13. Condensed Consolidating Financial Information

The following tables include condensed consolidating financial information as of June 30, 2014 and December 31, 2013 and for the three and six month periods ended June 30, 2014 and 2013 for Penske Automotive Group, Inc. (as the issuer of the 5.75% 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 jointly and several. The condensed consolidating financial information includes certain allocations of balance sheet, income statement and cash flow items which are not necessarily indicative of the financial position, results of operations and cash flows of these entities on a stand-alone basis.

CONDENSED CONSOLIDATING BALANCE SHEET

June 30, 2014

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

Cash and cash equivalents	$	61.4	$	—		$	—	$	—	$	61.4
Accounts receivable, net	641.2		(401.9		)	401.9		354.7		286.5
Inventories	2,615.9		—			—		1,461.3		1,154.6
Other current assets	111.4		—			7.5		33.9		70.0
Assets held for sale	52.4		—			—		10.8		41.6

Total current assets	3,482.3		(401.9		)	409.4		1,860.7		1,614.1
Property and equipment, net	1,367.8		—			3.8		883.0		481.0
Intangible assets	1,518.4		—			—		826.6		691.8
Equity method investments	354.7		—			299.6		—		55.1
Other long-term assets	19.1		(1,805.0		)	1,816.0		5.4		2.7

Total assets	$	6,742.3	$	(2,206.9	)	$	2,528.8	$	3,575.7	$	2,844.7

Floor plan notes payable	$	1,717.3	$	—		$	—	$	979.7	$	737.6
Floor plan notes payable — non-trade	934.0		—			129.9		460.3		343.8
Accounts payable	435.1		—			3.7		145.2		286.2
Accrued expenses	314.4		(401.9		)	0.5		150.4		565.4
Current portion of long-term debt	81.6		—			—		66.9		14.7
Liabilities held for sale	41.1		—			—		4.9		36.2

Total current liabilities	3,523.5		(401.9		)	134.1		1,807.4		1,983.9
Long-term debt	1,006.8		(124.6		)	748.0		177.2		206.2
Deferred tax liabilities	372.8		—			—		347.0		25.8
Other long-term liabilities	192.5		—			—		63.7		128.8

Total liabilities	5,095.6		(526.5		)	882.1		2,395.3		2,344.7
Total equity	1,646.7		(1,680.4		)	1,646.7		1,180.4		500.0

Total liabilities and equity	$	6,742.3	$	(2,206.9	)	$	2,528.8	$	3,575.7	$	2,844.7

CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2013

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

Cash and cash equivalents	$	49.8	$	—		$	—	$	12.6	$	37.2
Accounts receivable, net	600.8		(392.5		)	392.5		382.1		218.7
Inventories	2,518.3		—			—		1,416.2		1,102.1
Other current assets	88.4		—			2.9		43.4		42.1
Assets held for sale	107.3		—			—		61.0		46.3

Total current assets	3,364.6		(392.5		)	395.4		1,915.3		1,446.4
Property and equipment, net	1,232.2		—			4.0		800.0		428.2
Intangible assets	1,439.9		—			—		771.6		668.3
Equity method investments	346.9		—			294.9		—		52.0
Other long-term assets	31.9		(1,686.0		)	1,697.5		5.2		15.2

Total assets	$	6,415.5	$	(2,078.5	)	$	2,391.8	$	3,492.1	$	2,610.1

Floor plan notes payable	$	1,685.1	$	—		$	—	$	1,009.5	$	675.6
Floor plan notes payable — non-trade	901.6		—			128.1		445.7		327.8
Accounts payable	373.3		—			3.5		141.7		228.1
Accrued expenses	262.6		(392.5		)	0.1		122.2		532.8
Current portion of long-term debt	50.0		—			—		39.5		10.5
Liabilities held for sale	59.7		—			—		31.0		28.7

Total current liabilities	3,332.3		(392.5		)	131.7		1,789.6		1,803.5
Long-term debt	1,033.2		(123.6		)	738.0		158.4		260.4
Deferred tax liabilities	361.4		—			—		337.6		23.8
Other long-term liabilities	166.5		—			—		68.8		97.7

Total liabilities	4,893.4		(516.1		)	869.7		2,354.4		2,185.4
Total equity	1,522.1		(1,562.4		)	1,522.1		1,137.7		424.7

Total liabilities and equity	$	6,415.5	$	(2,078.5	)	$	2,391.8	$	3,492.1	$	2,610.1

CONDENSED CONSOLIDATING STATEMENT OF INCOME

Three Months Ended June 30, 2014

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

Revenues	$	4,406.7		$	—		$	—		$	2,480.6		$	1,926.1
Cost of sales	3,739.8			—			—			2,080.4			1,659.4

