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 March 31, 2019

 OR

oTRANSITION 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

Dine Brands Global, 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 (Address of principal executive offices)	91203-1903 (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 every Interactive Data File required to be submitted 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 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, smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x	Accelerated filer  o
Non-accelerated filer  o
	Smaller reporting company o
	Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act o

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	DIN	New York Stock Exchange

As of April 25, 2019, the Registrant had 17,535,046 shares of Common Stock outstanding.

Dine Brands Global, Inc. and Subsidiaries

Index

		Page
PART I.	FINANCIAL INFORMATION	3
	Item 1—Financial Statements	3
	Consolidated Balance Sheets— March 31, 2019 (unaudited) and December 31, 2018	3
	Consolidated Statements of Comprehensive Income (unaudited)—Three Months Ended March 31, 2019 and 2018	4
	Consolidated Statements of Stockholders' Deficit (unaudited) - Three Months ended March 31, 2019 and 2018	5
	Consolidated Statements of Cash Flows (unaudited)—Three Months Ended March 31, 2019 and 2018	6
	Notes to Consolidated Financial Statements (unaudited)	7
	Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
	Item 3—Quantitative and Qualitative Disclosures about Market Risk	34
	Item 4—Controls and Procedures	34
PART II.	OTHER INFORMATION	34
	Item 1—Legal Proceedings	34
	Item 1A—Risk Factors	34
	Item 2—Unregistered Sales of Equity Securities and Use of Proceeds	35
	Item 3—Defaults Upon Senior Securities	35
	Item 4—Mine Safety Disclosures	35
	Item 5—Other Information	35
	Item 6—Exhibits	36
	Signatures	37

Cautionary Statement Regarding Forward-Looking Statements

Statements contained in this Quarterly Report on Form 10-Q may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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,” “would,” “should,” “could,” “expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan,” “goal” and other similar expressions. You should consider our forward-looking statements in light of the risks discussed under the heading “Risk Factors,” 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 Dine Brands Global, Inc. does not intend to, nor does it assume any obligation to, update or supplement any forward-looking statements after the date of this report to reflect actual results or future events or circumstances.

Factors that could cause actual results to differ materially from the projections, forecasts, estimates and expectations discussed in this Quarterly Report on Form 10-Q include, among other things: general economic conditions; our level of indebtedness; compliance with the terms of our securitized debt; our ability to refinance our current indebtedness or obtain additional financing; our dependence on information technology; potential cyber incidents; the implementation of restaurant development plans; our dependence on our franchisees; the concentration of our Applebee’s franchised restaurants in a limited number of franchisees; the financial health of our franchisees, including any insolvency or bankruptcy; credit risks from our IHOP franchisees operating under our Previous IHOP Business Model; insufficient insurance coverage to cover potential risks associated with the ownership and operation of restaurants; our franchisees’ and other licensees’ compliance with our quality standards and trademark usage; general risks associated with the restaurant industry; potential harm to our brands’ reputation; risks of food-borne illness or food tampering; possible future impairment charges; trading volatility and fluctuations in the price of our stock; our ability to achieve the financial guidance we provide to investors; successful implementation of our business strategy; the availability of suitable locations for new restaurants; shortages or interruptions in the supply or delivery of products from third parties or availability of utilities; the management and forecasting of appropriate inventory levels; development and implementation of innovative marketing and use of social media; changing health or dietary preference of consumers; risks associated with doing business in international markets; the results of litigation and other legal proceedings; third-party claims with respect to intellectual property assets; delivery initiatives and use of third-party delivery vendors; our

1

allocation of human capital and our ability to attract and retain management and other key employees; compliance with federal, state and local governmental regulations; risks associated with our self-insurance; natural disasters or other serious incidents; our success with development initiatives outside of our core business; the adequacy of our internal controls over financial reporting and future changes in accounting standards.

Fiscal Quarter End

The Company’s fiscal quarters end on the Sunday closest to the last day of each calendar quarter. For convenience, the fiscal quarters of each year are referred to as ending on March 31, June 30, September 30 and December 31. The first fiscal quarter of 2019 began on December 31, 2018 and ended on March 31, 2019. The first fiscal quarter of 2018 began on January 1, 2018 and ended on April 1, 2018.

2

PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements.

Dine Brands Global, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share and per share amounts)

Assets	March 31, 2019			December 31, 2018
	(Unaudited)
Current assets:
Cash and cash equivalents	$	132,932		$	137,164
Receivables, net	97,786			137,504
Restricted cash	36,654			48,515
Prepaid gift card costs	30,045			38,195
Prepaid income taxes	19,370			17,402
Other current assets	5,980			3,410
Total current assets	322,767			382,190
Other intangible assets, net	583,040			585,889
Operating lease right-of-use assets	383,962			—
Goodwill	343,862			345,314
Property and equipment, net	225,396			240,264
Long-term receivables, net	99,582			103,102
Deferred rent receivable	75,569			77,069
Non-current restricted cash	14,700			14,700
Other non-current assets, net	27,239			26,152
Total assets	$	2,076,117		$	1,774,680
Liabilities and Stockholders’ Deficit
Current liabilities:
Current maturities of long-term debt	$	—		$	25,000
Accounts payable	37,726			43,468
Gift card liability	115,974			160,438
Current maturities of operating lease obligations	67,340			—
Current maturities of finance lease and financing obligations	13,708			14,031
Accrued employee compensation and benefits	15,338			27,479
Dividends payable	12,461			11,389
Deferred franchise revenue, short-term	10,376			10,138
Other accrued expenses	30,167			24,243
Total current liabilities	303,090			316,186
Long-term debt, less current maturities	1,274,916			1,274,087
Operating lease obligations, less current maturities	386,364			—
Finance lease obligations, less current maturities	87,624			87,762
Financing obligations, less current maturities	38,306			38,482
Deferred income taxes, net	102,074			105,816
Deferred franchise revenue, long-term	62,472			64,557
Other non-current liabilities	12,092			90,063
Total liabilities	2,266,938			1,976,953
Commitments and contingencies
Stockholders’ deficit:
Common stock, $0.01 par value; shares: 40,000,000 authorized; March 31, 2019 - 24,974,665 issued, 17,650,765 outstanding; December 31, 2018 - 24,984,898 issued, 17,644,267 outstanding	250			250
Additional paid-in-capital	239,585			237,726
Retained earnings	24,588			10,414
Accumulated other comprehensive loss	(61		)	(60		)
Treasury stock, at cost; shares: March 31, 2019 - 7,323,900; December 31, 2018 - 7,340,631	(455,183		)	(450,603		)
Total stockholders’ deficit	(190,821		)	(202,273		)
Total liabilities and stockholders’ deficit	$	2,076,117		$	1,774,680

 See the accompanying Notes to Consolidated Financial Statements.

3

Dine Brands Global, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended
	March 31,
	2019			2018
Revenues:
Franchise revenues:
Royalties, franchise fees and other	$	96,296		$	91,477
Advertising revenue	72,630			63,836
Total franchise revenues	168,926			155,313
Company restaurant sales	35,735			—
Rental revenues	30,711			30,841
Financing revenues	1,810			2,009
Total revenues	237,182			188,163
Cost of revenues:
Franchise expenses:
Advertising expenses	72,630			63,836
Other franchise expenses	7,673			18,036
Total franchise expenses	80,303			81,872
Company restaurant expenses	31,538			—
Rental expenses:
Interest expense from finance leases	1,529			1,877
Other rental expenses	21,095			20,764
Total rental expenses	22,624			22,641
Financing expenses	146			150
Total cost of revenues	134,611			104,663
Gross profit	102,571			83,500
General and administrative expenses	42,819			41,911
Interest expense, net	15,393			15,199
Amortization of intangible assets	2,924			2,502
Closure and impairment charges	194			2,604
Loss (gain) on disposition of assets	109			(1,427		)
Income before income tax provision	41,132			22,711
Income tax provision	(9,489		)	(5,638		)
Net income	31,643			17,073
Other comprehensive income (loss) net of tax:
Adjustment to unrealized loss on available-for-sale investments	—			50
Foreign currency translation adjustment	(1		)	(3		)
Total comprehensive income	$	31,642		$	17,120
Net income available to common stockholders:
Net income	$	31,643		$	17,073
Less: Net income allocated to unvested participating restricted stock	(1,111		)	(568		)
Net income available to common stockholders	$	30,532		$	16,505
Net income available to common stockholders per share:
Basic	$	1.76		$	0.93
Diluted	$	1.73		$	0.92
Weighted average shares outstanding:
Basic	17,343			17,703
Diluted	17,690			17,845

See the accompanying Notes to Consolidated Financial Statements.

4

11. Facility Exit Costs (Continued)

Dine Brands Global, Inc. and Subsidiaries

Consolidated Statements of Stockholders' Deficit

(In thousands)

(Unaudited)

	Common Stock										Accumulated Other Comprehensive Loss			Treasury Stock
	Shares Outstanding		Amount		Additional Paid-in Capital			Retained Earnings (Accumulated Deficit)						Shares		Cost			Total
Balance at December 31, 2017	17,993		$	250	$	276,408		$	(69,940	)	$	(105	)	7,029		$	(422,153	)	$	(215,540	)
Net income	—		—		—			17,073			—			—		—			17,073
Other comprehensive gain	—		—		—			—			47			—		—			47
Purchase of Company common stock	(139	)	—		—			—			—			139		(10,003		)	(10,003		)
Reissuance of treasury stock	77		—		(2,495		)	—			—			(77	)	2,951			456
Net issuance of shares for stock plans	6		—		—			—			—			—		—			—
Repurchase of restricted shares for taxes	(15	)	—		(1,083		)	—			—			—		—			(1,083		)
Stock-based compensation	—		—		3,368			—			—			—		—			3,368
Dividends on common stock in excess of retained earnings	—		—		(11,204		)	—			—			—		—			(11,204		)
Balance at March 31, 2018	17,922		$	250	$	264,994		$	(52,867	)	$	(58	)	7,091		$	(429,205	)	$	(216,886	)

	Common Stock										Accumulated Other Comprehensive Loss			Treasury Stock
	Shares Outstanding		Amount		Additional Paid-in Capital			Retained Earnings						Shares		Cost			Total
Balance at December 31, 2018	17,644		$	250	$	237,726		$	10,414		$	(60	)	7,341		$	(450,603	)	$	(202,273	)
Adoption of ASC 842 (Note 3)	—		—		—			(5,030		)	—			—		—			(5,030		)
Net income	—		—		—			31,643			—			—		—			31,643
Other comprehensive loss	—		—		—			—			(1		)	—		—			(1		)
Purchase of Company common stock	(151	)	—		—			—			—			151		(12,015		)	(12,015		)
Reissuance of treasury stock	168		—		(667		)	—			—			(168	)	7,435			6,768
Net issuance of shares for stock plans	9		—		—			—			—			—		—			—
Repurchase of restricted shares for taxes	(19	)	—		(1,817		)	—			—			—		—			(1,817		)
Stock-based compensation	—		—		4,107			—			—			—		—			4,107
Dividends on common stock	—		—		236			(12,439		)	—			—		—			(12,203		)
Balance at March 31, 2019	17,651		$	250	$	239,585		$	24,588		$	(61	)	7,324		$	(455,183	)	$	(190,821	)

5

Dine Brands Global, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Three Months Ended
	March 31,
	2019			2018
Cash flows from operating activities:
Net income	$	31,643		$	17,073
Adjustments to reconcile net income to cash flows provided by operating activities:
Depreciation and amortization	10,179			7,940
Non-cash stock-based compensation expense	4,107			3,368
Non-cash interest expense	1,118			864
Closure and impairment charges	194			2,594
Deferred income taxes	(1,149		)	(1,182		)
Loss (gain) on disposition of assets	109			(1,421		)
Other	(3,976		)	(6,199		)
Changes in operating assets and liabilities:
Accounts receivable, net	(3,210		)	(8,804		)
Current income tax receivables and payables	(1,399		)	5,529
Gift card receivables and payables	(890		)	(2,269		)
Other current assets	(2,570		)	5,709
Accounts payable	1,826			65
Accrued employee compensation and benefits	(12,141		)	(3,448		)
Other current liabilities	5,088			(3,351		)
Cash flows provided by operating activities	28,929			16,468
Cash flows from investing activities:
Principal receipts from notes, equipment contracts and other long-term receivables	5,260			4,930
Additions to property and equipment	(4,717		)	(3,488		)
Proceeds from sale of property and equipment	400			655
Additions to long-term receivables	(395		)	(2,325		)
Other	(100		)	(27		)
Cash flows provided by (used in) investing activities	448			(255		)
Cash flows from financing activities:
Repayment of Variable Funding Notes	(25,000		)	—
Repayment of long-term debt	—			(3,250		)
Dividends paid on common stock	(11,153		)	(17,453		)
Repurchase of common stock	(10,802		)	(10,003		)
Principal payments on financing lease obligations	(3,466		)	(4,536		)
Proceeds from stock options exercised	6,768			456
Tax payments for restricted stock upon vesting	(1,817		)	(1,083		)
Cash flows used in financing activities	(45,470		)	(35,869		)
Net change in cash, cash equivalents and restricted cash	(16,093		)	(19,656		)
Cash, cash equivalents and restricted cash at beginning of period	200,379			163,146
Cash, cash equivalents and restricted cash at end of period	$	184,286		$	143,490
Supplemental disclosures:
Interest paid in cash	$	16,346		$	16,621
Income taxes paid in cash	$	12,014		$	934

See the accompanying Notes to Consolidated Financial Statements.

6

Dine Brands Global, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

1. General

The accompanying unaudited consolidated financial statements of Dine Brands Global, Inc. (the “Company” or “Dine Brands Global”) 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 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 three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the twelve months ending December 31, 2019.

The consolidated balance sheet at December 31, 2018 has been derived from the audited consolidated financial statements at that date but does not include all of 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, 2018.

2. Basis of Presentation

The Company’s fiscal quarters end on the Sunday closest to the last day of each calendar quarter. For convenience, the fiscal quarters of each year are referred to as ending on March 31, June 30, September 30 and December 31. The first fiscal quarter of 2019 began on December 31, 2018 and ended on March 31, 2019. The first fiscal quarter of 2018 began on January 1, 2018 and ended on April 1, 2018.

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, disclosures of contingent assets and liabilities, if any, at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates are made in the calculation and assessment of the following: impairment of goodwill, other intangible assets and tangible assets; income taxes; allowance for doubtful accounts and notes receivables; lease accounting estimates; contingencies; and stock-based compensation. On an ongoing basis, the Company evaluates its estimates based on historical experience, current conditions and various other assumptions that are believed to be reasonable under the circumstances. The Company adjusts such estimates and assumptions when facts and circumstances dictate. Actual results could differ from those estimates.

3. Accounting Standards Adopted and Newly Issued Accounting Standards Not Yet Adopted

Accounting Standards Adopted

In February 2016, the Financial Accounting Standards Board (“FASB”) issued guidance with respect to the accounting for leases, as codified in Accounting Standards Topic 842 (“ASC 842”). The guidance is intended to improve financial reporting of leasing transactions by requiring entities that lease assets to recognize assets and liabilities for the rights and obligations created by leases, as well as requiring additional disclosures related to an entity's leasing activities. The Company adopted this change in accounting principle using the modified retrospective method as of the first day of the first fiscal quarter of 2019. Accordingly, financial information for periods prior to the date of initial application has not been adjusted. The Company has elected the package of practical expedients for adoption that permitted the Company not to reassess its prior conclusions regarding lease identification, lease classification and initial direct costs. The Company did not elect to use an allowable expedient that permitted the use of hindsight in performing evaluations of its leases.

Upon adoption of ASC 842, the Company recognized operating lease obligations of $453.0 million, which represents the present value of the remaining minimum lease payments, discounted using the Company's incremental borrowing rate. The Company recognized operating lease right-of-use assets of $395.6 million. The Company recognized an adjustment to retained earnings upon adoption of $5.0 million, net of tax of $1.7 million, primarily related to an impairment resulting from an unfavorable differential between lease payments to be made and sublease rentals to be received on certain leases. The remaining difference of $50.7 million between the recognized operating lease obligation and right-of-use assets relates to the derecognition of certain liabilities and assets that had been recorded in accordance with U.S. GAAP that had been applied prior

7

Dine Brands Global, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

3. Accounting Standards Adopted and Newly Issued Accounting Standards Not Yet Adopted (Continued)

to the adoption of ASC 842, primarily $43.3 million of accrued rent payments. Lease-related reserves for lease incentives, closed restaurants and unfavorable leaseholds were also derecognized.

The accounting for the Company's existing finance (capital) leases upon adoption of ASC 842 remained substantially unchanged. Adoption of ASC 842 had no significant impact on the Company's cash flows from operations or its results of operations and did not impact any covenant related to the Company's long-term debt. The Company implemented internal controls necessary to ensure compliance with the accounting and disclosure requirements of ASC 842.

Additional new accounting guidance became effective for the Company as of the beginning of fiscal 2019 that the Company reviewed and concluded was either not applicable to its operations or had no material effect on its consolidated financial statements in the current or future fiscal years.

Newly Issued Accounting Standards Not Yet Adopted

In June 2016, the FASB issued new guidance on the measurement of credit losses on financial instruments. The new guidance will replace the incurred loss methodology of recognizing credit losses on financial instruments that is currently required with a methodology that estimates the expected credit loss on financial instruments and reflects the net amount expected to be collected on the financial instrument. Application of the new guidance may result in the earlier recognition of credit losses as the new methodology will require entities to consider forward-looking information in addition to historical and current information used in assessing incurred losses. The Company will be required to adopt the new guidance on a modified retrospective basis beginning with its first fiscal quarter of 2020, with early adoption permitted in its first fiscal quarter of 2019. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures.

In August 2018, the FASB issued guidance designed to improve the effectiveness of disclosures by removing, modifying and adding disclosures related to fair value measurements. The Company will be required to adopt the new guidance beginning with its first fiscal quarter of 2020; early adoption in any interim period after issuance of the new guidance is permitted. The Company is currently assessing the impact this guidance will have on its consolidated financial statements.

In August 2018, the FASB issued new guidance on the accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with existing guidance for capitalizing implementation cost incurred to develop or obtain internal-use software. The guidance also provides presentation and disclosure requirements for such capitalized costs. The Company will be required to adopt the new guidance beginning with its first fiscal quarter of 2020; early adoption in any interim period after issuance of the new guidance is permitted. The Company is currently assessing the impact this guidance will have 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's operations or that no material effect is expected on the Company's financial statements because of future adoption.

4. Revenue Disclosures

Franchise revenue (which comprises most of the Company's revenues) and revenue from company-operated restaurants are recognized in accordance with ASC 606. Under ASC 606, revenue is recognized upon transfer of control of promised services or goods to customers in an amount that reflects the consideration the Company expects to receive for those services or goods.

Franchising Activities

The Company owns and franchises the Applebee’s and IHOP restaurant concepts. The franchise arrangement for both brands is documented in the form of a franchise agreement and, in most cases, a development agreement. The franchise arrangement between the Company as the franchisor and the franchisee as the customer requires the Company to perform various activities to support the brand that do not directly transfer goods and services to the franchisee, but instead represent a single performance obligation, which is the transfer of the franchise license. The intellectual property subject to the franchise license is symbolic intellectual property as it does not have significant standalone functionality, and substantially all the utility is derived from its association with the Company’s past or ongoing activities. The nature of the Company’s promise in granting the franchise license is to provide the franchisee with access to the brand’s symbolic intellectual property over the term of the license. The services provided by the Company are highly interrelated with the franchise license and as such are considered to represent a single performance obligation.

8

Dine Brands Global, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

4. Revenue Disclosures (Continued)

The transaction price in a standard franchise arrangement for both brands primarily consists of (a) initial franchise/development fees; (b) continuing franchise fees (royalties); and (c) advertising fees. Since the Company considers the licensing of the franchising right to be a single performance obligation, no allocation of the transaction price is required. Additionally, all domestic IHOP franchise agreements require franchisees to purchase proprietary pancake and waffle dry mix from the Company.

The Company recognizes the primary components of the transaction price as follows:

• Franchise and development fees are recognized as revenue ratably on a straight-line basis over the term of the franchise agreement commencing with the restaurant opening date. As these fees are typically received in cash at or near the beginning of the franchise term, the cash received is initially recorded as a contract liability until recognized as revenue over time;

• The Company is entitled to royalties and advertising fees based on a percentage of the franchisee's gross sales as defined in the franchise agreement. Royalty and advertising revenue are recognized when the franchisee's reported sales occur. Depending on timing within a fiscal period, the recognition of revenue results in either what is considered a contract asset (unbilled receivable) or, once billed, accounts receivable, on the balance sheet.

• Revenue from the sales of proprietary pancake and waffle dry mix is recognized in the period in which distributors ship the franchisee's order; recognition of revenue results in accounts receivable on the balance sheet.

Company Restaurant Revenue

Sales by company-operated restaurants are recognized when food and beverage items are sold. Company restaurant sales are reported net of sales taxes collected from guests that are remitted to the appropriate taxing authorities.

In determining the amount and timing of revenue from contracts with customers, the Company exercises significant judgment with respect to collectibility of the amount; however, the timing of recognition does not require significant judgments as it is based on either the term of the franchise agreement, the month of reported sales by the franchisee or the date of product shipment, none of which require estimation. The Company does not incur a significant amount of contract acquisition costs in conducting its franchising activities. The Company believes its franchising arrangements do not contain a significant financing component.

The following table disaggregates franchise revenue by major type for the three months ended March 31, 2019 and 2018:

	Three Months Ended
	March 31,
	2019		2018
	(In thousands)
Franchise Revenue:
Royalties	$	78,730	$	75,097
Advertising fees	72,630		63,836
Pancake and waffle dry mix sales and other	14,431		13,097
Franchise and development fees	3,135		3,283
Total franchise revenue	$	168,926	$	155,313

Receivables from franchisees as of March 31, 2019 and December 31, 2018 were $67.1 million (net of allowance of $2.1 million) and $62.6 million (net of allowance of $4.6 million), respectively, and were included in receivables, net in the Consolidated Balance Sheets.

