Penske Automotive Reports Third Quarter and Nine Month Results

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Penske Automotive Reports Third Quarter and Nine Month Results

November 2, 2012

Reports Record Third Quarter Adjusted Income from Continuing Operations

Adjusted Earnings per Share from Continuing Operations Rises to $0.60

BLOOMFIELD HILLS, Mich.--(BUSINESS WIRE)-- Penske Automotive Group, Inc. (NYSE:PAG):


Third Quarter 2012			Nine Months 2012
Revenue Increases 17.4% to $3.4 Billion			Revenue Increases 18.2% to $10.0 Billion
Same-store Retail Revenue Increases 11.7%			Same-store Retail Revenue Increases 9.6%
Adjusted Inc. from Continuing Operations Increases 19.1% to $54.3 Million			Adjusted Inc. from Continuing Operations Increases 27.1% to $153.8 Million
Adjusted EPS from Continuing Operations Increases 20% to $0.60 per share			Adjusted EPS from Continuing Operations Increases 29.8% to $1.70 per share
Adjusted EBITDA Increases 7.0% to $100.3 Million			Adjusted EBITDA Increases 20.6% to $305.1 Million

Penske Automotive Group, Inc. (NYSE:PAG), an international automotive retailer, announced today record third quarter adjusted income from continuing operations and related earnings per share. For the third quarter 2012, adjusted income from continuing operations attributable to common shareholders increased 19.1% to $54.3 million and related earnings per share increased 20.0% to $0.60 per share. This compares to adjusted income from continuing operations attributable to common shareholders of $45.6 million, or $0.50 per share in the same period last year.

Adjusted income from continuing operations attributable to common shareholders for the third quarter and nine months ended September 30, 2012, excludes after-tax costs of $13.0 million, or $0.14 per share, of debt redemption costs associated with the redemption of the Company’s $375 million of 7.75% senior subordinated notes due 2016. Adjusted income from continuing operations attributable to common shareholders for the third quarter and nine months ended September 30, 2011 excludes $11.0 million, or $0.12 per share, of net income tax benefits reflecting a positive adjustment from the resolution of certain tax items in the U.K. of $17.0 million, or $0.19 per share, partially offset by a reduction in deferred tax assets of $6.0 million, or $0.07 per share. Actual third quarter 2012 income from continuing operations was $41.3 million, or $0.46 per share, compared to income from continuing operations of $56.6 million, or $0.62 per share in the same period last year.

Total revenue increased 17.4% to $3.4 billion, including a same-store retail revenue increase of 11.7% in the third quarter. The revenue increase was driven by a 23.6% increase in total retail unit sales, including 16.6% on a same-store basis. Gross profit improved 10.9% to $511.0 million while operating income increased 11.4% to $87.5 million.

Highlights of the Third Quarter

Total Retail Unit Sales increased 23.6% to 88,151
- +21.1% in the United States; +29.1% Internationally
- New unit retail sales +26.3%
- Used unit retail sales +20.4%
Same-store Retail Revenue increased 11.7%
- New +15.9%; Used +8.4%; Finance & Insurance +13.0%; Service and Parts +1.9%
- +16.6% in the United States; +3.6% Internationally
Average Transaction Price Per Unit
- New $36,497; -3.8%
- Used $24,982; -4.8%
Average Gross Profit Per Unit
- New $2,821; Gross Margin 7.7%; down 80 bps
- Used $1,824; Gross Margin 7.3%; down 20 bps
- Finance & Insurance $969; down $57/unit

Chairman Roger Penske said, “The Company’s third quarter results continue to demonstrate the strength of the auto retail sales environment in both the U.S. and our international markets. We experienced strong new unit sales throughout the quarter, particularly through our volume foreign brands which increased 33.9%, including 30.7% on a same-store basis. Additionally, our retail used vehicle unit sales continue to be very strong, increasing 20.4%, including 13.3% on a same-store basis. I was particularly pleased to see service and parts gross margin improve by 80 basis points to 57.8% and a 1.9% improvement in same-store service and parts revenue.”

