Penske Automotive (PAG) 10-Q 26 Oct 18 2018 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Oct. 22, 2018
Document and Entity Information
Entity Registrant Name	PENSKE AUTOMOTIVE GROUP, INC.
Entity Central Index Key	1,019,849
Document Type	10-Q
Document Period End Date	Sep. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		84,861,435
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q3

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
ASSETS
Cash and cash equivalents	$ 37.6	$ 45.7
Accounts receivable, net of allowance for doubtful accounts of $5.3 and $5.5	953.4	954.9
Inventories	3,783.4	3,944.1
Other current assets	91.8	81.8
Total current assets	4,866.2	5,026.5
Property and equipment, net	2,178.2	2,108.6
Goodwill	1,692.6	1,660.5
Other indefinite-lived intangible assets	471.9	474
Equity method investments	1,299.7	1,256.6
Other long-term assets	18.3	14.4
Total assets	10,526.9	10,540.6
LIABILITIES AND EQUITY
Floor plan notes payable	2,169.5	2,343.2
Floor plan notes payable - non-trade	1,359	1,418.6
Accounts payable	633.8	641.6
Accrued expenses	570.2	523.5
Current portion of long-term debt	92.7	72.8
Liabilities held for sale	0.7	0.7
Total current liabilities	4,825.9	5,000.4
Long-term debt	1,993.3	2,090.4
Deferred tax liabilities	547.9	481.5
Other long-term liabilities	547.8	540.3
Total liabilities	7,914.9	8,112.6
Commitments and contingent liabilities (Note 9)
Penske Automotive Group stockholders' equity:
Preferred Stock, $0.0001 par value; 100,000 shares authorized; none issued and outstanding
Common Stock
Additional paid-in-capital	487.9	532.3
Retained earnings	2,299.2	2,009.4
Accumulated other comprehensive income (loss)	(203.8)	(146.5)
Total Penske Automotive Group stockholders' equity	2,583.3	2,395.2
Non-controlling interest	28.7	32.8
Total equity	2,612	2,428
Total liabilities and equity	10,526.9	10,540.6
Non-voting Common Stock
Penske Automotive Group stockholders' equity:
Common Stock
Class C Common Stock
Penske Automotive Group stockholders' equity:
Common Stock

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 5.3	$ 5.5
Preferred Stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred Stock, shares authorized	100,000	100,000
Common Stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common Stock, shares authorized	240,000,000	240,000,000
Common Stock, shares issued	84,863,169	85,787,507
Common Stock, shares outstanding	84,863,169	85,787,507
Non-voting Common Stock
Common Stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common Stock, shares authorized	7,125,000	7,125,000
Common Stock, shares issued	0	0
Common Stock, shares outstanding	0	0
Class C Common Stock
Common Stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common Stock, shares authorized	20,000,000	20,000,000
Common Stock, shares issued	0	0
Common Stock, shares outstanding	0	0

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenue:
Total revenues	$ 5,658.6	$ 5,524.4	$ 17,345.8	$ 15,988.9
Cost of sales:
Total cost of sales	4,806	4,701.8	14,739	13,574.7
Gross profit	852.6	822.6	2,606.8	2,414.2
Selling, general and administrative expenses	662.8	646.1	2,001.3	1,869.8
Depreciation	25.9	24.3	77.2	70
Operating income	163.9	152.2	528.3	474.4
Floor plan interest expense	(20.2)	(16.4)	(59)	(45.6)
Other interest expense	(28.3)	(27.8)	(86.7)	(79.2)
Equity in earnings of affiliates	41.7	30.9	95	70.9
Income from continuing operations before income taxes	157.1	138.9	477.6	420.5
Income taxes	(27.1)	(44.7)	(104.7)	(136)
Income from continuing operations	130	94.2	372.9	284.5
Income (loss) from discontinued operations, net of tax	0.1	0.1	0.2	(0.3)
Net income	130.1	94.3	373.1	284.2
Less: (Loss) income attributable to non-controlling interests	(0.1)	(0.1)	0.2	1
Net income attributable to Penske Automotive Group common stockholders	$ 130.2	$ 94.4	$ 372.9	$ 283.2
Basic earnings per share attributable to Penske Automotive Group common stockholders:
Continuing operations (in dollars per share)	$ 1.53	$ 1.10	$ 4.37	$ 3.30
Discontinued operations (in dollars per share)
Net income attributable to Penske Automotive Group common stockholders (in dollars per share)	$ 1.53	$ 1.10	$ 4.37	$ 3.30
Shares used in determining basic earnings per share (in shares)	84.9	85.9	85.2	85.9
Diluted earnings per share attributable to Penske Automotive Group common stockholders:
Continuing operations (in dollars per share)	$ 1.53	$ 1.10	$ 4.37	$ 3.30
Discontinued operations (in dollars per share)
Net income attributable to Penske Automotive Group common stockholders (in dollars per share)	$ 1.53	$ 1.10	$ 4.37	$ 3.30
Shares used in determining diluted earnings per share (in shares)	84.9	86	85.3	85.9
Amounts attributable to Penske Automotive Group common stockholders:
Income from continuing operations	$ 130	$ 94.2	$ 372.9	$ 284.5
Less: (Loss) income attributable to non-controlling interests	(0.1)	(0.1)	0.2	1
Income from continuing operations, net of tax	130.1	94.3	372.7	283.5
Income (loss) from discontinued operations, net of tax	0.1	0.1	0.2	(0.3)
Net income attributable to Penske Automotive Group common stockholders	$ 130.2	$ 94.4	$ 372.9	$ 283.2
Cash dividends per share (in dollars per share)	$ 0.36	$ 0.32	$ 1.05	$ 0.93
Retail Automotive Dealership
Revenue:
Total revenues	$ 5,148.5	$ 5,085.4	$ 15,900	$ 14,882.5
Cost of sales:
Total cost of sales	4,386.3	4,341.2	13,561.5	12,684
Retail Commercial Truck Dealership
Revenue:
Total revenues	385.3	299.6	1,016.5	739.8
Cost of sales:
Total cost of sales	327.5	255.3	859.7	619.1
Commercial Vehicle Distribution and Other
Revenue:
Total revenues	124.8	139.4	429.3	366.6
Cost of sales:
Total cost of sales	$ 92.2	$ 105.3	$ 317.8	$ 271.6

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 130.1	$ 94.3	$ 373.1	$ 284.2
Other comprehensive income:
Foreign currency translation adjustment	(19.6)	31.7	(57.2)	94.1
Other adjustments to comprehensive income, net	2.1	3.6	(1.3)	7.8
Other comprehensive (loss) income, net of tax	(17.5)	35.3	(58.5)	101.9
Comprehensive income	112.6	129.6	314.6	386.1
Less: Comprehensive (loss) income attributable to non-controlling interests	(0.2)	0.6	(1)	3.8
Comprehensive income attributable to Penske Automotive Group common stockholders	$ 112.8	$ 129	$ 315.6	$ 382.3

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Operating Activities:
Net income	$ 373.1	$ 284.2
Adjustments to reconcile net income to net cash from continuing operating activities:
Depreciation	77.2	70
Earnings of equity method investments	(69.5)	(53.1)
(Income) loss from discontinued operations, net of tax	(0.2)	0.3
Deferred income taxes	64.3	204.9
Changes in operating assets and liabilities:
Accounts receivable	6.1	(48.7)
Inventories	205.2	(226.7)
Floor plan notes payable	(165.2)	137.8
Accounts payable and accrued expenses	26.2	98.4
Other	18.7	(0.3)
Net cash provided by continuing operating activities	535.9	466.8
Investing Activities:
Purchase of equipment and improvements	(188.5)	(180.1)
Proceeds from sale of dealerships	58.4	9
Proceeds from sale-leaseback transactions	10.7
Acquisition of additional ownership interest in Penske Truck Leasing		(239.1)
Acquisitions net, including repayment of sellers’ floor plan notes payable of $25.8 and $101.6, respectively	(168.6)	(449.7)
Other	(3.5)	4.3
Net cash used in continuing investing activities	(291.5)	(855.6)
Financing Activities:
Proceeds from borrowings under U.S. credit agreement revolving credit line	1,163	1,621
Repayments under U.S. credit agreement revolving credit line	(1,335)	(1,645)
Issuance of 3.75% senior subordinated notes		300
Net borrowings of other long-term debt	131	74.3
Net (repayments) borrowings of floor plan notes payable — non-trade	(59.6)	155.2
Payment of debt issuance costs		(4)
Repurchases of common stock	(55.8)	(18.5)
Dividends	(89.7)	(80.1)
Other	(6.2)	(5.8)
Net cash (used in) provided by continuing financing activities	(252.3)	397.1
Discontinued operations:
Net cash provided by discontinued operating activities	0.3	0.5
Net cash provided by discontinued investing activities		2.4
Net cash used in discontinued financing activities		(0.2)
Net cash provided by discontinued operations	0.3	2.7
Effect of exchange rate changes on cash and cash equivalents	(0.5)	2.2
Net change in cash and cash equivalents	(8.1)	13.2
Cash and cash equivalents, beginning of period	45.7	24
Cash and cash equivalents, end of period	37.6	37.2
Cash paid (received) for:
Interest	127.4	102.2
Income taxes	36.5	21.3
Seller financed/assumed debt		3.8
Non cash activities:
Deferred consideration	$ 6.8
Consideration transferred through common stock issuance		32.4
Contingent consideration		$ 20

CONSOLIDATED STATEMENTS OF CA_2

CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Repayment of Sellers' Floor Plan Notes Payable Dealership Acquisitions	$ 25.8	$ 101.6

CONSOLIDATED STATEMENT OF EQUIT

CONSOLIDATED STATEMENT OF EQUITY - 9 months ended Sep. 30, 2018 - USD ($) $ in Millions	Total Stockholders' Equity Attributable to Penske Automotive Group	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Non-controlling Interest	Total
Balance at Dec. 31, 2017	$ 2,395.2		$ 532.3	$ 2,009.4	$ (146.5)	$ 32.8	$ 2,428
Balance (in shares) at Dec. 31, 2017		85,787,507
Increase (decrease) in stockholders' equity
Adoption of ASC 606 (Note 1)	6.6			6.6			6.6
Equity compensation	13		13				13
Equity compensation (in shares)		328,286
Repurchases of common stock	(55.8)		(55.8)				(55.8)
Repurchases of common stock (in shares)		(1,252,624)
Dividends	(89.7)			(89.7)			(89.7)
Purchase of subsidiary shares from non-controlling interest	(1.4)		(1.4)			(3.1)	(4.5)
Distributions to non-controlling interest						(0.8)	(0.8)
Foreign currency translation	(56)				(56)	(1.2)	(57.2)
Other	(1.5)		(0.2)		(1.3)	0.8	(0.7)
Net income	372.9			372.9		0.2	373.1
Balance at Sep. 30, 2018	$ 2,583.3		$ 487.9	$ 2,299.2	$ (203.8)	$ 28.7	$ 2,612
Balance (in shares) at Sep. 30, 2018		84,863,169

