Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 19, 2016 | |
Document and Entity Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | SAH | |
Entity Registrant Name | SONIC AUTOMOTIVE INC | |
Entity Central Index Key | 1,043,509 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Common Class A [Member] | ||
Document and Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 33,789,022 | |
Common Class B [Member] | ||
Document and Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 12,029,375 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenues: | ||
New vehicles | $ 1,164,570 | $ 1,202,323 |
Used vehicles | 598,355 | 593,742 |
Wholesale vehicles | 44,374 | 41,656 |
Total vehicles | 1,807,299 | 1,837,721 |
Parts, service and collision repair | 346,054 | 323,194 |
Finance, insurance and other, net | 81,273 | 74,600 |
Total revenues | 2,234,626 | 2,235,515 |
Cost of Sales: | ||
New vehicles | (1,106,146) | (1,138,973) |
Used vehicles | (557,824) | (552,898) |
Wholesale vehicles | (45,452) | (41,866) |
Total vehicles | (1,709,422) | (1,733,737) |
Parts, service and collision repair | (180,054) | (166,819) |
Total cost of sales | (1,889,476) | (1,900,556) |
Gross profit | 345,150 | 334,959 |
Selling, general and administrative expenses | (284,375) | (270,862) |
Impairment charges | (6,192) | |
Depreciation and amortization | (18,470) | (16,409) |
Operating income (loss) | 42,305 | 41,496 |
Other income (expense): | ||
Interest expense, floor plan | (6,436) | (4,778) |
Interest expense, other, net | (12,339) | (13,219) |
Other income (expense), net | 104 | 90 |
Total other income (expense) | (18,671) | (17,907) |
Income (loss) from continuing operations before taxes | 23,634 | 23,589 |
Provision for income taxes for continuing operations - benefit (expense) | (9,170) | (9,200) |
Income (loss) from continuing operations | 14,464 | 14,389 |
Discontinued operations: | ||
Income (loss) from discontinued operations before taxes | 261 | (691) |
Provision for income taxes for discontinued operations - benefit (expense) | (101) | 269 |
Income (loss) from discontinued operations | 160 | (422) |
Net income (loss) | $ 14,624 | $ 13,967 |
Basic earnings (loss) per common share: | ||
Earnings (loss) per share from continuing operations | $ 0.31 | $ 0.28 |
Earnings (loss) per share from discontinued operations | (0.01) | |
Earnings (loss) per common share | $ 0.31 | $ 0.27 |
Weighted average common shares outstanding | 46,950 | 50,854 |
Diluted earnings (loss) per common share: | ||
Earnings (loss) per share from continuing operations | $ 0.31 | $ 0.28 |
Earnings (loss) per share from discontinued operations | (0.01) | |
Earnings (loss) per common share | $ 0.31 | $ 0.27 |
Weighted average common shares outstanding | 47,122 | 51,403 |
Dividends declared per common share | $ 0.05 | $ 0.025 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net income (loss) | $ 14,624 | $ 13,967 |
Other comprehensive income (loss) before taxes: | ||
Change in fair value of interest rate swap agreements | (4,878) | (1,489) |
Provision for income tax benefit (expense) related to components of other comprehensive income (loss) | 1,853 | 566 |
Other comprehensive income (loss) | (3,025) | (923) |
Comprehensive income (loss) | $ 11,599 | $ 13,044 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash and cash equivalents | $ 2,390 | $ 3,625 |
Receivables, net | 278,099 | 378,520 |
Inventories | 1,593,732 | 1,599,581 |
Other current assets | 57,237 | 101,386 |
Total current assets | 1,931,458 | 2,083,112 |
Property and Equipment, net | 908,176 | 886,902 |
Goodwill | 471,493 | 471,493 |
Other Intangible Assets, net | 80,715 | 80,876 |
Other Assets | 39,529 | 39,998 |
Total Assets | 3,431,371 | 3,562,381 |
Current Liabilities: | ||
Notes payable - floor plan - trade | 811,411 | 893,466 |
Notes payable - floor plan - non-trade | 608,927 | 625,367 |
Trade accounts payable | 138,511 | 131,204 |
Accrued interest | 13,154 | 12,640 |
Other accrued liabilities | 205,471 | 218,507 |
Current maturities of long-term debt | 26,679 | 33,437 |
Total current liabilities | 1,804,153 | 1,914,621 |
Long-Term Debt | 817,065 | 781,145 |
Other Long-Term Liabilities | 66,941 | 64,245 |
Deferred Income Taxes | $ 76,755 | $ 73,322 |
Commitments and Contingencies | ||
Stockholders’ Equity: | ||
Class A convertible preferred stock, none issued | ||
Paid-in capital | $ 715,634 | $ 713,118 |
Retained earnings | 469,340 | 457,010 |
Accumulated other comprehensive income (loss) | (8,657) | (5,632) |
Treasury stock, at cost; 28,777,881 Class A common stock shares held at March 31, 2016 and 24,675,443 Class A common stock shares held at December 31, 2015 | (510,610) | (436,195) |
Total Stockholders’ Equity | 666,457 | 729,048 |
Total Liabilities and Stockholders’ Equity | 3,431,371 | 3,562,381 |
Common Class A [Member] | ||
Stockholders’ Equity: | ||
Common stock, value | 629 | 626 |
Common Class B [Member] | ||
Stockholders’ Equity: | ||
Common stock, value | $ 121 | $ 121 |
CONDENSED CONSOLIDATED BALANCE5
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
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 | 62,925,921 | 62,586,381 |
Common stock, shares outstanding | 34,148,040 | 37,910,938 |
Treasury stock, shares | 28,777,881 | 24,675,443 |
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 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited) - 3 months ended Mar. 31, 2016 - 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, 2015 | $ 729,048 | $ 713,118 | $ 457,010 | $ (5,632) | $ 626 | $ (436,195) | $ 121 |
Beginning Balance, Shares at Dec. 31, 2015 | 62,586 | (24,675) | 12,029 | ||||
Shares awarded under stock compensation plans | 1 | (2) | $ 3 | ||||
Shares awarded under stock compensation plans, shares | 340 | ||||||
Purchases of treasury stock | (74,415) | $ (74,415) | |||||
Purchases of treasury stock, shares | (4,103) | ||||||
Income tax expense associated with stock compensation plans | (377) | (377) | |||||
Change in fair value of interest rate swap agreements, net of tax benefit of $1,853 | (3,025) | (3,025) | |||||
Restricted stock amortization | 2,895 | 2,895 | |||||
Net income (loss) | 14,624 | 14,624 | |||||
Dividends declared ($0.05 per share) | (2,294) | (2,294) | |||||
Ending Balance at Mar. 31, 2016 | $ 666,457 | $ 715,634 | $ 469,340 | $ (8,657) | $ 629 | $ (510,610) | $ 121 |
Ending Balance, Shares at Mar. 31, 2016 | 62,926 | (28,778) | 12,029 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited) (Parenthetical) $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($)$ / shares | |
Tax effect on fair value of interest rate swap agreements | $ | $ 1,853 |
Dividends declared per common share | $ / shares | $ 0.05 |
Accumulated Other Comprehensive Income (Loss) [Member] | |
Tax effect on fair value of interest rate swap agreements | $ | $ 1,853 |
Retained Earnings [Member] | |
Dividends declared per common share | $ / shares | $ 0.05 |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ 14,624 | $ 13,967 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization of property, plant and equipment | 18,468 | 16,408 |
Provision for bad debt expense | 141 | (2) |
Other amortization | 162 | 162 |
Debt issuance cost amortization | 622 | 483 |
Debt discount amortization, net of premium amortization | 73 | 36 |
Stock-based compensation expense | 2,895 | 2,392 |
Deferred income taxes | 4,141 | 4,063 |
Equity interest in earnings of investee | (189) | (32) |
Asset impairment charges | 6,192 | |
Loss (gain) on disposal of dealerships and property and equipment | (148) | (95) |
Loss (gain) on exit of leased dealerships | (409) | 503 |
Changes in assets and liabilities that relate to operations: | ||
Receivables | 101,436 | 56,920 |
Inventories | 5,849 | 31,675 |
Other assets | 44,433 | (5,089) |
