8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date Of Report (Date Of Earliest Event Reported) January 29, 2009

AUTONATION, INC.

(Exact Name Of Registrant As Specified In Its Charter)

DELAWARE	1-13107	73-1105145
(State Or Other Jurisdiction Of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

110 S.E. 6th Street
Ft. Lauderdale, Florida 33301

(Address Of Principal Executive Offices, Including Zip Code)

Registrant’s Telephone Number, Including Area Code (954) 769-6000

(Former Name Or Former Address, If Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On January 29, 2009, AutoNation, Inc. (the “Company”) issued a press release announcing its results of operations for the fiscal quarter and year ended December 31, 2008. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

99.1 Press Release dated January 29, 2009 issued by AutoNation, Inc.

2

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

AUTONATION, INC.
(Registrant)
By:	/s/ Jonathan P. Ferrando
	Jonathan P. Ferrando
	Executive Vice President, General Counsel and Secretary

Dated: January 29, 2009

3

INDEX TO EXHIBITS

Exhibit		Exhibit
Number		Description
	99.1	Press Release dated January 29, 2009 issued by AutoNation, Inc.

4

EX-99.1

Exhibit 99.1

For Immediate Release	Contact: Marc Cannon
	(954) 769-3146
	Cannonm@autonation.com
	Investor contact:
	Derek Fiebig
	954-769-7342

AutoNation Reports 2008 Fourth Quarter and Full Year Results

– In the fourth quarter, AutoNation remained profitable in distressed industry environment

– AutoNation exceeds cost savings objectives by 100%, with an annualized reduction now of $200 million

– Full year debt reduction of approximately three-quarters of a billion dollars

– Announces manufacturer consent agreements relating to largest stockholder, ESL Investments, Inc.

FORT LAUDERDALE, Fla., (January 29, 2009) —AutoNation, Inc. (NYSE: AN), America’s largest automotive retailer, today reported 2008 fourth quarter net income from continuing operations of $70 million, or $0.40 per share, compared to $51 million, or $0.28 per share, in the prior year. In the quarter, the Company had a net benefit from certain items of $48 million or $0.28 per share, including a net positive tax adjustment of $0.18 per share and a gain on the repurchase of the Company’s senior notes of $0.14 per share. Additionally, other items had an unfavorable impact of $0.04 per share. After adjusting for these items as disclosed in the attached financial tables, net income from continuing operations for the 2008 fourth quarter was $22 million or $0.12 per share.

Fourth quarter 2008 revenue totaled $2.7 billion, compared to $4.1 billion in the year-ago period, driven primarily by lower vehicle sales. In the fourth quarter, total U.S. industry new vehicle retail unit sales declined 49%, based on CNW Research data. In comparison, in the fourth quarter AutoNation’s new vehicle unit sales declined 40%.

Commenting on the fourth quarter, Mike Jackson, Chairman and Chief Executive Officer, said, “The fourth quarter was negatively impacted by the credit panic triggered on September 15 by the bankruptcy of Lehman Brothers. Automotive retail sales collapsed from one day to the next as credit for our customers was withdrawn from the market. This panic continued to erode consumer confidence and accelerated the decline in the U.S. economy and auto retail market. In the fourth quarter, AutoNation continued to remain profitable even with a U.S. SAAR near 10 million new vehicle units, a 27 year low.” Jackson also stated, “When we saw the auto retail

1

market deteriorate in the beginning of 2008, AutoNation began to identify cost reduction opportunities. In July we announced our plan to reduce cost by $100 million on an annual run rate basis and have successfully achieved this goal — a significant accomplishment in its own right. With the collapse of sales in the second half of September, additional actions became necessary in the fourth quarter to further reduce costs. We have successfully implemented additional cost reduction actions totaling approximately $100 million on an annualized run rate basis. Taken together, AutoNation’s total annualized cost savings of $200 million demonstrates our Company’s ability to effectively address the challenges created by the credit panic.”

