AutoNation Reports 2008 Third Quarter Results of Operations
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- Third quarter net loss from continuing operations of $1.40 billion, including $1.46 billion after-tax, non-cash goodwill and franchise impairment charges recorded under SFAS No. 142
- $0.25 per share net income from continuing operations in the third quarter, excluding goodwill and franchise impairment charges and other items
- The Company remains in compliance with all financial covenants in its debt agreements
FORT LAUDERDALE, FL - November 6, 2008: AutoNation, Inc., America's largest automotive retailer, today reported a 2008 third quarter net loss from continuing operations of $1.40 billion or $7.95 per share. In the quarter, the Company recorded non-cash charges for goodwill and franchise impairments of $1.46 billion after-tax. After adjusting for the impairment charges and certain other items disclosed in the attached financial tables, net income from continuing operations for the 2008 third quarter was $44 million or $0.25 per share, compared to $73 million or $0.37 per share in the prior year.
Third quarter 2008 revenue totaled $3.5 billion, compared to $4.5 billion in the year-ago period, driven primarily by lower new vehicle sales. In the third quarter, total U.S. industry new vehicle retail sales declined 31%, based on CNW Research data. In comparison, in the third quarter AutoNation's new vehicle unit sales declined 24%.
Commenting on the third quarter, Mike Jackson, Chairman and Chief Executive Officer, said, "The third quarter was negatively impacted by the credit crisis that escalated in September into a full blown credit panic. This created a credit freeze that broke consumer confidence and, along with a continued housing depression, accelerated the decline in the U.S. economy and auto retail market. As a result of the adverse market conditions and a decline in our stock price, we were required under accounting rules to record non-cash goodwill and franchise impairment charges in the third quarter. Notwithstanding the impairment charges, the Company remains in compliance with all of the financial covenants in its credit facilities and the indenture for its senior notes. Furthermore, despite these headwinds, AutoNation continues to generate solid cash flow as demonstrated by the $104 million reduction in non-vehicle debt during the quarter, and excluding the non-cash charges, AutoNation was solidly profitable in the third quarter. Year to date, debt reduction totals $589 million, $362 million of non-vehicle debt and $227 million of vehicle floor plan debt."
Looking forward, Jackson also stated, "We expect the rest of 2008 will continue to be challenging and foresee U.S. industry new vehicle sales for 2008 in the low 13-million unit level, an 18-year low. While at this time it is hard to predict new vehicle sales for 2009, the most conservative industry forecast is in the range of 12 million new vehicle units. Even at a 12 million new vehicle level, we are confident that AutoNation will remain profitable and in compliance with debt covenants."
During the third quarter of 2008, in response to changes in the automotive retail market, including the disproportionate decline in revenue and earnings from the Company's domestic franchises relative to its import and premium luxury franchises, AutoNation made changes to its management approach that divided its business into three operating segments.
AutoNation has added supplemental reporting which provides additional detail on the three operating segments: Domestic, Import, and Premium Luxury. The Domestic segment is comprised of stores that sell vehicles manufactured by General Motors, Ford, and Chrysler, the Import segment is comprised of stores that sell vehicles manufactured primarily by Toyota, Honda, and Nissan, and the Premium Luxury segment is comprised of stores that sell vehicles manufactured primarily by Mercedes, BMW, and Lexus.
Segment Results for the Quarter
-- Domestic - Domestic segment income (1) was $23 million compared to year-ago segment income of $54 million. Third quarter Domestic retail new vehicle unit sales declined 36%. In comparison, U.S. industry Domestic retail new vehicle unit sales declined 33% according to CNW Research.
-- Import - Import segment income was $53 million compared to year-ago segment income of $69 million. Third quarter Import retail new vehicle unit sales declined 18%. In comparison, U.S. industry Import new vehicle retail unit sales declined 26% according to CNW Research.
(1) Segment income is defined as operating income less floor plan interest expense
-- Premium Luxury - Premium Luxury segment income was $43 million compared to year-ago segment income of $56 million. Third quarter Premium Luxury retail new vehicle unit sales declined 14%. In comparison, U.S. industry Premium Luxury retail new vehicle unit sales declined 24% according to CNW Research.
