Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 25, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
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 | 10 West Walnut Street, 5th Floor | |
Entity Address, City or Town | Pasadena | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 91103 | |
City Area Code | (818) | |
Local Phone Number | 240-6055 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | DIN | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Small Reporting Company | false | |
Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 15,663,733 | |
Entity Central Index Key | 0000049754 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 181,606 | $ 269,655 |
Receivables, net of allowance of $4,587 (2023) and $4,806 (2022) | 93,119 | 119,981 |
Restricted cash | 37,098 | 38,929 |
Prepaid gift card costs | 23,717 | 30,235 |
Prepaid income taxes | 0 | 3,063 |
Other current assets | 12,831 | 17,901 |
Total current assets | 348,371 | 479,764 |
Non-current restricted cash | 16,400 | 16,400 |
Property and equipment, net | 158,715 | 145,277 |
Operating lease right-of-use assets | 290,859 | 289,123 |
Deferred rent receivable | 39,772 | 42,329 |
Long-term receivables, net of allowance of $5,908 (2023) and $5,529 (2022) | 37,831 | 39,697 |
Goodwill | 254,120 | 253,956 |
Other intangible assets, net | 594,333 | 597,028 |
Other non-current assets, net | 17,668 | 17,917 |
Total assets | 1,758,069 | 1,881,491 |
Current liabilities: | ||
Current maturities of long-term debt | 100,000 | 100,000 |
Accounts payable | 39,085 | 52,067 |
Gift card liability | 140,769 | 171,966 |
Current maturities of operating lease obligations | 57,655 | 59,071 |
Current maturities of finance lease and financing obligations | 7,265 | 7,542 |
Accrued employee compensation and benefits | 13,862 | 23,456 |
Accrued advertising expenses | 18,665 | 24,157 |
Dividends payable | 0 | 8,017 |
Other accrued expenses | 27,871 | 24,446 |
Total current liabilities | 405,172 | 470,722 |
Long-term debt, net, less current maturities | 1,174,564 | 1,241,914 |
Operating lease obligations, less current maturities | 279,766 | 275,120 |
Finance lease obligations, less current maturities | 33,256 | 30,377 |
Financing obligations, less current maturities | 28,029 | 28,358 |
Deferred income taxes, net | 67,351 | 74,651 |
Deferred franchise revenue, long-term | 41,204 | 42,343 |
Other non-current liabilities | 17,410 | 19,090 |
Total liabilities | 2,046,752 | 2,182,575 |
Commitments and contingencies | ||
Stockholders’ deficit: | ||
Preferred stock, $1 par value, 10,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, $0.01 par value; shares: 40,000,000 authorized; March 31, 2023 - 24,915,372 issued, 15,674,739 outstanding; December 31, 2022 - 24,959,972 issued, 15,599,239 outstanding | 249 | 250 |
Additional paid-in-capital | 248,187 | 259,339 |
Retained earnings | 103,931 | 84,538 |
Accumulated other comprehensive loss | (64) | (65) |
Treasury stock, at cost; shares: March 31, 2023 - 9,240,633; December 31, 2022 - 9,360,733 | (640,986) | (645,146) |
Total stockholders’ deficit | (288,683) | (301,084) |
Total liabilities and stockholders’ deficit | $ 1,758,069 | $ 1,881,491 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Receivables, allowance for credit loss | $ 4,587 | $ 4,806 |
Long-term receivables, allowance for credit loss | $ 5,908 | $ 5,529 |
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) | 24,915,372 | 24,959,972 |
Common stock, shares outstanding (in shares) | 15,674,739 | 15,599,239 |
Treasury stock, shares (in shares) | 9,240,633 | 9,360,733 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues: | ||
Rental revenues | $ 31,951 | $ 28,807 |
Total revenues | 213,767 | 230,423 |
Cost of revenues: | ||
Franchise expenses | 87,366 | 78,032 |
Bad debt expense (credit) | 923 | (299) |
Company restaurant expenses | 1,079 | 37,408 |
Interest expense from finance leases | 709 | 768 |
Other rental expenses | 20,899 | 21,355 |
Total rental expenses | 21,608 | 22,123 |
Financing expenses | 98 | 107 |
Total cost of revenues | 110,151 | 137,670 |
Gross profit | 103,616 | 92,753 |
General and administrative expenses | 51,087 | 41,548 |
Interest expense, net | 14,709 | 15,533 |
Closure and impairment charges | 467 | 146 |
Amortization of intangible assets | 2,774 | 2,665 |
Gain on extinguishment of debt | (1,661) | 0 |
Loss (gain) on disposition of assets | 71 | (1,296) |
Income before income taxes | 36,169 | 34,157 |
Income tax provision | (8,759) | (9,307) |
Net income | 27,410 | 24,850 |
Other comprehensive income net of tax: | ||
Foreign currency translation adjustment | 1 | (1) |
Total comprehensive income | 27,411 | 24,849 |
Net income available to common stockholders: | ||
Net income | 27,410 | 24,850 |
Less: Net income allocated to unvested participating restricted stock | (679) | (598) |
Net income available to common stockholders | $ 26,731 | $ 24,252 |
Net income available to common stockholders per share: | ||
Basic (USD per share) | $ 1.75 | $ 1.45 |
Diluted (USD per share) | $ 1.74 | $ 1.45 |
Weighted average shares outstanding: | ||
Basic (in shares) | 15,304 | 16,722 |
Diluted (in shares) | 15,339 | 16,758 |
Franchise Revenue: | ||
Revenues: | ||
Revenue from contract with customer | $ 179,962 | $ 161,232 |
Royalties, franchise fees and other | ||
Revenues: | ||
Revenue from contract with customer | 102,925 | 90,349 |
Advertising revenues | ||
Revenues: | ||
Revenue from contract with customer | 77,037 | 70,883 |
Company restaurant sales | ||
Revenues: | ||
Revenue from contract with customer | 1,057 | 39,416 |
Financing revenues | ||
Revenues: | ||
Revenue from contract with customer | 797 | 968 |
Advertising fees | ||
Revenues: | ||
Revenue from contract with customer | 77,037 | 70,883 |
Cost of revenues: | ||
Franchise expenses | 77,037 | 70,883 |
Other franchise expenses | ||
Cost of revenues: | ||
Franchise expenses | $ 9,406 | $ 7,448 |
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, shares, outstanding, beginning (in shares) at Dec. 31, 2021 | 17,163,946 | |||||
Stockholders' equity, beginning of the period at Dec. 31, 2021 | $ (242,807) | $ 250 | $ 256,189 | $ 35,415 | $ (59) | $ (534,602) |
Treasury stock, shares, beginning (in shares) at Dec. 31, 2021 | 7,828,329 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 24,850 | 24,850 | ||||
Other comprehensive expense | (1) | (1) | ||||
Repurchase of restricted shares for taxes (in shares) | (22,972) | |||||
Repurchase of restricted shares for taxes | (1,745) | (1,745) | ||||
