(Mark One)
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2013
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||
OR
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||
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Delaware
(State or other jurisdiction
of incorporation or organization)
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95-3038279
(I.R.S. Employer
Identification No.)
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450 North Brand Boulevard, Glendale, California
(Address of principal executive offices)
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91203-2306
(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, $.01 Par Value
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New York Stock Exchange
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a
smaller reporting company)
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Smaller reporting company
o
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Class
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Outstanding as of February 21, 2014
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Common Stock, $.01 par value
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19,045,042
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Page
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•
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Franchise operations - primarily royalties, fees and other income from
1,988
Applebee’s franchised restaurants and
1,607
IHOP franchised and area licensed restaurants;
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•
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Rental operations - primarily rental income derived from lease or sublease agreements covering 723 IHOP franchised restaurants and one Applebee’s franchised restaurant;
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•
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Company restaurant operations - retail sales from
23
Applebee’s company-operated restaurants and
13
IHOP company-operated restaurants; and
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•
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Financing operations - primarily interest income from approximately $120 million of receivables for equipment leases and franchise fee notes generally associated with IHOP franchised restaurants developed before 2003.
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•
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Optimize organization capability;
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•
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Drive profitable organic growth; and
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•
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Reduce costs for both ourselves and our franchisees.
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•
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reduce gross sales at franchise restaurants, resulting in lower royalty and other payments from franchisees,
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•
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reduce the profitability of franchise restaurants, potentially impacting the ability of franchisees to make royalty payments when they are due and to develop new restaurants as may be required in their respective development agreements, and
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•
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negatively impact the financial performance of our company-operated restaurants.
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•
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make it more difficult for us to satisfy our obligations with respect to our debt;
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•
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increase our vulnerability to general adverse economic and industry conditions or a downturn in our business;
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•
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require us to dedicate a substantial portion of our cash flow from operations to debt service, thereby reducing the availability of our cash flow to pay dividends to our stockholders, repurchase shares of our common stock, fund working capital, capital expenditures and other general corporate purposes;
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•
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limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
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•
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place us at a competitive disadvantage compared to our competitors that are not as highly leveraged;
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•
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limit, along with the financial and other restrictive covenants in our indebtedness, among other things, our ability to borrow additional funds; and
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•
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result in an event of default if we fail to satisfy our obligations under our debt or fail to comply with the financial and other restrictive covenants contained in our debt documents, which event of default could result in all of our debt becoming immediately due and payable and could permit certain of our lenders to foreclose on our assets securing such debt.
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•
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declines in comparable-restaurant sales growth rates due to: (i) failing to meet customers' expectations for food quality and taste or to innovate new menu items to retain the existing customer base and attract new customers; (ii) competitive intrusions in our markets; (iii) opening new restaurants that cannibalize the sales of existing restaurants; (iv) failure of national or local marketing to be effective; (v) weakening national, regional and local economic conditions; and (vi) natural or man-made disasters or adverse weather conditions.
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•
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negative trends in operating expenses such as: (i) increases in food costs including rising commodity costs; (ii) increases in labor costs including increases mandated by minimum wage and other employment laws, immigration reform, the potential impact of union organizing efforts, increases due to tight labor market conditions and the Patient Protection and Affordable Care Act; and (iii) increases in other operating costs including advertising, utilities, lease-related expenses and credit card processing fees;
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•
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the inability to open new restaurants that achieve and sustain acceptable sales volumes;
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•
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the inability to increase menu pricing to offset increased operating expenses;
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•
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failure to effectively manage further penetration into mature markets;
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•
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negative trends in the availability of credit and in expenses such as interest rates and the cost of construction materials that will affect our ability or our franchisees' ability to maintain and refurbish existing restaurants;
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•
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the inability to manage our company-owned restaurants due to unanticipated changes in, or availability of, qualified restaurant management, staff and other personnel; and
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•
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the inability to operate effectively in new and/or highly competitive geographic regions or local markets in which we or our franchisees have limited operating experience.
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•
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the availability of suitable locations and terms for potential development sites;
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•
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the ability of franchisees to fulfill their commitments to build new restaurants in the numbers and the time frames specified in their development agreements;
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•
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the availability of financing, at acceptable rates and terms, to both franchisees and third-party landlords, for restaurant development;
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•
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delays in obtaining construction permits and in completion of construction;
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•
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developed properties not achieving desired revenue or cash flow levels once opened;
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•
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competition for suitable development sites;
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•
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changes in governmental rules, regulations, and interpretations (including interpretations of the requirements of the Americans with Disabilities Act); and
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•
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general economic and business conditions.
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Applebee's
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IHOP
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|||||||||||||||
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Franchise
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Company
|
|
Total
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Franchise
|
|
Company
|
|
Area License
|
|
Total
|
|||||||
United States
|
|
|
|
|
|
|
|
|
|
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|
|
|
|||||||
Alabama
|
30
|
|
|
—
|
|
|
30
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
21
|
|
Alaska
|
2
|
|
|
—
|
|
|
2
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
Arizona
|
27
|
|
|
—
|
|
|
27
|
|
|
40
|
|
|
—
|
|
|
—
|
|
|
40
|
|
Arkansas
|
11
|
|
|
—
|
|
|
11
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
California
|
117
|
|
|
—
|
|
|
117
|
|
|
229
|
|
|
—
|
|
|
—
|
|
|
229
|
|
Colorado
|
25
|
|
|
—
|
|
|
25
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
31
|
|
Connecticut
|
7
|
|
|
—
|
|
|
7
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
Delaware
|
12
|
|
|
—
|
|
|
12
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
District of Columbia
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
Florida
|
108
|
|
|
—
|
|
|
108
|
|
|
—
|
|
|
—
|
|
|
150
|
|
*
|
150
|
|
Georgia
|
68
|
|
|
—
|
|
|
68
|
|
|
76
|
|
|
—
|
|
|
4
|
|
*
|
80
|
|
Hawaii
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
Idaho
|
12
|
|
|
—
|
|
|
12
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
Illinois
|
47
|
|
|
—
|
|
|
47
|
|
|
52
|
|
|
1
|
|
|
—
|
|
|
53
|
|
Indiana
|
66
|
|
|
—
|
|
|
66
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
23
|
|
Iowa
|
27
|
|
|
—
|
|
|
27
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
Kansas
|
24
|
|
|
10
|
|
|
34
|
|
|
21
|
|
|
1
|
|
|
—
|
|
|
22
|
|
Kentucky
|
37
|
|
|
—
|
|
|
37
|
|
|
7
|
|
|
1
|
|
|
—
|
|
|
8
|
|
Louisiana
|
18
|
|
|
—
|
|
|
18
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
30
|
|
Maine
|
12
|
|
|
—
|
|
|
12
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Maryland
|
26
|
|
|
—
|
|
|
26
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
38
|
|
Massachusetts
|
28
|
|
|
—
|
|
|
28
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
20
|
|
Michigan
|
86
|
|
|
—
|
|
|
86
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
21
|
|
Minnesota
|
58
|
|
|
—
|
|
|
58
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
12
|
|
Mississippi
|
21
|
|
|
—
|
|
|
21
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
Missouri
|
45
|
|
|
13
|
|
|
58
|
|
|
27
|
|
|
—
|
|
|
—
|
|
|
27
|
|
Montana
|
8
|
|
|
—
|
|
|
8
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
Nebraska
|
19
|
|
|
—
|
|
|
19
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
Nevada
|
14
|
|
|
—
|
|
|
14
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
24
|
|
New Hampshire
|
14
|
|
|
—
|
|
|
14
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
New Jersey
|
57
|
|
|
—
|
|
|
57
|
|
|
40
|
|
|
—
|
|
|
—
|
|
|
40
|
|
New Mexico
|
18
|
|
|
—
|
|
|
18
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
20
|
|
New York
|
113
|
|
|
—
|
|
|
113
|
|
|
57
|
|
|
—
|
|
|
—
|
|
|
57
|
|
North Carolina
|
58
|
|
|
—
|
|
|
58
|
|
|
51
|
|
|
—
|
|
|
—
|
|
|
51
|
|
North Dakota
|
12
|
|
|
—
|
|
|
12
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
Ohio
|
93
|
|
|
—
|
|
|
93
|
|
|
22
|
|
|
9
|
|
|
—
|
|
|
31
|
|
Oklahoma
|
23
|
|
|
—
|
|
|
23
|
|
|
28
|
|
|
—
|
|
|
—
|
|
|
28
|
|
Oregon
|
21
|
|
|
—
|
|
|
21
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
Pennsylvania
|
77
|
|
|
—
|
|
|
77
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
Rhode Island
|
8
|
|
|
—
|
|
|
8
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
South Carolina
|
40
|
|
|
—
|
|
|
40
|
|
|
29
|
|
|
—
|
|
|
—
|
|
|
29
|
|
South Dakota
|
6
|
|
|
—
|
|
|
6
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
Tennessee
|
42
|
|
|
—
|
|
|
42
|
|
|
36
|
|
|
—
|
|
|
—
|
|
|
36
|
|
Texas
|
101
|
|
|
—
|
|
|
101
|
|
|
188
|
|
|
—
|
|
|
—
|
|
|
188
|
|
Utah
|
16
|
|
|
—
|
|
|
16
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
Vermont
|
3
|
|
|
—
|
|
|
3
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Virginia
|
73
|
|
|
—
|
|
|
73
|
|
|
60
|
|
|
—
|
|
|
—
|
|
|
60
|
|
Washington
|
42
|
|
|
—
|
|
|
42
|
|
|
32
|
|
|
—
|
|
|
—
|
|
|
32
|
|
West Virginia
|
17
|
|
|
—
|
|
|
17
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
Wisconsin
|
44
|
|
|
—
|
|
|
44
|
|
|
14
|
|
|
1
|
|
|
—
|
|
|
15
|
|
Wyoming
|
5
|
|
|
—
|
|
|
5
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
Total Domestic
|
1,838
|
|
|
23
|
|
|
1,861
|
|
|
1,397
|
|
|
13
|
|
|
154
|
|
|
1,564
|
|
|
Applebee's
|
|
IHOP
|
|
|
|||||||||||||||
|
Franchise
|
|
Company
|
|
Total
|
|
Franchise
|
|
Company
|
|
Area License
|
|
Total
|
|||||||
International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Brazil
|
13
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Canada
|
18
|
|
|
—
|
|
|
18
|
|
|
7
|
|
|
—
|
|
|
14
|
|
*
|
21
|
|
Chile
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Costa Rica
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Dominican Republic
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Egypt
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Guatemala
|
3
|
|
|
—
|
|
|
3
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
Honduras
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Jordan
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Kuwait
|
5
|
|
|
—
|
|
|
5
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
Lebanon
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Mexico
|
65
|
|
|
—
|
|
|
65
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
20
|
|
Philippines
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
Puerto Rico
|
4
|
|
|
—
|
|
|
4
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
Qatar
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Saudi Arabia
|
15
|
|
|
—
|
|
|
15
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Singapore
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
St. Croix, Virgin Islands
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
United Arab Emirates
|
5
|
|
|
—
|
|
|
5
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
Total International
|
150
|
|
|
—
|
|
|
150
|
|
|
42
|
|
|
—
|
|
|
14
|
|
|
56
|
|
Totals
|
1,988
|
|
|
23
|
|
|
2,011
|
|
|
1,439
|
|
|
13
|
|
|
168
|
|
|
1,620
|
|
|
Fiscal Year 2013
|
|
Fiscal Year 2012
|
||||||||||||
|
Prices
|
|
Prices
|
||||||||||||
Quarter
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
First
|
$
|
78.39
|
|
|
$
|
65.44
|
|
|
$
|
54.74
|
|
|
$
|
40.28
|
|
Second
|
$
|
74.96
|
|
|
$
|
66.39
|
|
|
$
|
53.90
|
|
|
$
|
41.63
|
|
Third
|
$
|
72.49
|
|
|
$
|
64.44
|
|
|
$
|
57.40
|
|
|
$
|
41.49
|
|
Fourth
|
$
|
85.74
|
|
|
$
|
65.96
|
|
|
$
|
68.47
|
|
|
$
|
55.51
|
|
Year ended December 31, 2013
|
Declaration date
|
|
Payment date
|
|
Dividend per share
|
|
Total
(1)
|
||||
|
|
|
|
|
|
|
(In millions)
|
||||
First quarter
|
February 26, 2013
|
|
March 29, 2013
|
|
$
|
0.75
|
|
|
$
|
14.6
|
|
Second quarter
|
May 14, 2013
|
|
June 28, 2013
|
|
0.75
|
|
|
14.4
|
|
||
Third quarter
|
August 2, 2013
|
|
September 27, 2013
|
|
0.75
|
|
|
14.3
|
|
||
Fourth quarter
|
October 3, 2013
|
|
December 27, 2013
|
|
0.75
|
|
|
14.3
|
|
||
Total
|
|
|
|
|
$
|
3.00
|
|
|
$
|
57.6
|
|
Plan Category
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
|
Weighted average exercise price of outstanding options, warrants and rights
|
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
|
||||
(a)
|
|
(b)
|
|
(c)
|
|||||
Equity compensation plans approved by security holders
|
775,059
|
|
|
$
|
42.09
|
|
|
1,192,180
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
775,059
|
|
|
$
|
42.09
|
|
|
1,192,180
|
|
Purchases of Equity Securities by the Company
|
||||||||||
Period
|
|
Total number of
shares
purchased
|
|
Average price
paid per
share
|
|
Total number of
shares purchased as
part of publicly
announced plans or
programs (b)
|
|
Approximate dollar value of
shares that may yet be
purchased under the
plans or programs (b)
|
||
September 30, 2013 – October 27, 2013
(a)
|
|
553
|
|
|
$69.50
|
|
—
|
|
|
$75,300,000
|
October 28, 2013 – November 24, 2013
(a)
|
|
930
|
|
|
$82.14
|
|
—
|
|
|
$75,300,000
|
November 25, 2013 – December 29, 2013
|
|
60,318
|
|
|
$83.47
|
|
60,318
|
|
|
$70,300,000
|
Total
|
|
61,801
|
|
|
$83.32
|
|
60,318
|
|
|
$70,300,000
|
|
2008
|
|
2009
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
||||||||||||
DineEquity, Inc.
|
$
|
100.00
|
|
|
$
|
210.12
|
|
|
$
|
427.16
|
|
|
$
|
365.14
|
|
|
$
|
579.58
|
|
|
$
|
753.28
|
|
Standard & Poor's 500
|
100.00
|
|
|
126.46
|
|
|
145.51
|
|
|
148.58
|
|
|
172.35
|
|
|
228.18
|
|
||||||
Restaurant Index
|
100.00
|
|
|
128.10
|
|
|
178.27
|
|
|
235.12
|
|
|
247.64
|
|
|
328.57
|
|
|
Fiscal Year Ended December 31,
|
||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
|
(In millions, except per share amounts and restaurant data)
|
||||||||||||||||||
Segment Revenues
|
|
|
|
|
|
|
|
|
|
||||||||||
Franchise and restaurant revenues (a)
|
$
|
502.6
|
|
|
$
|
712.5
|
|
|
$
|
929.5
|
|
|
$
|
1,192.7
|
|
|
$
|
1,263.0
|
|
Rental income
|
124.8
|
|
|
122.9
|
|
|
126.0
|
|
|
124.5
|
|
|
133.9
|
|
|||||
Financing revenues
|
13.1
|
|
|
14.5
|
|
|
19.7
|
|
|
16.4
|
|
|
17.9
|
|
|||||
Total revenues
|
640.5
|
|
|
849.9
|
|
|
1,075.2
|
|
|
1,333.6
|
|
|
1,414.8
|
|
|||||
Segment Expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Franchise and restaurant expenses (a)
|
173.3
|
|
|
359.2
|
|
|
563.4
|
|
|
802.8
|
|
|
868.7
|
|
|||||
Rental expenses
|
97.3
|
|
|
97.2
|
|
|
98.2
|
|
|
99.0
|
|
|
100.2
|
|
|||||
Financing expenses
|
0.2
|
|
|
1.6
|
|
|
6.0
|
|
|
2.0
|
|
|
0.4
|
|
|||||
Total segment expenses
|
270.8
|
|
|
458.0
|
|
|
667.6
|
|
|
903.8
|
|
|
969.3
|
|
|||||
Gross segment profit
|
369.7
|
|
|
391.9
|
|
|
407.6
|
|
|
429.8
|
|
|
445.5
|
|
|||||
General and administrative expenses
|
143.6
|
|
|
163.2
|
|
|
155.8
|
|
|
160.3
|
|
|
157.7
|
|
|||||
Interest expense
|
100.3
|
|
|
114.3
|
|
|
132.7
|
|
|
171.5
|
|
|
186.3
|
|
|||||
Closure and impairment charges
|
1.8
|
|
|
4.2
|
|
|
29.9
|
|
|
4.3
|
|
|
105.6
|
|
|||||
Loss (gain) on extinguishment of debt and temporary equity
|
0.1
|
|
|
5.6
|
|
|
11.2
|
|
|
107.0
|
|
|
(45.7
|
)
|
|||||
Gain on disposition of assets (a)
|
(0.2
|
)
|
|
(102.6
|
)
|
|
(43.3
|
)
|
|
(13.5
|
)
|
|
(7.3
|
)
|
|||||
Other expense (b)
|
13.6
|
|
|
12.3
|
|
|
16.3
|
|
|
12.3
|
|
|
12.3
|
|
|||||
Income (loss) before income taxes
|
110.6
|
|
|
194.9
|
|
|
105.0
|
|
|
(12.1
|
)
|
|
36.6
|
|
|||||
Income tax (provision) benefit
|
(38.6
|
)
|
|
(67.2
|
)
|
|
(29.8
|
)
|
|
9.3
|
|
|
(5.2
|
)
|
|||||
Net income (loss)
|
72.0
|
|
|
127.7
|
|
|
75.2
|
|
|
(2.8
|
)
|
|
31.4
|
|
|||||
Less: Series A preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(25.9
|
)
|
|
(19.5
|
)
|
|||||
Less: Accretion of Series B preferred stock
|
—
|
|
|
(2.5
|
)
|
|
(2.6
|
)
|
|
(2.5
|
)
|
|
(2.3
|
)
|
|||||
Less: Net (income) loss allocated to unvested participating restricted stock
|
(1.2
|
)
|
|
(2.7
|
)
|
|
(1.9
|
)
|
|
1.2
|
|
|
(0.4
|
)
|
|||||
Net income (loss) available to common stockholders
|
$
|
70.8
|
|
|
$
|
122.5
|
|
|
$
|
70.7
|
|
|
$
|
(30.0
|
)
|
|
$
|
9.2
|
|
Net income (loss) available to common stockholders per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
3.75
|
|
|
$
|
6.81
|
|
|
$
|
3.96
|
|
|
$
|
(1.74
|
)
|
|
$
|
0.55
|
|
Diluted
|
$
|
3.70
|
|
|
$
|
6.63
|
|
|
$
|
3.89
|
|
|
$
|
(1.74
|
)
|
|
$
|
0.55
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
18.9
|
|
|
18.0
|
|
|
17.8
|
|
|
17.2
|
|
|
16.9
|
|
|||||
Diluted
|
19.1
|
|
|
18.9
|
|
|
18.2
|
|
|
17.2
|
|
|
16.9
|
|
|||||
Dividends declared and paid per common share
|
$
|
3.00
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Balance Sheet Data (end of year):
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
106.0
|
|
|
$
|
64.5
|
|
|
$
|
60.7
|
|
|
$
|
102.3
|
|
|
$
|
82.3
|
|
Restricted cash—short-term and long-term (c)
|
0.7
|
|
|
1.9
|
|
|
1.2
|
|
|
1.6
|
|
|
120.9
|
|
|||||
Property and equipment, net (a)
|
274.3
|
|
|
294.4
|
|
|
474.2
|
|
|
612.2
|
|
|
771.4
|
|
|||||
Total assets
|
2,404.6
|
|
|
2,415.4
|
|
|
2,614.3
|
|
|
2,856.6
|
|
|
3,100.9
|
|
|||||
Long-term debt, less current maturities
|
1,203.5
|
|
|
1,202.1
|
|
|
1,411.4
|
|
|
1,631.5
|
|
|
1,637.2
|
|
|||||
Capital lease obligations, less current maturities
|
111.7
|
|
|
124.4
|
|
|
134.4
|
|
|
144.0
|
|
|
152.8
|
|
|||||
Financing obligations, less current maturities
|
48.8
|
|
|
52.0
|
|
|
162.7
|
|
|
237.8
|
|
|
309.4
|
|
|||||
Stockholders' equity
|
315.2
|
|
|
308.8
|
|
|
155.2
|
|
|
83.6
|
|
|
69.9
|
|
|||||
Other Financial Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows provided by operating activities
|
$
|
127.8
|
|
|
$
|
52.9
|
|
|
$
|
121.7
|
|
|
$
|
179.3
|
|
|
$
|
157.8
|
|
Capital expenditures
|
7.0
|
|
|
17.0
|
|
|
26.3
|
|
|
18.7
|
|
|
15.4
|
|
|||||
Domestic system-wide same-restaurant sales percentage change:
|
|
|
|
|
|
|
|
|
|
||||||||||
Applebee's
|
(0.3
|
)%
|
|
1.2
|
%
|
|
2.0
|
%
|
|
0.3
|
%
|
|
(4.5
|
)%
|
|||||
IHOP
|
2.4
|
%
|
|
(1.6
|
)%
|
|
(2.0
|
)%
|
|
0.0
|
%
|
|
(0.8
|
)%
|
|||||
Total restaurants (end of year):
|
|
|
|
|
|
|
|
|
|
||||||||||
Applebee's
|
2,011
|
|
|
2,034
|
|
|
2,019
|
|
|
2,010
|
|
|
2,008
|
|
|||||
IHOP
|
1,620
|
|
|
1,581
|
|
|
1,550
|
|
|
1,504
|
|
|
1,456
|
|
|||||
Total
|
3,631
|
|
|
3,615
|
|
|
3,569
|
|
|
3,514
|
|
|
3,464
|
|
(a)
|
We refranchised
376
Applebee's company-operated restaurants between 2009 and 2012.
|
(b)
|
Includes $12.3 in amortization of intangible assets in each year as well as $1.3 and $4.0 of debt modification costs in 2013 and 2011, respectively.
|
(c)
|
Cash restrictions related to securitized debt were eliminated by a refinancing of long-term debt in 2010.
|
•
|
Repurchases of over 412,000 shares of our common stock totaling
$29.7 million
, with authorization remaining to repurchase an additional $70.3 million.
|
•
|
Increased IHOP's domestic systemwide same-restaurant sales by
2.4%
during 2013, the first full year of growth in domestic systemwide same-restaurant sales since fiscal 2008 and the highest yearly increase since 2006;
|
•
|
Generated cash from operating activities of greater than $100 million for the fourth time in the last five years;
|
•
|
Opened
58
new restaurants worldwide by IHOP franchisees and area licensees and
26
new restaurants by Applebee's franchisees;
|
•
|
Expanded our international footprint with restaurant openings by IHOP franchisees in the Philippines, Kuwait and the Kingdom of Saudi Arabia and by an Applebee's franchisee in Egypt and the Dominican Republic;
|
•
|
Remodeled over 500 restaurants system-wide during 2013. Applebee's and its franchisees remodeled 289 restaurants during 2013, while IHOP and its franchisees remodeled 215 restaurants. Over the past three years, approximately 70% of Applebee's restaurants and 40% of IHOP restaurants have been remodeled; and
|
•
|
Named to Fast Company’s annual list of Most Innovative Companies, ranking number two in the category of “The World’s Most Innovative Companies in Food.”
|
|
Applebee's
|
|
IHOP
|
Percentage (decrease) increase in domestic system-wide same-restaurant sales
|
(0.3)%
|
|
2.4%
|
Net franchise restaurant development
(1)
|
(23)
|
|
38
|
|
Year ended December 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(In millions)
|
||||||
Consolidated cash flows from operating activities
|
$
|
127.8
|
|
|
$
|
52.9
|
|
Consolidated free cash flow
|
$
|
120.1
|
|
|
$
|
29.9
|
|
•
|
Optimize organization capability;
|
•
|
Drive profitable organic growth; and
|
•
|
Reduce costs for both ourselves and our franchisees.
|
•
|
Continued focus on meeting the consumer's need for value throughout 2013, with such promotions as the return of our successful “Sizzling Entrées” starting at $9.99 nationwide, the return of our Fresh Flavors of the Season, and the rotation of new products into our “2 for $20” offering. We ended the year with Spirited Cuisine featuring our new Chicken and Shrimp Tequila Tango, Marsala Shrimp Sirloin and highly popular new Brew Pub Pretzels & Beer Cheese Dip;
|
•
|
Increased our focus on lunch through improved lunch menu items supported by lunch-specific messaging on national
television. We introduced a new Lunch Combos platform in May that allows guests to choose any two of a variety of new sandwiches, soups, salads, and lunch entrées;
|
•
|
Continued innovation of the menu. Since the acquisition in 2007, more than 90% of Applebee's menu now consists of either new offerings or improved offerings with high quality ingredients;
|
•
|
Continued our unique healthy food offerings by refreshing our “Under 550” calorie menu in January 2013 with Roma Pepper Chicken and Napa Chicken and Portabellos. Since its launch in 2011, our “Under 550” calorie menu combined with our Weight Watchers menu has established us as a category leader in providing healthy dining options to our guests;
|
•
|
Broadened our commitment to healthy dining by introducing a new Kids Menu featuring 10 new Kids Live Well-approved meals. The new menu, which has received very positive guest feedback, offers a variety of new entrées and sides that are both healthy and kid-approved. This allows parents to concentrate on engaging with their family knowing their growing kids can get a fun, healthy meal at Applebee’s; and
|
•
|
Focused on late-night business through beverage and appetizer innovation and local restaurant marketing efforts.
