Related Party Transactions

12 Months Ended

Dec. 31, 2025

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

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. During 2025, 2024, and 2023, Penske Corporation and its affiliates billed us $6.8 million, $6.0 million, and $5.3 million, respectively, and we billed Penske Corporation and its affiliates $1.3 million, $1.4 million, and $1.3 million, respectively, for such services. As of December 31, 2025, and 2024, we had $52 thousand and $51 thousand of receivables from, and $0.9 million and $0.6 million of payables to, Penske Corporation and its affiliates, respectively. During 2025, 2024, and 2023, rent expense incurred on leases with Penske Corporation and its affiliates was $7.9 million, $7.2 million, and $6.7 million, respectively. As of December 31, 2025, and 2024, we had operating lease liabilities with Penske Corporation and its affiliates of $61.1 million and $67.4 million, respectively. We also received $16.0 million in 2025 from the sale of fixed assets to PTS.

Our officers, directors, and their affiliates periodically purchase, lease, or sell vehicles and parts from us or PTS at fair market value. This includes purchases and sales of trucks, logistics, and other services and parts as between our subsidiaries and those of PTS (principally consisting of purchases of $36.0 million of trucks and parts by PTS from our PTG subsidiaries and purchases of $1.3 million of used trucks and towing services by PTG from PTS during 2025).

PTS is owned 41.1% by Penske Corporation, 28.9% by us, and 30.0% by Mitsui. The PTS partnership agreement, among other things, provides us with specified partner distribution and governance rights and restricts our ability to transfer our interest. PTS has an eleven-member Advisory Board. We have the right to appoint one Advisory Board member and the right to an observer for any Board committees. Mr. Kurnick, our President, serves as our representative. We have the right to pro rata quarterly distributions equal to at least 50% of PTS' consolidated net income and have minority rights which require our and/or Mitsui’s consent for certain actions taken by PTS as specified in the partnership agreement.

We may transfer our directly owned interests with the unanimous consent of the other partners, or if we provide the remaining partners with a right of first offer to acquire our interests, except that we may transfer up to 9.02% of our interest to Penske Corporation without complying with the right of first offer to the remaining partner. We and Penske Corporation have previously agreed that (1) in the event of any transfer by Penske Corporation of their partnership interests to a third party, we will be entitled to “tag-along” by transferring a pro rata amount of our partnership interests on similar terms and conditions, and (2) Penske Corporation is entitled to a right of first refusal in the event of any transfer of our partnership interests, subject to the terms of the partnership agreement. Additionally, PTS has agreed to indemnify the general partner for any actions in connection with managing PTS, except those taken in bad faith or in violation of the partnership agreement. The partnership agreement allows each of the partners to give notice to require PTS to begin to effect an initial public offering of equity securities, subject to certain limitations, as soon as practicable after the first anniversary of the initial notice.

In 2025, 2024, and 2023, we received $98.7 million, $98.4 million, and $168.8 million, respectively, from PTS in pro rata cash dividends. In 2014, we formed a venture with PTS, Penske Commercial Leasing Australia. This venture combines PTS' fleet operations expertise with our market knowledge of commercial vehicles to rent heavy-duty commercial vehicles in Australia. This venture is accounted for as an equity method investment as discussed in Note 4.

Acquisition of Penske Motor Group, LLC ("PMG")

On November 19, 2025, we acquired all of the membership interests of PMG, which owns and operates four retail automotive franchised dealerships in California and Texas. The seller group was owned 5% by an individual minority owner, 25.65% by Penske Automotive Holdings Corp. ("PAHC"), a wholly owned subsidiary of Penske Corporation, and 69.35% by GWOOD 2 LLC ("GWood"), an entity controlled by an affiliate of Greg Penske, the Vice Chair of our Board of Directors. Greg Penske is the son of our Chair and Chief Executive Officer, Roger S. Penske. Roger S. Penske beneficially owns approximately 52% of our common stock and under certain circumstances, has the ability to direct the voting of approximately 73% of our common stock pursuant to the stockholders agreement. Based on this voting control, the ownership interests described above, and the immediate family relationship between Roger S. Penske and Greg Penske, we concluded that the Company and PMG were under common control during all periods presented.

The aggregate purchase price was $519,446,253 (the "Purchase Price"), including $47,696,253 for the net worth (tangible assets and liabilities) of PMG as of the closing date. The Company paid $363,619,353 of the Purchase Price in cash and $155,826,900 pursuant to a 4.50% senior subordinated promissory note (the "Note") issued by Buyer to Seller. The Note is unsecured and was issued on November 19, 2025, and has a three-year term requiring monthly principal and interest payments (subject to the Company's right to prepay the Note in whole or in part at any time at its option without premium or penalty) and customary events of default. We also guaranteed Buyer's obligations under the Note and the Purchase Agreement. At December 31, 2025, the outstanding principal balance of the PMG Note was $151.5 million, and the Company recognized interest expense of $0.8 million related to the PMG Note for the year then ended. The PMG Note is presented within "Other debt" in Note 10.

The Company accounted for the acquisition of PMG as a transaction between entities under common control. As discussed in "Basis of Presentation" in Note 1, the Company's consolidated financial statements and related notes have been retrospectively recast to include the operations of PMG for all periods presented. During 2025, 2024, and 2023 for the PMG dealerships, revenue was $1.45 billion, $1.41 billion, and $1.39 billion, respectively; gross profit was $208.7 million, $203.6 million, and $213.5 million, respectively; net income was $48.3 million, $50.0 million, and $55.6 million, respectively; and the impact on our earnings per share was an increase of $0.73, $0.75, and $0.81, respectively. In accordance with the accounting guidance for transactions between entities under common control, the excess of the purchase price over the historical carrying value of PMG's net assets was recorded as an adjustment to equity within retained earnings.

Joint Venture Relationships

From time to time, we enter into joint venture relationships in the ordinary course of business, pursuant to which we own and operate automotive dealerships together with other investors. We may also provide these dealerships with working capital and other debt financing at costs that are based on our incremental borrowing rate. As of December 31, 2025, our automotive joint venture relationships were as follows:

Location	Dealerships	Ownership Interest
Fairfield, Connecticut	Audi, Mercedes-Benz, Sprinter, Porsche	80.00%	(A)
Greenwich, Connecticut	Mercedes-Benz	80.00%	(A)
Northern Italy	BMW, Ferrari, MINI, Maserati, Porsche, Audi, Jaguar, Land Rover, Volvo, Mercedes-Benz, smart, Lamborghini	95.00%	(A)
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(A) Entity is consolidated in our financial statements.

As noted above, we are party to non-automotive joint ventures representing our investments in PTS (28.9%) and Penske Commercial Leasing Australia (28%) that are accounted for under the equity method, as more fully discussed in Note 4. In June 2025, we sold the remaining 50% interest in our joint venture in Barcelona, Spain.