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AutoNation Reports First-Quarter Earnings From Continuing Operations of $0.37 Per Share

Apr. 27, 2006
* Record first-quarter operating income of $203 million * Revenue growth of 4% * Premium luxury new vehicle revenue up 15%

FORT LAUDERDALE, Fla., April 27, 2006 /PRNewswire-FirstCall via COMTEX News Network/ -- AutoNation, Inc. (NYSE: AN), America's largest automotive retailer, today reported 2006 first- quarter net income from continuing operations of $98 million or $0.37 per share, compared to year-ago net income from continuing operations of $89 million or $0.33 per share, an increase of 12% per share. First-quarter results include approximately $0.01 per share of non-cash compensation expense related to employee stock options, which is a component of selling, general and administrative (SG&A) expenses. The prior year's first-quarter results included a $0.03 per share charge from senior note repurchases.

First-quarter 2006 revenue totaled $4.7 billion, an increase of 4% compared to the year-ago period, with revenue growth in new vehicles of 2%, retail used vehicles of 5%, parts and service of 5%, and finance and insurance of 5%. New vehicle revenue was driven by a 15% increase in premium luxury revenue. Gross profit increased 4% and was up in all areas of the business. Operating income was a first-quarter record of $203 million, up 2% versus the prior year.

Commenting on the quarter, Mike Jackson, AutoNation Chairman and Chief Executive Officer, stated, "AutoNation delivered solid results in the first quarter across the board and we're especially pleased with the growth in premium luxury and our high-margin parts and service business. Also in March we closed on the acquisition of Autohaus Mercedes-Benz in Pompano Beach, Florida, with annual revenues of approximately $230 million, which will further enhance the contribution of premium luxury to our brand mix."

Mr. Jackson also stated, "In April, we successfully completed our tender offer for 50 million shares of our stock, which allowed us to deliver $1.15 billion of cash to stockholders while retaining financial flexibility to take advantage of future opportunities. As previously announced, we expect the transaction and related debt financing will be accretive to future earnings in the range of $0.13 to $0.15 per share on an annual basis."

The first quarter conference call may be accessed at 11:00 a.m. Eastern Time, by phone at 800-230-1085 or via the Internet (audio webcast) 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 April 27, 2006 through May 4, 2006 by calling 800-475-6701 (access code #823916).

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. AutoNation has approximately 27,000 full-time employees and owns and operates 345 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 long-term growth targets and EPS accretion estimates.

NON-GAAP FINANCIAL MEASURES

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-month period ended March 31, 2005, adjusted to exclude the effect of repurchases during the first quarter of 2005 of the Company's 9% senior unsecured notes due 2008. 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 March 31,
                                                   2006               2005

         Revenue:
            New vehicle                           $2,691.3           $2,640.2
            Used vehicle                           1,144.1            1,065.2
            Parts and service                        667.4              635.3
            Finance and insurance                    152.4              144.7
            Other                                     18.8               19.5
         Total revenue                             4,674.0            4,504.9

         Cost of sales:
            New vehicle                            2,491.1            2,445.4
            Used vehicle                           1,029.4              952.3
            Parts and service                        374.2              360.0
            Other                                      7.7                8.1
         Total cost of sales                       3,902.4            3,765.8

         Gross profit                                771.6              739.1

         Selling, general and
          administrative expenses                    548.6              519.5
         Depreciation and amortization                19.8               19.9
         Other expenses                                 --                0.1

         Operating income                            203.2              199.6

         Floorplan interest expense                  (32.5)             (24.7)
         Other interest expense                      (12.0)             (17.6)
         Other interest expense - senior
          note repurchases                              --              (14.4)
         Interest income                               3.5                1.5
         Other losses                                   --               (0.9)

         Income from continuing
          operations before income taxes             162.2              143.5

         Provision for income taxes                   64.4               54.2

         Net income from continuing
          operations                                  97.8               89.3

         Income (loss) from discontinued
          operations, net of income
          taxes                                      (10.6)               7.7

         Net income                                  $87.2              $97.0

         Diluted earnings per share:
            Continuing operations                    $0.37              $0.33
            Discontinued operations                 $(0.04)             $0.03

            Net income                               $0.33              $0.36

         Weighted average common and
          common equivalent shares
           outstanding                               267.4              270.3

         Common shares outstanding                   264.5              262.7



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

               Operating Highlights   Three Months Ended March 31,
                                      2006       2005 $ Variance % Variance

