Sonic 2009 Annual Report Download - page 48

Notes to Consolidated Financial Statements
August 31, 2009, 2008 and 2007 (In thousands, except per share data)
18. Selected Quarterly Financial Data (Unaudited)
19. Fair Values of Financial Instruments
The following discussion of fair values is not indicative of the overall fair value of the company’s consolidated balance sheet since
the provisions of SFAS No. 107, “Disclosures About Fair Value of Financial Instruments,” do not apply to all assets, including intangibles.
The following methods and assumptions were used by the company in estimating its fair values of financial instruments:
Cash and cash equivalents —Carrying value approximates fair value due to the short duration to maturity.
Notes receivable —For variable rate loans with no significant change in credit risk since the loan origination, fair values approximate
carrying amounts. Fair values for fixed-rate loans are estimated using discounted cash flow analysis, using interest rates that would
currently be offered for loans with similar terms to borrowers of similar credit quality and/or the same remaining maturities.
As of August 31, 2009 and 2008, carrying values approximate their estimated fair values.
Borrowed funds —Fair values for fixed rate borrowings are estimated using a discounted cash flow analysis that applies interest
rates currently being offered on borrowings as similar as available in terms of amounts and terms to those currently outstanding. There
are few leveraged loan transactions occurring in the current market. Market information available for public debt transactions for
companies with ratings that are close to or lower than ratings for the company (without consideration for the third-party credit
enhancement) was used in estimating fair value. Management believes this fair value is a reasonable estimate with the information that
is available.
The carrying amounts, including accrued interest, and estimated fair values of the company’s fixed-rate borrowings at August 31,
2009 were $511,903 and $473,266, respectively, and at August 31, 2008 were $574,193 and $517,315, respectively. Carrying values,
including accrued interest, and estimated fair values for variable-rate borrowings at August 31, 2009 were $187,333 and $159,303,
respectively, and at August 31, 2008 were $185,219 and $185,253, respectively.
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First Quarter Second Quarter
2009 2008 2009 2008
Income statement data:
Partner Drive-In sales $ 153,047 $ 159,285 $ 141,708 $ 147,139
Gain on the sale of Partner Drive-Ins 236 (28) (47) 437
Other 30,783 30,924 27,336 27,045
Total revenues 184,066 190,181 168,997 174,621
Partner Drive-In operating expenses 130,635 129,174 121,784 119,497
Selling, general and administrative 16,162 14,914 16,300 15,540
Impairment of long-lived assets 414 ––99
Other 13,019 12,206 12,529 12,694
Total expenses 160,230 156,294 150,613 147,830
Income from operations 23,836 33,887 18,384 26,791
Debt extinguishment and other costs ––(6,382) –
Interest expense, net 11,666 11,980 10,778 12,214
Income before income taxes 12,170 21,907 13,988 14,577
Provision for income taxes 5,039 8,324 5,337 5,324
Net income $ 7,131 $ 13,583 $ 8,651 $ 9,253
Net income per share:
Basic $ 0.12 $ 0.22 $ 0.14 $ 0.15
Diluted $ 0.12 $ 0.22 $ 0.14 $ 0.15
Weighted average shares outstanding:
Basic 60,459 60,772 60,464 60,303
Diluted 61,210 63,065 61,148 62,384