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Applebee's Restaurant Data
|
|
|
|
|
|
||||||
Effective Restaurants:
(a)
|
|
|
|
|
|
||||||
Franchise
|
1,996
|
|
|
1,894
|
|
|
1,770
|
|
|||
Company
|
23
|
|
|
123
|
|
|
240
|
|
|||
Total
|
2,019
|
|
|
2,017
|
|
|
2,010
|
|
|||
System-wide:
(b)
|
|
|
|
|
|
||||||
Domestic sales percentage change
(c)
|
0.3
|
%
|
|
1.7
|
%
|
|
2.6
|
%
|
|||
Domestic same-restaurant sales percentage change
(d)
|
(0.3
|
)%
|
|
1.2
|
%
|
|
2.0
|
%
|
|||
Franchise:
(b)(e)
|
|
|
|
|
|
||||||
Domestic sales percentage change
(c)
|
5.7
|
%
|
|
8.1
|
%
|
|
11.3
|
%
|
|||
Domestic same-restaurant sales percentage change
(d)
|
(0.3
|
)%
|
|
1.3
|
%
|
|
2.0
|
%
|
|||
Domestic average weekly unit sales (in thousands)
|
$
|
46.5
|
|
|
$
|
46.6
|
|
|
$
|
46.4
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
IHOP Restaurant Data
|
|
|
|
|
|
||||||
Effective Restaurants:
(a)
|
|
|
|
|
|
||||||
Franchise
|
1,414
|
|
|
1,379
|
|
|
1,343
|
|
|||
Area license
|
167
|
|
|
165
|
|
|
163
|
|
|||
Company
|
12
|
|
|
15
|
|
|
11
|
|
|||
Total
|
1,593
|
|
|
1,559
|
|
|
1,517
|
|
|||
System-wide:
(b)
|
|
|
|
|
|
||||||
Sales percentage change
(c)
|
4.8
|
%
|
|
1.6
|
%
|
|
1.9
|
%
|
|||
Domestic same-restaurant sales percentage change
(d)
|
2.4
|
%
|
|
(1.6
|
)%
|
|
(2.0
|
)%
|
|||
Franchise:
(b)
|
|
|
|
|
|
||||||
Sales percentage change
(c)
|
4.8
|
%
|
|
1.3
|
%
|
|
1.7
|
%
|
|||
Domestic same-restaurant sales percentage change
(d)
|
2.4
|
%
|
|
(1.6
|
)%
|
|
(2.0
|
)%
|
|||
Average weekly unit sales (in thousands)
|
$
|
34.7
|
|
|
$
|
34.0
|
|
|
$
|
34.4
|
|
Area License:
(b)
|
|
|
|
|
|
||||||
IHOP sales percentage change
(c)
|
6.3
|
%
|
|
2.7
|
%
|
|
2.9
|
%
|
(a)
|
“Effective Restaurants” are the weighted average number of restaurants open in a given fiscal period, adjusted to account for restaurants open for only a portion of the period. Information is presented for all Effective Restaurants in the Applebee’s and IHOP systems, which includes restaurants owned by the Company as well as those owned by franchisees and area licensees.
|
(b)
|
“System-wide sales” are retail sales at Applebee’s restaurants operated by franchisees and IHOP restaurants operated by franchisees and area licensees, as reported to the Company, in addition to retail sales at company-operated restaurants. Sales at restaurants that are owned by franchisees and area licensees are not attributable to the Company. Unaudited reported sales for Applebee's domestic franchise restaurants, IHOP franchise restaurants and IHOP area license restaurants for the years ended
December 31, 2013
,
2012
and
2011
were as follows:
|
|
Year Ended December 31,
|
||||
Reported sales (unaudited)
|
2013
|
|
2012
|
|
2011
|
|
(In millions)
|
||||
Applebee's franchise restaurant sales
|
$4,474.7
|
|
$4,234.9
|
|
$3,916.4
|
IHOP franchise restaurant sales
|
$2,553.9
|
|
$2,437.2
|
|
$2,405.3
|
IHOP area license restaurant sales
|
$249.5
|
|
$234.7
|
|
$228.6
|
(c)
|
"Sales percentage change" reflects, for each category of restaurants, the percentage change in sales in any given fiscal year compared to the prior fiscal year for all restaurants in that category.
|
(d)
|
“Domestic same-restaurant sales percentage change” reflects the percentage change in sales in any given fiscal period, compared to the same weeks in the prior year, for domestic restaurants that have been operated throughout both fiscal periods that are being compared and have been open for at least 18 months. Because of new unit openings and restaurant closures, the domestic restaurants open throughout both fiscal periods being compared may be different from period to period. Domestic same-restaurant sales percentage change does not include data on IHOP area license restaurants.
|
(e)
|
The sales percentage change for Applebee's franchise and company-operated restaurants is impacted by the refranchising of
154
company-operated restaurants in 2012,
132
company-operated restaurants during 2011 and
83
company-operated restaurants during 2010.
|
|
Year Ended December 31,
|
|||||||
|
2013
|
|
2012
|
|
2011
|
|||
Applebee's Restaurant Development Activity
|
|
|
|
|
|
|||
Total restaurants, beginning of year
|
2,034
|
|
|
2,019
|
|
|
2,010
|
|
New franchise openings
|
26
|
|
|
34
|
|
|
24
|
|
Franchise closures
|
(49
|
)
|
|
(19
|
)
|
|
(15
|
)
|
Total restaurants, end of year
|
2,011
|
|
|
2,034
|
|
|
2,019
|
|
Summary—end of year:
|
|
|
|
|
|
|||
Franchise
|
1,988
|
|
|
2,011
|
|
|
1,842
|
|
Company
|
23
|
|
|
23
|
|
|
177
|
|
Total
|
2,011
|
|
|
2,034
|
|
|
2,019
|
|
Change over prior year
|
(1.1
|
)%
|
|
0.7
|
%
|
|
0.4
|
%
|
Applebee's Franchise Restaurant Activity
|
|
|
|
|
|
|||
New franchise openings:
|
|
|
|
|
|
|||
Domestic franchise openings
|
20
|
|
|
20
|
|
|
15
|
|
International franchise openings
|
6
|
|
|
14
|
|
|
9
|
|
Refranchised
|
—
|
|
|
154
|
|
|
132
|
|
Total restaurants franchised
|
26
|
|
|
188
|
|
|
156
|
|
Closings:
|
|
|
|
|
|
|||
Domestic franchise
|
(44
|
)
|
|
(6
|
)
|
|
(6
|
)
|
International franchise
|
(5
|
)
|
|
(13
|
)
|
|
(9
|
)
|
Total franchise closings
|
(49
|
)
|
|
(19
|
)
|
|
(15
|
)
|
Net franchise restaurant (reductions) additions
|
(23
|
)
|
|
169
|
|
|
141
|
|
IHOP Restaurant Development Activity
|
|
|
|
|
|
|||
Total restaurants, beginning of year
|
1,581
|
|
|
1,550
|
|
|
1,504
|
|
New openings:
|
|
|
|
|
|
|||
Franchise
|
54
|
|
|
47
|
|
|
52
|
|
Area license
|
4
|
|
|
1
|
|
|
6
|
|
Total new openings
|
58
|
|
|
48
|
|
|
58
|
|
Closings:
|
|
|
|
|
|
|||
Franchise
|
(17
|
)
|
|
(14
|
)
|
|
(8
|
)
|
Area license
|
(2
|
)
|
|
(2
|
)
|
|
(4
|
)
|
Company
|
—
|
|
|
(1
|
)
|
|
—
|
|
Total closings
|
(19
|
)
|
|
(17
|
)
|
|
(12
|
)
|
Total restaurants, end of year
|
1,620
|
|
|
1,581
|
|
|
1,550
|
|
Summary—end of year:
|
|
|
|
|
|
|||
Franchise
|
1,439
|
|
|
1,404
|
|
|
1,369
|
|
Area license
|
168
|
|
|
165
|
|
|
166
|
|
Company
|
13
|
|
|
12
|
|
|
15
|
|
Total
|
1,620
|
|
|
1,581
|
|
|
1,550
|
|
Change over prior year
|
2.5
|
%
|
|
2.0
|
%
|
|
3.1
|
%
|
IHOP Franchise Restaurant Activity
|
|
|
|
|
|
|||
New franchise openings:
|
|
|
|
|
|
|||
Domestic franchise openings
|
42
|
|
|
39
|
|
|
45
|
|
International franchise openings
|
11
|
|
|
8
|
|
|
7
|
|
Area license
|
5
|
|
|
1
|
|
|
6
|
|
Rehabilitated and refranchised
|
1
|
|
|
9
|
|
|
3
|
|
Total restaurants franchised
|
59
|
|
|
57
|
|
|
61
|
|
Closings:
|
|
|
|
|
|
|||
Domestic franchise
|
(17
|
)
|
|
(15
|
)
|
|
(8
|
)
|
Area license
|
(2
|
)
|
|
(2
|
)
|
|
(4
|
)
|
Total franchise closings
|
(19
|
)
|
|
(17
|
)
|
|
(12
|
)
|
Reacquired by the Company
|
(2
|
)
|
|
(7
|
)
|
|
(7
|
)
|
Net franchise restaurant additions
|
38
|
|
|
33
|
|
|
42
|
|
|
|||||||||||||||
|
|
Year ended December 31,
|
|
Favorable
(Unfavorable) Variance |
|||||||||||
|
|
|
|||||||||||||
|
|
2013
|
|
2012
|
|
$
|
|
%
(1)
|
|||||||
|
|
(In millions, except percentages)
|
|||||||||||||
Revenue
|
|
$
|
640.5
|
|
|
$
|
849.9
|
|
|
$
|
(209.4
|
)
|
|
(24.6
|
)%
|
Segment profit
|
|
369.7
|
|
|
391.9
|
|
|
(22.2
|
)
|
|
(5.7
|
)%
|
|||
Segment profit as % of revenue
|
|
57.7
|
%
|
|
46.1
|
%
|
|
—
|
|
|
11.6
|
%
|
|||
General & administrative expenses
|
|
143.6
|
|
|
163.2
|
|
|
19.6
|
|
|
12.0
|
%
|
|||
Interest expense
|
|
100.3
|
|
|
114.3
|
|
|
14.1
|
|
|
12.3
|
%
|
|||
Gain on disposition of assets
|
|
(0.2
|
)
|
|
(102.6
|
)
|
|
(102.4
|
)
|
|
(99.8
|
)%
|
|||
Income tax provision
|
|
38.6
|
|
|
67.2
|
|
|
28.7
|
|
|
42.6
|
%
|
|||
Effective tax rate
|
|
34.9
|
%
|
|
34.5
|
%
|
|
—
|
|
|
(0.4
|
)%
|
|||
Net income
|
|
$
|
72.0
|
|
|
$
|
127.7
|
|
|
$
|
(55.6
|
)
|
|
(43.6
|
)%
|
|
|
Year ended December 31,
|
|
Favorable
(Unfavorable) Variance |
|||||||||||
|
|
|
|||||||||||||
|
|
2013
|
|
2012
|
|
$
|
|
%
(1)
|
|||||||
|
|
(In millions, except percentages)
|
|||||||||||||
Franchise
|
|
$
|
439.2
|
|
|
$
|
421.4
|
|
|
$
|
17.8
|
|
|
4.2
|
%
|
Company
|
|
63.4
|
|
|
291.1
|
|
|
(227.7
|
)
|
|
(78.2
|
)%
|
|||
Rental
|
|
124.8
|
|
|
122.9
|
|
|
1.9
|
|
|
1.6
|
%
|
|||
Financing
|
|
13.1
|
|
|
14.5
|
|
|
(1.4
|
)
|
|
(9.5
|
)%
|
|||
Total revenue
|
|
$
|
640.5
|
|
|
$
|
849.9
|
|
|
$
|
(209.4
|
)
|
|
(24.6
|
)%
|
|
|
Year ended December 31,
|
|
Favorable
(Unfavorable) Variance |
|||||||||||
|
|
|
|||||||||||||
|
|
2013
|
|
2012
|
|
$
|
|
%
(1)
|
|||||||
|
|
(In millions, except percentages)
|
|||||||||||||
Franchise operations
|
|
$
|
329.5
|
|
|
$
|
311.5
|
|
|
$
|
18.0
|
|
|
5.8
|
%
|
Company restaurant operations
|
|
(0.2
|
)
|
|
41.8
|
|
|
(42.0
|
)
|
|
(100.4
|
)%
|
|||
Rental operations
|
|
27.5
|
|
|
25.7
|
|
|
1.8
|
|
|
6.9
|
%
|
|||
Financing operations
|
|
12.9
|
|
|
12.9
|
|
|
0.0
|
|
|
—
|
%
|
|||
Total
|
|
$
|
369.7
|
|
|
$
|
391.9
|
|
|
$
|
(22.2
|
)
|
|
(5.7
|
)%
|
|
|
Year ended December 31,
|
|
Favorable
(Unfavorable) Variance |
|||||||||||
|
|
|
|||||||||||||
|
|
2013
|
|
2012
|
|
$
|
|
%
(2)
|
|||||||
|
|
(In millions, except percentages and number of restaurants)
|
|||||||||||||
Effective Franchise Restaurants:
(1)
|
|
|
|
|
|
|
|
|
|||||||
Applebee’s
|
|
1,996
|
|
|
1,894
|
|
|
102
|
|
|
5.4
|
%
|
|||
IHOP
|
|
1,581
|
|
|
1,544
|
|
|
37
|
|
|
2.4
|
%
|
|||
Franchise Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Applebee’s
|
|
$
|
199.2
|
|
|
$
|
185.9
|
|
|
$
|
13.3
|
|
|
7.2
|
%
|
IHOP
|
|
160.5
|
|
|
159.1
|
|
|
1.4
|
|
|
0.8
|
%
|
|||
IHOP advertising
|
|
79.5
|
|
|
76.4
|
|
|
3.1
|
|
|
3.9
|
%
|
|||
Total franchise revenues
|
|
439.2
|
|
|
421.4
|
|
|
17.8
|
|
|
4.2
|
%
|
|||
Franchise Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Applebee’s
|
|
5.7
|
|
|
5.5
|
|
|
(0.2
|
)
|
|
(4.1
|
)%
|
|||
IHOP
|
|
24.5
|
|
|
28.0
|
|
|
3.5
|
|
|
12.5
|
%
|
|||
IHOP advertising
|
|
79.5
|
|
|
76.4
|
|
|
(3.1
|
)
|
|
(3.9
|
)%
|
|||
Total franchise expenses
|
|
109.7
|
|
|
109.9
|
|
|
0.2
|
|
|
0.2
|
%
|
|||
Franchise Segment Profit:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Applebee’s
|
|
193.5
|
|
|
180.4
|
|
|
13.1
|
|
|
7.3
|
%
|
|||
IHOP
|
|
136.0
|
|
|
131.1
|
|
|
4.9
|
|
|
3.7
|
%
|
|||
Total franchise segment profit
|
|
$
|
329.5
|
|
|
$
|
311.5
|
|
|
$
|
18.0
|
|
|
5.8
|
%
|
Segment profit as % of revenue
(2)
|
|
75.0
|
%
|
|
73.9
|
%
|
|
|
|
|
|
|
Year ended December 31,
|
|
Favorable
(Unfavorable) Variance |
|||||||||||
|
|
|
|||||||||||||
|
|
2013
|
|
2012
|
|
$
|
|
%
(2)
|
|||||||
|
|
(In millions, except percentages and number of restaurants)
|
|||||||||||||
Effective Company Restaurants:
(1)
|
|
|
|
|
|
|
|
|
|||||||
Applebee’s
|
|
23
|
|
|
123
|
|
|
(100
|
)
|
|
(81.3
|
)%
|
|||
IHOP
|
|
12
|
|
|
15
|
|
|
(3
|
)
|
|
(20.0
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Company restaurant sales
|
|
$
|
63.4
|
|
|
$
|
291.1
|
|
|
$
|
(227.7
|
)
|
|
(78.2
|
)%
|
Company restaurant expenses
|
|
63.6
|
|
|
249.3
|
|
|
185.7
|
|
|
74.5
|
%
|
|||
Company restaurant segment profit
|
|
$
|
(0.2
|
)
|
|
$
|
41.8
|
|
|
$
|
(42.0
|
)
|
|
(100.4
|
)%
|
Segment profit as % of revenue
(2)
|
|
(0.2
|
)%
|
|
14.4
|
%
|
|
|
|
|
|
|
Year ended December 31,
|
|
Favorable
(Unfavorable) Variance |
|||||||||||
|
|
|
|||||||||||||
|
|
2013
|
|
2012
|
|
$
|
|
%
(1)
|
|||||||
|
|
(In millions, except percentages)
|
|||||||||||||
Rental revenues
|
|
$
|
124.8
|
|
|
$
|
122.9
|
|
|
$
|
1.9
|
|
|
1.6
|
%
|
Rental expenses
|
|
97.3
|
|
|
97.2
|
|
|
(0.1
|
)
|
|
(0.1
|
)%
|
|||
Rental operations segment profit
|
|
$
|
27.5
|
|
|
$
|
25.7
|
|
|
$
|
1.8
|
|
|
6.9
|
%
|
Segment profit as % of revenue
(1)
|
|
22.0
|
%
|
|
20.9
|
%
|
|
|
|
|
|
|
Year ended December 31,
|
|
Favorable
(Unfavorable) Variance |
|||||||||||
|
|
|
|||||||||||||
|
|
2013
|
|
2012
|
|
$
|
|
%
(1)
|
|||||||
|
|
(In millions, except percentages)
|
|||||||||||||
Financing revenues
|
|
$
|
13.1
|
|
|
$
|
14.5
|
|
|
$
|
(1.4
|
)
|
|
(9.5
|
)%
|
Financing expenses
|
|
0.2
|
|
|
1.6
|
|
|
1.4
|
|
|
84.9
|
%
|
|||
Financing operations segment profit
|
|
$
|
12.9
|
|
|
$
|
12.9
|
|
|
$
|
0.0
|
|
|
—
|
%
|
Segment profit as % of revenue
(1)
|
|
98.1
|
%
|
|
88.8
|
%
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
Favorable
(Unfavorable) Variance |
|||||||||||
|
|
|
|||||||||||||
|
|
2013
|
|
2012
|
|
$
|
|
%
|
|||||||
|
|
(In millions, except percentages)
|
|||||||||||||
General and administrative expenses
|
|
$
|
143.6
|
|
|
$
|
163.2
|
|
|
$
|
19.6
|
|
|
12.0
|
%
|
Interest expense
|
|
100.3
|
|
|
114.3
|
|
|
14.1
|
|
|
12.3
|
%
|
|||
Amortization of intangible assets
|
|
12.3
|
|
|
12.3
|
|
|
0.0
|
|
|
0.1
|
%
|
|||
Closure and impairment charges
|
|
1.8
|
|
|
4.2
|
|
|
2.4
|
|
|
57.0
|
%
|
|||
Loss on extinguishment of debt
|
|
0.1
|
|
|
5.6
|
|
|
5.5
|
|
|
99.0
|
%
|
|||
Debt modification costs
|
|
1.3
|
|
|
—
|
|
|
(1.3
|
)
|
|
n.m.
|
|
|||
Gain on disposition of assets
|
|
(0.2
|
)
|
|
(102.6
|
)
|
|
(102.4
|
)
|
|
(99.8
|
)%
|
|||
Provision for income taxes
|
|
38.6
|
|
|
67.2
|
|
|
28.7
|
|
|
42.6
|
%
|
|
|
Year Ended
December 31,
|
||||||
|
|
2013
|
|
2012
|
||||
|
|
(In millions)
|
||||||
Closure charges
|
|
$
|
1.0
|
|
|
$
|
2.3
|
|
Long-lived tangible asset impairment
|
|
0.8
|
|
|
1.9
|
|
||
Total closure and impairment charges
|
|
$
|
1.8
|
|
|
$
|
4.2
|
|
Instrument Retired/Repaid
(1)
|
|
Face Amount
Retired/Repaid
|
|
Cash Paid
|
|
Loss
(2)
|
||||||
|
|
(In millions)
|
||||||||||
Term Loans
|
|
$
|
4.8
|
|
|
$
|
4.8
|
|
|
$
|
0.1
|
|
Loss on extinguishment of debt, 2013
|
|
$
|
4.8
|
|
|
$
|
4.8
|
|
|
$
|
0.1
|
|
|
|
|
|
|
|
|
||||||
Term Loans
|
|
$
|
210.5
|
|
|
$
|
210.5
|
|
|
$
|
4.9
|
|
Senior Notes
|
|
5.0
|
|
|
5.5
|
|
|
0.7
|
|
|||
Loss on extinguishment of debt, 2012
|
|
$
|
215.5
|
|
|
$
|
216.0
|
|
|
$
|
5.6
|
|
|
|
Year ended December 31,
|
|
Favorable
(Unfavorable) Variance |
|||||||||||
|
|
|
|||||||||||||
|
|
2012
|
|
2011
|
|
$
|
|
%
(1)
|
|||||||
|
|
(In millions, except percentages)
|
|||||||||||||
Revenue
|
|
$
|
849.9
|
|
|
$
|
1,075.2
|
|
|
$
|
(225.3
|
)
|
|
(24.6
|
)%
|
Segment profit
|
|
391.9
|
|
|
407.6
|
|
|
(15.7
|
)
|
|
(3.9
|
)%
|
|||
Segment profit as % of revenue
|
|
46.1
|
%
|
|
37.9
|
%
|
|
—
|
|
|
21.6
|
%
|
|||
General & administrative expenses
|
|
163.2
|
|
|
155.8
|
|
|
(7.4
|
)
|
|
(4.7
|
)%
|
|||
Interest expense
|
|
114.3
|
|
|
132.7
|
|
|
18.4
|
|
|
13.8
|
%
|
|||
Impairment and closure charges
|
|
4.2
|
|
|
29.9
|
|
|
25.7
|
|
|
85.9
|
%
|
|||
Gain on disposition of assets
|
|
(102.6
|
)
|
|
(43.3
|
)
|
|
59.3
|
|
|
(137.2
|
)%
|
|||
Income tax provision
|
|
67.2
|
|
|
29.8
|
|
|
(37.4
|
)
|
|
(125.6
|
)%
|
|||
Effective tax rate
|
|
34.5
|
%
|
|
28.4
|
%
|
|
(6.1
|
)%
|
|
(21.5
|
)%
|
|||
Net income
|
|
$
|
127.7
|
|
|
$
|
75.2
|
|
|
$
|
52.5
|
|
|
69.8
|
%
|
•
|
The successful refranchising of 154 Applebee's company-operated restaurants during
2012
that resulted in increased gains on the disposition of the restaurants partially offset by lower segment profit;
|
•
|
Lower impairment and closure charges due to non-recurring costs of $27.5 million related to the
2011
termination of the sublease of Applebee's Restaurant Support Center;
|
•
|
Lower interest expense due to the ongoing early retirement of debt with both proceeds from the asset dispositions and excess cash flow;
|
•
|
G&A expenses increased
$7.4 million
, primarily due to a $9.1 million charge for settling certain litigation that commenced prior to our 2007 acquisition of Applebee's; and
|
•
|
An increased effective tax rate. The 2011 effective tax rate was lower than the statutory Federal tax rate of 35% primarily due to tax credits, changes in tax rates and the release of liabilities for unrecognized tax benefits. The tax benefits are primarily FICA tip and other compensation-related credits associated with Applebee's company-operated restaurants. As company-operated restaurants are refranchised the amount of these credits declines.
