<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED, AS OF OCTOBER 7, 1996)
For the fiscal year ended December 31, 1999
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________________ to _____________________
Commission file number 0-9787
------
A. Full title of the plan and address of the plan, if different from that of
the issuer named below:
AUTONATION 401(K) PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
AUTONATION, INC.
110 S.E. 6th St.
Fort Lauderdale, Florida 33301
<PAGE> 2
AUTONATION
401(K) PLAN
FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES
TOGETHER WITH REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
DECEMBER 31, 1999 AND 1998
<PAGE> 3
AUTONATION
401(K) PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
<TABLE>
<CAPTION>
Pages
-----
<S> <C>
Report of Independent Certified Public Accountants................. 1
Statements of Net Assets Available for Benefits as of
December 31, 1999 and 1998....................................... 2
Statement of Changes in Net Assets Available for Benefits for
the Year Ended December 31, 1999................................. 3
Notes to Financial Statements...................................... 4-7
Schedule H, line 4i - Schedule of Assets Held for Investment
Purposes as of December 31, 1999................................. 8
Schedule H, line 4j - Schedule of Reportable Transactions for the
Year Ended December 31, 1999..................................... 9
</TABLE>
<PAGE> 4
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Plan Administrator of
AutoNation 401(k) Plan:
We have audited the accompanying statements of net assets available for benefits
of AutoNation 401(k) Plan as of December 31, 1999 and 1998, and the related
statement of changes in net assets available for benefits for the year ended
December 31, 1999. These financial statements and the schedules referred to
below are the responsibility of the Plan's Administrator. Our responsibility is
to express an opinion on these financial statements and schedules based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1999 and 1998, and the changes in its net assets available for
benefits for the year ended December 31, 1999, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes, loans or fixed income obligations and reportable
transactions are presented for the purpose of additional analysis and are not a
required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedules have been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ ARTHUR ANDERSEN LLP
Arthur Andersen LLP
Fort Lauderdale, Florida,
June 26, 2000.
1
<PAGE> 5
AUTONATION
401(K) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1999 AND 1998
December 31,
---------------------------------
1999 1998
------------ -----------
ASSETS:
Investments (See Note 3) $145,523,720 $86,488,800
Receivables:
Employer contributions 3,451,688 3,888,982
Participant contributions 5,715,986 1,638,910
------------ -----------
Total receivables 9,167,674 5,527,892
------------ -----------
Total assets 154,691,394 92,016,692
------------ -----------
LIABILITIES: -- --
------------ -----------
Net assets available for benefits $154,691,394 $92,016,692
============ ===========
The accompanying notes to financial statements are an integral part
of these statements.
2
<PAGE> 6
AUTONATION
401(K) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
Year Ended
December 31, 1999
-----------------
<S> <C>
Additions:
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of
investments (see Note 3) $ 13,908,226
Dividends 3,333,926
Interest 103,106
-----------
17,345,258
-----------
Contributions:
Participant 55,000,946
Employer 12,346,797
Participant Rollover 2,586,294
-----------
69,934,037
-----------
Total additions 87,279,295
-----------
Deductions:
Deductions from net assets attributed to:
Benefits paid to participants 21,474,623
Loan Repayment from Distributions 289,951
-----------
Total deductions 21,764,574
-----------
Net increase 65,514,721
Transfers from Plan, net (2,840,019)
Net assets available for benefits:
Beginning of year 92,016,692
-----------
End of year $154,691,394
===========
</TABLE>
The accompanying notes to financial statements are an
integral part of this statement.
3
<PAGE> 7
AUTONATION
401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(1) DESCRIPTION OF PLAN:
(a) General
The following description of the AutoNation 401(k) Plan, as amended through
December 31, 1999 (the "Plan"), is provided for general information purposes
only. Participants should refer to the Plan document for a more complete
description of the Plan. Effective November 1, 1999, the Company changed the
name of the Plan from Republic Rewards 401(k) Plan to AutoNation 401(k) Plan.
The Plan was established effective January 1, 1994 to provide benefits to all
eligible employees of AutoNation, Inc. (the "Company", formerly Republic
Industries, Inc.) The Plan is a defined contribution plan with a cash or
deferred arrangement under Section 401(k) of the Internal Revenue Code ("IRC").
The Plan is subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"). The Employee Benefits Committee is the designated
administrator of the Plan.
Although it has expressed no intention to do so, the Company retains the right,
if necessary, to terminate the Plan. In the event of Plan termination, all
amounts credited to participants' accounts become fully vested subject to the
requirements of ERISA. The Company also retains the right to amend the Plan.
Amendments subsequent to December 31, 1999 are reflected within these notes to
the financial statements.
(b) Eligibility
During 1999 and 1998, the Plan required 90 days of employment to be eligible
for participation.
