AutoNation 2000 Annual Report Download - page 28

Download and view the complete annual report

Please find page 28 of the 2000 AutoNation annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 167

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167

Deductions
Balance Amounts Charged -------------------------- Balance
Reserve December 31, 1999 (Credited) to Income Cash Non-cash December 31, 2000
----------------------------- ------------------- --------------------- ------------- ------------ ------------------
Asset reserves:
Asset impairment .......... $ 263.3(1) $ (15.0) $ -- $ (86.9) $ 161.4
Inventory ................. 15.0 -- -- (15.0) --
Accrued liabilities:
Property lease residual
value guarantees ......... 103.3 (14.8) (88.5) -- --
Severance and other exit
costs .................... 17.3 9.4 (22.7) (2.8) 1.2
Finance lease residual
value write-down .......... -- 16.6 -- (16.6) --
----------- --------- --------- ---------- ---------
$ 398.9 $ (3.8) $ (111.2) $ (121.3) $ 162.6
=========== ========= ========== ========== =========
----------
(1) Includes $19.7 million of reserves that had been established on these
properties prior to the 1999 restructuring and impairment charges
recorded.
The following summarizes the components of the $3.8 million amount
credited to income during the year ended December 31, 2000:
Properties Placed Back Net Gain on Additional
into Service or Retained Sold Properties Impairment Charges Other Total
-------------------------- ----------------- -------------------- --------- ------------
Asset reserves:
Asset impairment .......... $ (23.2) $ (3.4) $ 11.6 $ -- $ (15.0)
Accrued liabilities:
Property lease residual
value guarantees ......... (13.0) (1.8) -- -- (14.8)
Severance and other
exit costs ............... -- -- -- 9.4 9.4
Finance lease residual
value write-down .......... -- -- -- 16.6 16.6
--------- -------- ------- ----- ---------
$ (36.2) $ (5.2) $ 11.6 $ 26.0 $ (3.8)
========= ======== ======= ====== =========
During 2000, certain events occurred which caused us to re-evaluate our
plans with respect to various retail properties. As a result, certain megastore
properties were placed back in service and we decided to retain certain
dealerships that had been held for sale. Accordingly, based on our
re-evaluation of the fair value of the properties, we determined that the asset
impairment and lease residual value reserves for these properties were no
longer necessary and we were required to reverse the related estimated reserves
totaling $36.2 million back into income. An additional impairment charge of
$11.6 million was recognized primarily related to a decision in 2000 to close
one additional megastore property as part of the overall restructuring plan.
During 2000, we also recognized an impairment charge totaling $16.6 million
associated with the deterioration in residual values of finance lease
receivables. We discontinued writing finance leases in mid-1999 and the
majority of the leases terminate in late 2001.
27
Non-Operating Income (Expense)
Floorplan Interest Expense
Floorplan interest expense was $199.8 million, $125.2 million, and $107.0
million for the years ended December 31, 2000, 1999, and 1998, respectively. The
increases are due to higher floorplan debt associated with higher inventory