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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91203-1903
(Zip Code)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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Class
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Outstanding as of April 24, 2015
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Common Stock, $0.01 par value
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19,049,811
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Page
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Assets
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March 31,
2015 |
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December 31, 2014
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||||
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(Unaudited)
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||||
Current assets:
|
|
|
|
|
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||
Cash and cash equivalents
|
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$
|
133,470
|
|
|
$
|
104,004
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|
Receivables, net
|
|
93,532
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|
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153,498
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||
Restricted cash
|
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40,701
|
|
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52,262
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||
Prepaid gift cards
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41,208
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51,268
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||
Prepaid income taxes
|
|
—
|
|
|
11,753
|
|
||
Deferred income taxes
|
|
34,743
|
|
|
30,860
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||
Other current assets
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12,905
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|
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9,239
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||
Total current assets
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356,559
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412,884
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Long-term receivables, net
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175,579
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180,856
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||
Property and equipment, net
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235,355
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241,229
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|
||
Goodwill
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697,470
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697,470
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Other intangible assets, net
|
|
779,878
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782,336
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Deferred rent receivable
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90,920
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91,117
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Other non-current assets, net
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41,553
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|
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42,216
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Total assets
|
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$
|
2,377,314
|
|
|
$
|
2,448,108
|
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Liabilities and Stockholders’ Equity
|
|
|
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||
Current liabilities:
|
|
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||
Accounts payable
|
|
$
|
34,781
|
|
|
$
|
41,771
|
|
Gift card liability
|
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119,072
|
|
|
179,760
|
|
||
Accrued advertising
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22,807
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|
|
10,150
|
|
||
Accrued employee compensation and benefits
|
|
10,913
|
|
|
25,722
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|
||
Dividends payable
|
|
16,704
|
|
|
16,635
|
|
||
Accrued interest payable
|
|
3,897
|
|
|
14,126
|
|
||
Income taxes payable
|
|
11,820
|
|
|
—
|
|
||
