Leases (Tables)

12 Months Ended

Dec. 31, 2014

Summary of Assets Lease, Property and Equipment, Net

Assets leased to franchisees and other third parties under operating leases, where we are the lessor, that are included within our property and equipment, net was as follows (in millions):


	As of December 31,
	2014			2013
Land	$	778.8		$	421.7
Buildings and improvements		1,276.2			397.9
Restaurant equipment		47.0			2.7

Gross property and equipment leased		2,102.0			822.3
Accumulated depreciation		(155.5	)		(130.3	)

Net property and equipment leased	$	1,946.5		$	692.0

Summary of Net Investment, Direct Financing Leases

Our net investment in direct financing leases was as follows (in millions):


	As of December 31,
	2014			2013
Future rents to be received
Future minimum lease receipts	$	154.4		$	184.8
Contingent rents⁽¹⁾		78.1			92.1
Estimated unguaranteed residual value		22.2			23.8
Unearned income		(97.1	)		(120.5	)
Allowance on direct financing leases		(0.3	)		(0.3	)

		157.3			179.9
Current portion included within trade receivables		(16.8	)		(16.8	)

Net investment in property leased to franchisees	$	140.5		$	163.1

(1)	Amounts represent estimated contingent rents recorded in connection with the acquisition method of accounting.

Summary of Future Minimum Lease Receipts and Commitments

As of December 31, 2014, future minimum lease receipts and commitments were as follows (in millions):


	Lease Receipts				Lease Commitments (a)
	Direct Financing Leases		Operating Leases		Capital Leases			Operating Leases
2015	$	22.8	$	367.6	$	35.4		$	186.0
2016		22.5		333.2		37.4			183.9
2017		21.9		301.6		28.0			158.0
2018		20.4		269.8		27.1			151.0
2019		15.2		237.8		24.7			133.4
Thereafter		51.6		1,500.4		173.4			922.3

Total minimum payments	$	154.4	$	3,010.4	$	326.0		$	1,734.6

Less amount representing interest						(131.6	)

Present value of minimum capital lease payments						194.4
Current portion of capital lease obligation						(18.7	)

Long-term portion of capital lease obligation					$	175.7

(a)	Lease commitments under operating leases have not been reduced by minimum sublease rentals of $1,752.9 million due in the future under noncancelable subleases.

Summary of Property Revenue

Property revenues are comprised primarily of rental income from operating leases and earned income on direct financing leases with franchisees as follows (in millions):


	2014		2013		2012
Rental income:
Minimum	$	180.5	$	165.9	$	108.1
Contingent		39.7		25.0		17.4
Amortization of favorable and unfavorable income lease contracts, net		5.7		5.6		6.3

Total rental income		225.9		196.5		131.8
Earned income on direct financing leases		15.3		17.2		19.5

Total property revenues	$	241.2	$	213.7	$	151.3

Summary of Rent Expense Associated with Lease Commitments

Rent expense associated with the lease commitments is as follows (in millions):


	2014		2013		2012
Rental expense:
Minimum	$	109.1	$	115.0	$	148.8
Contingent		8.0		4.9		9.3
Amortization of favorable and unfavorable payable lease contracts, net		3.1		0.9		(2.4	)

Total rental expense (a)	$	120.2	$	120.8	$	155.7

(a)	Amounts include rental expense related to properties subleased to franchisees of $103.3 million for 2014, $94.0 million for 2013 and $74.4 million for 2012.

Impact of Favorable and Unfavorable Lease Amortization on Operating Income

The impact of favorable and unfavorable lease amortization on operating income is as follows (in millions):


	2014			2013			2012

Franchise and property revenues	$	5.7		$	5.6		$	6.3
Cost of sales		(0.3	)		(1.3	)		(3.4	)
Franchise and property expenses		3.4			2.2			1.0

Estimated Future Amortization of Favorable and Unfavorable Lease Contracts

Estimated future amortization of favorable and unfavorable lease contracts subject to amortization are as follows (in millions):


	Cost of Sales					Franchise and Property Revenue					Franchise and Property Expenses
	Favorable		Unfavorable			Favorable		Unfavorable			Favorable		Unfavorable
2015	$	0.3	$	(0.3	)	$	12.9	$	(17.6	)	$	42.3	$	(37.2	)
2016		0.2		(0.3	)		12.7		(17.4	)		42.1		(37.1	)
2017		0.2		(0.3	)		12.5		(17.1	)		41.9		(36.7	)
2018		0.2		(0.2	)		12.0		(16.6	)		41.6		(36.2	)
2019		0.2		(0.1	)		11.7		(15.5	)		40.7		(35.5	)
Thereafter		2.2		(0.2	)		22.5		(30.7	)		53.9		(56.2	)

Total	$	3.3	$	(1.4	)	$	84.3	$	(114.9	)	$	262.5	$	(238.9	)