AutoNation : Q2 2021

AUTONATION, INC.

RECONCILIATION OF CERTAIN NON-GAAP FINANCIAL MEASURES

($ in millions, except per share data)

The Company may from time to time publicly disclose certain non-GAAP financial measures as defined under SEC rules, which exclude certain items as disclosed in the financial tables below. As required by SEC rules, the Company provides reconciliations of these measures to the most directly comparable GAAP measures. The Company believes that these non-GAAP financial measures improve the transparency of the Company's disclosure, provide a meaningful presentation of the Company's results excluding the impact of items not related to the Company's ongoing core business operations, and improve the period-to-period comparability of the Company's results from its core business operations. Non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated and presented in accordance with GAAP.

Comparable Basis Reconciliations(1)
																	Three Months Ended June 30,
								Income from Continuing																				Diluted Earnings Per
									Operations Before
			Operating Income			Income Taxes		Income Tax Provision(2)		Effective Tax Rate			Net Income			Share(3)
			2021			2020			2021			2020				2021				2020		2021		2020			2021			2020			2021			2020
As reported																								$	384.8	$	279.8	$	4.83	$	3.18
Discontinued operations, net of income taxes																										0.1			0.1	$	-	$	-
From continuing operations, as reported	$	530.2	$	201.4	$	511.6		$	376.5		$	126.7	$	96.6	24.8%	25.7%			384.9			279.9	$	4.83	$	3.18
Gain on equity investment		-			-			-			(214.7)				-				(54.2)							-			(160.5)	$	-	$	(1.82)
Executive separation costs		-			5.5			-			5.5				-				1.0							-			4.5	$	-	$	0.05
Adjusted	$	530.2		$	206.9		$	511.6		$	167.3			$	126.7			$	43.4	24.8%	25.9%		$	384.9		$	123.9	$	4.83	$	1.41
				Three Months Ended June 30,
								SG&A as a Percentage of
			SG&A				Gross Profit (%)
			2021			2020			2021			2020
As reported	$	748.9	$	547.9			56.5			68.9
Excluding executive separation costs		-			5.5
Adjusted	$	748.9	$	542.4			56.5			68.2
																		Six Months Ended June 30,
								Income from Continuing																				Diluted Earnings Per
									Operations Before
		Operating Income (Loss)			Income Taxes		Income Tax Provision(2)		Effective Tax Rate			Net Income			Share(3)
			2021			2020			2021			2020				2021				2020		2021		2020			2021			2020			2021			2020
As reported																								$	624.2	$	47.5	$	7.63	$	0.53
Discontinued operations, net of income taxes																										0.2			0.2	$	-	$	-
From continuing operations, as reported	$	867.1	$	(17.9)	$	828.9		$	105.3		$	204.5	$	57.6	24.7%	54.7%			624.4			47.7	$	7.63	$	0.54
Gain on equity investment		-			-			(7.5)			(214.7)				(1.8)				(54.2)							(5.7)			(160.5)	$	(0.07)	$	(1.80)
Executive separation costs		-			5.5			-			5.5				-				1.0							-			4.5	$	-	$	0.05
Goodwill and franchise rights impairment		-			375.8			-			375.8				-				67.4							-			308.4	$	-	$	3.47
Asset impairments and net gains on store dispositions		-			8.4			-			8.4				-				2.2							-			6.2	$	-	$	0.07
Adjusted	$	867.1		$	371.8		$	821.4		$	280.3			$	202.7			$	74.0	24.7%	26.4%		$	618.7		$	206.3	$	7.56	$	2.32
					Six Months Ended June 30,
								SG&A as a Percentage of
			SG&A				Gross Profit (%)
			2021			2020			2021			2020
As reported	$	1,396.8	$	1,148.6			59.2			71.4
Excluding executive separation costs		-			5.5
Adjusted	$	1,396.8		$	1,143.1			59.2			71.1

1. Please refer to the "Non-GAAP Financial Measures" section of the Press Release.
2. Tax expense is determined based on the amount of additional taxes or tax benefits associated with each individual item.
3. Diluted earnings per share amounts are calculated discretely and therefore may not add up to the total due to rounding.