Audiovox 2005 Annual Report Download - page 95

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The investments, which amounted to $4,871 and $6,151 at
November 30, 2004 and 2005, respectively have been classified
as trading securities (long−term) and are included in
investment securities on the accompanying consolidated balance
sheets as of November 30, 2005. The corresponding deferred
compensation liability is reflected as a long−term liability
on the accompanying consolidated balance sheet as of November
30, 2004 and 2005.
(12) Lease Obligations
During 1998, the Company entered into a 30−year capital lease for a
building with its principal stockholder and current chairman, which was
the headquarters of the discontinued Cellular operation. Payments on
the capital lease were based upon the construction costs of the
building and the then−current interest rates. The effective interest
rate on the capital lease obligation is 8%. On November 1, 2004 and in
connection with the sale of the Cellular business, the Company entered
into an agreement to sub−lease the building to UTStarcom for monthly
payments of $46 through October 31, 2009.
At November 30, 2005, the Company was obligated under non−cancelable
capital and operating leases for equipment and warehouse facilities for
minimum annual rental payments as follows:
CAPITAL OPERATING
LEASE LEASES
2006 $ 561 $ 3,247
2007 577 2,847
2008 580 2,434
2009 577 1,366
2010 577 1,098
Thereafter 9,675 46
−−−− −−−−− −−−−−−− −−
Total minimum lease payments 12,547 $ 11,038
========
Less: minimum sublease income 2,161
−−− −−−−−
Net 10,386
Less: amount representing interest 4,385
−−− −−−−−
Present value of net minimum lease payments 6,001
Less: current installments included in accrued expenses
and other current liabilities 84
Long−term obligation $5,917
======
Rental expense for the above−mentioned operating lease agreements and
other leases on a month−to−month basis approximated $2,440, $2,475 and
$2,097 for the years ended November 30, 2003, 2004 and 2005,
respectively.
F−41