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Penske Automotive Reports Third Quarter Results
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Adjusted Income From Continuing Operations Increases to $30.9 Million
Adjusted EPS Increases 21% to $0.34
Adjusted SG&A Decreases 90 Basis Points to 81.3% of Gross Profit

BLOOMFIELD HILLS, Mich., Oct 30, 2009 (BUSINESS WIRE) -- Penske Automotive Group, Inc. (NYSE: PAG), an international automotive retailer, today reported third quarter adjusted income from continuing operations attributable to PAG of $30.9 million, or $0.34 per share attributable to common shareholders, which compares to $26.6 million, or $0.28 per share, in the third quarter last year. Actual third quarter income from continuing operations attributable to PAG was $27.6 million, or $0.30 per share, compared with $23.9 million, or $0.25 per share, in the prior year. Net income attributable to common shareholders in the third quarter was $27.4 million, or $0.30 per share, compared with $22.2 million, or $0.24 per share, in the prior year.

Adjusted third quarter 2009 earnings exclude $3.4 million ($0.04 per share) of after-tax expenses, including: $1.9 million ($0.02 per share) incurred in connection with the Company's terminated acquisition of the Saturn brand; $0.8 million ($0.01 per share) relating to our decision to close three franchises in the U.S.; and $0.7 million ($0.01 per share) relating to interest rate hedges of our variable rate floor plan notes payable due to decreases in outstanding floor plan notes payable below levels anticipated when the hedges were initiated. Adjusted third quarter 2008 earnings exclude an aggregate of $2.7 million ($0.03 per share) of after-tax costs related to severance, the termination of an acquisition agreement, and insurance deductibles relating to Hurricane Ike.

Total revenue in the third quarter was $2.6 billion compared to $3.0 billion in the same period last year. Total retail sales revenues decreased 10.4% versus the comparable prior year period, driven by continuing broad-based weakness in the U.S. automotive market compared to the prior year. Same-store total retail revenues declined 12.4%. Excluding changes relating to exchange rates, total same-store retail revenues declined 8.0%, including 3.5% for service and parts revenues.

"Our retail operations performed well during the third quarter, experiencing continued sequential improvement compared with the second quarter," said Penske Automotive Chairman Roger Penske. "The cash for clunkers program provided a welcome boost to our U.S. business during the quarter, and our U.K. operation continues to outperform in its market. Most importantly, our adjusted selling, general and administrative expenses declined by $32.1 million versus the prior year, improving 90 basis points as a percentage of gross profit, as our business continues to demonstrate the resiliency of the automotive retail model."

Total revenues for the nine months ended September 30, 2009, decreased 25.4% to $7.1 billion. Adjusted income from continuing operations attributable to PAG for the nine months was $60.5 million, or $0.66 per share attributable to common shareowners, which compare to $97.4 million and $1.03 per share, in the comparable period in the prior year. Adjusted 2009 earnings exclude $6.5 million, or $0.07 per share, of after-tax gain relating to the repurchase in the first quarter of $69 million principal amount of the Company's 3.5% Senior Subordinated Convertible Notes due 2026 and the third quarter costs outlined above relating to Saturn, the franchise closures and hedging. Adjusted 2008 earnings exclude the severance, transaction termination costs and deductibles outlined above. Actual income from continuing operations attributable to PAG and net income for the nine months ended September 30, 2009, were $63.6 million, or $0.69 per share, and $57.8 million, or $0.63 per share, respectively.

smart USA

During the third quarter, smart USA wholesaled 3,401 units. The challenging new vehicle sales environment in the U.S. continues to impact smart fortwo vehicle sales. In response, smart USA introduced new finance and marketing campaigns in October designed to sell through the balance of the 2009 model year inventory, which resulted in an after-tax reserve of $3.1 million, or $0.03 per share, in the third quarter. For the year, smart USA now expects to wholesale approximately 15,700 units.

Securities Repurchase Authority

The Company's Board of Directors previously approved repurchases of up to $150 million of the Company's outstanding common stock, debt and convertible debt. During the third quarter, the Company did not repurchase any securities and has $44 million remaining under the program.

