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2022
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Delaware |
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2555 Telegraph Road |
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June 30, December 31, 2021 2020 (Unaudited) (In millions, except share and per share amounts) ASSETS Cash and cash equivalents $ 165.2 $ 49.5 Accounts receivable, net of allowance for doubtful accounts of $5.3 and $5.5 913.3 806.9 Inventories 2,936.9 3,425.6 Other current assets 126.9 126.8 Total current assets 4,142.3 4,408.8 Property and equipment, net 2,410.0 2,404.4 Operating lease right-of-use assets 2,444.9 2,416.5 Goodwill 2,071.0 1,928.4 Other indefinite-lived intangible assets 605.5 563.4 Equity method investments 1,604.1 1,500.3 Other long-term assets 29.0 25.4 Total assets $ 13,306.8 $ 13,247.2 LIABILITIES AND EQUITY Floor plan notes payable $ 1,383.7 $ 1,780.5 Floor plan notes payable — non-trade 1,182.0 1,363.8 Accounts payable 838.0 675.4 Accrued expenses and other current liabilities 916.8 767.2 Current portion of long-term debt 81.5 87.5 Liabilities held for sale 0.5 0.5 Total current liabilities 4,402.5 4,674.9 Long-term debt 1,436.3 1,602.1 Long-term operating lease liabilities 2,375.5 2,350.3 Deferred tax liabilities 978.0 873.1 Other long-term liabilities 351.8 420.7 Total liabilities 9,544.1 9,921.1 Commitments and contingent liabilities (Note 11) �� Equity Penske Automotive Group stockholders’ equity: Preferred Stock, $0.0001 par value; 100,000 shares authorized; NaN issued and outstanding — — Common Stock, $0.0001 par value, 240,000,000 shares authorized; 80,330,836 shares issued and outstanding at June 30, 2021; 80,392,662 shares issued and outstanding at December 31, 2020 — — Non-voting Common Stock, $0.0001 par value; 7,125,000 shares authorized; NaN issued and outstanding — — Class C Common Stock, $0.0001 par value; 20,000,000 shares authorized; NaN issued and outstanding — — Additional paid-in capital 284.0 311.8 Retained earnings 3,602.5 3,151.3 Accumulated other comprehensive income (loss) (147.8) (160.6) Total Penske Automotive Group stockholders’ equity 3,738.7 3,302.5 Non-controlling interest 24.0 23.6 Total equity 3,762.7 3,326.1 Total liabilities and equity $ 13,306.8 $ 13,247.2 Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 (Unaudited) (In millions, except per share amounts) Revenue: ��� Retail automotive dealership $ 6,197.6 $ 3,153.5 $ 11,404.5 $ 7,570.1 Retail commercial truck dealership 625.3 399.2 1,060.0 890.6 Commercial vehicle distribution 164.6 98.4 296.8 199.5 Total revenues 6,987.5 3,651.1 12,761.3 8,660.2 Cost of sales: Retail automotive dealership 5,157.2 2,687.2 9,564.2 6,425.7 Retail commercial truck dealership 522.6 339.0 877.3 761.6 Commercial vehicle distribution 125.0 72.0 223.9 143.3 Total cost of sales 5,804.8 3,098.2 10,665.4 7,330.6 Gross profit 1,182.7 552.9 2,095.9 1,329.6 Selling, general and administrative expenses 749.8 453.6 1,414.1 1,095.4 Depreciation 30.2 27.9 59.5 56.4 Operating income 402.7 71.4 622.3 177.8 Floor plan interest expense (7.9) (11.7) (17.4) (29.4) Other interest expense (19.7) (28.4) (37.6) (60.1) Debt redemption costs (17.0) — (17.0) — Equity in earnings of affiliates 105.6 29.9 161.0 44.4 Income from continuing operations before income taxes 463.7 61.2 711.3 132.7 Income taxes (123.4) (16.5) (187.9) (36.6) Income from continuing operations 340.3 44.7 523.4 96.1 Income from discontinued operations, net of tax 0.1 0.1 0.1 0.2 Net income 340.4 44.8 523.5 96.3 Less: Income (loss) attributable to non-controlling interests 1.5 (0.3) 2.1 (0.5) Net income attributable to Penske Automotive Group common stockholders $ 338.9 $ 45.1 $ 521.4 $ 96.8 Basic earnings per share attributable to Penske Automotive Group common stockholders: Continuing operations $ 4.20 $ 0.56 $ 6.46 $ 1.20 Discontinued operations — — — — Net income attributable to Penske Automotive Group common stockholders $ 4.20 $ 0.56 $ 6.46 $ 1.20 Shares used in determining basic earnings per share 80.7 80.4 80.6 80.7 Diluted earnings per share attributable to Penske Automotive Group common stockholders: Continuing operations $ 4.20 $ 0.56 $ 6.46 $ 1.20 Discontinued operations — — — — Net income attributable to Penske Automotive Group common stockholders $ 4.20 $ 0.56 $ 6.46 $ 1.20 Shares used in determining diluted earnings per share 80.7 80.5 80.7 80.8 Amounts attributable to Penske Automotive Group common stockholders: Income from continuing operations $ 340.3 $ 44.7 $ 523.4 $ 96.1 Less: Income (loss) attributable to non-controlling interests 1.5 (0.3) 2.1 (0.5) Income from continuing operations, net of tax 338.8 45.0 521.3 96.6 Income from discontinued operations, net of tax ��� 0.1 0.1 0.1 0.2 Net income attributable to Penske Automotive Group common stockholders $ 338.9 $ 45.1 $ 521.4 $ 96.8 Cash dividends per share $ 0.44 $ — $ 0.87 $ 0.42 Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 (Unaudited) (In millions) Net income $ 340.4 $ 44.8 $ 523.5 $ 96.3 Other comprehensive income (loss): Foreign currency translation adjustment 1.8 27.6 1.9 (65.3) Unrealized gain (loss) on interest rate swaps: Unrealized gain (loss) arising during the period, net of tax (provision) benefit of $0.2, $1.5, ($1.1), and $1.5, respectively (0.7) (4.1) 3.0 (4.1) Reclassification adjustment for loss included in floor plan interest expense, net of tax benefit of $0.1, $0.0, $0.2, and $0.0, respectively 0.3 — 0.5 — Unrealized gain (loss) on interest rate swaps, net of tax (0.4) (4.1) 3.5 (4.1) Other adjustments to comprehensive income (loss), net 6.4 1.3 7.1 (2.7) Other comprehensive income (loss), net of tax 7.8 24.8 12.5 (72.1) Comprehensive income (loss) 348.2 69.6 536.0 24.2 Less: Comprehensive income (loss) attributable to non-controlling interests 1.7 (0.2) 1.8 (0.6) Comprehensive income (loss) attributable to Penske Automotive Group common stockholders $ 346.5 $ 69.8 $ 534.2 $ 24.8 INCOME Six Months Ended June 30, 2021 2020 (Unaudited) (In millions) Operating Activities: Net income $ 523.5 $ 96.3 Adjustments to reconcile net income to net cash from continuing operating activities: Depreciation 59.5 56.4 Earnings of equity method investments (134.2) (37.6) Income from discontinued operations, net of tax (0.1) (0.2) Deferred income taxes 100.1 20.8 Debt redemption costs 17.0 — Changes in operating assets and liabilities: Accounts receivable (106.2) 203.9 Inventories 525.1 827.3 Floor plan notes payable (396.9) (452.6) Accounts payable and accrued expenses 315.3 35.5 Other 13.6 34.6 Net cash provided by continuing operating activities 916.7 784.4 Investing Activities: Purchase of equipment and improvements (90.8) (76.8) Proceeds from sale of dealerships 4.3 10.3 Proceeds from sale of equipment and improvements 31.7 19.8 Acquisitions net, including repayment of sellers’ floor plan notes payable of $24.3 and $0, respectively (278.0) — Other 1.2 (1.1) Net cash used in continuing investing activities (331.6) (47.8) Financing Activities: Proceeds from borrowings under U.S. credit agreement revolving credit line 1,087.0 580.0 Repayments under U.S. credit agreement revolving credit line (1,195.0) (625.0) Issuance of 3.75% senior subordinated notes 500.0 — Repayment of 5.50% senior subordinated notes (500.0) — Net repayments of other long-term debt (63.1) (160.8) Net repayments of floor plan notes payable — non-trade (181.9) (309.9) Payments for contingent consideration — (21.1) Repurchases of common stock (28.1) (29.4) Dividends (70.2) (34.2) Payment of debt issuance costs (6.1) — Other (12.7) (4.8) Net cash used in continuing financing activities (470.1) (605.2) Discontinued operations: Net cash provided by discontinued operating activities 0.1 0.1 Net cash provided by discontinued investing activities — — Net cash provided by discontinued financing activities — — Net cash provided by discontinued operations 0.1 0.1 Effect of exchange rate changes on cash and cash equivalents 0.6 (0.3) Net change in cash and cash equivalents 115.7 131.2 Cash and cash equivalents, beginning of period 49.5 28.1 Cash and cash equivalents, end of period $ 165.2 $ 159.3 Supplemental disclosures of cash flow information: Cash paid (received) for: Interest $ 58.3 $ 81.9 Income taxes (14.1) 5.1 See Notes to Consolidated Condensed Financial Statements Three Months Ended June 30, 2021 Accumulated Total Common Stock Additional Other Penske Issued Paid-in Retained Comprehensive Automotive Group Non-controlling Total Shares Amount Capital Earnings Income (Loss) Stockholders’ Equity Interest Equity (Unaudited) (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 Equity compensation (1,514) — 6.5 — — 6.5 — 6.5 Repurchases of common stock (495,307) — (40.9) — — (40.9) — (40.9) Dividends — — — (35.6) — (35.6) — (35.6) Interest rate swaps — — — — (0.4) (0.4) — (0.4) Distributions to non-controlling interest — — — — — — (0.2) (0.2) Foreign currency translation — — — — 1.6 1.6 0.2 1.8 Other — — — — 6.4 6.4 — 6.4 Net income — — — 338.9 — 338.9 1.5 340.4 Balance, June 30, 2021 80,330,836 $ — $ 284.0 $ 3,602.5 $ (147.8) $ 3,738.7 $ 24.0 $ 3,762.7 Three Months Ended June 30, 2020 Accumulated Total Common Stock Additional Other Penske Issued Paid-in Retained Comprehensive Automotive Group Non-controlling Total Shares Amount Capital Earnings Income (Loss) Stockholders’ Equity Interest Equity (Unaudited) (Dollars in millions) Balance, March 31, 2020 80,463,278 $ — $ 295.9 $ 2,693.3 $ (299.5) $ 2,689.7 $ 17.8 $ 2,707.5 Equity compensation 9,724 — 5.2 — — 5.2 — 5.2 Repurchases of common stock (133,093) — (4.8) — — (4.8) — (4.8) Interest rate swaps — — — — (4.1) (4.1) — (4.1) Foreign currency translation — — — — 27.5 27.5 0.1 27.6 Other — — — — 1.3 1.3 0.1 1.4 Net income — — — 45.1 — 45.1 (0.3) 44.8 Balance, June 30, 2020 80,339,909 $ — $ 296.3 $ 2,738.4 $ (274.8) $ 2,759.9 $ 17.7 $ 2,777.6 PENSKE AUTOMOTIVE GROUP, INC. Six Months Ended June 30, 2021 Accumulated Total Common Stock Additional Other Penske Issued Paid-in Retained Comprehensive Automotive Group Non-controlling Total Shares Amount Capital Earnings Income (Loss) Stockholders’ Equity Interest Equity (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 Six Months Ended June 30, 2020 Accumulated Total Common Stock Additional Other Penske Issued Paid-in Retained Comprehensive Automotive Group Non-controlling Total Shares Amount Capital Earnings Income (Loss) Stockholders’ Equity Interest Equity (Unaudited) (Dollars in millions) Balance, December 31, 2019 81,084,751 $ — $ 320.4 $ 2,675.8 $ (202.8) $ 2,793.4 $ 18.2 $ 2,811.6 Equity compensation 278,446 — 10.1 — — 10.1 — 10.1 Repurchases of common stock (1,023,288) — (34.2) — — (34.2) — (34.2) Dividends — — — (34.2) — (34.2) — (34.2) Interest rate swaps — — — — (4.1) (4.1) — (4.1) Foreign currency translation — — — — (65.2) (65.2) (0.1) (65.3) Other — — — — (2.7) (2.7) 0.1 (2.6) Net income — — — 96.8 — 96.8 (0.5) 96.3 Balance, June 30, 2020 80,339,909 $ — $ 296.3 $ 2,738.4 $ (274.8) $ 2,759.9 $ 17.7 $ 2,777.6 Retail Automotive. We In March 2022, we agreed to transition our U.K. Mercedes Benz dealerships to an agency model beginning in 2023. Under an agency model, our U.K. Mercedes Benz dealerships will receive a fee for facilitating the sale by the manufacturer of a new vehicle but will not hold the vehicle in inventory. We Closing of the transaction 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. During the three months ended June 30, 2022, we closed 2 CarShop satellite locations in the U.K. to reduce costs. Retail Commercial Truck Dealership. We operate Premier Truck Group (“PTG”), a heavy- and medium-duty truck dealership group 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. Penske Transportation Solutions. We hold a 28.9% ownership interest in Penske Truck Leasing Co., 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 June 30, 2021 December 31, 2020 Carrying Value Fair Value Carrying Value Fair Value 3.50% senior subordinated notes due 2025 544.0 564.1 543.2 $ 554.6 3.75% senior subordinated notes due 2029 493.9 498.2 — — Mortgage facilities 398.9 406.5 458.1 474.7 Recent Accounting Pronouncements reduced by any noncash consideration representing the fair value of trade-in vehicles, if applicable. Payment is typically due and collected within 30 days subsequent to transfer of control of the vehicle. Dealership Parts and Service Sales. We record revenue for vehicle service and collision work over time as work is completed and when parts are delivered to our customers. For service and parts revenues recorded over time, we utilize a method that considers total costs incurred to date and the applicable margin in relation to total expected efforts to complete our performance obligation in order to determine the appropriate amount of revenue to recognize over time. Recognition of this revenue over time reflects the amount of consideration we expect to be entitled to for the transfer of goods and services performed to date, representative of the amount for which we have a right to payment. The amount of consideration we receive for parts and service sales, including collision repair work, is based upon labor hours expended and parts utilized to perform and complete the necessary services to our customers. Payment is typically due upon delivery or within a period of time shortly thereafter. We receive payment from our customers upon transfer of control or within a period typically less than 30 days subsequent to the completion of services for the customer. We allow for customer returns of parts sales up to 30 days after the sale; however, parts returns are not material. 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. Three Months Ended June 30, Six Months Ended June 30, Retail Automotive Dealership Revenue 2021 2020 2021 2020 New vehicle $ 2,811.3 $ 1,384.7 $ 5,232.7 $ 3,249.2 Used vehicle 2,327.6 1,166.0 4,135.6 2,785.6 Finance and insurance, net 212.3 97.1 381.1 241.5 Service and parts 546.2 345.2 1,049.4 858.5 Fleet and wholesale 300.2 160.5 605.7 435.3 Total retail automotive dealership revenue $ 6,197.6 $ 3,153.5 $ 11,404.5 $ 7,570.1 Three Months Ended June 30, Six Months Ended June 30, Retail Automotive Dealership Revenue 2021 2020 2021 2020 U.S. $ 3,614.5 $ 2,053.8 $ 6,619.3 $ 4,507.7 U.K. 2,190.6 837.8 4,044.0 2,503.2 Germany and Italy 392.5 261.9 741.2 559.2 Total retail automotive dealership revenue $ 6,197.6 $ 3,153.5 $ 11,404.5 $ 7,570.1 Three Months Ended June 30, Six Months Ended June 30, Retail Commercial Truck Dealership Revenue 2021 2020 2021 2020 New truck $ 399.2 $ 235.5 $ 646.7 $ 553.8 Used truck 59.0 36.9 110.0 71.5 Finance and insurance, net 3.8 3.2 6.9 6.4 Service and parts 157.3 111.6 281.9 236.0 Other 6.0 12.0 14.5 22.9 Total retail commercial truck dealership revenue $ 625.3 $ 399.2 $ 1,060.0 $ 890.6 2021: and Other June 30, December 31, 2021 2020 Accounts receivable Contracts in transit $ 293.1 $ 254.0 Vehicle receivables 242.3 216.2 Manufacturer receivables 178.4 193.6 Trade receivables 186.2 135.3 Accrued expenses Unearned revenues $ 276.1 $ 262.9 2021: Additional Revenue Recognition Related Policies The following table summarizes our net operating lease cost during the three and six months ended June 30, 2021: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Lease Cost Operating lease cost (1) $ 62.8 $ 60.5 $ 124.3 $ 120.5 Sublease income (6.7) (6.5) (13.0) (12.9) Total lease cost $ 56.1 $ 54.0 $ 111.3 $ 107.6 Includes short-term leases and variable lease costs, which are immaterial. Six Months Ended Six Months Ended June 30, 2021 June 30, 2020 Other Information Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases 124.6 114.3 Right-of-use assets obtained in exchange for operating lease liabilities 64.2 2.6 June 30, 2021 December 31, 2020 Lease Term and Discount Rate Weighted-average remaining lease term - operating leases 24 years 25 years Weighted-average discount rate - operating leases 6.2% 6.4% Maturity of Lease Liabilities June 30, 2021 2021 (1) $ 131.2 2022 249.4 2023 241.4 2024 234.7 2025 231.1 2026 221.2 2027 and thereafter 4,198.1 Total future minimum lease payments $ 5,507.1 Less: Imputed interest (3,036.2) Present value of future minimum lease payments $ 2,470.9 Current operating lease liabilities (2) $ 95.4 Long-term operating lease liabilities 2,375.5 Total operating lease liabilities $ 2,470.9 June 30, December 31, 2021 2020 Retail automotive dealership new vehicles $ 1,064.9 $ 1,810.9 Retail automotive dealership used vehicles 1,106.2 1,019.7 Retail automotive parts, accessories, and other 114.0 117.2 Retail commercial truck dealership vehicles and parts 383.2 223.1 Commercial vehicle distribution vehicles, parts, and engines 268.6 254.7 Total inventories $ 2,936.9 $ 3,425.6 2022: June 30, 2021 Accounts receivable $ — Inventories 37.0 Other current assets 0.1 Property and equipment 62.8 Indefinite-lived intangibles 184.7 Other noncurrent assets — Current liabilities (2.8) Noncurrent liabilities (3.8) Total cash used in acquisitions $ 278.0 Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Revenues $ 7,023.4 $ 3,772.9 $ 12,866.9 $ 8,841.3 Income from continuing operations 340.2 48.8 524.1 101.4 Net income 340.3 48.9 524.2 101.5 Income from continuing operations per diluted common share $ 4.21 $ 0.61 $ 6.50 $ 1.26 Net income per diluted common share $ 4.21 $ 0.61 $ 6.50 $ 1.26 Other Indefinite- Lived Intangible Goodwill Assets Balance, January 1, 2021 $ 1,928.4 $ 563.4 Additions 141.0 43.7 Disposals (0.6) — Foreign currency translation 2.2 (1.6) Balance, June 30, 2021 $ 2,071.0 $ 605.5 2022: the calculation of basic and diluted earnings per share for the three and six months ended June 30, 2022 and 2021 Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Weighted average number of common shares outstanding 80,691,996 80,421,478 80,649,824 80,731,889 Effect of non-participatory equity compensation 34,442 40,000 34,442 40,000 Weighted average number of common shares outstanding, including effect of dilutive securities 80,726,438 80,461,478 80,684,266 80,771,889 June 30, December 31, 2021 2020 U.S. credit agreement — revolving credit line $ — $ 108.0 U.K. credit agreement — revolving credit line — — U.K. credit agreement — overdraft line of credit — — 3.50% senior subordinated notes due 2025 544.0 543.2 5.50% senior subordinated notes due 2026 — 496.4 3.75% senior subordinated notes due 2029 493.9 — Australia capital loan agreement 29.3 32.1 Australia working capital loan agreement 7.5 — Mortgage facilities 398.9 458.1 Other 44.2 51.8 Total long-term debt 1,517.8 1,689.6 Less: current portion (81.5) (87.5) Net long-term debt $ 1,436.3 $ 1,602.1 following: rise to certain remedies under the agreement, the most severe of which is the termination of the agreement and acceleration of the amounts owed. 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 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, we 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. During the Foreign Currency Interest Rate Translation 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) Foreign Currency Interest Rate Translation Swaps Other Total Balance at March 31, 2020 $ (278.8) $ — $ (20.7) $ (299.5) Other comprehensive income (loss) before reclassifications 27.5 (4.1) 1.3 24.7 Amounts reclassified from accumulated other comprehensive income (loss) — net of tax benefit of $0.0 — — — — Net current period other comprehensive income (loss) 27.5 (4.1) 1.3 24.7 Balance at June 30, 2020 $ (251.3) $ (4.1) $ (19.4) $ (274.8) 2022 Foreign Currency Interest Rate Translation 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 Interest Rate Translation Swaps Other Total Balance at December 31, 2019 $ (186.1) $ — $ (16.7) $ (202.8) Other comprehensive income (loss) before reclassifications (65.2) (4.1) (2.7) (72.0) Amounts reclassified from accumulated other comprehensive income (loss) — net of tax benefit of $0.0 — — — — Net current period other comprehensive income (loss) (65.2) (4.1) (2.7) (72.0) Balance at June 30, 2020 $ (251.3) $ (4.1) $ (19.4) $ (274.8) Retail Retail Commercial Non-Automotive Intersegment Automotive Truck Other Investments Elimination Total Revenues 2021 $ 6,197.6 $ 625.3 $ 164.6 $ — $ — $ 6,987.5 2020 3,153.5 $ 399.2 $ 98.4 $ — $ — $ 3,651.1 Segment income 2021 $ 313.0 $ 39.7 $ 8.4 $ 102.6 $ — $ 463.7 2020 11.8 $ 14.6 $ 4.9 $ 29.9 $ — $ 61.2 Six Months Ended June 30, Retail Retail Commercial Non-Automotive Intersegment Automotive Truck Other Investments Elimination Total Revenues 2021 $ 11,404.5 $ 1,060.0 $ 296.8 $ — $ — $ 12,761.3 2020 7,570.1 $ 890.6 $ 199.5 $ — $ — $ 8,660.2 Segment income 2021 $ 473.3 $ 67.2 $ 14.4 $ 156.4 $ — $ 711.3 2020 53.1 $ 28.3 $ 7.8 $ 43.5 $ — $ 132.7 Retail Automotive. We In March 2022, we agreed to transition our U.K. Mercedes Benz dealerships to an agency model beginning in 2023. Under an agency model, our U.K. Mercedes Benz dealerships will receive a fee for facilitating the sale by the manufacturer of a new vehicle but will not hold the vehicle in inventory. We 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 also 2022. Retail Commercial Truck Dealership. We operate Premier Truck Group (“PTG”), a heavy- and medium-duty truck dealership group 2022. Penske Australia. Penske Transportation Solutions. We hold a 28.9% ownership interest in Penske Truck Leasing Co., profitability for commercial rental trucks and full-service leasing, as well as used vehicle sales. Retail Retail Commercial Truck Dealership. During the six months ended June 30, used commercial truck gross profit per unit together with higher sales volumes. Commercial Vehicle Penske Transportation Solutions.A majority of vehicle manufacturers. 