® Sonic Automotive – Investor Presentation July 2022 Updated July 28, 2022
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 “may,” “will,” “should,” “could,” “believe,” “expect,” “estimate,” “anticipate,” “intend,” “plan,” “project,” “foresee” and other similar words or phrases. 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, the effects of COVID-19 and new variants of the virus on operations, our anticipated future new vehicle unit sales volume, revenues and profitability, our anticipated future used vehicle unit sales volume, revenues and profitability, future levels of consumer demand for new and used vehicles, our anticipated future parts, service and collision repair (“Fixed Operations”) gross profit, our anticipated expense reductions, long-term annual revenue and profitability targets, anticipated future growth capital expenditures, profitability and pricing expectations in our EchoPark Segment, EchoPark’s omnichannel strategy, anticipated future EchoPark population coverage, anticipated future EchoPark revenue and unit sales volume, anticipated future performance and growth of our Franchised Dealerships Segment, anticipated liquidity positions, anticipated industry new vehicle sales volume, the implementation of growth and operating strategies, including acquisitions of dealerships and properties, anticipated future acquisition synergies, the integration of the RFJ Auto acquisition, the return of capital to stockholders, 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, without limitation, economic conditions in the markets in which we operate, supply chain disruptions and manufacturing delays, labor shortages, the impacts of inflation and increases in interest rates, new and used vehicle industry sales volume, the success of our operational strategies, the rate and timing of overall economic expansion or contraction, and the risk factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and other reports and information filed with the United States Securities and Exchange Commission (the “SEC”). 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, except as required under federal securities laws and the rules and regulations of the SEC.
3 Company Overview
4 ® Sonic Automotive: Who We Are QUICK FACTS (NYSE: SAH) a Fortune 500 Company and One of the Nation’s Largest Automotive Retailers 161 25+ 23 17 $12.4 Billion $1.9 Billion 103K New Vehicles Sold 183K Total Revenues Automotive Brands Locations Used Vehicles Sold Collision Centers States Gross Profit Note: Location Counts As Of July 28, 2022. Revenues, Gross Profit, New & Used Vehicles Sold are for FY 2021 Our Core Franchised Dealerships Segment is a Full-Service Automotive Retail Business With Strategic Growth Levers Across Multiple Business Lines with a Diversified Brand Portfolio Our High Growth EchoPark Segment Offers a Unique Approach to Pre-Owned Vehicle and F&I Sales Below-Market Pricing with a No Haggle Purchase Experience Drives Industry-Leading Used Vehicle Volume Throughput
5 Investment Highlights Multiple Growth And Profit Drivers For Franchised Dealerships Segment Unique, High Return EchoPark Business Model Broad Revenue Stream Diversification Complementary Relationship – Sonic Franchised Dealerships And EchoPark Disciplined Capital Allocation To Accelerate EchoPark Growth Focused On Expense Control And Maintaining Strong Balance Sheet
6 Revenue Composition BY GEOGRAPHY TX 25% CA 21% CO 8% ID 7% TN 6% FL 5% AL 5% IN 5% NC 4% GA 4% VA 2% MD 2% All Others 6% Broad Geographic Distribution Geographic Footprint, Revenue Streams and Brand Mix Offer Attractive Diversification Across the Automotive Retail Space Note: Percentages are Percent of Total Revenue for Six Months Ended June 30, 2022
7 Revenue Composition – Diversified Revenue Streams Note: Percentages are Percent of Total for the Six Months Ended June 30, 2022 5% 29% 11% 33% 43% 8% 41% 30% Revenue Gross Profit New Vehicle Used Vehicle (Including Wholesale) Parts, Service & Collision Repair ("Fixed Operations") Finance & Insurance ("F&I") Brand Distribution Note: Percentages are Percent of Total Revenue for the Six Months Ended June 30, 2022 Brand % of Revenue Franchise Brand % of Revenue BMW 19% Mercedes 10% Audi 5% Lexus 4% Porsche 3% Land Rover 2% Cadillac 2% Volvo 1% Other Luxury (1) 2% Honda 8% Toyota 7% Volkswagen 1% Hyundai 1% Nissan 1% Other Import (2) <1% EchoPark 17% Non-Franchise 17% Ford 8% Chrysler Dodge Jeep RAM 6% Chevrolet GMC Buick 3% Luxury 48% 18%Import Domestic 17% (1) Includes Alfa Romeo, Infiniti, Jaguar, Maserati and MINI (2) Includes Mazda and Subaru Business Line Mix Majority Of Gross Profit Driven By Stable Business Lines
8 ® EchoPark Automotive – A Unique Growth Story Growing Nationwide Distribution Network Unique, High Return Business Model Focus On High Quality Pre-Owned Vehicles, In-Store or Online Expect To Reach 90% Of U.S. Population By 2025 Priced Up To $3,000 Below Market With Simplified, Easy Purchase Experience Focus On Pre-Owned Market – 2.5x Larger & More Stable Than New Vehicle Market The New Car Alternative™ Price. Quality. Experience. Note: Expected U.S. population reach is a projection, actual results may differ. See “Forward-Looking Statements.”
