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Penske Automotive Reports Record First Quarter Results

The following excerpt is from the company's SEC filing.

Earnings Per Share From Continuing Operations of $0.90

First Quarter 2016 Highlights

Revenue Increases 7.6% to $4.8 Billion

Same-Store Retail Revenue Increases 2.5%, Excluding Foreign Exchange 4.7%

Income from Continuing Operations Attributable to Common Shareholders

Increases 4.2% to $79.3 Million

Earnings Per Share from Continuing Operations Attributable to Common

Shareholders Increases 7.1% to $0.90

EBITDA Increases 4.7% to $157.6 Million

BLOOMFIELD HILLS, MI,

April 26, 2016

Penske Automotive Group, Inc.

(NYSE:PAG), an in ternational transportation services company, announced today record first quarter 2016 results. For the three months ended March 31, 2016, income from continuing operations attributable to common shareholders increased 4.2% to $79.3 million, and related earnings per share increased 7.1% to $0.90 when compared to the same period last year. During the first quarter of 2016, foreign exchange rates negatively impacted earnings per share attributable to common shareholders by $0.03. Total automotive retail units increased 9.9% and total revenue increased 7.6% to $4.8 billion. Excluding foreign exchange, total revenue increased 10.0%, including 4.7% on a same-store basis.

The resiliency of the U.S. and U.K. automotive markets and a solid performance from our truck dealership operations drove Penske Automotive to another quarter of record results, said Chairman Roger S. Penske. We believe the diversification provided by our business model continues to reward our shareholders. Further, I am particularly pleased with the 50-basis-point improvement of selling, general and administrative expenses as a percent of gross profit and gross profit flow-through of greater than 30% in the quarter.

Automotive Retail Highlights of the First Quarter

Retail Unit Sales Increased 9.9% to 111,494

New unit retail sales +10.2%

Used unit retail sales +9.6%

Same-Store Retail Revenue Increased 2.5%

New +1.6%; Used +3.3%; Finance & Insurance +5.9% Service and Parts +3.7%

Excluding f/x, Same-Store retail revenue increased 4.7%

Average Transaction Price Per Unit

New vehicles $38,607, -$1,532/unit, or -3.8%

Used vehicles $26,780, +$108/unit, or +0.4%

Average Gross Profit Per Unit

New $2,988, -$162/unit; Gross Margin 7.7%, -10 basis points

Excluding f/x $3,051, -$99/unit; Gross Margin 7.7%, -10 basis points

Used $1,598, -$165/unit; Gross Margin 6.0%, -60 basis points

Excluding f/x $1,633, -$130/unit; Gross Margin 5.9%, -70 basis points

Finance & Insurance $1,062, -$34/unit

Excluding f/x $1,085, -$11/unit

Note: f/x = foreign exchange

Commercial Truck Dealership Operations

The company operates commercial truck dealership locations in the U.S. and Canada under the Premier Truck Group brand name offering primarily the Freightliner and Western Star brands. For the three months ended March 31, 2016 and 2015, Premier Truck Group generated $206.7 million and $192.7 million of revenue, and $33.2 million and $32.8 million of gross profit, respectively, principally through the retail sale of new/used medium and heavy-duty trucks and service/parts sales. Service and parts gross profit represents approximately 79.5% and 71.3% of total Premier Truck Group gross profit, respectively.

Share Repurchases

During the three months ended March 31, 2016, the company acquired 4.5 million shares of its common stock for approximately $167.9 million. As of March 31, 2016, the company has a remaining share repurchase authorization of approximately $32.1 million.

Acquisitions Update

On April 12, 2016, the company announced that its Premier Truck Group subsidiary had acquired Harper Truck Centres, located in Ontario, Canada. Harper Truck Centres has five dealership locations in the greater Toronto, Ontario market area. The acquisition is expected to generate approximately $130 million in annualized revenue.

Conference Call

Penske Automotive will host a conference call discussing financial results relating to the first quarter of 2016 on

2:00 p.m. Eastern Daylight Time

. To listen to the conference call, participants must dial

800-230-1092 [International, please dial 612-234-9960]

. The call will also be simultaneously broadcast over the Internet through the Investor Relations section of the Penske Automotive Group website. Additionally, an investor presentation relating to the first quarter 2016 financial results has been posted to the companys website. To access the presentation or to listen to the companys webcast, please refer to

www.penskeautomotive.com.

About Penske Automotive

., (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, 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 employs more than 22,000 people worldwide and is a member of the Fortune 500 and Russell 2000. For additional information, visit the companys website at

Non-GAAP Financial Measures

This release contains certain non-GAAP financial measures as defined under SEC rules, such as earnings before interest, taxes, depreciation and amortization (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 companys disclosures. They provide a meaningful presentation of the companys results from its core business operations excluding the impact of items not related to the companys ongoing core business operations, and improve the period-to-period comparability of the companys 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 companys 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. 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 and foreign currency exchange rates, adverse conditions affecting a particular manufacturer, including the adverse impact to the vehicle and parts supply chain due to 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 Automotives business, markets, conditions and other uncertainties, which could affect Penske Automotives future performance. These risks and uncertainties are addressed in Penske Automotives Form 10-K for the year ended December 31, 2015, 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.