Gross profit	666.9			—			—			400.2			266.7
Selling, general and administrative expenses	513.2			—			5.9			302.5			204.8
Depreciation	17.5			—			0.3			9.8			7.4

Operating income (loss)	136.2			—			(6.2		)	87.9			54.5
Floor plan interest expense	(11.6		)	—			(2.4		)	(5.4		)	(3.8		)
Other interest expense	(13.1		)	—			(7.4		)	(1.1		)	(4.6		)
Equity in earnings of affiliates	10.9			—			9.4			—			1.5
Equity in earnings of subsidiaries	—			(128.0		)	128.0			—			—

Income (loss) from continuing operations before income taxes	122.4			(128.0		)	121.4			81.4			47.6
Income taxes	(41.1		)	43.3			(41.1		)	(27.9		)	(15.4		)

Income (loss) from continuing operations	81.3			(84.7		)	80.3			53.5			32.2
(Loss) income from discontinued operations, net of tax	(7.4		)	7.4			(7.4		)	0.2			(7.6		)

Net income (loss)	73.9			(77.3		)	72.9			53.7			24.6
Other comprehensive income (loss), net of tax	18.8			(18.4		)	18.8			1.5			16.9

Comprehensive income	92.7			(95.7		)	91.7			55.2			41.5
Less: Comprehensive income attributable to the non-controlling interests	0.9			—			—			—			0.9

Comprehensive income attributable to Penske Automotive Group common stockholders	$	91.8		$	(95.7	)	$	91.7		$	55.2		$	40.6

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

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

Revenues	$	3,630.6		$	—		$	—		$	2,196.0		$	1,434.6
Cost of sales	3,071.1			—			—			1,836.9			1,234.2

Gross profit	559.5			—			—			359.1			200.4
Selling, general and administrative expenses	432.7			—			4.6			272.0			156.1
Depreciation	14.7			—			0.4			8.5			5.8

Operating income (loss)	112.1			—			(5.0		)	78.6			38.5
Floor plan interest expense	(10.7		)	—			(2.5		)	(5.0		)	(3.2		)
Other interest expense	(11.9		)	—			(5.4		)	(1.1		)	(5.4		)
Equity in earnings of affiliates	8.9			—			6.9			—			2.0
Equity in earnings of subsidiaries	—			(103.9		)	103.9			—			—

Income (loss) from continuing operations before income taxes	98.4			(103.9		)	97.9			72.5			31.9
Income taxes	(34.9		)	36.2			(34.8		)	(27.4		)	(8.9		)

Income (loss) from continuing operations	63.5			(67.7		)	63.1			45.1			23.0
(Loss) income from discontinued operations, net of tax	(1.0		)	1.0			(1.0		)	—			(1.0		)

Net income (loss)	62.5			(66.7		)	62.1			45.1			22.0
Other comprehensive income (loss), net of tax	3.0			(2.6		)	3.0			1.1			1.5

Comprehensive income	65.5			(69.3		)	65.1			46.2			23.5
Less: Comprehensive income attributable to the non-controlling interests	0.4			—			—			—			0.4

Comprehensive income attributable to Penske Automotive Group common stockholders	$	65.1		$	(69.3	)	$	65.1		$	46.2		$	23.1

CONDENSED CONSOLIDATING STATEMENT OF INCOME
Six Months Ended June 30, 2014

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

Revenues	$	8,454.7		$	—		$	—		$	4,661.1		$	3,793.6
Cost of sales	7,163.8			—			—			3,905.7			3,258.1

Gross profit	1,290.9			—			—			755.4			535.5
Selling, general and administrative expenses	1,001.0			—			11.7			589.1			400.2
Depreciation	34.0			—			0.6			19.1			14.3

Operating income (loss)	255.9			—			(12.3		)	147.2			121.0
Floor plan interest expense	(22.7		)	—			(4.8		)	(10.4		)	(7.5		)
Other interest expense	(26.2		)	—			(14.5		)	(2.3		)	(9.4		)
Equity in earnings of affiliates	16.0			—			13.6			—			2.4
Equity in earnings of subsidiaries	—			(239.6		)	239.6			—			—

Income (loss) from continuing operations before income taxes	223.0			(239.6		)	221.6			134.5			106.5
Income taxes	(75.2		)	81.2			(75.2		)	(51.8		)	(29.4		)

Income (loss) from continuing operations	147.8			(158.4		)	146.4			82.7			77.1
(Loss) income from discontinued operations, net of tax	(6.0		)	6.0			(6.0		)	7.2			(13.2		)

Net income (loss)	141.8			(152.4		)	140.4			89.9			63.9
Other comprehensive income (loss), net of tax	25.0			(25.2		)	25.0			(0.9		)	26.1

Comprehensive income	166.8			(177.6		)	165.4			89.0			90.0
Less: Comprehensive income attributable to the non-controlling interests	1.1			0.2			(0.2		)	—			1.1

