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AutoNation Reports First-Quarter Net Income of $0.32 Per Share, as Same Store Sales Grow 7%

Apr. 29, 2004

* Total store revenue growth of 8%
* Record first-quarter operating income of $181 million, up 6%
* Company raises full-year EPS outlook by $0.03 to the range of $1.43 - $1.48

FORT LAUDERDALE, Fla., April 29 /PRNewswire-FirstCall/ -- AutoNation, Inc. (NYSE: AN), America's largest automotive retailer, today reported first- quarter net income of $87.3 million, or $0.32 per share, on revenue of $4.8 billion for the period ending March 31, 2004. The results compare with 2003 first-quarter net income from continuing operations of $84.4 million, or $0.29 per share, excluding the benefit of the year-ago IRS tax settlement, on revenue of $4.5 billion. Including this non-cash settlement benefit of $127.5 million, first-quarter 2003 net income from continuing operations was $211.9 million or $0.72 per share.

The first-quarter $0.32 EPS exceeded the analysts' consensus estimate of $0.30 per share. Across-the-board growth in both revenue and gross profit coupled with continued share repurchase and leverage of the company's cost structure drove performance in the quarter. Commenting on the quarter, Mike Jackson, chairman and chief executive officer of AutoNation, stated, "AutoNation delivered strong same store sales results in the first quarter in every area of the business, including new and used vehicles, finance and insurance and parts and service. We also continued to make strides on the cost side of the equation. It was a great quarter and we're very pleased with our results."

First quarter highlights include:

* Same store revenue growth of 8% for new vehicles, 6% for retail used vehicles, 6% for parts and service and 11% for finance and insurance.

* An 80 basis point improvement in selling, general and administrative expense as a percent of total gross profit to 73.1%.

* Completion of the acquisition of Leesburg Honda and Leesburg Toyota in Virginia. The two new vehicle franchises represent collective annual revenue of approximately $77 million.

* Completion of the acquisition of Glauser Mercedes-Benz in Sarasota, Florida, an authorized Mercedes-Benz and Maybach dealer with annual revenue of approximately $150 million.

* The signing of an agreement to acquire John Roberts BMW and MINI of Dallas/Fort Worth, Texas, which is expected to be completed in the second quarter.

* The repurchase of 3.5 million shares, or 1.3% of the Company's outstanding common stock, at a cost of $58.1 million.

Looking ahead, Jackson said, "We are encouraged by our ability to generate top line growth, our continued cost reductions and the disciplined redeployment of our significant cash flow to improve shareholder value. Given this, we are raising our full-year 2004 EPS guidance by $0.03 to the range of $1.43 to $1.48 and anticipate second-quarter earnings per share in the range of $0.38 to $0.40."

AutoNation will discuss these results, the Company's outlook and supporting assumptions during a conference call and audio webcast this morning at 9:00 a.m. Eastern Time. To listen to the live conference call, dial (888) 428-4474 or listen to the audio webcast via the Internet at www.AutoNation.com by clicking on the "About Us" link, then clicking on "Investors" and then "Webcasts." A playback of the conference call will be available after 12:30 p.m. Eastern Time, through May 6, 2004 by calling (800) 475-6701 (access code #728416) or via the Internet as outlined above.

About AutoNation, Inc.

AutoNation, Inc., headquartered in Fort Lauderdale, Fla., is America's largest automotive retailer. Ranked No. 97 on the 2004 Fortune 500 and a component of the Standard and Poor's 500 Index, AutoNation employs approximately 28,000 people and owns and operates 365 new vehicle franchises in 18 states. For additional information, please visit http://corp.AutoNation.com or www.AutoNation.com, where more than 100,000 vehicles are available for sale.

Forward-Looking Statements

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, estimates and expectations is contained in the Company's SEC filings. The Company undertakes no duty to update its forward- looking statements, including its earnings outlook. This release contains certain non-GAAP financial measures as defined under SEC rules, including first-quarter 2003 net income and earnings per share from continuing operations excluding the benefit of the first-quarter 2003 IRS tax settlement. The Company believes such non-GAAP financial measures improve the transparency of the Company's disclosure, provide 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 improve the period-to-period comparability of the Company's results from its core business operations. As required by SEC rules, the Company has provided reconciliations of those measures to the most directly comparable GAAP measures, which are set forth in the attachments to this release.





