Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Feb. 17, 2015 | Jun. 30, 2014 | |
Document and Entity Information | |||
Entity Registrant Name | PENSKE AUTOMOTIVE GROUP, INC. | ||
Entity Central Index Key | 1019849 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $2,100,466,715 | ||
Entity Common Stock, Shares Outstanding | 90,245,486 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
ASSETS | ||
Cash and cash equivalents | $36.30 | $50.30 |
Accounts receivable, net of allowance for doubtful accounts of $3.5 and $2.9 | 701.4 | 594.9 |
Inventories | 2,819.20 | 2,501.40 |
Other current assets | 124.7 | 87.7 |
Assets held for sale | 186.1 | 253.8 |
Total current assets | 3,867.70 | 3,488.10 |
Property and equipment, net | 1,328.80 | 1,119.50 |
Goodwill | 1,266.30 | 1,134.90 |
Other indefinite-lived intangible assets | 386.2 | 295.2 |
Equity method investments | 352.8 | 346.9 |
Other long-term assets | 26.4 | 30.9 |
Total assets | 7,228.20 | 6,415.50 |
LIABILITIES AND EQUITY | ||
Floor plan notes payable | 1,812.60 | 1,671.90 |
Floor plan notes payable - non-trade | 920.5 | 900.9 |
Accounts payable | 417.6 | 369 |
Accrued expenses | 310.3 | 260.9 |
Current portion of long-term debt | 36.6 | 14.5 |
Liabilities held for sale | 132.7 | 166.5 |
Total current liabilities | 3,630.30 | 3,383.70 |
Long-term debt | 1,316 | 981.8 |
Deferred tax liabilities | 409.9 | 361.4 |
Other long-term liabilities | 190.8 | 166.5 |
Total liabilities | 5,547 | 4,893.40 |
Commitments and contingent liabilities (Note 11) | ||
Penske Automotive Group stockholders' equity: | ||
Preferred Stock, $0.0001 par value; 100,000 shares authorized; none issued and outstanding | ||
Common Stock | ||
Additional paid-in-capital | 690.7 | 693.6 |
Retained earnings | 1,015.40 | 799.2 |
Accumulated other comprehensive income (loss) | -53.3 | 11.6 |
Total Penske Automotive Group stockholders' equity | 1,652.80 | 1,504.40 |
Non-controlling interest | 28.4 | 17.7 |
Total equity | 1,681.20 | 1,522.10 |
Total liabilities and equity | 7,228.20 | 6,415.50 |
Non-voting Common Stock | ||
Penske Automotive Group stockholders' equity: | ||
Common Stock | ||
Class C Common Stock | ||
Penske Automotive Group stockholders' equity: | ||
Common Stock |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, except Share data, unless otherwise specified | ||
Accounts receivable, allowance for doubtful accounts (in dollars) | $3.50 | $2.90 |
Preferred Stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred Stock, shares authorized | 100,000 | 100,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common Stock, par value (in dollars per share) | $0.00 | $0.00 |
Common Stock, shares authorized | 240,000,000 | 240,000,000 |
Common Stock, shares issued | 90,244,840 | 90,243,731 |
Common Stock, shares outstanding | 90,244,840 | 90,243,731 |
Non-voting Common Stock | ||
Common Stock, par value (in dollars per share) | $0.00 | $0.00 |
Common Stock, shares authorized | 7,125,000 | 7,125,000 |
Common Stock, shares issued | 0 | 0 |
Common Stock, shares outstanding | 0 | 0 |
Class C Common Stock | ||
Common Stock, par value (in dollars per share) | $0.00 | $0.00 |
Common Stock, shares authorized | 20,000,000 | 20,000,000 |
Common Stock, shares issued | 0 | 0 |
Common Stock, shares outstanding | 0 | 0 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenue: | |||
Total revenues | $17,177.20 | $14,443.90 | $12,902.60 |
Cost of sales: | |||
Total cost of sales | 14,603.50 | 12,246.90 | 10,927 |
Gross profit | 2,573.70 | 2,197 | 1,975.60 |
Selling, general and administrative expenses | 1,999.60 | 1,705.60 | 1,558.30 |
Depreciation | 70 | 59.6 | 52.2 |
Operating income | 504.1 | 431.8 | 365.1 |
Floor plan interest expense | -46.1 | -43.1 | -38 |
Other interest expense | -52.8 | -45.2 | -46.1 |
Equity in earnings of affiliates | 40.8 | 30.7 | 27.6 |
Gain on investment | 16 | ||
Debt redemption costs | -17.8 | ||
Income from continuing operations before income taxes | 462 | 374.2 | 290.8 |
Income taxes | -153.2 | -123.9 | -94.6 |
Income from continuing operations | 308.8 | 250.3 | 196.2 |
Loss from discontinued operations, net of tax | -18.7 | -4.6 | -9 |
Net income | 290.1 | 245.7 | 187.2 |
Less: Income attributable to non-controlling interests | 3.4 | 1.5 | 1.7 |
Net income attributable to Penske Automotive Group common stockholders | 286.7 | 244.2 | 185.5 |
Basic earnings per share attributable to Penske Automotive Group common stockholders: | |||
Continuing operations (in dollars per share) | $3.38 | $2.76 | $2.15 |
Discontinued operations (in dollars per share) | ($0.21) | ($0.05) | ($0.10) |
Net income attributable to Penske Automotive Group common stockholders (in dollars per share) | $3.17 | $2.71 | $2.05 |
Shares used in determining basic earnings per share | 90,318,839 | 90,273,747 | 90,318,315 |
Diluted earnings per share attributable to Penske Automotive Group common stockholders: | |||
Continuing operations (in dollars per share) | $3.38 | $2.75 | $2.15 |
Discontinued operations (in dollars per share) | ($0.21) | ($0.05) | ($0.10) |
Net income attributable to Penske Automotive Group common stockholders (in dollars per share) | $3.17 | $2.70 | $2.05 |
Shares used in determining diluted earnings per share | 90,354,839 | 90,330,621 | 90,342,315 |
Amounts attributable to Penske Automotive Group common stockholders: | |||
Income from continuing operations | 308.8 | 250.3 | 196.2 |
Less: Income attributable to non-controlling interests | 3.4 | 1.5 | 1.7 |
Income from continuing operations, net of tax | 305.4 | 248.8 | 194.5 |
Loss from discontinued operations, net of tax | -18.7 | -4.6 | -9 |
Net income attributable to Penske Automotive Group common stockholders | 286.7 | 244.2 | 185.5 |
New vehicle | |||
Revenue: | |||
Total revenues | 8,672.60 | 7,506.60 | 6,659.20 |
Cost of sales: | |||
Total cost of sales | 8,000.10 | 6,928 | 6,120.30 |
Used vehicle | |||
Revenue: | |||
Total revenues | 4,947 | 4,187.50 | 3,657.20 |
Cost of sales: | |||
Total cost of sales | 4,612.20 | 3,881 | 3,378.60 |
Finance and insurance, net | |||
Revenue: | |||
Total revenues | 435.8 | 370.2 | 318.3 |
Service and parts | |||
Revenue: | |||
Total revenues | 1,712.60 | 1,528.60 | 1,424.20 |
Cost of sales: | |||
Total cost of sales | 693.4 | 621.7 | 595 |
Fleet and wholesale | |||
Revenue: | |||
Total revenues | 834.7 | 698.4 | 843.7 |
Cost of sales: | |||
Total cost of sales | 825.1 | 687.8 | 833.1 |
Commercial vehicle and other | |||
Revenue: | |||
Total revenues | 574.5 | 152.6 | |
Cost of sales: | |||
Total cost of sales | $472.70 | $128.40 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net Income | $290.10 | $245.70 | $187.20 |
Other comprehensive income: | |||
Foreign currency translation adjustment | -64.4 | 11.5 | 18.5 |
Unrealized gain (loss) on interest rate swaps: | |||
Unrealized loss arising during the period, net of tax benefit of $0.1,$0.3 and $2.1 respectively | -0.2 | -0.4 | -3.2 |
Reclassification adjustment for loss included in floor plan interest expense, net of tax provision of $3.2, $2.9, $2.8, respectively | 4.9 | 4.4 | 4.2 |
Unrealized gain (loss) on interest rate swaps, net of tax | 4.7 | 4 | 1 |
Other adjustments to comprehensive income, net | -6.5 | 3.4 | -1.9 |
Other comprehensive income (loss), net of taxes | -66.2 | 18.9 | 17.6 |
Comprehensive income | 223.9 | 264.6 | 204.8 |
Less: Comprehensive income attributable to non-controlling interests | 2.1 | 2 | 1.9 |
Comprehensive income attributable to Penske Automotive Group common stockholders | $221.80 | $262.60 | $202.90 |
CONSOLIDATED_STATEMENTS_OF_COM1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Unrealized loss arising during the period, tax benefit | $0.10 | $0.30 | $2.10 |
Reclassification adjustment for loss included in floor plan interest expense, tax provision | $3.20 | $2.90 | $2.80 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating Activities: | |||
Net income | $290.10 | $245.70 | $187.20 |
Adjustments to reconcile net income to net cash from continuing operating activities: | |||
Depreciation | 70 | 59.6 | 52.2 |
Gain on investment | -16 | ||
Earnings of equity method investments | -28.8 | -23 | -18.6 |
Loss from discontinued operations, net of tax | 18.7 | 4.6 | 9 |
Deferred income taxes | 50.5 | 77.6 | 83.8 |
Debt redemption costs | 17.8 | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | -37.9 | -34.4 | -86 |
Inventories | -115.5 | -388.2 | -311.6 |
Floor plan notes payable | 140.7 | 290.6 | 400.1 |
Accounts payable and accrued expenses | 14.6 | 76.9 | 12 |
Other | -20.1 | -8.4 | -20.2 |
Net cash provided by continuing operating activities | 366.3 | 301 | 325.7 |
Investing Activities: | |||
Purchase of equipment and improvements | -174.8 | -174.7 | -150.9 |
Proceeds from sale-leaseback transactions | 1.6 | ||
Acquisitions net, including repayment of sellers' floor plan notes payable of $117.8, $29.6 and $74.9, respectively | -355 | -314 | -233.3 |
Other | -22.6 | -2.6 | 8.8 |
Net cash used in continuing investing activities | -552.4 | -491.3 | -373.8 |
Financing Activities: | |||
Proceeds from borrowings under U.S. credit agreement revolving credit line | 1,272.60 | 1,102.80 | 761.3 |
Repayments under U.S. credit agreement revolving credit line | -1,362.60 | -1,062.80 | -843.3 |
Repayments under U.S. credit agreement term loan | -10 | -12 | -17 |
Repurchase of 7.75% senior subordinated notes | -390.8 | ||
Repurchase of 3.5% senior subordinated convertible notes | -62.7 | ||
Net borrowings of other long-term debt | 28.7 | 53.1 | 47.3 |
Net borrowings of floor plan notes payable - non-trade | 19.6 | 191.2 | 70.2 |
Payment of deferred financing fees | -4.4 | -8.6 | |
Repurchases of common stock | -15.5 | -15.8 | -9.8 |
Dividends | -70.5 | -56 | -41.5 |
Other | 0.3 | 0.2 | -1.1 |
Net cash provided by continuing financing activities | 158.2 | 200.7 | 54 |
Discontinued operations: | |||
Net cash provided by discontinued operating activities | 0.3 | 18.8 | 0.4 |
Net cash provided by (used in) discontinued investing activities | 19.8 | -66.8 | 3.1 |
Net cash (used in) provided by discontinued financing activities | -4.9 | 44 | 7.7 |
Net cash provided by (used in) discontinued operations | 15.2 | -4 | 11.2 |
Effect of exchange rate changes on cash and cash equivalents | -1.3 | ||
Net change in cash and cash equivalents | -14 | 6.4 | 17.1 |
Cash and cash equivalents, beginning of period | 50.3 | 43.9 | 26.8 |
Cash and cash equivalents, end of period | 36.3 | 50.3 | 43.9 |
Cash paid for: | |||
Interest | 98.4 | 92.2 | 76.3 |
Income taxes | 114.3 | 33.5 | 41.9 |
Seller financed/assumed debt | 136.4 | ||
5.75% senior subordinated notes due 2022 | |||
Financing Activities: | |||
Issuance of senior subordinated notes | 550 | ||
5.375% senior subordinated notes due 2024 | |||
Financing Activities: | |||
Issuance of senior subordinated notes | $300 |
CONSOLIDATED_STATEMENTS_OF_CAS1
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
Repayment of Sellers' Floor Plan Notes Payable Dealership Acquisitions | $117.80 | $29.60 | $74.90 |
Statement | |||
Interest rate (as a percent) | 3.50% | ||
5.375% senior subordinated notes due 2024 | |||
Statement | |||
Interest rate (as a percent) | 5.38% | ||
5.75% senior subordinated notes due 2022 | |||
Statement | |||
Interest rate (as a percent) | 5.75% | 5.75% | 5.75% |
7.75% Notes | |||
Statement | |||
Interest rate (as a percent) | 7.75% | ||
3.5% Notes | |||
Statement | |||
Interest rate (as a percent) | 3.50% |
CONSOLIDATED_STATEMENT_OF_EQUI
CONSOLIDATED STATEMENT OF EQUITY (USD $) | Total Penske Automotive Group Stockholders' Equity | Voting and Non voting | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interest | Total |
In Millions, except Share data, unless otherwise specified | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |
Balance at Dec. 31, 2011 | $1,145.10 | $702.30 | $467 | ($24.20) | $4.40 | $1,149.50 | |
Balance (in shares) at Dec. 31, 2011 | 90,277,356 | ||||||
Increase (decrease) in stockholders' equity | |||||||
Equity compensation | 6.6 | 6.6 | 6.6 | ||||
Equity compensation (in shares) | 423,040 | ||||||
Repurchase of common stock | -9.8 | -9.8 | -9.8 | ||||
Repurchase of common stock (in shares) | -405,631 | ||||||
Dividends ($0.78, $0.62 and $0.46) | -41.5 | -41.5 | -41.5 | ||||
Repurchase of 3.5% senior subordinated convertible notes | 0.6 | 0.6 | 0.6 | ||||
Distributions to non-controlling interests | -1.4 | -1.4 | |||||
Sale of subsidiary shares to non-controlling interest | 0.3 | 0.3 | 7.2 | 7.5 | |||
Foreign currency translation | 18.3 | 18.3 | 0.2 | 18.5 | |||
Interest rate swaps | 1 | 1 | 1 | ||||
Other | -1.9 | -1.9 | -1.9 | ||||
Net income | 185.5 | 185.5 | 1.7 | 187.2 | |||
Balance at Dec. 31, 2012 | 1,304.20 | 700 | 611 | -6.8 | 12.1 | 1,316.30 | |
Balance (in shares) at Dec. 31, 2012 | 90,294,765 | ||||||
Increase (decrease) in stockholders' equity | |||||||
Equity compensation | 9.2 | 9.2 | 9.2 | ||||
Equity compensation (in shares) | 456,784 | ||||||
Repurchase of common stock | -15.8 | -15.8 | -15.8 | ||||
Repurchase of common stock (in shares) | -507,818 | ||||||
Dividends ($0.78, $0.62 and $0.46) | -56 | -56 | -56 | ||||
Distributions to non-controlling interests | -1.3 | -1.3 | |||||
Sale of subsidiary shares to non-controlling interest | 0.2 | 0.2 | 4.3 | 4.5 | |||
Deconsolidation of Italian investment | -8.3 | -8.3 | |||||
Reconsolidation of Italian investment | 8.9 | 8.9 | |||||
Foreign currency translation | 11 | 11 | 0.5 | 11.5 | |||
Interest rate swaps | 4 | 4 | 4 | ||||
Other | 3.4 | 3.4 | 3.4 | ||||
Net income | 244.2 | 244.2 | 1.5 | 245.7 | |||
Balance at Dec. 31, 2013 | 1,504.40 | 693.6 | 799.2 | 11.6 | 17.7 | 1,522.10 | |
Balance (in shares) at Dec. 31, 2013 | 90,243,731 | ||||||
Increase (decrease) in stockholders' equity | |||||||
Equity compensation | 12.3 | 12.3 | 12.3 | ||||
Equity compensation (in shares) | 336,459 | ||||||
Repurchase of common stock | -15.5 | -15.5 | -15.5 | ||||
Repurchase of common stock (in shares) | -335,350 | ||||||
Dividends ($0.78, $0.62 and $0.46) | -70.5 | -70.5 | -70.5 | ||||
Distributions to non-controlling interests | -1.7 | -1.7 | |||||
Sale of subsidiary shares to non-controlling interest | 0.3 | 0.3 | 0.1 | 0.4 | |||
Purchase of controlling interest | 10.2 | 10.2 | |||||
Foreign currency translation | -63.1 | -63.1 | -1.3 | -64.4 | |||
Interest rate swaps | 4.7 | 4.7 | 4.7 | ||||
Other | -6.5 | -6.5 | -6.5 | ||||
Net income | 286.7 | 286.7 | 3.4 | 290.1 | |||
Balance at Dec. 31, 2014 | $1,652.80 | $690.70 | $1,015.40 | ($53.30) | $28.40 | $1,681.20 | |
Balance (in shares) at Dec. 31, 2014 | 90,244,840 |
CONSOLIDATED_STATEMENT_OF_EQUI1
CONSOLIDATED STATEMENT OF EQUITY (Parenthetical) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Dividends per share (in dollars per share) | $0.78 | $0.62 | $0.46 |
Interest rate (as a percent) | 3.50% | ||
3.5% Notes | |||
Interest rate (as a percent) | 3.50% |
Organization_and_Summary_of_Si
Organization and Summary of Significant Accounting Policies | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Organization and Summary of Significant Accounting Policies | ||||||||||||||
Organization and Summary of Significant Accounting Policies | ||||||||||||||
1. Organization and Summary of Significant Accounting Policies | ||||||||||||||
Unless the context otherwise requires, the use of the terms "PAG," "we," "us," and "our" in these Notes to the Consolidated Financial Statements refers to Penske Automotive Group, Inc. and its consolidated subsidiaries. | ||||||||||||||
Business Overview and Concentrations | ||||||||||||||
We are an international transportation services company that operates automotive and commercial vehicle dealerships principally in the United States and Western Europe, and distributes commercial vehicles, diesel engines, gas engines, power systems and related parts and services principally in Australia and New Zealand. | ||||||||||||||
In 2014, our business generated $17.2 billion in total revenue which is comprised of $16.6 billion from retail automotive dealerships, $125.6 million from retail commercial vehicle dealerships and $448.9 million from commercial vehicle distribution and other operations. | ||||||||||||||
Retail Automotive Dealership. We believe we are the second largest automotive retailer headquartered in the U.S. as measured by the $16.6 billion in total retail automotive dealership revenue we generated in 2014. As of December 31, 2014, we operated 327 automotive retail franchises, of which 179 franchises are located in the U.S. and 148 franchises are located outside of the U.S. The franchises outside the U.S. are located primarily in the U.K. | ||||||||||||||
We are engaged in the sale of new and used motor vehicles and related products and services, including vehicle service, collision repair, and placement of finance and lease contracts, third-party insurance products and other aftermarket products. We operate dealerships under franchise agreements with a number of automotive manufacturers and distributors. In accordance with individual franchise agreements, each dealership is subject to certain rights and restrictions typical of the industry. The ability of the manufacturers to influence the operations of the dealerships, or the loss of a significant number of franchise agreements, could have a material impact on our results of operations, financial position and cash flows. | ||||||||||||||
For the year ended December 31, 2014, BMW/MINI franchises accounted for 27% of our total automotive dealership revenues, Audi/Volkswagen/Porsche/Bentley franchises accounted for 22%, Toyota/Lexus/Scion franchises accounted for 15%, and Mercedes-Benz/Sprinter/smart accounted for 11%. No other manufacturers' franchises accounted for more than 10% of our total automotive dealership revenues. At December 31, 2014 and 2013, we had receivables from manufacturers of $169.9 million and $145.8 million, respectively. In addition, a large portion of our contracts in transit, which are included in accounts receivable, are due from manufacturers' captive finance companies. | ||||||||||||||
During the year ended December 31, 2014, we acquired two franchises and were also awarded six franchises. We disposed of seven franchises principally consisting of four franchises in Bremen, Germany which were consolidated with our Hamburg operations. Additionally, in 2014, we acquired a 50% ownership interest in a group of eight BMW and MINI franchises in Barcelona, Spain, a new market for us. | ||||||||||||||
Retail Commercial Vehicle Dealership. In November 2014, we acquired a controlling interest in The Around The Clock Freightliner Group, a heavy and medium duty truck dealership group located in Texas, Oklahoma and New Mexico, which we have renamed Penske Commercial Vehicles US ("PCV US"). Prior to this transaction, we held a 32% interest in PCV US and accounted for this investment under the equity method. We acquired the additional interest in PCV US for $75.3 million, resulting in us owning a controlling interest of 91%. We funded the purchase price using our U.S. revolving credit facility. As a result of this transaction, we recognized a gain of $16.0 million in current period earnings, under the caption "Gain on investment" on our statement of income, as a result of remeasuring at fair value our previously held noncontrolling interest in PCV US as of the acquisition date, in accordance with Accounting Standards Codification ("ASC") 805, Business Combinations. PCV US operates sixteen locations, including ten full-service dealerships offering principally Freightliner, Western Star, and Sprinter-branded trucks. Two of these locations, Freightliner of Chattanooga and Freightliner of Knoxville, were acquired in February 2015. PCV US also offers a full range of used trucks available for sale as well as service and parts departments, many of which are open 24 hours a day, seven days a week. From our acquisition on November 1, 2014 through December 31, 2014, this business generated $125.6 million of revenue. | ||||||||||||||
Commercial Vehicle Distribution. Since August 30, 2013, we have been the exclusive importer and distributor of Western Star heavy duty trucks (a Daimler brand), MAN heavy and medium duty trucks and buses (a VW Group brand), and Dennis Eagle refuse collection vehicles, together with associated parts across Australia, New Zealand and portions of the Pacific. The business, known as Penske Commercial Vehicles Australia, distributes commercial vehicles and parts to a network of more than 70 dealership locations, including three company-owned retail commercial vehicle dealerships. This business represented 2.3% of our total revenues and 2.4% of our total gross profit in 2014. | ||||||||||||||
On October 1, 2014, we acquired MTU Detroit Diesel Australia Pty Ltd. ("MTU-DDA"), a leading distributor of diesel and gas engines and power systems, representing MTU, Detroit Diesel, Mercedes-Benz Industrial, Allison Transmission and MTU Onsite Energy, for a purchase price of approximately $115.0 million (AU $131.5 million) which was funded by our U.S. revolving credit facility and our U.K. credit facility. MTU-DDA offers products across the on- and off-highway markets in Australia, New Zealand and the Pacific and supports full parts and aftersales service through a network of branches, field locations and dealers across the region. The on-highway portion of this business complements our existing Penske Commercial Vehicles Australia distribution business. From our acquisition on October 1, 2014 through December 31, 2014, this business generated $52.5 million of revenue. | ||||||||||||||
Penske Truck Leasing. We hold a 9.0% limited partnership interest in Penske Truck Leasing Co., L.P. ("PTL"), a leading provider of transportation and supply chain services. | ||||||||||||||
Basis of Presentation | ||||||||||||||
The consolidated financial statements include all majority-owned subsidiaries. Investments in affiliated companies, representing an ownership interest in the voting stock of the affiliate of between 20% and 50% or an investment in a limited partnership or a limited liability corporation for which our investment is more than minor, are stated at the cost of acquisition plus our equity in undistributed net earnings since acquisition. All intercompany accounts and transactions have been eliminated in consolidation. | ||||||||||||||
The consolidated financial statements, including the comparative periods presented, have been adjusted for entities that have been treated as discontinued operations through December 31, 2014 in accordance with generally accepted accounting principles. | ||||||||||||||
Estimates | ||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The accounts requiring the use of significant estimates include accounts receivable, inventories, income taxes, intangible assets and certain reserves. | ||||||||||||||
Cash and Cash Equivalents | ||||||||||||||
Cash and cash equivalents include all highly-liquid investments that have an original maturity of three months or less at the date of purchase. | ||||||||||||||
Contracts in Transit | ||||||||||||||
Contracts in transit represent receivables from unaffiliated finance companies relating to the sale of customers' installment sales and lease contracts arising in connection with the sale of a vehicle by us. Contracts in transit, included in accounts receivable, net in our consolidated balance sheets, amounted to $264.8 million and $250.5 million as of December 31, 2014 and 2013, respectively. | ||||||||||||||
Inventory Valuation | ||||||||||||||
Inventories are stated at the lower of cost or market. Cost for new and used vehicle inventories includes acquisition, reconditioning, dealer installed accessories, and transportation expenses and is determined using the specific identification method. Inventories of automotive dealership parts and accessories are accounted for using the "first-in, first-out" ("FIFO") method of inventory accounting and the cost is based on factory list prices. | ||||||||||||||
Property and Equipment | ||||||||||||||
Property and equipment are recorded at cost and depreciated over estimated useful lives using the straight-line method. Useful lives for purposes of computing depreciation for assets, other than leasehold improvements, range between 3 and 15 years. Leasehold improvements and equipment under capital lease are depreciated over the shorter of the term of the lease or the estimated useful life of the asset, not to exceed 40 years. | ||||||||||||||
Expenditures relating to recurring repair and maintenance are expensed as incurred. Expenditures that increase the useful life or substantially increase the serviceability of an existing asset are capitalized. When equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the balance sheet, with any resulting gain or loss being reflected in income. | ||||||||||||||
Income Taxes | ||||||||||||||
Tax regulations may require items to be included in our tax return at different times than when those items are reflected in our financial statements. Some of the differences are permanent, such as expenses that are not deductible on our tax return, and some are temporary differences, such as the timing of depreciation expense. Temporary differences create deferred tax assets and liabilities. Deferred tax assets generally represent items that will be used as a tax deduction or credit in our tax return in future years which we have already recorded in our financial statements. Deferred tax liabilities generally represent deductions taken on our tax return that have not yet been recognized as an expense in our financial statements. We establish valuation allowances for our deferred tax assets if the amount of expected future taxable income is not more likely than not to allow for the use of the deduction or credit. | ||||||||||||||
Intangible Assets | ||||||||||||||
Our principal intangible assets relate to our franchise agreements with vehicle manufacturers and distributors, which represent the estimated value of franchises acquired in business combinations, our distribution agreements with commercial vehicle manufacturers, which represent the estimated value of distribution rights acquired in business combinations, and goodwill, which represents the excess of cost over the fair value of tangible and identified intangible assets acquired in business combinations. We believe the franchise values of our automotive dealerships and the distribution agreements of our commercial vehicle distribution operations have an indefinite useful life based on the following: | ||||||||||||||
• | Automotive retailing and commercial vehicle distribution are mature industries and are based on franchise and distribution agreements with the vehicle manufacturers and distributors; | |||||||||||||
• | There are no known changes or events that would alter the automotive retailing franchise or commercial vehicle distribution environments; | |||||||||||||
• | Certain franchise agreement terms are indefinite; | |||||||||||||
• | Franchise and distribution agreements that have limited terms have historically been renewed by us without substantial cost; and | |||||||||||||
• | Our history shows that manufacturers and distributors have not terminated our franchise or distribution agreements. | |||||||||||||
Impairment Testing | ||||||||||||||
Other indefinite-lived intangible assets are assessed for impairment annually on October 1 and upon the occurrence of an indicator of impairment through a comparison of its carrying amount and estimated fair value. An indicator of impairment exists if the carrying value exceeds its estimated fair value and an impairment loss may be recognized up to that excess. The fair value is determined using a discounted cash flow approach, which includes assumptions about revenue and profitability growth, profit margins, and the cost of capital. We also evaluate in connection with the annual impairment testing whether events and circumstances continue to support our assessment that the other indefinite-lived intangible assets continue to have an indefinite life. | ||||||||||||||
Goodwill impairment is assessed at the reporting unit level annually on October 1 and upon the occurrence of an indicator of impairment. Our operations are organized by management into operating segments by line of business and geography. We have determined that we have two reportable segments as defined in generally accepted accounting principles for segment reporting: (i) Retail Automotive, consisting of our automotive retail operations, and (ii) Other, consisting of our retail commercial vehicle dealership operations, our commercial vehicle distribution operations and our investments in non-automotive retail operations. We have determined that the dealerships in each of our operating segments within the Retail Automotive reportable segment are components that are aggregated into four geographical reporting units for the purpose of goodwill impairment testing, as they (A) have similar economic characteristics (all are automotive dealerships having similar margins), (B) offer similar products and services (all sell new and used vehicles, service, parts and third-party finance and insurance products), (C) have similar target markets and customers (generally individuals) and (D) have similar distribution and marketing practices (all distribute products and services through dealership facilities that market to customers in similar fashions). The geographic reporting units are Eastern, Central, and Western United States and International. The goodwill included in our Other reportable segment relates to our commercial vehicle operating segments. | ||||||||||||||
An indicator of goodwill impairment exists if the carrying amount of the reporting unit, including goodwill, is determined to exceed its estimated fair value. We have estimated the fair value of our reporting units using an "income" valuation approach. The "income" valuation approach estimates our enterprise value using a net present value model, which discounts projected free cash flows of our business using the weighted average cost of capital as the discount rate. In connection with this process, we also reconcile the estimated aggregate fair values of our reporting units to our market capitalization. We believe this reconciliation process is consistent with a market participant perspective. This consideration would also include a control premium that represents the estimated amount an investor would pay for our equity securities to obtain a controlling interest, and other significant assumptions including revenue and profitability growth, franchise profit margins, residual values and the cost of capital. We concluded the fair value of our reporting units substantially exceeded the carrying values. | ||||||||||||||
Investments | ||||||||||||||
We account for each of our investments under the equity method, pursuant to which we record our proportionate share of the investee's income each period. The net book value of our investments was $352.8 million and $346.9 million as of December 31, 2014 and 2013, respectively. Investments for which there is not a liquid, actively traded market are reviewed periodically by management for indicators of impairment. If an indicator of impairment is identified, management estimates the fair value of the investment using a discounted cash flow approach, which includes assumptions relating to revenue and profitability growth, profit margins, residual values and the cost of capital. Declines in investment values that are deemed to be other than temporary may result in an impairment charge reducing the investments' carrying value to fair value. | ||||||||||||||
