8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 26, 2016

SONIC AUTOMOTIVE, INC.

(Exact name of registrant as specified in its charter)

	Delaware
	(State or other jurisdiction of incorporation)
1-13395		56-2010790
(Commission File Number)		(IRS Employer Identification No.)

4401 Colwick Road Charlotte, North Carolina	28211
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (704) 566-2400

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On April 26, 2016, Sonic Automotive, Inc. (the “Company”) issued a press release announcing its financial results for its fiscal first quarter ended March 31, 2016 (the “Earnings Press Release”). A copy of the Earnings Press Release is attached hereto as Exhibit 99.1 and a copy of the earnings call presentation materials is attached hereto as Exhibit 99.2.

Item 7.01. Regulation FD Disclosure.

On April 26, 2016, in the Earnings Press Release, the Company announced the approval of a quarterly cash dividend.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

99.1	Press release of Sonic Automotive, Inc., dated April 26, 2016
99.2	Earnings call presentation materials

The information in this Current Report on Form 8-K, including the exhibits attached hereto, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SONIC AUTOMOTIVE, INC.
Date: April 26, 2016	By:	/s/ Stephen K. Coss
		Stephen K. Coss
		Senior Vice President and General Counsel

INDEX TO EXHIBITS

Exhibit No.	Description
99.1	Press release of Sonic Automotive, Inc., dated April 26, 2016
99.2	Earnings call presentation materials

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Sonic Automotive, Inc. Reports Record Q1 Results

Adjusted Continuing Operations EPS of $0.39

First Quarter 2016 Results

• Record Q1 pre-owned units of 29,333, up 4.3% over the prior year quarter

• Record Q1 finance and insurance (“F&I”) gross profit of $81.3 million, up 8.9% over the prior year quarter

• Record Q1 fixed operations gross profit of $166.0 million, up 6.2% over the prior year quarter

• Record Q1 total gross profit of $345.2 million, up 3.0% over the prior year quarter

• EchoPark^® stores retailed 941 units

CHARLOTTE, N.C. – April 26, 2016 – Sonic Automotive, Inc. (NYSE: SAH), one of the nation’s largest automotive retailers, today reported adjusted net income from continuing operations for the first quarter of 2016 of $18.2 million, or $0.39 per diluted share. Included in these adjusted amounts are pre-tax expenses of $3.6 million, or $0.05 per diluted share, related to the Company’s EchoPark^® operations. Adjusted net income from continuing operations and related diluted earnings per share are non-GAAP financial measures. The schedules included in this press release reconcile these non-GAAP financial measures to the comparable GAAP financial measures.

Adjusted net income from continuing operations for the first quarter of 2015 was $18.8 million, or $0.37 per diluted share. Included in these adjusted amounts are pre-tax expenses of $4.9 million, or $0.06 per share, related to the Company’s EchoPark^® operations.

On a GAAP basis, net income from continuing operations and related diluted earnings per share for the first quarter of 2016 were $14.5 million and $0.31 per share, respectively, compared to $14.4 million and $0.28 per diluted share, respectively, for the first quarter of 2015.

Jeff Dyke, Sonic’s EVP of Operations, stated, “We are pleased with our operating results during the quarter. Strong performances in the fixed operations and the F&I areas drove the overall increase in gross profit to record levels. We continued to see gross profit compression in new vehicles and expect this to continue until inventory supply corrects to more normalized levels. The used vehicle market continues to demonstrate its resiliency despite the compression related to new vehicles. Our EchoPark^® stores continue to grow and mature. The expansion in Denver is on schedule and we anticipate opening two additional stores in the second quarter of 2016 and another by the end of the year. We are also happy to announce we will be introducing the EchoPark^® brand to the Texas and Carolinas markets in 2017 where we have been actively accumulating property.”

B. Scott Smith, the Company’s Chief Executive Officer, noted, “Execution of our core strategies continued in the first quarter. Our commitment to return capital through dividends and share repurchases has rewarded our long-term stockholders. Subsequent to the end of the quarter, we repurchased an additional 363,000 shares for approximately $6.4 million. In addition to the real estate and construction activities related to EchoPark^®, we are aggressively replacing leased

properties with image-compliant facilities on owned land. We anticipate investing approximately $250 million in land and facilities in the current year funded by mortgages and cash generated through operations. These hard assets are the cornerstones of our long-term plan. We are maintaining our guidance of adjusted diluted earnings per share from continuing operations for 2016 to be between $2.07 and $2.17 per share.”

