SUSS » Topics » Other Intangibles

This excerpt taken from the SUSS 10-K filed Apr 2, 2007.

Other Intangibles

The Company has finite-lived intangible assets recorded that are amortized in accordance with SFAS No. 142. These assets consist of supply agreements, favorable leasehold arrangements, loan origination costs and a trade name, all of which are amortized over the respective lives of the agreements or over the period of time the assets are expected to contribute directly or indirectly to the Company’s future cash flows. Supply agreements are being amortized over a weighted average period of approximately nine years. Favorable leasehold arrangements are being amortized over a weighted average period of approximately eight years. The Laredo Taco Company trade name is being amortized over fifteen years. The following table presents the gross carrying amount and accumulated amortization for each major class of finite-lived intangible assets at January 1, 2006 and December 31, 2006:

 

     January 1, 2006    December 31, 2006
     Gross
Carrying
Amount
   Accumulated
Amortization
   Net
Amount
   Gross
Carrying
Amount
   Accumulated
Amortization
   Net
Amount
     (in thousands)

Supply agreements

   $ 5,655    $ 25    $ 5,630    $ 4,970    $ 779    $ 4,191

Favorable lease arrangements, net

     12,821      10      12,811      6,053      1,530      4,523

Loan origination costs

     7,629      33      7,596      5,594      816      4,778

Trade name

     12,118      —        12,118      4,245      283      3,962

Other

     200      144      56      200      162      38
                                         

Total

   $ 38,423    $ 212    $ 38,211    $ 21,062    $ 3,570    $ 17,492
                                         

Total amortization expense from finite-lived intangibles for 2004, 2005, and 2006 was $2.7 million, $4.9 million and $5.2 million, respectively. Included in amortization expense was the write-off of unamortized loan costs related to debt prepaid of $1.4 million, $3.3 million and $1.8 million in 2004, 2005 and 2006, respectively. The following table presents the Company’s estimate of amortization expense for each of the five succeeding fiscal years for finite-lived intangibles as of December 31, 2006:

 

     (in thousands)

2007

   $ 2,761

2008

     2,416

2009

     1,736

2010

     1,318

2011

     2,838
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