Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 29, 2019 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 1-12297 | |
Entity Registrant Name | Penske Automotive Group, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 22-3086739 | |
Entity Address, Address Line One | 2555 Telegraph Road | |
Entity Address, City or Town | Bloomfield Hills | |
Entity Address, State or Province | MI | |
Entity Address, Postal Zip Code | 48302-0954 | |
City Area Code | 248 | |
Local Phone Number | 648-2500 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | PAG | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 82,089,829 | |
Entity Central Index Key | 0001019849 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash and cash equivalents | $ 43.8 | $ 39.4 |
Accounts receivable, net of allowance for doubtful accounts of $5.6 and $5.4 | 944.4 | 929.1 |
Inventories | 3,978 | 4,040.1 |
Other current assets | 109.1 | 86.6 |
Total current assets | 5,075.3 | 5,095.2 |
Property and equipment, net | 2,308.9 | 2,250 |
Operating lease right-of-use assets | 2,380.9 | |
Goodwill | 1,749.3 | 1,752 |
Other indefinite-lived intangible assets | 485.7 | 486.2 |
Equity method investments | 1,342.2 | 1,305.2 |
Other long-term assets | 18.8 | 15.9 |
Total assets | 13,361.1 | 10,904.5 |
LIABILITIES AND EQUITY | ||
Floor plan notes payable | 2,350.3 | 2,362.2 |
Floor plan notes payable - non-trade | 1,435.5 | 1,428.6 |
Accounts payable | 638.5 | 598.2 |
Accrued expenses and other current liabilities | 651.8 | 566.6 |
Current portion of long-term debt | 93.3 | 92 |
Liabilities held for sale | 0.5 | 0.7 |
Total current liabilities | 5,169.9 | 5,048.3 |
Long-term debt | 2,134.2 | 2,124.7 |
Long-term operating lease liabilities | 2,330.3 | |
Deferred tax liabilities | 604.1 | 577.8 |
Other long-term liabilities | 461.6 | 519 |
Total liabilities | 10,700.1 | 8,269.8 |
Commitments and contingent liabilities (Note 11) | ||
Penske Automotive Group stockholders' equity: | ||
Preferred Stock, $0.0001 par value; 100,000 shares authorized; none issued and outstanding | ||
Common Stock | ||
Additional paid-in-capital | 356.5 | 477.8 |
Retained earnings | 2,524.3 | 2,365.8 |
Accumulated other comprehensive income (loss) | (240.3) | (234.5) |
Total Penske Automotive Group stockholders' equity | 2,640.5 | 2,609.1 |
Non-controlling interest | 20.5 | 25.6 |
Total equity | 2,661 | 2,634.7 |
Total liabilities and equity | 13,361.1 | 10,904.5 |
Non-voting Common Stock | ||
Penske Automotive Group stockholders' equity: | ||
Common Stock | ||
Class C Common Stock | ||
Penske Automotive Group stockholders' equity: | ||
Common Stock |
CONSOLIDATED CONDENSED BALANC_2
CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 5.6 | $ 5.4 |
Preferred Stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred Stock, shares authorized | 100,000 | 100,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
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 | 81,956,305 | 84,546,970 |
Common Stock, shares outstanding | 81,956,305 | 84,546,970 |
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 CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue: | ||||
Total revenues | $ 5,755.8 | $ 5,940.3 | $ 11,320.2 | $ 11,687.2 |
Cost of sales: | ||||
Total cost of sales | 4,888 | 5,050.5 | 9,600.9 | 9,933 |
Gross profit | 867.8 | 889.8 | 1,719.3 | 1,754.2 |
Selling, general and administrative expenses | 668.9 | 675.4 | 1,335.3 | 1,338.5 |
Depreciation | 27.1 | 25.7 | 53.5 | 51.3 |
Operating income | 171.8 | 188.7 | 330.5 | 364.4 |
Floor plan interest expense | (21) | (19.9) | (42.8) | (38.8) |
Other interest expense | (30.4) | (28.6) | (60.3) | (58.4) |
Equity in earnings of affiliates | 39.5 | 36 | 66.3 | 53.3 |
Income from continuing operations before income taxes | 159.9 | 176.2 | 293.7 | 320.5 |
Income taxes | (41.5) | (41) | (76.2) | (77.6) |
Income from continuing operations | 118.4 | 135.2 | 217.5 | 242.9 |
Income from discontinued operations, net of tax | 0.1 | 0.2 | 0.1 | |
Net income | 118.5 | 135.2 | 217.7 | 243 |
Less: Income (loss) attributable to non-controlling interests | 0.7 | 0.6 | (0.3) | 0.3 |
Net income attributable to Penske Automotive Group common stockholders | $ 117.8 | $ 134.6 | $ 218 | $ 242.7 |
Basic earnings per share attributable to Penske Automotive Group common stockholders: | ||||
Continuing operations (in dollars per share) | $ 1.42 | $ 1.59 | $ 2.61 | $ 2.84 |
Discontinued operations (in dollars per share) | ||||
Net income attributable to Penske Automotive Group common stockholders (in dollars per share) | $ 1.42 | $ 1.59 | $ 2.61 | $ 2.84 |
Shares used in determining basic earnings per share (in shares) | 82,872,330 | 84,941,932 | 83,625,142 | 85,443,607 |
Diluted earnings per share attributable to Penske Automotive Group common stockholders: | ||||
Continuing operations (in dollars per share) | $ 1.42 | $ 1.58 | $ 2.60 | $ 2.84 |
Discontinued operations (in dollars per share) | ||||
Net income attributable to Penske Automotive Group common stockholders (in dollars per share) | $ 1.42 | $ 1.58 | $ 2.61 | $ 2.84 |
Shares used in determining diluted earnings per share (in shares) | 82,912,330 | 84,981,932 | 83,665,142 | 85,483,607 |
Amounts attributable to Penske Automotive Group common stockholders: | ||||
Income from continuing operations | $ 118.4 | $ 135.2 | $ 217.5 | $ 242.9 |
Less: Income (loss) attributable to non-controlling interests | 0.7 | 0.6 | (0.3) | 0.3 |
Income from continuing operations, net of tax | 117.7 | 134.6 | 217.8 | 242.6 |
Income from discontinued operations, net of tax | 0.1 | 0.2 | 0.1 | |
Net income attributable to Penske Automotive Group common stockholders | $ 117.8 | $ 134.6 | $ 218 | $ 242.7 |
Cash dividends per share (in dollars per share) | $ 0.39 | $ 0.35 | $ 0.77 | $ 0.69 |
Retail Automotive Dealership | ||||
Revenue: | ||||
Total revenues | $ 5,196.3 | $ 5,455.5 | $ 10,287.5 | $ 10,751.5 |
Cost of sales: | ||||
Total cost of sales | 4,421.4 | 4,657.5 | 8,751.1 | 9,175.2 |
Retail Commercial Truck Dealership | ||||
Revenue: | ||||
Total revenues | 426.8 | 338.8 | 759.1 | 631.2 |
Cost of sales: | ||||
Total cost of sales | 368.3 | 286.4 | 646.2 | 532.2 |
Commercial Vehicle Distribution and Other | ||||
Revenue: | ||||
Total revenues | 132.7 | 146 | 273.6 | 304.5 |
Cost of sales: | ||||
Total cost of sales | $ 98.3 | $ 106.6 | $ 203.6 | $ 225.6 |
CONSOLIDATED CONDENSED STATEM_2
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 118.5 | $ 135.2 | $ 217.7 | $ 243 |
Other comprehensive income: | ||||
Foreign currency translation adjustment | (16.5) | (68.3) | (9.8) | (37.6) |
Other adjustments to comprehensive income, net | 2 | (4.5) | 3.8 | (3.4) |
Other comprehensive income, net of tax | (14.5) | (72.8) | (6) | (41) |
Comprehensive income | 104 | 62.4 | 211.7 | 202 |
Less: Comprehensive income (loss) attributable to non-controlling interests | 0.8 | (0.5) | (0.5) | (0.8) |
Comprehensive income attributable to Penske Automotive Group common stockholders | $ 103.2 | $ 62.9 | $ 212.2 | $ 202.8 |
CONSOLIDATED CONDENSED STATEM_3
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Operating Activities: | ||
Net income | $ 217.7 | $ 243 |
Adjustments to reconcile net income to net cash from continuing operating activities: | ||
Depreciation | 53.5 | 51.3 |
Earnings of equity method investments | (53.4) | (45.3) |
Income from discontinued operations, net of tax | (0.2) | (0.1) |
Deferred income taxes | 29.7 | 48.5 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (15.2) | 39.8 |
Inventories | 35.5 | 93.3 |
Floor plan notes payable | 15 | (56.7) |
Accounts payable and accrued expenses | 55.3 | 28.7 |
Other | (33.3) | 14.5 |
Net cash provided by continuing operating activities | 304.6 | 417 |
Investing Activities: | ||
Purchase of equipment and improvements | (134.5) | (118.8) |
Proceeds from sale of dealerships | 7.2 | 58.4 |
Proceeds from sale-leaseback transactions | 7.3 | 5.8 |
Acquisitions net, including repayment of sellers' floor plan notes payable of $0 and $25.8, respectively | (1.1) | (168.6) |
Other | (0.9) | (3) |
Net cash used in continuing investing activities | (122) | (226.2) |
Financing Activities: | ||
Proceeds from borrowings under U.S. credit agreement revolving credit line | 821 | 797 |
Repayments under U.S. credit agreement revolving credit line | (851) | (870) |
Net borrowings of other long-term debt | 39.8 | 96.1 |
Net borrowings (repayments) of floor plan notes payable - non-trade | 6.8 | (92.9) |
Repurchases of common stock | (130.6) | (55.8) |
Dividends | (64.5) | (59) |
Other | 0.4 | (6.1) |
Net cash used in by continuing financing activities | (178.1) | (190.7) |
Discontinued operations: | ||
Net cash provided by discontinued operating activities | 0.2 | |
Net cash provided by discontinued investing activities | ||
Net cash provided by discontinued financing activities | ||
Net cash provided by discontinued operations | 0.2 | |
Effect of exchange rate changes on cash and cash equivalents | (0.1) | (0.2) |
Net change in cash and cash equivalents | 4.4 | 0.1 |
Cash and cash equivalents, beginning of period | 39.4 | 45.7 |
Cash and cash equivalents, end of period | 43.8 | 45.8 |
Cash paid for: | ||
Interest | 102.6 | 95.9 |
Income taxes | $ 47.2 | 24.1 |
Non cash activities: | ||
Deferred consideration | $ 6.8 |
CONSOLIDATED CONDENSED STATEM_4
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS | ||
Repayment of Sellers' Floor Plan Notes Payable Dealership Acquisitions | $ 0 | $ 25.8 |
CONSOLIDATED CONDENSED STATEM_5
CONSOLIDATED CONDENSED STATEMENT OF EQUITY - 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 | ASC 606 | 6.6 | 6.6 | 6.6 | ||||
Equity compensation | 9 | 9 | 9 | ||||
Equity compensation (in shares) | 330,186 | ||||||
Repurchases of common stock | (55.8) | (55.8) | (55.8) | ||||
Repurchases of common stock (in shares) | (1,252,624) | ||||||
Dividends | (59) | (59) | (59) | ||||
Purchase of subsidiary shares from non-controlling interest | (1.4) | (1.4) | (3.1) | (4.5) | |||
Distributions to non-controlling interest | (0.7) | (0.7) | |||||
Foreign currency translation | (36.5) | (36.5) | (1.1) | (37.6) | |||
Other | (3.6) | (0.2) | (3.4) | 0.4 | (3.2) | ||
Net income | 242.7 | 242.7 | 0.3 | 243 | |||
Balance at Jun. 30, 2018 | 2,497.2 | 483.9 | 2,199.7 | (186.4) | 28.6 | 2,525.8 | |
Balance (in shares) at Jun. 30, 2018 | 84,865,069 | ||||||
Balance at Mar. 31, 2018 | 2,465.4 | 485.2 | 2,094.9 | (114.7) | 29 | 2,494.4 | |
Balance (in shares) at Mar. 31, 2018 | 84,975,410 | ||||||
Increase (decrease) in stockholders' equity | |||||||
Equity compensation | 4.5 | 4.5 | 4.5 | ||||
Equity compensation (in shares) | 9,267 | ||||||
Repurchases of common stock | (5.8) | (5.8) | (5.8) | ||||
Repurchases of common stock (in shares) | (119,608) | ||||||
Dividends | (29.8) | (29.8) | (29.8) | ||||
Distributions to non-controlling interest | (0.6) | (0.6) | |||||
Foreign currency translation | (67.2) | (67.2) | (1.1) | (68.3) | |||
Other | (4.5) | (4.5) | 0.7 | (3.8) | |||
Net income | 134.6 | 134.6 | 0.6 | 135.2 | |||
Balance at Jun. 30, 2018 | 2,497.2 | 483.9 | 2,199.7 | (186.4) | 28.6 | 2,525.8 | |
Balance (in shares) at Jun. 30, 2018 | 84,865,069 | ||||||
Balance at Dec. 31, 2018 | 2,609.1 | 477.8 | 2,365.8 | (234.5) | 25.6 | 2,634.7 | |
Balance (in shares) at Dec. 31, 2018 | 84,546,970 | ||||||
Increase (decrease) in stockholders' equity | |||||||
Adoption of ASC | ASC 842 | 5 | 5 | 5 | ||||
Equity compensation | 9.3 | 9.3 | 9.3 | ||||
Equity compensation (in shares) | 374,549 | ||||||
Repurchases of common stock | (130.6) | (130.6) | (130.6) | ||||
Repurchases of common stock (in shares) | (2,965,214) | ||||||
Dividends | (64.5) | (64.5) | (64.5) | ||||
Purchase of subsidiary shares from non-controlling interest | (4.8) | (4.8) | |||||
Distributions to non-controlling interest | (0.4) | (0.4) | |||||
Foreign currency translation | (9.6) | (9.6) | (0.2) | (9.8) | |||
Other | 3.8 | 3.8 | 0.6 | 4.4 | |||
Net income | 218 | 218 | (0.3) | 217.7 | |||
Balance at Jun. 30, 2019 | 2,640.5 | 356.5 | 2,524.3 | (240.3) | 20.5 | 2,661 | |
Balance (in shares) at Jun. 30, 2019 | 81,956,305 | ||||||
Balance at Mar. 31, 2019 | 2,641.2 | 428.1 | 2,438.8 | (225.7) | 19.7 | 2,660.9 | |
Balance (in shares) at Mar. 31, 2019 | 83,651,509 | ||||||
Increase (decrease) in stockholders' equity | |||||||
Equity compensation | 4.6 | 4.6 | 4.6 | ||||
Equity compensation (in shares) | 11,662 | ||||||
Repurchases of common stock | (76.2) | (76.2) | (76.2) | ||||
Repurchases of common stock (in shares) | (1,706,866) | ||||||
Dividends | (32.3) | (32.3) | (32.3) | ||||
Distributions to non-controlling interest | (0.3) | (0.3) | |||||
Foreign currency translation | (16.6) | (16.6) | 0.1 | (16.5) | |||
Other | 2 | 2 | 0.3 | 2.3 | |||
Net income | 117.8 | 117.8 | 0.7 | 118.5 | |||
Balance at Jun. 30, 2019 | $ 2,640.5 | $ 356.5 | $ 2,524.3 | $ (240.3) | $ 20.5 | $ 2,661 | |
Balance (in shares) at Jun. 30, 2019 | 81,956,305 |
Interim Financial Statements
Interim Financial Statements | 6 Months Ended |
Jun. 30, 2019 | |
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 also operate fourteen used vehicle supercenters in the U.S. and the U.K. which retail and wholesale previously owned vehicles under a one price, “no-haggle” methodology. In the first quarter of 2017, we acquired CarSense in the U.S. and CarShop in the U.K. In the first quarter of 2018, we acquired The Car People in the U.K., which began to operate under the CarShop name in June 2019. 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 nine retail locations and a vehicle preparation center. During the six months ended June 30, 2019, we disposed of twelve retail automotive franchises, and were awarded one retail automotive franchise. Of the franchises disposed of, six represented franchises in the U.S., and six represented franchises in Germany. In the first quarter of 2019, we acquired an additional 8.4% interest in the Jacobs Group, one of our German automotive dealership joint ventures, and now own an 87.8% interest in the Jacobs Group. Retail Commercial Truck Dealership. In July 2019, our Premier Truck Group subsidiary acquired Warner Truck Centers, a retailer and services provider for Freightliner and Western Star medium and heavy-duty commercial trucks with six locations in Utah and Idaho. Commercial Vehicle Distribution We are also a leading distributor of diesel and gas engines and power systems, principally representing MTU, Detroit Diesel, Allison Transmission, MTU Onsite Energy, and Rolls Royce Power Systems. This business, known as Penske Power Systems (“PPS”), offers products across the on- and off-highway markets, including in the construction, mining, marine, and defense sectors, 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. 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 June 30, 2019 and December 31, 2018 and for the three and six month periods ended June 30, 2019 and 2018 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, 2018, 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 the carrying values and fair values of our senior subordinated notes and our fixed rate mortgage facilities are as follows: June 30, 2019 December 31, 2018 Carrying Value Fair Value Carrying Value Fair Value 3.75% senior subordinated notes due 2020 $ 298.5 $ 299.8 $ 297.9 $ 291.9 5.75% senior subordinated notes due 2022 547.2 556.8 546.8 537.6 5.375% senior subordinated notes due 2024 297.8 304.5 297.6 278.7 5.50% senior subordinated notes due 2026 495.4 514.9 495.1 465.2 Mortgage facilities 402.1 408.1 289.6 290.2 Assets Held for Sale and Discontinued Operations We had no entities newly classified as held for sale during the six months ended June 30, 2019 or 2018 that met the criteria to be classified as discontinued operations. Disposals During the six months ended June 30, 2019, we disposed of twelve retail automotive franchises and one retail commercial truck location. The results of operations for these businesses are included within continuing operations for the three and six months ended June 30, 2019 and 2018, 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. Recent Accounting Pronouncements 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. 