AutoNation 2001 Annual Report Download

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____________ TO ____________
COMMISSION FILE NUMBER: 0-13107
AUTONATION, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 73-1105145
--------------------------------------- ------------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
110 S.E. 6TH STREET,
FORT LAUDERDALE, FLORIDA
--------------------------------------- 33301
(Address of Principal Executive ------------------------------
Offices) (Zip Code)
(954) 769-6000
-----------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Securities Registered Pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
-------------------------------------- REGISTERED
Common Stock, Par Value $.01 Per Share ---------------------------------
The New York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this

Table of contents

  • Page 1
    ... FISCAL YEAR ENDED DECEMBER 31, 2001 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____ TO _____ COMMISSION FILE NUMBER: 0-13107 AUTONATION, INC. (Exact Name of Registrant as Specified in its Charter) DELAWARE State or...

  • Page 2
    ... Owners and Management...Certain Relationships and Related Transactions...PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K...i PART I ITEM 1. BUSINESS 79 79 79 79 1 16 16 17 18 19 19 40 41 79 79 INTRODUCTION AutoNation, Inc. is the largest automotive retailer in...

  • Page 3
    ... 2001, are manufactured by Ford, General Motors, DaimlerChrysler, Toyota, Nissan, Honda and BMW. We offer a diversified range of automotive products and services beyond new vehicles, such as used vehicles, vehicle maintenance and repair services, vehicle parts, extended service contracts, insurance...

  • Page 4
    ... leader in marketing our dealerships and vehicle inventory via the Internet, including through our own websites and third-party websites with whom we have lead-referral relationships. We have also developed a subscriber network of independent dealerships across the United States to which we can...

  • Page 5
    ...During 2001, we reduced our average days supply of new and used vehicles by six and four days, respectively, as compared to 2000. - DECREASE TIME TO CONVERT RECEIVABLES INTO CASH: We have decreased the amount of time that our dealerships take to receive payment on retail finance contract receivables...

  • Page 6
    ... Each new or used vehicle sale presents our dealerships with the opportunity to arrange for financing of the vehicle through preferred third party lenders and to sell an extended service contract, insurance products and other aftermarket products, such as vehicle accessories, maintenance programs or...

  • Page 7
    ... our Denver dealerships in December 1998, we have launched six other local retail brands in our key markets, including "Maroone" in South Florida, "AutoWay" in Tampa, Florida, "Courtesy" in Orlando, Florida, "Desert" in Las Vegas, Nevada, "Team" in Atlanta, Georgia and "Mike Shad" in Jacksonville...

  • Page 8
    ... may exceed related reserves, which could have a material adverse effect on our business, results of operations, financial condition, cash flows and prospects. SALES AND MARKETING We retailed approximately 712,000 new and used vehicles through our dealerships in 2001. We sell a broad range of...

  • Page 9
    ... our conduct of business, including those relating to our sales, operating, financing, advertising and employment practices. These laws and regulations include state franchise laws and regulations and other extensive laws and regulations applicable to new and used motor vehicle dealers, as well as...

  • Page 10
    ... to the National Automobile Dealers Association, Automotive News and reports of various financial analysts, the automotive retail industry is served by approximately 22,000 franchised automotive dealerships and approximately 54,000 independent used vehicle dealers. Several other public companies are...

  • Page 11
    ...convenience, price and contract terms. We also face competition with respect to our automotive retailing e-commerce marketing and sales strategy. A number of e-commerce companies and traditional companies, such as the vehicle manufacturers, in particular, and other franchised dealership groups, have...

  • Page 12
    ... and third quarters of each year due in part to consumer buying trends and the introduction of new vehicle models. Also, demand for cars and light trucks is generally lower during the winter months than in other seasons, particularly in regions of the United States where dealerships may be subject...

  • Page 13
    ..., including Mercedes-Benz and other brands of automobiles. MICHAEL E. MAROONE has served as our President and Chief Operating Officer since August 1999. Following our acquisition of the Maroone Automotive Group in January 1997, Mr. Maroone served as President of our New Vehicle Dealer Division...