Interim Financial Statements

Interim Financial Statements	9 Months Ended
	Sep. 30, 2018
Interim Financial Statements.
Interim Financial Statements	PENSKE AUTOMOTIVE GROUP, INC. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited) 1. Interim Financial Statements Business Overview Unless the context otherwise requires, the use of the terms “PAG,” “we,” “us,” and “our” in these Notes to the Consolidated Condensed Financial Statements refers to Penske Automotive Group, Inc. and its consolidated subsidiaries. We are a diversified international transportation services company that operates automotive and commercial truck dealerships principally in the United States, Canada, and Western Europe, and distributes commercial vehicles, diesel engines, gas engines, power systems and related parts and services principally in Australia and New Zealand. Retail Automotive Dealership. We believe we are the second largest automotive retailer headquartered in the U.S. as measured by the $19.8 billion in total retail automotive dealership revenue we generated in 2017. As of September 30, 2018, we operated 342 retail automotive franchises, of which 151 franchises are located in the U.S. and 191 franchises are located outside of the U.S. The franchises outside the U.S. are located primarily in the U.K. In the nine months ended September 30, 2018, we retailed and wholesaled more than 493,000 vehicles. We are diversified geographically, with 54% of our total retail automotive dealership revenues in the nine months ended September 30, 2018 generated in the U.S. and Puerto Rico and 46% generated outside the U.S. We offer over 40 vehicle brands, with 69% of our retail automotive dealership revenue in the nine months ended September 30, 2018 generated from premium brands, such as Audi, BMW, Mercedes-Benz and Porsche. Each of our franchised 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 third-party finance and insurance products, third-party extended service and maintenance contracts and replacement and aftermarket automotive products. We operate our franchised dealerships under franchise agreements with a number of automotive manufacturers and distributors that are subject to certain rights and restrictions typical of the industry. We operate fourteen stand-alone used vehicle dealerships in the U.S. and the U.K. W e acquired CarSense in the U.S. and CarShop in the U.K. in the first quarter of 2017 and acquired The Car People in the U.K. in January 2018. Our CarSense operations in the U.S. consist of five locations operating in the Philadelphia and Pittsburgh, Pennsylvania market areas, including southern New Jersey. Our CarShop operations in the U.K. consist of five retail locations and a vehicle preparation center operating principally throughout Southern England. The Car People operations in the U.K. consist of four retail locations operating across Northern England, which complement CarShop’s Southern England locations. During the nine months ended September 30, 2018, we acquired four retail automotive franchises, were awarded one retail automotive franchise, and disposed of six retail automotive franchises. The four retail automotive franchises acquired are located in Italy and represent the Mercedes-Benz and smart brands. Retail Commercial Truck Dealership. We operate a heavy and medium duty truck dealership group known as Premier Truck Group (“PTG”) with locations in Texas, Oklahoma, Tennessee, Georgia, and Canada. As of September 30, 2018, PTG operated twenty-one locations, including fifteen full-service dealerships and six collision centers, offering primarily Freightliner and Western Star branded trucks. One of these locations was acquired in April 2018 in Canada. PTG also offers a full range of used trucks available for sale as well as service and parts departments, providing a full range of maintenance and repair services. Commercial Vehicle Distribution . We are the exclusive importer and distributor of Western Star heavy-duty trucks (a Daimler brand), MAN heavy and medium duty trucks and buses (a VW Group brand), and Dennis Eagle refuse collection vehicles, together with associated parts, across Australia, New Zealand and portions of the Pacific. This business, known as Penske Commercial Vehicles Australia (“PCV Australia”), distributes commercial vehicles and parts to a network of more than 70 dealership locations, including eight company-owned retail commercial vehicle dealerships. We are also a leading distributor of diesel and gas engines and power systems, principally representing MTU, Detroit Diesel, Allison Transmission and MTU Onsite Energy. This business, known as Penske Power Systems (“PPS”), offers products across the on- and off-highway markets in Australia, New Zealand and portions of the Pacific and supports full parts and aftersales service through a network of branches, field locations and dealers across the region. The on-highway portion of this business complements our PCV Australia distribution business, including integrated operations at retail locations selling PCV brands. Penske Truck Leasing. We hold a 28.9% ownership interest in Penske Truck Leasing Co., L.P. (“PTL”), a leading provider of transportation services and supply chain management. PTL is capable of meeting customers’ needs across the supply chain with a broad product offering that includes full-service truck leasing, truck rental and contract maintenance, along with logistic services such as dedicated contract carriage, distribution center management, transportation management and lead logistics provider. On September 7, 2017, we acquired an additional 5.5% ownership interest in PTL from subsidiaries of GE Capital Global Holdings, LLC (collectively, “GE Capital”). Prior to this acquisition, we held a 23.4% ownership interest in PTL. PTL is currently owned 41.1% by Penske Corporation, 28.9% by us, and 30.0% by Mitsui & Co., Ltd. (“Mitsui”). GE Capital no longer owns any ownership interests in PTL. We account for our investment in PTL under the equity method, and we therefore record our share of PTL’s earnings on our statements of income under the caption “Equity in earnings of affiliates,” which also includes the results of our other equity method investments. Basis of Presentation The accompanying unaudited consolidated condensed financial statements of PAG have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in our annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to the SEC rules and regulations. The information presented as of September 30, 2018 and December 31, 2017 and for the three and nine month periods ended September 30, 2018 and 2017 is unaudited, but includes all adjustments which our management believes to be necessary for the fair presentation of results for the periods presented. 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 our audited financial statements for the year ended December 31, 2017, which are included as part of our Annual Report on Form 10-K. Estimates The preparation of financial statements in conformity with U.S. GAAP 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 Accounting standards define fair value as the price that would be received from selling an asset, or paid to transfer a liability in the principal, or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. Accounting standards establish a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value and also establishes the following three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets or liabilities Level 2 Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted market prices in markets that are not active; or model-derived valuations or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities Our financial instruments consist of cash and cash equivalents, debt, floor plan notes payable, and forward exchange contracts used to hedge future cash flows. Other than our fixed rate debt, 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. Our fixed rate debt consists of amounts outstanding under our senior subordinated notes and mortgage facilities. We estimate the fair value of our senior unsecured notes using quoted prices for the identical liability (Level 2), and we estimate the fair value of our mortgage facilities using a present value technique based on current market interest rates for similar types of financial instruments (Level 2). A summary of our fixed rate debt is as follows: September 30, 2018 December 31, 2017 Carrying Value Fair Value Carrying Value Fair Value 3.75% senior subordinated notes due 2020 $ 297.5 $ 296.8 $ 296.5 $ 301.7 5.75% senior subordinated notes due 2022 546.6 557.5 545.9 562.3 5.375% senior subordinated notes due 2024 297.5 294.2 297.2 300.2 5.50% senior subordinated notes due 2026 494.9 491.4 494.4 505.0 Mortgage facilities 243.0 238.5 235.5 233.4 Assets Held for Sale and Discontinued Operations We had no entities newly classified as held for sale during the nine months ended September 30, 2018 or 2017 that met the criteria to be classified as discontinued operations. The financial information for entities that were classified as discontinued operations prior to adoption of Accounting Standards Update No. 2014-08 are included in “Income (loss) from discontinued operations” in the accompanying consolidated condensed statements of income and “Liabilities held for sale” in the accompanying consolidated condensed balance sheets for all periods presented. Disposals During the nine months ended September 30, 2018, we disposed of six retail automotive franchises. The results of operations for these businesses are included within continuing operations for the three and nine months ended September 30, 2018 and 2017, as these franchises did not meet the criteria to be classified as held for sale and treated as discontinued operations. 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. The U.S. Tax Cuts and Jobs Act (the “Act”) was signed into law on December 22, 2017. The Act modified several provisions of the Internal Revenue Code related to corporations, including a permanent corporate income tax rate reduction from 35% to 21%, effective January 1, 2018. The Act also significantly changed international tax laws for tax years beginning after December 31, 2017 and required a one-time mandatory deemed repatriation of all cumulative post-1986 foreign earnings and profits of a U.S. shareholder’s foreign subsidiaries, which we recognized in 2017, the year of enactment. On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. SAB 118 provides a measurement period that should not extend beyond one year from the Act enactment date for companies to complete such income tax accounting under ASC 740. In accordance with SAB 118, we have now obtained, prepared, and analyzed additional information about facts and circumstances that existed as of the enactment date and computed the U.S. tax impact of the Act. Since the enactment of new tax legislation, the Internal Revenue Service (“IRS”) and state tax authorities have issued news releases, notices, instructions and other forms of guidance to assist taxpayers with implementing the Act. We have also considered the impact of any new information provided by the IRS and state tax authorities in reaching our conclusions. We consider our conclusions to be final and complete. We determined that our final U.S. federal and state tax liability as a result of the transition tax on repatriation resulted in $52.2 million on a deemed repatriation of $946.0 million of foreign earnings and profits. The remeasurement of certain deferred tax assets and liabilities due to the corporate income tax rate reduction provided an income tax benefit of $301.2 million. Changes made to provisional estimates for the tax year ended December 31, 2017 were primarily related to our foreign earnings and profits, foreign tax credits, and partnership outside basis difference related to our investment in Penske Truck Leasing. The following adjustments to our provisional estimates have been recorded to current tax expense or deferred tax expense, as applicable, in the third quarter of 2018: (In millions) Federal and State Changes Due to Repatriation $ 12.5 Other Adjustments (0.9) Total SAB 118 Benefit $ 11.6 As a result of the changes made to the provisional estimates mentioned above, the total benefit recorded as a result of the enactment of the Act increased from $243.4 million to $255.0 million, with the corresponding income tax benefit of $11.6 million recorded in the third quarter of 2018. We have considered and analyzed the applicability of the global intangible low-taxed income (“GILTI”) provisions of the Act beginning in 2018 and its effect on our annualized effective tax rate for 2018. The effect of the GILTI inclusions on the 2018 annualized effective tax rate is not material. We have adopted the method of accounting for GILTI inclusions as a period expense and therefore have not accrued any deferred taxes in relation to this provision in the first nine months of 2018 or in the 2017 consolidated financial statements. Recent Accounting Pronouncements Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” The FASB also issued additional ASUs containing various updates to Topic 606 which are to be adopted along with ASU 2014-09 (collectively, “the new revenue recognition standard,” “ASC 606”). ASC 606 supersedes the revenue recognition requirements in ASC 605, “Revenue Recognition.” In accordance with the new revenue recognition standard, an entity recognizes revenue when it transfers promised goods or services to customers using a five-step model that requires entities to exercise judgment when considering the terms of contracts with customers. For public companies, the new revenue recognition standard is effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within those annual periods. Entities may adopt the new guidance retrospectively to each prior reporting period presented under a full retrospective approach, or as a cumulative-effect adjustment as of the date of adoption under a modified retrospective approach. We adopted ASC 606 on January 1, 2018 using the modified retrospective approach to contracts not completed as of the date of adoption, with no restatement of comparative periods, and a cumulative-effect adjustment to retained earnings recognized as of the date of adoption. As part of the adoption of ASC 606, we performed an assessment of the impact the new revenue recognition standard would have on our consolidated financial statements. Our assessment also considered required changes in internal controls resulting from the adoption of the new revenue recognition standard. Although new controls have been implemented as a result of the adoption, such changes were not deemed material. A summary of the impact of the adoption of ASC 606 on our consolidated financial statements is included below. For our Retail Automotive and Retail Commercial Truck reportable segments, under legacy guidance we recognized revenues at a point in time upon meeting relevant revenue recognition criteria. Under ASC 606, the timing of revenue recognition for our service, parts and collision revenue stream changed, as we concluded that performance obligations for service and collision work are satisfied over time under the new revenue recognition standard. All other revenue streams for these businesses continue to be recognized at a point in time, and our performance obligations and revenue recognition timing and practices are substantially similar to how revenues were recorded under legacy guidance. For our Other reportable segment consisting primarily of our businesses in Australia and New Zealand, Penske Commercial Vehicles Australia and Penske Power Systems, under legacy guidance we recognized revenues for vehicles, engines, parts, and services at a point in time upon meeting relevant revenue recognition criteria. For our long-term power generation contracts at Penske Power Systems, we recognized revenues using the percentage of completion method in accordance with contract milestones. Under ASC 606, the timing of revenue recognition for the service and parts revenue stream for PCV Australia and PPS changed, as we concluded that performance obligations for service work are satisfied over time under the new revenue recognition standard. For revenues previously recognized using the percentage of completion method, these revenues are recognized as performance obligations are satisfied over time, consistent with the timing of recognition under legacy guidance, but are now recognized using an output method, which measures the value to the customer of the goods or services transferred to date relative to the remaining goods or services promised. All other revenue streams for these businesses continue to be recognized at a point in time, and our performance obligations and revenue recognition timing and practices are substantially similar to how revenues were recorded under legacy guidance. See Note 2 “Revenues” for additional disclosures in accordance with the new revenue recognition standard. The adoption of the new revenue recognition standard resulted in a net, after-tax cumulative effect adjustment to retained earnings of approximately $6.6 million as of January 1, 2018. The details of this adjustment are summarized below. Balance at Adjustments Due Balance at December 31, 2017 to ASC 606 January 1, 2018 Assets Accounts receivable $ 954.9 $ 22.4 $ 977.3 Inventories 3,944.1 (13.4) 3,930.7 Liabilities and Equity Accrued expenses $ 523.5 $ 0.1 $ 523.6 Deferred tax liabilities 481.5 2.3 483.8 Retained earnings 2,009.4 6.6 2,016.0 The following tables summarize the impact of the adoption of ASC 606 on our consolidated condensed statement of income and consolidated condensed balance sheet for the three and nine months ended and as of September 30, 2018: For the Three Months Ended September 30, 2018 Statement of Income As Without Adoption Impact of Adoption Reported of ASC 606 of ASC 606 Revenue: Retail automotive dealership $ 5,148.5 $ 5,149.4 $ (0.9) Retail commercial truck dealership 385.3 384.3 1.0 Commercial vehicle distribution and other 124.8 126.2 (1.4) Cost of sales: Retail automotive dealership 4,386.3 4,387.0 (0.7) Retail commercial truck dealership 327.5 327.0 0.5 Commercial vehicle distribution and other 92.2 92.9 (0.7) Gross profit 852.6 853.0 (0.4) Income taxes (27.1) (27.2) (0.1) Net income 130.1 130.4 (0.3) For the Nine Months Ended September 30, 2018 Statement of Income As Without Adoption Impact of Adoption Reported of ASC 606 of ASC 606 Revenue: Retail automotive dealership $ 15,900.0 $ 15,898.2 $ 1.8 Retail commercial truck dealership 1,016.5 1,015.4 1.1 Commercial vehicle distribution and other 429.3 426.9 2.4 Cost of sales: Retail automotive dealership 13,561.5 13,560.4 1.1 Retail commercial truck dealership 859.7 859.1 0.6 Commercial vehicle distribution and other 317.8 316.8 1.0 Gross profit 2,606.8 2,604.2 2.6 Income taxes (104.7) (103.9) 0.8 Net income 373.1 371.3 1.8 September 30, 2018 Balance Sheet As Without Adoption Impact of ASC 606 Reported of ASC 606 Adoption Assets Accounts receivable $ 953.4 $ 925.7 $ 27.7 Inventories 3,783.4 3,799.2 (15.8) Liabilities and Equity Accrued expenses $ 570.2 $ 569.8 $ 0.4 Deferred tax liabilities 547.9 544.9 3.0 Retained earnings 2,299.2 2,290.7 8.5 Accounting for Leases In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” Under this new guidance, a company will now recognize most leases on its balance sheet as lease liabilities with corresponding right-of-use assets. For public companies, this ASU is effective for financial statements issued for annual periods beginning after December 15, 2018, and interim periods within those annual periods, with early adoption permitted. The FASB has since issued further ASUs related to the standard providing additional practical expedients and an optional transition method allowing entities to not recast comparative periods. We intend to adopt this ASU, including all available practical expedients, on January 1, 2019 using the optional transition method. As such, we will recognize the effects of applying the new standard as a cumulative-effect adjustment to retained earnings as of January 1, 2019. We have a significant amount of leases for property and equipment that are classified as operating leases under current lease accounting guidance. The adoption of this ASU will result in a significant increase to our consolidated balance sheets for lease liabilities and right-of-use assets. We believe our current off-balance sheet leasing commitments are reflected in our credit rating. We are also in the process of evaluating and documenting any changes in controls and procedures that may be necessary as part of our implementation of the new standards; however, we do not expect material changes. We will continue to assess the impact that these new standards will have our on our consolidated financial statements throughout the remainder of 2018. Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230) — Classification of Certain Cash Receipts and Cash Payments.” This ASU provides new guidance on eight specific cash flow issues related to how such cash receipts and cash payments should be presented in a statement of cash flows. For public companies, this ASU is effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within those annual periods, with early adoption permitted. The amendments from this update are to be applied retrospectively. We adopted this ASU retrospectively on January 1, 2018. The adoption of this accounting standard update did not have an impact on our consolidated cash flows for the nine months ended September 30, 2018 and September 30, 2017. Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In February 2018, the FASB issued ASU No. 2018-02, “Income Statement — Reporting Comprehensive Income (Topic 220) — Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” This ASU allows for a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the enactment of the U.S. Tax Cuts and Jobs Act (“the Act”). The update also requires entities to disclose whether or not they elected to reclassify the tax effects related to the Act as well as their accounting policy for releasing income tax effects from accumulated other comprehensive income. This ASU is effective for financial statements issued for annual periods beginning after December 15, 2018, and interim periods within those annual periods, with early adoption permitted. We do not intend to adopt the optional guidance of this accounting standard update, as the potential impact on our consolidated financial statements is not material. Fair Value Measurement Disclosure In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.” This ASU eliminates, modifies, and adds certain disclosure requirements on fair value measurements. For public companies, this ASU is effective for financial statements issued for annual periods beginning after December 15, 2019, and interim periods within those annual periods, with early adoption permitted. Entities are permitted to early adopt any eliminated or amended disclosures and delay adoption of the additional disclosure requirements until the effective date. We intend to adopt this ASU on January 1, 2020. We do not expect the adoption of this accounting standard update to have a significant impact on our consolidated financial statements. Accounting for Cloud Computing Arrangements In August 2018, the FASB issued ASU No. 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” Under this new guidance, certain implementation costs incurred in a hosted cloud computing service arrangement will be capitalized in accordance with ASC 350-40. For public companies, this ASU is effective for financial statements issued for annual periods beginning after December 15, 2019, and interim periods within those annual periods, with early adoption permitted. The amendments from this update are to be applied retrospectively or prospectively to all implementation costs incurred after adoption. We intend to adopt this ASU on January 1, 2020. We are currently evaluating the impacts the adoption of this accounting standard update will have on our consolidated financial statements.

Revenues

Revenues	9 Months Ended
	Sep. 30, 2018
Revenues.
Revenues	2. Revenues Automotive and commercial truck dealerships represent the majority of our revenues. New and used vehicle revenues typically include sales to retail customers, to fleet customers, and to leasing companies providing consumer 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 by customers for repair, maintenance and collision services, and the sale of replacement parts and other aftermarket accessories, as well as warranty repairs that are reimbursed directly by various OEMs. Revenues are recognized upon satisfaction of our performance obligations under contracts with our customers and are measured at the amount of consideration we expect to be entitled to in exchange for transferring goods or providing services. A discussion of revenue recognition by reportable segment is included below. Retail Automotive and Retail Commercial Truck Dealership Revenue Recognition Dealership Vehicle Sales. We record revenue for vehicle sales at a point in time when vehicles are delivered, which is when the transfer of title, risks and rewards of ownership and control are considered passed to the customer. The amount of consideration we receive for vehicle sales is stated within the executed contract with our customer and is reduced by any noncash consideration representing the fair value of trade-in vehicles, if applicable. Payment is typically due and collected within 30 days subsequent to transfer of control of the vehicle. Dealership Parts and Service Sales. We record revenue for vehicle service and collision work over time as work is completed, and when parts are delivered to our customers. For service and parts revenues recorded over time, we utilize a method that considers total costs incurred to date and the applicable margin in relation to total expected efforts to complete our performance obligation in order to determine the appropriate amount of revenue to recognize over time. Recognition of this revenue over time reflects the amount of consideration we expect to be entitled to for the transfer of goods and services performed to date, representative of the amount for which we have a right to payment. The amount of consideration we receive for parts and service sales, including collision repair work, is based upon labor hours expended and parts utilized to perform and complete the necessary services to our customers. Payment is typically due upon delivery or within a period of time shortly thereafter. We receive payment from our customers upon transfer of control or within a period typically less than 30 days subsequent to the completion of services for the customer. We allow for customer returns of parts sales up to 30 days after the sale; however, parts returns are not material. Dealership 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 products to customers, including guaranteed vehicle protection insurance, vehicle theft protection and extended service contracts. These commissions are recorded as revenue at a point in time when the customer enters into the contract. Payment is typically due and collected within 30 days subsequent to the execution of the contract with the customer. In the case of finance contracts, a customer may prepay or fail to pay their contract, thereby terminating the contract. Customers may also terminate extended service contracts and other insurance products, which are fully paid at purchase, and become eligible for refunds of unused premiums. In these circumstances, a portion of the commissions we received may be charged back based on the terms of the contracts. The revenue we record relating to these transactions is net of an estimate of the amount of chargebacks we will be required to pay. Our estimate is based upon our historical experience with similar contracts, including the impact of refinance and default rates on retail finance contracts and cancellation rates on extended service contracts and other insurance products. Aggregate reserves relating to chargeback activity were $25.9 million and $24.9 million as of September 30, 2018 and December 31, 2017, respectively. Commercial Vehicle Distribution and Other Revenue Recognition Penske Commercial Vehicles Australia. We record revenue from the distribution of vehicles and other products at a point in time when delivered, which is when the transfer of title, risks and rewards of ownership and control are considered passed to the customer. We record revenue for service or repair work over time as work is completed, and when parts are delivered to our customers. For service and parts revenues recorded over time, we utilize a method that considers total costs incurred to date and the applicable margin in relation to total expected efforts to complete our performance obligation in order to determine the appropriate amount of revenue to recognize over time. Recognition of this revenue over time reflects the amount of consideration we expect to be entitled to for the transfer of goods and services performed to date, representative of the amount for which we have a right to payment. The amount of consideration we receive for vehicle and product sales is stated within the executed contract with our customer. The amount of consideration we receive for parts and service sales is based upon labor hours expended and parts utilized to perform and complete the necessary services to our customers. Payment is typically due upon delivery, upon invoice, or within a period of time shortly thereafter. We receive payment from our customers upon transfer of control or within a period typically less than 30 days subsequent to transfer of control or invoice. Penske Power Systems. We record revenue from the distribution of engines and other products at a point in time when delivered, which is when the transfer of title, risks and rewards of ownership and control are considered passed to the customer. We record revenue for service or repair work over time as work is completed, and when parts are delivered to our customers. For service and parts revenues recorded over time, we utilize a method that considers total costs incurred to date and the applicable margin in relation to total expected efforts to complete our performance obligation in order to determine the appropriate amount of revenue to recognize over time. Recognition of revenue over time reflects the amount of consideration we expect to be entitled to for the transfer of goods and services performed to date, representative of the amount for which we have a right to payment. For our long-term power generation contracts, we record revenue over time as services are provided in accordance with contract milestones, which is considered an output method that requires judgment to determine our progress towards contract completion and the corresponding amount of revenue to recognize. Any revisions to estimates related to revenues or costs to complete contracts are recorded in the period in which the revisions to estimates are identified and the amounts can be reasonably estimated. The amount of consideration we receive for engine, product, and power generation sales is stated within the executed contract with our customer. The amount of consideration we receive for service sales is based upon labor hours expended and parts utilized to perform and complete the necessary services to our customers. Payment is typically due upon delivery, upon invoice, or within a period of time shortly thereafter. We receive payment from our customers upon transfer of control or within a period typically less than 30 days subsequent to transfer of control or invoice. Other. Other revenue primarily consists of our non-automotive motorcycle dealership operations. Revenue recognition practices for these operations do not differ materially from those described under “Retail Automotive and Retail Commercial Truck Dealership Revenue Recognition” above. Retail Automotive Dealership The following tables disaggregate our retail automotive reportable segment revenue by product type and geographic location for the three and nine months ended September 30, 2018 and 2017: Three Months Ended September 30, Nine Months Ended September 30, Retail Automotive Dealership Revenue 2018 2017 2018 2017 New vehicle $ 2,350.2 $ 2,480.8 $ 7,325.6 $ 7,189.9 Used vehicle 1,825.2 1,669.5 5,588.9 4,850.6 Finance and insurance, net 158.5 152.0 482.2 436.6 Service and parts 523.8 520.9 1,615.1 1,540.1 Fleet and wholesale 290.8 262.2 888.2 865.3 Total retail automotive dealership revenue $ 5,148.5 $ 5,085.4 $ 15,900.0 $ 14,882.5 Three Months Ended September 30, Nine Months Ended September 30, Retail Automotive Dealership Revenue 2018 2017 2018 2017 U.S. $ 2,891.6 $ 2,953.1 $ 8,596.4 $ 8,625.5 U.K. 1,945.1 1,864.6 6,244.9 5,412.3 Germany and Italy 311.8 267.7 1,058.7 844.7 Total retail automotive dealership revenue $ 5,148.5 $ 5,085.4 $ 15,900.0 $ 14,882.5 Retail Commercial Truck Dealership The following table disaggregates our retail commercial truck reportable segment revenue by product type for the three and nine months ended September 30, 2018 and 2017: Three Months Ended September 30, Nine Months Ended September 30, Retail Commercial Truck Dealership Revenue 2018 2017 2018 2017 New truck $ 249.4 $ 184.3 $ 630.5 $ 411.5 Used truck 32.5 25.7 86.3 67.9 Finance and insurance, net 2.9 2.1 9.0 6.6 Service and parts 93.1 83.3 275.7 244.6 Other 7.4 4.2 15.0 9.2 Total retail commercial truck dealership revenue $ 385.3 $ 299.6 $ 1,016.5 $ 739.8 Commercial Vehicle Distribution and Other The following table disaggregates our other reportable segment revenue by business for the three and nine months ended September 30, 2018 and 2017: Three Months Ended September 30, Nine Months Ended September 30, Commercial Vehicle Distribution and Other 2018 2017 2018 2017 Penske Commercial Vehicles Australia $ 50.4 $ 70.7 $ 169.6 $ 191.6 Penske Power Systems 73.3 67.6 256.8 171.8 Other 1.1 1.1 2.9 3.2 Total commercial vehicle distribution and other revenue $ 124.8 $ 139.4 $ 429.3 $ 366.6 Contract Balances The following table summarizes our accounts receivable and unearned revenues as of September 30, 2018 and December 31, 2017: September 30, December 31, 2018 2017 Accounts receivable Contracts in transit $ 318.7 $ 356.1 Vehicle receivables 251.9 233.0 Manufacturer receivables 216.8 230.1 Trade receivables 158.9 136.7 Accrued expenses Unearned revenues $ 271.7 $ 302.6 Contracts in transit represent receivables from unaffiliated finance companies relating to the sale of customers’ installment sales and lease contracts arising in connection with the sale of a vehicle by us. Vehicle receivables represent receivables for any portion of the vehicle sales price not paid by the finance company. Manufacturer receivables represent amounts due from manufacturers, including incentives, holdbacks, rebates, warranty claims, and other receivables due from the factory. Trade receivables represent receivables due from customers, including amounts due for parts and service sales, as well as receivables due from finance companies and others for the commissions earned on financing and commissions earned on insurance and extended service products provided by third parties. We evaluate collectability of receivables and estimate an allowance for doubtful accounts based on the age of the receivable and historical collection experience, which is recorded within “Accounts receivable” on our consolidated balance sheets with our receivables presented net of the allowance. Unearned revenues primarily relate to payments received from customers prior to satisfaction of our performance obligations, such as customer deposits and deferred revenues from operating leases. These amounts are presented within “Accrued expenses” on our consolidated balance sheets. Of the amounts recorded as unearned revenues as of December 31, 2017, $220. 3 million was recognized as revenue during the nine months ended September 30, 2018. Additional Revenue Recognition Related Policies We do not have any material significant payment terms associated with contracts with our customers. Payment is due and collected as previously detailed for each reportable segment. We do not offer material rights of return or service-type warranties. Taxes collected from customers and remitted to governmental authorities are recorded on a net basis (excluded from revenue). Shipping costs incurred subsequent to transfer of control to our customers are recognized as cost of sales. Sales promotions that we offer to customers are accounted for as a reduction of revenues at the time of sale. We expense sales commissions as incurred, as the amortization period for such costs would be less than one year. We do not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less nor for contracts that we recognize revenue at the amount to which we have the right to invoice for services performed. The effect of applying these practical expedients is not material.

Inventories

Inventories	9 Months Ended
	Sep. 30, 2018
Inventories
Inventories	3. Inventories Inventories consisted of the following: September 30, December 31, 2018 2017 Retail automotive dealership new vehicles $ 2,143.2 $ 2,344.1 Retail automotive dealership used vehicles 1,042.4 993.1 Retail automotive parts, accessories and other 126.3 141.7 Retail commercial truck dealership vehicles and parts 245.9 207.0 Commercial vehicle distribution vehicles, parts and engines 225.6 258.2 Total inventories $ 3,783.4 $ 3,944.1 We receive credits from certain vehicle manufacturers that reduce cost of sales when the vehicles are sold. Such credits amounted to $15.1 million and $15.7 million during the three months ended September 30, 2018 and 2017, respectively, and $40.7 million and $40.2 million during the nine months ended September 30, 2018 and 2017, respectively.