9 Franchised Dealerships ® ® Complementary Relationship Between Segments • Thrives When New Vehicle Industry Is Healthy, Particularly Where Luxury Brands Are Strong • Diversified Revenue Streams • Relatively Low Fixed Costs And Multiple Strategic Levers • Further Growth Opportunities: Parts And Service Business Used Vehicles F&I Penetration Expense Leverage Strategic Acquisitions • Strong Secular Growth Phase Due To: Focus On Highly Fragmented Pre-Owned Vehicle Market Below-Market Pricing Strategy Simplified, Easy Purchase Experience • In A Declining Pre-Owned Vehicle Price Environment, EchoPark Should: Benefit From Rapid Inventory Turns, Creating An Even Greater Pricing Advantage Over Competitors To Drive Additional Unit Sales Volume
10 Strategic Direction • Continued Growth Opportunity In Parts & Service, F&I Per Unit • Ongoing Profitability Enhancement Through SG&A Expense Control, Inventory Management • Pursue Strategic Acquisition Opportunities As Market Evolves • Utilize Existing Infrastructure To Support Omnichannel Distribution Network • Early-Stage Strong Secular Growth Phase • Targeting 50% U.S. Population Coverage By End Of 2022, Expect 90% Coverage By 2025 • Growing eCommerce Presence Offers Scalable Incremental Reach • Addressable Market Opportunity Of 2 Million Vehicles Annually At Maturity • Invest In Proprietary Digital Retail Platform To Accelerate Growth • Focus On Guest Experience To Drive Market Share Gains • Balanced Capital Allocation Strategy Prioritizes Highest Return on Investment • Return Of Capital To Shareholders Via Dividend And Share Repurchase Program ($633 Million In Remaining Repurchase Authorization) Franchised Dealerships EchoParkStrategic Drivers Note: Profitability, unit sales volume and population coverage projections are estimates of future results. Actual results may differ. See “Forward-Looking Statements.”
11 Strong Balance Sheet And Liquidity June 30, 2022 December 31, 2021 (In Millions) Cash and cash equivalents 327.1$ 299.4$ Availability under the 2021 Revolving Credit Facility 274.9 281.4 Availability under the 2019 Mortgage Facility 27.7 22.2 Floor plan deposit balance 125.5 99.8 Total available liquidity resources 755.2$ 702.8$ Covenant Requirement* June 30, 2022 December 31, 2021 Liquidity ratio >= 1.05 1.27 1.26 Fixed charge coverage ratio >= 1.20 2.62 2.69 Total lease adjusted leverage ratio <= 5.75 2.17 2.46 Net debt to Adjusted EBITDA ratio(1) 1.52 1.80 * As Defined In The 2021 Revolving Credit Facility and 2019 Mortgage Facility (1) Refer To Appendix For Calculation And Reconciliation of Adjusted EBITDA (A Non-GAAP Measure) and Net Debt To Adjusted EBITDA Ratio (A Non-GAAP Measure) $53M Increase in Cash And Deposits Current Leverage Ratios Are Within Internal Target Range
12 EchoPark
13 EchoPark – Brand Promise Up To 40% Below New Vehicle Price Up To $3,000 Below Used Vehicle Market Price High Quality Pre-Owned Vehicles With Available Warranty Transparent Guest-Centric Experience New Car Feel Without The New Car Price Complete Purchase In Under An Hour Free CARFAX Report With Every Vehicle Buy & Sell Your Way – On-Site Or Online P r i c e . Q u a l i t y. E x p e r i e n c e . L o w C o s t O m n i c h a n n e l M o d e l
14 EchoPark – Developing Nationwide Distribution Network Approaching 50% Population Coverage To Date Target 90% Population Coverage By 2025 Note: Future locations and U.S. population coverage are based on projections. Actual results may differ. See “Forward-Looking Statements.” Existing Delivery Center Future Delivery Center Coverage Area Existing Retail Hub Future Market Opportunities
15 EchoPark – Addressable Market Opportunity * Share Of Vehicles That Fit 1-4-Year-Old Model In Existing EchoPark Markets Target 90% Population Coverage By 2025 With Growing Nationwide Distribution Network Target 10% Market Share Already Achieving This Share* In Most Mature Market Priced Up to $3,000 Below Market Price Competes On Price vs. Older Vehicles, Consumer Can Buy Newer Vehicle For Same Price Pricing Up To 40% Below New Converts Prospective New Car Buyers 2 MILLION Opportunity 15+ MILLION 1–4-Year-Old Vehicles 6+ MILLION 5–6-Year- Old Vehicles 13+ MILLION New Vehicles 2.1% Q2 2022 Average Market Share* (3.0% Excluding New Markets) Most Mature Market Had 11.3% Share* In Q2 2022 Annual Retail Vehicle Sales Volume
