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Car Dealer AutoNation Reports Record Fourth Quarter

* Eighth consecutive record quarter of EPS from continuing operations * Fourth-quarter record EPS of $0.28 per share exceeds year-ago EPS of $0.26 per share * Excluding the benefit from the first quarter IRS settlement, full-year earnings per share from continuing operations of a record $1.32 compared to $1.19 in 2002 * Fourth-quarter reduction of 100 basis points in SG&A as a percent of gross profit; 90 basis point reduction for the full year * Company issues 2004 first-quarter EPS guidance of $0.29 to $0.31 and confirms 2004 full-year EPS outlook of $1.40 to $1.45

FORT LAUDERDALE, Fla., Feb. 5 -- AutoNation, Inc. , America's largest automotive retailer, today reported 2003 fourth- quarter net income of $79.0 million, or $0.28 per share, compared to year-ago net income of $79.4 million or $0.26 per share. The 8% increase in fourth- quarter earnings per share was driven by further leverage of its cost structure and the continued repurchase of outstanding shares.

Fourth-quarter 2003 revenue totaled $4.6 billion, an increase of $77 million compared to the year-ago period resulting from revenue growth in new vehicles of 4%, parts and service of 1% and finance and insurance of 8%. Selling, general and administrative expense (SG&A) in the quarter was $520.3 million or 75.1% of total gross profit, a 100 basis point improvement compared to a year ago. Operating income in the quarter was $130.7 million, a reduction of 16% compared to a year ago resulting from a real estate impairment charge of $27.5 million ($16.9 million after-tax or $0.06 per share) related to three franchised new vehicle stores that currently operate in converted used vehicle megastores. Excluding the effect of the impairment, operating income in the quarter was $158.2 million, an increase of $3 million or 2% compared to the period a year ago. The real estate impairment was offset by a gain of $10.2 million ($6.2 million after-tax or $0.02 per share) recognized by the Company on the sale of a non-core equity investment as well as a net income tax benefit of $10.3 million or $0.04 per share related primarily to favorable tax adjustments and settlements.

Commenting on fourth-quarter 2003 performance AutoNation Chairman and Chief Executive Officer Mike Jackson said, "AutoNation's performance in the fourth quarter was characterized by continued cost containment and revenue growth resulting from ongoing operational improvements. We were pleased to deliver our eighth consecutive quarter-over-quarter record EPS from continuing operations."

For the full year, the Company reported net income from continuing operations of $506.1 million or $1.76 per share. Excluding the $0.44 per share benefit from the first-quarter 2003 IRS tax settlement, earnings per share from continuing operations were $1.32, an 11% increase versus the prior year. The Company's revenue for the full year totaled $19.4 billion, down less than 1% versus the prior year.

  The Company's 2003 accomplishments included:

  * The addition of AutoNation to the S&P 500 index.
  * The completion of acquisitions representing 13 franchises with an annual
     revenue run rate of approximately $300 million.
  * A reduction, net of option exercises, of approximately 10% of the
     Company's outstanding common shares following the repurchase of 39.2
     million shares at a cost of $575 million.
  * The second quarter branding of 39 of the Company's franchises in
     Southern California that now operate under the Power brand and 34 of
     the Company's franchises in the Houston/Corpus Christi/Austin markets
     that now operate under the Champion brand.

Commenting on the Company's 2003 performance and the year ahead, Jackson said, "In a highly competitive environment where industry sales were down, we once again delivered double-digit EPS growth. Looking ahead, we maintain our outlook that the 2004 new vehicle market will remain intensely competitive in a stable volume environment. We confirm our full-year 2004 EPS guidance of $1.40 to $1.45 and expect first-quarter earnings per share in the range of $0.29 to $0.31."

