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SEC Filings

10-Q
PENSKE AUTOMOTIVE GROUP, INC. filed this Form 10-Q on 10/26/2017
Entire Document
 

Other Interest Expense

(In millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017 vs. 2016

 

 

    

2017

    

2016

    

Change

    

% Change

    

Other interest expense

 

$

79.2

 

$

61.8

 

$

17.4

 

28.2

%  

 

Other interest expense increased from 2016 to 2017 primarily due to the issuance of our $300.0 million 3.75% senior subordinated notes in August 2017 and 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, as well as an increase in applicable rates.

 

Equity in Earnings of Affiliates

(In millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017 vs. 2016

 

 

    

2017

    

2016

    

Change

    

% Change

    

Equity in earnings of affiliates

 

$

70.9

 

$

43.1

 

$

27.8

 

64.5

%  

 

Equity in earnings of affiliates increased from 2016 to 2017 primarily due to an increase in our investment in PTL from 9.0% to 23.4% in July 2016 and from 23.4% to 28.9% in September 2017. Equity in earnings of affiliates from PTL increased by $30.3 million from 2016 to 2017. This increase was partially offset by a decrease in earnings from our other non-automotive joint ventures and our retail automotive joint ventures in Germany and Spain.

 

Income Taxes

(In millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017 vs. 2016

 

 

    

2017

    

2016

    

Change

    

% Change

    

Income taxes

 

$

136.0

 

$

128.4

 

$

7.6

 

5.9

%  

 

Income taxes increased from 2016 to 2017 primarily due to a $27.3 million increase in our pre-tax income, offset by a decrease in our effective tax rate compared to the prior year.

 

Liquidity and Capital Resources

 

Our cash requirements are primarily for working capital, inventory financing, the acquisition of new businesses, the improvement and expansion of existing facilities, the purchase or construction of new facilities, debt service and repayments, dividends and potential repurchases of our outstanding securities under the program discussed below. Historically, these cash requirements have been met through cash flow from operations, borrowings under our credit agreements and floor plan arrangements, the issuance of debt securities, sale-leaseback transactions, mortgages, dividends and distributions from joint venture investments or the issuance of equity securities.

 

We have historically expanded our operations through organic growth and the acquisition of dealerships and other businesses. We believe that cash flow from operations, dividends and distributions from our joint venture investments and our existing capital resources, including the liquidity provided by our credit agreements and floor plan financing arrangements, will be sufficient to fund our existing operations and current commitments for at least the next twelve months. In the event we pursue significant acquisitions or other expansion opportunities, pursue significant repurchases of our outstanding securities, or refinance or repay existing debt, we may need to raise additional capital either through the public or private issuance of equity or debt securities or through additional borrowings, which sources of funds may not necessarily be available on terms acceptable to us, if at all. In addition, our liquidity could be negatively impacted in the event we fail to comply with the covenants under our various financing and operating agreements or in the event our floor plan financing is withdrawn.

 

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