Conference Call

Penske Automotive will host a conference call discussing financial results relating to the third quarter of 2009 on October 30, 2009, at 2:00 p.m.EDT. To listen to the conference call, participants must dial (800) 230-1085 [International, please dial (612) 288-0340]. The call will be simultaneously broadcast over the Internet through the Penske Automotive Group website at www.penskeautomotive.com.

About Penske Automotive

Penske Automotive Group, Inc., headquartered in Bloomfield Hills, Michigan, operates 310 retail automotive franchises, representing 40 different brands and 25 collision repair centers. Penske Automotive, which sells new and previously owned vehicles, finance and insurance products and replacement parts, and offers maintenance and repair services on all brands it represents. Penske Automotive has 160 franchises in 17 states and Puerto Rico and 150 franchises located outside the United States, primarily in the United Kingdom.

Penske Automotive, through its wholly-owned subsidiary smart USA Distributor LLC, is the exclusive distributor of the smart fortwo vehicle and related parts in the United States. smart USA supports 79 smart retail centers in the United States. Penske Automotive is a member of the Fortune 500 and Russell 1000 and has approximately 14,000 employees. smart and fortwo are registered trademarks of Daimler AG.

Caution Concerning Forward Looking Statements

Statements in this press release may involve forward-looking statements, including forward-looking statements regarding Penske Automotive Group, Inc.'s future sales potential. Actual results may vary materially because of risks and uncertainties, including external factors such as consumer credit conditions, any potential restructuring of the U.S. automotive sector, macro-economic factors, interest rate fluctuations, changes in consumer spending and other factors over which management has no control. These forward-looking statements should be evaluated together with additional information about Penske Automotive's business, markets, conditions and other uncertainties which could affect Penske Automotive's future performance. These risks and uncertainties are addressed in Penske Automotive's Form 10-K for the year ended December 31, 2008, and its other filings with the Securities and Exchange Commission ("SEC"). This press release speaks only as of its date, and Penske Automotive disclaims any duty to update the information herein.

This release contains certain non-GAAP financial measures as defined under SEC rules, such as adjusted income from continuing operations attributable to PAG and related earnings per share, which exclude certain items disclosed in the release. The Company has reconciled these measures to the most directly comparable GAAP measures in the release. The Company believes that these non-GAAP financial measures improve the transparency of the Company's disclosure and the period-to-period comparability of the Company's results from operations.

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Statements of Income

(Amounts In Thousands, Except Per Share Data)

(Unaudited)

Third Quarter

2009

2008

Revenues:
New Vehicle $1,339,016 $1,548,507
Used Vehicle 672,764 711,750
Finance and Insurance, Net 60,761 67,594
Service and Parts 336,313 359,186
Distribution 36,451 85,567
Fleet and Wholesale Vehicle 142,617 197,811
Total Revenues 2,587,922 2,970,415
Cost of Sales:
New Vehicle 1,226,127 1,421,906
Used Vehicle 613,384 659,814
Service and Parts 150,511 159,526
Distribution 36,353 72,362
Fleet and Wholesale Vehicle 138,592 199,489
Total Cost of Sales 2,164,967 2,513,097
Gross Profit 422,955 457,318
SG&A Expenses 347,968 380,176
Depreciation and Amortization 14,011 13,966
Operating Income 60,976 63,176
Floor Plan Interest Expense (9,080 ) (15,312 )
Other Interest Expense (13,468 ) (16,159 )
Debt Discount Amortization (3,135 ) (3,496 )
Equity in Earnings of Affiliates 7,536 8,995
Income from Continuing Operations Before

Income Taxes

42,829

37,204

Income Taxes (15,033 ) (13,150 )
Income from Continuing Operations 27,796 24,054
Loss from Discontinued Operations, Net of Tax (134 ) (1,682 )
Net Income 27,662 22,372
Income Attributable to Non-Controlling Interests (239 ) (189 )
Net Income Attributable to Common Shareholders $27,423 $22,183
Income from Continuing Operations Per Diluted Share $0.30 $0.25
Income Per Diluted Share $0.30 $0.24
Diluted Weighted Average Shares Outstanding 91,625 93,801
Amounts Attributable to Common Shareholders:
Reported Income from Continuing Operations $27,796 $24,054
Income Attributable to Non-Controlling Interests (239 ) (189 )
Income from Continuing Operations, net of tax 27,557 23,865
Loss from Discontinued Operations, net of tax (134 ) (1,682 )
Net Income $27,423 $22,183

