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AutoNation Reports 2010 Second Quarter Results

FORT LAUDERDALE, Fla., July 22, 2010 /PRNewswire via COMTEX/ --

  • 20% growth in second quarter revenue and retail vehicle unit sales over the prior year
  • Second quarter adjusted EPS from continuing operations was $0.38 ($0.31 on a GAAP basis), a 36% increase compared to $0.28 in the prior year ($0.30 on a GAAP basis)
  • AutoNation repurchased 20.9 million shares of its common stock for $414.4 million in the second quarter and on July 20 the Board of Directors authorized the repurchase of up to an additional $250 million of AutoNation common stock
  • AutoNation announces the acquisition of Toyota Mall of Georgia, one of the largest Toyota stores in the United States, and two Hyundai stores, one in Atlanta and the other in Seattle.

AutoNation, Inc. (NYSE: AN), America's largest automotive retailer, today reported 2010 second quarter adjusted net income from continuing operations of $62 million or $0.38 per share compared to adjusted net income of $50 million or $0.28 per share for the same period in the prior year, a 36% improvement on a per-share basis. Adjusted net income for the second quarter of 2010 excludes debt refinancing costs of $12 million after-tax, or $0.07 per share and for 2009 a gain on asset sales of $4 million after-tax, or $0.02 per share. On a GAAP basis, 2010 second quarter net income from continuing operations was $50 million or $0.31 per share, compared to 2009 second quarter net income from continuing operations of $54 million or $0.30 per share.

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AutoNation's 2010 second quarter revenue totaled $3.1 billion, compared to $2.6 billion in the year-ago period, an increase of 20%, driven primarily by stronger new and used retail vehicle revenue which increased 25%. Based on CNW Research data, in the second quarter, total U.S. industry new retail vehicle unit sales increased 12%. AutoNation's new vehicle unit sales increased 20%.

AutoNation's 2010 second quarter used retail vehicle revenue increased 28% compared to the year-ago period, as retail unit sales increased 20% and revenue per vehicle retailed increased 7%. Parts and service revenue increased 3% and finance and insurance revenue increased 18% compared to the second quarter 2009.

Mike Jackson, Chairman and Chief Executive Officer, said, "We delivered strong double-digit growth in the second quarter, which was driven by both new and used vehicle unit sales and revenue. We continue to expect full year industry new vehicle unit sales to be in the range of 11.5 million new units. We expect third quarter new vehicle industry sales will equal or surpass third quarter 2009 new vehicle industry sales even though the prior year included the highly successful Cash for Clunkers program. We continue to see a solid automotive recovery going forward."

AutoNation repurchased 20.9 million shares of its common stock in the second quarter for $414.4 million ($19.83 per share). On July 20, 2010, the Board of Directors authorized the repurchase of up to an additional $250 million of AutoNation common stock. As of such date, AutoNation had utilized substantially all of the amounts previously approved by its Board of Directors under its existing share repurchase program. As a result of the share buybacks, AutoNation had 149.3 million shares outstanding at the end of the second quarter, down from 169.9 million at the end of the first quarter. There are currently 146.4 million shares outstanding.

AutoNation also announced that it has signed agreements to acquire Toyota Mall of Georgia and Hyundai Mall of Georgia in the Atlanta market and that it recently completed the acquisition of Hyundai of Seattle. Toyota Mall of Georgia, which includes Scion, is one of the largest Toyota dealerships in the United States. The annual revenue run rate for all three acquisitions is approximately $200 million. The acquisitions of Toyota Mall of Georgia and Hyundai Mall of Georgia are subject to customary closing conditions and are expected to be completed in third quarter 2010.

Mr. Jackson stated, "We believe that we have a compelling opportunity to create significant value for stockholders over the next several years as the industry recovers. Our stock repurchases, together with the acquisitions that we announced, reflect our confidence in AutoNation's financial and operating strength and the long-term prospects in the auto industry. The combination of these drivers presents a significant long term growth and value creation opportunity."

