AutoNation 2000 Annual Report Download - page 63

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are being disposed of through sales to third parties. Although these properties
are being aggressively marketed, their ultimate disposition will not be
substantially completed until late 2001. Revenue for the operations disposed or
to be disposed was $923.5 million, $2.12 billion and $1.70 billion during 2000,
1999 and 1998 respectively. Operating income for the operations disposed or to
be disposed was $21.8 million, $15.5 million and $12.9 million for the years
ended December 31, 2000, 1999 and 1998 respectively.
61
AUTONATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
10. RESTRUCTURING AND IMPAIRMENT CHARGES (RECOVERIES), NET -- (Continued)
The following summarizes activity in the Company's restructuring and
impairment reserves for the year ended December 31, 2000:
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 the Company to
re-evaluate its plans with respect to various retail properties. As a result,
certain megastore properties were placed back in service and the Company
decided to retain certain dealerships that had been held for sale. Accordingly,
based upon the Company's re-evaluation of the fair values of the properties,
the Company determined that the asset impairment and lease residual value
reserves for these properties were no longer necessary and the Company was