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 adopted this ASU, including several practical expedients, on January 1, 2019 using the optional transition method. The package of practical expedients elected allows us to not reassess (1) whether any expired or existing contracts are or contain leases (2) the lease classification for any expired or existing leases, and (3) initial direct costs for any expired or existing leases. We also elected the practical expedient to not separate lease and non-lease components for all leases and have accounted for the combined lease and non-lease components as a single lease component. Under the optional transition method, we applied ASC 840 in the comparative periods presented and provide the disclosures required by ASC 840 for all periods that continue to be presented in accordance with ASC 840, in addition to the disclosures required per ASC 842. The expense recognition for operating leases under ASC 842 is substantially consistent with ASC 840 and the adoption did not have an impact on our consolidated statements of income, comprehensive income, or cash flows. As part of the adoption of ASC 842, we performed an assessment of the impact the new lease recognition standard will have on our consolidated financial statements. We lease a significant amount of our dealership and other properties, which are classified as operating leases. We also have various operating leases relating to office and computer equipment, shop equipment, service loaner and company owned vehicles, and other miscellaneous items. We do not have any material leases, individually or in the aggregate, classified as a finance leasing arrangement under the new lease recognition standard. Upon adoption of ASC 842, we recognized our lease liabilities and right-of-use assets on our consolidated condensed balance sheet at the present value of these future payments. We also made an accounting policy to exclude leases with an initial term of 12 months or less from the balance sheet as permitted under ASC 842. We also evaluated, documented, and implemented required changes in internal controls as part of our adoption of the new lease recognition standard. These changes include implementing updated accounting policies affected by ASC 842 and implementing a new information technology application to calculate our right-of-use assets and lease liabilities and required disclosures. See Note 3 “Leases” for additional disclosures in accordance with the new lease standard. As a result of the adoption of ASC 842 on January 1, 2019, we recorded lease liabilities and right-of-use assets on our consolidated condensed balance sheet. The adoption also resulted in a net, after-tax cumulative effect adjustment to retained earnings of approximately $5.0 million. The details of this adjustment are summarized below. Balance at Adjustments Due Balance at December 31, 2018 to ASC 842 January 1, 2019 Assets Operating lease right-of-use assets $ — $ 2,425.6 $ 2,425.6 Liabilities and Equity Accrued expenses and other current liabilities $ 566.6 $ 70.2 $ 636.8 Long-term operating lease liabilities — 2,387.5 2,387.5 Deferred tax liabilities 577.8 0.9 578.7 Other long-term liabilities 519.0 (38.0) 481.0 Retained earnings 2,365.8 5.0 2,370.8 Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This ASU replaces the current incurred loss impairment methodology of recognizing credit losses when a loss is probable, with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to assess credit loss estimates. This ASU is effective for financial statements issued for annual periods beginning after December 15, 2019, with early adoption permitted. We are currently evaluating the impacts the adoption of this accounting standard update will have on our consolidated financial statements. 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 did not 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 do not expect the adoption of this accounting standard update to have a significant impact on our consolidated financial statements. |
Revenues
Revenues | 6 Months Ended |
Jun. 30, 2019 | |
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, 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. Dealership Parts and Service Sales. Dealership Finance and Insurance Sales. Commercial Vehicle Distribution and Other Revenue Recognition Penske Commercial Vehicles Australia. 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 Penske Power Systems. 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. Service and parts revenue represented $69.0 million and $134.4 million for the three and six months ended June 30, 2019 and $73.2 million and $142.4 million three and six months ended June 30, 2018, respectively. Other. Retail Automotive Dealership The following tables disaggregate our retail automotive reportable segment revenue by product type and geographic location for the three and six months ended June 30, 2019 and 2018: Three Months Ended June 30, Six Months Ended June 30, Retail Automotive Dealership Revenue 2019 2018 2019 2018 New vehicle $ 2,310.4 $ 2,528.6 $ 4,541.6 $ 4,975.4 Used vehicle 1,852.7 1,896.9 3,704.7 3,763.7 Finance and insurance, net 165.5 162.9 325.5 323.7 Service and parts 550.7 547.8 1,110.5 1,091.3 Fleet and wholesale 317.0 319.3 605.2 597.4 Total retail automotive dealership revenue $ 5,196.3 $ 5,455.5 $ 10,287.5 $ 10,751.5 Three Months Ended June 30, Six Months Ended June 30, Retail Automotive Dealership Revenue 2019 2018 2019 2018 U.S. $ 2,905.9 $ 2,953.9 $ 5,628.6 $ 5,704.8 U.K. 1,928.2 2,107.0 3,968.1 4,299.8 Germany and Italy 362.2 394.6 690.8 746.9 Total retail automotive dealership revenue $ 5,196.3 $ 5,455.5 $ 10,287.5 $ 10,751.5 Retail Commercial Truck Dealership The following table disaggregates our retail commercial truck reportable segment revenue by product type for the three and six months ended June 30, 2019 and 2018: Three Months Ended June 30, Six Months Ended June 30, Retail Commercial Truck Dealership Revenue 2019 2018 2019 2018 New truck $ 296.0 $ 210.7 $ 503.4 $ 381.1 Used truck 27.6 27.3 51.7 53.8 Finance and insurance, net 2.9 3.6 5.9 6.8 Service and parts 94.6 92.2 186.1 182.6 Other 5.7 5.0 12.0 6.9 Total retail commercial truck dealership revenue $ 426.8 $ 338.8 $ 759.1 $ 631.2 Commercial Vehicle Distribution and Other The following table disaggregates our other reportable segment revenue by business for the three and six months ended June 30, 2019 and 2018: Three Months Ended June 30, Six Months Ended June 30, Commercial Vehicle Distribution and Other 2019 2018 2019 2018 Commercial Vehicles Australia $ 132.7 $ 145.0 $ 273.6 $ 302.7 Other — 1.0 — 1.8 Total commercial vehicle distribution and other revenue $ 132.7 $ 146.0 $ 273.6 $ 304.5 Contract Balances The following table summarizes our accounts receivable and unearned revenues as of June 30, 2019 and December 31, 2018: June 30, December 31, 2019 2018 Accounts receivable Contracts in transit $ 330.4 $ 314.2 Vehicle receivables 251.0 266.9 Manufacturer receivables 200.9 211.3 Trade receivables 154.6 129.1 Accrued expenses Unearned revenues $ 272.0 $ 269.8 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, 2018, $174.7 million was recognized as revenue during the six months ended June 30, 2019. 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. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases | |
Leases | 3. Leases We lease land and facilities, including certain dealerships and office space. Our property leases are generally for an initial period between 5 and 20 years, and are typically structured to include renewal options at our election. We include renewal options that we are reasonably certain to exercise in the measurement our lease liabilities. We also have equipment leases that primarily relate to office and computer equipment, service and shop equipment, company owned vehicles, and other miscellaneous items. These leases are generally for a period of less than 5 years. We do not have any material leases, individually or in the aggregate, classified as a finance leasing arrangement. We estimate the total undiscounted rent obligations under these leases, including any extension periods that we are reasonably certain to exercise, to be $5.5 billion as of June 30, 2019. Some of our lease arrangements include rental payments that are adjusted based on an index or rate, such as the Consumer Price Index (CPI). As the rate implicit in the lease is generally not readily determinable for our operating leases, the discount rates used to determine the present value of our lease liability are based on our incremental borrowing rate at the lease commencement date and commensurate with the remaining lease term. Our incremental borrowing rate for a lease is the rate of interest we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Leases with an initial term of 12 months or less are not recorded on the balance sheet. 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. In connection with the sale, relocation and closure of certain of our franchises, we have entered into a number of third-party sublease agreements. The rent paid by our sub-tenants on such properties for the three and six months ended June 30, 2019 was $5.7 million and $11.1 million, respectively. We have in the past and may in the future enter into sale-leaseback transactions to finance certain property acquisitions and capital expenditures, pursuant to which we sell property to third parties and agree to lease those assets back for a certain period of time. Such sales generate proceeds that vary from period to period. Proceeds from sale-leaseback transactions were $7.3 million during the six months ended June 30, 2019. We have no material leases that have not yet commenced as of June 30, 2019. The following table summarizes our net operating lease cost during the three and six months ended June 30, 2019: Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 Lease Cost Operating lease cost $ 60.5 $ 124.0 Sublease income (5.7) (11.1) Total lease cost $ 54.8 $ 112.9 (1) Includes short-term leases and variable lease costs, which are immaterial. The following tables summarize supplemental cash flow information related to our operating leases and the weighted average remaining lease term and discount rate of our leases: Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 Other Information Gains on sale and leaseback transactions, net $ — $ (0.2) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases 58.6 118.3 Right-of-use assets obtained in exchange for operating lease liabilities 2.3 2.3 June 30, 2019 Lease Term and Discount Rate Weighted-average remaining lease term - operating leases 25 years Weighted-average discount rate - operating leases 6.4% The following table summarizes the maturity of our lease liabilities on an undiscounted cash flow basis and a reconciliation to the operating lease liabilities recognized on our consolidated condensed balance sheet as of June 30, 2019: Maturity of Lease Liabilities 2019 $ 122.3 2020 239.3 2021 233.5 2022 230.0 2023 222.5 2024 215.4 2025 and thereafter 4,248.6 Total future minimum lease payments $ 5,511.6 Less: Imputed interest (3,095.6) Present value of future minimum lease payments $ 2,416.0 Current operating lease liabilities $ 85.7 Long-term operating lease liabilities 2,330.3 Total operating lease liabilities $ 2,416.0 (1) Excludes the six months ended June 30, 2019. (2) Included within “Accrued expenses and other current liabilities” on Consolidated Condensed Balance Sheet as of June 30, 2019. Minimum future rental payments required under operating leases in effect as of December 31, 2018 are as follows: 2019 $ 222.5 2020 220.5 2021 217.4 2022 216.0 2023 212.0 2024 and thereafter 4,344.4 Total future minimum lease payments $ 5,432.8 |
Significant Equity Method Inves
Significant Equity Method Investees | 6 Months Ended |
Jun. 30, 2019 | |
Significant Equity Method Investees | |
Significant Equity Method Investees | 4. Significant Equity Method Investees We hold a 28.9% ownership interest in Penske Truck Leasing Co., L.P. (“PTL”), a leading provider of transportation and supply chain services. Our investment in PTL is accounted for using the equity method of accounting. For the six months ended June 30, 2019, PTL equity earnings represented a significant portion of our consolidated pre-tax income. We recorded $63.8 million and $51.0 million during the six months ended June 30, 2019 and 2018, respectively, on our statements of income under the caption “Equity in earnings of affiliates” related to earnings from PTL investment. Rule 10-01(b)(1) of Regulation S-X requires separate interim period summarized income statement information for each 50-percent-or-less-owned subsidiary not consolidated that would have been a significant subsidiary for annual periods in accordance with Rule 3-09 of Regulation S-X. Pursuant to this requirement, unaudited summarized income statement information for PTL for the six months ended June 30, 2019 and 2018 is as follows: Six Months Ended June 30, 2019 2018 Revenues $ 4,390 $ 3,963 Gross profit 896 794 Income from continuing operations 221 176 Net income 221 176 |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2019 | |
Inventories | |
Inventories | 5. Inventories Inventories consisted of the following: June 30, December 31, 2019 2018 Retail automotive dealership new vehicles $ 2,307.9 $ 2,397.0 Retail automotive dealership used vehicles 1,053.8 1,060.8 Retail automotive parts, accessories and other 130.4 140.8 Retail commercial truck dealership vehicles and parts 258.9 207.9 Commercial vehicle distribution vehicles, parts and engines 227.0 233.6 Total inventories $ 3,978.0 $ 4,040.1 We receive credits from certain vehicle manufacturers that reduce cost of sales when the vehicles are sold. Such credits amounted to $12.8 million and $13.6 million during the three months ended June 30, 2019 and 2018, respectively, and $24.9 million and $25.6 million during the six months ended June 30, 2019 and 2018, respectively. |
Business Combinations
Business Combinations | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations | |
Business Combinations | 6. Business Combinations During the six months ended June 30, 2019, we acquired one dealership related to our Commercial Vehicle Distribution business in New Zealand. During the six months ended June 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. 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 six months ended June 30, 2019 and 2018 follows: June 30, 2019 2018 Accounts receivable $ — $ 3.6 Inventories 0.5 62.8 Other current assets — — Property and equipment 0.2 52.6 Indefinite-lived intangibles 0.4 73.9 Other noncurrent assets 0.1 — Current liabilities (0.1) (16.9) Noncurrent liabilities — (0.6) Total consideration 1.1 175.4 Deferred consideration — (6.8) Consideration transferred through common stock issuance — — Contingent consideration — — Seller financed/assumed debt — — Total cash used in acquisitions $ 1.1 $ 168.6 The following unaudited consolidated pro forma results of operations of PAG for the three and six months ended June 30, 2019 and 2018 give effect to acquisitions consummated during 2019 and 2018 as if they had occurred effective at the beginning of the periods: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Revenues $ 5,755.8 $ 6,003.1 $ 11,321.5 $ 11,833.1 Income from continuing operations 117.7 134.6 217.6 243.0 Net income 117.8 134.7 217.8 243.2 Income from continuing operations per diluted common share $ 1.42 $ 1.58 $ 2.60 $ 2.84 Net income per diluted common share $ 1.42 $ 1.59 $ 2.60 $ 2.84 |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2019 | |