Business Combinations

Business Combinations	9 Months Ended
	Sep. 30, 2018
Business Combinations
Business Combinations	4. Business Combinations During the nine months ended September 30, 2018, we acquired The Car People, a stand-alone specialty retailer of used vehicles in the U.K. representing four locations; acquired four retail automotive franchises; and acquired one retail commercial truck dealership. During the nine months ended September 30, 2017, we acquired CarSense, a stand-alone specialty retailer of used vehicles in the U.S. representing five locations, acquired CarShop, a stand-alone specialty retailer of used vehicles in the U.K. representing five retail locations and a vehicle preparation center, and acquired eight retail automotive franchises. Our financial statements include the results of operations of the acquired entities from the date of acquisition. The fair value of the assets acquired and liabilities assumed have been recorded in our 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 nine months ended September 30, 2018 and 2017 follows: September 30, 2018 2017 Accounts receivable $ 3.6 $ 11.1 Inventories 62.8 139.9 Other current assets — 2.9 Property and equipment 52.6 21.8 Indefinite-lived intangibles 73.9 366.9 Other noncurrent assets — 0.1 Current liabilities (16.9) (33.6) Noncurrent liabilities (0.6) (3.2) Total consideration 175.4 505.9 Deferred consideration (6.8) — Consideration transferred through common stock issuance — (32.4) Contingent consideration — (20.0) Seller financed/assumed debt — (3.8) Total cash used in acquisitions $ 168.6 $ 449.7 The following unaudited consolidated pro forma results of operations of PAG for the three and nine months ended September 30, 2018 and 2017 give effect to acquisitions consummated during 2018 and 2017 as if they had occurred effective at the beginning of the periods: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenues $ 5,658.6 $ 5,621.8 $ 17,365.7 $ 16,432.4 Income from continuing operations 130.1 95.4 372.7 288.9 Net income 130.2 95.5 373.0 288.6 Income from continuing operations per diluted common share $ 1.53 $ 1.11 $ 4.37 $ 3.36 Net income per diluted common share $ 1.53 $ 1.11 $ 4.37 $ 3.36

Intangible Assets

Intangible Assets	9 Months Ended
	Sep. 30, 2018
Intangible Assets
Intangible Assets	5. Intangible Assets Following is a summary of the changes in the carrying amount of goodwill and other indefinite-lived intangible assets during the nine months ended September 30, 2018: Other Indefinite- Lived Intangible Goodwill Assets Balance, January 1, 2018 $ 1,660.5 $ 474.0 Additions 65.0 8.9 Disposals (6.7) (3.3) Foreign currency translation (26.2) (7.7) Balance, September 30, 2018 $ 1,692.6 $ 471.9 The additions and disposals during the nine months ended September 30, 2018 were within our Retail Automotive and Retail Commercial Truck reportable segments. During the nine months ended September 30, 2018 we sold six franchises and terminated several franchises. As of September 30, 2018, the goodwill balance within our Retail Automotive, Retail Commercial Truck, and Other reportable segments was $1,449.9 million, $163.5 million and $79.2 million, respectively. There is no goodwill recorded in our Non-Automotive Investments reportable segment.

Vehicle Financing

Vehicle Financing	9 Months Ended
	Sep. 30, 2018
Vehicle Financing
Vehicle Financing	6. Vehicle Financing We finance substantially all of the commercial vehicles we purchase for distribution, new vehicles for retail sale, and a portion of our used vehicle inventories for retail sale, under floor plan and other revolving arrangements with various lenders, including the 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 the 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 agreements typically grant a security interest in substantially all of the assets of our dealership and distribution subsidiaries and, in the U.S., Australia and New Zealand, are guaranteed or partially guaranteed by us. Interest rates under the arrangements are variable and increase or decrease based on changes in the prime rate, defined London Interbank Offered Rate (“LIBOR”), the Finance House Base Rate, the Euro Interbank Offered Rate, the Canadian Prime Rate, the Australian Bank Bill Swap Rate (“BBSW”), or the New Zealand Bank Bill Benchmark 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. The weighted average interest rate on floor plan borrowings was 2.2% for the nine months ended September 30, 2018 and 1.8% for the nine months ended September 30, 2017. We classify 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 our consolidated balance sheets and classify related cash flows as a financing activity on our consolidated statements of cash flows.

Earnings Per Share

Earnings Per Share	9 Months Ended
	Sep. 30, 2018
Earnings Per Share
Earnings Per Share	7. 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 equity 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 nine months ended September 30, 2018 and 2017 follows: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Weighted average number of common shares outstanding 84,865,046 85,921,118 85,248,758 85,873,142 Effect of non-participatory equity compensation 40,000 45,000 40,000 45,000 Weighted average number of common shares outstanding, including effect of dilutive securities 84,905,046 85,966,118 85,288,758 85,918,142

Long-Term Debt

Long-Term Debt	9 Months Ended
	Sep. 30, 2018
Long-Term Debt
Long-Term Debt	8. Long-Term Debt Long-term debt consisted of the following: September 30, December 31, 2018 2017 U.S. credit agreement — revolving credit line $ — $ 172.0 U.K. credit agreement — revolving credit line 108.2 47.3 U.K. credit agreement — overdraft line of credit 1.2 — 3.75% senior subordinated notes due 2020 297.5 296.5 5.75% senior subordinated notes due 2022 546.6 545.9 5.375% senior subordinated notes due 2024 297.5 297.2 5.50% senior subordinated notes due 2026 494.9 494.4 Australia capital loan agreement 34.9 39.0 Australia working capital loan agreement 5.8 — Mortgage facilities 243.0 235.5 Other 56.4 35.4 Total long-term debt 2,086.0 2,163.2 Less: current portion (92.7) (72.8) Net long-term debt $ 1,993.3 $ 2,090.4 U.S. Credit Agreement Our U.S. credit agreement (the “U.S. credit agreement”) with Mercedes-Benz Financial Services USA LLC and Toyota Motor Credit Corporation provides for up to $700.0 million in revolving loans for working capital, acquisitions, capital expenditures, investments and other general corporate purposes, which includes $250.0 million in revolving loans solely for future U.S. acquisitions. The U.S. credit agreement provides for a maximum of $150.0 million of future borrowings for foreign acquisitions and expires on September 30, 2021. The revolving loans bear interest at LIBOR plus 2.00%, subject to an incremental 1.50% for uncollateralized borrowings in excess of a defined borrowing base. The U.S. credit agreement is fully and unconditionally guaranteed on a joint and several basis by substantially all of our U.S. 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 the amounts owed. 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 U.S. assets are subject to security interests granted to the lenders under the U.S. credit agreement. As of September 30, 2018, we had no revolver borrowings 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 £150.0 million revolving credit agreement with the Royal Bank of Scotland plc (RBS) and BMW Financial Services (GB) Limited, and an additional 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. The loans mature on the termination date of the facility, which is December 19, 2019. 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 September 30, 2018, outstanding loans under the U.K. credit agreement amounted to £84.0 million ($109.4 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. 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 the lenders under the U.K. credit agreement. 3.75% Senior Subordinated Notes due 2020 In August 2017, we issued $300.0 million in aggregate principal amount of 3.75% Senior Subordinated Notes due 2020 (the “3.75% Notes”). Interest on the 3.75% Notes is payable semi-annually on February 15 and August 15 of each year. The 3.75% Notes mature on August 15, 2020, unless earlier redeemed or purchased by us. The 3.75% Notes are our unsecured senior subordinated obligations and are guaranteed on an unsecured senior subordinated basis by our 100% owned U.S. subsidiaries. The 3.75% Notes also contain customary negative covenants and events of default. At any time, we may redeem the 3.75% Notes at a redemption price equal to 100% of the principal amount of the 3.75% Notes, plus an applicable make whole premium, and any accrued and unpaid interest. If we experience certain “change of control” events specified in the indenture, holders of the 3.75% Notes will have the option to require us to purchase for cash all or a portion of their notes at a price equal to 101% of the principal amount of the notes, plus accrued and unpaid interest. In addition, if we make certain asset sales and do not reinvest the proceeds thereof or use such proceeds to repay certain debt, we will be required to use the proceeds of such asset sales to make an offer to purchase the notes at a price equal to 100% of the principal amount of the notes, plus accrued and unpaid interest. 5.50% Senior Subordinated Notes due 2026 In May 2016, we issued $500.0 million in aggregate principal amount of 5.50% Senior Subordinated Notes due 2026 (the “5.50% Notes”). Interest on the 5.50% Notes is payable semi-annually on May 15 and November 15 of each year. The 5.50% Notes mature on May 15, 2026, unless earlier redeemed or purchased by us. The 5.50% Notes are our unsecured senior subordinated obligations and are guaranteed on an unsecured senior subordinated basis by our 100% owned U.S. subsidiaries. The 5.50% Notes also contain customary negative covenants and events of default. Prior to May 15, 2021, we may redeem the 5.50% Notes at a redemption price equal to 100% of the principal amount of the 5.50% Notes, plus an applicable make whole premium, and any accrued and unpaid interest. On or after May 15, 2021, we may redeem the 5.50% Notes for cash at the redemption prices noted in the indenture, plus any accrued and unpaid interest. We may also redeem up to 40% of the 5.50% Notes using the proceeds of specified equity offerings at any time prior to May 15, 2019 at a price specified in the indenture. If we experience certain “change of control” events specified in the indenture, holders of the 5.50% Notes will have the option to require us to purchase for cash all or a portion of their notes at a price equal to 101% of the principal amount of the notes, plus accrued and unpaid interest. In addition, if we make certain asset sales and do not reinvest the proceeds thereof or use such proceeds to repay certain debt, we will be required to use the proceeds of such asset sales to make an offer to purchase the notes at a price equal to 100% of the principal amount of the notes, plus accrued and unpaid interest. 5.375% Senior Subordinated Notes due 2024 In November 2014, we issued $300.0 million in aggregate principal amount of 5.375% Senior Subordinated Notes due 2024 (the “5.375% Notes”). Interest on the 5.375% Notes is payable semi-annually on June 1 and December 1 of each year. The 5.375% Notes mature on December 1, 2024, unless earlier redeemed or purchased by us. The 5.375% Notes are our unsecured senior subordinated obligations and are guaranteed on an unsecured senior subordinated basis by our 100% owned U.S. subsidiaries. The 5.375% Notes also contain customary negative covenants and events of default. Prior to December 1, 2019, we may redeem the 5.375% Notes at a redemption price equal to 100% of the principal amount of the 5.375% Notes, plus an applicable make whole premium, and any accrued and unpaid interest. On or after December 1, 2019, we may redeem the 5.375% Notes for cash at the redemption prices noted in the indenture, plus any accrued and unpaid interest. If we experience certain “change of control” events specified in the indenture, holders of the 5.375% Notes will have the option to require us to purchase for cash all or a portion of their notes at a price equal to 101% of the principal amount of the notes, plus accrued and unpaid interest. In addition, if we make certain asset sales and do not reinvest the proceeds thereof or use such proceeds to repay certain debt, we will be required to use the proceeds of such asset sales to make an offer to purchase the notes at a price equal to 100% of the principal amount of the notes, plus accrued and unpaid interest. 5.75% Senior Subordinated Notes due 2022 In August 2012, we issued $550.0 million in aggregate principal amount of 5.75% Senior Subordinated Notes due 2022 (the “5.75% Notes”). Interest on the 5.75% Notes is payable semi-annually on April 1 and October 1 of each year. The 5.75% Notes mature on October 1, 2022, unless earlier redeemed or purchased by us. The 5.75% Notes are our unsecured senior subordinated obligations and are guaranteed on an unsecured senior subordinated basis by our 100% owned U.S. subsidiaries. The 5.75% Notes also contain customary negative covenants and events of default. We may redeem the 5.75% Notes for cash at the redemption prices noted in the indenture, plus any accrued and unpaid interest. If we experience certain “change of control” events specified in the indenture, holders of the 5.75% Notes will have the option to require us to purchase for cash all or a portion of their notes at a price equal to 101% of the principal amount of the notes, plus accrued and unpaid interest. In addition, if we make certain asset sales and do not reinvest the proceeds thereof or use such proceeds to repay certain debt, we will be required to use the proceeds of such asset sales to make an offer to purchase the notes at a price equal to 100% of the principal amount of the notes, plus accrued and unpaid interest. Australia Loan Agreements Penske Commercial Vehicles Australia and Penske Power Systems are party to two facilities with Volkswagen Financial Services Australia Pty Limited representing a five-year AU $50.0 million capital loan and a one-year AU $50.0 million working capital loan. Both facilities are subject to annual extensions. These agreements each provide the lender with a secured interest in all assets of these businesses. The loans bear interest at the Australian BBSW 30-day Bill Rate plus 3.0%. Irrespective of the term of the agreements, both agreements provide the lender with the ability to call the loans on 90 days’ notice. These facilities are also guaranteed by our U.S. parent company up to AU $50.0 million. As of September 30, 2018, we had AU $48.3 million ($34.9 million) outstanding under the capital loan agreement and AU $8.0 million ($5.8 million) outstanding under the working capital loan agreement. Mortgage Facilities We are party to several mortgages that 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 September 30, 2018, we owed $243.0 million of principal under our mortgage facilities.

Commitments and Contingent Liab

Commitments and Contingent Liabilities	9 Months Ended
	Sep. 30, 2018
Commitments and Contingent Liabilities
Commitments and Contingent Liabilities	9. Commitments and Contingent Liabilities We are 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 September 30, 2018, we were 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 our 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 our results of operations, financial condition or cash flows. We have historically structured our operations so as to minimize ownership of real property. As a result, we lease or sublease substantially all of our facilities. These leases are generally for a period between 5 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 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. 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 the 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. Our floor plan credit agreement with Mercedes Benz Financial Services Australia (“MBA”) provides us revolving loans for the acquisition of commercial vehicles for distribution to our retail network. This facility includes a commitment to repurchase dealer vehicles in the event the dealer’s floor plan agreement with MBA is terminated. We have $41.1 million of letters of credit outstanding as of September 30, 2018, and have posted $28.7 million of surety bonds in the ordinary course of business.

Equity

Equity	9 Months Ended
	Sep. 30, 2018
Equity
Equity	10. Equity During the nine months ended September 30, 2018, we repurchased or acquired 1,252,624 shares of our common stock. In the first quarter of 2018, we repurchased 1,133,016 shares of our outstanding common stock from Mitsui for $50.0 million, or an average of $44.13 per share, under our securities repurchase program approved by our Board of Directors. During the second and third quarters of 2018, we did not repurchase any common stock under this program. As of September 30, 2018, our remaining authorization under our securities repurchase program was $150.0 million. During the second quarter of 2018, we acquired 119,608 shares of our common stock for $5.8 million, or an average of $48.61 per share, from employees in connection with a net share settlement feature of employee equity awards. We did not acquire any additional shares in connection with the net share settlement feature of employee equity awards during the third quarter of 2018.

Accumulated Other Comprehensive

Accumulated Other Comprehensive Income/(Loss)	9 Months Ended
	Sep. 30, 2018
Accumulated Other Comprehensive Income/(Loss)
Accumulated Other Comprehensive Income/(Loss)	11. Accumulated Other Comprehensive Income (Loss) Changes in accumulated other comprehensive income (loss) by component and the reclassifications out of accumulated other comprehensive income (loss) during the three and nine months ended September 30, 2018 and 2017, respectively, attributable to Penske Automotive Group common stockholders follows: Three Months Ended September 30, 2018 Foreign Currency Translation Other Total Balance at June 30, 2018 $ (170.5) $ (15.9) $ (186.4) Other comprehensive income before reclassifications (19.5) 2.1 (17.4) Amounts reclassified from accumulated other comprehensive income — net of tax — — — Net current period other comprehensive income (19.5) 2.1 (17.4) Balance at September 30, 2018 $ (190.0) $ (13.8) $ (203.8) Three Months Ended September 30, 2017 Foreign Currency Translation Other Total Balance at June 30, 2017 $ (169.7) $ (16.5) $ (186.2) Other comprehensive income before reclassifications 31.0 3.6 34.6 Amounts reclassified from accumulated other comprehensive income — net of tax — — — Net current period other comprehensive income 31.0 3.6 34.6 Balance at September 30, 2017 $ (138.7) $ (12.9) $ (151.6) Nine Months Ended September 30, 2018 Foreign Currency Translation Other Total Balance at December 31, 2017 $ (134.0) $ (12.5) $ (146.5) Other comprehensive income before reclassifications (56.0) (1.3) (57.3) Amounts reclassified from accumulated other comprehensive income — net of tax — — — Net current period other comprehensive income (56.0) (1.3) (57.3) Balance at September 30, 2018 $ (190.0) $ (13.8) $ (203.8) Nine Months Ended September 30, 2017 Foreign Currency Translation Other Total Balance at December 31, 2016 $ (230.0) $ (20.7) $ (250.7) Other comprehensive income before reclassifications 91.3 7.8 99.1 Amounts reclassified from accumulated other comprehensive income — net of tax — — — Net current period other comprehensive income 91.3 7.8 99.1 Balance at September 30, 2017 $ (138.7) $ (12.9) $ (151.6)

Segment Information

Segment Information	9 Months Ended
	Sep. 30, 2018
Segment Information
Segment Information	12. Segment Information Our operations are organized by management into operating segments by line of business and geography. We have determined that we have four reportable segments as defined in generally accepted accounting principles for segment reporting: (i) Retail Automotive, consisting of our retail automotive dealership operations; (ii) Retail Commercial Truck, consisting of our retail commercial truck dealership operations in the U.S. and Canada; (iii) Other, consisting of our commercial vehicle and power systems distribution operations and other non-automotive consolidated operations; and (iv) Non-Automotive Investments, consisting of our equity method investments in non-automotive operations. The Retail Automotive reportable segment includes all automotive dealerships and all departments relevant to the operation of the dealerships and our retail automotive joint ventures. The individual dealership operations included in the Retail Automotive reportable segment represent six operating segments: Eastern, Central, and Western United States, Stand-Alone Used United States, International, and Stand-Alone Used International. These operating segments 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/or 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). Revenue and segment income for the three and nine months ended September 30, 2018 and 2017 follows: Three Months Ended September 30 Retail Retail Commercial Non-Automotive Intersegment Automotive Truck Other Investments Elimination Total Revenues 2018 $ 5,148.5 $ 385.3 $ 124.8 $ — $ — $ 5,658.6 2017 5,085.4 299.6 139.4 — — 5,524.4 Segment income 2018 $ 94.6 $ 19.1 $ 2.6 $ 40.8 $ — $ 157.1 2017 94.3 11.7 2.4 30.5 — 138.9 Nine Months Ended September 30 Retail Retail Commercial Non-Automotive Intersegment Automotive Truck Other Investments Elimination Total Revenues 2018 $ 15,900.0 $ 1,016.5 $ 429.3 $ — $ — $ 17,345.8 2017 14,882.5 739.8 366.6 — — 15,988.9 Segment income 2018 $ 318.2 $ 47.2 $ 20.4 $ 91.8 $ — $ 477.6 2017 319.9 27.5 4.9 68.2 — 420.5

