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Table of Contents
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, 2003
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 Other Jurisdiction of Incorporation or Organization)
73-1105145
(I.R.S. Employer Identification No.)
110 S.E. 6th Street, Fort Lauderdale, Florida
(Address of Principal Executive Offices)
33301
(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
Common Stock, Par Value $.01 Per Share
Name Of Each Exchange On Which Registered
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 o
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 Form 10-K. x
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes x No o
As of June 30, 2003, the aggregate market value of the common stock of the registrant held by non-affiliates was approximately
$2,990,000,000 based on the closing price of the common stock on The New York Stock Exchange on such date.
As of March 5, 2004, the registrant had 268,820,219 shares of common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Part III — Portions of the Registrant’s Proxy Statement relating to the 2004 Annual Meeting of Stockholders.

Table of contents

  • Page 1
    ... to [ ] Commission File Number: 0-13107 AutoNation, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware (State or Other Jurisdiction of Incorporation or Organization) 73-1105145 (I.R.S. Employer Identification No.) 33301 (Zip Code) 110 S.E. 6th Street, Fort Lauderdale, Florida...

  • Page 2
    ... and Related Stockholder Matters Certain Relationships and Related Transactions Principal Accountant Fees and Services PART IV 75 75 75 75 75 Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K EX-4.2 Supplemental Indenture EX-21.1 Subsidiaries EX-23.1 Consent of Deloitte...

  • Page 3
    ... DaimlerChrysler, Toyota, Nissan, Honda and BMW. We offer a diversified range of automotive products and services, including new vehicles, used vehicles, vehicle maintenance and repair services, vehicle parts, extended service contracts, vehicle protection products and other aftermarket products. We...

  • Page 4
    ... will increase our customer-pay service and parts business. Our efforts at optimizing our pricing are directed toward maintaining competitive pricing for commonly performed vehicle services and repairs for like brand vehicles within each of our markets. Our promotional programs take advantage of...

  • Page 5
    ... tool that enables our stores within each of our markets to optimize their used vehicle inventory supply, mix and pricing. We are managing our used vehicle inventory to enable us to offer our customers a greater number of desirable lower cost vehicles. Our used vehicle business strategy is focused...

  • Page 6
    ...-party training services to conduct specialized technical training for certain of our store employees in areas such as finance and insurance and fixed operations. We also require all of our employees, from our senior management to our technicians, to participate in our Business Ethics Program, which...

  • Page 7
    ... programs, guaranteed auto protection (known as "GAP," this protection covers the shortfall between a customer's loan balance and insurance payoff in the event of a casualty), credit insurance, lease "wear and tear" insurance and theft protection products at competitive prices. The vehicle warranty...

  • Page 8
    ...maintaining a cost structure that permits us to operate efficiently. In addition, under the terms of our strategic alliances and partnerships with e-commerce companies, we have access to hundreds of thousands of customer leads, which increases our potential for new and used vehicle sales. We respond...

  • Page 9
    ...those relating to our sales, operations, financing, insurance, advertising and employment practices. These laws and regulations include state franchise laws and regulations, consumer protection laws and other extensive laws and regulations applicable to new and used motor vehicle dealers, as well as...

  • Page 10
    ... from independent automobile service shops and service center chains. We believe that the principal competitive factors in the service and repair industry are price, location, the use of factory-approved replacement parts, expertise with the particular vehicle lines and customer service. In 8

  • Page 11
    ... ability to finance vehicle protection and after-market products. Insurance and Bonding Our business exposes us to the risk of liabilities arising out of our operations. For example, liabilities may arise out of claims of employees, customers or other third parties for personal injury or property...

  • Page 12
    ... President - Finance and Insurance and Fixed Operations since May 2003. From 2001 until May 2003, Mr. Westfall served as our Senior Vice President - Finance and Insurance. Previously, he served as President of our former wholly-owned captive finance company, AutoNation Financial Services, from 1997...