Notes payable - floor plan - trade | (82,055) | (62,041) |
Trade accounts payable and other liabilities | (6,403) | (21,486) |
Total adjustments | 89,016 | 30,089 |
Net cash provided by (used in) operating activities | 103,640 | 44,056 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of land, property and equipment | (41,382) | (46,767) |
Proceeds from sales of property and equipment | 769 | 635 |
Distributions from equity investee | 375 | |
Net cash provided by (used in) investing activities | (40,238) | (46,132) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net (repayments) borrowings on notes payable - floor plan - non-trade | (16,440) | (9,199) |
Borrowings on revolving credit facilities | 76,777 | 120,534 |
Repayments on revolving credit facilities | (77,290) | (120,534) |
Proceeds from issuance of long-term debt | 33,755 | 25,618 |
Debt issuance costs | (152) | |
Principal payments on long-term debt | (4,623) | (4,446) |
Purchases of treasury stock | (74,415) | (11,123) |
Income tax benefit (expense) associated with stock compensation plans | (377) | 394 |
Issuance of shares under stock compensation plans | 1 | 1,881 |
Dividends paid | (1,873) | (1,273) |
Net cash provided by (used in) financing activities | (64,637) | 1,852 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (1,235) | (224) |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 3,625 | 4,182 |
CASH AND CASH EQUIVALENTS, END OF YEAR | 2,390 | 3,958 |
SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES: | ||
Change in fair value of cash flow interest rate swap agreements (net of tax benefit of $1,853 and $566 in the months ended March 31, 2016 and 2015, respectively) | (3,025) | (923) |
Cash paid (received) during the period for: | ||
Interest, including amount capitalized | 18,219 | 17,482 |
Income taxes | $ 375 | $ (667) |
CONDENSED CONSOLIDATED STATEME9
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement Of Cash Flows [Abstract] | ||
Tax effect on fair value of interest rate swap agreements | $ 1,853 | $ 566 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Basis of Presentation – The accompanying condensed consolidated financial statements of Sonic Automotive, Inc. and its wholly-owned subsidiaries (“Sonic,” the “Company,” “we,” “us” and “our”) for the three months ended March 31, 2016 and 2015, are unaudited and have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements reflect, in the opinion of management, all material normal recurring adjustments necessary to fairly state the financial position, results of operations and cash flows for the periods presented. The operating results for interim periods are not necessarily indicative of the results to be expected for the entire fiscal year or future interim periods, because the first quarter normally contributes less operating profit than the second, third and fourth quarters. These interim financial statements should be read in conjunction with the audited consolidated financial statements included in Sonic’s Annual Report on Form 10-K for the year ended December 31, 2015. Recent Accounting Pronouncements – In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02 to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments in this ASU require that leases are classified as either finance or operating leases, a right-of-use asset and lease liability is recognized in the statement of financial position, and repayments are classified within operating activities in the statement of cash flows. For public companies, this ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018 (early adoption is permitted). Upon adoption of this ASU, the presentation of certain items in Sonic’s consolidated financial position, cash flows and other disclosures will be impacted. In March 2016, the FASB issued ASU 2016-09 to simplify several aspects of the accounting for share-based payment transactions. For public companies, this ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 (early adoption is permitted). Upon adoption of this ASU, the presentation of certain items in Sonic’s consolidated financial position, results of operations, cash flows and other disclosures will be impacted. Principles of Consolidation – All of Sonic’s subsidiaries are wholly-owned and consolidated in the accompanying condensed consolidated financial statements, except for one 50% - owned dealership that is accounted for under the equity method. All material intercompany balances and transactions have been eliminated in the accompanying condensed consolidated financial statements. Lease Exit Accruals – Lease exit accruals relate to facilities Sonic has ceased using in its operations that remain subject to a current lease agreement. The accruals represent the present value of the lease payments, net of estimated or actual sublease proceeds, 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 Sonic or the manufacturer and no other operations continue on the leased property. See Note 12, “Commitments and Contingencies,” to the consolidated financial statements in Sonic’s Annual Report on Form 10-K for the year ended December 31, 2015 for further discussion. A summary of the activity of these operating lease exit accruals consists of the following: (In thousands) Balance at December 31, 2015 $ 14,527 Lease exit expense (1) (409 ) Payments (2) (1,581 ) Balance at March 31, 2016 $ 12,537 (1) Income of approximately $0.5 million is recorded in income (loss) from discontinued operations before taxes, offset partially by expense of approximately $0.1 million recorded in selling, general and administrative expenses in the accompanying condensed consolidated statements of income. (2) Amount is recorded as an offset to rent expense, with approximately $0.2 million recorded in selling, general and administrative expenses and approximately $1.4 million recorded in income (loss) from discontinued operations before taxes, in the accompanying condensed consolidated statements of income. Income Tax Expense – The overall effective tax rate from continuing operations was 38.8% and 39.0% for the three months ended March 31, 2016 and 2015, respectively. Sonic’s effective tax rate varies from year to year based on the distribution of taxable income between states in which Sonic operates and other tax adjustments. Sonic expects the effective tax rate in future periods to fall within a range of 38.0% to 40.0% before the impact, if any, of changes in valuation allowances related to deferred income tax assets or unusual discrete tax adjustments. |
Business Acquisitions and Dispo
Business Acquisitions and Dispositions | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Business Acquisitions and Dispositions | 2. Business Acquisitions and Dispositions Acquisitions – Sonic did not acquire any franchises during the three months ended March 31, 2016 and 2015. Dispositions – Revenues and other activities associated with dealerships classified as discontinued operations were as follows: Three Months Ended March 31, 2016 2015 (In thousands) Income (loss) from operations $ (194 ) $ (335 ) Lease exit accrual adjustments and charges 455 (356 ) Pre-tax income (loss) $ 261 $ (691 ) Total revenues $ - $ - Sonic did not dispose of any franchises during the three months ended March 31, 2016 and 2015. Revenues and other activities associated with disposed dealerships that remain in continuing operations were as follows: Three Months Ended March 31, 2016 2015 (In thousands) Income (loss) from operations $ (31 ) $ (945 ) Gain (loss) on disposal (48 ) (102 ) Pre-tax income (loss) $ (79 ) $ (1,047 ) Total revenues $ 14 $ 28,619 |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | 3. Inventories Inventories consist of the following: March 31, 2016 December 31, 2015 (In thousands) New