Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 22, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | SAH | ||
Entity Registrant Name | SONIC AUTOMOTIVE INC | ||
Entity Central Index Key | 1,043,509 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 901.7 | ||
Common Class A [Member] | |||
Document and Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 34,010,864 | ||
Common Class B [Member] | |||
Document and Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 12,029,375 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current Assets: | ||
Cash and cash equivalents | $ 3,625 | $ 4,182 |
Receivables, net | 378,520 | 371,994 |
Inventories | 1,599,581 | 1,311,702 |
Other current assets | 101,386 | 81,081 |
Total current assets | 2,083,112 | 1,768,959 |
Property and Equipment, net | 886,902 | 799,319 |
Goodwill | 471,493 | 475,929 |
Other Intangible Assets, net | 80,876 | 83,720 |
Other Assets | 39,998 | 40,326 |
Total Assets | 3,562,381 | 3,168,253 |
Current Liabilities: | ||
Notes payable - floor plan - trade | 893,466 | 711,618 |
Notes payable - floor plan - non-trade | 625,367 | 551,118 |
Trade accounts payable | 131,204 | 132,405 |
Accrued interest | 12,640 | 12,409 |
Other accrued liabilities | 218,507 | 208,654 |
Current maturities of long-term debt | 33,437 | 30,802 |
Total current liabilities | 1,914,621 | 1,647,006 |
Long-Term Debt | 781,145 | 727,728 |
Other Long-Term Liabilities | 64,245 | 69,200 |
Deferred Income Taxes | $ 73,322 | $ 57,601 |
Commitments and Contingencies | ||
Stockholders' Equity: | ||
Class A convertible preferred stock, none issued | ||
Paid-in capital | $ 713,118 | $ 697,760 |
Retained earnings | 457,010 | 376,353 |
Accumulated other comprehensive income (loss) | (5,632) | (6,424) |
Treasury stock, at cost; 24,675,443 Class A common stock shares held at December 31, 2015 and 23,156,433 Class A common stock shares held at December 31, 2014 | (436,195) | (401,712) |
Total Stockholders' Equity | 729,048 | 666,718 |
Total Liabilities and Stockholders' Equity | 3,562,381 | 3,168,253 |
Common Class A [Member] | ||
Stockholders' Equity: | ||
Common stock, value | 626 | 620 |
Common Class B [Member] | ||
Stockholders' Equity: | ||
Common stock, value | $ 121 | $ 121 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Convertible preferred stock issued | 0 | 0 |
Common Class A [Member] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 62,586,381 | 62,046,966 |
Common stock, shares outstanding | 37,910,938 | 38,890,533 |
Treasury stock, shares | 24,675,443 | 23,156,433 |
Common Class B [Member] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 12,029,375 | 12,029,375 |
Common stock, shares outstanding | 12,029,375 | 12,029,375 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues: | |||
New vehicles | $ 5,265,401 | $ 5,124,029 | $ 4,989,185 |
Used vehicles | 2,512,024 | 2,310,247 | 2,176,034 |
Wholesale vehicles | 155,339 | 166,158 | 175,328 |
Total vehicles | 7,932,764 | 7,600,434 | 7,340,547 |
Parts, service and collision repair | 1,364,947 | 1,296,570 | 1,230,178 |
Finance, insurance and other, net | 326,588 | 300,095 | 272,443 |
Total revenues | 9,624,299 | 9,197,099 | 8,843,168 |
Cost of Sales: | |||
New vehicles | (4,997,472) | (4,835,403) | (4,699,582) |
Used vehicles | (2,349,982) | (2,153,001) | (2,025,634) |
Wholesale vehicles | (162,707) | (169,774) | (183,259) |
Total vehicles | (7,510,161) | (7,158,178) | (6,908,475) |
Parts, service and collision repair | (699,526) | (673,021) | (633,086) |
Total cost of sales | (8,209,687) | (7,831,199) | (7,541,561) |
Gross profit | 1,414,612 | 1,365,900 | 1,301,607 |
Selling, general and administrative expenses | (1,110,565) | (1,067,433) | (1,003,125) |
Impairment charges | (17,955) | (6,594) | (9,872) |
Depreciation and amortization | (68,799) | (58,260) | (54,007) |
Operating income (loss) | 217,293 | 233,613 | 234,603 |
Other income (expense): | |||
Interest expense, floor plan | (21,326) | (18,793) | (21,954) |
Interest expense, other, net | (50,910) | (53,190) | (55,485) |
Other income (expense), net | 99 | 97 | (28,143) |
Total other income (expense) | (72,137) | (71,886) | (105,582) |
Income (loss) from continuing operations before taxes | 145,156 | 161,727 | 129,021 |
Provision for income taxes for continuing operations - benefit (expense) | (57,065) | (63,168) | (44,343) |
Income (loss) from continuing operations | 88,091 | 98,559 | 84,678 |
Discontinued operations: | |||
Income (loss) from discontinued operations before taxes | (2,883) | (2,164) | (4,017) |
Provision for income taxes for discontinued operations - benefit (expense) | 1,103 | 822 | 957 |
Income (loss) from discontinued operations | (1,780) | (1,342) | (3,060) |
Net income (loss) | $ 86,311 | $ 97,217 | $ 81,618 |
Basic earnings (loss) per common share: | |||
Earnings (loss) per share from continuing operations | $ 1.74 | $ 1.89 | $ 1.60 |
Earnings (loss) per share from discontinued operations | (0.03) | (0.03) | (0.06) |
Earnings (loss) per common share | $ 1.71 | $ 1.86 | $ 1.54 |
Weighted average common shares outstanding | 50,489 | 52,065 | 52,556 |
Diluted earnings (loss) per common share: | |||
Earnings (loss) per share from continuing operations | $ 1.73 | $ 1.87 | $ 1.59 |
Earnings (loss) per share from discontinued operations | (0.03) | (0.03) | (0.06) |
Earnings (loss) per common share | $ 1.70 | $ 1.84 | $ 1.53 |
Weighted average common shares outstanding | 50,883 | 52,563 | 52,941 |
Dividends declared per common share | $ 0.11 | $ 0.10 | $ 0.10 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net income (loss) | $ 86,311 | $ 97,217 | $ 81,618 |
Other comprehensive income (loss) before taxes: | |||
Change in fair value of interest rate swap agreements | 540 | 4,655 | 17,143 |
Pension actuarial income (loss) | 737 | (1,174) | 1,212 |
Total other comprehensive income (loss) before taxes | 1,277 | 3,481 | 18,355 |
Provision for income tax benefit (expense) related to components of other comprehensive income (loss) | (485) | (1,323) | (6,974) |
Other comprehensive income (loss) | 792 | 2,158 | 11,381 |
Comprehensive income (loss) | $ 87,103 | $ 99,375 | $ 92,999 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Paid-In Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Common Class A [Member]Common Stock [Member] | Common Class A [Member]Treasury Stock [Member] | Common Class B [Member]Common Stock [Member] | |
Beginning Balance at Dec. 31, 2012 | $ 526,545 | $ 669,324 | $ 208,048 | $ (19,963) | $ 614 | $ (331,599) | $ 121 | |
Beginning Balance, Shares at Dec. 31, 2012 | 61,352 | (20,142) | 12,029 | |||||
Shares awarded under stock compensation plans | 2,171 | 2,169 | $ 2 | |||||
Shares awarded under stock compensation plans, shares | 209 | |||||||
Purchases of treasury stock | (17,067) | $ (17,067) | ||||||
Purchases of treasury stock, shares | (758) | |||||||
Income tax benefit associated with stock compensation plans | 856 | 856 | ||||||
Change in Fair value of interest rate swap agreements, net of tax expense/benefit of $6,514, $1,769 and $205 in 2013, 2014 and 2015 respectively | 10,629 | 10,629 | ||||||
Pension actuarial income/loss net of tax expense/benefit of $460, $446 and $280 in 2013, 2014 and 2015 respectively | 752 | 752 | ||||||
Restricted stock amortization | 7,208 | 7,208 | ||||||
Other | [1] | 6,225 | 6,225 | |||||
Other, shares | [1] | 23 | ||||||
Net income (loss) | 81,618 | 81,618 | ||||||
Dividends declared ($0.10, $0.10, $0.11 per share in 2013, 2014, 2015 respectively) | (5,298) | (5,298) | ||||||
Ending Balance at Dec. 31, 2013 | 613,639 | 685,782 | 284,368 | (8,582) | $ 616 | $ (348,666) | $ 121 | |
Ending Balance, Shares at Dec. 31, 2013 | 61,584 | (20,900) | 12,029 | |||||
Shares awarded under stock compensation plans | 3,274 | 3,270 | $ 4 | |||||
Shares awarded under stock compensation plans, shares | 440 | |||||||
Purchases of treasury stock | (53,046) | $ (53,046) | ||||||
Purchases of treasury stock, shares | (2,256) | |||||||
Income tax benefit associated with stock compensation plans | 1,033 | 1,033 | ||||||
Change in Fair value of interest rate swap agreements, net of tax expense/benefit of $6,514, $1,769 and $205 in 2013, 2014 and 2015 respectively | 2,886 | 2,886 | ||||||
Pension actuarial income/loss net of tax expense/benefit of $460, $446 and $280 in 2013, 2014 and 2015 respectively | (728) | (728) | ||||||
Restricted stock amortization | 7,675 | 7,675 | ||||||
Other, shares | 23 | |||||||
Net income (loss) | 97,217 | 97,217 | ||||||
Dividends declared ($0.10, $0.10, $0.11 per share in 2013, 2014, 2015 respectively) | (5,232) | (5,232) | ||||||
Ending Balance at Dec. 31, 2014 | 666,718 | 697,760 | 376,353 | (6,424) | $ 620 | $ (401,712) | $ 121 | |
Ending Balance, Shares at Dec. 31, 2014 | 62,047 | (23,156) | 12,029 | |||||
Shares awarded under stock compensation plans | 3,662 | 3,656 | 0 | 0 | $ 6 | $ 0 | $ 0 | |
Shares awarded under stock compensation plans, shares | 518 | |||||||
Purchases of treasury stock | (34,483) | 0 | 0 | 0 | $ 0 | $ (34,483) | 0 | |
Purchases of treasury stock, shares | (1,519) | |||||||
Income tax benefit associated with stock compensation plans | 1,888 | 1,888 | 0 | 0 | 0 | $ 0 | 0 | |
Change in Fair value of interest rate swap agreements, net of tax expense/benefit of $6,514, $1,769 and $205 in 2013, 2014 and 2015 respectively | 335 | 0 | 0 | 335 | 0 | 0 | 0 | |
Pension actuarial income/loss net of tax expense/benefit of $460, $446 and $280 in 2013, 2014 and 2015 respectively | 457 | 0 | 0 | 457 | 0 | 0 | 0 | |
Restricted stock amortization | 9,814 | 9,814 | 0 | 0 | 0 | 0 | 0 | |
Other | 0 | 0 | 0 | 0 | $ 0 | 0 | 0 | |
Other, shares | 21 | |||||||
Net income (loss) | 86,311 | 0 | 86,311 | 0 | $ 0 | 0 | 0 | |
Dividends declared ($0.10, $0.10, $0.11 per share in 2013, 2014, 2015 respectively) | (5,654) | 0 | (5,654) | 0 | 0 | 0 | 0 | |
Ending Balance at Dec. 31, 2015 | $ 729,048 | $ 713,118 | $ 457,010 | $ (5,632) | $ 626 | $ (436,195) | $ 121 | |
Ending Balance, Shares at Dec. 31, 2015 | 62,586 | (24,675) | 12,029 | |||||
[1] | Paid-in capital amount represents a tax benefit related to the 5.0% Convertible Senior Notes due 2029 (the “5.0% Convertible Notes”), which were extinguished during the third quarter ended September 30, 2012 |
CONSOLIDATED STATEMENTS OF STO7
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Tax effect on fair value of interest rate swap agreements | $ 205 | $ 1,769 | $ 6,514 |
Tax expense (benefit) associated with change in pension actuarial (income) loss | $ 280 | ||
Dividends declared per common share | $ 0.11 | $ 0.10 | $ 0.10 |
Convertible senior notes due | 2,029 | ||
Accumulated Other Comprehensive Income (Loss) [Member] | |||
Tax effect on fair value of interest rate swap agreements | $ 205 | $ 1,769 | $ 6,514 |
Tax expense (benefit) associated with change in pension actuarial (income) loss | $ 280 | $ (446) | $ 460 |
Retained Earnings [Member] | |||
Dividends declared per common share | $ 0.11 | $ 0.10 | $ 0.10 |
Paid-In Capital [Member] | |||
Stated interest rate on debt agreement | 5.00% |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) | $ 86,311 | $ 97,217 | $ 81,618 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization of property, plant and equipment | 68,793 | 58,254 | 54,047 |
Provision for bad debt expense | 1,909 | 516 | 249 |
Other amortization | 649 | 1,165 | 1,561 |
Debt issuance cost amortization | 2,489 | 2,135 | 2,787 |
Debt discount amortization, net of premium amortization | 199 | 67 | (111) |
Stock - based compensation expense | 9,814 | 7,675 | 7,208 |
Deferred income taxes | 15,996 | 28,470 | 21,924 |
Equity interest in earnings of investee | (488) | (283) | (406) |
Asset impairment charges | 17,955 | 6,594 | 9,872 |
Loss (gain) on disposal of dealerships and property and equipment | (3,089) | (13,323) | 267 |
Loss (gain) on exit of leased dealerships | 1,848 | 302 | 2,915 |
(Gain) loss on retirement of debt | 28,238 | ||
Changes in assets and liabilities that relate to operations: | |||
Receivables | (9,048) | (2,436) | (9,092) |
Inventories | (291,100) | (56,203) | (78,646) |
Other assets | (19,785) | (278) | (9,834) |
Notes payable - floor plan - trade | 181,848 | 30,588 | 25,835 |
Trade accounts payable and other liabilities | 5,190 | 190 | (11,984) |
Total adjustments | (16,820) | 63,433 | 44,830 |
Net cash provided by (used in) operating activities | 69,491 | 160,650 | 126,448 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of businesses, net of cash acquired | (50,867) | (88,184) | |
Purchases of land, property and equipment | (173,249) | (146,432) | (157,617) |
Proceeds from sales of property and equipment | 1,397 | 14,122 | 769 |
Proceeds from sales of dealerships | 7,978 | 74,823 | |
Distributions from equity investee | 225 | 400 | 500 |
Net cash provided by (used in) investing activities | (163,649) | (107,954) | (244,532) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Net (repayments) borrowings on notes payable - floor plan - non-trade | 74,249 | (19,543) | 46,638 |
Borrowings on revolving credit facilities | 402,093 | 179,791 | 231,698 |
Repayments on revolving credit facilities | (397,890) | (179,791) | (237,874) |
Proceeds from issuance of long-term debt | 69,075 | 44,454 | 353,693 |
Debt issuance costs | (491) | (2,959) | (5,394) |
Principal payments on long-term debt | (19,424) | (19,482) | (19,426) |
Repurchase of debt securities | (233,573) | ||
Purchases of treasury stock | (34,483) | (53,046) | (17,067) |
Income tax benefit (expense) associated with stock compensation plans | 1,888 | 1,033 | 856 |
Issuance of shares under stock compensation plans | 3,662 | 3,274 | 2,171 |
Dividends paid | (5,078) | (5,261) | (3,993) |
Net cash provided by (used in) financing activities | 93,601 | (51,530) | 117,729 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (557) | 1,166 | (355) |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 4,182 | 3,016 | 3,371 |
CASH AND CASH EQUIVALENTS, END OF YEAR | 3,625 | 4,182 | 3,016 |
SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES: | |||
Change in fair value of cash flow interest rate swap agreements (net of tax benefit of $205 and expense of $1,769 and $6,514 in the years ended December 31, 2015, 2014 and 2013, respectively) | 335 | 2,886 | 10,629 |
Cash paid (received) during the period for: | |||
Interest, including amount capitalized | 71,328 | 71,776 | 81,626 |
Income taxes | $ 38,474 | $ 50,525 | $ 30,158 |
CONSOLIDATED STATEMENTS OF CAS9
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement Of Cash Flows [Abstract] | |||
Tax effect on fair value of interest rate swap agreements | $ 205 | $ 1,769 | $ 6,514 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | 1. Description of Business and Summary of Significant Accounting Policies Organization and Business - Sonic Automotive, Inc. (“Sonic” or the “Company”) is one of the largest automotive retailers in the United States (as measured by total revenue). As of December 31, 2015, Sonic operated 114 franchises in 13 states (representing 25 different brands of cars and light trucks) and 18 collision repair centers. For management and operational reporting purposes, Sonic groups certain franchises together that share management and inventory (principally used vehicles) into “stores.” As of December 31, 2015, Sonic operated 96 franchised dealership stores and three EchoPark ® ® Principles of Consolidation - All of Sonic’s dealership and non-dealership subsidiaries are wholly-owned and consolidated in the accompanying 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 Consolidated Financial Statements. Recent Accounting Pronouncements - In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-03 to simplify the presentation of debt issuance costs. The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts and premiums. The ASU also requires that the amortization of debt issuance costs be reported as interest expense. For public companies, this ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted, and Sonic elected to adopt and apply the guidance beginning with this Annual Report on Form 10-K for the year ended December 31, 2015. The adoption of this ASU was applied retrospectively and impacts the presentation of other assets and long-term debt amounts in the accompanying Consolidated Balance Sheets, Note 6, “Long-Term Debt,” Note 14, “Segment Information,” and certain other disclosures. Also in April 2015, the FASB issued ASU 2015-05 related to customer’s accounting for fees paid in a cloud computing arrangement. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2015 (early adoption is permitted). Sonic does not expect this ASU to have a significant impact on its consolidated financial position, results of operations or cash flows. In July 2015, the FASB issued ASU 2015-11 to clarify the subsequent measurement of inventory. This ASU requires an entity to measure inventory within the scope of this update at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The ASU excludes inventory measured using last-in, first-out and the retail inventory method. For public companies, this ASU is effective for fiscal years beginning after December 15, 2016 (early adoption is permitted). Sonic does not expect this ASU to have a significant impact on its consolidated financial position, results of operations or cash flows. In November 2015, the FASB issued ASU 2015-17 to simplify the presentation of deferred income taxes. The amendments in this ASU require deferred tax liabilities and assets to be classified as noncurrent in a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity must be netted and presented as a single amount is not affected by this ASU. For public companies, this ASU is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods (early adoption is permitted). Sonic expects this ASU to have a significant impact on the classification of deferred income tax assets and liabilities in its consolidated financial position. Reclassifications – Prior to Sonic’s adoption of ASU 2014-08 beginning with its Quarterly Report on Form 10-Q for the period ended June 30, 2014, individual dealership franchises sold, terminated or classified as held for sale were reported as discontinued operations. The results of operations of these dealership franchises for the years ended December 31, 2015, 2014 and 2013 are reported as discontinued operations for all periods presented. Dealership franchises sold during the year ended December 31, 2014 have not been reclassified to discontinued operations since they were disposed of after March 31, 2014 and they did not meet the criteria in ASU 2014-08. If, in future periods, Sonic determines that a dealership franchise should be reclassified from continuing operations to discontinued operations, previously reported Consolidated Statements of Income will be reclassified in order to reflect the most recent classification. Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires Sonic’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the accompanying Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, particularly related to allowance for credit loss, realization of inventory, intangible asset and deferred tax asset values, reserves for tax contingencies, legal matters, reserves for future commission revenue to be returned to the third-party provider for early termination of customer contracts (“chargebacks”), results reported as continuing and discontinued operations, insurance reserves, lease exit accruals and certain accrued expenses. Cash and Cash Equivalents - Sonic classifies cash and all highly liquid investments with a maturity of three months or less at the date of purchase, including short-term time deposits and government agency and corporate obligations, as cash and cash equivalents. In the event that Sonic is in a book overdraft cash position as of a reporting date, the book overdraft position is reclassified from cash and cash equivalents to trade accounts payable in the accompanying Consolidated Balance Sheets and is reflected as activity in trade accounts payable and other liabilities in the accompanying Consolidated Statements of Cash Flows. Sonic was in a book overdraft position in an amount of approximately $38.5 million and $37.1 million as of December 31, 2015 and 2014, respectively. Revenue Recognition - Sonic records revenue when vehicles are delivered to customers, when 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 the sales price must be reasonably expected to be collected. Sonic arranges financing for customers through various financial institutions and receives a commission from the financial institution either in a flat fee amount or in an amount equal to the difference between the interest rates charged to customers over the predetermined interest rates set by the financial institution. Sonic also receives commissions from the sale of various insurance contracts to customers. Sonic may be assessed a chargeback fee in the event of early cancellation of a loan or insurance contract by the customer. Finance and insurance commission revenue is recorded net of estimated chargebacks at the time the related contract is placed with the financial institution. Sonic also receives commissions from the sale of non-recourse third-party extended service contracts to customers. Under these contracts, the applicable manufacturer or third-party warranty company is directly liable for all warranties provided within the contract. Commission revenue from the sale of these third-party extended service contracts is recorded net of estimated chargebacks at the time of sale. As of December 31, 2015 and 2014, the amounts recorded as allowances for finance, insurance and service contract commission chargeback reserves were $17.0 million and $15.4 million, respectively, and were classified as other accrued liabilities and other long-term liabilities in the accompanying Consolidated Balance Sheets. Floor Plan Assistance - Sonic receives floor plan assistance payments from certain manufacturers. This assistance reduces the carrying value of Sonic’s new vehicle inventory and is recognized as a reduction of cost of sales at the time the vehicle is sold. Amounts recognized as a reduction of cost of sales for continuing operations were $42.1 million, $39.7 million and $37.9 million for the years ended December 31, 2015, 2014 and 2013, respectively. Contracts in Transit - Contracts in transit represent customer finance contracts evidencing loan agreements or lease agreements between Sonic, as creditor, and the customer, as borrower, to acquire or lease a vehicle in situations where a third-party finance source has given Sonic initial, non-binding approval to assume Sonic’s position as creditor. Funding and final approval from the finance source is provided upon the finance source’s review of the loan or lease agreement and related documentation executed by the customer at the dealership. These finance contracts are typically funded within ten days of the initial approval of the finance transaction given by the third-party finance source. The finance source is not contractually obligated to make the loan or lease to the customer until it gives its final approval and funds the transaction, and until such final approval is given, the contracts in transit represent amounts due from the customer to Sonic. Contracts in transit are included in receivables, net on the accompanying Consolidated Balance Sheets and totaled $196.3 million at December 31, 2015 and $194.0 million at December 31, 2014. Accounts Receivable - In addition to contracts in transit, Sonic’s accounts receivable primarily consist of amounts due from the manufacturers for repair services performed on vehicles with a remaining factory warranty and amounts due from third parties from the sale of parts. Sonic evaluates receivables for collectability based on the age of the receivable, the credit history of the customer and past collection experience. The allowance for doubtful accounts receivable was not significant at December 31, 2015 and 2014. Inventories - Inventories of new vehicles, recorded net of manufacturer credits, and used vehicles, including demonstrators, are stated at the lower of specific cost or market. Inventories of parts and accessories are accounted for using the “first-in, first-out” (“FIFO”) method of inventory accounting and are stated at the lower of FIFO cost or market. Other inventories are primarily service loaner vehicles and, to a lesser extent, vehicle chassis, other supplies and capitalized customer work-in-progress (open customer vehicle repair orders). Other inventories are stated at the lower of specific cost (depreciated cost for service loaner vehicles) or market. Sonic assesses the valuation of all its vehicle and parts inventories and maintains a reserve where the cost basis exceeds the fair market value. In making this assessment for new vehicles, used vehicles, service loaners and parts inventory, Sonic considers recent internal and external market data and the age of the vehicles to estimate the inventory’s fair market value. The risk with vehicle inventory is minimized by the fact that vehicles can be transferred within Sonic’s network of dealerships. The risk with parts inventories is minimized by the fact that excess or obsolete parts can also be transferred within Sonic’s network of dealerships or can usually be returned to the manufacturer. Recorded inventory reserves were not significant at December 31, 2015 and 2014. Property and Equipment - Property and equipment are stated at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. Sonic amortizes leasehold improvements over the shorter of the estimated useful life or the remaining lease life. This lease life includes renewal options if a renewal has been determined to be reasonably assured. The range of estimated useful lives is as follows: Leasehold and land improvements 10-30 years Buildings 10-30 years Parts and service equipment 7-10 years Office equipment and fixtures 3-10 years Company vehicles 3-5 years Sonic reviews the carrying value of property and equipment and other long-term assets (other than goodwill and franchise assets) for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If such an indication is present, Sonic compares the carrying amount of the asset to the estimated undiscounted cash flows related to those assets. Sonic concludes that an asset is impaired if the sum of such expected future cash flows is less than the carrying amount of the related asset. If Sonic determines an asset is impaired, the impairment loss would be the amount by which the carrying amount of the related asset exceeds its fair value. The fair value of the asset would be determined based on the quoted market prices, if available. If quoted market prices are not available, Sonic determines fair value by using a discounted cash flow model. See Note 4, “Property and Equipment,” for a discussion of impairment charges. Derivative Instruments and Hedging Activities - Sonic utilizes derivative financial instruments for the purpose of hedging the risks of certain identifiable and anticipated transactions. Commonly, the types of risks being hedged are those relating to the variability of cash flows caused by fluctuations in interest rates. Sonic documents its risk management strategy and hedge effectiveness at the inception of and during the term of each hedge. As of December 31, 2015, Sonic utilized interest rate cash flow swap agreements to effectively convert a portion of its LIBOR-based variable rate debt to a fixed rate. See Note 6, “Long-Term Debt,” for further discussion of derivative instruments and hedging activities. Goodwill - Goodwill is recognized to the extent that the purchase price of the acquisition exceeds the estimated fair value of the net assets acquired, including other identifiable intangible assets. In accordance with “Intangibles – Goodwill and Other” in the Accounting Standards Codification (the “ASC”), goodwill is tested for impairment at least annually, or more frequently when events or circumstances indicate that impairment might have occurred. The ASC also states that if an entity determines, based on an assessment of certain qualitative factors, that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then the first and second steps of the goodwill impairment test are unnecessary. For its annual impairment assessment as of October 1, 2015, Sonic elected to perform a quantitative step-one assessment. For purposes of goodwill impairment testing, Sonic has two reporting units, which consist of its traditional franchised dealerships and EchoPark®. The carrying value of Sonic’s goodwill (all of which is associated with its franchised dealerships reporting unit) totaled approximately $471.5 million at December 31, 2015. In evaluating goodwill for impairment, if the fair value of a reporting unit is less than its carrying value, Sonic is then required to proceed to the second step of the impairment test. The second step involves allocating the calculated fair value to all of the assets and liabilities of the reporting unit as if the calculated fair value was the purchase price in a business combination. This allocation would include assigning value to any previously unrecognized identifiable assets (including franchise assets) which means the remaining fair value that would be allocated to goodwill would be significantly reduced. See discussion regarding franchise and dealer agreements acquired prior to July 1, 2001 under the heading “Other Intangible Assets” below. Sonic would then compare the fair value of the goodwill resulting from this allocation process to the carrying value of the goodwill with the difference representing the amount of impairment. The purpose of this second step is only to determine the amount of goodwill that should be recorded at fair value on the balance sheet. The recorded amounts of other items on the balance sheet are not adjusted. Sonic utilized the Market Price (“MP”) method to estimate its enterprise value. The significant inputs in Sonic’s MP method include debt value, stock price and control premium. To the extent the reporting unit’s earnings decline significantly or there are changes in one or more of these inputs that would result in lower valuation results, it could cause the carrying value of the reporting unit to exceed its fair value and thus require Sonic to conduct