|
|
|
Year ended December 31,
|
|
Favorable
(Unfavorable) Variance |
|||||||||||
|
|
|
|||||||||||||
|
|
2012
|
|
2011
|
|
$
|
|
%
(1)
|
|||||||
|
|
(In millions, except percentages)
|
|||||||||||||
Franchise
|
|
$
|
421.4
|
|
|
$
|
398.5
|
|
|
$
|
22.9
|
|
|
5.8
|
%
|
Company
|
|
291.1
|
|
|
531.0
|
|
|
(239.9
|
)
|
|
(45.2
|
)%
|
|||
Rental
|
|
122.9
|
|
|
126.0
|
|
|
(3.1
|
)
|
|
(2.5
|
)%
|
|||
Financing
|
|
14.5
|
|
|
19.7
|
|
|
(5.2
|
)
|
|
(26.5
|
)%
|
|||
Total revenue
|
|
$
|
849.9
|
|
|
$
|
1,075.2
|
|
|
$
|
(225.3
|
)
|
|
(24.6
|
)%
|
|
|
Year ended December 31,
|
|
Favorable
(Unfavorable) Variance |
|||||||||||
|
|
|
|||||||||||||
|
|
2012
|
|
2011
|
|
$
|
|
%
(1)
|
|||||||
|
|
(In millions, except percentages)
|
|||||||||||||
Franchise operations
|
|
$
|
311.5
|
|
|
$
|
293.5
|
|
|
$
|
18.0
|
|
|
6.1
|
%
|
Company restaurant operations
|
|
41.8
|
|
|
72.6
|
|
|
(30.8
|
)
|
|
(42.3
|
)%
|
|||
Rental operations
|
|
25.7
|
|
|
27.8
|
|
|
(2.1
|
)
|
|
(7.6
|
)%
|
|||
Financing operations
|
|
12.9
|
|
|
13.7
|
|
|
(0.8
|
)
|
|
(6.4
|
)%
|
|||
Total
|
|
$
|
391.9
|
|
|
$
|
407.6
|
|
|
$
|
(15.7
|
)
|
|
(3.9
|
)%
|
|
Year ended December 31,
|
|
Favorable
(Unfavorable)
Variance
|
|
%
Change
(1)
|
|||||||||
|
2012
|
|
2011
|
|
|
|||||||||
Franchise revenues
|
(In millions)
|
|
|
|||||||||||
Applebee's
|
$
|
185.9
|
|
|
$
|
169.2
|
|
|
$
|
16.7
|
|
|
9.9
|
%
|
IHOP
|
159.1
|
|
|
153.8
|
|
|
5.3
|
|
|
3.4
|
%
|
|||
IHOP advertising
|
76.4
|
|
|
75.5
|
|
|
0.9
|
|
|
1.3
|
%
|
|||
Total franchise revenues
|
421.4
|
|
|
398.5
|
|
|
22.9
|
|
|
5.8
|
%
|
|||
Franchise expenses
|
|
|
|
|
|
|
|
|||||||
Applebee's
|
5.5
|
|
|
2.8
|
|
|
(2.7
|
)
|
|
(95.1
|
)%
|
|||
IHOP
|
28.0
|
|
|
26.7
|
|
|
(1.3
|
)
|
|
(4.8
|
)%
|
|||
IHOP advertising
|
76.4
|
|
|
75.5
|
|
|
(0.9
|
)
|
|
(1.3
|
)%
|
|||
Total franchise expenses
|
109.9
|
|
|
105.0
|
|
|
(4.9
|
)
|
|
(4.7
|
)%
|
|||
Franchise segment profit
|
|
|
|
|
|
|
|
|||||||
Applebee's
|
180.4
|
|
|
166.4
|
|
|
14.0
|
|
|
8.4
|
%
|
|||
IHOP
|
131.1
|
|
|
127.1
|
|
|
4.0
|
|
|
3.2
|
%
|
|||
Total franchise segment profit
|
$
|
311.5
|
|
|
$
|
293.5
|
|
|
$
|
18.0
|
|
|
6.1
|
%
|
Segment profit as % of revenue
(1)
|
73.9
|
%
|
|
73.7
|
%
|
|
|
|
|
|
|
(1)
|
Percentages are calculated on actual amounts, not the rounded amounts presented above
|
|
Year ended December 31
|
|
Favorable
(Unfavorable)
Variance
|
|
%
Change
(1)
|
|||||||||
|
2012
|
|
2011
|
|
|
|||||||||
|
(In millions)
|
|
|
|||||||||||
Company restaurant sales
|
$
|
291.1
|
|
|
$
|
531.0
|
|
|
$
|
(239.9
|
)
|
|
(45.2
|
)%
|
Company restaurant expenses
|
249.3
|
|
|
458.4
|
|
|
209.1
|
|
|
45.6
|
%
|
|||
Company restaurant segment profit
|
$
|
41.8
|
|
|
$
|
72.6
|
|
|
$
|
(30.8
|
)
|
|
(42.3
|
)%
|
Segment profit as % of revenue
(1)
|
14.4
|
%
|
|
13.7
|
%
|
|
|
|
|
|
|
(1)
|
Percentages are calculated on actual amounts, not the rounded amounts presented above
|
|
|
|
|
|
|
Favorable (Unfavorable)
|
|||||||||
|
|
Year Ended
|
|
|
|
Components of Total Variance
|
|||||||||
Applebee's Company-Operated Expenses
|
|
December 31,
|
|
Total
|
|
|
|
Current
|
|||||||
As Percentage of Restaurant Sales
|
|
2012
|
|
2011
|
|
Variance
|
|
Refranchised
|
|
Restaurants
|
|||||
Revenue
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|||
Food and beverage
|
|
26.1
|
%
|
|
25.7
|
%
|
|
(0.4
|
)%
|
|
0.2
|
%
|
|
(0.6
|
)%
|
Labor
|
|
32.4
|
%
|
|
32.7
|
%
|
|
0.3
|
%
|
|
0.7
|
%
|
|
(0.4
|
)%
|
Direct and occupancy
|
|
25.2
|
%
|
|
27.1
|
%
|
|
1.9
|
%
|
|
1.2
|
%
|
|
0.7
|
%
|
Restaurant operating profit margin
(1)
|
|
16.3
|
%
|
|
14.5
|
%
|
|
1.8
|
%
|
|
2.1
|
%
|
|
(0.3
|
)%
|
•
|
Food and beverage costs as a percentage of company restaurant sales increased 0.6%, primarily due to an increase in commodity costs.
|
•
|
Labor costs as a percentage of restaurant sales increased 0.4% due to higher group insurance and bonus costs.
|
•
|
Direct and occupancy costs as a percentage of company restaurant sales decreased 0.7% due to lower depreciation and general liability insurance costs, partially offset by incremental investment in local advertising, increased repair and maintenance costs and higher rents.
|
|
Year ended December 31,
|
|
Favorable
(Unfavorable)
Variance
|
|
%
Change
(1)
|
|||||||||
|
2012
|
|
2011
|
|
|
|||||||||
|
(In millions)
|
|
|
|||||||||||
Rental revenues
|
$
|
122.9
|
|
|
$
|
126.0
|
|
|
$
|
(3.1
|
)
|
|
(2.5
|
)%
|
Rental expenses
|
97.2
|
|
|
98.2
|
|
|
1.0
|
|
|
1.0
|
%
|
|||
Rental operations segment profit
|
$
|
25.7
|
|
|
$
|
27.8
|
|
|
$
|
(2.1
|
)
|
|
(7.6
|
)%
|
Segment profit as % of revenue
(1)
|
20.9
|
%
|
|
22.1
|
%
|
|
|
|
|
|
|
(1)
|
Percentages are calculated on actual amounts, not the rounded amounts presented above
|
|
Year ended December 31
|
|
Favorable
(Unfavorable)
Variance
|
|
%
Change
(1)
|
|||||||||
|
2012
|
|
2011
|
|
|
|||||||||
|
(In millions)
|
|
|
|||||||||||
Financing revenues
|
$
|
14.5
|
|
|
$
|
19.7
|
|
|
$
|
(5.2
|
)
|
|
(26.5
|
)%
|
Financing expenses
|
1.6
|
|
|
6.0
|
|
|
4.4
|
|
|
72.8
|
%
|
|||
Financing operations segment profit
|
$
|
12.9
|
|
|
$
|
13.7
|
|
|
$
|
(0.8
|
)
|
|
(6.4
|
)%
|
Segment profit as % of revenue
(1)
|
88.8
|
%
|
|
69.7
|
%
|
|
|
|
|
|
|
(1)
|
Percentages are calculated on actual amounts, not the rounded amounts presented above
|
|
Year ended December 31,
|
|
Favorable
(Unfavorable)
Variance
|
|
%
Change
(1)
|
|||||||||
|
2012
|
|
2011
|
|
|
|||||||||
|
(In millions)
|
|
|
|||||||||||
General and administrative expenses
|
$
|
163.2
|
|
|
$
|
155.8
|
|
|
$
|
(7.4
|
)
|
|
(4.7
|
)%
|
Interest expense
|
114.3
|
|
|
132.7
|
|
|
18.4
|
|
|
13.8
|
%
|
|||
Impairment and closure charges
|
4.2
|
|
|
29.9
|
|
|
25.7
|
|
|
85.9
|
%
|
|||
Amortization of intangible assets
|
12.3
|
|
|
12.3
|
|
|
—
|
|
|
—
|
|
|||
Loss on extinguishment of debt
|
5.6
|
|
|
11.2
|
|
|
5.6
|
|
|
50.2
|
%
|
|||
Debt modification costs
|
—
|
|
|
4.0
|
|
|
4.0
|
|
|
n.m.
|
|
|||
Gain on disposition of assets
|
(102.6
|
)
|
|
(43.3
|
)
|
|
59.3
|
|
|
(137.2
|
)%
|
|||
Income tax provision
|
67.2
|
|
|
29.8
|
|
|
(37.4
|
)
|
|
(125.6
|
)%
|
(1)
|
Percentages are calculated on actual amounts, not the rounded amounts presented above
|
|
Year Ended
December 31,
|
||||||
|
2012
|
|
2011
|
||||
|
(In millions)
|
||||||
Long-lived tangible asset impairment
|
$
|
1.9
|
|
|
$
|
4.9
|
|
Lenexa lease termination
|
—
|
|
|
23.0
|
|
||
Other closure charges
|
2.3
|
|
|
2.0
|
|
||
Total impairment and closure charges
|
$
|
4.2
|
|
|
$
|
29.9
|
|
|
Instrument Retired/Repaid
(1)
|
|
Face Amount
Retired/Repaid
|
|
Cash Paid
|
|
Loss
(2)
|
||||||
|
|
|
(In millions)
|
||||||||||
|
Term Loans
|
|
$
|
210.5
|
|
|
$
|
210.5
|
|
|
$
|
4.9
|
|
|
Senior Notes
|
|
5.0
|
|
|
5.5
|
|
|
0.7
|
|
|||
|
Loss on extinguishment of debt, 2012
|
|
$
|
215.5
|
|
|
$
|
216.0
|
|
|
$
|
5.6
|
|
|
|
|
|
|
|
|
|
||||||
|
Term Loans
|
|
$
|
161.5
|
|
|
$
|
161.5
|
|
|
$
|
3.2
|
|
|
Senior Notes
|
|
59.3
|
|
|
64.2
|
|
|
8.0
|
|
|||
|
Loss on extinguishment of debt, 2011
|
|
$
|
220.8
|
|
|
$
|
225.7
|
|
|
$
|
11.2
|
|
|
|
|
|
|
|
|
|
•
|
Mandatory prepayments equal to 0.25% of the aggregate principal amount of the Term Loan borrowing ($472.0 million borrowed concurrent with Amendment No. 2) must be made on a quarterly basis (1.0% for a fiscal year); and
|
•
|
50% of Excess Cash Flow if the consolidated leverage ratio is 5.75:1 or greater; 25% if the consolidated leverage ratio is less than 5.75:1 and greater than or equal to 5.25:1; and 0% if the consolidated leverage ratio is less than 5.25:1. There were no mandatory repayments of Term Loans from Excess Cash Flow required in 2013.
|
|
(In thousands)
|
||
U.S. GAAP income before income taxes
|
$
|
110,617
|
|
Interest charges
|
116,453
|
|
|
Loss on extinguishment of debt
|
58
|
|
|
Depreciation and amortization
|
35,355
|
|
|
Non-cash stock-based compensation
|
9,364
|
|
|
Impairment and closure charges
|
1,812
|
|
|
Other
|
3,652
|
|
|
Gain on disposition of assets
|
(223
|
)
|
|
Adjusted EBITDA
|
$
|
277,088
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In millions)
|
||||||||||
Net cash provided by operating activities
|
$
|
127.8
|
|
|
$
|
52.9
|
|
|
$
|
121.7
|
|
Net cash provided by investing activities
|
7.0
|
|
|
165.4
|
|
|
101.7
|
|
|||
Net cash used in financing activities
|
(93.3
|
)
|
|
(214.5
|
)
|
|
(265.0
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
41.5
|
|
|
$
|
3.8
|
|
|
$
|
(41.6
|
)
|
|
Principal Receipts Due By Period
|
||||||||||||||||||||||||||
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Thereafter
|
|
Total
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Equipment leases
(1)
|
$
|
7.1
|
|
|
$
|
7.7
|
|
|
$
|
8.0
|
|
|
$
|
13.5
|
|
|
$
|
8.8
|
|
|
$
|
70.0
|
|
|
$
|
115.1
|
|
Direct financing leases
(2)
|
7.0
|
|
|
8.0
|
|
|
8.8
|
|
|
10.1
|
|
|
11.1
|
|
|
43.6
|
|
|
88.6
|
|
|||||||
Franchise notes and other
(3)
|
0.8
|
|
|
0.7
|
|
|
0.4
|
|
|
0.1
|
|
|
0.1
|
|
|
0.0
|
|
|
2.1
|
|
|||||||
Total
|
$
|
14.9
|
|
|
$
|
16.4
|
|
|
$
|
17.2
|
|
|
$
|
23.7
|
|
|
$
|
20.0
|
|
|
$
|
113.6
|
|
|
$
|
205.8
|
|
(1)
|
Equipment lease receivables extend through the year
2029
.
|
(2)
|
Direct financing lease receivables extend through the year
2027
.
|
(3)
|
Franchise note receivables extend through the year
2020
.
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In millions)
|
||||||||||
Cash flows provided by operating activities
|
$
|
127.8
|
|
|
$
|
52.9
|
|
|
$
|
121.7
|
|
Principal receipts from long-term receivables
|
14.0
|
|
|
12.2
|
|
|
13.1
|
|
|||
Additions to property and equipment
|
(7.0
|
)
|
|
(17.0
|
)
|
|
(26.3
|
)
|
|||
Principal payments on capital lease and financing obligations
|
(10.0
|
)
|
|
(10.8
|
)
|
|
(13.4
|
)
|
|||
Mandatory 1% repayment of principal balance of Term Loans
|
(4.7
|
)
|
|
(7.4
|
)
|
|
(7.4
|
)
|
|||
Free cash flow
|
$
|
120.1
|
|
|
$
|
29.9
|
|
|
$
|
87.7
|
|
Year ended December 31, 2013
|
Declaration date
|
|
Payment date
|
|
Dividend per share
|
|
Total
(1)
|
||||
|
|
|
|
|
|
|
(In millions)
|
||||
First quarter
|
February 26, 2013
|
|
March 29, 2013
|
|
$
|
0.75
|
|
|
$
|
14.6
|
|
Second quarter
|
May 14, 2013
|
|
June 28, 2013
|
|
0.75
|
|
|
14.4
|
|
||
Third quarter
|
August 2, 2013
|
|
September 27, 2013
|
|
0.75
|
|
|
14.3
|
|
||
Fourth quarter
|
October 3, 2013
|
|
December 27, 2013
|
|
0.75
|
|
|
14.3
|
|
||
Total
|
|
|
|
|
$
|
3.00
|
|
|
$
|
57.6
|
|
|
Payments Due By Period
|
||||||||||||||||||
Contractual Obligations
|
1 Year
|
|
2 - 3 Years
|
|
4 - 5 Years
|
|
More than
5 Years
|
|
Total
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Debt
(1)
|
$
|
94.5
|
|
|
$
|
189.0
|
|
|
$
|
1,360.2
|
|
|
$
|
—
|
|
|
$
|
1,643.7
|
|
Operating leases
|
76.7
|
|
|
156.7
|
|
|
138.1
|
|
|
392.2
|
|
|
763.7
|
|
|||||
Capital leases
(1)
|
24.3
|
|
|
50.0
|
|
|
41.6
|
|
|
76.3
|
|
|
192.2
|
|
|||||
Financing obligations
(1)
|
5.7
|
|
|
11.9
|
|
|
11.3
|
|
|
92.3
|
|
|
121.2
|
|
|||||
Purchase commitments
|
90.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
90.9
|
|
|||||
Unrecognized income tax benefits
(2)
|
0.2
|
|
|
—
|
|
|
—
|
|
|
2.5
|
|
|
2.7
|
|
|||||
Total minimum payments
|
292.3
|
|
|
407.6
|
|
|
1,551.2
|
|
|
563.3
|
|
|
2,814.4
|
|
|||||
Less interest
|
(108.1
|
)
|
|
(212.4
|
)
|
|
(171.9
|
)
|
|
(64.0
|
)
|
|
(556.4
|
)
|
|||||
Total
|
$
|
184.2
|
|
|
$
|
195.2
|
|
|
$
|
1,379.3
|
|
|
$
|
499.3
|
|
|
$
|
2,258.0
|
|
|
Expiration By Period
|
||||||||||||||||||
Commitments
|
1 Year
|
|
2 - 3 Years
|
|
4 - 5 Years
|
|
More than
5 Years
|
|
Total
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Lease guarantees
(3)
|
$
|
20.6
|
|
|
$
|
39.6
|
|
|
$
|
36.8
|
|
|
$
|
320.8
|
|
|
$
|
417.8
|
|
Letters of credit
(4)
|
10.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.9
|
|
|||||
Food purchases
(5)
|
8.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.5
|
|
|||||
Total
|
$
|
40.0
|
|
|
$
|
39.6
|
|
|
$
|
36.8
|
|
|
$
|
320.8
|
|
|
$
|
437.2
|
|
|
Page
Reference
|
Report of Independent Registered Public Accounting Firm
|
|
DineEquity, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share amounts)
|
|||||||
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
106,011
|
|
|
$
|
64,537
|
|
Receivables, net
|
144,137
|
|
|
128,610
|
|
||
Prepaid gift cards
|
49,223
|
|
|
50,242
|
|
||
Prepaid income taxes
|
4,708
|
|
|
16,080
|
|
||
Deferred income taxes
|
23,853
|
|
|
21,772
|
|
||
Other current assets
|
3,650
|
|
|
13,214
|
|
||
Total current assets
|
331,582
|
|
|
294,455
|
|
||
Long-term receivables
|
197,153
|
|
|
212,269
|
|
||
Property and equipment, net
|
274,295
|
|
|
294,375
|
|
||
Goodwill
|
697,470
|
|
|
697,470
|
|
||
Other intangible assets, net
|
794,057
|
|
|
806,093
|
|
||
Other assets, net
|
110,085
|
|
|
110,738
|
|
||
Total assets
|
$
|
2,404,642
|
|
|
$
|
2,415,400
|
|
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current maturities of long-term debt
|
$
|
4,720
|
|
|
$
|
7,420
|
|
Accounts payable
|
40,050
|
|
|
30,751
|
|
||
Gift card liability
|
171,955
|
|
|
161,689
|
|
||
Accrued employee compensation and benefits
|
24,956
|
|
|
22,435
|
|
||
Accrued interest payable
|
13,575
|
|
|
13,236
|
|
||
Current maturities of capital lease and financing obligations
|
12,247
|
|
|
10,878
|
|
||
Other accrued expenses
|
16,770
|
|
|
21,351
|
|
||
Total current liabilities
|
284,273
|
|
|
267,760
|
|
||
Long-term debt, less current maturities
|
1,203,517
|
|
|
1,202,063
|
|
||
Capital lease obligations, less current maturities
|
111,707
|
|
|
124,375
|
|
||
Financing obligations, less current maturities
|
48,843
|
|
|
52,049
|
|
||
Deferred income taxes
|
341,578
|
|
|
362,171
|
|
||
Other liabilities
|
99,545
|
|
|
98,177
|
|
||
Total liabilities
|
2,089,463
|
|
|
2,106,595
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
||||
Common stock, $0.01 par value; shares: 40,000,000 authorized; 2013 - 25,299,315 issued, 19,040,890 outstanding; 2012 - 25,362,946 issued, 19,197,899 outstanding
|
253
|
|
|
254
|
|
||
Additional paid-in-capital
|
274,202
|
|
|
264,342
|
|
||
Retained earnings
|
336,578
|
|
|
322,045
|
|
||
Accumulated other comprehensive loss
|
(164
|
)
|
|
(152
|
)
|
||
Treasury stock, at cost; shares: 2013 - 6,258,425; 2012 - 6,165,047
|
(295,690
|
)
|
|
(277,684
|
)
|
||
Total stockholders' equity
|
315,179
|
|
|
308,805
|
|
||
Total liabilities and stockholders' equity
|
$
|
2,404,642
|
|
|
$
|
2,415,400
|
|
DineEquity, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income
(In thousands, except per share amounts)
|
|||||||||||
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Segment Revenues:
|
|
|
|
|
|
||||||
Franchise and restaurant revenues
|
$
|
502,586
|
|
|
$
|
712,580
|
|
|
$
|
929,523
|
|
Rental revenues
|
124,769
|
|
|
122,859
|
|
|
125,960
|
|
|||
Financing revenues
|
13,112
|
|
|
14,489
|
|
|
19,715
|
|
|||
Total segment revenues
|
640,467
|
|
|
849,928
|
|
|
1,075,198
|
|
|||
Segment Expenses:
|
|
|
|
|
|
||||||
Franchise and restaurant expenses
|
173,232
|
|
|
359,196
|
|
|
563,449
|
|
|||
Rental expenses
|
97,298
|
|
|
97,165
|
|
|
98,147
|
|
|||
Financing expenses
|
245
|
|
|
1,623
|
|
|
5,973
|
|
|||
Total segment expenses
|
270,775
|
|
|
457,984
|
|
|
667,569
|
|
|||
Gross segment profit
|
369,692
|
|
|
391,944
|
|
|
407,629
|
|
|||
General and administrative expenses
|
143,586
|
|
|
163,215
|
|
|
155,822
|
|
|||
Interest expense
|
100,264
|
|
|
114,338
|
|
|
132,707
|
|
|||
Amortization of intangible assets
|
12,282
|
|
|
12,293
|
|
|
12,300
|
|
|||
Closure and impairment charges
|
1,812
|
|
|
4,218
|
|
|
29,865
|
|
|||
Loss on extinguishment of debt
|
58
|
|
|
5,554
|
|
|
11,159
|
|
|||
Debt modification costs
|
1,296
|
|
|
—
|
|
|
4,031
|
|
|||
Gain on disposition of assets
|
(223
|
)
|
|
(102,597
|
)
|
|
(43,253
|
)
|
|||
Income before income taxes
|
110,617
|
|
|
194,923
|
|
|
104,998
|
|
|||
Income tax provision
|
(38,580
|
)
|
|
(67,249
|
)
|
|
(29,806
|
)
|
|||
Net income
|
72,037
|
|
|
127,674
|
|
|
75,192
|
|
|||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Adjustment to unrealized loss on available-for-sale investments
|
—
|
|
|
140
|
|
|
—
|
|
|||
Foreign currency translation adjustment
|
(12
|
)
