PR Newswire | Oct 27, 2021 06:59AM EDT

10/27 05:59 CDT

Penske Automotive Reports All-Time Record Quarterly ResultsEarnings Before Taxes, Net Income, and Earnings Per Share Increased By More Than 43%Same-Store Retail Automotive Revenue Increased 6.6%Repurchased 2.0 Million Shares During Third Quarter and 2.5 Million Shares Year-To-Date35 Dealerships Named to the Automotive News List of Top 100 Best Dealerships To Work For BLOOMFIELD HILLS, Mich., Oct. 27, 2021

BLOOMFIELD HILLS, Mich., Oct. 27, 2021 /PRNewswire/ -- Penske Automotive Group, Inc. (NYSE:PAG), a diversified international transportation services company and one of the world's premier automotive and commercial truck retailers, today announced record third quarter and nine months 2021 results, including the best quarterly results in company history. For the three months ended September 30, 2021, the company reported a 43.9% increase in income from continuing operations attributable to common shareholders to $354.8 million and a 45.3% increase in related earnings per share to $4.46. This compares to income from continuing operations attributable to common shareholders of $246.5 million, or $3.07 per share, in the prior year. Foreign exchange positively impacted earnings per share by $0.06.

Third Quarter 2021 Operational Highlights versus Third Quarter 2020

* Total Revenue - increased 8.8% to $6.5 billion from $6.0 billion * Gross Margin - increased 190 basis points to 17.9% * Selling, General & Administrative Expenses as a Percentage of Gross Profit - improved by 230 basis points * Income From Continuing Operations Before Taxes - increased 52.8% to $476 million * Retail Automotive Same-Store Revenue - increased 6.6% * New Vehicle -3.1%; Used Vehicle +16.3%; Finance & Insurance +15.3%; Service & Parts +6.7%

* Retail Automotive Same-Store Gross Profit - increased 18.4% * Retail Automotive Variable Gross Profit Per Unit - increased 38.8% to $5,747 * Retail Commercial Truck Dealership Earnings Before Taxes - increased 106.4% * Penske Transportation Solutions Equity Earnings - increased 83.4%

Commenting on the company's results, Chair and CEO Roger Penske said, "Our business produced an all-time record third quarter driven by strength across all areas of our business, including continued strong vehicle margins, improving service and parts operations, a growing Class 8 commercial truck market, record performance at Penske Transportation Solutions, and continuing cost controls, which contributed to a 230 basis point improvement in selling, general, and administrative expenses as a percentage of gross profit. During the quarter, we reduced long-term non-vehicle debt by $245.4 million to $1.4 billion, improved our leverage ratio to 0.9 to 1 on a trailing twelve-month basis, and reduced debt to total capitalization to 27%. Since the end of 2019, we have reduced non-vehicle long-term debt by more than $900 million." Penske continued, "Despite the ongoing supply-chain challenges which continue to impact the availability of new vehicles in both the automotive and commercial truck markets, our performance in the quarter demonstrates the strength of the automotive and commercial truck retail models and the benefits from our diversification."

For the nine months ended September 30, 2021, the company reported a 155.3% increase in income from continuing operations attributable to common shareholders to $876.1 million and a 155.5% increase in related earnings per share to $10.91. This compares to income from continuing operations attributable to common shareholders of $343.1 million, or $4.27 per share, in the prior year. For the nine months ended September 30, 2021, income from continuing operations and related earnings per share include charges of $21.4 million, consisting of $12.6 million of debt redemption costs ($0.16 per share) and $8.8 million of charges relating to the increase in U.K. corporate taxes in 2023 ($0.11 per share). Excluding these items, adjusted income from continuing operations increased 172.8% to $897.5 million, and related earnings per share increased 172.7% to $11.18. Foreign exchange positively impacted earnings per share by $0.23. Total revenue increased 31.6% to $19.3 billion from $14.6 billion in the same period last year.

Retail Automotive Dealerships

For the three months ended September 30, 2021, total retail automotive revenue increased 7.2% to $5.6 billion, or 6.6% on a same-store basis, including 13.8% for CarShop. Total retail automotive gross profit increased 19.0% to $1.0 billion, including 18.4% on a same-store basis. Gross margin increased 170 basis points to 17.9% as variable gross profit per unit retailed increased 39%, or $1,607, to $5,747. We are currently in the process of constructing three new franchise dealership points which are expected to open in 2022.

CarShop Used Vehicle SuperCenters

We operated twenty CarShop used vehicle locations as of September 30, 2021. In October 2021, we opened two additional CarShop locations bringing our total number of locations to twenty-two. We expect to open one additional location before the end of the year. We are targeting 150,000 in unit sales and $100 million of earnings before taxes for CarShop by the end of 2023. For the three months ended September 30, 2021, retail unit sales increased by 0.4% to 18,451 while revenue increased by 24.3% to $438.1 million. For the nine months ended September 30, 2021, retail unit sales increased by 17.7% to 48,588 while revenue increased by 37.7% to $1,088.9 million.

