Consolidating Condensed Financial Information (Tables)

9 Months Ended

Sep. 30, 2012

Consolidating Condensed Financial Information

CONDENSED CONSOLIDATING BALANCE SHEET

CONDENSED CONSOLIDATING BALANCE SHEET

September 30, 2012

	Total Company		Eliminations			Penske Automotive Group		Guarantor Subsidiaries		Non-Guarantor Subsidiaries
	(In thousands)
Cash and cash equivalents	$	25,935	$	—		$	—	$	17,573	$	8,362
Accounts receivable, net	505,770		(335,225		)	335,225		251,951		253,819
Inventories	1,864,773		—			—		1,088,681		776,092
Other current assets	91,204		—			4,359		39,216		47,629
Assets held for sale	38,005		—			—		14,261		23,744
Total current assets	2,525,687		(335,225		)	339,584		1,411,682		1,109,646
Property and equipment, net	961,488		—			4,527		593,139		363,822
Intangible assets	1,210,959		—			—		705,790		505,169
Equity method investments	304,101		—			256,258		—		47,843
Other long-term assets	21,945		(1,416,874		)	1,430,869		5,378		2,572
Total assets	$	5,024,180	$	(1,752,099	)	$	2,031,238	$	2,715,989	$	2,029,052
Floor plan notes payable	$	1,254,895	$	—		$	—	$	709,549	$	545,346
Floor plan notes payable — non-trade	704,280		—			100,255		335,054		268,971
Accounts payable	275,032		—			2,447		111,342		161,243
Accrued expenses	259,146		(335,225		)	145		142,064		452,162
Current portion of long-term debt	14,929		—			—		3,746		11,183
Liabilities held for sale	34,124		—			—		11,038		23,086
Total current liabilities	2,542,406		(335,225		)	102,847		1,312,793		1,461,991
Long-term debt	815,918		(38,382		)	660,000		75,129		119,171
Deferred tax liabilities	231,999		—			—		205,955		26,044
Other long-term liabilities	165,466		—			—		93,724		71,742
Total liabilities	3,755,789		(373,607		)	762,847		1,687,601		1,678,948
Total equity	1,268,391		(1,378,492		)	1,268,391		1,028,388		350,104
Total liabilities and equity	$	5,024,180	$	(1,752,099	)	$	2,031,238	$	2,715,989	$	2,029,052

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2011

	Total Company		Eliminations			Penske Automotive Group		Guarantor Subsidiaries		Non-Guarantor Subsidiaries
	(In thousands)
Cash and cash equivalents	$	28,676	$	—		$	—	$	27,249	$	1,427
Accounts receivable, net	438,769		(297,782		)	305,386		281,689		149,476
Inventories	1,572,568		—			—		894,246		678,322
Other current assets	80,179		—			2,306		40,321		37,552
Assets held for sale	81,122		—			—		36,642		44,480
Total current assets	2,201,314		(297,782		)	307,692		1,280,147		911,257
Property and equipment, net	856,674		—			6,730		547,731		302,213
Intangible assets	1,132,181		—			—		699,453		432,728
Equity method investments	298,640		—			246,658		—		51,982
Other long-term assets	13,490		(1,360,808		)	1,369,182		3,381		1,735
Total assets	$	4,502,299	$	(1,658,590	)	$	1,930,262	$	2,530,712	$	1,699,915
Floor plan notes payable	$	977,548	$	—		$	—	$	560,999	$	416,549
Floor plan notes payable — non-trade	691,888		—			90,892		335,621		265,375
Accounts payable	220,538		—			1,633		112,805		106,100
Accrued expenses	201,179		(297,782		)	—		99,092		399,869
Current portion of long-term debt	3,414		—			—		3,414		—
Liabilities held for sale	55,820		—			—		17,818		38,002
Total current liabilities	2,150,387		(297,782		)	92,525		1,129,749		1,225,895
Long-term debt	846,777		(38,073		)	697,324		77,060		110,466
Deferred tax liabilities	217,902		—			—		198,348		19,554
Other long-term liabilities	146,820		—			—		92,613		54,207
Total liabilities	3,361,886		(335,855		)	789,849		1,497,770		1,410,122
Total equity	1,140,413		(1,322,735		)	1,140,413		1,032,942		289,793
Total liabilities and equity	$	4,502,299	$	(1,658,590	)	$	1,930,262	$	2,530,712	$	1,699,915