9

Dine Brands Global, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

4. Revenue Disclosures (Continued)

Changes in the Company's contract liability for deferred franchise and development fees during the three months ended March 31, 2019 are as follows:

	Deferred Franchise Revenue (short- and long-term)
	(In thousands)
Balance at December 31, 2018	$	74,695
Recognized as revenue during the three months ended March 31, 2019	(2,948		)
Fees deferred during the three months ended March 31, 2019	1,101
Balance at March 31, 2019	$	72,848

The balance of deferred revenue as of March 31, 2019 is expected to be recognized as follows:

	(In thousands)
Remainder of 2019	$	6,633
2020	10,066
2021	7,780
2022	7,251
2023	6,675
2024	5,987
Thereafter	28,456
Total	$	72,848

5. Lease Disclosures

The Company engages in leasing activity as both a lessee and a lessor. The majority of the Company's lease portfolio originated when the Company was actively involved in the development and financing of IHOP restaurants prior to the franchising of the restaurant to the franchisee. This activity included the Company's leasing or purchase of the site on which the restaurant was located and subsequently leasing/subleasing the site to the franchisee. With a few exceptions, the Company ended this practice in 2003 and the Company's current lease activity is predominantly comprised of renewals of existing lease arrangements and exercises of options on existing lease arrangements.

The Company currently leases from third parties the real property on which approximately 620 IHOP franchisee-operated restaurants are located; the Company (as lessor) subleases the property to the franchisees that operate those restaurants. The Company also leases property it owns to the franchisees that operate approximately 60 IHOP restaurants and one Applebee's restaurant. The Company leases from third parties the real property on which 69 Applebee's company-operated restaurants are located. The Company also leases office space for its principal corporate office in Glendale, California and a restaurant support center in Kansas City, Missouri. The Company does not have a significant amount of non-real estate leases.

The Company's existing leases related to IHOP restaurants generally provided for an initial term of 20 to 25 years with most having one or more five-year renewal options. Option periods were not included in determining liabilities and right-of-use assets related to operating leases. Approximately 260 of the Company's leases contain provisions requiring additional rent payments to the Company (as lessor) based on a percentage of restaurant sales. Approximately 220 of the Company's leases contain provisions requiring additional rent payments by the Company (as lessee) based on a percentage of restaurant sales.

The individual lease agreements do not provide information to determine the implicit rate in the agreements. The Company made significant judgments in determining the incremental borrowing rates that were used in calculating operating lease liabilities as of the adoption date. Due to the large number of leases, the Company applied a portfolio approach by grouping the leases based on the original lease term. The Company estimated the rate for each grouping primarily by reference to yield rates on debt issuances by companies of a similar credit rating as the Company, U.S. Treasury rates as of the adoption date and adjustments for differences in years to maturity.

10

Dine Brands Global, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

5. Lease Disclosures (Continued)

The Company's lease cost for the three months ended March 31, 2019 was as follows:

Finance lease cost:	(In millions)
Amortization of right-of-use assets	$	1.3
Interest on lease liabilities	2.1
Operating lease cost	26.4
Variable lease cost	0.7
Short-term lease cost	0.0
Sublease income	(28.1		)
Lease cost	$	2.4

Future minimum lease payments under noncancelable leases as lessee as of March 31, 2019 were as follows:

	Finance Leases			Operating Leases
	(In millions)
2019 (remaining nine months)	$	15.8		$	69.0
2020	20.1			93.0
2021	16.5			76.0
2022	14.7			68.0
2023	11.6			55.6
Thereafter	65.0			212.7
Total minimum lease payments	143.7			574.3
Less: interest/imputed interest	(43.1		)	(120.6		)
Total obligations	100.6			453.7
Less: current portion	(13.0		)	(67.3		)
Long-term lease obligations	$	87.6		$	386.4

The weighted average remaining lease term as of March 31, 2019 was 8.6 years for finance leases and 8.1 years for operating leases. The weighted average discount rate as of March 31, 2019 was 10.4% for finance leases and 5.8% for operating leases.

During the three months ended March 31, 2019, the Company made the following payments for leases:

	(In millions)
Principal payments on finance lease obligations	$	3.5
Interest payments on finance lease obligations	$	2.0
Payments on operating leases	$	22.9
Variable lease payments	$	0.9

The Company's income from operating leases for the three months ended March 31, 2019 was as follows:

	(In millions)
Minimum lease payments	$	25.7
Variable lease income	3.2
Total operating lease income	$	28.9

11

Dine Brands Global, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

5. Lease Disclosures (Continued)

Future minimum payments to be received as lessor under noncancelable operating leases as of March 31, 2019 were as follows:

	(In millions)
2019 (remaining nine months)	$	79.5
2020	107.1
2021	101.2
2022	98.1
2023	93.7
Thereafter	288.3
Total minimum rents receivable	767.9

The Company's income from direct financing leases for the three months ended March 31, 2019 was as follows:

	(In millions)
Interest income	$	1.4
Variable lease income	0.4
Total operating lease income	$	1.8

Future minimum payments to be received as lessor under noncancelable direct financing leases as of March 31, 2019 were as follows:

	(In millions)
2019 (remaining nine months)	$	12.1
2020	14.8
2021	11.7
2022	8.4
2023	3.6
Thereafter	3.7
Total minimum rents receivable	54.3
Less: unearned income	(11.4		)
Total net investment in direct financing leases	42.9
Less: current portion	(11.2		)
Long-term investment in direct financing leases	$	31.7

6. Long-Term Debt

At March 31, 2019 and December 31, 2018, long-term debt consisted of the following:

	March 31, 2019			December 31, 2018
	(In millions)
Series 2014-1 4.277% Fixed Rate Senior Secured Notes, Class A-2	$	1,283.8		$	1,283.8
Series 2018-1 Variable Funding Senior Notes Class A-1, variable interest rate of 4.93% at December 31, 2018	—			25.0
Class A-2 Note debt issuance costs	(8.9		)	(9.7		)
Long-term debt, net of debt issuance costs	1,274.9			1,299.1
Current portion of long-term debt	—			(25.0		)
Long-term debt	$	1,274.9		$	1,274.1

For a description of the Series 2014-1 4.277% Fixed Rate Senior Secured Notes, Class A-2 and the Series 2018-1 Variable Funding Notes Class A-1, 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, 2018.

12

DineEquity, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

6. Long-Term Debt (Continued)

During the three months ended March 31, 2019, the Company repaid $25.0 million of Variable Funding Notes, representing the amount outstanding at December 31, 2018. The Company did not draw on the Variable Funding Notes during the three months ended March 31, 2019. The maximum amount of Variable Funding Notes outstanding during the three months ended March 31, 2019 was $25.0 million and the weighted average interest rate on the Variable Funding Notes for the period outstanding was 4.88%.

At March 31, 2019, $2.2 million was pledged against the Variable Funding Notes for outstanding letters of credit, leaving $222.8 million of 2018 Variable Funding Notes available for borrowing. The letters of credit are used primarily to satisfy insurance-related collateral requirements.

7. Stockholders' Deficit

Dividends

During the three months ended March 31, 2019, the Company paid dividends on common stock of $11.2 million, representing a cash dividend of $0.63 per share declared in the fourth quarter of 2018. On February 20, 2019, the Company's Board of Directors declared a first quarter 2019 cash dividend of $0.69 per share of common stock. This dividend was paid on April 5, 2019 to stockholders of record at the close of business on March 20, 2019. The Company reported dividends payable of $12.5 million at March 31, 2019.

Dividends declared and paid per share for the three months ended March 31, 2019 and 2018 were as follows:

	Three months ended March 31,
	2019		2018
Dividends declared per common share	$	0.69	$	0.63
Dividends paid per common share	$	0.63	$	0.97

Stock Repurchase Program

In February 2019, the Company’s Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to $200 million of the Company’s common stock (“2019 Repurchase Program”) on an opportunistic basis from time to time in the open market or in privately negotiated transactions based on business, market, applicable legal requirements and other considerations.  The 2019 Repurchase Program, as approved by the Board of Directors, does not require the repurchase of a specific number of shares and can be terminated at any time. 

In October 2015, the Company's Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to $150 million of its common stock (the “2015 Repurchase Program”) on an opportunistic basis from time to time in open market transactions and in privately negotiated transactions based on business, market, applicable legal requirements and other considerations. The 2015 Repurchase Program, as approved by the Board of Directors, did not require the repurchase of a specific number of shares and could be terminated at any time. In connection with the approval of the 2019 Repurchase Program, the Board of Directors terminated the 2015 Repurchase Program.

A summary of shares repurchased under the 2019 Repurchase Program and the 2015 Repurchase Program, during the three months ended March 31, 2019 and cumulatively, is as follows:

	Shares	Cost of shares
		(In millions)
2019 Repurchase Program:
Repurchased during the three months ended March 31, 2019	40,817	$	3.6
Cumulative (life-of-program) repurchases	40,817	$	3.6
Remaining dollar value of shares that may be repurchased	n/a	$	196.4
2015 Repurchase Program:
Repurchased during the three months ended March 31, 2019	110,499	$	8.4
Cumulative (life-of-program) repurchases	1,589,995	$	126.2
Remaining dollar value of shares that may be repurchased	n/a	n/a

13

Dine Brands Global, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

7. Stockholders' Deficit (Continued)

Treasury Stock

Repurchases of the Company's common stock are included in treasury stock at the cost of shares repurchased plus any transaction costs. Treasury stock may be re-issued when stock options are exercised, when restricted stock awards are granted and when restricted stock units settle in stock upon vesting. The cost of treasury stock re-issued is determined using the first-in, first-out (“FIFO”) method. During the three months ended March 31, 2019, the Company re-issued 168,047 shares of treasury stock at a total FIFO cost of $7.4 million.

8. Income Taxes

The Company's effective tax rate was 23.1% for the three months ended March 31, 2019 as compared to 24.8% for the three months ended March 31, 2018. The effective tax rate of 23.1% for the three months ended March 31, 2019 was lower than the rate of the prior period primarily due to excess tax benefits on stock-based compensation.            

The total gross unrecognized tax benefit as of March 31, 2019 and December 31, 2018 was $5.2 million and $5.2 million, respectively, excluding interest, penalties and related tax benefits. The Company estimates the unrecognized tax benefit may decrease over the upcoming 12 months by an amount up to $0.9 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 as to when cash settlement with a taxing authority will occur.

As of March 31, 2019, accrued interest was $1.3 million and accrued penalties were less than $0.1 million, excluding any related income tax benefits. As of December 31, 2018, accrued interest was $1.1 million and accrued penalties were less than $0.1 million, excluding any related income tax benefits. The Company recognizes interest accrued related to unrecognized tax benefits and penalties as a component of its income tax provision recognized in its Consolidated Statements of Comprehensive Income.

The Company files federal income tax returns and the Company or one of its subsidiaries files 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 2011. The Internal Revenue Service commenced examination of the Company’s U.S. federal income tax return for the tax years 2011 to 2013 in fiscal year 2016. The examination is anticipated to conclude during fiscal year 2019. The Company believes that adequate reserves have been provided relating to all matters contained in the tax periods open to examination.

9. Stock-Based Compensation

The following table summarizes the components of stock-based compensation expense included in general and administrative expenses in the Consolidated Statements of Comprehensive Income:

	Three months ended March 31,
	2019			2018
	(In millions)
Total stock-based compensation expense:
Equity classified awards expense	$	4.1		$	3.4
Liability classified awards expense	1.0			0.5
Total pre-tax stock-based compensation expense	5.1			3.9
Book income tax benefit	(1.3		)	(1.0		)
Total stock-based compensation expense, net of tax	$	3.8		$	2.9

As of March 31, 2019, total unrecognized compensation expense of $24.1 million related to restricted stock and restricted stock units and $5.8 million related to stock options are expected to be recognized over a weighted average period of 1.7 years for restricted stock and restricted stock units and 1.8 years for stock options.

14

Dine Brands Global, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

9. Stock-Based Compensation (Continued)

Fair Value Assumptions

The Company granted 132,832 stock options during the three months ended March 31, 2019 for which the fair value was estimated using a Black-Scholes option pricing model. The following summarizes the assumptions used in the Black-Scholes model:

Risk-free interest rate	2.5	%
Weighted average historical volatility	30.3	%
Dividend yield	2.8	%
Expected years until exercise	4.7
Weighted average fair value of options granted	$21.93

Equity Classified Awards - Stock Options

Stock option balances at March 31, 2019, and activity for the three months ended March 31, 2019 were as follows:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value (in Millions)
Outstanding at December 31, 2018	1,439,708		$	63.21
Granted	132,832		98.97
Exercised	(116,590	)	58.05
Outstanding at March 31, 2019	1,455,950		66.88		6.8	$	38.2
Vested at March 31, 2019 and Expected to Vest	1,311,896		67.76		6.6	$	33.3
Exercisable at March 31, 2019	682,494		$	75.92	4.6	$	12.1

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the closing stock price of the Company’s common stock on the last trading day of the first quarter of 2019 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 March 31, 2019. 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 March 31, 2019, and activity related to restricted stock and restricted stock units for the three months ended March 31, 2019 were as follows:

	Restricted Stock		Weighted Average Grant Date Fair Value		Stock-Settled Restricted Stock Units		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2018	267,242		$	63.97	374,529		$	31.05
Granted	51,457		98.58		13,464		98.97
Released	(48,022	)	79.60		(12,293	)	90.34
Forfeited	(2,562	)	48.22		—		—
Outstanding at March 31, 2019	268,115		$	69.96	375,700		$	30.95

15

Dine Brands Global, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

9. Stock-Based Compensation (Continued)

Liability Classified Awards - Cash-settled Restricted Stock Units

The Company has granted cash-settled restricted stock units to certain employees. These instruments are recorded as liabilities at fair value as of the respective period end.

	Cash-Settled Restricted Stock Units		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2018	53,766		$	94.77
Granted	19,736		91.05
Released	(317	)	82.16
Forfeited	(3,622	)	98.96
Outstanding at March 31, 2019	69,563		$	93.58

For the three months ended March 31, 2019, and 2018, $0.6 million and $0.1 million, respectively, was included as stock-based compensation expense related to cash-settled restricted stock units.

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 multipliers from 0% to 200% of the target award based on (i) the total stockholder return of Dine Brands Global common stock compared to the total stockholder returns of a peer group of companies and (ii) the percentage increase in the Company's adjusted earnings per share (as defined). The awards are considered stock-based compensation and are classified as liabilities measured at fair value as of the respective period end. For the three months ended March 31, 2019 and 2018, $0.4 million and $0.4 million, respectively were included in total stock-based compensation expense related to LTIP awards. At March 31, 2019 and December 31, 2018, liabilities of $1.7 million and $2.4 million, respectively, related to LTIP awards were included as part of accrued employee compensation and benefits in the Consolidated Balance Sheets.

10. Segments

The Company identifies its reporting segments based on the organizational units used by management to monitor performance and make operating decisions. The Company currently has five operating segments: Applebee's franchise operations, Applebee's company-operated restaurant operations, IHOP franchise operations, rental operations and financing operations. The Company has four reportable segments: franchise operations, (an aggregation of Applebee's and IHOP franchise operations), company-operated restaurant operations, rental operations and financing operations. The Company considers these to be its reportable segments, regardless of whether any segment exceeds 10% of consolidated revenues, income before income tax provision or total assets.

As of March 31, 2019, the franchise operations segment consisted of (i) 1,761 restaurants operated by Applebee’s franchisees in the United States, two U.S. territories and 13 countries outside the United States and (ii) 1,822 restaurants operated by IHOP franchisees and area licensees in the United States, three U.S. territories and 12 countries outside the United States. Franchise operations revenue consists primarily of franchise royalty revenues, franchise advertising revenue, sales of proprietary products to franchisees (primarily pancake and waffle dry mixes for the IHOP restaurants), and franchise fees.  Franchise operations expenses include advertising expenses, the cost of IHOP proprietary products, bad debt expense, franchisor contributions to marketing funds, pre-opening training expenses and other franchise-related costs.

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.

16

Dine Brand Global, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

10. Segments (Continued)

Information on segments is as follows:

		Three months ended March 31,
		2019			2018
	(In millions)
Revenues from external customers:
Franchise operations		$	168.9		$	155.3
Rental operations		30.7			30.9
Company restaurants		35.8			—
Financing operations		1.8			2.0
Total		$	237.2		$	188.2
Interest expense:
Rental operations		$	2.5		$	2.4
Company restaurants		0.5			—
Corporate		15.4			15.2
Total		$	18.4		$	17.6
Depreciation and amortization:
Franchise operations		$	2.6		$	2.7
Rental operations		3.5			$	2.9
Company restaurants		1.3			—
Corporate		2.8			2.3
Total		$	10.2		$	7.9
Gross profit, by segment:
Franchise operations		$	88.6		$	73.4
Rental operations		8.1			8.2
Company restaurants		4.2			—
Financing operations		1.7			1.9
Total gross profit		102.6			83.5
Corporate and unallocated expenses, net		(61.5		)	(60.8		)
Income before income tax provision		$	41.1		$	22.7

11. Net Income per Share

The computation of the Company's basic and diluted net income per share is as follows:

	Three months ended March 31,
	2019			2018
	(In thousands, except per share data)
Numerator for basic and diluted income per common share:
Net income	$	31,643		$	17,073
Less: Net income allocated to unvested participating restricted stock	(1,111		)	(568		)
Net income available to common stockholders - basic	30,532			16,505
Effect of unvested participating restricted stock in two-class calculation	12			2
Net income available to common stockholders - diluted	$	30,544		$	16,507
Denominator:
Weighted average outstanding shares of common stock - basic	17,343			17,703
Dilutive effect of stock options	347			142
Weighted average outstanding shares of common stock - diluted	17,690			17,845
Net income per common share:
Basic	$	1.76		$	0.93
Diluted	$	1.73		$	0.92

17

Dine Brands Global, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

12. Fair Value Measurements

The Company does not have a material amount of financial assets or liabilities that are required under U.S. GAAP to be measured on a recurring basis at fair value. The Company is not a party to any derivative financial instruments. The Company does not have a material amount of non-financial assets or non-financial liabilities that are required under U.S. GAAP to be measured at fair value on a recurring basis. The Company has not elected to 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 and accounts payable approximate their carrying amounts due to their short duration.

The fair values of the Company's Series 2014-1 Class A-2 Notes (the “Class A-2 Notes”) at March 31, 2019 and December 31, 2018 were as follows:

	March 31, 2019		December 31, 2018
	(In millions)
Carrying amount of Class A-2 Notes	$	1,283.8	$	1,283.8
Fair Value of Class A-2 Notes	$	1,289.0	$	1,280.9

 The fair values were determined based on Level 2 inputs, including information gathered from brokers who trade in the Company’s Class A-2 Notes and information on notes that are similar to those of the Company.

13. 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 to franchisees, the Company has, in certain cases, guaranteed or has potential continuing liability for lease payments totaling $280.0 million as of March 31, 2019. 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 2019 through 2048. Excluding unexercised option periods, the Company's potential liability for future payments under these leases is $42.1 million. 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.

14. Restricted Cash

Current restricted cash of $36.7 million at March 31, 2019 primarily consisted of $33.7 million of funds required to be held in trust in connection with the Company's securitized debt and $2.9 million of funds from Applebee's franchisees pursuant to franchise agreements, usage of which was restricted to advertising activities. Current restricted cash of $48.5 million at December 31, 2018 primarily consisted of $42.3 million of funds required to be held in trust in connection with the Company's securitized debt and $6.2 million of funds from Applebee's franchisees pursuant to franchise agreements, usage of which was restricted to advertising activities.

Non-current restricted cash of $14.7 million at March 31, 2019 and December 31, 2018 represents interest reserves required to be set aside for the duration of the Company's securitized debt.

18

11. Facility Exit Costs (Continued)

15. Acquisition of Business

In December 2018, the Company acquired 69 Applebee’s restaurants in North Carolina and South Carolina from a former Applebee's franchisee for a total purchase price of $21.6 million. The Company entered into the transaction to resolve certain franchisee financial health issues in what the Company believes was the most expedient and favorable manner for the Company and the Applebee's system.

During the three months ended March 31, 2019, the Company completed the calculation of deferred income taxes related to the transaction and adjusted the preliminary purchase price as follows:

	Preliminary Allocation			Adjustments			Adjusted Allocation
	(In millions)
Reacquired franchise rights	$	11.6		$	—		$	11.6
Equipment and fixtures	10.0			—			10.0
Inventory	1.4			—			1.4
Deferred income taxes	—			1.5			1.5
Total identifiable assets acquired	23.0			1.5			24.5
Above-market leaseholds, net	(6.5		)	—			(6.5		)
Other liabilities	(1.0		)	—			(1.0		)
Net identifiable assets acquired	15.5			1.5			17.0
Goodwill	6.1			(1.5		)	4.6
Consideration transferred	$	21.6		$	—		$	21.6

In conjunction with the acquisition, the Company assumed capital (finance) lease obligations and related property under capital (finance) leases of $9.1 million. The Company also entered into new capital (finance) leases totaling $28.1 million of property under capital (finance) leases and capital (finance) lease obligations.

19

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

You should read the following Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) in conjunction with the consolidated financial statements and the related notes that appear elsewhere in this report. Statements contained in this report may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Please refer to the section of this report under the heading “Cautionary Statement Regarding Forward-Looking Statements” for more information.

Overview

The following discussion and analysis provides information which 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 the MD&A contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018. Except where the context indicates otherwise, the words “we,” “us,” “our,” “Dine Brands Global” and the “Company” refer to Dine Brands Global, 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 the Applebee's Neighborhood Grill & Bar^® (“Applebee's”) concept in the bar and grill segment within the casual dining category of the restaurant industry and we own and franchise the International House of Pancakes^® (“IHOP”) concept 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 and their sub-licensees (collectively, “area licensees”) or by us. With over 3,600 restaurants combined, the substantial majority of which are franchised, we believe we are one of the largest full-service restaurant companies in the world.

We identify our business segments based on the organizational units used by management to monitor performance and make operating decisions. We currently have five operating segments: Applebee's franchise operations, Applebee's company-operated restaurant operations, IHOP franchise operations, rental operations and financing operations. We have four reportable segments: franchise operations, (an aggregation of Applebee's and IHOP franchise operations), company-operated restaurant operations, rental operations and financing operations. We consider these to be our reportable segments, regardless of whether any segment exceeds 10% of consolidated revenues, income before income tax provision or total assets.

The financial tables appearing in Management's Discussion and Analysis present amounts in millions of dollars that are rounded from our consolidated financial statements presented in thousands of dollars. As a result, the tables may not foot or crossfoot due to rounding.