16 EchoPark – Delivery Center Model Existing Retail Hub Example Delivery Center Market Coverage Opportunity Delivery Center Model • Utilize Nearby Retail Hub For Inventory Storage And Reconditioning (Asset Light Expansion) • Advertise Inventory Online In Surrounding Markets • Drive Incremental eCommerce Sales In New Markets • Inspect & Buy Vehicles From Guests After Online Appraisal And Firm Purchase Offer • Arrange Vehicle Transport To Delivery Center • Guest Picks Up Vehicle At EchoPark Delivery Center Nearest Their Home (i.e. Next-To-Last-Mile Delivery) Strategic Advantages • Accelerates Entry Into New Markets With Minimal Capital Expenditures Or Overhead Costs • Same Guest-Centric Purchase Experience And Convenience • Blend Of Brick And Mortar And eCommerce Distribution Network Creates Operating Leverage Delivery Center Markets • Expect To Support 3 To 4 Delivery Centers Per Retail Hub At Maturity • Target Adjacent Secondary Markets Or Large Metro Markets Where Traditional Dealership Real Estate Is Unavailable Or Cost Prohibitive
17 EchoPark – Industry Headwinds & Action Plan Industry Headwinds • Supply Chain Disruption Continues To Suppress New Vehicle Production And Inventory Levels, Increasing Demand For Used Vehicles At Auction • Rental Car Companies Cannot Source Sufficient New Vehicles Directly, Turned To Used Vehicle Auction Market To Supply Their Fleet, Driving Used Vehicle Prices To All-Time Highs • Used Price As A Percentage Of New Price At Nearly 70% (Typically In 55-60% Range) Negatively Impacts Affordability • July To Date, 3-Year Old Vehicle Manheim Prices Decreased 3.0%, Auction “No-Sells” Climbed To ~55% Of Listings In July (Indicator Of Wholesale Demand Slowing, Risk Of Price Declines In Near Term) EchoPark Action Plan • Expanding Inventory To Include 5+ Year Old Vehicles At Lower Inventory Acquisition Cost And Lower Retail Selling Price, Expanding Customer Segments While Benefiting Consumer Affordability And Gross Profit Per Unit (“GPU”) • Implemented Marketing Strategy To Source More Vehicles From Non-Auction Sources (Historically Less Than 10% Of Inventory) • Piloting Enhanced Guest Experience In Select Delivery Center Markets • Launched New EchoPark.com To Modernize eCommerce Offering And Drive Improved Sales Efficiency And Volume Throughput • EchoPark Brand Launch – Increase Consumer Awareness And Advertising Reach Beyond Being The Low Price Leader • Targeted Expense Reductions At EchoPark Are Expected To Drive Profitability Improvement In The Second Half Of 2022 EchoPark Initial Results • Improved Non-Auction Sourcing Mix From 7% In Q2 2021 To 25% Of Sales In Q2 2022 – Continues To Improve In Q3 To Date • Sourced 57% Of Inventory From Non-Auction Sources In July To Date • Older Model Year Cohort Vehicles (5+ Years) Represented 9% of Q2 2022 EchoPark Unit Sales Volume, Average 30% Lower Selling Price And Generate $2,200 More In Total GPU Compared To 1-4-Year Old Vehicles • New EchoPark.com eCommerce Results For Q2 2022 (Launched To 100% Of Web Traffic In June) • Accounted For 19% Of EchoPark Retail Unit Volume In Q2 2022, With 7% Of EchoPark Volume Sold End-to-End Online • 69% Of Units Sold Were Shipped Out Of Market • Online F&I Attachment Continues To Exceed Expectations, Averaging $2,250 Per Unit • Continued Focus On Maintaining Highest Reputation Scores In The Pre-Owned Competitive Segment
18 EchoPark – Initial Results In Houston Market $(1,500) $(1,300) $(1,100) $(900) $(700) $(500) $(300) ($ In T ho us an ds ) Used Retail Unit Volume Pre-Tax Profit (Loss) Beginning In Mid-April, Houston Market Piloted Expansion Of Inventory To Include 5+ Year Old Vehicles, Benefiting Non-Auction Sourcing Mix, Volume And Profitability 11% 46% % Non-Auction Sourced Inventory 13% Of Vehicle Sales 5+ Years Old 32% Of Vehicle Sales 5+ Years Old1% Of Vehicle Sales 5+ Years Old
