UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 30, 2022~~March 31, 2023


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-12297

Penske Automotive Group, Inc.

(Exact name of registrant as specified in its charter)


Delaware			22-3086739
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

2555 Telegraph Road
Bloomfield Hills, Michigan			48302-0954
(Address of principal executive offices)			(Zip Code)

~~Registrant’s~~Registrant's telephone number, including area code:

(248) 648-2500

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Voting Common Stock, par value $0.0001 per share	PAG	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of ~~“large~~"large accelerated filer,~~” “accelerated~~" "accelerated filer,~~” “smaller~~" "smaller reporting company,”" and ~~“emerging~~"emerging growth ~~company”~~company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of ~~July 26, 2022,~~April 19, 2023, there were ~~74,202,399~~69,000,218 shares of voting common stock outstanding.

Table of Contents

TABLE OF CONTENTS


			Page

PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheets as of ~~June 30, 2022,~~March 31, 2023, and December 31, ~~2021~~2022			3
Consolidated Condensed Statements of Income for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~			4
Consolidated Condensed Statements of Comprehensive Income for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~			5
Consolidated Condensed Statements of Cash Flows for the ~~six~~three months ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~			6
Consolidated Condensed Statement of Equity for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~			7
Notes to Consolidated Condensed Financial Statements			98
Item 2. ~~Management’s~~Management's Discussion and Analysis of Financial Condition and Results of Operations			2523
Item 3. Quantitative & Qualitative Disclosures About Market Risk			5244
Item 4. Controls and Procedures			5345
PART II — OTHER INFORMATION
Item 1. Legal Proceedings			5446
Item 1A. Risk Factors			46
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			5447
Item 6. Exhibits			5548

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

PENSKE AUTOMOTIVE GROUP, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
		(Unaudited)					(Unaudited)
		(In millions, except share and per share amounts)					(In millions, except share and per share amounts)
ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	154.9	$	100.7	Cash and cash equivalents	$	100.6	$	106.5
Accounts receivable, net of allowance for doubtful accounts of $5.7 and $6.8		774.3		734.0
Accounts receivable, net of allowance for doubtful accounts of $6.7 and $6.6						Accounts receivable, net of allowance for doubtful accounts of $6.7 and $6.6	920.2		906.7
Inventories	Inventories	3,055.2		3,129.0		Inventories	3,630.4		3,509.1
Other current assets	Other current assets	147.9		111.7		Other current assets	171.7		141.9
Total current assets	Total current assets	4,132.3		4,075.4		Total current assets	4,822.9		4,664.2
Property and equipment, net	Property and equipment, net	2,402.3		2,442.2		Property and equipment, net	2,566.8		2,496.5
Operating lease right-of-use assets	Operating lease right-of-use assets	2,435.4		2,451.4		Operating lease right-of-use assets	2,375.6		2,416.1
Goodwill	Goodwill	2,139.7		2,124.1		Goodwill	2,162.5		2,154.7
Other indefinite-lived intangible assets	Other indefinite-lived intangible assets	677.9		641.5		Other indefinite-lived intangible assets	692.3		690.9
Equity method investments	Equity method investments	1,672.9		1,688.1		Equity method investments	1,719.5		1,636.9
Other long-term assets	Other long-term assets	43.6		41.9		Other long-term assets	56.2		55.3
Total assets	Total assets	$	13,504.1	$	13,464.6	Total assets	$	14,395.8	$	14,114.6
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Floor plan notes payable	Floor plan notes payable	$	1,205.6	$	1,144.8	Floor plan notes payable	$	1,584.2	$	1,565.7
Floor plan notes payable — non-trade	Floor plan notes payable — non-trade	1,236.5		1,409.9		Floor plan notes payable — non-trade	1,311.9		1,430.6
Accounts payable	Accounts payable	841.1		767.1		Accounts payable	922.2		853.5
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	853.1		870.3		Accrued expenses and other current liabilities	861.1		788.1
Current portion of long-term debt	Current portion of long-term debt	78.5		82.0		Current portion of long-term debt	81.5		75.2
Liabilities held for sale		—		0.5

Total current liabilities	Total current liabilities	4,214.8		4,274.6		Total current liabilities	4,760.9		4,713.1
Long-term debt	Long-term debt	1,407.5		1,392.0		Long-term debt	1,619.8		1,546.9
Long-term operating lease liabilities	Long-term operating lease liabilities	2,356.0		2,373.6		Long-term operating lease liabilities	2,302.5		2,335.7
Deferred tax liabilities	Deferred tax liabilities	1,083.9		1,060.4		Deferred tax liabilities	1,138.0		1,121.0
Other long-term liabilities	Other long-term liabilities	222.5		269.0		Other long-term liabilities	223.2		223.1
Total liabilities	Total liabilities	9,284.7		9,369.6		Total liabilities	10,044.4		9,939.8
Commitments and contingent liabilities (Note 10)	Commitments and contingent liabilities (Note 10)	0		—		Commitments and contingent liabilities (Note 10)
Equity	Equity					Equity
Penske Automotive Group stockholders’ equity:
Penske Automotive Group stockholders' equity:						Penske Automotive Group stockholders' equity:
Preferred Stock, $0.0001 par value; 100,000 shares authorized; none issued and outstanding	Preferred Stock, $0.0001 par value; 100,000 shares authorized; none issued and outstanding	—		—		Preferred Stock, $0.0001 par value; 100,000 shares authorized; none issued and outstanding	—		—
Common Stock, $0.0001 par value, 240,000,000 shares authorized; 75,015,462 shares issued and outstanding at June 30, 2022; 77,574,172 shares issued and outstanding at December 31, 2021		—		—
Common Stock, $0.0001 par value, 240,000,000 shares authorized; 69,000,558 shares issued and outstanding at March 31, 2023; 69,681,891 shares issued and outstanding at December 31, 2022						Common Stock, $0.0001 par value, 240,000,000 shares authorized; 69,000,558 shares issued and outstanding at March 31, 2023; 69,681,891 shares issued and outstanding at December 31, 2022	—		—
Non-voting Common Stock, $0.0001 par value; 7,125,000 shares authorized; none issued and outstanding	Non-voting Common Stock, $0.0001 par value; 7,125,000 shares authorized; none issued and outstanding	—		—		Non-voting Common Stock, $0.0001 par value; 7,125,000 shares authorized; none issued and outstanding	—		—
Class C Common Stock, $0.0001 par value; 20,000,000 shares authorized; none issued and outstanding	Class C Common Stock, $0.0001 par value; 20,000,000 shares authorized; none issued and outstanding	—		—		Class C Common Stock, $0.0001 par value; 20,000,000 shares authorized; none issued and outstanding	—		—
Additional paid-in capital	Additional paid-in capital	—		42.2		Additional paid-in capital	—		—
Retained earnings	Retained earnings	4,506.7		4,196.6		Retained earnings	4,635.8		4,483.3
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	(311.9)		(168.8)		Accumulated other comprehensive income (loss)	(312.5)		(335.3)
Total Penske Automotive Group stockholders’ equity		4,194.8		4,070.0
Total Penske Automotive Group stockholders' equity						Total Penske Automotive Group stockholders' equity	4,323.3		4,148.0
Non-controlling interest	Non-controlling interest	24.6		25.0		Non-controlling interest	28.1		26.8
Total equity	Total equity	4,219.4		4,095.0		Total equity	4,351.4		4,174.8
Total liabilities and equity	Total liabilities and equity	$	13,504.1	$	13,464.6	Total liabilities and equity	$	14,395.8	$	14,114.6

See Notes to Consolidated Condensed Financial Statements

Table of Contents

PENSKE AUTOMOTIVE GROUP, INC.

CONSOLIDATED CONDENSED STATEMENTS OF INCOME


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(Unaudited)									(Unaudited)
		(In millions, except per share amounts)									(In millions, except per share amounts)
Revenue:	Revenue:									Revenue:
Retail automotive dealership	Retail automotive dealership	$	5,997.3	$	6,197.6	$	12,026.5	$	11,404.5	Retail automotive dealership	$	6,299.8	$	6,029.2
Retail commercial truck dealership	Retail commercial truck dealership	768.7		625.3		1,561.0		1,060.0		Retail commercial truck dealership	895.6		792.3
Commercial vehicle distribution and other	Commercial vehicle distribution and other	140.9		164.6		294.8		296.8		Commercial vehicle distribution and other	143.6		153.9
Total revenues	Total revenues	6,906.9		6,987.5		13,882.3		12,761.3		Total revenues	7,339.0		6,975.4
Cost of sales:	Cost of sales:									Cost of sales:
Retail automotive dealership	Retail automotive dealership	4,937.3		5,157.2		9,915.8		9,564.2		Retail automotive dealership	5,237.2		4,978.5
Retail commercial truck dealership	Retail commercial truck dealership	632.7		522.6		1,283.8		877.3		Retail commercial truck dealership	748.6		651.1
Commercial vehicle distribution and other	Commercial vehicle distribution and other	99.9		125.0		214.0		223.9		Commercial vehicle distribution and other	100.9		114.1
Total cost of sales	Total cost of sales	5,669.9		5,804.8		11,413.6		10,665.4		Total cost of sales	6,086.7		5,743.7
Gross profit	Gross profit	1,237.0		1,182.7		2,468.7		2,095.9		Gross profit	1,252.3		1,231.7
Selling, general and administrative expenses		817.7		749.8		1,615.5		1,414.1
Selling, general, and administrative expenses										Selling, general, and administrative expenses	844.9		797.8
Depreciation	Depreciation	31.7		30.2		63.6		59.5		Depreciation	33.9		31.9
Operating income	Operating income	387.6		402.7		789.6		622.3		Operating income	373.5		402.0
Floor plan interest expense	Floor plan interest expense	(9.0)		(7.9)		(16.5)		(17.4)		Floor plan interest expense	(27.9)		(7.5)
Other interest expense	Other interest expense	(17.0)		(19.7)		(33.5)		(37.6)		Other interest expense	(20.8)		(16.5)
Debt redemption costs		—		(17.0)		—		(17.0)

Equity in earnings of affiliates	Equity in earnings of affiliates	138.0		105.6		257.6		161.0		Equity in earnings of affiliates	82.1		119.6
Income from continuing operations before income taxes		499.6		463.7		997.2		711.3
Income before income taxes										Income before income taxes	406.9		497.6
Income taxes	Income taxes	(123.7)		(123.4)		(251.8)		(187.9)		Income taxes	(107.3)		(128.1)
Income from continuing operations		375.9		340.3		745.4		523.4
Income from discontinued operations, net of tax		—		0.1		—		0.1

Net income	Net income	375.9		340.4		745.4		523.5		Net income	299.6		369.5
Less: Income attributable to non-controlling interests	Less: Income attributable to non-controlling interests	1.9		1.5		3.5		2.1		Less: Income attributable to non-controlling interests	1.3		1.6
Net income attributable to Penske Automotive Group common stockholders	Net income attributable to Penske Automotive Group common stockholders	$	374.0	$	338.9	$	741.9	$	521.4	Net income attributable to Penske Automotive Group common stockholders	$	298.3	$	367.9
Basic earnings per share attributable to Penske Automotive Group common stockholders:	Basic earnings per share attributable to Penske Automotive Group common stockholders:									Basic earnings per share attributable to Penske Automotive Group common stockholders:
Continuing operations		$	4.93	$	4.20	$	9.70	$	6.46
Discontinued operations		—		—		—		—

Net income attributable to Penske Automotive Group common stockholders	Net income attributable to Penske Automotive Group common stockholders	$	4.93	$	4.20	$	9.70	$	6.46	Net income attributable to Penske Automotive Group common stockholders	$	4.31	$	4.76
Shares used in determining basic earnings per share	Shares used in determining basic earnings per share	75.8		80.7		76.5		80.6		Shares used in determining basic earnings per share	69.2		77.2
Diluted earnings per share attributable to Penske Automotive Group common stockholders:	Diluted earnings per share attributable to Penske Automotive Group common stockholders:									Diluted earnings per share attributable to Penske Automotive Group common stockholders:
Continuing operations		$	4.93	$	4.20	$	9.70	$	6.46
Discontinued operations		—		—		—		—

Net income attributable to Penske Automotive Group common stockholders	Net income attributable to Penske Automotive Group common stockholders	$	4.93	$	4.20	$	9.70	$	6.46	Net income attributable to Penske Automotive Group common stockholders	$	4.31	$	4.76
Shares used in determining diluted earnings per share	Shares used in determining diluted earnings per share	75.8		80.7		76.5		80.7		Shares used in determining diluted earnings per share	69.2		77.2
Amounts attributable to Penske Automotive Group common stockholders:	Amounts attributable to Penske Automotive Group common stockholders:									Amounts attributable to Penske Automotive Group common stockholders:
Income from continuing operations		$	375.9	$	340.3	$	745.4	$	523.4
Net income										Net income	$	299.6	$	369.5
Less: Income attributable to non-controlling interests	Less: Income attributable to non-controlling interests	1.9		1.5		3.5		2.1		Less: Income attributable to non-controlling interests	1.3		1.6
Income from continuing operations, net of tax		374.0		338.8		741.9		521.3
Income from discontinued operations, net of tax		—		0.1		—		0.1

Net income attributable to Penske Automotive Group common stockholders	Net income attributable to Penske Automotive Group common stockholders	$	374.0	$	338.9	$	741.9	$	521.4	Net income attributable to Penske Automotive Group common stockholders	$	298.3	$	367.9
Cash dividends per share	Cash dividends per share	$	0.50	$	0.44	$	0.97	$	0.87	Cash dividends per share	$	0.61	$	0.47

See Notes to Consolidated Condensed Financial Statements

Table of Contents

PENSKE AUTOMOTIVE GROUP, INC.

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(Unaudited)									(Unaudited)
		(In millions)									(In millions)
Net income	Net income	$	375.9	$	340.4	$	745.4	$	523.5	Net income	$	299.6	$	369.5
Other comprehensive income (loss):	Other comprehensive income (loss):									Other comprehensive income (loss):
Foreign currency translation adjustment	Foreign currency translation adjustment	(120.3)		1.8		(148.8)		1.9		Foreign currency translation adjustment	18.3		(28.5)
Unrealized gain (loss) on interest rate swaps:
Unrealized gain (loss) arising during the period, net of tax (provision) benefit of $0.0, $0.2, $0.0, and ($1.1), respectively		—		(0.7)		—		3.0
Reclassification adjustment for loss included in floor plan interest expense, net of tax benefit of $0.0, $0.1, $0.0, and $0.2, respectively		—		0.3		—		0.5
Unrealized gain (loss) on interest rate swaps, net of tax		—		(0.4)		—		3.5

Other adjustments to comprehensive income, net	Other adjustments to comprehensive income, net	5.7		6.4		4.5		7.1		Other adjustments to comprehensive income, net	4.8		(1.2)
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	(114.6)		7.8		(144.3)		12.5		Other comprehensive income (loss), net of tax	23.1		(29.7)
Comprehensive income	Comprehensive income	261.3		348.2		601.1		536.0		Comprehensive income	322.7		339.8
Less: Comprehensive income attributable to non-controlling interests	Less: Comprehensive income attributable to non-controlling interests	1.1		1.7		2.3		1.8		Less: Comprehensive income attributable to non-controlling interests	1.6		1.2
Comprehensive income attributable to Penske Automotive Group common stockholders	Comprehensive income attributable to Penske Automotive Group common stockholders	$	260.2	$	346.5	$	598.8	$	534.2	Comprehensive income attributable to Penske Automotive Group common stockholders	$	321.1	$	338.6

See Notes to Consolidated Condensed Financial Statements

Table of Contents

PENSKE AUTOMOTIVE GROUP, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS


		Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021			2023		2022
		(Unaudited)					(Unaudited)
		(In millions)					(In millions)
Operating Activities:	Operating Activities:					Operating Activities:
Net income	Net income	$	745.4	$	523.5	Net income	$	299.6	$	369.5
Adjustments to reconcile net income to net cash from continuing operating activities:
Adjustments to reconcile net income to net cash from operating activities:						Adjustments to reconcile net income to net cash from operating activities:
Depreciation	Depreciation	63.6		59.5		Depreciation	33.9		31.9
Earnings of equity method investments	Earnings of equity method investments	(198.4)		(134.2)		Earnings of equity method investments	(82.1)		(119.6)
Income from discontinued operations, net of tax		—		(0.1)

Deferred income taxes	Deferred income taxes	74.8		100.1		Deferred income taxes	13.7		41.4
Debt redemption costs		—		17.0

Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Accounts receivable	Accounts receivable	(58.1)		(106.2)		Accounts receivable	(10.2)		(101.1)
Inventories	Inventories	(15.1)		525.1		Inventories	(95.2)		30.8
Floor plan notes payable	Floor plan notes payable	121.0		(396.9)		Floor plan notes payable	8.1		(12.9)
Accounts payable and accrued expenses	Accounts payable and accrued expenses	129.7		315.3		Accounts payable and accrued expenses	131.6		134.6
Other	Other	16.3		13.6		Other	11.8		6.0
Net cash provided by continuing operating activities		879.2		916.7
Net cash provided by operating activities						Net cash provided by operating activities	311.2		380.6
Investing Activities:	Investing Activities:					Investing Activities:
Purchases of property, equipment, and improvements	Purchases of property, equipment, and improvements	(138.1)		(90.8)		Purchases of property, equipment, and improvements	(102.4)		(56.2)
Proceeds from sale of dealerships		—		4.3

Proceeds from sale of property and equipment	Proceeds from sale of property and equipment	11.4		31.7		Proceeds from sale of property and equipment	—		1.8
Acquisitions net, including repayment of sellers’ floor plan notes payable of $51.3 and $24.3, respectively		(225.9)		(278.0)
Acquisitions net, including repayment of sellers' floor plan notes payable of $0.0 and $16.5, respectively						Acquisitions net, including repayment of sellers' floor plan notes payable of $0.0 and $16.5, respectively	—		(93.6)
Other	Other	(4.4)		1.2		Other	(3.1)		(1.8)
Net cash used in continuing investing activities		(357.0)		(331.6)
Net cash used in investing activities						Net cash used in investing activities	(105.5)		(149.8)
Financing Activities:	Financing Activities:					Financing Activities:
Proceeds from borrowings under U.S. credit agreement revolving credit line		974.0		1,087.0
Repayments under U.S. credit agreement revolving credit line		(974.0)		(1,195.0)

Issuance of 3.75% senior subordinated notes		—		500.0

Repayment of 5.50% senior subordinated notes		—		(500.0)
Net borrowings (repayments) of other long-term debt		23.8		(63.1)
Net repayments of floor plan notes payable — non-trade		(115.6)		(181.9)
Proceeds from borrowings under revolving U.S. credit agreement and mortgage facility						Proceeds from borrowings under revolving U.S. credit agreement and mortgage facility	611.7		409.0
Repayments under revolving U.S. credit agreement and mortgage facility						Repayments under revolving U.S. credit agreement and mortgage facility	(512.0)		(409.0)
Net repayments of other debt						Net repayments of other debt	(23.9)		(9.9)
Net (repayments) borrowings of floor plan notes payable — non-trade						Net (repayments) borrowings of floor plan notes payable — non-trade	(133.1)		6.5

Repurchases of common stock	Repurchases of common stock	(275.4)		(28.1)		Repurchases of common stock	(110.2)		(119.2)
Dividends	Dividends	(74.4)		(70.2)		Dividends	(42.3)		(36.4)
Payment of debt issuance costs	Payment of debt issuance costs	(0.1)		(6.1)		Payment of debt issuance costs	(2.0)		(0.1)
Other		(17.3)		(12.7)
Net cash used in continuing financing activities		(459.0)		(470.1)
Discontinued operations:
Net cash provided by discontinued operating activities		—		0.1

Net cash used in financing activities						Net cash used in financing activities	(211.8)		(159.1)

Net cash provided by discontinued operations		—		0.1

Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(9.0)		0.6		Effect of exchange rate changes on cash and cash equivalents	0.2		(2.1)
Net change in cash and cash equivalents	Net change in cash and cash equivalents	54.2		115.7		Net change in cash and cash equivalents	(5.9)		69.6
Cash and cash equivalents, beginning of period	Cash and cash equivalents, beginning of period	100.7		49.5		Cash and cash equivalents, beginning of period	106.5		100.7
Cash and cash equivalents, end of period	Cash and cash equivalents, end of period	$	154.9	$	165.2	Cash and cash equivalents, end of period	$	100.6	$	170.3
Supplemental disclosures of cash flow information:	Supplemental disclosures of cash flow information:					Supplemental disclosures of cash flow information:
Cash paid (received) for:
Cash paid for:						Cash paid for:
Interest	Interest	$	49.2	$	58.3	Interest	$	47.7	$	24.7
Income taxes	Income taxes	158.9		(14.1)		Income taxes	23.9		19.3

See Notes to Consolidated Condensed Financial Statements

Table of Contents

PENSKE AUTOMOTIVE GROUP, INC.

CONSOLIDATED CONDENSED STATEMENTS OF EQUITY


		Three Months Ended June 30, 2022																								Three Months Ended March 31, 2023
		Voting and Non-voting Common Stock			Additional Paid-in Capital				Retained Earnings		Accumulated Other Comprehensive Income (Loss)					Total Penske Automotive Group Stockholders’ Equity			Non-controlling Interest				Total Equity			Voting and Non-voting Common Stock				Additional Paid-in Capital				Retained Earnings				Accumulated Other Comprehensive Income (Loss)				Total Penske Automotive Group Stockholders' Equity				Non-controlling Interest				Total Equity
		Issued Shares	Amount												Issued Shares						Amount
		(Unaudited)																								(Unaudited)
		(Dollars in millions)																								(Dollars in millions)
Balance, March 31, 2022		76,658,405	$	—			$	—					$	4,336.9				$	(198.1)			$	4,138.8			$	25.6	$	4,164.4
Balance, December 31, 2022																									Balance, December 31, 2022	69,681,891		$	—			$	—			$	4,483.3			$	(335.3)			$	4,148.0			$	26.8			$	4,174.8

Equity compensation	Equity compensation	20,164	—		7.2				—		—					7.2			—				7.2		Equity compensation	208,994		—		7.8				—				—				7.8				—				7.8
Repurchases of common stock	Repurchases of common stock	(1,663,107)	—		(7.2)				(166.2)		—					(173.4)			—				(173.4)		Repurchases of common stock	(890,327)		—		(7.8)				(103.5)				—				(111.3)				—				(111.3)
Dividends	Dividends	—	—		—				(38.0)		—					(38.0)			—				(38.0)		Dividends	—		—		—				(42.3)				—				(42.3)				—				(42.3)

Distributions to non-controlling interest	Distributions to non-controlling interest	—	—		—				—		—					—			(2.1)				(2.1)		Distributions to non-controlling interest	—		—		—				—				—				—				(0.3)				(0.3)
Foreign currency translation	Foreign currency translation	—	—		—				—		(119.5)					(119.5)			(0.8)				(120.3)		Foreign currency translation	—		—		—				—				18.0				18.0				0.3				18.3
Other	Other	—	—		—				—		5.7					5.7			—				5.7		Other	—		—		—				—				4.8				4.8				—				4.8
Net income	Net income	—	—		—				374.0		—					374.0			1.9				375.9		Net income	—		—		—				298.3				—				298.3				1.3				299.6
Balance, June 30, 2022		75,015,462	$	—	$	—			$	4,506.7	$	(311.9)				$	4,194.8		$	24.6			$	4,219.4
Balance, March 31, 2023																									Balance, March 31, 2023	69,000,558		$	—	$	—			$	4,635.8			$	(312.5)			$	4,323.3			$	28.1			$	4,351.4


		Three Months Ended June 30, 2021																								Three Months Ended March 31, 2022
		Voting and Non-voting Common Stock			Additional Paid-in Capital				Retained Earnings		Accumulated Other Comprehensive Income (Loss)					Total Penske Automotive Group Stockholders’ Equity			Non-controlling Interest				Total Equity			Voting and Non-voting Common Stock				Additional Paid-in Capital				Retained Earnings				Accumulated Other Comprehensive Income (Loss)				Total Penske Automotive Group Stockholders' Equity				Non-controlling Interest				Total Equity
		Issued Shares	Amount												Issued Shares						Amount
		(Unaudited)																								(Unaudited)
		(Dollars in millions)																								(Dollars in millions)
Balance, March 31, 2021		80,827,657	$	—			$	318.4					$	3,299.2				$	(155.4)			$	3,462.2			$	22.5	$	3,484.7
Balance, December 31, 2021																									Balance, December 31, 2021	77,574,172		$	—			$	42.2			$	4,196.6			$	(168.8)			$	4,070.0			$	25.0			$	4,095.0
Penske Transportation Solutions Adoption of ASC 842																									Penske Transportation Solutions Adoption of ASC 842	—		—		—				(121.6)				—				(121.6)				—				(121.6)
Equity compensation	Equity compensation	(1,514)	—		6.5				—		—					6.5			—				6.5		Equity compensation	287,682		—		7.4				—				—				7.4				—				7.4
Repurchases of common stock	Repurchases of common stock	(495,307)	—		(40.9)				—		—					(40.9)			—				(40.9)		Repurchases of common stock	(1,203,449)		—		(49.6)				(69.6)				—				(119.2)				—				(119.2)
Dividends	Dividends	—	—		—				(35.6)		—					(35.6)			—				(35.6)		Dividends	—		—		—				(36.4)				—				(36.4)				—				(36.4)
Interest rate swaps		—	—		—				—		(0.4)					(0.4)			—				(0.4)

Distributions to non-controlling interest	Distributions to non-controlling interest	—	—		—				—		—					—			(0.2)				(0.2)		Distributions to non-controlling interest	—		—		—				—				—				—				(0.6)				(0.6)
Foreign currency translation	Foreign currency translation	—	—		—				—		1.6					1.6			0.2				1.8		Foreign currency translation	—		—		—				—				(28.1)				(28.1)				(0.4)				(28.5)
Other	Other	—	—		—				—		6.4					6.4			—				6.4		Other	—		—		—				—				(1.2)				(1.2)				—				(1.2)
Net income	Net income	—	—		—				338.9		—					338.9			1.5				340.4		Net income	—		—		—				367.9				—				367.9				1.6				369.5
Balance, June 30, 2021		80,330,836	$	—	$	284.0			$	3,602.5	$	(147.8)				$	3,738.7		$	24.0			$	3,762.7
Balance, March 31, 2022																									Balance, March 31, 2022	76,658,405		$	—	$	—			$	4,336.9			$	(198.1)			$	4,138.8			$	25.6			$	4,164.4

See Notes to Consolidated Condensed Financial Statements

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~~PENSKE AUTOMOTIVE GROUP, INC.~~

~~CONSOLIDATED CONDENSED STATEMENTS OF EQUITY~~

Six Months Ended June 30, 2022
Voting and Non-voting Common Stock Additional
Paid-in
Capital Retained
Earnings Accumulated
Other
Comprehensive
Income (Loss) Total
Penske
Automotive Group
Stockholders’ Equity Non-controlling
Interest Total
Equity
Issued
Shares Amount
(Unaudited)
(Dollars in millions)
Balance, December 31, 2021 77,574,172 $ — $ 42.2 $ 4,196.6 $ (168.8) $ 4,070.0 $ 25.0 $ 4,095.0
Penske Transportation Solutions Adoption of ASC 842 — — — (121.6) — (121.6) — (121.6)
Equity compensation 307,846 — 14.6 — — 14.6 — 14.6
Repurchases of common stock (2,866,556) — (56.8) (235.8) — (292.6) — (292.6)
Dividends — — — (74.4) — (74.4) — (74.4)
Distributions to non-controlling interest — — — — — — (2.7) (2.7)
Foreign currency translation — — — — (147.6) (147.6) (1.2) (148.8)
Other — — — — 4.5 4.5 — 4.5
Net income — — — 741.9 — 741.9 3.5 745.4
Balance, June 30, 2022 75,015,462 $ — $ — $ 4,506.7 $ (311.9) $ 4,194.8 $ 24.6 $ 4,219.4

Six Months Ended June 30, 2021
Voting and Non-voting Common Stock Additional
Paid-in
Capital Retained
Earnings Accumulated
Other
Comprehensive
Income (Loss) Total
Penske
Automotive Group
Stockholders’ Equity Non-controlling
Interest Total
Equity
Issued
Shares Amount
(Unaudited)
(Dollars in millions)
Balance, December 31, 2020 80,392,662 $ — $ 311.8 $ 3,151.3 $ (160.6) $ 3,302.5 $ 23.6 $ 3,326.1
Equity compensation 433,481 — 13.1 — — 13.1 — 13.1
Repurchases of common stock (495,307) — (40.9) — — (40.9) — (40.9)
Dividends — — — (70.2) — (70.2) — (70.2)
Interest rate swaps — — — — 3.5 3.5 — 3.5
Distributions to non-controlling interest — — — — — — (1.4) (1.4)
Foreign currency translation — — — — 2.2 2.2 (0.3) 1.9
Other — — — — 7.1 7.1 — 7.1
Net income — — — 521.4 — 521.4 2.1 523.5
Balance, June 30, 2021 80,330,836 $ — $ 284.0 $ 3,602.5 $ (147.8) $ 3,738.7 $ 24.0 $ 3,762.7

~~See Notes to Consolidated Condensed Financial Statements~~

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PENSKE AUTOMOTIVE GROUP, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

(In millions, except share and per share amounts)

1. Interim Financial Statements

Unless the context otherwise requires, the use of the terms ~~“PAG,” “we,” “us,”~~"PAG," "we," "us," and ~~“our”~~"our" in these Notes to the Consolidated Condensed Financial Statements refers to Penske Automotive Group, Inc. and its consolidated subsidiaries.

