Condensed Consolidating Financial Information (Tables)

9 Months Ended

Sep. 30, 2015

Condensed Consolidating Financial Information

CONDENSED CONSOLIDATING BALANCE SHEET
September 30, 2015

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

Cash and cash equivalents	$	49.7	$	—		$	—	$	—	$	49.7
Accounts receivable, net	775.5		(428.1		)	428.1		307.0		468.5
Inventories	3,188.4		—			—		1,526.0		1,662.4
Other current assets	109.0		—			4.7		34.2		70.1
Assets held for sale	15.3		—			—		9.2		6.1

Total current assets	4,137.9		(428.1		)	432.8		1,876.4		2,256.8
Property and equipment, net	1,476.9		—			4.1		796.3		676.5
Intangible assets	1,690.4		—			—		833.9		856.5
Equity method investments	340.1		—			298.9		—		41.2
Other long-term assets	29.6		(2,155.9		)	2,170.9		1.5		13.1

Total assets	$	7,674.9	$	(2,584.0	)	$	2,906.7	$	3,508.1	$	3,844.1

Floor plan notes payable	$	2,096.0	$	—		$	—	$	1,186.7	$	909.3
Floor plan notes payable — non-trade	1,072.6		—			153.6		268.0		651.0
Accounts payable	482.4		—			3.1		131.1		348.2
Accrued expenses	358.3		(428.1		)	0.9		157.3		628.2
Current portion of long-term debt	29.7		—			—		6.9		22.8
Liabilities held for sale	8.3		—			—		4.6		3.7

Total current liabilities	4,047.3		(428.1		)	157.6		1,754.6		2,563.2
Long-term debt	1,155.2		(262.0		)	928.0		110.4		378.8
Deferred tax liabilities	395.6		—			—		371.8		23.8
Other long-term liabilities	255.7		—			—		67.2		188.5

Total liabilities	5,853.8		(690.1		)	1,085.6		2,304.0		3,154.3
Total equity	1,821.1		(1,893.9		)	1,821.1		1,204.1		689.8

Total liabilities and equity	$	7,674.9	$	(2,584.0	)	$	2,906.7	$	3,508.1	$	3,844.1

CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2014

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

Cash and cash equivalents	$	36.3	$	—		$	—	$	—	$	36.3
Accounts receivable, net	707.1		(409.6		)	409.6		392.6		314.5
Inventories	2,836.4		—			—		1,481.5		1,354.9
Other current assets	124.8		—			4.5		58.3		62.0
Assets held for sale	156.1		—			—		150.9		5.2

Total current assets	3,860.7		(409.6		)	414.1		2,083.3		1,772.9
Property and equipment, net	1,331.6		—			4.3		754.6		572.7
Intangible assets	1,656.5		—			—		817.9		838.6
Equity method investments	352.8		—			285.5		—		67.3
Other long-term assets	26.6		(1,990.8		)	2,005.0		4.4		8.0

Total assets	$	7,228.2	$	(2,400.4	)	$	2,708.9	$	3,660.2	$	3,259.5

Floor plan notes payable	$	1,812.6	$	—		$	—	$	1,102.0	$	710.6
Floor plan notes payable — non-trade	933.8		—			86.8		398.1		448.9
Accounts payable	422.5		—			2.9		208.3		211.3
Accrued expenses	316.0		(409.6		)	—		123.3		602.3
Current portion of long-term debt	37.2		—			—		4.6		32.6
Liabilities held for sale	108.2		—			—		105.9		2.3

Total current liabilities	3,630.3		(409.6		)	89.7		1,942.2		2,008.0
Long-term debt	1,316.0		(247.0		)	938.0		116.1		508.9
Deferred tax liabilities	409.9		—			—		385.6		24.3
Other long-term liabilities	190.8		—			—		66.9		123.9

Total liabilities	5,547.0		(656.6		)	1,027.7		2,510.8		2,665.1
Total equity	1,681.2		(1,743.8		)	1,681.2		1,149.4		594.4

Total liabilities and equity	$	7,228.2	$	(2,400.4	)	$	2,708.9	$	3,660.2	$	3,259.5

CONDENSED CONSOLIDATING STATEMENT OF INCOME

CONDENSED CONSOLIDATING STATEMENT OF INCOME
Three Months Ended September 30, 2015