  • Page 13
    ... changing economic conditions and various other factors. Our business and results of operations are dependent in large part on new vehicle sales levels in the United States and in our particular geographic markets and the level of gross profit margins that we can achieve on our sales of new vehicles...

  • Page 14
    ... effect on our consolidated results of operations and cash flows. The core brands of vehicles that we sell, representing approximately 98% of the new vehicles that we sold in 2003, are manufactured by Ford, General Motors, DaimlerChrysler, Toyota, Nissan, Honda and BMW. Any event that has a material...

  • Page 15
    ... safety, wage-hour, anti-discrimination and other employment practices. Specifically with respect to the sale of finance, insurance and vehicle protection products at our stores, we are subject to various laws and regulations, the violation of which could subject us to consumer class action or other...

  • Page 16
    ...impair or restrict our finance and insurance operations could have a material adverse effect on our business, results of operations, financial condition, cash flows and prospects. Our ability to grow our business may be limited by our ability to acquire automotive stores in key markets on favorable...

  • Page 17
    .... Many of our Texas dealership subsidiaries have been named in three class action lawsuits brought against the TADA and approximately 700 new vehicle stores in Texas that are members of the TADA. The three actions allege that since January 1994 Texas dealers have deceived customers with respect to...

  • Page 18
    ...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 Low 2003 Fourth Quarter Third Quarter Second Quarter First Quarter...

  • Page 19
    ... of the current period. Finance and Insurance Revenue has been adjusted to include corporate volume incentives that were previously included in Other Revenue. Additionally, Used Vehicle Revenue and Cost of Sales have been adjusted to include the results of wholesale operations that were previously...

  • Page 20
    ..., Daimler Chrysler, Toyota, Nissan, Honda and BMW. We offer a diversified range of automotive products and services, including new vehicles, used vehicles, vehicle maintenance and repair services, vehicle parts, extended service contracts, vehicle protection products and other aftermarket products...

  • Page 21
    ... assumptions and estimates used may change and we may be required to record impairment charges to reduce the value of these assets. Revenue Recognition - The majority of our revenue is from the sales of new and used vehicles and commissions from related finance and insurance products. We recognize...

  • Page 22
    ...estimates have been made by us in the accompanying Consolidated Financial Statements including allowances for doubtful accounts, used vehicles and parts inventory valuations reserves, reserves for self-insurance programs, reserves for legal proceedings, and reserves for estimated tax liabilities. 20

  • Page 23
    ... Operating Data Years Ended December 31, 2003 vs. 2002 2002 vs. 2001 2003 2002 Variance Favorable/ (Unfavorable) % Variance 2001 Variance Favorable/ (Unfavorable) % Variance ($ in millions, except per vehicle data) Revenue: New vehicle Used vehicle Parts and service Finance and insurance...

  • Page 24
    ..., % 2003 % 2002 % 2001 Revenue mix percentages: New vehicle Used vehicle Parts and service Finance and insurance Other Total 60.8 23.2 12.7 3.1 .2 100.0 60.0 24.2 12.6 2.9 .3 100.0 60.0 25.0 12.0 2.6 .4 100.0 Operating items as a percentage of revenue: Gross profit: New vehicle Used vehicle...

  • Page 25
    ... in the comparison, starting with the first month of our ownership or operation. Years Ended December 31, 2003 2002 Variance Favorable/ (Unfavorable) % Variance ($ in millions, except per vehicle data) Revenue: New vehicle Used vehicle Parts and service Finance and insurance, net Other Total...

  • Page 26

  • Page 27
    ... to benefit from high levels of manufacturer consumer incentive programs introduced during the fourth quarter of 2001, we experienced volume decreases consistent with industry declines of retail unit sales. We experienced downward pressure on our new vehicle gross profit margins during 2003, which...

