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EX-31.2 - SECTION 302 CFO CERTIFICATION - DineEquity, Incdin-2014930x10qxex312.htm
EX-32.1 - SECTION 906 CEO CERTIFICATION - DineEquity, Incdin-2014930x10qxex321.htm
EX-10.1 - 2011 STOCK INCENTIVE PLAN (INTERNATIONAL EMPLOYEES) - DineEquity, Incdin-2014930x10xqxex101.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________________________ 
FORM 10-Q
 (Mark One)
x      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2014
 OR
o         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from                  to                
 
Commission File Number 001-15283
 ________________________________________________________________
DineEquity, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or
organization)
 
95-3038279
(I.R.S. Employer Identification No.)
 
 
 
450 North Brand Boulevard,
Glendale, California
 
91203-1903
(Address of principal executive offices)
 
(Zip Code)
 
(818) 240-6055
(Registrant’s telephone number, including area code)
 ______________________________________________________________
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x  No o
 Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x  No o
 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer x
 
Accelerated filer o
 
 
 
Non-accelerated filer o
 
Smaller reporting company o
(Do not check if a smaller reporting company)
 
 
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o  No x 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
 
Class
 
Outstanding as of October 24, 2014
Common Stock, $0.01 par value
 
18,954,883
 



DineEquity, Inc. and Subsidiaries
Index
 
 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

1


PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements.
DineEquity, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
 
 
September 30,
2014
 
December 31, 2013
 
 
(Unaudited)
 
 
Assets
 
 

 
 

Current assets:
 
 

 
 

Cash and cash equivalents
 
$
132,859

 
$
106,011

Receivables, net
 
91,292

 
144,137

Prepaid gift cards
 
41,125

 
49,223

Prepaid income taxes
 

 
4,708

Deferred income taxes
 
32,517

 
23,853

Other current assets
 
10,788

 
3,650

Total current assets
 
308,581

 
331,582

Long-term receivables, net
 
186,079

 
197,153

Property and equipment, net
 
252,673

 
274,295

Goodwill
 
697,470

 
697,470

Other intangible assets, net
 
785,078

 
794,057

Other assets, net
 
112,877

 
110,085

Total assets
 
$
2,342,758

 
$
2,404,642

Liabilities and Stockholders’ Equity
 
 

 
 

Current liabilities:
 
 

 
 

Current maturities of long-term debt
 
$
4,720

 
$
4,720

Accounts payable
 
35,244

 
40,050

Gift card liability
 
100,688

 
171,955

Accrued employee compensation and benefits
 
17,282

 
24,956

Accrued interest payable
 
31,618

 
13,575

Income taxes payable
 
14,829

 

Current maturities of capital lease and financing obligations
 
13,215

 
12,247

Other accrued expenses
 
34,669

 
16,770

Total current liabilities
 
252,265

 
284,273

Long-term debt, net (less current maturities)
 
1,202,759

 
1,203,517

Capital lease obligations (less current maturities)
 
101,832

 
111,707

Financing obligations (less current maturities)
 
42,565

 
48,843

Deferred income taxes
 
328,267

 
341,578

Other liabilities
 
97,695

 
99,545

Total liabilities
 
2,025,383

 
2,089,463

Commitments and contingencies
 


 


Stockholders’ equity:
 
 

 
 

Common stock, $0.01 par value, shares: 40,000,000 authorized; September 30, 2014 - 25,251,933 issued, 18,957,602 outstanding; December 31, 2013 - 25,299,315 issued, 19,040,890 outstanding
 
253

 
253

 Additional paid-in-capital
 
278,213

 
274,202

 Retained earnings
 
352,685

 
336,578

 Accumulated other comprehensive loss
 
(65
)
 
(164
)
Treasury stock, at cost; shares: September 30, 2014 - 6,294,331; December 31, 2013 - 6,258,425
 
(313,711
)
 
(295,690
)
Total stockholders’ equity
 
317,375

 
315,179

Total liabilities and stockholders’ equity
 
$
2,342,758

 
$
2,404,642


 See the accompanying Notes to Consolidated Financial Statements.

2


DineEquity, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income
(In thousands, except per share amounts)
(Unaudited)
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2014
 
2013
 
2014
 
2013
Segment Revenues:
 
 

 
 

 
 
 
 
Franchise and restaurant revenues
 
$
129,334

 
$
127,137

 
$
387,573

 
$
379,619

Rental revenues
 
30,761

 
30,990

 
92,223

 
92,724

Financing revenues
 
2,758

 
3,156

 
10,779

 
10,223

Total segment revenues
 
162,853

 
161,283

 
490,575

 
482,566

Segment Expenses:
 
 

 
 

 
 
 
 
Franchise and restaurant expenses
 
47,570

 
44,091

 
135,403

 
130,875

Rental expenses
 
23,654

 
24,149

 
71,173

 
72,953

Financing expenses
 

 

 
825

 
245

Total segment expenses
 
71,224

 
68,240

 
207,401

 
204,073

Gross segment profit
 
91,629

 
93,043

 
283,174

 
278,493

General and administrative expenses
 
33,835

 
35,331

 
102,836

 
105,004

Interest expense
 
24,984

 
24,979

 
74,895

 
75,230

Amortization of intangible assets
 
3,071

 
3,072

 
9,212

 
9,212

Closure and impairment charges, net
 
192

 
(392
)
 