AutoNation will discuss these results, the Company's outlook and supporting assumptions during a conference call and audio webcast this morning at 10:00 a.m. Eastern Time. To listen to the live conference call, dial (888) 428-4480 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 1:30 p.m. Eastern Time, through February 12, 2004 by calling (800) 475-6701 (access code #716118) 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. 93 on the 2003 Fortune 500 and a component of the Standard and Poor's 500 Index, AutoNation employs approximately 28,000 people and owns and operates 372 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 earnings per share from continuing operations excluding the first-quarter tax benefit and fourth-quarter operating income excluding the real estate impairment charge. 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       Year Ended
                                      December 31,          December 31,
                                     2003      2002      2003       2002

      Revenue:
        New vehicle                $2,824.1  $2,726.9  $11,791.2  $11,694.8
        Used vehicle                1,025.2   1,059.2    4,492.3    4,709.8
        Parts and service             599.5     592.3    2,457.2    2,453.3
        Finance and insurance         138.7     128.6      601.1      563.7
        Other                           8.3      11.5       39.3       56.9
      Total revenue                 4,595.8   4,518.5   19,381.1   19,478.5

      Cost of sales:
        New vehicle                 2,622.9   2,511.8   10,938.9   10,784.9
        Used vehicle                  941.0     975.4    4,089.2    4,315.1
        Parts and service             337.8     334.7    1,385.0    1,385.0
        Other                           1.0       1.8        5.2        7.0
      Total cost of sales           3,902.7   3,823.7   16,418.3   16,492.0

      Gross profit                    693.1     694.8    2,962.8    2,986.5

      Selling, general and
       administrative expenses        520.3     528.5    2,157.7    2,200.9
      Depreciation                     18.0      16.7       69.4       67.3
      Amortization                      0.3       0.5        1.6        2.4
      Loan and lease underwriting
       income, net                    (0.2)     (5.0)      (6.3)     (13.9)
      Other losses (gains)             24.0     (1.1)       26.3        3.4

      Operating income                130.7     155.2      714.1      726.4

      Floorplan interest expense     (16.9)    (19.5)     (71.4)     (74.8)
      Interest expense - IRS
       settlement                     (1.2)        --     (12.1)         --
      Other interest expense         (15.9)    (13.7)     (59.7)     (50.4)
      Interest income                   0.5       1.8        3.3       10.4
      Other income                     11.9       4.8       16.8        6.4

      Income from continuing
       operations before income
       taxes                          109.1     128.6      591.0      618.0

      Provision for income taxes       30.1      49.2      212.4      236.4
      Income tax benefit from IRS
       settlement                        --        --    (127.5)         --

      Net tax provision -
       continuing operations           30.1      49.2       84.9      236.4

      Net income from continuing
       operations                      79.0      79.4      506.1      381.6

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

      Net income before cumulative
       effect of accounting change     79.0      79.4      493.8      381.6

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

      Net income                      $79.0     $79.4     $479.2     $381.6

      Diluted earnings per share:
        Continuing operations         $0.28     $0.26      $1.76      $1.19
        Discontinued operations          --        --     (0.04)         --
        Cumulative effect of
         accounting change               --        --     (0.05)         --
        Net income                    $0.28     $0.26      $1.67      $1.19

      Weighted average common and
       common
           equivalent shares
            outstanding               282.2     309.4      287.0      321.5

      Common shares outstanding       269.7     298.0      269.7      298.0

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

  Operating Highlights           Three Months Ended December 31,
                            2003         2002   $ Variance   % Variance

  Revenue:
    New vehicle         $2,824.1     $2,726.9        $97.2          3.6
    Used vehicle         1,025.2      1,059.2       (34.0)        (3.2)
    Parts and service      599.5        592.3          7.2          1.2
    Finance and insurance  138.7        128.6         10.1          7.9
    Other                    8.3         11.5        (3.2)
                        $4,595.8     $4,518.5        $77.3          1.7

  Gross profit:
    New vehicle           $201.2       $215.1      $(13.9)        (6.5)
    Used vehicle            83.7         87.4        (3.7)        (4.2)
    Wholesale                0.5        (3.6)          4.1      (113.9)
    Used vehicle            84.2         83.8          0.4          0.5
    Parts and service      261.7        257.6          4.1          1.6
    Finance and insurance  138.7        128.6         10.1          7.9
    Other                    7.3          9.7        (2.4)
                           693.1        694.8        (1.7)        (0.2)