Jackson added, “Despite the severely depressed sales environment, AutoNation continues to generate solid cash flow which allowed the Company to reduce its non-vehicle debt by $155 million during the quarter and close the fourth quarter with a strong cash position of $110 million. Full-year debt reduction totals approximately three-quarters of a billion dollars, consisting of $517 million of non-vehicle debt and $195 million of vehicle floor plan debt. As a result, the Company remained in compliance with all financial covenants in its debt agreements as of December 31, 2008 with a leverage ratio of 2.45 versus 2.78 a year ago.”

Looking forward, Jackson also stated, “We agree with industry projections that the 2009 SAAR will be in the range of 11 million new vehicle units with obvious weakness in the first half of the year. In this environment we believe we will be able to manage within all financial covenants.”

AutoNation provides additional detail on its three operating segments: Domestic, Import, and Premium Luxury. The Domestic segment is comprised of stores that sell vehicles manufactured by General Motors, Ford, and Chrysler; the Import segment is comprised of stores that sell vehicles manufactured primarily by Toyota, Honda, and Nissan; and the Premium Luxury segment is comprised of stores that sell vehicles manufactured primarily by Mercedes, BMW, and Lexus.

2

Segment Results for the Quarter

• Domestic —Domestic segment income ⁽¹⁾ was $14 million compared to year-ago segment income of $36 million. Fourth quarter Domestic retail new vehicle unit sales declined 44%. In comparison, U.S. industry Domestic retail new vehicle unit sales declined 52% according to CNW Research.

• Import —Import segment income was $20 million compared to year-ago segment income of $52 million. Fourth quarter Import retail new vehicle unit sales declined 39%. In comparison, U.S. industry Import new vehicle retail unit sales declined 44% according to CNW Research.

• Premium Luxury —Premium Luxury segment income was $39 million compared to year-ago segment income of $59 million. Fourth quarter Premium Luxury retail new vehicle unit sales declined 35%. In comparison, U.S. industry Premium Luxury retail new vehicle unit sales declined 34% according to CNW Research.

⁽¹⁾ Segment income is defined as operating income less floor plan interest expense

For the full year ended December 31, 2008, the Company reported net loss from continuing operations of $1.23 billion or $6.89 per share, compared to net income from continuing operations of $289 million or $1.44 per share in the prior year. After adjusting for the impairment charges and certain other items as disclosed in the attached financial tables, net income from continuing operations for the full year ended December 31, 2008 was $181 million or $1.02 per share, compared to $277 million or $1.38 per share in the prior year. The Company’s revenue for the year ended December 31, 2008 totaled $14.1 billion, down 19% compared to $17.3 billion in the prior year.

Manufacturer Consent Agreements Relating to Largest Stockholder, ESL Investments, Inc.

The Company also announced that it has obtained consents under its framework agreements with manufacturers in order to eliminate any potentially adverse consequences under such agreements in the event that ESL Investments, Inc. (with its affiliates, “ESL”), the Company’s largest

3

stockholder, were to acquire over 50% of the Company’s common stock. ESL currently owns approximately 45% of the Company’s outstanding common stock.

“ESL has been a long-term significant stockholder of the Company,” said Mike Jackson. “We are pleased to have entered into the manufacturer consents that provide the flexibility for ESL to increase its economic stake in the Company without triggering any potentially adverse consequences under the framework agreements, while also providing for appropriate governance arrangements, including a commitment to maintain an independent Board of Directors. We appreciate ESL’s belief in the Company and its management over the past nine years and look forward to ESL’s continued involvement in helping us to build a great company and drive long-term stockholder value.”

The consents contain various terms and conditions, including that should ESL’s percentage ownership of Company common stock exceed 50%, ESL would vote its shares owned above 50% in the same proportion as shares unaffiliated with ESL are actually voted and that a majority of AutoNation’s directors shall be independent of AutoNation and ESL. In addition, pursuant to a separate agreement between AutoNation and ESL (the “ESL Voting Agreement”), ESL agreed to further limit its vote to 45%, with shares owned by ESL in excess of 45% voted in the same proportion as shares unaffiliated with ESL are actually voted. The ESL Voting Agreement expires in one year, unless extended by mutual agreement of the parties. Additional details are included in the Current Report on Form 8-K filed with the Securities and Exchange Commission today.