Dividend

Sonic’s Board of Directors approved a quarterly dividend of $0.05 per share payable in cash for stockholders of record on June 15, 2016. The dividend will be payable on July 15, 2016.

First Quarter Earnings Conference Call

Senior management will host a conference call today at 11:00 A.M. (Eastern) to discuss the quarter’s results. To access the live broadcast of the call over the Internet go to: www.sonicautomotive.com, then click on “Our Company,” then “Investor Relations,” then “Earnings Conference Calls.”

Presentation materials for the conference call can be accessed on the Company’s website at www.sonicautomotive.com by clicking on the “Investor Relations” tab under “Our Company” and choosing “Webcasts & Presentations.”

The conference call will also be available live by dialing in 10 minutes prior to the start of the call at:

Domestic: 1.877.450.3867

International: 1.706.643.0958

Conference ID: 81083014

A conference call replay will be available one hour following the call for seven days and can be accessed by calling:

Domestic: 1.855.859.2056

International: 1.404.537.3406

Conference ID: 81083014

About Sonic Automotive

Sonic Automotive, Inc., a Fortune 500 company based in Charlotte, N.C., is one of the nation’s largest automotive retailers. Sonic can be reached on the web at www.sonicautomotive.com.

Included herein are forward-looking statements, including statements with respect to anticipated expansion of our EchoPark^® store initiatives and the anticipated amount of investments related to capital expenditures. There are many factors that affect management’s views about future events and trends of the Company’s business. These factors involve risk and uncertainties that could cause actual results or trends to differ materially from management’s views, including without limitation, economic conditions in the markets in which we operate, new and used vehicle industry sales volume, the success of our operational strategies, the rate and timing of overall economic recovery or decline, and the risk factors described in the Company’s annual report on

Form 10-K for the year ending December 31, 2015. The Company does not undertake any obligation to update forward-looking information.

###

Contact:	Heath Byrd, Chief Financial Officer (704) 566-2400
	C.G. Saffer, Vice President and Chief Accounting Officer (704) 566-2439

Sonic Automotive, Inc.

Results of Operations (Unaudited)

This release contains certain non-GAAP financial measures as defined under SEC rules, such as, but not limited to, adjusted income from continuing operations and related earnings per share data. The Company has reconciled these measures to the most directly comparable GAAP measures in the release. The Company believes that these non-GAAP financial measures improve the transparency of the Company’s disclosure by providing period-to-period comparability of the Company’s results from operations.

	Three Months Ended March 31,
	2016			2015
	(In thousands, except per share and unit data)
Revenues:
New retail vehicles	$	1,149,437		$	1,190,215
Fleet vehicles		15,133			12,108
Total new vehicles		1,164,570			1,202,323
Used vehicles		598,355			593,742
Wholesale vehicles		44,374			41,656
Total vehicles		1,807,299			1,837,721
Parts, service and collision repair		346,054			323,194
Finance, insurance and other, net		81,273			74,600
Total revenues		2,234,626			2,235,515
Gross profit		345,150			334,959
Selling, general and administrative expenses		(284,375	)		(270,862	)
Impairment charges		—			(6,192	)
Depreciation and amortization		(18,470	)		(16,409	)
Operating income (loss)		42,305			41,496
Other income (expense):
Interest expense, floor plan		(6,436	)		(4,778	)
Interest expense, other, net		(12,339	)		(13,219	)
Other income (expense), net		104			90
Total other income (expense)		(18,671	)		(17,907	)
Income (loss) from continuing operations before taxes		23,634			23,589
Provision for income taxes for continuing operations - benefit (expense)		(9,170	)		(9,200	)
Income (loss) from continuing operations		14,464			14,389
Income (loss) from discontinued operations		160			(422	)
Net income (loss)	$	14,624		$	13,967
Diluted earnings (loss) per common share:
Earnings (loss) per share from continuing operations	$	0.31		$	0.28
Earnings (loss) per share from discontinued operations		—			(0.01	)
Earnings (loss) per common share	$	0.31		$	0.27
Weighted average common shares outstanding		47,122			51,403
Gross Margin Data (Continuing Operations):
New retail vehicles		5.1	%		5.3	%
Fleet vehicles		0.2	%		(0.6	%)
Total new vehicles		5.0	%		5.3	%
Used vehicles		6.8	%		6.9	%
Wholesale vehicles		(2.4	%)		(0.5	%)
Parts, service and collision repair		48.0	%		48.4	%
Finance, insurance and other		100.0	%		100.0	%
Overall gross margin		15.4	%		15.0	%
SG&A Expenses (Continuing Operations):
Compensation	$	169,041		$	161,858
Advertising		15,347			15,332
Rent		18,720			18,254
Other		81,267			75,418
Total SG&A expenses	$	284,375		$	270,862
SG&A expenses as % of gross profit		82.4	%		80.9	%
Operating Margin %		1.9	%		1.9	%
Unit Data (Continuing Operations):
New retail units		30,156			31,334
Fleet units		449			355
Total new units		30,605			31,689
Used units		29,333			28,135
Wholesale units		8,423			7,777