Net issuance of shares for stock plans (in shares) | 21,860 | |||||
Reissuance of treasure stock (in shares) | 171,302 | 171,302 | ||||
Reissuance of treasury stock | 241 | (7,778) | $ 8,019 | |||
Purchase of Company common stock (in shares) | (588,108) | (588,108) | ||||
Purchase of Company common stock | (41,445) | $ (41,445) | ||||
Stock-based compensation | 4,341 | 4,341 | ||||
Dividends on common stock | (7,653) | 96 | (7,749) | |||
Tax payments for share settlement of restricted stock units | (953) | (953) | ||||
Common stock, shares, outstanding, ending (in shares) at Mar. 31, 2022 | 16,746,028 | |||||
Stockholders' equity, ending of the period at Mar. 31, 2022 | $ (265,172) | $ 250 | 250,150 | 52,516 | (60) | $ (568,028) |
Treasury stock, shares, ending (in shares) at Mar. 31, 2022 | 8,245,135 | |||||
Common stock, shares, outstanding, beginning (in shares) at Dec. 31, 2022 | 15,599,239 | 15,599,239 | ||||
Stockholders' equity, beginning of the period at Dec. 31, 2022 | $ (301,084) | $ 250 | 259,339 | 84,538 | (65) | $ (645,146) |
Treasury stock, shares, beginning (in shares) at Dec. 31, 2022 | 9,360,733 | 9,360,733 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | $ 27,410 | 27,410 | ||||
Other comprehensive expense | 1 | 1 | ||||
Repurchase of restricted shares for taxes (in shares) | (46,630) | |||||
Repurchase of restricted shares for taxes | $ (3,527) | (3,527) | ||||
Net issuance of shares for stock plans (in shares) | 2,030 | |||||
Reissuance of treasure stock (in shares) | 194,960 | 194,960 | 194,960 | |||
Reissuance of treasury stock | $ 584 | $ (1) | (8,575) | $ 9,160 | ||
Purchase of Company common stock (in shares) | (74,860) | (74,860) | ||||
Purchase of Company common stock | (5,000) | $ (5,000) | ||||
Stock-based compensation | 1,718 | 1,718 | ||||
Dividends on common stock | (7,926) | 91 | (8,017) | |||
Tax payments for share settlement of restricted stock units | $ (859) | (859) | ||||
Common stock, shares, outstanding, ending (in shares) at Mar. 31, 2023 | 15,674,739 | 15,674,739 | ||||
Stockholders' equity, ending of the period at Mar. 31, 2023 | $ (288,683) | $ 249 | $ 248,187 | $ 103,931 | $ (64) | $ (640,986) |
Treasury stock, shares, ending (in shares) at Mar. 31, 2023 | 9,240,633 | 9,240,633 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 27,410 | $ 24,850 |
Adjustments to reconcile net income to cash flows provided by (used in) operating activities: | ||
Depreciation and amortization | 9,222 | 9,938 |
Non-cash closure and impairment charges | 459 | 45 |
Non-cash stock-based compensation expense | 1,718 | 4,341 |
Non-cash interest expense | 1,171 | 714 |
Gain on extinguishment of debt | (1,661) | 0 |
Deferred income taxes | (2,901) | (873) |
Deferred revenue | (1,193) | (1,177) |
Loss (gain) on disposition of assets | 71 | (1,296) |
Other | (308) | (1,766) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (2,369) | (3,567) |
Deferred rent receivable | 2,557 | 1,977 |
Current income tax receivables and payables | 224 | 2,352 |
Gift card receivables and payables | (2,310) | (2,180) |
Other current assets | 5,024 | (3,365) |
Accounts payable | (7,579) | (11,683) |
Operating lease assets and liabilities | 340 | (2,909) |
Accrued employee compensation and benefits | (11,801) | (26,646) |
Accrued advertising | (5,067) | 6,929 |
Other current liabilities | 3,069 | (3,474) |
Cash flows provided by (used in) operating activities | 16,076 | (7,790) |
Cash flows from investing activities: | ||
Principal receipts from notes, equipment contracts and other long-term receivables | 3,345 | 4,848 |
Net additions to property and equipment | (16,030) | (5,298) |
Proceeds from sale of property and equipment | 0 | 2,862 |
Additions to long-term receivables | 0 | (669) |
Other | (54) | (30) |
Cash flows (used in) provided by investing activities | (12,739) | 1,713 |
Cash flows from financing activities: | ||
Repayment of long-term debt | (66,574) | 0 |
Dividends paid on common stock | (15,971) | (14,588) |
Repurchase of common stock | (5,000) | (41,585) |
Principal payments on finance lease obligations | (1,870) | (2,340) |
Proceeds from stock options exercised | 584 | 241 |
Repurchase of restricted stock for tax payments upon vesting | (3,527) | (1,745) |
Tax payments for share settlement of restricted stock units | (859) | (953) |
Cash flows used in financing activities | (93,217) | (60,970) |
Net change in cash, cash equivalents and restricted cash | (89,880) | (67,047) |
Cash, cash equivalents and restricted cash at beginning of period | 324,984 | 425,353 |
Cash, cash equivalents and restricted cash at end of period | 235,104 | 358,306 |
Supplemental disclosures: | ||
Interest paid in cash | 16,702 | 15,869 |
Income taxes paid in cash | $ 11,937 | $ 7,945 |
General
General | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | General The accompanying unaudited consolidated financial statements of Dine Brands Global, Inc. (the “Company” or “Dine Brands Global”) have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The operating results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the twelve months ending December 31, 2023. The consolidated balance sheet at December 31, 2022 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, 2022. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
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 2023 began on January 2, 2023 and ended on April 2, 2023. The first fiscal quarter of 2022 began on January 3, 2022 and ended on April 3, 2022. 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. |
Accounting Standards Adopted an
Accounting Standards Adopted and Newly Issued Accounting Standards Not Yet Adopted | 3 Months Ended |
Mar. 31, 2023 | |