The fourth quarter conference call may be accessed at 11:00 a.m. Eastern Time today by phone at 888-769-8515 (pass code: AutoNation) or via the Internet (audio webcast) at http://www.AutoNation.com by clicking on the “About Us” link then clicking on “Investors” and then “Webcasts.” A playback of the conference call will be available after 12:00 (noon) p.m. Eastern Time January 29, 2009 through February 5, 2009 by calling 800-867-1926 (pass code: 75300).

4

About AutoNation, Inc.
AutoNation, Inc., headquartered in Fort Lauderdale, Fla., is America’s largest automotive retailer and has been named America’s Most Admired Automotive Retailer by FORTUNE Magazine in five of the last seven years. A component of the Standard and Poor’s 500 Index, AutoNation owns and operates 302 new vehicle franchises in 15 states. For additional information, please visit http://corp.AutoNation.com or www.AutoNation.com, where more than 80,000 vehicles are available for sale along with AutoNation’s E-Vehicle program.

FORWARD LOOKING STATEMENTS

Certain statements and information included in this release constitute “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied in such forward-looking statements. Additional discussion of factors that could cause actual results to differ materially from management’s projections, estimates and expectations is contained in the Company’s SEC filings. The Company undertakes no duty to update its forward-looking statements.

NON-GAAP FINANCIAL MEASURES

This press release and the attached financial tables contain certain non-GAAP financial measures as defined under SEC rules, such as net income and diluted earnings per share from continuing operations, adjusted in each case to exclude certain items disclosed in the attached financial tables. As required by SEC rules, the Company has provided reconciliations of these measures to the most directly comparable GAAP measures, which are set forth in the attachments to this release. The Company believes that each of the foregoing non-GAAP financial measures improves the transparency of the Company’s disclosure, provides a meaningful presentation of the Company’s results from its core business operations excluding the impact of items not related to the Company’s ongoing core business operations, and improves the period-to-period comparability of the Company’s results from its core business operations.

5

AUTONATION, INC.
UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENTS
($ in millions, except per share data)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2008			2007			2008			2007
Revenue:
New vehicle	$	1,426.7		$	2,409.1		$	7,756.2		$	10,014.3
Used vehicle		640.9			950.6			3,364.5			4,139.9
Parts and service		571.6			623.3			2,465.2			2,539.9
Finance and insurance, net		84.1			139.6			482.6			584.3
Other		13.6			17.1			63.4			68.1
Total revenue		2,736.9			4,139.7			14,131.9			17,346.5
Cost of sales:
New vehicle		1,334.2			2,239.4			7,245.3			9,305.2
Used vehicle		593.4			878.5			3,086.1			3,787.9
Parts and service		323.0			353.2			1,393.4			1,431.1
Other		5.5			7.8			27.6			29.0
Total cost of sales		2,256.1			3,478.9			11,752.4			14,553.2
Gross profit		480.8			660.8			2,379.5			2,793.3
Selling, general and administrative expenses		384.2			486.1			1,813.8			1,999.8
Depreciation and amortization		22.4			26.3			90.8			90.3
Goodwill impairment		—			—			1,610.0			—
Franchise rights impairment		—			1.2			146.5			2.2
Other expenses (income), net		10.0			(1.0	)		13.2			(0.4	)
Operating income (loss)		64.2			148.2			(1,294.8	)		701.4
Floorplan interest expense		(21.4	)		(32.6	)		(87.4	)		(129.0	)
Other interest expense		(20.1	)		(31.7	)		(89.4	)		(114.1	)
Gain on senior note repurchases		39.2			—			51.3			—
Interest income		0.7			0.8			2.2			3.4
Other losses, net		(1.8	)		(1.6	)		(4.6	)		(1.3	)
Income (loss) from continuing operations before income taxes		60.8			83.1			(1,422.7	)		460.4
Income tax provision (benefit)		(9.3	)		32.5			(197.3	)		171.7
Net income (loss) from continuing operations		70.1			50.6			(1,225.4	)		288.7
Income (loss) from discontinued operations, net of income taxes		(3.0	)		1.1			(17.7	)		(10.0	)
Net income (loss)	$	67.1		$	51.7		$	(1,243.1	)	$	278.7
Diluted earnings (loss) per share:
Continuing operations	$	0.40		$	0.28		$	(6.89	)	$	1.44
Discontinued operations	$	(0.02	)	$	0.01		$	(0.10	)	$	(0.05	)
Net income (loss)	$	0.38		$	0.28		$	(6.99	)	$	1.39
Weighted average common shares outstanding		176.8			183.5			177.8			200.0
Common shares outstanding, net of treasury stock, at December 31		176.9			180.4			176.9			180.4

AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA
($ in millions, except per vehicle data)

Operating Highlights	Three Months Ended December 31,												Twelve Months Ended December 31,
	2008			2007			$ Variance			% Variance			2008			2007			$ Variance			% Variance
Revenue:
New vehicle	$	1,426.7		$	2,409.1		$	(982.4	)		(40.8	)	$	7,756.2		$	10,014.3		$	(2,258.1	)		(22.5	)
Retail used vehicle		557.9			758.8			(200.9	)		(26.5	)		2,839.7			3,305.7			(466.0	)		(14.1	)
Wholesale		83.0			191.8			(108.8	)		(56.7	)		524.8			834.2			(309.4	)		(37.1	)
Used vehicle		640.9			950.6			(309.7	)		(32.6	)		3,364.5			4,139.9			(775.4	)		(18.7	)
Parts and service		571.6			623.3			(51.7	)		(8.3	)		2,465.2			2,539.9			(74.7	)		(2.9	)
Finance and insurance, net		84.1			139.6			(55.5	)		(39.8	)		482.6			584.3			(101.7	)		(17.4	)
Other		13.6			17.1			(3.5	)					63.4			68.1			(4.7	)
Total revenue	$	2,736.9		$	4,139.7		$	(1,402.8	)		(33.9	)	$	14,131.9		$	17,346.5		$	(3,214.6	)		(18.5	)
Gross profit:
New vehicle	$	92.5		$	169.7		$	(77.2	)		(45.5	)	$	510.9		$	709.1		$	(198.2	)		(28.0	)
Retail used vehicle		52.0			73.9			(21.9	)		(29.6	)		286.9			351.1			(64.2	)		(18.3	)
Wholesale		(4.5	)		(1.8	)		(2.7	)					(8.5	)		0.9			(9.4	)
Used vehicle		47.5			72.1			(24.6	)		(34.1	)		278.4			352.0			(73.6	)		(20.9	)
Parts and service		248.6			270.1			(21.5	)		(8.0	)		1,071.8			1,108.8			(37.0	)		(3.3	)
Finance and insurance		84.1			139.6			(55.5	)		(39.8	)		482.6			584.3			(101.7	)		(17.4	)
Other		8.1			9.3			(1.2	)					35.8			39.1			(3.3	)
Total gross profit		480.8			660.8			(180.0	)		(27.2	)		2,379.5			2,793.3			(413.8	)		(14.8	)
Selling, general and administrative expenses		384.2			486.1			101.9			21.0			1,813.8			1,999.8			186.0			9.3
Depreciation and amortization		22.4			26.3			3.9						90.8			90.3			(0.5	)
Goodwill impairment		—			—			—						1,610.0			—			(1,610.0	)
Franchise rights impairment		—			1.2			1.2						146.5			2.2			(144.3	)
Other expenses (income), net		10.0			(1.0	)		(11.0	)					13.2			(0.4	)		(13.6	)
Operating income (loss)		64.2			148.2			(84.0	)					(1,294.8	)		701.4			(1,996.2	)
Floorplan interest expense		(21.4	)		(32.6	)		11.2						(87.4	)		(129.0	)		41.6
Other interest expense		(20.1	)		(31.7	)		11.6						(89.4	)		(114.1	)		24.7
Gain on senior note repurchases		39.2			—			39.2						51.3			—			51.3
Interest income		0.7			0.8			(0.1	)					2.2			3.4			(1.2	)
Other losses, net		(1.8	)		(1.6	)		(0.2	)					(4.6	)		(1.3	)		(3.3	)
Income (loss) from continuing operations before income taxes	$	60.8		$	83.1		$	(22.3	)				$	(1,422.7	)	$	460.4		$	(1,883.1	)
Retail vehicle unit sales:
New		45,405			75,610			(30,205	)		(39.9	)		255,843			322,849			(67,006	)		(20.8	)
Used		36,107			45,763			(9,656	)		(21.1	)		181,281			201,175			(19,894	)		(9.9	)
		81,512			121,373			(39,861	)		(32.8	)		437,124			524,024			(86,900	)		(16.6	)
Revenue per vehicle retailed:
New	$	31,422		$	31,862		$	(440	)		(1.4	)	$	30,316		$	31,019		$	(703	)		(2.3	)
Used	$	15,451		$	16,581		$	(1,130	)		(6.8	)	$	15,665		$	16,432		$	(767	)		(4.7	)
Gross profit per vehicle retailed:
New	$	2,037		$	2,244		$	(207	)		(9.2	)	$	1,997		$	2,196		$	(199	)		(9.1	)
Used	$	1,440		$	1,615		$	(175	)		(10.8	)	$	1,583		$	1,745		$	(162	)		(9.3	)
Finance and insurance	$	1,032		$	1,150		$	(118	)		(10.3	)	$	1,104		$	1,115		$	(11	)		(1.0	)

