10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________________________ 

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the quarterly period ended September 30, 2013

 OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from                  to                

Commission File Number 001-15283

 ________________________________________________________________

DineEquity, Inc.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	95-3038279 (I.R.S. Employer Identification No.)
450 North Brand Boulevard, Glendale, California	91203-1903
(Address of principal executive offices)	(Zip Code)

(818) 240-6055

(Registrant’s telephone number, including area code)

 ______________________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x  No o

 Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x  No o

 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x	Accelerated filer o
Non-accelerated filer o	Smaller reporting company o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o  No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding as of October 25, 2013
Common Stock, $0.01 par value	19,026,864

DineEquity, Inc. and Subsidiaries

Index

		Page
PART I.	FINANCIAL INFORMATION	2
	Item 1—Financial Statements	2
	Consolidated Balance Sheets—September 30, 2013 (unaudited) and December 31, 2012	2
	Consolidated Statements of Comprehensive Income (unaudited)—Three and Nine Months Ended September 30, 2013 and 2012	3
	Consolidated Statements of Cash Flows (unaudited)—Nine Months Ended September 30, 2013 and 2012	4
	Notes to Consolidated Financial Statements	5
	Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
	Item 3—Quantitative and Qualitative Disclosures about Market Risk	38
	Item 4—Controls and Procedures	38
PART II.	OTHER INFORMATION	39
	Item 1—Legal Proceedings	39
	Item 1A—Risk Factors	39
	Item 2—Unregistered Sales of Equity Securities and Use of Proceeds	39
	Item 3—Defaults Upon Senior Securities	39
	Item 4—Mine Safety Disclosures	39
	Item 5—Other Information	39
	Item 6—Exhibits	40
	Signatures	41

1

PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements.

DineEquity, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share and per share amounts)

	September 30, 2013			December 31, 2012
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	95,535		$	64,537
Receivables, net	87,276			128,610
Prepaid income taxes	3,619			16,080
Prepaid gift cards	42,840			50,242
Deferred income taxes	24,811			21,772
Other current assets	7,683			13,214
Total current assets	261,764			294,455
Long-term receivables	201,080			212,269
Property and equipment, net	281,432			294,375
Goodwill	697,470			697,470
Other intangible assets, net	797,061			806,093
Other assets, net	108,909			110,738
Total assets	$	2,347,716		$	2,415,400
Liabilities and Stockholders’ Equity
Current liabilities:
Current maturities of long-term debt	$	4,720		$	7,420
Accounts payable	33,339			30,751
Gift card liability	93,198			161,689
Accrued employee compensation and benefits	18,063			22,435
Accrued interest payable	35,825			13,236
Current maturities of capital lease and financing obligations	11,974			10,878
Other accrued expenses	20,201			21,351
Total current liabilities	217,320			267,760
Long-term debt, less current maturities	1,204,998			1,202,063
Capital lease obligations, less current maturities	115,351			124,375
Financing obligations, less current maturities	51,930			52,049
Deferred income taxes	349,202			362,171
Other liabilities	98,919			98,177
Total liabilities	2,037,720			2,106,595
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value, shares: 40,000,000 authorized; September 30, 2013 - 25,308,295 issued, 19,029,164 outstanding; December 31, 2012 - 25,362,946 issued, 19,197,899 outstanding	253			254
Additional paid-in-capital	270,799			264,342
Retained earnings	332,740			322,045
Accumulated other comprehensive loss	(157		)	(152		)
Treasury stock, at cost; shares: September 30, 2013 - 6,279,131; December 31, 2012 - 6,165,047	(293,639		)	(277,684		)
Total stockholders’ equity	309,996			308,805
Total liabilities and stockholders’ equity	$	2,347,716		$	2,415,400

 See the accompanying Notes to Consolidated Financial Statements.

2

DineEquity, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Segment Revenues:
Franchise and restaurant revenues	$	127,137		$	182,246		$	379,619		$	587,801
Rental revenues	30,990			30,920			92,724			92,096
Financing revenues	3,156			3,152			10,223			11,394
Total segment revenues	161,283			216,318			482,566			691,291
Segment Expenses:
Franchise and restaurant expenses	44,091			95,689			130,875			313,424
Rental expenses	24,149			24,237			72,953			73,075
Financing expenses	—			15			245			1,586
Total segment expenses	68,240			119,941			204,073			388,085
Gross segment profit	93,043			96,377			278,493			303,206
General and administrative expenses	35,331			48,737			105,004			125,608
Interest expense	24,979			28,896			75,230			88,767
Amortization of intangible assets	3,072			3,072			9,212			9,222
Closure and impairment charges	(392		)	420			770			1,264
Loss on extinguishment of debt	—			2,306			36			4,917
Debt modification costs	—			—			1,296			—
Gain on disposition of assets	(72		)	(73,650		)	(326		)	(89,642		)
Income before income taxes	30,125			86,596			87,271			163,070
Income tax provision	(11,395		)	(26,023		)	(33,365		)	(54,215		)
Net income	18,730			60,573			53,906			108,855
Other comprehensive (loss) income, net of tax:
Adjustment to unrealized loss on available-for-sale investments	—			—			—			140
Foreign currency translation adjustment	3			5			(5		)	4
Total comprehensive income	$	18,733		$	60,578		$	53,901		$	108,999
Net income available to common stockholders:
Net income	$	18,730		$	60,573		$	53,906		$	108,855
Less: Net income allocated to unvested participating restricted stock	(296		)	(1,187		)	(925		)	(2,477		)
Less: Accretion of Series B Convertible Preferred Stock	—			(688		)	—			(2,033		)
Net income available to common stockholders	$	18,434		$	58,698		$	52,981		$	104,345
Net income available to common stockholders per share:
Basic	$	0.98		$	3.26		$	2.80		$	5.84
Diluted	$	0.97		$	3.14		$	2.76		$	5.66
Weighted average shares outstanding:
Basic	18,831			18,006			18,898			17,859
Diluted	19,085			18,924			19,166			18,801
Dividends declared per common share	$	0.75		$	—		$	2.25		$	—
Dividends paid per common share	$	0.75		$	—		$	2.25		$	—

See the accompanying Notes to Consolidated Financial Statements.

3

DineEquity, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Nine Months Ended
	September 30,
	2013			2012
Cash flows from operating activities:
Net income	$	53,906		$	108,855
Adjustments to reconcile net income to cash flows provided by operating activities:
Depreciation and amortization	26,516			30,756
Non-cash interest expense	4,635			4,547
Loss on extinguishment of debt	36			4,917
Closure and impairment charges	1,166			991
Deferred income taxes	(16,007		)	(20,361		)
Non-cash stock-based compensation expense	7,081			8,799
Tax benefit from stock-based compensation	3,001			6,334
Excess tax benefit from share-based compensation	(1,985		)	(4,757		)
Gain on disposition of assets	(326		)	(89,642		)
Other	791			(1,768		)
Changes in operating assets and liabilities:
Receivables	41,698			41,422
Current income tax receivables and payables	7,232			12,512
Other current assets	16,054			7,414
Accounts payable	2,650			2,080
Accrued employee compensation and benefits	(4,372		)	(6,490		)
Gift card liability	(68,493		)	(62,841		)
Other accrued expenses	29,231			25,298
Cash flows provided by operating activities	102,814			68,066
Cash flows from investing activities:
Additions to property and equipment	(4,547		)	(13,477		)
Proceeds from sale of property and equipment and assets held for sale	—			137,449
Principal receipts from notes, equipment contracts and other long-term receivables	10,254			10,276
Other	282			964
Cash flows provided by investing activities	5,989			135,212
Cash flows from financing activities:
Borrowings under revolving credit facilities	—			50,000
Repayments under revolving credit facilities	—			(50,000		)
Repayment of long-term debt (including premiums)	(2,400		)	(184,237		)
Payment of debt modification costs	(1,296		)	—
Principal payments on capital lease and financing obligations	(7,515		)	(8,246		)
Repurchase of DineEquity common stock	(24,663		)	—
Dividends paid on common stock	(43,170		)	—
Repurchase of restricted stock	(3,209		)	(1,690		)
Proceeds from stock options exercised	5,585			5,443
Excess tax benefit from share-based compensation	1,985			4,757
Change in restricted cash	(3,122		)	(8,158		)
Cash flows used in financing activities	(77,805		)	(192,131		)
Net change in cash and cash equivalents	30,998			11,147
Cash and cash equivalents at beginning of period	64,537			60,691
Cash and cash equivalents at end of period	$	95,535		$	71,838
Supplemental disclosures:
Interest paid in cash	$	58,751		$	77,758
Income taxes paid in cash	$	39,084		$	58,339

See the accompanying Notes to Consolidated Financial Statements.

4

DineEquity, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

1. General

The accompanying unaudited consolidated financial statements of DineEquity, Inc. (the “Company”) have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The operating results for the nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the twelve months ending December 31, 2013.

The consolidated balance sheet at December 31, 2012 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.

These consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

2. Basis of Presentation

The Company’s fiscal quarters end on the Sunday closest to the last day of each quarter. For convenience, the fiscal quarters of each year are reported as ending on March 31, June 30, September 30 and December 31. The first, second and third quarters of fiscal 2013 ended on March 31, 2013, June 30, 2013 and September 29, 2013, respectively; the first, second and third quarters of fiscal 2012 ended on April 1, 2012, July 1, 2012 and September 30, 2012, respectively.

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries that are consolidated in accordance with U.S. GAAP. All intercompany balances and transactions have been eliminated.

The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make assumptions and estimates that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to provisions for doubtful accounts, legal contingencies, income taxes, long-lived assets, goodwill and intangible assets. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.

3. Accounting Policies

Accounting Standards Adopted in the Current Fiscal Year

In July 2012, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2012-02, Intangibles - Goodwill and Other: Testing Indefinite Lived Intangibles for Impairment (“ASU 2012-02”). ASU 2012-02 allows an entity the option to first assess qualitative factors in determining whether it is necessary to perform a quantitative impairment test on indefinite-lived intangibles. An entity electing to perform a qualitative assessment is no longer required to calculate the fair value of an indefinite-lived intangible asset unless the entity determines, based on the qualitative assessment, that it is more likely than not that the asset is impaired. The adoption of ASU 2012-02 as of January 1, 2013 did not have any impact on the Company’s consolidated financial statements.

In February 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). The amendments in ASU 2013-02 do not change the current requirements for reporting net income or other comprehensive income. However, the amendments require disclosure of amounts reclassified out of accumulated other comprehensive income in their entirety, by component, on the face of the statement of operations or in the notes thereto. Amounts that are not required to be reclassified in their entirety to net income must be cross-referenced to other disclosures that provide additional detail. The adoption of ASU 2013-02 as of January 1, 2013 did not have any impact on the Company's consolidated financial statements or disclosures because the Company had no material amount of reclassifications.

5

DineEquity, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Newly Issued Accounting Standards Not Yet Adopted

In February 2013, the FASB issued ASU No. 2013-04, Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date (“ASU 2013-04”). The amendments in ASU 2013-04 require an entity to measure obligations resulting from joint and several liability arrangements as the amount the entity agreed to pay on the basis of the arrangement among its co-obligors plus the amount an entity expects to pay on behalf of co-obligors. ASU 2013-04 also requires an entity to disclose the nature, amount and other information about each obligation or group of similar obligations. The Company will be required to adopt ASU 2013-04 effective January 1, 2014, and is currently evaluating the potential impact, if any, on its consolidated financial statements.

In July 2013, the FASB issued ASU No. 2013-11, Income Taxes - Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”). ASU 2013-11 provides guidance on the financial statement presentation of an unrecognized tax benefit, as either a reduction of a deferred tax asset or as a liability, when a net operating loss carryforward, similar tax loss, or a tax credit carryforward exists. ASU 2013-11 may be applied on a retrospective basis, and early adoption is permitted. The Company will be required to adopt ASU 2013-11 effective January 1, 2014, and is currently evaluating the potential impact, if any, on its consolidated financial statements.

The Company reviewed all other newly issued accounting pronouncements and concluded that they either are not applicable to the Company or are not expected to have a material effect on the Company's consolidated financial statements as a result of future adoption.

4. Long-Term Debt

Long-term debt consisted of the following components:
	September 30, 2013			December 31, 2012
	(In millions)
Senior Secured Credit Facility, due October 2017, at a variable interest rate of 3.75% as of September 30, 2013 and 4.25% as of December 31, 2012	$	469.6		$	472.0
Senior Notes due October 2018, at a fixed rate of 9.5%	760.8			760.8
Discount	(20.7		)	(23.3		)
Total long-term debt	1,209.7			1,209.5
Less current maturities	(4.7		)	(7.4		)
Long-term debt, less current maturities	$	1,205.0		$	1,202.1

For a description of the respective instruments, refer to Note 8 of the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

Debt Modification Costs

On February 4, 2013, the Company entered into Amendment No. 2 (“Amendment No. 2”) to the Credit Agreement dated October 8, 2010. For a description of Amendment No. 2, refer to Note 23 of the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. Fees of $1.3 million paid to third parties in connection with Amendment No. 2 were included as “Debt modification costs” in the Consolidated Statement of Comprehensive Income for the nine months ended September 30, 2013.

6

DineEquity, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Loss on Extinguishment of Debt

During the nine months ended September 30, 2013 and 2012, the Company recognized a loss on extinguishment of debt as follows:

Quarter Ended	Instrument Repaid/Retired	Face Amount Repaid/Retired		Cash Paid		Loss(1)
		(In millions)
March 2013	Term Loans	$	1.2	$	1.2	$	0.0
June 2013	Term Loans	1.2		1.2		0.0
	Total 2013	$	2.4	$	2.4	$	0.0
March 2012	Term Loans	$	70.5	$	70.5	$	1.9
March 2012	Senior Notes	5.0		5.5		0.7
September 2012	Term Loans	108.2		108.2		2.3
	Total 2012	$	183.7	$	184.2	$	4.9

⁽¹⁾ Including write-off of the discount and deferred financing costs related to the debt retired.

Compliance with Covenants and Restrictions

The Company was in compliance with all the covenants and restrictions related to its Senior Secured Credit Facility and Senior Notes as of September 30, 2013.

5. Income Taxes

The effective tax rate was 38.2% for the nine months ended September 30, 2013 as compared to 33.2% for the nine months ended September 30, 2012. The effective tax rate in 2012 was lower primarily due to a discrete $6.3 million state benefit related to a reduction in state deferred taxes as a result of the refranchising of Applebee's company-operated restaurants and sale of related restaurant assets that was completed in 2012. Additionally, income tax credits, primarily FICA tip and other compensation-related tax credits, were higher in 2012 because Applebee’s had more company-operated restaurants during that year prior to completion of the refranchisings.

 The total gross unrecognized tax benefit as of September 30, 2013 and December 31, 2012 was $2.0 million and $6.7 million, respectively, excluding interest, penalties and related tax benefits. The decrease of $4.7 million is primarily related to recent settlements with taxing authorities. The Company estimates the unrecognized tax benefits may decrease over the upcoming 12 months by an amount up to $0.7 million related to settlements with taxing authorities and the lapse of statutes of limitations. For the remaining liability, due to the uncertainties related to these tax matters, the Company is unable to make a reasonably reliable estimate when cash settlement with a taxing authority will occur.

As of September 30, 2013, the accrued interest and penalties were $2.6 million and $0.1 million, respectively, excluding any related income tax benefits. As of December 31, 2012, accrued interest and penalties were $1.4 million and $0.2 million, respectively, excluding any related income tax benefits. The increase of $1.2 million of accrued interest is primarily related to an increase in unrecognized tax benefits as a result of recent audits by taxing authorities. The Company recognizes interest accrued related to unrecognized tax benefits and penalties as a component of the income tax provision recognized in the Consolidated Statements of Comprehensive Income.

The Company files federal income tax returns and the Company or one of its subsidiaries file income tax returns in various state and foreign jurisdictions. With few exceptions, the Company is no longer subject to federal, state or non-United States tax examinations by tax authorities for years before 2008. In the second quarter of 2013, the Internal Revenue Service (“IRS”) issued a Revenue Agent’s Report (“RAR”) related to its examination of the Company’s U.S federal income tax return for the tax years 2008 to 2010. The Company disagrees with a portion of the proposed assessments and has contested them through the IRS administrative appeals procedures. We anticipate the appeals process to continue into 2014. The Company continues to believe that adequate reserves have been provided relating to all matters contained in the tax periods open to examination.

7

DineEquity, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

6. Stock-Based Compensation

From time to time, the Company has granted nonqualified stock options, restricted stock, cash-settled and stock-settled restricted stock units and performance units to officers, other employees and non-employee directors of the Company. Currently, the Company is authorized to grant nonqualified stock options, stock appreciation rights, restricted stock, cash-settled and stock-settled restricted stock units and performance units to officers, other employees and nonemployee directors under the DineEquity, Inc. 2011 Stock Incentive Plan (the “2011 Plan”). The 2011 Plan was approved by stockholders on May 17, 2011 and permits the issuance of up to 1,500,000 shares of the Company’s common stock. The 2011 Plan will expire in May 2021.

The nonqualified stock options generally vest ratably over a three-year period in one-third increments and have a term of ten years from the grant date. Option exercise prices equal the closing price of the Company’s common stock on the New York Stock Exchange on the date of grant. Restricted stock and restricted stock units are issued at no cost to the holder and vest over terms determined by the Compensation Committee of the Company’s Board of Directors, generally three years from the grant date.

The following table summarizes the components of the Company’s stock-based compensation expense included in general and administrative expenses in the consolidated financial statements:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
	(In millions)
Total stock-based compensation:
Equity classified award expense	$	1.2		$	2.2		$	7.1		$	8.8
Liability classified award (credit) expense	(0.8		)	1.9			(0.9		)	2.4
Total pretax stock-based compensation expense	0.4			4.1			6.2			11.2
Tax benefit	(0.2		)	(1.6		)	(2.4		)	(4.3		)
Total stock-based compensation expense, net of tax	$	0.2		$	2.5		$	3.8		$	6.9

As of September 30, 2013, total unrecognized compensation cost of $9.1 million related to restricted stock and restricted stock units and $5.1 million related to stock options is expected to be recognized over a weighted average period of 1.8 years for restricted stock and restricted stock units and 1.7 years for stock options.

Equity Classified Awards - Stock Options

The estimated fair value of the stock options granted during the nine months ended September 30, 2013 was calculated using a Black-Scholes option pricing model. The following summarizes the assumptions used in the Black-Scholes model:

Risk-free interest rate	0.78	%
Weighted average historical volatility	83.4	%
Dividend yield	4.15	%
Expected years until exercise	4.6
Forfeitures	11.0	%
Weighted average fair value of options granted	$36.00

8

DineEquity, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Option balances as of September 30, 2013 and activity related to stock options for the nine months ended September 30, 2013 were as follows:

	Shares		Weighted Average Exercise Price	Weighted Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value
Outstanding at December 31, 2012	958,246		$39.67
Granted	81,328		$72.28
Exercised	(153,454	)	$36.40
Forfeited	(39,243	)	$55.78
Outstanding at September 30, 2013	846,877		$42.65	6.24	$	21,878,000
Vested at September 30, 2013 and Expected to Vest	824,671		$42.14	6.17	$	21,683,000
Exercisable at September 30, 2013	637,782		$37.31	5.49	$	19,650,000

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the closing stock price of the Company’s common stock on the last trading day of the third quarter of 2013 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on September 30, 2013. The aggregate intrinsic value will change based on the fair market value of the Company’s common stock and the number of in-the-money options.

Equity Classified Awards - Restricted Stock and Restricted Stock Units

Outstanding balances as of September 30, 2013 and activity related to restricted stock and restricted stock units for the nine months ended September 30, 2013 were as follows:

	Restricted Stock		Weighted Average Grant Date Fair Value	Restricted Stock Units		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2012	346,563		$44.74	33,242		$41.19
Granted	88,606		$72.16	15,387		$72.04
Conversion of cash-settled restricted stock units	—		—	37,184		$72.28
Released	(112,625	)	$30.09	(39,000	)	$54.66
Forfeited	(53,551	)	$54.76	—		—
Outstanding at September 30, 2013	268,993		$57.84	46,813		$64.57

9

DineEquity, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Liability Classified Awards - Restricted Stock Units

	Restricted Stock Units		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2012	37,184		$66.13
Conversion to stock-settled restricted stock units	(37,184	)	$72.28
Outstanding at September 30, 2013	—		—

The Company previously had issued shares of cash-settled restricted stock units to members of the Board of Directors. Originally these instruments were expected to be settled in cash and were recorded as liabilities based on the closing price of the Company’s common stock as of each period end. In February 2013, it was determined that, pursuant to the terms of the Plan, these restricted stock units would be settled in shares of common stock and all outstanding restricted stock units were converted to equity classified awards. For the nine months ended September 30, 2013 and 2012, $0.3 million and $0.6 million, respectively, were included in pretax stock-based compensation expense for the cash-settled restricted stock units. At December 31, 2012, liabilities of $2.4 million were included as other accrued expenses in the consolidated balance sheet.

Liability Classified Awards - Long-Term Incentive Awards

The Company has granted cash long-term incentive awards (“LTIP awards”) to certain employees. Annual LTIP awards vest over a three-year period and are determined using a multiplier from 0% to 200% of the target award based on the total shareholder return of DineEquity, Inc. common stock compared to the total shareholder returns of a peer group of companies. Although LTIP awards are both denominated and paid only in cash, because the multiplier is based on the price of the Company's common stock, the awards are considered stock-based compensation in accordance with U.S. GAAP and are liability classified awards. For the nine months ended September 30, 2013 and 2012, a credit of $1.2 million and an expense of $1.8 million, respectively, were included in total stock-based compensation expense related to the LTIP awards. At September 30, 2013 and December 31, 2012, liabilities of $1.1 million and $4.5 million, respectively, related to LTIP awards were included as accrued employee compensation and benefits in the consolidated balance sheets.

7. Segments

The Company has four reporting segments: franchise operations, company restaurant operations, rental operations and financing operations.

As of September 30, 2013, the franchise operations segment consisted of (i) 1,987 restaurants operated by Applebee’s franchisees in the United States, one U.S. territory and 17 countries outside the United States; and (ii) 1,589 restaurants operated by IHOP franchisees and area licensees in the United States, two U.S. territories and seven countries outside the United States. Franchise operations revenue consists primarily of franchise royalty revenues, sales of proprietary products to franchisees (primarily pancake and waffle dry mixes for the IHOP restaurants), IHOP franchise advertising fees and the portion of the franchise fees allocated to IHOP and Applebee's intellectual property.  Franchise operations expenses include IHOP advertising expenses, the cost of IHOP proprietary products and IHOP and Applebee's pre-opening training expenses and other franchise-related costs.

At September 30, 2013, the company restaurant operations segment consisted of 23 Applebee’s company-operated restaurants, 10 IHOP company-operated restaurants and three IHOP restaurants reacquired from franchisees and operated by IHOP on a temporary basis until refranchised, all of which are located in the United States. Company restaurant sales are retail sales at company-operated restaurants. Company restaurant expenses are operating expenses at company-operated restaurants and include food, labor, utilities, rent and other restaurant operating costs.

10

DineEquity, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Rental operations revenue includes revenue from operating leases and interest income from direct financing leases. Rental operations expenses are costs of operating leases and interest expense from capital leases on franchisee-operated restaurants. 

Financing operations revenue primarily consists of interest income from the financing of franchise fees and equipment leases and sales of equipment associated with refranchised IHOP restaurants. Financing expenses are primarily the cost of restaurant equipment associated with refranchised IHOP restaurants.

