Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
May 31, 2018 | Jun. 27, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | SONIC CORP. | |
Entity Central Index Key | 868,611 | |
Current Fiscal Year End Date | --08-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | May 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 36,085,715 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | May 31, 2018 | Aug. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 44,869 | $ 22,340 |
Restricted cash | 15,017 | 19,736 |
Accounts and notes receivable, net | 37,571 | 33,758 |
Prepaid expenses and other current assets | 6,678 | 13,350 |
Total current assets | 104,135 | 89,184 |
Noncurrent restricted cash | 13,457 | 42,120 |
Notes receivable, net | 18,238 | 9,801 |
Property, equipment and capital leases | 605,594 | 616,001 |
Less accumulated depreciation and amortization | (304,724) | (303,621) |
Property, equipment and capital leases, net | 300,870 | 312,380 |
Goodwill | 75,344 | 75,756 |
Debt origination costs, net | 1,299 | 2,439 |
Other assets, net | 32,203 | 30,064 |
Total assets | 545,546 | 561,744 |
Current liabilities: | ||
Accounts payable | 11,649 | 9,213 |
Franchisee deposits | 530 | 1,093 |
Accrued liabilities | 38,375 | 44,846 |
Income taxes payable | 197 | 0 |
Current maturities of long-term debt and capital leases | 7,761 | 3,464 |
Total current liabilities | 58,512 | 58,616 |
Obligations under capital leases due after one year | 13,632 | 16,167 |
Long-term debt, net | 701,853 | 628,116 |
Deferred income taxes | 25,737 | 40,101 |
Other non-current liabilities | 19,072 | 20,502 |
Total non-current liabilities | 760,294 | 704,886 |
Stockholders’ deficit: | ||
Preferred stock, par value $.01; 1,000 shares authorized; none outstanding | 0 | 0 |
Common stock, par value $.01; 245,000 shares authorized; 118,309 shares issued (118,309 shares issued at August 31, 2017) | 1,183 | 1,183 |
Paid-in capital | 236,380 | 236,895 |
Retained earnings | 968,405 | 934,017 |
Treasury stock, at cost; 82,120 shares (78,081 shares at August 31, 2017) | (1,479,228) | (1,373,853) |
Total stockholders’ deficit | (273,260) | (201,758) |
Total liabilities and stockholders’ deficit | $ 545,546 | $ 561,744 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | May 31, 2018 | Aug. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 245,000,000 | 245,000,000 |
Common stock, issued (in shares) | 118,309,000 | 118,309,000 |
Treasury stock, shares (in shares) | 82,120,000 | 78,081,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | |
Revenues: | ||||
Company Drive-In sales | $ 66,587 | $ 72,062 | $ 182,217 | $ 223,500 |
Franchise Drive-Ins: | ||||
Franchise royalties and fees | 48,251 | 48,220 | 122,766 | 122,687 |
Lease revenue | 2,203 | 2,418 | 5,288 | 5,474 |
Other | 1,265 | 1,290 | 1,565 | 2,038 |
Total revenues | 118,306 | 123,990 | 311,836 | 353,699 |
Costs and expenses: | ||||
Food and packaging | 18,549 | 19,380 | 50,863 | 61,112 |
Payroll and other employee benefits | 23,468 | 25,590 | 67,325 | 82,688 |
Other operating expenses, exclusive of depreciation and amortization included below | 12,354 | 13,836 | 37,303 | 47,540 |
Total cost of Company Drive-In sales | 54,371 | 58,806 | 155,491 | 191,340 |
Selling, general and administrative | 21,118 | 20,763 | 57,733 | 58,813 |
Depreciation and amortization | 9,566 | 9,520 | 28,492 | 29,531 |
Other operating income, net | (4,010) | (540) | (4,503) | (11,105) |
Total costs and expenses | 81,045 | 88,549 | 237,213 | 268,579 |
Income from operations | 37,261 | 35,441 | 74,623 | 85,120 |
Interest expense | 8,598 | 7,318 | 24,411 | 21,734 |
Interest income | (524) | (291) | (1,361) | (1,047) |
Loss from debt transactions | 0 | 0 | 1,310 | 0 |
Net interest expense | 8,074 | 7,027 | 24,360 | 20,687 |
Income before income taxes | 29,187 | 28,414 | 50,263 | 64,433 |
Provision for income taxes | 7,611 | 9,663 | (2,350) | 21,601 |
Net income | $ 21,576 | $ 18,751 | $ 52,613 | $ 42,832 |
Basic income per share (usd per share) | $ 0.58 | $ 0.44 | $ 1.38 | $ 0.97 |
Diluted income per share (usd per share) | 0.58 | 0.44 | 1.36 | 0.96 |
Cash dividends declared per common share (usd per share) | $ 0.16 | $ 0.14 | $ 0.48 | $ 0.42 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 52,613 | $ 42,832 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 28,492 | 29,531 |
Stock-based compensation expense | 3,318 | 2,906 |
Loss from debt transactions | 1,310 | 0 |
Benefit from deferred income taxes | (14,279) | (1,354) |
Gain on disposition of assets, net | (4,989) | (12,097) |
Other | 1,821 | 1,388 |
Change in operating assets and liabilities: | ||
(Increase) decrease in restricted cash | 5,088 | 4,549 |
(Increase) decrease in accounts receivable and other assets | (5,749) | (2,124) |
Increase (decrease) in accounts payable | (705) | (2,894) |
Increase (decrease) in accrued and other liabilities | (3,998) | (12,701) |
Increase (decrease) in income taxes | 1,910 | 44 |
Total adjustments | 12,219 | 7,248 |
Net cash provided by operating activities | 64,832 | 50,080 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (24,523) | (37,146) |
Proceeds from sale of assets | 16,278 | 62,393 |
Proceeds from sale of investment in refranchised drive-in operations | 0 | 8,354 |
Issuance of notes receivable | (14,158) | (1,214) |
Collections on notes receivable | 6,232 | 10,114 |
Other | 659 | 1,674 |
Net cash provided by (used in) investing activities | (15,512) | 44,175 |
Cash flows from financing activities: | ||
Purchases of treasury stock | (110,621) | (128,180) |
Payment of dividends | (18,184) | (18,485) |
Payments on debt | (171,000) | (10,417) |
Proceeds from borrowings | 253,000 | 43,000 |
Restricted cash for securitization obligations | 28,294 | 203 |
Debt issuance costs and prepayment premiums | (5,121) | (10) |
Proceeds from exercise of stock options | 1,635 | 2,528 |
Other | (4,794) | (2,936) |
Net cash used in financing activities | (26,791) | (114,297) |
Net increase (decrease) in cash and cash equivalents | 22,529 | (20,042) |
Cash and cash equivalents at beginning of period | 22,340 | 72,092 |
Cash and cash equivalents at end of period | 44,869 | 52,050 |
Cash paid during the period for: | ||
Interest | 22,626 | 20,210 |
Income taxes (net of refunds) | 10,175 | 22,985 |
Non-cash investing and financing activities: | ||
Net additions to capital lease obligations | 97 | 1,433 |
Change in obligation to acquire treasury stock | (1,521) | (516) |
Stock options exercised by swap | $ 2,697 | $ 0 |
Basis Of Presentation
Basis Of Presentation | 9 Months Ended |