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 Additional new accounting guidance became effective for the Company as of the beginning of fiscal 2023 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 The Company reviewed all other newly issued accounting pronouncements and concluded that they either are not applicable to the Company's operations or that no material effect is expected on the Company's financial statements when adoption is required in the future. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | RevenueFranchise 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. Franchise Revenues The Company franchises the Applebee's Neighborhood Grill & Bar ® (“Applebee's”) concept in the American full-service restaurant segment within the casual dining category of the restaurant industry, the International House of Pancakes ® (“IHOP”) concept in the family dining mid-scale full-service category of the restaurant industry, and the Fuzzy's Taco Shop ® (“Fuzzy's”) concept in the Mexican food segment within the fast-casual dining category of the restaurant industry. The franchise arrangement for the 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 the brands primarily consists of (a) initial franchise/development fees; (b) continuing franchise fees (royalties); and (c) advertising fees. Since the Company considers the licensing of the franchising right to be a single performance obligation, no allocation of the transaction price is required. Additionally, all domestic IHOP franchise agreements require franchisees to purchase proprietary pancake and waffle dry mix from the Company. The Company recognizes the primary components of the transaction price as follows: • Franchise and development fees are recognized as revenue ratably on a straight-line basis over the term of the franchise agreement commencing with the restaurant opening date. As these fees are typically received in cash at or near the beginning of the franchise term, the cash received is initially recorded as a contract liability until recognized as revenue over time; • The Company is entitled to royalties and advertising fees based on a percentage of the franchisee's gross sales as defined in the franchise agreement. Royalty and advertising revenue are recognized when the franchisee's reported sales occur. Depending on timing within a fiscal period, the recognition of revenue results in either what is considered a contract asset (unbilled receivable) or once billed, accounts receivable, and are included in “receivables, net” on the balance sheet; • Revenue from the sale of proprietary pancake and waffle dry mix and other proprietary products 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” on the balance sheet. 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 believes its franchising arrangements do not contain a significant financing component. Company Restaurant Revenues Company restaurant revenues comprise retail sales at company-operated restaurants. 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, with no significant judgements required. The following table disaggregates franchise revenue by major type for the three months ended March 31, 2023 and 2022: Three Months Ended March 31, 2023 2022 (In thousands) Franchise Revenue: Royalties $ 83,438 $ 75,242 Advertising fees 77,037 70,883 Pancake and waffle dry mix sales and other 17,262 12,931 Franchise and development fees 2,225 2,176 Total franchise revenue $ 179,962 $ 161,232 Accounts and other receivables from franchisees as of March 31, 2023 and December 31, 2022 wer e $68.7 million (net of allowance of $2.8 million) and $69.0 million (net of allowance of $1.3 million), respectively, and were included in receivables, net in the Consolidated Balance Sheets. Changes in the Company's contract liability for deferred franchise and development fees during the three months ended March 31, 2023 were as follows: Deferred Franchise Revenue (In thousands) Balance at December 31, 2022 $ 49,493 Recognized as revenue during the three months ended March 31, 2023 (2,117) Fees deferred during the three months ended March 31, 2023 925 Balance at March 31, 2023 $ 48,301 The balance of deferred revenue as of March 31, 2023 is expected to be recognized as follows: (In thousands) 2023 (remaining nine months) $ 7,277 2024 6,572 2025 5,803 2026 4,952 2027 4,059 Thereafter 19,638 Total $ 48,301 |
Current Expected Credit Losses
Current Expected Credit Losses ("CECL") | 3 Months Ended |
Mar. 31, 2023 | |
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 $7.4 million as of March 31, 2023. Equipment Leases Receivable Equipment leases receivable primarily 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 3.7 years as of March 31, 2023. 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 March 31, 2023, comprised 40 leases with a weighted average remaining life of 10.6 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. March 31, 2023 December 31, 2022 (In millions) Accounts receivable $ 72.0 $ 67.5 Gift card receivables 6.3 34.6 Notes receivable 15.9 17.2 Financing receivables: Equipment leases receivable 24.8 26.6 Real estate leases receivable 17.2 18.5 Other 5.2 5.6 141.4 170.0 Less: allowance for credit losses and notes receivable (10.5) (10.3) 130.9 159.7 Less: current portion (93.1) (120.0) Long-term receivables $ 37.8 $ 39.7 The Company's primary credit quality indicator for all portfolio segments is delinquency. Changes in the allowance for credit losses during the three months ended March 31, 2023 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, 2022 $ 1.2 $ 3.5 $ 5.3 $ 0.1 $ 0.1 $ 0.1 $ 10.3 Bad debt (credit) expense 1.0 (0.2) 0.1 (0.0) (0.0) 0.0 0.9 Advertising provision adjustment 0.6 (0.3) 0.3 — — — 0.6 Write-offs — (1.3) — — — — (1.3) Recoveries — — — — 0.0 — 0.0 Balance, March 31, 2023 $ 2.8 $ 1.7 $ 5.7 $ 0.1 $ 0.1 $ 0.1 $ 10.5 (1) Primarily distributor receivables, gift card receivables and credit card receivables. The delinquency status of receivables (other than accounts receivable, gift card receivables and distributor receivables) at March 31, 2023 was as follows: Notes receivable, short-term Notes receivable, long-term Lease Receivables Equipment Notes Other (1) Total (In millions) Current $ 4.4 $ 11.5 $ 17.2 $ 24.8 $ 0.1 $ 58.0 30-59 days — — — — — — 60-89 days — — — — — — 90-119 days — — — — — — 120+ days — — — — — — Total $ 4.4 $ 11.5 $ 17.2 $ 24.8 $ 0.1 $ 58.0 (1) Primarily credit 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) 2023 $ 0.5 $ — $ 0.2 $ 0.7 2022 1.5 8.3 — 9.8 2021 10.0 2.5 — 12.5 2020 0.4 1.3 — 1.7 2019 — 0.7 — 0.7 Prior 3.5 4.4 24.6 32.5 Total $ 15.9 $ 17.2 $ 24.8 $ 57.9 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Leases | Leases 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 520 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 three Fuzzy's company-operated restaurants are located. The Company also leases office space for its principal corporate office in Pasadena, California and restaurant support centers in Leawood, Kansas, and Irving, Texas. 