Burger King 2013 Annual Report Download - page 85

Table of Contents
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As of December 31, 2013, we leased or subleased 1,964 restaurant properties to franchisees and 54 non-restaurant properties to third parties under
direct financing leases and operating leases, where we are the lessor. Initial lease terms generally range from 10 to 20 years. Most leases to franchisees provide
for fixed monthly payments and many of these leases provide for future rent escalations and renewal options. Certain leases also include provisions for
contingent rent, determined as a percentage of sales, generally when annual sales exceed specific levels. The lessees bear the cost of maintenance, insurance and
property taxes.
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):
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 
Land $ 421.7 $ 399.5
Buildings and improvements 397.9 361.3
Restaurant equipment 2.7 4.8
Gross property and equipment leased 822.3 765.6
Accumulated depreciation (130.3) (95.7)
Net property and equipment leased $692.0 $669.9
Our net investment in direct financing leases was as follows (in millions):
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Future rents to be received
Future minimum lease receipts $ 184.8 $ 213.0
Contingent rents(1) 92.1 104.8
Estimated unguaranteed residual value 23.8 25.6
Unearned income (120.5) (145.8)
Allowance on direct financing leases (0.3) (0.8)
179.9 196.8
Current portion included within trade receivables (16.8) (16.4)
Net investment in property leased to franchisees $ 163.1 $180.4
(1) Amounts represent estimated contingent rents recorded in connection with the acquisition method of accounting.
In addition, we lease land, building, equipment, office space and warehouse space, including 336 restaurant buildings under capital leases. Initial lease
terms are generally 10 to 20 years and most leases provide for fixed monthly payments. Many of these leases provide for future rent escalations and renewal
options and certain leases also include provisions for contingent rent, determined as a percentage of sales, generally when annual sales exceed specific levels.
Most leases also obligate us to pay the cost of maintenance, insurance and property taxes.
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Source: Burger King Worldwide, Inc., 10-K, February 21, 2014 Powered by Morningstar® Document Research℠
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