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Document and Entity Information
9 Months Ended
Sep. 24, 2014
Oct. 23, 2014
Document and Entity Information [Abstract] ' '
Entity Registrant Name 'DENNYS CORP '
Entity Central Index Key '0000852772 '
Current Fiscal Year End Date '--12-31 '
Entity Well-known Seasoned Issuer 'No '
Entity Voluntary Filers 'No '
Entity Current Reporting Status 'Yes '
Entity Filer Category 'Accelerated Filer '
Entity Common Stock, Shares Outstanding ' 84,727,048
Document Fiscal Year Focus '2014 '
Document Fiscal Period Focus 'Q3 '
Document Type '10-Q '
Amendment Flag 'false '
Document Period End Date Sep 24, 2014 '
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Condensed Consolidated Balance Sheets (Unaudited) (USD $)
In Thousands, unless otherwise specified
Sep. 24, 2014
Dec. 25, 2013
Current assets: ' '
Cash and cash equivalents $ 1,450 $ 2,943
Receivables 14,759 17,321
Inventories 2,743 2,881
Current deferred tax asset 22,021 23,264
Prepaid and other current assets 6,329 7,417
Total current assets 47,302 53,826
Property, net of accumulated depreciation of $253,252 and $255,966, respectively 109,268 105,620
Goodwill 31,451 31,451
Intangible assets, net 46,683 47,925
Deferred financing costs, net 1,734 2,097
Noncurrent deferred tax asset 21,604 28,290
Other noncurrent assets 26,237 26,568
Total assets 284,279 295,777
Current liabilities: ' '
Current maturities of long-term debt 3,750 3,000
Current maturities of capital lease obligations 3,802 4,150
Accounts payable 16,408 14,237
Other current liabilities 50,220 52,698
Total current liabilities 74,180 74,085
Long-term liabilities: ' '
Long-term debt, less current maturities 148,750 150,000
Capital lease obligations, less current maturities 15,422 15,923
Liability for insurance claims, less current portion 17,748 18,249
Other noncurrent liabilities and deferred credits 25,752 29,089
Total long-term liabilities 207,672 213,261
Total liabilities 281,852 287,346
Commitments and contingencies '   '  
Shareholders' equity ' '
Common stock $0.01 par value; shares authorized - 135,000; September 24, 2014: 105,498 shares issued and 84,845 shares outstanding; December 25, 2013: 105,014 shares issued and 89,232 shares outstanding 1,055 1,050
Paid-in capital 570,705 567,505
Deficit (447,899) (470,946)
Accumulated other comprehensive loss, net of tax (17,138) (16,842)
Shareholders’ equity before treasury stock 106,723 80,767
Treasury stock, at cost, 20,653 and 15,782 shares, respectively (104,296) (72,336)
Total shareholders' equity 2,427 8,431
Total liabilities and shareholders' equity $ 284,279 $ 295,777
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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)
In Thousands, except Per Share data, unless otherwise specified
Sep. 24, 2014
Dec. 25, 2013
Assets [Abstract] ' '
Accumulated depreciation $ 253,252 $ 255,966
Shareholders' equity ' '
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized 135,000 135,000
Common stock, shares issued 105,498 105,014
Common stock, shares outstanding 84,845 89,232
Treasury stock, at cost, shares 20,653 15,782
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Condensed Consolidated Statements of Income (Unaudited) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 24, 2014
Sep. 25, 2013
Sep. 24, 2014
Sep. 25, 2013
Revenue: ' ' ' '
Company restaurant sales $ 82,827 $ 83,371 $ 243,269 $ 247,242
Franchise and license revenue 34,205 33,904 100,297 101,094
Total operating revenue 117,032 117,275 343,566 348,336
Costs of company restaurant sales: ' ' ' '
Product costs 21,364 21,722 63,274 64,270
Payroll and benefits 32,507 33,746 97,584 98,512
Occupancy 5,418 5,598 15,445 16,339
Other operating expenses 12,514 12,022 35,322 34,538
Total costs of company restaurant sales 71,803 73,088 211,625 213,659
Costs of franchise and license revenue 11,309 11,599 32,639 34,586
General and administrative expenses 13,439 13,704 41,623 42,948
Depreciation and amortization 5,185 5,198 15,704 15,774
Operating (gains), losses and other charges, net 587 161 1,049 1,779
Total operating costs and expenses, net 102,323 103,750 302,640 308,746
Operating income 14,709 13,525 40,926 39,590
Interest expense, net 2,284 2,452 6,880 7,800
Other nonoperating (income) expense, net (33) (276) (465) 1,056
Net income before income taxes 12,458 11,349 34,511 30,734
Provision for income taxes 4,115 4,318 11,464 10,424
Net income $ 8,343 $ 7,031 $ 23,047 $ 20,310
Basic net income per share $ 0.1 $ 0.08 $ 0.27 $ 0.22
Diluted net income per share $ 0.1 $ 0.08 $ 0.26 $ 0.22
Basic weighted average shares outstanding 85,061 90,035 86,882 91,348
Diluted weighted average shares outstanding 86,983 91,967 88,844 93,377
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Condensed Consolidated Statements of Comprehensive Income Statement (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 24, 2014
Sep. 25, 2013
Sep. 24, 2014
Sep. 25, 2013
Statement of Comprehensive Income [Abstract] ' ' ' '
Net income $ 8,343 $ 7,031 $ 23,047 $ 20,310
Other comprehensive income (loss), net of tax: ' ' ' '
Minimum pension liability adjustment, net of tax expense of $90, $162, $271 and $487 141 251 422 752
Recognition of unrealized gain (loss) on hedge transaction, net of tax expense (benefit) of $103, $(459), $(460) and $1,063 159 (708) (718) 1,640
Other comprehensive income (loss) 300 (457) (296) 2,392
Total comprehensive income $ 8,643 $ 6,574 $ 22,751 $ 22,702
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Condensed Consolidated Statements of Comprehensive Income Consolidated Statements of Comprehensive Income (Parentheticals) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 24, 2014
Sep. 25, 2013
Sep. 24, 2014
Sep. 25, 2013
Statement of Comprehensive Income [Abstract] ' ' ' '
Minimum pension liability adjustment, tax expense $ 90 $ 162 $ 271 $ 487
Unrealized gain (loss) on hedged transactions, tax expense (benefit) $ 103 $ (459) $ (460) $ 1,063
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Condensed Consolidated Statement of Shareholders' Equity (Unaudited) (USD $)
In Thousands, unless otherwise specified
Total
Common Stock [Member]
Treasury Stock [Member]
Paid-in Capital [Member]
(Deficit) [Member]
Accumulated Other Comprehensive Loss, Net [Member]
Balance at Dec. 25, 2013 $ 8,431 $ 1,050 $ (72,336) $ 567,505 $ (470,946) $ (16,842)
Balance, treasury stock, at cost, shares at Dec. 25, 2013 (15,782) ' (15,782) ' ' '
Balance, common stock, shares issued at Dec. 25, 2013 105,014 105,014 ' ' ' '
Increase (Decrease) in Stockholders' Equity [Roll Forward] ' ' ' ' ' '
Net income 23,047 ' ' ' 23,047 '
Other comprehensive loss (296) ' ' ' ' (296)
Share-based compensation on equity classified awards 1,608 ' ' 1,608 ' '
Purchase of treasury stock (31,960) ' (31,960) ' ' '
Purchase of treasury stock (in shares) (4,871) ' (4,871) ' ' '
Issuance of common stock for share-based compensation 0 2 ' (2) ' '
Issuance of common stock for share-based compensation (in shares) ' 151 ' ' ' '
Exercise of common stock options 970 3 ' 967 ' '
Exercise of common stock options (in shares) ' 333 ' ' ' '
Tax benefit from share-based compensation 627 ' ' 627 ' '
Balance at Sep. 24, 2014 $ 2,427 $ 1,055 $ (104,296) $ 570,705 $ (447,899) $ (17,138)
Balance, treasury stock, at cost, shares at Sep. 24, 2014 (20,653) ' (20,653) ' ' '
Balance, common stock, shares issued at Sep. 24, 2014 105,498 105,498 ' ' ' '
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Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 24, 2014
Sep. 25, 2013
Cash flows from operating activities: ' '
Net income $ 23,047 $ 20,310
Adjustments to reconcile net income to cash flows provided by operating activities: ' '
Depreciation and amortization 15,704 15,774
Operating (gains), losses and other charges, net 1,049 1,779
Amortization of deferred financing costs 362 376
(Gain) loss on early extinguishments of debt (54) 1,798
Loss on change in the fair value of interest rate caps 11 28
Deferred income tax expense 8,118 8,241
Share-based compensation 2,993 3,434
Decrease (increase) in assets: ' '
Receivables 2,325 3,519
Inventories 138 0
Other current assets 1,089 2,291
Other assets (1,668) (1,399)
Increase (decrease) in liabilities: ' '
Accounts payable 1,797 (3,461)
Accrued salaries and vacations (620) (3,089)
Accrued taxes 1,753 1,823
Other accrued liabilities (5,437) (4,015)
Other noncurrent liabilities and deferred credits (2,366) (2,693)
Net cash flows provided by operating activities 48,241 44,716
Cash flows from investing activities: ' '
Capital expenditures (17,880) (9,461)
Acquisition of restaurant and real estate 0 (3,980)
Proceeds from disposition of property 61 1,591
Collections on notes receivable 1,788 3,653
Issuance of notes receivable (1,167) (1,232)
Net cash flows used in investing activities (17,198) (9,429)
Cash flows from financing activities: ' '
Net revolver borrowings under new credit agreement 1,750 97,000
Term loan borrowings under new credit agreement 0 60,000
Long-term debt payments (5,340) (174,820)
Proceeds from exercise of stock options 970 2,077
Tax withholding on share-based payments (419) (464)
Tax benefit (expense) for share-based compensation 627 (204)
Debt transaction costs 0 366
Deferred financing costs 0 1,372
Purchase of treasury stock (32,073) (21,952)
Net bank overdrafts 1,949 (2,421)
Net cash flows used in financing activities (32,536) (42,522)
Decrease in cash and cash equivalents (1,493) (7,235)
Cash and cash equivalents at beginning of period 2,943 13,565
Cash and cash equivalents at end of period $ 1,450 $ 6,330
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Introduction and Basis of Presentation
9 Months Ended
Sep. 24, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract] '
Introduction and Basis of Presentation '
Introduction and Basis of Presentation