Key Financial Results

	Three months ended March 31,						Favorable (Unfavorable) Variance
	2019			2018
	(In millions, except per share data)
Income before income taxes	$	41.1		$	22.7		$	18.4
Income tax provision	(9.5		)	(5.6		)	(3.9		)
Net income	$	31.6		$	17.1		$	14.6
Effective tax rate	23.1		%	24.8		%	1.7		%
Net income per diluted share	$	1.73		$	0.92		$	0.81

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The following table highlights the primary reasons for the increase in our income before income taxes in the three months ended March 31, 2019 compared to the same period of 2018:

	Favorable (Unfavorable) Variance
	(In millions)
Increase (decrease) in gross profit:
Applebee's franchise operations	$	13.4
IHOP franchise operations	1.8
Company restaurant operations	4.2
All other operations	(0.3		)
Total gross profit increase	19.1
Increase in General and Administrative (“G&A”) expenses	(0.9		)
Other	0.2
Increase in income before income taxes	$	18.4

The changes in Applebee's franchise gross profit for the three months ended March 31, 2019 compared to the same period of the prior year were primarily due to franchisor contributions to the Applebee’s National Advertising Fund (the “Applebee's NAF”) of $13.5 million we made during the three months ended March 31, 2018 that did not recur in 2019. See “Consolidated Results of Operations - Comparison of the Three Months endedMarch 31, 2019 and 2018” for additional discussion of the changes presented above.

Our effective income tax rate for the three months ended March 31, 2019 was lower than the comparable period of 2018 due to the recognition of excess tax benefits on stock-based compensation during the three months ended March 31, 2019.

Key Performance Indicators

In evaluating the performance of each restaurant concept, we consider the key performance indicators to be the system-wide sales percentage change, the percentage change in domestic system-wide same-restaurant sales (“domestic same-restaurant sales”), net franchise restaurant development and the change in effective restaurants. Changes in both domestic same-restaurant sales and in the number of Applebee's and IHOP restaurants will impact our system-wide retail sales that drive franchise royalty revenues. Restaurant development also impacts franchise revenues in the form of initial franchise fees and, in the case of IHOP restaurants, sales of proprietary pancake and waffle dry mix.

Our key performance indicators for the three months ended March 31, 2019 were as follows:

	Three months ended March 31, 2019
	Applebee's		IHOP
Sales percentage (decrease) increase	(1.4	)%	2.4	%
% increase in domestic system-wide same-restaurant sales	1.8	%	1.2	%
Net franchise restaurant reductions (1)	(7	)	(9	)
Net (decrease) increase in total effective restaurants (2)	(92	)	30

________________________________________________

⁽¹⁾Franchise and area license restaurant openings, net of closings, during the three months ended March 31, 2019.

⁽²⁾Change in effective franchise, area license and company-operated restaurants open for the three months ended March 31, 2019 compared to the same period of 2018.

The Applebee's sales percentage decrease for the three months ended March 31, 2019 when compared to the same period of 2018 was due to restaurant closures over the past 12 months that were partially offset by an increase in domestic same-restaurant sales. The IHOP sales percentage increase for the three months ended March 31, 2019 was due to net restaurant development over the past 12 months and an increase in domestic same-restaurant sales.

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Domestic Same-Restaurant Sales

Applebee’s domestic same-restaurant sales increased1.8% for the three months ended March 31, 2019 from the same period in 2018, the sixth consecutive quarter of growth in same-restaurant sales. The improvement resulted from an increase in average customer check that was partially offset by a decline in customer traffic. The increase in domestic same-restaurant sales for three months ended March 31, 2019 primarily was due to an increase in off-premise sales, which comprised 13% of Applebee's sales mix during the quarter.

The increase in same-restaurant sales for the three months ended March 31, 2019 was impacted by comparisons against significant increases in same-restaurant sales and traffic for the three months ended March 31, 2018. In terms of a two-year comparison, Applebee's domestic same-restaurant sales have grown 5.1%, with increases in both average customer check and customer traffic.

Based on data from Black Box Intelligence, a restaurant sales reporting firm (“Black Box”), Applebee's outperformed the casual dining segment of the restaurant industry during the three months ended March 31, 2019. During that period, the casual dining segment experienced an increase in same-restaurant sales that was smaller than the Applebee's increase, due to an increase in average customer check that was partially offset by a decline in customer traffic. Applebee's increase in average customer check for the three months ended March 31, 2019 was larger than that of the casual dining segment, while Applebee's decrease in traffic was also larger than that of the casual dining segment.

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* Same-restaurant sales data includes area license restaurants beginning in 2019

IHOP’s domestic same-restaurant sales increased1.2% (including area license restaurants) for the three months ended March 31, 2019 from the same period in 2018. This growth was due to an increase in average customer check that was partially offset by a decline in customer traffic. The increase in average customer check was due in part to a favorable mix shift we believe was driven by successful promotional activity during the quarter. The increase in domestic same-restaurant sales for three months ended March 31, 2019 was favorably impacted by an increase in off-premise sales, which comprised 9.5% of IHOP's sales mix during the quarter. We believe the results for the first quarter were adversely impacted by a shift in the Easter holiday period which fell in the second quarter of 2019 as compared to the first quarter of 2018. Typically, the Easter holiday period has had a positive impact on IHOP sales.

Based on data from Black Box, the family dining segment of the restaurant industry experienced a small increase in same-restaurant sales during the three months ended March 31, 2019, compared to the same period of the prior year, due to an increase in average customer check that was offset by a decrease in customer traffic. IHOP's increase in same-restaurant sales during the three months ended March 31, 2019 was larger than that of that the family dining segment because of a larger increase in average customer check than that experienced by the family dining segment. This was partially offset by IHOP experiencing a decrease in customer traffic that was larger than that of the family dining segment.

Restaurant Data

The following table sets forth 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 period of the prior year. Sales at restaurants that are owned by franchisees and area licensees are not attributable to the Company and, as such, the percentage change in sales at Effective Restaurants is based on non-GAAP sales data. 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 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 plans for future development of additional restaurants as well as evaluation of current operations.

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	Three months ended March 31,
	2019			2018
Applebee's Restaurant Data	(Unaudited)
Effective Restaurants(a)
Franchise	1,762			1,923
Company	69			—
Total	1,831			1,923
System-wide(b)
Domestic sales percentage change(c)	(1.4		)%	0.9		%
Domestic same-restaurant sales percentage change(d)	1.8		%	3.3		%
Franchise(b)
Domestic sales percentage change(c)	(4.7		)%	0.9		%
Domestic same-restaurant sales percentage change(d)	1.6		%	3.3		%
Average weekly domestic unit sales (in thousands)	$	49.6		$	47.6
IHOP Restaurant Data
Effective Restaurants(a)
Franchise	1,657			1,619
Area license	156			164
Total	1,813			1,783
System-wide(b)
Sales percentage change(c)	2.4		%	3.9		%
Domestic same-restaurant sales percentage change, including area license restaurants(d)	1.2		%	1.0		%
Domestic same-restaurant sales percentage change, excluding area license restaurants(d)	1.1		%	1.0		%
Franchise(b)
Sales percentage change(c)	2.3		%	4.9		%
Domestic same-restaurant sales percentage change(d)	1.1		%	1.0		%
Average weekly unit sales (in thousands)	$	37.1		$	37.1
Area License(b)
Sales percentage change(c)	2.7		%	(0.2		)%

(a)   “Effective Restaurants” are the weighted average number of restaurants open in each 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 consist of restaurants owned by franchisees and area licensees as well as those owned by the Company.

 (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 Applebee's restaurants.  Sales at restaurants that are owned by franchisees and area licensees are not attributable to the Company. An increase in franchisees' reported sales will result in a corresponding increase in our royalty revenue, while a decrease in franchisees' reported sales will result in a corresponding decrease in our royalty revenue. Unaudited reported sales for Applebee's domestic franchise restaurants, Applebee's company-operated restaurants, IHOP franchise restaurants and IHOP area license restaurants were as follows:

	Three months ended March 31,
	2019		2018
Reported sales (in millions)	(Unaudited)
Applebee's domestic franchise restaurant sales	$	1,044.2	$	1,095.6
Applebee's company-operated restaurants	35.7		—
IHOP franchise restaurant sales	798.8		780.6
IHOP area license restaurant sales	74.3		72.3
Total	$	1,953.0	$	1,948.5

(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 fiscal period, 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 restaurant openings and restaurant closures, the domestic restaurants open throughout both fiscal periods being compared may be different from period to period.

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Restaurant Development Activity	Three months ended March 31,
	2019		2018
Applebee's	(Unaudited)
Summary - beginning of period:
Franchise	1,768		1,936
Company restaurants	69		—
Beginning of period	1,837		1,936
Franchise restaurants opened:
International	—		2
Total franchise restaurants opened	—		2
Franchise restaurants closed:
Domestic	(4	)	(22	)
International	(3	)	(4	)
Total franchise restaurants closed	(7	)	(26	)
Net franchise restaurant reduction	(7	)	(24	)
Summary - end of period:
Franchise	1,761		1,912
Company restaurants	69		—
Total Applebee's restaurants, end of period	1,830		1,912
Domestic	1,689		1,760
International	141		152

IHOP
Summary - beginning of period:
Franchise	1,669		1,622
Area license	162		164
Total IHOP restaurants, beginning of period	1,831		1,786
Franchise/area license restaurants opened:
Domestic franchise	6		13
International franchise	—		3
Total franchise/area license restaurants opened	6		16
Franchise/area license restaurants closed:
Domestic franchise	(11	)	(5	)
Domestic area license	(3	)	—
International franchise	(1	)	(6	)
Total franchise/area license restaurants closed	(15	)	(11	)
Net franchise/area license restaurant (reduction) development	(9	)	5
Summary - end of period:
Franchise	1,663		1,627
Area license	159		164
Total IHOP restaurants, end of period	1,822		1,791
Domestic	1,697		1,679
International	125		112

For the full year of 2019, we expect Applebee's franchisees to close between 20 and 30 net restaurants globally, the majority of which are expected to be domestic closures. IHOP franchisees and area licensees are projected to develop between 35 and 55 net new IHOP restaurants globally, the majority of which are expected to be domestic openings.

The actual number of openings may differ from both our expectations and development commitments. Historically, the actual number of restaurants developed in any given 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. The actual number of closures also may differ from expectations. Our franchisees are independent businesses and decisions to close restaurants can be impacted by numerous factors, in addition to declines in same-restaurant sales, that are outside of our control, including but not limited to, franchisees' agreements with landlords and lenders.

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CONSOLIDATED RESULTS OF OPERATIONS

Comparison of the Three Months endedMarch 31, 2019 and 2018

Events Impacting Comparability of Financial Information

Acquisition of Franchise Restaurants

In December 2018, we acquired 69 Applebee's restaurants in North and South Carolina from a former Applebee's franchisee. While we currently intend to own and operate these restaurants for the near term, we will assess and monitor opportunities to refranchise these restaurants under favorable circumstances. We operated no restaurants of either brand during the three months ended March 31, 2018.

Franchisor Contributions to the Applebee’s NAF

We contributed $13.5 million to the Applebee's NAF during the three months ended March 31, 2018 to mitigate the decline in franchisee contributions due to restaurant closures and the non-timely payment of advertising fees by certain franchisees. Our contributions to the Applebee's NAF ceased as of June 30, 2018.

Temporary Increase in Franchisee Contribution Rate to the Applebee's NAF

The contribution rate to the Applebee’s NAF for virtually all Applebee’s franchisees was 3.5% of their gross sales for the period from January 1, 2018 to June 30, 2018. Such franchisees also agreed to an incremental temporary increase of 0.75% in the advertising contribution rate to 4.25%, effective July 1, 2018 to December 31, 2019. As a result, the advertising contribution rate for virtually all Applebee's franchisees was 4.25% during the three months ended March 31, 2019 as compared to 3.50% during the three months ended March 31, 2018. This increased advertising revenue by approximately $8 million in 2019.

Financial Results

Revenue		Three months ended March 31,					Favorable (Unfavorable) Variance
		2019			2018
	(In millions)
Franchise operations		$	168.9		$	155.3	$	13.6
Rental operations		30.7			30.9		(0.2		)
Company restaurant operations		35.8			—		35.8
Financing operations		1.8			2.0		(0.2		)
Total revenue		$	237.2		$	188.2	$	49.0
Change vs. prior period		26.1		%

Total revenue for the three months ended March 31, 2019 increased compared with the same period of the prior year, primarily due to the operation of 69 Applebee's restaurant acquired in December 2018 and the impact of a higher advertising contribution rate on Applebee's advertising revenue. IHOP restaurant development over the past 12 months and increases in same-restaurant sales for both Applebee's and IHOP also contributed to the increase in revenue.

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Gross Profit	Three months ended March 31,					Favorable (Unfavorable) Variance
	2019			2018
	(In millions)
Franchise operations	$	88.6		$	73.4	$	15.2
Rental operations	8.1			8.2		(0.1		)
Company restaurant operations	4.2			—		4.2
Financing operations	1.7			1.9		(0.2		)
Total gross profit	$	102.6		$	83.5	$	19.1
Change vs. prior period	22.8		%

Total gross profit for the three months ended March 31, 2019 increased nearly 23% compared with the same period of the prior year, primarily due to a $13.5 million contribution to the Applebee's NAF made during the three months ended March 31, 2018 that did not recur in 2019. Operation of 69 Applebee's restaurants favorably impacted total gross profit by $2.8 million, as the gross profit of $4.2 million from operating the 69 restaurants was partially offset by royalties of approximately $1.4 million that would have been recognized in franchise operations had the restaurants been franchisee-operated. IHOP restaurant development over the past 12 months and increases in same-restaurant sales for both Applebee's and IHOP also contributed to the increase in gross profit.

	Three months ended March 31,						Favorable (Unfavorable) Variance
Franchise Operations	2019			2018
	(In millions, except number of restaurants)
Effective Franchise Restaurants:(1)
Applebee’s	1,762			1,923			(161		)
IHOP	1,813			1,783			30
Franchise Revenues:
Applebee’s franchise fees	$	43.3		$	40.7		$	2.6
IHOP franchise fees	53.0			50.8			2.2
Advertising fees	72.6			63.8			8.8
Total franchise revenues	168.9			155.3			13.6
Franchise Expenses:
Applebee’s	0.6			11.4			10.8
IHOP	7.1			6.7			(0.4		)
Advertising expenses	72.6			63.8			(8.8		)
Total franchise expenses	80.3			81.9			1.6
Franchise Gross Profit:
Applebee’s	42.7			29.3			13.4
IHOP	45.9			44.1			1.8
Total franchise gross profit	$	88.6		$	73.4		$	15.2
Gross profit as % of revenue (2)	52.5		%	47.3		%
Gross profit as % of franchise fees (2) (3)	92.0		%	80.3		%

 _____________________________________________________

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

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

⁽³⁾ From time to time, advertising fee revenue may be different from advertising expenses in a given accounting period. Over the long term, advertising revenue should not generate gross profit or loss.

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Applebee’s franchise fee revenue for the three months ended March 31, 2019 increased 6% compared to the same period of the prior year. The increase was primarily due to an improvement in revenue collectibility of $4.5 million as a result of favorable changes in franchisee health and the impact on royalty revenue of a 1.6% increase in domestic franchise same-restaurant sales. These favorable items were partially offset by a $2.8 million decrease in revenue because of fewer effective franchise restaurants, the number of which declined due to restaurant closures and our acquisition of 69 Applebee's restaurants in North and South Carolina from a former Applebee's franchisee in December 2018.

The decrease in Applebee's franchise expenses for the three months ended March 31, 2019 compared with the same period of the prior year was primarily due to a decrease of $13.5 million in franchisor contributions to the Applebee's NAF, partially offset by a $3.0 million decrease in bad debt recoveries. Our franchisor contributions to the Applebee's NAF ceased as of June 30, 2018.

IHOP franchise fee revenue for the three months ended March 31, 2019 increased 4% compared to the same period of the prior year, primarily due to an increase in sales of pancake and waffle dry mix, an increase in Effective Franchise Restaurants because of net restaurant development over the past twelve months and a 1.2% increase in domestic same-restaurant sales.

The increase in IHOP franchise expenses for the three months ended March 31, 2019 compared with the same period of the prior year was primarily due to an increase in purchases of pancake and waffle dry mix partially offset by a decrease in bad debt expense.

Advertising revenue and expense for the three months ended March 31, 2019 increased compared to the same period of the prior year, primarily due to an increase in the franchisee advertising contribution rate to the Applebee's NAF. As previously reported, virtually all domestic Applebee's franchisees agreed to an incremental temporary increase of 0.75% in the advertising contribution rate to 4.25% effective July 1, 2018 to December 31, 2019. This change represented $7.7 million of the increase. In addition, advertising revenue and expense increased due to an improvement of franchisee collectibility of advertising fees from certain Applebee's franchisees, IHOP net restaurant development over the past twelve months and increases in Applebee's and IHOP domestic same-restaurant sales. It is our policy to recognize any excess or deficiency of advertising fee revenue compared to advertising expenditure in the fourth quarter of our fiscal year.

Gross profit as a percentage of franchise fees increased for the three months ended March 31, 2019 compared to the same period of the prior year, primarily due to the $13.5 million franchisor contribution to the Applebee's NAF made in the first quarter of 2018 that did not recur in 2019. IHOP net restaurant development over the past twelve months and increases in Applebee's and IHOP domestic same-restaurant sales also contributed to the improvement in gross profit percentage.

Rental Operations	Three months ended March 31,						Favorable (Unfavorable) Variance
	2019			2018
	(In millions)
Rental revenues	$	30.7		$	30.9		$	(0.2	)
Finance lease interest	1.5			1.9			0.4
Other rental expenses	21.1			20.8			(0.3		)
Total rental expenses	22.6			22.7			0.1
Rental operations gross profit	$	8.1		$	8.2		$	(0.1	)
Gross profit as % of revenue (1)	26.3		%	26.6		%

_____________________________________________________

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

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

Rental segment revenue for the three months ended March 31, 2019 decreased as compared to the same period of the prior year due to the progressive decline of $0.3 million in interest income as direct financing leases are repaid, partially offset by contractual increases in base sub-rental income. Rental segment expenses for the three months ended March 31, 2019 were essentially unchanged from the same period of the prior year.

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Company Restaurant Operations

As discussed above under “Events Impacting Comparability of Financial Information,” we acquired 69 Applebee’s restaurants in North Carolina and South Carolina in December 2018. We had no company-operated restaurants of either brand during the first quarter of 2018.

Financing Operations

Financing revenues primarily consist of interest income from the financing of equipment leases and franchise fees, as well as sales of equipment associated with refranchised IHOP restaurants. Financing expenses are the cost of any restaurant equipment sold associated with refranchised IHOP restaurants.

Financing revenue and gross profit for the three months ended March 31, 2019 did not change significantly compared to the same period of the prior year.

G&A Expenses	Three months ended March 31,				Favorable (Unfavorable) Variance
	2019		2018
	(In millions)
	$	42.8	$	41.9	$	(0.9	)

The increase in G&A expenses for the three months ended March 31, 2019 compared to the same period of the prior year was primarily due to a $3.1 million increase in personnel-related costs, partially offset by decreases in costs of professional services, travel and conferences.

Other Income and Expense Items	Three months ended March 31,					Favorable (Unfavorable) Variance
	2019		2018
	(In millions)
Interest expense	$	15.4	$	15.2		$	(0.2	)
Amortization of intangible assets	2.9		2.5			(0.4		)
Closure and impairment costs	0.2		2.6			2.4
Loss (gain) on disposition of assets	0.1		(1.4		)	(1.5		)
Total	$	18.6	$	18.9		$	0.3

Interest expense

Interest expense for the three months ended March 31, 2019 was slightly higher than the same period of the prior year, primarily due to amortization of costs associated with the issuance of variable funding notes in September 2018.

Amortization of intangible assets

Amortization of intangible assets for the three months ended March 31, 2019 increased compared to the same period of the prior year due to amortization of reacquired franchise rights recognized in conjunction with the December 2018 acquisition of 69 Applebee's restaurants.

Closure and impairment costs

There were no individually significant closure and impairment charges during the three months ended March 31, 2019. Closure and impairment charges of $2.6 million for the three months ended March 31, 2018 primarily comprised of lease closure obligations, net of estimated subrental income, related to two properties on which refranchised Applebee's company-operated restaurants had been located. There were no other individually significant charges in that period.

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Gain on disposition of assets

There were no individually significant asset dispositions during the three months ended March 31, 2019. During the three months ended March 31, 2018, the sublease tenant of a property with lease terms favorable to the Company purchased the property, which allowed us to recognize a gain of $1.4 million on disposition of the favorable lease asset.

Income Taxes	Three months ended March 31,						Favorable (Unfavorable) Variance
	2019			2018
	(In millions)
Income tax provision	$	9.5		$	5.6		$	(3.9	)
Effective tax rate	23.1		%	24.8		%	1.7		%

Our income tax provision will vary from period to period for two reasons: a change in income before income taxes and a change in the effective tax rate. Changes in our income before income taxes were addressed in the preceding sections of “Consolidated Results of Operations - Comparison of the Three Months Ended March 31, 2019 and 2018.”

Our effective tax rate for the three months ended March 31, 2019 was lower compared to the same period of the prior year due to recognition of excess tax benefits on stock-based compensation. Completion of the IRS audits for tax years 2011 through 2013 will allow us to accelerate the collection of certain tax benefits recognized in prior years. As a result, we expect to receive a cash refund of $12.4 million, excluding interest, in 2019. The expected refund is currently included in Prepaid Income Taxes in the Consolidated Balance Sheets.

Liquidity and Capital Resources

At March 31, 2019, our outstanding long-term debt consisted of $1.3 billion of Series 2014-1 4.277% Fixed Rate Senior Notes, Class A-2 (the “Class A-2 Notes”). We also have a revolving financing facility consisting of Series 2018-1 Variable Funding Senior Notes, Class A-1 (the “Variable Funding Notes” or “VFN”), which allows for drawings of up to $225 million of Variable Funding Notes and the issuance of letters of credit. The Class A-2 Notes and the Variable Funding Notes are referred to collectively as the “Notes.” The Notes were issued in a private securitization transaction pursuant to which substantially all our domestic revenue-generating assets and our domestic intellectual property are held by certain special-purpose, wholly-owned indirect subsidiaries of the Company (the “Guarantors”) that act as guarantors of the Notes and that have pledged substantially all their assets to secure the Notes.

While the Notes are outstanding, payment of principal and interest is required to be made on the Class A-2 Notes on a quarterly basis. The quarterly principal payment of $3.25 million on the Class A-2 Notes may be suspended when the leverage ratio for the Company and its subsidiaries is less than or equal to 5.25x. At December 31, 2018, our leverage ratio was 4.90x and we were not required to make a principal payment in the first quarter of 2019. At March 31, 2019, our leverage ratio was 4.75x and we will not be required to make a principal payment in the second quarter of 2019. Exceeding the leverage ratio of 5.25x does not violate any covenant related to the Notes. We may voluntarily repay the Class A-2 Notes at any time, and as of September 30, 2018, there was no longer any make-whole payment required for voluntary repayment.