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 (income) cost for the three months ended March 31, 2023 and 2022 was as follows: Three months ended March 31, 2023 2022 (In millions) Finance lease cost: Amortization of right-of-use assets $ 0.6 $ 1.1 Interest on lease liabilities 0.7 1.3 Operating lease cost 19.2 21.1 Variable lease cost 1.9 1.7 Short-term lease cost 0.0 0.0 Sublease income (29.5) (26.4) Lease income $ (7.1) $ (1.2) Future minimum lease payments under noncancellable leases as lessee as of March 31, 2023 were as follows: Finance Operating (In millions) 2023 (remaining nine months) $ 6.3 $ 45.8 2024 7.8 76.8 2025 6.4 66.3 2026 6.0 58.3 2027 4.9 40.1 Thereafter 20.3 122.2 Total minimum lease payments 51.7 409.5 Less: interest/imputed interest (12.2) (72.0) Total obligations 39.5 337.5 Less: current portion (6.2) (57.7) Long-term lease obligations $ 33.3 $ 279.8 The weighted average remaining lease term as of March 31, 2023 was 6.2 years for finance leases and 6.2 years for operating leases. The weighted average discount rate as of March 31, 2023 was 9.3% for finance leases and 5.6% for operating leases. During the three months ended March 31, 2023 and 2022, the Company made the following cash payments for leases: Three months ended March 31, 2023 2022 (In millions) Principal payments on finance lease obligations $ 1.9 $ 2.3 Interest payments on finance lease obligations 0.7 1.3 Payments on operating leases 20.8 23.0 Variable lease payments 2.1 2.1 The Company's income from operating leases for the three months ended March 31, 2023 and 2022 was as follows: Three months ended March 31, 2023 2022 (In millions) Minimum lease payments $ 27.2 24.4 Variable lease income 4.3 3.9 Total operating lease income $ 31.5 $ 28.3 Minimum payments to be received as lessor under noncancellable operating leases as of March 31, 2023 were as follows: (In millions) 2023 (remaining nine months) $ 78.0 2024 95.9 2025 83.2 2026 69.0 2027 51.2 Thereafter 131.0 Total minimum rents receivable $ 508.3 The Company's income from real estate leases for the three months ended March 31, 2023 and 2022 was as follows: Three months ended March 31, 2023 2022 (In millions) Interest income $ 0.3 $ 0.4 Variable lease income 0.1 0.1 Total real estate lease income $ 0.4 $ 0.5 Minimum payments to be received as lessor under noncancellable real estate leases as of March 31, 2023 were as follows: (In millions) 2023 (remaining nine months) $ 3.1 2024 2.6 2025 1.8 2026 1.8 2027 1.8 Thereafter 12.4 Total minimum rents receivable 23.5 Less: unearned income (6.3) Total net investment in real estate leases 17.2 Less: current portion (3.0) Long-term investment in real estate leases $ 14.2 |
Leases | Leases 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 520 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 three Fuzzy's company-operated restaurants are located. The Company also leases office space for its principal corporate office in Pasadena, California and restaurant support centers in Leawood, Kansas, and Irving, Texas. 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 (income) cost for the three months ended March 31, 2023 and 2022 was as follows: Three months ended March 31, 2023 2022 (In millions) Finance lease cost: Amortization of right-of-use assets $ 0.6 $ 1.1 Interest on lease liabilities 0.7 1.3 Operating lease cost 19.2 21.1 Variable lease cost 1.9 1.7 Short-term lease cost 0.0 0.0 Sublease income (29.5) (26.4) Lease income $ (7.1) $ (1.2) Future minimum lease payments under noncancellable leases as lessee as of March 31, 2023 were as follows: Finance Operating (In millions) 2023 (remaining nine months) $ 6.3 $ 45.8 2024 7.8 76.8 2025 6.4 66.3 2026 6.0 58.3 2027 4.9 40.1 Thereafter 20.3 122.2 Total minimum lease payments 51.7 409.5 Less: interest/imputed interest (12.2) (72.0) Total obligations 39.5 337.5 Less: current portion (6.2) (57.7) Long-term lease obligations $ 33.3 $ 279.8 The weighted average remaining lease term as of March 31, 2023 was 6.2 years for finance leases and 6.2 years for operating leases. The weighted average discount rate as of March 31, 2023 was 9.3% for finance leases and 5.6% for operating leases. During the three months ended March 31, 2023 and 2022, the Company made the following cash payments for leases: Three months ended March 31, 2023 2022 (In millions) Principal payments on finance lease obligations $ 1.9 $ 2.3 Interest payments on finance lease obligations 0.7 1.3 Payments on operating leases 20.8 23.0 Variable lease payments 2.1 2.1 The Company's income from operating leases for the three months ended March 31, 2023 and 2022 was as follows: Three months ended March 31, 2023 2022 (In millions) Minimum lease payments $ 27.2 24.4 Variable lease income 4.3 3.9 Total operating lease income $ 31.5 $ 28.3 Minimum payments to be received as lessor under noncancellable operating leases as of March 31, 2023 were as follows: (In millions) 2023 (remaining nine months) $ 78.0 2024 95.9 2025 83.2 2026 69.0 2027 51.2 Thereafter 131.0 Total minimum rents receivable $ 508.3 The Company's income from real estate leases for the three months ended March 31, 2023 and 2022 was as follows: Three months ended March 31, 2023 2022 (In millions) Interest income $ 0.3 $ 0.4 Variable lease income 0.1 0.1 Total real estate lease income $ 0.4 $ 0.5 Minimum payments to be received as lessor under noncancellable real estate leases as of March 31, 2023 were as follows: (In millions) 2023 (remaining nine months) $ 3.1 2024 2.6 2025 1.8 2026 1.8 2027 1.8 Thereafter 12.4 Total minimum rents receivable 23.5 Less: unearned income (6.3) Total net investment in real estate leases 17.2 Less: current portion (3.0) Long-term investment in real estate leases $ 14.2 |
Leases | Leases 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 520 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 three Fuzzy's company-operated restaurants are located. The Company also leases office space for its principal corporate office in Pasadena, California and restaurant support centers in Leawood, Kansas, and Irving, Texas. 