AutoNation has 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 second quarter were as follows:

  • Domestic - Domestic segment income (1) was $41 million compared to year-ago segment income of $24 million. Second quarter Domestic retail new vehicle unit sales increased 30%. We had a solid performance from our domestic stores, especially Ford and Chevrolet.
  • Import - Import segment income was $52 million compared to year-ago segment income of $42 million. Second quarter Import retail new vehicle unit sales increased 16%.
  • Premium Luxury - Premium Luxury segment income was $49 million compared to year-ago segment income of $43 million. Second quarter Premium Luxury retail new vehicle unit sales increased 15%.

(1) Segment income is defined as operating income less floorplan interest expense.

For the six-month period ended June 30, 2010, the Company reported adjusted net income from continuing operations of $121 million or $0.72 per share compared to $90 million or $0.51 for the same period in the prior year. Adjusted net income excludes refinancing costs of $12 million after-tax, or $0.07 per share, for the first half of 2010, and a net benefit of $17 million after-tax, or $0.09 per share, primarily related to a net gain on asset sales and a gain on senior note repurchases for the first half of 2009. On a GAAP basis, net income from continuing operations for the six-month period ended June 30, 2010 was $108 million or $0.65 per share compared to $107 million or $0.60 per share for prior year period. The Company's revenue for the six-month period ended June 30, 2010 totaled $6.0 billion, up 19% compared to $5.0 billion in the prior year.

The second quarter conference call may be accessed by telephone at 888-769-8515 (password: AutoNation). The webcast will be available on AutoNation's investor relations website at corp.autonation.com/investors under "Webcasts & Presentations." A playback of the conference call will be available after 1:00 p.m. Eastern Time on July 22, 2010 through July 30, 2010 by calling 800-944-3031 (password: 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 five times. A component of the Standard and Poor's 500 Index, AutoNation owns and operates 249 new vehicle franchises in 15 states. For additional information, please visitcorp.AutoNation.com or www.AutoNation.com.

FORWARD LOOKING STATEMENTS

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Words such as "anticipates," "expects," "intends," "goals," "plans," "believes," "continues," "may," "will," and variations of such words and similar expressions are intended to identify such forward-looking statements. Statements regarding our expectations for the automotive retail industry, including total industry new vehicle unit sales for 2010, and pending acquisitions, as well as other statements that describe our objectives, goals or plans, are forward-looking statements. Our forward-looking statements reflect our current expectations concerning future results and events, and they involve known and unknown risks, uncertainties and other factors that are difficult to predict and may cause our actual results, performance or achievements to be materially different from any future results, performance and achievements expressed or implied by these statements. These risks, uncertainties and other factors include, among others: economic conditions generally; conditions in the credit markets and changes in interest rates; the success and financial viability of vehicle manufacturers and distributors with which we hold franchises; factors affecting our goodwill and other intangible asset impairment testing; natural disasters and other adverse weather events; restrictions imposed by vehicle manufacturers; the resolution of legal and administrative proceedings; regulatory factors affecting our business; and other factors described in our news releases and filings made under the securities laws, including, among others, our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K. Forward-looking statements contained in this news release speak only as of the date of this news release, and we undertake no obligation to update these forward-looking statements to reflect subsequent events or circumstances.

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 adjusted net income and earnings per share from continuing operations, which 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 STATEMENTS OF OPERATIONS
                       ($ in millions, except per share data)


                                       Three Months Ended     Six Months Ended
                                            June 30,              June 30,
                                           2010      2009      2010      2009
                                           ----      ----      ----      ----

    Revenue:
      New vehicle                      $1,658.3  $1,334.3  $3,121.1  $2,517.0
      Used vehicle                        785.3     629.2   1,517.9   1,217.9
      Parts and service                   548.5     533.7   1,087.2   1,067.7
      Finance and insurance, net          104.9      88.6     200.4     165.1
      Other                                12.0      11.6      23.7      24.9
                                           ----      ----      ----      ----
    Total revenue                       3,109.0   2,597.4   5,950.3   4,992.6
                                        -------   -------   -------   -------

    Cost of sales:
      New vehicle                       1,549.4   1,248.6   2,909.0   2,357.7
      Used vehicle                        715.8     571.2   1,382.0   1,096.5
      Parts and service                   308.8     299.4     610.1     598.8
      Other                                 4.8       4.5       9.6      10.6
                                            ---       ---       ---      ----
    Total cost of sales                 2,578.8   2,123.7   4,910.7   4,063.6
                                        -------   -------   -------   -------