May 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis Of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) and with the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements of Sonic Corp. (the “Company”). In the opinion of management, these financial statements reflect all adjustments of a normal recurring nature, including recurring accruals, necessary for the fair presentation of the Company’s financial position, results of operations and cash flows for the interim periods presented in conformity with GAAP. In certain situations, recurring accruals, including franchise royalties, are based on more limited information at interim reporting dates than at the Company’s fiscal year end due to the abbreviated reporting period. Actual results may differ from these estimates. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended August 31, 2017 , included in the Company’s Annual Report on Form 10-K. Interim results are not necessarily indicative of the results that may be expected for a full year or any other interim period. Principles of Consolidation The accompanying financial statements include the accounts of the Company, its wholly owned subsidiaries and a number of Company Drive-Ins in which a subsidiary has a controlling ownership interest. All intercompany accounts and transactions have been eliminated. New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers,” which requires an entity to recognize revenue in an amount that reflects the consideration to which the entity expects to be entitled for the transfer of promised goods or services to customers. The standard also requires additional disclosure regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The ASU will replace most of the existing revenue recognition requirements in U.S. GAAP when it becomes effective. Further, the FASB has issued clarifying guidance with ASU No. 2016-08, “Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” ASU No. 2016-10, “Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing,” and ASU No. 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.” ASU No. 2016-08 provides guidance for evaluating when another party, along with the entity, is involved in providing a good or service to a customer. ASU No. 2016-10 clarifies assessing whether promises to transfer goods or services are distinct, and whether an entity's promise to grant a license provides a customer with a right to use or right to access the entity's intellectual property. ASU No. 2016-20 provides corrections or improvements to issues that affect narrow aspects of the guidance. The Company plans to adopt the standards in the first quarter of fiscal year 2019 using the cumulative effect transition method. The Company does not believe the new revenue recognition standard will impact the recognition of sales from Company Drive-Ins or the recognition of royalty fees from franchisees, nor will it have a material impact to the recognition of gift card breakage. The Company expects the pronouncement will impact the recognition of the initial franchise fee, which is currently recognized upon the opening of a Franchise Drive-In. The impact on these fees is not expected to be material to total revenue. The Company is finalizing the impact of the required cumulative effect adjustment to be recorded to the balance sheet on the date of initial application and continues to evaluate the effect this pronouncement will have on principal versus agent considerations, other transactions, the financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, “Leases.” The new standard, which replaces existing lease guidance, requires lessees to recognize on the balance sheet a liability to make lease payments and a corresponding right-of-use asset. The guidance also requires certain qualitative and quantitative disclosures designed to assess the amount, timing and uncertainty of cash flows arising from leases. Accounting guidance for lessors is largely unchanged. In January 2018, the FASB issued ASU No. 2018-01. ASU 2018-01 permits an entity to elect an optional transition practical expedient to forgo the evaluation of land easements that existed or expired before the entity’s adoption of 2016-02 and that were not accounted for as leases under previous lease guidance. The standard is effective for fiscal year 2020, with early application permitted. This standard requires adoption based upon a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with optional practical expedients. Based on a preliminary assessment, the Company expects that most of its operating lease commitments will be subject to the new guidance and recognized as operating lease liabilities and right-of-use assets upon adoption, resulting in a significant increase in the assets and liabilities on the consolidated balance sheet. The Company is continuing its assessment, which may identify additional impacts this standard will have on its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses.” The update was issued to provide more decision-useful information about the expected credit losses on financial instruments. The update replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The update is effective for fiscal year 2021, with early adoption permitted for fiscal years beginning after December 15, 2018. The update should be adopted using a modified-retrospective approach. The Company is currently evaluating the effect this update will have on its financial statements and related disclosures. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments.” The update is intended to reduce diversity in practice in how certain transactions are classified and will make eight targeted changes to how cash receipts and cash payments are presented in the statement of cash flows. The update is effective for fiscal year 2019. The new standard will require adoption on a retrospective basis unless it is impracticable to apply, in which case the amendments will apply prospectively as of the earliest date practicable. The Company is currently evaluating the effect of this update but does not believe it will have a material impact on its financial statements and related disclosures. In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory,” as part of its simplification initiatives. The update requires that an entity recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs, rather than deferring the recognition until the asset has been sold to an outside party as is required under current GAAP. The update is effective for fiscal year 2019. The new standard will require adoption on a modified retrospective basis through a cumulative-effect adjustment to retained earnings, and early adoption is permitted. The Company is currently evaluating the effect of this update but does not believe it will have a material impact on its financial statements and related disclosures. In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows - Restricted Cash.” The update requires that restricted cash balances be included in the beginning and ending cash balance within the statement of cash flows. The update is effective for fiscal year 2019. The amendments should be adopted on a retrospective basis for each period presented, and early adoption is permitted. The adoption will increase the beginning and ending cash balance within the Company's statement of cash flows by its restricted cash balances and will require a new disclosure to reconcile the cash balances within the statement of cash flows to the balance sheets. The Company does not expect any other material impacts to its financial statements. In May 2017, the FASB issued ASU No. 2017-09, “Compensation - Stock Compensation: Scope of Modification Accounting,” which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. An entity will account for the effects of a modification unless the fair value of the modified award is the same as the original award, the vesting conditions of the modified award are the same as the original award and the classification of the modified award as an equity instrument or liability instrument is the same as the original award. The update is effective for fiscal year 2019. The update is to be adopted prospectively to an award modified on or after the adoption date. Early adoption is permitted. The Company is currently evaluating the effect of this update but does not believe it will have a material impact on its financial statements and related disclosures. The Company has reviewed all other recently issued accounting pronouncements and concluded they are not applicable or not expected to be significant to our operations. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