Operating Percentages	Three Months Ended December 31,				Twelve Months Ended December 31,
	2008 (%)		2007 (%)		2008 (%)		2007 (%)
Revenue mix percentages:
New vehicle		52.1		58.2		54.9		57.7
Used vehicle		23.4		23.0		23.8		23.9
Parts and service		20.9		15.1		17.4		14.6
Finance and insurance, net		3.1		3.4		3.4		3.4
Other		0.5		0.3		0.5		0.4
		100.0		100.0		100.0		100.0
Gross profit mix percentages:
New vehicle		19.2		25.7		21.5		25.4
Used vehicle		9.9		10.9		11.7		12.6
Parts and service		51.7		40.9		45.0		39.7
Finance and insurance		17.5		21.1		20.3		20.9
Other		1.7		1.4		1.5		1.4
		100.0		100.0		100.0		100.0
Operating items as a percentage of revenue:
Gross profit:
New vehicle		6.5		7.0		6.6		7.1
Used vehicle — retail		9.3		9.7		10.1		10.6
Parts and service		43.5		43.3		43.5		43.7
Total		17.6		16.0		16.8		16.1
Selling, general and administrative expenses		14.0		11.7		12.8		11.5
Operating income (loss)		2.3		3.6	NM			4.0
Operating items as a percentage of total gross profit:
Selling, general and administrative expenses		79.9		73.6		76.2		71.6
Operating income (loss)		13.4		22.4	NM			25.1

NM = Not Meaningful

AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA
($ in millions, except per vehicle data)

Segment Operating Highlights	Three Months Ended December 31,												Twelve Months Ended December 31,
	2008			2007			$ Variance			% Variance			2008			2007			$ Variance			% Variance
Revenue:
Domestic	$	955.3		$	1,507.6		$	(552.3	)		(36.6	)	$	4,927.2		$	6,562.9		$	(1,635.7	)		(24.9	)
Import		978.6			1,486.3			(507.7	)		(34.2	)		5,449.9			6,397.9			(948.0	)		(14.8	)
Premium luxury		781.4			1,113.5			(332.1	)		(29.8	)		3,645.2			4,272.8			(627.6	)		(14.7	)
Corporate and other		21.6			32.3			(10.7	)		(33.1	)		109.6			112.9			(3.3	)		(2.9	)
Total revenue	$	2,736.9		$	4,139.7		$	(1,402.8	)		(33.9	)	$	14,131.9		$	17,346.5		$	(3,214.6	)		(18.5	)
*Segment income (loss) Domestic	$	13.8		$	36.3		$	(22.5	)		(62.0	)	$	107.1		$	204.5		$	(97.4	)		(47.6	)
Import		20.3			51.5			(31.2	)		(60.6	)		187.9			250.0			(62.1	)		(24.8	)
Premium luxury		38.5			58.7			(20.2	)		(34.4	)		184.2			226.2			(42.0	)		(18.6	)
Corporate and other		(29.8	)		(30.9	)		1.1						(1,861.4	)		(108.3	)		(1,753.1	)
Total segment income (loss)		42.8			115.6			(72.8	)					(1,382.2	)		572.4			(1,954.6	)
Add: Floorplan interest expense		21.4			32.6			(11.2	)					87.4			129.0			(41.6	)
Operating income (loss)	$	64.2		$	148.2		$	(84.0	)				$	(1,294.8	)	$	701.4		$	(1,996.2	)

