EX-99.1 2 d307598dex991.htm EXHIBIT 99.1

Exhibit 99.1

Sonic Automotive, Inc. Profits up 46%

Record Revenues Exceed Industry Growth; SG&A at 4 Year Low

CHARLOTTE, N.C. – February 28, 2012 – Sonic Automotive, Inc. (NYSE: SAH), one of the nation’s largest automotive retailers, today reported 2011 fourth quarter adjusted earnings from continuing operations of $25.4 million for a 46% increase over the prior year adjusted results. Adjusted earnings per diluted share increased 43% to $0.43 compared to $0.30 in the prior year quarter. The adjustments for both periods, which include primarily impairment and legal settlement charges in 2011 and income tax benefits and impairment charges in 2010, are detailed further in the attached tables.

For the full year 2011, the Company reported adjusted earnings from continuing operations of $1.39 per diluted share compared to $0.99 per diluted share in the prior year. The adjustments for both periods are detailed further in the attached tables.

2011 Highlights – New retail volume outpaces industry; Record Used Vehicle Growth; Expense leverage continues

| • |  | Total Q4 revenues up 12% over prior year quarter; Up 14% for full year

| • |  | New vehicle retail volume up 15% in Q4; Exceeds industry growth of 10%

| • |  | Used vehicle volume up 11% for the quarter; Up 14% for full year; Record annual sales volume

| • |  | Parts and Service revenue up 3% in Q4; Up 5% for full year; Record sales volume

| • |  | Adjusted SG&A to gross profit down 220 bps to 76.6% for the quarter

Commenting on the overall results, Jeff Dyke, the Company’s EVP of Operations noted, “Our new and used volume growth continues to exceed industry averages as our team implements our operating playbook strategy. Our team’s focus on used car processes has produced double-digit volume growth for 11 consecutive quarters. This translates into a 15% compound annual growth rate over the last 4 years. We continue to believe there are significant future growth opportunities throughout the business as we continue the implementation of our strategic initiatives. The top line growth continued to drive incremental gross profit dollars which allowed us to further leverage our expense structure with fourth quarter adjusted SG&A to gross profit coming in at 76.6% which is the lowest level in several years.”

2012 Outlook

Commenting on the fourth quarter and the 2012 outlook, B. Scott Smith, the Company’s President, said, “Sonic Automotive wrapped up one of the strongest years in our Company’s history. We have proven that our single-minded focus on delivering predictable, repeatable and sustainable processes through our Playbooks, coupled with our culture and plain, old-fashioned teamwork can produce superior results without the integration risk of acquisitions. We expect to see continued steady growth in the automotive retailing sector and are targeting 2012 new vehicle industry volume of 13.5 million units. We currently expect earnings per share from continuing operations of between $1.55 and $1.65 for the full year 2012. We will have further comments on our 2012 outlook on our earnings call later today.”

Fourth Quarter Earnings Conference Call

Senior management will host a conference call today at 11:00 A.M. (Eastern) to discuss the quarter’s results. To access the live broadcast of the call over the Internet go to: www.sonicautomotive.com, then click on “Our Company”, then “Investor Relations”, then “Earnings Conference Calls”.

Presentation materials for the conference call can be accessed on the Company’s website at www.sonicautomotive.com by clicking on the “Investor Relations” tab under “Our Company” and choosing “Webcasts & Presentations”.

A live audio of the call will be accessible to the public by calling (877) 791-3416. International callers dial (706) 643-0958. Callers should dial in approximately 10 minutes before the call begins.

A conference call replay will be available one hour following the call for seven days and can be accessed by calling: 800-585-8367, Conference ID: 14200, International callers dial (404) 537-3406.

About Sonic Automotive

Sonic Automotive, Inc., a Fortune 500 company based in Charlotte, N.C., is one of the nation’s largest automotive retailers. Sonic can be reached on the web at www.sonicautomotive.com.

Included herein are forward-looking statements, including statements with respect to growth in new and used vehicle sales, future success and impacts from the implementation of our strategic initiatives, future new vehicle industry volume and expected earnings per share. There are many factors that affect management’s views about future events and trends of the Company’s business. These factors involve risk and uncertainties that could cause actual results or trends to differ materially from management’s view, including without limitation, economic conditions in the markets in which we operate, new and used vehicle sales volume, the success of our operational strategies, the rate and timing of overall economic recovery or decline and the risk factors described in the Company’s annual report on Form 10-K for the year ending December 31, 2010 and the quarterly report on Form 10-Q for the quarter ending September 30, 2011. The Company does not undertake any obligation to update forward-looking information.

Sonic Automotive, Inc.