Foreign Currency Translation | ||||||||||||||
For all of our non-U.S. operations, the functional currency is the local currency. The revenue and expense accounts of our non-U.S. operations are translated into U.S. dollars using the average exchange rates that prevailed during the period. Assets and liabilities of non-U.S. operations are translated into U.S. dollars using period end exchange rates. Cumulative translation adjustments relating to foreign functional currency assets and liabilities are recorded in accumulated other comprehensive income (loss), a separate component of equity. | ||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||
Accounting standards define fair value as the price that would be received from selling an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Accounting standards establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value and also establishes the following three levels of inputs that may be used to measure fair value: | ||||||||||||||
Level 1 | Quoted prices in active markets for identical assets or liabilities | |||||||||||||
Level 2 | Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted market prices in markets that are not active; or model-derived valuations or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities | |||||||||||||
Level 3 | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities | |||||||||||||
Our financial instruments consist of cash and cash equivalents, debt, floor plan notes payable, forward exchange contracts and interest rate swaps used to hedge future cash flows. Other than our fixed rate debt, the carrying amount of all significant financial instruments approximates fair value due either to length of maturity, the existence of variable interest rates that approximate prevailing market rates, or as a result of mark to market accounting. | ||||||||||||||
Our fixed rate debt consists of amounts outstanding under our senior subordinated notes and mortgage facilities. We estimate the fair value of our senior unsecured notes using quoted prices for the identical liability (Level 2), and we estimate the fair value of our mortgage facilities using a present value technique based on our current market interest rates for similar types of financial instruments (Level 2). A summary of the carrying values and fair values of our 5.75% senior subordinated notes, 5.375% senior subordinated notes and our fixed rate mortgage facilities are as follows: | ||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||
5.75% senior subordinated notes due 2022 | $ | 550.0 | $ | 558.4 | $ | 550.0 | $ | 565.1 | ||||||
5.375% senior subordinated notes due 2024 | 300.0 | 306.0 | — | — | ||||||||||
Mortgage facilities | 169.7 | 171.6 | 118.6 | 117.0 | ||||||||||
Revenue Recognition | ||||||||||||||
Dealership Vehicle, Parts and Service Sales | ||||||||||||||
We record revenue when vehicles are delivered and title has passed to the customer, when vehicle service or repair work is completed and when parts are delivered to our customers. Sales promotions that we offer to customers are accounted for as a reduction of revenues at the time of sale. Rebates and other incentives offered directly to us by manufacturers are recognized as a reduction of cost of sales. Reimbursements of qualified advertising expenses are treated as a reduction of selling, general and administrative expenses. The amounts received under certain manufacturer rebate and incentive programs are based on the attainment of program objectives, and such earnings are recognized either upon the sale of the vehicle for which the award was received, or upon attainment of the particular program goals if not associated with individual vehicles. Taxes collected from customers and remitted to governmental authorities are recorded on a net basis (excluded from revenue). | ||||||||||||||
Dealership Finance and Insurance Sales | ||||||||||||||
Subsequent to the sale of a vehicle to a customer, we sell installment sale contracts to various financial institutions on a non-recourse basis (with specified exceptions) to mitigate the risk of default. We receive a commission from the lender equal to either the difference between the interest rate charged to the customer and the interest rate set by the financing institution or a flat fee. We also receive commissions for facilitating the sale of various products to customers, including guaranteed vehicle protection insurance, vehicle theft protection and extended service contracts. These commissions are recorded as revenue at the time the customer enters into the contract. In the case of finance contracts, a customer may prepay or fail to pay their contract, thereby terminating the contract. Customers may also terminate extended service contracts and other insurance products, which are fully paid at purchase, and become eligible for refunds of unused premiums. In these circumstances, a portion of the commissions we received may be charged back based on the terms of the contracts. The revenue we record relating to these transactions is net of an estimate of the amount of chargebacks we will be required to pay. Our estimate is based upon our historical experience with similar contracts, including the impact of refinance and default rates on retail finance contracts and cancellation rates on extended service contracts and other insurance products. Aggregate reserves relating to chargeback activity were $25.8 million and $23.3 million as of December 31, 2014 and 2013, respectively. | ||||||||||||||
Commercial Vehicle Distribution | ||||||||||||||
Revenue from the distribution of vehicles, engines, power systems and parts is recognized at the time of delivery of goods to the retailer or the ultimate customer. | ||||||||||||||
Defined Contribution Plans | ||||||||||||||
We sponsor a number of defined contribution plans covering a significant majority of our employees. Our contributions to such plans are discretionary and are based on the level of compensation and contributions by plan participants. We incurred expense of $17.7 million, $15.1 million, and $13.7 million relating to such plans during the years ended December 31, 2014, 2013, and 2012, respectively. | ||||||||||||||
Advertising | ||||||||||||||
Advertising costs are expensed as incurred or when such advertising takes place. We incurred net advertising costs of $93.3 million, $80.8 million, and $79.1 million during the years ended December 31, 2014, 2013, and 2012, respectively. Qualified advertising expenditures reimbursed by manufacturers, which are treated as a reduction of advertising expense, were $14.3 million, $13.1 million, and $11.9 million during the years ended December 31, 2014, 2013, and 2012, respectively. | ||||||||||||||
Self-Insurance | ||||||||||||||
We retain risk relating to certain of our general liability insurance, workers' compensation insurance, vehicle physical damage insurance, property insurance, employment practices liability insurance, directors and officers insurance, and employee medical benefits in the U.S. As a result, we are likely to be responsible for a significant portion of the claims and losses incurred under these programs. The amount of risk we retain varies by program, and, for certain exposures, we have pre-determined maximum loss limits for certain individual claims and/or insurance periods. Losses, if any, above such pre-determined loss limits are paid by third-party insurance carriers. Certain insurers have limited available property coverage in response to the natural catastrophes experienced in recent years. Our estimate of future losses is prepared by management using our historical loss experience and industry-based development factors. Aggregate reserves relating to retained risk were $24.6 million and $21.1 million as of December 31, 2014 and 2013, respectively. Changes in the reserve estimate during 2014 relate primarily to our general liability and workers compensation programs. | ||||||||||||||
Earnings Per Share | ||||||||||||||
Basic earnings per share is computed using net income attributable to Penske Automotive Group common stockholders and the number of weighted average shares of voting common stock outstanding, including outstanding unvested restricted stock awards which contain rights to non-forfeitable dividends. Diluted earnings per share is computed using net income attributable to Penske Automotive Group common stockholders and the number of weighted average shares of voting common stock outstanding, adjusted for any dilutive effects. A reconciliation of the number of shares used in the calculation of basic and diluted earnings per share for the years ended December 31, 2014, 2013, and 2012 follows: | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Weighted average number of common shares outstanding | 90,318,839 | 90,273,747 | 90,318,315 | |||||||||||
Effect of non-participatory equity compensation | 36,000 | 56,874 | 24,000 | |||||||||||
| | | | | | | | | | | ||||
Weighted average number of common shares outstanding, including effect of dilutive securities | 90,354,839 | 90,330,621 | 90,342,315 | |||||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Hedging | ||||||||||||||
Generally accepted accounting principles relating to derivative instruments and hedging activities require all derivatives, whether designated in hedging relationships or not, to be recorded on the balance sheet at fair value. These accounting principles also define requirements for designation and documentation of hedging relationships, as well as ongoing effectiveness assessments, which must be met in order to qualify for hedge accounting. For a derivative that does not qualify as a hedge, changes in fair value are recorded in earnings immediately. If the derivative is designated in a fair-value hedge, the changes in the fair value of the derivative and the hedged item are recorded in earnings. If the derivative is designated as a cash-flow hedge, effective changes in the fair value of the derivative are recorded in accumulated other comprehensive income (loss), a separate component of equity, and recorded in the income statement only when the hedged item affects earnings. Changes in the fair value of the derivative attributable to hedge ineffectiveness are recorded in earnings immediately. | ||||||||||||||
Stock-Based Compensation | ||||||||||||||
Generally accepted accounting principles relating to share-based payments require us to record compensation expense for all awards based on their grant-date fair value. Our share-based payments have generally been in the form of "non-vested shares," the fair value of which are measured as if they were vested and issued on the grant date. | ||||||||||||||
Recent Accounting Pronouncements | ||||||||||||||
In April 2014, the FASB issued ASU No. 2014-8, "Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360)—Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity." ASU No. 2014-8 changes the requirements for reporting discontinued operations to only allow presentation of a disposal of an entity or component of an entity as a discontinued operation if it represents a strategic shift that has (or will have) a major effect on an entity's operations or financial results. This ASU is effective for us for the annual period beginning January 1, 2015. We anticipate the adoption of ASU No. 2014-8 to result in fewer of our disposals qualifying for discontinued operations treatment. | ||||||||||||||
In May 2014, the FASB issued ASU No. 2014-9, "Revenue from Contracts with Customers (Topic 606)." This ASU supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. ASU No. 2014-09 will require an entity to recognize revenue when it transfers promised goods or services to customers using a five-step model that requires entities to exercise judgment when considering the terms of the contracts. This ASU is effective for us beginning after January 1, 2017 and can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption. We are currently assessing the impact the adoption of this update will have on our consolidated financial position, results of operations, and cash flows. | ||||||||||||||
Equity_Method_Investees
Equity Method Investees | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Equity Method Investees | |||||||||||
Equity Method Investees | |||||||||||
2. Equity Method Investees | |||||||||||
As of December 31, 2014, we have investments in the following companies that are accounted for under the equity method: the Jacobs Group (50%), the Nix Group (50%), Ibericar Keldinich SL (50%), Penske Wynn Ferrari Maserati (50%), Max Cycles (50%), Penske Commercial Leasing Australia (45%), Penske Vehicle Services (31%), and National Powersport Auctions (7%). Jacobs Group, Nix Group, Ibericar Keldinich SL, and Penske Wynn Ferrari Maserati are engaged in the sale and servicing of automobiles. Penske Commercial Leasing Australia rents heavy-duty commercial vehicles in Australia, Max Cycles is engaged in the sale and servicing of BMW motorcycles, Penske Vehicle Services is an automotive fleet management company, and National Powersport Auctions is an auctioneer of powersport vehicles. These investments in entities accounted for under the equity method amounted to $73.3 million and $78.1 million at December 31, 2014 and 2013, respectively. | |||||||||||
We also have a 9.0% limited partnership interest in PTL, a leading provider of transportation and supply chain services. Our investment in PTL, which is accounted for under the equity method, amounted to $279.5 million and $268.8 million at December 31, 2014 and 2013, respectively. | |||||||||||
The combined results of operations and financial position of our equity method investees as of December 31 for each of the years presented are summarized as follows: | |||||||||||
Condensed income statement information: | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Revenues | $ | 6,620.1 | $ | 6,177.0 | $ | 6,043.4 | |||||
Gross margin | 2,181.4 | 2,043.5 | 1,897.3 | ||||||||
Net income | 357.2 | 304.0 | 284.2 | ||||||||
Equity in net income of affiliates | 40.8 | 30.7 | 27.6 | ||||||||
Condensed balance sheet information: | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Current assets | $ | 1,242.0 | $ | 1,194.2 | |||||||
Noncurrent assets | 9,230.8 | 8,377.8 | |||||||||
| | | | | | | | ||||
Total assets | $ | 10,472.8 | $ | 9,572.0 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Current liabilities | $ | 958.1 | $ | 888.8 | |||||||
Noncurrent liabilities | 7,276.8 | 6,517.5 | |||||||||
Equity | 2,237.9 | 2,165.7 | |||||||||
| | | | | | | | ||||
Total liabilities and equity | $ | 10,472.8 | $ | 9,572.0 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Business_Combinations
Business Combinations | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Business Combinations | ||||||||
Business Combinations | ||||||||
3. Business Combinations | ||||||||
During 2014, in addition to acquiring two automotive retail franchises, we acquired a distributor of diesel and gas engines and power systems to complement our commercial vehicle distribution business, acquired a controlling interest in a commercial vehicle dealership group in the U.S., as well as made an additional investment in an entity previously accounted under the equity method. The companies acquired in 2014 generated $351.5 million of revenue and $5.7 million of pre-tax income from our date of acquisition through December 31, 2014. As previously discussed in Note 1, in 2014, we recognized a gain of $16.0 million for the difference between the carrying value and the fair value of the previously held equity interest in PCV US, which is included in "Gain on investment" on our statement of income. During 2013, we acquired our commercial vehicle distribution business and nine automotive retail franchises. Our financial statements include the results of operations of the acquired entities from the date of acquisition. The fair value of the assets acquired and liabilities assumed have been recorded in our consolidated financial statements, and may be subject to adjustment pending completion of final valuation. A summary of the aggregate consideration paid and the aggregate amounts of the assets acquired and liabilities assumed for the years ended December 31, 2014 and 2013 follows: | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Accounts receivable | $ | 66.2 | $ | 20.1 | ||||
Inventory | 197.9 | 161.5 | ||||||
Other current assets | 5.9 | 2.6 | ||||||
Property and equipment | 95.2 | 14 | ||||||
Indefinite-lived intangibles | 266.4 | 187.6 | ||||||
Other non-current assets | 10.7 | 9 | ||||||
Current liabilities | (83.4 | ) | (79.5 | ) | ||||
Non-current liabilities | (12.1 | ) | (1.3 | ) | ||||
| | | | | | | | |
Total | 546.8 | 314 | ||||||
Seller financed/assumed debt | (134.4 | ) | — | |||||
Fair value of previously held interest in PCV US | (47.4 | ) | — | |||||
Fair value of PCV US noncontrolling interest | (10.0 | ) | — | |||||
| | | | | | | | |
Total cash used in acquisitions | 355 | 314 | ||||||
| | | | | | | | |
| | | | | | | | |
The following unaudited consolidated pro forma results of operations of PAG for the years ended December 31, 2014 and 2013 give effect to acquisitions consummated during 2014 and 2013 as if they had occurred on January 1, 2013: | ||||||||
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Revenues | $ | 17,964.5 | $ | 16,687.5 | ||||
Income from continuing operations | 311.1 | 286.2 | ||||||
Net income | 292.4 | 281.6 | ||||||
Income from continuing operations per diluted common share | $ | 3.44 | $ | 3.17 | ||||
Net income per diluted common share | $ | 3.23 | $ | 3.12 | ||||
Discontinued_Operations_and_Di
Discontinued Operations and Divestitures | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Discontinued Operations and Divestitures | |||||||||||
Discontinued Operations and Divestitures | |||||||||||
4. Discontinued Operations and Divestitures | |||||||||||
Discontinued Operations | |||||||||||
We account for dispositions as discontinued operations when it is evident that the operations and cash flows of an entity being disposed of will be eliminated from ongoing operations and that we will not have any significant continuing involvement in its operations. | |||||||||||
In evaluating whether the cash flows of a dealership in our Retail reportable segment will be eliminated from ongoing operations, we consider whether it is likely that customers will migrate to similar franchises that we own in the same geographic market. Our consideration includes an evaluation of the brands sold at other dealerships we operate in the market and their proximity to the disposed dealership. When we dispose of franchises, we typically do not have continuing brand representation in that market. If the franchise being disposed of is located in a complex of PAG owned dealerships, we do not treat the disposition as a discontinued operation if we believe that the cash flows previously generated by the disposed franchise will be replaced by expanded operations of the remaining or replacement franchises. | |||||||||||
Combined financial information regarding entities accounted for as discontinued operations follows: | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Revenues | $ | 261.7 | $ | 524.8 | $ | 690.5 | |||||
Pre-tax loss | (35.6 | ) | (6.2 | ) | (18.2 | ) | |||||
Gain on disposal | 14.8 | 0.8 | 8.1 | ||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Inventory | $ | 34.7 | $ | 72.6 | |||||||
Other assets | 151.4 | 181.2 | |||||||||
| | | | | | | | ||||
Total assets | 186.1 | 253.8 | |||||||||
| | | | | | | | ||||
| | | | | | | | ||||
Floor plan notes payable (including non-trade) | 27.9 | 57.5 | |||||||||
Other liabilities | 104.8 | 109.0 | |||||||||
| | | | | | | | ||||
Total liabilities | 132.7 | 166.5 | |||||||||
| | | | | | | | ||||
| | | | | | | | ||||
Divestitures | |||||||||||
During the first quarter of 2015, we divested our car rental business which included Hertz car rental franchises in the Memphis, Tennessee market and certain markets throughout Indiana. We received proceeds of $17.8 million from the sale excluding sales of car rental vehicles. The results of operations of our car rental business are included in discontinued operations for the years ended December 31, 2014, 2013, and 2012. | |||||||||||
Inventories
Inventories | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Inventories | ||||||||
Inventories | 5. Inventories | |||||||
Inventories consisted of the following: | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
New vehicles | $ | 1,792.5 | $ | 1,696.7 | ||||
Used vehicles | 639.9 | 582.1 | ||||||
Commercial vehicles and parts | 283.3 | 126.9 | ||||||
Parts, accessories and other | 103.5 | 95.7 | ||||||
| | | | | | | | |
Total inventories | $ | 2,819.2 | $ | 2,501.4 | ||||
| | | | | | | | |
| | | | | | | | |
We receive credits from certain vehicle manufacturers that reduce cost of sales when the vehicles are sold. Such credits amounted to $39.9 million, $34.1 million, and $30.5 million during the years ended December 31, 2014, 2013, and 2012, respectively. | ||||||||
Property_and_Equipment
Property and Equipment | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property and Equipment | ||||||||
Property and Equipment | ||||||||
6. Property and Equipment | ||||||||
Property and equipment consisted of the following: | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Buildings and leasehold improvements | $ | 1,225.40 | $ | 1,069.80 | ||||
Furniture, fixtures and equipment | 537.7 | 459.8 | ||||||
| | | | | | | | |
Total | 1,763.10 | 1,529.60 | ||||||
Less: Accumulated depreciation | (434.3 | ) | (410.1 | ) | ||||
| | | | | | | | |
Property and equipment, net | $ | 1,328.80 | $ | 1,119.50 | ||||
| | | | | | | | |
| | | | | | | | |
Approximately $27.0 million of capitalized interest is included in buildings and leasehold improvements as of December 31, 2014 and 2013, and is being depreciated over the useful life of the related assets. | ||||||||
Intangible_Assets
Intangible Assets | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Intangible Assets | |||||||||||
Intangible Assets | |||||||||||
7. Intangible Assets | |||||||||||
Following is a summary of the changes in the carrying amount of goodwill and other indefinite-lived intangible assets during the years ended December 31, 2014 and 2013, net of accumulated impairment losses recorded prior to December 31, 2012 of $606.3 million and $37.1 million, respectively: | |||||||||||
Goodwill | Other Indefinite- | ||||||||||
Lived Intangible | |||||||||||
Assets | |||||||||||
Balance—December 31, 2012 | $ | 961.5 | $ | 271.5 | |||||||
Additions | 165.5 | 22.1 | |||||||||
Deconsolidation of Italian investment | (7.2 | ) | (2.9 | ) | |||||||
Reconsolidation of Italian investment | 7.4 | 3.1 | |||||||||
Foreign currency translation | 7.7 | 1.4 | |||||||||
| | | | | | | | ||||
Balance—December 31, 2013 | 1,134.90 | 295.2 | |||||||||
Additions | 165.4 | 101 | |||||||||
Foreign currency translation | (34.0 | ) | (10.0 | ) | |||||||
| | | | | | | | ||||
Balance—December 31, 2014 | $ | 1,266.30 | $ | 386.2 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Following is a summary of the changes in the carrying amount of goodwill by reportable segment during the years ended December 31, 2014 and 2013: | |||||||||||
Retail | Other | Total | |||||||||
Automotive | |||||||||||
Balance—December 31, 2012 | $ | 961.5 | $ | — | $ | 961.5 | |||||
Additions | 49.6 | 115.9 | 165.5 | ||||||||
Deconsolidation of Italian investment | (7.2 | ) | — | (7.2 | ) | ||||||
Reconsolidation of Italian investment | 7.4 | — | 7.4 | ||||||||
Foreign currency translation | 9.2 | (1.5 | ) | 7.7 | |||||||
| | | | | | | | | | | |
Balance—December 31, 2013 | 1,020.50 | 114.4 | 1,134.90 | ||||||||
Additions | 53.7 | 111.7 | 165.4 | ||||||||
Foreign currency translation | (24.7 | ) | (9.3 | ) | (34.0 | ) | |||||
| | | | | | | | | | | |
Balance—December 31, 2014 | $ | 1,049.50 | $ | 216.8 | $ | 1,266.30 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
We test for impairment of our intangible assets at least annually. We did not record any impairment charges relating to our intangible assets in 2014, 2013 or 2012. | |||||||||||
Vehicle_Financing
Vehicle Financing | 12 Months Ended |
Dec. 31, 2014 | |
Vehicle Financing | |
Vehicle Financing | |
8. Vehicle Financing | |
We finance substantially all of the commercial vehicles we purchase for distribution, new vehicles for retail sale and a portion of our used vehicle inventories for retail sale under revolving floor plan arrangements with various lenders, including the captive finance companies associated with automotive manufacturers. In the U.S., the floor plan arrangements are due on demand; however, we have not historically been required to repay floor plan advances prior to the sale of the vehicles that have been financed. We typically make monthly interest payments on the amount financed. Outside of the U.S., substantially all of the floor plan arrangements are payable on demand or have an original maturity of 90 days or less, and we are generally required to repay floor plan advances at the earlier of the sale of the vehicles that have been financed or the stated maturity. | |
The floor plan agreements typically grant a security interest in substantially all of the assets of our dealership subsidiaries, and in the U.S., Australia and New Zealand are guaranteed by us. Interest rates under the floor plan arrangements are variable and increase or decrease based on changes in the prime rate, defined London Interbank Offered Rate ("LIBOR"), the Finance House Bank Rate, the Euro Interbank Offered Rate, or the Australian or New Zealand Bank Bill Swap Rate ("BBSW"). To date, we have not experienced any material limitation with respect to the amount or availability of financing from any institution providing us vehicle financing. We also receive non-refundable credits from certain of our vehicle manufacturers, which are treated as a reduction of cost of sales as vehicles are sold. | |
The weighted average interest rate on floor plan borrowings, including the effect of the interest rate swap discussed in Note 10, was 1.7%, 1.9%, and 2.1% for 2014, 2013, and 2012, 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. | |
LongTerm_Debt
Long-Term Debt | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Long-Term Debt | ||||||||
Long-Term Debt | ||||||||
9. Long-Term Debt | ||||||||
Long-term debt consisted of the following: | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
U.S. credit agreement—revolving credit line | $ | — | $ | 90 | ||||
U.S. credit agreement—term loan | 88 | 98 | ||||||
U.K. credit agreement—revolving credit line | 121.5 | 106 | ||||||
U.K. credit agreement—term loan | 18.7 | 29.8 | ||||||
U.K. credit agreement—overdraft line of credit | 5.7 | — | ||||||
5.375% senior subordinated notes due 2024 | 300 | — | ||||||
5.75% senior subordinated notes due 2022 | 550 | 550 | ||||||
U.S. commercial vehicle capital loan | 60.5 | — | ||||||
Australia working capital loan agreement | — | — | ||||||
Mortgage facilities | 169.7 | 118.6 | ||||||
Other | 38.5 | 3.9 | ||||||
| | | | | | | | |
Total long-term debt | $ | 1,352.60 | $ | 996.3 | ||||
Less: current portion | (36.6 | ) | (14.5 | ) | ||||
| | | | | | | | |
Net long-term debt | $ | 1,316.00 | $ | 981.8 | ||||
| | | | | | | | |
| | | | | | | | |
Scheduled maturities of long-term debt for each of the next five years and thereafter are as follows: | ||||||||
2015 | $ | 36.6 | ||||||
2016 | 21.1 | |||||||
2017 | 190.9 | |||||||
2018 | 8.0 | |||||||
2019 | 147.3 | |||||||
2020 and thereafter | 948.7 | |||||||
| | | | | ||||
Total long-term debt reported | $ | 1,352.6 | ||||||
| | | | | ||||
| | | | | ||||
U.S. Credit Agreement | ||||||||
On April 1, 2014, we amended and restated our U.S. credit agreement (the "U.S. credit agreement") with Mercedes-Benz Financial Services USA LLC and Toyota Motor Credit Corporation, principally to increase the revolving borrowing capacity from $375 million to $450 million and reduce the rate on collateralized borrowings to defined LIBOR plus 200 basis points (from defined LIBOR plus 225). On October 31, 2014, we amended the U.S. credit agreement to amend and restate certain definitions and covenants, including the definition of the fixed charge coverage ratio, to give effect to the acquisition of PCV US. | ||||||||
As amended, the U.S. credit agreement provides for up to $450 million in revolving loans for working capital, acquisitions, capital expenditures, investments and other general corporate purposes and a non-amortizing term loan with a balance of $88 million. The loans mature on the termination date of the facility, which is September 30, 2017. The revolving loans bear interest at LIBOR plus 2.00%, subject to an incremental 1.50% for uncollateralized borrowings in excess of a defined borrowing base. The term loan, which bears interest at defined LIBOR plus 2.00%, may be prepaid at any time, but then may not be re-borrowed. | ||||||||
The U.S. credit agreement is fully and unconditionally guaranteed on a joint and several basis by our domestic subsidiaries and contains a number of significant covenants that, among other things, restrict our ability to dispose of assets, incur additional indebtedness, repay other indebtedness, pay dividends, create liens on assets, make investments or acquisitions and engage in mergers or consolidations. We are also required to comply with specified financial and other tests and ratios, each as defined in the U.S. credit agreement, including: a ratio of current assets to current liabilities, a fixed charge coverage ratio, a ratio of debt to stockholders' equity and a ratio of debt to earnings before interest, taxes, depreciation and amortization ("EBITDA"). A breach of these requirements would give rise to certain remedies under the agreement, the most severe of which is the termination of the agreement and acceleration of the amounts owed. | ||||||||
The U.S. credit agreement also contains typical events of default, including change of control, non-payment of obligations and cross-defaults to our other material indebtedness. Substantially all of our domestic assets are subject to security interests granted to lenders under the U.S. credit agreement. As of December 31, 2014, we had $88.0 million outstanding under our term loan and no outstanding revolver borrowings or letters of credit under the U.S. credit agreement. We repaid $10.0 million and $12.0 million under the term loan in 2014 and 2013, respectively. | ||||||||
U.K. Credit Agreement | ||||||||
Our subsidiaries in the U.K. (the "U.K. subsidiaries") are party to a £100.0 million revolving credit agreement with the Royal Bank of Scotland plc (RBS) and BMW Financial Services (GB) Limited, and an additional demand overdraft line of credit with RBS (collectively, the "U.K. credit agreement") to be used for working capital, acquisitions, capital expenditures, investments and general corporate purposes. In September 2014, we amended the U.K. credit agreement and U.K. term loan (discussed below) to provide the U.K. subsidiaries with covenant flexibility to fund the purchase of MTU Detroit Diesel Australia (discussed previously). In December 2014, we amended and restated the U.K. credit agreement principally to extend the termination date from November 2015 to December 2019 and provide additional negative covenant flexibility. The revolving loans bear interest between defined LIBOR plus 1.35% and defined LIBOR plus 3.0% and the demand overdraft line of credit bears interest at the Bank of England Base Rate plus 1.75%. As of December 31, 2014, outstanding loans under the U.K. credit agreement amounted to £81.6 million ($127.2 million). | ||||||||
