Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 27, 2022 | |
Document Information [Line Items] | ||
Entity Registrant Name | SONIC AUTOMOTIVE, INC. | |
Entity Central Index Key | 0001043509 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q/A | |
Current Fiscal Year End Date | --12-31 | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | SAH | |
Amendment Flag | true | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
City Area Code | (704) | |
Entity Address, Address Line One | 4401 Colwick Road | |
Entity Address, Postal Zip Code | 28211 | |
Entity Tax Identification Number | 56-2010790 | |
Local Phone Number | 566-2400 | |
Entity File Number | 1-13395 | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Entity Address, City or Town | Charlotte, | |
Entity Address, State or Province | NC | |
Document Quarterly Report | true | |
Error Correction | EXPLANATORY NOTE Unless the context requires otherwise, references to “we,” “us,” “our,” and “Sonic,” refer to Sonic Automotive, Inc. and its subsidiaries. We have prepared this Amendment No. 1 (this “Amendment”) to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, which was originally filed with the Securities and Exchange Commission on April 28, 2022 (the “Original 10-Q”) to reflect the restatement of our previously issued Condensed Consolidated Statements of Operations for the quarter ended March 31, 2022. As required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, new certifications by Sonic’s principal executive officer and principal financial officer are filed as exhibits 31.1, 31.2, 32.1 and 32.2 to this Form 10-Q/A. Internal Control over Financial Reporting In connection with this restatement, Sonic has re-evaluated the effectiveness of our disclosure controls and procedures for the three months ended March 31, 2022. Management has concluded that, in light of the error described below, a material weakness exists in our internal control over financial reporting related to the revenue recognition process at a single dealership acquired in December 2021. Based upon such re-evaluation, and due to such material weakness, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of March 31, 2022. For a discussion of management’s evaluation of the Company’s disclosures controls and procedures, internal control over financial reporting, and the material weakness identified, refer to Controls and Procedures in Part I, Item 4. Background of the Restatement On October 28, 2022, we filed a Current Report on Form 8-K under Item 4.02 with the Securities and Exchange Commission relating to previously issued financial statements as described below. As indicated in the Current Report on Form 8-K under Item 4.02, we determined that a restatement was necessary due to the effect of an error in our the Company's unaudited Condensed Consolidated Statement of Operations for the three months ended March 31, 2022. The impact on the 2021 consolidated financial statements was immaterial. During the quarter ended September 30, 2022, we identified an error related to the revenue recognition process at a single dealership acquired in December 2021. Specifically, we did not correctly apply the guidance in ASC 606 Revenue from Contracts with Customers related to transactions which required net reporting of certain fleet sales transactions within the Condensed Consolidated Statements of Operations. The effect of the error was an overstatement of fleet revenue and an equal overstatement of fleet cost of sales and associated subtotals. No other financial statements were affected and there was no impact on note disclosures, unless related to the items in the table below. The tables below reflect the sections of the Sonic’s condensed consolidated statements of operations that were impacted by the error. | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 27,530,283 | |
Class B common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 12,029,375 |
Details
Details | 3 Months Ended |
Mar. 31, 2022 | |
Document Information [Line Items] | |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Security Exchange Name | NYSE |
Entity Incorporation, State or Country Code | DE |
Document Transition Report | false |
Title of 12(b) Security | Class A Common Stock, par value $0.01 per share |
Entity Small Business | false |
Entity Emerging Growth Company | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) shares in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues: | ||
Revenues | $ 3,456,200,000 | $ 2,786,800,000 |
Cost of Sales: | ||
Cost of Sales | (2,884,900,000) | (2,385,900,000) |
Gross profit | 571,300,000 | 400,900,000 |
Selling, general and administrative expenses | (387,000,000) | (289,400,000) |
Depreciation and amortization | (29,900,000) | (23,600,000) |
Operating income (loss) | 154,400,000 | 87,900,000 |
Other income (expense): | ||
Interest expense, floor plan | (5,000,000) | (5,100,000) |
Interest expense, other, net | (20,800,000) | (10,300,000) |
Other income (expense), net | 300,000 | 100,000 |
Total other income (expense) | (25,500,000) | (15,300,000) |
Income (loss) from continuing operations before taxes | 128,900,000 | 72,600,000 |
Provision for income taxes for continuing operations - benefit (expense) | (31,600,000) | (18,900,000) |
Income (loss) from continuing operations | 97,300,000 | 53,700,000 |
Discontinued operations: | ||
Income (loss) from discontinued operations before taxes | 0 | 700,000 |
Provision for income taxes for discontinued operations - benefit (expense) | 0 | (200,000) |
Income (loss) from discontinued operations | 0 | 500,000 |
Net income (loss) | $ 97,300,000 | $ 54,200,000 |
Basic earnings (loss) per common share: | ||
Earnings (loss) per share from continuing operations (usd per share) | $ 2.41 | $ 1.29 |
Earnings (loss) per share from discontinued operations (usd per share) | 0 | 0.02 |
Earnings (loss) per common share (usd per share) | $ 2.41 | $ 1.31 |
Weighted average common shares outstanding | 40,400 | 41,500 |
Diluted earnings (loss) per common share: | ||
Earnings (loss) per share from continuing operations (usd per share) | $ 2.33 | $ 1.23 |
Earnings (loss) per share from discontinued operations (usd per share) | 0 | 0.02 |
Earnings (loss) per common share (usd per share) | $ 2.33 | $ 1.25 |
Weighted average common shares outstanding | 41,800 | 43,500 |
Total vehicles | ||
Revenues: | ||
Revenues | $ 2,909,100,000 | $ 2,321,200,000 |
Cost of Sales: | ||
Cost of Sales | (2,691,000,000) | (2,220,000,000) |
New vehicles | ||
Revenues: | ||
Revenues | 1,369,500,000 | 1,156,300,000 |
Cost of Sales: | ||
Cost of Sales | (1,201,000,000) | (1,086,900,000) |
Used vehicles | ||
Revenues: | ||
Revenues | 1,370,900,000 | 1,090,100,000 |
Cost of Sales: | ||
Cost of Sales | (1,322,700,000) | (1,059,200,000) |
Wholesale vehicles | ||
Revenues: | ||
Revenues | 168,700,000 | 74,800,000 |
Cost of Sales: | ||
Cost of Sales | (167,300,000) | (73,900,000) |
Retail New Vehicles [Member] | ||
Revenues: | ||
Revenues | 1,351,300,000 | 1,134,000,000 |
Cost of Sales: | ||
Cost of Sales | (1,183,600,000) | (1,064,800,000) |
Fleet New Vehicles [Member] | ||
Revenues: | ||
Revenues | 18,200,000 | 22,300,000 |
Cost of Sales: | ||
Cost of Sales | (17,400,000) | (22,100,000) |
Parts, service and collision repair | ||
Revenues: | ||
Revenues | 380,500,000 | 320,900,000 |
Cost of Sales: | ||
Cost of Sales | (193,900,000) | (165,900,000) |
Finance, insurance and other, net | ||
Revenues: | ||
Revenues | $ 166,600,000 | $ 144,700,000 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 97,300 | $ 54,200 |
Other comprehensive income (loss) before taxes: | ||
Change in fair value of interest rate swap and interest rate cap agreements | 300 | 400 |
Total other comprehensive income (loss) before taxes | 300 | 400 |
Provision for income tax benefit (expense) related to components of other comprehensive income (loss) | (100) | (200) |
Other comprehensive income (loss) | 200 | 200 |
Comprehensive income (loss) | $ 97,500 | $ 54,400 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash and cash equivalents | $ 360,200 | $ 299,400 |
Receivables, net | 351,500 | 401,100 |
Inventories | 1,198,100 | 1,261,200 |
Other current assets | 150,800 | 122,400 |
Total current assets | 2,060,600 | 2,084,100 |
Property and Equipment, net | 1,488,600 | 1,458,800 |
Goodwill | 423,500 | 416,400 |
Other Intangible Assets, net | 486,600 | 480,200 |
Right-of-use asset | 293,600 | 293,200 |
Finance Lease, Right-of-Use Asset, after Accumulated Amortization | 193,700 | 179,900 |
Other Assets | 59,600 | 62,500 |
Total Assets | 5,006,200 | 4,975,100 |
Current Liabilities: | ||
Notes payable - floor plan - trade | 73,800 | 89,800 |
Notes payable - floor plan - non-trade | 1,122,300 | 1,178,600 |
Trade accounts payable | 124,200 | 133,300 |
Operating Lease, Liability, Current | 37,000 | 36,200 |
Finance Lease, Liability, Current | 52,500 | 52,700 |
Other accrued liabilities | 406,300 | 350,500 |
Current maturities of long-term debt | 53,100 | 50,600 |
Total current liabilities | 1,869,200 | 1,891,700 |
Long-Term Debt | 1,493,200 | 1,510,700 |
Other Long-Term Liabilities | 94,100 | 96,000 |
Operating Lease, Liability, Noncurrent | 263,800 | 264,800 |
Finance Lease, Liability, Noncurrent | 150,900 | 135,500 |
Commitments and Contingencies | ||
Stockholders' Equity: | ||
Class A convertible preferred stock, none issued | 0 | 0 |
Paid-in capital | 795,100 | 790,200 |
Retained Earnings (Accumulated Deficit) | 1,138,900 | 1,051,700 |
