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Consolidating Condensed Financial Information (Tables) | 9 Months Ended
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Sep. 30, 2012
Consolidating Condensed Financial Information |
CONDENSED CONSOLIDATING BALANCE SHEET |
CONDENSED CONSOLIDATING BALANCE SHEET September 30, 2012
|  | Total Company |  | Eliminations |  | Penske Automotive Group |  | Guarantor Subsidiaries |  | Non-Guarantor Subsidiaries |
|  | (In thousands) |
Cash and cash equivalents |  | $ | 25,935 |  | $ | — |  | $ | — |  | $ | 17,573 |  | $ | 8,362 |
Accounts receivable, net |  | 505,770 |  | (335,225 | ) | 335,225 |  | 251,951 |  | 253,819 |
Inventories |  | 1,864,773 |  | — |  | — |  | 1,088,681 |  | 776,092 |
Other current assets |  | 91,204 |  | — |  | 4,359 |  | 39,216 |  | 47,629 |
Assets held for sale |  | 38,005 |  | — |  | — |  | 14,261 |  | 23,744 |
Total current assets |  | 2,525,687 |  | (335,225 | ) | 339,584 |  | 1,411,682 |  | 1,109,646 |
Property and equipment, net |  | 961,488 |  | — |  | 4,527 |  | 593,139 |  | 363,822 |
Intangible assets |  | 1,210,959 |  | — |  | — |  | 705,790 |  | 505,169 |
Equity method investments |  | 304,101 |  | — |  | 256,258 |  | — |  | 47,843 |
Other long-term assets |  | 21,945 |  | (1,416,874 | ) | 1,430,869 |  | 5,378 |  | 2,572 |
Total assets |  | $ | 5,024,180 |  | $ | (1,752,099 | ) | $ | 2,031,238 |  | $ | 2,715,989 |  | $ | 2,029,052 |
Floor plan notes payable |  | $ | 1,254,895 |  | $ | — |  | $ | — |  | $ | 709,549 |  | $ | 545,346 |
Floor plan notes payable — non-trade |  | 704,280 |  | — |  | 100,255 |  | 335,054 |  | 268,971 |
Accounts payable |  | 275,032 |  | — |  | 2,447 |  | 111,342 |  | 161,243 |
Accrued expenses |  | 259,146 |  | (335,225 | ) | 145 |  | 142,064 |  | 452,162 |
Current portion of long-term debt |  | 14,929 |  | — |  | — |  | 3,746 |  | 11,183 |
Liabilities held for sale |  | 34,124 |  | — |  | — |  | 11,038 |  | 23,086 |
Total current liabilities |  | 2,542,406 |  | (335,225 | ) | 102,847 |  | 1,312,793 |  | 1,461,991 |
Long-term debt |  | 815,918 |  | (38,382 | ) | 660,000 |  | 75,129 |  | 119,171 |
Deferred tax liabilities |  | 231,999 |  | — |  | — |  | 205,955 |  | 26,044 |
Other long-term liabilities |  | 165,466 |  | — |  | — |  | 93,724 |  | 71,742 |
Total liabilities |  | 3,755,789 |  | (373,607 | ) | 762,847 |  | 1,687,601 |  | 1,678,948 |
Total equity |  | 1,268,391 |  | (1,378,492 | ) | 1,268,391 |  | 1,028,388 |  | 350,104 |
Total liabilities and equity |  | $ | 5,024,180 |  | $ | (1,752,099 | ) | $ | 2,031,238 |  | $ | 2,715,989 |  | $ | 2,029,052 |
CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2011
|  | Total Company |  | Eliminations |  | Penske Automotive Group |  | Guarantor Subsidiaries |  | Non-Guarantor Subsidiaries |
|  | (In thousands) |
Cash and cash equivalents |  | $ | 28,676 |  | $ | — |  | $ | — |  | $ | 27,249 |  | $ | 1,427 |
