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Condensed Consolidating Financial Information | 3 Months Ended
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Mar. 31, 2018
Condensed Consolidating Financial Information |
Condensed Consolidating Financial Information | 13. Condensed Consolidating Financial Information The following tables include condensed consolidating financial information as of March 31, 2018 and December 31, 2017 and for the three month periods ended March 31, 2018 and 2017 for Penske Automotive Group, Inc. (as the issuer of the 5.75%, the 5.375%, the 5.50%, and the 3.75% 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 joint and several. The guarantees may be released under certain circumstances upon resale, or transfer by us of the stock of the related guarantor or all or substantially all of the assets of the guarantor to a non-affiliate. CONDENSED CONSOLIDATING BALANCE SHEET March 31, 2018
|  |  |  |  |  |  |  | Penske |  |  |  |  |  |  |
|  | Total |  |  |  |  | Automotive |  | Guarantor |  | Non-Guarantor |
|  | Company |  | Eliminations |  | Group |  | Subsidiaries |  | Subsidiaries |
Cash and cash equivalents |  | $ | 52.8 |  | $ | — |  | $ | — |  | $ | — |  | $ | 52.8 |
Accounts receivable, net |  |  | 1,035.4 |  |  | (466.7) |  |  | 466.7 |  |  | 444.0 |  |  | 591.4 |
Inventories |  |  | 3,972.2 |  |  | — |  |  | — |  |  | 1,878.3 |  |  | 2,093.9 |
Other current assets |  |  | 105.0 |  |  | — |  |  | 8.1 |  |  | 17.7 |  |  | 79.2 |
Total current assets |  |  | 5,165.4 |  |  | (466.7) |  |  | 474.8 |  |  | 2,340.0 |  |  | 2,817.3 |
Property and equipment, net |  |  | 2,173.5 |  |  | — |  |  | 3.0 |  |  | 997.7 |  |  | 1,172.8 |
Intangible assets |  |  | 2,213.2 |  |  | — |  |  | — |  |  | 1,328.6 |  |  | 884.6 |
Equity method investments |  |  | 1,276.2 |  |  | — |  |  | 1,204.7 |  |  | — |  |  | 71.5 |
Other long-term assets |  |  | 14.7 |  |  | (2,775.6) |  |  | 2,780.8 |  |  | 4.3 |  |  | 5.2 |
Total assets |  | $ | 10,843.0 |  | $ | (3,242.3) |  | $ | 4,463.3 |  | $ | 4,670.6 |  | $ | 4,951.4 |
Floor plan notes payable |  | $ | 2,355.6 |  | $ | — |  | $ | — |  | $ | 1,203.1 |  | $ | 1,152.5 |
Floor plan notes payable — non-trade |  |  | 1,413.8 |  |  | — |  |  | 197.5 |  |  | 558.8 |  |  | 657.5 |
Accounts payable |  |  | 720.5 |  |  | — |  |  | 4.2 |  |  | 168.2 |  |  | 548.1 |
Accrued expenses |  |  | 563.9 |  |  | (466.7) |  |  | 1.0 |  |  | 180.5 |  |  | 849.1 |
Current portion of long-term debt |  |  | 84.3 |  |  | — |  |  | — |  |  | 4.5 |  |  | 79.8 |
Liabilities held for sale |  |  | 0.7 |  |  | — |  |  | — |  |  | 0.7 |  |  | — |
Total current liabilities |  |  | 5,138.8 |  |  | (466.7) |  |  | 202.7 |  |  | 2,115.8 |  |  | 3,287.0 |
Long-term debt |  |  | 2,136.9 |  |  | (152.0) |  |  | 1,766.2 |  |  | 170.6 |  |  | 352.1 |
Deferred tax liabilities |  |  | 505.5 |  |  | — |  |  | — |  |  | 503.3 |  |  | 2.2 |
