AutoNation 2008 Annual Report Download

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


(Mark One)




oo






 
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)



(Zip Code)
(Address of principal executive offices)

(Registrant’s Telephone Number, Including Area Code)

 
Common Stock, Par Value $0.01 Per Share New York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange
Act. Yes o No
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check one):
Large accelerated filer Accelerated filer oNon-accelerated filer oSmaller reporting company o
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No
As of June 30, 2008, the aggregate market value of the common stock of the registrant held by non-affiliates was approximately
$1.0 billion based on the closing price of the common stock on the New York Stock Exchange on such date.
As of February 9, 2009, the registrant had 176,853,283 shares of common stock outstanding.

Portions of the registrant’s Proxy Statement relating to its 2009 Annual Meeting of Stockholders are incorporated herein by reference in
Part III.

Table of contents

  • Page 1
    ... (State or other jurisdiction of incorporation or organization) 73-1105145 (I.R.S. Employer Identification No.) 110 S.E. 6TH STREET, FORT LTUDERDTLE, FLORIDT (Address of principal executive offices) 33301 (Zip Code) (954) 769-6000 (Registrant's Telephone Number, Including Area Code) Securities...

  • Page 2
    ... PTRT III Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accounting Fees and Services 20...

  • Page 3
    ... vehicles that we sold in 2008, are manufactured by Toyota, Ford, Honda, Nissan, General Motors, Daimler, BMW, and Chrysler. We offer a diversified range of automotive products and services, including new vehicles, used vehicles, parts and automotive services, and automotive finance and insurance...

  • Page 4
    ... key store personnel by basing a portion of their compensation on the quality of customer service they provide in connection with vehicle sales and service. • Increasing Parts and Service Sales: Our goal is that our customers will use us for all of their vehicle service, maintenance, and collision...

  • Page 5
    ... performed vehicle services and repairs for like-brand vehicles within each of our markets. • Increasing Finance, Insurance, and Other Aftermarket Product Sales: We continue to improve our finance and insurance business by using our standardized processes across our store network. Our customers...

  • Page 6
    ...in our key markets, including "Maroone" in South Florida; "GO" in Denver, Colorado; "AutoWay" in Tampa, Florida; "Bankston" in Dallas, Texas; "Courtesy" in Orlando, Florida; "Desert" in Las Vegas, Nevada; "Team" in Atlanta, Georgia; "Mike Shad" in Jacksonville, Florida; "Dobbs" in Memphis, Tennessee...

  • Page 7
    ... limited to the commissions that we receive. We do not directly finance our customers' vehicle leases or purchases. We also offer our customers various vehicle protection products, including extended service contracts, maintenance programs, guaranteed auto protection (known as "GAP," this protection...

  • Page 8
    ... relating to our management, operation, advertising and marketing, and acquisition and ownership structure of automotive stores franchised by such manufacturers. These agreements contain certain requirements pertaining to our operating performance (with respect to matters such as sales volume, sales...

  • Page 9
    ... right to sell the manufacturer's or distributor's brand of vehicles and offer related parts and service within a specified market area. These franchise agreements grant our stores the right to use the relevant manufacturer's or distributor's trademarks in connection with their operations, and they...

  • Page 10
    ... States customs duties and, in the ordinary course of our business we may, from time to time, be subject to claims for duties, penalties, liquidated damages, or other charges. Environmental, Health, and Safety Laws and Regulations Our operations involve the use, handling, storage, and contracting...

  • Page 11
    ..., convenience, price, contract terms, and the ability to finance vehicle protection and aftermarket products. Insurance and Bonding Our business exposes us to the risk of liabilities arising out of our operations. For example, liabilities may arise out of claims of employees, customers, or other...

  • Page 12
    ... 31, 2008, we employed approximately 20,000 full-time employees, approximately 121 of whom were covered by collective bargaining agreements. We believe that we have good relations with our employees. Seasonality Our operations generally experience higher volumes of vehicle sales and service in the...

  • Page 13
    ... finance company, AutoNation Financial Services, from 1997 through 2001. He is also the former President of BMW Financial Services for North America. SEC Filings and Certifications Our web site is located at www.autonation.com, and our Investor Relations web site is located at corp.autonation...

  • Page 14
    ... adversely impact our sales of used vehicles, parts and automotive repair and maintenance services, and automotive finance and insurance products. Our results of operations and financial condition have been and could continue to be adversely affected by the conditions in the credit markets and the...

  • Page 15
    ... of automotive loans and leases remains limited, we anticipate that our vehicle sales and margins will continue to be adversely impacted. In addition, we obtain a significant amount of financing for our customers through the captive finance companies of automotive manufacturers, including...

  • Page 16
    ... replacement parts, training, product brochures and point of sale materials, and other items for our stores. The core brands of vehicles that we sell are manufactured by Toyota, Ford, Honda, Nissan, General Motors, Daimler, BMW, and Chrysler. In 2008, our Ford, General Motors, and Chrysler stores...

  • Page 17
    ... financial assistance programs, our ability to collect in full or on a timely basis our manufacturer warranty and other receivables, and/or our ability to obtain other goods and services provided by the impacted manufacturer. Our business, results of operations, financial condition, shareholders...

  • Page 18
    ...on our new vehicle and aftermarket product sales, results of operations, and cash flows. Natural disasters and adverse weather events can disrupt our business. Our stores are concentrated in states and regions in the United States, including primarily Florida, Texas, and California, in which actual...

  • Page 19
    ... facilities and operations, is subject to a wide range of federal, state, and local laws and regulations, such as those relating to motor vehicle sales, retail installment sales, leasing, sales of finance, insurance, and vehicle protection products, licensing, consumer protection, consumer privacy...

  • Page 20
    ...own or lease numerous facilities relating to our operations under each of our operating segments. These facilities are located in the following 15 states: Alabama, Arizona, California, Colorado, Florida, Georgia, Illinois, Maryland, Minnesota, Nevada, Ohio, Tennessee, Texas, Virginia, and Washington...

  • Page 21
    unfavorable resolution of one or more of these matters could have a material adverse effect on our business, results of operations, financial condition, cash flow, and prospects. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of our stockholders ...