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 (income) cost for the three months ended March 31, 2023 and 2022 was as follows: Three months ended March 31, 2023 2022 (In millions) Finance lease cost: Amortization of right-of-use assets $ 0.6 $ 1.1 Interest on lease liabilities 0.7 1.3 Operating lease cost 19.2 21.1 Variable lease cost 1.9 1.7 Short-term lease cost 0.0 0.0 Sublease income (29.5) (26.4) Lease income $ (7.1) $ (1.2) Future minimum lease payments under noncancellable leases as lessee as of March 31, 2023 were as follows: Finance Operating (In millions) 2023 (remaining nine months) $ 6.3 $ 45.8 2024 7.8 76.8 2025 6.4 66.3 2026 6.0 58.3 2027 4.9 40.1 Thereafter 20.3 122.2 Total minimum lease payments 51.7 409.5 Less: interest/imputed interest (12.2) (72.0) Total obligations 39.5 337.5 Less: current portion (6.2) (57.7) Long-term lease obligations $ 33.3 $ 279.8 The weighted average remaining lease term as of March 31, 2023 was 6.2 years for finance leases and 6.2 years for operating leases. The weighted average discount rate as of March 31, 2023 was 9.3% for finance leases and 5.6% for operating leases. During the three months ended March 31, 2023 and 2022, the Company made the following cash payments for leases: Three months ended March 31, 2023 2022 (In millions) Principal payments on finance lease obligations $ 1.9 $ 2.3 Interest payments on finance lease obligations 0.7 1.3 Payments on operating leases 20.8 23.0 Variable lease payments 2.1 2.1 The Company's income from operating leases for the three months ended March 31, 2023 and 2022 was as follows: Three months ended March 31, 2023 2022 (In millions) Minimum lease payments $ 27.2 24.4 Variable lease income 4.3 3.9 Total operating lease income $ 31.5 $ 28.3 Minimum payments to be received as lessor under noncancellable operating leases as of March 31, 2023 were as follows: (In millions) 2023 (remaining nine months) $ 78.0 2024 95.9 2025 83.2 2026 69.0 2027 51.2 Thereafter 131.0 Total minimum rents receivable $ 508.3 The Company's income from real estate leases for the three months ended March 31, 2023 and 2022 was as follows: Three months ended March 31, 2023 2022 (In millions) Interest income $ 0.3 $ 0.4 Variable lease income 0.1 0.1 Total real estate lease income $ 0.4 $ 0.5 Minimum payments to be received as lessor under noncancellable real estate leases as of March 31, 2023 were as follows: (In millions) 2023 (remaining nine months) $ 3.1 2024 2.6 2025 1.8 2026 1.8 2027 1.8 Thereafter 12.4 Total minimum rents receivable 23.5 Less: unearned income (6.3) Total net investment in real estate leases 17.2 Less: current portion (3.0) Long-term investment in real estate leases $ 14.2 |
Leases | Leases 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 520 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 three Fuzzy's company-operated restaurants are located. The Company also leases office space for its principal corporate office in Pasadena, California and restaurant support centers in Leawood, Kansas, and Irving, Texas. 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 (income) cost for the three months ended March 31, 2023 and 2022 was as follows: Three months ended March 31, 2023 2022 (In millions) Finance lease cost: Amortization of right-of-use assets $ 0.6 $ 1.1 Interest on lease liabilities 0.7 1.3 Operating lease cost 19.2 21.1 Variable lease cost 1.9 1.7 Short-term lease cost 0.0 0.0 Sublease income (29.5) (26.4) Lease income $ (7.1) $ (1.2) Future minimum lease payments under noncancellable leases as lessee as of March 31, 2023 were as follows: Finance Operating (In millions) 2023 (remaining nine months) $ 6.3 $ 45.8 2024 7.8 76.8 2025 6.4 66.3 2026 6.0 58.3 2027 4.9 40.1 Thereafter 20.3 122.2 Total minimum lease payments 51.7 409.5 Less: interest/imputed interest (12.2) (72.0) Total obligations 39.5 337.5 Less: current portion (6.2) (57.7) Long-term lease obligations $ 33.3 $ 279.8 The weighted average remaining lease term as of March 31, 2023 was 6.2 years for finance leases and 6.2 years for operating leases. The weighted average discount rate as of March 31, 2023 was 9.3% for finance leases and 5.6% for operating leases. During the three months ended March 31, 2023 and 2022, the Company made the following cash payments for leases: Three months ended March 31, 2023 2022 (In millions) Principal payments on finance lease obligations $ 1.9 $ 2.3 Interest payments on finance lease obligations 0.7 1.3 Payments on operating leases 20.8 23.0 Variable lease payments 2.1 2.1 The Company's income from operating leases for the three months ended March 31, 2023 and 2022 was as follows: Three months ended March 31, 2023 2022 (In millions) Minimum lease payments $ 27.2 24.4 Variable lease income 4.3 3.9 Total operating lease income $ 31.5 $ 28.3 Minimum payments to be received as lessor under noncancellable operating leases as of March 31, 2023 were as follows: (In millions) 2023 (remaining nine months) $ 78.0 2024 95.9 2025 83.2 2026 69.0 2027 51.2 Thereafter 131.0 Total minimum rents receivable $ 508.3 The Company's income from real estate leases for the three months ended March 31, 2023 and 2022 was as follows: Three months ended March 31, 2023 2022 (In millions) Interest income $ 0.3 $ 0.4 Variable lease income 0.1 0.1 Total real estate lease income $ 0.4 $ 0.5 Minimum payments to be received as lessor under noncancellable real estate leases as of March 31, 2023 were as follows: (In millions) 2023 (remaining nine months) $ 3.1 2024 2.6 2025 1.8 2026 1.8 2027 1.8 Thereafter 12.4 Total minimum rents receivable 23.5 Less: unearned income (6.3) Total net investment in real estate leases 17.2 Less: current portion (3.0) Long-term investment in real estate leases $ 14.2 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt At March 31, 2023 and December 31, 2022, long-term debt consisted of the following components: March 31, 2023 December 31, 2022 (In millions) Series 2019-1 4.194% Fixed Rate Senior Secured Notes, Class A-2-I $ 585.1 $ 653.0 Series 2019-1 4.723% Fixed Rate Senior Secured Notes, Class A-2-II 594.0 594.0 Series 2022-1 Variable Funding Senior Secured Notes, Class A-1, variable interest rate of 7.37% and 7.29% at March 31, 2023 and December 31, 2022, respectively 100.0 100.0 Debt issuance costs (4.5) (5.1) Long-term debt, net of debt issuance costs 1,274.6 1,341.9 Current portion of long-term debt (100.0) (100.0) Long-term debt $ 1,174.6 $ 1,241.9 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. On August 12, 2022, the Co-Issuers established a new revolving financing facility, the 2022-1 Variable Funding Senior Secured Notes, Class A-1 (the “Credit Facility”), that allows for drawings up to $325 million of variable funding notes on a revolving basis and the issuance of letters of credit. In connection with this transaction, the Co-Issuers terminated their $225 million revolving financing facility, the 2019-1 Variable Funding Senior Secured Notes, Class A-1 (the “Previous Credit Facility”). The Credit Facility and the 2019 Class A-2 Notes are referred to collectively herein as the “Notes.” The Notes were issued in securitization transactions 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 Notes. The 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”). In addition, the 2019 Class A-2 Notes were issued under 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 and the Credit Facility was issued under the related Series 2022-1 Supplement to the Base Indenture, dated August 12, 2022 (“Series 2022-1 Supplement”), among the Co-Issuers and Citibank, N.A., as Trustee and securities intermediary. The Base Indenture, Series 2019-1 Supplement and Series 2022-1 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 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 March 31, 2023, the Company's leverage ratio was approximately 4.5x. 