Penske continued, “While new and used unit sales were strong, we experienced pricing pressure in our markets, especially when compared to the third quarter last year, when a lack of inventory at our Toyota, Honda and Nissan dealerships drove higher gross profits per unit.”

For the nine months ended September 30, 2012, total revenue increased 18.2% to $10.0 billion. Adjusted income from continuing operations attributable to common shareholders increased 27.1% to $153.8 million and adjusted earnings per share attributable to common shareholders increased 29.8% to $1.70 per share. This compares to adjusted income from continuing operations attributable to common shareholders of $121.0 million, and related earnings per share of $1.31 per share in the same period last year. Actual income from continuing operations for the nine months ended September 30, 2012, was $140.8 million, or $1.56 per share, compared to income from continuing operations of $132.0 million, or $1.43 in the same period last year.

Securities Repurchase Activity

During the third quarter ended September 30, 2012, the Company completed the redemption of the remaining $25.5 million in outstanding 3.5% senior subordinated convertible notes. No shares of common stock were issued in the redemption. Additionally, the Company redeemed $375 million of 7.75% senior subordinated notes in connection with the issuance of $550 million of 5.75% senior subordinated notes.

The Company currently has remaining authorization from its Board of Directors to repurchase up to $98.3 million of its outstanding common stock or debt. Securities may be acquired from time to time either through open market purchases, negotiated transactions or other means.

Conference Call

Penske Automotive will host a conference call discussing financial results relating to the third quarter of 2012 on November 2, 2012, at 11:00 a.m.Eastern Daylight Time. To listen to the conference call, participants must dial (800) 230-1096 [International, please dial (612) 288-0337]. The call will also be simultaneously broadcast over the Internet through the Investors Relations section of the Penske Automotive Group website at www.penskeautomotive.com.

About Penske Automotive

Penske Automotive Group, Inc., headquartered in Bloomfield Hills, Michigan, operates 341 retail automotive franchises, representing 40 different brands and 30 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 171 franchises in 17 states and Puerto Rico and 170 franchises located outside the United States, primarily in the United Kingdom. Penske Automotive is a member of the Fortune 500 and Russell 2000 and has approximately 16,000 employees.

Non-GAAP Financial Measures

This release contains certain non-GAAP financial measures as defined under SEC rules, such as adjusted income from continuing operations, adjusted earnings per share from continuing operations, and adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”). The Company has reconciled these measures to the most directly comparable GAAP measures in the release. The Company believes that these widely accepted measures of operating profitability improve the transparency of the Company's disclosures and provide a meaningful presentation of the Company's results from its core business operations excluding the impact of items not related to the Company's ongoing core business operations, and improve the period-to-period comparability of the Company's results from its core business operations. These non-GAAP financial measures are not substitutes for GAAP financial results, and should only be considered in conjunction with the Company’s financial information that is presented in accordance with GAAP.

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 and outlook. Actual results may vary materially because of risks and uncertainties that are difficult to predict. These risks and uncertainties include, among others: economic conditions generally, conditions in the credit markets and changes in interest rates, adverse conditions affecting a particular manufacturer, including the adverse impact to the vehicle and parts supply chain due to natural disasters or other disruptions that interrupt the supply of vehicles or parts to us; changes in consumer credit availability, the outcome of legal and administrative matters, and other factors over which management has limited 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, 2011, 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.

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PENSKE AUTOMOTIVE GROUP, INC. Consolidated Condensed Statements of Income (Amounts In Thousands, Except Per Share Data) (Unaudited)

