Annual report pursuant to Section 13 and 15(d)

Segment Information

v3.25.0.1
Segment Information
 12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
Segment Information Segment Information
As of December 31, 2024, Sonic had three operating segments: (1) the Franchised Dealerships Segment; (2) the EchoPark Segment; and (3) the Powersports Segment. Refer to Note 1, “Description of Business and Summary of Significant Accounting Policies,” for additional discussion of our operating segments. 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. The chief operating decision makers evaluate segment performance and allocate resources using metrics such as segment gross profit and segment income. These segment profit metrics are consistent across all segments and align with the way we measure profit on a consolidated basis. The accounting policies applied to segments follow those for the Company as a whole.
Reportable segment financial information for the three years ended December 31, 2024 were as follows:
Franchised Dealerships Segment - Reported
Twelve Months Ended December 31,
2024 2023 2022
(In millions)
Revenues:
Retail new vehicles $ 6,425.5  $ 6,215.0  $ 5,581.6 
Fleet new vehicles 95.3  92.2  99.4 
Used vehicles 2,919.8  3,050.3  3,391.5 
Wholesale vehicles 188.9  204.5  314.0 
Parts, service and collision repair 1,802.9  1,714.2  1,588.0 
Finance, insurance and other, net 506.8  498.6  510.1 
Cost of sales:
Retail new vehicles (6,048.6) (5,696.3) (4,926.3)
Fleet new vehicles (92.3) (88.2) (94.5)
Used vehicles (2,769.6) (2,887.4) (3,217.1)
Wholesale vehicles (193.5) (207.8) (320.3)
Parts, service and collision repair (894.0) (861.5) (801.3)
Segment gross profit
 $ 1,941.2  $ 2,033.6  $ 2,125.1 
Selling, general and administrative expenses:
Compensation (892.4) (856.6) (858.0)
Advertising (55.1) (40.5) (36.9)
Rent (39.2) (40.3) (42.4)
Other (1)
 (388.7) (377.2) (335.7)
Depreciation and amortization (124.4) (112.3) (101.8)
Other income (expense):
Interest expense, floor plan (70.6) (49.2) (23.6)
Interest expense, other, net (112.7) (109.7) (85.0)
Other income (expense), net (0.5) 0.2  (0.1)
Segment income
 $ 257.6  $ 448.0  $ 641.6 
(1) Other selling, general and administrative expenses include various fixed and variable expenses, including gain on disposal of franchises, certain customer-related costs such as gasoline and service loaners, and insurance, training, legal and information technology expenses.
EchoPark Segment - Reported
Twelve Months Ended December 31,
2024 2023 2022
(In millions)
Revenues:
Retail new vehicles $ —  $ 1.0  $ 9.2 
Used vehicles 1,838.0  2,143.8  2,116.8 
Wholesale vehicles 95.8  111.7  170.6 
Finance, insurance and other, net 194.0  177.9  166.4 
Cost of Sales:
Retail new vehicles —  (0.9) (8.1)
Used vehicles (1,822.8) (2,160.9) (2,112.4)
Wholesale vehicles (97.1) (110.8) (167.4)
Segment gross profit
 $ 207.9  $ 161.8  $ 175.1 
Selling, general and administrative expenses:
Compensation (95.8) (132.0) (148.0)
Advertising (27.7) (49.9) (58.0)
Rent 1.7  (6.3) (8.5)
Other (1)
 (43.9) (58.8) (55.3)
Depreciation and amortization (21.8) (26.6) (24.7)
Other income (expense):
Interest expense, floor plan (14.2) (17.4) (10.7)
Interest expense, other, net (2.7) (3.2) (3.9)
Other income (expense), net —  (0.1) 0.1 
Segment income (loss)
 $ 3.5  $ (132.5) $ (133.9)
(1) Other selling, general and administrative expenses include various fixed and variable expenses, including gain on disposal of franchises, certain customer-related costs such as gasoline and service loaners, and insurance, training, legal and information technology expenses.
Powersports Segment - Reported
Twelve Months Ended December 31,
2024 2023 2022
(In millions)
Revenues:
Retail new vehicles $ 82.0  $ 88.6  $ 31.8 
Used vehicles 22.3  19.5  7.1 
Wholesale vehicles 2.3  2.6  0.3 
Parts, service and collision repair 43.6  45.3  11.7 
Finance, insurance and other, net 7.1  7.2  2.6 
Cost of Sales:
Retail new vehicles $ (70.5) $ (72.0) $ (25.4)
Used vehicles (17.0) (14.1) (5.1)
Wholesale vehicles (2.6) (2.8) (0.3)
Parts, service and collision repair (23.5) (24.0) (5.9)
Segment gross profit
 43.7  50.3  16.8 
Selling, general and administrative expenses:
Compensation (25.7) (27.7) (8.9)
Advertising (1.7) (1.8) (0.6)
Rent 0.9  0.5  — 
Other (1)
 (9.4) (9.9) (2.8)
Depreciation and amortization (4.2) (3.4) (1.0)
Other income (expense):
Interest expense, floor plan (2.1) (0.6) — 
Interest expense, other, net (2.6) (1.7) (1.0)
Other income (expense), net —  —  0.2
Segment income (loss)
 $ (1.1) $ 5.7  $ 2.7 
(1) Other selling, general and administrative expenses include various fixed and variable expenses, including gain on disposal of franchises, certain customer-related costs such as gasoline and service loaners, and insurance, training, legal and information technology expenses.