Comprehensive income attributable to Penske Automotive Group common stockholders	$	165.7		$	(177.8	)	$	165.6		$	89.0		$	88.9

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

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

Revenues	$	6,979.9		$	—		$	—		$	4,156.9		$	2,823.0
Cost of sales	5,893.8			—			—			3,473.0			2,420.8

Gross profit	1,086.1			—			—			683.9			402.2
Selling, general and administrative expenses	839.8			—			9.8			522.0			308.0
Depreciation	29.0			—			0.8			16.5			11.7

Operating income (loss)	217.3			—			(10.6		)	145.4			82.5
Floor plan interest expense	(20.8		)	—			(4.8		)	(9.7		)	(6.3		)
Other interest expense	(23.4		)	—			(11.7		)	(2.2		)	(9.5		)
Equity in earnings of affiliates	11.2			—			8.8			—			2.4
Equity in earnings of subsidiaries	—			(201.8		)	201.8			—			—

Income (loss) from continuing operations before income taxes	184.3			(201.8		)	183.5			133.5			69.1
Income taxes	(63.2		)	68.4			(63.1		)	(51.2		)	(17.3		)

Income (loss) from continuing operations	121.1			(133.4		)	120.4			82.3			51.8
(Loss) income from discontinued operations, net of tax	(0.6		)	0.6			(0.6		)	0.8			(1.4		)

Net income (loss)	120.5			(132.8		)	119.8			83.1			50.4
Other comprehensive income (loss), net of tax	(34.1		)	34.2			(34.1		)	2.1			(36.3		)

Comprehensive income	86.4			(98.6		)	85.7			85.2			14.1
Less: Comprehensive income attributable to the non-controlling interests	1.3			(0.5		)	0.5			—			1.3

Comprehensive income attributable to Penske Automotive Group common stockholders	$	85.1		$	(98.1	)	$	85.2		$	85.2		$	12.8

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Six Months Ended June 30, 2014

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

Net cash from continuing operating activities	$	211.4		$	33.6		$	95.8		$	82.0

Investing activities:
Purchase of equipment and improvements	(72.9		)	(0.4		)	(51.8		)	(20.7		)
Purchase of car rental vehicles	(76.3		)	—			(76.3		)	—
Acquisitions, net	(86.2		)	—			(80.5		)	(5.7		)
Other	24.9			4.1			20.8			—

Net cash from continuing investing activities	(210.5		)	3.7			(187.8		)	(26.4		)

Financing activities:
Net borrowings (repayments) of long-term debt	(3.1		)	10.0			45.1			(58.2		)
Net borrowings (repayments) of floor plan notes payable — non-trade	32.4			1.7			14.6			16.1
Repurchases of common stock	(15.5		)	(15.5		)	—			—
Dividends	(33.5		)	(33.5		)	—			—
Distributions from (to) parent	—			—			3.6			(3.6		)
Other	0.3			—			—			0.3

Net cash from continuing financing activities	(19.4		)	(37.3		)	63.3			(45.4		)

Net cash from discontinued operations	30.1			—			16.1			14.0

Net change in cash and cash equivalents	11.6			—			(12.6		)	24.2
Cash and cash equivalents, beginning of period	49.8			—			12.6			37.2

Cash and cash equivalents, end of period	$	61.4		$	—		$	—		$	61.4

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

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

Net cash from continuing operating activities	$	174.0		$	72.1		$	52.4		$	49.5

Investing activities:
Purchase of equipment and improvements	(70.2		)	(0.7		)	(45.9		)	(23.6		)
Purchase of car rental vehicles	(73.2		)	—			(73.2		)	—
Acquisitions, net	(30.7		)	—			(29.3		)	(1.4		)
Other	(9.7		)	—			(15.5		)	5.8

Net cash from continuing investing activities	(183.8		)	(0.7		)	(163.9		)	(19.2		)

Financing activities:
Net borrowings (repayments) of long-term debt	(11.2		)	(40.0		)	80.3			(51.5		)
Net borrowings (repayments) of floor plan notes payable — non-trade	37.6			10.6			(5.7		)	32.7
Repurchases of common stock	(15.8		)	(15.8		)	—			—
Dividends	(26.2		)	(26.2		)	—			—
Distributions from (to) parent	—			—			0.3			(0.3		)
Other	0.2			—			—			0.2

Net cash from continuing financing activities	(15.4		)	(71.4		)	74.9			(18.9		)

Net cash from discontinued operations	7.7			—			1.9			5.8

Net change in cash and cash equivalents	(17.5		)	—			(34.7		)	17.2
Cash and cash equivalents, beginning of period	43.8			—			34.7			9.1

Cash and cash equivalents, end of period	$	26.3		$	—		$	—		$	26.3