	Three Months Ended							Nine Months Ended
	September 30,							September 30,
	2012			2011				2012			2011
Revenues:
New Vehicle	$	1,763,050		$	1,451,177			$	5,066,417		$	4,229,192
Used Vehicle		995,376			867,969				2,926,523			2,511,573
Finance and Insurance, Net		85,420			73,191				247,906			208,540
Service and Parts		372,032			347,432				1,109,122			1,027,120
Fleet and Wholesale		185,531			158,672				656,663			490,135
Total Revenues		3,401,409			2,898,441				10,006,631			8,466,560
Cost of Sales:
New Vehicle		1,626,759			1,327,968				4,659,490			3,877,615
Used Vehicle		922,703			802,542				2,701,645			2,310,147
Service and Parts		156,942			149,429				465,620			440,392
Fleet and Wholesale		184,009			157,739				650,302			484,222
Total Cost of Sales		2,890,413			2,437,678				8,477,057			7,112,376
Gross Profit		510,996			460,763				1,529,574			1,354,184
SG&A Expenses		409,432			369,783				1,216,231			1,098,132
Depreciation		14,037			12,427				41,013			36,132
Operating Income		87,527			78,553				272,330			219,920
Floor Plan Interest Expense		(10,055	)		(6,837	)			(29,675	)		(20,617	)
Other Interest Expense		(11,689	)		(11,153	)			(35,474	)		(32,889	)
Debt Discount Amortization		---			---				---			(1,718	)
Equity in Earnings of Affiliates		8,814			9,623				21,392			17,527
Debt Redemption Costs		(17,753	)		---				(17,753	)		---
Income from Continuing Operations Before Income Taxes		56,844			70,186				210,820			182,223
Income Taxes		(15,308	)		(13,246	)			(69,052	)		(49,289	)
Income from Continuing Operations		41,536			56,940				141,768			132,934
Loss from Discontinued Operations, Net of Tax		(223	)		(895	)			(3,837	)		(2,833	)
Net Income		41,313			56,045				137,931			130,101
Less: Income Attributable to Non-Controlling Interests		282			338				990			907
Net Income Attributable to Common Shareholders	$	41,031		$	55,707			$	136,941		$	129,194
Income from Continuing Operations Per Share	$	0.46		$	0.62			$	1.56		$	1.43
Income Per Share	$	0.45		$	0.61			$	1.52		$	1.40
Weighted Average Shares Outstanding		90,296			91,431				90,362			92,169
Amounts Attributable to Common Shareholders:
Reported Income from Continuing Operations	$	41,536		$	56,940		$	$	141,768		$	132,934
Less: Income Attributable to Non-Controlling Interests		282			338				990			907
Income from Continuing Operations, net of tax	$	41,254		$	56,602			$	140,778		$	132,027
Loss from Discontinued Operations, net of tax		(223	)		(895	)			(3,837	)		(2,833	)
Net Income	$	41,031		$	55,707			$	136,941		$	129,194

PENSKE AUTOMOTIVE GROUP, INC. Consolidated Condensed Balance Sheets (Amounts In Thousands) (Unaudited)

	September 30,		December 31,
	2012		2011
Assets
Cash and Cash Equivalents	$	25,935	$	28,676
Accounts Receivable, Net		505,770		438,769
Inventories		1,864,773		1,572,568
Other Current Assets		91,204		80,179
Assets Held for Sale		38,005		81,122
Total Current Assets		2,525,687		2,201,314
Property and Equipment, Net		961,488		856,674
Intangibles		1,210,959		1,132,181
Other Long-Term Assets		326,046		312,130
Total Assets	$	5,024,180	$	4,502,299

Liabilities and Equity
Floor Plan Notes Payable	$	1,254,895	$	977,548
Floor Plan Notes Payable – Non-Trade		704,280		691,888
Accounts Payable		275,032		220,538
Accrued Expenses		259,146		201,179
Current Portion Long-Term Debt		14,929		3,414
Liabilities Held for Sale		34,124		55,820
Total Current Liabilities		2,542,406		2,150,387
Long-Term Debt		815,918		846,777
Other Long-Term Liabilities		397,465		364,722
Total Liabilities		3,755,789		3,361,886
Equity		1,268,391		1,140,413
Total Liabilities and Equity	$	5,024,180	$	4,502,299

PENSKE AUTOMOTIVE GROUP, INC. Consolidated Condensed Statements of Income (Amounts In Thousands, Except Per Share Data) (Unaudited)

