Slide 1: Q4 and Full Year 2015 Earnings Review
Q4 and Full Year 2015 Earnings Review February 23, 2016 Exhibit 99.2
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events, are not historical facts and are based on our current expectations and assumptions regarding our bu
Slide 3: Content
CONTENT STRATEGIC FOCUS FINANCIAL REVIEW OPERATIONS REVIEW SUMMARY & OUTLOOK
Slide 4: Strategic Focus
STRATEGIC FOCUS Growth EchoPark® One Sonic-One Experience Acquisitions & Open Points Own Our Properties Return Capital to Shareholders Share Repurchases Dividends
Slide 5: Strategic Focus: One Sonic-One Experience (OSOE)
STRATEGIC FOCUS ONE SONIC-ONE EXPERIENCE (OSOE) Goals 1 Associate, 1 Price, 1 Hour Improve Transparency; Increase Trust Operational Efficiencies Grow Market Share Feed Fixed Operations Technology Being Introduced into Additional Markets (Charlotte was Pilot) CRM, Desking & Appraisal
Slide 6: Strategic Focus: EchoPark
STRATEGIC FOCUS EchoPark® Three Locations Open In Denver Thornton Hub Centennial Highlands Ranch Locations to Open in Denver Market in First Half of 2016 Dakota Ridge Stapleton Two Additional Denver Market Locations by End of 2016 Purchasing Property in Two Other Markets
Slide 7: Strategic Focus: Acquisitions & Open Points
STRATEGIC FOCUS ACQUISITIONS & OPEN POINTS Open Points Mercedes Benz in Dallas Market Operational in 2016 Audi in Pensacola Market Operational in 2016 Nissan in TN Market Operational in late 2016 / early 2017 Exploring Acquisition and Open Point Opportunities in Other Markets
Slide 8: Strategic Focus: Own Our Properties
STRATEGIC FOCUS OWN OUR PROPERTIES % of Properties Owned
Slide 9: Equity in Property
EQUITY IN PROPERTY ($ in millions) Note: Calculated as net book value less mortgage balance. STRATEGIC FOCUS OWN OUR PROPERTIES
Slide 10: Share Repurchases
SHARE REPURCHASES Acquired 7.9% of 12/31/2015 OS in 2016 New Share Count = 46.0M Down from High of 53.2M (Dec 2012) STRATEGIC FOCUS RETURN CAPITAL TO SHAREHOLDERS (000's) (000's) (000's) Shares $/Share $ Availability Total 2015 Activity 1,519 $22.7 $34,483 $45,003.298999999999 Additional Authorizati
Slide 11: Outstanding Share Count at Year End
OUTSTANDING SHARE COUNT AT YEAR END (in millions) Note – These amounts exclude the effect of share dilution from convertible notes and equity grants outstanding. STRATEGIC FOCUS RETURN CAPITAL TO SHAREHOLDERS
Slide 12: Q4 2015 Financial Review
Q4 2015 FINANCIAL REVIEW
Slide 13: Q4 2015 Financial Review: Franchised Segment
Q4 2015 FINANCIAL REVIEW FRANCHISED SEGMENT
Slide 14: Franchised Segment Q4 2015 Results
FRANCHISED SEGMENT Q4 2015 RESULTS – Q4 2015 and Q4 2014 are adjusted – see appendix for reconciliation to GAAP amounts Note – Continuing operations includes results of sold stores after March 31, 2014. B/(W) than Q4 2014 (1) (amounts in millions, except per share data) Q4 2015 (1) $ % Revenue $2,45
Slide 15: Q4 2015 Financial Review: EchoPark Segment
Q4 2015 FINANCIAL REVIEW ECHOPARK® SEGMENT
Slide 16: EchoPark Segment Q4 2015 Results
NM – Not Meaningful ECHOPARK® SEGMENT Q4 2015 RESULTS B/(W) than Q4 2014 (amounts in millions, except per share, unit and per unit data) Q4 2015 $ % Revenue $18.350445560000001 $12.912768509999999 NM Gross Profit $2.4416698399999999 $1.9513660800000001 NM Operating Profit $-3.2612278999999904 $3.745