Information on segments for the three and nine months ended September 30, 2013 and 2012 was as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
	(In millions)
Revenues from External Customers
Franchise operations	$	111.7		$	102.6		$	331.6		$	313.5
Company restaurants	15.4			79.6			48.1			274.3
Rental operations	31.0			30.9			92.7			92.1
Financing operations	3.2			3.2			10.2			11.4
Total	$	161.3		$	216.3		$	482.6		$	691.3
Interest Expense
Company restaurants	$	0.1		$	0.1		$	0.3		$	0.3
Rental operations	3.8			4.2			12.0			12.8
Corporate	25.0			28.9			75.2			88.8
Total	$	28.9		$	33.2		$	87.5		$	101.9
Depreciation and amortization
Franchise operations	$	2.7		$	2.5		$	8.1		$	7.4
Company restaurants	0.5			1.6			1.6			6.4
Rental operations	3.3			3.4			10.1			10.3
Corporate	2.4			2.3			6.7			6.7
Total	$	8.9		$	9.8		$	26.5		$	30.8
Income (loss) before income taxes
Franchise operations	$	83.3		$	75.5		$	248.8		$	232.4
Company restaurants	(0.3		)	11.0			(0.1		)	42.0
Rental operations	6.8			6.7			19.8			19.0
Financing operations	3.2			3.2			10.0			9.8
Corporate	(62.9		)	(9.8		)	(191.2		)	(140.1		)
Total	$	30.1		$	86.6		$	87.3		$	163.1

11

DineEquity, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

8. Net Income per Share

The computation of the Company's basic and diluted net income per share for the three and nine months ended September 30, 2013 and 2012 was as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
	(In thousands, except per share data)
Numerator for basic and dilutive income per common share:
Net income	$	18,730		$	60,573		$	53,906		$	108,855
Less: Net income allocated to unvested participating restricted stock	(296		)	(1,187		)	(925		)	(2,477		)
Less: Accretion of Series B Convertible Preferred Stock	—			(688		)	—			(2,033		)
Net income available to common stockholders - basic	18,434			58,698			52,981			104,345
Effect of unvested participating restricted stock in two-class calculation	1			57			3			121
Accretion of Series B Convertible Preferred Stock	—			688			—			2,033
Net income available to common stockholders - diluted	$	18,435		$	59,443		$	52,984		$	106,499
Denominator:
Weighted average outstanding shares of common stock - basic	18,831			18,006			18,898			17,859
Dilutive effect of:
Stock options	254			246			268			270
Series B Convertible Preferred Stock	—			672			—			672
Weighted average outstanding shares of common stock - diluted	19,085			18,924			19,166			18,801
Net income per common share:
Basic	$	0.98		$	3.26		$	2.80		$	5.84
Diluted	$	0.97		$	3.14		$	2.76		$	5.66

All Series B Convertible Preferred Stock was converted into DineEquity, Inc. common stock in November, 2012.

9. Fair Value Measurements

The Company does not have a material amount of financial instruments, non-financial assets or non-financial liabilities that are required under U.S. GAAP to be measured on a recurring basis at fair value. The Company has elected to not use the fair value measurement option, as permitted under U.S. GAAP, for any assets or liabilities for which fair value measurement is not presently required.

The Company believes the fair values of cash equivalents, accounts receivable, accounts payable and the current portion of long-term debt approximate the carrying amounts due to their short duration.

The fair values of non-current financial liabilities at September 30, 2013 and December 31, 2012, determined based on Level 2 inputs, were as follows:

	September 30, 2013				December 31, 2012
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In millions)
Long-term debt, less current maturities	$	1,205.0	$	1,311.6	$	1,202.1	$	1,334.2

12

DineEquity, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

10. Commitments and Contingencies

Litigation, Claims and Disputes

The Company is subject to various lawsuits, administrative proceedings, audits, and claims arising in the ordinary course of business. Some of these lawsuits purport to be class actions and/or seek substantial damages. The Company is required under U.S. GAAP to record an accrual for litigation loss contingencies that are both probable and reasonably estimable. Legal fees and expenses associated with the defense of all of the Company's litigation are expensed as such fees and expenses are incurred. Management regularly assesses the Company's insurance coverage, analyzes litigation information with the Company's attorneys and evaluates the Company's loss experience in connection with pending legal proceedings. While the Company does not presently believe that any of the legal proceedings to which it is currently a party will ultimately have a material adverse impact on the Company, there can be no assurance that the Company will prevail in all the proceedings the Company is party to, or that the Company will not incur material losses from them.

Lease Guarantees

In connection with the sale of Applebee’s restaurants or previous brands to franchisees and other parties, the Company has, in certain cases, guaranteed or had potential continuing liability for lease payments totaling $431.9 million as of September 30, 2013. This amount represents the maximum potential liability for future payments under these leases. These leases have been assigned to the buyers and expire at the end of the respective lease terms, which range from 2013 through 2048. In the event of default, the indemnity and default clauses in the sale or assignment agreements govern the Company's ability to pursue and recover damages incurred.  No material liabilities have been recorded as of September 30, 2013.

Contingencies

In February 2013, an IHOP franchisee and its affiliated entities which owned and operated 19 restaurants located in the states of Illinois, Wisconsin and Missouri filed for bankruptcy protection. As a result of an order issued by the bankruptcy court, two of the 19 restaurants were returned to the Company in the third quarter of 2013. A non-cash charge of $0.5 million was recorded in the Consolidated Statement of Comprehensive Income against deferred rental revenue associated with the leases for those two restaurants. During the third quarter of 2013, the Company received favorable rulings from the bankruptcy court which, if upheld, would allow the Company to transfer the remaining 17 restaurants to another franchisee. These rulings have been appealed by the current franchisee and are presently subject to a stay, pursuant to which the current franchisee is operating these restaurants only on a day-to-day basis and is continuing to make payments to the Company pursuant to the terms of the original franchise agreements. Accordingly, the Company is unable to determine the ultimate outcome of the bankruptcy proceedings at this time.

In an unrelated matter, in April 2013, an Applebee's franchisee which owned and operated 33 restaurants located in Illinois filed for bankruptcy protection. Pursuant to the bidding procedures approved by the bankruptcy court, 15 of the restaurants were sold in June 2013 to an affiliate of an existing franchisee and operated without interruption during the transition of ownership. The remaining 18 restaurants were closed in June 2013. We received approximately $3.8 million in termination payments and other fees in connection with the closure of these restaurants. We also have entered into a development agreement with the franchisee that acquired the 15 restaurants to open additional restaurants in Illinois in the future.

11.  Consolidating Financial Information

Certain of the Company's subsidiaries have guaranteed the Company's obligations under the Senior Secured Credit Facility. The following presents the condensed consolidating financial information separately for: (i) the parent Company, the issuer of the guaranteed obligations; (ii) the guarantor subsidiaries, on a combined basis, as specified in the Credit Agreement; (iii) the non-guarantor subsidiaries, on a combined basis; (iv) consolidating eliminations and reclassifications; and (v) DineEquity, Inc. and Subsidiaries on a consolidated basis.

Each guarantor subsidiary is 100% owned by the Company at the date of each balance sheet presented. The notes are fully and unconditionally guaranteed on a joint and several basis by each guarantor subsidiary. Each entity in the consolidating financial information follows the same accounting policies as described in the consolidated financial statements.

13

DineEquity, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Supplemental Condensed Consolidating Balance Sheet

September 30, 2013

(In millions⁽¹⁾)

	Parent			Combined Guarantor Subsidiaries		Combined Non-guarantor Subsidiaries			Eliminations and Reclassification			Consolidated
Assets
Current Assets
Cash and cash equivalents	$	52.2		$	42.5	$	0.8		$	—		$	95.5
Receivables, net	3.9			91.2		0.2			(8.0		)	87.3
Prepaid expenses and other current assets	192.2			50.6		—			(188.6		)	54.1
Deferred income taxes	(0.1		)	23.6		1.4			—			24.8
Intercompany	(436.8		)	432.3		4.4			—			—
Total current assets	(188.6		)	640.2		6.8			(196.6		)	261.8
Long-term receivables	—			201.1		—			—			201.1
Property and equipment, net	23.2			257.2		1.0			—			281.4
Goodwill	—			697.5		—			—			697.5
Other intangible assets, net	—			797.0		—			—			797.1
Other assets, net	16.7			92.2		—			—			108.9
Investment in subsidiaries	1,697.6			—		—			(1,697.6		)	—
Total assets	$	1,548.9		$	2,685.2	$	7.8		$	(1,894.2	)	$	2,347.7
Liabilities and Stockholders’ Equity
Current Liabilities
Current maturities of long-term debt	$	12.7		$	—	$	—		$	(8.0	)	$	4.7
Accounts payable	1.8			31.5		—						33.3
Accrued employee compensation and benefits	9.8			8.2		—						18.1
Gift card liability	—			93.2		—						93.2
Other accrued expenses	1.3			255.6		(0.2		)	(188.6		)	68.0
Total current liabilities	25.7			388.5		(0.2		)	(196.6		)	217.3
Long-term debt	1,205.0			—		—						1,205.0
Financing obligations	—			51.9		—						51.9
Capital lease obligations	—			115.4		—			—			115.4
Deferred income taxes	2.2			347.2		(0.3		)				349.2
Other liabilities	5.8			92.2		0.9						98.9
Total liabilities	1,238.7			995.2		0.4			(196.6		)	2,037.7
Total stockholders’ equity	310.1			1,690.0		7.4			(1,697.6		)	310.0
Total liabilities and stockholders’ equity	$	1,548.9		$	2,685.2	$	7.8		$	(1,894.2	)	$	2,347.7

⁽¹⁾ Supplemental condensed statements presented in millions may not foot/crossfoot due to rounding from Consolidated Statements presented in thousands.

14

DineEquity, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Supplemental Condensed Consolidating Balance Sheet

December 31, 2012

(In millions⁽¹⁾)

	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

⁽¹⁾ Supplemental condensed statements presented in millions may not foot/crossfoot due to rounding from Consolidated Statements presented in thousands.

15

DineEquity, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Supplemental Condensed Consolidating Statement of Comprehensive Income

For the Three Months EndedSeptember 30, 2013

(In millions⁽¹⁾)

	Parent			Combined Guarantor Subsidiaries			Combined Non-guarantor Subsidiaries			Eliminations  and Reclassification			Consolidated
Revenues
Franchise and restaurant revenues	$	0.7		$	126.1		$	0.4		$	—		$	127.1
Rental revenues	—			31.0			—			—			31.0
Financing revenues	—			3.2			—			—			3.2
Total revenue	0.7			160.3			0.4			—			161.3
Franchise and restaurant expenses	0.6			43.5			—			—			44.1
Rental expenses	—			24.1			—			—			24.2
Financing expenses	—			—			—			—			—
General and administrative expenses	9.0			26.0			0.3			—			35.3
Interest expense	24.6			0.3			—			—			25.0
Amortization of intangible assets	—			3.1			—			—			3.1
Closure and impairment charges	—			(0.5		)	0.1			—			(0.4		)
Loss (gain) on disposition of assets	—			0.1			(0.2		)	—			(0.1		)
Intercompany dividend	(39.2		)	—			—			39.2			—
Income before income taxes	5.6			63.5			0.2			(39.2		)	30.1
Benefit (provision) for income taxes	13.1			(24.5		)	—			—			(11.4		)
Net income	$	18.7		$	39.0		$	0.2		$	(39.2	)	$	18.7
Total comprehensive income	$	18.7		$	39.0		$	0.2		$	(39.2	)	$	18.7

⁽¹⁾ Supplemental condensed statements presented in millions may not foot/crossfoot due to rounding from Consolidated Statements presented in thousands.

Supplemental Condensed Consolidating Statement of Comprehensive Income

For the Three Months EndedSeptember 30, 2012

(In millions⁽¹⁾)

	Parent			Combined Guarantor Subsidiaries			Combined Non-guarantor Subsidiaries			Eliminations  and Reclassification			Consolidated
Revenues
Franchise and restaurant revenues	$	0.7		$	181.3		$	0.3		$	—		$	182.2
Rental revenues	—			30.9			—			—			30.9
Financing revenues	—			3.2			—			—			3.2
Total revenue	0.7			215.4			0.3			—			216.3
Franchise and restaurant expenses	0.6			95.2			—			—			95.7
Rental expenses	—			24.2			—			—			24.2
Financing expenses	—			—			—			—			—
General and administrative expenses	15.8			32.5			0.4			—			48.7
Interest expense	26.5			2.4			—			—			28.9
Amortization of intangible assets	—			3.1			—			—			3.1
Closure and impairment charges	—			0.2			0.2			—			0.4
Gain on disposition of assets	—			(73.3		)	(0.4		)	—			(73.7		)
Loss on extinguishment of debt	2.3			—			—			—			2.3
Intercompany dividend	(88.7		)	—			—			88.7			—
Income before income taxes	44.2			131.1			0.1			(88.7		)	86.6
Benefit (provision) for income taxes	16.5			(42.5		)	—			—			(26.0		)
Net income	$	60.6		$	88.6		$	0.1		$	(88.7	)	$	60.6
Total comprehensive income	$	60.6		$	88.6		$	0.1		$	(88.7	)	$	60.6

⁽¹⁾ Supplemental condensed statements presented in millions may not foot/crossfoot due to rounding from Consolidated Statements presented in thousands.

16

DineEquity, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Supplemental Condensed Consolidating Statement of Comprehensive Income

For the Nine Months EndedSeptember 30, 2013

(In millions⁽¹⁾)

	Parent			Combined Guarantor Subsidiaries			Combined Non-guarantor Subsidiaries			Eliminations  and Reclassification			Consolidated
Revenues
Franchise and restaurant revenues	$	2.1		$	376.5		$	1.0		$	—		$	379.6
Rental revenues	—			92.7			—			—			92.7
Financing revenues	—			10.2			—			—			10.2
Total revenue	2.1			479.4			1.0			—			482.6
Franchise and restaurant expenses	2.1			128.8			—			—			130.9
Rental expenses	—			72.9			—			—			72.9
Financing expenses	—			0.2			—			—			0.2
General and administrative expenses	27.7			76.3			0.9			—			105.0
Interest expense	74.2			1.0			—			—			75.2
Amortization of intangible assets	—			9.2			—			—			9.2
Closure and impairment charges	—			0.5			0.2			—			0.8
Loss (gain) on disposition of assets	—			0.4			(0.7		)	—			(0.3		)
Debt modification costs	1.3			—			—			—			1.3
Intercompany dividend	(116.6		)	—			—			116.6			—
Income before income taxes	13.4			190.0			0.5			(116.6		)	87.3
Benefit (provision) for income taxes	40.5			(73.9		)	—			—			(33.4		)
Net income	$	53.9		$	116.1		$	0.5		$	(116.6	)	$	53.9
Total comprehensive income	$	53.9		$	116.1		$	0.5		$	(116.6	)	$	53.9

⁽¹⁾ Supplemental condensed statements presented in millions may not foot/crossfoot due to rounding from Consolidated Statements presented in thousands.

Supplemental Condensed Consolidating Statement of Comprehensive Income

For the Nine Months EndedSeptember 30, 2012

(In millions⁽¹⁾)

	Parent			Combined Guarantor Subsidiaries			Combined Non-guarantor Subsidiaries			Eliminations  and Reclassification			Consolidated
Revenues
Franchise and restaurant revenues	$	1.9		$	585.1		$	0.8		$	—		$	587.8
Rental revenues	—			92.1			—			—			92.1
Financing revenues	—			11.4			—			—			11.4
Total revenue	1.9			688.6			0.8			—			691.3
Franchise and restaurant expenses	1.8			311.6			—			—			313.4
Rental expenses	—			73.1			—			—			73.1
Financing expenses	—			1.6			—			—			1.6
General and administrative expenses	28.9			95.2			1.4			—			125.6
Interest expense	80.9			7.9			—			—			88.8
Amortization of intangible assets	—			9.2			—			—			9.2
Closure and impairment charges	—			0.7			0.6			—			1.3
Gain on disposition of assets	—			(88.5		)	(1.2		)	—			(89.6		)
Loss on extinguishment of debt	4.9			—			—			—			4.9
Intercompany dividend	(179.7		)	—			—			179.7			—
Income before income taxes	65.1			277.8			—			(179.7		)	163.1
Benefit (provision) for income taxes	43.6			(97.9		)	—			—			(54.2		)
Net income	$	108.7		$	179.9		$	—		$	(179.7	)	$	108.9
Total comprehensive income	$	108.8		$	180.0		$	—		$	(179.7	)	$	109.0

⁽¹⁾ Supplemental condensed statements presented in millions may not foot/crossfoot due to rounding from Consolidated Statements presented in thousands.

17

DineEquity, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Supplemental Condensed Consolidating Statement of Cash Flows

For the Nine Months EndedSeptember 30, 2013

(In millions⁽¹⁾)

	Parent			Combined Guarantor Subsidiaries			Combined Non-guarantor Subsidiaries			Eliminations  and Reclassification		Consolidated
Cash flows provided by (used in) operating activities	$	(66.3	)	$	169.4		$	(0.3	)	$	—	$	102.8
Investing cash flows:
Additions to property and equipment	(3.8		)	(0.7		)	—			—		(4.6		)
Principal receipts from long-term receivables	—			10.3			—			—		10.3
Proceeds from sale of assets	—			—			—			—		—
Other	—			0.3			—			—		0.3
Cash flows provided by (used in) investing activities	(3.8		)	9.8			—			—		6.0
Financing cash flows:
Payment of debt	(2.4		)	(7.5		)	—			—		(9.9		)
Payment of debt modification costs	(1.3		)	—			—			—		(1.3		)
Repurchase of common stock	(24.7		)	—			—			—		(24.7		)
Dividends paid on common stock	(43.2		)	—			—			—		(43.2		)
Restricted cash	—			(3.1		)	—			—		(3.1		)
Other	4.2			0.1			—			—		4.4
Intercompany transfers	179.7			(180.1		)	0.4			—		—
Cash flows provided by (used in) financing activities	112.4			(190.6		)	0.4			—		(77.8		)
Net change	42.3			(11.4		)	0.1			—		31.0
Beginning cash and equivalents	9.9			54.0			0.6			—		64.5
Ending cash and equivalents	$	52.2		$	42.5		$	0.8		$	—	$	95.5

⁽¹⁾ Supplemental condensed statements presented in millions may not foot/crossfoot due to rounding from Consolidated Statements presented in thousands.

Supplemental Condensed Consolidating Statement of Cash Flows

For the Nine Months EndedSeptember 30, 2012

(In millions⁽¹⁾)

	Parent			Combined Guarantor Subsidiaries			Combined Non-guarantor Subsidiaries		Eliminations  and Reclassification		Consolidated
Cash flows provided by (used in) operating activities	$	(74.5	)	$	142.3		$	0.2	$	—	$	68.1
Investing cash flows:
Additions to property and equipment	(4.7		)	(8.8		)	—				(13.5		)
Principal receipts from long-term receivables	—			10.3			—		—		10.3
Proceeds from sale of assets	—			137.4			—		—		137.4
Other	—			1.0			—		—		1.0
Cash flows provided by (used in) investing activities	(4.7		)	139.9			—		—		135.2
Financing cash flows:
Revolving credit borrowings	50.0			—			—		—		50.0
Revolving credit repayments	(50.0		)	—			—		—		(50.0		)
Payment of debt	(184.2		)	(8.2		)	—		—		(192.5		)
Restricted cash	—			(8.2		)	—		—		(8.2		)
Other	7.4			1.2			—		—		8.5
Intercompany transfers	291.1			(291.1		)	—		—		—
Cash flows provided by (used in) financing activities	114.2			(306.3		)	—		—		(192.2		)
Net change	35.1			(24.1		)	0.2		—		11.1
Beginning cash and equivalents	9.9			50.4			0.4		—		60.7
Ending cash and equivalents	$	45.0		$	26.2		$	0.6	$	—	$	71.8

⁽¹⁾ Supplemental condensed statements presented in millions may not foot/crossfoot due to rounding from Consolidated Statements presented in thousands.

18

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Cautionary Statement Regarding Forward-Looking Statements

Statements contained in this report may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors, which may cause actual results to be materially different from those expressed or implied in such statements. You can identify these forward-looking statements by words such as “may,” “will,” “should,” “expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan” and other similar expressions. You should consider our forward-looking statements in light of the risks discussed under the heading “Risk Factors” in our most recent Annual Report on Form 10-K, as well as our consolidated financial statements, related notes, and the other financial information appearing elsewhere in this report and our other filings with the United States Securities and Exchange Commission. The forward-looking statements contained in this report are made as of the date hereof and the Company assumes no obligation to update or supplement any forward-looking statements.

You should read the following Management's Discussion and Analysis of Financial Condition and Results of Operations in conjunction with the consolidated financial statements and the related notes that appear elsewhere in this report.

Overview

The following discussion and analysis provides information we believe is relevant to an assessment and understanding of our consolidated results of operations and financial condition. The discussion should be read in conjunction with the consolidated financial statements and the notes thereto included in Item 1 of Part I of this Quarterly Report and the audited consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012. Except where the context indicates otherwise, the words “we,” “us,” “our” and the “Company” refer to DineEquity, Inc., together with its subsidiaries that are consolidated in accordance with United States generally accepted accounting principles (“U.S. GAAP”).

Through various subsidiaries we own, franchise and operate two restaurant concepts: Applebee's Neighborhood Grill & Bar^® (“Applebee's^®”), in the bar and grill segment of the casual dining category of the restaurant industry, and International House of Pancakes^® (“IHOP^®”), in the family dining category of the restaurant industry. References herein to Applebee's and IHOP restaurants are to these two restaurant concepts, whether operated by franchisees, area licensees or the Company. Over 99% of our restaurants are franchised. We also have 36 company-operated restaurants primarily to test new remodel programs, operating procedures, products, technology, cooking platforms and service models.

Domestically, Applebee's restaurants are located in every state except Hawaii, while IHOP restaurants are located in all 50 states and the District of Columbia. Internationally, Applebee's restaurants are located in one United States territory and 17 foreign countries; IHOP restaurants are located in two United States territories and seven foreign countries. With over 3,600 restaurants combined, we believe we are one of the largest full-service restaurant companies in the world. The June 24, 2013 issue of Nation's Restaurant News reported that IHOP and Applebee's were the largest restaurants in their respective categories in terms of United States system-wide sales during 2012. This marks the sixth consecutive year each brand has achieved the number one ranking in that measure.

Capital Allocation Strategy

On February 26, 2013, our Board of Directors approved a capital allocation strategy that incorporates the return of a significant portion of our free cash flow to our stockholders. The Board of Directors also approved an authorization to repurchase up to $100 million of our common stock. Pursuant to that strategy, during the nine months ended September 30, 2013 we declared and paid three quarterly cash dividends of $0.75 per share of our common stock totaling $43.2 million. We also repurchased 351,704 shares of our common stock at a total cost of $24.7 million during this period. As of September 30, 2013 we may repurchase up to an additional $75.3 million of common stock under the current authorization.

19

Key Performance Indicators

In evaluating the performance of each concept, we consider the key performance indicators to be net franchise restaurant development and the percentage change in domestic system-wide same-restaurant sales. Since we are a 99% franchised company, expanding the number of franchise restaurants is an important driver of revenue growth. We currently do not plan to open any new Applebee's or IHOP company-operated restaurants. Revenue from our rental and financing operations, legacies from the IHOP business model we operated under prior to 2003, is subject to progressive decline over time as interest-earning balances are repaid. Growth in both the number of franchise restaurants and sales at those restaurants will drive franchise revenues in the form of higher royalty revenues, additional franchise fees and, in the case of IHOP restaurants, sales of proprietary pancake and waffle dry mix.

An overview of these performance indicators for the three and nine months ended September 30, 2013 is as follows:

	Three Months Ended		Nine Months Ended
	September 30, 2013		September 30, 2013
	Applebee's	IHOP	Applebee's	IHOP
Percentage change in domestic system-wide same-restaurant sales	(0.4)%	3.6%	(0.1)%	1.7%
Net franchise restaurant development(1)	(2)	9	(24)	21

⁽¹⁾Franchise and area license openings, net of closings and refranchisings

IHOP's increase of 3.6% in domestic system-wide restaurant sales for three months ended September 30, 2013 was the second consecutive quarterly increase in domestic system-wide restaurant sales and the largest increase since the first quarter of 2008. The increase resulted from a higher average customer check partially offset by a decrease in customer traffic. Applebee's domestic system-wide restaurant sales for three months ended September 30, 2013decreased0.4% as a decrease in customer traffic was partially offset by an increase in average customer check.

IHOP's increase of 1.7% in domestic system-wide restaurant sales for the nine months ended September 30, 2013 reflects sequential improvement in each of the first three quarters of 2013, with a decrease of 0.5% in the first quarter of 2013 followed by increases of 1.9% and 3.6% in the second and third quarters, respectively. Applebee's slight decrease of 0.1% in domestic system-wide restaurant sales for the nine months ended September 30, 2013 reflects a decrease of 1.3% in the first quarter followed by an increase of 1.3% in the second quarter and the decrease of 0.4% in the third quarter.

Applebee's net restaurant development for the nine months ended September 30, 2013 was adversely impacted by restaurant closures during the second quarter of 2013. In April 2013, an Applebee's franchisee that owned and operated 33 restaurants located in Illinois filed for bankruptcy protection. As a result of those proceedings, 15 of the restaurants were sold in June 2013 to an affiliate of an existing franchisee and operated without interruption during the transition of ownership. The remaining 18 restaurants were closed in June 2013 and we received termination fees of $3.8 million related to the closure of the 18 restaurants during the third quarter of 2013. We have entered into a development agreement with the new franchisee to open additional restaurants in Illinois in the future.

