Sonic Automotive, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Property and Equipment

Property and Equipment

6 Months Ended

Jun. 30, 2015

Property Plant And Equipment [Abstract]

Property and Equipment

4. Property and Equipment

Property and equipment, net consists of the following:

	June 30, 2015			December 31, 2014
	(In thousands)
Land	$	244,004		$	224,124
Building and improvements		632,443			582,261
Office equipment and fixtures		174,083			151,165
Parts and service equipment		73,806			68,248
Company vehicles		8,997			8,958
Construction in progress		45,503			81,180
Total, at cost		1,178,836			1,115,936
Less accumulated depreciation		(349,138	)		(316,617	)
Property and equipment, net	$	829,698		$	799,319

In the three and six months ended June 30, 2015, capital expenditures were approximately $36.2 million and $82.9 million, respectively, and in the three and six months ended June 30, 2014, capital expenditures were approximately $27.0 million and $48.6 million, respectively. Capital expenditures in both periods were primarily related to real estate acquisitions, construction of new dealerships and EchoPark® stores, building improvements and equipment purchased for use in Sonic’s dealerships and EchoPark® stores.

Impairment charges for the three and six months ended June 30, 2015 were approximately $10.5 million and $16.7 million, respectively. Impairment charges for the three and six months ended June 30, 2015 include the write-off of goodwill, intangible assets, property and equipment as part of the disposal of a franchise, the write-off of certain costs associated with website and software development projects as well as abandonment of certain construction projects.