Accumulated other comprehensive income (loss) | (1,100) | (1,300) |
Treasury stock, at cost; 33,476,159 Class A common stock shares held at September 30, 2018 and 32,290,493 Class A common stock shares held at December 31, 2017 | (798,700) | (765,000) |
Total Stockholders' Equity | 1,135,000 | 1,076,400 |
Total Liabilities and Stockholders' Equity | 5,006,200 | 4,975,100 |
Class A Common Stock | ||
Stockholders' Equity: | ||
Common stock, value | 700 | 700 |
Class B common stock | ||
Stockholders' Equity: | ||
Common stock, value | $ 100 | $ 100 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Convertible preferred stock issued | 0 | 0 |
Class A Common Stock | ||
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 67,016,735 | 66,501,072 |
Common stock, shares outstanding | 28,516,272 | 28,692,532 |
Treasury stock, shares | 38,500,463 | 37,808,540 |
Class B common stock | ||
Common stock, par value (usd per share) | $ 0.01 | |
Common stock, shares authorized | 30,000,000 | |
Common stock, shares issued | 12,029,375 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Class A Common Stock | Class A Common Stock Common Stock | Class A Common Stock Treasury Stock | Class A Common Stock Retained Earnings | Class B Common Stock | Class B Common Stock Common Stock | Class B Common Stock Retained Earnings |
Beginning balance at Dec. 31, 2020 | $ 814,800 | $ 767,500 | $ 721,800 | $ (3,600) | $ 700 | $ (671,700) | $ 100 | ||||
Beginning balance (shares) at Dec. 31, 2020 | 65,600 | 35,800 | 12,000 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Shares awarded under stock compensation plan | 0 | 0 | $ 0 | ||||||||
Shares awarded under stock compensation plan (shares) | 400 | ||||||||||
Purchase of treasury stock | (42,200) | $ (42,200) | |||||||||
Purchases of treasury stock (shares) | (1,000) | ||||||||||
Change in fair value of interest rate swap and interest rate cap agreements, net of tax expense of $1,563 | 200 | 200 | |||||||||
Restricted stock amortization | 3,500 | 3,500 | |||||||||
Net income (loss) | 54,200 | 54,200 | |||||||||
Dividends, Common Stock | $ 2,900 | $ 2,900 | $ 1,200 | $ 1,200 | |||||||
Ending balance at Mar. 31, 2021 | 826,400 | 771,000 | 771,900 | (3,400) | $ 700 | $ (713,900) | $ 100 | ||||
Ending balance (shares) at Mar. 31, 2021 | 66,000 | 36,800 | 12,000 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Dividends declared per common share (usd per share) | $ 0.1 | $ 0.1 | |||||||||
Retained Earnings (Accumulated Deficit) | 1,051,700 | ||||||||||
Beginning balance at Dec. 31, 2021 | 1,076,400 | 790,200 | 1,051,700 | (1,300) | $ 700 | $ (765,000) | $ 100 | ||||
Beginning balance (shares) at Dec. 31, 2021 | 66,500 | 37,800 | 12,000 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Shares awarded under stock compensation plan | 400 | 400 | $ 0 | ||||||||
Shares awarded under stock compensation plan (shares) | 500 | ||||||||||
Purchase of treasury stock | (33,700) | $ (33,700) | |||||||||
Purchases of treasury stock (shares) | (700) | ||||||||||
Change in fair value of interest rate swap and interest rate cap agreements, net of tax expense of $1,563 | 200 | 200 | |||||||||
Restricted stock amortization | 4,500 | ||||||||||
Net income (loss) | 97,300 | 97,300 | |||||||||
Dividends, Common Stock | $ 7,100 | $ 7,100 | $ 3,000 | $ 3,000 | |||||||
Ending balance at Mar. 31, 2022 | 1,135,000 | 795,100 | $ 1,138,900 | $ (1,100) | $ 700 | $ (798,700) | $ 100 | ||||
Ending balance (shares) at Mar. 31, 2022 | 67,000 | 38,500 | 12,000 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Dividends declared per common share (usd per share) | $ 0.25 | $ 0.25 | |||||||||
APIC, Share-based Payment Arrangement, Increase for Cost Recognition | $ 4,500 | ||||||||||
Retained Earnings (Accumulated Deficit) | $ 1,138,900 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ 97,300 | $ 54,200 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization of property and equipment | 27,000 | 22,200 |
Debt issuance cost amortization | 1,100 | 800 |
Stock-based compensation expense | 4,500 | 3,500 |
Deferred income taxes | (3,200) | (2,900) |
Other | (200) | 400 |
Changes in assets and liabilities that relate to operations: | ||
Receivables | 53,400 | (1,900) |
Inventories | 72,200 | 16,500 |
Other assets | (11,800) | 9,600 |
Notes payable - floor plan - trade | (16,000) | (46,500) |
Trade accounts payable and other liabilities | 28,200 | 34,400 |
Total adjustments | 155,200 | 36,100 |
Net cash provided by (used in) operating activities | 252,500 | 90,300 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of businesses, net of cash acquired | (28,400) | (8,800) |
Purchases of land, property and equipment | (58,800) | (67,700) |
Proceeds from sales of property and equipment | 6,900 | 900 |
Net cash provided by (used in) investing activities | (80,300) | (75,600) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net (repayments) borrowings on notes payable - floor plan - non-trade | 56,300 | (51,500) |
Borrowings on revolving credit facilities | 0 | 4,900 |
Repayments on revolving credit facilities | 0 | (4,900) |
Debt issuance costs | 200 | 0 |
Principal payments and repurchase of long-term debt | (15,800) | (9,000) |
Purchases of treasury stock | (33,700) | (42,200) |
Finance Lease, Principal Payments | 900 | 900 |
Issuance of shares under stock compensation plans | 400 | 0 |
Dividends paid | (4,900) | (4,200) |
Net cash provided by (used in) financing activities | (111,400) | (107,800) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 60,800 | (93,100) |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 299,400 | 170,300 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 360,200 | 77,200 |
Cash paid (received) during the period for: | ||
Interest, including amount capitalized | 10,700 | 19,100 |
Income taxes | $ 100 | $ (400) |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Cash Flows [Abstract] | ||
Tax effect on fair value of interest rate swap and rate cap agreements | $ 100 | $ 334 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Unusual Risks and Uncertainties | COVID-19 – The COVID-19 pandemic negatively impacted the global economy beginning in the first quarter of 2020 and continued to affect the global economy and supply chain. The impact on the economy initially affected both consumer demand and supply of manufactured goods as many countries around the world and states and municipalities in the U.S. mandated restrictions on citizen movements (i.e., shelter-in-place or stay-at-home orders) or on in-person retail trade or manufacturing activities at physical locations. The economic impact from the COVID-19 pandemic continues to impact our business. The global automotive supply chain has been significantly disrupted during the pandemic, primarily related to the production of semiconductors and other components that are used in many modern automobiles, in addition to workforce-related production delays and stoppages. As a result, automobile manufacturing is operating at lower than usual production levels, reducing the amount of new vehicle and certain parts inventory available to our dealerships. These inventory constraints, coupled with strong consumer demand and elevated levels of consumer savings, have led to low new and used vehicle inventory and a high new and used vehicle pricing environment, which drove lower retail new vehicle unit sales volumes across the industry. As a result of the pandemic and related shelter-in-place or stay-at-home orders, we transitioned many of our teammates to remote work arrangements. In situations where a teammate’s role did not permit remote work (e.g., service repair technicians), we implemented staggered work hours, social distancing and other safety measures to promote the health and safety of our teammates and guests. As a result of the systems and infrastructure we had in place prior to the pandemic, we were largely able to maintain our back-office operations, financial reporting and internal control processes with minimal disruption or changes in the effectiveness of such processes. All of our store operations were impacted by the COVID-19 pandemic to varying degrees. As of March 31, 2022, our stores remain subject to both external and self-imposed health and safety policies and practices that may affect the way we sell vehicles and interact with our guests in the future. State and local governmental restrictions on consumer and business activity may be tightened again if conditions related to the pandemic worsen as a result of future coronavirus variants. Recent Accounting Pronouncements – In March 2020, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2020-04, “Reference Rate Reform (Accounting Standards Codification (“ASC”) Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” ASU 2020-04 provides optional guidance for a limited period of time to ease the potential accounting impact associated with transitioning away from reference rates that are expected to be discontinued, such as the London InterBank Offered Rate (“LIBOR”). The amendments in this ASU apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued. The amendments in ASU 2020-04 could be adopted beginning January 1, 2020 and are effective through December 31, 2022. In January 2021, the FASB issued ASU 2021-01 which clarifies that certain optional expedients and exceptions in ASC Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. We do not currently have any contracts that have been modified, amended or renegotiated to accommodate a transition to a new reference rate, but we will continue to evaluate any such modifications or amendments to our contracts to determine the applicability of this standard on our consolidated financial statements and related financial statement disclosures. |
