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1.	INTERIM FINANCIAL STATEMENTS

Business and Basis of Presentation

AutoNation, Inc., through its subsidiaries, is the largest automotive retailer in the United States. As of June 30, 2020, we owned and operated 315 new vehicle franchises from 230 stores located in the United States, predominantly in major metropolitan markets in the Sunbelt region. Our stores, which we believe include some of the most recognizable and well-known in our key markets, sell 32 different new vehicle brands. The core brands of new vehicles that we sell, representing approximately 89% of the new vehicles that we sold during the six months ended June 30, 2020, are manufactured by Toyota (including Lexus), Honda, Ford, General Motors, FCA US, Mercedes-Benz, BMW, and Volkswagen (including Audi and Porsche). As of June 30, 2020, we also owned and operated 79 AutoNation-branded collision centers, 5 AutoNation USA stores, 4 automotive auction operations, and 16 parts distribution centers.

We offer a diversified range of automotive products and services, including new vehicles, used vehicles, “parts and service,” which includes automotive repair and maintenance services as well as wholesale parts and collision businesses, and automotive “finance and insurance” products, which include vehicle service and other protection products, as well as the arranging of financing for vehicle purchases through third-party finance sources. For convenience, the terms “AutoNation,” “Company,” and “we” are used to refer collectively to AutoNation, Inc. and its subsidiaries, unless otherwise required by the context. Our dealership operations are conducted by our subsidiaries.

The accompanying Unaudited Condensed Consolidated Financial Statements include the accounts of AutoNation, Inc. and its subsidiaries; intercompany accounts and transactions have been eliminated. The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. Additionally, operating results for interim periods are not necessarily indicative of the results that can be expected for a full year. The Unaudited Condensed Consolidated Financial Statements herein should be read in conjunction with our audited Consolidated Financial Statements and notes thereto included within our most recent Annual Report on Form 10-K. These Unaudited Condensed Consolidated Financial Statements reflect, in the opinion of management, all material adjustments (which include only normal recurring adjustments) necessary to fairly state, in all material respects, our financial position and results of operations for the periods presented.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. In preparing these financial statements, management has made its best estimates and judgments of certain amounts included in the financial statements. We base our estimates and judgments on historical experience and other assumptions that we believe are reasonable. However, application of these accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ materially from these estimates. We periodically evaluate estimates and assumptions used in the preparation of the financial statements and make changes on a prospective basis when adjustments are necessary. Such estimates and assumptions affect, among other things, our goodwill, long-lived asset, and indefinite-lived intangible asset valuation; inventory valuation; equity investment valuation; assets held for sale; accruals for chargebacks against revenue recognized from the sale of finance and insurance products; accruals related to self-insurance programs; certain legal proceedings; assessment of the annual effective tax rate; valuation of deferred income taxes and income tax contingencies; the allowance for expected credit losses; and measurement of performance-based compensation costs.

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Disaggregation of Revenue

The significant majority of our revenue is from contracts with customers. Taxes assessed by governmental authorities that are directly imposed on revenue transactions are excluded from revenue. In the following tables, revenue is disaggregated by major lines of goods and services and timing of transfer of goods and services. We have determined that these categories depict how the nature, amount, timing, and uncertainty of our revenue and cash flows are affected by economic factors. The tables below also include a reconciliation of the disaggregated revenue to reportable segment revenue.

		Three Months Ended June 30, 2020
		Domestic				Import				Premium Luxury				Corporate and other(1)				Total
Major Goods/Service Lines
New vehicle		$	761.7			$	712.6			$	787.0			$	—			$	2,261.3
Used vehicle		436.8				355.8				490.3				41.6				1,324.5
Parts and service		193.3				170.4				223.2				103.0				689.9
Finance and insurance, net		88.0				82.4				64.3				11.7				246.4
Other		6.2				4.1				—				0.6				10.9
		$	1,486.0			$	1,325.3			$	1,564.8			$	156.9			$	4,533.0
Timing of Revenue Recognition
Goods and services transferred at a point in time		$	1,343.2			$	1,187.0			$	1,373.6			$	97.4			$	4,001.2
Goods and services transferred over time(2)		142.8				138.3				191.2				59.5				531.8
		$	1,486.0			$	1,325.3			$	1,564.8			$	156.9			$	4,533.0

		Three Months Ended June 30, 2019
		Domestic				Import				Premium Luxury				Corporate and other(1)				Total
Major Goods/Service Lines
New vehicle		$	894.5			$	916.1			$	959.0			$	—			$	2,769.6
Used vehicle		447.0				388.0				507.8				36.6				1,379.4
Parts and service		241.2				229.2				285.7				145.4				901.5
Finance and insurance, net		89.8				91.4				68.4				5.6				255.2
Other		34.8				2.6				—				0.7				38.1
		$	1,707.3			$	1,627.3			$	1,820.9			$	188.3			$	5,343.8
Timing of Revenue Recognition
Goods and services transferred at a point in time		$	1,528.4			$	1,445.3			$	1,577.7			$	98.7			$	4,650.1
Goods and services transferred over time(2)		178.9				182.0				243.2				89.6				693.7
		$	1,707.3			$	1,627.3			$	1,820.9			$	188.3			$	5,343.8

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		Six Months Ended June 30, 2020
		Domestic				Import				Premium Luxury				Corporate and other(1)				Total
Major Goods/Service Lines
New vehicle		$	1,500.6			$	1,446.5			$	1,596.1			$	—			$	4,543.2
Used vehicle		841.4				690.3				957.6				83.9				2,573.2
Parts and service		428.9				377.9				500.6				258.8				1,566.2
Finance and insurance, net		171.1				166.4				127.3				17.4				482.2
Other		27.5				6.3				—				1.4				35.2
		$	2,969.5			$	2,687.4			$	3,181.6			$	361.5			$	9,200.0
Timing of Revenue Recognition
Goods and services transferred at a point in time		$	2,654.6			$	2,387.5			$	2,753.8			$	206.7			$	8,002.6
Goods and services transferred over time(2)		314.9				299.9				427.8				154.8				1,197.4
		$	2,969.5			$	2,687.4			$	3,181.6			$	361.5			$	9,200.0