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Per Share Data

	Three Months Ended March 31, 2016
			Income (Loss)					Income (Loss)
			From Continuing					From Discontinued
			Operations					Operations						Net Income (Loss)
	Weighted					Per					Per						Per
	Average					Share					Share						Share
	Shares		Amount			Amount		Amount			Amount			Amount			Amount
	(In thousands, except per share amounts)
Reported:
Earnings (loss) and shares		46,950	$	14,464				$	160					$	14,624
Effect of participating securities:
Non-vested restricted stock				(6	)				—						(6	)
Basic earnings (loss) and shares		46,950	$	14,458		$	0.31	$	160		$	—		$	14,618		$	0.31
Effect of dilutive securities:
Stock compensation plans		172
Diluted earnings (loss) and shares		47,122	$	14,458		$	0.31	$	160		$	—		$	14,618		$	0.31
Adjustments (net of tax):
Storm damage and other			$	3,698		$	0.08	$	(320	)	$	(0.01	)	$	3,378		$	0.07
Total adjustments			$	3,698		$	0.08	$	(320	)	$	(0.01	)	$	3,378		$	0.07
Adjusted:
Earnings (loss) and diluted earnings (loss) per share (1)			$	18,162		$	0.39	$	(160	)	$	(0.01	)	$	18,002		$	0.38
(1)    Net loss attributable to EchoPark® operations was $0.05 per fully diluted share in the three months ended March 31, 2016.
	Three Months Ended March 31, 2015
			Income (Loss)					Income (Loss)
			From Continuing					From Discontinued
			Operations					Operations						Net Income (Loss)
	Weighted					Per					Per						Per
	Average					Share					Share						Share
	Shares		Amount			Amount		Amount			Amount			Amount			Amount
	(In thousands, except per share amounts)
Reported:
Earnings (loss) and shares		50,854	$	14,389				$	(422	)				$	13,967
Effect of participating securities:
Non-vested restricted stock and stock units				(5	)				—						(5	)
Basic earnings (loss) and shares		50,854	$	14,384		$	0.28	$	(422	)	$	(0.01	)	$	13,962		$	0.27
Effect of dilutive securities:
Stock compensation plans		549
Diluted earnings (loss) and shares		51,403	$	14,384		$	0.28	$	(422	)	$	(0.01	)	$	13,962		$	0.27
Adjustments (net of tax):
Storm damage and other			$	634		$	0.02	$	—		$	—		$	634		$	0.02
Impairment charges				3,777			0.07		—			—			3,777			0.07
Total adjustments			$	4,411		$	0.09	$	—		$	—		$	4,411		$	0.09
Adjusted:
Earnings (loss) and diluted earnings (loss) per share (2)			$	18,800		$	0.37	$	(422	)	$	(0.01	)	$	18,378		$	0.36
(2)    Net loss attributable to EchoPark® operations was $0.06 per fully diluted share in the three months ended March 31, 2015.

Sonic Automotive, Inc.

