Sonic Automotive, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Per Share Data and Stockholders' Equity

Per Share Data and Stockholders' Equity

9 Months Ended

Sep. 30, 2016

7. Per Share Data and Stockholders’ Equity

The calculation of diluted earnings per share considers the potential dilutive effect of options and shares under Sonic’s stock compensation plans. Certain of Sonic’s non-vested restricted stock awards contain rights to receive non-forfeitable dividends and, thus, are considered participating securities and are included in the two-class method of computing earnings per share. The following tables illustrate the dilutive effect of such items on earnings per share for the three and nine months ended September 30, 2016 and 2015:

	Three Months Ended September 30, 2016
			Income (Loss)					Income (Loss)
			From Continuing					From Discontinued						Net
			Operations					Operations						Income (Loss)
	Weighted					Per					Per						Per
	Average					Share					Share						Share
	Shares		Amount			Amount		Amount			Amount			Amount			Amount
	(In thousands, except per share amounts)

Earnings (loss) and shares		45,118	$	18,969				$	(858	)				$	18,111
Effect of participating securities:
Non-vested restricted stock				(11	)				-						(11	)
Basic earnings (loss) and shares		45,118	$	18,958		$	0.42	$	(858	)	$	(0.02	)	$	18,100		$	0.40
Effect of dilutive securities:
Stock compensation plans		236
Diluted earnings (loss) and shares		45,354	$	18,958		$	0.42	$	(858	)	$	(0.02	)	$	18,100		$	0.40

	Three Months Ended September 30, 2015
			Income (Loss)					Income (Loss)
			From Continuing					From Discontinued						Net
			Operations					Operations						Income (Loss)
	Weighted					Per					Per						Per
	Average					Share					Share						Share
	Shares		Amount			Amount		Amount			Amount			Amount			Amount
	(In thousands, except per share amounts)

Earnings (loss) and shares		50,456	$	27,103				$	(598	)				$	26,505
Effect of participating securities:
Non-vested restricted stock				(13	)				-						(13	)
Basic earnings (loss) and shares		50,456	$	27,090		$	0.54	$	(598	)	$	(0.01	)	$	26,492		$	0.53
Effect of dilutive securities:
Stock compensation plans		313
Diluted earnings (loss) and shares		50,769	$	27,090		$	0.53	$	(598	)	$	(0.01	)	$	26,492		$	0.52

	Nine Months Ended September 30, 2016
			Income (Loss)					Income (Loss)
			From Continuing					From Discontinued						Net
			Operations					Operations						Income (Loss)
	Weighted					Per					Per						Per
	Average					Share					Share						Share
	Shares		Amount			Amount		Amount			Amount			Amount			Amount
	(In thousands, except per share amounts)

Earnings (loss) and shares		45,930	$	56,475				$	(918	)				$	55,557
Effect of participating securities:
Non-vested restricted stock				(31	)				-						(31	)
Basic earnings (loss) and shares		45,930	$	56,444		$	1.23	$	(918	)	$	(0.02	)	$	55,526		$	1.21
Effect of dilutive securities:
Stock compensation plans		200
Diluted earnings (loss) and shares		46,130	$	56,444		$	1.22	$	(918	)	$	(0.02	)	$	55,526		$	1.20

	Nine Months Ended September 30, 2015
			Income (Loss)					Income (Loss)
			From Continuing					From Discontinued						Net
			Operations					Operations						Income (Loss)
	Weighted					Per					Per						Per
	Average					Share					Share						Share
	Shares		Amount			Amount		Amount			Amount			Amount			Amount
	(In thousands, except per share amounts)

Earnings (loss) and shares		50,697	$	56,584				$	(1,331	)				$	55,253
Effect of participating securities:
Non-vested restricted stock				(27	)				-						(27	)
Basic earnings (loss) and shares		50,697	$	56,557		$	1.12	$	(1,331	)	$	(0.03	)	$	55,226		$	1.09
Effect of dilutive securities:
Stock compensation plans		389
Diluted earnings (loss) and shares		51,086	$	56,557		$	1.11	$	(1,331	)	$	(0.03	)	$	55,226		$	1.08

In addition to the stock options included in the tables above, options to purchase approximately 0.2 million and 0.5 million shares of Sonic’s Class A common stock were outstanding at September 30, 2016 and 2015, respectively, but were not included in the computation of diluted earnings per share because the options were not dilutive.