AutoNation 2003 Annual Report Download - page 61

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Table of Contents
AUTONATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
2003 and should be applied prospectively. The adoption of SFAS 149 did not have an impact on the Company’s consolidated financial
position, results of operations or cash flows.
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 the
Company’s 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 the Company’s consolidated financial position, results
of operations or cash flows.
2. RECEIVABLES, NET
The components of receivables, net of allowance for doubtful accounts, at December 31 are as follows:
2003 2002
Contracts in transit and vehicle receivables $394.5 $407.0
Finance receivables — 92.9
Trade receivables 96.0 99.5
Manufacturer receivables 177.0 150.5
Income taxes refundable 36.2 6.6
Other 80.1 88.8
783.8 845.3
Less: Allowances (15.5) (19.3)
Less: Allowance for finance receivables — (3.2)
Less: Long-term portion of finance receivables — (63.0)
Receivables, net $768.3 $759.8
Contracts in transit and vehicle receivables represent receivables from financial institutions 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 of the transaction totaling $52.4 million, resulting in no gain or loss on the
transaction.
54