Additionally, enrollment provisions allow for monthly entry dates by all
eligible employees. The Plan also includes a provision to allow employees of
certain subsidiaries of the Company to be eligible for participation in the Plan
under these requirements.
(c) Contributions and Funding Policy
Under the provisions of the Plan, participants may direct the Company to defer a
portion of their compensation to the Plan, subject to a maximum of 15% of
eligible compensation, as defined. Amounts contributed by participants are fully
vested when made. In 1999 and 1998 each eligible participant could contribute up
to $10,000 subject to other applicable IRC limitations. The Plan allows for
rollovers of vested contributions from previous employers' qualified plans.
During 1999, an employer matching contribution of $.50 for each $1.00 of
contribution up to 4% of the employee's eligible compensation to be made to the
Plan by the Company was approved by the Board of Directors for the 1999 Plan
year. This contribution was made quarterly by the Company to all participants
who were employees on the last day of each calendar quarter and were credited
with at least one year of service. The employer match was made in shares of the
Company's common stock. The employer matching contribution for 1999 is
approximately $12,347,000 and is included in the accompanying financial
statements.
The Company may also make a discretionary contribution to the Plan. However, the
Company did not make a discretionary contribution to the Plan for the 1999 Plan
year. The Company made a discretionary matching contribution of $1,000,000 to
the Plan during 1998.
4
<PAGE> 8
During 1998, a participant became fully vested after three years of service
with the Company. As of January 1, 1999, the three-year service requirement was
eliminated and a participant became fully vested immediately upon participation.
In no event will an attained vesting percentage be curtailed due to any
subsequent amendments to vesting provisions. Additionally, allocated amounts
become fully vested upon normal retirement age, as defined, death or termination
of employment as a result of a total or permanent disability. Nonvested amounts
that are forfeited are used to offset any Company contributions.
(d) Investments
The Company entered into an agreement whereby Merrill Lynch Trust Company
(the "Trustee") has been appointed the Trustee of the Plan's assets. Under the
terms of the agreement, the Trustee holds and invests the funds of the Plan
subject to the direction of a designated investment committee.
The Plan provided the following distinct investment alternatives for
participants in 1999.
Merrill Lynch Retirement Preservation Trust Fund -- A mutual fund in
which amounts are invested in U.S. Government agency securities and
guaranteed investment contracts.
Merrill Lynch Growth Fund -- A mutual fund in which amounts are invested
primarily in common stocks which are believed to be undervalued by the
fund's manager and therefore have growth potential.
Merrill Lynch Equity Index Trust Fund -- A trust fund that invests in a
portfolio of equity securities designed to substantially equal or
match the performance of the Standard & Poor's 500 Composite Stock
Price Index.
AutoNation, Inc. Common Stock -- In 1999 and 1998, the Plan allowed up
to 10% of a participant's total contribution to be invested in the
Company's Common Stock.
Franklin Small Cap Growth Fund -- A mutual fund that invests in a
portfolio of equity securities of small-capitalization companies,
equity securities of large-capitalization companies, and fixed income
securities.
Ivy International Fund -- A mutual fund that invests in a portfolio of
common stocks and convertible securities which principally trade in
European, Pacific Basin, and Latin American markets.
PIMCO Total Return Fund -- A mutual fund that invests in a portfolio of
fixed income securities of varying maturities, securities denominated in
foreign currencies and certain derivative instruments, contracts or
options for the purpose of hedging or increasing its return.
5
<PAGE> 9
The Plan does not permit participant loans. However, the Plan accepts and
services loans rolled over from the plans of acquired companies (See Note 6).
(2) SIGNIFICANT ACCOUNTING POLICIES:
(a) Basis of Accounting
The accompanying financial statements are prepared under the accrual method of
accounting. In order to maintain consistency and comparability between periods
presented, certain amounts have been reclassified from the previously reported
financial statements in order to conform with the financial statement
presentation of the current period.
(b) Investment Valuation and Income Recognition
The Plan's investments are stated at fair market value. Purchases and sales of
investments are recorded on a trade-date basis. The Company records dividends on
the ex-dividend date.
(3) INVESTMENTS
The following presents investments that represent 5 percent or more of the
Plan's net assets.
