AutoNation 2000 Annual Report Download - page 50

consolidated financial position, results of operations or cash flows as of and
for the year ended December 31, 2000.
A summary of the Company's revenue by major products and services for the
years ended December 31 is as follows:
2000 1999 1998
-------------- -------------- -------------
New vehicles ............. $ 12,489.3 $ 11,481.0 $ 6,775.8
Used vehicles ............ 3,860.2 4,429.7 3,185.2
Fixed operations ......... 2,334.9 2,222.0 1,383.2
F&I, net ................. 431.8 423.4 288.6
Other .................... 1,493.4 1,555.7 1,031.8
----------- ----------- ----------
$ 20,609.6 $ 20,111.8 $ 12,664.6
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Derivative Financial Instruments
The Company utilizes interest rate derivatives to manage the impact of
interest rate changes on securitized installment loan receivables. To a limited
extent, the Company has utilized interest rate
49
AUTONATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (Continued)
derivatives to manage the impact of interest rate changes on borrowings under
the Company's variable rate vehicle inventory and revolving credit facilities.
The Company does not use derivative financial instruments for trading purposes.
Derivative financial instruments entered into concurrently with
securitizations are accounted for at fair value as part of the proceeds
received in the determination of the gain or loss on sale. If a derivative
financial instrument entered into concurrently with a securitization is later
terminated, any resulting gain or loss is recognized in earnings upon
termination.
Interest rate swaps are used at times to manage the impact of interest
rate changes on vehicle inventory and revolving credit facility borrowings.
Under interest rate swaps, the Company agrees with other parties to exchange,
at specified intervals, the difference between fixed-rate and floating-rate
interest amounts calculated by reference to an agreed notional principal
amount. Income or expense under these instruments is recorded on an accrual
basis as an adjustment to the yield of the underlying exposures over the
periods covered by the contracts. If an interest rate swap is terminated early,
any resulting gain or loss is deferred and amortized as an adjustment of the
cost of the underlying exposure position over the remaining periods originally
covered by the terminated swap. If all or part of an underlying position is
terminated, the related pro-rata portion of any unrecognized gain or loss on
the swap is recognized in income at that time as part of the gain or loss on