Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.21.2
Segment Information
 9 Months Ended
Sep. 30, 2020
Segment Reporting [Abstract]  
Segment Information 9. Segment Information
As of September 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 nine months ended September 30, 2021 and 2020 were as follows:
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(In thousands)
Segment Revenues:
Franchised Dealerships Segment revenues:
New vehicles $ 1,143,416  $ 1,098,302  $ 3,761,718  $ 2,957,794 
Used vehicles 750,263  615,565  2,173,322  1,718,151 
Wholesale vehicles 64,052  48,526  183,212  119,474 
Parts, service and collision repair 339,930  310,035  994,125  886,534 
Finance, insurance and other, net 111,808  91,035  333,394  254,465 
Franchised Dealerships Segment revenues $ 2,409,469  $ 2,163,463  $ 7,445,771  $ 5,936,418 
EchoPark Segment revenues:
New vehicles $ 3,506  $ —  $ 4,415  $ — 
Used vehicles 559,229  330,463  1,492,964  886,806 
Wholesale vehicles 33,035  7,976  73,489  18,747 
Parts, service and collision repair 15,297  10,894  42,611  28,133 
Finance, insurance and other, net 52,276  35,749  152,606  98,383 
EchoPark Segment revenues $ 663,343  $ 385,082  $ 1,766,085  $ 1,032,069 
Total consolidated revenues $ 3,072,812  $ 2,548,545  $ 9,211,856  $ 6,968,487 
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(In thousands, except unit data)
Segment Income (Loss) (1):
Franchised Dealerships Segment (2) $ 145,137  $ 80,460  $ 381,094  $ 138,805 
EchoPark Segment (32,887) 239  (45,271) 4,912 
Total segment income (loss) $ 112,250  $ 80,699  $ 335,823  $ 143,717 
Impairment charges (3) —  (26) —  (268,859)
Income (loss) from continuing operations before taxes $ 112,250  $ 80,673  $ 335,823  $ (125,142)

(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 September 30, 2020, the above amount includes a pre-tax gain on the disposal of a franchised dealership of approximately $3.2 million.
(3)For the nine months ended September 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 $0.9 million related to the abandonment of certain construction projects.
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(In thousands)
Impairment Charges:
Franchised Dealerships Segment $ —  $ 26  $ —  $ 268,859 
EchoPark Segment —  —  —  — 
Total impairment charges $ —  $ 26  $ —  $ 268,859 
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(In thousands)
Depreciation and Amortization:
Franchised Dealerships Segment $ 21,266  $ 20,170  $ 62,258  $ 59,654 
EchoPark Segment 3,973  2,764  11,429  8,225 
Total depreciation and amortization $ 25,239  $ 22,934  $ 73,687  $ 67,879 

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(In thousands)
Floor Plan Interest Expense:
Franchised Dealerships Segment $ 1,973  $ 4,234  $ 9,243  $ 19,517 
EchoPark Segment 1,367  765  3,538  2,304 
Total floor plan interest expense $ 3,340  $ 4,999  $ 12,781  $ 21,821 
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(In thousands)
Interest Expense, Other, Net:
Franchised Dealerships Segment $ 9,477  $ 10,615  $ 29,158  $ 30,771 
EchoPark Segment 340  147  1,022  752 
Total interest expense, other, net $ 9,817  $ 10,762  $ 30,180  $ 31,523 
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(In thousands)
Capital Expenditures:
Franchised Dealerships Segment $ 53,774  $ 18,237  $ 122,022  $ 70,875 
EchoPark Segment 22,693  12,085  59,494  21,181 
Total capital expenditures $ 76,467  $ 30,322  $ 181,516  $ 92,056 
September 30, 2021 December 31, 2020
(In thousands)
Assets:
Franchised Dealerships Segment assets $ 2,638,803  $ 3,096,811 
EchoPark Segment assets 647,075  478,869 
Corporate and other:
Cash and cash equivalents 220,082  170,313 
Other corporate assets 3  — 
Total assets $ 3,505,963  $ 3,745,993