UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
11-K
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[X]
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ANNUAL
REPORT PURSUANT TO SECTION 15(d)
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OF
THE SECURITIES EXCHANGE ACT OF 1934
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For
the Year Ended December 31, 2004
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OR
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[
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TRANSITION
REPORT PURSUANT TO SECTION 15(d)
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OF
THE SECURITIES EXCHANGE ACT OF 1934
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For
the Transition Period from __________ to
__________
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Commission
File Number: 0-18859
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A.
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Full
title of the plan and the address of the plan, if different from
that of
the issuer named below:
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Sonic
Corp. Savings and Profit Sharing Plan
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B.
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Name
of issuer of the securities held pursuant to the plan and the address
of
its principal executive
office:
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Sonic
Corp.
300
Johnny Bench Drive
Oklahoma
City, Oklahoma 73104
Sonic
Corp. Savings and Profit Sharing Plan
Financial
Statements and Supplemental Schedule
As
of December 31, 2004 and 2003, and for the Year Ended December 31,
2004
Contents
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Audited
Financial Statements
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Supplemental
Schedule
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The
Plan Administrator
Sonic
Corp. Savings and Profit Sharing Plan
We
have audited the accompanying statements of net assets available for benefits
of
Sonic Corp. Savings and Profit Sharing Plan as of December 31, 2004 and 2003,
and the related statement of changes in net assets available for benefits for
the year ended December 31, 2004. These financial statements are the
responsibility of the Plan’s management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. We were not engaged to perform
an
audit of the Plan’s internal control over financial reporting. Our audits
considered internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Plan’s internal
control over financial reporting. Accordingly, we express no such opinion.
An
audit includes examining, on a test basis, evidence supporting the amounts
and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In
our opinion, the financial statements referred to above present fairly, in
all
material respects, the net assets available for benefits of the Plan as of
December 31, 2004 and 2003, and the changes in net assets available for benefits
for the year ended December 31, 2004, in conformity with U.S. generally accepted
accounting principles.
Our
audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at the end of year) as of December 31, 2004, is presented for the purpose
of additional analysis and is not a required part of the basic financial
statements, but is supplementary information required by the Department of
Labor’s Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This supplemental schedule is the
responsibility of the Plan’s management. The supplemental schedule has been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
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/s/
Ernst & Young LLP |
| Oklahoma City, Oklahoma | ||
| June 2, 2005 | ||
1
Statements
of Net Assets Available for Benefits
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December
31,
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2004
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2003
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Cash
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$
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4,081
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$
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1,029
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Investments
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16,849,450
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12,673,709
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Receivables:
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Contributions:
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Participants
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39,527
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37,459
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Employer
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24,179
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22,110
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Participant
loans
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5,036
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4,564
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Accrued
interest
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866
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1,232
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Total
receivables
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69,608
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65,365
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Total
assets
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16,923,139
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12,740,103
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Liabilities:
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Excess
deferrals and other
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4,081
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1,015
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Net
assets available for benefits
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$
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16,919,058
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$
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12,739,088
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See
accompanying notes.
2
Sonic Corp.
Savings
and Profit Sharing Plan
Statement of Changes in Net Assets Available for Benefits
Year
Ended December 31, 2004
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Additions:
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Investment
income:
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Net
appreciation in fair value of investments
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$
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2,230,371
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Interest
and dividends
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321,353
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Investment
income
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2,551,724
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Contributions:
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Participants
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1,432,285
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Employer
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756,985
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2,189,270
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Total
additions
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4,740,994
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Deductions:
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Benefit
payments
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545,238
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Administrative
expenses
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15,786
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Total
deductions
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561,024
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Increase
in net assets available for benefits
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4,179,970
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Net
assets available for benefits at beginning of year
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12,739,088
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Net
assets available for benefits at end of year
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$
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16,919,058
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See
accompanying notes.
3
Notes to Financial Statements
December 31, 2004 and 2003
1.