		Six Months Ended June 30, 2019
		Domestic				Import				Premium Luxury				Corporate and other(1)				Total
Major Goods/Service Lines
New vehicle		$	1,675.5			$	1,736.3			$	1,854.5			$	—			$	5,266.3
Used vehicle		890.4				757.5				1,004.5				66.6				2,719.0
Parts and service		477.5				449.4				563.9				287.4				1,778.2
Finance and insurance, net		170.2				175.9				130.0				15.6				491.7
Other		62.5				4.3				2.1				1.5				70.4
		$	3,276.1			$	3,123.4			$	3,555.0			$	371.1			$	10,325.6
Timing of Revenue Recognition
Goods and services transferred at a point in time		$	2,926.5			$	2,770.1			$	3,074.9			$	191.4			$	8,962.9
Goods and services transferred over time(2)		349.6				353.3				480.1				179.7				1,362.7
		$	3,276.1			$	3,123.4			$	3,555.0			$	371.1			$	10,325.6
(1) “Corporate and other” is comprised of our other businesses, including collision centers, auction operations, AutoNation USA stand-alone used vehicle sales and service centers, and parts distribution centers.
(2) Represents revenue recognized during the period for automotive repair and maintenance services.

Transaction Price Allocated to Remaining Performance Obligations

We sell a vehicle maintenance program (the AutoNation Vehicle Care Program or “VCP”) under which a customer purchases a specific number of maintenance services to be redeemed at an AutoNation location over a five-year term from the date of purchase. We satisfy our performance obligations related to this program and recognize revenue as the maintenance services are rendered, since the customer benefits when we have completed the maintenance service.

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The following table includes estimated revenue expected to be recognized in the future related to VCP performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period:

		Revenue Expected to Be Recognized by Period
		Total				Less Than 1 Year				1 - 3 Years				3 - 5 Years
Revenue expected to be recognized on VCP contracts sold as of period end		$	87.2			$	29.3			$	43.5			$	14.4

As a practical expedient, since automotive repair and maintenance services are performed within one year or less, we do not disclose estimated revenue expected to be recognized in the future for automotive repair and maintenance performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period or when we expect to recognize such revenue.

Contract Assets and Liabilities

When the timing of our provision of goods or services is different from the timing of payments made by our customers, we recognize either a contract asset (performance precedes contractual due date) or a contract liability (customer payment precedes performance). Contract assets primarily relate to our right to consideration for work in process not yet billed at the reporting date associated with automotive repair and maintenance services, as well as our estimate of variable consideration that has been included in the transaction price for certain finance and insurance products (retrospective commissions). These contract assets are reclassified to receivables when the right to consideration becomes unconditional. Contract liabilities primarily relate to upfront payments received from customers for the sale of VCP maintenance contracts. Performance obligations are satisfied, and revenue is recognized, for VCP maintenance contracts as each underlying service of the multi-year contract is completed during the contract term.

Our receivables from contracts with customers are included in Receivables, net, our current contract asset is included in Other Current Assets, our long-term contract asset is included in Other Assets, our current contract liability is included in Other Current Liabilities, and our long-term contract liability is included in Other Liabilities in our Unaudited Condensed Consolidated Balance Sheets.

The following table provides the balances of our receivables from contracts with customers and our current and long-term contract assets and contract liabilities:

	June 30, 2020				December 31, 2019
Receivables from contracts with customers, net	$	493.4			$	662.0
Contract Asset (Current)	$	21.7			$	26.7
Contract Asset (Long-Term)	$	2.3			$	7.0
Contract Liability (Current)	$	32.3			$	32.6
Contract Liability (Long-Term)	$	55.5			$	57.7

The change in the balances of our contract assets and contract liabilities primarily result from the timing differences between our performance and the customer’s payment, as well as changes in the estimated transaction price related to variable consideration that was constrained for performance obligations satisfied in previous periods. The following table presents revenue recognized during the period from amounts included in the contract liability balance at the beginning of the period and performance obligations satisfied in previous periods:

	Three Months Ended June 30,								Six Months Ended June 30,
	2020				2019				2020				2019
Amounts included in contract liability at the beginning of the period	$	10.3			$	8.5			$	18.8			$	21.5
Performance obligations satisfied in previous periods	$	3.9			$	2.3			$	3.9			$	6.9

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3.	EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period, including vested restricted stock unit (“RSU”) awards. Diluted earnings per share is computed by dividing net income (loss) by the weighted average number of shares outstanding, noted above, adjusted for the dilutive effect of stock options and unvested RSU awards.

The following table presents the calculation of basic and diluted earnings (loss) per share:

	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2020				2019				2020				2019
Net income from continuing operations	$	279.9			$	101.0			$	47.7			$	193.1
Loss from discontinued operations, net of income taxes	(0.1		)		(0.2		)		(0.2		)		(0.3		)
Net income	$	279.8			$	100.8			$	47.5			$	192.8
Basic weighted average common shares outstanding	87.9				89.9				89.0				90.2
Dilutive effect of stock options and unvested RSUs	0.2				0.3				—				0.2
Diluted weighted average common shares outstanding	88.1				90.2				89.0				90.4
Basic earnings (loss) per share amounts(1):
Continuing operations	$	3.18			$	1.12			$	0.54			$	2.14
Discontinued operations	$	—			$	—			$	—			$	—
Net income	$	3.18			$	1.12			$	0.53			$	2.14
Diluted earnings (loss) per share amounts(1):
Continuing operations	$	3.18			$	1.12			$	0.54			$	2.14
Discontinued operations	$	—			$	—			$	—			$	—
Net income	$	3.18			$	1.12			$	0.53			$	2.13
(1) Earnings (loss) per share amounts are calculated discretely and, therefore, may not add up to the total due to rounding.

