Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 02, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-15283 | |
Entity Registrant Name | Dine Brands Global, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 95-3038279 | |
Entity Address, Address Line One | 450 North Brand Boulevard, | |
Entity Address, City or Town | Glendale, | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 91203-2346 | |
City Area Code | (818) | |
Local Phone Number | 240-6055 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | DIN | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Small Reporting Company | false | |
Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 15,681,189 | |
Entity Central Index Key | 0000049754 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 263,536 | $ 361,412 |
Receivables, net of allowance of $4,500 (2022) and $4,959 (2021) | 91,888 | 119,968 |
Restricted cash | 49,776 | 47,541 |
Prepaid gift card costs | 25,028 | 28,175 |
Prepaid income taxes | 6,890 | 10,529 |
Other current assets | 12,710 | 6,728 |
Total current assets | 449,828 | 574,353 |
Other intangible assets, net | 534,247 | 539,390 |
Operating lease right-of-use assets | 355,149 | 335,428 |
Goodwill | 251,628 | 251,628 |
Property and equipment, net | 175,265 | 179,411 |
Deferred rent receivable | 46,293 | 50,257 |
Long-term receivables, net of allowance of $5,713 (2022) and $6,897 (2021) | 43,076 | 42,493 |
Non-current restricted cash | 16,400 | 16,400 |
Other non-current assets, net | 9,880 | 10,006 |
Total assets | 1,881,766 | 1,999,366 |
Current liabilities: | ||
Accounts payable | 38,537 | 55,956 |
Gift card liability | 133,874 | 165,530 |
Current maturities of operating lease obligations | 71,663 | 72,079 |
Current maturities of finance lease and financing obligations | 10,662 | 10,693 |
Accrued employee compensation and benefits | 21,202 | 40,785 |
Accrued advertising | 33,574 | 33,752 |
Dividends payable | 8,239 | 6,919 |
Deferred franchise revenue, short-term | 7,077 | 7,246 |
Other accrued expenses | 18,970 | 17,770 |
Total current liabilities | 343,798 | 410,730 |
Long-term debt | 1,280,747 | 1,279,623 |
Operating lease obligations, less current maturities | 338,169 | 320,848 |
Finance lease obligations, less current maturities | 63,562 | 59,625 |
Financing obligations, less current maturities | 29,887 | 31,967 |
Deferred income taxes, net | 75,064 | 76,228 |
Deferred franchise revenue, long-term | 43,873 | 46,100 |
Other non-current liabilities | 15,322 | 17,052 |
Total liabilities | 2,190,422 | 2,242,173 |
Commitments and contingencies | ||
Stockholders’ deficit: | ||
Preferred stock, $1 par value, 10,000,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Common stock, $0.01 par value; shares: 40,000,000 authorized; June 30, 2022 - 24,974,835 issued, 15,823,390 outstanding; December 31, 2021 - 24,992,275 issued, 17,163,946 outstanding | 250 | 250 |
Additional paid-in-capital | 253,213 | 256,189 |
Retained earnings | 68,265 | 35,415 |
Accumulated other comprehensive loss | (63) | (59) |
Treasury stock, at cost; shares: June 30, 2022 - 9,151,445; December 31, 2021 - 7,828,329 | (630,321) | (534,602) |
Total stockholders’ deficit | (308,656) | (242,807) |
Total liabilities and stockholders’ deficit | $ 1,881,766 | $ 1,999,366 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Receivables, allowance for credit loss | $ 4,500 | $ 4,959 |
Long-term receivables, allowance for credit loss | $ 5,713 | $ 6,897 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 40,000,000 | 40,000,000 |
Common stock, shares issued (in shares) | 24,974,835 | 24,992,275 |
Common stock, shares outstanding (in shares) | 15,823,390 | 17,163,946 |
Treasury stock, shares (in shares) | 9,151,445 | 7,828,329 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenues: | ||||
Rental revenues | $ 29,066 | $ 27,382 | $ 57,873 | $ 53,524 |
Total revenues | 237,794 | 233,619 | 468,217 | 437,818 |
Cost of revenues: | ||||
Franchise expenses | 82,269 | 79,257 | 160,301 | 144,200 |
Bad debt credit | (147) | (291) | (446) | (2,284) |
Company restaurant expenses | 37,881 | 34,759 | 75,289 | 67,643 |
Interest expense from finance leases | 746 | 893 | 1,514 | 1,855 |
Other rental expenses | 21,097 | 19,718 | 42,452 | 39,714 |
Total rental expenses | 21,843 | 20,611 | 43,966 | 41,569 |
Financing expenses | 106 | 115 | 213 | 243 |
Total cost of revenues | 142,099 | 134,742 | 279,769 | 253,655 |
Gross profit | 95,695 | 98,877 | 188,448 | 184,163 |
General and administrative expenses | 44,063 | 39,276 | 85,611 | 79,187 |
Interest expense, net | 15,359 | 15,739 | 30,892 | 32,235 |
Closure and impairment charges | 1,457 | 4,581 | ||
Amortization of intangible assets | 2,665 | 2,663 | 5,330 | 5,351 |
(Gain) loss on disposition of assets | (234) | (30) | (1,530) | 137 |
Income before income taxes | 32,531 | 38,658 | 66,688 | 62,672 |
Income tax provision | (8,569) | (9,296) | (17,876) | (7,707) |
Net income | 23,962 | 29,362 | 48,812 | 54,965 |
Other comprehensive income, net of tax: | ||||
Foreign currency translation adjustment | (3) | (1) | (4) | (2) |
Total comprehensive income | 23,959 | 29,361 | 48,808 | 54,963 |
Net income available to common stockholders: | ||||
Net income | 23,962 | 29,362 | 48,812 | 54,965 |
Less: Net income allocated to unvested participating restricted stock | (673) | (657) | (1,273) | (1,431) |
Net income available to common stockholders | $ 23,289 | $ 28,705 | $ 47,539 | $ 53,534 |
Net income available to common stockholders per share: | ||||
Basic (USD per share) | $ 1.45 | $ 1.70 | $ 2.90 | $ 3.21 |
Diluted (USD per share) | $ 1.45 | $ 1.69 | $ 2.90 | $ 3.19 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 16,050 | 16,886 | 16,386 | 16,673 |
Diluted (in shares) | 16,080 | 16,977 | 16,418 | 16,802 |
Franchise Revenue: | ||||
Revenues: | ||||
Revenue from contract with customer | $ 168,259 | $ 166,954 | $ 329,491 | $ 307,930 |
Royalties, franchise fees and other | ||||
Revenues: | ||||
Revenue from contract with customer | 94,148 | 94,630 | 184,497 | 174,721 |
Advertising revenues | ||||
Revenues: | ||||
Revenue from contract with customer | 74,111 | 72,324 | 144,994 | 133,209 |
Company restaurant sales | ||||
Revenues: | ||||
Revenue from contract with customer | 38,194 | 78,927 | 74,143 | |
Financing revenues | ||||
Revenues: | ||||
Revenue from contract with customer | 958 | 1,089 | 1,926 | 2,221 |
Advertising fees | ||||
Revenues: | ||||
Revenue from contract with customer | 74,111 | 72,324 | 144,994 | 133,209 |
Cost of revenues: | ||||
Franchise expenses | 74,111 | 72,324 | 144,994 | 133,209 |
Other franchise expenses | ||||
Cost of revenues: | ||||
Franchise expenses | $ 8,305 | $ 7,224 | $ 15,753 | $ 13,275 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock |
Common stock, beginning balance (in shares) at Dec. 31, 2020 | 16,452,000 | |||||
Stockholders' equity balance, beginning of the period at Dec. 31, 2020 | $ (354,651) | $ 249 | $ 257,625 | $ (55,553) | $ (55) | $ (556,917) |
Treasury stock, beginning of period (in shares) at Dec. 31, 2020 | 8,430,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 54,965 | 54,965 | ||||
Other comprehensive gain (loss) | (2) | (2) | ||||
Reissuance of treasure stock (in shares) | 597,000 | 597,000 | ||||
Reissuance of treasury stock | 22,511 | $ 1 | (1,542) | $ 24,052 | ||
Net use of shares for stock plans (in shares) | 146,000 | |||||
Repurchase of restricted shares for taxes (in shares) | (17,000) | |||||
Repurchase of restricted shares for taxes | (1,403) | (1,403) | ||||
Stock-based compensation | 5,612 | 5,612 | ||||
Tax payments for share settlement of restricted stock units | (9,783) | (9,783) | ||||
Common stock, ending balance (in shares) at Jun. 30, 2021 | 17,178,000 | |||||
Stockholders' equity balance, ending of the period at Jun. 30, 2021 | (282,751) | $ 250 | 250,509 | (588) | (57) | $ (532,865) |
Treasury stock, end of period (in shares) at Jun. 30, 2021 | 7,833,000 | |||||
Common stock, beginning balance (in shares) at Mar. 31, 2021 | 17,142,000 | |||||
Stockholders' equity balance, beginning of the period at Mar. 31, 2021 | (317,402) | $ 250 | 247,498 | (29,950) | (56) | $ (535,144) |
Treasury stock, beginning of period (in shares) at Mar. 31, 2021 | 7,891,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 29,362 | 29,362 | ||||
Other comprehensive gain (loss) | (1) | (1) | ||||
Reissuance of treasure stock (in shares) | 58,000 | 58,000 | ||||
Reissuance of treasury stock | 3,027 | 748 | $ 2,279 | |||
Net use of shares for stock plans (in shares) | (20,000) | |||||
Repurchase of restricted shares for taxes (in shares) | (2,000) | |||||
Repurchase of restricted shares for taxes | (183) | (183) | ||||
Stock-based compensation | 2,518 | 2,518 | ||||
Tax payments for share settlement of restricted stock units | (72) | (72) | ||||
Common stock, ending balance (in shares) at Jun. 30, 2021 | 17,178,000 | |||||
Stockholders' equity balance, ending of the period at Jun. 30, 2021 | $ (282,751) | $ 250 | 250,509 | (588) | (57) | $ (532,865) |
Treasury stock, end of period (in shares) at Jun. 30, 2021 | 7,833,000 | |||||
Common stock, beginning balance (in shares) at Dec. 31, 2021 | 17,163,946 | 17,164,000 | ||||
Stockholders' equity balance, beginning of the period at Dec. 31, 2021 | $ (242,807) | $ 250 | 256,189 | 35,415 | (59) | $ (534,602) |
Treasury stock, beginning of period (in shares) at Dec. 31, 2021 | 7,828,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 48,812 | 48,812 | ||||
Other comprehensive gain (loss) | (4) | (4) | ||||
Purchase of common stock (in shares) | 1,501,000 | 1,501,000 | ||||
Purchase of common stock | $ (104,053) | $ (104,053) | ||||
Reissuance of treasure stock (in shares) | 177,984 | 178,000 | 178,000 | |||
Reissuance of treasury stock | $ 241 | (8,093) | $ 8,334 | |||
Net use of shares for stock plans (in shares) | 14,000 | |||||
Repurchase of restricted shares for taxes (in shares) | (32,000) | |||||
Repurchase of restricted shares for taxes | (2,353) | (2,353) | ||||
Stock-based compensation | 8,327 | 8,327 | ||||
Dividends on common stock | (15,866) | 96 | (15,962) | |||
Tax payments for share settlement of restricted stock units | $ (953) | (953) | ||||
Common stock, ending balance (in shares) at Jun. 30, 2022 | 15,823,390 | 15,823,000 | ||||
Stockholders' equity balance, ending of the period at Jun. 30, 2022 | $ (308,656) | $ 250 | 253,213 | 68,265 | (63) | $ (630,321) |
Treasury stock, end of period (in shares) at Jun. 30, 2022 | 9,151,000 | |||||
Common stock, beginning balance (in shares) at Mar. 31, 2022 | 16,746,000 | |||||
Stockholders' equity balance, beginning of the period at Mar. 31, 2022 | (265,172) | $ 250 | 250,150 | 52,516 | (60) | $ (568,028) |
Treasury stock, beginning of period (in shares) at Mar. 31, 2022 | 8,245,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 23,962 | 23,962 | ||||
Other comprehensive gain (loss) | (3) | (3) | ||||
Purchase of common stock (in shares) | 913,000 | 913,000 | ||||
Purchase of common stock | (62,608) | $ (62,608) | ||||
Reissuance of treasure stock (in shares) | 7,000 | 7,000 | ||||
Reissuance of treasury stock | 0 | (315) | $ 315 | |||
Net use of shares for stock plans (in shares) | (8,000) | |||||
Repurchase of restricted shares for taxes (in shares) | (9,000) | |||||
Repurchase of restricted shares for taxes | (608) | (608) | ||||
Stock-based compensation | 3,986 | 3,986 | ||||
Dividends on common stock | $ (8,213) | (8,213) | ||||
Common stock, ending balance (in shares) at Jun. 30, 2022 | 15,823,390 | 15,823,000 | ||||
Stockholders' equity balance, ending of the period at Jun. 30, 2022 | $ (308,656) | $ 250 | $ 253,213 | $ 68,265 | $ (63) | $ (630,321) |
Treasury stock, end of period (in shares) at Jun. 30, 2022 | 9,151,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 48,812 | $ 54,965 |
Adjustments to reconcile net income to cash flows provided by operating activities: | ||
Non-cash closure and impairment charges | 1,348 | 4,514 |
Depreciation and amortization | 19,969 | 19,976 |
Non-cash stock-based compensation expense | 8,327 | 5,612 |
Non-cash interest expense | 1,436 | 1,427 |
Deferred income taxes | (773) | (10,007) |
Deferred revenue | (2,396) | (4,678) |
(Gain) loss on disposition of assets | (1,530) | 137 |
Other | (2,647) | 2,139 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (1,114) | 4,928 |
Deferred rent receivable | 3,964 | 3,432 |
Current income tax receivables and payables | 3,715 | 5,315 |
Gift card receivables and payables | (8,397) | (3,837) |
Other current assets | (5,983) | (2,036) |
Accounts payable | (9,656) | 6,195 |
Operating lease assets and liabilities | (5,724) | (9,179) |
Accrued employee compensation and benefits | (18,894) | 1,466 |
Accrued advertising | (178) | 31,066 |
Other current liabilities | (400) | (5,419) |
Cash flows provided by operating activities | 29,879 | 106,016 |
Cash flows from investing activities: | ||
Principal receipts from notes, equipment contracts and other long-term receivables | 9,476 | 9,703 |
Net additions to property and equipment | (12,749) | (4,064) |
Proceeds from sale of property and equipment | 3,658 | 946 |
Additions to long-term receivables | (1,069) | 0 |
Other | (93) | (237) |
Cash flows (used in) provided by investing activities | (777) | 6,348 |
Cash flows from financing activities: | ||
Repayment of long-term debt | 0 | (6,500) |
Repayment of revolving credit facility | 0 | (220,000) |
Dividends paid on common stock | (14,588) | 0 |
Repurchase of common stock | (102,394) | 0 |
Principal payments on finance lease obligations | (4,696) | (5,244) |
Proceeds from stock options exercised | 241 | 22,511 |
Repurchase of restricted stock for tax payments upon vesting | (2,353) | (1,403) |
Tax payments for share settlement of restricted stock units | (953) | (9,783) |
Cash flows used in financing activities | (124,743) | (220,419) |
Net change in cash, cash equivalents and restricted cash | (95,641) | (108,055) |
Cash, cash equivalents and restricted cash at beginning of period | 425,353 | 456,053 |
Cash, cash equivalents and restricted cash at end of period | 329,712 | 347,998 |
Supplemental disclosures: | ||
Interest paid in cash | 31,701 | 33,405 |
Income taxes paid in cash | 16,065 | 13,341 |
Non-cash conversion of accounts receivable to notes receivable | $ 0 | $ 1,640 |
General
General | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | General The accompanying unaudited consolidated financial statements of Dine Brands Global, Inc. (the “Company” or “Dine Brands Global”) have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The operating results for the six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the twelve months ending December 31, 2022. The consolidated balance sheet at December 31, 2021 has been derived from the audited consolidated financial statements at that date but does not include all of information and footnotes required by U.S. GAAP for complete financial statements. These consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s fiscal quarters end on the Sunday closest to the last day of each calendar quarter. For convenience, the fiscal quarters of each year are referred to as ending on March 31, June 30, September 30 and December 31. The first fiscal quarter of 2022 began on January 3, 2022 and ended on April 3, 2022; the second fiscal quarter of 2022 ended on July 3, 2022. The first fiscal quarter of 2021 began on January 4, 2021 and ended on April 4, 2021; the second fiscal quarter of 2021 ended on July 4, 2021. The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries that are consolidated in accordance with U.S. GAAP. All intercompany balances and transactions have been eliminated. The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make assumptions and estimates that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities, if any, at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates may include the calculation and assessment of the following: impairment of goodwill, other intangible assets and tangible assets; income taxes; allowance for credit losses on accounts and notes receivables; lease accounting estimates; contingencies; and stock-based compensation. On an ongoing basis, the Company evaluates its estimates based on historical experience, current conditions and various other assumptions that are believed to be reasonable under the circumstances. The Company adjusts such estimates and assumptions when facts and circumstances dictate. Actual results could differ from those estimates. Risks and Uncertainties The Company was subject to risks and uncertainties as a result of the continuing outbreak of a novel strain of coronavirus, designated “COVID-19,” and evolving variants thereof. The extent of the continued impact of the COVID-19 pandemic on the Company's business remains uncertain and difficult to predict, as measures taken in response to and the effect of the pandemic have varied and continue to vary by country, state and municipalities within states. The Company first began to experience impacts from the COVID-19 pandemic in March 2020, as federal, state, local and international governments reacted to the public health crisis by encouraging social distancing and requiring, in varying degrees, restaurant dine-in limitations and other restrictions that largely limited the restaurants of the Company's franchisees and its company-operated restaurants to take-out and delivery sales during the initial stages of the pandemic. Subsequently, government-imposed dine-in restrictions have been relaxed or removed in many of the locations in which the Company operates as incidents of infection decline and vaccination rates increase within the respective governmental jurisdictions. As of June 30, 2022, substantially all domestic Applebee's Neighborhood Grill & Bar ® (“Applebee's”) and International House of Pancakes ® (“IHOP”) were open and operating without government-mandated restrictions. |
