Task: Capitalizing Operating Leases
McDonald's Corp. was the lessee at 14,139 restaurant locations through ground leases at December 31, 2011. The lease terms are generally for 20 years.
The company is also the lessee under noncancelable leases covering certain offices and vehicles. The company's footnotes also revealed that at year-end 2011, the minimum lease commitments under noncancelable operating leases were:
In millions Restaurant Other Total
2012 $1,172.6 $74.4 $1,247.0
2013 1,104.8 62.8 1,167.6
2014 1,019.50 55.4 1,074.9
2015 921.9 43.1 965.0
2016 813.9 37.9 851.8
Thereafter 6,039.1 208.8 6,247.9
Total minimum payments $11,071.8 $482.4 $11,554.2
1. Calculate the present value of the company's operating leases assuming an interest rate of 6%.