Other long-term liabilities |  |  | 567.4 |  |  | — |  |  | — |  |  | 64.0 |  |  | 503.4 |
Total liabilities |  |  | 8,348.6 |  |  | (618.7) |  |  | 1,968.9 |  |  | 2,853.7 |  |  | 4,144.7 |
Total equity |  |  | 2,494.4 |  |  | (2,623.6) |  |  | 2,494.4 |  |  | 1,816.9 |  |  | 806.7 |
Total liabilities and equity |  | $ | 10,843.0 |  | $ | (3,242.3) |  | $ | 4,463.3 |  | $ | 4,670.6 |  | $ | 4,951.4 |
CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2017
|  |  |  |  |  |  |  | Penske |  |  |  |  |  |  |
|  | Total |  |  |  |  | Automotive |  | Guarantor |  | Non-Guarantor |
|  | Company |  | Eliminations |  | Group |  | Subsidiaries |  | Subsidiaries |
Cash and cash equivalents |  | $ | 45.7 |  | $ | — |  | $ | — |  | $ | 14.8 |  | $ | 30.9 |
Accounts receivable, net |  |  | 954.9 |  |  | (463.6) |  |  | 463.6 |  |  | 523.8 |  |  | 431.1 |
Inventories |  |  | 3,944.1 |  |  | — |  |  | — |  |  | 1,935.0 |  |  | 2,009.1 |
Other current assets |  |  | 81.8 |  |  | — |  |  | 7.3 |  |  | 16.8 |  |  | 57.7 |
Total current assets |  |  | 5,026.5 |  |  | (463.6) |  |  | 470.9 |  |  | 2,490.4 |  |  | 2,528.8 |
Property and equipment, net |  |  | 2,108.6 |  |  | — |  |  | 3.3 |  |  | 1,032.9 |  |  | 1,072.4 |
Intangible assets |  |  | 2,134.5 |  |  | — |  |  | — |  |  | 1,334.6 |  |  | 799.9 |
Equity method investments |  |  | 1,256.6 |  |  | — |  |  | 1,186.9 |  |  | — |  |  | 69.7 |
Other long-term assets |  |  | 14.4 |  |  | (2,772.7) |  |  | 2,777.8 |  |  | 4.6 |  |  | 4.7 |
Total assets |  | $ | 10,540.6 |  | $ | (3,236.3) |  | $ | 4,438.9 |  | $ | 4,862.5 |  | $ | 4,475.5 |
Floor plan notes payable |  | $ | 2,343.2 |  | $ | — |  | $ | — |  | $ | 1,272.4 |  | $ | 1,070.8 |
Floor plan notes payable — non-trade |  |  | 1,418.6 |  |  | — |  |  | 196.6 |  |  | 601.9 |  |  | 620.1 |
Accounts payable |  |  | 641.6 |  |  | — |  |  | 3.9 |  |  | 194.4 |  |  | 443.3 |
Accrued expenses |  |  | 523.5 |  |  | (463.6) |  |  | 1.0 |  |  | 165.2 |  |  | 820.9 |
Current portion of long-term debt |  |  | 72.8 |  |  | — |  |  | — |  |  | 5.5 |  |  | 67.3 |
Liabilities held for sale |  |  | 0.7 |  |  | — |  |  | — |  |  | 0.7 |  |  | — |
Total current liabilities |  |  | 5,000.4 |  |  | (463.6) |  |  | 201.5 |  |  | 2,240.1 |  |  | 3,022.4 |
Long-term debt |  |  | 2,090.4 |  |  | (150.2) |  |  | 1,809.4 |  |  | 191.6 |  |  | 239.6 |
Deferred tax liabilities |  |  | 481.5 |  |  | — |  |  | — |  |  | 480.1 |  |  | 1.4 |
Other long-term liabilities |  |  | 540.3 |  |  | — |  |  | — |  |  | 64.7 |  |  | 475.6 |
Total liabilities |  |  | 8,112.6 |  |  | (613.8) |  |  | 2,010.9 |  |  | 2,976.5 |  |  | 3,739.0 |
Total equity |  |  | 2,428.0 |  |  | (2,622.5) |  |  | 2,428.0 |  |  | 1,886.0 |  |  | 736.5 |
Total liabilities and equity |  | $ | 10,540.6 |  | $ | (3,236.3) |  | $ | 4,438.9 |  | $ | 4,862.5 |  | $ | 4,475.5 |
CONDENSED CONSOLIDATING STATEMENT OF INCOME Three Months Ended March 31, 2018