May 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share: Three months ended Nine months ended 2018 2017 2018 2017 Numerator: Net income $ 21,576 $ 18,751 $ 52,613 $ 42,832 Denominator: Weighted average common shares outstanding– basic 36,924 42,402 38,178 43,972 Effect of dilutive employee stock options and unvested restricted stock units 392 691 455 757 Weighted average common shares outstanding – diluted 37,316 43,093 38,633 44,729 Net income per common share – basic $ 0.58 $ 0.44 $ 1.38 $ 0.97 Net income per common share – diluted $ 0.58 $ 0.44 $ 1.36 $ 0.96 Anti-dilutive securities excluded (1) 1,898 1,362 1,534 1,095 __________________ (1) Anti-dilutive securities consist of stock options and unvested restricted stock units that were not included in the computation of diluted earnings per share because either the exercise price of the options was greater than the average market price of the common stock or the total assumed proceeds under the treasury stock method resulted in negative incremental shares and thus the inclusion would have been anti-dilutive. |
Share Repurchase Program
Share Repurchase Program | 9 Months Ended |
May 31, 2018 | |
Equity [Abstract] | |
Share Repurchase Program | Share Repurchase Program During fiscal year 2017 , approximately 6.7 million shares were repurchased under the Company's share repurchase program for a total cost of $172.9 million , resulting in an average price per share of $25.71 . In August 2017, the Board of Directors approved an incremental $160.0 million share repurchase authorization of the Company's outstanding shares of common stock through August 31, 2018. During the first nine months of fiscal year 2018 , approximately 4.3 million shares were repurchased for a total cost of $109.1 million , resulting in an average price per share of $25.23 . The total remaining authorized under the share repurchase program as of May 31, 2018 was $50.9 million . Subsequent to the end of the quarter, the Board of Directors authorized a $500.0 million share repurchase program through August 31, 2021, replacing the Company’s previous fiscal year 2018 authorization. Including amounts purchased during the first nine months of the fiscal year, the total remaining authorized under the share repurchase program is $390.9 million . Share repurchases may be made from time to time in the open market or otherwise, including through an accelerated share repurchase program, under terms of a Rule 10b5-1 plan, in privately negotiated transactions or in round lot or block transactions. The share repurchase program may be extended, modified, suspended or discontinued at any time. |
Income Taxes
Income Taxes | 9 Months Ended |
May 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The following table presents the Company’s provision for income taxes and effective income tax rate for the periods below: Three months ended Nine months ended 2018 2017 2018 2017 Provision for income taxes $ 7,611 $ 9,663 $ (2,350 ) $ 21,601 Effective income tax rate 26.1 % 34.0 % (4.7 )% 33.5 % The lower effective income tax rate during the third quarter and first nine months of fiscal year 2018 was due primarily to the recognition of the impacts of the Tax Cuts and Jobs Act (“TCJA”) discussed below. On December 22, 2017, the TCJA was signed into law, significantly impacting several sections of the Internal Revenue Code. The most significant impacts on the Company for fiscal year 2018 include: • Effective January 1, 2018, the U.S. corporate federal statutory income tax rate was reduced from 35% to 21% . Because of our fiscal year end, the Company's statutory federal tax rate is 25.7% for fiscal year 2018 and 21% for fiscal year 2019 and thereafter. • The Company remeasured its existing deferred tax assets and liabilities at the rate the Company expects to be in effect when those deferred taxes will be realized (either 25.7% if in 2018 or 21% thereafter). The Company recognized a discrete benefit from the deferred tax remeasurement of approximately $14.1 million in the second quarter of fiscal year 2018. In December 2017, the SEC provided guidance allowing registrants to record provisional amounts, during a specified measurement period, when the necessary information is not available, prepared or analyzed in reasonable detail to account for the impact of the TCJA. Accordingly, we have reported the revaluation of our deferred tax assets and liabilities based on provisional amounts. In the three months ended May 31, 2018, no material changes to the provisional amounts occurred. Among the factors that could affect the accuracy of our provisional amounts is uncertainty about the statutory tax rate applicable to our deferred income tax assets and liabilities, since the actual rate will be dependent on the timing of realization or settlement of such assets and liabilities. At May 31, 2018, we estimated the dates when such realization or settlement would occur. The actual dates when such realization or settlement occurs may be significantly different from our estimates, which could result in the ultimate revaluation of our deferred income taxes to be different from our provisional amounts. In addition, there is uncertainty about the impact of expected Internal Revenue Service guidance intended to interpret the most complex provisions of the TCJA. We are currently assessing the potential additional impact of the TCJA on our consolidated financial statements and expect to complete such assessment on or before August 31, 2018. The difference between our U.S. federal statutory income tax rate and our effective income tax rate for the nine months ended May 31, 2018 and 2017 is summarized below: Nine months ended Nine months ended U.S. federal statutory income tax rate 25.7 % 35.0 % State income taxes, net of federal tax benefit 3.4 % 2.6 % Federal tax benefit of statutory tax deduction (1.3 )% (1.4 )% Employment related and other tax credits, net (1.5 )% (1.7 )% Stock option excess tax benefit (2.8 )% (1.4 )% Deferred tax revaluation (28.1 )% — % Other (0.1 )% 0.4 % Effective tax rate (4.7 )% 33.5 % |
Accounts And Notes Receivable
Accounts And Notes Receivable | 9 Months Ended |
May 31, 2018 | |
Receivables [Abstract] | |
Accounts And Notes Receivable | Accounts and Notes Receivable Accounts and notes receivable consist of the following: May 31, August 31, Current accounts and notes receivable: Royalties and other trade receivables $ 21,046 $ 19,571 Notes receivable from franchisees 1,311 1,441 Receivables from system funds 6,540 6,360 Other 9,775 7,475 Accounts and notes receivable, gross 38,672 34,847 Allowance for doubtful accounts and notes receivable (1,101 ) (1,089 ) Current accounts and notes receivable, net $ 37,571 $ 33,758 Noncurrent notes receivable: Receivables from franchisees $ 8,562 $ 6,810 Receivables from system funds 10,113 3,033 Allowance for doubtful notes receivable (437 ) (42 ) Noncurrent notes receivable, net $ 18,238 $ 9,801 The Company’s receivables are primarily due from franchisees, all of whom are in the restaurant business. Substantially all of the notes receivable from franchisees are collateralized by real estate or equipment. The receivables from system funds represent transactions in the normal course of business. |
Contingencies
Contingencies | 9 Months Ended |