the second step of the impairment test described above. Based on the results of Sonic’s step-one test as of October 1, 2015, its Franchised Dealerships’ fair value exceeds its carrying value. As a result, Sonic was not required to complete step two of the impairment evaluation according to “Intangibles – Goodwill and Other” in the ASC. See Note 5, “Intangible Assets and Goodwill,” for further discussion of goodwill. Other Intangible Assets - The principal identifiable intangible assets other than goodwill acquired in an acquisition are rights under franchise or dealer agreements with manufacturers. Sonic classifies franchise and dealer agreements as indefinite lived intangible assets as it has been Sonic’s experience that renewals have occurred without substantial cost or material modifications to the underlying agreements. As such, Sonic believes that its franchise and dealer agreements will contribute to cash flows for an indefinite period, therefore the carrying amount of franchise rights is not amortized. Franchise and dealer agreements acquired after July 1, 2001 have been included in other intangible assets, net on the accompanying Consolidated Balance Sheets. Prior to July 1, 2001, franchise and dealer agreements were recorded and amortized as part of goodwill and remain as part of goodwill on the accompanying Consolidated Balance Sheets. Other intangible assets acquired in acquisitions include favorable lease agreements with definite lives which are amortized on a straight-line basis over the remaining lease term. In accordance with “Intangibles – Goodwill and Other” in the ASC, Sonic evaluates other intangible assets for impairment annually (as of October 1) or more frequently if indicators of impairment exist. Sonic utilized a discounted cash flow (“DCF”) model to estimate the fair value of the franchise asset for each of its franchises with recorded franchise assets. The significant assumptions in Sonic’s DCF model include projected revenue, weighted average cost of capital (and estimates in the weighted average cost of capital inputs) and residual growth rates. In projecting the franchises’ revenue and growth rates, Sonic develops many assumptions which may include, but are not limited to, revenue growth, internal revenue enhancement initiatives, cost control initiatives, internal investment programs (such as training, technology and infrastructure) and inventory floor plan borrowing rates. Sonic’s expectation of revenue growth is in part driven by its estimates of new vehicle industry sales volume in future periods. Sonic believes the historic and projected industry sales volume is a good indicator of growth or contraction in the retail automotive industry. Based on the October 1, 2015 impairment test, Sonic determined that the fair value of the franchise assets exceeded the carrying value of the franchise assets for all but two of its franchises, resulting in a franchise asset impairment charge of $0.9 million during the year ended December 31, 2015, recorded in impairment charges in the accompanying Consolidated Statements of Income. In addition, Sonic impaired $2.4 million of franchise assets in the year ended December 31, 2015 related to the disposition of a franchise that was acquired in 2014 and disposed of in 2015. See Note 5, “Intangible Assets and Goodwill,” for further discussion of franchise and dealer agreements. In evaluating its definite life favorable lease assets for impairment, Sonic considered whether the leased asset was being utilized by the dealership and if the dealership operating activities could recover the value of the recorded favorable lease asset. Sonic evaluated its favorable lease assets for impairment as of October 1, 2015 and determined that no impairment was required. Insurance Reserves - Sonic has various self-insured and high deductible casualty and other insurance programs which require the Company to make estimates in determining the ultimate liability it may incur for claims arising under these programs. These insurance reserves are estimated by management using actuarial evaluations based on historical claims experience, claims processing procedures, medical cost trends and, in certain cases, a discount factor. As of December 31, 2015 and 2014, Sonic had $24.9 million and $23.9 million, respectively, reserved for such programs. Lease Exit Accruals - The majority of Sonic’s dealership properties are leased under long-term operating lease arrangements. When situations arise where the leased properties are no longer utilized in operations, Sonic records accruals for the present value of the lease payments, net of estimated sublease rentals, for the remaining life of the operating leases and other accruals necessary to satisfy the lease commitment to the landlord. These situations could include the relocation of an existing facility or the sale of a dealership where the buyer will not be subleasing the property for either the remaining term of the lease or for an amount of rent equal to Sonic’s obligation under the lease, or in situations where a store is closed as a result of the associated franchise being terminated by the manufacturer or Sonic and no other operations continue on the leased property. See Note 12, “Commitments and Contingencies,” for further discussion. Income Taxes - Income taxes are provided for the tax effects of transactions reported in the accompanying Consolidated Financial Statements and consist of taxes currently due plus deferred taxes. Deferred taxes are provided at enacted tax rates for the tax effects of carryforward items and temporary differences between the tax basis of assets and liabilities and their reported amounts. As a matter of course, the Company is regularly audited by various taxing authorities and, from time to time, these audits result in proposed assessments where the ultimate resolution may result in the Company owing additional taxes. Sonic’s management believes that the Company’s tax positions comply, in all material respects, with applicable tax law and that the Company has adequately provided for any reasonably foreseeable outcome related to these matters. From time to time, Sonic engages in transactions in which the tax consequences may be subject to uncertainty. Significant judgment is required in assessing and estimating the tax consequences of these transactions. Sonic determines whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, Sonic presumes that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information. A tax position that does not meet the more-likely-than-not recognition threshold is measured to determine the amount of benefit to be recognized in the financial statements. The tax position is measured at the largest amount of benefit that is likely to be realized upon ultimate settlement. Sonic adjusts its estimates periodically because of ongoing examinations by and settlements with the various taxing authorities, as well as changes in tax laws, regulations and precedent. See Note 7, “Income Taxes,” for further discussion of Sonic’s uncertain tax positions. Concentrations of Credit and Business Risk - Financial instruments that potentially subject Sonic to concentrations of credit risk consist principally of cash on deposit with financial institutions. At times, amounts invested with financial institutions exceed Federal Deposit Insurance Corporation (“FDIC”) insurance limits. Concentrations of credit risk with respect to receivables are limited primarily to automobile manufacturers, totaling approximately $90.3 million and $90.1 million at December 31, 2015 and 2014, respectively, and financial institutions (which includes manufacturer-affiliated finance companies and contracts in transit), totaling approximately $221.6 million and $215.4 million at December 31, 2015 and 2014, respectively. Credit risk arising from trade receivables from commercial customers is reduced by the large number of customers comprising the trade receivables balances. Sonic participates in a program with two of its manufacturer-affiliated finance companies wherein Sonic maintains a deposit balance with the lender that earns floor plan interest rebates based on the agreed upon rate. This deposit balance is not designated as a pre-payment of notes payable – floor plan, nor is it Sonic’s intent to use this amount to offset principal amounts owed under notes payable – floor plan in the future, although Sonic has the right and ability to do so. The deposit balance of $74.0 million and $57.5 million as of December 31, 2015 and 2014, respectively, is classified in other current assets in the accompanying Consolidated Balance Sheets, because there are restrictions on Sonic’s availability to withdraw these funds under certain circumstances. Changes in this deposit balance are classified as changes in other assets in the cash flows from operating activities section of the accompanying Consolidated Statements of Cash Flows. The interest rebate as a result of this deposit balance is classified as a reduction in interest expense, floor plan in the accompanying Consolidated Statements of Income. In the years ended December 31, 2015, 2014 and 2013, the reduction in interest expense, floor plan was approximately $1.5 million, $2.1 million and $1.0 million, respectively. Sonic is subject to a concentration of risk in the event of financial distress or other adverse events related to any of the automobile manufacturers whose franchised dealerships are included in Sonic’s brand portfolio. Sonic purchases its new vehicle inventory from various automobile manufacturers at the prevailing prices available to all franchised dealerships. In addition, Sonic finances a substantial portion of its new vehicle inventory with manufacturer-affiliated finance companies. Sonic’s results of operations could be adversely affected by the manufacturers’ inability to supply Sonic’s dealerships with an adequate supply of new vehicle inventory and related floor plan financing. Sonic also has concentrations of risk related to geographic markets in which its dealerships operate. Changes in overall economic, retail automotive or regulatory environments in one or more of these markets could adversely impact Sonic’s results of operations. Financial Instruments and Market Risks - As of December 31, 2015 and 2014, 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. See Note 11, “Fair Value Measurements,” for further discussion of the fair value and carrying value of Sonic’s fixed rate long-term debt. Sonic has variable rate notes payable - floor plan, revolving credit facilities and other variable rate notes that expose Sonic to risks caused by fluctuations in the underlying interest rates. The counterparties to Sonic’s swap transactions consist of large financial institutions. Sonic could be exposed to loss in the event of non-performance by any of these counterparties. See further discussion in Note 6, “Long-Term Debt.” Advertising - Sonic expenses advertising costs in the period incurred, net of earned cooperative manufacturer credits that represent reimbursements for specific, identifiable and incremental advertising costs. Advertising expense for continuing operations amounted to approximately $61.6 million, $57.4 million and $56.6 million for the years ended December 31, 2015, 2014 and 2013, respectively, and is classified as selling, general and administrative expense in the accompanying Consolidated Statements of Income. Sonic has cooperative advertising reimbursement agreements with certain automobile manufacturers it represents. These agreements require Sonic to provide the manufacturer with support for qualified, actual advertising expenditures in order to receive reimbursement under the agreements. It is uncertain whether or not Sonic would maintain the same level of advertising expenditures if these manufacturers discontinued their cooperative programs. Cooperative manufacturer credits classified as an offset to advertising expenses were approximately $24.2 million, $23.4 million and $21.8 million for the years ended December 31, 2015, 2014 and 2013, respectively. Segment Information - Sonic has determined it has two reporting segments, Franchised Dealerships and EchoPark ® ® |
Business Acquisitions and Dispo
Business Acquisitions and Dispositions | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Business Acquisitions and Dispositions | 2. Business Acquisitions and Dispositions Acquisitions Sonic’s growth strategy is focused on metropolitan markets, predominantly in the Southeast, Southwest, Midwest and California. Under Sonic’s amended and restated syndicated revolving credit agreement and syndicated floor plan credit facility (the “2014 Credit Facilities”), Sonic is restricted from making dealership acquisitions in any fiscal year if the aggregate cost of all such acquisitions occurring in any fiscal year is in excess of specific amounts without the written consent of the required lenders (as that term is defined in the 2014 Credit Facilities). With this restriction on Sonic’s ability to make dealership acquisitions, its acquisition growth strategy may be limited. See Note 6, “Long-Term Debt,” for further discussion of the 2014 Credit Facilities. Sonic did not acquire any dealership franchises during the year ended December 31, 2015. Sonic acquired two luxury franchises, one mid-line import franchise, and one domestic franchise during the year ended December 31, 2014, for an aggregate purchase price of approximately $50.9 million in cash, net of cash acquired, including the underlying assets and real estate. These cash outflows were funded by cash from operations and borrowings under Sonic’s floor plan facilities and mortgage notes payable. Dispositions As discussed in Note 1, “Description of Business and Summary of Significant Accounting Policies,” the FASB issued ASU 2014-08 which amended the definition of and reporting requirements for discontinued operations. Sonic elected to adopt and apply this guidance beginning with its Quarterly Report on Form 10-Q for the period ended June 30, 2014. The results of operations for those dealerships that were classified as discontinued operations as of March 31, 2014 are included in income (loss) from discontinued operations in the accompanying Consolidated Statements of Income and will continue to be reported within discontinued operations in the future. There were no unsold dealerships classified in discontinued operations at March 31, 2014. Beginning with disposals occurring during the second quarter ended June 30, 2014, only the operating results of disposals that represent a strategic shift that has (or will have) a major impact on Sonic’s results of operations and financial position will be included in the income (loss) from discontinued operations in the accompanying Consolidated Statements of Income. Sonic disposed of four dealership franchises during the year ended December 31, 2015 and nine dealership franchises during the year ended December 31, 2014. Sonic did not dispose of any dealerships during the year ended December 31, 2013. The dispositions during the years ended December 31, 2015 and 2014 generated cash of approximately $ 8.0 million and $74.8 million, respectively. In conjunction with dealership dispositions, Sonic has agreed to indemnify the buyers from certain liabilities and costs arising from operations or events that occurred prior to sale but which may or may not be known at the time of sale, including environmental liabilities and liabilities associated from the breach of representations or warranties made under the agreements. See Note 12, “Commitments and Contingencies,” for further discussion. Results associated with dealerships classified as discontinued operations were as follows: Year Ended December 31, 2015 2014 2013 (In thousands) Income (loss) from operations $ (1,421 ) $ (2,515 ) $ (978 ) Gain (loss) on disposal - 199 (457 ) Lease exit accrual adjustments and charges (1,462 ) 152 (2,582 ) Pre-tax income (loss) $ (2,883 ) $ (2,164 ) $ (4,017 ) Total revenues $ - $ - $ - Revenues and other activities associated with disposed dealerships that remain in continuing operations were as follows: Year Ended December 31, 2015 2014 2013 (In thousands) Income (loss) from operations $ (4,958 ) $ (2,475 ) $ (747 ) Gain (loss) on disposal 2,748 11,079 - Property and equipment impairment charges (10,096 ) (125 ) (5,855 ) Pre-tax income (loss) $ (12,306 ) $ 8,479 $ (6,602 ) Total revenues $ 95,168 $ 311,978 $ 421,639 In the ordinary course of business, Sonic evaluates its dealership franchises for possible disposition based on various strategic and performance criteria. The disposals during the year ended December 31, 2015 represent dealerships identified based on their unprofitable operations and other operational considerations. As of December 31, 2015, Sonic did not have any franchises classified as held for sale; however, in the future, Sonic may sell other franchises that are not currently held for sale. |
Inventories and Related Notes P
Inventories and Related Notes Payable - Floor Plan | 12 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories and Related Notes Payable - Floor Plan | 3. Inventories and Related Notes Payable - Floor Plan Inventories consist of the following: December 31, 2015 December 31, 2014 (In thousands) New vehicles $ 1,161,490 $ 924,818 Used vehicles 251,103 214,015 Service loaners 121,946 112,520 Parts, accessories and other 65,042 60,349 Net inventories $ 1,599,581 $ 1,311,702 Sonic finances all of its new and certain of its used vehicle inventory through standardized floor plan facilities with a syndicate of financial institutions and manufacturer-affiliated finance companies. The new and used vehicle floor plan facilities bear interest at variable rates based on prime and LIBOR. The weighted average interest rate for Sonic’s new vehicle floor plan facilities, for continuing operations and discontinued operations, was 1.61%, 1.57% and 1.86% for the years ended December 31, 2015, 2014 and 2013, respectively. Sonic’s floor plan interest expense related to the new vehicle floor plan arrangements is partially offset by amounts received from manufacturers in the form of floor plan assistance. Floor plan assistance received is capitalized in inventory and charged against cost of sales when the associated inventory is sold. For the years ended December 31, 2015, 2014 and 2013, for continuing operations and discontinued operations, Sonic recognized a reduction in cost of sales of approximately $42.1 million, $39.7 million and $37.9 million, respectively, related to manufacturer floor plan assistance. The weighted average interest rate for Sonic’s used vehicle floor plan facilities, for continuing operations and discontinued operations, was 1.72%, 1.80% and 2.78% for the years ended December 31, 2015, 2014 and 2013, respectively. The new and used vehicle floor plan facilities are collateralized by vehicle inventories and other assets, excluding franchise and dealer agreements, of the relevant dealership subsidiary. The new and used vehicle floor plan facilities contain a number of covenants, including, among others, covenants restricting Sonic with respect to the creation of liens and changes in ownership, officers and key management personnel. Sonic was in compliance with all of these restrictive covenants as of December 31, 2015. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | 4. Property and Equipment Property and equipment consists of the following: December 31, 2015 December 31, 2014 (In thousands) Land $ 260,275 $ 224,124 Building and improvements 679,712 582,261 Office equipment and fixtures 183,896 151,165 Parts and service equipment 79,219 68,248 Company vehicles 8,478 8,958 Construction in progress 55,010 81,180 Total, at cost 1,266,590 1,115,936 Less accumulated depreciation (379,688 ) (316,617 ) Property and equipment, net $ 886,902 $ 799,319 Interest capitalized in conjunction with construction projects and software development was approximately $1.9 million, $1.9 million and $2.5 million for the years ended December 31, 2015, 2014 and 2013, respectively. As of December 31, 2015, commitments for facility construction projects totaled approximately $64.8 million. During the years ended December 31, 2015, 2014 and 2013, property and equipment impairment charges were recorded in continuing operations as noted in the following table: Year Ended December 31, (In thousands) 2015 $ 12,210 2014 $ 4,394 2013 $ 9,272 Impairment charges related to continuing operations were related to land and buildings held for sale, the abandonment of construction and software development projects, the abandonment and disposal of dealership equipment or Sonic’s estimate that based on historical and projected operating losses for certain dealerships, these dealerships would not be able to recover recorded property and equipment asset balances. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | 5. Intangible Assets and Goodwill The changes in the carrying amount of franchise assets and goodwill for the years ended December 31, 2015 and 2014 were as follows: Franchise Assets Net Goodwill (In thousands) Balance, December 31, 2013 $ 79,535 $ 476,315 (1) Additions through current year acquisitions 7,500 10,176 Prior year acquisition allocations - (3 ) Reductions from dispositions (7,735 ) (10,559 ) Reductions from impairment (2,200 ) - Balance at December 31, 2014 $ 77,100 $ 475,929 (1) Prior year acquisition allocations 1,100 (870 ) Reductions from dispositions - (1,121 ) Reductions from impairment (3,300 ) (2,445 ) Balance at December 31, 2015 $ 74,900 $ 471,493 (1) (1) Net of accumulated impairment losses of $796,725. Goodwill Pursuant to applicable accounting pronouncements, Sonic tests goodwill for impairment annually (as of October 1) or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. If Sonic determines that the amount of its goodwill is impaired at any point in time, Sonic is required to reduce goodwill on its balance sheet. See the discussion under the heading “Goodwill” in Note 1, “Description of Business and Summary of Significant Accounting Policies,” for discussion of Sonic’s annual goodwill impairment evaluation. Sonic impaired approximately $2.4 million of goodwill in the year ended December 31, 2015 related to the disposition of a franchise that was acquired in 2014 and disposed of in 2015. Other Intangible Assets Other intangible assets consist of franchise assets and definite life intangible assets, and are presented net of accumulated amortization on the accompanying Consolidated Balance Sheets. Pursuant to applicable accounting pronouncements, Sonic evaluates its franchise assets and definite life intangible assets for impairment annually (as of October 1) or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of the asset below its carrying amount. Franchise asset impairment charges of $0.9 million, $2.2 million and $0.6 million were recorded in continuing operations for the years ended December 31, 2015, 2014 and 2013, respectively, based on the impairment evaluations performed as of October 1, 2015, 2014 and 2013, respectively. In addition, Sonic impaired $2.4 million of franchise assets in the year ended December 31, 2015 related to the disposition of a dealership that was acquired in 2014 and disposed of in 2015. There were no definite life intangible asset impairment charges in the years ended December 31, 2015, 2014 and 2013. Definite life intangible assets consist of the following: December 31, 2015 December 31, 2014 (In thousands) Favorable lease agreements $ 17,318 $ 17,318 Less accumulated amortization (11,342 ) (10,698 ) Definite life intangibles, net $ 5,976 $ 6,620 Amortization expense for definite life intangible assets was approximately $0.6 million, $1.2 million and $1.6 million for the years ended December 31, 2015, 2014 and 2013, respectively. The initial weighted average amortization period for lease agreements and definite life intangible assets outstanding at December 31, 2015 was 17 years. Expiration dates for these lease agreements range between 2020 and 2027. Future amortization expense is as follows: Year Ending December 31, (In thousands) 2016 $ 644 2017 644 2018 644 2019 644 2020 614 Thereafter 2,786 Total $ 5,976 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 6. Long-Term Debt Long-term debt consists of the following: December 31, 2015 December 31, 2014 (In thousands) 2014 Revolving Credit Facility (1) $ 4,203 $ - 7.0% Senior Subordinated Notes due 2022 (the "7.0% Notes") 200,000 200,000 5.0% Senior Subordinated Notes due 2023 (the "5.0% Notes") 300,000 300,000 Notes payable to a finance company bearing interest from 9.52% to 10.52% (with a weighted average of 10.19%) 820 4,367 Mortgage notes to finance companies-fixed rate, bearing interest from 3.51% to 7.03% 168,410 147,554 Mortgage notes to finance companies-variable rate, bearing interest at 1.25 to 3.50 percentage points above one-month LIBOR 150,961 118,368 Net debt discount and premium (2) (1,562 ) (1,761 ) Debt issuance costs (3) (12,884 ) (14,882 ) Other 4,634 4,884 Total debt $ 814,582 $ 758,530 Less current maturities (33,437 ) (30,802 ) Long-term debt $ 781,145 $ 727,728 (1) The interest rate on the 2014 Revolving Credit Facility was 2.25% above LIBOR at December 31, 2015 and 2014. (2) December 31, 2015 includes $1.3 million discount associated with the 7.0% Notes and $0.3 million discount associated with mortgage notes payable. December 31, 2014 includes $1.5 million discount associated with the 7.0% Notes, $0.1 million premium associated with notes payable to a finance company and $0.4 million discount associated with mortgage notes payable. (3) Debt issuance costs are presented here as of December 31, 2015 and 2014 as a result of the adoption of ASU 2015-03. See the heading “Recent Accounting Pronouncements” in Note 1, “Description of Business and Summary of Significant Accounting Policies,” for further discussion. Future maturities of long-term debt are as follows: Principal Net of Discount/ Premium Year Ending December 31, (In thousands) 2016 $ 33,681 $ 33,437 2017 38,550 38,428 2018 51,404 51,404 2019 19,222 19,222 2020 46,589 46,589 Thereafter 639,582 638,386 Total $ 829,028 $ 827,466 2014 Credit Facilities On July 23, 2014, Sonic entered into an amended and restated syndicated revolving credit facility (the “2014 Revolving Credit Facility”) and amended and restated syndicated new and used vehicle floor plan credit facilities (the “2014 Floor Plan Facilities” and, together with the 2014 Revolving Credit Facility, the “2014 Credit Facilities”), which are scheduled to mature on August 15, 2019. Availability under the 2014 Revolving Credit Facility is calculated as the lesser of $225.0 million or a borrowing base calculated based on certain eligible assets, less the aggregate face amount of any outstanding letters of credit under the 2014 Revolving Credit Facility (the “2014 Revolving Borrowing Base”). The 2014 Revolving Credit Facility may be increased at Sonic’s option up to $275.0 million upon satisfaction of certain conditions. Based on balances as of December 31, 2015, the 2014 Revolving Borrowing Base was approximately $208.2 million. As of December 31, 2015, Sonic had approximately $4.2 million of outstanding borrowings and $22.9 million in outstanding letters of credit under the 2014 Revolving Credit Facility, resulting in total borrowing availability of $181.1 million under the 2014 Revolving Credit Facility. The 2014 Floor Plan Facilities are comprised of a new vehicle revolving floor plan facility (the “2014 New Vehicle Floor Plan Facility”) and a used vehicle revolving floor plan facility (the “2014 Used Vehicle Floor Plan Facility”), subject to a borrowing base, in a combined amount up to $800.0 million. Sonic may, under certain conditions, request an increase in the 2014 Floor Plan Facilities to a maximum borrowing limit of up to $1.0 billion, which shall be allocated between the 2014 New Vehicle Floor Plan Facility and the 2014 Used Vehicle Floor Plan Facility as Sonic requests, with no more than 20% of the aggregate commitments allocated to the commitments under the 2014 Used Vehicle Floor Plan Facility. Outstanding obligations under the 2014 Floor Plan Facilities are guaranteed by Sonic and certain of its subsidiaries and are secured by a pledge of substantially all of the assets of Sonic and its subsidiaries. The amounts outstanding under the 2014 Credit Facilities bear interest at variable rates based on specified percentages above LIBOR. Sonic agreed under the 2014 Credit Facilities not to pledge any assets to any third party, subject to certain stated exceptions, including floor plan financing arrangements. In addition, the 2014 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 2014 Credit Facilities permit cash dividends on Sonic’s Class A and Class B common stock so long as no event of default (as defined in the 2014 Credit Facilities) has occurred and is continuing and provided that Sonic remains in compliance with all financial covenants under the 2014 Credit Facilities. There are no restrictions on retained earnings or net income. 