As of September 30, 2013, Applebee's and IHOP franchisees have opened 10 and 35 new restaurants, respectively. In 2013, we expect Applebee's franchisees to open a total of 25 to 30 new restaurants, the majority of which are expected to be opened domestically. We have reduced our previous estimate of 40 to 50 new restaurant openings primarily because for the past few years, franchisees have allocated a significant amount of capital, both human and financial, to the remodel/revitalization program. We underestimated the time it would take to rebuild the development pipeline.  In addition, several of the franchisee-to-franchisee transfers that were completed in 2013 had development obligations that were extended as part of the transactions.

In 2013, we expect IHOP franchisees to open a total of 50 to 60 new restaurants, the majority of which are expected to be opened domestically. Over the past five years, the fourth quarter of each year has been the most active in terms of new restaurant openings for both brands.

The actual number of openings may differ from both our expectations and development commitments. Historically, the actual number of restaurants developed in a particular year has been less than the total number committed to be developed due to various factors, including economic conditions and franchisee noncompliance with development agreements. The timing of new restaurant openings also may be affected by various factors including weather-related and other construction delays, difficulties in obtaining timely regulatory approvals and the impact of currency fluctuations on our international franchisees.

20

Consolidated cash flows from operating activities and consolidated free cash flow for the nine months ended September 30, 2013 were as follows:

	Nine Months Ended
	September 30,
	2013		2012
	(In millions)
Consolidated cash flows from operating activities	$	102.8	$	68.1
Consolidated free cash flow	$	98.6	$	51.1

In evaluating the performance of the consolidated enterprise, we consider the key performance indicators to be consolidated cash flows from operating activities and consolidated free cash flow (cash from operations, plus receipts from notes, equipment contracts and other long-term receivables, less consolidated capital expenditures, principal payments on capital leases and financing obligations and the mandatory annual repayment of 1% of the principal balance of our Term Loans). Consolidated cash from operations and consolidated free cash flow for the nine months ended September 30, 2013 were $102.8 million and $98.6 million, respectively.

Additional detail on each of our key performance indicators is presented under the captions "Restaurant Development Activity," "Restaurant Data," and "Liquidity and Capital Resources" that follow.

Restaurant Development Activity

The following table summarizes Applebee’s restaurant development and franchising activity during the three and nine months ended September 30, 2013 and 2012:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
	(Unaudited)
Applebee's Restaurant Development Activity
Beginning of period	2,012		2,018		2,034		2,019
New openings:
Franchise	4		5		10		14
Total new openings	4		5		10		14
Closings:
Franchise	(6	)	(7	)	(34	)	(17	)
Total closings	(6	)	(7	)	(34	)	(17	)
End of period	2,010		2,016		2,010		2,016
Summary - end of period
Franchise	1,987		1,954		1,987		1,954
Company	23		62		23		62
Total	2,010		2,016		2,010		2,016
Restaurant Franchising Activity
Domestic franchise openings	1		4		6		7
International franchise openings	3		1		4		7
Refranchised	—		98		—		115
Total restaurants franchised	4		103		10		129
Closings:
Domestic franchise	(6	)	(2	)	(31	)	(6	)
International franchise	—		(5	)	(3	)	(11	)
Total franchise closings	(6	)	(7	)	(34	)	(17	)
Net franchise restaurant (reductions) additions	(2	)	96		(24	)	112

21

The following table summarizes IHOP restaurant development and franchising activity during the three and nine months ended September 30, 2013 and 2012:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
	(Unaudited)
IHOP Restaurant Development Activity
Beginning of period	1,593		1,557		1,581		1,550
New openings:
Franchise	13		12		31		27
Area license	—		—		4		1
Total new openings	13		12		35		28
Closings:
Franchise	(4	)	(4	)	(13	)	(11	)
Area license	—		—		(1	)	(2	)
Total closings	(4	)	(4	)	(14	)	(13	)
End of period	1,602		1,565		1,602		1,565
Summary - end of period
Franchise	1,421		1,383		1,421		1,383
Area license	168		165		168		165
Company	13		17		13		17
Total	1,602		1,565		1,602		1,565
Restaurant Franchising Activity
Domestic franchise openings	10		10		25		24
International franchise openings	3		2		6		3
Area license openings	—		—		4		1
Refranchised	—		—		1		4
Total restaurants franchised	13		12		36		32
Closings:
Domestic franchise	(4	)	(4	)	(13	)	(11	)
Area license	—		—		(1	)	(2	)
Total franchise closings	(4	)	(4	)	(14	)	(13	)
Reacquired by the Company	(2	)	—		(2	)	(6	)
Net franchise restaurant additions	7		8		20		13

22

Restaurant Data

The following table sets forth, for the three and nine months ended September 30, 2013 and 2012, the number of “Effective Restaurants” in the Applebee’s and IHOP systems and information regarding the percentage change in sales at those restaurants compared to the same periods in the prior year. Sales at restaurants that are owned by franchisees and area licensees are not attributable to the Company. However, we believe that presentation of this information is useful in analyzing our revenues because franchisees and area licensees pay us royalties and advertising fees that are generally based on a percentage of their sales, and, where applicable, rental payments under leases that partially may be based on a percentage of their sales. Management also uses this information to make decisions about future plans for the development of additional restaurants as well as evaluation of current operations.

	Three Months Ended						Nine Months Ended
—	September 30,						September 30,
	2013			2012			2013			2012
	(Unaudited)
Applebee's Restaurant Data
Effective Restaurants(a)
Franchise	1,986			1,871			1,998			1,861
Company	23			144			23			156
Total	2,009			2,015			2,021			2,017
System-wide(b)
Sales percentage change(c)	0.0		%	2.4		%	0.6		%	1.7		%
Domestic same-restaurant sales percentage change(d)	(0.4		)%	2.0		%	(0.1		)%	1.3		%
Franchise(b)(e)
Sales percentage change(c)	6.2		%	8.4		%	7.7		%	7.0		%
Domestic same-restaurant sales percentage change(d)	(0.4		)%	2.2		%	(0.1		)%	1.2		%
Average weekly domestic unit sales (in thousands)	$	44.9		$	45.1		$	47.2		$	47.4

IHOP Restaurant Data
Effective Restaurants(a)
Franchise	1,413			1,377			1,410			1,375
Area license	168			165			167			165
Company	12			17			12			15
Total	1,593			1,559			1,589			1,555
System-wide(b)
Sales percentage change(c)	6.1		%	0.9		%	4.2		%	1.9		%
Domestic same-restaurant sales percentage change(d)	3.6		%	(2.0		)%	1.7		%	(1.3		)%
Franchise(b)
Sales percentage change(c)	6.2		%	0.4		%	4.3		%	1.6		%
Domestic same-restaurant sales percentage change(d)	3.6		%	(2.0		)%	1.7		%	(1.2		)%
Average weekly domestic unit sales (in thousands)	$	35.0		$	33.8		$	34.8		$	34.2
Area License (b)
Sales percentage change(c)	7.9		%	4.0		%	5.6		%	3.5		%

23

(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 three and nine months ended September 30, 2013 and 2012 were as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
	(In millions)
Reported sales (unaudited)
Applebee's franchise restaurant sales	$	1,073.7	$	1,011.4	$	3,409.4	$	3,165.4
IHOP franchise restaurant sales	$	642.6	$	604.8	$	1,912.7	$	1,834.6
IHOP area license restaurant sales	$	61.8	$	57.3	$	188.0	$	178.1

(c)   “Sales percentage change” reflects, for each category of restaurants, the percentage change in sales in any given fiscal period compared to the prior fiscal period 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 the three and nine months ended September 30, 2013 and 2012 for Applebee’s franchise restaurants was impacted by the refranchising of 154 company-operated restaurants during 2012.

24

Significant Known Events, Trends or Uncertainties Impacting or Expected to Impact Comparisons of Reported or Future Results

Same-restaurant Sales Trends

Applebee’s domestic system-wide same-restaurant sales decreased0.4% for the three months ended September 30, 2013 from the same period in 2012. For the first nine months of 2013, Applebee’s domestic system-wide same-restaurant sales decreased0.1% from the same period in 2012. For both comparative periods, a decline in customer traffic was partially offset by an increase in average customer check. Same-restaurant sales performance for the first nine months of 2013 is not necessarily indicative of results expected for the full year.

IHOP’s domestic system-wide same-restaurant sales increased3.6% for the three months ended September 30, 2013 from the same period in 2012, the second consecutive quarterly increase and the largest increase since the first quarter of 2008. For the first nine months of 2013, IHOP's domestic system-wide same-restaurant sales increased1.7% compared to 2012. For both comparative periods, the improvement resulted from a higher average customer check substantially larger than a decrease in customer traffic. We believe the increase in average customer check was due in part to the new IHOP menu launched in June 2013 which influenced customers’ purchasing patterns and resulted in a favorable shift in product mix. Additionally, we believe the average customer check had declined in 2012 because of strong consumer interest in promotional menu items, resulting in a lower base for comparison. Same-restaurant sales performance for the first nine months of 2013 is not necessarily indicative of results expected for the full year.

25

Published measures of national consumer confidence declined in the third quarter of 2013, an indication that economic uncertainty continues to impact consumers' decisions with respect to discretionary spending in general as well as with respect to dining out. Revenues from the restaurant industry as a whole decreased in the third quarter of 2013 compared to the second quarter of 2013. However, the industry segments in which we operate moved in opposite directions. Revenues in the casual dining segment decreased during the third quarter of 2013 compared to the second quarter, while revenues from the family dining segment increased during the third quarter of 2013 compared to the second quarter. Both Applebee's and IHOP outperformed the averages of their respective categories based on domestic system-wide same-restaurant sales.

We work to drive consistent and sustainable same-restaurant sales and traffic and differentiate our brands by focusing on menu innovation, operational excellence, advertising and media, and our value proposition. The new IHOP menu launched in June 2013 had three objectives: (i) simplify the ordering process with a new menu layout; (ii) reduce the overall number of menu items over time to lessen complexity; and (iii) introduce new and exciting menu offerings and categories. Applebee's menu is continually updated through the offering of new culinary creations, such as “Honey Pepper Sirloin” and “Honey Pepper Chicken & Shrimp” as part of our signature “2 for $20” offering.

We continue to optimize our media strategy to increase both reach and frequency to break through the very competitive media landscape and more effectively connect with target customers of both IHOP and Applebee's. For example, in September 2013 we launched a joint venture with ESPN^®, the worldwide leader in sports coverage, to debut “ESPN Fan Zone” at Applebee’s restaurants across the country. The partnership creates a new environment for guests to enjoy their favorite teams and the wide selection on our menu. As part of the game-watching experience, guests also can choose items from a new “Game Time Menu.” In addition to our focus on traditional media such as TV and radio, we continued our expansion into digital and social media, additional vehicles through which we connect with our customers.

The Applebee's remodel program also has been a key component of our strategy to drive same-restaurant sales and traffic and we believe has revitalized and helped to differentiate the brand. During the third quarter of 2013, franchisees remodeled over 80 restaurants; approximately two-thirds of the domestic Applebee's system has been remodeled since the program was initiated in the second half of 2010.

Franchisee Matters

From time to time, our franchisees may experience financial difficulties, including bankruptcy.

In February 2013, an IHOP franchisee and its affiliated entities which owned and operated 19 restaurants located in the states of Illinois, Wisconsin and Missouri filed for bankruptcy protection. As a result of an order issued by the bankruptcy court, two of the 19 restaurants were returned to us in the third quarter of 2013. A non-cash charge of $0.5 million was recorded in the Consolidated Statement of Comprehensive Income against deferred rental revenue associated with the leases for those two restaurants. During the third quarter of 2013, we received favorable rulings from the bankruptcy court which, if upheld, would allow us to transfer the remaining 17 restaurants to another franchisee. These rulings have been appealed by the current franchisee and are presently subject to a stay, pursuant to which the current franchisee is operating these restaurants only on a day-to-day basis and is continuing to make payments to us pursuant to the terms of the original franchise agreements. Accordingly, we are unable to determine the ultimate outcome of the bankruptcy proceedings at this time.

In an unrelated matter, in April 2013, an Applebee's franchisee which owned and operated 33 restaurants located in Illinois filed for bankruptcy protection. Pursuant to the bidding procedures approved by the bankruptcy court, 15 of the restaurants were sold in June 2013 to an affiliate of an existing franchisee and operated without interruption during the transition of ownership. The remaining 18 restaurants were closed in June 2013. We received approximately $3.8 million in termination payments and other fees in connection with the closure of these restaurants. We also have entered into a development agreement with the franchisee that acquired the 15 restaurants to open additional restaurants in Illinois in the future.

26

RESULTS OF OPERATIONS

Comparison of Three and Nine Months EndedSeptember 30, 2013 and 2012

SUMMARY

	Three Months Ended						Favorable (Unfavorable) Variance			Nine Months Ended						Favorable (Unfavorable) Variance
	September 30,									September 30,
	2013			2012						2013			2012
	(In millions, except percentages)
Revenue	$	161.3		$	216.3		$	(55.0	)	$	482.6		$	691.3		$	(208.7	)
Segment profit	93.0			96.4			(3.4		)	278.5			303.2			(24.7		)
Segment profit as % of revenue	57.7		%	44.6		%	13.1		%	57.7		%	43.9		%	13.8		%
General & administrative expenses	35.3			48.7			13.4			105.0			125.6			20.6
Interest expense	25.0			28.9			3.9			75.2			88.8			13.5
Gain on disposition of assets	(0.1		)	(73.7		)	(73.6		)	(0.3		)	(89.6		)	(89.3		)
Other expenses	2.7			5.8			3.1			11.3			15.4			4.1
Income tax provision	11.4			26.0			14.6			33.4			54.2			20.9
Effective tax rate	37.8		%	30.1		%	(7.7		)%	38.2		%	33.2		%	(5.0		)%
Net income	$	18.7		$	60.6		$	(41.8	)	$	53.9		$	108.9		$	(54.9	)

The completion of our transition to a 99% franchised company in October 2012 had a significant impact on the comparison of our results of operations for the three and nine months ended September 30, 2013 with the same periods of the prior year. The most significant impact was the decline in revenues and segment profit because of the Applebee's company-operated restaurants that were refranchised, partially offset by increased royalty revenues and franchise fees from the refranchised restaurants. Interest expense declined, in large part, due to repayment of debt with proceeds from the sale of assets of company-operated restaurants that were refranchised. Additionally, our effective tax rate for the three and nine months ended September 30, 2012 was impacted by a discrete $6.3 million tax benefit related to a reduction in state deferred taxes as a result of the refranchising of Applebee's company-operated restaurants.

A significant portion of the decline in general and administrative (“G&A”) expenses for the three and nine months ended September 30, 2013 was due to a $9.0 million charge recorded in the third quarter of 2012 related to settlement of litigation that commenced prior to our acquisition of Applebee's. The elimination and realignment of administrative functions associated with company-operated restaurants as well as our staff reduction initiative implemented in the third quarter of 2012 was primarily responsible for the remaining decreases in G&A expenses for the three and nine months ended September 30, 2013, as compared with the same periods of 2012.

REVENUE

	Three Months Ended				Favorable (Unfavorable) Variance			Nine Months Ended				Favorable (Unfavorable) Variance
	September 30,							September 30,
	2013		2012					2013		2012
	(In millions)
Franchise	$	111.7	$	102.6	$	9.1		$	331.6	$	313.5	$	18.1
Company	15.4		79.6		(64.2		)	48.1		274.3		(226.2		)
Rental	31.0		30.9		0.1			92.7		92.1		0.6
Financing	3.2		3.2		0.0			10.2		11.4		(1.2		)
Total revenue	$	161.3	$	216.3	$	(55.0	)	$	482.6	$	691.3	$	(208.7	)

 Total revenue decreased$55.0 million and $208.7 million, respectively, for the three and nine months ended September 30, 2013. The decrease in each comparative period was primarily due to the refranchising of Applebee's company-operated restaurants in 2012, partially offset by higher franchise royalty revenues resulting from the increase in the number of Applebee’s and IHOP franchise restaurants. More than two-thirds of our revenue now comes from our franchise segment. As franchisees develop more restaurants, the company restaurant segment should consistently generate less than 10% of our revenues.

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SEGMENT PROFIT (LOSS)

	Three Months Ended					Favorable (Unfavorable) Variance			Nine Months Ended					Favorable (Unfavorable) Variance
	September 30,								September 30,
	2013			2012					2013			2012
	(In millions)
Franchise operations	$	83.3		$	75.5	$	7.8		$	248.8		$	232.4	$	16.4
Company restaurant operations	(0.3		)	11.0		(11.3		)	(0.1		)	42.0		(42.1		)
Rental operations	6.8			6.7		0.1			19.8			19.0		0.8
Financing operations	3.2			3.2		0.0			10.0			9.8		0.2
Total	$	93.0		$	96.4	$	(3.4	)	$	278.5		$	303.2	$	(24.7	)

The decline in segment profit for the three months ended September 30, 2013 compared to the prior year was primarily due to the impact of the refranchising of Applebee’s company-operated restaurants on the company restaurant segment. This was partially offset by an increase in the number of Applebee’s and IHOP franchise restaurants, a $4.0 million increase in termination fees related to the closure of Applebee's restaurants and a 3.6% increase in IHOP domestic same-restaurant sales.

The decline in segment profit for the nine months ended September 30, 2013 compared to the prior year was primarily due to the impact of the refranchising of Applebee’s company-operated restaurants on the company restaurant segment, partially offset by an increase in the number of Applebee’s and IHOP franchise restaurants, a $4.8 million increase in termination fees related to closure of Applebee's restaurants and a 1.7% increase in IHOP domestic same-restaurant sales. Nearly 90% of our segment profit now comes from our franchise operations. We operate our company restaurants primarily to test new remodel programs, operating procedures, products, technology, cooking platforms and service models and, accordingly, we do not anticipate these restaurants will generate a significant amount of segment profit or loss in the foreseeable future.

Franchise Operations

	Three Months Ended						Favorable (Unfavorable) Variance			Nine Months Ended						Favorable (Unfavorable) Variance
	September 30,									September 30,
	2013			2012						2013			2012
	(In millions, except number of restaurants)
Effective Franchise Restaurants:(1)
Applebee’s	1,986			1,871			115			1,998			1,861			137
IHOP	1,581			1,542			39			1,577			1,540			37
Franchise Revenues:
Applebee’s	$	50.9		$	43.7		$	7.2		$	151.9		$	137.5		$	14.4
IHOP	40.8			39.9			0.9			120.1			118.4			1.7
IHOP advertising	20.0			19.0			1.0			59.6			57.6			2.0
Total franchise revenues	111.7			102.6			9.1			331.6			313.5			18.1
Franchise Expenses:
Applebee’s	1.6			1.1			(0.5		)	4.6			3.1			(1.5		)
IHOP	6.8			7.0			0.2			18.6			20.4			1.8
IHOP advertising	20.0			19.0			(1.0		)	59.6			57.6			(2.0		)
Total franchise expenses	28.4			27.1			(1.3		)	82.8			81.1			(1.7		)
Franchise Segment Profit:
Applebee’s	49.3			42.6			6.7			147.3			134.4			12.9
IHOP	34.0			32.9			1.1			101.5			98.0			3.5
Total franchise segment profit	$	83.3		$	75.5		$	7.8		$	248.8		$	232.4		$	16.4
Segment profit as % of revenue (2)	74.6		%	73.6		%				75.1		%	74.1		%

 _____________________________________________________

⁽¹⁾ Effective Franchise Restaurants are the weighted average number of franchise restaurants open in a given fiscal period, adjusted to account for franchise restaurants open for only a portion of the period.

⁽²⁾ Percentages calculated on actual amounts, not rounded amounts presented above.

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The $7.2 millionincrease in Applebee’s franchise revenue for the three months ended September 30, 2013 was primarily attributable to a $4.0 million increase in termination fees in addition to increased royalty revenue resulting from the refranchising of 154 company-operated restaurants in 2012 (17 in the first quarter, 98 in the third quarter and 39 in the fourth quarter), partially offset by a 0.4%decrease in domestic same-restaurant sales. The $14.4 millionincrease in Applebee’s franchise revenue for the nine months ended September 30, 2013 was primarily attributable to increased royalty revenue resulting from the refranchising of 154 company-operated restaurants in 2012 and a $4.8 million increase in termination fees. Termination fees, by nature, are unpredictable and variable. The increase in termination fees for both the three and nine months ended September 30, 2013 was primarily due to the closure of 18 Applebee's restaurants as discussed under "Significant Known Events, Trends or Uncertainties Impacting or Expected to Impact Comparisons of Reported or Future Results - Franchisee Matters" above.

The $0.9 millionincrease in IHOP franchise revenue (other than advertising) for the three months ended September 30, 2013 was due to higher royalty revenues resulting from a 2.6%increase in Effective Franchise Restaurants due to new restaurant development and a 3.6% increase in domestic same-restaurant sales, partially offset by a decrease in sales volumes of pancake and waffle dry mix. The $1.7 millionincrease in IHOP franchise revenue (other than advertising) for the nine months ended September 30, 2013 was due to higher royalty revenues resulting from a 2.5%increase in Effective Franchise Restaurants and a 1.7% increase in domestic same-restaurant sales, partially offset by a decrease in sales volumes of pancake and waffle dry mix. The decreases in IHOP franchise expenses (other than advertising) for both the three and nine months ended September 30, 2013 were primarily due to lower purchase volumes of pancake and waffle dry mix, partially offset by higher bad debt expense.

IHOP’s franchise expenses are substantially higher than Applebee’s due to advertising expenses. Franchise fees designated for IHOP’s national advertising fund and local marketing and advertising cooperatives are recognized as revenue and expense of franchise operations. However, Applebee’s national advertising fund activity constitutes an agency transaction and therefore is not recognized as franchise revenue and expense. The increases in IHOP advertising revenue and expense for both the three and nine months ended September 30, 2013 were primarily due to the increases in Effective Franchise Restaurants and the increases in domestic franchise same-restaurant sales that also impacted IHOP franchise revenue as noted above.

The $7.8 millionincrease in franchise segment profit for the three months ended September 30, 2013 was primarily due to an increase in Applebee's Effective Franchise Restaurants due to the refranchising of company-operated restaurants, an increase in IHOP's Effective Franchise Restaurants due to new restaurant development and a 3.6% increase in IHOP domestic same-restaurant sales. The $16.4 millionincrease in franchise segment profit for the nine months ended September 30, 2013 was primarily due to an increase in Applebee's Effective Franchise Restaurants due to the refranchising of company-operated restaurants, and an increase in IHOP's Effective Franchise Restaurants due to new restaurant development.

Company Restaurant Operations

	Three Months Ended						Favorable (Unfavorable) Variance			Nine Months Ended						Favorable (Unfavorable) Variance
	September 30,									September 30,
	2013			2012						2013			2012
	(In millions, except number of restaurants)
Effective Company Restaurants:(1)
Applebee’s	23			144			(121		)	23			156			(133		)
IHOP	12			17			(5		)	12			15			(3		)
Company restaurant sales	$	15.4		$	79.6		$	(64.2	)	$	48.1		$	274.3		$	(226.2	)
Company restaurant expenses	15.7			68.6			52.9			48.2			232.3			184.1
Company restaurant segment profit	$	(0.3	)	$	11.0		$	(11.3	)	$	(0.1	)	$	42.0		$	(42.1	)
Segment profit as % of revenue (2)	(1.8		)%	13.9		%				0.5		%	15.3		%

_____________________________________________________

⁽¹⁾ Effective Company Restaurants are the weighted average number of company restaurants open in a given fiscal period, adjusted to account for company restaurants open for only a portion of the period.

⁽²⁾ Percentages calculated on actual amounts, not rounded amounts presented above.

As of September 30, 2013, company restaurant operations comprised 23 Applebee’s company-operated restaurants and 10 IHOP company-operated restaurants. We operate these restaurants primarily to test new remodel programs, operating procedures, products, technology, cooking platforms and service models. Additionally, from time to time we may also operate restaurants reacquired from IHOP franchisees on a temporary basis until the restaurants are refranchised. Applebee's Effective Company Restaurants for the three and nine months ended September 30, 2012 include the 154 restaurants, refranchised as noted under "Franchise Operations" above, for the period of time they were operated as company restaurants.

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Consolidated company restaurant sales and expenses for the three months ended September 30, 2013decreased$64.2 million and $52.9 million, respectively, of which $62.9 million and $52.3 million, respectively, were due to the refranchising of 154 Applebee's company-operated restaurants in 2012. Consolidated company restaurant sales and expenses for the nine months ended September 30, 2013decreased$226.2 million and $184.1 million, respectively, of which $223.7 million and $183.9 million, respectively, were due to the refranchising of 154 Applebee's company-operated restaurants in 2012.

