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SEC Filings

10-K
PENSKE AUTOMOTIVE GROUP, INC. filed this Form 10-K on 02/24/2017
Entire Document
 

2014 to 2015 is primarily due to the expiration of our interest rate swaps, which reduced floor plan interest expense by $7.5 million compared to 2014, somewhat offset by a $2.8 million, or 7.3%, increase in same-store floor plan interest expense, coupled with a $2.7 million increase from net dealership acquisitions. The overall increases are primarily due to increases in amounts outstanding under floor plan arrangements, due in part to increased levels of inventory, and higher applicable rates.

 

Other Interest Expense

(In millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016 vs. 2015

 

 

 

 

 

 

 

2015 vs. 2014

 

 

    

2016

    

2015

    

Change

    

% Change

    

2015

    

2014

    

Change

    

% Change

 

Other interest expense

 

$

85.4

 

$

69.4

 

$

16.0

 

23.1

%  

$

69.4

 

$

52.8

 

$

16.6

 

31.4

%  

 

The increase in other interest expense from 2015 to 2016 is primarily due to the issuance of our $500.0 million 5.50% senior subordinated notes in May 2016, as well as an increase in outstanding revolver borrowings under the U.S. and U.K. credit agreements and our Australia working capital loan agreement. The increase from 2014 to 2015 is primarily due to an increased level of borrowing in 2015 relating to the issuance of our $300.0 million 5.375% senior subordinated notes in November 2014 and additional interest expense attributable to acquisitions we completed in the fourth quarter of 2014 and during 2015.

 

Gain on Investment

 

We recognized a gain of $16.0 million in 2014 relating to the revaluation at fair value of a previously held non-controlling interest in PTG, of which we acquired a controlling interest in November 2014.

 

Equity in Earnings of Affiliates

(In millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016 vs. 2015

 

 

 

 

 

 

 

2015 vs. 2014

 

 

    

2016

    

2015

    

Change

    

% Change

    

2015

    

2014

    

Change

    

% Change

 

Equity in earnings of affiliates

 

$

69.5

 

$

39.3

 

$

30.2

 

76.8

%  

$

39.3

 

$

40.8

 

$

(1.5)

 

(3.7)

%  

 

The increase in equity in earnings of affiliates from 2015 to 2016 is primarily due to an increase in our investment in PTL from 9.0% to 23.4% in July 2016. Equity in earnings of affiliates from PTL increased by $29.4 million from 2015 to 2016. The remaining increase is primarily due to an increase in earnings from our investment in Japan made during the first quarter of 2016. The decrease from 2014 to 2015 is primarily attributable to acquiring a controlling interest in PTG during the fourth quarter of 2014 and consolidating that  business in our results from that point forward. The decrease is somewhat offset by an increase in equity in earnings from our investment in PTL.

 

Income Taxes

(In millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2016 vs. 2015

 

 

 

 

 

 

 

2015 vs. 2014

 

 

    

2016

    

2015

    

Change

    

% Change

    

2015

    

2014

    

Change

    

% Change

 

Income taxes

 

$

160.7

 

$

158.0

 

$

2.7

 

1.7

%  

$

158.0

 

$

153.1

 

$

4.9

 

3.2

%  

 

Income taxes increased from 2015 to 2016 primarily due to a $16.2 million increase in our pre-tax income compared to the prior year,  partially offset by a decrease in our effective tax rate compared to the prior year.  The decrease in our effective tax rate in the current year is partially due to a decrease in income tax expense resulting from an elimination of $5.1 million of deferred tax liabilities related to our acquisition of the remaining ownership interests of Premier Truck Group during 2016. The increase from 2014 to 2015 is primarily due to a $34.0 million increase in our pre-tax income compared to the prior year, partially offset by a decrease in our effective tax rate compared to the prior year.

 

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