Results of Operations (Unaudited)

New Vehicles

	Three Months Ended March 31,						Better / (Worse)
	2016			2015			Change			% Change
	(In thousands, except units and per unit data)
Reported:
Revenue	$	1,164,570		$	1,202,323		$	(37,753	)		(3.1	%)
Gross profit	$	58,424		$	63,350		$	(4,926	)		(7.8	%)
Unit sales		30,605			31,689			(1,084	)		(3.4	%)
Revenue per unit	$	38,052		$	37,941		$	111			0.3	%
Gross profit per unit	$	1,909		$	1,999		$	(90	)		(4.5	%)
Gross profit as a % of revenue		5.0	%		5.3	%		(30	) bps
	Three Months Ended March 31,						Better / (Worse)
	2016			2015			Change			% Change
	(In thousands, except units and per unit data)
Same Store:
Revenue	$	1,164,570		$	1,189,495		$	(24,925	)		(2.1	%)
Gross profit	$	58,375		$	62,498		$	(4,123	)		(6.6	%)
Unit sales		30,605			31,372			(767	)		(2.4	%)
Revenue per unit	$	38,052		$	37,916		$	136			0.4	%
Gross profit per unit	$	1,907		$	1,992		$	(85	)		(4.3	%)
Gross profit as a % of revenue		5.0	%		5.3	%		(30	) bps

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Used Vehicles

	Three Months Ended March 31,						Better / (Worse)
	2016			2015			Change			% Change
	(In thousands, except units and per unit data)
Reported:
Revenue	$	598,355		$	593,742		$	4,613			0.8	%
Gross profit	$	40,531		$	40,844		$	(313	)		(0.8	%)
Unit sales		29,333			28,135			1,198			4.3	%
Revenue per unit	$	20,399		$	21,103		$	(704	)		(3.3	%)
Gross profit per unit	$	1,382		$	1,452		$	(70	)		(4.8	%)
Gross profit as a % of revenue		6.8	%		6.9	%		(10	) bps
	Three Months Ended March 31,						Better / (Worse)
	2016			2015			Change			% Change
	(In thousands, except units and per unit data)
Same Store:
Revenue	$	598,355		$	584,987		$	13,368			2.3	%
Gross profit	$	40,690		$	41,008		$	(318	)		(0.8	%)
Unit sales		29,333			27,687			1,646			5.9	%
Revenue per unit	$	20,399		$	21,129		$	(730	)		(3.5	%)
Gross profit per unit	$	1,387		$	1,481		$	(94	)		(6.3	%)
Gross profit as a % of revenue		6.8	%		7.0	%		(20	) bps

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Wholesale Vehicles

	Three Months Ended March 31,						Better / (Worse)
	2016			2015			Change			% Change
	(In thousands, except units and per unit data)
Reported:
Revenue	$	44,374		$	41,656		$	2,718			6.5	%
Gross profit (loss)	$	(1,078	)	$	(210	)	$	(868	)		(413.3	%)
Unit sales		8,423			7,777			646			8.3	%
Revenue per unit	$	5,268		$	5,356		$	(88	)		(1.6	%)
Gross profit (loss) per unit	$	(128	)	$	(27	)	$	(101	)		(374.1	%)
Gross profit (loss) as a % of revenue		(2.4	%)		(0.5	%)		(190	) bps
	Three Months Ended March 31,						Better / (Worse)
	2016			2015			Change			% Change
	(In thousands, except units and per unit data)
Same Store:
Revenue	$	44,353		$	41,253		$	3,100			7.5	%
Gross profit (loss)	$	(1,076	)	$	(197	)	$	(879	)		(446.2	%)
Unit sales		8,418			7,688			730			9.5	%
Revenue per unit	$	5,269		$	5,366		$	(97	)		(1.8	%)
Gross profit (loss) per unit	$	(128	)	$	(26	)	$	(102	)		(392.3	%)
Gross profit (loss) as a % of revenue		(2.4	%)		(0.5	%)		(190	) bps

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Parts, Service and Collision Repair (“Fixed Operations”)

	Three Months Ended March 31,						Better / (Worse)
	2016			2015			Change			% Change
	(In thousands)
Reported:
Revenue
Customer pay	$	147,394		$	137,623		$	9,771			7.1	%
Warranty		57,559			53,498			4,061			7.6	%
Wholesale parts		45,309			45,012			297			0.7	%
Internal, sublet and other		95,792			87,061			8,731			10.0	%
Total	$	346,054		$	323,194		$	22,860			7.1	%
Gross profit
Customer pay	$	80,358		$	75,678		$	4,680			6.2	%
Warranty		31,326			29,760			1,566			5.3	%
Wholesale parts		7,941			8,138			(197	)		(2.4	%)
Internal, sublet and other		46,375			42,799			3,576			8.4	%
Total	$	166,000		$	156,375		$	9,625			6.2	%
Gross profit as a % of revenue
Customer pay		54.5	%		55.0	%		(50	) bps
Warranty		54.4	%		55.6	%		(120	) bps
Wholesale parts		17.5	%		18.1	%		(60	) bps
Internal, sublet and other		48.4	%		49.2	%		(80	) bps
Total		48.0	%		48.4	%		(40	) bps