Find a vehicle

http://www.penskecars.com

Engage Penske Automotive

http://www.penskesocial.com

Like Penske Automotive on Facebook

https://facebook.com/PenskeCars

Follow Penske Automotive on Twitter

Visit Penske Automotive on YouTube

http://www.youtube.com/penskecars

Inquiries should contact:

J.D. Carlson

Executive Vice President and

Chief Financial Officer

Penske Automotive Group, Inc.

248-648-2810

jcarlson@penskeautomotive.com

Anthony R. Pordon

Executive Vice President Investor Relations and

Corporate Development

248-648-2540

tpordon@penskeautomotive.com

PENSKE AUTOMOTIVE GROUP, INC.

Consolidated Condensed Statements of Income

(Amounts In Millions, Except Per Share Data)

(Unaudited)

Three Months Ended

March 31,

Increase/

(Decrease)

Revenue

4,824.6

4,482.9

Cost of Sales

4,100.8

3,793.0

Gross Profit

SG&A Expenses

Depreciation

Operating Income

Floor Plan Interest Expense

Other Interest Expense

Equity in Earnings of Affiliates

Income from Continuing Operations Before Income Taxes

Income from Continuing Operations

Loss from Discontinued Operations, net of tax

Net Income

Less: Income Attributable to Non-Controlling Interests

Net Income Attributable to Common Shareholders

Amounts Attributable to Common Shareholders:

Reported Income from Continuing Operations

Income from Continuing Operations, net of tax

Income from Continuing Operations Per Share

Net Income Per Share

Weighted Average Shares Outstanding

nm not meaningful

Consolidated Condensed Balance Sheets

(Amounts In Millions)

December 31,

Assets:

Cash and Cash Equivalents

Accounts Receivable, Net

Inventories

3,513.4

3,463.5

Other Current Assets

Assets Held for Sale

Total Current Assets

4,505.9

4,406.9

Property and Equipment, Net

1,545.8

1,520.1

Intangibles

1,734.8

1,730.8

Other Long-Term Assets

Total Assets

8,172.9

8,013.4

Liabilities and Equity:

Floor Plan Notes Payable

2,262.5

2,247.2

Floor Plan Notes Payable Non-Trade

1,187.3

1,132.4

Accounts Payable

Accrued Expenses

Current Portion Long-Term Debt

Liabilities Held for Sale

Total Current Liabilities

4,438.9

4,285.7

1,330.1

1,247.0

Other Long-Term Liabilities

Total Liabilities

6,448.9

6,178.5

1,724.0

1,834.9

Total Liabilities and Equity

Consolidated Operations

Selected Data

Geographic Revenue Mix:

Other International

Revenue: (Amounts in Millions)

Retail Automotive

4,512.9

4,186.8

Retail Commercial Trucks

Commercial Vehicles Australia/Power Systems and Other

Gross Profit: (Amounts in Millions)

Gross Margin:

Operating Items as a Percentage of Revenue:

-40 bps

Selling, General and Administrative Expenses

Inc. From Cont. Ops. Before Inc. Taxes

-10 bps

Operating Items as a Percentage of Total Gross Profit:

-50 bps

+30 bps

Increase/ (Decrease)

EBITDA*

Floorplan Credits

Rent Expense

See the following Non-GAAP reconciliation table.

Retail Automotive Operations

Retail Automotive Units:

New Retail

58,753

53,318

Used Retail

52,741

48,102

101,420

Retail Automotive Revenue: (Amounts in Millions)

New Vehicles

2,268.2

2,140.1

Used Vehicles

1,412.4

1,283.0

Finance and Insurance, Net

Fleet and Wholesale

Total Revenue

Retail Automotive Gross Profit: (Amounts in Millions)

Retail Automotive Revenue Per Vehicle Retailed:

40,139

26,672

Retail Automotive Gross Profit Per Vehicle Retailed:

Retail Automotive Revenue Mix Percentages:

Retail Automotive Gross Profit Mix Percentages:

Retail Automotive Gross Margin:

-60 bps

+20 bps

Total Gross Margin

-30 bps

PENSKE AUTOMOTIVE GROUP, INC.

Retail Automotive Revenue Mix:

Premium:

BMW / MINI

Mercedes-Benz

Land Rover

Porsche

Ferrari / Maserati

Bentley

Others

Total Premium

Volume Non-U.S.:

Toyota

Volkswagen

Nissan

Total Volume Non-U.S.

General Motors / Chrysler / Ford

Retail Automotive Geographic Revenue Mix:

Same-Store

Retail Automotive Same-Store Units:

55,457

53,239

48,711

48,089

104,168

101,328

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

2,166.5

2,133.4

1,325.0

1,282.5

4,292.7

4,177.9

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

Retail Automotive Same-Store Revenue Per Vehicle Retailed:

39,066

40,072

27,201

26,668

Retail Automotive Same-Store Gross Profit Per Vehicle Retailed:

Retail Commercial Truck Operations

Retail Commercial Truck Units:

Retail Commercial Truck Revenue: (Amounts in Millions)

Lease, Rental & Wholesale

Retail Commercial Truck Gross Profit: (Amounts in Millions)

Retail Commercial Truck Revenue Per Vehicle Retailed:

100,618

98,345

49,727

53,700

Retail Commercial Truck Gross Profit Per Vehicle Retailed:

(1,471

Retail Commercial Truck Gross Profit as a Percentage of Revenue

Consolidated Non-GAAP Reconciliations

The following table reconciles reported net income to earnings before interest, taxes, depreciation and amortization (EBITDA) for the three months ended March 31, 2016 and 2015:

Add: Depreciation

nm not meaningful

11

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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