Current maturities of capital lease and financing obligations
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|
15,125
|
|
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14,852
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|
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Other accrued expenses
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7,425
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10,033
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Total current liabilities
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242,544
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313,049
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Long-term debt
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1,300,000
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1,300,000
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Capital lease obligations, less current maturities
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94,584
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98,119
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Financing obligations, less current maturities
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42,493
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42,524
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Deferred income taxes
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311,827
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|
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319,111
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Deferred rent payable
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75,096
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75,375
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Other non-current liabilities
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22,576
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20,857
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Total liabilities
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2,089,120
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2,169,035
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Commitments and contingencies
|
|
|
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|
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Stockholders’ equity:
|
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|
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Common stock, $0.01 par value, shares: 40,000,000 authorized; March 31, 2015 - 25,219,105 issued, 19,050,897 outstanding; December 31, 2014 - 25,240,055 issued, 18,953,567 outstanding
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252
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252
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Additional paid-in-capital
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283,000
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279,946
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Retained earnings
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325,374
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313,644
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Accumulated other comprehensive loss
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(88
|
)
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(73
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)
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||
Treasury stock, at cost; shares: March 31, 2015 - 6,168,208; December 31, 2014 - 6,286,488
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(320,344
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)
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|
(314,696
|
)
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||
Total stockholders’ equity
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288,194
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279,073
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||
Total liabilities and stockholders’ equity
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$
|
2,377,314
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|
|
$
|
2,448,108
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|
|
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Three Months Ended
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||||||
|
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March 31,
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||||||
|