2021. months ended June 30, 2022. Annual Report. 2021. 2021 vs. 2020 New Vehicle Data 2021 2020 Change % Change New retail unit sales 57,789 30,687 27,102 88.3 % Same-store new retail unit sales 57,622 30,088 27,534 91.5 % New retail sales revenue $ 2,811.3 $ 1,384.7 $ 1,426.6 103.0 % Same-store new retail sales revenue $ 2,797.2 $ 1,365.3 $ 1,431.9 104.9 % New retail sales revenue per unit $ 48,648 $ 45,124 $ 3,524 7.8 % Same-store new retail sales revenue per unit $ 48,544 $ 45,378 $ 3,166 7.0 % Gross profit — new $ 276.6 $ 106.2 $ 170.4 160.5 % Same-store gross profit — new $ 274.9 $ 105.3 $ 169.6 161.1 % Average gross profit per new vehicle retailed $ 4,786 $ 3,462 $ 1,324 38.2 % Same-store average gross profit per new vehicle retailed $ 4,770 $ 3,499 $ 1,271 36.3 % Gross margin % — new 9.8 % 7.7 % 2.1 % 27.3 % Same-store gross margin % — new 9.8 % 7.7 % 2.1 % 27.3 % New vehicle retail sales revenue supply chain issues discussed above. 2021 vs. 2020 Used Vehicle Data 2021 2020 Change % Change Used retail unit sales 74,708 42,606 32,102 75.3 % Same-store used retail unit sales 73,270 41,952 31,318 74.7 % Used retail sales revenue $ 2,327.6 $ 1,166.0 $ 1,161.6 99.6 % Same-store used retail sales revenue $ 2,295.6 $ 1,151.3 $ 1,144.3 99.4 % Used retail sales revenue per unit $ 31,156 $ 27,368 $ 3,788 13.8 % Same-store used retail sales revenue per unit $ 31,330 $ 27,444 $ 3,886 14.2 % Gross profit — used $ 194.1 $ 55.8 $ 138.3 247.8 % Same-store gross profit — used $ 191.8 $ 55.5 $ 136.3 245.6 % Average gross profit per used vehicle retailed $ 2,598 $ 1,310 $ 1,288 98.3 % Same-store average gross profit per used vehicle retailed $ 2,618 $ 1,322 $ 1,296 98.0 % Gross margin % — used 8.3 % 4.8 % 3.5 % 72.9 % Same-store gross margin % — used 8.4 % 4.8 % 3.6 % 75.0 % Used vehicle retail sales revenue increased from . which decreased our gross margin. 2021 vs. 2020 Finance and Insurance Data 2021 2020 Change % Change Total retail unit sales 132,497 73,293 59,204 80.8 % Total same-store retail unit sales 130,892 72,040 58,852 81.7 % Finance and insurance revenue $ 212.3 $ 97.1 $ 115.2 118.6 % Same-store finance and insurance revenue $ 209.9 $ 95.8 $ 114.1 119.1 % Finance and insurance revenue per unit $ 1,603 $ 1,324 $ 279 21.1 % Same-store finance and insurance revenue per unit $ 1,604 $ 1,330 $ 274 20.6 % Finance and insurance revenue increased Retail Automotive Dealership Service and Parts Data 2021 vs. 2020 Service and Parts Data 2021 2020 Change % Change Service and parts revenue $ 546.2 $ 345.2 $ 201.0 58.2 % Same-store service and parts revenue $ 543.5 $ 340.0 $ 203.5 59.9 % Gross profit — service and parts $ 337.0 $ 201.2 $ 135.8 67.5 % Same-store service and parts gross profit $ 334.8 $ 198.5 $ 136.3 68.7 % Gross margin % — service and parts 61.7 % 58.3 % 3.4 % 5.8 % Same-store service and parts gross margin % 61.6 % 58.4 % 3.2 % 5.5 % 2021 vs. 2020 New Commercial Truck Data 2021 2020 Change % Change New retail unit sales 3,314 2,063 1,251 60.6 % Same-store new retail unit sales 2,770 2,063 707 34.3 % New retail sales revenue $ 399.2 $ 235.5 $ 163.7 69.5 % Same-store new retail sales revenue $ 339.9 $ 235.5 $ 104.4 44.3 % New retail sales revenue per unit $ 120,445 $ 114,176 $ 6,269 5.5 % Same-store new retail sales revenue per unit $ 122,722 $ 114,176 $ 8,546 7.5 % Gross profit — new $ 19.6 $ 9.6 $ 10.0 104.2 % Same-store gross profit — new $ 17.9 $ 9.6 $ 8.3 86.5 % Average gross profit per new truck retailed $ 5,909 $ 4,640 $ 1,269 27.3 % Same-store average gross profit per new truck retailed $ 6,462 $ 4,640 $ 1,822 39.3 % Gross margin %��— new 4.9 % 4.1 % 0.8 % 19.5 % Same-store gross margin % — new 5.3 % 4.1 % 1.2 % 29.3 % is primarily due to a used trucks for customers. supply chain issues discussed above. 2021 vs. 2020 Used Commercial Truck Data 2021 2020 Change % Change Used retail unit sales 832 773 59 7.6 % Same-store used retail unit sales 803 773 30 3.9 % Used retail sales revenue $ 59.0 $ 36.9 $ 22.1 59.9 % Same-store used retail sales revenue $ 56.8 $ 36.9 $ 19.9 53.9 % Used retail sales revenue per unit $ 70,932 $ 47,721 $ 23,211 48.6 % Same-store used retail sales revenue per unit $ 70,723 $ 47,721 $ 23,002 48.2 % Gross profit — used $ 9.5 $ (2.9) $ 12.4 427.6 % Same-store gross profit — used $ 9.1 $ (2.9) $ 12.0 413.8 % Average gross profit per used truck retailed $ 11,381 $ (3,731) $ 15,112 405.0 % Same-store average gross profit per used truck retailed $ 11,276 $ (3,731) $ 15,007 402.2 % Gross margin % — used 16.1 % (7.9) % 24.0 % 303.8 % Same-store gross margin % — used 16.0 % (7.9) % 23.9 % 302.5 % 2021 vs. 2020 Service and Parts Data 2021 2020 Change % Change Service and parts revenue $ 157.3 $ 111.6 $ 45.7 40.9 % Same-store service and parts revenue $ 136.3 $ 111.6 $ 24.7 22.1 % Gross profit — service and parts $ 66.3 $ 49.2 $ 17.1 34.8 % Same-store service and parts gross profit $ 58.0 $ 49.2 $ 8.8 17.9 % Gross margin % — service and parts 42.1 % 44.1 % (2.0) % (4.5) % Same-store service and parts gross margin % 42.6 % 44.1 % (1.5) % (3.4) % 2021 vs. 2020 Penske Australia Data 2021 2020 Change % Change Vehicle unit sales 436 253 183 72.3 % Sales revenue $ 164.6 $ 98.4 $ 66.2 67.3 % Gross profit $ 39.6 $ 26.4 $ 13.2 50.0 % Selling, General, and Administrative Data 2021 vs. 2020 Selling, General, and Administrative Data 2021 2020 Change % Change Personnel expense $ 480.1 $ 253.7 $ 226.4 89.2 % Advertising expense $ 31.9 $ 12.4 $ 19.5 157.3 % Rent & related expense $ 82.5 $ 73.6 $ 8.9 12.1 % Other expense $ 155.3 $ 113.9 $ 41.4 36.3 % Total SG&A expenses $ 749.8 $ 453.6 $ 296.2 65.3 % Same-store SG&A expenses $ 736.7 $ 447.5 $ 289.2 64.6 % Personnel expense as % of gross profit 40.6 % 45.9 % (5.3) % (11.5) % Advertising expense as % of gross profit 2.7 % 2.2 % 0.5 % 22.7 % Rent & related expense as % of gross profit 7.0 % 13.3 % (6.3) % (47.4) % Other expense as % of gross profit 13.1 % 20.6 % (7.5) % (36.4) % Total SG&A expenses as % of gross profit 63.4 % 82.0 % (18.6) % (22.7) % Same-store SG&A expenses as % of same-store gross profit 63.3 % 81.7 % (18.4) % (22.5) % expenses. 2021 vs. 2020 2021 2020 Change % Change Depreciation $ 30.2 $ 27.9 $ 2.3 8.2 % acquisitions, partially offset by a $0.5 million, or 1.5% decrease, in same-store depreciation. 2021 vs. 2020 2021 2020 Change % Change Floor plan interest expense $ 7.9 $ 11.7 $ (3.8) (32.5) % Other Interest Expense 2021 vs. 2020 2021 2020 Change % Change Other interest expense $ 19.7 $ 28.4 $ (8.7) (30.6) % rates. 2021 vs. 2020 2021 2020 Change % Change Equity in earnings of affiliates $ 105.6 $ 29.9 $ 75.7 253.2 % vehicle sales. 2021 vs. 2020 2021 2020 Change % Change Income taxes $ 123.4 $ 16.5 $ 106.9 647.9 % 2021 vs. 2020 New Vehicle Data 2021 2020 Change % Change New retail unit sales 108,198 73,874 34,324 46.5 % Same-store new retail unit sales 107,944 72,463 35,481 49.0 % New retail sales revenue $ 5,232.7 $ 3,249.2 $ 1,983.5 61.0 % Same-store new retail sales revenue $ 5,212.0 $ 3,202.9 $ 2,009.1 62.7 % New retail sales revenue per unit $ 48,363 $ 43,983 $ 4,380 10.0 % Same-store new retail sales revenue per unit $ 48,285 $ 44,201 $ 4,084 9.2 % Gross profit — new $ 481.6 $ 244.8 $ 236.8 96.7 % Same-store gross profit — new $ 479.3 $ 242.4 $ 236.9 97.7 % Average gross profit per new vehicle retailed $ 4,451 $ 3,315 $ 1,136 34.3 % Same-store average gross profit per new vehicle retailed $ 4,440 $ 3,345 $ 1,095 32.7 % Gross margin % — new 9.2 % 7.5 % 1.7 % 22.7 % Same-store gross margin % — new 9.2 % 7.6 % 1.6 % 21.1 % new vehicles available for sale, which has been caused by supply chain issues discussed above. supply chain issues discussed above. Retail Automotive Dealership Used Vehicle Data 2021 vs. 2020 Used Vehicle Data 2021 2020 Change % Change Used retail unit sales 135,151 105,656 29,495 27.9 % Same-store used retail unit sales 133,085 104,004 29,081 28.0 % Used retail sales revenue $ 4,135.6 $ 2,785.6 $ 1,350.0 48.5 % Same-store used retail sales revenue $ 4,090.6 $ 2,748.2 $ 1,342.4 48.8 % Used retail sales revenue per unit $ 30,599 $ 26,365 $ 4,234 16.1 % Same-store used retail sales revenue per unit $ 30,737 $ 26,424 $ 4,313 16.3 % Gross profit — used $ 303.5 $ 141.7 $ 161.8 114.2 % Same-store gross profit — used $ 300.7 $ 140.2 $ 160.5 114.5 % Average gross profit per used vehicle retailed $ 2,246 $ 1,341 $ 905 67.5 % Same-store average gross profit per used vehicle retailed $ 2,260 $ 1,348 $ 912 67.7 % Gross margin % — used 7.3 % 5.1 % 2.2 % 43.1 % Same-store gross margin % — used 7.4 % 5.1 % 2.3 % 45.1 % supply chain issues discussed above. Used vehicle retail sales revenue increased from . Retail Automotive Dealership Finance and Insurance Data 2021 vs. 2020 Finance and Insurance Data 2021 2020 Change % Change Total retail unit sales 243,349 179,530 63,819 35.5 % Total same-store retail unit sales 241,029 176,467 64,562 36.6 % Finance and insurance revenue $ 381.1 $ 241.5 $ 139.6 57.8 % Same-store finance and insurance revenue $ 377.7 $ 238.2 $ 139.5 58.6 % Finance and insurance revenue per unit $ 1,566 $ 1,345 $ 221 16.4 % Same-store finance and insurance revenue per unit $ 1,567 $ 1,350 $ 217 16.1 % Finance and insurance revenue increased 2021 vs. 2020 Service and Parts Data 2021 2020 Change % Change Service and parts revenue $ 1,049.4 $ 858.5 $ 190.9 22.2 % Same-store service and parts revenue $ 1,045.7 $ 844.3 $ 201.4 23.9 % Gross profit — service and parts $ 642.4 $ 504.9 $ 137.5 27.2 % Same-store service and parts gross profit $ 639.3 $ 497.1 $ 142.2 28.6 % Gross margin % — service and parts 61.2 % 58.8 % 2.4 % 4.1 % Same-store service and parts gross margin % 61.1 % 58.9 % 2.2 % 3.7 % new vehicles, which generates additional service and parts revenues. profit and a 2021 vs. 2020 New Commercial Truck Data 2021 2020 Change % Change New retail unit sales 5,479 4,874 605 12.4 % Same-store new retail unit sales 4,935 4,874 61 1.3 % New retail sales revenue $ 646.7 $ 553.8 $ 92.9 16.8 % Same-store new retail sales revenue $ 587.5 $ 553.8 $ 33.7 6.1 % New retail sales revenue per unit $ 118,026 $ 113,621 $ 4,405 3.9 % Same-store new retail sales revenue per unit $ 119,038 $ 113,621 $ 5,417 4.8 % Gross profit — new $ 33.8 $ 22.1 $ 11.7 52.9 % Same-store gross profit — new $ 32.2 $ 22.1 $ 10.1 45.7 % Average gross profit per new truck retailed $ 6,176 $ 4,534 $ 1,642 36.2 % Same-store average gross profit per new truck retailed $ 6,516 $ 4,534 $ 1,982 43.7 % Gross margin % — new 5.2 % 4.0 % 1.2 % 30.0 % Same-store gross margin % — new 5.5 % 4.0 % 1.5 % 37.5 % supply chain issues discussed above. 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. 2021 vs. 2020 Used Commercial Truck Data 2021 2020 Change % Change Used retail unit sales 1,673 1,471 202 13.7 % Same-store used retail unit sales 1,644 1,471 173 11.8 % Used retail sales revenue $ 110.0 $ 71.5 $ 38.5 53.8 % Same-store used retail sales revenue $ 107.7 $ 71.5 $ 36.2 50.6 % Used retail sales revenue per unit $ 65,729 $ 48,622 $ 17,107 35.2 % Same-store used retail sales revenue per unit $ 65,536 $ 48,622 $ 16,914 34.8 % Gross profit — used $ 15.9 $ (5.3) $ 21.2 400.0 % Same-store gross profit — used $ 15.5 $ (5.3) $ 20.8 392.5 % Average gross profit per used truck retailed $ 9,518 $ (3,626) $ 13,144 362.5 % Same-store average gross profit per used truck retailed $ 9,434 (3,626) $ 13,060 360.2 % Gross margin % — used 14.5 % (7.4) % 21.9 % 295.9 % Same-store gross margin % — used 14.4 % (7.4) % 21.8 % 294.6 % trucks for customers. 2021 vs. 2020 Service and Parts Data 2021 2020 Change % Change Service and parts revenue $ 281.9 $ 236.0 $ 45.9 19.4 % Same-store service and parts revenue $ 260.9 $ 236.0 $ 24.9 10.6 % Gross profit — service and parts $ 119.0 $ 102.5 $ 16.5 16.1 % Same-store service and parts gross profit $ 110.7 $ 102.5 $ 8.2 8.0 % Gross margin % — service and parts 42.2 % 43.4 % (1.2) % (2.8) % Same-store service and parts gross margin % 42.4 % 43.4 % (1.0) % (2.3) % a 2021 vs. 2020 Penske Australia Data 2021 2020 Change % Change Vehicle unit sales 695 472 223 47.2 % Sales revenue $ 296.8 $ 199.5 $ 97.3 48.8 % Gross profit $ 72.9 $ 56.2 $ 16.7 29.7 % per unit in our power generation product lines. 2021 vs. 2020 Selling, General, and Administrative Data 2021 2020 Change % Change Personnel expense $ 877.0 $ 627.6 $ 249.4 39.7 % Advertising expense $ 58.1 $ 38.6 $ 19.5 50.5 % Rent & related expense $ 162.7 $ 157.5 $ 5.2 3.3 % Other expense $ 316.3 $ 271.7 $ 44.6 16.4 % Total SG&A expenses $ 1,414.1 $ 1,095.4 $ 318.7 29.1 % Same store SG&A expenses $ 1,396.9 $ 1,079.4 $ 317.5 29.4 % Personnel expense as % of gross profit 41.8 % 47.2 % (5.4) % (11.4) % Advertising expense as % of gross profit 2.8 % 2.9 % (0.1) % (3.4) % Rent & related expense as % of gross profit 7.8 % 11.9 % (4.1) % (34.5) % Other expense as % of gross profit 15.1 % 20.4 % (5.3) % (26.0) % Total SG&A expenses as % of gross profit 67.5 % 82.4 % (14.9) % (18.1) % Same store SG&A expenses as % of same store gross profit 67.4 % 82.1 % (14.7) % (17.9) % We believe the decrease in SG&A as a percentage of gross profit is 2021 vs. 2020 2021 2020 Change % Change Depreciation $ 59.5 $ 56.4 $ 3.1 5.5 % 2021 vs. 2020 2021 2020 Change % Change Floor plan interest expense $ 17.4 $ 29.4 $ (12.0) (40.8) % supply chain issues discussed above, partially offset by increases in applicable rates. 2021 vs. 2020 2021 2020 Change % Change Other interest expense $ 37.6 $ 60.1 $ (22.5) (37.4) % rates. 2021 vs. 2020 2021 2020 Change % Change Equity in earnings of affiliates $ 161.0 $ 44.4 $ 116.6 262.6 % Income Taxes 2021 vs. 2020 2021 2020 Change % Change Income taxes $ 187.9 $ 36.6 $ 151.3 413.4 % Australia and Mercedes Benz Financial Services New Zealand. borrowing under our U.S. credit agreement, U.K. credit agreement, 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: 2020 First Quarter $ 0.42 Second Quarter — Third Quarter — Fourth Quarter 0.42 2021 First Quarter $ 0.43 Second Quarter $ 0.44 June 30, (In millions) 2021 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 544.0 5.50% senior subordinated notes due 2026 — 3.75% senior subordinated notes due 2029 493.9 Australia capital loan agreement 29.3 Australia working capital loan agreement 7.5 Mortgage facilities 398.9 Other 44.2 Total long-term debt $ 1,517.8 As of June 30, in November 2021. distributions relating to this investment. We currently expect to continue to receive future distributions from PTS quarterly, subject to its financial performance. Condensed income statement information: PAG and Guarantor Subsidiaries Six Months Ended Twelve Months Ended June 30, 2021 December 31, 2020 Revenues $ 7,198.0 $ 11,576.7 Gross profit 1,274.3 1,908.9 Equity in earnings of affiliates 156.5 164.5 Income from continuing operations 383.2 400.1 Net income 383.3 400.4 Net income attributable to Penske Automotive Group 383.3 400.4 PAG and Guarantor Subsidiaries June 30, 2021 December 31, 2020 Current assets (1) $ 2,380.6 $ 2,627.3 Property and equipment, net 1,203.8 1,128.8 Equity method investments 1,525.3 1,424.7 Other noncurrent assets 3,497.1 3,173.6 Current liabilities 2,000.2 2,156.3 Noncurrent liabilities 3,914.3 3,848.5 Six Months Ended June 30, (In millions) 2021 2020 Net cash provided by continuing operating activities $ 916.7 $ 784.4 Net cash used in continuing investing activities (331.6) (47.8) Net cash used in continuing financing activities (470.1) (605.2) Net cash provided by discontinued operations 0.1 0.1 Effect of exchange rate changes on cash and cash equivalents 0.6 (0.3) Net change in cash and cash equivalents $ 115.7 $ 131.2 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. Six Months Ended June 30, (In millions) 2021 2020 Net cash from continuing operating activities as reported $ 916.7 $ 784.4 Floor plan notes payable — non-trade as reported (181.9) (309.9) Net cash from continuing operating activities including all floor plan notes payable $ 734.8 $ 474.5 million, respectively. Related Party Transactions Location Dealerships Ownership Interest Fairfield, Connecticut Audi, Mercedes-Benz, Sprinter, Porsche Greenwich, Connecticut Mercedes-Benz Northern Italy BMW, MINI, Maserati, Porsche, Audi, Jaguar, Land Rover, Volvo, Mercedes-Benz, Frankfurt, Germany Lexus, Toyota, Volkswagen Barcelona, Spain BMW, MINI inflation may adversely affect consumer demand and increase our costs, which may materially and adversely affect us. 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; some of our directors and officers may have conflicts of interest with respect to certain related party transactions and other business interests; and 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 LIBOR, SONIA, the Bank of England Base Rate, or the Australian Bank Bill Swap Rate. Based on an average of the aggregate amounts outstanding under these facilities during the six months ended June 30, the prohibition of using derivatives for trading or other speculative purposes; and Foreign Currency Exchange Rates. As of June 30, 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 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. 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, 2021 — $ — — $ 170.6 May 1 to May 31, 2021 — $ — — $ 170.6 June 1 to June 30, 2021 495,307 $ 82.63 348,231 $ 142.5 495,307 348,231 31.1 31.2 32 101.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 PENSKE AUTOMOTIVE GROUP, INC. By: /s/ Roger Roger Date: July Chief Executive Officer By: /s/ Michelle Hulgrave Michelle Hulgrave Date: July Chief Financial OfficerJune 30,
2022December 31,
2021(Unaudited) (In millions, except share
and per share amounts)ASSETS Cash and cash equivalents $ 154.9 $ 100.7 Accounts receivable, net of allowance for doubtful accounts of $5.7 and $6.8 774.3 734.0 Inventories 3,055.2 3,129.0 Other current assets 147.9 111.7 Total current assets 4,132.3 4,075.4 Property and equipment, net 2,402.3 2,442.2 Operating lease right-of-use assets 2,435.4 2,451.4 Goodwill 2,139.7 2,124.1 Other indefinite-lived intangible assets 677.9 641.5 Equity method investments 1,672.9 1,688.1 Other long-term assets 43.6 41.9 Total assets $ 13,504.1 $ 13,464.6 LIABILITIES AND EQUITY Floor plan notes payable $ 1,205.6 $ 1,144.8 Floor plan notes payable — non-trade 1,236.5 1,409.9 Accounts payable 841.1 767.1 Accrued expenses and other current liabilities 853.1 870.3 Current portion of long-term debt 78.5 82.0 Liabilities held for sale — 0.5 Total current liabilities 4,214.8 4,274.6 Long-term debt 1,407.5 1,392.0 Long-term operating lease liabilities 2,356.0 2,373.6 Deferred tax liabilities 1,083.9 1,060.4 Other long-term liabilities 222.5 269.0 Total liabilities 9,284.7 9,369.6 Commitments and contingent liabilities (Note 10) 0 — Equity Penske Automotive Group stockholders’ equity: 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 — — 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 — — Additional paid-in capital — 42.2 Retained earnings 4,506.7 4,196.6 Accumulated other comprehensive income (loss) (311.9) (168.8) Total Penske Automotive Group stockholders’ equity 4,194.8 4,070.0 Non-controlling interest 24.6 25.0 Total equity 4,219.4 4,095.0 Total liabilities and equity $ 13,504.1 $ 13,464.6 Three Months Ended
June 30,Six Months Ended