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 March 31, 2023, the make-whole premium associated with voluntary prepayment of the Class A-2-I Notes was zero and remained as such until the Class A-2-I Notes were refinanced in April 2023 (see Note 17 - Subsequent Event). As of March 31, 2023, the make-whole premium associated with voluntary prepayment of the Class A-2-II Notes was approximately $1.8 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 Notes that must be bifurcated for separate valuation. The Company estimated the fair value of these derivatives to be immaterial as of March 31, 2023, based on the probability-weighted discounted cash flows associated with either event. 2019 Class A-1 Notes The Previous Credit Facility allowed for drawings up to $225 million of variable funding notes on a revolving basis and the issuance of letters of credit. In March 2020, the Company borrowed $220.0 million against the Previous Credit Facility. The $220.0 million was repaid on March 5, 2021, and there were no outstanding borrowings since that date under the Previous Credit Facility until its termination in August 2022. The interest rate for borrowings under the Previous Credit Facility was the three-month LIBOR rate plus 2.15% for 60% of the advances and the commercial paper funding rate of our conduit investor plus 2.15% for 40% of the advances. At March 31, 2022, $3.5 million was pledged against the Previous 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. 2022 Class A-1 Notes In August 2022, the Co-Issuers entered into the Credit Facility that allows for drawings up to $325 million of variable funding notes on a revolving basis 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 Term SOFR Rate, in either case, plus 2.50%. 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) 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) Term SOFR for a one-month tenor in effect at such time plus 0.50% plus (b) 2.00%. The legal final maturity of the Credit Facility is June 2052, but amortization will apply if there are outstanding amounts under the Credit Facility after June 2027 (the “Class A-1 Renewal Date”). The Class A-1 Renewal Date may be extended at the Co-Issuers’ election for up to two successive one-year periods if certain conditions are met. If the Co-Issuers have not repaid or refinanced the Credit Facility by the Class A-1 Renewal Date (after giving effect to any extensions), then interest will accrue on the Credit Facility at a rate equal to 5.00% in addition to the regular interest rate applicable to the Credit Facility. In August 2022, the Company borrowed $100 million against the Credit Facility, all of which was outstanding at March 31, 2023. The amount of $3.4 million was pledged against the Credit Facility for outstanding letters of credit, leaving $221.6 million of the Credit Facility available for borrowing at March 31, 2023. It is anticipated that any principal and interest on the Credit Facility outstanding will be repaid in full on or prior to the quarterly payment date in June 2027, subject to two additional one-year extensions at the option of the Company upon the satisfaction of certain conditions. The letters of credit are used primarily to satisfy insurance-related collateral requirements. The weighted average interest rate for the period outstanding during the three months ended March 31, 2023 was 7.30%. Covenants and Restrictions The 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 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 Notes are in stated ways defective or ineffective and (iv) covenants relating to recordkeeping, access to information and similar matters. The 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 Notes are also subject to certain customary events of default, including events relating to non-payment of required interest, principal or other amounts due on or with respect to the Notes, failure 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 March 31, 2023 was approximately 4.0x. Debt Issuance Costs 2022 Class A-1 Notes In August 2022, the Company incurred costs of approximately $6.3 million in connection with the issuance of the Credit Facility. These debt issuance costs are being amortized over the estimated life of the Credit Facility. Amortization of $0.3 million of these costs was included in interest expense for the three months ended March 31, 2023. As of March 31, 2023, unamortized debt issuance costs of $5.6 million related to the Credit Facility are classified as other non-current assets in the Consolidated Balance Sheets. 2019 Class A-2 Notes The Company incurred costs of approximately $12.9 million in connection with the issuance of the 2019 Class A-2 Notes. These debt issuance costs are being amortized using the effective interest method over estimated life of each tranche of the 2019 Class A-2 Notes. Amortization costs of $0.9 million and $0.5 million was included in interest expense for three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, unamortized debt issuance costs of $4.5 million are reported as a direct reduction of the Class A-2 Notes in the Consolidated Balance Sheets. 2019 Class A-1 Notes Amortization costs incurred in connection with the Previous Credit Facility of $0.2 million were included in interest expense for the three months ended March 31, 2022. As of March 31, 2022, unamortized debt issuance costs of $1.4 million related to the Previous Credit Facility were classified as other non-current assets in the Consolidated Balance Sheets. In connection with the termination of the Previous Credit Facility in August 2022, the Company recognized as a loss on extinguishment of debt of $1.2 million, representing the remaining unamortized debt issuance costs associated with the Previous Credit Facility. Gain on Extinguishment of Debt The Company purchased $67.9 million of its 2019 Class A-2 Notes under par and recognized a $1.7 million gain on extinguishment of debt during the three months ended March 31, 2023. Maturities of Long-term Debt • The legal final maturity of the Class A-2 Notes is in June 2049, but it is anticipated that, unless repaid earlier, the Class A-2-II Notes will be repaid in June 2026 (see Note 17 - Subsequent Event). • The renewal date of the Credit Facility is June 2027, subject to two additional one-year extensions at the option of the Company upon the satisfaction of certain conditions. • Quarterly principal payments on the Class A-2-I and Class A-2-II Notes totaling $3.25 million ($13.0 million per annum) are required if the Company's leverage ratio is greater than 5.25x. |