Error Correction Detail [Text Block] | Restatement of Previously Issued Condensed Consolidated Financial Statements – Subsequent to the issuance of the condensed consolidated financial statements as of and for the three months ended March 31, 2022 in our Quarterly Report on Form 10-Q for the first quarter of 2022, we identified an error in the application of ASC Topic 606, Revenue Recognition , related to principal accounting (gross accounting) versus agent accounting (net accounting) for certain fleet transactions from a newly acquired subsidiary. It was determined that we should have applied net accounting to certain fleet transactions where our previously issued condensed consolidated financial statements accounted for the transactions on a gross accounting basis. The result of this error overstated both fleet new vehicles revenues and fleet new vehicles cost of sales, along with the associated subtotals, in our previously issued condensed consolidated statements of operations. There was no impact to other financial statement line items or disclosures, unless related to the items in the table below. The impact on the 2021 consolidated financial statements was immaterial. We evaluated the effect of the corrections detailed in the tables below on the previously issued condensed consolidated financial statements, both individually and in the aggregate, in accordance with the guidance in ASC Topic 250, Accounting Changes and Error Corrections and concluded that the effect was material to the condensed consolidated financial statements for the three months ended March 31, 2022 . |
Business Acquisitions and Dispo
Business Acquisitions and Dispositions | 3 Months Ended |
Mar. 31, 2022 | |
Business Combinations [Abstract] | |
Business Acquisitions and Dispositions | 2. Business Acquisitions and Dispositions We acquired two franchised dealership locations during the three months ended March 31, 2022 for an aggregate gross purchase price (including inventory acquired and subsequently funded by floor plan notes payable) of approximately $28.4 million, including the impact of the RFJ Acquisition post-close adjustment. Of this amount, $13.7 million was related to the acquisition of the two franchised dealerships. The allocation of the $13.7 million aggregate gross purchase price for the acquisitions completed during the three months ended March 31, 2022 included inventory of $4.9 million, property and equipment of $0.1 million, franchise assets of $6.4 million, goodwill of $1.3 million, other assets of $1.1 million and other liabilities of $0.1 million. We did not acquire any businesses during the three months ended March 31, 2021. We did not dispose of any businesses during the three months ended March 31, 2022 and 2021. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of the following: March 31, 2022 December 31, 2021 (In millions) New vehicles $ 278.2 $ 273.1 Used vehicles 730.8 807.2 Service loaners 112.5 106.3 Parts, accessories and other 76.6 74.6 Net inventories $ 1,198.1 $ 1,261.2 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Capital expenditures in all periods were primarily related to real estate acquisitions, construction of new franchised dealerships and EchoPark stores, building improvements and equipment purchased for use in our franchised dealerships and EchoPark stores. Assets held for sale as of December 31, 2021 consists of real property not currently used in operations that we expect to dispose of in the next 12 months. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The changes in the carrying amount of goodwill for March 31, 2022 and December 31, 2021. March 31, 2022 December 31, 2021 (In millions) Carrying Amount of Goodwill: Franchised Dealerships Segment $ 219.8 213.5 EchoPark Segment 203.7 202.9 Total goodwill (1) $ 423.5 $ 416.4 (1) Net of accumulated impairment losses of $1.1 billion. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
2016 Credit Facilities [Text Block] | 2021 Credit Facilities On April 14, 2021, we entered into an amended and restated syndicated revolving credit facility (the “2021 Revolving Credit Facility”) and amended and restated syndicated new and used vehicle floor plan credit facilities (the “2021 Floor Plan Facilities” and, together with the 2021 Revolving Credit Facility, the “2021 Credit Facilities”). The amendment and restatement of the 2021 Credit Facilities extended the scheduled maturity dates to April 14, 2025. On October 8, 2021, we entered into an amendment to the 2021 Credit Facilities (the “Credit Facility Amendment”) to, among other things: (1) increase the aggregate commitments under the 2021 Revolving Credit Facility to the lesser of $350.0 million (which may be increased at the Company’s option up to $400.0 million upon satisfaction of certain conditions) and the applicable revolving borrowing base, and the 2021 Floor Plan Facilities to $2.6 billion (which, under certain conditions, may be increased at the Company’s option up to $2.85 billion that may be allocated between the new vehicle revolving floor plan facility and the used vehicle revolving floor plan facility that comprise the 2021 Floor Plan Facilities Plan Facility as the Company requests, with no more than 40% of the aggregate commitments allocated to the commitments under the used vehicle floor plan facility); and (2) permit the issuance of the 4.625% Notes and the 4.875% Notes. As amended, availability under the 2021 Revolving Credit Facility is calculated as the lesser of $350.0 million or a borrowing base calculated based on certain eligible assets, less the aggregate face amount of any outstanding letters of credit under the 2021 Revolving Credit Facility (the "2021 Revolving Borrowing Base"). The 2021 Revolving Credit Facility may be increase at our option up to $400.0 million upon satisfaction of certain conditions. As of March 31, 2022, the 2021 Revolving Borrowing Base was approximately $286.5 million based on balances as of such date. As of March 31, 2022, we had no outstanding borrowings and approximately $12.5 million in outstanding letters of credit under the 2021 Revolving Credit Facility, resulting in $274.0 million remaining borrowing availability under the 2021 Revolving Credit Facility. Our obligations under the 2021 Credit Facilities are guaranteed by us and certain of our subsidiaries and are secured by a pledge of substantially all of our and our subsidiaries’ assets. As of the dates presented in the accompanying unaudited condensed consolidated financial statements, the amounts outstanding under the 2021 Credit Facilities bear interest at variable rates based on specified percentages above LIBOR. We have agreed under the 2021 Credit Facilities not to pledge any assets to any third parties (other than those explicitly allowed to be pledged by the amended terms of the 2021 Credit Facilities), including other lenders, subject to certain stated exceptions, including floor plan financing arrangements. In addition, the 2021 Credit Facilities contain certain negative covenants, including covenants which could restrict or prohibit indebtedness, liens, the payment of dividends, capital expenditures and material dispositions and acquisitions of assets, as well as other customary covenants and default provisions. Specifically, the 2021 Credit Facilities permit quarterly cash dividends on our Class A and Class B Common Stock up to $0.25 per share so long as no Event of Default (as defined in the 2021 Credit Facilities) has |
6.125 Note Text Block [Text Block] | On October 27, 2021, we issued $650.0 million in aggregate principal amount of 4.625% Notes, which will mature on November 15, 2029. Sonic used the net proceeds from the issuance of the 4.625% Notes to fund the RFJ Acquisition and to repay existing debt. The 4.625% Notes were issued under an Indenture, dated as of October 27, 2021 (the “2029 Indenture”), by and among the Company, certain subsidiary guarantors named therein (collectively, the "Guarantors") and U.S. Bank National Association, as trustee (the “trustee”). The 4.625% Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis initially by all of the Company's operating domestic subsidiaries. The non-domestic operating subsidiary that is not a guarantor is considered minor. Under certain circumstances set forth in the 2029 Indenture, the guarantees of the certain subsidiaries of the Company comprising the EchoPark Business (as defined in the 2029 Indenture) may be released. The 2029 Indenture also provides substantial flexibility for the Company to enter into fundamental transactions involving the EchoPark Business. The 2029 Indenture provides that interest on the 4.625% Notes will be payable semi-annually in arrears on May 15 and November 15 of each year beginning May 15, 2022. The 2029 Indenture also contains other restrictive covenants and default provisions common for an issue of senior notes of this nature. The 4.625% Notes are redeemable by the Company under certain circumstances. For further discussion of the 4.625% Notes, see Note 6, “Long-Term Debt,” to the consolidated financial statements in Sonic’s Annual Report on Form 10-K for the year ended December 31, 2021. 