AutoNation 2000 Annual Report Download - page 66

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--------------------------------------------
Automotive Solid
Rental Waste Total
-------------- -------------- --------------
Revenue .................... $ 3,453.6 $ 1,369.1 $ 4,822.7
=========== =========== ===========
Pre-tax income ............. 170.1 292.5 462.6
Provision (benefit)
for income taxes ......... 61.3 105.3 166.6
Extraordinary
charge, net of
income taxes ............. -- -- --
Minority interest in
RSG ...................... -- 33.9 33.9
----------- ----------- -----------
Net income (loss) .......... 108.8 153.3 262.1
Previously estimated
and accrued losses -- -- --
----------- ----------- -----------
Income (loss) from
discontinued
operations ............... $ 108.8 $ 153.3 $ 262.1
=========== =========== ===========
----------
(1) Includes pre-tax restructuring and other charges of $40.5 million in 1999
primarily related to ANC Rental's consolidation of its North American
operations and other restructuring activities.
12. DERIVATIVE FINANCIAL INSTRUMENTS
The Company has entered into interest rate derivative transactions with
certain financial institutions to manage the impact of interest rate changes on
securitized installment loan receivables. These derivative transactions consist
of a series of interest rate caps and floors with an aggregate notional amount
of $576.3 million contractually maturing through 2006 which effectuate a
variable to fixed rate swap at a weighted average rate of 6.62% at December 31,
2000. Variable rates on the underlying portfolio are indexed to the Commercial
Paper Nonfinancial Rate.
64
AUTONATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
12. DERIVATIVE FINANCIAL INSTRUMENTS -- (Continued)
The amounts exchanged by the counterparties to interest rate derivatives
are based upon the notional amounts and other terms, generally related to
interest rates, of the derivatives. While notional amounts of interest rate
derivatives form part of the basis for the amounts exchanged by the
counterparties, the notional amounts are not themselves exchanged and,
therefore, do not represent a measure of the Company's exposure as an end user
of derivative financial instruments.
The Company is exposed to credit related losses in the event of
non-performance by counterparties to derivative financial instruments. The
Company monitors the credit worthiness of the counterparties and presently does
not expect default by any of the counterparties. The Company does not obtain
collateral in connection with its derivative financial instruments.
The credit exposure that results from interest rate contracts is
represented by the fair value of contracts with a positive fair value as of the
reporting date. See Note 14, Fair Value of Financial Instruments, for the fair
value of derivatives.