Sonic 2002 Annual Report Download - page 34

Sonic 02 32
Notes to Consolidated Financial Statements
August 31, 2002, 2001 and 2000 (In thousands, except share data)
(A) The company has $50,000 of senior unsecured notes with $20,000 of Series A notes maturing in April 2003 and
$30,000 of Series B notes maturing in April 2005. The company has the intent and ability to refinance the $20,000
of Series A notes maturing in 2003 and has classified that amount as long-term debt as of August 31, 2002 on the
consolidated balance sheet. The company expects to refinance amounts maturing in fiscal year 2003 with its line of
credit. Interest is payable semi-annually and accrues at 6.65% for the Series A notes and 6.76% for the Series B
notes. 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.
(B) The company has an agreement with a group of banks which provides for an $80,000 line of credit, including a
$2,000 sub-limit for letters of credit, expiring in July 2004. 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, 2002, the company’s effective borrowing rate was 3.9%. As of August 31, 2002 there were $266 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, 2002 are $125 in 2003, $50,086 in 2004,
$34,624 in 2005, $4,590 in 2006, and $4,592 in 2007 and $15,358 thereafter.
10. Other Noncurrent Liabilities
Other noncurrent liabilities consist of the following at August 31, 2002 and 2001:
2002 2001
Minority interest in consolidated restaurants $ 2,836 $ 3,000
Deferred area development fees 1,162 1,061
Other 1,809 1,177
$ 5,807 $ 5,238
11. Income Taxes
The components of the provision for income taxes consists of the following for the years ended August 31:
2002 2001 2000
Current:
Federal $ 23,690 $ 22,696 $ 17,182
State 1,726 1,901 1,305
25,416 24,597 18,487
Deferred:
Federal 2,517 (1,279) 766
State 378 (192) 115
2,895 (1,471) 881
Provision for income taxes $ 28,311 $ 23,126 $ 19,368