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This excerpt taken from the AN 10-K filed Feb 17, 2010. Other Matters AutoNation, acting through its subsidiaries, is the lessee under many real estate leases that provide for the use by our subsidiaries of their respective dealership premises. Pursuant to these leases, our subsidiaries generally agree to indemnify the lessor and other related parties from certain liabilities arising as a result of the use of the leased premises, including environmental liabilities, or a breach of the lease by the lessee. Additionally, from time to time, we enter into agreements with third parties in connection with the sale of assets or businesses in which we agree to indemnify the purchaser or related parties from certain liabilities or costs arising in connection with the assets or business. Also, in the ordinary course of business in connection with purchases or sales of goods and services, we enter into agreements that may contain indemnification provisions. In the event that an indemnification claim is asserted, our liability would be limited by the terms of the applicable agreement. From time to time, primarily in connection with dispositions of automotive stores, our subsidiaries assign or sublet to the dealership purchaser the subsidiaries’ interests in any real property leases associated with such stores. In general, our subsidiaries retain responsibility for the performance of certain obligations under such leases to the extent that the assignee or sublessee does not perform, whether such performance is required prior to or following the assignment 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 did not perform. We generally have indemnification rights against the assignee or sublessee in the event of non-performance under these leases, as well as certain defenses. With the exception of the lease related to the charge noted above, we presently have no reason to believe that we or our subsidiaries will be called on to perform under any such remaining assigned leases or subleases. We estimate that lessee rental payment obligations during the remaining terms of these leases are approximately $77 million at December 31, 2009. Our exposure under these leases is difficult to estimate and there can be no assurance that any performance of AutoNation or its subsidiaries required under these leases would not have a material adverse effect on our business, financial condition, and cash flows. At December 31, 2009, surety bonds, letters of credit, and cash deposits totaled $96.4 million, including $64.7 million of letters of credit. In the ordinary course of business, we are required to post performance and surety bonds, letters of credit, and/or cash deposits as financial guarantees of our performance. We do not currently provide cash collateral for outstanding letters of credit.
72
Table of ContentsAUTONATION, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In the ordinary course of business, we are subject to numerous laws and regulations, including automotive, environmental, health and safety, and other laws and regulations. We do not anticipate that the costs of such compliance will have a material adverse effect on our business, although such outcome is possible given the nature of our operations and the extensive legal and regulatory framework applicable to our business. Further, we expect that new laws and regulations, particularly at the federal level, in the labor and employment, health care, environmental, and consumer protection areas may be enacted, which could also materially adversely impact our business. We do not have any material known environmental commitments or contingencies. This excerpt taken from the AN DEF 14A filed Mar 23, 2009. Other
Matters
We are not aware of any other matters that will be properly
brought before the Annual Meeting. However, if any additional
matters are properly brought before the Annual Meeting,
Messrs. Jackson and Ferrando will vote as recommended by
our Board of Directors or, if no recommendation is given, in
accordance with their judgment. Messrs. Jackson and
Ferrando were designated to be your proxies by our Board of
Directors.
This excerpt taken from the AN 10-K filed Feb 17, 2009. Other
Matters
AutoNation, acting through its subsidiaries, is the lessee under
many real estate leases that provide for the use by our
subsidiaries of their respective dealership premises. Pursuant
to these leases, our subsidiaries generally agree to indemnify
the lessor and other related parties from certain liabilities
arising as a result of the use of the leased premises, including
environmental liabilities, or a breach of the lease by the
lessee. Additionally, from time to time, we enter into
agreements with third parties in connection with the sale of
assets or businesses in which we agree to indemnify the
purchaser or related parties from certain liabilities or costs
arising in connection with the assets or business. Also, in the
ordinary course of business in connection with purchases or
sales of goods and services, we enter into agreements that may
contain indemnification provisions. In the event that an
indemnification claim is asserted, our liability would be
limited by the terms of the applicable agreement.
From time to time, primarily in connection with dispositions of
automotive stores, our subsidiaries assign or sublet to the
dealership purchaser the subsidiaries’ interests in any
real property leases associated with such stores. In general,
our subsidiaries retain responsibility for the performance of
certain obligations under such leases to the extent that the
assignee or sublessee does not perform, whether such performance
is required prior to or following the assignment 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 did not perform. Although
we generally have indemnification rights against the assignee or
sublessee in the event of non-performance under these leases, as
well as certain defenses, and we presently have no reason to
believe that we or our subsidiaries will be called on to perform
under any such remaining assigned leases or subleases, we
estimate that lessee rental payment obligations during the
remaining terms of these leases are approximately
$85 million at December 31, 2008. Our exposure under
these leases is difficult to estimate and there can be no
assurance that any performance of AutoNation or its subsidiaries
required under these leases would not have a material adverse
effect on our business, financial condition, and cash flows.
At December 31, 2008, surety bonds, letters of credit, and
cash deposits totaled $110.2 million, including
$72.4 million of letters of credit. In the ordinary course
of business, we are required to post performance and surety
bonds, letters of credit,
and/or cash
deposits as financial guarantees of our performance. We do not
currently provide cash collateral for outstanding letters of
credit.
