Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.21.2
Segment Information
 6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
Segment Information 10. Segment InformationAs of June 30, 2021, Sonic had two operating segments: (1) retail automotive franchises that sell new vehicles and buy and sell used vehicles, sell replacement parts, perform vehicle maintenance, warranty and repair services, and arrange finance and insurance products (the “Franchised Dealerships Segment”); and (2) pre-owned vehicle specialty retail locations that provide guests an opportunity to search our nationwide inventory, purchase a vehicle, select finance and insurance products and sell their current vehicle to us (the “EchoPark Segment”). Sonic has determined that its operating segments also represent its reportable segments.
The reportable 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; (2) the Company’s President; and (3) the Company’s Chief Financial Officer.

Reportable segment financial information for the three and six months ended June 30, 2021 and 2020 were as follows:
Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
(In thousands)
Segment Revenues:
Franchised Dealerships Segment revenues:
New vehicles $ 1,461,984  $ 900,003  $ 2,618,301  $ 1,859,492 
Used vehicles 761,524  535,699  1,423,059  1,102,587 
Wholesale vehicles 62,956  28,509  119,160  70,948 
Parts, service and collision repair 346,118  251,998  654,194  576,499 
Finance, insurance and other, net 124,060  80,401  221,586  163,429 
Franchised Dealerships Segment revenues $ 2,756,642  $ 1,796,610  $ 5,036,300  $ 3,772,955 
EchoPark Segment revenues:
New vehicles $ 909  $ —  $ 909  $ — 
Used vehicles 505,172  273,178  933,735  556,343 
Wholesale vehicles 21,851  4,666  40,454  10,770 
Parts, service and collision repair 14,478  7,060  27,315  17,239 
Finance, insurance and other, net 53,194  30,372  100,330  62,635 
EchoPark Segment revenues $ 595,604  $ 315,276  $ 1,102,743  $ 646,987 
Total consolidated revenues $ 3,352,246  $ 2,111,886  $ 6,139,043  $ 4,419,942 
Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
(In thousands, except unit data)
Segment Income (Loss) (1):
Franchised Dealerships Segment $ 165,415  $ 35,689  $ 235,957  $ 58,346 
EchoPark Segment (14,394) 2,577  (12,384) 4,672 
Total segment income (loss) $ 151,021  $ 38,266  $ 223,573  $ 63,018 
Impairment charges (2) —  (833) —  (268,833)
Income (loss) from continuing operations before taxes $ 151,021  $ 37,433  $ 223,573  $ (205,815)
Retail New and Used Vehicle Unit Sales Volume:
Franchised Dealerships Segment 59,038  43,864  110,632  91,626 
EchoPark Segment 21,275  13,207  40,945  27,193 
Total retail new and used vehicle unit sales volume 80,313  57,071  151,577  118,819 

(1)Segment income (loss) for each segment is defined as income (loss) from continuing operations before taxes and impairment charges.
(2)For the three months ended June 30, 2020, the above amount includes a pre-tax impairment charge of approximately $0.8 million related to the abandonment of certain construction projects. For the six months ended June 30, 2020, the above amount includes a pre-tax impairment charge of approximately $268.0 million related to adjustments in fair value of goodwill for the Franchised Dealerships Segment as a result of the economic disruptions due to the worldwide spread of COVID-19 which had adversely affected our business, as well as a pre-tax impairment charge of approximately $0.8 million related to the abandonment of certain construction projects.
Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
(In thousands)
Impairment Charges:
Franchised Dealerships Segment $ —  $ 833  $ —  $ 268,833 
EchoPark Segment —  —  —  — 
Total impairment charges $ —  $ 833  $ —  $ 268,833 
Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
(In thousands)
Depreciation and Amortization:
Franchised Dealerships Segment $ 20,616  $ 19,895  $ 40,992  $ 39,484 
EchoPark Segment 4,145  2,752  7,456  5,460 
Total depreciation and amortization $ 24,761  $ 22,647  $ 48,448  $ 44,944 

Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
(In thousands)
Floor Plan Interest Expense:
Franchised Dealerships Segment $ 3,155  $ 5,675  $ 7,271  $ 15,283 
EchoPark Segment 1,174  639  2,170  1,539 
Total floor plan interest expense $ 4,329  $ 6,314  $ 9,441  $ 16,822 

Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
(In thousands)
Interest Expense, Other, Net:
Franchised Dealerships Segment $ 9,723  $ 9,556  $ 19,682  $ 20,156 
EchoPark Segment 354  241  681  606 
Total interest expense, other, net $ 10,077  $ 9,797  $ 20,363  $ 20,762 
Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
(In thousands)
Capital Expenditures:
Franchised Dealerships Segment $ 25,506  $ 35,388  $ 71,677  $ 52,637 
EchoPark Segment 11,923  6,540  33,414  9,096 
Total capital expenditures $ 37,429  $ 41,928  $ 105,091  $ 61,733 
June 30, 2021 December 31, 2020
(In thousands)
Assets:
Franchised Dealerships Segment assets $ 2,742,475  $ 3,096,811 
EchoPark Segment assets 674,253  478,869 
Corporate and other:
Cash and cash equivalents 239,617  170,313 
Other corporate assets —  — 
Total assets $ 3,656,345  $ 3,745,993