    Gross profit                          530.2     473.7   1,039.6     929.0

    Selling, general and
     administrative expenses              384.2     362.1     758.7     713.5
    Depreciation and amortization          19.6      19.0      38.5      38.7
    Franchise rights impairment               -       1.5         -       1.5
    Other expenses (income), net            0.5      (9.8)      1.7     (20.6)
                                            ---      ----       ---     -----

    Operating income                      125.9     100.9     240.7     195.9

    Floorplan interest expense             (9.8)     (9.3)    (19.5)    (19.1)
    Other interest expense                (14.7)    (10.5)    (23.7)    (22.3)
    Loss on debt extinguishment           (19.6)        -     (19.6)        -
    Gain on senior note repurchases           -       0.6         -      12.5
    Interest income                         0.3       0.3       0.5       0.6
    Other gains (losses), net              (0.3)      3.5      (0.5)      1.9
                                           ----       ---      ----       ---

    Income from continuing operations
     before income taxes                   81.8      85.5     177.9     169.5

    Income tax provision                   31.9      31.5      69.5      62.9
                                           ----      ----      ----      ----

    Net income from continuing
     operations                            49.9      54.0     108.4     106.6

    Loss from discontinued operations,
     net of income taxes                   (2.7)    (17.3)     (6.0)    (35.3)
                                           ----     -----      ----     -----


    Net income                            $47.2     $36.7    $102.4     $71.3
                                          =====     =====    ======     =====


    Diluted earnings (loss) per share:
      Continuing operations               $0.31     $0.30     $0.65     $0.60
      Discontinued operations            $(0.02)   $(0.10)   $(0.04)   $(0.20)

      Net income                          $0.29     $0.21     $0.61     $0.40


    Weighted average common shares
     outstanding                          163.2     178.8     167.4     178.0

    Common shares outstanding, net of
     treasury stock, at June 30           149.3     178.0     149.3     178.0


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





      Operating Highlights             Three Months Ended June 30,
      --------------------             ---------------------------
                                        2010      2009  $Variance  % Variance
                                        ----      ----  ---------  ----------


    Revenue:
      New vehicle                   $1,658.3  $1,334.3     $324.0        24.3
        Retail used vehicle            704.7     551.3      153.4        27.8
        Wholesale                       80.6      77.9        2.7         3.5
                                        ----      ----
      Used vehicle                     785.3     629.2      156.1        24.8
                                       -----     -----      -----
      Parts and service                548.5     533.7       14.8         2.8
      Finance and insurance, net       104.9      88.6       16.3        18.4
      Other                             12.0      11.6        0.4
                                        ----      ----        ---
    Total revenue                   $3,109.0  $2,597.4     $511.6        19.7
                                    ========  ========     ======


    Gross profit:
      New vehicle                     $108.9     $85.7      $23.2        27.1
        Retail used vehicle             65.9      56.5        9.4        16.6
        Wholesale                        3.6       1.5        2.1
      Used vehicle                      69.5      58.0       11.5        19.8
                                        ----      ----       ----
      Parts and service                239.7     234.3        5.4         2.3
      Finance and insurance            104.9      88.6       16.3        18.4
      Other                              7.2       7.1        0.1
                                         ---       ---        ---
    Total gross profit                 530.2     473.7       56.5        11.9

    Selling, general and
     administrative expenses           384.2     362.1      (22.1)       (6.1)

    Depreciation and amortization       19.6      19.0       (0.6)
    Franchise rights impairment            -       1.5        1.5
    Other expenses (income), net         0.5      (9.8)     (10.3)
                                         ---      ----      -----
     Operating income                  125.9     100.9       25.0        24.8

    Floorplan interest expense          (9.8)     (9.3)      (0.5)
    Other interest expense             (14.7)    (10.5)      (4.2)
    Loss on debt extinguishment        (19.6)        -      (19.6)
    Gain on senior note repurchases        -       0.6       (0.6)
    Interest income                      0.3       0.3          -
    Other gains (losses), net           (0.3)      3.5       (3.8)
                                                             ----
    Income from continuing
     operations before income taxes    $81.8     $85.5      $(3.7)       (4.3)
                                       =====     =====      =====