|
|
2
|
|
|
(12
|
)
|
|||
Total comprehensive income
|
$
|
72,025
|
|
|
$
|
127,816
|
|
|
$
|
75,180
|
|
Net income available to common stockholders:
|
|
|
|
|
|
||||||
Net income
|
$
|
72,037
|
|
|
$
|
127,674
|
|
|
$
|
75,192
|
|
Less: Net income allocated to unvested participating restricted stock
|
(1,200
|
)
|
|
(2,718
|
)
|
|
(1,886
|
)
|
|||
Less: Accretion of Series B preferred stock
|
—
|
|
|
(2,498
|
)
|
|
(2,573
|
)
|
|||
Net income available to common stockholders
|
$
|
70,837
|
|
|
$
|
122,458
|
|
|
$
|
70,733
|
|
Net income available to common stockholders per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
3.75
|
|
|
$
|
6.81
|
|
|
$
|
3.96
|
|
Diluted
|
$
|
3.70
|
|
|
$
|
6.63
|
|
|
$
|
3.89
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
18,871
|
|
|
17,992
|
|
|
17,846
|
|
|||
Diluted
|
19,141
|
|
|
18,877
|
|
|
18,185
|
|
|||
|
|
|
|
|
|
||||||
Dividends declared per common share
|
$
|
3.00
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Dividends paid per common share
|
$
|
3.00
|
|
|
$
|
—
|
|
|
$
|
—
|
|
DineEquity, Inc. and Subsidiaries
Consolidated Statements of Stockholders' Equity
(In thousands, except share amounts)
|
||||||||||||||||||||||||||||||||||||
|
Preferred Stock
|
|
Common Stock
|
|
|
|
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Treasury Stock
|
|
|
|||||||||||||||||||||||
|
Shares
Outstanding
|
|
Series B
Amount
|
|
Shares
Outstanding
|
|
Amount
|
|
Additional
Paid-in
Capital
|
|
Retained Earnings
|
|
Shares
|
|
Cost
|
|
Total
|
|||||||||||||||||||
Balance, December 31, 2010
|
35,000
|
|
|
$
|
42,055
|
|
|
18,183,083
|
|
|
$
|
243
|
|
|
$
|
192,214
|
|
|
$
|
124,250
|
|
|
$
|
(282
|
)
|
|
6,199,908
|
|
|
$
|
(274,901
|
)
|
|
$
|
83,579
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
75,192
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
75,192
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|||||||
Purchase of DineEquity common stock
|
—
|
|
|
—
|
|
|
(534,101
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
534,101
|
|
|
(21,170
|
)
|
|
(21,170
|
)
|
|||||||
Reissuance of treasury stock
|
—
|
|
|
—
|
|
|
135,230
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(135,230
|
)
|
|
4,298
|
|
|
4,298
|
|
|||||||
Net issuance of shares pursuant to stock plans
|
—
|
|
|
—
|
|
|
366,055
|
|
|
4
|
|
|
2,423
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,427
|
|
|||||||
Repurchase of restricted shares
|
—
|
|
|
—
|
|
|
(91,798
|
)
|
|
—
|
|
|
(5,080
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,080
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,492
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,492
|
|
|||||||
Tax benefit from stock options exercised
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,494
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,494
|
|
|||||||
Conversion of Series B preferred stock
|
(100
|
)
|
|
(120
|
)
|
|
1,737
|
|
|
—
|
|
|
120
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Accretion of Series B preferred stock
|
—
|
|
|
2,573
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,573
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Balance, December 31, 2011
|
34,900
|
|
|
44,508
|
|
|
18,060,206
|
|
|
247
|
|
|
205,663
|
|
|
196,869
|
|
|
(294
|
)
|
|
6,598,779
|
|
|
(291,773
|
)
|
|
155,220
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
127,674
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
127,674
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
142
|
|
|
—
|
|
|
—
|
|
|
142
|
|
|||||||
Reissuance of treasury stock
|
—
|
|
|
—
|
|
|
433,732
|
|
|
—
|
|
|
(6,636
|
)
|
|
—
|
|
|
—
|
|
|
(433,732
|
)
|
|
14,089
|
|
|
7,453
|
|
|||||||
Net issuance of shares pursuant to stock plans
|
—
|
|
|
—
|
|
|
59,622
|
|
|
—
|
|
|
1,800
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,800
|
|
|||||||
Repurchase of restricted shares
|
—
|
|
|
—
|
|
|
(34,829
|
)
|
|
—
|
|
|
(1,740
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,740
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,442
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,442
|
|
|||||||
Tax benefit from stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,814
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,814
|
|
|||||||
Conversion of Series B preferred stock
|
(34,900
|
)
|
|
(47,006
|
)
|
|
679,168
|
|
|
7
|
|
|
46,999
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Accretion of Series B preferred stock
|
—
|
|
|
2,498
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,498
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Balance, December 31, 2012
|
—
|
|
|
—
|
|
|
19,197,899
|
|
|
254
|
|
|
264,342
|
|
|
322,045
|
|
|
(152
|
)
|
|
6,165,047
|
|
|
(277,684
|
)
|
|
308,805
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
72,037
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
72,037
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|||||||
Purchase of DineEquity common stock
|
—
|
|
|
—
|
|
|
(412,022
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
412,022
|
|
|
(29,698
|
)
|
|
(29,698
|
)
|
|||||||
Reissuance of treasury stock
|
—
|
|
|
—
|
|
|
318,644
|
|
|
—
|
|
|
(2,612
|
)
|
|
—
|
|
|
—
|
|
|
(318,644
|
)
|
|
11,692
|
|
|
9,080
|
|
|||||||
Net issuance of shares pursuant to stock plans
|
—
|
|
|
—
|
|
|
(17,659
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||||
Repurchase of restricted shares
|
—
|
|
|
—
|
|
|
(45,972
|
)
|
|
—
|
|
|
(3,324
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,324
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,364
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,364
|
|
|||||||
Tax benefit from stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,690
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,690
|
|
|||||||
Dividends on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
139
|
|
|
(57,504
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(57,365
|
)
|
|||||||
Conversion of liability award to equity award
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,603
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,603
|
|
|||||||
Balance, December 31, 2013
|
—
|
|
|
$
|
—
|
|
|
19,040,890
|
|
|
$
|
253
|
|
|
$
|
274,202
|
|
|
$
|
336,578
|
|
|
$
|
(164
|
)
|
|
6,258,425
|
|
|
$
|
(295,690
|
)
|
|
$
|
315,179
|
|
DineEquity, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)
|
|||||||||||
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
72,037
|
|
|
$
|
127,674
|
|
|
$
|
75,192
|
|
Adjustments to reconcile net income to cash flows provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
35,355
|
|
|
39,538
|
|
|
50,220
|
|
|||
Non-cash interest expense
|
6,246
|
|
|
5,985
|
|
|
6,160
|
|
|||
Loss on extinguishment of debt
|
58
|
|
|
5,554
|
|
|
11,159
|
|
|||
Closure and impairment charges
|
2,195
|
|
|
3,931
|
|
|
8,448
|
|
|||
Deferred income taxes
|
(22,674
|
)
|
|
(22,832
|
)
|
|
11,835
|
|
|||
Non-cash stock-based compensation expense
|
9,364
|
|
|
11,442
|
|
|
9,492
|
|
|||
Tax benefit from stock-based compensation
|
3,690
|
|
|
6,814
|
|
|
6,494
|
|
|||
Excess tax benefit from stock options exercised
|
(2,858
|
)
|
|
(5,669
|
)
|
|
(5,443
|
)
|
|||
Gain on disposition of assets
|
(223
|
)
|
|
(102,597
|
)
|
|
(43,253
|
)
|
|||
Other
|
(492
|
)
|
|
(8,991
|
)
|
|
(1,765
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Receivables
|
(15,226
|
)
|
|
(11,629
|
)
|
|
(16,722
|
)
|
|||
Current income tax receivables and payables
|
6,143
|
|
|
1,272
|
|
|
20,479
|
|
|||
Other current assets
|
9,334
|
|
|
(9,119
|
)
|
|
(5,354
|
)
|
|||
Accounts payable
|
8,532
|
|
|
1,778
|
|
|
(3,533
|
)
|
|||
Accrued employee compensation and benefits
|
2,521
|
|
|
(3,756
|
)
|
|
(6,656
|
)
|
|||
Gift card liability
|
10,266
|
|
|
14,735
|
|
|
21,983
|
|
|||
Other accrued expenses
|
3,547
|
|
|
(1,251
|
)
|
|
(17,050
|
)
|
|||
Cash flows provided by operating activities
|
127,815
|
|
|
52,879
|
|
|
121,686
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Additions to property and equipment
|
(7,037
|
)
|
|
(16,952
|
)
|
|
(26,332
|
)
|
|||
Proceeds from sale of property and equipment and assets held for sale
|
—
|
|
|
168,881
|
|
|
115,642
|
|
|||
Principal receipts from notes, equipment contracts and other long-term receivables
|
13,982
|
|
|
12,250
|
|
|
13,122
|
|
|||
Other
|
58
|
|
|
1,238
|
|
|
(753
|
)
|
|||
Cash flows provided by investing activities
|
7,003
|
|
|
165,417
|
|
|
101,679
|
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Borrowings under revolving credit facilities
|
—
|
|
|
50,000
|
|
|
40,000
|
|
|||
Repayments under revolving credit facilities
|
—
|
|
|
(50,000
|
)
|
|
(40,000
|
)
|
|||
Repayment of long-term debt (including premiums)
|
(4,800
|
)
|
|
(216,037
|
)
|
|
(225,681
|
)
|
|||
Principal payments on capital lease and financing obligations
|
(9,968
|
)
|
|
(10,849
|
)
|
|
(13,391
|
)
|
|||
Payment of debt modification/issuance costs
|
(1,296
|
)
|
|
—
|
|
|
(12,295
|
)
|
|||
Dividends paid on common stock
|
(57,445
|
)
|
|
—
|
|
|
—
|
|
|||
Repurchase of DineEquity common stock
|
(29,698
|
)
|
|
—
|
|
|
(21,170
|
)
|
|||
Repurchase of restricted stock
|
(3,324
|
)
|
|
(1,740
|
)
|
|
(5,080
|
)
|
|||
Proceeds from stock options exercised
|
9,080
|
|
|
9,254
|
|
|
6,725
|
|
|||
Excess tax benefit from stock options exercised
|
2,858
|
|
|
5,669
|
|
|
5,443
|
|
|||
Change in restricted cash
|
1,249
|
|
|
(747
|
)
|
|
466
|
|
|||
Cash flows used in financing activities
|
(93,344
|
)
|
|
(214,450
|
)
|
|
(264,983
|
)
|
|||
Net change in cash and cash equivalents
|
41,474
|
|
|
3,846
|
|
|
(41,618
|
)
|
|||
Cash and cash equivalents at beginning of year
|
64,537
|
|
|
60,691
|
|
|
102,309
|
|
|||
Cash and cash equivalents at end of year
|
$
|
106,011
|
|
|
$
|
64,537
|
|
|
$
|
60,691
|
|
Supplemental disclosures
|
|
|
|
|
|
||||||
Interest paid
|
$
|
106,784
|
|
|
$
|
123,926
|
|
|
$
|
148,982
|
|
Income taxes paid
|
$
|
50,702
|
|
|
$
|
91,354
|
|
|
$
|
24,139
|
|
Category
|
|
Depreciable Life
|
Buildings and improvements
|
|
25 - 40 years
|
Leaseholds and improvements
|
|
Shorter of primary lease term or between three to 40 years
|
Equipment and fixtures
|
|
Two to 10 years
|
Properties under capital leases
|
|
Primary lease term or remaining primary lease term
|
•
|
Level 1 inputs are quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 inputs are observable for the asset or liability, either directly or indirectly, including quoted prices in active markets for similar assets or liabilities.
|
•
|
Level 3 inputs are unobservable and reflect the Company's own assumptions.
|
|
December 31, 2013
|
|
December 31, 2012
|
||||||||||||
|
Carrying
Amount
|
|
Fair Value
|
|
Carrying
Amount
|
|
Fair Value
|
||||||||
|
(In millions)
|
||||||||||||||
Long-term debt, less current maturities
|
$
|
1,203.5
|
|
|
$
|
1,306.2
|
|
|
$
|
1,202.1
|
|
|
$
|
1,334.2
|
|
|
2013
|
|
2012
|
||||
|
(In millions)
|
||||||
Accounts receivable
|
$
|
59.3
|
|
|
$
|
67.4
|
|
Gift card receivables
|
68.3
|
|
|
44.6
|
|
||
Notes receivable
|
1.2
|
|
|
2.2
|
|
||
Financing receivables:
|
|
|
|
||||
Equipment leases receivable
|
115.1
|
|
|
122.4
|
|
||
Direct financing leases receivable
|
88.6
|
|
|
95.1
|
|
||
Franchise fee notes receivable
|
1.7
|
|
|
2.7
|
|
||
Other
|
10.6
|
|
|
9.2
|
|
||
|
344.8
|
|
|
343.6
|
|
||
Less: allowance for doubtful accounts
|
(3.5
|
)
|
|
(2.7
|
)
|
||
|
341.3
|
|
|
340.9
|
|
||
Less: current portion
|
(144.1
|
)
|
|
(128.6
|
)
|
||
Long-term receivables
|
$
|
197.2
|
|
|
$
|
212.3
|
|
Allowance for Doubtful Accounts
|
(In millions)
|
||
Balance at December 31, 2010
|
$
|
6.2
|
|
Provision
|
0.4
|
|
|
Charge-offs
|
(3.1
|
)
|
|
Recoveries
|
0.1
|
|
|
Balance at December 31, 2011
|
3.6
|
|
|
Provision
|
0.5
|
|
|
Charge-offs
|
(1.9
|
)
|
|
Recoveries
|
0.5
|
|
|
Balance at December 31, 2012
|
2.7
|
|
|
Provision
|
1.5
|
|
|
Charge-offs
|
(0.7
|
)
|
|
Balance at December 31, 2013
|
$
|
3.5
|
|
|
2013
|
|
2012
|
||||
|
(In millions)
|
||||||
Land
|
$
|
63.9
|
|
|
$
|
65.4
|
|
Buildings and improvements
|
60.1
|
|
|
60.1
|
|
||
Leaseholds and improvements
|
274.9
|
|
|
279.8
|
|
||
Equipment and fixtures
|
81.8
|
|
|
74.9
|
|
||
Construction in progress
|
3.6
|
|
|
4.7
|
|
||
Properties under capital lease
|
60.0
|
|
|
60.8
|
|
||
Property and equipment, gross
|
544.3
|
|
|
545.7
|
|
||
Less: accumulated depreciation and amortization
|
(270.0
|
)
|
|
(251.3
|
)
|
||
Property and equipment, net
|
$
|
274.3
|
|
|
$
|
294.4
|
|
|
Not Subject to Amortization
|
|
Subject to Amortization
|
|
|
||||||||||||||||||||||
|
Tradename
|
|
Liquor
Licenses
|
|
Other
|
|
Franchising
Rights
|
|
Recipes and
Menus
|
|
Leaseholds
|
|
Total
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
Balance, December 31, 2010
|
$
|
652.4
|
|
|
$
|
2.6
|
|
|
$
|
0.3
|
|
|
$
|
169.3
|
|
|
$
|
8.9
|
|
|
$
|
2.4
|
|
|
$
|
835.9
|
|
Amortization expense
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.0
|
)
|
|
(2.3
|
)
|
|
(0.6
|
)
|
|
(12.9
|
)
|
|||||||
Impairment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Refranchising
|
—
|
|
|
(1.1
|
)
|
|
—
|
|
|
|
|
|
—
|
|
|
0.3
|
|
|
(0.8
|
)
|
|||||||
Other
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
|
|
|
0.2
|
|
|||||||
Balance, December 31, 2011
|
652.4
|
|
|
1.5
|
|
|
0.5
|
|
|
159.3
|
|
|
6.6
|
|
|
2.1
|
|
|
822.4
|
|
|||||||
Amortization expense
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.0
|
)
|
|
(2.3
|
)
|
|
(0.2
|
)
|
|
(12.5
|
)
|
|||||||
Refranchising
|
—
|
|
|
(1.5
|
)
|
|
(0.1
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(1.9
|
)
|
|
(3.8
|
)
|
|||||||
Other
|
—
|
|
|
—
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Balance, December 31, 2012
|
652.4
|
|
|
—
|
|
|
0.4
|
|
|
149.0
|
|
|
4.3
|
|
|
—
|
|
|
806.1
|
|
|||||||
Amortization expense
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.0
|
)
|
|
(2.3
|
)
|
|
—
|
|
|
(12.3
|
)
|
|||||||
Other
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|||||||
Balance, December 31, 2013
|
$
|
652.4
|
|
|
$
|
—
|
|
|
$
|
0.7
|
|
|
$
|
139.0
|
|
|
$
|
2.0
|
|
|
$
|
—
|
|
|
$
|
794.1
|
|
|
December 31, 2013
|
|
December 31, 2012
|
||||||||||||||||||||
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Franchising rights
|
$
|
200.0
|
|
|
$
|
(61.0
|
)
|
|
$
|
139.0
|
|
|
$
|
200.0
|
|
|
$
|
(51.0
|
)
|
|
$
|
149.0
|
|
Recipes and menus
|
15.7
|
|
|
(13.7
|
)
|
|
2.0
|
|
|
15.7
|
|
|
(11.4
|
)
|
|
4.3
|
|
||||||
Leaseholds/other
|
0.3
|
|
|
(0.3
|
)
|
|
—
|
|
|
0.3
|
|
|
(0.3
|
)
|
|
—
|
|
||||||
Total
|
$
|
216.0
|
|
|
$
|
(75.0
|
)
|
|
$
|
141.0
|
|
|
$
|
216.0
|
|
|
$
|
(62.7
|
)
|
|
$
|
153.3
|
|
|
2013
|
|
2012
|
||||
|
(In millions)
|
||||||
Senior Secured Credit Facility, due October 2017, at a variable interest rate of 3.75% and 4.25% as of December 31, 2013 and 2012, respectively
|
$
|
467.2
|
|
|
$
|
472.0
|
|
Senior Notes due October 2018, at a fixed rate of 9.5%
|
760.8
|
|
|
760.8
|
|
||
Discount
|
(19.8
|
)
|
|
(23.3
|
)
|
||
Total debt
|
1,208.2
|
|
|
1,209.5
|
|
||
Less: current maturities
|
(4.7
|
)
|
|
(7.4
|
)
|
||
Long-term debt
|
$
|
1,203.5
|
|
|
$
|
1,202.1
|
|
•
|
Mandatory prepayments equal to
0.25%
of the aggregate principal amount of the New Term Loan must be made on a quarterly basis (
1.0%
for a fiscal year); and
|
•
|
50%
of excess cash flow (as defined in the Credit Agreement or amendments thereto) if the consolidated leverage ratio is
5.75
:1 or greater;
25%
if the consolidated leverage ratio is less than
5.75
:1 and greater than or equal to
5.25
:1; and
0%
if the consolidated leverage ratio is less than
5.25
:1.
|
Fiscal Years
|
(In millions)
|
||
2014
|
$
|
5.7
|
|
2015
(1)
|
6.2
|
|
|
2016
|
5.7
|
|
|
2017
|
5.2
|
|
|
2018
|
6.0
|
|
|
Thereafter
|
92.4
|
|
|
Total minimum lease payments
|
121.2
|
|
|
Less: interest
|
(72.3
|
)
|
|
Total financing obligations
|
48.9
|
|
|
Less: current portion
(2)
|
(0.1
|
)
|
|
Long-term financing obligations
|
$
|
48.8
|
|
(1)
|
Due to the varying closing date of the Company's fiscal year,
13
monthly payments will be made in fiscal 2015.
|
(2)
|
Included in current maturities of capital lease and financing obligations on the consolidated balance sheet.
