Consolidating Condensed Financial Information (Tables)

9 Months Ended

Sep. 30, 2013

Consolidating Condensed Financial Information

CONDENSED CONSOLIDATING BALANCE SHEET

CONDENSED CONSOLIDATING BALANCE SHEET
September 30, 2013

	Total Company		Eliminations			Penske Automotive Group		Guarantor Subsidiaries		Non-Guarantor Subsidiaries
	(In thousands)
Cash and cash equivalents	$	71,101	$	—		$	—	$	7,514	$	63,587
Accounts receivable, net	588,311		(378,659		)	378,659		292,806		295,505
Inventories	2,293,390		—			—		1,300,592		992,798
Other current assets	83,508		—			2,955		32,593		47,960
Assets held for sale	1,065		—			—		165		900
Total current assets	3,037,375		(378,659		)	381,614		1,633,670		1,400,750
Property and equipment, net	1,211,020		—			4,251		814,083		392,686
Intangible assets	1,401,497		—			—		768,677		632,820
Equity method investments	333,081		—			280,730		—		52,351
Other long-term assets	27,831		(1,602,664		)	1,613,941		5,232		11,322
Total assets	$	6,010,804	$	(1,981,323	)	$	2,280,536	$	3,221,662	$	2,489,929
Floor plan notes payable	$	1,537,185	$	—		$	—	$	884,700	$	652,485
Floor plan notes payable — non-trade	802,051		—			128,100		375,983		297,968
Accounts payable	380,000		—			2,841		128,236		248,923
Accrued expenses	275,483		(378,659		)	205		142,530		511,407
Current portion of long-term debt	46,894		—			—		36,236		10,658
Liabilities held for sale	2,592		—			—		383		2,209
Total current liabilities	3,044,205		(378,659		)	131,146		1,568,068		1,723,650
Long-term debt	1,014,070		(96,472		)	692,000		166,262		252,280
Deferred tax liabilities	338,430		—			—		313,342		25,088
Other long-term liabilities	156,708		—			—		77,865		78,843
Total liabilities	4,553,413		(475,131		)	823,146		2,125,537		2,079,861
Total equity	1,457,391		(1,506,192		)	1,457,390		1,096,125		410,068
Total liabilities and equity	$	6,010,804	$	(1,981,323	)	$	2,280,536	$	3,221,662	$	2,489,929

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	71,107		—			—		28,716		42,391
Total current assets	2,760,096		(340,917		)	344,463		1,708,998		1,047,552
Property and equipment, net	1,031,188		—			4,474		662,722		363,992
Intangible assets	1,263,590		—			—		761,005		502,585
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 September 30, 2013

	Total Company			Eliminations			Penske Automotive Group			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
	(In thousands)
Revenues	$	3,824,143		$	—		$	—		$	2,296,224		$	1,527,919
Cost of sales	3,244,235			—			—			1,933,197			1,311,038
Gross profit	579,908			—			—			363,027			216,881
Selling, general and administrative expenses	454,188			—			5,475			280,222			168,491
Depreciation	15,784			—			417			9,538			5,829
Operating income (loss)	109,936			—			(5,892		)	73,267			42,561
Floor plan interest expense	(10,840		)	—			(2,428		)	(4,951		)	(3,461		)
Other interest expense	(12,370		)	—			(7,159		)	(1,951		)	(3,260		)
Equity in earnings of affiliates	11,240			—			10,035			—			1,205
Equity in earnings of subsidiaries	—			(103,153		)	103,153			—			—
Income (loss) from continuing operations before income taxes	97,966			(103,153		)	97,709			66,365			37,045
Income taxes	(31,692		)	33,458			(31,692		)	(24,116		)	(9,342		)
Income (loss) from continuing operations	66,274			(69,695		)	66,017			42,249			27,703
Income (loss) from discontinued operations, net of tax	(742		)	742			(742		)	(151		)	(591		)
Net income (loss)	65,532			(68,953		)	65,275			42,098			27,112
Other comprenhensive income (loss), net of tax	38,449			(38,622		)	38,449			824			37,798
Comprehensive income	103,981			(107,575		)	103,724			42,922			64,910
Less: Comprehensive income attributable to non-controlling interests	257			—			—			—			257
Comprehensive income attributable to Penske Automotive Group common stockholders	$	103,724		$	(107,575	)	$	103,724		$	42,922		$	64,653