Intangible Assets | |
Intangible Assets | 7. Intangible Assets Following is a summary of the changes in the carrying amount of goodwill and other indefinite-lived intangible assets during the six months ended June 30, 2019: Other Indefinite- Lived Intangible Goodwill Assets Balance, January 1, 2019 $ 1,752.0 $ 486.2 Additions 0.4 — Disposals (0.7) — Foreign currency translation (2.4) (0.5) Balance, June 30, 2019 $ 1,749.3 $ 485.7 The additions and disposals during the six months ended June 30, 2019 were within our Retail Automotive reportable segment and our Other segment. We sold eight retail automotive franchises, terminated four retail automotive franchises, and acquired one dealership related to our Commercial Vehicle Distribution business. As of June 30, 2019, the goodwill balance within our Retail Automotive, Retail Commercial Truck, and Other reportable segments was $1,508.9 million, $163.2 million and $77.2 million, respectively. |
Vehicle Financing
Vehicle Financing | 6 Months Ended |
Jun. 30, 2019 | |
Vehicle Financing | |
Vehicle Financing | 8. 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 2.3% for the six months ended June 30, 2019 and 2.1% for the six months ended June 30, 2018. 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 | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share | |
Earnings Per Share | 9. 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 six months ended June 30, 2019 and 2018 follows: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Weighted average number of common shares outstanding 82,872,330 84,941,932 83,625,142 85,443,607 Effect of non-participatory equity compensation 40,000 40,000 40,000 40,000 Weighted average number of common shares outstanding, including effect of dilutive securities 82,912,330 84,981,932 83,665,142 85,483,607 |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2019 | |
Long-Term Debt | |
Long-Term Debt | 10. Long-Term Debt Long-term debt consisted of the following: June 30, December 31, 2019 2018 U.S. credit agreement — revolving credit line $ — $ 30.0 U.K. credit agreement — revolving credit line 92.7 163.3 U.K. credit agreement — overdraft line of credit — 1.8 3.75% senior subordinated notes due 2020 298.5 297.9 5.75% senior subordinated notes due 2022 547.2 546.8 5.375% senior subordinated notes due 2024 297.8 297.6 5.50% senior subordinated notes due 2026 495.4 495.1 Australia capital loan agreement 32.6 33.6 Australia working capital loan agreement — 6.1 Mortgage facilities 402.1 289.6 Other 61.2 54.9 Total long-term debt 2,227.5 2,216.7 Less: current portion (93.3) (92.0) Net long-term debt $ 2,134.2 $ 2,124.7 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 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, 2022. In April 2019, we and the lenders extended the term of this facility one year to September 30, 2022, pursuant to its “evergreen” extension provisions. In June 2019, we amended the U.S. credit agreement to provide additional covenant flexibility in respect of permitted mortgage indebtedness. In July 2019, we amended the U.S. credit agreement to provide for the issuance of up to $50 million of letters of credit within the existing $700 million facility limit. 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 June 30, 2019, we had no outstanding revolver borrowings 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 National Westminster Bank plc and BMW Financial Services (GB) Limited, and an additional demand overdraft line of credit (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 12, 2023. The revolving loans bear interest between defined LIBOR plus 1.10% and defined LIBOR plus 2.10%. The U.K. credit agreement also includes a £100.0 million “accordion” feature which allows the U.K. subsidiaries to request up to an additional £100.0 million of facility capacity. The lenders may agree to provide the additional capacity, and, if not, the U.K. subsidiaries may add an additional lender, if available, to the facility to provide such additional capacity. As of June 30, 2019, outstanding loans under the U.K. credit agreement amounted to £73.0 million ($92.7 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. Senior Subordinated Notes We have issued the following senior subordinated notes: Description Maturity Date Interest Payment Dates Principal Amount 3.75% Notes August 15, 2020 February 15, August 15 $300 million 5.75% Notes October 1, 2022 April 1, October 1 $550 million 5.375% Notes December 1, 2024 June 1, December 1 $300 million 5.50% Notes May 15, 2026 May 15, November 15 $500 million Each of these notes are our unsecured, senior subordinated obligations and are guaranteed on an unsecured senior subordinated basis by our 100% owned U.S. subsidiaries. Each also contain customary negative covenants and events of default. If we experience certain “change of control” events specified in the indentures, holders of these 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. Optional redemption. 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. We may redeem the 5.75% Notes for cash at the redemption prices noted in the indenture, plus any accrued and unpaid interest. 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. 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. 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 June 30, 2019, we had AU $46.5 million ($32.6 million) outstanding under the capital loan agreement and no outstanding borrowings 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 June 30, 2019, we owed $402.1 million of principal under our mortgage facilities. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingent Liabilities | |
Commitments and Contingent Liabilities | 11. 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 June 30, 2019, 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 lease land and facilities, including certain dealerships and office space. 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. Refer to the disclosures provided in Note 3 for further description of our leases. 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 $31.6 million of letters of credit outstanding as of June 30, 2019, and have posted $20.5 million of surety bonds in the ordinary course of business. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2019 | |
Equity | |
Equity | 12. Equity During the three months ended June 30, 2019, we repurchased 1,591,917 shares of our common stock for $71.3 million, or an average of $44.79 per share, under our securities repurchase program approved by our Board of Directors, including 256,369 shares for $11.4 million (or $44.40 per share) from Roger S. Penske. During the six months ended June 30, 2019, we repurchased 2,850,265 shares of our common stock for $125.7 million, or an average of $44.08 per share, under this program. As of June 30, 2019, our remaining authorization under our securities repurchase program was $74.4 million. During the second quarter of 2019, we also acquired 114,949 shares of our common stock for $4.9 million, or an average of $42.72 per share, from employees in connection with a net share settlement feature of employee equity awards. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss) | |
Accumulated Other Comprehensive Income/(Loss) | 13. 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 six months ended June 30, 2019 and 2018, respectively, attributable to Penske Automotive Group common stockholders follows: Three Months Ended June 30, 2019 Foreign Currency Translation Other Total Balance at March 31, 2019 $ (201.3) $ (24.4) $ (225.7) Other comprehensive income before reclassifications (16.6) 2.0 (14.6) Amounts reclassified from accumulated other comprehensive income — net of tax — — — Net current period other comprehensive income (16.6) 2.0 (14.6) Balance at June 30, 2019 $ (217.9) $ (22.4) $ (240.3) Three Months Ended June 30, 2018 Foreign Currency Translation Other Total Balance at March 31, 2018 $ (103.3) $ (11.4) $ (114.7) Other comprehensive income before reclassifications (67.2) (4.5) (71.7) Amounts reclassified from accumulated other comprehensive income — net of tax — — — Net current period other comprehensive income (67.2) (4.5) (71.7) Balance at June 30, 2018 $ (170.5) $ (15.9) $ (186.4) Six Months Ended June 30, 2019 Foreign Currency Translation Other Total Balance at December 31, 2018 $ (208.3) $ (26.2) $ (234.5) Other comprehensive income before reclassifications (9.6) 3.8 (5.8) Amounts reclassified from accumulated other comprehensive income — net of tax — — — Net current period other comprehensive income (9.6) 3.8 (5.8) Balance at June 30, 2019 $ (217.9) $ (22.4) $ (240.3) Six Months Ended June 30, 2018 Foreign Currency Translation Other Total Balance at December 31, 2017 $ (134.0) $ (12.5) $ (146.5) Other comprehensive income before reclassifications (36.5) (3.4) (39.9) Amounts reclassified from accumulated other comprehensive income — net of tax — — — Net current period other comprehensive income (36.5) (3.4) (39.9) Balance at June 30, 2018 $ (170.5) $ (15.9) $ (186.4) |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2019 | |
Segment Information | |
Segment Information | 14. 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 six months ended June 30, 2019 and 2018 follows: Three Months Ended June 30 Retail Retail Commercial Non-Automotive Intersegment Automotive Truck Other Investments Elimination Total Revenues 2019 $ 5,196.3 $ 426.8 $ 132.7 $ — $ — $ 5,755.8 2018 5,455.5 338.8 146.0 — — 5,940.3 Segment income 2019 $ 98.1 $ 18.9 $ 4.9 $ 38.0 $ — $ 159.9 2018 117.0 16.0 8.2 35.0 — 176.2 Six Months Ended June 30 Retail Retail Commercial Non-Automotive Intersegment Automotive Truck Other Investments Elimination Total Revenues 2019 $ 10,287.5 $ 759.1 $ 273.6 $ — $ — $ 11,320.2 2018 10,751.5 631.2 304.5 — — 11,687.2 Segment income 2019 $ 183.0 $ 34.8 $ 12.1 $ 63.8 $ — $ 293.7 2018 223.6 28.1 17.8 51.0 — 320.5 |
Condensed Consolidating Financi
Condensed Consolidating Financial Information | 6 Months Ended |
Jun. 30, 2019 | |
Condensed Consolidating Financial Information | |
Condensed Consolidating Financial Information | 15. Condensed Consolidating Financial Information The following tables include condensed consolidating financial information as of June 30, 2019 and December 31, 2018 and for the three and six month periods ended June 30, 2019 and 2018 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 June 30, 2019 Penske Total Automotive Guarantor Non-Guarantor Company Eliminations Group Subsidiaries Subsidiaries Cash and cash equivalents $ 43.8 $ — $ — $ 2.5 $ 41.3 Accounts receivable, net 944.4 (490.9) 490.9 462.3 482.1 Inventories 3,978.0 — — 1,966.1 2,011.9 Other current assets 109.1 — 8.6 21.8 78.7 Total current assets 5,075.3 (490.9) 499.5 2,452.7 2,614.0 Property and equipment, net 2,308.9 — 3.8 1,101.0 1,204.1 Operating lease right-of-use assets 2,380.9 — 9.5 1,600.0 771.4 Intangible assets 2,235.0 — — 1,422.2 812.8 Equity method investments 1,342.2 — 1,276.4 — 65.8 Other long-term assets 18.8 (2,830.9) 2,838.6 2.8 8.3 Total assets $ 13,361.1 $ (3,321.8) $ 4,627.8 $ 6,578.7 $ 5,476.4 Floor plan notes payable $ 2,350.3 $ — $ — $ 1,350.6 $ 999.7 Floor plan notes payable — non-trade 1,435.5 — 225.9 473.1 736.5 Accounts payable 638.5 — 4.9 177.5 456.1 Accrued expenses and other current liabilities 651.8 (490.9) 1.7 222.0 919.0 Current portion of long-term debt 93.3 — — 10.4 82.9 Liabilities held for sale 0.5 — — 0.5 — Total current liabilities 5,169.9 (490.9) 232.5 2,234.1 3,194.2 Long-term debt 2,134.2 (82.3) 1,725.2 259.0 232.3 Long-term operating lease liabilities 2,330.3 — 9.1 1,573.0 748.2 Deferred tax liabilities 604.1 — — 598.9 5.2 Other long-term liabilities 461.6 — — 32.0 429.6 Total liabilities 10,700.1 (573.2) 1,966.8 4,697.0 4,609.5 Total equity 2,661.0 (2,748.6) 2,661.0 1,881.7 866.9 Total liabilities and equity $ 13,361.1 $ (3,321.8) $ 4,627.8 $ 6,578.7 $ 5,476.4 CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2018 Penske Total Automotive Guarantor Non-Guarantor Company Eliminations Group Subsidiaries Subsidiaries Cash and cash equivalents $ 39.4 $ — $ — $ 12.9 $ 26.5 Accounts receivable, net 929.1 (481.7) 481.7 507.1 422.0 Inventories 4,040.1 — — 1,961.6 2,078.5 Other current assets 86.6 — 10.6 17.8 58.2 Total current assets 5,095.2 (481.7) 492.3 2,499.4 2,585.2 Property and equipment, net 2,250.0 — 3.9 1,077.7 1,168.4 Intangible assets 2,238.2 — — 1,422.6 815.6 Equity method investments 1,305.2 — 1,239.9 — 65.3 Other long-term assets 15.9 (2,814.3) 2,821.0 2.9 6.3 Total assets $ 10,904.5 $ (3,296.0) $ 4,557.1 $ 5,002.6 $ 4,640.8 Floor plan notes payable $ 2,362.2 $ — $ — $ 1,348.3 $ 1,013.9 Floor plan notes payable — non-trade 1,428.6 — 232.3 505.9 690.4 Accounts payable 598.2 — 4.9 196.6 396.7 Accrued expenses 566.6 (481.7) 1.4 160.2 886.7 Current portion of long-term debt 92.0 — — 6.3 85.7 Liabilities held for sale 0.7 — — 0.7 — Total current liabilities 5,048.3 (481.7) 238.6 2,218.0 3,073.4 Long-term debt 2,124.7 (88.6) 1,683.8 225.7 303.8 Deferred tax liabilities 577.8 — — 570.5 7.3 Other long-term liabilities 519.0 — — 57.6 461.4 Total liabilities 8,269.8 (570.3) 1,922.4 3,071.8 3,845.9 Total equity 2,634.7 (2,725.7) 2,634.7 1,930.8 794.9 Total liabilities and equity $ 10,904.5 $ (3,296.0) $ 4,557.1 $ 5,002.6 $ 4,640.8 CONDENSED CONSOLIDATING STATEMENT OF INCOME Three Months Ended June 30, 2019 Penske Total Automotive Guarantor Non-Guarantor Company Eliminations Group Subsidiaries Subsidiaries Revenues $ 5,755.8 $ — $ — $ 3,127.6 $ 2,628.2 Cost of sales 4,888.0 — — 2,628.9 2,259.1 Gross profit 867.8 — — 498.7 369.1 Selling, general and administrative expenses 668.9 — 6.8 364.5 297.6 Depreciation 27.1 — 0.4 14.6 12.1 Operating income 171.8 — (7.2) 119.6 59.4 Floor plan interest expense (21.0) — (2.4) (14.3) (4.3) Other interest expense (30.4) — (19.3) (3.0) (8.1) Equity in earnings of affiliates 39.5 — 38.0 — 1.5 Equity in earnings of subsidiaries — (150.0) 150.0 — — Income from continuing operations before income taxes 159.9 (150.0) 159.1 102.3 48.5 Income taxes (41.5) 39.1 (41.5) (29.5) (9.6) Income from continuing operations 118.4 (110.9) 117.6 72.8 38.9 Income from discontinued operations, net of tax 0.1 (0.1) 0.1 0.1 — Net income 118.5 (111.0) 117.7 72.9 38.9 Other comprehensive (loss) income, net of tax (14.5) 17.2 (14.5) — (17.2) Comprehensive income 104.0 (93.8) 103.2 72.9 21.7 Less: Comprehensive income (loss) attributable to non-controlling interests 0.8 (0.2) 0.2 — 0.8 Comprehensive income attributable to Penske Automotive Group common stockholders $ 103.2 $ (93.6) $ 103.0 $ 72.9 $ 20.9 CONDENSED CONSOLIDATING STATEMENT OF INCOME Three Months Ended June 30, 2018 Penske Total Automotive Guarantor Non-Guarantor Company Eliminations Group Subsidiaries Subsidiaries Revenues $ 5,940.3 $ — $ — $ 3,071.8 $ 2,868.5 Cost of sales 5,050.5 — — 2,582.3 2,468.2 Gross profit 889.8 — — 489.5 400.3 Selling, general and administrative expenses 675.4 — 6.6 359.7 309.1 Depreciation 25.7 — 0.4 13.7 11.6 Operating income 188.7 — (7.0) 116.1 79.6 Floor plan interest expense (19.9) — (1.8) (12.3) (5.8) Other interest expense (28.6) — (18.9) (2.0) (7.7) Equity in earnings of affiliates 36.0 — 35.0 — 1.0 Equity in earnings of subsidiaries — (168.3) 168.3 — — Income from continuing operations before income taxes 176.2 (168.3) 175.6 101.8 67.1 Income taxes (41.0) 39.4 (41.0) (27.4) (12.0) Income from continuing operations 135.2 (128.9) 134.6 74.4 55.1 Income from discontinued operations, net of tax — — — — — Net income 135.2 (128.9) 134.6 74.4 55.1 Other comprehensive (loss) income, net of tax (72.8) 68.1 (72.8) — (68.1) Comprehensive income 62.4 (60.8) 61.8 74.4 (13.0) Less: Comprehensive (loss) income attributable to non-controlling interests (0.5) 1.1 (1.1) — (0.5) Comprehensive income attributable to Penske Automotive Group common stockholders $ 62.9 $ (61.9) $ 62.9 $ 74.4 $ (12.5) CONDENSED CONSOLIDATING STATEMENT OF INCOME Six Months Ended June 30, 2019 Penske Total Automotive Guarantor Non-Guarantor Company Eliminations Group Subsidiaries Subsidiaries Revenues $ 11,320.2 $ — $ — $ 5,979.0 $ 5,341.2 Cost of sales 9,600.9 — — 5,011.8 4,589.1 Gross profit 1,719.3 — — 967.2 752.1 Selling, general and administrative expenses 1,335.3 — 13.4 722.9 599.0 Depreciation 53.5 — 0.7 29.1 23.7 Operating income 330.5 — (14.1) 215.2 129.4 Floor plan interest expense (42.8) — (4.2) (29.3) (9.3) Other interest expense (60.3) — (38.5) (6.0) (15.8) Equity in earnings of affiliates 66.3 — 63.8 — 2.5 Equity in earnings of subsidiaries — (287.1) 287.1 — — Income from continuing operations before income taxes 293.7 (287.1) 294.1 179.9 106.8 Income taxes (76.2) 74.4 (76.3) (52.5) (21.8) Income from continuing operations 217.5 (212.7) 217.8 127.4 85.0 Income from discontinued operations, net of tax 0.2 (0.2) 0.2 0.2 — Net income 217.7 (212.9) 218.0 127.6 85.0 Other comprehensive (loss) income, net of tax (6.0) 10.3 (6.0) — (10.3) Comprehensive income 211.7 (202.6) 212.0 127.6 74.7 Less: Comprehensive (loss) income attributable to non-controlling interests (0.5) 0.1 (0.1) — (0.5) Comprehensive income attributable to Penske Automotive Group common stockholders $ 212.2 $ (202.7) $ 212.1 $ 127.6 $ 75.2 CONDENSED CONSOLIDATING STATEMENT OF INCOME Six Months Ended June 30, 2018 Penske Total Automotive Guarantor Non-Guarantor Company Eliminations Group Subsidiaries Subsidiaries Revenues $ 11,687.2 $ — $ — $ 5,928.3 $ 5,758.9 Cost of sales 9,933.0 — — 4,977.5 4,955.5 Gross profit 1,754.2 — — 950.8 803.4 Selling, general and administrative expenses 1,338.5 — 12.8 703.0 622.7 Depreciation 51.3 — 0.8 27.3 23.2 Operating income 364.4 — (13.6) 220.5 157.5 Floor plan interest expense (38.8) — (3.4) (23.6) (11.8) Other interest expense (58.4) — (39.7) (3.9) (14.8) Equity in earnings of affiliates 53.3 — 51.0 — 2.3 Equity in earnings of subsidiaries — (325.9) 325.9 — — Income from continuing operations before income taxes 320.5 (325.9) 320.2 193.0 133.2 Income taxes (77.6) 79.2 (77.6) (52.4) (26.8) Income from continuing operations 242.9 (246.7) 242.6 140.6 106.4 Loss from discontinued operations, net of tax 0.1 (0.1) 0.1 0.1 — Net income 243.0 (246.8) 242.7 140.7 106.4 Other comprehensive (loss) income, net of tax (41.0) 36.6 (41.0) — (36.6) Comprehensive income 202.0 (210.2) 201.7 140.7 69.8 Less: Comprehensive (loss) income attributable to non-controlling interests (0.8) 1.1 (1.1) — (0.8) Comprehensive income attributable to Penske Automotive Group common stockholders $ 202.8 $ (211.3) $ 202.8 $ 140.7 $ 70.6 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Six Months Ended June 30, 2019 Penske Total Automotive Guarantor Non-Guarantor Company Group Subsidiaries Subsidiaries Net cash provided by (used in) continuing operating activities $ 304.6 $ (18.4) $ 214.0 $ 109.0 Investing activities: Purchase of equipment and improvements (134.5) (0.7) (56.0) (77.8) Proceeds from sale of dealerships 7.2 — 7.2 — Proceeds from sale-leaseback transactions 7.3 — — 7.3 Acquisitions, net (1.1) — — (1.1) Other (0.9) (1.3) — 0.4 Net cash used in continuing investing activities (122.0) (2.0) (48.8) (71.2) Financing activities: Net borrowings (repayments) of long-term debt 9.8 39.9 37.0 (67.1) Net borrowings (repayments) of floor plan notes payable — non-trade 6.8 (6.4) (32.8) 46.0 Repurchases of common stock (130.6) (130.6) — — Dividends (64.5) (64.5) — — Other 0.4 0.4 — — Distributions from (to) parent — 181.6 (179.8) (1.8) Net cash (used in) provided by continuing financing activities (178.1) 20.4 (175.6) (22.9) Net cash (used in) provided by discontinued operations — — — — Effect of exchange rate changes on cash and cash equivalents (0.1) — — (0.1) Net change in cash and cash equivalents 4.4 — (10.4) 14.8 Cash and cash equivalents, beginning of period 39.4 — 12.9 26.5 Cash and cash equivalents, end of period $ 43.8 $ — $ 2.5 $ 41.3 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Six Months Ended June 30, 2018 Penske Total Automotive Guarantor Non-Guarantor Company Group Subsidiaries Subsidiaries Net cash provided by (used in) continuing operating activities $ 417.0 $ (24.5) $ 357.2 $ 84.3 Investing activities: Purchase of equipment and improvements (118.8) (0.4) (68.4) (50.0) Proceeds from sale of dealerships 58.4 — 55.9 2.5 Proceeds from sale-leaseback transactions 5.8 — — 5.8 Acquisitions, net (168.6) — — (168.6) Other (3.0) (1.9) — (1.1) Net cash (used in) provided by continuing investing activities (226.2) (2.3) (12.5) (211.4) Financing activities: Net borrowings (repayments) of long-term debt 23.1 (73.0) (56.5) 152.6 Net (repayments) borrowings of floor plan notes payable — non-trade (92.9) 1.8 (98.8) 4.1 Repurchases of common stock (55.8) (55.8) — — Dividends (59.0) (59.0) — — Other (6.1) (0.3) (5.8) — Distributions from (to) parent — 213.1 (198.2) (14.9) Net cash (used in) provided by continuing financing activities (190.7) 26.8 (359.3) 141.8 Net cash provided by discontinued operations 0.2 — 0.2 — Effect of exchange rate changes on cash and cash equivalents (0.2) — — (0.2) Net change in cash and cash equivalents 0.1 — (14.4) 14.5 Cash and cash equivalents, beginning of period 45.7 — 14.8 30.9 Cash and cash equivalents, end of period $ 45.8 $ — $ 0.4 $ 45.4 |
Interim Financial Statements (P
Interim Financial Statements (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Interim Financial Statements. | |
Business Overview | 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 also operate fourteen used vehicle supercenters in the U.S. and the U.K. which retail and wholesale previously owned vehicles under a one price, “no-haggle” methodology. In the first quarter of 2017, we acquired CarSense in the U.S. and CarShop in the U.K. In the first quarter of 2018, we acquired The Car People in the U.K., which began to operate under the CarShop name in June 2019. 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 nine retail locations and a vehicle preparation center. During the six months ended June 30, 2019, we disposed of twelve retail automotive franchises, and were awarded one retail automotive franchise. Of the franchises disposed of, six represented franchises in the U.S., and six represented franchises in Germany. In the first quarter of 2019, we acquired an additional 8.4% interest in the Jacobs Group, one of our German automotive dealership joint ventures, and now own an 87.8% interest in the Jacobs Group. Retail Commercial Truck Dealership. In July 2019, our Premier Truck Group subsidiary acquired Warner Truck Centers, a retailer and services provider for Freightliner and Western Star medium and heavy-duty commercial trucks with six locations in Utah and Idaho. Commercial Vehicle Distribution We are also a leading distributor of diesel and gas engines and power systems, principally representing MTU, Detroit Diesel, Allison Transmission, MTU Onsite Energy, and Rolls Royce Power Systems. This business, known as Penske Power Systems (“PPS”), offers products across the on- and off-highway markets, including in the construction, mining, marine, and defense sectors, 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. |
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 June 30, 2019 and December 31, 2018 and for the three and six month periods ended June 30, 2019 and 2018 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, 2018, 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 the carrying values and fair values of our senior subordinated notes and our fixed rate mortgage facilities are as follows: June 30, 2019 December 31, 2018 Carrying Value Fair Value Carrying Value Fair Value 3.75% senior subordinated notes due 2020 $ 298.5 $ 299.8 $ 297.9 $ 291.9 5.75% senior subordinated notes due 2022 547.2 556.8 546.8 537.6 5.375% senior subordinated notes due 2024 297.8 304.5 297.6 278.7 5.50% senior subordinated notes due 2026 495.4 514.9 495.1 465.2 Mortgage facilities 402.1 408.1 289.6 290.2 |
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 six months ended June 30, 2019 or 2018 that met the criteria to be classified as discontinued operations. |
Disposals | Disposals During the six months ended June 30, 2019, we disposed of twelve retail automotive franchises and one retail commercial truck location. The results of operations for these businesses are included within continuing operations for the three and six months ended June 30, 2019 and 2018, 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements 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. 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 adopted this ASU, including several practical expedients, on January 1, 2019 using the optional transition method. The package of practical expedients elected allows us to not reassess (1) whether any expired or existing contracts are or contain leases (2) the lease classification for any expired or existing leases, and (3) initial direct costs for any expired or existing leases. We also elected the practical expedient to not separate lease and non-lease components for all leases and have accounted for the combined lease and non-lease components as a single lease component. Under the optional transition method, we applied ASC 840 in the comparative periods presented and provide the disclosures required by ASC 840 for all periods that continue to be presented in accordance with ASC 840, in addition to the disclosures required per ASC 842. The expense recognition for operating leases under ASC 842 is substantially consistent with ASC 840 and the adoption did not have an impact on our consolidated statements of income, comprehensive income, or cash flows. As part of the adoption of ASC 842, we performed an assessment of the impact the new lease recognition standard will have on our consolidated financial statements. We lease a significant amount of our dealership and other properties, which are classified as operating leases. We also have various operating leases relating to office and computer equipment, shop equipment, service loaner and company owned vehicles, and other miscellaneous items. We do not have any material leases, individually or in the aggregate, classified as a finance leasing arrangement under the new lease recognition standard. Upon adoption of ASC 842, we recognized our lease liabilities and right-of-use assets on our consolidated condensed balance sheet at the present value of these future payments. We also made an accounting policy to exclude leases with an initial term of 12 months or less from the balance sheet as permitted under ASC 842. We also evaluated, documented, and implemented required changes in internal controls as part of our adoption of the new lease recognition standard. These changes include implementing updated accounting policies affected by ASC 842 and implementing a new information technology application to calculate our right-of-use assets and lease liabilities and required disclosures. See Note 3 “Leases” for additional disclosures in accordance with the new lease standard. As a result of the adoption of ASC 842 on January 1, 2019, we recorded lease liabilities and right-of-use assets on our consolidated condensed balance sheet. The adoption also resulted in a net, after-tax cumulative effect adjustment to retained earnings of approximately $5.0 million. The details of this adjustment are summarized below. Balance at Adjustments Due Balance at December 31, 2018 to ASC 842 January 1, 2019 Assets Operating lease right-of-use assets $ — $ 2,425.6 $ 2,425.6 Liabilities and Equity Accrued expenses and other current liabilities $ 566.6 $ 70.2 $ 636.8 Long-term operating lease liabilities — 2,387.5 2,387.5 Deferred tax liabilities 577.8 0.9 578.7 Other long-term liabilities 519.0 (38.0) 481.0 Retained earnings 2,365.8 5.0 2,370.8 Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This ASU replaces the current incurred loss impairment methodology of recognizing credit losses when a loss is probable, with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to assess credit loss estimates. This ASU is effective for financial statements issued for annual periods beginning after December 15, 2019, with early adoption permitted. We are currently evaluating the impacts the adoption of this accounting standard update will have on our consolidated financial statements. 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 did not 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 do not expect the adoption of this accounting standard update to have a significant impact on our consolidated financial statements. |
Interim Financial Statements (T
Interim Financial Statements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Organization and Summary of Significant Accounting Policies | |
Summary of carrying values and fair values of senior subordinated notes and fixed rate mortgage facilities | June 30, 2019 December 31, 2018 Carrying Value Fair Value Carrying Value Fair Value 3.75% senior subordinated notes due 2020 $ 298.5 $ 299.8 $ 297.9 $ 291.9 5.75% senior subordinated notes due 2022 547.2 556.8 546.8 537.6 5.375% senior subordinated notes due 2024 297.8 304.5 297.6 278.7 5.50% senior subordinated notes due 2026 495.4 514.9 495.1 465.2 Mortgage facilities 402.1 408.1 289.6 290.2 |
ASC 842 | |
Organization and Summary of Significant Accounting Policies | |
Schedule of adjustment due to adoption of ASC 842 | Balance at Adjustments Due Balance at December 31, 2018 to ASC 842 January 1, 2019 Assets Operating lease right-of-use assets $ — $ 2,425.6 $ 2,425.6 Liabilities and Equity Accrued expenses and other current liabilities $ 566.6 $ 70.2 $ 636.8 Long-term operating lease liabilities — 2,387.5 2,387.5 Deferred tax liabilities 577.8 0.9 578.7 Other long-term liabilities 519.0 (38.0) 481.0 Retained earnings 2,365.8 5.0 2,370.8 |
Revenues (Tables)
Revenues (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenues | |
Schedule of accounts receivable and unearned revenues | June 30, December 31, 2019 2018 Accounts receivable Contracts in transit $ 330.4 $ 314.2 Vehicle receivables 251.0 266.9 Manufacturer receivables 200.9 211.3 Trade receivables 154.6 129.1 Accrued expenses Unearned revenues $ 272.0 $ 269.8 |
Retail Automotive Dealership | |
Revenues | |
Schedule of disaggregation of revenues | Three Months Ended June 30, Six Months Ended June 30, Retail Automotive Dealership Revenue 2019 2018 2019 2018 New vehicle $ 2,310.4 $ 2,528.6 $ 4,541.6 $ 4,975.4 Used vehicle 1,852.7 1,896.9 3,704.7 3,763.7 Finance and insurance, net 165.5 162.9 325.5 323.7 Service and parts 550.7 547.8 1,110.5 1,091.3 Fleet and wholesale 317.0 319.3 605.2 597.4 Total retail automotive dealership revenue $ 5,196.3 $ 5,455.5 $ 10,287.5 $ 10,751.5 Three Months Ended June 30, Six Months Ended June 30, Retail Automotive Dealership Revenue 2019 2018 2019 2018 U.S. $ 2,905.9 $ 2,953.9 $ 5,628.6 $ 5,704.8 U.K. 1,928.2 2,107.0 3,968.1 4,299.8 Germany and Italy 362.2 394.6 690.8 746.9 Total retail automotive dealership revenue $ 5,196.3 $ 5,455.5 $ 10,287.5 $ 10,751.5 |
Retail Commercial Truck Dealership | |
Revenues | |