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(In millions)
|
||||||
Total minimum rents receivable
|
$
|
144.8
|
|
|
$
|
163.4
|
|
Less: unearned income
|
(56.2
|
)
|
|
(68.3
|
)
|
||
Net investment in direct financing lease receivables
|
88.6
|
|
|
95.1
|
|
||
Less: current portion
|
(7.0
|
)
|
|
(6.2
|
)
|
||
Long-term direct financing lease receivables
|
$
|
81.6
|
|
|
$
|
88.9
|
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(In millions)
|
||||||
Total minimum leases receivable
|
$
|
184.2
|
|
|
$
|
209.3
|
|
Less: unearned income
|
(69.1
|
)
|
|
(86.9
|
)
|
||
Net investment in equipment leases receivables
|
115.1
|
|
|
122.4
|
|
||
Less: current portion
|
(7.1
|
)
|
|
(6.8
|
)
|
||
Long-term equipment leases receivable
|
$
|
108.0
|
|
|
$
|
115.6
|
|
|
Capital
Leases
|
|
Operating
Leases
|
||||
|
(In millions)
|
||||||
2014
|
$
|
24.3
|
|
|
$
|
76.7
|
|
2015
(1)
|
26.1
|
|
|
82.3
|
|
||
2016
|
23.9
|
|
|
74.4
|
|
||
2017
|
21.2
|
|
|
67.0
|
|
||
2018
|
20.4
|
|
|
71.1
|
|
||
Thereafter
|
76.3
|
|
|
392.2
|
|
||
Total minimum lease payments
|
192.2
|
|
|
$
|
763.7
|
|
|
Less: interest
|
(68.4
|
)
|
|
|
|
||
Capital lease obligations
|
123.8
|
|
|
|
|
||
Less: current portion
(1)
|
(12.1
|
)
|
|
|
|
||
Long-term capital lease obligations
|
$
|
111.7
|
|
|
|
|
|
Direct
Financing
Leases
|
|
Operating
Leases
|
||||
|
(In millions)
|
||||||
2014
|
$
|
18.1
|
|
|
$
|
98.9
|
|
2015
(1)
|
18.3
|
|
|
101.1
|
|
||
2016
|
17.8
|
|
|
99.0
|
|
||
2017
|
17.9
|
|
|
99.0
|
|
||
2018
|
17.5
|
|
|
98.3
|
|
||
Thereafter
|
55.2
|
|
|
652.2
|
|
||
Total minimum rents receivable
|
$
|
144.8
|
|
|
$
|
1,148.5
|
|
Year ended December 31, 2013
|
Declaration date
|
|
Payment date
|
|
Dividend per share
|
|
Total
(1)
|
||||
|
|
|
|
|
|
|
(In millions)
|
||||
First quarter
|
February 26, 2013
|
|
March 29, 2013
|
|
$
|
0.75
|
|
|
$
|
14.6
|
|
Second quarter
|
May 14, 2013
|
|
June 28, 2013
|
|
0.75
|
|
|
14.4
|
|
||
Third quarter
|
August 2, 2013
|
|
September 27, 2013
|
|
0.75
|
|
|
14.3
|
|
||
Fourth quarter
|
October 3, 2013
|
|
December 27, 2013
|
|
0.75
|
|
|
14.3
|
|
||
Total
|
|
|
|
|
$
|
3.00
|
|
|
$
|
57.6
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In millions)
|
||||||||||
Closure charges
|
$
|
1.0
|
|
|
$
|
2.3
|
|
|
$
|
2.0
|
|
Long-lived tangible asset impairment
|
0.8
|
|
|
1.9
|
|
|
4.9
|
|
|||
Lenexa lease termination
|
—
|
|
|
—
|
|
|
23.0
|
|
|||
Total closure and impairment charges
|
$
|
1.8
|
|
|
$
|
4.2
|
|
|
$
|
29.9
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In millions)
|
||||||||||
Total stock-based compensation expense:
|
|
|
|
|
|
||||||
Equity classified awards
|
$
|
9.4
|
|
|
$
|
11.4
|
|
|
$
|
9.5
|
|
Liability classified awards
|
0.9
|
|
|
4.8
|
|
|
1.1
|
|
|||
Total pre-tax compensation expense
|
10.3
|
|
|
16.3
|
|
|
10.6
|
|
|||
Tax benefit
|
(3.9
|
)
|
|
(6.2
|
)
|
|
(4.2
|
)
|
|||
Total stock-based compensation expense, net of tax
|
$
|
6.4
|
|
|
$
|
10.1
|
|
|
$
|
6.4
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Risk free interest rate
|
0.8
|
%
|
|
0.9
|
%
|
|
1.8
|
%
|
|||
Weighted average historical volatility
|
83.4
|
%
|
|
84.5
|
%
|
|
79.1
|
%
|
|||
Dividend yield
|
4.15
|
%
|
|
—
|
%
|
|
—
|
%
|
|||
Expected years until exercise
|
4.6
|
|
|
4.7
|
|
|
4.6
|
|
|||
Forfeitures
|
11.0
|
%
|
|
11.0
|
%
|
|
11.0
|
%
|
|||
Weighted average fair value of options granted
|
$
|
36.00
|
|
|
$
|
33.53
|
|
|
$
|
34.31
|
|
|
Number of
Shares Under Option
|
|
Weighted Average
Exercise Price
Per Share
|
|
Weighted Average
Remaining Contractual
Term (in Years)
|
|
Aggregate Intrinsic
Value
|
|||||
Outstanding at December 31, 2010
|
1,523,710
|
|
|
$
|
24.90
|
|
|
|
|
|
|
|
Granted
|
233,449
|
|
|
53.04
|
|
|
|
|
|
|
||
Exercised
|
(393,075
|
)
|
|
17.11
|
|
|
|
|
|
|
||
Forfeited
|
(42,593
|
)
|
|
27.89
|
|
|
|
|
|
|
||
Expired
|
(2,851
|
)
|
|
47.08
|
|
|
|
|
|
|
||
Outstanding at December 31, 2011
|
1,318,640
|
|
|
32.06
|
|
|
|
|
|
|
||
Granted
|
147,674
|
|
|
51.63
|
|
|
|
|
|
|
||
Exercised
|
(455,217
|
)
|
|
20.91
|
|
|
|
|
|
|
||
Forfeited
|
(39,381
|
)
|
|
46.97
|
|
|
|
|
|
|
||
Expired
|
(13,470
|
)
|
|
38.64
|
|
|
|
|
|
|
||
Outstanding at December 31, 2012
|
958,246
|
|
|
39.67
|
|
|
|
|
|
|
||
Granted
|
81,328
|
|
|
72.28
|
|
|
|
|
|
|
||
Exercised
|
(225,272
|
)
|
|
40.31
|
|
|
|
|
|
|
||
Forfeited
|
(39,243
|
)
|
|
55.78
|
|
|
|
|
|
|
||
Outstanding at December 31, 2013
|
775,059
|
|
|
$
|
42.09
|
|
|
6.28
|
|
$
|
32,100,000
|
|
Vested and Expected to Vest at December 31, 2013
|
758,338
|
|
|
$
|
41.64
|
|
|
6.23
|
|
$
|
31,800,000
|
|
Exercisable at December 31, 2013
|
567,630
|
|
|
$
|
35.91
|
|
|
5.55
|
|
$
|
27,000,000
|
|
|
Shares of Restricted Stock
|
|
Weighted
Average
Grant-Date Per
Share
Fair Value
|
|
Restricted
Stock Units
|
|
Weighted
Average
Grant-Date
Per Share
Fair Value
|
||||||
Outstanding at December 31, 2010
|
666,244
|
|
|
$
|
28.62
|
|
|
18,000
|
|
|
$
|
29.32
|
|
Granted
|
164,632
|
|
|
53.03
|
|
|
—
|
|
|
—
|
|
||
Released
|
(287,735
|
)
|
|
37.82
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
(56,608
|
)
|
|
31.56
|
|
|
—
|
|
|
—
|
|
||
Outstanding at December 31, 2011
|
486,533
|
|
|
31.08
|
|
|
18,000
|
|
|
29.32
|
|
||
Granted
|
137,852
|
|
|
52.23
|
|
|
19,152
|
|
|
52.23
|
|
||
Released
|
(179,465
|
)
|
|
13.83
|
|
|
(3,910
|
)
|
|
40.58
|
|
||
Forfeited
|
(98,357
|
)
|
|
44.40
|
|
|
—
|
|
|
—
|
|
||
Outstanding at December 31, 2012
|
346,563
|
|
|
44.74
|
|
|
33,242
|
|
|
41.19
|
|
||
Granted
|
97,812
|
|
|
73.11
|
|
|
15,804
|
|
|
72.04
|
|
||
Conversion of cash-settled restricted stock units
|
—
|
|
|
—
|
|
|
37,184
|
|
|
72.28
|
|
||
Released
|
(117,075
|
)
|
|
30.96
|
|
|
(39,000
|
)
|
|
54.66
|
|
||
Forfeited
|
(61,048
|
)
|
|
55.37
|
|
|
—
|
|
|
—
|
|
||
Outstanding at December 31, 2013
|
266,252
|
|
|
$
|
58.87
|
|
|
47,230
|
|
|
$
|
64.57
|
|
|
Cash-Settled Restricted Stock Units
|
|
Weighted
Average
Per Share
Fair Value
|
|||
Outstanding at December 31, 2010
|
26,000
|
|
|
$
|
64.23
|
|
Granted
|
15,957
|
|
|
64.30
|
|
|
Released
|
—
|
|
|
—
|
|
|
Outstanding at December 31, 2011
|
41,957
|
|
|
64.26
|
|
|
Granted
|
—
|
|
|
—
|
|
|
Released
|
(4,773
|
)
|
|
49.66
|
|
|
Outstanding at December 31, 2012
|
37,184
|
|
|
66.13
|
|
|
Conversion to stock-settled restricted stock units
|
(37,184
|
)
|
|
72.28
|
|
|
Outstanding at December 31, 2013
|
—
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In millions)
|
||||||||||
Provision (benefit) for income taxes:
|
|
|
|
|
|
||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
48.5
|
|
|
$
|
77.4
|
|
|
$
|
13.2
|
|
State
|
2.1
|
|
|
1.9
|
|
|
1.0
|
|
|||
Foreign
|
2.4
|
|
|
1.8
|
|
|
1.8
|
|
|||
|
53.0
|
|
|
81.1
|
|
|
16.0
|
|
|||
Deferred
|
|
|
|
|
|
||||||
Federal
|
(13.5
|
)
|
|
(12.2
|
)
|
|
11.4
|
|
|||
State
|
(0.9
|
)
|
|
(1.7
|
)
|
|
2.4
|
|
|||
|
(14.4
|
)
|
|
(13.9
|
)
|
|
13.8
|
|
|||
Provision for income taxes
|
$
|
38.6
|
|
|
$
|
67.2
|
|
|
$
|
29.8
|
|
|
Year Ended December 31,
|
|||||||
|
2013
|
|
2012
|
|
2011
|
|||
Statutory federal income tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State and other taxes, net of federal tax benefit
|
2.9
|
|
|
2.8
|
|
|
3.7
|
|
Change in unrecognized tax benefits
|
1.4
|
|
|
(0.2
|
)
|
|
(4.0
|
)
|
Change in valuation allowance
|
(2.7
|
)
|
|
0.7
|
|
|
1.7
|
|
State adjustments including audits and settlements
|
(1.1
|
)
|
|
0.2
|
|
|
0.2
|
|
Compensation related tax credits, net of deduction offsets
|
(0.6
|
)
|
|
(0.9
|
)
|
|
(4.9
|
)
|
Changes in tax rates and state tax laws
|
—
|
|
|
(3.2
|
)
|
|
(3.9
|
)
|
Kansas High Performance Incentive Program credits
|
—
|
|
|
—
|
|
|
0.5
|
|
Other
|
—
|
|
|
0.1
|
|
|
0.1
|
|
Effective tax rate
|
34.9
|
%
|
|
34.5
|
%
|
|
28.4
|
%
|
|
2013
|
|
2012
|
||||
|
(In millions)
|
||||||
Differences in capitalization and depreciation and amortization of reacquired franchises and equipment
|
$
|
4.8
|
|
|
$
|
4.9
|
|
Differences in acquisition financing costs
|
1.8
|
|
|
1.8
|
|
||
Employee compensation
|
15.0
|
|
|
15.2
|
|
||
Deferred gain on sale of assets
|
6.3
|
|
|
5.9
|
|
||
Book/tax difference in revenue recognition
|
29.8
|
|
|
22.2
|
|
||
Other
|
35.0
|
|
|
35.4
|
|
||
Deferred tax assets
|
92.7
|
|
|
85.4
|
|
||
Valuation allowance
|
(1.1
|
)
|
|
(4.1
|
)
|
||
Total deferred tax assets after valuation allowance
|
91.6
|
|
|
81.3
|
|
||
Differences between financial and tax accounting in the recognition of franchise and equipment sales
|
(51.2
|
)
|
|
(55.1
|
)
|
||
Differences in capitalization and depreciation
(1)
|
(301.1
|
)
|
|
(310.2
|
)
|
||
Differences in acquisition financing costs
|
(7.1
|
)
|
|
(7.7
|
)
|
||
Book/tax difference in revenue recognition
|
(19.5
|
)
|
|
(19.5
|
)
|
||
Differences between book and tax basis of property and equipment
|
(10.1
|
)
|
|
(9.8
|
)
|
||
Other
|
(20.3
|
)
|
|
(19.4
|
)
|
||
Deferred tax liabilities
|
(409.3
|
)
|
|
(421.7
|
)
|
||
Net deferred tax liabilities
|
$
|
(317.7
|
)
|
|
$
|
(340.4
|
)
|
Net deferred tax asset—current
|
$
|
24.2
|
|
|
$
|
22.3
|
|
Valuation allowance—current
|
(0.3
|
)
|
|
(0.5
|
)
|
||
Net deferred tax asset—current
|
23.9
|
|
|
21.8
|
|
||
Deferred tax liability—non-current
|
(340.8
|
)
|
|
(358.6
|
)
|
||
Valuation allowance—non-current
|
(0.8
|
)
|
|
(3.6
|
)
|
||
Net deferred tax liability—non-current
|
(341.6
|
)
|
|
(362.2
|
)
|
||
Net deferred tax liabilities
|
$
|
(317.7
|
)
|
|
$
|
(340.4
|
)
|
(1)
|
Primarily related to the Applebee's acquisition.
|
|
(In millions)
|
||
Unrecognized tax benefit as of December 31, 2011
|
$
|
8.2
|
|
Change as a result of prior year tax positions
|
0.8
|
|
|
Change as a result of current year tax positions
|
0.2
|
|
|
Decreases relating to settlements with taxing authorities
|
(0.9
|
)
|
|
Decreases as a result of a lapse of the statute of limitations
|
(1.6
|
)
|
|
Unrecognized tax benefit as of December 31, 2012
|
6.7
|
|
|
Change as a result of prior year tax positions
|
0.8
|
|
|
Decreases relating to settlements with taxing authorities
|
(4.7
|
)
|
|
Decreases as a result of a lapse of the statute of limitations
|
(0.1
|
)
|
|
Unrecognized tax benefit as of December 31, 2013
|
$
|
2.7
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands, except per share data)
|
||||||||||
Numerator for basic and diluted income per common share:
|
|
|
|
|
|
||||||
Net income
|
$
|
72,037
|
|
|
$
|
127,674
|
|
|
$
|
75,192
|
|
Less: Series A preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|||
Less: Accretion of Series B preferred stock
|
—
|
|
|
(2,498
|
)
|
|
(2,573
|
)
|
|||
Less: Net (income) loss allocated to unvested participating restricted stock
|
(1,200
|
)
|
|
(2,718
|
)
|
|
(1,886
|
)
|
|||
Net income available to common stockholders - basic
|
70,837
|
|
|
122,458
|
|
|
70,733
|
|
|||
Effect of unvested participating restricted stock
|
4
|
|
|
127
|
|
|
34
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Convertible Series B preferred stock
|
—
|
|
|
2,498
|
|
|
—
|
|
|||
Numerator - net income available to common shareholders - diluted
|
$
|
70,841
|
|
|
$
|
125,083
|
|
|
$
|
70,767
|
|
Denominator:
|
|
|
|
|
|
||||||
Weighted average outstanding shares of common stock - basic
|
18,871
|
|
|
17,992
|
|
|
17,846
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Stock options
|
270
|
|
|
264
|
|
|
339
|
|
|||
Convertible Series B preferred stock
|
—
|
|
|
621
|
|
|
—
|
|
|||
Weighted average outstanding shares of common stock - diluted
|
19,141
|
|
|
18,877
|
|
|
18,185
|
|
|||
Net income (loss) per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
3.75
|
|
|
$
|
6.81
|
|
|
$
|
3.96
|
|
Diluted
|
$
|
3.70
|
|
|
$
|
6.63
|
|
|
$
|
3.89
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Revenues
|
|
|
(In millions)
|
|
|
||||||
Franchise operations
|
$
|
439.2
|
|
|
$
|
421.4
|
|
|
$
|
398.5
|
|
Company restaurants
|
63.4
|
|
|
291.1
|
|
|
531.0
|
|
|||
Rental operations
|
124.8
|
|
|
122.9
|
|
|
126.0
|
|
|||
Financing operations
|
13.1
|
|
|
14.5
|
|
|
19.7
|
|
|||
Total
|
$
|
640.5
|
|
|
$
|
849.9
|
|
|
$
|
1,075.2
|
|
Income (loss) before income taxes
|
|
|
|
|
|
||||||
Franchise operations
|
$
|
329.5
|
|
|
$
|
311.5
|
|
|
$
|
293.5
|
|
Company restaurants
|
(0.2
|
)
|
|
41.8
|
|
|
72.6
|
|
|||
Rental operations
|
27.5
|
|
|
25.7
|
|
|
27.8
|
|
|||
Financing operations
|
12.9
|
|
|
12.9
|
|
|
13.7
|
|
|||
Corporate
|
(259.1
|
)
|
|
(197.0
|
)
|
|
(302.6
|
)
|
|||
Income (loss) before income taxes
|
$
|
110.6
|
|
|
$
|
194.9
|
|
|
$
|
105.0
|
|
Interest expense
|
|
|
|
|
|
||||||
Company restaurants
|
$
|
0.4
|
|
|
$
|
0.4
|
|
|
$
|
0.5
|
|
Rental operations
|
15.7
|
|
|
17.0
|
|
|
18.0
|
|
|||
Corporate
|
100.3
|
|
|
114.3
|
|
|
132.7
|
|
|||
Total
|
$
|
116.4
|
|
|
$
|
131.7
|
|
|
$
|
151.2
|
|
Depreciation and amortization
|
|
|
|
|
|
||||||
Franchise operations
|
$
|
10.8
|
|
|
$
|
9.8
|
|
|
$
|
9.9
|
|
Company restaurants
|
2.2
|
|
|
6.9
|
|
|
16.6
|
|
|||
Rental operations
|
13.4
|
|
|
13.6
|
|
|
14.0
|
|
|||
Corporate
|
9.0
|
|
|
9.2
|
|
|
9.7
|
|
|||
Total
|
$
|
35.4
|
|
|
$
|
39.5
|
|
|
$
|
50.2
|
|
Closure and impairment charges
|
|
|
|
|
|
||||||
Company restaurants
|
$
|
1.8
|
|
|
$
|
4.2
|
|
|
$
|
2.4
|
|
Corporate
|
—
|
|
|
—
|
|
|
27.5
|
|
|||
Total
|
$
|
1.8
|
|
|
$
|
4.2
|
|
|
$
|
29.9
|
|
Capital expenditures
|
|
|
|
|
|
||||||
Company restaurants
|
$
|
1.3
|
|
|
$
|
9.5
|
|
|
$
|
15.5
|
|
Corporate
|
5.7
|
|
|
7.5
|
|
|
10.8
|
|
|||
Total
|
$
|
7.0
|
|
|
$
|
17.0
|
|
|
$
|
26.3
|
|
Goodwill
(all franchise segment)
|
$
|
697.5
|
|
|
$
|
697.5
|
|
|
$
|
697.5
|
|
Total assets
|
|
|
|
|
|
||||||
Franchise operations
|
$
|
1,606.4
|
|
|
$
|
1,523.0
|
|
|
$
|
1,472.3
|
|
Company restaurants
|
191.6
|
|
|
186.2
|
|
|
423.1
|
|
|||
Rental operations
|
364.0
|
|
|
397.3
|
|
|
407.9
|
|
|||
Financing operations
|
117.1
|
|
|
125.4
|
|
|
136.4
|
|
|||
Corporate
|
125.5
|
|
|
183.5
|
|
|
174.6
|
|
|||
Total
|
$
|
2,404.6
|
|
|
$
|
2,415.4
|
|
|
$
|
2,614.3
|
|
|
Parent
|
|
Combined
Guarantor
Subsidiaries
|
|
Combined
Non-guarantor
Subsidiaries
|
|
Eliminations
and
Reclassification
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
50.3
|
|
|
$
|
54.7
|
|
|
$
|
1.0
|
|
|
$
|
—
|
|
|
$
|
106.0
|
|
Receivables, net
|
2.0
|
|
|
150.0
|
|
|
0.1
|
|
|
(8.0
|
)
|
|
144.1
|
|
|||||
Prepaid expenses and other current assets
|
189.2
|
|
|
56.1
|
|
|
—
|
|
|
(187.7
|
)
|
|
57.6
|
|
|||||
Deferred income taxes
|
(4.1
|
)
|
|
28.0
|
|
|
—
|
|
|
—
|
|
|
23.9
|
|
|||||
Intercompany
|
(435.2
|
)
|
|
429.4
|
|
|
5.8
|
|
|
|
|
|
—
|
|
|||||
Total current assets
|
(197.8
|
)
|
|
718.1
|
|
|
7.0
|
|
|
(195.7
|
)
|
|
331.6
|
|
|||||
Long-term receivables
|
—
|
|
|
197.2
|
|
|
—
|
|
|
—
|
|
|
197.2
|
|
|||||
Property and equipment, net
|
23.5
|
|
|
249.7
|
|
|
1.0
|
|
|
—
|
|
|
274.3
|
|
|||||
Goodwill
|
—
|
|
|
697.5
|
|
|
—
|
|
|
—
|
|
|
697.5
|
|
|||||
Other intangible assets, net
|
—
|
|
|
794.1
|
|
|
—
|
|
|
—
|
|
|
794.1
|
|
|||||
Other assets, net
|
16.2
|
|
|
93.9
|
|
|
—
|
|
|
—
|
|
|
110.1
|
|
|||||
Investment in subsidiaries
|
1,697.6
|
|
|
—
|
|
|
—
|
|
|
(1,697.6
|
)
|
|
—
|
|
|||||
Total assets
|
$
|
1,539.5
|
|
|
$
|
2,750.4
|
|
|
$
|
8.0
|
|
|
$
|
(1,893.3
|
)
|
|
$
|
2,404.6
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Current maturities of long-term debt
|
$
|
12.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(8.0
|
)
|
|
$
|
4.7
|
|
Accounts payable
|
1.4
|
|
|
38.6
|
|
|
—
|
|
|
|
|
|
40.1
|
|
|||||
Accrued employee compensation and benefits
|
14.5
|
|
|
10.4
|
|
|
—
|
|
|
|
|
|
25.0
|
|
|||||
Gift card liability
|
—
|
|
|
172.0
|
|
|
—
|
|
|
|
|
|
172.0
|
|
|||||
Other accrued expenses
|
(13.7
|
)
|
|
244.1
|
|
|
—
|
|
|
(187.7
|
)
|
|
42.6
|
|
|||||
Total current liabilities
|
15.0
|
|
|
465.0
|
|
|
—
|
|
|
(195.7
|
)
|
|
284.3
|
|
|||||
Long-term debt
|
1,203.5
|
|
|
—
|
|
|
—
|
|
|
|
|
|
1,203.5
|
|
|||||
Financing obligations
|
—
|
|
|
48.8
|
|
|
—
|
|
|
|
|
|
48.8
|
|
|||||
Capital lease obligations
|
—
|
|
|
111.7
|
|
|
—
|
|
|
—
|
|
|
111.7
|
|
|||||
Deferred income taxes
|
(0.3
|
)
|
|
342.1
|
|
|
(0.3
|
)
|
|
|
|
|
341.6
|
|
|||||
Other liabilities
|
5.9
|
|
|
92.7
|
|
|
0.9
|
|
|
|
|
|
99.5
|
|
|||||
Total liabilities
|
1,224.2
|
|
|
1,060.4
|
|
|
0.6
|
|
|
(195.7
|
)
|
|
2,089.5
|
|
|||||
Total stockholders' equity
|
315.3
|
|
|
1,690.0
|
|
|
7.4
|
|
|
(1,697.6
|
)
|
|
315.2
|
|
|||||
Total liabilities and stockholders' equity
|
$
|
1,539.5
|
|
|
$
|
2,750.4
|
|
|
$
|
8.0
|
|
|
$
|
(1,893.3
|
)
|
|
$
|
2,404.6
|
|
|
Parent
|
|
Combined
Guarantor
Subsidiaries
|
|
Combined
Non-guarantor
Subsidiaries
|
|
Eliminations
and
Reclassification
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
9.9
|
|
|
$
|
54.0
|
|
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
64.5
|
|
Receivables, net
|
2.8
|
|
|
133.7
|
|
|
0.1
|
|
|
(8.0
|
)
|
|
128.6
|
|
|||||
Prepaid expenses and other current assets
|
151.3
|
|
|
64.6
|
|
|
—
|
|
|
(136.3
|
)
|
|
79.5
|
|
|||||
Deferred income taxes
|
(3.2
|
)
|
|
24.1
|
|
|
0.8
|
|
|
—
|
|
|
21.8
|
|
|||||
Intercompany
|
(394.9
|
)
|
|
389.0
|
|
|
6.0
|
|
|
—
|
|
|
—
|
|
|||||
Total current assets
|
(234.1
|
)
|
|
665.4
|
|
|
7.5
|
|
|
(144.3
|
)
|
|
294.5
|
|
|||||
Long-term receivables
|
—
|
|
|
212.3
|
|
|
—
|
|
|
—
|
|
|
212.3
|
|
|||||
Property and equipment, net
|
23.2
|
|
|
270.2
|
|
|
0.9
|
|
|
—
|
|
|
294.4
|
|
|||||
Goodwill
|
—
|
|
|
697.5
|
|
|
—
|
|
|
—
|
|
|
697.5
|
|
|||||
Other intangible assets, net
|
—
|
|
|
806.1
|
|
|
—
|
|
|
—
|
|
|
806.1
|
|
|||||
Other assets, net
|
18.4
|
|
|
92.3
|
|
|
—
|
|
|
—
|
|
|
110.7
|
|
|||||
Investment in subsidiaries
|
1,697.6
|
|
|
—
|
|
|
—
|
|
|
(1,697.6
|
)
|
|
—
|
|
|||||
Total assets
|
$
|
1,505.1
|
|
|
$
|
2,743.8
|
|
|
$
|
8.5
|
|
|
$
|
(1,841.9
|
)
|
|
$
|
2,415.4
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Current maturities of long-term debt
|
$
|
15.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(8.0
|
)
|
|
$
|
7.4
|
|
Accounts payable
|
1.4
|
|
|
29.3
|
|
|
0.1
|
|
|
—
|
|
|
30.8
|
|
|||||
Accrued employee compensation and benefits
|
9.4
|
|
|
13.0
|
|
|
—
|
|
|
—
|
|
|
22.4
|
|
|||||
Gift card liability
|
—
|
|
|
161.7
|
|
|
—
|
|
|
—
|
|
|
161.7
|
|
|||||
Other accrued expenses
|
(42.5
|
)
|
|
223.8
|
|
|
0.5
|
|
|
(136.3
|
)
|
|
45.5
|
|
|||||
Total current liabilities
|
(16.3
|
)
|
|
427.8
|
|
|
0.6
|
|
|
(144.3
|
)
|
|
267.8
|
|
|||||
Long-term debt
|
1,202.1
|
|
|
—
|
|
|
—
|
|
|
|
|
1,202.1
|
|
||||||
Financing obligations
|
—
|
|
|
52.0
|
|
|
—
|
|
|
|
|
52.0
|
|
||||||
Capital lease obligations
|
—
|
|
|
124.4
|
|
|
—
|
|
|
—
|
|
|
124.4
|
|
|||||
Deferred income taxes
|
4.7
|
|
|
357.6
|
|
|
(0.2
|
)
|
|
|
|
362.2
|
|
||||||
Other liabilities
|
5.6
|
|
|
91.9
|
|
|
0.7
|
|
|
|
|
98.2
|
|
||||||
Total liabilities
|
1,196.1
|
|
|
1,053.8
|
|
|
1.1
|
|
|
(144.3
|
)
|
|
2,106.6
|
|
|||||
Total stockholders' equity
|
309.0
|
|
|
1,690.0
|
|
|
7.4
|
|
|
(1,697.6
|
)
|
|
308.8
|
|
|||||
Total liabilities and stockholders' equity
|
$
|
1,505.1
|
|
|
$
|
2,743.8
|
|
|
$
|
8.5
|
|
|
$
|
(1,841.9
|
)
|
|
$
|
2,415.4
|
|
|
Parent
|
|
Combined
Guarantor
Subsidiaries
|
|
Combined
Non-guarantor
Subsidiaries
|
|
Eliminations and
Reclassification
|
|
Consolidated
|
||||||||||
Franchise and restaurant revenues
|
$
|
2.8
|
|
|
$
|
498.5
|
|
|
$
|
1.2
|
|
|
$
|
—
|
|
|
$
|
502.6
|
|
Rental revenues
|
—
|
|
|
124.8
|
|
|
—
|
|
|
—
|
|
|
124.8
|
|
|||||
Financing revenues
|
—
|
|
|
13.1
|
|
|
—
|
|
|
—
|
|
|
13.1
|
|
|||||
Total revenue
|
2.8
|
|
|
636.4
|
|
|
1.2
|
|
|
—
|
|
|
640.5
|
|
|||||
Franchise and restaurant expenses
|
2.7
|
|
|
170.5
|
|
|
0.1
|
|
|
—
|
|
|
173.3
|
|
|||||
Rental expenses
|
—
|
|
|
97.3
|
|
|
—
|
|
|
—
|
|
|
97.3
|
|
|||||
Financing expenses
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|||||
General and administrative expenses
|
38.7
|
|
|
103.6
|
|
|
1.3
|
|
|
—
|
|
|
143.6
|
|
|||||
Interest expense
|
98.9
|
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
100.3
|
|
|||||
Closure and impairment charges
|
—
|
|
|
1.5
|
|
|
0.3
|
|
|
—
|
|
|
1.8
|
|
|||||
Amortization of intangible assets
|
—
|
|
|
12.3
|
|
|
—
|
|
|
—
|
|
|
12.3
|
|
|||||
Loss on extinguishment of debt
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|||||
Loss (gain) on disposition of assets
|
—
|
|
|
0.8
|
|
|
(1.0
|
)
|
|
—
|
|
|
(0.2
|
)
|
|||||
Other expense
|
1.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
|||||
Intercompany dividend
|
(173.6
|
)
|
|
—
|
|