Slide 17: Q4 2015 Financial Review: Total Enterprise
Q4 2015 FINANCIAL REVIEW TOTAL ENTERPRISE
Slide 18: Consolidated Q4 2015 Results
CONSOLIDATED Q4 2015 RESULTS – Q4 2015 and Q4 2014 are adjusted – see appendix for reconciliation to GAAP amounts Note – Continuing operations includes results of sold stores after March 31, 2014. B/(W) than Q4 2014 (1) (amounts in millions, except per share data) Q4 2015 (1) $ % Revenue $2,470.6353
Slide 19: Q4 2015 Revenue & Gross Profit
Q4 2015 REVENUE & GROSS PROFIT Strong Growth in Used, Fixed and F&I Offset by New Gross Compression B/(W) than Q4 2014 (amounts in millions, except per share data) Q4 2015 $ % New Retail Revenue $1,378 $40 3.0% Used Retail Revenue $607 $44 7.9% Fixed Operations Revenue $345 $22 6.9% F&I Revenue $84
Slide 20: Q4 2015 Adjusted SG&A to Gross
Q4 2015 ADJUSTED SG&A TO GROSS 76.2% 75.5% – Q4 2015 and Q4 2014 are adjusted – see appendix for reconciliation to GAAP amounts
Slide 21: Q4 2015 Adjusted SG&A to Gross
Q4 2015 ADJUSTED SG&A TO GROSS – Q4 2015 and Q4 2014 are adjusted – see appendix for reconciliation to GAAP amounts
Slide 22: Q4 2015 Interest Expense
Q4 2015 INTEREST EXPENSE Floorplan Increase Due to Higher Balances B/(W) than Q4 2014 (amounts in millions, except per share data) Q4 2015 $ % Floor Plan Interest Expense $6 ($1) (20.4%) Interest Expense, Other $12 $0 2.7% Total Interest Expense $18 ($1) (3.7%)
Slide 23: Full Year 2015 Financial Review
FULL YEAR 2015 FINANCIAL REVIEW
Slide 24: Full Year 2015 Financial Review: Franchised Segment
FULL YEAR 2015 FINANCIAL REVIEW FRANCHISED SEGMENT
Slide 25: Franchised Segment FY 2015 Results
FRANCHISED SEGMENT FY 2015 RESULTS – 2015 and 2014 are adjusted – see appendix for reconciliation to GAAP amounts B/(W) than FY 2014 (1) (amounts in millions, except per share data) FY 2015 (1) $ % Revenue $9,547 $356 3.9% Gross Profit $1,405 $39 2.9% SG&A as % of Gross 77.4% 0 bps Operating Profit
Slide 26: Full Year 2015 Financial Review: EchoPark Segment
FULL YEAR 2015 FINANCIAL REVIEW ECHOPARK® SEGMENT
Slide 27: EchoPark Segment FY 2015 Results
NM – Not meaningful ECHOPARK® SEGMENT FY 2015 RESULTS – 2015 and 2014 are adjusted – see appendix for reconciliation to GAAP amounts B/(W) than FY 2014 (1) (amounts in millions, except per share, unit and per unit data) FY 2015 (1) $ % Revenue $77 $72 NM Gross Profit $10 $9 NM Operating Profit ($15)
Slide 28: Full Year 2015 Financial Review: Total Enterprise
FULL YEAR 2015 FINANCIAL REVIEW TOTAL ENTERPRISE
Slide 29: Consolidated FY 2015 Results
CONSOLIDATED FY 2015 RESULTS – 2015 and 2014 are adjusted – see appendix for reconciliation to GAAP amounts B/(W) than FY 2014 (1) (amounts in millions, except per share data) FY 2015 (1) $ % Revenue $9,624 $427 4.6% Gross Profit $1,415 $49 3.6% SG&A as % of Gross 78.4% 20 bps Operating Profit $237
Slide 30: FY 2015 Revenue & Gross Profit
FY 2015 REVENUE & GROSS PROFIT Strong Growth in Used, Fixed and F&I Offset by New Gross Compression B/(W) than FY 2014 (amounts in millions, except per share data) FY 2015 $ % New Retail Revenue $5,206 $160 3.2% Used Retail Revenue $2,512 $202 8.7% Fixed Operations Revenue $1,365 $68 5.3% F&I Revenu
Slide 31: FY 2015 SG&A to Gross