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2015
|
|
2014
|
||||
Revenues:
|
|
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||||
Franchise and restaurant revenues
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$
|
141,818
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$
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131,795
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Rental revenues
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31,402
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|
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30,753
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Financing revenues
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2,594
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|
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4,653
|
|
||
Total revenues
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|
175,814
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167,201
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|
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Cost of revenues:
|
|
|
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||||
Franchise and restaurant expenses
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52,026
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|
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45,678
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Rental expenses
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23,490
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|
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23,866
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Financing expenses
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12
|
|
|
585
|
|
||
Total cost of revenues
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75,528
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70,129
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Gross profit
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100,286
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97,072
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|
||
General and administrative expenses
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34,230
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|
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34,185
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|
||
Interest expense
|
|
15,646
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|
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24,969
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|
||
Amortization of intangible assets
|
|
2,500
|
|
|
3,071
|
|
||
Closure and impairment charges, net
|
|
1,827
|
|
|
200
|
|
||
Loss on extinguishment of debt
|
|
—
|
|
|
6
|
|
||
(Gain) loss on disposition of assets
|
|
(9
|
)
|
|
927
|
|
||
Income before income tax provision
|
|
46,092
|
|
|
33,714
|
|
||
Income tax provision
|
|
(17,680
|
)
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|
(12,890
|
)
|
||
Net income
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|
28,412
|
|
|
20,824
|
|
||
Other comprehensive (loss) income, net of tax:
|
|
|
|
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||||
Foreign currency translation adjustment
|
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(15
|
)
|
|
(6
|
)
|
||
Total comprehensive income
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|
$
|
28,397
|
|
|
$
|
20,818
|
|
Net income available to common stockholders:
|
|
|
|
|
||||
Net income
|
|
$
|
28,412
|
|
|
$
|
20,824
|
|
Less: Net income allocated to unvested participating restricted stock
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|
(372
|
)
|
|
(343
|
)
|
||
Net income available to common stockholders
|
|
$
|
28,040
|
|
|
$
|
20,481
|
|
Net income available to common stockholders per share:
|
|
|
|
|
||||
Basic
|
|
$
|
1.49
|
|
|
$
|
1.09
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|
Diluted
|
|
$
|
1.47
|
|
|
$
|
1.08
|
|
Weighted average shares outstanding:
|
|
|
|
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||||
Basic
|
|
18,870
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|
|
18,794
|
|
||
Diluted
|
|
19,019
|
|
|
19,054
|
|
||
|
|
|
|
|
||||
Dividends declared per common share
|
|
$
|
0.875
|
|
|
$
|
0.75
|
|
Dividends paid per common share
|
|
$
|
0.875
|
|
|
$
|
0.75
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||
Net income
|
|
$
|
28,412
|
|
|
$
|
20,824
|