The Variable Funding Notes were not drawn upon at March 31, 2019. During the three months ended March 31, 2019, we repaid $25.0 million of Variable Funding Notes, representing the amount outstanding at December 31, 2018; we did not draw on the Variable Funding Notes during the three months ended March 31, 2019. The maximum amount of Variable Funding Notes outstanding during the three months ended March 31, 2019 was $25.0 million and the weighted average interest rate on the Variable Funding Notes for the period outstanding was 4.88%. Additionally, at March 31, 2019, $2.2 million was pledged against the Variable Funding Notes for outstanding letters of credit, leaving $222.8 million of 2018 Variable Funding Notes available for borrowing. The letters of credit are used primarily to satisfy insurance-related collateral requirements.

The Notes are subject to customary rapid amortization events for similar types of financing, including events tied to our failure to maintain the stated debt service coverage ratio (“DSCR”), the sum of domestic retail sales for all restaurants being below certain levels on certain measurement dates, certain manager termination events, certain events of default and the failure to repay or refinance the Notes on the Class A-2 Anticipated Repayment Date in September 2021. The Notes are also subject to certain customary events of default, including events relating to non-payment of required interest, principal or other amounts due on or with respect to the Notes, failure to maintain the stated DSCR, failure to comply with covenants within certain time frames, certain bankruptcy events, breaches of specified representations and warranties and certain judgments.

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Failure to maintain a prescribed DSCR can trigger a Cash Trapping Event, A Rapid Amortization Event, a Manager Termination Event or a Default Event as described below. In a Cash Trapping Event, the Trustee is required to retain a certain percentage of excess Cash Flow (as defined) in a restricted account. In a Rapid Amortization Event, all excess Cash Flow is retained and used to retire principal amounts of debt. Key DSCRs are as follows:

•DSCR less than 1.75x but equal to or greater than 1.50x - Cash Trapping Event, 50% of Net Cash Flow

•DSCR less than 1.50x - Cash Trapping Event, 100% of Net Cash Flow

•DSCR less than 1.30x - Rapid Amortization Event

•DSCR less than 1.20x - Manager Termination Event

•DSCR less than 1.10x - Default Event

Our DSCR for the reporting period ended March 31, 2019 was 4.95x.

Capital Allocation

Dividends

During the three months ended March 31, 2019, we paid dividends on common stock of $11.2 million, representing a cash dividend of $0.63 per share declared in the fourth quarter of 2018 and paid in January 2018. On February 20, 2019, our Board of Directors declared a first quarter 2019 cash dividend of $0.69 per share of common stock. This dividend was paid on April 5, 2019 to our stockholders of record at the close of business on March 20, 2019. We reported dividends payable of $12.5 million at March 31, 2019.

Share Repurchases

In February 2019, the Company’s Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to $200 million of the Company’s common stock (“2019 Repurchase Program”) on an opportunistic basis from time to time in the open market or in privately negotiated transactions based on business, market, applicable legal requirements and other considerations.  The 2019 Repurchase Program, as approved by the Board of Directors, does not require the repurchase of a specific number of shares and can be terminated at any time. 

In October 2015, the Company's Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to $150 million of the Company's common stock (the “2015 Repurchase Program”) on an opportunistic basis from time to time in open market transactions and in privately negotiated transactions based on business, market, applicable legal requirements and other considerations. The 2015 Repurchase Program, as approved by the Board of Directors, did not require the repurchase of a specific number of shares and could be terminated at any time. In connection with the approval of the 2019 Repurchase Program, the Board of Directors terminated the 2015 Repurchase Program.

A summary of shares repurchased under the 2019 Repurchase Program and the 2015 Repurchase Program, during the three months ended March 31, 2019 and cumulatively, is as follows:

	Shares	Cost of shares
		(In millions)
2019 Repurchase Program:
Repurchased during the three months ended March 31, 2019	40,817	$	3.6
Cumulative (life-of-program) repurchases	40,817	$	3.6
Remaining dollar value of shares that may be repurchased	n/a	$	196.4
2015 Repurchase Program:
Repurchased during the three months ended March 31, 2019	110,499	$	8.4
Cumulative (life-of-program) repurchases	1,589,995	$	126.2
Remaining dollar value of shares that may be repurchased	n/a	n/a

We evaluate dividend payments on common stock and repurchases of common stock within the context of our overall capital allocation strategy with our Board of Directors on an ongoing basis, giving consideration to our current and forecast earnings, financial condition, cash requirements and other factors.

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From time to time, we also repurchase shares owned and tendered by employees to satisfy tax withholding obligations on the vesting of restricted stock awards. Shares are deemed purchased at the closing price of our common stock on the vesting date. See Part II, Item 2 for detail on all share repurchase activity during the first quarter of 2019.

Cash Flows

In summary, our cash flows for the three months ended March 31, 2019 and 2018 were as follows:

	Three months ended March 31,
	2019			2018			Variance
	(In millions)
Net cash provided by operating activities	$	28.9		$	16.5		$	12.4
Net cash provided by (used in) investing activities	0.4			(0.3		)	0.7
Net cash used in financing activities	(45.5		)	(35.9		)	(9.6		)
Net decrease in cash, cash equivalents and restricted cash	$	(16.1	)	$	(19.7	)	$	3.6

Operating Activities

Cash provided by operating activities increased $12.4 million during the three months ended March 31, 2019 compared to the same period of the prior year. Our net income plus the non-cash reconciling items shown in our statements of cash flows (primarily depreciation, deferred taxes and stock-based compensation) increased $19.2 million from 2018. This change was primarily due to an increase in gross profit and a lower effective tax rate, each of which was discussed in preceding sections of the MD&A. Additionally, net changes in working capital used cash of $13.3 million during the three months ended March 31, 2019 compared to using cash of $6.6 million during the same period of the prior year. This unfavorable change of $6.7 million between years primarily resulted from an increase in payments for incentive compensation and income taxes, partially offset by the timing of payments of marketing accruals. The increase of $12.4 million in cash provided by operating activities for the three months ended March 31, 2019 was due to the favorability of $19.2 million in net income plus non-cash reconciling items offset by the unfavorable change of $6.7 million in cash used by working capital changes.

Investing Activities

Investing activities provided net cash of $0.4 million for the three months ended March 31, 2019. Principal receipts from notes, equipment contracts and other long-term receivables of $5.3 million were partially offset by $4.7 million in capital expenditures and loans to franchisees of $1.4 million.

Financing Activities

Financing activities used net cash of $45.5 million for the three months ended March 31, 2019. Cash used in financing activities primarily consisted of repayments of 2018 Variable Funding Notes of $25.0 million, cash dividends paid on our common stock totaling $11.2 million, repurchases of our common stock totaling $10.8 million and repayments of capital lease obligations of $3.5 million. These financing outflows were partially offset bya net cash inflow of approximately $5.0 million related to equity compensation awards.

Cash and Cash Equivalents

At March 31, 2019, our cash and cash equivalents totaled $132.9 million, including $58.4 million of cash held for gift card programs and advertising funds. Additionally, our franchisor subsidiaries held a total of approximately $29 million in cash at March 31, 2019, to maintain certain net worth requirements under state franchise disclosure laws.

Based on our current level of operations, we believe that our cash flow from operations, available cash and available borrowing capacity under our Variable Funding Notes will be adequate to meet our liquidity needs for the next twelve months.

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Adjusted Free Cash Flow

We define “adjusted free cash flow” for a given period as cash provided by operating activities, plus receipts from notes and equipment contract receivables, less additions to property and equipment. Management uses this liquidity measure in its periodic assessment of, among other things, cash dividends per share of common stock and repurchases of common stock and we believe it is important for investors to have the same measure used by management for that purpose. Adjusted free cash flow does not represent residual cash flow available for discretionary purposes.

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

	Three months ended March 31,
	2019			2018			Variance
	(In millions)
Cash flows provided by operating activities	$	28.9		$	16.5		$	12.4
Receipts from notes and equipment contracts receivable	3.5			2.3			1.2
Additions to property and equipment	(4.7		)	(3.5		)	(1.2		)
Adjusted free cash flow	$	27.7		$	15.3		$	12.4

The increase in adjusted free cash flow for the three months ended March 31, 2019 compared to the same period of the prior year is primarily due to the increase in cash from operating activities discussed above.

Statement of Financial Position

As discussed in Note 3, “Accounting Standards Adopted and Newly Issued Accounting Standards Not Yet Adopted,” in the Notes to Consolidated Financial Statements, we adopted the guidance as codified in ASC 842 with respect to accounting for leases. We adopted this change in accounting principle using the modified retrospective method as of the first day of our first fiscal quarter of 2019. Upon adoption of ASC 842, we recognized operating lease obligations of $453.0 million, which represents the present value of the remaining minimum lease payments, discounted using our incremental borrowing rate. We recognized operating lease right-of-use assets of $395.6 million and also recognized an adjustment to retained earnings upon adoption of $5.0 million, net of tax of $1.7 million, primarily related to an impairment resulting from an unfavorable differential between lease payments to be made and sublease rentals to be received on certain leases. The remaining difference of $50.7 million between the recognized operating lease obligation and right-of-use assets relates to the derecognition of certain liabilities and assets that had been recorded in accordance with U.S. GAAP that had been applied prior to the adoption of ASC 842, primarily $43.3 million of accrued rent payments. Lease-related reserves for lease incentives, closed restaurants and unfavorable leaseholds were also derecognized.The accounting for our existing finance (capital) leases upon adoption of ASC 842 remained substantially unchanged. Adoption of ASC 842 had no significant impact on our cash flows from operations or our results of operations.

Off-Balance Sheet Arrangements

We have obligations for guarantees on certain franchisee lease agreements, as disclosed in Note 12 - Commitments and Contingencies, of Notes to Consolidated Financial Statements of Part I, Item 1 of this Form 10-Q. Other than such guarantees, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4) of SEC Regulation S-K as of March 31, 2019.

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, 2018.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with U.S. GAAP requires us to make estimates and assumptions affecting 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

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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, 2018. During the three months ended March 31, 2019, there were no significant changes in our estimates and critical accounting policies, other than our accounting policy for leases, which changed because of the adoption of ASC 842 as discussed in Note 3, “Accounting Standards Adopted and Newly Issued Accounting Standards Not Yet Adopted,” in the Notes to Consolidated Financial Statements.

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 for the year ended December 31, 2018.

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.

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 are 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, 2018.

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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 (b)
December 31, 2018 - January 27, 2019(a)	75,915	$	73.66	74,896	$	33,700,000
January 28, 2019 - February 24, 2019(a)	37,291	81.18		37,218	$	199,900,000
February 25, 2019 - March 31, 2019(a)	57,334	90.92		39,202	$	196,400,000
	170,540	$	81.11	151,316	$	196,400,000

^(a) These amounts include 1,019 shares owned and tendered by employees at an average price of $78.64 per share during the fiscal month ended January 27, 2019, 73 shares owned and tendered by employees at an average price of $87.40 per share during the fiscal month ended February 24, 2019 and 18,132 shares owned and tendered by employees at an average price of $95.46 per share during the fiscal month ended March 31, 2019, to satisfy tax withholding obligations arising upon vesting of restricted stock awards. Shares so surrendered by the participants are repurchased by us pursuant to the terms of the plan under which the shares were issued and the applicable individual award agreements and not pursuant to publicly announced repurchase authorizations.

^(b)   In February 2019, the Company’s Board of Directors approved the 2019 Repurchase Program authorizing the Company to repurchase up to $200 million of the Company's common stock. In connection with the approval of the 2019 Repurchase Program, the Board of Directors terminated the 2015 Repurchase Program, which authorized the Company to repurchase up to $150 million of the Company's common stock. The 2019 Repurchase Program, as approved by the Board of Directors, does not require the repurchase of a specific number of shares and can be terminated at any time.

Item 3.  Defaults Upon Senior Securities.

None.

Item 4.  Mine Safety Disclosures.

Not Applicable.

Item 5.  Other Information.

None.

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Item 6. Exhibits.

†*10.1	Dine Brands Global, Inc. 2016 Stock Incentive Plan Performance Award Agreement - Employees - Double Metric - Cycle 10
†10.2	Separation Agreement and General Release between Greggory H. Kalvin and Dine Brands Global, Inc. dated February 20, 2019 (Exhibit 10.1 to Registrant's Form 8-K filed on February 21, 2019 is incorporated herein by reference).
*31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
*31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
*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.

† A contract, compensatory plan or arrangement in which directors or executive officers are eligible to participate.

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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.

		Dine Brands Global, Inc. (Registrant)
Dated:	1st day of May, 2019	By:	/s/ Stephen P. Joyce
			Stephen P. Joyce Chief Executive Officer (Principal Executive Officer)
Dated:	1st day of May, 2019	By:	/s/ Thomas H. Song
			Thomas H. Song Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

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EX-10.1

Exhibit 10.1

Performance Award Agreement – Employees – Double Metric – Cycle 10

DINE BRANDS GLOBAL, INC.
2016 STOCK INCENTIVE PLAN
PERFORMANCE AWARD AGREEMENT

THIS PERFORMANCE AWARD AGREEMENT (the “Agreement”) is entered into as of ___________, by and between DINE BRANDS GLOBAL, INC. (formerly, DineEquity, Inc.), a Delaware corporation (the “Company”), and ___________, an employee of the Company (the “Participant”).

RECITALS:

Pursuant to the Dine Brands Global, Inc. 2016 Stock Incentive Plan (the “Plan”), the Compensation Committee of the Board of Directors of the Company (the “Committee”), as the administrator of the Plan, has determined that the Participant is to be granted a Performance Award (the “Award”) payable in the form of cash on the terms and conditions set forth herein.

Any capitalized terms not defined herein shall have their respective meanings set forth in the Plan.

AGREEMENT:

In consideration of the foregoing and of the mutual covenants set forth herein and other good and valuable consideration, the parties hereto agree as follows:

1.GRANT OF PERFORMANCE UNITS. Subject to the attainment of the performance goals set forth on Exhibit A, the Participant is entitled to that number of performance units (“Performance Units”) determined in accordance with Exhibit A and subject to the terms and conditions of this Agreement. Each Performance Unit shall have a value of $1.00. At the end of the three-year performance period beginning on [______] and ending on [______] (the “Performance Period”), the Committee shall determine the total number of Performance Units payable pursuant to the Award in accordance with the two Performance Unit matrices set forth on Exhibit A hereto and the Committee’s determination of the applicable performance levels.

2.VESTING AND SETTLEMENT OF PERFORMANCE UNITS.

(a) Service Vesting. Subject to the Participant’s continuous employment with the Company through the last day of the Performance Period and subject to the certification by the Committee of the performance levels achieved, as set forth in Exhibit A, the Participant shall become vested in the number of Performance Units that are earned. Performance Units that have vested in accordance with this Section 2 are referred to herein as “Vested Units.” Performance Units that are not vested are referred to herein as “Unvested Units.”

(b) Disability or Death. If the Participant’s employment with the Company terminates due to Disability or death, the Performance Units shall become immediately vested on a prorated basis, based on the portion of the Performance Period that has elapsed prior to the date of termination, determined in accordance with the Company’s administrative practices, and thereafter be considered Vested Units; provided that the number of Performance Units earned shall be determined at the end of the Performance Period based on the actual performance levels achieved, as set forth in Exhibit A.

(c) Change in Control. Upon the occurrence of a Change in Control, the Participant shall, with respect to all outstanding, unvested Performance Units held by the Participant immediately prior to the Change in Control, be deemed to have satisfied the performance criteria, as set forth in Exhibit A, based on actual performance through the date of the Change in Control, and following the Change in Control the Performance Units shall continue to vest based upon the service vesting requirements of Sections 2(a) and 2(b). If the Participant’s employment with the Company is terminated within a period of twenty-four (24) months following the Change in Control (i) by the Company other than for Cause or (ii) by the Participant for Good Reason (as such terms are defined herein below or in the Plan), the Performance Units shall become immediately and fully vested and thereafter be considered Vested Units, and shall be paid to the Participant not later than thirty (30) days after the date of such termination.

(d) Retirement. If the Participant’s employment with or service to the Company terminates by reason of Retirement, the Performance Units shall become immediately fully vested and thereafter be considered Vested Units; provided that the number of Performance Units earned shall be determined at the end of the Performance Period based on the actual performance levels achieved, as set forth in Exhibit A.

(e) Termination of Unvested Units. Except as set forth in Sections 2(b), 2(c) and 2(d), upon the termination of the Participant’s employment, any then Unvested Units held by the Participant shall be forfeited and canceled as of the date of such termination.

(f) Settlement of Vested Units. The Vested Units shall be settled by the delivery of a cash payment equal to $1.00 times the number of Vested Units to the Participant or a designated brokerage firm within 2½ months after the last day of the Performance Period or, if earlier, in accordance with Section 2(b).

3.NON-TRANSFERABILITY OF AWARD. The Award and this Agreement shall not be transferable other than by will, the laws of descent and distribution, or pursuant to beneficiary designation procedures approved by the Company. Notwithstanding the foregoing, the Award and this Agreement may be transferable to the Participant’s family members, to a trust or entity established by the Participant for estate planning purposes, to a charitable organization designated by the Participant or pursuant to a qualified domestic relations order. Except to the extent permitted by this Section 3, the Award may be exercised or settled during the Participant’s lifetime only by the Participant or the Participant’s legal representative or similar person. Except as permitted by this Section 3, the Award may not be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment or similar process. Upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of the Award, the Award and all rights thereunder shall immediately become null and void.

4.DISPUTE RESOLUTION. The parties hereto will use their reasonable best efforts to resolve any dispute hereunder through good faith negotiations. A party hereto must submit a written notice to any other party to whom such dispute pertains, and any such dispute that cannot be resolved within thirty (30) calendar days of receipt of such notice (or such other period to which the parties may agree) will be submitted to an arbitrator selected by mutual agreement of the parties. In the event that, within fifty (50) days of the written notice referred to in the preceding sentence, a single arbitrator has not been selected by mutual agreement of the parties, a panel of arbitrators (with each party to the dispute being entitled to select one arbitrator and, if necessary to prevent the possibility of deadlock, one additional arbitrator being selected by such arbitrators selected by the parties to the dispute) shall be selected by the parties. Except as otherwise provided herein or as the parties to the dispute may otherwise agree, such arbitration will be conducted in accordance with the then existing rules of the American Arbitration Association. The decision of the arbitrator or arbitrators, or of a majority thereof, as the case may be, made in writing will be final and binding upon the parties hereto as to the questions submitted, and the parties will abide by and comply with such decision; provided, however, the arbitrator or arbitrators, as the case may be, shall not be empowered to award punitive damages. Unless the decision of the arbitrator or arbitrators, as the case may be, provides for a different allocation of costs and expenses determined by the arbitrators to be equitable under the circumstances, the prevailing party or parties in any arbitration will be entitled to recover all reasonable fees (including but not limited to attorneys’ fees) and expenses incurred by it or them in connection with such arbitration from the non-prevailing party or parties.

5.NOTICES. Any notice required or permitted under this Agreement shall be deemed given when delivered either personally, by overnight courier, or when deposited in a United States Post Office, postage prepaid, addressed as appropriate, to the Participant either at his/her address set forth below or such other address as he or she may designate in writing to the Company, or to the Company: Attention: General Counsel (or said designee), at the Company’s address or such other address as the Company may designate in writing to the Participant.

6.RIGHTS AS A STOCKHOLDER. This Award shall not entitle the Participant to any privileges of ownership of shares of Common Stock.

7.FAILURE TO ENFORCE NOT A WAIVER. The failure of the Company to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.

8.WITHHOLDING. The Company shall withhold from any payment to the Participant under this Agreement, the amount necessary to satisfy any federal, state, local or other taxes that may be required to be withheld in connection with the Award.

9.INCORPORATION OF PLAN. The Plan is hereby incorporated by reference and made a part hereof, and the Award and this Agreement are subject to all terms and conditions of the Plan.

10.EMPLOYMENT. Neither the Plan, the granting of the Award, this Agreement nor any other action taken pursuant to the Plan shall confer upon any person any right to continued employment by or service with the Company, any Subsidiary or any affiliate of the Company or affect in any manner the right of the Company, any Subsidiary or any affiliate of the Company to terminate the employment of any person at any time without liability hereunder. For purposes of this Agreement, references to employment shall include employment or service with any Subsidiary of the Company.

11.AMENDMENT AND TERMINATION. The Board may amend the Plan as it shall deem advisable, subject to any requirement of stockholder approval required by applicable law, rule or regulation, including Section 162(m) of the Code provided, however, that no amendment may impair the rights of the Participant without the consent of the Participant.

12.GOVERNING LAW. To the extent not otherwise governed by the Code or the laws of the United States, this Agreement shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Delaware, without regard to its conflicts of laws rules.

13.SECTION 409A. This Agreement is intended to comply with the requirements of Section 409A of the Code, and shall be interpreted and construed consistently with such intent. The payments to the Participant pursuant to this Agreement are also intended to be exempt from Section 409A of the Code to the maximum extent possible as short-term deferrals pursuant to Treasury regulation §1.409A-1(b)(4). In the event the terms of this Agreement would subject the Participant to taxes or penalties under Section 409A of the Code (“409A Penalties”), the Company and the Participant shall cooperate diligently to amend the terms of this Agreement to avoid such 409A Penalties, to the extent possible; provided that in no event shall the Company be responsible for any 409A Penalties that arise in connection with any amounts payable under this Agreement. To the extent any amounts under this Agreement are payable by reference to the Participant’s termination of employment, such term shall be deemed to refer to the Participant’s “separation from service,” within the meaning of Section 409A of the Code. Notwithstanding any other provision in this Agreement, if the Participant is a “specified employee,” as defined in Section 409A of the Code, as of the date of Participant’s separation from service, then to the extent any amount payable to the Participant (i) constitutes the payment of nonqualified deferred compensation, within the meaning of Section 409A of the Code, (ii) is payable upon the Participant’s separation from service and (iii) under the terms of this Agreement would be payable prior to the six-month anniversary of the Participant’s separation from service, such payment shall be delayed until the earlier to occur of (a) the first business day following the six-month anniversary of the separation from service and (b) the date of the Participant’s death.

14.COUNTERPARTS. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

15.AWARDS SUBJECT TO CLAWBACK. The Award and any cash payment or shares of Common Stock delivered pursuant to the Award are subject to forfeiture, recovery by the Company or other action pursuant to this Agreement or any clawback or recoupment policy which the Company may adopt from time to time, including without limitation any such policy which the Company may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law.