Accounting Standards Adopted an
Accounting Standards Adopted and Newly Issued Accounting Standards Not Yet Adopted | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Accounting Standards Adopted and Newly Issued Accounting Standards Not Yet Adopted | Accounting Standards Adopted and Newly Issued Accounting Standards Not Yet Adopted Accounting Standards Adopted in the Current Fiscal Year In July 2021, the Financial Accounting Standards Board (“FASB”) issued guidance which affect lessors with lease contracts that (i) have variable lease payments that do not depend on a reference index or a rate and (ii) would have resulted in the recognition of a selling loss at lease commencement if classified as sales-type or direct financing. The amendments are effective for fiscal years beginning after December 15, 2021. Adoption did not have any material effect on the consolidated financial statements. Additional new accounting guidance became effective for the Company as of the beginning of fiscal 2022 that the Company reviewed and concluded was either not applicable to its operations or had no material effect on its consolidated financial statements in the current or future fiscal years. Newly Issued Accounting Standards Not Yet Adopted In March 2020, with an update in January 2021, the FASB issued guidance which provides optional expedients and exceptions for applying current U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued. The guidance can be adopted immediately and is applicable to contracts entered into on or before December 31, 2022. The Company is currently evaluating its contracts that reference LIBOR and the potential effects of adopting this new guidance. |
Revenue Disclosures
Revenue Disclosures | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Disclosures | Revenue Disclosures Franchise revenue and revenue from company-operated restaurants are recognized in accordance with current guidance for revenue recognition as codified in Accounting Standards Topic 606 (“ASC 606”). Under ASC 606, revenue is recognized upon transfer of control of promised services or goods to customers in an amount that reflects the consideration the Company expects to receive for those services or goods. Franchising Activities The Company owns, franchises and operates the Applebee's concept in the casual dining category of the restaurant industry and the Company owns and franchises the IHOP concept in the family dining category of the restaurant industry. The franchise arrangement for both brands is documented in the form of a franchise agreement and, in most cases, a development agreement. The franchise arrangement between the Company as the franchisor and the franchisee as the customer requires the Company to perform various activities to support the brands that do not directly transfer goods and services to the franchisee, but instead represent a single performance obligation, which is the transfer of the franchise license. The intellectual property subject to the franchise license is symbolic intellectual property as it does not have significant standalone functionality, and substantially all the utility is derived from its association with the Company’s past or ongoing activities. The nature of the Company’s promise in granting the franchise license is to provide the franchisee with access to the respective brand’s symbolic intellectual property over the term of the license. The services provided by the Company are highly interrelated with the franchise license and as such are considered to represent a single performance obligation. The transaction price in a standard franchise arrangement for both brands primarily consists of (a) initial franchise/development fees; (b) continuing franchise fees (royalties); and (c) advertising fees. Since the Company considers the licensing of the franchising right to be a single performance obligation, no allocation of the transaction price is required. All domestic IHOP franchise agreements require franchisees to purchase proprietary pancake and waffle dry mix from the Company. The Company recognizes the primary components of the transaction price as follows: • Franchise and development fees are recognized as revenue ratably on a straight-line basis over the term of the franchise agreement commencing with the restaurant opening date. As these fees are typically received in cash at or near the beginning of the franchise term, the cash received is initially recorded as a contract liability until recognized as revenue over time. • The Company is entitled to royalties and advertising fees based on a percentage of the franchisee's gross sales as defined in the franchise agreement. Royalty and advertising revenue are recognized when the franchisee's reported sales occur. Depending on timing within a fiscal period, the recognition of revenue results in either what is considered a contract asset (unbilled receivable) or once billed, accounts receivable, and are included in “receivables, net” in the Consolidated Balance Sheets. • Revenue from the sale of proprietary pancake and waffle dry mix is recognized in the period in which distributors ship the franchisee's order; recognition of revenue results in an accounts receivable included in “receivables, net” in the Consolidated Balance Sheets. In determining the amount and timing of revenue from contracts with customers, the Company exercises significant judgment with respect to collectability of the amount; however, the timing of recognition does not require significant judgments as it is based on either the term of the franchise agreement, the month of reported sales by the franchisee or the date of product shipment, none of which require estimation. The Company does not incur a significant amount of contract acquisition costs in conducting franchising activities. The Company's franchising arrangements do not contain a significant financing component. Company Restaurant Revenue Sales by company-operated restaurants are recognized when food and beverage items are sold. Company restaurant sales are reported net of sales taxes collected from guests that are remitted to the appropriate taxing authorities. The following table disaggregates franchise revenue by major type for the three and six months ended June 30, 2022 and 2021: Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 (In thousands) Franchise Revenue: Royalties $ 78,006 $ 78,124 $ 153,248 $ 142,401 Advertising fees 74,111 72,324 144,994 133,209 Pancake and waffle dry mix sales and other 14,077 13,525 27,008 24,415 Franchise and development fees 2,065 2,981 4,241 7,905 Total franchise revenue $ 168,259 $ 166,954 $ 329,491 $ 307,930 Accounts and other receivables related to franchise revenues as of June 30, 2022 and December 31, 2021 wer e $65.4 million (net of allowance of $0.7 million) and $66.0 million (net of allowance of $1.1 million), respectively, and were included in receivables, net in the Consolidated Balance Sheets. Changes in the Company's contract liability for deferred franchise and development fees during the six months ended June 30, 2022 were as follows: Deferred Franchise Revenue (short- and long-term) (In thousands) Balance at December 31, 2021 $ 53,346 Recognized as revenue during the six months ended June 30, 2022 (4,075) Fees deferred during the six months ended June 30, 2022 1,679 Balance at June 30, 2022 $ 50,950 The balance of deferred revenue as of June 30, 2022 is expected to be recognized as follows: (In thousands) 2022 (remaining six months) $ 3,539 2023 6,994 2024 6,297 2025 5,516 2026 4,692 Thereafter 23,912 Total $ 50,950 |
Current Expected Credit Losses
Current Expected Credit Losses ("CECL") | 6 Months Ended |
Jun. 30, 2022 | |
Credit Loss [Abstract] | |
Current Expected Credit Losses ("CECL") | Current Expected Credit Losses (“CECL”) The CECL reserve methodology requires companies to measure expected credit losses on financial instruments based on the total estimated amount to be collected over the lifetime of the instrument. Under the CECL model, reserves may be established against financial asset balances even if the risk of loss is remote or has not yet manifested itself. The Company records specific reserves against account balances of franchisees deemed at-risk when a potential loss is likely or imminent as a result of prolonged payment delinquency (greater than 90 days past due) and where notable credit deterioration has become evident. For financial assets that are not currently deemed at-risk, an allowance is recorded based on expected loss rates derived pursuant to the Company's CECL methodology that assesses four components – historical losses, current conditions, reasonable and supportable forecasts, and a reversion to history, if applicable. The Company considers its portfolio segments to be the following: Accounts Receivable (Franchise-Related) Most of the Company’s short-term receivables due from franchisees are derived from royalty, advertising and other franchise-related fees. Gift Card Receivables Gift card receivables consist primarily of amounts due from third-party vendors. Receivables related to gift card sales are subject to seasonality and usually peak around year-end as a result of the December holiday season. Notes Receivable Notes receivable balances primarily relate to the conversion of certain past due Applebee's franchisee accounts receivable to notes receivable, cash loans to franchisees for working capital purposes, a note receivable in connection with the sale of IHOP company restaurants and IHOP franchise fee and other notes. The notes are typically collateralized by the franchise. A significant portion of these notes have specific reserves recorded against them amounting to $9.2 million as of June 30, 2022. Equipment Leases Receivable Equipment leases receivable relate to IHOP franchise development activity prior to 2003 when IHOP typically leased or purchased the restaurant site, built and equipped the restaurant, then franchised the restaurant to a franchisee. Equipment lease contracts are collateralized by the equipment in the restaurant. The estimated fair value of the equipment collateralizing these lease contracts are not deemed to be significant given the very seasoned and mature nature of this portfolio. The weighted average remaining life of the Company’s equipment leases is 4.3 years as of June 30, 2022. Real Estate Leases Receivable Real estate leases receivable relate to IHOP franchise development activity prior to 2003. IHOP provided the financing for leasing or subleasing the site. Real estate leases at June 30, 2022, comprised 62 leases with a weighted average remaining life of 5.8 years, and relate to locations that IHOP is leasing from third parties and subleasing to franchisees. Distributor Receivables Receivables due from distributors are related to the sale of IHOP’s proprietary pancake and waffle dry mix to franchisees through the Company’s network of suppliers and distributors and are included as part of Other receivables. June 30, 2022 December 31, 2021 (In millions) Accounts receivable $ 62.5 $ 63.6 Gift card receivables 6.8 33.4 Notes receivable 17.9 19.7 Financing receivables: Equipment leases receivable 30.2 33.4 Real estate leases receivable 19.4 16.7 Other 8.4 7.6 145.2 174.4 Less: allowance for credit losses (10.2) (11.9) 135.0 162.5 Less: current portion (91.9) (120.0) Long-term receivables $ 43.1 $ 42.5 Changes in the allowance for credit losses during the six months ended June 30, 2022 were as follows: Accounts Receivable Notes receivable, short-term Notes receivable, long-term Lease Receivables Equipment Notes Other (1) Total (In millions) Balance, December 31, 2021 $ 1.0 $ 3.8 $ 6.6 $ 0.2 $ 0.1 $ 0.2 $ 11.9 Bad debt (credit) expense (0.2) 0.8 (1.0) (0.1) 0.1 0.0 (0.4) Advertising provision adjustment 0.0 (0.3) (0.2) — — — (0.5) Write-offs (0.1) (0.5) — — — (0.2) (0.8) Recoveries 0.0 — — — 0.0 — 0.0 Balance, June 30, 2022 $ 0.7 $ 3.8 $ 5.4 $ 0.1 $ 0.2 $ 0.0 $ 10.2 (1) Primarily distributor receivables, gift card receivables and credit card receivables The Company's primary credit quality indicator for all portfolio segments is delinquency. The delinquency status of receivables (other than accounts receivable, gift card receivables and distributor receivables) at June 30, 2022 was as follows: Notes receivable, short-term Notes receivable, long-term Lease Receivables Equipment Notes Other (1) Total (In millions) Current $ 4.6 $ 11.6 $ 19.4 $ 30.2 $ 2.4 $ 68.2 30-59 days 0.0 — — — — 0.0 60-89 days 0.0 — — — — 0.0 90-119 days 0.1 — — — — 0.1 120+ days 1.6 — — — — 1.6 Total $ 6.3 $ 11.6 $ 19.4 $ 30.2 $ 2.4 $ 69.9 (1) Primarily c redit card receivables The year of origination of the Company's notes receivable and financing receivables is as follows: Notes receivable, short and long-term Lease Receivables Equipment Notes Total (In millions) 2022 $ 0.5 $ 6.3 $ — $ 6.8 2021 11.4 2.6 — 14.0 2020 0.5 1.4 — 1.9 2019 0.2 0.8 — 1.0 2018 — — — 0.0 Prior 5.3 8.3 30.2 43.8 Total $ 17.9 $ 19.4 $ 30.2 $ 67.5 |
Lease Disclosures
Lease Disclosures | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Lease Disclosures | Lease Disclosures The Company engages in leasing activity as both a lessee and a lessor. The Company currently leases from third parties the real property on which approximately 540 IHOP franchisee-operated restaurants and one Applebee's franchisee-operated restaurant are located; the Company (as lessor) subleases the property to the franchisees that operate those restaurants. The Company also leases property it owns to the franchisees that operate approximately 50 IHOP restaurants and one Applebee's restaurant. The Company leases from third parties the real property on which 69 Applebee's company-operated restaurants are located. The Company also leases office space for its principal corporate offices in Glendale, California and Pasadena, California and restaurant support centers in Leawood, Kansas and Raleigh, North Carolina. The Company does not have a significant amount of non-real estate leases. The Company's existing leases/subleases related to IHOP restaurants generally provide for an initial term of 20 to 25 years, with most having one or more five-year renewal options. Leases related to Applebee's restaurants generally have an initial term of 10 to 20 years, with renewal terms of five The Company's lease cost for the three and six months ended June 30, 2022 and 2021 was as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In millions) Finance lease cost: Amortization of right-of-use assets $ 1.1 $ 1.1 $ 2.2 $ 2.3 Interest on lease liabilities 1.2 1.4 2.5 2.8 Operating lease cost (1) 21.2 21.0 42.3 42.4 Variable lease cost 1.9 0.5 3.6 0.7 Short-term lease cost 0.0 0.0 0.0 0.0 Sublease income (26.6) (24.9) (53.1) (49.1) Lease (income) cost $ (1.2) $ (0.9) $ (2.5) $ (0.9) (1) Operating lease cost for the three and six months ended June 30, 2021 previously disclosed as $24.7 million and $49.8 million, respectively, were overstated due to the inclusion of certain finance lease activity. The correct operating lease cost for the three and six months ended June 30, 2021 was $21.0 million and $42.4 million, respectively, as reflected in the above table. The overstatement only impacted this note disclosure, and there was no impact to the Consolidated Statement of Comprehensive Income. Future minimum lease payments under noncancelable leases as lessee as of June 30, 2022 were as follows: Finance Operating (In millions) 2022 (remaining six months) $ 7.3 $ 41.9 2023 12.2 68.5 2024 10.6 76.8 2025 9.0 65.1 2026 8.4 56.1 Thereafter 54.6 180.2 Total minimum lease payments 102.1 488.6 Less: interest/imputed interest (28.8) (78.8) Total obligations 73.3 409.8 Less: current portion (9.7) (71.7) Long-term lease obligations $ 63.6 $ 338.2 The weighted average remaining lease term as of June 30, 2022 was 10.0 years for finance leases and 6.6 years for operating leases. The weighted average discount rate as of June 30, 2022 was 9.8% for finance leases and 5.5% for operating leases. During the three and six months ended June 30, 2022 and 2021, the Company made the following cash payments for leases: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In millions) Principal payments on finance lease obligations $ 2.4 $ 2.6 $ 4.7 $ 5.2 Interest payments on finance lease obligations $ 1.2 $ 1.4 $ 2.5 $ 2.8 Payments on operating leases $ 22.8 $ 22.8 $ 45.8 $ 45.8 Variable lease payments $ 1.8 $ 0.3 $ 3.9 $ 0.6 The Company's income from operating leases for the three and six months ended June 30, 2022 and 2021 was as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In millions) Minimum lease payments $ 24.0 $ 23.9 $ 47.8 $ 47.7 Variable lease income 4.6 2.8 8.5 4.4 Total operating lease income $ 28.6 $ 26.7 $ 56.3 $ 52.1 Minimum payments to be received as lessor under noncancelable operating leases as of June 30, 2022 were as follows: (In millions) 2022 (remaining six months) $ 51.4 2023 99.4 2024 90.8 2025 77.9 2026 63.5 Thereafter 139.0 Total minimum rents receivable $ 522.0 The Company's income from real estate leases receivables for the three and six months ended June 30, 2022 and 2021 was as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In millions) Interest income $ 0.4 $ 0.5 $ 0.8 $ 1.1 Variable lease income 0.2 0.2 0.4 0.3 Selling (loss) profit (0.1) — 0.4 — Total real estate lease income $ 0.5 $ 0.7 $ 1.6 $ 1.4 Minimum payments to be received as lessor under noncancelable real estate leases as of June 30, 2022 were as follows: (In millions) 2022 (remaining six months) $ 3.7 2023 4.5 2024 2.3 2025 1.5 2026 1.5 Thereafter 12.2 Total minimum rents receivable 25.7 Less: unearned income (6.3) Total net investment in real estate leases 19.4 Less: current portion (5.3) Long-term investment in real estate leases $ 14.1 |