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Parts, Service and Collision Repair (“Fixed Operations”)

	Three Months Ended March 31,						Better / (Worse)
	2016			2015			Change			% Change
	(In thousands)
Same Store:
Revenue
Customer pay	$	147,394		$	134,636		$	12,758			9.5	%
Warranty		57,559			52,694			4,865			9.2	%
Wholesale parts		45,309			44,201			1,108			2.5	%
Internal, sublet and other		95,792			85,742			10,050			11.7	%
Total	$	346,054		$	317,273		$	28,781			9.1	%
Gross profit
Customer pay	$	80,358		$	74,050		$	6,308			8.5	%
Warranty		31,282			29,300			1,982			6.8	%
Wholesale parts		7,941			7,988			(47	)		(0.6	%)
Internal, sublet and other		46,068			42,165			3,903			9.3	%
Total	$	165,649		$	153,503		$	12,146			7.9	%
Gross profit as a % of revenue
Customer pay		54.5	%		55.0	%		(50	) bps
Warranty		54.3	%		55.6	%		(130	) bps
Wholesale parts		17.5	%		18.1	%		(60	) bps
Internal, sublet and other		48.1	%		49.2	%		(110	) bps
Total		47.9	%		48.4	%		(50	) bps

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Finance, Insurance and Other, Net (“F&I”)

	Three Months Ended March 31,				Better / (Worse)
	2016		2015		Change		% Change
	(In thousands, except per unit data)
Reported:
Revenue	$	81,273	$	74,600	$	6,673		8.9	%
Gross profit per retail unit (excludes fleet)	$	1,366	$	1,254	$	112		8.9	%
	Three Months Ended March 31,				Better / (Worse)
	2016		2015		Change		% Change
	(In thousands, except per unit data)
Same Store:
Revenue	$	80,852	$	73,689	$	7,163		9.7	%
Gross profit per retail unit (excludes fleet)	$	1,359	$	1,255	$	104		8.3	%

Sonic Automotive, Inc.

Results of Operations (Unaudited)

Selling, General and Administrative (“SG&A”) Expenses

	Three Months Ended March 31,						Better / (Worse)
	2016			2015			Change			% Change
	(In thousands)
Reported:
Compensation	$	169,041		$	161,858		$	(7,183	)		(4.4	%)
Advertising		15,347			15,332			(15	)		(0.1	%)
Rent		18,720			18,254			(466	)		(2.6	%)
Other		81,267			75,418			(5,849	)		(7.8	%)
Total	$	284,375		$	270,862		$	(13,513	)		(5.0	%)
Total pre-tax adjustments		(6,042	)		(1,051	)		4,991			NM
Adjusted SG&A	$	278,333		$	269,811			(8,522	)		(3.2	%)
SG&A expenses as a % of gross profit
Compensation		49.0	%		48.3	%		(70	) bps
Advertising		4.4	%		4.6	%		20	bps
Rent		5.4	%		5.4	%		0	bps
Other		23.6	%		22.6	%		(100	) bps
Total		82.4	%		80.9	%		(150	) bps
Total pre-tax adjustments		(1.8	%)		(0.3	%)		150	bps
Adjusted SG&A as a % of gross profit		80.6	%		80.6	%		0	bps
NM = Not meaningful

