AutoNation 2006 Annual Report Download - page 36

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Table of Contents
automotive retail franchises and other related assets, respectively. Cash used in business acquisitions during 2006, 2005 and 2004
includes $.2 million, $9.9 million and $3.3 million in deferred purchase price for certain prior year automotive retail acquisitions. See
discussion in Note 15, Acquisitions, of Notes to Consolidated Financial Statements.
Cash Flows from Financing Activities
Cash flows from financing activities primarily include treasury stock purchases, stock option exercises, debt activity and changes
in vehicle floorplan payable-non-trade.
In April 2006, we sold $300.0 million of floating rate senior unsecured notes due April 15, 2013 and $300.0 million of 7% senior
unsecured notes due April 15, 2014, in each case at par. In connection with the issuance of the new senior notes, we amended our existing
credit agreement to provide: (1) a $675.0 million revolving credit facility for which we had net borrowings of $195.0 million during
2006 and (2) a $600.0 million term loan facility. In December 2006, the borrowing capacity of the revolving credit facility increased to
$700.0 million under the amended credit agreement.
The proceeds of the new senior unsecured notes and term loan facility, together with cash on hand and borrowings of $80.0 million
under the amended revolving credit facility, were used to: (1) purchase 50 million shares of our common stock at $23 per share for an
aggregate purchase price of $1.15 billion pursuant to our equity tender offer, (2) purchase $309.4 million aggregate principal of our
9% senior unsecured notes for an aggregate total consideration of $339.8 million ($334.2 million of principal and tender premium and
$5.6 million of accrued interest) pursuant to our debt tender offer and consent solicitation, and (3) pay related financing costs.
Approximately $34.5 million of tender premium ($24.8 million) and other deferred financing costs ($9.7 million) related to our debt
tender offer was expensed during 2006.
During 2005 and 2004, we repurchased $123.1 million and $3.4 million (face value) of our 9.0% senior unsecured notes at an
average price of 110.5% and 114.3% of face value or $136.0 million and $3.9 million, respectively.
As discussed above, in April 2006, we purchased 50 million shares of our common stock at $23 per share for an aggregate
purchase price of $1.15 billion pursuant to our equity tender offer. We repurchased an additional 11.2 million shares of our common
stock for a purchase price of $228.9 million during 2006, for a total of 61.2 million shares repurchased for an aggregate purchase price
of $1.38 billion in 2006. During 2005 and 2004, we repurchased 11.8 million and 14.1 million shares of our common stock for an
aggregate price of $237.1 million and $236.8 million, respectively, under our Board-approved share repurchases programs.
During 2006, 2005 and 2004, proceeds from the exercise of stock options were $75.7 million, $112.8 million and $94.2 million,
respectively.
During the years ended December 31, 2006 and 2005, we repaid $37.7 million and $164.4 million, respectively of amounts
outstanding under our mortgage facilities, including prepayments of $154.0 million in 2005.
Cash flows from financing activities include changes in vehicle floorplan payable-non-trade (vehicle floorplan payables with lenders
other than the automotive manufacturers’ captive finance subsidiaries for that franchise) totaling $96.9 million, $24.4 million and
$(143.1) million for the years ended December 31, 2006, 2005 and 2004, respectively. A portion of the 2006 change in vehicle floorplan
payable-non-trade relates to the reclassification of GMAC-financed vehicles from floor plan-trade to floorplan-non-trade, as a result of
GM’s sale of a majority stake in GMAC, effective November 30, 2006, as described above and in Note 3 to the Notes to the Consolidated
Financial Statements.

We believe that our funds generated through future operations and availability of borrowings under our secured floorplan facilities
(for new vehicles) and revolving credit facility will be sufficient to service our debt and fund our working capital requirements, pay our
tax obligations, commitments and contingencies and meet any seasonal operating requirements for the foreseeable future. We expect to
remain in compliance with the covenants of our
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