7.0% Senior Subordinated Notes On July 2, 2012, Sonic issued $200.0 million in aggregate principal amount of unsecured senior subordinated 7.0% Notes which mature on July 15, 2022. The 7.0% Notes were issued at a price of 99.11% of the principal amount thereof, resulting in a yield to maturity of 7.125%. Sonic used the net proceeds from the issuance of the 7.0% Notes and issued approximately 4.1 million shares of its Class A common stock to repurchase all of the outstanding 5.0% Convertible Notes. Remaining proceeds from the issuance of the 7.0% Notes were used for general corporate purposes, including repurchases of shares of Class A common stock. Interest is payable semi-annually in arrears on January 15 and July 15 of each year. Sonic may redeem the 7.0% Notes in whole or in part at any time after July 15, 2017 at the following redemption prices, which are expressed as percentages of the principal amount: Redemption Price Beginning on July 15, 2017 103.500 % Beginning on July 15, 2018 102.333 % Beginning on July 15, 2019 101.167 % Beginning on July 15, 2020 and thereafter 100.000 % In addition, the indenture provides that holders of the 7.0% Notes may require Sonic to repurchase the 7.0% Notes at a purchase price equal to 101% of the par value of the 7.0% Notes, plus accrued and unpaid interest, if Sonic undergoes a change of control (as defined in the indenture). The indenture governing the 7.0% Notes contains certain specified restrictive covenants. Sonic has agreed not to pledge any assets to any third-party lender of senior subordinated debt except under certain limited circumstances. Sonic also has agreed to certain other limitations or prohibitions concerning the incurrence of other indebtedness, guarantees, liens, certain types of investments, certain transactions with affiliates, mergers, consolidations, issuance of preferred stock, cash dividends to stockholders, distributions, redemptions and the sale, assignment, lease, conveyance or disposal of certain assets. Specifically, the indenture governing Sonic’s 7.0% Notes limits Sonic’s ability to pay quarterly cash dividends on Sonic’s Class A and Class B common stock in excess of $0.10 per share. Sonic may only pay quarterly cash dividends on Sonic’s Class A and Class B common stock if Sonic complies with the terms of the indenture governing the 7.0% Notes. There are no restrictions on retained earnings or net income. Sonic was in compliance with all restrictive covenants as of December 31, 2015. Balances outstanding under Sonic’s 7.0% Notes are guaranteed by all of Sonic’s operating domestic subsidiaries. These guarantees are full and unconditional and joint and several. The parent company has no independent assets or operations. The subsidiaries that are not guarantors are considered to be minor. Sonic’s obligations under the 7.0% Notes may be accelerated by the holders of 25% of the outstanding principal amount of the 7.0% Notes then outstanding if certain events of default occur, including: (1) defaults in the payment of principal or interest when due; (2) defaults in the performance, or breach, of Sonic’s covenants under the 7.0% Notes; and (3) certain defaults under other agreements under which Sonic or its subsidiaries have outstanding indebtedness in excess of $35.0 million. 5.0% Senior Subordinated Notes On May 9, 2013, Sonic issued $300.0 million in aggregate principal amount of unsecured senior subordinated 5.0% Notes which mature on May 15, 2023. The 5.0% Notes were issued at a price of 100.0% of the principal amount thereof. Sonic used the net proceeds from the issuance of the 5.0% Notes to repurchase all of the outstanding 9.0% Senior Subordinated Notes due 2018. Remaining proceeds from the issuance of the 5.0% Notes were used for general corporate purposes. Interest is payable semi-annually in arrears on May 15 and November 15 of each year. Sonic may redeem the 5.0% Notes in whole or in part at any time on or after May 15, 2018 at the following redemption prices, which are expressed as percentages of the principal amount: Redemption Price Beginning on May 15, 2018 102.500 % Beginning on May 15, 2019 101.667 % Beginning on May 15, 2020 100.833 % Beginning on May 15, 2021 and thereafter 100.000 % In addition, on or before May 15, 2016, Sonic may redeem up to 35% of the aggregate principal amount of the 5.0% Notes at a redemption price equal to 105% of the par value of the 5.0% Notes plus accrued and unpaid interest with proceeds from certain equity offerings. On or before May 15, 2018, Sonic may redeem all or a part of the aggregate principal amount of the 5.0% Notes at a redemption price equal to 100% of the principal amount of the 5.0% Notes redeemed plus an applicable premium (as defined in the indenture) and any accrued and unpaid interest as of the redemption date. The indenture also provides that holders of the 5.0% Notes may require Sonic to repurchase the 5.0% Notes at a purchase price equal to 101% of the par value of the 5.0% Notes, plus accrued and unpaid interest, if Sonic undergoes a change of control (as defined in the indenture). The indenture governing the 5.0% Notes contains certain specified restrictive covenants. Sonic has agreed not to pledge any assets to any third-party lender of senior subordinated debt except under certain limited circumstances. Sonic also has agreed to certain other limitations or prohibitions concerning the incurrence of other indebtedness, guarantees, liens, certain types of investments, certain transactions with affiliates, mergers, consolidations, issuance of preferred stock, cash dividends to stockholders, distributions, redemptions and the sale, assignment, lease, conveyance or disposal of certain assets. Specifically, the indenture governing Sonic’s 5.0% Notes limits Sonic’s ability to pay quarterly cash dividends on Sonic’s Class A and Class B common stock in excess of $0.10 per share. Sonic may only pay quarterly cash dividends on Sonic’s Class A and Class B common stock if Sonic complies with the terms of the indenture governing the 5.0% Notes. There are no restrictions on retained earnings or net income. Sonic was in compliance with all restrictive covenants as of December 31, 2015. Balances outstanding under Sonic’s 5.0% Notes are guaranteed by all of Sonic’s operating domestic subsidiaries. These guarantees are full and unconditional and joint and several. The parent company has no independent assets or operations. The subsidiaries that are not guarantors are considered to be minor. Sonic’s obligations under the 5.0% Notes may be accelerated by the holders of 25% of the outstanding principal amount of the 5.0% Notes then outstanding if certain events of default occur, including: (1) defaults in the payment of principal or interest when due; (2) defaults in the performance, or breach, of Sonic’s covenants under the 5.0% Notes; and (3) certain defaults under other agreements under which Sonic or its subsidiaries have outstanding indebtedness in excess of $50.0 million. Notes Payable to a Finance Company Three notes payable were assumed in connection with an acquisition in 2004 (the “Assumed Notes”). Sonic recorded the Assumed Notes at fair value using an interest rate of 5.35%. The interest rate used to calculate the fair value was based on a quoted market price for notes with similar terms as of the date of assumption. As a result of calculating the fair value, a premium of $7.3 million was recorded that will be amortized over the lives of the Assumed Notes. At December 31, 2015, one note remained outstanding (due August 2016) with an outstanding principal balance of approximately $0.8 million. Mortgage Notes During the year ended December 31, 2015, Sonic obtained approximately $69.1 million in mortgage financing related to eight of its dealership properties. As of December 31, 2015, the weighted average interest rate was 3.74% and the total outstanding principal balance was approximately $319.4 million, related to approximately 37% of Sonic’s operating locations. These mortgage notes require monthly payments of principal and interest through maturity and are secured by the underlying properties and contain certain cross-default provisions. Maturity dates for these mortgage notes range between 2016 and 2033. Covenants Sonic agreed under the 2014 Credit Facilities not to pledge any assets to any third party (other than those explicitly allowed under the amended terms of the 2014 Credit Facilities), including other lenders, subject to certain stated exceptions, including floor plan financing arrangements. In addition, the 2014 Credit Facilities contain certain negative covenants, including covenants which could restrict or prohibit the payment of dividends, capital expenditures and material dispositions of assets as well as other customary covenants and default provisions. Sonic was in compliance with the covenants under the 2014 Credit Facilities as of December 31, 2015. Financial covenants include required specified ratios (as each is defined in the 2014 Credit Facilities) 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 5.50 December 31, 2015 actual 1.19 1.78 4.08 The 2014 Credit Facilities contain events of default, including cross defaults to other material indebtedness, change of control events and events of default customary for syndicated commercial credit facilities. Upon the future occurrence of an event of default, Sonic could be required to immediately repay all outstanding amounts under the 2014 Credit Facilities. In addition, many of Sonic’s facility leases are governed by a guarantee agreement between the landlord and Sonic that contains financial and operating covenants. The financial covenants are identical to those under the 2014 Credit Facilities with the exception of one 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 December 31, 2015, the ratio was 3.81 to 1.00. Derivative Instruments and Hedging Activities Sonic has interest rate cash flow swap agreements to effectively convert a portion of its LIBOR-based variable rate debt to a fixed rate. The fair value of these swap positions at December 31, 2015 was a net liability of approximately $10.0 million, with $5.1 million included in other accrued liabilities and $4.9 million included in other long-term liabilities in the accompanying Consolidated Balance Sheets. The fair value of these swap positions at December 31, 2014 was a net liability of approximately $11.1 million, with $8.2 million included in other accrued liabilities and $3.5 million included in other long-term liabilities, offset partially by an asset of approximately $0.6 million included in other assets in the accompanying Consolidated Balance Sheets. Under the terms of these cash flow swaps, Sonic will receive and pay interest based on the following: Notional Amount Pay Rate Receive Rate (1) Maturing Date (In millions) $ 2.5 7.100% one-month LIBOR + 1.50% July 10, 2017 $ 8.0 4.655% one-month LIBOR December 10, 2017 $ 7.0 (2) 6.860% one-month LIBOR + 1.25% August 1, 2017 $ 6.2 (2) 6.410% one-month LIBOR + 1.25% September 12, 2017 $ 100.0 2.065% one-month LIBOR June 30, 2017 $ 100.0 2.015% one-month LIBOR June 30, 2017 $ 200.0 0.788% one-month LIBOR July 1, 2016 $ 50.0 (3) 1.320% one-month LIBOR July 1, 2017 $ 250.0 (4) 1.887% one-month LIBOR June 30, 2018 $ 25.0 (3) 2.080% one-month LIBOR July 1, 2017 $ 100.0 1.560% one-month LIBOR July 1, 2017 $ 125.0 (3) 1.303% one-month LIBOR July 1, 2017 $ 125.0 (5) 1.900% one-month LIBOR July 1, 2018 $ 50.0 (6) 2.320% one-month LIBOR July 1, 2019 $ 200.0 (6) 2.313% one-month LIBOR July 1, 2019 (1) The one-month LIBOR rate was approximately 0.428% at December 31, 2015. (2) Changes in fair value are recorded through earnings. (3) The effective date of these forward-starting swaps is July 1, 2016. (4) The effective date of this forward-starting swap is July 3, 2017. (5) The effective date of this forward-starting swap is July 1, 2017. (6) The effective date of these forward-starting swaps is July 2, 2018. During the second quarter ended June 30, 2015, Sonic entered into four forward-starting interest rate cash flow swap agreements. These interest rate swaps have been designated and qualify as cash flow hedges and, as a result, changes in the fair value of these swaps are recorded in other comprehensive income (loss) before taxes in the accompanying Consolidated Statements of Comprehensive Income. For interest rate swaps not designated as cash flow hedges, the changes in the fair value of these swaps are recognized through earnings and are included in interest expense, other, net, in the accompanying Consolidated Statements of Income. For the years ended December 31, 2015, 2014 and 2013, these items were a benefit of approximately $0.6 million, $0.5 million and $0.9 million, respectively. For the cash flow swaps that qualify as cash flow hedges, the changes in the fair value of these swaps have been recorded in other comprehensive income (loss), net of related income taxes, in the accompanying Consolidated Statements of Comprehensive Income and are disclosed in the supplemental schedule of non-cash financing activities in the accompanying Consolidated Statements of Cash Flows. The incremental interest expense (the difference between interest paid and interest received) related to these cash flow swaps was approximately $7.8 million, $10.7 million and $11.8 million for the years ended December 31, 2015, 2014 and 2013, respectively, and is included in interest expense, other, net, in the accompanying Consolidated Statements of Income and the interest paid amount disclosed in the supplemental disclosures of cash flow information in the accompanying Consolidated Statements of Cash Flows. The estimated net expense expected to be reclassified out of accumulated other comprehensive income (loss) into results of operations during the next twelve months is approximately $3.2 million. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes The provision for income taxes for continuing operations - (benefit) expense consists of the following: Year Ended December 31, 2015 2014 2013 (In thousands) Current: Federal $ 36,241 $ 36,874 $ 33,367 State 6,414 5,771 5,647 Total current 42,655 42,645 39,014 Deferred 14,410 20,523 5,329 Total provision for income taxes for continuing operations - (benefit) expense $ 57,065 $ 63,168 $ 44,343 The reconciliation of the statutory federal income tax rate with Sonic’s federal and state overall effective income tax rate from continuing operations is as follows: Year Ended December 31, 2015 2014 2013 Statutory federal income tax rate 35.00 % 35.00 % 35.00 % Effective state income tax rate 3.26 % 3.15 % 3.22 % Valuation allowance adjustments (0.45 %) (0.14 %) 0.33 % Uncertain tax positions (0.14 %) (0.08 %) (1.76 %) Other 1.64 % 1.13 % (2.42 %) Effective income tax rate 39.31 % 39.06 % 34.37 % Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. Significant components of Sonic’s deferred tax assets and liabilities are as follows: December 31, 2015 December 31, 2014 (In thousands) Deferred tax assets: Accruals and reserves $ 33,397 $ 36,633 State net operating loss carryforwards 10,187 10,307 Fair value of interest rate swaps 3,793 4,203 Interest and state taxes associated with the liability for uncertain income tax positions 1,725 1,842 Other 864 792 Total deferred tax assets 49,966 53,777 Deferred tax liabilities: Basis difference in inventory (1,530 ) (1,597 ) Basis difference in property and equipment (9,850 ) (9,655 ) Basis difference in goodwill (86,504 ) (72,696 ) Other (3,249 ) (3,861 ) Total deferred tax liability (101,133 ) (87,809 ) Valuation allowance (5,880 ) (6,534 ) Net deferred tax asset (liability) $ (57,047 ) $ (40,566 ) Net short-term deferred tax asset balances were approximately $13.6 million and $13.2 million at December 31, 2015 and 2014, respectively, and are recorded in other current assets on the accompanying Consolidated Balance Sheets. Net long-term deferred tax asset balances were approximately $2.8 million and $3.8 million at December 31, 2015 and 2014, respectively, and are recorded in other assets on the accompanying Consolidated Balance Sheets. Net short-term deferred tax liability balances were approximately $0.1 million and zero at December 31, 2015 and 2014, respectively, and are recorded in other accrued liabilities on the accompanying Consolidated Balance Sheets. Net long-term deferred tax liability balances were approximately $73.3 million and $57.6 million at December 31, 2015 and 2014, respectively, and are recorded in deferred income taxes on the accompanying Consolidated Balance Sheets. Sonic has approximately $280.6 million in gross state net operating loss carryforwards that will expire between 2017 and 2035. Management reviews these carryforward positions, the time remaining until expiration and other opportunities to realize these carryforwards in making an assessment as to whether it is more likely than not that these carryforwards will be realized. The results of future operations, regulatory framework of the taxing authorities and other related matters cannot be predicted with certainty and, therefore, differences from the assumptions used in the development of management’s judgment could occur. As of December 31, 2015, Sonic had recorded a valuation allowance amount of approximately $5.9 million related to certain state net operating loss carryforward deferred tax assets as Sonic determined that it would not be able to generate sufficient state taxable income in the related entities to realize the accumulated net operating loss carryforward balances. At January 1, 2015, Sonic had liabilities of approximately $6.9 million recorded related to unrecognized tax benefits. Included in the liabilities related to unrecognized tax benefits at January 1, 2015, was approximately $1.2 million related to interest and penalties which Sonic has estimated may be paid as a result of its tax positions. It is Sonic’s policy to classify the expense related to interest and penalties to be paid on underpayments of income taxes within income tax expense. A summary of the changes in the liability related to Sonic’s unrecognized tax benefits is presented below. 2015 2014 2013 (In thousands) Unrecognized tax benefit liability, January 1 (1) $ 5,740 $ 6,693 $ 9,097 Prior period positions: Increases 175 181 409 Decreases - (66 ) (233 ) Increases from current period positions 184 195 799 Settlements - (897 ) (1,721 ) Lapse of statute of limitations (1,114 ) (170 ) (1,164 ) Other (230 ) (196 ) (494 ) Unrecognized tax benefit liability, December 31 (2) $ 4,755 $ 5,740 $ 6,693 (1) Excludes accrued interest and penalties of $1.2 million, $1.1 million and $2.4 million at January 1, 2015, 2014 and 2013, respectively. (2) Excludes accrued interest and penalties of $1.1 million, $1.2 million and $1.1 million at December 31, 2015, 2014 and 2013, respectively. Amount presented is net of state net operating losses of $0.6 million, $0.8 million and $1.0 million at December 31, 2015, 2014 and 2013, respectively. Approximately $2.6 million and $2.8 million of the unrecognized tax benefits as of December 31, 2015 and 2014, respectively, would ultimately affect the income tax rate if recognized. Included in the December 31, 2015 recorded liability is approximately $1.1 million related to interest and penalties which Sonic has estimated may be paid as a result of its tax positions. Sonic does not anticipate any significant changes in its unrecognized tax benefit liability within the next twelve months. Sonic and its subsidiaries are subject to U.S. federal income tax as well as income tax of multiple state jurisdictions. Sonic’s 2012 through 2015 U.S. federal income tax returns remain open to examination by the Internal Revenue Service. Sonic and its subsidiaries’ state income tax returns remain open to examination by state taxing authorities for years ranging from 2006 to 2015. |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Parties | 8. Related Parties Certain of Sonic’s dealerships purchase the zMAX micro-lubricant from Oil-Chem Research Company (“Oil-Chem”), a subsidiary of Speedway Motorsports, Inc. (“SMI”), for resale to Fixed Operations customers of Sonic’s dealerships in the ordinary course of business. Sonic’s Executive Chairman, Mr. O. Bruton Smith, is also the Executive Chairman of SMI, and Mr. Smith’s son, Mr. Marcus G. Smith, a greater than 10% beneficial owner of Sonic, is the Chief Executive Officer and President of SMI. Total purchases from Oil-Chem by Sonic dealerships were approximately $2.1 million, $2.1 million and $2.0 million in the years ended December 31, 2015, 2014 and 2013, respectively. Sonic participates in various aircraft-related transactions with Sonic Financial Corporation (“SFC”), an entity jointly controlled by Messrs. O. Bruton Smith, B. Scott Smith, David Bruton Smith and Marcus G. Smith. Such transactions include, but are not limited to, the use of aircraft owned by SFC for business-related travel by Sonic executives, a management agreement with SFC for storage and maintenance of aircraft leased by Sonic from unrelated third parties, and the use of Sonic’s aircraft for business-related travel by certain affiliates of SFC. Sonic incurred net expenses of approximately $0.6 million, $0.5 million and $0.9 million in the years ended December 31, 2015, 2014 and 2013, respectively, in aircraft-related transactions with these related parties. Sonic incurred net expenses of approximately $0.8 million, $0.6 million and $0.6 million in the years ended December 31, 2015, 2014 and 2013, respectively, related to other transactions with various SMI subsidiaries, consisting primarily of merchandise and apparel purchases. |
Capital Structure and Per Share
Capital Structure and Per Share Data | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Capital Structure and Per Share Data | 9. Capital Structure and Per Share Data Preferred Stock - Sonic has 3,000,000 shares of “blank check” preferred stock authorized with such designations, rights and preferences as may be determined from time to time by the Board of Directors. The Board of Directors has designated 300,000 shares of preferred stock as Class A convertible preferred stock, par value $0.10 per share (the “Preferred Stock”), which is divided into 100,000 shares of Series I Preferred Stock, 100,000 shares of Series II Preferred Stock, and 100,000 shares of Series III Preferred Stock. There were no shares of Preferred Stock issued or outstanding at December 31, 2015 and 2014. Common Stock - Sonic has two classes of common stock. Sonic has authorized 100,000,000 shares of Class A common stock at a par value of $0.01 per share. Class A common stock entitles its holder to one vote per share. Sonic has also authorized 30,000,000 shares of Class B common stock at a par value of $0.01 per share. Class B common stock entitles its holder to ten votes per share, except in certain circumstances. Each share of Class B common stock is convertible into one share of Class A common stock either upon voluntary conversion at the option of the holder, or automatically upon the occurrence of certain events, as provided in Sonic’s charter. The two classes of common stock share equally in dividends and in the event of liquidation. Share Repurchases – Prior to December 31, 2015, Sonic’s Board of Directors had authorized Sonic to expend up to $495.0 million to repurchase shares of its Class A common stock. As of December 31, 2015, Sonic had repurchased a total of approximately 24.7 million shares of Class A common stock at an average price per share of approximately $17.68 and had redeemed 13,801.5 shares of Class A convertible preferred stock at an average price of $1,000 per share. As of December 31, 2015, Sonic had approximately $45.0 million remaining under the Board’s authorization. See Note 15, “Subsequent Events,” for further discussion. Per Share Data - The calculation of diluted earnings per share considers the potential dilutive effect of options and shares under Sonic’s stock compensation plans and Class A common stock purchase warrants. Certain of Sonic’s non-vested restricted stock and restricted stock units contain rights to receive non-forfeitable dividends and, thus, are considered participating securities and are included in the two-class method of computing earnings per share. The following table illustrates the dilutive effect of such items on earnings per share for the years ended December 31, 2015, 2014 and 2013: Year Ended December 31, 2015 Income (Loss) Income (Loss) From Continuing From Discontinued Operations Operations Net Income (Loss) Weighted Per Per Per Average Share Share Share Shares Amount Amount Amount Amount Amount Amount (In thousands, except per share amounts) Earnings (loss) and shares 50,489 $ 88,091 $ (1,780 ) $ 86,311 Effect of participating securities: Non-vested restricted stock and restricted stock units (36 ) - (36 ) Basic earnings (loss) and shares 50,489 $ 88,055 $ 1.74 $ (1,780 ) $ (0.03 ) $ 86,275 $ 1.71 Effect of dilutive securities: Stock compensation plans 394 Diluted earnings (loss) and shares 50,883 $ 88,055 $ 1.73 $ (1,780 ) $ (0.03 ) $ 86,275 $ 1.70 Year Ended December 31, 2014 Income (Loss) Income (Loss) From Continuing From Discontinued Operations Operations Net Income (Loss) Weighted Per Per Per Average Share Share Share Shares Amount Amount Amount Amount Amount Amount (In thousands, except per share amounts) Earnings (loss) and shares 52,065 $ 98,559 $ (1,342 ) $ 97,217 Effect of participating securities: Non-vested restricted stock and restricted stock units (311 ) - (311 ) Basic earnings (loss) and shares 52,065 $ 98,248 $ 1.89 $ (1,342 ) $ (0.03 ) $ 96,906 $ 1.86 Effect of dilutive securities: Stock compensation plans 498 Diluted earnings (loss) and shares 52,563 $ 98,248 $ 1.87 $ (1,342 ) $ (0.03 ) $ 96,906 $ 1.84 Year Ended December 31, 2013 Income (Loss) Income (Loss) From Continuing From Discontinued Operations Operations Net Income (Loss) Weighted Per Per Per Average Share Share Share Shares Amount Amount Amount Amount Amount Amount (In thousands, except per share amounts) Earnings (loss) and shares 52,556 $ 84,678 $ (3,060 ) $ 81,618 Effect of participating securities: Non-vested restricted stock and restricted stock units (601 ) - (601 ) Basic earnings (loss) and shares 52,556 $ 84,077 $ 1.60 $ (3,060 ) $ (0.06 ) $ 81,017 $ 1.54 Effect of dilutive securities: Stock compensation plans 385 Diluted earnings (loss) and shares 52,941 $ 84,077 $ 1.59 $ (3,060 ) $ (0.06 ) $ 81,017 $ 1.53 In addition to the stock options included in the tables above, options to purchase approximately 0.4 million, 0.4 million and 0.8 million shares of Class A common stock were outstanding during the years ended December 31, 2015, 2014 and 2013, respectively, but were not included in the computation of diluted net income per share because the options were not dilutive. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2015 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plans | 10. Employee Benefit Plans Substantially all of the employees of Sonic are eligible to participate in a 401(k) plan. Contributions by Sonic to the 401(k) plan were approximately $7.7 million, $7.4 million and $7.2 million in the years ended December 31, 2015, 2014 and 2013, respectively. Stock Compensation Plans Sonic currently has three active stock compensation plans: the Sonic Automotive, Inc. 2004 Stock Incentive Plan (the “2004 Plan”), the Sonic Automotive, Inc. 2012 Stock Incentive Plan (the “2012 Plan”), and the Sonic Automotive, Inc. 2012 Formula Restricted Stock Plan for Non-Employee Directors (the “2012 Formula Plan”). Effective February 19, 2014, new grants of equity awards under the 2004 Plan were no longer permitted. Stock options outstanding, non-vested restricted stock awards and restricted stock units previously granted under the 2004 Plan were unaffected by this change in plan status. Sonic has one additional terminated plan with outstanding grants as of December 31, 2015: the Sonic Automotive, Inc. 1997 Stock Option Plan. Collectively, these plans are referred to as the “Stock Plans.” During the second quarter of 2012, Sonic’s stockholders voted to approve the 2012 Plan and the 2012 Formula Plan, with authorization for issuance of 2,000,000 shares of Class A common stock and 300,000 shares of Class A common stock, respectively. During the second quarter of 2015, Sonic’s stockholders voted to increase the number of shares of Class A common stock authorized for issuance under the 2012 Plan from 2,000,000 shares to 4,000,000 shares. The Stock Plans were adopted by the Board of Directors in order to attract and retain key personnel. Under the 2012 Plan and the 2004 Plan, options to purchase shares of Class A common stock may be granted to key employees of Sonic and its subsidiaries and to officers, directors, consultants and other individuals providing services to Sonic. The options are granted at the fair market value of Sonic’s Class A common stock at the date of grant, typically vest over a period ranging from six months to three years, are exercisable upon vesting and typically expire ten years from the date of grant. The 2012 Plan and the 2004 Plan also authorized the issuance of restricted stock awards and restricted stock units. Restricted stock award and restricted stock unit grants under the 2012 Plan and the 2004 Plan typically vest over a period ranging from one to three years, but may be longer in certain cases. The 2012 Formula Plan provides for grants of restricted stock awards to non-employee directors and restrictions on those shares expire on the earlier of the first anniversary of the grant date or the day before the next annual meeting of Sonic’s stockholders. Individuals holding non-vested restricted stock awards under the 2012 Plan, the 2012 Formula Plan and the 2004 Plan have voting rights and certain grants may receive dividends on non-vested shares. Individuals holding restricted stock units as of December 31, 2015 granted under the 2012 Plan and the 2004 Plan do not have voting or dividend rights. Sonic issues new shares of Class A common stock to employees and directors to satisfy its option exercise and stock grant obligations. To offset the effects of these transactions, Sonic has historically bought back shares of Class A common stock after considering cash flow, market conditions and other factors. A summary of the status of the options related to the Stock Plans is presented below: Options Outstanding Exercise Price Per Share (Low - High) Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (In thousands, except per share data, term in years) Balance at December 31, 2014 1,064 $ 1.81 - 25.05 $ 17.62 2.2 $ 10,444 Exercised (325 ) $ 1.81 - 23.94 $ 17.18 Forfeited (25 ) $ 19.23 - 30.07 $ 24.83 Balance at December 31, 2015 714 $ 1.81 - 30.07 $ 17.56 1.6 $ 5,605 Exercisable 714 $ 1.81 - 30.07 $ 17.56 1.6 $ 5,605 Year Ended December 31, 2015 2014 2013 (In thousands, except per option data) Intrinsic value of options exercised $ 2,511 $ 1,187 $ 1,657 Sonic recognizes compensation expense within selling, general and administrative expenses related to the options in the Stock Plans. No stock option compensation expense was recognized during the years ended December 31, 2015, 2014 or 2013 as all previous option grants were completely vested prior to December 31, 2012. A summary of the status of non-vested restricted stock award and restricted stock unit grants related to the Stock Plans is presented below: Non-vested Restricted Stock Awards and Restricted Stock Units Weighted Average Grant Date Fair Value per Share (Shares