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8. Property, Equipment and Capital Leases
Property, equipment and capital leases consist of the following at August 31::
Estimated Useful Life 2014 2013
Property, equipment and capital leases:
Land $ 156,336 $ 153,868
Buildings and improvements 8 – 25 yrs 345,309 336,383
Drive-In equipment 5 – 7 yrs 136,556 114,990
Brand technology development and other equipment 2 – 5 yrs 82,575 76,585
Property and equipment, at cost 720,776 681,826
Accumulated depreciation (298,580) (301,236)
Property and equipment, net 422,196 380,590
Capital leases Life of lease 50,243 47,371
Accumulated amortization (30,470) (28,300)
Capital leases, net 19,773 19,071
Property, equipment and capital leases, net $ 441,969 $ 399,661
Depreciation expense for property and equipment was $37.6 million, $35.6 million and $37.2 million for fiscal years 2014,
2013 and 2012, respectively. Land, buildings and equipment with a carrying amount of $163.8 million at August 31, 2014, were
leased under operating leases to franchisees and other parties. The accumulated depreciation related to these buildings and
equipment was $58.2 million at August 31, 2014. Amortization expense related to capital leases is included within “Depreciation and
amortization” on the Consolidated Statements of Income. As of August 31, 2014, the Company had two drive-ins under construction
with costs to complete.
Interest incurred in connection with the construction of new drive-ins and technology projects is capitalized. Capitalized
interest was $0.5 million, $0.7 million and $0.3 million for fiscal years 2014, 2013 and 2012, respectively.
9. Accrued Liabilities
Accrued liabilities consist of the following at August 31:
2014 2013
Wages and employee benefit costs $ 14,302 $ 14,611
Property taxes, sales and use taxes and employment taxes 9,570 9,219
Unredeemed gift cards 8,577 8,272
Dividend payable 4,852 –
Other 6,380 5,119
$ 43,681 $ 37,221
10. Debt
Long-term debt consists of the following at August 31:
2014 2013
Class A-2 2013-1 senior secured fixed rate notes $ 155,000 $ 155,000
Class A-2 2011-1 senior secured fixed rate notes 282,238 291,988
Other 80 306
437,318 447,294
Less long-term debt due within one year (9,791) (9,914)
Long-term debt due after one year $ 427,527 $ 437,380
Notes to Consolidated Financial Statements
August 31, 2014, 2013 and 2012 (In thousands, except per share data)
37