8. Property, Equipment and Capital Leases

Property, equipment and capital leases consist of the following at August 31:



	Estimated
	Useful Life	2013		2012
Property, equipment and capital leases:
Land		$	153,868	$	171,102
Buildings and improvements	8 – 25 yrs		336,383		363,428
Drive-In Equipment	5 – 7 yrs		114,990		118,975
Brand technology development and other equipment	2 – 5 yrs		76,585		61,492
Property and equipment, at cost			681,826		714,997
Accumulated depreciation			(301,236)		(295,735)
Property and equipment, net			380,590		419,262

Capital leases	Life of lease		47,371		49,896
Accumulated amortization			(28,300)		(26,150)
Capital leases, net			19,071		23,746
Property, equipment and capital leases, net		$	399,661	$	443,008

Depreciation expense for property and equipment was $35.6 million, $37.2 million and $37.3 million for fiscal years 2013, 2012 and 2011, respectively. Land, buildings and equipment with a carrying amount of $157.0 million at August 31, 2013, were leased under operating leases to franchisees and other parties. The accumulated depreciation related to these buildings and equipment was $51.6 million at August 31, 2013. Amortization expense related to capital leases is included within “Depreciation and amortization” on the Consolidated Statements of Income and Comprehensive Income. As of August 31, 2013, the Company had no drive-ins under construction with costs to complete.

Interest incurred in connection with the construction of new drive-ins and technology projects is capitalized. Capitalized interest was $0.7 million and $0.3 million for fiscal years 2013 and 2012, respectively. No interest was capitalized in fiscal year 2011.