|
Adjustments to reconcile net income to cash flows provided by operating activities:
|
|
|
|
|
|
|
||
Depreciation and amortization
|
|
7,815
|
|
|
8,783
|
|
||
Non-cash interest expense
|
|
755
|
|
|
1,642
|
|
||
Deferred income taxes
|
|
(10,378
|
)
|
|
(10,031
|
)
|
||
Non-cash stock-based compensation expense
|
|
2,432
|
|
|
3,143
|
|
||
Tax benefit from stock-based compensation
|
|
4,696
|
|
|
3,524
|
|
||
Excess tax benefit from stock-based compensation
|
|
(4,526
|
)
|
|
(4,455
|
)
|
||
Closure and impairment charges
|
|
1,827
|
|
|
200
|
|
||
(Gain) loss on disposition of assets
|
|
(9
|
)
|
|
927
|
|
||
Other
|
|
31
|
|
|
(396
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||
Accounts receivable, net
|
|
(2,742
|
)
|
|
(9,767
|
)
|
||
Current income tax receivables and payables
|
|
22,341
|
|
|
18,020
|
|
||
Gift card receivables and payables
|
|
5,623
|
|
|
2,982
|
|
||
Prepaid expenses and other current assets
|
|
(1,638
|
)
|
|
(751
|
)
|
||
Accounts payable
|
|
1,034
|
|
|
9,175
|
|
||
Accrued employee compensation and benefits
|
|
(14,810
|
)
|
|
(14,857
|
)
|
||
Other accrued expenses
|
|
267
|
|
|
23,877
|
|
||
Cash flows provided by operating activities
|
|
41,130
|
|
|
52,840
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
|
||
Additions to property and equipment
|
|
(2,617
|
)
|
|
(2,039
|
)
|
||
Proceeds from sale of property and equipment
|
|
—
|
|
|
681
|
|
||
Principal receipts from notes, equipment contracts and other long-term receivables
|
|
4,442
|
|
|
3,415
|
|
||
Other
|
|
(40
|
)
|
|
(55
|
)
|
||
Cash flows provided by investing activities
|
|
1,785
|
|
|
2,002
|
|
||
Cash flows from financing activities:
|
|
|
|
|
|
|||
Repayment of long-term debt
|
|
—
|
|
|
(1,200
|
)
|
||
Principal payments on capital lease and financing obligations
|
|
(3,165
|
)
|
|
(2,695
|
)
|
||
Repurchase of DineEquity common stock
|
|
(15,003
|
)
|
|
(15,002
|
)
|
||
Dividends paid on common stock
|
|
(16,598
|
)
|
|
(14,293
|
)
|
||
Repurchase of restricted stock
|
|
(2,961
|
)
|
|
(1,831
|
)
|
||
Proceeds from stock options exercised
|
|
8,206
|
|
|
6,623
|
|
||
Excess tax benefit from stock-based compensation
|
|
4,526
|
|
|
4,455
|
|
||
Change in restricted cash
|
|
11,561
|
|
|
(3,692
|
)
|
||
Other
|
|
(15
|
)
|
|
—
|
|
||
Cash flows used in financing activities
|
|
(13,449
|
)
|
|
(27,635
|
)
|
||
Net change in cash and cash equivalents
|
|
29,466
|
|
|
27,207
|
|
||
Cash and cash equivalents at beginning of period
|
|
104,004
|
|
|
106,011
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
133,470
|
|
|
$
|
133,218
|
|
Supplemental disclosures:
|
|
|
|
|
|
|
||
Interest paid in cash
|
|
$
|
28,387
|
|
|
$
|
8,901
|
|
Income taxes paid in cash
|
|
$
|
1,172
|
|
|
$
|
2,294
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
|
(In millions)
|
|||||||
Total stock-based compensation expense:
|
|
|
|
|
||||
Equity classified awards expense
|
|
$
|
2.4
|
|
|
$
|
3.2
|
|
Liability classified awards expense (credit)
|
|
0.3
|
|
|
(0.2
|
)
|
||
Total pre-tax stock-based compensation expense
|
|
2.7
|
|
|
3.0
|
|
||
Tax benefit
|
|
(1.0
|
)
|
|
(1.1
|
)
|
||
Total stock-based compensation expense, net of tax
|
|
$
|
1.7
|
|
|
$
|
1.9
|
|
Risk-free interest rate
|
1.56
|
%
|
Weighted average historical volatility
|
37.5
|
%
|
Dividend yield
|
3.10
|
%
|
Expected years until exercise
|
4.50
|
|
Forfeitures
|
11.0
|
%
|
Weighted average fair value of options granted
|
$28.37
|
|
|
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Weighted Average
Remaining
Contractual Term
(in Years)
|
|
Aggregate
Intrinsic
Value (in Millions)
|
|||
Outstanding at December 31, 2014
|
|
618,115
|
|
|
$
|
53.10
|
|
|
|
|
|
Granted
|
|
117,511
|
|
|
113.72
|
|
|
|
|
|
|
Exercised
|
|
(194,648
|
)
|
|
42.16
|
|
|
|
|
|
|
Outstanding at March 31, 2015
|
|
540,978
|
|
|
70.21
|
|
|
7.5
|
|
$20.7
|
|
Vested at March 31, 2015 and Expected to Vest
|
|
499,627
|
|
|
67.67
|
|
|
7.4
|
|
$20.3
|
|
Exercisable at March 31, 2015
|
|
327,100
|
|
|
$
|
51.83
|
|
|
6.4
|
|
$18.0
|
|
|
Restricted
Stock
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Restricted
Stock Units
|
|
Weighted
Average
Grant Date
Fair Value
|
||||||
Outstanding at December 31, 2014
|
|
233,818
|
|
|
$
|
70.14
|
|
|
41,622
|
|
|
$
|
66.92
|
|
Granted
|
|
63,728
|
|
|
113.62
|
|
|
9,695
|
|
|
113.72
|
|
||
Released
|
|
(61,974
|
)
|
|
52.30
|
|
|
(13,567
|
)
|
|
52.19
|
|
||
Forfeited
|
|
(5,413
|
)
|
|
72.97
|
|
|
—
|
|
|
—
|
|
||