1,029

 
770

Loss on extinguishment of debt
 
1

 

 
13

 
36

Debt modification costs
 

 

 

 
1,296

(Gain) loss on disposition of assets
 
(205
)
 
(72
)
 
592

 
(326
)
Income before income tax provision
 
29,751

 
30,125

 
94,597

 
87,271

Income tax provision
 
(10,864
)
 
(11,395
)
 
(35,719
)
 
(33,365
)
Net income
 
18,887

 
18,730

 
58,878

 
53,906

Other comprehensive (loss) income, net of tax:
 
 
 
 
 
 
 
 
Adjustment to unrealized loss on available-for-sale investments
 

 

 
107

 

Foreign currency translation adjustment
 
(9
)
 
3

 
(8
)
 
(5
)
Total comprehensive income
 
$
18,878

 
$
18,733

 
$
58,977

 
$
53,901

Net income available to common stockholders:
 
 
 
 

 
 
 
 
Net income
 
$
18,887

 
$
18,730

 
$
58,878

 
$
53,906

Less: Net income allocated to unvested participating restricted stock
 
(279
)
 
(296
)
 
(927
)
 
(925
)
Net income available to common stockholders
 
$
18,608

 
$
18,434

 
$
57,951

 
$
52,981

Net income available to common stockholders per share:
 
 

 
 

 
 
 
 
Basic
 
$
0.99

 
$
0.98

 
$
3.09

 
$
2.80

Diluted
 
$
0.99

 
$
0.97

 
$
3.06

 
$
2.76

Weighted average shares outstanding:
 
 

 
 

 
 
 
 
Basic
 
18,703

 
18,831

 
18,757

 
18,898

Diluted
 
18,890

 
19,085

 
18,964

 
19,166

 
 
 
 
 
 
 
 
 
Dividends declared per common share
 
$
0.75

 
$
0.75

 
$
2.25

 
$
2.25

Dividends paid per common share
 
$
0.75

 
$
0.75

 
$
2.25

 
$
2.25

 


See the accompanying Notes to Consolidated Financial Statements.

3


DineEquity, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 
 
Nine Months Ended
 
 
September 30,
 
 
2014
 
2013
Cash flows from operating activities:
 
 

 
 

Net income
 
$
58,878

 
$
53,906

Adjustments to reconcile net income to cash flows provided by operating activities:
 
 

 
 

Depreciation and amortization
 
26,237

 
26,516

Non-cash interest expense
 
5,021

 
4,635

Deferred income taxes
 
(21,947
)
 
(16,007
)
Non-cash stock-based compensation expense
 
7,432

 
7,081

Tax benefit from stock-based compensation
 
4,008

 
3,001

Excess tax benefit from share-based compensation
 
(4,635
)
 
(1,985
)
Loss (gain) on disposition of assets
 
592

 
(326
)
Debt modification costs
 

 
1,296

Other
 
(1,155
)
 
697

Changes in operating assets and liabilities:
 
 

 
 

Receivables, net
 
54,237

 
41,698

Current income tax receivables and payables
 
19,975

 
7,232

Prepaid expenses and other current assets
 
5,909

 
16,054

Accounts payable
 
(5,657
)
 
2,650

Accrued employee compensation and benefits
 
(7,674
)
 
(4,372
)
Gift card liability
 
(71,268
)
 
(68,493
)
Other accrued expenses
 
32,474

 
29,231

Cash flows provided by operating activities
 
102,427

 
102,814

Cash flows from investing activities:
 
 

 
 

Additions to property and equipment
 
(5,530
)
 
(4,547
)
Proceeds from sale of property and equipment
 
681

 

Principal receipts from notes, equipment contracts and other long-term receivables
 
10,252

 
10,254

Other
 
1

 
282

Cash flows provided by investing activities
 
5,404

 
5,989

Cash flows from financing activities:
 
 
 
 

Repayment of long-term debt
 
(3,600
)
 
(2,400
)
Payment of debt modification costs
 

 
(1,296
)
Principal payments on capital lease and financing obligations
 
(8,484
)
 
(7,515
)
Repurchase of DineEquity common stock
 
(30,006
)
 
(24,663
)
Dividends paid on common stock
 
(42,733
)
 
(43,170
)
Repurchase of restricted stock
 
(2,931
)
 
(3,209
)
Proceeds from stock options exercised
 
7,392

 
5,585

Excess tax benefit from share-based compensation
 
4,635

 
1,985

Change in restricted cash
 
(4,948
)
 
(3,122
)
Other
 
(308
)
 

Cash flows used in financing activities
 
(80,983
)
 
(77,805
)
Net change in cash and cash equivalents
 
26,848

 
30,998

Cash and cash equivalents at beginning of period
 
106,011

 
64,537

Cash and cash equivalents at end of period
 
$
132,859

 
$
95,535

Supplemental disclosures:
 
 

 
 

Interest paid in cash
 
$
62,369

 
$
58,751

Income taxes paid in cash
 
$
34,372

 
$
39,084

 
See the accompanying Notes to Consolidated Financial Statements.

4


DineEquity, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)

1. General
 
The accompanying unaudited consolidated financial statements of DineEquity, Inc. (the “Company”) have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The operating results for the nine months ended September 30, 2014 are not necessarily indicative of the results that may be expected for the twelve months ending December 31, 2014.
 