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Statements of Income

(Amounts In Thousands, Except Per Share Data)

(Unaudited)

Nine Months

2009

2008

Revenues:
New Vehicle $3,401,478 $4,899,269
Used Vehicle 1,944,098 2,309,456
Finance and Insurance, Net 163,664 216,573
Service and Parts 995,456 1,076,901
Distribution 169,716 247,758
Fleet and Wholesale Vehicle 388,266 720,190
Total Revenues 7,062,678 9,470,147
Cost of Sales:
New Vehicle 3,131,177 4,491,775
Used Vehicle 1,769,500 2,131,717
Service and Parts 449,903 474,857
Distribution 150,369 208,584
Fleet and Wholesale Vehicle 376,725 722,332
Total Cost of Sales 5,877,674 8,029,265
Gross Profit 1,185,004 1,440,882
SG&A Expenses 988,522 1,166,368
Depreciation and Amortization 40,654 40,623
Operating Income 155,828 233,891
Floor Plan Interest Expense (27,571 ) (48,512 )
Other Interest Expense (41,610 ) (40,451 )
Debt Discount Amortization (9,908 ) (10,488 )
Equity in Earnings of Affiliates 11,716 13,322
Gain on Debt Repurchase 10,429 --
Income from Continuing Operations Before

Income Taxes

98,884

147,762

Income Taxes (35,059 ) (52,055 )
Income from Continuing Operations 63,825 95,707
Loss from Discontinued Operations, Net of Tax (5,794 ) (2,747 )
Net Income 58,031 92,960
Income Attributable to Non-Controlling Interests (247 ) (1,052 )
Net Income Attributable to Common Shareholders $57,784 $91,908
Income from Continuing Operations Per Diluted Share $0.69 $1.00
Income Per Diluted Share $0.63 $0.97
Diluted Weighted Average Shares Outstanding 91,563 94,841
Amounts Attributable to Common Shareholders:
Reported Income from Continuing Operations $63,825 $95,707
Income Attributable to Non-Controlling Interests (247 ) (1,052 )
Income from Continuing Operations, net of tax 63,578 94,655
Loss from Discontinued Operations, net of tax (5,794 ) (2,747 )
Net Income $57,784 $91,908

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Condensed Balance Sheets

(Amounts In Thousands)

(Unaudited)

9/30/09

12/31/08

Assets
Cash and Cash Equivalents $29,540 $20,108
Accounts Receivable, Net 322,539 294,048
Inventories 1,174,393 1,589,105
Other Current Assets 102,805 88,251
Assets Held for Sale

6,780

15,534

Total Current Assets 1,636,057 2,007,046
Property and Equipment, Net 711,766 662,121
Intangibles 1,009,902 974,035
Other Long-Term Assets

315,175

318,947

Total Assets $3,672,900 $3,962,149
Liabilities and Equity
Floor Plan Notes Payable $708,014 $964,783
Floor Plan Notes Payable - Non-Trade 380,453 506,688
Accounts Payable 183,143 178,282
Accrued Expenses 251,076 195,994
Current Portion Long-Term Debt 15,122 11,305
Liabilities Held for Sale

7,718

23,060

Total Current Liabilities 1,545,526 1,880,112
Long-Term Debt 955,469 1,052,060
Other Long-Term Liabilities

252,936

221,556

Total Liabilities 2,753,931 3,153,728
Equity

918,969

808,421

Total Liabilities and Equity $3,672,900 $3,962,149

PENSKE AUTOMOTIVE GROUP, INC.