Denny’s Corporation, or Denny’s, is one of America’s largest full-service restaurant chains based on number of restaurants. At September 24, 2014, the Denny's brand consisted of 1,689 restaurants, 1,529 of which were franchised/licensed restaurants and 160 of which were company operated.

Our unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Therefore, certain information and notes normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted. In our opinion, all adjustments considered necessary for a fair presentation of the interim periods presented have been included. Such adjustments are of a normal and recurring nature. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions; however, we believe that our estimates, including those for the above-described items, are reasonable.

These interim condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto for the year ended December 25, 2013 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K for the fiscal year ended December 25, 2013. The results of operations for the interim periods presented are not necessarily indicative of the results for the entire fiscal year ending December 31, 2014.
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Summary of Significant Accounting Policies
9 Months Ended
Sep. 24, 2014
Accounting Policies [Abstract] '
Summary of Significant Accounting Policies '
Summary of Significant Accounting Policies
 
Accounting Standards to be Adopted

Discontinued Operations

ASU 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity"

In April 2014, the FASB issued ASU 2014-08, which raises the threshold for a disposal to qualify as a discontinued operation and modifies the related disclosure requirements. Under the new guidance, only disposals resulting in a strategic shift that will have a major effect on an entity's operations and financial results will be reported as discontinued operations. ASU 2014-08 also removes the requirement that an entity not have any significant continuing involvement in the operations of the component after disposal to qualify for reporting of the disposal as a discontinued operation. The guidance is effective for annual and interim periods beginning after December 15, 2014 (our fiscal 2015), with early adoption permitted for any disposal transaction not previously reported. We do not believe the adoption of this guidance will have a material impact on our consolidated financial statements.

Revenue Recognition

ASU 2014-09, "Revenue from Contracts with Customers"

In May 2014, the FASB issued ASU 2014-09, which clarifies the principles used to recognize revenue for all entities. The new guidance requires companies to recognize revenue when it transfers goods or service to a customer in an amount that reflects the consideration to which a company expects to be entitled. ASU 2014-09 is effective for annual and interim periods beginning after December 15, 2016 (our fiscal 2017). The guidance allows for either a "full retrospective" adoption or a "modified retrospective" adoption, however early adoption is not permitted. We are currently evaluating the adoption methods and the impact the adoption of this guidance will have on our consolidated financial statements.

Going Concern

ASU 2014-15, "Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern"

In August 2014, the FASB issued ASU 2014-15, which requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. ASU 2014-15 is effective for annual and interim periods beginning after December 15, 2016 (our fiscal 2017) with early adoption permitted. We do not believe the adoption of this guidance will have a material impact on our consolidated financial statements.

We reviewed all other newly issued accounting pronouncements and concluded that they are either not applicable to our business or are not expected to have a material effect on the financial statements as a result of future adoption.
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Receivables
9 Months Ended
Sep. 24, 2014
Receivables [Abstract] '
Receivables '
Receivables
 
Receivables were comprised of the following:
 
 
September 24, 2014
 
December 25, 2013
 
(In thousands)
Current assets:
 
 
 
Receivables:
 
 
 
Trade accounts receivable from franchisees
$
9,886

 
$
10,072

Notes receivable from franchisees
1,563

 
1,800

Vendor receivables
1,141

 
2,516

Credit card receivables
1,004

 
2,162

Other
1,454

 
1,002

Allowance for doubtful accounts
(289
)
 
(231
)
Total current receivables, net
$
14,759

 
$
17,321

 
 
 
 
Noncurrent assets (included as a component of other noncurrent assets):
 
 
 
Notes receivable from franchisees
$
382

 
$
766

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Goodwill and Other Intangible Assets
9 Months Ended
Sep. 24, 2014
Goodwill and Intangible Assets Disclosure [Abstract] '
Goodwill and Other Intangible Assets '
Goodwill and Other Intangible Assets

Goodwill had a carrying value of $31.5 million as of September 24, 2014 and December 25, 2013.

Other intangible assets were comprised of the following:
 
 
September 24, 2014
 
December 25, 2013
 
Gross Carrying Amount
 
Accumulated Amortization
 
Gross Carrying Amount
 
Accumulated Amortization
 
(In thousands)
Intangible assets with indefinite lives:
 
 
 
 
 
 
 
Trade names
$
44,061

 
$

 
$
44,055

 
$

Liquor licenses
126

 

 
126

 

Intangible assets with definite lives:
 
 
 
 
 
 
 
Franchise and license agreements
22,406

 
21,146

 
31,248

 
29,007

Reacquired franchise rights
1,857

 
621

 
1,857

 
354

Intangible assets
$
68,450

 
$
21,767

 
$
77,286

 
$
29,361


 
The $8.8 million decrease in franchise and license agreements primarily resulted from the removal of fully amortized agreements.
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Operating (Gains), Losses and Other Charges, Net
9 Months Ended
Sep. 24, 2014
Other Income and Expenses [Abstract] '
Operating (Gains), Losses and Other Charges, Net '
Operating (Gains), Losses and Other Charges, Net

Operating (gains), losses and other charges, net are comprised of the following:
 
 
Quarter Ended
 
Three Quarters Ended
 
September 24, 2014
 
September 25, 2013
 
September 24, 2014
 
September 25, 2013
 
(In thousands)
(Gains) losses on sales of assets and other, net
$
(33
)
 
$
(68
)
 
$
(74
)
 
$
(83
)
Restructuring charges and exit costs
300

 
229

 
775

 
1,005

Impairment charges
320

 

 
348

 
857

Operating (gains), losses and other charges, net
$
587

 
$
161

 
$
1,049

 
$
1,779


 
Restructuring charges and exit costs were comprised of the following: 
 
 
Quarter Ended
 
Three Quarters Ended
 
September 24, 2014
 
September 25, 2013
 
September 24, 2014
 
September 25, 2013
 
(In thousands)
Exit costs
$
291

 
$
198

 
$
380

 
$
435

Severance and other restructuring charges
9

 
31

 
395

 
570

Total restructuring charges and exit costs
$
300

 
$
229

 
$
775

 
$
1,005



The components of the change in accrued exit cost liabilities are as follows:
 
 
(In thousands)
Balance, December 25, 2013
$
3,149

Exit costs (1)
380

Payments, net of sublease receipts
(1,050
)
Reclassification of certain lease assets and liabilities, net
(95
)
Interest accretion
141

Balance, September 24, 2014
2,525

Less current portion included in other current liabilities
914

Long-term portion included in other noncurrent liabilities
$
1,611


(1)
Included as a component of operating (gains), losses and other charges, net.

