Consolidating Condensed Financial Information (Tables)

6 Months Ended

Jun. 30, 2013

Consolidating Condensed Financial Information

CONDENSED CONSOLIDATING BALANCE SHEET
June 30, 2013

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

Cash and cash equivalents	$	26,254	$	—		$	—	$	759	$	25,495
Accounts receivable, net	530,647		(364,074		)	364,074		328,455		202,192
Inventories	2,125,771		—			—		1,318,613		807,158
Other current assets	90,352		—			7,068		33,953		49,331
Assets held for sale	33,849		—			—		15,984		17,865

Total current assets	2,806,873		(364,074		)	371,142		1,697,764		1,102,041
Property and equipment, net	1,148,495		—			4,356		789,341		354,798
Intangible assets	1,231,166		—			—		767,816		463,350
Equity method investments	332,503		—			273,827		—		58,676
Other long-term assets	18,595		(1,490,576		)	1,503,443		4,030		1,698

Total assets	$	5,537,632	$	(1,854,650	)	$	2,152,768	$	3,258,951	$	1,980,563

Floor plan notes payable	$	1,474,440	$	—		$	—	$	962,001	$	512,439
Floor plan notes payable — non-trade	753,130		—			122,700		340,030		290,400
Accounts payable	314,050		—			3,338		130,711		180,001
Accrued expenses	226,968		(364,074		)	465		129,726		460,851
Current portion of long-term debt	44,896		—			—		35,769		9,127
Liabilities held for sale	23,547		—			—		9,598		13,949

Total current liabilities	2,837,031		(364,074		)	126,503		1,607,835		1,466,767
Long-term debt	875,307		(38,182		)	670,000		175,856		67,633
Deferred tax liabilities	313,756		—			—		288,245		25,511
Other long-term liabilities	155,273		—			—		79,733		75,540

Total liabilities	4,181,367		(402,256		)	796,503		2,151,669		1,635,451
Total equity	1,356,265		(1,452,394		)	1,356,265		1,107,282		345,112

Total liabilities and equity	$	5,537,632	$	(1,854,650	)	$	2,152,768	$	3,258,951	$	1,980,563

CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2012

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

Cash and cash equivalents	$	43,447	$	—		$	—	$	36,478	$	6,969
Accounts receivable, net	554,851		(340,917		)	340,917		375,442		179,409
Inventories	2,000,206		—			—		1,212,521		787,685
Other current assets	90,485		—			3,546		55,841		31,098
Assets held for sale	73,398		—			—		29,400		43,998

Total current assets	2,762,387		(340,917		)	344,463		1,709,682		1,049,159
Property and equipment, net	1,031,188		—			4,474		662,722		363,992
Intangible assets	1,261,299		—			—		760,321		500,978
Equity method investments	303,160		—			252,816		—		50,344
Other long-term assets	20,956		(1,527,156		)	1,540,447		5,029		2,636

Total assets	$	5,378,990	$	(1,868,073	)	$	2,142,200	$	3,137,754	$	1,967,109

Floor plan notes payable	$	1,408,362	$	—		$	—	$	917,391	$	490,971

Floor plan notes payable — non-trade	725,526		—			112,085		346,683		266,758
Accounts payable	263,881		—			3,344		124,663		135,874
Accrued expenses	223,972		(340,917		)	450		114,636		449,803
Current portion of long-term debt	19,493		—			—		9,745		9,748
Liabilities held for sale	51,279		—			—		17,766		33,513

Total current liabilities	2,692,513		(340,917		)	115,879		1,530,884		1,386,667
Long-term debt	918,024		(38,692		)	710,000		121,618		125,098
Deferred tax liabilities	287,818		—			—		260,445		27,373
Other long-term liabilities	164,314		—			—		85,151		79,163

Total liabilities	4,062,669		(379,609		)	825,879		1,998,098		1,618,301
Total equity	1,316,321		(1,488,464		)	1,316,321		1,139,656		348,808

Total liabilities and equity	$	5,378,990	$	(1,868,073	)	$	2,142,200	$	3,137,754	$	1,967,109

CONDENSED CONSOLIDATING STATEMENT OF INCOME

CONDENSED CONSOLIDATING STATEMENT OF INCOME
Three Months Ended June 30, 2013

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

Revenues	$	3,699,175		$	—		$	—		$	2,285,609		$	1,413,566
Cost of sales	3,130,152			—			—			1,913,900			1,216,252

Gross profit	569,023			—			—			371,709			197,314
Selling, general and administrative expenses	440,331			—			4,695			281,360			154,276
Depreciation	14,985			—			411			8,843			5,731