  • Page 14
    ...spending, interest rates, fuel prices, credit availability, unemployment rates, the level of manufacturer incentives and the number of consumers whose vehicle leases are expiring. New vehicle sales rates during 2001 varied significantly during the year. Following the September 2001 terrorist attacks...

  • Page 15
    ... of used vehicles, finance and insurance products, vehicle service and parts and collision repair services also may be subject to variation as a result of the foregoing factors, although we do not believe such variation is likely to be as significant as with respect to new vehicle sales. ANC RENTAL...

  • Page 16
    ... WITH OUR LEASE PORTFOLIO, CONSUMER CREDIT RISK IN CONNECTION WITH OUR FINANCE RECEIVABLES AND RELATED ASSETS AND UNDERWRITING RISK IN CONNECTION WITH OUR REINSURANCE OF WARRANTY AND PROTECTION PRODUCTS. Through AutoNation Financial Services, until December 2001, we underwrote installment auto loans...

  • Page 17
    .... Beyond funds paid directly to their 13 dealerships, the manufacturers also from time to time have established various incentive programs designed to spur consumer demand for their vehicles, such as the 0% financing offers during the fourth quarter of 2001. From time to time, manufacturers modify...

  • Page 18
    ... sell, the automotive dealerships franchised by that manufacturer or distributor under specified circumstances in the event of a change in control of our company (generally including certain material changes in the composition of our board of directors during a specified time period, the acquisition...

  • Page 19
    ... dealerships selling desirable automotive brands at desirable locations in our key markets or that any such acquisitions can be completed on favorable terms or at all. NEW ACCOUNTING PRONOUNCEMENTS ON BUSINESS COMBINATIONS AND GOODWILL WILL AFFECT OUR FUTURE EARNINGS. On June 30, 2001, the Financial...

  • Page 20
    ... We lease our corporate headquarters facility pursuant to a long-term lease. We also own or lease numerous facilities relating to our operations in 17 states. These facilities consist primarily of automobile showrooms, display lots, service facilities, collision repair centers, supply facilities...

  • Page 21
    ... New York Stock Exchange under the symbol "AN." The following table sets forth, for the periods indicated, the high and low sales prices per share of the common stock as reported on the consolidated transaction reporting system. HIGH -----2001 Fourth Quarter...Third Quarter...Second Quarter...First...

  • Page 22
    ... historical stock prices during all periods presented and have not been adjusted to give retroactive effect to the distribution of ANC Rental common stock to our stockholders. 18 ITEM 6. SELECTED FINANCIAL DATA You should read the following Selected Financial Data in conjunction with "Management...

  • Page 23
    ... 2001, are manufactured by Ford, General Motors, DaimlerChrysler, Toyota, Nissan, Honda and BMW. We offer a diversified range of automotive products and services beyond new vehicles, such as used vehicles, vehicle maintenance and repair services, vehicle parts, extended service contracts, insurance...

  • Page 24
    ... the tax-free spin-off of our former automotive rental business. ANC Rental declared bankruptcy in November 2001. We were called on to perform under certain of our credit enhancements and guarantees and, accordingly, in the fourth quarter of 2001 we incurred a pre-tax charge of $20.0 million...

  • Page 25
    ... primarily of retail vehicles held for sale valued using the specific identification method, net of reserves. Cost includes acquisition, reconditioning and transportation expenses. Reserves are established based on vehicle inventory aging and management's estimate of market values. We are subject...

  • Page 26
    ... is from the sales of new and used vehicles, including any commissions from related vehicle financings. We recognize revenue in the period in which products are sold or services are provided. Commission revenue on warranty and insurance products sold in connection with vehicle sales is recognized...

  • Page 27
    ...; (3) selling, general and administrative expenses; (4) store performance; and (5) retail vehicle unit sales: ($ IN MILLIONS) Revenue: New vehicle...Used vehicle...Parts and service...Finance and insurance, net...Other...Total revenue...Gross margin: New vehicle...Used vehicle...Parts and service...

  • Page 28
    ... same store unit sales. New vehicle gross margin reflects the net result of the sales price from the sale of a vehicle less the cost of acquisition, including vehicle net carrying costs (floorplan interest expense net of floorplan assistance -- see Note 1, Summary of Significant Accounting Policies...