    Retail vehicle unit sales:
         New                          51,893    43,357      8,536        19.7
         Used                         40,551    33,943      6,608        19.5
                                                            -----
                                      92,444    77,300     15,144        19.6
                                      ======    ======     ======

    Revenue per vehicle retailed:
         New                         $31,956   $30,775     $1,181         3.8
         Used                        $17,378   $16,242     $1,136         7.0

    Gross profit per vehicle
     retailed:
         New                          $2,099    $1,977       $122         6.2
         Used                         $1,625    $1,665       $(40)       (2.4)
         Finance and insurance        $1,135    $1,146       $(11)       (1.0)



      Operating Highlights               Six Months Ended June 30,
      --------------------               -------------------------
                                        2010      2009  $Variance  % Variance
                                        ----      ----  ---------  ----------


    Revenue:
      New vehicle                   $3,121.1  $2,517.0     $604.1        24.0
        Retail used vehicle          1,348.8   1,074.1      274.7        25.6
        Wholesale                      169.1     143.8       25.3        17.6
                                       -----     -----       ----
      Used vehicle                   1,517.9   1,217.9      300.0        24.6
                                     -------   -------      -----
      Parts and service              1,087.2   1,067.7       19.5         1.8
      Finance and insurance, net       200.4     165.1       35.3        21.4
      Other                             23.7      24.9       (1.2)
                                        ----      ----       ----
    Total revenue                   $5,950.3  $4,992.6     $957.7        19.2
                                    ========  ========     ======


    Gross profit:
      New vehicle                     $212.1    $159.3      $52.8        33.1
        Retail used vehicle            129.2     118.0       11.2         9.5
        Wholesale                        6.7       3.4        3.3
                                                              ---
      Used vehicle                     135.9     121.4       14.5        11.9
                                       -----     -----       ----
      Parts and service                477.1     468.9        8.2         1.7
      Finance and insurance            200.4     165.1       35.3        21.4
      Other                             14.1      14.3       (0.2)
                                        ----      ----       ----
    Total gross profit               1,039.6     929.0      110.6        11.9

    Selling, general and
     administrative expenses           758.7     713.5      (45.2)       (6.3)

    Depreciation and amortization       38.5      38.7        0.2
    Franchise rights impairment            -       1.5        1.5
    Other expenses (income), net         1.7     (20.6)     (22.3)
                                         ---     -----      -----
     Operating income                  240.7     195.9       44.8        22.9

    Floorplan interest expense         (19.5)    (19.1)      (0.4)
    Other interest expense             (23.7)    (22.3)      (1.4)
    Loss on debt extinguishment        (19.6)        -      (19.6)
    Gain on senior note repurchases        -      12.5      (12.5)
    Interest income                      0.5       0.6       (0.1)
    Other gains (losses), net           (0.5)      1.9       (2.4)
                                                             ----
    Income from continuing
     operations before income taxes   $177.9    $169.5       $8.4         5.0
                                      ======    ======       ====

    Retail vehicle unit sales:
         New                          97,307    81,516     15,791        19.4
         Used                         78,262    67,705     10,557        15.6
                                                           ------
                                     175,569   149,221     26,348        17.7
                                     =======   =======     ======

    Revenue per vehicle retailed:
         New                         $32,075   $30,877     $1,198         3.9
         Used                        $17,234   $15,864     $1,370         8.6

    Gross profit per vehicle
     retailed:
         New                          $2,180    $1,954       $226        11.6
         Used                         $1,651    $1,743       $(92)       (5.3)
         Finance and insurance        $1,141    $1,106        $35         3.2



                                       Three Months Ended    Six Months Ended
      Operating Percentages                  June 30,            June 30,
      ---------------------            ------------------    ----------------
                                                            2010       2009
                                     2010 (%)     2009 (%)   (%)       (%)
                                    --------      -------- -----      -----

