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AutoNation Reports 2008 Fourth Quarter and Full Year Results
- In the fourth quarter, AutoNation remained profitable in distressed industry environment - AutoNation exceeds cost savings objectives by 100%, with an annualized reduction now of $200 million - Full year debt reduction of approximately three-quarters of a billion dollars - Announces manufacturer consent agreements relating to largest stockholder, ESL Investments, Inc.
FORT LAUDERDALE, Fla., Jan 29, 2009 /PRNewswire-FirstCall via COMTEX/ -- AutoNation, Inc. (NYSE: AN), America's largest automotive retailer, today reported 2008 fourth quarter net income from continuing operations of $70 million, or $0.40 per share, compared to $51 million, or $0.28 per share, in the prior year. In the quarter, the Company had a net benefit from certain items of $48 million or $0.28 per share, including a net positive tax adjustment of $0.18 per share and a gain on the repurchase of the Company's senior notes of $0.14 per share. Additionally, other items had an unfavorable impact of $0.04 per share. After adjusting for these items as disclosed in the attached financial tables, net income from continuing operations for the 2008 fourth quarter was $22 million or $0.12 per share.

Fourth quarter 2008 revenue totaled $2.7 billion, compared to $4.1 billion in the year-ago period, driven primarily by lower vehicle sales. In the fourth quarter, total U.S. industry new vehicle retail unit sales declined 49%, based on CNW Research data. In comparison, in the fourth quarter AutoNation's new vehicle unit sales declined 40%.

Commenting on the fourth quarter, Mike Jackson, Chairman and Chief Executive Officer, said, "The fourth quarter was negatively impacted by the credit panic triggered on September 15 by the bankruptcy of Lehman Brothers. Automotive retail sales collapsed from one day to the next as credit for our customers was withdrawn from the market. This panic continued to erode consumer confidence and accelerated the decline in the U.S. economy and auto retail market. In the fourth quarter, AutoNation continued to remain profitable even with a U.S. SAAR near 10 million new vehicle units, a 27 year low." Jackson also stated, "When we saw the auto retail market deteriorate in the beginning of 2008, AutoNation began to identify cost reduction opportunities. In July we announced our plan to reduce cost by $100 million on an annual run rate basis and have successfully achieved this goal - a significant accomplishment in its own right. With the collapse of sales in the second half of September, additional actions became necessary in the fourth quarter to further reduce costs. We have successfully implemented additional cost reduction actions totaling approximately $100 million on an annualized run rate basis. Taken together, AutoNation's total annualized cost savings of $200 million demonstrates our Company's ability to effectively address the challenges created by the credit panic."

Jackson added, "Despite the severely depressed sales environment, AutoNation continues to generate solid cash flow which allowed the Company to reduce its non-vehicle debt by $155 million during the quarter and close the fourth quarter with a strong cash position of $110 million. Full-year debt reduction totals approximately three-quarters of a billion dollars, consisting of $517 million of non-vehicle debt and $195 million of vehicle floor plan debt. As a result, the Company remained in compliance with all financial covenants in its debt agreements as of December 31, 2008 with a leverage ratio of 2.45 versus 2.78 a year ago."

Looking forward, Jackson also stated, "We agree with industry projections that the 2009 SAAR will be in the range of 11 million new vehicle units with obvious weakness in the first half of the year. In this environment, we believe we will be able to manage within all financial covenants."

AutoNation provides additional detail on its three operating segments: Domestic, Import, and Premium Luxury. The Domestic segment is comprised of stores that sell vehicles manufactured by General Motors, Ford, and Chrysler; the Import segment is comprised of stores that sell vehicles manufactured primarily by Toyota, Honda, and Nissan; and the Premium Luxury segment is comprised of stores that sell vehicles manufactured primarily by Mercedes, BMW, and Lexus.

Segment Results for the Quarter

-- Domestic -Domestic segment income (1) was $14 million compared to year-ago segment income of $36 million. Fourth quarter Domestic retail new vehicle unit sales declined 44%. In comparison, U.S. industry Domestic retail new vehicle unit sales declined 52% according to CNW Research.

-- Import -Import segment income was $20 million compared to year-ago segment income of $52 million. Fourth quarter Import retail new vehicle unit sales declined 39%. In comparison, U.S. industry Import new vehicle retail unit sales declined 44% according to CNW Research.