Condensed Consolidating Financi

Condensed Consolidating Financial Information	9 Months Ended
	Sep. 30, 2018
Condensed Consolidating Financial Information
Condensed Consolidating Financial Information	13. Condensed Consolidating Financial Information The following tables include condensed consolidating financial information as of September 30, 2018 and December 31, 2017 and for the three and nine month periods ended September 30, 2018 and 2017 for Penske Automotive Group, Inc. (as the issuer of the 5.75% Notes, the 5.375% Notes, the 5.50% Notes, and the 3.75% Notes), guarantor subsidiaries and non-guarantor subsidiaries (primarily representing non-U.S. entities). Guarantor subsidiaries are directly or indirectly 100% owned by PAG, and the guarantees are full and unconditional, and joint and several. The guarantees may be released under certain circumstances upon resale, or transfer by us of the stock of the related guarantor or all or substantially all of the assets of the guarantor to a non-affiliate. CONDENSED CONSOLIDATING BALANCE SHEET September 30, 2018 Penske Total Automotive Guarantor Non-Guarantor Company Eliminations Group Subsidiaries Subsidiaries Cash and cash equivalents $ 37.6 $ — $ — $ 3.4 $ 34.2 Accounts receivable, net 953.4 (477.0) 477.0 435.1 518.3 Inventories 3,783.4 — — 1,897.7 1,885.7 Other current assets 91.8 — 5.0 17.2 69.6 Total current assets 4,866.2 (477.0) 482.0 2,353.4 2,507.8 Property and equipment, net 2,178.2 — 2.7 1,034.5 1,141.0 Intangible assets 2,164.5 — — 1,328.7 835.8 Equity method investments 1,299.7 — 1,235.3 — 64.4 Other long-term assets 18.3 (2,719.5) 2,724.9 4.2 8.7 Total assets $ 10,526.9 $ (3,196.5) $ 4,444.9 $ 4,720.8 $ 4,557.7 Floor plan notes payable $ 2,169.5 $ — $ — $ 1,193.7 $ 975.8 Floor plan notes payable — non-trade 1,359.0 — 173.3 551.8 633.9 Accounts payable 633.8 — 5.5 173.7 454.6 Accrued expenses 570.2 (477.0) 1.2 187.1 858.9 Current portion of long-term debt 92.7 — — 5.0 87.7 Liabilities held for sale 0.7 — — 0.7 — Total current liabilities 4,825.9 (477.0) 180.0 2,112.0 3,010.9 Long-term debt 1,993.3 (92.5) 1,652.9 189.0 243.9 Deferred tax liabilities 547.9 — — 545.0 2.9 Other long-term liabilities 547.8 — — 64.5 483.3 Total liabilities 7,914.9 (569.5) 1,832.9 2,910.5 3,741.0 Total equity 2,612.0 (2,627.0) 2,612.0 1,810.3 816.7 Total liabilities and equity $ 10,526.9 $ (3,196.5) $ 4,444.9 $ 4,720.8 $ 4,557.7 CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2017 Penske Total Automotive Guarantor Non-Guarantor Company Eliminations Group Subsidiaries Subsidiaries Cash and cash equivalents $ 45.7 $ — $ — $ 14.8 $ 30.9 Accounts receivable, net 954.9 (463.6) 463.6 523.8 431.1 Inventories 3,944.1 — — 1,935.0 2,009.1 Other current assets 81.8 — 7.3 16.8 57.7 Total current assets 5,026.5 (463.6) 470.9 2,490.4 2,528.8 Property and equipment, net 2,108.6 — 3.3 1,032.9 1,072.4 Intangible assets 2,134.5 — — 1,334.6 799.9 Equity method investments 1,256.6 — 1,186.9 — 69.7 Other long-term assets 14.4 (2,772.7) 2,777.8 4.6 4.7 Total assets $ 10,540.6 $ (3,236.3) $ 4,438.9 $ 4,862.5 $ 4,475.5 Floor plan notes payable $ 2,343.2 $ — $ — $ 1,272.4 $ 1,070.8 Floor plan notes payable — non-trade 1,418.6 — 196.6 601.9 620.1 Accounts payable 641.6 — 3.9 194.4 443.3 Accrued expenses 523.5 (463.6) 1.0 165.2 820.9 Current portion of long-term debt 72.8 — — 5.5 67.3 Liabilities held for sale 0.7 — — 0.7 — Total current liabilities 5,000.4 (463.6) 201.5 2,240.1 3,022.4 Long-term debt 2,090.4 (150.2) 1,809.4 191.6 239.6 Deferred tax liabilities 481.5 — — 480.1 1.4 Other long-term liabilities 540.3 — — 64.7 475.6 Total liabilities 8,112.6 (613.8) 2,010.9 2,976.5 3,739.0 Total equity 2,428.0 (2,622.5) 2,428.0 1,886.0 736.5 Total liabilities and equity $ 10,540.6 $ (3,236.3) $ 4,438.9 $ 4,862.5 $ 4,475.5 CONDENSED CONSOLIDATING STATEMENT OF INCOME Three Months Ended September 30, 2018 Penske Total Automotive Guarantor Non-Guarantor Company Eliminations Group Subsidiaries Subsidiaries Revenues $ 5,658.6 $ — $ — $ 3,061.9 $ 2,596.7 Cost of sales 4,806.0 — — 2,584.1 2,221.9 Gross profit 852.6 — — 477.8 374.8 Selling, general and administrative expenses 662.8 — 6.3 356.6 299.9 Depreciation 25.9 — 0.4 14.0 11.5 Operating income 163.9 — (6.7) 107.2 63.4 Floor plan interest expense (20.2) — (1.9) (12.7) (5.6) Other interest expense (28.3) — (19.1) (2.3) (6.9) Equity in earnings of affiliates 41.7 — 40.7 — 1.0 Equity in earnings of subsidiaries — (144.2) 144.2 — — Income from continuing operations before income taxes 157.1 (144.2) 157.2 92.2 51.9 Income taxes (27.1) 24.8 (27.1) (14.6) (10.2) Income from continuing operations 130.0 (119.4) 130.1 77.6 41.7 Income from discontinued operations, net of tax 0.1 (0.1) 0.1 0.1 — Net income 130.1 (119.5) 130.2 77.7 41.7 Other comprehensive (loss) income, net of tax (17.5) 19.8 (17.5) — (19.8) Comprehensive income 112.6 (99.7) 112.7 77.7 21.9 Less: Comprehensive (loss) income attributable to non-controlling interests (0.2) 0.1 (0.1) — (0.2) Comprehensive income attributable to Penske Automotive Group common stockholders $ 112.8 $ (99.8) $ 112.8 $ 77.7 $ 22.1 CONDENSED CONSOLIDATING STATEMENT OF INCOME Three Months Ended September 30, 2017 Penske Total Automotive Guarantor Non-Guarantor Company Eliminations Group Subsidiaries Subsidiaries Revenues $ 5,524.4 $ — $ — $ 3,047.0 $ 2,477.4 Cost of sales 4,701.8 — — 2,570.2 2,131.6 Gross profit 822.6 — — 476.8 345.8 Selling, general and administrative expenses 646.1 — 6.3 354.4 285.4 Depreciation 24.3 — 0.4 13.4 10.5 Operating income 152.2 — (6.7) 109.0 49.9 Floor plan interest expense (16.4) — (1.3) (9.8) (5.3) Other interest expense (27.8) — (19.8) (2.3) (5.7) Equity in earnings of affiliates 30.9 — 30.5 — 0.4 Equity in earnings of subsidiaries — (136.3) 136.3 — — Income from continuing operations before income taxes 138.9 (136.3) 139.0 96.9 39.3 Income taxes (44.7) 43.8 (44.7) (36.0) (7.8) Income from continuing operations 94.2 (92.5) 94.3 60.9 31.5 Income from discontinued operations, net of tax 0.1 (0.1) 0.1 0.1 — Net income 94.3 (92.6) 94.4 61.0 31.5 Other comprehensive income, net of tax 35.3 (31.9) 35.3 — 31.9 Comprehensive income 129.6 (124.5) 129.7 61.0 63.4 Less: Comprehensive income attributable to non-controlling interests 0.6 (0.8) 0.8 — 0.6 Comprehensive income attributable to Penske Automotive Group common stockholders $ 129.0 $ (123.7) $ 128.9 $ 61.0 $ 62.8 CONDENSED CONSOLIDATING STATEMENT OF INCOME Nine Months Ended September 30, 2018 Penske Total Automotive Guarantor Non-Guarantor Company Eliminations Group Subsidiaries Subsidiaries Revenues $ 17,345.8 $ — $ — $ 8,990.2 $ 8,355.6 Cost of sales 14,739.0 — — 7,561.6 7,177.4 Gross profit 2,606.8 — — 1,428.6 1,178.2 Selling, general and administrative expenses 2,001.3 — 19.1 1,059.6 922.6 Depreciation 77.2 — 1.2 41.3 34.7 Operating income 528.3 — (20.3) 327.7 220.9 Floor plan interest expense (59.0) — (5.3) (36.3) (17.4) Other interest expense (86.7) — (58.8) (6.2) (21.7) Equity in earnings of affiliates 95.0 — 91.7 — 3.3 Equity in earnings of subsidiaries — (470.1) 470.1 — — Income from continuing operations before income taxes 477.6 (470.1) 477.4 285.2 185.1 Income taxes (104.7) 104.0 (104.7) (67.0) (37.0) Income from continuing operations 372.9 (366.1) 372.7 218.2 148.1 Income from discontinued operations, net of tax 0.2 (0.2) 0.2 0.2 — Net income 373.1 (366.3) 372.9 218.4 148.1 Other comprehensive (loss) income, net of tax (58.5) 56.4 (58.5) — (56.4) Comprehensive income 314.6 (309.9) 314.4 218.4 91.7 Less: Comprehensive (loss) income attributable to non-controlling interests (1.0) 1.2 (1.2) — (1.0) Comprehensive income attributable to Penske Automotive Group common stockholders $ 315.6 $ (311.1) $ 315.6 $ 218.4 $ 92.7 CONDENSED CONSOLIDATING STATEMENT OF INCOME Nine Months Ended September 30, 2017 Penske Total Automotive Guarantor Non-Guarantor Company Eliminations Group Subsidiaries Subsidiaries Revenues $ 15,988.9 $ — $ — $ 8,749.7 $ 7,239.2 Cost of sales 13,574.7 — — 7,351.8 6,222.9 Gross profit 2,414.2 — — 1,397.9 1,016.3 Selling, general and administrative expenses 1,869.8 — 18.5 1,037.3 814.0 Depreciation 70.0 — 1.2 39.3 29.5 Operating income 474.4 — (19.7) 321.3 172.8 Floor plan interest expense (45.6) — (3.4) (27.9) (14.3) Other interest expense (79.2) — (54.1) (6.6) (18.5) Equity in earnings of affiliates 70.9 — 68.2 — 2.7 Equity in earnings of subsidiaries — (428.6) 428.6 — — Income from continuing operations before income taxes 420.5 (428.6) 419.6 286.8 142.7 Income taxes (136.0) 139.0 (136.0) (109.8) (29.2) Income from continuing operations 284.5 (289.6) 283.6 177.0 113.5 Loss from discontinued operations, net of tax (0.3) 0.3 (0.3) (0.3) — Net income 284.2 (289.3) 283.3 176.7 113.5 Other comprehensive income, net of tax 101.9 (93.0) 101.9 — 93.0 Comprehensive income 386.1 (382.3) 385.2 176.7 206.5 Less: Comprehensive income attributable to non-controlling interests 3.8 (2.8) 2.8 — 3.8 Comprehensive income attributable to Penske Automotive Group common stockholders $ 382.3 $ (379.5) $ 382.4 $ 176.7 $ 202.7 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Nine Months Ended September 30, 2018 Penske Total Automotive Guarantor Non-Guarantor Company Group Subsidiaries Subsidiaries Net cash provided by (used in) continuing operating activities $ 535.9 $ 16.1 $ 356.2 $ 163.6 Investing activities: Purchase of equipment and improvements (188.5) (2.3) (95.1) (91.1) Proceeds from sale of dealerships 58.4 — 55.9 2.5 Proceeds from sale-leaseback transactions 10.7 — — 10.7 Acquisitions, net (168.6) — — (168.6) Other (3.5) (2.4) — (1.1) Net cash (used in) provided by continuing investing activities (291.5) (4.7) (39.2) (247.6) Financing activities: Net borrowings (repayments) of long-term debt (41.0) (172.0) 41.6 89.4 Net (repayments) borrowings of floor plan notes payable — non-trade (59.6) (23.3) (50.1) 13.8 Repurchases of common stock (55.8) (55.8) — — Dividends (89.7) (89.7) — — Other (6.2) (0.3) (5.9) — Distributions from (to) parent — 329.7 (314.3) (15.4) Net cash (used in) provided by continuing financing activities (252.3) (11.4) (328.7) 87.8 Net cash provided by discontinued operations 0.3 — 0.3 — Effect of exchange rate changes on cash and cash equivalents (0.5) — — (0.5) Net change in cash and cash equivalents (8.1) (0.0) (11.4) 3.3 Cash and cash equivalents, beginning of period 45.7 — 14.8 30.9 Cash and cash equivalents, end of period $ 37.6 $ (0.0) $ 3.4 $ 34.2 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Nine Months Ended September 30, 2017 Penske Total Automotive Guarantor Non-Guarantor Company Group Subsidiaries Subsidiaries Net cash provided by (used in) continuing operating activities $ 466.8 $ (34.5) $ 359.5 $ 141.8 Investing activities: Purchase of equipment and improvements (180.1) (2.4) (80.0) (97.7) Proceeds from sale of dealerships 9.0 — 9.0 — Acquisition of additional ownership interest in Penske Truck Leasing (239.1) (239.1) — — Acquisitions, net (449.7) — (316.9) (132.8) Other 4.3 4.6 — (0.3) Net cash (used in) provided by continuing investing activities (855.6) (236.9) (387.9) (230.8) Financing activities: Issuance of 3.75% senior subordinated notes 300.0 300.0 — — Net borrowings (repayments) of long-term debt 50.3 (24.0) 8.6 65.7 Net borrowings of floor plan notes payable — non-trade 155.2 63.7 43.2 48.3 Payment of debt issuance costs (4.0) (4.0) — — Repurchases of common stock (18.5) (18.5) — — Dividends (80.1) (80.1) — — Other (5.8) (5.8) — — Distributions from (to) parent — 40.1 (35.5) (4.6) Net cash provided by continuing financing activities 397.1 271.4 16.3 109.4 Net cash provided by discontinued operations 2.7 — 2.7 — Effect of exchange rate changes on cash and cash equivalents 2.2 — — 2.2 Net change in cash and cash equivalents 13.2 — (9.4) 22.6 Cash and cash equivalents, beginning of period 24.0 — 9.4 14.6 Cash and cash equivalents, end of period $ 37.2 $ — $ — $ 37.2