The U.K. Credit Agreement is fully and unconditionally guaranteed on a joint and several basis by our U.K. subsidiaries, and contains a number of significant covenants that, among other things, restrict the ability of our U.K. subsidiaries to pay dividends, dispose of assets, incur additional indebtedness, repay other indebtedness, create liens on assets, make investments or acquisitions and engage in mergers or consolidations. In addition, our U.K. subsidiaries are required to comply with defined ratios and tests, including: a ratio of earnings before interest, taxes, amortization, and rental payments ("EBITAR") to interest plus rental payments, a measurement of maximum capital expenditures, and a debt to EBITDA ratio. A breach of these requirements would give rise to certain remedies under the agreement, the most severe of which is the termination of the agreement and acceleration of any amounts owed. | ||||||||
The U.K. credit agreement also contains typical events of default, including change of control and non-payment of obligations and cross-defaults to other material indebtedness of our U.K. subsidiaries. Substantially all of our U.K. subsidiaries' assets are subject to security interests granted to lenders under the U.K. credit agreement. | ||||||||
In 2012, our U.K. subsidiaries entered into a separate agreement with RBS, as agent for National Westminster Bank plc, providing for a £30.0 million term loan which was used for working capital and an acquisition. The term loan is repayable in £1.5 million quarterly installments through 2015 with a final payment of £7.5 million due December 31, 2015. The term loan bears interest between 2.675% and 4.325%, depending on the U.K. subsidiaries' ratio of net borrowings to earnings before interest, taxes, depreciation and amortization (as defined). As of December 31, 2014, the amount outstanding under the U.K. term loan was £12.0 million ($18.7 million). | ||||||||
5.375% Senior Subordinated Notes | ||||||||
In November 2014, we issued $300.0 million in aggregate principal amount of 5.375% Senior Subordinated Notes due 2024 (the "5.375% Notes"). Interest on the 5.375% Notes is payable semi-annually on June 1 and December 1 of each year. The 5.375% Notes mature on December 1, 2024, unless earlier redeemed or purchased by us. The 5.375% Notes are unsecured senior subordinated obligations and are guaranteed on an unsecured senior subordinated basis by our existing 100% owned domestic subsidiaries. The 5.375% Notes also contain customary negative covenants and events of default. | ||||||||
On or after December 1, 2019, we may redeem the 5.375% Notes for cash at the redemption prices noted in the indenture, plus any accrued and unpaid interest. We may also redeem up to 40% of the 5.375% Notes using the proceeds of specified equity offerings at any time prior to December 1, 2017 at a price specified in the indenture. If we experience certain "change of control" events specified in the indenture, holders of the 5.375% Notes will have the option to require us to purchase for cash all or a portion of their notes at a price equal to 101% of the principal amount of the notes, plus accrued and unpaid interest. In addition, if we make certain asset sales and do not reinvest the proceeds thereof or use such proceeds to repay certain debt, we will be required to use the proceeds of such asset sales to make an offer to purchase the notes at a price equal to 100% of the principal amount of the notes, plus accrued and unpaid interest. | ||||||||
5.75% Senior Subordinated Notes | ||||||||
In August 2012, we issued $550.0 million in aggregate principal amount of 5.75% Senior Subordinated Notes due 2022 (the "5.75% Notes"). Interest on the 5.75% Notes is payable semi-annually on April 1 and October 1 of each year. The 5.75% Notes mature on October 1, 2022, unless earlier redeemed or purchased by us. The 5.75% Notes are our unsecured senior subordinated obligations and are guaranteed on an unsecured senior subordinated basis by our existing 100% owned domestic subsidiaries. The 5.75% Notes also contain customary negative covenants and events of default. | ||||||||
On or after October 1, 2017, we may redeem the 5.75% Notes for cash at the redemption prices noted in the indenture, plus any accrued and unpaid interest. We may also redeem up to 40% of the 5.75% Notes using the proceeds of specified equity offerings at any time prior to October 1, 2015 at a price specified in the indenture. If we experience certain "change of control" events specified in the indenture, holders of the 5.75% Notes will have the option to require us to purchase for cash all or a portion of their notes at a price equal to 101% of the principal amount of the notes, plus accrued and unpaid interest. In addition, if we make certain asset sales and do not reinvest the proceeds thereof or use such proceeds to repay certain debt, we will be required to use the proceeds of such asset sales to make an offer to purchase the notes at a price equal to 100% of the principal amount of the notes, plus accrued and unpaid interest. | ||||||||
U.S. Commercial Vehicle Capital Loan | ||||||||
As of December 31, 2014, PCV US was party to a working capital loan agreement with Mercedes-Benz Financial Services USA LLC. The term loan, which bears interest at defined LIBOR plus 3.5%, requires monthly interest payments in addition to annual principal payments due on or before the 120th day following December 31, the last day of each fiscal year, with a final payment of the remaining unpaid principal balance plus accrued and unpaid interest due on October 1, 2019. The loan agreement contains typical events of default, including non-payment obligations and cross-defaults to other material indebtedness of PCV US, and provides the lender with a security interest in substantially all of the assets of PCV US. As of December 31, 2014, the amount outstanding under the capital loan was $60.5 million. In February 2015, we repaid the outstanding principal balance using funding from our U.S. revolving credit facility. | ||||||||
Australia Working Capital Loan Agreement | ||||||||
In December 2013, we entered into a working capital loan agreement with Mercedes-Benz Financial Services Australia Pty Ltd that provides us with up to AU $28.0 million ($22.9 million) of working capital availability. This agreement provides the lender with a secured interest in certain inventory and receivables of our commercial vehicle distribution business. The loan bears interest at the Australian BBSW 30-day Bill Rate plus 2.35%. As of December 31, 2014, no loans were outstanding under the working capital loan agreement. | ||||||||
Mortgage Facilities | ||||||||
We are party to several mortgages which bear interest at defined rates and require monthly principal and interest payments. These mortgage facilities also contain typical events of default, including non-payment of obligations, cross-defaults to our other material indebtedness, certain change of control events, and the loss or sale of certain franchises operated at the properties. Substantially all of the buildings and improvements on the properties financed pursuant to the mortgage facilities are subject to security interests granted to the lender. As of December 31, 2014, we owed $169.7 million of principal under our mortgage facilities. | ||||||||
Derivatives_and_Hedging
Derivatives and Hedging | 12 Months Ended |
Dec. 31, 2014 | |
Derivatives and Hedging | |
Derivatives and Hedging | |
10. Derivatives and Hedging | |
We periodically use interest rate swaps to manage interest rate risk associated with our variable rate floor plan debt. We were party to interest rate swap agreements through December 2014 pursuant to which the LIBOR portion of $300.0 million of our floating rate floor plan debt was fixed at a rate of 2.135% and $100.0 million of our floating rate floor plan debt was fixed at a rate of 1.55%. | |
We used Level 2 inputs to estimate the fair value of the interest rate swap agreements. As of December 31, 2014 and 2013, the fair value of the swaps designated as hedging instruments was estimated to be a liability of $0 million and $7.7 million, respectively. During 2014 and 2013, there was no hedge ineffectiveness recorded in our income statement. During the year ended December 31, 2014, the swaps increased the weighted average interest rate on our floor plan borrowings by approximately 30 basis points. | |
Our commercial vehicle distribution business 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, we enter 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 state them at fair value. We used 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 $2.2 million as of December 31, 2014 and 2013, respectively. | |
Commitments_and_Contingent_Lia
Commitments and Contingent Liabilities | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingent Liabilities | |||||
Commitments and Contingent Liabilities | |||||
11. Commitments and Contingent Liabilities | |||||
We are involved in litigation which may relate to claims brought by governmental authorities, issues with customers, and employment related matters, including class action claims and purported class action claims. As of December 31, 2014, 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 effect on our results of operations, financial condition or cash flows. | |||||
We have historically structured our operations so as to minimize ownership of real property. As a result, we lease or sublease substantially all of our facilities. These leases are generally for a period of between five and 20 years, and are typically structured to include renewal options at our election. We estimate the total rent obligations under these leases, including any extension periods we may exercise at our discretion and assuming constant consumer price indices, to be $4.9 billion. Pursuant to the leases for some of our larger facilities, we are required to comply with specified financial ratios, including a "rent coverage" ratio and a debt to EBITDA ratio, each as defined. For these leases, non-compliance with the ratios may require us to post collateral in the form of a letter of credit. A breach of the other lease covenants gives rise to certain remedies by the landlord, the most severe of which include the termination of the applicable lease and acceleration of the total rent payments due under the lease. | |||||
Minimum future rental payments required under operating leases in effect as of December 31, 2014 are as follows: | |||||
2015 | $ | 210.5 | |||
2016 | 207.3 | ||||
2017 | 203.0 | ||||
2018 | 200.9 | ||||
2019 | 199.5 | ||||
2020 and thereafter | 3,923.9 | ||||
| | | | | |
$ | 4,945.1 | ||||
| | | | | |
| | | | | |
Rent expense for the years ended December 31, 2014, 2013, and 2012 amounted to $190.2 million, $172.8 million, and $167.9 million, respectively. | |||||
We have sold a number of dealerships to third parties and, as a condition to certain of those sales, remain liable for the lease payments relating to the properties on which those businesses operate in the event of non-payment by the buyer. We are also party to lease agreements on properties that we no longer use in our retail operations that we have sublet to third parties. We rely on subtenants to pay the rent and maintain the property at these locations. In the event the subtenant does not perform as expected, we may not be able to recover amounts owed to us and we could be required to fulfill these obligations. We believe we have made appropriate reserves relating to these locations. The aggregate rent paid by the tenants on those properties in 2014 was approximately $25.6 million, and, in aggregate, we currently guarantee or are otherwise liable for approximately $258.6 million of these lease payments, including lease payments during available renewal periods. | |||||
We hold a 9.0% limited partnership interest in PTL. Historically, General Electric Capital Corporation ("GECC") has provided PTL with a majority of its financing. PTL has refinanced all of its GECC indebtedness. As part of that refinancing, we and the other PTL partners created a new company ("Holdings"), which, together with GECC, co-issued $700.0 million of 3.8% senior unsecured notes due 2019 (the "Holdings Bonds"). GECC agreed to be a co-obligor of the Holdings Bonds in order to achieve lower interest rates on the Holdings Bonds. Additional capital contributions from the members may be required to fund interest and principal payments on the Holdings Bonds. In addition, we have agreed to indemnify GECC for 9.0% of any principal or interest that GECC is required to pay as co-obligor, and pay GECC an annual fee of approximately $0.95 million for acting as co-obligor. The maximum amount of our obligations to GECC under this agreement is 9.0% of the required principal repayment due in 2019 (which is expected to be $63.1 million) and 9.0% of interest payments under the Holdings Bonds, plus fees and default interest, if any. | |||||
Our floor plan credit agreement with Mercedes Benz Financial Services Australia ("MBA") provides us revolving loans for the acquisition of commercial vehicles for distribution to our retail network. This facility includes a limited parent guarantee and a commitment to repurchase dealer vehicles in the event the dealer's floor plan agreement with MBA is terminated. | |||||
We have $23.5 million of letters of credit outstanding as of December 31, 2014, and have posted $15.0 million of surety bonds in the ordinary course of business. | |||||
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Related Party Transactions | |||||||
Related Party Transactions | |||||||
12. Related Party Transactions | |||||||
We sometimes pay to and/or receive fees from Penske Corporation and its affiliates for services rendered in the normal course of business, or to reimburse payments made to third parties on each other's behalf. These transactions are reviewed periodically by our Audit Committee and reflect the provider's cost or an amount mutually agreed upon by both parties. During 2014, 2013, and 2012, Penske Corporation and its affiliates billed us $7.3 million, $6.3 million, and $5.3 million, respectively, and we billed Penske Corporation and its affiliates $56 thousand, $24 thousand, and $31 thousand, respectively, for such services. As of December 31, 2014 and 2013, we had $14 thousand and $0 thousand of receivables from and $0.7 million and $0.6 million of payables to Penske Corporation and its subsidiaries, respectively. | |||||||
PAG, Penske Corporation and certain affiliates have entered into a joint insurance agreement which provides that, with respect to any joint insurance (such as our joint commercial crime insurance policy), available coverage with respect to a loss shall be paid to each party per occurrence as stipulated in the policies. In the event of losses by us and Penske Corporation that exceed the limit of liability for any policy or policy period, the total policy proceeds will be allocated based on the ratio of premiums paid. | |||||||
We are a 9.0% limited partner of PTL, a leading provider of transportation and supply chain services. PTL is owned 41.1% by Penske Corporation, 9.0% by us and the remaining 49.9% is owned by direct and indirect subsidiaries of GECC. We are party to agreements among the other partners which, among other things, provide us with specified distribution and governance rights and restrict our ability to transfer our interests. In 2014, 2013, and 2012, we received $11.6 million, $9.9 million, and $18.5 million, respectively, from PTL in pro rata cash dividends. In 2014, we formed a venture with PTL, Penske Commercial Leasing Australia. The venture combines PTL's fleet operations expertise with our market knowledge of commercial vehicles to rent heavy-duty commercial vehicles in Australia. This venture is accounted for as an equity method investment as discussed in Note 2. | |||||||
In 2014, we acquired Transportation Resource Partners' ("TRP") ownership interest in PCV US for $58.8 million, and now own 91% of that business, as previously discussed. TRP is an organization that invests in transportation-related industries in which our CEO, Roger S. Penske, is a managing member of. | |||||||
From time to time we enter into joint venture relationships in the ordinary course of business, pursuant to which we own and operate automotive dealerships together with other investors. We may also provide these dealerships with working capital and other debt financing at costs that are based on our incremental borrowing rate. As of December 31, 2014, our automotive joint venture relationships were as follows: | |||||||
Location | Dealerships | Ownership | |||||
Interest | |||||||
Fairfield, Connecticut | Audi, Mercedes-Benz, Sprinter, Porsche, smart | 82.19 | %(A)(C) | ||||
Greenwich, Connecticut | Mercedes-Benz | 80.00 | %(B)(C) | ||||
Las Vegas, Nevada | Ferrari, Maserati | 50.00 | %(D) | ||||
Frankfurt, Germany | Lexus, Toyota, Volkswagen | 50.00 | %(D) | ||||
Aachen, Germany | Audi, Citroën, Kia, Maserati, SEAT, Skoda, Toyota, Volkswagen | 50.00 | %(D) | ||||
Northern Italy | BMW, MINI, Maserati | 70.00 | %(C) | ||||
Barcelona, Spain | BMW, MINI | 50.00 | %(D) | ||||
(A) | An entity controlled by one of our directors, Lucio A. Noto (the "Investor"), owns a 17.81% interest in this joint venture which entitles the Investor to 20% of the joint venture's operating profits. In addition, the Investor has an option to purchase up to a total 20% interest in the joint venture for specified amounts. | ||||||
(B) | An entity controlled by one of our directors, Lucio A. Noto (the "Investor"), owns a 20% interest in this joint venture. | ||||||
(C) | Entity is consolidated in our financial statements. | ||||||
(D) | Entity is accounted for using the equity method of accounting. | ||||||
Additionally, we are party to non-automotive joint ventures including our investments in Max Cycles (50%), Penske Commercial Leasing Australia (45%), Penske Vehicle Services (31%), and National Powersport Auctions (7%) that are accounted for under the equity method as more fully discussed in Note 2, and our controlling interests in PCV US (91%) and i.M. Branded (90%) that are consolidated in our financial statements. | |||||||
StockBased_Compensation
Stock-Based Compensation | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Stock-Based Compensation | |||||||||||
Stock-Based Compensation | |||||||||||
13. Stock-Based Compensation | |||||||||||
Key employees, outside directors, consultants and advisors of PAG are eligible to receive stock-based compensation pursuant to the terms of our 2012 Equity Incentive Plan. This plan allows for the issuance of shares for stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and other awards. The plan is a three year plan which originally allowed for 2,000,000 awards of which 1,121,582 shares of common stock were available for grant as of December 31, 2014. Compensation expense related to these plans was $12.8 million, $9.8 million, and $6.8 million during 2014, 2013, and 2012, respectively. | |||||||||||
Restricted Stock | |||||||||||
During 2014, 2013, and 2012, we granted 314,677, 448,026, and 431,339 shares, respectively, of restricted common stock and restricted stock units at no cost to participants under the plan. These awards provide the holder voting and dividend rights prior to vesting. The awards are subject to forfeiture and are non-transferable, which restrictions generally lapse over a four year period from the grant date at a rate of 15%, 15%, 20% and 50% per year. We have determined that the grant date quoted market price of the underlying common stock is the appropriate measure of compensation cost. This cost is amortized as expense over the restriction period. As of December 31, 2014, there was $20.0 million of unrecognized compensation cost related to the restricted stock, which is expected to be recognized over the restricted period. | |||||||||||
Presented below is a summary of the status of our restricted stock as of December 31, 2013 and 2014, and changes during the year ended December 31, 2014: | |||||||||||
Shares | Weighted Average | Aggregate | |||||||||
Grant-Date | Intrinsic | ||||||||||
Fair Value | Value | ||||||||||
December 31, 2013 | 1,168,200 | $ | 23.75 | ||||||||
Granted | 314,677 | 44.03 | |||||||||
Vested | (373,450 | ) | 20 | ||||||||
Forfeited | (7,042 | ) | 27.12 | ||||||||
| | | | | | | | | | | |
December 31, 2014 | 1,102,385 | $ | 30.78 | $ | 54.1 | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Equity
Equity | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Equity | |||||||||||
Equity | |||||||||||
14. Equity | |||||||||||
A summary of shares repurchased under our securities repurchase program, and shares acquired, is as follows: | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Shares repurchased(1) | 175,000 | 410,000 | 350,000 | ||||||||
Aggregate purchase price | $ | 8.0 | $ | 12.7 | $ | 8.5 | |||||
Average purchase price per share | $ | 45.95 | $ | 30.93 | $ | 24.35 | |||||
Shares acquired(2) | 160,350 | 97,818 | 55,631 | ||||||||
Aggregate purchase price | $ | 7.5 | $ | 3.1 | $ | 1.3 | |||||
Average purchase price per share | $ | 46.48 | $ | 32.13 | $ | 23.49 | |||||
-1 | Shares were repurchased under our securities repurchase program. As of December 31, 2014, we have $150.0 million in repurchase authorization under the repurchase program. | ||||||||||
-2 | Shares were acquired from employees in connection with a net share settlement feature of employee equity awards. | ||||||||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income / (Loss) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Accumulated Other Comprehensive Income / (Loss) | |||||||||||
Accumulated Other Comprehensive Income / (Loss) | |||||||||||
15. Accumulated Other Comprehensive Income / (Loss) | |||||||||||
Changes in accumulated other comprehensive income / (loss) by component and the reclassifications out of accumulated other comprehensive income / (loss) during the years ended December 31, 2014, 2013, and 2012 attributable to Penske Automotive Group common stockholders follows: | |||||||||||
Foreign | Other | Accumulated | |||||||||
Currency | Other | ||||||||||
Translation | Comprehensive | ||||||||||
Income (Loss) | |||||||||||
Balance at January 1, 2012 | $ | (17.9 | ) | $ | (6.3 | ) | $ | (24.2 | ) | ||
Other comprehensive income before reclassifications | 18.3 | (5.1 | ) | 13.2 | |||||||
Amounts reclassified from accumulated other comprehensive income—net of tax provision of $2.8 | — | 4.2 | 4.2 | ||||||||
| | | | | | | | | | | |
Net current-period other comprehensive income | 18.3 | (0.9 | ) | 17.4 | |||||||
| | | | | | | | | | | |
Balance at December 31, 2012 | 0.4 | (7.2 | ) | (6.8 | ) | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Other comprehensive income before reclassifications | 11.9 | 3 | 14.9 | ||||||||
Amounts reclassified from accumulated other comprehensive income—net of tax provision (benefit) of ($0.5) and $2.9, respectively | (0.9 | ) | 4.4 | 3.5 | |||||||
| | | | | | | | | | | |
Net current-period other comprehensive income | 11 | 7.4 | 18.4 | ||||||||
| | | | | | | | | | | |
Balance at December 31, 2013 | 11.4 | 0.2 | 11.6 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Other comprehensive income before reclassifications | (63.1 | ) | (6.7 | ) | (69.8 | ) | |||||
Amounts reclassified from accumulated other comprehensive income—net of tax provision of $3.2 | — | 4.9 | 4.9 | ||||||||
| | | | | | | | | | | |
Net current-period other comprehensive income | (63.1 | ) | (1.8 | ) | (64.9 | ) | |||||
| | | | | | | | | | | |
Balance at December 31, 2014 | $ | (51.7 | ) | $ | (1.6 | ) | $ | (53.3 | ) | ||
| | | | | | | | | | | |
| | | | | | | | | | | |
Within the amounts reclassified from accumulated other comprehensive income, the amounts associated with Other relate to interest rate swaps and are included in floor plan interest expense, and the amounts associated with foreign currency translation are included in selling, general and administrative expenses. | |||||||||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Taxes | |||||||||||
Income Taxes | |||||||||||
16. Income Taxes | |||||||||||
Income taxes relating to income from continuing operations consisted of the following: | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Current: | |||||||||||
Federal | $ | 52.6 | $ | 7.3 | $ | (16.4 | ) | ||||
State and local | 7.9 | 5.1 | 1.2 | ||||||||
Foreign | 42.2 | 33.9 | 26.5 | ||||||||
| | | | | | | | | | | |
Total current | 102.7 | 46.3 | 11.3 | ||||||||
| | | | | | | | | | | |
Deferred: | |||||||||||
Federal | 42.9 | 71.3 | 70.1 | ||||||||
State and local | 9.3 | 9.5 | 11.8 | ||||||||
Foreign | (1.7 | ) | (3.2 | ) | 1.4 | ||||||
| | | | | | | | | | | |
Total deferred | 50.5 | 77.6 | 83.3 | ||||||||
| | | | | | | | | | | |
Income taxes relating to continuing operations | $ | 153.2 | $ | 123.9 | $ | 94.6 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Income taxes relating to income from continuing operations varied from the U.S. federal statutory income tax rate due to the following: | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Income taxes relating to continuing operations at federal statutory rate of 35% | $ | 161.7 | $ | 131 | $ | 101.8 | |||||
State and local income taxes, net of federal taxes | 11 | 8.7 | 7.1 | ||||||||
Non-U.S. income taxed at other rates | (19.0 | ) | (16.1 | ) | (12.6 | ) | |||||
Other | (0.5 | ) | 0.3 | (1.7 | ) | ||||||
| | | | | | | | | | | |
Income taxes relating to continuing operations | $ | 153.2 | $ | 123.9 | $ | 94.6 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
The components of deferred tax assets and liabilities as of December 31, 2014 and 2013 were as follows: | |||||||||||
2014 | 2013 | ||||||||||
Deferred Tax Assets | |||||||||||
Accrued liabilities | $ | 72.1 | $ | 61.8 | |||||||
Net operating loss carryforwards | 16 | 13.7 | |||||||||
Interest rate swap | — | 3.1 | |||||||||
Other | 8.4 | 12.4 | |||||||||
| | | | | | | | ||||
Total deferred tax assets | 96.5 | 91 | |||||||||
Valuation allowance | (18.2 | ) | (14.6 | ) | |||||||
| | | | | | | | ||||
Net deferred tax assets | 78.3 | 76.4 | |||||||||
| | | | | | | | ||||
Deferred Tax Liabilities | |||||||||||
Depreciation and amortization | (187.6 | ) | (175.9 | ) | |||||||
Partnership investments | (253.0 | ) | (219.0 | ) | |||||||
Convertible notes | (10.0 | ) | (12.5 | ) | |||||||
Other | (3.5 | ) | (1.3 | ) | |||||||
| | | | | | | | ||||
Total deferred tax liabilities | (454.1 | ) | (408.7 | ) | |||||||
| | | | | | | | ||||
Net deferred tax liabilities | $ | (375.8 | ) | $ | (332.3 | ) | |||||
| | | | | | | | ||||
| | | | | | | | ||||
We do not provide for U.S. taxes relating to undistributed earnings or losses of our non-U.S. subsidiaries. Income from continuing operations before income taxes of non-U.S. subsidiaries (which subsidiaries are predominately in the U.K.) was $170.6 million, $134.7 million, and $117.0 million during 2014, 2013, and 2012, respectively. It is our belief that such earnings will be indefinitely reinvested in the companies that produced them. As of December 31, 2014, we have not provided U.S. federal income taxes on a total temporary difference of $711.0 million related to the excess of financial reporting basis over tax basis in the non-U.S. subsidiaries. | |||||||||||
As of December 31, 2014, we have $96.9 million of state net operating loss carryforwards in the U.S. that expire at various dates beginning in 2015 through 2034, U.S. federal and state credit carryforwards of $3.4 million that will not expire, U.K. net operating loss carryforwards of $0.2 million that will not expire, U.K. capital loss carryforwards of $5.2 million that will not expire, German net operating loss carryforwards of $18.2 million that will not expire, Australia net operating loss carryforwards of $9.5 million that will not expire and Italian net operating loss carryforwards of $0.1 million that will not expire. We utilized $53.1 million of state net operating loss carryforwards in the U.S. in 2014. | |||||||||||
A valuation allowance of $2.6 million has been recorded against the state net operating loss carryforwards in the U.S. and a valuation allowance of $0.1 million has been recorded against the state credit carryforwards in the U.S. as of December 31, 2014. A valuation allowance of $7.3 million has been recorded against German net operating losses and other deferred tax assets and a valuation allowance of $8.2 million has been recorded against U.K. deferred tax assets related to buildings as of December 31, 2014. | |||||||||||
Generally accepted accounting principles relating to uncertain income tax positions prescribe a minimum recognition threshold a tax position is required to meet before being recognized, and provides guidance on the derecognition, measurement, classification, and disclosure relating to income taxes. The movement in uncertain tax positions for the years ended December 31, 2014, 2013, and 2012 were as follows: | |||||||||||
2014 | 2013 | 2012 | |||||||||
Uncertain tax positions—January 1 | $ | 14 | $ | 14.7 | $ | 14.9 | |||||
Gross increase—tax position in prior periods | 0.2 | 0.3 | 1.3 | ||||||||
Gross decrease—tax position in prior periods | (0.6 | ) | (0.8 | ) | (0.8 | ) | |||||
Gross increase—current period tax position | 0.1 | 0.1 | — | ||||||||
Settlements | — | (0.4 | ) | (0.9 | ) | ||||||
Lapse in statute of limitations | — | (0.1 | ) | (0.3 | ) | ||||||
Foreign exchange | (0.6 | ) | 0.2 | 0.5 | |||||||
| | | | | | | | | | | |
Uncertain tax positions—December 31 | $ | 13.1 | $ | 14 | $ | 14.7 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
We have elected to include interest and penalties in our income tax expense. The total interest and penalties included within uncertain tax positions at December 31, 2014 was $2.7 million. We do not expect a significant change to the amount of uncertain tax positions within the next twelve months. Our U.S. federal returns remain open to examination for 2012 and 2013 and various non-U.S. and U.S. state jurisdictions are open for periods ranging from 2002 through 2013. The portion of the total amount of uncertain tax positions as of December 31, 2014 that would, if recognized, impact the effective tax rate was $12.9 million. | |||||||||||
We have classified our tax reserves as a long-term obligation on the basis that management does not expect to make payments relating to those reserves within the next twelve months. | |||||||||||
Segment_Information
Segment Information | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Segment Information | ||||||||||||||
Segment Information | ||||||||||||||
17. Segment Information | ||||||||||||||