The decreases in company restaurant segment profit for the three and nine months ended September 30, 2013 were primarily due to the refranchising of the 154 Applebee's company-operated restaurants in 2012.

Rental Operations

	Three Months Ended						Favorable (Unfavorable) Variance		Nine Months Ended						Favorable (Unfavorable) Variance
	September 30,								September 30,
	2013			2012					2013			2012
	(In millions)
Rental revenues	$	31.0		$	30.9		$	0.1	$	92.7		$	92.1		$	0.6
Rental expenses	24.2			24.2			0.0		72.9			73.1			0.2
Rental operations segment profit	$	6.8		$	6.7		$	0.1	$	19.8		$	19.0		$	0.8
Segment profit as % of revenue (1)	22.1		%	21.6		%			21.3		%	20.7		%

_____________________________________________________

⁽¹⁾ Percentages calculated on actual amounts, not rounded amounts presented above

Rental operations relate primarily to IHOP franchise restaurants. Rental income includes revenue from operating leases and interest income from direct financing leases. Rental expenses are costs of prime operating leases and interest expense on prime capital leases on certain franchise restaurants.

Rental revenue, expenses and segment profit for the three months ended September 30, 2013 were consistent with the same periods of 2012. Rental revenue for the nine months ended September 30, 2013increased due to the lower write-off of deferred lease revenue associated with franchise restaurants whose lease agreements were prematurely terminated, as compared to the same period of 2012. The rental revenue increase was partially offset by a decline in interest income as direct financing leases are repaid. The increase in rental segment profit during the nine months ended September 30, 2013 was primarily due to the lower write-off of deferred lease revenue associated with franchise restaurants whose lease agreements were prematurely terminated.

Financing Operations

	Three Months Ended						Favorable (Unfavorable) Variance		Nine Months Ended						Favorable (Unfavorable) Variance
	September 30,								September 30,
	2013			2012					2013			2012
	(In millions)
Financing revenues	$	3.2		$	3.2		$	0.0	$	10.2		$	11.4		$	(1.2	)
Financing expenses	—			0.0			0.0		0.2			1.6			1.4
Financing operations segment profit	$	3.2		$	3.2		$	0.0	$	10.0		$	9.8		$	0.2
Segment profit as % of revenue (1)	100.0		%	99.5		%			97.6		%	86.1		%

_____________________________________________________

⁽¹⁾ Percentages calculated on actual amounts, not rounded amounts presented above

All financing operations relate to IHOP franchise restaurants. Financing operations revenue primarily consists of interest income from the financing of franchise fees and equipment leases, as well as sales of equipment associated with refranchised IHOP restaurants and a portion of franchise fees for restaurants taken back from franchisees not allocated to IHOP intellectual property. Financing expenses are primarily the cost of restaurant equipment associated with refranchised IHOP restaurants.

Financing revenue, expenses and segment profit for the three months ended September 30, 2013 were consistent with the same period of the prior year. The decrease in financing revenue for the nine months ended September 30, 2013 was due to a decrease in interest revenue resulting from the progressive decline in note balances due to repayments and less refranchising activity related to IHOP restaurants reacquired from franchisees. The decrease in financing expenses for the nine months ended September 30, 2013 was due to less refranchising activity related to IHOP restaurants reacquired from franchisees. Segment profit nine months ended September 30, 2013 was slightly higher as the decline in interest revenue was offset by lower losses on IHOP refranchising activity.

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OTHER EXPENSE AND INCOME ITEMS

	Three Months Ended						Favorable (Unfavorable) Variance			Nine Months Ended						Favorable (Unfavorable) Variance
	September 30,									September 30,
	2013			2012						2013			2012
	(In millions)
General and administrative expenses	$	35.3		$	48.7		$	13.4		$	105.0		$	125.6		$	20.6
Interest expense	25.0			28.9			3.9			75.2			88.8			13.5
Amortization of intangible assets	3.1			3.1			0.0			9.2			9.2			0.0
Closure and impairment charges	(0.4		)	0.4			0.8			0.8			1.3			0.5
Loss on extinguishment of debt	—			2.3			2.3			0.0			4.9			4.9
Debt modification costs	—			—			—			1.3			—			(1.3		)
Gain on disposition of assets	(0.1		)	(73.7		)	(73.6		)	(0.3		)	(89.6		)	(89.3		)
Provision for income taxes	11.4			26.0			14.6			33.4			54.2			20.9

General and Administrative Expenses

The decrease in G&A expenses for the three months ended September 30, 2013 compared to the same period of the prior year was primarily due to a $9.0 million charge recorded in the third quarter of 2012 related to settlement of litigation that commenced prior to our acquisition of Applebee's. In addition, compensation costs were lower by approximately $4.4 million, primarily due to: (i) lower severance costs, (ii) lower stock-based compensation costs and (iii) lower salaries and benefits resulting from the restructuring initiatives announced in the third quarter of 2012 and from the refranchising of Applebee's company-operated restaurants. The declines in these components of compensation costs were partially offset by increased bonus costs.

The decrease in G&A expenses for the nine months ended September 30, 2013 compared to the same period of the prior year was primarily due to compensation costs that were lower by approximately $12.1 million and to a $9.0 million charge recorded in the third quarter of 2012 related to settlement of litigation that commenced prior to our acquisition of Applebee's. The decline in compensation costs was primarily due to: (i) lower salaries and benefits resulting from the restructuring initiatives announced in the third quarter of 2012 and from the refranchising of Applebee's company-operated restaurants; (ii) lower stock-based compensation costs and (iii) lower severance costs, partially offset by higher bonus expenses. The lower aggregate compensation costs were partially offset by higher costs for professional services and consumer research.

Interest Expense

Interest expense for the three months ended September 30, 2013decreased by $3.9 million compared to the same period of the prior year due to a reduction of outstanding debt balances. Average interest-bearing debt outstanding (our Term Loans,

31

Senior Notes and financing obligations) during the three months ended September 30, 2013 was approximately $210 million lower than the same period of the prior year.

Interest expense for the nine months ended September 30, 2013decreased by $13.5 million compared to the same period of the prior year primarily due to a reduction of outstanding debt balances. Average interest-bearing debt outstanding (our Term Loans, Senior Notes and financing obligations) during the nine months ended September 30, 2013 was approximately $245 million lower than the same period of the prior year. Additionally, the variable interest rate on our Term Loans declined 50 basis points from 4.25% to 3.75% as a result of a debt modification in February 2013 (see “Liquidity and Capital Resources - February 2013 Amendment to Credit Agreement”) and the stability in LIBOR interest rates since February 2013.

Loss on Extinguishment of Debt

During the three and nine months ended September 30, 2013 and 2012, the Company recognized the following loss on extinguishment of debt:

Quarter Ended	Instrument Repaid/Retired	Face Amount Repaid/Retired		Cash Paid		Loss (1)
		(In millions)
March 2013	Term Loans	$	1.2	$	1.2	$	0.0
June 2013	Term Loans	1.2		1.2		0.0
	Total 2013	$	2.4	$	2.4	$	0.0
March 2012	Term Loans	$	70.5	$	70.5	$	1.9
March 2012	Senior Notes	5.0		5.5		0.7
September 2012	Term Loans	108.2		108.2		2.3
	Total 2012	$	183.7	$	184.2	$	4.9

_____________________________________________________

⁽¹⁾ Including write-off of the discount and deferred financing costs related to the debt retired.

Any write-off of the discount and deferred financing costs is proportional to the amount of debt retired. As the amount of debt retired in the first three quarters of 2013 was substantially less than the debt retired in the first three quarters of 2012, the loss on debt extinguishment was substantially smaller as well.

Debt Modification Costs

On February 4, 2013, we entered into Amendment No. 2 (“Amendment No. 2”) to the Credit Agreement dated October 8, 2010. The key provisions of Amendment No. 2 are discussed under “Liquidity and Capital Resources - February 2013 Amendment to Credit Agreement.” Fees paid to third parties of $1.3 million in connection with Amendment No. 2 were included as “Debt modification costs” in the Consolidated Statement of Comprehensive Income for the nine months ended September 30, 2013.

Gain on Disposition of Assets

We recognized gains on disposition of assets of $0.1 million and $73.7 million for the three months ended September 30, 2013 and 2012, respectively. There were no individually significant dispositions during the three months ended September 30, 2013. During the three months ended September 30, 2012, we completed the refranchising and sale of related restaurant assets of 98 Applebee's company-operated restaurants, consisting of 65 Applebee's company-operated restaurants located in Michigan and 33 restaurants located primarily in Missouri and Indiana.

We recognized gains on disposition of assets of $0.3 million and $89.6 million for the nine months ended September 30, 2013 and 2012, respectively. There were no individually significant dispositions during the nine months ended September 30, 2013. During the nine months ended September 30, 2012, we completed the refranchising and sale of related restaurant assets of 115 Applebee's company-operated restaurants, consisting of 17 restaurants in a six-state market area geographically centered around Memphis, Tennessee; 33 restaurants located primarily in Missouri and Indiana; and 65 restaurants located in Michigan.

With the completion in October 2012 of our strategy to refranchise the substantial majority of Applebee's company-operated restaurants, we do not expect significant gains or losses on dispositions of company-operated restaurants for the foreseeable future.

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Provision for Income Taxes

Our effective tax rate was 37.8% for the three months ended September 30, 2013 compared to 30.1% for the three months ended September 30, 2012. The effective tax rate in the prior year was impacted by a discrete $6.3 million state benefit. This benefit related to a reduction in state deferred taxes as a result of the refranchising of Applebee's company-operated restaurants and sale of related restaurant assets in the third quarter of 2012.

Our effective tax rate was 38.2% for the nine months ended September 30, 2013 compared to 33.2% for the nine months ended September 30, 2012. The effective tax rate in 2012 was lower primarily due to a discrete $6.3 million state benefit related to a reduction in state deferred taxes as a result of the refranchising of Applebee's company-operated restaurants and sale of related restaurant assets that was completed in 2012. Additionally, income tax credits, primarily FICA tip and other compensation-related tax credits, were higher in 2012 because Applebee’s had more company-operated restaurants during 2012 prior to completion of the refranchisings.

Liquidity and Capital Resources

Credit Facilities

We have a $75.0 million revolving credit facility (the “Revolving Facility”) under our Credit Agreement. During the nine months ended September 30, 2013, we did not utilize the Revolving Facility. Our available borrowing capacity under the Revolving Facility is reduced by outstanding letters of credit, which totaled $10.9 million at September 30, 2013.

Based on our current level of operations, we believe that our cash flow from operations, available cash on hand and available borrowing capacity under our Revolving Facility will be adequate to meet our investing and financing cash needs over the next twelve months.

Debt Covenants

Pursuant to our Credit Agreement, we are required to comply with a maximum consolidated leverage ratio and a minimum consolidated cash interest coverage ratio. Our current maximum consolidated leverage ratio of total debt (net of unrestricted cash not to exceed $75 million) to adjusted EBITDA is 7.0:1. Our current minimum ratio of adjusted EBITDA to consolidated cash interest is 1.75:1. Compliance with each of these ratios is required quarterly, calculated on a trailing four-quarter basis. The ratio thresholds become more rigorous over time. The maximum consolidated leverage ratio, which began at 7.5:1, declines in annual 25-basis-point decrements beginning with the first quarter of 2012 to 6.5:1 by the first quarter of 2015, then to 6.0:1 for the first quarter of 2016 until the Credit Agreement expires in October 2017. The minimum consolidated cash interest coverage ratio began at 1.5:1, increased to 1.75:1 beginning with the first quarter of 2013 and will increase to 2.0:1 beginning with the first quarter of 2016 and will remain at that level until the Credit Agreement expires in October 2017. There are no financial maintenance covenants associated with our Senior Notes due October 30, 2018 (the “Senior Notes”).

For the trailing four quarters ended September 30, 2013, our consolidated leverage ratio was 4.7:1. This compares with a ratio of 4.6:1 at December 31, 2012. The consolidated leverage ratio increased slightly from December 31, 2012 primarily due to a decrease in EBITDA because of the refranchising of Applebee's company-operated restaurants in 2012.

For the trailing four quarters ended September 30, 2013, our consolidated cash interest coverage ratio was 2.6:1, slightly higher than the ratio of 2.5:1 at December 31, 2012. The increase in the ratio was due to a favorable decrease in cash interest charges partially offset by an unfavorable decrease in EBITDA because of the refranchising of Applebee's company-operated restaurants in 2012. See Exhibit 12.1 for calculation of our consolidated leverage and consolidated cash interest coverage ratios at September 30, 2013.

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The adjusted EBITDA used in calculating these ratios is considered to be a non-U.S. GAAP measure. The reconciliation between our income before income taxes, as determined in accordance with U.S. GAAP, and adjusted EBITDA used for covenant compliance purposes is as follows:

Trailing Twelve Months Ended September 30, 2013

	(In thousands)
U.S. GAAP income before income taxes	$	119,124
Interest charges	117,440
Loss on extinguishment of debt	673
Depreciation and amortization	35,298
Non-cash stock-based compensation	9,724
Impairment and closure charges	3,724
Other	13,163
Gain on sale of assets	(13,281		)
Adjusted EBITDA	$	285,865

We believe this non-U.S. GAAP measure is useful in evaluating our results of operations in reference to compliance with the debt covenants discussed above. This non-U.S. GAAP measure is not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies. Non-U.S. GAAP measures should be considered in addition to, and not as a substitute for, the U.S. GAAP information contained within our financial statements.

February 2013 Amendment to Credit Agreement

On February 4, 2013, we entered into Amendment No. 2 (“Amendment No. 2”) to the Credit Agreement. Pursuant to Amendment No. 2, the interest rate margin for term loans under the Credit Agreement (“Term Loans”) was reduced from 2.00% to 1.75% for Base Rate-denominated loans and from 3.00% to 2.75% for LIBOR-based loans. The interest rate margin for loans under the Revolving Facility (“Revolving Loans”) was reduced from 3.50% to 1.75% for Base Rate-denominated loans and from 4.50% to 2.75% for LIBOR-based loans. The interest rate floors used to determine the Base Rate and LIBOR reference rates for Term Loans were reduced from 2.25% to 2.00% for Base Rate-denominated Term Loans and from 1.25% to 1.00% for LIBOR-based Term Loans. The interest rate floors for Revolving Loans were eliminated. The commitment fee for the unused portion of the Revolving Facility was reduced from 0.75% to 0.50% and, if the consolidated leverage ratio is lower than 4.75:1, from 0.50% to 0.375%. Based on LIBOR rates in effect through September 30, 2013, Amendment No. 2 lowered the interest rate on our LIBOR-based Term Loans from 4.25% to 3.75%.

In addition, Amendment No. 2 established the following thresholds for mandatory repayments of Term Loans: 50% of “Excess Cash Flow” (as defined in the Credit Agreement) if our consolidated leverage ratio is 5.75:1 or greater; 25% of Excess Cash Flow if our consolidated leverage ratio is less than 5.75:1 and greater than or equal to 5.25:1; and 0% of Excess Cash Flow if our consolidated leverage ratio is less than 5.25:1. Amendment No. 2 also revised the definition of “Permitted Amount” so that it is now measured on a quarterly basis for purposes of computing the permitted amount of restricted payments, which includes payment of dividends on and repurchases of our common stock. Finally, Amendment No.2 revised the definition of Excess Cash Flow to eliminate the deduction for any extraordinary receipts or disposition proceeds. All other material provisions, including the maturity date of the Credit Agreement and covenants under the Credit Agreement, remain unchanged.

Concurrent with Amendment No. 2, on February 4, 2013, we borrowed $472.0 million under our Term Facility, retiring the same amount of then-outstanding borrowings under Amendment No. 1 to the Credit Agreement. Pursuant to Amendment No. 2, our minimum mandatory repayment of 1% per year is now based on this balance of $472.0 million, as compared to the previous outstanding balance of $742.0 million borrowed concurrent with Amendment No. 1 to the Credit Agreement.

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Restricted Payments

The Credit Agreement contains covenants considered customary for similar types of facilities that limit certain permitted restricted payments, including those related to dividends on and repurchases of our common stock. Such restricted payments are limited to a cumulative amount comprised of (i) a general restricted payments allowance of $35.0 million, plus (ii) 50% of Excess Cash Flow for each fiscal quarter in which the consolidated leverage ratio is greater than 5.75:1; (iii) 75% of Excess Cash Flow for each fiscal quarter if the consolidated leverage ratio is less than 5.75:1 and greater than or equal to 5.25:1; (iv) 100% of Excess Cash Flow for each fiscal quarter in which the consolidated leverage ratio is less than 5.25:1; and (v) proceeds from the exercise of options to purchase our common stock, less any amounts paid as dividends or to repurchase our common stock. We made restricted payments of $67.9 million during the nine months ended September 30, 2013, comprised of cash dividends on our common stock of $43.2 million and repurchases of common stock of $24.7 million. Our permitted amount of future restricted payments under the Credit Agreement, calculated as of September 30, 2013, was approximately $139 million.

The Indenture under which our Senior Notes were issued also contains a limitation on restricted payments that is calculated on an annual basis. The permitted amount of future restricted payments under the Indenture, calculated as of December 31, 2012, was approximately $140 million.

Our Senior Notes, Term Loans and Revolving Loans are also subject to affirmative and negative covenants considered customary for similar types of facilities, including, but not limited to, covenants with respect to incremental indebtedness, liens, investments, affiliate transactions, and capital expenditures. These covenants are subject to a number of important limitations, qualifications and exceptions. Certain of these covenants will not be applicable to the Senior Notes during any time that the Senior Notes maintain investment grade ratings.

Potential Refinancing of Indebtedness

Our Credit Agreement expires in October 2017 and our Senior Notes are due in October 2018. We continually review all available options to efficiently manage our debt portfolio in light of, among other things, prevailing interest rates, the current and forecasted economic climate and our overall business strategy. We may seek to refinance some or all of our indebtedness prior to the expiration or repayment dates. In the event the Senior Notes are repaid prior to October 2018, we may be liable for certain make-whole payments. These make-whole payments, should they be required, will be determined in accordance with the terms of the Indenture under which the Senior Notes were issued.

Cash Flows

In summary, our cash flows were as follows:

	Nine Months Ended
	September 30,
	2013			2012			Variance
	(In millions)
Net cash provided by operating activities	$	102.8		$	68.1		$	34.7
Net cash provided by investing activities	6.0			135.2			(129.2		)
Net cash used in financing activities	(77.8		)	(192.2		)	114.4
Net increase in cash and cash equivalents	$	31.0		$	11.1		$	19.9

Operating Activities

Cash provided by operating activities increased$34.7 million for the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012. For the first nine months of 2013, our net income plus the non-cash reconciling items shown in our statements of cash flows (primarily depreciation, gains on asset sales, deferred taxes and stock-based compensation) increased by $30.1 million compared to 2012. Lower G&A expenses, lower income taxes and lower interest costs for the nine months ended September 30, 2013 compared to the same period of 2012 were partially offset by the lower segment profit that resulted from the refranchising of Applebee's company-operated restaurants. Cash payments for income taxes decreased$19.3 million primarily due to lower gains on asset dispositions, partially offset by lower income tax credits, primarily FICA tip and other compensation-related tax credits, that decreased due to the refranchising of Applebee's company-operated restaurants. Cash payments for interest decreased$19.0 million compared to 2012 primarily due to lower debt balances.

35

Additionally, there was a favorable change in net working capital. Net changes in working capital provided cash of $24.0 million in the first nine months of 2013 compared to $19.4 million of cash provided in the first nine months of 2012, a favorable change of $4.6 million that was due primarily to the fluctuation of prepaid rent balances due to timing.

Investing Activities

Net cash provided by investing activities of $6.0 million for the nine months ended September 30, 2013 was primarily attributable to $10.3 million in principal receipts from notes, equipment contracts and other long-term receivables, partially offset by $4.6 million in capital expenditures. Capital expenditures are expected to be approximately $7 million for fiscal 2013.

Financing Activities

Financing activities used net cash of $77.8 million for the nine months ended September 30, 2013. Cash used in financing activities primarily consisted of cash dividends on common stock totaling $43.2 million, repurchases of our common stock totaling $24.7 million, repayments of capital lease, financing obligations and long-term debt of $7.5 million, an increase in marketing fund restricted cash of $3.1 million and a payment of $1.3 million for costs associated with Amendment No. 2. Cash provided by financing activities primarily consisted of a net cash inflow of $4.4 million related to equity awards.

Free Cash Flow

We define “free cash flow” for a given period as cash provided by operating activities, plus receipts from notes, equipment contracts and other long-term receivables (collectively, “long-term receivables”), less additions to property and equipment, principal payments on capital lease and financing obligations and the mandatory annual repayment of 1% of the principal balance of our Term Loans. We believe this information is helpful to investors to determine our cash available for general corporate purposes and for the return of cash to shareholders pursuant to our capital allocation strategy.

Free cash flow is considered to be a non-U.S. GAAP measure. Reconciliation of the cash provided by operating activities to free cash flow is as follows:

	Nine Months Ended
	September 30,
	2013			2012			Variance
	(In millions)
Cash flows provided by operating activities	$	102.8		$	68.1		$	34.7
Principal receipts from long-term receivables	10.3			10.3			—
Additions to property and equipment	(4.6		)	(13.5		)	8.9
Principal payments on capital lease and financing obligations	(7.5		)	(8.2		)	0.7
Mandatory 1% repayment of principal balance of Term Loans	(2.4		)	(5.6		)	3.2
Free cash flow	$	98.6		$	51.1		$	47.5

This non-U.S. GAAP measure is not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies. Non-U.S. GAAP measures should be considered in addition to, and not as a substitute for, the U.S. GAAP information contained within our financial statements.

Pursuant to our Capital Allocation Strategy adopted in February 2013, we returned $67.9 million of free cash flow to shareholders in the form of cash dividends on our common stock totaling $43.2 million and repurchases of our common stock totaling $24.7 million.

36

Dividends

The Board of Directors approved payment of a third quarter cash dividend of $0.75 per share of our common stock, paid at the close of business on September 27, 2013 to the stockholders of record as of the close of business on September 10, 2013. The Board of Directors has also approved payment of a fourth quarter cash dividend of $0.75 per share of our common stock, payable at the close of business on December 27, 2013 to the stockholders of record as of the close of business on December 10, 2013.

Off-Balance Sheet Arrangements

As of September 30, 2013, we had no off-balance sheet arrangements, as defined in Item 303(a)(4) of SEC Regulation S-K.

Contractual Obligations and Commitments

There were no material changes to the contractual obligations table as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2012.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with U.S. GAAP requires we make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net revenues and expenses in the reporting period. We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. We continually review the estimates and underlying assumptions to ensure they are appropriate for the circumstances. Accounting assumptions and estimates are inherently uncertain and actual results may differ materially from our estimates.

A summary of our critical accounting estimates is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2012. During the nine months ended September 30, 2013, there were no significant changes in our estimates and critical accounting policies.

See Note 3, “Accounting Policies,” in the Notes to Consolidated Financial Statements for a discussion of recently adopted accounting standards and newly issued accounting standards.

37

Item 3.  Quantitative and Qualitative Disclosures about Market Risk.

There were no material changes from the information contained in the Company’s Annual Report on Form 10-K as of December 31, 2012.

Item 4.  Controls and Procedures.

Disclosure Controls and Procedures.

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting.

There have been no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

38

Part II. OTHER INFORMATION

Item 1.  Legal Proceedings.

We are subject to various lawsuits, administrative proceedings, audits, and claims arising in the ordinary course of business. Some of these lawsuits purport to be class actions and/or seek substantial damages. We are required to record an accrual for litigation loss contingencies that are both probable and reasonably estimable. Legal fees and expenses associated with the defense of all of our litigation are expensed as such fees and expenses are incurred. Management regularly assesses our insurance deductibles, analyzes litigation information with our attorneys and evaluates our loss experience in connection with pending legal proceedings. While we do not presently believe that any of the legal proceedings to which we are currently a party will ultimately have a material adverse impact on us, there can be no assurance that we will prevail in all the proceedings we are party to, or that we will not incur material losses from them.

Item 1A.  Risk Factors.