In the ordinary course of business, we are subject to numerous
laws and regulations, including automotive, environmental,
health and safety, and other laws and regulations. We do not
anticipate that the costs of such compliance will have a
material adverse effect on our business, consolidated results of
AUTONATION,
INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
operations, cash flows, or financial condition, although such
outcome is possible given the nature of our operations and the
extensive legal and regulatory framework applicable to our
business. We do not have any material known environmental
commitments or contingencies.
A summary of yearly repurchase activity follows:
As discussed in Note 7 of the Notes to Consolidated
Financial Statements, we purchased 50 million shares of our
common stock at $23 per share for an aggregate purchase price of
$1.15 billion pursuant to an equity tender offer in April
2006. After the completion of the equity tender offer, we
repurchased an additional 11.2 million shares of our common
stock for a purchase price of $228.9 million during the
remainder of 2006, for a total of 61.2 million shares
repurchased for an aggregate purchase price of
$1.38 billion in 2006.
Our Board of Directors authorized a $500.0 million share
repurchase program in April 2007, and an additional
$250.0 million share repurchase program in October 2007. We
repurchased 33.2 million shares of our common stock for an
aggregate purchase price of $645.7 million (average
purchase price per share of $19.43) during the year ended
December 31, 2007.
During 2008, we repurchased 3.8 million shares of our
common stock for an aggregate purchase price of
$54.1 million (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 senior unsecured notes.
Our Board of Directors authorized the retirement of
30 million shares in 2007 and 50 million shares in
2006 of our treasury stock, which assumed the status of
authorized but unissued shares. These retirements had the effect
of reducing treasury stock and issued common stock, which
includes treasury stock. Our common stock, additional paid-in
capital, and treasury stock accounts have been adjusted
accordingly. There was no impact to shareholders’ equity or
outstanding common stock.
We have 5.0 million authorized shares of preferred stock,
par value $.01 per share, none of which are issued or
outstanding. The Board of Directors has the authority to issue
the preferred stock in one or more series and to establish the
rights, preferences, and dividends.
Proceeds from the exercise of stock options were
$1.0 million in 2008, $96.6 million in 2007, and
$75.7 million in 2006.
On March 14, 2008, our Board of Directors, upon the
recommendation of its Compensation Committee, approved a new
employee equity and incentive plan (“2008 Plan”),
which was approved by our stockholders at our Annual Meeting of
Stockholders held on May 7, 2008. The 2008 Plan provides
for the grant of stock options, stock appreciation rights,
restricted stock, restricted stock units, and other stock-based
and cash-based awards. A maximum of 12.0 million shares may
be issued under the 2008 Plan, provided that no more than
2.0 million shares may be issued pursuant to the grant of
awards, other than options or stock appreciation rights, that
are settled in shares. Under the 2008 Plan, options and stock
appreciation rights are granted at a
AUTONATION,
INC.
NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
price equal to or above the closing price of our common stock on
the date such awards are granted, or if the date of grant is not
a trading day, on the next trading day.
We may also issue stock options to non-employee directors under
the AutoNation, Inc. 2007 Non-Employee Director Stock Option
Plan (“Non-Employee Director Plan”). The exercise
price of all stock options granted under the Non-Employee
Director Plan is equal to or above the closing price of our
common stock on the trading day immediately prior to the date of
grant.
No additional options may be issued under our other employee
stock option plans (“Prior Plans”), pursuant to which
employee stock options were previously granted prior to the
adoption of the 2008 Plan. Under our Prior Plans, employee stock
options were granted with exercise prices equal to or above the
closing price of our common stock on the trading day immediately
prior to the date of grant.
This excerpt taken from the AN DEF 14A filed Mar 27, 2008. Other
Matters
We are not aware of any other matters that will be properly
brought before the Annual Meeting. However, if any additional
matters are properly brought before the Annual Meeting,
Messrs. Jackson and Ferrando will vote as recommended by
our Board of Directors or, if no recommendation is given, in
accordance with their judgment. The accompanying form of proxy
has been prepared at the direction of our Board of Directors and
is being sent to you at the request of our Board of Directors.
Messrs. Jackson and Ferrando were designated to be your
proxies by our Board of Directors.
This excerpt taken from the AN DEF 14A filed Apr 5, 2007. Other
Matters
We are not aware of any other matters that will be properly
brought before the Annual Meeting. However, if any additional
matters are properly brought before the Annual Meeting,
Messrs. Jackson and Ferrando will vote as recommended by
our Board of Directors or, if no recommendation is given, in
accordance with their judgment. The accompanying form of proxy
has been prepared at the direction of our Board of Directors and
is being sent to you at the request of our Board of Directors.
Messrs. Jackson and Ferrando were designated to be your
proxies by our Board of Directors.
This excerpt taken from the AN DEF 14A filed Apr 28, 2006. Other
Matters
This excerpt taken from the AN DEF 14A filed Mar 31, 2005. Other Matters
We are not aware of any other matters that will be properly
brought before the annual meeting. However, if any additional
matters are properly brought before the annual meeting,
Messrs. Jackson and Ferrando will vote as recommended by
our Board of Directors or, if no recommendation is given, in
accordance with their judgment. The accompanying form of proxy
has been prepared at the direction of our Board of Directors and
is being sent to you at the request of our Board of Directors.
Messrs. Jackson and Ferrando were designated to be your
proxies by our Board of Directors.
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