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Condensed Consolidating Financial Information | 12 Months Ended
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Dec. 31, 2013
Condensed Consolidating Financial Information |
Condensed Consolidating Financial Information | 19. Condensed Consolidating Financial Information The following tables include condensed consolidating financial information as of December 31, 2013 and 2012 and for the years ended December 31, 2013, 2012, and 2011 for Penske Automotive Group, Inc. (as the issuer of the 5.75% Notes), guarantor subsidiaries and non-guarantor subsidiaries (primarily representing foreign entities). Guarantor subsidiaries are directly or indirectly 100% owned by PAG, and the guarantees are full and unconditional, and joint 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 December 31, 2013
|  | Total Company |  | Eliminations |  | Penske Automotive Group |  | Guarantor Subsidiaries |  | Non-Guarantor Subsidiaries |
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 |  | — |  | — |  | 1,416.1 |  | 1,102.2 |
Other current assets |  | 88.4 |  | — |  | 2.9 |  | 43.4 |  | 42.1 |
Assets held for sale |  | 107.3 |  | — |  | — |  | 61.1 |  | 46.2 |
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 |  | — |  | 295.0 |  | — |  | 51.9 |
Other long-term assets |  | 31.9 |  | (1,686.0 | ) | 1,697.4 |  | 5.2 |  | 15.3 |
Total assets |  | $ | 6,415.5 |  | $ | (2,078.5 | ) | $ | 2,391.8 |  | $ | 3,492.1 |  | $ | 2,610.1 |
Floor plan notes payable |  | $ | 1,685.1 |  | $ | — |  | $ | — |  | $ | 1,009.4 |  | $ | 675.7 |
Floor plan notes payable — non-trade |  | 901.6 |  | — |  | 128.2 |  | 445.7 |  | 327.7 |
Accounts payable |  | 373.3 |  | — |  | 3.4 |  | 141.8 |  | 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 |  | (123.5 | ) | 738.0 |  | 158.3 |  | 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 |  | (516.0 | ) | 869.7 |  | 2,354.3 |  | 2,185.4 |
Total equity |  | 1,522.1 |  | (1,562.5 | ) | 1,522.1 |  | 1,137.8 |  | 424.7 |
Total liabilities and equity |  | $ | 6,415.5 |  | $ | (2,078.5 | ) | $ | 2,391.8 |  | $ | 3,492.1 |  | $ | 2,610.1 |
CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2012
|  | Total Company |  | Eliminations |  | Penske Automotive Group |  | Guarantor Subsidiaries |  | Non-Guarantor Subsidiaries |
Cash and cash equivalents |  | $ | 43.8 |  | $ | — |  | $ | — |  | $ | 34.7 |  | $ | 9.1 |
Accounts receivable, net |  | 545.1 |  | (345.5 | ) | 345.5 |  | 360.4 |  | 184.7 |
Inventories |  | 1,959.3 |  | — |  | — |  | 1,177.2 |  | 782.1 |
Other current assets |  | 90.2 |  | — |  | 3.5 |  | 55.6 |  | 31.1 |
Assets held for sale |  | 164.1 |  | — |  | — |  | 82.8 |  | 81.3 |
Total current assets |  | 2,802.5 |  | (345.5 | ) | 349.0 |  | 1,710.7 |  | 1,088.3 |
Property and equipment, net |  | 1,013.7 |  | — |  | 4.5 |  | 631.6 |  | 377.6 |
Intangible assets |  | 1,239.0 |  | — |  | — |  | 711.5 |  | 527.5 |
Equity method investments |  | 303.2 |  | — |  | 252.8 |  | — |  | 50.4 |
Other long-term assets |  | 20.6 |  | (1,522.6 | ) | 1,535.9 |  | 4.9 |  | 2.4 |
Total assets |  | $ | 5,379.0 |  | $ | (1,868.1 | ) | $ | 2,142.2 |  | $ | 3,058.7 |  | $ | 2,046.2 |