Impairment charges of $0.3 million for the three quarters ended September 24, 2014 resulted primarily from the impairment of an underperforming unit. Impairment charges of $0.9 million for the three quarters ended September 25, 2013 resulted primarily from the impairment of two units identified as assets held for sale.
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Fair Value of Financial Instruments
9 Months Ended
Sep. 24, 2014
Fair Value Disclosures [Abstract] '
Fair Value Disclosures '
Fair Value of Financial Instruments

Fair Value of Assets and Liabilities Measured on a Recurring and Nonrecurring Basis
 
Financial assets and liabilities measured at fair value on a recurring basis are summarized below:
 
 
Total
 
Quoted Prices in Active Markets for Identical Assets/Liabilities
(Level 1)
 
Significant Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
 
Valuation Technique
 
(In thousands)
 
 
Fair value measurements as of September 24, 2014:
 
 
 
 
 
 
 
 
 
Deferred compensation plan investments (1)
$
8,880

 
$
8,880

 
$

 
$

 
market approach
Interest rate swaps (2)
1,854

 

 
1,854

 

 
income approach
Interest rate caps (2)
0

 

 
0

 

 
income approach
Total
$
10,734

 
$
8,880

 
$
1,854

 
$

 
 
 
 
 
 
 
 
 
 
 
 
Fair value measurements as of December 25, 2013:
 
 
 
 
 
 
 
 
 
Deferred compensation plan investments (1)
$
8,168

 
$
8,168

 
$

 
$

 
market approach
Interest rate swaps (2)
3,032

 

 
3,032

 

 
income approach
Interest rate caps (2)
11

 

 
11

 

 
income approach
Total
$
11,211

 
$
8,168

 
$
3,043

 
$

 
 
 
(1)
The fair values of our deferred compensation plan investments are based on the closing market prices of the participants’ elected investments.
(2)
The fair values of our interest rate swaps and interest rate caps are based upon Level 2 inputs, which include valuation models as reported by our counterparties. The key inputs for the valuation models are quoted market prices, interest rates and forward yield curves. See Note 7 for details on the interest rate swaps and interest rate caps.
 
Those assets and liabilities measured at fair value on a nonrecurring basis are summarized below:

 
 
Significant Unobservable Inputs
(Level 3)
 
Impairment Charges
 
Valuation Technique
 
 
 
 
 
 
Fair value measurements as of September 24, 2014:
 
 
 
 
 
 
Assets held and used (1)
 
$

 
$
320

 
income approach
 
 
 
 
 
 
 
Fair value measurements as of December 25, 2013:
 
 
 
 
 
 
Assets held and used (1)
 
$
1,198

 
$
4,795

 
income approach

(1)
As of both September 24, 2014 and December 25, 2013, impaired assets related to an underperforming restaurant were written down to their fair value. To determine fair value, we used the income approach, which assumes that the future cash flows reflect current market expectations. These fair value measurements require significant judgment using Level 3 inputs, such as discounted cash flows from operations, which are not observable from the market, directly or indirectly.
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Long-Term Debt
9 Months Ended
Sep. 24, 2014
Debt Disclosure [Abstract] '
Long-Term Debt '
Long-Term Debt

Denny's Corporation and certain of its subsidiaries have a credit facility comprised of a senior secured term loan in an original principal amount of $60 million and a $190 million senior secured revolver (with a $30 million letter of credit sublimit). As of September 24, 2014, we had outstanding term loan borrowings under the credit facility of $55.5 million and outstanding letters of credit under the senior secured revolver of $25.7 million. There were $97.0 million of revolving loans outstanding at September 24, 2014. These balances resulted in availability of $67.3 million under the revolving facility. The weighted-average interest rate under the term loan and on outstanding revolver loans was 2.16% and 2.17% as of September 24, 2014 and December 25, 2013, respectively.

The revolving credit facility includes an accordion feature that would allow us to increase the size of the revolver to $240 million. A commitment fee of 0.35% is paid on the unused portion of the revolving credit facility. Borrowings under the credit facility bear a tiered interest rate based on the Company's consolidated leverage ratio and was initially set at LIBOR plus 200 basis points. The maturity date for the credit facility is April 24, 2018.

The credit facility is guaranteed by the Company and its material subsidiaries and is secured by substantially all of the assets of the Company and its subsidiaries, including the stock of the Company's subsidiaries. It includes negative covenants that are usual for facilities and transactions of this type. The credit facility also includes certain financial covenants with respect to a maximum consolidated leverage ratio, a minimum consolidated fixed charge coverage ratio and maximum capital expenditures.
The term loan under the credit facility requires amortization of the original term loan balance of 5% per year in the first two years (April 2013 through April 2015), 7.5% in the subsequent two years (April 2015 through April 2017) and 10% in the fifth year (April 2017 through April 2018) with the balance due at maturity. We are required to make certain mandatory prepayments under certain circumstances and have the option to make certain prepayments under the credit facility. The credit facility includes events of default (and related remedies, including acceleration and increased interest rates following an event of default) that are usual for facilities and transactions of this type.
During the three quarters ended September 24, 2014, we paid $2.3 million on the term loan under the credit facility.
   
Interest Rate Hedges
We have entered into interest rate hedges that cap the LIBOR rate on borrowings under our credit facility. The 200 basis point LIBOR cap applied to $125 million of borrowings from April 14, 2013 through April 13, 2014 and applies to $150 million of borrowings from April 14, 2014 through March 31, 2015.

We also have entered into interest rate swaps to hedge a portion of the cash flows of our floating rate debt from March 31, 2015 through March 29, 2018. We designated the interest rate swaps as cash flow hedges of our exposure to variability in future cash flows attributable to payments of LIBOR due on a related $150 million notional debt obligation from March 31, 2015 through March 31, 2017 and a related $140 million notional debt obligation from April 1, 2017 through March 29, 2018. Under the terms of the swaps, we will pay an average fixed rate of 3.12% on the notional amounts and receive payments from a counterparty based on the 30-day LIBOR rate. As of September 24, 2014, the fair value of the interest rate swaps was $1.9 million, which is recorded as a component of other noncurrent assets on our Condensed Consolidated Balance Sheets. See Note 13 for the amounts recorded in accumulated other comprehensive loss related to the interest rate swaps.

We believe that our estimated cash flows from operations for 2014, combined with our capacity for additional borrowings under our credit facility, will enable us to meet our anticipated cash requirements and fund capital expenditures over the next twelve months.
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Defined Benefit Plans
9 Months Ended
Sep. 24, 2014
Compensation and Retirement Disclosure [Abstract] '
Defined Benefit Plans '
Defined Benefit Plans
 
The components of net periodic benefit cost were as follows:

 
Quarter Ended
 
Three Quarters Ended
 
September 24, 2014
 
September 25, 2013
 
September 24, 2014
 
September 25, 2013
 
(In thousands)
Pension Plan:
 
 
 
 
 
 
 
Service cost
$
95

 
$
100

 
$
285

 
$
300

Interest cost
775

 
745

 
2,325

 
2,233

Expected return on plan assets
(988
)
 
(1,122
)
 
(2,965
)
 
(3,366
)
Amortization of net loss
231

 
413

 
693

 
1,240

Net periodic benefit cost
$
113

 
$
136

 
$
338

 
$
407

 
 
 
 
 
 
 
 
Other Defined Benefit Plans:
 
 
 
 
 
 
 
Interest cost
$
31

 
$
28

 
$
93

 
$
84

Amortization of net loss
15

 
17

 
46

 
53

Settlement loss recognized
33

 

 
58

 

Net periodic benefit cost
$
79

 
$
45

 
$
197

 
$
137

 
We made contributions of $2.5 million and $2.8 million to our qualified pension plan during the three quarters ended September 24, 2014 and September 25, 2013, respectively. We made contributions of $0.4 million and $0.1 million to our other defined benefit plans during the three quarters ended September 24, 2014 and September 25, 2013, respectively. We expect to contribute less than $0.1 million to our other defined benefit plans over the remainder of fiscal 2014.