vehicles $ 1,133,845 $ 1,161,490 Used vehicles 270,336 251,103 Service loaners 126,503 121,946 Parts, accessories and other 63,048 65,042 Net inventories $ 1,593,732 $ 1,599,581 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2016 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | 4. Property and Equipment Property and equipment, net consists of the following: March 31, 2016 December 31, 2015 (In thousands) Land $ 264,904 $ 260,275 Building and improvements 692,545 679,712 Software and computer equipment 111,763 107,086 Parts and service equipment 81,108 79,219 Office equipment and fixtures 80,020 76,810 Company vehicles 8,916 8,478 Construction in progress 66,601 55,010 Total, at cost 1,305,857 1,266,590 Less accumulated depreciation (397,681 ) (379,688 ) Property and equipment, net $ 908,176 $ 886,902 In the three months ended March 31, 2016 and 2015, capital expenditures were approximately $41.4 million and $46.8 million, respectively. Capital expenditures for the three months ended March 31, 2016 and 2015 were primarily related to real estate acquisitions, construction of new dealerships and EchoPark ® ® |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 5. Goodwill and Intangible Assets The carrying amount of franchise assets and goodwill was approximately $74.9 million and $471.5 million, respectively, as of March 31, 2016 and December 31, 2015. The carrying amount of goodwill is net of accumulated impairment losses of approximately $796.7 million as of March 31, 2016 and December 31, 2015. At December 31, 2015, Sonic had approximately $6.0 million of definite life intangibles related to favorable lease agreements. After the effect of amortization of the definite life intangibles, the balance recorded at March 31, 2016 was approximately $5.8 million and is included in other intangible assets, net in the accompanying condensed consolidated balance sheets. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 6. Long-Term Debt Long-term debt consists of the following: March 31, 2016 December 31, 2015 (In thousands) 2014 Revolving Credit Facility (1) $ 3,690 $ 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 Mortgage notes to finance companies-fixed rate, bearing interest from 3.51% to 7.03% 183,885 168,410 Mortgage notes to finance companies-variable rate, bearing interest at 1.25 to 2.80 percentage points above one-month or three-month LIBOR 165,014 150,961 Net debt discount and premium (2) (1,489 ) (1,562 ) Debt issuance costs (12,414 ) (12,884 ) Other 5,058 5,454 Total debt $ 843,744 $ 814,582 Less current maturities (26,679 ) (33,437 ) Long-term debt $ 817,065 $ 781,145 (1) The interest on the 2014 Revolving Credit Facility was 2.25% above LIBOR at March 31, 2016 and December 31, 2015. (2) March 31, 2016 includes a $1.3 million discount associated with the 7.0% Notes and a $0.2 million discount associated with mortgage notes payable. December 31, 2015 includes a $1.3 million discount associated with the 7.0% Notes and a $0.3 million discount associated with mortgage notes payable. 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 “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 March 31, 2016, the Revolving Borrowing Base was approximately $185.0 million. As of March 31, 2016, Sonic had approximately $3.7 million of outstanding borrowings and approximately $21.7 million in outstanding letters of credit under the 2014 Revolving Credit Facility, resulting in total borrowing availability of approximately $159.6 million under the 2014 Revolving Credit Facility. See Note 6, “Long-Term Debt,” to the consolidated financial statements in Sonic’s Annual Report on Form 10-K for the year ended December 31, 2015 for further discussion. 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%. Interest on the 7.0% Notes is payable semi-annually in arrears on January 15 and July 15 of each year. See Note 6, “Long-Term Debt,” to the consolidated financial statements in Sonic’s Annual Report on Form 10-K for the year ended December 31, 2015 for further discussion. 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. Interest on the 5.0% Notes is payable semi-annually in arrears on May 15 and November 15 of each year. See Note 6, “Long-Term Debt,” to the consolidated financial statements in Sonic’s Annual Report on Form 10-K for the year ended December 31, 2015 for further discussion. Mortgage Notes During the three months ended March 31, 2016, Sonic obtained approximately $33.7 million in mortgage financing related to four of its dealership properties. As of March 31, 2016, the weighted average interest rate was 3.74% and the total outstanding principal balance was approximately $348.9 million, related to approximately 40% of Sonic’s operating locations. These mortgage notes require monthly payments of principal and interest through their respective maturities and are secured by the underlying properties. Maturity dates for these mortgage notes range between 2016 and 2033. Covenants Sonic was in compliance with the covenants under the 2014 Credit Facilities as of March 31, 2016. 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 March 31, 2016 actual 1.16 1.75 4.21 The 2014 Credit Facilities contain events of default, including cross defaults to other material indebtedness, change of control events and other events of default customary for syndicated commercial credit facilities. Upon the future occurrence of an event of default, 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 under the guarantee agreement 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 March 31, 2016, the ratio was 3.76 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 March 31, 2016 was a liability of approximately $14.8 million, with $5.9 million included in other accrued liabilities and $8.9 million included in other long-term liabilities in the accompanying condensed consolidated balance sheets. The fair value of these swap positions at December 31, 2015 was a 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 condensed 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 $ 7.8 4.655% one-month LIBOR December 10, 2017 $ 6.9 (2) 6.860% one-month LIBOR + 1.25% August 1, 2017 $ 6.1 (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 0.437% at March 31, 2016. (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. 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 condensed consolidated statements of comprehensive income and are disclosed in the supplemental schedule of non-cash financing activities in the accompanying condensed 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 $1.3 million and $2.3 million for the three months ended March 31, 2016 and 2015, respectively, and is included in interest expense, other, net in the accompanying condensed consolidated statements of income and the interest paid amount disclosed in the supplemental disclosures of cash flow information in the accompanying condensed 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 $3.6 million. |
Per Share Data and Stockholders
