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AutoNation Reports Third-Quarter Earnings From Continuing Operations of $0.45 Per Share

Oct. 27, 2005

* Third quarter revenue of $5.2 billion, up 5.0%, driven by increased sales of new and used vehicles, parts and service, and finance and insurance products * 90-basis point reduction in SG&A as a percent of gross profit * Excluding $0.04 per share benefit from the resolution of certain tax matters, EPS from continuing operations was $0.41, up 17%

FORT LAUDERDALE, Fla., Oct. 27 /PRNewswire-FirstCall/ -- AutoNation, Inc. (NYSE: AN), America's largest automotive retailer, today reported 2005 third- quarter net income from continuing operations of $120 million or $0.45 per share, compared to year-ago net income from continuing operations of $96 million or $0.35 per share, an increase in EPS of 29%. Excluding the $0.04 per share benefit from the resolution of certain tax matters, the Company's third-quarter EPS from continuing operations was $0.41, up 17% compared to a year ago. This increase was primarily a result of solid growth in both revenue and gross profit in every area of the business coupled with continued share repurchases and the leveraging of the Company's cost structure.

Third-quarter 2005 revenue totaled $5.2 billion, an increase of 5% compared to the year-ago period, and resulted primarily from revenue growth in new vehicles of 2%, retail used vehicles of 10%, parts and service of 9%, and finance and insurance of 6%. Selling, general and administrative expenses (SG&A) in the quarter were $567 million or 70.2% of total gross profit, a 90- basis point improvement versus the prior year. Operating income for the third quarter was $220 million, a third-quarter record, up 13% versus the prior year.

Commenting on the third-quarter performance, AutoNation Chairman and Chief Executive Officer Mike Jackson said, "AutoNation's team of 347 franchises and 27,000 employees can be very proud of their performance over the past quarter. Once again, our Company delivered record third-quarter earnings per share, increased revenue and increased net income -- all indicators of just how strong and efficient our organization has become. In addition to operational improvements in nearly every area of the business -- new and used vehicles, parts and service, finance and insurance -- we benefited during this time from the employee discount programs launched by the Detroit 3. During the third-quarter 2005 our markets were not significantly affected by hurricanes as we were in the third-quarter 2004. However, in the fourth-quarter Hurricane Wilma has impacted our South Florida operations, where we have 33 dealerships representing approximately 20% of our national business. We have a short-term disruption to our South Florida business at this point and we are in the process of accessing the damage. We do not expect a long-term effect on our business."

At the end of the third-quarter 2005, AutoNation's new vehicle inventory level was 43 days supply versus 53 days at the end of the third-quarter 2004, representing a decline of 17,000 units or 22%.

For the nine-month period ended September 30, 2005, the Company reported net income from continuing operations of $315 million or $1.17 per share. The Company's revenue for the nine-month period totaled $14.8 billion, up 3%.

AutoNation will discuss these results and information regarding the Company's business and operating environment during a conference call and audio web cast this morning at 11:00 a.m. Eastern Time. To listen to the live conference call, dial (800) 230-1074 or listen to the audio web cast via the Internet at http://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 2:30 p.m. Eastern Time, October 27 through November 3, 2005, by calling (800) 475-6701 (access code #799014) or via the Internet as outlined above.

About AutoNation, Inc.

AutoNation, Inc., headquartered in Fort Lauderdale, Fla., is America's largest automotive retailer and a component of the Standard and Poor's 500 Index. In 2004, AutoNation was named America's Most Admired Automotive Retailer for the 4th year in a row. AutoNation has approximately 27,000 full- time employees and owns and operates 347 new vehicle franchises in 17 states. For additional information, please visit http://corp.AutoNation.com or http://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 and the attached financial tables contain certain non-GAAP financial measures as defined under SEC rules, such as net income and diluted earnings per share from continuing operations for the three- and nine-month periods ended September 30, 2005 and 2004, adjusted in each case to exclude certain items disclosed in the attached financial tables. As required by SEC rules, the Company has provided reconciliations of these measures to the most directly comparable GAAP measures, which are set forth in the attachments to this release. The Company believes that each of the foregoing non-GAAP financial measures improves the transparency of the Company's disclosure, provides 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 improves the period-to-period comparability of the Company's results from its core business operations.