June 30,2022 2021 2022 2021 (Unaudited) (In millions, except per share amounts) Revenue: Retail automotive dealership $ 5,997.3 $ 6,197.6 $ 12,026.5 $ 11,404.5 Retail commercial truck dealership 768.7 625.3 1,561.0 1,060.0 Commercial vehicle distribution and other 140.9 164.6 294.8 296.8 Total revenues 6,906.9 6,987.5 13,882.3 12,761.3 Cost of sales: Retail automotive dealership 4,937.3 5,157.2 9,915.8 9,564.2 Retail commercial truck dealership 632.7 522.6 1,283.8 877.3 Commercial vehicle distribution and other 99.9 125.0 214.0 223.9 Total cost of sales 5,669.9 5,804.8 11,413.6 10,665.4 Gross profit 1,237.0 1,182.7 2,468.7 2,095.9 Selling, general and administrative expenses 817.7 749.8 1,615.5 1,414.1 Depreciation 31.7 30.2 63.6 59.5 Operating income 387.6 402.7 789.6 622.3 Floor plan interest expense (9.0) (7.9) (16.5) (17.4) Other interest expense (17.0) (19.7) (33.5) (37.6) Debt redemption costs — (17.0) — (17.0) Equity in earnings of affiliates 138.0 105.6 257.6 161.0 Income from continuing operations before income taxes 499.6 463.7 997.2 711.3 Income taxes (123.7) (123.4) (251.8) (187.9) 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 375.9 340.4 745.4 523.5 Less: Income attributable to non-controlling interests 1.9 1.5 3.5 2.1 Net income attributable to Penske Automotive Group common stockholders $ 374.0 $ 338.9 $ 741.9 $ 521.4 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 $ 4.93 $ 4.20 $ 9.70 $ 6.46 Shares used in determining basic earnings per share 75.8 80.7 76.5 80.6 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 $ 4.93 $ 4.20 $ 9.70 $ 6.46 Shares used in determining diluted earnings per share 75.8 80.7 76.5 80.7 Amounts attributable to Penske Automotive Group common stockholders: Income from continuing operations $ 375.9 $ 340.3 $ 745.4 $ 523.4 Less: Income attributable to non-controlling interests 1.9 1.5 3.5 2.1 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 $ 374.0 $ 338.9 $ 741.9 $ 521.4 Cash dividends per share $ 0.50 $ 0.44 $ 0.97 $ 0.87 INCOME (LOSS)Three Months Ended
June 30,Six Months Ended
June 30,2022 2021 2022 2021 (Unaudited) (In millions) Net income $ 375.9 $ 340.4 $ 745.4 $ 523.5 Other comprehensive income (loss): Foreign currency translation adjustment (120.3) 1.8 (148.8) 1.9 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 5.7 6.4 4.5 7.1 Other comprehensive income (loss), net of tax (114.6) 7.8 (144.3) 12.5 Comprehensive income 261.3 348.2 601.1 536.0 Less: Comprehensive income attributable to non-controlling interests 1.1 1.7 2.3 1.8 Comprehensive income attributable to Penske Automotive Group common stockholders $ 260.2 $ 346.5 $ 598.8 $ 534.2 Six Months Ended
June 30,2022 2021 (Unaudited) (In millions) Operating Activities: Net income $ 745.4 $ 523.5 Adjustments to reconcile net income to net cash from continuing operating activities: Depreciation 63.6 59.5 Earnings of equity method investments (198.4) (134.2) Income from discontinued operations, net of tax — (0.1) Deferred income taxes 74.8 100.1 Debt redemption costs — 17.0 Changes in operating assets and liabilities: Accounts receivable (58.1) (106.2) Inventories (15.1) 525.1 Floor plan notes payable 121.0 (396.9) Accounts payable and accrued expenses 129.7 315.3 Other 16.3 13.6 Net cash provided by continuing operating activities 879.2 916.7 Investing Activities: Purchases of property, equipment, and improvements (138.1) (90.8) Proceeds from sale of dealerships — 4.3 Proceeds from sale of property and equipment 11.4 31.7 Acquisitions net, including repayment of sellers’ floor plan notes payable of $51.3 and $24.3, respectively (225.9) (278.0) Other (4.4) 1.2 Net cash used in continuing investing activities (357.0) (331.6) 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) Repurchases of common stock (275.4) (28.1) Dividends (74.4) (70.2) Payment of debt issuance costs (0.1) (6.1) 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 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 Cash and cash equivalents, beginning of period 100.7 49.5 Cash and cash equivalents, end of period $ 154.9 $ 165.2 Supplemental disclosures of cash flow information: Cash paid (received) for: Interest $ 49.2 $ 58.3 Income taxes 158.9 (14.1) Three Months Ended June 30, 2022 Voting and Non-voting Common Stock Additional
Paid-in
CapitalRetained
EarningsAccumulated
Other
Comprehensive
Income (Loss)Total
Penske
Automotive Group
Stockholders’ EquityNon-controlling
InterestTotal
EquityIssued
SharesAmount (Unaudited) (Dollars in millions) Balance, March 31, 2022 76,658,405 $ — $ — $ 4,336.9 $ (198.1) $ 4,138.8 $ 25.6 $ 4,164.4 Equity compensation 20,164 — 7.2 — — 7.2 — 7.2 Repurchases of common stock (1,663,107) — (7.2) (166.2) — (173.4) — (173.4) Dividends — — — (38.0) — (38.0) — (38.0) Distributions to non-controlling interest — — — — — — (2.1) (2.1) Foreign currency translation — — — — (119.5) (119.5) (0.8) (120.3) Other — — — — 5.7 5.7 — 5.7 Net income — — — 374.0 — 374.0 1.9 375.9 Balance, June 30, 2022 75,015,462 $ — $ — $ 4,506.7 $ (311.9) $ 4,194.8 $ 24.6 $ 4,219.4 Three Months Ended June 30, 2021 Voting and Non-voting Common Stock Additional
Paid-in
CapitalRetained
EarningsAccumulated
Other
Comprehensive
Income (Loss)Total
Penske
Automotive Group
Stockholders’ EquityNon-controlling
InterestTotal
EquityIssued
SharesAmount (Unaudited) (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 Equity compensation (1,514) — 6.5 — — 6.5 — 6.5 Repurchases of common stock (495,307) — (40.9) — — (40.9) — (40.9) Dividends — — — (35.6) — (35.6) — (35.6) Interest rate swaps — — — — (0.4) (0.4) — (0.4) Distributions to non-controlling interest — — — — — — (0.2) (0.2) Foreign currency translation — — — — 1.6 1.6 0.2 1.8 Other — — — — 6.4 6.4 — 6.4 Net income — — — 338.9 — 338.9 1.5 340.4 Balance, June 30, 2021 80,330,836 $ — $ 284.0 $ 3,602.5 $ (147.8) $ 3,738.7 $ 24.0 $ 3,762.7 Six Months Ended June 30, 2022 Voting and Non-voting Common Stock Additional
Paid-in
CapitalRetained
EarningsAccumulated
Other
Comprehensive
Income (Loss)Total
Penske
Automotive Group
Stockholders’ EquityNon-controlling
InterestTotal
EquityIssued
SharesAmount (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
CapitalRetained
EarningsAccumulated
Other
Comprehensive
Income (Loss)Total
Penske
Automotive Group
Stockholders’ EquityNon-controlling
InterestTotal
EquityIssued
SharesAmount (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 PAG operatesWe operate dealerships principally in the United States, the United Kingdom, Canada, Germany, and Italy, and isJapan, and we are one of the largest retailerretailers of commercial trucks in North America for Freightliner. PAGWe also distributesdistribute and retailsretail commercial vehicles, diesel and gas engines, power systems, and related parts and services principally in Australia and New Zealand. Additionally, PAG ownswe own 28.9% of Penske Transportation Solutions, a business that manages a fleet of over 330,000386,000 vehicles providing innovative transportation, supply chain, and technology solutions to North American fleets.believe we are one of the second largest global automotive retailer headquartered in the U.S.retailers as measured by the $17.9$22.5 billion in total retail automotive dealership revenue we generated in 2020.2021. As of June 30, 2021,2022, we operated 305332 retail automotive franchised dealerships, of which 144 franchised dealerships152 are located in the U.S. and 161 franchised dealerships180 are located outside of the U.S. The franchised dealerships outside the U.S. are located primarily in the U.K. InWe 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, 2021, we retailed and wholesaled more than 294,000 vehicles.2022. We are diversified geographically with 58%56% of our total retail automotive dealership revenues in the six months ended June 30, 2021,2022, generated in the U.S. and Puerto Rico and 42%44% generated outside the U.S. We offer over 35 vehicle brands with 71%70% of our retail automotive franchised dealership revenue in the six months ended June 30, 2021,2022, generated from premium brands, such as Audi, BMW, Land Rover, Mercedes-Benz, and Porsche.a number of automotive manufacturers and distributors that are subject to certain rights and restrictions typical of the industry.also operate Used Vehicle SuperCenters in the U.S.will continue to provide new vehicle customer service at our U.K. Mercedes Benz dealerships, and the U.K. which retailagency model does not structurally change our used vehicle sales operations or service and wholesale used vehicles underparts operations. See Part II, Item 1A. one price, “no-haggle” methodology under the CarShop brand. Our operations in the U.S. consistdiscussion of 7 retail locations operating in Pennsylvania and New Jersey. Our operations in the U.K. consist of 12 retail locations and a vehicle preparation center. During the second quarter of 2021, we opened 1 CarShop location in the U.S. and 1 in the U.K.agency.2021,2022, we acquired 110 retail automotive franchisefranchises, consisting of 6 franchises in the U.S., were awarded 1 retail automotive franchiseU.K. and 4 franchises in the U.S., and disposed of 1we opened 2 retail automotive franchisefranchises 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. known as Premier Truck Group (“PTG”) offering primarily Freightliner and Western Star trucks (both Daimler brands) with locations in Texas, Oklahoma, Tennessee, Georgia, Utah, Idaho, Kansas, Missouri,across 9 U.S. states and Ontario, Canada. In April 2021,During February 2022, we acquired Kansas City Freightliner (“KCFL”),TEAM Truck Centres, a retailer of heavy- and medium-duty Freightliner and Western Star commercial trucks located in Kansas and Missouri. KCFL addedOntario, Canada representing 4 full-service dealerships, 4 parts and service centers, and 2 collision centers to PTG’s operations.dealerships. As of June 30, 2021,2022, PTG operated 3539 locations which provide services such assell new and used truck sales,trucks, parts and service, and collision repair.repair services, which decreased from 41 locations due to the closure of 2 parts and service locations as a result9We arePenske 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, MTU Onsite Energy, Rolls Royce Power Systems, and Bergen Engines. This business, known as Penske Australia offers products across the on- and off-highway markets, including in the construction,trucking, mining, marine, defense, and 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.L.PL.P. (“PTL”). PTL is owned 41.1% by Penske Corporation, 28.9% by us, and 30.0% by Mitsui & Co., Ltd. (“Mitsui”). We account for our investment in PTL under the equity method, and we therefore record our share of PTL’s earnings on our statements of income under the caption “Equity in earnings of affiliates,” which also includes the results of our other equity method investments. Penske Transportation Solutions (“PTS”) is the universal brand name for PTL’s various business lines through which it is capable of meeting customers’ needs across the supply chain with a broad product offering that includes full-service truck leasing, truck rental, and contract maintenance along with logistic services, such as dedicated contract carriage, distribution center management, transportation management, lead logistics provider services, and dry van truckload carrier services.2021, and December 31, 2020,2022 and for the three and six month periodsmonths ended June 30, 2021,2022 and 20202021 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, 2020,2021, which are included as part of our Annual Report on Form 10-K.10fixed rate debt is as follows:During the second quarter of 2021, we issued $500 million in aggregate principal amount of 3.75% senior subordinated notes due 2029, the proceeds of which were used to redeem our $500 million in aggregate principal amount of 5.50% senior subordinated notes due 2026 on June 24, 2021. Refer to Note 9 “Long-Term Debt” for further discussion.Discontinued OperationsWe had 0 entities newly classified as held for sale during the six months ended June 30, 2021, or 2020 that met the criteria to be classified as discontinued operations.As such, results from discontinued operations represent only those businesses that were classified as discontinued operations prior to the adoption of ASU No. 2014-08 on January 1, 2015.June 30, 2022 December 31, 2021 Carrying Value Fair Value Carrying Value Fair Value 3.50% senior subordinated notes due 2025 545.4 511.8 544.7 $ 560.5 3.75% senior subordinated notes due 2029 494.7 413.5 494.3 490.7 366.9 347.2 353.8 359.8 _____________________ During the six months ended June 30, 2021, we disposed of 1 retail automotive franchise. this businessdisposals are included within continuing operations for the three and six months ended June 30, 2021, and 2020 as this franchise did notunless they meet the criteria to be classified as held for sale and treated as discontinued operations.11LIBORthe 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 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 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. These new standards were effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. Our senior secured revolvingWhile our credit facilitiesfacility in the U.S. and U.K. 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.K. credit agreement have already transitioned to utilizing an alternative benchmark rate. We are currently evaluatingcontinuing 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.Disclosures for Business Acquisitions, Dispositions, and Significant SubsidiariesOn May 20, 2020, the SEC issued a final rule that amends the financial statement requirements for acquisitions and dispositions of businesses, including the determinations of whether a subsidiary or an acquired or disposed business is significant. The significance test rule changes to SEC Regulation S-X, Rule 3-09 impact our disclosure requirements for equity method investments, including our investment in Penske Transportation Solutions (“PTS”) as it relates to providing audited financial statements and summarized financial statement information in our footnotes disclosures. The rule is effective January 1, 2021, but earlier compliance is permitted. The Company early adopted this rule in the fourth quarter of 2020.OEMs.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.12$31.0$36.1 million and $28.7$33.7 million as of June 30, 2021,2022, and December 31, 2020,2021, respectively.13and $51.0 million and $100.9 million for the three and six months ended June 30, 2020, respectively, for Penske Australia. reportable segment revenue by product type and geographic location for the three and six months ended June 30, 2021,2022 and 2020:14Three Months Ended June 30, Six Months Ended June 30, Retail Automotive Dealership Revenue 2022 2021 2022 2021 New vehicle $ 2,446.0 $ 2,811.3 $ 4,891.5 $ 5,232.7 Used vehicle 2,387.8 2,327.6 4,810.7 4,135.6 Finance and insurance, net 221.4 212.3 438.7 381.1 Service and parts 597.0 546.2 1,183.2 1,049.4 Fleet and wholesale 345.1 300.2 702.4 605.7 Total retail automotive dealership revenue $ 5,997.3 $ 6,197.6 $ 12,026.5 $ 11,404.5 Three Months Ended June 30, Six Months Ended June 30, Retail Automotive Dealership Revenue 2022 2021 2022 2021 U.S. $ 3,443.9 $ 3,614.5 $ 6,787.5 $ 6,619.3 U.K. 2,196.4 2,190.6 4,459.3 4,044.0 Germany, Italy, and Japan 357.0 392.5 779.7 741.2 Total retail automotive dealership revenue $ 5,997.3 $ 6,197.6 $ 12,026.5 $ 11,404.5 reportable segment revenue by product type for the three and six months ended June 30, 2021,2022 and 2020:Three Months Ended June 30, Six Months Ended June 30, Retail Commercial Truck Dealership Revenue 2022 2021 2022 2021 New truck $ 447.3 $ 399.2 $ 919.0 $ 646.7 Used truck 78.7 59.0 179.0 110.0 Finance and insurance, net 4.5 3.8 10.9 6.9 Service and parts 219.6 157.3 416.6 281.9 Other 18.6 6.0 35.5 14.5 Total retail commercial truck dealership revenue $ 768.7 $ 625.3 $ 1,561.0 $ 1,060.0 commercial vehicle distributionPenske Australia business. Commercial vehicle distribution and other revenue was $140.9 million and $294.8 million during the three and six months ended June 30, 2022, and $164.6 million and $296.8 million during the three and six months ended June 30, 2021, and $98.4 million and $199.5 million during the three and six months ended June 30, 2020, respectively.2021,2022, and December 31, 2020:June 30,
2022December 31,
2021Accounts receivable Contracts in transit $ 214.5 $ 198.7 Vehicle receivables 206.1 197.7 Manufacturer receivables 141.6 157.7 Trade receivables 191.7 164.5 Accrued expenses Unearned revenues $ 285.6 $ 297.0 2020, $122.32021, $158.4 million was recognized as revenue during the six months ended June 30, 2021.15$5.5$5.3 billion as of June 30, 2021.2022. 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 and $6.5 million and $12.9 million for the three and six months ended June 30, 2020, 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 had 0 proceeds from sale-leaseback transactions during the six months ended June 30, 2021, and 2020, respectively. We do not have any material leases that have not yet commenced as of June 30, 2021.162021,2022 and 2020: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)(1)Includes short-term leases and variable lease costs, which are immaterial.Six Months Ended
June 30, 2022Six Months Ended
June 30, 2021Other Information Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 122.5 $ 124.6 Right-of-use assets obtained in exchange for operating lease liabilities $ 82.2 $ 64.2 June 30, 2022 December 31, 2021 Lease Term and Discount Rate Weighted-average remaining lease term - operating leases 25 years 25 years Weighted-average discount rate - operating leases 6.6 % 6.7 % 2021:(1)Excludes the six months ended June 30, 2021.(2)Included within “Accrued expenses and other current liabilities” on Consolidated Condensed Balance Sheet as of June 30, 2021. Maturity of Lease Liabilities June 30, 2022 2022 (1) $ 124.1 2023 242.7 2024 237.2 2025 233.6 2026 227.7 2027 221.5 2028 and thereafter 4,033.9 Total future minimum lease payments $ 5,320.7 Less: Imputed interest (2,867.0) Present value of future minimum lease payments $ 2,453.7 Current operating lease liabilities (2) $ 97.7 Long-term operating lease liabilities 2,356.0 Total operating lease liabilities $ 2,453.7 17(1)Excludes the six months ended June 30, 2022.June 30,
2022December 31,
2021Retail automotive dealership new vehicles $ 1,004.5 $ 869.1 Retail automotive dealership used vehicles 1,164.6 1,420.0 Retail automotive parts, accessories, and other 132.7 126.4 Retail commercial truck dealership vehicles and parts 480.3 436.7 Commercial vehicle distribution vehicles, parts, and engines 273.1 276.8 Total inventories $ 3,055.2 $ 3,129.0 $21.3$10.4 million and $12.7$21.3 million during the three months ended June 30, 2021,2022 and 2020,2021, respectively, and $37.1$25.6 million and $24.2$37.1 million during the six months ended June 30, 2022 and 2021, and 2020, respectively. During the six months ended June 30, 2020, we made no acquisitions. 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 months ended June 30, 2021:Table of ContentsTheJune 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 of PAG for the three and six months ended June 30, 2021,2022 and 20202021 give effect to acquisitions consummated during 20212022 and 20202021 as if they had occurred effective at the beginning of the periods:18Three 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 2021:Goodwill Other Indefinite-
Lived Intangible