Interim Financial Statements (P

Interim Financial Statements (Policies)	9 Months Ended
	Sep. 30, 2018
Interim Financial Statements.
Basis of Presentation	Basis of Presentation The accompanying unaudited consolidated condensed financial statements of PAG have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in our annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to the SEC rules and regulations. The information presented as of September 30, 2018 and December 31, 2017 and for the three and nine month periods ended September 30, 2018 and 2017 is unaudited, but includes all adjustments which our management believes to be necessary for the fair presentation of results for the periods presented. 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 our audited financial statements for the year ended December 31, 2017, which are included as part of our Annual Report on Form 10-K.
Estimates	Estimates The preparation of financial statements in conformity with U.S. GAAP 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 Accounting standards define fair value as the price that would be received from selling an asset, or paid to transfer a liability in the principal, or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. Accounting standards establish a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value and also establishes the following three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets or liabilities Level 2 Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted market prices in markets that are not active; or model-derived valuations or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities Our financial instruments consist of cash and cash equivalents, debt, floor plan notes payable, and forward exchange contracts used to hedge future cash flows. Other than our fixed rate debt, 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. Our fixed rate debt consists of amounts outstanding under our senior subordinated notes and mortgage facilities. We estimate the fair value of our senior unsecured notes using quoted prices for the identical liability (Level 2), and we estimate the fair value of our mortgage facilities using a present value technique based on current market interest rates for similar types of financial instruments (Level 2). A summary of our fixed rate debt is as follows: September 30, 2018 December 31, 2017 Carrying Value Fair Value Carrying Value Fair Value 3.75% senior subordinated notes due 2020 $ 297.5 $ 296.8 $ 296.5 $ 301.7 5.75% senior subordinated notes due 2022 546.6 557.5 545.9 562.3 5.375% senior subordinated notes due 2024 297.5 294.2 297.2 300.2 5.50% senior subordinated notes due 2026 494.9 491.4 494.4 505.0 Mortgage facilities 243.0 238.5 235.5 233.4
Assets Held For Sale and Discontinued Operations	Assets Held for Sale and Discontinued Operations We had no entities newly classified as held for sale during the nine months ended September 30, 2018 or 2017 that met the criteria to be classified as discontinued operations. The financial information for entities that were classified as discontinued operations prior to adoption of Accounting Standards Update No. 2014-08 are included in “Income (loss) from discontinued operations” in the accompanying consolidated condensed statements of income and “Liabilities held for sale” in the accompanying consolidated condensed balance sheets for all periods presented.
Disposals	Disposals During the nine months ended September 30, 2018, we disposed of six retail automotive franchises. The results of operations for these businesses are included within continuing operations for the three and nine months ended September 30, 2018 and 2017, as these franchises did not meet the criteria to be classified as held for sale and treated as discontinued operations.
Income Taxes	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. The U.S. Tax Cuts and Jobs Act (the “Act”) was signed into law on December 22, 2017. The Act modified several provisions of the Internal Revenue Code related to corporations, including a permanent corporate income tax rate reduction from 35% to 21%, effective January 1, 2018. The Act also significantly changed international tax laws for tax years beginning after December 31, 2017 and required a one-time mandatory deemed repatriation of all cumulative post-1986 foreign earnings and profits of a U.S. shareholder’s foreign subsidiaries, which we recognized in 2017, the year of enactment. On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. SAB 118 provides a measurement period that should not extend beyond one year from the Act enactment date for companies to complete such income tax accounting under ASC 740. In accordance with SAB 118, we have now obtained, prepared, and analyzed additional information about facts and circumstances that existed as of the enactment date and computed the U.S. tax impact of the Act. Since the enactment of new tax legislation, the Internal Revenue Service (“IRS”) and state tax authorities have issued news releases, notices, instructions and other forms of guidance to assist taxpayers with implementing the Act. We have also considered the impact of any new information provided by the IRS and state tax authorities in reaching our conclusions. We consider our conclusions to be final and complete. We determined that our final U.S. federal and state tax liability as a result of the transition tax on repatriation resulted in $52.2 million on a deemed repatriation of $946.0 million of foreign earnings and profits. The remeasurement of certain deferred tax assets and liabilities due to the corporate income tax rate reduction provided an income tax benefit of $301.2 million. Changes made to provisional estimates for the tax year ended December 31, 2017 were primarily related to our foreign earnings and profits, foreign tax credits, and partnership outside basis difference related to our investment in Penske Truck Leasing. The following adjustments to our provisional estimates have been recorded to current tax expense or deferred tax expense, as applicable, in the third quarter of 2018: (In millions) Federal and State Changes Due to Repatriation $ 12.5 Other Adjustments (0.9) Total SAB 118 Benefit $ 11.6 As a result of the changes made to the provisional estimates mentioned above, the total benefit recorded as a result of the enactment of the Act increased from $243.4 million to $255.0 million, with the corresponding income tax benefit of $11.6 million recorded in the third quarter of 2018. We have considered and analyzed the applicability of the global intangible low-taxed income (“GILTI”) provisions of the Act beginning in 2018 and its effect on our annualized effective tax rate for 2018. The effect of the GILTI inclusions on the 2018 annualized effective tax rate is not material. We have adopted the method of accounting for GILTI inclusions as a period expense and therefore have not accrued any deferred taxes in relation to this provision in the first nine months of 2018 or in the 2017 consolidated financial statements.
Recent Accounting Pronouncements	Recent Accounting Pronouncements Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” The FASB also issued additional ASUs containing various updates to Topic 606 which are to be adopted along with ASU 2014-09 (collectively, “the new revenue recognition standard,” “ASC 606”). ASC 606 supersedes the revenue recognition requirements in ASC 605, “Revenue Recognition.” In accordance with the new revenue recognition standard, an entity recognizes revenue when it transfers promised goods or services to customers using a five-step model that requires entities to exercise judgment when considering the terms of contracts with customers. For public companies, the new revenue recognition standard is effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within those annual periods. Entities may adopt the new guidance retrospectively to each prior reporting period presented under a full retrospective approach, or as a cumulative-effect adjustment as of the date of adoption under a modified retrospective approach. We adopted ASC 606 on January 1, 2018 using the modified retrospective approach to contracts not completed as of the date of adoption, with no restatement of comparative periods, and a cumulative-effect adjustment to retained earnings recognized as of the date of adoption. As part of the adoption of ASC 606, we performed an assessment of the impact the new revenue recognition standard would have on our consolidated financial statements. Our assessment also considered required changes in internal controls resulting from the adoption of the new revenue recognition standard. Although new controls have been implemented as a result of the adoption, such changes were not deemed material. A summary of the impact of the adoption of ASC 606 on our consolidated financial statements is included below. For our Retail Automotive and Retail Commercial Truck reportable segments, under legacy guidance we recognized revenues at a point in time upon meeting relevant revenue recognition criteria. Under ASC 606, the timing of revenue recognition for our service, parts and collision revenue stream changed, as we concluded that performance obligations for service and collision work are satisfied over time under the new revenue recognition standard. All other revenue streams for these businesses continue to be recognized at a point in time, and our performance obligations and revenue recognition timing and practices are substantially similar to how revenues were recorded under legacy guidance. For our Other reportable segment consisting primarily of our businesses in Australia and New Zealand, Penske Commercial Vehicles Australia and Penske Power Systems, under legacy guidance we recognized revenues for vehicles, engines, parts, and services at a point in time upon meeting relevant revenue recognition criteria. For our long-term power generation contracts at Penske Power Systems, we recognized revenues using the percentage of completion method in accordance with contract milestones. Under ASC 606, the timing of revenue recognition for the service and parts revenue stream for PCV Australia and PPS changed, as we concluded that performance obligations for service work are satisfied over time under the new revenue recognition standard. For revenues previously recognized using the percentage of completion method, these revenues are recognized as performance obligations are satisfied over time, consistent with the timing of recognition under legacy guidance, but are now recognized using an output method, which measures the value to the customer of the goods or services transferred to date relative to the remaining goods or services promised. All other revenue streams for these businesses continue to be recognized at a point in time, and our performance obligations and revenue recognition timing and practices are substantially similar to how revenues were recorded under legacy guidance. See Note 2 “Revenues” for additional disclosures in accordance with the new revenue recognition standard. The adoption of the new revenue recognition standard resulted in a net, after-tax cumulative effect adjustment to retained earnings of approximately $6.6 million as of January 1, 2018. The details of this adjustment are summarized below. Balance at Adjustments Due Balance at December 31, 2017 to ASC 606 January 1, 2018 Assets Accounts receivable $ 954.9 $ 22.4 $ 977.3 Inventories 3,944.1 (13.4) 3,930.7 Liabilities and Equity Accrued expenses $ 523.5 $ 0.1 $ 523.6 Deferred tax liabilities 481.5 2.3 483.8 Retained earnings 2,009.4 6.6 2,016.0 The following tables summarize the impact of the adoption of ASC 606 on our consolidated condensed statement of income and consolidated condensed balance sheet for the three and nine months ended and as of September 30, 2018: For the Three Months Ended September 30, 2018 Statement of Income As Without Adoption Impact of Adoption Reported of ASC 606 of ASC 606 Revenue: Retail automotive dealership $ 5,148.5 $ 5,149.4 $ (0.9) Retail commercial truck dealership 385.3 384.3 1.0 Commercial vehicle distribution and other 124.8 126.2 (1.4) Cost of sales: Retail automotive dealership 4,386.3 4,387.0 (0.7) Retail commercial truck dealership 327.5 327.0 0.5 Commercial vehicle distribution and other 92.2 92.9 (0.7) Gross profit 852.6 853.0 (0.4) Income taxes (27.1) (27.2) (0.1) Net income 130.1 130.4 (0.3) For the Nine Months Ended September 30, 2018 Statement of Income As Without Adoption Impact of Adoption Reported of ASC 606 of ASC 606 Revenue: Retail automotive dealership $ 15,900.0 $ 15,898.2 $ 1.8 Retail commercial truck dealership 1,016.5 1,015.4 1.1 Commercial vehicle distribution and other 429.3 426.9 2.4 Cost of sales: Retail automotive dealership 13,561.5 13,560.4 1.1 Retail commercial truck dealership 859.7 859.1 0.6 Commercial vehicle distribution and other 317.8 316.8 1.0 Gross profit 2,606.8 2,604.2 2.6 Income taxes (104.7) (103.9) 0.8 Net income 373.1 371.3 1.8 September 30, 2018 Balance Sheet As Without Adoption Impact of ASC 606 Reported of ASC 606 Adoption Assets Accounts receivable $ 953.4 $ 925.7 $ 27.7 Inventories 3,783.4 3,799.2 (15.8) Liabilities and Equity Accrued expenses $ 570.2 $ 569.8 $ 0.4 Deferred tax liabilities 547.9 544.9 3.0 Retained earnings 2,299.2 2,290.7 8.5 Accounting for Leases In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” Under this new guidance, a company will now recognize most leases on its balance sheet as lease liabilities with corresponding right-of-use assets. For public companies, this ASU is effective for financial statements issued for annual periods beginning after December 15, 2018, and interim periods within those annual periods, with early adoption permitted. The FASB has since issued further ASUs related to the standard providing additional practical expedients and an optional transition method allowing entities to not recast comparative periods. We intend to adopt this ASU, including all available practical expedients, on January 1, 2019 using the optional transition method. As such, we will recognize the effects of applying the new standard as a cumulative-effect adjustment to retained earnings as of January 1, 2019. We have a significant amount of leases for property and equipment that are classified as operating leases under current lease accounting guidance. The adoption of this ASU will result in a significant increase to our consolidated balance sheets for lease liabilities and right-of-use assets. We believe our current off-balance sheet leasing commitments are reflected in our credit rating. We are also in the process of evaluating and documenting any changes in controls and procedures that may be necessary as part of our implementation of the new standards; however, we do not expect material changes. We will continue to assess the impact that these new standards will have our on our consolidated financial statements throughout the remainder of 2018. Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230) — Classification of Certain Cash Receipts and Cash Payments.” This ASU provides new guidance on eight specific cash flow issues related to how such cash receipts and cash payments should be presented in a statement of cash flows. For public companies, this ASU is effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within those annual periods, with early adoption permitted. The amendments from this update are to be applied retrospectively. We adopted this ASU retrospectively on January 1, 2018. The adoption of this accounting standard update did not have an impact on our consolidated cash flows for the nine months ended September 30, 2018 and September 30, 2017. Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In February 2018, the FASB issued ASU No. 2018-02, “Income Statement — Reporting Comprehensive Income (Topic 220) — Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” This ASU allows for a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the enactment of the U.S. Tax Cuts and Jobs Act (“the Act”). The update also requires entities to disclose whether or not they elected to reclassify the tax effects related to the Act as well as their accounting policy for releasing income tax effects from accumulated other comprehensive income. This ASU is effective for financial statements issued for annual periods beginning after December 15, 2018, and interim periods within those annual periods, with early adoption permitted. We do not intend to adopt the optional guidance of this accounting standard update, as the potential impact on our consolidated financial statements is not material. Fair Value Measurement Disclosure In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.” This ASU eliminates, modifies, and adds certain disclosure requirements on fair value measurements. For public companies, this ASU is effective for financial statements issued for annual periods beginning after December 15, 2019, and interim periods within those annual periods, with early adoption permitted. Entities are permitted to early adopt any eliminated or amended disclosures and delay adoption of the additional disclosure requirements until the effective date. We intend to adopt this ASU on January 1, 2020. We do not expect the adoption of this accounting standard update to have a significant impact on our consolidated financial statements. Accounting for Cloud Computing Arrangements In August 2018, the FASB issued ASU No. 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” Under this new guidance, certain implementation costs incurred in a hosted cloud computing service arrangement will be capitalized in accordance with ASC 350-40. For public companies, this ASU is effective for financial statements issued for annual periods beginning after December 15, 2019, and interim periods within those annual periods, with early adoption permitted. The amendments from this update are to be applied retrospectively or prospectively to all implementation costs incurred after adoption. We intend to adopt this ASU on January 1, 2020. We are currently evaluating the impacts the adoption of this accounting standard update will have on our consolidated financial statements.

Interim Financial Statements (T

Interim Financial Statements (Tables)	9 Months Ended
	Sep. 30, 2018
Interim Financial Statements
Summary of carrying values and fair values of senior subordinated notes and fixed rate mortgage facilities	September 30, 2018 December 31, 2017 Carrying Value Fair Value Carrying Value Fair Value 3.75% senior subordinated notes due 2020 $ 297.5 $ 296.8 $ 296.5 $ 301.7 5.75% senior subordinated notes due 2022 546.6 557.5 545.9 562.3 5.375% senior subordinated notes due 2024 297.5 294.2 297.2 300.2 5.50% senior subordinated notes due 2026 494.9 491.4 494.4 505.0 Mortgage facilities 243.0 238.5 235.5 233.4
Schedule of adjustments to provisional estimates recorded to current tax expense or deferred tax expense, as applicable	The following adjustments to our provisional estimates have been recorded to current tax expense or deferred tax expense, as applicable, in the third quarter of 2018: (In millions) Federal and State Changes Due to Repatriation $ 12.5 Other Adjustments (0.9) Total SAB 118 Benefit $ 11.6
ASC 606
Interim Financial Statements
Schedule of impacts of adopting ASC 606	Balance at Adjustments Due Balance at December 31, 2017 to ASC 606 January 1, 2018 Assets Accounts receivable $ 954.9 $ 22.4 $ 977.3 Inventories 3,944.1 (13.4) 3,930.7 Liabilities and Equity Accrued expenses $ 523.5 $ 0.1 $ 523.6 Deferred tax liabilities 481.5 2.3 483.8 Retained earnings 2,009.4 6.6 2,016.0 The following tables summarize the impact of the adoption of ASC 606 on our consolidated condensed statement of income and consolidated condensed balance sheet for the three and nine months ended and as of September 30, 2018: For the Three Months Ended September 30, 2018 Statement of Income As Without Adoption Impact of Adoption Reported of ASC 606 of ASC 606 Revenue: Retail automotive dealership $ 5,148.5 $ 5,149.4 $ (0.9) Retail commercial truck dealership 385.3 384.3 1.0 Commercial vehicle distribution and other 124.8 126.2 (1.4) Cost of sales: Retail automotive dealership 4,386.3 4,387.0 (0.7) Retail commercial truck dealership 327.5 327.0 0.5 Commercial vehicle distribution and other 92.2 92.9 (0.7) Gross profit 852.6 853.0 (0.4) Income taxes (27.1) (27.2) (0.1) Net income 130.1 130.4 (0.3) For the Nine Months Ended September 30, 2018 Statement of Income As Without Adoption Impact of Adoption Reported of ASC 606 of ASC 606 Revenue: Retail automotive dealership $ 15,900.0 $ 15,898.2 $ 1.8 Retail commercial truck dealership 1,016.5 1,015.4 1.1 Commercial vehicle distribution and other 429.3 426.9 2.4 Cost of sales: Retail automotive dealership 13,561.5 13,560.4 1.1 Retail commercial truck dealership 859.7 859.1 0.6 Commercial vehicle distribution and other 317.8 316.8 1.0 Gross profit 2,606.8 2,604.2 2.6 Income taxes (104.7) (103.9) 0.8 Net income 373.1 371.3 1.8 September 30, 2018 Balance Sheet As Without Adoption Impact of ASC 606 Reported of ASC 606 Adoption Assets Accounts receivable $ 953.4 $ 925.7 $ 27.7 Inventories 3,783.4 3,799.2 (15.8) Liabilities and Equity Accrued expenses $ 570.2 $ 569.8 $ 0.4 Deferred tax liabilities 547.9 544.9 3.0 Retained earnings 2,299.2 2,290.7 8.5

Revenues (Tables)

Revenues (Tables)	9 Months Ended
	Sep. 30, 2018
Revenues
Schedule of accounts receivable and unearned revenues	September 30, December 31, 2018 2017 Accounts receivable Contracts in transit $ 318.7 $ 356.1 Vehicle receivables 251.9 233.0 Manufacturer receivables 216.8 230.1 Trade receivables 158.9 136.7 Accrued expenses Unearned revenues $ 271.7 $ 302.6
Retail Automotive Dealership
Revenues
Schedule of disaggregation of revenues	Three Months Ended September 30, Nine Months Ended September 30, Retail Automotive Dealership Revenue 2018 2017 2018 2017 New vehicle $ 2,350.2 $ 2,480.8 $ 7,325.6 $ 7,189.9 Used vehicle 1,825.2 1,669.5 5,588.9 4,850.6 Finance and insurance, net 158.5 152.0 482.2 436.6 Service and parts 523.8 520.9 1,615.1 1,540.1 Fleet and wholesale 290.8 262.2 888.2 865.3 Total retail automotive dealership revenue $ 5,148.5 $ 5,085.4 $ 15,900.0 $ 14,882.5 Three Months Ended September 30, Nine Months Ended September 30, Retail Automotive Dealership Revenue 2018 2017 2018 2017 U.S. $ 2,891.6 $ 2,953.1 $ 8,596.4 $ 8,625.5 U.K. 1,945.1 1,864.6 6,244.9 5,412.3 Germany and Italy 311.8 267.7 1,058.7 844.7 Total retail automotive dealership revenue $ 5,148.5 $ 5,085.4 $ 15,900.0 $ 14,882.5
Retail Commercial Truck Dealership
Revenues
Schedule of disaggregation of revenues	Three Months Ended September 30, Nine Months Ended September 30, Retail Commercial Truck Dealership Revenue 2018 2017 2018 2017 New truck $ 249.4 $ 184.3 $ 630.5 $ 411.5 Used truck 32.5 25.7 86.3 67.9 Finance and insurance, net 2.9 2.1 9.0 6.6 Service and parts 93.1 83.3 275.7 244.6 Other 7.4 4.2 15.0 9.2 Total retail commercial truck dealership revenue $ 385.3 $ 299.6 $ 1,016.5 $ 739.8
Commercial Vehicle Distribution and Other
Revenues
Schedule of disaggregation of revenues	Three Months Ended September 30, Nine Months Ended September 30, Commercial Vehicle Distribution and Other 2018 2017 2018 2017 Penske Commercial Vehicles Australia $ 50.4 $ 70.7 $ 169.6 $ 191.6 Penske Power Systems 73.3 67.6 256.8 171.8 Other 1.1 1.1 2.9 3.2 Total commercial vehicle distribution and other revenue $ 124.8 $ 139.4 $ 429.3 $ 366.6

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Sep. 30, 2018
Inventories
Inventories	September 30, December 31, 2018 2017 Retail automotive dealership new vehicles $ 2,143.2 $ 2,344.1 Retail automotive dealership used vehicles 1,042.4 993.1 Retail automotive parts, accessories and other 126.3 141.7 Retail commercial truck dealership vehicles and parts 245.9 207.0 Commercial vehicle distribution vehicles, parts and engines 225.6 258.2 Total inventories $ 3,783.4 $ 3,944.1

Business Combinations (Tables)

Business Combinations (Tables)	9 Months Ended
	Sep. 30, 2018
Business Combinations
Summary of the aggregate consideration paid and the aggregate amounts of the assets acquired and liabilities assumed	September 30, 2018 2017 Accounts receivable $ 3.6 $ 11.1 Inventories 62.8 139.9 Other current assets — 2.9 Property and equipment 52.6 21.8 Indefinite-lived intangibles 73.9 366.9 Other noncurrent assets — 0.1 Current liabilities (16.9) (33.6) Noncurrent liabilities (0.6) (3.2) Total consideration 175.4 505.9 Deferred consideration (6.8) — Consideration transferred through common stock issuance — (32.4) Contingent consideration — (20.0) Seller financed/assumed debt — (3.8) Total cash used in acquisitions $ 168.6 $ 449.7
Summary of unaudited consolidated pro forma results of operations	Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenues $ 5,658.6 $ 5,621.8 $ 17,365.7 $ 16,432.4 Income from continuing operations 130.1 95.4 372.7 288.9 Net income 130.2 95.5 373.0 288.6 Income from continuing operations per diluted common share $ 1.53 $ 1.11 $ 4.37 $ 3.36 Net income per diluted common share $ 1.53 $ 1.11 $ 4.37 $ 3.36

Intangible Assets (Tables)

Intangible Assets (Tables)	9 Months Ended
	Sep. 30, 2018
Intangible Assets
Summary of the changes in the carrying amount of goodwill and other indefinite-lived intangible assets	Other Indefinite- Lived Intangible Goodwill Assets Balance, January 1, 2018 $ 1,660.5 $ 474.0 Additions 65.0 8.9 Disposals (6.7) (3.3) Foreign currency translation (26.2) (7.7) Balance, September 30, 2018 $ 1,692.6 $ 471.9

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Sep. 30, 2018
Earnings Per Share
Reconciliation of number of shares used in calculation of basic and diluted earning per share	Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Weighted average number of common shares outstanding 84,865,046 85,921,118 85,248,758 85,873,142 Effect of non-participatory equity compensation 40,000 45,000 40,000 45,000 Weighted average number of common shares outstanding, including effect of dilutive securities 84,905,046 85,966,118 85,288,758 85,918,142

Long-Term Debt (Tables)

Long-Term Debt (Tables)	9 Months Ended
	Sep. 30, 2018
Long-Term Debt
Long Term Debt	September 30, December 31, 2018 2017 U.S. credit agreement — revolving credit line $ — $ 172.0 U.K. credit agreement — revolving credit line 108.2 47.3 U.K. credit agreement — overdraft line of credit 1.2 — 3.75% senior subordinated notes due 2020 297.5 296.5 5.75% senior subordinated notes due 2022 546.6 545.9 5.375% senior subordinated notes due 2024 297.5 297.2 5.50% senior subordinated notes due 2026 494.9 494.4 Australia capital loan agreement 34.9 39.0 Australia working capital loan agreement 5.8 — Mortgage facilities 243.0 235.5 Other 56.4 35.4 Total long-term debt 2,086.0 2,163.2 Less: current portion (92.7) (72.8) Net long-term debt $ 1,993.3 $ 2,090.4

Accumulated Other Comprehensi_2

Accumulated Other Comprehensive Income/(Loss) (Tables)	9 Months Ended
	Sep. 30, 2018
Accumulated Other Comprehensive Income/(Loss)
Schedule of the changes in accumulated other comprehensive income/(loss) by component and the reclassifications out of accumulated other comprehensive income/(loss) attributable to the entity's common stockholders	Three Months Ended September 30, 2018 Foreign Currency Translation Other Total Balance at June 30, 2018 $ (170.5) $ (15.9) $ (186.4) Other comprehensive income before reclassifications (19.5) 2.1 (17.4) Amounts reclassified from accumulated other comprehensive income — net of tax — — — Net current period other comprehensive income (19.5) 2.1 (17.4) Balance at September 30, 2018 $ (190.0) $ (13.8) $ (203.8) Three Months Ended September 30, 2017 Foreign Currency Translation Other Total Balance at June 30, 2017 $ (169.7) $ (16.5) $ (186.2) Other comprehensive income before reclassifications 31.0 3.6 34.6 Amounts reclassified from accumulated other comprehensive income — net of tax — — — Net current period other comprehensive income 31.0 3.6 34.6 Balance at September 30, 2017 $ (138.7) $ (12.9) $ (151.6) Nine Months Ended September 30, 2018 Foreign Currency Translation Other Total Balance at December 31, 2017 $ (134.0) $ (12.5) $ (146.5) Other comprehensive income before reclassifications (56.0) (1.3) (57.3) Amounts reclassified from accumulated other comprehensive income — net of tax — — — Net current period other comprehensive income (56.0) (1.3) (57.3) Balance at September 30, 2018 $ (190.0) $ (13.8) $ (203.8) Nine Months Ended September 30, 2017 Foreign Currency Translation Other Total Balance at December 31, 2016 $ (230.0) $ (20.7) $ (250.7) Other comprehensive income before reclassifications 91.3 7.8 99.1 Amounts reclassified from accumulated other comprehensive income — net of tax — — — Net current period other comprehensive income 91.3 7.8 99.1 Balance at September 30, 2017 $ (138.7) $ (12.9) $ (151.6)

Segment Information (Tables)