  • Page 22
    ... "Liquidity and Capital Resources - Restrictions and Covenants" in Part II, Item 7 of this Form 10-K. Issuer Purchases of Equity Securities On October 23, 2007, our Board of Directors approved a share repurchase program (the "Share Repurchase Program"), which authorized AutoNation to repurchase up...

  • Page 23
    As of December 31, 2008, the S&P Specialty Stores Index consisted of Office Depot, Inc., Staples, Inc., and Tiffany & Co., and the Dow Jones U.S. Specialty Retailers Index consisted of the following companies: 99¢ Only Stores Advance Auto Parts, Inc. AutoNation, Inc. AutoZone, Inc. Barnes & Noble,...

  • Page 24
    ...information. See the Notes to Consolidated Financial Statements for discussion of Shareholders' Equity (Note 9), Income Taxes (Note 11), Earnings (Loss) Per Share (Note 12), Discontinued Operations (Note 13), and Acquisitions (Note 15), and the effect on comparability of year-to-year data. See Part...

  • Page 25
    ... manufactured by Toyota, Ford, Honda, Nissan, General Motors, Daimler, BMW, and Chrysler. We offer a diversified range of automotive products and services, including new vehicles, used vehicles, parts and automotive repair and maintenance services, and automotive finance and insurance products. We...

  • Page 26
    ... $200 million on an annualized run-rate basis. Inventory Management Our new and used vehicle inventories are stated at the lower of cost or market in our consolidated balance sheets. We have generally not experienced losses on the sale of new vehicle inventory, in part due to incentives provided by...

  • Page 27
    ... wholesale auctions at a loss. Our used vehicle inventory balance was net of cumulative writedowns of $1.7 million at December 31, 2008, and $2.0 million at December 31, 2007. Parts, accessories, and other inventory are carried at the lower of acquisition cost (first-in, first-out method) or market...

  • Page 28
    ...leases placed with financial institutions in connection with customer vehicle purchases financed and (ii) vehicle protection products sold. We primarily sell these products on a straight commission basis; however we also participate in future underwriting profit on certain extended service contracts...

  • Page 29
    ... and used vehicles, commissions from related finance and insurance products, sales of parts and services, and sales of other products. We recognize revenue in the period in which products are sold or services are provided. We recognize vehicle and finance and insurance revenue when a sales contract...

  • Page 30
    ...vehicle Used vehicle Parts and service Finance and insurance Other $ Total gross profit Selling, general, and administrative expenses Depreciation and amortization Goodwill impairment Franchise rights impairment Other expenses (income), net Operating... 2,920.6 186.0 (0.5) (1,610.0) (144.3) (13.6) ...

  • Page 31
    ... Parts and service Finance and insurance, net Other Total Gross profit mix percentages: New vehicle Used vehicle Parts and service Finance and insurance Other Total Operating items as a percentage of revenue: Gross profit: New vehicle Used vehicle - retail Parts and service Total Selling, general...

  • Page 32
    ... earned (amounts received from manufacturers specifically to support store financing of new vehicle inventory). Floorplan assistance is accounted for as a component of new vehicle gross profit. Years Ended December 31, Variance 2008 ($ in millions) 2007 2008 vs. 2007 2006 Variance 2007 vs. 2006...

  • Page 33
    ...31, Variance Favorable/ 2007 2006 % Variance % Variance ($ in millions, except per vehicle data) 2008 2007 (Unfavorable) (Unfavorable) Revenue: New vehicle Used vehicle Parts and service Finance and insurance, net Other $ 7,712.0 $ 10,012.8 $ (2,300.8) 3,336.3 4,137.3 (801.0) 2,450.5 2,539...

  • Page 34
    ... New vehicle Used vehicle Parts and service Finance and insurance, net Other Total Gross profit mix percentages: New vehicle Used vehicle Parts and service Finance and insurance Other Total Operating items as a percentage of revenue: Gross profit: New vehicle Used vehicle - retail Parts and service...

  • Page 35
    ... conditions, including reduced credit availability offered to consumers, particularly in the second half of 2008, the discontinuation or limitation of certain manufacturer leasing programs, and a decline in consumer confidence. Additionally, volatility in fuel prices impacted consumer preference and...

  • Page 36
    ...inventory days supply is primarily due to lower sales during 2008. The following table details net new vehicle inventory carrying cost, consisting of new vehicle floorplan interest expense net of floorplan assistance earned (amounts received from manufacturers specifically to support store financing...

  • Page 37
    ...the challenging automotive retail environment, including the reduced credit availability offered to consumers, particularly in the second half of 2008, and a decline in consumer confidence. The decrease in used vehicle sales volumes was also driven in part by a decrease in trade-in volume associated...

  • Page 38
    ... environment, particularly in California and Florida. We also saw a decrease in used vehicle sales volumes in our domestic brand stores in our markets, driven in part by a decrease in trade-in volume associated with new vehicle sales. Same store revenue per vehicle retailed during 2007 increased...

  • Page 39
    ... of vehicles manufactured in recent years, as well as changes to certain manufacturers' warranty and prepaid service programs and lower vehicles sales volume. The improvements to customer-paid business are attributable to our service drive process, maintenance menu, and service marketing program, as...

  • Page 40
    ... in third and fourth quartile stores, and on maximizing our preferred lender relationships. Same store finance and insurance revenue and gross profit per vehicle retailed was impacted by a decrease in retrospective commissions received on extended service contracts of $1.4 million in 2007. 38

  • Page 41
    ... by Mercedes, BMW, and Lexus. The franchises in each segment also sell used vehicles, parts and automotive services, and automotive finance and insurance products. "Corporate and other" is comprised of our other businesses, including collision centers, E-commerce activities, and auction operations...

  • Page 42
    ... favorable customer financing from the finance captives of domestic manufacturers, including the discontinuation or limitation of certain lease programs for domestic vehicles, contributed to the decline in sales volume from our Domestic stores. The decline in Domestic parts and service business was...