-- Premium Luxury -Premium Luxury segment income was $39 million compared to year-ago segment income of $59 million. Fourth quarter Premium Luxury retail new vehicle unit sales declined 35%. In comparison, U.S. industry Premium Luxury retail new vehicle unit sales declined 34% according to CNW Research.

(1) Segment income is defined as operating income less floor plan interest expense

For the full year ended December 31, 2008, the Company reported net loss from continuing operations of $1.23 billion or $6.89 per share, compared to net income from continuing operations of $289 million or $1.44 per share in the prior year. After adjusting for the impairment charges and certain other items as disclosed in the attached financial tables, net income from continuing operations for the full year ended December 31, 2008 was $181 million or $1.02 per share, compared to $277 million or $1.38 per share in the prior year. The Company's revenue for the year ended December 31, 2008 totaled $14.1 billion, down 19% compared to $17.3 billion in the prior year.

Manufacturer Consent Agreements Relating to Largest Stockholder, ESL Investments, Inc.

The Company also announced that it has obtained consents under its framework agreements with manufacturers in order to eliminate any potentially adverse consequences under such agreements in the event that ESL Investments, Inc. (with its affiliates, "ESL"), the Company's largest stockholder, were to acquire over 50% of the Company's common stock. ESL currently owns approximately 45% of the Company's outstanding common stock.

"ESL has been a long-term significant stockholder of the Company," said Mike Jackson. "We are pleased to have entered into the manufacturer consents that provide the flexibility for ESL to increase its economic stake in the Company without triggering any potentially adverse consequences under the framework agreements, while also providing for appropriate governance arrangements, including a commitment to maintain an independent Board of Directors. We appreciate ESL's belief in the Company and its management over the past nine years and look forward to ESL's continued involvement in helping us to build a great company and drive long-term stockholder value."

The consents contain various terms and conditions, including that should ESL's percentage ownership of Company common stock exceed 50%, ESL would vote its shares owned above 50% in the same proportion as shares unaffiliated with ESL are actually voted and that a majority of AutoNation's directors shall be independent of AutoNation and ESL. In addition, pursuant to a separate agreement between AutoNation and ESL (the "ESL Voting Agreement"), ESL agreed to further limit its vote to 45%, with shares owned by ESL in excess of 45% voted in the same proportion as shares unaffiliated with ESL are actually voted. The ESL Voting Agreement expires in one year, unless extended by mutual agreement of the parties. Additional details are included in the Current Report on Form 8-K filed with the Securities and Exchange Commission today.

The fourth quarter conference call may be accessed at 11:00 a.m. Eastern Time today by phone at 888-769-8515 (pass code: AutoNation) or via the Internet (audio webcast) at http://www.AutoNation.com by clicking on the "About Us" link then clicking on "Investors" and then "Webcasts." A playback of the conference call will be available after 12:00 (noon) p.m. Eastern Time January 29, 2009 through February 5, 2009 by calling 800-867-1926 (pass code: 75300).

About AutoNation, Inc.

AutoNation, Inc., headquartered in Fort Lauderdale, Fla., is America's largest automotive retailer and has been named America's Most Admired Automotive Retailer by FORTUNE Magazine in five of the last seven years. A component of the Standard and Poor's 500 Index, AutoNation owns and operates 302 new vehicle franchises in 15 states. For additional information, please visit http://corp.AutoNation.com or www.AutoNation.com, where more than 80,000 vehicles are available for sale along with AutoNation's E-Vehicle program.

FORWARD LOOKING STATEMENTS

Certain statements and information included in this release constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied in such forward-looking statements. Additional discussion of factors that could cause actual results to differ materially from management's projections, estimates and expectations is contained in the Company's SEC filings. The Company undertakes no duty to update its forward-looking statements.

NON-GAAP FINANCIAL MEASURES

This press release and the attached financial tables contain certain non-GAAP financial measures as defined under SEC rules, such as net income and diluted earnings per share from continuing operations, adjusted in each case to exclude certain items disclosed in the attached financial tables. As required by SEC rules, the Company has provided reconciliations of these measures to the most directly comparable GAAP measures, which are set forth in the attachments to this release. The Company believes that each of the foregoing non-GAAP financial measures improves the transparency of the Company's disclosure, provides a meaningful presentation of the Company's results from its core business operations excluding the impact of items not related to the Company's ongoing core business operations, and improves the period-to-period comparability of the Company's results from its core business operations.