FY 2015 SG&A TO GROSS 78.4% 78.6% – 2015 and 2014 are adjusted – see appendix for reconciliation to GAAP amounts
Slide 32: FY 2015 SG&A to Gross
FY 2015 SG&A TO GROSS – 2015 and 2014 are adjusted – see appendix for reconciliation to GAAP amounts
Slide 33: FY 2015 Interest Expense
FY 2015 INTEREST EXPENSE Floorplan Increase Due to Higher Balances B/(W) than FY 2014 (amounts in millions, except per share data) FY 2015 $ % Floor Plan Interest Expense $21 ($3) (13.5%) Interest Expense, Other $51 $2 4.3% Total Interest Expense $72 ($0) (0.4%)
Slide 34: Adjusted EBITDA Trend
($’s in millions) * – See appendix for reconciliation of Adjusted EBITDA to associated GAAP amounts. ADJUSTED EBITDA TREND EP Investment of $15M EP Investment of $13M Store Count
Slide 35: FY 2015 CapEx
FY 2015 CAPEX (amounts in millions) FY 2015 Estimated 2016 Real Estate & Facility Related 138.1 $ 216.1 $ All Other Cap Ex 34.3 36.8 Subtotal 172.4 $ 252.9 $ Less: Mortgage Funding (69.0) (168.4) Total Cash Used – Cap Ex 103.4 $ 84.5 $
Slide 36: Debt Covenants
DEBT COVENANTS Compliant with all Covenants Covenant Actual Q4 2015 Liquidity Ratio >= 1.05 1.19 Fixed Charge Coverage Ratio >= 1.20 1.78 Total Lease Adjusted Leverage Ratio <= 5.50 4.08
Slide 37: Operations Review
OPERATIONS REVIEW
Slide 38: New Vehicle Retail Same Store
NEW VEHICLE RETAIL SAME STORE Q4 volume record for current store group Q4 2015 Q4 2014 B/(W) Retail Volume 35,058 34,321 2.1% Selling Price 39,059 $ 38,475 $ 1.5% Gross Margin % 5.4% 5.9% (50) bps GPU 2,112 $ 2,270 $ (157) $ Gross Profit 74.1 $ 77.9 $ (4.9%) SAAR (mllion) 17.9 16.8 6.8%
Slide 39: New Vehicle SAAR
NEW VEHICLE SAAR 4th QTR Up 6.8% Full Year 2015 – 17.4M Full Year 2014 – 16.4M Full Year 2013 – 15.4M
Slide 40: New Vehicle: Gross & Unit Trend
NEW VEHICLE NEW VEHICLE – GROSS & UNIT TREND Continuing Operations
Slide 41: New Vehicle: Gross Per Unit
NEW VEHICLE NEW VEHICLE – GROSS PER UNIT Continuing Operations Decline primarily relates to BMW, MB & Audi
Slide 42: Vehicle Days Supply
VEHICLE DAYS SUPPLY 62 64 60 52 5 57 Days 50 40 - 3 30 3 34 20 + T = Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 —New —Used
Slide 43: Used Vehicle Retail Same Store
USED VEHICLE RETAIL SAME STORE Q4 volume record for ANY store group Q4 2015 Q4 2014 B/(W) Retail Volume 27,182 25,597 6.2% GPU 1,380 $ 1,446 $ (65) $ Used to New 0.78 to 1.00 0.75 to 1.00 0.03 Vehicles/Store/Mth (97 stores) 94 89 5
Slide 44: Used Vehicle: Gross Trend
PRE-OWNED * - Used Related Gross = (Used Gross + F&I + Reconditioning) ($’s in millions) USED VEHICLE – GROSS TREND Continuing Operations
Slide 45: F&I Same Store
Total Gross Up 9.6% Higher PUR accounted for $4.4M of the overall $7.3M increase in F&I Gross Gross (millions) $ 75 $ 83 F&I SAME STORE
Slide 46: F&I: Gross & PUR Trend
F&I F&I – GROSS & PUR TREND Continuing Operations
Slide 47: Fixed Ops Same Store
FIXED OPS SAME STORE Q4 Fixed Ops gross record Q4 2015 Q4 2014 B/(W) Revenue 341 $ 315 $ 8.1% Gross Profit 167 $ 153 $ 9.6%
Slide 48: Fixed Ops Same Store: Customer Pay
FIXED OPS SAME STORE – CUSTOMER PAY We continue to perform better in CP – the moves we have made in our shops and the increased level of technicians is paying off - 1 Day
Slide 49: Fixed Operations: Gross Trend
FIXED OPERATIONS ($’s in millions) FIXED OPERATIONS – GROSS TREND Continuing Operations