Business Overview and Concentrations

We are a diversified international transportation services company and one of the world's premier automotive and commercial truck retailers. We operate dealerships ~~principally~~ in the United States, the United Kingdom, Canada, Germany, Italy, and Japan, and we are one of the largest retailers of commercial trucks in North America for Freightliner. We also distribute and retail commercial vehicles, diesel and gas engines, power systems, and related parts and services principally in Australia and New Zealand. We employ over 27,000 people worldwide. Additionally, we own 28.9% of Penske Transportation Solutions, a business that employs over 43,000 people worldwide, manages ~~a fleet~~one of the largest, most comprehensive and modern trucking fleets in North America with over ~~386,000 vehicles providing~~419,000 trucks, tractors, and trailers under lease, rental, and/or maintenance contracts, and provides innovative transportation, supply chain, and technology solutions to ~~North American fleets.~~its customers.

Retail Automotive. We are one of the largest global automotive retailers as measured by the ~~$22.5~~$23.7 billion in total retail automotive dealership revenue we generated in 2021. As of June 30, 2022, we operated 332 retail automotive franchised dealerships, of which 152 are located in the U.S. and 180 are located outside of the U.S. The franchised dealerships outside the U.S. are located primarily in the U.K. We also operate 21 used vehicle dealerships in the U.S. and the U.K. which retail used vehicles under a one price, “no-haggle” methodology under the CarShop brand. Our CarShop operations consist of 8 retail dealerships in the U.S. and 13 retail dealerships and a vehicle preparation center in the U.K. We retailed and wholesaled more than 276,000 vehicles in the six months ended June 30, 2022. We are diversified geographically with ~~56%~~54% of our total retail automotive dealership revenues in the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, generated in the U.S. and Puerto Rico and ~~44%~~46% generated outside of the U.S. We offer over 35 vehicle brands with ~~70%~~72% of our retail automotive franchised dealership revenue ~~in the six months ended June 30, 2022,~~ generated from premium brands, such as Audi, BMW, Land Rover, Mercedes-Benz, and ~~Porsche.~~Porsche, in the three months ended March 31, 2023. As of March 31, 2023, we operated 333 retail automotive franchised dealerships, of which 148 are located in the U.S. and 185 are located outside of the U.S. The franchised dealerships outside of the U.S. are located primarily in the U.K. As of March 31, 2023, we also operated 20 used vehicle dealerships, with seven dealerships in the U.S. and 13 dealerships in the U.K., which retailed used vehicles under a one price, "no-haggle" methodology under the CarShop brand.

Each of our franchised dealerships offers a wide selection of new and used vehicles for sale. In addition to selling new and used vehicles, we generate higher-margin revenue at each of our dealerships through maintenance and repair services, the sale and placement of third-party finance and insurance products, third-party extended service and maintenance contracts, ~~and~~ replacement and aftermarket automotive ~~products.~~products, and at certain of our locations, collision repair services. We operate our franchised dealerships under franchise agreements with a number of automotive manufacturers and distributors that are subject to certain rights and restrictions typical of the industry. ~~In March 2022,~~Beginning in 2023, we ~~agreed to transition~~transitioned our Mercedes-Benz U.K. ~~Mercedes Benz~~ dealerships to an agency model ~~beginning in 2023. Under an agency model, our U.K. Mercedes Benz~~under which these dealerships ~~will~~ receive a fee for facilitating the sale by the manufacturer of a new vehicle but ~~will~~do not hold the vehicle in inventory. Vehicles sold under this agency model do not count as new retail units sold by us, and only the fee we receive from the manufacturer, not the price of the vehicle, is reported as new revenue (as opposed to previously recording all of the vehicle sale price as new revenue) with no corresponding cost of sale. We ~~will~~ continue to provide new vehicle customer service at our Mercedes-Benz U.K. ~~Mercedes Benz~~ dealerships, and the Mercedes-Benz U.K. agency model ~~does~~is not expected to structurally change our used vehicle sales operations or service and parts ~~operations. See Part II, Item 1A.~~ ~~Risk Factors~~ ~~in our Quarterly Report on Form 10-Q for~~operations, although the ~~quarter ended March 31, 2022, for a discussion of agency.~~

During the six months ended June 30, 2022, we acquired 10 retail automotive franchises, consisting of 6 franchises in the U.K. and 4 franchises in the U.S., and we opened 2 retail automotive franchises that we were awarded in the U.S. Additionally, the Company has signed an agreement to acquire 5 Mercedes-Benz dealerships and 3 aftersales locations in North London, United Kingdom, from Mercedes-Benz Retail Group U.K. Closingimpact of the ~~transaction~~agency model at these dealerships as well as other agency models proposed by our manufacturer partners is expected to occur during the third quarter of 2022, subject to the satisfaction or waiver of customary conditions. We also acquired a BMW/MINI collision center in the U.K. and a BMW/MINI collision center in the U.S. uncertain.

During the three months ended ~~June 30, 2022,~~March 31, 2023, we closed ~~2 CarShop satellite~~four locations in the ~~U.K. to reduce costs.~~U.S., consisting of three retail automotive franchises and one CarShop location.

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~~of the transition of customers to other existing locations. We retailed and wholesaled more than 9,100 trucks in the six months ended June 30, 2022.~~

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markets, we are also a leading distributor of diesel and gas engines and power systems, principally representing MTU (a Rolls-Royce solution), Detroit Diesel, Allison Transmission, and Bergen Engines. Penske Australia offers products across the on- and off-highway markets, including in the trucking, mining, power generation, defense, marine, rail, and construction sectors and supports full parts and aftersales service through a network of branches, field service locations, and dealers across the region.

Penske Transportation Solutions. We hold a 28.9% ownership interest in Penske Truck Leasing Co., L.P. ~~(“PTL”~~("PTL"). PTL is owned 41.1% by Penske Corporation, 28.9% by us, and 30.0% by Mitsui & Co., Ltd. ~~(“Mitsui”~~("Mitsui"). We account for our investment in PTL under the equity method, and we therefore record our share of ~~PTL’s~~PTL's earnings on our statements of income under the caption ~~“Equity~~"Equity in earnings of affiliates,”" which also includes the results of our other equity method investments. Penske Transportation Solutions ~~(“PTS”~~("PTS") is the universal brand name for ~~PTL’s~~PTL's various business lines through which it is capable of meeting ~~customers’~~customers' needs across the supply chain with a broad product offering that includes full-service truck leasing, truck rental, and contract maintenance along with logistic services, such as dedicated contract carriage, distribution center management, ~~transportation~~freight management, ~~lead logistics provider services,~~ and dry van truckload carrier services.

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”~~("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”~~GAAP") have been condensed or omitted pursuant to the SEC rules and regulations. The information presented as of ~~June 30, 2022~~March 31, 2023 and for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~ 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, ~~2021,~~2022, which are included as part of our Annual Report on Form 10-K.

Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America 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, leases, 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 which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value and also

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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 ~~and interest rate swaps~~ 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.

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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 our current market interest rates for similar types of financial instruments (Level 2). A summary of our fixed rate debt is as follows:


		June 30, 2022		December 31, 2021				March 31, 2023		December 31, 2022
		Carrying Value	Fair Value	Carrying Value	Fair Value			Carrying Value	Fair Value	Carrying Value	Fair Value
3.50% senior subordinated notes due 2025	3.50% senior subordinated notes due 2025	545.4	511.8	544.7	$	560.5	3.50% senior subordinated notes due 2025	546.5	517.5	546.2	$	508.7
3.75% senior subordinated notes due 2029	3.75% senior subordinated notes due 2029	494.7	413.5	494.3	490.7		3.75% senior subordinated notes due 2029	495.2	428.0	495.1	404.2
Mortgage facilities (1)	Mortgage facilities (1)	366.9	347.2	353.8	359.8		Mortgage facilities (1)	590.9	564.5	494.3	462.1
_____________________	_____________________						_____________________
(1)In addition to fixed rate debt, our mortgage facilities also include a revolving mortgage facility through Toyota Motor Credit Corporation that bears interest at a variable rate based on LIBOR. The fair value equals the carrying value.	(1)In addition to fixed rate debt, our mortgage facilities also include a revolving mortgage facility through Toyota Motor Credit Corporation that bears interest at a variable rate based on LIBOR. The fair value equals the carrying value.						(1)In addition to fixed rate debt, our mortgage facilities also include a revolving mortgage facility through Toyota Motor Credit Corporation that bears interest at a variable rate based on LIBOR. The fair value equals the carrying value.

Disposals

The results of operations for disposals are included within ~~continuing operations~~net income unless they 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 return at different times than when those items are reflected in our financial statements. Some of the 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 return in future years which we have already recorded in our financial statements. Deferred tax liabilities generally represent deductions taken on our tax return that have not yet been recognized as an expense in our financial statements. We establish valuation allowances for our deferred tax assets if the amount of expected future taxable income is not more likely than not to allow for the use of the deduction or credit.

~~Penske Transportation Solutions Adoption of ASC 842~~

On January 1, 2022, Penske Transportation Solutions, our equity method investment of which we own 28.9%, adopted ASU No. 2016-02, “Leases (Topic 842).” The adoption resulted in a net, after-tax cumulative effect adjustment to our retained earnings of $121.6 million.

Recent Accounting Pronouncements

Reference Rate Reform

In March 2020, the FASB issued ASU 2020-04, ~~“Reference~~"Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.”" This ASU provides optional guidance for a limited time to ease the

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potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued due to reference rate reform. Additionally, entities can elect to continue applying hedge accounting for hedging relationships affected by reference rate reform if certain conditions are met. In January 2021, the FASB issued ASU 2021-01, ~~“Reference~~"Reference Rate Reform (Topic 848): Scope.”" This ASU refines the scope of ASC 848 and clarifies some of its guidance as part of the ~~Board’s~~Board's monitoring of global reference rate reform activities. The ASU permits entities to elect certain optional expedients and exceptions when accounting for derivative contracts and certain hedging relationships affected by changes in the interest rates used for discounting cash flows, for computing variation margin settlements, and for calculating price alignment interest in connection with reference rate reform activities. In December 2022, the FASB issued ASU 2022-06, "Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848." This ASU defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. These new standards were effective upon issuance and generally can be applied to applicable contract ~~modifications through December 31, 2022.~~modifications. While ~~our credit facility in the U.S. and~~ many of our floorplan arrangements utilize LIBOR as a benchmark for calculating the applicable interest rate, some of our floorplan arrangements and our U.S. and U.K. credit ~~agreement~~agreements have already transitioned to utilizing an alternative benchmark rate. We are continuing to evaluate the impact of the transition from LIBOR to alternative reference interest rates. We cannot predict the effect of the potential changes to or elimination of LIBOR, the establishment and use of alternative rates or benchmarks, and the corresponding effects on our cost of capital but do not expect a significant impact on our consolidated financial position, results of operations, and cash flows.

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2. Revenues

Automotive and commercial truck dealerships generate the majority of our revenues. New and used vehicle revenues typically include sales to retail customers, to fleet customers, and to leasing companies providing consumer leasing. We generate finance and insurance revenues from sales of third-party extended service contracts, sales of third-party insurance policies, commissions relating to the sale of finance and lease contracts to third parties, and the sales of certain other products. Service and parts revenues include fees paid by customers for repair, maintenance and collision services, and the sale of replacement parts and other aftermarket accessories as well as warranty repairs that are reimbursed directly by various vehicle manufacturers. Revenues are recognized upon satisfaction of our performance obligations under contracts with our customers and are measured at the amount of consideration we expect to be entitled to in exchange for transferring goods or providing services. A discussion of revenue recognition by reportable segment is included below.

Retail Automotive and Retail Commercial Truck Dealership Revenue Recognition

Dealership Vehicle Sales. We record revenue for vehicle sales at a point in time when vehicles are delivered, which is when the transfer of title, risks and rewards of ownership, and control are considered passed to the customer. ~~The~~For dealerships operating under a franchise model, the amount of consideration we receive for vehicle sales is stated within the executed contract with our customer and is reduced by any ~~noncash~~non-cash consideration representing the fair value of trade-in vehicles, if applicable. Payment is typically due and collected within 30 days subsequent to transfer of control of the vehicle. For dealerships operating under an agency model, we receive a commission for each vehicle sale that we facilitate under the terms of the agency agreement with the manufacturer, which is recorded as new vehicle revenue.

Dealership Parts and Service Sales. We record revenue for vehicle service and collision work over time as work is completed and when parts are delivered to our customers. For service and parts revenues recorded over time, we utilize a method that considers total costs incurred to date and the applicable margin in relation to total expected efforts to complete our performance obligation in order to determine the appropriate amount of revenue to recognize over time. Recognition of this revenue over time reflects the amount of consideration we expect to be entitled to for the transfer of goods and services performed to date, representative of the amount for which we have a right to payment. The amount of consideration we receive for parts and service sales, including collision repair work, is based upon labor hours expended and parts utilized to perform and complete the necessary services to our customers. Payment is typically due upon delivery or within a period of time shortly thereafter. We receive payment from our customers upon transfer of control or within a period typically less than 30 days subsequent to the completion of services for the customer. We allow for customer returns of parts sales up to 30 days after the sale; however, parts returns are not material.

Dealership Finance and Insurance Sales. Subsequent to the sale of a vehicle to a customer, we sell installment sale contracts to various financial institutions on a non-recourse basis (with specified exceptions) to mitigate the risk of default. We receive a commission from the lender equal to either the difference between the interest rate charged to the customer and the interest rate set by the financing institution or a flat fee. We also receive commissions for facilitating the sale of various products to customers, including ~~guaranteed~~voluntary vehicle protection insurance, vehicle theft protection, and extended service contracts. These commissions are recorded as revenue at a point in time when the customer enters into the contract. Payment is typically due and collected within 30 days subsequent to the execution of the contract with the customer.

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In the case of finance contracts, a customer may prepay or fail to pay their contract, thereby terminating the contract. Customers may also terminate extended service contracts and other insurance products, which are fully paid at purchase, and become eligible for refunds of unused premiums. In these circumstances, a portion of the commissions we received may be charged back based on the terms of the contracts. The revenue we record relating to these transactions is net of an estimate of the amount of chargebacks we will be required to pay. Our estimate is based upon our historical experience with similar contracts, including the impact of refinance and default rates on retail finance contracts and cancellation rates on extended service contracts and other insurance products. Aggregate reserves relating to chargeback activity were ~~$36.1~~$39.7 million and ~~$33.7~~$38.4 million as of ~~June 30, 2022,~~March 31, 2023, and December 31, ~~2021,~~2022, respectively.

Commercial Vehicle Distribution and Other Revenue Recognition

Penske Australia. We record revenue from the distribution of vehicles and other products at a point in time when delivered, which is when the transfer of title, risks and rewards of ownership, and control are considered passed to the customer. We record revenue for service or repair work over time as work is completed and when parts are delivered to our customers. For service and parts revenues recorded over time, we utilize a method that considers total costs incurred to date and the applicable margin in relation to total expected efforts to complete our performance obligation in order to determine the appropriate amount of revenue to recognize over time. Recognition of this revenue over time reflects the amount of

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consideration we expect to be entitled to for the transfer of goods and services performed to date, representative of the amount for which we have a right to payment.

The amount of consideration we receive for vehicle and product sales is stated within the executed contract with our customer. The amount of consideration we receive for parts and service sales is based upon labor hours expended and parts utilized to perform and complete the necessary services to our customers. Payment is typically due upon delivery, upon invoice, or within a period of time shortly thereafter. We receive payment from our customers upon transfer of control or within a period typically less than 30 days subsequent to transfer of control or invoice.

We record revenue from the distribution of engines and other products at a point in time when delivered, which is when the transfer of title, risks and rewards of ownership, and control are considered passed to the customer. We record revenue for service or repair work over time as work is completed and when parts are delivered to our customers. For service and parts revenues recorded over time, we utilize a method that considers total costs incurred to date and the applicable margin in relation to total expected efforts to complete our performance obligation in order to determine the appropriate amount of revenue to recognize over time. Recognition of revenue over time reflects the amount of consideration we expect to be entitled to for the transfer of goods and services performed to date, representative of the amount for which we have a right to payment.

For our long-term power generation contracts, we record revenue over time as services are provided in accordance with contract milestones, which is considered an output method that requires judgment to determine our progress towards contract completion and the corresponding amount of revenue to recognize. Any revisions to estimates related to revenues or costs to complete contracts are recorded in the period in which the revisions to estimates are identified and the amounts can be reasonably estimated.

The amount of consideration we receive for engine, product, and power generation sales is stated within the executed contract with our customer. The amount of consideration we receive for service sales is based upon labor hours expended and parts utilized to perform and complete the necessary services to our customers. Payment is typically due upon delivery, upon invoice, or within a period of time shortly thereafter. We receive payment from our customers upon transfer of control or within a period typically less than 30 days subsequent to transfer of control or invoice.

Service and parts revenue represented ~~$60.5~~$61.3 million and ~~$115.6~~$55.1 million for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022, ~~and $72.0 million and $140.0 million for the three and six months ended June 30, 2021,~~ respectively, for Penske Australia.

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Retail Automotive Dealership

The following tables disaggregate our retail automotive segment revenue by product type and geographic location for the three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023 and ~~2021:~~2022:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
Retail Automotive Dealership Revenue	Retail Automotive Dealership Revenue	2022		2021		2022		2021		Retail Automotive Dealership Revenue	2023		2022
New vehicle	New vehicle	$	2,446.0	$	2,811.3	$	4,891.5	$	5,232.7	New vehicle	$	2,721.3	$	2,445.5
Used vehicle	Used vehicle	2,387.8		2,327.6		4,810.7		4,135.6		Used vehicle	2,297.1		2,422.9
Finance and insurance, net	Finance and insurance, net	221.4		212.3		438.7		381.1		Finance and insurance, net	206.8		217.3
Service and parts	Service and parts	597.0		546.2		1,183.2		1,049.4		Service and parts	683.0		586.2
Fleet and wholesale	Fleet and wholesale	345.1		300.2		702.4		605.7		Fleet and wholesale	391.6		357.3
Total retail automotive dealership revenue	Total retail automotive dealership revenue	$	5,997.3	$	6,197.6	$	12,026.5	$	11,404.5	Total retail automotive dealership revenue	$	6,299.8	$	6,029.2


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
Retail Automotive Dealership Revenue	Retail Automotive Dealership Revenue	2022		2021		2022		2021		Retail Automotive Dealership Revenue	2023		2022
U.S.	U.S.	$	3,443.9	$	3,614.5	$	6,787.5	$	6,619.3	U.S.	$	3,378.2	$	3,343.6
U.K.	U.K.	2,196.4		2,190.6		4,459.3		4,044.0		U.K.	2,472.4		2,262.9
Germany, Italy, and Japan	Germany, Italy, and Japan	357.0		392.5		779.7		741.2		Germany, Italy, and Japan	449.2		422.7
Total retail automotive dealership revenue	Total retail automotive dealership revenue	$	5,997.3	$	6,197.6	$	12,026.5	$	11,404.5	Total retail automotive dealership revenue	$	6,299.8	$	6,029.2

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Retail Commercial Truck Dealership

The following table disaggregates our retail commercial truck segment revenue by product type for the three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023 and ~~2021:~~2022:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
Retail Commercial Truck Dealership Revenue	Retail Commercial Truck Dealership Revenue	2022		2021		2022		2021		Retail Commercial Truck Dealership Revenue	2023		2022
New truck	New truck	$	447.3	$	399.2	$	919.0	$	646.7	New truck	$	600.2	$	471.7
Used truck	Used truck	78.7		59.0		179.0		110.0		Used truck	49.5		100.3
Finance and insurance, net	Finance and insurance, net	4.5		3.8		10.9		6.9		Finance and insurance, net	5.0		6.4
Service and parts	Service and parts	219.6		157.3		416.6		281.9		Service and parts	228.0		197.0
Other	Other	18.6		6.0		35.5		14.5		Other	12.9		16.9
Total retail commercial truck dealership revenue	Total retail commercial truck dealership revenue	$	768.7	$	625.3	$	1,561.0	$	1,060.0	Total retail commercial truck dealership revenue	$	895.6	$	792.3

Commercial Vehicle Distribution and Other

Our other reportable segment relates to our Penske Australia business. Commercial vehicle distribution and other revenue was ~~$140.9~~$143.6 million and ~~$294.8~~$153.9 million during the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022, ~~and $164.6 million and $296.8 million during the three and six months ended June 30, 2021,~~ respectively.

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Contract Balances

The following table summarizes our accounts receivable and unearned revenues as of ~~June 30, 2022,~~March 31, 2023, and December 31, ~~2021:~~2022:


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Accounts receivable	Accounts receivable					Accounts receivable
Contracts in transit	Contracts in transit	$	214.5	$	198.7	Contracts in transit	$	246.9	$	281.7
Vehicle receivables	Vehicle receivables	206.1		197.7		Vehicle receivables	263.6		235.1
Manufacturer receivables	Manufacturer receivables	141.6		157.7		Manufacturer receivables	193.3		178.9
Trade receivables	Trade receivables	191.7		164.5		Trade receivables	198.7		191.1

Accrued expenses	Accrued expenses					Accrued expenses
Unearned revenues	Unearned revenues	$	285.6	$	297.0	Unearned revenues	$	280.6	$	291.7

Contracts in transit represent receivables from unaffiliated finance companies relating to the sale of ~~customers’~~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, contractual life, historical collection experience, current conditions, and forecasts of future economic conditions, which is recorded within ~~“Accounts receivable”~~"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 refundable customer deposits, non-refundable customer deposits, and deferred revenues from operating leases. These amounts are presented within ~~“Accrued~~"Accrued expenses and other current ~~liabilities”~~liabilities" on our consolidated balance sheets. Of the amounts recorded as unearned revenues as of December 31, ~~2021, $158.4~~2022, $118.7 million was recognized as revenue during the ~~six~~three months ended ~~June 30, 2022.~~March 31, 2023.

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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.

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 of our lease liabilities and right-of-use assets. We also have equipment leases that primarily relate to office and computer equipment, service and shop equipment, company 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 ~~$5.3~~$5.2 billion as of ~~June 30, 2022.~~March 31, 2023. 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

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collateralized basis over a similar term for 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”~~"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,~~dealerships, we have entered into a number of third-party sublease agreements. The rent paid by our sub-tenants on such properties ~~was $4.6 million and $9.7 million~~ for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022 ~~and $6.7~~was $4.2 million and ~~$13.0~~$5.1 million, ~~for the three and six months ended June 30, 2021,~~ 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. We do not have any material leases that have not yet commenced as of ~~June 30, 2022.~~March 31, 2023.

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The following table summarizes our net operating lease cost during the three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023 and ~~2021:~~2022:

Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Lease Cost
Operating lease cost (1) $ 63.8 $ 62.8 $ 127.2 $ 124.3
Sublease income (4.6) (6.7) (9.7) (13.0)
Total lease cost $ 59.2 $ 56.1 $ 117.5 $ 111.3

~~__________~~

~~(1)Includes short-term leases and variable lease costs, which are immaterial.~~


	Three Months Ended March 31,
	2023		2022
Lease Cost
Operating lease cost (1)	$	64.4	$	63.4
Sublease income	(4.2)		(5.1)
Total lease cost	$	60.2	$	58.3
_________________
(1)Includes short-term leases and variable lease costs, which are immaterial.

The following table summarizes supplemental cash flow information related to our operating leases:


		Six Months Ended June 30, 2022		Six Months Ended June 30, 2021			Three Months Ended March 31, 2023		Three Months Ended March 31, 2022
Other Information	Other Information					Other Information
Cash paid for amounts included in the measurement of lease liabilities	Cash paid for amounts included in the measurement of lease liabilities					Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	Operating cash flows from operating leases	$	122.5	$	124.6	Operating cash flows from operating leases	$	64.0	$	62.0
Right-of-use assets obtained in exchange for operating lease liabilities		$	82.2	$	64.2
Right-of-use assets modified or obtained in exchange for operating lease liabilities, net						Right-of-use assets modified or obtained in exchange for operating lease liabilities, net	$	(23.2)	$	12.9

Supplemental balance sheet information related to the weighted average remaining lease term and discount rate of our leases is as follows:

June 30, 2022

December 31, 2021

March 31, 2023

December 31, 2022

Lease Term and Discount Rate

Weighted-average remaining lease term - operating leases

25 years

Weighted-average remaining lease term - operating leases

25 years

Weighted-average discount rate - operating leases

6.6

6.7

Weighted-average discount rate - operating leases

6.5

The following table summarizes the maturity of our lease liabilities on an undiscounted cash flow basis and a

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reconciliation to the operating lease liabilities recognized on our consolidated condensed balance sheet as of ~~June 30, 2022:~~March 31, 2023:


Maturity of Lease Liabilities	Maturity of Lease Liabilities	June 30, 2022		Maturity of Lease Liabilities	March 31, 2023
2022 (1)		$	124.1
2023		242.7
2023 (1)				2023 (1)	$	241.9
2024	2024	237.2		2024	239.0
2025	2025	233.6		2025	234.9
2026	2026	227.7		2026	227.8
2027	2027	221.5		2027	221.1
2028 and thereafter		4,033.9
2028				2028	211.5
2029 and thereafter				2029 and thereafter	3,860.7
Total future minimum lease payments	Total future minimum lease payments	$	5,320.7	Total future minimum lease payments	$	5,236.9
Less: Imputed interest	Less: Imputed interest	(2,867.0)		Less: Imputed interest	(2,844.1)
Present value of future minimum lease payments	Present value of future minimum lease payments	$	2,453.7	Present value of future minimum lease payments	$	2,392.8

Current operating lease liabilities (2)	Current operating lease liabilities (2)	$	97.7	Current operating lease liabilities (2)	$	90.3
Long-term operating lease liabilities	Long-term operating lease liabilities	2,356.0		Long-term operating lease liabilities	2,302.5
Total operating lease liabilities	Total operating lease liabilities	$	2,453.7	Total operating lease liabilities	$	2,392.8
____________________				____________________
(1)Excludes the three months ended March 31, 2023.				(1)Excludes the three months ended March 31, 2023.
(2)Included within "Accrued expenses and other current liabilities" on Consolidated Condensed Balance Sheet as of March 31, 2023.				(2)Included within "Accrued expenses and other current liabilities" on Consolidated Condensed Balance Sheet as of March 31, 2023.