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

Revenues	$	4,960.1		$	—		$	—		$	2,591.2		$	2,368.9
Cost of sales	4,230.9			—			—			2,197.2			2,033.7

Gross profit	729.2			—			—			394.0			335.2
Selling, general and administrative expenses	563.4			—			5.7			302.6			255.1
Depreciation	19.8			—			0.4			10.6			8.8

Operating income	146.0			—			(6.1		)	80.8			71.3
Floor plan interest expense	(11.4		)	—			(0.7		)	(5.6		)	(5.1		)
Other interest expense	(16.3		)	—			(10.6		)	(1.3		)	(4.4		)
Equity in earnings of affiliates	11.0			—			11.0			—			—
Equity in earnings of subsidiaries	—			(134.8		)	134.8			—			—

Income from continuing operations before income taxes	129.3			(134.8		)	128.4			73.9			61.8
Income taxes	(41.7		)	43.8			(41.7		)	(29.4		)	(14.4		)

Income from continuing operations	87.6			(91.0		)	86.7			44.5			47.4
(Loss) income from discontinued operations, net of tax	(0.1		)	0.1			(0.1		)	(0.1		)	—

Net income	87.5			(90.9		)	86.6			44.4			47.4
Other comprehensive income (loss), net of tax	(42.5		)	40.8			(42.5		)	—			(40.8		)

Comprehensive income	45.0			(50.1		)	44.1			44.4			6.6

Less: Comprehensive income attributable to non-controlling interests	1.5			(0.6		)	0.6			—			1.5

Comprehensive income attributable to Penske Automotive Group common stockholders	$	43.5		$	(49.5	)	$	43.5		$	44.4		$	5.1

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	$	4,396.7		$	—		$	—		$	2,489.9		$	1,906.8
Cost of sales	3,749.1			—			—			2,112.5			1,636.6

Gross profit	647.6			—			—			377.4			270.2
Selling, general and administrative expenses	502.3			—			11.5			283.0			207.8
Depreciation	17.3			—			0.4			9.6			7.3

Operating income	128.0			—			(11.9		)	84.8			55.1
Floor plan interest expense	(11.3		)	—			(2.5		)	(5.1		)	(3.7		)
Other interest expense	(12.4		)	—			(7.4		)	(0.5		)	(4.5		)
Equity in earnings of affiliates	12.7			—			11.7			—			1.0
Equity in earnings of subsidiaries	—			(126.8		)	126.8			—			—

Income from continuing operations before income taxes	117.0			(126.8		)	116.7			79.2			47.9
Income taxes	(39.7		)	43.1			(39.7		)	(31.4		)	(11.7		)

Income from continuing operations	77.3			(83.7		)	77.0			47.8			36.2
(Loss) income from discontinued operations, net of tax	(2.2		)	2.5			(2.5		)	(1.6		)	(0.6		)

Net income	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 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
Nine Months Ended September 30, 2015

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

Revenues	$	14,363.6		$	—		$	—		$	7,548.5		$	6,815.1
Cost of sales	12,213.2			—			—			6,372.4			5,840.8

Gross profit	2,150.4			—			—			1,176.1			974.3
Selling, general and administrative expenses	1,652.3			—			18.0			895.9			738.4
Depreciation	57.7			—			1.2			31.2			25.3

Operating income	440.4			—			(19.2		)	249.0			210.6
Floor plan interest expense	(32.7		)	—			(2.1		)	(16.4		)	(14.2		)
Other interest expense	(49.0		)	—			(30.6		)	(4.0		)	(14.4		)
Equity in earnings of affiliates	29.7			—			27.3			—			2.4
Equity in earnings of subsidiaries	—			(410.2		)	410.2			—			—

Income from continuing operations before income taxes	388.4			(410.2		)	385.6			228.6			184.4
Income taxes	(128.2		)	136.3			(128.2		)	(91.8		)	(44.5		)

Income from continuing operations	260.2			(273.9		)	257.4			136.8			139.9
(Loss) income from discontinued operations, net of tax	(1.1		)	1.7			(1.7		)	(1.3		)	0.2

Net income	259.1			(272.2		)	255.7			135.5			140.1
Other comprehensive income (loss), net of tax	(59.3		)	55.6			(59.3		)	—			(55.6		)

