Discontinuation of Services to Company by yvp10683

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									                                                        Autonation is a leading auto retailer, comprised of almost 300 dealerships throughout the United
                                                        States. Sales of new and used automobiles provide approximately 80% of revenues but the parts &
           AutoNation                    (AN)           services and finance & insurance operations contribute the majority of operating profits. (Prior to Nov
                                                        1995, the company was Republic Waste Industries.)

         ROIe            Price           Yield            Dividend       Reported:       EPS '01         EPS '02        EPS '03        P/E '01        P/E '02      P/E '03    EPS/yr - Last 5...Next 5 (est)
         6-7%            12.64           0.0%               0.00                          0.97            1.19           1.25           13.1           10.6         10.1         24.9%           12.5%

          Q             Pension         Options*         Options**        Adjusted:      EPSa '01       EPSa '02       EPSa '03        P/Ea '01       P/Ea '02    P/Ea '03
         2.45             0.00            4%               4%                              0.93           1.14           1.20            13.6           11.1        10.5

          MV              EV             Discretionary Cash Flow (per share):            FCF '01         FCF '02        FCF '03       P/FCF '01      P/FCF '02    P/FCF '03
         4,234           4,881                                                            1.10            0.78           0.59            11.5           16.2         21.5

                                     Adjusted (for pension and stock options):           FCFa '01       FCFa '02       FCFa '03       P/FCFa '01 P/FCFa '02 P/FCFa '03
                                                                                           1.05           0.75           0.57            12.0       16.9       22.3

                                                        Growth (02 vs 96):
      ROIC - EPS       ROIC - FCF       EV / OP           CF / OP                       Revenue         Op Profit        Pretax Net Income              EPS       # Shares         Debt
        32.8%             n/r             6.7              -0.02                         251.9%         -3239.1%       -1805.6%  -843.1%              -831.1%       1.6%          46.4%

      Op Margin             3.7%             3.6%              2.6%            2.9%           0.2%           3.3%            -0.1%         -0.4%
     Pretax Margin          3.0%             3.1%              2.4%            2.9%           0.2%           3.2%             1.1%         -0.6%
      Net Margin            1.8%             1.9%              1.6%            2.0%           0.1%           2.1%             0.7%         -0.9%
    Leverage Ratio           2.02             2.08              2.21            2.19           1.80           1.55
    Asset Efficiency         2.31             2.41              2.40            2.20           2.01           3.01
   Return on Equity         8.6%             9.6%              8.6%            9.8%           0.4%           9.7%
    Retention Ratio       100.0%           100.0%            100.0%          100.0%         100.0%         100.0%          100.0%        100.0%
    Ret. Ratio (fcf)      100.0%           100.0%            100.0%          100.0%         100.0%         100.0%          100.0%        100.0%

     Dec fiscal yr         2003e              2002              2001           2000            1999           1998           1997           1996

       Revenue             20,285           19,825            19,989         20,599          20,099         16,118           9,178         5,633
       Op. Profit             754              722               521            604              47            535             -12           -23
     Pretax Income            604              614               482            604              35            523             103           -36
      Net Income              375              379               324            420              20            335              65           -51
          EPS                1.67             1.17              0.97           1.16            0.05           0.74            0.16         -0.16
        Dividend             0.00             0.00              0.00           0.00            0.00           0.00            0.00          0.00
         Rev/Sh             64.60            61.19             59.67          57.06           46.74          35.60           22.59         17.67
       # Shares               314              324               335            361             430            453             406           319
         Assets             8,905            8,422             8,065          8,867           9,613          8,412
         Equity             4,482            4,107             3,828          3,843           4,601          5,424
        L-T Debt              862              763               647            850             836            521

      Rev Growth            2.3%             -0.8%             -3.0%          2.5%            24.7%         75.6%           62.9%
      OP Growth             4.4%             38.6%            -13.7%       1185.1%           -91.2%      -4558.3%          -47.8%
       NI Growth           -1.1%             17.0%            -22.9%       2000.0%           -94.0%        415.4%         -227.5%
      EPS Growth           42.8%             20.9%            -16.9%       2401.4%           -93.7%        362.5%         -200.0%

        CF / OP              0.44                0.56            0.83           0.75            0.77           1.54         -28.08         -33.96

      Gross CF***             335                 403             432            451              36            826            337           781
        Cap Ex                150                 150              65              9             154          1,633          1,630         1,445
    Free Cash Flow            185                 253             367            442            -118           -808         -1,293          -664
         FCF                 0.59                0.78            1.10           1.22           -0.27          -1.78          -3.18         -2.08
         FCFa                0.57                0.75            1.05           1.18           -0.26          -4.06          -3.06         -2.00

      Acq / Divest              0                  0               31            135         -1,097           1,221           -393             52
       Net FCF                185                253              336            307            979          -2,029           -900           -716

       Dividends                0                  0                0              0              0               0              0             0
        Net Net               185                253              336            307            979          -2,029           -900         2,501

  Share Repo (Issue)         0           100           257          189        1,158           135                            (553)         (551)
            Nov 01 share-repurchase authorization (11/01) for $500m through 11/04 -- no repo to-date

      Inventories           2,306            2,266             2,179           2,774          2,707           1,850          1,083
          A/R                 716              698               802             958          1,151             966            846
          A/P                 161              159               150             143            163             118            221
    Inventory Turns            8.9              8.9               8.1             7.5            8.8           11.0           16.9
    Days Sales Out.          12.7             13.8              16.1            18.7           19.2            20.5           16.8
    Days Pay. Out.             2.9              2.8               2.7             2.7            2.6             3.8            4.4


  * Impact of stock options -- valued using Black-Scholes model
  ** Impact of options -- valued using proprietary cost-of-grant method
  *** Gross Cash Flow includes changes in operating working capital and adjustments for the tax impact of non-operating charges/credits, and
  excludes benefits from stock-option exercizes
  ****DCF (discretionary cash flow per share) = FCF + discretionary capital expenditures to build new stores
  Note: Income / Gross Cash Flow figures exclude discontinued operations, goodwill amortization/impairment and in-process R&D, but include
  restructuring/writeoff/discontinuation charges and minority-interest cash receipts

  Accountant: Arthur Andersen

Sources: WealthEffect.com; Quicken.com

								
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