AutoNation 2001 Annual Report Download - page 80

of 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 a party to an agreement with Boca Resorts
pursuant to which National has purchased the naming rights of the National Car
Rental Center. Until the tax-free spin-off of ANC Rental to the Company's
stockholders was completed in June 2000, National was one of the Company's
subsidiaries. During the time that the Company owned National in 2000 and 1999,
it paid approximately $1.1 million and $2.2 million, respectively, to Boca
Resorts for such naming rights. In addition, National used executive suites at
the arena during 2000. In 1999, National paid approximately $.3 million for
signage, tickets, sponsorship and the use of executive suites at the arena.
During 2001, 2000 and 1999, the Company purchased approximately $.6
million, $.6 million and $.7 million, respectively, of pre-employment drug
screening services from Psychemedics Corporation. Mr. Huizenga owns
approximately 11.1% of the outstanding common stock of Psychemedics.
In connection with the Company's spin-off of ANC Rental in June 2000, the
Company entered into a distribution agreement, a tax sharing agreement and
various lease agreements, transitional service agreements, purchase agreements
and other arrangements with ANC Rental. Mr. Bryan, a Director of the Company,
and Mr. Huizenga are directors of ANC Rental and several of the Company's
Directors own stock of ANC Rental. At the time of the spin-off, the Company
owned ANC Rental's corporate headquarters facilities and, accordingly, it agreed
to lease these facilities to ANC Rental following the spin-off for approximately
$1.6 million per year. Toward the end of 2000, the Company sold ANC Rental's
headquarters facilities. In November 2001, ANC Rental filed voluntary petitions
for reorganization under Chapter 11 of the U.S. Bankruptcy Code in Wilmington,
Delaware. Due to the bankruptcy of ANC Rental, some or all of ANC Rental's
obligations under the agreements described below may be extinguished or the
Company's claims against ANC Rental under such agreements may be unenforceable.
In May 2000, the Company agreed to lease certain space in the Company's computer
data center to ANC Rental for which it is paid approximately $.9 million per
year. In connection with the spin-off, the Company also agreed to provide
guarantees and credit enhancements for certain ANC Rental indebtedness and other
obligations, for which ANC Rental paid the Company a fee of approximately $.9
million and $.4 million during 2001 and 2000, respectively. The Company expects
to continue to provide certain credit support, although it does not believe ANC
Rental will pay it for its credit support during 2002 due to its bankruptcy. The
Company entered into agreements with ANC Rental
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AUTONATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
pursuant to which ANC Rental agreed to purchase a certain number of rental fleet
vehicles through certain of its dealerships. During 2001 and 2000, ANC Rental
purchased approximately 31,000 and 245,000 rental fleet vehicles, respectively,
through the Company under these agreements, generating a mark-up fee for the
Company of approximately $.2 million and $1.5 million, respectively. These
agreements have expired and, accordingly, the Company does not expect to sell to
ANC Rental any vehicles during 2002. In 2000, ANC Rental provided the Company
certain transitional services, including computer and administrative services,
and the Company provided ANC Rental similar services. In 2000, ANC Rental paid
the Company approximately $.7 million and the Company paid ANC Rental
approximately $.2 million for such services. ANC Rental also agreed to buy
automotive parts from the Company following the spin-off, and paid the Company
approximately $8.1 million and $7.5 million, respectively, for parts purchases
made during 2001 and 2000. In addition, the Company sold parts to ANC Rental for
approximately $1.2 million during 2001 for which it does not expect to receive
payment from ANC Rental due to their bankruptcy. ANC Rental also leases space
from certain of the Company's dealerships to operate its local car rental
businesses. During 2001 and 2000, ANC Rental paid the Company's dealerships an