PR Newswire | Feb 10, 2021 07:00AM EST

02/10 05:59 CST

Penske Automotive Reports Record Results BLOOMFIELD HILLS, Mich., Feb. 10, 2021

BLOOMFIELD HILLS, Mich., Feb. 10, 2021/PRNewswire/ -- Penske Automotive Group, Inc. (NYSE:PAG), a diversified international transportation services company, today announced fourth quarter and full year 2020 results. For the three months ended December 31, 2020, the company reported a 97% increase in income from continuing operations attributable to common shareholders to $200.1 million, and a 99% increase in related earnings per share to $2.49. This compares to income from continuing operations attributable to common shareholders of $101.6 million, or $1.25 per share in the prior year. Fourth quarter income from continuing operations and related earnings per share include a net benefit of $0.2 million, related to a gain on dealership sales, partially offset by a loss on debt extinguishment and U.S. and foreign tax legislation changes. Excluding this net benefit, adjusted income from continuing operations increased 96.8% to $199.9 million, and related earnings per share increased 99.2% to $2.49. Foreign exchange positively impacted earnings per share by $0.02. Revenue was $5.8 billion compared to $5.9 billion in the same period last year.

Commenting on the company's results, Chairman Roger Penske said, "I am very pleased to report 97% earnings growth for the fourth quarter. Our results were driven by same-store retail automotive margin expansion, growth in our commercial truck dealership profitability, and continued strong performance from Penske Transportation Solutions. Coupled with the benefit from expense reductions, adjusted selling, general, and administrative expenses as a percentage of gross profit declined 800 basis-points. Additionally, in 2020 our business generated $708 million in earnings before taxes, an all-time record. Our strong cash flow during the year provided us with the opportunity to paydown $670 million of non-vehicle long-term debt and reduce our debt to total capitalization to 34% from 46%."

For the twelve months ended December 31, 2020, the company reported income from continuing operations attributable to common shareholders of $543.2 million, or $6.74 per share, compared to $435.5 million, or $5.28 per share in the prior year. Foreign exchange positively impacted earnings per share by $0.03. Revenue was $20.4 billion compared to $23.2 billion in the same period last year. For the twelve months ended December 31, 2020, income from continuing operations and related earnings per share include a net benefit of $8.3 million, or $0.10 per share, from an income tax benefit related to various U.S. and foreign tax legislation changes and a gain on dealership sales, partially offset by a loss on debt extinguishment. Excluding this net benefit, adjusted income from continuing operations increased 22.8% to $534.9 million, and related earnings per share increased 25.8% to $6.64.

Operational Highlights - Fourth Quarter 2020

* Retail automotive same-store revenue increased 0.6% * Retail automotive same-store gross profit increased 5.7% * Retail automotive earnings before taxes increased 126.5% * Retail automotive same-store variable gross profit per unit retailed increased 24.5% * Total gross margin increased 80 basis points to 15.5% * Adjusted SG&A expenses declined $46.6 million and SG&A as a percentage of gross profit declined 800 basis points to 71.1%

Long-Term DebtDuring 2020, we reduced our long-term debt by $670 million. We repaid in full, at scheduled maturity, our $300 million 3.75% senior subordinated notes and redeemed our $300 million 5.375% senior subordinated notes due in 2024. We also redeemed our $550 million 5.75% senior subordinated notes due 2022 with the proceeds of the newly issued $550 million in aggregate principal amount 3.50% senior subordinated notes due 2025. We expect the payoff and refinancing of these notes will generate annualized interest expense savings of approximately $27 million. As of December 31, 2020, non-vehicle long-term debt to total capitalization was reduced to 34% from 46% at the end of the prior year.

Used Vehicle SuperCentersPenske Automotive Group opened a greenfield used vehicle SuperCenter site in Nottingham, U.K. during the fourth quarter and now operates seventeen Used Vehicle SuperCenters. For the three months ended December 31, 2020, same-store variable gross profit per unit retailed increased 20.4% to $2,351. Retail unit sales decreased by 22.6% to 11,923 while revenue decreased by 16.4% to $244.7 million largely as a result of COVID-related government-mandated closures in the U.K. For the twelve months ended December 31, 2020, SuperCenter retail unit sales decreased by 25.0% to 53,207 and revenue decreased by 17.0% to $1.0 billion.

Retail Commercial Truck DealershipsPenske Automotive Group operates twenty-five medium and heavy-duty truck dealership locations in the U.S. and Canada offering primarily Freightliner and Western Star brands. For the three months ended December 31, 2020, earnings before taxes were $26.5 million compared to $21.0 million in the same period last year. During the quarter, total units retailed increased 16.0%, including a 1% increase in new units and a 106% increase in used units. For the twelve months ended December 31, 2020, earnings before taxes were $78.2 million compared to $86.5 million in the same period last year.

Penske Transportation SolutionsPenske Transportation Solutions ("PTS") is a leading provider of full-service truck leasing, truck rental, contract maintenance, and logistics services and is an integral part of the North American supply chain, providing supply chain and transportation services to its customers. The company has a 28.9% ownership interest in the PTS partnership and accounts for its ownership interest using the equity method of accounting. In addition to equity income, the company receives cash distributions and may recognize cash tax benefits from time to time. For the three and twelve months ended December 31, 2020, the company recorded $56.5 million and $164.5 million in earnings compared to $36.4 million and $142.4 million for the same period last year. The 55.2% increase in the fourth quarter was principally driven by improved operating results in full-service leasing and logistics and a reduction in operating expenses.