16.DEFINED TERMS. As used in this Agreement, the following terms shall have the meanings set forth below:

(a) “Cause” shall mean as determined by the Company, (i) the willful failure by the Participant to substantially perform his or her duties with the Company (other than any such failure resulting from the Participant’s incapacity due to physical or mental illness); (ii) the Participant’s willful misconduct that is demonstrably and materially injurious to the Company, monetarily or otherwise; (iii) the Participant’s commission of such acts of dishonesty, fraud, misrepresentation or other acts of moral turpitude as would prevent the effective performance of the Participant’s duties; or (iv) the Participant’s conviction or plea of no contest to a felony or a crime of moral turpitude.

(b) “Disability” shall mean that the Participant, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, is receiving income replacement benefits for a period of not less than three months under a long-term disability plan maintained by the Company or one of its Subsidiaries.

(c) The Participant shall have “Good Reason” to effect a voluntary termination of his or her employment in the event that the Company (i) breaches its obligations to pay any salary, benefit or bonus due to him or her, including its obligations under this Agreement, (ii) requires the Participant to relocate more than 50 miles from the Participant’s current, principal place of employment, (iii) assigns to the Participant any duties inconsistent with the Participant’s position with the Company or significantly and adversely alters the nature or status of the Participant’s responsibilities or the conditions of the Participant’s employment, or (iv) reduces the Participant’s base salary and/or bonus opportunity, except for across-the-board reductions similarly affecting all similarly situated employees of the Company and all similarly situated employees of any corporation or other entity which is in control of the Company; and in the event of any of (i), (ii), (iii) or (iv), the Participant has given written notice to the Committee or the Board of Directors as to the details of the basis for such Good Reason within thirty (30) days following the date on which the Participant alleges the event giving rise to such Good Reason occurred, the Company has failed to provide a reasonable cure within thirty (30) days after its receipt of such notice and the effective date of the termination for Good Reason occurs within 90 days after the initial existence of the facts or circumstances constituting Good Reason.

IN WITNESS WHEREOF, the parties have executed this Performance Award Agreement on the day and year first above written.

COMPANY:DINE BRANDS GLOBAL INC.
By:        Stephen P. Joyce    Chief Executive Officer

PARTICIPANT:[Name]AddressCity/State/Zip

Exhibit A

Target Number of Performance Units (the “Target Award”): ________

1. Performance Criteria. Fifty percent (50%) of the Performance Units shall be earned based on Average Annual AEPS Growth and fifty percent (50%) of the Performance Units shall be earned based on TSR Performance, in accordance with the matrices below.

(a) Average Annual AEPS Growth. The target number of Performance Units subject to attainment of Average Annual AEPS Growth goals shall be fifty percent (50%) of the Target Award (the “Target AEPS Growth Units”).

Average Annual AEPS Growth	Percentage of Target AEPS Growth Units Earned
<7.5%	0%
7.5%	50%
15%	100%
≥30%	200%

The payout shall be interpolated on a linear basis between 50% and 200% of the Target AEPS Growth Units to the extent the Average Annual AEPS Growth of the Company is greater than 10% and less than 30%.

(b) TSR Performance. The target number of Performance Units subject to attainment of TSR goals shall be fifty percent (50%) of the Target Award (the “Target TSR Units”).

Percentile Rank of Company’s TSR Performance Among TSR Comparator Group Over Performance Period	Percentage of Target TSR Units Earned
<33rd Percentile	0%
33rd Percentile	50%
50th Percentile	100%
60th Percentile	125%
70th Percentile	150%
≥80th Percentile	200%

The payout shall be interpolated on a linear basis between 50% and 200% of Target TSR Units to the extent the TSR Performance of the Company is greater than the 33^rd percentile and less than the 80^th percentile among the Company’s TSR Comparator Group.

For purposes of this Award:

“Annual AEPS Growth” means, for each year in the Performance Period, the percentage change in the Company’s adjusted earnings per share as determined by the Board and reported on the Company’s financial statements.

“Average Annual AEPS Growth” means the sum of the Annual AEPS Growth with respect to each year in the Performance Period, divided by three.

“Stock Price” means the closing transaction price of a share of common stock of a company, as reported on the principal national stock exchange on which such common stock is traded, for the day on which the Stock Price is being determined, or if no such shares are traded on such day, the most recent day on which such shares were traded.

“TSR Comparator Group” means an index of restaurant companies approved by the Committee at the beginning of the Performance Period, and adjusted in accordance with the guidelines set forth below:

(i) If two indexed companies merge, the performance of the combined companies is tracked for balance of the Performance Period.

(ii) If an indexed company is acquired by a non-indexed company, the acquired company is excluded from the calculation.

(iii) If an indexed company becomes insolvent, it is included as zero at the bottom of the ranking.

“TSR Performance” means a company’s cumulative total shareholder return as measured by dividing (A) the sum of (i) the cumulative amount of dividends for the Performance Period and (ii) the increase or decrease in the Stock Price from the first day of the Performance Period to the last day of the Performance Period, by (B) the Stock Price determined as of the first day of the Performance Period.

EX-31.1

Exhibit 31.1

Certification Pursuant to

Rule 13a-14(a) of the

Securities Exchange Act of 1934, As Amended

I, Stephen P. Joyce, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Dine Brands Global, 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:	1st day of May, 2019	/s/ Stephen P. Joyce
		Stephen P. Joyce 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 H. Song, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Dine Brands Global, 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:	1st day of May, 2019	/s/ Thomas H. Song
		Thomas H. Song Chief Financial Officer (Principal Financial Officer and Principal Accounting 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 Dine Brands Global, Inc. (the “Company”) for the quarter ended March 31, 2019, as filed with the Securities and Exchange Commission on the 1st day of May, 2019 (the “Report”), Stephen P. Joyce, as 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 my 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:	1st day of May, 2019	/s/ Stephen P. Joyce
		Stephen P. Joyce 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 Dine Brands Global, Inc. (the “Company”) for the quarter ended March 31, 2019, as filed with the Securities and Exchange Commission on the 1st day of May, 2019 (the “Report”), Thomas H. Song, 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 my 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:	1st day of May, 2019	/s/ Thomas H. Song
		Thomas H. Song Chief Financial Officer (Principal Financial Officer and Principal Accounting 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.

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Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	Apr. 25, 2019
Document and Entity Information [Abstract]
Entity Registrant Name	Dine Brands Global, 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	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		17,535,046
Emerging Growth Company	false
Entity Small Business	false

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 132,932	$ 137,164
Receivables, net	97,786	137,504
Restricted cash	36,654	48,515
Prepaid gift card costs	30,045	38,195
Prepaid income taxes	19,370	17,402
Other current assets	5,980	3,410
Total current assets	322,767	382,190
Other intangible assets, net	583,040	585,889
Operating lease right-of-use asset	383,962
Goodwill	343,862	345,314
Property and equipment, net	225,396	240,264
Long-term receivables, net	99,582	103,102
Deferred rent receivable	75,569	77,069
Non-current restricted cash	14,700	14,700
Other non-current assets, net	27,239	26,152
Total assets	2,076,117	1,774,680
Current liabilities:
Current maturities of long-term debt	0	25,000
Accounts payable	37,726	43,468
Gift card liability	115,974	160,438
Current maturities of operating lease obligations	67,340
Current maturities of finance lease and financing obligations	13,708	14,031
Accrued employee compensation and benefits	15,338	27,479
Dividends payable	12,461	11,389
Deferred franchise revenue, short-term	10,376	10,138
Other accrued expenses	30,167	24,243
Total current liabilities	303,090	316,186
Long-term debt, less current maturities	1,274,916	1,274,087
Operating lease obligations, less current maturities	386,364
Finance lease obligations, less current maturities	87,624
Finance lease obligations, less current maturities		87,762
Financing obligations, less current maturities	38,306	38,482
Deferred income taxes, net	102,074	105,816
Deferred franchise revenue, long-term	62,472	64,557
Other non-current liabilities	12,092	90,063
Total liabilities	2,266,938	1,976,953
Commitments and contingencies
Stockholders’ deficit:
Common stock, $0.01 par value; shares: 40,000,000 authorized; March 31, 2019 - 24,974,665 issued, 17,650,765 outstanding; December 31, 2018 - 24,984,898 issued, 17,644,267 outstanding	250	250
Additional paid-in-capital	239,585	237,726
Retained earnings	24,588	10,414
Accumulated other comprehensive loss	(61)	(60)
Treasury stock, at cost; shares: March 31, 2019 - 7,323,900; December 31, 2018 - 7,340,631	(455,183)	(450,603)
Total stockholders’ deficit	(190,821)	(202,273)
Total liabilities and stockholders’ deficit	$ 2,076,117	$ 1,774,680

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Consolidated Balance Sheets (Parentheticals) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	40,000,000	40,000,000
Common stock, shares issued (in shares)	24,974,665	24,984,898
Common stock, shares outstanding (in shares)	17,650,765	17,644,267
Treasury stock, shares (in shares)	7,323,900	7,340,631

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Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenues:
Rental revenues	$ 30,711	$ 30,841
Total revenues	237,182	188,163
Cost of revenues:
Franchise expenses:	80,303	81,872
Company restaurant expenses	31,538	0
Interest expense from finance leases	1,529	1,877
Other rental expenses	21,095	20,764
Rental expenses:	22,624	22,641
Financing expenses	146	150
Total cost of revenues	134,611	104,663
Gross profit	102,571	83,500
General and administrative expenses	42,819	41,911
Interest expense, net	15,393	15,199
Amortization of intangible assets	2,924	2,502
Closure and impairment charges	194	2,604
Loss (gain) on disposition of assets	109	(1,427)
Income before income tax provision	41,132	22,711
Income tax provision	(9,489)	(5,638)
Net income	31,643	17,073
Other comprehensive income (loss) net of tax:
Adjustment to unrealized loss on available-for-sale investments	0	50
Foreign currency translation adjustment	(1)	(3)
Total comprehensive income	31,642	17,120
Net income available to common stockholders:
Net income	31,643	17,073
Less: Net income allocated to unvested participating restricted stock	(1,111)	(568)
Net income available to common stockholders - basic	$ 30,532	$ 16,505
Net income available to common stockholders per share:
Basic (USD per share)	$ 1.76	$ 0.93
Diluted (USD per share)	$ 1.73	$ 0.92
Weighted average shares outstanding:
Basic (in shares)	17,343	17,703
Diluted (in shares)	17,690	17,845
Dividends declared per common share (USD per share)	$ 0.69	$ 0.63
Dividends paid per common share (USD per share)	$ 0.63	$ 0.97
Franchise revenues
Revenues:
Revenue from contract with customer, excluding assessed Tax	$ 168,926	$ 155,313
Royalties, franchise fees and other
Revenues:
Revenue from contract with customer, excluding assessed Tax	96,296	91,477
Advertising revenue
Revenues:
Revenue from contract with customer, excluding assessed Tax	72,630	63,836
Company restaurant sales
Revenues:
Revenue from contract with customer, excluding assessed Tax	35,735	0
Financing revenues
Revenues:
Revenue from contract with customer, excluding assessed Tax	1,810	2,009
Advertising fees
Revenues:
Revenue from contract with customer, excluding assessed Tax	72,630	63,836
Cost of revenues:
Franchise expenses:	72,630	63,836
Other franchise expenses
Cost of revenues:
Franchise expenses:	$ 7,673	$ 18,036

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Consolidated Statements of Stockholders' Deficit - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Retained Earnings (Accumulated Deficit)	Accumulated Other Comprehensive Loss	Treasury Stock
Common stock, shares, outstanding, beginning (in shares) at Dec. 31, 2017		17,993,000
Stockholders' equity balance, beginning of the period at Dec. 31, 2017	$ (215,540)	$ 250	$ 276,408	$ (69,940)	$ (105)	$ (422,153)
Treasury stock, shares, beginning (in shares) at Dec. 31, 2017						7,029,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	17,073			17,073
Other comprehensive gain (loss)	47				47
Purchase of Company common stock (in shares)		(139,000)				(139,000)
Purchase of Company common stock	(10,003)					$ (10,003)
Reissuance of treasury stock (in shares)		77,000				77,000
Reissuance of treasury stock	456		(2,495)			$ 2,951
Net issuance of shares for stock plans (in shares)		6,000
Net issuance of shares for stock plans	0
Repurchase of restricted shares for taxes (in shares)		(15,000)
Repurchase of restricted shares for taxes	(1,083)		(1,083)
Stock-based compensation	3,368		3,368
Dividends on common stock in excess of retained earnings	(11,204)		(11,204)
Common stock, shares, outstanding, ending (in shares) at Mar. 31, 2018		17,922,000
Stockholders' equity balance, ending of the period at Mar. 31, 2018	$ (216,886)	$ 250	264,994	(52,867)	(58)	$ (429,205)
Treasury stock, shares, ending (in shares) at Mar. 31, 2018						7,091,000
Common stock, shares, outstanding, beginning (in shares) at Dec. 31, 2018	17,644,267	17,644,000
Stockholders' equity balance, beginning of the period at Dec. 31, 2018	$ (202,273)	$ 250	237,726	10,414	(60)	$ (450,603)
Treasury stock, shares, beginning (in shares) at Dec. 31, 2018	7,340,631					7,341,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	$ 31,643			31,643
Other comprehensive gain (loss)	(1)				(1)
Purchase of Company common stock (in shares)		(151,000)				(151,000)
Purchase of Company common stock	$ (12,015)					$ (12,015)
Reissuance of treasury stock (in shares)	168,047	168,000				168,000
Reissuance of treasury stock	$ 6,768		(667)			$ 7,435
Net issuance of shares for stock plans (in shares)		9,000
Net issuance of shares for stock plans	0
Repurchase of restricted shares for taxes (in shares)		(19,000)
Repurchase of restricted shares for taxes	(1,817)		(1,817)
Stock-based compensation	4,107		4,107
Dividends on common stock	$ (12,203)		236	(12,439)
Common stock, shares, outstanding, ending (in shares) at Mar. 31, 2019	17,650,765	17,651,000
Stockholders' equity balance, ending of the period at Mar. 31, 2019	$ (190,821)	$ 250	$ 239,585	$ 24,588	$ (61)	$ (455,183)
Treasury stock, shares, ending (in shares) at Mar. 31, 2019	7,323,900					7,324,000

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities:
Net income	$ 31,643	$ 17,073
Adjustments to reconcile net income to cash flows provided by operating activities:
Depreciation and amortization	10,179	7,940
Non-cash stock-based compensation expense	4,107	3,368
Non-cash interest expense	1,118	864
Closure and impairment charges	194	2,594
Deferred income taxes	(1,149)	(1,182)
Loss (gain) on disposition of assets	109	(1,421)
Other	(3,976)	(6,199)
Changes in operating assets and liabilities:
Accounts receivable, net	(3,210)	(8,804)
Current income tax receivables and payables	(1,399)	5,529
Gift card receivables and payables	(890)	(2,269)
Other current assets	(2,570)	5,709
Accounts payable	1,826	65
Accrued employee compensation and benefits	(12,141)	(3,448)
Other current liabilities	5,088	(3,351)
Cash flows provided by operating activities	28,929	16,468
Cash flows from investing activities:
Principal receipts from notes, equipment contracts and other long-term receivables	5,260	4,930
Additions to property and equipment	(4,717)	(3,488)
Proceeds from sale of property and equipment	400	655
Additions to long-term receivables	(395)	(2,325)
Other	(100)	(27)
Cash flows provided by (used in) investing activities	448	(255)
Cash flows from financing activities:
Repayment of Variable Funding Notes	(25,000)	0
Repayment of long-term debt	0	(3,250)
Dividends paid on common stock	(11,153)	(17,453)
Repurchase of common stock	(10,802)	(10,003)
Principal payments on financing lease obligations	(3,466)	(4,536)
Proceeds from stock options exercised	6,768	456
Tax payments for restricted stock upon vesting	(1,817)	(1,083)
Cash flows used in financing activities	(45,470)	(35,869)
Net change in cash, cash equivalents and restricted cash	(16,093)	(19,656)
Cash, cash equivalents and restricted cash at beginning of period	200,379	163,146
Cash, cash equivalents and restricted cash at end of period	184,286	143,490
Supplemental disclosures:
Interest paid in cash	16,346	16,621
Income taxes paid in cash	$ 12,014	$ 934

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General

3 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

General

General

The accompanying unaudited consolidated financial statements of Dine Brands Global, Inc. (the “Company” or “Dine Brands Global”) 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 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 three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the twelve months ending December 31, 2019.

The consolidated balance sheet at December 31, 2018 has been derived from the audited consolidated financial statements at that date but does not include all of 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, 2018.

XML

Basis of Presentation

3 Months Ended

Mar. 31, 2019

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 calendar quarter. For convenience, the fiscal quarters of each year are referred to as ending on March 31, June 30, September 30 and December 31. The first fiscal quarter of 2019 began on December 31, 2018 and ended on March 31, 2019. The first fiscal quarter of 2018 began on January 1, 2018 and ended on April 1, 2018.

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, disclosures of contingent assets and liabilities, if any, at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates are made in the calculation and assessment of the following: impairment of goodwill, other intangible assets and tangible assets; income taxes; allowance for doubtful accounts and notes receivables; lease accounting estimates; contingencies; and stock-based compensation. On an ongoing basis, the Company evaluates its estimates based on historical experience, current conditions and various other assumptions that are believed to be reasonable under the circumstances. The Company adjusts such estimates and assumptions when facts and circumstances dictate. Actual results could differ from those estimates.

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Accounting Standards Adopted and Newly Issued Accounting Standards Not Yet Adopted

3 Months Ended

Mar. 31, 2019

Accounting Changes and Error Corrections [Abstract]

Accounting Standards Adopted and Newly Issued Accounting Standards Not Yet Adopted

Accounting Standards Adopted and Newly Issued Accounting Standards Not Yet Adopted

Accounting Standards Adopted

In February 2016, the Financial Accounting Standards Board (“FASB”) issued guidance with respect to the accounting for leases, as codified in Accounting Standards Topic 842 (“ASC 842”). The guidance is intended to improve financial reporting of leasing transactions by requiring entities that lease assets to recognize assets and liabilities for the rights and obligations created by leases, as well as requiring additional disclosures related to an entity's leasing activities. The Company adopted this change in accounting principle using the modified retrospective method as of the first day of the first fiscal quarter of 2019. Accordingly, financial information for periods prior to the date of initial application has not been adjusted. The Company has elected the package of practical expedients for adoption that permitted the Company not to reassess its prior conclusions regarding lease identification, lease classification and initial direct costs. The Company did not elect to use an allowable expedient that permitted the use of hindsight in performing evaluations of its leases.

Upon adoption of ASC 842, the Company recognized operating lease obligations of $453.0 million, which represents the present value of the remaining minimum lease payments, discounted using the Company's incremental borrowing rate. The Company recognized operating lease right-of-use assets of $395.6 million. The Company recognized an adjustment to retained earnings upon adoption of $5.0 million, net of tax of $1.7 million, primarily related to an impairment resulting from an unfavorable differential between lease payments to be made and sublease rentals to be received on certain leases. The remaining difference of $50.7 million between the recognized operating lease obligation and right-of-use assets relates to the derecognition of certain liabilities and assets that had been recorded in accordance with U.S. GAAP that had been applied prior to the adoption of ASC 842, primarily $43.3 million of accrued rent payments. Lease-related reserves for lease incentives, closed restaurants and unfavorable leaseholds were also derecognized.

The accounting for the Company's existing finance (capital) leases upon adoption of ASC 842 remained substantially unchanged. Adoption of ASC 842 had no significant impact on the Company's cash flows from operations or its results of operations and did not impact any covenant related to the Company's long-term debt. The Company implemented internal controls necessary to ensure compliance with the accounting and disclosure requirements of ASC 842.

Additional new accounting guidance became effective for the Company as of the beginning of fiscal 2019 that the Company reviewed and concluded was either not applicable to its operations or had no material effect on its consolidated financial statements in the current or future fiscal years.

Newly Issued Accounting Standards Not Yet Adopted

In June 2016, the FASB issued new guidance on the measurement of credit losses on financial instruments. The new guidance will replace the incurred loss methodology of recognizing credit losses on financial instruments that is currently required with a methodology that estimates the expected credit loss on financial instruments and reflects the net amount expected to be collected on the financial instrument. Application of the new guidance may result in the earlier recognition of credit losses as the new methodology will require entities to consider forward-looking information in addition to historical and current information used in assessing incurred losses. The Company will be required to adopt the new guidance on a modified retrospective basis beginning with its first fiscal quarter of 2020, with early adoption permitted in its first fiscal quarter of 2019. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures.

In August 2018, the FASB issued guidance designed to improve the effectiveness of disclosures by removing, modifying and adding disclosures related to fair value measurements. The Company will be required to adopt the new guidance beginning with its first fiscal quarter of 2020; early adoption in any interim period after issuance of the new guidance is permitted. The Company is currently assessing the impact this guidance will have on its consolidated financial statements.

In August 2018, the FASB issued new guidance on the accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with existing guidance for capitalizing implementation cost incurred to develop or obtain internal-use software. The guidance also provides presentation and disclosure requirements for such capitalized costs. The Company will be required to adopt the new guidance beginning with its first fiscal quarter of 2020; early adoption in any interim period after issuance of the new guidance is permitted. The Company is currently assessing the impact this guidance will have 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's operations or that no material effect is expected on the Company's financial statements because of future adoption.

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Revenue Disclosures (Notes)

3 Months Ended

Mar. 31, 2019

Revenue from Contract with Customer [Abstract]

Revenue Disclosures

Revenue Disclosures

Franchise revenue (which comprises most of the Company's revenues) and revenue from company-operated restaurants are recognized in accordance with ASC 606. Under ASC 606, revenue is recognized upon transfer of control of promised services or goods to customers in an amount that reflects the consideration the Company expects to receive for those services or goods.

Franchising Activities

The Company owns and franchises the Applebee’s and IHOP restaurant concepts. The franchise arrangement for both brands is documented in the form of a franchise agreement and, in most cases, a development agreement. The franchise arrangement between the Company as the franchisor and the franchisee as the customer requires the Company to perform various activities to support the brand that do not directly transfer goods and services to the franchisee, but instead represent a single performance obligation, which is the transfer of the franchise license. The intellectual property subject to the franchise license is symbolic intellectual property as it does not have significant standalone functionality, and substantially all the utility is derived from its association with the Company’s past or ongoing activities. The nature of the Company’s promise in granting the franchise license is to provide the franchisee with access to the brand’s symbolic intellectual property over the term of the license. The services provided by the Company are highly interrelated with the franchise license and as such are considered to represent a single performance obligation.

