AutoNation 2001 Annual Report Download - page 72

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reserves for the divestiture of certain non-core franchised automotive
dealerships; and $15.4 million of information systems impairments. Of the $443.7
million restructuring reserve recorded, $10.8 million of severance was paid in
1999 and $53.7 million of asset impairments and write-offs were recorded during
the fourth quarter of 1999.
65
AUTONATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The Company continues to dispose of its closed megastores and other
properties, including closed lease properties, through sales to third parties.
At December 31, 2001, properties held for sale total $72.2 million of which
properties with total asset value of $69.4 million remain to be sold of the
total $285.3 million identified as part of the restructure plan. These
properties continue to be aggressively marketed. The majority of these
properties will be disposed of by the end of 2002.
The following summarizes the activity in the Company's restructuring and
impairment reserves for the year ended December 31, 2001:
DEDUCTIONS
BALANCE AMOUNTS CHARGED -------------------- BALANCE
RESERVE DECEMBER 31, 2000 (CREDITED) TO INCOME CASH NON-CASH DECEMBER 31, 2001
------- ----------------- -------------------- -------- -------- -----------------
Asset reserves:
Asset impairment................. $ 161.4 $ 4.7 $ -- $ (97.7) $ 68.4
Accrued liabilities:
Severance and other exit costs... 1.2 (.2) (1.6) .8 .2
-------- -------- -------- -------- --------
$ 162.6 $ 4.5 $ (1.6) $ (96.9) $ 68.6
======== ======== ======== ======== ========
The following summarizes the components of the $4.5 million charged to
income during the year ended December 31, 2001:
NET GAIN ON ADDITIONAL IMPAIRMENT
SOLD PROPERTIES CHARGES OTHER TOTAL
--------------- ---------------------- ----- -----
Asset reserves:
Asset impairment.................................. $(.6) $5.3 $ -- $4.7
Accrued liabilities:
Severance and other exit costs.................... -- -- (.2) (.2)
---- ---- ---- ----
$(.6) $5.3 $(.2) $4.5
==== ==== ==== ====
During 2001, the Company recognized an additional impairment charge
totaling $5.3 million based on the re-evaluation of the estimated fair value of
certain properties.
The following summarizes activity in the Company's restructuring and
impairment reserves for the year ended December 31, 2000:
DEDUCTIONS
BALANCE AMOUNTS CHARGED ------------------- BALANCE
RESERVE DECEMBER 31, 1999 (CREDITED) TO INCOME CASH NON-CASH DECEMBER 31, 2000
------- ----------------- -------------------- ------- -------- -----------------
Asset reserves:
Asset impairment................. $263.3(1) $(15.0) $ -- $ (86.9) $161.4
Inventory........................ 15.0 -- -- (15.0) --
Accrued liabilities:
Property lease residual value
guarantees..................... 103.3 (14.8) (88.5) -- --
Severance and other exit costs... 17.3 9.4 (22.7) (2.8) 1.2
------ ------ ------- ------- ------
$398.9 $(20.4) $(111.2) $(104.7) $162.6
====== ====== ======= ======= ======