There were no material changes from the risk factors set forth under Item 1A of Part I of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

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 (c)
July 1, 2013 – July 28, 2013(a)	76	$71.58	—	$85,500,000
July 29, 2013 – August 25, 2013(b)	79,702	$68.23	75,106	$80,400,000
August 26, 2013 – September 29, 2013(b)	76,528	$66.42	75,891	$75,300,000
Total	156,306	$67.35	150,997	$75,300,000

^(a) These amounts represent shares owned and tendered by employees to satisfy tax withholding obligations on the vesting of restricted stock awards.

^(b) These amounts include shares owned and tendered by employees to satisfy tax withholding obligations on the vesting of restricted stock awards totaling 4,596 shares at an average price of $69.41 during the month ended August 25, 2013 and 637 shares at an average price of $67.70 during the month ended September 29, 2013.

^(c)  On February 26, 2013, our Board of Directors approved a stock repurchase authorization of up to $100 million of our common stock, replacing the previously announced $45 million authorization. Repurchases are subject to prevailing market prices and may take place in open market transactions and in privately negotiated transactions, based on business, market, applicable legal requirements and other considerations. The program does not require the repurchase of a specific number of shares and may be terminated at any time.

Item 3.  Defaults Upon Senior Securities.

None.

Item 4.  Mine Safety Disclosures.

Not Applicable.

Item 5.  Other Information.

None.

39

Item 6. Exhibits.

3.1	Restated Certificate of Incorporation of DineEquity, Inc. (Exhibit 99.3 to DineEquity, Inc.’s Report on Form 8-K filed December 18, 2012 is incorporated herein by reference).
3.2	Amended Bylaws of DineEquity, Inc. (Exhibit 3.2 to DineEquity, Inc.’s Report on Form 8-K filed June 2, 2008 is incorporated herein by reference).
12.1	Computation of Consolidated Leverage Ratio and Cash Interest Coverage Ratio for the trailing twelve months ended September 30, 2013.*
31.1	Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
101.INS	XBRL Instance Document.***
101.SCH	XBRL Schema Document.***
101.CAL	XBRL Calculation Linkbase Document.***
101.DEF	XBRL Definition Linkbase Document.***
101.LAB	XBRL Label Linkbase Document.***
101.PRE	XBRL Presentation Linkbase Document.***

*    Filed herewith.

** 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.

40

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		DineEquity, Inc. (Registrant)
Dated:	October 29, 2013	By:	/s/ Julia A. Stewart
			Julia A. Stewart Chairman and Chief Executive Officer (Principal Executive Officer)
Dated:	October 29, 2013	By:	/s/ Thomas W. Emrey
			Thomas W. Emrey Chief Financial Officer (Principal Financial Officer)
Dated:	October 29, 2013	By:	/s/ Greggory Kalvin
			Greggory Kalvin Senior Vice President, Corporate Controller (Principal Accounting Officer)

41

EX-12.1

Exhibit 12.1

DINEEQUITY, INC.

Computation of Consolidated Leverage Ratio and Consolidated Cash Interest Coverage Ratio

Trailing Twelve Months Ended September 30, 2013

(in thousands, except ratios)

Consolidated Leverage Ratio Calculation:
Financial Covenant Debt (1)	$	1,345,523
Consolidated EBITDA (1)	$	285,865
Consolidated Leverage Ratio	4.7
Consolidated Interest Coverage Ratio Calculation:
Consolidated EBITDA (1)	$	285,865
Consolidated Cash Interest Charges (1)	$	111,132
Consolidated Interest Coverage Ratio	2.6

⁽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.

EX-31.1

Exhibit 31.1

Certification Pursuant to

Rule 13a-14(a) of the

Securities Exchange Act of 1934, As Amended

I, Julia A. Stewart, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q 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.

Dated:	October 29, 2013	/s/ Julia A. Stewart
		Julia A. Stewart Chairman and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification Pursuant to

Rule 13a-14(a) of the

Securities Exchange Act of 1934, As Amended

I, Thomas W. Emrey, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q 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.

Dated:	October 29, 2013	/s/ Thomas W. Emrey
		Thomas W. Emrey Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

Certification Pursuant to

18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of DineEquity, Inc. (the “Company”) for the quarter ended September 30, 2013, as filed with the Securities and Exchange Commission on October 29, 2013 (the “Report”), Julia A. Stewart, as Chairman and Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of her knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:	October 29, 2013	/s/ Julia A. Stewart
		Julia A. Stewart Chairman and Chief Executive Officer (Principal Executive Officer)

This certification accompanies the 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. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act except to the extent the Company expressly and specifically incorporates it by reference in such filing.

EX-32.2

Exhibit 32.2

Certification Pursuant to

18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of DineEquity, Inc. (the “Company”) for the quarter ended September 30, 2013, as filed with the Securities and Exchange Commission on October 29, 2013 (the “Report”), Thomas W. Emrey, as Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:	October 29, 2013	/s/ Thomas W. Emrey
		Thomas W. Emrey Chief Financial Officer (Principal Financial Officer)

This certification accompanies the 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. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act except to the extent the Company expressly and specifically incorporates it by reference in such filing.

XML

Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2013

Accounting Changes and Error Corrections [Abstract]

Accounting Standards Adopted in the Current Fiscal Year

Accounting Standards Adopted in the Current Fiscal Year

In July 2012, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2012-02, Intangibles - Goodwill and Other: Testing Indefinite Lived Intangibles for Impairment (“ASU 2012-02”). ASU 2012-02 allows an entity the option to first assess qualitative factors in determining whether it is necessary to perform a quantitative impairment test on indefinite-lived intangibles. An entity electing to perform a qualitative assessment is no longer required to calculate the fair value of an indefinite-lived intangible asset unless the entity determines, based on the qualitative assessment, that it is more likely than not that the asset is impaired. The adoption of ASU 2012-02 as of January 1, 2013 did not have any impact on the Company’s consolidated financial statements.

In February 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). The amendments in ASU 2013-02 do not change the current requirements for reporting net income or other comprehensive income. However, the amendments require disclosure of amounts reclassified out of accumulated other comprehensive income in their entirety, by component, on the face of the statement of operations or in the notes thereto. Amounts that are not required to be reclassified in their entirety to net income must be cross-referenced to other disclosures that provide additional detail. The adoption of ASU 2013-02 as of January 1, 2013 did not have any impact on the Company's consolidated financial statements or disclosures because the Company had no material amount of reclassifications.

XML

Consolidated Statements of Comprehensive Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013		Sep. 30, 2012
Segment Revenues:
Franchise and restaurant revenues	$ 127,137	$ 182,246	$ 379,619		$ 587,801
Rental revenues	30,990	30,920	92,724		92,096
Financing revenues	3,156	3,152	10,223		11,394
Total segment revenues	161,283	216,318	482,566		691,291
Segment Expenses:
Franchise and restaurant expenses	44,091	95,689	130,875		313,424
Rental expenses	24,149	24,237	72,953		73,075
Financing expenses	0	15	245		1,586
Total segment expenses	68,240	119,941	204,073		388,085
Gross segment profit	93,043	96,377	278,493		303,206
General and administrative expenses	35,331	48,737	105,004		125,608
Interest expense	24,979	28,896	75,230		88,767
Amortization of intangible assets	3,072	3,072	9,212		9,222
Closure and impairment charges	(392)	420	770		1,264
Loss on extinguishment of debt	0	2,306	36	[1]	4,917	[1]
Debt modification costs	0	0	1,296		0
Gain on disposition of assets	(72)	(73,650)	(326)		(89,642)
Income before income taxes	30,125	86,596	87,271		163,070
Income tax provision	(11,395)	(26,023)	(33,365)		(54,215)
Net income	18,730	60,573	53,906		108,855
Other comprehensive (loss) income, net of tax:
Adjustment to unrealized loss on available-for-sale investments	0	0	0		140
Foreign currency translation adjustment	3	5	(5)		4
Total comprehensive income	18,733	60,578	53,901		108,999
Net income available to common stockholders:
Net income	18,730	60,573	53,906		108,855
Less: Net income allocated to unvested participating restricted stock	(296)	(1,187)	(925)		(2,477)
Less: Accretion of Series B Convertible Preferred Stock	0	(688)	0		(2,033)
Net income available to common stockholders	$ 18,434	$ 58,698	$ 52,981		$ 104,345
Net income available to common stockholders per share:
Basic (per share)	$ 0.98	$ 3.26	$ 2.80		$ 5.84
Diluted (per share)	$ 0.97	$ 3.14	$ 2.76		$ 5.66
Weighted average shares outstanding:
Basic (in shares)	18,831	18,006	18,898		17,859
Diluted (in shares)	19,085	18,924	19,166		18,801
Dividends declared per common share	$ 0.75	$ 0	$ 2.25		$ 0
Dividends paid per common share	$ 0.75	$ 0	$ 2.25		$ 0

[1] Including write-off of the discount and deferred financing costs related to the debt retired.

XML

Income Taxes

9 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The effective tax rate was 38.2% for the nine months ended September 30, 2013 as compared to 33.2% for the nine months ended September 30, 2012. The effective tax rate in 2012 was lower primarily due to a discrete $6.3 million state benefit related to a reduction in state deferred taxes as a result of the refranchising of Applebee's company-operated restaurants and sale of related restaurant assets that was completed in 2012. Additionally, income tax credits, primarily FICA tip and other compensation-related tax credits, were higher in 2012 because Applebee’s had more company-operated restaurants during that year prior to completion of the refranchisings.

 The total gross unrecognized tax benefit as of September 30, 2013 and December 31, 2012 was $2.0 million and $6.7 million, respectively, excluding interest, penalties and related tax benefits. The decrease of $4.7 million is primarily related to recent settlements with taxing authorities. The Company estimates the unrecognized tax benefits may decrease over the upcoming 12 months by an amount up to $0.7 million related to settlements with taxing authorities and the lapse of statutes of limitations. For the remaining liability, due to the uncertainties related to these tax matters, the Company is unable to make a reasonably reliable estimate when cash settlement with a taxing authority will occur.

As of September 30, 2013, the accrued interest and penalties were $2.6 million and $0.1 million, respectively, excluding any related income tax benefits. As of December 31, 2012, accrued interest and penalties were $1.4 million and $0.2 million, respectively, excluding any related income tax benefits. The increase of $1.2 million of accrued interest is primarily related to an increase in unrecognized tax benefits as a result of recent audits by taxing authorities. The Company recognizes interest accrued related to unrecognized tax benefits and penalties as a component of the income tax provision recognized in the Consolidated Statements of Comprehensive Income.

The Company files federal income tax returns and the Company or one of its subsidiaries file income tax returns in various state and foreign jurisdictions. With few exceptions, the Company is no longer subject to federal, state or non-United States tax examinations by tax authorities for years before 2008. In the second quarter of 2013, the Internal Revenue Service (“IRS”) issued a Revenue Agent’s Report (“RAR”) related to its examination of the Company’s U.S federal income tax return for the tax years 2008 to 2010. The Company disagrees with a portion of the proposed assessments and has contested them through the IRS administrative appeals procedures. We anticipate the appeals process to continue into 2014. The Company continues to believe that adequate reserves have been provided relating to all matters contained in the tax periods open to examination.

XML

Long-Term Debt (Schedule of Debt) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Debt Instrument [Line Items]
Discount	$ (20,700,000)		$ (20,700,000)		$ (23,300,000)
Total Long-term Debt	1,209,700,000		1,209,700,000		1,209,500,000
Less current maturities	(4,720,000)		(4,720,000)		(7,420,000)
Long-term debt, less current maturities	1,204,998,000		1,204,998,000		1,202,063,000
Debt Instruments (Narrative) [Abstract]
Debt modification costs	0	0	1,296,000	0
Senior Secured Credit Facility, due Oct 2017, variable rate 3.75%
Debt Instrument [Line Items]
Debt interest rate (percent)	3.75%		3.75%
Senior secured credit facility due	469,600,000		469,600,000
Senior Secured Credit Facility, due Oct 2017, variable rate 4.25%
Debt Instrument [Line Items]
Debt interest rate (percent)					4.25%
Senior secured credit facility due					472,000,000
Senior Notes due Oct 2018, at a fixed rate 9.5%
Debt Instrument [Line Items]
Debt interest rate (percent)	9.50%		9.50%		9.50%
Senior Notes due October 2018, at a fixed rate of 9.5%	$ 760,800,000		$ 760,800,000		$ 760,800,000

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Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

Schedule of debt

Long-term debt consisted of the following components:
	September 30, 2013			December 31, 2012
	(In millions)
Senior Secured Credit Facility, due October 2017, at a variable interest rate of 3.75% as of September 30, 2013 and 4.25% as of December 31, 2012	$	469.6		$	472.0
Senior Notes due October 2018, at a fixed rate of 9.5%	760.8			760.8
Discount	(20.7		)	(23.3		)
Total long-term debt	1,209.7			1,209.5
Less current maturities	(4.7		)	(7.4		)
Long-term debt, less current maturities	$	1,205.0		$	1,202.1

Schedule of extinguishment of debt

During the nine months ended September 30, 2013 and 2012, the Company recognized a loss on extinguishment of debt as follows:

Quarter Ended	Instrument Repaid/Retired	Face Amount Repaid/Retired		Cash Paid		Loss(1)
		(In millions)
March 2013	Term Loans	$	1.2	$	1.2	$	0.0
June 2013	Term Loans	1.2		1.2		0.0
	Total 2013	$	2.4	$	2.4	$	0.0
March 2012	Term Loans	$	70.5	$	70.5	$	1.9
March 2012	Senior Notes	5.0		5.5		0.7
September 2012	Term Loans	108.2		108.2		2.3
	Total 2012	$	183.7	$	184.2	$	4.9

⁽¹⁾ Including write-off of the discount and deferred financing costs related to the debt retired.

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Consolidating Financial Information (Supplemental Condensed Consolidating Statement of Operations) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013		Sep. 30, 2012
Condensed Financial Statements, Captions [Line Items]
Franchise and restaurant revenues	$ 127,137	$ 182,246	$ 379,619		$ 587,801
Rental revenues	30,990	30,920	92,724		92,096
Financing revenues	3,156	3,152	10,223		11,394
Total segment revenues	161,283	216,318	482,566		691,291
Franchise and restaurant expenses	44,091	95,689	130,875		313,424
Rental expenses	24,149	24,237	72,953		73,075
Financing expenses	0	15	245		1,586
General and administrative expenses	35,331	48,737	105,004		125,608
Interest expense	24,979	28,896	75,230		88,767
Amortization of intangible assets	3,072	3,072	9,212		9,222
Closure and impairment charges	(392)	420	770		1,264
Gain on disposition of assets	(72)	(73,650)	(326)		(89,642)
Loss on extinguishment of debt	0	2,306	36	[1]	4,917	[1]
Debt modification costs	0	0	1,296		0
Intercompany dividend	0	0	0		0
Income before income taxes	30,125	86,596	87,271		163,070
Benefit (provision) for income taxes	(11,395)	(26,023)	(33,365)		(54,215)
Net income	18,730	60,573	53,906		108,855
Total comprehensive income	18,733	60,578	53,901		108,999
Parent
Condensed Financial Statements, Captions [Line Items]
Franchise and restaurant revenues	700	700	2,100		1,900
Rental revenues	0	0	0		0
Financing revenues	0	0	0		0
Total segment revenues	700	700	2,100		1,900
Franchise and restaurant expenses	600	600	2,100		1,800
Rental expenses	0	0	0		0
Financing expenses	0	0	0		0
General and administrative expenses	9,000	15,800	27,700		28,900
Interest expense	24,600	26,500	74,200		80,900
Amortization of intangible assets	0	0	0		0
Closure and impairment charges	0	0	0		0
Gain on disposition of assets	0	0	0		0
Loss on extinguishment of debt		2,300			4,900
Debt modification costs			1,300
Intercompany dividend	(39,200)	(88,700)	(116,600)		(179,700)
Income before income taxes	5,600	44,200	13,400		65,100
Benefit (provision) for income taxes	13,100	16,500	40,500		43,600
Net income	18,700	60,600	53,900		108,700
Total comprehensive income	18,700	60,600	53,900		108,800
Combined Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Franchise and restaurant revenues	126,100	181,300	376,500		585,100
Rental revenues	31,000	30,900	92,700		92,100
Financing revenues	3,200	3,200	10,200		11,400
Total segment revenues	160,300	215,400	479,400		688,600
Franchise and restaurant expenses	43,500	95,200	128,800		311,600
Rental expenses	24,100	24,200	72,900		73,100
Financing expenses	0	0	200		1,600
General and administrative expenses	26,000	32,500	76,300		95,200
Interest expense	300	2,400	1,000		7,900
Amortization of intangible assets	3,100	3,100	9,200		9,200
Closure and impairment charges	(500)	200	500		700
Gain on disposition of assets	100	(73,300)	400		(88,500)
Loss on extinguishment of debt		0			0
Debt modification costs			0
Intercompany dividend	0	0	0		0
Income before income taxes	63,500	131,100	190,000		277,800
Benefit (provision) for income taxes	(24,500)	(42,500)	(73,900)		(97,900)
Net income	39,000	88,600	116,100		179,900
Total comprehensive income	39,000	88,600	116,100		180,000
Combined Non-guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Franchise and restaurant revenues	400	300	1,000		800
Rental revenues	0	0	0		0
Financing revenues	0	0	0		0
Total segment revenues	400	300	1,000		800
Franchise and restaurant expenses	0	0	0		0
Rental expenses	0	0	0		0
Financing expenses	0	0	0		0
General and administrative expenses	300	400	900		1,400
Interest expense	0	0	0		0
Amortization of intangible assets	0	0	0		0
Closure and impairment charges	100	200	200		600
Gain on disposition of assets	(200)	(400)	(700)		(1,200)
Loss on extinguishment of debt		0			0
Debt modification costs			0
Intercompany dividend	0	0	0		0
Income before income taxes	200	100	500		0
Benefit (provision) for income taxes	0	0	0		0
Net income	200	100	500		0
Total comprehensive income	200	100	500		0
Eliminations and Reclassification
Condensed Financial Statements, Captions [Line Items]
Franchise and restaurant revenues	0	0	0		0
Rental revenues	0	0	0		0
Financing revenues	0	0	0		0
Total segment revenues	0	0	0		0
Franchise and restaurant expenses	0	0	0		0
Rental expenses	0	0	0		0
Financing expenses	0	0	0		0
General and administrative expenses	0	0	0		0
Interest expense	0	0	0		0
Amortization of intangible assets	0	0	0		0
Closure and impairment charges	0	0	0		0
Gain on disposition of assets	0	0	0		0
Loss on extinguishment of debt		0			0
Debt modification costs			0
Intercompany dividend	39,200	88,700	116,600		179,700
Income before income taxes	(39,200)	(88,700)	(116,600)		(179,700)
Benefit (provision) for income taxes	0	0	0		0
Net income	(39,200)	(88,700)	(116,600)		(179,700)
Total comprehensive income	$ (39,200)	$ (88,700)	$ (116,600)		$ (179,700)

[1] Including write-off of the discount and deferred financing costs related to the debt retired.

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Stock-Based Compensation (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended			9 Months Ended					9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Sep. 30, 2013 Stock Options	Sep. 30, 2013 Restricted Stock Units (RSUs)	Sep. 30, 2013 LTIP	Sep. 30, 2012 LTIP	Dec. 31, 2012 LTIP	Sep. 30, 2013 LTIP Minimum	Sep. 30, 2013 LTIP Maximum	Sep. 30, 2013 Board of Directors Restricted Stock Units (RSUs)	Sep. 30, 2012 Board of Directors Restricted Stock Units (RSUs)	Dec. 31, 2012 Board of Directors Restricted Stock Units (RSUs)	May 17, 2011 2011 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, number of shares authorized (in shares)																1,500,000
Total compensation cost not yet recognized						$ 5,100,000	$ 9,100,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition (in years)						1 year 8 months 12 days	1 year 9 months 18 days
Share-based compensation expense	400,000	4,100,000	6,200,000	11,200,000				(1,200,000)	1,800,000				300,000	600,000
Accrued employee compensation and benefits	$ 18,063,000		$ 18,063,000		$ 22,435,000			$ 1,100,000		$ 4,500,000					$ 2,400,000
Award vesting period (in years)								3 years
Multiplier for target award based on total shareholder return on common stock (percent)											0.00%	200.00%

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Income Taxes (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Income Tax Disclosure [Abstract]
Effective income tax rate (percent)	38.20%	33.20%
State benefit related to a reduction in state deferred taxes as a result of the refranchising of applebee's company-operated restaurants		$ 6
Gross unrecognized tax benefit	2.0		6.7
Unrecognized Tax Benefits, Decreases Resulting from Settlements with Taxing Authorities	4.7
Unrecognized tax benefits including penalties and interest expected to be paid within one year	0.7
Accrued interest on income taxes	2.6		1.4
Accrued penalties on income taxes	0.1		0.2
Increase (decrease) in accrued interest	$ 1.2

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Net Income per Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Net income	$ 18,730	$ 60,573	$ 53,906	$ 108,855
Less: Net income allocated to unvested participating restricted stock	(296)	(1,187)	(925)	(2,477)
Less: Accretion of Series B Convertible Preferred Stock	0	(688)	0	(2,033)
Net income available to common stockholders	18,434	58,698	52,981	104,345
Effect of unvested participating restricted stock in two-class calculation	1	57	3	121
Net income available to common stockholders - diluted	18,435	59,443	52,984	106,499
Weighted average outstanding shares of common stock - basic (in shares)	18,831	18,006	18,898	17,859
Dilutive effect of stock options (in shares)	254	246	268	270
Weighted average outstanding shares of common stock - diluted (in shares)	19,085	18,924	19,166	18,801
Net income per common share - basic (per share)	$ 0.98	$ 3.26	$ 2.80	$ 5.84
Net income per common share -diluted (per share)	$ 0.97	$ 3.14	$ 2.76	$ 5.66
Series B Preferred Stock
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Accretion of Series B Convertible Preferred Stock	$ 0	$ 688	$ 0	$ 2,033
Dilutive effect of series B preferred stock (in shares)	0	672	0	672
Common Stock
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Weighted average outstanding shares of common stock - diluted (in shares)	19,085	18,924	19,166	18,801

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Stock-Based Compensation (Restricted Stock) (Details) (USD $)	9 Months Ended
	Sep. 30, 2013
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward]
Restricted stock, beginning of period (in shares)	346,563
Restricted stock, granted (in shares)	88,606
Restricted stock, cash settled (in shares)	0
Restricted stock, released (in shares)	(112,625)
Restricted stock, forfeited (in shares)	(53,551)
Restricted stock, end of period (in shares)	268,993
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Weighted Average Grant Date Fair Value, Beginning balance (per share)	$ 44.74
Weighted Average Grant Date Fair Value, Granted (per share)	$ 72.16
Weighted Average Grant Date Fair Value, Cash Settled (per share)	$ 0.00
Weighted Average Grant Date Fair Value, Released (per share)	$ 30.09
Weighted Average Grant Date Fair Value, Forfeited (per share)	$ 54.76
Weighted Average Grant Date Fair Value, Ending balance (per share)	$ 57.84
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward]
Restricted stock, beginning of period (in shares)	33,242
Restricted stock, granted (in shares)	15,387
Restricted stock, cash settled (in shares)	37,184
Restricted stock, released (in shares)	(39,000)
Restricted stock, forfeited (in shares)	0
Restricted stock, end of period (in shares)	46,813
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Weighted Average Grant Date Fair Value, Beginning balance (per share)	$ 41.19
Weighted Average Grant Date Fair Value, Granted (per share)	$ 72.04
Weighted Average Grant Date Fair Value, Cash Settled (per share)	$ 72.28
Weighted Average Grant Date Fair Value, Released (per share)	$ 54.66
Weighted Average Grant Date Fair Value, Forfeited (per share)	$ 0
Weighted Average Grant Date Fair Value, Ending balance (per share)	$ 64.57
Cash Settled Restricted Stock Units Classified as Liabilities
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward]
Restricted stock, beginning of period (in shares)	37,184
Restricted stock, cash settled (in shares)	(37,184)
Restricted stock, end of period (in shares)	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Weighted Average Grant Date Fair Value, Beginning balance (per share)	$ 66.13
Weighted Average Grant Date Fair Value, Cash Settled (per share)	$ 72.28
Weighted Average Grant Date Fair Value, Ending balance (per share)	$ 0.00

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Long-Term Debt (Loss on Extinguishment of Debt) (Details) (USD $)	3 Months Ended		9 Months Ended				3 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013		Sep. 30, 2012		Jun. 30, 2013 Term Loans		Mar. 31, 2013 Term Loans		Sep. 30, 2012 Term Loans		Mar. 31, 2012 Term Loans		Mar. 31, 2012 Senior Notes
Extinguishment of Debt [Line Items]
Face Amount Repaid/Retired			$ 2,400,000		$ 183,700,000		$ 1,200,000		$ 1,200,000		$ 108,200,000		$ 70,500,000		$ 5,000,000
Cash Paid			2,400,000		184,200,000		1,200,000		1,200,000		108,200,000		70,500,000		5,500,000
Loss	$ 0	$ 2,306,000	$ 36,000	[1]	$ 4,917,000	[1]	$ 0	[1]	$ 0	[1]	$ 2,300,000	[1]	$ 1,900,000	[1]	$ 700,000	[1]

[1] Including write-off of the discount and deferred financing costs related to the debt retired.

