Leases

At April 2, 2017, Wendy’s and its franchisees operated 6,551 Wendy’s restaurants. Of the 331 Company-operated Wendy’s restaurants, Wendy’s owned the land and building for 149 restaurants, owned the building and held long-term land leases for 132 restaurants and held leases covering land and building for 50 restaurants. Wendy’s also owned 520 and leased 1,050 properties that were either leased or subleased principally to franchisees.

Rental expense for operating leases consists of the following components:



	Three Months Ended
	April 2, 2017		April 3, 2016
Rental expense:
Minimum rentals	$	19,918	$	19,490
Contingent rentals	4,288		3,782
Total rental expense (a)	$	24,206	$	23,272

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(a)	Amounts exclude sublease income of $26,563 and $19,732 recognized during the three months ended April 2, 2017 and April 3, 2016, respectively.

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



	Three Months Ended
	April 2, 2017		April 3, 2016
Rental income:
Minimum rentals	$	38,605	$	25,798
Contingent rentals	4,312		4,762
Total rental income	$	42,917	$	30,560

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 April 2, 2017. 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
2017 (a)	$	21,798		$	59,696	$	30,085	$	49,375	$	40,056
2018	29,670			77,201		40,650		65,444		53,581
2019	28,738			77,734		40,832		65,700		54,553
2020	29,238			77,107		41,475		65,438		55,148
2021	30,634			76,758		42,913		65,398		56,732
Thereafter	491,105			1,049,312		678,756		867,957		1,002,429
Total minimum payments	$	631,183		$	1,417,808	$	874,711	$	1,179,312	$	1,262,499
Less interest	(375,357		)
Present value of minimum capital lease payments (b)	$	255,826

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(a)	Represents future minimum rental payments and rental receipts for non-cancelable leases and subleases for the remainder of our 2017 fiscal year.


(b)	The present value of minimum capital lease payments of $2,150 and $253,676 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:



	April 2, 2017			January 1, 2017
Land	$	271,700		$	271,160
Buildings and improvements	312,150			312,067
Office, restaurant and transportation equipment	1,507			1,507
	585,357			584,734
Accumulated depreciation and amortization	(114,389		)	(110,166		)
	$	470,968		$	474,568

Our net investment in direct financing leases is as follows:



	April 2, 2017			January 1, 2017
Future minimum rental receipts	$	461,756		$	401,452
Unearned interest income	(307,610		)	(277,747		)
Net investment in direct financing leases	154,146			123,705
Net current investment in direct financing leases (a)	(135		)	(101		)
Net non-current investment in direct financing leases (b)	$	154,011		$	123,604

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


(b)	Included in “Other assets.”