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

                                       Three Months Ended   Nine Months Ended
                                         September 30,        September 30,
                                         2005      2004      2005      2004

        Revenue:
           New vehicle                 $3,160.8  $3,090.0  $8,885.4  $8,754.9
           Used vehicle                 1,172.9   1,062.0   3,392.3   3,201.0
           Parts and service              673.0     617.5   1,974.4   1,836.9
           Finance and insurance          167.9     158.6     475.1     459.6
           Other                           21.8      20.6      65.7      65.2
        Total revenue                   5,196.4   4,948.7  14,792.9  14,317.6

        Cost of sales:
           New vehicle                  2,933.8   2,874.9   8,244.9   8,135.4
           Used vehicle                 1,064.5     967.1   3,062.0   2,900.3
           Parts and service              380.4     349.6   1,115.4   1,032.0
           Other                           10.3       9.5      30.7      28.9
        Total cost of sales             4,389.0   4,201.1  12,453.0  12,096.6

        Gross profit                      807.4     747.6   2,339.9   2,221.0

        Selling, general and
         administrative expenses          566.8     531.6   1,649.8   1,589.0
        Depreciation and amortization      19.7      19.9      60.4      57.8
        Other expenses                      1.2       0.9       0.6       1.3

        Operating income                  219.7     195.2     629.1     572.9

        Floorplan interest expense        (25.0)    (20.4)    (79.1)    (57.2)
        Other interest expense            (15.9)    (18.3)    (48.9)    (57.3)
        Other interest expense -
         senior note repurchases             --        --     (15.1)       --
        Interest income                     1.5       0.9       4.4       2.3
        Other losses                       (0.1)     (2.0)     (0.2)     (3.4)

        Income from continuing
         operations before income
         taxes                            180.2     155.4     490.2     457.3

        Provision for income taxes         60.1      59.7     175.0     176.3

        Net income from continuing
         operations                       120.1      95.7     315.2     281.0

        Income (loss) from
         discontinued operations, net
         of income taxes                    9.2      (3.3)    106.0      (9.2)

        Net income                       $129.3     $92.4    $421.2    $271.8


        Diluted earnings per share:
           Continuing operations          $0.45     $0.35     $1.17     $1.03
           Discontinued operations        $0.03    $(0.01)    $0.39    $(0.03)

           Net income                     $0.48     $0.34     $1.57     $0.99

        Weighted average common and
         common equivalent shares
         outstanding                      267.2     270.6     269.1     273.2

        Common shares outstanding         261.4     264.4     261.4     264.4



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


               Operating Highlights        Three Months Ended September 30,
                                            2005     2004  $Variance %Variance

          Revenue:
            New vehicle                   $3,160.8  $3,090.0   $70.8      2.3
              Retail used vehicle            936.6     852.5    84.1      9.9
              Wholesale                      236.3     209.5    26.8     12.8
            Used vehicle                   1,172.9   1,062.0   110.9     10.4
            Parts and service                673.0     617.5    55.5      9.0
            Finance and insurance            167.9     158.6     9.3      5.9
            Other                             21.8      20.6     1.2
          Total revenue                   $5,196.4  $4,948.7  $247.7      5.0


          Gross profit:
            New vehicle                     $227.0    $215.1   $11.9      5.5
              Retail used vehicle            110.0      95.4    14.6     15.3
              Wholesale                       (1.6)     (0.5)   (1.1)
            Used vehicle                     108.4      94.9    13.5     14.2
            Parts and service                292.6     267.9    24.7      9.2
            Finance and insurance            167.9     158.6     9.3      5.9
            Other                             11.5      11.1     0.4
          Total gross profit                 807.4     747.6    59.8      8.0

