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AutoNation, Inc. Reports Pro Forma Earnings Of $0.10 Per Share From Continuing Operations For The 1999 Fourth Quarter And $0.66 Per Share For The Full Year, In Line With Revised Estimates

Jan. 26, 2000

FORT LAUDERDALE, Fla., Jan. 26 /PRNewswire/ -- AutoNation, Inc. (NYSE: AN) today reported pro forma income from continuing operations of $40.6 million, or $0.10 per share for the three months ended December 31, 1999, in line with analysts' revised consensus estimates, versus $62.6 million or $0.13 per share for the same period in 1998. For the year ended December 31, 1999, pro forma income from continuing operations was $288.7 million, or $0.66 per share versus $225.8 million, or $0.48 per share for the same period in 1998. Pro forma income from continuing operations excludes certain 1999 fourth quarter charges described below.

During the three months ended December 31, 1999, AutoNation recorded pre- tax charges totaling $478.5 million related to the Company's previously announced closure of its used vehicle megastores, corporate workforce reductions and other restructuring activities. As a result of these charges, the Company recorded a loss from continuing operations of $279.6 million, or $(0.71) per share for the three months ended December 31, 1999 and a loss from continuing operations of $31.5 million, or $(0.07) per share for the year ended December 31, 1999. The fourth quarter charge is in line with previously announced estimates.

Revenue for the three months ended December 31, 1999, rose 38% to $5.0 billion from $3.6 billion during the same period last year. Revenue for the year ended December 31, 1999 increased 59% to $20.1 billion versus $12.7 billion last year.

Pro forma operating income for the three months ended December 31, 1999 was $73.9 million versus $95.8 million for the same period last year. Pro forma operating income for the year ended December 31, 1999 was $463.1 million versus $356.3 million last year.

Commenting on the Company's performance during the quarter, Michael J. Jackson, Chief Executive Officer of AutoNation, Inc. said, "The operating results for the quarter are in line with our previously announced estimates and with analysts' revised expectations. The operating results reflect higher overhead, poor megastore performance and a generally soft used vehicle market. As a result of the megastore closures, headcount reductions and other cost cutting initiatives, we are now on track to improving profitability and to becoming the industry's low cost provider."

Commenting on the Company's position as the leading vehicle retailer on the Internet, Mr. Jackson added, "We closed the year with over $1 billion in vehicle sales via the Internet. During the fourth quarter, we sold close to 15,000 units via the Internet bringing our year-to-date Internet total to over 46,000 units. We are excited about our e-Commerce opportunities and expect to generate over $1.5 billion in vehicle sales via the Internet in 2000."

ANC RENTAL SPINOFF
The Company also announced that it continues to work on the previously announced tax-free spin-off of ANC Rental Corporation. The Company will provide further details regarding the timing of the proposed spin-off in late February.

Due to the planned separation, the Company's automotive rental operations have been reflected as discontinued operations. The Company recorded a loss from discontinued operations, net of taxes, for the three months ended December 31, 1999 of $123.5 million, or $(0.31) per share. Included in this amount are estimated automotive rental results through the distribution date and costs associated with the spin-off. The Company recorded income from discontinued operations, net of taxes, for the year ended December 31, 1999 of $314.4 million, or $0.73 per share, including the results of operations and gain on disposition of Republic Services, Inc., the Company's former waste subsidiary.

AutoNation, Inc. is the world's largest automotive retailer, with 409 franchises in 19 states and more than 350 websites.

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


                     Three Months Ended               Twelve Months Ended
                        December 31,                      December 31,
                    1999            1998             1999             1998
                         %              %                 %                %
    Revenue:
    New
     ve-
     hicle  $3,040.7   60.6 $2,060.2   56.6  $11,703.5  58.2  $6,879.1  54.3
    Used
     vehicle 1,052.3   21.0    853.3   23.4    4,631.0  23.0   3,326.3  26.3
    Fixed
     opera-
     tions     579.8   11.5    421.2   11.6    2,222.0  11.1   1,383.2  10.9
    Other      347.0    6.9    305.9    8.4    1,555.3   7.7   1,076.0   8.5
             5,019.8  100.0  3,640.6  100.0   20,111.8 100.0  12,664.6 100.0

    Cost of
     opera-
     tions   4,347.3   86.6  3,139.3   86.2   17,372.3  86.4  10,909.6  86.2

    Gross
     margin    672.5   13.4    501.3   13.8    2,739.5  13.6   1,755.0  13.8

    Store
     selling,
     general
     and
     adminis-
     trative
     expenses  536.5   10.7    379.9   10.5    2,073.7  10.3   1,304.4  10.3

    Store
     perfor-
     mance     136.0    2.7    121.4    3.3      665.8   3.3     450.6   3.5

    Corporate
     overhead   62.1    1.2     25.6    0.7      202.7   1.0      94.3   0.7

