparty the option
to settle all of the common shares under the equity forward agreements in advance of the contractual
settlement date.
On October 3, 2024, the Company amended one of its existing equity forward agreements on 150,000
common shares to extend the settlement date to December 17, 2026.
As at December 31, 2024, the Company has equity forward agreements on 350,000 (2023 - 350,000)
outstanding common shares with an outstanding liability amounting to $11,063 (2023 - $11,063). The
outstanding liability is classified as a current liability.
The following table shows the change in the equity forward liability for the years ended:
December 31, 2024
December 31, 2023
Number of
shares
$
Number of
shares
$
Outstanding, beginning of the period
350,000
11,063
250,000
9,091
Acquired
—
—
100,000
1,972
Outstanding, end of the period
350,000
11,063
350,000
11,063
28 Commitments and contingencies
Lawsuits and legal claims
The Company is engaged in various legal proceedings and claims that have arisen in the ordinary course of
business. The outcome of all of the proceedings and claims against the Company is subject to future resolution,
including the uncertainties of litigation. Based on information currently known to the Company and after
consultation with outside legal counsel, management believes that the probable ultimate resolution of any such
proceedings and claims, individually or in the aggregate, will not have a material adverse effect on the financial
condition of the Company, taken as a whole. Note 22 includes provisions to account for information known to
the Company and based on estimates of probable resolutions.
The Company’s operations are subject to federal, provincial, state and local environmental laws and regulations
in Canada and the U.S. While the Company has not identified any costs likely to be incurred in the next several
years, based on known information for environmental matters, the Company’s ongoing efforts to identify
potential environmental concerns in connection with the properties it leases may result in the identification of
environmental costs and liabilities. The magnitude of such additional liabilities and the costs of complying with
environmental laws or remediating contamination cannot be reasonably estimated at the Consolidated
Statements of Financial Position date due to lack of technical information, absence of third-party claims, the
potential for new or revised laws and regulations and the ability to recover costs from any third parties. Thus,
the likelihood of any such costs or whether such costs would be material cannot be determined at this time.
Page 44 • AutoCanada
Civil investigation
On December 21, 2022, the Company received a Civil Investigative Demand ("CID") from the Federal Trade
Commission ("FTC") requesting information and documents concerning the Company's U.S. Operations
("Leader Automotive Group" or "Leader"). The Company responded to the CID by producing information and
documents for the period from April 1, 2018, to January 20, 2023. On July 8, 2024, the FTC staff counsel sent to
the Company a proposed consent order and draft complaint, alleging that Leader had violated Section 5 of the
Federal Trade Commission Act ("FTC Act"), the FTC's Used Motor Vehicle Trade Regulation Rule ("Used Car
Rule"), and Illinois law in connection with advertising, sale, lease, and financing of vehicles, and advising that it
would recommend the filing of an enforcement action if Leader did not settle the FTC's claims. On August 9,
2024, FTC staff informed the Company that the complaint recommendation of the Bureau of Consumer
Protection had been forwarded to the Commissioners of the FTC. On December 19, 2024, the Company
reached an agreement with the FTC to resolve the FTC's civil investigation. As part of the resolution, the
Company will pay $20,000 USD to the FTC and the State of Illinois in monetary relief, with no civil penalties.
As at December 31, 2024, the Company recorded an accrual in the U.S. Operations segment for the monetary
relief of $28,778 ($20,000 USD) included in Trade and other payables in Liabilities directly associated with
assets held for sale in the discontinued operation (Note 18).
Wholesale transactions at Capital Chrysler
On November 5, 2024, the Company received a decision from the Court of King’s Bench of Alberta that decided
that certain factual and legal opinions of the investigative receiver were binding on the parties to the action.
The action was commenced by Capital Chrysler respecting an ownership claim to certain new and used
vehicles that were allegedly sold in a series of wholesale transactions in 2018 ("Wholesale Transactions in
2018"). The Decision is not final, as it is in the process of being appealed by Capital Chrysler.
Notwithstanding the appeal, the Company recorded a write-down of trade receivable and other receivables as
at December 31, 2024, for $7,592 included in net impairment losses on trade and other receivables in the
Canadian Operations segment.
Letters of guarantee
The Company has outstanding letters of guarantee totaling $4,866 as at December 31, 2024 (2023 - $4,870)
with various due dates.
The Company will settle obligations as they arise for which these letters have been issued as security and it is
not the Company’s intent that draws will be made on these letters.
Capital commitments
As at December 31, 2024, the Company is committed to capital expenditure obligations in the amount of $3,781
(2023 - $5,404) related to dealership relocations, re-imagings, and dealership Open Points with expected
completion of these commitments in 2025.
29 Share-based payments
The Company operates an equity-settled compensation plan under which it receives services from employees
as consideration for share-based payments. The plans are as follows:
Restricted share units ("RSUs")
The Company grants RSUs to designated management employees. The RSUs are entitled to earn additional
units based on dividend payments made by the Company and the share price on date of payment. The RSUs
granted are scheduled to vest at different intervals over three years, conditional upon continued employment
with the Company.
The number of RSUs granted is determined based on the grant value divided by the Company's volume
weighted average share price for the five days prior to the grant date. For the year ended December 31, 2024,
37,919 RSUs (2023 - 45,055) were granted at a fair value of $22.05 (2023 - $16.01). The fair value of the RSUs
granted is recognized as an expense over the period in which the RSUs are expected to vest.
The share unit plan settles by way of common shares based on the Company's share price on the vesting date.
During the year ended December 31, 2024, 91,302 RSUs (2023 - 55,124) were settled, the weighted average
share price at the date of exercise was $20.72 (2023 - $28.70).