Schedule of disaggregation of revenues | Three Months Ended June 30, Six Months Ended June 30, Retail Commercial Truck Dealership Revenue 2019 2018 2019 2018 New truck $ 296.0 $ 210.7 $ 503.4 $ 381.1 Used truck 27.6 27.3 51.7 53.8 Finance and insurance, net 2.9 3.6 5.9 6.8 Service and parts 94.6 92.2 186.1 182.6 Other 5.7 5.0 12.0 6.9 Total retail commercial truck dealership revenue $ 426.8 $ 338.8 $ 759.1 $ 631.2 |
Commercial Vehicle Distribution and Other | |
Revenues | |
Schedule of disaggregation of revenues | Three Months Ended June 30, Six Months Ended June 30, Commercial Vehicle Distribution and Other 2019 2018 2019 2018 Commercial Vehicles Australia $ 132.7 $ 145.0 $ 273.6 $ 302.7 Other — 1.0 — 1.8 Total commercial vehicle distribution and other revenue $ 132.7 $ 146.0 $ 273.6 $ 304.5 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases | |
Summary of net operating lease cost | Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 Lease Cost Operating lease cost $ 60.5 $ 124.0 Sublease income (5.7) (11.1) Total lease cost $ 54.8 $ 112.9 (1) Includes short-term leases and variable lease costs, which are immaterial. |
Summary of supplemental cash flow information related to operating leases and weighted average remaining lease term and discount rate of leases | Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 Other Information Gains on sale and leaseback transactions, net $ — $ (0.2) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases 58.6 118.3 Right-of-use assets obtained in exchange for operating lease liabilities 2.3 2.3 June 30, 2019 Lease Term and Discount Rate Weighted-average remaining lease term - operating leases 25 years Weighted-average discount rate - operating leases 6.4% |
Schedule of maturity of lease liabilities | Maturity of Lease Liabilities 2019 $ 122.3 2020 239.3 2021 233.5 2022 230.0 2023 222.5 2024 215.4 2025 and thereafter 4,248.6 Total future minimum lease payments $ 5,511.6 Less: Imputed interest (3,095.6) Present value of future minimum lease payments $ 2,416.0 Current operating lease liabilities $ 85.7 Long-term operating lease liabilities 2,330.3 Total operating lease liabilities $ 2,416.0 (1) Excludes the six months ended June 30, 2019. (2) Included within “Accrued expenses and other current liabilities” on Consolidated Condensed Balance Sheet as of June 30, 2019. Minimum future rental payments required under operating leases in effect as of December 31, 2018 are as follows: 2019 $ 222.5 2020 220.5 2021 217.4 2022 216.0 2023 212.0 2024 and thereafter 4,344.4 Total future minimum lease payments $ 5,432.8 |
Significant Equity Method Inv_2
Significant Equity Method Investees (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
PTL | |
Significant Equity Method Investees | |
Equity method investment summarized income statement information | Six Months Ended June 30, 2019 2018 Revenues $ 4,390 $ 3,963 Gross profit 896 794 Income from continuing operations 221 176 Net income 221 176 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Inventories | |
Inventories | June 30, December 31, 2019 2018 Retail automotive dealership new vehicles $ 2,307.9 $ 2,397.0 Retail automotive dealership used vehicles 1,053.8 1,060.8 Retail automotive parts, accessories and other 130.4 140.8 Retail commercial truck dealership vehicles and parts 258.9 207.9 Commercial vehicle distribution vehicles, parts and engines 227.0 233.6 Total inventories $ 3,978.0 $ 4,040.1 |
Business Combinations (Tables)
Business Combinations (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations | |
Summary of the aggregate consideration paid and the aggregate amounts of the assets acquired and liabilities assumed | June 30, 2019 2018 Accounts receivable $ — $ 3.6 Inventories 0.5 62.8 Other current assets — — Property and equipment 0.2 52.6 Indefinite-lived intangibles 0.4 73.9 Other noncurrent assets 0.1 — Current liabilities (0.1) (16.9) Noncurrent liabilities — (0.6) Total consideration 1.1 175.4 Deferred consideration — (6.8) Consideration transferred through common stock issuance — — Contingent consideration — — Seller financed/assumed debt — — Total cash used in acquisitions $ 1.1 $ 168.6 |
Summary of unaudited consolidated pro forma results of operations | Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Revenues $ 5,755.8 $ 6,003.1 $ 11,321.5 $ 11,833.1 Income from continuing operations 117.7 134.6 217.6 243.0 Net income 117.8 134.7 217.8 243.2 Income from continuing operations per diluted common share $ 1.42 $ 1.58 $ 2.60 $ 2.84 Net income per diluted common share $ 1.42 $ 1.59 $ 2.60 $ 2.84 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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, 2019 $ 1,752.0 $ 486.2 Additions 0.4 — Disposals (0.7) — Foreign currency translation (2.4) (0.5) Balance, June 30, 2019 $ 1,749.3 $ 485.7 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share | |
Reconciliation of number of shares used in calculation of basic and diluted earning per share | Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Weighted average number of common shares outstanding 82,872,330 84,941,932 83,625,142 85,443,607 Effect of non-participatory equity compensation 40,000 40,000 40,000 40,000 Weighted average number of common shares outstanding, including effect of dilutive securities 82,912,330 84,981,932 83,665,142 85,483,607 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Long-Term Debt | |
Long Term Debt | June 30, December 31, 2019 2018 U.S. credit agreement — revolving credit line $ — $ 30.0 U.K. credit agreement — revolving credit line 92.7 163.3 U.K. credit agreement — overdraft line of credit — 1.8 3.75% senior subordinated notes due 2020 298.5 297.9 5.75% senior subordinated notes due 2022 547.2 546.8 5.375% senior subordinated notes due 2024 297.8 297.6 5.50% senior subordinated notes due 2026 495.4 495.1 Australia capital loan agreement 32.6 33.6 Australia working capital loan agreement — 6.1 Mortgage facilities 402.1 289.6 Other 61.2 54.9 Total long-term debt 2,227.5 2,216.7 Less: current portion (93.3) (92.0) Net long-term debt $ 2,134.2 $ 2,124.7 |
Schedule of senior subordinated notes issuances | Description Maturity Date Interest Payment Dates Principal Amount 3.75% Notes August 15, 2020 February 15, August 15 $300 million 5.75% Notes October 1, 2022 April 1, October 1 $550 million 5.375% Notes December 1, 2024 June 1, December 1 $300 million 5.50% Notes May 15, 2026 May 15, November 15 $500 million |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, 2019 Foreign Currency Translation Other Total Balance at March 31, 2019 $ (201.3) $ (24.4) $ (225.7) Other comprehensive income before reclassifications (16.6) 2.0 (14.6) Amounts reclassified from accumulated other comprehensive income — net of tax — — — Net current period other comprehensive income (16.6) 2.0 (14.6) Balance at June 30, 2019 $ (217.9) $ (22.4) $ (240.3) Three Months Ended June 30, 2018 Foreign Currency Translation Other Total Balance at March 31, 2018 $ (103.3) $ (11.4) $ (114.7) Other comprehensive income before reclassifications (67.2) (4.5) (71.7) Amounts reclassified from accumulated other comprehensive income — net of tax — — — Net current period other comprehensive income (67.2) (4.5) (71.7) Balance at June 30, 2018 $ (170.5) $ (15.9) $ (186.4) Six Months Ended June 30, 2019 Foreign Currency Translation Other Total Balance at December 31, 2018 $ (208.3) $ (26.2) $ (234.5) Other comprehensive income before reclassifications (9.6) 3.8 (5.8) Amounts reclassified from accumulated other comprehensive income — net of tax — — — Net current period other comprehensive income (9.6) 3.8 (5.8) Balance at June 30, 2019 $ (217.9) $ (22.4) $ (240.3) Six Months Ended June 30, 2018 Foreign Currency Translation Other Total Balance at December 31, 2017 $ (134.0) $ (12.5) $ (146.5) Other comprehensive income before reclassifications (36.5) (3.4) (39.9) Amounts reclassified from accumulated other comprehensive income — net of tax — — — Net current period other comprehensive income (36.5) (3.4) (39.9) Balance at June 30, 2018 $ (170.5) $ (15.9) $ (186.4) |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Information | |
Revenues and segment income by reportable segment | Three Months Ended June 30 Retail Retail Commercial Non-Automotive Intersegment Automotive Truck Other Investments Elimination Total Revenues 2019 $ 5,196.3 $ 426.8 $ 132.7 $ — $ — $ 5,755.8 2018 5,455.5 338.8 146.0 — — 5,940.3 Segment income 2019 $ 98.1 $ 18.9 $ 4.9 $ 38.0 $ — $ 159.9 2018 117.0 16.0 8.2 35.0 — 176.2 Six Months Ended June 30 Retail Retail Commercial Non-Automotive Intersegment Automotive Truck Other Investments Elimination Total Revenues 2019 $ 10,287.5 $ 759.1 $ 273.6 $ — $ — $ 11,320.2 2018 10,751.5 631.2 304.5 — — 11,687.2 Segment income 2019 $ 183.0 $ 34.8 $ 12.1 $ 63.8 $ — $ 293.7 2018 223.6 28.1 17.8 51.0 — 320.5 |
Condensed Consolidating Finan_2
Condensed Consolidating Financial Information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Condensed Consolidating Financial Information | |
CONDENSED CONSOLIDATING BALANCE SHEET | CONDENSED CONSOLIDATING BALANCE SHEET June 30, 2019 Penske Total Automotive Guarantor Non-Guarantor Company Eliminations Group Subsidiaries Subsidiaries Cash and cash equivalents $ 43.8 $ — $ — $ 2.5 $ 41.3 Accounts receivable, net 944.4 (490.9) 490.9 462.3 482.1 Inventories 3,978.0 — — 1,966.1 2,011.9 Other current assets 109.1 — 8.6 21.8 78.7 Total current assets 5,075.3 (490.9) 499.5 2,452.7 2,614.0 Property and equipment, net 2,308.9 — 3.8 1,101.0 1,204.1 Operating lease right-of-use assets 2,380.9 — 9.5 1,600.0 771.4 Intangible assets 2,235.0 — — 1,422.2 812.8 Equity method investments 1,342.2 — 1,276.4 — 65.8 Other long-term assets 18.8 (2,830.9) 2,838.6 2.8 8.3 Total assets $ 13,361.1 $ (3,321.8) $ 4,627.8 $ 6,578.7 $ 5,476.4 Floor plan notes payable $ 2,350.3 $ — $ — $ 1,350.6 $ 999.7 Floor plan notes payable — non-trade 1,435.5 — 225.9 473.1 736.5 Accounts payable 638.5 — 4.9 177.5 456.1 Accrued expenses and other current liabilities 651.8 (490.9) 1.7 222.0 919.0 Current portion of long-term debt 93.3 — — 10.4 82.9 Liabilities held for sale 0.5 — — 0.5 — Total current liabilities 5,169.9 (490.9) 232.5 2,234.1 3,194.2 Long-term debt 2,134.2 (82.3) 1,725.2 259.0 232.3 Long-term operating lease liabilities 2,330.3 — 9.1 1,573.0 748.2 Deferred tax liabilities 604.1 — — 598.9 5.2 Other long-term liabilities 461.6 — — 32.0 429.6 Total liabilities 10,700.1 (573.2) 1,966.8 4,697.0 4,609.5 Total equity 2,661.0 (2,748.6) 2,661.0 1,881.7 866.9 Total liabilities and equity $ 13,361.1 $ (3,321.8) $ 4,627.8 $ 6,578.7 $ 5,476.4 CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2018 Penske Total Automotive Guarantor Non-Guarantor Company Eliminations Group Subsidiaries Subsidiaries Cash and cash equivalents $ 39.4 $ — $ — $ 12.9 $ 26.5 Accounts receivable, net 929.1 (481.7) 481.7 507.1 422.0 Inventories 4,040.1 — — 1,961.6 2,078.5 Other current assets 86.6 — 10.6 17.8 58.2 Total current assets 5,095.2 (481.7) 492.3 2,499.4 2,585.2 Property and equipment, net 2,250.0 — 3.9 1,077.7 1,168.4 Intangible assets 2,238.2 — — 1,422.6 815.6 Equity method investments 1,305.2 — 1,239.9 — 65.3 Other long-term assets 15.9 (2,814.3) 2,821.0 2.9 6.3 Total assets $ 10,904.5 $ (3,296.0) $ 4,557.1 $ 5,002.6 $ 4,640.8 Floor plan notes payable $ 2,362.2 $ — $ — $ 1,348.3 $ 1,013.9 Floor plan notes payable — non-trade 1,428.6 — 232.3 505.9 690.4 Accounts payable 598.2 — 4.9 196.6 396.7 Accrued expenses 566.6 (481.7) 1.4 160.2 886.7 Current portion of long-term debt 92.0 — — 6.3 85.7 Liabilities held for sale 0.7 — — 0.7 — Total current liabilities 5,048.3 (481.7) 238.6 2,218.0 3,073.4 Long-term debt 2,124.7 (88.6) 1,683.8 225.7 303.8 Deferred tax liabilities 577.8 — — 570.5 7.3 Other long-term liabilities 519.0 — — 57.6 461.4 Total liabilities 8,269.8 (570.3) 1,922.4 3,071.8 3,845.9 Total equity 2,634.7 (2,725.7) 2,634.7 1,930.8 794.9 Total liabilities and equity $ 10,904.5 $ (3,296.0) $ 4,557.1 $ 5,002.6 $ 4,640.8 |
CONDENSED CONSOLIDATING STATEMENT OF INCOME | CONDENSED CONSOLIDATING STATEMENT OF INCOME Three Months Ended June 30, 2019 Penske Total Automotive Guarantor Non-Guarantor Company Eliminations Group Subsidiaries Subsidiaries Revenues $ 5,755.8 $ — $ — $ 3,127.6 $ 2,628.2 Cost of sales 4,888.0 — — 2,628.9 2,259.1 Gross profit 867.8 — — 498.7 369.1 Selling, general and administrative expenses 668.9 — 6.8 364.5 297.6 Depreciation 27.1 — 0.4 14.6 12.1 Operating income 171.8 — (7.2) 119.6 59.4 Floor plan interest expense (21.0) — (2.4) (14.3) (4.3) Other interest expense (30.4) — (19.3) (3.0) (8.1) Equity in earnings of affiliates 39.5 — 38.0 — 1.5 Equity in earnings of subsidiaries — (150.0) 150.0 — — Income from continuing operations before income taxes 159.9 (150.0) 159.1 102.3 48.5 Income taxes (41.5) 39.1 (41.5) (29.5) (9.6) Income from continuing operations 118.4 (110.9) 117.6 72.8 38.9 Income from discontinued operations, net of tax 0.1 (0.1) 0.1 0.1 — Net income 118.5 (111.0) 117.7 72.9 38.9 Other comprehensive (loss) income, net of tax (14.5) 17.2 (14.5) — (17.2) Comprehensive income 104.0 (93.8) 103.2 72.9 21.7 Less: Comprehensive income (loss) attributable to non-controlling interests 0.8 (0.2) 0.2 — 0.8 Comprehensive income attributable to Penske Automotive Group common stockholders $ 103.2 $ (93.6) $ 103.0 $ 72.9 $ 20.9 CONDENSED CONSOLIDATING STATEMENT OF INCOME Three Months Ended June 30, 2018 Penske Total Automotive Guarantor Non-Guarantor Company Eliminations Group Subsidiaries Subsidiaries Revenues $ 5,940.3 $ — $ — $ 3,071.8 $ 2,868.5 Cost of sales 5,050.5 — — 2,582.3 2,468.2 Gross profit 889.8 — — 489.5 400.3 Selling, general and administrative expenses 675.4 — 6.6 359.7 309.1 Depreciation 25.7 — 0.4 13.7 11.6 Operating income 188.7 — (7.0) 116.1 79.6 Floor plan interest expense (19.9) — (1.8) (12.3) (5.8) Other interest expense (28.6) — (18.9) (2.0) (7.7) Equity in earnings of affiliates 36.0 — 35.0 — 1.0 Equity in earnings of subsidiaries — (168.3) 168.3 — — Income from continuing operations before income taxes 176.2 (168.3) 175.6 101.8 67.1 Income taxes (41.0) 39.4 (41.0) (27.4) (12.0) Income from continuing operations 135.2 (128.9) 134.6 74.4 55.1 Income from discontinued operations, net of tax — — — — — Net income 135.2 (128.9) 134.6 74.4 55.1 Other comprehensive (loss) income, net of tax (72.8) 68.1 (72.8) — (68.1) Comprehensive income 62.4 (60.8) 61.8 74.4 (13.0) Less: Comprehensive (loss) income attributable to non-controlling interests (0.5) 1.1 (1.1) — (0.5) Comprehensive income attributable to Penske Automotive Group common stockholders $ 62.9 $ (61.9) $ 62.9 $ 74.4 $ (12.5) CONDENSED CONSOLIDATING STATEMENT OF INCOME Six Months Ended June 30, 2019 Penske Total Automotive Guarantor Non-Guarantor Company Eliminations Group Subsidiaries Subsidiaries Revenues $ 11,320.2 $ — $ — $ 5,979.0 $ 5,341.2 Cost of sales 9,600.9 — — 5,011.8 4,589.1 Gross profit 1,719.3 — — 967.2 752.1 Selling, general and administrative expenses 1,335.3 — 13.4 722.9 599.0 Depreciation 53.5 — 0.7 29.1 23.7 Operating income 330.5 — (14.1) 215.2 129.4 Floor plan interest expense (42.8) — (4.2) (29.3) (9.3) Other interest expense (60.3) — (38.5) (6.0) (15.8) Equity in earnings of affiliates 66.3 — 63.8 — 2.5 Equity in earnings of subsidiaries — (287.1) 287.1 — — Income from continuing operations before income taxes 293.7 (287.1) 294.1 179.9 106.8 Income taxes (76.2) 74.4 (76.3) (52.5) (21.8) Income from continuing operations 217.5 (212.7) 217.8 127.4 85.0 Income from discontinued operations, net of tax 0.2 (0.2) 0.2 0.2 — Net income 217.7 (212.9) 218.0 127.6 85.0 Other comprehensive (loss) income, net of tax (6.0) 10.3 (6.0) — (10.3) Comprehensive income 211.7 (202.6) 212.0 127.6 74.7 Less: Comprehensive (loss) income attributable to non-controlling interests (0.5) 0.1 (0.1) — (0.5) Comprehensive income attributable to Penske Automotive Group common stockholders $ 212.2 $ (202.7) $ 212.1 $ 127.6 $ 75.2 CONDENSED CONSOLIDATING STATEMENT OF INCOME Six Months Ended June 30, 2018 Penske Total Automotive Guarantor Non-Guarantor Company Eliminations Group Subsidiaries Subsidiaries Revenues $ 11,687.2 $ — $ — $ 5,928.3 $ 5,758.9 Cost of sales 9,933.0 — — 4,977.5 4,955.5 Gross profit 1,754.2 — — 950.8 803.4 Selling, general and administrative expenses 1,338.5 — 12.8 703.0 622.7 Depreciation 51.3 — 0.8 27.3 23.2 Operating income 364.4 — (13.6) 220.5 157.5 Floor plan interest expense (38.8) — (3.4) (23.6) (11.8) Other interest expense (58.4) — (39.7) (3.9) (14.8) Equity in earnings of affiliates 53.3 — 51.0 — 2.3 Equity in earnings of subsidiaries — (325.9) 325.9 — — Income from continuing operations before income taxes 320.5 (325.9) 320.2 193.0 133.2 Income taxes (77.6) 79.2 (77.6) (52.4) (26.8) Income from continuing operations 242.9 (246.7) 242.6 140.6 106.4 Loss from discontinued operations, net of tax 0.1 (0.1) 0.1 0.1 — Net income 243.0 (246.8) 242.7 140.7 106.4 Other comprehensive (loss) income, net of tax (41.0) 36.6 (41.0) — (36.6) Comprehensive income 202.0 (210.2) 201.7 140.7 69.8 Less: Comprehensive (loss) income attributable to non-controlling interests (0.8) 1.1 (1.1) — (0.8) Comprehensive income attributable to Penske Automotive Group common stockholders $ 202.8 $ (211.3) $ 202.8 $ 140.7 $ 70.6 |
