10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to             

Commission file number 1-12297

Penske Automotive Group, Inc.

(Exact name of registrant as specified in its charter)

Delaware	22-3086739
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
2555 Telegraph Road,
Bloomfield Hills, Michigan	48302-0954
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:

(248) 648-2500

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of July 22, 2012, there were 90,266,664 shares of voting common stock outstanding.

TABLE OF CONTENTS

	Page
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheets as of June 30, 2012 and December 31, 2011		3
Consolidated Condensed Statements of Income for the three and six months ended June 30, 2012 and 2011		4
Consolidated Condensed Statements of Comprehensive Income for the three and six months ended June  30, 2012 and 2011		5
Consolidated Condensed Statements of Cash Flows for the six months ended June 30, 2012 and 2011		6
Consolidated Condensed Statement of Equity for the six months ended June 30, 2012		7
Notes to Consolidated Condensed Financial Statements		8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		24
Item 3. Quantitative & Qualitative Disclosures About Market Risk		42
Item 4. Controls and Procedures		43
PART II — OTHER INFORMATION
Item 1. Legal Proceedings		43
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		43
Item 6. Exhibits		44

2

PENSKE AUTOMOTIVE GROUP, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

	June 30, 2012			December 31, 2011
	(Unaudited) (In thousands, except per share amounts)
ASSETS
Cash and cash equivalents	$	37,219		$	28,676
Accounts receivable, net of allowance for doubtful accounts of $2,227 and $2,159		464,424			438,769
Inventories		1,830,841			1,572,568
Other current assets		91,963			80,179
Assets held for sale		39,059			81,122
Total current assets		2,463,506			2,201,314
Property and equipment, net		925,054			856,674
Goodwill		940,596			903,721
Franchise value		252,813			228,460
Equity method investments		296,627			298,640
Other long-term assets		14,269			13,490
Total assets	$	4,892,865		$	4,502,299
LIABILITIES AND EQUITY
Floor plan notes payable	$	1,158,252		$	977,548
Floor plan notes payable — non-trade		724,687			691,888
Accounts payable		310,686			220,538
Accrued expenses		258,726			201,179
Current portion of long-term debt		13,139			3,414
Liabilities held for sale		34,149			55,820
Total current liabilities		2,499,639			2,150,387
Long-term debt		793,603			846,777
Deferred tax liabilities		223,485			217,902
Other long-term liabilities		164,893			146,820
Total liabilities		3,681,620			3,361,886
Commitments and contingent liabilities
Equity
Penske Automotive Group stockholders’ equity:
Preferred Stock, $0.0001 par value; 100 shares authorized; none issued and outstanding		—			—
Common Stock, $0.0001 par value, 240,000 shares authorized; 90,267 shares issued and outstanding at June 30, 2012; 90,277 shares issued and outstanding at December 31, 2011		9			9
Non-voting Common Stock, $0.0001 par value, 7,125 shares authorized; none issued and outstanding		—			—
Class C Common Stock, $0.0001 par value, 20,000 shares authorized; none issued and outstanding		—			—
Additional paid-in-capital		696,694			702,335
Retained earnings		536,367			459,375
Accumulated other comprehensive loss		(25,929	)		(25,734	)
Total Penske Automotive Group stockholders’ equity		1,207,141			1,135,985
Non-controlling interest		4,104			4,428
Total equity		1,211,245			1,140,413
Total liabilities and equity	$	4,892,865		$	4,502,299

See Notes to Consolidated Condensed Financial Statements

3

PENSKE AUTOMOTIVE GROUP, INC.

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2012			2011			2012			2011
	(Unaudited)
	(In thousands, except per share amounts)
Revenue:
New vehicle	$	1,729,167		$	1,399,456		$	3,303,367		$	2,778,015
Used vehicle		964,511			855,598			1,931,147			1,643,604
Finance and insurance, net		82,682			69,004			162,486			135,349
Service and parts		368,797			339,636			737,090			679,688
Fleet and wholesale vehicle		227,322			166,292			471,132			331,463
Total revenues		3,372,479			2,829,986			6,605,222			5,568,119
Cost of sales:
New vehicle		1,590,303			1,280,297			3,032,731			2,549,647
Used vehicle		890,411			784,366			1,778,942			1,507,605
Service and parts		152,846			145,038			308,678			290,963
Fleet and wholesale		225,515			164,325			466,293			326,483
Total cost of sales		2,859,075			2,374,026			5,586,644			4,674,698
Gross profit		513,404			455,960			1,018,578			893,421
Selling, general and administrative expenses		409,452			374,325			806,799			728,349
Depreciation		13,651			11,926			26,976			23,705
Operating income		90,301			69,709			184,803			141,367
Floor plan interest expense		(9,971	)		(6,921	)		(19,620	)		(13,780	)
Other interest expense		(11,575	)		(10,451	)		(23,785	)		(21,736	)
Debt discount amortization		—			—			—			(1,718	)
Equity in earnings of affiliates		8,168			7,882			12,578			7,904
Income from continuing operations before income taxes		76,923			60,219			153,976			112,037
Income taxes		(26,854	)		(20,505	)		(53,744	)		(36,043	)
Income from continuing operations		50,069			39,714			100,232			75,994
Income (Loss) from discontinued operations, net of tax		(457	)		345			(3,614	)		(1,938	)
Net income		49,612			40,059			96,618			74,056
Less: Income attributable to non-controlling interests		520			499			708			569
Net income attributable to Penske Automotive Group common stockholders	$	49,092		$	39,560		$	95,910		$	73,487
Basic earnings per share attributable to Penske Automotive Group common stockholders:
Continuing operations	$	0.55		$	0.42		$	1.10		$	0.82
Discontinued operations		(0.01	)		0.00			(0.04	)		(0.02	)
Net income attributable to Penske Automotive Group common stockholders	$	0.54		$	0.43		$	1.06		$	0.79
Shares used in determining basic earnings per share		90,305			92,514			90,363			92,444
Diluted earnings per share attributable to Penske Automotive Group common stockholders:
Continuing operations	$	0.55		$	0.42		$	1.10		$	0.82
Discontinued operations		(0.01	)		0.00			(0.04	)		(0.02	)
Net income attributable to Penske Automotive Group common stockholders	$	0.54		$	0.43		$	1.06		$	0.79
Shares used in determining diluted earnings per share		90,337			92,570			90,395			92,514
Amounts attributable to Penske Automotive Group common stockholders:
Income from continuing operations	$	50,069		$	39,714		$	100,232		$	75,994
Less: Income attributable to non-controlling interests		520			499			708			569
Income from continuing operations, net of tax		49,549			39,215			99,524			75,425
Income (Loss) from discontinued operations, net of tax		(457	)		345			(3,614	)		(1,938	)
Net income attributable to Penske Automotive Group common stockholders	$	49,092		$	39,560		$	95,910		$	73,487

See Notes to Consolidated Condensed Financial Statements

4

PENSKE AUTOMOTIVE GROUP, INC.

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2012			2011			2012			2011
	(Unaudited)
	(In thousands, except per share amounts)
Net Income	$	49,612		$	40,059		$	96,618		$	74,056
Other Comprehensive Income:
Foreign currency translation adjustment		(11,415	)		2,882			(1,489	)		19,734
Unrealized gain (loss) on interest rate swaps:
Unrealized gain(loss) arising during the period, net of tax benefit(provision) of $701, $2,614, $1,524, and $2,476, respectively		(1,072	)		(3,996	)		(2,329	)		(3,784	)
Reclassification adjustment for loss included in floor plan interest expense, net of tax provision of $692, $0, $1,361, and $46, respectively		1,057			—			2,080			70
Unrealized gain (loss) on interest rate swaps, net of tax		(15	)		(3,996	)		(249	)		(3,714	)
Other adjustments to Comprehensive Income, net		534			(363	)		1,543			(975	)
Other Comprehensive Income (loss), Net of Taxes		(10,896	)		(1,477	)		(195	)		15,045
Comprehensive Income		38,716			38,582			96,423			89,101
Less: Net income attributable to non-controlling interest		520			499			708			569
Comprehensive income attributable to Penske Automotive Group common stockholders	$	38,196		$	38,083		$	95,715		$	88,532

See Notes to Consolidated Condensed Financial Statements

5

PENSKE AUTOMOTIVE GROUP, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

	Six Months Ended
	June 30,
	2012			2011
	(Unaudited)
	(In thousands)
Operating Activities:
Net income	$	96,618		$	74,056
Adjustments to reconcile net income to net cash from continuing operating activities:
Depreciation		26,976			23,705
Debt discount amortization		—			1,718
Earnings of equity method investments		(12,578	)		(7,904	)
Loss from discontinued operations, net of tax		3,614			1,938
Deferred income taxes		7,793			12,888
Changes in operating assets and liabilities:
Accounts receivable		(8,893	)		20,147
Inventories		(178,269	)		10,196
Floor plan notes payable		180,651			(73,075	)
Accounts payable and accrued expenses		96,256			(10,209	)
Other		(7,982	)		(11,799	)
Net cash from continuing operating activities		204,186			41,661
Investing Activities:
Purchase of equipment and improvements		(57,092	)		(51,435	)
Dealership acquisitions net, including repayment of sellers’ floor plan notes payable of $37,779 and $5,862, respectively		(111,522	)		(14,011	)
Other		(3,653	)		2,865
Net cash from continuing investing activities		(172,267	)		(62,581	)
Financing Activities:
Proceeds from borrowings under U.S. credit agreement revolving credit line		396,800			156,000
Repayments under U.S. credit agreement revolving credit line		(414,800	)		(156,000	)
Repurchase of 3.5% senior subordinated convertible notes		(37,778	)		(87,278	)
Net borrowings of other long-term debt		11,573			13,602
Net borrowings of floor plan notes payable — non-trade		32,799			70,084
Repurchases of common stock		(9,829	)		(12,413	)
Dividends		(18,918	)		(6,493	)
Proceeds from exercises of options, including excess tax benefit		—			2,698
Net cash from continuing financing activities		(40,153	)		(19,800	)
Discontinued operations:
Net cash from discontinued operating activities		(5,750	)		(25,008	)
Net cash from discontinued investing activities		34,726			47,327
Net cash from discontinued financing activities		(12,199	)		5,877
Net cash from discontinued operations		16,777			28,196
Net change in cash and cash equivalents		8,543			(12,524	)
Cash and cash equivalents, beginning of period		28,676			19,904
Cash and cash equivalents, end of period	$	37,219		$	7,380
Supplemental disclosures of cash flow information:
Cash paid for:
Interest	$	48,984		$	37,752
Income taxes		19,180			23,442
Seller financed/assumed debt		—			4,865

See Notes to Consolidated Condensed Financial Statements

6

PENSKE AUTOMOTIVE GROUP, INC.

CONSOLIDATED CONDENSED STATEMENT OF EQUITY

	Common Stock					Additional						Accumulated Other			Total Penske Automotive
	Issued Shares			Amount		Paid-in Capital			Retained Earnings			Comprehensive Income (Loss)			Group Stockholders’ Equity			Non-controlling Interest			Total Equity
	(Unaudited)
	(Dollars in thousands)
Balance, January 1, 2012		90,277,356		$	9	$	702,335		$	459,375		$	(25,734	)	$	1,135,985		$	4,428		$	1,140,413
Equity compensation		394,939			—		3,307			—			—			3,307			—			3,307
Distributions to non-controlling interests		—			—		—			—			—			—			(1,154	)		(1,154	)
Sale of subsidiary shares to non-controlling interest		—			—		317			—			—			317			122			439
Foreign currency translation		—			—		—			—			(1,489	)		(1,489	)		—			(1,489	)
Repurchase of common stock		(405,631	)				(9,829	)					—			(9,829	)		—			(9,829	)
Dividends		—			—		—			(18,918	)		—			(18,918	)		—			(18,918	)
Convertible debt redemption		—			—		564			—						564			—			564
Other													1,294			1,294						1,294
Net income		—			—		—			95,910			—			95,910			708			96,618
Balance, June 30, 2012		90,266,664		$	9	$	696,694		$	536,367		$	(25,929	)	$	1,207,141		$	4,104		$	1,211,245

See Notes to Consolidated Condensed Financial Statements

7

PENSKE AUTOMOTIVE GROUP, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

(In thousands, except per share amounts)

1. Interim Financial Statements

Business Overview

Penske Automotive Group, Inc. (the “Company”) is the second largest automotive retailer headquartered in the U.S. as measured by total revenue. As of June 30, 2012, the Company operated 338 retail franchises, of which 170 franchises are located in the U.S. and 168 franchises are located outside of the U.S. The franchises outside the U.S. are located primarily in the U.K. Each of the Company’s dealerships offers a wide selection of new and used vehicles for sale. In addition to selling new and used vehicles, the Company generates higher-margin revenue at each of its dealerships through maintenance and repair services and the sale and placement of higher-margin products, such as third-party finance and insurance products, third-party extended service contracts and replacement and aftermarket automotive products. The Company also holds a 9.0% limited partnership interest in Penske Truck Leasing Co., L.P. (“PTL”), a leading transportation services provider.

During the six months ended June 30, 2012, the Company acquired the Agnew Group in the United Kingdom, representing fourteen franchises, and two other franchises. The Company also was awarded seven franchises representing seven different brands, including Mini of Marin (California) and Nissan and Infiniti San Francisco. The Company disposed of six franchises representing six different brands, including Jaguar and Land Rover in Gatwick (U.K.) and Scottsdale Lexus.

In the second quarter of 2012, the Company acquired a 7% interest in NPA Holdco, LLC, an auctioneer of powersport vehicles, for $3,000. During the second quarter of 2012, Transportation Resource Partners, a related party, acquired a controlling interest in this company on the same financial terms as our investment.

Basis of Presentation

The following unaudited consolidated condensed financial statements of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in the Company’s annual financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the SEC rules and regulations. The information presented as of June 30, 2012 and December 31, 2011 and for the three and six month periods ended June 30, 2012 and 2011 is unaudited, but includes all adjustments which the management of the Company believes to be necessary for the fair presentation of results for the periods presented. The consolidated condensed financial statements for prior periods have been revised for entities which have been treated as discontinued operations through June 30, 2012, and the results for interim periods are not necessarily indicative of results to be expected for the year. These consolidated condensed financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2011, which are included as part of the Company’s Annual Report on Form 10-K.

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2011-04, “Fair Value Measurements and Disclosures (Topic 820) — Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” ASU No. 2011-04 clarifies the application of existing fair value measurement and disclosure requirements, changes certain principles related to measuring fair value, and requires additional disclosures about fair value measurements. ASU No. 2011-04 is effective for periods beginning after December 15, 2011. The Company adopted the standard on January 1, 2012. Adoption of ASU No. 2011-04 did not affect the Company’s consolidated financial position, results of operations, or cash flows.

In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income (Topic 220) — Presentation of Comprehensive Income”, which requires the presentation of components of other comprehensive income with the components of net income. The Company adopted the standard on January 1, 2012. Adoption of ASU No. 2011-05 did not affect the Company’s consolidated financial position, results of operations, or cash flows.

In December 2011, the FASB issued ASU No. 2011-11, “Balance Sheet (Topic 210) — Disclosures about Offsetting Assets and Liabilities.” ASU No. 2011-11 will require disclosure of the effect or potential effect of offsetting arrangements on the Company’s financial position as well as enhanced disclosure of the rights of setoff associated with the Company’s recognized assets and recognized liabilities. ASU No. 2011-11 is effective for periods beginning on or after January 1, 2013. Since these amended principles require only additional disclosures concerning offsetting and related arrangements, adoption will not affect the Company’s consolidated financial position, results of operations, or cash flows.

8

PENSKE AUTOMOTIVE GROUP, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Discontinued Operations

The Company accounts for dispositions in its retail operations as discontinued operations when it is evident that the operations and cash flows of a franchise being disposed will be eliminated from on-going operations and that the Company will not have any significant continuing involvement in its operations.

In evaluating whether the cash flows of a dealership in its Retail reportable segment will be eliminated from ongoing operations, the Company considers whether it is likely that customers will migrate to similar franchises that it owns in the same geographic market. The Company’s consideration includes an evaluation of the brands sold at other dealerships it operates in the market and their proximity to the disposed dealership. When the Company disposes of franchises, it typically does not have continuing brand representation in that market. If the franchise being disposed of is located in a complex of Company owned dealerships, the Company does not treat the disposition as a discontinued operation if it believes that the cash flows previously generated by the disposed franchise will be replaced by expanded operations of the remaining or replacement franchises.

Combined financial information regarding entities accounted for as discontinued operations follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	2012			2011		2012			2011
Revenues	$	43,542		$	132,377	$	99,029		$	274,742
Pre-tax income (loss)		(760	)		19		(12,188	)		(4,795	)
Gain on disposal		—			695		10,160			1,765

	June 30,		December 31,
	2012		2011
Inventories	$	27,053	$	48,203
Other assets		12,006		32,919
Total assets	$	39,059	$	81,122
Floor plan notes payable (including non-trade)	$	27,294	$	44,869
Other liabilities		6,855		10,951
Total liabilities	$	34,149	$	55,820

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The accounts requiring the use of significant estimates include accounts receivable, inventories, income taxes, intangible assets and certain reserves.

Fair Value of Financial Instruments

Financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, debt, floor plan notes payable, and interest rate swaps used to hedge future cash flows. Other than our subordinated notes, the carrying amount of all significant financial instruments approximates fair value due either to length of maturity, the existence of variable interest rates that approximate prevailing market rates, or as a result of mark to market accounting. The Company’s 7.75% senior subordinated notes due in 2016 had a carrying value of $375,000 and a fair value of $388,125 as of June 30, 2012. The calculation of the senior subordinated notes fair value was based on quoted, level one market data.

9

PENSKE AUTOMOTIVE GROUP, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

2. Inventories

Inventories consisted of the following:

	June 30,		December 31,
	2012		2011
New vehicles	$	1,234,036	$	1,051,120
Used vehicles		513,331		441,655
Parts, accessories and other		83,474		79,793
Total inventories	$	1,830,841	$	1,572,568

The Company receives credits from certain vehicle manufacturers that reduce cost of sales when the vehicles are sold. Such credits amounted to $15,326 and $14,474 during the six months ended June 30, 2012 and 2011, respectively.

3. Business Combinations

The Company acquired sixteen and three franchises during the six months ended June 30, 2012 and 2011, respectively, in its retail operations. The Company’s financial statements include the results of operations of the acquired dealerships from the date of acquisition. The fair value of the assets acquired and liabilities assumed have been recorded in the Company’s consolidated condensed financial statements, and may be subject to adjustment pending completion of final valuation. A summary of the aggregate consideration paid and the aggregate amounts of the assets acquired and liabilities assumed for the six months ended June 30, 2012 and 2011 follows:

	June 30,
	2012			2011
Accounts receivable	$	17,025		$	953
Inventory		80,766			7,923
Property and equipment		32,599			1,671
Goodwill		33,884			7,038
Franchise Value		23,426			—
Other assets		—			628
Current liabilities		(49,362	)		(2,491	)
Non-current liabilities		(26,816	)		—
Total consideration		111,522			15,722
Seller financed/assumed debt		—			(1,711	)
Cash used in dealership acquisitions	$	111,522		$	14,011

The following unaudited consolidated pro forma results of operations of the Company for the three and six months ended June 30, 2012 and 2011 give effect to acquisitions consummated during 2012 and 2011 as if they had occurred on January 1, 2011:

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(amounts in millions except per share data)
Revenues	$	3,373	$	2,984	$	6,621	$	5,879
Income from continuing operations		50		41		100		80
Net income		49		41		96		78
Income from continuing operations per diluted common share	$	0.55	$	0.44	$	1.10	$	0.86
Net income per diluted common share	$	0.54	$	0.44	$	1.06	$	0.84

10

PENSKE AUTOMOTIVE GROUP, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

4. Intangible Assets

Following is a summary of the changes in the carrying amount of goodwill and franchise value during the six months ended June 30, 2012:

	Goodwill		Franchise Value
Balance, January 1, 2012	$	903,721	$	228,460
Additions		33,854		23,426
Foreign currency translation		3,021		927
Balance, June 30, 2012	$	940,596	$	252,813

5. Floor Plan Notes Payable — Trade and Non-trade

The Company finances substantially all of its new and a portion of its used vehicle inventories under revolving floor plan arrangements with various lenders, including the captive finance companies associated with automotive manufacturers. In the U.S., substantially all of our floor plan arrangements are due on demand; however, the Company has not historically been required to repay floor plan advances prior to the sale of the vehicles that have been financed. The Company typically makes monthly interest payments on the amount financed. Outside of the U.S., substantially all of the floor plan arrangements are payable on demand or have an original maturity of 90 days or less and the Company is generally required to repay floor plan advances at the earlier of the sale of the vehicles that have been financed or the stated maturity.

The floor plan agreements grant a security interest in substantially all of the assets of the Company’s dealership subsidiaries, and in the U.S. are guaranteed by the Company. Interest rates under the floor plan arrangements are variable and increase or decrease based on changes in the prime rate, defined London Interbank Offered Rate (“LIBOR”), the Finance House Bank Rate, or the Euro Interbank Offer Rate. The Company classifies floor plan notes payable to a party other than the manufacturer of a particular new vehicle, and all floor plan notes payable relating to pre-owned vehicles, as floor plan notes payable — non-trade on its consolidated condensed balance sheets and classifies related cash flows as a financing activity on its consolidated condensed statements of cash flows.

6. Earnings Per Share

Basic earnings per share is computed using net income attributable to Penske Automotive Group common stockholders and the number of weighted average shares of voting common stock outstanding, including outstanding unvested restricted stock awards which contain rights to non-forfeitable dividends. Diluted earnings per share is computed using net income attributable to Penske Automotive Group common stockholders and the number of weighted average shares of voting common stock outstanding, adjusted for any dilutive effects. A reconciliation of the number of shares used in the calculation of basic and diluted earnings per share for the three and six months ended June 30, 2012 and 2011 follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2012		2011		2012		2011
Weighted average number of common shares outstanding		90,305		92,514		90,363		92,444
Effect of non-participatory equity compensation		32		56		32		70
Weighted average number of common shares outstanding, including effect of dilutive securities		90,337		92,570		90,395		92,514

11

PENSKE AUTOMOTIVE GROUP, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

7. Long-Term Debt

Long-term debt consisted of the following:

	June 30,			December 31,
	2012			2011
U.S. credit agreement — revolving credit line	$	114,000		$	132,000
U.S. credit agreement — term loan		127,000			127,000
U.K. credit agreement — revolving credit line		42,401			59,060
U.K. credit agreement — term loan		42,401			—
U.K. credit agreement — overdraft line of credit		—			13,333
7.75% senior subordinated notes due 2016		375,000			375,000
3.5% senior subordinated convertible notes due 2026, net of debt discount		25,546			63,324
Mortgage facilities		74,131			75,684
Other		6,263			4,790
Total long-term debt		806,742			850,191
Less: current portion		(13,139	)		(3,414	)
Net long-term debt	$	793,603		$	846,777

U.S. Credit Agreement

The Company is party to a credit agreement with Mercedes-Benz Financial Services USA LLC and Toyota Motor Credit Corporation, as amended (the “U.S. Credit Agreement”), which provides for up to $375,000 in revolving loans for working capital, acquisitions, capital expenditures, investments and other general corporate purposes, a non-amortizing term loan with a remaining balance of $127,000, and for an additional $10,000 of availability for letters of credit, through September 2014. The revolving loans bear interest at a defined LIBOR plus 2.50%, subject to an incremental 1.00% for uncollateralized borrowings in excess of a defined borrowing base. The term loan, which bears interest at defined LIBOR plus 2.50%, may be prepaid at any time, but then may not be re-borrowed.

The U.S. Credit Agreement is fully and unconditionally guaranteed on a joint and several basis by the Company’s domestic subsidiaries and contains a number of significant covenants that, among other things, restrict the Company’s ability to dispose of assets, incur additional indebtedness, repay other indebtedness, pay dividends, create liens on assets, make investments or acquisitions and engage in mergers or consolidations. The Company is also required to comply with specified financial and other tests and ratios, each as defined in the U.S. Credit Agreement including: a ratio of current assets to current liabilities, a fixed charge coverage ratio, a ratio of debt to stockholders’ equity and a ratio of debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”). A breach of these requirements would give rise to certain remedies under the agreement, the most severe of which is the termination of the agreement and acceleration of the amounts owed. As of June 30, 2012, the Company was in compliance with all covenants under the U.S. Credit Agreement.

The U.S. Credit Agreement also contains typical events of default, including change of control, non-payment of obligations and cross-defaults to the Company’s other material indebtedness. Substantially all of the Company’s domestic assets are subject to security interests granted to lenders under the U.S. Credit Agreement. As of June 30, 2012, $127,000 of term loans, $500 of letters of credit and $114,000 of revolver borrowings were outstanding under the U.S. Credit Agreement.

U.K. Credit Agreement

The Company’s subsidiaries in the U.K. (the “U.K. subsidiaries”) are party to a £100,000 revolving credit agreement with the Royal Bank of Scotland plc (RBS) and BMW Financial Services (GB) Limited, and an additional £10,000 demand overdraft line of credit with RBS (collectively, the “U.K. credit agreement”) to be used for working capital, acquisitions, capital expenditures, investments and general corporate purposes through November 2015. The revolving loans bear interest between defined LIBOR plus 1.35% and defined LIBOR plus 3.0% and the demand overdraft line of credit bears interest at the Bank of England Base Rate plus 1.75%. As of June 30, 2012, outstanding loans under the U.K. credit agreement amounted to £27,000 ($42,401).

The U.K. Credit Agreement is fully and unconditionally guaranteed on a joint and several basis by our U.K. subsidiaries, and contains a number of significant covenants that, among other things, restrict the ability of our U.K. subsidiaries to pay dividends, dispose of assets, incur additional indebtedness, repay other indebtedness, create liens on assets, make investments or acquisitions and engage in mergers or consolidations. In addition, our U.K. subsidiaries are required to comply with defined ratios and tests, including: a ratio of earnings before interest, taxes, amortization, and rental payments (“EBITAR”) to interest plus rental payments, a measurement of maximum capital expenditures, and a debt to EBITDA ratio. A breach of these requirements would give rise to certain remedies under the agreement, the most severe of which is the termination of the agreement and acceleration of any amounts owed. As of June 30, 2012, the Company’s U.K. subsidiaries were in compliance with all covenants under the U.K. credit agreement.

12

PENSKE AUTOMOTIVE GROUP, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

The U.K. credit agreement also contains typical events of default, including change of control and non-payment of obligations and cross-defaults to other material indebtedness of our U.K. subsidiaries. Substantially all of the Company’s U.K. subsidiaries’ assets are subject to security interests granted to lenders under the U.K. credit agreement.

In January 2012, the Company’s U.K. subsidiaries entered into a separate agreement with RBS, as agent for National Westminster Bank plc, providing for a £30,000 term loan which was used for working capital and an acquisition. The term loan is repayable in £1,500 quarterly installments through 2015 with a final payment of £7,500 due December 31, 2015. The term loan bears interest between 2.675% and 4.325%, depending on the U.K. subsidiaries’ ratio of net borrowings to earnings before interest, taxes, depreciation and amortization (as defined). As of June 30, 2012, the amount outstanding under the U.K. term loan was £27,000 ($42,401).

7.75% Senior Subordinated Notes

In December 2006, the Company issued $375,000 aggregate principal amount of 7.75% senior subordinated notes (the “7.75% Notes”) due 2016. The 7.75% Notes are unsecured senior subordinated notes and are subordinate to all existing and future senior debt, including debt under the Company’s credit agreements, mortgages and floor plan indebtedness. The 7.75% Notes are guaranteed by substantially all of the Company’s wholly-owned domestic subsidiaries on an unsecured senior subordinated basis. Those guarantees are full and unconditional and joint and several. The Company can redeem all or some of the 7.75% Notes at its option at specified redemption prices (currently 103.875% of the principal amount of the notes). Upon certain sales of assets or specific kinds of changes of control the Company is required to make an offer to purchase the 7.75% Notes. The 7.75% Notes also contain customary negative covenants and events of default. As of June 30, 2012, the Company was in compliance with all negative covenants and there were no events of default.