in thousands) Balance at December 31, 2014 889 $ 21.33 Granted 1,443 $ 23.74 Forfeited (133 ) $ 21.48 Vested (368 ) $ 20.80 Balance at December 31, 2015 1,831 $ 23.33 During the year ended December 31, 2015, approximately 1.4 million restricted stock units were awarded to Sonic’s executive officers and other key associates under the 2012 Plan. This amount includes 1.0 million restricted stock units awarded to a single executive officer as a long-term incentive, which vests in three tranches over 15 years and is subject to financial performance conditions for the year ending December 31, 2016, continuation of employment and compliance with any restrictive covenants contained in an agreement between Sonic and the executive officer. The remainder of these awards were made in connection with establishing the objective performance criteria for the year ended December 31, 2015 incentive compensation and vest over two to three years. The majority of the restricted stock units awarded to executive officers and other key associates are subject to forfeiture, in whole or in part, based upon specified measures of Sonic’s earnings per share performance for the year ended December 31, 2015, continuation of employment and compliance with any restrictive covenants contained in an agreement between Sonic and the respective officer or other key associate. Also in the year ended December 31, 2015, approximately 21,000 non-vested restricted stock awards were granted to Sonic’s Board of Directors pursuant to the 2012 Formula Plan and vest on the earlier of the first anniversary of the grant date or the day before the next annual meeting of Sonic’s stockholders. Sonic recognized compensation expense within selling, general and administrative expenses related to non-vested restricted stock awards and restricted stock units of approximately $9.8 million, $7.7 million and $7.2 million in the years ended December 31, 2015, 2014 and 2013, respectively. Tax benefits recognized related to the compensation expenses were approximately $3.7 million, $2.9 million and $2.7 million for the years ended December 31, 2015, 2014 and 2013, respectively. Total compensation cost related to non-vested restricted stock awards and restricted stock units not yet recognized at December 31, 2015 was approximately $34.5 million and is expected to be recognized over a weighted average period of approximately 9.7 years. Supplemental Executive Retirement Plan On December 7, 2009, the Compensation Committee of Sonic’s Board of Directors approved and adopted the Sonic Automotive, Inc. Supplemental Executive Retirement Plan (the “SERP”) to be effective as of January 1, 2010. The SERP is a nonqualified deferred compensation plan that is unfunded for federal tax purposes. The SERP includes 12 active or former members of senior management at December 31, 2015. The purpose of the SERP is to attract and retain key members of management by providing a retirement benefit in addition to the benefits provided by Sonic’s tax-qualified and other nonqualified deferred compensation plans. The following table sets forth the status of the SERP: Year Ended December 31, 2015 2014 (In thousands) Change in projected benefit obligation: Obligation at January 1, 2015 $ 7,976 $ 5,263 Service cost 1,950 1,467 Interest cost 307 251 Actuarial loss (gain) (737 ) 1,174 Amendments/settlements/curtailments loss (gain) - - Benefits paid (262 ) (179 ) Obligation at December 31, 2015 (1) $ 9,234 $ 7,976 Accumulated benefit obligation $ 7,115 $ 6,002 (1) Approximately $8.9 million is included in other long-term liabilities and $0.3 million is included in other accrued liabilities in the accompanying Consolidated Balance Sheets. Year Ended December 31, 2015 2014 (In thousands) Change in fair value of plan assets: Plan assets at January 1, 2015 $ - $ - Actual return on plan assets - - Employer contributions 262 179 Benefits paid (262 ) (179 ) Plan assets at December 31, 2015 - - Funded status recognized $ (9,234 ) $ (7,976 ) The following table provides the cost components of the SERP: Year Ended December 31, (In thousands) 2015 2014 Service cost $ 1,950 $ 1,467 Interest cost 307 251 Net Pension expense (benefit) $ 2,257 $ 1,718 The weighted average assumptions used to determine the benefit obligation and net periodic benefit costs consist of: As of December 31, 2015 2014 Discount rate 4.21 % 3.88 % Rate of compensation increase 3.00 % 3.00 % The estimated future benefit payments expected to be paid for each of the next five years and the sum of the payments expected for the next five years thereafter are: Estimated Future Benefit Payments Year Ending December 31, (In thousands) 2016 $ 270 2017 $ 265 2018 $ 265 2019 $ 265 2020 $ 364 2021 - 2025 $ 1,820 Multi-Employer Benefit Plan Six of Sonic’s dealership subsidiaries currently make fixed-dollar contributions to the Automotive Industries Pension Plan (the “AI Pension Plan”) pursuant to collective bargaining agreements between Sonic’s subsidiaries and the International Association of Machinists (the “IAM”) and the International Brotherhood of Teamsters (the “IBT”). The AI Pension Plan is a “multi-employer pension plan” as defined under the Employee Retirement Income Security Act of 1974, as amended, and Sonic’s six dealership subsidiaries are among approximately 200 employers that make contributions to the AI Pension Plan pursuant to collective bargaining agreements with the IAM and IBT. The risks of participating in this multi-employer pension plan are different from single-employer plans in the following aspects: · assets contributed to the multi-employer pension plan by one employer may be used to provide benefits to employees of other participating employers; · if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers; and · if Sonic chooses to stop participating in the multi-employer pension plan, Sonic may be required to pay the plan an amount based on the underfunded status of the plan, referred to as a withdrawal liability. Sonic’s participation in the AI Pension Plan for the years ended December 31, 2015, 2014 and 2013 is outlined in the table below. The “EIN/Pension Plan Number” column provides the Employee Identification Number (the “EIN”). Unless otherwise noted, the most recent Pension Protection Act of 2006 (the “PPA”) zone status available in the years ended December 31, 2015 and 2014 is for the plan’s year-end at December 31, 2014, and December 31, 2013, respectively. The zone status is based on information that Sonic received from the AI Pension Plan. Among other factors, plans in the red zone are generally less than 65% funded (“Critical Status”), plans in the yellow zone are less than 80% funded, and plans in the green zone are at least 80% funded. The “FIP/RP Status Pending/Implemented” column indicates plans for which a Financial Improvement Plan (the “FIP”) or a Rehabilitation Plan (the “RP”) is either pending or has been implemented. The last column lists the expiration dates of the collective bargaining agreements to which the plan is subject. The number of employees covered by Sonic’s multi-employer pension plans increased 2.8% from December 31, 2013 to December 31, 2014 and increased 4.8% from December 31, 2014 to December 31, 2015, affecting the period-to-period comparability of the contributions for years ended December 31, 2015, 2014 and 2013. Pension Protection Act Zone Status FIP/RP Status Sonic Contributions Collective Bargaining Pension EIN/Pension Pending / Year Ended December 31, Surcharge Agreement Fund Plan Number 2015 2014 Implemented 2015 2014 2013 Imposed Expiration Date (1) (In thousands) AI Pension Plan 94-1133245 Red Red RP Implemented $ 140 $ 148 $ 135 Yes Between August 31, 2014 and November 29, 2017 (1) Collective bargaining agreement expiration dates vary by union and dealership. Dates shown represent the range of the earliest and latest stated expirations for Sonic’s union employees, noting certain of Sonic’s collective bargaining agreements are expired as of December 31, 2015 and are currently under negotiation. Sonic’s participating dealership subsidiaries were not listed in the AI Pension Plan’s Form 5500 as providing more than 5% of the total contributions for the plan years ended December 31, 2014 and December 31, 2013. In June 2006, Sonic received information that the AI Pension Plan was substantially underfunded as of December 31, 2005. In July 2007, Sonic received updated information that the AI Pension Plan continued to be substantially underfunded as of December 31, 2006, with the amount of such underfunding increasing versus year end 2005. In March 2008, the Board of Trustees of the AI Pension Plan notified participants, participating employers and local unions that the AI Pension Plan’s actuary, in accordance with the requirements of the PPA, had issued a certification that the AI Pension Plan was in Critical Status effective with the plan year commencing January 1, 2008. In conjunction with the AI Pension Plan’s Critical Status, the Board of Trustees of the AI Pension Plan adopted a rehabilitation plan that implements reductions or eliminations of certain adjustable benefits that were previously available under the AI Pension Plan (including some forms of early retirement benefits, and disability and death benefits, among other items), and also implemented a requirement on all participating employers to increase employer contributions to the AI Pension Plan for a seven-year period which commenced in 2013. As of April 2015, the AI Pension Plan’s actuary certified that the AI Pension Plan remained in Critical Status for the plan year commencing January 1, 2015. Under applicable federal law, any employer contributing to a multi-employer pension plan that completely ceases participating in the plan while the plan is underfunded is subject to payment of such employer’s assessed share of the aggregate unfunded vested benefits of the plan. In certain circumstances, an employer can be assessed withdrawal liability for a partial withdrawal from a multi-employer pension plan. In addition, if the financial condition of the AI Pension Plan were to continue to deteriorate to the point that the AI Pension Plan is forced to terminate and be administered by the Pension Benefit Guaranty Corporation (the “PBGC”), the participating employers could be subject to assessments by the PBGC to cover the participating employers’ assessed share of the unfunded vested benefits. If any of these adverse events were to occur in the future, it could result in a substantial withdrawal liability assessment to Sonic. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 11. Fair Value Measurements In determining fair value, Sonic uses various valuation approaches including market, income and/or cost approaches. “Fair Value Measurements and Disclosures” in the ASC establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of Sonic. Unobservable inputs are inputs that reflect Sonic’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows: Level 1 – Valuations based on quoted prices in active markets for identical assets or liabilities that Sonic has the ability to access. Assets utilizing Level 1 inputs include marketable securities that are actively traded including the value of Sonic’s stock or public bonds. Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Assets and liabilities utilizing Level 2 inputs include cash flow swap instruments and deferred compensation plan balances. Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement. Asset and liability measurements utilizing Level 3 inputs include those used in estimating fair value of non-financial assets and non-financial liabilities in purchase acquisitions, those used in assessing impairment of property, plant and equipment and other intangibles and those used in the reporting unit valuation in the annual goodwill impairment evaluation. The availability of observable inputs can vary and is affected by a wide variety of factors. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment required by Sonic in determining fair value is greatest for assets and liabilities categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed is determined based on the lowest level input (Level 3 being the lowest level) that is significant to the fair value measurement. Fair value is a market-based measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, Sonic’s own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. Sonic uses inputs that are current as of the measurement date, including during periods when the market may be abnormally high or abnormally low. Accordingly, fair value measurements can be volatile based on various factors that may or may not be within Sonic’s control. Assets or liabilities recorded at fair value in the accompanying Consolidated Balance Sheets as of December 31, 2015 and 2014 are as follows: Fair Value Based on Significant Other Observable Inputs (Level 2) December 31, 2015 December 31, 2014 (In thousands) Assets: Cash surrender value of life insurance policies (1) $ 29,055 $ 27,552 Cash flow swaps designated as hedges (1) - 618 Total assets $ 29,055 $ 28,170 Liabilities: Cash flow swaps designated as hedges (2) $ 9,094 $ 10,251 Cash flow swaps not designated as hedges (3) 913 1,469 Deferred compensation plan (4) 13,551 15,863 Total liabilities $ 23,558 $ 27,583 (1) Included in other assets in the accompanying Consolidated Balance Sheets. (2) As of December 31, 2015, approximately $4.6 million and $4.5 million were included in other accrued liabilities and other long-term liabilities, respectively, in the accompanying Consolidated Balance Sheets. As of December 31, 2014, approximately $7.5 million and $2.8 million were included in other accrued liabilities and other long-term liabilities, respectively, in the accompanying Consolidated Balance Sheets. (3) As of December 31, 2015, approximately $0.5 million and $0.4 million were included in other accrued liabilities and other long-term liabilities, respectively, in the accompanying Consolidated Balance Sheets. As of December 31, 2014, approximately $0.7 million and $0.8 million were included in other accrued liabilities and other long-term liabilities, respectively, in the accompanying Consolidated Balance Sheets. (4) Included in other long-term liabilities in the accompanying Consolidated Balance Sheets. The carrying value of assets or liabilities measured at fair value on a non-recurring basis but not completely adjusted to fair value in the accompanying Consolidated Balance Sheets as of December 31, 2015, are included in the table below. Certain components of long-lived assets held and used have been adjusted to fair value through impairment charges as discussed in Note 4, “Property and Equipment” and Note 5, “Intangible Assets and Goodwill.” Significant Unobservable Total Gains / Inputs (Losses) for the Balance as of (Level 3) as of Year Ended December 31, 2015 December 31, 2015 December 31, 2015 (In thousands) Long-lived assets held and used (1) $ 886,902 $ 886,902 $ (12,210 ) Goodwill (2) $ 471,493 $ 471,493 $ (2,445 ) Franchise assets (2) $ 74,900 $ 74,900 $ (3,300 ) (1) See Notes 1 and 4 for discussion. (2) See Notes 1 and 5 for discussion. As of December 31, 2015 and December 31, 2014, 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 approximate their carrying values due either to length of maturity or existence of variable interest rates that approximate prevailing market rates. The fair value and carrying value of Sonic’s fixed rate long-term debt was as follows: December 31, 2015 December 31, 2014 Fair Value Carrying Value Fair Value Carrying Value (In thousands) 7.0% Notes (1) $ 211,000 $ 198,708 $ 216,000 $ 198,556 5.0% Notes (1) $ 284,250 $ 300,000 $ 294,000 $ 300,000 Mortgage Notes (2) $ 174,007 $ 168,410 $ 152,240 $ 147,554 Assumed Notes (2) $ 818 $ 823 $ 4,365 $ 4,474 Other (2) $ 4,374 $ 4,634 $ 4,588 $ 4,884 (1) As determined by market quotations as of December 31, 2015 and December 31, 2014, respectively (Level 1). (2) As determined by discounted cash flows (Level 3). |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Facility and Equipment Leases For the year ended December 31, 2015, Sonic recognized approximately $1.8 million of lease exit expense, which consists of $1.4 million of interest expense and $0.4 million related to adjustments to lease exit accruals recorded in previous years for the present value of the lease payments, net of estimated sublease rentals, for the remaining life of the operating leases and other accruals necessary to satisfy the lease commitment to the landlord. A summary of the activity of these operating lease accruals consists of the following: (In thousands) Balance at December 31, 2014 $ 18,962 Lease exit expense (1) 1,848 Payments (2) (6,283 ) Balance at December 31, 2015 $ 14,527 (1) Expense of approximately $0.2 million is recorded in interest expense, other, net and expense of approximately $0.1 million is recorded in selling, general and administrative expenses. In addition, expense of approximately $1.5 million is recorded in income (loss) from discontinued operations in the accompanying Consolidated Statements of Income. (2) Amount is recorded as an offset to rent expense in selling, general and administrative expenses, with approximately $0.7 million in continuing operations and $5.6 million in income (loss) from discontinued operations in the accompanying Consolidated Statements of Income. Sonic leases facilities for the majority of its dealership operations under operating lease arrangements. These facility lease arrangements normally have fifteen- to twenty-year terms with one or two five- to ten-year renewal options and do not contain provisions for contingent rent related to dealership’s operations. Many of the leases are subject to the provisions of a guaranty and subordination agreement that contains financial and affirmative covenants. Sonic was in compliance with these covenants at December 31, 2015. Approximately 10% of these facility leases have payments that may vary based on interest rates. Minimum future lease payments for facility leases and future receipts from subleases as required under non-cancelable operating leases for both continuing and discontinued operations based on current interest rates in effect are as follows: Future Minimum Lease Payments, Net Receipts from Future Subleases Year Ending December 31, (In thousands) 2016 $ 94,119 $ (14,254 ) 2017 $ 78,948 $ (10,922 ) 2018 $ 68,719 $ (9,256 ) 2019 $ 55,404 $ (8,168 ) 2020 $ 32,155 $ (7,731 ) Thereafter $ 97,793 $ (24,395 ) Total lease expense for continuing operations for the years ended December 31, 2015, 2014 and 2013 was approximately $ 98.2 99.6 $2.3 million and $0.6 million for continuing and discontinued operations Many of Sonic’s facility operating leases are subject to affirmative and financial covenant provisions related to a subordination and guaranty agreement executed with the landlord of many of its facility properties. The required financial covenants related to certain lease agreements are as follows: Covenant Minimum Consolidated Liquidity Ratio Minimum Consolidated Fixed Charge Coverage Ratio Maximum Consolidated Total Lease Adjusted Leverage Ratio Minimum EBTDAR to Rent Ratio Required ratio 1.05 1.20 5.50 1.50 December 31, 2015 actual 1.19 1.78 4.08 3.81 Guarantees and Indemnifications In accordance with the terms of Sonic’s operating lease agreements, Sonic’s 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, Sonic has 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 Sonic’s subsidiaries have assigned or sublet to the buyer its 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 sub-lessee does not perform. These obligations are included within the future minimum lease payments, net, in the table above. In the event the sub-lessees do not perform under their obligations Sonic remains liable for the lease payments. The total amount relating to this risk is approximately $74.7 million, which is the total of the receipts from future subleases in the table under the heading “Facility and Equipment Leases” above. However, there are situations where Sonic has assigned a lease to the buyer and Sonic was not able to obtain a release from the landlord. In these situations, although Sonic is no longer the primary obligor, Sonic is contingently liable if the buyer does not perform under the lease terms. The total estimated minimum lease payments remaining related to these leases totaled approximately $3.1 million at December 31, 2015. However, in accordance with the terms of the assignment and sublease agreements, the assignees and sub-lessees have generally agreed to indemnify Sonic and its subsidiaries in the event of non-performance. Additionally, in connection with certain dispositions, Sonic has obtained indemnifications from the parent company or owners of these assignees and sub-lessees in the event of non-performance. In accordance with the terms of agreements entered into for the sale of Sonic’s dealerships, Sonic generally agrees 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 agreement. While Sonic’s exposure with respect to environmental remediation and repairs is difficult to quantify, Sonic’s maximum exposure associated with these general indemnifications was approximately $5.3 million at December 31, 2015. These indemnifications expire within a period of one to three years following the date of sale. The estimated fair value of these indemnifications was not material and the amount recorded for this contingency was not significant at December 31, 2015. Sonic also guarantees the floor plan commitments of its 50%-owned joint venture, the amount of which was approximately $2.8 million at December 31, 2015. Legal Matters Sonic is involved, and expects to continue to be involved, in numerous 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 at December 31, 2015 was approximately $0.3 million and $0.2 million, respectively, in reserves that Sonic was holding for pending proceedings. Included in other accrued liabilities and other long-term liabilities at December 31, 2014 was approximately $2.0 million and $0.3 million, respectively, for such reserves. 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. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 13. Accumulated Other Comprehensive Income (Loss) The changes in accumulated other comprehensive income (loss) for the year ended December 31, 2015 are as follows: Changes in Accumulated Other Comprehensive Income (Loss) by Component for the Year Ended December 31, 2015 Gains and Losses on Cash Flow Hedges Defined Benefit Pension Plan Total Accumulated Other Comprehensive Income (Loss) (In thousands) Balance at December 31, 2014 $ (5,973 ) $ (451 ) $ (6,424 ) Other comprehensive income (loss) before reclassifications (1) (4,679 ) 457 (4,222 ) Amounts reclassified out of accumulated other comprehensive income (loss) (2) 5,014 - 5,014 Net current-period other comprehensive income (loss) 335 457 792 Balance at December 31, 2015 $ (5,638 ) $ 6 $ (5,632 ) (1) Net of tax benefit of $2,868 related to gains and losses on cash flow hedges, and tax expense of $280 related to the defined benefit pension plan. (2) Net of tax expense of $3,073. See the heading “Derivative Instruments and Hedging Activities” in Note 6, “Long-Term Debt,” for further discussion of Sonic’s cash flow hedges. For further discussion of Sonic’s defined benefit pension plan, see Note 10, “Employee Benefit Plans.” |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | 14. Segment Information As of December 31, 2015, Sonic had two operating segments: Franchised Dealerships and EchoPark ® ® The operating 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 consisting of the Company’s President and Chief Executive Officer, Chief Financial Officer and Executive Vice President of Operations. The Company has determined that its operating segments also represent its reportable segments. Reportable segment revenue, segment income, floor plan interest expense, depreciation and amortization, capital expenditures and total assets are as follows: Year Ended December 31, 2015 2014 2013 (In thousands) Revenues: Franchised Dealerships $ 9,547,236 $ 9,191,661 $ 8,843,168 EchoPark® 77,063 5,438 - Total consolidated revenues $ 9,624,299 $ 9,197,099 $ 8,843,168 Year Ended December 31, 2015 2014 2013 (In thousands) Segment income (loss) (1): Franchised Dealerships $ 213,224 $ 230,733 $ 218,139 EchoPark® (17,257 ) (15,913 ) (5,490 ) Total segment income (loss) 195,967 214,820 212,649 Interest expense, other, net (50,910 ) (53,190 ) (55,485 ) Other income (expense), net 99 97 (28,143 ) Income (loss) from continuing operations before taxes $ 145,156 $ 161,727 $ 129,021 (1) Segment income (loss) for each segment is defined as operating income less floor plan interest expense. Year Ended December 31, 2015 2014 2013 (In thousands) Floor plan interest expense: Franchised Dealerships $ 20,727 $ 18,727 $ 21,954 EchoPark® 599 66 - Total floor plan interest expense $ 21,326 $ 18,793 $ 21,954 Year Ended December 31, 2015 2014 2013 (In thousands) Depreciation and amortization: Franchised Dealerships $ 65,766 $ 58,001 $ 54,007 EchoPark® 3,033 259 - Total depreciation and amortization $ 68,799 $ 58,260 $ 54,007 Year Ended December 31, 2015 2014 2013 (In thousands) Capital expenditures: Franchised Dealerships $ 148,593 $ 117,129 $ 151,947 EchoPark® 24,656 29,303 5,670 Total capital expenditures $ 173,249 $ 146,432 $ 157,617 December 31, 2015 2014 (In thousands) Assets: Franchised Dealerships $ 2,211,232 $ 1,841,950 EchoPark® 76,808 42,115 Corporate and other: Cash and Cash Equivalents 3,625 4,182 Goodwill, Net 471,493 475,929 Other Intangible Assets, Net 80,876 83,720 Other Corporate and other assets 718,347 720,357 Total assets $ 3,562,381 $ 3,168,253 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events Subsequent to December 31, 2015, Sonic’s Board of Directors authorized an additional $100.0 million to repurchase shares of Sonic’s Class A common stock, increasing Sonic’s remaining repurchase authorization to approximately $145.0 million before including the effect of any share repurchases subsequent to December 31, 2015. Subsequent to December 31, 2015, Sonic repurchased approximately 4.0 million shares of its Class A common stock for approximately $72.0 million in the open market at prevailing market prices, in two separate private transaction block trades and in connection with tax withholdings on the vesting of equity compensation awards. As of the date of this filing, Sonic’s remaining repurchase authorization was approximately $73.0 million. Subsequent to December 31, 2015, Sonic’s Board of Directors approved a quarterly dividend of $0.05 per share payable in cash for stockholders of record on March 15, 2016. The dividend will be payable on April 15, 2016. |
Summary of Quarterly Financial
Summary of Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Quarterly Financial Data (Unaudited) | 16. Summary of Quarterly Financial Data (Unaudited) The following table summarizes Sonic’s results of operations as presented in the accompanying Consolidated Statements of Income by quarter for the years ended December 31, 2015 and 2014: First Quarter Second Quarter Third Quarter Fourth Quarter (In thousands, except per share data) Year Ended December 31, 2015 Total revenues (1) $ 2,235,516 $ 2,423,740 $ 2,494,408 $ 2,470,635 Gross profit (1) $ 334,959 $ 355,554 $ 360,251 $ 363,848 Net income (loss) (2) $ 13,967 $ 14,781 $ 26,505 $ 31,058 Earnings (loss) per common share - Basic (2) (3) $ 0.27 $ 0.29 $ 0.53 $ 0.62 Earnings (loss) per common share - Diluted (2) (3) $ 0.27 $ 0.29 $ 0.52 $ 0.62 Year Ended December 31, 2014 Total revenues (1) $ 2,136,387 $ 2,353,280 $ 2,355,604 $ 2,351,828 Gross profit (1) $ 329,000 $ 346,947 $ 341,489 $ 348,464 Net income (loss) (2) $ 19,386 $ 26,993 $ 24,712 $ 26,126 Earnings (loss) per common share - Basic (2) (3) $ 0.37 $ 0.51 $ 0.47 $ 0.51 Earnings (loss) per common share - Diluted (2) (3) $ 0.36 $ 0.51 $ 0.47 $ 0.50 Note: Operations are subject to seasonal variations. The first quarter generally contributes less operating profits than the second, third and fourth quarters. Parts and service demand remains more stable throughout the year. (1) Results are for continuing operations. (2) Results include both continuing operations and discontinued operations. (3) The sum of net income per common share for the quarters may not equal the full year amount due to weighted average common shares being calculated on a quarterly versus annual basis. Net income for the fourth quarter ended December 31, 2015 includes approximately $2.3 million of pre-tax gain from the sale of dealership franchises, offset partially by approximately $1.3 million of pre-tax impairment charges. Net income for the second quarter ended June 30, 2015 includes a pre-tax gain of approximately $1.1 million from the sale of dealership franchises, offset by approximately $10.5 million of pre-tax impairment charges and approximately $4.2 million due to pre-tax storm damage and legal settlements. Net income for the first quarter ended March 31, 2015 includes approximately $6.2 million of pre-tax impairment charges and approximately $0.9 million of pre-tax severance expense. Net income for the fourth quarter ended December 31, 2014 includes approximately $6.4 million of pre-tax impairment charges, pre-tax charges of approximately $1.0 million related to fire and storm damage and a $0.9 million tax expense item related to the disposition of dealership franchises. Net income for the third quarter ended September 30, 2014 includes a pre-tax gain of approximately $3.2 million from the sale of dealership franchises, offset partially by pre-tax charges of approximately $2.0 million due to flood and hail damage and pre-tax impairment charges of approximately $0.2 million. Net income for the second quarter ended June 30, 2014 includes a pre-tax gain of approximately $7.3 million from the sale of two dealership franchises, offset partially by pre-tax charges of approximately $1.0 million due to hail damage and an approximately $0.3 million pre-tax legal settlement reserve accrual. |
Description of Business and S26
