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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________
FORM 10-Q
______________________________________
(Mark One)
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2019
OR
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File Number: 1-13395
______________________________________
SONIC AUTOMOTIVE, INC.
(Exact name of registrant as specified in its charter)
______________________________________
Delaware
56-2010790
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)

4401 Colwick Road
28211
Charlotte,North Carolina
(Address of principal executive offices)(Zip Code)
(704) 566-2400
(Registrant’s telephone number, including area code)
______________________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, par value $0.01 per shareSAHNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes ☒    No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filer☐  Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  
As of July 24, 2019, there were 31,099,439 shares of the registrant’s Class A Common Stock and 12,029,375 shares of the registrant’s Class B Common Stock outstanding.




UNCERTAINTY OF FORWARD-LOOKING STATEMENTS AND INFORMATION
This Quarterly Report on Form 10-Q contains, and written or oral statements made from time to time by us or by our authorized officers may contain, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements address our future objectives, plans and goals, as well as our intent, beliefs and current expectations regarding future operating performance, results and events, and can generally be identified by words such as “may,” “will,” “should,” “believe,” “expect,” “estimate,” “anticipate,” “intend,” “plan,” “foresee” and other similar words or phrases.
These forward-looking statements are based on our current estimates and assumptions and involve various risks and uncertainties. As a result, you are cautioned that these forward-looking statements are not guarantees of future performance, and that actual results could differ materially from those projected in these forward-looking statements. Factors which may cause actual results to differ materially from our projections include those risks described in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2018 and in “Item 1A. Risk Factors” of this report and elsewhere herein, as well as:
the number of new and used vehicles sold in the United States as compared to our expectations and the expectations of the market;
our ability to generate sufficient cash flows or to obtain additional financing to fund our EchoPark expansion, capital expenditures, our share repurchase program, dividends on our common stock, acquisitions and general operating activities;
our business and growth strategies, including, but not limited to, our EchoPark store operations;
the reputation and financial condition of vehicle manufacturers whose brands we represent, the financial incentives vehicle manufacturers offer and their ability to design, manufacture, deliver and market their vehicles successfully;
our relationships with manufacturers, which may affect our ability to obtain desirable new vehicle models in inventory or to complete additional acquisitions or dispositions;
the adverse resolution of one or more significant legal proceedings against us or our franchised dealerships or EchoPark stores;
changes in laws and regulations governing the operation of automobile franchises, accounting standards, taxation requirements and environmental laws;
changes in vehicle and parts import quotas, duties, tariffs or other restrictions;
general economic conditions in the markets in which we operate, including fluctuations in interest rates, employment levels, the level of consumer spending and consumer credit availability;
high competition in the retail automotive industry, which not only creates pricing pressures on the products and services we offer, but also on businesses we may seek to acquire;
our ability to successfully integrate potential future acquisitions; and
the rate and timing of overall economic recovery or decline.
These forward-looking statements speak only as of the date of this report or when made, and we undertake no obligation to revise or update these statements to reflect subsequent events or circumstances, except as required under the federal securities laws and the rules and regulations of the Securities and Exchange Commission.




SONIC AUTOMOTIVE, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2019

TABLE OF CONTENTS
Page
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 6.




PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
SONIC AUTOMOTIVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2019201820192018
(Dollars and shares in thousands, except per share amounts)
Revenues:
New vehicles$1,204,754 $1,238,571 $2,271,088 $2,419,416 
Used vehicles885,627 762,572 1,705,992 1,471,618 
Wholesale vehicles50,039 53,748 104,810 119,148 
Total vehicles2,140,420 2,054,891 4,081,890 4,010,182 
Parts, service and collision repair355,312 346,754 696,742 698,512 
Finance, insurance and other, net118,349 104,104 224,587 197,829 
Total revenues2,614,081 2,505,749 5,003,219 4,906,523 
Cost of Sales:
New vehicles(1,148,354)(1,181,303)(2,160,892)(2,305,349)
Used vehicles(848,898)(725,263)(1,632,256)(1,397,538)
Wholesale vehicles(50,752)(57,105)(106,789)(126,929)
Total vehicles(2,048,004)(1,963,671)(3,899,937)(3,829,816)
Parts, service and collision repair(184,766)(179,703)(362,960)(361,833)
Total cost of sales(2,232,770)(2,143,374)(4,262,897)(4,191,649)
Gross profit381,311 362,375 740,322 714,874 
Selling, general and administrative expenses(294,532)(277,462)(541,626)(582,387)
Impairment charges (10,317)(1,952)(13,960)
Depreciation and amortization(23,806)(23,949)(46,456)(47,692)
Operating income (loss)62,973 50,647 150,288 70,835 
Other income (expense):
Interest expense, floor plan(12,518)(11,945)(25,744)(22,622)
Interest expense, other, net(13,628)(13,375)(26,481)(26,831)
Other income (expense), net(5)17 95 106 
Total other income (expense)(26,151)(25,303)(52,130)(49,347)
Income (loss) from continuing operations before taxes36,822 25,344 98,158 21,488 
Provision for income taxes for continuing operations - benefit (expense)(10,071)(8,222)(29,058)(6,380)
Income (loss) from continuing operations26,751 17,122 69,100 15,108 
Discontinued operations:
Income (loss) from discontinued operations before taxes(213)(297)(393)(545)
Provision for income taxes for discontinued operations - benefit (expense)61 80 114 148 
Income (loss) from discontinued operations(152)(217)(279)(397)
Net income (loss)$26,599 $16,905 $68,821 $14,711 
Basic earnings (loss) per common share:
Earnings (loss) per share from continuing operations$0.62 $0.40 $1.61 $0.35 
Earnings (loss) per share from discontinued operations  (0.01)(0.01)
Earnings (loss) per common share$0.62 $0.40 $1.60 $0.34 
Weighted-average common shares outstanding43,066 42,662 42,953 42,725 
Diluted earnings (loss) per common share:
Earnings (loss) per share from continuing operations$0.62 $0.40 $1.60 $0.35 
Earnings (loss) per share from discontinued operations(0.01)(0.01) (0.01)
Earnings (loss) per common share$0.61 $0.39 $1.60 $0.34 
Weighted-average common shares outstanding43,230 42,920 43,060 42,948 

 See notes to unaudited condensed consolidated financial statements.


1


SONIC AUTOMOTIVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

Three Months Ended June 30,Six Months Ended June 30,
2019201820192018
(Dollars in thousands)
Net income (loss)$26,599 $16,905 $68,821 $14,711 
Other comprehensive income (loss) before taxes:
Change in fair value of interest rate swap and interest rate cap agreements(1,400)1,197 (3,748)5,203 
Amortization of terminated interest rate swap agreements(632) (921) 
Total other comprehensive income (loss) before taxes(2,032)1,197 (4,669)5,203 
Provision for income tax benefit (expense) related to components of other comprehensive income (loss)620 (326)1,396 (1,418)
Other comprehensive income (loss)(1,412)871 (3,273)3,785 
Comprehensive income (loss)$25,187 $17,776 $65,548 $18,496 



 See notes to unaudited condensed consolidated financial statements.


2


SONIC AUTOMOTIVE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)


June 30, 2019December 31, 2018
(Dollars in thousands)
ASSETS
Current Assets:
Cash and cash equivalents$2,140 $5,854 
Receivables, net364,026 438,186 
Inventories1,521,567 1,528,461 
Other current assets133,445 20,886 
Total current assets2,021,178 1,993,387 
Property and Equipment, net1,130,942 1,178,489 
Goodwill487,306 509,592 
Other Intangible Assets, net64,300 69,705 
Operating Right-of-Use Lease Assets333,525  
Finance Right-of-Use Lease Assets38,928  
Other Assets43,148 45,634 
Total Assets$4,119,327 $3,796,807 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Notes payable - floor plan - trade$753,239 $821,074 
Notes payable - floor plan - non-trade714,609 712,966 
Trade accounts payable128,579 114,263 
Operating short-term lease liabilities44,477  
Finance short-term lease liabilities5,150  
Accrued interest12,518 13,417 
Other accrued liabilities243,869 257,823 
Current maturities of long-term debt62,968 26,304 
Total current liabilities1,965,409 1,945,847 
Long-Term Debt851,283 918,779 
Other Long-Term Liabilities68,265 75,887 
Operating Long-Term Lease Liabilities299,009  
Finance Long-Term Lease Liabilities36,220  
Deferred Income Taxes23,416 33,178 
Commitments and Contingencies
Stockholders’ Equity:
Class A Convertible Preferred Stock, none issued  
Class A Common Stock, $0.01 par value; 100,000,000 shares authorized; 64,728,106 shares issued and 31,099,439 shares outstanding at June 30, 2019; 64,197,385 shares issued and 30,721,226 shares outstanding at December 31, 2018647 642 
Class B Common Stock, $0.01 par value; 30,000,000 shares authorized; 12,029,375 shares issued and outstanding at June 30, 2019 and December 31, 2018121 121 
Paid-in capital750,532 745,052 
Retained earnings723,469 670,691 
Accumulated other comprehensive income (loss)960 4,233 
Treasury stock, at cost; 33,628,667 Class A Common Stock shares held at June 30, 2019 and 33,476,159 Class A Common Stock shares held at December 31, 2018(600,004)(597,623)
Total Stockholders’ Equity875,725 823,116 
Total Liabilities and Stockholders’ Equity$4,119,327 $3,796,807 