Senior Subordinated Convertible Notes

On May 25, 2012, the Company provided notice to holders of the Notes that the Company was exercising the Company’s right to redeem the Notes at a price of 100% of the principal amount outstanding plus accrued and unpaid interest to, but excluding June 25, 2012. In lieu of surrendering the notes for redemption, Note holders could elect to convert the Notes at any time prior to the close of business on June 21, 2012 based on a conversion rate of 42.7796 shares of the Company’s common stock per $1,000 principal amount of the Convertible Notes (which is equal to a conversion price of approximately $23.38 per share).

Upon conversion of the Convertible Notes, for each $1,000 Note, a holder was entitled to receive an amount in cash, equal to the lesser of (i) $1,000 or (ii) the conversion value, determined in the manner set forth in the indenture covering the Convertible Notes. To the extent the conversion value exceeded $1,000, the Company was required to also deliver, cash, common stock or a combination of cash and common stock with respect to the value in excess of $1,000.

Holders of $25,546 outstanding principal amount of Convertible Notes elected to convert their Notes. The Company settled the principal and interest due on the remaining $37,778 on June 25, 2012. In July, the Company paid the converting holders the conversion balance due of $24,909 in cash. Following this payment, the Company had fulfilled all of its obligations under the Convertible Notes.

Mortgage Facilities

The Company is party to several mortgages which bear interest at defined rates and require monthly principal and interest payments. These mortgage facilities also contain typical events of default, including non-payment of obligations, cross-defaults to the Company’s other material indebtedness, certain change of control events, and the loss or sale of certain franchises operated at the properties. Substantially all of the buildings and improvements on the properties financed pursuant to the mortgage facilities are subject to security interests granted to the lender. As of June 30, 2012, the Company owed $74,131 of principal under our mortgage facilities.

13

PENSKE AUTOMOTIVE GROUP, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

8. Interest Rate Swaps

The Company periodically uses interest rate swaps to manage interest rate risk associated with the Company’s variable rate floor plan debt. The Company is party to interest rate swap agreements through December 2014 pursuant to which the LIBOR portion of $300,000 of the Company’s floating rate floor plan debt is fixed at 2.135% and $100,000 of the Company’s floating rate floor plan debt is fixed at a rate of 1.55%. The Company may terminate these agreements at any time, subject to the settlement of the then current fair value of the swap arrangements.

Through January 2011, the Company was party to interest rate swap agreements pursuant to which the LIBOR portion of $300,000 of the Company’s floating rate floor plan debt was fixed at 3.67%.

The Company used Level 2 inputs to estimate the fair value of the interest rate swap agreements. As of June 30, 2012 and December 31, 2011, the fair value of the swaps designated as hedging instruments was estimated to be a liability of $16,346 and $15,952, respectively.

During the three and six months ended June 30, 2012 and 2011, there was no hedge ineffectiveness recorded on the Company’s income statement. During the three and six months ended June 30, 2012, the swaps increased the weighted average interest rate on the Company’s floor plan borrowings by approximately 39 and 40 basis points, respectively. The impact of the swaps on the weighted average interest rate of the Company’s floor plan borrowings during the three and six months ended June 30, 2011, was insignificant.

9. Commitments and Contingent Liabilities

The Company is involved in litigation which may relate to claims brought by governmental authorities, issues with customers, and employment related matters, including class action claims and purported class action claims. As of June 30, 2012, the Company is not party to any legal proceedings, including class action lawsuits, that individually or in the aggregate, are reasonably expected to have a material adverse effect on the Company’s results of operations, financial condition or cash flows. However, the results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material adverse effect on the Company’s results of operations, financial condition or cash flows.

The Company has historically structured its operations so as to minimize ownership of real property. As a result, the Company leases or subleases substantially all of its facilities. These leases are generally for a period between five and 20 years, and are typically structured to include renewal options at the Company’s election. Pursuant to the leases for some of the Company’s larger facilities, the Company is required to comply with specified financial ratios, including a “rent coverage” ratio and a debt to EBITDA ratio, each as defined. For these leases, non-compliance with the ratios may require the Company to post collateral in the form of a letter of credit. A breach of the other lease covenants gives rise to certain remedies by the landlord, the most severe of which include the termination of the applicable lease and acceleration of the total rent payments due under the lease. As of June 30, 2012, the Company was in compliance with all covenants under these leases.

The Company has sold a number of dealerships to third parties and, as a condition to certain of those sales, remains liable for the lease payments relating to the properties on which those businesses operate in the event of non-payment by the buyer. The Company is also party to lease agreements on properties that it no longer uses in its retail operations that it has sublet to third parties. The Company relies on subtenants to pay the rent and maintain the property at these locations. In the event the subtenant does not perform as expected, the Company may not be able to recover amounts owed to it and the Company could be required to fulfill these obligations.

The Company holds a 9.0% limited partnership interest in PTL. During 2012, PTL has refinanced a significant amount of its indebtedness. As part of that refinancing, the Company and the other PTL partners created a new company (“Holdings”), which, together with General Electric Capital Corporation (“GECC”), co-issued $700,000 of 3.8% senior unsecured notes due 2019 to certain investors through an offering pursuant to Rule 144A of the Securities Act of 1933, as amended (the “Holdings Bonds”). A wholly-owned subsidiary of Holdings contributed $700,000 derived from the net proceeds from the offering of the Holdings Bonds and a portion of its cash on hand to PTL in exchange for a 21.5% limited partner interest in PTL. PTL used the $700,000 of funds to reduce its outstanding debt owed to GECC. GECC agreed to be a co-obligor of the Holdings Bonds in order to achieve lower interest rates on the Holdings Bonds.

Additional capital contributions from the members may be required to fund interest and principal payments on the Holdings Bonds. In addition, the Company has agreed to indemnify GECC for 9.0% of any principal or interest that GECC is required to pay as co-obligor, and pay GECC an annual fee of approximately $950 for acting as co-obligor. The maximum amount of the Company’s potential obligations to GECC under this agreement are 9% of the required principal repayment due in 2019 (which is expected to be $63,100) and 9% of interest payments under the Holdings Bonds, plus fees and default interest, if any.

14

PENSKE AUTOMOTIVE GROUP, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

The Company has $18,997 of letters of credit outstanding as of June 30, 2012, and has posted $13,699 of surety bonds in the ordinary course of business.

10. Equity

Share Repurchase

During the six months ended June 30, 2012, the Company repurchased 350,000 shares of its outstanding common stock for $8,522, or an average of $24.35 per share, under a program approved by the Company’s Board of Directors. During the second quarter of 2012, the Company acquired an additional 55,631 shares of its common stock for $1,307, or an average of $23.49 per share, from employees in connection with vesting of employee restricted stock awards.

11. Segment Information

The Company’s operations are organized by management into operating segments by line of business and geography. The Company has determined it has two reportable segments as defined in generally accepted accounting principles for segment reporting, including: (i) Retail, consisting of the Company’s automotive retail operations and (ii) PAG Investments, consisting of the Company’s investments in businesses other than automotive retail operations. The Retail reportable segment includes all automotive dealerships and all departments relevant to the operation of the dealerships and the retail automotive joint ventures. The individual dealership operations included in the Retail reportable segment have been grouped into four geographic operating segments, which have been aggregated into one reportable segment as their operations (A) have similar economic characteristics (all are automotive dealerships having similar margins), (B) offer similar products and services (all sell new and used vehicles, service, parts and third-party finance and insurance products), (C) have similar target markets and customers (generally individuals) and (D) have similar distribution and marketing practices (all distribute products and services through dealership facilities that market to customers in similar fashions).

Three Months Ended June 30

	Retail		PAG Investments		Total
Revenues
2012	$	3,372,479	$	—	$	3,372,479
2011		2,829,986		—		2,829,986
Segment income
2012		69,722		7,201		76,923
2011		53,951		6,268		60,219

Six Months Ended June 30

	Retail		PAG Investments		Total
Revenues
2012	$	6,605,222	$	—	$	6,605,222
2011		5,568,119		—		5,568,119
Segment income
2012		142,941		11,035		153,976
2011		104,645		7,392		112,037

15

PENSKE AUTOMOTIVE GROUP, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

12. Consolidating Condensed Financial Information

The following tables include condensed consolidating financial information as of June 30, 2012 and December 31, 2011 and for the three and six month periods ended June 30, 2012 and 2011 for Penske Automotive Group, Inc. (as the issuer of the 7.75% Notes), guarantor subsidiaries and non-guarantor subsidiaries (primarily representing foreign entities). 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, 2012

	Total Company		Eliminations			Penske Automotive Group		Guarantor Subsidiaries		Non-Guarantor Subsidiaries
	(In thousands)
Cash and cash equivalents	$	37,219	$	—		$	—	$	18,029	$	19,190
Accounts receivable, net		464,424		(324,158	)		324,158		261,705		202,719
Inventories		1,830,841		—			—		1,063,722		767,119
Other current assets		91,963		—			4,248		41,075		46,640
Assets held for sale		39,059		—			—		12,966		26,093
Total current assets		2,463,506		(324,158	)		328,406		1,397,497		1,061,761
Property and equipment, net		925,054		—			4,843		576,715		343,496
Intangible assets		1,193,409		—			—		705,851		487,558
Equity method investments		296,627		—			247,401		—		49,226
Other long-term assets		14,269		(1,384,066	)		1,394,431		2,205		1,699
Total assets	$	4,892,865	$	(1,708,224	)	$	1,975,081	$	2,682,268	$	1,943,740
Floor plan notes payable	$	1,158,252	$	—		$	—	$	664,954	$	493,298
Floor plan notes payable — non-trade		724,687		—			119,600		355,127		249,960
Accounts payable		310,686		—			2,224		105,852		202,610
Accrued expenses		258,726		(324,158	)		466		154,353		428,065
Current portion of long-term debt		13,139		—			—		3,717		9,422
Liabilities held for sale		34,149		—			—		9,551		24,598
Total current liabilities		2,499,639		(324,158	)		122,290		1,293,554		1,407,953
Long-term debt		793,603		(40,683	)		641,546		75,791		116,949
Deferred tax liabilities		223,485		—			—		196,834		26,651
Other long-term liabilities		164,893		—			—		94,720		70,173
Total liabilities		3,681,620		(364,841	)		763,836		1,660,899		1,621,726
Total equity		1,211,245		(1,343,383	)		1,211,245		1,021,369		322,014
Total liabilities and equity	$	4,892,865	$	(1,708,224	)	$	1,975,081	$	2,682,268	$	1,943,740

16

PENSKE AUTOMOTIVE GROUP, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

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

17

PENSKE AUTOMOTIVE GROUP, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

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	$	3,372,479		$	—		$	—		$	2,011,105		$	1,361,374
Cost of sales		2,859,075			—			—			1,689,639			1,169,436
Gross profit		513,404			—			—			321,466			191,938
Selling, general and administrative expenses		409,452			—			4,740			248,711			156,001
Depreciation		13,651			—			246			7,475			5,930
Operating income (loss)		90,301			—			(4,986	)		65,280			30,007
Floor plan interest expense		(9,971	)		—			(2,254	)		(4,199	)		(3,518	)
Other interest expense		(11,575	)		—			(7,079	)		(603	)		(3,893	)
Equity in earnings of affiliates		8,168						6,994			(40	)		1,214
Equity in earnings of subsidiaries		—			(83,728	)		83,728			—			—
Income (loss) from continuing operations before income taxes		76,923			(83,728	)		76,403			60,438			23,810
Income taxes		(26,854	)		29,429			(26,854	)		(23,231	)		(6,198	)
Income (loss) from continuing operations		50,069			(54,299	)		49,549			37,207			17,612
(Loss) income from discontinued operations, net of tax		(457	)		457			(457	)		(392	)		(65	)
Net income (loss)		49,612			(53,842	)		49,092			36,815			17,547
Less: Income attributable to the non-controlling interests		520			—			—			—			520
Net income (loss) attributable to Penske Automotive Group common stockholders		49,092			(53,842	)		49,092			36,815			17,027
Other comprehensive income (loss), net of tax		(10,896	)		—			534			(15	)		(11,415	)
Comprehensive income attributable to Penske Automotive Group common stockholders	$	38,196		$	(53,842	)	$	49,626		$	36,800		$	5,612

18

PENSKE AUTOMOTIVE GROUP, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENT OF INCOME

Three Months Ended June 30, 2011

	Total Company			Eliminations			Penske Automotive Group			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
	(In thousands)
Revenues	$	2,829,986		$	—		$	—		$	1,645,845		$	1,184,141
Cost of sales		2,374,026			—			—			1,359,571			1,014,455
Gross profit		455,960			—			—			286,274			169,686
Selling, general and administrative expenses		374,325			—			4,790			232,576			136,959
Depreciation		11,926			—			257			6,572			5,097
Operating income (loss)		69,709			—			(5,047	)		47,126			27,630
Floor plan interest expense		(6,921	)		—			(329	)		(3,348	)		(3,244	)
Other interest expense		(10,451	)		—			(5,818	)		(598	)		(4,035	)
Equity in earnings (losses) of affiliates		7,882			—			6,121			—			1,761
Equity in earnings of subsidiaries		—			(64,793	)		64,793			—			—
Income (loss) from continuing operations before income taxes		60,219			(64,793	)		59,720			43,180			22,112
Income taxes		(20,505	)		22,247			(20,505	)		(15,851	)		(6,396	)
Income (loss) from continuing operations		39,714			(42,546	)		39,215			27,329			15,716
(Loss) income from discontinued operations, net of tax		345			(345	)		345			380			(35	)
Net income (loss)		40,059			(42,891	)		39,560			27,709			15,681
Less: Income attributable to the non-controlling interests		499			—			—			—			499
Net income (loss) attributable to Penske Automotive Group common stockholders		39,560			(42,891	)		39,560			27,709			15,182
Other comprehensive income (loss), net of tax		(1,477	)		—			(318	)		(3,996	)		2,837
Comprehensive income attributable to Penske Automotive Group common stockholders	$	38,083		$	(42,891	)	$	39,242		$	23,713		$	18,019

19

PENSKE AUTOMOTIVE GROUP, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

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	$	6,605,222		$	—		$	—		$	3,844,225		$	2,760,997
Cost of sales		5,586,644			—			—			3,226,744			2,359,900
Gross profit		1,018,578			—			—			617,481			401,097
Selling, general and administrative expenses		806,799			—			9,335			487,120			310,344
Depreciation		26,976			—			608			14,597			11,771
Operating income (loss)		184,803			—			(9,943	)		115,764			78,982
Floor plan interest expense		(19,620	)		—			(4,452	)		(7,989	)		(7,179	)
Other interest expense		(23,785	)		—			(14,642	)		(1,513	)		(7,630	)
Equity in earnings (losses) of affiliates		12,578			—			10,754			(40	)		1,864
Equity in earnings of subsidiaries		—			(171,551	)		171,551			—			—
Income (loss) from continuing operations before income taxes		153,976			(171,551	)		153,268			106,222			66,037
Income taxes		(53,744	)		60,155			(53,744	)		(43,778	)		(16,377	)
Income (loss) from continuing operations		100,232			(111,396	)		99,524			62,444			49,660
(Loss) income from discontinued operations, net of tax		(3,614	)		3,614			(3,614	)		(1,997	)		(1,617	)
Net income (loss)		96,618			(107,782	)		95,910			60,447			48,043
Less: Income attributable to the non-controlling interests		708			—			—			—			708
Net income (loss) attributable to Penske Automotive Group common stockholders		95,910			(107,782	)		95,910			60,447			47,335
Other comprehensive income (loss), net of tax		(195	)		—			1,543			(249	)		(1,489	)
Comprehensive income attributable to Penske Automotive Group common stockholders	$	95,715		$	(107,782	)	$	97,453		$	60,198		$	45,846

20

PENSKE AUTOMOTIVE GROUP, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENT OF INCOME

Six Months Ended June 30, 2011

	Total Company			Eliminations			Penske Automotive Group			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
	(In thousands)
Revenues	$	5,568,119		$	—		$	—		$	3,197,904		$	2,370,215
Cost of sales		4,674,698			—			—			2,653,800			2,020,898
Gross profit		893,421			—			—			544,104			349,317
Selling, general and administrative expenses		728,349			—			9,739			445,788			272,822
Depreciation		23,705			—			542			12,795			10,368
Operating income (loss)		141,367			—			(10,281	)		85,521			66,127
Floor plan interest expense		(13,780	)		—			(462	)		(7,220	)		(6,098	)
Other interest expense		(21,736	)		—			(12,234	)		(1,249	)		(8,253	)
Debt discount amortization		(1,718	)		—			(1,718	)		—			—
Equity in earnings (losses) of affiliates		7,904			—			7,352			—			552
Equity in earnings of subsidiaries		—			(128,811	)		128,811			—			—
Income (loss) from continuing operations before income taxes		112,037			(128,811	)		111,468			77,052			52,328
Income taxes		(36,043	)		41,651			(36,043	)		(26,785	)		(14,866	)
Income (loss) from continuing operations		75,994			(87,160	)		75,425			50,267			37,462
(Loss) income from discontinued operations, net of tax		(1,938	)		1,938			(1,938	)		(1,597	)		(341	)
Net income (loss)		74,056			(85,222	)		73,487			48,670			37,121
Less: Income attributable to the non-controlling interests		569			—			—			—			569
Net income (loss) attributable to Penske Automotive Group common stockholders		73,487			(85,222	)		73,487			48,670			36,552
Other comprehensive income (loss), net of tax		15,045			—			(981	)		(3,714	)		19,740
Comprehensive income attributable to Penske Automotive Group common stockholders	$	88,532		$	(85,222	)	$	72,506		$	44,956		$	56,292

21

PENSKE AUTOMOTIVE GROUP, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

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	$	204,186		$	56,571		$	8,658		$	138,957
Investing activities:
Purchase of equipment and improvements		(57,092	)		(754	)		(44,410	)		(11,928	)
Dealership acquisitions, net		(111,522	)					(3,416	)		(108,106	)
Other		(3,653	)		—			(970	)		(2,683	)
Net cash from continuing investing activities		(172,267	)		(754	)		(48,796	)		(122,717	)
Financing activities:
Repurchase of 3.5% senior subordinated convertible notes		(37,778	)		(37,778	)
Net borrowings (repayments) of other long-term debt		(6,427	)		(18,000	)		(967	)		12,540
Net borrowings (repayments) of floor plan notes payable — non-trade		32,799			28,708			19,506			(15,415	)
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		(40,153	)		(55,817	)		19,124			(3,460	)
Net cash from discontinued operations		16,777			—			11,794			4,983
Net change in cash and cash equivalents		8,543			—			(9,220	)		17,763
Cash and cash equivalents, beginning of period		28,676			—			27,249			1,427
Cash and cash equivalents, end of period	$	37,219		$	—		$	18,029		$	19,190

22

PENSKE AUTOMOTIVE GROUP, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Six Months Ended June 30, 2011

				Penske Automotive
	Total						Guarantor			Non-Guarantor
	Company			Group			Subsidiaries			Subsidiaries
	(In thousands)
Net cash from continuing operating activities	$	41,661		$	84,594		$	1,030		$	(43,963	)
Investing activities:
Purchase of equipment and improvements		(51,435	)		(1,308	)		(27,786	)		(22,341	)
Dealership acquisitions, net		(14,011	)		—			(12,331	)		(1,680	)
Other		2,865			—			—			2,865
Net cash from continuing investing activities		(62,581	)		(1,308	)		(40,117	)		(21,156	)
Financing activities:
Repurchase of 3.5% senior subordinated convertible notes		(87,278	)		(87,278	)		—			—
Net borrowings (repayments) of other long-term debt		13,602			—			23,541			(9,939	)
Net borrowings (repayments) of floor plan notes payable — non-trade		70,084			20,200			(23,492	)		73,376
Proceeds from exercises of options, including excess tax benefit		2,698			2,698			—			—
Repurchase of common stock		(12,413	)		(12,413	)		—			—
Dividends		(6,493	)		(6,493	)		—			—
Distributions from (to) parent		—			—			4,245			(4,245	)
Net cash from continuing financing activities		(19,800	)		(83,286	)		4,294			59,192
Net cash from discontinued operations		28,196			—			20,011			8,185
Net change in cash and cash equivalents		(12,524	)		—			(14,782	)		2,258
Cash and cash equivalents, beginning of period		19,904			—			16,238			3,666
Cash and cash equivalents, end of period	$	7,380		$	—		$	1,456		$	5,924

23

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including those discussed in “Forward Looking Statements.” We have acquired and initiated a number of businesses during the periods presented and addressed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations. Our financial statements include the results of operations of those businesses from the date acquired or when they commenced operations. This Management’s Discussion and Analysis of Financial Condition and Results of Operations has also been updated to reflect the revision of our financial statements for entities which have been treated as discontinued operations through June 30, 2012.

Overview

We are the second largest automotive retailer headquartered in the U.S. as measured by the $11.6 billion in total revenue we generated in 2011. As of June 30, 2012, we operated 338 retail automotive franchises, of which 170 franchises are located in the U.S. and 168 franchises are located outside of the U.S. The franchises outside the U.S. are located primarily in the U.K. During the six months ended June 30, 2012, we retailed and wholesaled more than 207,000 vehicles. We are diversified geographically, with 62% of our total revenues during the six months ended June 30, 2012, generated in the U.S. and Puerto Rico and 38% generated outside the U.S. We offer approximately 40 brands with 96% of our total retail revenue during the six months ended June 30, 2012, generated from brands of non-U.S. based manufacturers, and 68% generated from premium brands, such as Audi, BMW, Mercedes-Benz and Porsche. Each of our dealerships offers a wide selection of new and used vehicles for sale. In addition to selling new and used vehicles, we generate higher-margin revenue at each of our dealerships through maintenance and repair services and the sale and placement of higher-margin products, such as third-party finance and insurance products, third-party extended service contracts and replacement and aftermarket automotive products.

We also hold a 9.0% limited partnership interest in Penske Truck Leasing Co., L.P. (“PTL”), a leading transportation services provider. PTL leases, rents or maintains more than 200,000 vehicles and serves customers in North America, South America, Europe and Asia and is one of the largest purchasers of commercial trucks in North America through its approximately 1,000 corporate and 1,900 agent locations. Product lines include full-service leasing, contract maintenance, commercial and consumer truck rentals, used truck sales, transportation and warehousing management and supply chain management solutions. The general partner of PTL is Penske Truck Leasing Corporation, a wholly-owned subsidiary of Penske Corporation, which, together with other wholly-owned subsidiaries of Penske Corporation, owns 41.1% of PTL. The remaining 49.9% of PTL is owned by General Electric Capital Corporation.

Outlook

The level of new automotive unit sales in our markets affects our results. The new vehicle market and the amount of customer traffic visiting our dealerships have improved during the past few years, and there are market expectations for continued improvement in the automotive market in the U.S. over the next several years. During the six months ended June 30, 2012, 7.3 million cars and light trucks were sold in the U.S., representing a 14.8% improvement over the 6.3 million cars and light trucks sold during the same period last year. We believe the U.S. automotive market will continue to recover based upon industry forecasts from companies such as JD Power, coupled with demand in the marketplace, an aging vehicle population, lower cost of credit for consumers, and the planned introduction of new models by many different vehicle brands.

Vehicle registrations in the U.K were 1.1 million during the six months ended June 30, 2012, compared to 1.0 million during the same period of 2011, representing an increase of 2.7%. Based on industry forecasts from entities such as the Society of Motor Manufacturers and Traders (www.smmt.co.uk), we believe despite domestic and international economic concerns, U.K. motorists are responding positively to new products and the latest fuel-efficient technology. We also expect continued resiliency in premium brand sales in the U.K. See “Forward-Looking Statements.”

Operating Overview

New and used vehicle revenues include sales to retail customers and to leasing companies providing consumer automobile leasing. We generate finance and insurance revenues from sales of third-party extended service contracts, sales of third-party insurance policies, commissions relating to the sale of finance and lease contracts to third parties and the sales of certain other products. Service and parts revenues include fees paid for repair, maintenance and collision services, and the sale of replacement parts and other aftermarket accessories.

24

Our gross profit tends to vary with the mix of revenues we derive from the sale of new vehicles, used vehicles, finance and insurance products, and service and parts transactions. Our gross profit varies across product lines, with vehicle sales usually resulting in lower gross profit margins and our other revenues resulting in higher gross profit margins. Factors such as inventory and vehicle availability, customer demand, consumer confidence, unemployment, general economic conditions, seasonality, weather, credit availability, fuel prices and manufacturers’ advertising and incentives also impact the mix of our revenues, and therefore influence our gross profit margin. Aggregate gross profit increased $57.4 million, or 12.6%, and $125.2 million, or 14.0%, during the three and six months ended June 30, 2012, compared to the same periods in prior year. The increase in gross profit is largely attributable to same-store increases in new and used unit sales and service and parts revenues. Our retail gross margin percentage declined from 17.0% during the three and six months ended June 30, 2011 to 16.3% and 16.5% during the three and six months ended June 30, 2012, respectively, due primarily to lower gross margin on new and used vehicle retail sales during the six months ended June 30, 2012, as well as an increase in the percentage of our revenues generated by vehicle sales, which carry a lower gross margin than other parts of our business.

Our selling expenses consist of advertising and compensation for sales personnel, including commissions and related bonuses. General and administrative expenses include compensation for administration, finance, legal and general management personnel, rent, insurance, utilities, and other expenses. As the majority of our selling expenses are variable, and we believe a significant portion of our general and administrative expenses are subject to our control, we believe our expenses can be adjusted over time to reflect economic trends.

Floor plan interest expense relates to financing incurred in connection with the acquisition of new and used vehicle inventories that is secured by those vehicles. Other interest expense consists of interest charges on all of our interest-bearing debt, other than interest relating to floor plan financing. The cost of our variable rate indebtedness is based on the prime rate, defined London Interbank Offered Rate (“LIBOR”), the Bank of England Base Rate, the Finance House Base Rate, or the Euro Interbank Offered Rate. Our floor plan interest expense has increased during the three and six months ended June 30, 2012, as a result of higher applicable interest rates due to the impact of interest rate swap transactions, as well as an increase in the amounts outstanding under floor plan arrangements. Our other interest expense has increased during the three and six months ended June 30, 2012, due to the increase in borrowings under our revolving credit agreements in the U.S. and U.K. following acquisitions in 2011 and during the six months ended June 30, 2012.

Equity in earnings of affiliates represents our share of the earnings from our investments in joint ventures and other non-consolidated investments, including PTL. It is our expectation that operating conditions as outlined above in the Outlook section will similarly impact these businesses throughout 2012. However, because PTL is engaged in different businesses than we are, its operating performance may vary significantly from ours.

The future success of our business is dependent upon, among other things, general economic and industry conditions, our ability to consummate and integrate acquisitions, the level of vehicle sales in the markets where we operate, our ability to increase sales of higher margin products, especially service and parts services, our ability to realize returns on our significant capital investment in new and upgraded dealership facilities, and the return realized from our investments in various joint ventures and other non-consolidated investments. See “Forward-Looking Statements.”

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires the application of accounting policies that often involve making estimates and employing judgments. Such judgments influence the assets, liabilities, revenues and expenses recognized in our financial statements. Management, on an ongoing basis, reviews these estimates and assumptions. Management may determine that modifications in assumptions and estimates are required, which may result in a material change in our results of operations or financial position.

The following are the accounting policies applied in the preparation of our financial statements that management believes are most dependent upon the use of estimates and assumptions.

Revenue Recognition

Vehicle, Parts and Service Sales

We record revenue when vehicles are delivered and title has passed to the customer, when vehicle service or repair work is completed and when parts are delivered to our customers. Sales promotions that we offer to customers are accounted for as a reduction of revenues at the time of sale. Rebates and other incentives offered directly to us by manufacturers are recognized as a reduction of cost of sales. Reimbursements of qualified advertising expenses are treated as a reduction of selling, general and administrative expenses. The amounts received under certain manufacturer rebate and incentive programs are based on the attainment of program objectives, and such earnings are recognized either upon the sale of the vehicle for which the award was received, or upon attainment of the particular program goals if not associated with individual vehicles. During the six months ended June 30, 2012 and 2011, we earned $226.1 million and $178.4 million, respectively, of rebates, incentives and reimbursements from manufacturers, of which $220.3 million and $174.0 million was recorded as a reduction of cost of sales.