Description of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Organization and Business | Organization and Business - Sonic Automotive, Inc. (“Sonic” or the “Company”) is one of the largest automotive retailers in the United States (as measured by total revenue). As of December 31, 2015, Sonic operated 114 franchises in 13 states (representing 25 different brands of cars and light trucks) and 18 collision repair centers. For management and operational reporting purposes, Sonic groups certain franchises together that share management and inventory (principally used vehicles) into “stores.” As of December 31, 2015, Sonic operated 96 franchised dealership stores and three EchoPark ® ® |
Principles of Consolidation | Principles of Consolidation - All of Sonic’s dealership and non-dealership subsidiaries are wholly-owned and consolidated in the accompanying 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 Consolidated Financial Statements. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements - In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-03 to simplify the presentation of debt issuance costs. The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts and premiums. The ASU also requires that the amortization of debt issuance costs be reported as interest expense. For public companies, this ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted, and Sonic elected to adopt and apply the guidance beginning with this Annual Report on Form 10-K for the year ended December 31, 2015. The adoption of this ASU was applied retrospectively and impacts the presentation of other assets and long-term debt amounts in the accompanying Consolidated Balance Sheets, Note 6, “Long-Term Debt,” Note 14, “Segment Information,” and certain other disclosures. Also in April 2015, the FASB issued ASU 2015-05 related to customer’s accounting for fees paid in a cloud computing arrangement. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2015 (early adoption is permitted). Sonic does not expect this ASU to have a significant impact on its consolidated financial position, results of operations or cash flows. In July 2015, the FASB issued ASU 2015-11 to clarify the subsequent measurement of inventory. This ASU requires an entity to measure inventory within the scope of this update at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The ASU excludes inventory measured using last-in, first-out and the retail inventory method. For public companies, this ASU is effective for fiscal years beginning after December 15, 2016 (early adoption is permitted). Sonic does not expect this ASU to have a significant impact on its consolidated financial position, results of operations or cash flows. In November 2015, the FASB issued ASU 2015-17 to simplify the presentation of deferred income taxes. The amendments in this ASU require deferred tax liabilities and assets to be classified as noncurrent in a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity must be netted and presented as a single amount is not affected by this ASU. For public companies, this ASU is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods (early adoption is permitted). Sonic expects this ASU to have a significant impact on the classification of deferred income tax assets and liabilities in its consolidated financial position. |
Reclassifications | Reclassifications – Prior to Sonic’s adoption of ASU 2014-08 beginning with its Quarterly Report on Form 10-Q for the period ended June 30, 2014, individual dealership franchises sold, terminated or classified as held for sale were reported as discontinued operations. The results of operations of these dealership franchises for the years ended December 31, 2015, 2014 and 2013 are reported as discontinued operations for all periods presented. Dealership franchises sold during the year ended December 31, 2014 have not been reclassified to discontinued operations since they were disposed of after March 31, 2014 and they did not meet the criteria in ASU 2014-08. If, in future periods, Sonic determines that a dealership franchise should be reclassified from continuing operations to discontinued operations, previously reported Consolidated Statements of Income will be reclassified in order to reflect the most recent classification. |
Use of Estimates | Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires Sonic’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the accompanying Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates , particularly related to allowance for credit loss, realization of inventory, intangible asset and deferred tax asset values, reserves for tax contingencies, legal matters, reserves for future commission revenue to be returned to the third-party provider for early termination of customer contracts (“chargebacks”), results reported as continuing and discontinued operations, insurance reserves, lease exit accruals and certain accrued expenses. |
Cash and Cash Equivalents | Cash and Cash Equivalents - Sonic classifies cash and all highly liquid investments with a maturity of three months or less at the date of purchase, including short-term time deposits and government agency and corporate obligations, as cash and cash equivalents. In the event that Sonic is in a book overdraft cash position as of a reporting date, the book overdraft position is reclassified from cash and cash equivalents to trade accounts payable in the accompanying Consolidated Balance Sheets and is reflected as activity in trade accounts payable and other liabilities in the accompanying Consolidated Statements of Cash Flows. Sonic was in a book overdraft position in an amount of approximately $ 38.5 million and $37.1 million as of December 31, 2015 and 2014, respectively. |
Revenue Recognition | Revenue Recognition - Sonic records revenue when vehicles are delivered to customers, when 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 the sales price must be reasonably expected to be collected. Sonic arranges financing for customers through various financial institutions and receives a commission from the financial institution either in a flat fee amount or in an amount equal to the difference between the interest rates charged to customers over the predetermined interest rates set by the financial institution. Sonic also receives commissions from the sale of various insurance contracts to customers. Sonic may be assessed a chargeback fee in the event of early cancellation of a loan or insurance contract by the customer. Finance and insurance commission revenue is recorded net of estimated chargebacks at the time the related contract is placed with the financial institution. Sonic also receives commissions from the sale of non-recourse third-party extended service contracts to customers. Under these contracts, the applicable manufacturer or third-party warranty company is directly liable for all warranties provided within the contract. Commission revenue from the sale of these third-party extended service contracts is recorded net of estimated chargebacks at the time of sale. As of December 31, 2015 and 2014, the amounts recorded as allowances for finance, insurance and service contract commission chargeback reserves were $17.0 million and $15.4 million, respectively, and were classified as other accrued liabilities and other long-term liabilities in the accompanying Consolidated Balance Sheets. |
Floor Plan Assistance | Floor Plan Assistance - Sonic receives floor plan assistance payments from certain manufacturers. This assistance reduces the carrying value of Sonic’s new vehicle inventory and is recognized as a reduction of cost of sales at the time the vehicle is sold. Amounts recognized as a reduction of cost of sales for continuing operations were $ 42.1 million, $39.7 million and $37.9 million for the years ended December 31, 2015, 2014 and 2013, respectively. |
Contracts in Transit | Contracts in Transit - Contracts in transit represent customer finance contracts evidencing loan agreements or lease agreements between Sonic, as creditor, and the customer, as borrower, to acquire or lease a vehicle in situations where a third-party finance source has given Sonic initial, non-binding approval to assume Sonic’s position as creditor. Funding and final approval from the finance source is provided upon the finance source’s review of the loan or lease agreement and related documentation executed by the customer at the dealership. These finance contracts are typically funded within ten days of the initial approval of the finance transaction given by the third-party finance source. The finance source is not contractually obligated to make the loan or lease to the customer until it gives its final approval and funds the transaction, and until such final approval is given, the contracts in transit represent amounts due from the customer to Sonic. Contracts in transit are included in receivables, net on the accompanying Consolidated Balance Sheets and totaled $196.3 million at December 31, 2015 and $194.0 million at December 31, 2014. |
Accounts Receivable | Accounts Receivable - In addition to contracts in transit, Sonic’s accounts receivable primarily consist of amounts due from the manufacturers for repair services performed on vehicles with a remaining factory warranty and amounts due from third parties from the sale of parts. Sonic evaluates receivables for collectability based on the age of the receivable, the credit history of the customer and past collection experience. The allowance for doubtful accounts receivable was not significant at December 31, 2015 and 2014. |
Inventories | Inventories - Inventories of new vehicles, recorded net of manufacturer credits, and used vehicles, including demonstrators, are stated at the lower of specific cost or market. Inventories of parts and accessories are accounted for using the “first-in, first-out” (“FIFO”) method of inventory accounting and are stated at the lower of FIFO cost or market. Other inventories are primarily service loaner vehicles and, to a lesser extent, vehicle chassis, other supplies and capitalized customer work-in-progress (open customer vehicle repair orders). Other inventories are stated at the lower of specific cost (depreciated cost for service loaner vehicles) or market. Sonic assesses the valuation of all its vehicle and parts inventories and maintains a reserve where the cost basis exceeds the fair market value. In making this assessment for new vehicles, used vehicles, service loaners and parts inventory, Sonic considers recent internal and external market data and the age of the vehicles to estimate the inventory’s fair market value. The risk with vehicle inventory is minimized by the fact that vehicles can be transferred within Sonic’s network of dealerships. The risk with parts inventories is minimized by the fact that excess or obsolete parts can also be transferred within Sonic’s network of dealerships or can usually be returned to the manufacturer. Recorded inventory reserves were not significant at December 31, 2015 and 2014. |
Property and Equipment | Property and Equipment - Property and equipment are stated at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. Sonic amortizes leasehold improvements over the shorter of the estimated useful life or the remaining lease life. This lease life includes renewal options if a renewal has been determined to be reasonably assured. The range of estimated useful lives is as follows: Leasehold and land improvements 10-30 years Buildings 10-30 years Parts and service equipment 7-10 years Office equipment and fixtures 3-10 years Company vehicles 3-5 years Sonic reviews the carrying value of property and equipment and other long-term assets (other than goodwill and franchise assets) for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If such an indication is present, Sonic compares the carrying amount of the asset to the estimated undiscounted cash flows related to those assets. Sonic concludes that an asset is impaired if the sum of such expected future cash flows is less than the carrying amount of the related asset. If Sonic determines an asset is impaired, the impairment loss would be the amount by which the carrying amount of the related asset exceeds its fair value. The fair value of the asset would be determined based on the quoted market prices, if available. If quoted market prices are not available, Sonic determines fair value by using a discounted cash flow model. See Note 4, “Property and Equipment,” for a discussion of impairment charges. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities - Sonic utilizes derivative financial instruments for the purpose of hedging the risks of certain identifiable and anticipated transactions. Commonly, the types of risks being hedged are those relating to the variability of cash flows caused by fluctuations in interest rates. Sonic documents its risk management strategy and hedge effectiveness at the inception of and during the term of each hedge. As of December 31, 2015, Sonic utilize d interest rate cash flow swap agreements to effectively convert a portion of its LIBOR-based variable rate debt to a fixed rate. See Note 6, “Long-Term Debt,” for further discussion of derivative instruments and hedging activities. |
Goodwill | Goodwill - Goodwill is recognized to the extent that the purchase price of the acquisition exceeds the estimated fair value of the net assets acquired, including other identifiable intangible assets. In accordance with “Intangibles – Goodwill and Other” in the Accounting Standards Codification (the “ASC”), goodwill is tested for impairment at least annually, or more frequently when events or circumstances indicate that impairment might have occurred. The ASC also states that if an entity determines, based on an assessment of certain qualitative factors, that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then the first and second steps of the goodwill impairment test are unnecessary. For its annual impairment assessment as of October 1, 2015, Sonic elected to perform a quantitative step-one assessment. For purposes of goodwill impairment testing, Sonic has two reporting units, which consist of its traditional franchised dealerships and EchoPark®. The carrying value of Sonic’s goodwill (all of which is associated with its franchised dealerships reporting unit) totaled approximately $471.5 million at December 31, 2015. In evaluating goodwill for impairment, if the fair value of a reporting unit is less than its carrying value, Sonic is then required to proceed to the second step of the impairment test. The second step involves allocating the calculated fair value to all of the assets and liabilities of the reporting unit as if the calculated fair value was the purchase price in a business combination. This allocation would include assigning value to any previously unrecognized identifiable assets (including franchise assets) which means the remaining fair value that would be allocated to goodwill would be significantly reduced. See discussion regarding franchise and dealer agreements acquired prior to July 1, 2001 under the heading “Other Intangible Assets” below. Sonic would then compare the fair value of the goodwill resulting from this allocation process to the carrying value of the goodwill with the difference representing the amount of impairment. The purpose of this second step is only to determine the amount of goodwill that should be recorded at fair value on the balance sheet. The recorded amounts of other items on the balance sheet are not adjusted. Sonic utilized the Market Price (“MP”) method to estimate its enterprise value. The significant inputs in Sonic’s MP method include debt value, stock price and control premium. To the extent the reporting unit’s earnings decline significantly or there are changes in one or more of these inputs that would result in lower valuation results, it could cause the carrying value of the reporting unit to exceed its fair value and thus require Sonic to conduct the second step of the impairment test described above. Based on the results of Sonic’s step-one test as of October 1, 2015, its Franchised Dealerships’ fair value exceeds its carrying value. As a result, Sonic was not required to complete step two of the impairment evaluation according to “Intangibles – Goodwill and Other” in the ASC. See Note 5, “Intangible Assets and Goodwill,” for further discussion of goodwill. |
Other Intangible Assets | Other Intangible Assets - The principal identifiable intangible assets other than goodwill acquired in an acquisition are rights under franchise or dealer agreements with manufacturers. Sonic classifies franchise and dealer agreements as indefinite lived intangible assets as it has been Sonic’s experience that renewals have occurred without substantial cost or material modifications to the underlying agreements. As such, Sonic believes that its franchise and dealer agreements will contribute to cash flows for an indefinite period, therefore the carrying amount of franchise rights is not amortized. Franchise and dealer agreements acquired after July 1, 2001 have been included in other intangible assets, net on the accompanying Consolidated Balance Sheets. Prior to July 1, 2001, franchise and dealer agreements were recorded and amortized as part of goodwill and remain as part of goodwill on the accompanying Consolidated Balance Sheets. Other intangible assets acquired in acquisitions include favorable lease agreements with definite lives which are amortized on a straight-line basis over the remaining lease term. In accordance with “Intangibles – Goodwill and Other” in the ASC, Sonic evaluates other intangible assets for impairment annually (as of October 1) or more frequently if indicators of impairment exist. Sonic utilized a discounted cash flow (“DCF”) model to estimate the fair value of the franchise asset for each of its franchises with recorded franchise assets. The significant assumptions in Sonic’s DCF model include projected revenue, weighted average cost of capital (and estimates in the weighted average cost of capital inputs) and residual growth rates. In projecting the franchises’ revenue and growth rates, Sonic develops many assumptions which may include, but are not limited to, revenue growth, internal revenue enhancement initiatives, cost control initiatives, internal investment programs (such as training, technology and infrastructure) and inventory floor plan borrowing rates. Sonic’s expectation of revenue growth is in part driven by its estimates of new vehicle industry sales volume in future periods. Sonic believes the historic and projected industry sales volume is a good indicator of growth or contraction in the retail automotive industry. Based on the October 1, 2015 impairment test, Sonic determined that the fair value of the franchise assets exceeded the carrying value of the franchise assets for all but two of its franchises, resulting in a franchise asset impairment charge of $0.9 million during the year ended December 31, 2015, recorded in impairment charges in the accompanying Consolidated Statements of Income. In addition, Sonic impaired $2.4 million of franchise assets in the year ended December 31, 2015 related to the disposition of a franchise that was acquired in 2014 and disposed of in 2015. See Note 5, “Intangible Assets and Goodwill,” for further discussion of franchise and dealer agreements. In evaluating its definite life favorable lease assets for impairment, Sonic considered whether the leased asset was being utilized by the dealership and if the dealership operating activities could recover the value of the recorded favorable lease asset. Sonic evaluated its favorable lease assets for impairment as of October 1, 2015 and determined that no impairment was required. |
Insurance Reserves | Insurance Reserves - Sonic has various self-insured and high deductible casualty and other insurance programs which require the Company to make estimates in determining the ultimate liability it may incur for claims arising under these programs. These insurance reserves are estimated by management using actuarial evaluations based on historical claims experience, claims processing procedures, medical cost trends and, in certain cases, a discount factor. As of December 31, 2015 and 2014, Sonic had $ 24.9 million and $23.9 million, respectively, reserved for such programs. |
Lease Exit Accruals | Lease Exit Accruals - The majority of Sonic’s dealership properties are leased under long-term operating lease arrangements. When situations arise where the leased properties are no longer utilized in operations, Sonic records accruals for the present value of the lease payments, net of estimated sublease rentals, for the remaining life of the operating leases and other accruals necessary to satisfy the lease commitment to the landlord. These situations could include the relocation of an existing facility or the sale of a dealership where the buyer will not be subleasing the property for either the remaining term of the lease or for an amount of rent equal to Sonic’s obligation under the lease , or in situations where a store is closed as a result of the associated franchise being terminated by the manufacturer or Sonic and no other operations continue on the leased property. See Note 12, “Commitments and Contingencies,” for further discussion. |
Income Taxes | Income Taxes - Income taxes are provided for the tax effects of transactions reported in the accompanying Consolidated Financial Statements and consist of taxes currently due plus deferred taxes. Deferred taxes are provided at enacted tax rates for the tax effects of carryforward items and temporary differences between the tax basis of assets and liabilities and their reported amounts. As a matter of course, the Company is regularly audited by various taxing authorities and , from time to time, these audits result in proposed assessments where the ultimate resolution may result in the Company owing additional taxes. Sonic’s management believes that the Company’s tax positions comply, in all material respects, with applicable tax law and that the Company has adequately provided for any reasonably foreseeable outcome related to these matters. From time to time, Sonic engages in transactions in which the tax consequences may be subject to uncertainty. Significant judgment is required in assessing and estimating the tax consequences of these transactions. Sonic determines whether it is more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, Sonic presumes that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information. A tax position that does not meet the more-likely-than-not recognition threshold is measured to determine the amount of benefit to be recognized in the financial statements. The tax position is measured at the largest amount of benefit that is likely to be realized upon ultimate settlement. Sonic adjusts its estimates periodically because of ongoing examinations by and settlements with the various taxing authorities, as well as changes in tax laws, regulations and precedent. See Note 7, “Income Taxes,” for further discussion of Sonic’s uncertain tax positions. |
Concentrations of Credit and Business Risk | Concentrations of Credit and Business Risk - Financial instruments that potentially subject Sonic to concentrations of credit risk consist principally of cash on deposit with financial institutions. At times, amounts invested with financial institutions exceed Federal Deposit Insurance Corporation (“FDIC”) insurance limits. Concentrations of credit risk with respect to receivables are limited primarily to automobile manufacturers, totaling approximately $ 90.3 million and $90.1 million at December 31, 2015 and 2014, respectively, and financial institutions (which includes manufacturer-affiliated finance companies and contracts in transit), totaling approximately $221.6 million and $215.4 million at December 31, 2015 and 2014, respectively. Credit risk arising from trade receivables from commercial customers is reduced by the large number of customers comprising the trade receivables balances. Sonic participates in a program with two of its manufacturer-affiliated finance companies wherein Sonic maintains a deposit balance with the lender that earns floor plan interest rebates based on the agreed upon rate. This deposit balance is not designated as a pre-payment of notes payable – floor plan, nor is it Sonic’s intent to use this amount to offset principal amounts owed under notes payable – floor plan in the future, although Sonic has the right and ability to do so. The deposit balance of $74.0 million and $57.5 million as of December 31, 2015 and 2014, respectively, is classified in other current assets in the accompanying Consolidated Balance Sheets, because there are restrictions on Sonic’s availability to withdraw these funds under certain circumstances. Changes in this deposit balance are classified as changes in other assets in the cash flows from operating activities section of the accompanying Consolidated Statements of Cash Flows. The interest rebate as a result of this deposit balance is classified as a reduction in interest expense, floor plan in the accompanying Consolidated Statements of Income. In the years ended December 31, 2015, 2014 and 2013, the reduction in interest expense, floor plan was approximately $1.5 million, $2.1 million and $1.0 million, respectively. Sonic is subject to a concentration of risk in the event of financial distress or other adverse events related to any of the automobile manufacturers whose franchised dealerships are included in Sonic’s brand portfolio. Sonic purchases its new vehicle inventory from various automobile manufacturers at the prevailing prices available to all franchised dealerships. In addition, Sonic finances a substantial portion of its new vehicle inventory with manufacturer-affiliated finance companies. Sonic’s results of operations could be adversely affected by the manufacturers’ inability to supply Sonic’s dealerships with an adequate supply of new vehicle inventory and related floor plan financing. Sonic also has concentrations of risk related to geographic markets in which its dealerships operate. Changes in overall economic, retail automotive or regulatory environments in one or more of these markets could adversely impact Sonic’s results of operations. |
Financial Instruments and Market Risks | Financial Instruments and Market Risks - As of December 31, 2015 and 2014, 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. See Note 11, “Fair Value Measurements,” for further discussion of the fair value and carrying value of Sonic’s fixed rate long-term debt. Sonic has variable rate notes payable - floor plan, revolving credit facilities and other variable rate notes that expose Sonic to risks caused by fluctuations in the underlying interest rates. The counterparties to Sonic’s swap transactions consist of large financial institutions. Sonic could be exposed to loss in the event of non-performance by any of these counterparties. See further discussion in Note 6, “Long-Term Debt.” |
Advertising | Advertising - Sonic expenses advertising costs in the period incurred, net of earned cooperative manufacturer credits that represent reimbursements for specific, identifiable and incremental advertising costs. Advertising expense for continuing operations amounted to approximately $ 61.6 million, $57.4 million and $56.6 million for the years ended December 31, 2015, 2014 and 2013, respectively, and is classified as selling, general and administrative expense in the accompanying Consolidated Statements of Income. Sonic has cooperative advertising reimbursement agreements with certain automobile manufacturers it represents. These agreements require Sonic to provide the manufacturer with support for qualified, actual advertising expenditures in order to receive reimbursement under the agreements. It is uncertain whether or not Sonic would maintain the same level of advertising expenditures if these manufacturers discontinued their cooperative programs. Cooperative manufacturer credits classified as an offset to advertising expenses were approximately $24.2 million, $23.4 million and $21.8 million for the years ended December 31, 2015, 2014 and 2013, respectively. |
Segment Information | Segment Information - Sonic has determined it has two reporting segments, Franchised Dealerships and EchoPark ® ® |
Description of Business and S27
Description of Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Range of Estimated Useful Lives | The range of estimated useful lives is as follows: Leasehold and land improvements 10-30 years Buildings 10-30 years Parts and service equipment 7-10 years Office equipment and fixtures 3-10 years Company vehicles 3-5 years |
Business Acquisitions and Dis28
Business Acquisitions and Dispositions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Revenues and Other Activities Associated with Dealerships Classified as Discontinued Operations | Results associated with dealerships classified as discontinued operations were as follows: Year Ended December 31, 2015 2014 2013 (In thousands) Income (loss) from operations $ (1,421 ) $ (2,515 ) $ (978 ) Gain (loss) on disposal - 199 (457 ) Lease exit accrual adjustments and charges (1,462 ) 152 (2,582 ) Pre-tax income (loss) $ (2,883 ) $ (2,164 ) $ (4,017 ) Total revenues $ - $ - $ - |
Revenues and Other Activities Associated with Disposed Dealerships That Remain in Continued Operations | Revenues and other activities associated with disposed dealerships that remain in continuing operations were as follows: Year Ended December 31, 2015 2014 2013 (In thousands) Income (loss) from operations $ (4,958 ) $ (2,475 ) $ (747 ) Gain (loss) on disposal 2,748 11,079 - Property and equipment impairment charges (10,096 ) (125 ) (5,855 ) Pre-tax income (loss) $ (12,306 ) $ 8,479 $ (6,602 ) Total revenues $ 95,168 $ 311,978 $ 421,639 |
Inventories and Related Notes29
Inventories and Related Notes Payable - Floor Plan (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | Inventories consist of the following: December 31, 2015 December 31, 2014 (In thousands) New vehicles $ 1,161,490 $ 924,818 Used vehicles 251,103 214,015 Service loaners 121,946 112,520 Parts, accessories and other 65,042 60,349 Net inventories $ 1,599,581 $ 1,311,702 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property Plant And Equipment [Abstract] | |