Slide 50: Summary
Continued to grow the top-line in each revenue category achieving record results New vehicle GPU pressure experienced across the public dealership group Fixed operations and F&I continued to exhibit opportunities for growth Significant milestones / achievements in 2015 Begin scaling of EchoPark® OSO
Slide 51: 2016 Plan
2016 PLAN 2016 Plan Expect new car industry volume to be between 17.3M to 17.6M units We will continue to increase pre-owned volume in the mid-single digits Expect fixed operations to grow at mid-single digits Costs related to EchoPark®, OSOE to continue 2016 Continued Ops EPS Guidance: New Car Fran
Slide 52: EchoPark Automotive
EchoPark. AUTOMOTIVE
Slide 53: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS (amounts in thousands) 2009 2010 2011 2012 2013 2014 2015 Net Income 31,548 $ 89,929 $ 76,254 $ 89,101 $ 81,618 $ 97,217 $ 86,311 $ Non-Floorplan Interest 67,735 68,604 63,576 58,453 55,356 52,269 49,524 Depreciation & Amort 57,036 45,827 51,164 52,616 58,139 62,161 72,130 I
Slide 54: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Consolidated Franchised Dealerships EchoPark® Three Months Ended Three Months Ended Three Months Ended December 31, December 31, December 31, 2015 2014 2015 2014 2015 2014 (In millions) SG&A Reconciliation: As Reported . . . . . . . . . . . .. . . . . . . . . . . . . . . . .
Slide 55: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Consolidated Franchised Dealerships EchoPark® Three Months Ended Three Months Ended Three Months Ended December 31, December 31, December 31, 2015 2014 2015 2014 2015 2014 (In millions) Operating Profit Reconciliation: As Reported . . . . . . . .. . . . . . . . . . . . . . .
Slide 56: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Consolidated Franchised Dealerships EchoPark® Twelve Months Ended Twelve Months Ended Twelve Months Ended December 31, December 31, December 31, 2015 2014 2015 2014 2015 2014 (In millions) SG&A Reconciliation: As Reported . . . . . . . . . .. . . . . . . . . . . . . . . . .
Slide 57: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Consolidated Franchised Dealerships EchoPark® Twelve Months Ended Twelve Months Ended Twelve Months Ended December 31, December 31, December 31, 2015 2014 2015 2014 2015 2014 (In millions) Operating Profit Reconciliation: As Reported . . . . . .. . . . . . . . . . . . . . .
Slide 58: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Three Months 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)
Slide 59: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Three Months 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)
Slide 60: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Twelve Months 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
Slide 61: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Twelve Months 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
Slide 62: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Three Months Ended December 31, 2015 Three Months Ended December 31, 2014 Continuing Operations Continuing Operations Franchised Dealerships EchoPark® Consolidated Franchised Dealerships EchoPark® Consolidated EPS Reconciliation: Reported diluted earnings (loss) and shares .