13. Condensed Consolidating Financial Information

The following tables include condensed consolidating financial information as of September 30, 2014 and December 31, 2013 and for the three and nine month periods ended September 30, 2014 and 2013 for Penske Automotive Group, Inc. (as the issuer of the 5.75% Notes), guarantor subsidiaries and non-guarantor subsidiaries (primarily representing non-U.S. entities). Guarantor subsidiaries are directly or indirectly 100% owned by PAG, and the guarantees are full and unconditional, and jointly and several. The condensed consolidating financial information includes certain allocations of balance sheet, income statement and cash flow items which are not necessarily indicative of the financial position, results of operations and cash flows of these entities on a stand-alone basis.

CONDENSED CONSOLIDATING BALANCE SHEET
September 30, 2014

	Total Company		Eliminations			Penske Automotive Group		Guarantor Subsidiaries		Non-Guarantor Subsidiaries
	(In millions)

Cash and cash equivalents	$	150.5	$	—		$	—	$	—	$	150.5
Accounts receivable, net	643.8		(405.2		)	405.2		311.9		331.9
Inventories	2,479.0		—			—		1,368.2		1,110.8
Other current assets	100.4		—			3.9		30.3		66.2
Assets held for sale	45.6		—			—		10.4		35.2

Total current assets	3,419.3		(405.2		)	409.1		1,720.8		1,694.6
Property and equipment, net	1,375.1		—			3.7		885.7		485.7
Intangible assets	1,482.7		—			—		826.6		656.1
Equity method investments	386.5		—			316.8		—		69.7
Other long-term assets	18.7		(1,867.3		)	1,878.0		5.4		2.6

Total assets	$	6,682.3	$	(2,272.5	)	$	2,607.6	$	3,438.5	$	2,908.7


Floor plan notes payable	$	1,606.1	$	—		$	—	$	893.9	$	712.2
Floor plan notes payable — non-trade	893.6		—			127.0		414.6		352.0
Accounts payable	382.7		—			3.0		139.3		240.4
Accrued expenses	317.3		(405.2		)	0.2		153.0		569.3
Current portion of long-term debt	71.8		—			—		57.7		14.1
Liabilities held for sale	33.7		—			—		4.6		29.1

Total current liabilities	3,305.2		(405.2		)	130.2		1,663.1		1,917.1
Long-term debt	1,161.6		(255.0		)	822.0		174.3		420.3
Deferred tax liabilities	374.3		—			—		349.1		25.2
Other long-term liabilities	185.8		—			—		61.9		123.9

Total liabilities	5,026.9		(660.2		)	952.2		2,248.4		2,486.5
Total equity	1,655.4		(1,612.3		)	1,655.4		1,190.1		422.2

Total liabilities and equity	$	6,682.3	$	(2,272.5	)	$	2,607.6	$	3,438.5	$	2,908.7

CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2013

	Total Company		Eliminations			Penske Automotive Group		Guarantor Subsidiaries		Non-Guarantor Subsidiaries
	(In millions)

Cash and cash equivalents	$	49.8	$	—		$	—	$	12.6	$	37.2
Accounts receivable, net	600.8		(392.5		)	392.5		382.1		218.7
Inventories	2,518.3		—			—		1,416.2		1,102.1
Other current assets	88.4		—			2.9		43.4		42.1
Assets held for sale	107.3		—			—		61.0		46.3

Total current assets	3,364.6		(392.5		)	395.4		1,915.3		1,446.4
Property and equipment, net	1,232.2		—			4.0		800.0		428.2
Intangible assets	1,439.9		—			—		771.6		668.3
Equity method investments	346.9		—			294.9		—		52.0
Other long-term assets	31.9		(1,686.0		)	1,697.5		5.2		15.2