4.875% Notes On October 27, 2021, we issued $500.0 million in aggregate principal amount of 4.875% Notes, which will mature on November 15, 2031. Sonic used the net proceeds from the issuance of the 4.875% Notes to fund the RFJ Acquisition and to repay existing debt. The 4.875% Notes were issued under an Indenture, dated as of October 27, 2021 (the “2031 Indenture”), by and among the Company, the Guarantors and the trustee. The 4.875% Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis initially by all of the Company's operating domestic subsidiaries. The non-domestic operating subsidiary that is not a guarantor is considered minor. Under certain circumstances set forth in the 2031 Indenture, the guarantees of the certain subsidiaries of the Company comprising the EchoPark Business (as defined in the 2031 Indenture) may be released. The 2031 Indenture also provides substantial flexibility for the Company to enter into fundamental transactions involving the Echo-Park Business. The 2031 Indenture provides that interest on the 4.875% Notes will be payable semi-annually in arrears on May 15 and November 15 of each year beginning May 15, 2022. The 2031 Indenture also contains other restrictive covenants and default provisions common for an issue of senior notes of this nature. The 4.875% Notes are redeemable by the Company under certain circumstances. For further discussion of the 4.875% Notes, see Note 6, “Long-Term Debt,” to the consolidated financial statements in Sonic’s Annual Report on Form 10-K for the year ended December 31, 2021. |
2019 Mortgage Facility Text Block [Text Block] | 2019 Mortgage Facility On November 22, 2019, we entered into a delayed draw-term loan credit agreement, which is scheduled to mature on November 22, 2024 (the “2019 Mortgage Facility”). On October 11, 2021, we entered into an amendment to the 2019 Mortgage Facility to permit the issuance of the 4.625% Notes and the 4.875% Notes. Under the 2019 Mortgage Facility, Sonic has a maximum borrowing limit of $112.2 million, which varies based on the appraised value of the collateral underlying the 2019 Mortgage Facility. The amount available for borrowing under the 2019 Mortgage Facility is subject to compliance with a borrowing base. The borrowing base is calculated based on 75% of the appraised value of certain eligible real estate designated by Sonic and owned by certain of our subsidiaries. Based on balances as of March 31, 2022, we had approximately $87.3 million of outstanding borrowings under the 2019 Mortgage Facility, resulting in total remaining borrowing availability of approximately $24.9 million under the 2019 Mortgage Facility. Amounts outstanding under the 2019 Mortgage Facility bear interest at (1) a specified rate above LIBOR (as defined in the 2019 Mortgage Facility), ranging from 1.50% to 2.75% per annum according to a performance-based pricing grid determined by the Company’s Consolidated Total Lease Adjusted Leverage Ratio (as defined in the 2019 Mortgage Facility) as of the last day of the immediately preceding fiscal quarter (the “Performance Grid”); or (2) a specified rate above the Base Rate (as defined in the 2019 Mortgage Facility), ranging from 0.50% to 1.75% per annum according to the Performance Grid. For further discussion of the 2019 Mortgage Facility, see Note 6, “Long-Term Debt,” to the consolidated financial statements in Sonic’s Annual Report on Form 10-K for the year ended December 31, 2021. |
Mortgage Notes Text Block [Text Block] | Mortgage Notes to Finance Companies As of March 31, 2022, the weighted-average interest rate of our other outstanding mortgage notes (excluding the 2019 Mortgage Facility) was 3.62% and the total outstanding mortgage principal balance of these notes (excluding the 2019 Mortgage Facility) was approximately $333.0 million. These mortgage notes require monthly payments of principal and interest through their respective maturities, are secured by the underlying properties and contain certain cross-default provisions. Maturity dates for these mortgage notes range between 2022 and 2033. |
2020 Line of Credit Text Block [Text Block] |
Per Share Data and Stockholders
Per Share Data and Stockholders' Equity | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Per Share Data and Stockholders' Equity | Earnings Per Share – |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Guarantees and Indemnifications In accordance with the terms of our operating lease agreements, our dealership subsidiaries, acting as lessees, generally agree to indemnify the lessor from certain exposure arising as a result of the use of the leased premises, including environmental exposure and repairs to leased property upon termination of the lease. In addition, we have generally agreed to indemnify the lessor in the event of a breach of the lease by the lessee. In connection with dealership dispositions and facility relocations, certain of our subsidiaries have assigned or sublet to the buyer their interests in real property leases associated with such dealerships. In general, the subsidiaries retain responsibility for the performance of certain obligations under such leases, including rent payments and repairs to leased property upon termination of the lease, to the extent that the assignee or the sublessee does not perform. In the event an assignee or a sublessee does not perform its obligations, Sonic remains liable for such obligations. In accordance with the terms of agreements entered into for the sale of our dealerships, we generally agree to indemnify the buyer from certain liabilities and costs arising subsequent to the date of sale, including environmental exposure and exposure resulting from the breach of representations or warranties made in accordance with the agreements. While our exposure with respect to environmental remediation and repairs is difficult to quantify, we did not have any exposure as of March 31, 2022 and had exposure of $4.0 million at December 31, 2021. These indemnifications typically expire within a period of one We also guarantee the floor plan commitments of our 50%-owned joint venture, and the amount of such guarantee was approximately $4.3 million at both March 31, 2022 and December 31, 2021. Legal Matters Sonic is involved, and expects to continue to be involved, in various legal and administrative proceedings arising out of the conduct of its business, including regulatory investigations and private civil actions brought by plaintiffs purporting to represent a potential class or for which a class has been certified. Although Sonic vigorously defends itself in all legal and administrative proceedings, the outcomes of pending and future proceedings arising out of the conduct of Sonic’s business, including litigation with customers, employment-related lawsuits, contractual disputes, class actions, purported class actions and actions brought by governmental authorities, cannot be predicted with certainty. An unfavorable resolution of one or more of these matters could have a material adverse effect on Sonic’s business, financial condition, results of operations, cash flows or prospects. Included in other accrued liabilities and other long-term liabilities in the accompanying unaudited condensed consolidated balance sheet as of March 31, 2022 and December 31, 2021 were approximately $1.6 million and $0.3 million, respectively, in reserves that Sonic was holding for pending proceedings. Except as reflected in such reserves, Sonic is currently unable to estimate a range of reasonably possible loss, or a range of reasonably possible loss in excess of the amount accrued, for pending proceedings. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 8. Fair Value Measurements Assets and liabilities recorded at fair value in the accompanying unaudited condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021 were as follows: Fair Value Based on Significant Other Observable Inputs (Level 2) March 31, 2022 December 31, 2021 (In millions) Assets: Cash surrender value of life insurance policies (1) $ 38.5 $ 39.5 Total assets $ 38.5 $ 39.5 Liabilities: Deferred compensation plan (2) $ 23.5 $ 24.4 Total liabilities $ 23.5 $ 24.4 (1) Included in other assets in the accompanying unaudited condensed consolidated balance sheets. (2) Included in other long-term liabilities in the accompanying unaudited condensed consolidated balance sheets. There were no instances during the three months ended March 31, 2022 which required a fair value measurement of assets ordinarily measured at fair value on a non-recurring basis. These assets will be evaluated as of the annual valuation assessment date of October 1, 2022 or as events or changes in circumstances require. As of March 31, 2022 and December 31, 2021, the fair values of Sonic’s financial instruments, including receivables, notes receivable from finance contracts, notes payable – floor plan, trade accounts payable, borrowings under the revolving credit facilities and certain mortgage notes, approximated their carrying values due either to length of maturity or existence of variable interest rates that approximate prevailing market rates. As of March 31, 2022 and December 31, 2021, the fair value and carrying value of Sonic’s significant fixed rate long-term debt were as follows: March 31, 2022 December 31, 2021 Fair Value Carrying Value Fair Value Carrying Value (In millions) 4.875% Notes (1) $ 443.8 $ 500.0 $ 504.8 $ 500.0 4.625% Notes (1) $ 580.1 $ 650.0 $ 655.9 $ 650.0 (1) As determined by market quotations from similar securities as of March 31, 2022 and December 31, 2021, respectively (Level 2). For further discussion of Sonic’s fair value measurements, see Note 11, “Fair Value Measurements,” to the consolidated financial statements in Sonic’s Annual Report on Form 10-K for the year ended December 31, 2021. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss)For further discussion of Sonic’s accumulated other comprehensive income (loss), see Note 13, “Accumulated Other Comprehensive Income (Loss),” to the consolidated financial statements in Sonic’s Annual Report on Form 10-K for the year ended December 31, 2021. For further discussion of Sonic’s defined benefit pension plan, see Note 10, “Employee Benefit Plans,” to the consolidated financial statements in Sonic’s Annual Report on Form 10-K for the year ended December 31, 2021. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | 9. Segment Information As of March 31, 2022, 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 pre-owned 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 months ended March 31, 2022 and 2021 were as follows (as restated, see Note 1, “Summary of Significant Accounting Policies”: Three Months Ended March 31, 2022 2021 (In millions) As Restated Segment Revenues: Franchised Dealerships Segment revenues: Retail new vehicles $ 1,345.7 $ 1,134.0 Fleet new vehicles 18.2 22.3 Total new vehicles 1,363.9 1,156.3 Used vehicles 853.7 661.5 Wholesale vehicles 106.3 56.2 Parts, service and collision repair 380.5 308.1 Finance, insurance and other, net 126.5 97.6 Franchised Dealerships Segment revenues $ 2,830.9 2279.7 EchoPark Segment revenues: Retail new vehicles $ 5.6 — Used vehicles 517.2 441.4 Wholesale vehicles 62.4 18.6 Finance, insurance and other, net 40.1 47.1 EchoPark Segment revenues $ 625.3 $ 507.1 Total consolidated revenues $ 3,456.2 $ 2,786.8 Three Months Ended March 31, 2022 2021 (In millions) Segment Income (Loss) (1): Franchised Dealerships Segment $ 163.8 $ 70.6 EchoPark Segment (34.9) 2.0 Income from continuing operations before taxes $ 128.9 $ 72.6 (1) Segment income (loss) for each segment is defined as income (loss) from continuing operations before taxes and impairment charges. Three Months Ended March 31, 2022 2021 (In millions) Depreciation and Amortization: Franchised Dealerships Segment $ 24.9 $ 20.4 EchoPark Segment 5.0 3.2 Total depreciation and amortization $ 29.9 $ 23.6 Three Months Ended March 31, 2022 2021 (In millions) Floor Plan Interest Expense: Franchised Dealerships Segment $ 3.3 $ 4.1 EchoPark Segment 1.7 1.0 Total floor plan interest expense $ 5.0 $ 5.1 Three Months Ended March 31, 2022 2021 (In millions) Interest Expense, Other, Net: Franchised Dealerships Segment $ 20.0 $ 10.0 EchoPark Segment 0.8 0.3 Total interest expense, other, net $ 20.8 $ 10.3 Three Months Ended March 31, 2022 2021 (In millions) Capital Expenditures: Franchised Dealerships Segment $ 30.2 $ 46.2 EchoPark Segment 28.6 21.5 Total capital expenditures $ 58.8 $ 67.7 March 31, 2022 December 31, 2021 (In millions) Assets: Franchised Dealerships Segment $ 3,986.9 $ 3,934.9 EchoPark Segment 659.1 740.6 Corporate and other: Cash and cash equivalents 360.2 299.4 Other corporate assets — 0.2 Total assets $ 5,006.2 $ 4,975.1 |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2022 | |
Business Combinations [Abstract] | |
Business Acquisitions and Dispositions | 2. Business Acquisitions and Dispositions We acquired two franchised dealership locations during the three months ended March 31, 2022 for an aggregate gross purchase price (including inventory acquired and subsequently funded by floor plan notes payable) of approximately $28.4 million, including the impact of the RFJ Acquisition post-close adjustment. Of this amount, $13.7 million was related to the acquisition of the two franchised dealerships. The allocation of the $13.7 million aggregate gross purchase price for the acquisitions completed during the three months ended March 31, 2022 included inventory of $4.9 million, property and equipment of $0.1 million, franchise assets of $6.4 million, goodwill of $1.3 million, other assets of $1.1 million and other liabilities of $0.1 million. We did not acquire any businesses during the three months ended March 31, 2021. We did not dispose of any businesses during the three months ended March 31, 2022 and 2021. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | 10. Subsequent EventsSubsequent to March 31, 2021, we repurchased an additional 1.0 million shares of Class A Common Stock at an average price of $42.40, resulting in current remaining availability of approximately $150.0 million |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation – The accompanying unaudited condensed consolidated financial statements of Sonic Automotive, Inc. and its wholly owned subsidiaries (“Sonic,” the “Company,” “we,” “us” or “our”) for the three months ended March 31, 2022 and 2021 are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States (the “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 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, 2021. |
Principles of Consolidation | Principles of Consolidation – All of our dealership and non-dealership subsidiaries are wholly owned and consolidated in the accompanying unaudited condensed consolidated financial statements, except for one 50%-owned dealership that is accounted for under the equity method. All material intercompany balances and transactions have been eliminated in the accompanying unaudited condensed consolidated financial statements. |
Revenue from Contract with Customers | Revenue Recognition – Revenue is recognized when a customer obtains control of promised goods or services and in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. We do not include the cost of obtaining contracts within the related revenue streams since we elected the practical expedient to expense the costs to obtain a contract when incurred. Management has evaluated our established business processes, revenue transaction streams and accounting policies, and identified our material revenue streams to be: (1) the sale of new vehicles; (2) the sale of used vehicles to retail customers; (3) the sale of wholesale used vehicles at third-party auctions; (4) the arrangement of vehicle financing and the sale of service, warranty and other insurance contracts; and (5) the performance of vehicle maintenance and repair services and the sale of related parts and accessories. Generally, performance obligations are satisfied when the associated vehicle is either delivered to a customer and customer acceptance has occurred, over time as the maintenance and repair services are performed, or at the time of wholesale and retail parts sales. We do not have any revenue streams with significant financing components as payments are typically received within a short period of time following completion of the performance obligation(s). Retrospective finance and insurance revenues (“F&I retro revenues”) are recognized when the product contract has been executed with the end customer and the transaction price is estimated each reporting period based on the expected value method using historical and projected data. F&I retro revenues can vary based on a variety of factors, including number of contracts and history of cancellations and claims. Accordingly, we utilize this historical and projected data to constrain the consideration to the extent that it is probable that a significant reversal in the amount of cumulative revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved. We record revenue when vehicles are delivered to customers, as vehicle service work is performed and when parts are delivered. Conditions for completing a sale include having an agreement with the customer, including pricing, and it being probable that the proceeds from the sale will be collected. |
Per Share Data and Stockholders' Equity | Earnings Per Share – |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accounting Policies [Abstract] | ||
Revenues | $ 3,456,200,000 | $ 2,786,800,000 |
Fleet As Reported | 148,600,000 | |
Total New Vehicles As Reported | 1,499,900,000 | |
Total Vehicles As Reported | 3,039,500,000 | |
Total Revenues As Reported | 3,586,600,000 | |
Fleet COS As Reported | (147,800,000) | |
Total New Vehicles COS As Reported | (1,331,400,000) | |
Total Vehicles COS As Reported | (2,821,400,000) | |
Total COS As Reported | (3,015,300,000) | |
Fleet Revenue Correction | (130,400,000) | |
Fleet COS Correction | 130,400,000 | |
Fleet As Restated | 18,200,000 | |
Total New Vehicles As Restated | 1,369,500,000 | |
Total Vehicles As Restated | 2,909,100,000 | |
Total Revenues As Restated | 3,456,200,000 | |
Fleet COS As Restated | (17,400,000) | |
Total New Vehicles As Restated | (1,201,000,000) | |
Total Vehicles COS As Restated | (2,691,000,000) | |
Total COS As Restated | $ (2,884,900,000) |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | Inventories consist of the following: March 31, 2022 December 31, 2021 (In millions) New vehicles $ 278.2 $ 273.1 Used vehicles 730.8 807.2 Service loaners 112.5 106.3 Parts, accessories and other 76.6 74.6 Net inventories $ 1,198.1 $ 1,261.2 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Components of Property and Equipment, Net | Property and equipment, net consists of the following: March 31, 2022 December 31, 2021 (In millions) Land $ 451.2 $ 447.4 Buildings and improvements 1,278.1 1,240.5 Furniture, fixtures and equipment 470.1 451.2 Construction in progress 57.9 68.1 Total, at cost 2,257.3 2,207.2 Less accumulated depreciation (768.7) (746.2) Subtotal 1,488.6 1,461.0 Less assets held for sale (1) — (2.2) Property and equipment, net $ 1,488.6 $ 1,458.8 (1) Classified in other current assets in the accompanying unaudited condensed consolidated balance sheets. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Instrument [Line Items] | |
