Segment Information

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Segment Information

9. Segment Information

As of March 31, 2024, 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 months ended March 31, 2024 and 2023 were as follows:

	Three Months Ended March 31,
	2024		2023
	(In millions)
Segment Revenues:
Franchised Dealerships Segment revenues:
Retail new vehicles	$	1,439.9	$	1,421.0
Fleet new vehicles	19.6		18.8
Total new vehicles	1,459.5		1,439.8
Used vehicles	729.3		767.6
Wholesale vehicles	48.6		58.4
Parts, service and collision repair	439.9		423.8
Finance, insurance and other, net	119.6		117.1
Franchised Dealerships Segment revenues	$	2,796.9	$	2,806.7
EchoPark Segment revenues:
Retail new vehicles	$	—	$	1.0
Used vehicles	482.9		572.5
Wholesale vehicles	28.6		27.0
Finance, insurance and other, net	47.9		50.0
EchoPark Segment revenues	$	559.4	$	650.5
Powersports Segment revenues:
Retail new vehicles	$	15.9	$	20.8
Used vehicles	3.4		4.8
Wholesale vehicles	0.1		0.2
Parts, service and collision repair	6.8		6.7
Finance, insurance and other, net	1.5		1.5
Powersports Segment revenues	$	27.7	$	34.0
Total consolidated revenues	$	3,384.0	$	3,491.2

	Three Months Ended March 31,
	2024		2023
	(In millions)
Segment Income (Loss) (1):
Franchised Dealerships Segment (2)	$	62.7	$	109.8
EchoPark Segment (3)	(2.9)		(46.8)
Powersports Segment	(2.3)		0.6
Total segment income	$	57.5	$	63.6
Impairment charges (4)	(1.0)		—
Income before taxes	$	56.5	$	63.6

(1)Segment income (loss) for each segment is defined as income (loss) before taxes and impairment charges.

(2)For the three months ended March 31, 2024, amount includes approximately $2.2 million of pre-tax charges for severance and long-term compensation expense and approximately $1.0 million of pre-tax impairment charges related to property and equipment.

(3)For the three months ended March 31, 2024, amount includes approximately $2.1 million of pre-tax charges for severance and long-term compensation expense and 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. For the three months ended March 31, 2023, amount includes approximately $2.0 million of pre-tax charges for long-term compensation expense.

(4)For the three months ended March 31, 2024, amount includes approximately $1.0 million of pre-tax property and equipment charges for the Franchised Dealerships Segment.

	Three Months Ended March 31,
	2024		2023
	(In millions)
Segment Impairment Charges:
Franchised Dealerships Segment	$	1.0	$	—
EchoPark Segment	—		—
Powersports Segment	—		—
Total impairment charges	$	1.0	$	—

	Three Months Ended March 31,
	2024		2023
	(In millions)
Segment Depreciation and Amortization:
Franchised Dealerships Segment	$	29.8	$	26.5
EchoPark Segment	5.5		7.0
Powersports Segment	1.0		0.8
Total depreciation and amortization	$	36.3	$	34.3

	Three Months Ended March 31,
	2024		2023
	(In millions)
Segment Floor Plan Interest Expense:
Franchised Dealerships Segment	$	16.0	$	9.9
EchoPark Segment	3.8		4.6
Powersports Segment	0.5		0.1
Total floor plan interest expense	$	20.3	$	14.6

	Three Months Ended March 31,
	2024		2023
	(In millions)
Segment Interest Expense, Other, Net:
Franchised Dealerships Segment	$	27.8	$	26.9
EchoPark Segment	0.7		0.9
Powersports Segment	0.5		0.6
Total interest expense, other, net	$	29.0	$	28.4

	Three Months Ended March 31,
	2024		2023
	(In millions)
Segment Capital Expenditures:
Franchised Dealerships Segment	$	43.0	$	31.0
EchoPark Segment	0.4		5.7
Powersports Segment	0.4		0.5
Total capital expenditures	$	43.8	$	37.2

	March 31, 2024		December 31, 2023
	(In millions)
Segment Assets:
Franchised Dealerships Segment	$	4,214.1	$	4,110.8
EchoPark Segment	638.2		667.9
Powersports Segment	220.2		212.0
Corporate and other:
Cash and cash equivalents	15.1		28.9
Floor plan deposit balance	320.0		345.0
Total assets	$	5,407.6	$	5,364.6