Outstanding at March 31, 2015
|
|
230,159
|
|
|
$
|
86.91
|
|
|
37,750
|
|
|
$
|
86.54
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
|
(In millions)
|
|||||||
Revenues from external customers:
|
|
|
|
|
||||
|
|
|
|
|
||||
Franchise operations
|
|
$
|
124.5
|
|
|
$
|
115.5
|
|
Rental operations
|
|
31.4
|
|
|
30.7
|
|
||
Company restaurants
|
|
17.3
|
|
|
16.3
|
|
||
Financing operations
|
|
2.6
|
|
|
4.7
|
|
||
Total
|
|
$
|
175.8
|
|
|
$
|
167.2
|
|
|
|
|
|
|
||||
Interest expense:
|
|
|
|
|
||||
|
|
|
|
|
||||
Rental operations
|
|
$
|
3.5
|
|
|
$
|
3.9
|
|
Company restaurants
|
|
0.1
|
|
|
0.1
|
|
||
Corporate
|
|
15.6
|
|
|
25.0
|
|
||
Total
|
|
$
|
19.2
|
|
|
$
|
29.0
|
|
|
|
|
|
|
||||
Depreciation and amortization:
|
|
|
|
|
||||
|
|
|
|
|
||||
Franchise operations
|
|
$
|
2.6
|
|
|
$
|
2.6
|
|
Rental operations
|
|
3.2
|
|
|
3.4
|
|
||
Company restaurants
|
|
0.2
|
|
|
0.5
|
|
||
Corporate
|
|
1.8
|
|
|
2.3
|
|
||
Total
|
|
$
|
7.8
|
|
|
$
|
8.8
|
|
|
|
|
|
|
||||
Income before income tax provision:
|
|
|
|
|
||||
|
|
|
|
|
||||
Franchise operations
|
|
$
|
89.0
|
|
|
$
|
86.1
|
|
Rental operations
|
|
7.9
|
|
|
6.9
|
|
||
Company restaurants
|
|
0.8
|
|
|
(0.0
|
)
|
||
Financing operations
|
|
2.6
|
|
|
4.1
|
|
||
Corporate
|
|
(54.2
|
)
|
|
(63.4
|
)
|
||
Total
|
|
$
|
46.1
|
|
|
$
|
33.7
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
|
(In thousands, except per share data)
|
|||||||
Numerator for basic and dilutive income per common share:
|
|
|
|
|
||||
Net income
|
|
$
|
28,412
|
|
|
$
|
20,824
|
|
Less: Net income allocated to unvested participating restricted stock
|
|
(372
|
)
|
|
(343
|
)
|
||
Net income available to common stockholders - basic
|
|
28,040
|
|
|
20,481
|
|
||
Effect of unvested participating restricted stock in two-class calculation
|
|
2
|
|
|
2
|
|
||
Net income available to common stockholders - diluted
|
|
$
|
28,042
|
|
|
$
|
20,483
|
|
Denominator:
|
|
|
|
|
||||
Weighted average outstanding shares of common stock - basic
|
|
18,870
|
|
|
18,794
|
|
||
Dilutive effect of stock options
|
|
149
|
|
|
260
|
|
||
Weighted average outstanding shares of common stock - diluted
|
|
19,019
|
|
|
19,054
|
|
||
Net income per common share:
|
|
|
|
|
||||
Basic
|
|
$
|
1.49
|
|
|
$
|
1.09
|
|
Diluted
|
|
$
|
1.47
|
|
|
$
|
1.08
|
|
|
|
March 31, 2015
|
|
December 31, 2014
|
||||||||||||
|
|
Carrying
Amount
|
|
Fair Value
|
|
Carrying
Amount
|
|
Fair Value
|
||||||||
|
|
(In millions)
|
||||||||||||||
Long-term debt
|
|
$
|
1,300.0
|
|
|
$
|
1,347.6
|
|
|
$
|
1,300.0
|
|
|
$
|
1,302.0
|
|
|
|
Three Months Ended
|
|
Favorable
(Unfavorable) Variance |
||||||||
|
|
March 31,
|
|
|||||||||
|
|
2015
|
|
2014
|
|
|||||||
|
|
(In millions, except per share information)
|
||||||||||
Revenue
|
|
$
|
175.8
|
|
|
$
|
167.2
|
|
|
$
|
8.6
|
|
Gross profit
|
|
$
|
100.3
|
|
|
$
|
97.1
|
|
|
$
|
3.2
|
|
General and administrative expenses
|
|
34.2
|
|
|
34.2
|
|
|
(0.0
|
)
|
|||
Interest expense
|
|
15.6
|
|
|
25.0
|
|
|
9.3
|
|
|||
Other expenses, net
(1)
|
|
4.3
|
|
|
4.2
|
|
|
(0.1
|
)
|
|||
Income tax provision
|
|
17.7
|
|
|
12.9
|
|
|
(4.8
|
)
|
|||
Net income
|
|
$
|
28.4
|
|
|
$
|
20.8
|
|
|
$
|
7.6
|
|
Net income per diluted share
|
|
$
|
1.47
|
|
|
$
|
1.08
|
|
|
$
|
0.39
|
|
|
|
Three Months Ended
|
||
|
|
March 31, 2015
|
||
|
|
Applebee's
|
|
IHOP
|
Percentage increase in domestic system-wide same-restaurant sales
|
|
2.9%
|
|
4.8%
|
Net franchise restaurant (reduction) development
(1)
|
|
(3)
|
|
—
|
|
Three Months Ended
|
|
|
||||||||
|
March 31,
|
|
Increase
|
||||||||
|
2015
|
|
2014
|
|
(Decrease)
|
||||||
|
(In millions)
|
||||||||||
Cash flows from operating activities
|
$
|
41.1
|
|
|
$
|
52.8
|
|
|
$
|
(11.7
|
)
|
Free cash flow
|
$
|
41.1
|
|
|
$
|
52.6
|
|
|
$
|
(11.5
|
)
|
|
|
Three Months Ended
|
||||
|
|
March 31,
|
||||
|
|
2015
|
|
2014
|
||
|
(Unaudited)
|
|||||
Applebee's Restaurant Development Activity
|
|
|
|
|
||
Summary - beginning of period:
|
|
|
|
|
||
Franchise
|
|
1,994
|
|
|
1,988
|
|
Company restaurants
|
|
23
|
|
|
23
|
|
Total Applebee's restaurants, beginning of period
|
|
2,017
|
|
|
2,011
|
|
Franchise restaurants opened:
|
|
|
|
|
||
Domestic
|
|
4
|
|
|
8
|
|
International
|
|
2
|
|
|
—
|
|
Total franchise restaurants opened
|
|
6
|
|
|
8
|
|
Franchise restaurants closed:
|
|
|
|
|
||
Domestic
|
|
(4
|
)
|
|
(5
|
)
|
International
(1)
|
|
(5
|
)
|
|
(3
|
)
|
Total franchise restaurants closed
|
|
(9
|
)
|
|
(8
|
)
|
Net franchise restaurant (reduction) development