Growth and ExpansionCurrently, we are constructing new franchised dealerships and have identified acquisition targets which are expected to add $600 million in estimated annualized revenue. Specifically, in January, we opened our second Porsche dealership in the Washington D.C. market that is expected to generate $50 million in annualized revenue. We also have an Audi dealership under construction in Southern California and a Honda dealership under construction in Texas. Both are expected to open by the end of the year and collectively generate approximately $100 million in annualized revenue.

During the fourth quarter we opened one used vehicle SuperCenter in Nottingham, U.K. As we look out across the next three years, our goal is to grow the used SuperCenter operations from 17 locations to 40 by the end of 2023. We expect our used SuperCenters operations will generate at least 150,000 in unit sales and $2.5 to $3.0 billion in total revenue, more than doubling the size of the existing business while generating earnings before taxes of approximately $100 million.

Dividend and Share RepurchasesOn January 26, 2021, we announced an increase in the quarterly dividend to $0.43 per share, payable on March 1, 2021 to shareholders of record as of February 10, 2021.

For the twelve months ended December 31, 2020, the company repurchased 1,027,736 shares for $34.4 million. Approximately $170.6 million remains available to repurchase shares under the company's existing share repurchase authorization.

Conference CallPenske Automotive Group will host a conference call discussing financial results relating to the fourth quarter of 2020 on Wednesday, February 10, 2021, at 2:00 p.m. Eastern Standard Time.To listen to the conference call, participants must dial (866) 394-1455 - [International, please dial (516) 575-8644]using access code 8644058. The call will also be simultaneously broadcast over the Internet through the Investors section of the Penske Automotive Group website. Additionally, an investor presentation relating to the fourth quarter 2020 financial results has been posted to the company's website. To access the presentation or to listen to the company's webcast, please refer to www.penskeautomotive.com.

About Penske AutomotivePenske Automotive Group, Inc., (NYSE:PAG) headquartered in Bloomfield Hills, Michigan, is an international transportation services company that operates automotive and commercial truck dealerships principally in the United States, the United Kingdom, Canada, and Western Europe and distributes commercial vehicles, diesel engines, gas engines, power systems, and related parts and services principally in Australia and New Zealand. PAG is a member of the Fortune 500 and Russell 1000 and 3000 indexes and is ranked among the World's Most Admired Companies by Fortune Magazine. For additional information, visit the company's website at www.penskeautomotive.com.

Non-GAAP Financial MeasuresThis release contains certain non-GAAP financial measures as defined under SEC rules, such as adjusted income from continuing operations, adjusted earnings per share, earnings before interest, taxes, depreciation, amortization ("EBITDA"), adjusted earnings before interest, taxes, depreciation, and amortization, and adjusted selling, general, and administrative expenses. 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 StatementsStatements in this press release may involve forward-looking statements, including forward-looking statements regarding Penske Automotive Group, Inc.'s liquidity, and assessment of business conditions in light of the COVID-19 pandemic. Actual results may vary materially because of risks and uncertainties that are difficult to predict. These risks and uncertainties include, among others: the duration, severity and resolution of the COVID-19 pandemic, government mandated restrictions on our business in light of COVID-19 or otherwise, economic conditions generally, conditions in the credit markets, changes in interest rates and foreign currency exchange rates, changes in tariff rates, new rules in place after the recent Brexit accord between the European Union and the U.K. could slow parts originating in the U.K. or Europe for distribution to our dealerships, adverse conditions affecting a particular manufacturer, including the adverse impact to the vehicle and parts supply chain due to limited vehicle availability due to the COVID-19 pandemic, the shortage of automotive semiconductor chips, natural disasters, recall 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 Group's business, markets, conditions, and other uncertainties, which could affect Penske Automotive Group's future performance. These risks and uncertainties are addressed in Penske Automotive Group's Form 10-K for the year ended December 31, 2019, and its other filings with the Securities and Exchange Commission ("SEC"). This press release speaks only as of its date, and Penske Automotive Group disclaims any duty to update the information herein.

Inquiries should contact:

J.D. Carlson Anthony R. Pordon

Executive Vice President and Executive Vice President Investor Relations

Chief Financial Officer and Corporate Development

Penske Automotive Group, Inc. Penske Automotive Group, Inc.

248-648-2810 248-648-2540

jcarlson@penskeautomotive.com tpordon@penskeautomotive.com

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Condensed Statements of Income

(Amounts In Millions, Except Per Share Data)

(Unaudited)





Three Months Ended Twelve Months Ended

December 31, December 31,

2020 2019 Change 2020 2019 Change

Revenue $5,812.1$5,881.4(1.2) %$20,443.9$23,179.4(11.8)%

Cost of Sales 4,913.7 5,014.9(2.0) % 17,259.4 19,723.9(12.5)%

Gross Profit $898.4 $866.5 3.7 %$3,184.5 $3,455.5 (7.8) %

SG&A Expenses 625.8 685.1 (8.7) % 2,364.5 2,693.2 (12.2)%

Depreciation 30.1 28.6 5.2 % 115.5 109.6 5.4 %

Operating Income $242.5 $152.8 58.7 %$704.5 $652.7 7.9 %

Floor Plan Interest Expense (8.9) (20.3) (56.2)% (46.3) (84.5) (45.2)%

Other Interest Expense (28.7) (31.0) (7.4) % (119.6) (124.2) (3.7) %

Equity in Earnings of Affiliates 58.4 37.9 54.1 % 169.0 147.5 14.6 %

Income from Continuing Operations Before Income Taxes $263.3 $139.4 88.9 %$707.6 $591.5 19.6 %

