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Press Release

Penske Automotive Reports Fourth Quarter Results
Same-Store Retail Revenues Increase 15.5%Income From Continuing Operations Increases to $19.3 Million and Related Earnings Per Share Increases to $0.21SG&A Improves to 83.3% of Gross Profit$44.1 Million of Convertible Notes Purchased in Q1 2010
BLOOMFIELD HILLS, Mich., Feb 19, 2010 (BUSINESS WIRE) -- Penske Automotive Group, Inc. (NYSE: PAG), an international automotive retailer, today reported fourth quarter income from continuing operations attributable to PAG of $19.3 million, or $0.21 per share, which compares to an adjusted loss of $4.2 million, or $0.05 per share, in the fourth quarter last year as shown in the attached reconciliation tables. Net income attributable to common shareholders in the fourth quarter was $18.7 million, or $0.20 per share.

Total revenues in the fourth quarter increased 13.4% to $2.4 billion. Total retail revenues increased 18.2% to $2.3 billion, including a same-store retail revenue increase of 15.5%. During the quarter, selling, general and administrative expenses as a percentage of gross profit declined to 83.3%, due in part to the cost savings initiatives instituted over the last 18 months.

Commenting on the Company's performance, Chairman Roger Penske said, "I am pleased by the strong fourth quarter results, which were driven by a strong performance in the U.K., as well as the continuing benefit from our cost-saving initiatives. In particular, our premium/luxury retail businesses performed well, generating a 20.4% increase in same-store new retail unit sales, including a 29.9% increase in the U.K. I am also pleased by the 18.2% increase in our retail revenues, including growth of 8.6% and 38.7% in the U.S. and U.K., respectively, despite the continuing economic challenges in all of our markets."

Total revenues for the twelve months ended December 31, 2009, decreased 18.2% to $9.5 billion. Adjusted income from continuing operations attributable to PAG for the twelve months was $80.5 million, or $0.88 per share attributable to common shareowners, which compares to adjusted income of $92.7 million, or $0.99 per share, in the prior year as shown in the attached reconciliation tables. Actual income from continuing operations attributable to PAG and net income for the twelve months ended December 31, 2009, were $83.6 million, or $0.91 per share, and $76.5 million, or $0.83 per share, respectively.

smart USA

During the year, smart USA wholesaled 13,772 units, including 998 units in the fourth quarter. smart USA has increased incentives on the 2009 smart fortwo. As a result, smart USA recorded $1.4 million, or $0.02 per share, of after tax reserves in the fourth quarter.

Securities Repurchase Authority

The Company did not repurchase any securities during the fourth quarter of 2009. However, the Company purchased $44.1 million principal amount of its 3.5% Senior Subordinated Convertible Notes due 2026 for $44.4 million in cash during February 2010, which fully utilized the Company's remaining securities repurchase authority. After these purchases, approximately $262 million principal amount of the 3.5% Senior Subordinated Convertible Notes due 2026 remain outstanding.

The Company's Board of Directors has granted new authorization for the Company to repurchase up to $150.0 million of its outstanding common stock, debt and convertible debt, depending on market conditions, price and other factors. Securities may be acquired from time to time either through open market purchases, negotiated transactions or other means. The Company currently contemplates purchasing any securities under this program using cash flow from operations and credit availability in the U.S.

Conference Call

Penske Automotive will host a conference call discussing financial results relating to the fourth quarter of 2009 on February 19, 2010, at 2:00 p.m.Eastern Time. To listen to the conference call, participants must dial (800) 230-1092 [International, please dial (612) 288-0329]. The call will also be simultaneously broadcast over the Internet through the Penske Automotive Group website at www.penskeautomotive.com.

About Penske Automotive

Penske Automotive Group, Inc. (www.penskeautomotive.com), headquartered in Bloomfield Hills, Michigan, operates 312 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, has 164 franchises in 17 states and Puerto Rico and 148 franchises located outside the United States, primarily in the United Kingdom.