Results of Operations (Unaudited)

(In thousands, except per share, unit data and percentage amounts)

This release contains certain non-GAAP financial measures as defined under SEC rules, such as, but not limited to, adjusted income from continuing operations, related earnings per share data and adjusted EBITDA. The Company has reconciled these measures to the most directly comparable GAAP measures in the release. The Company believes that these non-GAAP financial measures improve the transparency of the Company’s disclosure by providing period-to-period comparability of the Company’s results from operations.

|  | Three Months Ended December 31, |  |  | Three Months Ended December 31, |
|  | 2011 As Reported |  |  | 2011 Adjustments |  |  | 2011 As Adjusted |  |  | 2010 As Reported |  |  | 2010 Adjustments |  |  | 2010 As Adjusted |
Revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
New retail vehicles |  | $ | 1,134,337 |  |  | $ | — |  |  | $ | 1,134,337 |  |  | $ | 975,849 |  |  | $ | — |  |  | $ | 975,849 |
Fleet vehicles |  |  | 51,335 |  |  |  | — |  |  |  | 51,335 |  |  |  | 58,363 |  |  |  | — |  |  |  | 58,363 |
Total new vehicles |  |  | 1,185,672 |  |  |  | — |  |  |  | 1,185,672 |  |  |  | 1,034,212 |  |  |  | — |  |  |  | 1,034,212 |
Used vehicles |  |  | 488,152 |  |  |  | — |  |  |  | 488,152 |  |  |  | 437,258 |  |  |  | — |  |  |  | 437,258 |
Wholesale vehicles |  |  | 48,141 |  |  |  | — |  |  |  | 48,141 |  |  |  | 40,705 |  |  |  | — |  |  |  | 40,705 |
Total vehicles |  |  | 1,721,965 |  |  |  | — |  |  |  | 1,721,965 |  |  |  | 1,512,175 |  |  |  | — |  |  |  | 1,512,175 |
Parts, service and collision repair |  |  | 292,400 |  |  |  | — |  |  |  | 292,400 |  |  |  | 285,357 |  |  |  | — |  |  |  | 285,357 |
Finance, insurance and other |  |  | 56,433 |  |  |  | — |  |  |  | 56,433 |  |  |  | 47,361 |  |  |  | — |  |  |  | 47,361 |
Total revenues |  |  | 2,070,798 |  |  |  | — |  |  |  | 2,070,798 |  |  |  | 1,844,893 |  |  |  | — |  |  |  | 1,844,893 |
Total gross profit |  |  | 305,295 |  |  |  | — |  |  |  | 305,295 |  |  |  | 284,525 |  |  |  | — |  |  |  | 284,525 |
Selling, general and administrative expenses |  |  | (240,779 | ) |  |  | 6,816 |  |  |  | (233,963 | ) |  |  | (224,155 | ) |  |  | — |  |  |  | (224,155 | )
Impairment charges |  |  | (991 | ) |  |  | 991 |  |  |  | — |  |  |  | (117 | ) |  |  | 117 |  |  |  | — |
Depreciation and amortization |  |  | (10,586 | ) |  |  | — |  |  |  | (10,586 | ) |  |  | (9,381 | ) |  |  | — |  |  |  | (9,381 | )
Operating income (loss) |  |  | 52,939 |  |  |  | 7,807 |  |  |  | 60,746 |  |  |  | 50,872 |  |  |  | 117 |  |  |  | 50,989 |
Interest expense, floor plan |  |  | (4,871 | ) |  |  | — |  |  |  | (4,871 | ) |  |  | (5,921 | ) |  |  | — |  |  |  | (5,921 | )
Interest expense, other, net |  |  | (14,697 | ) |  |  | — |  |  |  | (14,697 | ) |  |  | (15,319 | ) |  |  | — |  |  |  | (15,319 | )
Interest expense, non-cash, convertible debt |  |  | (1,574 | ) |  |  | — |  |  |  | (1,574 | ) |  |  | (1,739 | ) |  |  | — |  |  |  | (1,739 | )
Interest expense / amortization, non-cash, cash flow swaps |  |  | (161 | ) |  |  | — |  |  |  | (161 | ) |  |  | 519 |  |  |  | (519 | ) |  |  | — |
Other income (expense), net |  |  | (277 | ) |  |  | — |  |  |  | (277 | ) |  |  | (3 | ) |  |  | — |  |  |  | (3 | )
Income (loss) from continuing operations before taxes |  |  | 31,359 |  |  |  | 7,807 |  |  |  | 39,166 |  |  |  | 28,409 |  |  |  | (402 | ) |  |  | 28,007 |
Provision for income taxes - benefit (expense) |  |  | (10,988 | ) |  |  | (2,733 | ) |  |  | (13,721 | ) |  |  | 37,409 |  |  |  | (48,006 | ) |  |  | (10,597 | )
Income (loss) from continuing operations |  |  | 20,371 |  |  |  | 5,074 |  |  |  | 25,445 |  |  |  | 65,818 |  |  |  | (48,408 | ) |  |  | 17,410 |
Income (loss) from discontinued operations |  |  | 167 |  |  |  | 284 |  |  |  | 451 |  |  |  | (1,464 | ) |  |  | 602 |  |  |  | (862 | )
Net income (loss) |  | $ | 20,538 |  |  | $ | 5,358 |  |  | $ | 25,896 |  |  | $ | 64,354 |  |  | $ | (47,806 | ) |  | $ | 16,548 |
Diluted: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Weighted average common shares outstanding |  |  | 64,467 |  |  |  | — |  |  |  | 64,467 |  |  |  | 66,042 |  |  |  | — |  |  |  | 66,042 |
Earnings (loss) per share from continuing operations |  | $ | 0.35 |  |  | $ | 0.08 |  |  | $ | 0.43 |  |  | $ | 1.02 |  |  | $ | (0.72 | ) |  | $ | 0.30 |
Earnings (loss) per share from discontinued operations |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (0.02 | ) |  |  | — |  |  |  | (0.02 | )
Earnings (loss) per share |  | $ | 0.35 |  |  | $ | 0.08 |  |  | $ | 0.43 |  |  | $ | 1.00 |  |  | $ | (0.72 | ) |  | $ | 0.28 |