          Revenue:
            New vehicle            $2,691.3   $2,640.2    $51.1        1.9
              Retail used vehicle     925.8      878.7     47.1        5.4
              Wholesale               218.3      186.5     31.8       17.1
            Used vehicle            1,144.1    1,065.2     78.9        7.4
            Parts and service         667.4      635.3     32.1        5.1
            Finance and insurance     152.4      144.7      7.7        5.3
            Other                      18.8       19.5     (0.7)
          Total revenue            $4,674.0   $4,504.9   $169.1        3.8


          Gross profit:
            New vehicle              $200.2     $194.8     $5.4        2.8
              Retail used vehicle     112.2      109.8      2.4        2.2
              Wholesale                 2.5        3.1     (0.6)
            Used vehicle              114.7      112.9      1.8        1.6
            Parts and service         293.2      275.3     17.9        6.5
            Finance and insurance     152.4      144.7      7.7        5.3
            Other                      11.1       11.4     (0.3)
          Total gross profit          771.6      739.1     32.5        4.4

          Selling, general and
           administrative expenses    548.6      519.5    (29.1)      (5.6)

          Depreciation and
           amortization                19.8       19.9      0.1
          Other expenses                 --        0.1      0.1
           Operating income           203.2      199.6      3.6        1.8

          Floorplan interest expense  (32.5)     (24.7)    (7.8)
          Other interest expense      (12.0)     (17.6)     5.6
          Other interest expense
           - senior note repurchases     --      (14.4)    14.4
          Interest income               3.5        1.5      2.0
          Other losses                   --       (0.9)     0.9
            Income from continuing
             operations before
              income taxes           $162.2     $143.5    $18.7       13.0

          Retail vehicle unit sales:
               New                   89,279     89,955     (676)      (0.8)
               Used                  58,091     58,624     (533)      (0.9)
                                    147,370    148,579   (1,209)      (0.8)

          Revenue per vehicle
           retailed:
               New                  $30,145    $29,350     $795        2.7
               Used                 $15,937    $14,989     $948        6.3

          Gross profit per vehicle
           retailed:
               New                    2,242     $2,166      $76        3.5
               Used                  $1,931     $1,873      $58        3.1
               Finance and
                insurance            $1,034       $974      $60        6.2


             Operating Percentages       Three Months Ended March 31,
                                             % 2006     % 2005

          Revenue mix percentages:
            New vehicle                        57.6       58.6
            Used vehicle                       24.5       23.6
            Parts and service                  14.3       14.1
            Finance and insurance               3.3        3.2
            Other                               0.3        0.5
                                              100.0      100.0

          Gross profit mix percentages:
            New vehicle                        25.9       26.4
            Used vehicle                       14.9       15.3
            Parts and service                  38.0       37.2
            Finance and insurance              19.8       19.6
            Other                               1.4        1.5
                                              100.0      100.0

          Operating items as a percentage
           of revenue:
            Gross profit:
               New vehicle                      7.4        7.4
               Used vehicle - retail           12.1       12.5
               Parts and service               43.9       43.3
               Total                           16.5       16.4
            Selling, general and
             administrative expenses           11.7       11.5
            Operating income                    4.3        4.4

          Operating items as a percentage
           of total gross profit:
            Selling, general and
             administrative expenses           71.1       70.3
            Operating income                   26.3       27.0



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


             Cash Flow Information          Three Months Ended March 31,
                                                2006            2005
             Capital expenditures,
              excluding property
               operating lease
                buy-outs                        $19.9           $20.4
             Property operating
              lease buy-outs                      $--             $--
             Stock repurchases                    $--           $70.9
             Acquisitions                       $67.4            $2.1
             Proceeds from exercises
              of stock options                  $32.3           $23.0
             Senior note repurchases              $--          $106.0



          Floorplan Assistance and Expense    Three Months Ended March 31
                                                2006      2005   Variance
          Floorplan assistance earned
           (included in cost of sales)         $27.1     $26.4      $0.7
          Floorplan interest expense           (32.5)    (24.7)     (7.8)

            Net floorplan benefit (cost)       $(5.4)     $1.7     $(7.1)


          Balance Sheet and Other Highlights

                             March 31,      December 31,      March 31,
                               2006             2005            2005
          Cash and cash
           equivalents         $256.6           $244.9           $31.1
          Inventory          $2,673.6         $2,637.8        $2,757.1
          Total floorplan
           notes payable     $2,376.3         $2,497.5        $2,561.7
          Non-vehicle debt     $523.6           $525.0          $686.4
          Equity             $4,798.3         $4,669.5        $4,322.4
          New days supply
           (industry standard
           of selling days,
           including fleet)   55 days          55 days         61 days

          Used days supply
          (trailing 30 days)  41 days          43 days         39 days