19 EchoPark – Growth Path 212 660 881 920 764 941 1,136 1,585 1,685 1,673 2,049 2,400 4,496 5,518 7,459 7,698 8,762 11,051 12,587 13,206 12,676 13,986 13,207 15,127 14,841 19,670 21,261 21,255 15,649 14,995 16,608 $- $100 $200 $300 $400 $500 $600 $700 (In M illi on s) Quarterly Used Retail Units Quarterly Revenue Lower Unit Volume Beginning Q4 2021 A Result Of Strategic Price Adjustments To Manage Inventory Levels And Mitigate Operating Losses Amid Ongoing Challenges In Used Vehicle Price Environment
20 EchoPark – Adjusted EBITDA Trend ($2.8) ($1.1) ($3.4) ($2.2) ($3.0) ($2.1) $5.0 $4.8 $6.4 $5.3 $5.2 $5.6 $3.1 ($2.9) $6.2 ($9.4) ($28.5) ($14.6) ($29.0) ($27.9) $6.1 $6.2 $6.8 $4.8 $(0.3) $6.7 $(4.0) $(11.7) $(6.1) $(17.9)$(18.2) $(30) $(25) $(20) $(15) $(10) $(5) $- $5 $10 Adjusted EBITDA Less Impact of New Stores (In M illi on s) Current Headcount And SG&A Structure Is Based On Higher Unit Sales Volume Projections Expected Once Transitory Used Pricing Environment Normalizes Refer To Appendix For Calculation And Reconciliation of Adjusted EBITDA (A Non-GAAP Measure) Adjusted EBITDA by Month Apr 2022 May 2022 Jun 2022 Q2 2022 Total EchoPark $ (8.8) $(10.8) $ (8.3) $ (27.9) Impact of Stores Open <12 Months $ (3.2) $ (3.3) $ (3.2) $ (9.7) Net of New Store Impact $ (5.6) $ (7.5) $ (5.1) $ (18.2) Used Retail Unit Volume 5,533 5,553 5,522 16,608
21 Franchised Dealerships
22 New & Used Vehicle Sales Parts & Service (P&S) Finance & Insurance (F&I) ® Franchised Dealerships Franchised Dealerships111 Brands, Luxury Weighted25+ Diversified Revenue Streams • New & Used Vehicle Sales • Parts Service (P S) • Finance & Insurance (F&I) Collision Repair Centers17 18 States Stable Business With Organic And Acquisition Growth Opportunities Resilient And Flexible Business Model Through Economic Cycles
23 Franchised Dealerships – Geographic Footprint Diversified Geographic Market Platform 111 Stores, 25+ Brands, 17 Collision Repair Centers
24 Franchised Dealerships – Strategic Growth Levers Mature Cash Flows + Multiple Growth Drivers Pursue Strategic Acquisitions Opportunities Grow Parts and Service Retention Maximize F&I Penetration High Used Vehicle Volume Throughput Data-Driven Inventory Management Apply EchoPark Learnings Develop Omnichannel Platform SG&A Expense Discipline Realize Synergies From Acquisitions
25 Omnichannel Strategy
26 Full Omnichannel Infrastructure Guest Experience Managers Centralized Appraisals, Inventory Sourcing, Pricing Centralized Call Support Centralized F&I Digital Interface People Proprietary Technology Centralized Marketing Develop & Launch eCommerce Platform B u y & S e l l Yo u r Wa y Proprietary Ability to Buy a Car A to Z Online or Any Step In Between Utilize SIMS, Python Analytics, Robotic Process Automation, Hyper-Intelligence Technology ON-SITE ONLINE Se am le ss G ue st E xp er ie nc e
27 Buy & Sell Your Way • Complete A Traditional Vehicle Purchase Experience With A Modern, Technology- Enabled Approach • Can Be Completed In Under An Hour • Research Online, Utilize Chat, Text, Phone, Zoom To Reduce In-Person Process • Review And Select Insurance Products And Financing Options • Includes Online Trade-In Appraisal And Firm Purchase Offer • Complete A Full eCommerce Transaction In Minutes • Conveniently Test Drive And Finalize Purchase At Franchised Dealership, EchoPark Retail Hub Or EchoPark Delivery Center Buy & Sell Your Way Start Online, Finish On-Site Or Buy Completely Online Buy On-Site • Our Blend Of Brick And Mortar And eCommerce Strategies Allows Guests To Choose Their Preferred Buying Approach • A Flexible, Guest- Centric Experience With Options • Will Be Seamless To The Guest, Regardless Of Which Path They Choose Represents 19% Of Q2 2022 EchoPark Unit Sales Volume
28 New EchoPark.com Results to Date Rolled Out To 100% Of National Web Traffic In June 2022 Conversion Rate 30% Higher Compared To Old Website F&I of $2,250 Per Unit Exceeding Projections For End-To-End Online F&I Product Sales Nearly 70% Of Vehicles Sold Out Of Market, Driving Incremental Reach Technical Site Improvements – Bounce Rate 91% Better, Time On Site 33% Better, Pages Per Session 32% Better Than Old Website
29 Appendix