25

Finance and Insurance Sales

Subsequent to the sale of a vehicle to a customer, we sell installment sale contracts to various financial institutions on a non-recourse basis (with specified exceptions) to mitigate the risk of default. We receive a commission from the lender equal to either the difference between the interest rate charged to the customer and the interest rate set by the financing institution or a flat fee. We also receive commissions for facilitating the sale of various third-party insurance products to customers, including credit and life insurance policies and extended service contracts. These commissions are recorded as revenue at the time the customer enters into the contract.

Impairment Testing

Franchise value impairment is assessed as of October 1 every year and upon the occurrence of an indicator of impairment through a comparison of its carrying amount and estimated fair value. An indicator of impairment exists if the carrying value of a franchise exceeds its estimated fair value and an impairment loss may be recognized up to that excess. The fair value of franchise value is determined using a discounted cash flow approach, which includes assumptions about revenue and profitability growth, franchise profit margins, and our cost of capital. We also evaluate our franchise agreements in connection with the annual impairment testing to determine whether events and circumstances continue to support our assessment that the franchise agreements have an indefinite life.

Goodwill impairment is assessed at the reporting unit level as of October 1 every year and upon the occurrence of an indicator of impairment. Our operations are organized by management into operating segments by line of business and geography. We have determined we have two reportable segments as defined in generally accepted accounting principles for segment reporting, including: (i) Retail, consisting of our automotive retail operations and (ii) PAG Investments, consisting of our investments in businesses other than automotive retail operations. We have determined that the dealerships in each of our operating segments within the Retail reportable segment are components that are aggregated into four geographical reporting units for the purpose of goodwill impairment testing, as they (A) have similar economic characteristics (all are automotive dealerships having similar margins), (B) offer similar products and services (all sell new and used vehicles, service, parts and third-party finance and insurance products), (C) have similar target markets and customers (generally individuals) and (D) have similar distribution and marketing practices (all distribute products and services through dealership facilities that market to customers in similar fashions). There is no goodwill recorded in our PAG Investments reportable segment.

We prepare a qualitative assessment of the carrying value of goodwill in our reportable segments using the criteria in ASC 350-20-35-3 to determine whether it is more likely than not that a reporting unit’s fair value is less than its carrying value. If it were determined through the qualitative assessment that a reporting unit’s fair value is more likely than not greater than its carrying value, additional analysis would be unnecessary. During 2011, we concluded that it was not more likely than not that any of the four reporting unit’s fair value was less than their carrying amount.

If the additional impairment testing was necessary, we would have estimated the fair value of our reporting units using an “income” valuation approach. The “income” valuation approach estimates our enterprise value using a net present value model, which discounts projected free cash flows of our business using our weighted average cost of capital as the discount rate. This consideration would also include a control premium that represents the estimated amount an investor would pay for our equity securities to obtain a controlling interest and other significant assumptions including revenue and profitability growth, franchise profit margins, residual values and our cost of capital.

Investments

We account for each of our investments under the equity method, pursuant to which we record our proportionate share of the investee’s income each period. The net book value of our investments was $296.6 million and $298.6 million as of June 30, 2012 and December 31, 2011, respectively. Investments for which there is not a liquid, actively traded market are reviewed periodically by management for indicators of impairment. If an indicator of impairment is identified, management estimates the fair value of the investment using a discounted cash flow approach, which includes assumptions relating to revenue and profitability growth, profit margins, and our cost of capital. Declines in investment values that are deemed to be other than temporary may result in an impairment charge reducing the investments’ carrying value to fair value.

Self-Insurance

We retain risk relating to certain of our general liability insurance, workers’ compensation insurance, auto physical damage insurance, property insurance, employment practices liability insurance, directors and officers insurance and employee medical benefits in the U.S. As a result, we are likely to be responsible for a significant portion of the claims and losses incurred under these programs. The amount of risk we retain varies by program, and, for certain exposures, we have pre-determined maximum loss limits for certain individual claims and/or insurance periods. Losses, if any, above any such pre-determined loss limits are paid by third-party insurance carriers. Our estimate of future losses is prepared by management using our historical loss experience and industry-based development factors. Aggregate reserves relating to retained risk were $26.9 million and $25.9 million as of June 30, 2012 and December 31, 2011, respectively. Changes in the reserve estimate during 2012 relate primarily to our general liability and workers compensation programs.

26

Income Taxes

Tax regulations may require items to be included in our tax returns at different times than the items are reflected in our financial statements. Some of these differences are permanent, such as expenses that are not deductible on our tax return, and some are temporary differences, such as the timing of depreciation expense. Temporary differences create deferred tax assets and liabilities. Deferred tax assets generally represent items that will be used as a tax deduction or credit in our tax returns in future years which we have already recorded in our financial statements. Deferred tax liabilities generally represent deductions taken on our tax returns that have not yet been recognized as expense in our financial statements. We establish valuation allowances for our deferred tax assets if the amount of expected future taxable income is not likely to allow for the use of the deduction or credit.

Classification in Continuing and Discontinued Operations

We classify the results of our operations in our consolidated financial statements based on generally accepted accounting principles relating to discontinued operations, which requires judgments, including whether a business will be divested, the period required to complete the divestiture, and the likelihood of changes to the divestiture plans. If we determine that a business should be either reclassified from continuing operations to discontinued operations or from discontinued operations to continuing operations, our consolidated financial statements for prior periods are revised to reflect such reclassification.

New Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2011-04, “Fair Value Measurements and Disclosures (Topic 820) — Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” ASU No. 2011-04 clarifies the application of existing fair value measurement and disclosure requirements, changes certain principles related to measuring fair value, and requires additional disclosures about fair value measurements. ASU No. 2011-04 is effective for periods beginning after December 15, 2011. We adopted the standard on January 1, 2012. Adoption of ASU No. 2011-04 did not affect our consolidated financial position, results of operations, or cash flows.

In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income (Topic 220) — Presentation of Comprehensive Income”, which requires the presentation of components of other comprehensive income with the components of net income. We adopted the standard on January 1, 2012. Adoption of ASU No. 2011-05 did not affect our consolidated financial position, results of operations, or cash flows.

In December 2011, the FASB issued ASU No. 2011-11, “Balance Sheet (Topic 210) — Disclosures about Offsetting Assets and Liabilities.” ASU No. 2011-11 will require disclosure of the effect or potential effect of offsetting arrangements on our financial position as well as enhanced disclosure of the rights of setoff associated with our recognized assets and recognized liabilities. ASU No. 2011-11 is effective for periods beginning on or after January 1, 2013. Since these amended principles require only additional disclosures concerning offsetting and related arrangements, adoption will not affect our consolidated financial position, results of operations, or cash flows.

27

Results of Operations

The following tables present comparative financial data relating to our operating performance in the aggregate and on a “same-store” basis. Dealership results are included in same-store comparisons when we have consolidated the acquired entity during the entirety of both periods being compared. As an example, if a dealership was acquired on January 15, 2010, the results of the acquired entity would be included in annual same store comparisons beginning with the year ended December 31, 2012 and in quarterly same store comparisons beginning with the quarter ended June 30, 2011.

Three Months Ended June 30, 2012 Compared to Three Months Ended June 30, 2011

New Vehicle Data

Dollars in millions, except per unit amounts							2012 vs. 2011
	2012			2011			Change			% Change
New retail unit sales		46,766			37,484			9,282			24.8	%
Same store new retail unit sales		42,876			37,303			5,573			14.9	%
New retail sales revenue	$	1,729.2		$	1,399.5			329.7			23.6	%
Same store new retail sales revenue	$	1,586.6		$	1,394.6			192.0			13.8	%
New retail sales revenue per unit	$	36,975		$	37,335			(360	)		-1.0	%
Same store new retail sales revenue per unit	$	37,004		$	37,384			(380	)		-1.0	%
Gross profit — new	$	138.9		$	119.2			19.7			16.5	%
Same store gross profit — new	$	126.8		$	118.7			8.1			6.8	%
Average gross profit per new vehicle retailed	$	2,969		$	3,179			(210	)		-6.6	%
Same store average gross profit per new vehicle retailed	$	2,958		$	3,183			(225	)		-7.1	%
Gross margin % — new		8.0	%		8.5	%		-0.5	%		-5.9	%
Same store gross margin % — new		8.0	%		8.5	%		-0.5	%		-5.9	%

Units

Retail unit sales of new vehicles increased 9,282 units, or 24.8%, from 2011 to 2012. The increase is due to a 5,573 unit, or 14.9%, increase in same store retail unit sales during the period, coupled with a 3,709 unit increase from net dealership acquisitions. The same store increase was due primarily to unit sales increases in our premium and foreign volume brand stores in the U.S.

Revenues

New vehicle retail sales revenue increased $329.7 million, or 23.6%, from 2011 to 2012. The increase is due to a $192.0 million, or 13.8%, increase in same store revenues, coupled with a $137.7 million increase from net dealership acquisitions. The same store revenue increase is due primarily to the 14.9% increase in same store retail unit sales, which increased revenue by $206.2 million, somewhat offset by a $380, or 1%, decrease in comparative average selling prices per unit which decreased revenue by $14.2 million.

Gross Profit

Retail gross profit from new vehicle sales increased $19.7 million, or 16.5%, from 2011 to 2012. The increase is due to an $11.6 million increase from net dealership acquisitions coupled with an $8.1 million, or 6.8%, increase in same store gross profit. The same store increase is due primarily to the 14.9% increase in retail unit sales, which increased gross profit by $16.5 million, somewhat offset by a $225, or 7.1%, decrease in the average gross profit per new vehicle retailed, which decreased gross profit by $8.4 million.

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Used Vehicle Data

Dollars in millions, except per unit amounts							2012 vs. 2011
	2012			2011			Change			% Change
Used retail unit sales		37,580			32,290			5,290			16.4	%
Same store used retail unit sales		34,943			32,201			2,742			8.5	%
Used retail sales revenue	$	964.5		$	855.6			108.9			12.7	%
Same store used retail sales revenue	$	899.5		$	853.8			45.7			5.4	%
Used retail sales revenue per unit	$	25,666		$	26,497			(831	)		-3.1	%
Same store used retail sales revenue per unit	$	25,741		$	26,514			(773	)		-2.9	%
Gross profit — used	$	74.1		$	71.2			2.9			4.1	%
Same store gross profit — used	$	69.5		$	71.1			(1.6	)		-2.3	%
Average gross profit per used vehicle retailed	$	1,972		$	2,206			(234	)		-10.6	%
Same store average gross profit per used vehicle retailed	$	1,988		$	2,208			(220	)		-10.0	%
Gross margin % — used		7.7	%		8.3	%		-0.6	%		-7.2	%
Same store gross margin % — used		7.7	%		8.3	%		-0.6	%		-7.2	%

Units

Retail unit sales of used vehicles increased 5,290 units, or 16.4%, from 2011 to 2012. The increase is due to a 2,742 unit, or 8.5%, increase in same store retail unit sales, coupled with a 2,548 unit increase from net dealership acquisitions. The same store increase was due primarily to unit sales increases in premium and volume foreign brand stores in the U.S.

Revenues

Used vehicle retail sales revenue increased $108.9 million, or 12.7%, from 2011 to 2012. The increase is due to a $63.2 million increase from net dealership acquisitions coupled with a $45.7 million, or 5.4%, increase in same store revenues. The same store revenue increase is due to the 8.5% increase in same store retail unit sales which increased revenue by $70.6 million, somewhat offset by a $773, or 2.9%, decrease in comparative average selling prices per unit, which decreased revenue by $24.9 million.

Gross Profit

Retail gross profit from used vehicle sales increased $2.9 million, or 4.1%, from 2011 to 2012. The increase is due to a $4.5 million increase from net dealership acquisitions, somewhat offset by a $1.6 million, or 2.3%, decrease in same store gross profit. The decrease in same store gross profit is due to the $220 or 10%, decrease in average gross profit per used vehicle retailed, which decreased retail gross profit by $7.1 million, somewhat offset by a 8.5% increase in used retail unit sales, which increased gross profit by $5.5 million.

Finance and Insurance Data

Dollars in millions, except per unit amounts					2012 vs. 2011
	2012		2011		Change			% Change
Finance and insurance revenue	$	82.7	$	69.0	$	13.7			19.9	%
Same store finance and insurance revenue	$	78.0	$	68.8	$	9.2			13.4	%
Finance and insurance revenue per unit	$	980	$	989	$	(9	)		-0.9	%
Same store finance and insurance revenue per unit	$	1,002	$	990	$	12			1.2	%

Finance and insurance revenue increased $13.7 million, or 19.9%, from 2011 to 2012. The increase is due to a $9.2 million, or 13.4%, increase in same store revenues during the period, coupled with a $4.5 million increase from net dealership acquisitions. The same store revenue increase is due to a 12% increase in same store retail unit sales, which increased revenue by $8.3 million, coupled with a $12, or 1.2%, increase in comparative average finance and insurance revenue per unit which increased revenue by $0.9 million.

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Service and Parts Data

Dollars in millions, except per unit amounts							2012 vs. 2011
	2012			2011			Change			% Change
Service and parts revenue	$	368.8		$	339.6			29.2			8.6	%
Same store service and parts revenue	$	340.7		$	338.7			2.0			0.6	%
Gross profit	$	216.0		$	194.6			21.4			11.0	%
Same store gross profit	$	200.1		$	194.1			6.0			3.1	%
Gross margin		58.6	%		57.3	%		1.3	%		2.3	%
Same store gross margin		58.7	%		57.3	%		1.4	%		2.4	%

Revenues

Service and parts revenue increased $29.2 million, or 8.6%, from 2011 to 2012. The increase is due to a $27.2 million increase from net dealership acquisitions, coupled with a $2.0 million, or 0.6%, increase in same store revenues during the period. The increase in same store revenue is due to a $3.0 million, or 1.2%, increase in customer pay revenue, and a $1.8 million, or 55.2%, increase in vehicle preparation revenue. These same store revenue increases were somewhat offset by a $2.2 million, or 3.3%, decrease in warranty revenue, and a $0.6 million, of 2.4%, decrease in body shop revenue.

Gross Profit

Service and parts gross profit increased $21.4 million, or 11%, from 2011 to 2012. The increase is due to a $15.4 million increase from net dealership acquisitions, coupled with a $6.0 million, or 3.1%, increase in same store gross profit during the period. The same store gross profit increase is due to a $2.0 million, or 0.6%, increase in same store revenues, which increased gross profit by $1.2 million, coupled with a 2.4% increase in gross margin, which increased gross profit by $4.8 million. The same store gross profit increase is composed of a $5.5 million, or 20.4%, increase in vehicle preparation gross profit, and a $2.7 million, or 2.2%, increase in customer pay gross profit. These same store gross profit increases were somewhat offset by a $2.0 million, or 5.6%, decrease in warranty gross profit, and a $0.2 million, or 1.3%, decrease in body shop gross profit.

Selling, General and Administrative

Selling, general and administrative expenses (“SG&A”) increased $35.2 million, or 9.4%, from $374.3 million to $409.5 million. The aggregate increase is due to a $27.1 million increase from net dealership acquisitions, coupled with an $8.1 million, or 2.2%, increase in same store SG&A. The increase in same store SG&A is due to a net increase in variable selling expenses, including increases in variable compensation, as a result of a 4.8% increase in same store retail gross profit versus the prior year. SG&A expenses decreased as a percentage of gross profit from 82.1% to 79.8%.

Floor Plan Interest Expense

Floor plan interest expense, including the impact of swap transactions, increased $3.1 million, or 44.1%, from $6.9 million to $10.0 million, due primarily to a $2.7 million, or 38.7%, increase in same store floor plan interest expense. The same store increase is due primarily to increases in applicable interest rates due to the impact of swap transactions, as well as increased amounts outstanding under floor plan arrangements. The same store increase is coupled with a $0.4 million increase from net dealership acquisitions.

Other Interest Expense

Other interest expense increased $1.1 million, or 10.8%, from $10.5 million to $11.6 million. The increase is due primarily to incremental borrowings made during the latter part of 2011 in the U.S. and the first quarter of 2012 in the U.K. to finance acquisitions.

Equity in Earnings of Affiliates

Equity in earnings of affiliates increased $0.3 million. The increase is due to an increase in earnings at Penske Truck Leasing offset by a decline in the results at our foreign automotive joint ventures.

Income Taxes

Income taxes increased $6.4 million, or 31%, from $20.5 million to $26.9 million. The increase from 2011 to 2012 is due primarily to an increase in our pre-tax income versus the prior year.

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Six Months Ended June 30, 2012 Compared to Six Months Ended June 30, 2011

New Vehicle Data

Dollars in millions, except per unit amounts							2012 vs. 2011
	2012			2011			Change			% Change
New retail unit sales		89,773			75,994			13,779			18.1	%
Same store new retail unit sales		81,994			75,337			6,657			8.8	%
New retail sales revenue	$	3,303.4		$	2,778.0			525.4			18.9	%
Same store new retail sales revenue	$	3,020.3		$	2,757.1			263.2			9.5	%
New retail sales revenue per unit	$	36,797		$	36,556			241			0.7	%
Same store new retail sales revenue per unit	$	36,836		$	36,597			239			0.7	%
Gross profit — new	$	270.6		$	228.4			42.2			18.5	%
Same store gross profit — new	$	245.9		$	226.4			19.5			8.6	%
Average gross profit per new vehicle retailed	$	3,015		$	3,005			10			0.3	%
Same store average gross profit per new vehicle retailed	$	2,999		$	3,005			(6	)		-0.2	%
Gross margin % — new		8.2	%		8.2	%		0.0	%		0.0	%
Same store gross margin % — new		8.1	%		8.2	%		-0.1	%		-1.2	%

Units

Retail unit sales of new vehicles increased 13,779 units, or 18.1%, from 2011 to 2012. The increase is due to a 7,122 unit increase from net dealership acquisitions, coupled with a 6,657 unit, or 8.8%, increase in same store retail unit sales during the period. The same store increase was due primarily to unit sales increases in our volume foreign brand stores in the U.S. and to a lesser extent unit sales increases at our premium brand stores in the U.S. and U.K.

Revenues

New vehicle retail sales revenue increased $525.4 million, or 18.9%, from 2011 to 2012. The increase is due to a $263.2 million, or 9.5%, increase in same store revenues, coupled with a $262.2 million increase from net dealership acquisitions. The same store revenue increase is due primarily to a $239, or 0.7%, increase in average selling prices per unit which increased revenue by $18.0 million, coupled with the 8.8% increase in retail unit sales, which increased revenue by $245.2 million.

Gross Profit

Retail gross profit from new vehicle sales increased $42.2 million, or 18.5%, from 2011 to 2012. The increase is due to a $22.7 million increase from net dealership acquisitions, coupled with a $19.5 million, or 8.6%, increase in same store gross profit. The same store increase is due primarily to a 8.8% increase in retail unit sales, which increased gross profit by $20.0 million, somewhat offset by a $6, or 0.2%, decrease in the average gross profit per new vehicle retailed, which decreased gross profit by $0.5 million.

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Used Vehicle Data

Dollars in millions, except per unit amounts							2012 vs. 2011
	2012			2011			Change			% Change
Used retail unit sales		75,848			62,441			13,407			21.5	%
Same store used retail unit sales		70,041			61,888			8,153			13.2	%
Used retail sales revenue	$	1,931.1		$	1,643.6			287.5			17.5	%
Same store used retail sales revenue	$	1,784.8		$	1,629.7			155.1			9.5	%
Used retail sales revenue per unit	$	25,461		$	26,323			(862	)		-3.3	%
Same store used retail sales revenue per unit	$	25,482		$	26,333			(851	)		-3.2	%
Gross profit — used	$	152.2		$	136.0			16.2			11.9	%
Same store gross profit — used	$	141.9		$	135.0			6.9			5.1	%
Average gross profit per used vehicle retailed	$	2,007		$	2,178			(171	)		-7.9	%
Same store average gross profit per used vehicle retailed	$	2,026		$	2,181			(155	)		-7.1	%
Gross margin % — used		7.9	%		8.3	%		-0.4	%		-4.8	%
Same store gross margin % — used		8.0	%		8.3	%		-0.3	%		(3.6	%)

Units

Retail unit sales of used vehicles increased 13,407 units, or 21.5%, from 2011 to 2012. The increase is due to an 8,153 unit, or 13.2%, increase in same store retail unit sales, coupled with a 5,254 unit increase from net dealership acquisitions. The same store increase was due primarily to unit sales increases in premium and volume foreign brand stores in the U.S.

Revenues

Used vehicle retail sales revenue increased $287.5 million, or 17.5%, from 2011 to 2012. The increase is due to a $155.1 million, or 9.5%, increase in same store revenues, coupled with a $132.4 million increase from net dealership acquisitions. The same store revenue increase is due to the 13.2% increase in same store retail unit sales which increased revenue by $207.8 million, somewhat offset by an $851, or 3.2%, decrease in comparative average selling prices per unit, which decreased revenue by $52.7 million.

Gross Profit

Retail gross profit from used vehicle sales increased $16.2 million, or 11.9%, from 2011 to 2012. The increase is due to a $9.3 million increase from net dealership acquisitions, coupled with a $6.9 million, or 5.1%, increase in same store gross profit. The increase in same store gross profit is due to the 13.2% increase in used retail unit sales, which increased gross profit by $16.5 million, somewhat offset by a $155, or 7.1%, decrease in average gross profit per used vehicle retailed, which decreased retail gross profit by $9.6 million.

Finance and Insurance Data

Dollars in millions, except per unit amounts					2012 vs. 2011
	2012		2011		Change		% Change
Finance and insurance revenue	$	162.5	$	135.3	$	27.2		20.1	%
Same store finance and insurance revenue	$	152.6	$	134.2	$	18.4		13.7	%
Finance and insurance revenue per unit	$	981	$	978	$	3		0.3	%
Same store finance and insurance revenue per unit	$	1,004	$	978	$	26		2.7	%

Finance and insurance revenue increased $27.2 million, or 20.1%, from 2011 to 2012. The increase is due to an $18.4 million, or 13.7%, increase in same store revenues during the period, coupled with an $8.8 million increase from net dealership acquisitions. The same store revenue increase is due to a 10.8% increase in total retail unit sales, which increased revenue by $14.9 million, coupled with a $26, or 2.7%, increase in comparative average finance and insurance revenue per unit which increased revenue by $3.5 million.

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Service and Parts Data

Dollars in millions, except per unit amounts							2012 vs. 2011
	2012			2011			Change			% Change
Service and parts revenue	$	737.1		$	679.7			57.4			8.4	%
Same store service and parts revenue	$	679.2		$	674.5			4.7			0.7	%
Gross profit	$	428.4		$	388.7			39.7			10.2	%
Same store gross profit	$	395.2		$	386.0			9.2			2.4	%
Gross margin		58.1	%		57.2	%		0.9	%		1.6	%
Same store gross margin		58.2	%		57.2	%		1.0	%		1.7	%

Revenues

Service and parts revenue increased $57.4 million, or 8.4%, from 2011 to 2012. The increase is due to a $52.7 million increase from net dealership acquisitions, coupled with a $4.7 million, or 0.7%, increase in same store revenues during the period. The increase in same store revenue is due to a $9.2 million, or 1.9%, increase in customer pay revenue, and a $2.6 million, or 36.9%, increase in vehicle preparation revenue. These same store revenue increases were somewhat offset by a $5.9 million, or 4.2%, decrease in warranty revenue, and a $1.2 million, or 2.7%, decrease in body shop revenue.

Gross Profit

Service and parts gross profit increased $39.7 million, or 10.2%, from 2011 to 2012. The increase is due to a $30.5 million increase from net dealership acquisitions, coupled with a $9.2 million, or 2.4%, increase in same store gross profit during the period. The same store gross profit increase is due to the $4.7 million, or 0.7%, increase in same store revenues, which increased gross profit by $2.8 million, coupled with a 1.7% increase in gross margin, which increased gross profit by $6.4 million. The same store gross profit increase is composed of a $9.1 million, or 17.0%, increase in vehicle preparation gross profit, and a $5.7 million, or 2.5%, increase in customer pay gross profit. These same store gross profit increases were somewhat offset by a $5.2 million, or 7.2%, decrease in warranty gross profit, and a $0.4 million, or 1.5%, decrease in body shop gross profit.

Selling, General and Administrative

Selling, general and administrative expenses (“SG&A”) increased $78.4 million, or 10.8%, from $728.4 million to $806.8 million. The aggregate increase is due to a $53.1 million increase from net dealership acquisitions, coupled with a $25.3 million, or 3.5%, increase in same store SG&A. The increase in same store SG&A is due to a net increase in variable selling expenses, including increases in variable compensation, as a result of a 6.1% increase in same store retail gross profit versus the prior year. SG&A expenses decreased as a percentage of gross profit from 81.5% to 79.2%.

Floor Plan Interest Expense

Floor plan interest expense, including the impact of swap transactions, increased $5.8 million, or 42.4%, from $13.8 million to $19.6 million, due primarily to a $5.1 million, or 37.2%, increase in same store floor plan interest expense. The same store increase is due primarily to the impact of swap transactions, as well as increased amounts outstanding under floor plan arrangements. The same store increase is coupled with a $0.7 million increase from net dealership acquisitions.

Other Interest Expense

Other interest expense increased $2.1 million, or 9.4%, from $21.7 million to $23.8 million. The increase is due primarily to incremental borrowings made during the latter part of 2011 and first six months of 2012 to finance acquisitions.

Equity in Earnings of Affiliates

Equity in earnings of affiliates increased $4.7 million, or 59.1%, from $7.9 million to $12.6 million. The increase is due to an increase in earnings at Penske Truck Leasing offset by a decline in the results at our foreign automotive joint ventures.

Income Taxes

Income taxes increased $17.7 million, or 49.1%, from $36.0 million to $53.7 million. The increase from 2011 to 2012 is due to an increase in our pre-tax income versus the prior year combined with an increase in the effective tax rate from 32.2% to 34.9%.

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Liquidity and Capital Resources

Our cash requirements are primarily for working capital, inventory financing, the acquisition of new businesses, the improvement and expansion of existing facilities, the purchase or construction of new facilities, debt service and repayments, dividends, and potentially repurchases of our outstanding securities under the program discussed below. Historically, these cash requirements have been met through cash flow from operations, borrowings under our credit agreements and floor plan arrangements, the issuance of debt securities, sale-leaseback transactions, mortgages, dividends and distributions from joint venture investments, or the issuance of equity securities.

We have historically expanded our retail automotive operations through organic growth and the acquisition of retail automotive dealerships. We believe that cash flow from operations, dividends and distributions from our joint venture investments and our existing capital resources, including the liquidity provided by our credit agreements and floor plan financing arrangements, will be sufficient to fund our operations and commitments for at least the next twelve months. In the event we pursue significant acquisitions, other expansion opportunities, significant repurchases of our outstanding securities; or refinance or repay existing debt, we may need to raise additional capital either through the public or private issuance of equity or debt securities or through additional borrowings, which sources of funds may not necessarily be available on terms acceptable to us, if at all. In addition, our liquidity could be negatively impacted in the event we fail to comply with the covenants under our various financing and operating agreements or in the event our floor plan financing is withdrawn.

As of June 30, 2012, we had $226.9 million and £84.3 million ($131.6 million) available for borrowing under our U.S. credit agreement and our U.K. credit agreement, respectively.

Securities Repurchases

From time to time, our Board of Directors has authorized securities repurchase programs pursuant to which we may, as market conditions warrant, purchase our outstanding common stock, debt or convertible debt on the open market, in privately negotiated transactions, via a tender offer, or through a pre-arranged trading plan. We have historically funded any such repurchases using cash flow from operations and borrowings under our U.S. credit facility. The decision to make repurchases will be based on factors such as the market price of the relevant security versus our view of its intrinsic value, the potential impact of such repurchases on our capital structure, and our consideration of any alternative uses of our capital, such as for strategic investments in our current businesses, in addition to any then-existing limits imposed by our finance agreements and securities trading policy.