~~__________~~

~~(1)Excludes the six months ended June 30, 2022.~~Table of Contents

~~(2)Included within “Accrued expenses and other current liabilities” on Consolidated Condensed Balance Sheet as of June 30, 2022.~~

4. Inventories

Inventories consisted of the following:


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Retail automotive dealership new vehicles	Retail automotive dealership new vehicles	$	1,004.5	$	869.1	Retail automotive dealership new vehicles	$	1,429.1	$	1,326.5
Retail automotive dealership used vehicles	Retail automotive dealership used vehicles	1,164.6		1,420.0		Retail automotive dealership used vehicles	1,285.5		1,279.6
Retail automotive parts, accessories, and other	Retail automotive parts, accessories, and other	132.7		126.4		Retail automotive parts, accessories, and other	147.5		145.6
Retail commercial truck dealership vehicles and parts	Retail commercial truck dealership vehicles and parts	480.3		436.7		Retail commercial truck dealership vehicles and parts	483.3		506.2
Commercial vehicle distribution vehicles, parts, and engines	Commercial vehicle distribution vehicles, parts, and engines	273.1		276.8		Commercial vehicle distribution vehicles, parts, and engines	285.0		251.2
Total inventories	Total inventories	$	3,055.2	$	3,129.0	Total inventories	$	3,630.4	$	3,509.1

We receive credits from certain vehicle manufacturers that reduce cost of sales when the vehicles are sold. Such credits amounted to ~~$10.4~~$13.3 million and ~~$21.3~~$15.2 million during the three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and $25.6 million and $37.1 million during the six months ended June 30, 2022 and 2021,~~ respectively.

5. Business Combinations

During the ~~six~~three months ended ~~June 30,~~March 31, 2023, we made no acquisitions. During the three months ended March 31, 2022, we acquired TEAM Truck Centres, a retailer of heavy- and medium-duty Freightliner and Western Star commercial trucks located in Ontario, Canada representing 4four full-service dealerships. We also acquired 10 retail automotive franchises, consisting of 6 franchises in the U.K. and 4 franchises in the U.S. During the six months ended June 30, 2021, we acquired 1 retail automotive franchise in the U.S. We also acquired Kansas City Freightliner (“KCFL”), adding 4 full-service dealerships, 4 parts and service centers, and 2 collision centers to PTG’s existing operations. Our financial statements include the results of operations of the acquired entity 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. The following table summarizes the aggregate consideration paid and the aggregate amounts of the assets acquired and liabilities assumed for the ~~six~~three months ended ~~June 30,~~March 31, 2022:

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June 30,
2022 2021
Accounts receivable $ 8.3 $ —
Inventories 71.5 37.0
Other current assets 3.2 0.1
Property and equipment 43.3 62.8
Indefinite-lived intangibles 120.9 184.7
Other noncurrent assets — —
Current liabilities (11.3) (2.8)
Noncurrent liabilities (10.0) (3.8)
Total cash used in acquisitions $ 225.9 $ 278.0


	March 31,
	2022
Accounts receivable	$	—
Inventories	21.9
Other current assets	0.1
Property and equipment	10.0
Indefinite-lived intangibles	64.6
Other noncurrent assets	—
Current liabilities	(2.9)
Noncurrent liabilities	(0.1)
Total cash used in acquisitions	$	93.6

Our following unaudited consolidated pro forma results of operations for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022, ~~and 2021~~ give effect to acquisitions consummated during 2022 ~~and 2021~~ as if they had occurred effective at the beginning of the ~~periods:~~period:

Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Revenues $ 6,917.6 $ 7,323.9 $ 14,046.9 $ 13,519.9
Income from continuing operations 374.4 347.2 745.8 539.9
Net income 374.4 347.2 745.8 540.0
Income from continuing operations per diluted common share $ 4.94 $ 4.30 $ 9.75 $ 6.69
Net income per diluted common share $ 4.94 $ 4.30 $ 9.75 $ 6.69


	Three Months Ended March 31,
	2022
Revenues	$	7,223.9

Net income attributable to Penske Automotive Group common stockholders	372.1

Net income per diluted common share	$	4.82

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6. Intangible Assets

Following is a summary of the changes in the carrying amount of goodwill and other indefinite-lived intangible assets during the ~~six~~three months ended ~~June 30, 2022:~~March 31, 2023:


		Goodwill		Other Indefinite- Lived Intangible Assets			Goodwill		Other Indefinite- Lived Intangible Assets
Balance, January 1, 2022		$	2,124.1	$	641.5
Balance, January 1, 2023						Balance, January 1, 2023	$	2,154.7	$	690.9
Additions	Additions	72.1		48.8		Additions	—		—
Disposals	Disposals	—		—		Disposals	—		—
Foreign currency translation	Foreign currency translation	(56.5)		(12.4)		Foreign currency translation	7.8		1.4
Balance, June 30, 2022		$	2,139.7	$	677.9
Balance, March 31, 2023						Balance, March 31, 2023	$	2,162.5	$	692.3

~~The additions during the six months ended June 30, 2022, were within our Retail Automotive and Retail Commercial Truck reportable segments.~~ As of ~~June 30, 2022,~~March 31, 2023, the goodwill balance within our Retail Automotive, Retail Commercial Truck, and Other reportable segments was ~~$1,598.6~~$1,626.5 million, ~~$465.2~~$462.4 million, and ~~$75.9~~$73.6 million, respectively. There is no goodwill recorded in our Non-Automotive Investments reportable segment.

7. 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.

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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~~the Secured Overnight Financing Rate ("SOFR"), LIBOR, the Sterling Overnight Index Average ("SONIA"), the Bank of England Base Rate, the Finance House Base Rate, the Euro Interbank Offered Rate, the Canadian Prime Rate, the Tokyo Interbank Offered Rate, the Australian Bank Bill Swap Rate, 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 ~~1.3%~~4.0% and 1.2% for the ~~six~~three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively. 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~~"Floor plan notes payable — ~~non-trade”~~non-trade" on our consolidated balance sheets and classify related cash flows as a financing activity on our consolidated statements of cash flows.

8. Earnings Per Share

Basic earnings per share is computed by dividing net income attributable to common stockholders by the number of weighted average shares of voting common stock outstanding, including unvested restricted stock awards which contain rights to non-forfeitable dividends. Diluted earnings per share is computed by dividing net income attributable to common stockholders by the number of weighted average shares of voting common stock outstanding, adjusted for the dilutive

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impact of unissued shares paid to directors as compensation. 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,~~March 31, 2023 and 2022 ~~and 2021~~ follows:


		Three Months Ended June 30,		Six Months Ended June 30,			Three Months Ended March 31,
		2022	2021	2022	2021		2023	2022
Weighted average number of common shares outstanding	Weighted average number of common shares outstanding	75,793,239	80,691,996	76,501,402	80,649,824	Weighted average number of common shares outstanding	69,201,232	77,224,165
Effect of non-participatory equity compensation	Effect of non-participatory equity compensation	23,880	34,442	23,880	34,442	Effect of non-participatory equity compensation	17,629	25,000
Weighted average number of common shares outstanding, including effect of dilutive securities	Weighted average number of common shares outstanding, including effect of dilutive securities	75,817,119	80,726,438	76,525,282	80,684,266	Weighted average number of common shares outstanding, including effect of dilutive securities	69,218,861	77,249,165

9. Long-Term Debt

Long-term debt consisted of the following:


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
U.S. credit agreement — revolving credit line	U.S. credit agreement — revolving credit line	$	—	$	—	U.S. credit agreement — revolving credit line	$	—	$	—
U.K. credit agreement — revolving credit line	U.K. credit agreement — revolving credit line	—		—		U.K. credit agreement — revolving credit line	—		24.2
U.K. credit agreement — overdraft line of credit		—		—

3.50% senior subordinated notes due 2025	3.50% senior subordinated notes due 2025	545.4		544.7		3.50% senior subordinated notes due 2025	546.5		546.2
3.75% senior subordinated notes due 2029	3.75% senior subordinated notes due 2029	494.7		494.3		3.75% senior subordinated notes due 2029	495.2		495.1
Australia capital loan agreement		23.3		26.6
Australia working capital loan agreement		6.9		—

Australia credit agreement						Australia credit agreement	26.2		21.6
Mortgage facilities	Mortgage facilities	366.9		353.8		Mortgage facilities	590.9		494.3
Other	Other	48.8		54.6		Other	42.5		40.7
Total long-term debt	Total long-term debt	1,486.0		1,474.0		Total long-term debt	1,701.3		1,622.1
Less: current portion	Less: current portion	(78.5)		(82.0)		Less: current portion	(81.5)		(75.2)
Net long-term debt	Net long-term debt	$	1,407.5	$	1,392.0	Net long-term debt	$	1,619.8	$	1,546.9

U.S. Credit Agreement

~~Our~~On April 20, 2023, we entered into the Tenth Amendment (the “Amendment”) to our U.S. credit agreement ~~(the “U.S. credit agreement”)~~ with Mercedes-Benz Financial Services USA LLC and Toyota Motor Credit Corporation (as amended, the “U.S. Credit Agreement”) principally to increase the facility borrowing capacity from $800 million to $1.2 billion, add an additional lender, Daimler Truck Financial Services USA LLC, and provide us with additional flexibility in regard to the operating covenants discussed below.

As amended, the U.S. Credit Agreement provides for up to ~~$800.0 million~~$1.2 billion in revolving loans for working capital, acquisitions, capital expenditures, investments and other general corporate purposes, and provides up to an additional ~~$50~~$75 million of letters of

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credit. The U.S. ~~credit agreement~~Credit Agreement now provides for a maximum of ~~$150.0~~$400 million of borrowings for foreign acquisitions and expires on September 30, ~~2024.~~2025. The interest rate on revolving loans has transitioned from LIBOR based loans to Secured Overnight Financing Rate based loans (SOFR), but the interest rate is expected to be unchanged from the previous rates of LIBOR plus 1.50%, 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 operating covenants that, among other things, restrict our ability to dispose of assets, incur additional indebtedness, repay certain 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’~~stockholders' equity, and a ratio of debt to earnings before interest, taxes, depreciation, and amortization ~~(“EBITDA”~~("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

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interests granted to the lenders under the U.S. credit agreement. As of ~~June 30, 2022,~~March 31, 2023, 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”~~"U.K. subsidiaries") ~~are~~previously were party to a £150.0 million revolving credit agreement with the National Westminster Bank plc and BMW Financial Services (GB) Limited ~~plus an additional £52.0 million of demand overdraft lines of~~(the "U.K. credit £40.0 million of which is only available on demand from March 20th to April 30th and September 20th to October 31st each year (relating to the peak sales periods in the U.K.), (collectively, the “U.K. credit agreement”agreement") to be used for working capital, acquisitions, capital expenditures, investments, and general corporate purposes. ~~The loans mature~~We amended and restated this agreement on ~~December 12, 2023.~~January 31, 2023, principally to expand the facility from £150.0 million to £200.0 million, extend the term to January 2027 (with an option to extend the term to January 2028 as described below), and provide additional flexibility with respect to the operating covenants noted below. The revolving loans bear interest between ~~defined Sterling Overnight Index Average ("SONIA")~~SONIA plus 1.10% and ~~defined~~ SONIA plus 2.10%. ~~The~~In addition, the U.K. credit agreement ~~also~~ includes a £100.0 million ~~“accordion”~~"accordion" feature which allows the U.K. subsidiaries to request up to an additional £100.0 million of facility ~~capacity.~~capacity, subject to certain limitations. The lenders may agree to provide additional capacity, and, if not, the U.K. subsidiaries may add an additional lender, if available, to the facility to provide such additional capacity. The U.K. subsidiaries may request an extension of the term of the U.K. credit agreement by an additional year by providing notice beginning in December 2023, with the effectiveness of such extension subject to lender approval. As of ~~June 30, 2022,~~March 31, 2023, we had no outstanding borrowings under the U.K. credit agreement.

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, limit 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”~~("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’~~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

3.50% Notes

September 1, 2025

February 15, August 15

$550 million

3.75% Notes

June 15, 2029

June 15, December 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~~"change of ~~control”~~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

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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. Prior to September 1, 2022, we may redeem the 3.50% Notes at a redemption price equal to 100% of the principal thereof, plus an applicable make-whole premium and any accrued and unpaid interest. In addition, we may redeem up to 40% of the 3.50% Notes before September 1, 2022, with net cash proceeds from certain equity offerings at a redemption price equal to 103.50% of the principal thereof, plus accrued and unpaid interest. On or after September 1, 2022, weWe may redeem the 3.50% Notes at the redemption prices noted in the indenture. Prior to June 15, 2024, we may redeem the 3.75% Notes at a redemption price equal to 100% of the principal thereof, plus an applicable make-whole premium, and any accrued and unpaid interest. In addition, we may redeem up to 40% of the Notes before June 15, 2024, with net cash proceeds from certain equity offerings at a redemption price equal to 103.750% of the principal thereof, plus accrued and unpaid interest. We may redeem the 3.75% Notes on or after June 15, 2024, at the redemption prices specified in the indenture.

Australia Loan Agreements

Penske Australia ispreviously was party to 2two facilities with Volkswagen Financial Services Australia Pty Limited representing a ~~five-year~~three-year AU ~~$50.0~~$35.4 million capital loan and a one-year AU $50.0 million working capital loan. Both

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facilities ~~are~~were subject to annual extensions. These agreements each ~~provide~~provided the lender with a secured interest in all assets of these businesses. The loans ~~bear~~bore interest at the Australian Bank Bill Swap Rate ("BBSW") 30-day Bill Rate plus 3.0%. ~~Irrespective~~We terminated both of ~~the term of the agreements, both agreements provide~~these facilities on November 18, 2022, and entered into a new AU $75.0 million credit agreement between Penske Australia and Daimler Truck Financial Services Australia Pty Ltd (the "Australia credit agreement"). The Australia credit agreement provides 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.~~a secured interest in all assets of these businesses, is terminable with six months' notice, and carries an interest rate of Australian BBSW 30-day Bill Rate plus 2.29%. As of ~~June 30, 2022,~~March 31, 2023, we had AU ~~$33.8~~$39.2 million ($~~23.3 million) outstanding under the capital loan agreement and had AU $10.0 million ($6.9~~26.2 million) outstanding borrowings under the ~~working capital loan~~Australia credit agreement.

Mortgage Facilities

We are party to ~~several~~ mortgages that bear interest at defined rates and require monthly principal and interest payments. We also have a revolving mortgage facility through Toyota Motor Credit Corporation with a maximum borrowing capacity of ~~$225~~$300.0 million contingent on property values and a borrowing capacity as of ~~June 30, 2022,~~March 31, 2023, of ~~$178.0~~$251.8 million. The facility bears interest at LIBOR plus 1.50% and expires in December 2025. As of ~~June 30, 2022,~~March 31, 2023, we had ~~$35.0~~$208.8 million outstanding borrowings under this mortgage facility. Our 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~~dealerships 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, 2022,~~March 31, 2023, we owed ~~$366.9~~$590.9 million of principal under our mortgage facilities.

10. 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, 2022,~~March 31, 2023, 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”~~"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.

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We believe we have made appropriate reserves relating to these locations.

Our floor plan credit agreements with ~~Mercedes Benz~~Mercedes-Benz Financial Services Australia and ~~Mercedes Benz~~Mercedes-Benz Financial Services New Zealand ~~(“MBA”~~("MBA") provide us revolving loans for the acquisition of commercial vehicles for distribution to our retail network. These facilities include a commitment to repurchase dealer vehicles in the event the ~~dealer’s~~dealer's floor plan agreement with MBA is terminated.

We have ~~$18.0~~$26.8 million of letters of credit outstanding and $19.0 million of bank guarantees as of ~~June 30, 2022,~~March 31, 2023, and have posted ~~$21.6~~$21.5 million of surety bonds in the ordinary course of business.

11. Equity

~~During the three months ended June 30, 2022, we acquired 148,440 shares~~Table of our common stock for $17.2 million, or an average of $115.97 per share, from employees in connection with a net share settlement feature of employee equity awards. In July 2022, our Board of Directors increased the authority delegated to management to repurchase our outstanding securities by $250 million. As a result, $330.6 million remained outstanding and available for repurchases as of July 26, 2022.Contents

12. 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,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively, attributable to Penske Automotive Group common stockholders follows:

Three Months Ended ~~June 30, 2022~~March 31, 2023


		Foreign Currency Translation		Interest Rate Swaps		Other		Total			Foreign Currency Translation		Other		Accumulated Other Comprehensive Income (Loss)
Balance at March 31, 2022		$	(202.5)	$	—	$	4.4	$	(198.1)
Balance at December 31, 2022										Balance at December 31, 2022	$	(328.1)	$	(7.2)	$	(335.3)
Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications	(119.5)		—		5.7		(113.8)		Other comprehensive income (loss) before reclassifications	18.0		4.8		22.8
Amounts reclassified from accumulated other comprehensive income (loss) — net of tax	Amounts reclassified from accumulated other comprehensive income (loss) — net of tax	—		—		—		—		Amounts reclassified from accumulated other comprehensive income (loss) — net of tax	—		—		—
Net current period other comprehensive income (loss)	Net current period other comprehensive income (loss)	(119.5)		—		5.7		(113.8)		Net current period other comprehensive income (loss)	18.0		4.8		22.8
Balance at June 30, 2022		$	(322.0)	$	—	$	10.1	$	(311.9)
Balance at March 31, 2023										Balance at March 31, 2023	$	(310.1)	$	(2.4)	$	(312.5)

Three Months Ended ~~June 30, 2021~~

Foreign
Currency
Translation Interest Rate
Swaps Other Total
Balance at March 31, 2021 $ (134.9) $ 0.7 $ (21.2) $ (155.4)
Other comprehensive income (loss) before reclassifications 1.6 (0.7) 6.4 7.3
Amounts reclassified from accumulated other comprehensive income (loss) — net of tax benefit of $0.1 — 0.3 — 0.3
Net current period other comprehensive income (loss) 1.6 (0.4) 6.4 7.6
Balance at June 30, 2021 $ (133.3) $ 0.3 $ (14.8) $ (147.8)

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~~Six Months Ended June 30,~~March 31, 2022

Foreign
Currency
Translation Interest Rate
Swaps Other Total
Balance at December 31, 2021 $ (174.4) $ — $ 5.6 $ (168.8)
Other comprehensive income (loss) before reclassifications (147.6) — 4.5 (143.1)
Amounts reclassified from accumulated other comprehensive income (loss) — net of tax — — — —
Net current period other comprehensive income (loss) (147.6) — 4.5 (143.1)
Balance at June 30, 2022 $ (322.0) $ — $ 10.1 $ (311.9)

~~Six Months Ended June 30, 2021~~

Foreign
Currency
Translation Interest Rate
Swaps Other Total
Balance at December 31, 2020 $ (135.5) $ (3.2) $ (21.9) $ (160.6)
Other comprehensive income (loss) before reclassifications 2.2 3.0 7.1 12.3
Amounts reclassified from accumulated other comprehensive income (loss) — net of tax benefit of $0.2 — 0.5 — 0.5
Net current period other comprehensive income (loss) 2.2 3.5 7.1 12.8
Balance at June 30, 2021 $ (133.3) $ 0.3 $ (14.8) $ (147.8)


	Foreign Currency Translation		Other		Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2021	$	(174.4)	$	5.6	$	(168.8)
Other comprehensive income (loss) before reclassifications	(28.1)		(1.2)		(29.3)
Amounts reclassified from accumulated other comprehensive income (loss) — net of tax	—		—		—
Net current period other comprehensive income (loss)	(28.1)		(1.2)		(29.3)
Balance at March 31, 2022	$	(202.5)	$	4.4	$	(198.1)

13. Segment Information

Our operations are organized by management into operating segments by line of business and geography. We have determined that we have 4four 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 (iv) Non-Automotive Investments, consisting of our equity method investments in non-automotive operations which includes our investment in PTS and other various investments. 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 6six operating segments: Eastern, Central, and Western United States, Used Vehicle Dealerships United States, International, and Used Vehicle Dealerships International. These operating segments have been aggregated into 1one 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

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through dealership facilities that market to customers in similar fashions). Revenue and segment income for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~ follows:

Three Months Ended ~~June 30,~~March 31,

Retail
Automotive Retail Commercial
Truck Other Non-Automotive
Investments Intersegment
Elimination Total
Revenues
2022 $ 5,997.3 $ 768.7 $ 140.9 $ — $ — $ 6,906.9
2021 6,197.6 $ 625.3 $ 164.6 $ — $ — $ 6,987.5
Segment income
2022 $ 301.8 $ 52.3 $ 8.8 $ 136.7 $ — $ 499.6
2021 313.0 $ 39.7 $ 8.4 $ 102.6 $ — $ 463.7

~~Six Months Ended June 30,~~


		Retail Automotive		Retail Commercial Truck		Other		Non-Automotive Investments		Intersegment Elimination		Total			Retail Automotive		Retail Commercial Truck		Other		Non-Automotive Investments		Intersegment Elimination		Total
Revenues	Revenues													Revenues
2023														2023	$	6,299.8	$	895.6	$	143.6	$	—	$	—	$	7,339.0
2022	2022	$	12,026.5	$	1,561.0	$	294.8	$	—	$	—	$	13,882.3	2022	6,029.2		$	792.3	$	153.9	$	—	$	—	$	6,975.4
2021		11,404.5		$	1,060.0	$	296.8	$	—	$	—	$	12,761.3
Segment income	Segment income													Segment income
2023														2023	$	256.7	$	57.1	$	12.1	$	81.0	$	—	$	406.9
2022	2022	$	611.7	$	110.8	$	19.3	$	255.4	$	—	$	997.2	2022	309.9		$	58.5	$	10.5	$	118.7	$	—	$	497.6
2021		473.3		$	67.2	$	14.4	$	156.4	$	—	$	711.3

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Item 2. ~~Management’s~~Management's Discussion and Analysis of Financial Condition and Results of Operations

This ~~Management’s~~Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including those discussed in Part I, Item 1A. ~~“Risk Factors”~~"Risk Factors" in our Annual Report on Form 10-K for the year ended December ~~31, 2021, Part II, Item 1A. “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March~~ 31, 2022, our other periodic reports filed with the Securities and Exchange Commission, and "Forward-Looking Statements." We have acquired and ~~initiated a number~~disposed of certain businesses during the periods presented and addressed in this ~~Management’s~~Management's Discussion and Analysis of Financial Condition and Results of Operations. Our financial statements include the results of operations of those businesses from the date acquired or divested or when they commenced operations. Our period-to-period results of operations may vary depending on the dates of acquisitions or disposals.

Overview

We are a diversified international transportation services company and one of the world's premier automotive and commercial truck retailers. We operate dealerships ~~principally~~ in the United States, the United Kingdom, Canada, Germany, Italy, and Japan, and we are one of the largest retailers of commercial trucks in North America for Freightliner. We also distribute and retail commercial vehicles, diesel and gas engines, power systems, and related parts and services principally in Australia and New Zealand. We employ over ~~26,000~~27,000 people worldwide. Additionally, we own 28.9% of Penske Transportation Solutions, a business that employs over ~~40,000~~43,000 people worldwide, manages one of the largest, most comprehensive and ~~manages a fleet of~~modern trucking fleets in North America with over ~~386,000 vehicles providing~~419,000 trucks, tractors, and trailers under lease, rental, and/or maintenance contracts, and provides innovative transportation, supply chain, and technology solutions to ~~North American fleets.~~its customers.

Business Overview

During the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, our business generated ~~$13.9~~$7.3 billion in total revenue, which is comprised of approximately ~~$12.0~~$6.3 billion from retail automotive dealerships, ~~$1.6 billion~~$895.6 million from retail commercial truck dealerships, and ~~$294.8~~$143.6 million from commercial vehicle distribution and other operations. We generated ~~$2.5~~$1.3 billion in gross profit, which is comprised of ~~$2.1~~$1.1 billion from retail automotive dealerships, ~~$277.2~~$147.0 million from retail commercial truck dealerships, and ~~$80.8~~$42.7 million from commercial vehicle distribution and other operations.

Retail Automotive. We are one of the largest global automotive retailers as measured by the ~~$22.5~~$23.7 billion in total retail automotive dealership revenue we generated in 2021. As of June 30, 2022, we operated 332 retail automotive franchised dealerships, of which 152 are located in the U.S. and 180 are located outside of the U.S. The franchised dealerships outside the U.S. are located primarily in the U.K. We also operate 21 used vehicle dealerships in the U.S. and the U.K. which retail used vehicles under a one price, “no-haggle” methodology under the CarShop brand. Our CarShop operations consist of eight retail dealerships in the U.S. and 13 retail dealerships and a vehicle preparation center in the U.K. We retailed and wholesaled more than 276,000 vehicles in the six months ended June 30, 2022. We are diversified geographically with ~~56%~~54% of our total retail automotive dealership revenues in the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, generated in the U.S. and Puerto Rico and ~~44%~~46% generated outside of the U.S. We offer over 35 vehicle brands with ~~70%~~72% of our retail automotive franchised dealership revenue ~~in the six months ended June 30, 2022,~~ generated from premium brands, such as Audi, BMW, Land Rover, Mercedes-Benz, and ~~Porsche.~~Porsche, in the three months ended March 31, 2023. As of March 31, 2023, we operated 333 retail automotive franchised dealerships, of which 148 are located in the U.S. and 185 are located outside of the U.S. The franchised dealerships outside of the U.S. are located primarily in the U.K. As of March 31, 2023, we also operated 20 used vehicle dealerships, with seven dealerships in the U.S. and 13 dealerships in the U.K., which retailed used vehicles under a one price, "no-haggle" methodology under the CarShop brand. We retailed and wholesaled, including agency units, more than 147,000 vehicles in the three months ended March 31, 2023.

Each of our franchised dealerships offers a wide selection of new and used vehicles for sale. In addition to selling new and used vehicles, we generate higher-margin revenue at each of our dealerships through maintenance and repair services, the sale and placement of third-party finance and insurance products, third-party extended service and maintenance contracts, ~~and~~ replacement and aftermarket automotive ~~products.~~products, and at certain of our locations, collision repair services. We operate our franchised dealerships under franchise agreements with a number of automotive manufacturers and distributors that are subject to certain rights and restrictions typical of the industry. ~~In March 2022,~~Beginning in 2023, we ~~agreed to transition~~transitioned our Mercedes-Benz U.K. ~~Mercedes Benz~~ dealerships to an agency ~~model beginning in 2023.~~model. Under an agency model, our Mercedes-Benz U.K. ~~Mercedes Benz~~ dealerships ~~will receive~~do not hold the vehicle in inventory and no longer record a unit sale. However, the dealership receives a fee for facilitating the sale of the new vehicle by the manufacturer ~~of a new vehicle but will not hold the vehicle~~which is recorded in ~~inventory.~~revenue. We ~~will~~ continue to provide new vehicle customer service at our Mercedes-Benz U.K. ~~Mercedes Benz~~ dealerships, and the Mercedes-Benz U.K. agency model ~~does~~is not expected to structurally change our used vehicle sales operations or service and parts ~~operations. See Part II, Item 1A.~~ ~~Risk Factors~~ inoperations, although the impact of the agency model at these dealerships as well as other agency models proposed by our ~~Quarterly Report on Form 10-Q for~~manufacturer partners is uncertain.

During the ~~quarter~~three months ended March 31, ~~2022, for a discussion~~2023, we closed four locations in the U.S., consisting of ~~agency.~~

~~During the six months ended June 30, 2022, we acquired ten~~three retail automotive franchises ~~consisting~~and one CarShop location. Retail automotive dealerships represented 85.8% of ~~six franchises~~our total revenues and 84.9% of our total gross profit in the U.K. and four franchises in the U.S., and we opened two retail automotive franchises that we were awarded in the U.S. Additionally, the Company has signed an agreement to acquire five Mercedes-Benz dealerships and three aftersales locations in North London, United Kingdom, from Mercedes-Benz Retail Group U.K. Closing of the transaction is expected to occur during the third quarter of 2022, subject to the satisfaction or waiver of customary conditions. We alsomonths ended March 31, 2023.

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acquired a BMW/MINI collision center in the U.K. and a BMW/MINI collision center in the U.S. During the three months ended June 30, 2022, we closed two CarShop satellite locations in the U.K. to reduce costs. Retail automotive dealerships represented 86.6% of our total revenues and 85.5% of our total gross profit in the six months ended June 30, 2022.