                                AUTONATION, INC.
                     UNAUDITED CONSOLIDATED INCOME STATEMENTS
                      ($ in millions, except per share data)



                                                 Three Months Ended March 31,
                                                    2004               2003

         Revenue:
            New vehicle                           $2,832.5           $2,609.5
            Used vehicle                           1,153.2            1,102.6
            Parts and service                        636.0              599.4
            Finance and insurance                    151.3              136.4
            Other                                     24.0               11.4
         Total revenue                             4,797.0            4,459.3

         Cost of sales:
            New vehicle                            2,631.4            2,412.5
            Used vehicle                           1,045.6              998.3
            Parts and service                        357.9              338.7
            Other                                     10.0                1.7
         Total cost of sales                       4,044.9            3,751.2

         Gross profit                                752.1              708.1

         Selling, general and
          administrative expenses                    550.1              523.0
         Depreciation                                 18.9               16.9
         Amortization                                  0.3                0.6
         Loan and lease underwriting
          income, net                                   --               (2.9)
         Other losses, net                             1.8                0.3

         Operating income                            181.0              170.2

         Floorplan interest expense                  (17.6)             (19.5)
         Other interest expense                      (19.3)             (15.6)
         Interest income                               0.7                1.1
         Other (expense) income, net                  (0.5)               1.1

         Income from continuing
          operations before income taxes             144.3              137.3

         Provision for income taxes                   57.0               52.9
         Income tax benefit from IRS
          settlement                                    --             (127.5)

         Net tax provision - continuing
          operations                                  57.0              (74.6)

         Net income from continuing
          operations                                  87.3              211.9

         Loss from discontinued
          operations, net of income
          taxes                                         --              (12.3)

         Net income before cumulative
          effect of accounting change                 87.3              199.6

         Cumulative effect of accounting
          change, net of income taxes                   --              (14.6)

         Net income                                  $87.3             $185.0


         Diluted earnings per share:
            Continuing operations                    $0.32              $0.72
            Discontinued operations                     --              (0.04)
            Cumulative effect of
             accounting change                          --              (0.05)
            Net income                               $0.32              $0.63

         Weighted average common and
          common equivalent shares
          outstanding                                275.7              294.2

         Common shares outstanding                   267.3              282.5



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


                Operating Highlights          Three Months Ended March 31,

                                                               $        %
                                          2004      2003   Variance  Variance


          Revenue:
            New vehicle                  $2,832.5  $2,609.5  $223.0    8.5
              Retail used vehicle           961.0     906.7    54.3    6.0
              Wholesale                     192.2     195.9    (3.7)  (1.9)
            Total used vehicle            1,153.2   1,102.6    50.6    4.6
            Parts and service               636.0     599.4    36.6    6.1
            Finance and insurance           151.3     136.4    14.9   10.9
            Other                            24.0      11.4    12.6
                                         $4,797.0  $4,459.3  $337.7    7.6


          Gross profit:
            New vehicle                    $201.1    $197.0    $4.1    2.1
              Retail used vehicle           107.0     103.6     3.4    3.3
              Wholesale                       0.6       0.7    (0.1) (14.3)
            Used vehicle                    107.6     104.3     3.3    3.2
            Parts and service               278.1     260.7    17.4    6.7
            Finance and insurance           151.3     136.4    14.9   10.9
            Other                            14.0       9.7     4.3
                                            752.1     708.1    44.0    6.2

          Selling, general and
           administrative expenses          550.1     523.0   (27.1)  (5.2)

          Depreciation                       18.9      16.9    (2.0)
          Amortization                        0.3       0.6     0.3
          Loan and lease underwriting
           income, net                         --      (2.9)   (2.9)
          Other losses, net                   1.8       0.3    (1.5)
           Operating income                 181.0     170.2    10.8    6.3

          Floorplan interest expense        (17.6)    (19.5)    1.9    9.7
          Other interest expense            (19.3)    (15.6)   (3.7) (23.7)
          Interest income                     0.7       1.1    (0.4) (36.4)
          Other (expense) income, net        (0.5)      1.1    (1.6)
            Income from continuing
             operations before income
             taxes                         $144.3    $137.3    $7.0    5.1

          Retail vehicle unit sales:
               New vehicle                 97,945    93,782   4,163    4.4
               Used vehicle                63,446    59,716   3,730    6.2
                                          161,391   153,498   7,893    5.1

          Revenue per vehicle retailed:
               New vehicle                $28,919   $27,825  $1,094    3.9
               Used vehicle               $15,147   $15,184    $(37)  (0.2)

          Gross profit per vehicle
           retailed:
               New vehicle                 $2,053    $2,101    $(48)  (2.3)
               Used vehicle                $1,686    $1,735    $(49)  (2.8)
               Finance and insurance         $937      $889     $48    5.4



                Operating Percentages    Three Months Ended March 31,
                                             %  2004    %  2003

          Revenue mix percentages:
            New vehicle                          59.0       58.5
            Used vehicle                         24.0       24.7
            Parts and service                    13.3       13.4
            Finance and insurance                 3.2        3.1
            Other                                 0.5        0.3
                                                100.0      100.0


          Operating items as a percentage
           of revenue:
            Gross profit:
               New vehicle                        7.1        7.5
               Used vehicle - retail             11.1       11.4
               Parts and service                 43.7       43.5
               Total                             15.7       15.9
            Selling, general and
             administrative expenses             11.5       11.7
            Operating income                      3.8        3.8

          Operating items as a percentage
           of total gross profit:
            Selling, general and
             administrative expenses             73.1       73.9
            Operating income                     24.1       24.0