Floor plan notes payable |  | $ | 1,388.7 |  | $ | — |  | $ | — |  | $ | 877.6 |  | $ | 511.1 |
Floor plan notes payable — non-trade |  | 710.4 |  | — |  | 112.1 |  | 343.8 |  | 254.5 |
Accounts payable |  | 259.8 |  | — |  | 3.3 |  | 121.2 |  | 135.3 |
Accrued expenses |  | 221.3 |  | (345.5 | ) | 0.5 |  | 112.2 |  | 454.1 |
Current portion of long-term debt |  | 19.5 |  | — |  | — |  | 9.8 |  | 9.7 |
Liabilities held for sale |  | 95.9 |  | — |  | — |  | 42.1 |  | 53.8 |
Total current liabilities |  | 2,695.6 |  | (345.5 | ) | 115.9 |  | 1,506.7 |  | 1,418.5 |
Long-term debt |  | 917.1 |  | (76.0 | ) | 710.0 |  | 121.6 |  | 161.5 |
Deferred tax liabilities |  | 287.8 |  | — |  | — |  | 260.4 |  | 27.4 |
Other long-term liabilities |  | 162.2 |  | — |  | — |  | 84.6 |  | 77.6 |
Total liabilities |  | 4,062.7 |  | (421.5 | ) | 825.9 |  | 1,973.3 |  | 1,685.0 |
Total equity |  | 1,316.3 |  | (1,446.6 | ) | 1,316.3 |  | 1,085.4 |  | 361.2 |
Total liabilities and equity |  | $ | 5,379.0 |  | $ | (1,868.1 | ) | $ | 2,142.2 |  | $ | 3,058.7 |  | $ | 2,046.2 |
CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended December 31, 2013
|  | Total Company |  | Eliminations |  | Penske Automotive Group |  | Guarantor Subsidiaries |  | Non-Guarantor Subsidiaries |
Revenues |  | $ | 14,563.9 |  | $ | — |  | $ | — |  | $ | 8,620.1 |  | $ | 5,943.8 |
Cost of sales |  | 12,325.3 |  | — |  | — |  | 7,228.1 |  | 5,097.2 |
Gross profit |  | 2,238.6 |  | — |  | — |  | 1,392.0 |  | 846.6 |
Selling, general, and administrative expenses |  | 1,744.6 |  | — |  | 21.4 |  | 1,060.1 |  | 663.1 |
Depreciation |  | 61.1 |  | — |  | 1.8 |  | 35.2 |  | 24.1 |
Operating income (loss) |  | 432.9 |  | — |  | (23.2 | ) | 296.7 |  | 159.4 |
Floor plan interest expense |  | (43.3 | ) | — |  | (9.6 | ) | (19.7 | ) | (14.0 | )
Other interest expense |  | (47.7 | ) | — |  | (26.1 | ) | (4.3 | ) | (17.3 | )
Equity in earnings of affiliates |  | 30.7 |  | — |  | 25.5 |  | — |  | 5.2 |
Equity in earnings of subsidiaries |  | — |  | (404.5 | ) | 404.5 |  | — |  | — |
Income from continuing operations before income taxes |  | 372.6 |  | (404.5 | ) | 371.1 |  | 272.7 |  | 133.3 |
Income taxes |  | (123.2 | ) | 134.3 |  | (123.2 | ) | (99.7 | ) | (34.6 | )
Income from continuing operations |  | 249.4 |  | (270.2 | ) | 247.9 |  | 173.0 |  | 98.7 |
Loss from discontinued operations, net of tax |  | (3.7 | ) | 3.7 |  | (3.7 | ) | 2.1 |  | (5.8 | )
Net income |  | 245.7 |  | (266.5 | ) | 244.2 |  | 175.1 |  | 92.9 |
Other comprehensive income (loss), net of tax |  | 18.9 |  | (9.8 | ) | 18.9 |  | 4.0 |  | 5.8 |
Comprehensive income |  | 264.6 |  | (276.3 | ) | 263.1 |  | 179.1 |  | 98.7 |
Less: Comprehensive income attributable to the non-controlling interests |  | 2.0 |  | (0.5 | ) | 0.5 |  | — |  | 2.0 |
Comprehensive income attributable to Penske Automotive Group common stockholders |  | $ | 262.6 |  | $ | (275.8 | ) | $ | 262.6 |  | $ | 179.1 |  | $ | 96.7 |
CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended December 31, 2012