Stockholders' Deficit
Stockholders' Deficit | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Stockholders' Deficit | Stockholders' Deficit Dividends Dividends declared and paid per share for the three months ended March 31, 2023 and 2022 were as follows: Three months ended March 31, 2023 2022 Dividends declared per common share $ 0.51 $ 0.46 Dividends paid per common share $ 1.02 $ 0.86 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 December 2, 2022, the Board of Directors declared a fourth quarter 2022 cash dividend of $0.51 per share of common stock, paid on January 6, 2023 to the stockholders of record as of the close of business on December 17, 2022. On February 21, 2023, the Board of Directors declared a first quarter 2023 cash dividend of $0.51 per share of common stock, paid on March 31, 2023 to the stockholders of record as of the close of business on March 20, 2023. 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. During the three months ended March 31, 2023, the Company repurchased 74,860 shares of common stock at a cost of $5.0 million. Cumulatively, the Company repurchased 1,224,449 shares at a cost of $83.7 million under the 2022 Repurchase Program. Treasury Stock Repurchases of the Company's common stock are included in treasury stock at the cost of shares repurchased plus any transaction costs. Treasury stock may be re-issued when stock options are exercised, when restricted stock awards are granted and when restricted stock units settle in stock upon vesting. The cost of treasury stock re-issued is determined using the first-in, first-out (“FIFO”) method. During the three months ended March 31, 2023, the Company re-issued 194,960 shares of treasury stock at a total FIFO cost of $9.2 million. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company's effective tax rate was 24.2% for the three months ended March 31, 2023, as compared to 27.2% for the three months ended March 31, 2022. The effective tax rate for the three months ended March 31, 2023 was different than the rate of the prior comparable period primarily due to the recognition of higher excess tax benefits from stock-based compensation and lower non-deductible executive compensation. The total gross unrecognized tax benefit as of March 31, 2023 and December 31, 2022 was $2.6 million and $2.1 million, respectively, excluding interest, penalties and related tax benefits. The Company estimates the unrecognized tax benefit as of March 31, 2023 may decrease over the upcoming 12 months by an amount up to $0.5 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 March 31, 2023, 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, 2022, accrued interest was $0.7 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 the income tax provision recognized in the Consolidated Statements of Comprehensive Income (Loss). 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 2019 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 | 3 Months Ended |
Mar. 31, 2023 | |
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 March 31, 2023 2022 (In millions) Equity classified awards expense $ 1.8 $ 4.4 Liability classified awards expense 0.7 0.4 Total stock-based compensation expense $ 2.5 $ 4.8 As of March 31, 2023, total unrecognized compensation expense of $25.6 million related to restricted stock and restricted stock units and $4.1 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 three months ended March 31, 2023: Risk-free interest rate 4.4 % Historical volatility 70.9 % Dividend yield 2.7 % Expected years until exercise 4.5 Fair value of options granted $37.35 Equity Classified Awards - Stock Options Stock option balances at March 31, 2023, and activity for the three months ended March 31, 2023 were as follows: Number of Shares Under Option Weighted Weighted Average Aggregate Outstanding at December 31, 2022 539,575 $ 75.65 Granted 72,291 74.94 Exercised (10,568) 55.36 Expired (472) 72.28 Forfeited (19,621) 79.38 Outstanding at March 31, 2023 581,205 75.80 5.3 $ 1.8 Vested at March 31, 2023 and Expected to Vest 561,092 75.88 5.1 $ 1.8 Exercisable at March 31, 2023 437,962 $ 76.59 4.0 $ 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 first quarter of 2023 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on March 31, 2023. The aggregate intrinsic value will change based on the fair market value of the Company’s common stock and the number of in-the-money options. Equity Classified Awards - Restricted Stock and Restricted Stock Units Outstanding balances as of March 31, 2023, and activity related to restricted stock and restricted stock units for the three months ended March 31, 2023 were as follows: Shares of Restricted Weighted Stock-Settled Restricted Weighted Outstanding at December 31, 2022 355,900 $ 73.57 123,895 $ 62.11 Granted 184,392 75.05 18,856 74.94 Released (121,935) 77.11 (46,228) 63.66 Forfeited (31,735) 73.54 (39,294) 77.23 Outstanding at March 31, 2023 386,622 $ 73.16 57,229 $ 54.49 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. For the three months ended March 31, 2023 and 2022, an expense of zero and $0.2 million , res pectively, was included as stock-based compensation expense related to cash-settled restricted stock units. At March 31, 2023 and December 31, 2022, there was no liabilities related to cash-settled restricted stock units. Liability Classified Awards - Long-Term Incentive Awards |
Net Income per Share
Net Income per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Income per Share | Net Income per Share The computation of the Company's basic and diluted net income per share is as follows: Three months ended March 31, 2023 2022 (In thousands, except per share data) Numerator for basic and diluted income per common share: Net income $ 27,410 $ 24,850 Less: Net income allocated to unvested participating restricted stock (679) (598) Net income available to common stockholders - basic 26,731 24,252 Effect of unvested participating restricted stock in two-class calculation 1 1 Net income available to common stockholders - diluted $ 26,732 $ 24,253 Denominator: Weighted average outstanding shares of common stock - basic 15,304 16,722 Dilutive effect of stock options 35 36 Weighted average outstanding shares of common stock - diluted 15,339 16,758 Net income per common share: Basic $ 1.75 $ 1.45 Diluted $ 1.74 $ 1.45 |