	Three Months Ended
	September 30,
	2012			2011				% Increase/ (Decrease)
Revenues:
New Vehicle	$	1,763,050		$	1,451,177			21.5	%
Used Vehicle		995,376			867,969			14.7	%
Finance and Insurance, Net		85,420			73,191			16.7	%
Service and Parts		372,032			347,432			7.1	%
Fleet and Wholesale		185,531			158,672			16.9	%
Total Revenues		3,401,409			2,898,441			17.4	%
Cost of Sales:
New Vehicle		1,626,759			1,327,968			22.5	%
Used Vehicle		922,703			802,542			15.0	%
Service and Parts		156,942			149,429			5.0	%
Fleet and Wholesale		184,009			157,739			16.7	%
Total Cost of Sales		2,890,413			2,437,678			18.6	%
Gross Profit		510,996			460,763			10.9	%
SG&A Expenses		409,432			369,783			10.7	%
Depreciation		14,037			12,427			13.0	%
Operating Income		87,527			78,553			11.4	%
Floor Plan Interest Expense		(10,055	)		(6,837	)		47.1	%
Other Interest Expense		(11,689	)		(11,153	)		4.8	%
Equity in Earnings of Affiliates		8,814			9,623			(8.4	%)
Debt Redemption Costs		(17,753	)		---			---
Income from Continuing Operations Before Income Taxes		56,844			70,186			(19.0	%)
Income Taxes		(15,308	)		(13,246	)	(	15.6	%
Income from Continuing Operations		41,536			56,940			(27.1	%)
Loss from Discontinued Operations, Net of Tax		(223	)		(895	)		(75.1	%)
Net Income		41,313			56,045			(26.3	%)
Less: Income Attributable to Non-Controlling Interests		282			338			(16.6	%)
Net Income Attributable to Common Shareholders	$	41,031		$	55,707			(26.3	%)
Income from Continuing Operations Per Share	$	0.46		$	0.62			(25.8	%)
Income Per Share	$	0.45		$	0.61			(26.2	%)
Weighted Average Shares Outstanding		90,296			91,431			(1.2	%)
Amounts Attributable to Common Shareholders:
Reported Income from Continuing Operations	$	41,536		$	56,940			(27.1	%)
Less: Income Attributable to Non-Controlling Interests		282			338			(16.6	%)
Income from Continuing Operations, net of tax	$	41,254		$	56,602			(27.1	%)
Loss from Discontinued Operations, net of tax		(223	)		(895	)		(75.1	%)
Net Income	$	41,031		$	55,707			(26.3	%)

PENSKE AUTOMOTIVE GROUP, INC. Selected Data (Unaudited)

	Three Months Ended
	September 30,
	2012			2011			% Increase/ (Decrease)
Total Retail Units:
New Retail		48,307			38,248		26.3	%
Used Retail		39,844			33,084		20.4	%
Total Retail		88,151			71,332		23.6	%

Same-Store Retail Units:
New Same-Store Retail		44,254			37,057		19.4	%
Used Same-Store Retail		36,855			32,531		13.3	%
Total Same-Store Retail		81,109			69,588		16.6	%

Same-Store Retail Revenue: (Amounts in thousands)
New Vehicles	$	1,615,941		$	1,393,797		15.9	%
Used Vehicles		924,835			853,002		8.4	%
Finance and Insurance, Net		80,911			71,584		13.0	%
Service and Parts		342,069			335,846		1.9	%
Total Same-Store Retail	$	2,963,756		$	2,654,229		11.7	%

Revenue Mix:
New Vehicles		51.8	%		50.1	%	170 bps
Used Vehicles		29.3	%		29.9	%	(60 bps)
Finance and Insurance, Net		2.5	%		2.5	%	---
Service and Parts		10.9	%		12.0	%	(110 bps)
Fleet and Wholesale		5.5	%		5.5	%	---

Average Revenue per Vehicle Retailed:
New Vehicles	$	36,497		$	37,941		(3.8	%)
Used Vehicles		24,982			26,235		(4.8	%)