For the nine-month period ended September 30, 2008, the Company reported net loss from continuing operations of $1.30 billion or $7.27 per share, compared to net income from continuing operations of $238 million or $1.16 per share in the prior year. After adjusting for the impairment charges and certain other items as disclosed in the attached financial tables, net income from continuing operations for the nine-month period ended September 30, 2008 was $159 million or $0.89 per share, compared to $226 million or $1.10 per share in the prior year. The Company's revenue for the nine-month period ended September 30, 2008 totaled $11.4 billion, down 14% compared to $13.2 billion in the prior year.
The third quarter conference call may be accessed at 11:00 a.m. Eastern Time today by phone at 888-769-8515 or via the Internet (audio webcast) at http://www.autonation.com/ by clicking on the "About Us" link then clicking on "Investors" and then "Webcasts." A playback of the conference call will be available after 12:00 (noon) p.m. Eastern Time November 6, 2008 through November 13, 2008 by calling 888-567-0381.
About AutoNation, Inc.
AutoNation, Inc., headquartered in Fort Lauderdale, Fla., is America's largest automotive retailer and has been named America's Most Admired Automotive Retailer by FORTUNE Magazine in five of the last seven years. A component of the Standard and Poor's 500 Index, AutoNation owns and operates 311 new vehicle franchises in 15 states. For additional information, please visit http://corp.autonation.com/ or www.AutoNation.com, where more than 80,000 vehicles are available for sale along with AutoNation's E-Vehicle program.
NON-GAAP FINANCIAL MEASURES
The attached financial tables contain certain non-GAAP financial measures as defined under SEC rules, such as net income and diluted earnings per share from continuing operations, adjusted in each case to exclude certain items disclosed in the attached financial tables. As required by SEC rules, the Company has provided reconciliations of these measures to the most directly comparable GAAP measures, which are set forth in the attachments to this release. The Company believes that each of the foregoing non-GAAP financial measures improves the transparency of the Company's disclosure, provides a meaningful presentation of the Company's results from its core business operations excluding the impact of items not related to the Company's ongoing core business operations, and improves the period-to-period comparability of the Company's results from its core business operations.
AUTONATION, INC.
UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENTS
($ in millions, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
Revenue:
New vehicle $1,974.6 $2,634.4 $6,335.4 $7,615.0
Used vehicle 822.0 1,068.3 2,728.0 3,197.2
Parts and service 612.1 642.7 1,895.6 1,919.0
Finance and insurance, net 119.3 150.9 398.8 445.2
Other 15.4 17.0 49.8 51.0
Total revenue 3,543.4 4,513.3 11,407.6 13,227.4
Cost of sales:
New vehicle 1,844.5 2,448.3 5,916.5 7,075.1
Used vehicle 754.0 981.3 2,496.9 2,916.7
Parts and service 346.3 361.6 1,071.4 1,079.1
Other 6.7 8.0 22.1 21.2
Total cost of sales 2,951.5 3,799.2 9,506.9 11,092.1
Gross profit 591.9 714.1 1,900.7 2,135.3
Selling, general and
administrative expenses 452.7 506.7 1,432.0 1,516.6
Depreciation and amortization 22.7 22.0 68.4 64.0
Goodwill impairment (1) 1,610.0 - 1,610.0 -
Franchise rights impairment 141.4 - 146.5 1.0
Other expenses, net 2.8 0.1 3.2 0.6
Operating income (loss) (1,637.7) 185.3 (1,359.4) 553.1
Floorplan interest expense (19.8) (32.9) (66.2) (96.4)
Other interest expense (20.9) (29.6) (69.3) (82.4)
Gain on senior note
repurchases 12.1 - 12.1 -
Interest income 0.7 0.8 1.5 2.6
Other gains (losses), net (2.3) (0.9) (2.9) 0.1
Income (loss) from continuing
operations before income
taxes (1,667.9) 122.7 (1,484.2) 377.0
Income tax provision (benefit) (263.0) 46.1 (188.1) 139.1
Net income (loss) from
continuing operations (1,404.9) 76.6 (1,296.1) 237.9
Loss from discontinued
operations, net of income
taxes (7.8) (4.5) (14.1) (10.9)
Net income (loss) $(1,412.7) $72.1 $(1,310.2) $227.0
Diluted earnings (loss) per
share:
Continuing operations $(7.95) $0.39 $(7.27) $1.16
Discontinued operations $(0.04) $(0.02) $(0.08) $(0.05)
Net income (loss) $(7.99) $0.37 $(7.35) $1.10
Weighted average common
shares outstanding 176.7 197.5 178.2 205.6
Common shares outstanding,
net of treasury stock, at
September 30 176.9 183.9 176.9 183.9
(1) The non-cash goodwill impairment charge is an estimate because we have
not finalized the valuation of certain assets and liabilities. We
expect to finalize this non-cash goodwill impairment amount during the
fourth quarter of 2008, and any adjustment will be reflected in our
results for the fourth quarter of 2008.
