EX-99.2 3 d307598dex992.htm EXHIBIT 99.2

Sonic Automotive, Inc. 1 1 Q4 Earnings Review February 28, 2012 Q4 Earnings Review February 28, 2012 Exhibit 99.2

Sonic Automotive, Inc. 2 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 business, the economy and other future conditions. These statements can generally be identified by lead-in words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “foresee”, “may” ,”will” and other similar words. Statements that describe our Company’s objectives, plans or goals are also forward- looking statements. Examples of such forward-looking information we may be discussing in this presentation include, without limitation, further implementation of our operational strategies and playbooks, future debt retirement, capital expenditures, operating margins and revenues, inventory levels and new vehicle industry sales volume. You are cautioned that these forward-looking statements are not guarantees of future performance, involve risks and uncertainties and actual results may differ materially from those projected in the forward-looking statements as a result of various factors. These risks and uncertainties include, among other things, (a) economic conditions in the markets in which we operate, (b) the success of our operational strategies, (c) our relationships with the automobile manufacturers and (d) new and pre-owned vehicle sales volume. These risks and uncertainties, as well as additional factors that could affect our forward-looking statements, are described in our Form 10-K for the year ending December 31, 2010 and our Form 10-Q for period ended September 30, 2011. These forward-looking statements, risks, uncertainties and additional factors speak only as of the date of this presentation. We undertake no obligation to update any such statements.

Sonic Automotive, Inc. 3 3 Sonic Automotive Q4 2011 Sonic Automotive Q4 2011 o Quarter in Review o Financial Results o Operations Recap o Summary and Outlook o Quarter in Review o Financial Results o Operations Recap o Summary and Outlook

Sonic Automotive, Inc. 4 4 Overall Results Overall Results Strong revenue growth – up 12% New vehicle revenue up 15% - volume up 12% - exceeds industry growth Pre-owned revenue up 12% F&I revenue up 19% Fixed Operations revenue up 2% Adjusted SG&A to gross declined to 76.6% (1) Adjusted income from continuing operations up $8M or 46% (1) Adjusted Q4 2011 diluted EPS from continuing operations was $0.43 per share vs $0.30 in prior year period (1) Strong revenue growth – up 12% New vehicle revenue up 15% - volume up 12% - exceeds industry growth Pre-owned revenue up 12% F&I revenue up 19% Fixed Operations revenue up 2% Adjusted SG&A to gross declined to 76.6% (1) Adjusted income from continuing operations up $8M or 46% (1) Adjusted Q4 2011 diluted EPS from continuing operations was $0.43 per share vs $0.30 in prior year period (1) (1) – See appendix for reconciliation to GAAP amounts . (1) – See appendix for reconciliation to GAAP amounts .

Sonic Automotive, Inc. Adjusted Q4 and Full Year Results (1) Adjusted Q4 and Full Year Results (1) B/(W) than Q4 2010 B/(W) than FY 2010 (amounts in millions, except per share data) Q4 2011 $ % 2011 $ % Revenue $ 2,071 $ 226 12% $ 7,871 $ 990 14% Gross Profit $ 305 $ 21 7% $ 1,209 $ 94 9% Operating Profit (1) $ 61 $ 10 19% $ 223 $ 39 21% Continuing Ops: Profit (after tax) (1) $ 25 $ 8 46% $ 83 $ 26 45% Diluted EPS (1) $ 0.43 $ 0.13 43% $ 1.39 $ 0.40 40% 5 5 ` (1) – See appendix for reconciliation to GAAP amounts.

Sonic Automotive, Inc. SG&A to Gross (1) SG&A to Gross (1) 220 bps improvement in both periods Q4 2010 Q4 2011 FY 2010 FY 2011 (1) – See appendix for reconciliation to GAAP amounts.

Sonic Automotive, Inc. Capital Spending Capital Spending 7 7 (amounts in millions) YTD Q4 2011 Estimated 2012 Real Estate Acquisitions $ 91.4 $ 14.5 All Other Cap Ex 67.3 118.9 Subtotal $ 158.7 $ 133.4 Less: Mortgage Funding (54.4) (33.5) Total Cash Used – Cap Ex $ 104.3 $ 99.9

Sonic Automotive, Inc. 8 8 Debt Covenants Debt Covenants Covenant Actual Q4 2011 Memo: March 2012 Covenant Liquidity Ratio >= 1.05 1.13 >= 1.10 Fixed Charge Coverage Ratio >= 1.15 1.65 >= 1.20 Total Lease Adjusted Leverage Ratio <= 5.50 4.02 <= 5.50 Compliant with all Covenants