|
—
|
|
|
173.6
|
|
|
—
|
|
|||||
Income before income taxes
|
34.7
|
|
|
248.9
|
|
|
0.6
|
|
|
(173.6
|
)
|
|
110.6
|
|
|||||
Benefit (provision) for income taxes
|
37.3
|
|
|
(75.9
|
)
|
|
—
|
|
|
—
|
|
|
(38.6
|
)
|
|||||
Net income
|
$
|
72.0
|
|
|
$
|
173.0
|
|
|
$
|
0.6
|
|
|
$
|
(173.6
|
)
|
|
$
|
72.0
|
|
|
Parent
|
|
Combined
Guarantor
Subsidiaries
|
|
Combined
Non-guarantor
Subsidiaries
|
|
Eliminations and
Reclassification
|
|
Consolidated
|
||||||||||
Franchise and restaurant revenues
|
$
|
2.6
|
|
|
$
|
708.8
|
|
|
$
|
1.1
|
|
|
$
|
—
|
|
|
$
|
712.5
|
|
Rental revenues
|
—
|
|
|
122.9
|
|
|
—
|
|
|
—
|
|
|
122.9
|
|
|||||
Financing revenues
|
—
|
|
|
14.5
|
|
|
—
|
|
|
—
|
|
|
14.5
|
|
|||||
Total revenue
|
2.6
|
|
|
846.2
|
|
|
1.1
|
|
|
—
|
|
|
849.9
|
|
|||||
Franchise and restaurant expenses
|
2.5
|
|
|
356.6
|
|
|
0.1
|
|
|
—
|
|
|
359.2
|
|
|||||
Rental expenses
|
—
|
|
|
97.2
|
|
|
—
|
|
|
—
|
|
|
97.2
|
|
|||||
Financing expenses
|
—
|
|
|
1.6
|
|
|
—
|
|
|
—
|
|
|
1.6
|
|
|||||
General and administrative expenses
|
36.3
|
|
|
124.9
|
|
|
2.0
|
|
|
—
|
|
|
163.2
|
|
|||||
Interest expense
|
106.1
|
|
|
8.2
|
|
|
—
|
|
|
—
|
|
|
114.3
|
|
|||||
Closure and impairment charges
|
—
|
|
|
3.5
|
|
|
0.7
|
|
|
—
|
|
|
4.2
|
|
|||||
Amortization of intangible assets
|
—
|
|
|
12.3
|
|
|
—
|
|
|
—
|
|
|
12.3
|
|
|||||
Loss on extinguishment of debt
|
5.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.6
|
|
|||||
(Loss) gain on disposition of assets
|
1.2
|
|
|
(102.2
|
)
|
|
(1.6
|
)
|
|
—
|
|
|
(102.6
|
)
|
|||||
Intercompany dividend
|
(220.7
|
)
|
|
—
|
|
|
—
|
|
|
220.7
|
|
|
—
|
|
|||||
Income (loss) before income taxes
|
71.6
|
|
|
344.1
|
|
|
(0.1
|
)
|
|
(220.7
|
)
|
|
194.9
|
|
|||||
Benefit (provision) for income taxes
|
56.0
|
|
|
(123.2
|
)
|
|
—
|
|
|
—
|
|
|
(67.2
|
)
|
|||||
Net income (loss)
|
$
|
127.6
|
|
|
$
|
220.9
|
|
|
$
|
(0.1
|
)
|
|
$
|
(220.7
|
)
|
|
$
|
127.7
|
|
|
Parent
|
|
Combined
Guarantor
Subsidiaries
|
|
Combined
Non-guarantor Subsidiaries
|
|
Eliminations and
Reclassification
|
|
Consolidated
|
||||||||||
Franchise and restaurant revenues
|
$
|
2.5
|
|
|
$
|
924.8
|
|
|
$
|
2.3
|
|
|
$
|
—
|
|
|
$
|
929.5
|
|
Rental revenues
|
—
|
|
|
125.8
|
|
|
0.1
|
|
|
—
|
|
|
126.0
|
|
|||||
Financing revenues
|
—
|
|
|
19.7
|
|
|
—
|
|
|
—
|
|
|
19.7
|
|
|||||
Total revenue
|
2.5
|
|
|
1,070.3
|
|
|
2.4
|
|
|
—
|
|
|
1,075.2
|
|
|||||
Franchise and restaurant expenses
|
2.1
|
|
|
560.4
|
|
|
0.9
|
|
|
—
|
|
|
563.4
|
|
|||||
Rental expenses
|
—
|
|
|
98.1
|
|
|
0.1
|
|
|
—
|
|
|
98.2
|
|
|||||
Financing expenses
|
—
|
|
|
6.0
|
|
|
—
|
|
|
—
|
|
|
6.0
|
|
|||||
General and administrative expenses
|
28.3
|
|
|
125.3
|
|
|
2.2
|
|
|
—
|
|
|
155.8
|
|
|||||
Interest expense
|
117.2
|
|
|
15.5
|
|
|
—
|
|
|
—
|
|
|
132.7
|
|
|||||
Closure and impairment charges
|
—
|
|
|
29.5
|
|
|
0.4
|
|
|
—
|
|
|
29.9
|
|
|||||
Amortization of intangible assets
|
—
|
|
|
12.3
|
|
|
—
|
|
|
—
|
|
|
12.3
|
|
|||||
Loss on extinguishment of debt
|
11.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11.2
|
|
|||||
Gain on disposition of assets
|
—
|
|
|
(43.3
|
)
|
|
—
|
|
|
—
|
|
|
(43.3
|
)
|
|||||
Other (income) expense
|
(150.6
|
)
|
|
21.2
|
|
|
(1.7
|
)
|
|
135.1
|
|
|
4.0
|
|
|||||
Income (loss) before taxes
|
(5.7
|
)
|
|
245.3
|
|
|
0.5
|
|
|
(135.1
|
)
|
|
105.0
|
|
|||||
Benefit (provision) for income taxes
|
61.3
|
|
|
(90.9
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
(29.8
|
)
|
|||||
Net income
|
$
|
55.6
|
|
|
$
|
154.4
|
|
|
$
|
0.3
|
|
|
$
|
(135.1
|
)
|
|
$
|
75.2
|
|
|
Parent
|
|
Combined
Guarantor
Subsidiaries
|
|
Combined
Non-
guarantor
Subsidiaries
|
|
Eliminations and
Reclassification
|
|
Consolidated
|
||||||||||
Cash flows provided by (used in) operating activities
|
$
|
(113.1
|
)
|
|
$
|
240.8
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
127.8
|
|
Investing cash flows
|
|
|
|
|
|
|
|
|
|
||||||||||
Additions to property and equipment
|
(5.4
|
)
|
|
(1.7
|
)
|
|
—
|
|
|
—
|
|
|
(7.0
|
)
|
|||||
Principal receipts from long-term receivables
|
—
|
|
|
14.0
|
|
|
—
|
|
|
—
|
|
|
14.0
|
|
|||||
Proceeds from sale of assets
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|||||
Cash flows provided by (used in) investing activities
|
(5.4
|
)
|
|
12.4
|
|
|
—
|
|
|
—
|
|
|
7.0
|
|
|||||
Financing cash flows
|
|
|
|
|
|
|
|
|
|
||||||||||
Payment of debt
|
(4.8
|
)
|
|
(10.0
|
)
|
|
—
|
|
|
—
|
|
|
(14.8
|
)
|
|||||
Payment of debt issuance costs
|
(1.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.3
|
)
|
|||||
Purchase of DineEquity common stock
|
(29.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29.7
|
)
|
|||||
Dividends paid on common stock
|
(57.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(57.4
|
)
|
|||||
Restricted cash
|
—
|
|
|
1.2
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|||||
Other
|
8.3
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
8.6
|
|
|||||
Intercompany transfers
|
243.7
|
|
|
(244.1
|
)
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|||||
Cash flows provided by (used in) financing activities
|
158.8
|
|
|
(252.5
|
)
|
|
0.4
|
|
|
—
|
|
|
(93.3
|
)
|
|||||
Net change
|
40.4
|
|
|
0.7
|
|
|
0.4
|
|
|
—
|
|
|
41.5
|
|
|||||
Beginning cash and equivalents
|
9.9
|
|
|
54.0
|
|
|
0.6
|
|
|
—
|
|
|
64.5
|
|
|||||
Ending cash and equivalents
|
$
|
50.3
|
|
|
$
|
54.7
|
|
|
$
|
1.0
|
|
|
$
|
—
|
|
|
$
|
106.0
|
|
|
Parent
|
|
Combined
Guarantor
Subsidiaries
|
|
Combined
Non-
guarantor
Subsidiaries
|
|
Eliminations and
Reclassification
|
|
Consolidated
|
||||||||||
Cash flows provided by (used in) operating activities
|
$
|
(130.1
|
)
|
|
$
|
182.5
|
|
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
52.9
|
|
Investing cash flows
|
|
|
|
|
|
|
|
|
|
||||||||||
Additions to property and equipment
|
(4.9
|
)
|
|
(12.0
|
)
|
|
—
|
|
|
—
|
|
|
(17.0
|
)
|
|||||
Principal receipts from long-term receivables
|
—
|
|
|
12.2
|
|
|
—
|
|
|
—
|
|
|
12.2
|
|
|||||
Proceeds from sale of assets
|
—
|
|
|
168.9
|
|
|
—
|
|
|
—
|
|
|
168.9
|
|
|||||
Other
|
—
|
|
|
1.2
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|||||
Cash flows provided by (used in) investing activities
|
(4.9
|
)
|
|
170.3
|
|
|
—
|
|
|
—
|
|
|
165.4
|
|
|||||
Financing cash flows
|
|
|
|
|
|
|
|
|
|
||||||||||
Revolving credit borrowings
|
50.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50.0
|
|
|||||
Revolving credit repayments
|
(50.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50.0
|
)
|
|||||
Payment of debt
|
(216.0
|
)
|
|
(10.9
|
)
|
|
—
|
|
|
—
|
|
|
(226.9
|
)
|
|||||
Payment of debt issuance costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchase of DineEquity common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Restricted cash
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|||||
Other
|
11.8
|
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
13.2
|
|
|||||
Intercompany transfers
|
339.2
|
|
|
(339.0
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|||||
Cash flows provided by (used in) financing activities
|
135.0
|
|
|
(349.2
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
(214.5
|
)
|
|||||
Net change
|
—
|
|
|
3.6
|
|
|
0.2
|
|
|
—
|
|
|
3.8
|
|
|||||
Beginning cash and equivalents
|
9.9
|
|
|
50.4
|
|
|
0.4
|
|
|
—
|
|
|
60.7
|
|
|||||
Ending cash and equivalents
|
$
|
9.9
|
|
|
$
|
54.0
|
|
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
64.5
|
|
|
Parent
|
|
Combined
Guarantor
Subsidiaries
|
|
Combined
Non-
guarantor
Subsidiaries
|
|
Eliminations and
Reclassification
|
|
Consolidated
|
||||||||||
Cash flows provided by (used in) operating activities
|
$
|
(139.4
|
)
|
|
$
|
261.4
|
|
|
$
|
(0.3
|
)
|
|
$
|
—
|
|
|
$
|
121.7
|
|
Investing cash flows
|
|
|
|
|
|
|
|
|
|
||||||||||
Additions to property and equipment
|
(6.7
|
)
|
|
(19.6
|
)
|
|
—
|
|
|
—
|
|
|
(26.3
|
)
|
|||||
Principal receipts from long-term receivables
|
—
|
|
|
13.1
|
|
|
—
|
|
|
—
|
|
|
13.1
|
|
|||||
Proceeds from sale of assets
|
—
|
|
|
115.6
|
|
|
—
|
|
|
—
|
|
|
115.6
|
|
|||||
Other
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|||||
Cash flows provided by (used in) investing activities
|
(6.7
|
)
|
|
108.4
|
|
|
—
|
|
|
—
|
|
|
101.7
|
|
|||||
Financing cash flows
|
|
|
|
|
|
|
|
|
|
||||||||||
Revolving credit borrowings
|
40.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40.0
|
|
|||||
Revolving credit repayments
|
(40.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40.0
|
)
|
|||||
Payment of debt
|
(225.7
|
)
|
|
(13.4
|
)
|
|
—
|
|
|
—
|
|
|
(239.1
|
)
|
|||||
Payment of debt issuance costs
|
(12.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12.3
|
)
|
|||||
Purchase of DineEquity common stock
|
(21.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21.2
|
)
|
|||||
Restricted cash
|
—
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|||||
Other
|
6.2
|
|
|
0.9
|
|
|
—
|
|
|
—
|
|
|
7.1
|
|
|||||
Intercompany transfers
|
385.6
|
|
|
(384.7
|
)
|
|
(0.9
|
)
|
|
—
|
|
|
—
|
|
|||||
Cash flows provided by (used in) financing activities
|
132.6
|
|
|
(396.7
|
)
|
|
(0.9
|
)
|
|
—
|
|
|
(265.0
|
)
|
|||||
Net change
|
(13.5
|
)
|
|
(26.9
|
)
|
|
(1.2
|
)
|
|
—
|
|
|
(41.6
|
)
|
|||||
Beginning cash and equivalents
|
23.4
|
|
|
77.3
|
|
|
1.6
|
|
|
—
|
|
|
102.3
|
|
|||||
Ending cash and equivalents
|
$
|
9.9
|
|
|
$
|
50.4
|
|
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
60.7
|
|
|
Revenues
(1)
|
|
Operating
Margin
|
|
Net Income
(2)
|
|
Net Income
(Loss)
Per Share—
Basic
(3)
|
|
Net Income
(Loss)
Per Share—
Diluted
(3)
|
||||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||||||
2013
|
|
|
|
|
|
|
|
|
|
||||||||||
1
st
Quarter
|
$
|
163,169
|
|
|
$
|
94,424
|
|
|
$
|
18,239
|
|
|
$
|
0.95
|
|
|
$
|
0.93
|
|
2
nd
Quarter
|
158,114
|
|
|
91,026
|
|
|
16,937
|
|
|
0.88
|
|
|
0.87
|
|
|||||
3
rd
Quarter
|
161,283
|
|
|
93,043
|
|
|
18,730
|
|
|
0.98
|
|
|
0.97
|
|
|||||
4
th
Quarter
|
157,901
|
|
|
91,199
|
|
|
18,131
|
|
|
0.95
|
|
|
0.94
|
|
|||||
2012
|
|
|
|
|
|
|
|
|
|
||||||||||
1
st
Quarter
|
$
|
245,582
|
|
|
$
|
108,575
|
|
|
$
|
31,344
|
|
|
$
|
1.69
|
|
|
$
|
1.64
|
|
2
nd
Quarter
|
229,391
|
|
|
98,254
|
|
|
16,938
|
|
|
0.89
|
|
|
0.88
|
|
|||||
3
rd
Quarter
|
216,318
|
|
|
96,377
|
|
|
60,573
|
|
|
3.26
|
|
|
3.14
|
|
|||||
4
th
Quarter
|
158,637
|
|
|
88,738
|
|
|
18,819
|
|
|
0.98
|
|
|
0.97
|
|
*
|
Filed herewith.
|
†
|
A contract, compensatory plan or arrangement in which directors or executive officers are eligible to participate.
|
|
DINEEQUITY, INC.
|
|
|
By:
|
/s/ JULIA A. STEWART
|
|
|
Julia A. Stewart
Chairman and Chief Executive Officer
|
Name
|
|
Title
|
|
|
|
/s/ JULIA A. STEWART
|
|
Chairman and Chief Executive Officer (Principal Executive Officer)
|
Julia A. Stewart
|
|
|
|
|
|
/s/ THOMAS W. EMREY
|
|
Chief Financial Officer (Principal Financial Officer)
|
Thomas W. Emrey
|
|
|
|
|
|
/s/ GREGGORY KALVIN
|
|
Senior Vice President, Corporate Controller (Principal Accounting Officer)
|
Greggory Kalvin
|
|
|
|
|
|
/s/ RICHARD J. DAHL
|
|
Director
|
Richard J. Dahl
|
|
|
|
|
|
/s/ HOWARD M. BERK
|
|
Director
|
Howard M. Berk
|
|
|
|
|
|
/s/ DANIEL J. BRESTLE
|
|
Director
|
Daniel J. Brestle
|
|
|
|
|
|
/s/ MICHAEL S. GORDON
|
|
Director
|
Michael S. Gordon
|
|
|
|
|
|
/s/ STEPHEN P. JOYCE
|
|
Director
|
Stephen P. Joyce
|
|
|
|
|
|
/s/ LARRY A. KAY
|
|
Director
|
Larry A. Kay
|
|
|
|
|
|
/s/ CAROLINE W. NAHAS
|
|
Director
|
Caroline W. Nahas
|
|
|
|
|
|
/s/ DOUGLAS M. PASQUALE
|
|
Director
|
Douglas M. Pasquale
|
|
|
|
|
|
/s/ GILBERT T. RAY
|
|
Director
|
Gilbert T. Ray
|
|
|
|
|
|
/s/ PATRICK W. ROSE
|
|
Director
|
Patrick W. Rose
|
|
|
1.1
|
"Account Balance" shall mean, with respect to a Participant, an entry on the records of the Employer equal to the sum of the Participant's Annual Accounts. The Account Balance shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant, or his or her designated Beneficiary, pursuant to this Plan.
|
1.2
|
"Annual Account" shall mean, with respect to a Participant, an entry on the records of the Employer equal to (a) the sum of the Participant's Annual Deferral Amount and Company Contribution Amount and for any one Plan Year, plus (b) amounts credited or debited to such amounts pursuant to this Plan, less (c) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to the Annual Account for such Plan Year. The Annual Account shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant, or his or her designated Beneficiary, pursuant to this Plan.
|
1.3
|
"Annual Deferral Amount" shall mean that portion of a Participant's Base Salary, Bonus, Director Fees and LTIP Amounts that a Participant defers in accordance with Article 3 for
|
1.4
|
"Annual Installment Method" shall mean the method used to determine the amount of each payment due to a Participant who has elected to receive a benefit over a period of years in accordance with the applicable provisions of the Plan. The amount of each annual payment due to the Participant shall be calculated by multiplying the balance of the Participant's benefit by a fraction, the numerator of which is one and the denominator of which is the remaining number of annual payments due to the Participant. The amount of the first annual payment shall be calculated as of the close of business on or around the Participant's Benefit Distribution Date, and the amount of each subsequent annual payment shall be calculated on or around each anniversary of such Benefit Distribution Date. For purposes of this Plan, the right to receive a benefit payment in annual installments shall be treated as the entitlement to a single payment.
|
1.5
|
"Base Salary" shall mean the annual cash compensation relating to services performed during any calendar year, excluding distributions from nonqualified deferred compensation plans, bonuses, commissions, overtime, fringe benefits, stock options, relocation expenses, incentive payments, non-monetary awards, director fees and other fees, and automobile and other allowances paid to a Participant for employment services rendered (whether or not such allowances are included in the Employee's gross income). Base Salary shall be calculated before reduction for compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or nonqualified plans of any Employer and shall be calculated to include amounts not otherwise included in the Participant's gross income under Code Sections 125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by any Employer; provided, however, that all such amounts will be included in compensation only to the extent that had there been no such plan, the amount would have been payable in cash to the Employee.
|
1.6
|
"Beneficiary" shall mean one or more persons, trusts, estates or other entities, designated in accordance with Article 10, that are entitled to receive benefits under this Plan upon the death of a Participant.
|
1.7
|
"Beneficiary Designation Form" shall mean the form established from time to time by the Committee that a Participant completes, signs and returns to the Committee to designate one or more Beneficiaries.
|
1.8
|
"Benefit Distribution Date" shall mean the date upon which all or an objectively determinable portion of a Participant's vested benefits will become eligible for distribution. Except as otherwise provided in the Plan, a Participant's Benefit Distribution Date shall be determined based on the earliest to occur of an event or scheduled date set forth in Articles 4 through 9, as applicable.
|
1.9
|
"Board" shall mean the board of directors of the Company.
|
1.10
|
"Bonus" shall mean any compensation, in addition to Base Salary and LTIP Amounts, earned by a Participant under any Employer's annual bonus and cash incentive plans.
|
1.11
|
"Change in Control" shall mean the occurrence of a "change in the ownership," a "change in the effective control" or a "change in the ownership of a substantial portion of the assets" of a corporation, as determined in accordance with this Section.
|
(a)
|
A "change in the ownership" of the applicable corporation shall occur on the date on which any one person, or more than one person acting as a group, acquires ownership of stock of such corporation that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of such corporation, as determined in accordance with Treas. Reg. §1.409A-3(i)(5)(v). If a person or group is considered either to own more than 50% of the total fair market value or total voting power of the stock of such corporation, or to have effective control of such corporation within the meaning of part (b) of this Section, and such person or group acquires additional stock of such corporation, the acquisition of additional stock by such person or group shall not be considered to cause a "change in the ownership" of such corporation.
|
(b)
|
A "change in the effective control" of the applicable corporation shall occur on either of the following dates:
|
(i)
|
The date on which any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of such corporation possessing 30% or more of the total voting power of the stock of such corporation, as determined in accordance with Treas. Reg. §1.409A-3(i)(5)(vi). If a person or group is considered to possess 30% or more of the total voting power of the stock of a corporation, and such person or group acquires additional stock of such corporation, the acquisition of additional stock by such person or group shall not be considered to cause a "change in the effective control" of such corporation; or
|
(ii)
|
The date on which a majority of the members of the applicable corporation's board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of such corporation's board of directors before the date of the appointment or election, as determined in accordance with Treas. Reg. §1.409A-3(i)(5)(vi). In determining whether the event described in the preceding sentence has occurred, the applicable corporation to which the event must relate shall only include a corporation identified in accordance with Treas. Reg. §1.409A-3(i)(5)(ii) for which no other corporation is a majority shareholder.
|
(c)
|
A "change in the ownership of a substantial portion of the assets" of the applicable corporation shall occur on the date on which any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the corporation that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the corporation immediately before such acquisition or acquisitions, as determined in accordance with Treas. Reg. §1.409A-3(i)(5)(vii). A transfer of assets shall not be treated as a "change in the ownership of a substantial portion of the assets" when such transfer is made to an entity that is controlled by the shareholders of the transferor corporation, as determined in accordance with Treas. Reg. §1.409A- 3(i)(5)(vii)(B).
|
1.12
|
"Code" shall mean the Internal Revenue Code of 1986, as it may be amended from time to time.
|
1.13
|
"Committee" shall mean the committee described in Article 13.
|
1.14
|
"Company" shall mean IHOP Corp., Inc., a Delaware corporation, and any successor to all or substantially all of the Company's assets or business.
|
1.15
|
"Company Contribution Amount" shall mean, for any one Plan Year, the amount determined in accordance with Section 3.4.
|
1.16
|
"Director" shall mean any member of the board of directors of any Employer.
|
1.17
|
"Director Fees" shall mean the annual fees earned by a Director from any Employer, including retainer fees and meetings fees, as compensation for serving on the board of directors.
|
1.18
|
"Disability" or "Disabled" shall mean that a Participant is either (a) unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (b) by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of
|
1.19
|
"Election Form" shall mean the form, which may be in electronic format, established from time to time by the Committee that a Participant completes, signs and returns to the Committee to make an election under the Plan.
|
1.20
|
"Employee" shall mean a person who is an employee of an Employer.
|
1.21
|
"Employer(s)" shall be defined as follows:
|
(a)
|
Except as otherwise provided in part (b) of this Section, the term "Employer" shall mean the Company and/or any of its subsidiaries (now in existence or hereafter formed or acquired) that have been selected by the Board to participate in the Plan and have adopted the Plan as a sponsor.