Accounts receivable, net |  | 438,769 |  | (297,782 | ) | 305,386 |  | 281,689 |  | 149,476 |
Inventories |  | 1,572,568 |  | — |  | — |  | 894,246 |  | 678,322 |
Other current assets |  | 80,179 |  | — |  | 2,306 |  | 40,321 |  | 37,552 |
Assets held for sale |  | 81,122 |  | — |  | — |  | 36,642 |  | 44,480 |
Total current assets |  | 2,201,314 |  | (297,782 | ) | 307,692 |  | 1,280,147 |  | 911,257 |
Property and equipment, net |  | 856,674 |  | — |  | 6,730 |  | 547,731 |  | 302,213 |
Intangible assets |  | 1,132,181 |  | — |  | — |  | 699,453 |  | 432,728 |
Equity method investments |  | 298,640 |  | — |  | 246,658 |  | — |  | 51,982 |
Other long-term assets |  | 13,490 |  | (1,360,808 | ) | 1,369,182 |  | 3,381 |  | 1,735 |
Total assets |  | $ | 4,502,299 |  | $ | (1,658,590 | ) | $ | 1,930,262 |  | $ | 2,530,712 |  | $ | 1,699,915 |
Floor plan notes payable |  | $ | 977,548 |  | $ | — |  | $ | — |  | $ | 560,999 |  | $ | 416,549 |
Floor plan notes payable — non-trade |  | 691,888 |  | — |  | 90,892 |  | 335,621 |  | 265,375 |
Accounts payable |  | 220,538 |  | — |  | 1,633 |  | 112,805 |  | 106,100 |
Accrued expenses |  | 201,179 |  | (297,782 | ) | — |  | 99,092 |  | 399,869 |
Current portion of long-term debt |  | 3,414 |  | — |  | — |  | 3,414 |  | — |
Liabilities held for sale |  | 55,820 |  | — |  | — |  | 17,818 |  | 38,002 |
Total current liabilities |  | 2,150,387 |  | (297,782 | ) | 92,525 |  | 1,129,749 |  | 1,225,895 |
Long-term debt |  | 846,777 |  | (38,073 | ) | 697,324 |  | 77,060 |  | 110,466 |
Deferred tax liabilities |  | 217,902 |  | — |  | — |  | 198,348 |  | 19,554 |
Other long-term liabilities |  | 146,820 |  | — |  | — |  | 92,613 |  | 54,207 |
Total liabilities |  | 3,361,886 |  | (335,855 | ) | 789,849 |  | 1,497,770 |  | 1,410,122 |
Total equity |  | 1,140,413 |  | (1,322,735 | ) | 1,140,413 |  | 1,032,942 |  | 289,793 |
Total liabilities and equity |  | $ | 4,502,299 |  | $ | (1,658,590 | ) | $ | 1,930,262 |  | $ | 2,530,712 |  | $ | 1,699,915 |
CONDENSED CONSOLIDATING STATEMENT OF INCOME |
CONDENSED CONSOLIDATING STATEMENT OF INCOME Three Months Ended September 30, 2012
|  | Total Company |  | Eliminations |  | Penske Automotive Group |  | Guarantor Subsidiaries |  | Non-Guarantor Subsidiaries |
|  | (In thousands) |
Revenues |  | $ | 3,401,409 |  | $ | — |  | $ | — |  | $ | 2,008,394 |  | $ | 1,393,015 |
Cost of sales |  | 2,890,413 |  | — |  | — |  | 1,697,032 |  | 1,193,381 |
Gross profit |  | 510,996 |  | — |  | — |  | 311,362 |  | 199,634 |
Selling, general and administrative expenses |  | 409,432 |  | — |  | 5,073 |  | 245,553 |  | 158,806 |
Depreciation |  | 14,037 |  | — |  | 328 |  | 7,661 |  | 6,048 |
Operating income (loss) |  | 87,527 |  | — |  | (5,401 | ) | 58,148 |  | 34,780 |
Floor plan interest expense |  | (10,055 | ) | — |  | (2,322 | ) | (4,320 | ) | (3,413 | )
Other interest expense |  | (11,689 | ) | — |  | (7,695 | ) | (804 | ) | (3,190 | )