Retail Commercial Truck Dealership. We operate Premier Truck Group ~~(“PTG”~~("PTG"), a heavy- and medium-duty truck dealership group offering primarily Freightliner and Western Star trucks (both Daimler brands), with locations across nine U.S. states and Ontario, Canada. During February 2022, we acquired TEAM Truck Centres, a retailer of heavy- and medium-duty Freightliner and Western Star commercial trucks located in Ontario, Canada representing four full-service dealerships. As of ~~June 30, 2022,~~March 31, 2023, PTG operated 39 locations ~~which sell~~selling new and used trucks, parts and service, and offering collision repair ~~services, which decreased from 41 locations due to the closure of two parts and service locations as a result of the transition of customers to other existing locations.~~services. We retailed and wholesaled ~~more than 9,100~~5,287 new and used trucks in the ~~six~~three months ended ~~June 30, 2022.~~March 31, 2023. This business represented ~~11.2%~~12.2% of our total revenues and ~~11.2%~~11.7% of our total gross profit in the ~~six~~three months ended ~~June 30, 2022.~~March 31, 2023.

Penske Australia. Penske Australia is the exclusive importer and distributor of Western Star heavy-duty trucks (a Daimler ~~Truck~~ brand), MAN heavy- and medium-duty trucks and buses (a VW Group brand), and Dennis Eagle refuse collection vehicles, together with associated parts, across Australia, New Zealand, and portions of the Pacific. In most of these same markets, we are also a leading distributor of diesel and gas engines and power systems, principally representing MTU (a Rolls-Royce solution), Detroit Diesel, Allison Transmission, and Bergen Engines. Penske Australia offers products across the on- and off-highway markets, including in the trucking, mining, power generation, defense, marine, rail, and construction sectors and supports full parts and aftersales service through a network of branches, field service locations, and dealers across the region. These businesses represented ~~2.2%~~2.0% of our total revenues and ~~3.3%~~3.4% of our total gross profit in the ~~six~~three months ended ~~June 30, 2022.~~March 31, 2023.

Outlook

Retail Automotive. During the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, U.S. industry new light vehicle sales ~~decreased 18.3%~~increased 8.4%, as compared to the same period last year, to ~~6.8~~3.6 million units, and U.K. new vehicle registrations ~~decreased 11.9%~~increased 18.4%, as compared to the same period last year, to ~~802,079~~494,260 registrations. We believe the year over year ~~decrease~~increase in ~~overall~~new vehicle sales and registrations is primarily attributable to ~~a lower~~continued consumer demand for new vehicles, an increasing supply of new vehicles available for sale, ~~due to disruptions~~an increase in fleet sales in the ~~supply chain caused by~~U.S., and an increase in company car sales in the ~~COVID-19 pandemic, production disruptions caused by a shortage of microchips or other components, and the recent war in Ukraine.~~U.K. Our new vehicle ~~days’~~days' supply is 2126 as of ~~June 30, 2022,~~March 31, 2023, compared to 1725 as of December 31, ~~2021. While we expect to continue to have adequate levels of used vehicles for sale (our~~2022. Our used vehicle ~~days’~~days' supply ~~is 42~~has proved to be more resilient with a 39 days' supply as of ~~June 30, 2022,~~March 31, 2023, compared to 6053 as of December 31, ~~2021), prolonged~~2022. While we expect increasing new vehicle availability throughout 2023, continued production disruptions and supply shortages could result in ~~lower~~suppressed new and used vehicle sales volumes which ~~could~~would impact the availability and affordability of ~~used vehicles and adversely affect us. The lower supply of new vehicles contributed to higher vehicle gross profit on both~~ new and used vehicles sold, which contributed to our higher overall profitability. We expect lower inventories of new vehicles and parts disruptions to continue until the supply of certain components used to manufacture vehicles improves.vehicles. When the supply of new vehicles improves, we may experience reduced new and used vehicle gross profit together with higher sales volumes.

During the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, our premium/luxury unit sales in the U.K. increased as compared to the same period last year. In the U.K., premium/luxury unit sales, which account for over ~~93%~~91% of our ~~U.K.~~ new unit sales, ~~decreased 9.3%~~increased 6.5%, and the overall U.K. market increased 18.4% as compared to the same period last year, compared to a 21.4% decrease for the premium/luxury U.K. market and an 11.9% decrease for the overall U.K. market over the same prior year period, as many of the premium brands we represent in the U.K. market were impacted by production disruptions from the supply chain challenges.year.

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We believe U.K. new car sales were also impacted by potentially higher taxes on diesel-powered vehicles and consumer uncertainty about low emission zones as the U.K. and Western European countries consider the ramifications of diesel engines on the environment, while also providing government incentives on certain electric vehicles. Representatives of the U.K. government have proposed a ban on the sale of gasoline engines in new cars and new vans that would take effect as early as 2030 and a ban on the sale of gasoline hybrid engines in new cars and new vans as early as ~~2035. Sales~~2035 while also providing government incentives on certain electric vehicles to entice consumers to transition from internal combustion vehicles to electric vehicles. During the three months ended March 31, 2023, sales of diesel-powered vehicles decreased ~~50.6%~~7.2%, petrol-powered vehicles increased 20.6%, and ~~non-diesel~~non-diesel/petrol vehicles ~~decreased 7.4%~~increased 22.4%, ~~during the six months ended June 30, 2022,~~ as compared to the same period last year. In the U.K., new registrations of electric vehicles, including Battery Electric Vehicle (BEV), Plug-in Hybrid Electric Vehicle (PHEV), and Hybrid Electric Vehicle (HEV), represented ~~32.2%~~35.2% of the overall market for the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, compared to ~~22.5%~~34.0% for the same period last year, and represented ~~22.0%~~31.5% of our U.K. new unit sales, compared with ~~14.6%~~22.6% over the same prior year period.

Retail Commercial Truck Dealership. During the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, North American sales of Class 6-8 medium- and heavy-duty trucks, the ~~principal~~ vehicles ~~for~~sold by our PTG business, increased ~~1.0%~~23.3% from the same period last year to ~~206,480~~117,136 units. The Class 6-7 medium-duty truck market increased ~~0.5%~~19.6% from the same period last year to ~~66,459~~ 38,805

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units, and Class 8 heavy-duty trucks, the largest North American market, increased ~~1.2%~~25.2% from the same period last year to ~~140,021~~78,331 units. ~~The~~Although new truck ~~market is experiencing the same production issues noted above as the~~inventory levels are increasing, supply constraints and backlogs remain, and we expect demand for Class ~~6-8 medium- and heavy-duty truck backlog decreased only 2.6% from the same period last year to 333,796 units. We expect lower inventories of new~~8 commercial trucks ~~and parts disruptions~~ to ~~continue until the supply of certain components used to manufacture commercial trucks improves.~~remain strong, driven by replacement demand. When the supply of commercial trucks improves to historical levels, we may experience reduced new and used commercial truck gross profit per unit together with higher sales volumes. The Class 6-8 medium- and heavy-duty truck backlog is 326,636 units according to data published by ACT Research.

Commercial Vehicle Distribution and Other. ~~Penske Australia operates principally in the Australian and New Zealand heavy and medium-duty truck markets.~~ During the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, the Australian heavy-duty truck market reported sales of ~~6,916~~3,615 units, representing an increase of ~~19.4%~~20.0% from the same period last year, while the New Zealand market reported sales of ~~1,668~~1,005 units, representing an increase of ~~15.2%~~25.6% from the same period last year. New generation Western Star and MAN trucks were launched in Australia during the fourth quarter of 2022 with inventory availability anticipated to increase throughout 2023. The off-highway sector remains strong with nearly all heavy-duty engine allocation sold out for 2023, predominantly serving the data center and mining markets.

Penske Transportation Solutions. A majority of ~~PTS's~~PTS' revenue is generated by multi-year contracts for full-service leasing, contract maintenance, and logistics services. WeDuring the first quarter, PTS continued to expand its managed fleet with over 419,000 trucks, tractors, and trailers under lease, rental, and/or maintenance contracts. PTS continues to expect ~~continued resilient performance in 2022 as PTS has experienced~~ strong demand ~~and profitability~~ for commercial rental trucks and full-service leasing, ~~as well as used vehicle sales.~~partially offset by a decrease in the gains from the sale of vehicles and a decrease in consumer rental utilization, coupled with increased costs for inflation and interest.

As described in ~~“Forward-Looking~~"Forward-Looking Statements,”" there are a number of factors that could cause actual results to differ materially from our ~~expectations.~~expectations, including those discussed in Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2022, and our other periodic reports filed with the Securities and Exchange Commission.

Operating Overview

Automotive and commercial truck dealerships represent over 95% and ~~70%~~75% of our revenue and our earnings before taxes, respectively. Income from our PTS investment represents ~~over 25%~~approximately 20% of our earnings before taxes. New and used vehicle revenues typically include sales to retail customers, agency customers, fleet customers, and leasing companies providing consumer leasing. We generate finance and insurance revenues from sales of third-party extended service contracts, sales of third-party insurance policies, commissions relating to the sale of finance and lease contracts to third parties, and the sales of certain other products. Service and parts revenues include fees paid by customers for repair, maintenance and collision services, and the sale of replacement parts and other aftermarket accessories as well as warranty repairs that are reimbursed directly by various vehicle manufacturers.

Our gross profit tends to vary with the mix of revenues we derive from the sale of new vehicles, used vehicles, finance and insurance products, and service and parts transactions. Our gross profit varies across product lines with vehicle sales usually resulting in lower gross profit margins and our other revenues resulting in higher gross profit margins. Factors such as inventory and vehicle availability, customer demand, consumer confidence, unemployment, general economic conditions, seasonality, weather, credit availability, fuel prices, and ~~manufacturers’~~manufacturers' advertising and incentives also impact the mix of our revenues and therefore, influence our gross profit margin.

The results of our commercial vehicle distribution and other business in Australia and New Zealand are principally driven by the number and types of products and vehicles ordered by our customers.

Aggregate revenue and gross profit ~~decreased $80.6~~increased $363.6 million, or ~~1.2%~~5.2%, and increased ~~$54.3~~$20.6 million, or ~~4.6%~~1.7%, respectively, during the three months ended ~~June 30, 2022, and increased $1,121.0 million, or 8.8%, and increased $372.8 million, or 17.8%, respectively, during the six months ended June 30, 2022,~~March 31, 2023, compared to the same ~~periods~~period in ~~2021.~~

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2022.

As exchange rates fluctuate, our revenue and results of operations as reported in U.S. Dollars fluctuate. For example, if the British Pound were to weaken against the U.S. Dollar, our U.K. results of operations would translate into less U.S. Dollar reported results. Foreign currency average rate fluctuations decreased revenue and gross profit by ~~$245.2~~$294.2 million and ~~$33.3~~$43.9 million, respectively, for the three months ended ~~June 30, 2022, and decreased revenue and gross profit by $279.8 million and $36.6 million, respectively, for the six months ended June 30, 2022.~~March 31, 2023. Foreign currency average rate fluctuations decreased earnings per share ~~from continuing operations~~ by approximately $0.11 per share for the three months ended ~~June 30, 2022, and decreased earnings per share from continuing operations by approximately $0.16 per share for the six months ended June 30, 2022.~~March 31, 2023. Excluding the impact of foreign currency average rate fluctuations, revenue and gross profit increased ~~2.4%~~9.4% and increased ~~7.4%~~5.2%, respectively, for the three months ended ~~June 30, 2022, and increased 11.0% and increased 19.5%, respectively, for the six months ended June 30, 2022.~~March 31, 2023.

Our selling expenses consist of advertising and compensation for sales personnel, including commissions and related bonuses. General and administrative expenses include compensation for administration, finance, legal and general management personnel, rent, insurance, utilities, and other expenses. As the majority of our selling expenses are variable

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and a significant portion of our general and administrative expenses are subject to our control, we believe our expenses can be adjusted over time to reflect economic trends.

Equity in earnings of affiliates principally represents our share of the earnings from PTS, along with our investments in joint ventures and other non-consolidated investments.

Floor plan interest expense relates to financing incurred in connection with the acquisition of new and used vehicle inventories that are secured by those vehicles. Other interest expense consists of interest charges on all of our interest-bearing debt, other than interest relating to floor plan financing, and includes interest relating to our retail commercial truck dealership and commercial vehicle distribution and other operations. The cost of our variable rate indebtedness is based on the prime rate, ~~defined LIBOR,~~the London Interbank Offered Rate ("LIBOR"), the Secured Overnight Financing Rate ("SOFR"), the Sterling Overnight Index Average ("SONIA"), the Bank of England Base Rate, the Finance House Base Rate, the Euro Interbank Offered Rate, the Canadian Prime Rate, the Tokyo Interbank Offered Rate, the Australian Bank Bill Swap Rate, orand the New Zealand Bank Bill Benchmark Rate.

Regulatory authorities in the U.S. have announced their intention to stop compelling banks to submit rates for the calculation of LIBOR, ending after June 30, 2023, for the LIBOR tenors that are relevant to our business. ~~Our senior secured revolving credit facility in the U.S. and many~~Many of our floorplan arrangements utilize LIBOR as a benchmark for calculating the applicable interest rate, although some of our floorplan arrangements and our U.S. and U.K. credit ~~agreement~~agreements have already transitioned to utilizing an alternative benchmark rate. ~~Our U.K. credit agreement transitioned from LIBOR to SONIA as of January 1, 2022.~~ We cannot predict the effect of the potential changes to or elimination of LIBOR or the establishment and use of alternative rates or benchmarks and the corresponding effects on our cost of capital.

The future success of our business is dependent upon, among other things, ~~general economic~~macro-economic, geo-political, and industry conditions and events, including their impact on new and used vehicle sales, the availability of consumer credit, changes in consumer demand, consumer confidence levels, fuel prices, personal discretionary spending levels, interest rates, and unemployment rates; our ability to obtain vehicles and parts from our manufacturers, especially in light of supply chain disruptions due to natural disasters, the shortage of microchips or other components, the COVID-19 pandemic, the war in Ukraine, challenges in sourcing labor, or other disruptions; changes in the retail model either from direct sales by manufacturers, a transition to an agency model of sales, sales by online competitors, or from the expansion of electric vehicles; the continued effect of COVID-19 on the global ~~economy; the distribution rate and acceptance of vaccines for COVID-19;~~economy, including our ability to react effectively to changing business conditions in light of the COVID-19 pandemic; the rate of ~~inflation;~~inflation, including its impact on vehicle affordability; changes in interest rates and foreign currency exchange rates; our ability to consummate and integrate acquisitions; ~~the level of vehicle sales~~with respect to PTS, changes in the ~~markets where we operate; our ability to obtain~~financial health of its customers, labor strikes, or work stoppages by its employees, a reduction in PTS' asset utilization rates, continued availability from truck manufacturers and suppliers of vehicles and parts ~~from our manufacturers, especially in light of the COVID-19 pandemic and the war in Ukraine, including global shortages in microchip availability or other vehicle components;~~for its fleet, changes in ~~the retail model either from direct~~values of used trucks which affects PTS' profitability on truck sales ~~by manufacturers, transition to an agency model of sales, sales by online competitors, or from the expansion of electric vehicles;~~and regulatory risks and related compliance costs; our ability to realize returns on our significant capital investment in new and upgraded dealership facilities; our ability to navigate a rapidly changing automotive and truck landscape; our ability to respond to new or enhanced regulations in both our domestic and international markets relating to automotive dealerships and vehicles sales, including those related to emissions standards, as well as changes in consumer sentiment relating to commercial truck sales that may hinder our or PTS' ability to maintain, acquire, sell, or operate trucks; the success of our distribution of commercial vehicles, engines, and power systems; natural disasters; recall initiatives or other disruptions that interrupt the supply of vehicles or parts to us; the outcome of legal and ~~the return realized from our investments in various joint ventures~~administrative matters, and other ~~non-consolidated investments.~~factors over which management has limited control. See ~~“Forward-Looking Statements” below.~~Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2022, and our other periodic reports filed with the Securities and Exchange Commission.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires the application of accounting policies that often involve making estimates and employing judgments. Such judgments influence the assets, liabilities, revenues, and expenses recognized in our financial statements. Management, on an ongoing basis, reviews these estimates and assumptions. Management may determine that modifications in assumptions and estimates are required, which may result in a material change in our results of operations or financial position.

The accounting policies and estimates that we believe to be most dependent upon the use of estimates and assumptions are revenue recognition, goodwill and other indefinite-lived intangible assets, investments, ~~self-insurance reserves,~~income taxes, and lease ~~recognition, and income taxes.~~recognition. Refer to ~~“Management’s~~"Management's Discussion and Analysis of Financial Condition and Results of

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~~Operations”~~ Operations" in our ~~2021~~2022 Annual Report on Form 10-K for additional detail and discussion of these critical accounting policies and estimates.

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There have been no material changes in critical accounting policies and estimates as described in our most recent Annual Report.

Refer to Part I, Item 1, Note 1 and Note 3 of the Notes to our Consolidated Condensed Financial Statements for disclosures regarding estimates and judgments related to lease recognition. Refer to Part I, Item 1, Note 2 of the Notes to our Consolidated Condensed Financial Statements for disclosures regarding estimates and judgments related to revenue recognition. Refer to ~~“Income Taxes”~~"Income Taxes" within Part I, Item 1, Note 1 of the Notes to our Consolidated Condensed Financial Statements for disclosures regarding estimates and judgments related to income taxes.

Results of Operations

The following tables present comparative financial data relating to our operating performance in the aggregate and on a ~~“same-store”~~"same-store" basis. Dealership results are included in same-store comparisons when we have consolidated the acquired entity during the entirety of both periods being compared. As an example, if a dealership were acquired on January 15, ~~2020,~~2021, the results of the acquired entity would be included in annual same-store comparisons beginning with the year ended December 31, ~~2022,~~2023, and in quarterly same-store comparisons beginning with the quarter ended June 30, ~~2021.~~2022.

Beginning in 2023, we transitioned our Mercedes-Benz U.K. dealerships to an agency model under which these dealerships receive a fee for facilitating the sale by the manufacturer of a new vehicle but do not hold the vehicle in inventory. Vehicles sold under this agency model do not count as new retail units sold by us, and only the fee we receive from the manufacturer, not the price of the vehicle, is reported as new revenue (as opposed to previously recording all of the vehicle sale price as new revenue) with no corresponding cost of sale. We have therefore presented below units sold under this model as "Agency units" beginning in 2023. Moreover, our retail automotive revenue per unit retailed and related gross profit per unit retailed for new vehicles excludes agency unit sales and associated revenue.

Three Months Ended ~~June 30, 2022,~~March 31, 2023, Compared to Three Months Ended ~~June 30, 2021~~March 31, 2022

Retail Automotive Dealership New Vehicle Data

(In millions, except unit and per unit amounts)


								2022 vs. 2021												2023 vs. 2022
New Vehicle Data	New Vehicle Data	2022			2021			Change			% Change		New Vehicle Data	2023			2022			Change			% Change
New retail unit sales	New retail unit sales	45,515			57,789			(12,274)			(21.2)	%	New retail unit sales	47,662			45,528			2,134			4.7	%
Same-store new retail unit sales	Same-store new retail unit sales	42,980			57,715			(14,735)			(25.5)	%	Same-store new retail unit sales	46,200			45,246			954			2.1	%
New retail sales revenue		$	2,446.0		$	2,811.3		$	(365.3)		(13.0)	%
Same-store new retail sales revenue		$	2,307.0		$	2,806.3		$	(499.3)		(17.8)	%
New retail sales revenue per unit		$	53,740		$	48,648		$	5,092		10.5	%
Same-store new retail sales revenue per unit		$	53,675		$	48,623		$	5,052		10.4	%
New agency unit sales													New agency unit sales	6,933			—			6,933			nm
Same-store new agency unit sales													Same-store new agency unit sales	5,874			—			5,874			nm
New sales revenue													New sales revenue	$	2,721.3		$	2,445.5		$	275.8		11.3	%
Same-store new sales revenue													Same-store new sales revenue	$	2,646.8		$	2,434.7		$	212.1		8.7	%
New retail sales revenue per unit (excluding agency)													New retail sales revenue per unit (excluding agency)	$	56,822		$	53,714		$	3,108		5.8	%
Same-store new retail sales revenue per unit (excluding agency)													Same-store new retail sales revenue per unit (excluding agency)	$	57,058		$	53,810		$	3,248		6.0	%
Gross profit — new	Gross profit — new	$	312.3		$	276.6		$	35.7		12.9	%	Gross profit — new	$	313.8		$	311.4		$	2.4		0.8	%
Same-store gross profit — new	Same-store gross profit — new	$	294.5		$	275.8		$	18.7		6.8	%	Same-store gross profit — new	$	305.4		$	310.6		$	(5.2)		(1.7)	%
Average gross profit per new vehicle retailed		$	6,860		$	4,786		$	2,074		43.3	%
Same-store average gross profit per new vehicle retailed		$	6,851		$	4,779		$	2,072		43.4	%
Average gross profit per new vehicle (excluding agency)													Average gross profit per new vehicle (excluding agency)	$	6,315		$	6,840		$	(525)		(7.7)	%
Same-store average gross profit per new vehicle (excluding agency)													Same-store average gross profit per new vehicle (excluding agency)	$	6,383		$	6,866		$	(483)		(7.0)	%
Gross margin % — new	Gross margin % — new	12.8		%	9.8		%	3.0		%	30.6	%	Gross margin % — new	11.5		%	12.7		%	(1.2)		%	(9.4)	%
Same-store gross margin % — new	Same-store gross margin % — new	12.8		%	9.8		%	3.0		%	30.6	%	Same-store gross margin % — new	11.5		%	12.8		%	(1.3)		%	(10.2)	%

Retail Units (excluding agency)

Retail unit sales of new vehicles ~~decreased~~increased from ~~2021~~2022 to ~~2022~~2023 due to a ~~14,735~~1,180 unit increase from net dealership acquisitions, coupled with a 954 unit, or ~~25.5%~~2.1%, ~~decrease~~increase in same-store new retail unit ~~sales, partially offset by a 2,461 unit increase from net dealership acquisitions.~~sales. Same-store retail units decreased ~~30.1%~~3.2% in the U.S. and ~~decreased 15.4%~~increased 12.1% internationally. Overall, new retail unit sales decreased ~~27.0%~~1.7% in the U.S. and ~~decreased 8.3%~~increased 16.6% internationally. We believe the increase in same-store retail unit sales in the U.K. is primarily due to continued consumer demand for new vehicles and increasing new vehicle availability, partially offset by the transition to the agency model for certain brands which are not included as retail sales. We believe the decrease in same-store retail unit sales in the U.S. is primarily due to ~~a lower supply~~the lack of ~~new vehicles available for sale, which has been caused by supply chain issues discussed above.~~inventory availability of certain non-premium brands.

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Revenues

New vehicle ~~retail~~ sales revenue ~~decreased~~increased from ~~2021~~2022 to ~~2022~~2023 due to a ~~$499.3~~$212.1 million, or ~~17.8%~~8.7%, ~~decrease~~increase in same-store revenues, ~~partially offset by~~coupled with a ~~$134.0~~$63.7 million increase from net dealership ~~acquisitions.~~acquisitions and partially offset by the transition to agency for certain brands in the U.K causing us to no longer record the vehicle sales price as revenue. Excluding ~~$92.2~~$89.1 million of unfavorable foreign currency fluctuations, same-store new ~~retail~~ revenue ~~decreased 14.5%~~increased 12.4%. ~~The decrease in same-store~~Same-store revenue is(excluding agency) increased due to ~~the decrease in same-store new retail unit sales, which decreased revenue by $716.4 million, partially offset by~~ a ~~$5,052~~$3,248 per unit increase in same-store comparative average retail selling price ~~(including~~(notwithstanding a ~~$2,145~~$1,996 per retail unit decrease attributable to unfavorable foreign currency fluctuations), which increased revenue by ~~$217.1~~$147.0 million, coupled with the increase in same-store new retail unit sales, which increased revenue by $54.4 million. We believe the increase in same-store comparative average retail selling price (excluding agency) is primarily due to ~~increased customer demand and a lower~~the prolonged low supply of certain non-premium new vehicles brands available for sale ~~which has been caused~~and the cost increases initiated by ~~supply chain issues discussed above.~~

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the manufacturers.

Gross Profit

Retail gross profit from new vehicle sales increased from ~~2021~~2022 to ~~2022~~2023 due to ~~an $18.7 million, or 6.8%, increase in same-store gross profit, coupled with~~ a ~~$17.0~~$7.6 million increase from net dealership ~~acquisitions.~~acquisitions, partially offset by a $5.2 million, or 1.7%, decrease in same-store gross profit and partially offset by the transition to agency for certain brands in the U.K. Excluding ~~$11.0~~$10.4 million of unfavorable foreign currency fluctuations, same-store gross profit increased ~~10.8%~~1.7%. ~~The increase in same-store~~Same-store gross profit is(excluding agency) decreased due to a ~~$2,072~~$483 per unit ~~increase~~decrease in same-store comparative average gross profit (including a ~~$257~~$287 per retail unit decrease attributable to unfavorable foreign currency fluctuations), which ~~increased~~decreased gross profit by ~~$89.1~~$21.9 million, partially offset by the ~~decrease~~increase in same-store new retail ~~unit~~ sales, which ~~decreased~~increased retail gross profit by ~~$70.4~~$6.1 million. We believe the ~~increase~~decrease in same-store comparative average retail gross profit per unit (excluding agency) is ~~attributed~~primarily due to ~~increased customer demand and a lower~~an increasing supply of certain premium new ~~vehicles~~vehicle brands available for ~~sale, which has been caused by supply chain issues discussed above.~~sale.

Retail Automotive Dealership Used Vehicle Data

(In millions, except unit and per unit amounts)


								2022 vs. 2021												2023 vs. 2022
Used Vehicle Data	Used Vehicle Data	2022			2021			Change			% Change		Used Vehicle Data	2023			2022			Change			% Change
Used retail unit sales	Used retail unit sales	69,994			74,708			(4,714)			(6.3)	%	Used retail unit sales	67,836			68,231			(395)			(0.6)	%
Same-store used retail unit sales	Same-store used retail unit sales	66,479			74,267			(7,788)			(10.5)	%	Same-store used retail unit sales	65,545			67,029			(1,484)			(2.2)	%
Used retail sales revenue	Used retail sales revenue	$	2,387.8		$	2,327.6		$	60.2		2.6	%	Used retail sales revenue	$	2,297.1		$	2,422.9		$	(125.8)		(5.2)	%
Same-store used retail sales revenue	Same-store used retail sales revenue	$	2,278.0		$	2,316.1		$	(38.1)		(1.6)	%	Same-store used retail sales revenue	$	2,216.3		$	2,387.8		$	(171.5)		(7.2)	%
Used retail sales revenue per unit	Used retail sales revenue per unit	$	34,114		$	31,156		$	2,958		9.5	%	Used retail sales revenue per unit	$	33,863		$	35,510		$	(1,647)		(4.6)	%
Same-store used retail sales revenue per unit	Same-store used retail sales revenue per unit	$	34,267		$	31,186		$	3,081		9.9	%	Same-store used retail sales revenue per unit	$	33,813		$	35,624		$	(1,811)		(5.1)	%
Gross profit — used	Gross profit — used	$	155.2		$	194.1		$	(38.9)		(20.0)	%	Gross profit — used	$	122.6		$	155.8		$	(33.2)		(21.3)	%
Same-store gross profit — used	Same-store gross profit — used	$	148.6		$	193.2		$	(44.6)		(23.1)	%	Same-store gross profit — used	$	119.3		$	154.4		$	(35.1)		(22.7)	%
Average gross profit per used vehicle retailed	Average gross profit per used vehicle retailed	$	2,218		$	2,598		$	(380)		(14.6)	%	Average gross profit per used vehicle retailed	$	1,808		$	2,284		$	(476)		(20.8)	%
Same-store average gross profit per used vehicle retailed	Same-store average gross profit per used vehicle retailed	$	2,235		$	2,602		$	(367)		(14.1)	%	Same-store average gross profit per used vehicle retailed	$	1,821		$	2,303		$	(482)		(20.9)	%
Gross margin % — used	Gross margin % — used	6.5		%	8.3		%	(1.8)		%	(21.7)	%	Gross margin % — used	5.3		%	6.4		%	(1.1)		%	(17.2)	%
Same-store gross margin % — used	Same-store gross margin % — used	6.5		%	8.3		%	(1.8)		%	(21.7)	%	Same-store gross margin % — used	5.4		%	6.5		%	(1.1)		%	(16.9)	%

Units

Retail unit sales of used vehicles decreased from ~~2021~~2022 to ~~2022~~2023 due to a ~~7,788~~1,484 unit, or ~~10.5%~~2.2%, decrease in same-store used retail unit sales, partially offset by a ~~3,074~~1,089 unit increase from net dealership acquisitions. Our same-store units decreased ~~14.7%~~6.5% in the U.S. and ~~decreased 6.7%~~increased 1.2% internationally. Same-store retail units for our U.S. and U.K. CarShop used vehicle dealerships decreased ~~32.4%~~7.1% and increased ~~10.6%~~3.8%, respectively. Overall, our used units decreased ~~11.2%~~6.3% in the U.S. and ~~decreased 1.9%~~increased 3.9% internationally. We believe the increase in same-store unit sales in the U.K. is primarily due to improved vehicle availability. We believe the decrease in same-store unit sales in the U.S. is primarily ~~due to~~being impacted by higher ~~used unit prices attributable to lower overall vehicle inventory availability for sale,~~interest rates and inflation impacting the affordability of ~~used vehicles for customers, which has been caused by supply chain issues discussed above.~~vehicles.