Income Taxes (62.0) (38.1) 62.7 % (162.7) (156.7) 3.8 %

Income from Continuing Operations $201.3 $101.3 98.7 %$544.9 $434.8 25.3 %

Income from Discontinued Operations, net of tax 0.1 - nm 0.4 0.3 nm

Net Income $201.4 $101.3 98.8 %$545.3 $435.1 25.3 %

Less: Income (Loss) Attributable to Non-Controlling 1.2 (0.3) nm 1.7 (0.7) nm Interests

Net Income Attributable to Common Shareholders $200.2 $101.6 97.0 %$543.6 $435.8 24.7 %



Amounts Attributable to Common Shareholders:

Reported Income from Continuing Operations $201.3 $101.3 98.7 %$544.9 $434.8 25.3 %

Less: Income (Loss) Attributable to Non-Controlling 1.2 (0.3) nm 1.7 (0.7) nm Interests

Income from Continuing Operations, net of tax $200.1 $101.6 96.9 %$543.2 $435.5 24.7 %

Income from Discontinued Operations, net of tax 0.1 - nm 0.4 0.3 nm

Net Income Attributable to Common Shareholders $200.2 $101.6 97.0 %$543.6 $435.8 24.7 %

Income from Continuing Operations Per Share $2.49 $1.25 99.2 %$6.74 $5.28 27.7 %

Income Per Share $2.49 $1.25 99.2 %$6.74 $5.28 27.7 %

Weighted Average Shares Outstanding 80.4 81.1 (0.9) % 80.6 82.5 (2.3) %



nm - not meaningful

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Condensed Balance Sheets

(Amounts In Millions)

(Unaudited)





December 31,December 31,

2020 2019

Assets:

Cash and Cash Equivalents $49.5 $28.1

Accounts Receivable, Net 806.9 960.3

Inventories 3,425.6 4,260.7

Other Current Assets 126.8 85.0

Total Current Assets 4,408.8 5,334.1

Property and Equipment, Net 2,404.4 2,366.4

Operating Lease Right-of-Use Assets 2,416.5 2,360.5

Intangibles 2,491.8 2,463.2

Other Long-Term Assets 1,525.7 1,418.5

Total Assets $13,247.2 $13,942.7



Liabilities and Equity:

Floor Plan Notes Payable $1,780.5 $2,412.5

Floor Plan Notes Payable - Non-Trade 1,363.8 1,594.0

Accounts Payable 675.4 638.8

Accrued Expenses and Other Current Liabilities 767.2 701.9

Current Portion Long-Term Debt 87.5 103.3

Liabilities Held for Sale 0.5 0.5

Total Current Liabilities 4,674.9 5,451.0

Long-Term Debt 1,602.1 2,257.0

Long-Term Operating Lease Liabilities 2,350.3 2,301.2

Other Long-Term Liabilities 1,293.8 1,121.9

Total Liabilities 9,921.1 11,131.1

Equity 3,326.1 2,811.6

Total Liabilities and Equity $13,247.2 $13,942.7



Supplemental Balance Sheet Information

New vehicle days' supply 50 71

Used vehicle days' supply 48 52

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Condensed Statements of Cash Flow

Amounts in Millions

(Unaudited)





Twelve Months Ended

December 31,

2020 2019

Operating Activities:

Net cash provided by continuing operating 1,201.5 518.3 activities

Investing Activities:

Purchase of equipment and improvements (185.9) (245.3)

Proceeds from sale of dealerships 40.6 22.8

Proceeds from sale-leaseback transactions - 18.9

Proceeds from sale of equipment and improvements 19.8 8.6

Acquisitions net, including repayment of sellers' floor plan notes payable of $0 and $138.5, - (326.9) respectively

Other (11.0) (10.8)

Net cash used in continuing investing activities (136.5) (532.7)

Financing Activities:

Proceeds from borrowings under U.S. credit 1,797.0 1,808.0 agreement revolving credit line

Repayments under U.S. credit agreement revolving (1,734.0) (1,793.0)credit line

Issuance of 3.50% senior subordinated notes 550.0 -

Repayment of 3.75% senior subordinated notes (300.0) -

Repayment of 5.375% senior subordinated notes (300.0) -

Repayment of 5.75% senior subordinated notes (550.0) -

Net (repayments) borrowings of other long-term debt (144.4) 115.4

Net (repayments) borrowings of floor plan notes (230.2) 177.5 payable - non-trade

Payments for contingent consideration (31.6) -

Repurchases of common stock (29.4) (169.2)

Dividends (68.1) (130.8)

Payment of debt issuance costs (8.1) (0.4)

Other (5.1) (4.9)

Net cash (used in) provided by continuing financing (1,053.9) 2.6 activities

Net cash provided by discontinued operations 0.3 0.3

Effect of exchange rate changes on cash and cash 10.0 0.2 equivalents

Net change in cash and cash equivalents 21.4 (11.3)

Cash and cash equivalents, beginning of period 28.1 39.4

Cash and cash equivalents, end of period $49.5 $28.1

Supplemental disclosures of cash flow information:

Cash paid for:

Interest $168.5 $204.9

Income taxes 17.9 92.4

Non cash activities:

Contingent consideration $- 10.6

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Operations

Selected Data

(Unaudited)





Three Months Ended Twelve Months Ended

December 31, December 31,

2020 2019 2020 2019

Geographic Revenue Mix:

North America 61.3 % 62.4 % 60.3 % 59.3 %

U.K. 29.9 % 29.3 % 31.0 % 32.6 %

Other International 8.8 % 8.3 % 8.7 % 8.1 %

Total 100.0 % 100.0 % 100.0 % 100.0 %



Revenue: (Amounts in Millions)

Retail Automotive $5,100.7 $5,162.7 $17,928.8 $20,615.8

Retail Commercial Trucks 579.4 599.1 2,060.9 2,050.5

Commercial Vehicles Australia/Power Systems 132.0 119.6 454.2 513.1 and Other

Total $5,812.1 $5,881.4 $20,443.9 $23,179.4



Gross Profit: (Amounts in Millions)

Retail Automotive $787.2 $755.1 $2,781.3 $3,038.9

Retail Commercial Trucks 78.8 78.3 280.9 277.8

Commercial Vehicles Australia/Power Systems 32.4 33.1 122.3 138.8 and Other

Total $898.4 $866.5 $3,184.5 $3,455.5



Gross Margin:

Retail Automotive 15.4 % 14.6 % 15.5 % 14.7 %

Retail Commercial Trucks 13.6 % 13.1 % 13.6 % 13.5 %

Commercial Vehicles Australia/Power Systems 24.5 % 27.7 % 26.9 % 27.1 %and Other

Total 15.5 % 14.7 % 15.6 % 14.9 %

Three Months EndedTwelve Months Ended

December 31, December 31,



2020 2019 2020 2019

Operating Items as a Percentage of Revenue:

Gross Profit 15.5% 14.7 % 15.6 % 14.9 %

Selling, General and Administrative 10.8% 11.6 % 11.6 % 11.6 % Expenses

Operating Income 4.2 % 2.6 % 3.4 % 2.8 %

Income from Continuing Operations 4.5 % 2.4 % 3.5 % 2.6 % Before Income Taxes



Operating Items as a Percentage of Total Gross Profit:

Selling, General and Administrative 69.7% 79.1 % 74.3 % 77.9 % Expenses

Operating Income 27.0% 17.6 % 22.1 % 18.9 %

Three Months Ended Twelve Months Ended

December 31, December 31,



(Amounts in Millions)2020 2019 2020 2019



EBITDA (1) $ 322.1$ 199.0$942.7 $825.3

Floorplan Credits $ 11.8 $ 9.9 $39.1 $37.2

Rent Expense $ 58.7 $ 58.6 $231.8 $232.0

Stock Repurchases $ - $ - $34.4 $174.1

(1) See the following Non-GAAP reconciliation table.

PENSKE AUTOMOTIVE GROUP, INC.

Retail Automotive Operations

Selected Data - Revenue and Gross Profit Mix

(Unaudited)





Three Months Ended Twelve Months Ended

December 31, December 31,

2020 2019 2020 2019

Retail Automotive Revenue Mix:

Premium:

BMW / MINI 24 %24 %23 %23 %

Audi 12 %12 %12 %12 %

Mercedes-Benz 10 %10 %10 %10 %

Land Rover / Jaguar 9 %8 %9 %9 %

Porsche 8 %7 %7 %6 %

Ferrari / Maserati 3 %3 %3 %3 %

Lexus 3 %3 %3 %3 %

Acura 1 %1 %1 %1 %

Bentley 1 %1 %1 %1 %

Others 2 %2 %2 %2 %

Total Premium 73 %71 %71 %70 %

Volume Non-U.S.:

Toyota 11 %10 %11 %10 %

Honda 5 %6 %6 %6 %

Volkswagen 2 %3 %2 %4 %

Nissan 1 %1 %1 %1 %

Others 2 %2 %2 %2 %

Total Volume Non-U.S. 21 %22 %22 %23 %

U.S.:

General Motors / Chrysler / Ford 1 %1 %1 %1 %

Stand-Alone Used 5 %6 %6 %6 %

Total 100 %100 %100 %100 %



Retail Automotive Geographic Revenue Mix:

U.S. 58 %60 %57 %57 %

U.K. 34 %33 %36 %37 %

Other International 8 %7 %7 %6 %

Total 100 %100 %100 %100 %



Retail Automotive Geographic Gross Profit Mix:

U.S. 62 %63 %63 %61 %

U.K. 31 %31 %32 %33 %

Other International 7 %6 %5 %6 %

Total 100 %100 %100 %100 %

PENSKE AUTOMOTIVE GROUP, INC.