Comprehensive income	199.8			(216.6		)	196.4			135.5			84.5

Less: Comprehensive income attributable to non-controlling interests	3.1			0.2			(0.2		)	—			3.1

Comprehensive income attributable to Penske Automotive Group common stockholders	$	196.7		$	(216.8	)	$	196.6		$	135.5		$	81.4

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	$	12,806.4		$	—		$	—		$	7,102.0		$	5,704.4
Cost of sales	10,887.3			—			—			5,988.2			4,899.1

Gross profit	1,919.1			—			—			1,113.8			805.3
Selling, general and administrative expenses	1,486.0			—			23.2			853.2			609.6
Depreciation	50.6			—			1.0			27.9			21.7

Operating income	382.5			—			(24.2		)	232.7			174.0
Floor plan interest expense	(34.2		)	—			(7.3		)	(15.4		)	(11.5		)
Other interest expense	(37.2		)	—			(21.9		)	(1.4		)	(13.9		)
Equity in earnings of affiliates	28.7			—			25.3			—			3.4
Equity in earnings of subsidiaries	—			(368.5		)	368.5			—			—

Income from continuing operations before income taxes	339.8			(368.5		)	340.4			215.9			152.0
Income taxes	(115.7		)	125.1			(115.7		)	(84.0		)	(41.1		)

Income from continuing operations	224.1			(243.4		)	224.7			131.9			110.9
(Loss) income from discontinued operations, net of tax	(7.2		)	9.8			(9.8		)	4.2			(11.4		)

Net income	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 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 CASH FLOWS

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Nine Months Ended September 30, 2015

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

Net cash provided by continuing operating activities	$	373.4		$	28.4		$	154.3		$	190.7

Investing activities:
Purchase of equipment and improvements	(151.1		)	(1.0		)	(74.0		)	(76.1		)
Acquisitions, net	(85.4		)	—			(21.7		)	(63.7		)
Other	0.2			—			—			0.2

Net cash used in continuing investing activities	(236.3		)	(1.0		)	(95.7		)	(139.6		)

Financing activities:
Net (repayments) borrowings of long-term debt	(165.7		)	(10.0		)	24.0			(179.7		)
Net borrowings (repayments) of floor plan notes payable — non-trade	94.6			66.9			(130.1		)	157.8
Payment of deferred financing fees	(1.8		)	—			—			(1.8		)
Repurchases of common stock	(22.0		)	(22.0		)	—			—
Dividends	(62.3		)	(62.3		)	—			—
Other	(5.9		)	—			—			(5.9		)
Distributions from (to) parent	—			—			8.3			(8.3		)

Net cash used in continuing financing activities	(163.1		)	(27.4		)	(97.8		)	(37.9		)
Net cash provided by discontinued operations	39.7			—			39.2			0.5
Effect of exchange rate changes on cash and cash equivalents	(0.3		)	—			—			(0.3		)

Net change in cash and cash equivalents	13.4			—			—			13.4
Cash and cash equivalents, beginning of period	36.3			—			—			36.3

Cash and cash equivalents, end of period	$	49.7		$	—		$	—		$	49.7

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 provided by (used in) continuing operating activities	$	276.0		$	(19.4	)	$	169.0		$	126.4

Investing activities:
Purchase of equipment and improvements	(139.6		)	(0.6		)	(82.9		)	(56.1		)
Acquisitions, net	(86.2		)	—			(80.5		)	(5.7		)
Other	(25.3		)	4.2			(10.6		)	(18.9		)

Net cash (used in) provided by continuing investing activities	(251.1		)	3.6			(174.0		)	(80.7		)

Financing activities:
Net borrowings of long-term debt	127.0			84.0			9.6			33.4
Net borrowings (repayments) of floor plan notes payable — non-trade	—			(1.2		)	(20.9		)	22.1
Repurchases of common stock	(15.5		)	(15.5		)	—			—
Dividends	(51.5		)	(51.5		)	—			—
Other	0.2			—			—			0.2
Distributions from (to) parent	—			—			4.8			(4.8		)

Net cash provided by (used in) continuing financing activities	60.2			15.8			(6.5		)	50.9
Net cash provided by (used in) discontinued operations	15.1			—			(1.5		)	16.6

Net change in cash and cash equivalents	100.2			—			(13.0		)	113.2
Cash and cash equivalents, beginning of period	50.3			—			13.0			37.3

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