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AutoNation, Inc. Reports 29% Increase In Third Quarter Earnings Per Share From Continuing Operations; $0.22 Vs. $0.17 Last Year

Oct. 28, 1999

FORT LAUDERDALE, Fla., Oct. 28 /PRNewswire/ -- AutoNation, Inc. (NYSE: AN) today reported that for the three months ended September 30, 1999, earnings per share from continuing operations rose 29 percent to $0.22, or $92.6 million, from $0.17, or $81.3 million for the same period in 1998. For the nine months ended September 30, 1999, earnings per share from continuing operations rose 57 percent to $0.55, or $248.1 million, from $0.35, or $163.2 million for the same period last year.

Revenue for the three months ended September 30, 1999, rose 56 percent to $5.5 billion from $3.5 billion during the same period in 1998. Revenue for the nine months ended September 30, 1999 increased 67 percent to $15.1 billion compared to $9.0 billion reported last year.

Operating income for the three months ended September 30, 1999 increased 18 percent to $141.4 million from $119.7 million last year. Operating income for the nine months ended September 30, 1999 increased 49 percent to $389.2 million from $260.5 million last year.

Commenting on the Company's performance in the quarter, Michael Maroone, President, said, "Our automotive retail business continues to produce very strong results. Same store revenue, including our AutoNation USA megastores, increased 11 percent in the quarter, including a 16 percent gain in new vehicle unit sales. In Denver, where our 'Mile High' project is now nine months old, we generated same store revenue gains of over 30 percent in the quarter, and we grew same store new vehicle unit sales more than 55 percent.

"Also in the quarter, we launched the largest branding initiative in automotive retailing history, by sub-branding many of our new vehicle franchises nationwide with the AutoNation USA name. The branding campaign will highlight a range of uniform sales and service promises that AutoNation USA dealers will offer. In addition, we integrated two additional megastores with new vehicle franchises."

Commenting on the Company's position as the leading vehicle retailer on the Internet, Mr. Maroone added, "Last week, we achieved Internet sales year- to-date of $750 million and we began offering the largest online inventory of new and used vehicles through AutoNationDirect.com. During the third quarter, AutoNation sold more than 14,000 vehicles via the Internet and generated over $316 million in revenue. For the nine months of 1999, our web sites generated over 31,000 vehicle sales and over $711 million in revenue."

As previously announced, the Company plans to separate its automotive rental business from its automotive retail business in the form of a tax-free dividend of shares of the new automotive rental company to the shareholders of AutoNation. Due to the planned separation, the automotive rental operations have been reflected as discontinued operations. Income from discontinued operations, net of taxes, for the three months ended September 30, 1999 was $12.1 million, or $0.02 per share. Income from discontinued operations, net of taxes, for the nine months ended September 30, 1999 was $437.9 million, or $0.98 per share, including the results of operations and the gain on the disposal of Republic Services, Inc., our former waste subsidiary.

The Company also announced that its Chief Executive Officer, Michael J. Jackson, has been elected to the Board of Directors, replacing Steven R. Berrard, who elected to leave the Board.

AutoNation, Inc. is the world's largest automotive retailer, with 406 franchises in 21 states and 41 AutoNation USA used vehicle megastores in 13 states. AutoNation also operates more than 270 web sites. Its automotive rental operations, including Alamo Rent-A-Car, Inc., National Car Rental System, Inc. and CarTemps USA, operates nationally and in more than 65 countries.

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, forecasts, estimates and expectations is contained in the Company's SEC filings.