Year Ended December 31,
2024 2023 2022
Segment Income (Loss) (1): (In millions)
Franchised Dealerships Segment (2) $ 257.6  $ 448.0  $ 641.6 
EchoPark Segment (3) 3.5  (132.5) (133.9)
Powersports Segment (4)
 (1.1) 5.7  2.7 
Total segment income (loss) $ 260.0  $ 321.2  $ 510.4 
Impairment charges (5)
 (3.9) (79.3) (320.4)
Income (loss) before taxes $ 256.1  $ 241.9  $ 190.0 
(1)Segment income (loss) for each segment is defined as income (loss) before taxes and impairment charges.
(2)For 2024, amount includes approximately $13.0 million of pre-tax charges related to excess compensation as a result of the CDK outage, approximately $8.3 million of pre-tax charges related to storm damage, approximately $3.5 million of pre-tax gain related to the acquisition of the remaining equity interest in a joint venture, $10.0 million of pre-tax gain related to the CDK outage cyber claim payment, and approximately $2.2 million of pre-tax charges related to severance and long-term compensation expense. For 2023, amount includes approximately $20.9 million of pre-tax gain related to acquisitions and dispositions and approximately $1.9 million of pre-tax charges related to storm damage.
(3)For 2024, amount includes approximately $3.0 million of pre-tax gain on exit of leased properties, approximately $2.9 million of pre-tax charges for severance and long-term compensation expense, approximately $2.1 million of pre-tax gain on real estate dispositions, approximately $2.1 million of pre-tax charges related to closed store accrued expenses related to the indefinite suspension of operations at certain EchoPark locations, and approximately $0.4 million of pre-tax charges related to excess compensation as a result of the CDK outage. For 2023, amount includes approximately $10.0 million of pre-tax charges related to used vehicle inventory valuation adjustments, $5.1 million of pre-tax charges for long-term compensation expense, approximately $4.3 million of pre-tax lease exit charges and approximately $0.3 million of pre-tax loss related to acquisitions and dispositions.
(4)For 2024, amount includes approximately $0.5 million of pre-tax charges related to severance and long-term compensation expense.
(5)For 2024, amount includes approximately $1.2 million of pre-tax property and equipment charges for the Franchised Dealerships Segment and approximately $2.7 million of pre-tax property and equipment charges for real estate held for sale in the EchoPark Segment. For 2023, amount includes approximately $1.0 million of pre-tax franchise asset and property and equipment impairment charges for the Franchised Dealerships Segment and approximately $78.3 million of pre-tax impairment charges related to fixed assets, lease right-of-use assets, and other contractual obligations related to abandoned property for the EchoPark Segment. For the year ended December 31, 2022, amount includes approximately $115.5 million of pre-tax franchise asset and property and equipment impairment charges for the Franchised Dealerships Segment and $204.9 million of pre-tax goodwill and franchise asset impairment charges for the EchoPark Segment.
Year Ended December 31,
2024 2023 2022
(In millions)
Capital expenditures:
Franchised Dealerships Segment $ 182.4  $ 181.4  $ 130.3 
EchoPark Segment 1.0  15.3  96.6 
Powersports Segment 3.9  6.9  0.2 
Total capital expenditures $ 187.3  $ 203.6  $ 227.1 
 
December 31,
2024 2023
(In millions)
Assets:
Franchised Dealerships Segment $ 5,044.5  $ 4,455.8 
EchoPark Segment 574.5  667.9 
Powersports Segment 232.7  212.0 
Corporate and other:
Cash and cash equivalents 44.0  28.9 
Total assets $ 5,895.7  $ 5,364.6