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS | CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Six Months Ended June 30, 2019 Penske Total Automotive Guarantor Non-Guarantor Company Group Subsidiaries Subsidiaries Net cash provided by (used in) continuing operating activities $ 304.6 $ (18.4) $ 214.0 $ 109.0 Investing activities: Purchase of equipment and improvements (134.5) (0.7) (56.0) (77.8) Proceeds from sale of dealerships 7.2 — 7.2 — Proceeds from sale-leaseback transactions 7.3 — — 7.3 Acquisitions, net (1.1) — — (1.1) Other (0.9) (1.3) — 0.4 Net cash used in continuing investing activities (122.0) (2.0) (48.8) (71.2) Financing activities: Net borrowings (repayments) of long-term debt 9.8 39.9 37.0 (67.1) Net borrowings (repayments) of floor plan notes payable — non-trade 6.8 (6.4) (32.8) 46.0 Repurchases of common stock (130.6) (130.6) — — Dividends (64.5) (64.5) — — Other 0.4 0.4 — — Distributions from (to) parent — 181.6 (179.8) (1.8) Net cash (used in) provided by continuing financing activities (178.1) 20.4 (175.6) (22.9) Net cash (used in) provided by discontinued operations — — — — Effect of exchange rate changes on cash and cash equivalents (0.1) — — (0.1) Net change in cash and cash equivalents 4.4 — (10.4) 14.8 Cash and cash equivalents, beginning of period 39.4 — 12.9 26.5 Cash and cash equivalents, end of period $ 43.8 $ — $ 2.5 $ 41.3 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Six Months Ended June 30, 2018 Penske Total Automotive Guarantor Non-Guarantor Company Group Subsidiaries Subsidiaries Net cash provided by (used in) continuing operating activities $ 417.0 $ (24.5) $ 357.2 $ 84.3 Investing activities: Purchase of equipment and improvements (118.8) (0.4) (68.4) (50.0) Proceeds from sale of dealerships 58.4 — 55.9 2.5 Proceeds from sale-leaseback transactions 5.8 — — 5.8 Acquisitions, net (168.6) — — (168.6) Other (3.0) (1.9) — (1.1) Net cash (used in) provided by continuing investing activities (226.2) (2.3) (12.5) (211.4) Financing activities: Net borrowings (repayments) of long-term debt 23.1 (73.0) (56.5) 152.6 Net (repayments) borrowings of floor plan notes payable — non-trade (92.9) 1.8 (98.8) 4.1 Repurchases of common stock (55.8) (55.8) — — Dividends (59.0) (59.0) — — Other (6.1) (0.3) (5.8) — Distributions from (to) parent — 213.1 (198.2) (14.9) Net cash (used in) provided by continuing financing activities (190.7) 26.8 (359.3) 141.8 Net cash provided by discontinued operations 0.2 — 0.2 — Effect of exchange rate changes on cash and cash equivalents (0.2) — — (0.2) Net change in cash and cash equivalents 0.1 — (14.4) 14.5 Cash and cash equivalents, beginning of period 45.7 — 14.8 30.9 Cash and cash equivalents, end of period $ 45.8 $ — $ 0.4 $ 45.4 |
Interim Financial Statements -
Interim Financial Statements - Business Overview (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jul. 31, 2019location | Jun. 30, 2019USD ($)item | Mar. 31, 2019 | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)item | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Interim Financial Statements | |||||||
Total revenues | $ | $ 5,755.8 | $ 5,940.3 | $ 11,320.2 | $ 11,687.2 | |||
Number of used vehicle supercenters operated in the U.S. and U.K. | 14 | 14 | |||||
PTL | |||||||
Interim Financial Statements | |||||||
Ownership interest in Penske Truck Leasing Co (as a percent) | 28.90% | ||||||
German Automotive Dealership Group | |||||||
Interim Financial Statements | |||||||
Ownership acquired (as a percent) | 8.40% | ||||||
Ownership interest (as a percent) | 87.80% | ||||||
Retail Automotive Dealership | |||||||
Interim Financial Statements | |||||||
Total number of owned and operated franchises | 334 | 334 | |||||
Number of owned and operated franchises in US | 149 | 149 | |||||
Number of owned and operated franchises outside US | 185 | 185 | |||||
Minimum number of vehicles retailed and wholesaled | 316,000 | ||||||
Minimum number of vehicle brands offered | 40 | ||||||
Number of franchises awarded to the reporting entity | 1 | ||||||
Number of franchises disposed | 12 | ||||||
Commercial Vehicle Distribution | |||||||
Interim Financial Statements | |||||||
Minimum number of dealership locations | 70 | ||||||
Number of retail dealerships owned by the reporting entity | 10 | ||||||
U.S. | Retail Automotive Dealership | |||||||
Interim Financial Statements | |||||||
Number of franchises disposed | 6 | ||||||
Germany | Retail Automotive Dealership | |||||||
Interim Financial Statements | |||||||
Number of franchises disposed | 6 | ||||||
Automotive dealership revenues | Geographic | U.S. and Puerto Rico | |||||||
Interim Financial Statements | |||||||
Automotive dealership revenue (as a percent) | 55.00% | ||||||
Automotive dealership revenues | Geographic | Outside the U.S. | |||||||
Interim Financial Statements | |||||||
Automotive dealership revenue (as a percent) | 45.00% | ||||||
Automotive dealership revenues | Premium brands | |||||||
Interim Financial Statements | |||||||
Automotive dealership revenue (as a percent) | 70.00% | ||||||
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 | 9 | ||||||
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 | |||||||
Interim Financial Statements | |||||||
Number of locations acquired | location | 6 | ||||||
PTG | Retail Commercial Truck Dealership | |||||||
Interim Financial Statements | |||||||
Number of operating locations | 19 | ||||||
Retail Automotive Dealership | |||||||
Interim Financial Statements | |||||||
Total revenues | $ | $ 5,196.3 | 5,455.5 | $ 10,287.5 | 10,751.5 | $ 20,800 | ||
Retail Automotive Dealership | U.S. | |||||||
Interim Financial Statements | |||||||
Total revenues | $ | 2,905.9 | 2,953.9 | 5,628.6 | 5,704.8 | |||
Retail Commercial Truck Dealership | |||||||
Interim Financial Statements | |||||||
Total revenues | $ | 426.8 | 338.8 | 759.1 | 631.2 | |||
Commercial Vehicle Distribution and Other | |||||||
Interim Financial Statements | |||||||
Total revenues | $ | $ 132.7 | $ 146 | $ 273.6 | $ 304.5 |
Interim Financial Statements _2
Interim Financial Statements - Fair Value, Assets Held For Sale, Discontinued Operations (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2019USD ($)item | Dec. 31, 2018USD ($) | |
Fair Value of Financial Instruments | ||
Debt instrument, Carrying Value | $ 2,227.5 | $ 2,216.7 |
Assets Held for Sale and Discontinued Operations | ||
Number of entities newly classified as held for sale | item | 0 | |
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 | $ 298.5 | $ 297.9 |
3.75% senior subordinated notes due 2020 | Fair Value, Inputs, Level 2 | ||
Fair Value of Financial Instruments | ||
Debt instrument, Fair Value | $ 299.8 | $ 291.9 |
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 | $ 547.2 | $ 546.8 |
5.75% senior subordinated notes due 2022 | Fair Value, Inputs, Level 2 | ||
Fair Value of Financial Instruments | ||
Debt instrument, Fair Value | $ 556.8 | $ 537.6 |
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 | $ 297.8 | $ 297.6 |
5.375% senior subordinated notes due 2024 | Fair Value, Inputs, Level 2 | ||
Fair Value of Financial Instruments | ||
Debt instrument, Fair Value | $ 304.5 | $ 278.7 |
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 | $ 495.4 | $ 495.1 |
5.50% senior subordinated notes due 2026 | Fair Value, Inputs, Level 2 | ||
Fair Value of Financial Instruments | ||
Debt instrument, Fair Value | 514.9 | 465.2 |
Mortgage facilities | ||
Fair Value of Financial Instruments | ||
Debt instrument, Carrying Value | 402.1 | 289.6 |
Mortgage facilities | Fair Value, Inputs, Level 2 | ||
Fair Value of Financial Instruments | ||
Debt instrument, Fair Value | $ 408.1 | $ 290.2 |
Retail Automotive Franchise | Disposal group, not discontinued operations | ||
Disposals | ||
Number of franchises disposed | item | 12 | |
Retail Commercial Truck Location | Disposal group, not discontinued operations | ||
Disposals | ||
Number of locations disposed | item | 1 |
Interim Financial Statements _3
Interim Financial Statements - Recent Accounting Pronouncements - Leases (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Assets | |||
Operating lease right-of-use assets | $ 2,380.9 | $ 2,425.6 | |
Liabilities and Equity | |||
Accrued expenses and other current liabilities | 651.8 | 636.8 | $ 566.6 |
Long-term operating lease liabilities | 2,330.3 | 2,387.5 | |
Deferred tax liabilities | 604.1 | 578.7 | 577.8 |
Other long-term liabilities | 461.6 | 481 | 519 |
Retained earnings | $ 2,524.3 | 2,370.8 | $ 2,365.8 |
ASC 842 | Impact of Adoption | |||
Assets | |||
Operating lease right-of-use assets | 2,425.6 | ||
Liabilities and Equity | |||
Accrued expenses and other current liabilities | 70.2 | ||
Long-term operating lease liabilities | 2,387.5 | ||
Deferred tax liabilities | 0.9 | ||
Other long-term liabilities | (38) | ||
Retained earnings | $ 5 |
Revenues - Other Disclosures (D
Revenues - Other Disclosures (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Revenues | |||||
Total revenues | $ 5,755.8 | $ 5,940.3 | $ 11,320.2 | $ 11,687.2 | |
Commercial Vehicle Distribution and Other | |||||
Revenues | |||||
Total revenues | 132.7 | 146 | $ 273.6 | 304.5 | |
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 | 26.5 | $ 26.5 | $ 26 | ||
Penske Commercial Vehicles Australia | Commercial Vehicle Distribution and Other | |||||
Revenues | |||||
Payment period | 30 days | ||||
Total revenues | 132.7 | 145 | $ 273.6 | 302.7 | |
Penske Power Systems | Commercial Vehicle Distribution and Other | |||||
Revenues | |||||
Payment period | 30 days | ||||
Penske Power Systems | Service and parts | Commercial Vehicle Distribution and Other | |||||
Revenues | |||||
Total revenues | $ 69 | $ 73.2 | $ 134.4 | $ 142.4 |
Revenues - Retail Automotive De
Revenues - Retail Automotive Dealership (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Revenues | |||||
Total revenues | $ 5,755.8 | $ 5,940.3 | $ 11,320.2 | $ 11,687.2 | |
Retail Automotive Dealership | |||||
Revenues | |||||
Total revenues | 5,196.3 | 5,455.5 | 10,287.5 | 10,751.5 | $ 20,800 |
Retail Automotive Dealership | U.S. | |||||
Revenues | |||||
Total revenues | 2,905.9 | 2,953.9 | 5,628.6 | 5,704.8 | |
Retail Automotive Dealership | UK | |||||
Revenues | |||||
Total revenues | 1,928.2 | 2,107 | 3,968.1 | 4,299.8 | |
Retail Automotive Dealership | Germany and Italy | |||||
Revenues | |||||
Total revenues | 362.2 | 394.6 | 690.8 | 746.9 | |
New vehicle | Retail Automotive Dealership | |||||
Revenues | |||||
Total revenues | 2,310.4 | 2,528.6 | 4,541.6 | 4,975.4 | |
Used vehicle | Retail Automotive Dealership | |||||
Revenues | |||||
Total revenues | 1,852.7 | 1,896.9 | 3,704.7 | 3,763.7 | |
Finance and insurance, net | Retail Automotive Dealership | |||||
Revenues | |||||
Total revenues | 165.5 | 162.9 | 325.5 | 323.7 | |
Service and parts | Retail Automotive Dealership | |||||
Revenues | |||||
Total revenues | 550.7 | 547.8 | 1,110.5 | 1,091.3 | |
Fleet and wholesale | Retail Automotive Dealership | |||||
Revenues | |||||
Total revenues | $ 317 | $ 319.3 | $ 605.2 | $ 597.4 |
Revenues - Retail Commercial Tr
Revenues - Retail Commercial Truck Dealership (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues | ||||
Total revenues | $ 5,755.8 | $ 5,940.3 | $ 11,320.2 | $ 11,687.2 |
Retail Commercial Truck Dealership | ||||
Revenues | ||||
Total revenues | 426.8 | 338.8 | 759.1 | 631.2 |
New vehicle | Retail Commercial Truck Dealership | ||||
Revenues | ||||
Total revenues | 296 | 210.7 | 503.4 | 381.1 |
Used vehicle | Retail Commercial Truck Dealership | ||||
Revenues | ||||
Total revenues | 27.6 | 27.3 | 51.7 | 53.8 |
Finance and insurance, net | Retail Commercial Truck Dealership | ||||
Revenues | ||||
Total revenues | 2.9 | 3.6 | 5.9 | 6.8 |
Service and parts | Retail Commercial Truck Dealership | ||||
Revenues | ||||
Total revenues | 94.6 | 92.2 | 186.1 | 182.6 |
Other | Retail Commercial Truck Dealership | ||||
Revenues | ||||
Total revenues | $ 5.7 | $ 5 | $ 12 | $ 6.9 |
Revenues - Commercial Vehicle D
Revenues - Commercial Vehicle Distribution and Other (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues | ||||
Total revenues | $ 5,755.8 | $ 5,940.3 | $ 11,320.2 | $ 11,687.2 |
Commercial Vehicle Distribution and Other | ||||
Revenues | ||||
Total revenues | 132.7 | 146 | 273.6 | 304.5 |
Commercial Vehicle Distribution and Other | Penske Commercial Vehicles Australia | ||||
Revenues | ||||
Total revenues | $ 132.7 | 145 | $ 273.6 | 302.7 |
Commercial Vehicle Distribution and Other | Other | ||||
Revenues | ||||
Total revenues | $ 1 | $ 1.8 |
Revenues - Contract Balances (D
Revenues - Contract Balances (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Contract Balances | ||
Accounts receivable, net | $ 944.4 | $ 929.1 |
Unearned revenues | 272 | 269.8 |
Revenue recognized from unearned revenue | 174.7 | |
Contracts in transit | ||
Contract Balances | ||
Accounts receivable, net | 330.4 | 314.2 |
Vehicle receivables | ||
Contract Balances | ||
Accounts receivable, net | 251 | 266.9 |
Manufacturer receivables | ||
Contract Balances | ||
Accounts receivable, net | 200.9 | 211.3 |
Trade receivables | ||
Contract Balances | ||
Accounts receivable, net | $ 154.6 | $ 129.1 |
Leases - Other (Details)
Leases - Other (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | |
Leases | ||
Total undiscounted rent obligations | $ 5,511.6 | $ 5,511.6 |
Sublease rent received | 5.7 | $ 11.1 |
Proceeds from sale-leaseback transactions | $ 7.3 | |
Property leases | Minimum | ||
Leases | ||
Initial lease period (in years) | 5 years | 5 years |
Property leases | Maximum | ||
Leases | ||
Initial lease period (in years) | 20 years | 20 years |
Equipment leases | Maximum | ||
Leases | ||
Initial lease period (in years) | 5 years | 5 years |
Leases - Net operating lease co
Leases - Net operating lease cost (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Lease Cost | ||
Operating lease cost | $ 60.5 | $ 124 |
Sublease income | (5.7) | (11.1) |
Total lease cost | $ 54.8 | $ 112.9 |
Leases - Cash flow information,
Leases - Cash flow information, weighted average remaining term and discount rate (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | |
Leases | ||
Gains on sale and leaseback transactions, net | $ (0.2) | |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash flows from operating leases | $ 58.6 | 118.3 |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 2.3 | $ 2.3 |
