Sonic Automotive, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Property and Equipment

Property and Equipment

12 Months Ended

Dec. 31, 2017

Property Plant And Equipment [Abstract]

Property and Equipment

4. Property and Equipment

Property and equipment, net consists of the following:

	December 31, 2017			December 31, 2016
	(In thousands)
Land	$	370,828		$	306,457
Building and improvements		893,768			777,766
Software and computer equipment		147,812			128,366
Parts and service equipment		105,123			93,901
Office equipment and fixtures		96,066			86,216
Company vehicles		9,723			9,107
Construction in progress		54,429			62,982
Total, at cost		1,677,749			1,464,795
Less accumulated depreciation		(527,379	)		(450,184	)
Subtotal		1,150,370			1,014,611
Less assets held for sale (1)		(3,489	)		(4,231	)
Property and equipment, net	$	1,146,881		$	1,010,380

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

Interest capitalized in conjunction with construction projects and software development was approximately $2.2 million, $2.8 million and $1.9 million for 2017, 2016 and 2015, respectively. As of December 31, 2017, commitments for facility construction projects totaled approximately $31.9 million.

During 2017, 2016 and 2015, property and equipment impairment charges were recorded as noted in the following table:

Year Ended December 31,	(In thousands)
2017	$	4,894
2016	$	8,063
2015	$	12,210

Impairment charges were due to the abandonment of construction and software development projects, the abandonment and disposal of dealership equipment or Sonic’s estimate that based on historical and projected operating losses for certain dealerships, these dealerships would not be able to recover recorded property and equipment asset balances.