Gross Profit per Vehicle Retailed:
New Vehicles	$	2,821		$	3,221		(12.4	%)
Used Vehicles		1,824			1,978		(7.8	%)
Finance and Insurance		969			1,026		(5.6	%)

Operating items as a percentage of revenue:
New Vehicle Gross Profit		7.7	%		8.5	%	(80 bps)
Used Vehicle Gross Profit		7.3	%		7.5	%	(20 bps)
Service and Parts Gross Profit		57.8	%		57.0	%	80 bps
Total Gross Profit		15.0	%		15.9	%	(90 bps)
Selling, General and Admin. Expenses		12.0	%		12.8	%	(80 bps)
Operating Income		2.6	%		2.7	%	(10 bps)
Inc. From Cont. Ops. Before Inc. Taxes		1.7	%		2.4	%	(70 bps)

Operating items as a percentage of total gross profit:
Selling, General and Administrative Expenses		80.1	%		80.3	%	(20 bps)
Operating Income		17.1	%		17.0	%	10 bps

PENSKE AUTOMOTIVE GROUP, INC. Selected Data (Continued) (Unaudited)

	Three Months Ended
	September 30,
	2012		2011		% Increase/ (Decrease)

Other (Amounts in Thousands):
EBITDA *	$	82,570	$	93,766	(11.9	%)
Adjusted EBITDA *		100,323		93,766	7.0	%
Rent Expense		44,394		42,520	4.4	%
Floorplan Credits		5,864		4,865	20.5	%

* See the following Non-GAAP reconciliation tables

PENSKE AUTOMOTIVE GROUP, INC. Consolidated Condensed Statements of Income (Amounts In Thousands, Except Per Share Data) (Unaudited)

	Nine Months Ended
	September 30,
	2012			2011			% Increase/ (Decrease)
Revenues:
New Vehicle	$	5,066,417		$	4,229,192		19.8	%
Used Vehicle		2,926,523			2,511,573		16.5	%
Finance and Insurance, Net		247,906			208,540		18.9	%
Service and Parts		1,109,122			1,027,120		8.0	%
Fleet and Wholesale		656,663			490,135		34.0	%
Total Revenues		10,006,631			8,466,560		18.2	%
Cost of Sales:
New Vehicle		4,659,490			3,877,615		20.2	%
Used Vehicle		2,701,645			2,310,147		16.9	%
Service and Parts		465,620			440,392		5.7	%
Fleet and Wholesale		650,302			484,222		34.3	%
Total Cost of Sales		8,477,057			7,112,376		19.2	%
Gross Profit		1,529,574			1,354,184		13.0	%
SG&A Expenses		1,216,231			1,098,132		10.8	%
Depreciation		41,013			36,132		13.5	%
Operating Income		272,330			219,920		23.8	%
Floor Plan Interest Expense		(29,675	)		(20,617	)	43.9	%
Other Interest Expense		(35,474	)		(32,889	)	7.9	%
Debt Discount Amortization		---			(1,718	)	---
Equity in Earnings of Affiliates		21,392			17,527		22.1	%
Debt Redemption Costs		(17,753	)		---		---
Income from Continuing Operations Before Income Taxes		210,820			182,223		15.7	%
Income Taxes		(69,052	)		(49,289	)	40.1	%
Income from Continuing Operations		141,768			132,934		6.6	%
Loss from Discontinued Operations, Net of Tax		(3,837	)		(2,833	)	35.4	%
Net Income		137,931			130,101		6.0	%
Less: Income Attributable to Non-Controlling Interests		990			907		9.2	%
Net Income Attributable to Common Shareholders	$	136,941		$	129,194		6.0	%
Income from Continuing Operations Per Share	$	1.56		$	1.43		9.1	%
Income Per Share	$	1.52		$	1.40		8.6	%
Weighted Average Shares Outstanding		90,362			92,169		(2.0	%)
Amounts Attributable to Common Shareholders:
Reported Income from Continuing Operations	$	141,768		$	132,934		6.6	%
Less: Income Attributable to Non-Controlling Interests		990			907		9.2	%
Income from Continuing Operations, net of tax	$	140,778		$	132,027		6.6	%
Loss from Discontinued Operations, net of tax		(3,837	)		(2,833	)	35.4	%
Net Income	$	136,941		$	129,194		6.0	%