    Revenue mix percentages:
      New vehicle                       53.3          51.4  52.5       50.4
      Used vehicle                      25.3          24.2  25.5       24.4
      Parts and service                 17.6          20.5  18.3       21.4
      Finance and insurance, net         3.4           3.4   3.4        3.3
      Other                              0.4           0.5   0.3        0.5
                                       100.0         100.0 100.0      100.0
                                       =====         ===== =====      =====

    Gross profit mix percentages:
      New vehicle                       20.5          18.1  20.4       17.1
      Used vehicle                      13.1          12.2  13.1       13.1
      Parts and service                 45.2          49.5  45.9       50.5
      Finance and insurance             19.8          18.7  19.3       17.8
      Other                              1.4           1.5   1.3        1.5
                                       100.0         100.0 100.0      100.0
                                       =====         ===== =====      =====

    Operating items as a percentage
     of revenue:
      Gross profit:
         New vehicle                     6.6           6.4   6.8        6.3
         Used vehicle - retail           9.4          10.2   9.6       11.0
         Parts and service              43.7          43.9  43.9       43.9
         Total                          17.1          18.2  17.5       18.6
      Selling, general and
       administrative expenses          12.4          13.9  12.8       14.3
      Operating income                   4.0           3.9   4.0        3.9

    Operating items as a percentage
     of total gross profit:
      Selling, general and
       administrative expenses          72.5          76.4  73.0       76.8
      Operating income                  23.7          21.3  23.2       21.1


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





      Segment Operating Highlights      Three Months Ended June 30,
      ----------------------------      ---------------------------
                                                                         %
                                         2010      2009  $Variance   Variance
                                       ----      ----    ---------  ---------


    Revenue:
      Domestic                       $1,040.7    $833.4     $207.3       24.9
      Import                          1,177.4     998.7      178.7       17.9
      Premium luxury                    860.4     733.9      126.5       17.2
      Corporate and other                30.5      31.4       (0.9)      (2.9)
                                                              ----
    Total revenue                    $3,109.0  $2,597.4     $511.6       19.7
                                     ========  ========     ======


    *Segment income (loss)
      Domestic                          $41.2     $24.3      $16.9       69.5
      Import                             52.4      41.5       10.9       26.3
      Premium luxury                     48.5      42.8        5.7       13.3
      Corporate and other               (26.0)    (17.0)      (9.0)
                                        -----     -----       ----
    Total segment income                116.1      91.6       24.5       26.7

    Add:  Floorplan interest expense      9.8       9.3        0.5


    Operating income                   $125.9    $100.9      $25.0       24.8
                                       ======    ======      =====


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


    Retail new vehicle unit sales:
      Domestic                         16,569    12,770      3,799       29.7
      Import                           26,944    23,306      3,638       15.6
      Premium luxury                    8,380     7,281      1,099       15.1
                                       51,893    43,357      8,536       19.7
                                            =         =



      Segment Operating Highlights       Six Months Ended June 30,
      ----------------------------       -------------------------
                                                                        %
                                         2010      2009  $Variance  Variance
                                       ----      ----    --------- ---------


    Revenue:
      Domestic                       $1,956.0  $1,610.8     $345.2      21.4
      Import                          2,248.8   1,885.7      363.1      19.3
      Premium luxury                  1,683.1   1,437.8      245.3      17.1
      Corporate and other                62.4      58.3        4.1       7.0

    Total revenue                    $5,950.3  $4,992.6     $957.7      19.2
                                     ========  ========     ======


    *Segment income (loss)
      Domestic                          $72.7     $46.0      $26.7      58.0
      Import                            102.4      71.1       31.3      44.0
      Premium luxury                     95.3      83.8       11.5      13.7
      Corporate and other               (49.2)    (24.1)     (25.1)
                                        -----     -----      -----
    Total segment income                221.2     176.8       44.4      25.1

    Add:  Floorplan interest expense     19.5      19.1        0.4


    Operating income                   $240.7    $195.9      $44.8      22.9
                                       ======    ======      =====


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


    Retail new vehicle unit sales:
      Domestic                         30,250    23,899      6,351      26.6
      Import                           50,818    43,216      7,602      17.6
      Premium luxury                   16,239    14,401      1,838      12.8
                                       97,307    81,516     15,791      19.4
                                            =         =       ====