 See notes to unaudited condensed consolidated financial statements.


3


SONIC AUTOMOTIVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)


Class A
Common Stock
Class A
Treasury Stock
Class B
Common Stock
Paid-In CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total Stockholders’ Equity
SharesAmountSharesAmountSharesAmount
(Dollars and shares in thousands, except per share amounts)
Balance at March 31, 201864,085 $641 (33,443)$(596,962)12,029 $121 $736,161 $624,535 $4,221 $768,717 
Shares awarded under stock compensation plans41  — — — — 2 — — 2 
Purchases of treasury stock— — (1)(19)— — — — — (19)
Change in fair value of interest rate swap and interest rate cap agreements, net of tax expense of $288— — — — — — — — 871 871 
Restricted stock amortization— — — — — — 3,049 — — 3,049 
Net income (loss)— — — — — — — 16,905 — 16,905 
Class A dividends declared ($0.06)— — — — — — — (1,537)— (1,537)
Class B dividends declared ($0.06)— — — — — — — (1,008)— (1,008)
Balance at June 30, 201864,126 $641 (33,444)$(596,981)12,029 $121 $739,212 $638,895 $5,092 $786,980 



Class A
Common Stock
Class A
Treasury Stock
Class B
Common Stock
Paid-In CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total Stockholders’ Equity
SharesAmountSharesAmountSharesAmount
(Dollars and shares in thousands, except per share amounts)
Balance at March 31, 201964,677 $647 (33,625)$(599,956)12,029 $121 $747,920 $701,182 $2,372 $852,286 
Shares awarded under stock compensation plans51  — — — —  — —  
Purchases of treasury stock— — (4)(48)— — — — — (48)
Change in fair value of interest rate swap and interest rate cap agreements, net of tax benefit of $620— — — — — — — — (1,412)(1,412)
Restricted stock amortization— — — — — — 2,612 — — 2,612 
Net income (loss)— — — — — — — 26,599 — 26,599 
Class A dividends declared ($0.10)— — — — — — — (3,109)— (3,109)
Class B dividends declared ($0.10)— — — — — — — (1,203)— (1,203)
Balance at June 30, 201964,728 $647 (33,629)$(600,004)12,029 $121 $750,532 $723,469 $960 $875,725 
















 See notes to unaudited condensed consolidated financial statements.


4


SONIC AUTOMOTIVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)

Class A
Common Stock
Class A
Treasury Stock
Class B
Common Stock
Paid-In CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total Stockholders’ Equity
SharesAmountSharesAmountSharesAmount
(Dollars and shares in thousands, except per share amounts)
Balance at December 31, 201763,457 $635 (32,290)$(573,513)12,029 $121 $732,854 $625,356 $1,307 $786,760 
Shares awarded under stock compensation plans669 6 — — — — 347 — — 353 
Purchases of treasury stock— — (1,154)(23,468)— — — — — (23,468)
Change in fair value of interest rate swap and interest rate cap agreements, net of tax expense of $1,418— — — — — — — — 3,785 3,785 
Restricted stock amortization— — — — — — 6,011 — — 6,011 
Net income (loss)— — — — — — — 14,711 — 14,711 
Cumulative effect of change in accounting principle— — — — — — — 3,918 — 3,918 
Class A dividends declared ($0.06)— — — — — — — (3,646)— (3,646)
Class B dividends declared ($0.06)— — — — — — — (1,444)— (1,444)
Balance at June 30, 201864,126 $641 (33,444)$(596,981)12,029 $121 $739,212 $638,895 $5,092 $786,980 