During the second quarter of 2012, we acquired 55,631 shares of our common stock for $1,307, or an average of $23.49 per share, from employees in connection with vesting of employee restricted stock awards. During the six months ended June 30, 2012, we repurchased 350,000 shares of our outstanding common stock for $8,522, or an average of $24.35 per share, under a program approved by our Board of Directors. As of June 30, 2012, we have $98.3 million in authorization under the existing securities repurchase program.

Dividends

We paid the following cash dividends on our common stock in 2011 and 2012:

Per Share Dividends
2011
Second Quarter	$	0.07
Third Quarter		0.08
Fourth Quarter		0.09
2012
First Quarter	$	0.10
Second Quarter		0.11

We also have announced a cash dividend of $0.12 per share payable on September 4, 2012 to shareholders of record on August 10, 2012. Future quarterly or other cash dividends will depend upon a variety of factors considered relevant by our Board of Directors which may include our earnings, capital requirements, restrictions relating to any then-existing indebtedness, financial condition, and other factors.

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Inventory Financing

We finance substantially all of our new and a portion of our used vehicle inventories under revolving floor plan arrangements with various lenders, including a majority through captive finance companies associated with automotive manufacturers. In the U.S., the floor plan arrangements are due on demand; however, we have not historically been required to repay floor plan advances prior to the sale of the vehicles that have been financed. We typically make monthly interest payments on the amount financed. Outside of the U.S., substantially all of our floor plan arrangements are payable on demand or have an original maturity of 90 days or less, and we are generally required to repay floor plan advances at the earlier of the sale of the vehicles that have been financed or the stated maturity.

The floor plan agreements typically grant a security interest in substantially all of the assets of our dealership subsidiaries, and in the U.S. are guaranteed by us. Interest rates under the floor plan arrangements are variable and increase or decrease based on changes in the prime rate, defined LIBOR, Finance House Base Rate, or Euro Interbank Offered Rate. To date, we have not experienced any material limitation with respect to the amount or availability of financing from any institution providing us vehicle financing. We also receive non-refundable credits from certain of our vehicle manufacturers, which are treated as a reduction of cost of sales as vehicles are sold.

U.S. Credit Agreement

We are party to a credit agreement with Mercedes-Benz Financial Services USA LLC and Toyota Motor Credit Corporation, as amended (the “U.S. credit agreement”), which provides for up to $375 million in revolving loans for working capital, acquisitions, capital expenditures, investments and other general corporate purposes, a non-amortizing term loan with a balance of $127 million, and for an additional $10.0 million of availability for letters of credit, through September 2014. The revolving loans bear interest at a defined LIBOR plus 2.50%, subject to an incremental 1.00% for uncollateralized borrowings in excess of a defined borrowing base. The term loan, which bears interest at defined LIBOR plus 2.50%, may be prepaid at any time, but then may not be re-borrowed.

The U.S. credit agreement is fully and unconditionally guaranteed on a joint and several basis by our domestic subsidiaries and contains a number of significant covenants that, among other things, restrict our ability to dispose of assets, incur additional indebtedness, repay other indebtedness, pay dividends, create liens on assets, make investments or acquisitions and engage in mergers or consolidations. We are also required to comply with specified financial and other tests and ratios, each as defined in the U.S. credit agreement, including: a ratio of current assets to current liabilities, a fixed charge coverage ratio, a ratio of debt to stockholders’ equity and a ratio of debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”). A breach of these requirements would give rise to certain remedies under the agreement, the most severe of which is the termination of the agreement and acceleration of any amounts owed. As of June 30, 2012, we were in compliance with all covenants under the U.S. credit agreement, and we believe we will remain in compliance with such covenants for the next twelve months. In making such determination, we considered the current margin of compliance with the covenants and our expected future results of operations, working capital requirements, acquisitions, capital expenditures and investments. See “Forward Looking Statements.”

The U.S. credit agreement also contains typical events of default, including change of control, non-payment of obligations and cross-defaults to our other material indebtedness. Substantially all of our domestic assets are subject to security interests granted to lenders under the U.S. credit agreement. As of June 30, 2012, $127 million of term loans, $0.5 million of letters of credit and $114 million of revolver borrowings were outstanding under the U.S. credit agreement.

U.K. Credit Agreement

Our subsidiaries in the U.K. (the “U.K. subsidiaries”) are party to a £100 million revolving credit agreement with the Royal Bank of Scotland plc (RBS) and BMW Financial Services (GB) Limited, and an additional £10 million demand overdraft line of credit with RBS (collectively, the “U.K. credit agreement”) to be used for working capital, acquisitions, capital expenditures, investments and general corporate purposes through November 2015. The revolving loans bear interest between defined LIBOR plus 1.35% and defined LIBOR plus 3.0% and the demand overdraft line of credit bears interest at the Bank of England Base Rate plus 1.75%. As of June 30, 2012, outstanding loans under the U.K. credit agreement amounted to £27 million ($42.4 million).

The U.K. Credit Agreement is fully and unconditionally guaranteed on a joint and several basis by our U.K. subsidiaries, and contains a number of significant covenants that, among other things, restrict the ability of our U.K. subsidiaries to pay dividends, dispose of assets, incur additional indebtedness, repay other indebtedness, create liens on assets, make investments or acquisitions and engage in mergers or consolidations. In addition, our U.K. subsidiaries are required to comply with defined ratios and tests, including: a ratio of earnings before interest, taxes, amortization, and rental payments (“EBITAR”) to interest plus rental payments, a measurement of maximum capital expenditures, and a debt to EBITDA ratio. A breach of these requirements would give rise to certain remedies under the agreement, the most severe of which is the termination of the agreement and acceleration of any amounts owed. As of June 30, 2012, our U.K. subsidiaries were in compliance with all covenants under the U.K. credit agreement and we believe they will remain in compliance with such covenants for the next twelve months. In making such determination, we considered the current margin of compliance with the covenants and our expected future results of operations, working capital requirements, acquisitions, capital expenditures and investments in the U.K. See “Forward Looking Statements”.

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The U.K. credit agreement also contains typical events of default, including change of control and non-payment of obligations and cross-defaults to other material indebtedness of our U.K. subsidiaries. Substantially all of our U.K. subsidiaries’ assets are subject to security interests granted to lenders under the U.K. credit agreement.

In January 2012, our U.K. subsidiaries entered into a separate agreement with RBS, as agent for National Westminster Bank plc, providing for a £30 million term loan which was used for working capital and an acquisition. The term loan is repayable in £1.5 million quarterly installments through 2015 with a final payment of £7.5 million due December 31, 2015. The term loan bears interest between 2.675% and 4.325%, depending on the U.K. subsidiaries’ ratio of net borrowings to earnings before interest, taxes, depreciation and amortization (as defined). As of June 30, 2012, the amount outstanding under the U.K. term loan was £27 million ($42.4 million).

7.75% Senior Subordinated Notes

In December 2006, we issued $375.0 million aggregate principal amount of 7.75% senior subordinated notes due 2016 (the “7.75% Notes”). The 7.75% Notes are unsecured senior subordinated notes and are subordinate to all existing and future senior debt, including debt under our credit agreements, mortgages and floor plan indebtedness. The 7.75% Notes are guaranteed by substantially all of our wholly-owned domestic subsidiaries on an unsecured senior subordinated basis. Those guarantees are full and unconditional and joint and several. We can redeem all or some of the 7.75% Notes at our option at specified redemption prices (currently 103.875% of the principal amount of the notes). Upon certain sales of assets or specific kinds of changes of control, we are required to make an offer to purchase the 7.75% Notes. The 7.75% Notes also contain customary negative covenants and events of default. As of June 30, 2012, we were in compliance with all negative covenants and there were no events of default. We expect to remain in compliance during the next twelve months.

3.5% Senior Subordinated Convertible Notes

On May 25, 2012, we provided notice to holders of the Notes that we were exercising our right to redeem the Notes at a price of 100% of the principal amount outstanding plus accrued and unpaid interest to, but excluding June 25, 2012. In lieu of surrendering the notes for redemption, Note holders could elect to convert the Notes at any time prior to the close of business on June 21, 2012 based on a conversion rate of 42.7796 shares of our common stock per $1,000 principal amount of the Convertible Notes (which is equal to a conversion price of approximately $23.38 per share).

Upon conversion of the Convertible Notes, for each $1,000 Note, a holder was entitled to receive an amount in cash, equal to the lesser of (i) $1,000 or (ii) the conversion value, determined in the manner set forth in the indenture covering the Convertible Notes. To the extent the conversion value exceeded $1,000, we were required to also deliver, cash, common stock or a combination of cash and common stock with respect to the value in excess of $1,000.

Holders of $25.6 million outstanding principal amount of Convertible Notes elected to convert their Notes. We settled the principal and interest due on the remaining $37.8 million on June 25, 2012. In July, we paid the converting holders the conversion balance due of $24.9 million in cash. Following this payment, we had fulfilled all of our obligations under the Convertible Notes.

Mortgage Facilities

We are party to several mortgages, which bear interest at defined rates and require monthly principal and interest payments. These mortgage facilities also contain typical events of default, including non-payment of obligations, cross-defaults to our other material indebtedness, certain change of control events, and the loss or sale of certain franchises operated at the properties. Substantially all of the buildings and improvements on the properties financed pursuant to the mortgage facilities are subject to security interests granted to the lender. As of June 30, 2012, we owed $74.1 million of principal under our mortgage facilities.

Short-term Borrowings

We have three principal sources of short-term borrowing: the revolving portion of the U.S. credit agreement, the revolving portion of the U.K. credit agreement, and the floor plan agreements in place that we utilize to finance our vehicle inventories. All of the cash generated in our operations is initially used to pay down our floor plan indebtedness. Over time, we are able to access availability under the floor plan agreements to fund our cash needs, including payments made relating to our higher interest rate revolving credit agreements.

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During the six months ended June 30, 2012, outstanding revolving commitments varied between $102.5 and $188.5 million under the U.S. credit agreement and between £2.0 million and £92.0 million under the U.K. credit agreement’s revolving credit line (excluding the overdraft facility), and the amounts outstanding under our floor plan agreements varied based on the timing of the receipt and expenditure of cash in our operations, driven principally by the levels of our vehicle inventories.

Interest Rate Swaps

We periodically use interest rate swaps to manage interest rate risk associated with our variable rate floor plan debt. We are party to interest rate swap agreements through December 2014 pursuant to which the LIBOR portion of $300.0 million of our floating rate floor plan debt is fixed at 2.135% and $100.0 million of our floating rate floor plan debt is fixed at1.55%. We may terminate these agreements at any time, subject to the settlement of the then current fair value of the swap arrangements. During the three and six months ended June 30, 2012, the swaps increased the weighted average interest rate on our floor plan borrowing by 39 and 40 basis points, respectively.

PTL Dividends

We own a 9.0% limited partnership interest in Penske Truck Leasing. During the six months ended June 30, 2012 and 2011, respectively, we received $12.5 million and $7.8 million of pro rata cash distributions relating to this investment. We currently expect to continue to receive future distributions from PTL quarterly, subject to its financial performance.

Operating Leases

We have historically structured our operations so as to minimize our ownership of real property. As a result, we lease or sublease substantially all of our facilities. These leases are generally for a period between five and 20 years, and are typically structured to include renewal options at our election. Pursuant to the leases for some of our larger facilities, we are required to comply with specified financial ratios, including a “rent coverage” ratio and a debt to EBITDA ratio, each as defined. For these leases, non-compliance with the ratios may require us to post collateral in the form of a letter of credit. A breach of our other lease covenants give rise to certain remedies by the landlord, the most severe of which include the termination of the applicable lease and acceleration of the total rent payments due under the lease. As of June 30, 2012, we were in compliance with all covenants under these leases, and we believe we will remain in compliance with such covenants for the next twelve months.

Sale/Leaseback Arrangements

We have in the past and may in the future enter into sale-leaseback transactions to finance certain property acquisitions and capital expenditures, pursuant to which we sell property and/or leasehold improvements to third parties and agree to lease those assets back for a certain period of time. Such sales generate proceeds which vary from period to period.

Off-Balance Sheet Arrangements

We have sold a number of dealerships to third parties and, as a condition to certain of those sales, remain liable for the lease payments relating to the properties on which those businesses operate in the event of non-payment by the buyer. We are also party to lease agreements on properties that we no longer use in our retail operations that we have sublet to third parties. We rely on subtenants to pay the rent and maintain the property at these locations. In the event a subtenant does not perform as expected, we may not be able to recover amounts owed to us and we could be required to fulfill these obligations. We believe we have made appropriate reserves relating to these locations.

We hold a 9.0% limited partnership interest in PTL. In April and May 2012, PTL has refinanced a significant amount of its indebtedness. As part of that refinancing, we and the other PTL partners created a new company (“Holdings”), which, together with General Electric Capital Corporation (“GECC”), co-issued $700 million of 3.8% senior unsecured notes due 2019 to certain investors through an offering pursuant to Rule 144A of the Securities Act of 1933, as amended (the “Holdings Bonds”). A wholly-owned subsidiary of Holdings contributed $700 million derived from the net proceeds from the offering of the Holdings Bonds and a portion of its cash on hand to PTL in exchange for a 21.5% limited partner interest in PTL. PTL used the $700 million of funds to reduce its outstanding debt owed to GECC. GECC agreed to be a co-obligor of the Holdings Bonds in order to achieve lower interest rates on the Holdings Bonds.

Additional capital contributions from the members may be required to fund interest and principal payments on the Holdings Bonds. In addition, we have agreed to indemnify GECC for 9.0% of any principal or interest that GECC is required to pay as co-obligor, and pay GECC an annual fee of approximately $0.95 million for acting as co-obligor. The maximum amount of our potential obligations to GECC under this agreement are 9% of the required principal repayment due in 2019 (which is expected to be $63.1 million) and 9% of interest payments under the Holdings Bonds, plus fees and default interest, if any. Although we do not currently expect to make material payments to GECC under this agreement, this outcome cannot be predicted with certainty.

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Cash Flows

Cash and cash equivalents increased by $8.5 million during the six months ended June 30, 2012 and decreased by $12.5 million during the six months ended June 30, 2011. The major components of these changes are discussed below.

Cash Flows from Continuing Operating Activities

Cash provided by continuing operating activities was $204.2 million and $41.7 million during the six months ended June 30, 2012 and 2011, respectively. Cash flows from continuing operating activities includes net income, as adjusted for non-cash items and the effects of changes in working capital.

We finance substantially all of our new and a portion of our used vehicle inventories under revolving floor plan notes payable with various lenders. We retain the right to select which, if any, financing source to utilize in connection with the procurement of vehicle inventories. Many vehicle manufacturers provide vehicle financing for the dealers representing their brands; however, it is not a requirement that we utilize this financing. Historically, our floor plan finance source has been based on aggregate pricing considerations.

In accordance with generally accepted accounting principles relating to the statement of cash flows, we report all cash flows arising in connection with floor plan notes payable with the manufacturer of a particular new vehicle as an operating activity in our statement of cash flows, and all cash flows arising in connection with floor plan notes payable to a party other than the manufacturer of a particular new vehicle and all floor plan notes payable relating to pre-owned vehicles as a financing activity in our statement of cash flows. Currently, the majority of our non-trade vehicle financing is with other manufacturer captive lenders. To date, we have not experienced any material limitation with respect to the amount or availability of financing from any institution providing us vehicle financing.

We believe that changes in aggregate floor plan liabilities are typically linked to changes in vehicle inventory and, therefore, are an integral part of understanding changes in our working capital and operating cash flow. As a result, we prepare the following reconciliation to highlight our operating cash flows with all changes in vehicle floor plan being classified as an operating activity for informational purposes:

	Six Months Ended June 30,
Dollars in millions	2012		2011
Net cash from continuing operating activities as reported	$	204.2	$	41.7
Floor plan notes payable — non-trade as reported		32.8		70.1
Net cash from continuing operating activities including all floor plan notes payable	$	237.0	$	111.8

Cash Flows from Continuing Investing Activities

Cash used in continuing investing activities was $172.3 million and $62.6 million during the six months ended June 30, 2012 and 2011, respectively. Cash flows from continuing investing activities consist primarily of cash used for capital expenditures and net expenditures for acquisitions and other investments. Capital expenditures were $57.1 million and $51.4 million during the six months ended June 30, 2012 and 2011, respectively. Capital expenditures relate primarily to improvements to our existing dealership facilities and the construction of new facilities. During the six months ended June 30, 2012, approximately $12 million of the capital expenditures was used to repurchase a dealership facility which was previously leased. We do not have material commitments related to our planned or ongoing capital projects. We currently expect to finance our capital expenditures with operating cash flows or borrowings under our U.S. or U.K. credit facilities. Cash used in acquisitions and other investments, net of cash acquired, was $111.5 million and $14.0 million during the six months ended June 30, 2012 and 2011, respectively, and included cash used to repay sellers floor plan liabilities in such business acquisitions of $37.8 million and $5.9 million, respectively. Additionally, cash used in other investing activities during the six months ended June 30, 2012 was $3.7 million. Cash provided by other investing activities during the six months ended June 30, 2011 was $2.9 million.

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Cash Flows from Continuing Financing Activities

Cash used in continuing financing activities was $40.2 million and $19.8 million during the six months ended June 30, 2012 and 2011, respectively. Cash flows from continuing financing activities include net borrowings or repayments of long-term debt, repurchases of securities, net borrowings or repayments of floor plan notes payable non-trade, proceeds from the issuance of common stock and the exercise of stock options, and dividends. We had net repayments of long-term debt of $6.4 million during the six months ended June 30, 2012, including net repayments under revolving credit facilities. We had net borrowings of long-term debt of $13.6 million during the six months ended June 30, 2011, including net borrowings under revolving credit facilities. We had net borrowings of floor plan notes payable non-trade of $32.8 million and $70.1 million during the six months ended June 30, 2012 and 2011, respectively. During the six months ended June 30, 2012, we acquired 405,631 shares of common stock for $9.8 million and paid cash dividends to our stockholders of $18.9 million. During the six months ended June 30, 2011, we acquired 618,209 shares of common stock for $12.4 million, and paid cash dividends to our stockholders of $6.5 million.

Cash Flows from Discontinued Operations

Cash flows relating to discontinued operations are not currently considered, nor are they expected to be, material to our liquidity or our capital resources. Management does not believe that the net impact of upcoming cash transactions relating to discontinued operations will be material.

Related Party Transactions

Stockholders Agreement

Several of our directors and officers are affiliated with Penske Corporation or related entities. Roger S. Penske, our Chairman of the Board and Chief Executive Officer, is also Chairman of the Board and Chief Executive Officer of Penske Corporation, and through entities affiliated with Penske Corporation, our largest stockholder owning approximately 35% of our outstanding common stock. Mitsui & Co., Ltd. and Mitsui & Co. (USA), Inc. (collectively, “Mitsui”) own approximately 17% of our outstanding common stock. Mitsui, Penske Corporation and certain other affiliates of Penske Corporation are parties to a stockholders agreement pursuant to which the Penske affiliated companies agreed to vote their shares for one director who is a representative of Mitsui. In turn, Mitsui agreed to vote their shares for up to fourteen directors voted for by the Penske affiliated companies. This agreement terminates in March 2014, upon the mutual consent of the parties, or when either party no longer owns any of our common stock.

Other Related Party Interests and Transactions

Roger S. Penske is also a managing member of Transportation Resource Partners, an organization that invests in transportation-related industries. Richard J. Peters, one of our directors, is a managing director of Transportation Resource Partners and is a director of Penske Corporation. Robert H. Kurnick, Jr., our President and a director, is also the President and a director of Penske Corporation. Yoshimi Namba, one of our directors and officers, is also an employee of Mitsui & Co.

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.

As discussed above, we are a 9.0% limited partner of PTL, a leading global transportation services provider. The general partner of PTL is Penske Truck Leasing Corporation, a wholly-owned subsidiary of Penske Corporation, which together with other wholly-owned subsidiaries of Penske Corporation, owns 41.1% of PTL. The remaining 49.9% of PTL is owned by General Electric Capital Corporation. Among other things, the partnership agreement provides us with specified partner distribution and governance rights and restricts our ability to transfer our interests.

In the second quarter of 2012, we acquired a 7% interest in NPA Holdco, LLC, an auctioneer of powersport vehicles for $3 million. During the second quarter of 2012, Transportation Resource Partners acquired a controlling interest in this company on the same financial terms as our investment.

We have also entered into other joint ventures with certain related parties as more fully discussed below.

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Joint Venture Relationships

We are party to a number of joint ventures pursuant to which we own and operate automotive dealerships together with other investors. We may provide these dealerships with working capital and other debt financing at costs that are based on our incremental borrowing rate. As of June 30, 2012, our automotive retail joint venture relationships included:

Location	Dealerships	Ownership Interest
Fairfield, Connecticut	Audi, Mercedes-Benz, Porsche, smart		84.95	%(A) (B)
Las Vegas, Nevada	Ferrari, Maserati		50.00	%(C)
Frankfurt, Germany	Lexus, Toyota		50.00	%(C)
Aachen, Germany	Audi, Lexus, Skoda, Toyota, Volkswagen, Citroën		50.00	%(C)
Monza, Italy	BMW, Mini		70.00	%(B)

(A) An entity controlled by one of our directors, Lucio A. Noto (the “Investor”), owns a 15.05% interest in this joint venture which entitles the Investor to 20% of the joint venture’s operating profits. In addition, the Investor has an option to purchase up to a 20% interest in the joint venture for specified amounts.

(B) Entity is consolidated in our financial statements.

(C) Entity is accounted for using the equity method of accounting.

Cyclicality

Unit sales of motor vehicles, particularly new vehicles, have been cyclical historically, fluctuating with general economic cycles. During economic downturns, the automotive retailing industry tends to experience periods of decline and recession similar to those experienced by the general economy. We believe that the industry is influenced by general economic conditions and particularly by consumer confidence, the level of personal discretionary spending, fuel prices, interest rates and credit availability.

Seasonality

Our business is modestly seasonal overall. Our U.S. operations generally experience higher volumes of vehicle sales in the second and third quarters of each year due in part to consumer buying trends and the introduction of new vehicle models. Also, vehicle demand, and to a lesser extent demand for service and parts, is generally lower during the winter months than in other seasons, particularly in regions of the U.S. where dealerships may be subject to severe winters. Our U.K. operations generally experience higher volumes of vehicle sales in the first and third quarters of each year, due primarily to vehicle registration practices in the U.K.

Effects of Inflation

We believe that inflation rates over the last few years have not had a significant impact on revenues or profitability. We do not expect inflation to have any near-term material effects on the sale of our products and services; however, we cannot be sure there will be no such effect in the future. We finance substantially all of our inventory through various revolving floor plan arrangements with interest rates that vary based on various benchmarks. Such rates have historically increased during periods of increasing inflation.

Forward Looking Statements

This quarterly report on Form 10-Q contains “forward-looking statements” which generally can be identified by the use of terms such as “may,” “will,” “should,” “expect,” “anticipate,” “believe,” “intend,” “plan,” “estimate,” “predict,” “potential,” “forecast,” “continue” or variations of such terms, or the use of these terms in the negative. Forward-looking statements include statements regarding our current plans, forecasts, estimates, beliefs or expectations, including, without limitation, statements with respect to:

• our future financial and operating performance;

• future acquisitions and dispositions;

• future potential capital expenditures and securities repurchases;

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• our ability to realize cost savings and synergies;

• our ability to respond to economic cycles;

• trends in the automotive retail industry and in the general economy in the various countries in which we operate;

• our ability to access the remaining availability under our credit agreements;

• our liquidity;

• performance of joint ventures, including PTL;

• future foreign exchange rates;

• the outcome of various legal proceedings;

• trends affecting our future financial condition or results of operations; and

• our business strategy.

Forward-looking statements involve known and unknown risks and uncertainties and are not assurances of future performance. Actual results may differ materially from anticipated results due to a variety of factors, including the factors identified in our 2011 annual report on Form 10-K filed February 24, 2012. Important factors that could cause actual results to differ materially from our expectations include the following:

• our business and the automotive retail industry in general are susceptible to adverse economic conditions, including changes in interest rates, foreign exchange rates, consumer demand, consumer confidence, fuel prices, unemployment rates and credit availability;

• the number of new and used vehicles sold in our markets;

• automobile manufacturers exercise significant control over our operations, and we depend on them and continuation of our franchise agreements in order to operate our business;

• we depend on the success, popularity and availability of the brands we sell, and adverse conditions affecting one or more automobile manufacturers, including the adverse impact on the vehicle and parts supply chain due to natural disasters or other disruptions that interrupt the supply of vehicles and parts to us, may negatively impact our revenues and profitability;

• a restructuring of any significant automotive manufacturers or automotive suppliers;

• our dealership operations may be affected by severe weather or other periodic business interruptions;

• we may not be able to satisfy our capital requirements for acquisitions, dealership renovation projects, financing the purchase of our inventory, or refinancing of our debt when it becomes due;

• our level of indebtedness may limit our ability to obtain financing generally and may require that a significant portion of our cash flow be used for debt service;

• non-compliance with the financial ratios and other covenants under our credit agreements and operating leases;

• our operations outside of the U.S. subject our profitability to fluctuations relating to changes in foreign currency valuations;

• import product restrictions and foreign trade risks that may impair our ability to sell foreign vehicles profitably;

• with respect to PTL, changes in the financial health of its customers, labor strikes or work stoppages by its employees, a reduction in PTL’s asset utilization rates and industry competition which could impact distributions to us;

• we are dependent on continued availability of our information technology systems;

• if we lose key personnel, especially our Chief Executive Officer, or are unable to attract additional qualified personnel;

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• new or enhanced regulations relating to automobile dealerships;

• changes in tax, financial or regulatory rules or requirements;

• we are subject to numerous legal and administrative proceedings which, if the outcomes are adverse to us, could have a material adverse effect on our business;

• if state dealer laws in the U.S. are repealed or weakened, our automotive dealerships may be subject to increased competition and may be more susceptible to termination, non-renewal or renegotiation of their franchise agreements; and

• some of our directors and officers may have conflicts of interest with respect to certain related party transactions and other business interests.

In addition:

• the price of our common stock is subject to substantial fluctuation, which may be unrelated to our performance; and

• shares eligible for future sale, or issuable under the terms of our convertible notes, may cause the market price of our common stock to drop significantly, even if our business is doing well.

We urge you to carefully consider these risk factors in evaluating all forward-looking statements regarding our business. Readers of this report are cautioned not to place undue reliance on the forward-looking statements contained in this report. All forward-looking statements attributable to us are qualified in their entirety by this cautionary statement. Except to the extent required by federal securities laws and the Securities and Exchange Commission’s rules and regulations, we have no intention or obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rates. We are exposed to market risk from changes in interest rates on a significant portion of our debt. Outstanding revolving balances under our credit agreements bear interest at variable rates based on a margin over defined LIBOR or the Bank of England Base Rate. Based on the amount outstanding under these facilities as of June 30, 2012, a 100 basis point change in interest rates would result in an approximate $3.0 million change to our annual other interest expense. Similarly, amounts outstanding under floor plan financing arrangements bear interest at a variable rate based on a margin over the prime rate, defined LIBOR, the Finance House Base Rate, or the Euro Interbank Offered Rate. In 2012, we are party to swap agreements pursuant to which a notional $400.0 million of our floating rate floor plan debt is exchanged for fixed rate debt through December 2014. Based on an average of the aggregate amounts outstanding under our floor plan financing arrangements subject to variable interest payments during the trailing twelve months ended June 30, 2012, considering the swap agreements, a 100 basis point change in interest rates would result in an approximate $14.4 million change to our annual floor plan interest expense.

We evaluate our exposure to interest rate fluctuations and follow established policies and procedures to implement strategies designed to manage the amount of variable rate indebtedness outstanding at any point in time in an effort to mitigate the effect of interest rate fluctuations on our earnings and cash flows. These policies include:

• the maintenance of our overall debt portfolio with targeted fixed and variable rate components;

• the use of authorized derivative instruments;

• the prohibition of using derivatives for trading or other speculative purposes; and

• the prohibition of highly leveraged derivatives or derivatives which we are unable to reliably value, or for which we are unable to obtain a market quotation.

Interest rate fluctuations affect the fair market value of our fixed rate debt, including our swaps, mortgages, the 7.75% Notes, and certain seller financed promissory notes, but, with respect to such fixed rate debt instruments, do not impact our earnings or cash flows.