  • Page 43
    ... due to lower vehicle sales. Import segment income decreased $2.5 million or 1.0% during 2007, as compared to 2006, due to decreased revenues and increased pricing pressure as a result of the competitive retail environment. Premium Luxury The Premium Luxury segment operating results included the...

  • Page 44
    ... of our cost structure due to the decline in vehicles sales, partially offset by our cost savings initiatives discussed in "Market Challenges" above. Selling, general, and administrative expenses decreased in 2008, as compared to 2007, due to a $120.7 million decrease in compensation expense and...

  • Page 45
    ... financing costs related to our debt tender offer was expensed as Other Interest Expense - Senior Note Repurchases in the accompanying Consolidated Income Statements. Gain on Senior Note Repurchases During 2008, we repurchased $105.5 million aggregate principal amount of our floating rate senior...

  • Page 46
    ...purchase price of $1.15 billion pursuant to our equity tender offer, (2) purchase $309.4 million aggregate principal of our 9% senior unsecured notes for an aggregate total consideration of $339.8 million pursuant to our debt tender offer and consent solicitation, and (3) pay related financing costs...

  • Page 47
    ... in the facility fee applicable to our revolving credit facility. Credit ratings could be lowered if new vehicle demand worsens significantly, threatening our earnings and cash flow, or if we increase our financial leverage through acquisitions or share repurchases. The outlook could be revised...

  • Page 48
    ...expected return on competing uses of capital such as dealership acquisitions, capital investments in our current businesses, or repurchases of our debt. In 2008, in light of the economic conditions, our liquidity and capital resource strategies were focused on generating cash and paying down debt to...

  • Page 49
    ..., mortgage facility, and the indenture relating to our senior unsecured notes contain certain financial ratios and other restrictions on our ability to conduct our business" in Part I, Item 1A, of this Form 10-K. In the event of a downgrade in our credit ratings, none of the covenants described...

  • Page 50
    ... business or that we expect to provide us with acceptable rates of return. We project that 2009 full year capital expenditures will be approximately $90 million to $95 million. Excluding acquisition-related spending, land purchased for future sites, and lease buy-outs, and net of related asset sales...

  • Page 51
    ...of tender premium ($24.8 million) and other deferred financing costs ($9.7 million) related to our debt tender offer. As discussed above, in April 2006, we purchased 50 million shares of our common stock at $23 per share for an aggregate purchase price of $1.15 billion pursuant to our equity tender...

  • Page 52
    ... Financial Statements. ** Primarily represents scheduled interest payments on fixed rate senior unsecured notes and mortgage facilities. Estimates of future interest payments for vehicle floorplan payables and other variable rate debt are excluded. *** Amounts for operating lease commitments...

  • Page 53
    ... adverse to us, could materially adversely affect our business, results of operations, financial condition, cash flows, and prospects. • Our operations, including, without limitation, our sales of finance and insurance and vehicle protection products, are subject to extensive governmental laws and...

  • Page 54
    ... are enacted that adversely affect our operations, our business, operating results, and prospects could suffer. • We are subject to interest rate risk in connection with our floorplan payable, revolving credit facility, term loan facility, and floating rate senior unsecured notes that could have...

  • Page 55
    ... FINTNCITL STTTEMENTS Page Reports of Independent Registered Public Accounting Firm Consolidated Balance Sheets as of December 31, 2008 and 2007 Consolidated Income Statements for the Years Ended December 31, 2008, 2007, and 2006 Consolidated Statements of Shareholders' Equity and Comprehensive...

  • Page 56
    ... Organizations of the Treadway Commission (COSO), and our report dated February 16, 2009 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting. /s/ KPMG LLP February 16, 2009 Fort Lauderdale, Florida Certified Public Accountants 54

  • Page 57
    ... States), the consolidated financial statements of the Company as listed in the Index at Item 8, and our report dated February 16, 2009 expressed an unqualified opinion on those consolidated financial statements. /s/ KPMG LLP February 16, 2009 Fort Lauderdale, Florida Certified Public Accountants...

  • Page 58
    ... stock, par value $0.01 per share; 1,500,000,000 shares authorized; 193,562,149 shares issued at December 31, 2008 and 2007, including shares held in treasury Additional paid-in capital Retained earnings (Note 11) Accumulated other comprehensive loss Treasury stock, at cost; 16,708,866 and 13,205...

  • Page 59
    ... COST OF SALES Gross Profit: New vehicle Used vehicle Parts and service Finance and insurance Other TOTAL GROSS PROFIT Selling, general... 2,379.5 1,813.8 90.8 1,610.0 146.5 13.2 40.6 2,920.6 2,057.9 80.0 - - (0.2) Other expenses (income), net OPERATING INCOME (LOSS) Floorplan interest expense Other...

  • Page 60
    ... 31, 2008, 2007, and 2006 (In millions, except share data) Tdditional Paid-In Common Stock Shares Tmount Retained... investments and marketable securities Comprehensive loss Purchases of treasury stock Stock-based compensation expense Exercise of stock options, including income tax benefit of (34...

  • Page 61
    ... provided by operating activities CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES: Purchases of property and equipment Property operating lease buy-outs Proceeds from the sale of property and equipment Proceeds from the disposal of property held for sale Cash used in business acquisitions, net of...

  • Page 62
    ... credit facility Net proceeds of vehicle floor plan - non-trade Proceeds from mortgage facilities Payments of mortgage facilities Payments of notes payable and long-term debt Proceeds from the exercise of stock options Tax benefit from stock options Other Net cash used in continuing operations...

  • Page 63
    ... stores located in major metropolitan markets, predominantly in the Sunbelt region of the United States. We offer a diversified range of automotive products and services, including new vehicles, used vehicles, parts and automotive repair and maintenance services, and automotive finance and insurance...

  • Page 64
    ... Inventory consists primarily of new and used vehicles held for sale, valued at the lower of cost or market using the specific identification method. Cost includes acquisition, reconditioning, dealer installed accessories, and transportation expenses. Parts and accessories are valued at the lower of...

  • Page 65
    ..., service loaner and rental vehicle inventory, net, investments in marketable securities, the cash surrender value of corporate-owned life insurance held in a Rabbi Trust for deferred compensation plan participants, notes receivable, restricted assets, and debt issuance costs. Debt issuance costs...