|  | Total Company |  | Eliminations |  | Penske Automotive Group |  | Guarantor Subsidiaries |  | Non-Guarantor Subsidiaries |
Revenues |  | $ | 12,957.3 |  | $ | — |  | $ | — |  | $ | 7,656.6 |  | $ | 5,300.7 |
Cost of sales |  | 10,971.3 |  | — |  | — |  | 6,444.6 |  | 4,526.7 |
Gross profit |  | 1,986.0 |  | — |  | — |  | 1,212.0 |  | 774.0 |
Selling, general, and administrative expenses |  | 1,570.5 |  | — |  | 19.4 |  | 938.5 |  | 612.6 |
Depreciation |  | 52.9 |  | — |  | 1.3 |  | 28.6 |  | 23.0 |
Operating income (loss) |  | 362.6 |  | — |  | (20.7 | ) | 244.9 |  | 138.4 |
Floor plan interest expense |  | (38.1 | ) | — |  | (8.6 | ) | (16.5 | ) | (13.0 | )
Other interest expense |  | (46.6 | ) | — |  | (29.5 | ) | (0.4 | ) | (16.7 | )
Equity in earnings of affiliates |  | 27.6 |  | — |  | 24.0 |  | — |  | 3.6 |
Debt redemption costs |  | (17.8 | ) | — |  | (17.8 | ) | — |  | — |
Equity in earnings of subsidiaries |  | — |  | (338.7 | ) | 338.7 |  | — |  | — |
Income from continuing operations before income taxes |  | 287.7 |  | (338.7 | ) | 286.1 |  | 228.0 |  | 112.3 |
Income taxes |  | (93.4 | ) | 110.7 |  | (93.4 | ) | (86.4 | ) | (24.3 | )
Income from continuing operations |  | 194.3 |  | (228.0 | ) | 192.7 |  | 141.6 |  | 88.0 |
Loss from discontinued operations, net of tax |  | (7.1 | ) | 7.1 |  | (7.1 | ) | 1.5 |  | (8.6 | )
Net income |  | 187.2 |  | (220.9 | ) | 185.6 |  | 143.1 |  | 79.4 |
Other comprehensive income (loss), net of tax |  | 17.6 |  | (16.6 | ) | 17.6 |  | 1.0 |  | 15.6 |
Comprehensive income |  | 204.8 |  | (237.5 | ) | 203.2 |  | 144.1 |  | 95.0 |
Less: Comprehensive income attributable to non-controlling interests |  | 1.9 |  | (0.3 | ) | 0.3 |  | — |  | 1.9 |
Comprehensive income attributable to Penske Automotive Group common stockholders |  | $ | 202.9 |  | $ | (237.2 | ) | $ | 202.9 |  | $ | 144.1 |  | $ | 93.1 |
CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended December 31, 2011
|  | Total Company |  | Eliminations |  | Penske Automotive Group |  | Guarantor Subsidiaries |  | Non-Guarantor Subsidiaries |
Revenues |  | $ | 10,926.4 |  | $ | — |  | $ | — |  | $ | 6,496.3 |  | $ | 4,430.1 |
Cost of sales |  | 9,193.8 |  | — |  | — |  | 5,414.3 |  | 3,779.5 |
Gross profit |  | 1,732.6 |  | — |  | — |  | 1,082.0 |  | 650.6 |
Selling, general, and administrative expenses |  | 1,394.6 |  | — |  | 19.0 |  | 863.3 |  | 512.3 |
Depreciation |  | 45.8 |  | — |  | 1.3 |  | 25.1 |  | 19.4 |
Operating income (loss) |  | 292.2 |  | — |  | (20.3 | ) | 193.6 |  | 118.9 |
Floor plan interest expense |  | (26.6 | ) | — |  | (1.4 | ) | (13.6 | ) | (11.6 | )
Other interest expense |  | (44.1 | ) | — |  | (25.4 | ) | (1.0 | ) | (17.7 | )
Debt discount amortization |  | (1.7 | ) | — |  | (1.7 | ) | — |  | — |
Equity in earnings of affiliates |  | 25.4 |  | — |  | 23.0 |  | — |  | 2.4 |
Equity in earnings of subsidiaries |  | — |  | (269.7 | ) | 269.7 |  | — |  | — |
Income from continuing operations before income taxes |  | 245.2 |  | (269.7 | ) | 243.9 |  | 179.0 |  | 92.0 |
Income taxes |  | (70.6 | ) | 78.3 |  | (70.7 | ) | (51.9 | ) | (26.3 | )
Income from continuing operations |  | 174.6 |  | (191.4 | ) | 173.2 |  | 127.1 |  | 65.7 |
