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, 2018

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, 2018 and December 31, 2017 are as follows:


	Fair Value Based on Significant Other Observable Inputs (Level 2)
	September 30, 2018		December 31, 2017
	(In thousands)
Assets:
Cash surrender value of life insurance policies (1)	$	34,699	$	33,747
Cash flow swaps and interest rate caps designated as hedges (2)	8,604		5,968
Total assets	$	43,303	$	39,715

Liabilities:
Cash flow swaps and interest rate caps designated as hedges (3)	$	—	$	1,286

Deferred compensation plan (4)	20,412		18,417
Total liabilities	$	20,412	$	19,703

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

(2) As of September 30, 2018, approximately $2.0 million and $6.6 million were included in other current assets and other assets, respectively, in the accompanying condensed consolidated balance sheets. As of December 31, 2017, approximately $0.9 million and $5.1 million were included in other current assets and other assets, respectively, in the accompanying condensed consolidated balance sheets.

(3) As of December 31, 2017, approximately $1.0 million and $0.3 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, 2018 and December 31, 2017, the fair value and carrying value of Sonic’s significant fixed rate long-term debt were as follows:


	September 30, 2018						December 31, 2017
	Fair Value		Carrying Value		Fair Value		Carrying Value
	(In thousands)

5.0% Notes (1)	$	271,917	$	289,273	$	279,148	$	289,273
6.125% Notes (1)	$	233,125	$	250,000	$	248,750	$	250,000
Mortgage Notes (2)	$	229,626	$	226,548	$	203,031	$	199,972
Other (2)	$	39,177	$	39,311	$	3,760	$	3,947

(1) As determined by market quotations as of September 30, 2018 and December 31, 2017, respectively (Level 1).

(2) As determined by discounted cash flows (Level 3) based on estimated current market interest rates for comparable instruments.