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Leases (Tables)

12 Months Ended

Dec. 29, 2019

Dec. 30, 2018

The components of lease cost for 2019 are as follows:



	Year Ended
	2019
Finance lease cost:
Amortization of finance lease assets	$	11,241
Interest on finance lease liabilities	37,012
	48,253
Operating lease cost	90,537
Variable lease cost (a)	58,978
Short-term lease cost	4,717
Total operating lease cost (b)	154,232
Total lease cost	$	202,485

_______________


(a)	Includes expenses for executory costs of $37,758, for which the Company is reimbursed by sublessees.

(b)

Includes $123,899 recorded to “Franchise rental expense” for leased properties that are subsequently leased to franchisees and $27,419 recorded to “Cost of sales” for leases for Company-operated restaurants.

Schedule of Rent Expense

The components of rental expense for operating leases for 2018 and 2017, as accounted for under previous guidance, were as follows:



	Year Ended
	2018		2017
Rental expense:
Minimum rentals	$	95,749	$	90,889
Contingent rentals	18,971		19,021
Total rental expense (a)	$	114,720	$	109,910

_______________


(a)	Amounts include rental expense related to (1) leases for Company-operated restaurants recorded to “Cost of sales,” (2) leased properties that are subsequently leased to franchisees recorded to “Franchise rental expense” and (3) leases for corporate offices and equipment recorded to “General and administrative.”

Schedule of Supplemental Cash Flow and Non-cash Information Related to Leases

The following table includes supplemental cash flow and non-cash information related to leases:



	Year Ended
	2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	39,887
Operating cash flows from operating leases	91,824
Financing cash flows from finance leases	6,835
Right-of-use assets obtained in exchange for lease obligations:
Finance lease liabilities	50,061
Operating lease liabilities	15,411

Schedule of Supplemental Information Related to Leases

The following table includes supplemental information related to leases:



	Year End
	December 29, 2019
Weighted-average remaining lease term (years):
Finance leases	17.1
Operating leases	15.4

Weighted average discount rate:
Finance leases	9.87		%
Operating leases	5.09		%

Supplemental balance sheet information:
Finance lease assets, gross	$	242,889
Accumulated amortization	(42,745		)
Finance lease assets	200,144
Operating lease assets	857,199

Finance Lease, Liability, Maturity

The following table illustrates the Company’s future minimum rental payments for non-cancelable leases as of December 29, 2019:



	Finance Leases						Operating Leases
Fiscal Year	Company-Operated			Franchise and Other			Company-Operated			Franchise and Other
2020	$	3,088		$	47,041		$	19,971		$	70,301
2021	3,220			46,932			19,783			70,272
2022	3,270			48,079			19,473			70,176
2023	3,223			49,709			19,439			70,026
2024	3,316			50,069			19,385			69,901
Thereafter	40,096			664,005			183,460			755,026
Total minimum payments	$	56,213		$	905,835		$	281,511		$	1,105,702
Less interest	(24,543		)	(445,653		)	(86,422		)	(359,279		)
Present value of minimum lease payments (a) (b)	$	31,670		$	460,182		$	195,089		$	746,423

_______________


(a)	The present value of minimum finance lease payments of $11,005 and $480,847 are included in “Current portion of finance lease liabilities” and “Long-term finance lease liabilities,” respectively.

(b)

The present value of minimum operating lease payments of $43,775 and $897,737 are included in “Current portion of operating lease liabilities” and “Long-term operating lease liabilities,” respectively.

Lessee, Operating Lease, Liability, Maturity

The following table illustrates the Company’s future minimum rental payments for non-cancelable leases as of December 29, 2019:



	Finance Leases						Operating Leases
Fiscal Year	Company-Operated			Franchise and Other			Company-Operated			Franchise and Other
2020	$	3,088		$	47,041		$	19,971		$	70,301
2021	3,220			46,932			19,783			70,272
2022	3,270			48,079			19,473			70,176
2023	3,223			49,709			19,439			70,026
2024	3,316			50,069			19,385			69,901
Thereafter	40,096			664,005			183,460			755,026
Total minimum payments	$	56,213		$	905,835		$	281,511		$	1,105,702
Less interest	(24,543		)	(445,653		)	(86,422		)	(359,279		)
Present value of minimum lease payments (a) (b)	$	31,670		$	460,182		$	195,089		$	746,423

_______________


(a)	The present value of minimum finance lease payments of $11,005 and $480,847 are included in “Current portion of finance lease liabilities” and “Long-term finance lease liabilities,” respectively.