  • Page 28
    ... a more restrictive financing environment for used vehicles. The decrease in used vehicle revenue was also caused by a decrease in the number of units wholesaled in 2002 due to an overall decline in new and used vehicle sales. Used vehicle total gross profit increased slightly in 2003 primarily due...

  • Page 29

  • Page 30
    ... profit remained relatively flat in 2003 compared to 2002. This was driven by improved pricing on customer-paid work offset by decreases in warranty repair orders, wholesale parts and our collision repair business. Significant decreases in domestic warranty repair orders offset import and luxury...

  • Page 31
    ... on our underperforming fourth quartile stores and provided intensive, ongoing training of finance and insurance associates in all of our stores. In the fourth quarter of 2003, we also substantially completed the transition to manufacturer extended warranty programs and expanded our lender network...

  • Page 32
    ... to the sale of our finance receivables portfolio in 2003. Other Losses (Gains) Other losses for 2003 were primarily the result of a real estate impairment charge totaling $27.5 million related to three underperforming franchised new vehicle stores which currently operate in converted used vehicle...

  • Page 33
    ... auto parts recycling business, for $38.3 million, resulting in a pre-tax gain of $16.5 million. In September 2002, one of our captive insurance companies terminated a reinsurance agreement with a third-party insurance company and transferred our risk pertaining to certain extended warranty products...

  • Page 34
    ... $22.3 million during the years ended December 31, 2003, 2002 and 2001, respectively, in deferred purchase price for certain prior year automotive retail acquisitions. In April 2001, we completed the sale of our New Jersey-based Flemington dealership group for net proceeds of $59.0 million and a pre...

  • Page 35
    ... 2003. We finance our used vehicle inventory primarily through our cash flow from operations. We sell and receive commissions on the following types of vehicle protection and other products: extended warranties, guaranteed auto protection, credit insurance, lease "wear and tear" insurance and theft...

  • Page 36
    ...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 new vehicle inventory. The decrease in 2003 compared to 2002 was driven mainly by the IRS settlement payment of...

  • Page 37
    ... Property operating lease buy-outs were $9.8 million, $19.8 million and $7.1 million for the years ended December 31, 2003, 2002 and 2001, respectively. We continue to analyze certain of our higher cost operating leases and evaluate alternatives in order to lower the effective financing costs. From...

  • Page 38
    ... Discontinued Operations Cash used in discontinued operations was $4.7 million and $8.4 million during 2003 and 2002, respectively. Cash used in 2003 and 2002 relates to payments made in conjunction with property leases assumed from ANC Rental. There was no cash used in discontinued operations in...

  • Page 39
    ... Our operations generally experience higher volumes of vehicle sales and service in the second 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...

  • Page 40
    ...cost. The impact of this accounting change for the year ended December 31, 2003 was an increase of $3.3 million in Cost of Sales. On a comparable basis, the impact of this accounting change... when a derivative contains a financing component that warrants special reporting in the statement of cash ...

  • Page 41
    ...to changing economic conditions and various other factors. Our business and results of operations are dependent in large part on new vehicle sales levels in the United States and in our particular geographic markets and the level of gross margins that we can achieve on our sales of new vehicles, all...

  • Page 42
    ... of operations and shareholders' equity. Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our primary market risk exposure is changing interest rates. Our policy is to manage interest rates through the use of a combination of fixed and floating rate debt. At December 31, 2003...

  • Page 43
    ... AND SUPPLEMENTARY DATA INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Reports of Auditors Consolidated Balance Sheets as of December 31, 2003 and 2002 40 43 Consolidated Income Statements for the Years Ended December 31, 2003, 2002 and 2001 44 Consolidated Statements of Shareholders' Equity...

  • Page 44
    ... Change," these consolidated financial statements were revised to include transitional disclosures resulting from implementing EITF Issue 02-16, "Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor," which was adopted by the Company as of January 1, 2003...