  • Page 29
    ... mix from new vehicles to used vehicles, parts and service, and finance and insurance for which the related costs as a percentage of revenue are higher. Generally store selling, general and administrative expenses increase and decrease in direct relation to gross margin. Store selling, general and...

  • Page 30
    ... vehicle...Parts and service...Finance and insurance, net...Other...Total revenue...Gross margin: New vehicle...Used vehicle...Parts and service...Finance and insurance...Other...Total gross margin...S,G&A-Store...Store performance...Retail vehicle unit sales: New... YEARS ENDED DECEMBER 31 2001...

  • Page 31
    ... in the high margin areas of our business -- used vehicle, parts and service, and finance and insurance. Although these areas collectively comprise 33.9% of total same store revenue, they contributed 68.3% of total same store gross margin in 2001. DISCONTINUED BUSINESS SEGMENTS On June 30, 2000, we...

  • Page 32
    ... groups focused in key existing markets. During the years ended December 31, 2001, 2000 and 1999, we acquired various automotive retail businesses. We paid approximately $69.7 million, $190.9 million and $879.1 million, respectively, in cash for these acquisitions, all of which were accounted...

  • Page 33
    ... with our exit from the auto loan underwriting business, we terminated this facility. During 2001, we entered into certain interest rate derivative transactions with certain financial institutions to manage the impact of interest rate changes on these securitized installment loan receivables...

  • Page 34
    ... Financial Statements. RESTRUCTURING ACTIVITIES During the fourth quarter of 1999, we approved a plan to restructure certain of our operations. The restructuring plan was comprised of the following major components: (1) exiting the used vehicle megastore business; and (2) reducing the corporate...

  • Page 35
    ... the $20.4 million amount credited to income during the year ended December 31, 2000 (in millions): PROPERTIES PLACED BACK INTO SERVICE OR RETAINED Asset reserves: Asset impairment...Accrued liabilities: Property lease residual value guarantees...Severance and other exit costs... NET GAIN ON SOLD...

  • Page 36
    ... a price of 98.731% of face value. The senior unsecured notes are guaranteed by substantially all of our subsidiaries. In conjunction with the revolving credit facilities and senior unsecured notes offering, we received corporate credit ratings from ratings agencies. The revolving credit facilities...

  • Page 37
    ... balance sheet. In August 2001, we repaid the debt and terminated this facility. We offer our customers various vehicle protection products, such as extended service contracts, vehicle protection and maintenance programs, and insurance products. The products we offer include products that are sold...

  • Page 38
    ...the foregoing credit enhancements and guarantees, as well as indemnification rights with respect to any payments that we make to the Internal Revenue Service as a result of audit adjustments in our consolidated federal income tax returns relating to ANC Rental's automotive rental businesses prior to...

  • Page 39
    ... the years ended December 31, 2001, 2000 and 1999, respectively. Cash flows from operating activities include net income adjusted for non-cash items and the effects of changes in working capital including changes in floorplan notes payable which directly relate to vehicle inventory. The 2001 change...

  • Page 40
    ... to acquire single dealerships or small dealership groups focused in key existing markets. Cash used in business acquisitions 35 during 2001, 2000 and 1999 includes $22.3 million, $122.4 million and $34.9 million in deferred purchase price for certain prior year automotive retail acquisitions. See...

  • Page 41
    ... our two revolving credit facilities restrict our ability to declare cash dividends. 36 CASH FLOWS FROM DISCONTINUED OPERATIONS Cash used in discontinued operations was as follows during the years ended December 31 (in millions): 2001 ---Automotive rental...Solid waste services 2000 ------$(227...

  • Page 42
    ... and third quarters of each year in part due to consumer buying trends and the introduction of new vehicle models. Also, demand for cars and light trucks is generally lower during the winter months than in other seasons, particularly in regions of the United States where dealerships may be subject...

  • Page 43
    ... the cumulative effect of a change in accounting principle in the first quarter of the year ending December 31, 2002. We will not be able to determine the ultimate impact of SFAS 142 on our consolidated financial statements until such time as we apply its provisions. In August 2001, the FASB issued...