Components of Property and Equipment, Net | Property and equipment consists of the following: December 31, 2015 December 31, 2014 (In thousands) Land $ 260,275 $ 224,124 Building and improvements 679,712 582,261 Office equipment and fixtures 183,896 151,165 Parts and service equipment 79,219 68,248 Company vehicles 8,478 8,958 Construction in progress 55,010 81,180 Total, at cost 1,266,590 1,115,936 Less accumulated depreciation (379,688 ) (316,617 ) Property and equipment, net $ 886,902 $ 799,319 |
Property and Equipment Impairment Charges | During the years ended December 31, 2015, 2014 and 2013, property and equipment impairment charges were recorded in continuing operations as noted in the following table: Year Ended December 31, (In thousands) 2015 $ 12,210 2014 $ 4,394 2013 $ 9,272 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Amount of Franchise Assets and Goodwill | The changes in the carrying amount of franchise assets and goodwill for the years ended December 31, 2015 and 2014 were as follows: Franchise Assets Net Goodwill (In thousands) Balance, December 31, 2013 $ 79,535 $ 476,315 (1) Additions through current year acquisitions 7,500 10,176 Prior year acquisition allocations - (3 ) Reductions from dispositions (7,735 ) (10,559 ) Reductions from impairment (2,200 ) - Balance at December 31, 2014 $ 77,100 $ 475,929 (1) Prior year acquisition allocations 1,100 (870 ) Reductions from dispositions - (1,121 ) Reductions from impairment (3,300 ) (2,445 ) Balance at December 31, 2015 $ 74,900 $ 471,493 (1) (1) Net of accumulated impairment losses of $796,725. |
Definite Life Intangible Assets | Definite life intangible assets consist of the following: December 31, 2015 December 31, 2014 (In thousands) Favorable lease agreements $ 17,318 $ 17,318 Less accumulated amortization (11,342 ) (10,698 ) Definite life intangibles, net $ 5,976 $ 6,620 |
Future Amortization Expense | Future amortization expense is as follows: Year Ending December 31, (In thousands) 2016 $ 644 2017 644 2018 644 2019 644 2020 614 Thereafter 2,786 Total $ 5,976 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Instrument [Line Items] | |
Long-Term Debt | Long-term debt consists of the following: December 31, 2015 December 31, 2014 (In thousands) 2014 Revolving Credit Facility (1) $ 4,203 $ - 7.0% Senior Subordinated Notes due 2022 (the "7.0% Notes") 200,000 200,000 5.0% Senior Subordinated Notes due 2023 (the "5.0% Notes") 300,000 300,000 Notes payable to a finance company bearing interest from 9.52% to 10.52% (with a weighted average of 10.19%) 820 4,367 Mortgage notes to finance companies-fixed rate, bearing interest from 3.51% to 7.03% 168,410 147,554 Mortgage notes to finance companies-variable rate, bearing interest at 1.25 to 3.50 percentage points above one-month LIBOR 150,961 118,368 Net debt discount and premium (2) (1,562 ) (1,761 ) Debt issuance costs (3) (12,884 ) (14,882 ) Other 4,634 4,884 Total debt $ 814,582 $ 758,530 Less current maturities (33,437 ) (30,802 ) Long-term debt $ 781,145 $ 727,728 (1) The interest rate on the 2014 Revolving Credit Facility was 2.25% above LIBOR at December 31, 2015 and 2014. (2) December 31, 2015 includes $1.3 million discount associated with the 7.0% Notes and $0.3 million discount associated with mortgage notes payable. December 31, 2014 includes $1.5 million discount associated with the 7.0% Notes, $0.1 million premium associated with notes payable to a finance company and $0.4 million discount associated with mortgage notes payable. (3) Debt issuance costs are presented here as of December 31, 2015 and 2014 as a result of the adoption of ASU 2015-03. See the heading “Recent Accounting Pronouncements” in Note 1, “Description of Business and Summary of Significant Accounting Policies,” for further discussion. |
Future Maturities of Long-Term Debt | Future maturities of long-term debt are as follows: Principal Net of Discount/ Premium Year Ending December 31, (In thousands) 2016 $ 33,681 $ 33,437 2017 38,550 38,428 2018 51,404 51,404 2019 19,222 19,222 2020 46,589 46,589 Thereafter 639,582 638,386 Total $ 829,028 $ 827,466 |
Summary of Interest Received and Paid under Term of Cash Flow Swap | Under the terms of these cash flow swaps, Sonic will receive and pay interest based on the following: Notional Amount Pay Rate Receive Rate (1) Maturing Date (In millions) $ 2.5 7.100% one-month LIBOR + 1.50% July 10, 2017 $ 8.0 4.655% one-month LIBOR December 10, 2017 $ 7.0 (2) 6.860% one-month LIBOR + 1.25% August 1, 2017 $ 6.2 (2) 6.410% one-month LIBOR + 1.25% September 12, 2017 $ 100.0 2.065% one-month LIBOR June 30, 2017 $ 100.0 2.015% one-month LIBOR June 30, 2017 $ 200.0 0.788% one-month LIBOR July 1, 2016 $ 50.0 (3) 1.320% one-month LIBOR July 1, 2017 $ 250.0 (4) 1.887% one-month LIBOR June 30, 2018 $ 25.0 (3) 2.080% one-month LIBOR July 1, 2017 $ 100.0 1.560% one-month LIBOR July 1, 2017 $ 125.0 (3) 1.303% one-month LIBOR July 1, 2017 $ 125.0 (5) 1.900% one-month LIBOR July 1, 2018 $ 50.0 (6) 2.320% one-month LIBOR July 1, 2019 $ 200.0 (6) 2.313% one-month LIBOR July 1, 2019 (1) The one-month LIBOR rate was approximately 0.428% at December 31, 2015. (2) Changes in fair value are recorded through earnings. (3) The effective date of these forward-starting swaps is July 1, 2016. (4) The effective date of this forward-starting swap is July 3, 2017. (5) The effective date of this forward-starting swap is July 1, 2017. (6) The effective date of these forward-starting swaps is July 2, 2018. |
7.0% Senior Subordinated Notes Due 2022 [Member] | |
Debt Instrument [Line Items] | |
Redemption Price, Percentage | Sonic may redeem the 7.0% Notes in whole or in part at any time after July 15, 2017 at the following redemption prices, which are expressed as percentages of the principal amount: Redemption Price Beginning on July 15, 2017 103.500 % Beginning on July 15, 2018 102.333 % Beginning on July 15, 2019 101.167 % Beginning on July 15, 2020 and thereafter 100.000 % |
5.0% Senior Subordinated Notes due 2023 [Member] | |
Debt Instrument [Line Items] | |
Redemption Price, Percentage | Sonic may redeem the 5.0% Notes in whole or in part at any time on or after May 15, 2018 at the following redemption prices, which are expressed as percentages of the principal amount: Redemption Price Beginning on May 15, 2018 102.500 % Beginning on May 15, 2019 101.667 % Beginning on May 15, 2020 100.833 % Beginning on May 15, 2021 and thereafter 100.000 % |
2014 Credit Facility [Member] | |
Debt Instrument [Line Items] | |
Financial Covenants Include Required Specified Ratios | Sonic was in compliance with the covenants under the 2014 Credit Facilities as of December 31, 2015. Financial covenants include required specified ratios (as each is defined in the 2014 Credit Facilities) 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 5.50 December 31, 2015 actual 1.19 1.78 4.08 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes for Continuing Operations - (Benefit) Expense | The provision for income taxes for continuing operations - (benefit) expense consists of the following: Year Ended December 31, 2015 2014 2013 (In thousands) Current: Federal $ 36,241 $ 36,874 $ 33,367 State 6,414 5,771 5,647 Total current 42,655 42,645 39,014 Deferred 14,410 20,523 5,329 Total provision for income taxes for continuing operations - (benefit) expense $ 57,065 $ 63,168 $ 44,343 |
Reconciliation of Statutory Federal Income Tax Rate with Federal and State Overall Effective Income Tax Rate from Continuing Operations | The reconciliation of the statutory federal income tax rate with Sonic’s federal and state overall effective income tax rate from continuing operations is as follows: Year Ended December 31, 2015 2014 2013 Statutory federal income tax rate 35.00 % 35.00 % 35.00 % Effective state income tax rate 3.26 % 3.15 % 3.22 % Valuation allowance adjustments (0.45 %) (0.14 %) 0.33 % Uncertain tax positions (0.14 %) (0.08 %) (1.76 %) Other 1.64 % 1.13 % (2.42 %) Effective income tax rate 39.31 % 39.06 % 34.37 % |
Components of Deferred Tax Assets and Liabilities | Significant components of Sonic’s deferred tax assets and liabilities are as follows: December 31, 2015 December 31, 2014 (In thousands) Deferred tax assets: Accruals and reserves $ 33,397 $ 36,633 State net operating loss carryforwards 10,187 10,307 Fair value of interest rate swaps 3,793 4,203 Interest and state taxes associated with the liability for uncertain income tax positions 1,725 1,842 Other 864 792 Total deferred tax assets 49,966 53,777 Deferred tax liabilities: Basis difference in inventory (1,530 ) (1,597 ) Basis difference in property and equipment (9,850 ) (9,655 ) Basis difference in goodwill (86,504 ) (72,696 ) Other (3,249 ) (3,861 ) Total deferred tax liability (101,133 ) (87,809 ) Valuation allowance (5,880 ) (6,534 ) Net deferred tax asset (liability) $ (57,047 ) $ (40,566 ) |
Summary of Changes in Liability Related to Unrecognized Tax Benefits | A summary of the changes in the liability related to Sonic’s unrecognized tax benefits is presented below. 2015 2014 2013 (In thousands) Unrecognized tax benefit liability, January 1 (1) $ 5,740 $ 6,693 $ 9,097 Prior period positions: Increases 175 181 409 Decreases - (66 ) (233 ) Increases from current period positions 184 195 799 Settlements - (897 ) (1,721 ) Lapse of statute of limitations (1,114 ) (170 ) (1,164 ) Other (230 ) (196 ) (494 ) Unrecognized tax benefit liability, December 31 (2) $ 4,755 $ 5,740 $ 6,693 (1) Excludes accrued interest and penalties of $1.2 million, $1.1 million and $2.4 million at January 1, 2015, 2014 and 2013, respectively. (2) Excludes accrued interest and penalties of $1.1 million, $1.2 million and $1.1 million at December 31, 2015, 2014 and 2013, respectively. Amount presented is net of state net operating losses of $0.6 million, $0.8 million and $1.0 million at December 31, 2015, 2014 and 2013, respectively. |
Capital Structure and Per Sha34
Capital Structure and Per Share Data (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Dilutive Effect on Earnings Per Share | The following table illustrates the dilutive effect of such items on earnings per share for the years ended December 31, 2015, 2014 and 2013: Year Ended December 31, 2015 Income (Loss) Income (Loss) From Continuing From Discontinued Operations Operations Net Income (Loss) Weighted Per Per Per Average Share Share Share Shares Amount Amount Amount Amount Amount Amount (In thousands, except per share amounts) Earnings (loss) and shares 50,489 $ 88,091 $ (1,780 ) $ 86,311 Effect of participating securities: Non-vested restricted stock and restricted stock units (36 ) - (36 ) Basic earnings (loss) and shares 50,489 $ 88,055 $ 1.74 $ (1,780 ) $ (0.03 ) $ 86,275 $ 1.71 Effect of dilutive securities: Stock compensation plans 394 Diluted earnings (loss) and shares 50,883 $ 88,055 $ 1.73 $ (1,780 ) $ (0.03 ) $ 86,275 $ 1.70 Year Ended December 31, 2014 Income (Loss) Income (Loss) From Continuing From Discontinued Operations Operations Net Income (Loss) Weighted Per Per Per Average Share Share Share Shares Amount Amount Amount Amount Amount Amount (In thousands, except per share amounts) Earnings (loss) and shares 52,065 $ 98,559 $ (1,342 ) $ 97,217 Effect of participating securities: Non-vested restricted stock and restricted stock units (311 ) - (311 ) Basic earnings (loss) and shares 52,065 $ 98,248 $ 1.89 $ (1,342 ) $ (0.03 ) $ 96,906 $ 1.86 Effect of dilutive securities: Stock compensation plans 498 Diluted earnings (loss) and shares 52,563 $ 98,248 $ 1.87 $ (1,342 ) $ (0.03 ) $ 96,906 $ 1.84 Year Ended December 31, 2013 Income (Loss) Income (Loss) From Continuing From Discontinued Operations Operations Net Income (Loss) Weighted Per Per Per Average Share Share Share Shares Amount Amount Amount Amount Amount Amount (In thousands, except per share amounts) Earnings (loss) and shares 52,556 $ 84,678 $ (3,060 ) $ 81,618 Effect of participating securities: Non-vested restricted stock and restricted stock units (601 ) - (601 ) Basic earnings (loss) and shares 52,556 $ 84,077 $ 1.60 $ (3,060 ) $ (0.06 ) $ 81,017 $ 1.54 Effect of dilutive securities: Stock compensation plans 385 Diluted earnings (loss) and shares 52,941 $ 84,077 $ 1.59 $ (3,060 ) $ (0.06 ) $ 81,017 $ 1.53 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Compensation And Retirement Disclosure [Abstract] | |
Status of Options Related to Stock Plans | A summary of the status of the options related to the Stock Plans is presented below: Options Outstanding Exercise Price Per Share (Low - High) Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (In thousands, except per share data, term in years) Balance at December 31, 2014 1,064 $ 1.81 - 25.05 $ 17.62 2.2 $ 10,444 Exercised (325 ) $ 1.81 - 23.94 $ 17.18 Forfeited (25 ) $ 19.23 - 30.07 $ 24.83 Balance at December 31, 2015 714 $ 1.81 - 30.07 $ 17.56 1.6 $ 5,605 Exercisable 714 $ 1.81 - 30.07 $ 17.56 1.6 $ 5,605 Year Ended December 31, 2015 2014 2013 (In thousands, except per option data) Intrinsic value of options exercised $ 2,511 $ 1,187 $ 1,657 |
Status of Non-Vested Restricted Stock and Restricted Stock Unit Grants Related to Stock Plans | A summary of the status of non-vested restricted stock award and restricted stock unit grants related to the Stock Plans is presented below: Non-vested Restricted Stock Awards and Restricted Stock Units Weighted Average Grant Date Fair Value per Share (Shares in thousands) Balance at December 31, 2014 889 $ 21.33 Granted 1,443 $ 23.74 Forfeited (133 ) $ 21.48 Vested (368 ) $ 20.80 Balance at December 31, 2015 1,831 $ 23.33 |
Status of Supplemental Executive Retirement Plan | The following table sets forth the status of the SERP: Year Ended December 31, 2015 2014 (In thousands) Change in projected benefit obligation: Obligation at January 1, 2015 $ 7,976 $ 5,263 Service cost 1,950 1,467 Interest cost 307 251 Actuarial loss (gain) (737 ) 1,174 Amendments/settlements/curtailments loss (gain) - - Benefits paid (262 ) (179 ) Obligation at December 31, 2015 (1) $ 9,234 $ 7,976 Accumulated benefit obligation $ 7,115 $ 6,002 (1) Approximately $8.9 million is included in other long-term liabilities and $0.3 million is included in other accrued liabilities in the accompanying Consolidated Balance Sheets. Year Ended December 31, 2015 2014 (In thousands) Change in fair value of plan assets: Plan assets at January 1, 2015 $ - $ - Actual return on plan assets - - Employer contributions 262 179 Benefits paid (262 ) (179 ) Plan assets at December 31, 2015 - - Funded status recognized $ (9,234 ) $ (7,976 ) |
Cost Components of Supplemental Executive Retirement Plan | The following table provides the cost components of the SERP: Year Ended December 31, (In thousands) 2015 2014 Service cost $ 1,950 $ 1,467 Interest cost 307 251 Net Pension expense (benefit) $ 2,257 $ 1,718 |
Weighted Average Assumptions Used to Determine Benefit Obligation and Net Periodic Benefit Costs | The weighted average assumptions used to determine the benefit obligation and net periodic benefit costs consist of: As of December 31, 2015 2014 Discount rate 4.21 % 3.88 % Rate of compensation increase 3.00 % 3.00 % |
Estimated Future Benefit Payments | The estimated future benefit payments expected to be paid for each of the next five years and the sum of the payments expected for the next five years thereafter are: Estimated Future Benefit Payments Year Ending December 31, (In thousands) 2016 $ 270 2017 $ 265 2018 $ 265 2019 $ 265 2020 $ 364 2021 - 2025 $ 1,820 |
Schedule of Multi-Employer Pension Plans Affecting Period-to-Period Comparability of Contributions | The number of employees covered by Sonic’s multi-employer pension plans increased 2.8% from December 31, 2013 to December 31, 2014 and increased 4.8% from December 31, 2014 to December 31, 2015, affecting the period-to-period comparability of the contributions for years ended December 31, 2015, 2014 and 2013. Pension Protection Act Zone Status FIP/RP Status Sonic Contributions Collective Bargaining Pension EIN/Pension Pending / Year Ended December 31, Surcharge Agreement Fund Plan Number 2015 2014 Implemented 2015 2014 2013 Imposed Expiration Date (1) (In thousands) AI Pension Plan 94-1133245 Red Red RP Implemented $ 140 $ 148 $ 135 Yes Between August 31, 2014 and November 29, 2017 (1) Collective bargaining agreement expiration dates vary by union and dealership. Dates shown represent the range of the earliest and latest stated expirations for Sonic’s union employees, noting certain of Sonic’s collective bargaining agreements are expired as of December 31, 2015 and are currently under negotiation. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Assets or Liabilities Recorded at Fair Value | Assets or liabilities recorded at fair value in the accompanying Consolidated Balance Sheets as of December 31, 2015 and 2014 are as follows: Fair Value Based on Significant Other Observable Inputs (Level 2) December 31, 2015 December 31, 2014 (In thousands) Assets: Cash surrender value of life insurance policies (1) $ 29,055 $ 27,552 Cash flow swaps designated as hedges (1) - 618 Total assets $ 29,055 $ 28,170 Liabilities: Cash flow swaps designated as hedges (2) $ 9,094 $ 10,251 Cash flow swaps not designated as hedges (3) 913 1,469 Deferred compensation plan (4) 13,551 15,863 Total liabilities $ 23,558 $ 27,583 (1) Included in other assets in the accompanying Consolidated Balance Sheets. (2) As of December 31, 2015, approximately $4.6 million and $4.5 million were included in other accrued liabilities and other long-term liabilities, respectively, in the accompanying Consolidated Balance Sheets. As of December 31, 2014, approximately $7.5 million and $2.8 million were included in other accrued liabilities and other long-term liabilities, respectively, in the accompanying Consolidated Balance Sheets. (3) As of December 31, 2015, approximately $0.5 million and $0.4 million were included in other accrued liabilities and other long-term liabilities, respectively, in the accompanying Consolidated Balance Sheets. As of December 31, 2014, approximately $0.7 million and $0.8 million were included in other accrued liabilities and other long-term liabilities, respectively, in the accompanying Consolidated Balance Sheets. (4) Included in other long-term liabilities in the accompanying Consolidated Balance Sheets. |
Assets or Liabilities Measured at Fair Value on a Non-Recurring Basis | The carrying value of assets or liabilities measured at fair value on a non-recurring basis but not completely adjusted to fair value in the accompanying Consolidated Balance Sheets as of December 31, 2015, are included in the table below. Certain components of long-lived assets held and used have been adjusted to fair value through impairment charges as discussed in Note 4, “Property and Equipment” and Note 5, “Intangible Assets and Goodwill.” Significant Unobservable Total Gains / Inputs (Losses) for the Balance as of (Level 3) as of Year Ended December 31, 2015 December 31, 2015 December 31, 2015 (In thousands) Long-lived assets held and used (1) $ 886,902 $ 886,902 $ (12,210 ) Goodwill (2) $ 471,493 $ 471,493 $ (2,445 ) Franchise assets (2) $ 74,900 $ 74,900 $ (3,300 ) (1) See Notes 1 and 4 for discussion. (2) See Notes 1 and 5 for discussion. |
Fair Value and Carrying Value of Fixed Rate Long-Term Debt | The fair value and carrying value of Sonic’s fixed rate long-term debt was as follows: December 31, 2015 December 31, 2014 Fair Value Carrying Value Fair Value Carrying Value (In thousands) 7.0% Notes (1) $ 211,000 $ 198,708 $ 216,000 $ 198,556 5.0% Notes (1) $ 284,250 $ 300,000 $ 294,000 $ 300,000 Mortgage Notes (2) $ 174,007 $ 168,410 $ 152,240 $ 147,554 Assumed Notes (2) $ 818 $ 823 $ 4,365 $ 4,474 Other (2) $ 4,374 $ 4,634 $ 4,588 $ 4,884 (1) As determined by market quotations as of December 31, 2015 and December 31, 2014, respectively (Level 1). (2) As determined by discounted cash flows (Level 3). |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments And Contingencies Disclosure [Abstract] | |
Summary of Lease Exit Accruals | A summary of the activity of these operating lease accruals consists of the following: (In thousands) Balance at December 31, 2014 $ 18,962 Lease exit expense (1) 1,848 Payments (2) (6,283 ) Balance at December 31, 2015 $ 14,527 (1) Expense of approximately $0.2 million is recorded in interest expense, other, net and expense of approximately $0.1 million is recorded in selling, general and administrative expenses. In addition, expense of approximately $1.5 million is recorded in income (loss) from discontinued operations in the accompanying Consolidated Statements of Income. (2) Amount is recorded as an offset to rent expense in selling, general and administrative expenses, with approximately $0.7 million in continuing operations and $5.6 million in income (loss) from discontinued operations in the accompanying Consolidated Statements of Income. |
Minimum Future Lease Payments for both Continuing and Discontinued Operations | Minimum future lease payments for facility leases and future receipts from subleases as required under non-cancelable operating leases for both continuing and discontinued operations based on current interest rates in effect are as follows: Future Minimum Lease Payments, Net Receipts from Future Subleases Year Ending December 31, (In thousands) 2016 $ 94,119 $ (14,254 ) 2017 $ 78,948 $ (10,922 ) 2018 $ 68,719 $ (9,256 ) 2019 $ 55,404 $ (8,168 ) 2020 $ 32,155 $ (7,731 ) Thereafter $ 97,793 $ (24,395 ) |
Financial Covenants Related to Amended Subordination and Guaranty Agreement | The required financial covenants related to certain lease agreements are as follows: Covenant Minimum Consolidated Liquidity Ratio Minimum Consolidated Fixed Charge Coverage Ratio Maximum Consolidated Total Lease Adjusted Leverage Ratio Minimum EBTDAR to Rent Ratio Required ratio 1.05 1.20 5.50 1.50 December 31, 2015 actual 1.19 1.78 4.08 3.81 |
Accumulated Other Comprehensi38
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Income (Loss) | The changes in accumulated other comprehensive income (loss) for the year ended December 31, 2015 are as follows: Changes in Accumulated Other Comprehensive Income (Loss) by Component for the Year Ended December 31, 2015 Gains and Losses on Cash Flow Hedges Defined Benefit Pension Plan Total Accumulated Other Comprehensive Income (Loss) (In thousands) Balance at December 31, 2014 $ (5,973 ) $ (451 ) $ (6,424 ) Other comprehensive income (loss) before reclassifications (1) (4,679 ) 457 (4,222 ) Amounts reclassified out of accumulated other comprehensive income (loss) (2) 5,014 - 5,014 Net current-period other comprehensive income (loss) 335 457 792 Balance at December 31, 2015 $ (5,638 ) $ 6 $ (5,632 ) (1) Net of tax benefit of $2,868 related to gains and losses on cash flow hedges, and tax expense of $280 related to the defined benefit pension plan. (2) Net of tax expense of $3,073. |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Summary of Reportable Operating Segment | Reportable segment revenue, segment income, floor plan interest expense, depreciation and amortization, capital expenditures and total assets are as follows: Year Ended December 31, 2015 2014 2013 (In thousands) Revenues: Franchised Dealerships $ 9,547,236 $ 9,191,661 $ 8,843,168 EchoPark® 77,063 5,438 - Total consolidated revenues $ 9,624,299 $ 9,197,099 $ 8,843,168 Year Ended December 31, 2015 2014 2013 (In thousands) Segment income (loss) (1): Franchised Dealerships $ 213,224 $ 230,733 $ 218,139 EchoPark® (17,257 ) (15,913 ) (5,490 ) Total segment income (loss) 195,967 214,820 212,649 Interest expense, other, net (50,910 ) (53,190 ) (55,485 ) Other income (expense), net 99 97 (28,143 ) Income (loss) from continuing operations before taxes $ 145,156 $ 161,727 $ 129,021 (1) Segment income (loss) for each segment is defined as operating income less floor plan interest expense. Year Ended December 31, 2015 2014 2013 (In thousands) Floor plan interest expense: Franchised Dealerships $ 20,727 $ 18,727 $ 21,954 EchoPark® 599 66 - Total floor plan interest expense $ 21,326 $ 18,793 $ 21,954 Year Ended December 31, 2015 2014 2013 (In thousands) Depreciation and amortization: Franchised Dealerships $ 65,766 $ 58,001 $ 54,007 EchoPark® 3,033 259 - Total depreciation and amortization $ 68,799 $ 58,260 $ 54,007 Year Ended December 31, 2015 2014 2013 (In thousands) Capital expenditures: Franchised Dealerships $ 148,593 $ 117,129 $ 151,947 EchoPark® 24,656 29,303 5,670 Total capital expenditures $ 173,249 $ 146,432 $ 157,617 December 31, 2015 2014 (In thousands) Assets: Franchised Dealerships $ 2,211,232 $ 1,841,950 EchoPark® 76,808 42,115 Corporate and other: Cash and Cash Equivalents 3,625 4,182 Goodwill, Net 471,493 475,929 Other Intangible Assets, Net 80,876 83,720 Other Corporate and other assets 718,347 720,357 Total assets $ 3,562,381 $ 3,168,253 |
Summary of Quarterly Financia40
Summary of Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Consolidated Statements of Income by Quarter | The following table summarizes Sonic’s results of operations as presented in the accompanying Consolidated Statements of Income by quarter for the years ended December 31, 2015 and 2014: First Quarter Second Quarter Third Quarter Fourth Quarter (In thousands, except per share data) Year Ended December 31, 2015 Total revenues (1) $ 2,235,516 $ 2,423,740 $ 2,494,408 $ 2,470,635 Gross profit (1) $ 334,959 $ 355,554 $ 360,251 $ 363,848 Net income (loss) (2) $ 13,967 $ 14,781 $ 26,505 $ 31,058 Earnings (loss) per common share - Basic (2) (3) $ 0.27 $ 0.29 $ 0.53 $ 0.62 Earnings (loss) per common share - Diluted (2) (3) $ 0.27 $ 0.29 $ 0.52 $ 0.62 Year Ended December 31, 2014 Total revenues (1) $ 2,136,387 $ 2,353,280 $ 2,355,604 $ 2,351,828 Gross profit (1) $ 329,000 $ 346,947 $ 341,489 $ 348,464 Net income (loss) (2) $ 19,386 $ 26,993 $ 24,712 $ 26,126 Earnings (loss) per common share - Basic (2) (3) $ 0.37 $ 0.51 $ 0.47 $ 0.51 Earnings (loss) per common share - Diluted (2) (3) $ 0.36 $ 0.51 $ 0.47 $ 0.50 Note: Operations are subject to seasonal variations. The first quarter generally contributes less operating profits than the second, third and fourth quarters. Parts and service demand remains more stable throughout the year. (1) Results are for continuing operations. (2) Results include both continuing operations and discontinued operations. (3) The sum of net income per common share for the quarters may not equal the full year amount due to weighted average common shares being calculated on a quarterly versus annual basis. |
Description of Business and S41
Description of Business and Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)DealershipsStateBrandCollisionStoreFranchiseSegment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||
Number of dealerships | Dealerships | 114 | ||
Number of states | State | 13 | ||
Number of different brands of cars and light trucks | Brand | 25 | ||
Number of collision repair centers | Collision | 18 | ||
Book overdraft position | $ 38,500 | $ 37,100 | |
Revenue allowances for commission reserves | 17,000 | 15,400 | |
Amount recognized for continue operation | $ 42,100 | 39,700 | $ 37,900 |
Term for funding of finance contracts | 10 days | ||
Contracts in transit included in receivables, net | $ 196,300 | 194,000 | |
Number of reporting units | Franchise | 2 | ||
Goodwill | $ 471,493 | 475,929 | 476,315 |
Insurance reserves | 24,900 | 23,900 | |
Concentrations of credit risk with respect to receivables are limited primarily to automobile manufacturers | 90,300 | 90,100 | |
Deposits | 74,000 | 57,500 | |
Reduction in interest expense | 1,500 | 2,100 | 1,000 |
Advertising expense | 61,600 | 57,400 | 56,600 |
Cooperative manufacturer credits advertising expenses | $ 24,200 | 23,400 | 21,800 |
Number of reportable Segment | Segment | 2 | ||
Financial Institutions [Member] | |||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||
Concentrations of credit risk with respect to receivables are limited primarily to financial institutions | $ 221,600 | 215,400 | |
Franchise Assets [Member] | |||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||
Franchise asset impairment charge | 3,300 | 2,200 | |
Continuing Operations [Member] | Franchise Assets [Member] | |||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||
Franchise asset impairment charge | 900 | $ 2,200 | $ 600 |
Discontinued Operations [Member] | Franchise Assets [Member] | |||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||
Franchise asset impairment charge | $ 2,400 | ||
Dealership [Member] | |||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||
Percentage of dealership that is accounted for under the equity method | 50.00% | ||
Franchised Dealerships [Member] | |||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||
Number of stores | Store | 96 | ||
Echo Park [Member] | |||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||
Number of stores | Store | 3 |
Description of Business and S42
Description of Business and Summary of Significant Accounting Policies - Range of Estimated Useful Lives (Detail) | 12 Months Ended |
Dec. 31, 2015 | |
Leasehold and Land Improvements [Member] | Minimum [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives | 10 years |
Leasehold and Land Improvements [Member] | Maximum [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives | 30 years |
Buildings [Member] | Minimum [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives | 10 years |
Buildings [Member] | Maximum [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives | 30 years |
Parts and Service Equipment [Member] | Minimum [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives | 7 years |
Parts and Service Equipment [Member] | Maximum [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives | 10 years |
Office Equipment and Fixtures [Member] | Minimum [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives | 3 years |
Office Equipment and Fixtures [Member] | Maximum [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives | 10 years |
Company Vehicles [Member] | Minimum [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives | 3 years |
Company Vehicles [Member] | Maximum [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives | 5 years |
Business Acquisitions and Dis43
Business Acquisitions and Dispositions - Additional Information (Detail) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2014Franchise | Dec. 31, 2015USD ($)DealershipsFranchise | Dec. 31, 2014USD ($)DealershipsFranchise | Dec. 31, 2013Dealerships | Mar. 31, 2014Franchise | |