|
(b)
|
For the purpose of determining whether a Participant has experienced a Separation from Service, the term "Employer" shall mean:
|
(i)
|
The entity for which the Participant performs services and with respect to which the legally binding right to compensation deferred or contributed under this Plan arises; and
|
(ii)
|
All other entities with which the entity described above would be aggregated and treated as a single employer under Code Section 414(b) (controlled group of corporations) and Code Section 414(c) (a group of trades or businesses, whether or not incorporated, under common control), as applicable. In order to identify the group of entities described in the preceding sentence, the Committee shall use an ownership threshold of at least 50% as a substitute for the 80% minimum ownership threshold that appears in, and otherwise must be used when applying, the applicable provisions of (A) Code Section 1563 for determining a controlled group of corporations under Code Section 414(b), and (B) Treas. Reg. §1.414(c)- 2 for determining the trades or businesses that are under common control under Code Section 414(c).
|
1.22
|
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time.
|
1.23
|
"401(k) Plan" shall mean, with respect to an Employer, a plan qualified under Code Section 401(a) that contains a cash or deferral arrangement described in Code Section 401(k), adopted by the Employer, as it may be amended from time to time, or any successor thereto.
|
1.24
|
"LTIP Amounts" shall mean any portion of the compensation attributable to a Plan Year that is earned by a Participant under any Employer's long-term incentive plan or any other long-term incentive arrangement designated by the Committee.
|
1.25
|
"Participant" shall mean any Employee or Director (a) who is selected to participate in the Plan, (b) whose executed Plan Agreement, Election Form and Beneficiary Designation Form are accepted by the Committee, and (c) whose Plan Agreement has not terminated.
|
1.26
|
"Performance-Based Compensation" shall mean compensation the entitlement to or amount of which is contingent on the satisfaction of pre-established organizational or individual performance criteria relating to a performance period of at least 12 consecutive months, as determined by the Committee in accordance with Treas. Reg. §1.409A-1(e).
|
1.27
|
"Plan" shall mean the IHOP Corp., Inc. Nonqualified Deferred Compensation Plan, which shall be evidenced by this instrument, as it may be amended from time to time, and by any other documents that together with this instrument define a Participant's rights to amounts credited to his or her Account Balance.
|
1.28
|
"Plan Agreement" shall mean a written agreement in the form prescribed by or acceptable to the Committee that evidences a Participant's agreement to the terms of the Plan and which may establish additional terms or conditions of Plan participation for a Participant. Unless otherwise determined by the Committee, the most recent Plan Agreement accepted with respect to a Participant shall supersede any prior Plan Agreements for such Participant. Plan Agreements may vary among Participants and may provide additional benefits not set forth in the Plan or limit the benefits otherwise provided under the Plan.
|
1.29
|
"Plan Year" shall mean a period beginning on January 1 of each calendar year and continuing through December 31 of such calendar year.
|
1.30
|
"Retirement," "Retire(s)" or "Retired" shall mean with respect to a Participant who is an Employee, a Separation from Service on or after date on which such Participant's age plus Years of Service equals at least 70, and shall mean with respect to a Participant who is a Director, a Separation from Service on or after the date the Director attains age 70. If a Participant is both an Employee and a Director and participates in the Plan in each capacity, (a) the determination of whether the Participant qualifies for Retirement as an Employee shall be made when the Participant experiences a Separation from Service as an Employee and such determination shall only apply to the applicable Account Balance established in accordance with Section 1.1 for amounts deferred under the Plan as an Employee, and (b) the determination of whether the Participant qualifies for Retirement as a Director shall be made at the time the Participant experiences a Separation from Service as a Director and such determination shall only apply to the applicable Account Balance established in accordance with Section 1.1 for amounts deferred under the Plan as a Director.
|
1.31
|
"Separation from Service" shall mean a termination of services provided by a Participant to his or her Employer, whether voluntarily or involuntarily, other than by reason of death or Disability, as determined by the Committee in accordance with Treas. Reg. §1.409A-1
|
(a)
|
For a Participant who provides services to an Employer as an Employee, except as otherwise provided in part (c) of this Section, a Separation from Service shall occur when such Participant has experienced a termination of employment with such Employer. A Participant shall be considered to have experienced a termination of employment when the facts and circumstances indicate that the Participant and his or her Employer reasonably anticipate that either (i) no further services will be performed for the Employer after a certain date, or (ii) that the level of bona fide services the Participant will perform for the Employer after such date (whether as an Employee or as an independent contractor) will permanently decrease to no more than 20% of the average level of bona fide services performed by such Participant (whether as an Employee or an independent contractor) over the immediately preceding 36-month period (or the full period of services to the Employer if the Participant has been providing services to the Employer less than 36 months).
|
(b)
|
Notwithstanding the foregoing provisions in part (a) of this Section, if a Participant provides services for an Employer as both an Employee and as a Director, to the extent permitted by Treas. Reg. §1.409A-1(h)(5) the services provided by such Participant as a Director shall not be taken into account in determining whether the Participant has experienced a Separation from Service as an Employee, and the services provided by such Participant as an Employee shall not be taken into account in determining whether the Participant has experienced a Separation from Service as a Director.
|
1.32
|
"Specified Employee" shall mean any Participant who is determined to be a "key employee" (as defined under Code Section 416(i) without regard to paragraph (5) thereof) for the applicable period, as determined annually by the Committee in accordance with Treas. Reg. §1.409A-1(i). In determining whether a Participant is a Specified Employee, the following provisions shall apply:
|
(a)
|
The Committee's identification of the individuals who fall within the definition of "key employee" under Code Section 416(i) (without regard to paragraph (5) thereof) shall be based upon the 12-month period ending on each December 31st (referred to below as the "identification date"). In applying the applicable provisions of Code Section 416(i) to identify such individuals, "compensation" shall be determined in accordance with Treas. Reg. §1.415(c)-2; and
|
(b)
|
Each Participant who is among the individuals identified as a "key employee" in accordance with part (a) of this Section shall be treated as a Specified Employee for purposes of this Plan if such Participant experiences a Separation from Service during the 12-month period that begins on the April 1st following the applicable identification date.
|
1.33
|
"Stock" shall mean IHOP Corp., Inc. common stock, $.01 par value, or any other equity securities or the Company as designated by the Committee.
|
1.34
|
"Trust" shall mean one or more trusts established by the Company in accordance with Article 16.
|
1.35
|
"Unforeseeable Emergency" shall mean a severe financial hardship of the Participant resulting from (a) an illness or accident of the Participant, the Participant's spouse, the Participant's Beneficiary or the Participant's dependent (as defined in Code Section 152 without regard to paragraphs (b)(1), (b)(2) and (d)(1)(b) thereof), (b) a loss of the Participant's property due to casualty, or (c) such other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, all as determined by the Committee based on the relevant facts and circumstances.
|
1.36
|
"Years of Service" shall mean the total number of full years in which a Participant has been employed by one or more Employers. For purposes of this definition, a year of employment shall be a 365 day period (or 366 day period in the case of a leap year) that, for the first year of employment, commences on the Employee's date of hiring and that, for any subsequent year, commences on an anniversary of that hiring date. A partial year of employment shall not be treated as a Year of Service.
|
2.1
|
Selection by Committee
. Participation in the Plan shall be limited to Directors and, as determined by the Committee in its sole discretion, a select group of management or highly compensated Employees. From that group, the Committee shall select, in its sole discretion, those individuals who may actually participate in this Plan.
|
2.2
|
Enrollment and Eligibility Requirements; Commencement of Participation
.
|
(a)
|
As a condition to participation, each Director or selected Employee shall complete, execute and return to the Committee a Plan Agreement, an Election Form and a Beneficiary Designation Form by the deadline(s) established by the Committee in accordance with the applicable provisions of this Plan. In addition, the Committee shall establish from time to time such other enrollment requirements as it determines, in its sole discretion, are necessary.
|
(b)
|
Each Director or selected Employee who is eligible to participate in the Plan shall commence participation in the Plan on the date that the Committee determines that the Director or Employee has met all enrollment requirements set forth in this Plan and required by the Committee, including returning all required documents to the Committee within the specified time period.
|
(c)
|
If a Director or an Employee fails to meet all requirements established by the Committee within the period required, that Director or Employee shall not be eligible to participate in the Plan during such Plan Year.
|
(d)
|
Annual Deferral Amount
. For each Plan Year, a Participant may elect to defer, as his or her Annual Deferral Amount, Base Salary, Bonus, LTIP Amounts and/or Director Fees up to the following maximum percentages for each deferral elected:
|
Deferral
|
Maximum Percentage
|
Base Salary
|
80%
|
Bonus
|
100%
|
LTIP Amounts
|
100%
|
Director Fees
|
100%
|
(e)
|
Short Plan Year
. Notwithstanding the foregoing, if a Participant first becomes a Participant after the first day of a Plan Year, then to the extent required by Section 3.2 and Code Section 409A and related Treasury Regulations, the maximum amount of the Participant's Base Salary, Bonus, LTIP Amounts or Director Fees that may be deferred by the Participant for the Plan Year shall be determined by applying the percentages set forth in Section 3.1(a) to the portion of such compensation attributable to services performed after the date that the Participant's deferral election is made.
|
3.2
|
Timing of Deferral Elections; Effect of Election Form
.
|
(a)
|
General Timing Rule for Deferral Elections
. Except as otherwise provided in this Section 3.2, in order for a Participant to make a valid election to defer Base Salary, Bonus, Director Fees and/or LTIP Amounts, the Participant must submit an Election Form on or before the deadline established by the Committee, which in no event shall be later than the December 31st preceding the Plan Year in which such compensation will be earned.
|
(b)
|
Timing of Deferral Elections for Newly Eligible Plan Participants
. A Director or selected Employee who first becomes eligible to participate in the Plan on or after the beginning of a Plan Year, as determined in accordance with Treas. Reg. §1.409A- 2(a)(7)(ii) and the "plan aggregation" rules provided in Treas. Reg. §1.409A-1(c)(2), may be permitted to make an election to defer the portion of Base Salary, Bonus, Director Fees and/or LTIP Amounts attributable to services to be performed after such election, provided that the Participant submits an Election Form on or before the deadline established by the Committee, which in no event shall be later than 30 days after the Participant first becomes eligible to participate in the Plan.
|
(c)
|
Timing of Deferral Elections for Performance-Based Compensation
. Subject to the limitations described below, the Committee may determine that an irrevocable deferral election for an amount that qualifies as Performance-Based Compensation may be made by submitting an Election Form on or before the deadline established by the Committee, which in no event shall be later than 6 months before the end of the performance period.
|
(d)
|
Timing Rule for Deferral of Compensation Subject to Risk of Forfeiture
. With respect to compensation (i) to which a Participant has a legally binding right to payment in a subsequent year, and (ii) that is subject to a forfeiture condition requiring the Participant's continued services for a period of at least 12 months from the date the Participant obtains the legally binding right, the Committee may determine that an irrevocable deferral election for such compensation may be made by timely delivering an Election Form to the Committee in accordance with its rules and procedures, no later than the 30th day after the Participant obtains the legally binding right to the compensation, provided that the election is made at least 12 months in advance of the earliest date at which the forfeiture condition could lapse, as determined in accordance with Treas. Reg. §1.409A-2(a)(5).
|
3.3
|
Withholding and Crediting of Annual Deferral Amounts
. For each Plan Year, the Base Salary portion of the Annual Deferral Amount shall be withheld from each regularly scheduled Base Salary payroll in equal amounts, as adjusted from time to time for increases and decreases in Base Salary. The Bonus, LTIP Amounts and/or Director Fees portion of the Annual Deferral Amount shall be withheld at the time the Bonus, LTIP Amounts or Director Fees are or otherwise would be paid to the Participant, whether or not this occurs during the Plan Year itself. Annual Deferral Amounts shall be credited to the Participant's Annual Account for such Plan Year at the time such amounts would otherwise have been paid to the Participant.
|
3.4
|
Company Contribution Amount
.
|
(a)
|
For each Plan Year, an Employer may be required to credit amounts to a Participant's Annual Account in accordance with employment or other agreements entered into between the Participant and the Employer, which amounts shall be part of the Participant's Company Contribution Amount for that Plan Year. Such amounts shall be credited to the Participant's Annual Account for the applicable Plan Year on the date or dates prescribed by such agreements.
|
(b)
|
For each Plan Year, an Employer, in its sole discretion, may, but is not required to, credit any amount it desires to any Participant's Annual Account under this Plan, which amount shall be part of the Participant's Company Contribution Amount for
|
(c)
|
If not otherwise specified in the Participant's employment or other agreement entered into between the Participant and the Employer, the amount (or the method or formula for determining the amount) of a Participant's Company Contribution Amount shall be set forth in writing in one or more documents, which shall be deemed to be incorporated into this Plan in accordance with Section 1.27, no later than the date on which such Company Contribution Amount is credited to the applicable Annual Account of the Participant.
|
3.5
|
Vesting
.
|
(a)
|
A Participant shall at all times be 100% vested in the portion of his or her Account Balance attributable to Annual Deferral Amounts, plus amounts credited or debited on such amounts pursuant to Section 3.6.
|
(b)
|
A Participant shall be vested in the portion of his or her Account Balance attributable to any Company Contribution Amounts, plus amounts credited or debited on such amounts pursuant to Section 3.6, in accordance with the vesting schedule(s) set forth in his or her Plan Agreement, employment agreement or any other agreement entered into between the Participant and his or her Employer. If not addressed in such agreements, a Participant shall vest in the portion of his or her Account Balance attributable to any Company Contribution Amounts, plus amounts credited or debited on such amounts pursuant to Section 3.6, in accordance with the following schedule:
|
Years of Service
|
Vested Percentage
|
Less than 3 years
|
0%
|
3 years or more
|
100%
|
(c)
|
Notwithstanding anything to the contrary contained in this Section 3.5, in the event of a Change in Control, or upon a Participant's Disability, Separation from Service on or after qualifying for Retirement, or death prior to Separation from Service, any amounts that are not vested in accordance with Section 3.5(b) above, shall immediately become 100% vested.
|
(d)
|
Notwithstanding subsection 3.5(c) above, the vesting schedule described in Section 3.5(b) above shall not be accelerated upon a Change in Control to the extent that the Committee determines that such acceleration would cause the deduction limitations of Section 280G of the Code to become effective. In the event of such a determination,
|
(e)
|
Section 3.5(d) shall not prevent the acceleration of the vesting schedule described in Sections 3.5(b) if such Participant is entitled to a "gross-up" payment, to eliminate the effect of the Code section 4999 excise tax, pursuant to his or her employment agreement or other agreement entered into between such Participant and the Employer.
|
3.6
|
Crediting/Debiting of Account Balances
. In accordance with, and subject to, the rules and procedures that are established from time to time by the Committee, in its sole discretion, amounts shall be credited or debited to a Participant's Account Balance in accordance with the following rules:
|
(a)
|
Measurement Funds
. Subject to the restrictions found in Section 3.7(c) below, the Participant may elect one or more of the measurement funds selected by the Committee, in its sole discretion, which are based on certain mutual funds (the "Measurement Funds"), for the purpose of crediting or debiting additional amounts to his or her Account Balance. As necessary, the Committee may, in its sole discretion, discontinue, substitute or add a Measurement Fund. Each such action will take effect as of the first day of the first calendar quarter that begins at least 30 days after the day on which the Committee gives Participants advance written notice of such change.
|
(b)
|
Election of Measurement Funds
. Subject to the restrictions found in Section 3.7(c) below, a Participant, in connection with his or her initial deferral election in accordance with Section 3.2 above, shall elect, on the Election Form, one or more Measurement Fund(s) (as described in Section 3.6(a) above) to be used to determine the amounts to be credited or debited to his or her Account Balance. If a Participant does not elect any of the Measurement Funds as described in the previous sentence, the Participant's Account Balance shall automatically be allocated into the lowest-risk Measurement Fund, as determined by the Committee, in its sole discretion. Subject to the restrictions found in Section 3.7(c) below, the Participant may (but is not required to) elect, by submitting an Election Form to the Committee that is accepted by the Committee, to add or delete one or more Measurement Fund(s) to be used to determine the amounts to be credited or debited to his or her Account Balance, or to change the portion of his or her Account Balance allocated to each previously or newly elected Measurement Fund. If an election is made in accordance with the previous sentence, it shall apply as of the first business day deemed
|
(c)
|
IHOP Corp., Inc. Stock Unit Fund
.
|
(i)
|
The portion of a Participant's LTIP Account that the Participant has elected to receive in shares of Stock will be automatically and irrevocably allocated to the IHOP Corp., Inc. Stock Unit Fund Measurement Fund. Participants may not select any other Measurement Fund to be used to determine the amounts to be credited or debited to such portion of their LTIP Account. Furthermore, no other portion of the Participant's Account Balance can be either initially allocated or reallocated to IHOP Corp., Inc. Stock Unit Fund. Amounts allocated to the IHOP Corp., Inc. Stock Unit Fund shall only be distributable in actual shares of Stock.
|
(ii)
|
Any stock dividends, cash dividends or other non-cash dividends that would have been payable on the Stock credited to a Participant's Account Balance shall be credited to the Participant's Account Balance in the form of additional shares of Stock and shall automatically and irrevocably be deemed to be re-invested in the IHOP Corp., Inc. Stock Unit Fund until such amounts are distributed to the Participant. The number of shares credited to the Participant for a particular stock dividend shall be equal to (a) the number of shares of Stock credited to the Participant's Account Balance as of the payment date for such dividend in respect of each share of Stock, multiplied by (b) the number of additional or fractional shares of Stock actually paid as a dividend in respect of each share of Stock. The number of shares credited to the Participant for a particular cash dividend or other non-cash dividend shall be equal to (a) the number of shares of Stock credited to the Participant's Account Balance as of the payment date for such dividend in respect of each share of Stock, multiplied by (b) the fair market value of the dividend, divided by (c) the "fair market value" of the Stock on the payment date for such dividend.
|
(iii)
|
The number of shares of Stock credited to the Participant's Account Balance may be adjusted by the Committee, in its sole discretion, to prevent dilution or enlargement of Participants' rights with respect to the portion of his or her Account Balance allocated to the IHOP Corp., Inc. Stock Unit Fund in the event of any reorganization, reclassification, stock split, or other unusual
|
(iv)
|
For purposes of this Section 3.6, the fair market value of the Stock shall be determined by the Committee in its sole discretion.
|
(d)
|
Proportionate Allocation
. In making any election described in Section 3.6(b) above, the Participant shall specify on the Election Form, in increments of one percent (1%), the percentage of his or her Account Balance or Measurement Fund, as applicable, to be allocated/reallocated.
|
(e)
|
Crediting or Debiting Method
. The performance of each Measurement Fund (either positive or negative) will be determined on a daily basis based on the manner in which such Participant's Account Balance has been hypothetically allocated among the Measurement Funds by the Participant.
|
(f)
|
No Actual Investment
. Notwithstanding any other provision of this Plan that may be interpreted to the contrary, the Measurement Funds are to be used for measurement purposes only, and a Participant's election of any such Measurement Fund, the allocation of his or her Account Balance thereto, the calculation of additional amounts and the crediting or debiting of such amounts to a Participant's Account Balance shall not be considered or construed in any manner as an actual investment of his or her Account Balance in any such Measurement Fund. In the event that the Company or the Trustee (as that term is defined in the Trust), in its own discretion, decides to invest funds in any or all of the investments on which the Measurement Funds are based, no Participant shall have any rights in or to such investments themselves. Without limiting the foregoing, a Participant's Account Balance shall at all times be a bookkeeping entry only and shall not represent any investment made on his or her behalf by the Company or the Trust; the Participant shall at all times remain an unsecured creditor of the Company.
|
3.7
|
FICA and Other Taxes
.
|
(a)
|
Annual Deferral Amounts
. For each Plan Year in which an Annual Deferral Amount is being withheld from a Participant, the Participant's Employer(s) shall withhold from that portion of the Participant's Base Salary, Bonus, and/or LTIP Amounts that is not being deferred, in a manner determined by the Employer(s), the Participant's share of FICA and other employment taxes on such Annual Deferral Amount. If necessary, the Committee may reduce the Annual Deferral Amount in order to comply with this Section 3.7.
|
(b)
|
Company Contribution Amounts
. When a Participant becomes vested in a portion of his or her Account Balance attributable to any Company Contribution Amounts, the Participant's Employer(s) shall withhold from that portion of the Participant's Base Salary, Bonus, and/or LTIP Amounts that is not deferred, in a manner
|
(c)
|
Distributions
. The Participant's Employer(s), or the trustee of the Trust, shall withhold from any payments made to a Participant under this Plan all federal, state and local income, employment and other taxes required to be withheld by the Employer(s), or the trustee of the Trust, in connection with such payments, in amounts and in a manner to be determined in the sole discretion of the Employer(s) and the trustee of the Trust.
|
4.1
|
Scheduled Distributions
. In connection with each election to defer an Annual Deferral Amount, a Participant may elect to receive all or a portion of such Annual Deferral Amount, plus amounts credited or debited on that amount pursuant to Section 3.6, in the form of a lump sum payment, calculated as of the close of business on or around the Benefit Distribution Date designated by the Participant in accordance with this Section (a "Scheduled Distribution"). The Benefit Distribution Date for the amount subject to a Scheduled Distribution election shall be the first day of any Plan Year designated by the Participant, which may be no sooner than 3 Plan Years after the end of the Plan Year to which the Participant's deferral election relates, unless otherwise provided on an Election Form approved by the Committee.
|
4.2
|
Postponing Scheduled Distributions
. A Participant may elect to postpone a Scheduled Distribution described in Section 4.1 above, and have such amount paid out during a 60 day period commencing immediately after an allowable alternative Benefit Distribution Date designated in accordance with this Section 4.2. In order to make such an election, the Participant must submit an Election Form to the Committee in accordance with the following criteria:
|
4.2.1
|
The election of the new Benefit Distribution Date shall have no effect until at least 12 months after the date on which the election is made;
|
4.2.2
|
The new Benefit Distribution Date selected by the Participant for such Scheduled Distribution must be the first day of a Plan Year that is no sooner than 5 years after the previously designated Benefit Distribution Date; and
|
4.2.3
|
The election must be made at least 12 months prior to the Participant's previously designated Benefit Distribution Date for such Scheduled Distribution.
|
4.3
|
Other Benefits Take Precedence Over Scheduled Distributions
. Should an event occur prior to any Benefit Distribution Date designated for a Scheduled Distribution that would trigger a benefit under Articles 5 through 9, as applicable, all amounts subject to a Scheduled Distribution election shall be paid in accordance with the other applicable provisions of the Plan and not in accordance with this Article 4.
|
4.4
|
Unforeseeable Emergencies
.
|
4.4.1
|
If a Participant experiences an Unforeseeable Emergency prior to the occurrence of a distribution event described in Articles 5 through 9, as applicable, the Participant may petition the Committee to receive a partial or full payout from the Plan. The payout, if any, from the Plan shall not exceed the lesser of (i) the Participant's vested Account Balance, calculated as of the close of business on or around the Benefit Distribution Date for such payout, as determined by the Committee in accordance with provisions set forth below, or (ii) the amount necessary to satisfy the Unforeseeable Emergency, plus amounts necessary to pay Federal, state, or local income taxes or penalties reasonably anticipated as a result of the distribution. A Participant shall not be eligible to receive a payout from the Plan to the extent that the Unforeseeable Emergency is or may be relieved (A) through reimbursement or compensation by insurance or otherwise, (B) by liquidation of the Participant's assets, to the extent the liquidation of such assets would not itself cause severe financial hardship or (C) by cessation of deferrals under this Plan.
|
4.4.2
|
A Participant's deferral elections under this Plan shall also be cancelled to the extent the Committee determines that such action is required for the Participant to obtain a hardship distribution from an Employer's 401(k) Plan pursuant to Treas. Reg. §1.401(k)-1(d)(3).
|
4
|
Change in Control Benefit |
5.1
|
Change in Control Benefit
. A Participant, in connection with his or her commencement of participation in the Plan, shall have an opportunity to irrevocably elect to receive his or her vested Account Balance in the form of a lump sum payment in the event that a Change in Control occurs prior to the Participant's Separation from Service, Disability or death (the "Change in Control Benefit"). The Benefit Distribution Date for the Change in Control Benefit, if any, shall be the date on which the Change in Control occurs.
|
5.2
|
Payment of Change in Control Benefit
. The Change in Control Benefit, if any, shall be calculated as of the close of business on or around the Participant's Benefit Distribution Date, as determined by the Committee, and paid to the Participant no later than 60 days after the Participant's Benefit Distribution Date.