Table of Contents

Revenues

Used vehicle retail sales revenue ~~increased~~decreased from ~~2021~~2022 to ~~2022~~2023 due to a ~~$98.3~~$171.5 million, or 7.2%, decrease in same-store revenues, partially offset by a $45.7 million increase from net dealership ~~acquisitions, partially offset by a $38.1 million, or 1.6%, decrease in same-store revenues.~~acquisitions. Excluding ~~$139.3~~$125.8 million of unfavorable foreign currency fluctuations, same-store used retail revenue ~~increased 4.4%~~decreased 1.9%. The decrease in same-store revenue is due to a $1,811 per unit decrease in same-store comparative average selling price (including a $1,919 per unit decrease attributable to unfavorable foreign currency fluctuations), which decreased revenue by $118.7 million, coupled with the decrease in same-store used retail unit sales, which decreased revenue by $242.9 million, partially offset by a $3,081 per unit increase in same-store comparative average selling price (including a $2,095 per unit decrease attributable to unfavorable foreign currency fluctuations), which increased revenue by $204.8$52.8 million. The average sales price per unit for our CarShop used vehicle dealerships ~~increased 4.3%~~decreased 3.8% to ~~$19,331.~~$20,879. We believe the ~~increase~~ decrease in same-store comparative average selling price is primarily due to ~~consumers looking to acquire~~the low overall vehicle inventory availability in the prior period which caused historically high used ~~vehicles to compensate for the lower supply of new vehicles available for sale, which has been caused by~~ ~~supply chain issues discussed above~~.unit prices.

Gross Profit

Retail gross profit from used vehicle sales decreased from ~~2021~~2022 to ~~2022~~2023 due to a ~~$44.6~~$35.1 million, or ~~23.1%~~22.7%, decrease in same-store gross profit, partially offset by a ~~$5.7~~$1.9 million increase from net dealership acquisitions. Excluding ~~$7.8~~$5.8 million of unfavorable foreign currency fluctuations, same-store gross profit decreased 19.0%. The decrease in same-store gross profit is due to a ~~$367~~$482 per unit decrease in same-store comparative average gross profit (including a ~~$118~~$87 per unit decrease

~~Table of Contents~~

attributable to unfavorable foreign currency fluctuations), which decreased gross profit by ~~$24.4~~$31.6 million, coupled with the decrease in same-store used retail unit sales, which decreased gross profit by ~~$20.2~~$3.5 million. The average gross profit per unit for our CarShop used vehicle dealerships decreased ~~43.2%~~17.0% to ~~$770.~~$631. We believe the decrease in same-store comparative average gross profit per unit is primarily due to the increased cost ~~of acquiring~~to acquire used vehicles for retail sales as compared to the prior year and the resulting ~~from~~lack of affordability for consumers due to historically higher used unit prices attributable to the ~~lower supply of new vehicles available~~low overall vehicle inventory availability for sale ~~which decreased our gross margin.~~in prior year.

Retail Automotive Dealership Finance and Insurance Data

(In millions, except unit and per unit amounts)


						2022 vs. 2021									2023 vs. 2022
Finance and Insurance Data	Finance and Insurance Data	2022		2021		Change		% Change		Finance and Insurance Data	2023		2022		Change		% Change
Total retail unit sales	Total retail unit sales	115,509		132,497		(16,988)		(12.8)	%	Total retail unit sales	115,498		113,759		1,739		1.5	%
Total same-store retail unit sales	Total same-store retail unit sales	109,459		131,982		(22,523)		(17.1)	%	Total same-store retail unit sales	111,745		112,275		(530)		(0.5)	%
Total agency unit sales										Total agency unit sales	6,933		—		6,933		nm
Total same-store agency unit sales										Total same-store agency unit sales	5,874		—		5,874		nm
Finance and insurance revenue	Finance and insurance revenue	$	221.4	$	212.3	$	9.1	4.3	%	Finance and insurance revenue	$	206.8	$	217.3	$	(10.5)	(4.8)	%
Same-store finance and insurance revenue	Same-store finance and insurance revenue	$	213.5	$	211.7	$	1.8	0.9	%	Same-store finance and insurance revenue	$	200.4	$	215.8	$	(15.4)	(7.1)	%
Finance and insurance revenue per unit		$	1,917	$	1,603	$	314	19.6	%
Same-store finance and insurance revenue per unit		$	1,951	$	1,604	$	347	21.6	%
Finance and insurance revenue per unit (excluding agency)										Finance and insurance revenue per unit (excluding agency)	$	1,773	$	1,910	$	(137)	(7.2)	%
Same-store finance and insurance revenue per unit (excluding agency)										Same-store finance and insurance revenue per unit (excluding agency)	$	1,776	$	1,922	$	(146)	(7.6)	%

Finance and insurance revenue ~~increased~~decreased from ~~2021~~2022 to ~~2022~~2023 due to a ~~$7.3~~$15.4 million, or 7.1%, decrease in same-store revenue and coupled with the transition to agency for certain brands in the U.K., partially offset by a $4.9 million increase from net dealership ~~acquisitions, coupled with a $1.8 million, or 0.9%, increase in same-store revenues.~~acquisitions. Excluding ~~$9.2~~$8.0 million of unfavorable foreign currency fluctuations, same-store finance and insurance revenue ~~increased 5.2%~~decreased 3.4%. ~~The increase in same-store~~Same-store revenue is(excluding agency) decreased due to a ~~$347~~$146 per unit ~~increase~~decrease in same-store comparative average finance and insurance retail revenue (including an ~~$84~~$89 per retail unit decrease attributable to unfavorable foreign currency fluctuations), which ~~increased~~decreased revenue by ~~$38.0~~$16.3 million, ~~partially offset by~~coupled with the decrease in same-store retail unit sales, which decreased revenue by ~~$36.2~~$1.0 million. Finance and insurance revenue per unit ~~increased 30.2%~~(excluding agency) decreased 3.1% in the U.S. and ~~increased 8.0%~~decreased 9.1% in the U.K. We believe the ~~increase~~decrease in same-store finance and insurance revenue per unit (excluding agency) is primarily due to ~~our efforts to increase finance and insurance penetration, which include implementing interactive digital~~rising interest rates impacting customer ~~sales platforms, additional training, and targeting underperforming locations, coupled with the increase in~~affordability.

~~average selling price per unit~~Table of ~~new and used vehicles. Changes in the sales mix from lower leasing and a higher amount of purchases have also driven higher product penetration rates.~~Contents

Retail Automotive Dealership Service and Parts Data

(In millions)


								2022 vs. 2021												2023 vs. 2022
Service and Parts Data	Service and Parts Data	2022			2021			Change			% Change		Service and Parts Data	2023			2022			Change			% Change
Service and parts revenue	Service and parts revenue	$	597.0		$	546.2		$	50.8		9.3	%	Service and parts revenue	$	683.0		$	586.2		$	96.8		16.5	%
Same-store service and parts revenue	Same-store service and parts revenue	$	569.0		$	544.8		$	24.2		4.4	%	Same-store service and parts revenue	$	642.9		$	582.6		$	60.3		10.4	%
Gross profit — service and parts	Gross profit — service and parts	$	359.2		$	337.0		$	22.2		6.6	%	Gross profit — service and parts	$	398.9		$	350.5		$	48.4		13.8	%
Same-store service and parts gross profit	Same-store service and parts gross profit	$	343.6		$	335.9		$	7.7		2.3	%	Same-store service and parts gross profit	$	379.1		$	348.2		$	30.9		8.9	%
Gross margin % — service and parts	Gross margin % — service and parts	60.2		%	61.7		%	(1.5)		%	(2.4)	%	Gross margin % — service and parts	58.4		%	59.8		%	(1.4)		%	(2.3)	%
Same-store service and parts gross margin %	Same-store service and parts gross margin %	60.4		%	61.7		%	(1.3)		%	(2.1)	%	Same-store service and parts gross margin %	59.0		%	59.8		%	(0.8)		%	(1.3)	%

Revenues

Service and parts revenue increased from ~~2021~~2022 to ~~2022,~~2023, with an increase of ~~12.7%~~12.4% in the U.S. and an increase of ~~2.6%~~24.2% internationally. The increase in service and parts revenue is due to a ~~$26.6~~$60.3 million, or 10.4%, increase in same-store revenues, coupled with a $36.5 million increase from net dealership ~~acquisitions, coupled with a $24.2 million, or 4.4%, increase in same-store revenues.~~acquisitions. Excluding ~~$20.6~~$20.4 million of unfavorable foreign currency fluctuations, same-store revenue increased ~~8.2%~~13.9%. The increase in same-store revenue is due to a ~~$35.1~~$36.8 million, or ~~9.0%~~8.6%, increase in customer pay revenue, a $16.6 million, or 14.4%, increase in warranty revenue, and a ~~$3.6~~$6.9 million, or ~~11.2%~~18.6%, increase in vehicle preparation and body shop ~~revenue, partially offset by a $14.5 million, or 11.6%, decrease in warranty~~ revenue. We believe the increase in same-store ~~service and parts~~ revenue is ~~related~~primarily due to vehicles remaining on the road longer due to limited supply and affordability considerations, coupled with increases in ~~vehicle miles traveled compared~~customer pay service work, as well as increases in effective labor rates and the retail cost of parts due to ~~the same period last year, coupled with the prolonged reliance on older vehicles resulting from the limited supply of new vehicles, which generates additional service and parts revenues.~~

~~Table of Contents~~

inflation.

Gross Profit

Service and parts gross profit increased from ~~2021~~2022 to ~~2022~~2023 due to a ~~$14.5~~$30.9 million, or 8.9%, increase in same-store gross profit, coupled with a $17.5 million increase from net dealership ~~acquisitions, coupled with a $7.7 million, or 2.3%, increase in same-store gross profit.~~acquisitions. Excluding ~~$12.2~~$11.8 million of unfavorable foreign currency fluctuations, same-store gross profit increased ~~5.9%~~12.3%. The increase in same-store gross profit is due to the increase in same-store revenues, which increased gross profit by ~~$14.7~~$35.6 million, partially offset by a ~~1.3%~~0.8% decrease in same-store gross margin, which decreased gross profit by ~~$7.0~~$4.7 million. The increase in same-store gross profit is due to a ~~$15.3~~$15.0 million, or ~~8.1%~~7.2%, increase in customer pay gross profit, ~~partially offset by~~ a ~~$7.0~~$9.1 million, or ~~10.2%~~12.1%, ~~decrease in warranty gross profit and a $0.6 million, or 0.8%, decrease~~increase in vehicle preparation and body shop gross profit, and a $6.8 million, or 10.8%, increase in warranty gross profit.

Retail Commercial Truck Dealership Data

(In millions, except unit and per unit amounts)


								2022 vs. 2021												2023 vs. 2022
New Commercial Truck Data	New Commercial Truck Data	2022			2021			Change			% Change		New Commercial Truck Data	2023			2022			Change			% Change
New retail unit sales	New retail unit sales	3,531			3,314			217			6.5	%	New retail unit sales	4,517			3,855			662			17.2	%
Same-store new retail unit sales	Same-store new retail unit sales	3,216			3,314			(98)			(3.0)	%	Same-store new retail unit sales	4,332			3,822			510			13.3	%
New retail sales revenue	New retail sales revenue	$	447.3		$	399.2		$	48.1		12.0	%	New retail sales revenue	$	600.2		$	471.7		$	128.5		27.2	%
Same-store new retail sales revenue	Same-store new retail sales revenue	$	406.7		$	399.2		$	7.5		1.9	%	Same-store new retail sales revenue	$	579.8		$	467.4		$	112.4		24.0	%
New retail sales revenue per unit	New retail sales revenue per unit	$	126,676		$	120,445		$	6,231		5.2	%	New retail sales revenue per unit	$	132,884		$	122,357		$	10,527		8.6	%
Same-store new retail sales revenue per unit	Same-store new retail sales revenue per unit	$	126,458		$	120,445		$	6,013		5.0	%	Same-store new retail sales revenue per unit	$	133,835		$	122,291		$	11,544		9.4	%
Gross profit — new	Gross profit — new	$	26.5		$	19.6		$	6.9		35.2	%	Gross profit — new	$	32.5		$	29.0		$	3.5		12.1	%
Same-store gross profit — new	Same-store gross profit — new	$	23.1		$	19.6		$	3.5		17.9	%	Same-store gross profit — new	$	31.1		$	28.7		$	2.4		8.4	%
Average gross profit per new truck retailed	Average gross profit per new truck retailed	$	7,504		$	5,909		$	1,595		27.0	%	Average gross profit per new truck retailed	$	7,190		$	7,511		$	(321)		(4.3)	%
Same-store average gross profit per new truck retailed	Same-store average gross profit per new truck retailed	$	7,178		$	5,909		$	1,269		21.5	%	Same-store average gross profit per new truck retailed	$	7,187		$	7,501		$	(314)		(4.2)	%
Gross margin % — new	Gross margin % — new	5.9		%	4.9		%	1.0		%	20.4	%	Gross margin % — new	5.4		%	6.1		%	(0.7)		%	(11.5)	%
Same-store gross margin % — new	Same-store gross margin % — new	5.7		%	4.9		%	0.8		%	16.3	%	Same-store gross margin % — new	5.4		%	6.1		%	(0.7)		%	(11.5)	%

Table of Contents

Units

Retail unit sales of new trucks increased from ~~2021~~2022 to ~~2022~~2023 due to a ~~315~~510 unit, or 13.3%, increase in same-store new retail unit sales, coupled with a 152 unit increase from net dealership ~~acquisitions, partially offset by a 98 unit, or 3.0%, decrease in same-store new retail unit sales.~~acquisitions. We believe the ~~decrease~~increase in same-store unit sales is primarily due to ~~a limited supply of new trucks available~~replacement demand for ~~sale, which has been caused by supply chain issues discussed above.~~medium- and heavy-duty trucks.

Revenues

New commercial truck retail sales revenue increased from ~~2021~~2022 to ~~2022~~2023 due to a ~~$40.6~~$112.4 million, or 24.0%, increase in same-store revenues, coupled with a $16.1 million increase from net dealership ~~acquisitions, coupled with a $7.5 million, or 1.9%, increase in same-store revenues.~~acquisitions. The increase in same-store revenue is due to the increase in same-store new retail unit sales, which increased revenue by $68.3 million, coupled with a ~~$6,013~~$11,544 per unit increase in same-store comparative average selling price, which increased revenue by ~~$19.3 million, partially offset by the decrease in same-store new retail unit sales, which decreased revenue by $11.8~~$44.1 million. We believe the increase in same-store comparative average selling price is due to ~~increased customer~~higher prices driven by replacement demand and ~~a limited supply of new trucks available for sale, which has been caused~~surcharges initiated by ~~supply chain issues discussed above.~~the manufacturer.

Gross Profit

New commercial truck retail gross profit increased from ~~2021~~2022 to ~~2022~~2023 due to a ~~$3.5~~$2.4 million, or ~~17.9%~~8.4%, increase in same-store gross profit, coupled with a ~~$3.4~~$1.1 million increase from net dealership acquisitions. The increase in same-store gross profit is due to the increase in same-store new retail unit sales, which increased gross profit by $3.6 million, partially offset by a ~~$1,269~~$314 per unit ~~increase~~decrease in same-store comparative average gross profit, which ~~increased gross profit by $4.1 million, partially offset by the decrease in same-store new retail unit sales, which~~ decreased gross profit by ~~$0.6~~$1.2 million. We believe the ~~increase~~decrease in same-store comparative average gross profit per unit is attributed to ~~increased customer demand and a limited supply~~sales mix of ~~new trucks available for sale, which has been caused by supply chain issues discussed above.~~retail unit sales.

~~Table of Contents~~


								2022 vs. 2021												2023 vs. 2022
Used Commercial Truck Data	Used Commercial Truck Data	2022			2021			Change			% Change		Used Commercial Truck Data	2023			2022			Change			% Change
Used retail unit sales	Used retail unit sales	643			832			(189)			(22.7)	%	Used retail unit sales	655			837			(182)			(21.7)	%
Same-store used retail unit sales	Same-store used retail unit sales	583			832			(249)			(29.9)	%	Same-store used retail unit sales	642			831			(189)			(22.7)	%
Used retail sales revenue	Used retail sales revenue	$	78.7		$	59.0		$	19.7		33.4	%	Used retail sales revenue	$	49.5		$	100.3		$	(50.8)		(50.6)	%
Same-store used retail sales revenue	Same-store used retail sales revenue	$	71.5		$	59.0		$	12.5		21.2	%	Same-store used retail sales revenue	$	48.5		$	99.7		$	(51.2)		(51.4)	%
Used retail sales revenue per unit	Used retail sales revenue per unit	$	122,415		$	70,932		$	51,483		72.6	%	Used retail sales revenue per unit	$	75,640		$	119,847		$	(44,207)		(36.9)	%
Same-store used retail sales revenue per unit	Same-store used retail sales revenue per unit	$	122,707		$	70,932		$	51,775		73.0	%	Same-store used retail sales revenue per unit	$	75,572		$	119,983		$	(44,411)		(37.0)	%
Gross profit — used	Gross profit — used	$	5.9		$	9.5		$	(3.6)		(37.9)	%	Gross profit — used	$	5.4		$	15.9		$	(10.5)		(66.0)	%
Same-store gross profit — used	Same-store gross profit — used	$	5.7		$	9.5		$	(3.8)		(40.0)	%	Same-store gross profit — used	$	5.2		$	15.8		$	(10.6)		(67.1)	%
Average gross profit per used truck retailed	Average gross profit per used truck retailed	$	9,133		$	11,381		$	(2,248)		(19.8)	%	Average gross profit per used truck retailed	$	8,195		$	18,961		$	(10,766)		(56.8)	%
Same-store average gross profit per used truck retailed	Same-store average gross profit per used truck retailed	$	9,850		$	11,381		$	(1,531)		(13.5)	%	Same-store average gross profit per used truck retailed	$	8,157		$	19,011		$	(10,854)		(57.1)	%
Gross margin % — used	Gross margin % — used	7.5		%	16.1		%	(8.6)		%	(53.4)	%	Gross margin % — used	10.9		%	15.9		%	(5.0)		%	(31.4)	%
Same-store gross margin % — used	Same-store gross margin % — used	8.0		%	16.1		%	(8.1)		%	(50.3)	%	Same-store gross margin % — used	10.7		%	15.8		%	(5.1)		%	(32.3)	%

Units

Retail unit sales of used trucks decreased from ~~2021~~2022 to ~~2022~~2023 due to a ~~249~~189 unit, or ~~29.9%~~22.7%, decrease in same-store retail unit sales, partially offset by a 607 unit increase from net dealership acquisitions. We believe the decrease in same-store unit sales is primarily due to ~~a lower~~the increasing supply of new ~~replacement trucks available~~truck inventory, coupled with the lower spot freight rates in the market reducing the demand for ~~sale causing customers to use their existing trucks longer, which lower supply has been caused by supply chain issues discussed above, and higher~~ used ~~unit prices impacting the affordability of used trucks for customers.~~trucks.

Revenues

Used commercial truck retail sales revenue ~~increased~~decreased from ~~2021~~2022 to ~~2022~~2023 due to a ~~$12.5~~$51.2 million, or ~~21.2%~~51.4%, ~~increase~~decrease in same-store revenues, ~~coupled with~~partially offset by a ~~$7.2~~$0.4 million increase from net dealership acquisitions. The ~~increase~~decrease in same-store revenue is due to a ~~$51,775~~$44,411 per unit ~~increase~~decrease in same-store comparative average selling price, which ~~increased~~decreased revenue by ~~$30.2~~$28.5 million, ~~partially offset by~~coupled with the decrease in same-store used retail unit sales, which decreased revenue by ~~$17.7~~$22.7 million. We believe the ~~increase~~decrease in same-store comparative average selling price is primarily due to ~~a limited supply~~the declining value of used trucks ~~available~~from decreasing freight spot rates, which reduced overall market demand for ~~sale, which has been caused by supply chain issues discussed above.~~used trucks.

Table of Contents

Gross Profit

Used commercial truck retail gross profit decreased from ~~2021~~2022 to ~~2022~~2023 due to a ~~$3.8~~$10.6 million, or ~~40.0%~~67.1%, decrease in same-store gross profit, partially offset by a ~~$0.2~~$0.1 million increase from net dealership acquisitions. The decrease in same-store gross profit is due to ~~the decrease in same-store used retail unit sales, which decreased gross profit by $2.9 million, coupled with~~ a ~~$1,531~~$10,854 per unit decrease in same-store comparative average gross profit, which decreased gross profit by ~~$0.9~~$7.0 million, coupled with the decrease in same-store used retail unit sales, which decreased gross profit by $3.6 million. We believe the decrease in same-store comparative average gross profit per unit is primarily due to the ~~increased cost of acquiring~~decreasing spot freight rates, which reduced the overall market demand for used ~~trucks resulting from the lower supply of new trucks available for sale, which decreased our gross margin.~~trucks.


								2022 vs. 2021												2023 vs. 2022
Service and Parts Data	Service and Parts Data	2022			2021			Change			% Change		Service and Parts Data	2023			2022			Change			% Change
Service and parts revenue	Service and parts revenue	$	219.6		$	157.3		$	62.3		39.6	%	Service and parts revenue	$	228.0		$	197.0		$	31.0		15.7	%
Same-store service and parts revenue	Same-store service and parts revenue	$	193.2		$	157.1		$	36.1		23.0	%	Same-store service and parts revenue	$	215.3		$	193.6		$	21.7		11.2	%
Gross profit — service and parts	Gross profit — service and parts	$	92.3		$	66.3		$	26.0		39.2	%	Gross profit — service and parts	$	98.3		$	83.8		$	14.5		17.3	%
Same-store service and parts gross profit	Same-store service and parts gross profit	$	81.6		$	66.2		$	15.4		23.3	%	Same-store service and parts gross profit	$	92.2		$	82.5		$	9.7		11.8	%
Gross margin % — service and parts	Gross margin % — service and parts	42.0		%	42.1		%	(0.1)		%	(0.2)	%	Gross margin % — service and parts	43.1		%	42.5		%	0.6		%	1.4	%
Same-store service and parts gross margin %	Same-store service and parts gross margin %	42.2		%	42.1		%	0.1		%	0.2	%	Same-store service and parts gross margin %	42.8		%	42.6		%	0.2		%	0.5	%

Revenues

Service and parts revenue increased from ~~2021~~2022 to ~~2022~~2023 due to a ~~$36.1~~$21.7 million, or ~~23.0%~~11.2%, increase in same-store revenues, coupled with a ~~$26.2~~$9.3 million increase from net dealership acquisitions. Customer pay work represented

~~Table~~ approximately 80.6% of ~~Contents~~

~~approximately 81.4% of PTG’s~~PTG's service and parts revenue, largely due to the significant amount of retail sales of parts and accessories. The increase in same-store revenue is due to a ~~$30.9~~$16.2 million, or ~~24.8%~~10.4%, increase in customer pay revenue, a ~~$5.1~~$4.8 million, or ~~20.5%~~16.2%, increase in warranty revenue, and a ~~$0.1~~$0.7 million, or ~~1.5%~~9.5%, increase in body shop revenue. We believe the increase in same-store service and parts revenue is ~~primarily due to~~being driven by the prolonged ~~reliance on older~~replacement cycle of trucks, ~~resulting from the limited supply~~higher utilization by customers of ~~new~~existing trucks, ~~which generates additional service~~ and ~~parts revenues.~~as a result, increased mileage accumulation across existing fleets.

Gross Profit

Service and parts gross profit increased from ~~2021~~2022 to ~~2022~~2023 due to a ~~$15.4~~$9.7 million, or ~~23.3%~~11.8%, increase in same-store gross profit, coupled with a ~~$10.6~~$4.8 million increase from net dealership acquisitions. The increase in same-store gross profit is due to the increase in same-store revenues, which increased gross profit by ~~$15.3~~$9.3 million, coupled with a ~~0.1%~~0.2% increase in same-store gross margin, which increased gross profit by ~~$0.1~~$0.4 million. The increase in same-store gross profit is due to a ~~$12.8~~$7.3 million, or ~~27.7%~~12.8%, increase in customer pay gross profit, ~~and~~ a ~~$2.6~~$2.0 million, or ~~18.3%~~11.7%, increase in warranty gross profit, and a $0.4 million, or 5.5%, increase in body shop gross profit.

Commercial Vehicle Distribution and Other Data

(In millions, except unit amounts)


						2022 vs. 2021									2023 vs. 2022
Penske Australia Data	Penske Australia Data	2022		2021		Change		% Change		Penske Australia Data	2023		2022		Change		% Change
Commercial vehicle units (wholesale and retail)	Commercial vehicle units (wholesale and retail)	357		436		(79)		(18.1)	%	Commercial vehicle units (wholesale and retail)	279		338		(59)		(17.5)	%
Power system units	Power system units	375		267		108		40.4	%	Power system units	304		335		(31)		(9.3)	%
Sales revenue	Sales revenue	$	140.9	$	164.6	$	(23.7)	(14.4)	%	Sales revenue	$	143.6	$	153.9	$	(10.3)	(6.7)	%
Gross profit	Gross profit	$	41.0	$	39.6	$	1.4	3.5	%	Gross profit	$	42.7	$	39.8	$	2.9	7.3	%

Penske Australia primarily distributes and services commercial vehicles, engines, and power systems. This business generated ~~$140.9~~$143.6 million of revenue during the three months ended ~~June 30, 2022,~~March 31, 2023, compared to ~~$164.6~~$153.9 million of revenue in the prior year, a decrease of ~~14.4%~~6.7%. This business also generated ~~$41.0~~$42.7 million of gross profit during the three months ended ~~June 30, 2022,~~March 31, 2023, compared to ~~$39.6~~$39.8 million of gross profit in the prior year, an increase of ~~3.5%~~7.3%.

