Sonic 2005 Annual Report Download - page 44

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7. Property, Equipment and Capital Leases
Property, equipment and capital leases consist of the following at August 31, 2005 and 2004:
Estimated Useful Life 2005 2004
Property and equipment:
Home office:
Leasehold improvements Life of lease $ 3,046 $ 3,011
Computer and other equipment 2 – 5 yrs 26,338 29,188
Drive-ins, including those leased to others:
Land 134,695 113,778
Buildings 8 – 25 yrs 231,931 199,578
Equipment 5 – 7 yrs 146,116 119,971
Property and equipment, at cost 542,126 465,526
Less accumulated depreciation 154,269 126,998
Property and equipment, net 387,857 338,528
Capital Leases:
Leased home office building Life of lease 9,321 9,321
Leased drive-in buildings and equipment under capital leases,
including those held for sublease Life of lease 36,111 36,320
Less accumulated amortization 10,464 7,854
Capital leases, net 34,968 37,787
Property, equipment and capital leases, net $422,825 $376,315
Land, buildings and equipment with a carrying amount of $38,476 at August 31, 2005 were leased under
operating leases to franchisees or other parties. The accumulated depreciation related to these buildings and
equipment was $7,526 at August 31, 2005. As of August 31, 2005, the Company had drive-ins under construction with
costs to complete which aggregated $9,120.
8. Accrued Liabilities
Accrued liabilities consist of the following at August 31, 2005 and 2004:
2005 2004
Wages and other employee benefits $ 6,153 $ 5,751
Taxes, other than income taxes 12,618 10,904
Accrued interest 305 1,031
Minority interest in consolidated drive-ins 1,904 2,012
Other 5,387 4,035
$26,367 $23,733
9. Long-Term Debt
Long-term debt consists of the following at August 31, 2005 and 2004:
2005 2004
Senior unsecured notes (A) $–$ 30,000
Borrowings under line of credit(B) 30,150 14,075
Senior unsecured notes(C) 24,428 29,000
Other 5,617 9,094
60,195 82,169
Less long-term debt due within one year 4,261 3,495
Long-term debt due after one year $ 55,934 $ 78,674
(A) The Company repaid its senior unsecured Series B notes that matured in April 2005 in the amount of $30,000. As
of August 31, 2004, the Company intended to refinance the entire $30,000 through availability under its line of
credit and had classified that amount as long-term debt on its balance sheet. However, as a result of strong cash
flow from operations for the first nine months of fiscal year 2005, the Company repaid $19,525 using cash on
hand and refinanced the remaining $10,475 using amounts available under its line of credit.
Notes to Consolidated Financial Statements
August 31, 2005, 2004 and 2003 (In thousands, except share data)
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