Lease Disclosures | Lease Disclosures The Company engages in leasing activity as both a lessee and a lessor. The Company currently leases from third parties the real property on which approximately 540 IHOP franchisee-operated restaurants and one Applebee's franchisee-operated restaurant are located; the Company (as lessor) subleases the property to the franchisees that operate those restaurants. The Company also leases property it owns to the franchisees that operate approximately 50 IHOP restaurants and one Applebee's restaurant. The Company leases from third parties the real property on which 69 Applebee's company-operated restaurants are located. The Company also leases office space for its principal corporate offices in Glendale, California and Pasadena, California and restaurant support centers in Leawood, Kansas and Raleigh, North Carolina. The Company does not have a significant amount of non-real estate leases. The Company's existing leases/subleases related to IHOP restaurants generally provide for an initial term of 20 to 25 years, with most having one or more five-year renewal options. Leases related to Applebee's restaurants generally have an initial term of 10 to 20 years, with renewal terms of five The Company's lease cost for the three and six months ended June 30, 2022 and 2021 was as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In millions) Finance lease cost: Amortization of right-of-use assets $ 1.1 $ 1.1 $ 2.2 $ 2.3 Interest on lease liabilities 1.2 1.4 2.5 2.8 Operating lease cost (1) 21.2 21.0 42.3 42.4 Variable lease cost 1.9 0.5 3.6 0.7 Short-term lease cost 0.0 0.0 0.0 0.0 Sublease income (26.6) (24.9) (53.1) (49.1) Lease (income) cost $ (1.2) $ (0.9) $ (2.5) $ (0.9) (1) Operating lease cost for the three and six months ended June 30, 2021 previously disclosed as $24.7 million and $49.8 million, respectively, were overstated due to the inclusion of certain finance lease activity. The correct operating lease cost for the three and six months ended June 30, 2021 was $21.0 million and $42.4 million, respectively, as reflected in the above table. The overstatement only impacted this note disclosure, and there was no impact to the Consolidated Statement of Comprehensive Income. Future minimum lease payments under noncancelable leases as lessee as of June 30, 2022 were as follows: Finance Operating (In millions) 2022 (remaining six months) $ 7.3 $ 41.9 2023 12.2 68.5 2024 10.6 76.8 2025 9.0 65.1 2026 8.4 56.1 Thereafter 54.6 180.2 Total minimum lease payments 102.1 488.6 Less: interest/imputed interest (28.8) (78.8) Total obligations 73.3 409.8 Less: current portion (9.7) (71.7) Long-term lease obligations $ 63.6 $ 338.2 The weighted average remaining lease term as of June 30, 2022 was 10.0 years for finance leases and 6.6 years for operating leases. The weighted average discount rate as of June 30, 2022 was 9.8% for finance leases and 5.5% for operating leases. During the three and six months ended June 30, 2022 and 2021, the Company made the following cash payments for leases: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In millions) Principal payments on finance lease obligations $ 2.4 $ 2.6 $ 4.7 $ 5.2 Interest payments on finance lease obligations $ 1.2 $ 1.4 $ 2.5 $ 2.8 Payments on operating leases $ 22.8 $ 22.8 $ 45.8 $ 45.8 Variable lease payments $ 1.8 $ 0.3 $ 3.9 $ 0.6 The Company's income from operating leases for the three and six months ended June 30, 2022 and 2021 was as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In millions) Minimum lease payments $ 24.0 $ 23.9 $ 47.8 $ 47.7 Variable lease income 4.6 2.8 8.5 4.4 Total operating lease income $ 28.6 $ 26.7 $ 56.3 $ 52.1 Minimum payments to be received as lessor under noncancelable operating leases as of June 30, 2022 were as follows: (In millions) 2022 (remaining six months) $ 51.4 2023 99.4 2024 90.8 2025 77.9 2026 63.5 Thereafter 139.0 Total minimum rents receivable $ 522.0 The Company's income from real estate leases receivables for the three and six months ended June 30, 2022 and 2021 was as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In millions) Interest income $ 0.4 $ 0.5 $ 0.8 $ 1.1 Variable lease income 0.2 0.2 0.4 0.3 Selling (loss) profit (0.1) — 0.4 — Total real estate lease income $ 0.5 $ 0.7 $ 1.6 $ 1.4 Minimum payments to be received as lessor under noncancelable real estate leases as of June 30, 2022 were as follows: (In millions) 2022 (remaining six months) $ 3.7 2023 4.5 2024 2.3 2025 1.5 2026 1.5 Thereafter 12.2 Total minimum rents receivable 25.7 Less: unearned income (6.3) Total net investment in real estate leases 19.4 Less: current portion (5.3) Long-term investment in real estate leases $ 14.1 |
Lease Disclosures | Lease Disclosures The Company engages in leasing activity as both a lessee and a lessor. The Company currently leases from third parties the real property on which approximately 540 IHOP franchisee-operated restaurants and one Applebee's franchisee-operated restaurant are located; the Company (as lessor) subleases the property to the franchisees that operate those restaurants. The Company also leases property it owns to the franchisees that operate approximately 50 IHOP restaurants and one Applebee's restaurant. The Company leases from third parties the real property on which 69 Applebee's company-operated restaurants are located. The Company also leases office space for its principal corporate offices in Glendale, California and Pasadena, California and restaurant support centers in Leawood, Kansas and Raleigh, North Carolina. The Company does not have a significant amount of non-real estate leases. The Company's existing leases/subleases related to IHOP restaurants generally provide for an initial term of 20 to 25 years, with most having one or more five-year renewal options. Leases related to Applebee's restaurants generally have an initial term of 10 to 20 years, with renewal terms of five The Company's lease cost for the three and six months ended June 30, 2022 and 2021 was as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In millions) Finance lease cost: Amortization of right-of-use assets $ 1.1 $ 1.1 $ 2.2 $ 2.3 Interest on lease liabilities 1.2 1.4 2.5 2.8 Operating lease cost (1) 21.2 21.0 42.3 42.4 Variable lease cost 1.9 0.5 3.6 0.7 Short-term lease cost 0.0 0.0 0.0 0.0 Sublease income (26.6) (24.9) (53.1) (49.1) Lease (income) cost $ (1.2) $ (0.9) $ (2.5) $ (0.9) (1) Operating lease cost for the three and six months ended June 30, 2021 previously disclosed as $24.7 million and $49.8 million, respectively, were overstated due to the inclusion of certain finance lease activity. The correct operating lease cost for the three and six months ended June 30, 2021 was $21.0 million and $42.4 million, respectively, as reflected in the above table. The overstatement only impacted this note disclosure, and there was no impact to the Consolidated Statement of Comprehensive Income. Future minimum lease payments under noncancelable leases as lessee as of June 30, 2022 were as follows: Finance Operating (In millions) 2022 (remaining six months) $ 7.3 $ 41.9 2023 12.2 68.5 2024 10.6 76.8 2025 9.0 65.1 2026 8.4 56.1 Thereafter 54.6 180.2 Total minimum lease payments 102.1 488.6 Less: interest/imputed interest (28.8) (78.8) Total obligations 73.3 409.8 Less: current portion (9.7) (71.7) Long-term lease obligations $ 63.6 $ 338.2 The weighted average remaining lease term as of June 30, 2022 was 10.0 years for finance leases and 6.6 years for operating leases. The weighted average discount rate as of June 30, 2022 was 9.8% for finance leases and 5.5% for operating leases. During the three and six months ended June 30, 2022 and 2021, the Company made the following cash payments for leases: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In millions) Principal payments on finance lease obligations $ 2.4 $ 2.6 $ 4.7 $ 5.2 Interest payments on finance lease obligations $ 1.2 $ 1.4 $ 2.5 $ 2.8 Payments on operating leases $ 22.8 $ 22.8 $ 45.8 $ 45.8 Variable lease payments $ 1.8 $ 0.3 $ 3.9 $ 0.6 The Company's income from operating leases for the three and six months ended June 30, 2022 and 2021 was as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In millions) Minimum lease payments $ 24.0 $ 23.9 $ 47.8 $ 47.7 Variable lease income 4.6 2.8 8.5 4.4 Total operating lease income $ 28.6 $ 26.7 $ 56.3 $ 52.1 Minimum payments to be received as lessor under noncancelable operating leases as of June 30, 2022 were as follows: (In millions) 2022 (remaining six months) $ 51.4 2023 99.4 2024 90.8 2025 77.9 2026 63.5 Thereafter 139.0 Total minimum rents receivable $ 522.0 The Company's income from real estate leases receivables for the three and six months ended June 30, 2022 and 2021 was as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In millions) Interest income $ 0.4 $ 0.5 $ 0.8 $ 1.1 Variable lease income 0.2 0.2 0.4 0.3 Selling (loss) profit (0.1) — 0.4 — Total real estate lease income $ 0.5 $ 0.7 $ 1.6 $ 1.4 Minimum payments to be received as lessor under noncancelable real estate leases as of June 30, 2022 were as follows: (In millions) 2022 (remaining six months) $ 3.7 2023 4.5 2024 2.3 2025 1.5 2026 1.5 Thereafter 12.2 Total minimum rents receivable 25.7 Less: unearned income (6.3) Total net investment in real estate leases 19.4 Less: current portion (5.3) Long-term investment in real estate leases $ 14.1 |
Lease Disclosures | Lease Disclosures The Company engages in leasing activity as both a lessee and a lessor. The Company currently leases from third parties the real property on which approximately 540 IHOP franchisee-operated restaurants and one Applebee's franchisee-operated restaurant are located; the Company (as lessor) subleases the property to the franchisees that operate those restaurants. The Company also leases property it owns to the franchisees that operate approximately 50 IHOP restaurants and one Applebee's restaurant. The Company leases from third parties the real property on which 69 Applebee's company-operated restaurants are located. The Company also leases office space for its principal corporate offices in Glendale, California and Pasadena, California and restaurant support centers in Leawood, Kansas and Raleigh, North Carolina. The Company does not have a significant amount of non-real estate leases. The Company's existing leases/subleases related to IHOP restaurants generally provide for an initial term of 20 to 25 years, with most having one or more five-year renewal options. Leases related to Applebee's restaurants generally have an initial term of 10 to 20 years, with renewal terms of five The Company's lease cost for the three and six months ended June 30, 2022 and 2021 was as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In millions) Finance lease cost: Amortization of right-of-use assets $ 1.1 $ 1.1 $ 2.2 $ 2.3 Interest on lease liabilities 1.2 1.4 2.5 2.8 Operating lease cost (1) 21.2 21.0 42.3 42.4 Variable lease cost 1.9 0.5 3.6 0.7 Short-term lease cost 0.0 0.0 0.0 0.0 Sublease income (26.6) (24.9) (53.1) (49.1) Lease (income) cost $ (1.2) $ (0.9) $ (2.5) $ (0.9) (1) Operating lease cost for the three and six months ended June 30, 2021 previously disclosed as $24.7 million and $49.8 million, respectively, were overstated due to the inclusion of certain finance lease activity. The correct operating lease cost for the three and six months ended June 30, 2021 was $21.0 million and $42.4 million, respectively, as reflected in the above table. The overstatement only impacted this note disclosure, and there was no impact to the Consolidated Statement of Comprehensive Income. Future minimum lease payments under noncancelable leases as lessee as of June 30, 2022 were as follows: Finance Operating (In millions) 2022 (remaining six months) $ 7.3 $ 41.9 2023 12.2 68.5 2024 10.6 76.8 2025 9.0 65.1 2026 8.4 56.1 Thereafter 54.6 180.2 Total minimum lease payments 102.1 488.6 Less: interest/imputed interest (28.8) (78.8) Total obligations 73.3 409.8 Less: current portion (9.7) (71.7) Long-term lease obligations $ 63.6 $ 338.2 The weighted average remaining lease term as of June 30, 2022 was 10.0 years for finance leases and 6.6 years for operating leases. The weighted average discount rate as of June 30, 2022 was 9.8% for finance leases and 5.5% for operating leases. During the three and six months ended June 30, 2022 and 2021, the Company made the following cash payments for leases: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In millions) Principal payments on finance lease obligations $ 2.4 $ 2.6 $ 4.7 $ 5.2 Interest payments on finance lease obligations $ 1.2 $ 1.4 $ 2.5 $ 2.8 Payments on operating leases $ 22.8 $ 22.8 $ 45.8 $ 45.8 Variable lease payments $ 1.8 $ 0.3 $ 3.9 $ 0.6 The Company's income from operating leases for the three and six months ended June 30, 2022 and 2021 was as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In millions) Minimum lease payments $ 24.0 $ 23.9 $ 47.8 $ 47.7 Variable lease income 4.6 2.8 8.5 4.4 Total operating lease income $ 28.6 $ 26.7 $ 56.3 $ 52.1 Minimum payments to be received as lessor under noncancelable operating leases as of June 30, 2022 were as follows: (In millions) 2022 (remaining six months) $ 51.4 2023 99.4 2024 90.8 2025 77.9 2026 63.5 Thereafter 139.0 Total minimum rents receivable $ 522.0 The Company's income from real estate leases receivables for the three and six months ended June 30, 2022 and 2021 was as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In millions) Interest income $ 0.4 $ 0.5 $ 0.8 $ 1.1 Variable lease income 0.2 0.2 0.4 0.3 Selling (loss) profit (0.1) — 0.4 — Total real estate lease income $ 0.5 $ 0.7 $ 1.6 $ 1.4 Minimum payments to be received as lessor under noncancelable real estate leases as of June 30, 2022 were as follows: (In millions) 2022 (remaining six months) $ 3.7 2023 4.5 2024 2.3 2025 1.5 2026 1.5 Thereafter 12.2 Total minimum rents receivable 25.7 Less: unearned income (6.3) Total net investment in real estate leases 19.4 Less: current portion (5.3) Long-term investment in real estate leases $ 14.1 |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt At June 30, 2022 and December 31, 2021, long-term debt consisted of the following: June 30, 2022 December 31, 2021 (In millions) Series 2019-1 4.194% Fixed Rate Senior Secured Notes, Class A-2-I $ 693.0 $ 693.0 Series 2019-1 4.723% Fixed Rate Senior Secured Notes, Class A-2-II 594.0 594.0 Debt issuance costs (6.3) (7.4) Long-term debt, net of debt issuance costs 1,280.7 1,279.6 Current portion of long-term debt — — Long-term debt $ 1,280.7 $ 1,279.6 On June 5, 2019, Applebee’s Funding LLC and IHOP Funding LLC (the “Co-Issuers”), each a special purpose, wholly-owned indirect subsidiary of the Company, issued two tranches of fixed rate senior secured notes, the Series 2019-1 4.194% Fixed Rate Senior Secured Notes, Class A-2-I (“Class A-2-I Notes”) in an initial aggregate principal amount of $700 million and the Series 2019-1 4.723% Fixed Rate Senior Secured Notes, Class A-2-II (“Class A-2-II Notes”) in an initial aggregate principal amount of $600 million (the “Class A-2-II Notes” and, together with the Class A-2-I Notes, the “2019 Class A-2 Notes”). The 2019 Class A-2 Notes were issued pursuant to an offering exempt from registration under the Securities Act of 1933, as amended. The Co-Issuers also entered into a revolving financing facility, the 2019-1 Variable Funding Senior Notes, Class A-1 (the “Credit Facility”), that allows for drawings up to $225 million of variable funding notes and the issuance of letters of credit. The Credit Facility and the 2019 Class A-2 Notes are referred to collectively herein as the “New Notes.” The New Notes were issued in a securitization transaction pursuant to which substantially all the domestic revenue-generating assets and domestic intellectual property held by the Co-Issuers and certain other special-purpose, wholly-owned indirect subsidiaries of the Company (the “Guarantors”) were pledged as collateral to secure the New Notes. The New Notes were issued under a Base Indenture, dated as of September 30, 2014, and amended and restated as of June 5, 2019 (the “Base Indenture”), and the related Series 2019-1 Supplement to the Base Indenture, dated June 5, 2019 (the “Series 2019-1 Supplement”), among the Co-Issuers and Citibank, N.A., as the trustee (in such capacity, the “Trustee”) and securities intermediary. The Base Indenture and the Series 2019-1 Supplement (collectively, the “Indenture”) will allow the Co-Issuers to issue additional series of notes in the future subject to certain conditions set forth therein. 