|
|
(3
|
)
|
|
—
|
|
Summary - end of period:
|
|
|
|
|
||
Franchise
|
|
1,991
|
|
|
1,988
|
|
Company restaurants
|
|
23
|
|
|
23
|
|
Total Applebee's restaurants, end of period
|
|
2,014
|
|
|
2,011
|
|
|
|
Three Months Ended
|
||||
|
|
March 31,
|
||||
|
|
2015
|
|
2014
|
||
|
(Unaudited)
|
|||||
IHOP Restaurant Development Activity
|
|
|
|
|
||
Summary - beginning of period:
|
|
|
|
|
||
Franchise
|
|
1,472
|
|
|
1,439
|
|
Area license
|
|
167
|
|
|
168
|
|
Company
|
|
11
|
|
|
13
|
|
Total IHOP restaurants, beginning of period
|
|
1,650
|
|
|
1,620
|
|
|
|
|
|
|
||
Franchise/area license restaurants opened:
|
|
|
|
|
||
Domestic franchise
|
|
6
|
|
|
9
|
|
Domestic area license
|
|
1
|
|
|
1
|
|
International franchise
|
|
—
|
|
|
4
|
|
Total franchise/area license restaurants opened
|
|
7
|
|
|
14
|
|
Franchise/area license restaurants closed:
|
|
|
|
|
||
Domestic franchise
|
|
(6
|
)
|
|
(5
|
)
|
Domestic area license
|
|
(1
|
)
|
|
—
|
|
International franchise
|
|
—
|
|
|
(1
|
)
|
International area license
|
|
—
|
|
|
(1
|
)
|
Total franchise/area license restaurants closed
|
|
(7
|
)
|
|
(7
|
)
|
Net franchise/area license restaurant development
|
|
—
|
|
|
7
|
|
Refranchised from Company restaurants
|
|
1
|
|
|
3
|
|
Franchise restaurants reacquired by the Company
|
|
(3
|
)
|
|
—
|
|
Net franchise/area license restaurant (reductions) additions
|
|
(2
|
)
|
|
10
|
|
|
|
|
|
|
||
Summary - end of period:
|
|
|
|
|
||
Franchise
|
|
1,470
|
|
|
1,449
|
|
Area license
|
|
167
|
|
|
168
|
|
Company
|
|
13
|
|
|
10
|
|
Total IHOP restaurants, end of period
|
|
1,650
|
|
|
1,627
|
|
|
|
Three Months Ended
|
|||||||
—
|
|
|
March 31,
|
||||||
|
|
2015
|
|
2014
|
|||||
|
(Unaudited)
|
||||||||
Applebee's Restaurant Data
|
|
|
|
|
|
|
|||
|
|
|
|
|
|||||
Effective Restaurants
(a)
|
|
|
|
|
|
|
|||
Franchise
|
|
1,992
|
|
|
1,985
|
|
|||
Company
|
|
23
|
|
|
23
|
|
|||
Total
|
|
2,015
|
|
|
2,008
|
|
|||
|
|
|
|
|
|||||
System-wide
(b)
|
|
|
|
|
|
|
|||
Sales percentage change
(c)
|
|
3.6
|
%
|
|
(0.7
|
)%
|
|||
Domestic same-restaurant sales percentage change
(d)
|
|
2.9
|
%
|
|
(0.5
|
)%
|
|||
|
|
|
|
|
|||||
Franchise
(b)
|
|
|
|
|
|
|
|||
Sales percentage change
(c)
|
|
3.6
|
%
|
|
(0.7
|
)%
|
|||
Domestic same-restaurant sales percentage change
(d)
|
|
2.9
|
%
|
|
(0.5
|
)%
|
|||
Average weekly domestic unit sales (in thousands)
|
|
$
|
51.1
|
|
|
$
|
49.5
|
|
|
|
|
|
|
|
|||||
IHOP Restaurant Data
|
|
|
|
|
|
|
|||
|
|
|
|
|
|||||
Effective Restaurants
(a)
|
|
|
|
|
|
|
|||
Franchise
|
|
1,470
|
|
|
1,439
|
|
|||
Area license
|
|
167
|
|
|
169
|
|
|||
Company
|
|
12
|
|
|
11
|
|
|||
Total
|
|
1,649
|
|
|
1,619
|
|
|||
|
|
|
|
|
|||||
System-wide
(b)
|
|
|
|
|
|
|
|||
Sales percentage change
(c)
|
|
6.2
|
%
|
|
6.5
|
%
|
|||
Domestic same-restaurant sales percentage change
(d)
|
|
4.8
|
%
|
|
3.9
|
%
|
|||
|
|
|
|
|
|||||
Franchise
(b)
|
|
|
|
|
|
|
|||
Sales percentage change
(c)
|
|
6.0
|
%
|
|
6.4
|
%
|
|||
Domestic same-restaurant sales percentage change
(d)
|
|
4.8
|
%
|
|
3.9
|
%
|
|||
Average weekly domestic unit sales (in thousands)
|
|
$
|
37.7
|
|
|
$
|
36.4
|
|
|
|
|
|
|
|
|||||
Area License
(b)
|
|
|
|
|
|
|
|||
Sales percentage change
(c)
|
|
7.0
|
%
|
|
8.0
|
%
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Reported sales (unaudited)
|
(In millions)
|
|||||||
|
|
|
|
|
||||
Applebee's franchise restaurant sales
|
|
$
|
1,226.0
|
|
|
$
|
1,183.1
|
|
IHOP franchise restaurant sales
|
|
$
|
721.2
|
|
|
$
|
680.3
|
|
IHOP area license restaurant sales
|
|
$
|
75.0
|
|
|
$
|
70.1
|
|
REVENUE
|
|
|
|
|
|
|
||||||
|
|
Three Months Ended
|
|
Favorable
(Unfavorable) Variance |
||||||||
|
|
March 31,
|
|
|||||||||
|
|
2015
|
|
2014
|
|
|||||||
|
|
(In millions)
|
|
|
||||||||
Franchise operations
|
|
$
|
124.5
|
|
|
$
|
115.5
|
|
|
$
|
9.0
|
|
Rental operations
|
|
31.4
|
|
|
30.7
|
|
|
0.7
|
|
|||
Company restaurant operations
|
|
17.3
|
|
|
16.3
|
|
|
1.0
|
|
|||
Financing operations
|
|
2.6
|
|
|
4.7
|
|
|
(2.1
|
)
|
|||
Total revenue
|
|
$
|
175.8
|
|
|
$
|
167.2
|
|
|
$
|
8.6
|
|
Change vs. prior period
|
|
5.2
|
%
|
|
|
|
|
GROSS PROFIT (LOSS)
|
|
|
|
|
|
|
||||||
|
|
Three Months Ended
|
|
Favorable
(Unfavorable) Variance
|
||||||||
|
|
March 31,
|
|
|||||||||
|
|
2015
|
|
2014
|
|
|||||||
|
|
(In millions)
|
||||||||||
Franchise operations
|
|
$
|
89.0
|
|
|
$
|
86.1
|
|
|
$
|
2.9
|
|
Rental operations
|
|
7.9
|
|
|
6.9
|
|
|
1.0
|
|
|||
Company restaurant operations
|
|
0.8