Gross Margin Data (Continuing Operations): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
New retail vehicles |  |  | 6.2 | % |  |  |  |  |  |  | 6.2 | % |  |  | 6.5 | % |  |  |  |  |  |  | 6.5 | %
Fleet vehicles |  |  | 3.3 | % |  |  |  |  |  |  | 3.3 | % |  |  | 3.5 | % |  |  |  |  |  |  | 3.5 | %
Total new vehicles |  |  | 6.1 | % |  |  |  |  |  |  | 6.1 | % |  |  | 6.3 | % |  |  |  |  |  |  | 6.3 | %
Used vehicles |  |  | 7.1 | % |  |  |  |  |  |  | 7.1 | % |  |  | 7.3 | % |  |  |  |  |  |  | 7.3 | %
Wholesale vehicles |  |  | (2.2 | %) |  |  |  |  |  |  | (2.2 | %) |  |  | (2.7 | %) |  |  |  |  |  |  | (2.7 | %)
Parts, service and collision repair |  |  | 49.1 | % |  |  |  |  |  |  | 49.1 | % |  |  | 49.4 | % |  |  |  |  |  |  | 49.4 | %
Finance, insurance and other |  |  | 100.0 | % |  |  |  |  |  |  | 100.0 | % |  |  | 100.0 | % |  |  |  |  |  |  | 100.0 | %
Overall gross margin |  |  | 14.7 | % |  |  |  |  |  |  | 14.7 | % |  |  | 15.4 | % |  |  |  |  |  |  | 15.4 | %
SG&A Expenses (Continuing Operations): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Personnel |  | $ | 139,217 |  |  |  |  |  |  |  |  |  |  | $ | 130,467 |  |  |  |  |  |  |  |  |
Advertising |  |  | 12,114 |  |  |  |  |  |  |  |  |  |  |  | 10,463 |  |  |  |  |  |  |  |  |
Rent and rent related |  |  | 30,648 |  |  |  |  |  |  |  |  |  |  |  | 32,204 |  |  |  |  |  |  |  |  |
Other |  |  | 58,800 |  |  |  |  |  |  |  |  |  |  |  | 51,021 |  |  |  |  |  |  |  |  |
Total |  | $ | 240,779 |  |  | $ | (6,816 | ) |  | $ | 233,963 |  |  | $ | 224,155 |  |  | $ | — |  |  | $ | 224,155 |
SG&A Expenses as % of Gross Profit |  |  | 78.9 | % |  |  |  |  |  |  | 76.6 | % |  |  | 78.8 | % |  |  |  |  |  |  | 78.8 | %
Operating Margin % |  |  | 2.6 | % |  |  |  |  |  |  | 2.9 | % |  |  | 2.8 | % |  |  |  |  |  |  | 2.8 | %
Unit Data (Continuing Operations): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
New retail units |  |  | 30,928 |  |  |  |  |  |  |  |  |  |  |  | 27,011 |  |  |  |  |  |  |  |  |
Fleet units |  |  | 1,940 |  |  |  |  |  |  |  |  |  |  |  | 2,289 |  |  |  |  |  |  |  |  |
Total new units |  |  | 32,868 |  |  |  |  |  |  |  |  |  |  |  | 29,300 |  |  |  |  |  |  |  |  |
Used units |  |  | 23,880 |  |  |  |  |  |  |  |  |  |  |  | 21,429 |  |  |  |  |  |  |  |  |
Wholesale units |  |  | 7,304 |  |  |  |  |  |  |  |  |  |  |  | 6,501 |  |  |  |  |  |  |  |  |
Other Data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Continuing Operations revenue percentage changes: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
New retail vehicles |  |  | 16.2 | % |  |  |  |  |  |  |  |  |  |  | 20.2 | % |  |  |  |  |  |  |  |
Fleet vehicles |  |  | (12.0 | %) |  |  |  |  |  |  |  |  |  |  | 14.9 | % |  |  |  |  |  |  |  |
Total new vehicles |  |  | 14.6 | % |  |  |  |  |  |  |  |  |  |  | 19.9 | % |  |  |  |  |  |  |  |
Used vehicles |  |  | 11.6 | % |  |  |  |  |  |  |  |  |  |  | 18.2 | % |  |  |  |  |  |  |  |
Parts, service and collision repair |  |  | 2.5 | % |  |  |  |  |  |  |  |  |  |  | 8.0 | % |  |  |  |  |  |  |  |
Finance, insurance and other |  |  | 19.2 | % |  |  |  |  |  |  |  |  |  |  | 24.2 | % |  |  |  |  |  |  |  |
Total revenues |  |  | 12.2 | % |  |  |  |  |  |  |  |  |  |  | 17.0 | % |  |  |  |  |  |  |  |
Description of Adjustments: |  |  | 2011 |  |  |  |  |  |  |  | 2010 |  |  |  |  |  |  |  |  |  |  |  |  |
Continuing Operations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Lease exit adjustments and legal settlement charges |  | $ | 6,816 |  |  |  |  |  |  | $ | — |  |  |  |  |  |  |  |  |  |  |  |  |
Property impairment charges |  |  | 991 |  |  |  |  |  |  |  | 117 |  |  |  |  |  |  |  |  |  |  |  |  |
Cash-flow swap ineffectiveness and amortization |  |  | — |  |  |  |  |  |  |  | (519 | ) |  |  |  |  |  |  |  |  |  |  |  |
Total pre-tax adjustments |  | $ | 7,807 |  |  |  |  |  |  |  | (402 | ) |  |  |  |  |  |  |  |  |  |  |  |
Tax effect of above items |  |  | (2,733 | ) |  |  |  |  |  |  | 152 |  |  |  |  |  |  |  |  |  |  |  |  |
Valuation allowance recovery |  |  | — |  |  |  |  |  |  |  | (48,158 | ) |  |  |  |  |  |  |  |  |  |  |  |
Total adjustments |  | $ | 5,074 |  |  |  |  |  |  | $ | (48,408 | ) |  |  |  |  |  |  |  |  |  |  |  |
Discontinued Operations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Lease exit adjustments |  | $ | (798 | ) |  |  |  |  |  | $ | 859 |  |  |  |  |  |  |  |  |  |  |  |  |
Total pre-tax adjustments |  |  | (798 | ) |  |  |  |  |  |  | 859 |  |  |  |  |  |  |  |  |  |  |  |  |
Tax effect of above items |  |  | 1,082 |  |  |  |  |  |  |  | (257 | ) |  |  |  |  |  |  |  |  |  |  |  |
Total adjustments |  | $ | 284 |  |  |  |  |  |  | $ | 602 |  |  |  |  |  |  |  |  |  |  |  |  |