A summary of anti-dilutive equity instruments excluded from the computation of diluted earnings (loss) per share is as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2019			2020			2019
Anti-dilutive equity instruments excluded from the computation of diluted earnings (loss) per share	2.4			2.6			2.7			2.7

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4.	RECEIVABLES, NET

The components of receivables, net of allowances for expected credit losses, are as follows:

	June 30, 2020				December 31, 2019
Contracts-in-transit and vehicle receivables	$	367.9			$	506.0
Trade receivables	122.7				136.4
Manufacturer receivables	152.4				234.5
Income taxes receivable (see Note 8)	—				1.5
Other	33.8				38.8
	676.8				917.2
Less: allowances for expected credit losses	(3.5		)		(0.5		)
Receivables, net	$	673.3			$	916.7

5.	INVENTORY AND VEHICLE FLOORPLAN PAYABLE

The components of inventory are as follows:

	June 30, 2020				December 31, 2019
New vehicles	$	1,716.7			$	2,490.8
Used vehicles	493.9				570.0
Parts, accessories, and other	221.7				245.0
Inventory	$	2,432.3			$	3,305.8

The components of vehicle floorplan payable are as follows:

	June 30, 2020				December 31, 2019
Vehicle floorplan payable - trade	$	1,499.1			$	2,120.6
Vehicle floorplan payable - non-trade	1,023.8				1,455.2
Vehicle floorplan payable	$	2,522.9			$	3,575.8

Vehicle floorplan payable-trade reflects amounts borrowed to finance the purchase of specific new and, to a lesser extent, used vehicle inventories with the corresponding manufacturers’ captive finance subsidiaries (“trade lenders”). Vehicle floorplan payable-non-trade represents amounts borrowed to finance the purchase of specific new and, to a lesser extent, used vehicle inventories with non-trade lenders, as well as amounts borrowed under our secured used vehicle floorplan facilities. Changes in vehicle floorplan payable-trade are reported as operating cash flows and changes in vehicle floorplan payable-non-trade are reported as financing cash flows in the accompanying Unaudited Condensed Consolidated Statements of Cash Flows.

Our inventory costs are generally reduced by manufacturer holdbacks, incentives, floorplan assistance, and non-reimbursement-based manufacturer advertising rebates, while the related vehicle floorplan payables are reflective of the gross cost of the vehicle. The vehicle floorplan payables, as shown in the above table, will generally also be higher than the inventory cost due to the timing of the sale of a vehicle and payment of the related liability.

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Vehicle floorplan facilities are due on demand, but in the case of new vehicle inventories, are generally paid within several business days after the related vehicles are sold. Vehicle floorplan facilities are primarily collateralized by vehicle inventories and related receivables.

Our new vehicle floorplan facilities utilize LIBOR-based interest rates, which averaged 2.3% for the six months ended June 30, 2020, and 3.9% for the six months ended June 30, 2019. At June 30, 2020, the aggregate capacity under our new vehicle floorplan facilities to finance our new vehicle inventory was approximately $4.8 billion, of which $2.2 billion had been borrowed.

6.	GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill and intangible assets, net, consist of the following:

	June 30, 2020				December 31, 2019
Goodwill	$	1,181.3			$	1,501.9
Franchise rights - indefinite-lived	$	509.0			$	566.5
Other intangibles	21.2				23.4
	530.2				589.9
Less: accumulated amortization	(8.2		)		(8.3		)
Other intangible assets, net	$	522.0			$	581.6

Goodwill

Goodwill for our reporting units is tested for impairment annually as of April 30 or more frequently when events or changes in circumstances indicate that impairment may have occurred.

During the first quarter of 2020, our stock price, along with the U.S. stock market in general, was adversely impacted by the market reaction to the novel coronavirus disease 2019 (“COVID-19”) pandemic. In light of the uncertainty surrounding the COVID-19 pandemic and the decrease in our market capitalization as of March 31, 2020, we concluded that a triggering event had occurred potentially indicating that the fair values of our reporting units were less than their carrying values as of March 31, 2020. Therefore, we performed quantitative goodwill impairment tests for each of our reporting units as of March 31, 2020. As a result of these impairment tests, during the three months ended March 31, 2020, we recorded non-cash goodwill impairment charges totaling $318.3 million, of which $257.4 million related to our Premium Luxury reporting unit, $41.6 million related to our Collision Centers reporting unit, and $19.3 million related to our Parts Center reporting unit. The non-cash impairment charges are reflected as Goodwill Impairment in the accompanying Unaudited Condensed Consolidated Statements of Operations for the six months ended June 30, 2020. See Note 11 of the Notes to Unaudited Condensed Consolidated Financial Statements for information about our quantitative goodwill impairment test.

Under accounting standards, we chose to make a qualitative evaluation about the likelihood of goodwill impairment for our annual impairment testing as of April 30, 2020, and we determined that it was not more likely than not that the fair values of our reporting units were less than their carrying amounts.

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Goodwill allocated to our reporting units and changes in the carrying amount of goodwill for the six months ended June 30, 2020, were as follows:

	Domestic				Import				Premium Luxury				Collision Centers				Parts Centers				Consolidated
Goodwill at January 1, 2020 (1)	$	227.3			$	498.9			$	714.9			$	41.7			$	19.1			$	1,501.9
Acquisitions, dispositions, and other adjustments, net (2)	(0.1		)		(2.0		)		(0.3		)		(0.1		)		0.2				(2.3		)
Impairment	—				—				(257.4		)		(41.6		)		(19.3		)		(318.3		)
Goodwill at June 30, 2020 (1)(3)	$	227.2			$	496.9			$	457.2			$	—			$	—			$	1,181.3

(1)	Net of accumulated impairment losses of $1.47 billion associated with our single reporting unit (prior to September 30, 2008, our reporting unit structure was comprised of a single reporting unit) and $140.0 million associated with our Domestic reporting unit, both of which were recorded during the year ended December 31, 2008.

(2)	Includes amounts reclassified to held for sale and related adjustments, which are presented in Other Current Assets in our Unaudited Condensed Consolidated Balance Sheet as of period end.

(3)	Net of accumulated impairment losses of $257.4 million associated with our Premium Luxury reporting unit, $41.6 million associated with our Collision Centers reporting unit, and $19.3 million associated with our Parts Centers reporting unit, each of which were recorded during the three months ended March 31, 2020.

Other Intangible Assets

Our principal identifiable intangible assets are individual store rights under franchise agreements with vehicle manufacturers, which have indefinite lives and are tested for impairment annually as of April 30 or more frequently when events or changes in circumstances indicate that impairment may have occurred.

