Sonic Automotive, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Commitments and Contingencies (Tables)

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2014

Commitments And Contingencies Disclosure [Abstract]

A summary of the activity of these operating lease accruals consists of the following:


		(In thousands)
	Balance, December 31, 2013	$	27,234
	Lease exit expense (1)		302
	Payments (2)		(7,018	)
	Lease buyout (3)		(1,556	)
	Balance, December 31, 2014	$	18,962

(1) Expense of approximately $0.2 million is recorded in interest expense, other, net, expense of approximately $0.3 million
is recorded in selling, general and administrative expenses, and income of approximately $0.2 million is recorded
in income (loss) from discontinued operations in the accompanying Consolidated Statements of Income.
(2) Amount is recorded as an offset to rent expense in selling, general and administrative expenses, with approximately
$0.8 million in continuing operations and $6.2 million in income (loss) from discontinued operations in the
accompanying Consolidated Statements of Income.
(3) Amount represents write-off of accrual related to an early lease buyout agreement which was completed and paid,
relieving Sonic of any future lease obligation.

Minimum Future Lease Payments for both Continuing and Discontinued Operations

Minimum future lease payments for facility leases and future receipts from subleases as required under non-cancelable operating leases for both continuing and discontinued operations based on current interest rates in effect are as follows:



	Future Minimum Lease Payments, Net		Receipts from Future Subleases
Year Ending December 31,	(In thousands)

2015	$	99,939	$	(15,809	)
2016	$	91,042	$	(14,370	)
2017	$	76,620	$	(10,762	)
2018	$	64,124	$	(9,154	)
2019	$	51,267	$	(8,055	)
Thereafter	$	124,232	$	(32,935	)

Financial Covenants Related to Amended Subordination and Guaranty Agreement

The required financial covenants related to certain lease agreements are as follows:

Covenant

Minimum

Maximum

Minimum

Consolidated

Fixed Charge

Total Lease

Minimum

Liquidity

Coverage

Adjusted Leverage

EBTDAR to

Ratio

Rent Ratio

Required ratio

1.05

1.20

5.50

1.50

December 31, 2014 actual

1.20

1.61

4.12

3.56