     Brand Mix -New Vehicle
      Retail Units Sold
     ----------------------
                                   Three Months       Six Months Ended
                                  Ended June 30,          June 30,
                                ----------------     -----------------
                                2010         2009  2010         2009
                                 (%)         (%)  (%)         (%)
                               -----        ----- -----        -----

     Domestic:
        Ford, Lincoln-Mercury   17.3         14.5  16.8         14.4
        Chevrolet, Pontiac,
         Buick, Cadillac, GMC   12.1         10.8  11.9         11.1
        Chrysler, Jeep, Dodge    2.5          4.2   2.4          3.8
          Domestic total        31.9         29.5  31.1         29.3
                                ----         ----  ----         ----

     Import:
        Honda                   14.4         15.5  14.1         14.8
        Toyota                  19.0         19.3  18.7         19.9
        Nissan                  11.8         12.2  12.6         11.4
        Other imports            6.8          6.7   6.8          6.9
          Import total          52.0         53.7  52.2         53.0
                                ----         ----  ----         ----

     Premium Luxury:
        Mercedes                 7.8          8.1   8.0          8.4
        BMW                      4.5          4.4   4.5          4.8
        Lexus                    2.5          2.5   2.7          2.7
        Other premium luxury
         (Land Rover, Porsche)   1.3          1.8   1.5          1.8
          Premium Luxury total  16.1         16.8  16.7         17.7
                                ----         ----  ----         ----

                               100.0        100.0 100.0        100.0
                               =====        ===== =====        =====


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





      Capital Expenditures /Stock  Three Months Ended     Six Months Ended
          and Debt Repurchases          June 30,              June 30,
      ---------------------------  ------------------     ----------------
                                    2010          2009   2010        2009
                                    ----          ----   ----        ----

    Capital expenditures           $26.2         $13.7  $40.3       $34.1
    Acquisitions                      $-            $-  $12.5        $0.2
    Proceeds from exercises of
     stock options                  $5.4          $9.6   $5.6        $9.8
    Senior note repurchases
     (aggregate principal)            $-          $6.0     $-       $78.0
    Stock repurchases:
      Aggregate purchase price    $414.4            $- $451.6          $-
      Shares repurchased (in
       millions)                    20.9             -   23.0           -




      Floorplan Assistance and Expense   Three Months Ended June 30,
    --------------------------------    ---------------------------
                                        2010         2009       Variance
                                        ----         ----       --------


    Floorplan assistance earned
     (included in cost of sales)       $14.1        $10.9           $3.2
    Floorplan interest expense (new
     vehicles)                          (9.4)        (8.7)          (0.7)
                                        ----         ----           ----

      Net new vehicle inventory
       carrying benefit                 $4.7         $2.2           $2.5
                                        ====         ====           ====




                                              Six Months Ended June
      Floorplan Assistance and Expense                     30,
    --------------------------------             ----------------------
                                           2010         2009       Variance
                                           ----         ----       --------


    Floorplan assistance earned
     (included in cost of sales)          $26.5        $20.8           $5.7
    Floorplan interest expense (new
     vehicles)                            (18.6)       (17.9)          (0.7)
                                          -----        -----           ----

      Net new vehicle inventory
       carrying benefit                    $7.9         $2.9           $5.0
                                           ====         ====           ====




      Balance Sheet and Other Highlights
      ----------------------------------

                                          June 30, December 31,    June 30,
                                            2010        2009        2009
                                         --------- ------------- ---------

    Cash and cash equivalents               $101.6     $173.6       $128.9
    Inventory                             $1,580.9   $1,397.1     $1,252.3
    Total floorplan notes payable         $1,488.4   $1,378.4     $1,195.0
    Non-vehicle debt                      $1,367.3   $1,112.6     $1,133.0
    Equity                                $1,970.6   $2,303.2     $2,290.4
    New days supply (industry standard
     of selling
      days, including fleet)               55 days    55 days      53 days

    Used days supply (trailing 30 days)    45 days    41 days      37 days





    Key Credit Agreement Covenant Compliance Calculations
    -----------------------------------------------------