Long-Term Debt | Long-term debt consists of the following: March 31, 2022 December 31, 2021 (In millions) 2021 Revolving Credit Facility (1) $ — $ — 4.625% Senior Notes due 2029 (the “4.625% Notes”) 650.0 650.0 4.875% Senior Notes due 2031 (the “4.875% Notes”) 500.0 500.0 2019 Mortgage Facility (2) 87.3 90.0 Mortgage notes to finance companies - fixed rate, bearing interest from 2.05% to 7.03% 202.5 213.4 Mortgage notes to finance companies - variable rate, bearing interest at 1.50 to 2.90 percentage points above one-month or three-month LIBOR 130.5 132.8 Subtotal $ 1,570.3 $ 1,586.2 Debt issuance costs (24.0) (24.9) Total debt 1,546.3 1,561.3 Less current maturities (53.1) (50.6) Long-term debt $ 1,493.2 $ 1,510.7 (1) The interest rate on the 2021 Revolving Credit Facility (as defined below) was 100 basis points above LIBOR at both March 31, 2022 and December 31, 2021. (2) The interest rate on the 2019 Mortgage Facility (as defined below) was 150 basis points above LIBOR at both March 31, 2022 and December 31, 2021. |
Financial Covenants Include Required Specified Ratios | Covenants We have agreed under the 2021 Credit Facilities and the 2019 Mortgage Facility not to pledge any assets to any third parties (other than those explicitly allowed to be pledged by the amended terms of the 2021 Credit Facilities and the 2019 Mortgage Facility), including other lenders, subject to certain stated exceptions, including floor plan financing arrangements. In addition, the 2021 Credit Facilities and the 2019 Mortgage Facility contain certain negative covenants, including certain covenants which could restrict or prohibit indebtedness, liens, the payment of dividends and other restricted payments, capital expenditures and material dispositions and acquisitions of assets, as well as other customary covenants and default provisions. We were in compliance with the financial covenants under the 2021 Credit Facilities and the 2019 Mortgage Facility as of March 31, 2022. Financial covenants include required specified ratios (as each is defined in the 2021 Credit Facilities and the 2019 Mortgage Facility) of: Covenant Minimum Consolidated Liquidity Ratio Minimum Consolidated Fixed Charge Coverage Ratio Maximum Consolidated Total Lease Adjusted Leverage Ratio Required ratio 1.05 1.20 5.75 March 31, 2022 actual 1.26 2.66 2.11 The 2021 Credit Facilities and the 2019 Mortgage Facility contain events of default, including cross defaults to other material indebtedness, change of control events and other events of default customary for syndicated commercial credit facilities. Upon the future occurrence of an event of default, we could be required to immediately repay all outstanding amounts under the 2021 Credit Facilities and the 2019 Mortgage Facility. After giving effect to the applicable restrictions on the payment of dividends under our debt agreements, as of March 31, 2022, we had approximately $413.0 million of net income and retained earnings free of such restrictions. We were in compliance with all restrictive covenants under our debt agreements as of March 31, 2022. In addition, many of our facility leases are governed by a guarantee agreement between the landlord and us that contains financial and operating covenants. The financial covenants under the guarantee agreement are identical to those under the 2021 Credit Facilities and the 2019 Mortgage Facility with the exception of one additional financial covenant related to the ratio of EBTDAR to Rent (as defined in the guarantee agreement) with a required ratio of no less than 1.50 to 1.00. As of March 31, 2022, the ratio was 13.22 to 1.00. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Recorded at Fair Value | Assets and liabilities recorded at fair value in the accompanying unaudited condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021 were as follows: Fair Value Based on Significant Other Observable Inputs (Level 2) March 31, 2022 December 31, 2021 (In millions) Assets: Cash surrender value of life insurance policies (1) $ 38.5 $ 39.5 Total assets $ 38.5 $ 39.5 Liabilities: Deferred compensation plan (2) $ 23.5 $ 24.4 Total liabilities $ 23.5 $ 24.4 (1) Included in other assets in the accompanying unaudited condensed consolidated balance sheets. (2) Included in other long-term liabilities in the accompanying unaudited condensed consolidated balance sheets. |
Fair Value and Carrying Value of Significant Fixed Rate Long-Term Debt | As of March 31, 2022 and December 31, 2021, the fair value and carrying value of Sonic’s significant fixed rate long-term debt were as follows: March 31, 2022 December 31, 2021 Fair Value Carrying Value Fair Value Carrying Value (In millions) 4.875% Notes (1) $ 443.8 $ 500.0 $ 504.8 $ 500.0 4.625% Notes (1) $ 580.1 $ 650.0 $ 655.9 $ 650.0 (1) As determined by market quotations from similar securities as of March 31, 2022 and December 31, 2021, respectively (Level 2). |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Income (Loss) | For further discussion of Sonic’s accumulated other comprehensive income (loss), see Note 13, “Accumulated Other Comprehensive Income (Loss),” to the consolidated financial statements in Sonic’s Annual Report on Form 10-K for the year ended December 31, 2021. For further discussion of Sonic’s defined benefit pension plan, see Note 10, “Employee Benefit Plans,” to the consolidated financial statements in Sonic’s Annual Report on Form 10-K for the year ended December 31, 2021. |
Leases, Codification Topic 842
Leases, Codification Topic 842 (Tables) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Lease, Cost [Abstract] | |||
Finance Lease, Principal Payments | $ 900 | $ 900 | |
Leases [Abstract] | |||
Finance Lease, Right-of-Use Asset, after Accumulated Amortization | 193,700 | $ 179,900 | |
Operating Lease, Liability, Current | 37,000 | 36,200 | |
Finance Lease, Liability, Current | 52,500 | 52,700 | |
Operating Lease, Liability, Noncurrent | 263,800 | 264,800 | |
Finance Lease, Liability, Noncurrent | $ 150,900 | $ 135,500 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Cumulative Effect of Adjustments for Adoption of ASC 606 (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Cost of Sales: | |||
Cost of Sales | $ (2,884,900,000) | $ (2,385,900,000) | |
Operating income (loss) | 154,400,000 | 87,900,000 | |
Assets: | |||
Receivables, net | 351,500,000 | $ 401,100,000 | |
Liabilities: | |||
Other accrued liabilities | 406,300,000 | 350,500,000 | |
Stockholders' Equity: | |||
Retained Earnings (Accumulated Deficit) | 1,138,900,000 | 1,051,700,000 | |
Revenues | 3,456,200,000 | 2,786,800,000 | |
Fleet Revenue Correction | (130,400,000) | ||
Parts, service and collision repair | |||
Cost of Sales: | |||
Cost of Sales | (193,900,000) | (165,900,000) | |
Stockholders' Equity: | |||
Revenues | 380,500,000 | 320,900,000 | |
Finance, insurance and other, net | |||
Stockholders' Equity: | |||
Revenues | 166,600,000 | 144,700,000 | |
Fleet New Vehicles [Member] | |||
Cost of Sales: | |||
Cost of Sales | (17,400,000) | (22,100,000) | |
Stockholders' Equity: | |||
Revenues | 18,200,000 | 22,300,000 | |
New vehicles | |||
Cost of Sales: | |||
Cost of Sales | (1,201,000,000) | (1,086,900,000) | |
Stockholders' Equity: | |||
Revenues | 1,369,500,000 | 1,156,300,000 | |
Total vehicles | |||
Cost of Sales: | |||
Cost of Sales | (2,691,000,000) | (2,220,000,000) | |
Stockholders' Equity: | |||
Revenues | 2,909,100,000 | $ 2,321,200,000 | |
ASU 2014-09 | Finance, insurance and other, net | |||
Assets: | |||
Contract assets | $ 24,400,000 | $ 34,900,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Finance Lease, Right-of-Use Asset, after Accumulated Amortization | $ 193,700 | $ 179,900 |
Intangible assets | 486,600 | 480,200 |
Right-of-use asset | $ 293,600 | $ 293,200 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Activity (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||
Finance Lease, Right-of-Use Asset, after Accumulated Amortization | $ 193,700 | $ 179,900 |
Operating Lease, Right-of-Use Asset | $ 293,600 | $ 293,200 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Schedule of Equity Method Investments [Line Items] | |||
Percentage of dealership that is accounted for under the equity method | 50% | ||
Effective tax rate from continuing operations | 24.50% | 26% | |
Income benefit | $ (31,600) | $ (18,900) | |
Dealership | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage of dealership that is accounted for under the equity method | 50% | ||
ASU 2014-09 | Finance, insurance and other, net | |||
Schedule of Equity Method Investments [Line Items] | |||
Contract assets | $ 24,400 | $ 34,900 |
Business Acquisitions and Dis_2
Business Acquisitions and Dispositions - Additional Information (Details) | 3 Months Ended | |
Mar. 31, 2022 USD ($) Business retail_Units | Mar. 31, 2021 USD ($) Business | |
Business Acquisition [Line Items] | ||
Number of franchises disposed | 0 | 0 |
Net cash generated from disposition | $ 0 | |
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Inventory | 4,300,000 | |
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Intangibles | 1,100,000 | |
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Consideration Transferred | 14,700,000 | |