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA
($ in millions, except per vehicle data)
Operating Highlights Three Months Ended September 30,
$ %
2008 2007 Variance Variance
Revenue:
New vehicle $1,974.6 $2,634.4 $(659.8) (25.0)
Retail used vehicle 695.1 847.3 (152.2) (18.0)
Wholesale 126.9 221.0 (94.1) (42.6)
Used vehicle 822.0 1,068.3 (246.3) (23.1)
Parts and service 612.1 642.7 (30.6) (4.8)
Finance and insurance, net 119.3 150.9 (31.6) (20.9)
Other 15.4 17.0 (1.6)
Total revenue $3,543.4 $4,513.3 $(969.9) (21.5)
Gross profit:
New vehicle $130.1 $186.1 $(56.0) (30.1)
Retail used vehicle 70.7 87.8 (17.1) (19.5)
Wholesale (2.7) (0.8) (1.9)
Used vehicle 68.0 87.0 (19.0) (21.8)
Parts and service 265.8 281.1 (15.3) (5.4)
Finance and insurance 119.3 150.9 (31.6) (20.9)
Other 8.7 9.0 (0.3)
Total gross profit 591.9 714.1 (122.2) (17.1)
Selling, general and administrative
expenses 452.7 506.7 54.0 10.7
Depreciation and amortization 22.7 22.0 (0.7)
Goodwill impairment 1,610.0 - (1,610.0)
Franchise rights impairment 141.4 - (141.4)
Other expenses, net 2.8 0.1 (2.7)
Operating income (loss) (1,637.7) 185.3 (1,823.0)
Floorplan interest expense (19.8) (32.9) 13.1
Other interest expense (20.9) (29.6) 8.7
Gain on senior note repurchases 12.1 - 12.1
Interest income 0.7 0.8 (0.1)
Other gains (losses), net (2.3) (0.9) (1.4)
Income (loss) from continuing
operations before income taxes $(1,667.9) $122.7 $(1,790.6)
Retail vehicle unit sales:
New 65,698 86,191 (20,493) (23.8)
Used 45,629 52,103 (6,474) (12.4)
111,327 138,294 (26,967) (19.5)
Revenue per vehicle retailed:
New $30,056 $30,565 $(509) (1.7)
Used $15,234 $16,262 $(1,028) (6.3)
Gross profit per vehicle retailed:
New $1,980 $2,159 $(179) (8.3)
Used $1,549 $1,685 $(136) (8.1)
Finance and insurance $1,072 $1,091 $(19) (1.7)
Operating Highlights Nine Months Ended September 30,
$ %
2008 2007 Variance Variance
Revenue:
New vehicle $6,335.4 $7,615.0 $(1,279.6) (16.8)
Retail used vehicle 2,285.6 2,552.3 (266.7) (10.4)
Wholesale 442.4 644.9 (202.5) (31.4)
Used vehicle 2,728.0 3,197.2 (469.2) (14.7)
Parts and service 1,895.6 1,919.0 (23.4) (1.2)
Finance and insurance, net 398.8 445.2 (46.4) (10.4)
Other 49.8 51.0 (1.2)
Total revenue $11,407.6 $13,227.4 $(1,819.8) (13.8)
Gross profit:
New vehicle $418.9 $539.9 $(121.0) (22.4)
Retail used vehicle 235.1 277.7 (42.6) (15.3)
Wholesale (4.0) 2.8 (6.8)
Used vehicle 231.1 280.5 (49.4) (17.6)
Parts and service 824.2 839.9 (15.7) (1.9)
Finance and insurance 398.8 445.2 (46.4) (10.4)
Other 27.7 29.8 (2.1)
Total gross profit 1,900.7 2,135.3 (234.6) (11.0)
Selling, general and
administrative expenses 1,432.0 1,516.6 84.6 5.6
Depreciation and amortization 68.4 64.0 (4.4)
Goodwill impairment 1,610.0 - (1,610.0)
Franchise rights impairment 146.5 1.0 (145.5)