|  |  |  |  |  |  |  | Penske |  |  |  |  |  |  |
|  | Total |  |  |  |  | Automotive |  | Guarantor |  | Non-Guarantor |
|  | Company |  | Eliminations |  | Group |  | Subsidiaries |  | Subsidiaries |
Revenues |  | $ | 5,746.9 |  | $ | — |  | $ | — |  | $ | 2,856.5 |  | $ | 2,890.4 |
Cost of sales |  |  | 4,882.5 |  |  | — |  |  | — |  |  | 2,395.2 |  |  | 2,487.3 |
Gross profit |  |  | 864.4 |  |  | — |  |  | — |  |  | 461.3 |  |  | 403.1 |
Selling, general and administrative expenses |  |  | 663.1 |  |  | — |  |  | 6.5 |  |  | 343.0 |  |  | 313.6 |
Depreciation |  |  | 25.6 |  |  | — |  |  | 0.4 |  |  | 13.6 |  |  | 11.6 |
Operating income |  |  | 175.7 |  |  | — |  |  | (6.9) |  |  | 104.7 |  |  | 77.9 |
Floor plan interest expense |  |  | (18.9) |  |  | — |  |  | (1.6) |  |  | (11.3) |  |  | (6.0) |
Other interest expense |  |  | (29.8) |  |  | — |  |  | (20.8) |  |  | (1.9) |  |  | (7.1) |
Equity in earnings of affiliates |  |  | 17.3 |  |  | — |  |  | 16.0 |  |  | — |  |  | 1.3 |
Equity in earnings of subsidiaries |  |  | — |  |  | (157.9) |  |  | 157.9 |  |  | — |  |  | — |
Income from continuing operations before income taxes |  |  | 144.3 |  |  | (157.9) |  |  | 144.6 |  |  | 91.5 |  |  | 66.1 |
Income taxes |  |  | (36.6) |  |  | 40.0 |  |  | (36.6) |  |  | (25.2) |  |  | (14.8) |
Income from continuing operations |  |  | 107.7 |  |  | (117.9) |  |  | 108.0 |  |  | 66.3 |  |  | 51.3 |
Income from discontinued operations, net of tax |  |  | 0.1 |  |  | (0.1) |  |  | 0.1 |  |  | 0.1 |  |  | — |
Net income |  |  | 107.8 |  |  | (118.0) |  |  | 108.1 |  |  | 66.4 |  |  | 51.3 |
Other comprehensive income, net of tax |  |  | 31.8 |  |  | (31.5) |  |  | 31.8 |  |  | — |  |  | 31.5 |
Comprehensive income |  |  | 139.6 |  |  | (149.5) |  |  | 139.9 |  |  | 66.4 |  |  | 82.8 |
Less: Comprehensive loss attributable to non-controlling interests |  |  | (0.3) |  |  | — |  |  | — |  |  | — |  |  | (0.3) |
Comprehensive income attributable to Penske Automotive Group common stockholders |  | $ | 139.9 |  | $ | (149.5) |  | $ | 139.9 |  | $ | 66.4 |  | $ | 83.1 |
CONDENSED CONSOLIDATING STATEMENT OF INCOME Three Months Ended March 31, 2017
|  |  |  |  |  |  |  | Penske |  |  |  |  |  |  |
|  | Total |  |  |  |  | Automotive |  | Guarantor |  | Non-Guarantor |
|  | Company |  | Eliminations |  | Group |  | Subsidiaries |  | Subsidiaries |
Revenues |  | $ | 5,081.1 |  | $ | — |  | $ | — |  | $ | 2,667.9 |  | $ | 2,413.2 |
Cost of sales |  |  | 4,306.8 |  |  | — |  |  | — |  |  | 2,231.2 |  |  | 2,075.6 |
Gross profit |  |  | 774.3 |  |  | — |  |  | — |  |  | 436.7 |  |  | 337.6 |
Selling, general and administrative expenses |  |  | 601.7 |  |  | — |  |  | 6.0 |  |  | 338.4 |  |  | 257.3 |
Depreciation |  |  | 22.4 |  |  | — |  |  | 0.4 |  |  | 12.7 |  |  | 9.3 |
Operating income |  |  | 150.2 |  |  | — |  |  | (6.4) |  |  | 85.6 |  |  | 71.0 |