Equity in earnings of affiliates |  | 8,814 |  | — |  | 7,784 |  | — |  | 1,030 |
Equity in earnings of subsidiaries |  | — |  | (81,949 | ) | 81,949 |  | — |  | — |
Debt redemption costs |  | (17,753 | ) | — |  | (17,753 | ) | — |  | — |
Income (loss) from continuing operations before income taxes |  | 56,844 |  | (81,949 | ) | 56,562 |  | 53,024 |  | 29,207 |
Income taxes |  | (15,308 | ) | 22,179 |  | (15,308 | ) | (14,717 | ) | (7,462 | )
Income (loss) from continuing operations |  | 41,536 |  | (59,770 | ) | 41,254 |  | 38,307 |  | 21,745 |
(Loss) income from discontinued operations, net of tax |  | (223 | ) | 223 |  | (223 | ) | 242 |  | (465 | )
Net income (loss) |  | 41,313 |  | (59,547 | ) | 41,031 |  | 38,549 |  | 21,280 |
Other comprehensive income (loss), net of tax |  | 17,948 |  | (16,882 | ) | 17,948 |  | 175 |  | 16,707 |
Comprehensive income |  | 59,261 |  | (76,429 | ) | 58,979 |  | 38,724 |  | 37,987 |
Less: Comprehensive income attributable to non-controlling interest |  | 489 |  | (207 | ) | 207 |  | — |  | 489 |
Comprehensive income attributable to Penske Automotive Group common stockholders |  | $ | 58,772 |  | $ | (76,222 | ) | $ | 58,772 |  | $ | 38,724 |  | $ | 37,498 |
CONDENSED CONSOLIDATING STATEMENT OF INCOME Three Months Ended September 30, 2011
|  | Total Company |  | Eliminations |  | Penske Automotive Group |  | Guarantor Subsidiaries |  | Non-Guarantor Subsidiaries |
|  | (In thousands) |
Revenues |  | $ | 2,898,441 |  | $ | — |  | $ | — |  | $ | 1,704,606 |  | $ | 1,193,835 |
Cost of sales |  | 2,437,678 |  | — |  | — |  | 1,417,915 |  | 1,019,763 |
Gross profit |  | 460,763 |  | — |  | — |  | 286,691 |  | 174,072 |
Selling, general and administrative expenses |  | 369,783 |  | — |  | 4,381 |  | 225,818 |  | 139,584 |
Depreciation |  | 12,427 |  | — |  | 471 |  | 6,655 |  | 5,301 |
Operating income (loss) |  | 78,553 |  | — |  | (4,852 | ) | 54,218 |  | 29,187 |
Floor plan interest expense |  | (6,837 | ) | — |  | (449 | ) | (3,194 | ) | (3,194 | )
Other interest expense |  | (11,153 | ) | — |  | (6,347 | ) | (988 | ) | (3,818 | )
Debt discount amortization |  | — |  | — |  | — |  | — |  | — |
Equity in earnings (losses) of affiliates |  | 9,623 |  | — |  | 7,359 |  | 825 |  | 1,439 |
Equity in earnings of subsidiaries |  | — |  | (74,137 | ) | 74,137 |  | — |  | — |
Income (loss) from continuing operations before income taxes |  | 70,186 |  | (74,137 | ) | 69,848 |  | 50,861 |  | 23,614 |
Income taxes |  | (13,246 | ) | 14,064 |  | (13,246 | ) | (7,281 | ) | (6,783 | )
Income (loss) from continuing operations |  | 56,940 |  | (60,073 | ) | 56,602 |  | 43,580 |  | 16,831 |
(Loss) income from discontinued operations, net of tax |  | (895 | ) | 895 |  | (895 | ) | (754 | ) | (141 | )
Net income (loss) |  | 56,045 |  | (59,178 | ) | 55,707 |  | 42,826 |  | 16,690 |
Other comprehensive income (loss), net of tax |  | (25,827 | ) | 26,327 |  | (25,827 | ) | (5,379 | ) | (20,948 | )