During the first quarter of 2020, we concluded that, as a result of the impacts from the COVID-19 pandemic, a triggering event had occurred that indicated the fair values of our franchise rights may have been less than their carrying values as of March 31, 2020. We performed quantitative impairment tests as of March 31, 2020, and as a result, we identified eight stores with franchise rights carrying values that exceeded their estimated fair values, and we recorded non-cash franchise rights impairment charges of $57.5 million. The non-cash impairment charges are reflected as Franchise Rights Impairment in the accompanying Unaudited Condensed Consolidated Statements of Operations for the six months ended June 30, 2020.

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7.	LONG-TERM DEBT AND COMMERCIAL PAPER

Long-term debt consists of the following:

Debt Description		Maturity Date		Interest Payable		June 30, 2020				December 31, 2019
5.5% Senior Notes		February 1, 2020		February 1 and August 1		$	—			$	350.0
3.35% Senior Notes		January 15, 2021		January 15 and July 15		300.0				300.0
3.5% Senior Notes		November 15, 2024		May 15 and November 15		450.0				450.0
4.5% Senior Notes		October 1, 2025		April 1 and October 1		450.0				450.0
3.8% Senior Notes		November 15, 2027		May 15 and November 15		300.0				300.0
4.75% Senior Notes		June 1, 2030		June 1 and December 1		500.0				—
Revolving credit facility		March 26, 2025		Monthly		—				—
Finance leases and other debt		Various dates through 2039		Monthly		106.6				93.9
						2,106.6				1,943.9
Less: unamortized debt discounts and debt issuance costs						(16.2		)		(9.8		)
Less: current maturities						(307.3		)		(355.6		)
Long-term debt, net of current maturities						$	1,783.1			$	1,578.5

Debt Refinancing Transaction

On March 26, 2020, we amended and restated our existing unsecured credit agreement to, among other things, (1) provide for lower commitment fees and loan margins as set forth in the amended and restated credit agreement, (2) extend the maturity date to March 26, 2025, and (3) provide for customary LIBOR replacement provisions.

Senior Unsecured Notes and Credit Agreement

On May 21, 2020, we issued $500.0 million aggregate principal amount of 4.75% Senior Notes due 2030, which were sold at 99.479% of the aggregate principal amount. In February 2020, we repaid the outstanding $350.0 million of 5.5% Senior Notes due 2020. Our 3.35% Senior Notes due 2021 will mature on January 15, 2021, and were, therefore, reclassified to current maturities during the first quarter of 2020.

The interest rates payable on our outstanding senior unsecured notes are subject to adjustment upon the occurrence of certain credit rating events as provided in the indentures for these senior unsecured notes.

Under our amended and restated credit agreement, we have a $1.8 billion revolving credit facility that matures on March 26, 2025. The credit agreement also contains an accordion feature that allows us, subject to credit availability and certain other conditions, to increase the amount of the revolving credit facility, together with any added term loans, by up to $500.0 million in the aggregate. As of June 30, 2020, we had no borrowings outstanding under our revolving credit facility. We have a $200.0 million letter of credit sublimit as part of our revolving credit facility. The amount available to be borrowed under the revolving credit facility is reduced on a dollar-for-dollar basis by the cumulative amount of any outstanding letters of credit, which was $39.7 million at June 30, 2020, leaving a borrowing capacity under the revolving credit facility of $1.8 billion at June 30, 2020. As of June 30, 2020, this borrowing capacity was limited under the applicable maximum consolidated leverage ratio contained in our credit agreement to $1.3 billion.

Our revolving credit facility under the amended credit agreement provides for a commitment fee on undrawn amounts ranging from 0.125% to 0.20% and interest on borrowings at LIBOR or the base rate, in each case plus an applicable margin. The applicable margin ranges from 1.125% to 1.50% for LIBOR borrowings and 0.125% to 0.50% for base rate borrowings. The interest rate charged for our revolving credit facility is affected by our leverage ratio. For instance, an increase in our leverage ratio from greater than or equal to 2.0x but less than 3.25x to greater than or equal to 3.25x would result in a 12.5 basis point increase in the applicable margin.

Within the meaning of Regulation S-X, Rule 3-10, AutoNation, Inc. (the parent company) has no independent assets or operations. If the guarantees of our subsidiaries were to be issued under our existing registration statement, we expect that such guarantees would be full and unconditional and joint and several, and any subsidiaries other than the guarantor subsidiaries would be minor.

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Other Long-Term Debt

At June 30, 2020, we had finance leases and other debt obligations of $106.6 million, which are due at various dates through 2039.

Commercial Paper

We have a commercial paper program pursuant to which we may issue short-term, unsecured commercial paper notes on a private placement basis up to a maximum aggregate amount outstanding at any time of $1.0 billion. The interest rate for the commercial paper notes varies based on duration and market conditions. The maturities of the commercial paper notes may vary, but may not exceed 397 days from the date of issuance. Proceeds from the issuance of commercial paper notes are used to repay borrowings under the revolving credit facility, to finance acquisitions and for working capital, capital expenditures, share repurchases, and/or other general corporate purposes. We plan to use the revolving credit facility under our credit agreement as a liquidity backstop for borrowings under the commercial paper program. A downgrade in our credit ratings could negatively impact our ability to issue, or the interest rates for, commercial paper notes.

At June 30, 2020, we had no commercial paper notes outstanding. At December 31, 2019, we had $170.0 million of commercial paper notes outstanding with a weighted-average annual interest rate of 2.13% and a weighted-average remaining term of 12 days.

8.	INCOME TAXES

Income taxes payable included in Other Current Liabilities totaled $69.5 million at June 30, 2020. Income taxes receivable included in Receivables, net totaled $1.5 million at December 31, 2019.

We file income tax returns in the U.S. federal jurisdiction and various states. As a matter of course, various taxing authorities, including the IRS, regularly audit us. Currently, no tax years are under examination by the IRS, and tax years from 2014 to 2017 are under examination by certain U.S. state jurisdictions. These audits may result in proposed assessments where the ultimate resolution may result in our owing additional taxes.