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General

9 Months Ended

Sep. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

General

General

The accompanying unaudited consolidated financial statements of DineEquity, Inc. (the “Company”) have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The operating results for the nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the twelve months ending December 31, 2013.

The consolidated balance sheet at December 31, 2012 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.

These consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

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Accounting Policies

9 Months Ended

Sep. 30, 2013

Accounting Changes and Error Corrections [Abstract]

Accounting Policies

Accounting Policies

Accounting Standards Adopted in the Current Fiscal Year

In July 2012, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2012-02, Intangibles - Goodwill and Other: Testing Indefinite Lived Intangibles for Impairment (“ASU 2012-02”). ASU 2012-02 allows an entity the option to first assess qualitative factors in determining whether it is necessary to perform a quantitative impairment test on indefinite-lived intangibles. An entity electing to perform a qualitative assessment is no longer required to calculate the fair value of an indefinite-lived intangible asset unless the entity determines, based on the qualitative assessment, that it is more likely than not that the asset is impaired. The adoption of ASU 2012-02 as of January 1, 2013 did not have any impact on the Company’s consolidated financial statements.

In February 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). The amendments in ASU 2013-02 do not change the current requirements for reporting net income or other comprehensive income. However, the amendments require disclosure of amounts reclassified out of accumulated other comprehensive income in their entirety, by component, on the face of the statement of operations or in the notes thereto. Amounts that are not required to be reclassified in their entirety to net income must be cross-referenced to other disclosures that provide additional detail. The adoption of ASU 2013-02 as of January 1, 2013 did not have any impact on the Company's consolidated financial statements or disclosures because the Company had no material amount of reclassifications.

Newly Issued Accounting Standards Not Yet Adopted

In February 2013, the FASB issued ASU No. 2013-04, Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date (“ASU 2013-04”). The amendments in ASU 2013-04 require an entity to measure obligations resulting from joint and several liability arrangements as the amount the entity agreed to pay on the basis of the arrangement among its co-obligors plus the amount an entity expects to pay on behalf of co-obligors. ASU 2013-04 also requires an entity to disclose the nature, amount and other information about each obligation or group of similar obligations. The Company will be required to adopt ASU 2013-04 effective January 1, 2014, and is currently evaluating the potential impact, if any, on its consolidated financial statements.

In July 2013, the FASB issued ASU No. 2013-11, Income Taxes - Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”). ASU 2013-11 provides guidance on the financial statement presentation of an unrecognized tax benefit, as either a reduction of a deferred tax asset or as a liability, when a net operating loss carryforward, similar tax loss, or a tax credit carryforward exists. ASU 2013-11 may be applied on a retrospective basis, and early adoption is permitted. The Company will be required to adopt ASU 2013-11 effective January 1, 2014, and is currently evaluating the potential impact, if any, on its consolidated financial statements.

The Company reviewed all other newly issued accounting pronouncements and concluded that they either are not applicable to the Company or are not expected to have a material effect on the Company's consolidated financial statements as a result of future adoption.

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock-Based Compensation

From time to time, the Company has granted nonqualified stock options, restricted stock, cash-settled and stock-settled restricted stock units and performance units to officers, other employees and non-employee directors of the Company. Currently, the Company is authorized to grant nonqualified stock options, stock appreciation rights, restricted stock, cash-settled and stock-settled restricted stock units and performance units to officers, other employees and nonemployee directors under the DineEquity, Inc. 2011 Stock Incentive Plan (the “2011 Plan”). The 2011 Plan was approved by stockholders on May 17, 2011 and permits the issuance of up to 1,500,000 shares of the Company’s common stock. The 2011 Plan will expire in May 2021.

The nonqualified stock options generally vest ratably over a three-year period in one-third increments and have a term of ten years from the grant date. Option exercise prices equal the closing price of the Company’s common stock on the New York Stock Exchange on the date of grant. Restricted stock and restricted stock units are issued at no cost to the holder and vest over terms determined by the Compensation Committee of the Company’s Board of Directors, generally three years from the grant date.

The following table summarizes the components of the Company’s stock-based compensation expense included in general and administrative expenses in the consolidated financial statements:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
	(In millions)
Total stock-based compensation:
Equity classified award expense	$	1.2		$	2.2		$	7.1		$	8.8
Liability classified award (credit) expense	(0.8		)	1.9			(0.9		)	2.4
Total pretax stock-based compensation expense	0.4			4.1			6.2			11.2
Tax benefit	(0.2		)	(1.6		)	(2.4		)	(4.3		)
Total stock-based compensation expense, net of tax	$	0.2		$	2.5		$	3.8		$	6.9

As of September 30, 2013, total unrecognized compensation cost of $9.1 million related to restricted stock and restricted stock units and $5.1 million related to stock options is expected to be recognized over a weighted average period of 1.8 years for restricted stock and restricted stock units and 1.7 years for stock options.

Equity Classified Awards - Stock Options

The estimated fair value of the stock options granted during the nine months ended September 30, 2013 was calculated using a Black-Scholes option pricing model. The following summarizes the assumptions used in the Black-Scholes model:

Risk-free interest rate	0.78	%
Weighted average historical volatility	83.4	%
Dividend yield	4.15	%
Expected years until exercise	4.6
Forfeitures	11.0	%
Weighted average fair value of options granted	$36.00

Option balances as of September 30, 2013 and activity related to stock options for the nine months ended September 30, 2013 were as follows:

	Shares		Weighted Average Exercise Price	Weighted Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value
Outstanding at December 31, 2012	958,246		$39.67
Granted	81,328		$72.28
Exercised	(153,454	)	$36.40
Forfeited	(39,243	)	$55.78
Outstanding at September 30, 2013	846,877		$42.65	6.24	$	21,878,000
Vested at September 30, 2013 and Expected to Vest	824,671		$42.14	6.17	$	21,683,000
Exercisable at September 30, 2013	637,782		$37.31	5.49	$	19,650,000

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the closing stock price of the Company’s common stock on the last trading day of the third quarter of 2013 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on September 30, 2013. The aggregate intrinsic value will change based on the fair market value of the Company’s common stock and the number of in-the-money options.

Equity Classified Awards - Restricted Stock and Restricted Stock Units

Outstanding balances as of September 30, 2013 and activity related to restricted stock and restricted stock units for the nine months ended September 30, 2013 were as follows:

	Restricted Stock		Weighted Average Grant Date Fair Value	Restricted Stock Units		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2012	346,563		$44.74	33,242		$41.19
Granted	88,606		$72.16	15,387		$72.04
Conversion of cash-settled restricted stock units	—		—	37,184		$72.28
Released	(112,625	)	$30.09	(39,000	)	$54.66
Forfeited	(53,551	)	$54.76	—		—
Outstanding at September 30, 2013	268,993		$57.84	46,813		$64.57

Liability Classified Awards - Restricted Stock Units

	Restricted Stock Units		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2012	37,184		$66.13
Conversion to stock-settled restricted stock units	(37,184	)	$72.28
Outstanding at September 30, 2013	—		—

The Company previously had issued shares of cash-settled restricted stock units to members of the Board of Directors. Originally these instruments were expected to be settled in cash and were recorded as liabilities based on the closing price of the Company’s common stock as of each period end. In February 2013, it was determined that, pursuant to the terms of the Plan, these restricted stock units would be settled in shares of common stock and all outstanding restricted stock units were converted to equity classified awards. For the nine months ended September 30, 2013 and 2012, $0.3 million and $0.6 million, respectively, were included in pretax stock-based compensation expense for the cash-settled restricted stock units. At December 31, 2012, liabilities of $2.4 million were included as other accrued expenses in the consolidated balance sheet.

Liability Classified Awards - Long-Term Incentive Awards

The Company has granted cash long-term incentive awards (“LTIP awards”) to certain employees. Annual LTIP awards vest over a three-year period and are determined using a multiplier from 0% to 200% of the target award based on the total shareholder return of DineEquity, Inc. common stock compared to the total shareholder returns of a peer group of companies. Although LTIP awards are both denominated and paid only in cash, because the multiplier is based on the price of the Company's common stock, the awards are considered stock-based compensation in accordance with U.S. GAAP and are liability classified awards. For the nine months ended September 30, 2013 and 2012, a credit of $1.2 million and an expense of $1.8 million, respectively, were included in total stock-based compensation expense related to the LTIP awards. At September 30, 2013 and December 31, 2012, liabilities of $1.1 million and $4.5 million, respectively, related to LTIP awards were included as accrued employee compensation and benefits in the consolidated balance sheets.

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Long-Term Debt

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

Long-term debt consisted of the following components:
	September 30, 2013			December 31, 2012
	(In millions)
Senior Secured Credit Facility, due October 2017, at a variable interest rate of 3.75% as of September 30, 2013 and 4.25% as of December 31, 2012	$	469.6		$	472.0
Senior Notes due October 2018, at a fixed rate of 9.5%	760.8			760.8
Discount	(20.7		)	(23.3		)
Total long-term debt	1,209.7			1,209.5
Less current maturities	(4.7		)	(7.4		)
Long-term debt, less current maturities	$	1,205.0		$	1,202.1

For a description of the respective instruments, refer to Note 8 of the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

Debt Modification Costs

On February 4, 2013, the Company entered into Amendment No. 2 (“Amendment No. 2”) to the Credit Agreement dated October 8, 2010. For a description of Amendment No. 2, refer to Note 23 of the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. Fees of $1.3 million paid to third parties in connection with Amendment No. 2 were included as “Debt modification costs” in the Consolidated Statement of Comprehensive Income for the nine months ended September 30, 2013.

Loss on Extinguishment of Debt

During the nine months ended September 30, 2013 and 2012, the Company recognized a loss on extinguishment of debt as follows:

Quarter Ended	Instrument Repaid/Retired	Face Amount Repaid/Retired		Cash Paid		Loss(1)
		(In millions)
March 2013	Term Loans	$	1.2	$	1.2	$	0.0
June 2013	Term Loans	1.2		1.2		0.0
	Total 2013	$	2.4	$	2.4	$	0.0
March 2012	Term Loans	$	70.5	$	70.5	$	1.9
March 2012	Senior Notes	5.0		5.5		0.7
September 2012	Term Loans	108.2		108.2		2.3
	Total 2012	$	183.7	$	184.2	$	4.9

⁽¹⁾ Including write-off of the discount and deferred financing costs related to the debt retired.

Compliance with Covenants and Restrictions

The Company was in compliance with all the covenants and restrictions related to its Senior Secured Credit Facility and Senior Notes as of September 30, 2013.

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Stock-Based Compensation (Components of Stock-Based Compensation Expense) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-based compensation, equity classified awards	$ 1.2	$ 2.2	$ 7.1	$ 8.8
Stock-based compensation, liability classified awards	(0.8)	1.9	(0.9)	2.4
Pre-tax compensation expense	0.4	4.1	6.2	11.2
Tax provision	(0.2)	(1.6)	(2.4)	(4.3)
Total stock-based compensation expense, net of tax	$ 0.2	$ 2.5	$ 3.8	$ 6.9

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Segments (Narrative) (Details)	9 Months Ended
	Sep. 30, 2013 segment
Franchisor Disclosure [Line Items]
Number of segments (segment)	4
Applebee's
Franchisor Disclosure [Line Items]
Number of Territories in which entity operates (territory)	1
Number of Countries in which entity operates (country)	17
IHOP
Franchisor Disclosure [Line Items]
Number of Territories in which entity operates (territory)	2
Number of Countries in which entity operates (country)	7
Franchised Units | Applebee's
Franchisor Disclosure [Line Items]
Number of Restaurants (restaurant)	1,987
Franchised Units | IHOP
Franchisor Disclosure [Line Items]
Number of Restaurants (restaurant)	1,589
Company Operated | Applebee's
Franchisor Disclosure [Line Items]
Number of Restaurants (restaurant)	23
Company Operated | IHOP
Franchisor Disclosure [Line Items]
Number of Restaurants (restaurant)	10
Number of Restaurants reacquired until refranchised (restaurant)	3

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Consolidating Financial Information (Supplemental Condensed Consolidating Balance Sheet) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012	Dec. 31, 2011
Condensed Financial Statements, Captions [Line Items]
Guarantor subsidiary ownership interest (percent)	100.00%
Current Assets
Cash and cash equivalents	$ 95,535	$ 64,537	$ 71,838	$ 60,691
Receivables, net	87,276	128,610
Prepaid expenses and other current assets	54,142	79,536
Deferred income taxes	24,811	21,772
Intercompany	0	0
Total current assets	261,764	294,455
Long-term receivables	201,080	212,269
Property and equipment, net	281,432	294,375
Goodwill	697,470	697,470
Other intangible assets, net	797,061	806,093
Other assets, net	108,909	110,738
Investment in subsidiaries	0	0
Total assets	2,347,716	2,415,400
Current Liabilities
Current maturities of long-term debt	4,720	7,420
Accounts payable	33,339	30,751
Accrued employee compensation and benefits	18,063	22,435
Gift card liability	93,198	161,689
Other accrued expenses	68,000	45,465
Total current liabilities	217,320	267,760
Long-term debt	1,204,998	1,202,063
Financing obligations	51,930	52,049
Capital lease obligations	115,351	124,375
Deferred income taxes	349,202	362,171
Other liabilities	98,919	98,177
Total liabilities	2,037,720	2,106,595
Total stockholders' equity	309,996	308,805
Total liabilities and stockholders’ equity	2,347,716	2,415,400
Parent
Current Assets
Cash and cash equivalents	52,200	9,900	45,000	9,900
Receivables, net	3,900	2,800
Prepaid expenses and other current assets	192,200	151,300
Deferred income taxes	(100)	(3,200)
Intercompany	(436,800)	(394,900)
Total current assets	(188,600)	(234,100)
Long-term receivables	0	0
Property and equipment, net	23,200	23,200
Goodwill	0	0
Other intangible assets, net	0	0
Other assets, net	16,700	18,400
Investment in subsidiaries	1,697,600	1,697,600
Total assets	1,548,900	1,505,100
Current Liabilities
Current maturities of long-term debt	12,700	15,400
Accounts payable	1,800	1,400
Accrued employee compensation and benefits	9,800	9,400
Gift card liability	0	0
Other accrued expenses	1,300	(42,500)
Total current liabilities	25,700	(16,300)
Long-term debt	1,205,000	1,202,100
Financing obligations	0	0
Capital lease obligations	0	0
Deferred income taxes	2,200	4,700
Other liabilities	5,800	5,600
Total liabilities	1,238,700	1,196,100
Total stockholders' equity	310,100	309,000
Total liabilities and stockholders’ equity	1,548,900	1,505,100
Combined Guarantor Subsidiaries
Current Assets
Cash and cash equivalents	42,500	54,000	26,200	50,400
Receivables, net	91,200	133,700
Prepaid expenses and other current assets	50,600	64,600
Deferred income taxes	23,600	24,100
Intercompany	432,300	389,000
Total current assets	640,200	665,400
Long-term receivables	201,100	212,300
Property and equipment, net	257,200	270,200
Goodwill	697,500	697,500
Other intangible assets, net	797,000	806,100
Other assets, net	92,200	92,300
Investment in subsidiaries	0	0
Total assets	2,685,200	2,743,800
Current Liabilities
Current maturities of long-term debt	0	0
Accounts payable	31,500	29,300
Accrued employee compensation and benefits	8,200	13,000
Gift card liability	93,200	161,700
Other accrued expenses	255,600	223,800
Total current liabilities	388,500	427,800
Long-term debt	0	0
Financing obligations	51,900	52,000
Capital lease obligations	115,400	124,400
Deferred income taxes	347,200	357,600
Other liabilities	92,200	91,900
Total liabilities	995,200	1,053,800
Total stockholders' equity	1,690,000	1,690,000
Total liabilities and stockholders’ equity	2,685,200	2,743,800
Combined Non-guarantor Subsidiaries
Current Assets
Cash and cash equivalents	800	600	600	400
Receivables, net	200	100
Prepaid expenses and other current assets	0	0
Deferred income taxes	1,400	800
Intercompany	4,400	6,000
Total current assets	6,800	7,500
Long-term receivables	0	0
Property and equipment, net	1,000	900
Goodwill	0	0
Other intangible assets, net	0	0
Other assets, net	0	0
Investment in subsidiaries	0	0
Total assets	7,800	8,500
Current Liabilities
Current maturities of long-term debt	0	0
Accounts payable	0	100
Accrued employee compensation and benefits	0	0
Gift card liability	0	0
Other accrued expenses	(200)	500
Total current liabilities	(200)	600
Long-term debt	0	0
Financing obligations	0	0
Capital lease obligations	0	0
Deferred income taxes	(300)	(200)
Other liabilities	900	700
Total liabilities	400	1,100
Total stockholders' equity	7,400	7,400
Total liabilities and stockholders’ equity	7,800	8,500
Eliminations and Reclassification
Current Assets
Cash and cash equivalents	0	0	0	0
Receivables, net	(8,000)	(8,000)
Prepaid expenses and other current assets	(188,600)	(136,300)
Deferred income taxes	0	0
Intercompany	0	0
Total current assets	(196,600)	(144,300)
Long-term receivables	0	0
Property and equipment, net	0	0
Goodwill	0	0
Other intangible assets, net	0	0
Other assets, net	0	0
Investment in subsidiaries	(1,697,600)	(1,697,600)
Total assets	(1,894,200)	(1,841,900)
Current Liabilities
Current maturities of long-term debt	(8,000)	(8,000)
Accounts payable		0
Accrued employee compensation and benefits		0
Gift card liability		0
Other accrued expenses	(188,600)	(136,300)
Total current liabilities	(196,600)	(144,300)
Long-term debt		0
Financing obligations		0
Capital lease obligations	0	0
Deferred income taxes		0
Other liabilities		0
Total liabilities	(196,600)	(144,300)
Total stockholders' equity	(1,697,600)	(1,697,600)
Total liabilities and stockholders’ equity	$ (1,894,200)	$ (1,841,900)

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Consolidated Balance Sheets (Parentheticals) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares issued	25,308,295	25,362,946
Common stock, shares outstanding	19,029,164	19,197,899
Treasury stock, shares	6,279,131	6,165,047

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Fair Value Measurements

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The Company does not have a material amount of financial instruments, non-financial assets or non-financial liabilities that are required under U.S. GAAP to be measured on a recurring basis at fair value. The Company has elected to not use the fair value measurement option, as permitted under U.S. GAAP, for any assets or liabilities for which fair value measurement is not presently required.

The Company believes the fair values of cash equivalents, accounts receivable, accounts payable and the current portion of long-term debt approximate the carrying amounts due to their short duration.

The fair values of non-current financial liabilities at September 30, 2013 and December 31, 2012, determined based on Level 2 inputs, were as follows:

	September 30, 2013				December 31, 2012
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In millions)
Long-term debt, less current maturities	$	1,205.0	$	1,311.6	$	1,202.1	$	1,334.2

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013		Sep. 30, 2012
Cash flows from operating activities:
Net income	$ 53,906		$ 108,855
Adjustments to reconcile net income to cash flows provided by operating activities:
Depreciation and amortization	26,516		30,756
Non-cash interest expense	4,635		4,547
Loss on extinguishment of debt	36	[1]	4,917	[1]
Closure and impairment charges	1,166		991
Deferred income taxes	(16,007)		(20,361)
Non-cash stock-based compensation expense	7,081		8,799
Tax benefit from stock-based compensation	3,001		6,334
Excess tax benefit from share-based compensation	(1,985)		(4,757)
Gain on disposition of assets	(326)		(89,642)
Other	791		(1,768)
Changes in operating assets and liabilities:
Receivables	41,698		41,422
Current income tax receivables and payables	7,232		12,512
Other current assets	16,054		7,414
Accounts payable	2,650		2,080
Accrued employee compensation and benefits	(4,372)		(6,490)
Gift card liability	(68,493)		(62,841)
Other accrued expenses	29,231		25,298
Cash flows provided by operating activities	102,814		68,066
Cash flows from investing activities:
Additions to property and equipment	(4,547)		(13,477)
Proceeds from sale of property and equipment and assets held for sale	0		137,449
Principal receipts from notes, equipment contracts and other long-term receivables	10,254		10,276
Other	282		964
Cash flows provided by investing activities	5,989		135,212
Cash flows from financing activities:
Borrowings under revolving credit facilities	0		50,000
Repayments under revolving credit facilities	0		(50,000)
Repayment of long-term debt (including premiums)	(2,400)		(184,237)
Payment of debt modification costs	(1,296)		0
Principal payments on capital lease and financing obligations	(7,515)		(8,246)
Repurchase of DineEquity common stock	(24,663)		0
Dividends paid on common stock	(43,170)		0
Repurchase of restricted stock	(3,209)		(1,690)
Proceeds from stock options exercised	5,585		5,443
Excess tax benefit from share-based compensation	1,985		4,757
Change in restricted cash	(3,122)		(8,158)
Cash flows used in financing activities	(77,805)		(192,131)
Net change in cash and cash equivalents	30,998		11,147
Cash and cash equivalents at beginning of period	64,537		60,691
Cash and cash equivalents at end of period	95,535		71,838
Supplemental disclosures:
Interest paid in cash	58,751		77,758
Income taxes paid in cash	$ 39,084		$ 58,339

[1] Including write-off of the discount and deferred financing costs related to the debt retired.

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 95,535	$ 64,537
Receivables, net	87,276	128,610
Prepaid income taxes	3,619	16,080
Prepaid gift cards	42,840	50,242
Deferred income taxes	24,811	21,772
Other current assets	7,683	13,214
Total current assets	261,764	294,455
Long-term receivables	201,080	212,269
Property and equipment, net	281,432	294,375
Goodwill	697,470	697,470
Other intangible assets, net	797,061	806,093
Other assets, net	108,909	110,738
Total assets	2,347,716	2,415,400
Current liabilities:
Current maturities of long-term debt	4,720	7,420
Accounts payable	33,339	30,751
Gift card liability	93,198	161,689
Accrued employee compensation and benefits	18,063	22,435
Accrued interest payable	35,825	13,236
Current maturities of capital lease and financing obligations	11,974	10,878
Other accrued expenses	20,201	21,351
Total current liabilities	217,320	267,760
Long-term debt, less current maturities	1,204,998	1,202,063
Capital lease obligations, less current maturities	115,351	124,375
Financing obligations, less current maturities	51,930	52,049
Deferred income taxes	349,202	362,171
Other liabilities	98,919	98,177
Total liabilities	2,037,720	2,106,595
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value, shares: 40,000,000 authorized; September 30, 2013 - 25,308,295 issued, 19,029,164 outstanding; December 31, 2012 - 25,362,946 issued, 19,197,899 outstanding	253	254
Additional paid-in-capital	270,799	264,342
Retained earnings	332,740	322,045
Accumulated other comprehensive loss	(157)	(152)
Treasury stock, at cost; shares: September 30, 2013 - 6,279,131; December 31, 2012 - 6,165,047	(293,639)	(277,684)
Total stockholders’ equity	309,996	308,805
Total liabilities and stockholders’ equity	$ 2,347,716	$ 2,415,400

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Stock-Based Compensation (Options Value Assumptions) (Details) (Stock Options, USD $)	9 Months Ended
	Sep. 30, 2013
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate (percent)	0.78%
Weighted average historical volatility (percent)	83.40%
Dividend yield (percent)	4.15%
Expected years until exercise (years)	4 years 7 months 10 days
Forfeitures (percent)	11.00%
Weighted average fair value of options granted (per share)	$ 36.00

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Consolidating Financial Information (Tables)

9 Months Ended

Sep. 30, 2013

Consolidating Financial Information [Abstract]

Supplemental Condensed Consolidating Balance Sheet

Supplemental Condensed Consolidating Balance Sheet

September 30, 2013

(In millions⁽¹⁾)

	Parent			Combined Guarantor Subsidiaries		Combined Non-guarantor Subsidiaries			Eliminations and Reclassification			Consolidated
Assets
Current Assets
Cash and cash equivalents	$	52.2		$	42.5	$	0.8		$	—		$	95.5
Receivables, net	3.9			91.2		0.2			(8.0		)	87.3
Prepaid expenses and other current assets	192.2			50.6		—			(188.6		)	54.1
Deferred income taxes	(0.1		)	23.6		1.4			—			24.8
Intercompany	(436.8		)	432.3		4.4			—			—
Total current assets	(188.6		)	640.2		6.8			(196.6		)	261.8
Long-term receivables	—			201.1		—			—			201.1
Property and equipment, net	23.2			257.2		1.0			—			281.4
Goodwill	—			697.5		—			—			697.5
Other intangible assets, net	—			797.0		—			—			797.1
Other assets, net	16.7			92.2		—			—			108.9
Investment in subsidiaries	1,697.6			—		—			(1,697.6		)	—
Total assets	$	1,548.9		$	2,685.2	$	7.8		$	(1,894.2	)	$	2,347.7
Liabilities and Stockholders’ Equity
Current Liabilities
Current maturities of long-term debt	$	12.7		$	—	$	—		$	(8.0	)	$	4.7
Accounts payable	1.8			31.5		—						33.3
Accrued employee compensation and benefits	9.8			8.2		—						18.1
Gift card liability	—			93.2		—						93.2
Other accrued expenses	1.3			255.6		(0.2		)	(188.6		)	68.0
Total current liabilities	25.7			388.5		(0.2		)	(196.6		)	217.3
Long-term debt	1,205.0			—		—						1,205.0
Financing obligations	—			51.9		—						51.9
Capital lease obligations	—			115.4		—			—			115.4
Deferred income taxes	2.2			347.2		(0.3		)				349.2
Other liabilities	5.8			92.2		0.9						98.9
Total liabilities	1,238.7			995.2		0.4			(196.6		)	2,037.7
Total stockholders’ equity	310.1			1,690.0		7.4			(1,697.6		)	310.0
Total liabilities and stockholders’ equity	$	1,548.9		$	2,685.2	$	7.8		$	(1,894.2	)	$	2,347.7

⁽¹⁾ Supplemental condensed statements presented in millions may not foot/crossfoot due to rounding from Consolidated Statements presented in thousands.