<TABLE>
<CAPTION>
December 31,
-------------------
1999 1998
---- ----
<S> <C> <C>
AutoNation, Inc. common stock, 845,214 and 98,353 shares, respectively $ 7,818,229 $ 1,463,007
Merrill Lynch Equity Index Trust Fund, 389,039 and 283,242 shares,
respectively 39,370,807 23,770,211
Merrill Lynch Retirement Preservation Trust Fund, 33,026,632 and
22,824,326 shares, respectively 33,026,632 22,824,326
Merrill Lynch Growth Fund, 388,756 and 384,838 shares, respectively 10,659,696 8,276,986
PIMCO Total Return Fund, 1,937,811 and 1,451,658 shares, respectively 19,184,324 15,300,478
Franklin Small Cap Growth Fund, 403,278 and 283,832 shares,
respectively 17,796,637 6,406,091
Ivy International Fund, 212,241 and 148,668 shares, respectively 9,994,434 6,125,123
</TABLE>
During 1999, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) appreciated (depreciated) in
value as follows:
Mutual funds $17,938,526
Common stock (4,030,300)
----------
$13,908,226
==========
(4) NONPARTICIPANT-DIRECTED INVESTMENTS
Information about the significant components of the changes in net assets
relating to the nonparticipant-directed investments is as follows:
<TABLE>
<CAPTION>
December 31,
-------------------
1999 1998
---- ----
<S> <C> <C>
Net Assets:
Common Stock $ 7,818,229 $1,463,007
Employer Contribution Receivable 3,451,688 3,888,982
---------- ----------
$11,269,917 $5,351,989
========== ==========
</TABLE>
<TABLE>
<CAPTION>
Year Ended
December 31, 1999
-------------------
<S> <C>
Changes in Net Assets:
Contributions $14,177,009
Net depreciation (4,030,300)
Employee Contribution Receivable (526,814)
Dividends 6,505
Conversions out (2,906,359)
Benefits paid to participants (806,394)
Transfers to participant-directed investments (1,660)
Other 5,941
-----------
$ 5,917,928
===========
</TABLE>
6
<PAGE> 10
(5) BENEFIT DISTRIBUTIONS
Upon termination of service, including death, total and permanent disability, or
retirement, a participant (or the participant's beneficiary) may elect to
receive an amount equal to the value of the participant's vested interest in his
or her account and any related earnings.
Amounts allocated to withdrawing participants for benefit claims that have been
processed and approved for payment but have not yet been paid totaled
approximately $273,000 and $566,000 at December 31, 1999 and 1998, respectively.
Such amounts are included in net assets available for benefits at December 31,
1999 and 1998, respectively, in accordance with American Institute of Certified
Public Accountants guidelines. However, the Plan's Form 5500 will reflect such
amount as a liability of the Plan in accordance with IRC guidelines.
(6) TRANSFERS TO/(FROM) PLAN
The 401(k) plans of certain companies acquired by the Company are periodically
merged into the Plan, with the related employees becoming participants. All of
the assets of these plans are transferred at fair market value and invested in
the Plan based upon the employees' elections. For the Plan year ended December
31, 1999, approximately $14,759,000 of Plan assets are reflected as mergers of
acquired company plans. In May 1999, the Company sold its solid waste services
division, which resulted in a conversion of approximately $16,646,000 out of the
Plan assets. The total conversion out of the Plan assets was approximately
$2,840,000 which is reflected in the accompanying statement of changes in net
assets available for benefits.
(7) PARTY-IN-INTEREST TRANSACTIONS
Certain plan investments are shares of mutual funds managed by Merrill Lynch
Asset Management Company, an affiliate of the Trustee. Therefore, these
investments represent a party-in-interest to the Plan. The Company pays all fees
and expenses of the Plan, which primarily consist of legal, administrative, and
accounting fees. Such fees and expenses amounted to approximately $662,000 and
$404,000 in 1999 and 1998, respectively.
(8) INCOME TAX STATUS
The Internal Revenue Service has determined, and informed the Company by a
letter dated January 21, 2000, that the Plan is designed in accordance with
applicable sections of the IRC. The Plan has been amended since receiving this
determination letter. However, the Plan administrator believes that the Plan is
designed and is currently being operated in compliance with the applicable
requirements of the IRC.
(9) FORMER PARTICIPANT BALANCES
In October 1997, the Company sold its electronic security services division. The
employees of this division are no longer eligible to participate in the Plan.
However, as of December 31, 1999 and 1998, approximately $171,000 and $392,000,
respectively, of total plan assets relate to such former participant balances.
Former participants of the electronic security services division have the option
to withdraw their individual accounts from the plan at any time.
In May 1999, the Company sold its solid waste services division. As of December
31, 1998, approximately $12,034,000 of total plan assets related to such former
participant balances. In July 1999, the total plan assets related to such
former participant balances were transferred to the Republic Services 401(k)
Plan.
(10) SUBSEQUENT EVENTS
Effective January 1, 2000, the Plan was amended and restated. Under the amended
and restated Plan, employer contributions will be made on a monthly basis
instead of a quarterly basis. In addition, employees are now eligible to
contribute to the Plan immediately upon the start of employment with the
Company. During 1999, a new employee had to have 90 days of service before being
eligible to contribute to the Plan.