Comprehensive income |  | 30,218 |  | (32,851 | ) | 29,880 |  | 37,447 |  | (4,258 | )
Less: Comprehensive income attributable to non-controlling interest |  | 338 |  | — |  | — |  | — |  | 338 |
Comprehensive income attributable to Penske Automotive Group common stockholders |  | $ | 29,880 |  | $ | (32,851 | ) | $ | 29,880 |  | $ | 37,447 |  | $ | (4,596 | )
CONDENSED CONSOLIDATING STATEMENT OF INCOME Nine Months Ended September 30, 2012
|  | Total Company |  | Eliminations |  | Penske Automotive Group |  | Guarantor Subsidiaries |  | Non-Guarantor Subsidiaries |
|  | (In thousands) |
Revenues |  | $ | 10,006,631 |  | $ | — |  | $ | — |  | $ | 5,852,620 |  | $ | 4,154,011 |
Cost of sales |  | 8,477,057 |  | — |  | — |  | 4,923,776 |  | 3,553,281 |
Gross profit |  | 1,529,574 |  | — |  | — |  | 928,844 |  | 600,730 |
Selling, general and administrative expenses |  | 1,216,231 |  | — |  | 14,408 |  | 732,673 |  | 469,150 |
Depreciation |  | 41,013 |  | — |  | 936 |  | 22,258 |  | 17,819 |
Operating income (loss) |  | 272,330 |  | — |  | (15,344 | ) | 173,913 |  | 113,761 |
Floor plan interest expense |  | (29,675 | ) | — |  | (6,774 | ) | (12,309 | ) | (10,592 | )
Other interest expense |  | (35,474 | ) | — |  | (21,986 | ) | (2,668 | ) | (10,820 | )
Equity in earnings (losses) of affiliates |  | 21,392 |  | — |  | 18,538 |  | — |  | 2,854 |
Equity in earnings of subsidiaries |  | — |  | (253,149 | ) | 253,149 |  | — |  | — |
Debt redemption costs |  | (17,753 | ) | — |  | (17,753 | ) | — |  | — |
Income (loss) from continuing operations before income taxes |  | 210,820 |  | (253,149 | ) | 209,830 |  | 158,936 |  | 95,203 |
Income taxes |  | (69,052 | ) | 83,308 |  | (69,052 | ) | (59,469 | ) | (23,839 | )
Income (loss) from continuing operations |  | 141,768 |  | (169,841 | ) | 140,778 |  | 99,467 |  | 71,364 |
(Loss) income from discontinued operations, net of tax |  | (3,837 | ) | 3,837 |  | (3,837 | ) | (1,755 | ) | (2,082 | )
Net income (loss) |  | 137,931 |  | (166,004 | ) | 136,941 |  | 97,712 |  | 69,282 |
Other comprehensive income (loss), net of tax |  | 17,758 |  | (15,150 | ) | 17,758 |  | (74 | ) | 15,224 |
Comprehensive income |  | 155,689 |  | (181,154 | ) | 154,699 |  | 97,638 |  | 84,506 |
Less: Comprehensive income attributable to non-controlling interest |  | 1,197 |  | (207 | ) | 207 |  | — |  | 1,197 |
Comprehensive income attributable to Penske Automotive Group common stockholders |  | $ | 154,492 |  | $ | (180,947 | ) | $ | 154,492 |  | $ | 97,638 |  | $ | 83,309 |
CONDENSED CONSOLIDATING STATEMENT OF INCOME Nine Months Ended September 30, 2011
|  | Total Company |  | Eliminations |  | Penske Automotive Group |  | Guarantor Subsidiaries |  | Non-Guarantor Subsidiaries |
|  | (In thousands) |
Revenues |  | $ | 8,466,560 |  | $ | — |  | $ | — |  | $ | 4,902,510 |  | $ | 3,564,050 |