May 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Litigation As reported in the Annual Report on Form 10-K for the year ended August 31, 2017, the Company was named as a defendant in five purported class action complaints related to a payment card breach at certain Sonic Drive-Ins. The Company has since been named as a defendant in four additional purported class action complaints filed on October 9, 2017, in the United States District Court for the Northern District of Ohio, on November 3, 2017, in the United States District Court for the Northern District of Texas, on November 13, 2017, in the United States District Court for the District of Arizona, and on December 17, 2017, in the Northern District of Illinois. Each of these complaints asserted various claims related to the Company’s alleged failure to safeguard customer credit card information, and the plaintiffs sought monetary damages, injunctive and declaratory relief and attorneys’ fees and costs. The cases were centralized in the Northern District of Ohio for coordinated or consolidated pretrial proceedings, and a consolidated complaint was filed. The Company believes it has meritorious defenses to the litigation and intends to vigorously oppose the claims asserted in the complaint. We cannot reasonably estimate the range of potential losses that may be associated with the litigation because of the early stage of the lawsuit. We also cannot provide assurance we will not become subject to other inquiries or claims relating to the payment card breach in the future. Although we maintain cyber liability insurance, we currently believe it is possible the ultimate amount paid by us, if we are unsuccessful in defending the litigation, will be in excess of our cyber liability insurance coverage applicable to claims of this nature. We are unable to estimate the amount of any such excess. The Company is involved in various other legal proceedings and has certain unresolved claims pending. Based on the information currently available, management believes all such other claims currently pending are either covered by insurance or would not have a material adverse effect on the Company’s business or financial condition. Note Repurchase Agreement On December 20, 2013, the Company extended a note purchase agreement to a bank that serves to guarantee the repayment of a franchisee loan, with a term through 2018 . In the event of default by the franchisee, the Company would purchase the franchisee loan from the bank, thereby becoming the note holder and providing an avenue of recourse with the franchisee. The Company recorded a liability for this guarantee which was based on the Company’s estimate of fair value. As of May 31, 2018 , the balance of the franchisee’s loan was $5.2 million . Lease Commitments The Company has obligations under various operating lease agreements with third-party lessors related to the real estate for certain Company Drive-In operations that were sold to franchisees. Under these agreements, which expire through 2029 , the Company remains secondarily liable for the lease payments for which it was responsible as the original lessee. As of May 31, 2018 , the amount remaining under these guaranteed lease obligations totaled $15.4 million . At this time, the Company does not anticipate any material defaults under the foregoing leases; therefore, zero liability has been provided. |
Fair Value Of Financial Instrum
Fair Value Of Financial Instruments | 9 Months Ended |
May 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Of Financial Instruments | Fair Value of Financial Instruments The fair value of financial instruments is the amount at which the instrument could be exchanged in a current transaction between willing parties. The Company has no financial liabilities that are required to be measured at fair value on a recurring basis. The Company categorizes its assets and liabilities recorded at fair value based on the following fair value hierarchy established by the FASB: • Level 1 valuations use quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date. An active market is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. • Level 2 valuations use inputs other than actively quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include: (a) quoted prices for similar assets or liabilities in active markets, (b) quoted prices for identical or similar assets or liabilities in markets that are not active, (c) inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves observable at commonly quoted intervals and (d) inputs that are derived principally from or corroborated by observable market data by correlation or other means. • Level 3 valuations use unobservable inputs for the asset or liability. Unobservable inputs are used to the extent observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. The Company’s cash equivalents, some of which are included in restricted cash, are carried at cost which approximates fair value and totaled $63.8 million at May 31, 2018 and $73.9 million at August 31, 2017 . This fair value is estimated using Level 1 inputs. At May 31, 2018 , the fair value of the Company’s Series 2018-1 Senior Secured Fixed Rate Notes, Class A-2 (the “2018 Fixed Rate Notes”), the Series 2016-1 Senior Secured Fixed Rate Notes, Class A-2 (the “2016 Fixed Rate Notes”) and the Series 2013-1 Senior Secured Fixed Rate Notes, Class A-2 (the “2013 Fixed Rate Notes” and together with the 2018 Fixed Rate Notes and 2016 Fixed Rate Notes, the “Fixed Rate Notes”) approximated the carrying value, including accrued interest, of $720.4 million . At August 31, 2017 , the fair value of the Company's 2016 Fixed Rate Notes and 2013 Fixed Rate Notes approximated the carrying value, including accrued interest, of $578.2 million . At May 31, 2018 , there was no balance on the Company's Series 2016-1 Senior Secured Variable Funding Notes, Class A-1 (the “2016 Variable Funding Notes” and, together with the Fixed Rate Notes, the “Notes”). At August 31, 2017 the fair value of the 2016 Variable Funding Notes approximated the carrying value of $60.1 million , including accrued interest. The fair value of the Notes is estimated using Level 2 inputs from market information available for public debt transactions for companies with ratings that are similar to the Company’s ratings and from information gathered from brokers who trade in the Company’s notes. |
Debt
Debt | 9 Months Ended |
May 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt During the second quarter of fiscal year 2018, the Company made a pro rata prepayment of $28.0 million on its 2013 Fixed Rate Notes and 2016 Fixed Rate Notes. The prepayment was made at par, as allowed under the note terms. On February 1, 2018 , various subsidiaries of the Company (the “Co-Issuers”) issued $170.0 million of 2018 Fixed Rate Notes in a private transaction which bears interest at 4.03% per annum. The 2018 Fixed Rate Notes have an expected life of seven years with an anticipated repayment date in February 2025 . At May 31, 2018 , the balance outstanding under the 2018 Fixed Rate Notes including accrued interest totaled $170.2 million and carried a weighted-average interest cost of 4.40% , including the effect of the loan origination costs described below. Sonic used a portion of the net proceeds from the issuance of the 2018 Fixed Rate Notes to pay down the outstanding portion of the 2016 Variable Funding Notes and to pay the costs associated with the securitized financing transaction. In conjunction with the issuance of the 2018 Fixed Rate Notes, the commitments under the 2016 Variable Funding Notes were reduced to $100.0 million . Loan origination costs associated with the Company’s 2018 Fixed Rate Notes totaled $5.0 million . Loan costs are amortized over each note’s expected life, and the unamortized balance related to the 2016 Variable Funding Notes and the Fixed