Sonic Automotive, Inc. New Vehicles New Vehicles Q4 2011 Q4 2010 B/(W) Retail Volume 30,928 27,011 14.5% Total Volume (including fleet) 32,868 29,300 12.2% Selling Price $ 36,074 $ 35,297 2.2% Gross Margin % 6.1% 6.3% (20 bps) GPU $ 2,189 $ 2,225 ($ 35) Gross Profit $ 72 million $ 65 million 10.4% 9 9

Sonic Automotive, Inc. Pre-Owned Retail Vehicles Pre-Owned Retail Vehicles Q4 2011 Q4 2010 B/(W) Retail Volume 23,880 21,429 11.4% Pre-Owned Related Gross* $ 73 million $ 66 million $ 7 million Pre-Owned to New Ratio .77 to 1 .79 to 1 10 10 * - Includes: pre-owned gross + pre-owned reconditioning gross + pre-owned F&I gross 11 Consecutive Quarters of Double-Digit Volume Growth

Sonic Automotive, Inc. Pre-Owned Retail Vehicle Units Pre-Owned Retail Vehicle Units 11 -Average Sold / Month / Store Compounded Annual Growth Rate (CAGR): Since 2008 – 15.2% Since 2006 – 11.0%

Sonic Automotive, Inc. Fixed Operations Fixed Operations Revenue Gross Profit 12 12 Customer Pay gross up 4% Overall gross profit up 2% despite lower warranty activity

Sonic Automotive, Inc. Fixed Operations Revenue Fixed Operations Revenue 13 (Amounts in millions) • Revenue grew $34 million on average each year over the last five years • Revenue growth in four of the last five years

Sonic Automotive, Inc. 14 Summary Summary Automotive retail industry continues its recovery SAAR rose steadily throughout 2011 Base business continues to grow New vehicle market share continues to increase Pre-Owned retail vehicle volume continues to grow at double-digit rate F&I and fixed operations are benefiting from higher levels of retail activity Investment in technology will continue Automotive retail industry continues its recovery SAAR rose steadily throughout 2011 Base business continues to grow New vehicle market share continues to increase Pre-Owned retail vehicle volume continues to grow at double-digit rate F&I and fixed operations are benefiting from higher levels of retail activity Investment in technology will continue

Sonic Automotive, Inc. 2012 Outlook 2012 Outlook • Expect New Vehicle SAAR of 13.5 Million • Pre-Owned Vehicle Growth in High Single Digits • Property Purchases to Continue • Expect SG&A to be Below 78% • Targeting 2012 Diluted EPS from Continuing Operations of $1.55 - $1.65 • Expect New Vehicle SAAR of 13.5 Million • Pre-Owned Vehicle Growth in High Single Digits • Property Purchases to Continue • Expect SG&A to be Below 78% • Targeting 2012 Diluted EPS from Continuing Operations of $1.55 - $1.65 15 15

Sonic Automotive, Inc. 16 16

Sonic Automotive, Inc. 17 17 Reconciliation of Non-GAAP Financial Information Three Months Ended December 31, Adjusted 2011 B/(W) 2011 2010 than Adjusted 2010 ($ in millions, shares in thousands, except per share data) As Reported Adjustments As Adjusted As Reported Adjustments As Adjusted $ % Revenues 2,070.8 $ - $ 2,070.8 $ 1,844.9 $ - $ 1,844.9 $ 225.9 $ 12.2% Gross profit 305.3 - 305.3 284.5 - 284.5 20.8 7.3% Gross margin 14.7% 14.7% 15.4% 15.4% (70) bps SG&A (240.8) 6.8 (234.0) (224.2) - (224.2) (9.8) 4.4% SG&A as % of gross profit 78.9% 76.6% 78.8% 78.8% 220 bps Impairment charges (1.0) 1.0 - (0.1) 0.1 - - - Depreciation and amortization (10.6) - (10.6) (9.3) - (9.3) (1.3) 14.0% Operating income 52.9 7.8 60.7 50.9 0.1 51.0 9.7 19.0% Operating margin 2.6% 2.9% 2.8% 2.8% (10) bps Interest expense, floor plan (4.9) - (4.9) (5.9) - (5.9) 1.0 (16.9%) Interest expense, other, net (14.7) - (14.7) (15.3) - (15.3) 0.6 (3.9%) Interest expense, non-cash (1.7) - (1.7) (1.2) (0.5) (1.7) - - Other income (expense), net (0.3) - (0.3) - - - (0.3) - Income (loss) from continuing operations 20.4 5.0 (1) 25.4 65.8 (48.4) (2) 17.4 8.0 46.0% Income (loss) from discontinued operations 0.1 0.4 (1) 0.5 (1.4) 0.5 (2) (0.9) 1.4 (155.6%) Net income (loss) 20.5 $ 5.4 $ 25.9 $ 64.4 $ (47.9) $ 16.5 $ 9.4 $ 57.0% Diluted earnings (loss) per common share: Earnings (loss) per share from continuing operations 0.35 $ 0.08 $ 0.43 $ 1.02 $ (0.72) $ 0.30 $ 0.13 $ 43.3% Earnings (loss) per share from discontinued operations - - - (0.02) - (0.02) 0.02 (100.0%) Earnings (loss) per common share 0.35 $ 0.08 $ 0.43 $ 1.00 $ (0.72) $ 0.28 $ 0.15 $ 53.6% Weighted average shares outstanding 64,467 64,467 66,042 66,042 (1) Represents tax-effected amounts related to lease exit adjustments, legal settlement charges, and property impairment charges. (2) Represents tax-effected amounts related to lease exit adjustments, property impairment charges, interest rate swaps and tax items.