AssetsBalance, January 1, 2022 $ 2,124.1 $ 641.5 Additions 72.1 48.8 Disposals — — Foreign currency translation (56.5) (12.4) Balance, June 30, 2022 $ 2,139.7 $ 677.9 20212022, were within our Retail Automotive and Retail Commercial Truck reportable segments. The disposals during the six months ended June 30, 2021 were within our Retail Automotive reportable segment. We disposed of 1 retail automotive franchise. As of June 30, 2021,2022, the goodwill balance within our Retail Automotive, Retail Commercial Truck, and Other reportable segments was $1,615.7$1,598.6 million, $373.1$465.2 million, and $82.2$75.9 million, respectively.There is 0no goodwill recorded in our Non-Automotive Investments reportable segment.London Interbank Offered Rate (“LIBOR”),LIBOR, 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, (“BBSW”), or the New Zealand Bank Bill Benchmark Rate. To date, we have not experienced any material limitation with respect to the amount or availability of financing from any institution providing us vehicle financing. We also receive non-refundable credits from certain of our vehicle manufacturers, which are treated as a reduction of cost of sales as vehicles are sold.1.2%1.3% and 1.6%1.2% for the six months ended June 30, 2021,2022 and 2020,2021, 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 plan notes payable — non-trade” on our consolidated balance sheets and classify related cash flows as a financing activity on our consolidated statements of cash flows.usingby dividing net income attributable to Penske Automotive Group common stockholders andby the number of weighted average shares of voting common stock outstanding, including outstanding unvested equityrestricted stock awards which contain rights to non-forfeitable dividends. Diluted earnings per share is computed usingby dividing net income attributable to Penske Automotive Group common stockholders andby the number of weighted average shares of voting common stock outstanding, adjusted for anythe dilutive effects.impact of unissued shares paid to directors as compensation. A reconciliation of the number of shares used in19and 2020 follows:Three Months Ended
June 30,Six Months Ended
June 30,2022 2021 2022 2021 Weighted average number of common shares outstanding 75,793,239 80,691,996 76,501,402 80,649,824 Effect of non-participatory equity compensation 23,880 34,442 23,880 34,442 Weighted average number of common shares outstanding, including effect of dilutive securities 75,817,119 80,726,438 76,525,282 80,684,266 following and includes $500 million in aggregate principal amount of 3.75% senior subordinated notes due 2029 issued in June 2021, the proceeds of which were used to redeem our $500 million in aggregate principal amount of 5.50% senior subordinated notes due 2026 on June 24, 2021:June 30,
2022December 31,
2021U.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 545.4 544.7 3.75% senior subordinated notes due 2029 494.7 494.3 Australia capital loan agreement 23.3 26.6 Australia working capital loan agreement 6.9 — Mortgage facilities 366.9 353.8 Other 48.8 54.6 Total long-term debt 1,486.0 1,474.0 Less: current portion (78.5) (82.0) Net long-term debt $ 1,407.5 $ 1,392.0 which previously included $250.0 million in revolving loans solely for acquisitions, and up to an additional $50 million of letters of2023.2024. The interest rate on revolving loans is LIBOR plus 1.75%1.50%, subject to an incremental 1.25%1.50% for uncollateralized borrowings in excess of a defined borrowing base. On April 28, 2021, we amended the U.S. credit agreement to incorporate the previous six amendments, to consolidate the $250 million acquisition line referenced above into the general revolving line (leaving us unchanged at $800 million in total revolving capacity), and to provide us with additional covenant flexibility.202021,2022, we had 0no outstanding revolver borrowings under the U.S. credit agreement.the termination date of the facility, which is December 12, 2023. The revolving loans bear interest between defined LIBORSterling Overnight Index Average ("SONIA") plus 1.10% and defined LIBORSONIA plus 2.10%. The U.K. credit agreement also includes a £100.0 million “accordion” feature which allows the U.K. subsidiaries to request up to an additional £100.0 million of facility capacity. The lenders may agree to provide the additional capacity, and if not, the U.K. subsidiaries may add an additional lender, if available, to the facility to provide such additional capacity. As of June 30, 2021,2022, we had 0no outstanding revolver borrowings under the U.K. credit agreement.restrictlimit the ability of our U.K. subsidiaries to pay dividends, dispose of assets, incur additional indebtedness, repay other indebtedness, create liens on assets, make investments or acquisitions, and engage in mergers or consolidations. In addition, our U.K. subsidiaries are required to comply with defined ratios and tests, including a ratio of earnings before interest, taxes, amortization, and rental payments (“EBITAR”) to interest plus rental payments, a measurement of maximum capital expenditures, and a debt to EBITDA ratio. A breach of these requirements would give rise to certain remedies under the agreement, the most severe of which is the termination of the agreement and acceleration of any amounts owed.21BBSWBank Bill Swap Rate 30-day Bill Rate plus 3.0%. Irrespective of the term of the agreements, both agreements provide the lender with the ability to call the loans on 90 days’ notice. These facilities are also guaranteed by our U.S. parent company up to AU $50.0 million. As of June 30, 2021,2022, we had AU $39.1$33.8 million ($29.323.3 million) outstanding under the capital loan agreement and had AU $10.0 million ($7.56.9 million) outstanding borrowings under the working capital loan agreement.TheseWe also have a revolving mortgage facility through Toyota Motor Credit Corporation with a maximum borrowing capacity of $225 million contingent on property values and a borrowing capacity as of June 30, 2022, of $178.0 million. The facility bears interest at LIBOR plus 1.50% and expires in December 2025. As of June 30, 2022, we had $35.0 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 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, 2021,2022, we owed $398.9$366.9 million of principal under our mortgage facilities.10. Derivatives and HedgingPenske Australia sells vehicles, engines, parts and other products purchased from manufacturers in the U.S., Germany, and the U.K. In order to protect against exchange rate movements, Penske Australia enters into foreign exchange forward contracts against anticipated cash flows. The contracts are timed to mature when major shipments are scheduled to arrive in Australia and when receipt of payment from customers is expected. We classify our foreign exchange forward contracts as cash flow hedges and record them at fair value. We use Level 2 inputs to estimate the fair value of the foreign exchange forward contracts. The fair value of the contracts designated as hedging instruments was estimated to be an asset of $1.1 million and a liability of $2.5 million as of June 30, 2021, and December 31, 2020, respectively.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 is fixed at 0.5875%. This arrangement is in effect through April 2025. We may terminate this arrangement at any time, subject to the settlement at that time of the fair value of the swap arrangement.The interest rate swap is designated as a cash flow hedge, and the related gain or loss is deferred in stockholders’ equity as a component of Accumulated Other Comprehensive Income (Loss). Monthly contractual settlements of the position are recognized as Floorplan interest expense, net, in the Condensed Consolidated Statements of Operations. We had 0 gain or loss related to ineffectiveness recognized in the Condensed Consolidated Statements of Operations during the three and six months ended June 30, 2021. We use Level 2 inputs to estimate the fair value of the interest rate swap agreement. The fair value of the swap designated as a hedging instrument was estimated to be a net asset of $0.4 million as of June 30, 2021, and a net liability of $4.3 million as of December 31, 2020.2211.10. Commitments and Contingent Liabilities2021,2022, 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.$55.9$18.0 million of letters of credit outstanding as of June 30, 2021,2022, and have posted $21.8$21.6 million of surety bonds in the ordinary course of business.12. Equitysixthree months ended June 30, 2021,2022, we repurchased 348,2311,514,667 shares of our outstanding common stock for $28.1$156.2 million, or an average of $80.81$103.14 per share, all during the second quarter under our securities repurchase program approved by our Board of Directors. During the second quartersix months ended June 30, 2022, we repurchased 2,718,116 shares of 2021,our outstanding common stock for $275.4 million, or an average of $101.34 per share, under this program. In May 2022, our Board of Directors increased the authority delegated to management to repurchase our outstanding securities to $250 million, of which $167.9 million remained outstanding as of June 30, 2022. During the three months ended June 30, 2022, we also acquired 147,076148,440 shares of our common stock for $12.8$17.2 million, or an average of $86.94$115.97 per share, from employees in connection with a net share settlement feature of employee equity awards. In July 2021,2022, our Board of Directors increased the authority delegated to management to repurchase our outstanding securities to $250.0by $250 million. Prior to the increase, we had $142.5As a result, $330.6 million in remaining authorization.23remained outstanding and available for repurchases as of July 26, 2022.2021,2022 and 2020,2021, respectively, attributable to Penske Automotive Group common stockholders follows:Foreign
Currency
TranslationInterest Rate
SwapsOther Total Balance at March 31, 2022 $ (202.5) $ — $ 4.4 $ (198.1) Other comprehensive income (loss) before reclassifications (119.5) — 5.7 (113.8) Amounts reclassified from accumulated other comprehensive income (loss) — net of tax — — — — Net current period other comprehensive income (loss) (119.5) — 5.7 (113.8) Balance at June 30, 2022 $ (322.0) $ — $ 10.1 $ (311.9) Foreign
Currency
TranslationInterest Rate
SwapsOther 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) Three2020Foreign
Currency
TranslationInterest Rate
SwapsOther 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) 24Foreign
Currency
TranslationInterest Rate
SwapsOther 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) Six Months Ended June 30, 202014.13. Segment InformationPTS.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 6 operating segments: Eastern, Central, and Western United States, Used Vehicle SuperCentersDealerships United States, International, and Used Vehicle SuperCentersDealerships International. These operating segments have been aggregated into 1 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 servicesand 2020 follows:25Retail
AutomotiveRetail Commercial
TruckOther Non-Automotive
InvestmentsIntersegment
EliminationTotal 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 26Retail
AutomotiveRetail Commercial
Truck Other Non-Automotive
InvestmentsIntersegment
EliminationTotal Revenues 2022 $ 12,026.5 $ 1,561.0 $ 294.8 $ — $ — $ 13,882.3 2021 11,404.5 $ 1,060.0 $ 296.8 $ — $ — $ 12,761.3 Segment income 2022 $ 611.7 $ 110.8 $ 19.3 $ 255.4 $ — $ 997.2 2021 473.3 $ 67.2 $ 14.4 $ 156.4 $ — $ 711.3 “ItemItem 1A. Risk“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 “Forward-LookingExchange Commission, and "Forward-Looking Statements.”" We have acquired and initiated a number of businesses during the periods presented and addressed in this 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 when they commenced operations. Our period-to-period results of operations may vary depending on the dates of acquisitions or disposals.PAG operatesWe operate dealerships principally in the United States, the United Kingdom, Canada, Germany, and Italy, and isJapan, and we are one of the largest retailerretailers of commercial trucks in North America for Freightliner. PAGWe also distributesdistribute and retailsretail commercial vehicles, diesel and gas engines, power systems, and related parts and services principally in Australia and New Zealand. We employ over 26,000 people worldwide. Additionally, PAG ownswe own 28.9% of Penske Transportation Solutions, a business that employs over 40,000 people worldwide and manages a fleet of over 330,000386,000 vehicles providing innovative transportation, supply chain, and technology solutions to North American fleets. We employ over 23,000 people worldwide.COVID-19 DisclosureOverview – In March 2020, COVID-19 was declared a global pandemic by the World Health Organization. The outbreak of the COVID-19 pandemic across the globe adversely impacted each of our markets and the global economy, leading to disruptions in our business. While the COVID-19 pandemic impacted all of our markets, we have experienced improved business conditions and improved financial results primarily driven by our cost cutting measures and increased gross profit on vehicles sold due in part to increased demand, coupled with lower inventory due to production shortages experienced by our vehicle manufacturers.In response to the COVID-19 pandemic, the U.K. reinstated shelter-in-place orders which required our dealership showrooms to remain closed during the first quarter of 2021. These shelter-in-place orders largely expired on April 12, 2021, and most of the remaining restrictions expired on July 19, 2021. We continued to conduct sales through our online tools, which allowed vehicle sales without showroom access. If shelter-in-place orders are re-enacted or other restrictions are placed on our business, we may be adversely impacted.Risks and Uncertainties – The full impact that the COVID-19 pandemic will have on our business cannot be predicted at this time due to numerous uncertainties, including the duration of the outbreak, travel restrictions, business closures, the effectiveness of actions taken to contain the disease, the distribution rate and acceptance rate of a vaccine, the effect of government assistance programs, production levels from our manufacturing partners, and other unintended consequences. This impact could include changes in customer demand, our relationship with, and the financial and operational capacities of, vehicle manufacturers, captive finance companies and other suppliers, workforce availability, risks associated with our indebtedness (including available borrowing capacity, compliance with financial covenants and ability to refinance or repay indebtedness on favorable terms), the adequacy of our cash flow and earnings and other conditions which may affect our liquidity, and disruptions to our technology network and other critical systems, including our dealer management systems and software or other facilities or equipment.We believe that business disruption relating to the COVID-19 pandemic may continue to negatively impact the global economy and may affect our businesses as outlined above, or in other manners including supply chain disruptions, all of which would adversely impact our business and results of operations.272021,2022, our business generated $12.8$13.9 billion in total revenue, which is comprised of approximately $11.4$12.0 billion from retail automotive dealerships, $1.1$1.6 billion from retail commercial truck dealerships, and $296.8$294.8 million from commercial vehicle distribution and other operations. We generated $2.1$2.5 billion in gross profit, which is comprised of $1.8$2.1 billion from retail automotive dealerships, $182.7$277.2 million from retail commercial truck dealerships, and $72.9$80.8 million from commercial vehicle distribution and other operations.believe we are one of the second largest global automotive retailer headquartered in the U.S.retailers as measured by the $17.9$22.5 billion in total retail automotive dealership revenue we generated in 2020.2021. As of June 30, 2021,2022, we operated 305332 retail automotive franchised dealerships, of which 144 franchised dealerships152 are located in the U.S. and 161 franchised dealerships180 are located outside of the U.S. The franchised dealerships outside the U.S. are located primarily in the U.K. InWe 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, 2021, we retailed and wholesaled more than 294,000 vehicles.2022. We are diversified geographically with 58%56% of our total retail automotive dealership revenues in the six months ended June 30, 2021,2022, generated in the U.S. and Puerto Rico and 42%44% generated outside the U.S. We offer over 35 vehicle brands with 71%70% of our retail automotive franchised dealership revenue in the six months ended June 30, 2021,2022, generated from premium brands, such as Audi, BMW, Land Rover, Mercedes-Benz, and Porsche.also operate Used Vehicle SuperCenters in the U.S.will continue to provide new vehicle customer service at our U.K. Mercedes Benz dealerships, and the U.K. which retailagency model does not structurally change our used vehicle sales operations or service and wholesale used vehicles underparts operations. See Part II, Item 1A. one price, “no-haggle” methodology under the CarShop brand. Our operations in the U.S. consistdiscussion of seven retail locations operating in Pennsylvania and New Jersey. Our operations in the U.K. consist of twelve retail locations and a vehicle preparation center. agency. second quarter of 2021, we opened one CarShop location in the U.S. and one location in the U.K. We expect to open four additional CarShop Used Vehicle SuperCenters by the end of 2021. For the three and six months ended June 30, 2021, these Used Vehicle SuperCenters retailed 18,7422022, we acquired ten retail automotive franchises, consisting of six franchises in the U.K. and 30,137 unitsfour franchises in the U.S., and generated $408.2 millionwe 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 $650.8 millionthree aftersales locations in revenue, respectively.89.4%86.6% of our total revenues and 87.8%85.5% of our total gross profit in the six months ended June 30, 2021. known as Premier Truck Group (“PTG”) offering primarily Freightliner and Western Star trucks (both Daimler brands) with locations in Texas, Oklahoma, Tennessee, Georgia, Utah, Idaho, Kansas, Missouri,across nine U.S. states and Ontario, Canada. In April 2021,During February 2022, we acquired Kansas City Freightliner (“KCFL”),TEAM Truck Centres, a retailer of heavy- and medium-duty Freightliner and Western Star commercial trucks located in Kansas and Missouri. KCFL addedOntario, Canada representing four full-service dealerships, four parts and service centers, and two collision centers to PTG’s existing operations.dealerships. As of June 30, 2021,2022, PTG operated 3539 locations which provide services such assell new and used truck sales,trucks, parts and service, and collision repair.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. We retailed and wholesaled more than 9,100 trucks in the six months ended June 30, 2022. This business represented 8.3%11.2% of our total revenues and 8.7%11.2% of our total gross profit in the six months ended June 30, 2021. We are 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, MTU Onsite Energy, Rolls Royce Power Systems, and Bergen Engines. This business, known as Penske Australia offers products across the on- and off-highway markets, including in the construction,trucking, mining, marine, defense, and 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 2.3%2.2% of our total revenues and 3.5%3.3% of our total gross profit in the six months ended June 30, 2021.2022.28L.PL.P. (“PTL”). PTL is owned 41.1% by Penske Corporation, 28.9% by us, and 30.0% by Mitsui & Co., Ltd. (“Mitsui”). We account for our investment in PTL under the equity method, and we therefore record our share of PTL’s earnings on our statements of income under the caption “Equity in earnings of affiliates,” which also includes the results of our other equity method investments. Penske Transportation Solutions (“PTS”) is the universal brand name for PTL’s various business lines through which it is capable of meeting customers’ needs across the supply chain with a broad product offering that includes full-service truck leasing, truck rental, and contract maintenance along with logistic services, such as dedicated contract carriage, distribution center management, transportation management, lead logistics provider services, and dry van truckload carrier services. We recorded $156.2$255.1 million and $43.5$156.2 million in equity earnings from this investment for the six months ended June 30, 2022 and 2021, respectively. We believe the increase in our PTS equity earnings is due to strong demand and 2020, respectively.OutlookAutomotive Dealership.Automotive. During the six months ended June 30, 2021,2022, U.S. industry new light vehicle sales increased 29.2%decreased 18.3%, as compared to the same period last year, to 8.46.8 million units.units, and U.K. new vehicle registrations decreased 11.9%, as compared to the same period last year, to 802,079 registrations. We believe the year over year increasedecrease in overall sales in the U.S. is primarily attributable to improved consumer confidence and a stronger economy as compared to the same time last year at the onset of the COVID-19 pandemic when shelter-in-place rules limited operations in many states. Additionally, a lower supply of new vehicles available for sale due to disruptions in the supply chain as discussed below contributed to higher vehicle gross profit on both new and used vehicles sold, which, coupled with cost cutting measures enacted in response tocaused by the COVID-19 pandemic, resulted in improved profitability and earnings.Many of our principal vehicle manufacturers have announced production disruptions caused by a shortage of automotive microchips or other components. The shortagecomponents, and the recent war in Ukraine. Our new vehicle days’ supply is reported21 as of June 30, 2022, compared to be due to the overall demand for microchips in the global economy and production disruptions caused by staffing and other COVID-19 related issues. According to IHS Markit, global automotive production was reduced by approximately 2.3 million units during the second quarter17 as of 2021 due to the shortage. WeDecember 31, 2021. While we expect the lower inventories of new vehicles to continue untilto have adequate levels of used vehicles for sale (our used vehicle days’ supply is 42 as of June 30, 2022, compared to 60 as of December 31, 2021), prolonged shortages could result in lower new vehicle sales volumes which could impact the supplyavailability and affordability of certain components used to manufacture automobiles improves. The National Automobile Dealers Association has predicted sales for the U.S. light vehicle market to be approximately 16.3 million units in 2021.