Class A
Common Stock
Class A
Treasury Stock
Class B
Common Stock
Paid-In CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total Stockholders’ Equity
SharesAmountSharesAmountSharesAmount
(Dollars and shares in thousands, except per share amounts)
Balance at December 31, 201864,197 $642 (33,476)$(597,623)12,029 $121 $745,052 $670,691 $4,233 $823,116 
Shares awarded under stock compensation plans531 5 — — — — 54 — — 59 
Purchases of treasury stock— — (153)(2,381)— — — — — (2,381)
Change in fair value of interest rate swap and interest rate cap agreements, net of tax benefit of $1,396— — — — — — — — (3,273)(3,273)
Restricted stock amortization— — — — — — 5,426 — — 5,426 
Net income (loss)— — — — — — — 68,821 — 68,821 
Cumulative effect of change in accounting principle (1)— — — — — — — (7,428)— (7,428)
Class A dividends declared ($0.10)— — — — — — — (6,209)— (6,209)
Class B dividends declared ($0.10)— — — — — — — (2,406)— (2,406)
Balance at June 30, 201964,728 $647 (33,629)$(600,004)12,029 $121 $750,532 $723,469 $960 $875,725 
(1) See Note 1, “Summary of Significant Accounting Policies,” for further discussion.
 See notes to unaudited condensed consolidated financial statements.


5


SONIC AUTOMOTIVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30,
20192018
(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)$68,821 $14,711 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization of property and equipment44,881 47,689 
Provision for bad debt expense205 283 
Other amortization3 310 
Debt issuance cost amortization1,189 1,217 
Stock-based compensation expense5,426 6,011 
Deferred income taxes(5,560)(6,188)
Net distributions from equity investee205 162 
Asset impairment charges1,952 13,960 
Loss (gain) on disposal of dealerships and property and equipment(46,065)(41,439)
Loss (gain) on exit of leased dealerships(170)2,564 
Changes in assets and liabilities that relate to operations:
Receivables82,537 151,391 
Inventories(31,566)(73,100)
Other assets(65,637)500 
Notes payable - floor plan - trade(67,835)(59,738)
Trade accounts payable and other liabilities(45,245)(20,225)
Total adjustments(125,680)23,397 
Net cash provided by (used in) operating activities(56,859)38,108 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of land, property and equipment(51,234)(99,602)
Proceeds from sales of property and equipment2,301 12,584 
Proceeds from sales of dealerships121,337 122,404 
Net cash provided by (used in) investing activities72,404 35,386 
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (repayments) borrowings on notes payable - floor plan - non-trade1,643 11,135 
Borrowings on revolving credit facilities303,235 514,915 
Repayments on revolving credit facilities(303,235)(572,519)
Proceeds from issuance of long-term debt 21,072 
Debt issuance costs2 (131)
Principal payments and repurchase of long-term debt(11,715)(18,344)
Purchases of treasury stock(2,381)(23,468)
Issuance of shares under stock compensation plans59 353 
Dividends paid(6,867)(4,705)
Net cash provided by (used in) financing activities(19,259)(71,692)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS(3,714)1,802 
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR5,854 6,352 
CASH AND CASH EQUIVALENTS, END OF PERIOD$2,140 $8,154 
SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES:
Change in fair value of interest rate swap and interest rate cap agreements (net of tax benefit of $1,396 in the six months ended June 30, 2019 and net of tax expense of $1,418 in the six months ended June 30, 2018)$(3,273)$3,785 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Interest, including amount capitalized$53,143 $48,355 
Income taxes$41,305 $18,682 


 See notes to unaudited condensed consolidated financial statements.