Sonic Automotive, Inc.

Results of Operations (Unaudited)

(In thousands, except per share, unit data and percentage amounts)

This release contains certain non-GAAP financial measures as defined under SEC rules, such as, but not limited to, adjusted income from continuing operations, related earnings per share data and adjusted EBITDA. The Company has reconciled these measures to the most directly comparable GAAP measures in the release. The Company believes that these non-GAAP financial measures improve the transparency of the Company’s disclosure by providing period-to-period comparability of the Company’s results from operations.

|  | Year Ended December 31, |  |  | Year Ended December 31, |
|  | 2011 As Reported |  |  | 2011 Adjustments |  |  | 2011 As Adjusted |  |  | 2010 As Reported |  |  | 2010 Adjustments |  |  | 2010 As Adjusted |
Revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
New retail vehicles |  | $ | 4,037,066 |  |  | $ | — |  |  | $ | 4,037,066 |  |  | $ | 3,438,988 |  |  | $ | — |  |  | $ | 3,438,988 |
Fleet vehicles |  |  | 223,204 |  |  |  | — |  |  |  | 223,204 |  |  |  | 207,212 |  |  |  | — |  |  |  | 207,212 |
Total new vehicles |  |  | 4,260,270 |  |  |  | — |  |  |  | 4,260,270 |  |  |  | 3,646,200 |  |  |  | — |  |  |  | 3,646,200 |
Used vehicles |  |  | 2,037,348 |  |  |  | — |  |  |  | 2,037,348 |  |  |  | 1,776,581 |  |  |  | — |  |  |  | 1,776,581 |
Wholesale vehicles |  |  | 173,569 |  |  |  | — |  |  |  | 173,569 |  |  |  | 149,041 |  |  |  | — |  |  |  | 149,041 |
Total vehicles |  |  | 6,471,187 |  |  |  | — |  |  |  | 6,471,187 |  |  |  | 5,571,822 |  |  |  | — |  |  |  | 5,571,822 |
Parts, service and collision repair |  |  | 1,181,643 |  |  |  | — |  |  |  | 1,181,643 |  |  |  | 1,128,054 |  |  |  | — |  |  |  | 1,128,054 |
Finance, insurance and other |  |  | 218,444 |  |  |  | — |  |  |  | 218,444 |  |  |  | 180,968 |  |  |  | — |  |  |  | 180,968 |
Total revenues |  |  | 7,871,274 |  |  |  | — |  |  |  | 7,871,274 |  |  |  | 6,880,844 |  |  |  | — |  |  |  | 6,880,844 |
Total gross profit |  |  | 1,209,119 |  |  |  | — |  |  |  | 1,209,119 |  |  |  | 1,114,678 |  |  |  | — |  |  |  | 1,114,678 |
Selling, general and administrative expenses |  |  | (952,436 | ) |  |  | 6,816 |  |  |  | (945,620 | ) |  |  | (896,697 | ) |  |  | 647 |  |  |  | (896,050 | )
Impairment charges |  |  | (1,151 | ) |  |  | 1,151 |  |  |  | — |  |  |  | (249 | ) |  |  | 249 |  |  |  | — |
Depreciation and amortization |  |  | (40,684 | ) |  |  | — |  |  |  | (40,684 | ) |  |  | (35,110 | ) |  |  | — |  |  |  | (35,110 | )
Operating income (loss) |  |  | 214,848 |  |  |  | 7,967 |  |  |  | 222,815 |  |  |  | 182,622 |  |  |  | 896 |  |  |  | 183,518 |
Interest expense, floor plan |  |  | (19,639 | ) |  |  | — |  |  |  | (19,639 | ) |  |  | (21,536 | ) |  |  | — |  |  |  | (21,536 | )
Interest expense, other, net |  |  | (60,682 | ) |  |  | — |  |  |  | (60,682 | ) |  |  | (63,343 | ) |  |  | 1,464 |  |  |  | (61,879 | )
Interest expense, non-cash, convertible debt |  |  | (6,724 | ) |  |  | — |  |  |  | (6,724 | ) |  |  | (6,914 | ) |  |  | — |  |  |  | (6,914 | )
Interest expense / amortization, non-cash, cash flow swaps |  |  | (760 | ) |  |  | — |  |  |  | (760 | ) |  |  | (4,883 | ) |  |  | 4,883 |  |  |  | — |
