At December 31, 2013, the Company was the lessee at 14,815 restaurant locations through ground leases (the Company leases the land and the Company or franchisee owns the building) and through improved leases (the Company leases land and buildings). Lease terms for most restaurants, where market conditions allow, are generally for 20 years and, in many cases, provide for rent escalations and renewal options, with certain leases providing purchase options. Escalation terms vary by geographic segment with examples including fixed-rent escalations, escalations based on an inflation index, and fair-value market adjustments. The timing of these escalations generally ranges from annually to every five years. For most locations, the Company is obligated for the related occupancy costs including property taxes, insurance and maintenance; however, for franchised sites, the Company requires the franchisees to pay these costs. In addition, the Company is the lessee under non-cancelable leases covering certain offices and vehicles.
The following table provides detail of rent expense:
|
| | | | | | | | | | | |
In millions | 2013 |
| | 2012 |
| | 2011 |
|
Company-operated restaurants: | | | | | |
U.S. | $ | 61.6 |
| | $ | 59.1 |
| | $ | 55.9 |
|
Outside the U.S. | 713.4 |
| | 661.0 |
| | 620.4 |
|
Total | 775.0 |
| | 720.1 |
| | 676.3 |
|
Franchised restaurants: | | | | | |
U.S. | 441.6 |
| | 433.0 |
| | 420.0 |
|
Outside the U.S. | 572.0 |
| | 519.7 |
| | 514.7 |
|
Total | 1,013.6 |
| | 952.7 |
| | 934.7 |
|
Other | 104.0 |
| | 104.2 |
| | 101.7 |
|
Total rent expense | $ | 1,892.6 |
| | $ | 1,777.0 |
| | $ | 1,712.7 |
|
Rent expense included percent rents in excess of minimum rents (in millions) as follows–Company-operated restaurants: 2013–$175.6; 2012–$169.6; 2011–$165.2. Franchised restaurants: 2013–$187.4; 2012–$178.7; 2011–$173.4.
Future minimum payments required under existing operating leases with initial terms of one year or more are:
|
| | | | | | | | | | | | | |
In millions | Restaurant | | | Other | | | Total |
|
2014 | | $ | 1,361.5 |
| | | $ | 78.9 |
| | $ | 1,440.4 |
|
2015 | | 1,266.3 |
| | | 67.5 |
| | 1,333.8 |
|
2016 | | 1,160.4 |
| | | 57.9 |
| | 1,218.3 |
|
2017 | | 1,051.4 |
| | | 47.4 |
| | 1,098.8 |
|
2018 | | 947.7 |
| | | 42.0 |
| | 989.7 |
|
Thereafter | | 7,444.9 |
| | | 187.0 |
| | 7,631.9 |
|
Total minimum payments | | $ | 13,232.2 |
| | | $ | 480.7 |
| | $ | 13,712.9 |
|