  • Page 44
    ... could suffer. - We may encounter limitations on our ability to acquire automotive dealerships in key markets on favorable terms or at all, which may materially adversely affect our ability to execute our acquisition strategy. - New accounting pronouncements on business combinations and goodwill

  • Page 45
    ...the risk of changes in interest rates we used interest rate derivatives related to the commercial paper warehouse facility which consisted of interest rate swaps, caps and floors which were entered into with a group of financial institutions with investment-grade credit ratings. At December 31, 2001...

  • Page 46
    ... Years Ended December 31, 2001, 2000 and 1999...Notes to Consolidated Financial Statements...Financial Statement Schedule II, Valuation and Qualifying Accounts and Reserves, for the Years Ended December 31, 2001, 2000 and 1999...41 42 43 44 45 46 47 78 REPORT OF INDEPENDENT CERTIFIED PUBLIC...

  • Page 47
    Fort Lauderdale, Florida, February 7, 2002. 42 AUTONATION, INC. CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, (IN MILLIONS, EXCEPT SHARE DATA) 2001 -------ASSETS CURRENT ASSETS: Cash and cash equivalents...Receivables, net...Inventory...Other current assets, net...Total Current Assets...RESTRICTED...

  • Page 48
    ... part of these statements. 43 AUTONATION, INC. CONSOLIDATED INCOME STATEMENTS FOR THE YEARS ENDED DECEMBER 31, (IN MILLIONS, EXCEPT PER SHARE DATA) 2001 --------REVENUE...Cost of operations...GROSS MARGIN...Selling, general and administrative expenses...Depreciation...Amortization...Loan and...

  • Page 49
    ... stock...Issuance of treasury stock for employee benefit plan...Exercise of stock options and warrants, including income tax benefit ... of these statements. 45 AUTONATION, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, (IN MILLIONS) 2001 -----CASH PROVIDED BY OPERATING ...

  • Page 50
    ... PER SHARE DATA) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION AND BUSINESS AutoNation, Inc. (the "Company") is the largest automotive retailer in the United States. As of December 31, 2001, the Company owned and operated 368 new vehicle franchises from 278 dealerships located in major...

  • Page 51
    ..., extended service contracts and insurance products, as well as other aftermarket products such as vehicle accessories. The Company's dealerships also offer service facilities that provide a wide range of vehicle maintenance, repair services, and operate collision repair centers in most key markets...

  • Page 52
    ..., Finance Underwriting and Asset Securitizations). Actual outcomes could differ from those estimates. INVENTORY Inventory consists primarily of retail vehicles held for sale valued using the specific identification method, net of reserves. Cost includes acquisition, reconditioning and transportation...

  • Page 53
    ... of Operations -- Reporting the Effect of the Disposal of a Segment of a Business and Extraordinary, Unusual and Infrequently Occurring Events and Transactions" ("APB 30"). SFAS 144 establishes a single accounting model for assets to be disposed of by sale whether previously held and used or newly...

  • Page 54
    ...as the cumulative effect of a change in accounting principle in the first quarter of the year ending December 31, 2002. The Company will not be able to determine the ultimate impact of SFAS 142 on its Consolidated Financial Statements until such time as the Company applies its provisions. DERIVATIVE...

  • Page 55
    ... December 31, 2001, the Company had no derivative financial instruments outstanding. REVENUE RECOGNITION Revenue consists of sales of new and used vehicles and related finance and insurance ("F&I") products, sales from parts and service and sales of other products. The Company recognizes revenue in...

  • Page 56
    A summary of the Company's revenue by major products and services for the years ended December 31 is as follows: 2001 --------New vehicles...Used vehicles...Parts and service...Finance and insurance, net...Other...$12,000.0 3,883.2 2,404.9 489.6 1,211.6 --------$19,989.3 ========= 2000 --------$12...

  • Page 57
    ...31, 2001, capacity under the floorplan credit facilities was approximately $3.5 billion. 4. RESTRICTED ASSETS AND REINSURANCE The Company offers its customers various vehicle protection products, such as extended service contracts, vehicle protection and maintenance programs, and insurance products...