Additional minimum pension liability of $18.3 million and $18.7 million is reported as a component of accumulated other comprehensive loss in the Condensed Consolidated Statement of Shareholders’ Equity as of September 24, 2014 and December 25, 2013, respectively.

On September 17, 2014, our Board of Directors approved the termination of the Advantica Pension Plan as of December 31, 2014, effective upon confirmation of compliance with any requirements under the terms of our credit facility. See Note 15. We currently expect that termination of such plan will be completed by the end of fiscal 2015 or early 2016. Settlement gain or loss, if any, resulting from the termination will be recognized at that time. During fiscal 2015 or early 2016, we will be required to make contributions to the Advantica Pension Plan as a result of the termination, dependent upon market conditions and participant elections. We currently expect that these contributions will be between $5 million and $7 million.
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Share-Based Compensation
9 Months Ended
Sep. 24, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] '
Share-Based Compensation '
Share-Based Compensation

Total share-based compensation cost included as a component of net income was as follows:

 
Quarter Ended
 
Three Quarters Ended
 
September 24, 2014
 
September 25, 2013
 
September 24, 2014
 
September 25, 2013
 
(In thousands)
Stock options
$

 
$
136

 
$
52

 
$
433

Performance share awards
446

 
735

 
2,358

 
2,377

Restricted stock units for board members
203

 
182

 
583

 
624

Total share-based compensation
$
649

 
$
1,053

 
$
2,993

 
$
3,434


 
Stock Options

As of September 24, 2014, there was no unrecognized compensation cost related to unvested stock option awards outstanding.
 
Performance Share Awards
 
In February 2014, we granted approximately 0.2 million performance shares and related performance-based target cash awards of $2.2 million to certain employees. In April 2014, we granted less than 0.1 million performance shares and related performance-based target cash awards of $0.3 million to additional employees under the same award plan. As these awards contain a market condition, a Monte Carlo valuation was used to determine the performance shares' grant date fair values of $7.65 per share (February 2014) and $6.80 per share (April 2014) and the payout probabilities of the target cash awards. The awards granted to our named executive officers also contain a performance condition based on certain operating measures for the fiscal year ended December 31, 2014. The performance period is the three year fiscal period beginning December 26, 2013 and ending December 28, 2016. The performance shares and cash awards will vest and be earned (from 0% to 200% of the target award for each such increment) at the end of the performance period based on the total shareholder return of our stock compared to the total shareholder returns of a group of peer companies.

During the three quarters ended September 24, 2014, we made payments of $1.1 million in cash and issued 0.1 million shares of common stock related to performance share awards.
 
As of September 24, 2014, we had approximately $4.6 million of unrecognized compensation cost related to all unvested performance share awards outstanding, which is expected to be recognized over a weighted average of 1.8 years.
 
Restricted Stock Units for Board Members

During the three quarters ended September 24, 2014, we granted 0.1 million restricted stock units (which are equity classified) with a weighted average grant date fair value of $6.56 per unit to non-employee members of our Board of Directors. A director may elect to convert these awards into shares of common stock either on a specific date in the future (while still serving as a member of our Board of Directors) or upon termination as a member of our Board of Directors. During the three quarters ended September 24, 2014, less than 0.1 million restricted stock units were converted into shares of common stock. As of September 24, 2014, we had approximately $0.4 million of unrecognized compensation cost related to all unvested restricted stock unit awards outstanding, which is expected to be recognized over a weighted average of 0.6 years.
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Income Taxes
9 Months Ended
Sep. 24, 2014
Income Tax Disclosure [Abstract] '
Income Taxes '
Income Taxes

The provision for income taxes was $11.5 million and $10.4 million for the three quarters ended September 24, 2014 and September 25, 2013, respectively. For the 2014 period, the difference in the overall effective rate from the U.S. Statutory rate was primarily due to the generation of employment tax credits and two discrete tax items. State job tax credits of $0.3 million were claimed during 2014 for current year’s hiring activity. State job tax credits of $0.5 million were also claimed during the 2014 period resulting from the prior year's hiring activity. In addition, share-based compensation adjustments resulted in an out-of-period tax benefit of $0.5 million. We do not believe the out-of-period adjustment was material to any prior or current year financial statements or on earnings trends.

For the 2013 period, the difference in the overall effective rate from the U.S. Statutory rate was due to state and foreign taxes, employment tax credits, and discrete tax items. The passage of the American Tax Payer Relief Act of 2012 resulted in deferred tax benefits of $0.3 million related to work opportunity credits generated in 2012, which were allowed retroactively during 2013. In addition, state jobs tax credits of $0.8 million were claimed during the 2013 period resulting from the prior year's hiring activity. A valuation allowance of $0.5 million was recorded against certain state jobs tax credits during the 2013 period related to changes in California law enacted during the period.
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Net Income Per Share
9 Months Ended
Sep. 24, 2014
Earnings Per Share [Abstract] '
Net Income Per Share '
Net Income Per Share
 
The amounts used for the basic and diluted net income per share calculation are summarized below:
 
Quarter Ended
 
Three Quarters Ended
 
September 24, 2014
 
September 25, 2013
 
September 24, 2014
 
September 25, 2013
 
(In thousands, except for per share amounts)
Net income
$
8,343

 
$
7,031

 
$
23,047

 
$
20,310

 
 
 
 
 
 
 
 
Weighted average shares outstanding - basic
85,061

 
90,035

 
86,882

 
91,348

Effect of dilutive share-based compensation awards
1,922

 
1,932

 
1,962

 
2,029

Weighted average shares outstanding - diluted
86,983

 
91,967

 
88,844

 
93,377

 
 
 
 
 
 
 
 
Basic net income per share
$
0.10

 
$
0.08

 
$
0.27

 
$
0.22

Diluted net income per share
$
0.10

 
$
0.08

 
$
0.26

 
$
0.22

 
 
 
 
 
 
 
 
Anti-dilutive share-based compensation awards
252

 
331

 
549

 
331

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Supplemental Cash Flow Information
9 Months Ended
Sep. 24, 2014
Supplemental Cash Flow Information [Abstract] '
Supplemental Cash Flow Information '
Supplemental Cash Flow Information

 
Three Quarters Ended
 
September 24, 2014
 
September 25, 2013
 
(In thousands)
Income taxes paid, net
$
3,070

 
$
1,831

Interest paid
$
6,145

 
$
7,121

 
 
 
 
Noncash investing and financing activities:
 
 
 
Issuance of common stock, pursuant to share-based compensation plans
$
1,030

 
$
1,590

Execution of capital leases
$
2,489

 
$
4,038

Treasury stock payable
$
108

 
$
186

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Shareholders' Equity
9 Months Ended
Sep. 24, 2014
Stockholders' Equity Attributable to Parent [Abstract] '
Shareholders' equity '
Shareholders' Equity

Share Repurchase
 
Our credit facility permits the payment of cash dividends and the purchase of Denny’s stock subject to certain limitations. In April 2013, we announced that our Board of Directors approved a share repurchase program authorizing us to repurchase up to an additional 10.0 million shares of our common stock (in addition to prior authorizations). Under this program, we may, from time to time, purchase shares in the open market (including pre-arranged stock trading plans in accordance with the guidelines specified in Rule 10b5-1 under the Securities Exchange Act of 1934) or in privately negotiated transactions, subject to market and business conditions. During the three quarters ended September 24, 2014, we repurchased 4.9 million shares of our common stock for approximately $32.0 million. This brings the total amount repurchased under this program to 5.7 million shares of our common stock for approximately $37.0 million, leaving 4.3 million shares that can be repurchased as of September 24, 2014. Repurchased shares are included as treasury stock in the Condensed Consolidated Balance Sheets and the Condensed Consolidated Statement of Shareholders' Equity.