EX-99.2

Q1 2016 Investor Presentation April 26, 2016 Exhibit 99.2

FORWARD-LOOKING STATEMENTS This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events, are not historical facts and are based on our current expectations and assumptions regarding our business, the economy and other future conditions. These statements can generally be identified by lead-in words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “foresee”, “may” ,”will” and other similar words. Statements that describe our Company’s objectives, plans or goals are also forward-looking statements. Examples of such forward-looking information we may be discussing in this presentation include, without limitation, anticipated 2016 industry new vehicle sales volume, the implementation of growth and operating strategies, including acquisitions of dealerships and properties, the development of open points and stand-alone pre-owned stores, the return of capital to shareholders, anticipated future success and impacts from the implementation of our strategic initiatives and earnings per share expectations. You are cautioned that these forward-looking statements are not guarantees of future performance, involve risks and uncertainties and actual results may differ materially from those projected in the forward-looking statements as a result of various factors. These risks and uncertainties include, among other things, (a) economic conditions in the markets in which we operate, (b) the success of our operational strategies, (c) our relationships with the automobile manufacturers, (d) new and pre-owned vehicle sales volume, and (e) earnings expectations for the year ending December 31, 2016. These risks and uncertainties, as well as additional factors that could affect our forward-looking statements, are described in our Form 10-K for the year ended December 31, 2015. These forward-looking statements, risks, uncertainties and additional factors speak only as of the date of this presentation. We undertake no obligation to update any such statements.

CONTENT STRATEGIC FOCUS FINANCIAL REVIEW OPERATIONS REVIEW SUMMARY & OUTLOOK

STRATEGIC FOCUS Growth EchoPark® One Sonic-One Experience Acquisitions & Open Points Own Our Properties Return Capital to Shareholders Share Repurchases Dividends

STRATEGIC FOCUS ONE SONIC-ONE EXPERIENCE (OSOE) Goals 1 Associate, 1 Price, 1 Hour Improve Transparency; Increase Trust Operational Efficiencies Grow Market Share Feed Fixed Operations Technology Being Introduced into Additional Markets (Charlotte was Pilot) CRM, Desking & Appraisal

STRATEGIC FOCUS EchoPark® Three Locations Open In Denver Thornton Hub Centennial Highlands Ranch Locations to Open in Denver Market in First Half of 2016 Dakota Ridge Stapleton One Additional Denver Market Locations by End of 2016 Acquiring Property in the Texas and Carolinas Markets Expect openings in 2017

STRATEGIC FOCUS ACQUISITIONS & OPEN POINTS Open Points Mercedes Benz in Dallas Market Operational in 2016 Audi in Pensacola Market Operational in 2016 Nissan in TN Market Operational in late 2016 / early 2017 Exploring Acquisition and Open Point Opportunities in Other Markets

STRATEGIC FOCUS OWN OUR PROPERTIES % of Properties Owned

Acquired 7.5% of OS in Q1 New Share Count = 46.2M Down from High of 53.2M (Dec 2012) Q1 Accretion = 7% STRATEGIC FOCUS RETURN CAPITAL TO SHAREHOLDERS (amounts in thousands, except per share data) Shares $/Share $ Availability Q1 Activity 4,102 $18.14 $74,414 $70,589 Q2 Activity 363 $17.62 $6,398 $64,191 YTD 4,465 $18.098992161254198 $80,812

OUTSTANDING SHARE COUNT (in millions) Note – Balances are amounts outstanding at the end of the applicable period. These amounts exclude the effect of share dilution from convertible notes and equity grants outstanding. STRATEGIC FOCUS RETURN CAPITAL TO SHAREHOLDERS

Q1 2016 FINANCIAL REVIEW

Q1 2016 FINANCIAL REVIEW FRANCHISED SEGMENT

FRANCHISED SEGMENT Q1 2016 RESULTS – Q1 2016 and Q1 2015 are adjusted – See appendix for reconciliation to GAAP amounts Note – Continuing operations includes results of sold stores after March 31, 2014. B/(W) than Q1 2015 (1) (amounts in millions, except per share data) Q1 2016 (1) $ % Revenue $2,210.5855703400002 $-9.2448161800000825 -0.416464980214% Gross Profit $341.90277076999695 $8.7625259999930272 2.630281431786% SG&A as % of Gross 0.79737792888364267 -50 bps Operating Profit $51.581837113842703 $-1.9487110761553923 -3.64037197833% Interest & Other $-18.3298168 $-0.53997397999999885 -3.352937092448% Pretax $33.252020313842095 $-2.4886850561561005 -6.96316715183% Diluted EPS $0.44 $0.01 2.3% Diluted EPS Keyed $0.44 $0.01 2.3% 2.3255813953488372E-2