  • Page 58
    ...160.8 ------$160.8 ====== Restricted investments are classified as available-for-sale and as such are reflected at fair market value at December 31, 2001 as follows: COST -----Government and agency obligations...Corporate debt securities...$ 73.9 80.8 -----$154.7 ====== GROSS UNREALIZED GAINS...

  • Page 59
    related to the Company's reinsurance programs, were included in Other Current Liabilities and long term unearned premiums and loss reserves were included in Other Liabilities in the Consolidated Balance Sheets as follows: 2001 -----REINSURANCE RESERVES Unearned premiums -- current portion......

  • Page 60
    ... at fair market value are as follows: 2001 GROSS GROSS FAIR UNREALIZED UNREALIZED MARKET COST GAINS LOSSES VALUE Corporate debt securities...Equity securities...$ .5 2.9 ---$3.4 ==== $ -1.0 ---$1.0 5 3.9 ---$4.4 ==== 55 AUTONATION, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED...

  • Page 61
    ...its various insurance programs, including property and casualty and employee medical benefits. Costs in excess of this retained risk per claim are insured under various contracts with third party insurance carriers. The ultimate costs of these retained insurance risks are estimated by management and...

  • Page 62
    ...-year facility provides borrowing capacity up to $300.0 million at a LIBOR-based interest rate. These revolving credit facilities are secured by a pledge of the capital stock of certain subsidiaries, which directly or indirectly own substantially all of the Company's dealerships, and are guaranteed...

  • Page 63
    ... 2000, the Company entered into a sale-leaseback transaction involving its corporate headquarters facility that resulted in net proceeds of approximately $52.1 million with an effective interest rate of 7.75% at December 31, 2001. This transaction was accounted for as a financing lease, wherein the...

  • Page 64
    ... underlying the California DMV case. 58 AUTONATION, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) In an action filed in Florida state court in 1999, one of the Company's subsidiaries was accused of violating, among other things, the Florida Motor Vehicle Retail Sales Finance Act and...

  • Page 65
    ... on the Company's Consolidated Financial Statements. 10. SHAREHOLDERS' EQUITY During the year ended December 31, 2001, the Company repurchased 27.3 million shares of its common stock, par value $.01 per share, under its Board authorized share repurchase program for an aggregate purchase price of...

  • Page 66
    ... to key employees and directors of the Company. Options granted under the plans are non-qualified and are granted at a price equal to the quoted market price of the common stock on the trading day immediately prior to the date of grant. Generally, options granted will have a term of 10 years from...

  • Page 67
    ... 2001, the Company decided to exit the business of underwriting retail automobile loans for customers at its dealerships, which it determined was not a part of the Company's core automotive retail 61 AUTONATION, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) business. The Company...

  • Page 68
    ...key assumptions, including credit losses, voluntary prepayment speeds, forward yield curve, and discount rates commensurate with the risks involved. 62 AUTONATION, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The Company previously accounted for the transfer of receivables as sales...

  • Page 69
    ... present value, discounted at 7.4%, of the estimated excess of future sub-servicing costs over the future estimated servicing income. At December 31, 2001, $1.3 billion was outstanding under this program, net of retained interests. With the Company's decision to exit the loan underwriting business...

  • Page 70
    ... during the years ended December 31 were as follows: DESCRIPTION Voluntary prepayment speed (ABS)...Weighted-average life (in years)...Expected credit losses (annual rate, excluding accrued interest)...Discount rate on residual cash flows (annual rate ASSUMPTIONS(1 2001 2000 --------1.16...

  • Page 71
    ...based on total installment loans serviced. Net credit losses, including accrued interest, during the year ended December 31, 2001 and 2000 totaled $33.7 million and $31.5 million, respectively. In 2000, the Emerging Issues Task Force of the Financial Accounting Standards Board reached a consensus on...

  • Page 72
    ... the activity in the Company's restructuring and impairment reserves for the year ended December 31, 2001: RESERVE ------Asset reserves: Asset impairment...Accrued liabilities: Severance and other exit costs... BALANCE DECEMBER 31, 2000 161.4 AMOUNTS CHARGED (CREDITED) TO INCOME 4.7 DEDUCTIONS...