Accumulated Other Comprehensive Loss

The components of the change in accumulated other comprehensive loss were as follows:

 
Pensions
 
Derivatives
 
Accumulated Other Comprehensive Loss
 
(In thousands)
Balance as of December 25, 2013
$
(18,690
)
 
$
1,848

 
$
(16,842
)
Amortization of net loss (1)
693

 

 
693

Net change in fair value of derivatives

 
(1,178
)
 
(1,178
)
Income tax (expense) benefit related to items of other comprehensive income
(271
)
 
460

 
189

Balance as of September 24, 2014
$
(18,268
)
 
$
1,130

 
$
(17,138
)

(1)
Before-tax amount that was reclassified from accumulated other comprehensive loss and included as a component of pension expense within general and administrative expenses in our Condensed Consolidated Statements of Income during the three quarters ended September 24, 2014. See Note 8 for additional details.
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Commitments and Contingencies
9 Months Ended
Sep. 24, 2014
Commitments and Contingencies Disclosure [Abstract] '
Commitments and Contingencies '
Commitments and Contingencies

We have guarantees related to certain franchisee leases and loans. Payments under these guarantees would result from the inability of a franchisee to fund required payments when due. Through September 24, 2014, no events had occurred that caused us to make payments under the guarantees. There were $10.1 million and $6.1 million of loans outstanding under these programs as of September 24, 2014 and December 25, 2013, respectively. As of September 24, 2014, the maximum amounts payable under the lease guarantee and loan guarantees were $2.0 million and $1.7 million, respectively. As a result of these guarantees, we have recorded liabilities of approximately $0.1 million as of September 24, 2014 and December 25, 2013, which are included as a component of other noncurrent liabilities and deferred credits in our Condensed Consolidated Balance Sheets and other nonoperating expense in our Condensed Consolidated Statements of Income.
There are various claims and pending legal actions against or indirectly involving us, incidental to and arising out of the ordinary course of the business. In the opinion of management, based upon information currently available, the ultimate liability with respect to these proceedings and claims will not materially affect the Company's consolidated results of operations or financial position.
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Subsequent Events (Notes)
9 Months Ended
Sep. 24, 2014
Subsequent Events [Abstract] '
Subsequent Events [Text Block] '
Subsequent Events
 
On October 14, 2014, we amended our credit facility to permit the planned termination of the Advantica Pension Plan and to modify certain financial covenants in connection therewith. See Note 8.
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Summary of Significant Accounting Policies (Policies)
9 Months Ended
Sep. 24, 2014
Accounting Policies [Abstract] '
Accounting standards to be adopted '
Accounting Standards to be Adopted

Discontinued Operations

ASU 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity"

In April 2014, the FASB issued ASU 2014-08, which raises the threshold for a disposal to qualify as a discontinued operation and modifies the related disclosure requirements. Under the new guidance, only disposals resulting in a strategic shift that will have a major effect on an entity's operations and financial results will be reported as discontinued operations. ASU 2014-08 also removes the requirement that an entity not have any significant continuing involvement in the operations of the component after disposal to qualify for reporting of the disposal as a discontinued operation. The guidance is effective for annual and interim periods beginning after December 15, 2014 (our fiscal 2015), with early adoption permitted for any disposal transaction not previously reported. We do not believe the adoption of this guidance will have a material impact on our consolidated financial statements.

Revenue Recognition

ASU 2014-09, "Revenue from Contracts with Customers"

In May 2014, the FASB issued ASU 2014-09, which clarifies the principles used to recognize revenue for all entities. The new guidance requires companies to recognize revenue when it transfers goods or service to a customer in an amount that reflects the consideration to which a company expects to be entitled. ASU 2014-09 is effective for annual and interim periods beginning after December 15, 2016 (our fiscal 2017). The guidance allows for either a "full retrospective" adoption or a "modified retrospective" adoption, however early adoption is not permitted. We are currently evaluating the adoption methods and the impact the adoption of this guidance will have on our consolidated financial statements.

Going Concern

ASU 2014-15, "Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern"

In August 2014, the FASB issued ASU 2014-15, which requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. ASU 2014-15 is effective for annual and interim periods beginning after December 15, 2016 (our fiscal 2017) with early adoption permitted. We do not believe the adoption of this guidance will have a material impact on our consolidated financial statements.

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

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Receivables (Tables)
9 Months Ended
Sep. 24, 2014
Receivables [Abstract] '
Receivables, net '
Receivables were comprised of the following:
 
 
September 24, 2014
 
December 25, 2013
 
(In thousands)
Current assets:
 
 
 
Receivables:
 
 
 
Trade accounts receivable from franchisees
$
9,886

 
$
10,072

Notes receivable from franchisees
1,563

 
1,800

Vendor receivables
1,141

 
2,516

Credit card receivables
1,004

 
2,162

Other
1,454

 
1,002

Allowance for doubtful accounts
(289
)
 
(231
)
Total current receivables, net
$
14,759

 
$
17,321

 
 
 
 
Noncurrent assets (included as a component of other noncurrent assets):
 
 
 
Notes receivable from franchisees
$
382

 
$
766

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Goodwill and Other Intangible Assets (Tables)
9 Months Ended
Sep. 24, 2014
Goodwill and Intangible Assets Disclosure [Abstract] '
Intangible Assets '

Other intangible assets were comprised of the following:
 
 
September 24, 2014
 
December 25, 2013
 
Gross Carrying Amount
 
Accumulated Amortization
 
Gross Carrying Amount
 
Accumulated Amortization
 
(In thousands)
Intangible assets with indefinite lives:
 
 
 
 
 
 
 
Trade names
$
44,061

 
$

 
$
44,055

 
$

Liquor licenses
126

 

 
126

 

Intangible assets with definite lives:
 
 
 
 
 
 
 
Franchise and license agreements
22,406

 
21,146

 
31,248

 
29,007

Reacquired franchise rights
1,857

 
621

 
1,857

 
354

Intangible assets
$
68,450

 
$
21,767

 
$
77,286

 
$
29,361

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Operating (Gains), Losses and Other Charges, Net (Tables)
9 Months Ended
Sep. 24, 2014
Other Income and Expenses [Abstract] '
Operating gains losses and other charges net '
Operating (gains), losses and other charges, net are comprised of the following:
 
 
Quarter Ended
 
Three Quarters Ended
 
September 24, 2014
 
September 25, 2013
 
September 24, 2014
 
September 25, 2013
 
(In thousands)
(Gains) losses on sales of assets and other, net
$
(33
)
 
$
(68
)
 
$
(74
)
 
$
(83
)
Restructuring charges and exit costs
300

 
229

 
775

 
1,005

Impairment charges
320

 

 
348

 
857

Operating (gains), losses and other charges, net
$
587

 
$
161

 
$
1,049

 
$
1,779

Schedule of restructuring charges and exit costs '
Restructuring charges and exit costs were comprised of the following: 
 
 
Quarter Ended
 
Three Quarters Ended
 
September 24, 2014
 
September 25, 2013
 
September 24, 2014
 
September 25, 2013
 
(In thousands)
Exit costs
$
291

 
$
198

 
$
380

 
$
435

Severance and other restructuring charges
9

 
31

 
395

 
570

Total restructuring charges and exit costs
$
300

 
$
229

 
$
775

 
$
1,005

Components of change in accrued exit cost liabilities '
The components of the change in accrued exit cost liabilities are as follows:
 
 
(In thousands)
Balance, December 25, 2013
$
3,149

Exit costs (1)
380

Payments, net of sublease receipts
(1,050
)
Reclassification of certain lease assets and liabilities, net
(95
)
Interest accretion
141

Balance, September 24, 2014
2,525

Less current portion included in other current liabilities
914

Long-term portion included in other noncurrent liabilities
$
1,611


(1)
Included as a component of operating (gains), losses and other charges, net.
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Fair Value of Financial Instruments (Tables)
9 Months Ended
Sep. 24, 2014
Fair Value Disclosures [Abstract] '
Financial assets and liabilities measured at fair value on a recurring basis '
Financial assets and liabilities measured at fair value on a recurring basis are summarized below:
 
 
Total
 
Quoted Prices in Active Markets for Identical Assets/Liabilities
(Level 1)
 
Significant Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
 
Valuation Technique
 
(In thousands)
 
 
Fair value measurements as of September 24, 2014:
 
 
 
 
 
 
 
 
 
Deferred compensation plan investments (1)
$
8,880

 
$
8,880

 
$

 
$

 
market approach
Interest rate swaps (2)
1,854

 

 
1,854

 

 
income approach
Interest rate caps (2)
0

 

 
0

 

 
income approach
Total
$
10,734

 
$
8,880

 
$
1,854

 
$

 
 
 
 
 
 
 
 
 
 
 
 
Fair value measurements as of December 25, 2013:
 
 
 
 
 
 
 
 
 
Deferred compensation plan investments (1)
$
8,168

 
$
8,168

 
$

 
$

 
market approach
Interest rate swaps (2)
3,032

 