Cost of sales |  | 7,112,376 |  | — |  | — |  | 4,071,715 |  | 3,040,661 |
Gross profit |  | 1,354,184 |  | — |  | — |  | 830,795 |  | 523,389 |
Selling, general and administrative expenses |  | 1,098,132 |  | — |  | 14,120 |  | 671,606 |  | 412,406 |
Depreciation |  | 36,132 |  | — |  | 1,013 |  | 19,450 |  | 15,669 |
Operating income (loss) |  | 219,920 |  | — |  | (15,133 | ) | 139,739 |  | 95,314 |
Floor plan interest expense |  | (20,617 | ) | — |  | (911 | ) | (10,414 | ) | (9,292 | )
Other interest expense |  | (32,889 | ) | — |  | (18,581 | ) | (2,237 | ) | (12,071 | )
Debt discount amortization |  | (1,718 | ) | — |  | (1,718 | ) | — |  | — |
Equity in earnings (losses) of affiliates |  | 17,527 |  | — |  | 14,711 |  | 825 |  | 1,991 |
Equity in earnings of subsidiaries |  | — |  | (202,948 | ) | 202,948 |  | — |  | — |
Income (loss) from continuing operations before income taxes |  | 182,223 |  | (202,948 | ) | 181,316 |  | 127,913 |  | 75,942 |
Income taxes |  | (49,289 | ) | 55,235 |  | (49,289 | ) | (33,581 | ) | (21,654 | )
Income (loss) from continuing operations |  | 132,934 |  | (147,713 | ) | 132,027 |  | 94,332 |  | 54,288 |
(Loss) income from discontinued operations, net of tax |  | (2,833 | ) | 2,833 |  | (2,833 | ) | (2,351 | ) | (482 | )
Net income (loss) |  | 130,101 |  | (144,880 | ) | 129,194 |  | 91,981 |  | 53,806 |
Other comprehensive income (loss), net of tax |  | (10,782 | ) | 10,301 |  | (10,782 | ) | (9,093 | ) | (1,208 | )
Comprehensive income |  | 119,319 |  | (134,579 | ) | 118,412 |  | 82,888 |  | 52,598 |
Less: Comprehensive income attributable to non-controlling interest |  | 907 |  | — |  | — |  | — |  | 907 |
Comprehensive income attributable to Penske Automotive Group common stockholders |  | $ | 118,412 |  | $ | (134,579 | ) | $ | 118,412 |  | $ | 82,888 |  | $ | 51,691 |
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS |
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Nine Months Ended September 30, 2012
|  | Total Company |  | Penske Automotive Group |  | Guarantor Subsidiaries |  | Non-Guarantor Subsidiaries |
|  | (In thousands) |
Net cash from continuing operating activities |  | $ | 264,612 |  | $ | 95,748 |  | $ | 34,840 |  | $ | 134,024 |
Investing activities: |  |  |  |  |  |  |  |  |
Purchase of equipment and improvements |  | (96,447 | ) | (766 | ) | (67,192 | ) | (28,489 | )
Proceeds from sale-leaseback transactions |  | 1,584 |  | — |  | — |  | 1,584 |
Dealership acquisitions, net |  | (137,805 | ) | — |  | (3,416 | ) | (134,389 | )
Other |  | 3,496 |  | (3,812 | ) | — |  | 7,308 |
Net cash from continuing investing activities |  | (229,172 | ) | (4,578 | ) | (70,608 | ) | (153,986 | )
Financing activities: |  |  |  |  |  |  |  |  |
Issuance of 5.75% senior subordinated notes |  | 550,000 |  | 550,000 |  | — |  | — |
Repurchase of 7.75% senior subordinated notes |  | (390,755 | ) | (390,755 | ) | — |  | — |