Sonic Automotive, Inc. 18 18 Reconciliation of Non-GAAP Financial Information Year Ended December 31, Adjusted 2011 B/(W) 2011 2010 than Adjusted 2010 ($ in millions, shares in thousands, except per share data) As Reported Adjustments As Adjusted As Reported Adjustments As Adjusted $ % Revenues 7,871.3 $ - $ 7,871.3 $ 6,880.8 $ - $ 6,880.8 $ 990.5 $ 14.4% Gross profit 1,209.1 - 1,209.1 1,114.7 - 1,114.7 94.4 8.5% Gross margin 15.4% 15.4% 16.2% 16.2% (80) bps SG&A (952.4) 6.8 (945.6) (896.7) 0.7 (896.0) (49.6) 5.5% SG&A as % of gross profit 78.8% 78.2% 80.4% 80.4% 220 bps Impairment charges (1.2) 1.2 - (0.2) 0.2 - - - Depreciation and amortization (40.7) - (40.7) (35.2) - (35.2) (5.5) 15.6% Operating income 214.8 8.0 222.8 182.6 0.9 183.5 39.3 21.4% Operating margin 2.7% 2.8% 2.7% 2.7% (10) bps Interest expense, floor plan (19.6) - (19.6) (21.5) - (21.5) 1.9 (8.8%) Interest expense, other, net (60.7) - (60.7) (63.3) 1.5 (61.8) 1.1 (1.8%) Interest expense, non-cash (7.5) - (7.5) (11.8) 4.9 (6.9) (0.6) 8.7% Other income (expense), net (1.0) - (1.0) (7.5) 7.7 0.2 (1.2) (600.0%) Income (loss) from continuing operations 77.6 5.0 (1) 82.6 95.9 (39.1) (2) 56.8 25.8 45.4% Income (loss) from discontinued operations (1.3) (0.5) (1) (1.8) (6.0) 0.7 (2) (5.3) 3.5 (66.0%) Net income (loss) 76.3 $ 4.5 $ 80.8 $ 89.9 $ (38.4) $ 51.5 $ 29.3 $ 56.9% Diluted earnings (loss) per common share: Earnings (loss) per share from continuing operations 1.31 $ 0.08 $ 1.39 $ 1.58 $ (0.59) $ 0.99 $ 0.40 $ 40.4% Earnings (loss) per share from discontinued operations (0.02) (0.01) (0.03) (0.09) 0.01 (0.08) 0.05 (62.5%) Earnings (loss) per common share 1.29 $ 0.07 $ 1.36 $ 1.49 $ (0.58) $ 0.91 $ 0.45 $ 49.5% Weighted average shares outstanding 65,464 65,464 65,794 65,794 (1) Represents tax-effected amounts related to lease exit adjustments, legal settlement charges, and property impairment charges. (2) Represents tax-effected amounts related to hail damage, lease exit adjustments, property impairment charges, interest rate swaps, debt restructuring and tax items.

Sonic Automotive, Inc. 19 19 Reconciliation of Non-GAAP Financial Information Three Months Ended December 31, 2011 Continuing Operations Discontinued Operations Total Operations ($ in millions, shares in thousands, except per share data) Net Income (Loss): Numerator Share Count: Denominator Diluted EPS Net Income (Loss): Numerator Share Count: Denominator Diluted EPS Net Income (Loss): Numerator Share Count: Denominator Diluted EPS Reported basic 20.4 $ 52,194 0.1 $ 52,194 20.5 $ 52,194 Effect of dilutive securities: Two class method (0.3) - - - (0.3) - Contingently convertible debt 2.3 11,713 - 11,713 2.3 11,713 Stock compensation plans - 560 - 560 - 560 Reported diluted 22.4 64,467 0.35 $ 0.1 64,467 - $ 22.5 64,467 0.35 $ Adjustments (tax-effected): Lease exit adjustments and legal settlement charges 4.4 - 0.3 - 4.7 - Property impairment charges 0.6 - - - 0.6 - Subtotal 27.4 64,467 0.43 $ 0.4 64,467 - $ 27.8 64,467 0.43 $ Effect of dilutive securities: Two class method - - - - - - Adjusted diluted 27.4 $ 64,467 0.43 $ 0.4 $ 64,467 - $ 27.8 $ 64,467 0.43 $

