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Related Party Transactions | 12 Months Ended
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Dec. 31, 2023
Related Party Transactions [Abstract] |
Related Party Transactions | Related Party Transactions We sometimes pay to and/or receive fees from Penske Corporation, its subsidiaries, and its affiliates for services rendered in the ordinary course of business or to reimburse payments made to third parties on each other's behalf. These transactions are reviewed periodically by our Audit Committee and reflect the provider's cost or an amount mutually agreed upon by both parties. During 2023, 2022, and 2021, Penske Corporation and its affiliates billed us $5.3 million, $5.1 million, and $6.7 million, respectively, and we billed Penske Corporation and its affiliates $1.3 million, $1.3 million, and $38 thousand, respectively, for such services. As of December 31, 2023, and 2022, we had $44 thousand and $50 thousand of receivables from, and $0.5 million and $0.6 million of payables to, Penske Corporation and its subsidiaries, respectively. Our officers, directors, and their affiliates periodically purchase, lease, or sell vehicles and parts from us or PTS at fair market value. This includes purchases and sales of trucks, logistics, and other services and parts as between our subsidiaries and those of PTS (principally consisting of purchases of $42.3 million of trucks and parts by PTS from our PTG subsidiaries and purchases of $2.7 million of used trucks and towing services by PTG from PTS). PTS is owned 41.1% by Penske Corporation, 28.9% by us, and 30.0% by Mitsui. The PTS partnership agreement, among other things, provides us with specified partner distribution and governance rights and restricts our ability to transfer our interest. The partnership has an eleven-member Advisory Board. We have the right to appoint one Advisory Board member and appointed Robert H. Kurnick, Jr., our President. Lisa Davis and Michael Eisenson, our directors, are also members of the Advisory Board. We have the right to pro rata quarterly distributions equal to at least 50% of PTS' consolidated net income, as well as specified minority rights which require our and/or Mitsui's consent for certain actions taken by PTS as specified in the PTS partnership agreement. We are able to transfer our directly owned interests with the unanimous consent of the other partners or if we provide the remaining partners with a right of first offer to acquire our interests, except that we may transfer up to 9.02% of our interest to Penske Corporation without complying with the right of first offer to the remaining partner. We and Penske Corporation have agreed that (1) in the event of any transfer by Penske Corporation of their partnership interests to a third party, we will be entitled to “tag-along” by transferring a pro rata amount of our partnership interests on similar terms and conditions, and (2) Penske Corporation is entitled to a right of first refusal in the event of any transfer of our partnership interests, subject to the terms of the partnership agreement. Additionally, PTS has agreed to indemnify the general partner for any actions in connection with managing PTS, except those taken in bad faith or in violation of the partnership agreement. The partnership agreement allows Penske Corporation to give notice to require PTS to begin to effect an initial public offering of equity securities, subject to certain limitations, as soon as practicable after the first anniversary of the initial notice, and beginning in 2025, we and Mitsui continue to have a similar right to require PTS to begin an initial public offering of equity securities, subject to certain limitations, as soon as reasonably practicable. The term of the partnership agreement is indefinite. In 2023, 2022, and 2021, we received $168.8 million, $356.6 million, and $165.5 million, respectively, from PTS in pro rata cash dividends. In 2014, we formed a venture with PTS, Penske Commercial Leasing Australia. This venture combines PTS' fleet operations expertise with our market knowledge of commercial vehicles to rent heavy-duty commercial vehicles in Australia. This venture is accounted for as an equity method investment as discussed in Note 4. On December 22, 2023, we entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Penske Investments Limited Partnership, a Nevada partnership owned by entities affiliated with our Chair and Chief Executive Officer Roger S. Penske (“PILP”), to acquire all of the issued and outstanding capital stock of Don Allen Auto Service, Inc., a Massachusetts corporation (the “Dealership Entity”), for an initial purchase price of $12,340,000 in cash, subject to certain adjustments. The Dealership Entity owns Don Allen Ford Nantucket and Don Allen Chrysler Dodge Jeep Ram (the “Dealerships”) located in Nantucket, MA, as well as associated real property. Under the terms of the Purchase Agreement, the purchase price was to be increased or decreased after the closing based on the finally determined net worth of the Dealership Entity as of the closing date compared to a net worth target based on the Dealership Entity’s historical assets and liabilities. We closed the transactions contemplated by the Purchase Agreement on January 16, 2024. Joint Venture Relationships From time to time, we enter into joint venture relationships in the ordinary course of business, pursuant to which we own and operate automotive dealerships together with other investors. We may also provide these dealerships with working capital and other debt financing at costs that are based on our incremental borrowing rate. As of December 31, 2023, our automotive joint venture relationships were as follows:
Location |  | Dealerships |  | Ownership Interest
Fairfield, Connecticut |  | Audi, Mercedes-Benz, Sprinter, Porsche |  | 80.00% | (A)
Greenwich, Connecticut |  | Mercedes-Benz |  | 80.00% | (A)
Northern Italy |  | BMW, MINI, Maserati, Porsche, Audi, Jaguar, Land Rover, Volvo, Mercedes-Benz, smart, Lamborghini |  | 84.10% | (A)
Frankfurt, Germany |  | Lexus, Toyota, Volkswagen |  | 50.00% | (B)
Barcelona, Spain |  | BMW, MINI |  | 50.00% | (B)
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(A) Entity is consolidated in our financial statements.
(B) Entity is accounted for using the equity method of accounting.
As noted above, we are party to non-automotive joint ventures representing our investments in PTS (28.9%) and Penske Commercial Leasing Australia (28%) that are accounted for under the equity method, as more fully discussed in Note 4.

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