Other income (expense), net |  |  | (1,014 | ) |  |  | — |  |  |  | (1,014 | ) |  |  | (7,525 | ) |  |  | 7,665 |  |  |  | 140 |
Income (loss) from continuing operations before taxes |  |  | 126,029 |  |  |  | 7,967 |  |  |  | 133,996 |  |  |  | 78,421 |  |  |  | 14,908 |  |  |  | 93,329 |
Provision for income taxes - benefit (expense) |  |  | (48,382 | ) |  |  | (3,059 | ) |  |  | (51,441 | ) |  |  | 17,504 |  |  |  | (53,985 | ) |  |  | (36,481 | )
Income (loss) from continuing operations |  |  | 77,647 |  |  |  | 4,908 |  |  |  | 82,555 |  |  |  | 95,925 |  |  |  | (39,077 | ) |  |  | 56,848 |
Income (loss) from discontinued operations |  |  | (1,393 | ) |  |  | (387 | ) |  |  | (1,780 | ) |  |  | (5,996 | ) |  |  | 625 |  |  |  | (5,371 | )
Net income (loss) |  | $ | 76,254 |  |  | $ | 4,521 |  |  | $ | 80,775 |  |  | $ | 89,929 |  |  | $ | (38,452 | ) |  | $ | 51,477 |
Diluted: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Weighted average common shares outstanding |  |  | 65,464 |  |  |  | — |  |  |  | 65,464 |  |  |  | 65,794 |  |  |  | — |  |  |  | 65,794 |
Earnings (loss) per share from continuing operations |  | $ | 1.31 |  |  | $ | 0.08 |  |  | $ | 1.39 |  |  | $ | 1.58 |  |  | $ | (0.59 | ) |  | $ | 0.99 |
Earnings (loss) per share from discontinued operations |  |  | (0.02 | ) |  |  | (0.01 | ) |  |  | (0.03 | ) |  |  | (0.09 | ) |  |  | 0.01 |  |  |  | (0.08 | )
Earnings (loss) per share |  | $ | 1.29 |  |  | $ | 0.07 |  |  | $ | 1.36 |  |  | $ | 1.49 |  |  | $ | (0.58 | ) |  | $ | 0.91 |
Gross Margin Data (Continuing Operations): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
New retail vehicles |  |  | 6.5 | % |  |  |  |  |  |  | 6.5 | % |  |  | 6.7 | % |  |  |  |  |  |  | 6.7 | %
Fleet vehicles |  |  | 3.2 | % |  |  |  |  |  |  | 3.2 | % |  |  | 3.0 | % |  |  |  |  |  |  | 3.0 | %
Total new vehicles |  |  | 6.3 | % |  |  |  |  |  |  | 6.3 | % |  |  | 6.5 | % |  |  |  |  |  |  | 6.5 | %
Used vehicles |  |  | 7.2 | % |  |  |  |  |  |  | 7.2 | % |  |  | 7.9 | % |  |  |  |  |  |  | 7.9 | %
Wholesale vehicles |  |  | (3.3 | %) |  |  |  |  |  |  | (3.3 | %) |  |  | (3.4 | %) |  |  |  |  |  |  | (3.4 | %)
Parts, service and collision repair |  |  | 49.1 | % |  |  |  |  |  |  | 49.1 | % |  |  | 49.8 | % |  |  |  |  |  |  | 49.8 | %
Finance, insurance and other |  |  | 100.0 | % |  |  |  |  |  |  | 100.0 | % |  |  | 100.0 | % |  |  |  |  |  |  | 100.0 | %
Overall gross margin |  |  | 15.4 | % |  |  |  |  |  |  | 15.4 | % |  |  | 16.2 | % |  |  |  |  |  |  | 16.2 | %
SG&A Expenses (Continuing Operations): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Personnel |  | $ | 554,378 |  |  |  |  |  |  |  |  |  |  | $ | 524,972 |  |  |  |  |  |  |  |  |
Advertising |  |  | 53,311 |  |  |  |  |  |  |  |  |  |  |  | 46,908 |  |  |  |  |  |  |  |  |
Rent and rent related |  |  | 124,917 |  |  |  |  |  |  |  |  |  |  |  | 129,354 |  |  |  |  |  |  |  |  |
Other |  |  | 219,830 |  |  |  |  |  |  |  |  |  |  |  | 195,463 |  |  |  |  |  |  |  |  |
Total |  | $ | 952,436 |  |  | $ | (6,816 | ) |  | $ | 945,620 |  |  | $ | 896,697 |  |  | $ | (647 | ) |  | $ | 896,050 |
SG&A Expenses as % of Gross Profit |  |  | 78.8 | % |  |  |  |  |  |  | 78.2 | % |  |  | 80.4 | % |  |  |  |  |  |  | 80.4 | %