Per Share Data and Stockholders' Equity | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Per Share Data and Stockholders' Equity | 7. Per Share Data and Stockholders’ Equity The calculation of diluted earnings per share considers the potential dilutive effect of options and shares under Sonic’s stock compensation plans. Certain of Sonic’s non-vested restricted stock awards 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 three months ended March 31, 2016 and 2015: Three Months Ended March 31, 2016 Income (Loss) Income (Loss) From Continuing From Discontinued Net Operations Operations 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 46,950 $ 14,464 $ 160 $ 14,624 Effect of participating securities: Non-vested restricted stock and restricted stock units (6 ) - (6 ) Basic earnings (loss) and shares 46,950 $ 14,458 $ 0.31 $ 160 $ - $ 14,618 $ 0.31 Effect of dilutive securities: Stock compensation plans 172 Diluted earnings (loss) and shares 47,122 $ 14,458 $ 0.31 $ 160 $ - $ 14,618 $ 0.31 Three Months Ended March 31, 2015 Income (Loss) Income (Loss) From Continuing From Discontinued Net Operations Operations 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 50,854 $ 14,389 $ (422 ) $ 13,967 Effect of participating securities: Non-vested restricted stock and restricted stock units (5 ) - (5 ) Basic earnings (loss) and shares 50,854 $ 14,384 $ 0.28 $ (422 ) $ (0.01 ) $ 13,962 $ 0.27 Effect of dilutive securities: Stock compensation plans 549 Diluted earnings (loss) and shares 51,403 $ 14,384 $ 0.28 $ (422 ) $ (0.01 ) $ 13,962 $ 0.27 In addition to the stock options included in the tables above, options to purchase approximately 0.4 million shares of Sonic’s Class A common stock were outstanding at March 31, 2016 and 2015, but were not included in the computation of diluted earnings per share because the options were not dilutive. |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Contingencies | 8. Contingencies Legal and Other Proceedings 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. At both March 31, 2016 and December 31, 2015, approximately $0.3 million and $0.2 million was included in other accrued liabilities and other long-term liabilities in the accompanying condensed consolidated balance sheets, respectively, in reserves that Sonic was holding for pending proceedings. Except as reflected in such reserves, Sonic is currently unable to estimate a range of reasonably possible loss, or a range of reasonably possible loss in excess of the amount accrued, for pending proceedings. Guarantees and Indemnification Obligations 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, certain of Sonic’s dealership 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. In the event the assignees or sub-lessees do not perform their obligations under such leases, Sonic remains liable for the lease payments. See Note 12, “Commitments and Contingencies,” to the consolidated financial statements in Sonic’s Annual Report on Form 10-K for the year ended December 31, 2015 for further discussion. 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 $3.5 million and $5.3 million at March 31, 2016 and December 31, 2015, respectively. 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 March 31, 2016. Sonic also guarantees the floor plan commitments of its 50%-owned joint venture, the amount of which was approximately $2.8 million at both March 31, 2016 and December 31, 2015. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 9. 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 Accounting Standards Codification (“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 and liabilities recorded at fair value in the accompanying condensed consolidated balance sheets as of March 31, 2016 and December 31, 2015 are as follows: Fair Value Based on Significant Other Observable Inputs (Level 2) March 31, 2016 December 31, 2015 (In thousands) Assets: Cash surrender value of life insurance policies (1) $ 28,637 $ 29,055 Total assets $ 28,637 $ 29,055 Liabilities: Cash flow swaps designated as hedges (2) $ 13,972 $ 9,094 Cash flow swaps not designated as hedges (3) 814 913 Deferred compensation plan (4) 13,308 13,551 Total liabilities $ 28,094 $ 23,558 (1) Included in other assets in the accompanying condensed consolidated balance sheets. (2) As of March 31, 2016, approximately $5.3 million and $8.7 million were included in other accrued liabilities and other long-term liabilities, respectively, in the accompanying condensed consolidated balance sheets. 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 condensed consolidated balance sheets. (3) As of March 31, 2016, approximately $0.6 million and $0.2 million were included in other accrued liabilities and other long-term liabilities, respectively, in the accompanying condensed consolidated balance sheets. 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 condensed consolidated balance sheets. (4) Included in other long-term liabilities in the accompanying condensed consolidated balance sheets. There were no instances in the three months ended March 31, 2016 which required a fair value measurement of assets ordinarily measured at fair value on a non-recurring basis. Therefore, the carrying value of assets measured at fair value on a non-recurring basis in the accompanying condensed consolidated balance sheets as of March 31, 2016 has not changed since December 31, 2015. These assets will be evaluated as of the annual valuation assessment date of October 1, 2016, or as events or changes in circumstances require. As of March 31, 2016 and December 31, 2015, 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 2014 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. At March 31, 2016 and December 31, 2015, the fair value and carrying value of Sonic’s significant fixed rate long-term debt were as follows: March 31, 2016 December 31, 2015 Fair Value Carrying Value Fair Value Carrying Value (In thousands) 7.0% Notes (1) $ 211,000 $ 198,747 $ 211,000 $ 198,708 5.0% Notes (1) $ 292,500 $ 300,000 $ 284,250 $ 300,000 Mortgage Notes (2) $ 190,213 $ 183,885 $ 174,007 $ 168,410 Other (2) $ 4,806 $ 5,058 $ 5,192 $ 5,457 (1) As determined by market quotations as of March 31, 2016 and December 31, 2015, respectively (Level 1). (2) As determined by discounted cash flows (Level 3). |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 10. Accumulated Other Comprehensive Income (Loss) The changes in accumulated other comprehensive income (loss) for the three months ended March 31, 2016 are as follows: Changes in Accumulated Other Comprehensive Income (Loss) by Component for the Three Months Ended March 31, 2016 Gains and Losses on Cash Flow Hedges Defined Benefit Pension Plan Total Accumulated Other Comprehensive Income (Loss) (In thousands) Balance at December 31, 2015 $ (5,638 ) $ 6 $ (5,632 ) Other comprehensive income (loss) before reclassifications (1) (3,873 ) - (3,873 ) Amounts reclassified out of accumulated other comprehensive income (loss) (2) 848 - 848 Net current-period other comprehensive income (loss) (3,025 ) - (3,025 ) Balance at March 31, 2016 $ (8,663 ) $ 6 $ (8,657 ) (1) Net of tax benefit of $2,374. (2) Net of tax expense of $521. 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,” to the consolidated financial statements in Sonic’s Annual Report on Form 10-K for the year ended December 31, 2015. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | 11. Segment Information As of March 31, 2016, 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 of three individuals 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 revenues and segment income (loss) are as follows: Three Months Ended March 31, 2016 2015 (In thousands) Revenues: Franchised Dealerships $ 2,210,586 $ 2,219,830 EchoPark ® 24,040 15,685 Total consolidated revenues $ 2,234,626 $ 2,235,515 Three Months Ended March 31, 2016 2015 (In thousands) Segment income (loss) (1): Franchised Dealerships $ 39,292 $ 43,072 EchoPark ® (3,423 ) (6,354 ) Total segment income (loss) 35,869 36,718 Interest expense, other, net (12,339 ) (13,219 ) Other income (expense), net 104 90 Income (loss) from continuing operations before taxes $ 23,634 $ 23,589 (1) Segment income (loss) for each segment is defined as operating income (loss) less interest expense, floor plan. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 12. Subsequent Events Subsequent to March 31, 2016, Sonic repurchased approximately 0.4 million shares of its Class A common stock for approximately $6.4 million in open market transactions. Subsequent to March 31, 2016, flooding in the Houston, Texas market resulted in inventory losses at certain of Sonic’s dealerships. Sonic is in the process of evaluating the impact of this flooding on its dealership operations. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation – The accompanying condensed consolidated financial statements of Sonic Automotive, Inc. and its wholly-owned subsidiaries (“Sonic,” the “Company,” “we,” “us” and “our”) for the three months ended March 31, 2016 and 2015, are unaudited and have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements reflect, in the opinion of management, all material normal recurring adjustments necessary to fairly state the financial position, results of operations and cash flows for the periods presented. The operating results for interim periods are not necessarily indicative of the results to be expected for the entire fiscal year or future interim periods, because the first quarter normally contributes less operating profit than the second, third and fourth quarters. These interim financial statements should be read in conjunction with the audited consolidated financial statements included in Sonic’s Annual Report on Form 10-K for the year ended December 31, 2015. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements – In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02 to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The amendments in this ASU require that leases are classified as either finance or operating leases, a right-of-use asset and lease liability is recognized in the statement of financial position, and repayments are classified within operating activities in the statement of cash flows. For public companies, this ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018 (early adoption is permitted). Upon adoption of this ASU, the presentation of certain items in Sonic’s consolidated financial position, cash flows and other disclosures will be impacted. In March 2016, the FASB issued ASU 2016-09 to simplify several aspects of the accounting for share-based payment transactions. For public companies, this ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 (early adoption is permitted). Upon adoption of this ASU, the presentation of certain items in Sonic’s consolidated financial position, results of operations, cash flows and other disclosures will be impacted. |
Principles of Consolidation | Principles of Consolidation – All of Sonic’s subsidiaries are wholly-owned and consolidated in the accompanying condensed consolidated financial statements, except for one 50% - owned dealership that is accounted for under the equity method. All material intercompany balances and transactions have been eliminated in the accompanying condensed consolidated financial statements. |
Lease Exit Accruals | Lease Exit Accruals – Lease exit accruals relate to facilities Sonic has ceased using in its operations that remain subject to a current lease agreement. The accruals represent the present value of the lease payments, net of estimated or actual sublease proceeds, 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 Sonic or the manufacturer and no other operations continue on the leased property. See Note 12, “Commitments and Contingencies,” to the consolidated financial statements in Sonic’s Annual Report on Form 10-K for the year ended December 31, 2015 for further discussion. A summary of the activity of these operating lease exit accruals consists of the following: (In thousands) Balance at December 31, 2015 $ 14,527 Lease exit expense (1) (409 ) Payments (2) (1,581 ) Balance at March 31, 2016 $ 12,537 (1) Income of approximately $0.5 million is recorded in income (loss) from discontinued operations before taxes, offset partially by expense of approximately $0.1 million recorded in selling, general and administrative expenses in the accompanying condensed consolidated statements of income. (2) Amount is recorded as an offset to rent expense, with approximately $0.2 million recorded in selling, general and administrative expenses and approximately $1.4 million recorded in income (loss) from discontinued operations before taxes, in the accompanying condensed consolidated statements of income. |
Income Tax Expense | Income Tax Expense – The overall effective tax rate from continuing operations was 38.8% and 39.0% for the three months ended March 31, 2016 and 2015, respectively. Sonic’s effective tax rate varies from year to year based on the distribution of taxable income between states in which Sonic operates and other tax adjustments. Sonic expects the effective tax rate in future periods to fall within a range of 38.0% to 40.0% before the impact, if any, of changes in valuation allowances related to deferred income tax assets or unusual discrete tax adjustments. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Lease Exit Accruals | A summary of the activity of these operating lease exit accruals consists of the following: (In thousands) Balance at December 31, 2015 $ 14,527 Lease exit expense (1) (409 ) Payments (2) (1,581 ) Balance at March 31, 2016 $ 12,537 (1) Income of approximately $0.5 million is recorded in income (loss) from discontinued operations before taxes, offset partially by expense of approximately $0.1 million recorded in selling, general and administrative expenses in the accompanying condensed consolidated statements of income. (2) Amount is recorded as an offset to rent expense, with approximately $0.2 million recorded in selling, general and administrative expenses and approximately $1.4 million recorded in income (loss) from discontinued operations before taxes, in the accompanying condensed consolidated statements of income. |
Business Acquisitions and Dis24
Business Acquisitions and Dispositions (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Revenues and Other Activities Associated with Dealerships Classified as Discontinued Operations | Revenues and other activities associated with dealerships classified as discontinued operations were as follows: Three Months Ended March 31, 2016 2015 (In thousands) Income (loss) from operations $ (194 ) $ (335 ) Lease exit accrual adjustments and charges 455 (356 ) Pre-tax income (loss) $ 261 $ (691 ) 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: Three Months Ended March 31, 2016 2015 (In thousands) Income (loss) from operations $ (31 ) $ (945 ) Gain (loss) on disposal (48 ) (102 ) Pre-tax income (loss) $ (79 ) $ (1,047 ) Total revenues $ 14 $ 28,619 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | Inventories consist of the following: March 31, 2016 December 31, 2015 (In thousands) New vehicles $ 1,133,845 $ 1,161,490 Used vehicles 270,336 251,103 Service loaners 126,503 121,946 Parts, accessories and other 63,048 65,042 Net inventories $ 1,593,732 $ 1,599,581 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Property Plant And Equipment [Abstract] | |