CONDENSED CONSOLIDATING STATEMENT OF INCOME

CONDENSED CONSOLIDATING STATEMENT OF INCOME

Three Months Ended September 30, 2012

	Total Company			Eliminations			Penske Automotive Group			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
	(In thousands)
Revenues	$	3,401,409		$	—		$	—		$	2,008,394		$	1,393,015
Cost of sales	2,890,413			—			—			1,697,032			1,193,381
Gross profit	510,996			—			—			311,362			199,634
Selling, general and administrative expenses	409,432			—			5,073			245,553			158,806
Depreciation	14,037			—			328			7,661			6,048
Operating income (loss)	87,527			—			(5,401		)	58,148			34,780
Floor plan interest expense	(10,055		)	—			(2,322		)	(4,320		)	(3,413		)
Other interest expense	(11,689		)	—			(7,695		)	(804		)	(3,190		)
Equity in earnings of affiliates	8,814			—			7,784			—			1,030
Equity in earnings of subsidiaries	—			(81,949		)	81,949			—			—
Debt redemption costs	(17,753		)	—			(17,753		)	—			—
Income (loss) from continuing operations before income taxes	56,844			(81,949		)	56,562			53,024			29,207
Income taxes	(15,308		)	22,179			(15,308		)	(14,717		)	(7,462		)
Income (loss) from continuing operations	41,536			(59,770		)	41,254			38,307			21,745
(Loss) income from discontinued operations, net of tax	(223		)	223			(223		)	242			(465		)
Net income (loss)	41,313			(59,547		)	41,031			38,549			21,280
Other comprehensive income (loss), net of tax	17,948			(16,882		)	17,948			175			16,707
Comprehensive income	59,261			(76,429		)	58,979			38,724			37,987
Less: Comprehensive income attributable to non-controlling interest	489			(207		)	207			—			489
Comprehensive income attributable to Penske Automotive Group common stockholders	$	58,772		$	(76,222	)	$	58,772		$	38,724		$	37,498

CONDENSED CONSOLIDATING STATEMENT OF INCOME
Three Months Ended September 30, 2011

	Total Company			Eliminations			Penske Automotive Group			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
	(In thousands)
Revenues	$	2,898,441		$	—		$	—		$	1,704,606		$	1,193,835
Cost of sales	2,437,678			—			—			1,417,915			1,019,763
Gross profit	460,763			—			—			286,691			174,072
Selling, general and administrative expenses	369,783			—			4,381			225,818			139,584
Depreciation	12,427			—			471			6,655			5,301
Operating income (loss)	78,553			—			(4,852		)	54,218			29,187
Floor plan interest expense	(6,837		)	—			(449		)	(3,194		)	(3,194		)
Other interest expense	(11,153		)	—			(6,347		)	(988		)	(3,818		)
Debt discount amortization	—			—			—			—			—
Equity in earnings (losses) of affiliates	9,623			—			7,359			825			1,439
Equity in earnings of subsidiaries	—			(74,137		)	74,137			—			—
Income (loss) from continuing operations before income taxes	70,186			(74,137		)	69,848			50,861			23,614
Income taxes	(13,246		)	14,064			(13,246		)	(7,281		)	(6,783		)
Income (loss) from continuing operations	56,940			(60,073		)	56,602			43,580			16,831
(Loss) income from discontinued operations, net of tax	(895		)	895			(895		)	(754		)	(141		)
Net income (loss)	56,045			(59,178		)	55,707			42,826			16,690
Other comprehensive income (loss), net of tax	(25,827		)	26,327			(25,827		)	(5,379		)	(20,948		)
Comprehensive income	30,218			(32,851		)	29,880			37,447			(4,258		)
Less: Comprehensive income attributable to non-controlling interest	338			—			—			—			338
Comprehensive income attributable to Penske Automotive Group common stockholders	$	29,880		$	(32,851	)	$	29,880		$	37,447		$	(4,596	)