    Ratio of funded indebtedness/
    Adjusted EBITDA                                              2.66
                                                           less
    Covenant                                               than  3.25
    --------                                              -----  ----


    Ratio of funded indebtedness including floorplan/
    Total capitalization including floorplan                     45.1%
                                                           less
    Covenant                                               than  60.0%
    --------                                                ---- ----


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





    Comparable
     Basis
     Reconciliations*
    -----------------
                               Three Months Ended June 30,
                               ---------------------------
                                                 Diluted Earnings
                           Net Income                         Per Share**
                           ----------            ----------------

                        2010      2009        2010          2009
                        ----      ----        ----          ----

    As reported        $47.2     $36.7       $0.29         $0.21

      Discontinued
       operations,
       net of income
       taxes             2.7      17.3       $0.02         $0.10
                         ---      ----
    From continuing
     operations, as
     reported           49.9      54.0       $0.31         $0.30

      Loss on debt
       extinguishment   12.1         -       $0.07            $-
      Gain on asset
       sales and
       dispositions        -     (3.7)          $-        $(0.02)
                         ---      ----

    Adjusted           $62.0     $50.3       $0.38         $0.28
                       =====     =====


                            Six Months Ended June 30,
                            -------------------------
                        Net Income         Diluted Earnings
                           (Loss)             Per Share**
                        ----------         ----------------

                        2010      2009        2010          2009
                        ----      ----        ----          ----

    As reported       $102.4     $71.3       $0.61         $0.40

      Discontinued
       operations,
       net of income
       taxes             6.0      35.3       $0.04         $0.20
                         ---      ----
    From continuing
     operations, as
     reported          108.4     106.6       $0.65         $0.60


      Loss on debt
       extinguishment   12.1         -       $0.07            $-
      Net gain on
       asset sales
       and
       dispositions        -     (9.6)          $-        $(0.05)
      Gain on senior
       note
       repurchases         -     (7.7)          $-        $(0.04)
      Property and
       other
       impairments***      -       0.7          $-         $0.00
                         ---       ---


    Adjusted          $120.5     $90.0       $0.72         $0.51
                      ======     =====



    *  Please refer to the "Non-GAAP Financial Measures" section of the
    Press Release.
    **  Earnings per share amounts are calculated discretely and
    therefore may not add up to the total.
    ***  Property and other impairments for the three months ended March
    31, 2009 totaled $4.8 million after-tax, of which $4.5 million was
    reclassified to loss from discontinued operations since they related
    to dealerships classified as discontinued operations during the
    three months ended June 30, 2009.

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





      Operating Highlights              Three Months Ended June 30,
      --------------------              ---------------------------
                                                                         %
                                   2010      2009       $Variance    Variance
                                 ----      ----         ---------   ---------


    Revenue:
      New vehicle              $1,649.1  $1,329.6          $319.5        24.0
        Retail used vehicle       698.4     548.7           149.7        27.3
        Wholesale                  78.6      76.7             1.9         2.5
                                   ----      ----             ---
      Used vehicle                777.0     625.4           151.6        24.2
      Parts and service           541.0     531.9             9.1         1.7
      Finance and insurance,
       net                        104.4      88.4            16.0        18.1
      Other                        11.8      10.7             1.1
                                   ----      ----             ---
    Total revenue              $3,083.3  $2,586.0          $497.3        19.2
                               ========  ========          ======


    Gross profit:
      New vehicle                $108.2     $85.9           $22.3        26.0
        Retail used vehicle        65.3      56.2             9.1        16.2
        Wholesale                   3.6       1.6             2.0
                                    ---       ---             ---
      Used vehicle                 68.9      57.8            11.1        19.2
      Parts and service           236.6     233.6             3.0         1.3
      Finance and insurance       104.4      88.4            16.0        18.1
      Other                         7.0       6.8             0.2
                                    ---       ---             ---
    Total gross profit           $525.1    $472.5           $52.6        11.1
                                 ======    ======           =====




    Retail vehicle unit
     sales:
         New                     51,622    43,186           8,436        19.5
         Used                    40,215    33,743           6,472        19.2
                                 ------    ------           -----
                                 91,837    76,929          14,908        19.4
                                 ======    ======          ======