PENSKE AUTOMOTIVE GROUP, INC. Selected Data (Unaudited)

	Nine Months Ended
	September 30,
	2012			2011			% Increase/ (Decrease)
Total Retail Units:
New Retail		138,080			114,242		20.9	%
Used Retail		115,692			95,525		21.1	%
Total Retail		253,772			209,767		21.0	%

Same-Store Retail Units:
New Same-Store Retail		125,685			111,770		12.4	%
Used Same-Store Retail		106,364			93,808		13.4	%
Total Same-Store Retail		232,049			205,578		12.9	%

Same-Store Retail Revenue: (Amounts in thousands)
New Vehicles	$	4,617,494		$	4,131,472		11.8	%
Used Vehicles		2,697,265			2,470,351		9.2	%
Finance and Insurance, Net		232,364			204,533		13.6	%
Service and Parts		1,018,149			1,007,039		1.1	%
Total Same-Store Retail	$	8,565,272		$	7,813,395		9.6	%

Revenue Mix:
New Vehicles		50.6	%		50.0	%	60 bps
Used Vehicles		29.2	%		29.7	%	(50 bps)
Finance and Insurance, Net		2.5	%		2.5	%	---
Service and Parts		11.1	%		12.1	%	(100 bps)
Fleet and Wholesale		6.6	%		5.7	%	90 bps

Average Revenue per Vehicle Retailed:
New Vehicles	$	36,692		$	37,020		(0.9	%)
Used Vehicles		25,296			26,292		(3.8	%)

Gross Profit per Vehicle Retailed:
New Vehicles	$	2,947		$	3,077		(4.2	%)
Used Vehicles		1,944			2,109		(7.8	%)
Finance and Insurance		977			994		(1.7	%)

Operating items as a percentage of revenue:
New Vehicle Gross Profit		8.0	%		8.3	%	(30 bps)
Used Vehicle Gross Profit		7.7	%		8.0	%	(30 bps)
Service and Parts Gross Profit		58.0	%		57.1	%	90 bps
Total Gross Profit		15.3	%		16.0	%	(70 bps)
Selling, General and Admin. Expenses		12.2	%		13.0	%	(80 bps)
Operating Income		2.7	%		2.6	%	10 bps
Inc. From Cont. Ops. Before Inc. Taxes		2.1	%		2.2	%	(10 bps)

Operating items as a percentage of total gross profit:
Selling, General and Administrative Expenses		79.5	%		81.1	%	(160 bps)
Operating Income		17.8	%		16.2	%	160 bps

PENSKE AUTOMOTIVE GROUP, INC. Selected Data (Continued) (Unaudited)

	Nine Months Ended
	September 30,
	2012		2011		% Increase/ (Decrease)

Other (Amounts in Thousands):
EBITDA *	$	287,307	$	252,962	13.6	%
Adjusted EBITDA *		305,060		252,962	20.6	%
Rent Expense		132,614		126,774	4.6	%
Floorplan Credits		17,146		15,229	12.6	%

* See the following Non-GAAP reconciliation tables

PENSKE AUTOMOTIVE GROUP, INC. Selected Data Brand Revenue Mix (Unaudited)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2012		2011		2012		2011
Brand Revenue Mix:
Premium:
BMW	25	%	24	%	24	%	24	%
Audi	12	%	13	%	12	%	12	%
Mercedes-Benz	11	%	11	%	11	%	10	%
Lexus	4	%	4	%	4	%	4	%
Land Rover	4	%	4	%	4	%	4	%
Porsche	4	%	4	%	4	%	5	%
Ferrari / Maserati	2	%	3	%	3	%	3	%
Acura	2	%	2	%	2	%	2	%
Other	4	%	4	%	4	%	4	%
Total Premium	68	%	69	%	68	%	68	%
Foreign:
Toyota	11	%	10	%	11	%	11	%
Honda	11	%	11	%	11	%	11	%
Nissan	2	%	2	%	2	%	2	%
Volkswagen	2	%	2	%	2	%	2	%
Other	2	%	2	%	2	%	2	%
Total Foreign	28	%	27	%	28	%	28	%
Domestic Big 3
General Motors / Chrysler / Ford	4	%	4	%	4	%	4	%