The consolidated balance sheet at December 31, 2013 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.
 
These consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.
 
2. Basis of Presentation
 
The Company’s fiscal quarters end on the Sunday closest to the last day of each quarter. For convenience, the fiscal quarters of each year are referred to as ending on March 31, June 30, September 30 and December 31. The first quarter of fiscal 2014 began December 30, 2013 and ended on March 30, 2014; the second and third quarters of fiscal 2014 ended on June 29, 2014 and September 28, 2014, respectively. The first quarter of fiscal 2013 began December 31, 2012 and ended on March 31, 2013; the second and third quarters of fiscal 2013 ended on June 30, 2013 and September 29, 2013, respectively.
 
The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries that are consolidated in accordance with U.S. GAAP. All intercompany balances and transactions have been eliminated.
 
The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make assumptions and estimates that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to provisions for doubtful accounts, legal contingencies, income taxes, long-lived assets, and the valuation of goodwill and intangible assets. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.
 
3. Accounting Policies
 
Accounting Standards Adopted in the Current Fiscal Year
 
In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-04, Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date (“ASU 2013-04”). The amendments in ASU 2013-04 require an entity to measure obligations resulting from joint and several liability arrangements as the amount the entity agreed to pay on the basis of the arrangement among its co-obligors plus the amount an entity expects to pay on behalf of co-obligors. ASU 2013-04 also requires an entity to disclose the nature, amount and other information about each obligation or group of similar obligations. The adoption of ASU 2013-04 as of January 1, 2014 did not have an impact on the Company’s consolidated financial statements.

In July 2013, the FASB issued ASU No. 2013-11, Income Taxes - Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”). ASU 2013-11 provides guidance on the financial statement presentation of an unrecognized tax benefit, as either a reduction of a deferred tax asset or as a liability, when a net operating loss carryforward, similar tax loss, or a tax credit carryforward exists. The adoption of ASU 2013-11 as of January 1, 2014 did not have a material impact on the Company's consolidated financial statements.




5

DineEquity, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)

3. Accounting Policies (Continued)

Newly Issued Accounting Standards Not Yet Adopted

In April 2014, the FASB issued ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”). The amendments in ASU 2014-08 change the criteria for the reporting of discontinued operations. Under ASU 2014-08, 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 under current U.S. GAAP 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 Company will be required to apply the provisions of ASU 2014-08 prospectively to all disposals of components beginning with its first fiscal quarter of 2015. Early adoption is permitted for any disposal transaction not previously reported.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. The Company will be required to apply the provisions of ASU 2014-09 beginning with its first fiscal quarter of 2017, either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption; early adoption is not permitted.

The guidance in ASU 2014-09 supersedes nearly all of the existing general revenue recognition guidance under U.S. GAAP as well as most industry-specific revenue recognition guidance, including guidance with respect to revenue recognition by franchisors. The Company believes the recognition of the majority of its revenues, including franchise royalty revenues, sales of IHOP pancake and waffle dry mix and retail sales at company-operated restaurants will not be affected by ASU 2014-09. Additionally, lease rental revenues are not within the scope of ASU 2014-09 guidance. The Company is currently evaluating the effect that ASU 2014-09 will have on its financial statements and related disclosures and which method of adoption will be used.
 
The Company reviewed all other newly issued accounting pronouncements and concluded that they either are not applicable to the Company or are not expected to have a material effect on the Company's consolidated financial statements as a result of future adoption.
 
4. Long-Term Debt
 
Long-term debt consisted of the following components:
 
 
 
 
 
 
September 30, 2014
 
December 31, 2013
 
 
(In millions)
Senior Secured Credit Facility, due October 2017, at a variable interest rate of 3.75% as of September 30, 2014 and December 31, 2013
 
$
463.6

 
$
467.2

Senior Notes due October 2018, at a fixed rate of 9.5%
 
760.8

 
760.8

Discount
 
(16.9
)
 
(19.8
)
Total long-term debt
 
1,207.5

 
1,208.2

Less: current maturities
 
(4.7
)
 
(4.7
)
Long-term debt, less current maturities
 
$
1,202.8

 
$
1,203.5

 
For a description of the respective instruments, refer to Note 7 of the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

Debt Modification Costs
 
In February 2013, the Company entered into Amendment No. 2 (“Amendment No. 2”) to the Credit Agreement under the Senior Secured Credit Facility (the “Credit Agreement”). For a description of Amendment No. 2, refer to Note 7 of the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. Fees of $1.3 million paid to third parties in connection with Amendment No. 2 were included as “Debt modification costs” in the Consolidated Statement of Comprehensive Income for the nine months ended September 30, 2013.

6

DineEquity, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)

4. Long-Term Debt (Continued)

Subsequent Events

See Note 13, Subsequent Events, as to events occurring after September 28, 2014 that impact the Company's long-term debt.
  
5. Stockholders' Equity

Dividends
 
During the nine months ended September 30, 2014, the Company declared and paid quarterly dividends as follows:

Nine months ended September 30, 2014
Declaration date
 
Payment date
 
Dividend per share
 
Total(1)
 
 
 
 
 
 
 
(In millions)
First quarter
February 25, 2014
 
March 28, 2014
 
$
0.75

 
$
14.3

Second quarter
May 28, 2014
 
June 27, 2014
 
0.75

 
14.3

Third quarter
August 4, 2014
 
September 26, 2014
 
0.75

 
14.2

Total
 
 
 
 
$
2.25

 
$
42.8

__________________________________
(1) Includes dividend equivalents paid on restricted stock units 

See Note 13, Subsequent Events, regarding declaration of a fourth quarter 2014 dividend.