Our operations are organized by management into operating segments by line of business and geography. We have determined that we have two reportable segments as defined in generally accepted accounting principles for segment reporting: (i) Retail Automotive, consisting of our retail automotive dealership operations, and (ii) Other, consisting of our retail commercial vehicle dealership operations, our commercial vehicle distribution operations and our investments in non-automotive retail operations. The Retail Automotive reportable segment includes all automotive dealerships and all departments relevant to the operation of the dealerships and the retail automotive joint ventures. The individual dealership operations included in the Retail Automotive reportable segment have been grouped into four geographic operating segments: Eastern, Central, and Western United States and International. The geographic operating segments have been aggregated into one reportable segment as their operations (A) have similar economic characteristics (all are automotive dealerships having similar margins), (B) offer similar products and services (all sell new and used vehicles, service, parts and third-party finance and insurance products), (C) have similar target markets and customers (generally individuals) and (D) have similar distribution and marketing practices (all distribute products and services through dealership facilities that market to customers in similar fashions). The accounting policies of the segments are the same and are described in Note 1. | ||||||||||||||
The following table summarizes revenues, floor plan interest expense, other interest expense, debt discount amortization, depreciation, equity in earnings of affiliates, and income (loss) from continuing operations before certain non-recurring items and income taxes, which is the measure by which management allocates resources to its segments and which we refer to as adjusted segment income (loss), for each of our reportable segments. Adjusted segment income excludes the items in the table below in order to enhance the comparability of segment income from period to period. | ||||||||||||||
Retail | Other | Intersegment | Total | |||||||||||
Automotive | Elimination | |||||||||||||
Revenues | ||||||||||||||
2014 | $ | 16,602.70 | $ | 579.6 | $ | (5.1 | ) | $ | 17,177.20 | |||||
2013 | 14,291.30 | 152.6 | — | 14,443.90 | ||||||||||
2012 | 12,902.60 | — | — | 12,902.60 | ||||||||||
Floor plan interest expense | ||||||||||||||
2014 | $ | 44.7 | $ | 1.4 | $ | — | $ | 46.1 | ||||||
2013 | 42.5 | 0.6 | — | 43.1 | ||||||||||
2012 | 38 | — | — | 38 | ||||||||||
Other interest expense | ||||||||||||||
2014 | $ | 46.9 | $ | 5.9 | $ | — | $ | 52.8 | ||||||
2013 | 44.1 | 1.1 | — | 45.2 | ||||||||||
2012 | 46.1 | — | — | 46.1 | ||||||||||
Depreciation | ||||||||||||||
2014 | $ | 66.9 | $ | 3.1 | $ | — | $ | 70 | ||||||
2013 | 59.1 | 0.5 | — | 59.6 | ||||||||||
2012 | 52.2 | — | — | 52.2 | ||||||||||
Equity in earnings of affiliates | ||||||||||||||
2014 | $ | 3.8 | $ | 37 | $ | — | $ | 40.8 | ||||||
2013 | 4.9 | 25.8 | — | 30.7 | ||||||||||
2012 | 3.3 | 24.3 | — | 27.6 | ||||||||||
Adjusted segment income | ||||||||||||||
2014 | $ | 394.2 | $ | 51.8 | $ | — | $ | 446 | ||||||
2013 | 340.7 | 33.5 | — | 374.2 | ||||||||||
2012 | 284.3 | 24.3 | — | 308.6 | ||||||||||
The following table reconciles total adjusted segment income to consolidated income from continuing operations before income taxes: | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Adjusted segment income | $ | 446 | $ | 374.2 | $ | 308.6 | ||||||||
Debt redemption costs | — | — | (17.8 | ) | ||||||||||
Gain on investment | 16 | — | — | |||||||||||
| | | | | | | | | | | ||||
Income from continuing operations before income taxes | $ | 462 | $ | 374.2 | $ | 290.8 | ||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Total assets, equity method investments, and capital expenditures by reporting segment are as set forth in the table below: | ||||||||||||||
Retail | Other | Intersegment | Total | |||||||||||
Automotive | Elimination | |||||||||||||
Total assets(1) | ||||||||||||||
2014 | $ | 5,920.40 | $ | 1,308.20 | $ | (0.4 | ) | $ | 7,228.20 | |||||
2013 | 5,747.60 | 668.2 | (0.3 | ) | 6,415.50 | |||||||||
Equity method investments | ||||||||||||||
2014 | $ | 62.8 | $ | 290 | $ | — | $ | 352.8 | ||||||
2013 | 81.6 | 265.3 | — | 346.9 | ||||||||||
Capital expenditures | ||||||||||||||
2014 | $ | 169.5 | $ | 5.3 | $ | — | $ | 174.8 | ||||||
2013 | 174.7 | — | — | 174.7 | ||||||||||
2012 | 150.9 | — | — | 150.9 | ||||||||||
-1 | As discussed in Note 4, we treated the operations of our car rental business as discontinued operations. The associated assets have been reclassified to "Assets held for sale" as of December 31, 2014 and 2013 on the Consolidated Balance Sheets and therefore are still included within the Other segment in total assets above. | |||||||||||||
The following table presents certain data by geographic area: | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Sales to external customers: | ||||||||||||||
U.S. | $ | 10,435.9 | $ | 9,238.9 | $ | 8,285.8 | ||||||||
Non-U.S. | 6,741.3 | 5,205.0 | 4,616.8 | |||||||||||
| | | | | | | | | | | ||||
Total sales to external customers | $ | 17,177.2 | $ | 14,443.9 | $ | 12,902.6 | ||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Long-lived assets, net: | ||||||||||||||
U.S. | $ | 1,177.0 | $ | 1,050.2 | ||||||||||
Non-U.S. | 531.0 | 447.1 | ||||||||||||
| | | | | | | | | | | ||||
Total long-lived assets | $ | 1,708.0 | $ | 1,497.3 | ||||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
The Company's non-U.S. operations are predominantly based in the U.K. | ||||||||||||||
Summary_of_Quarterly_Financial
Summary of Quarterly Financial Data (Unaudited) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Summary of Quarterly Financial Data (Unaudited) | ||||||||||||||
Summary of Quarterly Financial Data (Unaudited) | ||||||||||||||
18. Summary of Quarterly Financial Data (Unaudited) | ||||||||||||||
First | Second | Third | Fourth | |||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
2014(1)(2) | ||||||||||||||
Total revenues | $ | 4,015.2 | $ | 4,370.5 | $ | 4,381.4 | $ | 4,410.1 | ||||||
Gross profit | 614.0 | 654.8 | 646.2 | 658.7 | ||||||||||
Net income | 67.9 | 73.9 | 75.1 | 73.2 | ||||||||||
Net income attributable to Penske Automotive Group common stockholders | 67.5 | 72.9 | 74.5 | 71.8 | ||||||||||
Diluted earnings per share attributable to Penske Automotive Group common stockholders | $ | 0.75 | $ | 0.81 | $ | 0.83 | $ | 0.80 | ||||||
2013(1)(2) | ||||||||||||||
Total revenues | $ | 3,326.8 | $ | 3,599.2 | $ | 3,724.6 | $ | 3,793.3 | ||||||
Gross profit | 519.8 | 547.8 | 558.4 | 571.0 | ||||||||||
Net income | 58.0 | 62.5 | 65.5 | 59.7 | ||||||||||
Net income attributable to Penske Automotive Group common stockholders | 57.7 | 62.0 | 65.3 | 59.2 | ||||||||||
Diluted earnings per share attributable to Penske Automotive Group common stockholders | $ | 0.64 | $ | 0.69 | $ | 0.72 | $ | 0.66 | ||||||
-1 | As discussed in Note 4, we have treated the operations of certain entities as discontinued operations. The results for all periods have been restated to reflect such treatment. | |||||||||||||
-2 | Per share amounts are calculated independently for each of the quarters presented. The sum of the quarters may not equal the full year per share amounts due to rounding. | |||||||||||||
Condensed_Consolidating_Financ
Condensed Consolidating Financial Information | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Condensed Consolidating Financial Information | |||||||||||||||||
Condensed Consolidating Financial Information | |||||||||||||||||
19. Condensed Consolidating Financial Information | |||||||||||||||||
The following tables include condensed consolidating financial information as of December 31, 2014 and 2013 and for the years ended December 31, 2014, 2013, and 2012 for Penske Automotive Group, Inc. (as the issuer of the 5.75% and 5.375% Notes), guarantor subsidiaries and non-guarantor subsidiaries (primarily representing non-U.S. entities). Guarantor subsidiaries are directly or indirectly 100% owned by PAG, and the guarantees are full and unconditional, and joint and several. The guarantees may be released under certain circumstances upon resale, or transfer by us of the stock of the related guarantor or all or substantially all of the assets of the guarantor to a non-affiliate. | |||||||||||||||||
CONDENSED CONSOLIDATING BALANCE SHEET | |||||||||||||||||
December 31, 2014 | |||||||||||||||||
Total | Eliminations | Penske | Guarantor | Non-Guarantor | |||||||||||||
Company | Automotive | Subsidiaries | Subsidiaries | ||||||||||||||
Group | |||||||||||||||||
Cash and cash equivalents | $ | 36.3 | $ | — | $ | — | $ | — | $ | 36.3 | |||||||
Accounts receivable, net | 701.4 | (409.6 | ) | 409.6 | 392.6 | 308.8 | |||||||||||
Inventories | 2,819.20 | — | — | 1,481.50 | 1,337.70 | ||||||||||||
Other current assets | 124.7 | — | 4.5 | 58.3 | 61.9 | ||||||||||||
Assets held for sale | 186.1 | — | — | 150.4 | 35.7 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total current assets | 3,867.70 | (409.6 | ) | 414.1 | 2,082.80 | 1,780.40 | |||||||||||
Property and equipment, net | 1,328.80 | — | 4.3 | 754.6 | 569.9 | ||||||||||||
Intangible assets | 1,652.50 | — | — | 818.4 | 834.1 | ||||||||||||
Equity method investments | 352.8 | — | 285.5 | — | 67.3 | ||||||||||||
Other long-term assets | 26.4 | (1,990.8 | ) | 2,005.00 | 4.4 | 7.8 | |||||||||||
| | | | | | | | | | | | | | | | | |
Total assets | $ | 7,228.20 | $ | (2,400.4 | ) | $ | 2,708.90 | $ | 3,660.20 | $ | 3,259.50 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Floor plan notes payable | $ | 1,812.60 | $ | — | $ | — | $ | 1,102.00 | $ | 710.6 | |||||||
Floor plan notes payable—non-trade | 920.5 | — | 86.8 | 398.1 | 435.6 | ||||||||||||
Accounts payable | 417.6 | — | 2.9 | 208.3 | 206.4 | ||||||||||||
Accrued expenses | 310.3 | (409.6 | ) | — | 123.3 | 596.6 | |||||||||||
Current portion of long-term debt | 36.6 | — | — | 4.6 | 32 | ||||||||||||
Liabilities held for sale | 132.7 | — | — | 105.9 | 26.8 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total current liabilities | 3,630.30 | (409.6 | ) | 89.7 | 1,942.20 | 2,008.00 | |||||||||||
Long-term debt | 1,316.00 | (247.0 | ) | 938 | 116.1 | 508.9 | |||||||||||
Deferred tax liabilities | 409.9 | — | — | 385.6 | 24.3 | ||||||||||||
Other long-term liabilities | 190.8 | — | — | 66.9 | 123.9 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total liabilities | 5,547.00 | (656.6 | ) | 1,027.70 | 2,510.80 | 2,665.10 | |||||||||||
Total equity | 1,681.20 | (1,743.8 | ) | 1,681.20 | 1,149.40 | 594.4 | |||||||||||
| | | | | | | | | | | | | | | | | |
Total liabilities and equity | $ | 7,228.20 | $ | (2,400.4 | ) | $ | 2,708.90 | $ | 3,660.20 | $ | 3,259.50 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
CONDENSED CONSOLIDATING BALANCE SHEET | |||||||||||||||||
December 31, 2013 | |||||||||||||||||
Total | Eliminations | Penske | Guarantor | Non-Guarantor | |||||||||||||
Company | Automotive | Subsidiaries | Subsidiaries | ||||||||||||||
Group | |||||||||||||||||
Cash and cash equivalents | $ | 50.3 | $ | — | $ | — | $ | 13.1 | $ | 37.2 | |||||||
Accounts receivable, net | 594.9 | (392.5 | ) | 392.5 | 376.5 | 218.4 | |||||||||||
Inventories | 2,501.40 | — | — | 1,402.30 | 1,099.10 | ||||||||||||
Other current assets | 87.7 | — | 2.9 | 42.9 | 41.9 | ||||||||||||
Assets held for sale | 253.8 | — | — | 202.1 | 51.7 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total current assets | 3,488.10 | (392.5 | ) | 395.4 | 2,036.90 | 1,448.30 | |||||||||||
Property and equipment, net | 1,119.50 | — | 4 | 688 | 427.5 | ||||||||||||
Intangible assets | 1,430.10 | — | — | 763 | 667.1 | ||||||||||||
Equity method investments | 346.9 | — | 295 | — | 51.9 | ||||||||||||
Other long-term assets | 30.9 | (1,686.0 | ) | 1,697.40 | 4.2 | 15.3 | |||||||||||
| | | | | | | | | | | | | | | | | |
Total assets | $ | 6,415.50 | $ | (2,078.5 | ) | $ | 2,391.80 | $ | 3,492.10 | $ | 2,610.10 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Floor plan notes payable | $ | 1,671.90 | $ | — | $ | — | $ | 997.9 | $ | 674 | |||||||
Floor plan notes payable—non-trade | 900.9 | — | 128.2 | 445 | 327.7 | ||||||||||||
Accounts payable | 369 | — | 3.4 | 138.1 | 227.5 | ||||||||||||
Accrued expenses | 260.9 | (392.5 | ) | 0.1 | 120.9 | 532.4 | |||||||||||
Current portion of long-term debt | 14.5 | — | — | 4 | 10.5 | ||||||||||||
Liabilities held for sale | 166.5 | — | — | 135.1 | 31.4 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total current liabilities | 3,383.70 | (392.5 | ) | 131.7 | 1,841.00 | 1,803.50 | |||||||||||
Long-term debt | 981.8 | (123.5 | ) | 738 | 106.9 | 260.4 | |||||||||||
Deferred tax liabilities | 361.4 | — | — | 337.7 | 23.7 | ||||||||||||
Other long-term liabilities | 166.5 | — | — | 68.7 | 97.8 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total liabilities | 4,893.40 | (516.0 | ) | 869.7 | 2,354.30 | 2,185.40 | |||||||||||
Total equity | 1,522.10 | (1,562.5 | ) | 1,522.10 | 1,137.80 | 424.7 | |||||||||||
| | | | | | | | | | | | | | | | | |
Total liabilities and equity | $ | 6,415.50 | $ | (2,078.5 | ) | $ | 2,391.80 | $ | 3,492.10 | $ | 2,610.10 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
CONDENSED CONSOLIDATING STATEMENT OF INCOME | |||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||
Total | Eliminations | Penske | Guarantor | Non-Guarantor | |||||||||||||
Company | Automotive | Subsidiaries | Subsidiaries | ||||||||||||||
Group | |||||||||||||||||
Revenues | $ | 17,177.20 | $ | — | $ | — | $ | 9,589.00 | $ | 7,588.20 | |||||||
Cost of sales | 14,603.50 | — | — | 8,092.50 | 6,511.00 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Gross profit | 2,573.70 | — | — | 1,496.50 | 1,077.20 | ||||||||||||
Selling, general and administrative expenses | 1,999.60 | — | 28.7 | 1,133.90 | 837 | ||||||||||||
Depreciation | 70 | — | 1.3 | 37.8 | 30.9 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Operating income | 504.1 | — | (30.0 | ) | 324.8 | 209.3 | |||||||||||
Floor plan interest expense | (46.1 | ) | — | (10.4 | ) | (20.7 | ) | (15.0 | ) | ||||||||
Other interest expense | (52.8 | ) | — | (29.8 | ) | (5.0 | ) | (18.0 | ) | ||||||||
Equity in earnings of affiliates | 40.8 | — | 36.5 | — | 4.3 | ||||||||||||
Gain on investment | 16 | — | 16 | — | — | ||||||||||||
Equity in earnings of subsidiaries | — | (473.2 | ) | 473.2 | — | — | |||||||||||
| | | | | | | | | | | | | | | | | |
Income from continuing operations before income taxes | 462 | (473.2 | ) | 455.5 | 299.1 | 180.6 | |||||||||||
Income taxes | (153.2 | ) | 157.9 | (152.0 | ) | (110.3 | ) | (48.8 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Income from continuing operations | 308.8 | (315.3 | ) | 303.5 | 188.8 | 131.8 | |||||||||||
Loss from discontinued operations, net of tax | (18.7 | ) | 16.8 | (16.8 | ) | (2.4 | ) | (16.3 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Net income | 290.1 | (298.5 | ) | 286.7 | 186.4 | 115.5 | |||||||||||
Other comprehensive income (loss), net of tax | (66.2 | ) | 62.5 | (66.2 | ) | 4.7 | (67.2 | ) | |||||||||
| | | | | | | | | | | | | | | | | |
Comprehensive income | 223.9 | (236.0 | ) | 220.5 | 191.1 | 48.3 | |||||||||||
| | | | | | | | | | | | | | | | | |
Less: Comprehensive income attributable to non-controlling interests | 2.1 | 1.4 | (1.4 | ) | — | 2.1 | |||||||||||
| | | | | | | | | | | | | | | | | |
Comprehensive income attributable to Penske Automotive Group common stockholders | $ | 221.8 | $ | (237.4 | ) | $ | 221.9 | $ | 191.1 | $ | 46.2 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
CONDENSED CONSOLIDATING STATEMENT OF INCOME | |||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||
Total | Eliminations | Penske | Guarantor | Non-Guarantor | |||||||||||||
Company | Automotive | Subsidiaries | Subsidiaries | ||||||||||||||
Group | |||||||||||||||||
Revenues | $ | 14,443.90 | $ | — | $ | — | $ | 8,534.20 | $ | 5,909.70 | |||||||
Cost of sales | 12,246.90 | — | — | 7,178.50 | 5,068.40 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Gross profit | 2,197.00 | — | — | 1,355.70 | 841.3 | ||||||||||||
Selling, general and administrative expenses | 1,705.60 | — | 21.4 | 1,025.90 | 658.3 | ||||||||||||
Depreciation | 59.6 | — | 1.8 | 33.8 | 24 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Operating income | 431.8 | — | (23.2 | ) | 296 | 159 | |||||||||||
Floor plan interest expense | (43.1 | ) | — | (9.6 | ) | (19.5 | ) | (14.0 | ) | ||||||||
Other interest expense | (45.2 | ) | — | (26.1 | ) | (1.9 | ) | (17.2 | ) | ||||||||
Equity in earnings of affiliates | 30.7 | — | 25.5 | — | 5.2 | ||||||||||||
Equity in earnings of subsidiaries | — | (406.1 | ) | 406.1 | — | — | |||||||||||
| | | | | | | | | | | | | | | | | |
Income from continuing operations before income taxes | 374.2 | (406.1 | ) | 372.7 | 274.6 | 133 | |||||||||||
Income taxes | (123.9 | ) | 135 | (123.9 | ) | (100.4 | ) | (34.6 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Income from continuing operations | 250.3 | (271.1 | ) | 248.8 | 174.2 | 98.4 | |||||||||||
Loss from discontinued operations, net of tax | (4.6 | ) | 4.6 | (4.6 | ) | 0.9 | (5.5 | ) | |||||||||
| | | | | | | | | | | | | | | | | |
Net income | 245.7 | (266.5 | ) | 244.2 | 175.1 | 92.9 | |||||||||||
Other comprehensive income (loss), net of tax | 18.9 | (9.8 | ) | 18.9 | 4 | 5.8 | |||||||||||
| | | | | | | | | | | | | | | | | |
Comprehensive income | 264.6 | (276.3 | ) | 263.1 | 179.1 | 98.7 | |||||||||||
| | | | | | | | | | | | | | | | | |
Less: Comprehensive income attributable to non-controlling interests | 2 | (0.5 | ) | 0.5 | — | 2 | |||||||||||
| | | | | | | | | | | | | | | | | |
Comprehensive income attributable to Penske Automotive Group common stockholders | $ | 262.6 | $ | (275.8 | ) | $ | 262.6 | $ | 179.1 | $ | 96.7 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
CONDENSED CONSOLIDATING STATEMENT OF INCOME | |||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||
Total | Eliminations | Penske | Guarantor | Non-Guarantor | |||||||||||||
Company | Automotive | Subsidiaries | Subsidiaries | ||||||||||||||
Group | |||||||||||||||||
Revenues | $ | 12,902.60 | $ | — | $ | — | $ | 7,630.70 | $ | 5,271.90 | |||||||
Cost of sales | 10,927.00 | — | — | 6,424.20 | 4,502.80 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Gross profit | 1,975.60 | — | — | 1,206.50 | 769.1 | ||||||||||||
Selling, general and administrative expenses | 1,558.30 | — | 19.4 | 930.8 | 608.1 | ||||||||||||
Depreciation | 52.2 | — | 1.3 | 28 | 22.9 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Operating income | 365.1 | — | (20.7 | ) | 247.7 | 138.1 | |||||||||||
Floor plan interest expense | (38.0 | ) | — | (8.6 | ) | (16.4 | ) | (13.0 | ) | ||||||||
Other interest expense | (46.1 | ) | — | (29.5 | ) | — | (16.6 | ) | |||||||||
Equity in earnings of affiliates | 27.6 | — | 24 | — | 3.6 | ||||||||||||
Debt redemption costs | (17.8 | ) | — | (17.8 | ) | — | — | ||||||||||
Equity in earnings of subsidiaries | — | (341.8 | ) | 341.8 | — | — | |||||||||||
| | | | | | | | | | | | | | | | | |
Income from continuing operations before income taxes | 290.8 | (341.8 | ) | 289.2 | 231.3 | 112.1 | |||||||||||
Income taxes | (94.6 | ) | 111.9 | (94.6 | ) | (87.7 | ) | (24.2 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Income from continuing operations | 196.2 | (229.9 | ) | 194.6 | 143.6 | 87.9 | |||||||||||
Loss from discontinued operations, net of tax | (9.0 | ) | 9 | (9.0 | ) | (0.5 | ) | (8.5 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Net income | 187.2 | (220.9 | ) | 185.6 | 143.1 | 79.4 | |||||||||||
Other comprehensive income (loss), net of tax | 17.6 | (16.6 | ) | 17.6 | 1 | 15.6 | |||||||||||
| | | | | | | | | | | | | | | | | |
Comprehensive income | 204.8 | (237.5 | ) | 203.2 | 144.1 | 95 | |||||||||||
| | | | | | | | | | | | | | | | | |
Less: Comprehensive income attributable to non-controlling interests | 1.9 | (0.3 | ) | 0.3 | — | 1.9 | |||||||||||
| | | | | | | | | | | | | | | | | |
Comprehensive income attributable to Penske Automotive Group common stockholders | $ | 202.9 | $ | (237.2 | ) | $ | 202.9 | $ | 144.1 | $ | 93.1 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS | |||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||
Total | Penske | Guarantor | Non-Guarantor | ||||||||||||||
Company | Automotive | Subsidiaries | Subsidiaries | ||||||||||||||
Group | |||||||||||||||||
Net cash provided by continuing operating activities | $ | 366.3 | $ | (70.7 | ) | $ | 209.2 | $ | 227.8 | ||||||||
| | | | | | | | | | | | | | ||||
Investing activities: | |||||||||||||||||
Purchase of equipment and improvements | (174.8 | ) | (1.7 | ) | (101.2 | ) | (71.9 | ) | |||||||||
Acquisitions, net | (355.0 | ) | — | (175.3 | ) | (179.7 | ) | ||||||||||
Other | (22.6 | ) | 4.2 | — | (26.8 | ) | |||||||||||
| | | | | | | | | | | | | | ||||
Net cash used in continuing investing activities | (552.4 | ) | 2.5 | (276.5 | ) | (278.4 | ) | ||||||||||
| | | | | | | | | | | | | | ||||
Financing activities: | |||||||||||||||||
Issuance of 5.375% senior subordinated notes | 300 | 300 | — | — | |||||||||||||
Net (repayments) borrowings of long-term debt | (71.3 | ) | (100.0 | ) | 9 | 19.7 | |||||||||||
Net borrowings (repayments) of floor plan notes payable—non-trade | 19.6 | (41.4 | ) | 35.9 | 25.1 | ||||||||||||
Payment of deferred financing fees | (4.4 | ) | (4.4 | ) | — | — | |||||||||||
Repurchases of common stock | (15.5 | ) | (15.5 | ) | — | — | |||||||||||
Dividends | (70.5 | ) | (70.5 | ) | — | — | |||||||||||
Other | 0.3 | — | — | 0.3 | |||||||||||||
Distributions from (to) parent | — | — | 5.5 | (5.5 | ) | ||||||||||||
| | | | | | | | | | | | | | ||||
Net cash provided by continuing financing activities | 158.2 | 68.2 | 50.4 | 39.6 | |||||||||||||
Net cash provided by discontinued operations | 15.2 | — | 3.8 | 11.4 | |||||||||||||
Effect of exchange rate changes on cash and cash equivalents | (1.3 | ) | — | — | (1.3 | ) | |||||||||||
| | | | | | | | | | | | | | ||||
Net change in cash and cash equivalents | (14.0 | ) | — | (13.1 | ) | (0.9 | ) | ||||||||||
Cash and cash equivalents, beginning of period | 50.3 | — | 13.1 | 37.2 | |||||||||||||
| | | | | | | | | | | | | | ||||
Cash and cash equivalents, end of period | $ | 36.3 | $ | — | $ | — | $ | 36.3 | |||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS | |||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||
Total | Penske | Guarantor | Non-Guarantor | ||||||||||||||
Company | Automotive | Subsidiaries | Subsidiaries | ||||||||||||||
Group | |||||||||||||||||
Net cash provided by continuing operating activities | $ | 301 | $ | 46.5 | $ | 17.9 | $ | 236.6 | |||||||||
| | | | | | | | | | | | | | ||||
Investing activities: | |||||||||||||||||
Purchase of equipment and improvements | (174.7 | ) | (1.3 | ) | (116.7 | ) | (56.7 | ) | |||||||||
Acquisitions, net | (314.0 | ) | — | (103.4 | ) | (210.6 | ) | ||||||||||
Other | (2.6 | ) | (17.5 | ) | 10.7 | 4.2 | |||||||||||
| | | | | | | | | | | | | | ||||
Net cash used in continuing investing activities | (491.3 | ) | (18.8 | ) | (209.4 | ) | (263.1 | ) | |||||||||
| | | | | | | | | | | | | | ||||
Financing activities: | |||||||||||||||||
Net borrowings of long-term debt | 81.1 | 28 | 2.7 | 50.4 | |||||||||||||
Net borrowings (repayments) of floor plan notes payable—non-trade | 191.2 | 16.1 | 181.1 | (6.0 | ) | ||||||||||||
Repurchases of common stock | (15.8 | ) | (15.8 | ) | — | — | |||||||||||
Dividends | (56.0 | ) | (56.0 | ) | — | — | |||||||||||
Other | 0.2 | — | — | 0.2 | |||||||||||||
Distributions from (to) parent | — | — | 0.9 | (0.9 | ) | ||||||||||||
| | | | | | | | | | | | | | ||||
Net cash provided by (used in) continuing financing activities | 200.7 | (27.7 | ) | 184.7 | 43.7 | ||||||||||||
Net cash (used in) provided by discontinued operations | (4.0 | ) | — | (14.9 | ) | 10.9 | |||||||||||
| | | | | | | | | | | | | | ||||
Net change in cash and cash equivalents | 6.4 | — | (21.7 | ) | 28.1 | ||||||||||||
Cash and cash equivalents, beginning of period | 43.9 | — | 34.8 | 9.1 | |||||||||||||
| | | | | | | | | | | | | | ||||
Cash and cash equivalents, end of period | $ | 50.3 | $ | — | $ | 13.1 | $ | 37.2 | |||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS | |||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||
Total | Penske | Guarantor | Non-Guarantor | ||||||||||||||
Company | Automotive | Subsidiaries | Subsidiaries | ||||||||||||||
Group | |||||||||||||||||
Net cash provided by continuing operating activities | $ | 325.7 | $ | 45.5 | $ | 125.8 | $ | 154.4 | |||||||||
| | | | | | | | | | | | | | ||||
Investing activities: | |||||||||||||||||
Purchase of equipment and improvements | (150.9 | ) | (1.1 | ) | (100.4 | ) | (49.4 | ) | |||||||||
Proceeds from sale-leaseback transactions | 1.6 | — | — | 1.6 | |||||||||||||
Acquisitions, net | (233.3 | ) | — | (98.9 | ) | (134.4 | ) | ||||||||||
Other | 8.8 | (3.3 | ) | 4.8 | 7.3 | ||||||||||||
| | | | | | | | | | | | | | ||||
Net cash used in continuing investing activities | (373.8 | ) | (4.4 | ) | (194.5 | ) | (174.9 | ) | |||||||||
| | | | | | | | | | | | | | ||||
Financing activities: | |||||||||||||||||
Issuance of 5.75% senior subordinated notes | 550 | 550 | — | — | |||||||||||||
Repurchase of 7.75% senior subordinated notes | (390.8 | ) | (390.8 | ) | — | — | |||||||||||
Repurchase of 3.5% senior subordinated convertible notes | (62.7 | ) | (62.7 | ) | — | — | |||||||||||
Net (repayments) borrowings of long-term debt | (51.7 | ) | (98.9 | ) | 27.7 | 19.5 | |||||||||||
Net borrowings of floor plan notes payable—non-trade | 70.2 | 21.2 | 41 | 8 | |||||||||||||
Repurchases of common stock | (9.8 | ) | (9.8 | ) | — | — | |||||||||||
Dividends | (41.5 | ) | (41.5 | ) | — | — | |||||||||||
Payment of deferred financing fees | (8.6 | ) | (8.6 | ) | — | — | |||||||||||
Other | (1.1 | ) | — | — | (1.1 | ) | |||||||||||
Distributions from (to) parent | — | — | 5.2 | (5.2 | ) | ||||||||||||
| | | | | | | | | | | | | | ||||
Net cash provided by (used in) continuing financing activities | 54 | (41.1 | ) | 73.9 | 21.2 | ||||||||||||
Net cash provided by discontinued operations | 11.2 | — | 3.8 | 7.4 | |||||||||||||
| | | | | | | | | | | | | | ||||
Net change in cash and cash equivalents | 17.1 | — | 9 | 8.1 | |||||||||||||
Cash and cash equivalents, beginning of period | 26.8 | — | 25.8 | 1 | |||||||||||||
| | | | | | | | | | | | | | ||||
Cash and cash equivalents, end of period | $ | 43.9 | $ | — | $ | 34.8 | $ | 9.1 | |||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Schedule_II_VALUATION_AND_QUAL
Schedule II VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Schedule II VALUATION AND QUALIFYING ACCOUNTS | ||||||||||||||
Schedule II VALUATION AND QUALIFYING ACCOUNTS | ||||||||||||||
Schedule II | ||||||||||||||
PENSKE AUTOMOTIVE GROUP, INC. | ||||||||||||||
VALUATION AND QUALIFYING ACCOUNTS | ||||||||||||||
Description | Balance at | Additions | Deductions, | Balance | ||||||||||
Beginning | Recoveries, & Other | at End | ||||||||||||
of Year | of Year | |||||||||||||
Year Ended December 31, 2014 | ||||||||||||||
Allowance for doubtful accounts | $ | 2.9 | $ | 1 | $ | (0.4 | ) | $ | 3.5 | |||||
Tax valuation allowance | 14.6 | 4.3 | (0.7 | ) | 18.2 | |||||||||
Year Ended December 31, 2013 | ||||||||||||||
Allowance for doubtful accounts | $ | 2.8 | $ | 0.7 | $ | (0.6 | ) | $ | 2.9 | |||||
Tax valuation allowance | 14.6 | 1.6 | (1.6 | ) | 14.6 | |||||||||
Year Ended December 31, 2012 | ||||||||||||||
Allowance for doubtful accounts | $ | 2 | $ | 0.8 | $ | — | $ | 2.8 | ||||||
Tax valuation allowance | 11.8 | 3 | (0.2 | ) | 14.6 | |||||||||
Organization_and_Summary_of_Si1
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Organization and Summary of Significant Accounting Policies | ||||||||||||||
Business Overview and Concentrations | ||||||||||||||
Business Overview and Concentrations | ||||||||||||||
We are an international transportation services company that operates automotive and commercial vehicle dealerships principally in the United States and Western Europe, and distributes commercial vehicles, diesel engines, gas engines, power systems and related parts and services principally in Australia and New Zealand. | ||||||||||||||
In 2014, our business generated $17.2 billion in total revenue which is comprised of $16.6 billion from retail automotive dealerships, $125.6 million from retail commercial vehicle dealerships and $448.9 million from commercial vehicle distribution and other operations. | ||||||||||||||
Retail Automotive Dealership. We believe we are the second largest automotive retailer headquartered in the U.S. as measured by the $16.6 billion in total retail automotive dealership revenue we generated in 2014. As of December 31, 2014, we operated 327 automotive retail franchises, of which 179 franchises are located in the U.S. and 148 franchises are located outside of the U.S. The franchises outside the U.S. are located primarily in the U.K. | ||||||||||||||
We are engaged in the sale of new and used motor vehicles and related products and services, including vehicle service, collision repair, and placement of finance and lease contracts, third-party insurance products and other aftermarket products. We operate dealerships under franchise agreements with a number of automotive manufacturers and distributors. In accordance with individual franchise agreements, each dealership is subject to certain rights and restrictions typical of the industry. The ability of the manufacturers to influence the operations of the dealerships, or the loss of a significant number of franchise agreements, could have a material impact on our results of operations, financial position and cash flows. | ||||||||||||||
For the year ended December 31, 2014, BMW/MINI franchises accounted for 27% of our total automotive dealership revenues, Audi/Volkswagen/Porsche/Bentley franchises accounted for 22%, Toyota/Lexus/Scion franchises accounted for 15%, and Mercedes-Benz/Sprinter/smart accounted for 11%. No other manufacturers' franchises accounted for more than 10% of our total automotive dealership revenues. At December 31, 2014 and 2013, we had receivables from manufacturers of $169.9 million and $145.8 million, respectively. In addition, a large portion of our contracts in transit, which are included in accounts receivable, are due from manufacturers' captive finance companies. | ||||||||||||||
During the year ended December 31, 2014, we acquired two franchises and were also awarded six franchises. We disposed of seven franchises principally consisting of four franchises in Bremen, Germany which were consolidated with our Hamburg operations. Additionally, in 2014, we acquired a 50% ownership interest in a group of eight BMW and MINI franchises in Barcelona, Spain, a new market for us. | ||||||||||||||