During the year ended December 31, 2024, (7,470) RSUs (2023 - 6,789) were forfeited, the grant date fair value
of the RSUs forfeited in the year was $16.08 (2023 - $22.18).
Page 45 • AutoCanada
The following table shows the change in the number of RSUs for the years ended:
December 31, 2024
December 31, 2023
Number of
RSUs
Number of
RSUs
Outstanding, beginning of the year
135,607
152,465
Settled - equity
(91,302)
(55,124)
Granted
37,919
45,055
Forfeited units
(7,470)
(6,789)
Outstanding, end of the year
74,754
135,607
During the year ended December 31, 2024, 16,095 RSUs were vested but not settled.
Performance share units ("PSUs")
The Company grants PSUs to designated management employees under the existing share unit plan. The PSUs
are entitled to earn additional units based on dividend payments made by the Company and the achievement of
specific non-market performance goals, if applicable. The PSUs granted are scheduled to vest based on the
achievement of specific non-market performance goals over three or seven years, conditional upon continued
employment with the Company. The PSUs settle by way of common shares.
The number of PSUs granted is determined based on the grant value divided by the Company's volume
weighted average share price for the five days prior to the grant date. During the year ended December 31,
2024, 285,103 PSUs (2023 - nil) were granted at a fair value of $22.85 (2023 - $nil). The fair value of the PSUs
granted is recognized as an expense over the period in which the PSUs are expected to vest.
During the year ended December 31, 2024, nil PSUs (2023 - nil) were settled and nil PSUs (2023 - nil) were
forfeited.
The following table shows the change in the number of PSUs for the years ended:
December 31, 2024
December 31, 2023
Number of
PSUs
Number of
PSUs
Outstanding, beginning of the year
—
—
Granted
285,103
—
Granted - Used Digital Division equity issuance
277,408
—
Outstanding, end of the year
562,511
—
During the year ended December 31, 2024, no PSUs were vested but not settled.
Deferred share units ("DSUs")
Independent members of the Board of Directors are paid a portion of their annual retainer in the form of DSUs.
They may also elect to receive up to 100% of their remaining cash remuneration in the form of DSUs. The
underlying security of DSUs are the Company’s common shares and are valued based on the Company’s
average share price for the five business days prior to the date on which Directors’ fees are granted. The DSUs
are also entitled to earn additional units based on dividend payments made by the Company and the share
price on date of payment. For the year ended December 31, 2024, 67,696 DSUs (2023 - 52,332) were granted at
a fair value of $18.62 (2023 - $21.50). The fair value is recognized as an expense over the period in which the
DSUs are granted. The DSUs settle by way of common shares.
DSU's vest upon granting. The DSU's are scheduled to settle upon the termination date of the Director, at which
time, the DSUs will be settled in common shares no earlier than the termination date and no later than
December 15 of the calendar year following the Director’s termination date.
For the year ended December 31, 2024, 22,931 DSUs (2023 - nil) were settled, the weighted average share price
at the date of exercise was of $21.10 (2023 - nil). The weighted average share price value is based on the
volume weighted average price of the Company's share price for the five business days prior to the date of
settlement.
Page 46 • AutoCanada
The following table shows the change in the number of DSUs for the years ended:
December 31, 2024
December 31, 2023
Number of
DSUs
Number of
DSUs
Outstanding, beginning of the year
193,380
141,048
Settled - equity
(22,931)
—
Granted
67,696
52,332
Outstanding, end of the year
238,145
193,380
Stock option plan ("Stock Options")
The Stock Option Plan (the “Plan”) is designed to provide long-term incentives to designated management to
deliver long-term shareholder returns. Under the Plan, participants are granted options which only vest if
certain service and market conditions are met. The terms of the Plan specify that following retirement an
employee may exercise vested options with the right to exercise continuing for 120 days following the
retirement date.
Options are granted under the Plan for no consideration and carry no dividend or voting rights. When
exercisable, each option is exercisable to acquire one common share. The exercise price of options is
determined by the Board and shall not be lower than the closing price of the AutoCanada shares on the Toronto
Stock Exchange immediately preceding the date of grant.
The following table shows the change in the number of stock options for the years ended:
December 31, 2024
December 31, 2023
Average
exercise price
per Stock
Option
$
Number of
Stock Options
Average
exercise price
per Stock
Option
$
Number of
Stock Options
Outstanding, beginning of the year
13.57
1,797,696
14.48
1,996,544
Exercised
—
—
9.72
(100,000)
Expired
22.63
(43,750)
—
—
Forfeited
22.63
(56,250)
35.72
(98,848)
Outstanding, end of the year
13.04
1,697,696
13.57
1,797,696
Vested and exercisable, end of the year
13.04
1,697,696
10.05
1,500,000
The following table shows the expiry date and exercise price for the Stock Options outstanding as at December
31, 2024:
Grant date
Expiry date
Exercise
price
$
Number of
Stock
Options
August 14, 2018
August 14, 2028
10.05
1,500,000
December 7, 2021
December 7, 2026
35.72
197,696
Total
1,697,696
Weighted average remaining contractual life of options outstanding, end of the period
3.43 years
The weighted average remaining contractual life for the Stock Options outstanding as at December 31, 2023
was 4.46 years.
During the year ended December 31, 2024, there were expenses of $1,122 (2023 - $1,655) and $11 recoveries
(2023 - $807).
Page 47 • AutoCanada
Share appreciation rights ("SARs")
The SARs are designed to enable those granted rights under the plan to participate in the growth and
profitability of the Company. Rights granted vest upon certain service and market conditions over a maximum
period of four years. Vested rights are exercisable for a maximum period of six years after the grant date.