(b)

Capital Lease, Liability, Maturity

The following table illustrates the Company’s future minimum rental payments for non-cancelable leases as of December 30, 2018:



	Finance Leases						Operating Leases
Fiscal Year	Company-Operated			Franchise and Other			Company-Operated		Franchise and Other
2019	$	1,962		$	45,125		$	20,174	$	75,703
2020	1,978			43,969			20,052		73,320
2021	2,082			45,522			19,820		73,167
2022	2,114			46,573			19,530		73,300
2023	2,084			48,109			19,430		73,377
Thereafter	23,558			676,139			203,073		854,964
Total minimum payments	$	33,778		$	905,437		$	302,079	$	1,223,831
Less interest	(16,874		)	(466,705		)
Present value of minimum lease payments (a)	$	16,904		$	438,732

_______________

(a)

The present value of minimum finance lease payments of $8,405 and $447,231 are included in “Current portion of finance lease liabilities” and “Long-term finance lease liabilities,” respectively.

Lessee, Operating Lease, Liability, Maturity

The following table illustrates the Company’s future minimum rental payments for non-cancelable leases as of December 30, 2018:



	Finance Leases						Operating Leases
Fiscal Year	Company-Operated			Franchise and Other			Company-Operated		Franchise and Other
2019	$	1,962		$	45,125		$	20,174	$	75,703
2020	1,978			43,969			20,052		73,320
2021	2,082			45,522			19,820		73,167
2022	2,114			46,573			19,530		73,300
2023	2,084			48,109			19,430		73,377
Thereafter	23,558			676,139			203,073		854,964
Total minimum payments	$	33,778		$	905,437		$	302,079	$	1,223,831
Less interest	(16,874		)	(466,705		)
Present value of minimum lease payments (a)	$	16,904		$	438,732

_______________

(a)

Sales-type Lease, Lease Income

The components of lease income for 2019 are as follows:



	Year Ended
	2019
Sales-type and direct-financing leases:
Selling profit	$	2,285
Interest income (a)	26,333

Operating lease income	176,629
Variable lease income	56,436
Franchise rental income (b)	$	233,065

_______________


(a)	Included in “Interest expense, net.”

(b)

Includes sublease income of $171,126 recognized during 2019, of which $37,739 represents lessees’ variable payments to the Company for executory costs.

Direct Financing Lease, Lease Income

The components of lease income for 2019 are as follows:



	Year Ended
	2019
Sales-type and direct-financing leases:
Selling profit	$	2,285
Interest income (a)	26,333

Operating lease income	176,629
Variable lease income	56,436
Franchise rental income (b)	$	233,065

_______________


(a)	Included in “Interest expense, net.”

(b)

Includes sublease income of $171,126 recognized during 2019, of which $37,739 represents lessees’ variable payments to the Company for executory costs.

Operating Lease, Lease Income

The components of lease income for 2019 are as follows:



	Year Ended
	2019
Sales-type and direct-financing leases:
Selling profit	$	2,285
Interest income (a)	26,333

Operating lease income	176,629
Variable lease income	56,436
Franchise rental income (b)	$	233,065

_______________


(a)	Included in “Interest expense, net.”

(b)

Includes sublease income of $171,126 recognized during 2019, of which $37,739 represents lessees’ variable payments to the Company for executory costs.

Schedule of Rent Income

The components of rental income for operating leases and subleases for 2018 and 2017, as accounted for under previous guidance, were as follows:



	Year Ended
	2018		2017
Rental income:
Minimum rentals	$	184,154	$	169,857
Contingent rentals	19,143		20,246
Total rental income (a)	$	203,297	$	190,103

_______________

(a)

Amounts include sublease income of $138,363 and $126,814 recognized during 2018 and 2017, respectively.