                                AUTONATION, INC.
                UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENTS
                      ($ in millions, except per share data)

                                     Three Months Ended  Twelve Months Ended
                                        December 31,         December 31,
                                       2008      2007      2008       2007

       Revenue:
         New vehicle                 $1,426.7  $2,409.1   $7,756.2  $10,014.3
         Used vehicle                   640.9     950.6    3,364.5    4,139.9
         Parts and service              571.6     623.3    2,465.2    2,539.9
         Finance and insurance, net      84.1     139.6      482.6      584.3
         Other                           13.6      17.1       63.4       68.1
       Total revenue                  2,736.9   4,139.7   14,131.9   17,346.5

       Cost of sales:
         New vehicle                  1,334.2   2,239.4    7,245.3    9,305.2
         Used vehicle                   593.4     878.5    3,086.1    3,787.9
         Parts and service              323.0     353.2    1,393.4    1,431.1
         Other                            5.5       7.8       27.6       29.0
       Total cost of sales            2,256.1   3,478.9   11,752.4   14,553.2

       Gross profit                     480.8     660.8    2,379.5    2,793.3

       Selling, general and
        administrative expenses         384.2     486.1    1,813.8    1,999.8
       Depreciation and amortization     22.4      26.3       90.8       90.3
       Goodwill impairment                -         -      1,610.0        -
       Franchise rights impairment        -         1.2      146.5        2.2
       Other expenses (income), net      10.0      (1.0)      13.2       (0.4)

       Operating income (loss)           64.2     148.2   (1,294.8)     701.4

       Floorplan interest expense       (21.4)    (32.6)     (87.4)    (129.0)
       Other interest expense           (20.1)    (31.7)     (89.4)    (114.1)
       Gain on senior note
        repurchases                      39.2       -         51.3        -
       Interest income                    0.7       0.8        2.2        3.4
       Other losses, net                 (1.8)     (1.6)      (4.6)      (1.3)

       Income (loss) from continuing
        operations before income
        taxes                            60.8      83.1   (1,422.7)     460.4

       Income tax provision
        (benefit)                        (9.3)     32.5     (197.3)     171.7

       Net income (loss) from
        continuing operations            70.1      50.6   (1,225.4)     288.7

       Income (loss) from
        discontinued operations, net
        of income taxes                  (3.0)      1.1      (17.7)     (10.0)


       Net income (loss)                $67.1     $51.7  $(1,243.1)    $278.7


       Diluted earnings (loss) per
        share:
         Continuing operations          $0.40     $0.28     $(6.89)     $1.44
         Discontinued operations       $(0.02)    $0.01     $(0.10)    $(0.05)

         Net income (loss)              $0.38     $0.28     $(6.99)     $1.39


       Weighted average common
        shares outstanding              176.8     183.5      177.8      200.0

       Common shares outstanding,
        net of treasury stock, at
        December 31                     176.9     180.4      176.9      180.4



                                 AUTONATION, INC.
                           UNAUDITED SUPPLEMENTARY DATA
                     ($ in millions, except per vehicle data)

            Operating Highlights           Three Months Ended December 31,

                                                                 $        %
                                           2008      2007    Variance Variance

    Revenue:
      New vehicle                        $1,426.7  $2,409.1    $(982.4) (40.8)
        Retail used vehicle                 557.9     758.8     (200.9) (26.5)
        Wholesale                            83.0     191.8     (108.8) (56.7)
      Used vehicle                          640.9     950.6     (309.7) (32.6)
      Parts and service                     571.6     623.3      (51.7)  (8.3)
      Finance and insurance, net             84.1     139.6      (55.5) (39.8)
      Other                                  13.6      17.1       (3.5)
    Total revenue                        $2,736.9  $4,139.7  $(1,402.8) (33.9)


    Gross profit:
      New vehicle                           $92.5    $169.7     $(77.2) (45.5)
        Retail used vehicle                  52.0      73.9      (21.9) (29.6)
        Wholesale                            (4.5)     (1.8)      (2.7)
      Used vehicle                           47.5      72.1      (24.6) (34.1)
      Parts and service                     248.6     270.1      (21.5)  (8.0)
      Finance and insurance                  84.1     139.6      (55.5) (39.8)
      Other                                   8.1       9.3       (1.2)
    Total gross profit                      480.8     660.8     (180.0) (27.2)

