Leases

At December 28, 2014, Wendy’s and its franchisees operated 6,515 Wendy’s restaurants. Of the 957 company-owned Wendy’s restaurants, Wendy’s owned the land and building for 444 restaurants, owned the building and held long-term land leases for 310 restaurants and held leases covering land and building for 203 restaurants. Lease terms are generally initially between 15 and 20 years and, in most cases, provide for rent escalations and renewal options. Certain leases contain contingent rent provisions that require additional rental payments based upon restaurant sales volume in excess of specified amounts. The Company also leases restaurant, office and transportation equipment. Certain leases also provide for payments of other costs such as real estate taxes, insurance and common area maintenance, which have been excluded from rental expense and future minimum rental payments set forth in the tables below.

As of December 28, 2014, Wendy’s also owned 230 and leased 488 properties that were either leased or subleased principally to franchisees. Initial lease terms are generally 20 years and, in most cases, provide for rent escalations and renewal options. Certain leases to franchisees also include contingent rent provisions based on sales volume exceeding specified amounts. The lessee bears the cost of real estate taxes, insurance and common area maintenance, which have been excluded from rental income and future minimum rental receipts set forth in the tables below.

Rental expense for operating leases consists of the following components:



	Year Ended
	2014		2013		2012
Rental expense:
Minimum rentals	$	76,218	$	68,445	$	70,525
Contingent rentals	19,967		10,421		10,971
Total rental expense (a)	$	96,185	$	78,866	$	81,496

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(a)	Amounts exclude sublease income of $46,743, $16,924, and $13,317 recognized during 2014, 2013 and 2012, respectively.

Rental income for operating leases and subleases consists of the following components:



	Year Ended
	2014		2013		2012
Rental income:
Minimum rentals	$	51,019	$	16,245	$	10,757
Contingent rentals	17,745		11,162		11,086
Total rental income	$	68,764	$	27,407	$	21,843

The following table illustrates the Company’s future minimum rental payments and rental receipts for non-cancelable leases and subleases, including rental receipts for direct financing leases as of December 28, 2014. Rental receipts below are presented separately for owned properties and for leased properties based on the classification of the underlying lease.



	Rental Payments					Rental Receipts
Fiscal Year	Capital Leases			Operating Leases		Capital Leases		Operating Leases		Owned Properties
2015	$	7,617		$	70,119	$	7,658	$	32,501	$	20,105
2016	7,110			64,537		7,783		32,285		20,010
2017	6,512			63,376		8,032		32,074		19,923
2018	7,585			61,290		7,750		31,187		20,096
2019	7,734			59,587		7,723		30,879		21,096
Thereafter	107,085			787,283		134,337		434,426		382,366
Total minimum payments	$	143,643		$	1,106,192	$	173,283	$	593,352	$	483,596
Less interest	(82,844		)
Present value of minimum capital lease payments (a)	$	60,799

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(a)	The present value of minimum capital lease payments of $821 and $59,978 are included in “Current portion of long-term debt” and “Long-term debt,” respectively.

Properties owned by the Company and leased to franchisees and other third parties under operating leases include:



	Year End
	2014			2013
Land	$	371,174		$	69,500
Buildings and improvements	399,541			194,246
Office, restaurant and transportation equipment	160,514			6,715
	931,229			270,461
Accumulated depreciation and amortization	(162,731		)	(79,536		)
	$	768,498		$	190,925

Our net investment in direct financing leases is as follows:



	Year Ended
	2014			2013
Future minimum rental receipts	$	109,674		$	74,625
Unearned income	(74,102		)	(53,654		)
Net investment in direct financing leases	35,572			20,971
Net current investment in direct financing leases (a)	(193		)	(226		)
Net non-current investment in direct financing leases (b)	$	35,379		$	20,745

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(a)	Included in “Accounts and notes receivable.”


(b)	Included in “Other assets.”