Equity Method Investees

12 Months Ended

Dec. 31, 2019

Equity Method Investees

Equity Method Investees

4. Equity Method Investees

As of December 31, 2019, we had investments in the following companies that are accounted for under the equity method: the Nix Group (50%) operating automotive dealerships in Germany, Ibericar Keldinich SL (50%) operating automotive dealerships in Spain, the Nicole Group (49%) operating automotive dealerships in Japan, and Penske Commercial Leasing Australia (28%) which rents heavy duty commercial vehicles in Australia. In 2019, we sold a majority interest in dealerships in Edison, New Jersey representing the Bentley, Ferrari, and Maserati brands and now maintain a 20% ownership interest in this joint venture.

In September 2017, we sold an additional 5% interest in our Penske Commercial Leasing Australia joint venture to PTS and continue to account for this investment under the equity method under our current 28% ownership.

In May 2017, we sold our 7% interest in National Powersport Auctions. In December 2017, we sold our 31% interest in Penske Vehicle Services to PTS. The equity earnings associated with these investments are included within continuing operations under the caption “Equity in earnings of affiliates” for the year ended December 31, 2017.

We also have a 28.9% ownership interest in PTS, a leading provider of transportation and supply chain services. Our investment in PTS, which is accounted for under the equity method, amounted to $1,323.2 million and $1,237.4 million at December 31, 2019 and 2018, respectively.

The net book value of our equity method investments was $1,399.0 million and $1,305.2 million as of December 31, 2019 and 2018, respectively. We recorded $147.5 million, $134.8 million, and $107.6 million during the years ended December 31, 2019, 2018, and 2017, respectively, on our statements of income under the caption “Equity in earnings of affiliates” related to earnings from our equity method investments.

The combined results of operations and financial position of our equity method investees as of December 31 for each of the years presented are summarized as follows:

Condensed income statement information:

	Year Ended December 31,
	2019		2018		2017
Revenues	$	9,682.2	$	9,013.7	$	7,680.8
Gross profit		2,007.0		2,011.7		1,792.4
Net income		509.8		458.7		416.1

Condensed balance sheet information:

	December 31,
	2019		2018
Current assets	$	1,481.9	$	1,467.5
Noncurrent assets		14,767.3		13,360.8
Total assets	$	16,249.2	$	14,828.3
Current liabilities	$	1,281.8	$	1,880.1
Noncurrent liabilities		11,679.1		9,976.1
Equity		3,288.3		2,972.1
Total liabilities and equity	$	16,249.2	$	14,828.3