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

3 Months Ended

Mar. 31, 2017

Property Plant And Equipment [Abstract]

Property and Equipment

4. Property and Equipment

Property and equipment, net consists of the following:

	March 31, 2017			December 31, 2016
	(In thousands)
Land	$	335,407		$	306,457
Building and improvements		805,927			777,766
Software and computer equipment		132,874			128,366
Parts and service equipment		98,499			93,901
Office equipment and fixtures		88,894			86,216
Company vehicles		9,377			9,107
Construction in progress		66,793			62,982
Total, at cost		1,537,771			1,464,795
Less accumulated depreciation		(470,824	)		(450,184	)
Subtotal		1,066,947			1,014,611
Less assets held for sale (1)		(4,231	)		(4,231	)
Property and equipment, net	$	1,062,716		$	1,010,380

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

In the three months ended March 31, 2017 and 2016, capital expenditures were approximately $75.7 million and $41.4 million, respectively. Capital expenditures for the three months ended March 31, 2017 and 2016 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. Assets held for sale as of March 31, 2017 consists of vacant land that Sonic expects to dispose of in the next twelve months.

Impairment charges for the three months ended March 31, 2017 were approximately $0.5 million, which include the write-off of capitalized costs associated with abandonment of certain construction projects. There were no impairment charges for the three months ended March 31, 2016.