Total assets	$	6,415.5	$	(2,078.5	)	$	2,391.8	$	3,492.1	$	2,610.1


Floor plan notes payable	$	1,685.1	$	—		$	—	$	1,009.5	$	675.6
Floor plan notes payable — non-trade	901.6		—			128.1		445.7		327.8
Accounts payable	373.3		—			3.5		141.7		228.1
Accrued expenses	262.6		(392.5		)	0.1		122.2		532.8
Current portion of long-term debt	50.0		—			—		39.5		10.5
Liabilities held for sale	59.7		—			—		31.0		28.7

Total current liabilities	3,332.3		(392.5		)	131.7		1,789.6		1,803.5
Long-term debt	1,033.2		(123.6		)	738.0		158.4		260.4
Deferred tax liabilities	361.4		—			—		337.6		23.8
Other long-term liabilities	166.5		—			—		68.8		97.7

Total liabilities	4,893.4		(516.1		)	869.7		2,354.4		2,185.4
Total equity	1,522.1		(1,562.4		)	1,522.1		1,137.7		424.7

Total liabilities and equity	$	6,415.5	$	(2,078.5	)	$	2,391.8	$	3,492.1	$	2,610.1

CONDENSED CONSOLIDATING STATEMENT OF INCOME
Three Months Ended September 30, 2014

	Total Company			Eliminations			Penske Automotive Group			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
	(In millions)

Revenues	$	4,417.9		$	—		$	—		$	2,516.9		$	1,901.0
Cost of sales	3,759.2			—			—			2,128.5			1,630.7

Gross profit	658.7			—			—			388.4			270.3
Selling, general and administrative expenses	512.9			—			11.5			293.8			207.6
Depreciation	17.8			—			0.4			10.1			7.3

Operating income (loss)	128.0			—			(11.9		)	84.5			55.4
Floor plan interest expense	(11.2		)	—			(2.4		)	(5.2		)	(3.6		)
Other interest expense	(13.3		)	—			(7.5		)	(1.3		)	(4.5		)
Equity in earnings of affiliates	12.7			—			11.7			—			1.0
Equity in earnings of subsidiaries	—			(125.7		)	125.7			—			—

Income (loss) from continuing operations before income taxes	116.2			(125.7		)	115.6			78.0			48.3
Income taxes	(39.2		)	42.6			(39.2		)	(30.9		)	(11.7		)

Income (loss) from continuing operations	77.0			(83.1		)	76.4			47.1			36.6
(Loss) income from discontinued operations, net of tax	(1.9		)	1.9			(1.9		)	(0.9		)	(1.0		)

Net income (loss)	75.1			(81.2		)	74.5			46.2			35.6
Other comprehensive income (loss), net of tax	(51.0		)	50.1			(51.0		)	1.1			(51.2		)

Comprehensive income	24.1			(31.1		)	23.5			47.3			(15.6		)
Less: Comprehensive income attributable to the non-controlling interests	(0.1		)	0.7			(0.7		)	—			(0.1		)

Comprehensive income attributable to Penske Automotive Group common stockholders	$	24.2		$	(31.8	)	$	24.2		$	47.3		$	(15.5	)

CONDENSED CONSOLIDATING STATEMENT OF INCOME
Three Months Ended September 30, 2013

	Total Company			Eliminations			Penske Automotive Group			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
	(In millions)

Revenues	$	3,759.1		$	—		$	—		$	2,207.9		$	1,551.2
Cost of sales	3,188.0			—			—			1,857.3			1,330.7

Gross profit	571.1			—			—			350.6			220.5
Selling, general and administrative expenses	446.4			—			5.5			270.6			170.3
Depreciation	15.4			—			0.4			9.1			5.9

Operating income (loss)	109.3			—			(5.9		)	70.9			44.3
Floor plan interest expense	(10.6		)	—			(2.4		)	(4.8		)	(3.4		)
Other interest expense	(12.3		)	—			(6.4		)	(1.9		)	(4.0		)
Equity in earnings of affiliates	11.2			—			10.0			—			1.2
Equity in earnings of subsidiaries	—			(102.0		)	102.0			—			—