Floor plan interest expense |  |  | (13.7) |  |  | — |  |  | (1.0) |  |  | (8.4) |  |  | (4.3) |
Other interest expense |  |  | (25.0) |  |  | — |  |  | (16.5) |  |  | (2.1) |  |  | (6.4) |
Equity in earnings of affiliates |  |  | 13.2 |  |  | — |  |  | 12.5 |  |  | — |  |  | 0.7 |
Equity in earnings of subsidiaries |  |  | — |  |  | (135.7) |  |  | 135.7 |  |  | — |  |  | — |
Income from continuing operations before income taxes |  |  | 124.7 |  |  | (135.7) |  |  | 124.3 |  |  | 75.1 |  |  | 61.0 |
Income taxes |  |  | (41.1) |  |  | 44.9 |  |  | (41.1) |  |  | (32.6) |  |  | (12.3) |
Income from continuing operations |  |  | 83.6 |  |  | (90.8) |  |  | 83.2 |  |  | 42.5 |  |  | 48.7 |
Loss from discontinued operations, net of tax |  |  | (0.6) |  |  | 0.6 |  |  | (0.6) |  |  | (0.6) |  |  | — |
Net income |  |  | 83.0 |  |  | (90.2) |  |  | 82.6 |  |  | 41.9 |  |  | 48.7 |
Other comprehensive income, net of tax |  |  | 26.1 |  |  | (23.5) |  |  | 26.1 |  |  | — |  |  | 23.5 |
Comprehensive income |  |  | 109.1 |  |  | (113.7) |  |  | 108.7 |  |  | 41.9 |  |  | 72.2 |
Less: Comprehensive income attributable to non-controlling interests |  |  | 0.8 |  |  | (0.4) |  |  | 0.4 |  |  | — |  |  | 0.8 |
Comprehensive income attributable to Penske Automotive Group common stockholders |  | $ | 108.3 |  | $ | (113.3) |  | $ | 108.3 |  | $ | 41.9 |  | $ | 71.4 |
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Three Months Ended March 31, 2018
|  |  |  |  | Penske |  |  |  |  |  |  |
|  | Total |  | Automotive |  | Guarantor |  | Non-Guarantor |
|  | Company |  | Group |  | Subsidiaries |  | Subsidiaries |
Net cash provided by (used in) continuing operating activities |  | $ | 174.8 |  | $ | (23.0) |  | $ | 137.0 |  | $ | 60.8 |
Investing activities: |  |  |  |  |  |  |  |  |  |  |  |  |
Purchase of equipment and improvements |  |  | (64.7) |  |  | (1.1) |  |  | (38.6) |  |  | (25.0) |
Proceeds from sale of dealerships |  |  | 58.4 |  |  | — |  |  | 55.9 |  |  | 2.5 |
Acquisitions, net |  |  | (156.5) |  |  | — |  |  | — |  |  | (156.5) |
Other |  |  | (6.3) |  |  | (1.6) |  |  | — |  |  | (4.7) |
Net cash (used in) provided by continuing investing activities |  |  | (169.1) |  |  | (2.7) |  |  | 17.3 |  |  | (183.7) |
Financing activities: |  |  |  |  |  |  |  |  |  |  |  |  |
Net borrowings (repayments) of long-term debt |  |  | 84.6 |  |  | (44.0) |  |  | 9.3 |  |  | 119.3 |
Net (repayments) borrowings of floor plan notes payable — non-trade |  |  | (4.8) |  |  | 1.0 |  |  | (43.2) |  |  | 37.4 |
Repurchases of common stock |  |  | (50.0) |  |  | (50.0) |  |  | — |  |  | — |
Dividends |  |  | (29.2) |  |  | (29.2) |  |  | — |  |  | — |
Distributions from (to) parent |  |  | — |  |  | 147.9 |  |  | (135.3) |  |  | (12.6) |
Net cash provided by (used in) continuing financing activities |  |  | 0.6 |  |  | 25.7 |  |  | (169.2) |  |  | 144.1 |
Net cash provided by discontinued operations |  |  | 0.1 |  |  | — |  |  | 0.1 |  |  | — |
