Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Joe Amaturo – Buckingham Research.
Joe Amaturo – Buckingham Research
Just a clarification, did you say that the PTL investment is going to yield about a $10 to $15 million distribution in the first 12 months?
Roger S. Penske
That’s correct.
Joe Amaturo – Buckingham Research
In addition, just so I understand this correctly, you said that there’s going to be a $20 million cash tax benefit in ’09 versus ’08?
Roger S. Penske
We get the benefit of the accelerated appreciation because of our ownership on assets there. It will be less in ’09 but that’s what we picked up in ’08, yes.
Joe Amaturo – Buckingham Research
So you’re probably looking at $10 to $12 million year-on-year improvement in cash all else constant?
Roger S. Penske
I think what I’d rather do is have Bob O’Shaughnessy – you might give him a call and let him answer that. You’ll get a more precise answer.
Joe Amaturo – Buckingham Research
At the end of 2008 did you have any debt outstanding against your used vehicle inventory?
Roger S. Penske
We have typically probably 20% to 25% of our used vehicle inventory financed on a worldwide basis. Typically these are the more expensive buybacks that we have either coming through the premium manufacturers or some opportunistic buys we make in the UK.
Joe Amaturo – Buckingham Research
Then the last one, I noticed that rent expense went up about $10 million in 2008 versus 2007, could you give us a sense – I know you’re not giving guidance but where that’s expected to be tracking in ’09?
Roger S. Penske
I think the majority of the rent of expense would have gone up through the addition of cap ex that we’ve done and I would assume that it’s going to level off and maybe be up 3% to 4% for the year might be realistic but, it’s not going to be anymore than that.
Operator
Your next question comes from Matt Nemer – Thomas Weisel.
Matt Nemer – Thomas Weisel
My first question is on the cost cuts that you’ve talked about of $100 million, what percent of that or what dollar amount would you consider to be fixed versus variable? Then, how much more room do you think there is to go if we’re in this for a little while longer?
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