Retail Automotive Operations

(Unaudited)



Three Months Ended Twelve Months Ended

December 31, December 31,

2020 2019 Change 2020 2019 Change

Retail Automotive Units:

New Retail 52,041 55,974 (7.0) % 178,437 222,704 (19.9)%

Used Retail 57,013 65,284 (12.7)% 233,469 284,190 (17.8)%

Total 109,054 121,258 (10.1)% 411,906 506,894 (18.7)%



Retail Automotive Revenue: (Amounts in Millions)

New Vehicles$2,480.7 $2,445.4 1.4 % $8,080.5 $9,329.5 (13.4)%

Used 1,674.9 1,712.0 (2.2) % 6,414.7 7,241.2 (11.4)% Vehicles

Finance and Insurance, 160.5 160.6 (0.1) % 576.3 652.1 (11.6)% Net

Service and 503.4 541.9 (7.1) % 1,883.7 2,195.9 (14.2)% Parts

Fleet and 281.2 302.8 (7.1) % 973.6 1,197.1 (18.7)% Wholesale

Total $5,100.7 $5,162.7 (1.2) % $17,928.8 $20,615.8 (13.0)% Revenue



Retail Automotive Gross Profit: (Amounts in Millions)

New Vehicles$215.2 $183.9 17.0 % $652.8 $695.6 (6.2) %

Used 104.0 81.9 27.0 % 388.9 366.1 6.2 % Vehicles

Finance and Insurance, 160.5 160.6 (0.1) % 576.3 652.1 (11.6)% Net

Service and 300.4 324.4 (7.4) % 1,127.4 1,305.8 (13.7)% Parts

Fleet and 7.1 4.3 65.1 % 35.9 19.3 86.0 % Wholesale

Total Gross $787.2 $755.1 4.3 % $2,781.3 $3,038.9 (8.5) % Profit



Retail Automotive Revenue Per Vehicle Retailed:

New Vehicles$47,669 $43,689 9.1 % $45,285 $41,892 8.1 %

Used 29,380 26,224 12.0 % 27,476 25,480 7.8 % Vehicles



Retail Automotive Gross Profit Per Vehicle Retailed:

New Vehicles$4,136 $3,286 25.9 % $3,659 $3,124 17.1 %

Used 1,823 1,255 45.3 % 1,666 1,288 29.3 % Vehicles

Finance and 1,470 1,324 11.0 % 1,399 1,287 8.7 % Insurance



Retail Automotive Gross Margin:

New Vehicles 8.7 % 7.5 %+120 bps 8.1 % 7.5 %60 bps

Used 6.2 % 4.8 %+140 bps 6.1 % 5.1 %+100 bpsVehicles

Service and 59.7 % 59.9 %(20) bps 59.9 % 59.5 %40 bpsParts

Fleet and 2.5 % 1.4 %+110 bps 3.7 % 1.6 %+210 bpsWholesale

Total Gross 15.4 % 14.6 %80 bps 15.5 % 14.7 %80 bpsMargin



Retail Automotive Revenue Mix Percentages:

New Vehicles 48.6 % 47.4 %+120 bps 45.1 % 45.3 %(20) bps

Used 32.8 % 33.2 %(40) bps 35.8 % 35.1 %70 bpsVehicles

Finance and Insurance, 3.1 % 3.1 %-- bps 3.2 % 3.2 %-- bpsNet

Service and 9.9 % 10.5 %(60) bps 10.5 % 10.7 %(20) bpsParts

Fleet and 5.6 % 5.8 %(20) bps 5.4 % 5.7 %(30) bpsWholesale

Total 100.0 % 100.0 % 100.0 % 100.0 %



Retail Automotive Gross Profit Mix Percentages:

New Vehicles 27.3 % 24.4 %+290 bps 23.5 % 22.9 %60 bps

Used 13.2 % 10.8 %+240 bps 14.0 % 12.0 %+200 bpsVehicles

Finance and Insurance, 20.4 % 21.3 %(90) bps 20.7 % 21.5 %(80) bpsNet

Service and 38.2 % 43.0 %(480) bps 40.5 % 43.0 %(250) bpsParts

Fleet and 0.9 % 0.5 %40 bps 1.3 % 0.6 %70 bpsWholesale

Total 100.0 % 100.0 % 100.0 % 100.0 %

PENSKE AUTOMOTIVE GROUP, INC.

Retail Automotive Operations Same-Store

(Unaudited)



Three Months Ended Twelve Months Ended

December 31, December 31,

2020 2019 Change 2020 2019 Change

Retail Automotive Same-Store Units:

New Retail 51,751 54,257 (4.6) % 176,153 212,848 (17.2)%

Used Retail 55,901 63,538 (12.0)% 226,920 273,732 (17.1)%

Total 107,652 117,795 (8.6) % 403,073 486,580 (17.2)%



Retail Automotive Same-Store Revenue: (Amounts in Millions)

New Vehicles$2,471.8 $2,388.0 3.5 % $8,007.2 $9,013.4 (11.2)%

Used 1,655.3 1,673.5 (1.1) % 6,289.4 7,015.2 (10.3)% Vehicles

Finance and Insurance, 158.7 157.4 0.8 % 566.1 634.0 (10.7)% Net

Service and 501.2 530.8 (5.6) % 1,867.4 2,134.3 (12.5)% Parts

Fleet and 279.1 285.0 (2.1) % 953.2 1,148.3 (17.0)% Wholesale

Total $5,066.1 $5,034.7 0.6 % $17,683.3 $19,945.2 (11.3)% Revenue



Retail Automotive Same-Store Gross Profit: (Amounts in Millions)