Weighted-average remaining lease term - operating leases | 25 years | 25 years |
Weighted-average discount rate - operating leases | 6.40% | 6.40% |
Leases - Maturity of lease liab
Leases - Maturity of lease liabilities (Details) $ in Millions | Jun. 30, 2019USD ($) |
Maturity of Lease Liabilities | |
2019 | $ 122.3 |
2020 | 239.3 |
2021 | 233.5 |
2022 | 230 |
2023 | 222.5 |
2024 | 215.4 |
2025 and thereafter | 4,248.6 |
Total future minimum lease payments | 5,511.6 |
Less: Imputed interest | (3,095.6) |
Total operating lease liabilities | $ 2,416 |
Leases - Operating lease liabil
Leases - Operating lease liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Jan. 01, 2019 |
Leases | ||
Current operating lease liabilities | $ 85.7 | |
Long-term operating lease liabilities | 2,330.3 | $ 2,387.5 |
Total operating lease liabilities | $ 2,416 |
Leases - Future Minimum Payment
Leases - Future Minimum Payments (Details) $ in Millions | Dec. 31, 2018USD ($) |
Minimum future rental payments required under operating leases | |
2019 | $ 222.5 |
2020 | 220.5 |
2021 | 217.4 |
2022 | 216 |
2023 | 212 |
2024 and thereafter | 4,344.4 |
Total | $ 5,432.8 |
Significant Equity Method Inv_3
Significant Equity Method Investees (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Equity Method Investment | ||||
Equity in earnings of affiliates | $ 39.5 | $ 36 | $ 66.3 | $ 53.3 |
PTL | ||||
Equity Method Investment | ||||
Ownership percentage of equity method investment | 28.90% | 28.90% | ||
Equity in earnings of affiliates | $ 63.8 | 51 | ||
Condensed income statement information | ||||
Revenues | 4,390 | 3,963 | ||
Gross profit | 896 | 794 | ||
Income from continuing operations | 221 | 176 | ||
Net income | $ 221 | $ 176 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Inventories | |||||
Retail automotive dealership new vehicles | $ 2,307.9 | $ 2,307.9 | $ 2,397 | ||
Retail automotive dealership used vehicles | 1,053.8 | 1,053.8 | 1,060.8 | ||
Retail automotive parts, accessories and other | 130.4 | 130.4 | 140.8 | ||
Retail commercial truck dealership vehicles and parts | 258.9 | 258.9 | 207.9 | ||
Commercial vehicle distribution vehicles, parts and engines | 227 | 227 | 233.6 | ||
Total inventories | 3,978 | 3,978 | $ 4,040.1 | ||
Interest credits and advertising assistance | $ 12.8 | $ 13.6 | $ 24.9 | $ 25.6 |
Business Combinations - Activit
Business Combinations - Activity (Details) - item | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
The Car People | ||
Business combinations | ||
Number of retail locations acquired | 4 | |
Retail Automotive Dealership | ||
Business combinations | ||
Number of acquired franchises | 4 | |
Retail Commercial Truck Dealership | ||
Business combinations | ||
Number of dealerships acquired | 1 | |
Commercial Vehicle Distribution | ||
Business combinations | ||
Number of dealerships acquired | 1 |
Business Combinations - Conside
Business Combinations - Consideration Paid and Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Summary of the aggregate consideration paid and the aggregate amounts of the assets acquired and liabilities assumed | ||
Accounts receivable | $ 3.6 | |
Inventories | $ 0.5 | 62.8 |
Property and equipment | 0.2 | 52.6 |
Indefinite-lived intangibles | 0.4 | 73.9 |
Other noncurrent assets | 0.1 | |
Current liabilities | (0.1) | (16.9) |
Noncurrent liabilities | (0.6) | |
Total consideration | 1.1 | 175.4 |
Deferred consideration | (6.8) | |
Total cash used in acquisitions | $ 1.1 | $ 168.6 |
Business Combinations - Pro For
Business Combinations - Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Summary of unaudited consolidated pro forma results of operations | ||||
Revenues | $ 5,755.8 | $ 6,003.1 | $ 11,321.5 | $ 11,833.1 |
Income from continuing operations | 117.7 | 134.6 | 217.6 | 243 |
Net income | $ 117.8 | $ 134.7 | $ 217.8 | $ 243.2 |
Income from continuing operations per diluted common share (in dollars per share) | $ 1.42 | $ 1.58 | $ 2.60 | $ 2.84 |
Net income per diluted common share (in dollars per share) | $ 1.42 | $ 1.59 | $ 2.60 | $ 2.84 |
Intangible Assets - Summary of
Intangible Assets - Summary of Changes (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Summary of the changes in the carrying amount of goodwill and other indefinite-lived intangible assets | |
Goodwill, Beginning balance | $ 1,752 |
Goodwill, Additions | 0.4 |
Goodwill, Disposals | (0.7) |
Goodwill, Foreign currency translation | (2.4) |
Goodwill, Ending balance | 1,749.3 |
Other indefinite-lived intangible assets, Beginning Balance | 486.2 |
Other indefinite-lived intangible assets, Foreign currency translation | (0.5) |
Other indefinite-lived intangible assets, Ending Balance | $ 485.7 |
Intangible Assets - Activity (D
Intangible Assets - Activity (Details) | 6 Months Ended |
Jun. 30, 2019item | |
Retail Automotive Dealership | |
Intangible assets | |
Number of franchises sold | 8 |
Number of franchises terminated | 4 |
Commercial Vehicle Distribution | |
Intangible assets | |
Number of dealerships acquired | 1 |
Intangible Assets - Information
Intangible Assets - Information by Segment (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Intangible assets | ||
Goodwill | $ 1,749.3 | $ 1,752 |
Retail Automotive Dealership | ||
Intangible assets | ||
Goodwill | 1,508.9 | |
Retail Commercial Truck Dealership | ||
Intangible assets | ||
Goodwill | 163.2 | |
Other | ||
Intangible assets | ||
Goodwill | 77.2 | |
Non-Automotive Investments | ||
Intangible assets | ||
Goodwill | $ 0 |
Vehicle Financing (Details)
Vehicle Financing (Details) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
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) | 2.30% | 2.10% |
Earnings Per Share - (Details)
Earnings Per Share - (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Reconciliation of number of shares used in calculation of basic and diluted earnings per share | ||||
Weighted average number of common shares outstanding | 82,872,330 | 84,941,932 | 83,625,142 | 85,443,607 |
Effect of non-participatory equity compensation (in shares) | 40,000 | 40,000 | 40,000 | 40,000 |
Weighted average number of common shares outstanding, including effect of dilutive securities | 82,912,330 | 84,981,932 | 83,665,142 | 85,483,607 |
Long-Term Debt (Details)
Long-Term Debt (Details) £ in Millions, $ in Millions, $ in Millions | 1 Months Ended | 6 Months Ended | ||||
Apr. 30, 2019 | Jun. 30, 2019GBP (£)item | Jul. 31, 2019USD ($) | Jun. 30, 2019AUD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) | |
Long Term Debt | ||||||
Total long-term debt | $ 2,227.5 | $ 2,216.7 | ||||
Less: current portion | (93.3) | (92) | ||||
Net long-term debt | $ 2,134.2 | 2,124.7 | ||||
Domestic Subsidiaries ownership guaranteeing obligations (as a percent) | 100.00% | 100.00% | 100.00% | |||
US Credit Agreement Revolving Credit Line | ||||||
Long Term Debt | ||||||
Total long-term debt | 30 | |||||
Maximum credit available | $ 700 | $ 700 | ||||
Revolving loans solely for future U.S. acquisitions | 250 | |||||
Future borrowings available for foreign acquisitions | 150 | |||||
Debt extension term | 1 year | |||||
Maximum amount available for letters of credit | $ 50 | |||||
Balance outstanding under credit agreement | 0 | |||||
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 | 92.7 | 163.3 | ||||
Maximum credit available | 150 | |||||
Additional facility capacity under accordion feature | 100 | |||||
UK Credit Agreement Revolving Credit Line | Minimum | LIBOR portion | ||||||
Long Term Debt | ||||||
Line of credit basis spread on variable rate (as a percent) | 1.10% | |||||
UK Credit Agreement Revolving Credit Line | Maximum | LIBOR portion | ||||||
Long Term Debt | ||||||
Line of credit basis spread on variable rate (as a percent) | 2.10% | |||||
UK Credit Agreement Overdraft Line of Credit | ||||||
Long Term Debt | ||||||
Total long-term debt | 1.8 | |||||
UK Credit Agreement Revolving Credit Line and Overdraft Line Of Credit | ||||||
Long Term Debt | ||||||
Balance outstanding under credit agreement | £ 73 | $ 92.7 | ||||
Senior Subordinated Notes | ||||||
Long Term Debt | ||||||
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 | ||||||
Long Term Debt | ||||||
Total long-term debt | $ 495.4 | $ 495.1 | ||||
Interest rate (as a percent) | 5.50% | 5.50% | 5.50% | 5.50% | ||
Principal amount | $ 500 | |||||
5.50% senior subordinated notes due 2026 | Debt Redemption Prior to May 15, 2021 | ||||||
Long Term Debt | ||||||
Interest rate (as a percent) | 5.50% | 5.50% | 5.50% | |||
Percentage of principal amount at which the entity may redeem the notes | 100.00% | |||||
5.50% senior subordinated notes due 2026 | Debt Instrument Redemption Period On or After May 15, 2021 | ||||||
Long Term Debt | ||||||
Interest rate (as a percent) | 5.50% | 5.50% | 5.50% | |||
5.50% senior subordinated notes due 2026 | Debt Redemption Prior to May 15, 2019 | ||||||
Long Term Debt | ||||||
Interest rate (as a percent) | 5.50% | 5.50% | 5.50% | |||
Percentage of principal amount at which the entity may redeem the notes | 40.00% | |||||
5.375% senior subordinated notes due 2024 | ||||||
Long Term Debt | ||||||
Total long-term debt | $ 297.8 | $ 297.6 | ||||
Interest rate (as a percent) | 5.375% | 5.375% | 5.375% | 5.375% | ||
Principal amount | $ 300 | |||||
5.375% senior subordinated notes due 2024 | Debt Redemption Prior To December 1, 2019 | ||||||
Long Term Debt | ||||||
Interest rate (as a percent) | 5.375% | 5.375% | 5.375% | |||
Percentage of principal amount at which the entity may redeem the notes | 100.00% | |||||
5.375% senior subordinated notes due 2024 | Debt Instrument Redemption Period On or After December 1, 2019 | ||||||
Long Term Debt | ||||||
Interest rate (as a percent) | 5.375% | 5.375% | 5.375% | |||
5.75% senior subordinated notes due 2022 | ||||||
Long Term Debt | ||||||
Total long-term debt | $ 547.2 | $ 546.8 | ||||
Interest rate (as a percent) | 5.75% | 5.75% | 5.75% | 5.75% | ||
Principal amount | $ 550 | |||||
3.75% senior subordinated notes due 2020 | ||||||
Long Term Debt | ||||||
Total long-term debt | $ 298.5 | $ 297.9 | ||||
Interest rate (as a percent) | 3.75% | 3.75% | 3.75% | 3.75% | ||
Principal amount | $ 300 | |||||
Percentage of principal amount at which the entity may redeem the notes | 100.00% | |||||
Australia capital loan agreement | ||||||
Long Term Debt | ||||||
Total long-term debt | 32.6 | $ 33.6 | ||||
Maximum credit available | $ 50 | |||||
Debt term | 5 years | |||||
Call period | 90 days | |||||
Maximum amount of debt guaranteed by the Company's U.S. parent company | 50 | |||||
Balance outstanding under credit agreement | 46.5 | 32.6 | ||||
Number of facilities | item | 2 | |||||
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 | 6.1 | |||||
Maximum credit available | 50 | |||||
Debt term | 1 year | |||||
Call period | 90 days | |||||
Maximum amount of debt guaranteed by the Company's U.S. parent company | $ 50 | |||||
Balance outstanding under credit agreement | 0 | |||||
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 | 402.1 | 289.6 | ||||
Balance outstanding under credit agreement | 402.1 | |||||
Other debt | ||||||
Long Term Debt | ||||||
Total long-term debt | $ 61.2 | $ 54.9 |
Commitments and Contingent Li_2
Commitments and Contingent Liabilities (Details) $ in Millions | Jun. 30, 2019USD ($) |
Loss Contingencies | |
Letters of credit outstanding | $ 31.6 |
Surety bonds posted | $ 20.5 |
Equity (Details)
Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Securities Repurchase Program | ||||
Repurchase of common stock | $ 76.2 | $ 5.8 | $ 130.6 | $ 55.8 |
Securities Repurchase Program | ||||
Securities Repurchase Program | ||||
Repurchased shares | 1,591,917 | 2,850,265 | ||
Repurchase of common stock | $ 71.3 | $ 125.7 | ||
Repurchased shares, average price (in dollars per share) | $ 44.79 | $ 44.08 | ||
Remaining amount authorized to be repurchased | $ 74.4 | $ 74.4 | ||
Acquired Employee Equity Awards | ||||
Securities Repurchase Program | ||||
Repurchased shares | 114,949 | |||
Repurchase of common stock | $ 4.9 | |||
Repurchased shares, average price (in dollars per share) | $ 42.72 | |||
Roger S. Penske | Securities Repurchase Program | ||||
Securities Repurchase Program | ||||
Repurchased shares | 256,369 | |||
Repurchase of common stock | $ 11.4 | |||
Repurchased shares, average price (in dollars per share) | $ 44.40 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Changes in accumulated other comprehensive income (loss) by component | ||||
Balance at the beginning of the period | $ 2,609.1 | |||
Balance at the end of the period | $ 2,640.5 | 2,640.5 | ||
Foreign Currency Translation | ||||
Changes in accumulated other comprehensive income (loss) by component | ||||
Balance at the beginning of the period | (201.3) | $ (103.3) | (208.3) | $ (134) |
Other comprehensive income before reclassifications | (16.6) | (67.2) | (9.6) | (36.5) |
Net current period other comprehensive income | (16.6) | (67.2) | (9.6) | (36.5) |
Balance at the end of the period | (217.9) | (170.5) | (217.9) | (170.5) |
Other | ||||
Changes in accumulated other comprehensive income (loss) by component | ||||
Balance at the beginning of the period | (24.4) | (11.4) | (26.2) | (12.5) |
Other comprehensive income before reclassifications | 2 | (4.5) | 3.8 | (3.4) |
Net current period other comprehensive income | 2 | (4.5) | 3.8 | (3.4) |
Balance at the end of the period | (22.4) | (15.9) | (22.4) | (15.9) |
Accumulated Other Comprehensive Income (Loss) | ||||
Changes in accumulated other comprehensive income (loss) by component | ||||
Balance at the beginning of the period | (225.7) | (114.7) | (234.5) | (146.5) |
Other comprehensive income before reclassifications | (14.6) | (71.7) | (5.8) | (39.9) |
Net current period other comprehensive income | (14.6) | (71.7) | (5.8) | (39.9) |
Balance at the end of the period | $ (240.3) | $ (186.4) | $ (240.3) | $ (186.4) |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)item | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Segment Reporting Information | |||||
Number of reportable segments | item | 4 | ||||
Number of operating segments | item | 6 | ||||
Revenues and segment income by reportable segment | |||||
Revenues | $ 5,755.8 | $ 5,940.3 | $ 11,320.2 | $ 11,687.2 | |
Segment income | 159.9 | 176.2 | $ 293.7 | 320.5 | |
Operating segments | |||||
Segment Reporting Information | |||||
Number of reportable segments | item | 1 | ||||
Retail Automotive Dealership | |||||
Revenues and segment income by reportable segment | |||||
Revenues | 5,196.3 | 5,455.5 | $ 10,287.5 | 10,751.5 | $ 20,800 |
Retail Automotive Dealership | Operating segments | |||||
Revenues and segment income by reportable segment | |||||
Revenues | 5,196.3 | 5,455.5 | 10,287.5 | 10,751.5 | |
Segment income | 98.1 | 117 | 183 | 223.6 | |
Retail Commercial Truck Dealership | |||||
Revenues and segment income by reportable segment | |||||
Revenues | 426.8 | 338.8 | 759.1 | 631.2 | |
Retail Commercial Truck Dealership | Operating segments | |||||
Revenues and segment income by reportable segment | |||||
Revenues | 426.8 | 338.8 | 759.1 | 631.2 | |
Segment income | 18.9 | 16 | 34.8 | 28.1 | |
Other | Operating segments | |||||
Revenues and segment income by reportable segment | |||||
Revenues | 132.7 | 146 | 273.6 | 304.5 | |
Segment income | 4.9 | 8.2 | 12.1 | 17.8 | |
Non-Automotive Investments | Operating segments | |||||
Revenues and segment income by reportable segment | |||||
Segment income | $ 38 | $ 35 | $ 63.8 | $ 51 |
Condensed Consolidating Finan_3
Condensed Consolidating Financial Information - Balance Sheet (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Condensed consolidating balance sheet | |||||||
Cash and cash equivalents | $ 43.8 | $ 39.4 | $ 45.8 | $ 45.7 | |||