Retail Commercial Vehicle Dealership. In November 2014, we acquired a controlling interest in The Around The Clock Freightliner Group, a heavy and medium duty truck dealership group located in Texas, Oklahoma and New Mexico, which we have renamed Penske Commercial Vehicles US ("PCV US"). Prior to this transaction, we held a 32% interest in PCV US and accounted for this investment under the equity method. We acquired the additional interest in PCV US for $75.3 million, resulting in us owning a controlling interest of 91%. We funded the purchase price using our U.S. revolving credit facility. As a result of this transaction, we recognized a gain of $16.0 million in current period earnings, under the caption "Gain on investment" on our statement of income, as a result of remeasuring at fair value our previously held noncontrolling interest in PCV US as of the acquisition date, in accordance with Accounting Standards Codification ("ASC") 805, Business Combinations. PCV US operates sixteen locations, including ten full-service dealerships offering principally Freightliner, Western Star, and Sprinter-branded trucks. Two of these locations, Freightliner of Chattanooga and Freightliner of Knoxville, were acquired in February 2015. PCV US also offers a full range of used trucks available for sale as well as service and parts departments, many of which are open 24 hours a day, seven days a week. From our acquisition on November 1, 2014 through December 31, 2014, this business generated $125.6 million of revenue. | ||||||||||||||
Commercial Vehicle Distribution. Since August 30, 2013, we have been the exclusive importer and distributor of Western Star heavy duty trucks (a Daimler brand), MAN heavy and medium duty trucks and buses (a VW Group brand), and Dennis Eagle refuse collection vehicles, together with associated parts across Australia, New Zealand and portions of the Pacific. The business, known as Penske Commercial Vehicles Australia, distributes commercial vehicles and parts to a network of more than 70 dealership locations, including three company-owned retail commercial vehicle dealerships. This business represented 2.3% of our total revenues and 2.4% of our total gross profit in 2014. | ||||||||||||||
On October 1, 2014, we acquired MTU Detroit Diesel Australia Pty Ltd. ("MTU-DDA"), a leading distributor of diesel and gas engines and power systems, representing MTU, Detroit Diesel, Mercedes-Benz Industrial, Allison Transmission and MTU Onsite Energy, for a purchase price of approximately $115.0 million (AU $131.5 million) which was funded by our U.S. revolving credit facility and our U.K. credit facility. MTU-DDA offers products across the on- and off-highway markets in Australia, New Zealand and the Pacific and supports full parts and aftersales service through a network of branches, field locations and dealers across the region. The on-highway portion of this business complements our existing Penske Commercial Vehicles Australia distribution business. From our acquisition on October 1, 2014 through December 31, 2014, this business generated $52.5 million of revenue. | ||||||||||||||
Penske Truck Leasing. We hold a 9.0% limited partnership interest in Penske Truck Leasing Co., L.P. ("PTL"), a leading provider of transportation and supply chain services. | ||||||||||||||
Basis of Presentation | ||||||||||||||
Basis of Presentation | ||||||||||||||
The consolidated financial statements include all majority-owned subsidiaries. Investments in affiliated companies, representing an ownership interest in the voting stock of the affiliate of between 20% and 50% or an investment in a limited partnership or a limited liability corporation for which our investment is more than minor, are stated at the cost of acquisition plus our equity in undistributed net earnings since acquisition. All intercompany accounts and transactions have been eliminated in consolidation. | ||||||||||||||
The consolidated financial statements, including the comparative periods presented, have been adjusted for entities that have been treated as discontinued operations through December 31, 2014 in accordance with generally accepted accounting principles. | ||||||||||||||
Estimates | ||||||||||||||
Estimates | ||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The accounts requiring the use of significant estimates include accounts receivable, inventories, income taxes, intangible assets and certain reserves. | ||||||||||||||
Cash and Cash Equivalents | ||||||||||||||
Cash and Cash Equivalents | ||||||||||||||
Cash and cash equivalents include all highly-liquid investments that have an original maturity of three months or less at the date of purchase. | ||||||||||||||
Contracts in Transit | ||||||||||||||
Contracts in Transit | ||||||||||||||
Contracts in transit represent receivables from unaffiliated finance companies relating to the sale of customers' installment sales and lease contracts arising in connection with the sale of a vehicle by us. Contracts in transit, included in accounts receivable, net in our consolidated balance sheets, amounted to $264.8 million and $250.5 million as of December 31, 2014 and 2013, respectively. | ||||||||||||||
Inventory Valuation | ||||||||||||||
Inventory Valuation | ||||||||||||||
Inventories are stated at the lower of cost or market. Cost for new and used vehicle inventories includes acquisition, reconditioning, dealer installed accessories, and transportation expenses and is determined using the specific identification method. Inventories of automotive dealership parts and accessories are accounted for using the "first-in, first-out" ("FIFO") method of inventory accounting and the cost is based on factory list prices. | ||||||||||||||
Property and Equipment | ||||||||||||||
Property and Equipment | ||||||||||||||
Property and equipment are recorded at cost and depreciated over estimated useful lives using the straight-line method. Useful lives for purposes of computing depreciation for assets, other than leasehold improvements, range between 3 and 15 years. Leasehold improvements and equipment under capital lease are depreciated over the shorter of the term of the lease or the estimated useful life of the asset, not to exceed 40 years. | ||||||||||||||
Expenditures relating to recurring repair and maintenance are expensed as incurred. Expenditures that increase the useful life or substantially increase the serviceability of an existing asset are capitalized. When equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the balance sheet, with any resulting gain or loss being reflected in income. | ||||||||||||||
Income Taxes | ||||||||||||||
Income Taxes | ||||||||||||||
Tax regulations may require items to be included in our tax return at different times than when those items are reflected in our financial statements. Some of the differences are permanent, such as expenses that are not deductible on our tax return, and some are temporary differences, such as the timing of depreciation expense. Temporary differences create deferred tax assets and liabilities. Deferred tax assets generally represent items that will be used as a tax deduction or credit in our tax return in future years which we have already recorded in our financial statements. Deferred tax liabilities generally represent deductions taken on our tax return that have not yet been recognized as an expense in our financial statements. We establish valuation allowances for our deferred tax assets if the amount of expected future taxable income is not more likely than not to allow for the use of the deduction or credit. | ||||||||||||||
Intangible Assets | ||||||||||||||
Intangible Assets | ||||||||||||||
Our principal intangible assets relate to our franchise agreements with vehicle manufacturers and distributors, which represent the estimated value of franchises acquired in business combinations, our distribution agreements with commercial vehicle manufacturers, which represent the estimated value of distribution rights acquired in business combinations, and goodwill, which represents the excess of cost over the fair value of tangible and identified intangible assets acquired in business combinations. We believe the franchise values of our automotive dealerships and the distribution agreements of our commercial vehicle distribution operations have an indefinite useful life based on the following: | ||||||||||||||
• | Automotive retailing and commercial vehicle distribution are mature industries and are based on franchise and distribution agreements with the vehicle manufacturers and distributors; | |||||||||||||
• | There are no known changes or events that would alter the automotive retailing franchise or commercial vehicle distribution environments; | |||||||||||||
• | Certain franchise agreement terms are indefinite; | |||||||||||||
• | Franchise and distribution agreements that have limited terms have historically been renewed by us without substantial cost; and | |||||||||||||
• | Our history shows that manufacturers and distributors have not terminated our franchise or distribution agreements. | |||||||||||||
Impairment Testing | ||||||||||||||
Impairment Testing | ||||||||||||||
Other indefinite-lived intangible assets are assessed for impairment annually on October 1 and upon the occurrence of an indicator of impairment through a comparison of its carrying amount and estimated fair value. An indicator of impairment exists if the carrying value exceeds its estimated fair value and an impairment loss may be recognized up to that excess. The fair value is determined using a discounted cash flow approach, which includes assumptions about revenue and profitability growth, profit margins, and the cost of capital. We also evaluate in connection with the annual impairment testing whether events and circumstances continue to support our assessment that the other indefinite-lived intangible assets continue to have an indefinite life. | ||||||||||||||
Goodwill impairment is assessed at the reporting unit level annually on October 1 and upon the occurrence of an indicator of impairment. Our operations are organized by management into operating segments by line of business and geography. We have determined that we have two reportable segments as defined in generally accepted accounting principles for segment reporting: (i) Retail Automotive, consisting of our automotive retail operations, and (ii) Other, consisting of our retail commercial vehicle dealership operations, our commercial vehicle distribution operations and our investments in non-automotive retail operations. We have determined that the dealerships in each of our operating segments within the Retail Automotive reportable segment are components that are aggregated into four geographical reporting units for the purpose of goodwill impairment testing, as they (A) have similar economic characteristics (all are automotive dealerships having similar margins), (B) offer similar products and services (all sell new and used vehicles, service, parts and third-party finance and insurance products), (C) have similar target markets and customers (generally individuals) and (D) have similar distribution and marketing practices (all distribute products and services through dealership facilities that market to customers in similar fashions). The geographic reporting units are Eastern, Central, and Western United States and International. The goodwill included in our Other reportable segment relates to our commercial vehicle operating segments. | ||||||||||||||
An indicator of goodwill impairment exists if the carrying amount of the reporting unit, including goodwill, is determined to exceed its estimated fair value. We have estimated the fair value of our reporting units using an "income" valuation approach. The "income" valuation approach estimates our enterprise value using a net present value model, which discounts projected free cash flows of our business using the weighted average cost of capital as the discount rate. In connection with this process, we also reconcile the estimated aggregate fair values of our reporting units to our market capitalization. We believe this reconciliation process is consistent with a market participant perspective. This consideration would also include a control premium that represents the estimated amount an investor would pay for our equity securities to obtain a controlling interest, and other significant assumptions including revenue and profitability growth, franchise profit margins, residual values and the cost of capital. We concluded the fair value of our reporting units substantially exceeded the carrying values. | ||||||||||||||
Investments | ||||||||||||||
Investments | ||||||||||||||
We account for each of our investments under the equity method, pursuant to which we record our proportionate share of the investee's income each period. The net book value of our investments was $352.8 million and $346.9 million as of December 31, 2014 and 2013, respectively. Investments for which there is not a liquid, actively traded market are reviewed periodically by management for indicators of impairment. If an indicator of impairment is identified, management estimates the fair value of the investment using a discounted cash flow approach, which includes assumptions relating to revenue and profitability growth, profit margins, residual values and the cost of capital. Declines in investment values that are deemed to be other than temporary may result in an impairment charge reducing the investments' carrying value to fair value. | ||||||||||||||
Foreign Currency Translation | ||||||||||||||
Foreign Currency Translation | ||||||||||||||
For all of our non-U.S. operations, the functional currency is the local currency. The revenue and expense accounts of our non-U.S. operations are translated into U.S. dollars using the average exchange rates that prevailed during the period. Assets and liabilities of non-U.S. operations are translated into U.S. dollars using period end exchange rates. Cumulative translation adjustments relating to foreign functional currency assets and liabilities are recorded in accumulated other comprehensive income (loss), a separate component of equity. | ||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||
Accounting standards define fair value as the price that would be received from selling an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Accounting standards establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value and also establishes the following three levels of inputs that may be used to measure fair value: | ||||||||||||||
Level 1 | Quoted prices in active markets for identical assets or liabilities | |||||||||||||
Level 2 | Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted market prices in markets that are not active; or model-derived valuations or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities | |||||||||||||
Level 3 | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities | |||||||||||||
Our financial instruments consist of cash and cash equivalents, debt, floor plan notes payable, forward exchange contracts and interest rate swaps used to hedge future cash flows. Other than our fixed rate debt, the carrying amount of all significant financial instruments approximates fair value due either to length of maturity, the existence of variable interest rates that approximate prevailing market rates, or as a result of mark to market accounting. | ||||||||||||||
Our fixed rate debt consists of amounts outstanding under our senior subordinated notes and mortgage facilities. We estimate the fair value of our senior unsecured notes using quoted prices for the identical liability (Level 2), and we estimate the fair value of our mortgage facilities using a present value technique based on our current market interest rates for similar types of financial instruments (Level 2). A summary of the carrying values and fair values of our 5.75% senior subordinated notes, 5.375% senior subordinated notes and our fixed rate mortgage facilities are as follows: | ||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||
5.75% senior subordinated notes due 2022 | $ | 550.0 | $ | 558.4 | $ | 550.0 | $ | 565.1 | ||||||
5.375% senior subordinated notes due 2024 | 300.0 | 306.0 | — | — | ||||||||||
Mortgage facilities | 169.7 | 171.6 | 118.6 | 117.0 | ||||||||||
Revenue Recognition | ||||||||||||||
Revenue Recognition | ||||||||||||||
Dealership Vehicle, Parts and Service Sales | ||||||||||||||
We record revenue when vehicles are delivered and title has passed to the customer, when vehicle service or repair work is completed and when parts are delivered to our customers. Sales promotions that we offer to customers are accounted for as a reduction of revenues at the time of sale. Rebates and other incentives offered directly to us by manufacturers are recognized as a reduction of cost of sales. Reimbursements of qualified advertising expenses are treated as a reduction of selling, general and administrative expenses. The amounts received under certain manufacturer rebate and incentive programs are based on the attainment of program objectives, and such earnings are recognized either upon the sale of the vehicle for which the award was received, or upon attainment of the particular program goals if not associated with individual vehicles. Taxes collected from customers and remitted to governmental authorities are recorded on a net basis (excluded from revenue). | ||||||||||||||
Dealership Finance and Insurance Sales | ||||||||||||||
Subsequent to the sale of a vehicle to a customer, we sell installment sale contracts to various financial institutions on a non-recourse basis (with specified exceptions) to mitigate the risk of default. We receive a commission from the lender equal to either the difference between the interest rate charged to the customer and the interest rate set by the financing institution or a flat fee. We also receive commissions for facilitating the sale of various products to customers, including guaranteed vehicle protection insurance, vehicle theft protection and extended service contracts. These commissions are recorded as revenue at the time the customer enters into the contract. In the case of finance contracts, a customer may prepay or fail to pay their contract, thereby terminating the contract. Customers may also terminate extended service contracts and other insurance products, which are fully paid at purchase, and become eligible for refunds of unused premiums. In these circumstances, a portion of the commissions we received may be charged back based on the terms of the contracts. The revenue we record relating to these transactions is net of an estimate of the amount of chargebacks we will be required to pay. Our estimate is based upon our historical experience with similar contracts, including the impact of refinance and default rates on retail finance contracts and cancellation rates on extended service contracts and other insurance products. Aggregate reserves relating to chargeback activity were $25.8 million and $23.3 million as of December 31, 2014 and 2013, respectively. | ||||||||||||||
Commercial Vehicle Distribution | ||||||||||||||
Revenue from the distribution of vehicles, engines, power systems and parts is recognized at the time of delivery of goods to the retailer or the ultimate customer. | ||||||||||||||
Defined Contribution Plans | ||||||||||||||
Defined Contribution Plans | ||||||||||||||
We sponsor a number of defined contribution plans covering a significant majority of our employees. Our contributions to such plans are discretionary and are based on the level of compensation and contributions by plan participants. We incurred expense of $17.7 million, $15.1 million, and $13.7 million relating to such plans during the years ended December 31, 2014, 2013, and 2012, respectively. | ||||||||||||||
Advertising | ||||||||||||||
Advertising | ||||||||||||||
Advertising costs are expensed as incurred or when such advertising takes place. We incurred net advertising costs of $93.3 million, $80.8 million, and $79.1 million during the years ended December 31, 2014, 2013, and 2012, respectively. Qualified advertising expenditures reimbursed by manufacturers, which are treated as a reduction of advertising expense, were $14.3 million, $13.1 million, and $11.9 million during the years ended December 31, 2014, 2013, and 2012, respectively. | ||||||||||||||
Self-Insurance | ||||||||||||||
Self-Insurance | ||||||||||||||
We retain risk relating to certain of our general liability insurance, workers' compensation insurance, vehicle physical damage insurance, property insurance, employment practices liability insurance, directors and officers insurance, and employee medical benefits in the U.S. As a result, we are likely to be responsible for a significant portion of the claims and losses incurred under these programs. The amount of risk we retain varies by program, and, for certain exposures, we have pre-determined maximum loss limits for certain individual claims and/or insurance periods. Losses, if any, above such pre-determined loss limits are paid by third-party insurance carriers. Certain insurers have limited available property coverage in response to the natural catastrophes experienced in recent years. Our estimate of future losses is prepared by management using our historical loss experience and industry-based development factors. Aggregate reserves relating to retained risk were $24.6 million and $21.1 million as of December 31, 2014 and 2013, respectively. Changes in the reserve estimate during 2014 relate primarily to our general liability and workers compensation programs. | ||||||||||||||
Earnings Per Share | ||||||||||||||
Earnings Per Share | ||||||||||||||
Basic earnings per share is computed using net income attributable to Penske Automotive Group common stockholders and the number of weighted average shares of voting common stock outstanding, including outstanding unvested restricted stock awards which contain rights to non-forfeitable dividends. Diluted earnings per share is computed using net income attributable to Penske Automotive Group common stockholders and the number of weighted average shares of voting common stock outstanding, adjusted for any dilutive effects. A reconciliation of the number of shares used in the calculation of basic and diluted earnings per share for the years ended December 31, 2014, 2013, and 2012 follows: | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Weighted average number of common shares outstanding | 90,318,839 | 90,273,747 | 90,318,315 | |||||||||||
Effect of non-participatory equity compensation | 36,000 | 56,874 | 24,000 | |||||||||||
| | | | | | | | | | | ||||
Weighted average number of common shares outstanding, including effect of dilutive securities | 90,354,839 | 90,330,621 | 90,342,315 | |||||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Hedging | ||||||||||||||
Hedging | ||||||||||||||
Generally accepted accounting principles relating to derivative instruments and hedging activities require all derivatives, whether designated in hedging relationships or not, to be recorded on the balance sheet at fair value. These accounting principles also define requirements for designation and documentation of hedging relationships, as well as ongoing effectiveness assessments, which must be met in order to qualify for hedge accounting. For a derivative that does not qualify as a hedge, changes in fair value are recorded in earnings immediately. If the derivative is designated in a fair-value hedge, the changes in the fair value of the derivative and the hedged item are recorded in earnings. If the derivative is designated as a cash-flow hedge, effective changes in the fair value of the derivative are recorded in accumulated other comprehensive income (loss), a separate component of equity, and recorded in the income statement only when the hedged item affects earnings. Changes in the fair value of the derivative attributable to hedge ineffectiveness are recorded in earnings immediately. | ||||||||||||||
Stock-Based Compensation | ||||||||||||||
Stock-Based Compensation | ||||||||||||||
Generally accepted accounting principles relating to share-based payments require us to record compensation expense for all awards based on their grant-date fair value. Our share-based payments have generally been in the form of "non-vested shares," the fair value of which are measured as if they were vested and issued on the grant date. | ||||||||||||||
Recent Accounting Pronouncements | ||||||||||||||
Recent Accounting Pronouncements | ||||||||||||||
In April 2014, the FASB issued ASU No. 2014-8, "Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360)—Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity." ASU No. 2014-8 changes the requirements for reporting discontinued operations to only allow presentation of a disposal of an entity or component of an entity as a discontinued operation if it represents a strategic shift that has (or will have) a major effect on an entity's operations or financial results. This ASU is effective for us for the annual period beginning January 1, 2015. We anticipate the adoption of ASU No. 2014-8 to result in fewer of our disposals qualifying for discontinued operations treatment. | ||||||||||||||
In May 2014, the FASB issued ASU No. 2014-9, "Revenue from Contracts with Customers (Topic 606)." This ASU supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. ASU No. 2014-09 will require an entity to recognize revenue when it transfers promised goods or services to customers using a five-step model that requires entities to exercise judgment when considering the terms of the contracts. This ASU is effective for us beginning after January 1, 2017 and can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption. We are currently assessing the impact the adoption of this update will have on our consolidated financial position, results of operations, and cash flows. | ||||||||||||||
Organization_and_Summary_of_Si2
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Organization and Summary of Significant Accounting Policies | ||||||||||||||
Summary of carrying values and fair values of senior subordinated notes and fixed rate mortgage facilities | ||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||
5.75% senior subordinated notes due 2022 | $ | 550.0 | $ | 558.4 | $ | 550.0 | $ | 565.1 | ||||||
5.375% senior subordinated notes due 2024 | 300.0 | 306.0 | — | — | ||||||||||
Mortgage facilities | 169.7 | 171.6 | 118.6 | 117.0 | ||||||||||
Reconciliation of number of shares used in calculation of basic and diluted earning per share | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Weighted average number of common shares outstanding | 90,318,839 | 90,273,747 | 90,318,315 | |||||||||||
Effect of non-participatory equity compensation | 36,000 | 56,874 | 24,000 | |||||||||||
| | | | | | | | | | | ||||
Weighted average number of common shares outstanding, including effect of dilutive securities | 90,354,839 | 90,330,621 | 90,342,315 | |||||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Equity_Method_Investees_Table
Equity Method Investees (Table) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Equity Method Investees | |||||||||||
Equity method investment statement of operation and financial position | |||||||||||
Condensed income statement information: | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Revenues | $ | 6,620.1 | $ | 6,177.0 | $ | 6,043.4 | |||||
Gross margin | 2,181.4 | 2,043.5 | 1,897.3 | ||||||||
Net income | 357.2 | 304.0 | 284.2 | ||||||||
Equity in net income of affiliates | 40.8 | 30.7 | 27.6 | ||||||||
Condensed balance sheet information: | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Current assets | $ | 1,242.0 | $ | 1,194.2 | |||||||
Noncurrent assets | 9,230.8 | 8,377.8 | |||||||||
| | | | | | | | ||||
Total assets | $ | 10,472.8 | $ | 9,572.0 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Current liabilities | $ | 958.1 | $ | 888.8 | |||||||
Noncurrent liabilities | 7,276.8 | 6,517.5 | |||||||||
Equity | 2,237.9 | 2,165.7 | |||||||||
| | | | | | | | ||||
Total liabilities and equity | $ | 10,472.8 | $ | 9,572.0 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Business_Combinations_Tables
Business Combinations (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Business Combinations | ||||||||
Summary of the aggregate consideration paid and the aggregate amounts of the assets acquired and liabilities assumed | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Accounts receivable | $ | 66.2 | $ | 20.1 | ||||
Inventory | 197.9 | 161.5 | ||||||
Other current assets | 5.9 | 2.6 | ||||||
Property and equipment | 95.2 | 14 | ||||||
Indefinite-lived intangibles | 266.4 | 187.6 | ||||||
Other non-current assets | 10.7 | 9 | ||||||
Current liabilities | (83.4 | ) | (79.5 | ) | ||||
Non-current liabilities | (12.1 | ) | (1.3 | ) | ||||
| | | | | | | | |
Total | 546.8 | 314 | ||||||
Seller financed/assumed debt | (134.4 | ) | — | |||||
Fair value of previously held interest in PCV US | (47.4 | ) | — | |||||
Fair value of PCV US noncontrolling interest | (10.0 | ) | — | |||||
| | | | | | | | |
Total cash used in acquisitions | 355 | 314 | ||||||
| | | | | | | | |
| | | | | | | | |
Summary of unaudited consolidated pro forma results of operations | ||||||||
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Revenues | $ | 17,964.5 | $ | 16,687.5 | ||||
Income from continuing operations | 311.1 | 286.2 | ||||||
Net income | 292.4 | 281.6 | ||||||
Income from continuing operations per diluted common share | $ | 3.44 | $ | 3.17 | ||||
Net income per diluted common share | $ | 3.23 | $ | 3.12 | ||||
Discontinued_Operations_and_Di1
Discontinued Operations and Divestitures (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Discontinued Operations and Divestitures | |||||||||||
Combined financial information regarding entities accounted for as discontinued operations | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Revenues | $ | 261.7 | $ | 524.8 | $ | 690.5 | |||||
Pre-tax loss | (35.6 | ) | (6.2 | ) | (18.2 | ) | |||||
Gain on disposal | 14.8 | 0.8 | 8.1 | ||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Inventory | $ | 34.7 | $ | 72.6 | |||||||
Other assets | 151.4 | 181.2 | |||||||||
| | | | | | | | ||||
Total assets | 186.1 | 253.8 | |||||||||
| | | | | | | | ||||
| | | | | | | | ||||
Floor plan notes payable (including non-trade) | 27.9 | 57.5 | |||||||||
Other liabilities | 104.8 | 109.0 | |||||||||
| | | | | | | | ||||
Total liabilities | 132.7 | 166.5 | |||||||||
| | | | | | | | ||||
| | | | | | | | ||||
Inventories_Tables
Inventories (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Inventories | ||||||||
Inventories | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
New vehicles | $ | 1,792.5 | $ | 1,696.7 | ||||
Used vehicles | 639.9 | 582.1 | ||||||
Commercial vehicles and parts | 283.3 | 126.9 | ||||||
Parts, accessories and other | 103.5 | 95.7 | ||||||
| | | | | | | | |
Total inventories | $ | 2,819.2 | $ | 2,501.4 | ||||
| | | | | | | | |
| | | | | | | | |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property and Equipment | ||||||||
Schedule of components of property and equipment | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Buildings and leasehold improvements | $ | 1,225.40 | $ | 1,069.80 | ||||
Furniture, fixtures and equipment | 537.7 | 459.8 | ||||||
| | | | | | | | |
Total | 1,763.10 | 1,529.60 | ||||||
Less: Accumulated depreciation | (434.3 | ) | (410.1 | ) | ||||
| | | | | | | | |
Property and equipment, net | $ | 1,328.80 | $ | 1,119.50 | ||||
| | | | | | | | |
| | | | | | | | |
Intangible_Assets_Tables
Intangible Assets (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Intangible Assets | |||||||||||
Summary of the changes in the carrying amount of goodwill and other indefinite-lived intangible assets | |||||||||||
Goodwill | Other Indefinite- | ||||||||||
Lived Intangible | |||||||||||
Assets | |||||||||||
Balance—December 31, 2012 | $ | 961.5 | $ | 271.5 | |||||||
Additions | 165.5 | 22.1 | |||||||||
Deconsolidation of Italian investment | (7.2 | ) | (2.9 | ) | |||||||