 
3,032

 

 
income approach
Interest rate caps (2)
11

 

 
11

 

 
income approach
Total
$
11,211

 
$
8,168

 
$
3,043

 
$

 
 
 
(1)
The fair values of our deferred compensation plan investments are based on the closing market prices of the participants’ elected investments.
(2)
The fair values of our interest rate swaps and interest rate caps are based upon Level 2 inputs, which include valuation models as reported by our counterparties. The key inputs for the valuation models are quoted market prices, interest rates and forward yield curves. See Note 7 for details on the interest rate swaps and interest rate caps.
Assets and liabilities measured at fair value on a nonrecurring basis '
Those assets and liabilities measured at fair value on a nonrecurring basis are summarized below:

 
 
Significant Unobservable Inputs
(Level 3)
 
Impairment Charges
 
Valuation Technique
 
 
 
 
 
 
Fair value measurements as of September 24, 2014:
 
 
 
 
 
 
Assets held and used (1)
 
$

 
$
320

 
income approach
 
 
 
 
 
 
 
Fair value measurements as of December 25, 2013:
 
 
 
 
 
 
Assets held and used (1)
 
$
1,198

 
$
4,795

 
income approach

(1)
As of both September 24, 2014 and December 25, 2013, impaired assets related to an underperforming restaurant were written down to their fair value. To determine fair value, we used the income approach, which assumes that the future cash flows reflect current market expectations. These fair value measurements require significant judgment using Level 3 inputs, such as discounted cash flows from operations, which are not observable from the market, directly or indirectly.

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Defined Benefit Plans (Tables)
9 Months Ended
Sep. 24, 2014
Compensation and Retirement Disclosure [Abstract] '
Components of net periodic benefit cost '
The components of net periodic benefit cost were as follows:

 
Quarter Ended
 
Three Quarters Ended
 
September 24, 2014
 
September 25, 2013
 
September 24, 2014
 
September 25, 2013
 
(In thousands)
Pension Plan:
 
 
 
 
 
 
 
Service cost
$
95

 
$
100

 
$
285

 
$
300

Interest cost
775

 
745

 
2,325

 
2,233

Expected return on plan assets
(988
)
 
(1,122
)
 
(2,965
)
 
(3,366
)
Amortization of net loss
231

 
413

 
693

 
1,240

Net periodic benefit cost
$
113

 
$
136

 
$
338

 
$
407

 
 
 
 
 
 
 
 
Other Defined Benefit Plans:
 
 
 
 
 
 
 
Interest cost
$
31

 
$
28

 
$
93

 
$
84

Amortization of net loss
15

 
17

 
46

 
53

Settlement loss recognized
33

 

 
58

 

Net periodic benefit cost
$
79

 
$
45

 
$
197

 
$
137

 
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Share-Based Compensation (Tables)
9 Months Ended
Sep. 24, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] '
Total share-based compensation '
Total share-based compensation cost included as a component of net income was as follows:

 
Quarter Ended
 
Three Quarters Ended
 
September 24, 2014
 
September 25, 2013
 
September 24, 2014
 
September 25, 2013
 
(In thousands)
Stock options
$

 
$
136

 
$
52

 
$
433

Performance share awards
446

 
735

 
2,358

 
2,377

Restricted stock units for board members
203

 
182

 
583

 
624

Total share-based compensation
$
649

 
$
1,053

 
$
2,993

 
$
3,434

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Net Income Per Share (Tables)
9 Months Ended
Sep. 24, 2014
Earnings Per Share [Abstract] '
Net Income Per Share '
The amounts used for the basic and diluted net income per share calculation are summarized below:
 
Quarter Ended
 
Three Quarters Ended
 
September 24, 2014
 
September 25, 2013
 
September 24, 2014
 
September 25, 2013
 
(In thousands, except for per share amounts)
Net income
$
8,343

 
$
7,031

 
$
23,047

 
$
20,310

 
 
 
 
 
 
 
 
Weighted average shares outstanding - basic
85,061

 
90,035

 
86,882

 
91,348

Effect of dilutive share-based compensation awards
1,922

 
1,932

 
1,962

 
2,029

Weighted average shares outstanding - diluted
86,983

 
91,967

 
88,844

 
93,377

 
 
 
 
 
 
 
 
Basic net income per share
$
0.10

 
$
0.08

 
$
0.27

 
$
0.22

Diluted net income per share
$
0.10

 
$
0.08

 
$
0.26

 
$
0.22

 
 
 
 
 
 
 
 
Anti-dilutive share-based compensation awards
252

 
331

 
549

 
331

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Supplemental Cash Flow Information (Tables)
9 Months Ended
Sep. 24, 2014
Supplemental Cash Flow Information [Abstract] '
Supplemental Cash Flow Information '
 
Three Quarters Ended
 
September 24, 2014
 
September 25, 2013
 
(In thousands)
Income taxes paid, net
$
3,070

 
$
1,831

Interest paid
$
6,145

 
$
7,121

 
 
 
 
Noncash investing and financing activities:
 
 
 
Issuance of common stock, pursuant to share-based compensation plans
$
1,030

 
$
1,590

Execution of capital leases
$
2,489

 
$
4,038

Treasury stock payable
$
108

 
$
186

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Accumulated other comprehensive loss (Tables)
9 Months Ended
Sep. 24, 2014
Statement of Comprehensive Income [Abstract] '
Components of accumulated other comprehensive loss '
The components of the change in accumulated other comprehensive loss were as follows:

 
Pensions
 
Derivatives
 
Accumulated Other Comprehensive Loss
 
(In thousands)
Balance as of December 25, 2013
$
(18,690
)
 
$
1,848

 
$
(16,842
)
Amortization of net loss (1)
693

 

 
693

Net change in fair value of derivatives

 
(1,178
)
 
(1,178
)
Income tax (expense) benefit related to items of other comprehensive income
(271
)
 
460

 
189

Balance as of September 24, 2014
$
(18,268
)
 
$
1,130

 
$
(17,138
)