Q1 2016 FINANCIAL REVIEW ECHOPARK® SEGMENT

NM – Not Meaningful ECHOPARK® SEGMENT Q1 2016 RESULTS – Q1 2015 is adjusted – See appendix for reconciliation to GAAP amounts B/(W) than Q1 2015 (1) (amounts in millions, except per share, unit and per unit data) Q1 2016 $ % Revenue $24.040798879999997 $8.3561191099999998 NM Gross Profit $3.2473007699999998 $1.4282120599999999 NM Operating Profit $-3.2347051800000002 $1.5568416899999997 NM Interest & Other $-0.34109946000000002 $-0.22344724000000002 NM Pretax $-3.5758046400000003 $1.3333944499999997 0.2716114025027247 Diluted EPS $-0.05 $0.01 0.16700000000000001 Retail Units 941 281 0.42575757575757578 GPU $1,390.4525079702444 $5.1868564550929932 .3744304531% F&I ($/unit) $1,368.5311264612114 $480.43644464302963 0.5409743515853962 Diluted EPS Keyed $-0.05 $0.01 0.16700000000000001 0.16666666666666669

Q1 2016 FINANCIAL REVIEW TOTAL ENTERPRISE

– Q1 2016 and Q1 2015 are adjusted – See appendix for reconciliation to GAAP amounts Note – Continuing operations includes results of sold stores after March 31, 2014. CONSOLIDATED Q1 2016 RESULTS Depreciation Up = $2.1M New Floorplan Up = $1.7M B/(W) than Q1 2015 (1) (amounts in millions, except per share data) Q1 2016 (1) $ % Revenue $2,234.62636922001 $-0.88869706998998299 .03975357104% Gross Profit $345.15007153999801 $10.190738059994008 3.423806836845% SG&A as % of Gross 0.80641113760830896 0 bps Operating Profit $48.347131933842803 $-0.39186938615530381 -0.8040160355% Interest & Other $-18.670916260000002 $-0.76342122000000379 -4.263137967062% Continuing Ops: Profit (after tax) $18.1618442238425 $-0.64537526615519891 -3.431529400178% Diluted EPS $0.39 $0.02 5.4% Diluted EPS Keyed $0.39 $0.02 5.4% 5.4054054054054057E-2

Q1 2016 REVENUE & GROSS PROFIT Strong Growth in Fixed and F&I Offset by Reduction in New Units and Lower GPU B/(W) than Q1 2015 (amounts in millions, except per share data) Q1 2016 $ % New Retail Revenue $1,149.4367360000001 $-40.77852289000014 -3.426146874308% Used Retail Revenue $598.35451798999998 $4.6125118499989624 .776854560112% Fixed Operations Revenue $346.05449943000002 $22.860565100000066 7.733273962556% F&I Revenue $81.272952369999899 $6.6734262699997924 8.945668449762% Total Revenue $2,234.62636922001 $-0.88869706998998299 .03975357104% New Retail Gross $58.387575059998802 $-5.0297534000000956 -7.931197232902% Used Retail Gross $40.530749749999799 $-0.31369647000049733 -0.768027232664% Fixed Operations Gross $166.00042727000002 $9.625684160000004 6.155523563821% F&I Gross $81.272952369999899 $6.6734262699997924 8.945668449762% Total Gross $345.15007153999801 $10.190738059994008 3.423806836845%

Q1 2016 ADJUSTED SG&A TO GROSS 80.6% 80.6% – Q1 2016 and Q1 2015 are adjusted – See appendix for reconciliation to GAAP amounts (1) (1)

Q1 2016 ADJUSTED SG&A TO GROSS – Q1 2016 and Q1 2015 are adjusted – See appendix for reconciliation to GAAP amounts (1) (1)

INTEREST EXPENSE Q1 2016 Floor plan Increase Due to Higher Inventory Balances B/(W) than Q1 2015 (amounts in millions, except per share data) Q1 2016 $ % Floor Plan Interest Expense $6.43546101 $-1.6574960899999995 -0.3469041982836491 Interest Expense, Other $12.339002719999998 $0.8804708600000013 6.660407879873% Total Interest Expense $18.774463730000001 $-0.77702522999999923 -4.31742122636%

2016 CAPEX (amounts in millions) Q1 2016 Estimated 2016 Real Estate & Facility Related $35.299999999999997 $251.9 All Other Cap Ex 6.1 32.299999999999997 Subtotal $41.4 $284.2 Less: Mortgage Funding -33.700000000000003 -,167.9 Total Cash Used – Cap Ex $7.6999999999999957 $116.29999999999998