Other expenses, net 3.2 0.6 (2.6)
Operating income (loss) (1,359.4) 553.1 (1,912.5)
Floorplan interest expense (66.2) (96.4) 30.2
Other interest expense (69.3) (82.4) 13.1
Gain on senior note repurchases 12.1 - 12.1
Interest income 1.5 2.6 (1.1)
Other gains (losses), net (2.9) 0.1 (3.0)
Income (loss) from continuing
operations before income taxes $(1,484.2) $377.0 $(1,861.2)
Retail vehicle unit sales:
New 210,606 247,524 (36,918) (14.9)
Used 145,435 155,742 (10,307) (6.6)
356,041 403,266 (47,225) (11.7)
Revenue per vehicle retailed:
New $30,082 $30,765 $(683) (2.2)
Used $15,716 $16,388 $(672) (4.1)
Gross profit per vehicle retailed:
New $1,989 $2,181 $(192) (8.8)
Used $1,617 $1,783 $(166) (9.3)
Finance and insurance $1,120 $1,104 $16 1.4
Three Months Ended Nine Months Ended
Operating Percentages September 30, September 30,
2008(%) 2007(%) 2008(%) 2007(%)
Revenue mix percentages:
New vehicle 55.7 58.4 55.5 57.6
Used vehicle 23.2 23.7 23.9 24.2
Parts and service 17.3 14.2 16.6 14.5
Finance and insurance, net 3.4 3.3 3.5 3.4
Other 0.4 0.4 0.5 0.3
100.0 100.0 100.0 100.0
Gross profit mix percentages:
New vehicle 22.0 26.1 22.0 25.3
Used vehicle 11.5 12.2 12.2 13.1
Parts and service 44.9 39.4 43.4 39.3
Finance and insurance 20.2 21.1 21.0 20.8
Other 1.4 1.2 1.4 1.5
100.0 100.0 100.0 100.0
Operating items as a percentage of
revenue:
Gross profit:
New vehicle 6.6 7.1 6.6 7.1
Used vehicle - retail 10.2 10.4 10.3 10.9
Parts and service 43.4 43.7 43.5 43.8
Total 16.7 15.8 16.7 16.1
Selling, general and administrative
expenses 12.8 11.2 12.6 11.5
Operating income (loss) NM 4.1 NM 4.2
Operating items as a percentage of
total gross profit:
Selling, general and administrative
expenses 76.5 71.0 75.3 71.0
Operating income (loss) NM 25.9 NM 25.9
NM = Not Meaningful
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA
($ in millions, except per vehicle data)
Segment Operating Highlights Three Months Ended September 30,
$ %
2008 2007 Variance Variance
Revenue:
Domestic $1,199.9 $1,723.1 $(523.2) (30.4)
Import 1,412.5 1,703.4 (290.9) (17.1)
Premium luxury 904.1 1,060.5 (156.4) (14.7)
Corporate and other 26.9 26.3 0.6 2.3
Total revenue $3,543.4 $4,513.3 $(969.9) (21.5)
*Segment income (loss)
Domestic $23.1 $54.2 $(31.1) (57.4)
Import 52.7 68.9 (16.2) (23.5)
Premium luxury 43.3 55.7 (12.4) (22.3)
Corporate and other (1,776.6) (26.4) (1,750.2)
Total segment income (loss) (1,657.5) 152.4 (1,809.9)
Add: Floorplan interest expense 19.8 32.9 (13.1)
Operating income (loss) $(1,637.7) $185.3 $(1,823.0)
* Segment income (loss) is defined as operating income net of
floorplan interest expense
Retail new vehicle unit sales:
Domestic 19,561 30,353 (10,792) (35.6)
Import 35,820 43,908 (8,088) (18.4)
Premium luxury 10,317 11,930 (1,613) (13.5)
65,698 86,191 (20,493) (23.8)