(1)
Before-tax amount that was reclassified from accumulated other comprehensive loss and included as a component of pension expense within general and administrative expenses in our Condensed Consolidated Statements of Income during the three quarters ended September 24, 2014. See Note 8 for additional details.
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Introduction and Basis of Presentation (Details)
Sep. 24, 2014
restaurant
Franchisor Disclosure [Line Items] '
Number of restaurants 1,689
Franchised/licensed restaurants [Member] '
Franchisor Disclosure [Line Items] '
Number of restaurants 1,529
Company restaurants [Member] '
Franchisor Disclosure [Line Items] '
Number of restaurants 160
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Receivables (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 24, 2014
Dec. 25, 2013
Receivables [Abstract] ' '
Trade accounts receivable from franchisees, gross, current $ 9,886 $ 10,072
Notes receivable from franchisees, gross, current 1,563 1,800
Allowance for doubtful accounts (289) (231)
Total current receivables, net 14,759 17,321
Noncurrent assets (included as a component of other noncurrent assets): ' '
Notes receivable from franchisees, noncurrent 382 766
Vendor receivables [Member] ' '
Receivables [Abstract] ' '
Other receivables, gross, current 1,141 2,516
Credit card receivables [Member] ' '
Receivables [Abstract] ' '
Other receivables, gross, current 1,004 2,162
Other [Member] ' '
Receivables [Abstract] ' '
Other receivables, gross, current $ 1,454 $ 1,002
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Goodwill and Other Intangible Assets (Details) (USD $)
9 Months Ended
Sep. 24, 2014
Dec. 25, 2013
Goodwill and Intangible Assets [Line Items] ' '
Goodwill $ 31,451,000 $ 31,451,000
Intangible assets 68,450,000 77,286,000
Intangible assets with indefinite lives [Abstract] ' '
Gross carrying amount - Trade names 44,061,000 44,055,000
Gross carrying amount - Liquor licenses 126,000 126,000
Intangible assets with definite lives [Abstract] ' '
Accumulated amortization 21,767,000 29,361,000
Franchise and license agreements [Member] ' '
Intangible assets with definite lives [Abstract] ' '
Gross carrying amount 22,406,000 31,248,000
Accumulated amortization 21,146,000 29,007,000
Decrease in franchise and license agreements 8,800,000 '
Reacquired franchise rights [Member] ' '
Intangible assets with definite lives [Abstract] ' '
Gross carrying amount 1,857,000 1,857,000
Accumulated amortization $ 621,000 $ 354,000
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Operating (Gains), Losses and Other Charges, Net (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 24, 2014
Sep. 25, 2013
Sep. 24, 2014
Sep. 25, 2013
Other Income and Expenses [Abstract] ' ' ' '
(Gains) losses on sales of assets and other, net $ (33) $ (68) $ (74) $ (83)
Restructuring charges and exit costs 300 229 775 1,005
Impairment charges 320 0 348 857
Operating (gains), losses and other charges, net 587 161 1,049 1,779
Restructuring Charges [Abstract] ' ' ' '
Exit costs 291 198 380 [1] 435
Severance and other restructuring charges 9 31 395 570
Total restructuring charges and exit costs 300 229 775 1,005
Restructuring Reserve [Roll Forward] ' ' ' '
Balance, December 25, 2013 ' ' 3,149 '
Exit costs (1) 291 198 380 [1] 435
Payments, net of sublease receipts ' ' (1,050) '
Reclassification of certain lease assets and liabilities, net ' ' (95) '
Interest accretion ' ' 141 '
Balance, September 24, 2014 2,525 ' 2,525 '
Less current portion included in other current liabilities 914 ' 914 '
Long-term portion included in other noncurrent liabilities $ 1,611 ' $ 1,611 '
[1] Included as a component of operating (gains), losses and other charges, net.
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Fair Value of Financial Instruments (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 24, 2014
Dec. 25, 2013
Recurring [Member] ' '
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] ' '
Total $ 10,734 $ 11,211
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] ' '
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] ' '
Total 8,880 8,168
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] ' '
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] ' '
Total 1,854 3,043
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] ' '
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] ' '
Total 0 0
Recurring [Member] | Deferred compensation plan investments [Member] ' '
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] ' '
Deferred compensation plan investments 8,880 [1] 8,168 [1]
Valuation technique 'market approach 'market approach
Recurring [Member] | Deferred compensation plan investments [Member] | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] ' '
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] ' '
Deferred compensation plan investments 8,880 [1] 8,168 [1]
Recurring [Member] | Deferred compensation plan investments [Member] | Significant Other Observable Inputs (Level 2) [Member] ' '
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] ' '
Deferred compensation plan investments 0 [1] 0 [1]
Recurring [Member] | Deferred compensation plan investments [Member] | Significant Unobservable Inputs (Level 3) [Member] ' '
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] ' '
Deferred compensation plan investments 0 [1] 0 [1]
Recurring [Member] | Interest rate swaps [Member] ' '
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] ' '
Interest rate swaps and interest rate caps 1,854 [2] 3,032 [2]
Valuation technique 'income approach 'income approach
Recurring [Member] | Interest rate swaps [Member] | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] ' '
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] ' '
Interest rate swaps and interest rate caps 0 [2] 0 [2]
Recurring [Member] | Interest rate swaps [Member] | Significant Other Observable Inputs (Level 2) [Member] ' '
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] ' '
Interest rate swaps and interest rate caps 1,854 [2] 3,032 [2]
Recurring [Member] | Interest rate swaps [Member] | Significant Unobservable Inputs (Level 3) [Member] ' '
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] ' '
Interest rate swaps and interest rate caps 0 [2] 0 [2]
Recurring [Member] | Interest rate caps [Member] ' '
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] ' '
Interest rate swaps and interest rate caps 0 [2] 11 [2]
Valuation technique 'income approach 'income approach
Recurring [Member] | Interest rate caps [Member] | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) [Member] ' '
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] ' '
Interest rate swaps and interest rate caps 0 [2] 0 [2]
Recurring [Member] | Interest rate caps [Member] | Significant Other Observable Inputs (Level 2) [Member] ' '
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] ' '
Interest rate swaps and interest rate caps 0 [2] 11 [2]
Recurring [Member] | Interest rate caps [Member] | Significant Unobservable Inputs (Level 3) [Member] ' '
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] ' '
Interest rate swaps and interest rate caps 0 [2] 0 [2]
Nonrecurring [Member] | Assets held and used [Member] ' '
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] ' '
Impairment of long-lived assets held-for-use 320 4,795
Valuation technique 'income approach 'income approach
Nonrecurring [Member] | Assets held and used [Member] | Significant Unobservable Inputs (Level 3) [Member] ' '
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] ' '
Assets held and used $ 0 $ 1,198
[1] The fair values of our deferred compensation plan investments are based on the closing market prices of the participants’ elected investments.
[2] The fair values of our interest rate swaps and interest rate caps are based upon Level 2 inputs, which include valuation models as reported by our counterparties. The key inputs for the valuation models are quoted market prices, interest rates and forward yield curves. See Note 7 for details on the interest rate swaps and interest rate caps.
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Long-Term Debt (Details) (USD $)
9 Months Ended
Sep. 24, 2014
Dec. 25, 2013
Line of Credit Facility [Line Items] ' '
Weighted-average interest rate (in hundredths) 2.16% 2.17%
Maturity date Apr 24, 2018 '
Secured Debt [Member] ' '
Line of Credit Facility [Line Items] ' '
Term loan, original principal amount 60,000,000 '
Outstanding amount under credit facility 55,500,000 '
Basis spread on variable rate debt 2.00% '
Debt Instrument, periodic amortization, principal, years one and two 5.00% '
Debt Instrument, periodic amortization, principal, years three and four 7.50% '
Debt Instrument, periodic amortization, principal, year five 10.00% '
Repayments of term loan under the credit facility 2,300,000 '
Senior secured revolver [Member] ' '
Line of Credit Facility [Line Items] ' '
Line of credit facility, current borrowing capacity 190,000,000 '
Outstanding amount under credit facility 97,000,000 '
Availability under the revolving facility 67,300,000 '
Accordion feature that allows increase in size of facility 240,000,000 '
Commitment fee for unused portion of revolving credit facility (in hundredths) 0.35% '
Letter of Credit [Member] ' '
Line of Credit Facility [Line Items] ' '
Line of credit facility, current borrowing capacity 30,000,000 '
Outstanding amount of letters of credit 25,700,000 '
Interest Rate Cap [Member] | Interest Rate Cap 2013-2014 [Member] ' '
Line of Credit Facility [Line Items] ' '
Interest rate cap, basis spread on variable rate (percent) 2.00% '