30 Non-GAAP Reconciliation – Segment Income – QTD Franchised Dealerships Segment EchoPark Segment Consolidated (In millions, except unit data) Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021 Revenues 2,987.2$ 2,756.6$ 665.6$ 595.6$ 3,652.8$ 3,352.2$ Gross profit 539.3$ 474.6$ 49.5$ 36.2$ 588.8$ 510.8$ SG&A expenses 327.5$ 275.7$ 75.3$ 44.9$ 402.8$ 320.6$ Adjusted segment income 166.5$ 165.4$ (34.9)$ (14.4)$ 131.6$ 151.0$ Long-term compensation charges (4.4) - - - (4.4) - Segment income 162.1$ 165.4$ (34.9)$ (14.4)$ 127.2$ 151.0$ Impairment charges - - - - - - Earnings (loss) from continuing operations before taxes 162.1$ 165.4$ (34.9)$ (14.4)$ 127.2$ 151.0$ Adjusted earnings (loss) from continuing operations before taxes 166.5$ 165.4$ (34.9)$ (14.4)$ 131.6$ 151.0$ Long-term compensation charges (4.4) - - - (4.4) - Earnings (loss) from continuing operations before taxes 162.1$ 165.4$ (34.9)$ (14.4)$ 127.2$ 151.0$ Adjusted net income (loss) from continuing operations 99.2$ 114.0$ Long-term compensation charges (before taxes) (4.4) - Tax effect of items of interest and non-recurring tax items - - Net income (loss) from continuing operations 94.8$ 114.0$ Retail new vehicle unit sales volume 24,342 30,243 85 14 24,427 30,257 Fleet new vehicle unit sales volume 4,638 245 - - 4,638 245 Retail used vehicle unit sales volume 28,156 28,550 16,608 21,261 44,764 49,811 Wholesale used vehicle unit sales volume 5,851 6,753 2,694 2,878 8,545 9,631 Note: Segment Income (Loss) Defined As Earnings (Loss) From Continuing Operations Before Taxes And Impairment Charges
31 Non-GAAP Reconciliation – Segment Income – YTD Franchised Dealerships Segment EchoPark Segment Consolidated (In millions, except unit data) YTD Q2 2022 YTD Q2 2021 YTD Q2 2022 YTD Q2 2021 YTD Q2 2022 YTD Q2 2021 Revenues 5,948.5$ 5,036.3$ 1,290.9$ 1,102.7$ 7,239.4$ 6,139.0$ Gross profit 1,066.3$ 829.5$ 93.8$ 82.2$ 1,160.1$ 911.7$ SG&A expenses 642.8$ 525.8$ 147.0$ 84.2$ 789.8$ 610.0$ Adjusted segment income 330.4$ 236.0$ (69.9)$ (12.4)$ 260.5$ 223.6$ Long-term compensation charges (4.4) - - - (4.4) - Segment income 326.0$ 236.0$ (69.9)$ (12.4)$ 256.1$ 223.6$ Impairment charges - - - - - - Earnings (loss) from continuing operations before taxes 326.0$ 236.0$ (69.9)$ (12.4)$ 256.1$ 223.6$ Adjusted earnings (loss) from continuing operations before taxes 330.4$ 236.0$ (69.9)$ (12.4)$ 260.5$ 223.6$ Long-term compensation charges (4.4) - - - (4.4) - Earnings (loss) from continuing operations before taxes 326.0$ 236.0$ (69.9)$ (12.4)$ 256.1$ 223.6$ Adjusted net income (loss) from continuing operations 196.5$ 167.7$ Long-term compensation charges (before taxes) (4.4) - Tax effect of items of interest and non-recurring tax items - - Net income (loss) from continuing operations 192.1$ 167.7$ Retail new vehicle unit sales volume 48,944 54,060 170 14 49,114 54,074 Fleet new vehicle unit sales volume 9,019 786 - - 9,019 786 Retail used vehicle unit sales volume 55,234 55,786 31,603 40,931 86,837 96,717 Wholesale used vehicle unit sales volume 12,623 13,585 6,343 5,739 18,966 19,324 Note: Segment Income (Loss) Defined As Earnings (Loss) From Continuing Operations Before Taxes And Impairment Charges
32 Non-GAAP Reconciliation – Segment Income – Prior FY Franchised Dealerships Segment EchoPark Segment Consolidated (In millions, except unit data) FY 2021 FY 2020 FY 2021 FY 2020 FY 2021 FY 2020 Revenues 10,051.1$ 8,348.0$ 2,345.3$ 1,419.0$ 12,396.4$ 9,767.0$ Gross profit 1,765.6$ 1,309.4$ 148.8$ 114.0$ 1,914.3$ 1,423.6$ SG&A expenses 1,076.9$ 933.7$ 197.8$ 94.9$ 1,274.7$ 1,028.7$ Adjusted segment income 547.1$ 227.2$ (65.5)$ (1.2)$ 481.6$ 226.0$ Acquisition and disposition-related gain (loss) (1.2) 4.0 - 5.2 (1.2) 9.2 Long-term compensation charges - - (6.5) - (6.5) - Loss on extinguishment of debt (15.6) - - - (15.6) - Segment income 530.3$ 231.2$ (72.0)$ 4.0$ 458.3$ 235.2$ Impairment charges - (270.0) (0.1) - (0.1) (270.0) Earnings (loss) from continuing operations before taxes 530.3$ (38.8)$ (72.1)$ 4.0$ 458.2$ (34.8)$ Adjusted earnings (loss) from continuing operations before taxes 547.1$ 226.4$ (65.6)$ (1.2)$ 481.5$ 225.2$ Acquisition and disposition-related gain (loss) (1.2) 4.0 - 5.2 (1.2) 9.2 Long-term compensation charges - - (6.5) - (6.5) - Loss on extinguishment of debt (15.6) - - - (15.6) - Impairment charges - (269.2) - - - (269.2) Earnings (loss) from continuing operations before taxes 530.3$ (38.8)$ (72.1)$ 4.0$ 458.2$ (34.8)$ Adjusted net