          Selling, general and
           administrative expenses           566.8     531.6   (35.2)    (6.6)

          Depreciation and amortization       19.7      19.9     0.2
          Other expenses                       1.2       0.9    (0.3)
           Operating income                  219.7     195.2    24.5     12.6

          Floorplan interest expense         (25.0)    (20.4)   (4.6)
          Other interest expense             (15.9)    (18.3)    2.4
          Other interest expense - senior
           note repurchases                     --        --      --
          Interest income                      1.5       0.9     0.6
          Other losses                        (0.1)     (2.0)    1.9
            Income from continuing
             operations before income
             taxes                          $180.2    $155.4   $24.8     16.0

          Retail vehicle unit sales:
               New                         110,288   107,568   2,720      2.5
               Used                         62,281    58,523   3,758      6.4
                                           172,569   166,091   6,478      3.9

          Revenue per vehicle retailed:
               New                         $28,660   $28,726    $(66)    (0.2)
               Used                        $15,038   $14,567    $471      3.2

          Gross profit per vehicle
           retailed:
               New                          $2,058    $2,000     $58      2.9
               Used                         $1,766    $1,630    $136      8.3
               Finance and insurance          $973      $955     $18      1.9


               Operating Highlights    Nine Months Ended September 30,
                                      2005       2004  $Variance %Variance

         Revenue:
          New vehicle              $8,885.4   $8,754.9  $130.5      1.5
            Retail used vehicle     2,743.8    2,609.0   134.8      5.2
            Wholesale                 648.5      592.0    56.5      9.5
          Used vehicle              3,392.3    3,201.0   191.3      6.0
          Parts and service         1,974.4    1,836.9   137.5      7.5
          Finance and insurance       475.1      459.6    15.5      3.4
          Other                        65.7       65.2     0.5
         Total revenue            $14,792.9  $14,317.6  $475.3      3.3


         Gross profit:
          New vehicle                $640.5     $619.5   $21.0      3.4
            Retail used vehicle       328.2      298.9    29.3      9.8
            Wholesale                   2.1        1.8     0.3
          Used vehicle                330.3      300.7    29.6      9.8
          Parts and service           859.0      804.9    54.1      6.7
          Finance and insurance       475.1      459.6    15.5      3.4
          Other                        35.0       36.3    (1.3)
         Total gross profit         2,339.9    2,221.0   118.9      5.4

         Selling, general and
          administrative expenses   1,649.8    1,589.0   (60.8)    (3.8)

         Depreciation and
          amortization                 60.4       57.8    (2.6)
         Other expenses                 0.6        1.3     0.7
          Operating income            629.1      572.9    56.2      9.8

         Floorplan interest
          expense                     (79.1)     (57.2)  (21.9)
         Other interest expense       (48.9)     (57.3)    8.4
         Other interest expense -
          senior note repurchases     (15.1)        --   (15.1)
         Interest income                4.4        2.3     2.1
         Other losses                  (0.2)      (3.4)    3.2
           Income from continuing
            operations before
            income taxes             $490.2     $457.3   $32.9      7.2

         Retail vehicle unit
          sales:
             New                    305,595    305,867    (272)    (0.1)
             Used                   182,154    179,570   2,584      1.4
                                    487,749    485,437   2,312      0.5

         Revenue per vehicle
          retailed:
             New                    $29,076    $28,623    $453      1.6
             Used                   $15,063    $14,529    $534      3.7

         Gross profit per vehicle
          retailed:
             New                     $2,096     $2,025     $71      3.5
             Used                    $1,802     $1,665    $137      8.2
             Finance and
              insurance                $974       $947     $27      2.9



               Operating Percentages      Three Months Ended Nine Months Ended
                                             September 30,      September 30,
                                            % 2005    % 2004  % 2005   % 2004

