Segment Information

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Segment Information

10. Segment Information

As of March 31, 2021, Sonic had two operating segments: (1) retail automotive franchises that sell new vehicles and buy and sell used vehicles, sell replacement parts, perform vehicle maintenance, warranty and repair services, and arrange finance and insurance products (the “Franchised Dealerships Segment”); and (2) pre-owned vehicle specialty retail locations that provide guests an opportunity to search our nationwide inventory, purchase a pre-owned vehicle, select finance and insurance products and sell their current vehicle to us (the “EchoPark Segment”). Sonic has determined that its operating segments also represent its reportable segments.

The reportable segments identified above are the business activities of Sonic for which discrete financial information is available and for which operating results are regularly reviewed by Sonic’s chief operating decision maker to assess operating performance and allocate resources. Sonic’s chief operating decision maker is a group of three individuals consisting of: (1) the Company’s Chief Executive Officer; (2) the Company’s President; and (3) the Company’s Chief Financial Officer.

Reportable segment financial information for the three months ended March 31, 2021 and 2020 were as follows:

	Three Months Ended March 31,
	2021		2020
	(In thousands)
Segment Revenues:
Franchised Dealerships Segment revenues:
New vehicles	$	1,156,317	$	959,489
Used vehicles	661,534		566,888
Wholesale vehicles	56,204		42,440
Parts, service and collision repair	308,077		324,501
Finance, insurance and other, net	97,525		83,029
Franchised Dealerships Segment revenues	$	2,279,657	$	1,976,347
EchoPark Segment revenues:
Used vehicles	$	428,563	$	283,164
Wholesale vehicles	18,605		6,103
Parts, service and collision repair	12,837		10,179
Finance, insurance and other, net	47,136		32,263
EchoPark Segment revenues	$	507,141	$	331,709
Total consolidated revenues	$	2,786,798	$	2,308,056

	Three Months Ended March 31,
	2021		2020
	(In thousands, except unit data)
Segment Income (Loss) (1):
Franchised Dealerships Segment	$	70,543	$	22,656
EchoPark Segment	2,010		2,096
Total segment income (loss)	$	72,553	$	24,752
Impairment charges (2)	—		(268,000)
Income (loss) from continuing operations before taxes	$	72,553	$	(243,248)
Retail New and Used Vehicle Unit Sales Volume:
Franchised Dealerships Segment	51,594		47,762
EchoPark Segment	19,670		13,986
Total retail new and used vehicle unit sales volume	71,264		61,748

(1)Segment income (loss) for each segment is defined as income (loss) from continuing operations before taxes and impairment charges.

(2)For the three months ended March 31, 2020, the above amount includes a pre-tax impairment charge of approximately $268.0 million related to adjustments in fair value of goodwill for the Franchised Dealerships Segment as a result of the effects of the COVID-19 pandemic on our operations and market value.

	Three Months Ended March 31,
	2021		2020
	(In thousands)
Impairment Charges:
Franchised Dealerships Segment	$	—	$	268,000
EchoPark Segment	—		—
Total impairment charges	$	—	$	268,000

	Three Months Ended March 31,
	2021		2020
	(In thousands)
Depreciation and Amortization:
Franchised Dealerships Segment	$	20,376	$	19,589
EchoPark Segment	3,311		2,708
Total depreciation and amortization	$	23,687	$	22,297

	Three Months Ended March 31,
	2021		2020
	(In thousands)
Floor Plan Interest Expense:
Franchised Dealerships Segment	$	4,117	$	9,608
EchoPark Segment	996		900
Total floor plan interest expense	$	5,113	$	10,508

	Three Months Ended March 31,
	2021		2020
	(In thousands)
Interest Expense, Other, Net:
Franchised Dealerships Segment	$	9,958	$	10,599
EchoPark Segment	327		366
Total interest expense, other, net	$	10,285	$	10,965

	Three Months Ended March 31,
	2021		2020
	(In thousands)
Capital Expenditures:
Franchised Dealerships Segment	$	46,171	$	17,249
EchoPark Segment	21,492		2,556
Total capital expenditures	$	67,663	$	19,805

	March 31, 2021		December 31, 2020
	(In thousands)
Assets:
Franchised Dealerships Segment assets	$	3,054,643	$	3,096,811
EchoPark Segment assets	560,346		478,869
Corporate and other:
Cash and cash equivalents	77,233		170,313
Other corporate assets	5		—
Total assets	$	3,692,227	$	3,745,993