Penske Automotive, through its wholly-owned subsidiary smart USA Distributor LLC (www.smartusa.com), is the exclusive distributor of the smart fortwo vehicle and related parts in the United States. smart USA supports more than 75 smart retail centers in the United States.

Penske Automotive is a member of the Fortune 500 and Russell 1000 and has approximately 14,100 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, adverse conditions affecting a particular manufacturer, 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.

Non-GAAP Financial Measures

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. The Company has reconciled these measures to the most directly comparable GAAP measures in the attached reconciliation tables. The Company believes that these non-GAAP financial measures improve the transparency of the Company's disclosure by providing 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)

Fourth Quarter

2009

2008

Revenues:
New Vehicle $1,256,841 $1,040,676
Used Vehicle 648,469 528,360
Finance and Insurance, Net 58,364 42,411
Service and Parts 324,124 324,406
Distribution 9,443 101,051
Fleet and Wholesale Vehicle 146,932 117,689
Total Revenues 2,444,173 2,154,593
Cost of Sales:
New Vehicle 1,151,317 961,706
Used Vehicle 599,195 492,834
Service and Parts 142,780 147,469
Distribution 10,631 85,951
Fleet and Wholesale Vehicle 145,832 119,117
Total Cost of Sales 2,049,755 1,807,077
Gross Profit 394,418 347,516
SG&A Expenses 328,710 968,678
Depreciation and Amortization 13,523 13,120
Operating Income (Loss) 52,185 (634,282)
Floor Plan Interest Expense (8,099) (15,649)
Other Interest Expense (13,524) (13,928)
Debt Discount Amortization (3,135) (3,496)
Equity in Earnings of Affiliates 2,092 3,191

Income (Loss) from Continuing Operations Before Income Taxes

29,519

(664,164)

Income Taxes (9,984) 157,569
Income (Loss) from Continuing Operations 19,535 (506,595)
Loss from Discontinued Operations, Net of Tax (646) (5,268)
Net Income (Loss) 18,889 (511,863)
Income Attributable to Non-Controlling Interests (212) (81)
Net Income (Loss) Attributable to Common Shareholders $18,677 ($511,944)
Income (Loss) from Continuing Operations Per Share $0.21 ($5.53)
Income (Loss) Per Share $0.20 ($5.59)
Weighted Average Shares Outstanding 91,780 91,633
Amounts Attributable to Common Shareholders:
Reported Income (Loss) from Continuing Operations $19,535 ($506,595)
Income Attributable to Non-Controlling Interests (212) (81)
Income (Loss) from Continuing Operations, net of tax 19,323 (506,676)
Income (Loss) from Discontinued Operations, net of tax (646) (5,268)
Net Income (Loss) $18,677 ($511,944)
PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Statements of Income
(Amounts In Thousands, Except Per Share Data)
(Unaudited)

Twelve Months

2009

2008

Revenues:
New Vehicle $4,662,418 $5,935,857
Used Vehicle 2,600,691 2,848,053
Finance and Insurance, Net 222,672 259,255
Service and Parts 1,321,580 1,403,545
Distribution 179,159 348,809
Fleet and Wholesale Vehicle 536,585 841,617
Total Revenues 9,523,105 11,637,136
Cost of Sales:
New Vehicle 4,286,224 5,449,476
Used Vehicle 2,376,358 2,634,607
Service and Parts 593,463 623,032
Distribution 161,000 294,535
Fleet and Wholesale Vehicle 523,749 845,282
Total Cost of Sales 7,940,794 9,846,932
Gross Profit 1,582,311 1,790,204
SG&A Expenses 1,318,980 2,137,362
Depreciation and Amortization 54,234 53,877
Operating Income (Loss) 209,097 (401,035)
Floor Plan Interest Expense (35,662) (64,188)
Other Interest Expense (55,201) (54,504)
Debt Discount Amortization (13,043) (13,984)
Equity in Earnings of Affiliates 13,808 16,513
Gain on Debt Repurchase 10,429 --