  Selling, general and
   administrative
   expenses                520.3        528.5          8.2          1.6

  Depreciation              18.0         16.7        (1.3)
  Amortization               0.3          0.5          0.2
  Loan and lease
   underwriting income,
   net                     (0.2)        (5.0)        (4.8)
  Restructuring and
   related impairment
   charges, net               --           --           --
  Other losses (gains)      24.0        (1.1)       (25.1)

   Operating income        130.7        155.2       (24.5)       (15.8)

  Floorplan interest
   expense                (16.9)       (19.5)          2.6         13.3
  Interest expense -
   IRS settlement          (1.2)           --        (1.2)
  Other interest expense  (15.9)       (13.7)        (2.2)       (16.1)
  Interest income            0.5          1.8        (1.3)       (72.2)
  Other income              11.9          4.8          7.1
  Income from continuing
   operations before
   income taxes           $109.1       $128.6      $(19.5)       (15.2)

  Retail vehicle unit
   sales:
     New                  94,886       95,228        (342)        (0.4)
     Used                 54,618       55,375        (757)        (1.4)
                         149,504      150,603      (1,099)        (0.7)

  Revenue per vehicle
   retailed:
     New                $ 29,763     $ 28,635       $1,128          3.9
     Used               $ 15,495     $ 15,543       $ (48)        (0.3)

  Gross profit per
   vehicle retailed:
     New                  $2,120       $2,259       $(139)        (6.2)
     Used                 $1,532       $1,578       $ (46)        (2.9)
     Finance and
      insurance             $928         $854          $74          8.7

    Operating Highlights             Year Ended December 31,
                            2003         2002   $ Variance   % Variance

  Revenue:
    New vehicle       $ 11,791.2    $11,694.8        $96.4          0.8
    Used vehicle         4,492.3      4,709.8      (217.5)        (4.6)
    Parts and service    2,457.2      2,453.3          3.9          0.2
    Finance and
     insurance             601.1        563.7         37.4          6.6
    Other                   39.3         56.9       (17.6)
                      $ 19,381.1    $19,478.5      $(97.4)        (0.5)

  Gross profit:
    New vehicle           $852.3      $ 909.9      $(57.6)        (6.3)
    Used vehicle           403.1        394.7          8.4          2.1
    Parts and service    1,072.2      1,068.3          3.9          0.4
    Finance and
     insurance             601.1        563.7         37.4          6.6
    Other                   34.1         49.9       (15.8)           --
                         2,962.8      2,986.5       (23.7)        (0.8)

  Selling, general and
   administrative
   expenses              2,157.7      2,200.9         43.2          2.0

  Depreciation              69.4         67.3        (2.1)
  Amortization               1.6          2.4          0.8
  Loan and lease
   underwriting income,
   net                     (6.3)       (13.9)        (7.6)
  Restructuring and
   related impairment
   charges, net               --           --           --
  Other losses (gains)      26.3          3.4       (22.9)
   Operating income        714.1        726.4       (12.3)        (1.7)

  Floorplan interest
   expense                (71.4)       (74.8)          3.4          4.5
  Interest expense -
   IRS settlement         (12.1)            -       (12.1)
  Other interest expense  (59.7)       (50.4)        (9.3)       (18.5)
  Interest income            3.3         10.4        (7.1)       (68.3)
  Other income              16.8          6.4         10.4
  Income from continuing
   operations before
   income taxes           $591.0      $ 618.0      $(27.0)        (4.4)

  Retail vehicle unit
   sales:
     New                 414,765      426,706     (11,941)        (2.8)
     Used                244,926      247,365      (2,439)        (1.0)
                         659,691      674,071     (14,380)        (2.1)

  Revenue per vehicle
   retailed:
     New                 $28,429      $27,407       $1,022          3.7
     Used                $15,131      $15,308       $(177)        (1.2)

  Gross profit per
   vehicle retailed:
     New                  $2,055      $ 2,132        $(77)        (3.6)
     Used                 $1,638      $ 1,629           $9          0.6
     Finance and
      insurance            $ 911         $836          $75          9.0