Excluding ~~$11.5~~$9.5 million of unfavorable foreign currency fluctuations, revenue decreased ~~7.4%~~0.5% primarily due to a decrease in ~~commercial vehicle unit sales~~units sold due to ~~a limited~~disruptions in the supply ~~of commercial vehicles available for sale, which we believe has been caused by supply chain issues discussed above.~~chain. Excluding ~~$3.3~~$2.8 million of unfavorable foreign currency fluctuations, gross profit increased ~~11.9%~~14.3% primarily due to an increase in ~~commercial vehicle gross profit per unit~~remanufacturing and ~~an increase in gross profit per unit in our power generation product lines.~~

~~Selling, General,~~higher margin service and ~~Administrative Data~~

~~(In millions)~~

2022 vs. 2021
Selling, General, and Administrative Data 2022 2021 Change % Change
Personnel expense $ 510.6 $ 480.1 $ 30.5 6.4 %
Advertising expense $ 31.2 $ 31.9 $ (0.7) (2.2) %
Rent & related expense $ 92.9 $ 82.5 $ 10.4 12.6 %
Other expense $ 183.0 $ 155.3 $ 27.7 17.8 %
Total SG&A expenses $ 817.7 $ 749.8 $ 67.9 9.1 %
Same-store SG&A expenses $ 774.6 $ 747.3 $ 27.3 3.7 %
Personnel expense as % of gross profit 41.3 % 40.6 % 0.7 % 1.7 %
Advertising expense as % of gross profit 2.5 % 2.7 % (0.2) % (7.4) %
Rent & related expense as % of gross profit 7.5 % 7.0 % 0.5 % 7.1 %
Other expense as % of gross profit 14.8 % 13.1 % 1.7 % 13.0 %
Total SG&A expenses as % of gross profit 66.1 % 63.4 % 2.7 % 4.3 %
Same-store SG&A expenses as % of same-store gross profit 66.0 % 63.4 % 2.6 % 4.1 %
parts sales.

3432

Table of Contents

Selling, General, and Administrative Data

(In millions)


							2023 vs. 2022
Selling, General, and Administrative Data	2023			2022			Change			% Change
Personnel expense	$	505.7		$	501.1		$	4.6		0.9	%
Advertising expense	$	32.3		$	31.6		$	0.7		2.2	%
Rent & related expense	$	95.4		$	90.8		$	4.6		5.1	%
Other expense	$	211.5		$	174.3		$	37.2		21.3	%
Total SG&A expenses	$	844.9		$	797.8		$	47.1		5.9	%
Same-store SG&A expenses	$	808.3		$	790.2		$	18.1		2.3	%

Personnel expense as % of gross profit	40.4		%	40.7		%	(0.3)		%	(0.7)	%
Advertising expense as % of gross profit	2.6		%	2.6		%	—		%	—	%
Rent & related expense as % of gross profit	7.6		%	7.4		%	0.2		%	2.7	%
Other expense as % of gross profit	16.9		%	14.1		%	2.8		%	19.9	%
Total SG&A expenses as % of gross profit	67.5		%	64.8		%	2.7		%	4.2	%
Same-store SG&A expenses as % of same-store gross profit	67.0		%	64.6		%	2.4		%	3.7	%

Selling, general, and administrative expenses (“("SG~~&A”~~&A") increased from ~~2021~~2022 to ~~2022~~2023 due to a ~~$27.3~~$29.0 million increase from net acquisitions, coupled with an $18.1 million, or ~~3.7%~~2.3%, increase in same-store SG~~&A, coupled with a $40.6 million increase from net acquisitions.~~&A. Excluding ~~$31.9~~$28.0 million of favorable foreign currency fluctuations, same-store SG&A increased ~~7.9%~~5.8%. SG&A as a percentage of gross profit was ~~66.1%~~67.5%, an increase of 270 basis points compared to ~~63.4%~~64.8% in the prior year. SG&A expenses as a percentage of total revenue was ~~11.8%~~11.5% and ~~10.7%~~11.4% in the three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively. We believe the increase in SG&A as a percentage of gross profit is primarily due to the inflationary effect on our personnel, rent, and other expenses.

Depreciation

(In millions)

2022 vs. 2021
2022 2021 Change % Change
Depreciation $ 31.7 $ 30.2 1.5 5.0 %


					2023 vs. 2022
	2023		2022		Change	% Change
Depreciation	$	33.9	$	31.9	2.0	6.3	%

Depreciation increased from ~~2021~~2022 to ~~2022~~2023 due to a ~~$2.0~~$1.2 million, or 3.7%, increase in same-store depreciation, coupled with a $0.8 million increase from net ~~acquisitions, partially offset by a $0.5 million, or 1.5% decrease, in same-store depreciation.~~acquisitions.

Floor Plan Interest Expense

(In millions)

2022 vs. 2021
2022 2021 Change % Change
Floor plan interest expense $ 9.0 $ 7.9 1.1 13.9 %


					2023 vs. 2022
	2023		2022		Change	% Change
Floor plan interest expense	$	27.9	$	7.5	20.4	272.0	%

Floor plan interest expense increased from ~~2021~~2022 to ~~2022~~2023 due to a ~~$0.6~~$19.8 million, or ~~8.2%~~266.4%, increase in same-store floor plan interest expense, coupled with a ~~$0.5~~$0.6 million increase from net acquisitions. We believe the overall increase is primarily due to increases in applicable rates, ~~partially offset by decreases~~coupled with increases in average amounts outstanding under floor plan ~~arrangements as new vehicle inventory declined due to a lower supply~~arrangements.

Table of ~~new vehicles available for sale, which has been caused by supply chain issues discussed above.~~Contents

Other Interest Expense

(In millions)

2022 vs. 2021
2022 2021 Change % Change
Other interest expense $ 17.0 $ 19.7 (2.7) (13.7) %


					2023 vs. 2022
	2023		2022		Change	% Change
Other interest expense	$	20.8	$	16.5	4.3	26.1	%

Other interest expense ~~decreased~~increased from ~~2021~~2022 to ~~2022~~2023 primarily due to ~~the decrease in outstanding revolver borrowings under the U.S. credit agreement, partially offset by~~ increases in applicable ~~rates.~~rates, coupled with increases in average revolver borrowing amounts outstanding under our credit agreements.

Equity in Earnings of Affiliates

(In millions)

2022 vs. 2021
2022 2021 Change % Change
Equity in earnings of affiliates $ 138.0 $ 105.6 32.4 30.7 %


					2023 vs. 2022
	2023		2022		Change	% Change
Equity in earnings of affiliates	$	82.1	$	119.6	(37.5)	(31.4)	%

Equity in earnings of affiliates ~~increased~~decreased from ~~2021~~2022 to ~~2022~~2023 due to a ~~$34.1~~$37.7 million, or ~~33.3%~~31.8%, ~~increase~~decrease in earnings from our investment in PTS, ~~coupled with an~~partially offset by the increase in earnings from our retail automotive joint ventures which were partially offset by the decrease in equity earnings from our previous joint venture in Japan as we no longer include the results of this business in this line item due to our acquiring 100% of this joint venture.ventures. We believe the ~~increase~~decrease in our PTS equity earnings is primarily due the decrease in gains from the sale of vehicles and a decrease in rental utilization, coupled with the increased costs for inflation and interest expense when compared to ~~strong demand and profitability for commercial rental trucks and full-service leasing, as well as used vehicle sales.~~

~~Table of Contents~~

the same period last year.

Income Taxes

(In millions)

2022 vs. 2021
2022 2021 Change % Change
Income taxes $ 123.7 $ 123.4 0.3 0.2 %


					2023 vs. 2022
	2023		2022		Change	% Change
Income taxes	$	107.3	$	128.1	(20.8)	(16.2)	%

Income taxes ~~increased~~decreased from ~~2021~~2022 to ~~2022 primarily~~2023 due to a ~~$35.9~~$90.7 million ~~increase~~decrease in our pre-tax income compared to the prior year. Our effective tax rate was ~~24.8%~~26.4% during the three months ended ~~June 30, 2022,~~March 31, 2023, compared to ~~26.6%~~25.7% during the three months ended ~~June 30, 2021,~~March 31, 2022, primarily due to fluctuations in our geographic pre-tax income mix ~~coupled with the increase in net income tax expense in the prior year of $8.8 million related to U.K. tax legislation changes.~~

~~Six Months Ended June 30, 2022, Compared to Six Months Ended June 30, 2021~~

~~Retail Automotive Dealership New Vehicle Data~~

~~(In millions, except unit and per unit amounts)~~

2022 vs. 2021
New Vehicle Data 2022 2021 Change % Change
New retail unit sales 91,043 108,198 (17,155) (15.9) %
Same-store new retail unit sales 86,704 107,944 (21,240) (19.7) %
New retail sales revenue $ 4,891.5 $ 5,232.7 $ (341.2) (6.5) %
Same-store new retail sales revenue $ 4,640.7 $ 5,212.0 $ (571.3) (11.0) %
New retail sales revenue per unit $ 53,727 $ 48,363 $ 5,364 11.1 %
Same-store new retail sales revenue per unit $ 53,523 $ 48,285 $ 5,238 10.8 %
Gross profit — new $ 623.7 $ 481.6 $ 142.1 29.5 %
Same-store gross profit — new $ 589.9 $ 479.3 $ 110.6 23.1 %
Average gross profit per new vehicle retailed $ 6,850 $ 4,451 $ 2,399 53.9 %
Same-store average gross profit per new vehicle retailed $ 6,804 $ 4,440 $ 2,364 53.2 %
Gross margin % — new 12.8 % 9.2 % 3.6 % 39.1 %
Same-store gross margin % — new 12.7 % 9.2 % 3.5 % 38.0 %

~~Units~~

Retail unit sales of new vehicles decreased from 2021 to 2022 due to a 21,240 unit, or 19.7%, decrease in same-store new retail unit sales, partially offset by a 4,085 unit increase from net dealership acquisitions. Same-store units decreased 22.5% in the U.S. and decreased 13.9% internationally. Overall, new unit sales decreased 19.2% in the U.S. and decreased 9.1% internationally. We believe the decrease in same-store unit sales is due to a lower supply of new vehicles available for sale, which has been caused by supply chain issues discussed above.

~~Revenues~~

New vehicle retail sales revenue decreased from 2021 to 2022 due to a $571.3 million, or 11.0%, decrease in same-store revenues, partially offset by a $230.1 million increase from net dealership acquisitions. Excluding $128.1 million of unfavorable foreign currency fluctuations, same-store new retail revenue decreased 8.5%. The decrease in same-store revenue is due to the decrease in same-store new retail unit sales, which decreased revenue by $1,025.5 million, partially offset by a $5,238 per unit increase in same-store comparative average selling price (including a $1,480 per unit decrease attributable to unfavorable foreign currency fluctuations), which increased revenue by $454.2 million. We believe the increase in same-store comparative average selling price is due to increased customer demand and a lower supply of new vehicles available for sale, which has been caused by supply chain issues discussed above.

~~Gross Profit~~

Retail gross profit from new vehicle sales increased from 2021 to 2022 due to a $110.6 million, or 23.1%, increase in same-store gross profit, coupled with a $31.5 million increase from net dealership acquisitions. Excluding $15.2 million of unfavorable foreign currency fluctuations, same-store gross profit increased 26.2%. The increase in same-store gross profit

~~Table of Contents~~

is due to a $2,364 per unit increase in same-store comparative average gross profit (including a $175 per unit decrease attributable to unfavorable foreign currency fluctuations), which increased gross profit by $205.0 million, partially offset by the decrease in same-store new retail unit sales, which decreased gross profit by $94.4 million. We believe the increase in same-store comparative average gross profit per unit is attributed to increased customer demand and a lower supply of new vehicles available for sale, which has been caused by supply chain issues discussed above.

~~Retail Automotive Dealership Used Vehicle Data~~

~~(In millions, except unit and per unit amounts)~~

2022 vs. 2021
Used Vehicle Data 2022 2021 Change % Change
Used retail unit sales 138,225 135,151 3,074 2.3 %
Same-store used retail unit sales 131,756 134,477 (2,721) (2.0) %
Used retail sales revenue $ 4,810.7 $ 4,135.6 $ 675.1 16.3 %
Same-store used retail sales revenue $ 4,603.0 $ 4,113.7 $ 489.3 11.9 %
Used retail sales revenue per unit $ 34,803 $ 30,599 $ 4,204 13.7 %
Same-store used retail sales revenue per unit $ 34,936 $ 30,590 $ 4,346 14.2 %
Gross profit — used $ 311.0 $ 303.5 $ 7.5 2.5 %
Same-store gross profit — used $ 298.6 $ 302.0 $ (3.4) (1.1) %
Average gross profit per used vehicle retailed $ 2,250 $ 2,246 $ 4 0.2 %
Same-store average gross profit per used vehicle retailed $ 2,266 $ 2,246 $ 20 0.9 %
Gross margin % — used 6.5 % 7.3 % (0.8) % (11.0) %
Same-store gross margin % — used 6.5 % 7.3 % (0.8) % (11.0) %

~~Units~~

Retail unit sales of used vehicles increased from 2021 to 2022 due to a 5,795 unit increase from net dealership acquisitions, partially offset by a 2,721 unit, or 2.0%, decrease in same-store used retail unit sales. Our same-store units decreased 12.1% in the U.S. and increased 8.0% internationally. Same-store retail units for our U.S. and U.K. CarShop used vehicle dealerships decreased 27.5% and increased 39.4%, respectively. Overall, our used units decreased 8.7% in the U.S. and increased 13.2% internationally. We believe the increase in same-store unit sales in the U.K. is primarily due to the lifting of lockdown restrictions due to COVID-19 compared to the same period last year. We believe the decrease in same-store unit sales in the U.S. is primarily due to higher used unit prices attributable to lower overall vehicle inventory availability for sale, impacting the affordability of used vehicles for customers, which has been caused by supply chain issues discussed above.

~~Revenues~~

Used vehicle retail sales revenue increased from 2021 to 2022 due to a $489.3 million, or 11.9%, increase in same-store revenues, coupled with a $185.8 million increase from net dealership acquisitions. Excluding $181.0 million of unfavorable foreign currency fluctuations, same-store used retail revenue increased 16.3%. The increase in same-store revenue is due to a $4,346 per unit increase in same-store comparative average selling price (including a $1,374 per unit decrease attributable to unfavorable foreign currency fluctuations), which increased revenue by $572.6 million, partially offset by the decrease in same-store used retail unit sales, which decreased revenue by $83.3 million. The average sales price per unit for our CarShop used vehicle dealerships increased 12.6% to $20,498. We believe the increase in same-store comparative average selling price is primarily due to consumers looking to acquire used vehicles to compensate for the lower supply of new vehicles available for sale, which has been caused by ~~supply chain issues discussed above~~.

~~Gross Profit~~

Retail gross profit from used vehicle sales increased from 2021 to 2022 due to a $10.9 million increase from net dealership acquisitions, partially offset by a $3.4 million, or 1.1%, decrease in same-store gross profit. Excluding $10.2 million of unfavorable foreign currency fluctuations, same-store gross profit increased 2.3%. The decrease in same-store gross profit is due to the decrease in same-store used retail unit sales, which decreased gross profit by $6.0 million, partially offset by a $20 per unit increase in same-store comparative average gross profit (including a $78 per unit decrease attributable to unfavorable foreign currency fluctuations), which increased gross profit by $2.6 million. The average gross

~~Table of Contents~~

profit per unit for our CarShop used vehicle dealerships decreased 34.8% to $765. We believe the increase in same-store comparative average gross profit per unit is primarily due to consumers looking to acquire used vehicles to compensate for the lower supply of new vehicles available for sale, which has been caused by supply chain issues discussed above.

~~Retail Automotive Dealership Finance and Insurance Data~~

~~(In millions, except unit and per unit amounts)~~

2022 vs. 2021
Finance and Insurance Data 2022 2021 Change % Change
Total retail unit sales 229,268 243,349 (14,081) (5.8) %
Total same-store retail unit sales 218,460 242,421 (23,961) (9.9) %
Finance and insurance revenue $ 438.7 $ 381.1 $ 57.6 15.1 %
Same-store finance and insurance revenue $ 424.0 $ 379.3 $ 44.7 11.8 %
Finance and insurance revenue per unit $ 1,914 $ 1,566 $ 348 22.2 %
Same-store finance and insurance revenue per unit $ 1,941 $ 1,565 $ 376 24.0 %

Finance and insurance revenue increased from 2021 to 2022 due to a $44.7 million, or 11.8%, increase in same-store revenues, coupled with a $12.9 million increase from net dealership acquisitions. Excluding $11.9 million of unfavorable foreign currency fluctuations, same-store finance and insurance revenue increased 14.9%. The increase in same-store revenue is due to a $376 per unit increase in same-store comparative average finance and insurance revenue (including a $54 per unit decrease attributable to unfavorable foreign currency fluctuations), which increased revenue by $82.1 million, partially offset by the decrease in same-store retail unit sales, which decreased revenue by $37.4 million. Finance and insurance revenue per unit increased 32.0% in the U.S. and increased 12.1% in the U.K. We believe the increase in same-store finance and insurance revenue per unit is primarily due to our efforts to increase finance and insurance penetration, which include implementing interactive digital customer sales platforms, additional training, and targeting underperforming locations, coupled with the increase in ~~average selling price per unit of new and used vehicles. Changes in the sales mix from lower leasing and a higher amount of purchases have also driven higher product penetration rates.~~

~~Retail Automotive Dealership Service and Parts Data~~

~~(In millions)~~

2022 vs. 2021
Service and Parts Data 2022 2021 Change % Change
Service and parts revenue $ 1,183.2 $ 1,049.4 $ 133.8 12.8 %
Same-store service and parts revenue $ 1,135.0 $ 1,046.5 $ 88.5 8.5 %
Gross profit — service and parts $ 709.7 $ 642.4 $ 67.3 10.5 %
Same-store service and parts gross profit $ 682.6 $ 640.0 $ 42.6 6.7 %
Gross margin % — service and parts 60.0 % 61.2 % (1.2) % (2.0) %
Same-store service and parts gross margin % 60.1 % 61.2 % (1.1) % (1.8) %

~~Revenues~~

~~Service and parts revenue increased from 2021 to 2022, with an increase of 14.8% in the U.S.~~ and an increase of 8.8% internationally. The increase in service and parts revenue is due to an $88.5 million, or 8.5%, increase in same-store revenues, coupled with a $45.3 million increase from net dealership acquisitions. Excluding $28.2 million of unfavorable foreign currency fluctuations, same-store revenue increased 11.2%. The increase in same-store revenue is due to a $99.5 million, or 13.4%, increase in customer pay revenue and an $8.1 million, or 13.0%, increase in vehicle preparation and body shop revenue, partially offset by a $19.1 million, or 7.9%, decrease in warranty revenue. We believe the increase in same-store service and parts revenue is related to increases in vehicle miles traveled compared to the ~~same period last year, coupled with the prolonged reliance on older vehicles resulting from the limited supply of new vehicles, which generates additional service and parts revenues.~~

~~Gross Profit~~

Service and parts gross profit increased from 2021 to 2022 due to a $42.6 million, or 6.7%, increase in same-store gross profit, coupled with a $24.7 million increase from net dealership acquisitions. Excluding $16.5 million of

~~Table of Contents~~

unfavorable foreign currency fluctuations, same-store gross profit increased 9.2%. The increase in same-store gross profit is due to the increase in same-store revenues, which increased gross profit by $53.3 million, partially offset by a 1.1% decrease in same-store gross margin, which decreased gross profit by $10.7 million. The increase in same-store gross profit is due to a $45.8 million, or 12.6%, increase in customer pay gross profit and a $6.1 million, or 4.2%, increase in vehicle preparation and body shop gross profit, partially offset by a $9.3 million, or 7.0%, decrease in warranty gross profit.

~~Retail Commercial Truck Dealership Data~~

~~(In millions, except unit and per unit amounts)~~

2022 vs. 2021
New Commercial Truck Data 2022 2021 Change % Change
New retail unit sales 7,386 5,479 1,907 34.8 %
Same-store new retail unit sales 5,774 4,935 839 17.0 %
New retail sales revenue $ 919.0 $ 646.7 $ 272.3 42.1 %
Same-store new retail sales revenue $ 715.2 $ 587.5 $ 127.7 21.7 %
New retail sales revenue per unit $ 124,422 $ 118,026 $ 6,396 5.4 %
Same-store new retail sales revenue per unit $ 123,861 $ 119,038 $ 4,823 4.1 %
Gross profit — new $ 55.5 $ 33.8 $ 21.7 64.2 %
Same-store gross profit — new $ 45.0 $ 32.2 $ 12.8 39.8 %
Average gross profit per new truck retailed $ 7,508 $ 6,176 $ 1,332 21.6 %
Same-store average gross profit per new truck retailed $ 7,800 $ 6,516 $ 1,284 19.7 %
Gross margin % — new 6.0 % 5.2 % 0.8 % 15.4 %
Same-store gross margin % — new 6.3 % 5.5 % 0.8 % 14.5 %

~~Units~~

Retail unit sales of new trucks increased from 2021 to 2022 due to a 1,068 unit increase from net dealership acquisitions, coupled with an 839 unit, or 17.0%, increase in same-store new retail unit sales. We believe the increase in same-store unit sales is primarily due to higher demand from a stronger economy and the timing of deliveries from the vehicle manufacturers due to the backlog of orders delivered during the first quarter of 2022, which has been caused by the supply chain issues discussed above.

~~Revenues~~

New commercial truck retail sales revenue increased from 2021 to 2022 due to a $144.6 million increase from net dealership acquisitions, coupled with a $127.7 million, or 21.7%, increase in same-store revenues. The increase in same-store revenue is due to the increase in same-store new retail unit sales, which increased revenue by $103.9 million, coupled with a $4,823 per unit increase in same-store comparative average selling price, which increased revenue by $23.8 million. We believe the increase in same-store comparative average selling price is due to a limited supply of new trucks available for sale, which has been caused by supply chain issues discussed above.

~~Gross Profit~~

New commercial truck retail gross profit increased from 2021 to 2022 due to a $12.8 million, or 39.8%, increase in same-store gross profit, coupled with an $8.9 million increase from net dealership acquisitions. The increase in same-store gross profit is due to the increase in same-store new retail unit sales, which increased gross profit by $6.5 million, coupled with a $1,284 per unit increase in same-store comparative average gross profit, which increased gross profit by $6.3 million. We believe the increase in same-store comparative average gross profit per unit is attributed to a limited supply of new trucks available for sale, which has been caused by supply chain issues discussed above.

~~Table of Contents~~

2022 vs. 2021
Used Commercial Truck Data 2022 2021 Change % Change
Used retail unit sales 1,480 1,673 (193) (11.5) %
Same-store used retail unit sales 1,167 1,644 (477) (29.0) %
Used retail sales revenue $ 179.0 $ 110.0 $ 69.0 62.7 %
Same-store used retail sales revenue $ 142.2 $ 107.7 $ 34.5 32.0 %
Used retail sales revenue per unit $ 120,963 $ 65,729 $ 55,234 84.0 %
Same-store used retail sales revenue per unit $ 121,865 $ 65,536 $ 56,329 86.0 %
Gross profit — used $ 21.8 $ 15.9 $ 5.9 37.1 %
Same-store gross profit — used $ 17.4 $ 15.5 $ 1.9 12.3 %
Average gross profit per used truck retailed $ 14,691 $ 9,518 $ 5,173 54.3 %
Same-store average gross profit per used truck retailed $ 14,947 $ 9,434 $ 5,513 58.4 %
Gross margin % — used 12.2 % 14.5 % (2.3) % (15.9) %
Same-store gross margin % — used 12.2 % 14.4 % (2.2) % (15.3) %

~~Units~~

Retail unit sales of used trucks decreased from 2021 to 2022 due to a 477 unit, or 29.0%, decrease in same-store retail unit sales, partially offset by a 284 unit increase from net dealership acquisitions. We believe the decrease in same-store unit sales is primarily due to a lower supply of new replacement trucks available for sale causing customers to use their existing trucks longer, which lower supply has been caused by supply chain issues discussed above, and higher used unit prices impacting the affordability of used trucks for customers.

~~Revenues~~

Used commercial truck retail sales revenue increased from 2021 to 2022 due to a $34.5 million, or 32.0%, increase in same-store revenues, coupled with a $34.5 million increase from net dealership acquisitions. The increase in same-store revenue is due to a $56,329 per unit increase in same-store comparative average selling price, which increased revenue by $65.7 million, partially offset by the decrease in same-store used retail unit sales, which decreased revenue by $31.2 million. We believe the increase in same-store comparative average selling price is primarily due to a limited supply of used trucks available for sale, which has been caused by supply chain issues discussed above.

~~Gross Profit~~

Used commercial truck retail gross profit increased from 2021 to 2022 due to a $4.0 million increase from net dealership acquisitions, coupled with a $1.9 million, or 12.3%, increase in same-store gross profit. The increase in same-store gross profit is due to a $5,513 per unit increase in same-store comparative average gross profit, which increased gross profit by $6.4 million, partially offset by the decrease in same-store used retail unit sales, which decreased gross profit by $4.5 million. We believe the increase in same-store comparative average gross profit per unit is primarily due to a limited supply of used trucks available for sale, which has been caused by supply chain issues discussed above.

2022 vs. 2021
Service and Parts Data 2022 2021 Change % Change
Service and parts revenue $ 416.6 $ 281.9 $ 134.7 47.8 %
Same-store service and parts revenue $ 323.7 $ 260.9 $ 62.8 24.1 %
Gross profit — service and parts $ 176.1 $ 119.0 $ 57.1 48.0 %
Same-store service and parts gross profit $ 137.4 $ 110.7 $ 26.7 24.1 %
Gross margin % — service and parts 42.3 % 42.2 % 0.1 % 0.2 %
Same-store service and parts gross margin % 42.4 % 42.4 % — % — %

~~Revenues~~

Service and parts revenue increased from 2021 to 2022 due to a $71.9 million increase from net dealership acquisitions, coupled with a $62.8 million, or 24.1%, increase in same-store revenues. Customer pay work represented approximately 81.2% of PTG’s service and parts revenue, largely due to the significant amount of retail sales of parts and

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accessories. The increase in same-store revenue is due to a $55.4 million, or 26.8%, increase in customer pay revenue, a $6.7 million, or 15.5%, increase in warranty revenue, and a $0.7 million, or 6.4%, increase in body shop revenue. We believe the increase in same-store service and parts revenue is primarily due to prolonged reliance on older trucks resulting from the limited supply of new trucks, which generates additional service and parts revenues.

~~Gross Profit~~

Service and parts gross profit increased from 2021 to 2022 due to a $30.4 million increase from net dealership acquisitions, coupled with a $26.7 million, or 24.1%, increase in same-store gross profit. The increase in same-store gross profit is due to the increase in same-store revenues, which increased gross profit by $26.7 million. The increase in same-store gross profit is due to a $21.9 million, or 29.1%, increase in customer pay gross profit, a $3.8 million, or 15.4%, increase in warranty gross profit, and a $1.0 million, or 9.4%, increase in body shop gross profit.

~~Commercial Vehicle Distribution and Other Data~~

~~(In millions, except unit amounts)~~

2022 vs. 2021
Penske Australia Data 2022 2021 Change % Change
Commercial vehicle units (wholesale and retail) 695 695 — — %
Power system units 710 524 186 35.5 %
Sales revenue $ 294.8 $ 296.8 $ (2.0) (0.7) %
Gross profit $ 80.8 $ 72.9 $ 7.9 10.8 %

Penske Australia primarily distributes and services commercial vehicles, engines, and power systems. This business generated $294.8 million of revenue during the six months ended June 30, 2022, compared to $296.8 million of revenue in the prior year, a decrease of 0.7%. This business also generated $80.8 million of gross profit during the six months ended June 30, 2022, compared to $72.9 million of gross profit in the prior year, an increase of 10.8%.

Excluding $21.7 million of unfavorable foreign currency fluctuations, revenue increased 6.6% primarily due to an increase in sales to our defense and power generation product lines. Excluding $5.9 million of unfavorable foreign currency fluctuations, gross profit increased 18.9% primarily due to an increase in commercial vehicle gross profit per unit and an increase in gross profit per unit in our power generation product lines.