Segment Operating Highlights Nine Months Ended September 30,
$ %
2008 2007 Variance Variance
Revenue:
Domestic $3,985.1 $5,076.6 $(1,091.5) (21.5)
Import 4,471.3 4,911.6 (440.3) (9.0)
Premium luxury 2,863.7 3,159.4 (295.7) (9.4)
Corporate and other 87.5 79.8 7.7 9.6
Total revenue $11,407.6 $13,227.4 $(1,819.8) (13.8)
*Segment income (loss)
Domestic $92.8 $167.9 $(75.1) (44.7)
Import 167.6 198.3 (30.7) (15.5)
Premium luxury 145.6 167.7 (22.1) (13.2)
Corporate and other (1,831.6) (77.2) (1,754.4)
Total segment income (loss) (1,425.6) 456.7 (1,882.3)
Add: Floorplan interest expense 66.2 96.4 (30.2)
Operating income (loss) $(1,359.4) $553.1 $(1,912.5)
* Segment income (loss) is defined as operating income net of
floorplan interest expense
Retail new vehicle unit sales:
Domestic 65,879 88,090 (22,211) (25.2)
Import 113,035 124,464 (11,429) (9.2)
Premium luxury 31,692 34,970 (3,278) (9.4)
210,606 247,524 (36,918) (14.9)
Brand Mix - New Vehicle
Retail Units Sold
Three Months Ended Nine Months Ended
September 30, September 30,
2008(%) 2007(%) 2008(%) 2007(%)
Domestic:
Ford, Lincoln-Mercury 13.0 14.8 13.6 15.5
Chevrolet, Pontiac,
Buick, Cadillac, GMC 11.9 13.5 12.2 13.4
Chrysler, Jeep, Dodge 4.8 6.9 5.5 6.8
Domestic total 29.7 35.2 31.3 35.7
Import:
Honda 13.8 13.1 13.8 12.5
Toyota 20.7 20.3 21.0 20.3
Nissan 13.3 11.7 12.4 11.5
Other imports 6.7 5.8 6.4 6.0
Import total 54.5 50.9 53.6 50.3
Premium Luxury:
Mercedes 6.9 6.0 6.6 6.0
BMW 5.1 3.9 4.5 4.0
Lexus 2.4 2.6 2.7 2.7
Other premium luxury
(Land Rover, Porsche) 1.4 1.4 1.3 1.3
Premium Luxury total 15.8 13.9 15.1 14.0
100.0 100.0 100.0 100.0
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA, Continued
($ in millions, except per share data)
Capital Expenditures / Stock Three Months Ended Nine Months Ended
Repurchases September 30, September 30,
2008 2007 2008 2007
Capital expenditures $55.7 $49.7 $97.2 $128.6
Acquisitions $- $3.4 $29.4 $4.2
Proceeds from exercises of stock
options $- $3.3 $1.0 $91.9
Stock repurchases:
Aggregate purchase price $- $340.9 $54.1 $580.8
Shares repurchased (in millions) - 18.2 3.8 29.3
Floorplan Assistance and Three Months Ended Nine Months Ended
Expense September 30, September 30,
2008 2007 Variance 2008 2007 Variance
Floorplan assistance earned
(included in cost of sales) $17.9 $27.3 $(9.4) $58.2 $75.2 $(17.0)
Floorplan interest expense
(new vehicles) (18.4) (32.8) 14.4 (63.9) (96.2) 32.3
Net inventory carrying
cost $(0.5) $(5.5) $5.0 $(5.7) $(21.0) $15.3
Balance Sheet and Other Highlights
September December September
30, 2008 31, 2007 30, 2007
Cash and cash equivalents $60.8 $33.0 $29.2
Inventory $1,967.5 $2,262.0 $2,169.9
Total floorplan notes payable $1,899.1 $2,126.4 $1,981.4
Non-vehicle debt $1,413.7 $1,775.8 $1,731.7
Equity $2,127.8 $3,473.5 $3,476.8