  • Page 45
    ... of the Company other than with respect to such disclosures and reclassifications, and accordingly, we do not express an opinion or any other form of assurance on the 2001 consolidated financial statements taken as a whole. DELOITTE & TOUCHE LLP Fort Lauderdale, Florida February 4, 2003 41

  • Page 46
    ...for the year ended December 31, 2001 has been revised to reflect the reclassification of: (i) floorplan interest expense, (ii) certain finance and insurance revenue, and (iii) wholesale revenue and cost of sales. The report of Arthur Andersen LLP presented above does not extend to these changes. 42

  • Page 47
    ... stock, par value $.01 per share; 1,500,000,000 shares authorized; 293,562,137 and 333,505,325 shares issued and outstanding including shares held in treasury, respectively Additional paid-in capital Retained earnings Accumulated other comprehensive income (loss) Treasury stock, at cost; 23,848...

  • Page 48
    ...989.3 TOTAL REVENUE Cost of Sales: New vehicle Used vehicle Parts and service Other 10,938.9 4,089.2 1,385.0 5.2 16,418.3 10,784.9 4,315.1 1,385.0 7.0 16,492.0 11,035.4 4,579.2 1,365.7 8.4 TOTAL COST SALES Gross Profit: New vehicle Used vehicle Parts and service Finance and insurance Other 16...

  • Page 49
    ... Cumulative effect of accounting change Net income Weighted average common shares outstanding $ 1.71 $ 1.20 $ 279.5 316.7 .70 333.4 $ $ $ $ 1.76 (.04) (.05) $ 1.19 - - $ 1.19 321.5 $ $ $ 1.67 287.0 .73 (.04) - .69 335.2 The accompanying notes are an integral part of these statements...

  • Page 50
    ... - - (1,717.9) - - - - - - - - - - (389.9) 1,719.4 2.6 $384.2 Comprehensive income Purchases of treasury stock Treasury stock cancellation Exercise of stock options and warrants, including income tax benefit of $9.6 Other 7,032,595 - - - 88.3 (.3) - - - - - - BALANCE AT DECEMBER 31, 2002...

  • Page 51
    ... loss Comprehensive income Purchases of treasury stock Treasury stock cancellation Exercise of stock options and warrants Other 10,056,812 - - 13.4 - BALANCE AT DECEMBER 31, 2003 293,562,137 $ 2.9 $ 2,581.0 $1,742.4 $ (3.2) $ (373.4) The accompanying notes are an integral part of these...

  • Page 52
    ... investments Proceeds from sale of investment in LKQ Corporation Transfer of restricted assets related to reinsurance agreements Other (565.6) 96.4 121.3 (174.9) 19.9 - - 14.6 5.8 - 4.0 (43.5) CASH USED IN FINANCING ACTIVITIES: Payments of revolving credit facilities Purchases of treasury stock...

  • Page 53
    ... and long-term debt Proceeds from issuance of unsecured senior notes Proceeds from the exercises of stock options Other (9.0) (4.2) - 142.2 (7.8) (7.4) (3.9) - 78.7 (11.8) (1.8) (176.5) 434.7 9.1 (.1) (270.4) (327.0) (453.1) CASH (USED IN) PROVIDED BY CONTINUING OPERATIONS CASH USED IN...

  • Page 54
    ... of automotive products and services, including new vehicles, used vehicles, vehicle maintenance and repair services, vehicle parts, extended service contracts, vehicle protection products and other aftermarket products. The Company also arranges financing for vehicle purchases through third-party...

  • Page 55
    .... Inventory Inventory consists primarily of new and used vehicles held for sale valued using the specific identification method, net of reserves. Cost includes acquisition, reconditioning and transportation expenses. Parts and accessories are valued at lower of cost (first-in, first-out) or...

  • Page 56
    ... through contractual or other legal rights, or if the intangible asset can be sold, transferred, licensed, rented, or exchanged, regardless of the acquirer's intent to do so. Effective January 1, 2002, the Company also adopted the provisions of Statement of Financial Accounting Standards No. 142...