Sonic Automotive, Inc. 20 20 Reconciliation of Non-GAAP Financial Information Three Months Ended December 31, 2010 Continuing Operations Discontinued Operations Total Operations ($ in millions, shares in thousands, except per share data) Net Income (Loss): Numerator Share Count: Denominator Diluted EPS Net Income (Loss): Numerator Share Count: Denominator Diluted EPS Net Income (Loss): Numerator Share Count: Denominator Diluted EPS Reported basic 65.8 $ 52,401 (1.4) $ 52,401 64.4 $ 52,401 Effect of dilutive securities: Two class method (0.6) - - - (0.6) - Contingently convertible debt 2.3 12,890 - 12,890 2.3 12,890 Stock compensation plans - 751 - 751 - 751 Reported diluted 67.5 66,042 1.02 $ (1.4) 66,042 (0.02) $ 66.1 66,042 1.00 $ Adjustments (tax-effected): Property impairment charges 0.1 - - - 0.1 - Interest rate swaps (0.3) - - - (0.3) - Lease exit adjustments - - 0.6 - 0.6 - Tax items (48.2) - - - (48.2) - Subtotal 19.1 66,042 0.29 $ (0.8) 66,042 (0.01) $ 18.3 66,042 0.28 $ Effect of dilutive securities: Two class method 0.5 - (0.5) - - - Adjusted diluted 19.6 $ 66,042 0.30 $ (1.3) $ 66,042 (0.02) $ 18.3 $ 66,042 0.28 $

Sonic Automotive, Inc. 21 21 Reconciliation of Non-GAAP Financial Information Year Ended December 31, 2011 Continuing Operations Discontinued Operations Total Operations ($ in millions, shares in thousands, except per share data) Net Income (Loss): Numerator Share Count: Denominator Diluted EPS Net Income (Loss): Numerator Share Count: Denominator Diluted EPS Net Income (Loss): Numerator Share Count: Denominator Diluted EPS Reported basic 77.6 $ 52,358 (1.3) $ 52,358 76.3 $ 52,358 Effect of dilutive securities: Two class method (0.9) - - - (0.9) - Contingently convertible debt 9.3 12,517 - 12,517 9.3 12,517 Stock compensation plans - 589 - 589 - 589 Reported diluted 86.0 65,464 1.31 $ (1.3) 65,464 (0.02) $ 84.7 65,464 1.29 $ Adjustments (tax-effected): Lease exit adjustments and legal settlement charges 4.2 - (0.4) - 3.8 - Property impairment charges 0.7 - - - 0.7 - Subtotal 90.9 65,464 1.39 $ (1.7) 65,464 (0.03) $ 89.2 65,464 1.36 $ Effect of dilutive securities: Two class method (0.1) - - - (0.1) - Adjusted diluted 90.8 $ 65,464 1.39 $ (1.7) $ 65,464 (0.03) $ 89.1 $ 65,464 1.36 $

Sonic Automotive, Inc. 22 22 Reconciliation of Non-GAAP Financial Information Year Ended December 31, 2010 Continuing Operations Discontinued Operations Total Operations ($ in millions, shares in thousands, except per share data) Net Income (Loss): Numerator Share Count: Denominator Diluted EPS Net Income (Loss): Numerator Share Count: Denominator Diluted EPS Net Income (Loss): Numerator Share Count: Denominator Diluted EPS Reported basic 95.9 $ 52,214 (6.0) $ 52,214 89.9 $ 52,214 Effect of dilutive securities: Two class method (0.9) - - - (0.9) - Contingently convertible debt 9.0 12,890 0.1 12,890 9.1 12,890 Stock compensation plans - 690 - 690 - 690 Reported diluted 104.0 65,794 1.58 $ (5.9) 65,794 (0.09) $ 98.1 65,794 1.49 $ Adjustments (tax-effected): Hail damage 0.4 - - - 0.4 - Property impairment charges 0.2 - - - 0.2 - Interest rate swaps 3.0 - - - 3.0 - Debt restructuring 5.6 - - - 5.6 - Lease exit adjustments - - 0.6 - 0.6 - Tax items (48.2) - - - (48.2) - Subtotal 65.0 65,794 0.99 $ (5.3) 65,794 (0.08) $ 59.7 65,794 0.91 $ Effect of dilutive securities: Two class method 0.3 - - - 0.3 - Adjusted diluted 65.3 $ 65,794 0.99 $ (5.3) $ 65,794 (0.08) $ 60.0 $ 65,794 0.91 $