CONDENSED CONSOLIDATING STATEMENT OF INCOME
Nine Months Ended September 30, 2012

	Total Company			Eliminations			Penske Automotive Group			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
	(In thousands)
Revenues	$	10,006,631		$	—		$	—		$	5,852,620		$	4,154,011
Cost of sales	8,477,057			—			—			4,923,776			3,553,281
Gross profit	1,529,574			—			—			928,844			600,730
Selling, general and administrative expenses	1,216,231			—			14,408			732,673			469,150
Depreciation	41,013			—			936			22,258			17,819
Operating income (loss)	272,330			—			(15,344		)	173,913			113,761
Floor plan interest expense	(29,675		)	—			(6,774		)	(12,309		)	(10,592		)
Other interest expense	(35,474		)	—			(21,986		)	(2,668		)	(10,820		)
Equity in earnings (losses) of affiliates	21,392			—			18,538			—			2,854
Equity in earnings of subsidiaries	—			(253,149		)	253,149			—			—
Debt redemption costs	(17,753		)	—			(17,753		)	—			—
Income (loss) from continuing operations before income taxes	210,820			(253,149		)	209,830			158,936			95,203
Income taxes	(69,052		)	83,308			(69,052		)	(59,469		)	(23,839		)
Income (loss) from continuing operations	141,768			(169,841		)	140,778			99,467			71,364
(Loss) income from discontinued operations, net of tax	(3,837		)	3,837			(3,837		)	(1,755		)	(2,082		)
Net income (loss)	137,931			(166,004		)	136,941			97,712			69,282
Other comprehensive income (loss), net of tax	17,758			(15,150		)	17,758			(74		)	15,224
Comprehensive income	155,689			(181,154		)	154,699			97,638			84,506
Less: Comprehensive income attributable to non-controlling interest	1,197			(207		)	207			—			1,197
Comprehensive income attributable to Penske Automotive Group common stockholders	$	154,492		$	(180,947	)	$	154,492		$	97,638		$	83,309

CONDENSED CONSOLIDATING STATEMENT OF INCOME
Nine Months Ended September 30, 2011

	Total Company			Eliminations			Penske Automotive Group			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
	(In thousands)
Revenues	$	8,466,560		$	—		$	—		$	4,902,510		$	3,564,050
Cost of sales	7,112,376			—			—			4,071,715			3,040,661
Gross profit	1,354,184			—			—			830,795			523,389
Selling, general and administrative expenses	1,098,132			—			14,120			671,606			412,406
Depreciation	36,132			—			1,013			19,450			15,669
Operating income (loss)	219,920			—			(15,133		)	139,739			95,314
Floor plan interest expense	(20,617		)	—			(911		)	(10,414		)	(9,292		)
Other interest expense	(32,889		)	—			(18,581		)	(2,237		)	(12,071		)
Debt discount amortization	(1,718		)	—			(1,718		)	—			—
Equity in earnings (losses) of affiliates	17,527			—			14,711			825			1,991
Equity in earnings of subsidiaries	—			(202,948		)	202,948			—			—
Income (loss) from continuing operations before income taxes	182,223			(202,948		)	181,316			127,913			75,942
Income taxes	(49,289		)	55,235			(49,289		)	(33,581		)	(21,654		)
Income (loss) from continuing operations	132,934			(147,713		)	132,027			94,332			54,288
(Loss) income from discontinued operations, net of tax	(2,833		)	2,833			(2,833		)	(2,351		)	(482		)
Net income (loss)	130,101			(144,880		)	129,194			91,981			53,806
Other comprehensive income (loss), net of tax	(10,782		)	10,301			(10,782		)	(9,093		)	(1,208		)
Comprehensive income	119,319			(134,579		)	118,412			82,888			52,598
Less: Comprehensive income attributable to non-controlling interest	907			—			—			—			907
Comprehensive income attributable to Penske Automotive Group common stockholders	$	118,412		$	(134,579	)	$	118,412		$	82,888		$	51,691