Income (loss) from continuing operations before income taxes	97.6			(102.0		)	97.3			64.2			38.1
Income taxes	(31.3		)	32.3			(31.3		)	(22.8		)	(9.5		)

Income (loss) from continuing operations	66.3			(69.7		)	66.0			41.4			28.6
(Loss) income from discontinued operations, net of tax	(0.8		)	0.8			(0.8		)	0.4			(1.2		)

Net income (loss)	65.5			(68.9		)	65.2			41.8			27.4
Other comprehensive income (loss), net of tax	38.4			(38.6		)	38.4			0.8			37.8

Comprehensive income	103.9			(107.5		)	103.6			42.6			65.2
Less: Comprehensive income attributable to the non-controlling interests	0.2			—			—			—			0.2

Comprehensive income attributable to Penske Automotive Group common stockholders	$	103.7		$	(107.5	)	$	103.6		$	42.6		$	65.0

CONDENSED CONSOLIDATING STATEMENT OF INCOME
Nine Months Ended September 30, 2014

	Total Company			Eliminations			Penske Automotive Group			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
	(In millions)

Revenues	$	12,872.6		$	—		$	—		$	7,178.0		$	5,694.6
Cost of sales	10,923.0			—			—			6,034.2			4,888.8

Gross profit	1,949.6			—			—			1,143.8			805.8
Selling, general and administrative expenses	1,513.9			—			23.2			882.9			607.8
Depreciation	51.8			—			1.0			29.2			21.6

Operating income (loss)	383.9			—			(24.2		)	231.7			176.4
Floor plan interest expense	(33.9		)	—			(7.2		)	(15.6		)	(11.1		)
Other interest expense	(39.5		)	—			(22.0		)	(3.6		)	(13.9		)
Equity in earnings of affiliates	28.7			—			25.3			—			3.4
Equity in earnings of subsidiaries	—			(365.3		)	365.3			—			—

Income (loss) from continuing operations before income taxes	339.2			(365.3		)	337.2			212.5			154.8
Income taxes	(114.4		)	123.8			(114.4		)	(82.7		)	(41.1		)

Income (loss) from continuing operations	224.8			(241.5		)	222.8			129.8			113.7
(Loss) income from discontinued operations, net of tax	(7.9		)	7.9			(7.9		)	6.3			(14.2		)

Net income (loss)	216.9			(233.6		)	214.9			136.1			99.5
Other comprehensive income (loss), net of tax	(26.0		)	24.9			(26.0		)	3.2			(28.1		)

Comprehensive income	190.9			(208.7		)	188.9			139.3			71.4
Less: Comprehensive income attributable to the non-controlling interests	1.0			0.9			(0.9		)	—			1.0

Comprehensive income attributable to Penske Automotive Group common stockholders	$	189.9		$	(209.6	)	$	189.8		$	139.3		$	70.4

CONDENSED CONSOLIDATING STATEMENT OF INCOME
Nine Months Ended September 30, 2013

	Total Company			Eliminations			Penske Automotive Group			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
	(In millions)

Revenues	$	10,739.0		$	—		$	—		$	6,364.8		$	4,374.2
Cost of sales	9,081.8			—			—			5,330.3			3,751.5

Gross profit	1,657.2			—			—			1,034.5			622.7
Selling, general and administrative expenses	1,286.2			—			15.3			792.6			478.3
Depreciation	44.4			—			1.2			25.6			17.6

Operating income (loss)	326.6			—			(16.5		)	216.3			126.8
Floor plan interest expense	(31.4		)	—			(7.2		)	(14.5		)	(9.7		)
Other interest expense	(35.7		)	—			(18.1		)	(4.1		)	(13.5		)
Equity in earnings of affiliates	22.4			—			18.8			—			3.6
Equity in earnings of subsidiaries	—			(303.8		)	303.8			—			—

Income (loss) from continuing operations before income taxes	281.9			(303.8		)	280.8			197.7			107.2
Income taxes	(94.5		)	100.7			(94.4		)	(74.0		)	(26.8		)