    Selling, general and administrative
     expenses                               384.2     486.1      101.9   21.0

    Depreciation and amortization            22.4      26.3        3.9
    Goodwill impairment                       -         -          -
    Franchise rights impairment               -         1.2        1.2
    Other expenses (income), net             10.0      (1.0)     (11.0)
     Operating income (loss)                 64.2     148.2      (84.0)

    Floorplan interest expense              (21.4)    (32.6)      11.2
    Other interest expense                  (20.1)    (31.7)      11.6
    Gain on senior note repurchases          39.2       -         39.2
    Interest income                           0.7       0.8       (0.1)
    Other losses, net                        (1.8)     (1.6)      (0.2)
      Income (loss) from continuing
       operations before income taxes       $60.8     $83.1     $(22.3)

    Retail vehicle unit sales:
         New                               45,405    75,610    (30,205) (39.9)
         Used                              36,107    45,763     (9,656) (21.1)
                                           81,512   121,373    (39,861) (32.8)

    Revenue per vehicle retailed:
         New                              $31,422   $31,862      $(440)  (1.4)
         Used                             $15,451   $16,581    $(1,130)  (6.8)

    Gross profit per vehicle retailed:
         New                               $2,037    $2,244      $(207)  (9.2)
         Used                              $1,440    $1,615      $(175) (10.8)
         Finance and insurance             $1,032    $1,150      $(118) (10.3)



                                 AUTONATION, INC.
                           UNAUDITED SUPPLEMENTARY DATA
                     ($ in millions, except per vehicle data)

           Operating Highlights           Twelve Months Ended December 31,

                                                                 $        %
                                         2008       2007     Variance Variance

    Revenue:
      New vehicle                       $7,756.2  $10,014.3  $(2,258.1) (22.5)
        Retail used vehicle              2,839.7    3,305.7     (466.0) (14.1)
        Wholesale                          524.8      834.2     (309.4) (37.1)
      Used vehicle                       3,364.5    4,139.9     (775.4) (18.7)
      Parts and service                  2,465.2    2,539.9      (74.7)  (2.9)
      Finance and insurance, net           482.6      584.3     (101.7) (17.4)
      Other                                 63.4       68.1       (4.7)
    Total revenue                      $14,131.9  $17,346.5  $(3,214.6) (18.5)


    Gross profit:
      New vehicle                         $510.9     $709.1    $(198.2) (28.0)
        Retail used vehicle                286.9      351.1      (64.2) (18.3)
        Wholesale                           (8.5)       0.9       (9.4)
      Used vehicle                         278.4      352.0      (73.6) (20.9)
      Parts and service                  1,071.8    1,108.8      (37.0)  (3.3)
      Finance and insurance                482.6      584.3     (101.7) (17.4)
      Other                                 35.8       39.1       (3.3)
    Total gross profit                   2,379.5    2,793.3     (413.8) (14.8)

    Selling, general and
     administrative expenses             1,813.8    1,999.8      186.0    9.3

    Depreciation and amortization           90.8       90.3       (0.5)
    Goodwill impairment                  1,610.0        -     (1,610.0)
    Franchise rights impairment            146.5        2.2     (144.3)
    Other expenses (income), net            13.2       (0.4)     (13.6)
     Operating income (loss)            (1,294.8)     701.4   (1,996.2)

    Floorplan interest expense             (87.4)    (129.0)      41.6
    Other interest expense                 (89.4)    (114.1)      24.7
    Gain on senior note repurchases         51.3        -         51.3
    Interest income                          2.2        3.4       (1.2)
    Other losses, net                       (4.6)      (1.3)      (3.3)
      Income (loss) from continuing
       operations before income taxes  $(1,422.7)    $460.4  $(1,883.1)

    Retail vehicle unit sales:
         New                             255,843    322,849    (67,006) (20.8)
         Used                            181,281    201,175    (19,894)  (9.9)
                                         437,124    524,024    (86,900) (16.6)