                               AUTONATION, INC.
          UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In millions, except per share data)

                             Three Months Ended September 30,

                              1999                      1998
                                                          (a)
                                               %                          %
    Revenue:
    New vehicle           $3,207.6          58.7     $1,904.4          54.3
    Used vehicle           1,220.5          22.4        907.3          25.9
    Fixed operations         583.9          10.7        393.0          11.2
    Other                    447.7           8.2        303.3           8.6
                           5,459.7         100.0      3,508.0         100.0

    Cost of operations     4,709.7          86.3      3,003.2          85.6

    Gross margin             750.0          13.7        504.8          14.4

    Selling, general and
     administrative
     expenses                608.6          11.1        385.1          11.0

    Operating income         141.4           2.6        119.7           3.4

    Net interest income
     (expense)                 1.6                        3.2
    Other income (expense)     1.7                        4.1

    Income from continuing
     operations before
     income taxes            144.7                      127.0

    Provision for
     income taxes             52.1                       45.7

    Income from
     continuing
     operations               92.6                       81.3

    Discontinued operations:
    Income from discontinued
     operations, net of
     income taxes and
     minority interest        18.5                       98.4
    Gain (loss) on disposal
     of segment, net of
     income taxes            (6.4)                        ---
                              12.1                       98.4

    Net income              $104.7                     $179.7

    Diluted income per
     common and common
     equivalent share:
    Continuing operations    $0.22                      $0.17
    Discontinued operations   0.02                       0.21
    Net income               $0.24                      $0.38

    Weighted average common
     and common equivalent
     shares                  429.7                      475.6


                                 AUTONATION, INC.
            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                       (In millions, except per share data)

                            Nine Months Ended September 30,
                              1999                       1998
                                                          (a)
                                               %                          %
    Revenue:
    New vehicle           $8,662.8          57.4     $4,818.9          53.4
    Used vehicle           3,578.7          23.7      2,473.0          27.4
    Fixed operations       1,642.2          10.9        962.0          10.7
    Other                  1,208.3           8.0        770.1           8.5
                          15,092.0         100.0      9,024.0         100.0

    Cost of operations    13,025.0          86.3      7,770.3          86.1

    Gross margin           2,067.0          13.7      1,253.7          13.9

    Selling, general
     and administrative
     expenses              1,677.8          11.1        993.2          11.0

    Operating income         389.2           2.6        260.5           2.9

    Net interest income
    (expense)                (6.3)                      (5.4)
    Other income (expense)     4.8                      (0.2)

    Income from continuing
     operations before
     income taxes            387.7                      254.9

    Provision for
     income taxes            139.6                       91.7

    Income from
     continuing operations   248.1                      163.2

    Discontinued operations:
    Income from
     discontinued
     operations,
     net of income taxes
     and minority interest    65.0                      221.0
    Gain (loss) on disposal
     of segment, net of
     income taxes            372.9                        ---
                             437.9                      221.0

    Net income              $686.0                     $384.2

    Diluted income per
     common and common
     equivalent share:
    Continuing operations    $0.55                      $0.35
    Discontinued operations   0.98                       0.47
    Net income               $1.53                      $0.82

    Weighted average common
     and common equivalent
     shares                  449.1                      469.3


    (a)  Operating results for the three and nine months ended September 30,
    1998 have been restated to present the Company'sautomotive rental and
    solid waste services divisions as discontinued operations.


                                 AUTONATION, INC.
                       UNAUDITED SAME STORE OPERATING DATA
                                  (In millions)

             Three Months Ended September 30,  Nine Months Ended September 30,
                        1999      1998% Change1999  1998   % Change

    Revenue:
    New vehicle    $ 2,139.1   $1,769.3    20.9 $5,246.9  $4,552.0     15.3
    Used vehicle       813.1      816.8   (0.5)  2,218.4   2,288.9    (3.1)
    Fixed
     operations        381.2      366.1     4.1    968.6     907.9      6.7
    Other              240.4      261.1   (7.9)    686.8     710.2    (3.3)
                   $ 3,573.8   $3,213.3    11.2 $9,120.7  $8,459.0      7.8


    Gross Margin      $474.3     $443.6     6.9 $1,202.6  $1,142.0      5.3
    %                  13.3%      13.8%   (0.5)    13.2%     13.5%    (0.3)

    S,G&A             $355.9     $332.7     7.0  $ 908.6    $872.3      4.2
    %                  10.0%      10.3%   (0.3)    10.0%     10.3%    (0.3)

    Operating
     Income           $118.4     $110.9     6.8  $ 294.0    $269.7      9.0
    %                   3.3%       3.5%   (0.2)     3.2%      3.2%      ---

SOURCE AutoNation, Inc.
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