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)

9 Months Ended

Sep. 30, 2016

Assets and Liabilities Recorded at Fair Value

Assets and liabilities recorded at fair value in the accompanying condensed consolidated balance sheets as of September 30, 2016 and December 31, 2015 are as follows:

	Fair Value Based on Significant Other Observable Inputs (Level 2)
	September 30, 2016		December 31, 2015
	(In thousands)

Assets:
Cash surrender value of life insurance policies (1)	$	31,073	$	29,055
Total assets	$	31,073	$	29,055

Liabilities:
Cash flow swaps designated as hedges (2)	$	12,573	$	9,094
Cash flow swaps not designated as hedges (3)		507		913
Deferred compensation plan (4)		14,274		13,551
Total liabilities	$	27,354	$	23,558

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

(2)

As of September 30, 2016, approximately $5.1 million and $7.5 million were included in other accrued liabilities and other long-term liabilities, respectively, in the accompanying condensed consolidated balance sheets. As of December 31, 2015, approximately $4.6 million and $4.5 million were included in other accrued liabilities and other long-term liabilities, respectively, in the accompanying condensed consolidated balance sheets.

(3)

As of September 30, 2016, approximately $0.5 million was included in other accrued liabilities in the accompanying condensed consolidated balance sheets. As of December 31, 2015, approximately $0.5 million and $0.4 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 Significant Fixed Rate Long-Term Debt

At September 30, 2016 and December 31, 2015, the fair value and carrying value of Sonic’s significant fixed rate long-term debt were as follows:

	September 30, 2016				December 31, 2015
	Fair Value		Carrying Value		Fair Value		Carrying Value
	(In thousands)
7.0% Notes (1)	$	211,000	$	198,829	$	211,000	$	198,708
5.0% Notes (1)	$	284,934	$	289,273	$	284,250	$	300,000
Mortgage Notes (2)	$	188,955	$	178,910	$	174,007	$	168,410
Other (2)	$	4,131	$	4,363	$	5,192	$	5,457

(1)	As determined by market quotations as of September 30, 2016 and December 31, 2015, respectively (Level 1).

(2)	As determined by discounted cash flows (Level 3).