13. Condensed Consolidating Financial Information

The following tables include condensed consolidating financial information as of March 31, 2016 and December 31, 2015 and for the three month periods ended March 31, 2016 and 2015 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

March 31, 2016


					Penske
	Total				Automotive		Guarantor		Non‑Guarantor
	Company		Eliminations		Group		Subsidiaries		Subsidiaries
	(In millions)
Cash and cash equivalents	$	45.6	$	—	$	—	$	—	$	45.6
Accounts receivable, net		835.6		(434.6)		434.6		323.1		512.5
Inventories		3,513.4		—		—		1,685.3		1,828.1
Other current assets		101.5		—		4.2		29.7		67.6
Assets held for sale		9.8		—		—		9.7		0.1
Total current assets		4,505.9		(434.6)		438.8		2,047.8		2,453.9
Property and equipment, net		1,545.8		—		4.0		837.3		704.5
Intangible assets		1,734.8		—		—		878.5		856.3
Equity method investments		366.6		—		303.6		—		63.0
Other long-term assets		19.8		(2,209.1)		2,215.4		7.6		5.9
Total assets	$	8,172.9	$	(2,643.7)	$	2,961.8	$	3,771.2	$	4,083.6
Floor plan notes payable	$	2,262.5	$	—	$	—	$	1,267.7	$	994.8
Floor plan notes payable—non-trade		1,187.3		—		155.0		368.3		664.0
Accounts payable		541.5		—		2.4		140.4		398.7
Accrued expenses		388.0		(434.6)		1.1		144.7		676.8
Current portion of long-term debt		54.5		—		—		4.1		50.4
Liabilities held for sale		5.1		—		—		4.9		0.2
Total current liabilities		4,438.9		(434.6)		158.5		1,930.1		2,784.9
Long-term debt		1,330.1		(255.6)		1,079.3		132.0		374.4
Deferred tax liabilities		437.8		—		—		421.3		16.5
Other long-term liabilities		242.1		—		—		68.3		173.8
Total liabilities		6,448.9		(690.2)		1,237.8		2,551.7		3,349.6
Total equity		1,724.0		(1,953.5)		1,724.0		1,219.5		734.0
Total liabilities and equity	$	8,172.9	$	(2,643.7)	$	2,961.8	$	3,771.2	$	4,083.6

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2015


					Penske
	Total				Automotive		Guarantor		Non‑Guarantor
	Company		Eliminations		Group		Subsidiaries		Subsidiaries
	(In millions)
Cash and cash equivalents	$	62.4	$	—	$	—	$	—	$	62.4
Accounts receivable, net		782.3		(430.4)		430.4		400.8		381.5
Inventories		3,463.5		—		—		1,650.5		1,813.0
Other current assets		85.6		—		3.9		28.3		53.4
Assets held for sale		13.1		—		—		8.9		4.2
Total current assets		4,406.9		(430.4)		434.3		2,088.5		2,314.5
Property and equipment, net		1,520.1		—		4.0		822.0		694.1
Intangible assets		1,730.8		—		—		878.5		852.3
Equity method investments		336.4		—		298.2		—		38.2
Other long-term assets		19.2		(2,253.4)		2,259.9		7.2		5.5
Total assets	$	8,013.4	$	(2,683.8)	$	2,996.4	$	3,796.2	$	3,904.6
Floor plan notes payable	$	2,247.2	$	—	$	—	$	1,295.0	$	952.2
Floor plan notes payable—non-trade		1,132.4		—		154.7		339.8		637.9
Accounts payable		493.8		—		4.8		143.3		345.7
Accrued expenses		378.1		(430.4)		0.1		112.3		696.1
Current portion of long-term debt		28.0		—		—		5.7		22.3
Liabilities held for sale		6.2		—		—		4.4		1.8
Total current liabilities		4,285.7		(430.4)		159.6		1,900.5		2,656.0
Long-term debt		1,247.0		(256.4)		1,001.9		109.2		392.3
Deferred tax liabilities		433.4		—		—		413.4		20.0
Other long-term liabilities		212.4		—		—		68.9		143.5
Total liabilities		6,178.5		(686.8)		1,161.5		2,492.0		3,211.8
Total equity		1,834.9		(1,997.0)		1,834.9		1,304.2		692.8
Total liabilities and equity	$	8,013.4	$	(2,683.8)	$	2,996.4	$	3,796.2	$	3,904.6

CONDENSED CONSOLIDATING STATEMENT OF INCOME

Three Months Ended March 31, 2016


					Penske
	Total				Automotive		Guarantor		Non-Guarantor
	Company		Eliminations		Group		Subsidiaries		Subsidiaries
	(In millions)
Revenues	$	4,824.6	$	—	$	—	$	2,389.2	$	2,435.4
Cost of sales		4,100.8		—		—		2,006.2		2,094.6
Gross profit		723.8		—		—		383.0		340.8
Selling, general and administrative expenses		558.9		—		6.1		295.8		257.0
Depreciation		20.8		—		0.4		10.8		9.6
Operating income		144.1		—		(6.5)		76.4		74.2
Floor plan interest expense		(12.8)		—		(0.8)		(6.7)		(5.3)
Other interest expense		(17.2)		—		(13.3)		1.3		(5.2)
Equity in earnings of affiliates		5.5		—		4.2		—		1.3
Equity in earnings of subsidiaries		—		(135.1)		135.1		—		—
Income from continuing operations before income taxes		119.6		(135.1)		118.7		71.0		65.0
Income taxes		(39.4)		44.8		(39.4)		(29.2)		(15.6)
Income from continuing operations		80.2		(90.3)		79.3		41.8		49.4
(Loss) income from discontinued operations, net of tax		—		0.1		(0.1)		0.1		(0.1)
Net income		80.2		(90.2)		79.2		41.9		49.3
Other comprehensive income (loss), net of tax		1.2		0.3		1.2		—		(0.3)
Comprehensive income		81.4		(89.9)		80.4		41.9		49.0
Less: Comprehensive income attributable to non-controlling interests		2.4		(1.5)		1.5		—		2.4
Comprehensive income attributable to Penske Automotive Group common stockholders	$	79.0	$	(88.4)	$	78.9	$	41.9	$	46.6

