| Segment Information |
14. Segment Information
As of December 31, 2017, Sonic had two operating segments: (1) retail automotive franchises that sell new vehicles and buy and sell used vehicles, sell replacement parts, perform vehicle repair and maintenance services, and arrange finance and insurance products (the “Franchised Dealerships Segment”) and (2) stand-alone pre-owned vehicle specialty retail locations that provide customers an opportunity to search, buy, service, finance and sell pre-owned vehicles (the “Pre-Owned Stores Segment”).
The operating segments identified above are the business activities of Sonic for which discrete financial information is available and for which operating results are regularly reviewed by Sonic’s chief operating decision maker to assess operating performance and allocate resources. Sonic’s chief operating decision maker is a group of three individuals consisting of: (1) the Company’s Chief Executive Officer and President; (2) the Company’s Executive Vice President and Chief Financial Officer; and (3) the Company’s Executive Vice President of Operations. Sonic has determined that its operating segments also represent its reportable segments.
Reportable segment revenues, segment income (loss), floor plan interest expense, depreciation and amortization, capital expenditures and assets are as follows:
|
|
|
|
Year Ended December 31,
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
(In thousands)
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Franchised Dealerships Segment
|
|
|
$
|
9,612,899
|
|
|
$
|
9,590,752
|
|
|
$
|
9,547,236
|
|
|
Pre-Owned Stores Segment
|
|
|
|
254,309
|
|
|
|
141,027
|
|
|
|
77,063
|
|
|
Total consolidated revenues
|
|
|
$
|
9,867,208
|
|
|
$
|
9,731,779
|
|
|
$
|
9,624,299
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
(In thousands)
|
|
|
Segment income (loss) (1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Franchised Dealerships Segment
|
|
|
$
|
196,897
|
|
|
$
|
218,769
|
|
|
$
|
213,224
|
|
|
Pre-Owned Stores Segment
|
|
|
|
(21,727
|
)
|
|
|
(13,576
|
)
|
|
|
(17,257
|
)
|
|
Total segment income (loss)
|
|
|
|
175,170
|
|
|
|
205,193
|
|
|
|
195,967
|
|
|
Interest expense, other, net
|
|
|
|
(52,524
|
)
|
|
|
(50,106
|
)
|
|
|
(50,910
|
)
|
|
Other income (expense), net
|
|
|
|
(14,522
|
)
|
|
|
125
|
|
|
|
99
|
|
|
Income (loss) from continuing operations before taxes
|
|
|
$
|
108,124
|
|
|
$
|
155,212
|
|
|
$
|
145,156
|
|
|
(1) Segment income (loss) for each segment is defined as operating income less floor plan interest expense.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
(In thousands)
|
|
|
Floor plan interest expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Franchised Dealerships Segment
|
|
|
$
|
35,030
|
|
|
$
|
26,631
|
|
|
$
|
20,727
|
|
|
Pre-Owned Stores Segment
|
|
|
|
1,365
|
|
|
|
1,085
|
|
|
|
599
|
|
|
Total floor plan interest expense
|
|
|
$
|
36,395
|
|
|
$
|
27,716
|
|
|
$
|
21,326
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
(In thousands)
|
|
|
Depreciation and amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Franchised Dealerships Segment
|
|
|
$
|
83,741
|
|
|
$
|
73,591
|
|
|
$
|
65,766
|
|
|
Pre-Owned Stores Segment
|
|
|
|
5,203
|
|
|
|
3,855
|
|
|
|
3,033
|
|
|
Total depreciation and amortization
|
|
|
$
|
88,944
|
|
|
$
|
77,446
|
|
|
$
|
68,799
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
(In thousands)
|
|
|
Capital expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Franchised Dealerships Segment
|
|
|
$
|
195,220
|
|
|
$
|
166,405
|
|
|
$
|
148,593
|
|
|
Pre-Owned Stores Segment
|
|
|
|
39,025
|
|
|
|
39,827
|
|
|
|
24,656
|
|
|
Total capital expenditures
|
|
|
$
|
234,245
|
|
|
$
|
206,232
|
|
|
$
|
173,249
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
(In thousands)
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Franchised Dealerships Segment
|
|
|
|
|
$
|
1,930,336
|
|
|
$
|
2,079,297
|
|
|
Pre-Owned Stores Segment
|
|
|
|
|
|
200,500
|
|
|
|
144,605
|
|
|
Corporate and other:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents
|
|
|
|
|
|
6,352
|
|
|
|
3,108
|
|
|
Goodwill, Net
|
|
|
|
|
|
525,780
|
|
|
|
472,437
|
|
|
Other Intangible Assets, Net
|
|
|
|
|
|
74,589
|
|
|
|
80,233
|
|
|
Other Corporate and Other Assets
|
|
|
|
|
|
1,080,961
|
|
|
|
859,656
|
|
|
Total assets
|
|
|
|
|
$
|
3,818,518
|
|
|
$
|
3,639,336
|
|
|