Property and Equipment

6 Months Ended

Jun. 30, 2014

6. Property and Equipment

Property and equipment, net, consists of the following:

	June 30,			December 31,
	2014			2013
	(in thousands)

Land and improvements	$	42,361		$	14,714
Building and improvements	180,401			156,443
Furniture, fixtures, and equipment	1,206,281			1,190,252
Leasehold improvements	43,074			24,301
Construction in progress	67,582			25,389
Total property and equipment	1,539,699			1,411,099
Less accumulated depreciation	(982,655		)	(913,642		)
Property and equipment, net	$	557,044		$	497,457

Property and equipment, net increased by $59.6 million for the six months ended June 30, 2014 primarily due to the acquisition of Plainridge Racecourse and its development (see Note 5 to the condensed consolidated financial statements) and capital expenditures incurred for the six months ended June 30, 2014 primarily related to the construction of a new hotel at Zia Park Casino, the two racinos under development in Ohio and normal capital maintenance expenditures, partially offset by depreciation expense for the six months ended June 30, 2014.

Depreciation expense, for property and equipment, totaled $42.0 million and $84.0 million for the three and six months ended June 30, 2014, respectively, as compared to $75.5 million and $151.7 million for the three and six months ended June 30, 2013, respectively. Interest capitalized in connection with major construction projects was $0.1 million and $0.2 million for the three and six months ended June 30, 2014, respectively, as compared to $0.3 million and $0.4 million for the three and six months ended June 30, 2013, respectively. Depreciation expense decreased by $33.5 million and $67.7 million for the three and six months ended June 30, 2014, respectively, as compared to the corresponding period in the prior year, primarily due to the contribution of real estate assets to GLPI on November 1, 2013 (see Note 2 to the condensed consolidated financial statements).

During the three months ended June 30, 2014, the Company recorded a pre-tax impairment charge of $4.6 million ($2.8 million, net of taxes) to write-down certain idle assets to an estimated salvage value.

- Definition

The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures.

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