Description of the Plan
General
The
Sonic Corp. Savings and Profit Sharing Plan (the Plan), is a defined
contribution plan covering substantially all employees of Sonic Corp. (the
Employer), who have completed three consecutive months of service or at least
1,000 hours of service in any eligibility computation period, as defined in
the
plan agreement. The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended (ERISA). Reference should be made to
the
Plan agreement for more complete information.
Contributions
Participants
may contribute up to 50% of pretax annual compensation, as defined in the plan
document. Participants may also rollover amounts representing distributions
from
other qualified defined benefit or defined contribution plans, which totaled
$142,471 in 2004. Participants direct the investment of their contributions
into
various investment options offered by the Plan. The Company voluntarily matched
up to 4.5% (100% of the first 3%, plus 50% of the next 3%) of participants’
compensation for the year ended December 31, 2004. Additional profit sharing
amounts may be contributed at the option of the Company’s Board of Directors.
Contributions are subject to certain limitations.
Participants’
Accounts
Each
participant’s account is credited with the participant’s contribution and
allocations of the Company’s contributions and Plan earnings. Allocations are
based on participant compensation or account balances, as defined. Participants
direct their contributions and the Company’s contributions into investment
options selected by the Plan Administrator. Forfeited balances of terminated
participants’ nonvested accounts are used to reduce plan expenses, then future
Company contributions. The benefit to which a participant is entitled is the
benefit that can be provided from the participant’s vested account. Included in
the Plan assets at December 31, 2004 and 2003, were $55,697 and $48,067,
respectively, of unallocated forfeited nonvested accounts.
4
Vesting
Participants
are vested immediately in their contributions plus actual earnings thereon.
Vesting in the Company contributions is based on years of continuous service.
A
participant is 100% vested after six years of credited service.
Participant
Loans
Participants
may borrow from their fund accounts a minimum of $1,000 up to a maximum of
$50,000 or 50% of their vested account balance, whichever is less. The loans
are
secured by the balance in the participant’s account and bear interest at rates
which are commensurate with local prevailing rates as determined quarterly
by
the plan administrator. Principal and interest are paid ratably through payroll
deductions.
Payment
of Benefits
On
termination of service, death, disability, or retirement, a participant may
elect to receive a lump-sum payment in an amount equal to the value of the
participant’s vested interest or may elect to receive monthly, quarterly, or
annual installments over a period of not more than the participant’s assumed
life expectancy.
Administration
The
Plan is administered by the Company. Certain administrative expenses incurred
by
the Plan are paid by the Company, which were not material in 2004.
Termination
Although
it has not expressed any intent to do so, the Company has the right to terminate
the Plan at any time. Upon termination of the Plan, the rights of participants
under the Plan shall become 100% vested and nonforfeitable and the net assets
of
the Plan would be distributed by the Plan Administrator.
5
2.
Summary of Significant Accounting Policies
Basis
of Accounting
The
accompanying financial statements are prepared on the accrual basis of
accounting. Benefits paid to participants are recorded when paid.
Investment
Valuation and Income Recognition
The
Plan’s investments are stated at fair value. Shares of registered investment
companies are valued at published market prices, which represent the net asset
value of shares held by the Plan at December 31, 2004 and 2003. The Company’s
common stock is valued at its quoted market price. Participant loans are valued
at their outstanding balances which approximates fair value.
Purchases
and sales of securities are recorded on a trade-date basis. Interest income
is
recorded on the accrual basis. Dividends are recorded on the ex-dividend
date.
The
Plan invests in various investment securities. Investment securities are exposed
to various risks, such as interest rate, credit and market risks. Due to the
level of risk associated with certain investment securities, it is at least
reasonably possible that changes in the values of investment securities will
occur in the near term and that such changes could materially affect the
participants’ account balances and the amounts reported in the statements of net
assets available for benefits.