    Operating
     income     73.9    1.5     95.8    2.6      463.1   2.3     356.3   2.8

    Net interest
     income
     (expense) (8.0)             0.2            (14.3)           (5.2)
    Other income
     (expense) (2.6)             1.7               2.2             1.5

    Income from
     continuing
     operations
     before income
     taxes      63.3            97.7             451.0           352.6

    Provision
     for income
     taxes      22.7            35.1             162.3           126.8


    Income from
     continuing
     opera-
     tions      $40.6           $62.6           $288.7      $225.8


    Diluted
     income
     from
     con-
     tinuing
     operat-
     ions
     per
     common
     and
     common
     equivalent
     share     $0.10           $0.13             $0.66           $0.48

    Weighted
     average
     common
     and
     common
     equivalent
     shares    395.2           472.6             435.6           470.9


    Note:
    These pro forma unaudited condensed consolidated financial statements
exclude 1999 fourth quarter pre-tax charges totaling $478.5 million related
primarily to the closure of the used vehicle megastores and corporate
workforce reductions.  These pro forma unaudited condensed consolidated
financial statements also exclude the operating results of the automotive
rental segment and the former solid waste segment which are accounted for as
discontinued operations.


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



                    Three Months Ended            Twelve Months Ended
                       December 31,                  December 31,
                     1999       1998      %       1999        1998      %
                                         Chge                          Chge

    Revenue:
    New vehicle   $2,102.8   $1,874.5    12.2   $7,349.7    $6,426.5   14.4
    Used vehicle     701.4      703.1   (0.2)    2,921.0     2,990.4  (2.3)
    Fixed operations 403.5      380.3     6.1    1,372.2     1,288.1    6.5
    Other            238.0      259.5   (8.3)      922.1       969.3  (4.9)
                 $ 3,445.7   $3,217.4     7.1  $12,565.0   $11,674.3    7.6


    Gross Margin    $452.3     $436.0     3.7   $1,654.9    $1,577.4    4.9
    %                13.1%      13.6%   (0.5)      13.2%       13.5%  (0.3)

    S,G&A           $360.1     $333.7     7.9   $1,268.9    $1,205.6    5.3
    %                10.4%      10.4%     ---      10.1%       10.3%  (0.2)

    Store Perfor-
     mance           $92.2     $102.3   (9.9)    $ 386.0      $371.8    3.8
    %                 2.7%       3.2%   (0.5)       3.1%        3.2%  (0.1)


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

                               Three Months Ended     Twelve Months Ended
                                   December 31,            December 31,
                                 1999        1998       1999         1998
                                              (a)                     (a)

    Revenue:
    New vehicle                $3,040.7   $2,060.2    $11,703.5    $6,879.1
    Used vehicle                1,052.3      853.3      4,631.0     3,326.3
    Fixed operations              579.8      421.2      2,222.0     1,383.2
    Other                         347.0      305.9      1,555.3     1,076.0
                                5,019.8    3,640.6     20,111.8    12,664.6

    Cost of operations          4,374.6    3,139.3     17,399.6    10,909.6

    Gross margin                  645.2      501.3      2,712.2     1,755.0

    Selling, general and
     administrative expenses      659.6      405.5      2,337.4     1,398.7
    Asset impairment charge       390.2        ---        390.2         ---

    Operating income (loss)     (404.6)       95.8       (15.4)       356.3

    Net interest
     income (expense)             (8.0)        0.2       (14.3)       (5.2)
    Other income (expense)        (2.6)        1.7          2.2         1.5

    Income (loss) from
     continuing operations
     before income taxes        (415.2)       97.7       (27.5)       352.6

    Provision (benefit)
     for income taxes           (135.6)       35.1          4.0       126.8

    Income (loss) from
     continuing operations      (279.6)       62.6       (31.5)       225.8

    Discontinued operations:
    Income (loss) from
     discontinued operations,
    net of income taxes
     and minority interest       (95.6)       41.1       (30.6)       262.1
    Gain (loss) on disposal
     of segment, net of
     income taxes                (27.9)       11.6        345.0        11.6
                                (123.5)       52.7        314.4       273.7

    Net income (loss)          $(403.1)     $115.3      $ 282.9      $499.5

    Diluted income (loss)
     per common and common
     equivalent share:
    Continuing operations       $(0.71)      $0.13     $ (0.07)      $ 0.48
    Discontinued operations      (0.31)       0.11         0.73        0.58
    Net income (loss)           $(1.02)      $0.24        $0.66      $ 1.06

    Weighted average
     common and common
     equivalent shares            394.9      472.6        429.8       470.9

    (a)  Operating results for the three and twelve months ended December 31,
1998 have been restated to present the Company's automotive rental and solid
waste services divisions as discontinued operations.
SOURCE AutoNation, Inc.
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