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AutoNation, Inc. Reports First Quarter Income From Continuing Operations Rose 38 Percent To $50.7 Million, Or $0.11 Per Share

Apr. 29, 1999

FORT LAUDERDALE, Fla., April 29 /PRNewswire/ -- AutoNation, Inc. (NYSE: AN) today reported that for the three months ended March 31, 1999, income from continuing operations increased 38 percent to $50.7 million, or $0.11 per share, from $36.8 million, or $0.08 per share, last year. These results do not include the Company's solid waste operations, which are reflected in income from discontinued operations.

Revenue for the three months ended March 31, 1999, rose 72 percent to $5.4 billion from $3.1 billion during the same period in 1998. For the quarter, operating income increased 37 percent to $83.9 million from $61.3 million last year.

Commenting on the Company's performance in the quarter, Steven R. Berrard, Co-CEO of AutoNation, said, "AutoNation's franchise dealership business produced stellar results in the first quarter. Comparative store revenue, including our used vehicle megastores, increased 9%. Comparative franchise dealership revenue grew 10% with the strongest gain of 16% from new vehicle sales. In Denver, where we converted our 17 franchised dealerships to AutoNation USA, we produced even stronger same store gains. Overall the results in Denver have far exceeded our expectations, in market share gains, revenue growth, operating performance, and customer satisfaction. Just as important, our customers tell us that they prefer AutoNation's one price, no haggle shopping experience, extended service hours, and the full range of other customer benefits now available in that market."

Commenting on the Company's position as the leading vehicle retailer on the Internet, Mr. Berrard added, "Our continued investment in building a comprehensive Internet infrastructure is generating dramatic results. During the first quarter, we sold over 6,600 vehicles via the Internet and generated over $150 million in revenue. We have built a comprehensive network of Internet sites for each of our automotive dealerships, and we coordinate all our leads through a proprietary system called Compass. As we move through the year, we will continue to invest in the Internet. Our objective is to remain the leading automotive Internet sales provider.

"Alamo and CarTemps USA achieved sound results for the quarter; however, the roll-out of the Global Odyssey System at National Car Rental impacted our overall vehicle rental results," Mr. Berrard continued. "Due to hardware, software, and training issues associated with the start-up of the new operating system, we were unable to process reservations quickly. However, we believe that the remaining issues will be resolved during the second quarter." AutoNation, Inc. is the world's largest automotive retailer operating more than 380 franchised locations and 36 company-owned AutoNation USA used vehicle megastores. Its automotive rental business, 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.
                     (In millions, except per share data)

                                           Three Months Ended March 31,
                                           1999                    1998

    Revenue                             $5,353.7               $3,119.1

     Cost of operations                  4,585.9                2,631.5
     Selling, general and
      administrative                       683.9                  426.3

    Operating income                        83.9                   61.3

    Net interest expense                   (5.8)                  (1.5)
    Other income (expense)                   1.1                  (2.3)

    Income from continuing
     operations before income taxes         79.2                   57.5

    Provision for income taxes              28.5                   20.7

    Income from continuing operations       50.7                   36.8

    Income from discontinued operations,
     net of income taxes
     and minority interest                  29.4                   40.3

    Net income                             $80.1                  $77.1

    Diluted income per common and
     common equivalent share:
     Continuing operations                 $0.11                  $0.08
     Discontinued operations                0.06                   0.09
     Net income                            $0.17                  $0.17

    Weighted average common and common
     equivalent shares                     465.0                  458.4

                                 AUTONATION, INC.
                                  (In millions)

                                        Three Months Ended March 31,
                                      1999                        1998

    Automotive retail     $4,562.7         85.2%     $2,343.4         75.1%
    Automotive rental        791.0         14.8%        775.7         24.9%
                          $5,353.7        100.0%     $3,119.1        100.0%
    Operating Income:
     Automotive retail      $106.7          2.3%        $56.4          2.4%
     Automotive rental       (5.0)         -0.6%         19.1          2.5%
     Corporate expenses     (17.8)                     (14.2)
                             $83.9          1.6%        $61.3          2.0%
SOURCE AutoNation, Inc.
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