  • Page 57
    ... the impact of the Company's March 2003 settlement with the Internal Revenue Service ("IRS"). Stock Options The Company applies Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" in accounting for stockbased employee compensation arrangements whereby compensation...

  • Page 58
    ... at December 31, 2002. Revenue Recognition Revenue consists of sales of new and used vehicles and related finance and insurance ("F&I") products, sales of parts and service and sales of other products. As further described below, the Company recognizes revenue in the period in which products are...

  • Page 59
    ... types of insurance products: extended warranties, guaranteed auto protection ("GAP," which covers the shortfall between loan balance and insurance payoff), credit insurance, lease "wear and tear" insurance and theft protection products. The Company may also participate in future underwriting profit...

  • Page 60
    .... New Accounting Pronouncements As of January 1, 2003, the Company adopted Emerging Issues Task Force ("EITF") Issue No. 02-16, "Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor." See Note 1, Summary of Significant Accounting Policies - Cumulative...

  • Page 61
    ... for the portion of the vehicle sales price financed by the Company's customers. In July 2003, the Company sold all of its finance receivables portfolio to a third party and received proceeds equal to the net carrying value of the finance receivables and servicing liabilities at the close date...

  • Page 62
    ...' captive finance subsidiaries, and are generally due when the related vehicles are sold. Floorplan facilities are primarily collaterialized by new vehicle inventories and related receivables and contain certain financial and operational covenants. At December 31, 2003, the Company was in...

  • Page 63
    ....7 In 2003, the Company recognized a $27.5 million real estate impairment charge included in Other Losses (Gains) in the 2003 Consolidated Income Statement related to the write-down to fair value of three franchised underperforming new vehicle stores that currently operate in converted used vehicle...

  • Page 64
    insurance risks are 56

  • Page 65
    ... AUTONATION, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) estimated by management and by actuarial evaluation based on historical claims experience, adjusted for current trends and changes in claims-handling procedures. At December 31, 2003 and 2002 current insurance reserves...

  • Page 66
    .... The interest rates charged under the revolving credit facilities are impacted by the credit ratings of those facilities. Within the meaning of Regulation S-X, Rule 3-10, AutoNation, Inc. (the parent company) has no independent assets or operations, the guarantees of its subsidiaries are full and...

  • Page 67
    ...payment of cash and coupons towards the purchase of vehicles, the dollar value of which is not material. In August 2003, the Court approved the settlement. Many of the Company's Texas dealership subsidiaries have been named in three class action lawsuits brought against the Texas Automobile Dealers...

  • Page 68
    ... claim is asserted, liability would be limited by the terms of the applicable agreement. From time to time, primarily in connection with dispositions of automotive stores, the Company's subsidiaries assign or sublet to the dealership purchaser the subsidiaries' interests in any real property leases...

  • Page 69
    ...'s operations and the extensive legal and regulatory framework applicable to its business. The Company does not have any material known environmental commitments or contingencies. 10. SHAREHOLDERS' EQUITY In October 2002, the Company's Board of Directors extended the Company's share repurchase...

  • Page 70
    ...-servicing costs. The charges also include $1.5 million of direct exit costs for asset write-offs and other costs. In addition, during 2001, the Company recognized impairment charges totaling $4.1 million, primarily associated with the deterioration in residual values of finance lease receivables...

  • Page 71
    ... 31: 2003 2002 Finance leases Installment loans Investments in securitizations Total finance receivables $- - - $- $ 8.4 37.9 46.6 $92.9 13. RESTRUCTURING ACTIVITIES AND IMPAIRMENT CHARGES During 1999, the Company approved a restructuring plan to exit the used vehicle megastore business...

  • Page 72
    ... (Gains) in the 2003 Consolidated Income Statement related to the write-down to fair value of three underperforming franchised new vehicle stores that currently operate in converted used vehicle megastores. In 2002, the Company decided to relocate a franchised new vehicle store located in a former...