Effect of exchange rate changes on cash and cash equivalents |  |  | 0.7 |  |  | — |  |  | — |  |  | 0.7 |
Net change in cash and cash equivalents |  |  | 7.1 |  |  | — |  |  | (14.8) |  |  | 21.9 |
Cash and cash equivalents, beginning of period |  |  | 45.7 |  |  | — |  |  | 14.8 |  |  | 30.9 |
Cash and cash equivalents, end of period |  | $ | 52.8 |  | $ | — |  | $ | — |  | $ | 52.8 |
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Three Months Ended March 31, 2017
|  |  |  |  | Penske |  |  |  |  |  |  |
|  | Total |  | Automotive |  | Guarantor |  | Non-Guarantor |
|  | Company |  | Group |  | Subsidiaries |  | Subsidiaries |
Net cash provided by (used in) continuing operating activities |  | $ | 198.6 |  | $ | (17.1) |  | $ | 127.1 |  | $ | 88.6 |
Investing activities: |  |  |  |  |  |  |  |  |  |  |  |  |
Purchase of equipment and improvements |  |  | (36.9) |  |  | (0.4) |  |  | (20.1) |  |  | (16.4) |
Proceeds from sale of dealerships |  |  | 9.0 |  |  | — |  |  | 9.0 |  |  | — |
Acquisitions, net |  |  | (314.2) |  |  | — |  |  | (199.2) |  |  | (115.0) |
Net cash used in continuing investing activities |  |  | (342.1) |  |  | (0.4) |  |  | (210.3) |  |  | (131.4) |
Financing activities: |  |  |  |  |  |  |  |  |  |  |  |  |
Net borrowings of long-term debt |  |  | 153.1 |  |  | 47.0 |  |  | 12.7 |  |  | 93.4 |
Net borrowings (repayments) of floor plan notes payable — non-trade |  |  | 63.0 |  |  | (1.2) |  |  | 59.4 |  |  | 4.8 |
Repurchases of common stock |  |  | (2.7) |  |  | (2.7) |  |  | — |  |  | — |
Dividends |  |  | (25.6) |  |  | (25.6) |  |  | — |  |  | — |
Distributions from (to) parent |  |  | — |  |  | — |  |  | 0.7 |  |  | (0.7) |
Net cash provided by continuing financing activities |  |  | 187.8 |  |  | 17.5 |  |  | 72.8 |  |  | 97.5 |
Net cash provided by discontinued operations |  |  | 2.5 |  |  | — |  |  | 2.5 |  |  | — |
Effect of exchange rate changes on cash and cash equivalents |  |  | 1.4 |  |  | — |  |  | — |  |  | 1.4 |
Net change in cash and cash equivalents |  |  | 48.2 |  |  | — |  |  | (7.9) |  |  | 56.1 |
Cash and cash equivalents, beginning of period |  |  | 24.0 |  |  | — |  |  | 9.4 |  |  | 14.6 |
Cash and cash equivalents, end of period |  | $ | 72.2 |  | $ | — |  | $ | 1.5 |  | $ | 70.7 |

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- Definition The entire disclosure for condensed financial statements. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 3 -Subparagraph (SX 210.12-04) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e24072-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=84161450&loc=d3e5614-111684 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 270 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.10-01(a)) -URI http://asc.fasb.org/extlink&oid=27015980&loc=d3e46468-122699 + Details
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