AutoNation Reports 2009 First Quarter Results of Operations

FORT LAUDERDALE, Fla., April 23, 2009: AutoNation, Inc. , America's largest automotive retailer, today reported 2009 first quarter net income from continuing operations of $49 million or $0.27 per share, compared to year-ago net income from continuing operations of $56 million or $0.31 per share. In the quarter, the Company had a net benefit from certain items of $9 million after-tax or $0.04 per share, including a gain on the purchase of the Company's senior notes and a net gain on asset sales and dispositions, partially offset by property impairments. After adjusting for these items as disclosed in the attached financial tables, net income from continuing operations for the 2009 first quarter was $40 million or $0.23 per share.

First quarter 2009 revenue totaled $2.5 billion, compared to $3.8 billion in the year-ago period, driven primarily by lower vehicle sales. In the first quarter, industry new vehicle U.S. retail sales declined approximately 46%, according to CNW Research. AutoNation new vehicle unit sales declined 43%.

Commenting on the first quarter, Mike Jackson, Chairman and Chief Executive Officer, said, "We are very pleased with the performance of AutoNation as we remained solidly profitable during the first quarter even with a U.S. SAAR near 9 million new vehicle units, the lowest in nearly 30 years. Our operating discipline, the hard work of our associates and savings generated from our $200 million cost reduction program led to sequential improvement from the fourth quarter 2008."

AutoNation has 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.

  --  Domestic - Domestic segment income for the first quarter of 2009 was
      $15 million compared to year-ago segment income of $38 million.  First
      quarter Domestic retail new vehicle unit sales declined 47%.

  --  Import - Import segment income for the first quarter of 2009 was $30
      million compared to year-ago segment income of $56 million.  First
      quarter Import retail new vehicle unit sales declined 45%.

  --  Premium Luxury - Premium Luxury segment income for the first quarter
      of 2009 was $41 million compared to year-ago segment income of $51
      million. First quarter Premium Luxury retail new vehicle unit sales
      declined 31%.

Jackson added, "During the first quarter AutoNation reduced debt by approximately $500 million, for a cumulative debt reduction of approximately $1.25 billion, including $635 million of non-vehicle debt, since January 1, 2008. As a result of these actions and our financial performance we remained in compliance with all of the financial covenants in our debt agreements and improved our leverage ratio to 2.35 as of March 31, 2009. Our liquidity remains strong as we ended the quarter with approximately $400 million of cash and revolver availability." Looking forward, Jackson also stated, "Although first quarter industry sales were lower than expectations, we agree with industry projections that sales rates will improve in the second half of this year."

The first quarter conference call may be accessed at 11:00 a.m. Eastern Time by phone at 888-769-8515 (pass code: AutoNation). The webcast may be accessed by the Internet (audio webcast) at AUTONATION "Investors Relations" and then "Webcasts." On the "Webcasts" page, there will be a link for the first quarter webcast. A playback of the event will be available after 1:00 pm Eastern Time April 23, 2009 through April 30, 2009 by calling 866-375-1051 (pass code: 75300).