Business Acquisition [Line Items] | |||||
Number of franchise acquired | 0 | ||||
Purchase price for franchise operations and underlying assets, including real estate, acquired | $ | $ 50.9 | ||||
Number of dealerships held for sale | 0 | 0 | |||
Number of franchises disposed | 2 | 4 | 9 | 0 | |
Cash generated from disposition | $ | $ 8 | $ 74.8 | |||
Luxury Franchise [Member] | |||||
Business Acquisition [Line Items] | |||||
Number of franchise acquired | 2 | ||||
Mid-line Import Franchise [Member] | |||||
Business Acquisition [Line Items] | |||||
Number of franchise acquired | 1 | ||||
Domestic Franchise [Member] | |||||
Business Acquisition [Line Items] | |||||
Number of franchise acquired | 1 |
Business Acquisitions and Dis44
Business Acquisitions and Dispositions - Revenues and Other Activities Associated with Dealerships Classified as Discontinued Operations (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Business Combinations [Abstract] | |||
Income (loss) from operations | $ (1,421) | $ (2,515) | $ (978) |
Gain (loss) on disposal | 199 | (457) | |
Lease exit accrual adjustments and charges | (1,462) | 152 | (2,582) |
Pre-tax income (loss) | $ (2,883) | $ (2,164) | $ (4,017) |
Business Acquisitions and Dis45
Business Acquisitions and Dispositions - Revenues and Other Activities Associated with Disposed Dealerships That Remain in Continued Operations (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Business Combinations [Abstract] | |||
Income (loss) from operations | $ (4,958) | $ (2,475) | $ (747) |
Gain (loss) on disposal | 2,748 | 11,079 | |
Property and equipment impairment charges | (10,096) | (125) | (5,855) |
Pre-tax income (loss) | (12,306) | 8,479 | (6,602) |
Total revenues | $ 95,168 | $ 311,978 | $ 421,639 |
Inventories and Related Notes46
Inventories and Related Notes Payable - Floor Plan - Components of Inventories (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
New vehicles | $ 1,161,490 | $ 924,818 |
Used vehicles | 251,103 | 214,015 |
Service loaners | 121,946 | 112,520 |
Parts, accessories and other | 65,042 | 60,349 |
Net inventories | $ 1,599,581 | $ 1,311,702 |
Inventories and Related Notes47
Inventories and Related Notes Payable - Floor Plan - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Inventory Disclosure [Abstract] | |||
Average interest rate for new vehicle floor plan facilities, for continuing operations and discontinued operations | 1.61% | 1.57% | 1.86% |
Amount recognized as reduction in cost of sales for continuing and discontinued operations | $ 42.1 | $ 39.7 | $ 37.9 |
Average interest rate for used vehicle floor plan facilities, for continuing operations and discontinued operations | 1.72% | 1.80% | 2.78% |
Property and Equipment - Compon
Property and Equipment - Components of Property and Equipment, Net (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Property Plant And Equipment [Line Items] | ||
Total, at cost | $ 1,266,590 | $ 1,115,936 |
Less accumulated depreciation | (379,688) | (316,617) |
Property and equipment, net | 886,902 | 799,319 |
Land [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total, at cost | 260,275 | 224,124 |
Building and Improvements [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total, at cost | 679,712 | 582,261 |
Office Equipment and Fixtures [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total, at cost | 183,896 | 151,165 |
Parts and Service Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total, at cost | 79,219 | 68,248 |
Company Vehicles [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total, at cost | 8,478 | 8,958 |
Construction in Progress [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total, at cost | $ 55,010 | $ 81,180 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property Plant And Equipment [Abstract] | |||
Interest capitalized in conjunction with construction projects | $ 1.9 | $ 1.9 | $ 2.5 |
Commitments for facility construction projects | $ 64.8 |
Property and Equipment - Proper
Property and Equipment - Property and Equipment Impairment Charges (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Continuing Operations [Member] | |||
Property Plant And Equipment [Line Items] | |||
Property and equipment impairment charges | $ 12,210 | $ 4,394 | $ 9,272 |
Intangible Assets and Goodwil51
Intangible Assets and Goodwill - Changes in Carrying Amount of Franchise Assets and Goodwill (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Indefinite-lived Intangible Assets [Line Items] | ||
Net Goodwill, Beginning balance | $ 475,929 | $ 476,315 |
Net Goodwill, Additions through current year acquisitions | 10,176 | |
Net Goodwill, Prior year acquisition allocations | (870) | (3) |
Net Goodwill, Reductions from dispositions | (1,121) | (10,559) |
Net Goodwill, Reductions from impairment | (2,445) | |
Net Goodwill, Ending balance | 471,493 | 475,929 |
Franchise Assets [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Franchise Assets, Beginning balance | 77,100 | 79,535 |
Franchise Assets, Additions through current year acquisitions | 7,500 | |
Franchise Assets, Prior year acquisition allocations | 1,100 | |
Franchise Assets, Reductions from dispositions | (7,735) | |
Franchise Assets, Reductions from impairment | (3,300) | (2,200) |
Franchise Assets, Ending balance | $ 74,900 | $ 77,100 |
Intangible Assets and Goodwil52
Intangible Assets and Goodwill - Changes in Carrying Amount of Franchise Assets and Goodwill (Parenthetical) (Detail) $ in Thousands | Dec. 31, 2015USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Net of accumulated impairment losses | $ 796,725 |
Intangible Assets and Goodwil53
Intangible Assets and Goodwill - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill impairment | $ 2,445,000 | ||
Definite life Intangible asset, impairment charge | 0 | $ 0 | $ 0 |
Definite lived intangible assets, amortization expense | $ 600,000 | 1,200,000 | 1,600,000 |
Lease Agreements [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-average amortization period | 17 years | ||
Lease Agreements [Member] | Minimum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Expiration period | 2,020 | ||
Lease Agreements [Member] | Maximum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Expiration period | 2,027 | ||
Franchise Assets [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Indefinite life Intangible asset, impairment charge | $ 3,300,000 | 2,200,000 | |
Discontinued Operations [Member] | Franchise Assets [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill impairment | 2,400,000 | ||
Indefinite life Intangible asset, impairment charge | 2,400,000 | ||
Discontinued Operations [Member] | Franchise Assets [Member] | Dealership [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Indefinite life Intangible asset, impairment charge | 2,400,000 | ||
Continuing Operations [Member] | Franchise Assets [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Indefinite life Intangible asset, impairment charge | $ 900,000 | $ 2,200,000 | $ 600,000 |
Intangible Assets and Goodwil54
Intangible Assets and Goodwill - Definite Life Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Finite-Lived Intangible Assets [Line Items] | ||
Less accumulated amortization | $ (11,342) | $ (10,698) |
Definite life intangibles, net | 5,976 | 6,620 |
Favorable Lease Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Definite life intangibles, gross | $ 17,318 | $ 17,318 |
Intangible Assets and Goodwil55
Intangible Assets and Goodwill - Future Amortization Expense (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
2,016 | $ 644 | |
2,017 | 644 | |
2,018 | 644 | |
2,019 | 644 | |
2,020 | 614 | |
Thereafter | 2,786 | |
Total | $ 5,976 | $ 6,620 |
Long-Term Debt - Long-Term Debt
Long-Term Debt - Long-Term Debt (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Net debt discount and premium | $ (1,562) | $ (1,761) |
Debt issuance costs | (12,884) | (14,882) |
Other | 4,634 | 4,884 |
Total debt | 814,582 | 758,530 |
Less current maturities | (33,437) | (30,802) |
Long-Term Debt | 781,145 | 727,728 |
2014 Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
2014 Revolving Credit Facility | 4,203 | |
7.0% Senior Subordinated Notes Due 2022 [Member] | ||
Debt Instrument [Line Items] | ||
Senior Subordinated Notes | 200,000 | 200,000 |
Total debt | 198,708 | 198,556 |
5.0% Senior Subordinated Notes due 2023 [Member] | ||
Debt Instrument [Line Items] | ||
Senior Subordinated Notes | 300,000 | 300,000 |
Total debt | 300,000 | 300,000 |
Notes Payable to Finance Company [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable to a finance company bearing interest from 9.52% to 10.52% (with a weighted average of 10.19%) | 820 | 4,367 |
Mortgage Notes [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable to a finance company bearing interest from 9.52% to 10.52% (with a weighted average of 10.19%) | 319,400 | |
Mortgage notes to finance companies-fixed rate, bearing interest from 3.51% to 7.03% | 168,410 | 147,554 |
Mortgage notes to finance companies-variable rate, bearing interest at 1.25 to 3.50 percentage points above one-month LIBOR | $ 150,961 | $ 118,368 |
Long-Term Debt - Long-Term De57
Long-Term Debt - Long-Term Debt (Parenthetical) (Detail) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | May. 09, 2013 | Jul. 02, 2012 |
7.0% Senior Subordinated Notes Due 2022 [Member] | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate on debt agreement | 7.00% | 7.00% | 7.00% | |
Discount associated with notes | $ 1.3 | $ 1.5 | ||
5.0% Senior Subordinated Notes due 2023 [Member] | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate on debt agreement | 5.00% | 5.00% | 5.00% | |
2014 Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 2.25% | 2.25% | ||
Notes Payable to Finance Company [Member] | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate on notes | 10.19% | |||
Premium associated with notes | $ 0.1 | |||
Notes Payable to Finance Company [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate on debt agreement | 9.52% | |||
Notes Payable to Finance Company [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate on debt agreement | 10.52% | |||
Mortgage Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Discount associated with notes | $ 0.3 | $ 0.4 | ||
Mortgage Notes [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Mortgage notes to finance companies-fixed rate, percentage | 3.51% | |||
Mortgage notes to finance companies-variable rate, percentage | 1.25% | |||
Mortgage Notes [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Mortgage notes to finance companies-fixed rate, percentage | 7.03% | |||
Mortgage notes to finance companies-variable rate, percentage | 3.50% |
Long-Term Debt - Future Maturit
Long-Term Debt - Future Maturities of Long-Term Debt (Detail) $ in Thousands | Dec. 31, 2015USD ($) |
Debt Disclosure [Abstract] | |
Principal, 2016 | $ 33,681 |
Principal, 2017 | 38,550 |
Principal, 2018 | 51,404 |
Principal, 2019 | 19,222 |
Principal, 2020 | 46,589 |
Principal, Thereafter | 639,582 |
Principal amount, Total | 829,028 |
Net of Discount/Premium, 2016 | 33,437 |
Net of Discount/Premium, 2017 | 38,428 |
Net of Discount/Premium, 2018 | 51,404 |
Net of Discount/Premium, 2019 | 19,222 |
Net of Discount/Premium, 2020 | 46,589 |
Net of Discount/Premium, Thereafter | 638,386 |
Net of Discount/Premium, Total | $ 827,466 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) | May. 09, 2013USD ($) | Jul. 02, 2012USD ($)shares | Dec. 31, 2015USD ($)shares | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($)Agreement | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($)shares | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)shares | Dec. 31, 2013USD ($) |
Debt Instrument [Line Items] | |||||||||||||
Retained earnings | $ 457,010,000 | $ 376,353,000 | $ 457,010,000 | $ 376,353,000 | |||||||||
Net income (loss) | $ 31,058,000 | $ 26,505,000 | $ 14,781,000 | $ 13,967,000 | 26,126,000 | $ 24,712,000 | $ 26,993,000 | $ 19,386,000 | $ 86,311,000 | 97,217,000 | $ 81,618,000 | ||
Convertible senior notes due | 2,029 | ||||||||||||
Minimum EBTDAR to rent ratio | 381.00% | 381.00% | |||||||||||
Notional Forward | Agreement | 4 | ||||||||||||
Incremental interest expense | $ 7,800,000 | 10,700,000 | $ 11,800,000 | ||||||||||
Net expense expected to be reclassified | $ 3,200,000 | 3,200,000 | |||||||||||
Derivative Instruments and Hedging Activities [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Fair value of swap positions | 10,000,000 | 11,100,000 | 10,000,000 | 11,100,000 | |||||||||
Benefits and charges related to cash flow swaps not designated as hedges | 600,000 | 500,000 | $ 900,000 | ||||||||||
Derivative Instruments and Hedging Activities [Member] | Other Accrued Liabilities [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Fair value of swap positions | 5,100,000 | 8,200,000 | 5,100,000 | 8,200,000 | |||||||||
Derivative Instruments and Hedging Activities [Member] | Other Long-Term Liabilities [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Fair value of swap positions | $ 4,900,000 | 3,500,000 | $ 4,900,000 | 3,500,000 | |||||||||
Derivative Instruments and Hedging Activities [Member] | Other Assets [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Fair value of swap positions | $ 600,000 | $ 600,000 | |||||||||||
Assumed Notes [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Stated interest rate on debt agreement | 5.35% | 5.35% | |||||||||||
Premium recorded on notes payable | $ 7,300,000 | $ 7,300,000 | |||||||||||
Outstanding principal balance | 800,000 | $ 800,000 | |||||||||||
Notes payable due date | August 2,016 | ||||||||||||
Mortgage Notes [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Outstanding principal balance | $ 319,400,000 | $ 319,400,000 | |||||||||||
Notes payable due date | Between 2016 and 2033 | ||||||||||||
Debt weighted average interest rate on note | 3.74% | 3.74% | |||||||||||
Mortgage financing aggregate | $ 69,100,000 | $ 69,100,000 | |||||||||||
Percentage of operating locations related to mortgage financing | 37.00% | ||||||||||||
Required Ratio [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Minimum EBTDAR to rent ratio | 150.00% | 150.00% | |||||||||||
Common Class A [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Common stock, shares issued | shares | 62,586,381 | 62,046,966 | 62,586,381 | 62,046,966 | |||||||||
2014 Credit Facility [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maturity date of revolving credit facility and floor plan facility | Aug. 15, 2019 | ||||||||||||
Retained earnings | $ 0 | $ 0 | |||||||||||
Net income (loss) | $ 0 | ||||||||||||
Minimum EBTDAR to rent ratio | 381.00% | 381.00% | |||||||||||
2014 Credit Facility [Member] | Required Ratio [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Minimum EBTDAR to rent ratio | 150.00% | 150.00% | |||||||||||
2014 Revolving Credit Facility [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Current borrowing capacity | $ 225,000,000 | $ 225,000,000 | |||||||||||
Maximum borrowing capacity | 275,000,000 | 275,000,000 | |||||||||||
Borrowing base | 208,200,000 | 208,200,000 | |||||||||||
Letters of credit outstanding amount | 22,900,000 | 22,900,000 | |||||||||||
2014 Revolving Credit Facility | 4,203,000 | 4,203,000 | |||||||||||
Borrowing availability amount | 181,100,000 | 181,100,000 | |||||||||||
2014 Floor Plan Facilities [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Maximum borrowing capacity | 800,000,000 | 800,000,000 | |||||||||||
Increase in credit facility borrowing capacity | 1,000,000,000 | $ 1,000,000,000 | |||||||||||
2014 Used Vehicle Floor Plan Facility [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Allocation of credit facility increase, percentage | 20.00% | ||||||||||||
7.0% Senior Subordinated Notes Due 2022 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Retained earnings | $ 0 | $ 0 | |||||||||||
Net income (loss) | $ 0 | ||||||||||||
Principal amount | $ 200,000,000 | ||||||||||||
Stated interest rate on debt agreement | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | ||||||||
Notes issued at a price of principal amount | 99.11% | ||||||||||||
Notes issued yield maturity, percentage | 7.125% | ||||||||||||
Notes maturity date | Jul. 15, 2022 | ||||||||||||
Interest payable description | semi-annually in arrears on January 15 and July 15 of each year | ||||||||||||
Notes redemption price percentage of the par value due to change of control | 101.00% | ||||||||||||
Debt instrument maximum allowed dividends per share | $ / shares | $ 0.10 | ||||||||||||
Restrictive covenants under 2011 credit facilities and 7 % notes with 5% notes | Specifically, the indenture governing Sonic’s 7.0% Notes limits Sonic’s ability to pay quarterly cash dividends on Sonic’s Class A and Class B common stock in excess of $0.10 per share. Sonic may only pay quarterly cash dividends on Sonic’s Class A and Class B common stock if Sonic complies with the terms of the indenture governing the 7.0% | ||||||||||||
Outstanding principal amount of the 7.0% notes | 25.00% | ||||||||||||
7.0% Senior Subordinated Notes Due 2022 [Member] | Minimum [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Indebtedness with outstanding balance under other agreements | $ 35,000,000 | ||||||||||||
5.0% Senior Subordinated Notes due 2023 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Retained earnings | $ 0 | 0 | |||||||||||
Net income (loss) | $ 0 | ||||||||||||
Principal amount | $ 300,000,000 | ||||||||||||
Stated interest rate on debt agreement | 5.00% | 5.00% | 5.00% | 5.00% | 5.00% | ||||||||
Notes issued at a price of principal amount | 100.00% | ||||||||||||
Notes maturity date | May 15, 2023 | ||||||||||||
Interest payable description | semi-annually in arrears on May 15 and November 15 of each year | ||||||||||||
Notes redemption price percentage of the par value due to change of control | 101.00% | ||||||||||||
Debt instrument maximum allowed dividends per share | $ / shares | $ 0.10 | ||||||||||||
Restrictive covenants under 2011 credit facilities and 7 % notes with 5% notes | Specifically, the indenture governing Sonic’s 5.0% Notes limits Sonic’s ability to pay quarterly cash dividends on Sonic’s Class A and Class B common stock in excess of $0.10 per share. Sonic may only pay quarterly cash dividends on Sonic’s Class A and Class B common stock if Sonic complies with the terms of the indenture governing the 5.0% Notes. | ||||||||||||
Outstanding principal amount of the 7.0% notes | 25.00% | ||||||||||||
Notes redeemed percentage of aggregate principal amount | 35.00% | ||||||||||||
Notes redemption price percentage of the par value | 105.00% | ||||||||||||
Notes redemption price percentage of the principal amount | 100.00% | ||||||||||||
5.0% Senior Subordinated Notes due 2023 [Member] | Minimum [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Indebtedness with outstanding balance under other agreements | $ 50,000,000 | ||||||||||||
5.0% Senior Subordinated Notes due 2023 [Member] | Common Class A [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Common stock, shares issued | shares | 4,100,000 | ||||||||||||
9.0% Senior Subordinated Notes due 2018 [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Stated interest rate on debt agreement | 9.00% | ||||||||||||
Convertible senior notes due | 2,018 |
Long-Term Debt - Redemption Pri
Long-Term Debt - Redemption Price, Percentage (Detail) | 12 Months Ended |
Dec. 31, 2015 | |
7.0% Senior Subordinated Notes Due 2022 [Member] | Beginning on July 15, 2017 [Member] | |
Debt Instrument Redemption [Line Items] | |
Redemption Price | 103.50% |
7.0% Senior Subordinated Notes Due 2022 [Member] | Beginning on July 15, 2018 [Member] | |
Debt Instrument Redemption [Line Items] | |
Redemption Price | 102.333% |
7.0% Senior Subordinated Notes Due 2022 [Member] | Beginning on July 15, 2019 [Member] | |
Debt Instrument Redemption [Line Items] | |
Redemption Price | 101.167% |
7.0% Senior Subordinated Notes Due 2022 [Member] | Beginning on July 15, 2020 and Thereafter [Member] | |
Debt Instrument Redemption [Line Items] | |
Redemption Price | 100.00% |
5.0% Senior Subordinated Notes due 2023 [Member] | Beginning on May 15, 2018 [Member] | |
Debt Instrument Redemption [Line Items] | |
Redemption Price | 102.50% |
5.0% Senior Subordinated Notes due 2023 [Member] | Beginning on May 15, 2019 [Member] | |
Debt Instrument Redemption [Line Items] | |
Redemption Price | 101.667% |
5.0% Senior Subordinated Notes due 2023 [Member] | Beginning on May 15, 2020 [Member] | |
Debt Instrument Redemption [Line Items] | |
Redemption Price | 100.833% |
5.0% Senior Subordinated Notes due 2023 [Member] | Beginning on May 15, 2021 and Thereafter [Member] | |
Debt Instrument Redemption [Line Items] | |
Redemption Price | 100.00% |
Long-Term Debt - Financial Cove
Long-Term Debt - Financial Covenants Include Required Specified Ratios (Detail) | Dec. 31, 2015 |
Line Of Credit Facility [Line Items] | |
Minimum consolidated liquidity ratio | 119.00% |
Minimum consolidated fixed charge coverage ratio | 178.00% |
Maximum consolidated total lease adjusted leverage ratio | 408.00% |
Required Ratio [Member] | |
Line Of Credit Facility [Line Items] | |
Minimum consolidated liquidity ratio | 105.00% |
Minimum consolidated fixed charge coverage ratio | 120.00% |
Maximum consolidated total lease adjusted leverage ratio | 550.00% |
Long-Term Debt - Summary of Int
Long-Term Debt - Summary of Interest Received and Paid under Term of Cash Flow Swap (Detail) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Derivatives, Fair Value [Line Items] | |
Receive Rate | one-month LIBOR |
Variable Interest Rate | 0.428% |
Cash Flow Swap [Member] | |
Derivatives, Fair Value [Line Items] | |
Notional Amount | $ 2,500,000 |
Pay Rate | 7.10% |
Receive Rate | one-month LIBOR + 1.50% |
Maturing Date | Jul. 10, 2017 |
Variable Interest Rate | 1.50% |
Cash Flow Swap 1 [Member] | |
Derivatives, Fair Value [Line Items] | |
Notional Amount | $ 8,000,000 |
Pay Rate | 4.655% |
Receive Rate | one-month LIBOR |
Maturing Date | Dec. 10, 2017 |
Cash Flow Swap 2 [Member] | |
Derivatives, Fair Value [Line Items] | |
Notional Amount | $ 7,000,000 |
Pay Rate | 6.86% |
Receive Rate | one-month LIBOR + 1.25% |
Maturing Date | Aug. 1, 2017 |
Variable Interest Rate | 1.25% |
Cash Flow Swap 3 [Member] | |
Derivatives, Fair Value [Line Items] | |
Notional Amount | $ 6,200,000 |
Pay Rate | 6.41% |
Receive Rate | one-month LIBOR + 1.25% |
Maturing Date | Sep. 12, 2017 |
Variable Interest Rate | 1.25% |
Cash Flow Swap 4 [Member] | |
Derivatives, Fair Value [Line Items] | |
Notional Amount | $ 100,000,000 |
Pay Rate | 2.065% |
Receive Rate | one-month LIBOR |
Maturing Date | Jun. 30, 2017 |
Cash Flow Swap 5 [Member] | |
Derivatives, Fair Value [Line Items] | |
Notional Amount | $ 100,000,000 |
Pay Rate | 2.015% |
Receive Rate | one-month LIBOR |
Maturing Date | Jun. 30, 2017 |
Cash Flow Swap 6 [Member] | |
Derivatives, Fair Value [Line Items] | |
Notional Amount | $ 200,000,000 |
Pay Rate | 0.788% |
Receive Rate | one-month LIBOR |
Maturing Date | Jul. 1, 2016 |
Cash Flow Swap 7 [Member] | |
Derivatives, Fair Value [Line Items] | |
Notional Amount | $ 50,000,000 |
Pay Rate | 1.32% |
Receive Rate | one-month LIBOR |
Maturing Date | Jul. 1, 2017 |
Cash Flow Swap 8 [Member] | |
Derivatives, Fair Value [Line Items] | |
Notional Amount | $ 250,000,000 |
Pay Rate | 1.887% |
Receive Rate | one-month LIBOR |
Maturing Date | Jun. 30, 2018 |
Cash Flow Swap 9 [Member] | |
Derivatives, Fair Value [Line Items] | |
Notional Amount | $ 25,000,000 |
Pay Rate | 2.08% |
Receive Rate | one-month LIBOR |
Maturing Date | Jul. 1, 2017 |
Cash Flow Swap 10 [Member] | |
Derivatives, Fair Value [Line Items] | |
Notional Amount | $ 100,000,000 |
Pay Rate | 1.56% |
Receive Rate | one-month LIBOR |
Maturing Date | Jul. 1, 2017 |
Cash Flow Swap 11 [Member] | |
Derivatives, Fair Value [Line Items] | |
Notional Amount | $ 125,000,000 |
Pay Rate | 1.303% |
Receive Rate | one-month LIBOR |
Maturing Date | Jul. 1, 2017 |
Cash Flow Swap 12 [Member] | |
Derivatives, Fair Value [Line Items] | |
Notional Amount | $ 125,000,000 |
Pay Rate | 1.90% |
Receive Rate | one-month LIBOR |
Maturing Date | Jul. 1, 2018 |
Cash Flow Swap 13 [Member] | |
Derivatives, Fair Value [Line Items] | |
Notional Amount | $ 50,000,000 |
Pay Rate | 2.32% |
Receive Rate | one-month LIBOR |
Maturing Date | Jul. 1, 2019 |
Cash Flow Swap 14 [Member] | |
Derivatives, Fair Value [Line Items] | |
Notional Amount | $ 200,000,000 |
Pay Rate | 2.313% |
Receive Rate | one-month LIBOR |
Maturing Date | Jul. 1, 2019 |
Long-Term Debt - Summary of I63
Long-Term Debt - Summary of Interest Received and Paid under Term of Cash Flow Swap (Parenthetical) (Detail) | 12 Months Ended |
Dec. 31, 2015 | |
Derivatives, Fair Value [Line Items] | |
One-month LIBOR rate | 0.428% |
Receive Rate | one-month LIBOR |
Cash Flow Swap 7 [Member] | |
Derivatives, Fair Value [Line Items] | |
Receive Rate | one-month LIBOR |
Swap agreement effective date | Jul. 1, 2016 |
Cash Flow Swap 9 [Member] | |
Derivatives, Fair Value [Line Items] | |
Receive Rate | one-month LIBOR |
Swap agreement effective date | Jul. 1, 2016 |
Cash Flow Swap 11 [Member] | |
Derivatives, Fair Value [Line Items] | |
Receive Rate | one-month LIBOR |
Swap agreement effective date | Jul. 1, 2016 |
Cash Flow Swap 8 [Member] | |
Derivatives, Fair Value [Line Items] | |
Receive Rate | one-month LIBOR |
Swap agreement effective date | Jul. 3, 2017 |
Cash Flow Swap 12 [Member] | |
Derivatives, Fair Value [Line Items] | |
Receive Rate | one-month LIBOR |
Swap agreement effective date | Jul. 1, 2017 |
Cash Flow Swap 13 [Member] | |
Derivatives, Fair Value [Line Items] | |
Receive Rate | one-month LIBOR |
Swap agreement effective date | Jul. 2, 2018 |
Cash Flow Swap 14 [Member] | |
Derivatives, Fair Value [Line Items] | |
Receive Rate | one-month LIBOR |
Swap agreement effective date | Jul. 2, 2018 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes for Continuing Operations - (Benefit) Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current: | |||
Federal | $ 36,241 | $ 36,874 | $ 33,367 |
State | 6,414 | 5,771 | 5,647 |
Total current | 42,655 | 42,645 | 39,014 |
Deferred | 14,410 | 20,523 | 5,329 |
Total provision for income taxes for continuing operations - (benefit) expense | $ 57,065 | $ 63,168 | $ 44,343 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the Statutory Federal Income Tax Rate with Federal and State Overall Effective Income Tax Rate from Continuing Operations (Detail) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Statutory federal income tax rate | 35.00% | 35.00% | 35.00% |
Effective state income tax rate | 3.26% | 3.15% | 3.22% |
Valuation allowance adjustments | (0.45%) | (0.14%) | 0.33% |
Uncertain tax positions | (0.14%) | (0.08%) | (1.76%) |
Other | 1.64% | 1.13% | (2.42%) |
Effective income tax rate | 39.31% | 39.06% | 34.37% |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Accruals and reserves | $ 33,397 | $ 36,633 |
State net operating loss carryforwards | 10,187 | 10,307 |
Fair value of interest rate swaps | 3,793 | 4,203 |
Interest and state taxes associated with the liability for uncertain income tax positions | 1,725 | 1,842 |
Other | 864 | 792 |
Total deferred tax assets | 49,966 | 53,777 |
Deferred tax liabilities: | ||
Basis difference in inventory | (1,530) | (1,597) |
Basis difference in property and equipment | (9,850) | (9,655) |
Basis difference in goodwill | (86,504) | (72,696) |
Other | (3,249) | (3,861) |
Total deferred tax liability | (101,133) | (87,809) |
Valuation allowance | (5,880) | (6,534) |
Net deferred tax asset (liability) | $ (57,047) | $ (40,566) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes [Line Items] | ||
Net short-term deferred tax asset | $ 13,600 | $ 13,200 |
Net long-term deferred tax asset | 2,800 | 3,800 |
Net short-term deferred tax liability | 100 | 0 |
Net long-term deferred tax liability | 73,322 | 57,601 |
Gross deferred tax assets related to state net operating loss carryforwards | 280,600 | |
Valuation allowance related to certain state net operating loss carryforward deferred tax assets | 5,900 | |
Liabilities recorded related to unrecognized tax benefits | 6,900 | |
Liabilities related to interest and penalties | 1,100 | 1,200 |
Unorganized tax benefit that would affect income tax rate if recognized | $ 2,600 | $ 2,800 |
State and Local Jurisdiction [Member] | ||
Income Taxes [Line Items] | ||
Operating loss expiration date | Net operating loss carryforwards that will expire between 2017 and 2035 | |
Operating loss expiration, beginning year | 2,017 | |
Operating loss expiration, ending year | 2,035 | |
State and Local Jurisdiction [Member] | Tax Year 2015 [Member] | ||
Income Taxes [Line Items] | ||
Income tax examination year | 2,015 | |
State and Local Jurisdiction [Member] | Tax Year 2006 [Member] | ||
Income Taxes [Line Items] | ||
Income tax examination year | 2,006 | |
U.S. Federal Income Tax Authority [Member] | Internal Revenue Service [Member] | Tax Year 2012 [Member] | ||
Income Taxes [Line Items] | ||
Income tax examination year | 2,012 | |
U.S. Federal Income Tax Authority [Member] | Internal Revenue Service [Member] | Tax Year 2015 [Member] | ||
Income Taxes [Line Items] | ||
Income tax examination year | 2,015 |
Income Taxes - Summary of Chang
Income Taxes - Summary of Changes in Liability Related to Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Unrecognized tax benefit liability, Beginning Balance | $ 5,740 | $ 6,693 | $ 9,097 |
Prior period positions: | |||
Increases | 175 | 181 | 409 |
Decreases | (66) | (233) | |
Increases from current period positions | 184 | 195 | 799 |
Settlements | (897) | (1,721) | |
Lapse of statute of limitations | (1,114) | (170) | (1,164) |
Other | (230) | (196) | (494) |
Unrecognized tax benefit liability, Ending Balance | $ 4,755 | $ 5,740 | $ 6,693 |
Income Taxes - Summary of Cha69
Income Taxes - Summary of Changes in Liability Related to Unrecognized Tax Benefits (Parenthetical) (Detail) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule Of Unrecognized Tax Benefits [Line Items] | ||||
Accrued interest and penalties | $ 1.1 | $ 1.2 | $ 1.1 | $ 2.4 |