|
|
|
(0.0
|
)
|
|
0.8
|
|
|||
Financing operations
|
|
2.6
|
|
|
4.1
|
|
|
(1.5
|
)
|
|||
Total segment profit
|
|
$
|
100.3
|
|
|
$
|
97.1
|
|
|
$
|
3.2
|
|
Change vs. prior period
|
|
3.3
|
%
|
|
|
|
|
|
|
Three Months Ended
|
|
Favorable
(Unfavorable) Variance
|
||||||||
|
|
March 31,
|
|
|||||||||
|
|
2015
|
|
2014
|
|
|||||||
|
(In millions, except number of restaurants)
|
|||||||||||
Effective Franchise Restaurants:
(1)
|
|
|
|
|
|
|
||||||
Applebee’s
|
|
1,992
|
|
|
1,985
|
|
|
7
|
|
|||
IHOP
|
|
1,637
|
|
|
1,608
|
|
|
29
|
|
|||
Franchise Revenues:
|
|
|
|
|
|
|
|
|||||
Applebee’s
|
|
$
|
52.4
|
|
|
$
|
50.7
|
|
|
$
|
1.7
|
|
IHOP
|
|
45.4
|
|
|
43.6
|
|
|
1.8
|
|
|||
IHOP advertising
|
|
26.7
|
|
|
21.2
|
|
|
5.5
|
|
|||
Total franchise revenues
|
|
124.5
|
|
|
115.5
|
|
|
9.0
|
|
|||
Franchise Expenses:
|
|
|
|
|
|
|
||||||
Applebee’s
|
|
1.6
|
|
|
1.4
|
|
|
(0.2
|
)
|
|||
IHOP
|
|
7.2
|
|
|
6.8
|
|
|
(0.4
|
)
|
|||
IHOP advertising
|
|
26.7
|
|
|
21.2
|
|
|
(5.5
|
)
|
|||
Total franchise expenses
|
|
35.5
|
|
|
29.4
|
|
|
(6.1
|
)
|
|||
Franchise Segment Profit:
|
|
|
|
|
|
|
||||||
Applebee’s
|
|
50.8
|
|
|
49.3
|
|
|
1.5
|
|
|||
IHOP
|
|
38.2
|
|
|
36.8
|
|
|
1.4
|
|
|||
Total franchise segment profit
|
|
$
|
89.0
|
|
|
$
|
86.1
|
|
|
$
|
2.9
|
|
Gross profit as % of revenue
(2)
|
|
71.5
|
%
|
|
74.6
|
%
|
|
|
|
|
Three Months Ended
|
|
Favorable
(Unfavorable) Variance |
||||||||
|
|
March 31,
|
|
|||||||||
|
|
2015
|
|
2014
|
|
|||||||
|
|
(In millions)
|
||||||||||
Rental revenues
|
|
$
|
31.4
|
|
|
$
|
30.7
|
|
|
$
|
0.7
|
|
Rental expenses
|
|
23.5
|
|
|
23.8
|
|
|
0.3
|
|
|||
Rental operations segment profit
|
|
$
|
7.9
|
|
|
$
|
6.9
|
|
|
$
|
1.0
|
|
Gross profit as % of revenue
(1)
|
|
25.2
|
%
|
|
22.4
|
%
|
|
|
|
|
Three Months Ended
|
|
Favorable
(Unfavorable) Variance |
||||||||
|
|
March 31,
|
|
|||||||||
|
|
2015
|
|
2014
|
|
|||||||
|
|
(In millions)
|
||||||||||
Financing revenues
|
|
$
|
2.6
|
|
|
$
|
4.7
|
|
|
$
|
(2.1
|
)
|
Financing expenses
|
|
0.0
|
|
|
0.6
|
|
|
0.6
|
|
|||
Financing operations segment profit
|
|
$
|
2.6
|
|
|
$
|
4.1
|
|
|
$
|
(1.5
|
)
|
Gross profit as % of revenue
(1)
|
|
99.5
|
%
|
|
87.4
|
%
|
|
|
|
|
Three Months Ended
|
|
Favorable
(Unfavorable) Variance |
||||||||
|
|
March 31,
|
|
|||||||||
|
|
2015
|
|
2014
|
|
|||||||
|
|
(In millions)
|
||||||||||
General and administrative expenses
|
|
$
|
34.2
|
|
|
$
|
34.2
|
|
|
$
|
(0.0
|
)
|
Interest expense
|
|
15.6
|
|
|
25.0
|
|
|
9.3
|
|
|||
Amortization of intangible assets
|
|
2.5
|
|
|
3.1
|
|
|
0.6
|
|
|||
Closure and impairment charges
|
|
1.8
|
|
|
0.2
|
|
|
(1.6
|
)
|
|||
(Gain) loss on disposition of assets
|
|
(0.0
|
)
|
|
0.9
|
|
|
0.9
|
|
|||
Income tax provision
|
|
17.7
|
|
|
12.9
|
|
|
(4.8
|
)
|
|
Three Months Ended
|
|
|
||||||||
|
March 31,
|
|
|
||||||||
|
2015
|
|
2014
|
|
Variance
|
||||||
|
(In millions)
|
||||||||||
Net cash provided by operating activities
|
$
|
41.1
|
|
|
$
|
52.8
|
|
|
$
|
(11.7
|
)
|
Net cash provided by investing activities
|
1.8
|
|
|
2.0
|
|
|
(0.2
|
)
|
|||
Net cash used in financing activities
|
(13.4
|
)
|
|
(27.6
|
)
|
|
14.2
|
|
|||
Net increase in cash and cash equivalents
|
$
|
29.5
|
|
|
$
|
27.2
|
|
|
$
|
2.3
|
|
|
Three Months Ended
|
|
|
||||||||
|
March 31,
|
|
|
||||||||
|
2015
|
|
2014
|
|
Variance
|
||||||
|
(In millions)
|
||||||||||
Cash flows provided by operating activities
|
$
|
41.1
|
|
|
$
|
52.8
|
|
|
$
|
(11.7
|
)
|
Receipts from notes and equipment contracts receivable
|
2.6
|
|
|
1.8
|
|
|
0.8
|
|
|||
Additions to property and equipment
|
(2.6
|
)
|
|
(2.0
|
)
|
|
(0.6
|
)
|
|||
Free cash flow
|
$
|
41.1
|
|
|
$
|
52.6
|
|
|
$
|
(11.5
|
)
|
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 (c)
|
|
Approximate dollar value of
shares that may yet be
purchased under the
plans or programs (c)
|
||
December 29, 2014 – January 25, 2015
(a)
|
|
2,650
|
|
|
$106.07
|
|
—
|
|
|
$98,000,000
|
January 26, 2015 – February 22, 2015
|
|
—
|
|
|
—
|
|
—
|
|
|
$98,000,000
|
February 23, 2015 – March 29, 2015
(b)
|
|
164,785
|
|
|
$107.30
|
|
140,096
|
|
|
$83,000,000
|
Total
|
|
167,435
|
|
|
$107.29
|
|
140,096
|
|
|
$83,000,000
|
**
|
The certifications attached as Exhibits 32.1 and 32.2 accompany this Quarterly Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
|
***
|
Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
|
†
|
A contract, compensatory plan or arrangement in which directors or executive officers are eligible to participate.