Operating Margin % |  |  | 2.7 | % |  |  |  |  |  |  | 2.8 | % |  |  | 2.7 | % |  |  |  |  |  |  | 2.7 | %
Unit Data (Continuing Operations): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
New retail units |  |  | 114,132 |  |  |  |  |  |  |  |  |  |  |  | 98,820 |  |  |  |  |  |  |  |  |
Fleet units |  |  | 8,626 |  |  |  |  |  |  |  |  |  |  |  | 8,331 |  |  |  |  |  |  |  |  |
Total new units |  |  | 122,758 |  |  |  |  |  |  |  |  |  |  |  | 107,151 |  |  |  |  |  |  |  |  |
Used units |  |  | 102,874 |  |  |  |  |  |  |  |  |  |  |  | 90,290 |  |  |  |  |  |  |  |  |
Wholesale units |  |  | 26,630 |  |  |  |  |  |  |  |  |  |  |  | 24,128 |  |  |  |  |  |  |  |  |
Other Data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Continuing Operations revenue percentage changes: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
New retail vehicles |  |  | 17.4 | % |  |  |  |  |  |  |  |  |  |  | 14.1 | % |  |  |  |  |  |  |  |
Fleet vehicles |  |  | 7.7 | % |  |  |  |  |  |  |  |  |  |  | (3.6 | %) |  |  |  |  |  |  |  |
Total new vehicles |  |  | 16.8 | % |  |  |  |  |  |  |  |  |  |  | 12.9 | % |  |  |  |  |  |  |  |
Used vehicles |  |  | 14.7 | % |  |  |  |  |  |  |  |  |  |  | 22.4 | % |  |  |  |  |  |  |  |
Parts, service and collision repair |  |  | 4.8 | % |  |  |  |  |  |  |  |  |  |  | 5.2 | % |  |  |  |  |  |  |  |
Finance, insurance and other |  |  | 20.7 | % |  |  |  |  |  |  |  |  |  |  | 17.0 | % |  |  |  |  |  |  |  |
Total revenues |  |  | 14.4 | % |  |  |  |  |  |  |  |  |  |  | 13.6 | % |  |  |  |  |  |  |  |
Description of Adjustments: |  |  | 2011 |  |  |  |  |  |  |  | 2010 |  |  |  |  |  |  |  |  |  |  |  |  |
Continuing Operations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Hail storm related expenses |  | $ | — |  |  |  |  |  |  | $ | 647 |  |  |  |  |  |  |  |  |  |  |  |  |
Lease exit adjustments and legal settlement charges |  |  | 6,816 |  |  |  |  |  |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |
Property impairment charges |  |  | 1,151 |  |  |  |  |  |  |  | 249 |  |  |  |  |  |  |  |  |  |  |  |  |
Cash-flow swap ineffectiveness and amortization |  |  | — |  |  |  |  |  |  |  | 4,883 |  |  |  |  |  |  |  |  |  |  |  |  |
Debt restructuring charges |  |  | — |  |  |  |  |  |  |  | 1,464 |  |  |  |  |  |  |  |  |  |  |  |  |
Loss on debt extinguishment |  |  | — |  |  |  |  |  |  |  | 7,665 |  |  |  |  |  |  |  |  |  |  |  |  |
Total pre-tax adjustments |  | $ | 7,967 |  |  |  |  |  |  | $ | 14,908 |  |  |  |  |  |  |  |  |  |  |  |  |
Tax effect of above items |  |  | (3,059 | ) |  |  |  |  |  |  | (5,827 | ) |  |  |  |  |  |  |  |  |  |  |  |
Valuation allowance recovery |  |  | — |  |  |  |  |  |  |  | (48,158 | ) |  |  |  |  |  |  |  |  |  |  |  |
Total adjustments |  | $ | 4,908 |  |  |  |  |  |  | $ | (39,077 | ) |  |  |  |  |  |  |  |  |  |  |  |
Discontinued Operations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Lease exit adjustments |  | $ | (798 | ) |  |  |  |  |  | $ | 859 |  |  |  |  |  |  |  |  |  |  |  |  |
Total pre-tax adjustments |  | $ | (798 | ) |  |  |  |  |  | $ | 859 |  |  |  |  |  |  |  |  |  |  |  |  |
Tax effect of above items |  |  | 411 |  |  |  |  |  |  |  | (234 | ) |  |  |  |  |  |  |  |  |  |  |  |
Total adjustments |  | $ | (387 | ) |  |  |  |  |  | $ | 625 |  |  |  |  |  |  |  |  |  |  |  |  |