    Operating Percentages   Three Months Ended           Year Ended
                               December 31,              December 31,
                          % 2003       % 2002       % 2003       % 2002

  Revenue mix percentages:
    New vehicle             61.4         60.3         60.8         60.0
    Used vehicle            22.3         23.4         23.2         24.2
    Parts and service       13.0         13.1         12.7         12.6
    Finance and insurance    3.0          2.8          3.1          2.9
    Other                    0.3          0.4          0.2          0.3
                           100.0        100.0        100.0        100.0

  Operating items as a
   percentage of revenue:
    Gross profit:
     New vehicle             7.1          7.9          7.2          7.8
     Used vehicle - retail   9.9         10.2         10.8         10.6
     Parts and service      43.7         43.5         43.6         43.5
     Total                  15.1         15.4         15.3         15.3
  Selling, general and
   administrative
   expenses                 11.3         11.7         11.1         11.3
  Operating income           2.8          3.4          3.7          3.7

  Operating items as a
   percentage of total
   gross profit:
    Selling, general and
     administrative
     expenses               75.1         76.1         72.8         73.7
  Operating income          18.9         22.3         24.1         24.3

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

       Cash Flow     Three Months Ended   Year Ended
      Information       December 31,      December 31,
                      2003      2002    2003     2002

  Capital
   expenditures,
   excluding property
   operating lease
   buy-outs          $44.1     $63.5  $123.5   $163.4
  Property operating
   lease buy-outs      $--      $8.8    $9.8    $19.8
  Stock repurchases $110.0    $190.9  $575.2   $389.9
  Acquisitions        $1.0      $2.3   $49.1   $166.5
  Proceeds from
   exercises of
   stock options     $14.8      $3.1  $116.7    $78.7

  Floorplan Assistance
   and Expense            Three Months Ended          Year Ended
                              December 31,            December 31,
                      2003      2002  Variance   2003      2002  Variance

  Floorplan
   assistance
   (included in
   cost of
   operations)       $27.8     $31.8  $(4.0)  $ 116.5   $ 127.9 $(11.4)
  Floorplan
   interest
   expense          (16.9)    (19.5)     2.6   (71.4)    (74.8)     3.4

    Net inventory
     carrying
     benefit         $10.9     $12.3  $(1.4)    $45.1     $53.1  $(8.0)

     Balance Sheet
      and Other
      Highlights

               December 31, December 31,
                      2003      2002

  Cash and cash
   equivalents      $170.8    $176.2
  Inventory       $2,919.3  $2,598.4
  Floorplan notes
   payable        $2,809.8  $2,302.5
  Non-vehicle
   debt             $824.4    $651.3
  Equity          $3,949.8  $3,910.2
  New days supply
   (industry
    standard of
    selling days,
    including
    fleet)         71 days   63 days

  Used days supply
   (trailing 30
   days)           41 days   40 days

    Comparable Basis
     Reconciliations                       Diluted
                        Net Income    Earnings Per Share
                        Year Ended        Year Ended
                        December 31,      December 31,
                      2003      2002    2003     2002

  Net income, as
   reported         $479.2    $381.6   $1.67    $1.19

  Discontinued
   operations         12.3        --    0.04       --
  Cumulative effect
   of accounting
   change             14.6        --    0.05       --
  Net income from
   continuing
   operations, as
   reported          506.1     381.6    1.76     1.19
  Income tax benefit
   from IRS
   settlement      (127.5)        --  (0.44)       --
  Net income,
   excluding income
   tax benefit from
   IRS Settlement   $378.6    $381.6   $1.32    $1.19

                Three Months Ended December 31, 2003
                                       Diluted
                   Operating    Net    Earnings
                    Income    Income   per Share

  Reported earnings
   from continuing
   operations       $130.7     $79.0   $0.28

  Gain from income
   tax adjustments      --    (10.3)  (0.04)
  Gain on sale of
   non-core equity
   investment           --     (6.2)  (0.02)
  Impairment loss on
   converted
   megastores         27.5      16.9    0.06