Income (Loss) from Continuing Operations Before Income Taxes

129,428

(517,198)

Income Taxes (45,386) 105,741
Income (Loss) from Continuing Operations 84,042 (411,457)
Loss from Discontinued Operations, Net of Tax (7,122) (7,446)
Net Income (Loss) 76,920 (418,903)
Income Attributable to Non-Controlling Interests (459) (1,133)
Net Income (Loss) Attributable to Common Shareholders $76,461 ($420,036)
Income (Loss) from Continuing Operations Per Share $0.91 ($4.39)
Income (Loss) Per Share $0.83 ($4.47)
Weighted Average Shares Outstanding 91,653 93,958
Amounts Attributable to Common Shareholders:
Reported Income (Loss) from Continuing Operations $84,042 ($411,457)
Income Attributable to Non-Controlling Interests (459) (1,133)
Income (Loss) from Continuing Operations, net of tax 83,583 (412,590)
Loss from Discontinued Operations, net of tax (7,122) (7,446)
Net Income (Loss) $76,461 ($420,036)
PENSKE AUTOMOTIVE GROUP, INC.
Consolidated Condensed Balance Sheets
(Amounts In Thousands)
(Unaudited)

12/31/09

12/31/08

Assets
Cash and Cash Equivalents $13,769 $17,108
Accounts Receivable, Net 322,598 294,230
Inventories 1,306,532 1,586,914
Other Current Assets 95,560 88,437
Assets Held for Sale 5,005 20,574
Total Current Assets 1,743,464 2,007,263
Property and Equipment, Net 726,835 662,898
Intangibles 1,012,079 973,041
Other Long-Term Assets 313,629 318,947
Total Assets $3,796,007 $3,962,149
Liabilities and Equity
Floor Plan Notes Payable $772,926 $961,993
Floor Plan Notes Payable - Non-Trade 423,316 507,404
Accounts Payable 190,325 178,994
Accrued Expenses 227,725 196,704
Current Portion Long-Term Debt 12,442 11,305
Liabilities Held for Sale 3,083 24,289
Total Current Liabilities 1,629,817 1,880,689
Long-Term Debt 933,966 1,052,060
Other Long-Term Liabilities 286,185 220,979
Total Liabilities 2,849,968 3,153,728
Equity 946,039 808,421
Total Liabilities and Equity $3,796,007 $3,962,149
PENSKE AUTOMOTIVE GROUP, INC.
Selected Data

Fourth Quarter

Twelve Months

2009

2008

2009

2008

Total Retail Units:
New Retail 35,252 31,275 140,914 171,554
Used Retail 23,450 21,668 102,457 102,032
Total Retail 58,702 52,943 243,371 273,586
smart Wholesale Units 998 7,725 13,772 27,052
Same-Store Retail Units:
New Same-Store Retail 34,282 31,025 133,317 167,232
Used Same-Store Retail 22,689 21,448 95,731 99,343
Total Same-Store Retail 56,971 52,473 229,048 266,575
Same-Store Retail Revenue:
New Vehicles $1,220,792 $1,033,030 $4,388,636 $5,776,277
Used Vehicles 623,957 523,754 2,406,759 2,763,296
Finance and Insurance, Net 56,608 42,214 211,028 253,797
Service and Parts 315,673 320,807 1,236,194 1,352,302
Total Same-Store Retail $2,217,030 $1,919,805 $8,242,617 $10,145,672
Same-Store Retail Revenue Growth:
New Vehicles 18.2% (39.8%) (24.0%) (18.3%)
Used Vehicles 19.1% (30.4%) (12.9%) (10.6%)
Finance and Insurance, Net 34.1% (38.7%) (16.9%) (12.9%)
Service and Parts (1.6%) (9.3%) (8.6%) (2.5%)
Revenue Mix:
New Vehicles 51.4% 48.3% 49.0% 51.0%
Used Vehicles 26.5% 24.5% 27.3% 24.5%
Finance and Insurance, Net 2.4% 2.0% 2.3% 2.2%
Service and Parts 13.3% 15.1% 13.9% 12.1%
Distribution 0.4% 4.7% 1.9% 3.0%
Fleet and Wholesale 6.0% 5.4% 5.6% 7.2%
Average Retail Selling Price:
New Vehicles $35,653 $33,275 $33,087 $34,601
Used Vehicles 27,653 24,384 25,383 27,913
Gross Margin 16.1% 16.1% 16.6% 15.4%
Retail Gross Margin - by Product:
New Vehicles 8.4% 7.6% 8.1% 8.2%
Used Vehicles 7.6% 6.7% 8.6% 7.5%
Service and Parts 55.9% 54.5% 55.1% 55.6%
PENSKE AUTOMOTIVE GROUP, INC.
Selected Data (Continued)