    Revenue per vehicle retailed:
         New                             $30,316    $31,019      $(703)  (2.3)
         Used                            $15,665    $16,432      $(767)  (4.7)

    Gross profit per vehicle retailed:
         New                              $1,997     $2,196      $(199)  (9.1)
         Used                             $1,583     $1,745      $(162)  (9.3)
         Finance and insurance            $1,104     $1,115       $(11)  (1.0)



                                       Three Months Ended  Twelve Months Ended
            Operating Percentages         December 31,        December 31,
                                         2008 (%) 2007 (%)   2008 (%) 2007 (%)

    Revenue mix percentages:
      New vehicle                            52.1     58.2     54.9     57.7
      Used vehicle                           23.4     23.0     23.8     23.9
      Parts and service                      20.9     15.1     17.4     14.6
      Finance and insurance, net              3.1      3.4      3.4      3.4
      Other                                   0.5      0.3      0.5      0.4
                                            100.0    100.0    100.0    100.0

    Gross profit mix percentages:
      New vehicle                            19.2     25.7     21.5     25.4
      Used vehicle                            9.9     10.9     11.7     12.6
      Parts and service                      51.7     40.9     45.0     39.7
      Finance and insurance                  17.5     21.1     20.3     20.9
      Other                                   1.7      1.4      1.5      1.4
                                            100.0    100.0    100.0    100.0

    Operating items as a percentage of
     revenue:
      Gross profit:
         New vehicle                          6.5      7.0      6.6      7.1
         Used vehicle - retail                9.3      9.7     10.1     10.6
         Parts and service                   43.5     43.3     43.5     43.7
         Total                               17.6     16.0     16.8     16.1
      Selling, general and administrative
       expenses                              14.0     11.7     12.8     11.5
      Operating income (loss)                 2.3      3.6       NM      4.0

    Operating items as a percentage of
     total gross profit:
      Selling, general and administrative
       expenses                              79.9     73.6     76.2     71.6
      Operating income (loss)                13.4     22.4       NM     25.1

      NM = Not Meaningful



                                 AUTONATION, INC.
                           UNAUDITED SUPPLEMENTARY DATA
                     ($ in millions, except per vehicle data)

        Segment Operating Highlights       Three Months Ended December 31,

                                                                 $        %
                                           2008      2007    Variance Variance

    Revenue:
       Domestic                            $955.3  $1,507.6    $(552.3) (36.6)
       Import                               978.6   1,486.3     (507.7) (34.2)
       Premium luxury                       781.4   1,113.5     (332.1) (29.8)
       Corporate and other                   21.6      32.3      (10.7) (33.1)
    Total revenue                        $2,736.9  $4,139.7  $(1,402.8) (33.9)


    *Segment income (loss)
       Domestic                             $13.8     $36.3     $(22.5) (62.0)
       Import                                20.3      51.5      (31.2) (60.6)
       Premium luxury                        38.5      58.7      (20.2) (34.4)
       Corporate and other                  (29.8)    (30.9)       1.1
    Total segment income (loss)              42.8     115.6      (72.8)

    Add:  Floorplan interest expense         21.4      32.6      (11.2)

    Operating income (loss)                 $64.2    $148.2     $(84.0)


    * Segment income (loss) is defined as operating income net of
      floorplan interest expense


    Retail new vehicle unit sales:
       Domestic                            14,442    25,744    (11,302) (43.9)
       Import                              22,429    36,768    (14,339) (39.0)
       Premium luxury                       8,534    13,098     (4,564) (34.8)
                                           45,405    75,610    (30,205) (39.9)



                                 AUTONATION, INC.
                           UNAUDITED SUPPLEMENTARY DATA
                     ($ in millions, except per vehicle data)

       Segment Operating Highlights       Twelve Months Ended December 31,

                                                                 $        %
                                         2008       2007     Variance Variance

    Revenue:
       Domestic                         $4,927.2   $6,562.9  $(1,635.7) (24.9)
       Import                            5,449.9    6,397.9     (948.0) (14.8)
       Premium luxury                    3,645.2    4,272.8     (627.6) (14.7)
       Corporate and other                 109.6      112.9       (3.3)  (2.9)
    Total revenue                      $14,131.9  $17,346.5  $(3,214.6) (18.5)


