AutoNation 2003 Annual Report Download - page 45

Table of Contents
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Shareholders of AutoNation, Inc.:
We have audited the accompanying consolidated balance sheet of AutoNation, Inc. and subsidiaries as of December 31, 2002 and the
related consolidated statements of income, shareholders’ equity and comprehensive income (loss) and cash flows for the year then ended.
Our audit also included the financial statement schedule for the year ended December 31, 2002, listed in the Index at Item 15. These
consolidated financial statements and the financial statement schedule are the responsibility of the Company’s management. Our
responsibility is to express an opinion on the consolidated financial statements and the financial statement schedule based on our audit. The
Company’s consolidated financial statements and financial statement schedule for the year ended December 31, 2001, before the revisions
described in Note 1 and Note 24 to the consolidated financial statements, were audited by other auditors who have ceased operations. Those
auditors expressed an unqualified opinion on those consolidated financial statements in their report dated February 7, 2002.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company as of
December 31, 2002 and the results of their operations and their cash flows for the year then ended, in conformity with accounting principles
generally accepted in the United States of America. Also, in our opinion, the financial statement schedule for the year ended December 31,
2002, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information
set forth therein.
As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for goodwill and other
intangible assets in 2002 to conform to Statement of Financial Accounting Standards No. 142.
As discussed above, the consolidated financial statements of AutoNation, Inc. for the year ended December 31, 2001 were audited by
other auditors who have ceased operations. These consolidated financial statements have been revised as follows: (a) As described in Note 1
under the heading “Intangible Assets”, these consolidated financial statements have been revised to include the transitional disclosures
required by Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, which was adopted by the
Company as of January 1, 2002. Our audit procedures with respect to the disclosures in Note 1 with respect to 2001 included (i) agreeing the
previously reported net income to the previously issued consolidated financial statements and the adjustments to reported net income
representing amortization expense (including any related tax effects) recognized in that period to the Company’s underlying records obtained
from management, and (ii) testing the mathematical accuracy of the reconciliation of adjusted net income to reported net income, and the
related earnings-per-share amounts; (b) As described in the second paragraph of Note 24, these consolidated financial statements and related
notes for the year ended December 31, 2001 have been revised to provide disaggregations of certain financial statement and note disclosures.
Our audit procedures with respect to the financial statement and notes disclosures described in the second paragraph of Note 24 included
(i) agreeing the previously reported amounts to the previously issued consolidated financial statements and the disaggregation of such
previously reported amounts to the Company’s underlying records obtained from management, and (ii) testing the mathematical accuracy of
the such disaggregation; (c) As described in the second paragraph of Note 24, these consolidated financial statements for the year ended
December 31, 2001 have been revised to reflect the reclassification of floorplan interest expense. Our audit procedures with respect to the
reclassification of floorplan interest expense described in the second paragraph of Note 24 included (i) agreeing the previously reported
amount to the previously issued consolidated financial statements, and (ii) testing the mathematical accuracy of the reclassification. In our
opinion, such disclosures and reclassifications are appropriate and have been properly applied. However, we were not engaged to audit,
review, or apply any procedures to the 2001 consolidated financial statements 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
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