7. Leases

The Company generally operates its restaurants in leased premises. Lease terms for traditional shopping center or building leases generally include combined initial and option terms of 20-25 years. Ground leases generally include combined initial and option terms of 30-40 years. The option terms in each of these leases are typically in five-year increments. Typically, the lease includes rent escalation terms every five years including fixed rent escalations, escalations based on inflation indexes, and fair market value adjustments. Certain leases contain contingent rental provisions based upon the sales of the underlying restaurants. The leases generally provide for the payment of common area maintenance, property taxes, insurance and various other use and occupancy costs by the Company. In addition, the Company is the lessee under non-cancelable leases covering certain offices.

Future minimum lease payments required under existing operating leases as of December 31, 2013 are as follows:



2014	$	185,866
2015		189,474
2016		189,514
2017		190,256
2018		193,243
Thereafter		1,908,169
Total minimum lease payments	$	2,856,522

Minimum lease payments have not been reduced by minimum sublease rentals of $6,355 due in the future under non-cancelable subleases.

Rental expense consists of the following:



	For the years ended December 31
	2013		2012		2011
Minimum rentals	$	178,395	$	152,935	$	130,827
Contingent rentals	$	2,719	$	1,917	$	1,754
Sublease rental income	$	(1,726)	$	(1,623)	$	(1,390)

The Company has six sales and leaseback transactions. These transactions do not qualify for sale leaseback accounting because of the Company’s deemed continuing involvement with the buyer-lessor due to fixed price renewal options, which results in the transaction being recorded under the financing method. Under the financing method, the assets remain on the consolidated balance sheet and the proceeds from the transactions are recorded as a financing liability. A portion of lease payments are applied as payments of deemed principal and imputed interest. The deemed landlord financing liability was $3,386 and $3,529 as of December 31, 2013, and 2012, respectively, with the current portion of the liability included in accrued liabilities, and the remaining portion included in other liabilities in the consolidated balance sheet.