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Nine Months Ended September 30, 2012

	Total Company			Penske Automotive Group			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
	(In thousands)
Net cash from continuing operating activities	$	264,612		$	95,748		$	34,840		$	134,024
Investing activities:
Purchase of equipment and improvements	(96,447		)	(766		)	(67,192		)	(28,489		)
Proceeds from sale-leaseback transactions	1,584			—			—			1,584
Dealership acquisitions, net	(137,805		)	—			(3,416		)	(134,389		)
Other	3,496			(3,812		)	—			7,308
Net cash from continuing investing activities	(229,172		)	(4,578		)	(70,608		)	(153,986		)
Financing activities:
Issuance of 5.75% senior subordinated notes	550,000			550,000			—			—
Repurchase of 7.75% senior subordinated notes	(390,755		)	(390,755		)	—			—
Repurchase of 3.5% senior subordinated convertible notes	(62,687		)	(62,687		)
Net borrowings (repayments) of other long-term debt	(133,913		)	(149,000		)	(1,598		)	16,685
Net borrowings (repayments) of floor plan notes payable — non-trade	29,681			9,363			11,179			9,139
Repurchase of common stock	(9,829		)	(9,829		)	—			—
Dividends	(29,760		)	(29,760		)	—			—
Payment of deferred financing fees	(8,502		)	(8,502		)	—			—
Distributions from (to) parent	—			—			4,747			(4,747		)
Net cash from continuing financing activities	(55,765		)	(91,170		)	14,328			21,077
Net cash from discontinued operations	17,584			—			11,764			5,820
Net change in cash and cash equivalents	(2,741		)	—			(9,676		)	6,935
Cash and cash equivalents, beginning of period	28,676			—			27,249			1,427
Cash and cash equivalents, end of period	$	25,935		$	—		$	17,573		$	8,362

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Nine Months Ended September 30, 2011

	Total Company			Penske Automotive Group			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
	(In thousands)
Net cash from continuing operating activities	$	180,110		$	(39,647	)	$	226,147		$	(6,390	)
Investing activities:
Purchase of equipment and improvements	(79,770		)	(1,972		)	(44,629		)	(33,169		)
Dealership acquisitions, net	(232,106		)	—			(230,426		)	(1,680		)
Other	2,865			—			—			2,865
Net cash from continuing investing activities	(309,011		)	(1,972		)	(275,055		)	(31,984		)
Financing activities:
Repurchase of 3.5% senior subordinated convertible notes	(87,278		)	(87,278		)	—			—
Net borrowings (repayments) of other long-term debt	151,807			120,000			57,015			(25,208		)
Net borrowings (repayments) of floor plan notes payable — non-trade	98,131			64,008			(32,995		)	67,118
Proceeds from exercises of options, including excess tax benefit	3,018			3,018			—			—
Repurchase of common stock	(44,263		)	(44,263		)	—			—
Dividends	(13,866		)	(13,866		)	—			—
Distributions from (to) parent	—			—			5,572			(5,572		)
Net cash from continuing financing activities	107,549			41,619			29,592			36,338
Net cash from discontinued operations	11,347			—			10,151			1,196
Net change in cash and cash equivalents	(10,005		)	—			(9,165		)	(840		)
Cash and cash equivalents, beginning of period	19,904			—			15,411			4,493
Cash and cash equivalents, end of period	$	9,899		$	—		$	6,246		$	3,653