~~Selling, General, and Administrative Data~~

~~(In millions)~~

2022 vs. 2021
Selling, General, and Administrative Data 2022 2021 Change % Change
Personnel expense $ 1,011.7 $ 877.0 $ 134.7 15.4 %
Advertising expense $ 62.8 $ 58.1 $ 4.7 8.1 %
Rent & related expense $ 183.7 $ 162.7 $ 21.0 12.9 %
Other expense $ 357.3 $ 316.3 $ 41.0 13.0 %
Total SG&A expenses $ 1,615.5 $ 1,414.1 $ 201.4 14.2 %
Same-store SG&A expenses $ 1,521.7 $ 1,400.7 $ 121.0 8.6 %
Personnel expense as % of gross profit 41.0 % 41.8 % (0.8) % (1.9) %
Advertising expense as % of gross profit 2.5 % 2.8 % (0.3) % (10.7) %
Rent & related expense as % of gross profit 7.4 % 7.8 % (0.4) % (5.1) %
Other expense as % of gross profit 14.5 % 15.1 % (0.6) % (4.0) %
Total SG&A expenses as % of gross profit 65.4 % 67.5 % (2.1) % (3.1) %
Same-store SG&A expenses as % of same-store gross profit 65.5 % 67.4 % (1.9) % (2.8) %

Selling, general, and administrative expenses (“SG&A”) increased from 2021 to 2022 due to a $121.0 million, or 8.6%, increase in same-store SG&A, coupled with an $80.4 million increase from net acquisitions. Excluding $30.9 million of favorable foreign currency fluctuations, same-store SG&A increased 10.8%. The increase in SG&A expenses is

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primarily due to the inflationary effect on our personnel, rent, and other expenses. SG&A as a percentage of gross profit was 65.4%, a decrease of 210 basis points compared to 67.5% in the prior year. SG&A expenses as a percentage of total revenue was 11.6% and 11.1% in the six months ended June 30, 2022 and 2021, respectively. We believe the decrease in SG&A as a percentage of gross profit is comprised of increased gross profit across our various business lines.

~~Depreciation~~

~~(In millions)~~

2022 vs. 2021
2022 2021 Change % Change
Depreciation $ 63.6 $ 59.5 4.1 6.9 %

~~Depreciation increased from 2021 to 2022 due to a $4.1 million increase from net dealership acquisitions.~~

~~Floor Plan Interest Expense~~

~~(In millions)~~

2022 vs. 2021
2022 2021 Change % Change
Floor plan interest expense $ 16.5 $ 17.4 (0.9) (5.2) %

Floor plan interest expense decreased from 2021 to 2022 due to a $1.6 million, or 9.4%, decrease in same-store floor plan interest expense, partially offset by a $0.7 million increase from net acquisitions. We believe the overall decrease is primarily due to decreases in amounts outstanding under floor plan arrangements as new vehicle inventory declined due to a lower supply of new vehicles available for sale, which has been caused by supply chain issues discussed above, partially offset by increases in applicable rates.

~~Other Interest Expense~~

~~(In millions)~~

2022 vs. 2021
2022 2021 Change % Change
Other interest expense $ 33.5 $ 37.6 (4.1) (10.9) %

~~Other interest expense decreased from 2021 to 2022 primarily due to the decrease in outstanding revolver borrowings under the U.S. and~~ U.K. ~~credit agreements, partially offset by increases in applicable rates.~~

~~Equity in Earnings of Affiliates~~

~~(In millions)~~

2022 vs. 2021
2022 2021 Change % Change
Equity in earnings of affiliates $ 257.6 $ 161.0 96.6 60.0 %

Equity in earnings of affiliates increased from 2021 to 2022 due to a $98.9 million, or 63.3%, increase in earnings from our investment in PTS, coupled with the increase in earnings from our retail automotive joint ventures which were partially offset by the decrease in equity earnings from our previous joint venture in Japan as we no longer include the results of this business in this line item due to our acquiring 100% of this joint venture. We believe the increase in our PTS equity earnings is due to strong demand and profitability for commercial rental trucks and full-service leasing, as well as used vehicle sales.

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~~Income Taxes~~

~~(In millions)~~

2022 vs. 2021
2022 2021 Change % Change
Income taxes $ 251.8 $ 187.9 63.9 34.0 %

~~Income taxes increased from 2021 to 2022 primarily due to a $285.9 million increase in our pre-tax income compared to the prior year. Our effective~~corporate tax rate was 25.3% during the six months ended June 30, 2022, compared to 26.4% during the six months ended June 30, 2021, primarily due to fluctuations in our geographic pre-tax income mix, coupled with the increase in net income tax expense in the prior year of $8.8 million related to U.K. tax legislation changes.rate.

Liquidity and Capital Resources

Our cash requirements are primarily for working capital, inventory financing, the acquisition of new businesses, the improvement and expansion of existing facilities, the purchase or construction of new facilities, debt service and repayments, dividends, and potential repurchases of our outstanding securities under the program discussed below. Historically, these cash requirements have been met through cash flow from operations, borrowings under our credit agreements and floor plan arrangements, the issuance of debt securities, sale-leaseback transactions, real estate financings, and dividends and distributions from joint venture investments.

We have historically expanded our operations through organic growth and the acquisition of dealerships and other businesses. We believe that cash flow from operations, dividends and distributions from PTS and our joint venture investments, and our existing capital resources, including the liquidity provided by our credit agreements and floor plan financing arrangements, will be sufficient to fund our existing operations and current commitments for at least the next twelve months. In the event that economic conditions are more severely impacted than we expect due to geo-political conditions, the COVID-19 pandemic or vehicle shortages resulting from supply chain difficulties, we pursue significant acquisitions or other expansion opportunities, pursue significant repurchases of our outstanding securities, or refinance or repay existing debt, we may need to raise additional capital either through the public or private issuance of equity or debt securities or through additional borrowings, which sources of funds may not necessarily be available on terms acceptable to us, if at all. In addition, our liquidity could be negatively impacted in the event we fail to comply with the covenants under our various financing and operating agreements or in the event our floor plan financing is withdrawn. Future events, including acquisitions, divestitures, new or revised operating lease agreements, borrowings or repayments under our credit agreements and our floor plan arrangements, raising capital, and purchases or refinancing of our securities, may also impact our liquidity.

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We expect that scheduled payments of our debt instruments will be funded through cash flows from operations or borrowings under our credit agreements. In the case of payments upon the maturity or termination dates of our debt instruments, we currently expect to be able to refinance such instruments in the normal course of business or otherwise fund them from cash flows from operations or borrowings under our credit agreements. Refer to the disclosures provided in Part I, Item 1, Note 9 of the Notes to our Consolidated Financial Statements set forth below for a detailed description of our long-term debt obligations and scheduled interest payments.

Floor plan notes payable are revolving inventory-secured financing arrangements. Refer to the disclosures provided in Part I, Item 1, Note 7 of the Notes to our Consolidated Financial Statements for a detailed description of financing for the vehicles we purchase, including discussion of our floor plan and other revolving arrangements.

Refer to the disclosures provided in Part I, Item 1, Note 10 of the Notes to our Consolidated Financial Statements for a description of our off-balance sheet arrangements which includes a repurchase commitment related to our floor plan credit agreement with ~~Mercedes Benz~~Mercedes-Benz Financial Services Australia and ~~Mercedes Benz~~Mercedes-Benz Financial Services New Zealand.

As of ~~June 30, 2022,~~March 31, 2023, we had ~~$154.9~~$100.6 million of cash available to fund our operations and capital commitments. In addition, we had $800.0 million, ~~£162.0~~£200.0 million ($~~197.3~~246.7 million), AU ~~$40.0~~$35.8 million ($~~27.6~~23.9 million), and ~~$142.8~~$43.0 million available for borrowing under our U.S. credit agreement, U.K. credit agreement, ~~Australian working capital loan~~Australia credit agreement, and the revolving mortgage facility through Toyota Motor Credit Corporation, respectively.

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Securities Repurchases

From time to time, our Board of Directors has authorized securities repurchase programs pursuant to which we may, as market conditions warrant, purchase our outstanding common stock or debt on the open market, in privately negotiated transactions, via a tender offer, through a pre-arranged trading plan, pursuant to the terms of an accelerated share repurchase program, or by other means. We have historically funded any such repurchases using cash flow from operations, borrowings under our U.S. credit agreement, and borrowings under our U.S. floor plan arrangements. The decision to make repurchases will be based on factors such as general economic and industry conditions, the market price of the relevant security versus our view of its intrinsic value, the potential impact of such repurchases on our capital structure, and our consideration of any alternative uses of our capital, such as for acquisitions, the repayment of our existing indebtedness, and strategic investments in our current businesses, in addition to any then-existing limits imposed by our finance agreements and securities trading policy. In ~~May 2022, our Board of Directors authorized the repurchase of $250 million worth of our securities, of which $167.9 million remained outstanding as of June 30, 2022. In July 2022,~~February 2023, our Board of Directors increased the authority delegated to management to repurchase our outstanding securities by $250 ~~million. As a result, $330.6~~ million, of which $214.1 million of authority remained outstanding and available for repurchases as of ~~July 26, 2022.~~March 31, 2023. This authority has no expiration. Refer to the disclosures provided in Part I, Item 1, Note 11 of the Notes to our Consolidated Condensed Financial Statements for a summary of shares repurchased during the ~~six~~three months ended ~~June 30, 2022.~~March 31, 2023.

Securities Trading Policy and Rule 10b5-1 Trading Plans

Our securities trading policy applies to all of our directors, officers, and employees and restricts trading in our securities while in possession of material nonpublic information. The policy prohibits our directors, officers, employees, and their designees from engaging in hedging, short sales, and other trading techniques that offset any decrease in market value of our equity securities without the approval of our General Counsel, and no such approvals were granted in the past quarter. Our policy also provides for an approval procedure for corporate management and senior field management prior to any trading activity, requires advance approval of any securities trading plan under SEC Rule 10b5-1, or otherwise, and limits trading during designated “blackout” periods. These management personnel must request pre-approval and affirm they are not in possession of any material non-public information at that time. Approval for any individual trade will only be granted in an open trading window period, and once approved, the recipient has three business days to effect a trade or must reinitiate the pre-approval procedure. Approval of any securities trading plan is also subject to these limits, as well as approval of our General Counsel who will confirm all legal requirements of such plan, including any applicable waiting periods, before implementation of such plan is included. No officers or directors implemented Rule 10b5-1 trading plans in the past quarter.

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Dividends

We paid the following cash dividends on our common stock in ~~2021~~2022 and ~~2022:~~2023:

Per Share Dividends


~~2021~~

~~First Quarter~~	$	~~0.43~~
~~Second Quarter~~	$	~~0.44~~
~~Third Quarter~~	$	~~0.45~~
~~Fourth Quarter~~	$	~~0.46~~


2022

First Quarter	$	0.47
Second Quarter	$	0.50
Third Quarter	$	0.53
Fourth Quarter	$	0.57


2023

First Quarter	$	0.61

~~We also announced a cash dividend of $0.53 per share payable on September 1, 2022 to stockholders of record on August 10, 2022.~~ While future quarterly or other cash dividends will depend upon a variety of factors considered relevant by our Board of Directors, which may include our expectations regarding the severity and duration of the COVID-19 pandemic, vehicle production issues, the rate of inflation, including its impact on vehicle affordability, earnings, cash flow, capital requirements, restrictions relating to any then-existing indebtedness, financial condition, alternative uses of capital, and other factors, we currently expect to continue to pay comparable dividends in the future.

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Long-Term Debt Obligations

As of ~~June 30, 2022,~~March 31, 2023, we had the following long-term debt obligations outstanding:


(In millions)	~~June 30,~~March 31, ~~2022~~2023
U.S. credit agreement — revolving credit line	$	—
U.K. credit agreement — revolving credit line	—
~~U.K. credit agreement — overdraft line of credit~~	—
3.50% senior subordinated notes due 2025	~~545.4~~546.5
3.75% senior subordinated notes due 2029	~~494.7~~495.2


Australia ~~capital loan~~credit agreement	~~23.3~~
~~Australia working capital loan agreement~~	~~6.9~~26.2
Mortgage facilities	~~366.9~~590.9
Other	~~48.8~~42.5
Total long-term debt	$	~~1,486.0~~1,701.3

As of ~~June 30, 2022,~~March 31, 2023, we were in compliance with all covenants under our credit agreements, and we believe we will remain in compliance with such covenants for the next twelve months. Refer to the disclosures provided in Part I, Item 1, Note 9 of the Notes to our Consolidated Condensed Financial Statements for a detailed description of our long-term debt obligations.

Short-Term Borrowings

We have five principal sources of short-term borrowings: the revolving portion of the U.S. credit agreement, the revolving portion of the U.K. credit agreement, our ~~Australian working capital loan~~Australia credit agreement, the revolving mortgage facility through Toyota Motor Credit Corporation, and the floor plan agreements that we utilize to finance our vehicle inventories. We are also able to access availability under the floor plan agreements to fund our cash ~~needs, including payments made relating to our higher interest rate revolving credit agreements.~~needs.

During the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, outstanding revolving commitments varied between $0.0 million and ~~$168.0~~$228.0 million under the U.S. credit agreement, between £0.0 million and £42.0 million ($0.0 million and ~~$51.1~~$51.8 million) under the U.K. credit ~~agreement’s~~agreement's revolving credit line, ~~(excluding the overdraft facility),~~ between AU ~~$0.0~~$30.7 million and AU ~~$15.0~~$61.2 million ($~~0.0~~20.5 million and ~~$10.4~~$40.9 million) under the Australia ~~working capital loan~~credit agreement, and between ~~$0.0~~$109.1 million and ~~$177.8~~$251.8 million under the revolving mortgage facility through Toyota Motor Credit Corporation. The amounts outstanding under our floor plan

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agreements varied based on the timing of the receipt and expenditure of cash in our operations, driven principally by the levels of our vehicle inventories.

~~Interest Rate Swaps~~

The Company periodically uses interest rate swaps to manage interest rate risk associated with the Company’s variable rate floor plan debt. In April 2020, we entered into a five-year interest rate swap agreement pursuant to which the LIBOR portion of $300.0 million of our U.S. floating rate floor plan debt was fixed at 0.5875% This arrangement was in effect through April 2025. However, we terminated this arrangement in November 2021.

PTS Dividends

We hold a 28.9% ownership interest in PTS as noted above. Their partnership agreement requires PTS, subject to applicable law and the terms of its credit agreements, to make quarterly distributions to the partners with respect to each fiscal year by no later than 45 days after the end of each of the first three quarters of the year and by April 15 of the following year. ~~PTS’~~PTS' partnership agreement and certain of its debt agreements allow partner distributions only as long as it is not in default under those agreements and the amount it pays does not exceed 50% of its consolidated net income, unless its debt-to-equity ratio is less than 3.0 to 1,1.0, in which case its distributions may not exceed 80% of its consolidated net income. We receive pro rata cash distributions relating to this investment, typically in April, May, August, and November of each year. ~~During the six months ended June 30,~~In 2022, ~~and 2021,~~ we received ~~$104.9~~$356.6 million ~~and $55.1 million, respectively,~~ of pro rata cash distributions relating to this ~~investment. We~~investment, and we currently expect to continue to receive future distributions from PTS quarterly, subject to its financial performance.

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Sale/Leaseback Arrangements

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 and/or leasehold improvements 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.

Operating Leases

We estimate the total rent obligations under our operating leases, including any extension periods that we are reasonably certain to exercise at our discretion and assuming constant consumer price indices, to be ~~$5.3~~$5.2 billion. As of ~~June 30, 2022,~~March 31, 2023, we were in compliance with all financial covenants under these leases consisting principally of leases for dealership and other properties, and we believe we will remain in compliance with such covenants for the next twelve months. Refer to the disclosures provided in Part I, Item 1, Note 3 and Note 10 of the Notes to our Consolidated Condensed Financial Statements for a description of our operating leases.

Supplemental Guarantor Financial Information

The following is a description of the terms and conditions of the guarantees with respect to senior subordinated notes of Penske Automotive Group, Inc. ~~(“PAG”~~("PAG") as the issuer of the 3.50% Notes and the 3.75% Notes (collectively the ~~“Senior~~"Senior Subordinated ~~Notes”~~Notes").

Each of the Senior Subordinated Notes are unsecured, senior subordinated obligations and are guaranteed on an unsecured senior subordinated basis by our 100% owned U.S. ~~subsidiaries.~~subsidiaries ("Guarantor subsidiaries"). Each of the Senior Subordinated Notes also contain customary negative covenants and events of default. If we experience certain ~~“change~~"change of ~~control”~~control" events specified in their respective indentures, holders of these Senior Subordinated Notes will have the option to require us to purchase for cash all or a portion of their Senior Subordinated Notes at a price equal to 101% of the principal amount of the Senior Subordinated 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 Senior Subordinated Notes at a price equal to 100% of the principal amount of the Senior Subordinated Notes, plus accrued and unpaid interest.

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. Non-wholly owned and foreign subsidiaries of PAG do not guarantee the Senior Subordinated Notes (“("Non-Guarantor ~~Subsidiaries”~~subsidiaries"). The following tables present summarized financial information for PAG and the Guarantor ~~Subsidiaries~~subsidiaries on a combined basis. The financial information of PAG and Guarantor ~~Subsidiaries~~subsidiaries is presented on a combined basis; intercompany balances and transactions between PAG and Guarantor ~~Subsidiaries~~subsidiaries have been eliminated; ~~PAG’s~~PAG's or Guarantor ~~Subsidiaries’~~subsidiaries' amounts due from, amounts due to, and transactions with non-issuer and Non-Guarantor ~~Subsidiaries~~subsidiaries and related parties are disclosed separately.

~~Condensed income statement information:~~

PAG and Guarantor Subsidiaries
Six Months Ended
June 30, 2022 Twelve Months Ended December 31, 2021
Revenues $ 7,771.6 $ 14,605.6
Gross profit 1,519.4 2,731.0
Equity in earnings of affiliates 255.1 366.2
Income from continuing operations 558.6 908.2
Net income 558.6 909.5
Net income attributable to Penske Automotive Group 558.6 909.5

4637

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Condensed income statement information:


	PAG and Guarantor Subsidiaries
	Three Months Ended March 31, 2023		Twelve Months Ended December 31, 2022
Revenues	$	3,937.7	$	16,093.8
Gross profit	729.3		3,003.6
Equity in earnings of affiliates	80.8		490.0

Net income	204.2		1,081.7
Net income attributable to Penske Automotive Group	204.2		1,081.7

Condensed balance sheet information:


		PAG and Guarantor Subsidiaries					PAG and Guarantor Subsidiaries
		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Current assets (1)	Current assets (1)	$	2,340.5	$	2,245.6	Current assets (1)	$	2,542.8	$	2,600.2
Property and equipment, net	Property and equipment, net	1,313.4		1,264.9		Property and equipment, net	1,364.8		1,342.8
Equity method investments	Equity method investments	1,631.7		1,645.6		Equity method investments	1,676.4		1,593.5
Other noncurrent assets	Other noncurrent assets	3,608.5		3,524.0		Other noncurrent assets	3,594.6		3,603.3
Current liabilities	Current liabilities	1,902.9		1,843.9		Current liabilities	2,015.9		2,147.5
Noncurrent liabilities	Noncurrent liabilities	3,885.6		3,858.9		Noncurrent liabilities	4,099.4		3,993.9

__________

(1)Includes ~~$545.3~~$525.1 million and ~~$529.9~~$555.5 million as of ~~June 30, 2022,~~March 31, 2023, and December 31, ~~2021,~~2022, respectively, due from ~~Non-Guarantors.~~Non-Guarantor subsidiaries.

During the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, PAG received ~~$33.0~~$2.2 million from ~~non-guarantor~~Non-Guarantor subsidiaries. During the twelve months ended December 31, ~~2021,~~2022, PAG received ~~$93.5~~$77.9 million from ~~non-guarantor~~Non-Guarantor subsidiaries.

Cash Flows

The following table summarizes the changes in our cash provided by (used in) operating, investing, and financing activities. The major components of these changes are discussed below.

Six Months Ended June 30,
(In millions) 2022 2021
Net cash provided by continuing operating activities $ 879.2 $ 916.7
Net cash used in continuing investing activities (357.0) (331.6)
Net cash used in continuing financing activities (459.0) (470.1)
Net cash provided by discontinued operations — 0.1
Effect of exchange rate changes on cash and cash equivalents (9.0) 0.6
Net change in cash and cash equivalents $ 54.2 $ 115.7


	Three Months Ended March 31,
(In millions)	2023		2022
Net cash provided by operating activities	$	311.2	$	380.6
Net cash used in investing activities	(105.5)		(149.8)
Net cash used in financing activities	(211.8)		(159.1)

Effect of exchange rate changes on cash and cash equivalents	0.2		(2.1)
Net change in cash and cash equivalents	$	(5.9)	$	69.6

Cash Flows from ~~Continuing~~ Operating Activities

Cash flows from ~~continuing~~ operating activities includes net income, as adjusted for non-cash items and the effects of changes in working capital.

We finance substantially all of the commercial vehicles we purchase for distribution, new vehicles for retail sale (however, see Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, "Overview" for a discussion of the agency model of distribution), 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. We retain the right to select which, if any, financing source to utilize in connection with the procurement of vehicle inventories. Many vehicle manufacturers provide vehicle financing for the dealers representing their brands; however, it is not a requirement that we utilize this financing. Historically, our floor plan finance source has been based on aggregate pricing considerations.

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In accordance with generally accepted accounting principles relating to the statement of cash flows, we report all cash flows arising in connection with floor plan notes payable with the manufacturer of a particular new vehicle as an operating activity in our statement of cash flows, and we report all cash flows arising in connection with floor plan notes payable to a party other than the manufacturer of a particular new vehicle, all floor plan notes payable relating to pre-owned vehicles, and all floor plan notes payable related to our commercial vehicles in Australia and New Zealand as a financing activity in our statement of cash flows. Currently, the majority of our non-trade vehicle financing is with other manufacturer captive lenders. 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 believe that changes in aggregate floor plan liabilities are typically linked to changes in vehicle inventory and therefore, are an integral part of understanding changes in our working capital and operating cash flow. As a result, we prepare the following reconciliation to highlight our operating cash flows with all changes in vehicle floor plan being

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classified as an operating activity for informational purposes:


		Six Months Ended June 30,					Three Months Ended March 31,
(In millions)	(In millions)	2022		2021		(In millions)	2023		2022
Net cash from continuing operating activities as reported		$	879.2	$	916.7
Net cash provided by operating activities as reported						Net cash provided by operating activities as reported	$	311.2	$	380.6
Floor plan notes payable — non-trade as reported	Floor plan notes payable — non-trade as reported	(115.6)		(181.9)		Floor plan notes payable — non-trade as reported	(133.1)		6.5
Net cash from continuing operating activities including all floor plan notes payable		$	763.6	$	734.8
Net cash provided by operating activities including all floor plan notes payable						Net cash provided by operating activities including all floor plan notes payable	$	178.1	$	387.1

Cash Flows from ~~Continuing~~ Investing Activities

Cash flows from ~~continuing~~ investing activities consist primarily of cash used for capital expenditures, ~~proceeds from the sale of dealerships,~~ proceeds from the sale of property and equipment, and net expenditures for acquisitions and other investments. Capital expenditures were ~~$138.1~~$102.4 million and ~~$90.8~~$56.2 million during the ~~six~~three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively. Capital expenditures relate primarily to improvements to our existing dealership facilities, the construction of new facilities, the acquisition of the property or buildings associated with existing leased facilities, and the acquisition of land for future development. We currently expect to finance our capital expenditures with operating cash flows or borrowings under our credit agreements. We had no proceeds from the sale of ~~dealerships~~property and equipment during the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, compared to ~~$4.3~~$1.8 million during the ~~six~~three months ended ~~June 30, 2021. Proceeds from the sale of property and equipment were $11.4 million and $31.7 million during the six months ended June 30, 2022 and 2021, respectively. Cash~~2022. We had no cash used in acquisitions and other investments, net of cash acquired, ~~was $225.9 million and 278.0~~during the three months ended March 31, 2023, compared to $93.6 million during the ~~six~~three months ended ~~June 30,~~March 31, 2022, ~~and 2021, respectively,~~ and included cash used to repay ~~sellers’~~sellers' floor plan liabilities in such business acquisitions of ~~$51.3 million and $24.3 million, respectively.~~$16.5 million.

Cash Flows from ~~Continuing~~ Financing Activities

Cash flows from ~~continuing~~ financing activities include net borrowings or repayments of long-term debt, net repayments and borrowings ~~or repayments~~ of floor plan notes payable non-trade, repurchases of common stock, dividends, and payments for debt issuance costs.

We had net borrowings of ~~long-term~~ debt of ~~$23.8~~$75.8 million and net repayments of ~~long-term~~ debt of ~~$171.1~~$9.9 million during the ~~six~~three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively. We had net repayments of floor plan notes payable non-trade of ~~$115.6~~$133.1 million and ~~$181.9~~net borrowings of floor plan notes payable non-trade of $6.5 million during the ~~six~~three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively. We repurchased ~~2.7~~0.9 million and ~~0.3~~1.2 million shares of common stock under our securities repurchase program for ~~$275.4~~$110.2 million and ~~$28.1~~$119.2 million during the ~~six~~three months ended ~~June 30,~~March 31, 2023 and 2022, and 2021, respectively. We acquired 0.15 million and 0.15 million shares from employees in connection with a net share settlement feature of employee equity awards for $17.2 million and $12.8 million during the six months ended June 30, 2022 and 2021, respectively. We also paid cash dividends to our stockholders of ~~$74.4~~$42.3 million and ~~$70.2~~$36.4 million during the ~~six~~three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively. We made payments of ~~$0.1~~$2.0 million and ~~$6.1~~$0.1 million for debt issuance costs during the ~~six~~three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively.

Related Party Transactions

Stockholders Agreement

Several of our directors and officers are affiliated with Penske Corporation or related entities. Roger Penske, our Chair of the Board and Chief Executive Officer, is also Chair of the Board and Chief Executive Officer of Penske Corporation and through entities affiliated with Penske Corporation is our largest stockholder owning approximately ~~47%~~51% of our outstanding common stock. Mitsui & Co., Ltd. and Mitsui & Co. (USA), Inc. (collectively, ~~“Mitsui”~~"Mitsui") own approximately ~~18%~~19% of our outstanding common stock. Mitsui, Penske Corporation and ~~certain other affiliates of~~Penske Automotive Holdings Corp. (together with Penske Corporation, the "Penske companies") are parties to a stockholders agreement ~~pursuant~~which expires March 26, 2030.

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Pursuant to ~~which~~the stockholders agreement, the Penske ~~affiliated~~ companies agreed to vote their shares for ~~up to~~ two directors who are representatives of ~~Mitsui. In turn,~~Mitsui as long as Mitsui owns in excess of 20% of our outstanding common stock, and for one director as long as Mitsui owns in excess of 10% of our outstanding common stock. Mitsui agreed to vote ~~their~~its shares for up to fourteen directors voted for by the Penske ~~affiliated~~ companies. ~~This agreement terminates in March 2030, upon the mutual consent of the parties, or when either party no longer owns any of our common stock.~~

Other Related Party Interests and Transactions

Robert Kurnick, Jr., our President and a director, is also the Vice Chair and a director of Penske Corporation. Bud Denker, our Executive Vice President, Human Resources, is also the President of Penske Corporation. Greg Penske, ~~one~~the Vice Chair of

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~~our directors,~~Directors, is the son of our ~~chair~~Chair and is also a director of Penske Corporation. Michael Eisenson, one of our directors, is also a director of Penske Corporation. Kota Odagiri, one of our directors, is also an employee of Mitsui & Co.

We sometimes pay to and/or receive fees from Penske Corporation, its subsidiaries, and its affiliates for services rendered in the ordinary course of business or to reimburse payments made to third parties on each ~~other’s~~other's behalf. These transactions are reviewed periodically by our Audit Committee and reflect the ~~provider’s~~provider's cost or an amount mutually agreed upon by both parties.

We own a 28.9% interest in PTS. PTS, discussed previously, is owned 41.1% by Penske Corporation, 28.9% by us, and 30.0% by Mitsui. The PTS partnership agreement, among other things, provides us with specified partner distribution and governance rights and restricts our ability to transfer our interest. The partnership previously had a six-member advisory committee, and we were entitled to appoint one of the representatives serving on the advisory committee. In February 2023, we amended the PTS partnership agreement principally to augment PTS' governance to replace the advisory committee with an eleven-member Advisory Board. We retain the right to appoint one Advisory Board member and appointed Robert H. Kurnick, Jr., our President. Lisa Davis and Michael Eisenson, our directors, were also appointed to the expanded Advisory Board. The amended PTS partnership agreement also authorizes the Advisory Board to appoint committees with such powers and authority of the Advisory Board granted to the committee by the Advisory Board. We are ~~also party~~entitled to designate a ~~joint venture~~non-voting observer to all committees as long as we retain the right to appoint an Advisory Board member. We continue to have the right to pro rata quarterly distributions equal to at least 50% of PTS' consolidated net income, as well as specified minority rights which require our and/or Mitsui's consent for certain actions taken by PTS as specified in ~~Penske Commercial Leasing Australia (28%) with PTS. Both of these investments are accounted for under~~ the ~~equity method.~~PTS partnership agreement.

