AutoNation 2003 Annual Report Download - page 69

Table of Contents
AUTONATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
perform under any such assigned leases or subleases, the Company estimates that lessee rental payment obligations during the remaining
terms of these leases are currently approximately $55 million. The Company and its subsidiaries also may be called on to perform other
obligations under these leases, such as environmental remediation of the leased premises or repair of the leased premises upon termination
of the lease, although the Company presently has no reason to believe that it or its subsidiaries will be called on to so perform and such
obligations cannot be quantified at this time. The Company’s exposure under these leases is difficult to estimate and there can be no
assurance that any performance of the Company or its subsidiaries required under these leases would not have a material adverse affect on
the Company’s business, financial condition, cash flows and prospects.
As further discussed in Note 8, Notes Payable and Long-Term Debt, in the ordinary course of business, the Company is required to post
performance and surety bonds, letters of credit, and/or cash deposits as financial guarantees of the Company’s performance.
In the ordinary course of business, the Company is subject to numerous laws and regulations, including automotive, environmental,
health and safety and other laws and regulations. The Company does not anticipate that the costs of such compliance will have a material
adverse effect on its business, consolidated results of operations, cash flows or financial condition, although such outcome is possible given
the nature of the Company’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 program by authorizing the Company to
acquire an additional $500.0 million of its common stock. Including the program authorized in October 2002, the Board has authorized the
Company to acquire $3.0 billion of its common stock since 1998 and, through December 31, 2003, it has acquired 224.9 million shares of
its common stock for an aggregate purchase price of approximately $2.7 billion, leaving approximately $295.2 million authorized for
repurchases at December 31, 2003.
A summary of yearly repurchase activity follows:
Aggregate
Purchase
Year Ended December 31: Shares Repurchased Price
2003 39.2 $575.2
2002 30.7 $389.9
2001 27.3 $256.8
In 2003 and 2002, the Company’s Board of Directors authorized the retirement of 50 million and 150 million treasury shares,
respectively, which will resume the status of authorized but unissued shares. This had the effect of reducing treasury stock and issued
common stock, which includes treasury stock. The Company’s outstanding common stock was not impacted by the treasury share
retirements. The Company’s common stock, additional paid-in capital and treasury stock accounts have been adjusted accordingly. There
was no impact to net shareholders’ equity.
The Company has 5.0 million authorized shares of preferred stock, par value $.01 per share, none of which are issued or outstanding.
The Board of Directors has the authority to issue the preferred stock in one or more series and to establish the rights, preferences and
dividends.
11. STOCK OPTIONS
The Company has various stock option plans under which options to purchase shares of common stock may be granted to key
employees and directors of the Company. Options granted under the plans are non-
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