2019 Class A-2 Notes The legal final maturity of the 2019 Class A-2 Notes is June 2049, but rapid amortization will apply if the Class A-2-I Notes are not repaid by June 2024 (the “Class A-2-I Anticipated Repayment Date”) and for the Class A-2-II Notes if not repaid by June 2026 (the “Class A-2-II Anticipated Repayment Date”). If the Co-Issuers have not repaid or refinanced the Class A-2-I Notes by the Class A-2-I Anticipated Repayment Date or the Class A-2-II Notes by the Class A-2-II Anticipated Repayment Date, then additional interest will accrue on the Class A-2-I Notes and the Class A-2-II Notes, as applicable, at the greater of: (A) 5.0% and (B) the amount, if any, by which the sum of the following exceeds the applicable Series 2019-1 Class A-2 Note interest rate: (x) the yield to maturity (adjusted to a quarterly bond-equivalent basis) on the applicable anticipated repayment date of the United States Treasury Security having a term closest to 10 years plus (y) 5.0%, plus (z) 2.15% for the Series 2019-1 Class A-2-I Notes and 2.64% for the Series 2019-1 Class A-2-II Notes. While the 2019 Class A-2 Notes are outstanding, payment of principal and interest is required to be made on the 2019 Class A-2 Notes on a quarterly basis. The quarterly principal payment of $3.25 million on the 2019 Class A-2 Notes may be suspended when the leverage ratio for the Company and its subsidiaries is less than or equal to 5.25x. Exceeding the leverage ratio of 5.25x does not violate any covenant related to the New Notes. In general, the leverage ratio is the Company's indebtedness (as defined in the Indenture) divided by adjusted EBITDA (as defined in the Indenture) for the four preceding quarterly periods. The complete definitions of all calculation elements of the leverage ratio are contained in the Indenture. As of June 30, 2022, the Company's leverage ratio was 4.27x. As a result, quarterly principal payments on the 2019 Class A-2 Notes of $3.25 million currently are not required. The Company may voluntarily repay the 2019 Class A-2 Notes at any time; however, if the 2019 Class A-2 Notes are repaid prior to certain dates, the Company would be required to pay make-whole premiums. As of June 30, 2022, the make-whole premium associated with voluntary prepayment of the Class A-2-I Notes was zero and will remain as such. As of June 30, 2022, the make-whole premium associated with voluntary prepayment of the Class A-2-II Notes was approximately $16 million; this amount declines progressively each quarter to zero in June 2024. The Company also would be subject to a make-whole premium in the event of a mandatory prepayment required following a Rapid Amortization Event or certain asset dispositions. The mandatory make-whole premium requirements are considered derivatives embedded in the New Notes that must be bifurcated for separate valuation. The Company estimated the fair value of these derivatives to be immaterial as of June 30, 2022, based on the probability-weighted discounted cash flows associated with either event. 2019 Class A-1 Notes The Co-Issuers entered into the Credit Facility that allows for drawings up to $225 million of variable funding notes and the issuance of letters of credit. The applicable interest rate under the Credit Facility depends on the type of borrowing by the Co-Issuers. The applicable interest rate for advances is generally calculated at a per annum rate equal to the commercial paper funding rate or one-, two-, three- or six-month Eurodollar Funding Rate, in either case, plus 2.15%. The applicable interest rate for swingline advances and unreimbursed draws on outstanding letters of credit is a per annum base rate equal to the sum of (a) 1.15% plus (b) the greatest of (i) the Prime Rate in effect from time to time; (ii) the Federal Funds Rate in effect from time to time plus 0.50% and (iii) the one-month Eurodollar Funding Rate plus 1.00%. There is no upfront fee for the Credit Facility. There is a fee of 50 basis points on any unused portion of the revolving financing facility. Undrawn face amounts of outstanding letters of credit that are not cash collateralized accrue a fee of 2.15% per annum. In March 2020, the Company borrowed $220.0 million against the Credit Facility. The $220.0 million was repaid on March 5, 2021, and there have been no new borrowings since that date. As of June 30, 2022, there were no outstanding borrowings under the Credit Facility. The interest rate for borrowings under the Credit Facility is the three-month LIBOR rate plus 2.15% for 60% of the advances and the commercial paper funding rate of the Company's conduit investor plus 2.15% for 40% of the advances. At June 30, 2022, $3.5 million was pledged against the Credit Facility for outstanding letters of credit, leaving $221.5 million available for borrowing. The letters of credit are used primarily to satisfy insurance-related collateral requirements. Covenants and Restrictions The New Notes are subject to a series of covenants and restrictions customary for transactions of this type, including: (i) that the Co-Issuers maintain specified reserve accounts to be used to make required payments in respect of the New Notes; (ii) provisions relating to optional and mandatory prepayments, and the related payment of specified amounts, including specified call redemption premiums in the case of Class A-2 Notes under certain circumstances; (iii) certain indemnification payments in the event, among other things, the transfers of the assets pledged as collateral for the New Notes are in stated ways defective or ineffective; and (iv) covenants relating to recordkeeping, access to information and similar matters. The New Notes are subject to customary rapid amortization events provided for in the Indenture, including events tied to failure of the Securitization Entities (as defined in the Indenture) to maintain the stated debt service coverage ratio (“DSCR”), the sum of domestic retail sales for all restaurants being below certain levels on certain measurement dates, certain manager termination events, certain events of default and the failure to repay or refinance the Class A-2 Notes on the anticipated repayment dates. The New Notes are also subject to certain customary events of default, including events relating to non-payment of required interest, principal or other amounts due on or with respect to the New Notes, failure of the Securitization Entities to maintain the stated DSCR, failure to comply with covenants within certain time frames, certain bankruptcy events, breaches of specified representations and warranties and certain judgments. In general, the DSCR ratio is Net Cash Flow (as defined in the Indenture) for the four quarters preceding the calculation date divided by the total debt service payments (as defined in the Indenture) of the preceding four quarters. The complete definitions of the DSCR and all calculation elements are contained in the Indenture. Failure to maintain a prescribed DSCR can trigger a Cash Flow Sweeping Event, A Rapid Amortization Event, a Manager Termination Event or a Default Event as described below. In a Cash Flow Sweeping Event, the Trustee is required to retain 50% of excess Cash Flow (as defined in the Indenture) in a restricted account. In a Rapid Amortization Event, all excess Cash Flow is retained and used to retire principal amounts of debt. In a Manager Termination Event, the Company may be replaced as manager of the assets securitized under the Indenture. In a Default Event, the outstanding principal amount and any accrued but unpaid interest can be called to become immediately due and payable. Key DSCRs are as follows: • DSCR less than 1.75x - Cash Flow Sweeping Event • DSCR less than 1.20x - Rapid Amortization Event • Interest-only DSCR less than 1.20x - Manager Termination Event • Interest-only DSCR less than 1.10x - Default Event The Company's DSCR for the reporting period ended June 30, 2022 was approximately 4.31x. Debt Issuance Costs Amortization of costs incurred in connection with the issuance of the 2019 Class A-2 Notes of $0.6 million and $0.6 million were included in interest expense for the three months ended June 30, 2022 and 2021, respectively. Amortization of costs incurred in connection with the issuance of the 2019 Class A-2 Notes of $1.1 million and $1.1 million were included in interest expense for the six months ended June 30, 2022 and 2021, respectively. Amortization costs incurred in connection with the Company's Credit Facility of $0.1 million and $0.1 million were included in interest expense for the three months ended June 30, 2022 and 2021, respectively. Amortization costs incurred in connection with the Company's Credit Facility of $0.3 million and $0.3 million were included in interest expense for the six months ended June 30, 2022 and 2021, respectively. At June 30, 2022, total unamortized debt issuance costs related to the 2019 Class A-2 Notes of $6.3 million are reported as a direct reduction of the 2019 Class A-2 Notes in the Consolidated Balance Sheets. At June 30, 2022, total unamortized debt issuance costs of $1.2 million related to the Credit Facility are classified as other long-term assets. Maturities of Long-term Debt • The anticipated repayment date of the Class A-2-I Notes is June 2024. • The anticipated repayment date of the Class A-2-II Notes is June 2026. |
Stockholders' Deficit
Stockholders' Deficit | 6 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
Stockholders' Deficit | Stockholders' Deficit Dividends Dividends declared and paid per share for the three and six months ended June 30, 2022 and 2021 were as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Dividends declared per common share $ 0.51 $ — $ 0.97 $ — Dividends paid per common share $ — $ — $ 0.86 $ — On October 28, 2021, the Company's Board of Directors declared a fourth quarter 2021 cash dividend of $0.40 per share of common stock, paid on January 7, 2022 to the stockholders of record as of the close of business on December 17, 2021. On February 17, 2022, the Company's Board of Directors declared a first quarter 2022 cash dividend of $0.46 per share of common stock, paid on April 1, 2022 to the stockholders of record as of the close of business on March 21, 2022. On May 12, 2022, the Company's Board of Directors declared a second quarter 2022 cash dividend of $0.51 per share of common stock, paid on July 8, 2022 to the stockholders of record as of the close of business on June 20, 2022. Stock Repurchase Program In February 2019, the Company’s Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to $200 million of the Company’s common stock (the “2019 Repurchase Program”) on an opportunistic basis from time to time in the open market or in privately negotiated transactions based on business, market, applicable legal requirements and other considerations. The 2019 Repurchase Program, as approved by the Board of Directors, does not require the repurchase of a specific number of shares and can be terminated at any time. On February 17, 2022, the Company's Board of Directors authorized a new share repurchase program, effective April 1, 2022, of up to $250 million (the “2022 Repurchase Program”). In connection with the approval of the 2022 Repurchase Program, the 2019 Repurchase Program terminated effective April 1, 2022. Cumulatively, the Company repurchased 2,344,804 shares at a cost of $175.8 million under the 2019 Repurchase Program through April 1, 2022. During the three and six months ended June 30, 2022, the Company repurchased 912,992 and 1,501,100 shares of common stock at a cost of $62.6 million and $104.1 million, respectively. The amounts for the three months ended June 30, 2022 relate to the 2022 Repurchase Program. The Company did not repurchase any shares during the three and six months ended June 30, 2021. Treasury Stock |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company's effective tax rate was 26.8% (a tax provision of $17.9 million on pre-tax book income of $66.7 million) for the six months ended June 30, 2022, as compared to 12.3% (a tax provision of $7.7 million on pre-tax book income of $62.7 million) for the six months ended June 30, 2021. The effective tax rate for the six months ended June 30, 2022 was different than the rate of the prior comparable period, primarily due to the recognition of excess tax benefits on stock-based compensation related to the departure of the Company's previous chief executive officer in the first quarter of 2021. The total gross unrecognized tax benefit as of June 30, 2022 and December 31, 2021 was $2.2 million and $1.9 million, respectively, excluding interest, penalties and related tax benefits. The Company estimates the unrecognized tax benefit as of June 30, 2022 may decrease over the upcoming 12 months by an amount up to $0.3 million related to settlements with taxing authorities and expiring statutes of limitations. For the remaining liability, due to the uncertainties related to these tax matters, the Company is unable to make a reasonable estimate as to when cash settlement with a taxing authority will occur. As of June 30, 2022, accrued interest was $0.7 million and accrued penalties were less than $0.1 million, excluding any related income tax benefits. As of December 31, 2021, accrued interest was $0.6 million and accrued penalties were less than $0.1 million, excluding any related income tax benefits. The Company recognizes interest accrued related to unrecognized tax benefits and penalties as a component of its income tax provision recognized in its Consolidated Statements of Comprehensive Income. The Company files federal income tax returns and the Company or one of its subsidiaries file income tax returns in various state and international jurisdictions. With few exceptions, the Company is no longer subject to federal tax examinations by tax authorities for years before 2017 and state or non-United States tax examinations by tax authorities for years before 2011. The Company believes that adequate reserves have been provided related to all matters contained in the tax periods open to examination. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The following table summarizes the components of stock-based compensation expense included in general and administrative expenses in the Consolidated Statements of Comprehensive Income: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Total stock-based compensation expense: (In millions) Equity classified awards expense $ 4.0 $ 2.5 $ 8.4 $ 5.6 Liability classified awards expense 1.0 0.5 1.4 2.0 Total pre-tax stock-based compensation expense 5.0 3.0 9.8 7.6 Book income tax benefit (1.2) (0.8) (2.4) (1.9) Total stock-based compensation expense, net of tax $ 3.8 $ 2.2 $ 7.4 $ 5.7 As of June 30, 2022, total unrecognized compensation expense of $22.7 million related to restricted stock and restricted stock units and $3.9 million related to stock options are expected to be recognized over a weighted average period of 1.6 years for restricted stock and restricted stock units and 1.6 years for stock options. Fair Value Assumptions The following table summarizes the assumptions used in the Black-Scholes model for stock options granted during the six months ended June 30, 2022. Risk-free interest rate 1.7 % Historical volatility 70.1 % Dividend yield 2.6 % Expected years until exercise 4.5 Fair value of options granted $33.23 Equity Classified Awards - Stock Options Stock option balances at June 30, 2022, and activity for the six months ended June 30, 2022 were as follows: Shares Weighted Weighted Average Aggregate Outstanding at December 31, 2021 475,904 $ 76.65 Granted 75,795 70.08 Exercised (3,505) 68.80 Expired (2,448) 94.43 Forfeited (2,635) 90.54 Outstanding at June 30, 2022 543,111 75.64 6.4 $ 1.9 Vested at June 30, 2022 and Expected to Vest 521,010 75.74 6.3 $ 1.9 Exercisable at June 30, 2022 373,651 $ 75.86 5.4 $ 1.7 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 second quarter of 2022 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 June 30, 2022. 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 June 30, 2022, and activity related to restricted stock and restricted stock units for the six months ended June 30, 2022 were as follows: Restricted Weighted Stock-Settled Restricted Weighted Outstanding at December 31, 2021 276,611 $ 80.85 105,592 $ 71.00 Granted 174,479 70.19 59,002 49.36 Released (77,563) 90.37 (42,107) 66.45 Forfeited (15,708) 77.95 — — Outstanding at June 30, 2022 357,819 $ 73.72 122,487 $ 62.19 Liability Classified Awards - Cash-settled Restricted Stock Units The Company has granted cash-settled restricted stock units to certain employees. These instruments are recorded as liabilities at fair value as of the respective period end. Cash-Settled Restricted Outstanding at December 31, 2021 12,799 Granted 67 Released (12,866) Outstanding at June 30, 2022 — For the three months ended June 30, 2022 and 2021, an expense of zero and $0.1 million , res pectively, was included as stock-based compensation expense related to cash-settled restricted stock units. For the six months ended June 30, 2022 and 2021, an expense of $0.2 million and a credit of $1.5 million, respectively, was included as stock-based compensation expense related to cash-settled restricted stock units. At June 30, 2022 and December 31, 2021, liabilities were zero and $0.9 million, respectively, related to cash-settled restricted stock units were included as part of accrued employee compensation and benefits in the Consolidated Balance Sheets. Liability Classified Awards - Long-Term Incentive Awards |
Net Income (Loss) per Share
Net Income (Loss) per Share | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) per Share | Net Income per Share The computation of the Company's basic and diluted net income per share is as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In thousands, except per share data) Numerator for basic and diluted income per common share: Net income $ 23,962 $ 29,362 $ 48,812 $ 54,965 Less: Net income allocated to unvested participating restricted stock (673) (657) (1,273) (1,431) Net income available to common stockholders - basic 23,289 28,705 47,539 53,534 Effect of unvested participating restricted stock in two-class calculation 1 3 1 10 Net income available to common stockholders - diluted $ 23,290 $ 28,708 $ 47,540 $ 53,544 Denominator: Weighted average outstanding shares of common stock - basic 16,050 16,886 16,386 16,673 Dilutive effect of stock options 30 91 32 129 Weighted average outstanding shares of common stock - diluted 16,080 16,977 16,418 16,802 Net income per common share: Basic $ 1.45 $ 1.70 $ 2.90 $ 3.21 Diluted $ 1.45 $ 1.69 $ 2.90 $ 3.19 |
Segments
Segments | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Segments | Segments The Company identifies its reporting segments based on the organizational units used by management to monitor performance and make operating decisions. The Company currently has five operating segments: Applebee's franchise operations, Applebee's company-operated restaurant operations, IHOP franchise operations, rental operations and financing operations. The Company has four reportable segments: franchise operations, (an aggregation of Applebee's and IHOP franchise operations), company-operated restaurant operations, rental operations and financing operations. The Company considers these to be its reportable segments, regardless of whether any segment exceeds 10% of consolidated revenues, income before income tax provision or total assets. As of June 30, 2022, the franchise operations segment consisted of (i) 1,604 restaurants operated by Applebee’s franchisees in the United States, two U.S. territories and 11 countries outside the United States and (ii) 1,764 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, franchise advertising revenue, sales of proprietary products to franchisees (primarily pancake and waffle dry mixes for the IHOP restaurants), and franchise fees. Franchise operations expenses include advertising expenses, the cost of IHOP proprietary products, bad debt expense, franchisor contributions to marketing funds, pre-opening training expenses and other franchise-related costs. Company restaurant sales are retail sales at 69 Applebee's 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 real estate leases. Rental operations expenses are costs of operating leases and interest expense from finance leases on which the Company is the lessee. Financing revenues primarily consist of interest income from the financing of IHOP equipment leases and franchise fees and interest income on Applebee's notes receivable from franchisees. Financing expenses are the cost of taxes related to IHOP equipment leases. Information on segments is as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In millions) Revenues from external customers: Franchise operations $ 168.3 $ 166.9 $ 329.5 $ 307.9 Rental operations 29.1 27.4 57.9 53.5 Company restaurants 39.5 38.2 78.9 74.2 Financing operations 0.9 1.1 1.9 2.2 Total $ 237.8 $ 233.6 $ 468.2 $ 437.8 Interest expense: Rental operations $ 1.0 $ 1.3 $ 2.2 $ 2.6 Company restaurants 0.8 0.8 1.6 1.7 Corporate 15.4 15.7 30.9 32.2 Total $ 17.2 $ 17.8 $ 34.7 $ 36.5 Depreciation and amortization: Franchise operations $ 2.5 $ 2.5 $ 5.0 $ 5.0 Rental operations 2.6 2.8 5.3 5.6 Company restaurants 1.9 1.8 3.8 3.5 Corporate 3.0 2.9 5.9 5.9 Total $ 10.0 $ 10.0 $ 20.0 $ 20.0 Gross profit (loss), by segment: Franchise operations $ 86.0 $ 87.7 $ 169.2 $ 163.7 Rental operations 7.2 6.8 13.9 12.0 Company restaurants 1.6 3.4 3.6 6.5 Financing operations 0.9 1.0 1.7 2.0 Total gross profit 95.7 98.9 188.4 184.2 Corporate and unallocated expenses, net (63.2) (60.2) (121.8) (121.5) Income before income taxes $ 32.5 $ 38.7 $ 66.7 $ 62.7 |
Closure and Impairment Charges
Closure and Impairment Charges | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Closure and Impairment Charges | Closure and Impairment Charges Closure and impairment charges for the three and six months ended June 30, 2022 and 2021 were as follows: Closure and Impairment Charges Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In millions) Closure charges $ 1.0 $ 1.0 $ 1.2 $ 2.9 Long-lived tangible asset impairment 0.3 1.6 0.3 1.7 Total closure and impairment charges $ 1.3 $ 2.6 $ 1.5 $ 4.6 The closure charges for the three and six months ended June 30, 2022 were primarily related to the revisions to existing closure reserves, including accretion, primarily for approximately 35 IHOP restaurants. The closure charges for the three months ended June 30, 2021 related to the establishment of, or revisions to existing closure reserves, including accretion, primarily for approximately 30 IHOP restaurants. The closure charges for the six months ended June 30, 2021 related to the establishment of or revisions to existing closure reserves for approximately 50 IHOP restaurants. Long-lived tangible asset impairment charges for the three and six months ended June 30, 2022 related to the impairment of land and buildings for two IHOP restaurants located on sites owned by the Company. Long-lived tangible asset impairment charges for the six months ended June 30, 2021 related to four IHOP franchisee-operated restaurants. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company does not have a material amount of financial assets or liabilities that are required under U.S. GAAP to be measured on a recurring basis at fair value. The Company is not a party to any material derivative financial instruments. The Company does not have a material amount of non-financial assets or non-financial liabilities that are required under U.S. GAAP to be measured at fair value on a recurring basis. The Company has not elected to use the fair value measurement option, as permitted under U.S. GAAP, for any assets or liabilities for which fair value measurement is not presently required. The Company believes the fair values of cash equivalents, accounts receivable and accounts payable approximate their carrying amounts due to their short duration. The fair values of the Company's 2019 Class A-2 Notes at June 30, 2022 and December 31, 2021 were as follows: June 30, 2022 December 31, 2021 (In millions) Face Value of Class A-2 Notes $ 1,287.0 $ 1,287.0 Fair Value of Class A-2 Notes $ 1,253.8 $ 1,312.9 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation, Claims and Disputes The Company is subject to various lawsuits, administrative proceedings, audits and claims arising in the ordinary course of business. Some of these lawsuits purport to be class actions and/or seek substantial damages. The Company is required under U.S. GAAP to record an accrual for litigation loss contingencies that are both probable and reasonably estimable. Legal fees and expenses associated with the defense of all of the Company's litigation are expensed as such fees and expenses are incurred. Management regularly assesses the Company's insurance coverage, analyzes litigation information with the Company's attorneys and evaluates the Company's loss experience in connection with pending legal proceedings. While the Company does not presently believe that any of the legal proceedings to which it is currently a party will ultimately have a material adverse impact on the Company, there can be no assurance that the Company will prevail in all the proceedings the Company is party to, or that the Company will not incur material losses from them. Lease Guarantees |
Cash, Cash Equivalents and Rest
Cash, Cash Equivalents and Restricted Cash | 6 Months Ended |
Jun. 30, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash and Cash Equivalents The Company considers all highly liquid investment securities with remaining maturities at the date of purchase of three months or less to be cash equivalents. These cash equivalents are stated at cost which approximates market value. Cash held related to IHOP advertising funds and the Company's gift card programs is not considered to be restricted cash as there are no restrictions on the use of these funds. The components of cash and cash equivalents were as follows: June 30, 2022 December 31, 2021 (In millions) Money market funds $ 15.0 $ 30.0 IHOP advertising funds and gift card programs 82.1 101.5 Other depository accounts 166.4 229.9 Total cash and cash equivalents $ 263.5 $ 361.4 Current Restricted Cash Current restricted cash primarily consisted of funds required to be held in trust in connection with the Company's securitized debt and funds from Applebee's franchisees pursuant to franchise agreements, usage of which was restricted to advertising activities. The components of current restricted cash were as follows: June 30, 2022 December 31, 2021 (In millions) Securitized debt reserves $ 29.6 $ 29.9 Applebee's advertising funds 20.1 17.5 Other 0.1 0.1 Total current restricted cash $ 49.8 $ 47.5 Non-current Restricted Cash Non-current restricted cash was $16.4 million and $16.4 million at June 30, 2022 and December 31, 2021, respectively, and represents interest reserves required to be set aside for the duration of the Company's securitized debt. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventOn July 26, 2022, the Company entered into an asset purchase agreement for the refranchising and sale of related restaurant assets of 69 Applebee’s company-operated restaurants located in North Carolina and South Carolina. This sale is expected to close in the fiscal third quarter of 2022. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Fiscal Period | The Company’s fiscal quarters end on the Sunday closest to the last day of each calendar quarter. For convenience, the fiscal quarters of each year are referred to as ending on March 31, June 30, September 30 and December 31. The first fiscal quarter of 2022 began on January 3, 2022 and ended on April 3, 2022; the second fiscal quarter of 2022 ended on July 3, 2022. The first fiscal quarter of 2021 began on January 4, 2021 and ended on April 4, 2021; the second fiscal quarter of 2021 ended on July 4, 2021. |
Risks and Uncertainties | Risks and Uncertainties The Company was subject to risks and uncertainties as a result of the continuing outbreak of a novel strain of coronavirus, designated “COVID-19,” and evolving variants thereof. The extent of the continued impact of the COVID-19 pandemic on the Company's business remains uncertain and difficult to predict, as measures taken in response to and the effect of the pandemic have varied and continue to vary by country, state and municipalities within states. The Company first began to experience impacts from the COVID-19 pandemic in March 2020, as federal, state, local and international governments reacted to the public health crisis by encouraging social distancing and requiring, in varying degrees, restaurant dine-in limitations and other restrictions that largely limited the restaurants of the Company's franchisees and its company-operated restaurants to take-out and delivery sales during the initial stages of the pandemic. Subsequently, government-imposed dine-in restrictions have been relaxed or removed in many of the locations in which the Company operates as incidents of infection decline and vaccination rates increase within the respective governmental jurisdictions. As of June 30, 2022, substantially all domestic Applebee's Neighborhood Grill & Bar ® (“Applebee's”) and International House of Pancakes ® (“IHOP”) were open and operating without government-mandated restrictions. |
Accounting Standards Adopted and Newly Issued Accounting Standards Not Yet Adopted | Accounting Standards Adopted in the Current Fiscal Year In July 2021, the Financial Accounting Standards Board (“FASB”) issued guidance which affect lessors with lease contracts that (i) have variable lease payments that do not depend on a reference index or a rate and (ii) would have resulted in the recognition of a selling loss at lease commencement if classified as sales-type or direct financing. The amendments are effective for fiscal years beginning after December 15, 2021. Adoption did not have any material effect on the consolidated financial statements. Additional new accounting guidance became effective for the Company as of the beginning of fiscal 2022 that the Company reviewed and concluded was either not applicable to its operations or had no material effect on its consolidated financial statements in the current or future fiscal years. Newly Issued Accounting Standards Not Yet Adopted In March 2020, with an update in January 2021, the FASB issued guidance which provides optional expedients and exceptions for applying current U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued. The guidance can be adopted immediately and is applicable to contracts entered into on or before December 31, 2022. The Company is currently evaluating its contracts that reference LIBOR and the potential effects of adopting this new guidance. |
Revenue Disclosures (Tables)
Revenue Disclosures (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table disaggregates franchise revenue by major type for the three and six months ended June 30, 2022 and 2021: Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 (In thousands) Franchise Revenue: Royalties $ 78,006 $ 78,124 $ 153,248 $ 142,401 Advertising fees 74,111 72,324 144,994 133,209 Pancake and waffle dry mix sales and other 14,077 13,525 27,008 24,415 Franchise and development fees 2,065 2,981 4,241 7,905 Total franchise revenue $ 168,259 $ 166,954 $ 329,491 $ 307,930 |
Schedule of Changes in Deferred Revenue | Changes in the Company's contract liability for deferred franchise and development fees during the six months ended June 30, 2022 were as follows: Deferred Franchise Revenue (short- and long-term) (In thousands) Balance at December 31, 2021 $ 53,346 Recognized as revenue during the six months ended June 30, 2022 (4,075) Fees deferred during the six months ended June 30, 2022 1,679 Balance at June 30, 2022 $ 50,950 |
