Sonic Automotive, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Property and Equipment

Property and Equipment

6 Months Ended

Jun. 30, 2016

Property Plant And Equipment [Abstract]

Property and Equipment

4. Property and Equipment

Property and equipment, net consists of the following:

	June 30, 2016			December 31, 2015
	(In thousands)
Land	$	284,389		$	260,275
Building and improvements		730,923			679,712
Software and computer equipment		114,224			107,086
Parts and service equipment		84,858			79,219
Office equipment and fixtures		81,560			76,810
Company vehicles		9,017			8,478
Construction in progress		69,309			55,010
Total, at cost		1,374,280			1,266,590
Less accumulated depreciation		(416,095	)		(379,688	)
Subtotal		958,185			886,902
Less assets held for sale		(6,347	)		-
Property and equipment, net	$	951,838		$	886,902

In the three and six months ended June 30, 2016, capital expenditures were approximately $67.6 million and $109.0 million, respectively, and in the three and six months ended June 30, 2015, capital expenditures were approximately $36.2 million and $82.9 million, respectively. Capital expenditures in all periods were related to real estate acquisitions, construction of new dealerships and EchoPark^® stores, building improvements and equipment purchased for use in Sonic’s dealerships and EchoPark^® stores.

Impairment charges for the three and six months ended June 30, 2016 were approximately $0.2 million. Impairment charges for the three and six months ended June 30, 2015 were approximately $10.5 million and $16.7 million, respectively. Impairment charges for the three and six months ended June 30, 2015 include the write-off of goodwill, intangible assets, property and equipment as part of the disposal of a franchise, the write-off of certain costs associated with website and software development projects as well as abandonment of certain construction projects.