Sonic Automotive, Inc.

Earnings Per Share Reconciliation (Unaudited)

(In thousands, except per share data)

|  | Three Months Ended December 31, 2011 |
|  |  |  |  | Income From Continuing Operations |  |  | Loss From Discontinued Operations |  |  | Net Income |
As Reported: |  | Weighted Average Shares |  |  | Amount |  |  | Per Share Amount |  |  | Amount |  |  | Per Share Amount |  |  | Amount |  |  | Per Share Amount |
Earnings (loss) and shares |  |  | 52,194 |  |  | $ | 20,371 |  |  |  |  |  |  | $ | 167 |  |  |  |  |  |  | $ | 20,538 |  |  |  |  |
Effect of participating securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-vested restricted stock and stock units |  |  | — |  |  |  | (266 | ) |  |  |  |  |  |  | — |  |  |  |  |  |  |  | (266 | ) |  |  |  |
Basic earnings (loss) and shares |  |  | 52,194 |  |  | $ | 20,105 |  |  | $ | 0.39 |  |  | $ | 167 |  |  | $ | — |  |  | $ | 20,272 |  |  | $ | 0.39 |
Effect of dilutive securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingently convertible debt (5.0% Convertible Notes) |  |  | 11,713 |  |  |  | 2,330 |  |  |  |  |  |  |  | — |  |  |  |  |  |  |  | 2,330 |  |  |  |  |
Stock compensation plans |  |  | 560 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Diluted earnings (loss) and shares |  |  | 64,467 |  |  | $ | 22,435 |  |  | $ | 0.35 |  |  | $ | 167 |  |  | $ | — |  |  | $ | 22,602 |  |  | $ | 0.35 |
Adjustments (net of tax): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Lease exit adjustments and legal settlement charges |  |  |  |  |  | $ | 4,430 |  |  | $ | 0.07 |  |  | $ | 284 |  |  | $ | — |  |  | $ | 4,714 |  |  | $ | 0.07 |
Property impairment charges |  |  |  |  |  |  | 644 |  |  |  | 0.01 |  |  |  | — |  |  |  | — |  |  |  | 644 |  |  |  | 0.01 |
Total adjustments |  |  |  |  |  | $ | 5,074 |  |  | $ | 0.08 |  |  | $ | 284 |  |  | $ | — |  |  | $ | 5,358 |  |  | $ | 0.08 |
Adjusted: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Diluted earnings (loss) per share |  |  |  |  |  |  |  |  |  | $ | 0.43 |  |  |  |  |  |  | $ | — |  |  |  |  |  |  | $ | 0.43 |
|  | Three Months Ended December 31, 2010 |
|  |  |  |  | Income From Continuing Operations |  |  | Loss From Discontinued Operations |  |  | Net Income |
As Reported: |  | Weighted Average Shares |  |  | Amount |  |  | Per Share Amount |  |  | Amount |  |  | Per Share Amount |  |  | Amount |  |  | Per Share Amount |
Earnings (loss) and shares |  |  | 52,401 |  |  | $ | 65,818 |  |  |  |  |  |  | $ | (1,464 | ) |  |  |  |  |  | $ | 64,354 |  |  |  |  |
Effect of participating securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-vested restricted stock and stock units |  |  | — |  |  |  | (630 | ) |  |  |  |  |  |  | — |  |  |  |  |  |  |  | (630 | ) |  |  |  |
Basic earnings (loss) and shares |  |  | 52,401 |  |  | $ | 65,188 |  |  | $ | 1.24 |  |  | $ | (1,464 | ) |  | $ | (0.02 | ) |  | $ | 63,724 |  |  | $ | 1.22 |
Effect of dilutive securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingently convertible debt (5.0% Convertible Notes) |  |  | 12,890 |  |  |  | 2,313 |  |  |  |  |  |  |  | 3 |  |  |  |  |  |  |  | 2,316 |  |  |  |  |
Stock compensation plans |  |  | 751 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Diluted earnings (loss) and shares |  |  | 66,042 |  |  | $ | 67,501 |  |  | $ | 1.02 |  |  | $ | (1,461 | ) |  | $ | (0.02 | ) |  | $ | 66,040 |  |  | $ | 1.00 |
Adjustments (net of tax): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property impairment charges |  |  |  |  |  | $ | 73 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 73 |  |  | $ | — |
Cash-flow swap ineffectiveness and amortization |  |  |  |  |  |  | (323 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (323 | ) |  |  | — |
Lease exit adjustments |  |  |  |  |  |  | — |  |  |  | — |  |  |  | 602 |  |  |  | — |  |  |  | 602 |  |  |  | — |
Valuation allowance recovery |  |  |  |  |  |  | (48,158 | ) |  |  | (0.72 | ) |  |  | — |  |  |  | — |  |  |  | (48,158 | ) |  |  | (0.72 | )
Total adjustments |  |  |  |  |  | $ | (48,408 | ) |  | $ | (0.72 | ) |  | $ | 602 |  |  | $ | — |  |  | $ | (47,806 | ) |  | $ | (0.72 | )
Adjusted: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Diluted earnings (loss) per share |  |  |  |  |  |  |  |  |  | $ | 0.30 |  |  |  |  |  |  | $ | (0.02 | ) |  |  |  |  |  | $ | 0.28 |

Sonic Automotive, Inc.