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. OurWe expect lower inventories of new vehicle days’ supply is 26 as compared to 50 as of December 31, 2020. While we expectvehicles and parts disruptions to continue until the supply of certain components used to have normal levelsmanufacture vehicles improves. When the supply of used vehicles for sale (our currentimproves, we may experience reduced new and used vehicle days’ supply is 38 as compared to 48 as of December 31, 2020), prolonged shortages could result in lower new vehiclegross profit together with higher sales volumes which could adversely affect us.volumes.2021,2022, our premium/luxury unit sales, which account for over 93% of our U.K. new vehicle registrations increased 39.2%,unit sales, decreased 9.3% as compared to the same period last year, to 909,973 registrations.Premium/luxury unit sales, which account for over 92% of our U.K. new unit sales, increased 40.6% during the six months ended June 30, 2021, as compared to a 39.2% increase21.4% decrease for the premium/luxury U.K. market and an 11.9% decrease for the overall market. We believeU.K. market over the same prior year over year increase in overall salesperiod, as many of the premium brands we represent in the U.K. is primarily attributable to improved consumer confidence and a stronger economy as compared to the same time last year at the onset of the COVID-19 pandemic when shelter-in-place rules limited operations. Additionally, we experienced improved profitability and earnings year over year as a lower supply of new vehicles available for sale due tomarket were impacted by production disruptions infrom the supply chain as discussed above contributed to higher vehicle gross profits on both new and used vehicles sold, cost cutting measures, and our efforts to conduct sales digitally. In response to the COVID-19 pandemic, the U.K. reinstated shelter-in-place orders which required our dealership showrooms to remain closed during the first quarterchallenges. the uncertainty of residual values, potentially higher taxes on diesel-powered vehicles and consumer confusionuncertainty 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 suggestedhave 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 of diesel-powered vehicles decreased 21.7%50.6%, and non-diesel vehicles increased 52.8%decreased 7.4%, during the six months ended June 30, 2021 ended,2022, as compared to the same period last year.292021,2022, North American sales of Class 6-8 medium- and heavy-duty trucks, the principal vehicles for our PTG business, increased 29.7%1.0% from the same period last year to 204,557206,480 units. The Class 6-7 medium-duty truck market increased 16.1%0.5% from the same period last year to 66,20066,459 units, and Class 8 heavy-duty trucks, the largest North American market, increased 37.4% to 138,357 units1.2% from the same period last year.year to 140,021 units. The truck market is experiencing the same production issues noted above as the Class 86-8 medium- and heavy-duty market in North America is expectedtruck backlog decreased only 2.6% from the same period last year to increase from 233,000 units in 2020333,796 units. We expect lower inventories of new commercial trucks and parts disruptions to approximately 294,000 units in 2021 representing an increasecontinue until the supply of 28% driven by strong freight demand, an improving economy,certain components used to manufacture commercial trucks improves. When the supply of commercial trucks improves, we may experience reduced new and replacement demand.Distribution. Distribution and Other. Penske Australia operates principally in the Australian and New Zealand heavy and medium-duty truck markets. During the six months ended June 30, 2021,2022, the Australian heavy-duty truck market reported sales of 5,7906,916 units, representing an increase of 17.7%19.4% from the same period last year, while the New Zealand market reported sales of 1,4481,668 units, representing an increase of 15.4%15.2% from the same period last year. We expect the commercial vehicle and power systems markets to remain resilient in 2021 and continuing benefits from sales of replacement or upgraded engines.the PTS businessPTS's revenue is generated by multi-year contracts for full-service leasing, contract maintenance,maintenance, and logistics services. We expect continued resilient performance throughout 2021in 2022 as PTS has experienced increased levels of utilizationsstrong demand and profitability for commercial rental trucks and full-service leasing, as business conditions improvedwell as compared to the same period last year.used vehicle sales. See Part II, “Item 1A. Risk Factors.”together represent over 95% and 75%70% of our revenue and our earnings before taxes, respectively. Income from our PTS investment represents over 20%25% of our earnings before taxes. New and used vehicle revenues typically include sales to retail 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 OEMs.increased $3,336.4 million and $629.8decreased $80.6 million, or 91.4%1.2%, and 113.9%increased $54.3 million, or 4.6%, respectively, during the three months ended June 30, 2021,2022, and $4,101.1 million and $766.3increased $1,121.0 million, or 47.4%8.8%, and 57.6%increased $372.8 million, or 17.8%, respectively, during the six months ended June 30, 2021,2022, compared to the same periods in 2020. See “COVID-19 Disclosure” above. increaseddecreased revenue and gross profit by $313.2$245.2 million and $47.3$33.3 million, respectively, for the three months ended June 30, 2021,2022, and increaseddecreased revenue and gross profit by $514.9$279.8 million and $76.8$36.6 million, respectively, for the six months ended June 30, 2021.2022. Foreign currency average rate fluctuations increaseddecreased earnings per share from continuing operations by approximately $0.11 per share for the three302021,2022, and increaseddecreased earnings per share from continuing operations by approximately $0.16 per share for the six months ended June 30, 2021.2022. Excluding the impact of foreign currency average rate fluctuations, revenue and gross profit increased 82.8%2.4% and 105.4%increased 7.4%, respectively, for the three months ended June 30, 2021,2022, and increased 41.4%11.0% and 51.9%increased 19.5%, respectively, for the six months ended June 30, 2021.we believe 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.London Interbank Offered Rate (“LIBOR”),LIBOR, 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.both the U.S. and U.K. have announced their intention to stop compelling banks to submit rates for the calculation of LIBOR, ending after 2021. InJune 30, 2023, for the U.S., we expect the Secured Overnight Financing Rate (“SOFR”) will be adopted in lieu of LIBOR. In the U.K., we expect the Sterling Overnight Indexed Average (“SONIA”)LIBOR tenors that are relevant to be adopted.our business. Our senior secured revolving credit facilitiesfacility in the U.S. and U.K., and 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.K. credit agreement 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.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.recovery time frame foreffect of COVID-19 on the global economy in light of the COVID-19 pandemic;economy; the distribution rate and acceptance of vaccines for COVID-19; our ability to react effectively to changing business conditions in light of the COVID-19 pandemic; the rate of inflation; our ability to consummate and integrate acquisitions; the level of vehicle sales in the markets where we operate; our ability to obtain 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; our abilitychanges in the retail model either from direct sales by manufacturers, transition to increasean agency model of sales, sales by online competitors, or from the expansion of higher margin products, especially service and parts sales;electric vehicles; 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; the success of our distribution of commercial vehicles, engines, and power systems; and the return realized from our investments in various joint ventures and other non-consolidated investments. See Part II, “Item 1A. Risk Factors” and “Forward-Looking Statements” below.31and Results of Operations” in our 2020 annual report2021 Annual Report on Form 10-K for additional detail and discussion of these critical accounting policies and estimates. There have been no material changes in critical accounting policies and estimates as described in our most recent annual report.2019,2020, the results of the acquired entity would be included in annual same-store comparisons beginning with the year ended December 31, 2021,2022, and in quarterly same-store comparisons beginning with the quarter ended June 30, 2020.The results for the three and six months ended June 30, 2021, include a tax expense of $8.8 million, or $0.11 per share, related to revaluation of our U.K. deferred tax assets and liabilities due to an increase in the U.K. corporate tax rate from 19% currently to 25%, effective April 1, 2023. We also incurred a $17.0 million expense in connection with the redemption of our 5.50% senior subordinated notes due 2026 during the second quarter of 2021, consisting of a $13.8 million redemption premium and the write-off of $3.2 million of unamortized debt issuance costs, resulting in an after-tax charge of $12.6 million, or $0.16 per share.The results for the three and six months ended June 30, 2021, have been impacted by the COVID-19 pandemic, and each of the items mentioned below should be reviewed in light of our discussion under “COVID-19 Disclosure.”2022 vs. 2021 New Vehicle Data 2022 2021 Change % Change New retail unit sales 45,515 57,789 (12,274) (21.2) % Same-store new retail unit sales 42,980 57,715 (14,735) (25.5) % 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 % Gross profit — new $ 312.3 $ 276.6 $ 35.7 12.9 % Same-store gross profit — new $ 294.5 $ 275.8 $ 18.7 6.8 % 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 % Gross margin % — new 12.8 % 9.8 % 3.0 % 30.6 % Same-store gross margin % — new 12.8 % 9.8 % 3.0 % 30.6 % increaseddecreased from 20202021 to 2021 primarily2022 due to a 27,53414,735 unit, or 91.5%25.5%, increasedecrease in same-store new retail unit sales.sales, partially offset by a 2,461 unit increase from net dealership acquisitions. Same-store units increased 78.8%decreased 30.1% in the U.S. and 127.5%decreased 15.4% internationally. Overall, new units increased 75.5%unit sales decreased 27.0% in the U.S. and 124.9%decreased 8.3% internationally. We believe the increasedecrease in same-store unit sales is due to a stronger economic outlook, liftinglower supply of lockdown restrictions due to COVID-19, favorable interest rates, and improved levels of consumer confidence when compared to the second quarter of 2020 at the onset of the COVID-19 pandemic.new vehicles available for sale, which has been caused by supply chain issues discussed above.32Revenuesincreaseddecreased from 20202021 to 2021 primarily2022 due to a $1,431.9$499.3 million, or 104.9%17.8%, increasedecrease in same-store revenues.revenues, partially offset by a $134.0 million increase from net dealership acquisitions. Excluding $98.3$92.2 million of favorableunfavorable foreign currency fluctuations, same-store new retail revenue increased 97.7%decreased 14.5%. The decrease in same-store revenue increase is due to the increasedecrease in same-store new retail unit sales, which increaseddecreased revenue by $1,336.6$716.4 million, coupled withpartially offset by a $3,166$5,052 per unit increase in same-store comparative average selling pricesprice (including a $1,706$2,145 per unit increasedecrease attributable to favorableunfavorable foreign currency fluctuations), which increased revenue by $95.3$217.1 million. We believe the increase in same-store comparative average selling pricesprice is due to increased customer demand and a lower supply of new vehicles available for sale, which has been caused by production disruptions resulting from a shortagesupply chain issues discussed above.$170.4from 2021 to 2022 due to an $18.7 million, or 160.5%, from 2020 to 2021 primarily due to a $169.6 million, or 161.1%6.8%, increase in same-store gross profit.profit, coupled with a $17.0 million increase from net dealership acquisitions. Excluding $8.7$11.0 million of favorableunfavorable foreign currency fluctuations, same-store gross profit increased 152.8%10.8%. The increase in same-store gross profit increase is due to the increase in same-store new retail unit sales, which increased gross profit by $131.4 million, coupled with a $1,271$2,072 per unit increase in thesame-store comparative average gross profit per new vehicle retailed (including a $150$257 per unit increasedecrease attributable to favorableunfavorable foreign currency fluctuations), which increased gross profit by $38.2$89.1 million, partially offset by the decrease in same-store new retail unit sales, which decreased gross profit by $70.4 million. TheWe believe the increase in same-store comparative average gross profit per new vehicle retailedunit is attributed to increased customer demand and a lower supply of new vehicles available for sale, which has been caused by production disruptions resulting from a shortage of automotive microchips.2022 vs. 2021 Used Vehicle Data 2022 2021 Change % Change Used retail unit sales 69,994 74,708 (4,714) (6.3) % Same-store used retail unit sales 66,479 74,267 (7,788) (10.5) % Used retail sales revenue $ 2,387.8 $ 2,327.6 $ 60.2 2.6 % Same-store used retail sales revenue $ 2,278.0 $ 2,316.1 $ (38.1) (1.6) % Used retail sales revenue per unit $ 34,114 $ 31,156 $ 2,958 9.5 % Same-store used retail sales revenue per unit $ 34,267 $ 31,186 $ 3,081 9.9 % Gross profit — used $ 155.2 $ 194.1 $ (38.9) (20.0) % Same-store gross profit — used $ 148.6 $ 193.2 $ (44.6) (23.1) % Average gross profit per used vehicle retailed $ 2,218 $ 2,598 $ (380) (14.6) % Same-store average gross profit per used vehicle retailed $ 2,235 $ 2,602 $ (367) (14.1) % Gross margin % — used 6.5 % 8.3 % (1.8) % (21.7) % Same-store gross margin % — used 6.5 % 8.3 % (1.8) % (21.7) % increaseddecreased from 20202021 to 20212022 due to a 31,3187,788 unit, or 74.7%10.5%, increasedecrease in same-store used retail unit sales, coupled withpartially offset by a 7843,074 unit increase from net dealership acquisitions. Same-storeOur same-store units increased42.1%decreased 14.7% in the U.S. and 121.3%decreased 6.7% internationally. Same-store retail units for our U.S. and U.K. CarShop Used Vehicle SuperCentersused vehicle dealerships decreased 32.4% and increased 104.2% and 195.8%10.6%, respectively. Overall, our used units increased 41.1%decreased 11.2% in the U.S. and 124.8%decreased 1.9% internationally. We believe the increasedecrease in same-store unit sales is primarily due to a stronger economic outlook, liftinghigher used unit prices attributable to lower overall vehicle inventory availability for sale, impacting the affordability of lockdown restrictions due to COVID-19, favorable interest rates, and improved levels of consumer confidence when compared to the second quarter of 2020 at the onset of the COVID-19 pandemic, coupled with consumers looking to acquire used vehicles to compensate for the lower supply of new vehicles available for salecustomers, which has been caused by production disruptions resulting from a shortage of automotive microchips.33Revenues20202021 to 20212022 due to a $1,144.3 million, or 99.4%, increase in same-store revenues, coupled with a $17.3$98.3 million increase from net dealership acquisitions.acquisitions, partially offset by a $38.1 million, or 1.6%, decrease in same-store revenues. Excluding $138.7$139.3 million of favorableunfavorable foreign currency fluctuations, same-store used retail revenue increased 87.3%4.4%. The decrease in same-store revenue increase is primarily due to the increasedecrease in same-store used retail unit sales, which increaseddecreased revenue by $981.3$242.9 million, coupled withpartially offset by a $3,886$3,081 per unit increase in same-store comparative average selling pricesprice (including a $1,893$2,095 per unit increasedecrease attributable to favorableunfavorable foreign currency fluctuations), which increased revenue by $163.0$204.8 million. The average sales price per unit for our CarShop Used Vehicle SuperCentersused vehicle dealerships increased 12.0%4.3% to $18,533.$19,331. We believe the increase in same-store comparative average selling pricesprice 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 production disruptions resulting from a shortage of automotive microchips.supply chain issues discussed aboveincreaseddecreased from 20202021 to 20212022 due to a $136.3$44.6 million, or 245.6%23.1%, increasedecrease in same-store gross profit, coupled withpartially offset by a $2.0$5.7 million increase from net dealership acquisitions. Excluding $10.7$7.8 million of favorableunfavorable foreign currency fluctuations, same-store gross profit increased 226.3%decreased 19.0%. The decrease in same-store gross profit increase is due to a $367 per unit decrease in same-store comparative average gross profit (including a $118 per unit decreaseincreasedecrease in same-store used retail unit sales, which increaseddecreased gross profit by $81.9 million, coupled with a $1,296 per unit increase in average gross profit per used vehicle retailed (including a $146 per unit increase attributable to favorable foreign currency fluctuations), which increased gross profit by $54.4$20.2 million. The average gross profit per unit for our CarShop Used Vehicle SuperCenters increased 27.9%used vehicle dealerships decreased 43.2% to $1,355. The increase$770. We believe the decrease in same-store comparative average gross profit per used vehicle retailedunit is primarily due to consumers looking to acquirethe increased cost of acquiring used vehicles to compensate forresulting from the lower supply of new vehicles available for sale, caused by production disruptions resulting from a shortage of automotive microchips.2022 vs. 2021 Finance and Insurance Data 2022 2021 Change % Change Total retail unit sales 115,509 132,497 (16,988) (12.8) % Total same-store retail unit sales 109,459 131,982 (22,523) (17.1) % Finance and insurance revenue $ 221.4 $ 212.3 $ 9.1 4.3 % Same-store finance and insurance revenue $ 213.5 $ 211.7 $ 1.8 0.9 % 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 % $115.2 million, or 118.6%, from 20202021 to 2021 primarily2022 due to a $114.1$7.3 million increase from net dealership acquisitions, coupled with a $1.8 million, or 119.1%0.9%, increase in same-store revenues. Excluding $8.8$9.2 million of favorableunfavorable foreign currency fluctuations, same-store finance and insurance revenue increased 109.9%5.2%. The increase in same-store revenue increase is due to a $347 per unit increase in same-store comparative average finance and insurance revenue (including an $84 per unit decrease attributable to unfavorable foreign currency fluctuations), which increased revenue by $38.0 million, partially offset by the increasedecrease in same-store retail unit sales, which increaseddecreased revenue by $94.4 million, coupled with a $274 per unit increase in comparative average finance and insurance revenue per unit (including a $68 per unit increase attributable to favorable foreign currency fluctuations),which increased revenue by $19.7$36.2 million. Finance and insurance revenue per unit increased 24.2%30.2% in the U.S. and 15.0%increased 8.0% 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 prices.