Retail Commercial Truck Dealerships

For the three months ended September 30, 2021, earnings before taxes increased 106.4% to $48.3 million compared to $23.4 million in the same period last year, return on sales was 6.7%, and fixed cost absorption was 129.9%. The increase in earnings before taxes was principally driven by a 57.7% increase in gross profit, including a 39.9% increase in same-store gross profit. For the nine months ended September 30, 2021, earnings before taxes increased 123.4% to $115.5 million compared to $51.7 million in the same period last year and return on sales was 6.5%.

Penske Transportation Solutions Investment

Penske Transportation Solutions ("PTS") is a leading provider of full-service truck leasing, truck rental, contract maintenance, and logistics services. Penske Automotive Group has a 28.9% ownership interest in PTS and accounts for its ownership interest using the equity method of accounting. For the three and nine months ended September 30, 2021, the company recorded $118.3 million and $274.5 million in earnings compared to $64.5 million and $108.0 million for the same period last year, representing increases of 83.4% and 154.2%, respectively. The increase was principally driven by a strong North American Class 8 truck market and increased demand for the company's full-service leasing, rental, and logistics services, coupled with improved efficiency and a reduction in operating expenses which drove a 14% return on sales for PTS during the third quarter 2021.

Best To Work For

We are pleased to announce that thirty-five of our U.S.-based dealerships have been named to the Automotive News List of Top 100 Dealerships to Work For, the most of any dealership group. Audi Turnersville was once again ranked No. 1; the Company has six dealerships in the top ten and fifteen of the top 25 on the annual list. In addition, seven dealerships were ranked in the Top 10 nationally, including the top three places, for their efforts to promote Diversity, Equity & Inclusion.

Corporate Development and Liquidity

Through the nine months ended September 30, 2021, we acquired annualized revenue of approximately $600 million. Subsequent to September 30, 2021, we acquired the remaining 51% of our Japan-based joint venture of premium/luxury automotive brands which is expected to add $250 million in annualized revenue. We have an additional $300 million in annualized revenue under contract and subject to due diligence at the present time.

As of September 30, 2021, the company had available liquidity under its various credit agreements of approximately $1.1 billion, plus $119 million in cash.

Dividend and Share Repurchases

On October 20, 2021, we announced an increase in the quarterly dividend to $0.46 per share payable on December 1, 2021, to shareholders of record as of November 10, 2021.

During the nine months ended September 30, 2021, we repurchased 2,524,938 shares of our outstanding common stock for $219.8 million, or an average of $87.05 per share, including 2.0 million shares during the third quarter. At the end of the third quarter, we had $71.3 million available under our Board approved share repurchase authority.

Conference Call

Penske Automotive Group will host a conference call discussing financial results relating to the third quarter of 2021 on Wednesday, October 27, 2021, at 2:00 p.m.Eastern Daylight Time. To listen to the conference call, participants must dial (866) 996-5381 [International, please dial (602) 585-9891] using access code 4572964. 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 third quarter 2021 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 Automotive

Penske Automotive Group, Inc., (NYSE:PAG) headquartered in Bloomfield Hills, Michigan, is a diversified international transportation services company and one of the world's premier automotive and commercial truck retailers. PAG operates dealerships principally in the United States, the United Kingdom, Canada, Germany, Italy, and Japan and is one of the largest retailers of commercial trucks in North America for Freightliner. PAG also distributes and retails commercial vehicles, diesel and gas engines, power systems, and related parts and services principally in Australia and New Zealand. Additionally, PAG owns 28.9% of Penske Transportation Solutions, a business that manages a fleet of over 350,000 vehicles providing innovative transportation, supply chain, and technology solutions to North American fleets. PAG is a member of the Fortune 500, Russell 1000, and Russell 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 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, earnings before interest, taxes, depreciation, and amortization ("EBITDA"), and adjusted earnings before interest, taxes, depreciation, and amortization. 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 financial performance, growth plans, and completion of the acquisitions. Actual results may vary materially because of risks and uncertainties that are difficult to predict. These risks and uncertainties include, among others, the satisfaction of customary closing conditions, 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 or other components, 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, 2020, 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:

Shelley Hulgrave 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.