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



                                 Three Months Ended March 31,
          Cash Flow Information
                                     2004         2003
         Capital expenditures,
          excluding property
          operating lease buy-
          outs                       $21.6        $23.9
         Property operating lease
          buy-outs                   $77.7         $8.8
         Stock repurchases           $58.1       $204.6
         Acquisitions                $87.9        $45.1
         Proceeds from exercises
          of stock options           $12.7        $12.9


         Floorplan Assistance
          and Expense               Three Months Ended March 31,
                                    2004         2003   Variance


         Floorplan assistance
          (included in cost of
          operations)                $27.3        $28.4    $(1.1)
         Floorplan interest
          expense                    (17.6)       (19.5)     1.9

          Net inventory carrying
           benefit                    $9.7         $8.9     $0.8


         Balance Sheet and Other
                Highlights

                                 March 31,  December 31, March 31,
                                    2004         2003       2003

         Cash and cash
          equivalents                $31.1       $170.8    $185.7
         Inventory                $3,140.8     $2,919.3  $2,803.5
         Floorplan notes payable  $2,967.0     $2,809.8  $2,563.2
         Non-vehicle debt           $821.8       $824.4    $712.0
         Equity                   $3,990.4     $3,949.7  $3,901.4
         New days supply
          (industry standard of
          selling days,
          including fleet)         68 days      71 days   72 days

         Used days supply
          (trailing 30 days)       36 days      41 days   33 days




         Comparable Basis                               Diluted Earnings Per
          Reconciliations              Net Income               Share
                                   Three Months Ended    Three Months Ended
                                        March 31,              March 31,

                                      2004         2003     2004        2003

         Net income, as reported     $87.3       $185.0    $0.32       $0.63

          Discontinued operations       --         12.3       --        0.04
          Cumulative effect of
           accounting change            --         14.6       --        0.05
         Net income from
          continuing operations,
          as reported                 87.3        211.9     0.32        0.72
          Income tax benefit from
           IRS settlement               --       (127.5)      --       (0.43)
         Net income from
          continuing operations,
          excluding income tax
          benefit from IRS
          Settlement                 $87.3        $84.4    $0.32       $0.29



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


                 Operating Highlights       Three Months Ended March 31,

                                                             $         %
                                        2004      2003   Variance  Variance


           Revenue:
               New vehicle             $2,785.4  $2,586.2  $199.2    7.7
                 Retail used vehicle      949.1     895.9    53.2    5.9
                 Wholesale                182.9     191.0    (8.1)  (4.2)
               Total used vehicle       1,132.0   1,086.9    45.1    4.1
               Parts and service          627.9     592.7    35.2    5.9
               Finance and insurance      149.6     134.7    14.9   11.1
               Other                        5.5       7.2    (1.7)
                                       $4,700.4  $4,407.7  $292.7    6.6


           Gross profit:
               New vehicle               $197.6    $195.8    $1.8    0.9
                 Retail used vehicle      105.9     102.3     3.6    3.5
                 Wholesale                  0.6      (0.5)    1.1
               Used vehicle               106.5     101.8     4.7    4.6
               Parts and service          274.1     257.9    16.2    6.3
               Finance and insurance      149.6     134.7    14.9   11.1
               Other                        4.7       6.3    (1.6)
                                         $732.5    $696.5   $36.0    5.2




           Retail vehicle unit sales:
                  New Vehicle            96,561    92,882   3,679    4.0
                  Used Vehicle           62,773    58,855   3,918    6.7
                                        159,334   151,737   7,597    5.0

           Revenue per vehicle retailed:
                  New Vehicle           $28,846   $27,844  $1,002    3.6
                  Used Vehicle          $15,120   $15,222   $(102)  (0.7)

           Gross profit per vehicle
            retailed:
                  New Vehicle            $2,046    $2,108    $(62)  (2.9)
                  Used Vehicle           $1,687    $1,738    $(51)  (2.9)
                  Finance and insurance    $939      $888     $51    5.7




                Operating Percentages  Three Months Ended March 31,

                                           %  2004    %  2003

           Revenue mix percentages:
               New vehicle                     59.3       58.7
               Used vehicle                    24.1       24.7
               Parts and service               13.4       13.4
               Finance and insurance            3.2        3.1
               Other                            0.0        0.1
                                              100.0      100.0


           Operating items as a
            percentage of revenue:
               Gross Profit:
                  New vehicle                   7.1        7.6
                  Used vehicle - retail        11.1       11.4
                  Parts and service            43.7       43.5
                  Total                        15.6       15.8
SOURCE AutoNation, Inc.

CONTACT: Marc Cannon, AutoNation, +1-954-769-3146, or cannonm@autonation.com /
Photo: http://www.newscom.com/cgi-bin/prnh/20001017/AUTONATIONLOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com /
Company News On-Call: http://www.prnewswire.com/comp/750525.html /
Web site: http://corp.autonation.com /
(AN)

CO: AutoNation, Inc.
ST: Florida
IN: AUT
SU: ERN CCA MAV ERP

CH-KJ
-- FLTH001 --
8607 04/29/2004 06:45 EDT http://www.prnewswire.com

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