Supplemental Condensed Consolidating Balance Sheet

December 31, 2012

(In millions⁽¹⁾)

	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

⁽¹⁾ Supplemental condensed statements presented in millions may not foot/crossfoot due to rounding from Consolidated Statements presented in thousands.

Supplemental Condensed Consolidating Statement of Income and Comprehensive Income

Supplemental Condensed Consolidating Statement of Comprehensive Income

For the Nine Months EndedSeptember 30, 2013

(In millions⁽¹⁾)

	Parent			Combined Guarantor Subsidiaries			Combined Non-guarantor Subsidiaries			Eliminations  and Reclassification			Consolidated
Revenues
Franchise and restaurant revenues	$	2.1		$	376.5		$	1.0		$	—		$	379.6
Rental revenues	—			92.7			—			—			92.7
Financing revenues	—			10.2			—			—			10.2
Total revenue	2.1			479.4			1.0			—			482.6
Franchise and restaurant expenses	2.1			128.8			—			—			130.9
Rental expenses	—			72.9			—			—			72.9
Financing expenses	—			0.2			—			—			0.2
General and administrative expenses	27.7			76.3			0.9			—			105.0
Interest expense	74.2			1.0			—			—			75.2
Amortization of intangible assets	—			9.2			—			—			9.2
Closure and impairment charges	—			0.5			0.2			—			0.8
Loss (gain) on disposition of assets	—			0.4			(0.7		)	—			(0.3		)
Debt modification costs	1.3			—			—			—			1.3
Intercompany dividend	(116.6		)	—			—			116.6			—
Income before income taxes	13.4			190.0			0.5			(116.6		)	87.3
Benefit (provision) for income taxes	40.5			(73.9		)	—			—			(33.4		)
Net income	$	53.9		$	116.1		$	0.5		$	(116.6	)	$	53.9
Total comprehensive income	$	53.9		$	116.1		$	0.5		$	(116.6	)	$	53.9

⁽¹⁾ Supplemental condensed statements presented in millions may not foot/crossfoot due to rounding from Consolidated Statements presented in thousands.

Supplemental Condensed Consolidating Statement of Comprehensive Income

For the Nine Months EndedSeptember 30, 2012

(In millions⁽¹⁾)

	Parent			Combined Guarantor Subsidiaries			Combined Non-guarantor Subsidiaries			Eliminations  and Reclassification			Consolidated
Revenues
Franchise and restaurant revenues	$	1.9		$	585.1		$	0.8		$	—		$	587.8
Rental revenues	—			92.1			—			—			92.1
Financing revenues	—			11.4			—			—			11.4
Total revenue	1.9			688.6			0.8			—			691.3
Franchise and restaurant expenses	1.8			311.6			—			—			313.4
Rental expenses	—			73.1			—			—			73.1
Financing expenses	—			1.6			—			—			1.6
General and administrative expenses	28.9			95.2			1.4			—			125.6
Interest expense	80.9			7.9			—			—			88.8
Amortization of intangible assets	—			9.2			—			—			9.2
Closure and impairment charges	—			0.7			0.6			—			1.3
Gain on disposition of assets	—			(88.5		)	(1.2		)	—			(89.6		)
Loss on extinguishment of debt	4.9			—			—			—			4.9
Intercompany dividend	(179.7		)	—			—			179.7			—
Income before income taxes	65.1			277.8			—			(179.7		)	163.1
Benefit (provision) for income taxes	43.6			(97.9		)	—			—			(54.2		)
Net income	$	108.7		$	179.9		$	—		$	(179.7	)	$	108.9
Total comprehensive income	$	108.8		$	180.0		$	—		$	(179.7	)	$	109.0

⁽¹⁾ Supplemental condensed statements presented in millions may not foot/crossfoot due to rounding from Consolidated Statements presented in thousands.

Supplemental Condensed Consolidating Statement of Comprehensive Income

For the Three Months EndedSeptember 30, 2013

(In millions⁽¹⁾)

	Parent			Combined Guarantor Subsidiaries			Combined Non-guarantor Subsidiaries			Eliminations  and Reclassification			Consolidated
Revenues
Franchise and restaurant revenues	$	0.7		$	126.1		$	0.4		$	—		$	127.1
Rental revenues	—			31.0			—			—			31.0
Financing revenues	—			3.2			—			—			3.2
Total revenue	0.7			160.3			0.4			—			161.3
Franchise and restaurant expenses	0.6			43.5			—			—			44.1
Rental expenses	—			24.1			—			—			24.2
Financing expenses	—			—			—			—			—
General and administrative expenses	9.0			26.0			0.3			—			35.3
Interest expense	24.6			0.3			—			—			25.0
Amortization of intangible assets	—			3.1			—			—			3.1
Closure and impairment charges	—			(0.5		)	0.1			—			(0.4		)
Loss (gain) on disposition of assets	—			0.1			(0.2		)	—			(0.1		)
Intercompany dividend	(39.2		)	—			—			39.2			—
Income before income taxes	5.6			63.5			0.2			(39.2		)	30.1
Benefit (provision) for income taxes	13.1			(24.5		)	—			—			(11.4		)
Net income	$	18.7		$	39.0		$	0.2		$	(39.2	)	$	18.7
Total comprehensive income	$	18.7		$	39.0		$	0.2		$	(39.2	)	$	18.7

⁽¹⁾ Supplemental condensed statements presented in millions may not foot/crossfoot due to rounding from Consolidated Statements presented in thousands.

Supplemental Condensed Consolidating Statement of Comprehensive Income

For the Three Months EndedSeptember 30, 2012

(In millions⁽¹⁾)

	Parent			Combined Guarantor Subsidiaries			Combined Non-guarantor Subsidiaries			Eliminations  and Reclassification			Consolidated
Revenues
Franchise and restaurant revenues	$	0.7		$	181.3		$	0.3		$	—		$	182.2
Rental revenues	—			30.9			—			—			30.9
Financing revenues	—			3.2			—			—			3.2
Total revenue	0.7			215.4			0.3			—			216.3
Franchise and restaurant expenses	0.6			95.2			—			—			95.7
Rental expenses	—			24.2			—			—			24.2
Financing expenses	—			—			—			—			—
General and administrative expenses	15.8			32.5			0.4			—			48.7
Interest expense	26.5			2.4			—			—			28.9
Amortization of intangible assets	—			3.1			—			—			3.1
Closure and impairment charges	—			0.2			0.2			—			0.4
Gain on disposition of assets	—			(73.3		)	(0.4		)	—			(73.7		)
Loss on extinguishment of debt	2.3			—			—			—			2.3
Intercompany dividend	(88.7		)	—			—			88.7			—
Income before income taxes	44.2			131.1			0.1			(88.7		)	86.6
Benefit (provision) for income taxes	16.5			(42.5		)	—			—			(26.0		)
Net income	$	60.6		$	88.6		$	0.1		$	(88.7	)	$	60.6
Total comprehensive income	$	60.6		$	88.6		$	0.1		$	(88.7	)	$	60.6

⁽¹⁾ Supplemental condensed statements presented in millions may not foot/crossfoot due to rounding from Consolidated Statements presented in thousands.

Supplemental Condensed Consolidating Statement of Cash Flows

Supplemental Condensed Consolidating Statement of Cash Flows

For the Nine Months EndedSeptember 30, 2013

(In millions⁽¹⁾)

	Parent			Combined Guarantor Subsidiaries			Combined Non-guarantor Subsidiaries			Eliminations  and Reclassification		Consolidated
Cash flows provided by (used in) operating activities	$	(66.3	)	$	169.4		$	(0.3	)	$	—	$	102.8
Investing cash flows:
Additions to property and equipment	(3.8		)	(0.7		)	—			—		(4.6		)
Principal receipts from long-term receivables	—			10.3			—			—		10.3
Proceeds from sale of assets	—			—			—			—		—
Other	—			0.3			—			—		0.3
Cash flows provided by (used in) investing activities	(3.8		)	9.8			—			—		6.0
Financing cash flows:
Payment of debt	(2.4		)	(7.5		)	—			—		(9.9		)
Payment of debt modification costs	(1.3		)	—			—			—		(1.3		)
Repurchase of common stock	(24.7		)	—			—			—		(24.7		)
Dividends paid on common stock	(43.2		)	—			—			—		(43.2		)
Restricted cash	—			(3.1		)	—			—		(3.1		)
Other	4.2			0.1			—			—		4.4
Intercompany transfers	179.7			(180.1		)	0.4			—		—
Cash flows provided by (used in) financing activities	112.4			(190.6		)	0.4			—		(77.8		)
Net change	42.3			(11.4		)	0.1			—		31.0
Beginning cash and equivalents	9.9			54.0			0.6			—		64.5
Ending cash and equivalents	$	52.2		$	42.5		$	0.8		$	—	$	95.5

⁽¹⁾ Supplemental condensed statements presented in millions may not foot/crossfoot due to rounding from Consolidated Statements presented in thousands.

Supplemental Condensed Consolidating Statement of Cash Flows

For the Nine Months EndedSeptember 30, 2012

(In millions⁽¹⁾)

	Parent			Combined Guarantor Subsidiaries			Combined Non-guarantor Subsidiaries		Eliminations  and Reclassification		Consolidated
Cash flows provided by (used in) operating activities	$	(74.5	)	$	142.3		$	0.2	$	—	$	68.1
Investing cash flows:
Additions to property and equipment	(4.7		)	(8.8		)	—				(13.5		)
Principal receipts from long-term receivables	—			10.3			—		—		10.3
Proceeds from sale of assets	—			137.4			—		—		137.4
Other	—			1.0			—		—		1.0
Cash flows provided by (used in) investing activities	(4.7		)	139.9			—		—		135.2
Financing cash flows:
Revolving credit borrowings	50.0			—			—		—		50.0
Revolving credit repayments	(50.0		)	—			—		—		(50.0		)
Payment of debt	(184.2		)	(8.2		)	—		—		(192.5		)
Restricted cash	—			(8.2		)	—		—		(8.2		)
Other	7.4			1.2			—		—		8.5
Intercompany transfers	291.1			(291.1		)	—		—		—
Cash flows provided by (used in) financing activities	114.2			(306.3		)	—		—		(192.2		)
Net change	35.1			(24.1		)	0.2		—		11.1
Beginning cash and equivalents	9.9			50.4			0.4		—		60.7
Ending cash and equivalents	$	45.0		$	26.2		$	0.6	$	—	$	71.8

⁽¹⁾ Supplemental condensed statements presented in millions may not foot/crossfoot due to rounding from Consolidated Statements presented in thousands.

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Consolidating Financial Information (Supplemental Condensed Consolidating Statement of Cash Flows) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Condensed Financial Statements, Captions [Line Items]
Cash flows provided by (used in) operating activities	$ 102,814	$ 68,066
Investing cash flows
Additions to property and equipment	(4,547)	(13,477)
Principal receipts from long-term receivables	10,254	10,276
Proceeds from sale of assets	0	137,449
Other	282	964
Cash flows provided by investing activities	5,989	135,212
Fnancing cash flows
Revolving credit borrowings	0	50,000
Revolving credit repayments	0	(50,000)
Payment of debt	(9,915)	(192,483)
Payment of debt modification costs	(1,296)	0
Repurchase of common stock	(24,663)	0
Dividends paid on common stock	(43,170)	0
Restricted cash	(3,122)	(8,158)
Other	4,361	8,510
Intercompany transfers	0	0
Cash flows used in financing activities	(77,805)	(192,131)
Net change in cash and cash equivalents	30,998	11,147
Cash and cash equivalents at beginning of period	64,537	60,691
Cash and cash equivalents at end of period	95,535	71,838
Parent
Condensed Financial Statements, Captions [Line Items]
Cash flows provided by (used in) operating activities	(66,300)	(74,500)
Investing cash flows
Additions to property and equipment	(3,800)	(4,700)
Principal receipts from long-term receivables	0	0
Proceeds from sale of assets	0	0
Other	0	0
Cash flows provided by investing activities	(3,800)	(4,700)
Fnancing cash flows
Revolving credit borrowings		50,000
Revolving credit repayments		(50,000)
Payment of debt	(2,400)	(184,200)
Payment of debt modification costs	(1,300)
Repurchase of common stock	(24,700)
Dividends paid on common stock	(43,200)
Restricted cash	0	0
Other	4,200	7,400
Intercompany transfers	179,700	291,100
Cash flows used in financing activities	112,400	114,200
Net change in cash and cash equivalents	42,300	35,100
Cash and cash equivalents at beginning of period	9,900	9,900
Cash and cash equivalents at end of period	52,200	45,000
Combined Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Cash flows provided by (used in) operating activities	169,400	142,300
Investing cash flows
Additions to property and equipment	(700)	(8,800)
Principal receipts from long-term receivables	10,300	10,300
Proceeds from sale of assets	0	137,400
Other	300	1,000
Cash flows provided by investing activities	9,800	139,900
Fnancing cash flows
Revolving credit borrowings		0
Revolving credit repayments		0
Payment of debt	(7,500)	(8,200)
Payment of debt modification costs	0
Repurchase of common stock	0
Dividends paid on common stock	0
Restricted cash	(3,100)	(8,200)
Other	100	1,200
Intercompany transfers	(180,100)	(291,100)
Cash flows used in financing activities	(190,600)	(306,300)
Net change in cash and cash equivalents	(11,400)	(24,100)
Cash and cash equivalents at beginning of period	54,000	50,400
Cash and cash equivalents at end of period	42,500	26,200
Combined Non-guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Cash flows provided by (used in) operating activities	(300)	200
Investing cash flows
Additions to property and equipment	0	0
Principal receipts from long-term receivables	0	0
Proceeds from sale of assets	0	0
Other	0	0
Cash flows provided by investing activities	0	0
Fnancing cash flows
Revolving credit borrowings		0
Revolving credit repayments		0
Payment of debt	0	0
Payment of debt modification costs	0
Repurchase of common stock	0
Dividends paid on common stock	0
Restricted cash	0	0
Other	0	0
Intercompany transfers	400	0
Cash flows used in financing activities	400	0
Net change in cash and cash equivalents	100	200
Cash and cash equivalents at beginning of period	600	400
Cash and cash equivalents at end of period	800	600
Eliminations and Reclassification
Condensed Financial Statements, Captions [Line Items]
Cash flows provided by (used in) operating activities	0	0
Investing cash flows
Additions to property and equipment	0
Principal receipts from long-term receivables	0	0
Proceeds from sale of assets	0	0
Other	0	0
Cash flows provided by investing activities	0	0
Fnancing cash flows
Revolving credit borrowings		0
Revolving credit repayments		0
Payment of debt	0	0
Payment of debt modification costs	0
Repurchase of common stock	0
Dividends paid on common stock	0
Restricted cash	0	0
Other	0	0
Intercompany transfers	0	0
Cash flows used in financing activities	0	0
Net change in cash and cash equivalents	0	0
Cash and cash equivalents at beginning of period	0	0
Cash and cash equivalents at end of period	$ 0	$ 0

XML

Fair Value Measurements (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt, less current maturities	$ 1,204,998	$ 1,202,063
Fair Value | Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt, less current maturities	$ 1,311,600	$ 1,334,200

XML

Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	1 Months Ended	3 Months Ended	9 Months Ended	1 Months Ended
	Feb. 28, 2013 IHOP Illinois, Wisconsin, Missouri Restaurant	Sep. 30, 2013 IHOP Illinois, Wisconsin, Missouri Restaurant	Sep. 30, 2013 IHOP Illinois, Wisconsin, Missouri	Jun. 30, 2013 Applebee's Illinois Restaurant	Apr. 30, 2013 Applebee's Illinois Restaurant	Sep. 30, 2013 Applebee's Property Lease Guarantee
Loss Contingencies [Line Items]
Potential liability for guaranteed leases						$ 431.9
Number of franchised restaurants, filed for bankruptcy protection (restraurant)	19				33
Number of restaurants filed for bankruptcy protection likely returned to the company (restraurant)		2
Noncash charge to deferred rental revenue			0.5
Number of franchised restaurants filed for bankruptcy protection and still operated by franchisee under franchise agreement (restraurant)	17
Number of franchised restaurants sold to new franchisee as a result of bankruptcy (restraurant)				15
Number of franchised restaurants closed as a result of bankruptcy (restraurant)				18
Termination payments and other fees received				$ 3.8

XML

Net Income per Share

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Net Income per Share

Net Income per Share

The computation of the Company's basic and diluted net income per share for the three and nine months ended September 30, 2013 and 2012 was as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
	(In thousands, except per share data)
Numerator for basic and dilutive income per common share:
Net income	$	18,730		$	60,573		$	53,906		$	108,855
Less: Net income allocated to unvested participating restricted stock	(296		)	(1,187		)	(925		)	(2,477		)
Less: Accretion of Series B Convertible Preferred Stock	—			(688		)	—			(2,033		)
Net income available to common stockholders - basic	18,434			58,698			52,981			104,345
Effect of unvested participating restricted stock in two-class calculation	1			57			3			121
Accretion of Series B Convertible Preferred Stock	—			688			—			2,033
Net income available to common stockholders - diluted	$	18,435		$	59,443		$	52,984		$	106,499
Denominator:
Weighted average outstanding shares of common stock - basic	18,831			18,006			18,898			17,859
Dilutive effect of:
Stock options	254			246			268			270
Series B Convertible Preferred Stock	—			672			—			672
Weighted average outstanding shares of common stock - diluted	19,085			18,924			19,166			18,801
Net income per common share:
Basic	$	0.98		$	3.26		$	2.80		$	5.84
Diluted	$	0.97		$	3.14		$	2.76		$	5.66

All Series B Convertible Preferred Stock was converted into DineEquity, Inc. common stock in November, 2012.

XML

Stock-Based Compensation (Stock Option Activity) (Details) (Stock Options, USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Options, outstanding, beginning of period (in shares)	958,246
Options, granted (in shares)	81,328
Options, exercised (in shares)	(153,454)
Options, forfeited (in shares)	(39,243)
Options, outstanding, end of period (in shares)	846,877
Options, vested and expected to vest (in shares)	824,671
Options, exercisable (in shares)	637,782
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
Weighted average exercise price, beginning of period (per share)	$ 39.67
Weighted average exercise price, granted (per share)	$ 72.28
Weighted average exercise price, exercised (per share)	$ 36.40
Weighted average exercise price, forfeited (per share)	$ 55.78
Weighted average exercise price, end of period (per share)	$ 42.65
Weighted average exercise price, vested and expected to vest (per share)	$ 42.14
Weighted average exercise price, exercisable (per share)	$ 37.31
Weighted average remaining contractual term (in years)	6 years 2 months 27 days
Weighted average remaining contractual term, vested and expected to vest (in years)	6 years 2 months 1 day
Weighted average remaining contractual term, exercisable (in years)	5 years 5 months 27 days
Options, outstanding, intrinsic value	$ 21,878
Options, vested and expected to vest, intrinsic value	21,683
Options, vested and expected to vest, exercisable	$ 19,650

XML

Consolidating Financial Information

9 Months Ended

Sep. 30, 2013

Consolidating Financial Information [Abstract]

Consolidating Financial Information

Consolidating Financial Information

Certain of the Company's subsidiaries have guaranteed the Company's obligations under the Senior Secured Credit Facility. The following presents the condensed consolidating financial information separately for: (i) the parent Company, the issuer of the guaranteed obligations; (ii) the guarantor subsidiaries, on a combined basis, as specified in the Credit Agreement; (iii) the non-guarantor subsidiaries, on a combined basis; (iv) consolidating eliminations and reclassifications; and (v) DineEquity, Inc. and Subsidiaries on a consolidated basis.

Each guarantor subsidiary is 100% owned by the Company at the date of each balance sheet presented. The notes are fully and unconditionally guaranteed on a joint and several basis by each guarantor subsidiary. Each entity in the consolidating financial information follows the same accounting policies as described in the consolidated financial statements.

Supplemental Condensed Consolidating Balance Sheet

September 30, 2013

(In millions⁽¹⁾)

	Parent			Combined Guarantor Subsidiaries		Combined Non-guarantor Subsidiaries			Eliminations and Reclassification			Consolidated
Assets
Current Assets
Cash and cash equivalents	$	52.2		$	42.5	$	0.8		$	—		$	95.5
Receivables, net	3.9			91.2		0.2			(8.0		)	87.3
Prepaid expenses and other current assets	192.2			50.6		—			(188.6		)	54.1
Deferred income taxes	(0.1		)	23.6		1.4			—			24.8
Intercompany	(436.8		)	432.3		4.4			—			—
Total current assets	(188.6		)	640.2		6.8			(196.6		)	261.8
Long-term receivables	—			201.1		—			—			201.1
Property and equipment, net	23.2			257.2		1.0			—			281.4
Goodwill	—			697.5		—			—			697.5
Other intangible assets, net	—			797.0		—			—			797.1
Other assets, net	16.7			92.2		—			—			108.9
Investment in subsidiaries	1,697.6			—		—			(1,697.6		)	—
Total assets	$	1,548.9		$	2,685.2	$	7.8		$	(1,894.2	)	$	2,347.7
Liabilities and Stockholders’ Equity
Current Liabilities
Current maturities of long-term debt	$	12.7		$	—	$	—		$	(8.0	)	$	4.7
Accounts payable	1.8			31.5		—						33.3
Accrued employee compensation and benefits	9.8			8.2		—						18.1
Gift card liability	—			93.2		—						93.2
Other accrued expenses	1.3			255.6		(0.2		)	(188.6		)	68.0
Total current liabilities	25.7			388.5		(0.2		)	(196.6		)	217.3
Long-term debt	1,205.0			—		—						1,205.0
Financing obligations	—			51.9		—						51.9
Capital lease obligations	—			115.4		—			—			115.4
Deferred income taxes	2.2			347.2		(0.3		)				349.2
Other liabilities	5.8			92.2		0.9						98.9
Total liabilities	1,238.7			995.2		0.4			(196.6		)	2,037.7
Total stockholders’ equity	310.1			1,690.0		7.4			(1,697.6		)	310.0
Total liabilities and stockholders’ equity	$	1,548.9		$	2,685.2	$	7.8		$	(1,894.2	)	$	2,347.7

⁽¹⁾ Supplemental condensed statements presented in millions may not foot/crossfoot due to rounding from Consolidated Statements presented in thousands.

Supplemental Condensed Consolidating Balance Sheet

December 31, 2012

(In millions⁽¹⁾)

	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

⁽¹⁾ Supplemental condensed statements presented in millions may not foot/crossfoot due to rounding from Consolidated Statements presented in thousands.