New Vehicles$214.7 $180.8 18.8 % $648.7 $676.2 (4.1) %

Used 103.2 80.8 27.7 % 382.4 359.8 6.3 % Vehicles

Finance and Insurance, 158.7 157.4 0.8 % 566.1 634.0 (10.7)% Net

Service and 299.0 317.1 (5.7) % 1,115.7 1,266.3 (11.9)% Parts

Fleet and 7.4 4.6 60.9 % 35.1 20.0 75.5 % Wholesale

Total Gross $783.0 $740.7 5.7 % $2,748.0 $2,956.3 (7.0) % Profit



Retail Automotive Same-Store Revenue Per Vehicle Retailed:

New Vehicles$47,764 $44,012 8.5 % $45,456 $42,347 7.3 %

Used 29,611 26,339 12.4 % 27,716 25,628 8.1 % Vehicles



Retail Automotive Same-Store Gross Profit Per Vehicle Retailed:

New Vehicles$4,150 $3,332 24.5 % $3,683 $3,177 15.9 %

Used 1,847 1,272 45.2 % 1,685 1,314 28.2 % Vehicles

Finance and 1,475 1,336 10.4 % 1,404 1,303 7.8 % Insurance



Retail Automotive Same-Store Gross Margin:

New Vehicles 8.7 % 7.6 %+110 bps 8.1 % 7.5 %60 bps

Used 6.2 % 4.8 %+140 bps 6.1 % 5.1 %+100 bpsVehicles

Service and 59.7 % 59.7 %-- bps 59.7 % 59.3 %40 bpsParts

Fleet and 2.7 % 1.6 %+110 bps 3.7 % 1.7 %+200 bpsWholesale

Total Gross 15.5 % 14.7 %80 bps 15.5 % 14.8 %70 bpsMargin



Retail Automotive Revenue Mix Percentages:

New Vehicles 48.8 % 47.4 %+140 bps 45.3 % 45.2 %10 bps

Used 32.7 % 33.2 %(50) bps 35.6 % 35.2 %40 bpsVehicles

Finance and Insurance, 3.1 % 3.1 %-- bps 3.2 % 3.2 %-- bpsNet

Service and 9.9 % 10.5 %(60) bps 10.6 % 10.7 %(10) bpsParts

Fleet and 5.5 % 5.8 %(30) bps 5.3 % 5.7 %(40) bpsWholesale

Total 100.0 % 100.0 % 100.0 % 100.0 %



Retail Automotive Gross Profit Mix Percentages:

New Vehicles 27.4 % 24.4 %+300 bps 23.6 % 22.9 %70 bps

Used 13.2 % 10.9 %+230 bps 13.9 % 12.2 %+170 bpsVehicles

Finance and Insurance, 20.3 % 21.3 %(100) bps 20.6 % 21.4 %(80) bpsNet

Service and 38.2 % 42.8 %(460) bps 40.6 % 42.8 %(220) bpsParts

Fleet and 0.9 % 0.6 %30 bps 1.3 % 0.7 %60 bpsWholesale

Total 100.0 % 100.0 % 100.0 % 100.0 %

PENSKE AUTOMOTIVE GROUP, INC.

Retail Commercial Truck Operations

(Unaudited)



Three Months Ended Twelve Months Ended

December 31, December 31,

2020 2019 Change 2020 2019 Change

Retail Commercial Truck Units:

New Retail 3,254 3,209 1.4 % 11,324 11,897 (4.8) %

Used Retail 1,071 519 106.4 % 3,826 1,954 95.8 %

Total 4,325 3,728 16.0 % 15,150 13,851 9.4 %



Retail Commercial Truck Revenue: (Amounts in Millions)

New Vehicles$385.5 $367.6 4.9 % $1,315.9 $1,347.2 (2.3) %

Used 58.8 29.2 101.4 % 194.2 117.0 66.0 % Vehicles

Finance and Insurance, 4.0 3.4 17.6 % 14.5 12.4 16.9 % Net

Service and 120.0 162.6 (26.2)% 478.1 503.3 (5.0) % Parts

Wholesale 11.1 36.3 (69.4)% 58.2 70.6 (17.6)% and Other

Total $579.4 $599.1 (3.3) % $2,060.9 $2,050.5 0.5 % Revenue



Retail Commercial Truck Gross Profit: (Amounts in Millions)

New Vehicles$16.0 $17.6 (9.1) % $50.4 $61.4 (17.9)%

Used 4.9 0.3 nm % 0.4 9.2 (95.7)% Vehicles

Finance and Insurance, 4.0 3.4 17.6 % 14.5 12.4 16.9 % Net

Service and 51.9 53.8 (3.5) % 207.3 182.4 13.7 % Parts

Wholesale 2.0 3.2 (37.5)% 8.3 12.4 (33.1)% and Other

Total Gross $78.8 $78.3 0.6 % $280.9 $277.8 1.1 % Profit



Retail Commercial Truck Revenue Per Vehicle Retailed:

New Vehicles$118,471 $114,573 3.4 % $116,201 $113,239 2.6 %

Used 54,878 56,041 (2.1) % 50,747 59,865 (15.2)% Vehicles



Retail Commercial Truck Gross Profit Per Vehicle Retailed:

New Vehicles$4,911 $5,505 (10.8)% $4,451 $5,164 (13.8)%

Used 4,578 546 738.5 % 97 4,706 (97.9)% Vehicles

Finance and 925 917 0.9 % 959 896 7.0 % Insurance



Retail Commercial Truck Gross Margin:

New Vehicles 4.2 % 4.8 %(60) bps 3.8 % 4.6 %(80) bps

Used 8.3 % 1.0 %+730 bps 0.2 % 7.9 %(770) bpsVehicles

Service and 43.3 % 33.1 %1,020 bps 43.4 % 36.2 %+720 bpsParts

Total Gross 13.6 % 13.1 %50 bps 13.6 % 13.5 %10 bpsMargin



Retail Commercial Truck Revenue Mix Percentages:

New Vehicles 66.5 % 61.4 %+510 bps 63.9 % 65.7 %(180) bps

Used 10.1 % 4.9 %+520 bps 9.4 % 5.7 %+370 bpsVehicles

Finance and Insurance, 0.7 % 0.6 %10 bps 0.7 % 0.6 %10 bpsNet

Service and 20.7 % 27.1 %(640) bps 23.2 % 24.5 %(130) bpsParts

Wholesale 2.0 % 6.0 %(400) bps 2.8 % 3.5 %(70) bpsand Other

Total 100.0 % 100.0 % 100.0 % 100.0 %



Retail Commercial Truck Gross Profit Mix Percentages:

New Vehicles 20.3 % 22.5 %(220) bps 17.9 % 22.1 %(420) bps

Used 6.2 % 0.4 %+580 bps 0.1 % 3.3 %(320) bpsVehicles

Finance and Insurance, 5.1 % 4.3 %80 bps 5.2 % 4.5 %70 bpsNet

Service and 65.9 % 68.7 %(280) bps 73.8 % 65.7 %+810 bpsParts

Wholesale 2.5 % 4.1 %(160) bps 3.0 % 4.4 %(140) bpsand Other

Total 100.0 % 100.0 % 100.0 % 100.0 %

PENSKE AUTOMOTIVE GROUP, INC.

Retail Commercial Truck Operations Same-Store

(Unaudited)



Three Months Ended Twelve Months Ended

December 31, December 31,

2020 2019 Change 2020 2019 Change

Retail Commercial Truck Same-Store Units:

New Retail 3,254 3,209 1.4 % 7,577 8,415 (10.0)%

Used Retail 1,071 519 106.4 % 2,530 1,644 53.9 %

Total 4,325 3,728 16.0 % 10,107 10,059 0.5 %



Retail Commercial Truck Same-Store Revenue: (Amounts in Millions)

New Vehicles$385.5 $367.6 4.9 % $885.9 $934.3 (5.2) %

Used 58.8 29.2 101.4 % 129.7 97.8 32.6 % Vehicles

Finance and Insurance, 4.0 3.4 17.6 % 10.9 10.7 1.9 % Net

Service and 120.0 162.6 (26.2)% 335.4 371.9 (9.8) % Parts

Wholesale 11.1 36.3 (69.4)% 25.7 21.0 22.4 % and Other

Total $579.4 $599.1 (3.3) % $1,387.6 $1,435.7 (3.4) % Revenue



Retail Commercial Truck Same-Store Gross Profit: (Amounts in Millions)

New Vehicles$16.0 $17.6 (9.1) % $34.2 $40.1 (14.7)%

Used 4.9 0.3 nm % 5.2 7.9 (34.2)% Vehicles

Finance and Insurance, 4.0 3.4 17.6 % 10.9 10.7 1.9 % Net

Service and 51.9 53.8 (3.5) % 135.9 146.8 (7.4) % Parts

Wholesale 2.0 3.2 (37.5)% 14.9 12.0 24.2 % and Other

Total Gross $78.8 $78.3 0.6 % $201.1 $217.5 (7.5) % Profit



Retail Commercial Truck Same-Store Revenue Per Vehicle Retailed:

New Vehicles$118,471 $114,573 3.4 % $116,915 $111,024 5.3 %

Used 54,878 56,041 (2.1) % 51,279 59,510 (13.8)% Vehicles



Retail Commercial Truck Same-Store Gross Profit Per Vehicle Retailed:

New Vehicles$4,911 $5,505 (10.8)% $4,513 $4,762 (5.2) %

Used 4,578 546 738.5 % 2,073 4,836 (57.1)% Vehicles

Finance and 925 917 0.9 % 1,075 1,068 0.7 % Insurance



Retail Commercial Truck Same-Store Gross Margin:

New Vehicles 4.2 % 4.8 %(60) bps 3.9 % 4.3 %(40) bps

Used 8.3 % 1.0 %+730 bps 4.0 % 8.1 %(410) bpsVehicles

Service and 43.3 % 33.1 %1,020 bps 40.5 % 39.5 %+100 bpsParts

Total Gross 13.6 % 13.1 %50 bps 14.5 % 15.1 %(60) bpsMargin



Retail Commercial Truck Revenue Mix Percentages:

New Vehicles 66.5 % 61.4 %+510 bps 63.8 % 65.1 %(130) bps

Used 10.1 % 4.9 %+520 bps 9.3 % 6.8 %+250 bpsVehicles

Finance and Insurance, 0.7 % 0.6 %10 bps 0.8 % 0.7 %10 bpsNet

Service and 20.7 % 27.1 %(640) bps 24.2 % 25.9 %(170) bpsParts

Wholesale 2.0 % 6.0 %(400) bps 1.9 % 1.5 %40 bpsand Other

Total 100.0 % 100.0 % 100.0 % 100.0 %



Retail Commercial Truck Gross Profit Mix Percentages:

New Vehicles 20.3 % 22.5 %(220) bps 17.0 % 18.4 %(140) bps

Used 6.2 % 0.4 %+580 bps 2.6 % 3.6 %(100) bpsVehicles

Finance and Insurance, 5.1 % 4.3 %80 bps 5.4 % 4.9 %50 bpsNet

Service and 65.9 % 68.7 %(280) bps 67.6 % 67.5 %10 bpsParts

Wholesale 2.5 % 4.1 %(160) bps 7.4 % 5.6 %+180 bpsand Other

Total 100.0 % 100.0 % 100.0 % 100.0 %

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

The following tables reconcile reported income from continuing operations and earnings per share to adjusted income from continuing operations and adjusted earnings per share for the three and twelve months ended December 31, 2020, and 2019:

Income from Continuing Operations:



Three Months Ended Twelve Months Ended

(Amounts in Millions)December 31, December 31,

2020 2019 % Change 2020 2019 % Change

Income from $200.1 $101.696.9 %$543.2 $435.524.7 %Continuing Operations

U.S. and foreign tax 4.0 - nm (11.4) - nm legislation changes

Net gain on (9.4) - nm (3.3) - nm dealership sales (2)

Loss on debt 5.1 - nm 6.4 - nm extinguishment (3)

Adjusted Income from $199.9(1)$101.696.8 %$534.9 $435.522.8 %Continuing Operations

Earnings Per Share:



Three Months Ended Twelve Months Ended

December 31, December 31,

2020 2019 % Change 2020 2019 % Change

Earnings Per Share from $2.49 $1.2599.2 %$6.74 $5.2827.7 %Continuing Operations

U.S. and foreign tax 0.05 - nm (0.14) - nm legislation changes

Net gain on dealership (0.12) - nm (0.04) - nm sales (2)

Loss on debt extinguishment 0.06 - nm 0.08 - nm (3)

Adjusted Earnings Per Share from $2.49 (1)$1.2599.2 %$6.64 $5.2825.8 %Continuing Operations

(1) May not sum due to rounding.

(2) Relates to the net gain on the sale of various dealerships in the U.S. and U.K.

Relates to a net loss on the extinguishment of our $550 million in(3) aggregate principal amount of 5.75% senior subordinated notes due 2022 and our $300 million 5.375% senior subordinated notes due 2024.

The following tables reconcile reported selling, general and administrative expenses ("SG&A") and SG&A to gross profit to adjusted SG&A and adjusted SG&A to gross profit for the three and twelve months ended December 31, 2020, and 2019:

Three Months Ended

December 31, 2020 vs. 2019

(Amounts in Millions) 2020 2019 Change % Change

Selling, General & Administrative Expenses $625.8 $685.1 $(59.3) (8.7) %

Add: Net gain on dealership sales (2) 12.7 - 12.7 nm

Adjusted Selling, General & Administrative Expenses$638.5 $685.1 $(46.6) (6.8) %

Selling, General and Administrative Expenses to 69.7 % 79.1 % (940) bpsnm Gross Profit

Adjusted Selling, General & Administrative Expenses 71.1 % 79.1 % (800) bpsnm to Gross Profit

Twelve Months Ended

December 31, 2020 vs. 2019

(Amounts in Millions) 2020 2019 Change % Change

Selling, General & $2,364.5 $2,693.2 $(328.7) (12.2)%Administrative Expenses

Add: Net gain on dealership 5.2 - 5.2 nm sales (2)

Adjusted Selling, General & $2,369.7 $2,693.2 $(323.5) (12.0)%Administrative Expenses

Selling, General and Administrative Expenses to 74.3 % 77.9 % (360) bpsnm Gross Profit

Adjusted Selling, General & Administrative Expenses to 74.4 % 77.9 % (350) bpsnm Gross Profit

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

The following tables reconcile reported net income to earnings before interest, taxes, depreciation, and amortization ("EBITDA") for the three and twelve months ended December 31, 2020, and 2019:

Three Months Ended

December 31, 2020 vs. 2019

(Amounts in Millions) 2020 2019 Change % Change



Net Income $201.4 $101.3 $100.198.8 %

Add: Depreciation 30.1 28.6 1.5 5.2 %

Other Interest Expense 28.7 31.0 (2.3)(7.4) %

Income Taxes 62.0 38.1 23.9 62.7 %

Income from Discontinued Operations, (0.1) - (0.1)nm net of tax

EBITDA $322.1 $199.0 $123.161.9 %

Less: Net gain on dealership sales (9.4) - (9.4)nm

Add: Loss on debt extinguishment 5.1 - 5.1 nm

Adjusted EBITDA $317.8 $199.0 $118.859.7 %

Twelve Months Ended

December 31, 2020 vs. 2019

(Amounts in Millions) 2020 2019 Change % Change



Net Income $ 545.3 $ 435.1$110.225.3 %

Add: Depreciation 115.5 109.6 5.9 5.4 %

Other Interest Expense 119.6 124.2 (4.6)(3.7) %

Income Taxes 162.7 156.7 6.0 3.8 %

Income from Discontinued Operations, (0.4) (0.3) (0.1)nm net of tax

EBITDA $ 942.7 $ 825.3$117.414.2 %

Less: Net gain on dealership sales (3.3) - (3.3)nm

Add: Loss on debt extinguishment 6.4 - 6.4 nm

Adjusted EBITDA $ 945.8 $ 825.3$120.514.6 %

nm - not meaningful

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SOURCE Penske Automotive Group, Inc.