  • Page 73
    ...2002 Deferred income tax assets: Inventory and receivable reserves Warranty, chargeback and self-insurance liabilities Other accrued liabilities Loan and lease items Other, net Net operating losses - Federal & State $ (25.0) (42.0) (46.8) (20.6) (35.1) (22.2) (191.7) 17.0 116.1 11.2 $ (30.3) (37...

  • Page 74
    ... such benefits in the future, and which deductions it was foregoing. In March 2003, the Company entered into a settlement agreement with the IRS with respect to the tax treatment of these transactions. Under the agreement, the Company agreed to pay the IRS net aggregate payments of approximately...

  • Page 75
    ...guarantees. The Company agreed to assume real property leases, which expire in 2017, in order to control and attempt to mitigate its exposure relating thereto. In the fourth quarter of 2001, the Company incurred a pre-tax charge of $20.0 million included in Income (Loss) from Discontinued Operations...

  • Page 76
    ... accounting. The Company also paid $3.2 million, $8.1 million and $22.3 million during the years ended December 31, 2003, 2002 and 2001, respectively, in deferred purchase price for certain prior year automotive retail acquisitions. During 2003 and 2002, the Company acquired thirteen and nine stores...

  • Page 77
    68

  • Page 78
    ... 2003. ANC Rental agreed to buy automotive parts from the Company following the spin-off, and paid the Company approximately $3.0 million, $5.2 million and $8.1 million, respectively, for parts purchases made during 2003, 2002 and 2001. See further information in Note 16, Discontinued Operations...

  • Page 79
    ... rate on investments in securitizations - 9.15%; discount rate on servicing liability -7.40%; annual loss rate - 2.96% ; and prepayment rate -1.50%. • Fixed rate debt: The fair value of fixed rate debt is based on borrowing rates currently available to the Company for debt with similar terms and...

  • Page 80
    ...The Company's operations generally experience higher volumes of vehicle sales and service 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 light trucks is generally lower during the winter months...

  • Page 81
    ... AUTONATION, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The following table sets forth, for the periods indicated, the high and low prices per share of the Company's Common Stock as reported by the New York Stock Exchange: High Low 2003 Fourth Quarter Third Quarter Second...

  • Page 82
    ... Contents AUTONATION, INC...financing activities. • Notes to the Consolidated Financial Statements: - Note 1, Summary of Significant Accounting Policies: Advertising...number of megastore and other properties for 2001 and 2000 are disclosed. - Note 18, Acquisition and Divestitures: The purchase price...

  • Page 83
    ...the Current Report on Form 8-K that we filed with the Commission on May 7, 2003, we appointed KPMG LLP as our new independent public accountant effective as of May 6, 2003 and we dismissed Deloitte & Touche LLP as our independent public accountant effective as of May 5, 2003. Item 9A. CONTROLS AND...

  • Page 84
    ... herewith. (3) Exhibits - See Exhibit Index included elsewhere in this document. (b) Reports on Form 8-K. Current Report on Form 8-K dated and furnished to the Commission on October 30, 2003, Item 12, reporting the Company's results of operations for the quarter ended September 30, 2003. 75

  • Page 85
    ... $ 15.5 $ 22.5 $42.7 $ $ $ - - .2 Restructuring reserves 2003 2002 2001 (3) : $ $ $ - .2 1.2 (1) Accounts written off. (2) Includes $3.2 million of allowances for finance receivables eliminated with the sale of all of the Company's finance receivable portfolio. (3) Included under the caption...

  • Page 86
    ... to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and ...Officer (Principal Financial Officer) Vice President - Corporate Controller (Principal Accounting Officer) Director March 9, 2004 /s/ CRAIG ...