Reconsolidation of Italian investment | 7.4 | 3.1 | |||||||||
Foreign currency translation | 7.7 | 1.4 | |||||||||
| | | | | | | | ||||
Balance—December 31, 2013 | 1,134.90 | 295.2 | |||||||||
Additions | 165.4 | 101 | |||||||||
Foreign currency translation | (34.0 | ) | (10.0 | ) | |||||||
| | | | | | | | ||||
Balance—December 31, 2014 | $ | 1,266.30 | $ | 386.2 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Summary of the changes in the carrying amount of goodwill by reportable segment | |||||||||||
Retail | Other | Total | |||||||||
Automotive | |||||||||||
Balance—December 31, 2012 | $ | 961.5 | $ | — | $ | 961.5 | |||||
Additions | 49.6 | 115.9 | 165.5 | ||||||||
Deconsolidation of Italian investment | (7.2 | ) | — | (7.2 | ) | ||||||
Reconsolidation of Italian investment | 7.4 | — | 7.4 | ||||||||
Foreign currency translation | 9.2 | (1.5 | ) | 7.7 | |||||||
| | | | | | | | | | | |
Balance—December 31, 2013 | 1,020.50 | 114.4 | 1,134.90 | ||||||||
Additions | 53.7 | 111.7 | 165.4 | ||||||||
Foreign currency translation | (24.7 | ) | (9.3 | ) | (34.0 | ) | |||||
| | | | | | | | | | | |
Balance—December 31, 2014 | $ | 1,049.50 | $ | 216.8 | $ | 1,266.30 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Long-Term Debt | ||||||||
Long Term Debt | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
U.S. credit agreement—revolving credit line | $ | — | $ | 90 | ||||
U.S. credit agreement—term loan | 88 | 98 | ||||||
U.K. credit agreement—revolving credit line | 121.5 | 106 | ||||||
U.K. credit agreement—term loan | 18.7 | 29.8 | ||||||
U.K. credit agreement—overdraft line of credit | 5.7 | — | ||||||
5.375% senior subordinated notes due 2024 | 300 | — | ||||||
5.75% senior subordinated notes due 2022 | 550 | 550 | ||||||
U.S. commercial vehicle capital loan | 60.5 | — | ||||||
Australia working capital loan agreement | — | — | ||||||
Mortgage facilities | 169.7 | 118.6 | ||||||
Other | 38.5 | 3.9 | ||||||
| | | | | | | | |
Total long-term debt | $ | 1,352.60 | $ | 996.3 | ||||
Less: current portion | (36.6 | ) | (14.5 | ) | ||||
| | | | | | | | |
Net long-term debt | $ | 1,316.00 | $ | 981.8 | ||||
| | | | | | | | |
| | | | | | | | |
Scheduled maturities of long-term debt for each of the next five years and thereafter | ||||||||
2015 | $ | 36.6 | ||||||
2016 | 21.1 | |||||||
2017 | 190.9 | |||||||
2018 | 8.0 | |||||||
2019 | 147.3 | |||||||
2020 and thereafter | 948.7 | |||||||
| | | | | ||||
Total long-term debt reported | $ | 1,352.6 | ||||||
| | | | | ||||
| | | | | ||||
Commitments_and_Contingent_Lia1
Commitments and Contingent Liabilities (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingent Liabilities | |||||
Minimum future rental payments required under operating leases | |||||
Minimum future rental payments required under operating leases in effect as of December 31, 2014 are as follows: | |||||
2015 | $ | 210.5 | |||
2016 | 207.3 | ||||
2017 | 203.0 | ||||
2018 | 200.9 | ||||
2019 | 199.5 | ||||
2020 and thereafter | 3,923.9 | ||||
| | | | | |
$ | 4,945.1 | ||||
| | | | | |
| | | | | |
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Related Party Transactions | |||||||
Schedule of automotive joint venture relationships | |||||||
Location | Dealerships | Ownership | |||||
Interest | |||||||
Fairfield, Connecticut | Audi, Mercedes-Benz, Sprinter, Porsche, smart | 82.19 | %(A)(C) | ||||
Greenwich, Connecticut | Mercedes-Benz | 80.00 | %(B)(C) | ||||
Las Vegas, Nevada | Ferrari, Maserati | 50.00 | %(D) | ||||
Frankfurt, Germany | Lexus, Toyota, Volkswagen | 50.00 | %(D) | ||||
Aachen, Germany | Audi, Citroën, Kia, Maserati, SEAT, Skoda, Toyota, Volkswagen | 50.00 | %(D) | ||||
Northern Italy | BMW, MINI, Maserati | 70.00 | %(C) | ||||
Barcelona, Spain | BMW, MINI | 50.00 | %(D) | ||||
(A) | An entity controlled by one of our directors, Lucio A. Noto (the "Investor"), owns a 17.81% interest in this joint venture which entitles the Investor to 20% of the joint venture's operating profits. In addition, the Investor has an option to purchase up to a total 20% interest in the joint venture for specified amounts. | ||||||
(B) | An entity controlled by one of our directors, Lucio A. Noto (the "Investor"), owns a 20% interest in this joint venture. | ||||||
(C) | Entity is consolidated in our financial statements. | ||||||
(D) | Entity is accounted for using the equity method of accounting. | ||||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Stock-Based Compensation | |||||||||||
Summary of the Company's restricted stock activity | |||||||||||
Shares | Weighted Average | Aggregate | |||||||||
Grant-Date | Intrinsic | ||||||||||
Fair Value | Value | ||||||||||
December 31, 2013 | 1,168,200 | $ | 23.75 | ||||||||
Granted | 314,677 | 44.03 | |||||||||
Vested | (373,450 | ) | 20 | ||||||||
Forfeited | (7,042 | ) | 27.12 | ||||||||
| | | | | | | | | | | |
December 31, 2014 | 1,102,385 | $ | 30.78 | $ | 54.1 | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Equity_Tables
Equity (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Stock-Based Compensation | |||||||||||
Schedule of shares repurchased under our securities repurchase program and shares acquired | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Shares repurchased(1) | 175,000 | 410,000 | 350,000 | ||||||||
Aggregate purchase price | $ | 8.0 | $ | 12.7 | $ | 8.5 | |||||
Average purchase price per share | $ | 45.95 | $ | 30.93 | $ | 24.35 | |||||
Shares acquired(2) | 160,350 | 97,818 | 55,631 | ||||||||
Aggregate purchase price | $ | 7.5 | $ | 3.1 | $ | 1.3 | |||||
Average purchase price per share | $ | 46.48 | $ | 32.13 | $ | 23.49 | |||||
-1 | Shares were repurchased under our securities repurchase program. As of December 31, 2014, we have $150.0 million in repurchase authorization under the repurchase program. | ||||||||||
-2 | Shares were acquired from employees in connection with a net share settlement feature of employee equity awards. | ||||||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income / (Loss) (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Accumulated Other Comprehensive Income / (Loss) | |||||||||||
Schedule of the changes in accumulated other comprehensive income/ (loss) by component and the reclassifications out of accumulated other comprehensive income/ (loss) attributable to the entity's common stockholders | |||||||||||
Foreign | Other | Accumulated | |||||||||
Currency | Other | ||||||||||
Translation | Comprehensive | ||||||||||
Income (Loss) | |||||||||||
Balance at January 1, 2012 | $ | (17.9 | ) | $ | (6.3 | ) | $ | (24.2 | ) | ||
Other comprehensive income before reclassifications | 18.3 | (5.1 | ) | 13.2 | |||||||
Amounts reclassified from accumulated other comprehensive income—net of tax provision of $2.8 | — | 4.2 | 4.2 | ||||||||
| | | | | | | | | | | |
Net current-period other comprehensive income | 18.3 | (0.9 | ) | 17.4 | |||||||
| | | | | | | | | | | |
Balance at December 31, 2012 | 0.4 | (7.2 | ) | (6.8 | ) | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Other comprehensive income before reclassifications | 11.9 | 3 | 14.9 | ||||||||
Amounts reclassified from accumulated other comprehensive income—net of tax provision (benefit) of ($0.5) and $2.9, respectively | (0.9 | ) | 4.4 | 3.5 | |||||||
| | | | | | | | | | | |
Net current-period other comprehensive income | 11 | 7.4 | 18.4 | ||||||||
| | | | | | | | | | | |
Balance at December 31, 2013 | 11.4 | 0.2 | 11.6 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Other comprehensive income before reclassifications | (63.1 | ) | (6.7 | ) | (69.8 | ) | |||||
Amounts reclassified from accumulated other comprehensive income—net of tax provision of $3.2 | — | 4.9 | 4.9 | ||||||||
| | | | | | | | | | | |
Net current-period other comprehensive income | (63.1 | ) | (1.8 | ) | (64.9 | ) | |||||
| | | | | | | | | | | |
Balance at December 31, 2014 | $ | (51.7 | ) | $ | (1.6 | ) | $ | (53.3 | ) | ||
| | | | | | | | | | | |
| | | | | | | | | | | |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Taxes | |||||||||||
Schedule of income taxes relating to income from continuing operations | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Current: | |||||||||||
Federal | $ | 52.6 | $ | 7.3 | $ | (16.4 | ) | ||||
State and local | 7.9 | 5.1 | 1.2 | ||||||||
Foreign | 42.2 | 33.9 | 26.5 | ||||||||
| | | | | | | | | | | |
Total current | 102.7 | 46.3 | 11.3 | ||||||||
| | | | | | | | | | | |
Deferred: | |||||||||||
Federal | 42.9 | 71.3 | 70.1 | ||||||||
State and local | 9.3 | 9.5 | 11.8 | ||||||||
Foreign | (1.7 | ) | (3.2 | ) | 1.4 | ||||||
| | | | | | | | | | | |
Total deferred | 50.5 | 77.6 | 83.3 | ||||||||
| | | | | | | | | | | |
Income taxes relating to continuing operations | $ | 153.2 | $ | 123.9 | $ | 94.6 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of reconciliation of income taxes from continuing operations at federal statutory rate | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Income taxes relating to continuing operations at federal statutory rate of 35% | $ | 161.7 | $ | 131 | $ | 101.8 | |||||
State and local income taxes, net of federal taxes | 11 | 8.7 | 7.1 | ||||||||
Non-U.S. income taxed at other rates | (19.0 | ) | (16.1 | ) | (12.6 | ) | |||||
Other | (0.5 | ) | 0.3 | (1.7 | ) | ||||||
| | | | | | | | | | | |
Income taxes relating to continuing operations | $ | 153.2 | $ | 123.9 | $ | 94.6 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of components of deferred tax assets and liabilities | |||||||||||
2014 | 2013 | ||||||||||
Deferred Tax Assets | |||||||||||
Accrued liabilities | $ | 72.1 | $ | 61.8 | |||||||
Net operating loss carryforwards | 16 | 13.7 | |||||||||
Interest rate swap | — | 3.1 | |||||||||
Other | 8.4 | 12.4 | |||||||||
| | | | | | | | ||||
Total deferred tax assets | 96.5 | 91 | |||||||||
Valuation allowance | (18.2 | ) | (14.6 | ) | |||||||
| | | | | | | | ||||
Net deferred tax assets | 78.3 | 76.4 | |||||||||
| | | | | | | | ||||
Deferred Tax Liabilities | |||||||||||
Depreciation and amortization | (187.6 | ) | (175.9 | ) | |||||||
Partnership investments | (253.0 | ) | (219.0 | ) | |||||||
Convertible notes | (10.0 | ) | (12.5 | ) | |||||||
Other | (3.5 | ) | (1.3 | ) | |||||||
| | | | | | | | ||||
Total deferred tax liabilities | (454.1 | ) | (408.7 | ) | |||||||
| | | | | | | | ||||
Net deferred tax liabilities | $ | (375.8 | ) | $ | (332.3 | ) | |||||
| | | | | | | | ||||
| | | | | | | | ||||
Schedule of movement in uncertain tax positions | |||||||||||
2014 | 2013 | 2012 | |||||||||
Uncertain tax positions—January 1 | $ | 14 | $ | 14.7 | $ | 14.9 | |||||
Gross increase—tax position in prior periods | 0.2 | 0.3 | 1.3 | ||||||||
Gross decrease—tax position in prior periods | (0.6 | ) | (0.8 | ) | (0.8 | ) | |||||
Gross increase—current period tax position | 0.1 | 0.1 | — | ||||||||
Settlements | — | (0.4 | ) | (0.9 | ) | ||||||
Lapse in statute of limitations | — | (0.1 | ) | (0.3 | ) | ||||||
Foreign exchange | (0.6 | ) | 0.2 | 0.5 | |||||||
| | | | | | | | | | | |
Uncertain tax positions—December 31 | $ | 13.1 | $ | 14 | $ | 14.7 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Segment Information | ||||||||||||||
Revenues and adjusted segment income by reportable segment | ||||||||||||||
Retail | Other | Intersegment | Total | |||||||||||
Automotive | Elimination | |||||||||||||
Revenues | ||||||||||||||
2014 | $ | 16,602.70 | $ | 579.6 | $ | (5.1 | ) | $ | 17,177.20 | |||||
2013 | 14,291.30 | 152.6 | — | 14,443.90 | ||||||||||
2012 | 12,902.60 | — | — | 12,902.60 | ||||||||||
Floor plan interest expense | ||||||||||||||
2014 | $ | 44.7 | $ | 1.4 | $ | — | $ | 46.1 | ||||||
2013 | 42.5 | 0.6 | — | 43.1 | ||||||||||
2012 | 38 | — | — | 38 | ||||||||||
Other interest expense | ||||||||||||||
2014 | $ | 46.9 | $ | 5.9 | $ | — | $ | 52.8 | ||||||
2013 | 44.1 | 1.1 | — | 45.2 | ||||||||||
2012 | 46.1 | — | — | 46.1 | ||||||||||
Depreciation | ||||||||||||||
2014 | $ | 66.9 | $ | 3.1 | $ | — | $ | 70 | ||||||
2013 | 59.1 | 0.5 | — | 59.6 | ||||||||||
2012 | 52.2 | — | — | 52.2 | ||||||||||
Equity in earnings of affiliates | ||||||||||||||
2014 | $ | 3.8 | $ | 37 | $ | — | $ | 40.8 | ||||||
2013 | 4.9 | 25.8 | — | 30.7 | ||||||||||
2012 | 3.3 | 24.3 | — | 27.6 | ||||||||||
Adjusted segment income | ||||||||||||||
2014 | $ | 394.2 | $ | 51.8 | $ | — | $ | 446 | ||||||
2013 | 340.7 | 33.5 | — | 374.2 | ||||||||||
2012 | 284.3 | 24.3 | — | 308.6 | ||||||||||
Schedule of total adjusted segment income to consolidated income from continuing operations before income taxes reconciliation | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Adjusted segment income | $ | 446 | $ | 374.2 | $ | 308.6 | ||||||||
Debt redemption costs | — | — | (17.8 | ) | ||||||||||
Gain on investment | 16 | — | — | |||||||||||
| | | | | | | | | | | ||||
Income from continuing operations before income taxes | $ | 462 | $ | 374.2 | $ | 290.8 | ||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Total assets, equity method investments, and capital expenditures by reporting segment | ||||||||||||||
Retail | Other | Intersegment | Total | |||||||||||
Automotive | Elimination | |||||||||||||
Total assets(1) | ||||||||||||||
2014 | $ | 5,920.40 | $ | 1,308.20 | $ | (0.4 | ) | $ | 7,228.20 | |||||
2013 | 5,747.60 | 668.2 | (0.3 | ) | 6,415.50 | |||||||||
Equity method investments | ||||||||||||||
2014 | $ | 62.8 | $ | 290 | $ | — | $ | 352.8 | ||||||
2013 | 81.6 | 265.3 | — | 346.9 | ||||||||||
Capital expenditures | ||||||||||||||
2014 | $ | 169.5 | $ | 5.3 | $ | — | $ | 174.8 | ||||||
2013 | 174.7 | — | — | 174.7 | ||||||||||
2012 | 150.9 | — | — | 150.9 | ||||||||||
-1 | As discussed in Note 4, we treated the operations of our car rental business as discontinued operations. The associated assets have been reclassified to "Assets held for sale" as of December 31, 2014 and 2013 on the Consolidated Balance Sheets and therefore are still included within the Other segment in total assets above. | |||||||||||||
Schedule of revenue and long-lived assets by geographic area | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Sales to external customers: | ||||||||||||||
U.S. | $ | 10,435.9 | $ | 9,238.9 | $ | 8,285.8 | ||||||||
Non-U.S. | 6,741.3 | 5,205.0 | 4,616.8 | |||||||||||
| | | | | | | | | | | ||||
Total sales to external customers | $ | 17,177.2 | $ | 14,443.9 | $ | 12,902.6 | ||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Long-lived assets, net: | ||||||||||||||
U.S. | $ | 1,177.0 | $ | 1,050.2 | ||||||||||
Non-U.S. | 531.0 | 447.1 | ||||||||||||
| | | | | | | | | | | ||||
Total long-lived assets | $ | 1,708.0 | $ | 1,497.3 | ||||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Summary_of_Quarterly_Financial1
Summary of Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Summary of Quarterly Financial Data (Unaudited) | ||||||||||||||
Summary of Quarterly Financial Data (Unaudited) | ||||||||||||||
First | Second | Third | Fourth | |||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||
2014(1)(2) | ||||||||||||||
Total revenues | $ | 4,015.2 | $ | 4,370.5 | $ | 4,381.4 | $ | 4,410.1 | ||||||
Gross profit | 614.0 | 654.8 | 646.2 | 658.7 | ||||||||||
Net income | 67.9 | 73.9 | 75.1 | 73.2 | ||||||||||
Net income attributable to Penske Automotive Group common stockholders | 67.5 | 72.9 | 74.5 | 71.8 | ||||||||||
Diluted earnings per share attributable to Penske Automotive Group common stockholders | $ | 0.75 | $ | 0.81 | $ | 0.83 | $ | 0.80 | ||||||
2013(1)(2) | ||||||||||||||
Total revenues | $ | 3,326.8 | $ | 3,599.2 | $ | 3,724.6 | $ | 3,793.3 | ||||||
Gross profit | 519.8 | 547.8 | 558.4 | 571.0 | ||||||||||
Net income | 58.0 | 62.5 | 65.5 | 59.7 | ||||||||||
Net income attributable to Penske Automotive Group common stockholders | 57.7 | 62.0 | 65.3 | 59.2 | ||||||||||
Diluted earnings per share attributable to Penske Automotive Group common stockholders | $ | 0.64 | $ | 0.69 | $ | 0.72 | $ | 0.66 | ||||||
-1 | As discussed in Note 4, we have treated the operations of certain entities as discontinued operations. The results for all periods have been restated to reflect such treatment. | |||||||||||||
-2 | Per share amounts are calculated independently for each of the quarters presented. The sum of the quarters may not equal the full year per share amounts due to rounding. | |||||||||||||
Condensed_Consolidating_Financ1
Condensed Consolidating Financial Information (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Condensed Consolidating Financial Information | |||||||||||||||||
CONDENSED CONSOLIDATING BALANCE SHEET | |||||||||||||||||
CONDENSED CONSOLIDATING BALANCE SHEET | |||||||||||||||||
December 31, 2014 | |||||||||||||||||
Total | Eliminations | Penske | Guarantor | Non-Guarantor | |||||||||||||
Company | Automotive | Subsidiaries | Subsidiaries | ||||||||||||||
Group | |||||||||||||||||
Cash and cash equivalents | $ | 36.3 | $ | — | $ | — | $ | — | $ | 36.3 | |||||||
Accounts receivable, net | 701.4 | (409.6 | ) | 409.6 | 392.6 | 308.8 | |||||||||||
Inventories | 2,819.20 | — | — | 1,481.50 | 1,337.70 | ||||||||||||
Other current assets | 124.7 | — | 4.5 | 58.3 | 61.9 | ||||||||||||
Assets held for sale | 186.1 | — | — | 150.4 | 35.7 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total current assets | 3,867.70 | (409.6 | ) | 414.1 | 2,082.80 | 1,780.40 | |||||||||||
Property and equipment, net | 1,328.80 | — | 4.3 | 754.6 | 569.9 | ||||||||||||
Intangible assets | 1,652.50 | — | — | 818.4 | 834.1 | ||||||||||||
Equity method investments | 352.8 | — | 285.5 | — | 67.3 | ||||||||||||
Other long-term assets | 26.4 | (1,990.8 | ) | 2,005.00 | 4.4 | 7.8 | |||||||||||
| | | | | | | | | | | | | | | | | |
Total assets | $ | 7,228.20 | $ | (2,400.4 | ) | $ | 2,708.90 | $ | 3,660.20 | $ | 3,259.50 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Floor plan notes payable | $ | 1,812.60 | $ | — | $ | — | $ | 1,102.00 | $ | 710.6 | |||||||
Floor plan notes payable—non-trade | 920.5 | — | 86.8 | 398.1 | 435.6 | ||||||||||||
Accounts payable | 417.6 | — | 2.9 | 208.3 | 206.4 | ||||||||||||
Accrued expenses | 310.3 | (409.6 | ) | — | 123.3 | 596.6 | |||||||||||
Current portion of long-term debt | 36.6 | — | — | 4.6 | 32 | ||||||||||||
Liabilities held for sale | 132.7 | — | — | 105.9 | 26.8 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total current liabilities | 3,630.30 | (409.6 | ) | 89.7 | 1,942.20 | 2,008.00 | |||||||||||
Long-term debt | 1,316.00 | (247.0 | ) | 938 | 116.1 | 508.9 | |||||||||||
Deferred tax liabilities | 409.9 | — | — | 385.6 | 24.3 | ||||||||||||
Other long-term liabilities | 190.8 | — | — | 66.9 | 123.9 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total liabilities | 5,547.00 | (656.6 | ) | 1,027.70 | 2,510.80 | 2,665.10 | |||||||||||
Total equity | 1,681.20 | (1,743.8 | ) | 1,681.20 | 1,149.40 | 594.4 | |||||||||||
| | | | | | | | | | | | | | | | | |
Total liabilities and equity | $ | 7,228.20 | $ | (2,400.4 | ) | $ | 2,708.90 | $ | 3,660.20 | $ | 3,259.50 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
CONDENSED CONSOLIDATING BALANCE SHEET | |||||||||||||||||
December 31, 2013 | |||||||||||||||||
Total | Eliminations | Penske | Guarantor | Non-Guarantor | |||||||||||||
Company | Automotive | Subsidiaries | Subsidiaries | ||||||||||||||
Group | |||||||||||||||||
Cash and cash equivalents | $ | 50.3 | $ | — | $ | — | $ | 13.1 | $ | 37.2 | |||||||
Accounts receivable, net | 594.9 | (392.5 | ) | 392.5 | 376.5 | 218.4 | |||||||||||
Inventories | 2,501.40 | — | — | 1,402.30 | 1,099.10 | ||||||||||||
Other current assets | 87.7 | — | 2.9 | 42.9 | 41.9 | ||||||||||||
Assets held for sale | 253.8 | — | — | 202.1 | 51.7 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total current assets | 3,488.10 | (392.5 | ) | 395.4 | 2,036.90 | 1,448.30 | |||||||||||
Property and equipment, net | 1,119.50 | — | 4 | 688 | 427.5 | ||||||||||||
Intangible assets | 1,430.10 | — | — | 763 | 667.1 | ||||||||||||
Equity method investments | 346.9 | — | 295 | — | 51.9 | ||||||||||||
Other long-term assets | 30.9 | (1,686.0 | ) | 1,697.40 | 4.2 | 15.3 | |||||||||||
| | | | | | | | | | | | | | | | | |
Total assets | $ | 6,415.50 | $ | (2,078.5 | ) | $ | 2,391.80 | $ | 3,492.10 | $ | 2,610.10 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Floor plan notes payable | $ | 1,671.90 | $ | — | $ | — | $ | 997.9 | $ | 674 | |||||||
Floor plan notes payable—non-trade | 900.9 | — | 128.2 | 445 | 327.7 | ||||||||||||
Accounts payable | 369 | — | 3.4 | 138.1 | 227.5 | ||||||||||||
Accrued expenses | 260.9 | (392.5 | ) | 0.1 | 120.9 | 532.4 | |||||||||||
Current portion of long-term debt | 14.5 | — | — | 4 | 10.5 | ||||||||||||
Liabilities held for sale | 166.5 | — | — | 135.1 | 31.4 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total current liabilities | 3,383.70 | (392.5 | ) | 131.7 | 1,841.00 | 1,803.50 | |||||||||||
Long-term debt | 981.8 | (123.5 | ) | 738 | 106.9 | 260.4 | |||||||||||
Deferred tax liabilities | 361.4 | — | — | 337.7 | 23.7 | ||||||||||||
Other long-term liabilities | 166.5 | — | — | 68.7 | 97.8 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Total liabilities | 4,893.40 | (516.0 | ) | 869.7 | 2,354.30 | 2,185.40 | |||||||||||
Total equity | 1,522.10 | (1,562.5 | ) | 1,522.10 | 1,137.80 | 424.7 | |||||||||||
| | | | | | | | | | | | | | | | | |
Total liabilities and equity | $ | 6,415.50 | $ | (2,078.5 | ) | $ | 2,391.80 | $ | 3,492.10 | $ | 2,610.10 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
CONDENSED CONSOLIDATING STATEMENT OF INCOME | |||||||||||||||||
CONDENSED CONSOLIDATING STATEMENT OF INCOME | |||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||
Total | Eliminations | Penske | Guarantor | Non-Guarantor | |||||||||||||
Company | Automotive | Subsidiaries | Subsidiaries | ||||||||||||||
Group | |||||||||||||||||
Revenues | $ | 17,177.20 | $ | — | $ | — | $ | 9,589.00 | $ | 7,588.20 | |||||||
Cost of sales | 14,603.50 | — | — | 8,092.50 | 6,511.00 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Gross profit | 2,573.70 | — | — | 1,496.50 | 1,077.20 | ||||||||||||
Selling, general and administrative expenses | 1,999.60 | — | 28.7 | 1,133.90 | 837 | ||||||||||||
Depreciation | 70 | — | 1.3 | 37.8 | 30.9 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Operating income | 504.1 | — | (30.0 | ) | 324.8 | 209.3 | |||||||||||
Floor plan interest expense | (46.1 | ) | — | (10.4 | ) | (20.7 | ) | (15.0 | ) | ||||||||
Other interest expense | (52.8 | ) | — | (29.8 | ) | (5.0 | ) | (18.0 | ) | ||||||||
Equity in earnings of affiliates | 40.8 | — | 36.5 | — | 4.3 | ||||||||||||
Gain on investment | 16 | — | 16 | — | — | ||||||||||||
Equity in earnings of subsidiaries | — | (473.2 | ) | 473.2 | — | — | |||||||||||
| | | | | | | | | | | | | | | | | |
Income from continuing operations before income taxes | 462 | (473.2 | ) | 455.5 | 299.1 | 180.6 | |||||||||||
Income taxes | (153.2 | ) | 157.9 | (152.0 | ) | (110.3 | ) | (48.8 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Income from continuing operations | 308.8 | (315.3 | ) | 303.5 | 188.8 | 131.8 | |||||||||||
Loss from discontinued operations, net of tax | (18.7 | ) | 16.8 | (16.8 | ) | (2.4 | ) | (16.3 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Net income | 290.1 | (298.5 | ) | 286.7 | 186.4 | 115.5 | |||||||||||
Other comprehensive income (loss), net of tax | (66.2 | ) | 62.5 | (66.2 | ) | 4.7 | (67.2 | ) | |||||||||
| | | | | | | | | | | | | | | | | |
Comprehensive income | 223.9 | (236.0 | ) | 220.5 | 191.1 | 48.3 | |||||||||||
| | | | | | | | | | | | | | | | | |
Less: Comprehensive income attributable to non-controlling interests | 2.1 | 1.4 | (1.4 | ) | — | 2.1 | |||||||||||
| | | | | | | | | | | | | | | | | |
Comprehensive income attributable to Penske Automotive Group common stockholders | $ | 221.8 | $ | (237.4 | ) | $ | 221.9 | $ | 191.1 | $ | 46.2 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
CONDENSED CONSOLIDATING STATEMENT OF INCOME | |||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||
Total | Eliminations | Penske | Guarantor | Non-Guarantor | |||||||||||||
Company | Automotive | Subsidiaries | Subsidiaries | ||||||||||||||
Group | |||||||||||||||||
Revenues | $ | 14,443.90 | $ | — | $ | — | $ | 8,534.20 | $ | 5,909.70 | |||||||
Cost of sales | 12,246.90 | — | — | 7,178.50 | 5,068.40 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Gross profit | 2,197.00 | — | — | 1,355.70 | 841.3 | ||||||||||||
Selling, general and administrative expenses | 1,705.60 | — | 21.4 | 1,025.90 | 658.3 | ||||||||||||
Depreciation | 59.6 | — | 1.8 | 33.8 | 24 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Operating income | 431.8 | — | (23.2 | ) | 296 | 159 | |||||||||||
Floor plan interest expense | (43.1 | ) | — | (9.6 | ) | (19.5 | ) | (14.0 | ) | ||||||||
Other interest expense | (45.2 | ) | — | (26.1 | ) | (1.9 | ) | (17.2 | ) | ||||||||
Equity in earnings of affiliates | 30.7 | — | 25.5 | — | 5.2 | ||||||||||||
Equity in earnings of subsidiaries | — | (406.1 | ) | 406.1 | — | — | |||||||||||
| | | | | | | | | | | | | | | | | |
Income from continuing operations before income taxes | 374.2 | (406.1 | ) | 372.7 | 274.6 | 133 | |||||||||||
Income taxes | (123.9 | ) | 135 | (123.9 | ) | (100.4 | ) | (34.6 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Income from continuing operations | 250.3 | (271.1 | ) | 248.8 | 174.2 | 98.4 | |||||||||||
Loss from discontinued operations, net of tax | (4.6 | ) | 4.6 | (4.6 | ) | 0.9 | (5.5 | ) | |||||||||
| | | | | | | | | | | | | | | | | |
Net income | 245.7 | (266.5 | ) | 244.2 | 175.1 | 92.9 | |||||||||||
Other comprehensive income (loss), net of tax | 18.9 | (9.8 | ) | 18.9 | 4 | 5.8 | |||||||||||
| | | | | | | | | | | | | | | | | |
Comprehensive income | 264.6 | (276.3 | ) | 263.1 | 179.1 | 98.7 | |||||||||||
| | | | | | | | | | | | | | | | | |
Less: Comprehensive income attributable to non-controlling interests | 2 | (0.5 | ) | 0.5 | — | 2 | |||||||||||
| | | | | | | | | | | | | | | | | |
Comprehensive income attributable to Penske Automotive Group common stockholders | $ | 262.6 | $ | (275.8 | ) | $ | 262.6 | $ | 179.1 | $ | 96.7 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
CONDENSED CONSOLIDATING STATEMENT OF INCOME | |||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||
Total | Eliminations | Penske | Guarantor | Non-Guarantor | |||||||||||||
Company | Automotive | Subsidiaries | Subsidiaries | ||||||||||||||
Group | |||||||||||||||||
Revenues | $ | 12,902.60 | $ | — | $ | — | $ | 7,630.70 | $ | 5,271.90 | |||||||
Cost of sales | 10,927.00 | — | — | 6,424.20 | 4,502.80 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Gross profit | 1,975.60 | — | — | 1,206.50 | 769.1 | ||||||||||||
Selling, general and administrative expenses | 1,558.30 | — | 19.4 | 930.8 | 608.1 | ||||||||||||
Depreciation | 52.2 | — | 1.3 | 28 | 22.9 | ||||||||||||
| | | | | | | | | | | | | | | | | |
Operating income | 365.1 | — | (20.7 | ) | 247.7 | 138.1 | |||||||||||
Floor plan interest expense | (38.0 | ) | — | (8.6 | ) | (16.4 | ) | (13.0 | ) | ||||||||
Other interest expense | (46.1 | ) | — | (29.5 | ) | — | (16.6 | ) | |||||||||
Equity in earnings of affiliates | 27.6 | — | 24 | — | 3.6 | ||||||||||||
Debt redemption costs | (17.8 | ) | — | (17.8 | ) | — | — | ||||||||||
Equity in earnings of subsidiaries | — | (341.8 | ) | 341.8 | — | — | |||||||||||
| | | | | | | | | | | | | | | | | |
Income from continuing operations before income taxes | 290.8 | (341.8 | ) | 289.2 | 231.3 | 112.1 | |||||||||||
Income taxes | (94.6 | ) | 111.9 | (94.6 | ) | (87.7 | ) | (24.2 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Income from continuing operations | 196.2 | (229.9 | ) | 194.6 | 143.6 | 87.9 | |||||||||||
Loss from discontinued operations, net of tax | (9.0 | ) | 9 | (9.0 | ) | (0.5 | ) | (8.5 | ) | ||||||||
| | | | | | | | | | | | | | | | | |
Net income | 187.2 | (220.9 | ) | 185.6 | 143.1 | 79.4 | |||||||||||
Other comprehensive income (loss), net of tax | 17.6 | (16.6 | ) | 17.6 | 1 | 15.6 | |||||||||||
| | | | | | | | | | | | | | | | | |
Comprehensive income | 204.8 | (237.5 | ) | 203.2 | 144.1 | 95 | |||||||||||
| | | | | | | | | | | | | | | | | |
Less: Comprehensive income attributable to non-controlling interests | 1.9 | (0.3 | ) | 0.3 | — | 1.9 | |||||||||||
| | | | | | | | | | | | | | | | | |
Comprehensive income attributable to Penske Automotive Group common stockholders | $ | 202.9 | $ | (237.2 | ) | $ | 202.9 | $ | 144.1 | $ | 93.1 | ||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS | |||||||||||||||||
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS | |||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||
Total | Penske | Guarantor | Non-Guarantor | ||||||||||||||
Company | Automotive | Subsidiaries | Subsidiaries | ||||||||||||||
Group | |||||||||||||||||
Net cash provided by continuing operating activities | $ | 366.3 | $ | (70.7 | ) | $ | 209.2 | $ | 227.8 | ||||||||
| | | | | | | | | | | | | | ||||
Investing activities: | |||||||||||||||||
Purchase of equipment and improvements | (174.8 | ) | (1.7 | ) | (101.2 | ) | (71.9 | ) | |||||||||
Acquisitions, net | (355.0 | ) | — | (175.3 | ) | (179.7 | ) | ||||||||||
Other | (22.6 | ) | 4.2 | — | (26.8 | ) | |||||||||||
| | | | | | | | | | | | | | ||||
Net cash used in continuing investing activities | (552.4 | ) | 2.5 | (276.5 | ) | (278.4 | ) | ||||||||||
| | | | | | | | | | | | | | ||||
Financing activities: | |||||||||||||||||
Issuance of 5.375% senior subordinated notes | 300 | 300 | — | — | |||||||||||||
Net (repayments) borrowings of long-term debt | (71.3 | ) | (100.0 | ) | 9 | 19.7 | |||||||||||
Net borrowings (repayments) of floor plan notes payable—non-trade | 19.6 | (41.4 | ) | 35.9 | 25.1 | ||||||||||||
Payment of deferred financing fees | (4.4 | ) | (4.4 | ) | — | — | |||||||||||
Repurchases of common stock | (15.5 | ) | (15.5 | ) | — | — | |||||||||||
Dividends | (70.5 | ) | (70.5 | ) | — | — | |||||||||||
Other | 0.3 | — | — | 0.3 | |||||||||||||
Distributions from (to) parent | — | — | 5.5 | (5.5 | ) | ||||||||||||
| | | | | | | | | | | | | | ||||
Net cash provided by continuing financing activities | 158.2 | 68.2 | 50.4 | 39.6 | |||||||||||||
Net cash provided by discontinued operations | 15.2 | — | 3.8 | 11.4 | |||||||||||||
Effect of exchange rate changes on cash and cash equivalents | (1.3 | ) | — | — | (1.3 | ) | |||||||||||
| | | | | | | | | | | | | | ||||
Net change in cash and cash equivalents | (14.0 | ) | — | (13.1 | ) | (0.9 | ) | ||||||||||
Cash and cash equivalents, beginning of period | 50.3 | — | 13.1 | 37.2 | |||||||||||||
| | | | | | | | | | | | | | ||||
Cash and cash equivalents, end of period | $ | 36.3 | $ | — | $ | — | $ | 36.3 | |||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS | |||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||
Total | Penske | Guarantor | Non-Guarantor | ||||||||||||||
Company | Automotive | Subsidiaries | Subsidiaries | ||||||||||||||
Group | |||||||||||||||||
Net cash provided by continuing operating activities | $ | 301 | $ | 46.5 | $ | 17.9 | $ | 236.6 | |||||||||
| | | | | | | | | | | | | | ||||
Investing activities: | |||||||||||||||||
Purchase of equipment and improvements | (174.7 | ) | (1.3 | ) | (116.7 | ) | (56.7 | ) | |||||||||
Acquisitions, net | (314.0 | ) | — | (103.4 | ) | (210.6 | ) | ||||||||||
Other | (2.6 | ) | (17.5 | ) | 10.7 | 4.2 | |||||||||||
| | | | | | | | | | | | | | ||||
Net cash used in continuing investing activities | (491.3 | ) | (18.8 | ) | (209.4 | ) | (263.1 | ) | |||||||||
| | | | | | | | | | | | | | ||||