  • Page 66
    ... in connection with customer vehicle purchases financed and (ii) vehicle protection products sold. We sell and receive a commission, which is recognized upon sale, on the following types of products: extended service contracts, maintenance programs, guaranteed auto protection (known as "GAP," this...

  • Page 67
    ... Under our self-insurance programs, we retain various levels of aggregate loss limits, per claim deductibles, and claims-handling expenses as part of our various insurance programs, including property and casualty, employee medical benefits, automobile, and workers' compensation. Costs in excess of...

  • Page 68
    ... related to the acquired business, accounting for transaction costs, and accounting for adjustments to provisional amounts recorded in connection with acquisitions. SFAS No. 141R retains the fundamental requirement of SFAS No. 141 that the acquisition method of accounting be used for all business...

  • Page 69
    ... represent receivables from financial institutions for the portion of the vehicle sales price financed by our customers. 3. INVENTORY TND VEHICLE FLOORPLTN PTYTBLE The components of inventory at December 31 are as follows: 2008 2007 New vehicles Used vehicles Parts, accessories, and other $1,591...

  • Page 70
    ... by vehicle inventories and related receivables. Our vehicle floorplan facilities, which utilize LIBOR-based interest rates, averaged 3.9% during 2008 and 6.3% during 2007. At December 31, 2008, aggregate capacity under the floorplan credit facilities to finance vehicles was approximately...

  • Page 71
    ... estimates our enterprise value using a net present value model, which discounts projected free cash flows (DCF) of our business at a computed weighted average cost of capital as the discount rate. We also consider a control premium that represents the estimated amount an investor would pay for our...

  • Page 72
    ... amount of goodwill for the year ended December 31, 2008, were as follows: Premium Domestic Import Luxury Corporate and other Consolidated Goodwill at January 1, 2008 Acquisitions and other adjustments through September 30, 2008 Impairment - Single reporting unit Allocations as of September 30...

  • Page 73
    ....2 $87.6 7. NOTES PTYTBLE TND LONG-TERM DEBT Notes payable and long-term debt at December 31 are as follows: 2008 2007 Floating rate senior unsecured notes, due 2013 7% senior unsecured notes, due 2014 Term loan facility, due 2012 Revolving credit facility, due 2012 9% senior unsecured notes, due...

  • Page 74
    ...purchase price of $1.15 billion pursuant to our equity tender offer, (2) purchase $309.4 million aggregate principal of our 9% senior unsecured notes for an aggregate total consideration of $339.8 million pursuant to our debt tender offer and consent solicitation, and (3) pay related financing costs...

  • Page 75
    ... 3-10, AutoNation, Inc. (the parent company) has no independent assets or operations, the guarantees of its ...sale-leaseback transaction involving our corporate headquarters facility that resulted in net proceeds of approximately $52.1 million. This transaction was accounted for as a financing lease...

  • Page 76
    ... Proceedings We are involved, and will continue to be involved, in numerous legal proceedings arising out of the conduct of our business, including litigation with customers, employment related lawsuits, class actions, purported class actions, and actions brought by governmental authorities. We are...

  • Page 77
    ... or subletting of the lease. Additionally, AutoNation and its subsidiaries generally remain subject to the terms of any guarantees made by us in connection with such leases. During 2008, we recorded a pre-tax charge of $1.2 million related to an obligation under a lease for which the sublessee...

  • Page 78
    ... (average purchase price per share of $14.37). As of December 31, 2008, $142.7 million remained available for share repurchases under the existing repurchase program approved by our Board of Directors. Future share repurchases are subject to limitations contained in the indenture relating to our...

  • Page 79
    ... compensation cost for awards granted subsequent to our adoption on January 1, 2006, of SFAS No. 123 (revised 2004), Shared-Based Payment, must be recognized over the shorter of the stated vesting period or the period until employees become retirement-eligible. During the second quarter of 2008...

  • Page 80
    .... Compensation cost is recognized over the requisite vesting period based on the closing price of our common stock on the date of grant. The following table summarizes information about vested and unvested restricted stock for 2008: Restricted Stock Weighted-Tverage Grant Date Fair Value Shares (In...

  • Page 81
    ... expense attribution method. As of December 31, 2008, there was $15.8 million of total unrecognized compensation cost related to non-vested stock-based compensation arrangements, of which $14.3 million relates to stock options and $1.5 million relates to restricted stock. These amounts are expected...

  • Page 82
    ... - (Continued) A reconciliation of the income tax provision (benefit) calculated using the statutory federal income tax rate to our income tax provision (benefit) from continuing operations for the years ended December 31 is as follows: 2008 % 2007 % 2006 % Provision for income taxes at...

  • Page 83
    ... acquisitions accounted for under the purchase method of accounting. During 2008, our unrecognized tax benefits were reduced by approximately $35 million (net of tax effect) as a result of the expiration of a statute of limitations in October 2008. During 2007, we recognized $12.0 million related...

  • Page 84
    ... related to stores that were sold or terminated, that we have entered into an agreement to sell or terminate, or for which we otherwise deem a proposed sales transaction or termination to be probable, with no material changes expected. Generally, the sale of a store is completed within 60 to 90 days...

  • Page 85
    ... received from business divestitures is net of vehicle floorplan payable assumed by the buyer. 14. OTHER COMPREHENSIVE INCOME (LOSS) The changes in the components of other comprehensive income (loss), net of income taxes, are as follows for the years ended December 31: 2008 Pre-Tax Tmount Tax...

  • Page 86
    ... offer. As part of the tender offer, we purchased 807,183 shares of our common stock that were beneficially owned by Michael E. Maroone, our President and Chief Operating Officer and one of our directors, and 20,353,844 shares from ESL Investments, Inc., and its investment affiliates. At the time...

  • Page 87
    .... The letter agreements with American Honda Motor Co., Inc. ("Honda") and Toyota Motor Sales, U.S.A., Inc. ("Toyota") also contain governance-related and other provisions as described below. Also a party to both the Honda and Toyota Agreements is ESL, our largest shareholder. As of February 6, 2009...