New days supply (industry standard
of selling days, including fleet) 62 days 52 days 48 days
Used days supply (trailing 30 days) 41 days 44 days 43 days
AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA, Continued
($ in millions, except per share data)
Comparable Basis Reconciliations*
Three Months Ended September 30,
Diluted Earnings
Net Income (Loss) Per Share
2008 2007 2008 2007
As reported $(1,412.7) $72.1 $(7.99) $0.37
Discontinued operations, net of
income taxes 7.8 4.5 $0.04 $0.02
From continuing operations, as
reported (1,404.9) 76.6 $(7.95) $0.39
Impairment of goodwill and
franchise rights 1,456.0 - $8.24 $-
Gain on senior note repurchases (7.4) - $(0.04) $-
Income tax adjustments - (3.4) $- $(0.02)
Adjusted $43.7 $73.2 $0.25 $0.37
Nine Months Ended September 30,
Diluted Earnings
Net Income (Loss) Per Share
2008 2007 2008 2007
As reported $(1,310.2) $227.0 $(7.35) $1.10
Discontinued operations, net of
income taxes 14.1 10.9 $0.08 $0.05
From continuing operations, as
reported (1,296.1) 237.9 $(7.27) $1.16
Impairment of goodwill and
franchise rights 1,459.1 - $8.19 $-
Gain on senior note repurchases (7.3) - $(0.04) $-
Stock compensation expense
adjustment 3.2 - $0.02 $-
Income tax adjustments - (12.0) $- $(0.06)
Adjusted $158.9 $225.9 $0.89 $1.10
* Please refer to the "Non-GAAP Financial Measures" section of the Press
Release.
AUTONATION, INC.
UNAUDITED SAME STORE DATA
($ in millions, except per vehicle data)
Operating Highlights Three Months Ended September 30,
$ %
2008 2007 Variance Variance
Revenue:
New vehicle $1,966.0 $2,634.4 $(668.4) (25.4)
Retail used vehicle 690.3 847.3 (157.0) (18.5)
Wholesale 125.0 220.4 (95.4) (43.3)
Used vehicle 815.3 1,067.7 (252.4) (23.6)
Parts and service 609.5 642.7 (33.2) (5.2)
Finance and insurance, net 118.7 150.9 (32.2) (21.3)
Other 4.6 5.6 (1.0) (17.9)
Total revenue $3,514.1 $4,501.3 $(987.2) (21.9)
Gross profit:
New vehicle $129.3 $186.1 $(56.8) (30.5)
Retail used vehicle 70.3 87.8 (17.5) (19.9)
Wholesale (3.2) (1.4) (1.8)
Used vehicle 67.1 86.4 (19.3) (22.3)
Parts and service 264.0 280.3 (16.3) (5.8)
Finance and insurance 118.7 150.9 (32.2) (21.3)
Other 5.4 5.9 (0.5)
Total gross profit $584.5 $709.6 $(125.1) (17.6)
Retail vehicle unit sales:
New 65,458 86,191 (20,733) (24.1)
Used 45,382 52,103 (6,721) (12.9)
110,840 138,294 (27,454) (19.9)
Revenue per vehicle retailed:
New $30,035 $30,565 $(530) (1.7)
Used $15,211 $16,262 $(1,051) (6.5)
Gross profit per vehicle retailed:
New $1,975 $2,159 $(184) (8.5)
Used $1,549 $1,685 $(136) (8.1)
Finance and insurance $1,071 $1,091 $(20) (1.8)
Operating Highlights Nine Months Ended September 30,
$ %
2008 2007 Variance Variance
Revenue:
New vehicle $6,306.5 $7,615.0 $(1,308.5) (17.2)
Retail used vehicle 2,270.7 2,552.3 (281.6) (11.0)