|
|
|
DineEquity, Inc.
(Registrant)
|
|
|
|
|
|
|
|
|
|
Dated:
|
April 30, 2015
|
By:
|
/s/ Julia A. Stewart
|
|
|
|
Julia A. Stewart
Chairman and Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
Dated:
|
April 30, 2015
|
By:
|
/s/ Thomas W. Emrey
|
|
|
|
Thomas W. Emrey
Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
|
|
|
|
|
Dated:
|
April 30, 2015
|
By:
|
/s/ Greggory Kalvin
|
|
|
|
Greggory Kalvin
Senior Vice President, Corporate Controller
(Principal Accounting Officer)
|
“(a)
|
Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either:
|
(1)
|
Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or
|
(2)
|
Result from any work performed by the employee for the employer.
|
(b)
|
To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.”
|
a.
|
If to the Corporation:
|
|
|
|
DineEquity, Inc.
|
|
450 N. Brand Boulevard
|
|
Glendale, CA 91410
|
|
Attn: General Counsel
|
|
|
b.
|
If to the Executive:
|
|
Darren M. Rebelez
4744 Byron Circle
Irving, TX 75038
|
EXECUTIVE:
|
DineEquity, Inc.:
|
||
|
|
||
|
|
||
By:
/s/ Darren M. Rebelez
|
|
By:
|
/s/ John B. Jakubek
|
Darren M. Rebelez
|
John B. Jakubek
|
||
|
|
||
|
|
|
|
|
|
|
|
(a)
|
Executive’s rights under this Agreement;
|
(a)
|
Executive’s rights as a shareholder and option holder in the Corporation arising after the date hereof;
|
(b)
|
any claims for unemployment compensation or any state disability insurance benefits pursuant to the terms of applicable state law;
|
(c)
|
claims to continued participation in certain of the Corporation’s group benefit plans pursuant to the terms and conditions of the federal law known as COBRA or the comparable California law known as Cal-COBRA;
|
(d)
|
any rights vested prior to the date of Executive’s termination of employment to benefits under any Corporation-sponsored retirement or welfare benefit plan;
|
(e)
|
Executive’s rights, if any, to indemnity and/or advancement of expenses pursuant to applicable state law, the Corporation’s articles, bylaws or other corporate governance documents, that certain Indemnification Agreement effective as of May 4, 2015 and/or to the protections of any director’ and officers’ liability policies of the Corporation or any of its affiliates; and
|
(f)
|
any other right that may not be released by private agreement.
|
a.
|
(collectively, the
“Executive Unreleased Claims”
).
|
Leverage Ratio Calculation:
|
|
||
Indebtedness, net
(1)
|
$
|
1,296,273
|
|
Covenant Adjusted EBITDA
(1)
|
278,933
|
|
|
Leverage Ratio
|
4.65
|
|
|
Debt Service Coverage Ratio (DSCR) Calculation:
|
|
||
Net Cash Flow
(1)
|
$
|
280,827
|
|
Debt Service
(1)
|
56,785
|
|
|
DSCR
|
4.95
|
|
(1)
|
Definitions of all components used in calculating the above ratios are found in the Base Indenture and the related Series 2014-1 Supplement to the Base Indenture, dated September 30, 2014, filed as Exhibits 4.1 and 4.2, respectively, to our Current Report on Form 8-K filed on October 3, 2014.
|
Dated:
|
April 30, 2015
|
/s/ Julia A. Stewart
|
|
|
Julia A. Stewart
Chairman and Chief Executive Officer
(Principal Executive Officer)
|
Dated:
|
April 30, 2015
|
/s/ Thomas W. Emrey
|
|
|
Thomas W. Emrey
Chief Financial Officer
(Principal Financial Officer) |
Dated:
|
April 30, 2015
|
/s/ Julia A. Stewart
|
|
|
Julia A. Stewart
Chairman and Chief Executive Officer
(Principal Executive Officer)
|
Dated:
|
April 30, 2015
|
/s/ Thomas W. Emrey
|
|
|
Thomas W. Emrey
Chief Financial Officer
(Principal Financial Officer)
|