  • Page 88
    .... Additionally, tight credit conditions limited the ability of some of our customers to purchase vehicles, as well as finance and insurance products. We own and operate franchised automotive stores in the United States pursuant to franchise agreements with vehicle manufacturers. In 2008 and 2007...

  • Page 89
    ... of credit risk. 20. CHTRGEBTCK RESERVES We may be charged back for commissions related to financing, insurance, or vehicle protection products in the event of early termination of the contracts by customers ("chargebacks"). These commissions are recorded at the time of the sale of the vehicles...

  • Page 90
    ...by Toyota, Honda, and Nissan. Our Premium Luxury segment is comprised of retail automotive franchises that sell new vehicles manufactured primarily by Mercedes, BMW, and Lexus. The franchises in each segment also sell used vehicles, parts and automotive services, and automotive finance and insurance...

  • Page 91
    ...businesses, including collision centers, E-commerce activities, and auction operations, each of which generates revenues, as well as unallocated corporate overhead expenses. Reportable... December 31, 2008 2007 2006 Segment income (loss)*: Domestic Import Premium Luxury Corporate and other Total...

  • Page 92
    ... in Corporate and other. 22. QUTRTERLY INFORMTTION (UNTUDITED) Our operations generally experience higher volumes of vehicle sales and service in the second and third quarters of each year in part due to consumer buying trends and the introduction of new vehicle models. Also, demand for cars and...

  • Page 93
    ... rights. See Note 5 of the Notes to Consolidated Financial Statements for more information. (2) Quarterly basic and diluted earnings (loss) per share from continuing operations may not equal total earnings per share for the year as reported in the Consolidated Income Statements due to the effect of...

  • Page 94
    ...a shared services center certain key accounting processes (non-inventory accounts payable, bank account reconciliations and certain accounts receivable). We have substantially implemented the core phase in 224 of our 232 stores as of December 31, 2008. Management's Tnnual Report on Internal Control...

  • Page 95
    ...item is incorporated by reference to AutoNation's Proxy Statement for its 2009 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2008. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The information required by this item is...

  • Page 96
    ...) Executive Vice President and Chief Financial Officer (Principal Financial Officer) Vice President - Corporate Controller (Principal Accounting Officer) Director February 16, 2009 /s/ Michael J. Short Michael J. Short /s/ Michael J. Stephan Michael J. Stephan /s/ Rick L. Burdick Rick L. Burdick...

  • Page 97
    ... dated March 26, 2008, to the Amended Credit Agreement. Registration Rights Agreement dated April 12, 2006, between AutoNation, the Guarantors named therein and the Initial Purchasers named therein, relating to the $300.0 million aggregate principal amount of floating rate senior unsecured notes due...

  • Page 98
    ... Michael J. Short, Executive Vice President and Chief Financial Officer. Letter Agreement, dated March 6, 2006, regarding agreement by ESL Investments, Inc. and certain affiliated entities to tender all of their AutoNation shares in AutoNation's cash tender offer to purchase up to 50 million shares...

  • Page 99
    ... of ESL Investments, Inc. KPMG LLP Preferability Letter dated July 24, 2008. Subsidiaries of AutoNation, Inc. Consent of KPMG LLP. Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Exchange Act. Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) of the...

  • Page 100
    Exhibit 10.6 AUTONATION, INC. DEFERRED COMPENSATION PLAN AMENDED AND RESTATED, EFFECTIVE JANUARY 1, 2009

  • Page 101
    AutoNation, Inc. Deferred Compensation Plan Article I Establishment and Purpose Article II Definitions Article III Eligibility and Participation 1 1 7 Article IV Deferrals 8 Article V Company Contributions Article VI Benefits Article VII Modifications to Payment Schedules Article VIII ...

  • Page 102
    ..., with respect to any Account, the total payment obligation owed to a Participant from such Account as of the most recent Valuation Date. 2.3 Affiliate. Affiliate means a corporation, trade or business that, together with the Company, is treated as a single employer under Code Section 414(b) or...

  • Page 103
    ... terms of a domestic relations order as described in Code Section 414(p)(1)(B). 2.5 Business Day . A Business Day is each day on which the New York Stock Exchange is open for business. 2.6 Cause. Separation from Service for "Cause" means: (a) Participant's conviction for commission of a felony or...

  • Page 104
    ... to such acquisition or acquisitions, taking into account all such assets acquired during the 12-month period ending on the date of the most recent acquisition. An event constitutes a Change in Control with respect to a Participant only if the Participant performs services for the Employer that has...

  • Page 105
    ..., or (ii) receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Participant's employer. The Committee shall determine whether a Participant is Disabled in accordance with Code Section 409A provided, however, that...

  • Page 106
    ... and subsequent guidance. 2.29 Plan. Generally, the term Plan means the "AutoNation, Inc. Deferred Compensation Plan" as documented herein and as may be amended from time to time hereafter. However, to the extent permitted or required under Code Section 409A, the term Plan may in the appropriate...

  • Page 107
    ... as an "In-Service Account". 2.33 Specified Date Benefit . Specified Date Benefit means the benefit payable to a Participant under the Plan in accordance with Section 6.1(b). 2.34 Specified Employee . Unless otherwise specified by the Committee in accordance with Code Section 409A, Specified...

  • Page 108
    ... a Specified Date Account, all Deferrals and Company Contributions shall be allocated to a Termination Account on behalf of the Participant. 2.39 Termination Benefit. Termination Benefit means the benefit payable to a Participant under the Plan following the Separation from Service of the...

  • Page 109
    ... Deferral Agreement the Payment Schedule applicable to his or her Plan Accounts. If the form of payment is not specified in a Compensation Deferral Agreement, the form of payment shall be the form of payment specified in Section 6.2. (b) 4.2 Timing Requirements for Compensation Deferral Agreements...

  • Page 110
    ... in which the sale occurs. The Compensation Deferral Agreement must be filed before the last day of the year preceding the year in which the sales commissions are earned and becomes irrevocable after that date. (e) Certain Forfeitable Rights. With respect to a legally binding right to a payment in...

