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)

3 Months Ended

Mar. 31, 2019

Assets and Liabilities Recorded at Fair Value

Assets and liabilities recorded at fair value in the accompanying unaudited condensed consolidated balance sheets as of March 31, 2019 and December 31, 2018 are as follows:


	Fair Value Based on Significant Other Observable Inputs (Level 2)
	March 31, 2019		December 31, 2018
	(In thousands)
Assets:
Cash surrender value of life insurance policies (1)	$	31,807	$	31,395
Cash flow swaps and interest rate caps designated as hedges (2)	2,490		4,839
Total assets	$	34,297	$	36,234

Liabilities:


Deferred compensation plan (3)	$	17,269	$	19,848
Total liabilities	$	17,269	$	19,848

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

(2) As of March 31, 2019, approximately $1.3 million and $1.2 million were included in other current assets and other assets, respectively, in the accompanying unaudited condensed consolidated balance sheets. As of December 31, 2018, approximately $1.8 million and $3.0 million were included in other current assets and other assets, respectively, in the accompanying unaudited condensed consolidated balance sheets.

(3) Included in other long-term liabilities in the accompanying unaudited condensed consolidated balance sheets.

Fair Value and Carrying Value of Significant Fixed Rate Long-Term Debt

At March 31, 2019 and December 31, 2018, the fair value and carrying value of Sonic’s significant fixed rate long-term debt were as follows:


	March 31, 2019						December 31, 2018
	Fair Value		Carrying Value		Fair Value		Carrying Value
	(In thousands)

5.0% Notes (1)	$	278,425	$	289,273	$	262,515	$	289,273
6.125% Notes (1)	$	227,500	$	250,000	$	216,250	$	250,000
Mortgage Notes (2)	$	213,412	$	211,994	$	218,402	$	215,196
Other (2) (3)	$	—	$	—	$	20,437	$	20,588

(1) As determined by market quotations as of March 31, 2019 and December 31, 2018, respectively (Level 1).

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

(3) As discussed in Note 1, “Summary of Significant Accounting Policies,” due to the adoption of ASC 842, “Leases,” effective January 1, 2019, previously existing capital lease liabilities have been reclassified from current maturities of long-term debt and long-term debt to current lease liabilities and long-term lease liabilities in the accompanying unaudited condensed consolidated balance sheets.