AutoNation 2003 Annual Report Download - page 41

Table of Contents
In May 2003, the FASB issued SFAS 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and
Equity,” effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first
interim period beginning after June 15, 2003. This statement establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a freestanding financial instrument
that is within its scope as a liability (or an asset in some circumstances). The adoption of SFAS 150 did not have an impact on our
consolidated financial position, results of operations or cash flows.
In November 2003, the EITF reached a consensus on EITF Issue No. 03-10, “Application of Issue No. 02-16 by Resellers to Sales
Incentives Offered to Consumers by Manufacturers.” EITF 03-10 provides guidance on how to account for sales incentive arrangements
provided by manufacturers to consumers and accepted by resellers. The provisions of EITF 03-10 apply to fiscal years beginning after
November 25, 2003. The adoption of EITF 03-10 is not expected to have an impact on our consolidated financial position, results of
operations or cash flows.
Forward Looking Statements
Our business, financial condition, results of operations, cash flows and prospects, and the prevailing market price and performance of our
common stock, may be adversely affected by a number of factors, including the matters discussed below. Certain statements and
information set forth in this Annual Report on Form 10-K, as well as other written or oral statements made from time to time by us or by our
authorized executive officers on our behalf, constitute “forward-looking statements” within the meaning of the Federal Private Securities
Litigation Reform Act of 1995. We intend for our forward-looking statements to be covered by the safe harbor provisions for forward-looking
statements contained in the Private Securities Litigation Reform Act of 1995, and we set forth this statement and these risk factors in order to
comply with such safe harbor provisions. You should note that our forward-looking statements speak only as of the date of this Annual Report
on Form 10-K or when made and we undertake no duty or obligation to update or revise our forward-looking statements, whether as a result
of new information, future events or otherwise. Although we believe that the expectations, plans, intentions and projections reflected in our
forward-looking statements are reasonable, such statements are subject to known and unknown risks, uncertainties and other factors that
may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements. The risks, uncertainties and other factors that our stockholders and prospective
investors should consider include, but are not limited to, the following:
• The automotive retailing industry is cyclical and is sensitive 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 of which are very difficult
to predict.
• We are subject to restrictions imposed by, and significant influence from, vehicle manufacturers that may adversely impact our
business, financial condition, results of operations, cash flows and prospects, including our ability to acquire additional stores.
• Our stores are dependent on the programs and operations of vehicle manufacturers and, therefore, any changes to such programs
and operations may adversely affect our store operations and, in turn, affect our business, results of operations, financial condition,
cash flows and prospects.
• We are subject to numerous legal and administrative proceedings, which, if the outcomes are adverse to us, could materially
adversely affect our business, results of operations, financial condition, cash flows and prospects.
• Our operations, including, without limitation, our sales of finance and insurance and vehicle protection products, are subject to
extensive governmental laws, regulation and scrutiny. If we are found to be in violation of any of these laws or regulations, or if
new laws or regulations are enacted that adversely affect our operations, our business, operating results and prospects could suffer.
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