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

Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements (Tables)

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2015

Assets and Liabilities Recorded at Fair Value

Assets and liabilities recorded at fair value in the accompanying condensed consolidated balance sheets as of June 30, 2015 and December 31, 2014 are as follows:

	Fair Value Based on Significant Other Observable Inputs (Level 2)
	June 30, 2015		December 31, 2014
	(In thousands)

Assets:
Cash surrender value of life insurance policies (1)	$	29,674	$	27,552
Cash flow swaps designated as hedges (1)		-		618
Total assets	$	29,674	$	28,170


Liabilities:
Cash flow swaps designated as hedges (2)	$	9,683	$	10,251
Cash flow swaps not designated as hedges (3)		1,233		1,469
Deferred compensation plan (4)		16,361		15,863
Total liabilities	$	27,277	$	27,583

(1) Included in other assets in the accompanying condensed consolidated balance sheets.

(2) As of June 30, 2015, approximately $5.1 million and $4.6 million were included in other accrued liabilities and other long-term liabilities, respectively, in the accompanying condensed consolidated balance sheets. As of December 31, 2014, approximately $7.5 million and $2.8 million were included in other accrued liabilities and other long-term liabilities, respectively, in the accompanying condensed consolidated balance sheets.

(3) As of June 30, 2015, approximately $0.6 million was included in both other accrued liabilities and other long-term liabilities in the accompanying condensed consolidated balance sheets. As of December 31, 2014, approximately $0.7 million and $0.8 million were included in other accrued liabilities and other long-term liabilities, respectively, in the accompanying condensed consolidated balance sheets.

(4) Included in other long-term liabilities in the accompanying condensed consolidated balance sheets.

Fair Value and Carrying Value of Fixed Rate Long-Term Debt

At June 30, 2015 and December 31, 2014, the fair value and carrying value of Sonic’s fixed rate long-term debt were as follows:

	June 30, 2015				December 31, 2014
	Fair Value		Carrying Value		Fair Value		Carrying Value
	(In thousands)
7.0% Notes (1)	$	217,000	$	198,630	$	216,000	$	198,556
5.0% Notes (1)	$	294,000	$	300,000	$	294,000	$	300,000
Mortgage Notes (2)	$	168,499	$	164,281	$	152,240	$	147,554
Assumed Notes (2)	$	2,602	$	2,641	$	4,365	$	4,474
Other (2)	$	4,487	$	4,775	$	4,588	$	4,884

(1) As determined by market quotations as of June 30, 2015 and December 31, 2014, respectively (Level 1).

(1) As determined by discounted cash flows (Level 3)