  • Page 73
    ... components of the $20.4 million credited to income during the year ended December 31, 2000: PROPERTIES PLACED BACK INTO SERVICE OR RETAINED Asset reserves: Asset impairment...Accrued liabilities: Property lease residual value guarantees...Severance and other exit costs...$(23.2) (13.0) ------$(36...

  • Page 74
    ... deductions in 2001 relating to that transaction was approximately $44 million. These transactions are currently under review by the Internal Revenue Service. The Company believes that its tax returns appropriately reflect such transactions, and that it has established adequate reserves with respect...

  • Page 75
    ... Rental in June 2000, the Company agreed to provide certain guarantees and credit enhancements with respect to financial and other performance obligations of ANC Rental, including acting as a guarantor under certain motor vehicle and real property leases between ANC Rental and Mitsubishi Motor Sales...

  • Page 76
    ... respect to any 69 AUTONATION, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) payments that it makes to the Internal Revenue Service as a result of audit adjustments in its consolidated federal income tax returns relating to ANC Rental's automotive rental businesses prior to the spin...

  • Page 77
    ... 31, 2001 and accounted for under the purchase method of accounting are included in the Consolidated Financial Statements from the date of acquisition. During the years ended December 31, 2001, 2000 and 1999, the Company acquired various automotive retail businesses. The Company paid approximately...

  • Page 78
    accounting. The Company also paid $22.3 million, $122.4 million and $34.9 million, respectively, in deferred purchase price for certain prior year automotive retail acquisitions. During 2001, the Company acquired two dealerships. At December 31, 2001, the Company had accrued approximately $11.6 ...

  • Page 79
    ...Company paid an aggregate of approximately $.4 million, $.3 million and $.8 million, respectively, to the Miami Dolphins and Pro Player Stadium in exchange for certain marketing services, including the rental of the stadium for an off-site used vehicle sale event for its dealerships, and for the use...

  • Page 80
    ... its key managers. During 2001, 2000 and 1999, the Company paid Boca Resorts approximately $.2 million, $.1 million and .4 million, respectively, for the use of conference facilities and lodging accommodations at their hotels in connection with its management meetings. National Car Rental Company is...

  • Page 81
    ... until December 2001, Wayne Huizenga, Jr., the son of Mr. Huizenga, owned approximately 20.9% of NationsRent's outstanding common stock through H. Family Investments, Inc., a Florida corporation controlled by him. Starting March 2000, the Company also subleased to NationsRent certain office space at...

  • Page 82
    ... interest on vehicle inventory financing. The Company made income tax payments of approximately $196.4 million, $49.9 million and $84.2 million for the years ended December 31, 2001, 2000 and 1999, respectively. 21. FAIR VALUE OF FINANCIAL INSTRUMENTS The fair value of a financial instrument...

  • Page 83
    ... of credit risk. 23. QUARTERLY INFORMATION (UNAUDITED) The Company's operations generally experience higher volumes of vehicle sales in the second and third quarters of each year in part due to consumer buying trends and the introduction of new vehicle models. Also, demand for cars and...

  • Page 84
    ... indicated, the high and low prices per share of the Company's Common Stock as reported by the New York Stock Exchange. HIGH -----2001 Fourth Quarter...Third Quarter...Second Quarter...First Quarter...2000 Fourth Quarter...Third Quarter...Second Quarter...First Quarter... LOW ----- $13.07 $12.24...

  • Page 85
    ... 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K. (a) (1) Financial Statements of the Company are set forth in Part II, Item 8. (2) Financial Statement Schedule II, Valuation and Qualifying Accounts and Reserves, for each of the three years ended December 31, 2001 is submitted...

  • Page 86
    ...Board DATE ---- March 27, 2002 Chief Executive Officer and Director (Principal Executive Officer) Senior Vice President and Chief Financial Officer (Principal Financial Officer) Senior Vice President -- Finance (Principal Accounting Officer) March 27, 2002 Vice Chairman and Director March 27, 2002...