It is our policy to account for interest and penalties associated with income tax obligations as a component of Income Tax Provision in the accompanying Unaudited Condensed Consolidated Statements of Operations.

9.	SHAREHOLDERS’ EQUITY

A summary of shares repurchased under our stock repurchase program authorized by our Board of Directors follows:

	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2020				2019				2020				2019
Shares repurchased	—				0.3				2.5				1.3
Aggregate purchase price	$	—			$	11.2			$	80.0			$	44.7
Average purchase price per share	$	—			$	39.54			$	31.95			$	35.51

As of June 30, 2020, $139.0 million remained available for share repurchases under the program.

A summary of shares of common stock issued in connection with the exercise of stock options follows:

	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2020				2019				2020				2019
Shares issued (in actual number of shares)	—				90,248				55,000				101,475
Proceeds from the exercise of stock options	$	—			$	2.9			$	1.0			$	3.2
Average exercise price per share	$	—			$	31.76			$	18.12			$	31.11

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The following table presents a summary of shares of common stock issued in connection with the settlement of RSUs, as well as shares surrendered to AutoNation to satisfy tax withholding obligations in connection with the vesting of restricted stock and settlement of RSUs:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In actual number of shares)	2020			2019			2020			2019
Shares issued	7,340			71,171			502,021			304,301
Shares surrendered to AutoNation to satisfy tax withholding obligations	2,260			6,601			186,600			84,432

10.	CASH FLOW INFORMATION

Cash, Cash Equivalents, and Restricted Cash

The following table provides a reconciliation of cash and cash equivalents reported on our Unaudited Condensed Consolidated Balance Sheets to the total amounts, which include cash, cash equivalents, and restricted cash, reported on our Unaudited Condensed Consolidated Statements of Cash Flows:

	June 30, 2020				December 31, 2019
Cash and cash equivalents	$	257.3			$	42.0
Restricted cash included in Current Assets	0.1				0.5
Total cash, cash equivalents, and restricted cash	$	257.4			$	42.5

Non-Cash Investing and Financing Activities

We had accrued purchases of property and equipment of $8.7 million at June 30, 2020, and $26.2 million at June 30, 2019. We had non-cash investing and financing activities related to increases in property and equipment acquired under financing arrangements of $0.8 million during the six months ended June 30, 2020, and $1.9 million during the six months ended June 30, 2019.

		Six Months Ended June 30,
		2020				2019
Supplemental noncash information on adjustments to right-of-use assets, including right-of-use assets obtained in exchange for new:
Operating lease liabilities		$	27.8			$	12.1
Finance lease liabilities		$	26.6			$	25.9

Interest and Income Taxes Paid

We made interest payments, net of amounts capitalized and including interest on vehicle inventory financing, of $83.5 million during the six months ended June 30, 2020, and $130.6 million during the six months ended June 30, 2019. We made income tax payments, net of income tax refunds, of $3.2 million during the six months ended June 30, 2020, and $76.0 million during the six months ended June 30, 2019.

11.	FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of judgment, and therefore cannot be determined with precision.

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Accounting standards define fair value as the price that would be received from selling an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Accounting standards establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value and also establishes the following three levels of inputs that may be used to measure fair value:

Level 1	Quoted prices in active markets for identical assets or liabilities
Level 2	Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted market prices in markets that are not active; or model-derived valuations or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities
Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities

The following methods and assumptions were used by us in estimating fair value disclosures for financial instruments:

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Cash and cash equivalents, receivables, other current assets, vehicle floorplan payable, accounts payable, other current liabilities, commercial paper, and variable rate debt: The amounts reported in the accompanying Unaudited Condensed Consolidated Balance Sheets approximate fair value due to their short-term nature or the existence of variable interest rates that approximate prevailing market rates.

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Investment in Security with a Readily Determinable Fair Value: Our minority equity investment in Vroom Inc. has a readily determinable fair value following Vroom’s initial public offering in the second quarter of 2020. As of June 30, 2020, the carrying amount of our Vroom equity investment was $290.5 million. The fair value of this equity investment is based on the quoted price in active markets for the identical asset (Level 1). The equity interest is reported in Other Assets in the accompanying Unaudited Condensed Consolidated Balance Sheets. During the three and six months ended June 30, 2020, we recognized an unrealized gain of $214.7 million related to this investment, which is reported in Other Non-Operating Income in the Consolidated Statements of Operations and in the “Corporate and other” category of our segment information.

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Investments in Security without a Readily Determinable Fair Value: We elected to measure our minority equity investment in Waymo, which does not have a readily determinable fair value, using a measurement alternative as permitted by accounting standards, and we recorded the equity interest at its cost of $50.0 million. The equity interest is reported in Other Assets in the accompanying Unaudited Condensed Consolidated Balance Sheets. We have considered all relevant transactions since the date of our investment through June 30, 2020, and we have not recorded any impairments or upward or downward adjustments to the carrying amounts of our investment as of June 30, 2020, as there have not been any indications of impairment or observable price changes in orderly transactions for the identical or a similar investment of the same issuer as of such date.

•	Fixed rate long-term debt: Our fixed rate long-term debt primarily consists of amounts outstanding under our senior unsecured notes. We estimate the fair value of our senior unsecured notes using quoted prices for the identical liability (Level 1). A summary of the aggregate carrying values and fair values of our fixed rate long-term debt is as follows:

	June 30, 2020				December 31, 2019
Carrying value	$	2,090.4			$	1,934.1
Fair value	$	2,216.9			$	2,001.8

Nonfinancial assets such as goodwill, other intangible assets, long-lived assets held and used, and right-of-use assets are measured at fair value when there is an indicator of impairment and recorded at fair value only when impairment is recognized or for a business combination. The fair values less costs to sell of long-lived assets held for sale are assessed each reporting period they remain classified as held for sale. Subsequent changes in the held for sale long-lived asset’s fair value less cost to sell (increase or decrease) is reported as an adjustment to its carrying amount, except that the adjusted carrying amount cannot exceed the carrying amount of the long-lived asset at the time it was initially classified as held for sale.