          Revenue mix percentages:
            New vehicle                       60.8      62.4    60.1     61.1
            Used vehicle                      22.6      21.5    22.9     22.4
            Parts and service                 13.0      12.5    13.3     12.8
            Finance and insurance              3.2       3.2     3.2      3.2
            Other                              0.4       0.4     0.5      0.5
                                             100.0     100.0   100.0    100.0

          Gross profit mix percentages:
            New vehicle                       28.1      28.8    27.4     27.9
            Used vehicle                      13.4      12.7    14.1     13.5
            Parts and service                 36.2      35.8    36.7     36.2
            Finance and insurance             20.8      21.2    20.3     20.7
            Other                              1.5       1.5     1.5      1.7
                                             100.0     100.0   100.0    100.0

          Operating items as a percentage
           of revenue:
            Gross profit:
               New vehicle                     7.2       7.0     7.2      7.1
               Used vehicle - retail          11.7      11.2    12.0     11.5
               Parts and service              43.5      43.4    43.5     43.8
               Total                          15.5      15.1    15.8     15.5
            Selling, general and
             administrative expenses          10.9      10.7    11.2     11.1
            Operating income                   4.2       3.9     4.3      4.0

          Operating items as a percentage
           of total gross profit:
            Selling, general and
             administrative expenses          70.2      71.1    70.5     71.5
            Operating income                  27.2      26.1    26.9     25.8


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




          Cash Flow Information      Three Months Ended   Nine Months Ended
                                       September 30,        September 30,
                                      2005      2004       2005      2004
        Capital expenditures,
         excluding property
         operating lease
         buy-outs                    $34.6      $26.9     $91.9     $81.3
        Property operating lease
         buy-outs                     $ --        $--     $10.3     $77.7
        Stock repurchases            $38.7      $82.9    $187.2    $190.8
        Acquisitions                  $5.4      $(0.1)    $13.4    $154.3
        Proceeds from exercises
         of stock options            $24.0      $18.2     $76.7     $68.1
        Senior note repurchases        $--        $--    $112.4       $--




           Floorplan Assistance and Expense
                                Three Months Ended September 30,
                                  2005      2004      Variance
        Floorplan assistance
         (included in cost of
          sales)                 $30.5     $31.8        $(1.3)
        Floorplan interest
         expense                 (25.0)    (20.4)        (4.6)

         Net floorplan benefit    $5.5     $11.4        $(5.9)

                                 Nine Months Ended September 30,
                                  2005      2004      Variance
        Floorplan assistance
         (included in cost of
          sales)                 $88.9      $87.5        $1.4
        Floorplan interest
         expense                 (79.1)     (57.2)      (21.9)

         Net floorplan benefit    $9.8      $30.3      $(20.5)



        Balance Sheet and Other Highlights
                                      Sept. 30,     Dec. 31,   Sept. 30,
                                        2005          2004       2004

        Cash and cash equivalents       $277.5       $107.9      $93.1
        Inventory                     $2,203.5     $2,580.7   $2,543.0
        Floorplan notes payable       $1,946.7     $2,462.3   $2,360.8
        Non-vehicle debt                $675.1       $812.6     $817.4
        Equity                        $4,599.2     $4,263.1   $4,113.0
        New days supply (industry
         standard of selling
         days, including fleet)        43 days      53 days    53 days
        Used days supply (trailing
         30 days)                      42 days      37 days    44 days



        Brand Mix - New Vehicle Revenue %
                                       Three Months Ended    Nine Months Ended
                                         September 30,          September 30,
                                        2005      2004         2005      2004

        Detroit 3:
         Ford (Ford, Lincoln-
         Mercury)                       20.0      21.5         19.0      21.3
         General Motors (Chevrolet,
          Pontiac, Buick, Cadillac,
          GMC)                          15.4      20.2         16.7      19.6
         Chrysler (Chrysler, Jeep,
          Dodge)                         9.6       9.6          9.1       9.4
         Detroit 3 total                45.0      51.3         44.8      50.3