Stock Repurchase Program

In February 2013, the Company's Board of Directors approved a stock repurchase authorization of up to $100 million of DineEquity common stock. Under this program, the Company may repurchase shares 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 repurchase program does not require the repurchase of a specific number of shares and may be terminated at any time. During the nine months ended September 30, 2014, the Company repurchased 367,256 shares of common stock at a cost of $30.0 million. As of September 30, 2014, the Company has repurchased a cumulative total of 779,278 shares of common stock under the current Board authorization at a total cost of $59.7 million. The Company may repurchase up to an additional $40.3 million of common stock under the current Board authorization.

See Note 13, Subsequent Events, regarding modification of the stock repurchase authorization.

Treasury Stock

Repurchases of DineEquity 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 nine months ended September 30, 2014, the Company re-issued 331,350 treasury shares at a total FIFO cost of $12.0 million.

6. Income Taxes
 
The Company's effective tax rate was 37.8% for the nine months ended September 30, 2014 as compared to 38.2% for the nine months ended September 30, 2013. The effective tax rate in 2014 was slightly lower primarily due to favorable 2013 state tax return-to-provision adjustments.

 The total gross unrecognized tax benefit as of September 30, 2014 and December 31, 2013 was $3.1 million and $2.7 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 $0.7 million related to settlements with taxing authorities and the lapse of statutes of limitations. For the remaining liability, due to the uncertainties related to these tax matters, the Company is unable to make a reasonably reliable estimate when cash settlement with a taxing authority will occur.

7

DineEquity, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)

6. Income Taxes (Continued)


As of September 30, 2014, accrued interest was $3.7 million and accrued penalties were less than $0.1 million, excluding any related income tax benefits. As of December 31, 2013, accrued interest and penalties were $2.9 million and $0.1 million, respectively, excluding any related income tax benefits. The increase of $0.8 million in accrued interest is primarily related to an increase in unrecognized tax benefits as a result of recent audits by taxing authorities. The Company recognizes interest accrued related to unrecognized tax benefits and penalties as a component of its income tax provision recognized in the Consolidated Statements of Comprehensive Income.

The Company files federal income tax returns and the Company or one of its subsidiaries 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 2008. In the second quarter of 2013, the Internal Revenue Service (“IRS”) issued a Revenue Agent’s Report (“RAR”) related to its examination of the Company’s U.S federal income tax return for the tax years 2008 to 2010. The Company disagrees with a portion of the proposed assessments and has contested them through the IRS administrative appeals procedures. We anticipate the appeals process to continue through the end of 2014. The Company continues to believe that adequate reserves have been provided relating to all matters contained in the tax periods open to examination.


7. Stock-Based Compensation
 
From time to time, the Company has granted nonqualified stock options, restricted stock, cash-settled and stock-settled restricted stock units and performance units to officers, other employees and non-employee directors of the Company. Currently, the Company is authorized to grant nonqualified stock options, stock appreciation rights, restricted stock, cash-settled and stock-settled restricted stock units and performance units to officers, other employees and nonemployee directors under the DineEquity, Inc. 2011 Stock Incentive Plan (the “2011 Plan”). The 2011 Plan was approved by stockholders on May 17, 2011 and permits the issuance of up to 1,500,000 shares of the Company’s common stock. The 2011 Plan will expire in May 2021.
 
The nonqualified stock options generally vest ratably over a three-year period in one-third increments and have a term of ten years from the grant date. Option exercise prices equal the closing price of the Company’s common stock on the New York Stock Exchange on the date of grant. Restricted stock and restricted stock units are issued at no cost to the holder and vest over terms determined by the Compensation Committee of the Company’s Board of Directors, generally three years from the grant date.

The following table summarizes the components of the Company’s stock-based compensation expense included in general and administrative expenses in the Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2014 and 2013:
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2014
 
2013
 
2014
 
2013
 
(In millions)
Total stock-based compensation expense:
 
 
 
 
 
 
 
Equity classified awards expense
$
1.9

 
$
1.2

 
$
7.5

 
$
7.1

Liability classified awards expense (credit)
0.7

 
(0.8
)
 
1.2

 
(0.9
)
Total pre-tax stock-based compensation expense
2.6

 
0.4

 
8.7

 
6.2

Tax benefit
(1.0
)
 
(0.2
)
 
(3.3
)
 
(2.4
)
Total stock-based compensation expense, net of tax
$
1.6

 
$
0.2

 
$
5.4

 
$
3.8

 
As of September 30, 2014, total unrecognized compensation costs of $10.2 million related to restricted stock and restricted stock units and $4.0 million related to stock options are expected to be recognized over a weighted average period of 1.57 years for restricted stock and restricted stock units and 1.47 years for stock options.
 