|
5
|
Retirement Benefit |
6.1
|
Retirement Benefit
. If a Participant experiences a Separation from Service that qualifies as a Retirement, the Participant shall be eligible to receive his or her vested Account Balance in either a lump sum or annual installment payments, as elected by the Participant in accordance with Section 6.2 (the "Retirement Benefit"). A Participant's Retirement Benefit shall be calculated as of the close of business on or around the applicable Benefit Distribution Date for such benefit, which shall be (i) the first day after the end of the 6-month period immediately following the date on which the Participant experiences such Separation from Service if the Participant is a Specified Employee, and (ii) for all other Participants, the date on which the Participant experiences a Separation from Service; provided, however, if a Participant changes the form of distribution for one or more Annual Accounts in accordance with Section 6.2(b), the Benefit Distribution Date for the Annual Account(s) subject to such change shall be determined in accordance with Section 6.2(b).
|
6.2
|
Payment of Retirement Benefit
.
|
6.2.3
|
In connection with a Participant's election to defer an Annual Deferral Amount, the Participant shall elect the form in which his or her Annual Account for such Plan Year will be paid. The Participant may elect to receive each Annual Account in the form of a lump sum or pursuant to an Annual Installment Method of 5 years. If a Participant does not make
|
6.2.4
|
A Participant may change the form of payment for an Annual Account by submitting an Election Form to the Committee in accordance with the following criteria:
|
6.2.4.1
|
The election shall not take effect until at least 12 months after the date on which the election is made;
|
6.2.4.2
|
The new Benefit Distribution Date for such Annual Account shall be 5 years after the Benefit Distribution Date that would otherwise have been applicable to such Annual Account; and
|
6.2.4.3
|
The election must be made at least 12 months prior to the Benefit Distribution Date that would otherwise have been applicable to such Annual Account.
|
6.2.5
|
The lump sum payment shall be made, or installment payments shall commence, no later than 60 days after the applicable Benefit Distribution Date. Remaining installments, if any, shall continue in accordance with the Participant's election for each Annual Account and shall be paid no later than 60 days after each anniversary of the Benefit Distribution Date.
|
6
|
Termination Benefit |
7.1
|
Termination Benefit
. If a Participant experiences a Separation from Service that does not qualify as a Retirement, the Participant shall receive his or her vested Account Balance in the form of a lump sum payment (the "Termination Benefit"). A Participant's Termination Benefit shall be calculated as of the close of business on or around the Benefit Distribution Date for such benefit, which shall be (i) the first day after the end of the 6-month period immediately following the date on which the Participant experiences such Separation from Service if the Participant is a Specified Employee, and (ii) for all other Participants, the date on which the Participant experiences a Separation from Service.
|
7.2
|
Payment of Termination Benefit
. The Termination Benefit shall be paid to the Participant no later than 60 days after the Participant's Benefit Distribution Date.
|
7
|
Disability Benefit |
8.1
|
Disability Benefit
. If a Participant becomes Disabled prior to the occurrence of a distribution event described in Articles 5 through 7, as applicable, the Participant shall receive his or her vested Account Balance in the form of a lump sum payment (the "Disability Benefit"). The Disability Benefit shall be calculated as of the close of business on or around the Participant's Benefit Distribution Date for such benefit, which shall be the date on which the Participant becomes Disabled.
|
8.2
|
Payment of Disability Benefit
. The Disability Benefit shall be paid to the Participant no later than 60 days after the Participant's Benefit Distribution Date.
|
8
|
Death Benefit |
9.1
|
Death Benefit
. In the event of a Participant's death prior to the complete distribution of his or her vested Account Balance, the Participant's Beneficiary(ies) shall receive the Participant's unpaid vested Account Balance in a lump sum payment (the "Death Benefit"). The Death Benefit shall be calculated as of the close of business on or around the Benefit Distribution Date for such benefit, which shall be the date on which the Committee is provided with proof that is satisfactory to the Committee of the Participant's death.
|
9.2
|
Payment of Death Benefit
. The Death Benefit shall be paid to the Participant's Beneficiary(ies) no later than 60 days after the Participant's Benefit Distribution Date.
|
9
|
Beneficiary Designation |
10.1
|
Beneficiary
. Each Participant shall have the right, at any time, to designate his or her Beneficiary(ies) (both primary as well as contingent) to receive any benefits payable under the Plan to a beneficiary upon the death of a Participant. The Beneficiary designated under this Plan may be the same as or different from the Beneficiary designation under any other plan of an Employer in which the Participant participates.
|
10.2
|
Beneficiary Designation; Change; Spousal Consent
. A Participant shall designate his or her Beneficiary by completing and signing the Beneficiary Designation Form, and returning it to the Committee or its designated agent. A Participant shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Committee's rules and procedures, as in effect from time to time. If the Participant names someone other than his or her spouse as a Beneficiary, the Committee may, in its sole discretion, determine that spousal consent is required to be provided in a form designated by
|
10.3
|
Acknowledgment
. No designation or change in designation of a Beneficiary shall be effective until received and acknowledged in writing by the Committee or its designated agent.
|
10.4
|
No Beneficiary Designation
. If a Participant fails to designate a Beneficiary as provided in Sections 10.1, 10.2 and 10.3 above or, if all designated Beneficiaries predecease the Participant or die prior to complete distribution of the Participant's benefits, then the Participant's designated Beneficiary shall be deemed to be his or her surviving spouse. If the Participant has no surviving spouse, the benefits remaining under the Plan to be paid to a Beneficiary shall be payable to the executor or personal representative of the Participant's estate.
|
10.5
|
Doubt as to Beneficiary
. If the Committee has any doubt as to the proper Beneficiary to receive payments pursuant to this Plan, the Committee shall have the right, exercisable in its discretion, to cause the Participant's Employer to withhold such payments until this matter is resolved to the Committee's satisfaction.
|
10.6
|
Discharge of Obligations
. The payment of benefits under the Plan to a Beneficiary shall fully and completely discharge all Employers and the Committee from all further obligations under this Plan with respect to the Participant, and that Participant's Plan Agreement shall terminate upon such full payment of benefits.
|
10
|
Leave of Absence |
11.1
|
Paid Leave of Absence
. If a Participant is authorized by the Participant's Employer to take a paid leave of absence from the employment of the Employer, and such leave of absence does not constitute a Separation from Service, (a) the Participant shall continue to be considered eligible for the benefits provided under the Plan, and (b) the Annual Deferral Amount shall continue to be withheld during such paid leave of absence in accordance with Section 3.2.
|
11.2
|
Unpaid Leave of Absence
. If a Participant is authorized by the Participant's Employer to take an unpaid leave of absence from the employment of the Employer for any reason, and such leave of absence does not constitute a Separation from Service, such Participant shall continue to be eligible for the benefits provided under the Plan. During the unpaid leave of absence, the Participant shall not be allowed to make any additional deferral elections. However, if the Participant returns to employment, the Participant may elect to defer an Annual Deferral Amount for the Plan Year following his or her return to employment and for every Plan Year thereafter while a Participant in the Plan, provided such deferral elections are otherwise allowed and an
|
11
|
Termination of Plan, Amendment or Modification |
12.1
|
Termination of Plan
. Although each Employer anticipates that it will continue the Plan for an indefinite period of time, there is no guarantee that any Employer will continue the Plan or will not terminate the Plan at any time in the future. Accordingly, each Employer reserves the right to terminate the Plan with respect to all of its Participants. In the event of a Plan termination no new deferral elections shall be permitted for the affected Participants and such Participants shall no longer be eligible to receive new company contributions. However, after the Plan termination the Account Balances of such Participants shall continue to be credited with Annual Deferral Amounts attributable to a deferral election that was in effect prior to the Plan termination to the extent deemed necessary to comply with Code Section 409A and related Treasury Regulations, and additional amounts shall continue to credited or debited to such Participants' Account Balances pursuant to Section 3.6. The Measurement Funds available to Participants following the termination of the Plan shall be comparable in number and type to those Measurement Funds available to Participants in the Plan Year preceding the Plan Year in which the Plan termination is effective. In addition, following a Plan termination, Participant Account Balances shall remain in the Plan and shall not be distributed until such amounts become eligible for distribution in accordance with the other applicable provisions of the Plan. Notwithstanding the preceding sentence, to the extent permitted by Treas. Reg. §1.409A-3(j)(4)(ix), the Employer may provide that upon termination of the Plan, all Account Balances of the Participants shall be distributed, subject to and in accordance with any rules established by such Employer deemed necessary to comply with the applicable requirements and limitations of Treas. Reg. §1.409A-3(j)(4)(ix).
|
12.2
|
Amendment
. Any Employer may, at any time, amend or modify the Plan in whole or in part with respect to that Employer. Notwithstanding the foregoing, no amendment or modification shall be effective to decrease the value of a Participant's vested Account Balance in existence at the time the amendment or modification is made.
|
12.3
|
Plan Agreement
. Despite the provisions of Sections 12.1, if a Participant's Plan Agreement contains benefits or limitations that are not in this Plan document, the Employer may only amend or terminate such provisions with the written consent of the Participant.
|
12.4
|
Effect of Payment
. The full payment of the Participant's vested Account Balance in accordance with the applicable provisions of the Plan shall completely discharge all obligations to a Participant and his or her designated Beneficiaries under this Plan, and the Participant's Plan Agreement shall terminate.
|
12
|
Administration |
13.1
|
Committee Duties
. Except as otherwise provided in this Article 13, this Plan shall be administered by a Committee, which shall consist of the Board, or such committee as the Board shall appoint. Members of the Committee may be Participants under this Plan. The Committee shall also have the discretion and authority to (a) make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Plan, and (b) decide or resolve any and all questions, including benefit entitlement determinations and interpretations of this Plan, as may arise in connection with the Plan. Any individual serving on the Committee who is a Participant shall not vote or act on any matter relating solely to himself or herself. When making a determination or calculation, the Committee shall be entitled to rely on information furnished by a Participant or the Company.
|
13.2
|
Administration Upon Change in Control
. Within 120 days following a Change in Control, the individuals who comprised the Committee immediately prior to the Change in Control (whether or not such individuals are members of the Committee following the Change in Control) may, by written consent of the majority of such individuals, appoint an independent third party administrator (the "Administrator") to perform any or all of the Committee's duties described in Section 13.1 above, including without limitation, the power to determine any questions arising in connection with the administration or interpretation of the Plan, and the power to make benefit entitlement determinations. Upon and after the effective date of such appointment, (a) the Company must pay all reasonable administrative expenses and fees of the Administrator, and (b) the Administrator may only be terminated with the written consent of the majority of Participants with an Account Balance in the Plan as of the date of such proposed termination.
|
13.3
|
Agents
. In the administration of this Plan, the Committee or the Administrator, as applicable, may, from time to time, employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel.
|
13.4
|
Binding Effect of Decisions
. The decision or action of the Committee or Administrator, as applicable, with respect to any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.
|
13.5
|
Indemnity of Committee
. All Employers shall indemnify and hold harmless the members of the Committee, any Employee to whom the duties of the Committee may be delegated, and the Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Plan, except in the case of willful misconduct by the Committee, any of its members, any such Employee or the Administrator.
|
13.6
|
Employer Information
. To enable the Committee and/or Administrator to perform its functions, the Company and each Employer shall supply full and timely information to the Committee and/or Administrator, as the case may be, on all matters relating to the Plan, the
|
13
|
Other Benefits and Agreements |
14.1
|
Coordination with Other Benefits
. The benefits provided for a Participant and Participant's Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program for employees of the Participant's Employer. The Plan shall supplement and shall not supersede, modify or amend any other such plan or program except as may otherwise be expressly provided.
|
14
|
Claims Procedures |
15.1
|
Presentation of Claim
. Any Participant or Beneficiary of a deceased Participant (such Participant or Beneficiary being referred to below as a "Claimant") may deliver to the Committee a written claim for a determination with respect to the amounts distributable to such Claimant from the Plan. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within 60 days after such notice was received by the Claimant. All other claims must be made within 180 days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant.
|
15.2
|
Notification of Decision
. The Committee shall consider a Claimant's claim within a reasonable time, but no later than 90 days after receiving the claim. If the Committee determines that special circumstances require an extension of time for processing the claim, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial 90 day period. In no event shall such extension exceed a period of 90 days from the end of the initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Committee expects to render the benefit determination. The Committee shall notify the Claimant in writing:
|
15.2.1
|
that the Claimant's requested determination has been made, and that the claim has been allowed in full; or
|
15.2.2
|
that the Committee has reached a conclusion contrary, in whole or in part, to the Claimant's requested determination, and such notice must set forth in a manner calculated to be understood by the Claimant:
|
15.2.2.1
|
the specific reason(s) for the denial of the claim, or any part of it;
|
15.2.2.2
|
specific reference(s) to pertinent provisions of the Plan upon which such denial was based;
|
15.2.2.3
|
a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary;
|
15.2.2.4
|
an explanation of the claim review procedure set forth in Section 15.3 below; and
|
15.2.2.5
|
a statement of the Claimant's right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.
|
15.3
|
Review of a Denied Claim
. On or before 60 days after receiving a notice from the Committee that a claim has been denied, in whole or in part, a Claimant (or the Claimant's duly authorized representative) may file with the Committee a written request for a review of the denial of the claim. The Claimant (or the Claimant's duly authorized representative):
|
15.3.1
|
may, upon request and free of charge, have reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claim for benefits;
|
15.3.2
|
may submit written comments or other documents; and/or
|
15.3.3
|
may request a hearing, which the Committee, in its sole discretion, may grant.
|
15.4
|
Decision on Review
. The Committee shall render its decision on review promptly, and no later than 60 days after the Committee receives the Claimant's written request for a review of the denial of the claim. If the Committee determines that special circumstances require an extension of time for processing the claim, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial 60 day period. In no event shall such extension exceed a period of 60 days from the end of the initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Committee expects to render the benefit determination. In rendering its decision, the Committee shall take into account all comments, documents, records and other information submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. The decision must be written in a manner calculated to be understood by the Claimant, and it must contain:
|
15.4.1
|
specific reasons for the decision;
|
15.4.2
|
specific reference(s) to the pertinent Plan provisions upon which the decision was based;
|
15.4.3
|
a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimant's claim for benefits; and
|
15.4.4
|
a statement of the Claimant's right to bring a civil action under ERISA Section 502(a).
|
15.5
|
Legal Action
. A Claimant's compliance with the foregoing provisions of this Article 15 is a mandatory prerequisite to a Claimant's right to commence any legal action with respect to any claim for benefits under this Plan.
|
15
|
Trust |
16.1
|
Establishment of the Trust
. In order to provide assets from which to fulfill its obligations to the Participants and their Beneficiaries under the Plan, the Company may establish a trust by a trust agreement with a third party, the trustee, to which each Employer may, in its discretion, contribute cash or other property, including securities issued by the Company, to provide for the benefit payments under the Plan (the "Trust").
|
16.2
|
Interrelationship of the Plan and the Trust
. The provisions of the Plan and the Plan Agreement shall govern the rights of a Participant to receive distributions pursuant to the Plan. The provisions of the Trust shall govern the rights of the Employers, Participants and the creditors of the Employers to the assets transferred to the Trust. Each Employer shall at all times remain liable to carry out its obligations under the Plan.
|
16.3
|
Distributions From the Trust
. Each Employer's obligations under the Plan may be satisfied with Trust assets distributed pursuant to the terms of the Trust, and any such distribution shall reduce the Employer's obligations under this Plan.
|
16
|
Miscellaneous |
17.1
|
Status of Plan
. The Plan is intended to be a plan that is not qualified within the meaning of Code Section 401(a) and that "is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees" within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1). The Plan shall be administered and interpreted (a) to the extent possible in a manner consistent with the intent described in the preceding sentence, and (b) in accordance with Code Section 409A and related Treasury guidance and Regulations.
|
17.2
|
Unsecured General Creditor
. Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interests or claims in any property or assets of an Employer. For purposes of the payment of benefits under this Plan, any and all of an Employer's assets shall be, and remain, the general, unpledged unrestricted assets of the Employer. An Employer's obligation under the Plan shall be merely that of an unfunded and unsecured promise to pay money in the future.
|
17.3
|
Employer's Liability
. An Employer's liability for the payment of benefits shall be defined only by the Plan and the Plan Agreement, as entered into between the Employer and a Participant.
|
17.4
|
Nonassignability
. Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are expressly declared to be, unassignable and nontransferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure, attachment, garnishment or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, be transferable by operation of law in the event of a Participant's or any other person's bankruptcy or insolvency or be transferable to a spouse as a result of a property settlement or otherwise.
|
17.5
|
Not a Contract of Employment
. The terms and conditions of this Plan shall not be deemed to constitute a contract of employment between any Employer and the Participant. Such employment is hereby acknowledged to be an "at will" employment relationship that can be terminated at any time for any reason, or no reason, with or without cause, and with or without notice, unless expressly provided in a written employment agreement. Nothing in this Plan shall be deemed to give a Participant the right to be retained in the service of any Employer, either as an Employee or a Director, or to interfere with the right of any Employer to discipline or discharge the Participant at any time.
|
17.6
|
Furnishing Information
. A Participant or his or her Beneficiary will cooperate with the Committee by furnishing any and all information requested by the Committee and take such other actions as may be requested in order to facilitate the administration of the Plan and the payments of benefits hereunder, including but not limited to taking such physical examinations as the Committee may deem necessary.
|
17.7
|
Terms
. Whenever any words are used herein in the masculine, they shall be construed as though they were in the feminine in all cases where they would so apply; and whenever any words are used herein in the singular or in the plural, they shall be construed as though they were used in the plural or the singular, as the case may be, in all cases where they would so apply.
|
17.8
|
Captions
. The captions of the articles, sections and paragraphs of this Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions.
|
17.9
|
Governing Law
. Subject to ERISA, the provisions of this Plan shall be construed and interpreted according to the internal laws of the State of California without regard to its conflicts of laws principles.
|
17.10
|
Notice
. Any notice or filing required or permitted to be given to the Committee under this Plan shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below:
|
17.11
|
Successors
. The provisions of this Plan shall bind and inure to the benefit of the Participant's Employer and its successors and assigns and the Participant and the Participant's designated Beneficiaries.
|
17.12
|
Spouse's Interest
. The interest in the benefits hereunder of a spouse of a Participant who has predeceased the Participant shall automatically pass to the Participant and shall not be transferable by such spouse in any manner, including but not limited to such spouse's will, nor shall such interest pass under the laws of intestate succession.
|
17.13
|
Validity
. In case any provision of this Plan shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal or invalid provision had never been inserted herein.
|
17.14
|
Incompetent
. If the Committee determines in its discretion that a benefit under this Plan is to be paid to a minor, a person declared incompetent or to a person incapable of handling the disposition of that person's property, the Committee may direct payment of such benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or incapable person. The Committee may require proof of minority, incompetence, incapacity or guardianship, as it may deem appropriate prior to distribution of the benefit. Any payment of a benefit shall be a payment for the account of the Participant and the Participant's Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Plan for such payment amount.
|
17.15
|
Domestic Relations Orders
. If necessary to comply with a domestic relations order, as defined in Code Section 414(p)(1)(B), pursuant to which a court has determined that a spouse or former spouse of a Participant has an interest in the Participant's benefits under the Plan, the Committee shall have the right to immediately distribute the spouse's or former spouse's interest in the Participant's benefits under the Plan to such spouse or former spouse.
|
17.16
|
Distribution in the Event of Income Inclusion Under Code Section 409A
. If any portion of a Participant's Account Balance under this Plan is required to be included in income by the Participant prior to receipt due to a failure of this Plan to comply with the requirements of Code Section 409A and related Treasury Regulations, the Committee may determine that such
|
17.17
|
Deduction Limitation on Benefit Payments
. If an Employer reasonably anticipates that the Employer's deduction with respect to any distribution from this Plan would be limited or eliminated by application of Code Section 162(m), then to the extent permitted by Treas. Reg. §1.409A-2(b)(7)(i), payment shall be delayed as deemed necessary to ensure that the entire amount of any distribution from this Plan is deductible. Any amounts for which distribution is delayed pursuant to this Section shall continue to be credited/debited with additional amounts in accordance with Section 3.6. The delayed amounts (and any amounts credited thereon) shall be distributed to the Participant (or his or her Beneficiary in the event of the Participant's death) at the earliest date the Employer reasonably anticipates that the deduction of the payment of the amount will not be limited or eliminated by application of Code Section 162(m). In the event that such date is determined to be after a Participant's Separation from Service and the Participant to whom the payment relates is determined to be a Specified Employee, then to the extent deemed necessary to comply with Treas. Reg. §1.409A-3(i)(2), the delayed payment shall not made before the end of the six-month period following such Participant's Separation from Service.
|
Consolidated Leverage Ratio Calculation:
|
|
||
Financial Covenant Debt
(1)
|
$
|
1,336,666
|
|
Consolidated EBITDA
(1)
|
277,088
|
|
|
Leverage Ratio
|
4.8
|
|
|
Consolidated Interest Coverage Ratio Calculation:
|
|
||
Consolidated EBITDA
(1)
|
$
|
277,088
|
|
Consolidated Cash Interest Charges
(1)
|
110,618
|
|
|
Interest Coverage Ratio
|
2.5
|
|
(1)
|
Definitions of all components used in calculating the above ratios are found in the Credit Agreement, dated October 8, 2010, filed as Exhibit 10.2 to our Current Report on Form 8-K filed on October 21, 2010.
|
Name of Entity
|
State or Other
Jurisdiction of
Incorporation or
Organization
|
DineEquity, Inc.
|
DE
|
International House of Pancakes, LLC
|
DE
|
III Industries of Canada, LTD.
|
Canada
|
IHOP of Canada ULC
|
Canada
|
IHOP Holdings, LLC
|
DE
|
IHOP Franchising, LLC
|
DE
|
IHOP Property Leasing, LLC
|
DE
|
IHOP Properties, LLC
|
DE
|
IHOP Real Estate, LLC
|
DE
|
IHOP IP, LLC
|
DE
|
IHOP Franchise Company, LLC
|
DE
|
IHOP TPGC, LLC
|
OH
|
ACM Cards, Inc.
|
FL
|
Anne Arundel Apple Holding Corporation
|
MD
|
Applebee's Brazil, LLC
|
KS
|
Applebee's Canada Corp.
|
Canada
|
Applebee's International, Inc.
|
DE
|
Applebee's Investments, LLC
|
KS
|
Applebee's Restaurantes Brasil, LTDA.
|
Brazil
|
Applebee's Restaurantes De Mexico S.de R.L. de C.V.
|
Mexico
|
Applebee's UK, LLC
|
KS
|
Applebee's Restaurant Holdings, LLC
|
DE
|
Applebee's Restaurants Kansas, LLC
|
KS
|
Applebee's Restaurants Mid-Atlantic, LLC
|
DE
|
Applebee's Restaurants North, LLC
|
DE
|
Applebee's Restaurants Texas, LLC
|
TX
|
Applebee's Restaurants Vermont, Inc.
|
VT
|
Applebee's Restaurants West, LLC
|
DE
|
Applebee's Restaurants, Inc.
|
KS
|
Applebee's Services, Inc.
|
KS
|
Gourmet Systems of Brazil, LLC
|
KS
|
Gourmet Systems of Massachusetts, LLC
|
MA
|
Gourmet Systems of New York, Inc.
|
NY
|
Gourmet Systems of Tennessee, Inc.
|
TN
|
Gourmet Systems USA, LLC
|
KS
|
Neighborhood Insurance, Inc.
|
VT
|
Shanghai Applebee's Restaurant Management Co. LTD.
|
Xuhui District, Puxi, China
|
DineEquity Foundation, Inc. (dba The Heidi Fund, Inc.)
|
KS
|
•
|
Form S-8 No. 333-71768 pertaining to the IHOP Corp. 2001 Stock Incentive Plan of DineEquity, Inc. and Subsidiaries;
|
•
|
Form S-8 No. 333-149771 pertaining to the IHOP Corp. 2005 Stock Incentive Plan for Non-Employee Directors;
|
•
|
Form S-8 No. 333-174847 pertaining to the DineEquity, Inc. 2011 Stock Incentive Plan; and
|
•
|
Form S-4/A No. 333-173549 pertaining to the 9.5% Senior Notes due 2018
|
1.
|
I have reviewed this Annual Report on Form 10-K of DineEquity, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: February 26, 2014
|
|
/s/ JULIA A. STEWART
|
|
|
Julia A. Stewart
Chairman and Chief Executive Officer
|
|
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of DineEquity, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: February 26, 2014
|
|
/s/ THOMAS W. EMREY
|
|
|
Thomas W. Emrey
Chief Financial Officer (Principal Financial Officer)
|
|
|
|
Date: February 26, 2014
|
|
|
|
|
/s/ JULIA A. STEWART
|
|
|
Julia A. Stewart
Chairman and Chief Executive Officer
|
Date: February 26, 2014
|
|
|
|
|
/s/ THOMAS W. EMREY
|
|
|
Thomas W. Emrey
Chief Financial Officer
(Principal Financial Officer)
|