Penske Automotive (PAG) 8-K Penske Automotive Reports Record First Quarter Results

FOR IMMEDIATE RELEASE

PENSKE AUTOMOTIVE REPORTS RECORD FIRST QUARTER RESULTS

• Total Retail Unit Sales Increase 18.1%

• Revenues Increase 17.9% to $3.2 Billion

• Same-store Retail Revenue Increases 7.5%

• Income from Continuing Operations Increases 37.3% to $50.0 Million

• EPS from Continuing Operations Increases 41.0% to $0.55

BLOOMFIELD HILLS, MI,April 25, 2012 –Penske Automotive Group, Inc. (NYSE:PAG), an international automotive retailer, announced today the most profitable first quarter in Company history. First quarter 2012 income from continuing operations attributable to common shareholders increased 37.3% to $50.0 million and related earnings per share increased 41.0% to $0.55 per share. This compares to income from continuing operations attributable to common shareholders of $36.4 million, or $0.39 per share in the same period last year.

First quarter revenue increased by 17.9% to $3.2 billion, driven by an improvement in total retail unit sales of 18.1% and growth in the Company’s used-to-new ratio to .89 to 1 from .78 to 1 in the same period last year. Same-store new and used retail unit sales increased 9.5% and total same-store retail revenue increased 7.5% with each area of the business generating growth.

Total gross profit improved 15.3% to $506.6 million. The Company’s selling, general and administrative expenses as a percentage of gross profit leveraged 220 basis points in the first quarter to 78.7% contributing to a 31.3% improvement in operating income to $94.6 million. Operating income as a percent of revenue was 2.9%, representing an improvement of 30 basis points.

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Highlights of the First Quarter

• Total retail unit sales increased 18.1% to 81,472

• +12.3% in the United States; +30.7% Internationally

• New unit retail sales +11.5%

• Used unit retail sales +26.6%

• Same-store retail revenue increased 7.5%

• New +5.1%; Used +14.0%; Finance & Insurance +14.2%; Service and Parts +0.7%

• +8.5% in the United States; +5.9% Internationally

• Average Gross Profit Per Unit

• New $3,064; Gross Margin 8.4%, up 50 basis points

• Used $2,043; Gross Margin 8.1%, down 10 basis points

• Finance & Insurance $981

Chairman Roger Penske said, “I am extremely pleased with our team’s performance. Our results continue to demonstrate the strength and diversity of our business in both the U.S. and international markets. We produced another outstanding quarter of profitability while generating same-store revenue increases in each area of our business, including same-store retail revenue growth of 7.5%. New and used vehicle margins were strong, and our service and parts operations gross margin added 60 basis points to 57.7%.”

Penske added, “In light of perceptions surrounding our international markets, I am particularly pleased with the performance of these businesses. During the first quarter, our international-based same-store retail revenue increased 5.9%.”

Securities Repurchase Activity

During the first quarter the Company acquired 350,000 shares of its common stock for an aggregate purchase price of $8.5 million, or an average price of $24.35 per share. The Company currently has remaining authorization from its Board of Directors to repurchase up to $98.3 million of its outstanding common stock, debt or convertible debt. Securities may be acquired from time to time either through open market purchases, negotiated transactions or other means.

Conference Call

Penske Automotive will host a conference call discussing financial results relating to the first quarter of 2012 onApril 25, 2012, at2:30 p.m. Eastern Daylight Time. To listen to the conference call, participants must dial(800) 230-1085 [International, please dial (612) 234-9960]. The call will also be simultaneously broadcast over the Internet through the Investors Relations section of the Penske Automotive Group website atwww.penskeautomotive.com.

About Penske Automotive
Penske Automotive Group, Inc., headquartered in Bloomfield Hills, Michigan, operates 335 retail automotive franchises, representing 40 different brands and 29 collision repair centers. Penske Automotive, which sells new and previously owned vehicles, finance and insurance products and replacement parts, and offers maintenance and repair services on all brands it represents, has 168 franchises in 17 states and Puerto Rico and 167 franchises located outside the United States, primarily in theUnited Kingdom. Penske Automotive is a member of the Fortune 500 and Russell 2000 and has approximately 16,000 employees.

Non-GAAP Financial Measures

This release contains certain non-GAAP financial measures as defined under SEC rules, such as earnings before interest, taxes, depreciation and amortization (“EBITDA”). The Company has reconciled these measures to the most directly comparable GAAP measures in the release. The Company believes that these widely accepted measures of operating profitability improve the transparency of the Company’s disclosures. These non-GAAP financial measures are not substitutes for GAAP financial results, and should only be considered in conjunction with the Company’s financial information that is presented in accordance with GAAP.

