Sonic 2015 Annual Report Download - page 38

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Total rent expense for all operating leases consists of the following for the years ended August 31:
2015 2014 2013
Minimum rentals $ 12,659 $ 12,449 $ 13,154
Contingent rentals 174 161 93
Total rent expense 12,833 12,610 13,247
Less sublease rentals (2,235) (1,905) (1,747)
Net rent expense $ 10,598 $ 10,705 $ 11,500
8. Property, Equipment and Capital Leases
Property, equipment and capital leases consist of the following at August 31:
Estimated
Useful Life 2015 2014
Property, equipment and capital leases:
Land $ 157,861 $ 156,336
Buildings and improvements 8 – 25 yrs 343,256 345,309
Drive-In equipment 5 – 7 yrs 139,801 136,556
Brand technology development and other equipment 2 – 5 yrs 92,860 82,575
Property and equipment, at cost 733,778 720,776
Accumulated depreciation (330,219) (298,580)
Property and equipment, net 403,559 422,196
Capital leases Life of lease 48,079 50,243
Accumulated amortization (30,232) (30,470)
Capital leases, net 17,847 19,773
Property, equipment and capital leases, net $ 421,406 $ 441,969
Depreciation expense for property and equipment was $41.7 million, $37.6 million and $35.6 million for fiscal years
2015, 2014 and 2013, respectively. Land, buildings and equipment with a carrying amount of $165.8 million at August 31,
2015, were leased under operating leases to franchisees and other parties. The accumulated depreciation related to these
buildings and equipment was $63.1 million at August 31, 2015. Amortization expense related to capital leases is included
within “Depreciation and amortization” on the Consolidated Statements of Income. As of August 31, 2015, the Company had
three 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 $0.4 million, $0.5 million and $0.7 million for fiscal years 2015, 2014 and 2013, respectively.
9. Accrued Liabilities
Accrued liabilities consist of the following at August 31:
2015 2014
Wages and employee benefit costs $ 20,501 $ 14,302
Property taxes, sales and use taxes and employment taxes 9,282 9,570
Unredeemed gift cards 9,285 8,577
Dividend payable 13 4,852
Other 11,633 6,380
$ 50,714 $ 43,681
Notes to Consolidated Financial Statements
August 31, 2015, 2014 and 2013 (In thousands, except per share data)
36