AutoNation 2007 Annual Report Download - page 32

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Table of Contents
2005 that were partially offset by a challenging United States retail market and the effects of Hurricane Wilma on our Florida stores during the
fourth quarter of 2005.
Same store gross profit per vehicle retailed decreased 1.9% during 2007, as compared to 2006, primarily as a result of a competitive retail
environment resulting in pricing pressures across all brand product lines, partially offset by the shift in our sales mix to more premium luxury
brands. Same store gross profit per vehicle retailed increased 2.4% during 2006, as compared to 2005, primarily as a result of the shift in our
sales mix to more imports, including premium luxury brands.
Our new vehicle inventories were $1.9 billion or 53 days supply at December 31, 2007, as compared to new vehicle inventories of
$1.9 billion or 51 days supply at December 31, 2006.
The following table details net inventory carrying benefit (cost), consisting of floorplan interest expense net of floorplan assistance earned
(amounts received from manufacturers specifically to support store financing of inventory). Floorplan assistance is accounted for as a
component of new vehicle gross profit.

 
    

Floorplan assistance $ 100.0 $ 108.8 $ (8.8) $ 106.6 $ 2.2
Floorplan interest expense (133.1) (138.2) 5.1 (102.3) (35.9)
Net inventory carrying benefit (cost) $ (33.1) $ (29.4) $ (3.7) $ 4.3 $ (33.7)
The net inventory carrying cost (floorplan interest expense net of floorplan assistance from manufacturers) increased in 2007, as compared
to 2006, primarily as a result of a decrease in floorplan assistance due to lower new vehicle sales, partially offset by a decrease in floorplan
interest expense due to lower new inventory levels. In 2008, we anticipate lower net inventory carrying cost due to lower floorplan interest rates,
partially offset by decreases in floorplan assistance.
The net inventory carrying cost (floorplan interest expense net of floorplan assistance from manufacturers) increased in 2006, as compared
to 2005, primarily as a result of increased floorplan interest expense due to higher short-term LIBOR interest rates.
30