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	$	3,336,020		$	—		$	—		$	1,997,423		$	1,338,597
Cost of sales	2,834,536			—			—			1,687,417			1,147,119
Gross profit	501,484			—			—			310,006			191,478
Selling, general and administrative expenses	400,039			—			5,073			244,259			150,707
Depreciation	13,704			—			328			7,580			5,796
Operating income (loss)	87,741			—			(5,401		)	58,167			34,975
Floor plan interest expense	(9,951		)	—			(2,322		)	(4,300		)	(3,329		)
Other interest expense	(11,583		)	—			(7,695		)	(804		)	(3,084		)
Equity in earnings of affiliates	8,814			—			7,784			—			1,030
Equity in earnings of subsidiaries	—			(82,373		)	82,373			—			—
Debt redemption costs	(17,753		)	—			(17,753		)	—			—
Income (loss) from continuing operations before income taxes	57,268			(82,373		)	56,986			53,063			29,592
Income taxes	(15,421		)	22,292			(15,421		)	(14,733		)	(7,559		)
Income (loss) from continuing operations	41,847			(60,081		)	41,565			38,330			22,033
Income (loss) from discontinued operations, net of tax	(534		)	534			(534		)	219			(753		)
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 interests	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

Nine Months Ended September 30, 2013

	Total Company			Eliminations			Penske Automotive Group			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
	(In thousands)
Revenues	$	10,927,917		$	—		$	—		$	6,616,079		$	4,311,838
Cost of sales	9,244,779			—			—			5,545,896			3,698,883
Gross profit	1,683,138			—			—			1,070,183			612,955
Selling, general and administrative expenses	1,308,958			—			15,328			820,249			473,381
Depreciation	45,300			—			1,206			26,743			17,351
Operating income (loss)	328,880			—			(16,534		)	223,191			122,223
Floor plan interest expense	(32,008		)	—			(7,174		)	(15,044		)	(9,790		)
Other interest expense	(36,163		)	—			(20,555		)	(4,214		)	(11,394		)
Equity in earnings of affiliates	22,489			—			18,865			—			3,624
Equity in earnings of subsidiaries	—			(307,531		)	307,531			—			—
Income (loss) from continuing operations before income taxes	283,198			(307,531		)	282,133			203,933			104,663
Income taxes	(95,263		)	103,839			(95,263		)	(77,745		)	(26,094		)
Income (loss) from continuing operations	187,935			(203,692		)	186,870			126,188			78,569
Income (loss) from discontinued operations, net of tax	(1,889		)	1,889			(1,889		)	(184		)	(1,705		)
Net income (loss)	186,046			(201,803		)	184,981			126,004			76,864
Other comprehensive income (loss), net of tax	4,313			(4,516		)	4,313			2,997			1,519
Comprehensive income	190,359			(206,319		)	189,294			129,001			78,383
Less: Comprehensive income attributable to non-controlling interests	1,599			(534		)	534			—			1,599
Comprehensive income attributable to Penske Automotive Group common stockholders	$	188,760		$	(205,785	)	$	188,760		$	129,001		$	76,784