Each SAR that is exercised entitles the employee to receive a number of common shares that is equal to (i) the
amount by which the fair market value of one common share exceeds the notional exercise price of the vested
SAR; divided by (ii) the fair market value of one common share. The fair value of the SARs granted is recognized
as an expense over the period in which the SARs are expected to vest.
The following table shows the change in the number of SARs for the year ended:
December 31, 2024
December 31, 2023
Weighted average
exercise price per
SAR
$
Number of
SARs
Weighted average
exercise price per
SAR
$
Number of
SARs
Outstanding, beginning of the year
29.08
1,211,000
29.25
1,201,000
Granted
19.65
420,000
17.84
60,000
Exercised
12.00
(33,000)
7.38
(25,000)
Expired
31.26
(145,035)
—
—
Forfeited
30.77
(154,965)
31.86
(25,000)
Outstanding, end of the year
26.18
1,298,000
29.08
1,211,000
Vested and exercisable, end of the
year
26.33
180,333
20.95
152,000
The weighted average contractual life remaining for these SARs as at December 31, 2024 is 3.70 years (2023 -
4.02 years).
The assessed weighted average fair value at grant date of the SARs granted during the year ended December
31, 2024 was $10.78 per option. The fair value at grant date has been determined using the Black-Scholes
Model. For certain SARs with market vesting conditions, the fair value at grant date has been determined using
the Black-Scholes Model.
The weighted average model inputs for the SARs granted during the year ended December 31, 2024 include:
●Rights are granted for no consideration and vest based on varying service and market price
conditions over a four year period. Vested rights are exercisable until August 26, 2028.
●Exercise price: $19.65
●Expected life of option: 4.61 years
●Share price at grant date: $20.48
●Expected price volatility of the Company's shares: 59.82%
●Expected dividend yield: 0.00%
●Risk-free interest rate: 3.19%
Expected price volatility was determined at the time of grant using the AutoCanada share price on a historical
basis, adjusted for any expected changes to future volatility due to publicly available information. It reflects the
assumption that the historical volatility is indicative of future trends, which may not necessarily be the actual
outcome.
Page 48 • AutoCanada
Used Digital Division equity issuance
Stock units ("Stock Units")
The Company awarded $7,500 Stock Units, that vested immediately, to a company controlled by the Executive
Chair as purchase consideration for the Used Digital Division Minority Interest on December 27, 2023 (Note 14,
35). The Stock Units are settled by way of the Company’s common shares purchased in the market. The Stock
Units are also entitled to earn additional units based on dividend payments made by the Company and the
share price on the date of payment. The number of Stock Units granted is determined based on the grant value
divided by the average of the closing prices of the Company's shares for the seven days after the closing date
of the purchase of the Used Digital Division Minority Interest. The Stock Units settle on the earlier of the third
anniversary of the grant date and the achievement of specific market price conditions.
During the year ended December 31, 2024, the Company awarded $nil (2023 - $7,500) and granted 328,617
Stock Units (2023 - nil). Share-based compensation expense for these awards was fully recognized in the
Annual Financial Statements for the year ended December 31, 2023.
Performance share units
During the year ended December 31, 2024, the Company awarded $nil PSUs (2023 - $6,331) and granted
277,408 PSUs (2023 - nil) under the existing share unit plan to dealership management as purchase
consideration for the Used Digital Division Minority Interest on December 27, 2023 (Note 14). The number of
PSUs granted is determined based on the grant value divided by the average of the closing prices of the
Company's shares for the seven days after the closing date of the purchase of the Used Digital Division Minority
Interest. The PSUs are entitled to earn additional units based on dividend payments made by the Company and
the achievement of specific non-market performance goals. The PSUs granted are scheduled to vest based on
the achievement of specific non-market performance goals over seven years and are conditional on continued
employment with the Company. The fair value of the PSUs granted is recognized as an expense over the period
in which the PSUs are expected to vest. The PSUs settle by way of common shares.
Share-based compensation expense for these awards was fully recognized in the Annual Financial Statements
for the year ended December 31, 2023.
Share-based compensation expense
Total expenses net of recoveries arising from share-based payment transactions recognized during the year
included in employee costs are as follows:
2024
$
2023
$
Restricted share units
762
544
Performance share units
802
—
Deferred share units
1,201
1,185
Stock options
1,111
847
Share appreciation rights
4,157
3,909
Share-based compensation
8,033
6,485
Used Digital Division equity issuance (Note 14)
—
36,725
Share-based compensation expense
8,033
43,210
Page 49 • AutoCanada
30 Share capital and equity
Common shares
Common shares of the Company are voting shares and have no par value. The authorized share capital is an
unlimited number of shares.
The following table shows the change in common shares held during the years ended:
December 31, 2024
December 31, 2023
Number of
common shares
$
Number of
common shares
$
Issued, beginning of the period
23,611,175
434,632
23,551,137
433,693
Exercised stock options (Note 29)
—
—
60,038
939
Shares repurchased and cancelled under the
Normal Course Issuer Bid
(460,942)
(8,486)
—
—
Issued, end of the period
23,150,233
426,146
23,611,175
434,632
Normal Course Issuer Bid
On March 6, 2024, the Company received approval from the TSX to commence a Normal Course Issuer Bid
("NCIB"). The NCIB commenced on March 11, 2024, and will terminate on the earlier of March 10, 2025, and the
date on which the maximum number of common shares that can be acquired pursuant to the NCIB have been
purchased. Under the NCIB, the Company is authorized to purchase, for cancellation up to 1,329,106 common
shares, representing approximately 5.6% of the 23,611,175 issued and outstanding common shares of the
Company as at March 6, 2024. The Company is limited under the NCIB to purchase no more than 12,118
common shares on any given day, subject to the block purchase exemptions under the TSX rules.
