AutoNation 2000 Annual Report Download - page 3

different brands of vehicles.
Although we now operate exclusively as an automotive retailer, we have
operated businesses in multiple industries over the past several years,
including the solid waste services, electronic security service, car rental and
outdoor media industries. With the tax-free spin-off to our stockholders of ANC
Rental Corporation and the sale of certain other non-core assets in 2000, which
we describe in more detail in the "Recent Developments" section of this
document, we are now focused exclusively on our operations in the automotive
retail business.
Our common stock, par value $.01 per share, is listed on The New York
Stock Exchange under the symbol "AN." For information concerning our financial
condition, results of operations and related financial data, and business
combinations, you should review the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" section in this document. You
should also review and consider the risks relating to our business, operations,
financial performance and cash flows that we describe in the "Risk Factors"
section starting on page 11 of this document.
RECENT DEVELOPMENTS
ANC Rental Spin-off. On June 30, 2000, we completed the tax-free spin-off
of ANC Rental Corporation, which operates primarily under the Alamo Rent-A-Car
and National Car Rental brand names in the leisure travel, business travel and
vehicle replacement markets of the automotive rental industry. As a result of
the spin-off, our stockholders of record as of June 16, 2000 received one share
of ANC Rental common stock for every eight shares of AutoNation common stock
they held as of such date. ANC Rental common stock is traded on The Nasdaq
Stock Market under the symbol "ANCX." We have reclassified and reported ANC
Rental's business as a discontinued operation. Accordingly, except as otherwise
noted, the disclosure contained in this document relates solely to our
automotive retail business.
Other Divestitures of Non-Core Assets. In addition to the spin-off of ANC
Rental, during 2000 we substantially completed our divestitures of other
non-core assets. During 2000, we entered into a sale-leaseback financing of our
corporate headquarters facility resulting in proceeds of approximately $52.1
million. We also completed the sale of ANC Rental's corporate headquarters
facility for approximately $18.7 million. In connection with the closure during
December 1999 of 23 company-owned AutoNation USA used vehicle megastores,
during 2000 we sold a majority of the excess real property held for or operated
in connection with our former used vehicle megastore business. We intend to
continue actively marketing the remaining excess used vehicle megastore
properties. In November 2000, we completed the divestiture of our outdoor media
business, which operated under the name Republic Media, for a sale price of
approximately $104.0 million. In connection with the sale of Republic Media, we
entered into a pre-paid
$15.0 million advertising agreement with respect to the purchaser's radio
stations, billboards and other outdoor advertising media, and, accordingly, we
received net proceeds of approximately $89.0 million in connection with the
transaction. During 2000, we also completed the sale of various non-core
franchised new vehicle dealerships for an aggregate sale price of approximately
$89.7 million. With the sale of our Flemington Automotive Group in New Jersey,
which we expect to complete in April 2001, we believe that our disposition of
significant non-core assets will be substantially complete.
BUSINESS STRATEGY
Our business strategy consists of the following key elements:
o Expand our margins by focusing on higher-margin products and
services.
o Continue to leverage our significant scale to improve our