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.342022 vs. 2021 Service and Parts Data 2022 2021 Change % Change Service and parts revenue $ 597.0 $ 546.2 $ 50.8 9.3 % Same-store service and parts revenue $ 569.0 $ 544.8 $ 24.2 4.4 % Gross profit — service and parts $ 359.2 $ 337.0 $ 22.2 6.6 % Same-store service and parts gross profit $ 343.6 $ 335.9 $ 7.7 2.3 % Gross margin % — service and parts 60.2 % 61.7 % (1.5) % (2.4) % Same-store service and parts gross margin % 60.4 % 61.7 % (1.3) % (2.1) % 20202021 to 2021,2022, with an increase of 44.4%12.7% in the U.S. and 95.4%an increase of 2.6% internationally. The increase in service and parts revenue is primarily due to a $203.5$26.6 million increase from net dealership acquisitions, coupled with a $24.2 million, or 59.9%4.4%, increase in same-store revenues. Excluding $19.4$20.6 million of favorableunfavorable foreign currency fluctuations, same-store revenue increased 54.1%8.2%. The increase in same-store revenue increase is due to a $153.3$35.1 million, or 65.6%9.0%, increase in customer pay revenue and a $39.4$3.6 million, or 46.5%, increase in warranty revenue, and a $10.8 million, or 51.4%11.2%, 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 to a stronger economic outlook, improved levels of consumer confidence, and the lifting of many COVID-19 restrictions resulting in increases in vehicle miles traveled when compared to the second quartersame period last year, coupled with the prolonged reliance on older vehicles resulting from the limited supply of 2020 at the onsetnew vehicles, which generates additional service and parts revenues.20202021 to 2021 primarily2022 due to a $136.3$14.5 million increase from net dealership acquisitions, coupled with a $7.7 million, or 68.7%2.3%, increase in same-store gross profit. Excluding $11.7$12.2 million of favorableunfavorable foreign currency fluctuations, same-store gross profit increased 62.8%5.9%. The increase in same-store gross profit increase is due to the increase in same-store revenues, which increased gross profit by $125.4$14.7 million, coupled withpartially offset by a 3.2% increase1.3% decrease in same-store gross margin, which increaseddecreased gross profit by $10.9$7.0 million. The increase in same-store gross profit increase is due to an $80.4a $15.3 million, or 73.8%8.1%, increase in customer pay gross profit, partially offset by a $34.6$7.0 million, or 81.0%10.2%, increasedecrease in warranty gross profit and a $0.6 million, or 0.8%, decrease in vehicle preparation and body shop gross profit, and a $21.3 million, or 45.3%, increase in warranty gross profit.2022 vs. 2021 New Commercial Truck Data 2022 2021 Change % Change New retail unit sales 3,531 3,314 217 6.5 % Same-store new retail unit sales 3,216 3,314 (98) (3.0) % New retail sales revenue $ 447.3 $ 399.2 $ 48.1 12.0 % Same-store new retail sales revenue $ 406.7 $ 399.2 $ 7.5 1.9 % New retail sales revenue per unit $ 126,676 $ 120,445 $ 6,231 5.2 % Same-store new retail sales revenue per unit $ 126,458 $ 120,445 $ 6,013 5.0 % Gross profit — new $ 26.5 $ 19.6 $ 6.9 35.2 % Same-store gross profit — new $ 23.1 $ 19.6 $ 3.5 17.9 % Average gross profit per new truck retailed $ 7,504 $ 5,909 $ 1,595 27.0 % Same-store average gross profit per new truck retailed $ 7,178 $ 5,909 $ 1,269 21.5 % Gross margin % — new 5.9 % 4.9 % 1.0 % 20.4 % Same-store gross margin % — new 5.7 % 4.9 % 0.8 % 16.3 % 20202021 to 20212022 due to a 707315 unit increase from net dealership acquisitions, partially offset by a 98 unit, or 34.3%3.0%, decrease in same-store new retail unit sales. We believe the decrease in same-store unit sales is primarily due to a limited supply of new trucks available for sale, which has been caused by supply chain issues discussed above.544$3.4 million increase from net dealership acquisitions. The increase in same-store gross profit is due to a $1,269 per unit increase 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 million. We believe the increase in same-store comparative average gross profit per unit is attributed to increased customer demand and a limited supply of new trucks available for sale, which has been caused by supply chain issues discussed above.2022 vs. 2021 Used Commercial Truck Data 2022 2021 Change % Change Used retail unit sales 643 832 (189) (22.7) % Same-store used retail unit sales 583 832 (249) (29.9) % Used retail sales revenue $ 78.7 $ 59.0 $ 19.7 33.4 % Same-store used retail sales revenue $ 71.5 $ 59.0 $ 12.5 21.2 % Used retail sales revenue per unit $ 122,415 $ 70,932 $ 51,483 72.6 % Same-store used retail sales revenue per unit $ 122,707 $ 70,932 $ 51,775 73.0 % Gross profit — used $ 5.9 $ 9.5 $ (3.6) (37.9) % Same-store gross profit — used $ 5.7 $ 9.5 $ (3.8) (40.0) % Average gross profit per used truck retailed $ 9,133 $ 11,381 $ (2,248) (19.8) % Same-store average gross profit per used truck retailed $ 9,850 $ 11,381 $ (1,531) (13.5) % Gross margin % — used 7.5 % 16.1 % (8.6) % (53.4) % Same-store gross margin % — used 8.0 % 16.1 % (8.1) % (50.3) % increasedecrease in same-store unit sales35stronger economic outlook, favorable interest rates,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 freight rates, and improved levelsused unit prices impacting the affordability of consumer confidence when compared to the second quarter of 2020 at the onset of the COVID-19 pandemic.20202021 to 20212022 due to a $104.4$12.5 million, or 44.3%21.2%, increase in same-store revenues, coupled with a $59.3$7.2 million increase from net dealership acquisitions. The increase in same-store revenue increase is due to a $51,775 per unit increase in same-store comparative average selling price, which increased revenue by $30.2 million, partially offset by the decrease in same-store used retail unit sales, which decreased revenue by $17.7 million. We believe the increase in same-store new retail unit sales, which increased revenue by $86.8 million, coupled with an $8,546 per unit increase in comparative average selling prices,price is primarily due to a limited supply of used trucks available for sale, which increased revenuehas been caused by $17.6 million.increaseddecreased from 20202021 to 20212022 due to an $8.3a $3.8 million, or 86.5%40.0%, increasedecrease in same-store gross profit, coupled withpartially offset by a $1.7$0.2 million increase from net dealership acquisitions. The decrease in same-store gross profit increase is due to the increasedecrease in newsame-store used retail unit sales, which increaseddecreased gross profit by $4.5$2.9 million, coupled with a $1,822$1,531 per unit increasedecrease in same-store comparative average gross profit, which decreased gross profit by $0.9 million. We believe the decrease in same-store comparative average gross profit per new truck retailed, which increased gross profit by $3.8 million. The increase in gross profitunit is largelyprimarily due to stronger market demand as discussed above.UnitsRetail unit salesthe increased cost of acquiring used trucks resulting from the lower supply of new trucks available for sale, which decreased our gross margin.2022 vs. 2021 Service and Parts Data 2022 2021 Change % Change Service and parts revenue $ 219.6 $ 157.3 $ 62.3 39.6 % Same-store service and parts revenue $ 193.2 $ 157.1 $ 36.1 23.0 % Gross profit — service and parts $ 92.3 $ 66.3 $ 26.0 39.2 % Same-store service and parts gross profit $ 81.6 $ 66.2 $ 15.4 23.3 % Gross margin % — service and parts 42.0 % 42.1 % (0.1) % (0.2) % Same-store service and parts gross margin % 42.2 % 42.1 % 0.1 % 0.2 % 20202021 to 20212022 due to a 30 unit, or 3.9%, increase in same-store retail unit sales, coupled with a 29 unit increase from net dealership acquisitions. We believe the increase in used truck unit sales is attributable to higher demand for used vehicles as the higher freight rates and the forecast for an improving economy have driven higher Class 8 orders and a 182.7% increase in order backlog, causing our customers to turn to the used truck market to meet their requirements.RevenuesUsed commercial truck retail sales revenue increased from 2020 to 2021 due to a $19.9$36.1 million, or 53.9%23.0%, increase in same-store revenues, coupled with a $2.2 million increase from net dealership acquisitions. The same-store revenue increase is due to a $23,002 per unit increase in comparative average selling prices, which increased revenue by $17.8 million, coupled with the increase in same-store used retail unit sales, which increased revenue by $2.1 million. We believe the increase in used retail sales revenue per unit is due to increased demand for used trucks in the market as discussed above.Gross ProfitUsed commercial truck retail gross profit increased from 2020 to 2021 due to a $12.0 million, or 413.8%, increase in same-store gross profit, coupled with a $0.4 million increase from net dealership acquisitions. The same-store gross profit increase is due to a $15,007 per unit increase in average gross profit per used truck retailed, which increased gross profit by $11.7 million, coupled with the increase in same-store used retail unit sales, which increased gross profit by36$0.3 million. We believe the increase in average gross profit per used truck retailed is attributable to increased demand for used trucks in the market as discussed above.RevenuesService and parts revenue increased from 2020 to 2021 due to a $24.7 million, or 22.1%, increase in same-store revenues, coupled with a $21.0$26.2 million increase from net dealership acquisitions. Customer pay work represents represented79.9%81.4% of 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 increase is due to a $22.7$30.9 million, or 26.4%24.8%, increase in customer pay revenue, a $1.8$5.1 million, or 8.3%20.5%, increase in warranty revenue, and a $0.2$0.1 million, or 3.4%1.5%, increase in body shop revenue. We believe the same-store increase in same-store service and parts revenue is primarily due to higher freight rates and the increasedprolonged reliance on usedolder trucks resulting from the limited supply of new trucks, which generates additional service and parts revenues.20202021 to 20212022 due to an $8.8a $15.4 million, or 17.9%23.3%, increase in same-store gross profit, coupled with an $8.3a $10.6 million increase from net dealership acquisitions. The increase in same-store gross profit increase is due to the increase in same-store revenues, which increased gross profit by $10.4$15.3 million, partially offset bycoupled with a 1.5% decrease0.1% increase in same-store gross margin, which decreasedincreased gross profit by $1.6$0.1 million. The increase in same-store gross profit increase is due to an $8.2a $12.8 million, or 26.3%27.7%, increase in customer pay gross profit and a $0.9$2.6 million, or 7.7%18.3%, increase in warranty gross profit, and partially offset by a $0.3 million, or 5.0%, decrease in body shop gross profit.2022 vs. 2021 Penske Australia Data 2022 2021 Change % Change Commercial vehicle units (wholesale and retail) 357 436 (79) (18.1) % Power system units 375 267 108 40.4 % Sales revenue $ 140.9 $ 164.6 $ (23.7) (14.4) % Gross profit $ 41.0 $ 39.6 $ 1.4 3.5 % Penske AustraliaThis business generated $164.6$140.9 million of revenue during the three months ended June 30, 2021,2022, compared to $98.4$164.6 million of revenue in the prior year, an increasea decrease of 67.3%14.4%. ItThis business also generated $39.6$41.0 million of gross profit during the three months ended June 30, 2021,2022, compared to $26.4$39.6 million of gross profit in the prior year, an increase of 50.0%3.5%.These improved results from 20202021 area decrease in commercial vehicle unit sales due to a limited supply of commercial vehicles available for sale, which we believe has been caused by supply chain issues discussed above. Excluding $3.3 million of unfavorable foreign currency fluctuations, gross profit increased 11.9% primarily due to an increase in commercial demand for trucks in Australiavehicle gross profit per unit and an increase in service and parts. Excluding $23.7 million of favorable foreign currency fluctuations, revenues increased 43.2%. Excluding $5.7 million of favorable foreign currency fluctuations, gross profit increased 28.4%.372022 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 % Table of Contents20202021 to 20212022 due to a $289.2$27.3 million, or 64.6%3.7%, increase in same-store SG&A, coupled with a $7.0$40.6 million increase from net dealership acquisitions. Excluding $32.5$31.9 million of favorable foreign currency fluctuations, same-store SG&A increased 57.4%7.9%. SG&A as a percentage of gross profit was 63.4%66.1%, a decreasean increase of 1,860270 basis points compared to 82.0%63.4% in the prior year. SG&A expenses as a percentage of total revenue was 10.7%11.8% and 12.4%10.7% in the three months ended June 30, 2022 and 2021, and 2020, respectively. The decreaseWe believe the increase in SG&A as a percentage of gross profit is primarily due to a reduction of travel and entertainment expenses,the inflationary effect on our personnel, rent, and other expense reductions as well as increased gross profit across our business lines.2022 vs. 2021 2022 2021 Change % Change Depreciation $ 31.7 $ 30.2 1.5 5.0 % 20202021 to 20212022 due to a $1.9 million, or 6.8% increase in same-store depreciation, coupled with a $0.4$2.0 million increase from net dealership acquisitions. The overall increase is primarily related to our ongoing facility improvements and expansion programs.2022 vs. 2021 2022 2021 Change % Change Floor plan interest expense $ 9.0 $ 7.9 1.1 13.9 % including the impact of swap transactions, decreasedincreased from 20202021 to 2021 primarily2022 due to a $3.7$0.6 million, or 32.3%8.2%, decreaseincrease in same-store floor plan interest expense. Theexpense, coupled with a $0.5 million increase from net acquisitions. We believe the overall decreaseincrease is primarily due to decreasesincreases in applicable rates, andpartially offset by 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 production disruptions resulting from a shortage of automotive microchips.382022 vs. 2021 2022 2021 Change % Change Other interest expense $ 17.0 $ 19.7 (2.7) (13.7) % 20202021 to 20212022 primarily due to the decrease in outstanding revolver borrowings under the U.S. and U.K. credit agreements, decreasesagreement, partially offset by increases in applicable rates, and redemption and refinancing of certain senior subordinated notes. 2022 vs. 2021 2022 2021 Change % Change Equity in earnings of affiliates $ 138.0 $ 105.6 32.4 30.7 % 20202021 to 2021 primarily2022 due to a $72.6$34.1 million, or 243%33.3%, increase in earnings from our investment in PTS, coupled with thean increase in earnings from our retail automotive joint ventures. Theventures 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 isattributed due to strong economic conditions in North America which is driving higher demand and profitability for PTScommercial rental trucks and full-service leasing, rental demand, and logistics services, coupled with higher gains on sale from remarketing activities onas well as used trucks.2022 vs. 2021 2022 2021 Change % Change Income taxes $ 123.7 $ 123.4 0.3 0.2 % 20202021 to 20212022 primarily due to a $402.5$35.9 million increase in our pre-tax income compared to the prior year. Our effective tax rate was 24.8% during the three months ended June 30, 2022, compared to 26.6% during the three months ended June 30, 2021, compared to 27.0% during the three months ended June 30, 2020, primarily due to fluctuations in our geographic pre-tax income mix, partially offset bycoupled with the increase in net income tax expense in the prior year of $8.8 million related to U.K. tax legislation changes.392022 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 % increaseddecreased from 20202021 to 2021 primarily2022 due to a 35,48121,240 unit, or 49.0%19.7%, increasedecrease in same-store new retail unit sales.sales, partially offset by a 4,085 unit increase from net dealership acquisitions. Same-store units increased 50.1%decreased 22.5% in the U.S. and 46.7%decreased 13.9% internationally. Overall, new units increased 47.2%unit sales decreased 19.2% in the U.S. and 44.9%decreased 9.1% internationally. We believe the increasedecrease in same-store unit sales is due to a stronger economic outlook, liftinglower supply of lockdown restrictions due to COVID-19, favorable interest rates, and improved levels of consumer confidence when compared to the same period last year at the onset of the COVID-19 pandemic.increaseddecreased from 20202021 to 2021 primarily2022 due to a $2,009.1$571.3 million, or 62.7%11.0%, increasedecrease in same-store revenues.revenues, partially offset by a $230.1 million increase from net dealership acquisitions. Excluding $173.9$128.1 million of favorableunfavorable foreign currency fluctuations, same-store new retail revenue increased 57.3%decreased 8.5%. The decrease in same-store revenue increase is due to the increasedecrease in same-store new retail unit sales, which increaseddecreased revenue by $1,713.2$1,025.5 million, coupled withpartially offset by a $4,084$5,238 per unit increase in same-store comparative average selling pricesprice (including a $1,612$1,480 per unit increasedecrease attributable to favorableunfavorable foreign currency fluctuations), which increased revenue by $295.9$454.2 million. We believe the increase in same-store comparative average selling pricesprice is due to increased customer demand and a lower supply of new vehicles available for sale, which has been caused by production disruptions resulting from a shortage of automotive microchips.20202021 to 2021 primarily2022 due to a $236.9$110.6 million, or 97.7%23.1%, increase in same-store gross profit.profit, coupled with a $31.5 million increase from net dealership acquisitions. Excluding $15.2 million of favorableunfavorable foreign currency fluctuations, same-store gross profit increased 91.5%26.2%. The increase in same-store gross profit increase the increase in same-store new retail unit sales, which increased gross profit by $157.6 million, coupled with a $1,095$2,364 per unit increase in thesame-store comparative average gross profit per new vehicle retailed (including a $140$175 per unit increasedecrease attributable to favorableunfavorable foreign currency fluctuations), which increased gross profit by $79.3$205.0 million, partially offset by the decrease in same-store new retail unit sales, which decreased gross profit by $94.4 million. TheWe believe the increase in same-store comparative average gross profit per new vehicle retailedunit is attributed to increased customer demand and a lower supply of new vehicles available for sale, which has been caused by production disruptions resulting from a shortage of automotive microchips.402022 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) % 20202021 to 20212022 due to a 29,0815,795 unit increase from net dealership acquisitions, partially offset by a 2,721 unit, or 28.0%2.0%, increasedecrease in same-store used retail unit sales, coupled with a 414 unit increase from net dealership acquisitions. Same-storesales. Our same-store units increased 27.4%decreased 12.1% in the U.S. and 28.5%increased 8.0% internationally. Same-store retail units for our U.S. and U.K. CarShop Used Vehicle SuperCentersused vehicle dealerships decreased 27.5% and increased 58.3% and 13.6%39.4%, respectively. Overall, our used units increased 25.9%decreased 8.7% in the U.S. and 30.0%increased 13.2% internationally. We believe the increase in same-store unit sales in the U.K. is primarily due to a stronger economic outlook,the lifting of lockdown restrictions due to COVID-19 favorable interest rates, and improved levels of consumer confidence when compared to the same period last year atyear. We believe the onsetdecrease 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 the COVID-19 pandemic, coupled with consumers looking to acquire used vehicles to compensate for the lower supply of new vehicles available for salecustomers, which has been caused by production disruptions resulting from a shortage of automotive microchips.Revenues20202021 to 20212022 due to a $1,342.4$489.3 million, or 48.8%11.9%, increase in same-store revenues, coupled with a $7.6$185.8 million increase from net dealership acquisitions. Excluding $210.4$181.0 million of favorableunfavorable foreign currency fluctuations, same-store used retail revenue increased 39.4%16.3%. The increase in same-store revenue increase is primarily 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 increasedecrease in same-store used retail unit sales, which increaseddecreased revenue by $893.8 million, coupled with a $4,313 per unit increase in comparative average selling prices (including a $1,581 per unit increase attributable to favorable foreign currency fluctuations), which increased revenue by $448.6$83.3 million.The average sales price per unit for our CarShop Used Vehicle SuperCentersused vehicle dealerships increased 17.0%12.6% to $18,202.