    *Segment income (loss)
       Domestic                           $107.1     $204.5     $(97.4) (47.6)
       Import                              187.9      250.0      (62.1) (24.8)
       Premium luxury                      184.2      226.2      (42.0) (18.6)
       Corporate and other              (1,861.4)    (108.3)  (1,753.1)
    Total segment income (loss)         (1,382.2)     572.4   (1,954.6)

    Add:  Floorplan interest expense        87.4      129.0      (41.6)

    Operating income (loss)            $(1,294.8)    $701.4  $(1,996.2)


    * Segment income (loss) is defined as operating income net of
      floorplan interest expense


    Retail new vehicle unit sales:
       Domestic                           80,153    113,549    (33,396) (29.4)
       Import                            135,464    161,232    (25,768) (16.0)
       Premium luxury                     40,226     48,068     (7,842) (16.3)
                                         255,843    322,849    (67,006) (20.8)



      Brand Mix - New Vehicle Retail Units
       Sold
                                       Three Months Ended  Twelve Months Ended
                                           December 31,        December 31,
                                       2008 (%)  2007 (%)   2008 (%)  2007 (%)

        Domestic:
           Ford, Lincoln-Mercury       15.5      13.8       14.0       15.1
           Chevrolet, Pontiac, Buick,
            Cadillac, GMC              11.1      13.7       11.9       13.4
           Chrysler, Jeep, Dodge        5.2       6.5        5.4        6.7
             Domestic total            31.8      34.0       31.3       35.2

        Import:
           Honda                       12.3      12.3       13.5       12.5
           Toyota                      20.6      19.3       21.0       20.0
           Nissan                       9.5      11.2       11.9       11.5
           Other imports                7.0       5.9        6.5        5.9
             Import total              49.4      48.7       52.9       49.9

        Premium Luxury:
           Mercedes                     8.2       8.0        6.9        6.5
           BMW                          5.7       4.4        4.7        4.1
           Lexus                        3.0       3.4        2.7        2.9
           Other premium luxury (Land
            Rover, Porsche)             1.9       1.5        1.5        1.4
             Premium Luxury total      18.8      17.3       15.8       14.9

                                      100.0     100.0      100.0      100.0



                                AUTONATION, INC.
                     UNAUDITED SUPPLEMENTARY DATA, Continued
                     ($ in millions, except per share data)

                                            Three Months     Twelve Months
     Capital Expenditures / Stock and    Ended December 31, Ended December 31,
      Debt Repurchases
                                           2008     2007      2008     2007

      Capital expenditures                  $20.2   $31.1    $117.4   $159.7
      Acquisitions                           $2.8    $2.5     $32.2     $6.7
      Proceeds from exercises of stock
       options                                $-     $4.7      $1.0    $96.6
      Senior note repurchases (aggregate
       principal)                          $144.8     $-     $232.9     $-
      Stock repurchases:
        Aggregate purchase price             $-     $64.9     $54.1   $645.7
        Shares repurchased (in millions)      -       4.0       3.8     33.2



      Floorplan Assistance and   Three Months Ended     Twelve Months Ended
       Expense                      December 31,            December 31,
                                2008    2007  Variance  2008    2007  Variance

      Floorplan assistance
       earned (included in cost
       of sales)                $11.9   $22.2  $(10.3)  $70.0   $97.2  $(27.2)
      Floorplan interest
       expense (new vehicles)   (20.0)  (32.5)   12.5   (83.7) (128.5)   44.8

       Net inventory carrying
        cost                    $(8.1) $(10.3)   $2.2  $(13.7) $(31.3)  $17.6



       Balance Sheet and Other Highlights

                                             December 31,        December 31,
                                                2008                2007

      Cash and cash equivalents                   $111.0               $33.0
      Inventory                                 $1,876.0            $2,258.1
      Total floorplan notes payable             $1,927.9            $2,123.0
      Non-vehicle debt                          $1,258.9            $1,775.8
      Equity                                    $2,198.1            $3,473.5
      New days supply (industry standard
       of selling days, including fleet)         84 days             52 days

      Used days supply (trailing 30 days)        30 days             44 days



                               AUTONATION, INC.
                    UNAUDITED SUPPLEMENTARY DATA, Continued
                    ($ in millions, except per share data)

         Comparable Basis Reconciliations*
                                           Three Months Ended December 31,
                                            Net Income    Diluted Earnings
                                              (Loss)         Per Share