Rate Notes is included in debt origination costs, net and long-term debt, net, respectively, on the condensed consolidated balance sheets. In connection with the 2018 transactions described above, the Company recognized a $1.3 million loss during the second quarter of fiscal year 2018 . The loss consisted of a $0.7 million write-off of unamortized deferred debt origination costs related to the reduction of the 2016 Variable Funding Notes commitments, as well as a $0.4 million write-off of unamortized deferred debt origination costs related to the prepayment on its 2013 Fixed Rate Notes and 2016 Fixed Rate Notes. Additionally, as required by the terms of the 2016 Fixed Rate Notes, the Company paid a $0.2 million prepayment premium. While the 2018 Fixed Rate Notes have an expected life of seven years, they have a legal final maturity date of February 2048 . The Company intends to repay or refinance the 2018 Fixed Rate Notes on or before the end of their respective expected life. In the event the 2018 Fixed Rate Notes are not paid in full by the end of their expected life, the Notes are subject to an upward adjustment in the annual interest rate of at least 5% . In addition, principal payments will accelerate by applying all of the royalties, lease revenues and other fees securing the debt, after deducting certain expenses, until the debt is paid in full. Also, any unfunded amount under the 2016 Variable Funding Notes will become unavailable. The Co-Issuers and Sonic Franchising LLC (the “Guarantor”) are existing special purpose, bankruptcy remote, indirect subsidiaries of Sonic Corp. that hold substantially all of Sonic’s franchising assets and real estate. As of May 31, 2018 , assets for these combined indirect subsidiaries totaled $255.2 million , including receivables for royalties, certain Company and Franchise Drive-In real estate, intangible assets and restricted cash balances of $28.5 million . The Notes are secured by franchise fees, royalty payments and lease payments, and the repayment of the Notes is expected to be made solely from the income derived from the Co-Issuer’s assets. In addition, the Guarantor, a Sonic Corp. subsidiary that acts as a franchisor, has guaranteed the obligations of the Co-Issuers under the Notes and pledged substantially all of its assets to secure those obligations. Neither Sonic Corp., the ultimate parent of the Co-Issuers and the Guarantor, nor any other subsidiary of Sonic, guarantees or in any way is liable for the obligations of the Co-Issuers under the 2018 Fixed Rate Notes. The Company has, however, agreed to cause the performance of certain obligations of its subsidiaries, principally related to managing the assets included as collateral for the 2018 Fixed Rate Notes and certain indemnity obligations relating to the transfer of the collateral assets to the Co-Issuers. The 2018 Fixed Rate Notes are subject to a series of covenants and restrictions similar to the Company’s 2016 Fixed Rate Notes and customary for transactions of this type. If certain covenants or restrictions are not met, the Notes are subject to customary accelerated repayment events and events of default. Although management does not anticipate an event of default or any other event of noncompliance with the provisions of the debt, if such event occurred, the unpaid amounts outstanding could become immediately due and payable. |
Other Operating Income
Other Operating Income | 9 Months Ended |
May 31, 2018 | |
Other Income and Expenses [Abstract] | |
Other Operating Income | Other Operating Income During the first quarter of fiscal year 2017, the Company recorded a gain of $3.8 million on the sale of minority investments in franchise operations retained as part of a refranchising transaction that occurred in fiscal year 2009. The gain is reflected in other operating income, net, on the condensed consolidated statement of income. |
Refranchising
Refranchising | 9 Months Ended |
May 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Refranchising | Refranchising During the third quarter of fiscal year 2018, the Company recognized a net gain of $3.2 million related to the refranchised operations of 41 drive-ins and retained a non-controlling minority investment in the franchise operations. These transactions represent additional markets identified after completion of the refranchising initiative in fiscal year 2017 and bring the Company to a 95% franchised system. The Company completed a previously announced refranchising initiative in fiscal year 2017. During the first six months of fiscal year 2017, 110 Company Drive-Ins were refranchised, and the Company retained a non-controlling minority investment in most of the franchise operations. The gains and losses related to refranchised drive-ins are recorded in other operating income, net, on the condensed consolidated statement of income. Income from minority investments is included in other revenue on the condensed consolidated statements of income. In addition to the refranchised drive-ins discussed above in which the Company retained a non-controlling minority investment in the operations, the Company also refranchised the operations of two drive-ins during the third quarter and eight drive-ins during the first nine months of fiscal year 2018, respectively, compared to five drive-ins refranchised during the third quarter and first nine months of fiscal year 2017. These refranchising transactions all occurred in the normal course of business and did not result in any retained interests. The following is a summary of the pretax activity recorded as a result of the refranchising initiative transactions in fiscal year 2017 (in thousands, except number of refranchised Company Drive-Ins): Three months ended Nine months ended Number of refranchised Company Drive-Ins — 110 Proceeds from sales of Company Drive-Ins $ — $ 20,036 Proceeds from sale of real estate (1) 4,749 4,749 Proceeds receivable from sale of real estate (1) 6,977 6,977 Real estate assets sold (1) (12,095 ) (12,095 ) Assets sold, net of retained minority investment (2) 847 (7,891 ) Initial and subsequent lease payments for real estate option (1) 195 (3,201 ) Goodwill related to sales of Company Drive-Ins — (966 ) Deferred gain for real estate option (3) 141 (899 ) Gain (loss) on assets held for sale — (65 ) Refranchising initiative gains, net $ 814 $ 6,645 _______________ (1) During the first quarter of fiscal year 2017, as part of a 53 drive-in refranchising transaction, a portion of the proceeds was applied as the initial payment for an option to purchase the real estate within the next 24 months. The franchisee initiated exercise of the option during the third fiscal quarter and a portion of the proceeds was received after the quarter ended. Until the option was fully exercised, the franchisee made monthly lease payments which were included in other operating income, net of sub-lease expense. (2) Net assets sold consisted primarily of equipment. During the third quarter of fiscal year 2017, the Company made an adjustment to retained minority investment. (3) The deferred gain of $0.9 million is recorded in other non-current liabilities as a result of a real estate purchase option extended to the franchisee in the second quarter of fiscal year 2017. The deferred gain will continue to be amortized into income through January 2020 when the option becomes exercisable. |
Basis Of Presentation (Policy)
Basis Of Presentation (Policy) | 9 Months Ended |