* Segment income (loss) is defined as operating income net of floorplan interest expense

Retail new vehicle unit sales:
Domestic	14,442	25,744	(11,302	)	(43.9	)	80,153	113,549	(33,396	)	(29.4	)
Import	22,429	36,768	(14,339	)	(39.0	)	135,464	161,232	(25,768	)	(16.0	)
Premium luxury	8,534	13,098	(4,564	)	(34.8	)	40,226	48,068	(7,842	)	(16.3	)
	45,405	75,610	(30,205	)	(39.9	)	255,843	322,849	(67,006	)	(20.8	)

Brand Mix - New Vehicle Retail Units Sold
	Three Months Ended December 31,				Twelve Months Ended December 31,
	2008 (%)		2007 (%)		2008 (%)		2007 (%)
Domestic:
Ford, Lincoln-Mercury		15.5		13.8		14.0		15.1
Chevrolet, Pontiac, Buick, Cadillac, GMC		11.1		13.7		11.9		13.4
Chrysler, Jeep, Dodge		5.2		6.5		5.4		6.7
Domestic total		31.8		34.0		31.3		35.2
Import:
Honda		12.3		12.3		13.5		12.5
Toyota		20.6		19.3		21.0		20.0
Nissan		9.5		11.2		11.9		11.5
Other imports		7.0		5.9		6.5		5.9
Import total		49.4		48.7		52.9		49.9
Premium Luxury:
Mercedes		8.2		8.0		6.9		6.5
BMW		5.7		4.4		4.7		4.1
Lexus		3.0		3.4		2.7		2.9
Other premium luxury (Land Rover, Porsche)		1.9		1.5		1.5		1.4
Premium Luxury total		18.8		17.3		15.8		14.9
		100.0		100.0		100.0		100.0

AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA, Continued
($ in millions, except per share data)

Capital Expenditures / Stock and Debt Repurchases	Three Months Ended December 31,				Twelve Months Ended December 31,
	2008		2007		2008		2007
Capital expenditures	$	20.2	$	31.1	$	117.4	$	159.7
Acquisitions	$	2.8	$	2.5	$	32.2	$	6.7
Proceeds from exercises of stock options	$	—	$	4.7	$	1.0	$	96.6
Senior note repurchases (aggregate principal)	$	144.8	$	—	$	232.9	$	—
Stock repurchases:
Aggregate purchase price	$	—	$	64.9	$	54.1	$	645.7
Shares repurchased (in millions)		—		4.0		3.8		33.2

Floorplan Assistance and Expense	Three Months Ended December 31,									Twelve Months Ended December 31,
	2008			2007			Variance			2008			2007			Variance
Floorplan assistance earned (included in cost of sales)	$	11.9		$	22.2		$	(10.3	)	$	70.0		$	97.2		$	(27.2	)
Floorplan interest expense (new vehicles)		(20.0	)		(32.5	)		12.5			(83.7	)		(128.5	)		44.8
Net inventory carrying cost	$	(8.1	)	$	(10.3	)	$	2.2		$	(13.7	)	$	(31.3	)	$	17.6