Loss from discontinued operations, net of tax |  | 3.7 |  | (3.7 | ) | 3.7 |  | 4.8 |  | (1.1 | )
Net income |  | 178.3 |  | (195.1 | ) | 176.9 |  | 131.9 |  | 64.6 |
Other comprehensive income (loss), net of tax |  | (24.1 | ) | 21.2 |  | (24.1 | ) | (9.6 | ) | (11.6 | )
Comprehensive income |  | 154.2 |  | (173.9 | ) | 152.8 |  | 122.3 |  | 53.0 |
Less: Comprehensive income attributable to the non-controlling interests |  | 1.4 |  | — |  | — |  | — |  | 1.4 |
Comprehensive income attributable to Penske Automotive Group common stockholders |  | $ | 152.8 |  | $ | (173.9 | ) | $ | 152.8 |  | $ | 122.3 |  | $ | 51.6 |
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 2013
|  | Total Company |  | Penske Automotive Group |  | Guarantor Subsidiaries |  | Non-Guarantor Subsidiaries |
Net cash from (used in) continuing operating activities |  | $ | 312.1 |  | $ | 46.6 |  | $ | 28.7 |  | $ | 236.8 |
Investing activities: |  |  |  |  |  |  |  |  |
Purchase of property and equipment |  | (169.6 | ) | (1.4 | ) | (111.4 | ) | (56.8 | )
Purchase of car rental vehicles |  | (86.4 | ) | — |  | (86.4 | ) | — |
Acquisitions, net |  | (338.1 | ) | — |  | (127.5 | ) | (210.6 | )
Other |  | 6.7 |  | (17.5 | ) | 19.9 |  | 4.3 |
Net cash from (used in) continuing investing activities |  | (587.4 | ) | (18.9 | ) | (305.4 | ) | (263.1 | )
Financing activities: |  |  |  |  |  |  |  |  |
Net borrowings (repayments) of long-term debt |  | 144.8 |  | 28.0 |  | 66.4 |  | 50.4 |
Net (repayments) borrowings of floor plan notes payable — non-trade |  | 191.3 |  | 16.1 |  | 181.3 |  | (6.1 | )
Repurchase of common stock |  | (15.8 | ) | (15.8 | ) | — |  | — |
Dividends |  | (56.0 | ) | (56.0 | ) | — |  | — |
Distributions from (to) parent |  | — |  | — |  | 0.9 |  | (0.9 | )
Other |  | 0.2 |  | — |  | — |  | 0.2 |
Net cash from (used in) continuing financing activities |  | 264.5 |  | (27.7 | ) | 248.6 |  | 43.6 |
Net cash from discontinued operations |  | 16.8 |  | — |  | 6.0 |  | 10.8 |
Net change in cash and cash equivalents |  | 6.0 |  | — |  | (22.1 | ) | 28.1 |
Cash and cash equivalents, beginning of period |  | 43.8 |  | — |  | 34.7 |  | 9.1 |
Cash and cash equivalents, end of period |  | $ | 49.8 |  | $ | — |  | $ | 12.6 |  | $ | 37.2 |
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 2012
|  | Total Company |  | Penske Automotive Group |  | Guarantor Subsidiaries |  | Non-Guarantor Subsidiaries |
Net cash from (used in) continuing operating activities |  | $ | 323.5 |  | $ | 45.5 |  | $ | 125.8 |  | $ | 152.2 |
Investing activities: |  |  |  |  |  |  |  |  |
Purchase of equipment and improvements |  | (152.0 | ) | (1.1 | ) | (101.4 | ) | (49.5 | )
Purchase of car rental vehicles |  | (9.9 | ) | — |  | (9.9 | ) | — |
Proceeds from sale-leaseback transactions |  | 1.6 |  | — |  | — |  | 1.6 |
Acquisitions, net |  | (250.2 | ) | — |  | (115.8 | ) | (134.4 | )
Other |  | 8.8 |  | (3.3 | ) | 4.8 |  | 7.3 |
Net cash from (used in) continuing investing activities |  | (401.7 | ) | (4.4 | ) | (222.3 | ) | (175.0 | )
Financing activities: |  |  |  |  |  |  |  |  |
