AutoNation 2015 Annual Report Download - page 78

Table of Contents
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Future minimum lease obligations under non-cancelable real property, equipment, and software leases with initial terms in excess of one year at
December 31, 2015, are as follows:
 

2016 $ 7.3
$ 45.9
2017 17.0
41.0
2018 6.6
37.5
2019 30.7
34.0
2020 4.7
32.8
Thereafter 42.5
210.3
Total minimum lease payments $ 108.8
$ 401.5
Less: Amounts representing interest (30.3)
$ 78.5
(1) Amounts for capital and operating lease commitments do not include certain operating expenses such as maintenance, insurance, and real estate
taxes. In 2015, these charges totaled approximately $26 million.
(2) Future minimum operating lease payments do not reflect future minimum sublease income of $2.2 million. Additionally, operating leases that
are on a month-to-month basis are not included.
Other Matters
AutoNation, acting through its subsidiaries, is the lessee under many real estate leases that provide for the use by our subsidiaries of their respective
dealership premises. Pursuant to these leases, our subsidiaries generally agree to indemnify the lessor and other related parties from certain liabilities arising
as a result of the use of the leased premises, including environmental liabilities, or a breach of the lease by the lessee. Additionally, from time to time, we
enter into agreements with third parties in connection with the sale of assets or businesses in which we agree to indemnify the purchaser or related parties
from certain liabilities or costs arising in connection with the assets or business. Also, in the ordinary course of business in connection with purchases or sales
of goods and services, we enter into agreements that may contain indemnification provisions. In the event that an indemnification claim is asserted, our
liability would be limited by the terms of the applicable agreement.
From time to time, primarily in connection with dispositions of automotive stores, our subsidiaries assign or sublet to the dealership purchaser the
subsidiaries’ interests in any real property leases associated with such stores. In general, our subsidiaries retain responsibility for the performance of certain
obligations under such leases to the extent that the assignee or sublessee does not perform, whether such performance is required prior to or following the
assignment or subletting of the lease. Additionally, AutoNation and its subsidiaries generally remain subject to the terms of any guarantees made by us in
connection with such leases. We generally have indemnification rights against the assignee or sublessee in the event of non-performance under these leases,
as well as certain defenses. We presently have no reason to believe that we or our subsidiaries will be called on to perform under any such remaining assigned
leases or subleases. We estimate that lessee rental payment obligations during the remaining terms of these leases with expirations ranging from 2016 to 2034
are approximately $29 million at December 31, 2015. There can be no assurance that any performance of AutoNation or its subsidiaries required under these
leases would not have a material adverse effect on our business, financial condition, and cash flows.
At December 31, 2015, surety bonds, letters of credit, and cash deposits totaled $98.9 million, of which $44.1 million represented letters of credit. In the
ordinary course of business, we are required to post performance and surety bonds, letters of credit, and/or cash deposits as financial guarantees of our
performance. We do not currently provide cash collateral for outstanding letters of credit.
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