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AutoNation Reports 29 Percent Increase In Second Quarter Earnings Per Share From Continuing Operations

Jul. 27, 2000

FORT LAUDERDALE, Fla., July 27 /PRNewswire/ -- AutoNation, Inc. (NYSE: AN), America's largest automotive retailer, today reported that for the three months ended June 30, 2000, earnings per share from continuing operations increased 29 percent to $0.27 per share, or $96.6 million, from $0.21 per share, or $97.1 million last year. The Company said that its results in the quarter benefited from continued strong new vehicle sales, improved operating efficiencies, reductions in corporate overhead and the Company's share repurchase program.

During the quarter, revenue from continuing operations rose five percent to $5.34 billion from $5.07 billion in the same period last year. Operating income before property carrying costs associated with closed operations increased four percent to $161.5 million this year versus $154.9 million in the same quarter last year. AutoNation said its improved operating performance was driven by reductions in selling, general and administrative expenses, offset by gross margin compression.

During the second quarter, AutoNation's selling, general and administrative expenses declined 60 basis points to 9.6% of sales this year versus 10.2% in the same period last year. At the same time, corporate overhead declined 10 basis points to 0.6% of sales this year versus 0.7% last year. The Company said these improvements reflect the benefit of its ongoing efforts to eliminate expense from its corporate and field operations. The results for the quarter include a pre-tax non-operating gain on the sale of certain marketable securities totaling $9.9 million or $0.02 per share after taxes.

For the six-month-period ended June 30, 2000, earnings per share from continuing operations grew 29% to $0.44 per share, or $161.3 million versus $0.34 per share, or $155.5 million last year while revenue increased 10% to $10.6 billion this year, compared with $9.6 billion in the same period last year.

Discussing AutoNation's performance in the second quarter, Chief Executive Officer Michael J. Jackson said, "We're pleased with our results in the quarter and we're encouraged that our cost reduction initiatives continue to have an impact." Mr. Jackson also noted that during the second quarter, AutoNation completed the spin-off of ANC Rental Corporation in the form of a tax-free dividend of shares to AutoNation stockholders. "With the spin-off complete, AutoNation is focused solely on automotive retailing, where we will build shareholder value by leveraging our scale to improve margins," Mr. Jackson said.

The Company also reported income from its discontinued automotive rental operations of $4.2 million for the quarter and $1.8 million for the six-month period ended June 30, 2000. These amounts include ANC Rental Corporation's (Nasdaq: ANCX) reported results, less costs incurred related to the spin-off which was completed on June 30, 2000. Earnings per share after discontinued operations were $0.28 per share, or $100.8 million, for the quarter and $0.45 per share, or $163.1 million for the six-month period ended June 30, 2000.

AutoNation, Inc., headquartered in Fort Lauderdale, Florida, is America's largest automotive retailer, on and off the web. The Company was ranked #63 on the Fortune 500 in the year 2000, and was ranked #3 among Specialty Retailers on the Fortune Global 500 in the year 2000. More information is available at www.autonation.com.

Certain statements and information included in this press 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 the 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 June 30,
                                    2000                      1999
                                               %                          %
    Revenue:
    New vehicle           $3,308.2          62.0     $2,906.3          57.3
    Used vehicle           1,053.6          19.7      1,235.3          24.4
    Fixed operations         588.8          11.0        549.6          10.8
    Other                    388.9           7.3        378.4           7.5
                           5,339.5         100.0      5,069.6         100.0

    Cost of operations     4,633.6          86.8      4,362.8          86.0

    Gross margin             705.9          13.2        706.8          14.0

    Store selling, general
     and administrative
     expenses                512.7           9.6        514.3          10.2

    Store performance        193.2           3.6        192.5           3.8

    Corporate overhead        31.7           0.6         37.6           0.7

    Operating income
     before property
     carrying costs          161.5           3.0        154.9           3.1

    Property carrying
     costs                     9.1           0.1          ---           ---

    Operating income         152.4           2.9        154.9           3.1

    Net interest expense     (5.5)                      (4.6)
    Other income               7.6                        1.4

    Income from continuing
     operations before
     income taxes            154.5                      151.7

    Provision for
     income taxes             57.9                       54.6

    Income from continuing
     operations               96.6                       97.1

    Income from discontinued
     operations, net of income
     taxes and minority
     interest                  4.2                      404.1

    Net income              $100.8                    $ 501.2

    Diluted income per
     common and
     common equivalent share:
    Continuing operations    $0.27                      $0.21
    Discontinued operations   0.01                       0.90
    Net income               $0.28                      $1.11

    Weighted average common
     and common
     equivalent shares       361.3                      453.1

    Common shares
     outstanding             361.1                      437.4



                                  Six Months Ended June 30,
                                   2000                       1999

                                               %                          %
    Revenue:
     New vehicle          $6,527.8          61.8     $5,455.2          56.6
     Used vehicle          2,101.5          19.9      2,358.2          24.5
     Fixed operations      1,176.7          11.1      1,058.3          11.0
     Other                   763.7           7.2        760.6           7.9
                          10,569.7         100.0      9,632.3         100.0

    Cost of operations     9,186.7          86.9      8,315.3          86.3

    Gross margin           1,383.0          13.1      1,317.0          13.7

    Store selling, general
     and administrative
     expenses              1,024.0           9.7        985.6          10.3

    Store performance        359.0           3.4        331.4           3.4

    Corporate overhead        71.2           0.7         83.6           0.8

    Operating income before
     property carrying costs 287.8           2.7        247.8           2.6

    Property carrying costs   19.9           0.2          ---           ---

    Operating income         267.9           2.5        247.8           2.6

    Net interest expense    (13.7)                      (7.9)
    Other income               3.8                        3.1
    Income from continuing
     operations before
     income taxes            258.0                      243.0
    Provision for
     income taxes             96.7                       87.5
    Income from continuing
     operations              161.3                      155.5

    Income from discontinued
     operations, net of
     income taxes and
     minority interest         1.8                      425.8

    Net income              $163.1                     $581.3


    Diluted income per common
     and common equivalent share:
    Continuing operations    $0.44                     $ 0.34
    Discontinued operations   0.01                       0.93
    Net income               $0.45                     $ 1.27

    Weighted average common
     and common equivalent
     shares                  364.4                      459.0

    Common shares
     outstanding             361.1                      437.4


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

                             Three Months Ended       Six Months Ended
                                  June 30,                June 30,
                       2000      1999   % Change    2000      1999  % Change

    Revenue:
    New vehicle     $2,720.2   $2,588.0    5.1  $5,092.3   $4,672.3     9.0
    Used vehicle       839.7      878.1  (4.4)   1,561.1    1,610.7   (3.1)
    Fixed operations   473.6      458.0    3.4     892.3      851.4     4.8
    Other              302.3      302.9  (0.2)     568.5      587.5   (3.2)
                    $4,335.8   $4,227.0    2.6  $8,114.2   $7,721.9     5.1

    Gross Margin      $574.3     $577.3  (0.5)  $1,058.5   $1,033.5     2.4
    %                  13.2%      13.6%  (0.4)     13.0%      13.4%   (0.4)

    S,G&A             $407.6     $410.4  (0.7)    $757.4     $746.4     1.5
    %                   9.4%       9.7%  (0.3)      9.3%       9.7%   (0.4)

    Store
     performance      $166.7     $166.9  (0.1)    $301.1     $287.1     4.9
    %                   3.8%       3.9%  (0.1)      3.7%       3.7%      --

SOURCE AutoNation, Inc.

CONTACT: Jim Donahue, AutoNation, 954-769-7208, or donahuej@autonation.com/

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