  • Page 87
    ... of any such agreements to the Commission upon request. AutoNation, Inc. 1991 Stock Option Plan, as amended to date (incorporated by reference to Exhibit 10.1 to AutoNation's Quarterly Report on Form 10-Q for the quarter ended June 30, 2000). AutoNation, Inc. 1995 Amended and Restated Employee Stock...

  • Page 88
    ... 10.10 to AutoNation's Annual Report on Form 10-K for the year ended December 31, 1998). AutoNation, Inc. Amended and Restated 1997 Employee Stock Option Plan, as amended to date (incorporated by reference to Exhibit 10.4 to AutoNation's Quarterly Report on Form 10-Q for the quarter ended June 30...

  • Page 89
    21.1* 23.1* 99.1* Quarterly Report on Form 10-Q for the quarter ended June 30, 1998). Subsidiaries of AutoNation, Inc. Consent of Arthur Andersen LLP. Letter regarding representation from Arthur Andersen LLP. Filed herewith

  • Page 90
    ... FL DE TX TX CA NV TN CA DE DE DE DE DE DE DE CA CA CA Fictitious Name Maroone Chevrolet of Miami Maroone Collision Repair Center AutoWay Chevrolet - Tampa Al Maroone Ford Allison BMW Courtesy Honda (Atlanta) Courtesy Ford Mike Shad Chrysler Jeep at Southpoint Autowest Kia; Autowest Mitsubishi...

  • Page 91
    ...Mercedes-Benz of Orlando Porsche of North Orlando Cook-Whitehead Ford Costa Mesa Honda Courtesy Buick Courtesy Pontiac-GMC Dobbs Honda on Covington Pike BMW of Houston North Charlie Thomas Acura AutoWay Honda Dodge World of Des Plaines Desert Desert Desert Desert Buick GMC Trucks Chrysler Dodge...

  • Page 92
    ...'s Toyota of Buena Park Kirkland Ford Fox Buick-Isuzu-Pontiac-GMC Fox Chevrolet & The Chevrolet Auto & Truck Discount Center Fox Lincoln-Mercury/Fox Kia Fox Mitsubishi Fred Oakley Chrysler Plymouth & AutoNation Dodge of Irving Maroone Nissan of Ft. Lauderdale South Bay Volvo Gene Evans Team Ford...

  • Page 93
    ... TX FL FL CO CO CO FL CA DE DE FL FL CO DE DE DE Fictitious Name Pitre Chrysler-Plymouth-Jeep on Bell Pitre Isuzu Hyundai of Scottsdale Plains Chevrolet Port City Imports (Honda/Hyundai/Volvo) Champion Pontiac, GMC, Buick Quality Nissan AutoWay Nissan of Clearwater AutoNation USA Service Center...

  • Page 94
    ... Nissan of Lithia Springs Taylor Jeep Eagle/Taylor Chrysler Jeep Team Dodge of Union City Land Rover Encino Valencia Honda Hilcher Ford and Texan Ford Texan Ford Team Dodge, Inc. Tennco Life Insurance Company Terry York Motor Cars, Ltd. DE AZ CA Texan Ford Sales, Inc. Texan Ford, Inc. TX TX...

  • Page 95
    ...Park V. Imports, Inc. Torrance Nissan, LLC Total Care, Inc. Tousley Ford, Inc. Town & Country Chrysler Jeep, Inc. Toyota Cerritos Limited Partnership Triangle Corporation Tripperoo Wings, Inc. T-West Sales & Service, Inc. Valencia Dodge DE MI FL AZ DE DE DE DE CO MN DE GA DE FL NV CA Texan Lincoln...

  • Page 96
    ...PUBLIC ACCOUNTANTS As independent certified public accountants, we hereby consent to the incorporation of our report included in this Form 10-K, into the previously filed Registration Statements of AutoNation..., 333-90819 and 333-81888). ARTHUR ANDERSEN LLP Fort Lauderdale, Florida, March 27, 2002.

  • Page 97
    ... their audit of the Consolidated Financial 1tatements contained in AutoNation, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2001, of which this Exhibit 99.1 is a part, was subject to their quality control system for the U.1. accounting and auditing practice to provide reasonable...