Sonic 2007 Annual Report Download - page 36

Initial direct costs incurred in the negotiations and consummations of direct financing
lease transactions have not been material. Accordingly, no portion of unearned income has
been recognized to offset those costs.
Future minimum rental payments receivable as of August 31, 2007, are as follows:
Direct
Operating Financing
Year ending August 31:
2008 $ 478 $ 1,725
2009 483 1,277
2010 464 703
2011 452 477
2012 433 336
Thereafter 2,380 580
4,690 5,098
Less unearned income – 1,238
$ 4,690 $ 3,860
Capital Leases
Components of obligations under capital leases are as follows at August 31, 2007 and 2006:
2007 2006
Total minimum lease payments $ 57,332 $ 54,437
Less amount representing interest averaging
7.1% in 2007 and 8.0% in 2006 18,014 17,812
Present value of net minimum lease payments 39,318 36,625
Less amount due within one year 2,545 2,330
Amount due after one year $ 36,773 $ 34,295
Maturities of these obligations under capital leases and future minimum rental payments
required under operating leases that have initial or remaining noncancelable lease terms in
excess of one year as of August 31, 2007, are as follows:
Operating Capital
Year ending August 31:
2008 $ 11,948 $ 4,385
2009 11,893 5,376
2010 11,713 5,398
2011 11,454 5,199
2012 11,207 4,944
Thereafter 131,959 32,030
190,174 57,332
Less amount representing interest – 18,014
$190,174 $ 39,318
Total rent expense for all operating leases and capital leases consists of the following for the
years ended August 31:
2007 2006 2005
Operating leases:
Minimum rentals $ 13,644 $ 12,731 $ 11,355
Contingent rentals 229 199 289
Sublease rentals (553) (542) (536)
Capital leases:
Contingent rentals 1,300 1,123 1,109
$ 14,620 $ 13,511 $ 12,217
The aggregate future minimum rentals receivable under noncancelable subleases of
operating leases as of August 31, 2007, was $2,405.
7. Property, Equipment and Capital Leases
Property, equipment and capital leases consist of the following at August 31, 2007
and 2006:
Estimated Useful Life 2007 2006
Property and equipment:
Home office:
Leasehold improvements Life of lease $3,082 $3,066
Computer and other equipment 2 – 5 yrs 33,134 28,842
Drive-ins, including those leased to others:
Land 158,968 154,092
Buildings 8 – 25 yrs 331,901 275,924
Equipment 5 – 7 yrs 179,863 168,019
Property and equipment, at cost 706,948 629,943
Less accumulated depreciation 211,327 185,275
Property and equipment, net 495,621 444,668
Capital leases:
Leased home office building Life of lease 9,321 9,321
Leased drive-in buildings, equipment
and other assets under capital leases,
including those held for sublease Life of lease 40,125 35,844
Less accumulated amortization 15,074 12,779
Capital leases, net 34,372 32,386
Property, equipment and capital leases, net $ 529,993 $ 477,054
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Sonic Corp. 2007 Annual Report
Notes to Consolidated Financial Statements
August 31, 2007, 2006 and 2005 (In thousands, except per share data)