Selected Data

Third Quarter

Nine Months

2009

2008

2009

2008

Total Retail Units:
New Retail 41,486 45,177 105,246 140,402
Used Retail

25,636

25,997

78,425

79,954

Total Retail 67,122 71,174 183,671 220,356
smart Wholesale Units 3,401 6,683 12,774 19,329
Same-Store Retail Units:
New Same-Store Retail 40,404 44,806 99,596 137,334
Used Same-Store Retail

24,703

25,813

73,241

78,259

Total Same-Store Retail 65,107 70,619 172,837 215,593
Same-Store Retail Revenue:
New Vehicles $1,304,861 $1,539,015 $3,206,608 $4,790,478
Used Vehicles 646,433 707,390 1,801,094 2,253,792
Finance and Insurance, Net 59,073 67,222 155,275 212,621
Service and Parts

328,400

356,221

936,472

1,046,463

Total Same-Store Retail $2,338,767 $2,669,848 $6,099,449 $8,303,354
Same-Store Retail Revenue Growth:
New Vehicles (15.2%) (21.1%) (33.1%) (12.0%)
Used Vehicles (8.6%) (13.0%) (20.1%) (4.9%)
Finance and Insurance, Net (12.1%) (16.1%) (27.0%) (5.6%)
Service and Parts (7.8%) (2.8%) (10.5%) (0.5%)
Revenue Mix:
New Vehicles 51.7% 52.1% 48.2% 51.7%
Used Vehicles 26.0% 24.0% 27.5% 24.4%
Finance and Insurance, Net 2.4% 2.3% 2.3% 2.3%
Service and Parts 13.0% 12.1% 14.1% 11.4%
Distribution 1.4% 2.9% 2.4% 2.6%
Fleet and Wholesale 5.5% 6.6% 5.5% 7.6%
Average Retail Selling Price:
New Vehicles $32,276 $34,276 $32,319 $34,895
Used Vehicles 26,243 27,378 24,789 28,885
Gross Margin 16.3% 15.4% 16.8% 15.2%
Retail Gross Margin - by Product:
New Vehicles 8.4% 8.2% 7.9% 8.3%
Used Vehicles 8.8% 7.3% 9.0% 7.7%
Service and Parts 55.2% 55.6% 54.8% 55.9%

PENSKE AUTOMOTIVE GROUP, INC.

Selected Data (Continued)

Third Quarter

Nine Months

2009

2008

2009

2008

Gross Profit per Retail Transaction:
New Vehicles $2,721 $2,802 $2,568 $2,902
Used Vehicles 2,316 1,998 2,226 2,223
Finance and Insurance 905 950 891 983
Brand Mix:
BMW 21% 23% 21% 22%
Toyota / Lexus 20% 19% 19% 19%
Honda / Acura 14% 15% 15% 15%
Audi 10% 9% 10% 9%
Mercedes Benz 9% 10% 9% 10%
Porsche 4% 3% 4% 3%
Land Rover 4% 4% 4% 4%
Ferrari / Maserati 3% 3% 3% 4%
Other

15%

14%

15%

14%

100% 100% 100% 100%
Premium 63% 65% 64% 65%
Foreign 32% 31% 31% 30%
Domestic Big 3

5%

4%

5%

5%

100% 100% 100% 100%
Revenue Mix:
U.S. 64% 64% 64% 63%
International

36%

36%

36%

37%

100% 100% 100% 100%
Rent Expense $41,067 $40,580 $123,348 $120,197

9/30/09

12/31/08

Debt to Total Capital Ratio 51% 57%
Debt Covenant Compliance (U.S.):
Current Ratio (min 1.00:1) 1.06:1 1.07:1
Fixed Charge Coverage Ratio (min 1.00:1) 1.16:1 1.24:1
Ratio of Non-Floorplan Debt to Stockholders' Equity (max 1.30:1) 0.69:1 0.86:1
Funded Debt to EBITDA Ratio (max 2.50:1) 1.44:1 1.26:1
Debt Covenant Compliance (U.K.):
Capital Expenditures (max £50 million) £14.8 £29.5
EBITAR to Fixed Charges (min 1.50:1) 2.21x 1.76x
Debt to EBITAR (max 3.25:1) 1.16x 1.45x

SOURCE: Penske Automotive Group, Inc.

Penske Automotive Group, Inc.
Bob O'Shaughnessy
Chief Financial Officer
248-648-2800
boshaughnessy@penskeautomotive.com
or
Anthony R. Pordon
Senior Vice President
248-648-2540
tpordon@penskeautomotive.com

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