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Financial Assets | 3,400,000 | |
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Financial Liabilities | $ 5,900,000 | |
Mid-line import franchise | ||
Business Acquisition [Line Items] | ||
Net cash generated from disposition | $ 0 | |
EchoPark Segment [Member] | ||
Business Combinations [Abstract] | ||
Number of acquired franchises | Business | 0 | |
Business Acquisition [Line Items] | ||
Number of acquired franchises | Business | 0 | |
Stand-alone pre-owned vehicle business | ||
Business Acquisition [Line Items] | ||
Business acquisition, consideration amount | $ 28,400,000 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | 4,900,000 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 100,000 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | 6,400,000 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Other | 1,100,000 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other | $ (100,000) | |
Franchised [Member] | ||
Business Combinations [Abstract] | ||
Number of acquired franchises | Business | 2 | |
Business Acquisition [Line Items] | ||
Number of acquired franchises | Business | 2 |
Business Acquisitions and Dis_3
Business Acquisitions and Dispositions - Revenues and Other Activities Associated with Disposed Dealerships Classified as Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Pre-tax income (loss) | $ 0 | $ 700 |
Inventories - Components of Inv
Inventories - Components of Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
New vehicles | $ 278,200 | $ 273,100 |
Used vehicles | 730,800 | 807,200 |
Service loaners | 112,500 | 106,300 |
Parts, accessories and other | 76,600 | 74,600 |
Net inventories | $ 1,198,100 | $ 1,261,200 |
Property and Equipment - Compon
Property and Equipment - Components of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Less accumulated depreciation | $ (768,700) | $ (746,200) |
Subtotal | 1,488,600 | 1,461,000 |
Less assets held for sale | 0 | (2,200) |
Property and equipment, net | 1,488,600 | 1,458,800 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 451,200 | 447,400 |
Building and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 1,278,100 | 1,240,500 |
Furniture, fixtures and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 470,100 | 451,200 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 57,900 | 68,100 |
Property, Plant and Equipment, Net, Excluding Capital Leased Assets | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 2,257,300 | $ 2,207,200 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 423,500 | $ 416,400 |
Net of accumulated impairment losses | 1,100,000 | 1,100,000 |
Goodwill - Franchise Segment | 219,800 | 213,500 |
Goodwill - Preowned Segment | 203,700 | 202,900 |
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | 423,500 | 416,400 |
Goodwill [Line Items] | ||
Goodwill - Preowned Segment | 203,700 | 202,900 |
Net of accumulated impairment losses | 1,100,000 | 1,100,000 |
Franchise assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Franchise assets | $ 486,600 | $ 480,200 |
Long-Term Debt - Long-Term Debt
Long-Term Debt - Long-Term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Oct. 13, 2021 |
Debt Instrument [Line Items] | |||
Subtotal | $ 1,570,300 | $ 1,586,200 | |
Debt issuance costs | (24,000) | (24,900) | |
Total debt | 1,546,300 | 1,561,300 | |
Less current maturities | (53,100) | (50,600) | |
Long-term debt | 1,493,200 | 1,510,700 | |
Mortgage notes | |||
Debt Instrument [Line Items] | |||
Mortgage notes to finance companies - fixed rate, bearing interest from 3.51% to 7.03% | 202,500 | 213,400 | |
Mortgage notes to finance companies - variable rate, bearing interest at 1.50 to 2.90 percentage points above one-month or three-month LIBOR | 130,500 | 132,800 | |
Subtotal | $ 333,000 | ||
Mortgage notes | Minimum | |||
Debt Instrument [Line Items] | |||
Mortgage notes to finance companies-fixed rate, percentage | 3.51% | ||
Mortgage notes to finance companies-variable rate, percentage | 1.50% | ||
Mortgage notes | Maximum | |||
Debt Instrument [Line Items] | |||
Mortgage notes to finance companies-fixed rate, percentage | 7.03% | ||
Mortgage notes to finance companies-variable rate, percentage | 2.90% | ||
TwoThousandSixteenRevolvingCreditFacilityMember | |||
Debt Instrument [Line Items] | |||
2016 Revolving Credit Facility | $ 0 | $ 0 | |
Interest rate | 2.50% | 2.25% | |
5.0% Senior Subordinate Notes due 2023 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 5% | ||
6.125% Senior Subordinate Notes due 2027 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 6.125% | 6.125% | |
2019 Mortgage Facility [Member] | |||
Debt Instrument [Line Items] | |||
Senior Subordinated Notes | $ 87,300 | $ 90,000 | |
4.625% Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Senior Subordinated Notes | 650,000 | 650,000 | |
4.875% Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Senior Subordinated Notes | 500,000 | 500,000 | |
Total debt | $ 500,000 | $ 500,000 | |
Stated interest rate | 4.875% |
Long-Term Debt - 2016 Credit Fa
Long-Term Debt - 2016 Credit Facilities (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
TwoThousandSixteenRevolvingCreditFacilityMember | ||
Line of Credit Facility [Line Items] | ||
2016 Revolving Credit Facility | $ 0 | $ 0 |
Revolving Credit Facility | Two Thousand Twenty Vehicle Floor Plan Facility | ||
Line of Credit Facility [Line Items] | ||
Current borrowing capacity | 2,600,000,000 | |
Maximum borrowing capacity | $ 2,850,000,000 | |
Maximum aggregate commitments allocated to commitments under the 2016 Used Vehicle Floor Plan Facility | 40% | |
Revolving Credit Facility | TwoThousandTwentyRevolvingCreditFacility | ||
Line of Credit Facility [Line Items] | ||
Current borrowing capacity | $ 350,000,000 | |
Maximum borrowing capacity | 400,000,000 | |
Borrowing base | 286,500,000 | |
2016 Revolving Credit Facility | 0 | |
Letters of credit outstanding amount | 12,500,000 | |
Borrowing availability amount | $ 274,000,000 | |
Maximum dividend (usd per share) | $ 0.25 |
Long-Term Debt - Notes Narrativ
Long-Term Debt - Notes Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Dec. 31, 2021 | Oct. 13, 2021 | |
Debt Instrument [Line Items] | |||
Debt outstanding | $ 1,570,300,000 | $ 1,586,200,000 | |
Maximum Borrowing 2019 Mortgage Facility | $ 112,200,000 | ||
Mortgage notes | |||
Debt Instrument [Line Items] | |||
Debt weighted average interest rate on note | 3.62% | ||
Debt outstanding | $ 333,000,000 | ||
5.0% Notes | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 5% | ||
6.125% Notes | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 6.125% | 6.125% | |
Principal amount | $ 250,000,000 | ||
2019 Mortgage Facility [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Unused Borrowing Capacity, Amount | $ 24,900,000 | ||
Percent of Collateralized Real Estate | 75% | ||
4.875% Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 4.875% | ||
4.625% Notes [Member] | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 4.625% | ||
Minimum | 2019 Mortgage Facility [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | ||
Debt Instrument, Basis Spread LIBOR | 1.50% | ||
Maximum | 2019 Mortgage Facility [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | ||
Debt Instrument, Basis Spread LIBOR | 2.75% |
Long-Term Debt - Covenants (Det
Long-Term Debt - Covenants (Details) $ in Millions | Mar. 31, 2022 USD ($) |
Line of Credit Facility [Line Items] | |
Minimum Consolidated Liquidity Ratio | 126% |
Minimum Consolidated Fixed Charge Coverage Ratio | 266% |
Maximum Consolidated Total Lease Adjusted Leverage Ratio | 211% |
2016 Credit Facilities | |
Line of Credit Facility [Line Items] | |
Net income and retained earnings free of restrictions | $ 413 |
Minimum EBTDAR to rent ratio | 1,322% |
Required ratio | |
Line of Credit Facility [Line Items] | |
Minimum Consolidated Liquidity Ratio | 105% |
Minimum Consolidated Fixed Charge Coverage Ratio | 120% |
Maximum Consolidated Total Lease Adjusted Leverage Ratio | 575% |
Required ratio | 2016 Credit Facilities | |
Line of Credit Facility [Line Items] | |
Minimum EBTDAR to rent ratio | 150% |
Long-Term Debt (Details)
Long-Term Debt (Details) - TwoThousandTwentyRevolvingCreditFacility - Revolving Credit Facility | Mar. 31, 2022 USD ($) |
Line of Credit Facility [Line Items] | |
2016 Revolving Credit Facility | $ 0 |
Borrowing availability amount | $ 274,000,000 |
Per Share Data and Stockholde_2
Per Share Data and Stockholders' Equity - Dilutive Effect on Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Weighted Average Shares | ||
Weighted average common shares outstanding | 40,400 | 41,500 |
Diluted earnings (loss) (shares) | 41,800 | 43,500 |
From Continuing Operations | ||
Earnings (loss) | $ 97,300 | $ 53,700 |
Basic earnings (loss) per share (usd per share) | $ 2.41 | $ 1.29 |
From Discontinued Operations | ||
Earnings (loss) | $ 0 | $ 500 |
Basic earnings (loss) per share (usd per share) | $ 0 | $ 0.02 |
Net Income (Loss) | ||
Earnings (loss) | $ 97,300 | $ 54,200 |
Basic earnings (loss) per share (usd per share) | $ 2.41 | $ 1.31 |
Effect of dilutive securities: | ||
Earnings (loss) per share from continuing operations (usd per share) | 2.33 | 1.23 |
Earnings (loss) per share from discontinued operations (usd per share) | 0 | 0.02 |
Earnings (loss) per common share (usd per share) | $ 2.33 | $ 1.25 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Other Commitments [Line Items] | ||