Segment Information (Tables)	9 Months Ended
	Sep. 30, 2018
Segment Information
Revenues and segment income by reportable segment	Three Months Ended September 30 Retail Retail Commercial Non-Automotive Intersegment Automotive Truck Other Investments Elimination Total Revenues 2018 $ 5,148.5 $ 385.3 $ 124.8 $ — $ — $ 5,658.6 2017 5,085.4 299.6 139.4 — — 5,524.4 Segment income 2018 $ 94.6 $ 19.1 $ 2.6 $ 40.8 $ — $ 157.1 2017 94.3 11.7 2.4 30.5 — 138.9 Nine Months Ended September 30 Retail Retail Commercial Non-Automotive Intersegment Automotive Truck Other Investments Elimination Total Revenues 2018 $ 15,900.0 $ 1,016.5 $ 429.3 $ — $ — $ 17,345.8 2017 14,882.5 739.8 366.6 — — 15,988.9 Segment income 2018 $ 318.2 $ 47.2 $ 20.4 $ 91.8 $ — $ 477.6 2017 319.9 27.5 4.9 68.2 — 420.5

Condensed Consolidating Finan_2

Condensed Consolidating Financial Information (Tables)	9 Months Ended
	Sep. 30, 2018
Condensed Consolidating Financial Information
CONDENSED CONSOLIDATING BALANCE SHEET	CONDENSED CONSOLIDATING BALANCE SHEET September 30, 2018 Penske Total Automotive Guarantor Non-Guarantor Company Eliminations Group Subsidiaries Subsidiaries Cash and cash equivalents $ 37.6 $ — $ — $ 3.4 $ 34.2 Accounts receivable, net 953.4 (477.0) 477.0 435.1 518.3 Inventories 3,783.4 — — 1,897.7 1,885.7 Other current assets 91.8 — 5.0 17.2 69.6 Total current assets 4,866.2 (477.0) 482.0 2,353.4 2,507.8 Property and equipment, net 2,178.2 — 2.7 1,034.5 1,141.0 Intangible assets 2,164.5 — — 1,328.7 835.8 Equity method investments 1,299.7 — 1,235.3 — 64.4 Other long-term assets 18.3 (2,719.5) 2,724.9 4.2 8.7 Total assets $ 10,526.9 $ (3,196.5) $ 4,444.9 $ 4,720.8 $ 4,557.7 Floor plan notes payable $ 2,169.5 $ — $ — $ 1,193.7 $ 975.8 Floor plan notes payable — non-trade 1,359.0 — 173.3 551.8 633.9 Accounts payable 633.8 — 5.5 173.7 454.6 Accrued expenses 570.2 (477.0) 1.2 187.1 858.9 Current portion of long-term debt 92.7 — — 5.0 87.7 Liabilities held for sale 0.7 — — 0.7 — Total current liabilities 4,825.9 (477.0) 180.0 2,112.0 3,010.9 Long-term debt 1,993.3 (92.5) 1,652.9 189.0 243.9 Deferred tax liabilities 547.9 — — 545.0 2.9 Other long-term liabilities 547.8 — — 64.5 483.3 Total liabilities 7,914.9 (569.5) 1,832.9 2,910.5 3,741.0 Total equity 2,612.0 (2,627.0) 2,612.0 1,810.3 816.7 Total liabilities and equity $ 10,526.9 $ (3,196.5) $ 4,444.9 $ 4,720.8 $ 4,557.7 CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2017 Penske Total Automotive Guarantor Non-Guarantor Company Eliminations Group Subsidiaries Subsidiaries Cash and cash equivalents $ 45.7 $ — $ — $ 14.8 $ 30.9 Accounts receivable, net 954.9 (463.6) 463.6 523.8 431.1 Inventories 3,944.1 — — 1,935.0 2,009.1 Other current assets 81.8 — 7.3 16.8 57.7 Total current assets 5,026.5 (463.6) 470.9 2,490.4 2,528.8 Property and equipment, net 2,108.6 — 3.3 1,032.9 1,072.4 Intangible assets 2,134.5 — — 1,334.6 799.9 Equity method investments 1,256.6 — 1,186.9 — 69.7 Other long-term assets 14.4 (2,772.7) 2,777.8 4.6 4.7 Total assets $ 10,540.6 $ (3,236.3) $ 4,438.9 $ 4,862.5 $ 4,475.5 Floor plan notes payable $ 2,343.2 $ — $ — $ 1,272.4 $ 1,070.8 Floor plan notes payable — non-trade 1,418.6 — 196.6 601.9 620.1 Accounts payable 641.6 — 3.9 194.4 443.3 Accrued expenses 523.5 (463.6) 1.0 165.2 820.9 Current portion of long-term debt 72.8 — — 5.5 67.3 Liabilities held for sale 0.7 — — 0.7 — Total current liabilities 5,000.4 (463.6) 201.5 2,240.1 3,022.4 Long-term debt 2,090.4 (150.2) 1,809.4 191.6 239.6 Deferred tax liabilities 481.5 — — 480.1 1.4 Other long-term liabilities 540.3 — — 64.7 475.6 Total liabilities 8,112.6 (613.8) 2,010.9 2,976.5 3,739.0 Total equity 2,428.0 (2,622.5) 2,428.0 1,886.0 736.5 Total liabilities and equity $ 10,540.6 $ (3,236.3) $ 4,438.9 $ 4,862.5 $ 4,475.5
CONDENSED CONSOLIDATING STATEMENT OF INCOME	CONDENSED CONSOLIDATING STATEMENT OF INCOME Three Months Ended September 30, 2018 Penske Total Automotive Guarantor Non-Guarantor Company Eliminations Group Subsidiaries Subsidiaries Revenues $ 5,658.6 $ — $ — $ 3,061.9 $ 2,596.7 Cost of sales 4,806.0 — — 2,584.1 2,221.9 Gross profit 852.6 — — 477.8 374.8 Selling, general and administrative expenses 662.8 — 6.3 356.6 299.9 Depreciation 25.9 — 0.4 14.0 11.5 Operating income 163.9 — (6.7) 107.2 63.4 Floor plan interest expense (20.2) — (1.9) (12.7) (5.6) Other interest expense (28.3) — (19.1) (2.3) (6.9) Equity in earnings of affiliates 41.7 — 40.7 — 1.0 Equity in earnings of subsidiaries — (144.2) 144.2 — — Income from continuing operations before income taxes 157.1 (144.2) 157.2 92.2 51.9 Income taxes (27.1) 24.8 (27.1) (14.6) (10.2) Income from continuing operations 130.0 (119.4) 130.1 77.6 41.7 Income from discontinued operations, net of tax 0.1 (0.1) 0.1 0.1 — Net income 130.1 (119.5) 130.2 77.7 41.7 Other comprehensive (loss) income, net of tax (17.5) 19.8 (17.5) — (19.8) Comprehensive income 112.6 (99.7) 112.7 77.7 21.9 Less: Comprehensive (loss) income attributable to non-controlling interests (0.2) 0.1 (0.1) — (0.2) Comprehensive income attributable to Penske Automotive Group common stockholders $ 112.8 $ (99.8) $ 112.8 $ 77.7 $ 22.1 CONDENSED CONSOLIDATING STATEMENT OF INCOME Three Months Ended September 30, 2017 Penske Total Automotive Guarantor Non-Guarantor Company Eliminations Group Subsidiaries Subsidiaries Revenues $ 5,524.4 $ — $ — $ 3,047.0 $ 2,477.4 Cost of sales 4,701.8 — — 2,570.2 2,131.6 Gross profit 822.6 — — 476.8 345.8 Selling, general and administrative expenses 646.1 — 6.3 354.4 285.4 Depreciation 24.3 — 0.4 13.4 10.5 Operating income 152.2 — (6.7) 109.0 49.9 Floor plan interest expense (16.4) — (1.3) (9.8) (5.3) Other interest expense (27.8) — (19.8) (2.3) (5.7) Equity in earnings of affiliates 30.9 — 30.5 — 0.4 Equity in earnings of subsidiaries — (136.3) 136.3 — — Income from continuing operations before income taxes 138.9 (136.3) 139.0 96.9 39.3 Income taxes (44.7) 43.8 (44.7) (36.0) (7.8) Income from continuing operations 94.2 (92.5) 94.3 60.9 31.5 Income from discontinued operations, net of tax 0.1 (0.1) 0.1 0.1 — Net income 94.3 (92.6) 94.4 61.0 31.5 Other comprehensive income, net of tax 35.3 (31.9) 35.3 — 31.9 Comprehensive income 129.6 (124.5) 129.7 61.0 63.4 Less: Comprehensive income attributable to non-controlling interests 0.6 (0.8) 0.8 — 0.6 Comprehensive income attributable to Penske Automotive Group common stockholders $ 129.0 $ (123.7) $ 128.9 $ 61.0 $ 62.8 CONDENSED CONSOLIDATING STATEMENT OF INCOME Nine Months Ended September 30, 2018 Penske Total Automotive Guarantor Non-Guarantor Company Eliminations Group Subsidiaries Subsidiaries Revenues $ 17,345.8 $ — $ — $ 8,990.2 $ 8,355.6 Cost of sales 14,739.0 — — 7,561.6 7,177.4 Gross profit 2,606.8 — — 1,428.6 1,178.2 Selling, general and administrative expenses 2,001.3 — 19.1 1,059.6 922.6 Depreciation 77.2 — 1.2 41.3 34.7 Operating income 528.3 — (20.3) 327.7 220.9 Floor plan interest expense (59.0) — (5.3) (36.3) (17.4) Other interest expense (86.7) — (58.8) (6.2) (21.7) Equity in earnings of affiliates 95.0 — 91.7 — 3.3 Equity in earnings of subsidiaries — (470.1) 470.1 — — Income from continuing operations before income taxes 477.6 (470.1) 477.4 285.2 185.1 Income taxes (104.7) 104.0 (104.7) (67.0) (37.0) Income from continuing operations 372.9 (366.1) 372.7 218.2 148.1 Income from discontinued operations, net of tax 0.2 (0.2) 0.2 0.2 — Net income 373.1 (366.3) 372.9 218.4 148.1 Other comprehensive (loss) income, net of tax (58.5) 56.4 (58.5) — (56.4) Comprehensive income 314.6 (309.9) 314.4 218.4 91.7 Less: Comprehensive (loss) income attributable to non-controlling interests (1.0) 1.2 (1.2) — (1.0) Comprehensive income attributable to Penske Automotive Group common stockholders $ 315.6 $ (311.1) $ 315.6 $ 218.4 $ 92.7 CONDENSED CONSOLIDATING STATEMENT OF INCOME Nine Months Ended September 30, 2017 Penske Total Automotive Guarantor Non-Guarantor Company Eliminations Group Subsidiaries Subsidiaries Revenues $ 15,988.9 $ — $ — $ 8,749.7 $ 7,239.2 Cost of sales 13,574.7 — — 7,351.8 6,222.9 Gross profit 2,414.2 — — 1,397.9 1,016.3 Selling, general and administrative expenses 1,869.8 — 18.5 1,037.3 814.0 Depreciation 70.0 — 1.2 39.3 29.5 Operating income 474.4 — (19.7) 321.3 172.8 Floor plan interest expense (45.6) — (3.4) (27.9) (14.3) Other interest expense (79.2) — (54.1) (6.6) (18.5) Equity in earnings of affiliates 70.9 — 68.2 — 2.7 Equity in earnings of subsidiaries — (428.6) 428.6 — — Income from continuing operations before income taxes 420.5 (428.6) 419.6 286.8 142.7 Income taxes (136.0) 139.0 (136.0) (109.8) (29.2) Income from continuing operations 284.5 (289.6) 283.6 177.0 113.5 Loss from discontinued operations, net of tax (0.3) 0.3 (0.3) (0.3) — Net income 284.2 (289.3) 283.3 176.7 113.5 Other comprehensive income, net of tax 101.9 (93.0) 101.9 — 93.0 Comprehensive income 386.1 (382.3) 385.2 176.7 206.5 Less: Comprehensive income attributable to non-controlling interests 3.8 (2.8) 2.8 — 3.8 Comprehensive income attributable to Penske Automotive Group common stockholders $ 382.3 $ (379.5) $ 382.4 $ 176.7 $ 202.7
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS	CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Nine Months Ended September 30, 2018 Penske Total Automotive Guarantor Non-Guarantor Company Group Subsidiaries Subsidiaries Net cash provided by (used in) continuing operating activities $ 535.9 $ 16.1 $ 356.2 $ 163.6 Investing activities: Purchase of equipment and improvements (188.5) (2.3) (95.1) (91.1) Proceeds from sale of dealerships 58.4 — 55.9 2.5 Proceeds from sale-leaseback transactions 10.7 — — 10.7 Acquisitions, net (168.6) — — (168.6) Other (3.5) (2.4) — (1.1) Net cash (used in) provided by continuing investing activities (291.5) (4.7) (39.2) (247.6) Financing activities: Net borrowings (repayments) of long-term debt (41.0) (172.0) 41.6 89.4 Net (repayments) borrowings of floor plan notes payable — non-trade (59.6) (23.3) (50.1) 13.8 Repurchases of common stock (55.8) (55.8) — — Dividends (89.7) (89.7) — — Other (6.2) (0.3) (5.9) — Distributions from (to) parent — 329.7 (314.3) (15.4) Net cash (used in) provided by continuing financing activities (252.3) (11.4) (328.7) 87.8 Net cash provided by discontinued operations 0.3 — 0.3 — Effect of exchange rate changes on cash and cash equivalents (0.5) — — (0.5) Net change in cash and cash equivalents (8.1) (0.0) (11.4) 3.3 Cash and cash equivalents, beginning of period 45.7 — 14.8 30.9 Cash and cash equivalents, end of period $ 37.6 $ (0.0) $ 3.4 $ 34.2 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Nine Months Ended September 30, 2017 Penske Total Automotive Guarantor Non-Guarantor Company Group Subsidiaries Subsidiaries Net cash provided by (used in) continuing operating activities $ 466.8 $ (34.5) $ 359.5 $ 141.8 Investing activities: Purchase of equipment and improvements (180.1) (2.4) (80.0) (97.7) Proceeds from sale of dealerships 9.0 — 9.0 — Acquisition of additional ownership interest in Penske Truck Leasing (239.1) (239.1) — — Acquisitions, net (449.7) — (316.9) (132.8) Other 4.3 4.6 — (0.3) Net cash (used in) provided by continuing investing activities (855.6) (236.9) (387.9) (230.8) Financing activities: Issuance of 3.75% senior subordinated notes 300.0 300.0 — — Net borrowings (repayments) of long-term debt 50.3 (24.0) 8.6 65.7 Net borrowings of floor plan notes payable — non-trade 155.2 63.7 43.2 48.3 Payment of debt issuance costs (4.0) (4.0) — — Repurchases of common stock (18.5) (18.5) — — Dividends (80.1) (80.1) — — Other (5.8) (5.8) — — Distributions from (to) parent — 40.1 (35.5) (4.6) Net cash provided by continuing financing activities 397.1 271.4 16.3 109.4 Net cash provided by discontinued operations 2.7 — 2.7 — Effect of exchange rate changes on cash and cash equivalents 2.2 — — 2.2 Net change in cash and cash equivalents 13.2 — (9.4) 22.6 Cash and cash equivalents, beginning of period 24.0 — 9.4 14.6 Cash and cash equivalents, end of period $ 37.2 $ — $ — $ 37.2

Interim Financial Statements -

Interim Financial Statements - Business Overview (Details) $ in Millions	Sep. 30, 2018item	Sep. 07, 2017	Sep. 06, 2017	Apr. 30, 2018item	Sep. 30, 2018USD ($)item	Sep. 30, 2017USD ($)	Sep. 30, 2018USD ($)item	Sep. 30, 2017USD ($)	Dec. 31, 2017USD ($)
Interim Financial Statements
Total revenues | $					$ 5,658.6	$ 5,524.4	$ 17,345.8	$ 15,988.9
PTL
Interim Financial Statements
Ownership acquired (as a percent)		5.50%
Ownership interest in Penske Truck Leasing Co (as a percent)	28.90%		23.40%
Retail Automotive Dealership
Interim Financial Statements
Total number of owned and operated franchises	342				342		342
Number of owned and operated franchises in US	151				151		151
Number of owned and operated franchises outside US	191				191		191
Minimum number of vehicles retailed and wholesaled							493,000
Minimum number of vehicle brands offered							40
Number of stand-alone used vehicle dealerships operated in the U.S. and U.K.	14				14		14
Number of acquired franchises							4
Number of franchises awarded to the reporting entity							1
Number of franchises disposed							6
Commercial Vehicle Distribution
Interim Financial Statements
Minimum number of dealership locations							70
Number of retail dealerships owned by the reporting entity							8
Italy | Retail Automotive Dealership
Interim Financial Statements
Number of acquired franchises							4
Automotive dealership revenues | Geographic | U.S. and Puerto Rico
Interim Financial Statements
Automotive dealership revenue (as a percent)							54.00%
Automotive dealership revenues | Geographic | Outside the U.S.
Interim Financial Statements
Automotive dealership revenue (as a percent)							46.00%
Automotive dealership revenues | Premium brands
Interim Financial Statements
Automotive dealership revenue (as a percent)							69.00%
CarSense | Retail Automotive Dealership
Interim Financial Statements
Number of retail locations operated							5
CarShop | Retail Automotive Dealership
Interim Financial Statements
Number of retail locations operated							5
The Car People | Retail Automotive Dealership
Interim Financial Statements
Number of retail locations operated							4
Penske Corporation | PTL
Interim Financial Statements
Ownership interest in Penske Truck Leasing Co (as a percent)	41.10%
Mitsui and Co | PTL
Interim Financial Statements
Ownership interest in Penske Truck Leasing Co (as a percent)	30.00%
PTG | Retail Commercial Truck Dealership
Interim Financial Statements
Number of operating locations							21
Number of full service retail locations operated							15
Number of collision centers operated							6
Number of locations acquired				1
Retail Automotive Dealership
Interim Financial Statements
Total revenues | $					$ 5,148.5	5,085.4	$ 15,900	14,882.5	$ 19,800
Retail Commercial Truck Dealership
Interim Financial Statements
Total revenues | $					385.3	299.6	1,016.5	739.8
Commercial Vehicle Distribution and Other
Interim Financial Statements
Total revenues | $					$ 124.8	$ 139.4	$ 429.3	$ 366.6

Interim Financial Statements _2

Interim Financial Statements - Assets Held For Sale, Discontinued Operations and Fair Value (Details) $ in Millions	9 Months Ended
	Sep. 30, 2018USD ($)item	Dec. 31, 2017USD ($)
Combined financial information regarding entities accounted for as discontinued operations
Number of entities newly classified as held for sale | item	0
Fair Value of Financial Instruments
Debt instrument, Carrying Value	$ 2,086	$ 2,163.2
5.75% senior subordinated notes due 2022
Fair Value of Financial Instruments
Interest rate (as a percent)	5.75%	5.75%
Debt instrument, Carrying Value	$ 546.6	$ 545.9
5.75% senior subordinated notes due 2022 | Fair Value, Inputs, Level 2
Fair Value of Financial Instruments
Debt instrument, Fair Value	$ 557.5	$ 562.3
5.375% senior subordinated notes due 2024
Fair Value of Financial Instruments
Interest rate (as a percent)	5.375%	5.375%
Debt instrument, Carrying Value	$ 297.5	$ 297.2
5.375% senior subordinated notes due 2024 | Fair Value, Inputs, Level 2
Fair Value of Financial Instruments
Debt instrument, Fair Value	$ 294.2	$ 300.2
5.50% senior subordinated notes due 2026
Fair Value of Financial Instruments
Interest rate (as a percent)	5.50%	5.50%
Debt instrument, Carrying Value	$ 494.9	$ 494.4
5.50% senior subordinated notes due 2026 | Fair Value, Inputs, Level 2
Fair Value of Financial Instruments
Debt instrument, Fair Value	$ 491.4	$ 505
3.75% senior subordinated notes due 2020
Fair Value of Financial Instruments
Interest rate (as a percent)	3.75%	3.75%
Debt instrument, Carrying Value	$ 297.5	$ 296.5
3.75% senior subordinated notes due 2020 | Fair Value, Inputs, Level 2
Fair Value of Financial Instruments
Debt instrument, Fair Value	296.8	301.7
Mortgage facilities
Fair Value of Financial Instruments
Debt instrument, Carrying Value	243	235.5
Mortgage facilities | Fair Value, Inputs, Level 2
Fair Value of Financial Instruments
Debt instrument, Fair Value	$ 238.5	$ 233.4
Retail Automotive Franchise
Divestitures
Number of franchises disposed | item	6