Earnings Per Share Reconciliation (Unaudited)

(In thousands, except per share data)

|  | Year Ended December 31, 2011 |
|  |  |  |  | Income From Continuing Operations |  |  | Loss From Discontinued Operations |  |  | Net Income |
As Reported: |  | Weighted Average Shares |  |  | Amount |  |  | Per Share Amount |  |  | Amount |  |  | Per Share Amount |  |  | Amount |  |  | Per Share Amount |
Earnings (loss) and shares |  |  | 52,358 |  |  | $ | 77,647 |  |  |  |  |  |  | $ | (1,393 | ) |  |  |  |  |  | $ | 76,254 |  |  |  |  |
Effect of participating securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-vested restricted stock and stock units |  |  | — |  |  |  | (958 | ) |  |  |  |  |  |  | — |  |  |  |  |  |  |  | (958 | ) |  |  |  |
Basic earnings (loss) and shares |  |  | 52,358 |  |  | $ | 76,689 |  |  | $ | 1.46 |  |  | $ | (1,393 | ) |  | $ | (0.02 | ) |  | $ | 75,296 |  |  | $ | 1.44 |
Effect of dilutive securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingently convertible debt (5.0% Convertible Notes) |  |  | 12,517 |  |  |  | 9,300 |  |  |  |  |  |  |  | — |  |  |  |  |  |  |  | 9,300 |  |  |  |  |
Stock compensation plans |  |  | 589 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Diluted earnings (loss) and shares |  |  | 65,464 |  |  | $ | 85,989 |  |  | $ | 1.31 |  |  | $ | (1,393 | ) |  | $ | (0.02 | ) |  | $ | 84,596 |  |  | $ | 1.29 |
Adjustments (net of tax): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Lease exit adjustments and legal settlement charges |  |  |  |  |  | $ | 4,199 |  |  | $ | 0.07 |  |  | $ | (387 | ) |  | $ | (0.01 | ) |  | $ | 3,812 |  |  | $ | 0.06 |
Property impairment charges |  |  |  |  |  |  | 709 |  |  |  | 0.01 |  |  |  | — |  |  |  | — |  |  |  | 709 |  |  |  | 0.01 |
Total adjustments |  |  |  |  |  | $ | 4,908 |  |  | $ | 0.08 |  |  | $ | (387 | ) |  | $ | (0.01 | ) |  | $ | 4,521 |  |  | $ | 0.07 |
Adjusted: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Diluted earnings (loss) per share |  |  |  |  |  |  |  |  |  | $ | 1.39 |  |  |  |  |  |  | $ | (0.03 | ) |  |  |  |  |  | $ | 1.36 |
|  | Year Ended December 31, 2010 |
|  |  |  |  | Income From Continuing Operations |  |  | Loss From Discontinued Operations |  |  | Net Income |
As Reported: |  | Weighted Average Shares |  |  | Amount |  |  | Per Share Amount |  |  | Amount |  |  | Per Share Amount |  |  | Amount |  |  | Per Share Amount |
Earnings (loss) and shares |  |  | 52,214 |  |  | $ | 95,925 |  |  |  |  |  |  | $ | (5,996 | ) |  |  |  |  |  | $ | 89,929 |  |  |  |  |
Effect of participating securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-vested restricted stock and stock units |  |  | — |  |  |  | (921 | ) |  |  |  |  |  |  | — |  |  |  |  |  |  |  | (921 | ) |  |  |  |
Basic earnings (loss) and shares |  |  | 52,214 |  |  | $ | 95,004 |  |  | $ | 1.82 |  |  | $ | (5,996 | ) |  | $ | (0.12 | ) |  | $ | 89,008 |  |  | $ | 1.70 |
Effect of dilutive securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingently convertible debt (5.0% Convertible Notes) |  |  | 12,890 |  |  |  | 9,022 |  |  |  |  |  |  |  | 31 |  |  |  |  |  |  |  | 9,053 |  |  |  |  |
Stock compensation plans |  |  | 690 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Diluted earnings (loss) and shares |  |  | 65,794 |  |  | $ | 104,026 |  |  | $ | 1.58 |  |  | $ | (5,965 | ) |  | $ | (0.09 | ) |  | $ | 98,061 |  |  | $ | 1.49 |
Adjustments (net of tax): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Hail storm related expenses |  |  |  |  |  | $ | 394 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 394 |  |  | $ | — |
Property impairment charges |  |  |  |  |  |  | 152 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 152 |  |  |  | — |
Cash-flow swap ineffectiveness and amortization |  |  |  |  |  |  | 2,974 |  |  |  | 0.05 |  |  |  | — |  |  |  | — |  |  |  | 2,974 |  |  |  | 0.05 |
Debt restructuring charges |  |  |  |  |  |  | 892 |  |  |  | 0.01 |  |  |  | — |  |  |  | — |  |  |  | 892 |  |  |  | 0.01 |
Loss on debt extinguishment |  |  |  |  |  |  | 4,669 |  |  |  | 0.07 |  |  |  | — |  |  |  | — |  |  |  | 4,669 |  |  |  | 0.07 |
Lease exit adjustments |  |  |  |  |  |  | — |  |  |  | — |  |  |  | 625 |  |  |  | 0.01 |  |  |  | 625 |  |  |  | 0.01 |
Valuation allowance recovery |  |  |  |  |  |  | (48,158 | ) |  |  | (0.72 | ) |  |  | — |  |  |  | — |  |  |  | (48,158 | ) |  |  | (0.72 | )
Total adjustments |  |  |  |  |  | $ | (39,077 | ) |  | $ | (0.59 | ) |  | $ | 625 |  |  | $ | 0.01 |  |  | $ | (38,452 | ) |  | $ | (0.58 | )
Adjusted: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Diluted earnings (loss) per share |  |  |  |  |  |  |  |  |  | $ | 0.99 |  |  |  |  |  |  | $ | (0.08 | ) |  |  |  |  |  | $ | 0.91 |