8

DineEquity, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)

7. Stock-Based Compensation (Continued)

Equity Classified Awards - Stock Options

The estimated fair value of the stock options granted during the nine months ended September 30, 2014 was calculated using a Black-Scholes option pricing model. The following summarizes the assumptions used in the Black-Scholes model:
 
Risk-free interest rate
1.57
%
Weighted average historical volatility
51.1
%
Dividend yield
3.68
%
Expected years until exercise
4.60

Forfeitures
11.0
%
Weighted average fair value of options granted
$26.87
 

Stock option balances as of September 30, 2014 and activity related to stock options for the nine months ended September 30, 2014 were as follows:
 
 
Shares
 
Weighted
Average
Exercise
Price
 
Weighted Average
Remaining
Contractual Term
(in Years)
 
Aggregate
Intrinsic
Value (in Millions)
Outstanding at December 31, 2013
 
775,059

 
$
42.09

 
 
 
 
Granted
 
120,932

 
81.53

 
 
 
 
Exercised
 
(236,692
)
 
31.23

 
 
 
 
Forfeited
 
(14,804
)
 
68.01

 
 
 
 
Outstanding at September 30, 2014
 
644,495

 
52.88

 
6.2
 
$18.2
Vested at September 30, 2014 and Expected to Vest
 
618,897

 
51.88

 
6.1
 
$18.1
Exercisable at September 30, 2014
 
454,011

 
$
43.92

 
5.1
 
$16.9
 
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 third quarter of 2014 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on September 30, 2014. The aggregate intrinsic value will change based on the fair market value of the Company’s common stock and the number of in-the-money options.

Equity Classified Awards - Restricted Stock and Restricted Stock Units

Outstanding balances as of September 30, 2014 and activity related to restricted stock and restricted stock units for the nine months ended September 30, 2014 were as follows:
 
 
Restricted
Stock
 
Weighted
Average
Grant Date
Fair Value
 
Restricted
Stock Units
 
Weighted
Average
Grant Date
Fair Value
Outstanding at December 31, 2013
 
266,252

 
$
58.87

 
47,230

 
$
64.57

Granted
 
94,658

 
81.52

 
13,879

 
81.65

Released
 
(85,981
)
 
52.83

 
(19,487
)
 
70.82

Forfeited
 
(29,397
)
 
66.52

 

 

Outstanding at September 30, 2014
 
245,532

 
$
68.88

 
41,622

 
$
66.92



9

DineEquity, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)

7. Stock-Based Compensation (Continued)

Liability Classified Awards - Restricted Stock Units

The Company previously had issued shares of cash-settled restricted stock units to members of the Board of Directors. Originally, these instruments were expected to be settled in cash and were recorded as liabilities based on the closing price of the Company’s common stock as of each period end. In February 2013, it was determined that, pursuant to the terms of the Plan, these restricted stock units would be settled in shares of common stock and all outstanding restricted stock units were converted to equity classified awards. Prior to the conversion, for nine months ended September 30, 2013, $0.3 million was included in pre-tax stock-based compensation expense for the 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 a multiplier from 0% to 200% of the target award based on the total shareholder return of DineEquity, Inc. common stock compared to the total shareholder returns of a peer group of companies. Although LTIP awards are both denominated and paid only in cash, because the multiplier is based on the price of the Company's common stock, the awards are considered stock-based compensation in accordance with U.S. GAAP and are recorded as liabilities based on the closing price of the Company’s common stock as of each period end. For the three months ended September 30, 2014 and 2013, an expense of $0.7 million and a credit of $0.8 million, respectively, were included in total stock-based compensation expense related to the LTIP awards. For the nine months ended September 30, 2014 and 2013, an expense of $1.2 million and a credit of $1.2 million, respectively, were included in total stock-based compensation expense related to the LTIP awards. At both September 30, 2014 and December 31, 2013, liabilities of $2.8 million related to LTIP awards were included as accrued employee compensation and benefits in the Consolidated Balance Sheets.

8. Segments
 
The Company has four reporting segments: franchise operations, company restaurant operations, rental operations and financing operations.
 
As of September 30, 2014, the franchise operations segment consisted of (i) 1,986 restaurants operated by Applebee’s franchisees in the United States, two U.S. territories and 14 countries outside the United States; and (ii) 1,634 restaurants operated by IHOP franchisees and area licensees in the United States, two U.S. territories and eight countries outside the United States. Franchise operations revenue consists primarily of franchise royalty revenues, sales of proprietary products to franchisees (primarily pancake and waffle dry mixes for the IHOP restaurants), IHOP franchise advertising fees and the portion of the franchise fees allocated to IHOP and Applebee's intellectual property.  Franchise operations expenses include IHOP advertising expenses, the cost of IHOP proprietary products, IHOP and Applebee's pre-opening training expenses and other franchise-related costs.
 
At September 30, 2014, the company restaurant operations segment consisted of 23 Applebee’s company-operated restaurants and 10 IHOP company-operated restaurants, all of which are located in the United States. Company restaurant sales are retail sales at company-operated restaurants. Company restaurant expenses are operating expenses at company-operated restaurants and include food, labor, utilities, rent and other restaurant operating costs.
 
Rental operations revenue includes revenue from operating leases and interest income from direct financing leases. Rental operations expenses are costs of operating leases and interest expense from capital leases on franchisee-operated restaurants. 
Financing operations revenue primarily consists of interest income from the financing of franchise fees and equipment leases and sales of equipment associated with refranchised IHOP restaurants. Financing expenses are primarily the cost of restaurant equipment associated with refranchised IHOP restaurants.
 

