Business Combinations

9 Months Ended

Sep. 30, 2014

Business Combinations

Business Combinations

3. Business Combinations

We acquired two automotive retail franchises during the nine months ended September 30, 2014.  We acquired Penske Commercial Vehicles as discussed in Note 1, one Hertz car rental franchise market area and one automotive retail franchise during the nine months ended September 30, 2013. During the nine months ended September 30, 2014 we also made an additional investment in an entity previously accounted under the equity method.  Our financial statements include the results of operations of the acquired entities from the date of acquisition. The fair value of the assets acquired and liabilities assumed have been recorded in our consolidated condensed financial statements, and may be subject to adjustment pending completion of final valuation. A summary of the aggregate consideration paid and the aggregate amounts of the assets acquired and liabilities assumed for the nine months ended September 30, 2014 and 2013 follows:

	September 30
	2014			2013
Accounts receivable	$	0.7		$	20.1
Inventory	29.1			124.3
Other current assets	1.2			2.8
Property and equipment	4.1			26.1
Indefinite-lived intangibles	57.1			133.1
Other non-current assets	—			8.4
Current liabilities	(2.6		)	(94.1		)
Non-current liabilities	(2.2		)	0.5
Total consideration	87.4			221.2
Seller financed/assumed debt	(1.2		)	—
Cash used in dealership acquisitions	$	86.2		$	221.2

The following unaudited consolidated pro forma results of operations of PAG for the three and nine months ended September 30, 2014 and 2013 give effect to acquisitions consummated during 2014 and 2013 as if they had occurred effective at the beginning of the period:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Revenues	$	4,417.9	$	4,115.0	$	12,916.0	$	11,997.8
Income from continuing operations	76.4		73.5		222.9		216.6
Net income	74.5		72.7		215.0		215.2
Income from continuing operations per diluted common share	$	0.85	$	0.81	$	2.46	$	2.39
Net income per diluted common share	$	0.83	$	0.80	$	2.38	$	2.38