    Revenue per vehicle
     retailed:
         New                    $31,946   $30,788          $1,158         3.8
         Used                   $17,367   $16,261          $1,106         6.8

    Gross profit per vehicle
     retailed:
         New                     $2,096    $1,989            $107         5.4
         Used                    $1,624    $1,666            $(42)       (2.5)
         Finance and insurance   $1,137    $1,149            $(12)       (1.0)



      Operating Highlights               Six Months Ended June 30,
      --------------------               -------------------------
                                                                        %
                                   2010     2009       $Variance    Variance
                                 ----     ----         ---------   ---------


    Revenue:
      New vehicle              $3,103.8 $2,507.6          $596.2        23.8
        Retail used vehicle     1,338.9  1,066.6           272.3        25.5
        Wholesale                 165.8    141.8            24.0        16.9
                                  -----    -----            ----
      Used vehicle              1,504.7  1,208.4           296.3        24.5
      Parts and service         1,077.0  1,063.0            14.0         1.3
      Finance and insurance,
       net                        199.6    164.5            35.1        21.3
      Other                        23.3     23.4            (0.1)
                                   ----     ----            ----
    Total revenue              $5,908.4 $4,966.9          $941.5        19.0
                               ======== ========          ======


    Gross profit:
      New vehicle                $210.9   $159.1           $51.8        32.6
        Retail used vehicle       128.4    116.8            11.6         9.9
        Wholesale                   6.7      3.5             3.2
                                    ---      ---             ---
      Used vehicle                135.1    120.3            14.8        12.3
      Parts and service           472.7    467.0             5.7         1.2
      Finance and insurance       199.6    164.5            35.1        21.3
      Other                        13.8     13.8               -
                                   ----     ----             ---
    Total gross profit         $1,032.1   $924.7          $107.4        11.6
                               ========   ======          ======




    Retail vehicle unit
     sales:
         New                     96,832   81,211          15,621        19.2
         Used                    77,750   67,136          10,614        15.8
                                 ------   ------          ------
                                174,582  148,347          26,235        17.7
                                =======  =======          ======

    Revenue per vehicle
     retailed:
         New                    $32,053  $30,878          $1,175         3.8
         Used                   $17,221  $15,887          $1,334         8.4

    Gross profit per vehicle
     retailed:
         New                     $2,178   $1,959            $219        11.2
         Used                    $1,651   $1,740            $(89)       (5.1)
         Finance and insurance   $1,143   $1,109             $34         3.1



                                    Three Months Ended     Six Months Ended
      Operating Percentages               June 30,              June 30,
      ---------------------         ------------------     ----------------
                                                         2010        2009
                                  2010 (%)     2009 (%)   (%)        (%)
                                 --------     --------  -----       -----

    Revenue mix percentages:
      New vehicle                    53.5         51.4   52.5        50.5
      Used vehicle                   25.2         24.2   25.5        24.3
      Parts and service              17.5         20.6   18.2        21.4
      Finance and insurance, net      3.4          3.4    3.4         3.3
      Other                           0.4          0.4    0.4         0.5
                                    100.0        100.0  100.0       100.0
                                    =====        =====  =====       =====


    Gross profit mix
     percentages:
      New vehicle                    20.6         18.2   20.4        17.2
      Used vehicle                   13.1         12.2   13.1        13.0
      Parts and service              45.1         49.4   45.8        50.5
      Finance and insurance          19.9         18.7   19.3        17.8
      Other                           1.3          1.5    1.4         1.5
                                    100.0        100.0  100.0       100.0
                                    =====        =====  =====       =====



    Operating items as a
     percentage of revenue:
      Gross Profit:
         New vehicle                  6.6          6.5    6.8         6.3
         Used vehicle - retail        9.3         10.2    9.6        11.0
         Parts and service           43.7         43.9   43.9        43.9
         Total                       17.0         18.3   17.5        18.6


SOURCE AutoNation, Inc.

Media Contact

Marc Cannon
Executive Vice President
Chief Marketing Officer, Communications and Public Policy
Phone: 954.769.3146
cannonm@autonation.com

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