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The following table presents nonfinancial assets measured and recorded at fair value on a nonrecurring basis during the six months ended June 30, 2020 and 2019:

		2020								2019
Description		Fair Value Measurements Using Significant Unobservable Inputs (Level 3)				Gain/(Loss)				Fair Value Measurements Using Significant Unobservable Inputs (Level 3)				Gain/(Loss)
Goodwill		$	457.5			$	(318.3	)		$	—			$	—
Franchise rights and other		$	26.2			$	(59.9	)		$	8.9			$	(9.6	)
Right-of-use assets		$	1.4			$	(0.4	)		$	0.1			$	(0.2	)
Long-lived assets held and used		$	1.8			$	(5.8	)		$	—			$	—
Long-lived assets held for sale in continuing     operations		$	—			$	—			$	21.3			$	(1.1	)

Goodwill and Other Intangible Assets

Goodwill for our reporting units is tested for impairment annually as of April 30 or more frequently when events or changes in circumstances indicate that the carrying value of a reporting unit more likely than not exceeds its fair value. In light of the uncertainty surrounding the COVID-19 pandemic and the decrease in our market capitalization as of March 31, 2020, we concluded that a triggering event had occurred potentially indicating that the fair values of our reporting units were less than their carrying values as of March 31, 2020. Therefore, we performed quantitative goodwill impairment tests for each of our reporting units as of March 31, 2020. As a result of these impairment tests, during the three months ended March 31, 2020, we recorded non-cash goodwill impairment charges totaling $318.3 million, of which $257.4 million related to our Premium Luxury reporting unit, $41.6 million related to our Collision Centers reporting unit, and $19.3 million related to our Parts Center reporting unit. The non-cash impairment charges are reflected as Goodwill Impairment in the accompanying Unaudited Condensed Consolidated Statements of Operations and in the “Corporate and other” category of our segment information.

The quantitative goodwill impairment test requires a determination of whether the fair value of a reporting unit is less than its carrying value. We estimate the fair value of our reporting units using an “income” valuation approach, which discounts projected free cash flows of the reporting unit at a computed weighted average cost of capital as the discount rate. The income valuation approach requires the use of significant estimates and assumptions, which include revenue growth rates and future operating margins used to calculate projected future cash flows, weighted average costs of capital, and future economic and market conditions. In connection with this process, we also reconcile the estimated aggregate fair values of our reporting units to our market capitalization, including consideration of a control premium, based upon our stock price and/or average stock price over a reasonable period as of the measurement date. We base our cash flow forecasts on our knowledge of the automotive industry, our recent performance, our expectations of our future performance, and other assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Actual future results may differ from those estimates. We also make certain judgments and assumptions in allocating shared assets and liabilities to determine the carrying values for each of our reporting units.

Under accounting standards, we chose to make a qualitative evaluation about the likelihood of goodwill impairment for our annual impairment testing as of April 30, 2020, and we determined that it was not more likely than not that the fair values of our reporting units were less than their carrying amounts.

Our principal identifiable intangible assets are individual store rights under franchise agreements with vehicle manufacturers, which have indefinite lives and are tested for impairment annually as of April 30 or more frequently when events or changes in circumstances indicate that impairment may have occurred. During the first quarter of 2020, we concluded that, as a result of the impacts from the COVID-19 pandemic, a triggering event had occurred that indicated the fair values of our franchise rights may have been less than their carrying values as of March 31, 2020. Therefore, we performed quantitative franchise rights impairment tests as of March 31, 2020. The quantitative impairment test for franchise rights requires the comparison of the franchise rights’ estimated fair value to carrying value by store. Fair values of rights under franchise agreements are estimated using Level 3 inputs by discounting expected future cash flows of the store. The forecasted cash flows

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contain inherent uncertainties, including significant estimates and assumptions related to growth rates, margins, working capital requirements, capital expenditures, and cost of capital, for which we utilize certain market participant-based assumptions, using third-party industry projections, economic projections, and other marketplace data we believe to be reasonable.

As a result of the quantitative impairment tests, we identified eight stores with franchise rights carrying values that exceeded their estimated fair values, and we recorded non-cash franchise rights impairment charges of $57.5 million during the three months ended March 31, 2020. We elected to perform quantitative tests for our annual franchise rights impairment testing as of April 30, 2020, and no additional impairment charges resulted from these quantitative tests.

We elected to perform quantitative franchise rights impairment tests as of April 30, 2019, and recorded non-cash impairment charges of $9.6 million to reduce the carrying values of certain franchise rights to their estimated fair values.

The non-cash impairment charges recorded during the six months ended June 30, 2020 and 2019, are reflected as Franchise Rights Impairment in the accompanying Unaudited Condensed Consolidated Statements of Operations and in the “Corporate and other” category of our segment information.

We also recorded non-cash impairment charges of $2.4 million to reduce the carrying value of certain finite-lived intangible assets to estimated fair value during the three months ended March 31, 2020, which are included in Other Income (Expense), Net in our Unaudited Condensed Consolidated Statements of Operations and in the “Corporate and other” category of our segment information.

Long-Lived Assets and Right-of-Use Assets

Fair value measurements for our long-lived assets and right-of-use assets are based on Level 3 inputs. Changes in fair value measurements are reviewed and assessed each quarter for properties classified as held for sale, or when an indicator of impairment exists for properties classified as held and used or for right-of-use assets. The valuation process is generally based on a combination of the market and replacement cost approaches.

In a market approach, we use transaction prices for comparable properties that have recently been sold. These transaction prices are adjusted for factors related to a specific property. We evaluate changes in local real estate markets, and/or recent market interest or negotiations related to a specific property. In a replacement cost approach, the cost to replace a specific long-lived asset is considered, which is adjusted for depreciation from physical deterioration, as well as functional and economic obsolescence, if present and measurable.

To validate the fair values determined under the valuation process noted above, we also obtain independent third-party appraisals for our properties and/or third-party brokers’ opinions of value, which are generally developed using the same valuation approaches described above, and we evaluate any recent negotiations or discussions with third-party real estate brokers related to a specific long-lived asset or market. 

