AutoNation Reports 2008 Second Quarter Results of Operations

FORT LAUDERDALE, Fla., July 24 -- AutoNation, Inc. , America's largest automotive retailer, today reported 2008 second quarter net income from continuing operations of $53 million or $0.29 per share, compared to year-ago net income from continuing operations of $79 million or $0.38 per share. After adjusting for certain items disclosed in the attached financial tables, net income from continuing operations for the 2008 second quarter was $59 million or $0.33 per share, compared to $76 million or $0.36 per share in the prior year.

Second quarter 2008 revenue totaled $3.9 billion, compared to $4.5 billion in the year-ago period, driven primarily by lower new vehicle sales. In the second quarter, total U.S. industry retail sales declined 16%, based on CNW Research data. In comparison, in the second quarter AutoNation's new vehicle unit sales declined 12%.

Commenting on the second quarter, Mike Jackson, Chairman and Chief Executive Officer, said, "Despite the fact that this past quarter was the most challenging automotive sales environment any of us have encountered, AutoNation delivered solid profitability." Mr. Jackson also noted, "In the second quarter, the industry encountered $4.00 per gallon gasoline on top of the continued housing depression and credit crisis, resulting in a significant challenge as consumers are either postponing the purchase of vehicles or they are purchasing smaller vehicles that are more economical both at the time of purchase and at the pump. We now believe that, in 2008, U.S. new vehicle industry sales will decline to the low-14 million unit level."

Mr. Jackson added, "In continuing response to the ongoing macroeconomic and industry challenges, we are executing a cost reduction plan with a targeted annualized run rate pre-tax savings of $100 million. In the first half of the year, we achieved approximately $25 million of this benefit. In the second half of the year, we expect to achieve approximately $50 million of savings, for a full-year 2008 impact of $75 million on a pre-tax basis. Our targeted annualized cost savings include reductions in advertising spending, corporate overhead expense and store personnel expense."

For the six-month period ended June 30, 2008, the Company reported net income from continuing operations of $109 million or $0.60 per share compared to $162 million or $0.77 per share in the prior year. After adjusting for certain items as disclosed in the attached financial tables, net income from continuing operations for the six-month period ended June 30, 2008 was $115 million or $0.64 per share, compared to $153 million or $0.73 per share. The Company's revenue for the six-month period ended June 30, 2008 totaled $7.9 billion, down 10% compared to $8.8 billion in the prior year.

The second quarter conference call may be accessed at 10:00 a.m. Eastern Time today by phone at 888-769-8515 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 12:00 (noon) p.m. Eastern Time August 1, 2008 through August 7, 2008 by calling 888-562-6304.

About AutoNation, Inc.

AutoNation, Inc., headquartered in Fort Lauderdale, Fla., is America's largest automotive retailer and has been named America's Most Admired Automotive Retailer by FORTUNE Magazine in five of the last seven years. A component of the Standard and Poor's 500 Index, AutoNation owns and operates 319 new vehicle franchises in 15 states. For additional information, please visit http://corp.autonation.com/ or www.AutoNation.com, where more than 80,000 vehicles are available for sale along with AutoNation's E-Vehicle program.