Schedule of Remaining Performance Obligations | The balance of deferred revenue as of June 30, 2022 is expected to be recognized as follows: (In thousands) 2022 (remaining six months) $ 3,539 2023 6,994 2024 6,297 2025 5,516 2026 4,692 Thereafter 23,912 Total $ 50,950 |
Current Expected Credit Losse_2
Current Expected Credit Losses ("CECL") (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Credit Loss [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | Receivables due from distributors are related to the sale of IHOP’s proprietary pancake and waffle dry mix to franchisees through the Company’s network of suppliers and distributors and are included as part of Other receivables. June 30, 2022 December 31, 2021 (In millions) Accounts receivable $ 62.5 $ 63.6 Gift card receivables 6.8 33.4 Notes receivable 17.9 19.7 Financing receivables: Equipment leases receivable 30.2 33.4 Real estate leases receivable 19.4 16.7 Other 8.4 7.6 145.2 174.4 Less: allowance for credit losses (10.2) (11.9) 135.0 162.5 Less: current portion (91.9) (120.0) Long-term receivables $ 43.1 $ 42.5 |
Schedule of Changes in Allowance for Credit Losses | Changes in the allowance for credit losses during the six months ended June 30, 2022 were as follows: Accounts Receivable Notes receivable, short-term Notes receivable, long-term Lease Receivables Equipment Notes Other (1) Total (In millions) Balance, December 31, 2021 $ 1.0 $ 3.8 $ 6.6 $ 0.2 $ 0.1 $ 0.2 $ 11.9 Bad debt (credit) expense (0.2) 0.8 (1.0) (0.1) 0.1 0.0 (0.4) Advertising provision adjustment 0.0 (0.3) (0.2) — — — (0.5) Write-offs (0.1) (0.5) — — — (0.2) (0.8) Recoveries 0.0 — — — 0.0 — 0.0 Balance, June 30, 2022 $ 0.7 $ 3.8 $ 5.4 $ 0.1 $ 0.2 $ 0.0 $ 10.2 (1) Primarily distributor receivables, gift card receivables and credit card receivables |
Schedule of Delinquency Status of Receivable | The delinquency status of receivables (other than accounts receivable, gift card receivables and distributor receivables) at June 30, 2022 was as follows: Notes receivable, short-term Notes receivable, long-term Lease Receivables Equipment Notes Other (1) Total (In millions) Current $ 4.6 $ 11.6 $ 19.4 $ 30.2 $ 2.4 $ 68.2 30-59 days 0.0 — — — — 0.0 60-89 days 0.0 — — — — 0.0 90-119 days 0.1 — — — — 0.1 120+ days 1.6 — — — — 1.6 Total $ 6.3 $ 11.6 $ 19.4 $ 30.2 $ 2.4 $ 69.9 (1) Primarily c redit card receivables |
Financing Receivable Credit Quality Indicators | The year of origination of the Company's notes receivable and financing receivables is as follows: Notes receivable, short and long-term Lease Receivables Equipment Notes Total (In millions) 2022 $ 0.5 $ 6.3 $ — $ 6.8 2021 11.4 2.6 — 14.0 2020 0.5 1.4 — 1.9 2019 0.2 0.8 — 1.0 2018 — — — 0.0 Prior 5.3 8.3 30.2 43.8 Total $ 17.9 $ 19.4 $ 30.2 $ 67.5 |
Lease Disclosures (Tables)
Lease Disclosures (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Schedule of Lease Cost | The Company's lease cost for the three and six months ended June 30, 2022 and 2021 was as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In millions) Finance lease cost: Amortization of right-of-use assets $ 1.1 $ 1.1 $ 2.2 $ 2.3 Interest on lease liabilities 1.2 1.4 2.5 2.8 Operating lease cost (1) 21.2 21.0 42.3 42.4 Variable lease cost 1.9 0.5 3.6 0.7 Short-term lease cost 0.0 0.0 0.0 0.0 Sublease income (26.6) (24.9) (53.1) (49.1) Lease (income) cost $ (1.2) $ (0.9) $ (2.5) $ (0.9) (1) Operating lease cost for the three and six months ended June 30, 2021 previously disclosed as $24.7 million and $49.8 million, respectively, were overstated due to the inclusion of certain finance lease activity. The correct operating lease cost for the three and six months ended June 30, 2021 was $21.0 million and $42.4 million, respectively, as reflected in the above table. The overstatement only impacted this note disclosure, and there was no impact to the Consolidated Statement of Comprehensive Income. |
Schedule of Operating Lease Liability Future Maturity | Future minimum lease payments under noncancelable leases as lessee as of June 30, 2022 were as follows: Finance Operating (In millions) 2022 (remaining six months) $ 7.3 $ 41.9 2023 12.2 68.5 2024 10.6 76.8 2025 9.0 65.1 2026 8.4 56.1 Thereafter 54.6 180.2 Total minimum lease payments 102.1 488.6 Less: interest/imputed interest (28.8) (78.8) Total obligations 73.3 409.8 Less: current portion (9.7) (71.7) Long-term lease obligations $ 63.6 $ 338.2 |
Schedule of Finance Lease Liability Future Maturity | Future minimum lease payments under noncancelable leases as lessee as of June 30, 2022 were as follows: Finance Operating (In millions) 2022 (remaining six months) $ 7.3 $ 41.9 2023 12.2 68.5 2024 10.6 76.8 2025 9.0 65.1 2026 8.4 56.1 Thereafter 54.6 180.2 Total minimum lease payments 102.1 488.6 Less: interest/imputed interest (28.8) (78.8) Total obligations 73.3 409.8 Less: current portion (9.7) (71.7) Long-term lease obligations $ 63.6 $ 338.2 |
Schedule of Lease Payments | During the three and six months ended June 30, 2022 and 2021, the Company made the following cash payments for leases: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In millions) Principal payments on finance lease obligations $ 2.4 $ 2.6 $ 4.7 $ 5.2 Interest payments on finance lease obligations $ 1.2 $ 1.4 $ 2.5 $ 2.8 Payments on operating leases $ 22.8 $ 22.8 $ 45.8 $ 45.8 Variable lease payments $ 1.8 $ 0.3 $ 3.9 $ 0.6 |
Schedule of Operating Lease Income | The Company's income from operating leases for the three and six months ended June 30, 2022 and 2021 was as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In millions) Minimum lease payments $ 24.0 $ 23.9 $ 47.8 $ 47.7 Variable lease income 4.6 2.8 8.5 4.4 Total operating lease income $ 28.6 $ 26.7 $ 56.3 $ 52.1 |
Schedule of Future Minimum Payments as a Lessor Under Operating Leases | Minimum payments to be received as lessor under noncancelable operating leases as of June 30, 2022 were as follows: (In millions) 2022 (remaining six months) $ 51.4 2023 99.4 2024 90.8 2025 77.9 2026 63.5 Thereafter 139.0 Total minimum rents receivable $ 522.0 |
Schedule of Direct Finance Lease Income | The Company's income from real estate leases receivables for the three and six months ended June 30, 2022 and 2021 was as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In millions) Interest income $ 0.4 $ 0.5 $ 0.8 $ 1.1 Variable lease income 0.2 0.2 0.4 0.3 Selling (loss) profit (0.1) — 0.4 — Total real estate lease income $ 0.5 $ 0.7 $ 1.6 $ 1.4 |
Schedule of Future Minimum Payments as a Lessor Under Direct Financing Leases | Minimum payments to be received as lessor under noncancelable real estate leases as of June 30, 2022 were as follows: (In millions) 2022 (remaining six months) $ 3.7 2023 4.5 2024 2.3 2025 1.5 2026 1.5 Thereafter 12.2 Total minimum rents receivable 25.7 Less: unearned income (6.3) Total net investment in real estate leases 19.4 Less: current portion (5.3) Long-term investment in real estate leases $ 14.1 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | At June 30, 2022 and December 31, 2021, long-term debt consisted of the following: June 30, 2022 December 31, 2021 (In millions) Series 2019-1 4.194% Fixed Rate Senior Secured Notes, Class A-2-I $ 693.0 $ 693.0 Series 2019-1 4.723% Fixed Rate Senior Secured Notes, Class A-2-II 594.0 594.0 Debt issuance costs (6.3) (7.4) Long-term debt, net of debt issuance costs 1,280.7 1,279.6 Current portion of long-term debt — — Long-term debt $ 1,280.7 $ 1,279.6 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
Dividends Declared | Dividends declared and paid per share for the three and six months ended June 30, 2022 and 2021 were as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Dividends declared per common share $ 0.51 $ — $ 0.97 $ — Dividends paid per common share $ — $ — $ 0.86 $ — |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Components of the Company’s Stock-Based Compensation Expense | The following table summarizes the components of stock-based compensation expense included in general and administrative expenses in the Consolidated Statements of Comprehensive Income: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Total stock-based compensation expense: (In millions) Equity classified awards expense $ 4.0 $ 2.5 $ 8.4 $ 5.6 Liability classified awards expense 1.0 0.5 1.4 2.0 Total pre-tax stock-based compensation expense 5.0 3.0 9.8 7.6 Book income tax benefit (1.2) (0.8) (2.4) (1.9) Total stock-based compensation expense, net of tax $ 3.8 $ 2.2 $ 7.4 $ 5.7 |
Schedule of Stock Option Valuation Assumptions | The following table summarizes the assumptions used in the Black-Scholes model for stock options granted during the six months ended June 30, 2022. Risk-free interest rate 1.7 % Historical volatility 70.1 % Dividend yield 2.6 % Expected years until exercise 4.5 Fair value of options granted $33.23 |
Schedule of Stock Option Activity | Stock option balances at June 30, 2022, and activity for the six months ended June 30, 2022 were as follows: Shares Weighted Weighted Average Aggregate Outstanding at December 31, 2021 475,904 $ 76.65 Granted 75,795 70.08 Exercised (3,505) 68.80 Expired (2,448) 94.43 Forfeited (2,635) 90.54 Outstanding at June 30, 2022 543,111 75.64 6.4 $ 1.9 Vested at June 30, 2022 and Expected to Vest 521,010 75.74 6.3 $ 1.9 Exercisable at June 30, 2022 373,651 $ 75.86 5.4 $ 1.7 |
Schedule of Restricted Stock Unit Activity | Outstanding balances as of June 30, 2022, and activity related to restricted stock and restricted stock units for the six months ended June 30, 2022 were as follows: Restricted Weighted Stock-Settled Restricted Weighted Outstanding at December 31, 2021 276,611 $ 80.85 105,592 $ 71.00 Granted 174,479 70.19 59,002 49.36 Released (77,563) 90.37 (42,107) 66.45 Forfeited (15,708) 77.95 — — Outstanding at June 30, 2022 357,819 $ 73.72 122,487 $ 62.19 |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The Company has granted cash-settled restricted stock units to certain employees. These instruments are recorded as liabilities at fair value as of the respective period end. Cash-Settled Restricted Outstanding at December 31, 2021 12,799 Granted 67 Released (12,866) Outstanding at June 30, 2022 — |
Net Income (Loss) per Share (Ta
Net Income (Loss) per Share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Computation of the Company’s Basic and Diluted Net Income per Share | The computation of the Company's basic and diluted net income per share is as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In thousands, except per share data) Numerator for basic and diluted income per common share: Net income $ 23,962 $ 29,362 $ 48,812 $ 54,965 Less: Net income allocated to unvested participating restricted stock (673) (657) (1,273) (1,431) Net income available to common stockholders - basic 23,289 28,705 47,539 53,534 Effect of unvested participating restricted stock in two-class calculation 1 3 1 10 Net income available to common stockholders - diluted $ 23,290 $ 28,708 $ 47,540 $ 53,544 Denominator: Weighted average outstanding shares of common stock - basic 16,050 16,886 16,386 16,673 Dilutive effect of stock options 30 91 32 129 Weighted average outstanding shares of common stock - diluted 16,080 16,977 16,418 16,802 Net income per common share: Basic $ 1.45 $ 1.70 $ 2.90 $ 3.21 Diluted $ 1.45 $ 1.69 $ 2.90 $ 3.19 |
Segments (Tables)
Segments (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information by Segment | Information on segments is as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In millions) Revenues from external customers: Franchise operations $ 168.3 $ 166.9 $ 329.5 $ 307.9 Rental operations 29.1 27.4 57.9 53.5 Company restaurants 39.5 38.2 78.9 74.2 Financing operations 0.9 1.1 1.9 2.2 Total $ 237.8 $ 233.6 $ 468.2 $ 437.8 Interest expense: Rental operations $ 1.0 $ 1.3 $ 2.2 $ 2.6 Company restaurants 0.8 0.8 1.6 1.7 Corporate 15.4 15.7 30.9 32.2 Total $ 17.2 $ 17.8 $ 34.7 $ 36.5 Depreciation and amortization: Franchise operations $ 2.5 $ 2.5 $ 5.0 $ 5.0 Rental operations 2.6 2.8 5.3 5.6 Company restaurants 1.9 1.8 3.8 3.5 Corporate 3.0 2.9 5.9 5.9 Total $ 10.0 $ 10.0 $ 20.0 $ 20.0 Gross profit (loss), by segment: Franchise operations $ 86.0 $ 87.7 $ 169.2 $ 163.7 Rental operations 7.2 6.8 13.9 12.0 Company restaurants 1.6 3.4 3.6 6.5 Financing operations 0.9 1.0 1.7 2.0 Total gross profit 95.7 98.9 188.4 184.2 Corporate and unallocated expenses, net (63.2) (60.2) (121.8) (121.5) Income before income taxes $ 32.5 $ 38.7 $ 66.7 $ 62.7 |
Closure and Impairment Charges
Closure and Impairment Charges (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Details of Impairment of Long-Lived Assets Held and Used by Asset | Closure and impairment charges for the three and six months ended June 30, 2022 and 2021 were as follows: Closure and Impairment Charges Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In millions) Closure charges $ 1.0 $ 1.0 $ 1.2 $ 2.9 Long-lived tangible asset impairment 0.3 1.6 0.3 1.7 Total closure and impairment charges $ 1.3 $ 2.6 $ 1.5 $ 4.6 |
Schedule of Restructuring Reserve by Type of Cost | Closure and impairment charges for the three and six months ended June 30, 2022 and 2021 were as follows: Closure and Impairment Charges Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (In millions) Closure charges $ 1.0 $ 1.0 $ 1.2 $ 2.9 Long-lived tangible asset impairment 0.3 1.6 0.3 1.7 Total closure and impairment charges $ 1.3 $ 2.6 $ 1.5 $ 4.6 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Non-Current Financial Liabilities | The fair values of the Company's 2019 Class A-2 Notes at June 30, 2022 and December 31, 2021 were as follows: June 30, 2022 December 31, 2021 (In millions) Face Value of Class A-2 Notes $ 1,287.0 $ 1,287.0 Fair Value of Class A-2 Notes $ 1,253.8 $ 1,312.9 |
Cash, Cash Equivalents and Re_2
Cash, Cash Equivalents and Restricted Cash (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash and Cash Equivalents | The components of cash and cash equivalents were as follows: June 30, 2022 December 31, 2021 (In millions) Money market funds $ 15.0 $ 30.0 IHOP advertising funds and gift card programs 82.1 101.5 Other depository accounts 166.4 229.9 Total cash and cash equivalents $ 263.5 $ 361.4 |
Restrictions on Cash and Cash Equivalents | The components of current restricted cash were as follows: June 30, 2022 December 31, 2021 (In millions) Securitized debt reserves $ 29.6 $ 29.9 Applebee's advertising funds 20.1 17.5 Other 0.1 0.1 Total current restricted cash $ 49.8 $ 47.5 |
Revenue Disclosures - Disaggreg
Revenue Disclosures - Disaggregation of Franchise Revenue by Major Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Franchise Revenue: | ||||
Disaggregation of Revenue [Line Items] | ||||
Total franchise revenue | $ 168,259 | $ 166,954 | $ 329,491 | $ 307,930 |
Royalties | ||||
Disaggregation of Revenue [Line Items] | ||||
Total franchise revenue | 78,006 | 78,124 | 153,248 | 142,401 |
Advertising fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Total franchise revenue | 74,111 | 72,324 | 144,994 | 133,209 |
Pancake and waffle dry mix sales and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total franchise revenue | 14,077 | 13,525 | 27,008 | 24,415 |
Franchise and development fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Total franchise revenue | $ 2,065 | $ 2,981 | $ 4,241 | $ 7,905 |
Revenue Disclosures - Narrative
Revenue Disclosures - Narrative (Details) - Receivables from Franchise Revenue Transactions - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Billed and unbilled receivables | $ 65.4 | $ 66 |
Billed and unbilled receivables, accumulated allowance for credit loss | $ 0.7 | $ 1.1 |
Revenue Disclosures - Changes i
Revenue Disclosures - Changes in the Company's Contract Liability for Deferred Franchise and Development Fees (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Change in Contract with Customer, Liability [Roll Forward] | |
Balance at December 31, 2021 | $ 53,346 |
Recognized as revenue during the six months ended June 30, 2022 | (4,075) |
Fees deferred during the six months ended June 30, 2022 | 1,679 |
Balance at June 30, 2022 | $ 50,950 |
Revenue Disclosures - Deferred
Revenue Disclosures - Deferred Revenue Expected to be Recognized (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 50,950 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | 50,950 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | 3,539 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 3,539 |
