SONIC AUTOMOTIVE, INC.

Climate Impact & Sustainability Data (2022, 2023-07-01 to 2023-09-30, 2024-03 to 2024-06)

Company-wide $15 per hour minimum wage for all hourly employees; paid vacation, sick and bereavement leave; paid community service and volunteer leave; and tuition assistance programs and Company-paid training opportunities.
We strive to maintain an inclusive environment free from discrimination of any kind, including in our hiring practices and daily operations. Our teammates have multiple avenues available through which inappropriate behavior can be reported, including a confidential hotline. Our policies require all reports of inappropriate behavior to be taken seriously and promptly investigated with appropriate action taken to address and prevent such behavior.

Medium-term Goals:

COVID-19 pandemic negatively impacting the global economy and supply chain, affecting consumer demand and the global supply of automobiles and automobile parts.
Global automotive supply chain disruptions, primarily related to semiconductor production and workforce-related delays.
Low new and used vehicle inventory and high pricing environment.
Increasing competition among automotive retailers and the use of the internet reducing profit margins.
Challenges to the business model of franchised dealerships from manufacturers and the effect of companies entering into the automotive space.
Climate change legislation or regulations restricting emission of greenhouse gases could result in increased operating costs and reduced demand for the vehicles we sell.

Approved a 3.4% increase to the Company's quarterly cash dividend, to $0.30 per share, payable on January 12, 2024

Medium-term Goals:

Plan to resume disciplined expansion of EchoPark nationwide distribution network as market conditions improve

Short-term Goals:

Expected return to breakeven EchoPark Segment adjusted EBITDA in the first quarter of 2024

Consumer affordability and used vehicle sourcing continue to be a challenge
Supply chain disruption continues to suppress new vehicle production and inventory levels
Elevated used prices and interest rates continue to negatively impact consumer affordability and industry sales volume
At wholesale auction, off-lease/off-rental inventory supply remains limited and expensive
Used wholesale pricing volatility

Strategic adjustments to our EchoPark business model
Reducing EchoPark store footprint by 50%
Reallocation of inventory and resources to smaller store footprint
Sourcing more vehicles from non-auction sources (20% of Q3 2023 sales vs. historically less than 10%)
Expanding inventory to include 5+ year-old vehicles (15% of Q3 2023 sales)