On March 27, 2024, in connection with the NCIB, the Company received approval from the TSX to implement an
automatic share purchase plan ("ASPP") with its designated broker to facilitate the purchase of shares under the
NCIB at times when the Company would ordinarily not be permitted to purchase its shares due to regulatory
restrictions or blackout periods. The ASPP will terminate on March 10, 2025, unless earlier terminated in
accordance with its terms. On August 15, 2024, the ASPP was terminated early in accordance with its terms.
During the year ended December 31, 2024, the Company repurchased and cancelled 460,942 common shares
(2023 - nil) under its NCIB for cash consideration of $9,937 net of transaction cost of $5 which were recorded in
share capital. The average share purchase price was $21.19, with prices ranging from $15.49 to $26.49.
Treasury shares
Shares are held in trust to mitigate the risk of future share price increases from the time the equity-settled
awards (Note 29) are granted to when they are fully vested and can be exercised. Under the Trust Agreement,
the third-party trustee will administer the distribution of shares to the beneficiaries upon vesting, as directed by
the Company. Dividends earned on the shares held in trust are reinvested to purchase additional shares. No
dividends were earned during the year ended December 31, 2024 (2023 - $nil). The shares held in trust are
accounted for as treasury shares and are recognized on a first-in-first-out basis upon issuance and presented
separately in the Consolidated Statements of Changes in Equity.
The following table shows the change in treasury shares held for the years ended:
December 31, 2024
December 31, 2023
Number of
treasury shares
$
Number of
treasury shares
$
Issued, beginning of the period
(12,465)
(319)
(48,667)
(672)
Treasury shares acquired
(68,003)
(1,625)
(1,808)
(47)
Treasury shares settled
71,926
1,629
38,010
400
Issued, end of the period
(8,542)
(315)
(12,465)
(319)
Page 50 • AutoCanada
Earnings per share
The following table shows the weighted-average number of shares outstanding and the effect of dilution on
earnings per share from continuing operations for the years ended:
2024
#
2023
#
Basic
23,316,008
23,561,236
Effect of dilution from equity forward
214,757
160,807
Effect of dilution from RSUs
3,121
66,543
Effect of dilution from stock options
588,965
662,095
Effect of dilution from PSUs
14,218
—
Diluted
24,137,069
24,450,681
Options are dilutive at the level of net income from continuing operations and have been treated as dilutive for
the purpose of diluted earnings per share. The diluted net loss per share is lower than basic net loss per share
due to the impact of net loss on discontinued operations.
31 Capital disclosures
The Company’s objective when managing its capital is to safeguard the Company’s assets and its ability to
continue as a going concern while at the same time maximizing the growth of the business, returns to
shareholders, and benefits for other stakeholders. The Company views its capital as the combination of long-
term indebtedness and equity.
The calculation of the Company’s capital is summarized below:
December 31,
2024
$
December 31,
2023
$
Long-term indebtedness (Note 23)
517,543
562,178
Equity
495,328
564,829
1,012,871
1,127,007
The Company manages its capital structure in accordance with changes in economic conditions and the risk
characteristics of the underlying assets. In order to maintain or adjust its capital structure, the Company may
assume additional debt, refinance existing debt with different characteristics, sell assets to reduce debt, issue
or repurchase shares, or adjust the amount of dividends paid to its shareholders.
Gross lease adjusted indebtedness
Gross lease adjusted indebtedness is one measure used by management to evaluate the leverage of the
Company. Gross lease adjusted indebtedness is calculated as total indebtedness, adjusted for embedded
derivative, plus lease liabilities, as follows:
December 31,
2024
$
December 31,
2023
$
Total indebtedness (Note 23)
541,651
562,922
Lease liabilities (Note 24)
457,172
497,424
Gross lease adjusted indebtedness
998,823
1,060,346
Page 51 • AutoCanada
32 Financial instruments
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the
basis of measurement and the basis on which income and expenses are recognized, in respect of each class of
financial asset and financial liability, are disclosed in the significant accounting policies (Note 3). The
Company’s financial assets are measured at amortized cost. The Company’s financial liabilities are measured at
amortized cost except for redemption liabilities and non-hedged interest swap agreements, which are carried
at fair value through profit or loss. The carrying values of financial instruments approximate their fair values,
excluding the senior unsecured notes. The fair value of the senior unsecured notes is $326,596 (2023 -
$315,875).
Financial risk management objectives
The Company’s activities are exposed to a variety of financial risks of varying degrees of significance, which
could affect the Company’s ability to achieve its strategic objectives. AutoCanada’s overall risk management
program focuses on the unpredictability of financial and economic markets and seeks to reduce potential
adverse effects on the Company’s financial performance. Risk management is carried out by financial
management in conjunction with overall corporate governance. The principal financial risks to which the
Company is exposed are described below.
Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in foreign currency and interest rates.
Foreign currency risk
The Company has operations in Canada and the United States. Foreign exchange risk arises from future
commercial transactions and recognized assets and liabilities denominated in a currency that is not the
functional currency of the relevant entity. The Company is exposed to foreign exchange risk because its
Canadian and U.S. operations engage in transactions denominated in a currency other than their respective
functional currency. Risk arises as a result of specific transfers associated with working capital between
Canadian and U.S. operations as well as wholesale used vehicle transactions where Canadian operations will
participate in disciplined cross-border sales when arbitrage opportunities are present.
