Note 11. Property and Equipment

Property and equipment consisted of the following (in thousands):


	June 30,		December 31,
	2016		2015
Buildings and improvements	$	1,007,163	$	992,917
Land		437,185		450,045
Fixtures and equipment		40,340		40,946
Construction in process		76,708		67,080
Capitalized internal use software		18,852		18,852
Total property and equipment		1,580,248		1,569,840
Less accumulated depreciation		373,009		327,157
Total	$	1,207,239	$	1,242,683

Property and equipment includes assets held for sale of $44.7 million and $7.4 million at June 30, 2016 and December 31, 2015, respectively (see Note 15).

Construction in process

At June 30, 2016 and December 31, 2015, construction in process included $30.5 million related to the Partnership’s ethanol plant acquired from Cascade Kelly Holdings LLC (“Cascade Kelly”) in 2013. The Partnership began taking steps to utilize this location by shifting the terminalling facility from crude oil to ethanol transloading. This measure was substantially related to cleaning of tanks and modifications to associated infrastructure, which commenced during the first quarter of 2016 and was completed early in the third quarter of 2016.

Therefore, as of June 30, 2016 and December 31, 2015, the recorded value of the ethanol plant was included in construction in process. After the plant has been successfully placed into service, depreciation will commence.

Evaluation of Impairment

The Partnership evaluates its assets for impairment on a quarterly basis. As a result of its analysis, an impairment of two discrete asset groups was required, and the Partnership recorded an impairment charge of $2.2 million for the three and six months ended June 30, 2016, which is included in net loss on sale and disposition of assets and impairment charges in the accompanying consolidated statements of operations.

The Partnership recognized an impairment charge of $1.9 million associated with the long-lived assets used in supplying compressed natural gas (“CNG”) which is viewed as an alternative fuel to oil. The long-term recoverability of these assets has been adversely impacted by the decline in commodity prices and the cost differential between natural gas and oil. As oil has remained an attractive alternative to CNG due to lower oil prices, the related impact on the CNG operating and cash flows was determined to be an impairment indicator, resulting in the impairment of the CNG long-lived assets during the three and six months ended June 30, 2016. The method used for determining fair value of the CNG assets predominately relied on the market approach. The CNG assets are allocated to the Commercial segment. Additionally, the Partnership recognized an impairment charge of $0.3 million for the three and six months ended June 30, 2016 associated with the long-lived assets of one discrete GDSO site. The method used for determining fair value of this GDSO site predominately relied on the market approach.

At June 30, 2016, the Partnership had a $42.1 million remaining net book value of long-lived assets used at its crude oil transloading terminals in North Dakota. The long-term recoverability of these assets may be adversely impacted by a prolonged decline in crude oil prices or crude oil differentials. Over the long-term, if these market conditions remain, this may become an indicator of the potential impairment of these North Dakota assets in the future. The Partnership will monitor the pricing environment and the related impact this may have on the North Dakota operating and cash flows and whether this would constitute an impairment indicator.

At June 30, 2016, the Partnership had a $66.2 million remaining net book value of long-lived assets used at its West Coast facility and had substantially completed with the measures necessary to shift the facility from crude oil to ethanol transloading. The Partnership will need to take certain measures to prepare the facility for ethanol production to place the plant in service. If the Partnership is unable to generate cash flows to support the recoverability of the plant and facility assets, this may become an indicator of potential impairment. The Partnership will monitor the market for ethanol, the continued business development of this facility for either ethanol or crude oil transloading and the related impact this may have on the facility’s operating cash flows and whether this would constitute an impairment indicator.