AutoNation 2005 Annual Report Download - page 28

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Table of Contents
New Vehicle
Years Ended December 31,
2005 vs. 2004 2004 vs. 2003
Variance Variance
Favorable/ Favorable/
2005 2004 (Unfavorable) % Variance 2003 (Unfavorable) % Variance
($ in millions, except per vehicle data)
Reported:
Revenue $ 11,532.2 $ 11,664.9 $ (132.7) (1.1) $ 11,228.6 $ 436.3 3.9
Gross profit $ 834.6 $ 833.3 $ 1.3 .2 $ 823.8 $ 9.5 1.2
Retail vehicle unit sales 391,698 402,303 (10,605) (2.6) 396,854 5,449 1.4
Revenue per vehicle retailed $ 29,442 $ 28,995 $ 447 1.5 $ 28,294 $ 701 2.5
Gross profit per vehicle retailed $ 2,131 $ 2,071 $ 60 2.9 $ 2,076 (5) (.2)
Gross profit as a percentage of
revenue 7.2 7.1 7.3
Days supply (industry standard of
selling days, including fleet) 56 days 53 days
Same Store:
Revenue $ 11,417.1 $ 11,660.9 $ (243.8) (2.1)
Gross profit $ 825.3 $ 833.2 $ (7.9) (.9)
Retail vehicle unit sales 388,748 402,137 (13,389) (3.3)
Revenue per vehicle retailed $ 29,369 $ 28,997 $ 372 1.3
Gross profit per vehicle retailed $ 2,123 $ 2,072 $ 51 2.5
Gross profit as a percentage of
revenue 7.2% 7.1%
The following table details the net floorplan benefit consisting of floorplan assistance, a component of new vehicle gross profit, and
floorplan interest expense.
Years Ended December 31,
Variance Variance
2005 2004 2005 vs. 2004 2003 2004 vs. 2003
($ in millions)
Floorplan assistance $114.4 $114.0 $.4 $110.5 $3.5
Floorplan interest expense (110.7) (79.1) (31.6) (66.5) (12.6)
Net inventory carrying benefit $3.7 $34.9 $(31.2) $44.0 $(9.1)
Reported new vehicle performance for 2005 benefited from the impact of acquisitions and divestitures when compared to same store
performance.
Same store new vehicle revenue for 2005 decreased compared to 2004 primarily as a result of a same store unit volume decrease
partially offset by an increase in revenue per unit. In June 2005, General Motors announced an “employee pricing for everyone” program,
which was followed in July 2005 with similar programs by Ford and Chrysler. Although these programs helped drive unit volume during
2005, a challenging United States auto retail environment and the effects of Hurricane Wilma on our Florida stores negatively impacted same
store new vehicle unit volume during the fourth quarter of 2005. Despite higher gas prices, rising interest rates, and a shift in consumer
preferences from trucks to crossover vehicles and cars, we expanded revenue per vehicle retailed and gross profit per vehicle retailed through
our focus on pricing and profitability and management of our new vehicle inventory levels and a shift in mix from domestics to imports and
luxury.
New vehicle revenue for 2004 increased compared to 2003 driven by increases in revenue per unit and unit volume. The increase in
average revenue per unit retailed was attributable to increased dealer incentives and a shift in mix to more expensive trucks and luxury
vehicles. The increase in unit volume was attributable to the impact of acquisitions in 2004, partially offset by a decrease in same store unit
volume consistent with industry trends for our brand and market mix in part due to the four major hurricanes that caused store closings and
substantial disruption of our business throughout Florida and the Southeast during the third quarter of 2004. During the fourth quarter of
2004, we saw improvements in these markets driven by post-
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