State and Local Jurisdiction [Member] | ||||
Schedule Of Unrecognized Tax Benefits [Line Items] | ||||
Net operating losses | $ 0.6 | $ 0.8 | $ 1 |
Related Parties - Additional In
Related Parties - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
SFC [Member] | |||
Related Party Transaction [Line Items] | |||
Aggregate annual rent for leased aircraft usage | $ 0.6 | $ 0.5 | $ 0.9 |
Oil Chem Research Company [Member] | |||
Related Party Transaction [Line Items] | |||
Purchase from related party | 2.1 | 2.1 | 2 |
Speedway Motorsports, Inc. [Member] | |||
Related Party Transaction [Line Items] | |||
Aggregate annual rent for leased aircraft usage | $ 0.8 | $ 0.6 | $ 0.6 |
Minimum [Member] | Mr. Marcus G. Smith [Member] | SFC [Member] | |||
Related Party Transaction [Line Items] | |||
Ownership percentage | 10.00% |
Capital Structure and Per Sha71
Capital Structure and Per Share Data - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2015USD ($)ClassVote$ / sharesshares | Dec. 31, 2014$ / sharesshares | Dec. 31, 2013shares | |
Capital Structure And Per Share Data [Line Items] | |||
Preferred stock shares authorized | 3,000,000 | ||
Preferred stock, issued | 0 | 0 | |
Preferred stock, outstanding | 0 | 0 | |
Number of classes of common stock | Class | 2 | ||
Class A Convertible Preferred Stock [Member] | |||
Capital Structure And Per Share Data [Line Items] | |||
Preferred stock shares authorized | 300,000 | ||
Preferred Stock Par Value | $ / shares | $ 0.10 | ||
Class A convertible preferred stock shares redeemed | 13,801.5 | ||
Class A convertible preferred stock redemption price | $ / shares | $ 1,000 | ||
Series I Preferred Stock [Member] | |||
Capital Structure And Per Share Data [Line Items] | |||
Class A Convertible Preferred Stock Shares Authorized | 100,000 | ||
Series II Preferred Stock [Member] | |||
Capital Structure And Per Share Data [Line Items] | |||
Class A Convertible Preferred Stock Shares Authorized | 100,000 | ||
Series III Preferred Stock [Member] | |||
Capital Structure And Per Share Data [Line Items] | |||
Class A Convertible Preferred Stock Shares Authorized | 100,000 | ||
Common Class A [Member] | |||
Capital Structure And Per Share Data [Line Items] | |||
Common stock, shares authorized | 100,000,000 | 100,000,000 | |
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | |
Common stock, number of votes per share | Vote | 1 | ||
Number of shares of class A common stock issuable against each share of class B common stock | 1 | ||
Authorized amount expend on repurchase of shares | $ | $ 495,000,000 | ||
Common stock class A, shares repurchased | 24,675,443 | 23,156,433 | |
Common stock class A, share repurchase price per share | $ / shares | $ 17.68 | ||
Remaining authorized amount | $ | $ 45,000,000 | ||
Antidilutive stock options excluded in computation of diluted earnings per share | 400,000 | 400,000 | 800,000 |
Common Class B [Member] | |||
Capital Structure And Per Share Data [Line Items] | |||
Common stock, shares authorized | 30,000,000 | 30,000,000 | |
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | |
Common stock, number of votes per share | Vote | 10 |
Capital Structure and Per Sha72
Capital Structure and Per Share Data - Dilutive Effect on Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Earnings Per Share [Abstract] | |||||||||||
Weighted Average Shares, Basic | 50,489 | 52,065 | 52,556 | ||||||||
Weighted Average Shares, Stock compensation plans | 394 | 498 | 385 | ||||||||
Weighted Average Shares, Diluted | 50,883 | 52,563 | 52,941 | ||||||||
Income (Loss) From Continuing Operations, Amount | $ 88,091 | $ 98,559 | $ 84,678 | ||||||||
Income (Loss) From Continuing Operations, Basic, Amount | 88,055 | 98,248 | 84,077 | ||||||||
Income (Loss) From Continuing Operations Diluted, Amount | $ 88,055 | $ 98,248 | $ 84,077 | ||||||||
Income (Loss) From Continuing Operations, Basic, Per Share Amount | $ 1.74 | $ 1.89 | $ 1.60 | ||||||||
Income (Loss) From Continuing Operations, Diluted, Per Share Amount | $ 1.73 | $ 1.87 | $ 1.59 | ||||||||
Dilutive effect on earnings per share | $ (1,780) | $ (1,342) | $ (3,060) | ||||||||
Income (Loss) From Discontinued Operations, Basic earnings (loss), Amount | (1,780) | (1,342) | (3,060) | ||||||||
Income (Loss) From Discontinued Operations, Diluted earnings (loss), Amount | $ (1,780) | $ (1,342) | $ (3,060) | ||||||||
Income (Loss) From Discontinuing Operations, Basic earnings (loss), Per Share Amount | $ (0.03) | $ (0.03) | $ (0.06) | ||||||||
Income (Loss) From Discontinued Operations, Diluted earnings (loss), Per Share Amount | $ (0.03) | $ (0.03) | $ (0.06) | ||||||||
Net Income (Loss), Amount | $ 31,058 | $ 26,505 | $ 14,781 | $ 13,967 | $ 26,126 | $ 24,712 | $ 26,993 | $ 19,386 | $ 86,311 | $ 97,217 | $ 81,618 |
Participating securities income (loss) from continuing operations non-vested restricted stock and restricted stock units | (36) | (311) | (601) | ||||||||
Net Income (Loss), Basic, Amount | 86,275 | 96,906 | 81,017 | ||||||||
Net Income (Loss), Diluted, Amount | $ 86,275 | $ 96,906 | $ 81,017 | ||||||||
Net Income (Loss), Basic, Per Share Amount | $ 0.62 | $ 0.53 | $ 0.29 | $ 0.27 | $ 0.51 | $ 0.47 | $ 0.51 | $ 0.37 | $ 1.71 | $ 1.86 | $ 1.54 |
Net Income (Loss), Diluted, Per Share Amount | $ 0.62 | $ 0.52 | $ 0.29 | $ 0.27 | $ 0.50 | $ 0.47 | $ 0.51 | $ 0.36 | $ 1.70 | $ 1.84 | $ 1.53 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2015shares | Jun. 30, 2012shares | Dec. 31, 2015USD ($)PlansMembersEmployershares | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of active stock compensation plans | Plans | 3 | ||||
Additional terminated plans with outstanding grants | Plans | 1 | ||||
Restricted stock shares | 1,443,000 | ||||
Number of employers to make contribution under multi-employer plan | Employer | 200 | ||||
Pension Protection | 2,006 | 2,006 | 2,006 | ||
Number of employee increase / (decrease) under multi employer benefit percentage | 4.80% | 2.80% | |||
Total contributions of multi employer Plan | 5.00% | 5.00% | |||
Plans In Red Zone [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Multi-Employer Benefit AI Pension Plan | Less than 65 percent | ||||
Plans In Yellow Zone [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Multi-Employer Benefit AI Pension Plan | Between 65 and less than 80 percent | ||||
Plans In Green Zone [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Multi-Employer Benefit AI Pension Plan | At least 80 percent | ||||
Supplemental Employee Retirement Plans, Defined Benefit [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Members of senior management | Members | 12 | ||||
Stock Option [Member] | Selling, General and Administrative Expenses [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Compensation expense | $ | $ 0 | $ 0 | $ 0 | ||
Non-vested Restricted Stock Awards and Restricted Stock Units [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Tax benefits recognized related to the compensation expenses | $ | 3,700,000 | 2,900,000 | 2,700,000 | ||
Compensation expense not yet recognized | $ | 34,500,000 | ||||
Non-vested Restricted Stock Awards and Restricted Stock Units [Member] | Selling, General and Administrative Expenses [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Compensation expense | $ | $ 9,800,000 | 7,700,000 | 7,200,000 | ||
Non-vested restricted stock [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Total compensation cost related to non-vested options expected to be recognized over weighted average period | 9 years 8 months 12 days | ||||
401(k) plan [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Employer contribution | $ | $ 7,700,000 | $ 7,400,000 | $ 7,200,000 | ||
2012 Plan [Member] | Restricted Stock Units [Member] | Executive Officer and Other Key Associates [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Restricted stock shares | 1,400,000 | ||||
2012 Plan [Member] | Restricted Stock Units [Member] | Executive Officer [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock award vesting period | 15 years | ||||
Restricted stock shares | 1,000,000 | ||||
2012 Plan [Member] | Restricted Stock Units [Member] | Minimum [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock award vesting period | 2 years | ||||
2012 Plan [Member] | Restricted Stock Units [Member] | Maximum [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock award vesting period | 3 years | ||||
2012 Plan [Member] | Common Class A [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of shares authorized | 4,000,000 | 2,000,000 | |||
2012 Formula Plan [Member] | Restricted Stock [Member] | Director [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Restricted stock shares | 21,000 | ||||
2012 Formula Plan [Member] | Common Class A [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of shares authorized | 300,000 | ||||
2004 Stock Incentive Plan and 2012 Formula Plan [Member] | Common Class A [Member] | Stock Option [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock option expiration period | 10 years | ||||
2004 Stock Incentive Plan and 2012 Formula Plan [Member] | Common Class A [Member] | Stock Option [Member] | Minimum [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock award vesting period | 6 months | ||||
2004 Stock Incentive Plan and 2012 Formula Plan [Member] | Common Class A [Member] | Stock Option [Member] | Maximum [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock award vesting period | 3 years | ||||
2004 Stock Incentive Plan and 2012 Formula Plan [Member] | Common Class A [Member] | Non-vested Restricted Stock Awards and Restricted Stock Units [Member] | Minimum [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock award vesting period | 1 year | ||||
2004 Stock Incentive Plan and 2012 Formula Plan [Member] | Common Class A [Member] | Non-vested Restricted Stock Awards and Restricted Stock Units [Member] | Maximum [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock award vesting period | 3 years |
Employee Benefit Plans - Status
Employee Benefit Plans - Status of Options Related to Stock Plans (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Options Outstanding Beginning Balance | 1,064,000 | ||
Options Outstanding Exercised | (325,000) | ||
Options Outstanding Forfeited | (25,000) | ||
Options Outstanding Ending Balance | 714,000 | 1,064,000 | |
Options Outstanding Exercisable | 714,000 | ||
Weighted Average Exercise Price Per Share, Beginning Balance | $ 17.62 | ||
Weighted Average Exercise Price Per Share, Exercised | 17.18 | ||
Weighted Average Exercise Price Per Share, Forfeited | 24.83 | ||
Weighted Average Exercise Price Per Share, Ending Balance | 17.56 | $ 17.62 | |
Weighted Average Exercise Price Per Share, Exercisable | $ 17.56 | ||
Weighted Average Remaining Contractual Term | 1 year 7 months 6 days | 2 years 2 months 12 days | |
Weighted Average Remaining Contractual Term, Exercisable | 1 year 7 months 6 days | ||
Aggregate Intrinsic Value, Beginning Balance | $ 10,444 | ||
Aggregate Intrinsic Value, Ending Balance | 5,605 | $ 10,444 | |
Aggregate Intrinsic Value, Exercisable | 5,605 | ||
Intrinsic value of options exercised | $ 2,511 | $ 1,187 | $ 1,657 |
Minimum [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Exercise Price Per Share, Beginning Balance | $ 1.81 | ||
Exercise Price Per Share, Exercised | 1.81 | ||
Exercise Price Per Share, Forfeited | 19.23 | ||
Exercise Price Per Share, Ending Balance | 1.81 | $ 1.81 | |
Exercise Price Per Share, Exercisable | 1.81 | ||
Maximum [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Exercise Price Per Share, Beginning Balance | 25.05 | ||
Exercise Price Per Share, Exercised | 23.94 | ||
Exercise Price Per Share, Forfeited | 30.07 | ||
Exercise Price Per Share, Ending Balance | 30.07 | $ 25.05 | |
Exercise Price Per Share, Exercisable | $ 30.07 |
Employee Benefit Plans - Stat75
Employee Benefit Plans - Status of Non-Vested Restricted Stock and Restricted Stock Unit Grants Related to Stock Plans (Detail) shares in Thousands | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Compensation And Retirement Disclosure [Abstract] | |
Non-Vested Restricted Stock Awards and Restricted Stock Units, Beginning Balance | shares | 889 |
Non-Vested Restricted Stock Awards and Restricted Stock Units, Granted | shares | 1,443 |
Non-Vested Restricted Stock Awards and Restricted Stock Units, Forfeited | shares | (133) |
Non-Vested Restricted Stock Awards and Restricted Stock Units, Vested | shares | (368) |
Non-Vested Restricted Stock Awards and Restricted Stock Units, Ending Balance | shares | 1,831 |
Weighted Average Grant Date Fair Value per Share, Beginning Balance | $ / shares | $ 21.33 |
Weighted Average Grant Date Fair Value per Share, Granted | $ / shares | 23.74 |
Weighted Average Grant Date Fair Value per Share, Forfeited | $ / shares | 21.48 |
Weighted Average Grant Date Fair Value per Share, Vested | $ / shares | 20.80 |
Weighted Average Grant Date Fair Value per Share, Ending Balance | $ / shares | $ 23.33 |
Employee Benefit Plans - Stat76
Employee Benefit Plans - Status of Supplemental Executive Retirement Plan (Detail) - Supplemental Employee Retirement Plans, Defined Benefit [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Change in projected benefit obligation: | ||
Obligation at beginning of year | $ 7,976 | $ 5,263 |
Service cost | 1,950 | 1,467 |
Interest cost | 307 | 251 |
Actuarial loss (gain) | (737) | 1,174 |
Benefits paid | (262) | (179) |
Obligation at end of year | 9,234 | 7,976 |
Accumulated benefit obligation | 7,115 | 6,002 |
Change in fair value of plan assets: | ||
Employer contributions | 262 | 179 |
Benefits paid | (262) | (179) |
Funded status recognized | $ (9,234) | $ (7,976) |
Employee Benefit Plans - Stat77
Employee Benefit Plans - Status of Supplemental Executive Retirement Plan (Parenthetical) (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Defined Benefit Plan Disclosure [Line Items] | ||
Other long-term liabilities | $ 64,245 | $ 69,200 |
Other accrued liabilities | 218,507 | $ 208,654 |
Supplemental Employee Retirement Plans, Defined Benefit [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Other long-term liabilities | 8,900 | |
Other accrued liabilities | $ 300 |
Employee Benefit Plans - Cost C
Employee Benefit Plans - Cost Components of Supplemental Executive Retirement Plan (Detail) - Supplemental Employee Retirement Plans, Defined Benefit [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 1,950 | $ 1,467 |
Interest cost | 307 | 251 |
Net Pension expense (benefit) | $ 2,257 | $ 1,718 |
Employee Benefit Plans - Weight
Employee Benefit Plans - Weighted Average Assumptions Used to Determine Benefit Obligation and Net Periodic Benefit Costs (Detail) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Compensation And Retirement Disclosure [Abstract] | ||
Discount rate | 4.21% | 3.88% |
Rate of compensation increase | 3.00% | 3.00% |
Employee Benefit Plans - Estima
Employee Benefit Plans - Estimated Future Benefit Payments (Detail) $ in Thousands | Dec. 31, 2015USD ($) |
Compensation And Retirement Disclosure [Abstract] | |
2,016 | $ 270 |
2,017 | 265 |
2,018 | 265 |
2,019 | 265 |
2,020 | 364 |
2021 - 2025 | $ 1,820 |
Employee Benefit Plans - Schedu
Employee Benefit Plans - Schedule of Multi-Employer Pension Plans Affecting Period-to-Period Comparability of Contributions (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Compensation And Retirement Disclosure [Abstract] | |||
Pension Fund | AI Pension Plan | ||
EIN/Pension Plan Number | 941,133,245 | ||
Pension Protection Act Zone Status | Red | Red | |
FIP/RP Status | Implemented | ||
Sonic Contributions | $ 140 | $ 148 | $ 135 |
Surcharge Imposed | Yes | ||
Collective-Bargaining Agreement Expiration Date | Between August 31, 2014 and November 29, 2017 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets or Liabilities Recorded at Fair Value (Detail) - Significant Other Observable Inputs (Level 2) [Member] - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Assets: | ||
Cash surrender value of life insurance policies | $ 29,055 | $ 27,552 |
Cash flow swaps designated as hedges | 618 | |
Total assets | 29,055 | 28,170 |
Liabilities: | ||
Cash flow swaps designated as hedges | 9,094 | 10,251 |
Cash flow swaps not designated as hedges | 913 | 1,469 |
Deferred compensation plan | 13,551 | 15,863 |
Total liabilities | $ 23,558 | $ 27,583 |
Fair Value Measurements - Ass83
Fair Value Measurements - Assets or Liabilities Recorded at Fair Value (Parenthetical) (Detail) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Other Accrued Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Cash flow swaps designated as hedges | $ 4.6 | $ 7.5 |
Cash flow swaps not designated as hedges | 0.5 | 0.7 |
Other Long-Term Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Cash flow swaps designated as hedges | 4.5 | 2.8 |
Cash flow swaps not designated as hedges | $ 0.4 | $ 0.8 |
Fair Value Measurements - Ass84
Fair Value Measurements - Assets or Liabilities Measured at Fair Value on a Non-Recurring basis (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | |
Total Gain (loss) on goodwill | $ (2,445) |
Fair Value, Measurements, Nonrecurring [Member] | |
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | |
Long-lived assets held and used | 886,902 |
Goodwill | 471,493 |
Franchise assets | 74,900 |
Total Gain (loss) on long-lived assets held and used | (12,210) |
Total Gain (loss) on goodwill | (2,445) |
Total Gain (loss) on franchise assets | (3,300) |
Fair Value, Measurements, Nonrecurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | |
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | |
Long-lived assets held and used | 886,902 |
Goodwill | 471,493 |
Franchise assets | $ 74,900 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value and Carrying Value of Fixed Rate Long-Term Debt (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term Debt, Carrying Value | $ 814,582 | $ 758,530 |
7.0% Senior Subordinated Notes Due 2022 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term Debt, Fair Value | 211,000 | 216,000 |
Long-term Debt, Carrying Value | 198,708 | 198,556 |
5.0% Senior Subordinated Notes due 2023 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term Debt, Fair Value | 284,250 | 294,000 |
Long-term Debt, Carrying Value | 300,000 | 300,000 |
Mortgage Loan at Fix Interest Rate [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term Debt, Fair Value | 174,007 | 152,240 |
Long-term Debt, Carrying Value | 168,410 | 147,554 |
Assumed Notes [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term Debt, Fair Value | 818 | 4,365 |
Long-term Debt, Carrying Value | 823 | 4,474 |
Other [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term Debt, Fair Value | 4,374 | 4,588 |
Long-term Debt, Carrying Value | $ 4,634 | $ 4,884 |
Fair Value Measurements - Fai86
Fair Value Measurements - Fair Value and Carrying Value of Fixed Rate Long-Term Debt (Parenthetical) (Detail) | Dec. 31, 2015 | Dec. 31, 2014 | May. 09, 2013 | Jul. 02, 2012 |
7.0% Senior Subordinated Notes Due 2022 [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Stated interest rate on debt agreement | 7.00% | 7.00% | 7.00% | |
5.0% Senior Subordinated Notes due 2023 [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Stated interest rate on debt agreement | 5.00% | 5.00% | 5.00% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($)Option | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Contingencies And Commitments [Line Items] | |||
Lease exit expense | $ 1.8 | ||
Interest Expense | 1.4 | ||
Lease exit accrued cost | $ 0.4 | ||
Operating lease term for dealership facilities, minimum | 15 years | ||
Operating lease term for dealership facilities, maximum | 20 years | ||
Operating lease number of renewal options, minimum | Option | 1 | ||
Operating lease number of renewal options, maximum | Option | 2 | ||
Operating lease period of renewal options, minimum | 5 years | ||
Operating lease period of renewal options, maximum | 10 years | ||
Percentage of lease facility based on capitalization rates | 10.00% | ||
Lease expense for continuing operation | $ 98.2 | $ 106 | $ 99.6 |
Lease income (expense) for discontinuing operation | (1.4) | 0.9 | (1.1) |
Benefit related to lease exit accrual adjustment for extension of sublease | 1.4 | ||
Leases, net contingent rent benefit related to decrease in interest rates from continuing operation | 2 | 2 | 2.3 |
Leases net contingent rent benefit related to decrease in interest rates from discontinuing operation | 0.1 | 0.1 | $ 0.6 |
Obligations under subleases, if subleases do not perform | 74.7 | ||
Estimated minimum lease payment | 3.1 | ||
Maximum exposure associated with general indemnifications | $ 5.3 | ||
General indemnifications minimum expiration period | 1 year | ||
General indemnifications maximum expiration period | 3 years | ||
Contingent liability reserve balance after reduction | $ 2.8 | ||
Other Accrued Liabilities [Member] | |||
Contingencies And Commitments [Line Items] | |||
Amount reserved for pending proceedings | 0.3 | 2 | |
Other Long-Term Liabilities [Member] | |||
Contingencies And Commitments [Line Items] | |||
Amount reserved for pending proceedings | $ 0.2 | $ 0.3 | |
Dealership [Member] | |||
Contingencies And Commitments [Line Items] | |||
Joint venture ownership percentage | 50.00% |
Commitments and Contingencies88
Commitments and Contingencies - Summary of Lease Exit Accruals (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Commitments And Contingencies Disclosure [Abstract] | |
Beginning balance | $ 18,962 |
Lease exit expense | 1,848 |
Payments | (6,283) |
Ending balance | $ 14,527 |
Commitments and Contingencies89
Commitments and Contingencies - Summary of Lease Exit Accruals (Parenthetical) (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Commitments And Contingencies Disclosure [Abstract] | |
Component of lease exit expense in interest expense, other, net | $ 0.2 |
Component of lease exit expense in selling, general and administrative expenses | 0.1 |
Component of lease exit expense in income (loss) from operations and the sale of dealerships | 1.5 |
Component of lease exit payments in selling, general and administrative expenses | 0.7 |
Component of lease exit payments in income (loss) from operations and the sale of dealerships | $ 5.6 |
Commitments and Contingencies90
Commitments and Contingencies - Minimum Future Lease Payments for both Continuing and Discontinued Operations (Detail) $ in Thousands | Dec. 31, 2015USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2,016 | $ 94,119 |
2,017 | 78,948 |
2,018 | 68,719 |
2,019 | 55,404 |
2,020 | 32,155 |
Thereafter | 97,793 |
2,016 | (14,254) |
2,017 | (10,922) |
2,018 | (9,256) |
2,019 | (8,168) |
2,020 | (7,731) |
Thereafter | $ (24,395) |
Commitments and Contingencies91
Commitments and Contingencies - Financial Covenants Related to Amended Subordination and Guaranty Agreement (Detail) | Dec. 31, 2015 |
Subordination Agreement And Additional Financial Covenant [Line Items] | |
Minimum consolidated liquidity ratio | 119.00% |
Minimum consolidated fixed charge coverage ratio | 178.00% |
Maximum consolidated total lease adjusted leverage ratio | 408.00% |
Minimum EBTDAR to rent ratio | 381.00% |
Required Ratio [Member] | |
Subordination Agreement And Additional Financial Covenant [Line Items] | |
Minimum consolidated liquidity ratio | 105.00% |
Minimum consolidated fixed charge coverage ratio | 120.00% |
Maximum consolidated total lease adjusted leverage ratio | 550.00% |
Minimum EBTDAR to rent ratio | 150.00% |
Accumulated Other Comprehensi92
Accumulated Other Comprehensive Income (Loss) - Summary of Changes in Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance at December 31, 2014 | $ (6,424) | ||
Other comprehensive income (loss) before reclassifications | (4,222) | ||
Amounts reclassified out of accumulated other comprehensive income (loss) | 5,014 | ||
Other comprehensive income (loss) | 792 | $ 2,158 | $ 11,381 |
Balance at December 31, 2015 | (5,632) | (6,424) | |
Gains and Losses on Cash Flow Hedges [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance at December 31, 2014 | (5,973) | ||
Other comprehensive income (loss) before reclassifications | (4,679) | ||
Amounts reclassified out of accumulated other comprehensive income (loss) | 5,014 | ||
Other comprehensive income (loss) | 335 | ||
Balance at December 31, 2015 | (5,638) | (5,973) | |
Defined Benefit Pension Plan [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance at December 31, 2014 | (451) | ||
Other comprehensive income (loss) before reclassifications | 457 | ||
Other comprehensive income (loss) | 457 | ||
Balance at December 31, 2015 | $ 6 | $ (451) |
Accumulated Other Comprehensi93
Accumulated Other Comprehensive Income (Loss) - Summary of Changes in Accumulated Other Comprehensive Income (Loss) (Parenthetical) (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Equity [Abstract] | |
Other comprehensive income (loss) before reclassifications, tax benefit | $ 2,868 |
Tax expense (benefit) associated with change in pension actuarial loss | 280 |
Amounts reclassified out of accumulated other comprehensive income (loss), tax expense | $ 3,073 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2015Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment Information - Summary o
Segment Information - Summary of Reportable Operating Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Segment Reporting Information [Line Items] | ||||||||||||
Total consolidated revenues | $ 2,470,635 | $ 2,494,408 | $ 2,423,740 | $ 2,235,516 | $ 2,351,828 | $ 2,355,604 | $ 2,353,280 | $ 2,136,387 | $ 9,624,299 | $ 9,197,099 | $ 8,843,168 | |
Total segment income (loss) | 195,967 | 214,820 | 212,649 | |||||||||
Interest expense, other, net | (50,910) | (53,190) | (55,485) | |||||||||
Other income (expense), net | 99 | 97 | (28,143) | |||||||||
Income (loss) from continuing operations before taxes | 145,156 | 161,727 | 129,021 | |||||||||
Total floor plan interest expense | 21,326 | 18,793 | 21,954 | |||||||||
Total depreciation and amortization | 68,799 | 58,260 | 54,007 | |||||||||
Total capital expenditures | 173,249 | 146,432 | 157,617 | |||||||||
Total assets | 3,562,381 | 3,168,253 | 3,562,381 | 3,168,253 | ||||||||
Cash and cash equivalents | 3,625 | 4,182 | 3,625 | 4,182 | 3,016 | $ 3,371 | ||||||
Goodwill, Net | 471,493 | 475,929 | 471,493 | 475,929 | 476,315 | |||||||
Other Intangible Assets, net | 80,876 | 83,720 | 80,876 | 83,720 | ||||||||
Other Corporate and other assets | 718,347 | 720,357 | 718,347 | 720,357 | ||||||||
Franchised Dealerships [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Total consolidated revenues | 9,547,236 | 9,191,661 | 8,843,168 | |||||||||
Total segment income (loss) | 213,224 | 230,733 | 218,139 | |||||||||
Total floor plan interest expense | 20,727 | 18,727 | 21,954 | |||||||||
Total depreciation and amortization | 65,766 | 58,001 | 54,007 | |||||||||
Total capital expenditures | 148,593 | 117,129 | 151,947 | |||||||||
Total assets | 2,211,232 | 1,841,950 | 2,211,232 | 1,841,950 | ||||||||
Echo Park [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Total consolidated revenues | 77,063 | 5,438 | ||||||||||
Total segment income (loss) | (17,257) | (15,913) | (5,490) | |||||||||
Total floor plan interest expense | 599 | 66 | ||||||||||
Total depreciation and amortization | 3,033 | 259 | ||||||||||
Total capital expenditures | 24,656 | 29,303 | $ 5,670 | |||||||||
Total assets | $ 76,808 | $ 42,115 | $ 76,808 | $ 42,115 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Millions | Jan. 01, 2016 | Feb. 26, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Subsequent Event [Line Items] | |||||
Stock repurchased, value | $ 34,483,000 | $ 53,046,000 | $ 17,067,000 | ||
Dividends declared per common share | $ 0.11 | $ 0.10 | $ 0.10 | ||
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Dividends declared per common share | $ 0.05 | ||||
Dividends payable, date of record | Mar. 15, 2016 | ||||
Dividends payable date | Apr. 15, 2016 | ||||
Common Class A [Member] | |||||
Subsequent Event [Line Items] | |||||
Remaining repurchase authorization amount | $ 45,000,000 | ||||
Common Class A [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Additional authorized amount on repurchase of shares | $ 100,000,000 | ||||
Remaining repurchase authorization amount | $ 145,000,000 | $ 73,000,000 | |||
Stock repurchased, shares | 4 | ||||
Stock repurchased, value | $ 72,000,000 |
Summary of Quarterly Financia97
Summary of Quarterly Financial Data (Unaudited) - Consolidated Statements of Income by Quarter (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenues | $ 2,470,635 | $ 2,494,408 | $ 2,423,740 | $ 2,235,516 | $ 2,351,828 | $ 2,355,604 | $ 2,353,280 | $ 2,136,387 | $ 9,624,299 | $ 9,197,099 | $ 8,843,168 |
Gross profit | 363,848 | 360,251 | 355,554 | 334,959 | 348,464 | 341,489 | 346,947 | 329,000 | 1,414,612 | 1,365,900 | 1,301,607 |
Net income (loss) | $ 31,058 | $ 26,505 | $ 14,781 | $ 13,967 | $ 26,126 | $ 24,712 | $ 26,993 | $ 19,386 | $ 86,311 | $ 97,217 | $ 81,618 |
Earnings (loss) per common share - Basic | $ 0.62 | $ 0.53 | $ 0.29 | $ 0.27 | $ 0.51 | $ 0.47 | $ 0.51 | $ 0.37 | $ 1.71 | $ 1.86 | $ 1.54 |
Earnings (loss) per common share - Diluted | $ 0.62 | $ 0.52 | $ 0.29 | $ 0.27 | $ 0.50 | $ 0.47 | $ 0.51 | $ 0.36 | $ 1.70 | $ 1.84 | $ 1.53 |
Summary of Quarterly Financia98
Summary of Quarterly Financial Data (Unaudited) - Additional Information (Detail) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($)Franchise | Dec. 31, 2015USD ($)Dealerships | Dec. 31, 2014USD ($)Dealerships | Dec. 31, 2013USD ($)Dealerships | |
Condensed Unaudited Quarterly Financial Data [Line Items] | |||||||||
Pre-tax gain (loss) on disposal | $ 2,748 | $ 11,079 | |||||||
Asset impairment charges | $ 1,300 | $ 10,500 | $ 6,200 | $ 6,400 | $ 200 | $ 17,955 | $ 6,594 | $ 9,872 | |
Pre-tax charges against to natural damages | 4,200 | 1,000 | 2,000 | $ 1,000 | |||||
Pre-tax severance expenses | $ 900 | ||||||||
Number of franchises disposed | 2 | 4 | 9 | 0 | |||||
Pre-tax charges against legal settlement reserve accrual | $ 300 | ||||||||
Franchised Dealerships [Member] | |||||||||
Condensed Unaudited Quarterly Financial Data [Line Items] | |||||||||
Pre-tax gain (loss) on disposal | $ 2,300 | $ 1,100 | $ 3,200 | $ 7,300 | |||||
Tax expenses | $ 900 |