                                           2008    2007    2008     2007

         As reported                       $67.1   $51.7    $0.38    $0.28

          Discontinued operations, net of
           income taxes                      3.0    (1.1)   $0.02   $(0.01)

         From continuing operations, as
          reported                          70.1    50.6    $0.40    $0.28

          Income tax adjustments           (31.9)    -     $(0.18)    $-
          Gain on senior note repurchases  (24.1)    -     $(0.14)    $-
          Property and other impairments     7.6     -      $0.04     $-

         Adjusted                          $21.7   $50.6    $0.12    $0.28



                                            Twelve Months Ended December 31,
                                              Net Income    Diluted Earnings
                                                (Loss)         Per Share

                                              2008      2007    2008    2007

         As reported                        $(1,243.1) $278.7  $(6.99)  $1.39

          Discontinued operations, net of
           income taxes                          17.7    10.0   $0.10   $0.05

         From continuing operations, as
          reported                           (1,225.4)  288.7  $(6.89)  $1.44


          Impairment of goodwill and
           franchise rights                   1,459.1     -     $8.21    $-
          Income tax adjustments                (31.9)  (12.0) $(0.18)   $-
          Gain on senior note repurchases       (31.5)    -    $(0.18)   $-
          Property and other impairments          7.6     -     $0.04    $-
          Stock compensation expense
           adjustment                             3.2     -     $0.02  $(0.06)

         Adjusted                              $181.1  $276.7   $1.02   $1.38


         * Please refer to the "Non-GAAP Financial Measures" section of the
         Press Release.



                                 AUTONATION, INC.
                            UNAUDITED SAME STORE DATA
                     ($ in millions, except per vehicle data)

            Operating Highlights           Three Months Ended December 31,

                                                                 $        %
                                           2008      2007    Variance Variance

    Revenue:
       New vehicle                       $1,411.2  $2,407.6    $(996.4) (41.4)
         Retail used vehicle                552.3     758.3     (206.0) (27.2)
         Wholesale                           81.1     191.2     (110.1) (57.6)
       Used vehicle                         633.4     949.5     (316.1) (33.3)
       Parts and service                    567.7     623.1      (55.4)  (8.9)
       Finance and insurance, net            82.9     139.6      (56.7) (40.6)
       Other                                  4.0       5.9       (1.9) (32.2)
    Total revenue                        $2,699.2  $4,125.7  $(1,426.5) (34.6)


    Gross profit:
       New vehicle                          $91.4    $169.5     $(78.1) (46.1)
         Retail used vehicle                 51.5      73.9      (22.4) (30.3)
         Wholesale                           (4.8)     (2.3)      (2.5)
       Used vehicle                          46.7      71.6      (24.9) (34.8)
       Parts and service                    246.3     269.5      (23.2)  (8.6)
       Finance and insurance                 82.9     139.6      (56.7) (40.6)
       Other                                  5.2       6.0       (0.8)
    Total gross profit                     $472.5    $656.2    $(183.7) (28.0)


    Retail vehicle unit sales:
          New                              45,085    75,562    (30,477) (40.3)
          Used                             35,875    45,722     (9,847) (21.5)
                                           80,960   121,284    (40,324) (33.2)

    Revenue per vehicle retailed:
          New                             $31,301   $31,863      $(562)  (1.8)
          Used                            $15,395   $16,585    $(1,190)  (7.2)

    Gross profit per vehicle retailed:
          New                              $2,027    $2,243      $(216)  (9.6)
          Used                             $1,436    $1,616      $(180) (11.1)
          Finance and insurance            $1,024    $1,151      $(127) (11.0)



                                 AUTONATION, INC.
                            UNAUDITED SAME STORE DATA
                     ($ in millions, except per vehicle data)

           Operating Highlights           Twelve Months Ended December 31,

                                                                 $        %
                                         2008       2007     Variance Variance

    Revenue:
       New vehicle                      $7,712.0  $10,012.8  $(2,300.8) (23.0)
         Retail used vehicle             2,819.1    3,305.2     (486.1) (14.7)
         Wholesale                         517.2      832.1     (314.9) (37.8)
       Used vehicle                      3,336.3    4,137.3     (801.0) (19.4)
       Parts and service                 2,450.5    2,539.7      (89.2)  (3.5)
       Finance and insurance, net          479.7      584.3     (104.6) (17.9)
       Other                                20.3       24.9       (4.6) (18.5)
    Total revenue                      $13,998.8  $17,299.0  $(3,300.2) (19.1)