248-648-2812 248-648-2540

shulgrave@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 Nine Months Ended

September 30, September 30,

2021 2020 Change 2021 2020 Change

Revenue $6,497.3$5,971.68.8 %$19,258.6$14,631.831.6 %

Cost of Sales 5,331.6 5,015.16.3 % 15,997.0 12,345.729.6 %

Gross Profit $1,165.7$956.5 21.9 %$3,261.6 $2,286.1 42.7 %

SG&A Expenses 757.7 643.3 17.8 % 2,171.8 1,738.7 24.9 %

Depreciation 30.2 29.0 4.1 % 89.7 85.4 5.0 %

Operating Income $377.8 $284.2 32.9 %$1,000.1 $462.0 116.5 %

Floor Plan Interest Expense (6.0) (8.0) (25.0)% (23.4) (37.4) (37.4)%

Other Interest Expense (16.2) (29.1) (44.3)% (53.8) (89.2) (39.7)%

Debt Redemption Costs - (1.7) nm % (17.0) (1.7) nm %

Equity in Earnings of Affiliates 120.5 66.2 82.0 % 281.5 110.6 154.5 %

Income from Continuing Operations Before Income Taxes $476.1 $311.6 52.8 %$1,187.4 $444.3 167.3 %

Income Taxes (120.1) (64.1) 87.4 % (308.0) (100.7) 205.9 %

Income from Continuing Operations $356.0 $247.5 43.8 %$879.4 $343.6 155.9 %

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

Net Income $356.3 $247.6 43.9 %$879.8 $343.9 155.8 %

Less: Income (Loss) Attributable to Non-Controlling 1.2 1.0 nm 3.3 0.5 nm Interests

Net Income Attributable to Common Shareholders $355.1 $246.6 44.0 %$876.5 $343.4 155.2 %



Amounts Attributable to Common Shareholders:

Reported Income from Continuing Operations $356.0 $247.5 43.8 %$879.4 $343.6 155.9 %

Less: Income (Loss) Attributable to Non-Controlling 1.2 1.0 nm 3.3 0.5 nm Interests

Income from Continuing Operations, net of tax $354.8 $246.5 43.9 %$876.1 $343.1 155.3 %

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

Net Income Attributable to Common Shareholders $355.1 $246.6 44.0 %$876.5 $343.4 155.2 %

Income from Continuing Operations Per Share $4.46 $3.07 45.3 %$10.91 $4.27 155.5 %

Income Per Share $4.47 $3.07 45.6 %$10.92 $4.27 155.7 %

Weighted Average Shares Outstanding 79.5 80.4 (1.1) % 80.3 80.4 (0.1) %



nm - not meaningful

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



September 30,December 31,

2021 2020

Assets:

Cash and Cash Equivalents $119.2 $49.5

Accounts Receivable, Net 737.7 806.9

Inventories 2,598.4 3,425.6

Other Current Assets 121.4 126.8

Total Current Assets 3,576.7 4,408.8

Property and Equipment, Net 2,378.6 2,404.4

Operating Lease Right-of-Use Assets 2,410.9 2,416.5

Intangibles 2,651.6 2,491.8

Other Long-Term Assets 1,701.5 1,525.7

Total Assets $12,719.3 $13,247.2



Liabilities and Equity:

Floor Plan Notes Payable $962.2 $1,780.5

Floor Plan Notes Payable - Non-Trade 1,074.9 1,363.8

Accounts Payable 808.8 675.4

Accrued Expenses and Other Current Liabilities 922.4 767.2

Current Portion Long-Term Debt 67.9 87.5

Liabilities Held for Sale 0.5 0.5

Total Current Liabilities 3,836.7 4,674.9

Long-Term Debt 1,356.7 1,602.1

Long-Term Operating Lease Liabilities 2,341.1 2,350.3

Other Long-Term Liabilities 1,318.4 1,293.8

Total Liabilities 8,852.9 9,921.1

Equity 3,866.4 3,326.1

Total Liabilities and Equity $12,719.3 $13,247.2

PENSKE AUTOMOTIVE GROUP, INC. Consolidated Operations Selected Data (Unaudited)



Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

Geographic Revenue Mix:

North America 61.4 % 56.5 % 60.6 % 59.9 %

U.K. 31.6 % 35.3 % 31.7 % 31.5 %

Other International 7.0 % 8.2 % 7.7 % 8.6 %

Total 100.0 % 100.0 % 100.0 % 100.0 %



Revenue: (Amounts in Millions)

Retail Automotive $5,634.9 $5,258.0 $17,039.4 $12,828.1

Retail Commercial Trucks 717.3 590.9 1,777.3 1,481.5

Commercial Vehicles 145.1 122.7 441.9 322.2 Australia/Power Systems

Total $6,497.3 $5,971.6 $19,258.6 $14,631.8



Gross Profit: (Amounts in Millions)

Retail Automotive $1,010.9 $849.7 $2,851.2 $1,994.1

Retail Commercial Trucks 115.3 73.1 298.0 202.1

Commercial Vehicles 39.5 33.7 112.4 89.9 Australia/Power Systems

Total $1,165.7 $956.5 $3,261.6 $2,286.1



Gross Margin:

Retail Automotive 17.9 % 16.2 % 16.7 % 15.5 %

Retail Commercial Trucks 16.1 % 12.4 % 16.8 % 13.6 %

Commercial Vehicles 27.2 % 27.5 % 25.4 % 27.9 %Australia/Power Systems

Total 17.9 % 16.0 % 16.9 % 15.6 %



Three Months EndedNine Months Ended

September 30, September 30,



2021 2020 2021 2020

Operating Items as a Percentage of Revenue:

Gross Profit 17.9% 16.0 % 16.9% 15.6%

Selling, General and Administrative 11.7% 10.8 % 11.3% 11.9% Expenses

Operating Income 5.8 % 4.8 % 5.2 % 3.2 %

Income from Continuing Operations 7.3 % 5.2 % 6.2 % 3.0 % Before Income Taxes



Operating Items as a Percentage of Total Gross Profit:

Selling, General and Administrative 65.0% 67.3 % 66.6% 76.1% Expenses

Operating Income 32.4% 29.7 % 30.7% 20.2%



Three Months Ended Nine Months Ended

September 30, September 30,



(Amounts in Millions)2021 2020 2021 2020



EBITDA (1) $522.5 $369.7 $1,330.9$618.9

Floorplan Credits $10.9 $10.3 $38.1 $27.3

Rent Expense $59.3 $58.7 $177.7 $173.1

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

PENSKE AUTOMOTIVE GROUP, INC. Retail Automotive Operations (Unaudited)



Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 Change 2021 2020 Change

Retail Automotive Units:

New Retail 44,373 52,522 (15.5)% 152,571 126,396 20.7 %

Used Retail 70,450 70,800 (0.5) % 205,601 176,456 16.5 %

Total 114,823 123,322 (6.9) % 358,172 302,852 18.3 %



Retail Automotive Revenue: (Amounts in Millions)

New Vehicles$2,275.2 $2,350.6 (3.2) % $7,507.9 $5,599.8 34.1 %

Used 2,302.3 1,954.1 17.8 % 6,437.9 4,739.8 35.8 % Vehicles

Finance and Insurance, 202.7 174.4 16.2 % 583.8 415.8 40.4 % Net

Service and 555.3 521.8 6.4 % 1,604.7 1,380.3 16.3 % Parts

Fleet and 299.4 257.1 16.5 % 905.1 692.4 30.7 % Wholesale

Total $5,634.9 $5,258.0 7.2 % $17,039.4 $12,828.1 32.8 % Revenue



Retail Automotive Gross Profit: (Amounts in Millions)

New Vehicles$264.0 $192.8 36.9 % $745.6 $437.6 70.4 %

Used 193.2 143.3 34.8 % 496.7 284.9 74.3 % Vehicles

Finance and Insurance, 202.7 174.4 16.2 % 583.8 415.8 40.4 % Net

Service and 333.7 322.0 3.6 % 976.1 827.0 18.0 % Parts

Fleet and 17.3 17.2 0.6 % 49.0 28.8 70.1 % Wholesale

Total Gross $1,010.9 $849.7 19.0 % $2,851.2 $1,994.1 43.0 % Profit



Retail Automotive Revenue Per Vehicle Retailed:

New Vehicles$51,273 $44,754 14.6 % $49,209 $44,303 11.1 %

Used 32,680 27,601 18.4 % 31,312 26,861 16.6 % Vehicles



Retail Automotive Gross Profit Per Vehicle Retailed:

New Vehicles$5,948 $3,670 62.1 % $4,886 $3,462 41.1 %

Used 2,743 2,024 35.5 % 2,416 1,615 49.6 % Vehicles

Finance and 1,765 1,414 24.8 % 1,630 1,373 18.7 % Insurance



Retail Automotive Gross Margin:

New Vehicles 11.6 % 8.2 %+340 bps 9.9 % 7.8 %+210 bps

Used 8.4 % 7.3 %+110 bps 7.7 % 6.0 %+170 bpsVehicles

Service and 60.1 % 61.7 %(160) bps 60.8 % 59.9 %90 bpsParts

Fleet and 5.8 % 6.7 %(90) bps 5.4 % 4.2 %+120 bpsWholesale

Total Gross 17.9 % 16.2 %+170 bps 16.7 % 15.5 %+120 bpsMargin



Retail Automotive Revenue Mix Percentages:

New Vehicles 40.4 % 44.7 %(430) bps 44.1 % 43.7 %+40 bps

Used 40.9 % 37.2 %+370 bps 37.8 % 36.9 %+90 bpsVehicles

Finance and Insurance, 3.6 % 3.3 %30 bps 3.4 % 3.2 %+20 bpsNet

Service and 9.9 % 9.9 %-- bps 9.4 % 10.8 %(140)bpsParts

Fleet and 5.2 % 4.9 %30 bps 5.3 % 5.4 %(10) bpsWholesale

Total 100.0 % 100.0 % 100.0 % 100.0 %



Retail Automotive Gross Profit Mix Percentages:

New Vehicles 26.1 % 22.7 %+340 bps 26.2 % 21.9 %+430 bps

Used 19.1 % 16.9 %+220 bps 17.4 % 14.3 %+310 bpsVehicles

Finance and Insurance, 20.1 % 20.5 %(40) bps 20.5 % 20.9 %(40) bpsNet

Service and 33.0 % 37.9 %(490) bps 34.2 % 41.5 %(730)bpsParts

Fleet and 1.7 % 2.0 %(30) bps 1.7 % 1.4 %+30 bpsWholesale

Total 100.0 % 100.0 % 100.0 % 100.0 %

PENSKE AUTOMOTIVE GROUP, INC. Retail Automotive Operations Same-Store (Unaudited)



Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 Change 2021 2020 Change

Retail Automotive Same-Store Units:

New Retail 44,107 51,736 (14.7)% 152,051 124,199 22.4 %

Used Retail 68,380 70,069 (2.4) % 201,465 174,073 15.7 %

Total 112,487 121,805 (7.6) % 353,516 298,272 18.5 %



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

New Vehicles$2,252.4 $2,323.7 (3.1) % $7,464.4 $5,526.7 35.1 %

Used 2,249.3 1,934.1 16.3 % 6,339.9 4,682.4 35.4 % Vehicles

Finance and Insurance, 199.2 172.7 15.3 % 576.9 410.8 40.4 % Net

Service and 548.7 514.4 6.7 % 1,594.3 1,358.7 17.3 % Parts

Fleet and 294.3 254.0 15.9 % 896.7 679.2 32.0 % Wholesale

Total $5,543.9 $5,198.9 6.6 % $16,872.2 $12,657.8 33.3 % Revenue



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

New Vehicles$260.9 $191.2 36.5 % $740.2 $433.5 70.7 %

Used 188.8 141.8 33.1 % 489.6 282.0 73.6 % Vehicles

Finance and Insurance, 199.2 172.7 15.3 % 576.9 410.8 40.4 % Net

Service and 329.1 317.8 3.6 % 968.5 815.0 18.8 % Parts

Fleet and 17.3 17.0 1.8 % 48.8 28.4 71.8 % Wholesale

Total Gross $995.3 $840.5 18.4 % $2,824.0 $1,969.7 43.4 % Profit



Retail Automotive Same-Store Revenue Per Vehicle Retailed:

New Vehicles$51,066 $44,915 13.7 % $49,091 $44,499 10.3 %

Used 32,894 27,604 19.2 % 31,469 26,899 17.0 % Vehicles



Retail Automotive Same-Store Gross Profit Per Vehicle Retailed:

New Vehicles$5,914 $3,695 60.1 % $4,868 $3,491 39.4 %

Used 2,762 2,024 36.5 % 2,430 1,620 50.0 % Vehicles

Finance and 1,771 1,418 24.9 % 1,632 1,377 18.5 % Insurance



Retail Automotive Same-Store Gross Margin:

New Vehicles 11.6 % 8.2 %+340 bps 9.9 % 7.8 %+210 bps

Used 8.4 % 7.3 %+110 bps 7.7 % 6.0 %+170 bpsVehicles

Service and 60.0 % 61.8 %(180) bps 60.7 % 60.0 %70 bpsParts

Fleet and 5.9 % 6.7 %(80) bps 5.4 % 4.2 %+120 bpsWholesale

Total Gross 18.0 % 16.2 %+180 bps 16.7 % 15.6 %+110 bpsMargin



Retail Automotive Revenue Mix Percentages:

New Vehicles 40.6 % 44.7 %(410) bps 44.2 % 43.7 %+50 bps

Used 40.6 % 37.2 %+340 bps 37.6 % 37.0 %+60 bpsVehicles

Finance and Insurance, 3.6 % 3.3 %30 bps 3.4 % 3.2 %+20 bpsNet

Service and 9.9 % 9.9 %-- bps 9.4 % 10.7 %(130)bpsParts

Fleet and 5.3 % 4.9 %40 bps 5.4 % 5.4 %-- bpsWholesale

Total 100.0 % 100.0 % 100.0 % 100.0 %



Retail Automotive Gross Profit Mix Percentages:

New Vehicles 26.2 % 22.7 %+350 bps 26.2 % 22.0 %+420 bps

Used 19.0 % 16.9 %+210 bps 17.3 % 14.3 %+300 bpsVehicles

Finance and Insurance, 20.0 % 20.5 %(50) bps 20.4 % 20.9 %(50) bpsNet

Service and 33.1 % 37.8 %(470) bps 34.3 % 41.4 %(710)bpsParts

Fleet and 1.7 % 2.1 %(40) bps 1.8 % 1.4 %+40 bpsWholesale

Total 100.0 % 100.0 % 100.0 % 100.0 %

PENSKE AUTOMOTIVE GROUP, INC. Retail Commercial Truck Operations (Unaudited)



Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 Change 2021 2020 Change

Retail Commercial Truck Units:

New Retail 3,892 3,196 21.8 % 9,371 8,070 16.1 %

Used Retail 928 1,284 (27.7) % 2,601 2,755 (5.6) %

Total 4,820 4,480 7.6 % 11,972 10,825 10.6 %



Retail Commercial Truck Revenue: (Amounts in Millions)

New Vehicles$464.1 $376.6 23.2 % $1,110.8 $930.4 19.4 %

Used 81.2 63.9 27.1 % 191.2 135.4 41.2 % Vehicles

Finance and Insurance, 4.8 4.1 17.1 % 11.7 10.5 11.4 % Net

Service and 160.9 122.1 31.8 % 442.8 358.1 23.7 % Parts

Wholesale 6.3 24.2 (74.0) % 20.8 47.1 (55.8) % and Other

Total $717.3 $590.9 21.4 % $1,777.3 $1,481.5 20.0 % Revenue



Retail Commercial Truck Gross Profit: (Amounts in Millions)

New Vehicles$22.2 $12.3 80.5 % $56.0 $34.4 62.8 %

Used 16.5 0.8 1,962.5% 32.4 (4.5) 820.0 % Vehicles

Finance and Insurance, 4.8 4.1 17.1 % 11.7 10.5 11.4 % Net

Service and 67.8 52.9 28.2 % 186.8 155.4 20.2 % Parts

Wholesale 4.0 3.0 33.3 % 11.1 6.3 76.2 % and Other

Total Gross $115.3 $73.1 57.7 % $298.0 $202.1 47.5 % Profit



Retail Commercial Truck Revenue Per Vehicle Retailed:

New Vehicles$119,243 $117,825 1.2 % $118,532 $115,286 2.8 %

Used 87,552 49,735 76.0 % 73,515 49,141 49.6 % Vehicles



Retail Commercial Truck Gross Profit Per Vehicle Retailed:

New Vehicles$5,700 $3,856 47.8 % $5,978 $4,265 40.2 %

Used 17,762 626 2,737.4% 12,459 (1,645) 857.4 % Vehicles

Finance and 1,006 923 9.0 % 985 973 1.2 % Insurance



Retail Commercial Truck Gross Margin:

New Vehicles 4.8 % 3.3 %+150 bps 5.0 % 3.7 %+130 bps

Used 20.3 % 1.3 %1,900 bps 16.9 % (3.3) %+2,020 bpsVehicles

Service and 42.1 % 43.3 %(120) bps 42.2 % 43.4 %(120) bpsParts

Total Gross 16.1 % 12.4 %+370 bps 16.8 % 13.6 %+320 bpsMargin



Retail Commercial Truck Revenue Mix Percentages:

New Vehicles 64.7 % 63.7 %+100 bps 62.5 % 62.8 %(30) bps

Used 11.3 % 10.8 %50 bps 10.8 % 9.1 %+170 bpsVehicles

Finance and Insurance, 0.7 % 0.7 %-- bps 0.7 % 0.7 %-- bpsNet

Service and 22.4 % 20.7 %+170 bps 24.9 % 24.2 %+70 bpsParts

Wholesale 0.9 % 4.1 %(320) bps 1.1 % 3.2 %(210) bpsand Other

Total 100.0 % 100.0 % 100.0 % 100.0 %



Retail Commercial Truck Gross Profit Mix Percentages:

New Vehicles 19.3 % 16.8 %+250 bps 18.8 % 17.0 %+180 bps

Used 14.3 % 1.1 %1,320 bps 10.9 % (2.2) %+1,310 bpsVehicles

Finance and Insurance, 4.2 % 5.6 %(140) bps 3.9 % 5.2 %(130) bpsNet

Service and 58.8 % 72.4 %(1,360)bps 62.7 % 76.9 %(1,420)bpsParts

Wholesale 3.4 % 4.1 %(70) bps 3.7 % 3.1 %+60 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 Nine Months Ended

September 30, September 30,

2021 2020 Change 2021 2020 Change

Retail Commercial Truck Same-Store Units:

New Retail 3,078 3,196 (3.7) % 8,013 8,070 (0.7) %

Used Retail 843 1,284 (34.3) % 2,487 2,755 (9.7) %

Total 3,921 4,480 (12.5) % 10,500 10,825 (3.0) %



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

New Vehicles$382.3 $376.6 1.5 % $969.7 $930.4 4.2 %

Used 74.9 63.9 17.2 % 182.7 135.4 34.9 % Vehicles

Finance and Insurance, 4.6 4.1 12.2 % 11.5 10.5 9.5 % Net

Service and 137.4 122.1 12.5 % 398.3 358.1 11.2 % Parts

Wholesale 6.1 24.2 (74.8) % 20.6 47.1 (56.3) % and Other

Total $605.3 $590.9 2.4 % $1,582.8 $1,481.5 6.8 % Revenue



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

New Vehicles$19.9 $12.3 61.8 % $52.0 $34.4 51.2 %

Used 15.3 0.8 1,812.5% 30.8 (4.5) 784.4 % Vehicles

Finance and Insurance, 4.6 4.1 12.2 % 11.5 10.5 9.5 % Net

Service and 58.4 52.9 10.4 % 169.1 155.4 8.8 % Parts

Wholesale 3.9 2.9 34.5 % 10.9 6.1 78.7 % and Other

Total Gross $102.1 $73.0 39.9 % $274.3 $201.9 35.9 % Profit



Retail Commercial Truck Same-Store Revenue Per Vehicle Retailed:

New Vehicles$124,193 $117,825 5.4 % $121,018 $115,286 5.0 %

Used 88,866 49,735 78.7 % 73,444 49,141 49.5 % Vehicles



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

New Vehicles$6,456 $3,856 67.4 % $6,493 $4,265 52.2 %

Used 18,161 626 2,801.1% 12,392 (1,645) 853.3 % Vehicles

Finance and 1,173 923 27.1 % 1,094 973 12.4 % Insurance



Retail Commercial Truck Same-Store Gross Margin:

New Vehicles 5.2 % 3.3 %+190 bps 5.4 % 3.7 %+170 bps

Used 20.4 % 1.3 %1,910 bps 16.9 % (3.3) %2,020 bpsVehicles

Service and 42.5 % 43.3 %(80) bps 42.5 % 43.4 %(90) bpsParts

Total Gross 16.9 % 12.4 %+450 bps 17.3 % 13.6 %+370 bpsMargin



Retail Commercial Truck Revenue Mix Percentages:

New Vehicles 63.2 % 63.7 %(50) bps 61.3 % 62.8 %(150) bps

Used 12.4 % 10.8 %+160 bps 11.5 % 9.1 %+240 bpsVehicles

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

Service and 22.7 % 20.7 %+200 bps 25.2 % 24.2 %+100 bpsParts

Wholesale 0.9 % 4.1 %(320) bps 1.3 % 3.2 %(190) bpsand Other

Total 100.0 % 100.0 % 100.0 % 100.0 %



Retail Commercial Truck Gross Profit Mix Percentages:

New Vehicles 19.5 % 16.8 %+270 bps 19.0 % 17.0 %+200 bps

Used 15.0 % 1.1 %1,390 bps 11.2 % (2.2) %1,340 bpsVehicles

Finance and Insurance, 4.5 % 5.6 %(110) bps 4.2 % 5.2 %(100) bpsNet

Service and 57.2 % 72.5 %(1,530)bps 61.6 % 77.0 %(1,540)bpsParts

Wholesale 3.8 % 4.0 %(20) bps 4.0 % 3.0 %+100 bpsand Other

Total 100.0 % 100.0 % 100.0 % 100.0 %

PENSKE AUTOMOTIVE GROUP, INC. Supplemental Data (Unaudited)



Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

Retail Automotive Revenue Mix:

Premium:

BMW / MINI 23 %23 %23 %22 %

Audi 12 %13 %12 %13 %

Mercedes-Benz 10 %10 %10 %10 %

Land Rover / Jaguar 7 %9 %9 %9 %

Porsche 7 %7 %7 %7 %

Ferrari / Maserati 3 %2 %2 %3 %

Lexus 3 %3 %3 %3 %

Acura 1 %1 %1 %1 %

Bentley 1 %1 %1 %1 %

Others 2 %2 %2 %2 %

Total Premium 69 %71 %70 %71 %

Volume Non-U.S.:

Toyota 12 %10 %12 %10 %

Honda 6 %6 %6 %6 %

Volkswagen 2 %2 %2 %3 %

Nissan 1 %1 %1 %1 %

Others 1 %2 %2 %2 %

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

U.S.:

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

CarShop Used Vehicle SuperCenters8 %7 %6 %6 %

Total 100 %100 %100 %100 %



Three Months Ended Nine Months Ended

September 30, September 30,

Capital Expenditures / Stock Repurchases:2021 2020 2021 2020

(Amounts in Millions)

Capital expenditures $ 66.7 $ 37.5$157.5 $114.3

Cash paid for acquisitions, net of $ - $ - $278.0 $- cash acquired

Stock repurchases

Aggregate purchase price $ 178.9 $ 0.2 $219.8 $34.4

Shares repurchased 2.0 - 2.5 1.0



Balance Sheet and Other Highlights: September December 30, 2021 31, 2020

(Amounts in Millions)