$20,498. We believe the increase in same-store comparative average selling pricesprice 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 production disruptions resulting from a shortage of automotive microchips.supply chain issues discussed above20202021 to 20212022 due to a $160.5 million, or 114.5%, increase in same-store gross profit, coupled with a $1.3$10.9 million increase from net dealership acquisitions.acquisitions, partially offset by a $3.4 million, or 1.1%, decrease in same-store gross profit. Excluding $14.6$10.2 million of favorableunfavorable foreign currency fluctuations, same-store gross profit increased 104.1%2.3%. The decrease in same-store gross profit increase is due to the decrease in same-store used retail unit sales, which decreased gross profit by $6.0 million, partially offset by a $912$20 per unit increase in same-store comparative average gross profit per used vehicle retailed (including a $110$78 per unit increasedecrease attributable to favorableunfavorable foreign currency fluctuations), which increased gross profit by $94.8 million, coupled with the increase in same-store used retail unit sales, which increased gross profit by $65.7$2.6 million. The average grossUsed Vehicle SuperCenters increased 46.9%used vehicle dealerships decreased 34.8% to $1,174. The$765. We believe the increase in same-store comparative average gross profit per used vehicle retailedunit 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 production disruptions resulting from a shortage of automotive microchips.supply chain issues discussed above.412022 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 % $139.6 million, or 57.8%, from 20202021 to 2021 primarily2022 due to a $139.5$44.7 million, or 58.6%11.8%, increase in same-store revenues.revenues, coupled with a $12.9 million increase from net dealership acquisitions. Excluding $13.9$11.9 million of favorableunfavorable foreign currency fluctuations, same-store finance and insurance revenue increased 52.7%14.9%. The increase in same-store revenue increase is due to the increase in same-store retail unit sales, which increased revenue by $101.2 million, coupled with a $217$376 per unit increase in same-store comparative average finance and insurance revenue (including a $54 per unit (including a $58 per unit increasedecrease attributable to favorableunfavorable foreign currency fluctuations), which increased revenue by $38.3$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 18.0%32.0% in the U.S. and 10.6%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 prices.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.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) % 20202021 to 2021,2022, with an increase of 16.5%14.8% in the U.S. and 34.9%an increase of 8.8% internationally. The increase in service and parts revenue is primarily due to a $201.4an $88.5 million, or 23.9%8.5%, increase in same-store revenues.revenues, coupled with a $45.3 million increase from net dealership acquisitions. Excluding $33.1$28.2 million of favorableunfavorable foreign currency fluctuations, same-store revenue increased 19.9%11.2%. The increase in same-store revenue increase is due to a $165.8$99.5 million, or 28.8%13.4%, increase in customer pay revenue a $31.1and an $8.1 million, or 14.8%, increase in warranty revenue, and a $4.5 million, or 7.8%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 a stronger economic outlook, improved levels of consumer confidence, and the lifting of many COVID-19 restrictions resulting in increases in vehicle miles traveled when compared to the same period last year, atcoupled with the onsetprolonged reliance on older vehicles resulting from the limited supply of the COVID-19 pandemic.20202021 to 2021 primarily2022 due to a $142.2$42.6 million, or 28.6%6.7%, increase in same-store gross profit.profit, coupled with a $24.7 million increase from net dealership acquisitions. Excluding $19.7$16.5 million of favorable24.6%9.2%. The increase in same-store gross profit increase is due to the increase in same-store revenues, which increased gross profit by $123.1$53.3 million, coupled withpartially offset by a 2.2% increase1.1% decrease in same-store gross margin, which increaseddecreased gross profit by $19.1$10.7 million. The increase in same-store gross profit increase is due to a $91.9$45.8 million, or 33.8%12.6%, increase in customer pay gross42$32.2$6.1 million, or 28.9%4.2%, increase in vehicle preparation and body shop gross profit, and an $18.1partially offset by a $9.3 million, or 15.8%7.0%, increasedecrease in warranty gross profit.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 % 20202021 to 20212022 due to a 5441,068 unit increase from net dealership acquisitions, coupled with a 61an 839 unit, or 1.3%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 economic outlook, favorable interest rates, higher freight rates,economy and improved levelsthe timing of consumer confidence when compareddeliveries from the vehicle manufacturers due to the same period last year atbacklog of orders delivered during the onsetfirst quarter of 2022, which has been caused by the COVID-19 pandemic.20202021 to 20212022 due to a $59.2$144.6 million increase from net dealership acquisitions, coupled with a $33.7$127.7 million, or 6.1%21.7%, increase in same-store revenues. The increase in same-store revenue increase is due to a $5,417 per unit increase in comparative average selling prices, which increased revenue by $26.4 million, coupled with the increase in same-store new retail unit sales, which increased revenue by $7.3$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.���20202021 to 20212022 due to a $10.1$12.8 million, or 45.7%39.8%, increase in same-store gross profit, coupled with a $1.6an $8.9 million increase from net dealership acquisitions. The increase in same-store gross profit increase is due to a $1,982 per unit increase in average gross profit per new truck retailed, which increased gross profit by $9.7 million, coupled with the increase in same-store new retail unit sales, which increased gross profit by $0.4 million. The$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 largely dueattributed to stronger market demand asa limited supply of new trucks available for sale, which has been caused by supply chain issues discussed above.432022 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) % increaseddecreased from 20202021 to 20212022 due to a 173477 unit, or 11.8%29.0%, increasedecrease in same-store retail unit sales, coupled withpartially offset by a 29284 unit increase from net dealership acquisitions. We believe the increasedecrease in used trucksame-store unit sales is attributableprimarily due to higher demanda lower supply of new replacement trucks available for used vehicles as the higher freight rates and the forecast for an improving economy have driven higher Class 8 orders and a 182.7% increase in order backlog,sale causing our customers to turn touse 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 truck market to meet their requirements.20202021 to 20212022 due to a $36.2$34.5 million, or 50.6%32.0%, increase in same-store revenues, coupled with a $2.3$34.5 million increase from net dealership acquisitions. The increase in same-store revenue increase is due to a $16,914$56,329 per unit increase in same-store comparative average selling prices,price, which increased revenue by $24.9$65.7 million, coupled withpartially offset by the increasedecrease in same-store used retail unit sales, which increaseddecreased revenue by $11.3$31.2 million. We believe the increase in used retail sales revenue per unitsame-store comparative average selling price is primarily due to increased demand fora limited supply of used trucks in the market asavailable for sale, which has been caused by supply chain issues discussed above.20202021 to 20212022 due to a $20.8$4.0 million increase from net dealership acquisitions, coupled with a $1.9 million, or 392.5%12.3%, increase in same-store gross profit, coupled with a $0.4 millionprofit. The increase from net dealership acquisitions. Thein same-store gross profit increase is due to a $13,060$5,513 per unit increase in same-store comparative average gross profit, per used truck retailed, which increased gross profit by $19.2$6.4 million, coupled withpartially offset by the increasedecrease in same-store used retail unit sales, which increaseddecreased gross profit by $1.6$4.5 million. We believe the increase in same-store comparative average gross profit per used truck retailedunit is attributableprimarily due to increased demand fora limited supply of used trucks in the market asavailable 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 % — % — % 20202021 to 20212022 due to a $24.9 million, or 10.6%, increase in same-store revenues, coupled with a $21.0$71.9 million increase from net dealership acquisitions.acquisitions, coupled with a $62.8 million, or 24.1%, increase in same-store revenues. Customer pay work representsrepresented approximately 79.5%81.2% of PTG’s service and parts revenue, largely due to the significant amount of retail sales of parts and increase is due to a $25.7$55.4 million, or 14.2%26.8%, increase in customer pay revenue,44$1.0$6.7 million, or 2.4%15.5%, increase in warranty revenue, and partially offset by a $1.8$0.7 million, or 14.1%6.4%, decreaseincrease in body shop revenue.We believe the same-store increase in same-store service and parts revenue is primarily due to higher freight rates and the increasedprolonged reliance on usedolder trucks resulting from the limited supply of new trucks, which generates additional service and parts revenues.20202021 to 20212022 due to an $8.3a $30.4 million increase from net dealership acquisitions, coupled with an $8.2a $26.7 million, or 8.0%24.1%, increase in same-store gross profit. The increase in same-store gross profit increase is due to the increase in same-store revenues, which increased gross profit by $10.6 million, partially offset by a 1.0% decrease in gross margin, which decreased gross profit by $2.4$26.7 million. The increase in same-store gross profit increase is due to a $9.4$21.9 million, or 14.2%29.1%, increase in customer pay gross profit, a $0.6$3.8 million, or 2.5%15.4%, increase in warranty gross profit, and partially offset by a $1.8$1.0 million, or 14.5%9.4%, decreaseincrease in body shop gross profit.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 AustraliaThis business generated $296.8$294.8 million of revenue during the six months ended June 30, 2021,2022, compared to $199.5$296.8 million of revenue in the prior year, an increasea decrease of 48.8%0.7%. ItThis business also generated $72.9$80.8 million of gross profit during the six months ended June 30, 2021,2022, compared to $56.2$72.9 million of gross profit in the prior year, an increase of 29.7%10.8%.These improved results from 20202021 arean 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 demand for trucks in Australiavehicle gross profit per unit and an increase in service and parts. Excluding $43.8 million of favorable foreign currency fluctuations, revenues increased 26.8%. Excluding $10.7 million of favorable foreign currency fluctuations, gross profit increased 10.7%.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) % 20202021 to 20212022 due to a $317.5$121.0 million, or 29.4%8.6%, increase in same-store SG&A, coupled with a $1.2an $80.4 million increase from net dealership acquisitions. Excluding $53.9$30.9 million of favorable foreign currency fluctuations, same-store SG&A increased 24.4%10.8%. The increase in SG&A expenses is67.5%65.4%, a decrease of 1,490210 basis points compared to 82.4%67.5% in the prior year. SG&A expenses as a percentage of total revenue was 11.1%11.6% and 12.6%11.1% in the six months ended June 30, 2022 and 2021, and 2020, respectively. The45primarily due to employee reductions, a reductioncomprised of travel and entertainment expenses, and other expense reductions as well as increased gross profit across our various business lines.2022 vs. 2021 2022 2021 Change % Change Depreciation $ 63.6 $ 59.5 4.1 6.9 % 20202021 to 20212022 due to a $2.8 million, or 4.9%, increase in same-store depreciation, coupled with a $0.3$4.1 million increase from net dealership acquisitions. The overall increase is primarily related to our ongoing facility improvements and expansion programs.2022 vs. 2021 2022 2021 Change % Change Floor plan interest expense $ 16.5 $ 17.4 (0.9) (5.2) % including the impact of swap transactions, decreased from 20202021 to 2021 primarily2022 due to an $11.9a $1.6 million, or 40.7%9.4%, decrease in same-store floor plan interest expense. Theexpense, partially offset by a $0.7 million increase from net acquisitions. We believe the overall decrease is primarily due to decreases in applicable rates and 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 production disruptions resulting from a shortage of automotive microchips.2022 vs. 2021 2022 2021 Change % Change Other interest expense $ 33.5 $ 37.6 (4.1) (10.9) % 20202021 to 20212022 primarily due to the decrease in outstanding revolver borrowings under the U.S. and U.K. credit agreements, decreasespartially offset by increases in applicable rates, and redemption and refinancing of certain senior subordinated notes. 2022 vs. 2021 2022 2021 Change % Change Equity in earnings of affiliates $ 257.6 $ 161.0 96.6 60.0 % 20202021 to 2021 primarily2022 due to a $112.7$98.9 million, or 259%63.3%, increase in earnings from our investment in PTS, coupled with the increase in earnings from our retail automotive joint ventures. Theventures 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 isattributed due to strong economic conditions in North America which is driving higher demand and profitability for PTScommercial rental trucks and full-service leasing, rental demand, and logistics services, coupled with higher gains on sale from remarketing activities onas well as used trucks.462022 vs. 2021 2022 2021 Change % Change Income taxes $ 251.8 $ 187.9 63.9 34.0 % 20202021 to 20212022 primarily due to a $578.6$285.9 million increase in our pre-tax income compared to the prior year. Our effective 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, compared to 27.6% during the six months ended June 30, 2020, primarily due to fluctuations in our geographic pre-tax income mix,partially offset by coupled with the increase in net income tax expense in the prior year of $8.8 million related to U.K. tax legislation changes. building additional CarShop Used Vehicle SuperCenters (including four additional sites currently planned to open in 2021), 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, mortgages,real estate financings, and dividends and distributions from joint venture investments.remainare more severely impacted for longer than we expect due to the COVID-19 pandemic or vehicle component 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. Payments are generally made as required pursuant to the floor plan borrowing agreements. 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.1110 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 Financial Services Australia.2021,2022, we had $165.2$154.9 million of cash available to fund our operations and capital commitments. In addition, we had $800.0 million, £162.0 million ($224.1197.3 million), and AU $40.0 million ($30.027.6 million), and $142.8 million available for47and Australian working capital loan agreement, and the revolving mortgage facility through Toyota Motor Credit Corporation, respectively.2021,2022, our Board of Directors increased the authority delegated to management to repurchase our outstanding securities to $250.0by $250 million. Prior to the increase, we had $142.5As a result, $330.6 million in remaining authorization.remained outstanding and available for repurchases as of July 26, 2022. Refer to the disclosures provided in Part I, Item 1, Note 1211 of the Notes to our Consolidated Condensed Financial Statements for a summary of shares repurchased during the six months ended June 30, 2021.2022.20202021 and 2021:2021 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 $0.45$0.53 per share payable on September 1, 20212022 to shareholdersstockholders of record on August 10, 2021. Future2022. 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, earnings, cash flow, capital requirements, restrictions relating to any then-existing indebtedness, financial condition, alternative uses of capital, and other factors.Vehicle FinancingReferfactors, we currently expect to continue to pay comparable dividends in the disclosures provided in Part I, Item 1, Note 7future.2021,2022, we had the following long-term debt obligations outstanding which includes $500 million in aggregate principal amount of 3.75% senior subordinated notes due 2029 issued in June 2021, the proceeds of whichoutstanding:48(In millions) June 30,
2022U.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 3.75% senior subordinated notes due 2029 494.7 Australia capital loan agreement 23.3 Australia working capital loan agreement 6.9 Mortgage facilities 366.9 Other 48.8 Total long-term debt $ 1,486.0 were used to redeem our $500 million in aggregate principal amount of 5.50% senior subordinated notes due 2026 on June 24, 2021:2021,2022, 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.fourfive 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 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.2021,2022, outstanding revolving commitments varied between $0.0 million and $250.0$168.0 million under the U.S. credit agreement, between £0.0 million and £40.0£42.0 million ($0.0 million and $55.3$51.1 million) under the U.K. credit agreement’s revolving credit line (excluding the overdraft facility), and between AU $0.0 million and AU $26.0$15.0 million ($0.0 million and $19.5$10.4 million) under the Australia working capital loan agreement.agreement, and between $0.0 million and $177.8 million under the revolving mortgage facility through Toyota Motor Credit Corporation. The amounts outstanding under our floor plan 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.new 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 iswas fixed at 0.5875%. This arrangement iswas in effect through April 2025. We may terminateHowever, we terminated this arrangement at any time, subject to the settlement at that time of the fair value of the swap arrangement. As of June 30, 2021, the fair value of the swap designated as hedging instruments was estimated to be a net asset of $0.4 million.principalpartnership agreement and certain of its debt agreements allow partner distributions only as long as they areit is not in default under that agreementthose agreements and the amount they payit pays does not exceed 50% of its consolidated net income, unless its debt-to-equity ratio is less than 3.0 to 1, 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, 2021,2022, and 2020,2021, we received $55.1$104.9 million and $25.0$55.1 million, respectively, of pro rata cash49$5.5$5.3 billion. As of June 30, 2021,2022, 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 1110 of the Notes to our Consolidated Condensed Financial Statements for a description of our operating leases.50PAG and Guarantor Subsidiaries Six Months Ended