Components of Property and Equipment, Net | Property and equipment, net consists of the following: March 31, 2016 December 31, 2015 (In thousands) Land $ 264,904 $ 260,275 Building and improvements 692,545 679,712 Software and computer equipment 111,763 107,086 Parts and service equipment 81,108 79,219 Office equipment and fixtures 80,020 76,810 Company vehicles 8,916 8,478 Construction in progress 66,601 55,010 Total, at cost 1,305,857 1,266,590 Less accumulated depreciation (397,681 ) (379,688 ) Property and equipment, net $ 908,176 $ 886,902 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-term debt consists of the following: March 31, 2016 December 31, 2015 (In thousands) 2014 Revolving Credit Facility (1) $ 3,690 $ 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 Mortgage notes to finance companies-fixed rate, bearing interest from 3.51% to 7.03% 183,885 168,410 Mortgage notes to finance companies-variable rate, bearing interest at 1.25 to 2.80 percentage points above one-month or three-month LIBOR 165,014 150,961 Net debt discount and premium (2) (1,489 ) (1,562 ) Debt issuance costs (12,414 ) (12,884 ) Other 5,058 5,454 Total debt $ 843,744 $ 814,582 Less current maturities (26,679 ) (33,437 ) Long-term debt $ 817,065 $ 781,145 (1) The interest on the 2014 Revolving Credit Facility was 2.25% above LIBOR at March 31, 2016 and December 31, 2015. (2) March 31, 2016 includes a $1.3 million discount associated with the 7.0% Notes and a $0.2 million discount associated with mortgage notes payable. December 31, 2015 includes a $1.3 million discount associated with the 7.0% Notes and a $0.3 million discount associated with mortgage notes payable. |
Financial Covenants Include Required Specified Ratios | Sonic was in compliance with the covenants under the 2014 Credit Facilities as of March 31, 2016. 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 March 31, 2016 actual 1.16 1.75 4.21 |
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 $ 7.8 4.655% one-month LIBOR December 10, 2017 $ 6.9 (2) 6.860% one-month LIBOR + 1.25% August 1, 2017 $ 6.1 (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 0.437% at March 31, 2016. (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. |
Per Share Data and Stockholde28
Per Share Data and Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 three months ended March 31, 2016 and 2015: Three Months Ended March 31, 2016 Income (Loss) Income (Loss) From Continuing From Discontinued Net Operations Operations 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 46,950 $ 14,464 $ 160 $ 14,624 Effect of participating securities: Non-vested restricted stock and restricted stock units (6 ) - (6 ) Basic earnings (loss) and shares 46,950 $ 14,458 $ 0.31 $ 160 $ - $ 14,618 $ 0.31 Effect of dilutive securities: Stock compensation plans 172 Diluted earnings (loss) and shares 47,122 $ 14,458 $ 0.31 $ 160 $ - $ 14,618 $ 0.31 Three Months Ended March 31, 2015 Income (Loss) Income (Loss) From Continuing From Discontinued Net Operations Operations 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 50,854 $ 14,389 $ (422 ) $ 13,967 Effect of participating securities: Non-vested restricted stock and restricted stock units (5 ) - (5 ) Basic earnings (loss) and shares 50,854 $ 14,384 $ 0.28 $ (422 ) $ (0.01 ) $ 13,962 $ 0.27 Effect of dilutive securities: Stock compensation plans 549 Diluted earnings (loss) and shares 51,403 $ 14,384 $ 0.28 $ (422 ) $ (0.01 ) $ 13,962 $ 0.27 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Recorded at Fair Value | Assets and liabilities recorded at fair value in the accompanying condensed consolidated balance sheets as of March 31, 2016 and December 31, 2015 are as follows: Fair Value Based on Significant Other Observable Inputs (Level 2) March 31, 2016 December 31, 2015 (In thousands) Assets: Cash surrender value of life insurance policies (1) $ 28,637 $ 29,055 Total assets $ 28,637 $ 29,055 Liabilities: Cash flow swaps designated as hedges (2) $ 13,972 $ 9,094 Cash flow swaps not designated as hedges (3) 814 913 Deferred compensation plan (4) 13,308 13,551 Total liabilities $ 28,094 $ 23,558 (1) Included in other assets in the accompanying condensed consolidated balance sheets. (2) As of March 31, 2016, approximately $5.3 million and $8.7 million were included in other accrued liabilities and other long-term liabilities, respectively, in the accompanying condensed consolidated balance sheets. 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 condensed consolidated balance sheets. (3) As of March 31, 2016, approximately $0.6 million and $0.2 million were included in other accrued liabilities and other long-term liabilities, respectively, in the accompanying condensed consolidated balance sheets. 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 condensed consolidated balance sheets. (4) Included in other long-term liabilities in the accompanying condensed consolidated balance sheets. |
Fair Value and Carrying Value of Significant Fixed Rate Long-Term Debt | At March 31, 2016 and December 31, 2015, the fair value and carrying value of Sonic’s significant fixed rate long-term debt were as follows: March 31, 2016 December 31, 2015 Fair Value Carrying Value Fair Value Carrying Value (In thousands) 7.0% Notes (1) $ 211,000 $ 198,747 $ 211,000 $ 198,708 5.0% Notes (1) $ 292,500 $ 300,000 $ 284,250 $ 300,000 Mortgage Notes (2) $ 190,213 $ 183,885 $ 174,007 $ 168,410 Other (2) $ 4,806 $ 5,058 $ 5,192 $ 5,457 (1) As determined by market quotations as of March 31, 2016 and December 31, 2015, respectively (Level 1). (2) As determined by discounted cash flows (Level 3). |
Accumulated Other Comprehensi30
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Income (Loss) | The changes in accumulated other comprehensive income (loss) for the three months ended March 31, 2016 are as follows: Changes in Accumulated Other Comprehensive Income (Loss) by Component for the Three Months Ended March 31, 2016 Gains and Losses on Cash Flow Hedges Defined Benefit Pension Plan Total Accumulated Other Comprehensive Income (Loss) (In thousands) Balance at December 31, 2015 $ (5,638 ) $ 6 $ (5,632 ) Other comprehensive income (loss) before reclassifications (1) (3,873 ) - (3,873 ) Amounts reclassified out of accumulated other comprehensive income (loss) (2) 848 - 848 Net current-period other comprehensive income (loss) (3,025 ) - (3,025 ) Balance at March 31, 2016 $ (8,663 ) $ 6 $ (8,657 ) (1) Net of tax benefit of $2,374. (2) Net of tax expense of $521. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Summary of Reportable Operating Segment | Reportable segment revenues and segment income (loss) are as follows: Three Months Ended March 31, 2016 2015 (In thousands) Revenues: Franchised Dealerships $ 2,210,586 $ 2,219,830 EchoPark ® 24,040 15,685 Total consolidated revenues $ 2,234,626 $ 2,235,515 Three Months Ended March 31, 2016 2015 (In thousands) Segment income (loss) (1): Franchised Dealerships $ 39,292 $ 43,072 EchoPark ® (3,423 ) (6,354 ) Total segment income (loss) 35,869 36,718 Interest expense, other, net (12,339 ) (13,219 ) Other income (expense), net 104 90 Income (loss) from continuing operations before taxes $ 23,634 $ 23,589 (1) Segment income (loss) for each segment is defined as operating income (loss) less interest expense, floor plan. |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Significant Accounting Policies [Line Items] | |||
Effective tax rate from continuing operations | 38.80% | 39.00% | |
Minimum [Member] | |||
Significant Accounting Policies [Line Items] | |||
Expected effective tax rate for continuing operations Range | 38.00% | ||
Maximum [Member] | |||
Significant Accounting Policies [Line Items] | |||
Expected effective tax rate for continuing operations Range | 40.00% | ||
Dealership [Member] | |||
Significant Accounting Policies [Line Items] | |||
Percentage of dealership that is accounted for under the equity method | 50.00% | 50.00% |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Summary of Lease Exit Accruals (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Accounting Policies [Abstract] | |
Beginning balance | $ 14,527 |
Lease exit expense | (409) |
Payments | (1,581) |
Ending balance | $ 12,537 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Summary of Lease Exit Accruals (Parenthetical) (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Accounting Policies [Abstract] | |
Component of lease exit income in income (loss) from operations and the sale of dealerships before tax | $ 0.5 |
Component of lease exit expense in selling, general and administrative expenses | 0.1 |