During the six months ended June 30, 2020, we recorded non-cash impairment charges of $5.8 million related to our long-lived assets held and used and $0.4 million related to our right-of-use assets. During the six months ended June 30, 2019, we recorded non-cash impairment charges of $1.1 million related to our long-lived assets held for sale in continuing operations and $0.2 million related to our right-of-use assets. The non-cash impairment charges are included in Other Income (Expense), Net in our Unaudited Condensed Consolidated Statements of Operations and in the “Corporate and other” category of our segment information.

We had assets held for sale in continuing operations of $37.6 million as of June 30, 2020, and $40.6 million as of December 31, 2019, primarily related to property held for sale, as well as inventory, goodwill, and property of a disposal group held for sale. We had assets held for sale in discontinued operations of $8.0 million as of June 30, 2020, and $8.0 million as of December 31, 2019, primarily related to property held for sale. Assets held for sale are included in Other Current Assets in our Unaudited Condensed Consolidated Balance Sheets.

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Quantitative Information about Level 3 Fair Value Measurements

Description		Fair Value at March 31, 2020				Valuation Technique		Unobservable Input		Range (Average)
Franchise rights		$	24.6			Discounted cash flow		Weighted average cost of capital		8.5%
								Discount rate		11.1% - 14.3% (12.1%)
								Long-term revenue growth rate		2.0%
								Long-term pretax income margin		0.6% - 2.8% (1.4%)
								Contributory asset charges		4.2% - 12.1% (6.2%)

12.	COMMITMENTS AND CONTINGENCIES

Legal 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, wage and hour and other employment-related lawsuits, and actions brought by governmental authorities. Some of these lawsuits purport or may be determined to be class or collective actions and seek substantial damages or injunctive relief, or both, and some may remain unresolved for several years. We establish accruals for specific legal proceedings when it is considered probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Our accruals for loss contingencies are reviewed quarterly and adjusted as additional information becomes available. We disclose the amount accrued if material or if such disclosure is necessary for our financial statements to not be misleading. If a loss is not both probable and reasonably estimable, or if an exposure to loss exists in excess of the amount accrued, we assess whether there is at least a reasonable possibility that a loss, or additional loss, may have been incurred. If there is a reasonable possibility that a loss, or additional loss, may have been incurred, we disclose the estimate of the possible loss or range of loss if it is material or a statement that such an estimate cannot be made. Our evaluation of whether a loss is reasonably possible or probable is based on our assessment and consultation with legal counsel regarding the ultimate outcome of the matter.

As of June 30, 2020 and 2019, we have accrued for the potential impact of loss contingencies that are probable and reasonably estimable, and there was no indication of a reasonable possibility that a material loss, or additional material loss, may have been incurred. We do not believe that the ultimate resolution of these matters will have a material adverse effect on our results of operations, financial condition, or cash flows. However, the results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material adverse effect on our results of operations, financial condition, or cash flows.

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 store 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 store 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 and our subsidiaries in connection with such leases. 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, we estimate that lessee rental payment obligations during the remaining terms of these leases with expirations ranging from 2022 to 2034 are approximately $13 million at June 30, 2020. We do not have any material known commitments that we or our subsidiaries will be called on to perform under any such assigned leases or subleases at June 30, 2020. There can be no assurance that any performance by

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AutoNation or its subsidiaries required under these leases would not have a material adverse effect on our business, financial condition, and cash flows.

At June 30, 2020, surety bonds, letters of credit, and cash deposits totaled $102.9 million, of which $39.7 million were 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.

13.	BUSINESS AND CREDIT CONCENTRATIONS

We own and operate franchised automotive stores in the United States pursuant to franchise agreements with vehicle manufacturers. During the six months ended June 30, 2020, approximately 63% of our total retail new vehicle unit sales was generated by our stores in Florida, Texas, and California. We are subject to a concentration of risk in the event of financial distress of or other adverse event related to a major vehicle manufacturer or related lender or supplier. The core brands of vehicles that we sell, representing approximately 89% of the new vehicles sold during the six months ended June 30, 2020, are manufactured by Toyota (including Lexus), Honda, Ford, General Motors, FCA US, Mercedes-Benz, BMW, and Volkswagen (including Audi and Porsche). Our business could be materially adversely impacted by a bankruptcy of or other adverse event related to a major vehicle manufacturer or related lender or supplier.

We had receivables from manufacturers or distributors of $152.4 million at June 30, 2020, and $234.5 million at December 31, 2019. Additionally, a large portion of our contracts-in-transit included in Receivables, net, in the accompanying Unaudited Condensed Consolidated Balance Sheets, are due from automotive manufacturers’ captive finance subsidiaries, which provide financing directly to our new and used vehicle customers. Concentrations of credit risk with respect to non-manufacturer trade receivables are limited due to the wide variety of customers and markets in which our products are sold as well as their dispersion across many different geographic areas in the United States. Consequently, at June 30, 2020, we do not consider AutoNation to have any significant non-manufacturer concentrations of credit risk.

14.	SEGMENT INFORMATION

At June 30, 2020 and 2019, we had three reportable segments: (1) Domestic, (2) Import, and (3) Premium Luxury. Our Domestic segment is comprised of retail automotive franchises that sell new vehicles manufactured by Ford, General Motors, and FCA US. Our Import segment is comprised of retail automotive franchises that sell new vehicles manufactured primarily by Toyota, Honda, Subaru, and Nissan. Our Premium Luxury segment is comprised of retail automotive franchises that sell new vehicles manufactured primarily by Mercedes-Benz, BMW, Audi, Lexus, and Jaguar Land Rover. The franchises in each segment also sell used vehicles, parts and automotive repair and maintenance services, and automotive finance and insurance products.

Corporate and other is comprised of our other businesses, including collision centers, auction operations, AutoNation USA stand-alone used vehicle sales and service centers, and parts distribution centers, all of which generate revenues but do not meet the quantitative thresholds for determining reportable segments, as well as unallocated corporate overhead expenses and retrospective commissions for certain finance and insurance transactions that we arrange under agreements with third parties.

The reportable segments identified above are the business activities of the Company for which discrete financial information is available and for which operating results are regularly reviewed by our chief operating decision maker to allocate resources and assess performance. Our chief operating decision maker is our Chief Executive Officer.