DEBT COVENANTS Compliant with all Covenants Covenant Actual Q1 2016 Liquidity Ratio >= 1.05 1.1599999999999999 Fixed Charge Coverage Ratio >= 1.20 1.76 Total Lease Adjusted Leverage Ratio <= 5.50 4.21

OPERATIONS REVIEW

NEW VEHICLE RETAIL SAME STORE Inventory levels continue to add pressure to PUR - market continues to be hyper competitive in particular with BMW Q1 2016 Q1 2015 B/(W) Retail Volume 30,156 31,017 -2.7758970887% Selling Price $38,116.362186297913 $37,959.413283683141 .4134650381% Gross Margin % 5.0999999999999997 5.3% -20 bps GPU $1,934.5646577795067 $2,017.1503214366026 $-82.585663657095893 Gross Profit $58.338731819998799 $62.565951519999103 -6.7564219792% SAAR (mllion) 17.100000000000001 16.600000000000001 3.1204819277% SAAR - Keyed 17.100000000000001 16.600000000000001 3.1%

NEW VEHICLE SAAR 1st QTR Up 3.0% Q1 2016 - 17.1M Full Year 2015 – 17.4M Full Year 2014 – 16.4M

NEW VEHICLE SAAR – RETAIL ONLY

RETAIL NEW VEHICLE – GROSS & UNIT TREND Continuing Operations

NEW VEHICLE – GROSS PER UNIT Continuing Operations

VEHICLE DAYS SUPPLY New – 74 days adjusted for 1,000 stop sell units Used – 33 days adjusted for 1,637 stop sell units

USED VEHICLE RETAIL SAME STORE Volume Increases Offset by Lower GPU Record Q1 Units Q1 2016 Q1 2015 B/(W) Retail Volume 29,333 27,687 5.9450283527% GPU $1,387.1903869362086 $1,481.1205475493987 $-93.930160613190083 Gross Profit $40.690455619999803 $41.0077846000002 $-0.31732898000039861 Used to New 0.97 to 1.00 0.89 to 1.00 8.9887640449% Vehicles/Store/Mth (105 stores) 93 88 5 Vehicles per store/month (Keyed) $0 $0 0.0%

* - Used Related Gross = (Used Gross + F&I + Reconditioning) ($’s in millions) USED VEHICLE – GROSS & UNIT TREND Continuing Operations Record Q1 Gross

Higher PUR accounted for $6.1M of the overall $7.2M increase in F&I Gross Gross (millions) $ 73.7 $ 80.9 F&I SAME STORE Total Gross Up 9.7%

F&I – GROSS & PUR TREND Continuing Operations Q1 Record GPU and Gross

FIXED OPS SAME STORE Record Q1 Gross Q1 2016 Q1 2015 B/(W) Revenue $346.05449943000002 $317.27259285000099 9.7166494321% Gross Profit $165.64933493999999 $153.50298598000001 7.9127769942% SAAR - Keyed $0 $0 0.0%

FIXED OPS SAME STORE – CUSTOMER PAY We continue to perform better in CP – the moves we have made in our shops and the increased level of technicians is paying off

($’s in millions) FIXED OPERATIONS – GROSS TREND Continuing Operations

EchoPark® entering 2 new markets – Texas & Carolinas Returned capital through stock purchases and dividend Continued to grow the top-line revenue and gross New vehicle GPU pressure continues – industry supply continues to be higher than historic levels Used environment is stable Fixed operations and F&I continue to grow and show strength Maintain 2016 Adjusted Continued Ops EPS Guidance: New Car Franchise Business $2.28 - $2.40 Effect of EchoPark® ($0.21) – ($0.23) Total Sonic $2.07 - $2.17 SUMMARY

APPENDIX

ADJUSTMENTS BRIDGE Q1 2016 (amounts in millions, except per share data) Q1 2016 Q1 2015 Notes 2016 Notes 2015 Pre-Tax EPS Pre-Tax EPS Unadjusted $0.31 $0.28000000000000003 Storm Damage 6.1 0.08 0 0 TX Hail Impairment 0 0 6.2 7.0000000000000007E-2 Website Other 0 0 1 0.02 Severance & Loss on Disposal Adjusted EPS $0.39 $0.37

NON-GAAP RECONCILIATIONS

NON-GAAP RECONCILIATIONS

NON-GAAP RECONCILIATIONS ..

NON-GAAP RECONCILIATIONS

NON-GAAP RECONCILIATIONS