10

DineEquity, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)

8. Segments (Continued)

Information on segments and a reconciliation to net income before income taxes for the three and nine months ended September 30, 2014 and 2013 were as follows:
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2014
 
2013
 
2014
 
2013
 
 
(In millions)
Revenues (all from external customers)
 
 

 
 

 
 
 
 
Franchise operations
 
$
114.3

 
$
111.7

 
$
340.6

 
$
331.6

Company restaurants
 
15.0

 
15.4

 
47.0

 
48.1

Rental operations
 
30.8

 
31.0

 
92.2

 
92.7

Financing operations
 
2.8

 
3.2

 
10.8

 
10.2

Total
 
$
162.9

 
$
161.3

 
$
490.6

 
$
482.6

Interest expense
 
 

 
 

 
 
 
 
Company restaurants
 
$
0.1

 
$
0.1

 
$
0.3

 
$
0.3

Rental operations
 
3.6

 
3.8

 
11.2

 
12.0

Corporate
 
25.0

 
25.0

 
74.9

 
75.2

Total
 
$
28.7

 
$
28.9

 
$
86.4

 
$
87.5

Depreciation and amortization
 
 

 
 

 
 
 
 
Franchise operations
 
$
2.6

 
$
2.7

 
$
7.8

 
$
8.1

Company restaurants
 
0.5

 
0.5

 
1.6

 
1.6

Rental operations
 
3.3

 
3.3

 
9.9

 
10.1

Corporate
 
2.3

 
2.4

 
6.9

 
6.7

Total
 
$
8.7

 
$
8.9

 
$
26.2

 
$
26.5

Income before income tax provision
 
 

 
 

 
 
 
 
Franchise operations
 
$
82.1

 
$
83.3

 
$
252.3

 
$
248.8

Company restaurants
 
(0.3
)
 
(0.3
)
 
(0.2
)
 
(0.1
)
Rental operations
 
7.1

 
6.8

 
21.1

 
19.8

Financing operations
 
2.8

 
3.2

 
10.0

 
10.0

Corporate
 
(61.9
)
 
(62.9
)
 
(188.6
)
 
(191.2
)
Total
 
$
29.8

 
$
30.1

 
$
94.6

 
$
87.3


9. Net Income per Share

The computation of the Company's basic and diluted net income per share for the three and nine months ended September 30, 2014 and 2013 was as follows:
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2014
 
2013
 
2014
 
2013
 
(In thousands, except per share data)
Numerator for basic and dilutive income per common share:
 

 
 

 
 
 
 
Net income
$
18,887

 
$
18,730

 
$
58,878

 
$
53,906

Less: Net income allocated to unvested participating restricted stock
(279
)
 
(296
)
 
(927
)
 
(925
)
Net income available to common stockholders - basic
18,608

 
18,434

 
57,951

 
52,981

Effect of unvested participating restricted stock in two-class calculation
1

 
1

 
3

 
3

Net income available to common stockholders - diluted
$
18,609

 
$
18,435

 
$
57,954

 
$
52,984

Denominator:
 

 
 

 
 
 
 
Weighted average outstanding shares of common stock - basic
18,703

 
18,831

 
18,757

 
18,898

Dilutive effect of stock options
187

 
254

 
207

 
268

Weighted average outstanding shares of common stock - diluted
18,890

 
19,085

 
18,964

 
19,166

Net income per common share:
 

 
 

 
 
 
 
Basic
$
0.99

 
$
0.98

 
$
3.09

 
$
2.80

Diluted
$
0.99

 
$
0.97

 
$
3.06

 
$
2.76



11

DineEquity, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)

10. 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, accounts payable and the current portion of long-term debt approximate their carrying amounts due to their short duration.
 
The fair values of non-current financial liabilities at September 30, 2014 and December 31, 2013, determined based on Level 2 inputs, were as follows:
 
 
September 30, 2014
 
December 31, 2013
 
 
Carrying
Amount
 
Fair Value
 
Carrying
Amount
 
Fair Value
 
 
(In millions)
Long-term debt, less current maturities
 
$
1,202.8

 
$
1,275.7

 
$
1,203.5

 
$
1,306.2

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

Lease Guarantees
 
In connection with the sale of Applebee’s restaurants or previous brands to franchisees and other parties, the Company has, in certain cases, guaranteed or has potential continuing liability for lease payments totaling $383.0 million as of September 30, 2014. 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 2014 through 2048. In the event of default, the indemnity and default clauses in the sale or assignment agreements govern the Company's ability to pursue and recover damages incurred.  No material liabilities have been recorded as of September 30, 2014.


12.  Consolidating Financial Information
 
Certain of the Company's subsidiaries have guaranteed the Company's obligations under the Senior Secured Credit Facility. The following presents the condensed consolidating financial information separately for: (i) the parent Company, the issuer of the guaranteed obligations; (ii) the guarantor subsidiaries, on a combined basis, as specified in the Credit Agreement; (iii) the non-guarantor subsidiaries, on a combined basis; (iv) consolidating eliminations and reclassifications; and (v) DineEquity, Inc. and Subsidiaries on a consolidated basis.
 
Each guarantor subsidiary is 100% owned by the Company at the date of each balance sheet presented. The notes are fully and unconditionally guaranteed on a joint and several basis by each guarantor subsidiary. Each entity in the consolidating financial information follows the same accounting policies as described in Note 2 of the Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013.

