Sonic Automotive 8K Reports Strong Operating Performance and Earnings Growth; Hits | SAH 31 Oct 06

Exhibit 99.2

Cautionary Notice Regarding

Forward-Looking Statements

•

This presentation contains statements that constitute “forward-looking

statements”

within the meaning of Section 27A of the Securities Act of 1933

and

Section 21E of the Securities Exchange Act of 1934.

•

These forward-looking statements are not historical facts, but only predictions

by our company and/or our company’s management.

•

These statements generally can be identified by lead-in words such as “believe,”

“expect,”

“anticipate,”

“intend,”

“plan,”

“foresee”

and other similar words.

Similarly, statements that describe our company’s objectives, plans or goals are

also forward-looking statements.

•

You are cautioned that these forward-looking statements are not guarantees of

future performance and involve risks and uncertainties, and that

actual results

may differ materially from those projected in the forward-looking statements as

a results of various factors. Among others, factors that could materially

adversely affect actual results and performance include those risk factors that are

listed in Sonic Automotive’s Form 10-Q for the quarter ended June 30, 2006.

Sonic Automotive

Third Quarter 2006

Earnings Review

October 31, 2006

The Quarter in Review

•

Total revenue increased $144 million, or 7.5%.

Same store revenue increased 2.8% driven by a used

vehicle sales increase of 4.7% and fixed operations

growth of 5.1%

•

Brand mix continues to drive results

–

Luxury near 50% of total revenues

–

Combined luxury and import brands were 82%

–

Operating profit margin was 3.6%

•

SG&A as a percent of gross profit improved 90

basis points to 74.7%

•

Debt-to-capital ratio declined 600 basis points from

year end 2005 to end the quarter at 40.0%

Financial Performance

Better/(Worse)

(amounts in millions, except per share data)

2006

Than 2005

Revenue

$2,068

$144

Gross Profit

$317

$26

Operating Profit

$75

Net Income

– Continuing Operations

$29.1

$0.5

– Total Operations

28.6

1.8

EPS

– Continuing Operations

$0.66

$0.01

– Total Operations

0.65

0.04

* Includes stock option expense of $0.01 for the quarter

Financial Performance

Better/(Worse)

(amounts in millions)

2006

Than 2005

Revenue

$2,068

7.5%

Gross Profit

$317

8.9%

- Margin

15.3%

20 bps

Operating Profit

$75

11.8%

- Margin

3.6%

10 bps

Interest Expense

$26

(27.6%)

Net Income - Continuing Operations

$29

1.8%

•

Operating performance is very strong

Revenue up nearly 8%

Gross profit and operating profit up even more; margins improved

Fixed operations and cost control are big drivers

•

Higher interest cost driven by rates

•

Net income up nearly 2%

$5.6M

$7.8M

Same Store Revenue Growth

•

Solid results overall driven by strong used vehicle and fixed operations performance

•

Sonic’s new vehicle same store results continue to outperform the industry

2.9%

4.7%

(8.7%)

5.1%

4.4%

2.8%

New

Used

Wholesale

Fixed

Operations

F&I

Total

Used Vehicles

Sonic vs. Franchised

1.4Pts

8.4Pts

18.7Pts

25.6Pts

0.0

10.0

20.0

30.0

2005

Q1 06

Q2 06

Q3 06

Sonic vs.

Franchised

Industry data provided by CNW Market Research

Year over Year Retail Volume Change

2005

Same Store - Program

n/a

22.7%

25.2%

6.0%

Total Same Store

4.5%

3.8%

12.2%

2.2%

Nat'l Franchised Dealers

3.1%

-4.6%

-6.5%

-23.4%

Sonic vs. Franchised

1.4Pts

8.4Pts

18.7Pts

25.6Pts

$728

$830

$413

$585

$646

$528

2001

2002

2003

2004

2005

2006

46.8%

49.9%

49.5%

49.1%

49.5%

48.1%

2001

2002

2003

2004

2005

2006

REVENUE

($ in millions)

9 Months Ended Each Year

GROSS MARGIN RATE

9 Months Ended Each Year

Parts, Service and Collision Repair

•

Consistent and improving performance

•

Grow service capacity in high margin brands

•

Continue to expand service stall capacity

•Fixed Absorption was 89.6% in the third quarter

Operating Initiatives

* Q3 -

50.0%

SG&A Expenses as % of Gross Profit

2003

2004

2005

2006

All Other SG&A

Rent

6.0%

71.9%

7.9%

•Continued improvements in compensation and other operating expenses

•Favorable brand mix should continue to improve this metric

•Continue

reduce

our

controllable

expense

–

Operating

improvements

are

gaining traction

6.9%

7.3%

70.9%

68.8%

66.8%

12 Months Ended December 31,

77.9%

77.8%

76.1%

74.7%

Fixed Absorption -

82.1%

83.8%

86.2%

89.6%

Inventory Management

Days Supply

Sep-06

Sep-05

Dec-05

Sep-06

Industry

New Vehicles

Domestic (excluding Cadillac)

Luxury (including Cadillac)

Import

Overall

Used Vehicles

Parts

Capitalization

57.7%

55.6%

54.0%

53.8%

53.2%

60.0%

46.8%

46.2%

46.0%

44.4%

42.3%

40.0%

2003

2004

2005

Q1 2006

Q2 2006

Q3 2006

100%

Debt

Equity

****Achieved 40% Target For Debt-To-Capital****

Portfolio Enrichment

•

Portfolio enrichment continues, driven by our acquisition strategy and strong

growth in luxury and import sales.

YTD Sept

2005

YTD Sept

2006

% of Total Revenues

Luxury and Import

69%

72%

Cadillac

10%

Subtotal

79%

82%

Other Domestic

20%

17%

Non-Franchised

Total

100%

Memo: Luxury Including Cadillac

48%

50%

Summary

•

Core operating trends remain strong

–

Continue our used vehicle sales initiative

–

Stall capacity and best practices should drive fixed operations growth

•

Brand mix continues to drive improvements, especially in

the higher margin segments of the business

•

Expense reduction trends continue, driven by process

improvement and brand mix

•

Continued progress on strengthening our balance sheet

Sonic Automotive (SAH) 8-KSonic Automotive, Inc. Reports Strong Operating Performance and Earnings Growth; Hits