Operating Lease Agreements

12 Months Ended

Dec. 31, 2011

Operating Lease Agreements [Abstract]

Operating Lease Agreements

13. Operating lease agreements

     At December 31, 2011, the Company was the lessee at 1,855 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 vary between 10 and 20 years and, in many cases, provide for rent escalations and renewal options, with certain leases providing purchase options. Escalations terms vary by reporting unit, with examples including fixed-rent escalations, escalations based on an inflation index, and fair value adjustments. The timing of these escalations generally ranges from annually to every five years. According to rental terms, the Company pays a monthly rental expense based on the greater of a fixed rent or a certain percentage of the Company's gross sales. 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 warehouses.

     In March 2010, the Company entered into an aircraft operating lease agreement for a term of 8 years, which provides for quarterly payments of $690. The agreement includes a purchase option at the end of the lease term at fair market value and also an early purchase option at a fixed amount of $26,685 at maturity of the 24^th quarterly payment. The Company was required to make a cash deposit of $5,325 as collateral for the obligations assumed under this agreement.

     At December 31, 2011, future minimum payments required under existing operating leases with initial terms of one year or more are:

		Restaurants		Others		Total
2012	$	124,021	$	7,557	$	131,578
2013		113,266		7,002		120,268
2014		102,116		6,707		108,823
2015		93,604		6,310		99,914
2016		81,995		5,632		87,627
Thereafter		362,167		15,533		377,700
Total minimum payments	$	877,169	$	48,741	$	925,910

The following table provides detail of rent expense for fiscal year 2011, 2010 and 2009:

		2011		2010		2009
Company-operated restaurants (i)	$	129,135	$	100,986	$	88,579
Franchised restaurants (ii)		41,252		34,172		33,592
Total rent expense	$	170,387	$	135,158	$	122,171

(i) Included within the caption "Occupancy and other operating expenses" in the consolidated statement of income.

(ii)Included within the caption "Franchised restaurants – occupancy expenses" in the consolidated statements of income.

     The following table provides a breakdown detail of rent expense between minimum and contingent rentals for fiscal year 2011, 2010 and 2009:

		2011		2010		2009
Minimum rentals	$	121,533	$	98,307	$	82,650
Contingent rentals based on sales		48,854		36,851		39,521
Total rent expense	$	170,387	$	135,158	$	122,171