Operating income (loss)	113,707			—			(5,106		)	81,506			37,307
Floor plan interest expense	(10,900		)	—			(2,459		)	(5,219		)	(3,222		)
Other interest expense	(12,066		)	—			(6,668		)	(1,196		)	(4,202		)
Equity in earnings of affiliates	8,901			—			6,918			—			1,983
Equity in earnings of subsidiaries	—			(106,504		)	106,504			—			—

Income (loss) from continuing operations before income taxes	99,642			(106,504		)	99,189			75,091			31,866
Income taxes	(35,164		)	37,757			(35,164		)	(29,130		)	(8,627		)

Income (loss) from continuing operations	64,478			(68,747		)	64,025			45,961			23,239
(Loss) income from discontinued operations, net of tax	(1,983		)	1,983			(1,983		)	(540		)	(1,443		)

Net income (loss)	62,495			(66,764		)	62,042			45,421			21,796
Other comprenhensive income (loss), net of tax	2,981			(2,676		)	2,981			1,122			1,554

Comprehensive income	65,476			(69,440		)	65,023			46,543			23,350
Less: Comprehensive income attributable to the non-controlling interests	453			—			—			—			453

Comprehensive income attributable to Penske Automotive Group common stockholders	$	65,023		$	(69,440	)	$	65,023		$	46,543		$	22,897

CONDENSED CONSOLIDATING STATEMENT OF INCOME
Three Months Ended June 30, 2012

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

Revenues	$	3,315,051		$	—		$	—		$	2,001,589		$	1,313,462
Cost of sales	2,810,080			—			—			1,681,433			1,128,647

Gross profit	504,971			—			—			320,156			184,815
Selling, general and administrative expenses	400,637			—			4,740			247,494			148,403
Depreciation	13,319			—			246			7,394			5,679

Operating income (loss)	91,015			—			(4,986		)	65,268			30,733
Floor plan interest expense	(9,845		)	—			(2,254		)	(4,175		)	(3,416		)
Other interest expense	(11,478		)	—			(7,079		)	(603		)	(3,796		)
Equity in earnings (losses) of affiliates	8,168			—			6,994			(40		)	1,214
Equity in earnings of subsidiaries	—			(84,665		)	84,665			—			—

Income (loss) from continuing operations before income taxes	77,860			(84,665		)	77,340			60,450			24,735
Income taxes	(27,093		)	29,659			(27,093		)	(23,227		)	(6,432		)

Income (loss) from continuing operations	50,767			(55,006		)	50,247			37,223			18,303
(Loss) income from discontinued operations, net of tax	(1,155		)	1,155			(1,155		)	(399		)	(756		)

Net income (loss)	49,612			(53,851		)	49,092			36,824			17,547
Other comprehensive income (loss), net of tax	(10,896		)	11,430			(10,896		)	(15		)	(11,415		)

Comprehensive income	38,716			(42,421		)	38,196			36,809			6,132
Less: Comprehensive income attributable to non-controlling interests	520			—			—			—			520
Comprehensive income attributable to Penske Automotive Group common stockholders	$	38,196		$	(42,421	)	$	38,196		$	36,809		$	5,612

CONDENSED CONSOLIDATING STATEMENT OF INCOME
Six Months Ended June 30, 2013

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

Revenues	$	7,103,774		$	—		$	—		$	4,319,855		$	2,783,919
Cost of sales	6,000,544			—			—			3,612,699			2,387,845

Gross profit	1,103,230			—			—			707,156			396,074
Selling, general and administrative expenses	854,770			—			9,853			540,027			304,890
Depreciation	29,516			—			789			17,205			11,522

Operating income (loss)	218,944			—			(10,642		)	149,924			79,662
Floor plan interest expense	(21,168		)	—			(4,746		)	(10,093		)	(6,329		)
Other interest expense	(23,793		)	—			(13,395		)	(2,263		)	(8,135		)
Equity in earnings (losses) of affiliates	11,249			—			8,830			—			2,419
Equity in earnings of subsidiaries	—			(204,038		)	204,038			—			—

Income (loss) from continuing operations before income taxes	185,232			(204,038		)	184,085			137,568			67,617
Income taxes	(63,571		)	70,461			(63,571		)	(53,709		)	(16,752		)

Income (loss) from continuing operations	121,661			(133,577		)	120,514			83,859			50,865
(Loss) income from discontinued operations, net of tax	(1,147		)	808			(808		)	(33		)	(1,114		)

Net income (loss)	120,514			(132,769		)	119,706			83,826			49,751
Other comprehensive income (loss), net of tax	(34,138		)	36,313			(34,138		)	(32		)	(36,281		)

Comprehensive income	86,376			(96,456		)	85,568			83,794			13,470
Less: Comprehensive income attributable to non-controlling interests	1,342			(534		)	534			—			1,342