6

SONIC AUTOMOTIVE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
Basis of Presentation The accompanying condensed consolidated financial statements of Sonic Automotive, Inc. and its wholly owned subsidiaries (“Sonic,” the “Company,” “we,” “us” and “our”) for the three and six months ended June 30, 2019 and 2018 are unaudited and have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and applicable rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements reflect, in the opinion of management, all material normal recurring adjustments necessary to fairly state the financial position, results of operations and cash flows for the periods presented. The operating results for interim periods are not necessarily indicative of the results to be expected for the entire fiscal year or future interim periods, because the first quarter historically has contributed less operating profit than the second, third and fourth quarters. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in Sonic’s Annual Report on Form 10-K for the year ended December 31, 2018.
Recent Accounting Pronouncements – In February 2016, the Financial Accounting Standards Board (the “FASB”) established Accounting Standards Codification (“ASC”) 842, “Leases,” by issuing Accounting Standards Update (“ASU”) 2016-02 (and subsequent amendments via ASU 2018-01, ASU 2018-10 and ASU 2018-11) in order to increase transparency and comparability among organizations by recognizing operating lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Prior to adoption of the new lease standard, only leases classified as capital leases under ASC 840, “Leases,” were recorded in the consolidated balance sheets. Under ASC 842, “Leases,” an entity must classify leases as either finance leases (formerly capital leases) or operating leases, and a right-of-use asset (“ROU asset”) and lease liability are required to be recognized in the consolidated balance sheets for both finance and operating leases with a term longer than 12 months. The new lease standard requires a modified retrospective transition approach and provides an optional transition method to either (1) record current existing leases as of the effective date; or (2) record leases existing as of the earliest comparative period presented in the financial statements by recasting comparative period financial statements. We adopted the new lease standard as of January 1, 2019 using the effective date as our date of application. As such, financial statement information and disclosures required under the new lease standard have not been provided for dates and periods prior to January 1, 2019. The new lease standard provides for a number of optional practical expedients in transition, which include: (1) not requiring an entity to reassess prior conclusions about lease identification, lease classification or initial direct costs; (2) allowing an entity to use a portfolio approach for similar lease assets; (3) allowing an entity to elect an accounting policy to choose not to separate non-lease components of an agreement from lease components (by asset class); (4) allowing the use of hindsight in estimating lease term or assessing impairment of ROU assets; and (5) not requiring an entity to reassess prior conclusions about land easements. We have elected all of the practical expedients permitted under the transition guidance within the new lease standard. The new lease standard also provides practical expedients for ongoing accounting. We have elected the short-term lease recognition exemption for our real estate and equipment leases, which means that for those leases that qualify (less than 1-year term), we will not recognize ROU assets or lease liabilities. We have also elected not to separate non-lease components of an agreement from lease components (by asset class).
The cumulative effect of the adoption of ASC 842, “Leases,” on our unaudited condensed consolidated balance sheet as of January 1, 2019 was the recognition of ROU assets of approximately $406.9 million (including approximately $18.9 million related to capital leases that was reclassified from property and equipment, net in the accompanying unaudited condensed consolidated balance sheet as of December 31, 2018) and lease liabilities of approximately $419.5 million (including approximately $20.6 million related to capital leases that was reclassified from current maturities of long-term debt and long-term debt in the accompanying unaudited condensed consolidated balance sheet as of December 31, 2018). Upon adoption of ASC 842, “Leases,” we evaluated ROU assets for impairment and determined that approximately $10.5 million of impairment was required related to newly recognized ROU assets that would have been impaired in previous periods. This impairment of the ROU asset as of January 1, 2019 was recorded, net of related income tax effects, as a $7.4 million reduction of beginning retained earnings. The adoption of ASC 842, “Leases,” did not have a material effect on our unaudited condensed consolidated statements of income or our unaudited condensed consolidated statements of cash flows. The effect of the adoption of ASC 842, “Leases,” on our unaudited condensed consolidated balance sheets as of January 1, 2019 and June 30, 2019 was as follows:

7

SONIC AUTOMOTIVE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Before Impact of ASC 842Effects of Adoption of ASC 842After Impact of ASC 842
December 31, 2018January 1, 2019
Balance Sheet(In thousands)
Assets:
Property and Equipment, net$1,178,489 $(18,948)$1,159,541 
Other Intangible Assets, net69,705(4,005)65,700 
Right-of-Use Assets 406,918 406,918 
Liabilities:
Current lease liabilities$ $48,832 $48,832 
Other accrued liabilities257,823 (1,987)