Component of lease exit payments in selling, general and administrative expenses | 0.2 |
Component of lease exit payments in income (loss) from operations and the sale of dealerships before tax | $ 1.4 |
Business Acquisitions and Dis35
Business Acquisitions and Dispositions - Additional Information (Detail) - Franchise | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Business Combinations [Abstract] | ||
Number of franchise acquired | 0 | 0 |
Number of franchises disposed | 0 | 0 |
Business Acquisitions and Dis36
Business Acquisitions and Dispositions - Revenues and Other Activities Associated with Dealerships Classified as Discontinued Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Business Combinations [Abstract] | ||
Income (loss) from operations | $ (194) | $ (335) |
Lease exit accrual adjustments and charges | 455 | (356) |
Pre-tax income (loss) | $ 261 | $ (691) |
Business Acquisitions and Dis37
Business Acquisitions and Dispositions - Revenues and Other Activities Associated with Disposed Dealerships That Remain in Continued Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Business Combinations [Abstract] | ||
Income (loss) from operations | $ (31) | $ (945) |
Gain (loss) on disposal | (48) | (102) |
Pre-tax income (loss) | (79) | (1,047) |
Total revenues | $ 14 | $ 28,619 |
Inventories - Components of Inv
Inventories - Components of Inventories (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
New vehicles | $ 1,133,845 | $ 1,161,490 |
Used vehicles | 270,336 | 251,103 |
Service loaners | 126,503 | 121,946 |
Parts, accessories and other | 63,048 | 65,042 |
Net inventories | $ 1,593,732 | $ 1,599,581 |
Property and Equipment - Compon
Property and Equipment - Components of Property and Equipment, Net (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Property Plant And Equipment [Line Items] | ||
Total, at cost | $ 1,305,857 | $ 1,266,590 |
Less accumulated depreciation | (397,681) | (379,688) |
Property and equipment, net | 908,176 | 886,902 |
Land [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total, at cost | 264,904 | 260,275 |
Building and Improvements [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total, at cost | 692,545 | 679,712 |
Software and Computer Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total, at cost | 111,763 | 107,086 |
Parts and Service Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total, at cost | 81,108 | 79,219 |
Office Equipment and Fixtures [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total, at cost | 80,020 | 76,810 |
Company Vehicles [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total, at cost | 8,916 | 8,478 |
Construction in Progress [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total, at cost | $ 66,601 | $ 55,010 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Property Plant And Equipment [Abstract] | ||
Capital expenditures | $ 41.4 | $ 46.8 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | $ 471,493 | $ 471,493 |
Net of accumulated impairment losses | 796,700 | 796,700 |
Lease Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Definite life intangibles | 5,800 | 6,000 |
Franchise Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Franchise assets | $ 74,900 | $ 74,900 |
Long-Term Debt - Long-Term Debt
Long-Term Debt - Long-Term Debt (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Net debt discount and premium | $ (1,489) | $ (1,562) |
Debt issuance costs | (12,414) | (12,884) |
Other | 5,058 | 5,454 |
Total debt | 843,744 | 814,582 |
Less current maturities | (26,679) | (33,437) |
Long-Term Debt | 817,065 | 781,145 |
2014 Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
2014 Revolving Credit Facility | 3,690 | 4,203 |
7.0% Senior Subordinated Notes Due 2022 [Member] | ||
Debt Instrument [Line Items] | ||
Senior Subordinated Notes | 200,000 | 200,000 |
Total debt | 198,747 | 198,708 |
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 |
Mortgage Notes [Member] | ||
Debt Instrument [Line Items] | ||
Mortgage notes to finance companies-fixed rate, bearing interest from 3.51% to 7.03% | 183,885 | 168,410 |
Mortgage notes to finance companies-variable rate, bearing interest at 1.25 to 2.80 percentage points above one-month or three-month LIBOR | $ 165,014 | $ 150,961 |
Long-Term Debt - Long-Term De43
Long-Term Debt - Long-Term Debt (Parenthetical) (Detail) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 | 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 | $ 1.3 | ||
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% | ||
Mortgage Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Discount associated with notes | $ 0.2 | $ 0.3 | ||
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 | 2.80% |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) - USD ($) | May. 09, 2013 | Jul. 02, 2012 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 |
Debt Instrument [Line Items] | |||||
Incremental interest expense | $ 1,300,000 | $ 2,300,000 | |||
Net expense expected to be reclassified | 3,600,000 | ||||
Derivative Instruments and Hedging Activities [Member] | |||||
Debt Instrument [Line Items] | |||||
Fair value of swap positions | 14,800,000 | $ 10,000,000 | |||
Derivative Instruments and Hedging Activities [Member] | Other Accrued Liabilities [Member] | |||||
Debt Instrument [Line Items] | |||||
Fair value of swap positions | 5,900,000 | 5,100,000 | |||
Derivative Instruments and Hedging Activities [Member] | Other Long-Term Liabilities [Member] | |||||
Debt Instrument [Line Items] | |||||
Fair value of swap positions | $ 8,900,000 | 4,900,000 | |||
Mortgage Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Notes payable due date | Between 2016 and 2033 | ||||
Debt weighted average interest rate on note | 3.74% | ||||
Mortgage financing aggregate | $ 33,700,000 | ||||
Outstanding principal balance | $ 348,900,000 | ||||
Percentage of operating locations related to mortgage financing | 40.00% | ||||
2014 Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Maturity date of revolving credit facility and floor plan facility | Aug. 15, 2019 | ||||
Minimum EBTDAR to rent ratio | 376.00% | ||||
2014 Credit Facility [Member] | Required Ratio [Member] | |||||
Debt Instrument [Line Items] | |||||
Minimum EBTDAR to rent ratio | 150.00% | ||||
2014 Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Current borrowing capacity | $ 225,000,000 | ||||
Maximum borrowing capacity | 275,000,000 | ||||
Borrowing base | 185,000,000 | ||||
Letters of credit outstanding amount | 21,700,000 | ||||
2014 Revolving Credit Facility | 3,690,000 | $ 4,203,000 | |||
Borrowing availability amount | $ 159,600,000 | ||||
7.0% Senior Subordinated Notes Due 2022 [Member] | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ 200,000,000 | ||||
Stated interest rate on debt agreement | 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 | ||||
5.0% Senior Subordinated Notes due 2023 [Member] | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ 300,000,000 | ||||
Stated interest rate on debt agreement | 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 |
Long-Term Debt - Financial Cove
Long-Term Debt - Financial Covenants Include Required Specified Ratios (Detail) | Mar. 31, 2016 |
Line Of Credit Facility [Line Items] | |
Minimum consolidated liquidity ratio | 116.00% |
Minimum consolidated fixed charge coverage ratio | 175.00% |
Maximum consolidated total lease adjusted leverage ratio | 421.00% |
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) | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Derivatives, Fair Value [Line Items] | |
Receive Rate | one-month LIBOR |
Variable Interest Rate | 0.437% |
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 | $ 7,800,000 |
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 | $ 6,900,000 |