Repurchase of 3.5% senior subordinated convertible notes |  | (62.7 | ) | (62.7 | ) | — |  | — |
Issuance of 5.75% senior subordinated notes |  | 550.0 |  | 550.0 |  | — |  | — |
Repurchase of 7.75% senior subordinated notes |  | (390.8 | ) | (390.8 | ) | — |  | — |
Net borrowings (repayments) of long-term debt |  | (28.5 | ) | (98.9 | ) | 50.9 |  | 19.5 |
Net borrowings (repayments) of floor plan notes payable — non-trade |  | 70.5 |  | 21.2 |  | 41.6 |  | 7.7 |
Repurchases of common stock |  | (9.8 | ) | (9.8 | ) | — |  | — |
Dividends |  | (41.5 | ) | (41.5 | ) | — |  | — |
Payment of deferred financing fees |  | (8.6 | ) | (8.6 | ) | — |  | — |
Other |  | (1.1 | ) | — |  | — |  | (1.1 | )
Distributions from (to) parent |  | — |  | — |  | 5.2 |  | (5.2 | )
Net cash from (used in) continuing financing activities |  | 77.5 |  | (41.1 | ) | 97.7 |  | 20.9 |
Net cash from (used in) discontinued operations |  | 17.7 |  | — |  | 7.7 |  | 10.0 |
Net change in cash and cash equivalents |  | 17.0 |  | — |  | 8.9 |  | 8.1 |
Cash and cash equivalents, beginning of period |  | 26.8 |  | — |  | 25.8 |  | 1.0 |
Cash and cash equivalents, end of period |  | $ | 43.8 |  | $ | — |  | $ | 34.7 |  | $ | 9.1 |
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 2011
|  | Total Company |  | Penske Automotive Group |  | Guarantor Subsidiaries |  | Non-Guarantor Subsidiaries |
Net cash from (used in) continuing operating activities |  | $ | 134.3 |  | $ | (39.4 | ) | $ | 186.1 |  | $ | (12.4 | )
Investing activities: |  |  |  |  |  |  |  |  |
Purchase of equipment and improvements |  | (131.2 | ) | (1.3 | ) | (75.6 | ) | (54.3 | )
Acquisitions, net |  | (232.1 | ) | — |  | (194.3 | ) | (37.8 | )
Other |  | 2.9 |  | — |  | — |  | 2.9 |
Net cash from (used in) continuing investing activities |  | (360.4 | ) | (1.3 | ) | (269.9 | ) | (89.2 | )
Financing activities: |  |  |  |  |  |  |  |  |
Repurchase of 3.5% senior subordinated convertible notes |  | (87.3 | ) | (87.3 | ) | — |  | — |
Net borrowings (repayments) of long-term debt |  | 155.2 |  | 125.0 |  | 18.4 |  | 11.8 |
Net borrowings (repayments) of floor plan notes payable — non-trade |  | 197.0 |  | 65.9 |  | 34.9 |  | 96.2 |
Proceeds from exercises of options, including excess tax benefit |  | 3.4 |  | 3.4 |  | — |  | — |
Repurchases of common stock |  | (44.3 | ) | (44.3 | ) | — |  | — |
Dividends |  | (22.0 | ) | (22.0 | ) | — |  | — |
Distributions from (to) parent |  | — |  | — |  | 6.1 |  | (6.1 | )
Net cash from (used in) continuing financing activities |  | 202.0 |  | 40.7 |  | 59.4 |  | 101.9 |
Net cash from discontinued operations |  | 32.8 |  | — |  | 34.4 |  | (1.6 | )
Net change in cash and cash equivalents |  | 8.7 |  | — |  | 10.0 |  | (1.3 | )
Cash and cash equivalents, beginning of period |  | 18.1 |  | — |  | 15.8 |  | 2.3 |
Cash and cash equivalents, end of period |  | $ | 26.8 |  | $ | — |  | $ | 25.8 |  | $ | 1.0 |

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- Definition The entire disclosure for condensed financial statements. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 10 -Paragraph f -Article 3 + Details
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