The Company's exposure to foreign currency risk at the end of the reporting period, expressed in Canadian
dollars is as follows:
2024
$
2023
$
USD
USD
Cash
7,915
7,381
Trade and other receivables
4,196
2,562
Derivative financial instruments (Note 25)
(1,741)
2,112
Trade and other payables
(462)
(389)
2024
$
2023
$
Net foreign currency exchange (losses) gains included in revenue
(6,145)
1,339
Net foreign currency exchange gains (losses) included in other gains (losses), net
849
(321)
Total net foreign exchange (losses) gains included in income for the year before
income tax from continuing operations
(5,296)
1,018
Impact on
post-tax profit
Impact on
post-tax profit
2024
$
2023
$
USD/CAD exchange rate - increase 10% (2023 - 5%)
1,339
351
USD/CAD exchange rate - decrease 10% (2023 - 5%)
(1,339)
(351)
Page 52 • AutoCanada
Interest rate risk
The Company’s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity
risk management section herein, the indebtedness note (Note 23), the assets and liabilities held for sale note
(Note 17) and the derivative financial instruments note (Note 25).
+/- 200 Basis Point
+/- 100 Basis Point
2024
$
2023
$
2024
$
2023
$
Finance costs
19,837
21,947
9,918
10,974
Finance income
54
66
27
33
Embedded derivative
The early redemption embedded derivative asset on the new issuance notes (Note 23) is subject to interest rate
risk in the form of impacting the fair market valuation of the embedded derivative recorded. There is no change
in fair value based on +/-200 basis or +/-100 basis point change.
Credit risk
The Company’s exposure to credit risk associated with its accounts receivable is the risk that a customer will be
unable to pay amounts due to the Company. The concentration of credit risk with respect to contracts-in-transit
and accounts receivable is limited primarily to automobile manufacturers and financial institutions. Credit risk
arising from receivables with commercial customers is not significant due to the large number of customers
dispersed across various geographic locations comprising the Company's customer base. Details of the aging
of the Company’s trade and other receivables are disclosed in the table below.
The Company applies the simplified approach to measuring expected credit losses, which uses a lifetime
expected credit loss allowance for all trade receivables. The expected loss rates are based on the payment
profiles of sales over the 12-month periods prior to December 31, 2024 and December 31, 2023 and the
corresponding historical credit losses experienced within these periods.
The loss allowance for trade and other receivables as at December 31, 2024 and December 31, 2023 was
determined as follows:
December 31, 2024
December 31, 2023
Expected
loss rate
%
Gross carrying
amount - Trade
receivables
$
Expected
loss
allowance
(Note 15)
$
Expected
loss rate
%
Gross carrying
amount - Trade
receivables
$
Expected
loss
allowance
(Note 15)
$
Current
0.01
151,828
10
0.01
165,539
12
31 - 60 days
0.65
12,264
80
1.24
23,295
290
61 - 90 days
7.20
4,805
346
5.53
13,029
721
91 - 120 days
15.37
2,429
373
7.22
5,288
382
> 120 days
27.23
4,192
1,141
10.14
18,173
1,843
Total
175,518
1,950
225,324
3,248
The closing loss allowance for trade receivables reconciles to the opening loss allowance as follows:
2024
$
2023
$
Balance, January 1
3,248
1,706
Loan loss (recovery) allowance recognized in profit or loss during the year
(262)
3,614
Receivables written off during the year
(1,036)
(2,072)
Balance, December 31
1,950
3,248
During the year ended December 31, 2024, net impairment losses on trade and other receivables includes a
write-down of $7,592 (2023 - $nil) for the Wholesale transactions at Capital Chrysler (Note 28).
Page 53 • AutoCanada
The amounts disclosed on the Consolidated Statements of Financial Position for accounts receivable are net of
the expected loss allowance, details of which are disclosed in Note 15. When a trade and other receivable is
uncollectible, it is written off against the allowance account for trade and other receivables. Subsequent
recoveries of amounts previously written off are credited against operating expenses in the Consolidated
Statements of Comprehensive (Loss) Income.
Concentration of cash exists due to the significant amount of cash held with a Canadian financial institution.
The syndicated revolving floorplan facility (Note 23) allows the Company's dealerships to hold excess cash
(used to satisfy working capital requirements of the Company's various Original Equipment Manufacturer
("OEM") partners) in an account with the financial institution which bears interest at 4.899% at December 31,
2024 (2023 - 6.397%). These cash balances are fully accessible by the Company's dealerships at any time;
however, in the event of a default by a dealership in its floorplan obligation; the cash may be used to offset
unpaid balances under the facility. As a result, there is a concentration of cash balances risk to the Company in
the event of a default under the facility.
Liquidity risk
Liquidity risk is the risk that the Company is not able to meet its financial obligations as they become due or can
do so only at excessive cost. The Company’s activity is financed through a combination of the cash flows from
operations, borrowing under existing credit facilities, other debt, and the issuance of equity. Prudent liquidity
risk management implies maintaining sufficient cash and the availability of funding through adequate amounts
of committed credit facilities. One of management’s primary goals is to maintain an optimal level of liquidity
through the active management of assets and liabilities as well as cash flows.