May 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles Of Consolidation | Principles of Consolidation The accompanying financial statements include the accounts of the Company, its wholly owned subsidiaries and a number of Company Drive-Ins in which a subsidiary has a controlling ownership interest. All intercompany accounts and transactions have been eliminated. |
New Accounting Pronouncements | Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers,” which requires an entity to recognize revenue in an amount that reflects the consideration to which the entity expects to be entitled for the transfer of promised goods or services to customers. The standard also requires additional disclosure regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The ASU will replace most of the existing revenue recognition requirements in U.S. GAAP when it becomes effective. Further, the FASB has issued clarifying guidance with ASU No. 2016-08, “Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” ASU No. 2016-10, “Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing,” and ASU No. 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.” ASU No. 2016-08 provides guidance for evaluating when another party, along with the entity, is involved in providing a good or service to a customer. ASU No. 2016-10 clarifies assessing whether promises to transfer goods or services are distinct, and whether an entity's promise to grant a license provides a customer with a right to use or right to access the entity's intellectual property. ASU No. 2016-20 provides corrections or improvements to issues that affect narrow aspects of the guidance. The Company plans to adopt the standards in the first quarter of fiscal year 2019 using the cumulative effect transition method. The Company does not believe the new revenue recognition standard will impact the recognition of sales from Company Drive-Ins or the recognition of royalty fees from franchisees, nor will it have a material impact to the recognition of gift card breakage. The Company expects the pronouncement will impact the recognition of the initial franchise fee, which is currently recognized upon the opening of a Franchise Drive-In. The impact on these fees is not expected to be material to total revenue. The Company is finalizing the impact of the required cumulative effect adjustment to be recorded to the balance sheet on the date of initial application and continues to evaluate the effect this pronouncement will have on principal versus agent considerations, other transactions, the financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, “Leases.” The new standard, which replaces existing lease guidance, requires lessees to recognize on the balance sheet a liability to make lease payments and a corresponding right-of-use asset. The guidance also requires certain qualitative and quantitative disclosures designed to assess the amount, timing and uncertainty of cash flows arising from leases. Accounting guidance for lessors is largely unchanged. In January 2018, the FASB issued ASU No. 2018-01. ASU 2018-01 permits an entity to elect an optional transition practical expedient to forgo the evaluation of land easements that existed or expired before the entity’s adoption of 2016-02 and that were not accounted for as leases under previous lease guidance. The standard is effective for fiscal year 2020, with early application permitted. This standard requires adoption based upon a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with optional practical expedients. Based on a preliminary assessment, the Company expects that most of its operating lease commitments will be subject to the new guidance and recognized as operating lease liabilities and right-of-use assets upon adoption, resulting in a significant increase in the assets and liabilities on the consolidated balance sheet. The Company is continuing its assessment, which may identify additional impacts this standard will have on its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses.” The update was issued to provide more decision-useful information about the expected credit losses on financial instruments. The update replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The update is effective for fiscal year 2021, with early adoption permitted for fiscal years beginning after December 15, 2018. The update should be adopted using a modified-retrospective approach. The Company is currently evaluating the effect this update will have on its financial statements and related disclosures. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments.” The update is intended to reduce diversity in practice in how certain transactions are classified and will make eight targeted changes to how cash receipts and cash payments are presented in the statement of cash flows. The update is effective for fiscal year 2019. The new standard will require adoption on a retrospective basis unless it is impracticable to apply, in which case the amendments will apply prospectively as of the earliest date practicable. The Company is currently evaluating the effect of this update but does not believe it will have a material impact on its financial statements and related disclosures. In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory,” as part of its simplification initiatives. The update requires that an entity recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs, rather than deferring the recognition until the asset has been sold to an outside party as is required under current GAAP. The update is effective for fiscal year 2019. The new standard will require adoption on a modified retrospective basis through a cumulative-effect adjustment to retained earnings, and early adoption is permitted. The Company is currently evaluating the effect of this update but does not believe it will have a material impact on its financial statements and related disclosures. In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows - Restricted Cash.” The update requires that restricted cash balances be included in the beginning and ending cash balance within the statement of cash flows. The update is effective for fiscal year 2019. The amendments should be adopted on a retrospective basis for each period presented, and early adoption is permitted. The adoption will increase the beginning and ending cash balance within the Company's statement of cash flows by its restricted cash balances and will require a new disclosure to reconcile the cash balances within the statement of cash flows to the balance sheets. The Company does not expect any other material impacts to its financial statements. In May 2017, the FASB issued ASU No. 2017-09, “Compensation - Stock Compensation: Scope of Modification Accounting,” which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. An entity will account for the effects of a modification unless the fair value of the modified award is the same as the original award, the vesting conditions of the modified award are the same as the original award and the classification of the modified award as an equity instrument or liability instrument is the same as the original award. The update is effective for fiscal year 2019. The update is to be adopted prospectively to an award modified on or after the adoption date. Early adoption is permitted. The Company is currently evaluating the effect of this update but does not believe it will have a material impact on its financial statements and related disclosures. The Company has reviewed all other recently issued accounting pronouncements and concluded they are not applicable or not expected to be significant to our operations. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
May 31, 2018 | |