See Note 13, Subsequent Events, regarding refinancing of the Company's indebtedness.  

12

DineEquity, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)

12. Consolidating Financial Information (Continued)

Supplemental Condensed Consolidating Balance Sheet
September 30, 2014
(In millions(1))
 
 
Parent
 
Combined
Guarantor
Subsidiaries
 
Combined
Non-guarantor
Subsidiaries
 
Eliminations and
Reclassification
 
Consolidated
Assets
 
 

 
 

 
 

 
 

 
 

Current Assets:
 
 

 
 

 
 

 
 

 
 

Cash and cash equivalents
 
$
80.2

 
$
52.3

 
$
0.3

 


 
$
132.9

Receivables, net
 
4.0

 
115.1

 
0.2

 
(28.0
)
 
91.3

Prepaid expenses and other current assets
 
213.8

 
52.7

 

 
(214.6
)
 
51.9

Deferred income taxes
 
(2.2
)
 
34.7

 

 

 
32.5

Intercompany
 
(469.0
)
 
462.6

 
6.4

 


 

Total current assets
 
(173.2
)
 
717.4

 
7.0

 
(242.6
)
 
308.6

Long-term receivables
 

 
186.1

 

 

 
186.1

Property and equipment, net
 
21.6

 
230.0

 
1.0

 

 
252.7

Goodwill
 

 
697.5

 

 

 
697.5

Other intangible assets, net
 

 
785.1

 

 

 
785.1

Other assets, net
 
19.1

 
93.8

 

 

 
112.9

Investment in subsidiaries
 
1,719.6

 

 

 
(1,719.6
)
 

Total assets
 
$
1,587.0

 
$
2,709.9

 
$
8.0

 
$
(1,962.2
)
 
$
2,342.8

Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
 
 
 
 
 
Current maturities of long-term debt
 
$
32.7

 
$

 
$

 
$
(28.0
)
 
$
4.7

Accounts payable
 
3.5

 
31.8

 

 


 
35.2

Accrued employee compensation and benefits
 
11.4

 
5.9

 

 


 
17.3

Gift card liability
 

 
100.7

 

 


 
100.7

Other accrued expenses
 
16.9

 
292.2

 
(0.2
)
 
(214.6
)
 
94.3

Total current liabilities
 
64.5

 
430.6

 
(0.2
)
 
(242.6
)
 
252.3

Long-term debt
 
1,202.8

 

 

 


 
1,202.8

Financing obligations
 

 
42.6

 

 


 
42.6

Capital lease obligations
 

 
101.8

 

 

 
101.8

Deferred income taxes
 
(3.9
)
 
332.5

 
(0.4
)
 


 
328.3

Other liabilities
 
6.2

 
90.3

 
1.2

 


 
97.7

Total liabilities
 
1,269.6

 
997.8

 
0.6

 
(242.6
)
 
2,025.4

Total stockholders’ equity
 
317.5

 
1,712.1

 
7.4

 
(1,719.6
)
 
317.4

Total liabilities and stockholders’ equity
 
$
1,587.0

 
$
2,709.9

 
$
8.0

 
$
(1,962.2
)
 
$
2,342.8

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



13

DineEquity, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)

12. Consolidating Financial Information (Continued)

Supplemental Condensed Consolidating Balance Sheet
December 31, 2013
(In millions(1))
 
 
Parent
 
Combined
Guarantor
Subsidiaries
 
Combined
Non-guarantor
Subsidiaries
 
Eliminations  and
Reclassification
 
Consolidated
Assets
 
 

 
 

 
 

 
 

 
 

Current Assets:
 
 

 
 

 
 

 
 

 
 

Cash and cash equivalents
 
$
50.3

 
$
54.7

 
$
1.0

 
$

 
$
106.0

Receivables, net
 
2.0

 
150.0

 
0.1

 
(8.0
)
 
144.1

Prepaid expenses and other current assets
 
189.2

 
56.1

 

 
(187.7
)
 
57.6

Deferred income taxes
 
(4.1
)
 
28.0

 

 

 
23.9

Intercompany
 
(435.2
)
 
429.4

 
5.8

 

 

Total current assets
 
(197.8
)
 
718.1

 
7.0

 
(195.7
)
 
331.6

Long-term receivables
 

 
197.2

 

 

 
197.2

Property and equipment, net
 
23.5

 
249.7

 
1.0

 

 
274.3

Goodwill
 

 
697.5

 

 

 
697.5

Other intangible assets, net
 

 
794.1

 

 

 
794.1

Other assets, net
 
16.2

 
93.9

 

 

 
110.1

Investment in subsidiaries
 
1,697.6

 

 

 
(1,697.6
)
 

Total assets
 
$
1,539.5

 
$
2,750.4

 
$
8.0

 
$
(1,893.3
)
 
$
2,404.6

Liabilities and Stockholders’ Equity
 
 

 
 

 
 

 
 

 
 

Current Liabilities:
 
 

 
 

 
 

 
 

 
 

Current maturities of long-term debt
 
$
12.7

 
$

 
$

 
$
(8.0
)
 
$
4.7

Accounts payable
 
1.4

 
38.6

 

 

 
40.1

Accrued employee compensation and benefits
 
14.5

 
10.4

 

 

 
25.0

Gift card liability
 

 
172.0

 