Maximum exposure associated with general indemnifications | $ 0 | $ 4,000 |
General indemnifications minimum expiration period | 1 year | |
General indemnifications maximum expiration period | 3 years | |
Percentage of dealership that is accounted for under the equity method | 50% | |
Contingent liability reserve balance after reduction | $ 4,300 | $ 4,300 |
Other accrued liabilities | ||
Other Commitments [Line Items] | ||
Amount reserved for pending proceedings | 1,600 | |
Other long-term liabilities | ||
Other Commitments [Line Items] | ||
Amount reserved for pending proceedings | $ 300 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Recorded at Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Nonrecurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Tangible Asset Impairment Charges | $ 0 | |
Fair Value Based on Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Cash surrender value of life insurance policies | 38,500 | $ 39,500 |
Total assets | 38,500 | 39,500 |
Liabilities: | ||
Deferred compensation plan | 23,500 | 24,400 |
Total liabilities | $ 23,500 | 24,400 |
Fair Value Based on Significant Other Observable Inputs (Level 2) | Other accrued liabilities | ||
Liabilities: | ||
Cash flow swaps and interest rate caps designated as hedges | 0 | |
Fair Value Based on Significant Other Observable Inputs (Level 2) | Other long-term liabilities | ||
Liabilities: | ||
Cash flow swaps and interest rate caps designated as hedges | $ 0 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value and Carrying Value of Significant Fixed Rate Long-Term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Oct. 13, 2021 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Carrying Value | $ 1,546,300 | $ 1,561,300 | |
5.0% Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Stated interest rate | 5% | ||
6.125% Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Stated interest rate | 6.125% | 6.125% | |
4.875% Senior Notes [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair Value | $ 443,800 | 504,800 | |
Carrying Value | $ 500,000 | 500,000 | |
Stated interest rate | 4.875% | ||
4.625% Notes [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair Value | $ 580,100 | 655,900 | |
Carrying Value | $ 650,000 | $ 650,000 | |
Stated interest rate | 4.625% |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Summary of Changes in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | $ 1,076,400 | $ 814,800 |
Other comprehensive income (loss) | 200 | 200 |
Ending balance | 1,135,000 | 826,400 |
Total Accumulated Other Comprehensive Income (Loss) | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | (1,300) | (3,600) |
Other comprehensive income (loss) | 200 | 200 |
Ending balance | $ (1,100) | $ (3,400) |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2022 Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment Information - Summary o
Segment Information - Summary of Reportable Operating Segment (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues: | ||||
Total consolidated revenues | $ 3,456,200,000 | $ 2,786,800,000 | ||
Segment income (loss): | ||||
Segment income (loss) | 154,400,000 | 87,900,000 | ||
Interest expense, other, net | (20,800,000) | (10,300,000) | ||
Other income (expense), net | 300,000 | 100,000 | ||
Income (loss) from continuing operations before taxes | 128,900,000 | 72,600,000 | ||
Depreciation, Depletion and Amortization | 29,900,000 | 23,600,000 | ||
FloorPlanInterestExpense | 5,000,000 | 5,100,000 | ||
Interest Expense, Other | 20,800,000 | 10,300,000 | ||
Payments to Acquire Property, Plant, and Equipment | 58,800,000 | 67,700,000 | ||
Cash and cash equivalents | 360,200,000 | 77,200,000 | $ 299,400,000 | $ 170,300,000 |
Other Assets | 0 | 200,000 | ||
Assets | 5,006,200,000 | 4,975,100,000 | ||
Franchised Dealerships Segment | ||||
Revenues: | ||||
Total consolidated revenues | 2,830,900,000 | 2,279,700,000 | ||
Segment income (loss): | ||||
Interest expense, other, net | (20,000,000) | (10,000,000) | ||
Depreciation, Depletion and Amortization | 24,900,000 | 20,400,000 | ||
FloorPlanInterestExpense | 3,300,000 | 4,100,000 | ||
Interest Expense, Other | 20,000,000 | 10,000,000 | ||
Payments to Acquire Property, Plant, and Equipment | 30,200,000 | 46,200,000 | ||
Assets | 3,986,900,000 | 3,934,900,000 | ||
EchoPark Segment | ||||
Revenues: | ||||
Total consolidated revenues | 625,300,000 | 507,100,000 | ||
Segment income (loss): | ||||
Interest expense, other, net | (800,000) | (300,000) | ||
Depreciation, Depletion and Amortization | 5,000,000 | 3,200,000 | ||
FloorPlanInterestExpense | 1,700,000 | 1,000,000 | ||
Interest Expense, Other | 800,000 | 300,000 | ||
Payments to Acquire Property, Plant, and Equipment | 28,600,000 | 21,500,000 | ||
Assets | 659,100,000 | $ 740,600,000 | ||
Operating segments | Franchised Dealerships Segment | ||||
Segment income (loss): | ||||
Segment income (loss) | 163,800,000 | 70,600,000 | ||
Operating segments | EchoPark Segment | ||||
Segment income (loss): | ||||
Segment income (loss) | (34,900,000) | 2,000,000 | ||
Reconciling items | ||||
Segment income (loss): | ||||
Other income (expense), net | 128,900,000 | 72,600,000 | ||
New vehicles | ||||
Revenues: | ||||
Total consolidated revenues | 1,369,500,000 | 1,156,300,000 | ||
New vehicles | Franchised Dealerships Segment | ||||
Revenues: | ||||
Total consolidated revenues | 1,363,900,000 | 1,156,300,000 | ||
Used vehicles | ||||
Revenues: | ||||
Total consolidated revenues | 1,370,900,000 | 1,090,100,000 | ||
Used vehicles | Franchised Dealerships Segment | ||||
Revenues: | ||||
Total consolidated revenues | 853,700,000 | 661,500,000 | ||
Used vehicles | EchoPark Segment | ||||
Revenues: | ||||
Total consolidated revenues | 517,200,000 | 441,400,000 | ||
Wholesale vehicles | ||||
Revenues: | ||||
Total consolidated revenues | 168,700,000 | 74,800,000 | ||
Wholesale vehicles | Franchised Dealerships Segment | ||||
Revenues: | ||||
Total consolidated revenues | 106,300,000 | 56,200,000 | ||
Wholesale vehicles | EchoPark Segment | ||||
Revenues: | ||||
Total consolidated revenues | 62,400,000 | 18,600,000 | ||
Parts, service and collision repair | ||||
Revenues: | ||||
Total consolidated revenues | 380,500,000 | 320,900,000 | ||
Parts, service and collision repair | Franchised Dealerships Segment | ||||
Revenues: | ||||
Total consolidated revenues | 380,500,000 | 308,100,000 | ||
Finance, insurance and other, net | ||||
Revenues: | ||||
Total consolidated revenues | 166,600,000 | 144,700,000 | ||
Finance, insurance and other, net | Franchised Dealerships Segment | ||||
Revenues: | ||||
Total consolidated revenues | 126,500,000 | 97,600,000 | ||
Finance, insurance and other, net | EchoPark Segment | ||||
Revenues: | ||||
Total consolidated revenues | 40,100,000 | 47,100,000 | ||
NewVehiclesMember | EchoPark Segment | ||||
Revenues: | ||||
Total consolidated revenues | 5,600,000 | 0 | ||
Retail New Vehicles [Member] | ||||
Revenues: | ||||
Total consolidated revenues | 1,351,300,000 | 1,134,000,000 | ||
Retail New Vehicles [Member] | Franchised Dealerships Segment | ||||
Revenues: | ||||
Total consolidated revenues | 1,345,700,000 | 1,134,000,000 | ||
Fleet New Vehicles [Member] | ||||
Revenues: | ||||
Total consolidated revenues | 18,200,000 | 22,300,000 | ||
Fleet New Vehicles [Member] | Franchised Dealerships Segment | ||||
Revenues: | ||||
Total consolidated revenues | $ 18,200,000 | $ 22,300,000 |
Leases, Codification Topic 84_2
Leases, Codification Topic 842 (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Finance Lease, Right-of-Use Asset, after Accumulated Amortization | $ 193,700 | $ 179,900 |
Right-of-use asset | $ 293,600 | $ 293,200 |
Business Combinations (Details)
Business Combinations (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 USD ($) Business retail_Units | Mar. 31, 2021 Business | |
Business Combinations [Abstract] | ||
Number of franchises disposed | 0 | 0 |
RFJ | ||
Asset Acquisition [Line Items] | ||
Business acquisition, consideration amount | $ 964,900 | |
Business acquisition, consideration amount | $ 964,900 | |
EchoPark Segment [Member] | ||
Asset Acquisition [Line Items] | ||
Number of acquired franchises | Business | 0 | |
Stand-alone pre-owned vehicle business | ||
Asset Acquisition [Line Items] | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | $ 4,900 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | 6,400 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 100 | |
Goodwill, Acquired During Period | 1,300 | |
Business acquisition, consideration amount | 28,400 | |
Business acquisition, consideration amount | $ 28,400 | |
Franchised [Member] | ||
Asset Acquisition [Line Items] | ||
Number of acquired franchises | Business | 2 | |
Franchised Dealerships Acquired | ||
Asset Acquisition [Line Items] | ||
Business acquisition, consideration amount | $ 13,700 | |
Business acquisition, consideration amount | $ 13,700 |
Subsequent Events (Details)
Subsequent Events (Details) | Mar. 31, 2022 | Mar. 31, 2022 USD ($) | Mar. 31, 2022 shares | Mar. 31, 2022 $ / shares | Oct. 13, 2021 USD ($) |
Subsequent Event [Line Items] | |||||
Subsequent Class A Common Stock Repurchase | 150,000,000 | 1,000,000 | |||
Subsequent Class A Common Stock Repurchase Ave Price | $ / shares | $ 42.4 | ||||
6.125% Notes | |||||
Subsequent Events [Abstract] | |||||
Principal amount | $ 250,000,000 | ||||
Stated interest rate | 6.125% | 6.125% | |||
Subsequent Event [Line Items] | |||||
Principal amount | $ 250,000,000 | ||||
Stated interest rate | 6.125% | 6.125% |