Earnings Per Share [Abstract] | |
Computation Of Basic And Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share: Three months ended Nine months ended 2018 2017 2018 2017 Numerator: Net income $ 21,576 $ 18,751 $ 52,613 $ 42,832 Denominator: Weighted average common shares outstanding– basic 36,924 42,402 38,178 43,972 Effect of dilutive employee stock options and unvested restricted stock units 392 691 455 757 Weighted average common shares outstanding – diluted 37,316 43,093 38,633 44,729 Net income per common share – basic $ 0.58 $ 0.44 $ 1.38 $ 0.97 Net income per common share – diluted $ 0.58 $ 0.44 $ 1.36 $ 0.96 Anti-dilutive securities excluded (1) 1,898 1,362 1,534 1,095 __________________ (1) Anti-dilutive securities consist of stock options and unvested restricted stock units that were not included in the computation of diluted earnings per share because either the exercise price of the options was greater than the average market price of the common stock or the total assumed proceeds under the treasury stock method resulted in negative incremental shares and thus the inclusion would have been anti-dilutive. |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
May 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule Of Provision (Benefit) For Income Taxes And Effective Income Tax Rate | The following table presents the Company’s provision for income taxes and effective income tax rate for the periods below: Three months ended Nine months ended 2018 2017 2018 2017 Provision for income taxes $ 7,611 $ 9,663 $ (2,350 ) $ 21,601 Effective income tax rate 26.1 % 34.0 % (4.7 )% 33.5 % |
Schedule of Effective Income Tax Rate Reconciliation | The difference between our U.S. federal statutory income tax rate and our effective income tax rate for the nine months ended May 31, 2018 and 2017 is summarized below: Nine months ended Nine months ended U.S. federal statutory income tax rate 25.7 % 35.0 % State income taxes, net of federal tax benefit 3.4 % 2.6 % Federal tax benefit of statutory tax deduction (1.3 )% (1.4 )% Employment related and other tax credits, net (1.5 )% (1.7 )% Stock option excess tax benefit (2.8 )% (1.4 )% Deferred tax revaluation (28.1 )% — % Other (0.1 )% 0.4 % Effective tax rate (4.7 )% 33.5 % |
Accounts And Notes Receivable (
Accounts And Notes Receivable (Tables) | 9 Months Ended |
May 31, 2018 | |
Receivables [Abstract] | |
Schedule Of Accounts And Notes Receivable | Accounts and notes receivable consist of the following: May 31, August 31, Current accounts and notes receivable: Royalties and other trade receivables $ 21,046 $ 19,571 Notes receivable from franchisees 1,311 1,441 Receivables from system funds 6,540 6,360 Other 9,775 7,475 Accounts and notes receivable, gross 38,672 34,847 Allowance for doubtful accounts and notes receivable (1,101 ) (1,089 ) Current accounts and notes receivable, net $ 37,571 $ 33,758 Noncurrent notes receivable: Receivables from franchisees $ 8,562 $ 6,810 Receivables from system funds 10,113 3,033 Allowance for doubtful notes receivable (437 ) (42 ) Noncurrent notes receivable, net $ 18,238 $ 9,801 |
Refranchising (Tables)
Refranchising (Tables) | 9 Months Ended |
May 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Summary of the pretax activity recorded as a result of the refranchising initiative | The following is a summary of the pretax activity recorded as a result of the refranchising initiative transactions in fiscal year 2017 (in thousands, except number of refranchised Company Drive-Ins): Three months ended Nine months ended Number of refranchised Company Drive-Ins — 110 Proceeds from sales of Company Drive-Ins $ — $ 20,036 Proceeds from sale of real estate (1) 4,749 4,749 Proceeds receivable from sale of real estate (1) 6,977 6,977 Real estate assets sold (1) (12,095 ) (12,095 ) Assets sold, net of retained minority investment (2) 847 (7,891 ) Initial and subsequent lease payments for real estate option (1) 195 (3,201 ) Goodwill related to sales of Company Drive-Ins — (966 ) Deferred gain for real estate option (3) 141 (899 ) Gain (loss) on assets held for sale — (65 ) Refranchising initiative gains, net $ 814 $ 6,645 _______________ (1) During the first quarter of fiscal year 2017, as part of a 53 drive-in refranchising transaction, a portion of the proceeds was applied as the initial payment for an option to purchase the real estate within the next 24 months. The franchisee initiated exercise of the option during the third fiscal quarter and a portion of the proceeds was received after the quarter ended. Until the option was fully exercised, the franchisee made monthly lease payments which were included in other operating income, net of sub-lease expense. (2) Net assets sold consisted primarily of equipment. During the third quarter of fiscal year 2017, the Company made an adjustment to retained minority investment. (3) The deferred gain of $0.9 million is recorded in other non-current liabilities as a result of a real estate purchase option extended to the franchisee in the second quarter of fiscal year 2017. The deferred gain will continue to be amortized into income through January 2020 when the option becomes exercisable. |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 21,576 | $ 18,751 | $ 52,613 | $ 42,832 |
Weighted average common shares outstanding– basic (in shares) | 36,924 | 42,402 | 38,178 | 43,972 |
Effect of dilutive employee stock options and unvested restricted stock units (in shares) | 392 | 691 | 455 | 757 |
Weighted average common shares outstanding – diluted (in shares) | 37,316 | 43,093 | 38,633 | 44,729 |
Net income per common share – basic (usd per share) | $ 0.58 | $ 0.44 | $ 1.38 | $ 0.97 |
Net income per common share – diluted (usd per share) | $ 0.58 | $ 0.44 | $ 1.36 | $ 0.96 |
Anti-dilutive securities excluded (in shares) | 1,898 | 1,362 | 1,534 | 1,095 |
Share Repurchase Program (Detai
Share Repurchase Program (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 9 Months Ended | 12 Months Ended | |
May 31, 2018 | Aug. 31, 2017 | Jun. 05, 2018 | |
Equity, Class of Treasury Stock [Line Items] | |||
Shares repurchase authorized amount | $ 160 | ||
Shares acquired through stock repurchase program (in shares) | 4.3 | 6.7 | |
Purchase of treasury stock | $ 109.1 | $ 172.9 | |
Weighted-average price per share (usd per share) | $ 25.23 | $ 25.71 | |
Remaining amount authorized for repurchase through share repurchase program | $ 50.9 | ||
Repurchase Program Through August 31, 2021 [Member] | Subsequent Event [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Shares repurchase authorized amount | $ 500 | ||
Remaining amount authorized for repurchase through share repurchase program | $ 390.9 |
Income Taxes (Schedule Of Provi
Income Taxes (Schedule Of Provision (Benefit) For Income Taxes And Effective Income Tax Rate) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes | $ 7,611 | $ 9,663 | $ (2,350) | $ 21,601 |
Effective income tax rate | 26.10% | 34.00% | (4.70%) | 33.50% |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Feb. 28, 2018 | May 31, 2018 | May 31, 2017 | Aug. 31, 2019 | Aug. 31, 2018 | |
Income Tax Contingency [Line Items] | |||||
U.S. federal statutory income tax rate | 25.70% | 35.00% | |||
Benefit from deferred tax remeasurement | $ 14.1 | ||||
Scenario, Forecast [Member] | |||||
Income Tax Contingency [Line Items] | |||||
U.S. federal statutory income tax rate | 21.00% | 25.70% |
Income Taxes Income Taxes (Sche
Income Taxes Income Taxes (Schedule of Effective Income Tax Rate Reconciliation) (Details) | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | |
Income Tax Disclosure [Abstract] | ||||
U.S. federal statutory income tax rate | 25.70% | 35.00% | ||
State income taxes, net of federal tax benefit | 3.40% | 2.60% | ||
Federal tax benefit of statutory tax deduction | (1.30%) | (1.40%) | ||
Employment related and other tax credits, net | (1.50%) | (1.70%) | ||
Stock option excess tax benefit | (2.80%) | (1.40%) | ||
Deferred tax revaluation | (28.10%) | 0.00% | ||
Other | (0.10%) | 0.40% | ||
Effective tax rate | 26.10% | 34.00% | (4.70%) | 33.50% |
Accounts And Notes Receivable26
Accounts And Notes Receivable (Details) - USD ($) $ in Thousands | May 31, 2018 | Aug. 31, 2017 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Royalties and other trade receivables | $ 21,046 | $ 19,571 |
Current accounts and notes receivable, gross | 38,672 | 34,847 |
Allowance for doubtful accounts and notes receivable | (1,101) | (1,089) |
Current accounts and notes receivable, net | 37,571 | 33,758 |
Allowance for doubtful notes receivable | (437) | (42) |
Noncurrent notes receivable, net | 18,238 | 9,801 |
Notes Receivable From Franchisees [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Current accounts and notes receivable, gross | 1,311 | 1,441 |
Noncurrent accounts and notes receivable, gross | 8,562 | 6,810 |
Receivables From System Funds [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Current accounts and notes receivable, gross | 6,540 | 6,360 |
Noncurrent accounts and notes receivable, gross | 10,113 | 3,033 |
Other [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Current accounts and notes receivable, gross | $ 9,775 | $ 7,475 |
Contingencies (Details)
Contingencies (Details) | 9 Months Ended |
May 31, 2018USD ($) | |
Note Repurchase Agreement [Member] | |
Loss Contingencies [Line Items] | |
Guarantor Obligations, Term | 2,018 |
Guaranteed obligations | $ 5,200,000 |
Guarantee Operating Lease Obligations [Member] | |
Loss Contingencies [Line Items] | |
Guarantor Obligations, Term | 2,029 |
Guaranteed obligations | $ 15,400,000 |
Guaranteed liability, carrying value | $ 0 |
Fair Value Of Financial Instr28
Fair Value Of Financial Instruments (Narrative) (Details) - USD ($) $ in Millions | May 31, 2018 | Aug. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents carried at cost | $ 63.8 | $ 73.9 |
2016 and 2013 Fixed Rate Notes [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, carrying value, including accrued interest | 578.2 | |
2016 and 2013 Fixed Rate Notes [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | 578.2 | |
2016 Variable Rate Notes [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, carrying value, including accrued interest | 0 | 60.1 |
2016 Variable Rate Notes [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | 0 | $ 60.1 |
2013, 2016, and 2018 Fixed Rate Notes [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, carrying value, including accrued interest | 720.4 | |
2013, 2016, and 2018 Fixed Rate Notes [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value | $ 720.4 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||
May 31, 2018 | Feb. 28, 2018 | May 31, 2017 | Feb. 28, 2018 | May 31, 2018 | May 31, 2017 | Feb. 01, 2018 | Aug. 31, 2017 | |
Debt Instrument [Line Items] | ||||||||
Pro rata prepayment | $ 171,000,000 | $ 10,417,000 | ||||||
Debt origination costs, net | $ 1,299,000 | 1,299,000 | $ 2,439,000 | |||||
Loss from debt transactions | 0 | $ 0 | $ 1,300,000 | 1,310,000 | $ 0 | |||
Prepayment premium | $ 200,000 | 200,000 | ||||||
Total assets | 545,546,000 | 545,546,000 | $ 561,744,000 | |||||
Co-Issuers And Guarantor [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Total assets | 255,200,000 | 255,200,000 | ||||||
Restricted cash | $ 28,500,000 | $ 28,500,000 | ||||||
Class A-2 2013 and 2016 Fixed Rate Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Pro rata prepayment | 28,000,000 | 28,000,000 | ||||||
Write-off of unamortized debt origination costs | 400,000 | 400,000 | ||||||
Class A-2 2018 Fixed Rate Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, face amount | $ 170,000,000 | |||||||
Senior secured notes interest rate, percentage | 4.03% | 4.03% | ||||||
Expected life of debt instrument | 7 years | |||||||
Debt instrument, maturity year | Feb. 20, 2025 | |||||||
Accrued interest | $ 170,200,000 | $ 170,200,000 | ||||||
Weighted-average interest cost, percentage | 4.40% | 4.40% | ||||||
Debt origination costs, net | 5,000,000 | 5,000,000 | ||||||
Legal final maturity date | Feb. 20, 2048 | |||||||
2016 Variable Funding Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, face amount | $ 100,000,000 | |||||||
Write-off of unamortized debt origination costs | $ 700,000 | $ 700,000 | ||||||
Interest Rate Upward Adjustment Due To Nonpayment [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Senior secured notes interest rate, percentage | 5.00% | 5.00% |
Other Operating Income (Details
Other Operating Income (Details) $ in Millions | 3 Months Ended |
Nov. 30, 2016USD ($) | |
Other Income and Expenses [Abstract] | |
Gain on sale of investments in franchise operations | $ 3.8 |
Refranchising (Narrative) (Deta
Refranchising (Narrative) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
May 31, 2018USD ($)franchise | May 31, 2017USD ($)franchise | Nov. 30, 2016franchise | May 31, 2018franchise | May 31, 2017USD ($)franchise | |
Franchisor Disclosure [Line Items] | |||||
Refranchised company drive-ins | 2 | 5 | 8 | 5 | |
Franchise restaurant ownership target | 95.00% | 95.00% | |||
2017 Refranchising [Member] | |||||
Franchisor Disclosure [Line Items] | |||||
Refranchising initiative gains, net | $ | $ 814 | $ 6,645 | |||
Refranchised company drive-ins | 0 | 53 | 110 | ||
2018 Refranchising [Member] | |||||
Franchisor Disclosure [Line Items] | |||||
Refranchising initiative gains, net | $ | $ 3,200 | ||||
Refranchised company drive-ins | 41 |
Refranchising Summary of the pr
Refranchising Summary of the pretax activity recorded as a result of the refranchising initiative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
May 31, 2018USD ($)franchise | May 31, 2017USD ($)franchise | Nov. 30, 2016franchise | May 31, 2018USD ($)franchise | May 31, 2017USD ($)franchise | Aug. 31, 2017USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number of refranchised Company Drive-Ins | franchise | 2 | 5 | 8 | 5 | ||
Proceeds from sales of Company Drive-Ins | $ 16,278 | $ 62,393 | ||||
Proceeds receivable from sale of real estate | $ 38,672 | $ 38,672 | $ 34,847 | |||
2017 Refranchising [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number of refranchised Company Drive-Ins | franchise | 0 | 53 | 110 | |||
Proceeds from sales of Company Drive-Ins | $ 0 | $ 20,036 | ||||
Proceeds from sale of real estate | 4,749 | 4,749 | ||||
Initial and subsequent lease payments for real estate option | 195 | (3,201) | ||||
Goodwill related to sales of Company Drive-Ins | 0 | (966) | ||||
Deferred gain for real estate option | 141 | (899) | ||||
Gain (loss) on assets held for sale | 0 | (65) | ||||
Refranchising initiative gains, net | 814 | 6,645 | ||||
Land and Building [Member] | 2017 Refranchising [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Assets sold, net of retained minority investment | (12,095) | (12,095) | ||||
Equipment [Member] | 2017 Refranchising [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Assets sold, net of retained minority investment | 847 | (7,891) | ||||
Proceeds from sale of real estate [Member] | 2017 Refranchising [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Proceeds receivable from sale of real estate | $ 6,977 | $ 6,977 |