Sonic 2008 Annual Report Download - page 80

Note  Consolidate nancia Satement
August 31, 2008, 2007 and 2006 (In thousands, except per share data)
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Sonic Corp. 2008 Annual Report
tender offer, the Board authorized the continuation of the stock repurchase program. On January 31, 2007, the
Board of Directors approved an increase in the stock repurchase program from $10,705 to $100,000, followed
by an additional authorization on August 2, 2007 of $75,000 and extension of the program through August 31,
2008. Pursuant to this program, the company acquired 1,498 and 9,574 shares for a total cost of $32,196 and
$211,135 during fiscal year 2008 and 2007, respectively. The remaining $10,375 authorized for repurchase expired
August 31, 2008.
Accumulated Other Comprehensive Income
In August 2006, the company entered into a forward starting swap agreement with a financial institution
to hedge part of the interest rate risk associated with the pending securitized debt transaction. The forward
starting swap was designated as a cash flow hedge, and was subsequently settled in conjunction with the closing
of the Class A-2 notes, as planned. The loss resulting from settlement was recorded net of tax in accumulated
other comprehensive income and is being amortized to interest expense over the expected term of the debt. See
Note 9 for additional information.
13. Segment Information
FASB Statement No. 131, “Disclosures about Segments of an Enterprise and Related Information” (“SFAS
131”) establishes annual and interim reporting standards for an enterprise’s operating segments. Operating
segments are generally defined as components of an enterprise about which separate discrete financial
information is available as the basis for management to allocate resources and assess performance.
Prior to the second quarter of fiscal year 2008, the company reported financial information as one business
segment operating in the quick-service restaurant industry. Based on internal reporting and management
structure, the company has determined that it has two reportable segments: Partner Drive-Ins and Franchise
Operations. The Partner Drive-Ins segment consists of the drive-in operations in which the company owns a
majority interest and derives its revenues from operating drive-in restaurants. The Franchise Operations segment
consists of franchising activities and derives its revenues from royalties and initial franchise fees received from
franchisees. The accounting policies of the segments are described in the Summary of Significant Accounting
Policies. Segment information for total assets and capital expenditures is not presented as such information is
not used in measuring segment performance or allocating resources between segments.
The following table presents the revenues and income from operations for each reportable segment, along
with reconciliation to reported revenue and income from operations:
2008 2007 2006
Revenues:
Partner Drive-Ins $ 671,151 $ 646,915 $ 585,832
Franchise Operations 127,111 115,626 102,910
Unallocated revenues 6,451 7,928 4,520
$ 804,713 $ 770,469 $ 693,262
Income from Operations:
Partner Drive-Ins $ 123,049 $ 126,739 $ 117,205
Franchise Operations 127,111 115,626 102,910
Unallocated revenues 6,451 7,928 4,520
Unallocated expenses:
Selling, general and administrative (61,179) (58,736) (52,048)
Depreciation and amortization (50,653) (45,103) (40,696)
Provision for impairment of long-lived assets (571) (1,165) (264)
$ 144,208 $ 145,289 $ 131,627