  • Page 87
    Table of Contents Signature Title Date /s/ EDWARD S. LAMPERT Edward S. Lampert Director March 9, 2004 Director /s/ IRENE B. ROSENFELD Irene B. Rosenfeld March 9, 2004 78

  • Page 88
    ... the Indenture to increase by $400.0 million the Company's capacity to make restricted payments under the terms of the Indenture, including payments for the repurchase of its common stock (incorporated by reference to Exhibit 4.2 to AutoNation's Annual Report on Form 10-K for the year ended December...

  • Page 89
    ..., former Senior Vice President - Finance (incorporated by reference to Exhibit 10.2 to AutoNation, Inc.'s Quarterly Report on Form 10-Q/ A for the quarter ended June 30, 2003). Letter of Deloitte & Touche LLP Regarding Change in Certifying Accountant dated May 6, 2003 (incorporated by reference to...

  • Page 90
    ... AutoNation Chrysler Plymouth Jeep of North Houston, L.P., AutoNation Imports Katy GP, Inc. f/k/a AutoNation Chrysler Plymouth GP, Inc., AutoNation Imports Katy LP, Inc. f/k/a AutoNation Chrysler Plymouth LP, Inc. and White Bear Auto Center, LLC f/k/a Cook-Whitehead Ford, LLC (each a "GUARANTEEING...

  • Page 91
    ...extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due by the Company of any amount so guaranteed or any performance so guaranteed which failure continues for three days after demand therefor is made to the Company for whatever reason, the Guarantors...

  • Page 92
    ... Guarantors for the purpose of this Guarantee, failing payment when due by the Company which failure continues for three days after demand therefor is made to the Company. (h) The Guarantors shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right...

  • Page 93
    ...PARK V. IMPORTS, INC. F/K/A EMICH LINCOLN-MERCURY, INC. AN FREMONT LUXURY IMPORTS, INC. F/K/A PITRE KIA OF SCOTTSDALE, INC. AUTONATION IMPORTS KATY LP, INC. F/K/A AUTONATION CHRYSLER PLYMOUTH LP, INC. AUTONATION IMPORTS KATY GP, INC. F/K/A AUTONATION CHRYSLER PLYMOUTH GP, INC. WHITE BEAR AUTO CENTER...

  • Page 94
    AUTONATION IMPORTS OF KATY, L.P. F/K/A AUTONATION CHRYSLER PLYMOUTH JEEP OF NORTH HOUSTON, L.P. BYr AUTONATION IMPORTS KATY GP, INC. F/K/A AUTONATION CHRYSLER PLYMOUTH GP, INC. Byr /s/ Jonathan P. Ferrando Namer Jonathan P. Ferrando Titler Vice President and Secretary WELLS FARGO BANK MINNESOTA, ...

  • Page 95
    ... Corpus Christi T. Imports, LP Champion Toyota Corpus Christi TX AN County Line Ford, Inc. County Line Ford TX AN Dealership Holding Corp. FL AN Fremont Luxury Imports, Inc. Claridge's BMW DE AN Luxury Imports GP, LLC DE AN Luxury Imports of Pembroke Pines, Inc. Mercedes-Benz of Pembroke Pines...

  • Page 96
    ... Auto Car, Inc. Autowest Honda-Roseville CA 1 LEGAL ENTITY CURRENT DBA IN USE STATE OF ORGANIZATION Auto Holding Corp. DE Auto Mission Ltd. Hayward Toyota CA Auto West, Inc. Autowest Dodge Chrysler-Plymouth Isuzu CA AutoNation Benefits Company, Inc. FL AutoNation Cayman Insurance...

  • Page 97
    ... Corporation TN Contemporary Cars, Inc. Mercedes-Benz of Orlando; Porsche of North Orlando FL Cook-Whitehead Ford, Inc. Cook-Whitehead Ford FL Corporate Properties Holding, Inc. DE Costa Mesa Cars, Inc. Power Honda Costa Mesa CA Courtesy Auto Group, Inc. Courtesy Buick; Courtesy Pontiac-GMC FL...