As at December 31, 2024, the Company’s liquidity consists of $67,343 in cash on hand, and $218,069 available
to borrow under the Company’s revolving term facilities. The Company monitors for compliance with bank
covenants under these facilities which are used to manage capital requirements and other operational
activities. The Company's ability to borrow under these credit facilities requires it to comply with its financial
covenants. In order to advance under these credit facilities, no material adverse change shall have occurred
and no circumstances shall exist that could reasonably be expected to cause a material adverse effect on the
Company. As disclosed in Note 23, the Company was in compliance with all covenants as at December 31,
2024. Under the amended and extended credit facility, the Company is required to comply with the following
covenants at the end of each quarter:
Financial Covenants
Requirement
Q4 2024
Q1 2025
Q2 2025
Q3 2025
Q4 2025
Total Net Funded Debt to
Bank EBITDA Ratio
Shall not exceed
7.50
7.50
5.50
4.50
4.00
Fixed Charge Coverage
Ratio
Shall not be less than
1.00
1.00
1.20
1.20
1.20
During the year ended December 31, 2024, the Company had a comprehensive loss of $(58,871) (2023 -
$61,612) and cash flows from operations of $31,626 (2023 - $119,534). The Company is actively managing an
increased liquidity risk as a result of the current financial performance. In addition, the decline in market
capitalization of the Company when compared to the book value of the net assets at December 31, 2024 (which
has been identified as an impairment indicator (Note 20)) may impact the ability to raise additional capital in the
future.
Given the Company’s increased risk of non-compliance with the Total Net Funded Debt to Bank EBITDA Ratio
covenant, management is required to consider whether these conditions give rise to substantial doubt about
the Company’s ability to meet its obligations within one year from the balance sheet date, and if so, whether
management’s plans to negate these conditions will alleviate the increased liquidity risk and going concern risk.
As explained in Note 23, the Company amended its syndicated credit agreement to: i) increase the Company's
maximum permitted Total Net Funded Debt to EBITDA Ratio and decrease the Company's maximum permitted
Fixed Charge Coverage Ratio; and ii) include add-backs of up to $35,000 for specific one-time expenses,
including $20,000 USD provisioned for FTC settlement expenses (Note 28), in the definition of EBITDA, to
address the increased risk of non-compliance with covenants associated with the revolving term facilities.
At this time, the Company’s ability to comply with its financial covenants in the next twelve months is
dependent on continued agreement with the Company’s lenders, accelerating initiatives to improve
profitability, suspending mergers and acquisitions and capital return initiatives, freezing discretionary
spending, and actively reviewing strategic alternatives for non-core and underperforming assets. It is the
Company’s view that those efforts will be successful, however this is an area of significant judgment that is
reliant on the outcomes of those efforts and there are no assurances that those efforts will be successful.
Page 54 • AutoCanada
The following tables detail the Company’s remaining contractual maturity for its financial liabilities. The
amounts below have been determined based on the undiscounted contractual maturities of the financial
liabilities. For contractual interest payable, the cash flows have been estimated using the interest rates
applicable as at December 31, 2024.
2025
$
2026
$
2027
$
2028
$
2029
$
Thereafter
$
Total
$
December 31, 2024
Trade and other payables
177,473
—
—
—
—
—
177,473
Revolving floorplan
facilities
1,010,579
—
—
—
—
—
1,010,579
Vehicle repurchase
obligations
3,705
—
—
—
—
—
3,705
Indebtedness
1,688
2,195
158,619
1,688
351,688
31,664
547,542
Contractual interest
payable
32,261
32,147
25,494
22,427
4,744
20,095
137,168
Lease liabilities
57,251
56,640
55,746
54,995
59,691
462,045
746,368
Derivative financial
instruments
4,427
2,573
1,238
1,231
763
213
10,445
1,287,384
93,555
241,097
80,341
416,886
514,017 2,633,280
2024
$
2025
$
2026
$
2027
$
2028
$
Thereafter
$
Total
$
December 31, 2023
Trade and other payables
238,427
—
—
—
—
—
238,427
Revolving floorplan
facilities
1,174,595
—
—
—
—
—
1,174,595
Vehicle repurchase
obligations
1,982
—
—
—
—
—
1,982
Indebtedness
744
744
187,744
744
744
377,515
568,235
Contractual interest
payable
35,787
35,675
26,059
22,087
21,975
16,890
158,473
Lease liabilities
62,532
59,613
55,793
54,780
38,099
544,512
815,329
Derivative financial
instruments
739
740
740
—
—
—
2,219
1,514,806
96,772
270,336
77,611
60,818
938,917 2,959,260
33 Fair value of financial instruments
The Company’s financial instruments as at December 31, 2024 are represented by cash, trade and other
receivables, other assets, trade and other payables, other liabilities, revolving floorplan facilities, vehicle
repurchase obligations, indebtedness, an embedded derivative, redemption liabilities, and derivative financial
instruments.
The fair values of cash, trade and other receivables, trade and other payables, other liabilities and revolving
floorplan facilities approximate their carrying values due to their short-term nature.
The call option included in other assets (Level 3) is remeasured at fair value each reporting period with the gain
or loss being recognized through profit or loss (Note 14). The fair value of the call option is calculated based on
the equity value of the related subsidiary using the DCF method.
The indebtedness has a carrying value that approximates the fair value due to the floating rate nature of the
debt. While there is a portion that has a fixed rate, the indebtedness has a carrying value that is not materially
different from its fair value.
The embedded derivative (Level 2) included within indebtedness (Note 23) is carried at fair value using the Hull
White pricing model.
Page 55 • AutoCanada
Derivative financial instruments are made up of interest rate swap agreements and foreign exchange forward
contracts (Level 2). The fair value of both instruments are calculated as the present value of the future cash
flows. Both contractually agreed payments and forward rates are used to calculate the cash flows, which are
then discounted on the basis of a yield curve that is observable in the market.
Redemption liabilities (Level 3) are remeasured at fair value each reporting period with the gain or loss being
recognized through profit or loss (Note 14). Fair value of the 15154871 Canada Inc. redemption liability is
calculated based on the enterprise value of the related subsidiary using the DCF method. Fair value of the other
redemption liabilities are calculated based on an applicable multiple in the range of 5.0 to 8.0 times (2023 - 5.0
to 7.9 times) applied to projected EBITDA.
The fair value was determined based on the prevailing and comparable market interest rates.