        Premium Luxury:
         Mercedes                        8.6       8.0          8.8       8.3
         BMW                             4.5       4.8          4.6       4.5
         Lexus                           3.0       2.5          3.1       3.0
         Other premium luxury
         (Jaguar, Rolls Royce)           0.9       1.1          1.1       1.1
          Premium Luxury total          17.0      16.4         17.6      16.9

        Imports:
         Honda                           8.1       6.8          7.8       7.1
         Toyota                         11.8      11.3         12.2      11.3

         Nissan                         10.0       8.6         10.0       8.7
         Other imports                   8.1       5.6          7.6       5.7
          Import total                  38.0      32.3         37.6      32.8

                                       100.0     100.0        100.0     100.0




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




         Comparable Basis Reconciliations
                                             Three Months Ended September 30,
                                                              Diluted Earnings
                                              Net Income        Per Share

                                             2005     2004     2005     2004

         As reported                        $129.3    $92.4    $0.48   $0.34

          Discontinued operations - store
           divestitures, net of income
           taxes                              (6.2)     3.3   $(0.02)   0.01
          Discontinued operations - tax
           adjustments                        (3.0)      --   $(0.01)     --

         From continuing operations, as
          reported                          $120.1    $95.7    $0.45   $0.35
          Income tax adjustments              (9.4)      --    (0.04)     --

         Adjusted                           $110.7    $95.7    $0.41   $0.35



                                            Nine Months Ended September 30,
                                             Net Income    Diluted Earnings
                                                               Per Share

                                             2005     2004     2005    2004

         As reported                       $421.2   $271.8    $1.57   $0.99

          Discontinued operations - store
           divestitures, net of income
           taxes                              4.4      9.2    $0.02    0.03
          Discontinued operations - tax
           adjustments                     (110.4)      --   $(0.41)     --

         From continuing operations, as
          reported                          315.2    281.0    $1.17   $1.03


          Senior note repurchases             9.1       --     0.03      --
          Income tax adjustments            (16.2)      --    (0.06)     --


         Adjusted                          $308.1   $281.0    $1.14   $1.03




         Business Assumptions Impacting Long-term Average EPS Growth Target
         of 10% to 12% Per Year:

         U.S. light vehicle            intensely competitive,
          annual unit sales             high 16 million units

         SGA % reduction (over         approximately 100 bp
          2006, 2007 and 2008)
          (SGA % of gross profit
           less floorplan interest
           expense)

         Continued opportunistic       share repurchase, debt
          redeployment of cash flow     reduction, capital
                                        expenditures and
                                        acquisitions

         Targeted return on             approximately 15% after-tax
          incremental
          invested capital




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




                 Operating Highlights       Three Months Ended September 30,
                                            2005    2004  $Variance %Variance


           Revenue:
               New vehicle               $3,141.7  $3,090.0   $51.7    1.7
                 Retail used vehicle        931.6     852.6    79.0    9.3
                 Wholesale                  232.9     208.6    24.3   11.6
               Used vehicle               1,164.5   1,061.2   103.3    9.7
               Parts and service            669.0     617.5    51.5    8.3
               Finance and insurance        167.3     158.6     8.7    5.5
               Other                          7.5       8.0    (0.5)  (6.3)
           Total revenue                 $5,150.0  $4,935.3  $214.7    4.4


           Gross profit:
               New vehicle                 $225.5    $215.0   $10.5    4.9
                 Retail used vehicle        109.6      95.3    14.3   15.0
                 Wholesale                   (2.4)     (1.5)   (0.9)
               Used vehicle                 107.2      93.8    13.4   14.3
               Parts and service            290.6     267.9    22.7    8.5
               Finance and insurance        167.3     158.6     8.7    5.5
               Other                          6.8       6.7     0.1    1.5
           Total gross profit              $797.4    $742.0   $55.4    7.5




