Segment Information

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Segment Information

Segment Information

As of December 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 years ended December 31, 2021 are as follows:

	Year Ended December 31,
	2021		2020		2019
Segment Revenues:	(In millions)
Franchised Dealerships Segment Revenues:
New vehicles	$	5,109.0	$	4,281.2	$	4,889.2
Used vehicles	2,901.0		2,345.9		2,493.5
Wholesale vehicles	257.2		168.7		180.0
Parts, service and collision repair	1,340.4		1,194.4		1,366.5
Finance, insurance and other, net	443.5		357.8		363.1
Franchised Dealerships Segment revenues	$	10,051.1	$	8,348.0	$	9,292.3
EchoPark Segment Revenues:
New vehicles	$	9.0	$	—	$	—
Used vehicles	2,032.6		1,258.2		1,025.3
Wholesale vehicles	110.0		28.7		22.9
Finance, insurance and other, net	193.7		132.1		113.8
EchoPark Segment revenues	$	2,345.3	$	1,419.0	$	1,162.0
Total consolidated revenues	$	12,396.4	$	9,767.0	$	10,454.3

	Year Ended December 31,
	2021		2020		2019
Segment Income (Loss) (1):	(In millions)
Franchised Dealerships Segment (2)	$	530.3	$	231.2	$	211.3
EchoPark Segment (3)	(72.0)		4.0		9.1
Total segment income (loss)	$	458.3	$	235.2	$	220.4
Impairment charges (4)	(0.1)		(270.0)		(20.8)
Income (loss) from continuing operations before taxes	$	458.2	$	(34.8)	$	199.6

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

(2)For the year ended December 31, 2021, the above amount includes approximately $15.5 million of pre-tax net loss on the extinguishment of debt, $3.0 million of pre-tax net loss on the acquisition of franchised dealerships, partially offset by a $1.8 million pre-tax net gain on the disposal of franchised dealerships. For the year ended December 31, 2020, the above amount includes approximately $4.0 million of pre-tax net gain on the disposal of franchised dealerships. For the year ended December 31, 2019, the above amount includes approximately $76.0 million of pre-tax net gain on the disposal of franchised dealerships, offset partially by approximately $7.2 million of pre-tax net loss on the extinguishment of debt and approximately $6.3 million of pre-tax executive transition costs.

(3)For the year ended December 31, 2021, the above amount includes approximately $6.5 million of long-term compensation-related expenses. For the year ended December 31, 2020, the above amount includes approximately $5.2 million of pre-tax net gain on the disposal of land and buildings at former EchoPark locations.

(4)For the year ended December 31, 2021, the above amount includes approximately $0.1 million of pre-tax impairment charges for the EchoPark Segment. For the year ended December 31, 2020, the above amount includes approximately $270.0 million of pre-tax impairment charges for the Franchised Dealerships Segment. For the year ended December 31, 2019, the above amount includes approximately $1.1 million of pre-tax impairment charges for the Franchised Dealerships Segment and approximately $19.7 million of pre-tax impairment charges for the EchoPark Segment.

	Year Ended December 31,
	2021		2020		2019
	(In millions)
Impairment charges:
Franchised Dealerships Segment	$	—	$	270.0	$	1.1
EchoPark Segment	0.1		—		19.7
Total impairment charges	$	0.1	$	270.0	$	20.8

	Year Ended December 31,
	2021		2020		2019
	(In millions)
Depreciation and amortization:
Franchised Dealerships Segment	$	84.8	$	79.9	$	82.6
EchoPark Segment	16.3		11.1		10.5
Total depreciation and amortization	$	101.1	$	91.0	$	93.1

	Year Ended December 31,
	2021		2020		2019
	(In millions)
Floor plan interest expense:
Franchised Dealerships Segment	$	11.8	$	24.0	$	45.0
EchoPark Segment	4.9		3.2		3.5
Total floor plan interest expense	$	16.7	$	27.2	$	48.5

	Year Ended December 31,
	2021		2020		2019
	(In millions)
Interest expense, other, net:
Franchised Dealerships Segment	$	46.3	$	40.7	$	51.2
EchoPark Segment	1.7		0.9		1.8
Total interest expense, other, net	$	48.0	$	41.6	$	53.0

	Year Ended December 31,
	2021		2020		2019
	(In millions)
Capital expenditures:
Franchised Dealerships Segment	$	204.6	$	92.3	$	89.3
EchoPark Segment	93.6		34.9		36.3
Total capital expenditures	$	298.2	$	127.2	$	125.6

 

	December 31,
	2021		2020
	(In millions)
Assets:
Franchised Dealerships Segment	$	3,934.9	$	3,096.8
EchoPark Segment	740.6		478.9
Corporate and other:
Cash and cash equivalents	299.4		170.3
Other corporate assets	0.2		—
Total assets	$	4,975.1	$	3,746.0