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

Quarterly report pursuant to Section 13 or 15(d)

Segment Information

Segment Information

3 Months Ended

Mar. 31, 2018

As of March 31, 2018, Sonic had two operating segments comprised of: (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 buy and sell used vehicles, perform vehicle repair and maintenance services, and arrange finance and insurance products under the EchoPark and other pre-owned brands (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 and segment income (loss) for the three months ended March 31, 2018 and 2017 are as follows:



	Three Months Ended March 31,
	2018		2017
	(In thousands)
Revenues:
Franchised Dealerships Segment	$	2,269,269	$	2,246,025
Pre-Owned Stores Segment	131,504		41,797
Total consolidated revenues	$	2,400,773	$	2,287,822



	Three Months Ended March 31,
	2018			2017
	(In thousands)
Segment income (loss) (1):
Franchised Dealerships Segment	$	23,764		$	33,470
Pre-Owned Stores Segment	(14,253		)	(5,408		)
Total segment income (loss)	9,511			28,062
Interest expense, other, net	(13,456		)	(13,409		)
Other income (expense), net	89			(14,501		)
Income (loss) from continuing operations before taxes	$	(3,856	)	$	152


(1)	Segment income (loss) for each segment is defined as operating income (loss) less interest expense, floor plan.