Revenue Mix:
U.S.	63	%	63	%	62	%	62	%
International	37	%	37	%	38	%	38	%

PENSKE AUTOMOTIVE GROUP, INC. Non-GAAP Reconciliation (Unaudited)

	Income							Earnings Per Share
	Three Months Ended							Three Months Ended
	September 30,							September 30,
	2012		2011					2012		2011

Income from Continuing Operations net of tax and Earnings per Share	$	41.3	$	56.6				$	0.46	$	0.62
Debt Redemption Costs ⁽¹⁾		13.0		---					0.14		---
Net Tax Benefits ⁽²⁾		---		(11.0	)				---		(0.12	)
Adjusted Income from Continuing operations and Adjusted Earnings per Share	$	54.3	$	45.6		19.1	%	$	0.60	$	0.50		20.0	%


	Income							Earnings Per Share
	Nine Months Ended							Nine Months Ended
	September 30,							September 30,
	2012		2011					2012		2011

Income from Continuing Operations net of tax and Earnings per Share	$	140.8	$	132.0				$	1.56	$	1.43
Debt Redemption Costs ⁽¹⁾		13.0		---					0.14		---
Net Tax Benefits ⁽²⁾		---		(11.0	)				---		(0.12	)
Adjusted Income from Continuing Operations and Adjusted Earnings per Share	$	153.8	$	121.0		27.1	%	$	1.70	$	1.31		29.8	%

(1)		Costs associated with the redemption of the Company’s $375 million of 7.75% senior subordinated notes due 2016 of $17.8 million ($13.0 million net of taxes), or $0.14 per share.
(2)		Net income tax benefit reflecting a positive adjustment from the resolution of certain tax items in the U.K. of $17.0 million, or $0.19 per share, partially offset by a reduction in deferred tax assets of $6.0 million, or $0.07 per share.

PENSKE AUTOMOTIVE GROUP, INC. Non-GAAP Reconciliation (Unaudited)

Reconciliation of 2012 and 2011 net income to EBITDA and Adjusted EBITDA:

	Three Months Ended
	September 30,
(Amounts in Thousands)	2012		2011		% Increase/ (Decrease)

Net Income	$	$41,313	$	56,045	(26.3	%)
Depreciation		14,037		12,427	13.0	%
Other Interest Expense		11,689		11,153	4.8	%
Income Taxes		15,308		13,246	15.6	%
Loss from Discontinued Operations, net		223		895	(75.1	%)
EBITDA	$	82,570	$	93,766	(11.9	%)
Add back: Debt Redemption Costs		17,753		---	n/a
Adjusted EBITDA	$	100,323	$	93,766	7.0	%


	Nine Months Ended
	September 30,
(Amounts in Thousands)	2012		2011		% Increase/ (Decrease)

Net Income	$	137,931	$	130,101	6.0	%
Depreciation		41,013		36,132	13.5	%
Other Interest Expense		35,474		32,889	7.9	%
Debt Discount Amortization		---		1,718	n/a
Income Taxes		69,052		49,289	40.1	%
Loss from Discontinued Operations, net		3,837		2,833	35.4	%
EBITDA	$	287,307	$	252,962	13.6	%
Add back: Debt Redemption Costs		17,753		---	n/a
Adjusted EBITDA	$	305,060	$	252,962	20.6	%

Penske Automotive Group, Inc.
David K. Jones
Executive Vice President and Chief Financial Officer
248-648-2800
dave.jones@penskeautomotive.com
or
Penske Automotive Group, Inc.
Anthony R. Pordon
Executive Vice President Investor Relations and Corporate Development
248-648-2540
tpordon@penskeautomotive.com

Source: Penske Automotive Group, Inc.

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