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SEC Filings

10-K
PENSKE AUTOMOTIVE GROUP, INC. filed this Form 10-K on 02/24/2017
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Table of Contents

 

PENSKE AUTOMOTIVE GROUP, INC.

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

 

(In millions, except share and per share amounts)

 

 

In December 2016, we sold our 90% ownership interest in i.M. Branded, a provider of dealership graphics and millwork, which we previously consolidated in our financial statements. The results of operations for this business are included within continuing operations for the years ended December 31, 2016, 2015, and 2014, as this business did not meet the criteria to be classified as held for sale and treated as discontinued operations.

 

In February 2015, we divested our car rental business that 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, 2015, and 2014.

 

 

5. Inventories

 

Inventories consisted of the following:

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

    

2016

    

2015

 

Retail automotive dealership new vehicles

 

$

2,153.0

 

$

2,218.6

 

Retail automotive dealership used vehicles

 

 

771.7

 

 

719.0

 

Retail automotive parts, accessories and other

 

 

119.1

 

 

113.6

 

Retail commercial truck dealership vehicles and parts

 

 

170.3

 

 

208.8

 

Commercial vehicle distribution vehicles and parts

 

 

194.1

 

 

203.5

 

Total inventories

 

$

3,408.2

 

$

3,463.5

 

 

We receive credits from certain vehicle manufacturers that reduce cost of sales when the vehicles are sold. Such credits amounted to $51.6 million, $43.7 million, and $39.7 million during the years ended December 31, 2016,  2015, and 2014, respectively.

 

6. Property and Equipment

 

Property and equipment consisted of the following:

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

    

2016

    

2015

 

Buildings and leasehold improvements

 

$

1,438.4

 

$

1,357.1

 

Furniture, fixtures and equipment

 

 

894.3

 

 

662.6

 

Total

 

$

2,332.7

 

$

2,019.7

 

Less: Accumulated depreciation

 

 

(526.2)

 

 

(499.6)

 

Property and equipment, net

 

$

1,806.5

 

$

1,520.1

 

 

 

Approximately $27.1 million of capitalized interest is included in buildings and leasehold improvements as of December 31, 2016 and 2015, respectively, and is being depreciated over the useful life of the related assets.

 

In the fourth quarter of 2016, we recorded $229.9 million within property and equipment to appropriately reflect deferred sales transactions in which we retained substantial risk of ownership and have accounted for such transactions as operating leases instead of revenues. We recorded $60.1 million within “Accrued expenses” and $182.4 million within “Other long-term liabilities” to reflect the deferred revenue and guaranteed residual value associated with these operating leases.

 

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