Wholesale 436.7 643.3 (206.6) (32.1)
Used vehicle 2,707.4 3,195.6 (488.2) (15.3)
Parts and service 1,884.8 1,919.0 (34.2) (1.8)
Finance and insurance, net 397.1 445.2 (48.1) (10.8)
Other 16.2 18.9 (2.7) (14.3)
Total revenue $11,312.0 $13,193.7 $(1,881.7) (14.3)
Gross profit:
New vehicle $416.3 $539.9 $(123.6) (22.9)
Retail used vehicle 233.6 277.7 (44.1) (15.9)
Wholesale (5.5) 1.2 (6.7)
Used vehicle 228.1 278.9 (50.8) (18.2)
Parts and service 817.6 838.2 (20.6) (2.5)
Finance and insurance 397.1 445.2 (48.1) (10.8)
Other 17.4 19.3 (1.9)
Total gross profit $1,876.5 $2,121.5 $(245.0) (11.5)
Retail vehicle unit sales:
New 209,822 247,524 (37,702) (15.2)
Used 144,690 155,742 (11,052) (7.1)
354,512 403,266 (48,754) (12.1)
Revenue per vehicle retailed:
New $30,056 $30,765 $(709) (2.3)
Used $15,694 $16,388 $(694) (4.2)
Gross profit per vehicle
retailed:
New $1,984 $2,181 $(197) (9.0)
Used $1,614 $1,783 $(169) (9.5)
Finance and insurance $1,120 $1,104 $16 1.4
Three Months Ended Nine Months Ended
Operating Percentages September 30, September 30,
2008(%) 2007(%) 2008(%) 2007(%)
Revenue mix percentages:
New vehicle 55.9 58.5 55.8 57.7
Used vehicle 23.2 23.7 23.9 24.2
Parts and service 17.3 14.3 16.7 14.5
Finance and insurance, net 3.4 3.4 3.5 3.4
Other 0.2 0.1 0.1 0.2
100.0 100.0 100.0 100.0
Gross profit mix percentages:
New vehicle 22.1 26.2 22.2 25.4
Used vehicle 11.5 12.2 12.2 13.1
Parts and service 45.2 39.5 43.6 39.5
Finance and insurance 20.3 21.3 21.2 21.0
Other 0.9 0.8 0.8 1.0
100.0 100.0 100.0 100.0
Operating items as a percentage of
revenue:
Gross Profit:
New vehicle 6.6 7.1 6.6 7.1
Used vehicle - retail 10.2 10.4 10.3 10.9
Parts and service 43.3 43.6 43.4 43.7
Total 16.6 15.8 16.6 16.1
AUTONATION, INC.
KEY CREDIT AGREEMENT COVENANT COMPLIANCE CALCULATIONS
September 30, 2008
($ millions)
Income Statement Information for the
last twelve months
(October 1, 2007 - September 30, 2008):
Net Income (Loss) from Continuing Operations $(1,245.7)
Interest Expense 187.8
Income Tax Provision (Benefit) (155.8)
Depreciation and Amortization 94.7
Stock-based Compensation Expense (SFAS No. 123R) 21.5
Impairment charges (including goodwill, franchise rights,
and long-lived assets) 1,761.1
EBITDA 663.6
Floorplan Interest Expense (98.9)
Adjusted EBITDA $564.7
As of September 30, 2008:
Funded Indebtedness (primarily comprised of current
and long-term debt and letters of credit) 1,497.5
Vehicle Secured Indebtedness (Floorplan Payables) 1,899.1
Funded Indebtedness Including Floorplan 3,396.6
Shareholders' Equity 2,127.8
Total Capitalization Including Floorplan $5,524.4
Ratio of Funded Indebtedness/Adjusted EBITDA 2.65
Covenant less than 3.00
Ratio of Funded Indebtedness Including Floorplan/
Total Capitalization Including Floorplan 61.5%
Covenant less than 65.0%