Financing activities: | |||||||||||||||||
Net borrowings of long-term debt | 81.1 | 28 | 2.7 | 50.4 | |||||||||||||
Net borrowings (repayments) of floor plan notes payable—non-trade | 191.2 | 16.1 | 181.1 | (6.0 | ) | ||||||||||||
Repurchases of common stock | (15.8 | ) | (15.8 | ) | — | — | |||||||||||
Dividends | (56.0 | ) | (56.0 | ) | — | — | |||||||||||
Other | 0.2 | — | — | 0.2 | |||||||||||||
Distributions from (to) parent | — | — | 0.9 | (0.9 | ) | ||||||||||||
| | | | | | | | | | | | | | ||||
Net cash provided by (used in) continuing financing activities | 200.7 | (27.7 | ) | 184.7 | 43.7 | ||||||||||||
Net cash (used in) provided by discontinued operations | (4.0 | ) | — | (14.9 | ) | 10.9 | |||||||||||
| | | | | | | | | | | | | | ||||
Net change in cash and cash equivalents | 6.4 | — | (21.7 | ) | 28.1 | ||||||||||||
Cash and cash equivalents, beginning of period | 43.9 | — | 34.8 | 9.1 | |||||||||||||
| | | | | | | | | | | | | | ||||
Cash and cash equivalents, end of period | $ | 50.3 | $ | — | $ | 13.1 | $ | 37.2 | |||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS | |||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||
Total | Penske | Guarantor | Non-Guarantor | ||||||||||||||
Company | Automotive | Subsidiaries | Subsidiaries | ||||||||||||||
Group | |||||||||||||||||
Net cash provided by continuing operating activities | $ | 325.7 | $ | 45.5 | $ | 125.8 | $ | 154.4 | |||||||||
| | | | | | | | | | | | | | ||||
Investing activities: | |||||||||||||||||
Purchase of equipment and improvements | (150.9 | ) | (1.1 | ) | (100.4 | ) | (49.4 | ) | |||||||||
Proceeds from sale-leaseback transactions | 1.6 | — | — | 1.6 | |||||||||||||
Acquisitions, net | (233.3 | ) | — | (98.9 | ) | (134.4 | ) | ||||||||||
Other | 8.8 | (3.3 | ) | 4.8 | 7.3 | ||||||||||||
| | | | | | | | | | | | | | ||||
Net cash used in continuing investing activities | (373.8 | ) | (4.4 | ) | (194.5 | ) | (174.9 | ) | |||||||||
| | | | | | | | | | | | | | ||||
Financing activities: | |||||||||||||||||
Issuance of 5.75% senior subordinated notes | 550 | 550 | — | — | |||||||||||||
Repurchase of 7.75% senior subordinated notes | (390.8 | ) | (390.8 | ) | — | — | |||||||||||
Repurchase of 3.5% senior subordinated convertible notes | (62.7 | ) | (62.7 | ) | — | — | |||||||||||
Net (repayments) borrowings of long-term debt | (51.7 | ) | (98.9 | ) | 27.7 | 19.5 | |||||||||||
Net borrowings of floor plan notes payable—non-trade | 70.2 | 21.2 | 41 | 8 | |||||||||||||
Repurchases of common stock | (9.8 | ) | (9.8 | ) | — | — | |||||||||||
Dividends | (41.5 | ) | (41.5 | ) | — | — | |||||||||||
Payment of deferred financing fees | (8.6 | ) | (8.6 | ) | — | — | |||||||||||
Other | (1.1 | ) | — | — | (1.1 | ) | |||||||||||
Distributions from (to) parent | — | — | 5.2 | (5.2 | ) | ||||||||||||
| | | | | | | | | | | | | | ||||
Net cash provided by (used in) continuing financing activities | 54 | (41.1 | ) | 73.9 | 21.2 | ||||||||||||
Net cash provided by discontinued operations | 11.2 | — | 3.8 | 7.4 | |||||||||||||
| | | | | | | | | | | | | | ||||
Net change in cash and cash equivalents | 17.1 | — | 9 | 8.1 | |||||||||||||
Cash and cash equivalents, beginning of period | 26.8 | — | 25.8 | 1 | |||||||||||||
| | | | | | | | | | | | | | ||||
Cash and cash equivalents, end of period | $ | 43.9 | $ | — | $ | 34.8 | $ | 9.1 | |||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Organization_and_Summary_of_Si3
Organization and Summary of Significant Accounting Policies (Details) | 3 Months Ended | 12 Months Ended | 0 Months Ended | 3 Months Ended | 12 Months Ended | 2 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | |||||||||||||||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Oct. 01, 2014 | Oct. 01, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Sep. 30, 2014 | Feb. 28, 2015 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Bremen, Germany | MTU Detroit Diesel Australia | MTU Detroit Diesel Australia | MTU Detroit Diesel Australia | Commercial Vehicle Distribution | Commercial Vehicle Distribution | Commercial Vehicle Distribution | Penske Truck Leasing Co., L.P. | Retail Automotive Dealership | Retail Commercial Vehicle Dealership | Retail Commercial Vehicle Dealership | Retail Commercial Vehicle Dealership | Retail Commercial Vehicle Dealership | Commercial Vehicle Distribution And Other Operations | BMW,MINI | BMW,MINI | Audi/Volkswagen/Porsche/Bentley | Toyota/Lexus/Scion | Mercedes-Benz/Sprinter/smart | |
item | item | USD ($) | AUD | USD ($) | item | Revenues | Gross Profit Member | USD ($) | USD ($) | USD ($) | Subsequent event | USD ($) | item | Revenues | Revenues | Revenues | Revenues | |||||||||||||
item | item | |||||||||||||||||||||||||||||
Organization and Summary of Significant Accounting Policies | ||||||||||||||||||||||||||||||
Total revenues | $4,410.10 | $4,381.40 | $4,370.50 | $4,015.20 | $3,793.30 | $3,724.60 | $3,599.20 | $3,326.80 | $17,177.20 | $14,443.90 | $12,902.60 | $52.50 | $16,600 | $125.60 | $448.90 | |||||||||||||||
Receivables from manufacturers | 169.9 | 145.8 | 169.9 | 145.8 | ||||||||||||||||||||||||||
Significant Accounting Policies | ||||||||||||||||||||||||||||||
Total number of owned and operated franchises | 327 | |||||||||||||||||||||||||||||
Number of owned and operated franchises in US | 179 | |||||||||||||||||||||||||||||
Number of owned and operated franchises outside US | 148 | |||||||||||||||||||||||||||||
Percentage of total | 2.30% | 2.40% | 27.00% | 22.00% | 15.00% | 11.00% | ||||||||||||||||||||||||
Gain on investment | 16 | 16 | ||||||||||||||||||||||||||||
Number of acquired franchises | 2 | |||||||||||||||||||||||||||||
Number of franchises awarded to the reporting entity | 6 | |||||||||||||||||||||||||||||
Number of franchises disposed of | 7 | 4 | ||||||||||||||||||||||||||||
Sales to external customer | 4,410.10 | 4,381.40 | 4,370.50 | 4,015.20 | 3,793.30 | 3,724.60 | 3,599.20 | 3,326.80 | 17,177.20 | 14,443.90 | 12,902.60 | 52.5 | 16,600 | 125.6 | 448.9 | |||||||||||||||
Number of operating franchises | 16 | 8 | ||||||||||||||||||||||||||||
Minimum number of dealership locations | 70 | |||||||||||||||||||||||||||||
Limited partnership interest (as a percent) | 9.00% | |||||||||||||||||||||||||||||
Purchase price | $115 | 131.5 | $75.30 | |||||||||||||||||||||||||||
Ownership interest (as a percent) | 91.00% | 91.00% | 50.00% | |||||||||||||||||||||||||||
Number of full service retail locations operated | 10 | |||||||||||||||||||||||||||||
Number of full service retail locations acquired | 2 | |||||||||||||||||||||||||||||
Number of retail dealerships owned by the reporting entity | 3 | |||||||||||||||||||||||||||||
Ownership percentage of Equity Method Investment | 32.00% |
Organization_and_Summary_of_Si4
Organization and Summary of Significant Accounting Policies (Details 2) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
item | |||
Significant Accounting Policies | |||
Interest rate (as a percent) | 3.50% | ||
Contracts in Transit | |||
Contracts in transit, included in accounts receivable | $264.80 | $250.50 | |
Impairment Testing | |||
Number of reportable Segments | 2 | ||
Number of geographical reporting units for the purpose of goodwill impairment testing | 4 | ||
Investments | |||
Net book value of investments | 352.8 | 346.9 | |
Fair Value of Financial Instruments | |||
Debt instrument, Carrying Value | 1,352.60 | 996.3 | |
Minimum | |||
Significant Accounting Policies | |||
Ownership interest in the voting stock of the affiliate (as a percent) | 20.00% | ||
Minimum | Property and equipment other than leasehold improvements | |||
Property and Equipment | |||
Useful life of property and equipment | 3 years | ||
Maximum | |||
Significant Accounting Policies | |||
Ownership interest in the voting stock of the affiliate (as a percent) | 50.00% | ||
Maximum | Property and equipment other than leasehold improvements | |||
Property and Equipment | |||
Useful life of property and equipment | 15 years | ||
Maximum | Leasehold improvements and equipment under capital lease | |||
Property and Equipment | |||
Useful life of property and equipment | 40 years | ||
5.75% senior subordinated notes due 2022 | |||
Significant Accounting Policies | |||
Interest rate (as a percent) | 5.75% | 5.75% | 5.75% |
Fair Value of Financial Instruments | |||
Debt instrument, Carrying Value | 550 | 550 | |
5.75% senior subordinated notes due 2022 | Level 2 | |||
Fair Value of Financial Instruments | |||
Debt instrument, Carrying Value | 550 | 550 | |
Debt instrument, Fair Value | 558.4 | 565.1 | |
5.75% senior subordinated notes due 2022 | Penske Automotive Group | |||
Significant Accounting Policies | |||
Interest rate (as a percent) | 5.75% | 5.75% | 5.75% |
5.375% senior subordinated notes due 2024 | |||
Significant Accounting Policies | |||
Interest rate (as a percent) | 5.38% | ||
Fair Value of Financial Instruments | |||
Debt instrument, Carrying Value | 300 | ||
5.375% senior subordinated notes due 2024 | Level 2 | |||
Fair Value of Financial Instruments | |||
Debt instrument, Carrying Value | 300 | ||
Debt instrument, Fair Value | 306 | ||
5.375% senior subordinated notes due 2024 | Penske Automotive Group | |||
Significant Accounting Policies | |||
Interest rate (as a percent) | 5.38% | ||
Mortgage facilities | |||
Fair Value of Financial Instruments | |||
Debt instrument, Carrying Value | 169.7 | 118.6 | |
Mortgage facilities | Level 2 | |||
Fair Value of Financial Instruments | |||
Debt instrument, Carrying Value | 169.7 | 118.6 | |
Debt instrument, Fair Value | $171.60 | $117 |
Organization_and_Summary_of_Si5
Organization and Summary of Significant Accounting Policies (Details 3) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Finance and Insurance Sales | |||
Aggregate reserves relating to chargeback activity | $25.80 | $23.30 | |
Defined Contribution Plans | |||
Expense incurred relating to defined contribution plans | 17.7 | 15.1 | 13.7 |
Advertising | |||
Net advertising costs | 93.3 | 80.8 | 79.1 |
Reimbursement of advertising expense | 14.3 | 13.1 | 11.9 |
Self Insurance | |||
Aggregate reserves relating to retained risk | $24.60 | $21.10 | |
Earnings Per Share | |||
Weighted average number of common shares outstanding | 90,318,839 | 90,273,747 | 90,318,315 |
Effect of non-participatory equity compensation (in shares) | 36,000 | 56,874 | 24,000 |
Weighted average number of common shares outstanding, including effect of dilutive securities | 90,354,839 | 90,330,621 | 90,342,315 |
Equity_Method_Investees_Detail
Equity Method Investees (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Equity Method Investment | |||
Equity method investments | $352.80 | $346.90 | |
Condensed income statement information | |||
Revenues | 6,620.10 | 6,177 | 6,043.40 |
Gross margin | 2,181.40 | 2,043.50 | 1,897.30 |
Net income | 357.2 | 304 | 284.2 |
Equity in net income of affiliates | 40.8 | 30.7 | 27.6 |
Condensed balance sheet information | |||
Current assets | 1,242 | 1,194.20 | |
Noncurrent assets | 9,230.80 | 8,377.80 | |
Total assets | 10,472.80 | 9,572 | |
Current liabilities | 958.1 | 888.8 | |
Noncurrent liabilities | 7,276.80 | 6,517.50 | |
Equity | 2,237.90 | 2,165.70 | |
Total liabilities and equity | 10,472.80 | 9,572 | |
Jacobs Group | |||
Equity Method Investment | |||
Ownership percentage of Equity Method Investment | 50.00% | ||
The Nix Group | |||
Equity Method Investment | |||
Ownership percentage of Equity Method Investment | 50.00% | ||
Ibericar Keldinich SL | |||
Equity Method Investment | |||
Ownership percentage of Equity Method Investment | 50.00% | ||
Penske Wynn Ferrari Maserati | |||
Equity Method Investment | |||
Ownership percentage of Equity Method Investment | 50.00% | ||
Max Cycles | |||
Equity Method Investment | |||
Ownership percentage of Equity Method Investment | 50.00% | ||
Penske Commercial Leasing Australia | |||
Equity Method Investment | |||
Ownership percentage of Equity Method Investment | 45.00% | ||
Penske Vehicle Services | |||
Equity Method Investment | |||
Ownership percentage of Equity Method Investment | 31.00% | ||
National Powersport Auctions | |||
Equity Method Investment | |||
Ownership percentage of Equity Method Investment | 7.00% | ||
Penske Truck Leasing Co., L.P. ("PTL") | |||
Equity Method Investment | |||
Equity method investments | 279.5 | 268.8 | |
Limited partnership interest (as a percent) | 9.00% | ||
Jacobs Group, The Nix Group, Ibericar Keldinich SL, Penske Wynn Ferrari Maserati, Max Cycles, Penske Commercial Leasing Australia, QEK Global Solutions, and National Powersport Auctions | |||
Equity Method Investment | |||
Equity method investments | $73.30 | $78.10 |
Business_Combinations_Details
Business Combinations (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
item | item | |
Business Combinations | ||
Revenue from acquisition in 2014 | 351.5 | |
Pre-tax income from acquisition in 2014 | 5.7 | |
Gain on investment | 16 | |
Business combinations | ||
Number of acquired franchises | 2 | |
Automotive retail franchise | ||
Business combinations | ||
Number of acquired franchises | 2 | 9 |
Business_Combinations_Details_
Business Combinations (Details 2) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Summary of the aggregate consideration paid and the aggregate amounts of the assets acquired and liabilities assumed | ||
Accounts receivable | $66.20 | $20.10 |
Inventory | 197.9 | 161.5 |
Other current assets | 5.9 | 2.6 |
Property and equipment | 95.2 | 14 |
Indefinite-lived intangibles | 266.4 | 187.6 |
Other non-current assets | 10.7 | 9 |
Current liabilities | -83.4 | -79.5 |
Non-current liabilities | -12.1 | -1.3 |
Total | 546.8 | 314 |
Seller financed/assumed debt | -134.4 | |
Fair value of previously held interest in PCV US | -47.4 | |
Fair value of PCV US noncontrolling interest | -10 | |
Total cash used in acquisitions | $355 | $314 |
Business_Combinations_Details_1
Business Combinations (Details 3) (USD $) | 12 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Summary of unaudited consolidated pro forma results of operations | ||
Revenues | $17,964.50 | $16,687.50 |
Income from continuing operations | 311.1 | 286.2 |
Net income | $292.40 | $281.60 |
Income from continuing operations per diluted common share (in dollars per share) | $3.44 | $3.17 |
Net income per diluted common share (in dollars per share) | $3.23 | $3.12 |
Discontinued_Operations_and_Di2
Discontinued Operations and Divestitures (Details) (USD $) | 12 Months Ended | 3 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2015 |
Combined financial information regarding entities accounted for as discontinued operations | ||||
Revenues | $261.70 | $524.80 | $690.50 | |
Pre-tax loss | -35.6 | -6.2 | -18.2 | |
Gain on disposal | 14.8 | 0.8 | 8.1 | |
Balance Sheet information regarding entities accounted for as discontinued operations | ||||
Inventory | 34.7 | 72.6 | ||
Other assets | 151.4 | 181.2 | ||
Total assets | 186.1 | 253.8 | ||
Floor plan notes payable (including non-trade) | 27.9 | 57.5 | ||
Other liabilities | 104.8 | 109 | ||
Total liabilities | 132.7 | 166.5 | ||
Hertz car rental franchise | Subsequent event | ||||
Combined financial information regarding entities accounted for as discontinued operations | ||||
Proceeds from sale of business | $17.80 |
Inventories_Details
Inventories (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Inventories | ||
New vehicles | $1,792.50 | $1,696.70 |
Used vehicles | 639.9 | 582.1 |
Commercial vehicles and parts | 283.3 | 126.9 |
Parts, accessories and other | 103.5 | 95.7 |
Total inventories | $2,819.20 | $2,501.40 |
Inventories_Details_2
Inventories (Details 2) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Inventories | |||
Interest credits and advertising assistance | $39.90 | $34.10 | $30.50 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Property and equipment | ||
Total | $1,763.10 | $1,529.60 |
Less: Accumulated depreciation | -434.3 | -410.1 |
Property and equipment, net | 1,328.80 | 1,119.50 |
Buildings and leasehold improvements | ||
Property and equipment | ||
Total | 1,225.40 | 1,069.80 |
Capitalized interest included in buildings and leasehold improvements | 27 | 27 |
Furniture, fixtures and equipment | ||
Property and equipment | ||
Total | $537.70 | $459.80 |
Intangible_Assets_Details
Intangible Assets (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2011 |
Intangible Assets | |||
Goodwill, Accumulated impairment loss | $606.30 | ||
Other indefinite-lived intangible assets, Accumulated impairment loss | 37.1 | ||
Other Indefinite-lived Intangible Assets | 386.2 | 295.2 | |
Summary of the changes in the carrying amount of goodwill and other indefinite-lived intangible assets | |||
Goodwill, Beginning Balance | 1,134.90 | 961.5 | |
Goodwill, Additions | 165.4 | 165.5 | |
Goodwill, Deconsolidation of Italian investment | -7.2 | ||
Goodwill, Reconsolidation of Italian investment | 7.4 | ||
Goodwill, Foreign currency translation | -34 | 7.7 | |
Goodwill, Ending Balance | 1,266.30 | 1,134.90 | |
Other indefinite-lived intangible assets, Beginning Balance | 295.2 | 271.5 | |
Other indefinite-lived intangible assets, Additions | 101 | 22.1 | |
Other indefinite-lived intangible assets, Deconsolidation of Italian investment, Deconsolidation of Italian investment | -2.9 | ||
Other indefinite-lived intangible assets, Reconsolidation of Italian investment | 3.1 | ||
Other indefinite-lived intangible assets, Foreign currency translation | -10 | 1.4 | |
Other indefinite-lived intangible assets, Ending Balance | $386.20 | $295.20 |
Intangible_Assets_Details_2
Intangible Assets (Details 2) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Summary of the changes in the carrying amount of goodwill by reportable segment | |||
Goodwill, Beginning Balance | $1,134.90 | $961.50 | |
Goodwill, Additions | 165.4 | 165.5 | |
Goodwill, Deconsolidation of Italian investment | -7.2 | ||
Goodwill, Reconsolidation of Italian investment | 7.4 | ||
Goodwill, Foreign currency translation | -34 | 7.7 | |
Goodwill, Ending Balance | 1,266.30 | 1,134.90 | 961.5 |
Impairment of intangible assets | 0 | 0 | 0 |
Retail Automotive | |||
Summary of the changes in the carrying amount of goodwill by reportable segment | |||
Goodwill, Beginning Balance | 1,020.50 | 961.5 | |
Goodwill, Additions | 53.7 | 49.6 | |
Goodwill, Deconsolidation of Italian investment | -7.2 | ||
Goodwill, Reconsolidation of Italian investment | 7.4 | ||
Goodwill, Foreign currency translation | -24.7 | 9.2 | |
Goodwill, Ending Balance | 1,049.50 | 1,020.50 | |
Other | |||
Summary of the changes in the carrying amount of goodwill by reportable segment | |||
Goodwill, Beginning Balance | 114.4 | ||
Goodwill, Additions | 111.7 | 115.9 | |
Goodwill, Foreign currency translation | -9.3 | -1.5 | |
Goodwill, Ending Balance | $216.80 | $114.40 |
Vehicle_Financing_Details
Vehicle Financing (Details) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Vehicle Financing | |||
Maturity period of floor plan arrangements outside the U.S. if not payable on demand | 90 days | ||
Weighted average interest rate on floor plan borrowings (as a percent) | 1.70% | 1.90% | 2.10% |
LongTerm_Debt_Details
Long-Term Debt (Details) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 31, 2012 | Nov. 30, 2014 | Dec. 31, 2014 | Apr. 02, 2014 | Dec. 31, 2013 | Apr. 02, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Apr. 02, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Nov. 30, 2014 | Nov. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 31, 2012 | Aug. 31, 2012 | Dec. 31, 2014 | Oct. 31, 2014 | Oct. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 |
In Millions, unless otherwise specified | USD ($) | USD ($) | Debt redemption prior to October 1, 2015 | Debt redemption prior to December 1, 2017 | US Credit Agreement Revolving Credit Line | US Credit Agreement Revolving Credit Line | US Credit Agreement Revolving Credit Line | US Credit Agreement Revolving Credit Line | US Credit Agreement Term Loan | US Credit Agreement Term Loan | US Credit Agreement Term Loan | UK Credit Agreement Revolving Credit Line | UK Credit Agreement Revolving Credit Line | UK Credit Agreement Revolving Credit Line | UK Credit Agreement Revolving Credit Line | UK Credit Agreement Revolving Credit Line | UK Credit Agreement Revolving Credit Line | U.K. Agreement Term Loan | U.K. Agreement Term Loan | U.K. Agreement Term Loan | U.K. Agreement Term Loan | U.K. Agreement Term Loan | U.K. Agreement Term Loan | UK Credit Agreement Overdraft Line of Credit | UK Credit Agreement Overdraft Line of Credit | 5.375% senior subordinated notes due 2024 | 5.375% senior subordinated notes due 2024 | 5.375% senior subordinated notes due 2024 | 5.75% senior subordinated notes due 2022 | 5.75% senior subordinated notes due 2022 | 5.75% senior subordinated notes due 2022 | 5.75% senior subordinated notes due 2022 | 5.75% senior subordinated notes due 2022 | U.S. Commercial Vehicle Capital Loan | U.S. Commercial Vehicle Capital Loan | U.S. Commercial Vehicle Capital Loan | Australia working capital loan agreement | Australia working capital loan agreement | Mortgage facilities | Mortgage facilities | Other Debt Securities | Other Debt Securities | US Credit Agreement Letters of Credit | |
USD ($) | USD ($) | USD ($) | LIBOR portion | USD ($) | USD ($) | LIBOR portion | USD ($) | GBP (£) | USD ($) | LIBOR portion | Minimum | Maximum | GBP (£) | USD ($) | USD ($) | GBP (£) | Minimum | Maximum | USD ($) | Bank of England Base Rate | USD ($) | USD ($) | Maximum | USD ($) | USD ($) | USD ($) | Maximum | USD ($) | LIBOR portion | Maximum | USD ($) | AUD | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |||||||
LIBOR portion | LIBOR portion | Debt redemption prior to December 1, 2017 | Debt redemption prior to October 1, 2015 | |||||||||||||||||||||||||||||||||||||||||
Long Term Debt | ||||||||||||||||||||||||||||||||||||||||||||
Total long-term debt | $1,352.60 | $996.30 | $90 | $88 | $98 | $121.50 | $106 | $18.70 | $29.80 | $5.70 | $300 | $550 | $550 | $60.50 | $169.70 | $118.60 | $38.50 | $3.90 | ||||||||||||||||||||||||||
Less: current portion | -36.6 | -14.5 | ||||||||||||||||||||||||||||||||||||||||||
Net long-term debt | 1,316 | 981.8 | ||||||||||||||||||||||||||||||||||||||||||
Interest rate (as a percent) | 3.50% | 5.38% | 5.75% | 5.75% | 5.75% | |||||||||||||||||||||||||||||||||||||||
Initial borrowing capacity | 375 | |||||||||||||||||||||||||||||||||||||||||||
Scheduled maturities of long-term debt for each of the next five years and thereafter | ||||||||||||||||||||||||||||||||||||||||||||
2015 | 36.6 | |||||||||||||||||||||||||||||||||||||||||||
2016 | 21.1 | |||||||||||||||||||||||||||||||||||||||||||
2017 | 190.9 | |||||||||||||||||||||||||||||||||||||||||||
2018 | 8 | |||||||||||||||||||||||||||||||||||||||||||
2019 | 147.3 | |||||||||||||||||||||||||||||||||||||||||||
2020 and thereafter | 948.7 | |||||||||||||||||||||||||||||||||||||||||||
Total long-term debt | 1,352.60 | 996.3 | 90 | 88 | 98 | 121.5 | 106 | 18.7 | 29.8 | 5.7 | 300 | 550 | 550 | 60.5 | 169.7 | 118.6 | 38.5 | 3.9 | ||||||||||||||||||||||||||
Maximum credit available | 450 | 100 | 30 | 22.9 | 28 | |||||||||||||||||||||||||||||||||||||||
Debt issued | 300 | 550 | ||||||||||||||||||||||||||||||||||||||||||
Base rate of interest on loans | LIBOR | LIBOR | LIBOR | Bank of England Base Rate | LIBOR | 30-day Bill Rate | 30-day Bill Rate | |||||||||||||||||||||||||||||||||||||
Line of credit basis spread on variable rate before amendment of agreement(as a percent) | 2.25% | |||||||||||||||||||||||||||||||||||||||||||
Line of credit basis spread on variable rate (as a percent) | 2.00% | 2.00% | 1.35% | 3.00% | 1.75% | 3.50% | 2.35% | 2.35% | ||||||||||||||||||||||||||||||||||||
Annual principal payment period | 120 days | |||||||||||||||||||||||||||||||||||||||||||
Incremental interest rate for uncollateralized borrowings in excess of maximum limit (as a percent) | 1.50% | |||||||||||||||||||||||||||||||||||||||||||
Letters of credit outstanding | 23.5 | 0 | ||||||||||||||||||||||||||||||||||||||||||
Balance outstanding under credit agreement | 0 | 88 | 127.2 | 81.6 | 12 | 18.7 | 60.5 | 0 | 169.7 | |||||||||||||||||||||||||||||||||||
Repayment of debt | 10 | 12 | ||||||||||||||||||||||||||||||||||||||||||
Repayment of term loan, quarterly installments | 1.5 | |||||||||||||||||||||||||||||||||||||||||||
Frequency of principal repayments | Quarterly | |||||||||||||||||||||||||||||||||||||||||||
Final payment due December 31, 2015 | £ 7.5 | |||||||||||||||||||||||||||||||||||||||||||
Low end of interest rate, depending on UK subsidiaries ratios (as a percent) | 2.68% | |||||||||||||||||||||||||||||||||||||||||||
High end of interest rate, depending on UK subsidiaries ratios (as a percent) | 4.33% | |||||||||||||||||||||||||||||||||||||||||||
Domestic Subsidiaries ownership guaranteeing obligations (as a percent) | 100.00% | 100.00% | ||||||||||||||||||||||||||||||||||||||||||
Specified equity offerings, percentage of debt which may be redeemed | 40.00% | 40.00% | ||||||||||||||||||||||||||||||||||||||||||
Change of control, redemption price as a percentage of principal | 101.00% | 101.00% | ||||||||||||||||||||||||||||||||||||||||||
Sale of assets, redemption price as percentage of principal | 100.00% | 100.00% |
Derivatives_and_Hedging_Detail
Derivatives and Hedging (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Interest Rate Swap Agreements | ||
Derivative | ||
Hedge ineffectiveness recorded | $0 | $0 |
Interest Rate Swap Agreements | Level 2 | ||
Derivative | ||
Estimated liabilities of swaps designated as hedging instruments, fair value | 0 | 7.7 |
Interest Rate Swap Agreements | Floating Rate Floor Plan Debt | ||
Derivative | ||
Increase in the weighted average interest rate on floor plan borrowings due to the swaps (as a percent) | 0.30% | |
Interest Rate Swap Agreements | Floating Rate Floor Plan Debt | LIBOR portion | ||
Derivative | ||
Portion of floating rate floor plan debt fixed by swap agreements | 300 | |
Interest rate swap, fixed (as a percent) | 2.14% | |
Interest Rate Swap Agreements | Floating Rate Floor Plan Debt | Fixed rate portion | ||
Derivative | ||
Portion of floating rate floor plan debt fixed by swap agreements | 100 | |
Interest rate swap, fixed (as a percent) | 1.55% | |
Forward foreign exchange contracts | Level 2 | ||
Derivative | ||
Estimated asset of contracts designated as hedging instruments, fair value | $1.10 | $2.20 |
Commitments_and_Contingent_Lia2
Commitments and Contingent Liabilities (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Commitments and Contingent Liabilities | |||
Lease period, minimum | 5 years | ||
Lease period, maximum | 20 years | ||
Total rent obligations under leases | $4,900,000,000 | ||
Minimum future rental payments required under operating leases | |||
2015 | 210,500,000 | ||
2016 | 207,300,000 | ||
2017 | 203,000,000 | ||
2018 | 200,900,000 | ||
2019 | 199,500,000 | ||
2020 and thereafter | 3,923,900,000 | ||
Total | 4,945,100,000 | ||
Rent expense | 190,200,000 | 172,800,000 | 167,900,000 |
Aggregate rent paid by the tenants | 25,600,000 | ||
Aggregate rent currently guaranteed by the Company | 258,600,000 | ||
Loss Contingencies | |||
Senior subordinated convertible notes, interest rate (as a percent) | 3.50% | ||
Letters of credit outstanding | 23,500,000 | ||
Surety bonds posted | 15,000,000 | ||
Holdings | Holdings Bond | |||
Loss Contingencies | |||
Senior unsecured notes issued | 700,000,000 | ||
Senior subordinated convertible notes, interest rate (as a percent) | 3.80% | ||
Penske Truck Leasing Co., L.P. | |||
Loss Contingencies | |||
Ownership interest in Penske Truck Leasing Co (as a percent) | 9.00% | ||
Guarantee of Indebtedness of Others | GECC | |||
Loss Contingencies | |||
Percentage of interest agreed to indemnify if GECC required to make any payments of principal or interest | 9.00% | ||
Annual fee pay for acting as co-obligor | 950,000 | ||
Value of interest payments included in maximum amount of Company's potential obligations | $63,100,000 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Penske Corporation and its affiliates | |||
Related party transactions | |||
Provider's cost reimbursed | $7,300,000 | $6,300,000 | $5,300,000 |
Amount of Provider's cost received | 56,000 | 24,000 | 31,000 |
Amount due from related party | 14,000 | 0 | |
Amount due to related party | 700,000 | 600,000 | |
Penske Truck Leasing Corporation and other subsidiaries | |||
Related party transactions | |||
General partner ownership percentage | 41.10% | ||
Penske Truck Leasing Corporation and other subsidiaries | General Electric Capital Corporation | |||
Related party transactions | |||
General partner ownership percentage | 49.90% | ||
Penske Truck Leasing Co., L.P. | |||
Related party transactions | |||
Ownership interest in Penske Truck Leasing Co (as a percent) | 9.00% | ||
Pro rata cash dividends received | 11,600,000 | 9,900,000 | 18,500,000 |
PCV US | |||
Related party transactions | |||
Purchase price | $58,800,000 |
Related_Party_Transactions_Det1
Related Party Transactions (Details 2) | 12 Months Ended |
Dec. 31, 2014 | |
Audi, Mercedes-Benz, Porsche, smart | Fairfield, Connecticut | |
Related party transactions | |
Ownership percentage of Equity Method Investment | 82.19% |
Ownership percentage, option to purchase | 20.00% |
Audi, Mercedes-Benz, Porsche, smart | Fairfield, Connecticut | Lucio A. Noto | |
Related party transactions | |
Ownership percentage of Equity Method Investment | 17.81% |
Mercedes-Benz | Greenwich, Connecticut | |
Related party transactions | |
Ownership percentage of Equity Method Investment | 80.00% |
Percentage of operating profit | 20.00% |
Mercedes-Benz | Greenwich, Connecticut | Lucio A. Noto | |
Related party transactions | |
Ownership percentage, option to purchase | 20.00% |
Ferrari, Maserati | Las Vegas, Nevada | |
Related party transactions | |
Ownership percentage of Equity Method Investment | 50.00% |
Lexus Toyota Volkswagen | Frankfurt, Germany | |
Related party transactions | |
Ownership percentage of Equity Method Investment | 50.00% |
Audi, Citroen, Kia, Maserati, SEAT, Skoda, Toyota, Volkswagen | Aachen, Germany | |
Related party transactions | |
Ownership percentage of Equity Method Investment | 50.00% |
BMW, MINI, Maserati | Northern Italy | |
Related party transactions | |
Ownership percentage of Equity Method Investment | 70.00% |
BMW,MINI | Barcelona Spain | |
Related party transactions | |
Ownership percentage of Equity Method Investment | 50.00% |
Max Cycles | |
Related party transactions | |
Ownership percentage of Equity Method Investment | 50.00% |
Penske Commercial Leasing Australia | |
Related party transactions | |
Ownership percentage of Equity Method Investment | 45.00% |
Penske Vehicle Services | |
Related party transactions | |
Ownership percentage of Equity Method Investment | 31.00% |
National Powersport Auctions | |
Related party transactions | |
Ownership percentage of Equity Method Investment | 7.00% |
PCV US | |
Related party transactions | |
Ownership percentage of Consolidated Entity | 91.00% |
i.M. Branded | |
Related party transactions | |
Ownership percentage of Consolidated Entity | 90.00% |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Stock-based compensation | |||
Compensation expense related to the Plan | $12.80 | $9.80 | $6.80 |
Restricted Stock | |||
Stock-based compensation | |||
Period over which forfeiture and non-transferable restrictions lapse | 4 years | ||
