Leasing Arrangements

12 Months Ended

Dec. 31, 2018

At December 31, 2018, the Company was the lessee at 12,334 restaurant locations through ground leases (the Company leases the land and the Company generally owns the building) and through improved leases (the Company leases land and buildings). Lease terms for most restaurants, where market conditions allow, are generally for 20 years and, in many cases, provide for rent escalations and renewal options, with certain leases providing purchase options. Escalation terms vary by market with examples including fixed-rent escalations, escalations based on an inflation index and fair-value market adjustments. The timing of these escalations generally range from annually to every five years. For most franchised locations, the related occupancy costs including property taxes, insurance and site maintenance; are required to be paid by the franchisees as part of the franchise arrangement. In addition, the Company is the lessee under non-restaurant related leases such as office buildings, vehicles and office equipment.

The following table provides detail of rent expense:



In millions	2018		2017		2016
Company-operated restaurants:
U.S.	$	29.4	$	37.4	$	48.6
Outside the U.S.	241.6		427.2		613.3
Total	271.0		464.6		661.9
Franchised restaurants:
U.S.	504.9		488.6		471.2
Outside the U.S.	658.0		609.3		589.8
Total	1,162.9		1,097.9		1,061.0
Other	87.9		82.0		91.3
Total rent expense	$	1,521.8	$	1,644.5	$	1,814.2

Rent expense included percent rents in excess of minimum rents (in millions) as follows–Company-operated restaurants: 2018–$82.1; 2017–$115.6; 2016–$135.0. Franchised restaurants: 2018–$200.8; 2017–$204.9; 2016–$186.4.

Future minimum payments required under existing operating leases with initial terms of one year or more are:



In millions	Restaurant			Other			Total *
2019		$	1,093.4		$	51.3	$	1,144.7
2020		1,032.1			51.0		1,083.1
2021		955.5			45.7		1,001.2
2022		873.8			35.7		909.5
2023		806.0			24.6		830.6
Thereafter		7,132.3			164.9		7,297.2
Total minimum payments		$	11,893.1		$	373.2	$	12,266.3

For sites that have lease escalations tied to an index, future minimum payments reflect the current index adjustments through December 31, 2018. In addition, future minimum payments exclude option periods that have not yet been exercised.