Caution Concerning Forward Looking Statements
Statements in this press release may involve forward-looking statements, including forward-looking statements regarding Penske Automotive Group, Inc.’s future sales potential and outlook. Actual results may vary materially because of risks and uncertainties that are difficult to predict. These risks and uncertainties include, among others: economic conditions generally, conditions in the credit markets and changes in interest rates, adverse conditions affecting a particular manufacturer, including the adverse impact to the vehicle and parts supply chain due to natural disasters or other disruptions that interrupt the supply of vehicles or parts to us; changes in consumer credit availability, the outcome of legal and administrative matters, and other factors over which management has limited control. These forward-looking statements should be evaluated together with additional information about Penske Automotive’s business, markets, conditions and other uncertainties, which could affect Penske Automotive’s future performance. These risks and uncertainties are addressed in Penske Automotive’s Form 10-K for the year ended December 31, 2011, and its other filings with the Securities and Exchange Commission (“SEC”). This press release speaks only as of its date, and Penske Automotive disclaims any duty to update the information herein.

Find a vehicle:http://www.penskecars.com
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Inquiries should contact:

David K. Jones
Executive Vice President and
Chief Financial Officer
Penske Automotive Group, Inc.
248-648-2800
dave.jones@penskeautomotive.com Anthony R. Pordon
Executive Vice President Investor Relations
and Corporate Development
Penske Automotive Group, Inc.
248-648-2540
tpordon@penskeautomotive.com

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PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Condensed Statements of Income
(Amounts In Thousands, Except Per Share Data)
(Unaudited)

	Three Months Ended
	March 31,
	2012			2011
Revenues:
New Vehicle	$	1,578,319		$	1,385,556
Used Vehicle		969,732			791,734
Finance and Insurance, Net		79,894			66,463
Service and Parts		369,727			341,542
Fleet and Wholesale Vehicle		244,616			165,741
Total Revenues		3,242,288			2,751,036
Cost of Sales:
New Vehicle		1,446,281			1,275,804
Used Vehicle		891,327			726,619
Service and Parts		156,525			146,649
Fleet and Wholesale Vehicle		241,562			162,719
Total Cost of Sales		2,735,695			2,311,791
Gross Profit		506,593			439,245
SG&A Expenses		398,637			355,391
Depreciation		13,349			11,798
Operating Income		94,607			72,056
Floor Plan Interest Expense		(9,725	)		(6,925	)
Other Interest Expense		(12,210	)		(11,285	)
Debt Discount Amortization		—			(1,718	)
Equity in Earnings of Affiliates		4,410			22
Income from Continuing Operations Before Income Taxes		77,082			52,150
Income Taxes		(26,902	)		(15,670	)
Income from Continuing Operations		50,180			36,480
Loss from Discontinued Operations, Net of Tax		(3,174	)		(2,483	)
Net Income		47,006			33,997
Income Attributable to Non-Controlling Interests		(188	)		(70	)
Net Income Attributable to Common Shareholders		46,818		$	33,927
Income from Continuing Operations Per Share	$	0.55		$	0.39
Income Per Share	$	0.52		$	0.37
Weighted Average Shares Outstanding		90,338			92,554
Amounts Attributable to Common Shareholders:
Reported Income from Continuing Operations	$	50,180		$	36,480
Income Attributable to Non-Controlling Interests		(188	)		(70	)
Income from Continuing Operations, net of tax		49,992			36,410
Loss from Discontinued Operations, net of tax		(3,174	)		(2,483	)
Net Income		46,818		$	33,927

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PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Condensed Balance Sheets
(Amounts In Thousands)
(Unaudited)

	March 31,		December 31,
	2012		2011
Assets
	$
Cash and Cash Equivalents		31,768	$	28,490
Accounts Receivable, Net		492,653		440,273
Inventories		1,770,235		1,581,586
Other Current Assets		91,869		80,269
Assets Held for Sale		29,075		67,777
Total Current Assets		2,415,600		2,198,395
Property and Equipment, Net		915,081		857,587
Intangibles		1,201,566		1,134,179
Other Long-Term Assets		302,518		312,138
Total Assets	$	4,834,765	$	4,502,299
Liabilities and Equity
Floor Plan Notes Payable	$	1,114,070	$	977,547
Floor Plan Notes Payable – Non-Trade		701,242		700,572
Accounts Payable		297,705		220,708
Accrued Expenses		258,455		201,579
Current Portion Long-Term Debt		13,264		3,414
Liabilities Held for Sale		29,928		45,852
Total Current Liabilities		2,414,664		2,149,672
Long-Term Debt		848,630		846,777
Other Long-Term Liabilities		389,274		365,437
Total Liabilities		3,652,568		3,361,886
Equity		1,182,197		1,140,413
Total Liabilities and Equity	$	4,834,765	$	4,502,299