Performance obligations expected to be satisfied, expected timing | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 6,994 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 6,994 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 6,297 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 6,297 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 5,516 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 5,516 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 4,692 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 4,692 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 23,912 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 23,912 |
Performance obligations expected to be satisfied, expected timing |
Current Expected Credit Losse_3
Current Expected Credit Losses ("CECL") - Narrative (Details) $ in Millions | Jun. 30, 2022 USD ($) lease |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
Operating lease, weighted average remaining lease term | 6 years 7 months 6 days |
Finance lease, weighted average remaining lease term | 10 years |
Notes Receivable | Applebee's | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
Accounts and financing receivable, allowance for credit loss | $ | $ 9.2 |
Equipment Notes | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
Operating lease, weighted average remaining lease term | 4 years 3 months 18 days |
Lease Receivables | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
Number of properties subject to ground leases | lease | 62 |
Finance lease, weighted average remaining lease term | 5 years 9 months 18 days |
Current Expected Credit Losse_4
Current Expected Credit Losses ("CECL") - Components of Receivables (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 62,500 | $ 63,600 |
Gift card receivables | 6,800 | 33,400 |
Notes receivable | 17,900 | 19,700 |
Financing receivables: | 69,900 | |
Accounts and financing receivable, before allowance for credit loss | 145,200 | 174,400 |
Less: allowance for credit losses | (10,200) | (11,900) |
Accounts and financing receivable, after allowance for credit loss | 135,000 | 162,500 |
Less: current portion | (91,888) | (119,968) |
Long-term receivables | 43,100 | 42,500 |
Equipment leases receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing receivables: | 30,200 | 33,400 |
Real estate leases receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing receivables: | 19,400 | 16,700 |
Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing receivables: | $ 8,400 | $ 7,600 |
Current Expected Credit Losse_5
Current Expected Credit Losses ("CECL") - Changes in the Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Balance, December 31, 2021 | $ 11,900 | |||
Bad debt (credit) expense | $ (147) | $ (291) | (446) | $ (2,284) |
Advertising provision adjustment | (500) | |||
Write-offs | (800) | |||
Recoveries | 0 | |||
Balance, June 30, 2022 | 10,200 | 10,200 | ||
Accounts Receivable | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Balance, December 31, 2021 | 1,000 | |||
Bad debt (credit) expense | (200) | |||
Advertising provision adjustment | 0 | |||
Write-offs | (100) | |||
Recoveries | 0 | |||
Balance, June 30, 2022 | 700 | 700 | ||
Notes receivable, short-term | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Balance, December 31, 2021 | 3,800 | |||
Bad debt (credit) expense | 800 | |||
Advertising provision adjustment | (300) | |||
Write-offs | (500) | |||
Recoveries | 0 | |||
Balance, June 30, 2022 | 3,800 | 3,800 | ||
Notes receivable, long-term | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Balance, December 31, 2021 | 6,600 | |||
Bad debt (credit) expense | (1,000) | |||
Advertising provision adjustment | (200) | |||
Write-offs | 0 | |||
Recoveries | 0 | |||
Balance, June 30, 2022 | 5,400 | 5,400 | ||
Lease Receivables | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Balance, December 31, 2021 | 200 | |||
Bad debt (credit) expense | (100) | |||
Advertising provision adjustment | 0 | |||
Write-offs | 0 | |||
Recoveries | 0 | |||
Balance, June 30, 2022 | 100 | 100 | ||
Equipment Notes | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Balance, December 31, 2021 | 100 | |||
Bad debt (credit) expense | 100 | |||
Advertising provision adjustment | 0 | |||
Write-offs | 0 | |||
Recoveries | 0 | |||
Balance, June 30, 2022 | 200 | 200 | ||
Other | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Balance, December 31, 2021 | 200 | |||
Bad debt (credit) expense | 0 | |||
Advertising provision adjustment | 0 | |||
Write-offs | (200) | |||
Recoveries | 0 | |||
Balance, June 30, 2022 | $ 0 | $ 0 |
Current Expected Credit Losse_6
Current Expected Credit Losses ("CECL") - Delinquency Status of Receivables (Details) $ in Millions | Jun. 30, 2022 USD ($) |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | $ 69.9 |
Current | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 68.2 |
30-59 days | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 0 |
60-89 days | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 0 |
90-119 days | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 0.1 |
120+ days | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 1.6 |
Notes receivable, short-term | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 6.3 |
Notes receivable, short-term | Current | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 4.6 |
Notes receivable, short-term | 30-59 days | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 0 |
Notes receivable, short-term | 60-89 days | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 0 |
Notes receivable, short-term | 90-119 days | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 0.1 |
Notes receivable, short-term | 120+ days | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 1.6 |
Notes receivable, long-term | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 11.6 |
Notes receivable, long-term | Current | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 11.6 |
Notes receivable, long-term | 30-59 days | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 0 |
Notes receivable, long-term | 60-89 days | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 0 |
Notes receivable, long-term | 90-119 days | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 0 |
Notes receivable, long-term | 120+ days | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 0 |
Lease Receivables | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 19.4 |
Lease Receivables | Current | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 19.4 |
Lease Receivables | 30-59 days | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 0 |
Lease Receivables | 60-89 days | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 0 |
Lease Receivables | 90-119 days | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 0 |
Lease Receivables | 120+ days | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 0 |
Equipment Notes | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 30.2 |
Equipment Notes | Current | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 30.2 |
Equipment Notes | 30-59 days | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 0 |
Equipment Notes | 60-89 days | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 0 |
Equipment Notes | 90-119 days | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 0 |
Equipment Notes | 120+ days | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 0 |
Other | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 2.4 |
Other | Current | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 2.4 |
Other | 30-59 days | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 0 |
Other | 60-89 days | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 0 |
Other | 90-119 days | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 0 |
Other | 120+ days | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | $ 0 |
Current Expected Credit Losse_7
Current Expected Credit Losses ("CECL") - Year of Origination of Notes and Financing Receivables (Details) $ in Millions | Jun. 30, 2022 USD ($) |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Financing receivables: | $ 69.9 |
Total | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2022 | 6.8 |
2021 | 14 |
2020 | 1.9 |
2019 | 1 |
2018 | 0 |
Prior | 43.8 |
Financing receivables: | 67.5 |
Notes receivable, short and long-term | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2022 | 0.5 |
2021 | 11.4 |
2020 | 0.5 |
2019 | 0.2 |
2018 | 0 |
Prior | 5.3 |
Financing receivables: | 17.9 |
Lease Receivables | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2022 | 6.3 |
2021 | 2.6 |
2020 | 1.4 |
2019 | 0.8 |
2018 | 0 |
Prior | 8.3 |
Financing receivables: | 19.4 |
Equipment Notes | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2022 | 0 |
2021 | 0 |
2020 | 0 |
2019 | 0 |
2018 | 0 |
Prior | 30.2 |
Financing receivables: | $ 30.2 |
Lease Disclosures - Narrative (
Lease Disclosures - Narrative (Details) | Jun. 30, 2022 restaurant lease |
Lessee, Lease, Description [Line Items] | |
Number of company-operated restaurants located on leased real estate properties | 69 |
Lessor, number of leases requiring additional rent payments based on a percentage of restaurant sales | lease | 285 |
Lessee, number of leases requiring additional rent payments based on a percentage of restaurant sales | lease | 40 |
Finance lease, weighted average remaining lease term | 10 years |
Operating lease, weighted average remaining lease term | 6 years 7 months 6 days |
Finance lease, weighted average discount rate, percent | 9.80% |
Operating lease, weighted average discount rate, percent | 5.50% |
IHOP | |
Lessee, Lease, Description [Line Items] | |
Number of franchisee-operated restaurants | 540 |
Number of properties leased | 50 |
Lessee, operating lease, renewal term | 5 years |
IHOP | Minimum | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, term of contract | 20 years |
IHOP | Maximum | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, term of contract | 25 years |
Applebee's | |
Lessee, Lease, Description [Line Items] | |
Number of franchisee-operated restaurants | 1 |
Number of properties leased | 1 |
Applebee's | Minimum | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, term of contract | 10 years |
Lessee, operating lease, renewal term | 5 years |
Applebee's | Maximum | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, term of contract | 20 years |
Lessee, operating lease, renewal term | 20 years |
Lease Disclosures - Components
Lease Disclosures - Components of Lease Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Finance lease cost: | ||||
Amortization of right-of-use assets | $ 1.1 | $ 1.1 | $ 2.2 | $ 2.3 |
Interest on lease liabilities | 1.2 | 1.4 | 2.5 | 2.8 |
Operating lease cost | 21.2 | 21 | 42.3 | 42.4 |
Variable lease cost | 1.9 | 0.5 | 3.6 | 0.7 |
Short-term lease cost | 0 | 0 | 0 | 0 |
Sublease income | (26.6) | (24.9) | (53.1) | (49.1) |
Lease (income) cost | $ (1.2) | (0.9) | $ (2.5) | (0.9) |
Previously Reported | ||||
Finance lease cost: | ||||
Operating lease cost | $ 24.7 | $ 49.8 |
Lease Disclosures - Future Mini
Lease Disclosures - Future Minimum Lease Payments Under Noncancelable Leases as Lessee (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Finance Leases | ||
2022 (remaining six months) | $ 7,300 | |
2023 | 12,200 | |
2024 | 10,600 | |
2025 | 9,000 | |
2026 | 8,400 | |
Thereafter | 54,600 | |
Total minimum lease payments | 102,100 | |
Less: interest/imputed interest | (28,800) | |
Total obligations | 73,300 | |
Less: current portion | (9,700) | |
Long-term lease obligations | 63,562 | $ 59,625 |
Operating Leases | ||
2022 (remaining six months) | 41,900 | |
2023 | 68,500 | |
2024 | 76,800 | |
2025 | 65,100 | |
2026 | 56,100 | |
Thereafter | 180,200 | |
Total minimum lease payments | 488,600 | |
Less: interest/imputed interest | (78,800) | |
Total obligations | 409,800 | |
Less: current portion | (71,663) | (72,079) |
Long-term lease obligations | $ 338,169 | $ 320,848 |
Lease Disclosures - Payment for
Lease Disclosures - Payment for Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Leases [Abstract] | ||||
Principal payments on finance lease obligations | $ 2,400 | $ 2,600 | $ 4,696 | $ 5,244 |
Interest payments on finance lease obligations | 1,200 | 1,400 | 2,500 | 2,800 |
Payments on operating leases | 22,800 | 22,800 | 45,800 | 45,800 |
Variable lease payments | $ 1,800 | $ 300 | $ 3,900 | $ 600 |
Lease Disclosures - Component_2
Lease Disclosures - Components of Lease Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Leases [Abstract] | ||||
Minimum lease payments | $ 24 | $ 23.9 | $ 47.8 | $ 47.7 |
Variable lease income | 4.6 | 2.8 | 8.5 | 4.4 |
Total operating lease income | $ 28.6 | $ 26.7 | $ 56.3 | $ 52.1 |
Lease Disclosures - Future Mi_2
Lease Disclosures - Future Minimum Payments to be Received as Lessor Under Noncancelable Operating Leases (Details) $ in Millions | Jun. 30, 2022 USD ($) |
Leases [Abstract] | |
2022 (remaining six months) | $ 51.4 |
2023 | 99.4 |
2024 | 90.8 |
2025 | 77.9 |
2026 | 63.5 |
Thereafter | 139 |
Total minimum rents receivable | $ 522 |
Lease Disclosures - Schedule of
Lease Disclosures - Schedule of Income From Direct Financing Leases (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Leases [Abstract] | ||||
Interest income | $ 0.4 | $ 0.5 | $ 0.8 | $ 1.1 |
Variable lease income | 0.2 | 0.2 | 0.4 | 0.3 |
Selling (loss) profit | (0.1) | 0 | 0.4 | 0 |
Total real estate lease income | $ 0.5 | $ 0.7 | $ 1.6 | $ 1.4 |
Lease Disclosures - Future Mi_3
Lease Disclosures - Future Minimum Payments to be Received as Lessor Under Noncancelable Direct Financing Leases (Details) $ in Millions | Jun. 30, 2022 USD ($) |
Leases [Abstract] | |
2022 (remaining six months) | $ 3.7 |
2023 | 4.5 |
2024 | 2.3 |
2025 | 1.5 |
2026 | 1.5 |
Thereafter | 12.2 |
Total minimum rents receivable | 25.7 |
Less: unearned income | (6.3) |
Total net investment in real estate leases | 19.4 |
Less: current portion | (5.3) |
Long-term investment in real estate leases | $ 14.1 |
Long-Term Debt - Schedule of De
Long-Term Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 05, 2019 |
Debt Instrument [Line Items] | |||
Debt issuance costs | $ (6,300) | $ (7,400) | |
Long-term debt, net of debt issuance costs | 1,280,700 | 1,279,600 | |
Current portion of long-term debt | 0 | 0 | |
Long-term debt | $ 1,280,747 | $ 1,279,623 | |
Series 2019-1 4.194% Fixed Rate Senior Secured Notes, Class A-2-I | |||
Debt Instrument [Line Items] | |||
Debt interest rate (percent) | 4.194% | 4.194% | 4.194% |
Senior notes | $ 693,000 | $ 693,000 | |
Series 2019-1 4.723% Fixed Rate Senior Secured Notes, Class A-2-II | |||
Debt Instrument [Line Items] | |||
Debt interest rate (percent) | 4.723% | 4.723% | 4.723% |
Senior notes | $ 594,000 | $ 594,000 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Jun. 05, 2019 | Mar. 31, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | |||||||
Ratio of indebtedness to net capital | 427% | 427% | |||||
Threshold percentage | 50% | 50% | |||||
DSCR less than 1.75x - Cash Flow Sweeping Event | 175% | 175% | |||||
DSCR less than 1.20x - Rapid Amortization Event | 120% | 120% | |||||
Interest-only DSCR less than 1.20x - Manager Termination Event | 120% | 120% | |||||
Interest-only DSCR less than 1.10x - Default Event | 110% | 110% | |||||
Debt service coverage ratio | 431% | 431% | |||||
Unamortized debt issuance costs | $ 6,300,000 | $ 6,300,000 | $ 7,400,000 | ||||
Letter of Credit | Eurodollar | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 1% | ||||||
Letter of Credit | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 1.15% | ||||||
Letter of Credit | Federal Funds Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 0.50% | ||||||
2019 Class A-2 Notes | |||||||
Debt Instrument [Line Items] | |||||||
Additional interest on fixed rate | 5% | ||||||
Debt instrument, term | 10 years | ||||||
Quarterly principal payment | $ 3,250,000 | $ 3,250,000 | |||||
Covenant compliance, leverage ratio, maximum | 525% | ||||||
Amortization of debt issuance costs | 600,000 | $ 600,000 | 1,100,000 | $ 1,100,000 | |||
Unamortized debt issuance costs | 6,300,000 | 6,300,000 | |||||
Annual principal payment | $ 13,000,000 | $ 13,000,000 | |||||
2019 Class A-2 Notes | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Ratio of indebtedness to net capital | 525% | 525% | |||||
2019 Class A-2-I Notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt interest rate (percent) | 4.194% | 4.194% | 4.194% | 4.194% | |||
Debt instrument, face amount | $ 700,000,000 | ||||||
Make-whole premium | $ 0 | $ 0 | |||||
2019 Class A-2-I Notes | Ten Year United States Treasury Bill Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.15% | ||||||
2019 Class A-2-II Notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt interest rate (percent) | 4.723% | 4.723% | 4.723% | 4.723% | |||
Debt instrument, face amount | $ 600,000,000 | ||||||
Make-whole premium | $ 16,000,000 | $ 16,000,000 | |||||
2019 Class A-2-II Notes | Ten Year United States Treasury Bill Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.64% | ||||||
Revolver | |||||||