CONDENSED CONSOLIDATING STATEMENT OF INCOME

Three Months Ended March 31, 2015


					Penske
	Total				Automotive		Guarantor		Non-Guarantor
	Company		Eliminations		Group		Subsidiaries		Subsidiaries
	(In millions)
Revenues	$	4,482.9	$	—	$	—	$	2,348.3	$	2,134.6
Cost of sales		3,793.0		—		—		1,971.6		1,821.4
Gross profit		689.9		—		—		376.7		313.2
Selling, general and administrative expenses		535.8		—		6.7		293.2		235.9
Depreciation		18.6		—		0.4		10.2		8.0
Operating income		135.5		—		(7.1)		73.3		69.3
Floor plan interest expense		(10.3)		—		(0.7)		(5.2)		(4.4)
Other interest expense		(16.3)		—		(9.8)		(1.3)		(5.2)
Equity in earnings of affiliates		6.7		—		5.8		—		0.9
Equity in earnings of subsidiaries		—		(127.0)		127.0		—		—
Income from continuing operations before income taxes		115.6		(127.0)		115.2		66.8		60.6
Income taxes		(38.8)		42.8		(38.8)		(28.3)		(14.5)
Income from continuing operations		76.8		(84.2)		76.4		38.5		46.1
(Loss) income from discontinued operations, net of tax		(0.9)		1.2		(1.2)		(1.1)		0.2
Net income		75.9		(83.0)		75.2		37.4		46.3
Other comprehensive income (loss), net of tax		(55.1)		52.3		(55.1)		—		(52.3)
Comprehensive income		20.8		(30.7)		20.1		37.4		(6.0)
Less: Comprehensive income attributable to non-controlling interests		0.1		0.6		(0.6)		—		0.1
Comprehensive income attributable to Penske Automotive Group common stockholders	$	20.7	$	(31.3)	$	20.7	$	37.4	$	(6.1)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Three Months Ended March 31, 2016


			Penske
	Total		Automotive		Guarantor		Non‑Guarantor
	Company		Group		Subsidiaries		Subsidiaries
	(In millions)
Net cash provided by (used in) continuing operating activities	$	82.6	$	(12.5)	$	104.2	$	(9.1)
Investing activities:
Purchase of equipment and improvements		(46.8)		(0.4)		(26.4)		(20.0)
Acquisitions, net		(0.4)		—		—		(0.4)
Other		(25.7)		—		(0.3)		(25.4)
Net cash used in continuing investing activities		(72.9)		(0.4)		(26.7)		(45.8)
Financing activities:
Net borrowings of long-term debt		111.5		77.0		21.2		13.3
Net borrowings of floor plan notes payable—non-trade		54.9		0.3		28.5		26.1
Repurchases of common stock		(167.9)		(167.9)		—		—
Dividends		(23.3)		(23.3)		—		—
Other		(4.6)		—		—		(4.6)
Distributions from (to) parent		—		126.8		(126.8)		—
Net cash (used in) provided by continuing financing activities		(29.4)		12.9		(77.1)		34.8
Net cash provided by (used in) discontinued operations		2.2		—		(0.4)		2.6
Effect of exchange rate changes on cash and cash equivalents		0.7		—		—		0.7
Net change in cash and cash equivalents		(16.8)		—		—		(16.8)
Cash and cash equivalents, beginning of period		62.4		—		—		62.4
Cash and cash equivalents, end of period	$	45.6	$	—	$	—	$	45.6

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Three Months Ended March 31, 2015


			Penske
	Total		Automotive		Guarantor		Non‑Guarantor
	Company		Group		Subsidiaries		Subsidiaries
	(In millions)
Net cash provided by (used in) continuing operating activities	$	193.3	$	(10.6)	$	16.3	$	187.6
Investing activities:
Purchase of equipment and improvements		(33.7)		(0.5)		(19.2)		(14.0)
Acquisitions, net		(86.4)		—		(21.7)		(64.7)
Net cash used in continuing investing activities		(120.1)		(0.5)		(40.9)		(78.7)
Financing activities:
Net repayments of long-term debt		(139.3)		—		(1.3)		(138.0)
Net borrowings (repayments) of floor plan notes payable—non-trade		100.9		45.0		(9.1)		65.0
Payment of debt issuance costs		(1.2)		—		—		(1.2)
Repurchases of common stock		(14.0)		(14.0)		—		—
Dividends		(19.9)		(19.9)		—		—
Other		—		—		—		—
Distributions from (to) parent		—		—		1.2		(1.2)
Net cash (used in) provided by continuing financing activities		(73.5)		11.1		(9.2)		(75.4)
Net cash provided by discontinued operations		33.9		—		33.8		0.1
Effect of exchange rate changes on cash and cash equivalents		(3.1)		—		—		(3.1)
Net change in cash and cash equivalents		30.5		—		—		30.5
Cash and cash equivalents, beginning of period		36.3		—		—		36.3
Cash and cash equivalents, end of period	$	66.8	$	—	$	—	$	66.8