Foreign Currency Exchange Rates. As of June 30, 2012, we had dealership operations in the U.K., Germany and Italy. In each of these markets, the local currency is the functional currency. Due to our intent to remain permanently invested in these foreign markets, we do not hedge against foreign currency fluctuations. In the event we change our intent with respect to the investment in any of our international operations, we would expect to implement strategies designed to manage those risks in an effort to mitigate the effect of foreign currency fluctuations on our earnings and cash flows. A ten percent change in average exchange rates versus the U.S. Dollar would have resulted in an approximate $251.1 million change to our revenues for the six months ended June 30, 2012.

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In common with other automotive retailers, we purchase certain of our new vehicle and parts inventories from foreign manufacturers. Although we purchase the majority of our inventories in the local functional currency, our business is subject to certain risks, including, but not limited to, differing economic conditions, changes in political climate, differing tax structures, other regulations and restrictions, and foreign exchange rate volatility which may influence such manufacturers’ ability to provide their products at competitive prices in the local jurisdictions. Our future results could be materially and adversely impacted by changes in these or other factors.

Item 4. Controls and Procedures

Under the supervision and with the participation of our management, including the principal executive and financial officers, we conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this report. Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports we file under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our principal executive and financial officers, to allow timely discussions regarding required disclosure.

Based upon this evaluation, the Company’s principal executive and financial officers concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report. In addition, we maintain internal controls designed to provide us with the information required for accounting and financial reporting purposes. There were no changes in our internal control over financial reporting that occurred during the most recent quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

We are involved in litigation which may relate to claims brought by governmental authorities, customers, vendors, or employees, including class action claims and purported class action claims. We are not a party to any legal proceedings, including class action lawsuits, that individually or in the aggregate, are reasonably expected to have a material adverse effect on us. However, the results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material adverse effect.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In February 2010, our Board of Directors authorized the repurchase of up to $150.0 million of our outstanding common stock, debt or convertible debt on the open market, in privately negotiated transactions, via a tender offer, or through a pre-arranged trading plan. The program has an indefinite duration. During the second quarter of 2012, we did not repurchase any common stock under this program. As of June 30, 2012, our remaining authorization under the program was $98.3 million.

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During the second quarter of 2012, we acquired 55,631 shares of our common stock for $1.3 million from employees in connection with vesting of employee restricted stock awards.

Period	Total Number of Shares  Purchased		Average Price Paid per Share		Total Number of Shares  Purchased as Part of Publicly Announced Plans or Programs
April 1 to April 30, 2012		—		—		—
May 1 to May 31, 2012		—		—		—
June 1 to June 30, 2012		55,631	$	23.49		—
		55,631	$	23.49		—

Item 6. Exhibits

10.1	Amended and Restated Rights Agreement dated June 4, 2012 by and between Penske Automotive Group, Inc. and Penske Truck Leasing Corporation.
12	Computation of Ratio of Earnings to Fixed Charges
31.1	Rule 13(a)-14(a)/15(d)-14(a) Certification.
31.2	Rule 13(a)-14(a)/15(d)-14(a) Certification.
32	Section 1350 Certification.
101	The following materials from Penske Automotive Group’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Condensed Balance Sheets as of June 30, 2012 and December 31, 2011, (ii) the Consolidated Condensed Statements of Income for the three and six months ended June 30, 2012 and 2011, (iii) the Consolidated Condensed Statements of Cash Flows for the six months ended June 30, 2012 and 2011, (iv) the Consolidated Condensed Statement of Equity for the six months ended June 30, 2012, and (v) the Notes to Consolidated Condensed Financial Statements.*

* Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

** Compensatory plan or contract

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PENSKE AUTOMOTIVE GROUP, INC.
	By:	/s/ Roger S. Penske
		Roger S. Penske
Date: August 3, 2012		Chief Executive Officer

	By:	/s/ David K. Jones
		David K. Jones
Date: August 3, 2012		Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description
10.1	Amended and Restated Rights Agreement dated June 4, 2012 by and between Penske Automotive Group, Inc. and Penske Truck Leasing Corporation.
12	Computation of Ratio of Earnings to Fixed Charges
31.1	Rule 13(a)-14(a)/15(d)-14(a) Certification.
31.2	Rule 13(a)-14(a)/15(d)-14(a) Certification.
32	Section 1350 Certification.
101	The following materials from Penske Automotive Group’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Condensed Balance Sheets as of June 30, 2012 and December 31, 2011, (ii) the Consolidated Condensed Statements of Income for the three and six months ended June 30, 2012 and 2011, (iii) the Consolidated Condensed Statements of Cash Flows for the six months ended June 30, 2012 and 2011, (iv) the Consolidated Condensed Statement of Equity for the six months ended June 30, 2012, and (v) the Notes to Consolidated Condensed Financial Statements.*

* Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

** Compensatory plan or contract

EX-10.1

EXHIBIT 10.1

AMENDED AND RESTATED RIGHTS AGREEMENT

This AMENDED AND RESTATED RIGHTS AGREEMENT (the “Agreement”) dated as of June 4, 2012 is by and between Penske Automotive Group, Inc., a Delaware corporation (“PAG”) and Penske Truck Leasing Corporation, a Delaware corporation (“PTLC”). Capitalized terms used but not otherwise defined herein shall have the respective meanings set forth in the Partnership Agreement.

RECITALS

WHEREAS, PTLC, PTLC’s former wholly-owned subsidiaries, PTLC Holdings Co., LLC, a Delaware limited liability company (“PTLC-LLC”) and PTLC2 Holdings Co., LLC, a Delaware limited liability Company (“PTLC2-LLC”), and PAG are parties to the Rights Agreement dated as of June 26, 2008 (the “Rights Agreement”);

WHEREAS, PTLC-LLC and PTLC2-LLC were merged into PTLC with PTLC as the surviving entity;

WHEREAS, PAG and PTLC are partners under the Fourth Amended and Restated Agreement of Limited Partnership of Penske Truck Leasing Co., L.P. dated April 30, 2012 (the “New Partnership Agreement”) which amended and restated in its entirety the Third Amended and Restated Agreement of Limited Partnership of Penske Truck Leasing Co., L.P. dated March 26, 2009 which, in turn, amended and restated in its entirety that Amended and Restated Agreement of Limited Partnership of Penske Truck Leasing Co., L.P. dated July 18, 1988, as amended by a series of amendments and restatements.

WHEREAS, PAG and PTLC are members under the Amended and Restated Limited Liability Agreement of LJ VP Holdings LLC dated April 30, 2012 (the “LLC Agreement”).

WHEREAS, PTLC and PAG desire to amend and restate the Rights Agreement to reflect the existence of the New Partnership Agreement and the LLC Agreement and to conform paragraph cross-references to the text of the New Partnership Agreement.

NOW, THEREFORE, in consideration of the mutual promises and obligations hereinafter set forth and in the other agreements executed between the parties on April 30, 2012, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

ARTICLE I RIGHTS

Section 1.1 Notice Right. PAG, on the one hand, and PTLC, on the other hand, hereby agree that in the event either of them receives any Offers or written notices under Article 9 of the New Partnership Agreement or under Article 9 of the LLC Agreement that each will promptly forward a copy of the related correspondence to the other.

Section 1.2 Additional Rights. Neither PAG nor PTLC shall exercise any of its rights in Sections 9.3 and 9.4 of the New Partnership Agreement or the corresponding sections of the LLC Agreement without providing the other with a reasonable period of time under the circumstances to consider the necessary action and respond accordingly. Specifically, (1) PTLC shall not commence any Offer under Sections 9.3(c)(I) or 9.3(c)(II) or the corresponding sections of the LLC Agreement or accept an offer from a third party to acquire such party’s Partnership Interest without first notifying PAG of the proposed Transfer opportunity and providing PAG with a pro rata opportunity to join in such Transfer under the terms offered, (2) PAG shall not commence any Offer under Sections 9.3(c)(I), 9.3(c)(II), 9.3(d) or 9.3(e) or the corresponding section of the LLC Agreement or accept an offer from a third party to acquire PAG’s Partnership Interest or Member Interest without first notifying PTLC of the proposed Transfer opportunity and providing PTLC with a right of first refusal of all or a portion of the proposed Transfer under the terms proposed, (3) neither party shall accept or decline any Offer under Sections 9.3 (c)(I), 9.3(c)(II), 9.3(d) or 9.3(e) of the New Partnership Agreement or the corresponding section of the LLC Agreement without first consulting with the other party and assuring in any response, such other party’s response is conveyed in accordance with their instruction on a pro rata basis, and (4) neither party shall exercise any right under Section 9.4(b) of the New Partnership Agreement or Section 9.4(b) of the LLC Agreement without first consulting with the other party and assuring in any response, such other party’s response is conveyed in accordance with their instruction.

ARTICLE II TERMINATION

Section 2.1 Termination. This Agreement may be terminated at any time by mutual written consent of the parties and shall terminate at such time as either PAG or PTLC have no further limited or general partnership ownership interest under the Partnership Agreement and further member interest under the LLC Agreement.

ARTICLE III MISCELLANEOUS

Section 3.1 Amendments and Waivers. This Agreement may be amended, modified, supplemented or waived only upon the written agreement of the parties to the Agreement at that time.

Section 3.2 Successors and Assign. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and the personal representatives and assigns of the parties hereto, whether so expressed or not.

Section 3.3 Entire Agreement. This Agreement (with the documents referred to herein or delivered pursuant hereto and together with the Agreement) embodies the entire agreement and understanding between the parties hereto and supersedes all prior agreements and understandings relating to the subject matter hereof.

Section 3.4 Governing Law. This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Michigan without giving effect to the conflicts of law principles thereof which might result in the application of the laws or any other jurisdiction.

Section 3.5 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. All signatures need not appear on any one counterpart.

Section 3.6 Severability. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction.

Section 3.7 Specific Performance. The parties hereto acknowledge that there would be no adequate remedy at law if any party fails to perform any of its obligations hereunder, and accordingly agree that each party, in addition to any other remedy to which it may be entitled at law or in equity, shall be entitled to injunctive relief, including specific performance, to enforce such obligations without the posting of any bond, and, if any action should be brought in equity to enforce any of the provisions of this Agreement, none of the parties hereto shall raise the defense that there is an adequate remedy at law.

Section 3.8 Further Assurances. Each party hereto shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments, and documents as any other party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first above written.

PENSKE TRUCK LEASING CORPORATION		PENSKE AUTOMOTIVE GROUP, INC.
By:	/s/ Walter P. Czarnecki	By:	/s/ David K. Jones
Name:	Walter P. Czarnecki	Name:	David K. Jones
Title:	Exec. V.P.	Title:	EVP & CFO

EX-12

Exhibit 12

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

	Three Months Ended						Six Months Ended
	June 30,						June 30,									Year Ended December 31,
	2012			2011			2012			2011			2011			2010			2009			2008			2007
Income from continuing operations before undistributed earnings of equity method investments, amortization of capitalized interest, and taxes	$	76.9			60.2			154.0			112.0			247.5			187.1			122.2			(557.1	)		176.4
Less undistributed earnings of equity method investments	$	(8.2	)		(7.9	)		(12.6	)		(7.9	)		(25.5	)		(20.6	)		(13.8	)		(16.5	)		(4.1	)
Plus distributed earnings of equity method investments	$	2.1			0.3			13.0			8.5			9.2			9.9			21.3			3.5			6.2
Plus amortization of capitalized interest	$	0.2			0.2			0.4			0.4			0.8			0.8			0.8			0.8			0.6
	$	71.0			52.8			154.8			113.0			232.0			177.2			130.5			(569.3	)		179.1
Plus:
Fixed charges:
Other interest expense (includes amortization of deferred financing costs)	$	11.6			10.5			23.8			21.7			44.6			48.9			55.1			54.3			55.2
Debt discount amortization	$	—			—			—			1.7			1.7			8.6			13.0			14.0			13.0
Floor plan interest expense	$	10.0			6.9			19.6			13.8			27.8			33.3			33.9			61.3			69.9
Capitalized interest	$	0.2			0.1			0.4			0.2			0.7			0.5			0.9			4.8			5.5
Interest factor in rental expense	$	14.6			13.9			29.1			27.8			55.9			53.4			51.7			50.6			47.8
Total fixed charges	$	36.4			31.4			72.9			65.2			130.7			144.7			154.6			185.0			191.4
Less:
Capitalized interest	$	0.2			0.1			0.4			0.2			0.7			0.5			0.9			4.8			5.5
Earnings	$	107.2			84.1			227.3			178.0			362.0			321.4			284.2			(389.1	)		365.0
Ratio of earnings to fixed charges (a)		2.9			2.7			3.1			2.7			2.8			2.2			1.8			(2.1	)		1.9

(a) In the year ended December 31, 2008, earnings were insufficient to cover fixed charges by $534.2 million due to a non-cash impairment charge of $643.5 million.

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Roger S. Penske, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Penske Automotive Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Roger S. Penske

Roger S. Penske

Chief Executive Officer

August 3, 2012

EX-31.2

Exhibit 31.2

CERTIFICATION

I, David K. Jones, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Penske Automotive Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ David K. Jones

David K. Jones

Chief Financial Officer

August 3, 2012

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Penske Automotive Group, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Roger S. Penske and David K. Jones, Principal Executive Officer and Principal Financial Officer, respectively, of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ Roger S. Penske
	Roger S. Penske
	Chief Executive Officer
August 3, 2012
	/s/ David K. Jones
	David K. Jones
	Chief Financial Officer
August 3, 2012

A signed original of this written statement required by Section 906 has been provided to Penske Automotive Group, Inc. and will be retained by Penske Automotive Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Summary of the changes in the carrying amount of goodwill and franchise value
Goodwill, Beginning Balance	$ 903,721
Goodwill, additions	33,854
Goodwill, foreign currency translation	3,021
Goodwill, Ending Balance	940,596
Franchise value, Beginning Balance	228,460
Franchise value, Additions	23,426
Franchise value, foreign currency translation	927
Franchise value, Ending Balance	$ 252,813

XML

Segment Information (Details Textual)	6 Months Ended
	Jun. 30, 2012 Segment
Segment Information (Textual) [Abstract]
Number of reportable Segments	2
Number of geographic operating segments	4

XML

Equity (Detail Textual) (USD $) In Thousands, except Share data, unless otherwise specified	6 Months Ended		3 Months Ended
	Jun. 30, 2012	Jun. 30, 2012 Repurchase One [Member]	Jun. 30, 2012 Repurchase Two [Member]
Stock Repurchase Period [Line Items]
Repurchased shares		350,000	55,631
Repurchase of common stock	$ 9,829	$ 8,522	$ 1,307
Repurchased shares, average price		$ 24.35	$ 23.49

XML

Interim Financial Statements (Details Textual) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012 Franchise Brand	Jun. 30, 2011 Franchise
Business Acquisition [Line Items]
Number of acquired franchises representing Agnew Group in the UK	16	3
Interim Financial Statements (Textual) [Abstract]
Total number of owned and operated franchises	338
Number of owned and operated franchises in US	170
Number of owned and operated franchises outside US	168
Limited partnership interest in Penske Truck Leasing Co.	9.00%
Awarded franchises	7
Number of brands represented by franchises awarded	7
Disposed franchises	6
Number of brands represented by franchises disposed	6
Agnew Group [Member]
Business Acquisition [Line Items]
Number of acquired franchises representing Agnew Group in the UK	14
Number of other acquired franchises in the UK	2
NPA Holdco, LLC [Member]
Business Acquisition [Line Items]
Percentage of interest acquired NPA Holdco, LLC	7.00%
Amount of acquisition	3,000
7.75% senior subordinated notes due 2016 [Member] | Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long term debt	375,000
7.75% senior subordinated notes due 2016 [Member] | Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long term debt	388,125

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Business Combinations (Tables)

6 Months Ended

Jun. 30, 2012

Business Combinations [Abstract]

Summary of the aggregate consideration paid and the aggregate amounts of the assets acquired and liabilities assumed

	June 30,
	2012			2011
Accounts receivable	$	17,025		$	953
Inventory		80,766			7,923
Property and equipment		32,599			1,671
Goodwill		33,884			7,038
Franchise Value		23,426			—
Other assets		—			628
Current liabilities		(49,362	)		(2,491	)
Non-current liabilities		(26,816	)		—
Total consideration		111,522			15,722
Seller financed/assumed debt		—			(1,711	)
Cash used in dealership acquisitions	$	111,522		$	14,011

Summary of unaudited consolidated pro forma results of operations

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(amounts in millions except per share data)
Revenues	$	3,373	$	2,984	$	6,621	$	5,879
Income from continuing operations		50		41		100		80
Net income		49		41		96		78
Income from continuing operations per diluted common share	$	0.55	$	0.44	$	1.10	$	0.86
Net income per diluted common share	$	0.54	$	0.44	$	1.06	$	0.84

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Consolidating Condensed Financial Information (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
CONDENSED CONSOLIDATING STATEMENT OF INCOME
Revenues	$ 3,372,479	$ 2,829,986	$ 6,605,222	$ 5,568,119
Cost of sales	2,859,075	2,374,026	5,586,644	4,674,698
Gross profit	513,404	455,960	1,018,578	893,421
Selling, general and administrative expenses	409,452	374,325	806,799	728,349
Depreciation	13,651	11,926	26,976	23,705
Operating income (loss)	90,301	69,709	184,803	141,367
Floor plan interest expense	(9,971)	(6,921)	(19,620)	(13,780)
Other interest expense	(11,575)	(10,451)	(23,785)	(21,736)
Debt discount amortization				(1,718)
Equity in earnings (losses) of affiliates	8,168	7,882	12,578	7,904
Income (loss) from continuing operations before income taxes	76,923	60,219	153,976	112,037
Income taxes	(26,854)	(20,505)	(53,744)	(36,043)
Income (loss) from continuing operations	50,069	39,714	100,232	75,994
(Loss) income from discontinued operations, net of tax	(457)	345	(3,614)	(1,938)
Net income (loss)	49,612	40,059	96,618	74,056
Less: Income attributable to non-controlling interests	520	499	708	569
Net income (loss) attributable to Penske Automotive Group common stockholders	49,092	39,560	95,910	73,487
Other Comprehensive Income (Loss), Net of Taxes	(10,896)	(1,477)	(195)	15,045
Comprehensive income attributable to Penske Automotive Group common stockholders	38,196	38,083	95,715	88,532
Eliminations [Member]
CONDENSED CONSOLIDATING STATEMENT OF INCOME
Equity in earnings of subsidiaries	(83,728)	(64,793)	(171,551)	(128,811)
Income (loss) from continuing operations before income taxes	(83,728)	(64,793)	(171,551)	(128,811)
Income taxes	29,429	22,247	60,155	41,651
Income (loss) from continuing operations	(54,299)	(42,546)	(111,396)	(87,160)
(Loss) income from discontinued operations, net of tax	457	(345)	3,614	1,938
Net income (loss)	(53,842)	(42,891)	(107,782)	(85,222)
Net income (loss) attributable to Penske Automotive Group common stockholders	(53,842)	(42,891)	(107,782)	(85,222)
Comprehensive income attributable to Penske Automotive Group common stockholders	(53,842)	(42,891)	(107,782)	(85,222)
Penske Automotive Group [Member]
CONDENSED CONSOLIDATING STATEMENT OF INCOME
Selling, general and administrative expenses	4,740	4,790	9,335	9,739
Depreciation	246	257	608	542
Operating income (loss)	(4,986)	(5,047)	(9,943)	(10,281)
Floor plan interest expense	(2,254)	(329)	(4,452)	(462)
Other interest expense	(7,079)	(5,818)	(14,642)	(12,234)
Debt discount amortization				(1,718)
Equity in earnings (losses) of affiliates	6,994	6,121	10,754	7,352
Equity in earnings of subsidiaries	83,728	64,793	171,551	128,811
Income (loss) from continuing operations before income taxes	76,403	59,720	153,268	111,468
Income taxes	(26,854)	(20,505)	(53,744)	(36,043)
Income (loss) from continuing operations	49,549	39,215	99,524	75,425
(Loss) income from discontinued operations, net of tax	(457)	345	(3,614)	(1,938)
Net income (loss)	49,092	39,560	95,910	73,487
Net income (loss) attributable to Penske Automotive Group common stockholders	49,092	39,560	95,910	73,487
Other Comprehensive Income (Loss), Net of Taxes	534	(318)	1,543	(981)
Comprehensive income attributable to Penske Automotive Group common stockholders	49,626	39,242	97,453	72,506
Guarantor Subsidiaries [Member]
CONDENSED CONSOLIDATING STATEMENT OF INCOME
Revenues	2,011,105	1,645,845	3,844,225	3,197,904
Cost of sales	1,689,639	1,359,571	3,226,744	2,653,800
Gross profit	321,466	286,274	617,481	544,104
Selling, general and administrative expenses	248,711	232,576	487,120	445,788
Depreciation	7,475	6,572	14,597	12,795
Operating income (loss)	65,280	47,126	115,764	85,521
Floor plan interest expense	(4,199)	(3,348)	(7,989)	(7,220)
Other interest expense	(603)	(598)	(1,513)	(1,249)
Equity in earnings (losses) of affiliates	(40)		(40)
Income (loss) from continuing operations before income taxes	60,438	43,180	106,222	77,052
Income taxes	(23,231)	(15,851)	(43,778)	(26,785)
Income (loss) from continuing operations	37,207	27,329	62,444	50,267
(Loss) income from discontinued operations, net of tax	(392)	380	(1,997)	(1,597)
Net income (loss)	36,815	27,709	60,447	48,670
Net income (loss) attributable to Penske Automotive Group common stockholders	36,815	27,709	60,447	48,670
Other Comprehensive Income (Loss), Net of Taxes	(15)	(3,996)	(249)	(3,714)
Comprehensive income attributable to Penske Automotive Group common stockholders	36,800	23,713	60,198	44,956
Non-Guarantor Subsidiaries [Member]
CONDENSED CONSOLIDATING STATEMENT OF INCOME
Revenues	1,361,374	1,184,141	2,760,997	2,370,215
Cost of sales	1,169,436	1,014,455	2,359,900	2,020,898
Gross profit	191,938	169,686	401,097	349,317
Selling, general and administrative expenses	156,001	136,959	310,344	272,822
Depreciation	5,930	5,097	11,771	10,368
Operating income (loss)	30,007	27,630	78,982	66,127
Floor plan interest expense	(3,518)	(3,244)	(7,179)	(6,098)
Other interest expense	(3,893)	(4,035)	(7,630)	(8,253)
Equity in earnings (losses) of affiliates	1,214	1,761	1,864	552
Income (loss) from continuing operations before income taxes	23,810	22,112	66,037	52,328
Income taxes	(6,198)	(6,396)	(16,377)	(14,866)
Income (loss) from continuing operations	17,612	15,716	49,660	37,462
(Loss) income from discontinued operations, net of tax	(65)	(35)	(1,617)	(341)
Net income (loss)	17,547	15,681	48,043	37,121
Less: Income attributable to non-controlling interests	520	499	708	569
Net income (loss) attributable to Penske Automotive Group common stockholders	17,027	15,182	47,335	36,552
Other Comprehensive Income (Loss), Net of Taxes	(11,415)	2,837	(1,489)	19,740
Comprehensive income attributable to Penske Automotive Group common stockholders	$ 5,612	$ 18,019	$ 45,846	$ 56,292

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Long-Term debt (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Long Term Debt
Long-term Debt	$ 806,742	$ 850,191
Less: current portion	(13,139)	(3,414)
Net long-term debt	793,603	846,777
US Credit Agreement Revolving Credit Line [Member]
Long Term Debt
Long-term Debt	114,000	132,000
US Credit Agreement Term Loan [Member]
Long Term Debt
Long-term Debt	127,000	127,000
UK Credit Agreement Revolving Credit Line [Member]
Long Term Debt
Long-term Debt	42,401	59,060
UK Credit Agreement Term Loan [Member]
Long Term Debt
Long-term Debt	42,401
UK Credit Agreement Overdraft Line of Credit [Member]
Long Term Debt
Long-term Debt		13,333
7.75% senior subordinated notes due 2016 [Member]
Long Term Debt
Long-term Debt	375,000	375,000
3.5% senior subordinated convertible notes due 2026 [Member]
Long Term Debt
Long-term Debt	25,546	63,324
Mortgages [Member]
Long Term Debt
Long-term Debt	74,131	75,684
Other Debt Securities [Member]
Long Term Debt
Long-term Debt	$ 6,263	$ 4,790

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Business Combinations (Details 1) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Summary of unaudited consolidated pro forma results of operations
Revenues	$ 3,373	$ 2,984	$ 6,621	$ 5,879
Income from continuing operations	50	41	100	80
Net income	$ 49	$ 41	$ 96	$ 78
Income from continuing operations per diluted common share	$ 0.55	$ 0.44	$ 1.10	$ 0.86
Net income per diluted common share	$ 0.54	$ 0.44	$ 1.06	$ 0.84

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Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Revenues and adjusted segment income by reportable segment
Total revenues	$ 3,372,479	$ 2,829,986	$ 6,605,222	$ 5,568,119
Segment Income	76,923	60,219	153,976	112,037
Retail [Member]
Revenues and adjusted segment income by reportable segment
Total revenues	3,372,479	2,829,986	6,605,222	5,568,119
Segment Income	69,722	53,951	142,941	104,645
PAG Investments [Member]
Revenues and adjusted segment income by reportable segment
Segment Income	$ 7,201	$ 6,268	$ 11,035	$ 7,392

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Consolidated Condensed Statement of Equity (Unaudited) (USD $) In Thousands, except Share data	Total	Total Penske Automotive Group Stockholders' Equity	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Non-controlling Interest
Balance at Dec. 31, 2011	$ 1,140,413	$ 1,135,985	$ 9	$ 702,335	$ 459,375	$ (25,734)	$ 4,428
Balance, shares at Dec. 31, 2011			90,277,356
Equity compensation	3,307	3,307		3,307
Equity compensation, shares			394,939
Distributions to non-controlling interests	(715)						(715)
Sale of subsidiary shares to non-controlling interest		317		317			(317)
Foreign currency translation	(1,489)	(1,489)				(1,489)
Repurchase of common stock	(9,829)	(9,829)		(9,829)
Repurchase of common stock, shares			(405,631)
Dividends	(18,918)	(18,918)			(18,918)
Convertible debt redemption	564	564		564
Other	1,294	1,294				1,294
Net income	96,618	95,910			95,910		708
Balance at Jun. 30, 2012	$ 1,211,245	$ 1,207,141	$ 9	$ 696,694	$ 536,367	$ (25,929)	$ 4,104
Balance, shares at Jun. 30, 2012			90,266,664

