Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.23.3
Segment Information
 9 Months Ended
Sep. 30, 2022
Segment Reporting [Abstract]  
Segment Information 9. Segment Information
As of September 30, 2023, Sonic had three 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”); (2) pre-owned vehicle specialty retail locations that provide guests an opportunity to search our nationwide inventory, purchase a pre-owned vehicle, select finance and insurance products and sell their current vehicle to us (the “EchoPark Segment”); and (3) retail locations that sell new and used powersports vehicles, perform vehicle maintenance, warranty and repair services, and arrange finance and insurance products (the “Powersports 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, 2023 and 2022 were as follows:
Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
(In millions)
Revenues:
Franchised Dealerships Segment revenues:
Retail new vehicles $ 1,546.7  $ 1,359.6  $ 4,550.9  $ 4,047.1 
Fleet new vehicles 23.2  32.0  70.4  70.0 
Total new vehicles 1,569.9  1,391.6  4,621.3  4,117.1 
Used vehicles 780.7  842.4  2,322.8  2,568.1 
Wholesale vehicles 51.4  75.8  165.3  261.2 
Parts, service and collision repair 431.8  404.7  1,289.0  1,183.4 
Finance, insurance and other, net 126.0  125.8  375.4  382.1 
Franchised Dealerships Segment revenues $ 2,959.8  $ 2,840.3  $ 8,773.8  $ 8,511.9 
EchoPark Segment revenues:
Retail new vehicles $ —  $ 1.6  $ 1.0  $ 7.3 
Used vehicles 554.8  511.4 1,651.3  1,601.3 
Wholesale vehicles 26.6  38.9  89.1  143.3 
Finance, insurance and other, net 45.3  38.9  136.4  121.8 
EchoPark Segment revenues $ 626.7  $ 590.8  $ 1,877.8  $ 1,873.7 
Powersports Segment revenues:
Retail new vehicles $ 26.8  $ 10.6  $ 72.5  $ 13.0 
Used vehicles 4.9  2.0  17.1  5.0 
Wholesale vehicles 1.3  —  1.9  0.3 
Parts, service and collision repair 21.6  3.5  38.6  5.2 
Finance, insurance and other, net 2.4  0.9  5.9  1.4 
Powersports Segment revenues $ 57.0  $ 17.0  $ 136.0  $ 24.9 
Total consolidated revenues $ 3,643.5  $ 3,448.1  $ 10,787.6  $ 10,410.5 

Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
(In millions)
Segment Income (Loss) (1):
Franchised Dealerships Segment $ 101.5  $ 146.3  $ 357.2  $ 472.2 
EchoPark Segment (16.9) (31.1) (116.5) (100.6)
Powersports Segment 6.6  1.2  9.2  0.9 
Total segment income $ 91.2  $ 116.4  $ 249.9  $ 372.5 
Impairment charges —  —  (62.6) — 
Income before taxes $ 91.2  $ 116.4  $ 187.3  $ 372.5 
(1)Segment income (loss) for each segment is defined as income (loss) before taxes and impairment charges.
Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
(In millions)
Depreciation and Amortization:
Franchised Dealerships Segment $ 28.2  $ 25.8  $ 82.8  $ 75.8 
EchoPark Segment 6.1  6.8  20.4  17.7 
Powersports Segment 0.9  0.2  2.5  0.5 
Total depreciation and amortization $ 35.2  $ 32.8  $ 105.7  $ 94.0 

Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
(In millions)
Floor Plan Interest Expense:
Franchised Dealerships Segment (1) $ 12.9  $ 6.6  $ 34.7  $ 13.9 
EchoPark Segment 4.3  3.0  13.6  6.7 
Powersports Segment 0.2  —  0.6  — 
Total floor plan interest expense $ 17.4  $ 9.6  $ 48.9  $ 20.6 
(1)Amount is net of interest earned on the floor plan deposit balance of $5.0 million and $0.9 million in the three months ended September 30, 2023 and 2022, respectively, and $13.8 million and $2.3 million in the nine months ended September 30, 2023 and 2022, respectively.

Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
(In millions)
Interest Expense, Other, Net:
Franchised Dealerships Segment $ 27.9  $ 21.4  $ 82.2  $ 61.7 
EchoPark Segment 0.7  1.1  2.5  3.0 
Powersports Segment 0.4  0.4  1.5  0.4 
Total interest expense, other, net $ 29.0  $ 22.9  $ 86.2  $ 65.1 
Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
(In millions)
Capital Expenditures:
Franchised Dealerships Segment $ 72.1  $ 43.8  $ 137.3  $ 95.8 
EchoPark Segment 5.4  53.5  14.1  101.8 
Powersports Segment 0.6  —  2.2  — 
Total capital expenditures $ 78.1  $ 97.3  $ 153.6  $ 197.6 
September 30, 2023 December 31, 2022
(In millions)
Assets:
Franchised Dealerships Segment $ 3,806.0  $ 4,091.7 
EchoPark Segment 700.9  267.6 
Powersports Segment 208.8  117.8 
Corporate and other:
Cash and cash equivalents 34.6  229.2 
Floor plan deposit balance 300.0  272.0 
Total assets $ 5,050.3  $ 4,978.3