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41
8. Property, Equipment and Capital Leases
Property, equipment and capital leases consist of the following at August 31:
Estimated Useful Life 2013 2012
Property, equipment and capital leases:
Land $ 153,868 $ 171,102
Buildings and improvements 8 – 25 yrs 336,383 363,428
Drive-In Equipment 5 – 7 yrs 114,990 118,975
Brand technology development and other equipment 2 – 5 yrs 76,585 61,492
Property and equipment, at cost 681,826 714,997
Accumulated depreciation (301,236) (295,735)
Property and equipment, net 380,590 419,262
Capital leases Life of lease 47,371 49,896
Accumulated amortization (28,300) (26,150)
Capital leases, net 19,071 23,746
Property, equipment and capital leases, net $ 399,661 $ 443,008
Depreciation expense for property and equipment was $35.6 million, $37.2 million and $37.3 million for fiscal
years 2013, 2012 and 2011, respectively. Land, buildings and equipment with a carrying amount of $157.0 million
at August 31, 2013, were leased under operating leases to franchisees and other parties. The accumulated
depreciation related to these buildings and equipment was $51.6 million at August 31, 2013. Amortization expense
related to capital leases is included within “Depreciation and amortization” on the Consolidated Statements of
Income and Comprehensive Income. As of August 31, 2013, the Company had no drive-ins under construction with
costs to complete.
Interest incurred in connection with the construction of new drive-ins and technology projects is capitalized.
Capitalized interest was $0.7 million and $0.3 million for fiscal years 2013 and 2012, respectively. No interest was
capitalized in fiscal year 2011.
9. Accrued Liabilities
Accrued liabilities consist of the following at August 31:
2013 2012
Wages and employee benefit costs $ 14,611 $ 11,061
Property taxes, sales and use taxes and employment taxes 9,219 8,869
Unredeemed gift cards 8,272 7,274
Other 5,119 5,403
$ 37,221 $ 32,607
10. Debt
Long-term debt consists of the following at August 31:
2013 2012
Class A-2 2013-1 senior secured fixed rate notes $ 155,000 $–
Class A-2 2011-1 senior secured fixed rate notes 291,988 481,250
Class A-1 2011-1 senior secured variable funding notes ––
Other 306 543
447,294 481,793
Less long-term debt due within one year (9,914) (15,180)
Long-term debt due after one year $ 437,380 $ 466,613
Notes to Consolidated Financial Statements
August 31, 2013, 2012 and 2011 (In thousands, except per share data)