Interim Financial Statements _3

Interim Financial Statements - Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2018	Dec. 31, 2017
Income Taxes
Corporate tax rate (as a percent)		21.00%	35.00%
U.S. federal and state tax liability related to transition tax on repatriation of foreign earnings and profits	$ 52.2	$ 52.2
Amount of deemed repatriation of foreign earnings and profits	946	946
Income tax benefit related to remeasurement of deferred tax assets and liabilities due to change in enacted tax rate		301.2
Adjustments to provisional estimates :
Federal and State Change Due to Repatriation	12.5
Other Adjustments	(0.9)
Total SAB 118 Benefit	$ 11.6
Provisional estimate, income tax benefit from enactment of the Act		243.4
Income tax benefit from enactment of the Act		$ 255

Interim Financial Statements _4

Interim Financial Statements - Recent Accounting Pronouncements - ASU 2014-09 - Initial Application (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Jan. 02, 2018	Jan. 01, 2018	Dec. 31, 2017
Assets
Accounts receivable, net	$ 953.4		$ 953.4		$ 977.3		$ 954.9
Inventories	3,783.4		3,783.4		3,930.7		3,944.1
Liabilities and Equity
Accrued expenses	570.2		570.2		523.6		523.5
Deferred tax liabilities	547.9		547.9		483.8		481.5
Retained earnings	2,299.2		2,299.2		$ 2,016		$ 2,009.4
Statement of Income
Gross profit	852.6	$ 822.6	2,606.8	$ 2,414.2
Income taxes	(27.1)	(44.7)	(104.7)	(136)
Net income	130.1	94.3	373.1	284.2
ASC 606 | Without Adoption of ASC 606
Assets
Accounts receivable, net	925.7		925.7
Inventories	3,799.2		3,799.2
Liabilities and Equity
Accrued expenses	569.8		569.8
Deferred tax liabilities	544.9		544.9
Retained earnings	2,290.7		2,290.7
Statement of Income
Gross profit	853		2,604.2
Income taxes	(27.2)		(103.9)
Net income	130.4		371.3
ASC 606 | Adjustment Impact of Adoption of ASC 606
Assets
Accounts receivable, net	27.7		27.7			$ 22.4
Inventories	(15.8)		(15.8)			(13.4)
Liabilities and Equity
Accrued expenses	0.4		0.4			0.1
Deferred tax liabilities	3		3			2.3
Retained earnings	8.5		8.5			$ 6.6
Statement of Income
Gross profit	(0.4)		2.6
Income taxes	(0.1)		0.8
Net income	(0.3)		1.8
Retail Automotive Dealership
Statement of Income
Revenues	5,148.5		15,900
Cost of sales	4,386.3		13,561.5
Retail Automotive Dealership | Without Adoption of ASC 606
Statement of Income
Revenues		5,085.4		14,882.5
Retail Automotive Dealership | ASC 606 | Without Adoption of ASC 606
Statement of Income
Revenues	5,149.4		15,898.2
Cost of sales	4,387		13,560.4
Retail Automotive Dealership | ASC 606 | Adjustment Impact of Adoption of ASC 606
Statement of Income
Revenues	(0.9)		1.8
Cost of sales	(0.7)		1.1
Retail Commercial Truck Dealership
Statement of Income
Revenues	385.3		1,016.5
Cost of sales	327.5		859.7
Retail Commercial Truck Dealership | Without Adoption of ASC 606
Statement of Income
Revenues		299.6		739.8
Retail Commercial Truck Dealership | ASC 606 | Without Adoption of ASC 606
Statement of Income
Revenues	384.3		1,015.4
Cost of sales	327		859.1
Retail Commercial Truck Dealership | ASC 606 | Adjustment Impact of Adoption of ASC 606
Statement of Income
Revenues	1		1.1
Cost of sales	0.5		0.6
Commercial Vehicle Distribution and Other
Statement of Income
Revenues	124.8		429.3
Cost of sales	92.2		317.8
Commercial Vehicle Distribution and Other | Without Adoption of ASC 606
Statement of Income
Revenues		$ 139.4		$ 366.6
Commercial Vehicle Distribution and Other | ASC 606 | Without Adoption of ASC 606
Statement of Income
Revenues	126.2		426.9
Cost of sales	92.9		316.8
Commercial Vehicle Distribution and Other | ASC 606 | Adjustment Impact of Adoption of ASC 606
Statement of Income
Revenues	(1.4)		2.4
Cost of sales	$ (0.7)		$ 1

Revenues - Other Disclosures (D

Revenues - Other Disclosures (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Vehicle Sales | Retail Automotive and Retail Commercial Truck Dealership
Revenues
Payment period	30 days
Service and parts | Retail Automotive and Retail Commercial Truck Dealership
Revenues
Payment period	30 days
Customer return period, parts sales	30 days
Finance and insurance, net | Retail Automotive and Retail Commercial Truck Dealership
Revenues
Payment period	30 days
Aggregate reserves relating to chargeback activity	$ 25.9	$ 24.9
Penske Commercial Vehicles Australia | Commercial Vehicle Distribution and Other
Revenues
Payment period	30 days
Penske Power Systems | Commercial Vehicle Distribution and Other
Revenues
Payment period	30 days

Revenues - Retail Automotive De

Revenues - Retail Automotive Dealership (Details) - Retail Automotive Dealership - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenues
Total revenues	$ 5,148.5		$ 15,900
U.S.
Revenues
Total revenues	2,891.6		8,596.4
UK
Revenues
Total revenues	1,945.1		6,244.9
Germany and Italy
Revenues
Total revenues	311.8		1,058.7
New vehicle
Revenues
Total revenues	2,350.2		7,325.6
Used vehicle
Revenues
Total revenues	1,825.2		5,588.9
Finance and insurance, net
Revenues
Total revenues	158.5		482.2
Service and parts
Revenues
Total revenues	523.8		1,615.1
Fleet and wholesale
Revenues
Total revenues	$ 290.8		$ 888.2
Without Adoption of ASC 606
Revenues
Total revenues		$ 5,085.4		$ 14,882.5
Without Adoption of ASC 606 | U.S.
Revenues
Total revenues		2,953.1		8,625.5
Without Adoption of ASC 606 | UK
Revenues
Total revenues		1,864.6		5,412.3
Without Adoption of ASC 606 | Germany and Italy
Revenues
Total revenues		267.7		844.7
Without Adoption of ASC 606 | New vehicle
Revenues
Total revenues		2,480.8		7,189.9
Without Adoption of ASC 606 | Used vehicle
Revenues
Total revenues		1,669.5		4,850.6
Without Adoption of ASC 606 | Finance and insurance, net
Revenues
Total revenues		152		436.6
Without Adoption of ASC 606 | Service and parts
Revenues
Total revenues		520.9		1,540.1
Without Adoption of ASC 606 | Fleet and wholesale
Revenues
Total revenues		$ 262.2		$ 865.3

Revenues - Retail Commercial Tr

Revenues - Retail Commercial Truck Dealership (Details) - Retail Commercial Truck Dealership - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenues
Total revenues	$ 385.3		$ 1,016.5
New vehicle
Revenues
Total revenues	249.4		630.5
Used vehicle
Revenues
Total revenues	32.5		86.3
Finance and insurance, net
Revenues
Total revenues	2.9		9
Service and parts
Revenues
Total revenues	93.1		275.7
Other
Revenues
Total revenues	$ 7.4		$ 15
Without Adoption of ASC 606
Revenues
Total revenues		$ 299.6		$ 739.8
Without Adoption of ASC 606 | New vehicle
Revenues
Total revenues		184.3		411.5
Without Adoption of ASC 606 | Used vehicle
Revenues
Total revenues		25.7		67.9
Without Adoption of ASC 606 | Finance and insurance, net
Revenues
Total revenues		2.1		6.6
Without Adoption of ASC 606 | Service and parts
Revenues
Total revenues		83.3		244.6
Without Adoption of ASC 606 | Other
Revenues
Total revenues		$ 4.2		$ 9.2

Revenues - Commercial Vehicle D

Revenues - Commercial Vehicle Distribution and Other (Details) - Commercial Vehicle Distribution and Other - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenues
Total revenues	$ 124.8		$ 429.3
Penske Commercial Vehicles Australia
Revenues
Total revenues	50.4		169.6
Penske Power Systems
Revenues
Total revenues	73.3		256.8
Other
Revenues
Total revenues	$ 1.1		$ 2.9
Without Adoption of ASC 606
Revenues
Total revenues		$ 139.4		$ 366.6
Without Adoption of ASC 606 | Penske Commercial Vehicles Australia
Revenues
Total revenues		70.7		191.6
Without Adoption of ASC 606 | Penske Power Systems
Revenues
Total revenues		67.6		171.8
Without Adoption of ASC 606 | Other
Revenues
Total revenues		$ 1.1		$ 3.2

Revenues - Contract Balances (D

Revenues - Contract Balances (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Jan. 02, 2018	Dec. 31, 2017
Contract Balances
Accounts receivable, net	$ 953.4	$ 977.3	$ 954.9
Unearned revenues	271.7		302.6
Revenue recognized from unearned revenue	220.3
Contracts in transit
Contract Balances
Accounts receivable, net	318.7		356.1
Vehicle receivables
Contract Balances
Accounts receivable, net	251.9		233
Manufacturer receivables
Contract Balances
Accounts receivable, net	216.8		230.1
Trade receivables
Contract Balances
Accounts receivable, net	$ 158.9		$ 136.7

Revenues - Additional Revenue R

Revenues - Additional Revenue Recognition (Details)	9 Months Ended
	Sep. 30, 2018
Revenues.
Revenue, practical expedient, incremental cost of obtaining contract	true
Revenue, practical expedient, remaining performance obligation	true

Inventories (Details)

Inventories (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Jan. 02, 2018	Dec. 31, 2017
Inventories
Retail automotive dealership new vehicles	$ 2,143.2		$ 2,143.2			$ 2,344.1
Retail automotive dealership used vehicles	1,042.4		1,042.4			993.1
Retail automotive parts, accessories and other	126.3		126.3			141.7
Retail commercial truck dealership vehicles and parts	245.9		245.9			207
Commercial vehicle distribution vehicles, parts and engines	225.6		225.6			258.2
Total inventories	3,783.4		3,783.4		$ 3,930.7	$ 3,944.1
Interest credits and advertising assistance	$ 15.1	$ 15.7	$ 40.7	$ 40.2

Business Combinations - Activit

Business Combinations - Activity (Details) - item	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
The Car People
Business combinations
Number of retail locations acquired	4
CarSense
Business combinations
Number of retail locations acquired		5
CarShop
Business combinations
Number of retail locations acquired		5
Retail Automotive Dealership
Business combinations
Number of acquired franchises	4	8
Retail Commercial Truck Dealership
Business combinations
Number of retail locations acquired	1

Business Combinations - Conside

Business Combinations - Consideration Paid and Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Summary of the aggregate consideration paid and the aggregate amounts of the assets acquired and liabilities assumed
Accounts receivable	$ 3.6	$ 11.1
Inventories	62.8	139.9
Other current assets		2.9
Property and equipment	52.6	21.8
Indefinite-lived intangibles	73.9	366.9
Other noncurrent assets		0.1
Current liabilities	(16.9)	(33.6)
Noncurrent liabilities	(0.6)	(3.2)
Total consideration	175.4	505.9
Deferred consideration	(6.8)
Consideration transferred through common stock issuance		(32.4)
Contingent consideration		(20)
Seller financed/assumed debt		(3.8)
Total cash used in acquisitions	$ 168.6	$ 449.7

Business Combinations - Pro For

Business Combinations - Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Summary of unaudited consolidated pro forma results of operations
Revenues	$ 5,658.6	$ 5,621.8	$ 17,365.7	$ 16,432.4
Income from continuing operations	130.1	95.4	372.7	288.9
Net income	$ 130.2	$ 95.5	$ 373	$ 288.6
Income from continuing operations per diluted common share (in dollars per share)	$ 1.53	$ 1.11	$ 4.37	$ 3.36
Net income per diluted common share (in dollars per share)	$ 1.53	$ 1.11	$ 4.37	$ 3.36

Intangible Assets - Summary of

Intangible Assets - Summary of Changes (Details) $ in Millions	9 Months Ended
	Sep. 30, 2018USD ($)
Summary of the changes in the carrying amount of goodwill and other indefinite-lived intangible assets
Goodwill, Beginning balance	$ 1,660.5
Goodwill, Additions	65
Goodwill, Disposals	(6.7)
Goodwill, Foreign currency translation	(26.2)
Goodwill, Ending balance	1,692.6
Other indefinite-lived intangible assets, Beginning Balance	474
Other indefinite-lived intangible assets, Additions	8.9
Other indefinite-lived intangible assets, Disposals	(3.3)
Other indefinite-lived intangible assets, Foreign currency translation	(7.7)
Other indefinite-lived intangible assets, Ending Balance	$ 471.9

Intangible Assets - Activity (D

Intangible Assets - Activity (Details)	9 Months Ended
	Sep. 30, 2018item
Retail Automotive Dealership
Intangible assets
Number of franchises sold	6

Intangible Assets - Information

Intangible Assets - Information by Segment (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Intangible assets
Goodwill	$ 1,692.6	$ 1,660.5
Retail Automotive Dealership
Intangible assets
Goodwill	1,449.9
Retail Commercial Truck Dealership
Intangible assets
Goodwill	163.5
Other
Intangible assets
Goodwill	79.2
Non-Automotive Investments
Intangible assets
Goodwill	$ 0

Vehicle Financing (Details)

Vehicle Financing (Details)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Vehicle Financing
Maturity period of floor plan arrangements outside the U.S. if not payable on demand	90 days
Weighted average interest rate on floor plan borrowings (as a percent)	2.20%	1.80%

Earnings Per Share (Details)

Earnings Per Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Reconciliation of number of shares used in calculation of basic and diluted earnings per share
Weighted average number of common shares outstanding	84,900,000	85,900,000	85,200,000	85,900,000
Effect of non-participatory equity compensation (in shares)	40,000	45,000	40,000	45,000
Weighted average number of common shares outstanding, including effect of dilutive securities	84,900,000	86,000,000	85,300,000	85,900,000

Long-Term Debt (Details)

Long-Term Debt (Details) £ in Millions, $ in Millions, $ in Millions	1 Months Ended				9 Months Ended
	Aug. 31, 2017USD ($)	May 31, 2016USD ($)	Nov. 30, 2014USD ($)	Aug. 31, 2012USD ($)	Sep. 30, 2018GBP (£)	Sep. 30, 2018AUD ($)	Sep. 30, 2018USD ($)	Dec. 31, 2017USD ($)
Long Term Debt
Total long-term debt							$ 2,086	$ 2,163.2
Less: current portion							(92.7)	(72.8)
Net long-term debt							1,993.3	2,090.4
US Credit Agreement Revolving Credit Line
Long Term Debt
Total long-term debt								172
Maximum credit available							700
Balance outstanding under credit agreement							0
Revolving loans solely for future U.S. acquisitions							250
Future borrowings available for foreign acquisitions							150
US Credit Agreement Revolving Credit Line | LIBOR portion
Long Term Debt
Base rate of interest on loans					LIBOR
Line of credit basis spread on variable rate (as a percent)					2.00%
Incremental interest rate for uncollateralized borrowings in excess of maximum limit (as a percent)					1.50%
UK Credit Agreement Revolving Credit Line
Long Term Debt
Total long-term debt							108.2	47.3
Maximum credit available | £					£ 150
UK Credit Agreement Revolving Credit Line | LIBOR portion
Long Term Debt
Base rate of interest on loans					LIBOR
UK Credit Agreement Revolving Credit Line | Minimum | LIBOR portion
Long Term Debt
Line of credit basis spread on variable rate (as a percent)					1.35%
UK Credit Agreement Revolving Credit Line | Maximum | LIBOR portion
Long Term Debt
Line of credit basis spread on variable rate (as a percent)					3.00%
UK Credit Agreement Overdraft Line of Credit
Long Term Debt
Total long-term debt							1.2
UK Credit Agreement Overdraft Line of Credit | Bank of England Base Rate
Long Term Debt
Base rate of interest on loans					Bank of England Base Rate
Line of credit basis spread on variable rate (as a percent)					1.75%
UK Credit Agreement Revolving Credit Line and Overdraft Line Of Credit
Long Term Debt
Balance outstanding under credit agreement					£ 84		109.4
5.50% senior subordinated notes due 2026
Long Term Debt
Total long-term debt							$ 494.9	$ 494.4
Interest rate (as a percent)					5.50%	5.50%	5.50%	5.50%
Debt issued		$ 500
Domestic Subsidiaries ownership guaranteeing obligations (as a percent)					100.00%	100.00%	100.00%
Change of control, redemption price as a percentage of principal		101.00%
Sale of assets, redemption price as percentage of principal		100.00%
5.50% senior subordinated notes due 2026 | Debt Redemption Prior to May 15, 2021
Long Term Debt
Percentage of principal amount at which the entity may redeem the notes					100.00%
5.50% senior subordinated notes due 2026 | Debt Redemption Prior to May 15, 2019
Long Term Debt
Specified equity offerings, percentage of debt which may be redeemed		40.00%
5.375% senior subordinated notes due 2024
Long Term Debt
Total long-term debt							$ 297.5	$ 297.2
Interest rate (as a percent)					5.375%	5.375%	5.375%	5.375%
Debt issued			$ 300
Domestic Subsidiaries ownership guaranteeing obligations (as a percent)					100.00%	100.00%	100.00%
Change of control, redemption price as a percentage of principal			101.00%
Sale of assets, redemption price as percentage of principal			100.00%
5.375% senior subordinated notes due 2024 | Debt Redemption Prior To December 1, 2019
Long Term Debt
Percentage of principal amount at which the entity may redeem the notes					100.00%
5.75% senior subordinated notes due 2022
Long Term Debt
Total long-term debt							$ 546.6	$ 545.9
Interest rate (as a percent)					5.75%	5.75%	5.75%	5.75%
Debt issued				$ 550
Domestic Subsidiaries ownership guaranteeing obligations (as a percent)					100.00%	100.00%	100.00%
Change of control, redemption price as a percentage of principal				101.00%
Sale of assets, redemption price as percentage of principal				100.00%
3.75% senior subordinated notes due 2020
Long Term Debt
Total long-term debt							$ 297.5	$ 296.5
Interest rate (as a percent)					3.75%	3.75%	3.75%	3.75%
Debt issued	$ 300
Domestic Subsidiaries ownership guaranteeing obligations (as a percent)					100.00%	100.00%	100.00%
Percentage of principal amount at which the entity may redeem the notes					100.00%
Change of control, redemption price as a percentage of principal	101.00%
Sale of assets, redemption price as percentage of principal	100.00%
Australia capital loan agreement
Long Term Debt
Total long-term debt							$ 34.9	$ 39
Debt term					5 years
Maximum credit available						$ 50
Call period					90 days
Maximum amount of debt guaranteed by the Company's U.S. parent company						50
Balance outstanding under credit agreement						48.3	34.9
Australia capital loan agreement | Australian BBSW 30-Day Bill Rate
Long Term Debt
Base rate of interest on loans					30-day Bill Rate
Line of credit basis spread on variable rate (as a percent)					3.00%
Australia working capital loan agreement
Long Term Debt
Total long-term debt							5.8
Debt term					1 year
Maximum credit available						50
Call period					90 days
Maximum amount of debt guaranteed by the Company's U.S. parent company						50
Balance outstanding under credit agreement						$ 8	5.8
Australia working capital loan agreement | Australian BBSW 30-Day Bill Rate
Long Term Debt
Base rate of interest on loans					30-day Bill Rate
Line of credit basis spread on variable rate (as a percent)					3.00%
Mortgage facilities
Long Term Debt
Total long-term debt							243	235.5
Balance outstanding under credit agreement							243
Other debt
Long Term Debt
Total long-term debt							$ 56.4	$ 35.4