Fourth Quarter

Twelve Months

2009

2008

2009

2008

Gross Profit per Retail Transaction:
New Vehicles $2,993 $2,525 $2,670 $2,835
Used Vehicles 2,101 1,639 2,190 2,092
Finance and Insurance 994 801 915 948
Brand Mix:
BMW 22% 23% 21% 22%
Toyota / Lexus 19% 19% 19% 19%
Honda / Acura 13% 15% 14% 15%
Mercedes Benz 11% 10% 10% 10%
Audi 10% 9% 10% 9%
Land Rover 5% 3% 4% 4%
Porsche 4% 3% 4% 3%
Ferrari / Maserati 3% 3% 3% 3%
Other 13% 15% 15% 15%
100% 100% 100% 100%
Premium 67% 65% 65% 65%
Foreign 29% 31% 30% 30%
Domestic Big 3 4% 4% 5% 5%
100% 100% 100% 100%
Revenue Mix:
U.S. 62% 69% 63% 64%
International 38% 31% 37% 36%
100% 100% 100% 100%
Rent Expense $41,790 $39,659 $165,256 $160,113

12/31/09

12/31/08

Debt to Total Capital Ratio 50% 57%
Debt Covenant Compliance (U.S.):
Current Ratio (min 1.00:1) 1.07:1 1.07:1
Fixed Charge Coverage Ratio (min 1.00:1) 1.29:1 1.24:1

Ratio of Non-Floorplan Debt to Stockholders' Equity (max 1.30:1)

0.66:1 0.86:1
Funded Debt to EBITDA Ratio (max 2.50:1) 1.11:1 1.26:1
Debt Covenant Compliance (U.K.):
Capital Expenditures (max £50 million) £12.7 £29.5
EBITAR to Fixed Charges (min 1.50:1) 2.72x 1.76x
Debt to EBITAR (max 3.25:1) 0.77x 1.45x
PENSKE AUTOMOTIVE GROUP, INC.
Selected Data (Continued)

Reconciliation of reported income from continuing operations attributable to PAG and related earnings per share to adjusted income from continuing operations attributable to PAG and related earnings per share for 2009:

Twelve Months 2009

Earnings

EPS

Income from continuing operations attributable to PAG

$83,583

$0.91

Gain on debt repurchase (6,518) (0.07)
Costs relating to terminated Saturn transaction

1,926

0.02

Franchise closure/relocation costs 778 0.01
Hedge de-designation costs 686 0.01
Adjusted income from continuing operations attributable to PAG

$80,455

$0.88

Reconciliation of reported income from continuing operations attributable to PAG and related earnings per share to adjusted income from continuing operations attributable to PAG and related earnings per share for 2008:

Fourth Quarter 2008

Twelve Months 2008

Earnings

EPS

Earnings

EPS

Income from continuing operations attributable to PAG

($506,676)

($5.53)

($412,590)

($4.39)

Intangible asset impairments 493,143 5.38 493,143 5.25
Franchise closure/relocation costs 5,785 0.06 5,785 0.06
Severance costs 2,514 0.03 3,813 0.04
Other asset impairments 992 0.01 2,532 0.03
Adjusted income from continuing operations attributable to PAG ($4,242) ($0.05) $92,683 $0.99

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