Repurchase of 3.5% senior subordinated convertible notes |  | (62,687 | ) | (62,687 | ) |  |  |  |
Net borrowings (repayments) of other long-term debt |  | (133,913 | ) | (149,000 | ) | (1,598 | ) | 16,685 |
Net borrowings (repayments) of floor plan notes payable — non-trade |  | 29,681 |  | 9,363 |  | 11,179 |  | 9,139 |
Repurchase of common stock |  | (9,829 | ) | (9,829 | ) | — |  | — |
Dividends |  | (29,760 | ) | (29,760 | ) | — |  | — |
Payment of deferred financing fees |  | (8,502 | ) | (8,502 | ) | — |  | — |
Distributions from (to) parent |  | — |  | — |  | 4,747 |  | (4,747 | )
Net cash from continuing financing activities |  | (55,765 | ) | (91,170 | ) | 14,328 |  | 21,077 |
Net cash from discontinued operations |  | 17,584 |  | — |  | 11,764 |  | 5,820 |
Net change in cash and cash equivalents |  | (2,741 | ) | — |  | (9,676 | ) | 6,935 |
Cash and cash equivalents, beginning of period |  | 28,676 |  | — |  | 27,249 |  | 1,427 |
Cash and cash equivalents, end of period |  | $ | 25,935 |  | $ | — |  | $ | 17,573 |  | $ | 8,362 |
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Nine Months Ended September 30, 2011
|  | Total Company |  | Penske Automotive Group |  | Guarantor Subsidiaries |  | Non-Guarantor Subsidiaries |
|  | (In thousands) |
Net cash from continuing operating activities |  | $ | 180,110 |  | $ | (39,647 | ) | $ | 226,147 |  | $ | (6,390 | )
Investing activities: |  |  |  |  |  |  |  |  |
Purchase of equipment and improvements |  | (79,770 | ) | (1,972 | ) | (44,629 | ) | (33,169 | )
Dealership acquisitions, net |  | (232,106 | ) | — |  | (230,426 | ) | (1,680 | )
Other |  | 2,865 |  | — |  | — |  | 2,865 |
Net cash from continuing investing activities |  | (309,011 | ) | (1,972 | ) | (275,055 | ) | (31,984 | )
Financing activities: |  |  |  |  |  |  |  |  |
Repurchase of 3.5% senior subordinated convertible notes |  | (87,278 | ) | (87,278 | ) | — |  | — |
Net borrowings (repayments) of other long-term debt |  | 151,807 |  | 120,000 |  | 57,015 |  | (25,208 | )
Net borrowings (repayments) of floor plan notes payable — non-trade |  | 98,131 |  | 64,008 |  | (32,995 | ) | 67,118 |
Proceeds from exercises of options, including excess tax benefit |  | 3,018 |  | 3,018 |  | — |  | — |
Repurchase of common stock |  | (44,263 | ) | (44,263 | ) | — |  | — |
Dividends |  | (13,866 | ) | (13,866 | ) | — |  | — |
Distributions from (to) parent |  | — |  | — |  | 5,572 |  | (5,572 | )
Net cash from continuing financing activities |  | 107,549 |  | 41,619 |  | 29,592 |  | 36,338 |
Net cash from discontinued operations |  | 11,347 |  | — |  | 10,151 |  | 1,196 |
Net change in cash and cash equivalents |  | (10,005 | ) | — |  | (9,165 | ) | (840 | )
Cash and cash equivalents, beginning of period |  | 19,904 |  | — |  | 15,411 |  | 4,493 |
Cash and cash equivalents, end of period |  | $ | 9,899 |  | $ | — |  | $ | 6,246 |  | $ | 3,653 |

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