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 | $ 6,100,000 |
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 I47
Long-Term Debt - Summary of Interest Received and Paid under Term of Cash Flow Swap (Parenthetical) (Detail) | 3 Months Ended |
Mar. 31, 2016 | |
Derivatives, Fair Value [Line Items] | |
One-month LIBOR rate | 0.437% |
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 |
Per Share Data and Stockholde48
Per Share Data and Stockholders' Equity - Dilutive Effect on Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Weighted Average Shares, Basic | 46,950 | 50,854 |
Weighted Average Shares, Stock compensation plans | 172 | 549 |
Weighted Average Shares, Diluted | 47,122 | 51,403 |
Income (Loss) From Continuing Operations, Amount | $ 14,464 | $ 14,389 |
Participating securities income (loss) from continuing operations non-vested restricted stock and restricted stock units | (6) | (5) |
Income (Loss) From Continuing Operations, Basic, Amount | 14,458 | 14,384 |
Income (Loss) From Continuing Operations Diluted, Amount | $ 14,458 | $ 14,384 |
Income (Loss) From Continuing Operations, Basic, Per Share Amount | $ 0.31 | $ 0.28 |
Income (Loss) From Continuing Operations, Diluted, Per Share Amount | $ 0.31 | $ 0.28 |
Dilutive effect on earnings per share | $ 160 | $ (422) |
Income (Loss) From Discontinued Operations, Basic earnings (loss), Amount | 160 | (422) |
Income (Loss) From Discontinued Operations, Diluted earnings (loss), Amount | 160 | $ (422) |
Income (Loss) From Discontinuing Operations, Basic earnings (loss), Per Share Amount | $ (0.01) | |
Income (Loss) From Discontinued Operations, Diluted earnings (loss), Per Share Amount | $ (0.01) | |
Net Income (Loss), Amount | 14,624 | $ 13,967 |
Net Income (Loss), Basic, Amount | 14,618 | 13,962 |
Net Income (Loss), Diluted, Amount | $ 14,618 | $ 13,962 |
Net Income (Loss), Basic, Per Share Amount | $ 0.31 | $ 0.27 |
Net Income (Loss), Diluted, Per Share Amount | $ 0.31 | $ 0.27 |
Per Share Data and Stockholde49
Per Share Data and Stockholders' Equity - Additional Information (Detail) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Common Class A [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive stock options excluded in computation of diluted earnings per share | 0.4 | 0.4 |
Contingencies - Additional Info
Contingencies - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Contingencies And Commitments [Line Items] | ||
Maximum exposure associated with general indemnifications | $ 3.5 | $ 5.3 |
General indemnifications minimum expiration period | 1 year | |
General indemnifications maximum expiration period | 3 years | |
Contingent liability reserve balance after reduction | $ 2.8 | $ 2.8 |
Dealership [Member] | ||
Contingencies And Commitments [Line Items] | ||
Joint venture ownership percentage | 50.00% | 50.00% |
Other Accrued Liabilities [Member] | ||
Contingencies And Commitments [Line Items] | ||
Amount reserved for pending proceedings | $ 0.3 | $ 0.3 |
Other Long-Term Liabilities [Member] | ||
Contingencies And Commitments [Line Items] | ||
Amount reserved for pending proceedings | $ 0.2 | $ 0.2 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Recorded at Fair Value (Detail) - Significant Other Observable Inputs (Level 2) [Member] - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Assets: | ||
Cash surrender value of life insurance policies | $ 28,637 | $ 29,055 |
Total assets | 28,637 | 29,055 |
Liabilities: | ||
Cash flow swaps designated as hedges | 13,972 | 9,094 |
Cash flow swaps not designated as hedges | 814 | 913 |
Deferred compensation plan | 13,308 | 13,551 |
Total liabilities | $ 28,094 | $ 23,558 |
Fair Value Measurements - Ass52
Fair Value Measurements - Assets and Liabilities Recorded at Fair Value (Parenthetical) (Detail) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Other Accrued Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Cash flow swaps designated as hedges | $ 5.3 | $ 4.6 |
Cash flow swaps not designated as hedges | 0.6 | 0.5 |
Other Long-Term Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Cash flow swaps designated as hedges | 8.7 | 4.5 |
Cash flow swaps not designated as hedges | $ 0.2 | $ 0.4 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value and Carrying Value of Significant Fixed Rate Long-Term Debt (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term Debt, Carrying Value | $ 843,744 | $ 814,582 |
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 | 211,000 |
Long-term Debt, Carrying Value | 198,747 | 198,708 |
5.0% Senior Subordinated Notes due 2023 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term Debt, Fair Value | 292,500 | 284,250 |
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 | 190,213 | 174,007 |
Long-term Debt, Carrying Value | 183,885 | 168,410 |
Other [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term Debt, Fair Value | 4,806 | 5,192 |
Long-term Debt, Carrying Value | $ 5,058 | $ 5,457 |
Fair Value Measurements - Fai54
Fair Value Measurements - Fair Value and Carrying Value of Significant Fixed Rate Long-Term Debt (Parenthetical) (Detail) | Mar. 31, 2016 | Dec. 31, 2015 | 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% |
Accumulated Other Comprehensi55
Accumulated Other Comprehensive Income (Loss) - Summary of Changes in Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at December 31, 2015 | $ (5,632) | |
Other comprehensive income (loss) before reclassifications | (3,873) | |
Amounts reclassified out of accumulated other comprehensive income (loss) | 848 | |
Other comprehensive income (loss) | (3,025) | $ (923) |
Balance at March 31, 2016 | (8,657) | |
Gains and Losses on Cash Flow Hedges [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at December 31, 2015 | (5,638) | |
Other comprehensive income (loss) before reclassifications | (3,873) | |
Amounts reclassified out of accumulated other comprehensive income (loss) | 848 | |
Other comprehensive income (loss) | (3,025) | |
Balance at March 31, 2016 | (8,663) | |
Defined Benefit Pension Plan [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance at December 31, 2015 | 6 | |
Balance at March 31, 2016 | $ 6 |
Accumulated Other Comprehensi56
Accumulated Other Comprehensive Income (Loss) - Summary of Changes in Accumulated Other Comprehensive Income (Loss) (Parenthetical) (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Equity [Abstract] | |
Other comprehensive income (loss) before reclassifications, tax benefit | $ 2,374 |
Amounts reclassified out of accumulated other comprehensive income (loss), tax expense | $ 521 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2016Segment | |
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 | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting Information [Line Items] | ||
Total consolidated revenues | $ 2,234,626 | $ 2,235,515 |
Total segment income (loss) | 35,869 | 36,718 |
Interest expense, other, net | (12,339) | (13,219) |
Other income (expense), net | 104 | 90 |
Income (loss) from continuing operations before taxes | 23,634 | 23,589 |
Franchised Dealerships [Member] | ||
Segment Reporting Information [Line Items] | ||
Total consolidated revenues | 2,210,586 | 2,219,830 |
Total segment income (loss) | 39,292 | 43,072 |
Echo Park [Member] | ||
Segment Reporting Information [Line Items] | ||
Total consolidated revenues | 24,040 | 15,685 |
Total segment income (loss) | $ (3,423) | $ (6,354) |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) $ in Thousands, shares in Millions | Apr. 27, 2016 | Mar. 31, 2016 |
Subsequent Event [Line Items] | ||
Stock repurchased, value | $ 74,415 | |
Common Class A [Member] | Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Stock repurchased, shares | 0.4 | |
Stock repurchased, value | $ 6,400 |