Use
of Estimates
The
preparation of financial statements in conformity with U.S. generally accepted
accounting principles requires management to make estimates that affect the
amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
6
3.
Investments
The
Plan's investments are held by Nationwide Trust Company. The following presents
investments that represent 5% or more of the Plan’s net assets:
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December
31,
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2004
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2003
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American
Funds EuroPacific Growth Fund/ A
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$
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2,244,866
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$
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–
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American
Funds Growth Fund of America/ A
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2,295,202
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1,794,724
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Dreyfus
Intermediate Term Income Fund
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1,858,559
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1,506,268
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Putnam
International Growth
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–
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1,681,381
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SEI
Stable Asset
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1,025,484
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839,435
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State
Street Research Aurora A
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1,251,893
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945,034
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Van
Kampen Growth and Income A
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2,915,679
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2,240,965
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Sonic
Corp. common stock
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4,017,124
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2,618,194
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The
Plan’s investments (including gains and losses on investments bought and sold,
as well as held during the year) appreciated in fair value as
follows:
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For
the Year
Ended
December
31, 2004
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Registered
investment companies
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$
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897,526
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Sonic
Corp. common stock
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1,332,845
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Net
appreciation in fair value of investments
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$
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2,230,371
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7
4.
Income Tax Status
The
Plan has received a determination letter from the Internal Revenue Service
(IRS)
dated March 25, 2003 stating that the Plan is qualified under Section 401(a)
of
the Internal Revenue Code (the Code) and, therefore, the related trust is exempt
from taxation. Subsequent to this determination by the IRS, the Plan was
amended. Once qualified, the Plan is required to operate in conformity with
the
Code to maintain its qualification. The plan administrator believes the Plan
is
being operated in compliance with the applicable requirements of the Code and,
therefore, believes that the Plan, as amended, is qualified and the related
trust is tax-exempt.
5.
Related-Party Transactions
A
portion of the Plan’s assets are invested in the Company’s common stock. Because
the Company is the Plan Sponsor, transactions involving the Company’s common
stock qualify as party-in-interest transactions. All of these transactions
are
exempt from the prohibited transaction rules.
8
Supplemental
Schedule
Schedule
H, Line 4i - Schedule of Assets (Held at End of Year)
Plan
Number 001
EIN:
73-1371046
December
31, 2004
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(a)
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(b)
Identity
of Issuer, Borrower,
Lessor
or Similar Party
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(c)
Description
of
Investment including maturity date, rate of interest, collateral, par or maturity value |
(e)
Market
Value
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AIM
Small Cap Growth Fund
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27,088
shares
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$
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743,839
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American
Funds EuroPacific Growth/A
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63,005
shares
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2,244,866
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American
Funds Growth Fund of America/A
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83,828
shares
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2,295,202
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Cash
Management Trust of America
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203,887
shares
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203,893
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Dreyfus
Intermediate Term Income Fund
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143,629
shares
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1,858,559
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SEI
Stable Asset
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1,025,484
shares
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1,025,484
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State
Street Research Aurora A
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30,926
shares
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1,251,893
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Van
Kampen Growth and Income A
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144,412
shares
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2,915,679
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*
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Sonic
Corp. common stock
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131,709
shares
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4,017,124
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*
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Participant
Loans
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Participant
loans, interest rates from 5.18 % to 10.5%
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292,911
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Total
assets held for investment
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$
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16,849,450
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*Indicates
party-in-interest to the Plan.
Column
(d) is not applicable as investments are participant-directed.
10
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the trustees (or
other persons who administer the employee benefit plan) have duly caused this
annual report to be signed on its behalf by the undersigned thereunto duly
authorized.
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Sonic
Corp. Savings and Profit Sharing Plan
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By:
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/s/ Nancy L. Robertson | ||
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Nancy
L. Robertson, Chair of the Sonic
Corp.
Savings and Profit Sharing Plan
Advisory
Committee
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Date:
June 23, 2005
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