Comprehensive income attributable to Penske Automotive Group common stockholders	$	85,034		$	(95,922	)	$	85,034		$	83,794		$	12,128

CONDENSED CONSOLIDATING STATEMENT OF INCOME
Six Months Ended June 30, 2012

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

Revenues	$	6,478,764		$	—		$	—		$	3,824,510		$	2,654,254
Cost of sales	5,478,829			—			—			3,209,681			2,269,148

Gross profit	999,935			—			—			614,829			385,106
Selling, general and administrative expenses	788,619			—			9,335			484,583			294,701
Depreciation	26,310			—			608			14,438			11,264

Operating income (loss)	185,006			—			(9,943		)	115,808			79,141
Floor plan interest expense	(19,368		)	—			(4,452		)	(7,947		)	(6,969		)
Other interest expense	(23,572		)	—			(14,642		)	(1,513		)	(7,417		)
Equity in earnings (losses) of affiliates	12,578			—			10,754			(40		)	1,864
Equity in earnings of subsidiaries	—			(172,219		)	172,219			—			—

Income (loss) from continuing operations before income taxes	154,644			(172,219		)	153,936			106,308			66,619
Income taxes	(53,926		)	60,331			(53,926		)	(43,806		)	(16,525		)

Income (loss) from continuing operations	100,718			(111,888		)	100,010			62,502			50,094
(Loss) income from discontinued operations, net of tax	(4,100		)	4,100			(4,100		)	(2,049		)	(2,051		)

Net income (loss)	96,618			(107,788		)	95,910			60,453			48,043
Other comprehensive income (loss), net of tax	(195		)	1,738			(195		)	(249		)	(1,489		)

Comprehensive income	96,423			(106,050		)	95,715			60,204			46,554
Less: Comprehensive income attributable to non-controlling interests	708			—			—			—			708

Comprehensive income attributable to Penske Automotive Group common stockholders	$	95,715		$	(106,050	)	$	95,715		$	60,204		$	45,846

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Six Months Ended June 30, 2013

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

Net cash from continuing operating activities	$	175,643		$	72,085		$	51,307		$	52,251

Investing activities:
Purchase of equipment and improvements	(143,591		)	(671		)	(120,322		)	(22,598		)
Dealership acquisitions, net	(30,734		)	—			(29,314		)	(1,420		)
Other	(9,695		)	—			(15,503		)	5,808

Net cash from continuing investing activities	(184,020		)	(671		)	(165,139		)	(18,210		)

Financing activities:
Net borrowings (repayments) of long-term debt	(11,171		)	(40,000		)	80,273			(51,444		)
Net borrowings (repayments) of floor plan notes payable — non-trade	33,478			10,615			(6,654		)	29,517
Repurchase of common stock	(15,813		)	(15,813		)	—			—
Dividends	(26,216		)	(26,216		)	—			—
Distributions from (to) parent	—			—			392			(392		)
Other	235			—			—			235

Net cash from continuing financing activities	(19,487		)	(71,414		)	74,011			(22,084		)

Net cash from discontinued operations	10,671			—			4,102			6,569

Net change in cash and cash equivalents	(17,193		)	—			(35,719		)	18,526
Cash and cash equivalents, beginning of period	43,447			—			36,478			6,969

Cash and cash equivalents, end of period	$	26,254		$	—		$	759		$	25,495

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Six Months Ended June 30, 2012

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

Net cash from continuing operating activities	$	201,953		$	56,571		$	10,787		$	134,595

Investing activities:
Purchase of equipment and improvements	(57,322		)	(754		)	(44,404		)	(12,164		)
Dealership acquisitions, net	(111,522		)	—			(3,416		)	(108,106		)
Other	(3,653		)	—			(970		)	(2,683		)

Net cash from continuing investing activities	(172,497		)	(754		)	(48,790		)	(122,953		)

Financing activities:
Repurchase of 3.5% senior subordinated convertible notes	(37,778		)	(37,778		)	—			—
Net borrowings (repayments) of long-term debt	(6,427		)	(18,000		)	(967		)	12,540
Net borrowings (repayments) of floor plan notes payable — non-trade	35,218			28,708			19,651			(13,141		)
Repurchase of common stock	(9,829		)	(9,829		)	—			—
Dividends	(18,918		)	(18,918		)	—			—
Distributions from (to) parent	—			—			585			(585		)

Net cash from continuing financing activities	(37,734		)	(55,817		)	19,269			(1,186		)

Net cash from discontinued operations	17,228			—			9,933			7,295

Net change in cash and cash equivalents	8,950			—			(8,801		)	17,751
Cash and cash equivalents, beginning of period	26,997			—			26,767			230

Cash and cash equivalents, end of period	$	35,947		$	—		$	17,966		$	17,981