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PENSKE AUTOMOTIVE GROUP, INC.
Selected Data
(Unaudited)

	Three Months Ended
	March 31,						%
	2012			2011			Change
Total Retail Units:
New Retail		43,099			38,668			11.5	%
Used Retail		38,373			30,299			26.6	%
Total Retail		81,472			68,967			18.1	%
Fleet		3,476			1,480			134.9	%
Wholesale		17,944			14,492			23.8	%
Total		102,892			84,939			21.1	%
Same-Store Retail Units:
New Same-Store Retail		39,437			38,368			2.8	%
Used Same-Store Retail		35,556			30,117			18.1	%
Total Same-Store Retail		74,993			68,485			9.5	%
Same-Store Retail Revenue: (Amounts in thousands)
New Vehicles	$	1,447,577		$	1,376,770			5.1	%
Used Vehicles		897,709			787,310			14.0	%
Finance and Insurance, Net		75,434			66,027			14.2	%
Service and Parts		342,000			339,466			0.7	%
Total Same-Store Retail	$	2,762,720		$	2,569,573			7.5	%
Revenue Mix:
New Vehicles		48.7	%		50.4	%
Used Vehicles		29.9	%		28.8	%
Finance and Insurance, Net		2.5	%		2.4	%
Service and Parts		11.4	%		12.4	%
Fleet and Wholesale		7.5	%		6.0	%
Average Revenue per Vehicle Retailed:
New Vehicles	$	36,621		$	35,832			2.2	%
Used Vehicles		25,271			26,131			(3.3	%)
Gross Profit per Vehicle Retailed:
New Vehicles	$	3,064		$	2,838			7.9	%
Used Vehicles		2,043			2,149			(4.9	%)
Finance and Insurance		981			964			1.8	%
Operating items as a percentage of revenue:
New Vehicle Gross Profit		8.4	%		7.9	%
Used Vehicle Gross Profit		8.1	%		8.2	%
Service and Parts Gross Profit		57.7	%		57.1	%
Total Gross Profit		15.6	%		16.0	%
Selling, General and Admin. Expenses		12.3	%		12.9	%
Operating Income		2.9	%		2.6	%
Inc. From Cont. Ops. Before Inc. Taxes		2.4	%		1.9	%
Operating items as a percentage of total gross profit:
Selling, General and Administrative Expenses		78.7	%		80.9	%
Operating Income		18.7	%		16.4	%

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PENSKE AUTOMOTIVE GROUP, INC.
Selected Data (Continued)
(Unaudited)

	Three Months Ended
	March 31,
	2012			2011
Brand Revenue Mix:
Premium:
BMW		24	%		23	%
Audi		13	%		12	%
Mercedes-Benz		10	%		9	%
Lexus		4	%		5	%
Land Rover		5	%		5	%
Porsche		4	%		4	%
Ferrari / Maserati		3	%		3	%
Acura		1	%		2	%
Other		4	%		4	%
Total Premium		68	%		67	%
Foreign:
Toyota		11	%		11	%
Honda		11	%		12	%
Nissan		1	%		2	%
Volkswagen		2	%		2	%
Other		3	%		2	%
Total Foreign		28	%		29	%
Domestic Big 3
General Motors / Chrysler / Ford		4	%		4	%
Revenue Mix:
U.S.		61	%		62	%
International		39	%		38	%
Other (Amounts in Thousands):
EBITDA *	$	102,641		$	76,951
Rent Expense		44,129			42,174
Floorplan Credits		4,888			5,202

* See the following Non-GAAP reconciliation tables

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PENSKE AUTOMOTIVE GROUP, INC.
Selected Data (Continued)
(Unaudited)

Reconciliation of 2012 and 2011 net income to EBITDA:

	Three Months Ended
	March 31,
(Amounts in Thousands)	2012		2011
Net Income	$	47,006	$	33,997
Depreciation		13,349		11,798
Other Interest Expense		12,210		11,285
Debt Discount Amortization		—		1,718
Income Taxes		26,902		15,670
Loss from Discontinued Operations, net		3,174		2,483
EBITDA	$	102,641	$	76,951

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