Debt Instrument [Line Items] | |||||||
Letters of credit outstanding, amount | 3,500,000 | 3,500,000 | |||||
Line of credit facility, current borrowing capacity | 221,500,000 | 221,500,000 | |||||
Revolver | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 225,000,000 | 225,000,000 | $ 225,000,000 | ||||
Fee on unused portion of line of credit (percent) | 0.50% | ||||||
Proceeds from credit facility | $ 220,000,000 | ||||||
Repayments of long-term lines of credit | $ 220,000,000 | ||||||
Long-term Line of Credit | 0 | $ 0 | |||||
Amortization of debt issuance costs | 100,000 | $ 100,000 | 300,000 | $ 300,000 | |||
Unamortized debt issuance costs | $ 1,200,000 | $ 1,200,000 | |||||
Revolver | Revolving Credit Facility | Eurodollar | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.15% | ||||||
Revolver | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.15% | ||||||
Percentage of advances drawn | 60% | ||||||
Revolver | Revolving Credit Facility | Commercial Paper Funding Rate Of Conduit Investor | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.15% | ||||||
Percentage of advances drawn | 40% | ||||||
Revolver | Letter of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.15% |
Stockholders' Deficit - Dividen
Stockholders' Deficit - Dividends Declared and Paid per Share (Details) - $ / shares | 3 Months Ended | 6 Months Ended | |||||
May 12, 2022 | Feb. 17, 2022 | Oct. 28, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Equity [Abstract] | |||||||
Dividends declared per common share (USD per share) | $ 0.51 | $ 0.46 | $ 0.40 | $ 0.51 | $ 0 | $ 0.97 | $ 0 |
Dividends paid per common share (USD per share) | $ 0 | $ 0 | $ 0.86 | $ 0 |
Stockholders' Deficit - Narrati
Stockholders' Deficit - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 38 Months Ended | ||||||
May 12, 2022 | Feb. 17, 2022 | Oct. 28, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Mar. 31, 2022 | Feb. 28, 2019 | |
Equity, Class of Treasury Stock [Line Items] | |||||||||
Dividends declared per common share (USD per share) | $ 0.51 | $ 0.46 | $ 0.40 | $ 0.51 | $ 0 | $ 0.97 | $ 0 | ||
Purchase of Company common stock | $ 62,608,000 | $ 104,053,000 | |||||||
Reissuance of treasure stock (in shares) | 177,984 | ||||||||
Reissuance of treasury stock | $ 0 | $ 3,027,000 | $ 241,000 | $ 22,511,000 | |||||
Treasury Stock | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Reissuance of treasury stock | $ 8,300,000 | ||||||||
2019 Repurchase Program | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Stock repurchase program, authorized amount | $ 200,000,000 | ||||||||
Purchase of common stock (in shares) | 1,501,100 | 2,344,804 | |||||||
Purchase of Company common stock | $ 104,100,000 | $ 175,800,000 | |||||||
2022 Repurchase Program | |||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||
Stock repurchase program, authorized amount | $ 250,000,000 | ||||||||
Purchase of common stock (in shares) | 912,992 | ||||||||
Purchase of Company common stock | $ 62,600,000 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||||
Effective income tax rate (percent) | 26.80% | 12.30% | |||
Income tax provision | $ (8,569) | $ (9,296) | $ (17,876) | $ (7,707) | |
Pretax book income (loss) | 32,531 | $ 38,658 | 66,688 | $ 62,672 | |
Gross unrecognized tax benefit | 2,200 | 2,200 | $ 1,900 | ||
Expected change in unrecognized tax benefits | 300 | 300 | |||
Accrued interest on income taxes | 700 | 700 | 600 | ||
Accrued penalties on income taxes, less than | $ 100 | $ 100 | $ 100 |
Stock-Based Compensation - Comp
Stock-Based Compensation - Components of Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||||
Equity classified awards expense | $ 4 | $ 2.5 | $ 8.4 | $ 5.6 |
Liability classified awards expense | 1 | 0.5 | 1.4 | 2 |
Total pre-tax stock-based compensation expense | 5 | 3 | 9.8 | 7.6 |
Book income tax benefit | (1.2) | (0.8) | (2.4) | (1.9) |
Total stock-based compensation expense, net of tax | $ 3.8 | $ 2.2 | $ 7.4 | $ 5.7 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ 5,000,000 | $ 3,000,000 | $ 9,800,000 | $ 7,600,000 | |
Accrued employee compensation and benefits | 21,202,000 | 21,202,000 | $ 40,785,000 | ||
Restricted Stock and Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total compensation cost not yet recognized | 22,700,000 | $ 22,700,000 | |||
Total compensation cost not yet recognized, period for recognition (in years) | 1 year 7 months 6 days | ||||
Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total compensation cost not yet recognized | 3,900,000 | $ 3,900,000 | |||
Total compensation cost not yet recognized, period for recognition (in years) | 1 year 7 months 6 days | ||||
Cash-Settled Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | 0 | 100,000 | $ 200,000 | (1,500,000) | |
Accrued employee compensation and benefits | 0 | 0 | 900,000 | ||
LTIP | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | 1,000,000 | $ 400,000 | 1,300,000 | $ 500,000 | |
Accrued employee compensation and benefits | $ 2,200,000 | $ 2,200,000 | $ 1,200,000 | ||
Award vesting period (in years) | 3 years | ||||
LTIP | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Multiplier for target award based on total shareholder return on common stock (percent) | 0% | ||||
LTIP | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Multiplier for target award based on total shareholder return on common stock (percent) | 200% |
Stock-Based Compensation - Weig
Stock-Based Compensation - Weighted Average Assumptions of Options Value (Details) - Stock Options | 6 Months Ended |
Jun. 30, 2022 $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 1.70% |
Historical volatility | 70.10% |
Dividend yield | 2.60% |
Expected years until exercise | 4 years 6 months |
Fair value of options granted (USD per share) | $ 33.23 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) $ / shares in Units, $ in Millions | 6 Months Ended |
Jun. 30, 2022 USD ($) $ / shares shares | |
Shares | |
Outstanding, beginning of period (in shares) | shares | 475,904 |
Granted (in shares) | shares | 75,795 |
Exercised (in shares) | shares | (3,505) |
Expired (in shares) | shares | (2,448) |
Forfeited (in shares) | shares | (2,635) |
Outstanding, end of period (in shares) | shares | 543,111 |
Vested and expected to vest (in shares) | shares | 521,010 |
Exercisable (in shares) | shares | 373,651 |
Weighted Average Exercise Price | |
Beginning of period (USD per share) | $ / shares | $ 76.65 |
Granted (USD per share) | $ / shares | 70.08 |
Exercised (USD per share) | $ / shares | 68.80 |
Expired (USD per share) | $ / shares | 94.43 |
Forfeited (USD per share) | $ / shares | 90.54 |
End of period (USD per share) | $ / shares | 75.64 |
Vested and expected to vest (USD per share) | $ / shares | 75.74 |
Exercisable (USD per share) | $ / shares | $ 75.86 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Weighted average remaining contractual term (in years) | 6 years 4 months 24 days |
Weighted average remaining contractual term, vested and expected to vest (in years) | 6 years 3 months 18 days |
Weighted average remaining contractual term, exercisable (in years) | 5 years 4 months 24 days |
Options, outstanding, intrinsic value | $ | $ 1.9 |
Options, vested and expected to vest, intrinsic value | $ | 1.9 |
Options, vested and expected to vest, exercisable | $ | $ 1.7 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Activity (Details) | 6 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Restricted Stock | |
Granted (in shares) | shares | 59,002 |
Restricted Stock | |
Restricted Stock | |
Beginning of period (in shares) | shares | 276,611 |
Granted (in shares) | shares | 174,479 |
Released (in shares) | shares | (77,563) |
Forfeited (in shares) | shares | (15,708) |
End of period (in shares) | shares | 357,819 |
Weighted Average Grant Date Fair Value | |
Beginning balance (USD per share) | $ / shares | $ 80.85 |
Granted (USD per share) | $ / shares | 70.19 |
Released (USD per share) | $ / shares | 90.37 |
Forfeited (USD per share) | $ / shares | 77.95 |
Ending balance (USD per share) | $ / shares | $ 73.72 |
Stock-Settled Restricted Stock Units | |
Restricted Stock | |
Beginning of period (in shares) | shares | 105,592 |
Released (in shares) | shares | (42,107) |
Forfeited (in shares) | shares | 0 |
End of period (in shares) | shares | 122,487 |
Weighted Average Grant Date Fair Value | |
Beginning balance (USD per share) | $ / shares | $ 71 |
Granted (USD per share) | $ / shares | 49.36 |
Released (USD per share) | $ / shares | 66.45 |
Forfeited (USD per share) | $ / shares | 0 |
Ending balance (USD per share) | $ / shares | $ 62.19 |
Stock-Based Compensation - Liab
Stock-Based Compensation - Liability Classified Awards - Cash-settled Restricted Stock Units (Details) | 6 Months Ended |
Jun. 30, 2022 shares | |
Restricted Stock | |
Granted (in shares) | 59,002 |
Cash-Settled Restricted Stock Units | |
Restricted Stock | |
Beginning of period (in shares) | 12,799 |
Granted (in shares) | 67 |
Released (in shares) | (12,866) |
End of period (in shares) | 0 |
Net Income (Loss) per Share - C
Net Income (Loss) per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Numerator for basic and diluted income per common share: | ||||
Net income | $ 23,962 | $ 29,362 | $ 48,812 | $ 54,965 |
Less: Net income allocated to unvested participating restricted stock | (673) | (657) | (1,273) | (1,431) |
Net income available to common stockholders | 23,289 | 28,705 | 47,539 | 53,534 |
Effect of unvested participating restricted stock in two-class calculation | 1 | 3 | 1 | 10 |
Net income available to common stockholders - diluted | $ 23,290 | $ 28,708 | $ 47,540 | $ 53,544 |
Denominator: | ||||
Weighted average outstanding shares of common stock - basic (in shares) | 16,050 | 16,886 | 16,386 | 16,673 |
Dilutive effect of stock options (in shares) | 30 | 91 | 32 | 129 |
Weighted average outstanding shares of common stock - diluted (in shares) | 16,080 | 16,977 | 16,418 | 16,802 |
Net income per common share: | ||||
Net income per common share - basic (USD per share) | $ 1.45 | $ 1.70 | $ 2.90 | $ 3.21 |
Net income per common share - diluted (USD per share) | $ 1.45 | $ 1.69 | $ 2.90 | $ 3.19 |
Segments - Narrative (Details)
Segments - Narrative (Details) | 6 Months Ended |
Jun. 30, 2022 segment restaurant country territory | |
Franchisor Disclosure [Line Items] | |
Number of operating segments (segment) | segment | 5 |
Number of reportable segments (segment) | segment | 4 |
Applebee's | |
Franchisor Disclosure [Line Items] | |
Number of territories in which entity operates (territory) | territory | 2 |
Number of countries in which entity operates (country) | country | 11 |
IHOP | |
Franchisor Disclosure [Line Items] | |
Number of territories in which entity operates (territory) | territory | 2 |
Number of countries in which entity operates (country) | country | 8 |
Franchised Units | Applebee's | |
Franchisor Disclosure [Line Items] | |
Number of restaurants (restaurant) | 1,604 |
Franchised Units | IHOP | |
Franchisor Disclosure [Line Items] | |
Number of restaurants (restaurant) | 1,764 |
Entity Operated Units | Applebee's | |
Franchisor Disclosure [Line Items] | |
Number of restaurants (restaurant) | 69 |
Segments - Schedule of Segment
Segments - Schedule of Segment Reporting Information by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Rental revenues | $ 29,066 | $ 27,382 | $ 57,873 | $ 53,524 |
Total revenues | 237,794 | 233,619 | 468,217 | 437,818 |
Interest expense | 17,200 | 17,800 | 34,700 | 36,500 |
Depreciation and amortization | 10,000 | 10,000 | 19,969 | 19,976 |
Pretax book income (loss) | 32,531 | 38,658 | 66,688 | 62,672 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Pretax book income (loss) | 95,700 | 98,900 | 188,400 | 184,200 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Interest expense | 15,400 | 15,700 | 30,900 | 32,200 |
Depreciation and amortization | 3,000 | 2,900 | 5,900 | 5,900 |
Pretax book income (loss) | (63,200) | (60,200) | (121,800) | (121,500) |
Franchise operations | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | 2,500 | 2,500 | 5,000 | 5,000 |
Pretax book income (loss) | 86,000 | 87,700 | 169,200 | 163,700 |
Rental operations | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenues | 29,100 | 27,400 | 57,900 | 53,500 |
Interest expense | 1,000 | 1,300 | 2,200 | 2,600 |
Depreciation and amortization | 2,600 | 2,800 | 5,300 | 5,600 |
Pretax book income (loss) | 7,200 | 6,800 | 13,900 | 12,000 |
Company restaurants | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Interest expense | 800 | 800 | 1,600 | 1,700 |
Depreciation and amortization | 1,900 | 1,800 | 3,800 | 3,500 |
Pretax book income (loss) | 1,600 | 3,400 | 3,600 | 6,500 |
Financing operations | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Pretax book income (loss) | 900 | 1,000 | 1,700 | 2,000 |
Franchise Revenue: | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from contract with customer | 168,259 | 166,954 | 329,491 | 307,930 |
Franchise Revenue: | Franchise operations | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from contract with customer | 168,300 | 166,900 | 329,500 | 307,900 |
Company restaurants | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from contract with customer | 38,194 | 78,927 | 74,143 | |
Company restaurants | Company restaurants | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from contract with customer | 39,511 | 38,200 | 78,900 | 74,200 |
Financing revenues | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from contract with customer | 958 | 1,089 | 1,926 | 2,221 |
Financing revenues | Financing operations | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from contract with customer | $ 900 | $ 1,100 | $ 1,900 | $ 2,200 |
Closure and Impairment Charge_2
Closure and Impairment Charges - Long-lived Tangible Asset Impairment and Closure Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Closure charges | $ 1,000 | $ 1,000 | $ 1,200 | $ 2,900 |
Long-lived tangible asset impairment | 300 | 1,600 | 300 | 1,700 |
Total closure and impairment charges | $ 1,311 | $ 2,571 | $ 1,500 | $ 4,600 |
Closure and Impairment Charge_3
Closure and Impairment Charges - Narrative (Details) - IHOP - restaurant | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Goodwill [Line Items] | ||||
Number of restaurants related to prior period closure charge revisions | 35 | 30 | 35 | 50 |
Entity Operated Units | ||||
Goodwill [Line Items] | ||||
Number of restaurants subject to asset impairment | 2 | 2 | ||
Franchised Units | ||||
Goodwill [Line Items] | ||||
Number of restaurants subject to asset impairment | 4 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Non-Current Financial Liabilities (Details) - Level 2 - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Face Value of Class A-2 Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | $ 1,287 | $ 1,287 |
Fair Value of Class A-2 Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | $ 1,253.8 | $ 1,312.9 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - Applebee's - Property Lease Guarantee $ in Millions | Jun. 30, 2022 USD ($) |
Loss Contingencies [Line Items] | |
Potential liability for guaranteed leases | $ 215.8 |
Potential liability for guaranteed leases excluding unexercised option periods | $ 45.5 |
Cash, Cash Equivalents and Re_3
Cash, Cash Equivalents and Restricted Cash - Schedule of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | $ 263,536 | $ 361,412 |
Money market funds | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | 15,000 | 30,000 |
IHOP advertising funds and gift card programs | IHOP | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | 82,100 | 101,500 |
Other depository accounts | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | $ 166,400 | $ 229,900 |
Cash, Cash Equivalents and Re_4
Cash, Cash Equivalents and Restricted Cash - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Cash and Cash Equivalents [Abstract] | ||
Non-current restricted cash | $ 16,400 | $ 16,400 |
Cash, Cash Equivalents and Re_5
Cash, Cash Equivalents and Restricted Cash - Schedule of Current Restricted Cash (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Total current restricted cash | $ 49.8 | $ 47.5 |
Securitized debt reserves | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Total current restricted cash | 29.6 | 29.9 |
Applebee's advertising funds | Applebee's | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Total current restricted cash | 20.1 | 17.5 |
Other | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Total current restricted cash | $ 0.1 | $ 0.1 |
Subsequent Events (Details)
Subsequent Events (Details) | Jul. 26, 2022 restaurant |
Entity Operated Units | Subsequent Event | Applebee's | |
Subsequent Event [Line Items] | |
Number of restaurants subject to refranchising and sale | 69 |