Current report filing

Property and Equipment

v2.4.0.6
Property and Equipment
 12 Months Ended
Dec. 31, 2011
Property and Equipment [Abstract]  
Property and Equipment

4. Property and Equipment

Property and equipment consists of the following:

 

                 
    December 31,  
(In thousands)   2011     2010  

Land

   $ 131,865     $ 76,357  

Building and improvements

     455,650       353,088  

Office equipment and fixtures

     92,920       77,654  

Parts and service equipment

     61,561       56,651  

Company vehicles

     8,391       8,137  

Construction in progress

     16,191       48,230  
   

 

 

    

 

 

  

Total, at cost

     766,578       620,117  

Less accumulated depreciation

     (214,541 )      (181,837 ) 
   

 

 

    

 

 

  

Subtotal

     552,037       438,280  

Less assets held for sale

     —         (2,020 ) 
   

 

 

    

 

 

  

Property and equipment, net

   $ 552,037     $ 436,260  
   

 

 

    

 

 

  

During the year ended December 31, 2011, Sonic purchased seven dealership properties for approximately $91.4 million, utilizing cash on hand and borrowings under the then existing syndicated revolving credit facility and floor plan facility. These dealership properties were either previously leased through long-term operating leases or will replace dealership properties currently under long-term operating leases.

Interest capitalized in conjunction with construction projects was approximately $2.3 million, $2.3 million and $0.7 million for the years ended December 31, 2011, 2010 and 2009, respectively. As of December 31, 2011, commitments for facility construction projects totaled approximately $18.9 million.

 

During the years ended December 31, 2011, 2010 and 2009, property and equipment impairment charges were recorded as noted in the following table:

 

                 
(In millions)   Continuing
Operations		     Discontinued
Operations		  

Year ended December 31,

                

2011

   $ 1.2     $ —    

2010

     0.2       —    

2009

     18.1       5.0  

Impairment charges related to continuing operations were related to the abandonment of construction 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.

Impairment charges related to assets held for sale were recorded in discontinued operations based on the estimated fair value of the property and equipment to be sold in connection with the disposal of the associated dealerships. During the year ended December 31, 2009, approximately $3.8 million of the impairment charge in discontinued operations was related to Sonic’s General Motors franchise agreements that were terminated by the manufacturer as of December 31, 2009.