The transaction price in a standard franchise arrangement for both brands primarily consists of (a) initial franchise/development fees; (b) continuing franchise fees (royalties); and (c) advertising fees. Since the Company considers the licensing of the franchising right to be a single performance obligation, no allocation of the transaction price is required. Additionally, all domestic IHOP franchise agreements require franchisees to purchase proprietary pancake and waffle dry mix from the Company.

The Company recognizes the primary components of the transaction price as follows:

• Franchise and development fees are recognized as revenue ratably on a straight-line basis over the term of the franchise agreement commencing with the restaurant opening date. As these fees are typically received in cash at or near the beginning of the franchise term, the cash received is initially recorded as a contract liability until recognized as revenue over time;

• The Company is entitled to royalties and advertising fees based on a percentage of the franchisee's gross sales as defined in the franchise agreement. Royalty and advertising revenue are recognized when the franchisee's reported sales occur. Depending on timing within a fiscal period, the recognition of revenue results in either what is considered a contract asset (unbilled receivable) or, once billed, accounts receivable, on the balance sheet.

• Revenue from the sales of proprietary pancake and waffle dry mix is recognized in the period in which distributors ship the franchisee's order; recognition of revenue results in accounts receivable on the balance sheet.

Company Restaurant Revenue

Sales by company-operated restaurants are recognized when food and beverage items are sold. Company restaurant sales are reported net of sales taxes collected from guests that are remitted to the appropriate taxing authorities.

In determining the amount and timing of revenue from contracts with customers, the Company exercises significant judgment with respect to collectibility of the amount; however, the timing of recognition does not require significant judgments as it is based on either the term of the franchise agreement, the month of reported sales by the franchisee or the date of product shipment, none of which require estimation. The Company does not incur a significant amount of contract acquisition costs in conducting its franchising activities. The Company believes its franchising arrangements do not contain a significant financing component.

The following table disaggregates franchise revenue by major type for the three months ended March 31, 2019 and 2018:

	Three Months Ended
	March 31,
	2019		2018
	(In thousands)
Franchise Revenue:
Royalties	$	78,730	$	75,097
Advertising fees	72,630		63,836
Pancake and waffle dry mix sales and other	14,431		13,097
Franchise and development fees	3,135		3,283
Total franchise revenue	$	168,926	$	155,313

Receivables from franchisees as of March 31, 2019 and December 31, 2018 were $67.1 million (net of allowance of $2.1 million) and $62.6 million (net of allowance of $4.6 million), respectively, and were included in receivables, net in the Consolidated Balance Sheets.

Changes in the Company's contract liability for deferred franchise and development fees during the three months ended March 31, 2019 are as follows:

	Deferred Franchise Revenue (short- and long-term)
	(In thousands)
Balance at December 31, 2018	$	74,695
Recognized as revenue during the three months ended March 31, 2019	(2,948		)
Fees deferred during the three months ended March 31, 2019	1,101
Balance at March 31, 2019	$	72,848

The balance of deferred revenue as of March 31, 2019 is expected to be recognized as follows:

	(In thousands)
Remainder of 2019	$	6,633
2020	10,066
2021	7,780
2022	7,251
2023	6,675
2024	5,987
Thereafter	28,456
Total	$	72,848

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Lease Disclosures (Notes)

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Lease Disclosures

Lease Disclosures

The Company engages in leasing activity as both a lessee and a lessor. The majority of the Company's lease portfolio originated when the Company was actively involved in the development and financing of IHOP restaurants prior to the franchising of the restaurant to the franchisee. This activity included the Company's leasing or purchase of the site on which the restaurant was located and subsequently leasing/subleasing the site to the franchisee. With a few exceptions, the Company ended this practice in 2003 and the Company's current lease activity is predominantly comprised of renewals of existing lease arrangements and exercises of options on existing lease arrangements.

The Company currently leases from third parties the real property on which approximately 620 IHOP franchisee-operated restaurants are located; the Company (as lessor) subleases the property to the franchisees that operate those restaurants. The Company also leases property it owns to the franchisees that operate approximately 60 IHOP restaurants and one Applebee's restaurant. The Company leases from third parties the real property on which 69 Applebee's company-operated restaurants are located. The Company also leases office space for its principal corporate office in Glendale, California and a restaurant support center in Kansas City, Missouri. The Company does not have a significant amount of non-real estate leases.

The Company's existing leases related to IHOP restaurants generally provided for an initial term of 20 to 25 years with most having one or more five-year renewal options. Option periods were not included in determining liabilities and right-of-use assets related to operating leases. Approximately 260 of the Company's leases contain provisions requiring additional rent payments to the Company (as lessor) based on a percentage of restaurant sales. Approximately 220 of the Company's leases contain provisions requiring additional rent payments by the Company (as lessee) based on a percentage of restaurant sales.

The individual lease agreements do not provide information to determine the implicit rate in the agreements. The Company made significant judgments in determining the incremental borrowing rates that were used in calculating operating lease liabilities as of the adoption date. Due to the large number of leases, the Company applied a portfolio approach by grouping the leases based on the original lease term. The Company estimated the rate for each grouping primarily by reference to yield rates on debt issuances by companies of a similar credit rating as the Company, U.S. Treasury rates as of the adoption date and adjustments for differences in years to maturity.

The Company's lease cost for the three months ended March 31, 2019 was as follows:

Finance lease cost:	(In millions)
Amortization of right-of-use assets	$	1.3
Interest on lease liabilities	2.1
Operating lease cost	26.4
Variable lease cost	0.7
Short-term lease cost	0.0
Sublease income	(28.1		)
Lease cost	$	2.4

Future minimum lease payments under noncancelable leases as lessee as of March 31, 2019 were as follows:

	Finance Leases			Operating Leases
	(In millions)
2019 (remaining nine months)	$	15.8		$	69.0
2020	20.1			93.0
2021	16.5			76.0
2022	14.7			68.0
2023	11.6			55.6
Thereafter	65.0			212.7
Total minimum lease payments	143.7			574.3
Less: interest/imputed interest	(43.1		)	(120.6		)
Total obligations	100.6			453.7
Less: current portion	(13.0		)	(67.3		)
Long-term lease obligations	$	87.6		$	386.4

The weighted average remaining lease term as of March 31, 2019 was 8.6 years for finance leases and 8.1 years for operating leases. The weighted average discount rate as of March 31, 2019 was 10.4% for finance leases and 5.8% for operating leases.

During the three months ended March 31, 2019, the Company made the following payments for leases:

	(In millions)
Principal payments on finance lease obligations	$	3.5
Interest payments on finance lease obligations	$	2.0
Payments on operating leases	$	22.9
Variable lease payments	$	0.9

The Company's income from operating leases for the three months ended March 31, 2019 was as follows:

	(In millions)
Minimum lease payments	$	25.7
Variable lease income	3.2
Total operating lease income	$	28.9

Future minimum payments to be received as lessor under noncancelable operating leases as of March 31, 2019 were as follows:

	(In millions)
2019 (remaining nine months)	$	79.5
2020	107.1
2021	101.2
2022	98.1
2023	93.7
Thereafter	288.3
Total minimum rents receivable	767.9

The Company's income from direct financing leases for the three months ended March 31, 2019 was as follows:

	(In millions)
Interest income	$	1.4
Variable lease income	0.4
Total operating lease income	$	1.8

Future minimum payments to be received as lessor under noncancelable direct financing leases as of March 31, 2019 were as follows:

	(In millions)
2019 (remaining nine months)	$	12.1
2020	14.8
2021	11.7
2022	8.4
2023	3.6
Thereafter	3.7
Total minimum rents receivable	54.3
Less: unearned income	(11.4		)
Total net investment in direct financing leases	42.9
Less: current portion	(11.2		)
Long-term investment in direct financing leases	$	31.7

Lease Disclosures

Lease Disclosures

The Company engages in leasing activity as both a lessee and a lessor. The majority of the Company's lease portfolio originated when the Company was actively involved in the development and financing of IHOP restaurants prior to the franchising of the restaurant to the franchisee. This activity included the Company's leasing or purchase of the site on which the restaurant was located and subsequently leasing/subleasing the site to the franchisee. With a few exceptions, the Company ended this practice in 2003 and the Company's current lease activity is predominantly comprised of renewals of existing lease arrangements and exercises of options on existing lease arrangements.

The Company currently leases from third parties the real property on which approximately 620 IHOP franchisee-operated restaurants are located; the Company (as lessor) subleases the property to the franchisees that operate those restaurants. The Company also leases property it owns to the franchisees that operate approximately 60 IHOP restaurants and one Applebee's restaurant. The Company leases from third parties the real property on which 69 Applebee's company-operated restaurants are located. The Company also leases office space for its principal corporate office in Glendale, California and a restaurant support center in Kansas City, Missouri. The Company does not have a significant amount of non-real estate leases.

The Company's existing leases related to IHOP restaurants generally provided for an initial term of 20 to 25 years with most having one or more five-year renewal options. Option periods were not included in determining liabilities and right-of-use assets related to operating leases. Approximately 260 of the Company's leases contain provisions requiring additional rent payments to the Company (as lessor) based on a percentage of restaurant sales. Approximately 220 of the Company's leases contain provisions requiring additional rent payments by the Company (as lessee) based on a percentage of restaurant sales.

The individual lease agreements do not provide information to determine the implicit rate in the agreements. The Company made significant judgments in determining the incremental borrowing rates that were used in calculating operating lease liabilities as of the adoption date. Due to the large number of leases, the Company applied a portfolio approach by grouping the leases based on the original lease term. The Company estimated the rate for each grouping primarily by reference to yield rates on debt issuances by companies of a similar credit rating as the Company, U.S. Treasury rates as of the adoption date and adjustments for differences in years to maturity.

The Company's lease cost for the three months ended March 31, 2019 was as follows:

Finance lease cost:	(In millions)
Amortization of right-of-use assets	$	1.3
Interest on lease liabilities	2.1
Operating lease cost	26.4
Variable lease cost	0.7
Short-term lease cost	0.0
Sublease income	(28.1		)
Lease cost	$	2.4

Future minimum lease payments under noncancelable leases as lessee as of March 31, 2019 were as follows:

	Finance Leases			Operating Leases
	(In millions)
2019 (remaining nine months)	$	15.8		$	69.0
2020	20.1			93.0
2021	16.5			76.0
2022	14.7			68.0
2023	11.6			55.6
Thereafter	65.0			212.7
Total minimum lease payments	143.7			574.3
Less: interest/imputed interest	(43.1		)	(120.6		)
Total obligations	100.6			453.7
Less: current portion	(13.0		)	(67.3		)
Long-term lease obligations	$	87.6		$	386.4

The weighted average remaining lease term as of March 31, 2019 was 8.6 years for finance leases and 8.1 years for operating leases. The weighted average discount rate as of March 31, 2019 was 10.4% for finance leases and 5.8% for operating leases.

During the three months ended March 31, 2019, the Company made the following payments for leases:

	(In millions)
Principal payments on finance lease obligations	$	3.5
Interest payments on finance lease obligations	$	2.0
Payments on operating leases	$	22.9
Variable lease payments	$	0.9

The Company's income from operating leases for the three months ended March 31, 2019 was as follows:

	(In millions)
Minimum lease payments	$	25.7
Variable lease income	3.2
Total operating lease income	$	28.9

Future minimum payments to be received as lessor under noncancelable operating leases as of March 31, 2019 were as follows:

	(In millions)
2019 (remaining nine months)	$	79.5
2020	107.1
2021	101.2
2022	98.1
2023	93.7
Thereafter	288.3
Total minimum rents receivable	767.9

The Company's income from direct financing leases for the three months ended March 31, 2019 was as follows:

	(In millions)
Interest income	$	1.4
Variable lease income	0.4
Total operating lease income	$	1.8

Future minimum payments to be received as lessor under noncancelable direct financing leases as of March 31, 2019 were as follows:

	(In millions)
2019 (remaining nine months)	$	12.1
2020	14.8
2021	11.7
2022	8.4
2023	3.6
Thereafter	3.7
Total minimum rents receivable	54.3
Less: unearned income	(11.4		)
Total net investment in direct financing leases	42.9
Less: current portion	(11.2		)
Long-term investment in direct financing leases	$	31.7

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Long-Term Debt

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

At March 31, 2019 and December 31, 2018, long-term debt consisted of the following:

	March 31, 2019			December 31, 2018
	(In millions)
Series 2014-1 4.277% Fixed Rate Senior Secured Notes, Class A-2	$	1,283.8		$	1,283.8
Series 2018-1 Variable Funding Senior Notes Class A-1, variable interest rate of 4.93% at December 31, 2018	—			25.0
Class A-2 Note debt issuance costs	(8.9		)	(9.7		)
Long-term debt, net of debt issuance costs	1,274.9			1,299.1
Current portion of long-term debt	—			(25.0		)
Long-term debt	$	1,274.9		$	1,274.1

For a description of the Series 2014-1 4.277% Fixed Rate Senior Secured Notes, Class A-2 and the Series 2018-1 Variable Funding Notes Class A-1, 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, 2018.

During the three months ended March 31, 2019, the Company repaid $25.0 million of Variable Funding Notes, representing the amount outstanding at December 31, 2018. The Company did not draw on the Variable Funding Notes during the three months ended March 31, 2019. The maximum amount of Variable Funding Notes outstanding during the three months ended March 31, 2019 was $25.0 million and the weighted average interest rate on the Variable Funding Notes for the period outstanding was 4.88%.

At March 31, 2019, $2.2 million was pledged against the Variable Funding Notes for outstanding letters of credit, leaving $222.8 million of 2018 Variable Funding Notes available for borrowing. The letters of credit are used primarily to satisfy insurance-related collateral requirements.

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Stockholders' Deficit

3 Months Ended

Mar. 31, 2019

Equity [Abstract]

Stockholders' Deficit

Stockholders' Deficit

Dividends

During the three months ended March 31, 2019, the Company paid dividends on common stock of $11.2 million, representing a cash dividend of $0.63 per share declared in the fourth quarter of 2018. On February 20, 2019, the Company's Board of Directors declared a first quarter 2019 cash dividend of $0.69 per share of common stock. This dividend was paid on April 5, 2019 to stockholders of record at the close of business on March 20, 2019. The Company reported dividends payable of $12.5 million at March 31, 2019.

Dividends declared and paid per share for the three months ended March 31, 2019 and 2018 were as follows:

	Three months ended March 31,
	2019		2018
Dividends declared per common share	$	0.69	$	0.63
Dividends paid per common share	$	0.63	$	0.97

Stock Repurchase Program

In February 2019, the Company’s Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to $200 million of the Company’s common stock (“2019 Repurchase Program”) on an opportunistic basis from time to time in the open market or in privately negotiated transactions based on business, market, applicable legal requirements and other considerations.  The 2019 Repurchase Program, as approved by the Board of Directors, does not require the repurchase of a specific number of shares and can be terminated at any time. 

In October 2015, the Company's Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to $150 million of its common stock (the “2015 Repurchase Program”) on an opportunistic basis from time to time in open market transactions and in privately negotiated transactions based on business, market, applicable legal requirements and other considerations. The 2015 Repurchase Program, as approved by the Board of Directors, did not require the repurchase of a specific number of shares and could be terminated at any time. In connection with the approval of the 2019 Repurchase Program, the Board of Directors terminated the 2015 Repurchase Program.

A summary of shares repurchased under the 2019 Repurchase Program and the 2015 Repurchase Program, during the three months ended March 31, 2019 and cumulatively, is as follows:

	Shares	Cost of shares
		(In millions)
2019 Repurchase Program:
Repurchased during the three months ended March 31, 2019	40,817	$	3.6
Cumulative (life-of-program) repurchases	40,817	$	3.6
Remaining dollar value of shares that may be repurchased	n/a	$	196.4
2015 Repurchase Program:
Repurchased during the three months ended March 31, 2019	110,499	$	8.4
Cumulative (life-of-program) repurchases	1,589,995	$	126.2
Remaining dollar value of shares that may be repurchased	n/a	n/a

Treasury Stock

Repurchases of the Company's common stock are included in treasury stock at the cost of shares repurchased plus any transaction costs. Treasury stock may be re-issued when stock options are exercised, when restricted stock awards are granted and when restricted stock units settle in stock upon vesting. The cost of treasury stock re-issued is determined using the first-in, first-out (“FIFO”) method. During the three months ended March 31, 2019, the Company re-issued 168,047 shares of treasury stock at a total FIFO cost of $7.4 million.

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Income Taxes

3 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company's effective tax rate was 23.1% for the three months ended March 31, 2019 as compared to 24.8% for the three months ended March 31, 2018. The effective tax rate of 23.1% for the three months ended March 31, 2019 was lower than the rate of the prior period primarily due to excess tax benefits on stock-based compensation.            

The total gross unrecognized tax benefit as of March 31, 2019 and December 31, 2018 was $5.2 million and $5.2 million, respectively, excluding interest, penalties and related tax benefits. The Company estimates the unrecognized tax benefit may decrease over the upcoming 12 months by an amount up to $0.9 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 as to when cash settlement with a taxing authority will occur.

As of March 31, 2019, accrued interest was $1.3 million and accrued penalties were less than $0.1 million, excluding any related income tax benefits. As of December 31, 2018, accrued interest was $1.1 million and accrued penalties were less than $0.1 million, excluding any related income tax benefits. The Company recognizes interest accrued related to unrecognized tax benefits and penalties as a component of its income tax provision recognized in its Consolidated Statements of Comprehensive Income.

The Company files federal income tax returns and the Company or one of its subsidiaries files 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 2011. The Internal Revenue Service commenced examination of the Company’s U.S. federal income tax return for the tax years 2011 to 2013 in fiscal year 2016. The examination is anticipated to conclude during fiscal year 2019. The Company believes that adequate reserves have been provided relating to all matters contained in the tax periods open to examination.

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2019

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

Stock-Based Compensation

Stock-Based Compensation

The following table summarizes the components of stock-based compensation expense included in general and administrative expenses in the Consolidated Statements of Comprehensive Income:

	Three months ended March 31,
	2019			2018
	(In millions)
Total stock-based compensation expense:
Equity classified awards expense	$	4.1		$	3.4
Liability classified awards expense	1.0			0.5
Total pre-tax stock-based compensation expense	5.1			3.9
Book income tax benefit	(1.3		)	(1.0		)
Total stock-based compensation expense, net of tax	$	3.8		$	2.9

As of March 31, 2019, total unrecognized compensation expense of $24.1 million related to restricted stock and restricted stock units and $5.8 million related to stock options are expected to be recognized over a weighted average period of 1.7 years for restricted stock and restricted stock units and 1.8 years for stock options.

Fair Value Assumptions

The Company granted 132,832 stock options during the three months ended March 31, 2019 for which the fair value was estimated using a Black-Scholes option pricing model. The following summarizes the assumptions used in the Black-Scholes model:

Risk-free interest rate	2.5	%
Weighted average historical volatility	30.3	%
Dividend yield	2.8	%
Expected years until exercise	4.7
Weighted average fair value of options granted	$21.93

Equity Classified Awards - Stock Options

Stock option balances at March 31, 2019, and activity for the three months ended March 31, 2019 were as follows:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value (in Millions)
Outstanding at December 31, 2018	1,439,708		$	63.21
Granted	132,832		98.97
Exercised	(116,590	)	58.05
Outstanding at March 31, 2019	1,455,950		66.88		6.8	$	38.2
Vested at March 31, 2019 and Expected to Vest	1,311,896		67.76		6.6	$	33.3
Exercisable at March 31, 2019	682,494		$	75.92	4.6	$	12.1

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the closing stock price of the Company’s common stock on the last trading day of the first quarter of 2019 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 March 31, 2019. 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 March 31, 2019, and activity related to restricted stock and restricted stock units for the three months ended March 31, 2019 were as follows:

	Restricted Stock		Weighted Average Grant Date Fair Value		Stock-Settled Restricted Stock Units		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2018	267,242		$	63.97	374,529		$	31.05
Granted	51,457		98.58		13,464		98.97
Released	(48,022	)	79.60		(12,293	)	90.34
Forfeited	(2,562	)	48.22		—		—
Outstanding at March 31, 2019	268,115		$	69.96	375,700		$	30.95

Liability Classified Awards - Cash-settled Restricted Stock Units

The Company has granted cash-settled restricted stock units to certain employees. These instruments are recorded as liabilities at fair value as of the respective period end.

	Cash-Settled Restricted Stock Units		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2018	53,766		$	94.77
Granted	19,736		91.05
Released	(317	)	82.16
Forfeited	(3,622	)	98.96
Outstanding at March 31, 2019	69,563		$	93.58

For the three months ended March 31, 2019, and 2018, $0.6 million and $0.1 million, respectively, was included as stock-based compensation expense related to cash-settled restricted stock units.

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 multipliers from 0% to 200% of the target award based on (i) the total stockholder return of Dine Brands Global common stock compared to the total stockholder returns of a peer group of companies and (ii) the percentage increase in the Company's adjusted earnings per share (as defined). The awards are considered stock-based compensation and are classified as liabilities measured at fair value as of the respective period end. For the three months ended March 31, 2019 and 2018, $0.4 million and $0.4 million, respectively were included in total stock-based compensation expense related to LTIP awards. At March 31, 2019 and December 31, 2018, liabilities of $1.7 million and $2.4 million, respectively, related to LTIP awards were included as part of accrued employee compensation and benefits in the Consolidated Balance Sheets.

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Segments

3 Months Ended

Mar. 31, 2019

Segment Reporting [Abstract]

Segments

Segments

The Company identifies its reporting segments based on the organizational units used by management to monitor performance and make operating decisions. The Company currently has five operating segments: Applebee's franchise operations, Applebee's company-operated restaurant operations, IHOP franchise operations, rental operations and financing operations. The Company has four reportable segments: franchise operations, (an aggregation of Applebee's and IHOP franchise operations), company-operated restaurant operations, rental operations and financing operations. The Company considers these to be its reportable segments, regardless of whether any segment exceeds 10% of consolidated revenues, income before income tax provision or total assets.

As of March 31, 2019, the franchise operations segment consisted of (i) 1,761 restaurants operated by Applebee’s franchisees in the United States, two U.S. territories and 13 countries outside the United States and (ii) 1,822 restaurants operated by IHOP franchisees and area licensees in the United States, three U.S. territories and 12 countries outside the United States. Franchise operations revenue consists primarily of franchise royalty revenues, franchise advertising revenue, sales of proprietary products to franchisees (primarily pancake and waffle dry mixes for the IHOP restaurants), and franchise fees.  Franchise operations expenses include advertising expenses, the cost of IHOP proprietary products, bad debt expense, franchisor contributions to marketing funds, pre-opening training expenses and other franchise-related costs.