On May 31, 2000, the Board of Directors of AutoNation granted final approval of
the tax-free spin-off of ANC Rental Corporation to AutoNation shareholders. In
the spin-off, each AutoNation shareholder of record as of June 16, 2000 will
receive one share of ANC Rental Corporation for every eight shares of
AutoNation owned. The Board established a distribution date of June 30, 2000.
On June 1, 2000, the Plan was amended to create a separate ANC Stock Fund to
hold shares of ANC Rental Corporation received by the Plan as a result of the
spin-off. The ANC Rental Fund is established to retain the ANC shares and
reinvest all dividends and other distributions in additional shares of ANC
stock. This fund does not permit the contribution of purchased ANC stock,
unless the stock is purchased with dividends or other distributions of ANC
Stock.
7
<PAGE> 11
Schedule I
E.I.N.: 75-1105145
Plan #: 001
AUTONATION
401(K) PLAN
SCHEDULE H, line 4i-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
DESCRIPTION OF INVESTMENT SHARES COST MARKET VALUE
------------------------- ------ -------- ------------
<S> <C> <C> <C>
*Merrill Lynch Retirement
Preservation Trust Fund 33,026,632 $ 33,026,632 $ 33,026,632
*Merrill Lynch Growth Fund 388,756 8,735,814 10,659,696
*Merrill Lynch Equity Index
Trust Fund 389,039 31,561,972 39,370,807
*Merrill Lynch Global Allocation
Fund 2 26 25
Alger MID CAP Growth Retirement
Report 218,146 3,115,131 3,143,484
Franklin Small Cap Growth Fund 403,278 10,478,425 17,796,637
Ivy International Fund 212,241 9,117,052 9,994,434
PIMCO Total Return Fund 1,937,811 20,177,787 19,184,323
Pending Settlement Fund 8,420 8,420 8,420
*AutoNation, Inc. Common Stock 845,214 12,290,863 7,818,229
*Loans to Participants 1,223,343 1,223,343 1,223,343
Cash N/A 3,297,690 3,297,690
------------ ------------
Total $133,033,155 $145,523,720
============ ============
</TABLE>
* Represents a party-in-interest to the Plan.
8
<PAGE> 12
Schedule III
E.I.N.: 75-1105145
Plan #: 001
AUTONATION
401(K) PLAN
SCHEDULE H, line 4j-SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
INVESTMENT DESCRIPTION Purchase Selling Asset Net
Purchases Shares Price Price Cost Gain/(Loss)
--------------------------------------------------------------------------
<S> <C> <C> <C>
*Merrill Lynch Equity Index Trust Fund 258,154 $23,444,344 N/A $23,444,344 N/A
*Merrill Lynch Retirment Preservation
Trust Fund 20,601,567 20,601,567 N/A 20,601,567 N/A
*Merrill Lynch Growth Fund 396,613 8,418,832 N/A 8,418,832 N/A
IVY International Fund 148,527 6,607,549 N/A 6,607,549 N/A
Franklin Small Cap Growth Fund 264,503 7,317,994 N/A 7,317,994 N/A
PIMCO Total Return Fund 1,235,553 12,541,710 N/A 12,541,710 N/A
*AutoNation, Inc. Common Stock 985,692 13,992,310 N/A 13,992,310 N/A
</TABLE>
<TABLE>
<CAPTION>
INVESTMENT DESCRIPTION Purchase Selling Asset Net
Sales Shares Price Price Cost Gain/(Loss)
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
*Merrill Lynch Equity Index Trust Fund 152,356 $11,390,592 $14,141,221 $11,390,592 $2,750,629
*Merrill Lynch Retirment Preservation
Trust Fund 11,067,801 11,067,801 11,067,801 11,067,801 0
*Merrill Lynch Growth Fund 392,694 9,284,735 9,320,911 9,284,735 36,176
IVY International Fund 84,954 3,495,187 3,751,054 3,495,187 255,867
Franklin Small Cap Growth Fund 116,822 2,697,111 3,289,275 2,697,111 592,164
PIMCO Total Return Fund 749,401 7,956,276 7,613,096 7,956,276 (343,180)
*AutoNation, Inc. Common Stock 251,323 4,123,279 3,755,749 4,123,279 (367,530)
</TABLE>
Notes:
* Represents a party-in-interest to the Plan.
(1) Transactions included herein represent transactions, or a series of
transactions, in securities of the same issue, or with respect to the same
issuer, of 5% of the quoted market value of Plan assets at the beginning
of the Plan year.
9
<PAGE> 13
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of
1934, the Company (or other persons who administer the employee benefit plan)
has duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
AutoNation
401(k) Plan
-----------------------------------
(Name of Plan)
Date: June 28, 2000 By: /s/ Judy Bullock
------------------- -------------------------------
Title: Chairperson of the
Administrative Committee of the
AutoNation 401(k) Plan