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Long-Term Debt (Details Textual)	6 Months Ended		6 Months Ended		6 Months Ended			6 Months Ended				6 Months Ended					6 Months Ended				6 Months Ended			1 Months Ended	6 Months Ended
	Jun. 30, 2012 USD ($)	Dec. 31, 2011 USD ($)	Jun. 30, 2012 US Credit Agreement Revolving Credit Line [Member] USD ($)	Dec. 31, 2011 US Credit Agreement Revolving Credit Line [Member] USD ($)	Jun. 30, 2012 US Credit Agreement Revolving Credit Line [Member] Minimum [Member]	Jun. 30, 2012 US Credit Agreement Term Loan [Member] USD ($)	Dec. 31, 2011 US Credit Agreement Term Loan [Member] USD ($)	Jun. 30, 2012 US Credit Agreement Term Loan [Member] Maximum [Member]	Jun. 30, 2012 UK Credit Agreement Revolving Credit Line [Member] USD ($)	Jun. 30, 2012 UK Credit Agreement Revolving Credit Line [Member] GBP (£)	Dec. 31, 2011 UK Credit Agreement Revolving Credit Line [Member] USD ($)	Jun. 30, 2012 UK Credit Agreement Revolving Credit Line [Member] Maximum [Member]	Jun. 30, 2012 UK Credit Agreement Revolving Credit Line [Member] Minimum [Member]	Jun. 30, 2012 UK Credit Agreement Term Loan [Member] GBP (£)	Jun. 30, 2012 UK Credit Agreement Term Loan [Member] USD ($)	Jan. 31, 2012 UK Credit Agreement Term Loan [Member] GBP (£)	Jun. 30, 2012 UK Credit Agreement Term Loan [Member] Maximum [Member]	Jun. 30, 2012 UK Credit Agreement Term Loan [Member] Minimum [Member]	Jun. 30, 2012 UK Credit Agreement Overdraft Line of Credit [Member] GBP (£)	Dec. 31, 2011 UK Credit Agreement Overdraft Line of Credit [Member] USD ($)	Jun. 30, 2012 7.75% senior subordinated notes due 2016 [Member] USD ($)	Dec. 31, 2011 7.75% senior subordinated notes due 2016 [Member] USD ($)	Dec. 31, 2006 7.75% senior subordinated notes due 2016 [Member] USD ($)	Jul. 25, 2012 3.5% senior subordinated convertible notes due 2026 [Member] USD ($)	Jun. 30, 2012 3.5% senior subordinated convertible notes due 2026 [Member] USD ($)	Dec. 31, 2011 3.5% senior subordinated convertible notes due 2026 [Member] USD ($)	Jun. 30, 2012 Mortgages [Member] USD ($)	Dec. 31, 2011 Mortgages [Member] USD ($)	Jun. 30, 2012 UK Credit Agreement [Member] USD ($)	Jun. 30, 2012 UK Credit Agreement [Member] GBP (£)	Jun. 30, 2012 US Credit Agreement Letter of Credit [Member] USD ($)
Long-Term Debt (Textual) [Abstract]
Maximum credit available under US and UK credit agreement			$ 375,000,000							£ 100,000,000						£ 30,000,000															$ 10,000,000
Line of credit basis spread on variable rate					2.50%			2.50%				3.00%	1.35%				4.325%	2.675%	1.75%
Debt instrument redemption rate of principal																					7.75%
Incremental interest rate for uncollateralized borrowings in excess of maximum limit			1.00%
Term loan outstanding under credit agreement			114,000,000			127,000,000								27,000,000	42,401,000														42,401,000	27,000,000	500,000
Repayment of term loan														1,500,000
Final payment														7,500,000
Demand over draft line of credit																			10,000,000
Senior unsecured notes issued																							375,000,000
Senior subordinated convertible notes, interest rate																					7.75%		7.75%		3.50%
Percentage of principal amount outstanding redeem	100.00%
Conversion rate of convertible notes																									42.7796
Conversion principal amount																									1,000
Conversion price per share																									$ 23.38
Payment of cash, common stock or a combination of two, if conversion value exceed																									1,000,000
Long-term Debt	806,742,000	850,191,000	114,000,000	132,000,000		127,000,000	127,000,000		42,401,000		59,060,000				42,401,000					13,333,000	375,000,000	375,000,000			25,546,000	63,324,000	74,131,000	75,684,000
Conversion balance due																									24,909
Outstanding principal amount of convertible notes																									25,546
Remaining principal and interest of convertible notes																								$ 37,778
Redemption price percentage																					103.875%

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2012

Segment Information [Abstract]

Revenues and adjusted segment income by reportable segment

Three Months Ended June 30

	Retail		PAG Investments		Total
Revenues
2012	$	3,372,479	$	—	$	3,372,479
2011		2,829,986		—		2,829,986
Segment income
2012		69,722		7,201		76,923
2011		53,951		6,268		60,219

Six Months Ended June 30

	Retail		PAG Investments		Total
Revenues
2012	$	6,605,222	$	—	$	6,605,222
2011		5,568,119		—		5,568,119
Segment income
2012		142,941		11,035		153,976
2011		104,645		7,392		112,037

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Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2012

Long-Term Debt [Abstract]

Long Term Debt

	June 30,			December 31,
	2012			2011
U.S. credit agreement — revolving credit line	$	114,000		$	132,000
U.S. credit agreement — term loan		127,000			127,000
U.K. credit agreement — revolving credit line		42,401			59,060
U.K. credit agreement — term loan		42,401			—
U.K. credit agreement — overdraft line of credit		—			13,333
7.75% senior subordinated notes due 2016		375,000			375,000
3.5% senior subordinated convertible notes due 2026, net of debt discount		25,546			63,324
Mortgage facilities		74,131			75,684
Other		6,263			4,790
Total long-term debt		806,742			850,191
Less: current portion		(13,139	)		(3,414	)
Net long-term debt	$	793,603		$	846,777

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Interest Rate Swaps (Details Textual) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011	Jun. 30, 2012 Forward Starting Interest Rate Swap Agreements [Member]	Jan. 31, 2011 Floating Rate Floor Plan Debt [Member]
Derivative [Line Items]
Portion of floating rate floor plan debt fixed by swap agreements	$ 100,000			$ 300,000	$ 300,000
Interest rate swap, fixed	1.55%			2.135%	3.67%
Interest Rate Swaps (Textual) [Abstract]
Estimated liabilities of swaps designated as hedging instruments, fair value	16,346		15,952
Estimated assets of swaps designated as hedging instruments, fair value		0
Increase in the weighted average interest rate on floor plan borrowings due to the swaps	0.39%	0.40%
Hedge ineffectiveness recorded	$ 0	$ 0

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Consolidating Condensed Financial Information (Tables)

6 Months Ended

Jun. 30, 2012

Consolidating Condensed Financial Information [Abstract]

CONDENSED CONSOLIDATING BALANCE SHEET

CONDENSED CONSOLIDATING BALANCE SHEET

June 30, 2012

	Total Company		Eliminations			Penske Automotive Group		Guarantor Subsidiaries		Non-Guarantor Subsidiaries
	(In thousands)
Cash and cash equivalents	$	37,219	$	—		$	—	$	18,029	$	19,190
Accounts receivable, net		464,424		(324,158	)		324,158		261,705		202,719
Inventories		1,830,841		—			—		1,063,722		767,119
Other current assets		91,963		—			4,248		41,075		46,640
Assets held for sale		39,059		—			—		12,966		26,093
Total current assets		2,463,506		(324,158	)		328,406		1,397,497		1,061,761
Property and equipment, net		925,054		—			4,843		576,715		343,496
Intangible assets		1,193,409		—			—		705,851		487,558
Equity method investments		296,627		—			247,401		—		49,226
Other long-term assets		14,269		(1,384,066	)		1,394,431		2,205		1,699
Total assets	$	4,892,865	$	(1,708,224	)	$	1,975,081	$	2,682,268	$	1,943,740
Floor plan notes payable	$	1,158,252	$	—		$	—	$	664,954	$	493,298
Floor plan notes payable — non-trade		724,687		—			119,600		355,127		249,960
Accounts payable		310,686		—			2,224		105,852		202,610
Accrued expenses		258,726		(324,158	)		466		154,353		428,065
Current portion of long-term debt		13,139		—			—		3,717		9,422
Liabilities held for sale		34,149		—			—		9,551		24,598
Total current liabilities		2,499,639		(324,158	)		122,290		1,293,554		1,407,953
Long-term debt		793,603		(40,683	)		641,546		75,791		116,949
Deferred tax liabilities		223,485		—			—		196,834		26,651
Other long-term liabilities		164,893		—			—		94,720		70,173
Total liabilities		3,681,620		(364,841	)		763,836		1,660,899		1,621,726
Total equity		1,211,245		(1,343,383	)		1,211,245		1,021,369		322,014
Total liabilities and equity	$	4,892,865	$	(1,708,224	)	$	1,975,081	$	2,682,268	$	1,943,740

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 June 30, 2012

	Total Company			Eliminations			Penske Automotive Group			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
	(In thousands)
Revenues	$	3,372,479		$	—		$	—		$	2,011,105		$	1,361,374
Cost of sales		2,859,075			—			—			1,689,639			1,169,436
Gross profit		513,404			—			—			321,466			191,938
Selling, general and administrative expenses		409,452			—			4,740			248,711			156,001
Depreciation		13,651			—			246			7,475			5,930
Operating income (loss)		90,301			—			(4,986	)		65,280			30,007
Floor plan interest expense		(9,971	)		—			(2,254	)		(4,199	)		(3,518	)
Other interest expense		(11,575	)		—			(7,079	)		(603	)		(3,893	)
Equity in earnings of affiliates		8,168						6,994			(40	)		1,214
Equity in earnings of subsidiaries		—			(83,728	)		83,728			—			—
Income (loss) from continuing operations before income taxes		76,923			(83,728	)		76,403			60,438			23,810
Income taxes		(26,854	)		29,429			(26,854	)		(23,231	)		(6,198	)
Income (loss) from continuing operations		50,069			(54,299	)		49,549			37,207			17,612
(Loss) income from discontinued operations, net of tax		(457	)		457			(457	)		(392	)		(65	)
Net income (loss)		49,612			(53,842	)		49,092			36,815			17,547
Less: Income attributable to the non-controlling interests		520			—			—			—			520
Net income (loss) attributable to Penske Automotive Group common stockholders		49,092			(53,842	)		49,092			36,815			17,027
Other comprehensive income (loss), net of tax		(10,896	)		—			534			(15	)		(11,415	)
Comprehensive income attributable to Penske Automotive Group common stockholders	$	38,196		$	(53,842	)	$	49,626		$	36,800		$	5,612

CONDENSED CONSOLIDATING STATEMENT OF INCOME

Three Months Ended June 30, 2011

	Total Company			Eliminations			Penske Automotive Group			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
	(In thousands)
Revenues	$	2,829,986		$	—		$	—		$	1,645,845		$	1,184,141
Cost of sales		2,374,026			—			—			1,359,571			1,014,455
Gross profit		455,960			—			—			286,274			169,686
Selling, general and administrative expenses		374,325			—			4,790			232,576			136,959
Depreciation		11,926			—			257			6,572			5,097
Operating income (loss)		69,709			—			(5,047	)		47,126			27,630
Floor plan interest expense		(6,921	)		—			(329	)		(3,348	)		(3,244	)
Other interest expense		(10,451	)		—			(5,818	)		(598	)		(4,035	)
Equity in earnings (losses) of affiliates		7,882			—			6,121			—			1,761
Equity in earnings of subsidiaries		—			(64,793	)		64,793			—			—
Income (loss) from continuing operations before income taxes		60,219			(64,793	)		59,720			43,180			22,112
Income taxes		(20,505	)		22,247			(20,505	)		(15,851	)		(6,396	)
Income (loss) from continuing operations		39,714			(42,546	)		39,215			27,329			15,716
(Loss) income from discontinued operations, net of tax		345			(345	)		345			380			(35	)
Net income (loss)		40,059			(42,891	)		39,560			27,709			15,681
Less: Income attributable to the non-controlling interests		499			—			—			—			499
Net income (loss) attributable to Penske Automotive Group common stockholders		39,560			(42,891	)		39,560			27,709			15,182
Other comprehensive income (loss), net of tax		(1,477	)		—			(318	)		(3,996	)		2,837
Comprehensive income attributable to Penske Automotive Group common stockholders	$	38,083		$	(42,891	)	$	39,242		$	23,713		$	18,019

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	$	6,605,222		$	—		$	—		$	3,844,225		$	2,760,997
Cost of sales		5,586,644			—			—			3,226,744			2,359,900
Gross profit		1,018,578			—			—			617,481			401,097
Selling, general and administrative expenses		806,799			—			9,335			487,120			310,344
Depreciation		26,976			—			608			14,597			11,771
Operating income (loss)		184,803			—			(9,943	)		115,764			78,982
Floor plan interest expense		(19,620	)		—			(4,452	)		(7,989	)		(7,179	)
Other interest expense		(23,785	)		—			(14,642	)		(1,513	)		(7,630	)
Equity in earnings (losses) of affiliates		12,578			—			10,754			(40	)		1,864
Equity in earnings of subsidiaries		—			(171,551	)		171,551			—			—
Income (loss) from continuing operations before income taxes		153,976			(171,551	)		153,268			106,222			66,037
Income taxes		(53,744	)		60,155			(53,744	)		(43,778	)		(16,377	)
Income (loss) from continuing operations		100,232			(111,396	)		99,524			62,444			49,660
(Loss) income from discontinued operations, net of tax		(3,614	)		3,614			(3,614	)		(1,997	)		(1,617	)
Net income (loss)		96,618			(107,782	)		95,910			60,447			48,043
Less: Income attributable to the non-controlling interests		708			—			—			—			708
Net income (loss) attributable to Penske Automotive Group common stockholders		95,910			(107,782	)		95,910			60,447			47,335
Other comprehensive income (loss), net of tax		(195	)		—			1,543			(249	)		(1,489	)
Comprehensive income attributable to Penske Automotive Group common stockholders	$	95,715		$	(107,782	)	$	97,453		$	60,198		$	45,846

CONDENSED CONSOLIDATING STATEMENT OF INCOME

Six Months Ended June 30, 2011

	Total Company			Eliminations			Penske Automotive Group			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
	(In thousands)
Revenues	$	5,568,119		$	—		$	—		$	3,197,904		$	2,370,215
Cost of sales		4,674,698			—			—			2,653,800			2,020,898
Gross profit		893,421			—			—			544,104			349,317
Selling, general and administrative expenses		728,349			—			9,739			445,788			272,822
Depreciation		23,705			—			542			12,795			10,368
Operating income (loss)		141,367			—			(10,281	)		85,521			66,127
Floor plan interest expense		(13,780	)		—			(462	)		(7,220	)		(6,098	)
Other interest expense		(21,736	)		—			(12,234	)		(1,249	)		(8,253	)
Debt discount amortization		(1,718	)		—			(1,718	)		—			—
Equity in earnings (losses) of affiliates		7,904			—			7,352			—			552
Equity in earnings of subsidiaries		—			(128,811	)		128,811			—			—
Income (loss) from continuing operations before income taxes		112,037			(128,811	)		111,468			77,052			52,328
Income taxes		(36,043	)		41,651			(36,043	)		(26,785	)		(14,866	)
Income (loss) from continuing operations		75,994			(87,160	)		75,425			50,267			37,462
(Loss) income from discontinued operations, net of tax		(1,938	)		1,938			(1,938	)		(1,597	)		(341	)
Net income (loss)		74,056			(85,222	)		73,487			48,670			37,121
Less: Income attributable to the non-controlling interests		569			—			—			—			569
Net income (loss) attributable to Penske Automotive Group common stockholders		73,487			(85,222	)		73,487			48,670			36,552
Other comprehensive income (loss), net of tax		15,045			—			(981	)		(3,714	)		19,740
Comprehensive income attributable to Penske Automotive Group common stockholders	$	88,532		$	(85,222	)	$	72,506		$	44,956		$	56,292

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

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	$	204,186		$	56,571		$	8,658		$	138,957
Investing activities:
Purchase of equipment and improvements		(57,092	)		(754	)		(44,410	)		(11,928	)
Dealership acquisitions, net		(111,522	)					(3,416	)		(108,106	)
Other		(3,653	)		—			(970	)		(2,683	)
Net cash from continuing investing activities		(172,267	)		(754	)		(48,796	)		(122,717	)
Financing activities:
Repurchase of 3.5% senior subordinated convertible notes		(37,778	)		(37,778	)
Net borrowings (repayments) of other long-term debt		(6,427	)		(18,000	)		(967	)		12,540
Net borrowings (repayments) of floor plan notes payable — non-trade		32,799			28,708			19,506			(15,415	)
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		(40,153	)		(55,817	)		19,124			(3,460	)
Net cash from discontinued operations		16,777			—			11,794			4,983
Net change in cash and cash equivalents		8,543			—			(9,220	)		17,763
Cash and cash equivalents, beginning of period		28,676			—			27,249			1,427
Cash and cash equivalents, end of period	$	37,219		$	—		$	18,029		$	19,190

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Six Months Ended June 30, 2011

				Penske Automotive
	Total						Guarantor			Non-Guarantor
	Company			Group			Subsidiaries			Subsidiaries
	(In thousands)
Net cash from continuing operating activities	$	41,661		$	84,594		$	1,030		$	(43,963	)
Investing activities:
Purchase of equipment and improvements		(51,435	)		(1,308	)		(27,786	)		(22,341	)
Dealership acquisitions, net		(14,011	)		—			(12,331	)		(1,680	)
Other		2,865			—			—			2,865
Net cash from continuing investing activities		(62,581	)		(1,308	)		(40,117	)		(21,156	)
Financing activities:
Repurchase of 3.5% senior subordinated convertible notes		(87,278	)		(87,278	)		—			—
Net borrowings (repayments) of other long-term debt		13,602			—			23,541			(9,939	)
Net borrowings (repayments) of floor plan notes payable — non-trade		70,084			20,200			(23,492	)		73,376
Proceeds from exercises of options, including excess tax benefit		2,698			2,698			—			—
Repurchase of common stock		(12,413	)		(12,413	)		—			—
Dividends		(6,493	)		(6,493	)		—			—
Distributions from (to) parent		—			—			4,245			(4,245	)
Net cash from continuing financing activities		(19,800	)		(83,286	)		4,294			59,192
Net cash from discontinued operations		28,196			—			20,011			8,185
Net change in cash and cash equivalents		(12,524	)		—			(14,782	)		2,258
Cash and cash equivalents, beginning of period		19,904			—			16,238			3,666
Cash and cash equivalents, end of period	$	7,380		$	—		$	1,456		$	5,924

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Interim Financial Statements (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Combined financial information regarding entities accounted for as discontinued operations
Revenues	$ 43,542	$ 132,377	$ 99,029	$ 274,742
Pre-tax income (loss)	(760)	19	(12,188)	(4,795)
Gain on disposal		$ 695	$ 10,160	$ 1,765

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Consolidated Condensed Statements of Cash Flows (Unaudited) (Parenthetical) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Consolidated Condensed Statements of Cash Flows [Abstract]
Repayment of sellers' floor plan notes payable, dealership acquisitions	$ 37,779	$ 5,862

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Interim Financial Statements (Details 1) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Balance Sheet information regarding entities accounted for as discontinued operations
Inventories	$ 27,053	$ 48,203
Other assets	12,006	32,919
Total assets	39,059	81,122
Floor plan notes payable (including non-trade)	27,294	44,869
Other liabilities	6,855	10,951
Total liabilities	$ 34,149	$ 55,820

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Floor Plan Notes Payable - Trade and Non-trade (Details Textual)	6 Months Ended
	Jun. 30, 2012
Floor Plans Notes Payable - Trade and Non-trade (Textual) [Abstract]
Maturity period of floor plan arrangements outside the U.S. if not payable on demand	90 days or less

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Consolidated Condensed Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
ASSETS
Cash and cash equivalents	$ 37,219	$ 28,676
Accounts receivable, net of allowance for doubtful accounts of $2,227 and $2,159	464,424	438,769
Inventories	1,830,841	1,572,568
Other current assets	91,963	80,179
Assets held for sale	39,059	81,122
Total current assets	2,463,506	2,201,314
Property and equipment, net	925,054	856,674
Goodwill	940,596	903,721
Franchise value	252,813	228,460
Equity method investments	296,627	298,640
Other long-term assets	14,269	13,490
Total assets	4,892,865	4,502,299
LIABILITIES AND EQUITY
Floor plan notes payable	1,158,252	977,548
Floor plan notes payable - non-trade	724,687	691,888
Accounts payable	310,686	220,538
Accrued expenses	258,726	201,179
Current portion of long-term debt	13,139	3,414
Liabilities held for sale	34,149	55,820
Total current liabilities	2,499,639	2,150,387
Long-term debt	793,603	846,777
Deferred tax liabilities	223,485	217,902
Other long-term liabilities	164,893	146,820
Total liabilities	3,681,620	3,361,886
Commitments and contingent liabilities
Penske Automotive Group stockholders' equity:
Preferred Stock, $0.0001 par value; 100 shares authorized; none issued and outstanding
Common Stock	9	9
Additional paid-in-capital	696,694	702,335
Retained earnings	536,367	459,375
Accumulated other comprehensive loss	(25,929)	(25,734)
Total Penske Automotive Group stockholders' equity	1,207,141	1,135,985
Non-controlling interest	4,104	4,428
Total equity	1,211,245	1,140,413
Total liabilities and equity	4,892,865	4,502,299
Non-voting Common Stock, $0.0001 par value, 7,125 shares authorized; none issued and outstanding
Penske Automotive Group stockholders' equity:
Common Stock
Class C Common Stock, $0.0001 par value, 20,000 shares authorized; none issued and outstanding
Penske Automotive Group stockholders' equity:
Common Stock

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Commitments and Contingent Liabilities (Detail Textual) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Commitments and Contingent Liabilities (Textual) [Abstract]
Lease period, minimum	5 years
Lease period, maximum	20 years
Letters of credit outstanding	$ 18,997
Surety bonds posted	13,699
Limited partnership interest in Penske Truck Leasing Co.	9.00%
GECC [Member]
Loss Contingencies [Line Items]
Annual fee pay for acting as co-obligor	950
Percentage of interest agreed to indemnify if GECC required to make any payments of principal or interest	9.00%
Holdings [Member]
Loss Contingencies [Line Items]
Senior unsecured notes issued	700,000
Senior subordinated convertible notes, interest rate	3.80%
Subsidiary Contributed Capital	700,000
Subsidiary of limited liability company or limited partnership ownership interest given in exchange of amount received percentage	21.50%
Funds Used to Reduce Outstanding Debt	700,000
Guarantee of Indebtedness of Others [Member] | GECC [Member]
Loss Contingencies [Line Items]
Percentage of required principal repayment included in maximum amount of Company's potential obligations to GECC under agreement	9.00%
Percentage of interest payments included in maximum amount of Company's potential obligations	9.00%
Value of interest payments included in maximum amount of Company's potential obligations	$ 63,100

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Consolidated Condensed Statements of Comprehensive Income (Unaudited) (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Consolidated Condensed Statements of Comprehensive Income [Abstract]
Unrealized gain (loss) net of tax benefit	$ 701	$ 2,614	$ 1,524	$ 2,476
Interest expense, net of tax provision	$ 692	$ 0	$ 1,361	$ 46

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Inventories (Details Textual) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Inventories (Textual) [Abstract]
Interest credits and advertising assistance	$ 15,326	$ 14,474

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Interim Financial Statements (Policies)

6 Months Ended

Jun. 30, 2012

Interim Financial Statements [Abstract]

Business overview

Business Overview

Penske Automotive Group, Inc. (the “Company”) is the second largest automotive retailer headquartered in the U.S. as measured by total revenue. As of June 30, 2012, the Company operated 338 retail franchises, of which 170 franchises are located in the U.S. and 168 franchises are located outside of the U.S. The franchises outside the U.S. are located primarily in the U.K. Each of the Company’s dealerships offers a wide selection of new and used vehicles for sale. In addition to selling new and used vehicles, the Company generates higher-margin revenue at each of its dealerships through maintenance and repair services and the sale and placement of higher-margin products, such as third-party finance and insurance products, third-party extended service contracts and replacement and aftermarket automotive products. The Company also holds a 9.0% limited partnership interest in Penske Truck Leasing Co., L.P. (“PTL”), a leading transportation services provider.

During the six months ended June 30, 2012, the Company acquired the Agnew Group in the United Kingdom, representing fourteen franchises, and two other franchises. The Company also was awarded seven franchises representing seven different brands, including Mini of Marin (California) and Nissan and Infiniti San Francisco. The Company disposed of six franchises representing six different brands, including Jaguar and Land Rover in Gatwick (U.K.) and Scottsdale Lexus.

In the second quarter of 2012, the Company acquired a 7% interest in NPA Holdco, LLC, an auctioneer of powersport vehicles, for $3,000. During the second quarter of 2012, Transportation Resource Partners, a related party, acquired a controlling interest in this company on the same financial terms as our investment.

Basis of Presentation

Basis of Presentation

The following unaudited consolidated condensed financial statements of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in the Company’s annual financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the SEC rules and regulations. The information presented as of June 30, 2012 and December 31, 2011 and for the three and six month periods ended June 30, 2012 and 2011 is unaudited, but includes all adjustments which the management of the Company believes to be necessary for the fair presentation of results for the periods presented. The consolidated condensed financial statements for prior periods have been revised for entities which have been treated as discontinued operations through June 30, 2012, and the results for interim periods are not necessarily indicative of results to be expected for the year. These consolidated condensed financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2011, which are included as part of the Company’s Annual Report on Form 10-K.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2011-04, “Fair Value Measurements and Disclosures (Topic 820) — Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” ASU No. 2011-04 clarifies the application of existing fair value measurement and disclosure requirements, changes certain principles related to measuring fair value, and requires additional disclosures about fair value measurements. ASU No. 2011-04 is effective for periods beginning after December 15, 2011. The Company adopted the standard on January 1, 2012. Adoption of ASU No. 2011-04 did not affect the Company’s consolidated financial position, results of operations, or cash flows.

In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income (Topic 220) — Presentation of Comprehensive Income”, which requires the presentation of components of other comprehensive income with the components of net income. The Company adopted the standard on January 1, 2012. Adoption of ASU No. 2011-05 did not affect the Company’s consolidated financial position, results of operations, or cash flows.

In December 2011, the FASB issued ASU No. 2011-11, “Balance Sheet (Topic 210) — Disclosures about Offsetting Assets and Liabilities.” ASU No. 2011-11 will require disclosure of the effect or potential effect of offsetting arrangements on the Company’s financial position as well as enhanced disclosure of the rights of setoff associated with the Company’s recognized assets and recognized liabilities. ASU No. 2011-11 is effective for periods beginning on or after January 1, 2013. Since these amended principles require only additional disclosures concerning offsetting and related arrangements, adoption will not affect the Company’s consolidated financial position, results of operations, or cash flows.

Discontinued Operations

Discontinued Operations

The Company accounts for dispositions in its retail operations as discontinued operations when it is evident that the operations and cash flows of a franchise being disposed will be eliminated from on-going operations and that the Company will not have any significant continuing involvement in its operations.

In evaluating whether the cash flows of a dealership in its Retail reportable segment will be eliminated from ongoing operations, the Company considers whether it is likely that customers will migrate to similar franchises that it owns in the same geographic market. The Company’s consideration includes an evaluation of the brands sold at other dealerships it operates in the market and their proximity to the disposed dealership. When the Company disposes of franchises, it typically does not have continuing brand representation in that market. If the franchise being disposed of is located in a complex of Company owned dealerships, the Company does not treat the disposition as a discontinued operation if it believes that the cash flows previously generated by the disposed franchise will be replaced by expanded operations of the remaining or replacement franchises.

Combined financial information regarding entities accounted for as discontinued operations follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	2012			2011		2012			2011
Revenues	$	43,542		$	132,377	$	99,029		$	274,742
Pre-tax income (loss)		(760	)		19		(12,188	)		(4,795	)
Gain on disposal		—			695		10,160			1,765

	June 30,		December 31,
	2012		2011
Inventories	$	27,053	$	48,203
Other assets		12,006		32,919
Total assets	$	39,059	$	81,122
Floor plan notes payable (including non-trade)	$	27,294	$	44,869
Other liabilities		6,855		10,951
Total liabilities	$	34,149	$	55,820

Estimates

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The accounts requiring the use of significant estimates include accounts receivable, inventories, income taxes, intangible assets and certain reserves.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, debt, floor plan notes payable, and interest rate swaps used to hedge future cash flows. Other than our subordinated notes, the carrying amount of all significant financial instruments approximates fair value due either to length of maturity, the existence of variable interest rates that approximate prevailing market rates, or as a result of mark to market accounting. The Company’s 7.75% senior subordinated notes due in 2016 had a carrying value of $375,000 and a fair value of $388,125 as of June 30, 2012. The calculation of the senior subordinated notes fair value was based on quoted, level one market data.

