AutoNation 2005 Annual Report Download - page 62

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Table of Contents
AUTONATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
9. SHAREHOLDERS’ EQUITY
A summary of yearly repurchase activity follows:
Aggregate
Year Ended December 31: Shares Repurchased Purchase Price
2005 11.8 $237.1
2004 14.1 $236.8
2003 39.2 $575.2
As of December 31, 2005, the Company has $71.3 million available for share repurchases under the repurchase program authorized by
the Company’s Board of Directors. Future share repurchases are subject to limitations contained in the indenture relating to the Company’s
senior unsecured notes.
In 2004 and 2003, the Company’s Board of Directors authorized the retirement of 20 million and 50 million treasury shares, respectively,
which assumed 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, net of treasury 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 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.
During 2005, 2004 and 2003, proceeds from the exercise of stock options were $112.8 million, $94.2 million and $118.1 million,
respectively.
10. 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-qualified and are granted at a price equal to or above the
closing market price of the common stock on the trading day immediately prior to the date of grant. Generally, options granted will have a
term of 10 years from the date of grant, and will vest in increments of 25% per year over a four-year period on the yearly anniversary of the
grant date. A summary of stock option transactions is as follows for the years ended December 31:
2005 2004 2003
Weighted- Weighted- Weighted-
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
Options outstanding at beginning of year 36.0 $14.68 42.9 $13.71 53.5 $12.85
Granted 2.6 $21.40 2.8 $16.87 3.2 $16.49
Exercised (9.8) $11.55 (8.7) $10.88 (10.9) $10.82
Canceled (.8) $15.36 (1.0) $12.99 (2.9) $11.71
Options outstanding at end of year 28.0 $16.39 36.0 $14.68 42.9 13.71
Options exercisable at end of year 22.0 $15.91 28.5 $14.64 32.5 $14.14
Options available for future grants 15.7 18.5 20.2
60