~~Automotive~~ Joint ~~Ventures~~Venture Relationships

From time to time, we enter into joint venture relationships in the ordinary course of business, pursuant to which we own and operate automotive dealerships together with other investors. We may also provide these dealerships with working capital and other debt financing at costs that are based on our ~~prevailing~~incremental borrowing rate. As of ~~June 30, 2022,~~March 31, 2023, our automotive joint venture relationships were as follows:

Location

Dealerships

Ownership Interest

Fairfield, Connecticut

Audi, Mercedes-Benz, Sprinter, Porsche

80.00% (A)

Greenwich, Connecticut

Mercedes-Benz

80.00% (A)

Northern Italy

BMW, MINI, Maserati, Porsche, Audi, Jaguar, Land Rover, Volvo, Mercedes-Benz, smart, Lamborghini

84.10% (A)

Frankfurt, Germany

Lexus, Toyota, Volkswagen

50.00% (B)

Barcelona, Spain

BMW, MINI

50.00% (B)

~~__________~~

~~(A)Entity is consolidated in our financial statements.~~

~~(B)~~__________________(A) Entity is consolidated in our financial statements.(B) Entity is accounted for using the equity method of accounting.

Additionally, we are party to non-automotive joint ventures representing our investments in PTS (28.9%) and Penske Commercial Leasing Australia (28%) that are accounted for under the equity method.

Cyclicality

Unit sales of motor vehicles, particularly new vehicles, have been cyclical historically, fluctuating with general economic cycles. During economic downturns, the automotive and truck retailing industries tend to experience periods of decline and recession similar to those experienced by the general economy. We believe that these industries are influenced

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by general economic conditions and particularly, by consumer confidence, the level of personal discretionary spending, the rate of inflation, including its impact on vehicle affordability, fuel prices, interest rates, and credit availability.

Our business is dependent on a number of factors, including general economic conditions, the availability of vehicle inventory, fuel prices, the rate of inflation, including its impact on vehicle affordability, interest rate fluctuations, credit availability, labor availability, environmental and other government regulations, and customer business cycles. U.S. light vehicle sales have ranged from a low of 10.4 million units in 2009 to a high of 17.5 million units in 2016. Unit sales of new commercial vehicles have historically been subject to substantial cyclical variation based on these general economic conditions. According to data published by ACT Research, in recent years, total U.S. retail sales of new Class 8 commercial vehicles have ranged from a low of approximately 97,000 in 2009 to a high of approximately 334,000 in 2019. Through geographic diversification, concentration on higher margin regular service and parts revenues, and diversification of our customer base, we have attempted to reduce the negative impact of adverse general economic conditions or cyclical trends affecting any one industry or geographic area on our earnings.

Seasonality

Retail Automotive Dealership. Our business is modestly seasonal overall. Our U.S. operations generally experience higher volumes of vehicle sales in the second and third quarters of each year due in part to consumer buying trends and the introduction of new vehicle models. Also, vehicle demand, and to a lesser extent demand for service and parts, is generally lower during the winter months than in other seasons, particularly in regions of the U.S. where dealerships may be subject

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to severe winters. Our U.K. operations generally experience higher volumes of new vehicle sales in the first and third quarters of each year, due primarily to new vehicle registration practices in the U.K.

Inflation

Many of ~~our market countries~~the markets in which we operate are experiencing a high ~~rate~~rates of inflation. Inflation affects the price of vehicles, the price of parts, the rate of pay of our employees, consumer credit availability, and consumer demand. ~~Used~~During 2022, used vehicle prices in particular ~~have~~ experienced ~~a higher rate~~periods of ~~inflation recently, and continued higher~~high rates of inflation. Higher rates of inflation may adversely affect consumer demand and increase our costs, which may materially and adversely affect us.

Forward-Looking Statements

Certain statements and information set forth herein, as well as other written or oral statements made from time to time by us or by our authorized officers on our behalf, constitute ~~“forward-looking statements”~~"forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Words such as ~~“anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “goal,” “plan,” “seek,” “project,” “continue,” “will,” “would,”~~"anticipate," "believe," "estimate," "expect," "intend," "may," "goal," "plan," "seek," "project," "continue," "will," "would," and variations of such words and similar expressions are intended to identify such forward-looking statements. We intend for our forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we set forth this statement in order to comply with such safe harbor provisions. You should note that our forward-looking statements speak only as of the date of this report or when made, and we undertake no duty or obligation to update or revise our forward-looking statements, whether as a result of new information, future events, or otherwise. Forward-looking statements include, without limitation, statements with respect to:

•~~our expectations regarding~~ the ~~COVID-19 pandemic~~impact of macro-economic and geo-political conditions and events, including their impact on new and used vehicle sales, availability of consumer credit, changes in consumer demand, consumer confidence levels, fuel prices, the ~~resolution~~rate of ~~vehicle production issues;~~inflation, personal discretionary spending levels, consumer credit availability, interest rates, and unemployment rates;

•our future financial and operating performance;

•future dealership openings, acquisitions, and dispositions;

•future potential capital expenditures and securities repurchases;

•our ability to realize cost savings and synergies;

•our ability to respond to economic cycles;

•trends and sales levels in the automotive retail industry, commercial vehicles industries, and in the general economy in the various countries in which we operate;

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•our expectations regarding the COVID-19 pandemic and the resolution of vehicle production issues;

•the rate of adoption of electric vehicles and its effect on our business;

•our ability to access the remaining availability under our credit agreements;

•our liquidity;

•performance of joint ventures, including PTS;

•future foreign currency exchange rates and geopolitical events;

•the outcome of various legal proceedings;

•results of self-insurance plans;

•trends affecting the automotive or trucking industries generally, such as changes to an agency model of distribution in the U.K. and other European countries, and our future financial condition or results of operations; and

•our business strategy.

Forward-looking statements involve known and unknown risks and uncertainties and are not assurances of future performance. Actual results may differ materially from anticipated results due to a variety of factors, including the factors identified in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, ~~2021, Part II, Item 1A.~~ ~~Risk Factors~~ ~~in our Quarterly Report on Form 10-Q for the quarter ended March 31,~~ 2022, and our other periodic reports filed with the Securities and Exchange Commission. Important factors that could cause actual results to

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differ materially from our expectations include the following:

•our business and the automotive retail and commercial vehicles industries in general are susceptible to adverse economic and geo-political conditions, including changes in interest rates, foreign currency exchange rates, customer demand, customer confidence, the rate of inflation, including its impact on vehicle affordability, fuel prices, unemployment rates and credit availability;

•we depend on the success, popularity and availability of the brands we sell, and adverse conditions affecting one or more of these vehicle manufacturers, including the adverse impact on the vehicle and parts supply chain due to natural disasters, the shortage of microchips or other components, the COVID-19 pandemic, the war in Ukraine, challenges in sourcing labor, or other disruptions that interrupt the supply of vehicles and parts to us may negatively impact our revenues and profitability;

•our business and the automotive retail and commercial vehicles industries in general are susceptible to adverse economic and geo-political conditions, including changes in interest rates, foreign currency exchange rates, customer demand, customer confidence, the rate of inflation, fuel prices, unemployment rates and credit availability;

•~~increased tariffs, import product restrictions, and foreign trade risks that may impair our ability to sell foreign vehicles profitably;~~

•the number of new and used vehicles sold in our markets, which impacts our ability to generate new and used vehicle gross ~~profit;~~profit and future service and parts operations;

•the effect on our businesses of the changing retail environment due to certain manufacturers selling direct to consumers outside the franchise system, changes to an agency model of distribution in the ~~U.K~~U.K. and ~~Europe~~other European countries which will ~~negatively impact~~reduce reported revenues, reduce SG&A ~~costs,~~expenses, and reduce floor plan interest expense (although other impacts to our results of operations remain uncertain), and the growing number of electric vehicles;

•the effect on our businesses of ~~the new~~ mobility technologies such as shared vehicle services, such as Uber and Lyft, and the eventual availability of driverless vehicles;

•vehicle manufacturers exercise significant control over our operations, and we depend on them and the continuation of our franchise and distribution agreements in order to operate our business;

•we are subject to the risk that a substantial number of our new or used inventory may be unavailable due to recall or other reasons;

•the success of our commercial vehicle distribution operations and engine and power systems distribution operations depends upon continued availability of the vehicles, engines, power systems, and other parts we distribute, demand for those vehicles, engines, power systems, and parts and general economic conditions in those markets;

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•a restructuring of any significant vehicle manufacturer or supplier;

•our operations may be affected by severe weather or other periodic business interruptions;

•with respect to PTS, changes in the financial health of its customers, labor strikes or work stoppages by its employees, a reduction in PTS' asset utilization rates, continued availability from truck manufacturers and suppliers of vehicles and parts for its fleet, changes in values of used trucks which affects PTS' profitability on truck sales, compliance costs in regard to its trucking fleet and truck drivers, its ability to retain qualified drivers and technicians, risks associated with its participation in multi-employer pension plans, conditions in the capital markets to assure PTS' continued availability of capital to purchase trucks, the effect of changes in lease accounting rules on PTS customers' purchase/lease decisions, industry competition, new or enhanced regulatory requirements or vehicle mandates, changes in consumer sentiment regarding the transportation industry, and vulnerabilities with respect to its centralized information systems, each of which could impact distributions to us;

•we have substantial risk of loss not covered by insurance;

•we may not be able to satisfy our capital requirements for acquisitions, facility renovation projects, financing the purchase of our inventory, or refinancing of our debt when it becomes due;

•our level of indebtedness and cash required for lease obligations may limit our ability to obtain financing generally and may require that a significant portion of our cash flow be used for debt service;

•non-compliance with the financial ratios and other covenants under our credit agreements and operating leases;

•higher interest rates may significantly increase our variable rate interest costs and because many customers finance their vehicle purchases, adversely impact vehicle affordability, and decrease vehicle sales;

•our operations outside of the U.S. subject our profitability to fluctuations relating to changes in foreign currency values;

•with respect to PTS, changes in the financial health of its customers, labor strikes or work stoppages by its employees, a reduction in PTS’ asset utilization rates, continued availability from truck manufacturers and suppliers of vehicles and parts for its fleet, changes in values of used trucks which affects PTS’ profitability on

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truck sales, compliance costs in regard to its trucking fleet and truck drivers, its ability to retain qualified drivers and technicians, risks associated with its participation in multi-employer pension plans, conditions in the capital markets to assure PTS’ continued availability of capital to purchase trucks, the effect of changes in lease accounting rules on PTS customers’ purchase/lease decisions, and industry competition, each of which could impact distributions to us;

•we are dependent on continued security and availability of our information technology systems, which systems are increasingly threatened by ransomware and other ~~cyberattacks,~~cyber-attacks, and we may be subject to significant litigation, fines, penalties, and other costs under applicable privacy laws and regulations if we do not maintain our confidential customer and employee information properly;

•if we lose key personnel, especially our Chief Executive Officer, or are unable to attract additional qualified personnel;

•new or enhanced regulations in both our domestic and international markets relating to automobile dealerships and vehicle sales, including those enacted in certain European countries, Washington, California, Massachusetts, and New York banning the sale of new vehicles with gasoline engines (with regulations in Europe ~~and Washington starting~~proposed to start as early as ~~2030)~~2025, and California requiring 35% of all new consumer vehicles to be emission free in 2026, 68% to be emission free by 2030, and 100% to be emission free by 2035, with some allowances for plug-in hybrid vehicles);

•new or enhanced regulations, including those related to emissions standards, or changes in consumer sentiment relating to commercial truck sales that may hinder our or PTS' ability to maintain, acquire, sell, or operate trucks;

•increased tariffs, import product restrictions, and foreign trade risks that may impair our ability to sell foreign vehicles profitably;

•changes in tax, financial or regulatory rules, or ~~requirements;~~requirements, including new regulations proposed by the Federal Trade Commission for automotive dealers that would change industry-accepted practices with regard to sales and advertising, require an extensive series of oral and written disclosures to consumers in regard to the sale price of vehicles, credit terms, and voluntary protection products, mandate the posting of certain pricing and other information on dealer websites, and impose burdensome recordkeeping requirements that, if adopted as proposed, may lead to additional transaction times for the sale of vehicles, complicate the transaction process, and decrease customer satisfaction and enhance compliance risk, among other effects;

•we could be subject to legal and administrative proceedings which, if the outcomes are adverse to us, could have a material adverse effect on our business;

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•if state dealer laws in the U.S. are repealed or weakened or new manufacturers such as those selling electric vehicles are able to conduct significant vehicle sales outside of the franchised automotive system, our automotive dealerships may be subject to increased competition and may be more susceptible to termination, non-renewal, or renegotiation of their franchise agreements;

•we are subject to a wide range of environmental laws and regulations governing the use, generation, and disposal of materials used in our ordinary course of operations, and we face potentially significant costs relating to claims, penalties, and remediation efforts in the event of non-compliance with existing and future laws and regulations which may become more stringent in the face of climate change;

•some of our directors and officers may have conflicts of interest with respect to certain related party transactions and other business interests; and

•shares of our common stock eligible for future sale may cause the market price of our common stock to drop significantly, even if our business is doing well.

We urge you to carefully consider these risk factors and further information identified in our Annual Report on Form 10-K for the year ended December 31, ~~2021, our Quarterly Report on Form 10-Q for the quarter ended March 31,~~ 2022, and our other periodic reports filed with the Securities and Exchange Commission in evaluating all forward-looking statements regarding our business. Readers of this report are cautioned not to place undue reliance on the forward-looking statements contained in this report. All forward-looking statements attributable to us are qualified in their entirety by this cautionary statement. Except to the extent required by the federal securities laws and the Securities and Exchange ~~Commission’s~~Commission's rules and regulations, we have no intention or obligation to update publicly any forward-looking statements whether as a result of new information, future events, or otherwise.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rates. We are exposed to market risk from changes in the interest rates on a significant portion of our outstanding debt. Outstanding revolving balances under our credit agreements bear interest at variable rates based on a margin over ~~defined~~SOFR, LIBOR, SONIA, the Bank of England Base Rate, the Tokyo Interbank Offered Rate, or the Australian Bank Bill Swap Rate. Based on an average of the aggregate amounts outstanding under these facilities during the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, a 100-basis-point change in interest rates would result in an approximate ~~$0.9~~$3.8 million change to our annual other interest expense.

Similarly, amounts outstanding under floor plan financing arrangements bear interest at a variable rate based on a margin over the prime rate, ~~defined~~SOFR, LIBOR, SONIA, the Bank of England Base Rate, the Finance House Base Rate, the Euro Interbank Offered Rate, the Canadian Prime Rate, the Australian Bank Bill Swap Rate, or the New Zealand Bank Bill Benchmark Rate. Based on an average of the aggregate amounts outstanding under our floor plan financing arrangements subject to variable interest payments during the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, a 100-basis-point change in interest rates would result in an approximate ~~$19.4~~$27.7 million change to our annual floor plan interest expense.

We evaluate our exposure to interest rate fluctuations and follow established policies and procedures to implement strategies designed to manage the amount of variable rate indebtedness outstanding at any point in time in an effort to

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mitigate the effect of interest rate fluctuations on our earnings and cash flows. These policies include:

•the maintenance of our overall debt portfolio with fixed and variable rate components;

•the use of authorized derivative instruments;

•the prohibition of using derivatives for trading or other speculative purposes; and

•the prohibition of highly leveraged derivatives, derivatives which we are unable to reliably value, or derivatives which we are unable to obtain a market quotation.

Interest rate fluctuations affect the fair market value of our fixed rate debt, including our swaps, mortgages, and certain seller financed promissory notes but with respect to such fixed rate debt instruments, do not impact our earnings or cash flows.

Foreign Currency Exchange Rates. As of ~~June 30, 2022,~~March 31, 2023, we had consolidated operations in the U.K., Germany, Italy, Japan, Canada, Australia, and New Zealand. In each of these markets, the local currency is the functional currency. In the event we change our intent with respect to the investment in any of our international operations, we would expect to implement strategies designed to manage those risks in an effort to mitigate the effect of foreign currency fluctuations on

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our earnings and cash flows. A ten percent change in average exchange rates versus the U.S. Dollar would have resulted in an approximate ~~$561.9~~$321.4 million change to our revenues for the ~~six~~three months ended ~~June 30, 2022.~~March 31, 2023.

We purchase certain of our new vehicles, parts, and other products from non-U.S. manufacturers. Although we purchase the majority of our inventories in the local functional currency, our business is subject to certain risks, including, but not limited to, differing economic conditions, changes in political climate, differing tax structures, changes in tax and tariff rates, other regulations and restrictions, and foreign currency exchange rate volatility, which may influence such ~~manufacturers’~~manufacturers' ability to provide their products at competitive prices in the local jurisdictions. Our future results could be materially and adversely impacted by changes in these or other factors.

Item 4. Controls and Procedures

Under the supervision and with the participation of our management, including the principal executive and financial officers, we conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the ~~“Exchange Act”~~"Exchange Act")) as of the end of the period covered by this report. Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports we file under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the ~~SEC’s~~SEC's rules and forms and that such information is accumulated and communicated to management, including our principal executive and financial officers, to allow timely discussions regarding required disclosure.

Based upon this evaluation, our principal executive and financial officers concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report. In addition, we maintain internal controls designed to provide us with the information required for accounting and financial reporting purposes. There were no changes in our internal control over financial reporting that occurred during the most recent quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

We are involved in litigation which may relate to claims brought by governmental authorities, customers, vendors, or employees, including class action claims and purported class action claims. We are not a party to any legal proceedings, including class action lawsuits, that individually or in the aggregate are reasonably expected to have a material effect on us. 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.

Item 1A. Risk Factors

In addition to the information set forth in this Form 10-Q, you should carefully consider the risk factors discussed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022, along with our other periodic reports filed with the Securities and Exchange Commission, which could materially affect our business, financial condition, or future results. The following disclosure further updates the risk factors included in our 2022 Annual Report on Form 10-K:

Regulatory Issues. We are subject to a wide variety of regulatory activities and oversight, including:

Vehicle requirements. Federal and state governments and regulators in both our domestic and international markets have increasingly placed restrictions and limitations on the vehicles sold in the market in an effort to combat perceived negative environmental effects. For example, in the U.S., automotive manufacturers are subject to federally mandated corporate average fuel economy standards, which will increase substantially through 2026. Moreover, the U.S. Environmental Protection Agency (EPA) recently proposed new requirements for 2027-2032 which are significantly more restrictive than existing requirements which are designed to incent an increased adoption of electric vehicles. Representatives of the U.K. government have proposed a ban on the sale of gasoline engines in new cars and new vans that would take effect as early as 2030 and a ban on the sale of gasoline hybrid engines in new cars and new vans as early as 2035. The European Parliament recently approved a law requiring most automakers to reduce the emissions of new cars sold by 55% in 2030 and achieve a zero carbon-emission standard by 2035, effectively banning the sale of new gasoline and diesel cars and vans by 2035. Similar legislation has been announced in Washington, California, Massachusetts, and New York, which would ban the sale of new vehicles with gasoline-only engines in cars in 2035. The California legislation requires 35% of all new vehicles sold to meet a zero emissions standard by 2026 (with certain allowances for hybrid gas/electric vehicles), which percentage requirement increases until 2035, after which 100% of new vehicles sold must comply. Significant increases in fuel economy requirements and new restrictions on emissions on vehicles and fuels could adversely affect prices of and demand for the vehicles that we sell, which could materially adversely affect us.

Commercial trucks are subject to similar regulatory risks related to emissions standards and other regulatory requirements. The EPA has also recently proposed to revise existing standards to reduce greenhouse gas emissions from heavy-duty vehicles in model year 2027 and set new, more stringent standards for model years 2028 through 2032. PTG sells new and used heavy- and medium-duty commercial trucks, parts and service, and offers collision repair services. PTS, with its broad product offering including full-service truck leasing, contract maintenance, and truck rental, along with logistic services, is one of the largest purchasers of commercial trucks in North America. Should future regulations or consumer sentiment hinder our or PTS' ability to maintain, acquire, sell, or operate trucks, we may be adversely affected.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the three months ended ~~June 30, 2022,~~March 31, 2023, we repurchased ~~1,514,667~~890,327 shares of our common stock for ~~$156.2~~$110.2 million, or an average of ~~$103.14~~$123.76 per share, under our securities repurchase program approved by our Board of Directors. ~~During the six months ended June 30, 2022, we repurchased 2,718,116 shares of our outstanding common stock for $275.4 million, or an average of $101.34 per share, under this program.~~ In ~~May 2022,~~February 2023, our Board of Directors ~~authorized the repurchase of~~delegated to management an additional $250 million ~~worth of our securities, of which $167.9 million remained outstanding as of June 30, 2022. In July 2022, our Board of Directors further increased the~~in authority ~~delegated to management~~ to repurchase our outstanding securities, ~~by $250 million. As a result, $330.6~~of which $214.1 million remained outstanding ~~and available for repurchases as~~as of July 26, 2022. During the three months ended June 30, 2022, we acquired 148,440 shares of our common stock for $17.2 million, or an average of $115.97 per share, from employees in connection with a net share settlement feature of employee equity awards.March 31, 2023.

Period Total Number of Shares
Purchased (1) Average Price Paid
per Share Total Number of Shares Purchased as Part of Publicly
Announced Plans or Programs Approximate Dollar Value of Shares that May Yet be Purchased
Under the Plans or Program (in millions)
April 1 to April 30, 2022 767,341 $ 96.80 765,726 $37.1
May 1 to May 31, 2022 303,619 $ 109.15 303,619 $216.9
June 1 to June 30, 2022 592,147 $ 111.49 445,322 $167.9
1,663,107 1,514,667
(1)Includes 148,440 shares acquired from employees in connection with a net share settlement feature of employee equity awards


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Program (in millions)
January 1 to January 31, 2023	609,000	$	116.04	609,000	$3.6
February 1 to February 28, 2023	—	$	—	—	$253.6
March 1 to March 31, 2023	281,327	$	140.47	281,327	$214.1
	890,327			890,327

5447

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Item 6. Exhibits

EXHIBIT INDEX


Exhibit No.						Description

~~10.1~~4.1						~~Penske Automotive Group 401(k) Savings~~Tenth Amendment to the Fifth Amended and ~~Retirement Plan Adoption~~Restated Credit Agreement ~~executed June 24, 2022, effective July 1, 2022~~

~~10.2~~						~~Penske Automotive Group 401(k) Savings~~dated April 20, 2023, among us, Mercedes-Benz Financial Services USA LLC, Daimler Truck Financial Services USA LLC and ~~Retirement Plan executed June 24, 2022, effective July 1, 2022~~

~~10.3~~						~~Penske Automotive Group 401(k) Amendment executed June 24, 2022, effective July 1, 2022~~Toyota Motor Credit Corporation which includes a Conformed Copy of the Fifth Amended and Restated Credit Agreement and all amendments thereto attached as Exhibit A (incorporated by reference to Exhibit 4.1 to our Form 8-K filed on April 21, 2023).

22						List of Guarantor Subsidiaries under the Company’s Senior Subordinated Notes

31.1						Rule 13(a)-14(a)/15(d)-14(a) Certification

31.2						Rule 13(a)-14(a)/15(d)-14(a) Certification

32						Section 1350 Certification

101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH						XBRL Taxonomy Extension Schema

101.CAL						XBRL Taxonomy Extension Calculation Linkbase

101.DEF						XBRL Taxonomy Extension Definition Linkbase

101.LAB						XBRL Taxonomy Extension Label Linkbase

101.PRE						XBRL Taxonomy Extension Presentation Linkbase

104						Cover Page Interactive Data File – The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

5548

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	PENSKE AUTOMOTIVE GROUP, INC.

	By:	/s/ Roger Penske
		Roger Penske
Date: ~~July 28, 2022~~April 27, 2023		Chief Executive Officer

	By:	/s/ Michelle Hulgrave
		Michelle Hulgrave
Date: ~~July 28, 2022~~April 27, 2023		Chief Financial Officer

5649


	Six Months Ended June 30, 2022
	Voting and Non-voting Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Penske Automotive Group Stockholders’ Equity		Non-controlling Interest		Total Equity
	Issued Shares	Amount
	(Unaudited)
	(Dollars in millions)
Balance, December 31, 2021	77,574,172	$	—	$	42.2	$	4,196.6	$	(168.8)	$	4,070.0	$	25.0	$	4,095.0
Penske Transportation Solutions Adoption of ASC 842	—	—		—		(121.6)		—		(121.6)		—		(121.6)
Equity compensation	307,846	—		14.6		—		—		14.6		—		14.6
Repurchases of common stock	(2,866,556)	—		(56.8)		(235.8)		—		(292.6)		—		(292.6)
Dividends	—	—		—		(74.4)		—		(74.4)		—		(74.4)

Distributions to non-controlling interest	—	—		—		—		—		—		(2.7)		(2.7)
Foreign currency translation	—	—		—		—		(147.6)		(147.6)		(1.2)		(148.8)
Other	—	—		—		—		4.5		4.5		—		4.5
Net income	—	—		—		741.9		—		741.9		3.5		745.4
Balance, June 30, 2022	75,015,462	$	—	$	—	$	4,506.7	$	(311.9)	$	4,194.8	$	24.6	$	4,219.4


	Six Months Ended June 30, 2021
	Voting and Non-voting Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Penske Automotive Group Stockholders’ Equity		Non-controlling Interest		Total Equity
	Issued Shares	Amount
	(Unaudited)
	(Dollars in millions)
Balance, December 31, 2020	80,392,662	$	—	$	311.8	$	3,151.3	$	(160.6)	$	3,302.5	$	23.6	$	3,326.1
Equity compensation	433,481	—		13.1		—		—		13.1		—		13.1
Repurchases of common stock	(495,307)	—		(40.9)		—		—		(40.9)		—		(40.9)
Dividends	—	—		—		(70.2)		—		(70.2)		—		(70.2)
Interest rate swaps	—	—		—		—		3.5		3.5		—		3.5
Distributions to non-controlling interest	—	—		—		—		—		—		(1.4)		(1.4)
Foreign currency translation	—	—		—		—		2.2		2.2		(0.3)		1.9
Other	—	—		—		—		7.1		7.1		—		7.1
Net income	—	—		—		521.4		—		521.4		2.1		523.5
Balance, June 30, 2021	80,330,836	$	—	$	284.0	$	3,602.5	$	(147.8)	$	3,738.7	$	24.0	$	3,762.7


	June 30,
	2022		2021
Accounts receivable	$	8.3	$	—
Inventories	71.5		37.0
Other current assets	3.2		0.1
Property and equipment	43.3		62.8
Indefinite-lived intangibles	120.9		184.7
Other noncurrent assets	—		—
Current liabilities	(11.3)		(2.8)
Noncurrent liabilities	(10.0)		(3.8)
Total cash used in acquisitions	$	225.9	$	278.0


	PAG and Guarantor Subsidiaries
	Six Months Ended June 30, 2022		Twelve Months Ended December 31, 2021
Revenues	$	7,771.6	$	14,605.6
Gross profit	1,519.4		2,731.0
Equity in earnings of affiliates	255.1		366.2
Income from continuing operations	558.6		908.2
Net income	558.6		909.5
Net income attributable to Penske Automotive Group	558.6		909.5


Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Program (in millions)
April 1 to April 30, 2022	767,341	$	96.80	765,726	$37.1
May 1 to May 31, 2022	303,619	$	109.15	303,619	$216.9
June 1 to June 30, 2022	592,147	$	111.49	445,322	$167.9
	1,663,107			1,514,667

(1)Includes 148,440 shares acquired from employees in connection with a net share settlement feature of employee equity awards