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The following table provides information on revenues from external customers and segment income of our reportable segments:

	Three Months Ended												Three Months Ended
	June 30, 2020												June 30, 2019
	Domestic				Import				Premium Luxury				Domestic				Import				Premium Luxury
Revenues from external customers	$	1,486.0			$	1,325.3			$	1,564.8			$	1,707.3			$	1,627.3			$	1,820.9
Segment income (1)	$	82.1			$	88.3			$	89.2			$	65.9			$	81.4			$	95.3
	Six Months Ended												Six Months Ended
	June 30, 2020												June 30, 2019
	Domestic				Import				Premium Luxury				Domestic				Import				Premium Luxury
Revenues from external customers	$	2,969.5			$	2,687.4			$	3,181.6			$	3,276.1			$	3,123.4			$	3,555.0
Segment income (1)	$	136.2			$	154.2			$	169.4			$	122.1			$	154.0			$	179.6
(1) Segment income represents income for each of our reportable segments and is defined as operating income less floorplan interest expense.

The following is a reconciliation of total segment income for reportable segments to our consolidated income from continuing operations before income taxes:

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2020				2019				2020				2019
Total segment income for reportable segments		$	259.6			$	242.6			$	459.8			$	455.7
Corporate and other		(74.5		)		(76.5		)		(519.5		)		(137.8		)
Other interest expense		(23.2		)		(27.7		)		(46.7		)		(55.5		)
Interest income		0.1				0.1				0.2				0.3
Other income (loss), net		214.5				(0.3		)		211.5				1.6
Income from continuing operations before income taxes		$	376.5			$	138.2			$	105.3			$	264.3

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(1)	As limited by the maximum consolidated leverage ratio contained in our credit agreement. The credit agreement also contains an accordion feature that allows us, subject to credit availability and certain other conditions, to increase the amount of the revolving credit facility, together with any added term loans, by up to $500.0 million in the aggregate.

(2)	At June 30, 2020, we had $39.7 million of letters of credit outstanding. In addition, we use the revolving credit facility under our credit agreement as a liquidity backstop for borrowings under our commercial paper program. We had no commercial paper notes outstanding at June 30, 2020. See Note 7 of the Notes to Unaudited Condensed Consolidated Financial Statements for more information.

(3)	Based on the eligible used vehicle inventory that could have been pledged as collateral. See Note 5 of the Notes to Unaudited Condensed Consolidated Financial Statements for more information.

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(1)	Includes accrued construction in progress and excludes property associated with leases entered into during the year.

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The automotive retail industry is sensitive to changing economic conditions and various other factors, including, but not limited to, fuel prices, interest rates, and tariffs. Our business and results of operations are substantially dependent on new and used vehicle sales levels in the United States and in our particular geographic markets, as well as the gross profit margins that we can achieve on our sales of vehicles, all of which are very difficult to predict.

•	Our new vehicle sales are impacted by the incentive, marketing, and other programs of vehicle manufacturers.

•	We are dependent upon the success and continued financial viability of the vehicle manufacturers and distributors with which we hold franchises.

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•	We are investing significantly in our brand extension strategy, and if our strategic initiatives are not successful, we will have incurred significant expenses without the benefit of improved financial results.

•	If we are not able to maintain and enhance our retail brands and reputation or to attract consumers to our own digital channels, or if events occur that damage our retail brands, reputation, or sales channels, our business and financial results may be harmed.

•	New laws, regulations, or governmental policies regarding fuel economy and greenhouse gas emission standards, or changes to existing standards, may affect vehicle manufacturers’ ability to produce cost-effective vehicles or vehicles that consumers demand, which could adversely impact our business, results of operations, financial condition, cash flow, and prospects.

•	Natural disasters and adverse weather events can disrupt our business.

•	We are subject to restrictions imposed by, and significant influence from, vehicle manufacturers that may adversely impact our business, financial condition, results of operations, cash flows, and prospects, including our ability to acquire additional stores.

•	We are subject to numerous legal and administrative proceedings, which, if the outcomes are adverse to us, could materially adversely affect our business, results of operations, financial condition, cash flows, and prospects.

•	Our operations are subject to extensive governmental laws and regulations. If we are found to be in purported violation of or subject to liabilities under any of these laws or regulations, or if new laws or regulations are enacted that adversely affect our operations, our business, operating results, and prospects could suffer.

•	A failure of our information systems or any security breach or unauthorized disclosure of confidential information could have a material adverse effect on our business.

•	Our debt agreements contain certain financial ratios and other restrictions on our ability to conduct our business, and our substantial indebtedness could adversely affect our financial condition and operations and prevent us from fulfilling our debt service obligations.

•	We are subject to interest rate risk in connection with our vehicle floorplan payables, revolving credit facility, and commercial paper program that could have a material adverse effect on our profitability.

•	Goodwill and other intangible assets comprise a significant portion of our total assets. We must test our goodwill and other intangible assets for impairment at least annually, which could result in a material, non-cash write-down of goodwill or franchise rights and could have a material adverse impact on our results of operations and shareholders’ equity.

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Our minority equity investment in Vroom Inc., which has a readily determinable fair value, is required to be measured at fair value. Fluctuations in its fair value could result in a loss, which could adversely impact our results of operations and financial condition. The carrying value of our minority equity investment in Waymo, which does not have a readily determinable fair value, is required to be adjusted for observable price changes or impairments, both of which could adversely impact our results of operations and financial condition.

•	Our largest stockholders, as a result of their ownership stakes in us, may have the ability to exert substantial influence over actions to be taken or approved by our stockholders. In addition, future share repurchases and fluctuations in the levels of ownership of our largest stockholders could impact the volume of trading, liquidity, and market price of our common stock.

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•	AutoNation’s Twitter feed (www.twitter.com/autonation)

•	Mike Jackson’s Twitter feed (www.twitter.com/CEOMikeJackson)

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(1)

Our Board of Directors from time to time authorizes the repurchase of shares of our common stock up to a certain monetary limit. As of June 30, 2020, $139.0 million remained available under our stock repurchase authorization limit. The Board’s authorization has no expiration date. We temporarily suspended our share repurchase program at the end of the first quarter of 2020 in light of the COVID-19 pandemic. This suspension does not impact our remaining Board authorization, and we may in the future resume the program when deemed appropriate.

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