The fair value hierarchy categorizes fair value measurements into three levels based on the inputs to valuation
technique, which are defined as follows:
●Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities
●Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly (that is, as prices) or indirectly (that is, derived from prices).
●Level 3 – Inputs for the asset or liability that are not based on observable market data (that is,
unobservable inputs).
There were no transfers between the levels of the fair value hierarchy during the year.
34 Dealership divestitures
Ponoka Chrysler Dodge Jeep Ram
On September 10, 2024, the Company sold substantially all of the operating assets of Ponoka Chrysler Dodge
Jeep Ram, located in Ponoka, Alberta, for cash consideration. Gross proceeds of $8,647 resulted in a pre-tax
gain on divestiture of $25, included in gain on disposal of assets in the Consolidated Statements of
Comprehensive (Loss) Income.
Airdrie Chrysler Dodge Jeep Ram
On September 10, 2024, the Company sold substantially all of the operating assets of Airdrie Chrysler Dodge
Jeep Ram, located in Airdrie, Alberta, for cash consideration. Gross proceeds of $24,564 resulted in a pre-tax
loss on divestiture of $758, included in gain on disposal of assets in the Consolidated Statements of
Comprehensive (Loss) Income.
Okanagan Chrysler Dodge Jeep Ram
On November 18, 2024, the Company sold substantially all of the operating assets of Okanagan Chrysler Dodge
Jeep Ram, located in Kelowna, British Columbia, for cash consideration. Gross proceeds of $26,286 resulted in
a pre-tax gain on divestiture of $7,546, included in gain on disposal of assets in the Consolidated Statements of
Comprehensive (Loss) Income.
Page 56 • AutoCanada
The dealership divestitures completed during the year ended December 31, 2024 are summarized as follows:
Ponoka
Chrysler
Dodge Jeep
Ram
$
Airdrie
Chrysler
Dodge Jeep
Ram
$
Okanagan
Chrysler
Dodge Jeep
Ram
$
Total
$
Account receivables
—
—
134
134
Inventories
6,306
14,723
16,419
37,448
Property and equipment
131
288
204
623
Other current assets
1
71
286
358
Intangible assets
2,345
10,414
1,726
14,485
Total assets
8,783
25,496
18,769
53,048
Trade and other payables
161
174
29
364
Total liabilities
161
174
29
364
Net assets disposed
8,622
25,322
18,740
52,684
Net proceeds on divestiture
8,647
24,564
26,286
59,497
Net pre-tax gain (loss) on divestiture
25
(758)
7,546
6,813
35 Related party transactions
Transactions with related parties
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; and
●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 is as
follows:
2024
$
2023
$
Administrative and other support and transportation fees
1,697
1,566
Vehicle purchases from related parties
162
—
Vehicle sales to related parties
2,387
1,755
Used Digital Division
During the year ended December 31, 2024, the Company made cash payments of $22,500 to a company
controlled by the Executive Chair for amounts owing for the purchase of the 15% common interest in the Used
Digital Division Minority Interest on December 27, 2023 (Note 14). The agreement requires $15,000 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. Cash is advanced to the company
controlled by the Executive Chair upon request with excess cash not used to purchase the Company's common
shares returned to the Company until the agreement expires. The company controlled by the Executive Chair
purchased 701,253 of the Company's common shares with the cash advanced.
As at December 31, 2024, the Company has $nil (December 31, 2023 - $22,500) recorded in accruals and
provisions within trade and other payables for amounts owing to the Executive Chair related to the purchase of
the Used Digital Division Minority Interest.
Page 57 • AutoCanada
Key management personnel compensation
Key management personnel consists of the Company's executive officers and directors. Key management
personnel compensation is as follows:
2024
$
2023
$
Employee costs (including Directors)
4,153
6,597
Termination benefits
2,503
—
Short-term employee benefits
197
198
Used Digital Division equity issuance
—
28,950
Share-based compensation
3,458
4,503
10,311
40,248
36 Net change in non-cash working capital
The following table summarizes the net decrease in cash due to changes in non-cash working capital for the
years ended:
December 31,
2024
$
December 31,
2023
$
Trade and other receivables
22,758
(6,640)
Inventories
54,071
(175,899)
Other current assets
2,806
(5,206)
Trade and other payables
17,739
(270)
Revolving floorplan facilities
(94,308)
184,981
Other liabilities
(1,741)
(518)
Net change in non-cash working capital
1,325
(3,552)
Factors that can affect these items include seasonal sales trends, strategic decisions regarding inventory levels,
the addition of new dealerships, and the day of the week on which period-end cut-off occurs.
37 Segmented reporting
During the year ended December 31, 2024, the Executive Chair served as the function of the Chief Operating
Decision Maker ("CODM"). The Executive Chair is responsible for allocating resources and assessing the
performance of the following segments: Canadian Operations and U.S. Operations.
Each reportable operating segment is comprised of retail automobile dealerships and related businesses. As at
December 31, 2024, the results of the Company's retail automobile dealership in its U.S. Operations have been
presented as a discontinued operation (Note 18).
Transactions between reportable segments are accounted for in accordance with the accounting policies
described in the summary of significant accounting policies.
AutoCanada's corporate office has been included with the Canadian Operations segment, as it is located in
Canada.
Page 58 • AutoCanada
The CODM measures the performance of each operating segment based on operating profit. The segmented
information is set out in the following tables:
Year ended December 31, 2024
Year ended December 31, 2023
Revised (1)
Canada
$
U.S.
$
Total
$
Canada
$
U.S.