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 is as follows:

		Three months ended March 31,
		2019			2018
	(In millions)
Revenues from external customers:
Franchise operations		$	168.9		$	155.3
Rental operations		30.7			30.9
Company restaurants		35.8			—
Financing operations		1.8			2.0
Total		$	237.2		$	188.2
Interest expense:
Rental operations		$	2.5		$	2.4
Company restaurants		0.5			—
Corporate		15.4			15.2
Total		$	18.4		$	17.6
Depreciation and amortization:
Franchise operations		$	2.6		$	2.7
Rental operations		3.5			$	2.9
Company restaurants		1.3			—
Corporate		2.8			2.3
Total		$	10.2		$	7.9
Gross profit, by segment:
Franchise operations		$	88.6		$	73.4
Rental operations		8.1			8.2
Company restaurants		4.2			—
Financing operations		1.7			1.9
Total gross profit		102.6			83.5
Corporate and unallocated expenses, net		(61.5		)	(60.8		)
Income before income tax provision		$	41.1		$	22.7

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Net Income per Share

3 Months Ended

Mar. 31, 2019

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 is as follows:

	Three months ended March 31,
	2019			2018
	(In thousands, except per share data)
Numerator for basic and diluted income per common share:
Net income	$	31,643		$	17,073
Less: Net income allocated to unvested participating restricted stock	(1,111		)	(568		)
Net income available to common stockholders - basic	30,532			16,505
Effect of unvested participating restricted stock in two-class calculation	12			2
Net income available to common stockholders - diluted	$	30,544		$	16,507
Denominator:
Weighted average outstanding shares of common stock - basic	17,343			17,703
Dilutive effect of stock options	347			142
Weighted average outstanding shares of common stock - diluted	17,690			17,845
Net income per common share:
Basic	$	1.76		$	0.93
Diluted	$	1.73		$	0.92

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Fair Value Measurements

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The Company does not have a material amount of financial assets or liabilities that are required under U.S. GAAP to be measured on a recurring basis at fair value. The Company is not a party to any derivative financial instruments. The Company does not have a material amount of non-financial assets or non-financial liabilities that are required under U.S. GAAP to be measured at fair value on a recurring basis. The Company has not elected to 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 and accounts payable approximate their carrying amounts due to their short duration.

The fair values of the Company's Series 2014-1 Class A-2 Notes (the “Class A-2 Notes”) at March 31, 2019 and December 31, 2018 were as follows:

	March 31, 2019		December 31, 2018
	(In millions)
Carrying amount of Class A-2 Notes	$	1,283.8	$	1,283.8
Fair Value of Class A-2 Notes	$	1,289.0	$	1,280.9

 The fair values were determined based on Level 2 inputs, including information gathered from brokers who trade in the Company’s Class A-2 Notes and information on notes that are similar to those of the Company.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2019

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 to franchisees, the Company has, in certain cases, guaranteed or has potential continuing liability for lease payments totaling $280.0 million as of March 31, 2019. 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 2019 through 2048. Excluding unexercised option periods, the Company's potential liability for future payments under these leases is $42.1 million. 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.

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Restricted Cash

3 Months Ended

Mar. 31, 2019

Cash and Cash Equivalents [Abstract]

Restricted Cash

Restricted Cash

Current restricted cash of $36.7 million at March 31, 2019 primarily consisted of $33.7 million of funds required to be held in trust in connection with the Company's securitized debt and $2.9 million of funds from Applebee's franchisees pursuant to franchise agreements, usage of which was restricted to advertising activities. Current restricted cash of $48.5 million at December 31, 2018 primarily consisted of $42.3 million of funds required to be held in trust in connection with the Company's securitized debt and $6.2 million of funds from Applebee's franchisees pursuant to franchise agreements, usage of which was restricted to advertising activities.

Non-current restricted cash of $14.7 million at March 31, 2019 and December 31, 2018 represents interest reserves required to be set aside for the duration of the Company's securitized debt.

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Acquisition of Business

3 Months Ended

Mar. 31, 2019

Business Combinations [Abstract]

Acquisition of Business

Acquisition of Business

In December 2018, the Company acquired 69 Applebee’s restaurants in North Carolina and South Carolina from a former Applebee's franchisee for a total purchase price of $21.6 million. The Company entered into the transaction to resolve certain franchisee financial health issues in what the Company believes was the most expedient and favorable manner for the Company and the Applebee's system.

During the three months ended March 31, 2019, the Company completed the calculation of deferred income taxes related to the transaction and adjusted the preliminary purchase price as follows:

	Preliminary Allocation			Adjustments			Adjusted Allocation
	(In millions)
Reacquired franchise rights	$	11.6		$	—		$	11.6
Equipment and fixtures	10.0			—			10.0
Inventory	1.4			—			1.4
Deferred income taxes	—			1.5			1.5
Total identifiable assets acquired	23.0			1.5			24.5
Above-market leaseholds, net	(6.5		)	—			(6.5		)
Other liabilities	(1.0		)	—			(1.0		)
Net identifiable assets acquired	15.5			1.5			17.0
Goodwill	6.1			(1.5		)	4.6
Consideration transferred	$	21.6		$	—		$	21.6

In conjunction with the acquisition, the Company assumed capital (finance) lease obligations and related property under capital (finance) leases of $9.1 million. The Company also entered into new capital (finance) leases totaling $28.1 million of property under capital (finance) leases and capital (finance) lease obligations.

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Accounting Standards Adopted and Newly Issued Accounting Standards Not Yet Adopted (Policies)

3 Months Ended

Mar. 31, 2019

Accounting Changes and Error Corrections [Abstract]

Fiscal Period

The Company’s fiscal quarters end on the Sunday closest to the last day of each calendar quarter. For convenience, the fiscal quarters of each year are referred to as ending on March 31, June 30, September 30 and December 31. The first fiscal quarter of 2019 began on December 31, 2018 and ended on March 31, 2019. The first fiscal quarter of 2018 began on January 1, 2018 and ended on April 1, 2018.

Accounting Standards Adopted in the Current Fiscal Year and Not Yet Adopted

Accounting Standards Adopted

In February 2016, the Financial Accounting Standards Board (“FASB”) issued guidance with respect to the accounting for leases, as codified in Accounting Standards Topic 842 (“ASC 842”). The guidance is intended to improve financial reporting of leasing transactions by requiring entities that lease assets to recognize assets and liabilities for the rights and obligations created by leases, as well as requiring additional disclosures related to an entity's leasing activities. The Company adopted this change in accounting principle using the modified retrospective method as of the first day of the first fiscal quarter of 2019. Accordingly, financial information for periods prior to the date of initial application has not been adjusted. The Company has elected the package of practical expedients for adoption that permitted the Company not to reassess its prior conclusions regarding lease identification, lease classification and initial direct costs. The Company did not elect to use an allowable expedient that permitted the use of hindsight in performing evaluations of its leases.

Upon adoption of ASC 842, the Company recognized operating lease obligations of $453.0 million, which represents the present value of the remaining minimum lease payments, discounted using the Company's incremental borrowing rate. The Company recognized operating lease right-of-use assets of $395.6 million. The Company recognized an adjustment to retained earnings upon adoption of $5.0 million, net of tax of $1.7 million, primarily related to an impairment resulting from an unfavorable differential between lease payments to be made and sublease rentals to be received on certain leases. The remaining difference of $50.7 million between the recognized operating lease obligation and right-of-use assets relates to the derecognition of certain liabilities and assets that had been recorded in accordance with U.S. GAAP that had been applied prior to the adoption of ASC 842, primarily $43.3 million of accrued rent payments. Lease-related reserves for lease incentives, closed restaurants and unfavorable leaseholds were also derecognized.

The accounting for the Company's existing finance (capital) leases upon adoption of ASC 842 remained substantially unchanged. Adoption of ASC 842 had no significant impact on the Company's cash flows from operations or its results of operations and did not impact any covenant related to the Company's long-term debt. The Company implemented internal controls necessary to ensure compliance with the accounting and disclosure requirements of ASC 842.

Additional new accounting guidance became effective for the Company as of the beginning of fiscal 2019 that the Company reviewed and concluded was either not applicable to its operations or had no material effect on its consolidated financial statements in the current or future fiscal years.

Newly Issued Accounting Standards Not Yet Adopted

In June 2016, the FASB issued new guidance on the measurement of credit losses on financial instruments. The new guidance will replace the incurred loss methodology of recognizing credit losses on financial instruments that is currently required with a methodology that estimates the expected credit loss on financial instruments and reflects the net amount expected to be collected on the financial instrument. Application of the new guidance may result in the earlier recognition of credit losses as the new methodology will require entities to consider forward-looking information in addition to historical and current information used in assessing incurred losses. The Company will be required to adopt the new guidance on a modified retrospective basis beginning with its first fiscal quarter of 2020, with early adoption permitted in its first fiscal quarter of 2019. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures.

In August 2018, the FASB issued guidance designed to improve the effectiveness of disclosures by removing, modifying and adding disclosures related to fair value measurements. The Company will be required to adopt the new guidance beginning with its first fiscal quarter of 2020; early adoption in any interim period after issuance of the new guidance is permitted. The Company is currently assessing the impact this guidance will have on its consolidated financial statements.

In August 2018, the FASB issued new guidance on the accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with existing guidance for capitalizing implementation cost incurred to develop or obtain internal-use software. The guidance also provides presentation and disclosure requirements for such capitalized costs. The Company will be required to adopt the new guidance beginning with its first fiscal quarter of 2020; early adoption in any interim period after issuance of the new guidance is permitted. The Company is currently assessing the impact this guidance will have 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's operations or that no material effect is expected on the Company's financial statements because of future adoption.

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Revenue Disclosures (Tables)

3 Months Ended

Mar. 31, 2019

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

The following table disaggregates franchise revenue by major type for the three months ended March 31, 2019 and 2018:

	Three Months Ended
	March 31,
	2019		2018
	(In thousands)
Franchise Revenue:
Royalties	$	78,730	$	75,097
Advertising fees	72,630		63,836
Pancake and waffle dry mix sales and other	14,431		13,097
Franchise and development fees	3,135		3,283
Total franchise revenue	$	168,926	$	155,313

Schedule of Changes in Deferred Revenue

Changes in the Company's contract liability for deferred franchise and development fees during the three months ended March 31, 2019 are as follows:

	Deferred Franchise Revenue (short- and long-term)
	(In thousands)
Balance at December 31, 2018	$	74,695
Recognized as revenue during the three months ended March 31, 2019	(2,948		)
Fees deferred during the three months ended March 31, 2019	1,101
Balance at March 31, 2019	$	72,848

Schedule of Remaining Performance Obligations

The balance of deferred revenue as of March 31, 2019 is expected to be recognized as follows:

	(In thousands)
Remainder of 2019	$	6,633
2020	10,066
2021	7,780
2022	7,251
2023	6,675
2024	5,987
Thereafter	28,456
Total	$	72,848

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Lease Disclosures (Tables)

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Schedule of Lease Cost

The Company's lease cost for the three months ended March 31, 2019 was as follows:

Finance lease cost:	(In millions)
Amortization of right-of-use assets	$	1.3
Interest on lease liabilities	2.1
Operating lease cost	26.4
Variable lease cost	0.7
Short-term lease cost	0.0
Sublease income	(28.1		)
Lease cost	$	2.4

Schedule of Operating Lease, Liability, Maturity

Future minimum lease payments under noncancelable leases as lessee as of March 31, 2019 were as follows:

	Finance Leases			Operating Leases
	(In millions)
2019 (remaining nine months)	$	15.8		$	69.0
2020	20.1			93.0
2021	16.5			76.0
2022	14.7			68.0
2023	11.6			55.6
Thereafter	65.0			212.7
Total minimum lease payments	143.7			574.3
Less: interest/imputed interest	(43.1		)	(120.6		)
Total obligations	100.6			453.7
Less: current portion	(13.0		)	(67.3		)
Long-term lease obligations	$	87.6		$	386.4

Schedule of Finance Lease, Liability, Maturity

Future minimum lease payments under noncancelable leases as lessee as of March 31, 2019 were as follows:

	Finance Leases			Operating Leases
	(In millions)
2019 (remaining nine months)	$	15.8		$	69.0
2020	20.1			93.0
2021	16.5			76.0
2022	14.7			68.0
2023	11.6			55.6
Thereafter	65.0			212.7
Total minimum lease payments	143.7			574.3
Less: interest/imputed interest	(43.1		)	(120.6		)
Total obligations	100.6			453.7
Less: current portion	(13.0		)	(67.3		)
Long-term lease obligations	$	87.6		$	386.4

Leases, Supplemental Cash Flow Information

During the three months ended March 31, 2019, the Company made the following payments for leases:

	(In millions)
Principal payments on finance lease obligations	$	3.5
Interest payments on finance lease obligations	$	2.0
Payments on operating leases	$	22.9
Variable lease payments	$	0.9

Schedule of Operating Lease, Lease Income

The Company's income from operating leases for the three months ended March 31, 2019 was as follows:

	(In millions)
Minimum lease payments	$	25.7
Variable lease income	3.2
Total operating lease income	$	28.9

Schedule of Lessor, Operating Lease, Payments to be Received, Maturity

Future minimum payments to be received as lessor under noncancelable operating leases as of March 31, 2019 were as follows:

	(In millions)
2019 (remaining nine months)	$	79.5
2020	107.1
2021	101.2
2022	98.1
2023	93.7
Thereafter	288.3
Total minimum rents receivable	767.9

Schedule of Direct Financing Lease, Lease Income

The Company's income from direct financing leases for the three months ended March 31, 2019 was as follows:

	(In millions)
Interest income	$	1.4
Variable lease income	0.4
Total operating lease income	$	1.8

Schedule of Lessor, Direct Financing Leases, Maturity

Future minimum payments to be received as lessor under noncancelable direct financing leases as of March 31, 2019 were as follows:

	(In millions)
2019 (remaining nine months)	$	12.1
2020	14.8
2021	11.7
2022	8.4
2023	3.6
Thereafter	3.7
Total minimum rents receivable	54.3
Less: unearned income	(11.4		)
Total net investment in direct financing leases	42.9
Less: current portion	(11.2		)
Long-term investment in direct financing leases	$	31.7

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Long-Term Debt (Tables)

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Schedule of debt

At March 31, 2019 and December 31, 2018, long-term debt consisted of the following:

	March 31, 2019			December 31, 2018
	(In millions)
Series 2014-1 4.277% Fixed Rate Senior Secured Notes, Class A-2	$	1,283.8		$	1,283.8
Series 2018-1 Variable Funding Senior Notes Class A-1, variable interest rate of 4.93% at December 31, 2018	—			25.0
Class A-2 Note debt issuance costs	(8.9		)	(9.7		)
Long-term debt, net of debt issuance costs	1,274.9			1,299.1
Current portion of long-term debt	—			(25.0		)
Long-term debt	$	1,274.9		$	1,274.1

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Stockholders' Deficit (Tables)

3 Months Ended

Mar. 31, 2019

Equity [Abstract]

Dividends Declared

Dividends declared and paid per share for the three months ended March 31, 2019 and 2018 were as follows:

	Three months ended March 31,
	2019		2018
Dividends declared per common share	$	0.69	$	0.63
Dividends paid per common share	$	0.63	$	0.97

Class of Treasury Stock

A summary of shares repurchased under the 2019 Repurchase Program and the 2015 Repurchase Program, during the three months ended March 31, 2019 and cumulatively, is as follows:

	Shares	Cost of shares
		(In millions)
2019 Repurchase Program:
Repurchased during the three months ended March 31, 2019	40,817	$	3.6
Cumulative (life-of-program) repurchases	40,817	$	3.6
Remaining dollar value of shares that may be repurchased	n/a	$	196.4
2015 Repurchase Program:
Repurchased during the three months ended March 31, 2019	110,499	$	8.4
Cumulative (life-of-program) repurchases	1,589,995	$	126.2
Remaining dollar value of shares that may be repurchased	n/a	n/a

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2019

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 stock-based compensation expense included in general and administrative expenses in the Consolidated Statements of Comprehensive Income:

	Three months ended March 31,
	2019			2018
	(In millions)
Total stock-based compensation expense:
Equity classified awards expense	$	4.1		$	3.4
Liability classified awards expense	1.0			0.5
Total pre-tax stock-based compensation expense	5.1			3.9
Book income tax benefit	(1.3		)	(1.0		)
Total stock-based compensation expense, net of tax	$	3.8		$	2.9

Schedule of stock option valuation assumptions

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

Risk-free interest rate	2.5	%
Weighted average historical volatility	30.3	%
Dividend yield	2.8	%
Expected years until exercise	4.7
Weighted average fair value of options granted	$21.93

Schedule of stock option activity

Stock option balances at March 31, 2019, and activity for the three months ended March 31, 2019 were as follows:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value (in Millions)
Outstanding at December 31, 2018	1,439,708		$	63.21
Granted	132,832		98.97
Exercised	(116,590	)	58.05
Outstanding at March 31, 2019	1,455,950		66.88		6.8	$	38.2
Vested at March 31, 2019 and Expected to Vest	1,311,896		67.76		6.6	$	33.3
Exercisable at March 31, 2019	682,494		$	75.92	4.6	$	12.1

Schedule of restricted stock unit activity

Outstanding balances as of March 31, 2019, and activity related to restricted stock and restricted stock units for the three months ended March 31, 2019 were as follows:

	Restricted Stock		Weighted Average Grant Date Fair Value		Stock-Settled Restricted Stock Units		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2018	267,242		$	63.97	374,529		$	31.05
Granted	51,457		98.58		13,464		98.97
Released	(48,022	)	79.60		(12,293	)	90.34
Forfeited	(2,562	)	48.22		—		—
Outstanding at March 31, 2019	268,115		$	69.96	375,700		$	30.95

Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block]

The Company has granted cash-settled restricted stock units to certain employees. These instruments are recorded as liabilities at fair value as of the respective period end.

	Cash-Settled Restricted Stock Units		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2018	53,766		$	94.77
Granted	19,736		91.05
Released	(317	)	82.16
Forfeited	(3,622	)	98.96
Outstanding at March 31, 2019	69,563		$	93.58

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Segments (Tables)

3 Months Ended

Mar. 31, 2019

Segment Reporting [Abstract]

Schedule of segment reporting information by segment

Information on segments is as follows:

		Three months ended March 31,
		2019			2018
	(In millions)
Revenues from external customers:
Franchise operations		$	168.9		$	155.3
Rental operations		30.7			30.9
Company restaurants		35.8			—
Financing operations		1.8			2.0
Total		$	237.2		$	188.2
Interest expense:
Rental operations		$	2.5		$	2.4
Company restaurants		0.5			—
Corporate		15.4			15.2
Total		$	18.4		$	17.6
Depreciation and amortization:
Franchise operations		$	2.6		$	2.7
Rental operations		3.5			$	2.9
Company restaurants		1.3			—
Corporate		2.8			2.3
Total		$	10.2		$	7.9
Gross profit, by segment:
Franchise operations		$	88.6		$	73.4
Rental operations		8.1			8.2
Company restaurants		4.2			—
Financing operations		1.7			1.9
Total gross profit		102.6			83.5
Corporate and unallocated expenses, net		(61.5		)	(60.8		)
Income before income tax provision		$	41.1		$	22.7

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Net Income per Share (Tables)

3 Months Ended

Mar. 31, 2019

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 is as follows:

	Three months ended March 31,
	2019			2018
	(In thousands, except per share data)
Numerator for basic and diluted income per common share:
Net income	$	31,643		$	17,073
Less: Net income allocated to unvested participating restricted stock	(1,111		)	(568		)
Net income available to common stockholders - basic	30,532			16,505
Effect of unvested participating restricted stock in two-class calculation	12			2
Net income available to common stockholders - diluted	$	30,544		$	16,507
Denominator:
Weighted average outstanding shares of common stock - basic	17,343			17,703
Dilutive effect of stock options	347			142
Weighted average outstanding shares of common stock - diluted	17,690			17,845
Net income per common share:
Basic	$	1.76		$	0.93
Diluted	$	1.73		$	0.92

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value of non-current financial liabilities

The fair values of the Company's Series 2014-1 Class A-2 Notes (the “Class A-2 Notes”) at March 31, 2019 and December 31, 2018 were as follows:

	March 31, 2019		December 31, 2018
	(In millions)
Carrying amount of Class A-2 Notes	$	1,283.8	$	1,283.8
Fair Value of Class A-2 Notes	$	1,289.0	$	1,280.9

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Acquisition of Business - (Tables)

3 Months Ended

Mar. 31, 2019

Business Combinations [Abstract]

Schedule of Business Acquisitions

During the three months ended March 31, 2019, the Company completed the calculation of deferred income taxes related to the transaction and adjusted the preliminary purchase price as follows:

	Preliminary Allocation			Adjustments			Adjusted Allocation
	(In millions)
Reacquired franchise rights	$	11.6		$	—		$	11.6
Equipment and fixtures	10.0			—			10.0
Inventory	1.4			—			1.4
Deferred income taxes	—			1.5			1.5
Total identifiable assets acquired	23.0			1.5			24.5
Above-market leaseholds, net	(6.5		)	—			(6.5		)
Other liabilities	(1.0		)	—			(1.0		)
Net identifiable assets acquired	15.5			1.5			17.0
Goodwill	6.1			(1.5		)	4.6
Consideration transferred	$	21.6		$	—		$	21.6

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Accounting Standards Adopted and Newly Issued Accounting Standards Not Yet Adopted - Narrative (Details) - USD ($) $ in Thousands		3 Months Ended
	Jan. 01, 2019	Mar. 31, 2019	Mar. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease obligations		$ 453,700
Operating lease right-of-use asset		383,962
Adoption of ASC 842 (Note 3)	$ (5,030)
Income tax provision		$ 9,489	$ 5,638
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease obligations	453,000
Operating lease right-of-use asset	395,600
Income tax provision	(1,700)
Derecognition of certain liabilities and assets	(50,700)
Accrued rent	(43,300)
Retained Earnings (Accumulated Deficit)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Adoption of ASC 842 (Note 3)	(5,030)
Retained Earnings (Accumulated Deficit) | Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Adoption of ASC 842 (Note 3)	$ 5,000