Accounts receivable, net | 944.4 | 929.1 | |||||
Inventories | 3,978 | 4,040.1 | |||||
Other current assets | 109.1 | 86.6 | |||||
Total current assets | 5,075.3 | 5,095.2 | |||||
Property and equipment, net | 2,308.9 | 2,250 | |||||
Operating lease right-of-use assets | 2,380.9 | $ 2,425.6 | |||||
Intangible assets | 2,235 | 2,238.2 | |||||
Equity method investments | 1,342.2 | 1,305.2 | |||||
Other long-term assets | 18.8 | 15.9 | |||||
Total assets | 13,361.1 | 10,904.5 | |||||
Floor plan notes payable | 2,350.3 | 2,362.2 | |||||
Floor plan notes payable - non-trade | 1,435.5 | 1,428.6 | |||||
Accounts payable | 638.5 | 598.2 | |||||
Accrued expenses and other current liabilities | 651.8 | 636.8 | 566.6 | ||||
Current portion of long-term debt | 93.3 | 92 | |||||
Liabilities held for sale | 0.5 | 0.7 | |||||
Total current liabilities | 5,169.9 | 5,048.3 | |||||
Long-term debt | 2,134.2 | 2,124.7 | |||||
Long-term operating lease liabilities | 2,330.3 | 2,387.5 | |||||
Deferred tax liabilities | 604.1 | 578.7 | 577.8 | ||||
Other long-term liabilities | 461.6 | $ 481 | 519 | ||||
Total liabilities | 10,700.1 | 8,269.8 | |||||
Total equity | 2,661 | $ 2,660.9 | 2,634.7 | 2,525.8 | $ 2,494.4 | 2,428 | |
Total liabilities and equity | $ 13,361.1 | $ 10,904.5 | |||||
Domestic Subsidiaries ownership guaranteeing obligations (as a percent) | 100.00% | ||||||
3.75% senior subordinated notes due 2020 | |||||||
Condensed consolidating balance sheet | |||||||
Interest rate (as a percent) | 3.75% | 3.75% | |||||
5.75% senior subordinated notes due 2022 | |||||||
Condensed consolidating balance sheet | |||||||
Interest rate (as a percent) | 5.75% | 5.75% | |||||
5.375% senior subordinated notes due 2024 | |||||||
Condensed consolidating balance sheet | |||||||
Interest rate (as a percent) | 5.375% | 5.375% | |||||
5.50% senior subordinated notes due 2026 | |||||||
Condensed consolidating balance sheet | |||||||
Interest rate (as a percent) | 5.50% | 5.50% | |||||
Eliminations | |||||||
Condensed consolidating balance sheet | |||||||
Accounts receivable, net | $ (490.9) | $ (481.7) | |||||
Total current assets | (490.9) | (481.7) | |||||
Other long-term assets | (2,830.9) | (2,814.3) | |||||
Total assets | (3,321.8) | (3,296) | |||||
Accrued expenses and other current liabilities | (490.9) | (481.7) | |||||
Total current liabilities | (490.9) | (481.7) | |||||
Long-term debt | (82.3) | (88.6) | |||||
Total liabilities | (573.2) | (570.3) | |||||
Total equity | (2,748.6) | (2,725.7) | |||||
Total liabilities and equity | (3,321.8) | (3,296) | |||||
Reportable legal entities | Penske Automotive Group | |||||||
Condensed consolidating balance sheet | |||||||
Accounts receivable, net | 490.9 | 481.7 | |||||
Other current assets | 8.6 | 10.6 | |||||
Total current assets | 499.5 | 492.3 | |||||
Property and equipment, net | 3.8 | 3.9 | |||||
Operating lease right-of-use assets | 9.5 | ||||||
Equity method investments | 1,276.4 | 1,239.9 | |||||
Other long-term assets | 2,838.6 | 2,821 | |||||
Total assets | 4,627.8 | 4,557.1 | |||||
Floor plan notes payable - non-trade | 225.9 | 232.3 | |||||
Accounts payable | 4.9 | 4.9 | |||||
Accrued expenses and other current liabilities | 1.7 | 1.4 | |||||
Total current liabilities | 232.5 | 238.6 | |||||
Long-term debt | 1,725.2 | 1,683.8 | |||||
Long-term operating lease liabilities | 9.1 | ||||||
Total liabilities | 1,966.8 | 1,922.4 | |||||
Total equity | 2,661 | 2,634.7 | |||||
Total liabilities and equity | 4,627.8 | 4,557.1 | |||||
Reportable legal entities | Guarantor Subsidiaries | |||||||
Condensed consolidating balance sheet | |||||||
Cash and cash equivalents | 2.5 | 12.9 | 0.4 | 14.8 | |||
Accounts receivable, net | 462.3 | 507.1 | |||||
Inventories | 1,966.1 | 1,961.6 | |||||
Other current assets | 21.8 | 17.8 | |||||
Total current assets | 2,452.7 | 2,499.4 | |||||
Property and equipment, net | 1,101 | 1,077.7 | |||||
Operating lease right-of-use assets | 1,600 | ||||||
Intangible assets | 1,422.2 | 1,422.6 | |||||
Other long-term assets | 2.8 | 2.9 | |||||
Total assets | 6,578.7 | 5,002.6 | |||||
Floor plan notes payable | 1,350.6 | 1,348.3 | |||||
Floor plan notes payable - non-trade | 473.1 | 505.9 | |||||
Accounts payable | 177.5 | 196.6 | |||||
Accrued expenses and other current liabilities | 222 | 160.2 | |||||
Current portion of long-term debt | 10.4 | 6.3 | |||||
Liabilities held for sale | 0.5 | 0.7 | |||||
Total current liabilities | 2,234.1 | 2,218 | |||||
Long-term debt | 259 | 225.7 | |||||
Long-term operating lease liabilities | 1,573 | ||||||
Deferred tax liabilities | 598.9 | 570.5 | |||||
Other long-term liabilities | 32 | 57.6 | |||||
Total liabilities | 4,697 | 3,071.8 | |||||
Total equity | 1,881.7 | 1,930.8 | |||||
Total liabilities and equity | 6,578.7 | 5,002.6 | |||||
Reportable legal entities | Non-Guarantor Subsidiaries | |||||||
Condensed consolidating balance sheet | |||||||
Cash and cash equivalents | 41.3 | 26.5 | $ 45.4 | $ 30.9 | |||
Accounts receivable, net | 482.1 | 422 | |||||
Inventories | 2,011.9 | 2,078.5 | |||||
Other current assets | 78.7 | 58.2 | |||||
Total current assets | 2,614 | 2,585.2 | |||||
Property and equipment, net | 1,204.1 | 1,168.4 | |||||
Operating lease right-of-use assets | 771.4 | ||||||
Intangible assets | 812.8 | 815.6 | |||||
Equity method investments | 65.8 | 65.3 | |||||
Other long-term assets | 8.3 | 6.3 | |||||
Total assets | 5,476.4 | 4,640.8 | |||||
Floor plan notes payable | 999.7 | 1,013.9 | |||||
Floor plan notes payable - non-trade | 736.5 | 690.4 | |||||
Accounts payable | 456.1 | 396.7 | |||||
Accrued expenses and other current liabilities | 919 | 886.7 | |||||
Current portion of long-term debt | 82.9 | 85.7 | |||||
Total current liabilities | 3,194.2 | 3,073.4 | |||||
Long-term debt | 232.3 | 303.8 | |||||
Long-term operating lease liabilities | 748.2 | ||||||
Deferred tax liabilities | 5.2 | 7.3 | |||||
Other long-term liabilities | 429.6 | 461.4 | |||||
Total liabilities | 4,609.5 | 3,845.9 | |||||
Total equity | 866.9 | 794.9 | |||||
Total liabilities and equity | $ 5,476.4 | $ 4,640.8 |
Condensed Consolidating Finan_4
Condensed Consolidating Financial Information - Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Condensed consolidating statement of income | ||||
Revenues | $ 5,755.8 | $ 5,940.3 | $ 11,320.2 | $ 11,687.2 |
Cost of sales | 4,888 | 5,050.5 | 9,600.9 | 9,933 |
Gross profit | 867.8 | 889.8 | 1,719.3 | 1,754.2 |
Selling, general and administrative expenses | 668.9 | 675.4 | 1,335.3 | 1,338.5 |
Depreciation | 27.1 | 25.7 | 53.5 | 51.3 |
Operating income | 171.8 | 188.7 | 330.5 | 364.4 |
Floor plan interest expense | (21) | (19.9) | (42.8) | (38.8) |
Other interest expense | (30.4) | (28.6) | (60.3) | (58.4) |
Equity in earnings of affiliates | 39.5 | 36 | 66.3 | 53.3 |
Income from continuing operations before income taxes | 159.9 | 176.2 | 293.7 | 320.5 |
Income taxes | (41.5) | (41) | (76.2) | (77.6) |
Income from continuing operations | 118.4 | 135.2 | 217.5 | 242.9 |
Income (loss) income from discontinued operations, net of tax | 0.1 | 0.2 | 0.1 | |
Net income | 118.5 | 135.2 | 217.7 | 243 |
Other comprehensive income, net of tax | (14.5) | (72.8) | (6) | (41) |
Comprehensive income | 104 | 62.4 | 211.7 | 202 |
Less: Comprehensive income (loss) attributable to non-controlling interests | 0.8 | (0.5) | (0.5) | (0.8) |
Comprehensive income attributable to Penske Automotive Group common stockholders | 103.2 | 62.9 | 212.2 | 202.8 |
Eliminations | ||||
Condensed consolidating statement of income | ||||
Equity in earnings of subsidiaries | (150) | (168.3) | (287.1) | (325.9) |
Income from continuing operations before income taxes | (150) | (168.3) | (287.1) | (325.9) |
Income taxes | 39.1 | 39.4 | 74.4 | 79.2 |
Income from continuing operations | (110.9) | (128.9) | (212.7) | (246.7) |
Income (loss) income from discontinued operations, net of tax | (0.1) | (0.2) | (0.1) | |
Net income | (111) | (128.9) | (212.9) | (246.8) |
Other comprehensive income, net of tax | 17.2 | 68.1 | 10.3 | 36.6 |
Comprehensive income | (93.8) | (60.8) | (202.6) | (210.2) |
Less: Comprehensive income (loss) attributable to non-controlling interests | (0.2) | 1.1 | 0.1 | 1.1 |
Comprehensive income attributable to Penske Automotive Group common stockholders | (93.6) | (61.9) | (202.7) | (211.3) |
Penske Automotive Group | Reportable legal entities | ||||
Condensed consolidating statement of income | ||||
Selling, general and administrative expenses | 6.8 | 6.6 | 13.4 | 12.8 |
Depreciation | 0.4 | 0.4 | 0.7 | 0.8 |
Operating income | (7.2) | (7) | (14.1) | (13.6) |
Floor plan interest expense | (2.4) | (1.8) | (4.2) | (3.4) |
Other interest expense | (19.3) | (18.9) | (38.5) | (39.7) |
Equity in earnings of affiliates | 38 | 35 | 63.8 | 51 |
Equity in earnings of subsidiaries | 150 | 168.3 | 287.1 | 325.9 |
Income from continuing operations before income taxes | 159.1 | 175.6 | 294.1 | 320.2 |
Income taxes | (41.5) | (41) | (76.3) | (77.6) |
Income from continuing operations | 117.6 | 134.6 | 217.8 | 242.6 |
Income (loss) income from discontinued operations, net of tax | 0.1 | 0.2 | 0.1 | |
Net income | 117.7 | 134.6 | 218 | 242.7 |
Other comprehensive income, net of tax | (14.5) | (72.8) | (6) | (41) |
Comprehensive income | 103.2 | 61.8 | 212 | 201.7 |
Less: Comprehensive income (loss) attributable to non-controlling interests | 0.2 | (1.1) | (0.1) | (1.1) |
Comprehensive income attributable to Penske Automotive Group common stockholders | 103 | 62.9 | 212.1 | 202.8 |
Guarantor Subsidiaries | Reportable legal entities | ||||
Condensed consolidating statement of income | ||||
Revenues | 3,127.6 | 3,071.8 | 5,979 | 5,928.3 |
Cost of sales | 2,628.9 | 2,582.3 | 5,011.8 | 4,977.5 |
Gross profit | 498.7 | 489.5 | 967.2 | 950.8 |
Selling, general and administrative expenses | 364.5 | 359.7 | 722.9 | 703 |
Depreciation | 14.6 | 13.7 | 29.1 | 27.3 |
Operating income | 119.6 | 116.1 | 215.2 | 220.5 |
Floor plan interest expense | (14.3) | (12.3) | (29.3) | (23.6) |
Other interest expense | (3) | (2) | (6) | (3.9) |
Income from continuing operations before income taxes | 102.3 | 101.8 | 179.9 | 193 |
Income taxes | (29.5) | (27.4) | (52.5) | (52.4) |
Income from continuing operations | 72.8 | 74.4 | 127.4 | 140.6 |
Income (loss) income from discontinued operations, net of tax | 0.1 | 0.2 | 0.1 | |
Net income | 72.9 | 74.4 | 127.6 | 140.7 |
Comprehensive income | 72.9 | 74.4 | 127.6 | 140.7 |
Comprehensive income attributable to Penske Automotive Group common stockholders | 72.9 | 74.4 | 127.6 | 140.7 |
Non-Guarantor Subsidiaries | Reportable legal entities | ||||
Condensed consolidating statement of income | ||||
Revenues | 2,628.2 | 2,868.5 | 5,341.2 | 5,758.9 |
Cost of sales | 2,259.1 | 2,468.2 | 4,589.1 | 4,955.5 |
Gross profit | 369.1 | 400.3 | 752.1 | 803.4 |
Selling, general and administrative expenses | 297.6 | 309.1 | 599 | 622.7 |
Depreciation | 12.1 | 11.6 | 23.7 | 23.2 |
Operating income | 59.4 | 79.6 | 129.4 | 157.5 |
Floor plan interest expense | (4.3) | (5.8) | (9.3) | (11.8) |
Other interest expense | (8.1) | (7.7) | (15.8) | (14.8) |
Equity in earnings of affiliates | 1.5 | 1 | 2.5 | 2.3 |
Income from continuing operations before income taxes | 48.5 | 67.1 | 106.8 | 133.2 |
Income taxes | (9.6) | (12) | (21.8) | (26.8) |
Income from continuing operations | 38.9 | 55.1 | 85 | 106.4 |
Net income | 38.9 | 55.1 | 85 | 106.4 |
Other comprehensive income, net of tax | (17.2) | (68.1) | (10.3) | (36.6) |
Comprehensive income | 21.7 | (13) | 74.7 | 69.8 |
Less: Comprehensive income (loss) attributable to non-controlling interests | 0.8 | (0.5) | (0.5) | (0.8) |
Comprehensive income attributable to Penske Automotive Group common stockholders | $ 20.9 | $ (12.5) | $ 75.2 | $ 70.6 |
Condensed Consolidating Finan_5
Condensed Consolidating Financial Information - Cash Flows (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Condensed consolidating statement of cash flows | ||
Net cash provided by (used in) continuing operating activities | $ 304.6 | $ 417 |
Investing activities: | ||
Purchase of equipment and improvements | (134.5) | (118.8) |
Proceeds from sale of dealerships | 7.2 | 58.4 |
Proceeds from sale-leaseback transactions | 7.3 | 5.8 |
Acquisitions, net | (1.1) | (168.6) |
Other | (0.9) | (3) |
Net cash used in continuing investing activities | (122) | (226.2) |
Financing activities: | ||
Net borrowings (repayments) of long-term debt | 9.8 | 23.1 |
Net borrowings (repayments) of floor plan notes payable - non-trade | 6.8 | (92.9) |
Repurchases of common stock | (130.6) | (55.8) |
Dividends | (64.5) | (59) |
Other | 0.4 | (6.1) |
Net cash used in by continuing financing activities | (178.1) | (190.7) |
Net cash (used in) provided by discontinued operations | 0.2 | |
Effect of exchange rate changes on cash and cash equivalents | (0.1) | (0.2) |
Net change in cash and cash equivalents | 4.4 | 0.1 |
Cash and cash equivalents, beginning of period | 39.4 | 45.7 |
Cash and cash equivalents, end of period | 43.8 | 45.8 |
Penske Automotive Group | Reportable legal entities | ||
Condensed consolidating statement of cash flows | ||
Net cash provided by (used in) continuing operating activities | (18.4) | (24.5) |
Investing activities: | ||
Purchase of equipment and improvements | (0.7) | (0.4) |
Other | (1.3) | (1.9) |
Net cash used in continuing investing activities | (2) | (2.3) |
Financing activities: | ||
Net borrowings (repayments) of long-term debt | 39.9 | (73) |
Net borrowings (repayments) of floor plan notes payable - non-trade | (6.4) | 1.8 |
Repurchases of common stock | (130.6) | (55.8) |
Dividends | (64.5) | (59) |
Other | 0.4 | (0.3) |
Distributions from (to) parent | 181.6 | 213.1 |
Net cash used in by continuing financing activities | 20.4 | 26.8 |
Guarantor Subsidiaries | Reportable legal entities | ||
Condensed consolidating statement of cash flows | ||
Net cash provided by (used in) continuing operating activities | 214 | 357.2 |
Investing activities: | ||
Purchase of equipment and improvements | (56) | (68.4) |
Proceeds from sale of dealerships | 7.2 | 55.9 |
Net cash used in continuing investing activities | (48.8) | (12.5) |
Financing activities: | ||
Net borrowings (repayments) of long-term debt | 37 | (56.5) |
Net borrowings (repayments) of floor plan notes payable - non-trade | (32.8) | (98.8) |
Other | (5.8) | |
Distributions from (to) parent | (179.8) | (198.2) |
Net cash used in by continuing financing activities | (175.6) | (359.3) |
Net cash (used in) provided by discontinued operations | 0.2 | |
Net change in cash and cash equivalents | (10.4) | (14.4) |
Cash and cash equivalents, beginning of period | 12.9 | 14.8 |
Cash and cash equivalents, end of period | 2.5 | 0.4 |
Non-Guarantor Subsidiaries | Reportable legal entities | ||
Condensed consolidating statement of cash flows | ||
Net cash provided by (used in) continuing operating activities | 109 | 84.3 |
Investing activities: | ||
Purchase of equipment and improvements | (77.8) | (50) |
Proceeds from sale of dealerships | 2.5 | |
Proceeds from sale-leaseback transactions | 7.3 | |
Acquisitions, net | (1.1) | (168.6) |
Other | 0.4 | (1.1) |
Net cash used in continuing investing activities | (71.2) | (211.4) |
Financing activities: | ||
Net borrowings (repayments) of long-term debt | (67.1) | 152.6 |
Net borrowings (repayments) of floor plan notes payable - non-trade | 46 | 4.1 |
Distributions from (to) parent | (1.8) | (14.9) |
Net cash used in by continuing financing activities | (22.9) | 141.8 |
Effect of exchange rate changes on cash and cash equivalents | (0.1) | (0.2) |
Net change in cash and cash equivalents | 14.8 | 14.5 |
Cash and cash equivalents, beginning of period | 26.5 | 30.9 |
Cash and cash equivalents, end of period | $ 41.3 | $ 45.4 |