Quarterly report pursuant to Section 13 or 15(d)

Business Acquisitions and Dispositions

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Business Acquisitions and Dispositions
 6 Months Ended
Jun. 30, 2015
Business Combinations [Abstract]  
Business Acquisitions and Dispositions

2. Business Acquisitions and Dispositions

Acquisitions – Sonic acquired one luxury franchise during the six months ended June 30, 2014 for an aggregate purchase price of approximately $2.6 million. Sonic did not acquire any franchises during the six months ended June 30, 2015.

Dispositions – As discussed in Note 1, “Description of Business and Summary of Significant Accounting Policies,” of the notes to the consolidated financial statements in Sonic’s Annual Report on Form 10-K for the year ended December 31, 2014, the FASB issued ASU 2014-08 which amended the definition of and reporting requirements for discontinued operations. Sonic elected to adopt and apply this guidance beginning with its Quarterly Report on Form 10-Q for the period ended June 30, 2014. The results of operations for those dealerships that were classified as discontinued operations as of March 31, 2014 are included in income (loss) from discontinued operations in the accompanying condensed consolidated statements of income and will continue to be reported within discontinued operations in the future. Revenues and other activities associated with dealerships classified as discontinued operations were as follows:

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

 

(In thousands)

 

Income (loss) from operations

 

$

(393

)

 

$

(181

)

 

$

(645

)

 

$

(770

)

Gain (loss) on disposal

 

 

-

 

 

 

97

 

 

 

-

 

 

 

53

 

Lease exit accrual adjustments and charges

 

 

(116

)

 

 

(43

)

 

 

(555

)

 

 

(375

)

Pre-tax income (loss)

 

$

(509

)

 

$

(127

)

 

$

(1,200

)

 

$

(1,092

)

Total revenues

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

Beginning with disposals occurring during the three months ended June 30, 2014, only the operating results of disposals that represent a strategic shift that has (or will have) a major impact on Sonic’s results of operations and financial position will be included in the income (loss) from discontinued operations in the accompanying condensed consolidated statements of income. Sonic disposed of one franchise during the three and six months ended June 30, 2015 that generated net cash of approximately $1.3 million. Sonic disposed of two franchises during the three months ended June 30, 2014 and disposed of three franchises during the six months ended June 30, 2014. These disposals generated net cash from disposition in those periods of approximately $13.3 million and $15.2 million, respectively.

Revenues and other activities associated with disposed dealerships that remain in continuing operations were as follows:

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

 

(In thousands)

 

Income (loss) from operations

 

$

(998

)

 

$

719

 

 

$

(1,280

)

 

$

205

 

Gain (loss) on disposal

 

 

1,057

 

 

 

7,260

 

 

 

955

 

 

 

7,624

 

Property impairment charges

 

 

(10,096

)

 

 

-

 

 

 

(10,096

)

 

 

-

 

Pre-tax income (loss)

 

$

(10,037

)

 

$

7,979

 

 

$

(10,421

)

 

$

7,829

 

Total revenues

 

$

4,504

 

 

$

82,783

 

 

$

10,603

 

 

$

155,232