Balance Sheet and Other Highlights
	December 31, 2008		December 31, 2007
Cash and cash equivalents	$	111.0	$	33.0
Inventory	$	1,876.0	$	2,258.1
Total floorplan notes payable	$	1,927.9	$	2,123.0
Non-vehicle debt	$	1,258.9	$	1,775.8
Equity	$	2,198.1	$	3,473.5
New days supply (industry standard of selling days, including fleet)	84 days		52 days
Used days supply (trailing 30 days)	30 days		44 days

AUTONATION, INC.
UNAUDITED SUPPLEMENTARY DATA, Continued
($ in millions, except per share data)

Comparable Basis Reconciliations*
	Three Months Ended December 31,
	Net Income (Loss)						Diluted Earnings Per Share
	2008			2007			2008			2007
As reported	$	67.1		$	51.7		$	0.38		$	0.28
Discontinued operations, net of income taxes		3.0			(1.1	)	$	0.02		$	(0.01	)
From continuing operations, as reported		70.1			50.6		$	0.40		$	0.28
Income tax adjustments		(31.9	)		—		$	(0.18	)	$	—
Gain on senior note repurchases		(24.1	)		—		$	(0.14	)	$	—
Property and other impairments		7.6			—		$	0.04		$	—
Adjusted	$	21.7		$	50.6		$	0.12		$	0.28

	Twelve Months Ended December 31,
	Net Income (Loss)						Diluted Earnings Per Share
	2008			2007			2008			2007
As reported	$	(1,243.1	)	$	278.7		$	(6.99	)	$	1.39
Discontinued operations, net of income taxes		17.7			10.0		$	0.10		$	0.05
From continuing operations, as reported		(1,225.4	)		288.7		$	(6.89	)	$	1.44
Impairment of goodwill and franchise rights		1,459.1			—		$	8.21		$	—
Income tax adjustments		(31.9	)		(12.0	)	$	(0.18	)	$	—
Gain on senior note repurchases		(31.5	)		—		$	(0.18	)	$	—
Property and other impairments		7.6			—		$	0.04		$	—
Stock compensation expense adjustment		3.2			—		$	0.02		$	(0.06	)
Adjusted	$	181.1		$	276.7		$	1.02		$	1.38

* Please refer to the “Non-GAAP Financial Measures” section of the Press Release.

AUTONATION, INC.
UNAUDITED SAME STORE DATA
($ in millions, except per vehicle data)

Operating Highlights	Three Months Ended December 31,												Twelve Months Ended December 31,
	2008			2007			$ Variance			% Variance			2008			2007			$ Variance			% Variance
Revenue:
New vehicle	$	1,411.2		$	2,407.6		$	(996.4	)		(41.4	)	$	7,712.0		$	10,012.8		$	(2,300.8	)		(23.0	)
Retail used vehicle		552.3			758.3			(206.0	)		(27.2	)		2,819.1			3,305.2			(486.1	)		(14.7	)
Wholesale		81.1			191.2			(110.1	)		(57.6	)		517.2			832.1			(314.9	)		(37.8	)
Used vehicle		633.4			949.5			(316.1	)		(33.3	)		3,336.3			4,137.3			(801.0	)		(19.4	)
Parts and service		567.7			623.1			(55.4	)		(8.9	)		2,450.5			2,539.7			(89.2	)		(3.5	)
Finance and insurance, net		82.9			139.6			(56.7	)		(40.6	)		479.7			584.3			(104.6	)		(17.9	)
Other		4.0			5.9			(1.9	)		(32.2	)		20.3			24.9			(4.6	)		(18.5	)
Total revenue	$	2,699.2		$	4,125.7		$	(1,426.5	)		(34.6	)	$	13,998.8		$	17,299.0		$	(3,300.2	)		(19.1	)
Gross profit:
New vehicle	$	91.4		$	169.5		$	(78.1	)		(46.1	)	$	507.5		$	708.9		$	(201.4	)		(28.4	)
Retail used vehicle		51.5			73.9			(22.4	)		(30.3	)		284.7			351.0			(66.3	)		(18.9	)
Wholesale		(4.8	)		(2.3	)		(2.5	)					(10.3	)		(1.1	)		(9.2	)
Used vehicle		46.7			71.6			(24.9	)		(34.8	)		274.4			349.9			(75.5	)		(21.6	)
Parts and service		246.3			269.5			(23.2	)		(8.6	)		1,062.8			1,106.4			(43.6	)		(3.9	)
Finance and insurance		82.9			139.6			(56.7	)		(40.6	)		479.7			584.3			(104.6	)		(17.9	)
Other		5.2			6.0			(0.8	)					22.6			25.3			(2.7	)
Total gross profit	$	472.5		$	656.2		$	(183.7	)		(28.0	)	$	2,347.0		$	2,774.8		$	(427.8	)		(15.4	)
Retail vehicle unit sales:
New		45,085			75,562			(30,477	)		(40.3	)		254,739			322,801			(68,062	)		(21.1	)
Used		35,875			45,722			(9,847	)		(21.5	)		180,304			201,134			(20,830	)		(10.4	)
		80,960			121,284			(40,324	)		(33.2	)		435,043			523,935			(88,892	)		(17.0	)
Revenue per vehicle retailed:
New	$	31,301		$	31,863		$	(562	)		(1.8	)	$	30,274		$	31,018		$	(744	)		(2.4	)
Used	$	15,395		$	16,585		$	(1,190	)		(7.2	)	$	15,635		$	16,433		$	(798	)		(4.9	)
Gross profit per vehicle retailed:
New	$	2,027		$	2,243		$	(216	)		(9.6	)	$	1,992		$	2,196		$	(204	)		(9.3	)
Used	$	1,436		$	1,616		$	(180	)		(11.1	)	$	1,579		$	1,745		$	(166	)		(9.5	)
Finance and insurance	$	1,024		$	1,151		$	(127	)		(11.0	)	$	1,103		$	1,115		$	(12	)		(1.1	)