Commitments and Contingent Li_2

Commitments and Contingent Liabilities (Details) $ in Millions	9 Months Ended
	Sep. 30, 2018USD ($)
Commitments and Contingent Liabilities
Lease period, minimum	5 years
Lease period, maximum	20 years
Loss Contingencies
Letters of credit outstanding	$ 41.1
Surety bonds posted	$ 28.7

Equity (Details)

Equity (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Mar. 31, 2018	Sep. 30, 2018
Securities Repurchase Program
Repurchase of common stock			$ 55.8
Acquired Employee Equity Awards
Securities Repurchase Program
Repurchased shares	119,608
Repurchase of common stock	$ 5.8
Repurchased shares, average price (in dollars per share)	$ 48.61
Share Repurchase Program
Securities Repurchase Program
Repurchased shares		1,133,016
Repurchase of common stock		$ 50
Repurchased shares, average price (in dollars per share)		$ 44.13
Remaining amount authorized to be repurchased	$ 150		$ 150
Common Stock
Securities Repurchase Program
Repurchased shares			1,252,624

Accumulated Other Comprehensi_3

Accumulated Other Comprehensive Income/(Loss) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Changes in accumulated other comprehensive income (loss) by component
Balance at the beginning of the period			$ 2,395.2
Balance at the end of the period	$ 2,583.3		2,583.3
Foreign Currency Translation
Changes in accumulated other comprehensive income (loss) by component
Balance at the beginning of the period	(170.5)	$ (169.7)	(134)	$ (230)
Other comprehensive income before reclassifications	(19.5)	31	(56)	91.3
Net current period other comprehensive income	(19.5)	31	(56)	91.3
Balance at the end of the period	(190)	(138.7)	(190)	(138.7)
Other
Changes in accumulated other comprehensive income (loss) by component
Balance at the beginning of the period	(15.9)	(16.5)	(12.5)	(20.7)
Other comprehensive income before reclassifications	2.1	3.6	(1.3)	7.8
Net current period other comprehensive income	2.1	3.6	(1.3)	7.8
Balance at the end of the period	(13.8)	(12.9)	(13.8)	(12.9)
Accumulated Other Comprehensive Income (Loss)
Changes in accumulated other comprehensive income (loss) by component
Balance at the beginning of the period	(186.4)	(186.2)	(146.5)	(250.7)
Other comprehensive income before reclassifications	(17.4)	34.6	(57.3)	99.1
Net current period other comprehensive income	(17.4)	34.6	(57.3)	99.1
Balance at the end of the period	$ (203.8)	$ (151.6)	$ (203.8)	$ (151.6)

Segment Information (Details)

Segment Information (Details) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018USD ($)	Sep. 30, 2017USD ($)	Sep. 30, 2018USD ($)item	Sep. 30, 2017USD ($)	Dec. 31, 2017USD ($)
Segment Reporting Information
Number of reportable segments | item			4
Number of operating segments | item			6
Revenues and segment income by reportable segment
Revenues	$ 5,658.6	$ 5,524.4	$ 17,345.8	$ 15,988.9
Adjusted segment income	157.1	138.9	477.6	420.5
Retail Automotive Dealership
Revenues and segment income by reportable segment
Revenues	5,148.5	5,085.4	15,900	14,882.5	$ 19,800
Retail Automotive Dealership | Operating segments
Revenues and segment income by reportable segment
Revenues	5,148.5	5,085.4	15,900	14,882.5
Adjusted segment income	94.6	94.3	318.2	319.9
Retail Commercial Truck Dealership
Revenues and segment income by reportable segment
Revenues	385.3	299.6	1,016.5	739.8
Retail Commercial Truck Dealership | Operating segments
Revenues and segment income by reportable segment
Revenues	385.3	299.6	1,016.5	739.8
Adjusted segment income	19.1	11.7	47.2	27.5
Commercial Vehicle Distribution and Other
Revenues and segment income by reportable segment
Revenues	124.8	139.4	429.3	366.6
Other | Operating segments
Revenues and segment income by reportable segment
Revenues	124.8	139.4	429.3	366.6
Adjusted segment income	2.6	2.4	20.4	4.9
Non-Automotive Investments | Operating segments
Revenues and segment income by reportable segment
Adjusted segment income	$ 40.8	$ 30.5	$ 91.8	$ 68.2

Condensed Consolidating Finan_3

Condensed Consolidating Financial Information - Balance Sheet (Details) - USD ($) $ in Millions	Sep. 30, 2018	Jan. 02, 2018	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2016
Condensed consolidating balance sheet
Cash and cash equivalents	$ 37.6		$ 45.7	$ 37.2	$ 24
Accounts receivable, net	953.4	$ 977.3	954.9
Inventories	3,783.4	3,930.7	3,944.1
Other current assets	91.8		81.8
Total current assets	4,866.2		5,026.5
Property and equipment, net	2,178.2		2,108.6
Intangible assets	2,164.5		2,134.5
Equity method investments	1,299.7		1,256.6
Other long-term assets	18.3		14.4
Total assets	10,526.9		10,540.6
Floor plan notes payable	2,169.5		2,343.2
Floor plan notes payable - non-trade	1,359		1,418.6
Accounts payable	633.8		641.6
Accrued expenses	570.2	523.6	523.5
Current portion of long-term debt	92.7		72.8
Liabilities held for sale	0.7		0.7
Total current liabilities	4,825.9		5,000.4
Long-term debt	1,993.3		2,090.4
Deferred tax liabilities	547.9	$ 483.8	481.5
Other long-term liabilities	547.8		540.3
Total liabilities	7,914.9		8,112.6
Total equity	2,612		2,428
Total liabilities and equity	$ 10,526.9		$ 10,540.6
3.75% senior subordinated notes due 2020
Condensed consolidating balance sheet
Interest rate (as a percent)	3.75%		3.75%
Domestic Subsidiaries ownership guaranteeing obligations (as a percent)	100.00%
5.75% senior subordinated notes due 2022
Condensed consolidating balance sheet
Interest rate (as a percent)	5.75%		5.75%
Domestic Subsidiaries ownership guaranteeing obligations (as a percent)	100.00%
5.375% senior subordinated notes due 2024
Condensed consolidating balance sheet
Interest rate (as a percent)	5.375%		5.375%
Domestic Subsidiaries ownership guaranteeing obligations (as a percent)	100.00%
5.50% senior subordinated notes due 2026
Condensed consolidating balance sheet
Interest rate (as a percent)	5.50%		5.50%
Domestic Subsidiaries ownership guaranteeing obligations (as a percent)	100.00%
Eliminations
Condensed consolidating balance sheet
Accounts receivable, net	$ (477)		$ (463.6)
Total current assets	(477)		(463.6)
Other long-term assets	(2,719.5)		(2,772.7)
Total assets	(3,196.5)		(3,236.3)
Accrued expenses	(477)		(463.6)
Total current liabilities	(477)		(463.6)
Long-term debt	(92.5)		(150.2)
Total liabilities	(569.5)		(613.8)
Total equity	(2,627)		(2,622.5)
Total liabilities and equity	(3,196.5)		(3,236.3)
Reportable legal entities | Penske Automotive Group
Condensed consolidating balance sheet
Cash and cash equivalents	0
Accounts receivable, net	477		463.6
Other current assets	5		7.3
Total current assets	482		470.9
Property and equipment, net	2.7		3.3
Equity method investments	1,235.3		1,186.9
Other long-term assets	2,724.9		2,777.8
Total assets	4,444.9		4,438.9
Floor plan notes payable - non-trade	173.3		196.6
Accounts payable	5.5		3.9
Accrued expenses	1.2		1
Total current liabilities	180		201.5
Long-term debt	1,652.9		1,809.4
Total liabilities	1,832.9		2,010.9
Total equity	2,612		2,428
Total liabilities and equity	4,444.9		4,438.9
Reportable legal entities | Guarantor Subsidiaries
Condensed consolidating balance sheet
Cash and cash equivalents	3.4		14.8		9.4
Accounts receivable, net	435.1		523.8
Inventories	1,897.7		1,935
Other current assets	17.2		16.8
Total current assets	2,353.4		2,490.4
Property and equipment, net	1,034.5		1,032.9
Intangible assets	1,328.7		1,334.6
Other long-term assets	4.2		4.6
Total assets	4,720.8		4,862.5
Floor plan notes payable	1,193.7		1,272.4
Floor plan notes payable - non-trade	551.8		601.9
Accounts payable	173.7		194.4
Accrued expenses	187.1		165.2
Current portion of long-term debt	5		5.5
Liabilities held for sale	0.7		0.7
Total current liabilities	2,112		2,240.1
Long-term debt	189		191.6
Deferred tax liabilities	545		480.1
Other long-term liabilities	64.5		64.7
Total liabilities	2,910.5		2,976.5
Total equity	1,810.3		1,886
Total liabilities and equity	4,720.8		4,862.5
Reportable legal entities | Non-Guarantor Subsidiaries
Condensed consolidating balance sheet
Cash and cash equivalents	34.2		30.9	$ 37.2	$ 14.6
Accounts receivable, net	518.3		431.1
Inventories	1,885.7		2,009.1
Other current assets	69.6		57.7
Total current assets	2,507.8		2,528.8
Property and equipment, net	1,141		1,072.4
Intangible assets	835.8		799.9
Equity method investments	64.4		69.7
Other long-term assets	8.7		4.7
Total assets	4,557.7		4,475.5
Floor plan notes payable	975.8		1,070.8
Floor plan notes payable - non-trade	633.9		620.1
Accounts payable	454.6		443.3
Accrued expenses	858.9		820.9
Current portion of long-term debt	87.7		67.3
Total current liabilities	3,010.9		3,022.4
Long-term debt	243.9		239.6
Deferred tax liabilities	2.9		1.4
Other long-term liabilities	483.3		475.6
Total liabilities	3,741		3,739
Total equity	816.7		736.5
Total liabilities and equity	$ 4,557.7		$ 4,475.5

Condensed Consolidating Finan_4

Condensed Consolidating Financial Information - Income (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Condensed consolidating statement of income
Revenues	$ 5,658.6	$ 5,524.4	$ 17,345.8	$ 15,988.9
Cost of sales	4,806	4,701.8	14,739	13,574.7
Gross profit	852.6	822.6	2,606.8	2,414.2
Selling, general and administrative expenses	662.8	646.1	2,001.3	1,869.8
Depreciation	25.9	24.3	77.2	70
Operating income	163.9	152.2	528.3	474.4
Floor plan interest expense	(20.2)	(16.4)	(59)	(45.6)
Other interest expense	(28.3)	(27.8)	(86.7)	(79.2)
Equity in earnings of affiliates	41.7	30.9	95	70.9
Income from continuing operations before income taxes	157.1	138.9	477.6	420.5
Income taxes	(27.1)	(44.7)	(104.7)	(136)
Income from continuing operations	130	94.2	372.9	284.5
Income (loss) income from discontinued operations, net of tax	0.1	0.1	0.2	(0.3)
Net income	130.1	94.3	373.1	284.2
Other comprehensive (loss) income, net of tax	(17.5)	35.3	(58.5)	101.9
Comprehensive income	112.6	129.6	314.6	386.1
Less: Comprehensive (loss) income attributable to non-controlling interests	(0.2)	0.6	(1)	3.8
Comprehensive income attributable to Penske Automotive Group common stockholders	112.8	129	315.6	382.3
Eliminations
Condensed consolidating statement of income
Equity in earnings of subsidiaries	(144.2)	(136.3)	(470.1)	(428.6)
Income from continuing operations before income taxes	(144.2)	(136.3)	(470.1)	(428.6)
Income taxes	24.8	43.8	104	139
Income from continuing operations	(119.4)	(92.5)	(366.1)	(289.6)
Income (loss) income from discontinued operations, net of tax	(0.1)	(0.1)	(0.2)	0.3
Net income	(119.5)	(92.6)	(366.3)	(289.3)
Other comprehensive (loss) income, net of tax	19.8	(31.9)	56.4	(93)
Comprehensive income	(99.7)	(124.5)	(309.9)	(382.3)
Less: Comprehensive (loss) income attributable to non-controlling interests	0.1	(0.8)	1.2	(2.8)
Comprehensive income attributable to Penske Automotive Group common stockholders	(99.8)	(123.7)	(311.1)	(379.5)
Penske Automotive Group | Reportable legal entities
Condensed consolidating statement of income
Selling, general and administrative expenses	6.3	6.3	19.1	18.5
Depreciation	0.4	0.4	1.2	1.2
Operating income	(6.7)	(6.7)	(20.3)	(19.7)
Floor plan interest expense	(1.9)	(1.3)	(5.3)	(3.4)
Other interest expense	(19.1)	(19.8)	(58.8)	(54.1)
Equity in earnings of affiliates	40.7	30.5	91.7	68.2
Equity in earnings of subsidiaries	144.2	136.3	470.1	428.6
Income from continuing operations before income taxes	157.2	139	477.4	419.6
Income taxes	(27.1)	(44.7)	(104.7)	(136)
Income from continuing operations	130.1	94.3	372.7	283.6
Income (loss) income from discontinued operations, net of tax	0.1	0.1	0.2	(0.3)
Net income	130.2	94.4	372.9	283.3
Other comprehensive (loss) income, net of tax	(17.5)	35.3	(58.5)	101.9
Comprehensive income	112.7	129.7	314.4	385.2
Less: Comprehensive (loss) income attributable to non-controlling interests	(0.1)	0.8	(1.2)	2.8
Comprehensive income attributable to Penske Automotive Group common stockholders	112.8	128.9	315.6	382.4
Guarantor Subsidiaries | Reportable legal entities
Condensed consolidating statement of income
Revenues	3,061.9	3,047	8,990.2	8,749.7
Cost of sales	2,584.1	2,570.2	7,561.6	7,351.8
Gross profit	477.8	476.8	1,428.6	1,397.9
Selling, general and administrative expenses	356.6	354.4	1,059.6	1,037.3
Depreciation	14	13.4	41.3	39.3
Operating income	107.2	109	327.7	321.3
Floor plan interest expense	(12.7)	(9.8)	(36.3)	(27.9)
Other interest expense	(2.3)	(2.3)	(6.2)	(6.6)
Income from continuing operations before income taxes	92.2	96.9	285.2	286.8
Income taxes	(14.6)	(36)	(67)	(109.8)
Income from continuing operations	77.6	60.9	218.2	177
Income (loss) income from discontinued operations, net of tax	0.1	0.1	0.2	(0.3)
Net income	77.7	61	218.4	176.7
Comprehensive income	77.7	61	218.4	176.7
Comprehensive income attributable to Penske Automotive Group common stockholders	77.7	61	218.4	176.7
Non-Guarantor Subsidiaries | Reportable legal entities
Condensed consolidating statement of income
Revenues	2,596.7	2,477.4	8,355.6	7,239.2
Cost of sales	2,221.9	2,131.6	7,177.4	6,222.9
Gross profit	374.8	345.8	1,178.2	1,016.3
Selling, general and administrative expenses	299.9	285.4	922.6	814
Depreciation	11.5	10.5	34.7	29.5
Operating income	63.4	49.9	220.9	172.8
Floor plan interest expense	(5.6)	(5.3)	(17.4)	(14.3)
Other interest expense	(6.9)	(5.7)	(21.7)	(18.5)
Equity in earnings of affiliates	1	0.4	3.3	2.7
Income from continuing operations before income taxes	51.9	39.3	185.1	142.7
Income taxes	(10.2)	(7.8)	(37)	(29.2)
Income from continuing operations	41.7	31.5	148.1	113.5
Net income	41.7	31.5	148.1	113.5
Other comprehensive (loss) income, net of tax	(19.8)	31.9	(56.4)	93
Comprehensive income	21.9	63.4	91.7	206.5
Less: Comprehensive (loss) income attributable to non-controlling interests	(0.2)	0.6	(1)	3.8
Comprehensive income attributable to Penske Automotive Group common stockholders	$ 22.1	$ 62.8	$ 92.7	$ 202.7

Condensed Consolidating Finan_5

Condensed Consolidating Financial Information - Cash Flows (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Condensed consolidating statement of cash flows
Net cash provided by (used in) continuing operating activities	$ 535.9	$ 466.8
Investing activities:
Purchase of equipment and improvements	(188.5)	(180.1)
Proceeds from sale of dealerships	58.4	9
Proceeds from sale-leaseback transactions	10.7
Acquisition of additional ownership interest in Penske Truck Leasing		(239.1)
Acquisitions, net	(168.6)	(449.7)
Other	(3.5)	4.3
Net cash used in continuing investing activities	(291.5)	(855.6)
Financing activities:
Issuance of 3.75% senior subordinated notes		300
Net borrowings (repayments) of long-term debt	(41)	50.3
Net (repayments) borrowings of floor plan notes payable — non-trade	(59.6)	155.2
Payment of debt issuance costs		(4)
Repurchases of common stock	(55.8)	(18.5)
Dividends	(89.7)	(80.1)
Other	(6.2)	(5.8)
Net cash (used in) provided by continuing financing activities	(252.3)	397.1
Net cash provided by discontinued operations	0.3	2.7
Effect of exchange rate changes on cash and cash equivalents	(0.5)	2.2
Net change in cash and cash equivalents	(8.1)	13.2
Cash and cash equivalents, beginning of period	45.7	24
Cash and cash equivalents, end of period	37.6	37.2
Penske Automotive Group | Reportable legal entities
Condensed consolidating statement of cash flows
Net cash provided by (used in) continuing operating activities	16.1	(34.5)
Investing activities:
Purchase of equipment and improvements	(2.3)	(2.4)
Acquisition of additional ownership interest in Penske Truck Leasing		(239.1)
Other	(2.4)	4.6
Net cash used in continuing investing activities	(4.7)	(236.9)
Financing activities:
Issuance of 3.75% senior subordinated notes		300
Net borrowings (repayments) of long-term debt	(172)	(24)
Net (repayments) borrowings of floor plan notes payable — non-trade	(23.3)	63.7
Payment of debt issuance costs		(4)
Repurchases of common stock	(55.8)	(18.5)
Dividends	(89.7)	(80.1)
Other	(0.3)	(5.8)
Distributions from (to) parent	329.7	40.1
Net cash (used in) provided by continuing financing activities	(11.4)	271.4
Net change in cash and cash equivalents	0
Cash and cash equivalents, end of period	0
Guarantor Subsidiaries | Reportable legal entities
Condensed consolidating statement of cash flows
Net cash provided by (used in) continuing operating activities	356.2	359.5
Investing activities:
Purchase of equipment and improvements	(95.1)	(80)
Proceeds from sale of dealerships	55.9	9
Acquisitions, net		(316.9)
Net cash used in continuing investing activities	(39.2)	(387.9)
Financing activities:
Net borrowings (repayments) of long-term debt	41.6	8.6
Net (repayments) borrowings of floor plan notes payable — non-trade	(50.1)	43.2
Other	(5.9)
Distributions from (to) parent	(314.3)	(35.5)
Net cash (used in) provided by continuing financing activities	(328.7)	16.3
Net cash provided by discontinued operations	0.3	2.7
Net change in cash and cash equivalents	(11.4)	(9.4)
Cash and cash equivalents, beginning of period	14.8	9.4
Cash and cash equivalents, end of period	3.4
Non-Guarantor Subsidiaries | Reportable legal entities
Condensed consolidating statement of cash flows
Net cash provided by (used in) continuing operating activities	163.6	141.8
Investing activities:
Purchase of equipment and improvements	(91.1)	(97.7)
Proceeds from sale of dealerships	2.5
Proceeds from sale-leaseback transactions	10.7
Acquisitions, net	(168.6)	(132.8)
Other	(1.1)	(0.3)
Net cash used in continuing investing activities	(247.6)	(230.8)
Financing activities:
Net borrowings (repayments) of long-term debt	89.4	65.7
Net (repayments) borrowings of floor plan notes payable — non-trade	13.8	48.3
Distributions from (to) parent	(15.4)	(4.6)
Net cash (used in) provided by continuing financing activities	87.8	109.4
Effect of exchange rate changes on cash and cash equivalents	(0.5)	2.2
Net change in cash and cash equivalents	3.3	22.6
Cash and cash equivalents, beginning of period	30.9	14.6
Cash and cash equivalents, end of period	$ 34.2	$ 37.2