Derivative, notional amount 125,000,000 '
Interest Rate Cap [Member] | Interest Rate Cap 2014-2015 [Member] ' '
Line of Credit Facility [Line Items] ' '
Interest rate cap, basis spread on variable rate (percent) 2.00% '
Derivative, notional amount 150,000,000 '
Interest Rate Swap [Member] ' '
Line of Credit Facility [Line Items] ' '
Fair value of interest rate swaps 1,854,000 '
Interest Rate Swap [Member] | Interest Rate Swaps 2015-2017 [Member] ' '
Line of Credit Facility [Line Items] ' '
Derivative, notional amount 150,000,000 '
Average fixed interest rate on interest rate swaps 3.12% '
Interest Rate Swap [Member] | Interest Rate Swaps 2017-2018 [Member] ' '
Line of Credit Facility [Line Items] ' '
Derivative, notional amount 140,000,000 '
Average fixed interest rate on interest rate swaps 3.12% '
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Defined Benefit Plans (Details) (USD $)
Sep. 24, 2014
Dec. 25, 2013
Sep. 24, 2014
Pension Plan [Member]
Sep. 25, 2013
Pension Plan [Member]
Sep. 24, 2014
Pension Plan [Member]
Sep. 25, 2013
Pension Plan [Member]
Sep. 24, 2014
Other Defined Benefit Plans [Member]
Sep. 25, 2013
Other Defined Benefit Plans [Member]
Sep. 24, 2014
Other Defined Benefit Plans [Member]
Sep. 25, 2013
Other Defined Benefit Plans [Member]
Sep. 24, 2014
Minimum [Member]
Pension Plan [Member]
Sep. 24, 2014
Maximum [Member]
Pension Plan [Member]
Components of net periodic benefit cost [Abstract] ' ' ' ' ' ' ' ' ' ' ' '
Service cost ' ' $ 95,000 $ 100,000 $ 285,000 $ 300,000 ' ' ' ' ' '
Interest cost ' ' 775,000 745,000 2,325,000 2,233,000 31,000 28,000 93,000 84,000 ' '
Expected return on plan assets ' ' (988,000) (1,122,000) (2,965,000) (3,366,000) ' ' ' ' ' '
Amortization of net loss ' ' 231,000 413,000 693,000 1,240,000 15,000 17,000 46,000 53,000 ' '
Settlement loss recognized ' ' ' ' ' ' 33,000 0 58,000 0 ' '
Net periodic benefit cost ' ' 113,000 136,000 338,000 407,000 79,000 45,000 197,000 137,000 ' '
Maximum contributions made to qualified pension plan and other defined benefit plans ' ' ' ' 2,500,000 2,800,000 ' ' 400,000 100,000 ' '
Maximum expected additional contributions to be made to other defined benefit plans ' ' ' ' ' ' ' ' 100,000 ' ' '
Additional minimum pension liability 18,300,000 18,700,000 ' ' ' ' ' ' ' ' ' '
Expected additional contributions to be made to qualified pension plan ' ' ' ' ' ' ' ' ' ' $ 5,000,000 $ 7,000,000
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Share-Based Compensation (Details) (USD $)
Share data in Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 24, 2014
Sep. 25, 2013
Sep. 24, 2014
Sep. 25, 2013
Total share-based compensation [Abstract] ' ' ' '
Total share-based compensation $ 649,000 $ 1,053,000 $ 2,993,000 $ 3,434,000
Stock options [Member] ' ' ' '
Total share-based compensation [Abstract] ' ' ' '
Total share-based compensation 0 136,000 52,000 433,000
Unrecognized compensation cost [Abstract] ' ' ' '
Unrecognized compensation cost related to unvested stock option awards outstanding 0 ' 0 '
Performance shares [Member] ' ' ' '
Total share-based compensation [Abstract] ' ' ' '
Total share-based compensation 446,000 735,000 2,358,000 2,377,000
Restricted Stock Units [Abstract] ' ' ' '
Performance period ' ' '3 years '
Cash payments ' ' 1,100,000 '
Maximum common stock shares issued (in shares) ' ' 0.1 '
Unrecognized compensation cost [Abstract] ' ' ' '
Unrecognized compensation cost related to unvested performance share awards outstanding 4,600,000 ' 4,600,000 '
Unrecognized compensation cost, expected weighted average period ' ' '1 year 9 months 11 days '
Restricted stock units for board members [Member] ' ' ' '
Total share-based compensation [Abstract] ' ' ' '
Total share-based compensation 203,000 182,000 583,000 624,000
Restricted Stock Units [Abstract] ' ' ' '
Equity awards granted (in shares) ' ' 0.1 '
Equity awards, grant date fair value (in dollars per share) ' ' $ 6.56 '
Maximum common stock shares issued (in shares) ' ' 0.1 '
Unrecognized compensation cost [Abstract] ' ' ' '
Unrecognized compensation cost related to unvested performance share awards outstanding 400,000 ' 400,000 '
Unrecognized compensation cost, expected weighted average period ' ' '0 years 7 months 0 days '
Performance award granted February 2014 [Member] | Performance shares [Member] ' ' ' '
Restricted Stock Units [Abstract] ' ' ' '
Equity awards granted (in shares) ' ' 0.2 '
Employee performance based target cash awards ' ' 2,200,000 '
Equity awards, grant date fair value (in dollars per share) ' ' $ 7.65 '
Performance award granted April 2014 [Member] | Performance shares [Member] ' ' ' '
Restricted Stock Units [Abstract] ' ' ' '
Equity awards granted (in shares) ' ' 0.1 '
Employee performance based target cash awards ' ' $ 300,000 '
Equity awards, grant date fair value (in dollars per share) ' ' $ 6.8 '
Minimum [Member] | Performance shares [Member] ' ' ' '
Restricted Stock Units [Abstract] ' ' ' '
Minimum percentage of target awards to be earned (in hundredths) ' ' 0.00% '
Maximum [Member] | Performance shares [Member] ' ' ' '
Restricted Stock Units [Abstract] ' ' ' '
Minimum percentage of target awards to be earned (in hundredths) ' ' 200.00% '
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Income Taxes (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 24, 2014
Sep. 25, 2013
Sep. 24, 2014
Sep. 25, 2013
Income Tax Disclosure [Abstract] ' ' ' '
Provision for income taxes $ 4,115,000 $ 4,318,000 $ 11,464,000 $ 10,424,000
State job tax credits, current year's hiring activity ' ' 300,000 '
State job tax credits, prior year's hiring activity ' ' 500,000 800,000
Tax adjustment expense (benefit) ' ' (500,000) '
Deferred tax expense (benefit) ' ' ' (300,000)
Valuation allowance recorded against certain state jobs tax credits ' ' ' $ 500,000
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Net Income Per Share (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 24, 2014
Sep. 25, 2013
Sep. 24, 2014
Sep. 25, 2013
Earnings Per Share [Abstract] ' ' ' '
Net income $ 8,343 $ 7,031 $ 23,047 $ 20,310
Weighted average shares outstanding - basic (in shares) 85,061 90,035 86,882 91,348
Effect of dilutive share-based compensation awards 1,922 1,932 1,962 2,029
Weighted average shares outstanding - diluted (in shares) 86,983 91,967 88,844 93,377
Basic net income per share $ 0.1 $ 0.08 $ 0.27 $ 0.22
Diluted net income per share $ 0.1 $ 0.08 $ 0.26 $ 0.22
Antidilutive share-based compensation awards (in shares) 252 331 549 331
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Supplemental Cash Flow Information (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 24, 2014
Sep. 25, 2013
Supplemental Cash Flow Information [Abstract] ' '
Income taxes paid, net $ 3,070 $ 1,831
Interest paid 6,145 7,121
Noncash investing and financing activities: ' '
Issuance of common stock, pursuant to share-based compensation plans 1,030 1,590
Execution of capital leases 2,489 4,038
Treasury stock payable $ 108 $ 186
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Share Repurchase (Details) (USD $)
9 Months Ended
Sep. 24, 2014
Class of Stock Disclosures [Abstract] '
Additional number of shares approved under stock repurchase program (in shares) 10,000,000
Purchase of treasury stock (in shares) 4,871,000
Purchase of treasury stock $ 31,960,000
Number of accumulated shares repurchased (in shares) 5,700,000
Value of shares repurchased $ 37,000,000
Remaining number of shares approved under stock repurchase program (in shares) 4,300,000
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Components of accumulated other comprehensive loss (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 24, 2014
Components of Change in Accumulated Other Comprehensive Income (Loss) [Roll Forward] '
Balance as of December 25, 2013 $ (16,842)
Amortization of net loss, before tax 693 [1]
Net change in fair value of derivatives, before tax (1,178)
Income tax (expense) benefit related to items of other comprehensive income 189
Balance as of September 24, 2014 (17,138)
Pensions [Member] '
Components of Change in Accumulated Other Comprehensive Income (Loss) [Roll Forward] '
Balance as of December 25, 2013 (18,690)
Amortization of net loss, before tax 693 [1]
Income tax (expense) benefit related to items of other comprehensive income (271)
Balance as of September 24, 2014 (18,268)
Derivatives [Member] '
Components of Change in Accumulated Other Comprehensive Income (Loss) [Roll Forward] '
Balance as of December 25, 2013 1,848
Net change in fair value of derivatives, before tax (1,178)
Income tax (expense) benefit related to items of other comprehensive income 460
Balance as of September 24, 2014 $ 1,130
[1] Before-tax amount that was reclassified from accumulated other comprehensive loss and included as a component of pension expense within general and administrative expenses in our Condensed Consolidated Statements of Income during the three quarters ended September 24, 2014. See Note 8 for additional details.
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Commitments and Contingencies Commitments and Contingencies (Details) (USD $)
In Millions, unless otherwise specified
Sep. 24, 2014
Dec. 25, 2013
Guarantor Obligations [Line Items] ' '
Guarantee liabilities included as a component of other noncurrent liabilities and deferred credits $ 0.1 $ 0.1
Financial Guarantee [Member] ' '
Guarantor Obligations [Line Items] ' '
Loan amounts outstanding under the loan pools 10.1 6.1
Maximum payments guaranteed 1.7 '
Property Lease Guarantee [Member] ' '
Guarantor Obligations [Line Items] ' '
Maximum payments guaranteed $ 2 '
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