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, 2012

4.	Property and Equipment

Property and equipment consists of the following:


	December 31,
	2012			2011
	(In thousands)
Land	$	142,730		$	131,865
Building and improvements		476,846			455,650
Office equipment and fixtures		115,509			92,920
Parts and service equipment		62,678			61,561
Company vehicles		7,750			8,391
Construction in progress		39,139			16,191

Total, at cost		844,652			766,578
Less accumulated depreciation		(249,528	)		(214,541	)

Property and equipment, net	$	595,124		$	552,037

Interest capitalized in conjunction with construction projects was approximately $1.2 million, $2.3 million and $2.3 million for the years ended December 31, 2012, 2011 and 2010, respectively. As of December 31, 2012, commitments for facility construction projects totaled approximately $44.8 million.

During the years ended December 31, 2012, 2011 and 2010, property and equipment impairment charges were recorded as noted in the following table:


Year ended December 31,	Continuing Operations		Discontinued Operations
	(In millions)
2012	$	0.4	$	0.5
2011		0.2		1.0
2010		0.2		—

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.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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