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	$	9,814,784		$	—		$	—		$	5,821,934		$	3,992,850
Cost of sales	8,313,365			—			—			4,897,098			3,416,267
Gross profit	1,501,419			—			—			924,836			576,583
Selling, general and administrative expenses	1,188,658			—			14,408			728,842			445,408
Depreciation	40,014			—			936			22,018			17,060
Operating income (loss)	272,747			—			(15,344		)	173,976			114,115
Floor plan interest expense	(29,319		)	—			(6,774		)	(12,247		)	(10,298		)
Other interest expense	(35,155		)	—			(21,986		)	(2,668		)	(10,501		)
Equity in earnings of affiliates	21,392			—			18,538			—			2,854
Equity in earnings of subsidiaries	—			(254,241		)	254,241			—			—
Debt redemption costs	(17,753		)	—			(17,753		)	—			—
Income (loss) from continuing operations before income taxes	211,912			(254,241		)	210,922			159,061			96,170
Income taxes	(69,347		)	83,603			(69,347		)	(59,519		)	(24,084		)
Income (loss) from continuing operations	142,565			(170,638		)	141,575			99,542			72,086
Income (loss) from discontinued operations, net of tax	(4,634		)	4,634			(4,634		)	(1,830		)	(2,804		)
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 interests	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 CASH FLOWS

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Nine Months Ended September 30, 2013

	Total Company			Penske Automotive Group			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
	(In thousands)
Net cash from continuing operating activities	$	297,997		$	59,444		$	56,502		$	182,051
Investing activities:
Purchase of equipment and improvements	(122,952		)	(983		)	(84,506		)	(37,463		)
Purchase of Penske Car Rental vehicles	(82,313		)	—			(82,313		)	—
Acquisitions, net	(221,160		)	—			(22,005		)	(199,155		)
Other	(7,493		)	—			(7,522		)	29
Net cash from continuing investing activities	(433,918		)	(983		)	(196,346		)	(236,589		)
Financing activities:
Net borrowings (repayments) of long-term debt	123,825			(18,000		)	71,147			70,678
Net borrowings (repayments) of floor plan notes payable — non-trade	76,525			16,015			29,300			31,210
Repurchases of common stock	(15,813		)	(15,813		)	—			—
Dividends	(40,663		)	(40,663		)	—			—
Distributions from (to) parent	—			—			1,154			(1,154		)
Other	235			—			—			235
Net cash from continuing financing activities	144,109			(58,461		)	101,601			100,969
Net cash from discontinued operations	19,466			—			9,279			10,187
Net change in cash and cash equivalents	27,654			—			(28,964		)	56,618
Cash and cash equivalents, beginning of period	43,447			—			36,478			6,969
Cash and cash equivalents, end of period	$	71,101		$	—		$	7,514		$	63,587

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	$	262,748		$	95,748		$	40,064		$	126,936
Investing activities:
Purchase of equipment and improvements	(96,380		)	(766		)	(67,233		)	(28,381		)
Proceeds from sale-leaseback transactions	1,584			—			—			1,584
Acquisitions, net	(137,805		)	—			(3,416		)	(134,389		)
Other	3,496			(3,812		)	—			7,308
Net cash from continuing investing activities	(229,105		)	(4,578		)	(70,649		)	(153,878		)
Financing activities:
Repurchase of 3.5% senior subordinated convertible notes	(62,687		)	(62,687		)	—			—
Issuance of 5.75% senior subordinated notes	550,000			550,000			—			—
Repurchase of 7.75% senior subordinated notes	(390,755		)	(390,755		)	—			—
Net borrowings (repayments) of long-term debt	(133,913		)	(149,000		)	(1,598		)	16,685
Net borrowings (repayments) of floor plan notes payable — non-trade	32,410			9,363			11,471			11,576
Repurchases 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	(53,036		)	(91,170		)	14,620			23,514
Net cash from discontinued operations	18,282			—			6,725			11,557
Net change in cash and cash equivalents	(1,111		)	—			(9,240		)	8,129
Cash and cash equivalents, beginning of period	26,997			—			26,767			230
Cash and cash equivalents, end of period	$	25,886		$	—		$	17,527		$	8,359