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Business Combinations (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Jun. 30, 2011
Summary of the aggregate consideration paid and the aggregate amounts of the assets acquired and liabilities assumed
Accounts receivable	$ 17,025	$ 953
Inventory	80,766	7,923
Property and equipment	32,599	1,671
Goodwill	33,884	7,038
Franchise value	23,426
Other assets		628
Current liabilities	(49,362)	(2,491)
Non-current liabilities	(26,816)
Total Consideration	111,522	15,722
Seller financed/assumed debt		(1,711)
Cash used in dealership acquisitions	$ 111,522	$ 14,011

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Inventories (Tables)

6 Months Ended

Jun. 30, 2012

Inventories [Abstract]

Inventories Net

	June 30,		December 31,
	2012		2011
New vehicles	$	1,234,036	$	1,051,120
Used vehicles		513,331		441,655
Parts, accessories and other		83,474		79,793
Total inventories	$	1,830,841	$	1,572,568

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Consolidated Condensed Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Operating Activities:
Net income	$ 96,618	$ 74,056
Adjustments to reconcile net income to net cash from continuing operating activities:
Depreciation	26,976	23,705
Debt discount amortization		(1,718)
Earnings of equity method investments	(12,578)	(7,904)
Loss from discontinued operations, net of tax	3,614	1,938
Deferred income taxes	7,793	12,888
Changes in operating assets and liabilities:
Accounts receivable	(8,893)	20,147
Inventories	(178,269)	10,196
Floor plan notes payable	180,651	(73,075)
Accounts payable and accrued expenses	96,256	(10,209)
Other	(7,982)	(11,799)
Net cash from continuing operating activities	204,186	41,661
Investing Activities:
Purchase of equipment and improvements	(57,092)	(51,435)
Dealership acquisitions net, including repayment of sellers' floor plan notes payable of $37,779 and $5,862, respectively	(111,522)	(14,011)
Other	(3,653)	2,865
Net cash from continuing investing activities	(172,267)	(62,581)
Financing Activities:
Proceeds from borrowings under U.S. credit agreement revolving credit line	396,800	156,000
Repayments under U.S. credit agreement revolving credit line	(414,800)	(156,000)
Repurchase of 3.5% senior subordinated convertible notes	(37,778)	(87,278)
Net borrowings of other long-term debt	11,573	13,602
Net borrowings of floor plan notes payable-non-trade	32,799	70,084
Repurchases of common stock	(9,829)	(12,413)
Dividends	(18,918)	(6,493)
Proceeds from exercises of options, including excess tax benefit		2,698
Net cash from continuing financing activities	(40,153)	(19,800)
Discontinued operations:
Net cash from discontinued operating activities	(5,750)	(25,008)
Net cash from discontinued investing activities	34,726	47,327
Net cash from discontinued financing activities	(12,199)	5,877
Net cash from discontinued operations	16,777	28,196
Net change in cash and cash equivalents	8,543	(12,524)
Cash and cash equivalents, beginning of period	28,676	19,904
Cash and cash equivalents, end of period	37,219	7,380
Cash paid for:
Interest	48,984	37,752
Income taxes	19,180	23,442
Seller financed/assumed debt		$ 4,865

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Consolidated Condensed Balance Sheets (Unaudited) (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Allowance for doubtful accounts	$ 2,227	$ 2,159
Preferred Stock, par value	$ 0.0001	$ 0.0001
Preferred Stock, shares authorized	100	100
Preferred Stock, shares issued
Preferred Stock, shares outstanding
Common Stock, par value	$ 0.0001	$ 0.0001
Common Stock, shares authorized	240,000	240,000
Common Stock, shares issued	90,267	90,277
Common Stock, shares outstanding	90,267	90,277
Non-voting Common Stock, $0.0001 par value, 7,125 shares authorized; none issued and outstanding
Common Stock, par value	$ 0.0001	$ 0.0001
Common Stock, shares authorized	7,125	7,125
Common Stock, shares issued
Common Stock, shares outstanding
Class C Common Stock, $0.0001 par value, 20,000 shares authorized; none issued and outstanding
Common Stock, par value	$ 0.0001	$ 0.0001
Common Stock, shares authorized	20,000	20,000
Common Stock, shares issued
Common Stock, shares outstanding

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Interest Rate Swaps

6 Months Ended

Jun. 30, 2012

Interest Rate Swaps [Abstract]

Interest Rate Swaps

8. Interest Rate Swaps

The Company periodically uses interest rate swaps to manage interest rate risk associated with the Company’s variable rate floor plan debt. The Company is party to interest rate swap agreements through December 2014 pursuant to which the LIBOR portion of $300,000 of the Company’s floating rate floor plan debt is fixed at 2.135% and $100,000 of the Company’s floating rate floor plan debt is fixed at a rate of 1.55%. The Company may terminate these agreements at any time, subject to the settlement of the then current fair value of the swap arrangements.

Through January 2011, the Company was party to interest rate swap agreements pursuant to which the LIBOR portion of $300,000 of the Company’s floating rate floor plan debt was fixed at 3.67%.

The Company used Level 2 inputs to estimate the fair value of the interest rate swap agreements. As of June 30, 2012 and December 31, 2011, the fair value of the swaps designated as hedging instruments was estimated to be a liability of $16,346 and $15,952, respectively.

During the three and six months ended June 30, 2012 and 2011, there was no hedge ineffectiveness recorded on the Company’s income statement. During the three and six months ended June 30, 2012, the swaps increased the weighted average interest rate on the Company’s floor plan borrowings by approximately 39 and 40 basis points, respectively. The impact of the swaps on the weighted average interest rate of the Company’s floor plan borrowings during the three and six months ended June 30, 2011, was insignificant.

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Document and Entity Information	6 Months Ended
	Jun. 30, 2012	Jul. 22, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	PENSKE AUTOMOTIVE GROUP, INC.
Entity Central Index Key	0001019849
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		90,266,664

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Commitments and Contingent Liabilities

6 Months Ended

Jun. 30, 2012

Commitments and Contingent Liabilities [Abstract]

Commitments and Contingent Liabilities

9. Commitments and Contingent Liabilities

The Company is involved in litigation which may relate to claims brought by governmental authorities, issues with customers, and employment related matters, including class action claims and purported class action claims. As of June 30, 2012, the Company is not party to any legal proceedings, including class action lawsuits, that individually or in the aggregate, are reasonably expected to have a material adverse effect on the Company’s results of operations, financial condition or cash flows. However, the results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material adverse effect on the Company’s results of operations, financial condition or cash flows.

The Company has historically structured its operations so as to minimize ownership of real property. As a result, the Company leases or subleases substantially all of its facilities. These leases are generally for a period between five and 20 years, and are typically structured to include renewal options at the Company’s election. Pursuant to the leases for some of the Company’s larger facilities, the Company is required to comply with specified financial ratios, including a “rent coverage” ratio and a debt to EBITDA ratio, each as defined. For these leases, non-compliance with the ratios may require the Company to post collateral in the form of a letter of credit. A breach of the other lease covenants gives rise to certain remedies by the landlord, the most severe of which include the termination of the applicable lease and acceleration of the total rent payments due under the lease. As of June 30, 2012, the Company was in compliance with all covenants under these leases.

The Company has sold a number of dealerships to third parties and, as a condition to certain of those sales, remains liable for the lease payments relating to the properties on which those businesses operate in the event of non-payment by the buyer. The Company is also party to lease agreements on properties that it no longer uses in its retail operations that it has sublet to third parties. The Company relies on subtenants to pay the rent and maintain the property at these locations. In the event the subtenant does not perform as expected, the Company may not be able to recover amounts owed to it and the Company could be required to fulfill these obligations.

The Company holds a 9.0% limited partnership interest in PTL. During 2012, PTL has refinanced a significant amount of its indebtedness. As part of that refinancing, the Company and the other PTL partners created a new company (“Holdings”), which, together with General Electric Capital Corporation (“GECC”), co-issued $700,000 of 3.8% senior unsecured notes due 2019 to certain investors through an offering pursuant to Rule 144A of the Securities Act of 1933, as amended (the “Holdings Bonds”). A wholly-owned subsidiary of Holdings contributed $700,000 derived from the net proceeds from the offering of the Holdings Bonds and a portion of its cash on hand to PTL in exchange for a 21.5% limited partner interest in PTL. PTL used the $700,000 of funds to reduce its outstanding debt owed to GECC. GECC agreed to be a co-obligor of the Holdings Bonds in order to achieve lower interest rates on the Holdings Bonds.

Additional capital contributions from the members may be required to fund interest and principal payments on the Holdings Bonds. In addition, the Company has agreed to indemnify GECC for 9.0% of any principal or interest that GECC is required to pay as co-obligor, and pay GECC an annual fee of approximately $950 for acting as co-obligor. The maximum amount of the Company’s potential obligations to GECC under this agreement are 9% of the required principal repayment due in 2019 (which is expected to be $63,100) and 9% of interest payments under the Holdings Bonds, plus fees and default interest, if any.

The Company has $18,997 of letters of credit outstanding as of June 30, 2012, and has posted $13,699 of surety bonds in the ordinary course of business.

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Consolidated Condensed Statements of Income (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Revenue:
Total revenues	$ 3,372,479	$ 2,829,986	$ 6,605,222	$ 5,568,119
Cost of sales:
Total cost of sales	2,859,075	2,374,026	5,586,644	4,674,698
Gross profit	513,404	455,960	1,018,578	893,421
Selling, general and administrative expenses	409,452	374,325	806,799	728,349
Depreciation	13,651	11,926	26,976	23,705
Operating income	90,301	69,709	184,803	141,367
Floor plan interest expense	(9,971)	(6,921)	(19,620)	(13,780)
Other interest expense	(11,575)	(10,451)	(23,785)	(21,736)
Debt discount amortization				(1,718)
Equity in earnings of affiliates	8,168	7,882	12,578	7,904
Income from continuing operations before income taxes	76,923	60,219	153,976	112,037
Income taxes	(26,854)	(20,505)	(53,744)	(36,043)
Income from continuing operations	50,069	39,714	100,232	75,994
Income (Loss) from discontinued operations, net of tax	(457)	345	(3,614)	(1,938)
Net Income	49,612	40,059	96,618	74,056
Less: Income attributable to non-controlling interests	520	499	708	569
Net income attributable to Penske Automotive Group common stockholders	49,092	39,560	95,910	73,487
Basic earnings per share attributable to Penske Automotive Group common stockholders:
Continuing operations	$ 0.55	$ 0.42	$ 1.10	$ 0.82
Discontinued operations	$ (0.01)	$ 0.00	$ (0.04)	$ (0.02)
Net income attributable to Penske Automotive Group common stockholders	$ 0.54	$ 0.43	$ 1.06	$ 0.79
Shares used in determining basic earnings per share	90,305	92,514	90,363	92,444
Diluted earnings per share attributable to Penske Automotive Group common stockholders:
Continuing operations	$ 0.55	$ 0.42	$ 1.10	$ 0.82
Discontinued operations	$ (0.01)	$ 0.00	$ (0.04)	$ (0.02)
Net income attributable to Penske Automotive Group common stockholders	$ 0.54	$ 0.43	$ 1.06	$ 0.79
Shares used in determining diluted earnings per share	90,337	92,570	90,395	92,514
Amounts attributable to Penske Automotive Group common stockholders:
Income from continuing operations	50,069	39,714	100,232	75,994
Less: Income attributable to non-controlling interests	520	499	708	569
Income from continuing operations, net of tax	49,549	39,215	99,524	75,425
Income (Loss) from discontinued operations, net of tax	(457)	345	(3,614)	(1,938)
Net income attributable to Penske Automotive Group common stockholders	49,092	39,560	95,910	73,487
New vehicle
Revenue:
Total revenues	1,729,167	1,399,456	3,303,367	2,778,015
Cost of sales:
Total cost of sales	1,590,303	1,280,297	3,032,731	2,549,647
Used vehicle
Revenue:
Total revenues	964,511	855,598	1,931,147	1,643,604
Cost of sales:
Total cost of sales	890,411	784,366	1,778,942	1,507,605
Finance and insurance, net
Revenue:
Total revenues	82,682	69,004	162,486	135,349
Service and parts
Revenue:
Total revenues	368,797	339,636	737,090	679,688
Cost of sales:
Total cost of sales	152,846	145,038	308,678	290,963
Fleet and wholesale vehicle
Revenue:
Total revenues	227,322	166,292	471,132	331,463
Cost of sales:
Total cost of sales	$ 225,515	$ 164,325	$ 466,293	$ 326,483

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Business Combinations

6 Months Ended

Jun. 30, 2012

Business Combinations [Abstract]

Business Combinations

3. Business Combinations

The Company acquired sixteen and three franchises during the six months ended June 30, 2012 and 2011, respectively, in its retail operations. The Company’s financial statements include the results of operations of the acquired dealerships from the date of acquisition. The fair value of the assets acquired and liabilities assumed have been recorded in the Company’s consolidated condensed financial statements, and may be subject to adjustment pending completion of final valuation. A summary of the aggregate consideration paid and the aggregate amounts of the assets acquired and liabilities assumed for the six months ended June 30, 2012 and 2011 follows:

	June 30,
	2012			2011
Accounts receivable	$	17,025		$	953
Inventory		80,766			7,923
Property and equipment		32,599			1,671
Goodwill		33,884			7,038
Franchise Value		23,426			—
Other assets		—			628
Current liabilities		(49,362	)		(2,491	)
Non-current liabilities		(26,816	)		—
Total consideration		111,522			15,722
Seller financed/assumed debt		—			(1,711	)
Cash used in dealership acquisitions	$	111,522		$	14,011

The following unaudited consolidated pro forma results of operations of the Company for the three and six months ended June 30, 2012 and 2011 give effect to acquisitions consummated during 2012 and 2011 as if they had occurred on January 1, 2011:

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(amounts in millions except per share data)
Revenues	$	3,373	$	2,984	$	6,621	$	5,879
Income from continuing operations		50		41		100		80
Net income		49		41		96		78
Income from continuing operations per diluted common share	$	0.55	$	0.44	$	1.10	$	0.86
Net income per diluted common share	$	0.54	$	0.44	$	1.06	$	0.84

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Inventories

6 Months Ended

Jun. 30, 2012

Inventories [Abstract]

Inventories

2. Inventories

Inventories consisted of the following:

	June 30,		December 31,
	2012		2011
New vehicles	$	1,234,036	$	1,051,120
Used vehicles		513,331		441,655
Parts, accessories and other		83,474		79,793
Total inventories	$	1,830,841	$	1,572,568

The Company receives credits from certain vehicle manufacturers that reduce cost of sales when the vehicles are sold. Such credits amounted to $15,326 and $14,474 during the six months ended June 30, 2012 and 2011, respectively.

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Interim Financial Statements (Tables)

6 Months Ended

Jun. 30, 2012

Interim Financial Statements [Abstract]

Combined financial information regarding entities accounted for as discontinued operations

	Three Months Ended June 30,					Six Months Ended June 30,
	2012			2011		2012			2011
Revenues	$	43,542		$	132,377	$	99,029		$	274,742
Pre-tax income (loss)		(760	)		19		(12,188	)		(4,795	)
Gain on disposal		—			695		10,160			1,765

Balance Sheet information regarding entities accounted for as discontinued operations

	June 30,		December 31,
	2012		2011
Inventories	$	27,053	$	48,203
Other assets		12,006		32,919
Total assets	$	39,059	$	81,122
Floor plan notes payable (including non-trade)	$	27,294	$	44,869
Other liabilities		6,855		10,951
Total liabilities	$	34,149	$	55,820

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Equity

6 Months Ended

Jun. 30, 2012

Equity [Abstract]

Equity

10. Equity

Share Repurchase

During the six months ended June 30, 2012, the Company repurchased 350,000 shares of its outstanding common stock for $8,522, or an average of $24.35 per share, under a program approved by the Company’s Board of Directors. During the second quarter of 2012, the Company acquired an additional 55,631 shares of its common stock for $1,307, or an average of $23.49 per share, from employees in connection with vesting of employee restricted stock awards.

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Earnings Per Share

6 Months Ended

Jun. 30, 2012

Earnings Per Share [Abstract]

Earnings Per Share

6. Earnings Per Share

Basic earnings per share is computed using net income attributable to Penske Automotive Group common stockholders and the number of weighted average shares of voting common stock outstanding, including outstanding unvested restricted stock awards which contain rights to non-forfeitable dividends. Diluted earnings per share is computed using net income attributable to Penske Automotive Group common stockholders and the number of weighted average shares of voting common stock outstanding, adjusted for any dilutive effects. A reconciliation of the number of shares used in the calculation of basic and diluted earnings per share for the three and six months ended June 30, 2012 and 2011 follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2012		2011		2012		2011
Weighted average number of common shares outstanding		90,305		92,514		90,363		92,444
Effect of non-participatory equity compensation		32		56		32		70
Weighted average number of common shares outstanding, including effect of dilutive securities		90,337		92,570		90,395		92,514

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Intangible Assets

6 Months Ended

Jun. 30, 2012

Intangible Assets [Abstract]

Intangible Assets

4. Intangible Assets

Following is a summary of the changes in the carrying amount of goodwill and franchise value during the six months ended June 30, 2012:

	Goodwill		Franchise Value
Balance, January 1, 2012	$	903,721	$	228,460
Additions		33,854		23,426
Foreign currency translation		3,021		927
Balance, June 30, 2012	$	940,596	$	252,813

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Floor Plan Notes Payable - Trade and Non-trade

6 Months Ended

Jun. 30, 2012

Floor Plan Notes Payable - Trade and Non-trade [Abstract]

Floor Plan Notes Payable - Trade and Non-trade

5. Floor Plan Notes Payable — Trade and Non-trade

The Company finances substantially all of its new and a portion of its used vehicle inventories under revolving floor plan arrangements with various lenders, including the captive finance companies associated with automotive manufacturers. In the U.S., substantially all of our floor plan arrangements are due on demand; however, the Company has not historically been required to repay floor plan advances prior to the sale of the vehicles that have been financed. The Company typically makes monthly interest payments on the amount financed. Outside of the U.S., substantially all of the floor plan arrangements are payable on demand or have an original maturity of 90 days or less and the Company is generally required to repay floor plan advances at the earlier of the sale of the vehicles that have been financed or the stated maturity.

The floor plan agreements grant a security interest in substantially all of the assets of the Company’s dealership subsidiaries, and in the U.S. are guaranteed by the Company. Interest rates under the floor plan arrangements are variable and increase or decrease based on changes in the prime rate, defined London Interbank Offered Rate (“LIBOR”), the Finance House Bank Rate, or the Euro Interbank Offer Rate. The Company classifies floor plan notes payable to a party other than the manufacturer of a particular new vehicle, and all floor plan notes payable relating to pre-owned vehicles, as floor plan notes payable — non-trade on its consolidated condensed balance sheets and classifies related cash flows as a financing activity on its consolidated condensed statements of cash flows.

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Long-Term Debt

6 Months Ended

Jun. 30, 2012

Long-Term Debt [Abstract]

Long-Term Debt

7. Long-Term Debt

Long-term debt consisted of the following:

	June 30,			December 31,
	2012			2011
U.S. credit agreement — revolving credit line	$	114,000		$	132,000
U.S. credit agreement — term loan		127,000			127,000
U.K. credit agreement — revolving credit line		42,401			59,060
U.K. credit agreement — term loan		42,401			—
U.K. credit agreement — overdraft line of credit		—			13,333
7.75% senior subordinated notes due 2016		375,000			375,000
3.5% senior subordinated convertible notes due 2026, net of debt discount		25,546			63,324
Mortgage facilities		74,131			75,684
Other		6,263			4,790
Total long-term debt		806,742			850,191
Less: current portion		(13,139	)		(3,414	)
Net long-term debt	$	793,603		$	846,777

U.S. Credit Agreement

The Company is party to a credit agreement with Mercedes-Benz Financial Services USA LLC and Toyota Motor Credit Corporation, as amended (the “U.S. Credit Agreement”), which provides for up to $375,000 in revolving loans for working capital, acquisitions, capital expenditures, investments and other general corporate purposes, a non-amortizing term loan with a remaining balance of $127,000, and for an additional $10,000 of availability for letters of credit, through September 2014. The revolving loans bear interest at a defined LIBOR plus 2.50%, subject to an incremental 1.00% for uncollateralized borrowings in excess of a defined borrowing base. The term loan, which bears interest at defined LIBOR plus 2.50%, may be prepaid at any time, but then may not be re-borrowed.

The U.S. Credit Agreement is fully and unconditionally guaranteed on a joint and several basis by the Company’s domestic subsidiaries and contains a number of significant covenants that, among other things, restrict the Company’s ability to dispose of assets, incur additional indebtedness, repay other indebtedness, pay dividends, create liens on assets, make investments or acquisitions and engage in mergers or consolidations. The Company is also required to comply with specified financial and other tests and ratios, each as defined in the U.S. Credit Agreement including: a ratio of current assets to current liabilities, a fixed charge coverage ratio, a ratio of debt to stockholders’ equity and a ratio of debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”). A breach of these requirements would give rise to certain remedies under the agreement, the most severe of which is the termination of the agreement and acceleration of the amounts owed. As of June 30, 2012, the Company was in compliance with all covenants under the U.S. Credit Agreement.

The U.S. Credit Agreement also contains typical events of default, including change of control, non-payment of obligations and cross-defaults to the Company’s other material indebtedness. Substantially all of the Company’s domestic assets are subject to security interests granted to lenders under the U.S. Credit Agreement. As of June 30, 2012, $127,000 of term loans, $500 of letters of credit and $114,000 of revolver borrowings were outstanding under the U.S. Credit Agreement.

U.K. Credit Agreement

The Company’s subsidiaries in the U.K. (the “U.K. subsidiaries”) are party to a £100,000 revolving credit agreement with the Royal Bank of Scotland plc (RBS) and BMW Financial Services (GB) Limited, and an additional £10,000 demand overdraft line of credit with RBS (collectively, the “U.K. credit agreement”) to be used for working capital, acquisitions, capital expenditures, investments and general corporate purposes through November 2015. The revolving loans bear interest between defined LIBOR plus 1.35% and defined LIBOR plus 3.0% and the demand overdraft line of credit bears interest at the Bank of England Base Rate plus 1.75%. As of June 30, 2012, outstanding loans under the U.K. credit agreement amounted to £27,000 ($42,401).

The U.K. Credit Agreement is fully and unconditionally guaranteed on a joint and several basis by our U.K. subsidiaries, and contains a number of significant covenants that, among other things, restrict the ability of our U.K. subsidiaries to pay dividends, dispose of assets, incur additional indebtedness, repay other indebtedness, create liens on assets, make investments or acquisitions and engage in mergers or consolidations. In addition, our U.K. subsidiaries are required to comply with defined ratios and tests, including: a ratio of earnings before interest, taxes, amortization, and rental payments (“EBITAR”) to interest plus rental payments, a measurement of maximum capital expenditures, and a debt to EBITDA ratio. A breach of these requirements would give rise to certain remedies under the agreement, the most severe of which is the termination of the agreement and acceleration of any amounts owed. As of June 30, 2012, the Company’s U.K. subsidiaries were in compliance with all covenants under the U.K. credit agreement.

The U.K. credit agreement also contains typical events of default, including change of control and non-payment of obligations and cross-defaults to other material indebtedness of our U.K. subsidiaries. Substantially all of the Company’s U.K. subsidiaries’ assets are subject to security interests granted to lenders under the U.K. credit agreement.

In January 2012, the Company’s U.K. subsidiaries entered into a separate agreement with RBS, as agent for National Westminster Bank plc, providing for a £30,000 term loan which was used for working capital and an acquisition. The term loan is repayable in £1,500 quarterly installments through 2015 with a final payment of £7,500 due December 31, 2015. The term loan bears interest between 2.675% and 4.325%, depending on the U.K. subsidiaries’ ratio of net borrowings to earnings before interest, taxes, depreciation and amortization (as defined). As of June 30, 2012, the amount outstanding under the U.K. term loan was £27,000 ($42,401).

7.75% Senior Subordinated Notes

In December 2006, the Company issued $375,000 aggregate principal amount of 7.75% senior subordinated notes (the “7.75% Notes”) due 2016. The 7.75% Notes are unsecured senior subordinated notes and are subordinate to all existing and future senior debt, including debt under the Company’s credit agreements, mortgages and floor plan indebtedness. The 7.75% Notes are guaranteed by substantially all of the Company’s wholly-owned domestic subsidiaries on an unsecured senior subordinated basis. Those guarantees are full and unconditional and joint and several. The Company can redeem all or some of the 7.75% Notes at its option at specified redemption prices (currently 103.875% of the principal amount of the notes). Upon certain sales of assets or specific kinds of changes of control the Company is required to make an offer to purchase the 7.75% Notes. The 7.75% Notes also contain customary negative covenants and events of default. As of June 30, 2012, the Company was in compliance with all negative covenants and there were no events of default.

Senior Subordinated Convertible Notes

On May 25, 2012, the Company provided notice to holders of the Notes that the Company was exercising the Company’s right to redeem the Notes at a price of 100% of the principal amount outstanding plus accrued and unpaid interest to, but excluding June 25, 2012. In lieu of surrendering the notes for redemption, Note holders could elect to convert the Notes at any time prior to the close of business on June 21, 2012 based on a conversion rate of 42.7796 shares of the Company’s common stock per $1,000 principal amount of the Convertible Notes (which is equal to a conversion price of approximately $23.38 per share).

Upon conversion of the Convertible Notes, for each $1,000 Note, a holder was entitled to receive an amount in cash, equal to the lesser of (i) $1,000 or (ii) the conversion value, determined in the manner set forth in the indenture covering the Convertible Notes. To the extent the conversion value exceeded $1,000, the Company was required to also deliver, cash, common stock or a combination of cash and common stock with respect to the value in excess of $1,000.

Holders of $25,546 outstanding principal amount of Convertible Notes elected to convert their Notes. The Company settled the principal and interest due on the remaining $37,778 on June 25, 2012. In July, the Company paid the converting holders the conversion balance due of $24,909 in cash. Following this payment, the Company had fulfilled all of its obligations under the Convertible Notes.

Mortgage Facilities

The Company is party to several mortgages which bear interest at defined rates and require monthly principal and interest payments. These mortgage facilities also contain typical events of default, including non-payment of obligations, cross-defaults to the Company’s other material indebtedness, certain change of control events, and the loss or sale of certain franchises operated at the properties. Substantially all of the buildings and improvements on the properties financed pursuant to the mortgage facilities are subject to security interests granted to the lender. As of June 30, 2012, the Company owed $74,131 of principal under our mortgage facilities.