  • Page 98
    ..., Ltd. BMW of Houston North TX 3 LEGAL ENTITY CURRENT DBA IN USE STATE OF ORGANIZATION CT Motors, Inc. Charlie Thomas Acura TX D/L Motor Company AutoWay Honda FL Deal Dodge of Des Plaines, Inc. IL Dealership Properties, Inc. NV Dealership Realty Corporation TX Desert Buick-GMC...

  • Page 99
    ... FL G.B. Import Sales & Service, LLC Power Volvo South Bay DE Gene Evans Ford, LLC Gene Evans Team Ford DE George Sutherlin Nissan, LLC Team Nissan of Marietta DE Golf Mill Ford, Inc. Golf Mill Ford DE Government Boulevard Motors, Inc. Treadwell Honda AL Gulf Management, Inc. Lexus of...

  • Page 100
    ...Inc. Maroone Toyota FL M.L.F. Insurance Agency OH MacHoward Leasing Power Chevrolet Irvine CA MacPherson Enterprises, Inc. CA Magic Acquisition Corp. Power Ford Valencia DE Marks Family Dealerships, Inc. TX Marks Transport, Inc. Champion Toyota Gulf Freeway TX Maroone Chevrolet Ft. Lauderdale...

  • Page 101
    ...Infiniti Infiniti South Bay CA Peyton Cramer Jaguar Jaguar of South Bay CA Peyton Cramer Lincoln-Mercury Power Hyundai Volkswagen South Bay CA Pierce Automotive Corporation AutoNation Fleet Direct AZ Pierce, LLC Tempe Toyota DE Pitre Buick-Pontiac-GMC of Scottsdale, Inc. Pitre Buick-Pontiac-GMC...

  • Page 102
    ...Ford, Inc. Ford of Dublin CA Six Jays LLC CO SMI Motors, Inc. Costa Mesa Infiniti CA Smythe European, Inc. Smythe Volvo CA Southwest Dodge, LLC John Elway Dodge Southwest DE Spitfire Properties, Inc. FL Spokane Mitsubishi Dealers Advertising Association, Inc. WA Star Motors, LLC Mercedes-Benz...

  • Page 103
    ...Inc. FL Town & Country Chrysler Jeep, Inc. DE Toyota Cerritos Limited Partnership GA Triangle Corporation DE Tustin Auto Venture, LLC DE T-West Sales & Service, Inc. Desert Toyota NV Valencia B. Imports, Inc. Valencia BMW DE Valencia Dodge Power Chrysler Jeep Valencia; Power Dodge Valencia CA...

  • Page 104
    9

  • Page 105
    ... operations and for which we have expressed no opinion or other form of assurance other than with respect to such disclosures and reclassifications) appearing in this Annual Report on Form 10-K of AutoNation, Inc. for the year ended December 31, 2003. DELOITTE & TOUCHE LLP Fort Lauderdale, Florida...

  • Page 106
    ...2003, and the related financial statement schedule, which report appears in the December 31, 2003, annual report on Form 10-. of AutoNation, Inc. Our report refers to a change in method of accounting..., 333-42891, 333-56967, 333-90819 and 333-81888) KPMN LLP Fort Lauderdale, Florida March 8, 2004

  • Page 107
    ... evaluation; and b) c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is...

  • Page 108
    ....2 CERTIFICATION I, Craig T. Monaghan, iertify that: 1. I have reviewed this annual report on Form 10-K of AutoNation, Ini.; 2. Based on my knowledge, this annual report does not iontain any untrue statement of a material fait or omit to state a material fait neiessary to make the statements made...

  • Page 109
    ... OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report on Form 10-K of AutoNation, Inc. (the "Company") for the year ended December 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Michael J. Jackson, Chief Executive Officer of the...

  • Page 110
    ...-OXLEY ACT OF 2002 In connection with the Annual Report on Form 10-K of AutoNation, Inc. (the "Company") for the year ended December 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Craig T. Monaghan, Senior Vice President and Chief Financial...