Income (loss) from continuing operations	187.4			(203.1		)	186.4			123.7			80.4
(Loss) income from discontinued operations, net of tax	(1.4		)	1.4			(1.4		)	1.2			(2.6		)

Net income (loss)	186.0			(201.7		)	185.0			124.9			77.8
Other comprehensive income (loss), net of tax	4.3			(4.4		)	4.3			2.9			1.5

Comprehensive income	190.3			(206.1		)	189.3			127.8			79.3
Less: Comprehensive income attributable to the non-controlling interests	1.5			(0.5		)	0.5			—			1.5

Comprehensive income attributable to Penske Automotive Group common stockholders	$	188.8		$	(205.6	)	$	188.8		$	127.8		$	77.8

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Nine Months Ended September 30, 2014

	Total Company			Penske Automotive Group			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
	(In millions)

Net cash from continuing operating activities	$	277.3		$	(19.3	)	$	168.9		$	127.7

Investing activities:
Purchase of equipment and improvements	(119.6		)	(0.6		)	(65.5		)	(53.5		)
Purchase of car rental vehicles	(93.5		)	—			(93.5		)	—
Disposal of car rental vehicles	45.1			—			45.1			—
Acquisitions, net	(86.2		)	—			(80.5		)	(5.7		)
Other	(25.3		)	4.1			(10.6		)	(18.8		)

Net cash from continuing investing activities	(279.5		)	3.5			(205.0		)	(78.0		)

Financing activities:
Net borrowings (repayments) of long-term debt	149.9			84.0			33.2			32.7
Net borrowings (repayments) of floor plan notes payable — non-trade	(8.0		)	(1.2		)	(28.8		)	22.0
Repurchases of common stock	(15.5		)	(15.5		)	—			—
Dividends	(51.5		)	(51.5		)	—			—
Distributions from (to) parent	—			—			4.8			(4.8		)
Other	0.3			—			—			0.3

Net cash from continuing financing activities	75.2			15.8			9.2			50.2

Net cash from discontinued operations	27.7			—			14.3			13.4

Net change in cash and cash equivalents	100.7			—			(12.6		)	113.3
Cash and cash equivalents, beginning of period	49.8			—			12.6			37.2

Cash and cash equivalents, end of period	$	150.5		$	—		$	—		$	150.5

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Nine Months Ended September 30, 2013

	Total Company			Penske Automotive Group			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
	(In millions)

Net cash from continuing operating activities	$	296.6		$	59.4		$	55.0		$	182.2

Investing activities:
Purchase of equipment and improvements	(122.2		)	(0.9		)	(83.0		)	(38.3		)
Purchase of car rental vehicles	(82.3		)	—			(82.3		)	—
Disposal of car rental vehicles	8.0			—			8.0			—
Acquisitions, net	(221.2		)	—			(22.0		)	(199.2		)
Other	(15.5		)	—			(15.5		)	—

Net cash from continuing investing activities	(433.2		)	(0.9		)	(194.8		)	(237.5		)

Financing activities:
Net borrowings (repayments) of long-term debt	123.9			(18.0		)	71.2			70.7
Net borrowings (repayments) of floor plan notes payable — non-trade	78.0			16.0			28.8			33.2
Repurchases of common stock	(15.8		)	(15.8		)	—			—
Dividends	(40.7		)	(40.7		)	—			—
Distributions from (to) parent	—			—			1.1			(1.1		)
Other	0.2			—			—			0.2

Net cash from continuing financing activities	145.6			(58.5		)	101.1			103.0

Net cash from discontinued operations	18.5			—			8.7			9.8

Net change in cash and cash equivalents	27.5			—			(30.0		)	57.5
Cash and cash equivalents, beginning of period	43.8			—			34.7			9.1

Cash and cash equivalents, end of period	$	71.3		$	—		$	4.7		$	66.6