June 30, 2022Twelve 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 Table of ContentsPAG and Guarantor Subsidiaries June 30, 2022 December 31, 2021 Current assets (1) $ 2,340.5 $ 2,245.6 Property and equipment, net 1,313.4 1,264.9 Equity method investments 1,631.7 1,645.6 Other noncurrent assets 3,608.5 3,524.0 Current liabilities 1,902.9 1,843.9 Noncurrent liabilities 3,885.6 3,858.9 __________(1)Includes $520.4 million and $509.9 million as of June 30, 2021, and December 31, 2020, respectively, due from Non-Guarantors.Includes $545.3 million and $529.9 million as of June 30, 2022, and December 31, 2021, respectively, due from Non-Guarantors.2021,2022, PAG received $44.5$33.0 million from non-guarantor subsidiaries. During the twelve months ended December 31, 2020,2021, PAG received $77.1$93.5 million from non-guarantor subsidiaries.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 51Six Months Ended June 30, (In millions) 2022 2021 Net cash from continuing operating activities as reported $ 879.2 $ 916.7 Floor plan notes payable — non-trade as reported (115.6) (181.9) Net cash from continuing operating activities including all floor plan notes payable $ 763.6 $ 734.8 equipmentproperty and improvements,equipment, and net expenditures for acquisitions and other investments. Capital expenditures were $90.8$138.1 million and $76.8$90.8 million during the six months ended June 30, 2021,2022 and 2020,2021, 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 retail automotive segment and retail commercial truck segment capital expenditures with operating cash flows or borrowings under our U.S. or U.K. credit agreements. ProceedsWe had no proceeds from the sale of dealerships wereduring the six months ended June 30, 2022, compared to $4.3 million and $10.3 million during the six months ended June 30, 2021, and 2020, respectively.2021. Proceeds from the sale of property and equipment and improvements were $31.7$11.4 million and $19.8$31.7 million during the six months ended June 30, 2021,2022 and 2020,2021, respectively. Cash used in acquisitions and other investments, net of cash acquired, was $278.0$225.9 million and 278.0 million during the six months ended June 30, 2022 and 2021, respectively, and included cash used to repay sellers’ floor plan liabilities in such business acquisitions of $51.3 million and $24.3 million. issuance and net borrowings or repayments of long-term debt, net borrowings or repayments of floor plan notes payable non-trade, repurchases of common stock, dividends, payments for contingent consideration, and payments for debt issuance costs.We issued $500.0 million of senior subordinated notes due 2029 in June 2021 and repaid $500.0 million of senior subordinated notes due 2026. other long-term debt of $171.1 million and $205.8 million during the six months ended June 30, 2021,2022 and 2020,2021, respectively. We had net repayments of floor plan notes payable non-trade of $181.9$115.6 million and $309.9$181.9 million during the six months ended June 30, 2021,2022 and 2020,2021, respectively. We repurchased 2.7 million and 0.3 million shares of common stock under our securities repurchase program for a total of$275.4 million and $28.1 million and $29.4 million during the six months ended June 30, 2022 and 2021, respectively. We acquired 0.15 million and 2020,0.15 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 $70.2$74.4 million and $34.2$70.2 million during the six months ended June 30, 2021,2022 and 2020,2021, respectively. We made no payments to settle contingent consideration to sellers related to previous acquisitions during the six months ended June 30, 2021, compared to $21.1 million during the six months ended June 30, 2021. We made payments of $0.1 million and $6.1 million for debt issuance costs during the six months ended June 30, 2021.52Cash Flows from Discontinued OperationsCash flows relating to discontinued operations are not currently considered, nor are they expected to be, material to our liquidity or our capital resources. Management does not believe that there are any material past, present, or upcoming cash transactions relating to discontinued operations. S. 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 44%47% of our outstanding common stock. Mitsui & Co., Ltd. and Mitsui & Co. (USA), Inc. (collectively, “Mitsui”) own approximately 17%18% of our outstanding common stock. Mitsui, Penske Corporation, and certain other affiliates of Penske Corporation are parties to a stockholders agreement pursuant to which the Penske affiliated companies agreed to vote their shares for up to two directors who are representatives of Mitsui. In turn, Mitsui agreed to vote their 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.Masashi Yamanaka,Kota Odagiri, one of our directors, is also an employee of Mitsui & Co.haveare also entered into other joint ventures with certain related parties as more fully discussed below.53Joint Venture RelationshipsWe are party to a numberjoint venture in Penske Commercial Leasing Australia (28%) with PTS. Both of these investments are accounted for under the equity method.venturesventure 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 incrementalprevailing borrowing rate. As of June 30, 2021,2022, our retail automotive joint venture relationships included:80.00%80.00% (A)80.00%80.00% (A)Smart,smart, Lamborghini84.10%84.10% (A)50.00%50.00% (B)50.00% (B)Tokyo, JapanBMW, MINI, Rolls-Royce, Ferrari, ALPINA49.00% (B)(A)Entity is consolidated in our financial statements.50.00% (B)(B)Entity is accounted for using the equity method of accounting.(A)We previously owned a 20% interestEntity is consolidated in Bentley, Ferrari, and Maserati dealerships located in Edison, New Jersey which we sold in June 2021 to our joint venture partnerfinancial statements.$3.0 million.using the equity method of accounting.expansion,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.Retail Automotive DealershipSeasonalityDealership. 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 subjectCommercial Vehicle Distribution. Our commercial vehicle distribution business generally experiences higher sales volumes during the second quarter of the year, which is primarily attributable to commercial vehicle customers completing annual capital expenditures before their fiscal year-end, which is typically June 30 in Australia.54Effects of InflationWe believe that inflation rates over the last few years have not had a significant impact on revenues or profitability. We do not expect inflation to have any near-term material effects on the saleMany of our products and services; however, we cannot be sure there will be no such effect inmarket countries are experiencing a high rate of inflation. Inflation affects the future. We finance substantially allprice of vehicles, the price of parts, the rate of pay of our inventory through various revolving floor plan arrangements with interestemployees, and consumer demand. Used vehicle prices in particular have experienced a higher rate of inflation recently, and continued higher rates that vary based on various benchmarks. Such rates have historically increased during periods of increasing inflation.●our expectations regarding the COVID-19 pandemic;●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 in the automotive retail industry, commercial vehicles industries, and in the general economy in the various countries in which we operate;●our ability to access the remaining availability under our credit agreements;●our liquidity;●performance of joint ventures, including PTS;●future foreign exchange rates and geopolitical events;●the outcome of various legal proceedings;●results of self-insurance plans;●trends affecting the automotive or trucking industries generally and our future financial condition or results of operations; and●our business strategy.55•Contentsjoint ventures, including PTS;2020 annual reportAnnual 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 February 19, 2021.with the Securities and Exchange Commission. Important factors that could cause actual results tothose mentionedthe following:Part II, “Item 1A. Risk Factors”Ukraine, or other disruptions that interrupt the supply of vehicles and parts to us may negatively impact our revenues and profitability;following: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;●we depend on the success, popularity and availability of the brands we sell, and adverse conditions affecting one or more vehicle manufacturers, including the adverse impact on the vehicle and parts supply chain due to natural disasters or other disruptions that interrupt the supply of vehicles and parts to us (including any disruptions resulting from the shortage of microchips or other components or the COVID-19 pandemic discussed in Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations and Part II, “Item 1A. Risk Factors”), may negatively impact our revenues and profitability;●our business and the automotive retail and commercial vehicles industries in general are susceptible to adverse economic conditions, including changes in interest rates, foreign exchange rates, customer demand, customer confidence, fuel prices, unemployment rates and credit availability (including any adverse impact from the COVID-19 pandemic discussed in Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations and Part II, “Item 1A. Risk Factors”);●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;●the effect on our businesses of the trend of electrification of vehicle engines, 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;●certain manufacturers are exploring an agency model of distribution which would lower our revenues, although the other impacts to our results of operations remain uncertain;●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;●a restructuring of any significant vehicle manufacturer or supplier;●our operations may be affected by severe weather, such as the recent hurricanes in Texas, or other periodic business interruptions;●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 may limit our ability to obtain financing generally and may require that a significant portion of our cash flow be used for debt service;56••●non-compliance with the financial ratios and other covenants under our credit agreements and operating leases;we are dependent on continued security and availability of our information technology systems, which systems are increasingly threatened by ransomware and other cyberattacks, and we may be subject to fines, penalties, and other costs under applicable privacy laws if we do not maintain our confidential customer and employee information properly;●higher interest rates may significantly increase our variable rate interest costs and, because many customers finance their vehicle purchases, decrease vehicle sales;•●our operations outside of the U.S. subject our profitability to fluctuations relating to changes in foreign currency values;if we lose key personnel, especially our Chief Executive Officer, or are unable to attract additional qualified personnel;●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, 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, and we may be subject to fines, penalties, and other costs under applicable privacy laws if we do not maintain our confidential customer and employee information properly;new or enhanced regulations relating to automobile dealerships 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 as early as 2030);●if we lose key personnel, especially our Chief Executive Officer, or are unable to attract additional qualified personnel;•●new or enhanced regulations relating to automobile dealerships including those recently enacted by the Financial Conduct Authority in the U.K. prohibiting certain compensation we receive relating to automotive financing in the U.K. and those enacted in certain European countries and California and Massachusetts banning the sale of new vehicles with gasoline engines starting in Europe as early as 2030;changes in tax, financial or regulatory rules, or requirements;●changes in tax, financial or regulatory rules, or requirements;•●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;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;●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;•●some of our directors and officers may have conflicts of interest with respect to certain related party transactions and other business interests; andif 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;●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.•under Part II, “Item 1A. Risk Factors”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 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.572021,2022, a 100-basis-point change in interest rates would result in an approximate $1.3$0.9 million change to our annual other interest expense.In April 2020, we entered into a new 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 is fixed at 0.5875%. Based on an average of the aggregate amounts outstanding under our floor plan financing arrangements subject to variable interest payments during the six months ended June 30, 2021, considering the swap arrangement,2022, a 100-basis-point change in interest rates would result in an approximate $25.5$19.4 million change to our annual floor plan interest expense.•●the maintenance of our overall debt portfolio with targeted fixed and variable rate components;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; andthe use of authorized derivative instruments;●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.•2021,2022, 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 our earnings and cash flows. A ten percent change in average exchange rates versus the U.S. Dollar would have resulted in an approximate $521.8$561.9 million change to our revenues for the six months ended June 30, 2021.2022., as of the end of the period covered by this report. Our disclosure controls and procedures are designed to ensure58adverse 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 FactorsIn 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, 2020, which could materially affect our business, financial condition, or future results. The following updates the risk factors included in our 2020 Form 10-K:Adverse conditions affecting a significant automotive manufacturer or supplier will affect us. Our success depends on the overall success of the automotive industry generally and in particular, on the success of the brands of vehicles that each of our dealerships sell. In 2020, revenue generated at our Audi/Volkswagen/Porsche/Bentley, BMW/MINI, Toyota/Lexus, and Mercedes-Benz/Sprinter/smart dealerships represented 22%, 23%, 14%, and 10%, respectively, of our total automotive dealership revenues. In addition, our retail commercial truck operations rely principally on Freightliner and Western Star trucks (both Daimler brands).Significant adverse weather-related events, supply chain issues, or other events that interrupt vehicle or parts supply to our dealerships would likely have a significant and adverse impact on the industry as a whole, including us, particularly if the events impact any of the manufacturers whose franchises generate a significant percentage of our revenue. New rules in place after the recent Brexit accord between the European Union and the U.K. could slow parts originating in the U.K or Europe for distribution to our dealerships. COVID-19 has impacted and may continue to impact the supply of vehicles or parts to the U.S. or U.K markets, and our business could be materially adversely affected. The supply chain required to manufacture and supply the parts for the vehicles we sell is highly complex and integrated. Any failure of that supply chain could materially and adversely affect us.Recently, many of our principal vehicle manufacturers have announced production disruptions caused by a shortage of automotive microchips and other components. The microchip shortage is reported to be due to the overall demand for microchips in the global economy as well as production disruptions caused by staffing and other COVID-19 related issues. IHS Markit has predicted that automotive production globally was reduced by 2.3 million units in the second quarter of 2021 due to the shortage and that production levels will continue to be negatively impacted for the remainder of the year. Our new vehicle days’ supply is 26 as compared to 50 as of December 31, 2020. While we expect to continue to have normal levels of used vehicles for sale (our current used vehicle days’ supply is 38 as compared to 48 as of December 31, 2020), prolonged shortages could result in lower new vehicle sales volumes which could adversely affect us. Moreover, due to remote working and lack of mobility associated with the pandemic in some of our markets, we believe our customers may be driving less, which may affect our service revenues should this trend continue.59Vehicle manufacturers exercise significant control over us. Each of our new vehicle dealerships and distributor operations operate under franchise and other agreements with automotive manufacturers, commercial vehicle manufacturers, or related distributors. These agreements govern almost every aspect of the operation of our dealerships and give manufacturers the discretion to terminate or not renew our franchise agreements for a variety of reasons, including certain events outside our control such as accumulation of our stock by third parties. Without franchise or distributor agreements, we would be unable to sell or distribute new vehicles or perform manufacturer authorized warranty service. If a significant number of our franchise agreements are terminated, not renewed, or, with respect to our distributor operations, a competing distributor were introduced, we would be materially affected.Recently, several of our key automotive manufacturer partners have announced plans to explore an agency model of selling new vehicles in the U.K and Europe. Under an agency model, our franchised dealerships would receive a fee for facilitating the sale by the manufacturer of a new vehicle but would not hold the vehicle in inventory as has been historical practice. This model, if eventually adopted, would negatively impact revenues, although the other impacts to our results of operations remain uncertain. We are uncertain if agency models will be widely adopted in the U.K. and Europe (though we believe any such adoption would not occur until 2023 at the earliest) and if so, the impact to our results of operations.2021,2022, we repurchased 348,2311,514,667 shares of our common stock for $28.1$156.2 million, or an average of $80.81$103.14 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, 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, our Board of Directors further 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. During the three months ended June 30, 2021,2022, we acquired 147,076148,440 shares of our common stock for $12.8$17.2 million, or an average of $86.94$115.97 per share, from employees in connection with a net share settlement feature of employee equity awards. In July 2021, our Board of Directors increased the authority delegated to management to repurchase our outstanding securities to $250.0 million. Prior to the increase, we had $142.5 million in remaining authorization.Period Total Number of Shares
Purchased (1)Average Price Paid
per ShareTotal Number of Shares Purchased as Part of Publicly
Announced Plans or ProgramsApproximate 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 147,076 shares acquired from employees in connection with a net share settlement feature of employee equity awards60DescriptionNo.Description10.14.14.210.12210.3 22 61S. PenskeS. Penske29, 202129, 202162