Sonic 2003 Annual Report Download - page 42

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Notes to Consolidated Financial Statements
August 31, 2003, 2002 and 2001 (In thousands, except share data)
(A) The company has $30,000 of senior unsecured Series B notes maturing in April 2005. Interest is payable semi-
annually and accrues at 6.76%. The related agreement requires, among other things, the company to maintain equity
of a specified amount, maintain ratios of debt to total capital and fixed charge coverage and limits additional
borrowings. With its line of credit, the company refinanced the $20,000 of Series A notes that matured in 2003.
(B) The company has an agreement with a group of banks which provides for a $125,000 line of credit, including a
$2,000 sub-limit for letters of credit, expiring in July 2006. The agreement allows for annual renewal options, subject
to approval by the banks. The company plans to use the line of credit to finance the opening of newly-constructed
restaurants, acquisitions of existing restaurants, purchases of the company’s common stock, retirement of senior
notes and for general corporate purposes. Borrowings under the line of credit are unsecured and bear interest at a
specified bank’s prime rate or, at the company’s option, LIBOR plus 0.50% to 1.25%. In addition, the company pays
an annual commitment fee ranging from .125% to .25% on the unused portion of the line of credit. As of August 31,
2003, the company’s effective borrowing rate was 2.8%. As of August 31, 2003 there were $676 in letters of credit
outstanding under the line of credit. The agreement requires, among other things, the company to maintain equity of
a specified amount, maintain ratios of debt to EBITDA and fixed charge coverage and limits additional borrowings
and acquisitions of businesses.
(C) The company has $30,000 of senior unsecured notes with $5,000 of Series A notes maturing in August 2008 and
$25,000 of Series B notes maturing in August 2011. Interest is payable semi-annually and accrues at 6.58% for the
Series A notes and 6.87% for the Series B notes. Required annual prepayments amount to $1,000 from August 2004
to August 2007 on the Series A notes and $3,571 from August 2005 to August 2010 on the Series B notes. The
related agreement requires, among other things, the company to maintain equity of a specified amount, and maintain
ratios of debt to equity and fixed charge coverage.
Maturities of long-term debt for each of the five years after August 31, 2003 are $82 in 2004, $34,625 in 2005,
$83,930 in 2006, $4,592 in 2007, and $3,594 in 2008 and $12,764 thereafter.
10. Other Noncurrent Liabilities
Other noncurrent liabilities consist of the following at August 31, 2003 and 2002:
2003 2002
Minority interest in consolidated restaurants $ 4,117 $ 2,836
Deferred area development fees 1,147 1,162
Other 2,599 1,809
$ 7,863 $ 5,807
11. Income Taxes
The components of the provision for income taxes consists of the following for the years ended August 31:
2003 2002 2001
Current:
Federal $ 27,126 $ 23,690 $ 22,696
State 2,620 1,726 1,901
29,746 25,416 24,597
Deferred:
Federal 1,110 2,517 (1,279)
State 167 378 (192)
1,277 2,895 (1,471)
Provision for income taxes $ 31,023 $ 28,311 $ 23,126