  • Page 111
    AutoNation, Inc. Deferred Compensation Plan (f) (g) Company Awards. The Company may unilaterally provide for deferrals of Company awards prior to the date of such awards. Deferrals of severance pay may be negotiated with a Participant prior to the date the Participant has a legally binding right to...

  • Page 112
    AutoNation, Inc. Deferred Compensation Plan 5.2 Vesting. Company Contributions described in Section 5.1, above, and the Earnings thereon, shall vest in accordance with the vesting schedule(s) established by the Committee at the time that the Company Contribution is made. All Company Contributions ...

  • Page 113
    AutoNation, Inc. Deferred Compensation Plan Account was established. Payment of the Specified Date Benefit will be made or begin the first day of the month following the designated month. (c) Disability Benefit. Upon a determination by the Committee that a Participant is Disabled, he or she shall ...

  • Page 114
    ... Specified Date Accounts (including those in pay status) will be paid in a lump sum. (c) Disability Benefit. A Participant who is entitled to receive a Disability Benefit shall receive payment of such benefit according to the Payment Schedule in effect for the Termination Benefit at the time the...

  • Page 115
    ... Compensation Plan (within the meaning of Code Section 414(p)(1)(B)) directing that all or a portion of a Participant's Accounts be paid to an "alternate payee," any amounts to be paid to the alternate payee(s) shall be paid in a single lump sum. Article VII Modifications to Payment Schedules...

  • Page 116
    ... in connection with the Plan. Claims for benefits shall be filed with the Committee and resolved in accordance with the claims procedures in Article XII. 9.2 Withholding. The Employer shall have the right to withhold from any payment due under the Plan (or with respect to any amounts credited to...

  • Page 117
    ... Company, by action taken by its Board of Directors, may terminate the Plan and pay Participants and Beneficiaries their Account Balances in a single lump sum at any time, to the extent and in accordance with Treas. Reg. Section 1.409A-3(j)(4)(ix). Article XI Informal Funding 11.1 General Assets...

  • Page 118
    ...pay benefits under the Plan. Payments under the Plan may be paid from the general assets of the Company or from the assets of any such rabbi trust. Payment from any such source shall reduce the obligation owed to the Participant or Beneficiary under the Plan. Article XII Claims 12.1 Filing a Claim...

  • Page 119
    ... indicate the special circumstances requiring the extension of time and the date by which the Appeals Committee expects to render the determination on review. The review will take into account comments, documents, records and other information submitted by the Claimant relating to the claim without...

  • Page 120
    ...the required statement under Section 2560.503-1(j)(5)(iii) of the Department of Labor regulations. 12.3 Legal Action . A Claimant may not bring any legal action, including commencement of any arbitration, relating to a claim for benefits under the Plan unless and until the Claimant has followed the...

  • Page 121
    ... in serving as an arbitrator in disputes between employers and employees, which list shall be provided by the main office of either JAMS, the American Arbitration Associate ("AAA") or the Federal Mediation and Conciliation Service. If, within three Business Days of the parties' receipt of such list...

  • Page 122
    AutoNation, Inc. Deferred Compensation Plan In any arbitration hereunder, the Company shall pay all administrative fees of the arbitration and all fees of the arbitrator, except that the Participant or Beneficiary may, if he/she/it wishes, pay up to one-half of those amounts. Each party shall pay ...

  • Page 123
    ... in this Plan does not give any person any right to be retained in the service of the Company or an Employer. The right and power of the Company or an Employer to dismiss or discharge an Employee is expressly reserved. The Company and Committee make no representations or warranties as to...

  • Page 124
    ...: MANAGER, RETIREMENT PLANS 110 SE 6TH STREET, 23RD FLOOR FT. LAUDERDALE, FL 33301 Any notice or filing required or permitted to be given to a Participant under this Plan shall be sufficient if in writing or hand-delivered, or sent by mail to the last known address of the Participant. 13.6 Headings...

  • Page 125
    AutoNation, Inc. Deferred Compensation Plan 13.10 Governing Law . To the extent not preempted by ERISA, the laws of the State of Florida shall govern the construction and administration of the Plan. IN WITNESS WHEREOF, the Xndersigned execXted this Plan as of the 24th day of November, 2008, to be ...

  • Page 126
    ...A. The Company has established the AutoNation, Inc. 2008 Employee Equity and Incentive Plan (the tPlan"), a copy of which is attached as Exhibit A hereto, in order to provide incentive to valued employees of the Company; and B. The Executive Compensation Subcommittee of the Board of Directors of the...

  • Page 127
    ... brought in any State or federal court located in Broward County, Florida. Optionee affirms that he or she has sufficient contact with Florida such that Optionee would reasonably anticipate being hailed into said courts in Florida regarding this Agreement or any other contract or issues arising...

  • Page 128
    ... prepaid) or guaranteed overnight delivery, to the following address (or to such other addresses or telecopy numbers which the Company shall designate in writing to Optionee from time to time): AutoNation, Inc. 110 S.E. 6th Street Fort Lauderdale, Florida 33301 Attention: Compensation and Equity...

  • Page 129
    IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date first above written. By: AUTONATION, INC. OPTIONEE: By accepting the Option on the BOL System, Optionee agrees to be bound by the terms of this Stock Option Agreement and agrees ...

  • Page 130
    ...of a merger, consolidation, reorganization, business combination, sale, exchange or other disposition of Voting Securities or other transaction, the corporation or other entity by which Optionee is employed ceases to be a Subsidiary or Affiliate of the Company and, immediately after such transaction...

  • Page 131
    ...A. The Company has established the AutoNation, Inc. 2008 Employee Equity and Incentive Plan (the tPlan"), a copy of which is attached as Exhibit A hereto, in order to provide incentive to valued employees of the Company; and B. The Executive Compensation Subcommittee of the Board of Directors of the...

  • Page 132
    .... The Company shall withhold an amount equal to the federal, state and/or local taxes due at the time the Grantee has taxable income in respect of the Shares (or, if the Grantee makes an election under Section 83(b) of the Internal Revenue Code of 1986, as amended (the tCode") in connection with the...