Sales-type and Direct Financing Leases, Lease Receivable, Maturity

The following table illustrates the Company’s future minimum rental receipts for non-cancelable leases and subleases as of December 29, 2019:



	Sales-Type and Direct Financing Leases						Operating Leases
Fiscal Year	Subleases			Owned Properties			Subleases		Owned Properties
2020	$	28,948		$	2,036		$	110,212	$	52,927
2021	30,066			2,068			111,232		54,716
2022	30,741			2,148			112,198		56,189
2023	31,780			2,192			113,064		56,394
2024	32,081			2,200			113,123		57,497
Thereafter	461,553			24,915			1,223,729		804,606
Total future minimum receipts	615,169			35,559			$	1,783,558	$	1,082,329
Unearned interest income	(371,918		)	(19,058		)
Net investment in sales-type and direct financing leases (a)	$	243,251		$	16,501

_______________

(a)

The present value of minimum direct financing rental receipts of $3,146 and $256,606 are included in “Accounts and notes receivable, net” and “Net investment in sales-type and direct financing leases,” respectively. The present value of minimum direct financing rental receipts includes a net investment in unguaranteed residual assets of $197.

Lessor, Operating Lease, Payments to be Received, Maturity

The following table illustrates the Company’s future minimum rental receipts for non-cancelable leases and subleases as of December 29, 2019:



	Sales-Type and Direct Financing Leases						Operating Leases
Fiscal Year	Subleases			Owned Properties			Subleases		Owned Properties
2020	$	28,948		$	2,036		$	110,212	$	52,927
2021	30,066			2,068			111,232		54,716
2022	30,741			2,148			112,198		56,189
2023	31,780			2,192			113,064		56,394
2024	32,081			2,200			113,123		57,497
Thereafter	461,553			24,915			1,223,729		804,606
Total future minimum receipts	615,169			35,559			$	1,783,558	$	1,082,329
Unearned interest income	(371,918		)	(19,058		)
Net investment in sales-type and direct financing leases (a)	$	243,251		$	16,501

_______________

(a)

Direct Financing Leases, Lease Receivable, Maturity

The following table illustrates the Company’s future minimum rental receipts for non-cancelable leases and subleases as of December 30, 2018:



	Sales-Type and Direct Financing Leases						Operating Leases
Fiscal Year	Subleases			Owned Properties			Subleases		Owned Properties
2019	$	26,239		$	1,937		$	113,180	$	52,527
2020	26,859			2,006			113,578		53,066
2021	27,904			2,043			114,447		54,615
2022	28,563			2,119			115,552		56,092
2023	29,512			2,159			116,463		56,284
Thereafter	448,851			26,404			1,372,646		858,755
Total future minimum receipts	587,928			36,668			$	1,945,866	$	1,131,339
Unearned interest income	(377,046		)	(20,338		)
Net investment in sales-type and direct financing leases (a)	$	210,882		$	16,330

_______________

(a)

The present value of minimum direct financing rental receipts of $735 and $226,477 are included in “Accounts and notes receivable, net” and “Net investment in sales-type and direct financing leases,” respectively.

Lessor, Operating Lease, Lease Receivable, Maturity

The following table illustrates the Company’s future minimum rental receipts for non-cancelable leases and subleases as of December 30, 2018:



	Sales-Type and Direct Financing Leases						Operating Leases
Fiscal Year	Subleases			Owned Properties			Subleases		Owned Properties
2019	$	26,239		$	1,937		$	113,180	$	52,527
2020	26,859			2,006			113,578		53,066
2021	27,904			2,043			114,447		54,615
2022	28,563			2,119			115,552		56,092
2023	29,512			2,159			116,463		56,284
Thereafter	448,851			26,404			1,372,646		858,755
Total future minimum receipts	587,928			36,668			$	1,945,866	$	1,131,339
Unearned interest income	(377,046		)	(20,338		)
Net investment in sales-type and direct financing leases (a)	$	210,882		$	16,330

_______________

(a)

Schedule of Property Subject To Operating Lease

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



	Year End
	December 29, 2019			December 30, 2018
Land	$	281,792		$	272,234
Buildings and improvements	311,047			312,672
Restaurant equipment	1,727			2,443
	594,566			587,349
Accumulated depreciation and amortization	(157,130		)	(143,313		)
	$	437,436		$	444,036