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SEC Filings

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

of 90 days or less, and we are generally required to repay floor plan advances at the earlier of the sale of the vehicles that have been financed or the stated maturity.

 

The agreements typically grant a security interest in substantially all of the assets of our dealership and distribution subsidiaries and, in the U.S., Australia and New Zealand, are guaranteed or partially guaranteed by us. Interest rates under the arrangements are variable and increase or decrease based on changes in the prime rate, defined LIBOR, Finance House Base Rate, the Euro Interbank Offered Rate, the Canadian Prime Rate, or the Australian or New Zealand Bank Bill Swap Rate. To date, we have not experienced any material limitation with respect to the amount or availability of financing from any institution providing us vehicle financing. We also receive non-refundable credits from certain of our vehicle manufacturers, which are treated as a reduction of cost of sales as vehicles are sold.

 

Long-Term Debt Obligations

 

As of September 30, 2017, we had the following long-term debt obligations outstanding:

 

 

 

 

 

 

 

    

September 30,

 

(In millions)

 

2017

 

U.S. credit agreement — revolving credit line

 

$

216.0

 

U.K. credit agreement — revolving credit line

 

 

107.2

 

U.K. credit agreement — overdraft line of credit

 

 

 —

 

5.75% senior subordinated notes due 2022

 

 

545.7

 

5.375% senior subordinated notes due 2024

 

 

297.1

 

5.50% senior subordinated notes due 2026

 

 

494.2

 

3.75% senior subordinated notes due 2020

 

 

296.2

 

Australia working capital loan agreement

 

 

32.8

 

Mortgage facilities

 

 

211.8

 

Other

 

 

37.1

 

Total long-term debt

 

$

2,238.1

 

 

As of September 30, 2017, we were in compliance with all covenants under our credit agreements and we believe we will remain in compliance with such covenants for the next twelve months. Refer to the disclosures provided in Part I, Item 1, Note 7 of the Notes to our Consolidated Condensed Financial Statements for a detailed description of our long-term debt obligations.

 

Short-Term Borrowings

 

We have four principal sources of short-term borrowings: the revolving portion of the U.S. credit agreement, the revolving portion of the U.K. credit agreement, our Australian working capital loan agreement and the floor plan agreements that we utilize to finance our vehicle inventories. We are also able to access availability under the floor plan agreements to fund our cash needs, including payments made relating to our higher interest rate revolving credit agreements.

 

During the nine months ended September 30, 2017, outstanding revolving commitments varied between $120.0 million and $532.0 million under the U.S. credit agreement, between £14.0 million and £140.0 million ($18.8 million and $187.6 million) under the U.K. credit agreement’s revolving credit line (excluding the overdraft facility), and between AU $19.5 million and AU $53.8 million ($15.3 million and $42.1 million) under the Australia working capital loan agreement. The amounts outstanding under our floor plan agreements varied based on the timing of the receipt and expenditure of cash in our operations, driven principally by the levels of our vehicle inventories.

 

PTL Dividends

 

We currently hold a 28.9% ownership interest in Penske Truck Leasing. In July 2016, we increased our ownership interest in PTL from 9.0% to 23.4% as a result of our acquisition of an additional 14.4% ownership interest, and in September 2017, we acquired an additional 5.5% ownership interest, as discussed previously. We receive pro rata cash distributions relating to this investment, typically in April, May, August and November of each year. During the nine

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