Cash and Cash Equivalents $119.2 $49.5

Inventories $2,598.4 $3,425.6

Total Floorplan Notes Payable $2,037.1 $3,144.3

Total Long-Term Debt $1,424.6 $1,689.6

Equity $3,866.4 $3,326.1



Debt to Total Capitalization Ratio 26.9% 33.7%

Leverage Ratio (1) 0.9x 1.8x



New vehicle days' supply 19 days 50 days

Used vehicle days' supply 40 days 48 days

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

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



The following tables reconcile reported income from continuing operations andearnings per share to adjusted income from continuing operations and adjustedearnings per share for the three and nine months ended September 30, 2021, and 2020:



Income from Continuing Operations:



Three Months Ended Nine Months Ended

(Amounts in September 30, September 30, Millions)

2021 2020 % Change 2021 2020 % Change



Income from Continuing $354.8$246.5 43.9 %$876.1$343.1 155.3 %Operations

Tax legislation - (15.4)nm 8.8 (15.4)nm changes (1) (2)

Debt redemption - 1.3 nm 12.6 1.3 nm costs (3)

Adjusted Income from $354.8$232.4 52.7 %$897.5$329.0 172.8 %Continuing Operations



Earnings Per Share:



Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 % Change 2021 2020 % Change



Earnings Per Share from $4.46 $3.07 45.3 %$10.91$4.27 155.5 %Continuing Operations

Tax legislation - (0.19)nm 0.11 (0.19)nm changes (1) (2)

Debt redemption - 0.02 nm 0.16 0.02 nm costs (3)

Adjusted Earnings Per Share from $4.46 $2.90 53.8 %$11.18$4.10 172.7 %Continuing Operations

For the three and nine months ended September 30, 2020, related to a net(1) income tax benefit of $15.4 million, or $0.19 per share, from various U.S. and foreign tax legislation changes

For the nine months ended September 30, 2021, represents a revaluation of(2) our U.K. deferred tax assets and liabilities due to an increase in the U.K. corporate tax rate from 19% currently to 25%, effective April 1, 2023

Related to expenses in connection with the redemption of our 5.5% senior(3) subordinated notes due 2026 in 2021 and the redemption of our 5.75% senior subordinated notes due 2022 in 2020

The following tables reconcile reported net income to earnings before interest, taxes, depreciation, and amortization ("EBITDA") for the three and nine months ended September 30, 2021, and 2020:



Three Months Ended

September 30, 2021 vs. 2020

(Amounts in Millions) 2021 2020 Change % Change



Net Income $356.3 $247.6$108.7 43.9 %

Add: Depreciation 30.2 29.0 1.2 4.1 %

Other Interest Expense 16.2 29.1 (12.9)(44.3)%

Income Taxes 120.1 64.1 56.0 87.4 %

Income from Discontinued Operations, (0.3) (0.1) (0.2) nm net of tax

EBITDA $522.5 $369.7$152.8 41.3 %

Add: Debt redemption costs - 1.7 (1.7) nm

Adjusted EBITDA $522.5 $371.4$151.1 40.7 %



Nine Months Ended

September 30, 2021 vs. 2020

(Amounts in Millions) 2021 2020 Change % Change



Net Income $879.8 $343.9$535.9 155.8 %

Add: Depreciation 89.7 85.4 4.3 5.0 %

Other Interest Expense 53.8 89.2 (35.4)(39.7)%

Income Taxes 308.0 100.7 207.3 205.9 %

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

EBITDA $1,330.9$618.9$712.0 115.0 %

Add: Debt redemption costs 17.0 1.7 15.3 nm

Adjusted EBITDA $1,347.9$620.6$727.3 117.2 %

nm - not meaningful

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



The following table reconciles the leverage ratio as of September 30, 2021, and December 31, 2020:



Three Nine Trailing Trailing Twelve Twelve

Months Months Months Months Ended Ended Ended Ended

(Amounts in Millions) December September September December 31, 2020 30, 2021 30, 2021 31, 2020



Net Income $201.4 $879.8 $1,081.2 $545.3

Add: Depreciation 30.1 89.7 119.8 115.5

Other Interest Expense 28.7 53.8 82.5 119.6

Income Taxes 62.0 308.0 370.0 162.7

Income from Discontinued (0.1) (0.4) (0.5) (0.4) Operations, net of tax

EBITDA $322.1 $1,330.9 $1,653.0 $942.7



Total Non-Vehicle Long-Term Debt $1,424.6 $1,689.6

Leverage Ratio 0.9x 1.8x

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SOURCE Penske Automotive Group, Inc.