Percentage over which unrecognized compensation cost is expected to be recognized year one | 15.00% | ||
Percentage over which unrecognized compensation cost is expected to be recognized year two | 15.00% | ||
Percentage over which unrecognized compensation cost is expected to be recognized year three | 20.00% | ||
Percentage over which unrecognized compensation cost is expected to be recognized year four | 50.00% | ||
Unrecognized compensation cost related to the restricted stock | 20 | ||
Shares | |||
Balance at the beginning of the period (in shares) | 1,168,200 | ||
Granted (in shares) | 314,677 | 448,026 | 431,339 |
Vested (in shares) | -373,450 | ||
Forfeited (in shares) | -7,042 | ||
Balance at the end of the period (in shares) | 1,102,385 | 1,168,200 | |
Weighted Average Grant-Date Fair value | |||
Balance at the beginning of the period (in dollars per share) | $23.75 | ||
Granted (in dollars per share) | $44.03 | ||
Vested (in dollars per share) | $20 | ||
Forfeited (in dollars per share) | $27.12 | ||
Balance at the end of the period (in dollars per share) | $30.78 | $23.75 | |
Aggregate Intrinsic Value | |||
Balance at the end of the period (in dollars) | $54.10 | ||
2012 Plan | |||
Stock-based compensation | |||
Maximum term of options | 3 years | ||
Number of shares of common stock available for grant under the plan | 2,000,000 | ||
Number of shares of common stock available for grant under the plan | 1,121,582 |
Equity_Details
Equity (Details) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Stock Repurchase Period | |||
Repurchase of common stock | $15.50 | $15.80 | $9.80 |
Acquired Employee Equity Awards | |||
Stock Repurchase Period | |||
Repurchased shares | 160,350 | 97,818 | 55,631 |
Repurchase of common stock | 7.5 | 3.1 | 1.3 |
Repurchased shares, average price (in dollars per share) | $46.48 | $32.13 | $23.49 |
Share Repurchase Program | |||
Stock Repurchase Period | |||
Repurchased shares | 175,000 | 410,000 | 350,000 |
Repurchase of common stock | 8 | 12.7 | 8.5 |
Repurchased shares, average price (in dollars per share) | $45.95 | $30.93 | $24.35 |
Amount authorized to be repurchased | $150 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income / (Loss) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Changes in accumulated other comprehensive income (loss) by component | |||
Balance at the beginning of the period | $11.60 | ($6.80) | ($24.20) |
Other comprehensive income before reclassifications | -69.8 | 14.9 | 13.2 |
Amounts reclassified from accumulated other comprehensive income - net of tax | 4.9 | 3.5 | 4.2 |
Amounts reclassified from accumulated other comprehensive income, tax provision | 3.2 | 2.9 | 2.8 |
Amounts reclassified from accumulated other comprehensive income, tax benefit | -0.5 | ||
Net current-period other comprehensive income | -64.9 | 18.4 | 17.4 |
Balance at the end of the period | -53.3 | 11.6 | -6.8 |
Foreign Currency Translation | |||
Changes in accumulated other comprehensive income (loss) by component | |||
Balance at the beginning of the period | 11.4 | 0.4 | -17.9 |
Other comprehensive income before reclassifications | -63.1 | 11.9 | 18.3 |
Amounts reclassified from accumulated other comprehensive income - net of tax | -0.9 | ||
Net current-period other comprehensive income | -63.1 | 11 | 18.3 |
Balance at the end of the period | -51.7 | 11.4 | 0.4 |
Other | |||
Changes in accumulated other comprehensive income (loss) by component | |||
Balance at the beginning of the period | 0.2 | -7.2 | -6.3 |
Other comprehensive income before reclassifications | -6.7 | 3 | -5.1 |
Amounts reclassified from accumulated other comprehensive income - net of tax | 4.9 | 4.4 | 4.2 |
Net current-period other comprehensive income | -1.8 | 7.4 | -0.9 |
Balance at the end of the period | ($1.60) | $0.20 | ($7.20) |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current: | |||
Federal | $52.60 | $7.30 | ($16.40) |
State and local | 7.9 | 5.1 | 1.2 |
Foreign | 42.2 | 33.9 | 26.5 |
Total current | 102.7 | 46.3 | 11.3 |
Deferred: | |||
Federal | 42.9 | 71.3 | 70.1 |
State and local | 9.3 | 9.5 | 11.8 |
Foreign | -1.7 | -3.2 | 1.4 |
Total deferred | 50.5 | 77.6 | 83.8 |
Income taxes relating to continuing operations | 153.2 | 123.9 | 94.6 |
Reconciliation of income taxes from continuing operations at federal statutory rate | |||
Federal statutory income tax rate (as a percent) | 35.00% | 35.00% | 35.00% |
Income taxes relating to continuing operations at federal statutory rate of 35% | 161.7 | 131 | 101.8 |
State and local income taxes, net of federal taxes | 11 | 8.7 | 7.1 |
Non-U.S. income taxed at other rates | -19 | -16.1 | -12.6 |
Other | -0.5 | 0.3 | -1.7 |
Income taxes relating to continuing operations | 153.2 | 123.9 | 94.6 |
Deferred Tax Assets | |||
Accrued liabilities | 72.1 | 61.8 | |
Net operating loss carryforwards | 16 | 13.7 | |
Interest rate swap | 3.1 | ||
Other | 8.4 | 12.4 | |
Total deferred tax assets | 96.5 | 91 | |
Valuation allowance | -18.2 | -14.6 | |
Net deferred tax assets | 78.3 | 76.4 | |
Deferred Tax Liabilities | |||
Depreciation and amortization | -187.6 | -175.9 | |
Partnership investments | -253 | -219 | |
Convertible notes | -10 | -12.5 | |
Other | -3.5 | -1.3 | |
Total deferred tax liabilities | -454.1 | -408.7 | |
Net deferred tax liabilities | -375.8 | -332.3 | |
Income from continuing operations before income taxes of non-U.S. subsidiaries | 170.6 | 134.7 | 117 |
Amount of total temporary difference related to the excess of financial reporting basis over tax basis in the non-U.S. subsidiaries on which U.S. federal income taxes are not provided | $711 |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Operating loss carryforwards | ||
Valuation allowance against deferred tax assets related to buildings | $18.20 | $14.60 |
UK | ||
Operating loss carryforwards | ||
Amount of tax credit carryforwards not subject to expiration | 5.2 | |
Net operating loss carryforwards not subject to expiration | 0.2 | |
Valuation allowance against deferred tax assets related to buildings | 8.2 | |
German | ||
Operating loss carryforwards | ||
Net operating loss carryforwards not subject to expiration | 18.2 | |
Valuation allowance against net operating loss carryforwards | 7.3 | |
Australia | ||
Operating loss carryforwards | ||
Net operating loss carryforwards not subject to expiration | 9.5 | |
Italian | ||
Operating loss carryforwards | ||
Net operating loss carryforwards not subject to expiration | 0.1 | |
State | ||
Operating loss carryforwards | ||
Net operating loss carryforwards that expire at various dates | 96.9 | |
Net operating loss carryforwards utilized | 53.1 | |
Valuation allowance against net operating loss carryforwards | 2.6 | |
Valuation allowance against state credit carryforwards | 0.1 | |
Federal and state | ||
Operating loss carryforwards | ||
Amount of tax credit carryforwards not subject to expiration | $3.40 |
Income_Taxes_Details_3
Income Taxes (Details 3) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Movement in uncertain tax positions | |||
Uncertain tax positions at the beginning of the period | $14 | $14.70 | $14.90 |
Gross increase - tax position in prior periods | 0.2 | 0.3 | 1.3 |
Gross decrease - tax position in prior periods | -0.6 | -0.8 | -0.8 |
Gross increase - current period tax position | 0.1 | 0.1 | |
Settlements | -0.4 | -0.9 | |
Lapse in statute of limitations | -0.1 | -0.3 | |
Foreign exchange | -0.6 | 0.2 | 0.5 |
Uncertain tax positions at the end of the period | 13.1 | 14 | 14.7 |
Interest and penalties included within uncertain tax positions | 2.7 | ||
Impact of uncertain tax positions on effective tax rate, if recognized | $12.90 |
Segment_Information_Details
Segment Information (Details) | 12 Months Ended |
Dec. 31, 2014 | |
item | |
Segment Information | |
Number of reportable Segments | 2 |
Number of geographic operating segments | 4 |
Segment_Information_Details_2
Segment Information (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues and adjusted segment income by reportable segment | |||||||||||
Total revenues | $4,410.10 | $4,381.40 | $4,370.50 | $4,015.20 | $3,793.30 | $3,724.60 | $3,599.20 | $3,326.80 | $17,177.20 | $14,443.90 | $12,902.60 |
Floor plan interest expense | 46.1 | 43.1 | 38 | ||||||||
Other interest expense | 52.8 | 45.2 | 46.1 | ||||||||
Depreciation | 70 | 59.6 | 52.2 | ||||||||
Equity in earnings of affiliates | 40.8 | 30.7 | 27.6 | ||||||||
Adjusted Segment Income | 446 | 374.2 | 308.6 | ||||||||
Reconciliation of total adjusted segment income to consolidated income from continuing operations before income taxes | |||||||||||
Adjusted Segment Income | 446 | 374.2 | 308.6 | ||||||||
Debt redemption costs | -17.8 | ||||||||||
Gain on investment | 16 | ||||||||||
Income from continuing operations before income taxes | 462 | 374.2 | 290.8 | ||||||||
Total assets, equity method investments, and capital expenditures by reporting segment | |||||||||||
Total assets | 7,228.20 | 6,415.50 | 7,228.20 | 6,415.50 | |||||||
Equity method investments | 352.8 | 346.9 | 352.8 | 346.9 | |||||||
Capital expenditures | 174.8 | 174.7 | 150.9 | ||||||||
Intersegment Elimination | |||||||||||
Revenues and adjusted segment income by reportable segment | |||||||||||
Total revenues | -5.1 | ||||||||||
Total assets, equity method investments, and capital expenditures by reporting segment | |||||||||||
Total assets | -0.4 | -0.3 | -0.4 | -0.3 | |||||||
Retail Automotive | Operating segments | |||||||||||
Revenues and adjusted segment income by reportable segment | |||||||||||
Total revenues | 16,602.70 | 14,291.30 | 12,902.60 | ||||||||
Floor plan interest expense | 44.7 | 42.5 | 38 | ||||||||
Other interest expense | 46.9 | 44.1 | 46.1 | ||||||||
Depreciation | 66.9 | 59.1 | 52.2 | ||||||||
Equity in earnings of affiliates | 3.8 | 4.9 | 3.3 | ||||||||
Adjusted Segment Income | 394.2 | 340.7 | 284.3 | ||||||||
Reconciliation of total adjusted segment income to consolidated income from continuing operations before income taxes | |||||||||||
Adjusted Segment Income | 394.2 | 340.7 | 284.3 | ||||||||
Total assets, equity method investments, and capital expenditures by reporting segment | |||||||||||
Total assets | 5,920.40 | 5,747.60 | 5,920.40 | 5,747.60 | |||||||
Equity method investments | 62.8 | 81.6 | 62.8 | 81.6 | |||||||
Capital expenditures | 169.5 | 174.7 | 150.9 | ||||||||
Other | Operating segments | |||||||||||
Revenues and adjusted segment income by reportable segment | |||||||||||
Total revenues | 579.6 | 152.6 | |||||||||
Floor plan interest expense | 1.4 | 0.6 | |||||||||
Other interest expense | 5.9 | 1.1 | |||||||||
Depreciation | 3.1 | 0.5 | |||||||||
Equity in earnings of affiliates | 37 | 25.8 | 24.3 | ||||||||
Adjusted Segment Income | 51.8 | 33.5 | 24.3 | ||||||||
Reconciliation of total adjusted segment income to consolidated income from continuing operations before income taxes | |||||||||||
Adjusted Segment Income | 51.8 | 33.5 | 24.3 | ||||||||
Total assets, equity method investments, and capital expenditures by reporting segment | |||||||||||
Total assets | 1,308.20 | 668.2 | 1,308.20 | 668.2 | |||||||
Equity method investments | 290 | 265.3 | 290 | 265.3 | |||||||
Capital expenditures | $5.30 |
Segment_Information_Details_3
Segment Information (Details 3) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Sales to external customers and Long-lived assets, net | |||||||||||
Sales to external customer | $4,410.10 | $4,381.40 | $4,370.50 | $4,015.20 | $3,793.30 | $3,724.60 | $3,599.20 | $3,326.80 | $17,177.20 | $14,443.90 | $12,902.60 |
Long-lived assets, net | 1,708 | 1,497.30 | 1,708 | 1,497.30 | |||||||
U.S. | |||||||||||
Sales to external customers and Long-lived assets, net | |||||||||||
Sales to external customer | 10,435.90 | 9,238.90 | 8,285.80 | ||||||||
Long-lived assets, net | 1,177 | 1,050.20 | 1,177 | 1,050.20 | |||||||
Non-U.S. | |||||||||||
Sales to external customers and Long-lived assets, net | |||||||||||
Sales to external customer | 6,741.30 | 5,205 | 4,616.80 | ||||||||
Long-lived assets, net | $531 | $447.10 | $531 | $447.10 |
Summary_of_Quarterly_Financial2
Summary of Quarterly Financial Data (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Quarterly Financial Data | |||||||||||
Total revenues | $4,410.10 | $4,381.40 | $4,370.50 | $4,015.20 | $3,793.30 | $3,724.60 | $3,599.20 | $3,326.80 | $17,177.20 | $14,443.90 | $12,902.60 |
Gross profit | 658.7 | 646.2 | 654.8 | 614 | 571 | 558.4 | 547.8 | 519.8 | 2,573.70 | 2,197 | 1,975.60 |
Net income | 73.2 | 75.1 | 73.9 | 67.9 | 59.7 | 65.5 | 62.5 | 58 | 290.1 | 245.7 | 187.2 |
Net income attributable to Penske Automotive Group common stockholders | $71.80 | $74.50 | $72.90 | $67.50 | $59.20 | $65.30 | $62 | $57.70 | $286.70 | $244.20 | $185.50 |
Diluted earnings per share attributable to Penske Automotive Group common stockholders (in dollars per share) | $0.80 | $0.83 | $0.81 | $0.75 | $0.66 | $0.72 | $0.69 | $0.64 | $3.17 | $2.70 | $2.05 |
Condensed_Consolidating_Financ2
Condensed Consolidating Financial Information (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | ||||
Condensed consolidating balance sheet | ||||
Cash and cash equivalents | $36.30 | $50.30 | $43.90 | $26.80 |
Accounts receivable, net | 701.4 | 594.9 | ||
Inventories | 2,819.20 | 2,501.40 | ||
Other current assets | 124.7 | 87.7 | ||
Assets held for sale | 186.1 | 253.8 | ||
Total current assets | 3,867.70 | 3,488.10 | ||
Property and equipment, net | 1,328.80 | 1,119.50 | ||
Intangible assets | 1,652.50 | 1,430.10 | ||
Equity method investments | 352.8 | 346.9 | ||
Other long-term assets | 26.4 | 30.9 | ||
Total assets | 7,228.20 | 6,415.50 | ||
Floor plan notes payable | 1,812.60 | 1,671.90 | ||
Floor plan notes payable - non-trade | 920.5 | 900.9 | ||
Accounts payable | 417.6 | 369 | ||
Accrued expenses | 310.3 | 260.9 | ||
Current portion of long-term debt | 36.6 | 14.5 | ||
Liabilities held for sale | 132.7 | 166.5 | ||
Total current liabilities | 3,630.30 | 3,383.70 | ||
Long-term debt | 1,316 | 981.8 | ||
Deferred tax liabilities | 409.9 | 361.4 | ||
Other long-term liabilities | 190.8 | 166.5 | ||
Total liabilities | 5,547 | 4,893.40 | ||
Total equity | 1,681.20 | 1,522.10 | 1,316.30 | 1,149.50 |
Total liabilities and equity | 7,228.20 | 6,415.50 | ||
Interest rate (as a percent) | 3.50% | |||
5.75% senior subordinated notes due 2022 | ||||
Condensed consolidating balance sheet | ||||
Interest rate (as a percent) | 5.75% | 5.75% | 5.75% | |
Domestic Subsidiaries ownership guaranteeing obligations (as a percent) | 100.00% | |||
5.375% senior subordinated notes due 2024 | ||||
Condensed consolidating balance sheet | ||||
Interest rate (as a percent) | 5.38% | |||
Domestic Subsidiaries ownership guaranteeing obligations (as a percent) | 100.00% | |||
Penske Automotive Group | 5.75% senior subordinated notes due 2022 | ||||
Condensed consolidating balance sheet | ||||
Interest rate (as a percent) | 5.75% | 5.75% | 5.75% | |
Penske Automotive Group | 5.375% senior subordinated notes due 2024 | ||||
Condensed consolidating balance sheet | ||||
Interest rate (as a percent) | 5.38% | |||
Guarantor Subsidiaries | ||||
Condensed consolidating balance sheet | ||||
Domestic Subsidiaries ownership guaranteeing obligations (as a percent) | 100.00% | |||
Eliminations | ||||
Condensed consolidating balance sheet | ||||
Accounts receivable, net | -409.6 | -392.5 | ||
Total current assets | -409.6 | -392.5 | ||
Other long-term assets | -1,990.80 | -1,686 | ||
Total assets | -2,400.40 | -2,078.50 | ||
Accrued expenses | -409.6 | -392.5 | ||
Total current liabilities | -409.6 | -392.5 | ||
Long-term debt | -247 | -123.5 | ||
Total liabilities | -656.6 | -516 | ||
Total equity | -1,743.80 | -1,562.50 | ||
Total liabilities and equity | -2,400.40 | -2,078.50 | ||
Reportable legal entities | Penske Automotive Group | ||||
Condensed consolidating balance sheet | ||||
Accounts receivable, net | 409.6 | 392.5 | ||
Other current assets | 4.5 | 2.9 | ||
Total current assets | 414.1 | 395.4 | ||
Property and equipment, net | 4.3 | 4 | ||
Equity method investments | 285.5 | 295 | ||
Other long-term assets | 2,005 | 1,697.40 | ||
Total assets | 2,708.90 | 2,391.80 | ||
Floor plan notes payable - non-trade | 86.8 | 128.2 | ||
Accounts payable | 2.9 | 3.4 | ||
Accrued expenses | 0.1 | |||
Total current liabilities | 89.7 | 131.7 | ||
Long-term debt | 938 | 738 | ||
Total liabilities | 1,027.70 | 869.7 | ||
Total equity | 1,681.20 | 1,522.10 | ||
Total liabilities and equity | 2,708.90 | 2,391.80 | ||
Reportable legal entities | Guarantor Subsidiaries | ||||
Condensed consolidating balance sheet | ||||
Cash and cash equivalents | 13.1 | 34.8 | 25.8 | |
Accounts receivable, net | 392.6 | 376.5 | ||
Inventories | 1,481.50 | 1,402.30 | ||
Other current assets | 58.3 | 42.9 | ||
Assets held for sale | 150.4 | 202.1 | ||
Total current assets | 2,082.80 | 2,036.90 | ||
Property and equipment, net | 754.6 | 688 | ||
Intangible assets | 818.4 | 763 | ||
Other long-term assets | 4.4 | 4.2 | ||
Total assets | 3,660.20 | 3,492.10 | ||
Floor plan notes payable | 1,102 | 997.9 | ||
Floor plan notes payable - non-trade | 398.1 | 445 | ||
Accounts payable | 208.3 | 138.1 | ||
Accrued expenses | 123.3 | 120.9 | ||
Current portion of long-term debt | 4.6 | 4 | ||
Liabilities held for sale | 105.9 | 135.1 | ||
Total current liabilities | 1,942.20 | 1,841 | ||
Long-term debt | 116.1 | 106.9 | ||
Deferred tax liabilities | 385.6 | 337.7 | ||
Other long-term liabilities | 66.9 | 68.7 | ||
Total liabilities | 2,510.80 | 2,354.30 | ||
Total equity | 1,149.40 | 1,137.80 | ||
Total liabilities and equity | 3,660.20 | 3,492.10 | ||
Reportable legal entities | Non-Guarantor Subsidiaries | ||||
Condensed consolidating balance sheet | ||||
Cash and cash equivalents | 36.3 | 37.2 | 9.1 | 1 |
Accounts receivable, net | 308.8 | 218.4 | ||
Inventories | 1,337.70 | 1,099.10 | ||
Other current assets | 61.9 | 41.9 | ||
Assets held for sale | 35.7 | 51.7 | ||
Total current assets | 1,780.40 | 1,448.30 | ||
Property and equipment, net | 569.9 | 427.5 | ||
Intangible assets | 834.1 | 667.1 | ||
Equity method investments | 67.3 | 51.9 | ||
Other long-term assets | 7.8 | 15.3 | ||
Total assets | 3,259.50 | 2,610.10 | ||
Floor plan notes payable | 710.6 | 674 | ||
Floor plan notes payable - non-trade | 435.6 | 327.7 | ||
Accounts payable | 206.4 | 227.5 | ||
Accrued expenses | 596.6 | 532.4 | ||
Current portion of long-term debt | 32 | 10.5 | ||
Liabilities held for sale | 26.8 | 31.4 | ||
Total current liabilities | 2,008 | 1,803.50 | ||
Long-term debt | 508.9 | 260.4 | ||
Deferred tax liabilities | 24.3 | 23.7 | ||
Other long-term liabilities | 123.9 | 97.8 | ||
Total liabilities | 2,665.10 | 2,185.40 | ||
Total equity | 594.4 | 424.7 | ||
Total liabilities and equity | $3,259.50 | $2,610.10 |
Condensed_Consolidating_Financ3
Condensed Consolidating Financial Information (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Condensed consolidating statement of income | |||||||||||
Total revenues | $4,410.10 | $4,381.40 | $4,370.50 | $4,015.20 | $3,793.30 | $3,724.60 | $3,599.20 | $3,326.80 | $17,177.20 | $14,443.90 | $12,902.60 |
Cost of sales | 14,603.50 | 12,246.90 | 10,927 | ||||||||
Gross profit | 658.7 | 646.2 | 654.8 | 614 | 571 | 558.4 | 547.8 | 519.8 | 2,573.70 | 2,197 | 1,975.60 |
Selling, general and administrative expenses | 1,999.60 | 1,705.60 | 1,558.30 | ||||||||
Depreciation | 70 | 59.6 | 52.2 | ||||||||
Operating income | 504.1 | 431.8 | 365.1 | ||||||||
Floor plan interest expense | -46.1 | -43.1 | -38 | ||||||||
Other interest expense | -52.8 | -45.2 | -46.1 | ||||||||
Equity in earnings of affiliates | 40.8 | 30.7 | 27.6 | ||||||||
Gain on investment | 16 | ||||||||||
Debt redemption costs | -17.8 | ||||||||||
Income from continuing operations before income taxes | 462 | 374.2 | 290.8 | ||||||||
Income taxes | -153.2 | -123.9 | -94.6 | ||||||||
Income from continuing operations | 308.8 | 250.3 | 196.2 | ||||||||
(Loss) income from discontinued operations, net of tax | -18.7 | -4.6 | -9 | ||||||||
Net income | 73.2 | 75.1 | 73.9 | 67.9 | 59.7 | 65.5 | 62.5 | 58 | 290.1 | 245.7 | 187.2 |
Other comprehensive income (loss), net of taxes | -66.2 | 18.9 | 17.6 | ||||||||
Comprehensive income | 223.9 | 264.6 | 204.8 | ||||||||
Less: Comprehensive income attributable to the non-controlling interests | 2.1 | 2 | 1.9 | ||||||||
Comprehensive income attributable to Penske Automotive Group common stockholders | 221.8 | 262.6 | 202.9 | ||||||||
Eliminations | |||||||||||
Condensed consolidating statement of income | |||||||||||
Equity in earnings of subsidiaries | -473.2 | -406.1 | -341.8 | ||||||||
Income from continuing operations before income taxes | -473.2 | -406.1 | -341.8 | ||||||||
Income taxes | 157.9 | 135 | 111.9 | ||||||||
Income from continuing operations | -315.3 | -271.1 | -229.9 | ||||||||
(Loss) income from discontinued operations, net of tax | 16.8 | 4.6 | 9 | ||||||||
Net income | -298.5 | -266.5 | -220.9 | ||||||||
Other comprehensive income (loss), net of taxes | 62.5 | -9.8 | -16.6 | ||||||||
Comprehensive income | -236 | -276.3 | -237.5 | ||||||||
Less: Comprehensive income attributable to the non-controlling interests | 1.4 | -0.5 | -0.3 | ||||||||
Comprehensive income attributable to Penske Automotive Group common stockholders | -237.4 | -275.8 | -237.2 | ||||||||
Reportable legal entities | Penske Automotive Group | |||||||||||
Condensed consolidating statement of income | |||||||||||
Selling, general and administrative expenses | 28.7 | 21.4 | 19.4 | ||||||||
Depreciation | 1.3 | 1.8 | 1.3 | ||||||||
Operating income | -30 | -23.2 | -20.7 | ||||||||
Floor plan interest expense | -10.4 | -9.6 | -8.6 | ||||||||
Other interest expense | -29.8 | -26.1 | -29.5 | ||||||||
Equity in earnings of affiliates | 36.5 | 25.5 | 24 | ||||||||
Gain on investment | 16 | ||||||||||
Debt redemption costs | -17.8 | ||||||||||
Equity in earnings of subsidiaries | 473.2 | 406.1 | 341.8 | ||||||||
Income from continuing operations before income taxes | 455.5 | 372.7 | 289.2 | ||||||||
Income taxes | -152 | -123.9 | -94.6 | ||||||||
Income from continuing operations | 303.5 | 248.8 | 194.6 | ||||||||
(Loss) income from discontinued operations, net of tax | -16.8 | -4.6 | -9 | ||||||||
Net income | 286.7 | 244.2 | 185.6 | ||||||||
Other comprehensive income (loss), net of taxes | -66.2 | 18.9 | 17.6 | ||||||||
Comprehensive income | 220.5 | 263.1 | 203.2 | ||||||||
Less: Comprehensive income attributable to the non-controlling interests | -1.4 | 0.5 | 0.3 | ||||||||
Comprehensive income attributable to Penske Automotive Group common stockholders | 221.9 | 262.6 | 202.9 | ||||||||
Reportable legal entities | Guarantor Subsidiaries | |||||||||||
Condensed consolidating statement of income | |||||||||||
Total revenues | 9,589 | 8,534.20 | 7,630.70 | ||||||||
Cost of sales | 8,092.50 | 7,178.50 | 6,424.20 | ||||||||
Gross profit | 1,496.50 | 1,355.70 | 1,206.50 | ||||||||
Selling, general and administrative expenses | 1,133.90 | 1,025.90 | 930.8 | ||||||||
Depreciation | 37.8 | 33.8 | 28 | ||||||||
Operating income | 324.8 | 296 | 247.7 | ||||||||
Floor plan interest expense | -20.7 | -19.5 | -16.4 | ||||||||
Other interest expense | -5 | -1.9 | |||||||||
Income from continuing operations before income taxes | 299.1 | 274.6 | 231.3 | ||||||||
Income taxes | -110.3 | -100.4 | -87.7 | ||||||||
Income from continuing operations | 188.8 | 174.2 | 143.6 | ||||||||
(Loss) income from discontinued operations, net of tax | -2.4 | 0.9 | -0.5 | ||||||||
Net income | 186.4 | 175.1 | 143.1 | ||||||||
Other comprehensive income (loss), net of taxes | 4.7 | 4 | 1 | ||||||||
Comprehensive income | 191.1 | 179.1 | 144.1 | ||||||||
Comprehensive income attributable to Penske Automotive Group common stockholders | 191.1 | 179.1 | 144.1 | ||||||||
Reportable legal entities | Non-Guarantor Subsidiaries | |||||||||||
Condensed consolidating statement of income | |||||||||||
Total revenues | 7,588.20 | 5,909.70 | 5,271.90 | ||||||||
Cost of sales | 6,511 | 5,068.40 | 4,502.80 | ||||||||
Gross profit | 1,077.20 | 841.3 | 769.1 | ||||||||
Selling, general and administrative expenses | 837 | 658.3 | 608.1 | ||||||||
Depreciation | 30.9 | 24 | 22.9 | ||||||||
Operating income | 209.3 | 159 | 138.1 | ||||||||
Floor plan interest expense | -15 | -14 | -13 | ||||||||
Other interest expense | -18 | -17.2 | -16.6 | ||||||||
Equity in earnings of affiliates | 4.3 | 5.2 | 3.6 | ||||||||
Income from continuing operations before income taxes | 180.6 | 133 | 112.1 | ||||||||
Income taxes | -48.8 | -34.6 | -24.2 | ||||||||
Income from continuing operations | 131.8 | 98.4 | 87.9 | ||||||||
(Loss) income from discontinued operations, net of tax | -16.3 | -5.5 | -8.5 | ||||||||
Net income | 115.5 | 92.9 | 79.4 | ||||||||
Other comprehensive income (loss), net of taxes | -67.2 | 5.8 | 15.6 | ||||||||
Comprehensive income | 48.3 | 98.7 | 95 | ||||||||
Less: Comprehensive income attributable to the non-controlling interests | 2.1 | 2 | 1.9 | ||||||||
Comprehensive income attributable to Penske Automotive Group common stockholders | $46.20 | $96.70 | $93.10 |
Condensed_Consolidating_Financ4
Condensed Consolidating Financial Information (Details 3) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Condensed consolidating statement of cash flows | |||
Net cash provided by continuing operating activities | $366.30 | $301 | $325.70 |
Investing activities: | |||
Purchase of equipment and improvements | -174.8 | -174.7 | -150.9 |
Proceeds from sale-leaseback transactions | 1.6 | ||
Acquisitions, net | -355 | -314 | -233.3 |
Other | -22.6 | -2.6 | 8.8 |
Net cash used in continuing investing activities | -552.4 | -491.3 | -373.8 |
Financing activities: | |||
Repurchase of 7.75% senior subordinated notes | -390.8 | ||
Repurchase of 3.5% senior subordinated convertible notes | -62.7 | ||
Net (repayments) borrowings of long-term debt | -71.3 | 81.1 | -51.7 |
Net borrowings (repayments) of floor plan notes payable - non-trade | 19.6 | 191.2 | 70.2 |
Payment of deferred financing fees | -4.4 | -8.6 | |
Repurchases of common stock | -15.5 | -15.8 | -9.8 |
Dividends | -70.5 | -56 | -41.5 |
Other | 0.3 | 0.2 | -1.1 |
Net cash provided by continuing financing activities | 158.2 | 200.7 | 54 |
Net cash provided by (used in) discontinued operations | 15.2 | -4 | 11.2 |
Effect of exchange rate changes on cash and cash equivalents | -1.3 | ||
Net change in cash and cash equivalents | -14 | 6.4 | 17.1 |
Cash and cash equivalents, beginning of period | 50.3 | 43.9 | 26.8 |
Cash and cash equivalents, end of period | 36.3 | 50.3 | 43.9 |
Interest rate (as a percent) | 3.50% | ||
5.375% senior subordinated notes due 2024 | |||
Financing activities: | |||
Issuance of senior subordinated notes | 300 | ||
Interest rate (as a percent) | 5.38% | ||
5.75% senior subordinated notes due 2022 | |||
Financing activities: | |||
Issuance of senior subordinated notes | 550 | ||
Interest rate (as a percent) | 5.75% | 5.75% | 5.75% |
7.75% Notes | |||
Financing activities: | |||
Interest rate (as a percent) | 7.75% | ||
3.5% Notes | |||
Financing activities: | |||
Interest rate (as a percent) | 3.50% | ||
Penske Automotive Group | 5.375% senior subordinated notes due 2024 | |||
Financing activities: | |||
Interest rate (as a percent) | 5.38% | ||
Penske Automotive Group | 5.75% senior subordinated notes due 2022 | |||
Financing activities: | |||
Interest rate (as a percent) | 5.75% | 5.75% | 5.75% |
Reportable legal entities | Penske Automotive Group | |||
Condensed consolidating statement of cash flows | |||
Net cash provided by continuing operating activities | -70.7 | 46.5 | 45.5 |
Investing activities: | |||
Purchase of equipment and improvements | -1.7 | -1.3 | -1.1 |
Other | 4.2 | -17.5 | -3.3 |
Net cash used in continuing investing activities | 2.5 | -18.8 | -4.4 |
Financing activities: | |||
Repurchase of 7.75% senior subordinated notes | -390.8 | ||
Repurchase of 3.5% senior subordinated convertible notes | -62.7 | ||
Net (repayments) borrowings of long-term debt | -100 | 28 | -98.9 |
Net borrowings (repayments) of floor plan notes payable - non-trade | -41.4 | 16.1 | 21.2 |
Payment of deferred financing fees | -4.4 | -8.6 | |
Repurchases of common stock | -15.5 | -15.8 | -9.8 |
Dividends | -70.5 | -56 | -41.5 |
Net cash provided by continuing financing activities | 68.2 | -27.7 | -41.1 |
Reportable legal entities | Penske Automotive Group | 5.375% senior subordinated notes due 2024 | |||
Financing activities: | |||
Issuance of senior subordinated notes | 300 | ||
Reportable legal entities | Penske Automotive Group | 5.75% senior subordinated notes due 2022 | |||
Financing activities: | |||
Issuance of senior subordinated notes | 550 | ||
Reportable legal entities | Guarantor Subsidiaries | |||
Condensed consolidating statement of cash flows | |||
Net cash provided by continuing operating activities | 209.2 | 17.9 | 125.8 |
Investing activities: | |||
Purchase of equipment and improvements | -101.2 | -116.7 | -100.4 |
Acquisitions, net | -175.3 | -103.4 | -98.9 |
Other | 10.7 | 4.8 | |
Net cash used in continuing investing activities | -276.5 | -209.4 | -194.5 |
Financing activities: | |||
Net (repayments) borrowings of long-term debt | 9 | 2.7 | 27.7 |
Net borrowings (repayments) of floor plan notes payable - non-trade | 35.9 | 181.1 | 41 |
Distributions from (to) parent | 5.5 | 0.9 | 5.2 |
Net cash provided by continuing financing activities | 50.4 | 184.7 | 73.9 |
Net cash provided by (used in) discontinued operations | 3.8 | -14.9 | 3.8 |
Net change in cash and cash equivalents | -13.1 | -21.7 | 9 |
Cash and cash equivalents, beginning of period | 13.1 | 34.8 | 25.8 |
Cash and cash equivalents, end of period | 13.1 | 34.8 | |
Reportable legal entities | Non-Guarantor Subsidiaries | |||
Condensed consolidating statement of cash flows | |||
Net cash provided by continuing operating activities | 227.8 | 236.6 | 154.4 |
Investing activities: | |||
Purchase of equipment and improvements | -71.9 | -56.7 | -49.4 |
Proceeds from sale-leaseback transactions | 1.6 | ||
Acquisitions, net | -179.7 | -210.6 | -134.4 |
Other | -26.8 | 4.2 | 7.3 |
Net cash used in continuing investing activities | -278.4 | -263.1 | -174.9 |
Financing activities: | |||
Net (repayments) borrowings of long-term debt | 19.7 | 50.4 | 19.5 |
Net borrowings (repayments) of floor plan notes payable - non-trade | 25.1 | -6 | 8 |
Other | 0.3 | 0.2 | -1.1 |
Distributions from (to) parent | -5.5 | -0.9 | -5.2 |
Net cash provided by continuing financing activities | 39.6 | 43.7 | 21.2 |
Net cash provided by (used in) discontinued operations | 11.4 | 10.9 | 7.4 |
Effect of exchange rate changes on cash and cash equivalents | -1.3 | ||
Net change in cash and cash equivalents | -0.9 | 28.1 | 8.1 |
Cash and cash equivalents, beginning of period | 37.2 | 9.1 | 1 |
Cash and cash equivalents, end of period | $36.30 | $37.20 | $9.10 |
Schedule_II_VALUATION_AND_QUAL1
Schedule II VALUATION AND QUALIFYING ACCOUNTS (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Allowance for doubtful accounts | |||
Valuation and qualifying accounts | |||
Balance at Beginning of Year | $2.90 | $2.80 | $2 |
Additions | 1 | 0.7 | 0.8 |
Deductions, Recoveries & Other | -0.4 | -0.6 | |
Balance at Ending of Year | 3.5 | 2.9 | 2.8 |
Tax valuation allowance | |||
Valuation and qualifying accounts | |||
Balance at Beginning of Year | 14.6 | 14.6 | 11.8 |
Additions | 4.3 | 1.6 | 3 |
Deductions, Recoveries & Other | -0.7 | -1.6 | -0.2 |
Balance at Ending of Year | $18.20 | $14.60 | $14.60 |