    Gross profit:
       New vehicle                        $507.5     $708.9    $(201.4) (28.4)
         Retail used vehicle               284.7      351.0      (66.3) (18.9)
         Wholesale                         (10.3)      (1.1)      (9.2)
       Used vehicle                        274.4      349.9      (75.5) (21.6)
       Parts and service                 1,062.8    1,106.4      (43.6)  (3.9)
       Finance and insurance               479.7      584.3     (104.6) (17.9)
       Other                                22.6       25.3       (2.7)
    Total gross profit                  $2,347.0   $2,774.8    $(427.8) (15.4)


    Retail vehicle unit sales:
          New                            254,739    322,801    (68,062) (21.1)
          Used                           180,304    201,134    (20,830) (10.4)
                                         435,043    523,935    (88,892) (17.0)

    Revenue per vehicle retailed:
          New                            $30,274    $31,018      $(744)  (2.4)
          Used                           $15,635    $16,433      $(798)  (4.9)

    Gross profit per vehicle retailed:
          New                             $1,992     $2,196      $(204)  (9.3)
          Used                            $1,579     $1,745      $(166)  (9.5)
          Finance and insurance           $1,103     $1,115       $(12)  (1.1)



                                       Three Months Ended  Twelve Months Ended
            Operating Percentages         December 31,         December 31,
                                        2008 (%) 2007 (%)   2008 (%) 2007 (%)

    Revenue mix percentages:
       New vehicle                       52.3     58.4        55.1     57.9
       Used vehicle                      23.5     23.0        23.8     23.9
       Parts and service                 21.0     15.1        17.5     14.7
       Finance and insurance, net         3.1      3.4         3.4      3.4
       Other                              0.1      0.1         0.2      0.1
                                        100.0    100.0       100.0    100.0


    Gross profit mix percentages:
       New vehicle                       19.3     25.8        21.6     25.5
       Used vehicle                       9.9     10.9        11.7     12.6
       Parts and service                 52.1     41.1        45.3     39.9
       Finance and insurance             17.5     21.3        20.4     21.1
       Other                              1.2      0.9         1.0      0.9
                                        100.0    100.0       100.0    100.0


    Operating items as a percentage of
     revenue:
       Gross Profit:
          New vehicle                     6.5      7.0         6.6      7.1
          Used vehicle - retail           9.3      9.7        10.1     10.6
          Parts and service              43.4     43.3        43.4     43.6
          Total                          17.5     15.9        16.8     16.0



                                 AUTONATION, INC.
              KEY CREDIT AGREEMENT COVENANT COMPLIANCE CALCULATIONS
                                December 31, 2008

    ($ millions)

    Income Statement information for the
     last twelve months
    (January 1, 2008 - December 31, 2008):

    Net income (loss) from continuing
     operations                                                     $(1,225.4)

    Floorplan and other interest expense                                176.8

    Income tax provision (benefit)                                     (197.3)

    Depreciation and amortization                                        90.8

    Stock-based compensation expense
     (SFAS No. 123R)                                                     21.0

    Impairment charges (including
     goodwill, franchise rights, and
     long-lived assets)                                               1,765.7

    EBITDA                                                              631.6

    Floorplan interest expense                                          (87.4)

    Adjusted EBITDA                                                    $544.2


    As of December 31, 2008:

    Funded indebtedness (primarily
     comprised of current and long-term
     debt and letters of credit)                                      1,331.8

    Vehicle secured indebtedness
     (floorplan payables)                                             1,927.9

    Funded indebtedness including
     floorplan                                                        3,259.7

    Shareholders' equity                                              2,198.1

    Total capitalization including
     floorplan                                                       $5,457.8


    Ratio of funded indebtedness/
    Adjusted EBITDA                                                      2.45
    Covenant                    less than                                3.00

    Ratio of funded indebtedness
     including floorplan/
    Total capitalization including
     floorplan                                                           59.7%
    Covenant                    less than                                65.0%


SOURCE AutoNation, Inc.

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cannonm@autonation.com

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