income (loss) from continuing operations 366.3$ 168.9$ Acquisition and disposition-related gain (loss) (before taxes) (1.2) 9.2 Long-term compensation charges (before taxes) (6.5) - Loss on extinguishment of debt (before taxes) (15.6) - Impairment charges (before taxes) - (269.2) Tax effect of items of interest and non-recurring tax items 5.9 40.4 Net income (loss) from continuing operations 348.9$ (50.7)$ New vehicle unit sales volume 103,358 93,281 128 - 103,486 93,281 Retail used vehicle unit sales volume 105,457 101,864 77,835 57,161 183,292 159,025 Note: Segment Income (Loss) Defined As Earnings (Loss) From Continuing Operations Before Taxes And Impairment Charges
33 Non-GAAP Reconciliation – Adjusted EBITDA Note – Balance Sheet Amounts Are As Of December 31 For The FY Then Ended. For The LTM Q2 2022 Period, Balance Sheet Amounts Are As Of June 30, 2022. (In millions) FY 2018 FY 2019 FY 2020 FY 2021 LTM Q2 2022 Net Income (Loss) 51.7$ 144.1$ (51.4)$ 348.9$ 373.0$ Provision For Income Taxes 22.6 55.0 15.6 109.3 117.2 Income (Loss) Before Taxes 74.3$ 199.1$ (35.8)$ 458.2$ 490.2$ Non-Floor Plan Interest 52.0 50.5 38.7 44.7 65.8 Depreciation and Amortization 96.7 95.6 93.9 104.3 117.7 Stock-Based Compensation Expense 11.9 10.8 11.7 15.0 16.1 Loss (Gain) On Exit Of Leased Dealerships 1.7 (0.2) - - - Impairment Charges 29.5 20.8 270.0 0.1 0.1 Loss (Gain) On Debt Extinguishment - 6.7 - 15.6 15.6 Long-Term Compensation Charges 32.5 - - 8.0 11.4 Acquisition and Disposition-Related (Gain) Loss (39.3) (74.8) (8.2) (0.4) (1.0) Adjusted EBITDA 259.3$ 308.5$ 370.3$ 645.5$ 715.9$ Long-Term Debt (Including Current Portion) 945.1$ 706.9$ 720.1$ 1,561.2$ 1,538.5$ Cash and Equivalents (5.9) (29.1) (170.3) (299.4) (327.1) Floor Plan Deposit Balance - - (73.2) (99.8) (125.5) Net Debt 939.2$ 677.8$ 476.6$ 1,162.0$ 1,085.9$ Net Debt To Adjusted EBITDA Ratio 3.62 2.20 1.29 1.80 1.52 Long-Term Debt (Including Current Portion) To Adjusted EBITDA Ratio 3.64 2.29 1.94 2.42 2.15
34 Non-GAAP Reconciliation – Adjusted EBITDA By Segment Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 97.3 $ 54.2 Provision For Income Taxes 31.6 19.1 Income (Loss) Before Taxes $ 163.8 $ (34.9) $ - $ 128.9 $ 70.6 $ 2.0 $ 0.7 $ 73.3 Non-Floor Plan Interest 19.0 0.7 - 19.7 9.1 0.4 - 9.5 Depreciation And Amortization 25.9 5.2 - 31.1 21.2 3.3 - 24.5 Stock-Based Compensation Expense 4.4 - - 4.4 3.5 - - 3.5 Long-Term Compensation Charges - - - - - 0.5 - 0.5 Gain On Franchise And Real Estate Disposals (1.1) - - (1.1) - - - - Adjusted EBITDA $ 212.0 $ (29.0) $ - $ 183.0 $ 104.4 $ 6.2 $ 0.7 $ 111.3 Q1 2022 Q1 2021 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) 94.8$ 113.8$ Provision For Income Taxes 32.4 37.0 Income (Loss) Before Taxes 162.1$ (34.9)$ -$ 127.2$ 165.4$ (14.4)$ (0.2)$ 150.8$ Non-Floor Plan Interest 19.1 1.0 - 20.1 8.9 0.3 - 9.2 Depreciation And Amortization 26.4 6.0 - 32.4 21.4 4.2 - 25.6 Stock-Based Compensation Expense 4.2 - - 4.2 4.0 - - 4.0 Long-Term Compensation Charges 4.4 - - 4.4 - 0.5 - 0.5 Gain On Franchise And Real Estate Disposals 0.1 - - 0.1 (0.4) - - (0.4) Adjusted EBITDA 216.3$ (27.9)$ -$ 188.4$ 199.3$ (9.4)$ (0.2)$ 189.7$ Q2 2022 Q2 2021
35 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 96.3 $ 57.3 Provision For Income Taxes 25.8 32.8 Income (Loss) Before Taxes $ 148.9 $ (26.8) $ - $ 122.1 $ 90.6 $ (0.8) $ 0.3 $ 90.1 Non-Floor Plan Interest 16.2 0.7 - 16.9 9.0 0.2 - 9.2 Depreciation And Amortization 23.4 4.9 - 28.3 21.1 2.9 - 24.0 Stock-Based Compensation Expense 3.8 - - 3.8 3.2 - - 3.2 Impairment Charges - 0.1 - 0.1 1.2 - - 1.2 Loss On Debt Extinguishment 15.6 - - 15.6 - - - - Long-Term Compensation Charges - 6.5 - 6.5 - - - - Acquisition and Disposition-Related (Gain) Loss 0.5 - - 0.5 (0.8) (5.2) - (6.0) Adjusted EBITDA $ 208.4 $ (14.6) $ - $ 193.8 $ 124.3 $ (2.9) $ 0.3 $ 121.7 Q4 2021 Q4 2020 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 84.6 $ 59.8 Provision For Income Taxes 27.4 20.6 Income (Loss) Before Taxes $ 145.1 $ (32.9) $ (0.2) $ 112.0 $ 80.4 $ 0.2 $ (0.2) $ 80.4 Non-Floor Plan Interest 8.8 0.3 - 9.1 9.8 0.1 - 9.9 Depreciation And Amortization 21.9 4.0 - 25.9 21.0 2.8 - 23.8 Stock-Based Compensation Expense 3.7 - - 3.7 3.2 - - 3.2 Impairment Charges - - - - - - - - Long-Term Compensation Charges - 0.5 - 0.5 - - - - Gain On Franchise And Real Estate Disposals (0.1) (0.4) - (0.5) (3.4) - - (3.4) Adjusted EBITDA $ 179.4 $ (28.5) $ (0.2) $ 150.7 $ 111.0 $ 3.1 $ (0.2) $ 113.9 Q3 2021 Q3 2020 Non-GAAP Reconciliation – Adjusted EBITDA By Segment