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Inventories (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Inventories Net
Total inventories	$ 1,830,841	$ 1,572,568
New vehicle [Member]
Inventories Net
Total inventories	1,234,036	1,051,120
Used vehicle [Member]
Inventories Net
Total inventories	513,331	441,655
Parts accessories and other [Member]
Inventories Net
Total inventories	$ 83,474	$ 79,793

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Consolidating Condensed Financial Information (Details 2) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Net cash from continuing operating activities	$ 204,186	$ 41,661
Investing activities:
Purchase of equipment and improvements	(57,092)	(51,435)
Dealership acquisitions net, including repayment of sellers' floor plan notes payable of $37,779 and $5,862, respectively	(111,522)	(14,011)
Other	(3,653)	2,865
Net cash from continuing investing activities	(172,267)	(62,581)
Financing activities:
Repurchase of 3.5% senior subordinated convertible notes	(37,778)	(87,278)
Net borrowings (repayments) of other long-term debt	(6,427)	13,602
Net borrowings (repayments) of floor plan notes payable-non-trade	32,799	70,084
Proceeds from exercises of options, including excess tax benefit		2,698
Repurchases of common stock	(9,829)	(12,413)
Dividends	(18,918)	(6,493)
Net cash from continuing financing activities	(40,153)	(19,800)
Net cash from discontinued operations	16,777	28,196
Net change in cash and cash equivalents	8,543	(12,524)
Cash and cash equivalents, beginning of period	28,676	19,904
Cash and cash equivalents, end of period	37,219	7,380
Penske Automotive Group [Member]
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Net cash from continuing operating activities	56,571	84,594
Investing activities:
Purchase of equipment and improvements	(754)	(1,308)
Net cash from continuing investing activities	(754)	(1,308)
Financing activities:
Repurchase of 3.5% senior subordinated convertible notes	(37,778)	(87,278)
Net borrowings (repayments) of other long-term debt	(18,000)
Net borrowings (repayments) of floor plan notes payable-non-trade	28,708	20,200
Proceeds from exercises of options, including excess tax benefit		2,698
Repurchases of common stock	(9,829)	(12,413)
Dividends	(18,918)	(6,493)
Net cash from continuing financing activities	(55,817)	(83,286)
Guarantor Subsidiaries [Member]
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Net cash from continuing operating activities	8,658	1,030
Investing activities:
Purchase of equipment and improvements	(44,410)	(27,786)
Dealership acquisitions net, including repayment of sellers' floor plan notes payable of $37,779 and $5,862, respectively	(3,416)	(12,331)
Other	(970)
Net cash from continuing investing activities	(48,796)	(40,117)
Financing activities:
Net borrowings (repayments) of other long-term debt	(967)	23,541
Net borrowings (repayments) of floor plan notes payable-non-trade	19,506	(23,492)
Distributions from (to) parent	585	4,245
Net cash from continuing financing activities	19,124	4,294
Net cash from discontinued operations	11,794	20,011
Net change in cash and cash equivalents	(9,220)	(14,782)
Cash and cash equivalents, beginning of period	27,249	16,238
Cash and cash equivalents, end of period	18,029	1,456
Non-Guarantor Subsidiaries [Member]
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Net cash from continuing operating activities	138,957	(43,963)
Investing activities:
Purchase of equipment and improvements	(11,928)	(22,341)
Dealership acquisitions net, including repayment of sellers' floor plan notes payable of $37,779 and $5,862, respectively	(108,106)	(1,680)
Other	(2,683)	2,865
Net cash from continuing investing activities	(122,717)	(21,156)
Financing activities:
Net borrowings (repayments) of other long-term debt	12,540	(9,939)
Net borrowings (repayments) of floor plan notes payable-non-trade	(15,415)	73,376
Distributions from (to) parent	(585)	(4,245)
Net cash from continuing financing activities	(3,460)	59,192
Net cash from discontinued operations	4,983	8,185
Net change in cash and cash equivalents	17,763	2,258
Cash and cash equivalents, beginning of period	1,427	3,666
Cash and cash equivalents, end of period	$ 19,190	$ 5,924

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Consolidating Condensed Financial Information

6 Months Ended

Jun. 30, 2012

Consolidating Condensed Financial Information [Abstract]

Consolidating Condensed Financial Information

12. Consolidating Condensed Financial Information

The following tables include condensed consolidating financial information as of June 30, 2012 and December 31, 2011 and for the three and six month periods ended June 30, 2012 and 2011 for Penske Automotive Group, Inc. (as the issuer of the 7.75% Notes), guarantor subsidiaries and non-guarantor subsidiaries (primarily representing foreign entities). 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, 2012

	Total Company		Eliminations			Penske Automotive Group		Guarantor Subsidiaries		Non-Guarantor Subsidiaries
	(In thousands)
Cash and cash equivalents	$	37,219	$	—		$	—	$	18,029	$	19,190
Accounts receivable, net		464,424		(324,158	)		324,158		261,705		202,719
Inventories		1,830,841		—			—		1,063,722		767,119
Other current assets		91,963		—			4,248		41,075		46,640
Assets held for sale		39,059		—			—		12,966		26,093
Total current assets		2,463,506		(324,158	)		328,406		1,397,497		1,061,761
Property and equipment, net		925,054		—			4,843		576,715		343,496
Intangible assets		1,193,409		—			—		705,851		487,558
Equity method investments		296,627		—			247,401		—		49,226
Other long-term assets		14,269		(1,384,066	)		1,394,431		2,205		1,699
Total assets	$	4,892,865	$	(1,708,224	)	$	1,975,081	$	2,682,268	$	1,943,740
Floor plan notes payable	$	1,158,252	$	—		$	—	$	664,954	$	493,298
Floor plan notes payable — non-trade		724,687		—			119,600		355,127		249,960
Accounts payable		310,686		—			2,224		105,852		202,610
Accrued expenses		258,726		(324,158	)		466		154,353		428,065
Current portion of long-term debt		13,139		—			—		3,717		9,422
Liabilities held for sale		34,149		—			—		9,551		24,598
Total current liabilities		2,499,639		(324,158	)		122,290		1,293,554		1,407,953
Long-term debt		793,603		(40,683	)		641,546		75,791		116,949
Deferred tax liabilities		223,485		—			—		196,834		26,651
Other long-term liabilities		164,893		—			—		94,720		70,173
Total liabilities		3,681,620		(364,841	)		763,836		1,660,899		1,621,726
Total equity		1,211,245		(1,343,383	)		1,211,245		1,021,369		322,014
Total liabilities and equity	$	4,892,865	$	(1,708,224	)	$	1,975,081	$	2,682,268	$	1,943,740

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

Three Months Ended June 30, 2012

	Total Company			Eliminations			Penske Automotive Group			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
	(In thousands)
Revenues	$	3,372,479		$	—		$	—		$	2,011,105		$	1,361,374
Cost of sales		2,859,075			—			—			1,689,639			1,169,436
Gross profit		513,404			—			—			321,466			191,938
Selling, general and administrative expenses		409,452			—			4,740			248,711			156,001
Depreciation		13,651			—			246			7,475			5,930
Operating income (loss)		90,301			—			(4,986	)		65,280			30,007
Floor plan interest expense		(9,971	)		—			(2,254	)		(4,199	)		(3,518	)
Other interest expense		(11,575	)		—			(7,079	)		(603	)		(3,893	)
Equity in earnings of affiliates		8,168						6,994			(40	)		1,214
Equity in earnings of subsidiaries		—			(83,728	)		83,728			—			—
Income (loss) from continuing operations before income taxes		76,923			(83,728	)		76,403			60,438			23,810
Income taxes		(26,854	)		29,429			(26,854	)		(23,231	)		(6,198	)
Income (loss) from continuing operations		50,069			(54,299	)		49,549			37,207			17,612
(Loss) income from discontinued operations, net of tax		(457	)		457			(457	)		(392	)		(65	)
Net income (loss)		49,612			(53,842	)		49,092			36,815			17,547
Less: Income attributable to the non-controlling interests		520			—			—			—			520
Net income (loss) attributable to Penske Automotive Group common stockholders		49,092			(53,842	)		49,092			36,815			17,027
Other comprehensive income (loss), net of tax		(10,896	)		—			534			(15	)		(11,415	)
Comprehensive income attributable to Penske Automotive Group common stockholders	$	38,196		$	(53,842	)	$	49,626		$	36,800		$	5,612

CONDENSED CONSOLIDATING STATEMENT OF INCOME

Three Months Ended June 30, 2011

	Total Company			Eliminations			Penske Automotive Group			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
	(In thousands)
Revenues	$	2,829,986		$	—		$	—		$	1,645,845		$	1,184,141
Cost of sales		2,374,026			—			—			1,359,571			1,014,455
Gross profit		455,960			—			—			286,274			169,686
Selling, general and administrative expenses		374,325			—			4,790			232,576			136,959
Depreciation		11,926			—			257			6,572			5,097
Operating income (loss)		69,709			—			(5,047	)		47,126			27,630
Floor plan interest expense		(6,921	)		—			(329	)		(3,348	)		(3,244	)
Other interest expense		(10,451	)		—			(5,818	)		(598	)		(4,035	)
Equity in earnings (losses) of affiliates		7,882			—			6,121			—			1,761
Equity in earnings of subsidiaries		—			(64,793	)		64,793			—			—
Income (loss) from continuing operations before income taxes		60,219			(64,793	)		59,720			43,180			22,112
Income taxes		(20,505	)		22,247			(20,505	)		(15,851	)		(6,396	)
Income (loss) from continuing operations		39,714			(42,546	)		39,215			27,329			15,716
(Loss) income from discontinued operations, net of tax		345			(345	)		345			380			(35	)
Net income (loss)		40,059			(42,891	)		39,560			27,709			15,681
Less: Income attributable to the non-controlling interests		499			—			—			—			499
Net income (loss) attributable to Penske Automotive Group common stockholders		39,560			(42,891	)		39,560			27,709			15,182
Other comprehensive income (loss), net of tax		(1,477	)		—			(318	)		(3,996	)		2,837
Comprehensive income attributable to Penske Automotive Group common stockholders	$	38,083		$	(42,891	)	$	39,242		$	23,713		$	18,019

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	$	6,605,222		$	—		$	—		$	3,844,225		$	2,760,997
Cost of sales		5,586,644			—			—			3,226,744			2,359,900
Gross profit		1,018,578			—			—			617,481			401,097
Selling, general and administrative expenses		806,799			—			9,335			487,120			310,344
Depreciation		26,976			—			608			14,597			11,771
Operating income (loss)		184,803			—			(9,943	)		115,764			78,982
Floor plan interest expense		(19,620	)		—			(4,452	)		(7,989	)		(7,179	)
Other interest expense		(23,785	)		—			(14,642	)		(1,513	)		(7,630	)
Equity in earnings (losses) of affiliates		12,578			—			10,754			(40	)		1,864
Equity in earnings of subsidiaries		—			(171,551	)		171,551			—			—
Income (loss) from continuing operations before income taxes		153,976			(171,551	)		153,268			106,222			66,037
Income taxes		(53,744	)		60,155			(53,744	)		(43,778	)		(16,377	)
Income (loss) from continuing operations		100,232			(111,396	)		99,524			62,444			49,660
(Loss) income from discontinued operations, net of tax		(3,614	)		3,614			(3,614	)		(1,997	)		(1,617	)
Net income (loss)		96,618			(107,782	)		95,910			60,447			48,043
Less: Income attributable to the non-controlling interests		708			—			—			—			708
Net income (loss) attributable to Penske Automotive Group common stockholders		95,910			(107,782	)		95,910			60,447			47,335
Other comprehensive income (loss), net of tax		(195	)		—			1,543			(249	)		(1,489	)
Comprehensive income attributable to Penske Automotive Group common stockholders	$	95,715		$	(107,782	)	$	97,453		$	60,198		$	45,846

CONDENSED CONSOLIDATING STATEMENT OF INCOME

Six Months Ended June 30, 2011

	Total Company			Eliminations			Penske Automotive Group			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
	(In thousands)
Revenues	$	5,568,119		$	—		$	—		$	3,197,904		$	2,370,215
Cost of sales		4,674,698			—			—			2,653,800			2,020,898
Gross profit		893,421			—			—			544,104			349,317
Selling, general and administrative expenses		728,349			—			9,739			445,788			272,822
Depreciation		23,705			—			542			12,795			10,368
Operating income (loss)		141,367			—			(10,281	)		85,521			66,127
Floor plan interest expense		(13,780	)		—			(462	)		(7,220	)		(6,098	)
Other interest expense		(21,736	)		—			(12,234	)		(1,249	)		(8,253	)
Debt discount amortization		(1,718	)		—			(1,718	)		—			—
Equity in earnings (losses) of affiliates		7,904			—			7,352			—			552
Equity in earnings of subsidiaries		—			(128,811	)		128,811			—			—
Income (loss) from continuing operations before income taxes		112,037			(128,811	)		111,468			77,052			52,328
Income taxes		(36,043	)		41,651			(36,043	)		(26,785	)		(14,866	)
Income (loss) from continuing operations		75,994			(87,160	)		75,425			50,267			37,462
(Loss) income from discontinued operations, net of tax		(1,938	)		1,938			(1,938	)		(1,597	)		(341	)
Net income (loss)		74,056			(85,222	)		73,487			48,670			37,121
Less: Income attributable to the non-controlling interests		569			—			—			—			569
Net income (loss) attributable to Penske Automotive Group common stockholders		73,487			(85,222	)		73,487			48,670			36,552
Other comprehensive income (loss), net of tax		15,045			—			(981	)		(3,714	)		19,740
Comprehensive income attributable to Penske Automotive Group common stockholders	$	88,532		$	(85,222	)	$	72,506		$	44,956		$	56,292

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	$	204,186		$	56,571		$	8,658		$	138,957
Investing activities:
Purchase of equipment and improvements		(57,092	)		(754	)		(44,410	)		(11,928	)
Dealership acquisitions, net		(111,522	)					(3,416	)		(108,106	)
Other		(3,653	)		—			(970	)		(2,683	)
Net cash from continuing investing activities		(172,267	)		(754	)		(48,796	)		(122,717	)
Financing activities:
Repurchase of 3.5% senior subordinated convertible notes		(37,778	)		(37,778	)
Net borrowings (repayments) of other long-term debt		(6,427	)		(18,000	)		(967	)		12,540
Net borrowings (repayments) of floor plan notes payable — non-trade		32,799			28,708			19,506			(15,415	)
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		(40,153	)		(55,817	)		19,124			(3,460	)
Net cash from discontinued operations		16,777			—			11,794			4,983
Net change in cash and cash equivalents		8,543			—			(9,220	)		17,763
Cash and cash equivalents, beginning of period		28,676			—			27,249			1,427
Cash and cash equivalents, end of period	$	37,219		$	—		$	18,029		$	19,190

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Six Months Ended June 30, 2011

				Penske Automotive
	Total						Guarantor			Non-Guarantor
	Company			Group			Subsidiaries			Subsidiaries
	(In thousands)
Net cash from continuing operating activities	$	41,661		$	84,594		$	1,030		$	(43,963	)
Investing activities:
Purchase of equipment and improvements		(51,435	)		(1,308	)		(27,786	)		(22,341	)
Dealership acquisitions, net		(14,011	)		—			(12,331	)		(1,680	)
Other		2,865			—			—			2,865
Net cash from continuing investing activities		(62,581	)		(1,308	)		(40,117	)		(21,156	)
Financing activities:
Repurchase of 3.5% senior subordinated convertible notes		(87,278	)		(87,278	)		—			—
Net borrowings (repayments) of other long-term debt		13,602			—			23,541			(9,939	)
Net borrowings (repayments) of floor plan notes payable — non-trade		70,084			20,200			(23,492	)		73,376
Proceeds from exercises of options, including excess tax benefit		2,698			2,698			—			—
Repurchase of common stock		(12,413	)		(12,413	)		—			—
Dividends		(6,493	)		(6,493	)		—			—
Distributions from (to) parent		—			—			4,245			(4,245	)
Net cash from continuing financing activities		(19,800	)		(83,286	)		4,294			59,192
Net cash from discontinued operations		28,196			—			20,011			8,185
Net change in cash and cash equivalents		(12,524	)		—			(14,782	)		2,258
Cash and cash equivalents, beginning of period		19,904			—			16,238			3,666
Cash and cash equivalents, end of period	$	7,380		$	—		$	1,456		$	5,924

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Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2012

Intangible Assets [Abstract]

Summary of the changes in the carrying amount of goodwill and franchise value

	Goodwill		Franchise Value
Balance, January 1, 2012	$	903,721	$	228,460
Additions		33,854		23,426
Foreign currency translation		3,021		927
Balance, June 30, 2012	$	940,596	$	252,813

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Consolidating Condensed Financial Information (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011	Dec. 31, 2010
CONDENSED CONSOLIDATING BALANCE SHEET
Cash and cash equivalents	$ 37,219	$ 28,676	$ 7,380	$ 19,904
Accounts receivable, net	464,424	438,769
Inventories	1,830,841	1,572,568
Other current assets	91,963	80,179
Assets held for sale	39,059	81,122
Total current assets	2,463,506	2,201,314
Property and equipment, net	925,054	856,674
Intangible assets	1,193,409	1,132,181
Equity method investments	296,627	298,640
Other long-term assets	14,269	13,490
Total assets	4,892,865	4,502,299
Floor plan notes payable	1,158,252	977,548
Floor plan notes payable - non-trade	724,687	691,888
Accounts payable	310,686	220,538
Accrued expenses	258,726	201,179
Current portion of long-term debt	13,139	3,414
Liabilities held for sale	34,149	55,820
Total current liabilities	2,499,639	2,150,387
Long-term debt	793,603	846,777
Deferred tax liabilities	223,485	217,902
Other long-term liabilities	164,893	146,820
Total liabilities	3,681,620	3,361,886
Total equity	1,211,245	1,140,413
Total liabilities and equity	4,892,865	4,502,299
Eliminations [Member]
CONDENSED CONSOLIDATING BALANCE SHEET
Accounts receivable, net	(324,158)	(297,782)
Total current assets	(324,158)	(297,782)
Other long-term assets	(1,384,066)	(1,360,808)
Total assets	(1,708,224)	(1,658,590)
Accrued expenses	(324,158)	(297,782)
Total current liabilities	(324,158)	(297,782)
Long-term debt	(40,683)	(38,073)
Total liabilities	(364,841)	(335,855)
Total equity	(1,343,383)	(1,322,735)
Total liabilities and equity	(1,708,224)	(1,658,590)
Penske Automotive Group [Member]
CONDENSED CONSOLIDATING BALANCE SHEET
Accounts receivable, net	324,158	305,386
Other current assets	4,248	2,306
Total current assets	328,406	307,692
Property and equipment, net	4,843	6,730
Equity method investments	247,401	246,658
Other long-term assets	1,394,431	1,369,182
Total assets	1,975,081	1,930,262
Floor plan notes payable - non-trade	119,600	90,892
Accounts payable	2,224	1,633
Accrued expenses	466
Total current liabilities	122,290	92,525
Long-term debt	641,546	697,324
Total liabilities	763,836	789,849
Total equity	1,211,245	1,140,413
Total liabilities and equity	1,975,081	1,930,262
Guarantor Subsidiaries [Member]
CONDENSED CONSOLIDATING BALANCE SHEET
Cash and cash equivalents	18,029	27,249	1,456	16,238
Accounts receivable, net	261,705	281,689
Inventories	1,063,722	894,246
Other current assets	41,075	40,321
Assets held for sale	12,966	36,642
Total current assets	1,397,497	1,280,147
Property and equipment, net	576,715	547,731
Intangible assets	705,851	699,453
Other long-term assets	2,205	3,381
Total assets	2,682,268	2,530,712
Floor plan notes payable	664,954	560,999
Floor plan notes payable - non-trade	355,127	335,621
Accounts payable	105,852	112,805
Accrued expenses	154,353	99,092
Current portion of long-term debt	3,717	3,414
Liabilities held for sale	9,551	17,818
Total current liabilities	1,293,554	1,129,749
Long-term debt	75,791	77,060
Deferred tax liabilities	196,834	198,348
Other long-term liabilities	94,720	92,613
Total liabilities	1,660,899	1,497,770
Total equity	1,021,369	1,032,942
Total liabilities and equity	2,682,268	2,530,712
Non-Guarantor Subsidiaries [Member]
CONDENSED CONSOLIDATING BALANCE SHEET
Cash and cash equivalents	19,190	1,427	5,924	3,666
Accounts receivable, net	202,719	149,476
Inventories	767,119	678,322
Other current assets	46,640	37,552
Assets held for sale	26,093	44,480
Total current assets	1,061,761	911,257
Property and equipment, net	343,496	302,213
Intangible assets	487,558	432,728
Equity method investments	49,226	51,982
Other long-term assets	1,699	1,735
Total assets	1,943,740	1,699,915
Floor plan notes payable	493,298	416,549
Floor plan notes payable - non-trade	249,960	265,375
Accounts payable	202,610	106,100
Accrued expenses	428,065	399,869
Current portion of long-term debt	9,422
Liabilities held for sale	24,958	38,002
Total current liabilities	1,408,313	1,225,895
Long-term debt	116,949	110,466
Deferred tax liabilities	26,651	19,554
Other long-term liabilities	70,173	54,207
Total liabilities	1,622,086	1,410,122
Total equity	322,014	289,793
Total liabilities and equity	$ 1,944,100	$ 1,699,915

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Earnings Per Share (Details) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Reconciliation of number of shares used in calculation of basic and diluted earning per share
Weighted average number of common shares outstanding	90,305	92,514	90,363	92,444
Effect of non-participatory equity compensation	32	56	32	70
Weighted average number of common shares outstanding, including effect of dilutive securities	90,337	92,570	90,395	92,514

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Consolidated Condensed Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Consolidated Condensed Statements of Comprehensive Income [Abstract]
Net Income	$ 49,612	$ 40,059	$ 96,618	$ 74,056
Other Comprehensive Income:
Foreign currency translation adjustment	(11,415)	2,882	(1,489)	19,734
Unrealized gain (loss) on interest rate swaps:
Unrealized gain(loss) arising during the period, net of tax benefit(provision) of $701, $2,614, $1,524, and $2,476, respectively	(1,072)	(3,996)	(2,329)	(3,784)
Reclassification adjustment for loss included in floor plan interest expense, net of tax provision of $692, $0, $1,361, and $46, respectively	1,057		2,080	70
Unrealized gain (loss) on interest rate swaps, net of tax	(15)	(3,996)	(249)	(3,714)
Other adjustments to Comprehensive Income, net	534	(363)	1,543	(975)
Other Comprehensive Income (Loss), Net of Taxes	(10,896)	(1,477)	(195)	15,045
Comprehensive Income	38,716	38,582	96,423	89,101
Less: Net income attributable to the non-controlling interests	520	499	708	569
Comprehensive income attributable to Penske Automotive Group common stockholders	$ 38,196	$ 38,083	$ 95,715	$ 88,532

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Interim Financial Statements

6 Months Ended

Jun. 30, 2012

Interim Financial Statements [Abstract]

Interim Financial Statements

1. Interim Financial Statements

Business Overview

Penske Automotive Group, Inc. (the “Company”) is the second largest automotive retailer headquartered in the U.S. as measured by total revenue. As of June 30, 2012, the Company operated 338 retail franchises, of which 170 franchises are located in the U.S. and 168 franchises are located outside of the U.S. The franchises outside the U.S. are located primarily in the U.K. Each of the Company’s dealerships offers a wide selection of new and used vehicles for sale. In addition to selling new and used vehicles, the Company generates higher-margin revenue at each of its dealerships through maintenance and repair services and the sale and placement of higher-margin products, such as third-party finance and insurance products, third-party extended service contracts and replacement and aftermarket automotive products. The Company also holds a 9.0% limited partnership interest in Penske Truck Leasing Co., L.P. (“PTL”), a leading transportation services provider.

During the six months ended June 30, 2012, the Company acquired the Agnew Group in the United Kingdom, representing fourteen franchises, and two other franchises. The Company also was awarded seven franchises representing seven different brands, including Mini of Marin (California) and Nissan and Infiniti San Francisco. The Company disposed of six franchises representing six different brands, including Jaguar and Land Rover in Gatwick (U.K.) and Scottsdale Lexus.

In the second quarter of 2012, the Company acquired a 7% interest in NPA Holdco, LLC, an auctioneer of powersport vehicles, for $3,000. During the second quarter of 2012, Transportation Resource Partners, a related party, acquired a controlling interest in this company on the same financial terms as our investment.

Basis of Presentation

The following unaudited consolidated condensed financial statements of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in the Company’s annual financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the SEC rules and regulations. The information presented as of June 30, 2012 and December 31, 2011 and for the three and six month periods ended June 30, 2012 and 2011 is unaudited, but includes all adjustments which the management of the Company believes to be necessary for the fair presentation of results for the periods presented. The consolidated condensed financial statements for prior periods have been revised for entities which have been treated as discontinued operations through June 30, 2012, and the results for interim periods are not necessarily indicative of results to be expected for the year. These consolidated condensed financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2011, which are included as part of the Company’s Annual Report on Form 10-K.

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2011-04, “Fair Value Measurements and Disclosures (Topic 820) — Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” ASU No. 2011-04 clarifies the application of existing fair value measurement and disclosure requirements, changes certain principles related to measuring fair value, and requires additional disclosures about fair value measurements. ASU No. 2011-04 is effective for periods beginning after December 15, 2011. The Company adopted the standard on January 1, 2012. Adoption of ASU No. 2011-04 did not affect the Company’s consolidated financial position, results of operations, or cash flows.

In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income (Topic 220) — Presentation of Comprehensive Income”, which requires the presentation of components of other comprehensive income with the components of net income. The Company adopted the standard on January 1, 2012. Adoption of ASU No. 2011-05 did not affect the Company’s consolidated financial position, results of operations, or cash flows.

In December 2011, the FASB issued ASU No. 2011-11, “Balance Sheet (Topic 210) — Disclosures about Offsetting Assets and Liabilities.” ASU No. 2011-11 will require disclosure of the effect or potential effect of offsetting arrangements on the Company’s financial position as well as enhanced disclosure of the rights of setoff associated with the Company’s recognized assets and recognized liabilities. ASU No. 2011-11 is effective for periods beginning on or after January 1, 2013. Since these amended principles require only additional disclosures concerning offsetting and related arrangements, adoption will not affect the Company’s consolidated financial position, results of operations, or cash flows.

Discontinued Operations

The Company accounts for dispositions in its retail operations as discontinued operations when it is evident that the operations and cash flows of a franchise being disposed will be eliminated from on-going operations and that the Company will not have any significant continuing involvement in its operations.

In evaluating whether the cash flows of a dealership in its Retail reportable segment will be eliminated from ongoing operations, the Company considers whether it is likely that customers will migrate to similar franchises that it owns in the same geographic market. The Company’s consideration includes an evaluation of the brands sold at other dealerships it operates in the market and their proximity to the disposed dealership. When the Company disposes of franchises, it typically does not have continuing brand representation in that market. If the franchise being disposed of is located in a complex of Company owned dealerships, the Company does not treat the disposition as a discontinued operation if it believes that the cash flows previously generated by the disposed franchise will be replaced by expanded operations of the remaining or replacement franchises.

Combined financial information regarding entities accounted for as discontinued operations follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	2012			2011		2012			2011
Revenues	$	43,542		$	132,377	$	99,029		$	274,742
Pre-tax income (loss)		(760	)		19		(12,188	)		(4,795	)
Gain on disposal		—			695		10,160			1,765

	June 30,		December 31,
	2012		2011
Inventories	$	27,053	$	48,203
Other assets		12,006		32,919
Total assets	$	39,059	$	81,122
Floor plan notes payable (including non-trade)	$	27,294	$	44,869
Other liabilities		6,855		10,951
Total liabilities	$	34,149	$	55,820

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The accounts requiring the use of significant estimates include accounts receivable, inventories, income taxes, intangible assets and certain reserves.

Fair Value of Financial Instruments

Financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, debt, floor plan notes payable, and interest rate swaps used to hedge future cash flows. Other than our subordinated notes, the carrying amount of all significant financial instruments approximates fair value due either to length of maturity, the existence of variable interest rates that approximate prevailing market rates, or as a result of mark to market accounting. The Company’s 7.75% senior subordinated notes due in 2016 had a carrying value of $375,000 and a fair value of $388,125 as of June 30, 2012. The calculation of the senior subordinated notes fair value was based on quoted, level one market data.

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2012

Earnings Per Share [Abstract]

Reconciliation of number of shares used in calculation of basic and diluted earning per share

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2012		2011		2012		2011
Weighted average number of common shares outstanding		90,305		92,514		90,363		92,444
Effect of non-participatory equity compensation		32		56		32		70
Weighted average number of common shares outstanding, including effect of dilutive securities		90,337		92,570		90,395		92,514

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Business Combinations (Details Textual)	6 Months Ended
	Jun. 30, 2012 Franchise	Jun. 30, 2011 Franchise
Business Combinations (Textual) [Abstract]
Number of franchises acquired	16	3

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Segment Information

6 Months Ended

Jun. 30, 2012

Segment Information [Abstract]

Segment Information

11. Segment Information

The Company’s operations are organized by management into operating segments by line of business and geography. The Company has determined it has two reportable segments as defined in generally accepted accounting principles for segment reporting, including: (i) Retail, consisting of the Company’s automotive retail operations and (ii) PAG Investments, consisting of the Company’s investments in businesses other than automotive retail operations. The Retail reportable segment includes all automotive dealerships and all departments relevant to the operation of the dealerships and the retail automotive joint ventures. The individual dealership operations included in the Retail reportable segment have been grouped into four geographic operating segments, which have been aggregated into one reportable segment as their operations (A) have similar economic characteristics (all are automotive dealerships having similar margins), (B) offer similar products and services (all sell new and used vehicles, service, parts and third-party finance and insurance products), (C) have similar target markets and customers (generally individuals) and (D) have similar distribution and marketing practices (all distribute products and services through dealership facilities that market to customers in similar fashions).

Three Months Ended June 30

	Retail		PAG Investments		Total
Revenues
2012	$	3,372,479	$	—	$	3,372,479
2011		2,829,986		—		2,829,986
Segment income
2012		69,722		7,201		76,923
2011		53,951		6,268		60,219

Six Months Ended June 30

	Retail		PAG Investments		Total
Revenues
2012	$	6,605,222	$	—	$	6,605,222
2011		5,568,119		—		5,568,119
Segment income
2012		142,941		11,035		153,976
2011		104,645		7,392		112,037