Operating Percentages	Three Months Ended December 31,				Twelve Months Ended December 31,
	2008 (%)		2007 (%)		2008 (%)		2007 (%)
Revenue mix percentages:
New vehicle		52.3		58.4		55.1		57.9
Used vehicle		23.5		23.0		23.8		23.9
Parts and service		21.0		15.1		17.5		14.7
Finance and insurance, net		3.1		3.4		3.4		3.4
Other		0.1		0.1		0.2		0.1
		100.0		100.0		100.0		100.0
Gross profit mix percentages:
New vehicle		19.3		25.8		21.6		25.5
Used vehicle		9.9		10.9		11.7		12.6
Parts and service		52.1		41.1		45.3		39.9
Finance and insurance		17.5		21.3		20.4		21.1
Other		1.2		0.9		1.0		0.9
		100.0		100.0		100.0		100.0
Operating items as a percentage of revenue:
Gross Profit:
New vehicle		6.5		7.0		6.6		7.1
Used vehicle — retail		9.3		9.7		10.1		10.6
Parts and service		43.4		43.3		43.4		43.6
Total		17.5		15.9		16.8		16.0

AUTONATION, INC.
KEY CREDIT AGREEMENT COVENANT COMPLIANCE CALCULATIONS
December 31, 2008

($ millions)
Income Statement information for the last twelve months (January 1, 2008 - December 31, 2008):
Net income (loss) from continuing operations		$	(1,225.4	)
Floorplan and other interest expense			176.8
Income tax provision (benefit)			(197.3	)
Depreciation and amortization			90.8
Stock-based compensation expense (SFAS No. 123R)			21.0
Impairment charges (including goodwill, franchise rights, and long-lived assets)			1,765.7
EBITDA			631.6
Floorplan interest expense			(87.4	)
Adjusted EBITDA		$	544.2
As of December 31, 2008:
Funded indebtedness (primarily comprised of current and long-term debt and letters of credit)			1,331.8
Vehicle secured indebtedness (floorplan payables)			1,927.9
Funded indebtedness including floorplan			3,259.7
Shareholders’ equity			2,198.1
Total capitalization including floorplan		$	5,457.8
Ratio of funded indebtedness/ Adjusted EBITDA			2.45
Covenant	less than		3.00
Ratio of funded indebtedness including floorplan/
Total capitalization including floorplan			59.7	%
Covenant	less than		65.0	%