36 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 113.8 $ 30.8 Provision For Income Taxes 37.0 6.3 Income (Loss) Before Taxes $ 165.4 $ (14.4) $ (0.2) $ 150.8 $ 34.8 $ 2.6 $ (0.3) $ 37.1 Non-Floor Plan Interest 8.9 0.3 - 9.2 9.0 0.2 - 9.2 Depreciation And Amortization 21.4 4.2 - 25.6 20.5 2.8 - 23.3 Stock-Based Compensation Expense 4.0 - - 4.0 3.0 - - 3.0 Impairment Charges - - - - 0.8 - - 0.8 Long-Term Compensation Charges - 0.5 - 0.5 - - - - Gain On Franchise And Real Estate Disposals (0.4) - - (0.4) 1.1 - - 1.1 Adjusted EBITDA $ 199.3 $ (9.4) $ (0.2) $ 189.7 $ 69.2 $ 5.6 $ (0.3) $ 74.5 Q2 2021 Q2 2020 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 54.2 $ (199.3) Provision For Income Taxes 19.1 (44.2) Income (Loss) Before Taxes $ 70.5 $ 2.0 $ 0.8 $ 73.3 $ (245.3) $ 2.1 $ (0.3) $ (243.5) Non-Floor Plan Interest 9.1 0.4 - 9.5 10.0 0.4 - 10.4 Depreciation And Amortization 21.2 3.3 - 24.5 20.1 2.7 - 22.8 Stock-Based Compensation Expense 3.5 - - 3.5 2.4 - - 2.4 Impairment Charges - - - - 268.0 - - 268.0 Long-Term Compensation Charges - 0.5 - 0.5 - - - - Gain On Franchise And Real Estate Disposals - - - - - - - - Adjusted EBITDA $ 104.3 $ 6.2 $ 0.8 $ 111.3 $ 55.2 $ 5.2 $ (0.3) $ 60.1 Q1 2021 Q1 2020 Non-GAAP Reconciliation – Adjusted EBITDA By Segment
37 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 57.3 $ 46.3 Provision For Income Taxes 32.8 14.7 Income (Loss) Before Taxes $ 90.6 $ (0.8) $ 0.3 $ 90.1 $ 75.5 $ (14.5) $ - $ 61.0 Non-Floor Plan Interest 9.0 0.2 - 9.2 12.2 0.4 - 12.6 Depreciation And Amortization 21.1 2.9 - 24.0 21.0 2.8 - 23.8 Stock-Based Compensation Expense 3.2 - - 3.2 2.7 - - 2.7 Impairment Charges 1.2 - - 1.2 1.1 16.6 - 17.7 Loss On Debt Extinguishment - - - - 6.7 - - 6.7 Gain On Franchise And Real Estate Disposals (0.8) (5.2) - (6.0) (29.2) - - (29.2) Adjusted EBITDA $ 124.3 $ (2.9) $ 0.3 $ 121.7 $ 90.0 $ 5.3 $ - $ 95.3 Q4 2020 Q4 2019 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 59.8 $ 29.0 Provision For Income Taxes 20.6 11.3 Income (Loss) Before Taxes $ 80.4 $ 0.2 $ (0.2) $ 80.4 $ 38.4 $ 2.1 $ (0.2) $ 40.3 Non-Floor Plan Interest 9.8 0.1 - 9.9 11.9 0.5 - 12.4 Depreciation And Amortization 21.0 2.8 - 23.8 21.6 2.7 - 24.3 Stock-Based Compensation Expense 3.2 - - 3.2 2.7 - - 2.7 Impairment Charges - - - - - 1.1 - 1.1 Gain On Franchise Disposals (3.4) - - (3.4) 0.8 - - 0.8 Adjusted EBITDA $ 111.0 $ 3.1 $ (0.2) $ 113.9 $ 75.4 $ 6.4 $ (0.2) $ 81.6 Q3 2020 Q3 2019 Non-GAAP Reconciliation – Adjusted EBITDA By Segment
38 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 30.8 $ 26.6 Provision For Income Taxes 6.3 10.0 Income (Loss) Before Taxes $ 34.8 $ 2.6 $ (0.3) $ 37.1 $ 35.1 $ 1.7 $ (0.2) $ 36.6 Non-Floor Plan Interest 9.0 0.2 - 9.2 12.6 0.4 - 13.0 Depreciation And Amortization 20.5 2.8 - 23.3 21.7 2.7 - 24.4 Stock-Based Compensation Expense 3.0 - - 3.0 2.6 - - 2.6 Impairment Charges 0.8 - - 0.8 - - - - Gain On Franchise Disposals 1.1 - - 1.1 0.4 - - 0.4 Adjusted EBITDA $ 69.2 $ 5.6 $ (0.3) $ 74.5 $ 72.4 $ 4.8 $ (0.2) $ 77.0 Q2 2020 Q2 2019 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ (199.3) $ 42.2 Provision For Income Taxes (44.2) 19.0 Income (Loss) Before Taxes $ (245.3) $ 2.1 $ (0.3) $ (243.5) $ 61.2 $ 0.2 $ (0.2) $ 61.2 Non-Floor Plan Interest 10.0 0.4 - 10.4 11.8 0.5 - 12.3 Depreciation And Amortization 20.1 2.7 - 22.8 20.8 2.4 - 23.2 Stock-Based Compensation Expense 2.4 - - 2.4 2.8 - - 2.8 Loss (Gain) On Exit Of Leased Dealerships - - - - (0.2) - - (0.2) Impairment Charges 268.0 - - 268.0 - 1.9 - 1.9 Gain On Franchise Disposals - - - - (46.7) - - (46.7) Adjusted EBITDA $ 55.2 $ 5.2 $ (0.3) $ 60.1 $ 49.7 $ 5.0 $ (0.2) $ 54.5 Q1 2020 Q1 2019 Non-GAAP Reconciliation – Adjusted EBITDA By Segment