  • Page 133
    ... brought in any State or federal court located in Broward County, Florida. The Grantee affirms that he or she has sufficient contact with Florida such that Grantee would reasonably anticipate being hailed into said courts in Florida regarding this Agreement or any other contract or issues arising...

  • Page 134
    ... prepaid) or guaranteed overnight delivery, to the following address (or to such other addresses or telecopy numbers which the Company shall designate in writing to the Grantee from time to time): AutoNation, Inc. 110 S.E. 6th Street Fort Lauderdale, Florida 33301 Attention: Compensation and Equity...

  • Page 135
    ...this Agreement effective as of the date first above written. By: AUTONATION, INC. GRANTEE: By accepting the Award on the BOL System, Grantee agrees to be bound by the terms of this Restricted Stock Agreement and agrees that the Shares are subject to the terms and conditions set forth herein. Name...

  • Page 136
    ... of a merger, consolidation, reorganization, business combination, sale, exchange or other disposition of Voting Securities or other transaction, the corporation or other entity by which Grantee is employed ceases to be a Subsidiary or Affiliate of the Company and, immediately after such transaction...

  • Page 137
    ... A. The Company has established the AutoNation, Inc. 2008 Employee Equity and Incentive Plan (the tPlan"), a copy of which is attached as Exhibit A hereto, in order to provide incentive to valued employees of the Company; and B. The Executive Compensation Subcommittee of the Board of Directors (the...

  • Page 138
    ... of the issued and outstanding stock of the Company nor (B) ESL having the power (whether as a result of stock ownership, revocable or irrevocable proxies, contract or otherwise) or ability to elect or cause the election of directors consisting at the time of such election of a majority of the Board...

  • Page 139
    ... prepaid) or guaranteed overnight delivery, to the following address (or to such other addresses or telecopy numbers which the Company shall designate in writing to Optionee from time to time): AutoNation, Inc. 110 S.E. 6th Street Fort Lauderdale, Florida 33301 Attention: Compensation and Equity...

  • Page 140
    withiaicopyito : AutoNation, Inc. 110 S.E. 6th Street Fort Lauderdale, Florida 33301 Attention: General Counsel Telecopy: (954) 769-6340 (no copy required for notice of Option exercise) 11. Binding Effect. This Agreement shall not constitute a binding obligation of the Company or the Optionee ...

  • Page 141
    IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date first above written. By: AUTONATION, INC. OPTIONEE: By accepting the Option on the BOL System, Optionee agrees to be bound by the terms of this Stock Option Agreement and agrees ...

  • Page 142
    ... of a corporation or other entity that acquires such assets or engages in such trade or business. Notwithstanding the foregoing, a Change in Ownership shall not include a Change in Control (as defined in the Plan) of the Company. "Consents" shall mean the Honda Consent and the Toyota Consent...

  • Page 143
    ...on a national securities exchange. "Subsidiary" shall have the meaning given to it in Section 424(f) of the Internal Revenue Code of 1986, as amended. "Toyota Consent" shall mean that certain letter agreement, dated as of January 28, 2009, among Toyota Motor Sales, U.S.A., Inc., the Company and ESL...

  • Page 144
    ... A. The Company has established the AutoNation, Inc. 2008 Employee Equity and Incentive Plan (the tPlan"), a copy of which is attached as Exhibit A hereto, in order to provide incentive to valued employees of the Company; and B. The Executive Compensation Subcommittee of the Board of Directors (the...

  • Page 145
    ... the power (whether as a result of stock ownership, revocable or irrevocable proxies, contract or otherwise) or ability to elect or cause the election of directors consisting at the time of such election of a majority of the Board, shall constitute a Change in Control with respect to the Shares...

  • Page 146
    ...to be an employee of the Company or any Subsidiary or Affiliate of the Company following a Change in Ownership or SpinOff of the Subsidiary, Affiliate or business unit by which Grantee is employed (whether because of the termination of employment of Grantee or because the corporation or other entity...

  • Page 147
    ... prepaid) or guaranteed overnight delivery, to the following address (or to such other addresses or telecopy numbers which the Company shall designate in writing to the Grantee from time to time): AutoNation, Inc. 110 S.E. 6th Street Fort Lauderdale, Florida 33301 Attention: Compensation and Equity...

  • Page 148
    ... pursuant to the Plan, the provision of the Plan shall govern and be controlling. For the purpose of clarification, Paragraphs 10 and 11 hereof shall govern notwithstanding any contrary provisions of the Plan. 19. Integration. Except for the provisions relating to restricted stock contained...

  • Page 149
    ... Agreement effective as of the date first above written. By: AUTONATION, INC. GRANTEE: By accepting the Award on the BOL System, Grantee agrees to be bound by the terms of this Restricted Stock Agreement and agrees that the Shares are subject to the terms and conditions set forth herein. Name...

  • Page 150
    ... of a corporation or other entity that acquires such assets or engages in such trade or business. Notwithstanding the foregoing, a Change in Ownership shall not include a Change in Control (as defined in the Plan) of the Company. "Consents" shall mean the Honda Consent and the Toyota Consent...

  • Page 151
    ...on a national securities exchange. "Subsidiary" shall have the meaning given to it in Section 424(f) of the Internal Revenue Code of 1986, as amended. "Toyota Consent" shall mean that certain letter agreement, dated as of January 28, 2009, among Toyota Motor Sales, U.S.A., Inc., the Company and ESL...

  • Page 152
    ... View California Delaware Dobbs Honda on Mendenhall Maroone Cadillac; Maroone Collision Center - Palm Beach Power Chevrolet-Arrowhead Delaware Delaware Delaware Delaware Bankston Collision Center Delaware Delaware Delaware Champion Chevrolet Cadillac; Champion Pontiac, Buick, GMC Nevada Tennessee...

  • Page 153
    State of Legal Entity Current DBA in use Organization AN LuCury Imports of Palm Beach, Inc. Mercedes-Benz of Delray Mercedes-Benz of Pembroke Pines BMW Encinitas Mercedes-Benz of Sarasota BMW Tucson BMW of Dallas; MINI of Dallas Bankston Chevrolet Maroone Volkswagen Ford of North Scottsdale ...