      Brand Mix - New Vehicle Revenue %
                                                Three Months Ended March 31,
                                                  % 2006            % 2005

    Detroit 3:
       Ford, Lincoln-Mercury                        17.6              18.8
       Chevrolet, Pontiac, Buick,
        Cadillac, GMC                               14.3              15.9
       Chrysler, Jeep, Dodge                         8.3               8.8
         Detroit 3 total                            40.2              43.5

    Premium Luxury:
       Mercedes                                     10.3               9.1
       BMW                                           5.0               4.8
       Lexus                                         3.4               3.2
       Other premium luxury (Land Rover,
        Porsche, Jaguar)                             2.8               2.0
         Premium Luxury total                       21.5              19.1

    Imports:
       Honda                                         8.2               7.6
       Toyota                                       13.1              12.8
       Nissan                                       10.7              10.3
       Other imports                                 6.3               6.7
         Import total                               38.3              37.4
                                                   100.0             100.0


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

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

                                            2006     2005    2006      2005

         As reported                        $87.2   $97.0    $0.33     $0.36

          Discontinued operations - store
           divestitures, net of income
           taxes                            10.6      4.0    $0.04      0.01
          Discontinued operations - tax
           adjustments                        --    (11.7)     $--    $(0.04)

         From continuing operations, as
          reported                         $97.8    $89.3    $0.37     $0.33
          Senior note repurchases             --      8.7       --     $0.03

         Adjusted                           $97.8   $98.0    $0.37     $0.36


         * Please refer to the "Non-GAAP Financial Measures" section of the
         Press Release.


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

         U.S. light vehicle annual unit      intensely competitive, nearly 17
          sales                               million units
         SGA % reduction (over 2006,
          2007 and 2008)                     approximately 100 bp
          (SGA % of gross profit
          less floorplan interest
          expense)

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

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



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

             Operating Highlights      Three Months Ended March 31,

                                      2006      2005   $ Variance  % Variance
           Revenue:
               New vehicle         $2,678.0  $2,640.2      $37.8        1.4
                 Retail used
                  vehicle             922.9     878.6       44.3        5.0
                Wholesale             216.4     185.9       30.5       16.4
               Used vehicle         1,139.3   1,064.5       74.8        7.0
               Parts and service      663.7     635.3       28.4        4.5
               Finance and insurance  152.1     144.3        7.8        5.4
               Other                    7.1       7.0        0.1        1.4
           Total revenue           $4,640.2  $4,491.3     $148.9        3.3

           Gross profit:
               New vehicle           $198.9    $194.8       $4.1        2.1
                 Retail used
                  vehicle             112.0     109.7        2.3        2.1
                 Wholesale              1.9       2.5       (0.6)
               Used vehicle           113.9     112.2        1.7        1.5
               Parts and service      290.8     275.3       15.5        5.6
               Finance and insurance  152.1     144.3        7.8        5.4
               Other                    6.6       6.2        0.4        6.5
           Total gross profit        $762.3    $732.8      $29.5        4.0

           Retail vehicle unit sales:
                  New                89,063    89,955       (892)      (1.0)
                  Used               58,025    58,624       (599)      (1.0)
                                    147,088   148,579     (1,491)      (1.0)

           Revenue per vehicle
            retailed:
                  New               $30,069   $29,350       $719        2.4
                  Used              $15,905   $14,987       $918        6.1

           Gross profit per vehicle
            retailed:
                  New                $2,233    $2,166        $67        3.1
                  Used               $1,930    $1,871        $59        3.2
                  Finance and
                   insurance         $1,034      $971        $63        6.5



             Operating Percentages         Three Months Ended March 31,
                                               % 2006       % 2005

           Revenue mix percentages:
               New vehicle                       57.7         58.8
               Used vehicle                      24.6         23.7
               Parts and service                 14.3         14.1
               Finance and insurance              3.3          3.2
               Other                              0.1          0.2
                                                100.0        100.0

           Gross profit mix
            percentages:
               New vehicle                       26.1         26.6
               Used vehicle                      14.9         15.3
               Parts and service                 38.1         37.6
               Finance and insurance             20.0         19.7
               Other                              0.9          0.8
                                                100.0        100.0

           Operating items as a
            percentage of revenue:
               Gross Profit:
                  New vehicle                    7.4           7.4
                  Used vehicle - retail         12.1          12.5
                  Parts and service             43.8          43.3
                  Total                         16.4          16.3

SOURCE AutoNation, Inc.

Marc Cannon, AutoNation, +1-954-769-3146, or cannonm@autonation.com
http://www.prnewswire.com
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