39 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 46.3 $ 21.8 Provision For Income Taxes 14.7 9.2 Income (Loss) Before Taxes $ 75.5 $ (14.5) $ - $ 61.0 $ 37.4 $ (6.2) $ (0.2) $ 31.0 Non-Floor Plan Interest 12.2 0.4 - 12.6 12.9 0.4 0.1 13.4 Depreciation And Amortization 21.0 2.8 - 23.8 21.1 2.2 - 23.3 Stock-Based Compensation Expense 2.7 - - 2.7 1.3 - - 1.3 Loss (Gain) On Exit Of Leased Dealerships - - - - (1.1) - 0.1 (1.0) Impairment Charges 1.1 16.6 - 17.7 14.1 1.5 - 15.6 Loss On Debt Extinguishment 6.7 - - 6.7 - - - - Gain On Franchise Disposals (29.2) - - (29.2) (0.2) - - (0.2) Adjusted EBITDA $ 90.0 $ 5.3 $ - $ 95.3 $ 85.5 $ (2.1) $ - $ 83.4 Q4 2019 Q4 2018 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 29.0 $ 15.1 Provision For Income Taxes $ 11.3 7.3 Income (Loss) Before Taxes $ 38.4 $ 2.1 $ (0.2) $ 40.3 $ 28.1 $ (5.5) $ (0.2) $ 22.4 Non-Floor Plan Interest $ 11.9 $ 0.5 - 12.4 12.3 0.5 0.1 12.9 Depreciation And Amortization $ 21.6 $ 2.7 - 24.3 22.1 2.0 - 24.1 Stock-Based Compensation Expense $ 2.7 - - 2.7 4.6 - - 4.6 Loss (Gain) On Exit Of Leased Dealerships - - - - - - 0.1 0.1 Impairment Charges - $ 1.1 - 1.1 - - - - Gain On Franchise Disposals $ 0.8 - - 0.8 - - - - Adjusted EBITDA $ 75.4 $ 6.4 $ (0.2) $ 81.6 $ 67.1 $ (3.0) $ (0.0) $ 64.1 Q3 2019 Q3 2018 Non-GAAP Reconciliation – Adjusted EBITDA By Segment
40 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 42.2 $ (2.2) Provision For Income Taxes 19.0 (1.9) Income (Loss) Before Taxes $ 61.2 $ 0.2 $ (0.2) $ 61.2 $ 10.8 $ (14.7) $ (0.2) $ (4.1) Non-Floor Plan Interest 11.8 0.5 - 12.3 12.4 0.3 0.1 12.8 Depreciation And Amortization 20.8 2.4 - 23.2 22.8 1.7 - 24.5 Stock-Based Compensation Expense 2.8 - - 2.8 3.0 - - 3.0 Loss (Gain) On Exit Of Leased Dealerships (0.2) - - (0.2) 5.0 - 0.1 5.1 Impairment Charges - 1.9 - 1.9 3.6 0.1 - 3.7 Long-Term Compensation Charges - - - - - 9.2 - 9.2 Gain On Franchise Disposals (46.7) - - (46.7) (1.2) - - (1.2) Adjusted EBITDA $ 49.7 $ 5.0 $ (0.2) $ 54.5 $ 56.4 $ (3.4) $ - $ 53.0 Q1 2019 Q1 2018 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 26.6 $ 16.9 Provision For Income Taxes $ 10.0 8.1 Income (Loss) Before Taxes $ 35.1 $ 1.7 $ (0.2) $ 36.6 $ 53.2 $ (27.8) $ (0.4) $ 25.0 Non-Floor Plan Interest $ 12.6 $ 0.4 - 13.0 12.3 0.4 0.1 12.8 Depreciation And Amortization $ 21.7 $ 2.7 - 24.4 22.8 1.9 - 24.7 Stock-Based Compensation Expense $ 2.6 - - 2.6 3.0 - - 3.0 Loss (Gain) On Exit Of Leased Dealerships - - - - (2.6) - 0.1 (2.5) Impairment Charges - - - - 10.3 - - 10.3 Long-Term Compensation Charges - - - - - 23.3 - 23.3 Gain On Franchise Disposals $ 0.4 - - 0.4 (38.0) - - (38.0) Adjusted EBITDA $ 72.4 $ 4.8 $ (0.2) $ 77.0 $ 61.0 $ (2.2) $ (0.2) $ 58.6 Q2 2019 Q2 2018 Non-GAAP Reconciliation – Adjusted EBITDA By Segment
41 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 21.8 $ 62.0 Provision For Income Taxes 9.2 (8.4) Income (Loss) Before Taxes $ 37.4 $ (6.2) $ (0.2) $ 31.0 $ 57.8 $ (4.0) $ (0.2) $ 53.6 Non-Floor Plan Interest 12.9 0.4 0.1 13.4 12.4 0.3 0.1 12.8 Depreciation And Amortization 21.1 2.2 - 23.3 22.6 1.3 - 23.9 Stock-Based Compensation Expense 1.3 - - 1.3 2.2 - - 2.2 Loss (Gain) On Exit Of Leased Dealerships (1.1) - 0.1 (1.0) - - 0.1 0.1 Impairment Charges 14.1 1.5 - 15.6 6.1 - - 6.1 Long-Term Compensation Charges - - - - - 1.3 - 1.3 Gain On Franchise Disposals (0.2) - - (0.2) (1.5) - - (1.5) Adjusted EBITDA $ 85.5 $ (2.1) $ - $ 83.4 $ 99.6 $ (1.1) $ 0.0 $ 98.5 Q4 2018 Q4 2017 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 15.1 $ 19.4 Provision For Income Taxes 7.3 13.9 Income (Loss) Before Taxes $ 28.1 $ (5.5) $ (0.2) $ 22.4 $ 38.2 $ (4.4) $ (0.5) $ 33.3 Non-Floor Plan Interest 12.3 0.5 0.1 12.9 12.1 0.3 0.1 12.5 Depreciation And Amortization 22.1 2.0 - 24.1 22.2 1.3 - 23.5 Stock-Based Compensation Expense 4.6 - - 4.6 3.2 - - 3.2 Loss (Gain) On Exit Of Leased Dealerships - - 0.1 0.1 (0.2) - 0.4 0.2 Impairment Charges - - - - 0.2 - - 0.2 Gain On Franchise Disposals - - - - (8.5) - - (8.5) Adjusted EBITDA $ 67.1 $ (3.0) $ (0.0) $ 64.1 $ 67.2 $ (2.8) $ - $ 64.4 Q3 2018 Q3 2017 Non-GAAP Reconciliation – Adjusted EBITDA By Segment
® Investor Relations Contacts: Sonic Automotive Inc. (NYSE: SAH) Danny Wieland, Vice President, Investor Relations & Financial Reporting ir@sonicautomotive.com (704) 927-3462 KCSA Strategic Communications David Hanover / Scott Eckstein sonic@kcsa.com (212) 896-1220