Supplemental Condensed Consolidating Statement of Comprehensive Income

For the Three Months EndedSeptember 30, 2013

(In millions⁽¹⁾)

	Parent			Combined Guarantor Subsidiaries			Combined Non-guarantor Subsidiaries			Eliminations  and Reclassification			Consolidated
Revenues
Franchise and restaurant revenues	$	0.7		$	126.1		$	0.4		$	—		$	127.1
Rental revenues	—			31.0			—			—			31.0
Financing revenues	—			3.2			—			—			3.2
Total revenue	0.7			160.3			0.4			—			161.3
Franchise and restaurant expenses	0.6			43.5			—			—			44.1
Rental expenses	—			24.1			—			—			24.2
Financing expenses	—			—			—			—			—
General and administrative expenses	9.0			26.0			0.3			—			35.3
Interest expense	24.6			0.3			—			—			25.0
Amortization of intangible assets	—			3.1			—			—			3.1
Closure and impairment charges	—			(0.5		)	0.1			—			(0.4		)
Loss (gain) on disposition of assets	—			0.1			(0.2		)	—			(0.1		)
Intercompany dividend	(39.2		)	—			—			39.2			—
Income before income taxes	5.6			63.5			0.2			(39.2		)	30.1
Benefit (provision) for income taxes	13.1			(24.5		)	—			—			(11.4		)
Net income	$	18.7		$	39.0		$	0.2		$	(39.2	)	$	18.7
Total comprehensive income	$	18.7		$	39.0		$	0.2		$	(39.2	)	$	18.7

⁽¹⁾ Supplemental condensed statements presented in millions may not foot/crossfoot due to rounding from Consolidated Statements presented in thousands.

Supplemental Condensed Consolidating Statement of Comprehensive Income

For the Three Months EndedSeptember 30, 2012

(In millions⁽¹⁾)

	Parent			Combined Guarantor Subsidiaries			Combined Non-guarantor Subsidiaries			Eliminations  and Reclassification			Consolidated
Revenues
Franchise and restaurant revenues	$	0.7		$	181.3		$	0.3		$	—		$	182.2
Rental revenues	—			30.9			—			—			30.9
Financing revenues	—			3.2			—			—			3.2
Total revenue	0.7			215.4			0.3			—			216.3
Franchise and restaurant expenses	0.6			95.2			—			—			95.7
Rental expenses	—			24.2			—			—			24.2
Financing expenses	—			—			—			—			—
General and administrative expenses	15.8			32.5			0.4			—			48.7
Interest expense	26.5			2.4			—			—			28.9
Amortization of intangible assets	—			3.1			—			—			3.1
Closure and impairment charges	—			0.2			0.2			—			0.4
Gain on disposition of assets	—			(73.3		)	(0.4		)	—			(73.7		)
Loss on extinguishment of debt	2.3			—			—			—			2.3
Intercompany dividend	(88.7		)	—			—			88.7			—
Income before income taxes	44.2			131.1			0.1			(88.7		)	86.6
Benefit (provision) for income taxes	16.5			(42.5		)	—			—			(26.0		)
Net income	$	60.6		$	88.6		$	0.1		$	(88.7	)	$	60.6
Total comprehensive income	$	60.6		$	88.6		$	0.1		$	(88.7	)	$	60.6

⁽¹⁾ Supplemental condensed statements presented in millions may not foot/crossfoot due to rounding from Consolidated Statements presented in thousands.

Supplemental Condensed Consolidating Statement of Comprehensive Income

For the Nine Months EndedSeptember 30, 2013

(In millions⁽¹⁾)

	Parent			Combined Guarantor Subsidiaries			Combined Non-guarantor Subsidiaries			Eliminations  and Reclassification			Consolidated
Revenues
Franchise and restaurant revenues	$	2.1		$	376.5		$	1.0		$	—		$	379.6
Rental revenues	—			92.7			—			—			92.7
Financing revenues	—			10.2			—			—			10.2
Total revenue	2.1			479.4			1.0			—			482.6
Franchise and restaurant expenses	2.1			128.8			—			—			130.9
Rental expenses	—			72.9			—			—			72.9
Financing expenses	—			0.2			—			—			0.2
General and administrative expenses	27.7			76.3			0.9			—			105.0
Interest expense	74.2			1.0			—			—			75.2
Amortization of intangible assets	—			9.2			—			—			9.2
Closure and impairment charges	—			0.5			0.2			—			0.8
Loss (gain) on disposition of assets	—			0.4			(0.7		)	—			(0.3		)
Debt modification costs	1.3			—			—			—			1.3
Intercompany dividend	(116.6		)	—			—			116.6			—
Income before income taxes	13.4			190.0			0.5			(116.6		)	87.3
Benefit (provision) for income taxes	40.5			(73.9		)	—			—			(33.4		)
Net income	$	53.9		$	116.1		$	0.5		$	(116.6	)	$	53.9
Total comprehensive income	$	53.9		$	116.1		$	0.5		$	(116.6	)	$	53.9

⁽¹⁾ Supplemental condensed statements presented in millions may not foot/crossfoot due to rounding from Consolidated Statements presented in thousands.

Supplemental Condensed Consolidating Statement of Comprehensive Income

For the Nine Months EndedSeptember 30, 2012

(In millions⁽¹⁾)

	Parent			Combined Guarantor Subsidiaries			Combined Non-guarantor Subsidiaries			Eliminations  and Reclassification			Consolidated
Revenues
Franchise and restaurant revenues	$	1.9		$	585.1		$	0.8		$	—		$	587.8
Rental revenues	—			92.1			—			—			92.1
Financing revenues	—			11.4			—			—			11.4
Total revenue	1.9			688.6			0.8			—			691.3
Franchise and restaurant expenses	1.8			311.6			—			—			313.4
Rental expenses	—			73.1			—			—			73.1
Financing expenses	—			1.6			—			—			1.6
General and administrative expenses	28.9			95.2			1.4			—			125.6
Interest expense	80.9			7.9			—			—			88.8
Amortization of intangible assets	—			9.2			—			—			9.2
Closure and impairment charges	—			0.7			0.6			—			1.3
Gain on disposition of assets	—			(88.5		)	(1.2		)	—			(89.6		)
Loss on extinguishment of debt	4.9			—			—			—			4.9
Intercompany dividend	(179.7		)	—			—			179.7			—
Income before income taxes	65.1			277.8			—			(179.7		)	163.1
Benefit (provision) for income taxes	43.6			(97.9		)	—			—			(54.2		)
Net income	$	108.7		$	179.9		$	—		$	(179.7	)	$	108.9
Total comprehensive income	$	108.8		$	180.0		$	—		$	(179.7	)	$	109.0

⁽¹⁾ Supplemental condensed statements presented in millions may not foot/crossfoot due to rounding from Consolidated Statements presented in thousands.

Supplemental Condensed Consolidating Statement of Cash Flows

For the Nine Months EndedSeptember 30, 2013

(In millions⁽¹⁾)

	Parent			Combined Guarantor Subsidiaries			Combined Non-guarantor Subsidiaries			Eliminations  and Reclassification		Consolidated
Cash flows provided by (used in) operating activities	$	(66.3	)	$	169.4		$	(0.3	)	$	—	$	102.8
Investing cash flows:
Additions to property and equipment	(3.8		)	(0.7		)	—			—		(4.6		)
Principal receipts from long-term receivables	—			10.3			—			—		10.3
Proceeds from sale of assets	—			—			—			—		—
Other	—			0.3			—			—		0.3
Cash flows provided by (used in) investing activities	(3.8		)	9.8			—			—		6.0
Financing cash flows:
Payment of debt	(2.4		)	(7.5		)	—			—		(9.9		)
Payment of debt modification costs	(1.3		)	—			—			—		(1.3		)
Repurchase of common stock	(24.7		)	—			—			—		(24.7		)
Dividends paid on common stock	(43.2		)	—			—			—		(43.2		)
Restricted cash	—			(3.1		)	—			—		(3.1		)
Other	4.2			0.1			—			—		4.4
Intercompany transfers	179.7			(180.1		)	0.4			—		—
Cash flows provided by (used in) financing activities	112.4			(190.6		)	0.4			—		(77.8		)
Net change	42.3			(11.4		)	0.1			—		31.0
Beginning cash and equivalents	9.9			54.0			0.6			—		64.5
Ending cash and equivalents	$	52.2		$	42.5		$	0.8		$	—	$	95.5

⁽¹⁾ Supplemental condensed statements presented in millions may not foot/crossfoot due to rounding from Consolidated Statements presented in thousands.

Supplemental Condensed Consolidating Statement of Cash Flows

For the Nine Months EndedSeptember 30, 2012

(In millions⁽¹⁾)

	Parent			Combined Guarantor Subsidiaries			Combined Non-guarantor Subsidiaries		Eliminations  and Reclassification		Consolidated
Cash flows provided by (used in) operating activities	$	(74.5	)	$	142.3		$	0.2	$	—	$	68.1
Investing cash flows:
Additions to property and equipment	(4.7		)	(8.8		)	—				(13.5		)
Principal receipts from long-term receivables	—			10.3			—		—		10.3
Proceeds from sale of assets	—			137.4			—		—		137.4
Other	—			1.0			—		—		1.0
Cash flows provided by (used in) investing activities	(4.7		)	139.9			—		—		135.2
Financing cash flows:
Revolving credit borrowings	50.0			—			—		—		50.0
Revolving credit repayments	(50.0		)	—			—		—		(50.0		)
Payment of debt	(184.2		)	(8.2		)	—		—		(192.5		)
Restricted cash	—			(8.2		)	—		—		(8.2		)
Other	7.4			1.2			—		—		8.5
Intercompany transfers	291.1			(291.1		)	—		—		—
Cash flows provided by (used in) financing activities	114.2			(306.3		)	—		—		(192.2		)
Net change	35.1			(24.1		)	0.2		—		11.1
Beginning cash and equivalents	9.9			50.4			0.4		—		60.7
Ending cash and equivalents	$	45.0		$	26.2		$	0.6	$	—	$	71.8

⁽¹⁾ Supplemental condensed statements presented in millions may not foot/crossfoot due to rounding from Consolidated Statements presented in thousands.

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Segments

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Segments

Segments

The Company has four reporting segments: franchise operations, company restaurant operations, rental operations and financing operations.

As of September 30, 2013, the franchise operations segment consisted of (i) 1,987 restaurants operated by Applebee’s franchisees in the United States, one U.S. territory and 17 countries outside the United States; and (ii) 1,589 restaurants operated by IHOP franchisees and area licensees in the United States, two U.S. territories and seven countries outside the United States. Franchise operations revenue consists primarily of franchise royalty revenues, sales of proprietary products to franchisees (primarily pancake and waffle dry mixes for the IHOP restaurants), IHOP franchise advertising fees and the portion of the franchise fees allocated to IHOP and Applebee's intellectual property.  Franchise operations expenses include IHOP advertising expenses, the cost of IHOP proprietary products and IHOP and Applebee's pre-opening training expenses and other franchise-related costs.

At September 30, 2013, the company restaurant operations segment consisted of 23 Applebee’s company-operated restaurants, 10 IHOP company-operated restaurants and three IHOP restaurants reacquired from franchisees and operated by IHOP on a temporary basis until refranchised, all of which are located in the United States. Company restaurant sales are retail sales at company-operated restaurants. Company restaurant expenses are operating expenses at company-operated restaurants and include food, labor, utilities, rent and other restaurant operating costs.

Rental operations revenue includes revenue from operating leases and interest income from direct financing leases. Rental operations expenses are costs of operating leases and interest expense from capital leases on franchisee-operated restaurants. 

Financing operations revenue primarily consists of interest income from the financing of franchise fees and equipment leases and sales of equipment associated with refranchised IHOP restaurants. Financing expenses are primarily the cost of restaurant equipment associated with refranchised IHOP restaurants.

Information on segments for the three and nine months ended September 30, 2013 and 2012 was as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
	(In millions)
Revenues from External Customers
Franchise operations	$	111.7		$	102.6		$	331.6		$	313.5
Company restaurants	15.4			79.6			48.1			274.3
Rental operations	31.0			30.9			92.7			92.1
Financing operations	3.2			3.2			10.2			11.4
Total	$	161.3		$	216.3		$	482.6		$	691.3
Interest Expense
Company restaurants	$	0.1		$	0.1		$	0.3		$	0.3
Rental operations	3.8			4.2			12.0			12.8
Corporate	25.0			28.9			75.2			88.8
Total	$	28.9		$	33.2		$	87.5		$	101.9
Depreciation and amortization
Franchise operations	$	2.7		$	2.5		$	8.1		$	7.4
Company restaurants	0.5			1.6			1.6			6.4
Rental operations	3.3			3.4			10.1			10.3
Corporate	2.4			2.3			6.7			6.7
Total	$	8.9		$	9.8		$	26.5		$	30.8
Income (loss) before income taxes
Franchise operations	$	83.3		$	75.5		$	248.8		$	232.4
Company restaurants	(0.3		)	11.0			(0.1		)	42.0
Rental operations	6.8			6.7			19.8			19.0
Financing operations	3.2			3.2			10.0			9.8
Corporate	(62.9		)	(9.8		)	(191.2		)	(140.1		)
Total	$	30.1		$	86.6		$	87.3		$	163.1

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Basis of Presentation

9 Months Ended

Sep. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The Company’s fiscal quarters end on the Sunday closest to the last day of each quarter. For convenience, the fiscal quarters of each year are reported as ending on March 31, June 30, September 30 and December 31. The first, second and third quarters of fiscal 2013 ended on March 31, 2013, June 30, 2013 and September 29, 2013, respectively; the first, second and third quarters of fiscal 2012 ended on April 1, 2012, July 1, 2012 and September 30, 2012, respectively.

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries that are consolidated in accordance with U.S. GAAP. All intercompany balances and transactions have been eliminated.

The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make assumptions and estimates that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to provisions for doubtful accounts, legal contingencies, income taxes, long-lived assets, goodwill and intangible assets. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.

XML

Segments (Schedule of Segment Reporting Information by Segment) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Segment Reporting Information [Line Items]
Rental revenues	$ 30,990,000	$ 30,920,000	$ 92,724,000	$ 92,096,000
Financing revenues	3,156,000	3,152,000	10,223,000	11,394,000
Total segment revenues	161,283,000	216,318,000	482,566,000	691,291,000
Interest expense	24,979,000	28,896,000	75,230,000	88,767,000
Depreciation and amortization	8,900,000	9,800,000	26,516,000	30,756,000
Income before income taxes	30,125,000	86,596,000	87,271,000	163,070,000
Corporate and Other
Segment Reporting Information [Line Items]
Interest expense	28,900,000	33,200,000	87,500,000	101,900,000
Franchise Operations
Segment Reporting Information [Line Items]
Franchise revenues	111,700,000	102,600,000	331,600,000	313,500,000
Depreciation and amortization	2,700,000	2,500,000	8,100,000	7,400,000
Income before income taxes	83,300,000	75,500,000	248,800,000	232,400,000
Company Restaurants
Segment Reporting Information [Line Items]
Company restaurant sale revenue	15,400,000	79,600,000	48,100,000	274,300,000
Interest expense	100,000	100,000	300,000	300,000
Depreciation and amortization	500,000	1,600,000	1,600,000	6,400,000
Income before income taxes	(300,000)	11,000,000	(100,000)	42,000,000
Rental Operations
Segment Reporting Information [Line Items]
Rental revenues	31,000,000	30,900,000	92,700,000	92,100,000
Interest expense	3,800,000	4,200,000	12,000,000	12,800,000
Depreciation and amortization	3,300,000	3,400,000	10,100,000	10,300,000
Income before income taxes	6,800,000	6,700,000	19,800,000	19,000,000
Financing Operations
Segment Reporting Information [Line Items]
Financing revenues	3,200,000	3,200,000	10,200,000	11,400,000
Income before income taxes	3,200,000	3,200,000	10,000,000	9,800,000
Corporate
Segment Reporting Information [Line Items]
Interest expense	25,000,000	28,900,000	75,200,000	88,800,000
Depreciation and amortization	2,400,000	2,300,000	6,700,000	6,700,000
Income before income taxes	$ (62,900,000)	$ (9,800,000)	$ (191,200,000)	$ (140,100,000)

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Components of the Company’s stock-based compensation expense

The following table summarizes the components of the Company’s stock-based compensation expense included in general and administrative expenses in the consolidated financial statements:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
	(In millions)
Total stock-based compensation:
Equity classified award expense	$	1.2		$	2.2		$	7.1		$	8.8
Liability classified award (credit) expense	(0.8		)	1.9			(0.9		)	2.4
Total pretax stock-based compensation expense	0.4			4.1			6.2			11.2
Tax benefit	(0.2		)	(1.6		)	(2.4		)	(4.3		)
Total stock-based compensation expense, net of tax	$	0.2		$	2.5		$	3.8		$	6.9

Schedule of stock option valuation assumptions

The following summarizes the assumptions used in the Black-Scholes model:

Risk-free interest rate	0.78	%
Weighted average historical volatility	83.4	%
Dividend yield	4.15	%
Expected years until exercise	4.6
Forfeitures	11.0	%
Weighted average fair value of options granted	$36.00

Schedule of stock option activity

Option balances as of September 30, 2013 and activity related to stock options for the nine months ended September 30, 2013 were as follows:

	Shares		Weighted Average Exercise Price	Weighted Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value
Outstanding at December 31, 2012	958,246		$39.67
Granted	81,328		$72.28
Exercised	(153,454	)	$36.40
Forfeited	(39,243	)	$55.78
Outstanding at September 30, 2013	846,877		$42.65	6.24	$	21,878,000
Vested at September 30, 2013 and Expected to Vest	824,671		$42.14	6.17	$	21,683,000
Exercisable at September 30, 2013	637,782		$37.31	5.49	$	19,650,000

Schedule of restricted stock unit activity

Equity Classified Awards - Restricted Stock and Restricted Stock Units

Outstanding balances as of September 30, 2013 and activity related to restricted stock and restricted stock units for the nine months ended September 30, 2013 were as follows:

	Restricted Stock		Weighted Average Grant Date Fair Value	Restricted Stock Units		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2012	346,563		$44.74	33,242		$41.19
Granted	88,606		$72.16	15,387		$72.04
Conversion of cash-settled restricted stock units	—		—	37,184		$72.28
Released	(112,625	)	$30.09	(39,000	)	$54.66
Forfeited	(53,551	)	$54.76	—		—
Outstanding at September 30, 2013	268,993		$57.84	46,813		$64.57

Liability Classified Awards - Restricted Stock Units

	Restricted Stock Units		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2012	37,184		$66.13
Conversion to stock-settled restricted stock units	(37,184	)	$72.28
Outstanding at September 30, 2013	—		—

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Litigation, Claims and Disputes

The Company is subject to various lawsuits, administrative proceedings, audits, and claims arising in the ordinary course of business. Some of these lawsuits purport to be class actions and/or seek substantial damages. The Company is required under U.S. GAAP to record an accrual for litigation loss contingencies that are both probable and reasonably estimable. Legal fees and expenses associated with the defense of all of the Company's litigation are expensed as such fees and expenses are incurred. Management regularly assesses the Company's insurance coverage, analyzes litigation information with the Company's attorneys and evaluates the Company's loss experience in connection with pending legal proceedings. While the Company does not presently believe that any of the legal proceedings to which it is currently a party will ultimately have a material adverse impact on the Company, there can be no assurance that the Company will prevail in all the proceedings the Company is party to, or that the Company will not incur material losses from them.

Lease Guarantees

In connection with the sale of Applebee’s restaurants or previous brands to franchisees and other parties, the Company has, in certain cases, guaranteed or had potential continuing liability for lease payments totaling $431.9 million as of September 30, 2013. This amount represents the maximum potential liability for future payments under these leases. These leases have been assigned to the buyers and expire at the end of the respective lease terms, which range from 2013 through 2048. In the event of default, the indemnity and default clauses in the sale or assignment agreements govern the Company's ability to pursue and recover damages incurred.  No material liabilities have been recorded as of September 30, 2013.

Contingencies

In February 2013, an IHOP franchisee and its affiliated entities which owned and operated 19 restaurants located in the states of Illinois, Wisconsin and Missouri filed for bankruptcy protection. As a result of an order issued by the bankruptcy court, two of the 19 restaurants were returned to the Company in the third quarter of 2013. A non-cash charge of $0.5 million was recorded in the Consolidated Statement of Comprehensive Income against deferred rental revenue associated with the leases for those two restaurants. During the third quarter of 2013, the Company received favorable rulings from the bankruptcy court which, if upheld, would allow the Company to transfer the remaining 17 restaurants to another franchisee. These rulings have been appealed by the current franchisee and are presently subject to a stay, pursuant to which the current franchisee is operating these restaurants only on a day-to-day basis and is continuing to make payments to the Company pursuant to the terms of the original franchise agreements. Accordingly, the Company is unable to determine the ultimate outcome of the bankruptcy proceedings at this time.

In an unrelated matter, in April 2013, an Applebee's franchisee which owned and operated 33 restaurants located in Illinois filed for bankruptcy protection. Pursuant to the bidding procedures approved by the bankruptcy court, 15 of the restaurants were sold in June 2013 to an affiliate of an existing franchisee and operated without interruption during the transition of ownership. The remaining 18 restaurants were closed in June 2013. We received approximately $3.8 million in termination payments and other fees in connection with the closure of these restaurants. We also have entered into a development agreement with the franchisee that acquired the 15 restaurants to open additional restaurants in Illinois in the future.

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value of non-current financial liabilities

The fair values of non-current financial liabilities at September 30, 2013 and December 31, 2012, determined based on Level 2 inputs, were as follows:

	September 30, 2013				December 31, 2012
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In millions)
Long-term debt, less current maturities	$	1,205.0	$	1,311.6	$	1,202.1	$	1,334.2

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Segments (Tables)

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Schedule of segment reporting information by segment

Information on segments for the three and nine months ended September 30, 2013 and 2012 was as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
	(In millions)
Revenues from External Customers
Franchise operations	$	111.7		$	102.6		$	331.6		$	313.5
Company restaurants	15.4			79.6			48.1			274.3
Rental operations	31.0			30.9			92.7			92.1
Financing operations	3.2			3.2			10.2			11.4
Total	$	161.3		$	216.3		$	482.6		$	691.3
Interest Expense
Company restaurants	$	0.1		$	0.1		$	0.3		$	0.3
Rental operations	3.8			4.2			12.0			12.8
Corporate	25.0			28.9			75.2			88.8
Total	$	28.9		$	33.2		$	87.5		$	101.9
Depreciation and amortization
Franchise operations	$	2.7		$	2.5		$	8.1		$	7.4
Company restaurants	0.5			1.6			1.6			6.4
Rental operations	3.3			3.4			10.1			10.3
Corporate	2.4			2.3			6.7			6.7
Total	$	8.9		$	9.8		$	26.5		$	30.8
Income (loss) before income taxes
Franchise operations	$	83.3		$	75.5		$	248.8		$	232.4
Company restaurants	(0.3		)	11.0			(0.1		)	42.0
Rental operations	6.8			6.7			19.8			19.0
Financing operations	3.2			3.2			10.0			9.8
Corporate	(62.9		)	(9.8		)	(191.2		)	(140.1		)
Total	$	30.1		$	86.6		$	87.3		$	163.1

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Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Oct. 25, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	DineEquity, Inc.
Entity Central Index Key	0000049754
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		19,026,864

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Net Income per Share (Tables)

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Computation of the Company’s basic and diluted net income per share

The computation of the Company's basic and diluted net income per share for the three and nine months ended September 30, 2013 and 2012 was as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
	(In thousands, except per share data)
Numerator for basic and dilutive income per common share:
Net income	$	18,730		$	60,573		$	53,906		$	108,855
Less: Net income allocated to unvested participating restricted stock	(296		)	(1,187		)	(925		)	(2,477		)
Less: Accretion of Series B Convertible Preferred Stock	—			(688		)	—			(2,033		)
Net income available to common stockholders - basic	18,434			58,698			52,981			104,345
Effect of unvested participating restricted stock in two-class calculation	1			57			3			121
Accretion of Series B Convertible Preferred Stock	—			688			—			2,033
Net income available to common stockholders - diluted	$	18,435		$	59,443		$	52,984		$	106,499
Denominator:
Weighted average outstanding shares of common stock - basic	18,831			18,006			18,898			17,859
Dilutive effect of:
Stock options	254			246			268			270
Series B Convertible Preferred Stock	—			672			—			672
Weighted average outstanding shares of common stock - diluted	19,085			18,924			19,166			18,801
Net income per common share:
Basic	$	0.98		$	3.26		$	2.80		$	5.84
Diluted	$	0.97		$	3.14		$	2.76		$	5.66