Property and Equipment

12 Months Ended

Dec. 31, 2014

8. Property and Equipment

Property and equipment, net, consists of the following:

December 31,	2014			2013
	(in thousands)
Land and improvements	$	42,350		$	14,714
Building and improvements		173,043			156,443
Furniture, fixtures, and equipment		1,213,143			1,190,252
Leasehold improvements		246,047			24,301
Construction in progress		69,367			25,389

Total property and equipment		1,743,950			1,411,099
Less accumulated depreciation		(974,805	)		(913,642	)

Property and equipment, net	$	769,145		$	497,457

During the year ended December 31, 2014, total property and equipment, net increased by $271.7 million primarily due to the acquisition of Plainridge Racecourse (see Note 6), construction costs for the development of Plainridge Park Casino, the addition of a new hotel at Zia Park Casino and the addition of two new racinos in Ohio, as well as normal capitalized maintenance expenditures, all of which were partially offset by depreciation expense for the year ended December 31, 2014. The increase also resulted from the relocation fees for the two racinos in Ohio which both opened in the third quarter of 2014. In June 2013, the Company finalized the terms of its memorandum of understanding with the State of Ohio, which included an agreement by the Company to pay a relocation fee in return for being able to relocate its existing racetracks in Toledo and Grove City to Dayton and Austintown, respectively. Upon opening, the relocation fee for each new racino was recorded at the present value of the contractual obligation, which was calculated to be $75 million based on the 5% discount rate included in the agreement (see Note 11 for further details on the obligation). Based on relevant authoritative accounting guidance, the Company determined that the relocation fee met the definition of a real estate preacquisition cost and as such was capitalized.

Depreciation expense, for property and equipment as well as capital leases, totaled $167.6 million, $282.2 million, and $244.5 million in 2014, 2013 and 2012, respectively. Interest capitalized in connection with major construction projects was $0.9 million, $1.4 million, and $8.4 million in 2014, 2013 and 2012, respectively. Depreciation expense decreased by $114.6 million for the year ended December 31, 2014, as compared to the corresponding period in the prior year, primarily due to the contribution of real estate assets to GLPI, as well as Hollywood Casino Perryville and Hollywood Casino Baton Rouge, on November 1, 2013 (see Note 2) partially offset by the openings of the two new racinos in Ohio in the third quarter of 2014.

During the second quarter of 2014, the Company recorded a pre-tax impairment charge of $4.6 million to write-down certain idle assets to their estimated salvage value.

During the fourth quarter of 2013, in conjunction with the relocation of the Company's two racetracks in Ohio, the Company recorded a pre-tax impairment charge of $2.2 million for the parcels of land that the racetracks resided on, as the land was reclassified as held for sale.

- 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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