AutoNation 2006 Annual Report Download - page 66
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Table of Contents
Purchase price allocations for 2006 are tentative and subject to final adjustment due to their closing date. Purchase price allocations
for business combinations accounted for under the purchase method of accounting related to continuing operations for the years ended
December 31 were as follows:
Accounts receivable $ 5.6 $ — $ 1.4
Inventory 45.3 6.5 51.5
Property and equipment 7.1 .1 48.3
Goodwill 81.3 2.5 55.2
Franchise rights — indefinite lived 88.0 3.9 78.1
Other intangibles subject to amortization 1.7 — .4
Other assets 11.5 .1 10.5
Vehicle floorplan payable-trade (13.4) (6.5) (33.6)
Vehicle floorplan payable-non-trade (34.8) — (3.0)
Other liabilities (25.8) (.6) (14.2)
166.5 6.0 194.6
Cash paid in deferred purchase price .2 9.9 3.3
Cash used in business acquisitions, net of cash acquired $ 166.7 $15.9 $197.9
Responsibility for the vehicle floorplan payable is assumed by the Company in acquisition transactions. Typically, the Company
refinances the vehicle floorplan payable, in which case the initial refinancing is accounted for as a vehicle floorplan payable-non-trade.
The Company anticipates that all of the goodwill recorded in 2006, 2005 and 2004 will be deductible for federal income tax purposes.
The Company’s unaudited pro forma consolidated results of continuing operations assuming 2006 and 2005 acquisitions had
occurred at January 1, 2005 are as follows for the years ended December 31:
Revenue $19,160.4 $ 19,084.0
Net income $ 320.5 $ 504.4
Diluted earnings per share $ 1.40 $ 1.88
The unaudited pro forma results of continuing operations are presented for informational purposes only and may not necessarily
reflect the future results of operations of the Company or what the results of operations would have been had the Company owned and
operated these businesses as of the beginning of each period presented.
It is the Company’s policy that transactions with affiliated parties must be entered into in good faith on fair and reasonable terms
that are no less favorable to the Company than those that would be available in a comparable transaction in arm’s-length dealings with an
unrelated third party. There were no material transactions with related parties in the years ended December 31, 2006, 2005 or 2004.
The Company considers all highly liquid investments with purchased maturities of three months or less to be cash equivalents
unless the investments are legally or contractually restricted for more than three months. The effect of non-cash transactions is excluded
from the accompanying Consolidated Statements of Cash Flows.
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