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Revenue Disclosures - Disaggregation of Franchise Revenue by Major Type (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Franchise revenues
Disaggregation of Revenue [Line Items]
Total franchise revenue	$ 168,926	$ 155,313
Royalties
Disaggregation of Revenue [Line Items]
Total franchise revenue	78,730	75,097
Advertising fees
Disaggregation of Revenue [Line Items]
Total franchise revenue	72,630	63,836
Pancake and waffle dry mix sales and other
Disaggregation of Revenue [Line Items]
Total franchise revenue	14,431	13,097
Franchise and development fees
Disaggregation of Revenue [Line Items]
Total franchise revenue	$ 3,135	$ 3,283

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Revenue Disclosures - Changes in the Company's contract liability for deferred franchise and development fees (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Change in Contract with Customer, Liability [Roll Forward]
Balance at December 31, 2018	$ 74,695
Recognized as revenue during the three months ended March 31, 2019	(2,948)
Fees deferred during the three months ended March 31, 2019	1,101
Balance at March 31, 2019	$ 72,848

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Revenue Disclosures - (Details) - Receivables From Franchise Revenue Transactions - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Billed and unbilled receivables	$ 67.1	$ 62.6
Billed and unbilled receivables, accumulated allowance for credit loss	$ 2.1	$ 4.6

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Revenue Disclosures - Deferred revenue expected to be recognized (Details) $ in Thousands	Mar. 31, 2019 USD ($)
Revenue from Contract with Customer [Abstract]
Performance obligations expected to be satisfied	$ 72,848
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01
Revenue from Contract with Customer [Abstract]
Performance obligations expected to be satisfied	$ 6,633
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations expected to be satisfied, expected timing	9 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01
Revenue from Contract with Customer [Abstract]
Performance obligations expected to be satisfied	$ 10,066
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations expected to be satisfied, expected timing	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01
Revenue from Contract with Customer [Abstract]
Performance obligations expected to be satisfied	$ 7,780
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations expected to be satisfied, expected timing	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01
Revenue from Contract with Customer [Abstract]
Performance obligations expected to be satisfied	$ 7,251
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations expected to be satisfied, expected timing	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue from Contract with Customer [Abstract]
Performance obligations expected to be satisfied	$ 6,675
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations expected to be satisfied, expected timing	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue from Contract with Customer [Abstract]
Performance obligations expected to be satisfied	$ 5,987
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations expected to be satisfied, expected timing	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil)
Revenue from Contract with Customer [Abstract]
Performance obligations expected to be satisfied	$ 28,456
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Performance obligations expected to be satisfied, expected timing

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Lease Disclosures (Details)	Mar. 31, 2019 properties Franchisee real_property restaurant_concept
Lessee, Lease, Description [Line Items]
Number of company-operated restaurants located on leased real estate properties | properties	69
Lessee, operating lease, renewal term	5 years
Lessor, number of leases requiring additional rent payments based on a percentage of restaurant sales | real_property	260
Lessee, number of leases requiring additional rent payments based on a percentage of restaurant sales | real_property	220
Finance lease, weighted average remaining lease term	8 years 7 months 6 days
Operating lease, weighted average remaining lease term	8 years 1 month 6 days
Finance lease, weighted average discount rate, percent	10.40%
Operating lease, weighted average discount rate, percent	5.80%
IHOP
Lessee, Lease, Description [Line Items]
Number of franchisee-operated restaurants | Franchisee	620
Number of properties leased | restaurant_concept	60
Applebee's
Lessee, Lease, Description [Line Items]
Number of properties leased | restaurant_concept	1
Minimum | IHOP
Lessee, Lease, Description [Line Items]
Lessee, operating lease, term of contract	20 years
Maximum | IHOP
Lessee, Lease, Description [Line Items]
Lessee, operating lease, term of contract	25 years

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Lease Disclosures Components of Lease Cost (Details) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($)
Finance lease cost:
Amortization of right-of-use assets	$ 1.3
Interest on lease liabilities	2.1
Operating lease cost	26.4
Variable lease cost	0.7
Short-term lease cost	0.0
Sublease income	(28.1)
Lease cost	$ 2.4

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Lease Disclosures Future minimum lease payments under noncancelable leases as lessee (Details) $ in Thousands	Mar. 31, 2019 USD ($)
Finance Lease Liabilities, Payments, Due [Abstract]
2019 (remaining nine months)	$ 15,800
2020	20,100
2021	16,500
2022	14,700
2023	11,600
Thereafter	65,000
Total minimum lease payments	143,700
Less: interest/imputed interest	(43,100)
Total obligations	100,600
Less: current portion	(13,000)
Long-term lease obligations	87,624
Operating Lease Liabilities, Payments Due [Abstract]
2019 (remaining nine months)	69,000
2020	93,000
2021	76,000
2022	68,000
2023	55,600
Thereafter	212,700
Total minimum lease payments	574,300
Less: interest/imputed interest	(120,600)
Total obligations	453,700
Less: current portion	(67,340)
Long-term lease obligations	$ 386,364

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Lease Disclosures Components of Lease Income (Details) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($)
Leases [Abstract]
Minimum lease payments	$ 25.7
Variable lease income	3.2
Total operating lease income	$ 28.9

XML

Lease Disclosures Future minimum payments to be received as lessor under noncancelable operating leases (Details) $ in Millions	Mar. 31, 2019 USD ($)
Leases [Abstract]
2019 (remaining nine months)	$ 79.5
2020	107.1
2021	101.2
2022	98.1
2023	93.7
Thereafter	288.3
Total minimum rents receivable	$ 767.9

XML

Lease Disclosures Schedule of income from direct financing leases (Details) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($)
Leases [Abstract]
Interest income	$ 1.4
Variable lease income	0.4
Total operating lease income	$ 1.8

XML

Lease Disclosures Future minimum payments to be received as lessor under noncancelable direct financing leases (Details) $ in Millions	Mar. 31, 2019 USD ($)
Leases [Abstract]
2019 (remaining nine months)	$ 12.1
2020	14.8
2021	11.7
2022	8.4
2023	3.6
Thereafter	3.7
Total minimum rents receivable	54.3
Less: unearned income	(11.4)
Total net investment in direct financing leases	42.9
Less: current portion	(11.2)
Long-term investment in direct financing leases	$ 31.7

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Lease Disclosures Payment for Leases (Details) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($)
Leases [Abstract]
Principal payments on finance lease obligations	$ 3.5
Interest payments on finance lease obligations	2.0
Payments on operating leases	22.9
Variable lease payments	$ 0.9

XML

Long-Term Debt (Schedule of Debt) (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Class A-2 Note debt issuance costs	$ (8,900)	$ (9,700)
Long-term debt, net of debt issuance costs	1,274,900	1,299,100
Current portion of long-term debt	0	(25,000)
Long-term debt, less current maturities	$ 1,274,916	$ 1,274,087
Series 2014-1 4.277% Fixed Rate Senior Secured Notes, Class A-2
Debt Instrument [Line Items]
Debt interest rate (percent)	4.277%	4.277%
Senior notes	$ 1,283,800	$ 1,283,800
Series 2018-1 Variable Funding Senior Notes Class A-1, at a variable interest rate of 4.93% as of December 31, 2018
Debt Instrument [Line Items]
Debt interest rate (percent)		4.93%
Senior notes	$ 0	$ 25,000

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Long-Term Debt - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Series 2014-1 4.277% Fixed Rate Senior Secured Notes, Class A-2
Debt Instrument [Line Items]
Debt interest rate (percent)	4.277%	4.277%
Series 2018-1 Variable Funding Senior Notes Class A-1, at a variable interest rate of 4.93% as of December 31, 2018
Debt Instrument [Line Items]
Debt interest rate (percent)		4.93%
Repayments of notes payable	$ 25.0
Line of credit facility, amount outstanding	$ 25.0
Debt, weighted average interest rate	4.88%
Line of credit facility, current borrowing capacity	$ 222.8
Letter of Credit | Series 2018-1 Variable Funding Senior Notes Class A-1, at a variable interest rate of 4.93% as of December 31, 2018
Debt Instrument [Line Items]
Debt instrument, collateral amount	$ 2.2

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Stockholders' Deficit - Narrative (Details) - USD ($)			3 Months Ended
	Apr. 05, 2019	Feb. 20, 2019	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Oct. 31, 2015
Equity, Class of Treasury Stock [Line Items]
Dividends paid on common stock			$ 11,153,000		$ 17,453,000
Dividends declared per common share (USD per share)		$ 0.69	$ 0.69	$ 0.63	$ 0.63
Dividends paid per common share (USD per share)			$ 0.63		$ 0.97
Dividends payable			$ 12,461,000	$ 11,389,000
Treasury stock reissued (shares)			168,047
Reissuance of treasury stock			$ 6,768,000		$ 456,000
Treasury Stock
Equity, Class of Treasury Stock [Line Items]
Treasury stock reissued (shares)			168,000		77,000
Reissuance of treasury stock			$ 7,435,000		$ 2,951,000
2019 Repurchase Program
Equity, Class of Treasury Stock [Line Items]
Stock repurchase program, authorized amount		$ 200,000,000
October 2015 Share Repurchase Program
Equity, Class of Treasury Stock [Line Items]
Stock repurchase program, authorized amount						$ 150,000,000
Subsequent Event
Equity, Class of Treasury Stock [Line Items]
Dividends paid per common share (USD per share)	$ 0.69

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Stockholders' Deficit Dividends declared and paid per share (Details) - $ / shares		3 Months Ended
	Feb. 20, 2019	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018
Equity [Abstract]
Dividends declared per common share (USD per share)	$ 0.69	$ 0.69	$ 0.63	$ 0.63
Dividends paid per common share (USD per share)		$ 0.63		$ 0.97

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Stockholders' Deficit - Share Repurchases (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Class of Stock [Line Items]
Stock repurchased during period, value	$ 12,015	$ 10,003
2019 Repurchase Program
Class of Stock [Line Items]
Stock repurchased during period (in shares)	40,817
Stock repurchased during period, value	$ 3,600
Cumulative amount of shares repurchased (in shares)	40,817
Cumulative payments for repurchase of common stock	$ 3,600
Remaining dollar value of shares that may be repurchased	$ 196,400
October 2015 Share Repurchase Program
Class of Stock [Line Items]
Stock repurchased during period (in shares)	110,499
Stock repurchased during period, value	$ 8,400
Cumulative amount of shares repurchased (in shares)	1,589,995
Cumulative payments for repurchase of common stock	$ 126,200

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Income Taxes - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Effective income tax rate (percent)	23.10%	24.80%
Gross unrecognized tax benefit	$ 5.2		$ 5.2
Expected change in unrecognized tax benefits	0.9
Accrued interest on income taxes	1.3		1.1
Accrued penalties on income taxes, less than	$ 0.1		$ 0.1

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Stock-Based Compensation (Components of Stock-Based Compensation Expense) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Equity classified awards expense	$ 4.1	$ 3.4
Liability classified awards expense	1.0	0.5
Total pre-tax stock-based compensation expense	5.1	3.9
Book income tax benefit	(1.3)	(1.0)
Total stock-based compensation expense, net of tax	$ 3.8	$ 2.9

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Stock-Based Compensation - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grants in period (in shares)	132,832
Share-based compensation expense	$ 5,100	$ 3,900
Accrued employee compensation and benefits	15,338		$ 27,479
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total compensation cost not yet recognized	$ 24,100
Total compensation cost not yet recognized, period for recognition (in years)	1 year 8 months 29 days
Restricted stock, granted (in shares)	13,464
Vested in period (in shares)	12,293
Restricted stock, forfeited (in shares)	0
Cash-settled restricted stock units, outstanding (in shares)	375,700		374,529
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total compensation cost not yet recognized	$ 5,800
Total compensation cost not yet recognized, period for recognition (in years)	1 year 9 months 11 days
Cash-settled Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock, granted (in shares)	19,736
Restricted stock, forfeited (in shares)	3,622
Cash-settled restricted stock units, outstanding (in shares)	69,563		53,766
Share-based compensation expense	$ 600	100
LTIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (in years)	3 years
Share-based compensation expense	$ 400	$ 400
Accrued employee compensation and benefits	$ 1,700		$ 2,400
LTIP | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Multiplier for target award based on total shareholder return on common stock (percent)	0.00%
LTIP | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Multiplier for target award based on total shareholder return on common stock (percent)	200.00%

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Stock-Based Compensation (Options Value Assumptions) (Details) - Stock Options	3 Months Ended
	Mar. 31, 2019 $ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate (percent)	2.50%
Weighted average historical volatility (percent)	30.30%
Dividend yield (percent)	2.80%
Expected years until exercise (years)	4 years 8 months 12 days
Weighted average fair value of options granted (USD per share)	$ 21.93

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Stock-Based Compensation (Stock Option Activity) (Details) - Stock Options $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($) $ / shares shares
Shares
Options, outstanding, beginning of period (in shares) | shares	1,439,708
Options, granted (in shares) | shares	132,832
Options, exercised (in shares) | shares	(116,590)
Options, outstanding, end of period (in shares) | shares	1,455,950
Options, vested and expected to vest (in shares) | shares	1,311,896
Options, exercisable (in shares) | shares	682,494
Weighted Average Exercise Price
Weighted average exercise price, beginning of period (per share) | $ / shares	$ 63.21
Weighted average exercise price, granted (per share) | $ / shares	98.97
Weighted average exercise price, exercised (per share) | $ / shares	58.05
Weighted average exercise price, end of period (per share) | $ / shares	66.88
Weighted average exercise price, vested and expected to vest (per share) | $ / shares	67.76
Weighted average exercise price, exercisable (per share) | $ / shares	$ 75.92
Weighted average remaining contractual term (in years)	6 years 9 months 12 days
Weighted average remaining contractual term, vested and expected to vest (in years)	6 years 6 months 23 days
Weighted average remaining contractual term, exercisable (in years)	4 years 6 months 28 days
Options, outstanding, intrinsic value | $	$ 38.2
Options, vested and expected to vest, intrinsic value | $	33.3
Options, vested and expected to vest, exercisable | $	$ 12.1

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Stock-Based Compensation (Restricted Stock) (Details)	3 Months Ended
	Mar. 31, 2019 $ / shares shares
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) | shares	267,242
Restricted stock, granted (in shares) | shares	51,457
Restricted stock, released (in shares) | shares	(48,022)
Restricted stock, forfeited (in shares) | shares	(2,562)
Restricted stock, end of period (in shares) | shares	268,115
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) | $ / shares	$ 63.97
Weighted average grant date fair value, granted (per share) | $ / shares	98.58
Weighted average grant date fair value, released (per share) | $ / shares	79.60
Weighted average grant date fair value, forfeited (per share) | $ / shares	48.22
Weighted average grant date fair value, ending balance (per share) | $ / shares	$ 69.96
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) | shares	374,529
Restricted stock, granted (in shares) | shares	13,464
Restricted stock, released (in shares) | shares	(12,293)
Restricted stock, forfeited (in shares) | shares	0
Restricted stock, end of period (in shares) | shares	375,700
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) | $ / shares	$ 31.05
Weighted average grant date fair value, granted (per share) | $ / shares	98.97
Weighted average grant date fair value, released (per share) | $ / shares	90.34
Weighted average grant date fair value, forfeited (per share) | $ / shares	0.00
Weighted average grant date fair value, ending balance (per share) | $ / shares	$ 30.95

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Stock-Based Compensation (Liability Classified Awards - Cash-settled Restricted Stock Units) (Details) - Cash-settled Restricted Stock Units	3 Months Ended
	Mar. 31, 2019 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward]
Restricted stock, beginning of period (in shares) | shares	53,766
Restricted stock, granted (in shares) | shares	19,736
Restricted stock, released (in shares) | shares	(317)
Restricted stock, forfeited (in shares) | shares	(3,622)
Restricted stock, end of period (in shares) | shares	69,563
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) | $ / shares	$ 94.77
Weighted average fair value of restricted stock units granted (USD per share) | $ / shares	91.05
Weighted average fair value of restricted stock units released (in USD per share) | $ / shares	82.16
Weighted average grant date fair value, forfeited (per share) | $ / shares	98.96
Weighted average grant date fair value, ending balance (per share) | $ / shares	$ 93.58

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Segments - Narrative (Details)	3 Months Ended
	Mar. 31, 2019 Restaurant Country segment Territory
Franchisor Disclosure [Line Items]
Number of segments (segment) | segment	5
Applebee's
Franchisor Disclosure [Line Items]
Number of territories in which entity operates (territory) | Territory	2
Number of countries in which entity operates (country) | Country	13
IHOP
Franchisor Disclosure [Line Items]
Number of territories in which entity operates (territory) | Territory	3
Number of countries in which entity operates (country) | Country	12
Franchised Units | Applebee's
Franchisor Disclosure [Line Items]
Number of restaurants (restaurant) | Restaurant	1,761
Franchised Units | IHOP
Franchisor Disclosure [Line Items]
Number of restaurants (restaurant) | Restaurant	1,822

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Segments (Schedule of Segment Reporting Information by Segment) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Segment Reporting Information [Line Items]
Rental revenues	$ 30,711	$ 30,841
Total revenues	237,182	188,163
Interest expense	18,400	17,600
Depreciation and amortization	10,179	7,940
Segment profit	41,132	22,711
Corporate
Segment Reporting Information [Line Items]
Interest expense	15,400	15,200
Depreciation and amortization	2,800	2,300
Operating Segments
Segment Reporting Information [Line Items]
Segment profit	102,600	83,500
Operating Segments | Franchise operations
Segment Reporting Information [Line Items]
Depreciation and amortization	2,600	2,700
Segment profit	88,600	73,400
Operating Segments | Rental operations
Segment Reporting Information [Line Items]
Rental revenues	30,700	30,900
Interest expense	2,500	2,400
Depreciation and amortization	3,500	2,900
Segment profit	8,100	8,200
Operating Segments | Company restaurants
Segment Reporting Information [Line Items]
Interest expense	500	0
Depreciation and amortization	1,300	0
Segment profit	4,200	0
Operating Segments | Financing operations
Segment Reporting Information [Line Items]
Segment profit	1,700	1,900
Corporate and unallocated expenses, net
Segment Reporting Information [Line Items]
Segment profit	(61,500)	(60,800)
Franchise revenues
Segment Reporting Information [Line Items]
Revenue from contract with customer, excluding assessed Tax	168,926	155,313
Franchise revenues | Operating Segments | Franchise operations
Segment Reporting Information [Line Items]
Revenue from contract with customer, excluding assessed Tax	168,900	155,300
Company restaurant sales
Segment Reporting Information [Line Items]
Revenue from contract with customer, excluding assessed Tax	35,735	0
Company restaurant sales | Operating Segments | Company restaurants
Segment Reporting Information [Line Items]
Revenue from contract with customer, excluding assessed Tax	35,800	0
Financing revenues
Segment Reporting Information [Line Items]
Revenue from contract with customer, excluding assessed Tax	1,810	2,009
Financing revenues | Operating Segments | Financing operations
Segment Reporting Information [Line Items]
Revenue from contract with customer, excluding assessed Tax	$ 1,800	$ 2,000

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Net Income per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Earnings Per Share [Abstract]
Net income	$ 31,643	$ 17,073
Less: Net income allocated to unvested participating restricted stock	(1,111)	(568)
Net income available to common stockholders - basic	30,532	16,505
Dilutive Securities, Effect on Basic Earnings Per Share, Options and Restrictive Stock Units	12	2
Net income available to common stockholders - diluted	$ 30,544	$ 16,507
Weighted average outstanding shares of common stock - basic (in shares)	17,343	17,703
Dilutive effect of stock options (in shares)	347	142
Weighted average outstanding shares of common stock - diluted (in shares)	17,690	17,845
Net income per common share - basic (USD per share)	$ 1.76	$ 0.93
Net income per common share - diluted (USD per share)	$ 1.73	$ 0.92

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Fair Value Measurements - Fair Value of Non-Current Financial Liabilities (Details) - Level 2 - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Carrying amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt, fair value	$ 1,283.8	$ 1,283.8
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt, fair value	$ 1,289.0	$ 1,280.9

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Commitments and Contingencies - Narrative (Details) - Applebee's - Property Lease Guarantee $ in Millions	Mar. 31, 2019 USD ($)
Loss Contingencies [Line Items]
Potential liability for guaranteed leases	$ 280.0
Potential liability for guaranteed leases excluding unexercised option periods	$ 42.1

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Restricted Cash (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Restricted Cash and Cash Equivalents Items [Line Items]
Current restricted cash	$ 36,654	$ 48,515
Non-current restricted cash	14,700	14,700
Held in Trust Deposits
Restricted Cash and Cash Equivalents Items [Line Items]
Current restricted cash	33,700	42,300
Held for Advertising Activity Deposits
Restricted Cash and Cash Equivalents Items [Line Items]
Current restricted cash	$ 2,900	$ 6,200

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Acquisition of Business (Details) $ in Millions	1 Months Ended	3 Months Ended	12 Months Ended
	Dec. 31, 2018 USD ($) Restaurant	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Business Combinations [Abstract]
Number of businesses acquired | Restaurant	69
Business Acquisition [Line Items]
Capital (finance) lease		$ 100.6
Applebee's Restaurants In North And South Carolina
Business Acquisition [Line Items]
Consideration transferred	$ 21.6	21.6	$ 21.6
Assumed capital (finance) lease obligations		9.1
Capital (finance) lease		$ 28.1

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Acquisition of Business Preliminary estimated fair values of the assets acquired and liabilities assumed (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended	12 Months Ended
	Dec. 31, 2018	Mar. 31, 2019	Dec. 31, 2018
Business Acquisition [Line Items]
Goodwill	$ 345,314	$ 343,862	$ 345,314
Applebee's Restaurants In North And South Carolina
Business Acquisition [Line Items]
Reacquired franchise rights	11,600	11,600	11,600
Measurement period adjustments, reacquired franchise rights		0
Equipment and fixtures	10,000	10,000	10,000
Measurement period adjustments, equipment and fixtures		0
Inventory	1,400	1,400	1,400
Measurement period adjustments, inventory		0
Deferred income taxes	0	1,500	0
Measurement period adjustments, deferred income taxes		1,500
Total identifiable assets acquired	23,000	24,500	23,000
Measurement period adjustments, total identifiable assets acquired		1,500
Above-market leaseholds, net	(6,500)	(6,500)	(6,500)
Measurement period adjustments, above-market leaseholds, net		0
Other liabilities	(1,000)	(1,000)	(1,000)
Measurement period adjustments, other liabilities		0
Net identifiable assets acquired	15,500	17,000	15,500
Measurement period adjustments, net identifiable assets acquired		1,500
Goodwill	6,100	4,600	6,100
Measurement period adjustments, goodwill		(1,500)
Consideration transferred	$ 21,600	21,600	$ 21,600
Measurement period adjustments, consideration transferred		$ 0