  Adjusted earnings
   from continuing
   operations       $158.2     $79.4   $0.28

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

    Operating Highlights         Three Months Ended December 31,
                            2003         2002   $ Variance   % Variance

  Revenue:
    New vehicle         $2,767.2     $2,696.5        $70.7          2.6
    Used vehicle           997.8      1,040.9       (43.1)        (4.1)
    Parts and service      591.9        583.4          8.5          1.5
    Finance and insurance  135.6        127.5          8.1          6.4
    Other                    5.7          8.9        (3.2)
                        $4,498.2     $4,457.2        $41.0          0.9

  Gross profit:
    New vehicle           $197.2       $213.1      $(15.9)        (7.5)
    Used vehicle            81.4         82.1        (0.7)        (0.9)
    Parts and service      258.3        253.9          4.4          1.7
    Finance and insurance  135.6        127.5          8.1          6.4
    Other                    5.4          7.5        (2.1)
                          $677.9       $684.1       $(6.2)        (0.9)

  Retail vehicle
   unit sales:
    New                   93,143       94,078        (935)        (1.0)
    Used                  53,679       54,470        (791)        (1.5)
                         146,822      148,548      (1,726)        (1.2)

  Revenue per vehicle
   retailed:
    New                  $29,709     $ 28,662       $1,047          3.7
    Used                 $15,500     $ 15,587       $ (87)        (0.6)

  Gross profit per
   vehicle retailed:
  New                     $2,117       $2,265       $(148)        (6.5)
  Used                    $1,535       $1,588       $ (53)        (3.3)
  Finance and insurance     $924         $858          $66          7.7

      Operating Highlights          Year Ended December 31,
                            2003         2002   $ Variance   % Variance

  Revenue
    New vehicle        $11,541.9    $11,552.7      $(10.8)        (0.1)
    Used vehicle         4,357.5      4,615.7      (258.2)        (5.6)
    Parts and service    2,411.4      2,408.1          3.3          0.1
    Finance and
     insurance             588.6        555.8         32.8          5.9
    Other                   24.0         37.4       (13.4)
                       $18,923.4    $19,169.7     $(246.3)        (1.3)

  Gross profit
    New vehicle           $835.9       $899.6     $ (63.7)        (7.1)
    Used vehicle           390.5        387.1          3.4          0.9
    Parts and service    1,051.3      1,048.7          2.6          0.2
    Finance and
     insurance             588.6        555.8         32.8          5.9
    Other                   21.6         33.4       (11.8)
                        $2,887.9     $2,924.6     $ (36.7)        (1.3)

  Retail vehicle
   unit sales:
    New                  406,467      421,151     (14,684)        (3.5)
    Used                 239,750      242,288      (2,538)        (1.0)
                         646,217      663,439     (17,222)        (2.6)

  Revenue per vehicle
   retailed:
    New                  $28,396      $27,431         $965          3.5
    Used                 $15,136      $15,361       $(225)        (1.5)

  Gross profit per
   vehicle retailed:
    New                   $2,057       $2,136        $(79)        (3.7)
    Used                  $1,643       $1,641           $2          0.1
    Finance and insurance  $ 911        $ 838          $73          8.7

    Operating Percentages   Three Months Ended           Year Ended
                                December 31,             December 31,
                          % 2003       % 2002       % 2003       % 2002

  Revenue mix percentages:
    New vehicle             61.5         60.5         61.0         60.3
    Used vehicle            22.2         23.4         23.0         24.1
    Parts and service       13.2         13.1         12.7         12.6
    Finance and insurance    3.0          2.9          3.1          2.9
    Other                    0.1          0.1          0.2          0.1
                           100.0        100.0        100.0        100.0

  Operating items as a
   percentage of revenue:
    Gross Profit:
    New vehicle              7.1          7.9          7.2          7.8
    Used vehicle - retail    9.9         10.2         10.9         10.7
    Parts and service       43.6         43.5         43.6         43.5
    Total                   15.1         15.3         15.3         15.3
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