 

 
172.0

Other accrued expenses
 
(13.7
)
 
244.1

 

 
(187.7
)
 
42.6

Total current liabilities
 
15.0

 
465.0

 

 
(195.7
)
 
284.3

Long-term debt
 
1,203.5

 

 

 

 
1,203.5

Financing obligations
 

 
48.8

 

 

 
48.8

Capital lease obligations
 

 
111.7

 

 

 
111.7

Deferred income taxes
 
(0.3
)
 
342.1

 
(0.3
)
 

 
341.6

Other liabilities
 
5.9

 
92.7

 
0.9

 

 
99.5

Total liabilities
 
1,224.2

 
1,060.4

 
0.6

 
(195.7
)
 
2,089.5

Total stockholders’ equity
 
315.3

 
1,690.0

 
7.4

 
(1,697.6
)
 
315.2

Total liabilities and stockholders’ equity
 
$
1,539.5

 
$
2,750.4

 
$
8.0

 
$
(1,893.3
)
 
$
2,404.6

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











14

DineEquity, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)

12. Consolidating Financial Information (Continued)

Supplemental Condensed Consolidating Statement of Comprehensive Income
For the Three Months Ended September 30, 2014
(In millions(1))
 
 
Parent
 
Combined
Guarantor
Subsidiaries
 
Combined
Non-guarantor
Subsidiaries
 
Eliminations  and
Reclassification
 
Consolidated
Revenues
 
 

 
 

 
 

 
 

 
 

Franchise and restaurant revenues
 
$
0.7

 
$
128.1

 
$
0.5

 
$

 
$
129.3

Rental revenues
 

 
30.8

 

 

 
30.8

Financing revenues
 

 
2.8

 

 

 
2.8

Total revenue
 
0.7

 
161.6

 
0.5

 

 
162.9

Franchise and restaurant expenses
 
0.7

 
46.9

 

 

 
47.6

Rental expenses
 

 
23.7

 

 

 
23.7

Financing expenses
 

 

 

 

 

General and administrative expenses
 
10.3

 
23.5

 
0.1

 

 
33.8

Interest expense
 
24.7

 
0.3

 

 

 
25.0

Amortization of intangible assets
 

 
3.1

 

 

 
3.1

Closure and impairment charges
 

 
0.1

 
0.1

 

 
0.2

Gain on disposition of assets
 

 
(0.2
)
 

 

 
(0.2
)
Intercompany dividend
 
(44.6
)
 

 

 
44.6

 

Income before income taxes
 
9.7

 
64.3

 
0.4

 
(44.6
)
 
29.8

Benefit (provision) for income taxes
 
9.2

 
(20.1
)
 

 

 
(10.9
)
Net income
 
$
18.9

 
$
44.2

 
$
0.4

 
$
(44.6
)
 
$
18.9

Total comprehensive income
 
$
18.9

 
$
44.2

 
$
0.4

 
$
(44.6
)
 
$
18.9

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

Supplemental Condensed Consolidating Statement of Comprehensive Income
For the Three Months Ended September 30, 2013
(In millions(1))
 
 
Parent
 
Combined
Guarantor
Subsidiaries
 
Combined
Non-guarantor
Subsidiaries
 
Eliminations  and
Reclassification
 
Consolidated
Revenues
 
 

 
 

 
 

 
 

 
 

Franchise and restaurant revenues
 
$
0.7

 
$
126.1

 
$
0.4

 
$

 
$
127.1

Rental revenues
 

 
31.0

 

 

 
31.0

Financing revenues
 

 
3.2

 

 

 
3.2

Total revenue
 
0.7

 
160.2

 
0.4

 

 
161.3

Franchise and restaurant expenses
 
0.6

 
43.5

 

 

 
44.1

Rental expenses
 

 
24.1

 
0.0

 

 
24.2

Financing expenses
 

 

 

 

 

General and administrative expenses
 
9.0

 
26.0

 
0.3

 

 
35.3

Interest expense
 
24.6

 
0.3

 

 

 
25.0

Amortization of intangible assets
 

 
3.1

 

 

 
3.1

Closure and impairment charges, net
 

 
(0.5
)
 
0.1

 

 
(0.4
)
Loss on disposition of assets
 

 
0.1

 
(0.2
)
 

 
(0.1
)
Intercompany dividend
 
(39.2
)
 

 

 
39.2

 

Income before income taxes
 
5.6

 
63.5

 
0.2

 
(39.2
)
 
30.1

Benefit (provision) for income taxes
 
13.1

 
(24.5
)
 

 

 
(11.4
)
Net income
 
$
18.7

 
$
39.0

 
$
0.2

 
$
(39.2
)
 
$
18.7

Total comprehensive income
 
$
18.7

 
$
39.0

 
$
0.2

 
$
(39.2
)
 
$
18.7

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

15

DineEquity, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)

12. Consolidating Financial Information (Continued)

Supplemental Condensed Consolidating Statement of Comprehensive Income
For the Nine Months Ended September 30, 2014
(In millions(1))
 
 
Parent
 
Combined
Guarantor
Subsidiaries
 
Combined
Non-guarantor
Subsidiaries
 
Eliminations  and
Reclassification
 
Consolidated
Revenues
 
 

 
 

 
 

 
 

 
 

Franchise and restaurant revenues
 
$
2.1

 
$
384.3