$
Total
$
Revenue
Total revenue
5,351,672
747,300
6,098,972
5,607,194
829,609 6,436,803
Revenue from discontinued
operation (Note 18)
—
(747,300)
(747,300)
—
(829,609) (829,609)
Revenue from continuing
operations
5,351,672
—
5,351,672
5,607,194
— 5,607,194
1 Comparative period revised to reflect current period presentation. See Note 18 Discontinued operation for additional
information.
Year ended December 31,
2024
Year ended December 31,
2023
Revised (1)
Canada
$
U.S.
$
Total
$
Canada
$
U.S.
$
Total
$
Gross profit
882,277
102,359
984,636
977,662
144,125
1,121,787
Operating expenses (Note 8)
(735,312)
(151,143) (886,455)
(777,159)
(135,521) (912,680)
Operating profit (loss) before other income
146,965
(48,784)
98,181
200,503
8,604
209,107
Lease and other income, net (Note 10)
7,850
1,532
9,382
12,775
381
13,156
Gain on disposal of assets, net (Note 10)
29,781
—
29,781
442
(20)
422
Expected credit losses on trade and other
receivables
(8,737)
—
(8,737)
(2,230)
(353)
(2,583)
(Impairment) recoveries of non-financial assets
(Note 20, 24)
(4,542)
(11,393)
(15,935)
3,538
—
3,538
Impairment loss recognized on remeasurement
to fair value less cost to dispose
—
(5,123)
(5,123)
—
—
—
Operating profit (loss)
171,317
(63,768)
107,549 1 215,028
8,612
223,640
Finance costs (Note 11)
(129,678)
(25,920) (155,598) (123,020)
(22,919) (145,939)
Finance income (Note 11)
2,674
—
2,674
3,346
—
3,346
(Loss) gain on redemption liabilities (Note 14)
(486)
—
(486)
3,639
—
3,639
Other gains (losses), net
846
—
846
(321)
—
(321)
Income (loss) for the period before taxation
44,673
(89,688)
(45,015)
98,672
(14,307)
84,365
Loss for the period before taxation from
discontinued operation (Note 18)
—
89,688
89,688
—
14,307
14,307
Income for the period before taxation from
continuing operations
44,673
—
44,673
98,672
—
98,672
1 Comparative period revised to reflect current period presentation. See Note 18 Discontinued operation for additional
information.
Page 59 • AutoCanada
As at December 31, 2024
As at December 31, 2023
Canada
$
U.S.
$
Total
$
Canada
$
U.S.
$
Total
$
Assets held for sale (Note 17, 18)
6,658
326,035
332,693
22,152
—
22,152
Segment assets
2,672,660
333,168 3,005,828
2,834,012
325,427 3,159,439
Capital expenditures and
acquisition of real estate (Note 19)
25,154
2,664
27,818
61,556
9,158
70,714
Liabilities held for sale (Note 18)
—
201,966
201,966
—
—
—
Segment liabilities
1,906,801
603,699 2,510,500
2,098,703 495,907 2,594,610
Disaggregation of revenue
The significant majority of the Company's revenue is from contracts with customers. Taxes assessed by
governmental authorities that are directly imposed on revenue transactions are excluded from revenue. In the
following table, revenue is disaggregated by major lines of goods and services and timing of transfer of goods
and services. The Company has determined that these categories depict how the nature, amount, timing, and
uncertainty of its revenue and cash flows are affected by economic factors. The table below also includes a
reconciliation of the disaggregated revenue with the Company's reportable segments:
As at December 31, 2024
As at December 31, 2023
Revised (1)
Canada
$
U.S.
$
Total
$
Canada
$
U.S.
$
Total
$
New vehicles
2,306,112
352,832 2,658,944 2,242,329
311,898
2,554,227
Used vehicles
2,054,855
254,932 2,309,787 2,360,703
365,773
2,726,476
Parts and service
556,297
101,955
658,252
565,571
100,632
666,203
Collision repair
130,913
37,581
168,494
116,123
—
116,123
Finance, insurance and other
303,495
—
303,495
322,468
51,306
373,774
Revenue
5,351,672
747,300 6,098,972 5,607,194
829,609
6,436,803
Revenue from discontinued
operation (Note 18)
— (747,300)
(747,300)
—
(829,609)
(829,609)
Revenue from continuing
operations
5,351,672
—
5,351,672 5,607,194
—
5,607,194
1 Comparative period revised to reflect current period presentation. See Note 18 Discontinued operation for additional
information.
38 Subsequent events
Civil investigation
On January 8, 2025, the Company paid $28,856 ($20,000 USD) to the FTC and the State of Illinois in monetary
relief, with no civil penalties (Note 28).
Termination of Volvo franchise
On February 14, 2025, the Company terminated its Volvo franchise at Bloomington/Normal Auto Mall, located in
Illinois, for cash consideration of $894. The Volvo franchise was presented as assets held for sale in the U.S.
Operations segment, which was presented as a discontinued operation, as at December 31, 2024.
Closure of RightRide division
On March 4, 2025, the Company closed all remaining locations within the RightRide division, which are
included within the Canadian Operations segment. This decision is part of a larger strategic shift to optimize
operations and reduce leverage.
Page 60 • AutoCanada
Termination of loan agreement with a subsidiary
On March 7, 2025, the Company terminated an agreement with a subsidiary within the Canadian Operations
segment, which impacts the contractual rights over the subsidiary. The termination agreement requires the
counterparty to pay the Company $14,502 for repayment of loans in addition to $15,605 for accrued interest,
accrued royalty fees, and a termination fee. The Company is still assessing the impact of the termination of this
agreement.
Page 61 • AutoCanada
AutoCanada Inc.
200 - 15511 123 Avenue NW
Edmonton, AB • T5V 0C3 www.autocan.ca