  • Page 154
    AutoNation Fort Worth Motors, Ltd. AutoNation GM GP, LLC AutoNation Holding Corp. AutoNation Imports of Katy GP, LLC Bankston Chevrolet Fort Worth TeCas Delaware Delaware Delaware 2

  • Page 155
    ... Maroone Volvo Auto USA; AutoNationDirect Bankston Chrysler Jeep Dodge of Frisco Bankston Ford of Frisco Bankston Nissan Irving Bankston Nissan Lewisville LeCus of Cerritos Delaware Delaware Vermont Delaware TeCas TeCas Delaware TeCas TeCas Delaware TeCas California Colorado Arizona California...

  • Page 156
    Carwell Holding, LLC Carwell, LLC Cerritos Body Works Holding, LLC Land Rover South Bay; Mercedes-Benz of South Bay Delaware Delaware Delaware 3

  • Page 157
    ...Power Honda Costa Mesa California Florida Colorado Tennessee Delaware Dobbs Honda on Covington Pike BMW of Houston North; BMW of Houston North in The Woodlands; MINI of the Woodlands Champion Acura Gulf Freeway AutoWay Honda TeCas TeCas Florida Illinois Nevada TeCas D/L Motor Company Deal Dodge...

  • Page 158
    Dobbs Ford, Inc. Dobbs Mobile Bay, Inc. Dobbs Motors of Arizona, Inc. Dobbs Ford Treadwell Ford Dobbs Honda 4 Florida Alabama Arizona

  • Page 159
    ... Import Sales & Service, LLC California Delaware Georgia Washington FoC Chevrolet FoC Mitsubishi FoC Buick-Pontiac-GMC Delaware Delaware Delaware Delaware Delaware Florida Delaware Delaware Delaware Delaware Maroone Nissan of Ft. Lauderdale Power Volvo South Bay Gene Evans Team Ford Team Nissan...

  • Page 160
    Government Boulevard Motors, Inc. Gulf Management, Inc. Hayward Dodge, Inc. Treadwell Honda LeCus of Clearwater; LeCus of Tampa Bay Alabama Florida Delaware 5

  • Page 161
    ... California Delaware California John Lance Ford GO Honda; Go Hyundai, Mazda Go Toyota Scion Arapahoe Desert Audi; Desert BMW of Henderson; Desert BMW of Las Vegas; Desert MINI of Las Vegas; Desert Volkswagen Nevada Colorado Florida Mike Shad Ford at the Avenues Mercedes-Benz of Miami Maroone Nissan...

  • Page 162
    MacHoward Leasing MacHoward Leasing Holding, LLC MacPherson Enterprises, Inc. Power Chevrolet Irvine California Delaware California 6

  • Page 163
    ...Shad Chrysler Jeep at Cassat Mike Shad Ford Lincoln Mercury Miller-Sutherlin Automotive Power Toyota Cerritos MullinaC Ford East MullinaC Ford North Canton Maroone Ford of Margate MullinaC Used Cars Mercedes-Benz of Naperville Newport Auto Center Bankston Ford of South Fort Worth AutoWay Nissan of...

  • Page 164
    Peyton Cramer Jaguar Peyton Cramer Lincoln-Mercury Peyton Cramer LM Holding, LLC Jaguar South Bay California California Delaware 7

  • Page 165
    ...; Power Subaru Plains Chevrolet Arizona Delaware Delaware Delaware Delaware Delaware Delaware TeCas Nevada TeCas PMWQ, Ltd. Port City Imports, Inc. Champion Honda Prime Auto Auction Quality Nissan AutoWay Nissan of Clearwater TeCas California Delaware TeCas Florida Colorado Colorado Colorado...

  • Page 166
    RIVT Management, Inc. RKR Motors, Inc. Rosecrans Investments, LLC Roseville Motor Corporation Mercedes-Benz of Pompano AutoWest Chrysler Jeep Dodge 8 Delaware Florida Delaware California

  • Page 167
    ... Honda; Desert Value and Truck Center; Desert Auto Body East Nevada Nevada Delaware Florida Maryland Delaware Delaware California Colorado Delaware California Delaware Smythe European; Smythe Volvo; Park Avenue Motors Go Dodge Southwest Mercedes-Benz of Fort Lauderdale California Delaware Florida...

  • Page 168
    TeCan Lincoln-Mercury, Inc. TeCan Sales GP, LLC TeCas Management Companies LP, LLC The Consulting Source, Inc. 9 Delaware Delaware Delaware Florida

  • Page 169
    ... Delaware Power Honda Valencia FoC Chevrolet of Timonium AutoWest Mazda Subaru; Roseville BMW Delaware Delaware Delaware California California Libertyville Toyota Power Chevrolet Valencia Bankston Nissan Dallas Maroone Ford of Delray Maroone Lincoln-Mercury of North Palm Beach Maroone Nissan of...

  • Page 170
    ...2008, and all related financial statement schedules, and the effectiveness of internal control over financial reeorting as of December 31, 2008, which reeorts aeeear in the December 31, 2008 annual... and 333-07623). /s/ KPMN LLP February 16, 2009 Fort Lauderdale, Florida Certified Public dccountants

  • Page 171
    ... and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. /s/ Michael J. Jackson Michael J. Jackson Chairman and Chief Executive Officer Date...

  • Page 172
    ...report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. /s/ Michael J. Short Michael J. Short Executive Vice President and Chief Financial Officer...

  • Page 173
    ... ACT OF 2002 In connection with the Annual Report on Form 10-K of AutoNation, Inc. (the "Company") for the year ended December 31, 2008, as filed with the Securities and Exchange Commission (the "Report"), I, Michael J. JacKson, Chief Executive Officer of the Company, hereby certify, pursuant to...

  • Page 174
    ... OF 2002 In connection with the Annual Report on Form 10-K of AutoNation, Inc. (the "Company") for the year ended December 31, 2008, as filed with the Securities and Exchange Commission (the "Report"), I, Michael J. Short, ExecutiKe Vice President and Chief Financial Officer of the Company, hereby...