Sonic 2011 Annual Report Download - page 50

Download and view the complete annual report

Please find page 50 of the 2011 Sonic annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 60

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60

4 8
Restricted Stock Units
The fair value of each RSU granted is equal to the market price of the company’s stock at the date of the grant. A summary
of the company’s RSU activity during the year ended August 31, 2011 is presented in the following table:
Weighted-Average
Restricted Grant Date Fair
Share Units Value
Outstanding at September 1, 2010 197 $ 8.89
Granted 23 11.19
Vested (70) 10.40
Forfeited ––
Outstanding at August 31, 2011 150 $ 9.20
The aggregate fair value of restricted stock that vested during the years ended August 31, 2011 and 2010 was
$0.7 million and $0.1 million, respectively.
At August 31, 2011, total remaining unrecognized compensation cost related to unvested stock-based arrangements
was $6.7 million and is expected to be recognized over a weighted average period of 1.6 years.
Comprehensive Income
In August 2006, the company entered into a forward starting swap agreement with a financial institution to hedge
part of the exposure to changing interest rates until new financing was closed. The forward starting swap was designated
as a cash flow hedge, and was subsequently settled in conjunction with the closing of the 2006 Fixed Rate Notes, as
planned. The loss resulting from settlement was recorded net of tax in accumulated other comprehensive income and
amortized to interest expense over the expected term of the debt. In conjunction with the company’s May 2011 refinancing
discussed in note 10 – Debt, the company’s deferred hedging loss was reclassified from accumulated other comprehensive
income into earnings during third quarter fiscal year 2011.
Comprehensive income is computed as net income plus the net change in deferred hedging losses. Comprehensive
income attributable to Sonic Corp. was $20.1 million, $21.9 million and $50.1 million for the fiscal years 2011, 2010 and
2009, respectively. Comprehensive income attributable to noncontrolling interests was $0.9 million, $4.6 million and
$15.4 million for the fiscal years 2011, 2010 and 2009, respectively.
14. Segment Information
ASC Topic 280 – “Segment Reporting” 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.
Based on internal reporting and management structure, the company has two reportable segments: Company Drive-
Ins and Franchise Operations. The Company Drive-Ins segment consists of the drive-in operations in which the company
owns a controlling ownership interest and derives its revenues from operating drive-in restaurants. The Franchise Operations
segment consists of franchising activities and derives its revenues from royalties, initial franchise fees and lease revenues
received from franchisees. The accounting policies of the segments are described in note 1 - 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.
Notes to Consolidated Financial Statements
August 31, 2011, 2010 and 2009 (In thousands, except per share data)