           Retail vehicle unit sales:
                  New                     109,766   107,568   2,198    2.0
                  Used                     62,012    58,523   3,489    6.0
                                          171,778   166,091   5,687    3.4

           Revenue per vehicle retailed:
                  New                     $28,622   $28,726   $(104)  (0.4)
                  Used                    $15,023   $14,569    $454    3.1

           Gross profit per vehicle
            retailed:
                  New                      $2,054    $1,999     $55    2.8
                  Used                     $1,767    $1,628    $139    8.5
                  Finance and insurance      $974      $955     $19    2.0



                 Operating Highlights        Nine Months Ended September 30,
                                             2005     2004 $Variance %Variance


           Revenue:
               New vehicle                $8,778.2   $8,750.9   $27.3   0.3
                 Retail used vehicle       2,714.1    2,607.8   106.3   4.1
                 Wholesale                   633.9      589.1    44.8   7.6
               Used vehicle                3,348.0    3,196.9   151.1   4.7
               Parts and service           1,953.1    1,835.7   117.4   6.4
               Finance and insurance         471.6      459.8    11.8   2.6
               Other                          23.8       24.1    (0.3) (1.2)
           Total revenue                 $14,574.7  $14,267.4  $307.3   2.2


           Gross profit:
               New vehicle                  $632.0     $619.4   $12.6   2.0
                 Retail used vehicle         325.4      298.7    26.7   8.9
                 Wholesale                     0.1       (0.3)    0.4
               Used vehicle                  325.5      298.4    27.1   9.1
               Parts and service             848.5      804.4    44.1   5.5
               Finance and insurance         471.6      459.8    11.8   2.6
               Other                          19.7       20.5    (0.8) (3.9)
           Total gross profit             $2,297.3   $2,202.5   $94.8   4.3




           Retail vehicle unit sales:
                  New                      302,812    305,701  (2,889) (0.9)
                  Used                     180,802    179,454   1,348   0.8
                                           483,614    485,155  (1,541) (0.3)

           Revenue per vehicle retailed:
                  New                      $28,989    $28,626    $363   1.3
                  Used                     $15,011    $14,532    $479   3.3

           Gross profit per vehicle
            retailed:
                  New                       $2,087     $2,026     $61   3.0
                  Used                      $1,800     $1,664    $136   8.2
                  Finance and insurance       $975       $948     $27   2.8





                                        Three Months Ended   Nine Months Ended
                 Operating Percentages        September 30,     September 30,
                                           %  2005   % 2004   % 2005  % 2004

           Revenue mix percentages:
               New vehicle                   61.0      62.6     60.2   61.3
               Used vehicle                  22.6      21.5     23.0   22.4
               Parts and service             13.0      12.5     13.4   12.9
               Finance and insurance          3.2       3.2      3.2    3.2
               Other                          0.2       0.2      0.2    0.2
                                            100.0     100.0    100.0  100.0


           Gross profit mix percentages:
               New vehicle                   28.3      29.0     27.5   28.1
               Used vehicle                  13.4      12.6     14.2   13.5
               Parts and service             36.4      36.1     36.9   36.5
               Finance and insurance         21.0      21.4     20.5   20.9
               Other                          0.9       0.9      0.9    1.0
                                            100.0     100.0    100.0  100.0



           Operating items as a percentage
            of revenue:
               Gross Profit
                  New vehicle                 7.2       7.0      7.2    7.1
                  Used vehicle - retail      11.8      11.2     12.0   11.5
                  Parts and service          43.4      43.4     43.4   43.8
                  Total                      15.5      15.0     15.8   15.4


SOURCE  AutoNation, Inc.
    -0-                             10/27/2005
    /CONTACT:  Marc Cannon, AutoNation, Inc., +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
                http://www.AutoNation.com /
    /Audio:  http://www.AutoNation.com /
    (AN)

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

MR-XX
-- FLTH001 --
6344 10/27/2005 07:00 EDT http://www.prnewswire.com
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