XML 52 R12.htm IDEA: XBRL DOCUMENT v2.4.0.8
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