Segments
Segments | 3 Months Ended |
Mar. 31, 2023 | |
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 six operating segments: Applebee's franchise operations, IHOP franchise operations, Fuzzy's franchise operations, rental operations, financing operations, and company-operated restaurant operations. The Company has four reporting segments: franchise operations (an aggregation of each restaurant concept's franchise operations), company-operated restaurant operations, rental operations and financing operations. The Company considers these to be its reportable segments, regardless of whether any segment exceeds 10% of consolidated revenues, income before income tax provision or total assets. As of March 31, 2023, the franchise operations segment consisted of 1,673 restaurants operated by Applebee’s franchisees in the United States, two U.S. territories and 12 countries outside the United States; 1,790 restaurants operated by IHOP franchisees and area licensees in the United States, two U.S. territories and 11 countries outside the United States; and 134 restaurants operated by Fuzzy's franchisees in 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 other franchise fees. Franchise operations expenses include advertising expense, the cost of proprietary products, pre-opening training expenses and other franchise-related 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 operations revenue primarily consists of interest income from the financing of IHOP equipment leases and franchise fees and interest income on Applebee's notes receivable from franchisees. Financing operations expenses primarily are the cost of taxes related to IHOP equipment leases. As of March 31, 2023, the company operations segment consisted of three Fuzzy's restaurants that were acquired in December 2022. During three months ended March 31, 2022, the Company operated 69 Applebee's restaurants that were sold in October 2022. All company-operated restaurants are located in the United States. Company-operated restaurant operation revenue consists of retail sales at company operated restaurants. Company-operated restaurant operation expenses are operating expenses such as food, beverage, labor, benefits, utilities, rent and other operating costs. Information on segments is as follows: Three months ended March 31, 2023 2022 (In millions) Revenues from external customers: Franchise operations $ 180.0 $ 161.2 Rental operations 32.0 28.8 Company restaurants 1.0 39.4 Financing operations 0.8 1.0 Total $ 213.8 $ 230.4 Interest expense: Rental operations $ 1.0 $ 1.1 Company restaurants — 0.8 Corporate 14.7 15.5 Total $ 15.7 $ 17.4 Depreciation and amortization: Franchise operations $ 2.5 $ 2.5 Rental operations 2.6 2.6 Company restaurants — 1.9 Corporate 4.1 2.9 Total $ 9.2 $ 9.9 Gross profit by segment: Franchise operations $ 92.6 $ 83.2 Rental operations 10.4 6.7 Company restaurants — 2.0 Financing operations 0.7 0.9 Total gross profit 103.7 92.8 Corporate and unallocated expenses, net (67.5) (58.6) Income before income taxes $ 36.2 $ 34.2 |
Closure and Impairment Charges
Closure and Impairment Charges | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Closure and Impairment Charges | Closure and Impairment Charges Closure and impairment charges for the three months ended March 31, 2023 and 2022 were as follows: Three months ended March 31, 2023 2022 (In millions) Closure charges $ 0.4 $ 0.1 Long-lived tangible asset impairment 0.1 — Total closure and impairment charges $ 0.5 $ 0.1 The closure charges for the three months ended March 31, 2023 related to revisions to existing closure reserves, including accretion, primarily for 28 IHOP restaurants closed prior to December 31, 2022. The closure charges of $0.1 million for the three months ended March 31, 2022 related to the establishment of or revisions to existing closure reserves for approximately 35 IHOP restaurants. The long-lived asset impairment of $0.1 million for the three months ended March 31, 2023 related to certain Fuzzy's company restaurant equipment for which the carrying value exceeded its fair value. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value MeasurementsThe 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 March 31, 2023 and December 31, 2022 were as follows: March 31, 2023 December 31, 2022 (In millions) Face Value of Class A-2 Notes $ 1,179.1 $ 1,247.0 Fair Value of Class A-2 Notes $ 1,152.3 $ 1,167.0 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
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 | 3 Months Ended |
Mar. 31, 2023 | |
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: March 31, 2023 December 31, 2022 (In millions) Money market funds $ 25.0 $ 75.0 IHOP advertising funds and gift card programs 89.3 96.7 Other depository accounts 67.3 98.0 Total cash and cash equivalents $ 181.6 $ 269.7 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: March 31, 2023 December 31, 2022 (In millions) Securitized debt reserves $ 31.9 $ 32.4 Applebee's advertising funds 3.8 5.4 Other 1.4 1.1 Total current restricted cash $ 37.1 $ 38.9 Non-current Restricted Cash Non-current restricted cash was $16.4 million and $16.4 million at March 31, 2023 and December 31, 2022, respectively, and represents interest reserves required to be set aside for the duration of the Company's securitized debt. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On April 17, 2023, Applebee’s Funding LLC and IHOP Funding LLC (the “Co-Issuers”), each a special purpose, wholly-owned indirect subsidiary of the Company, issued the Series 2023-1 7.824% Fixed Rate Senior Secured Notes, Class A-2 (the “New Notes”) in an initial aggregate principal amount of $500 million. The New Notes were issued pursuant to an offering exempt from registration under the Securities Act of 1933, as amended. Payment of principal and interest is required to be made on the New Notes on a quarterly basis. The payment of principal on the New Notes may be suspended when the leverage ratio for the Corporation and its subsidiaries is less than or equal to 5.25x. The legal final maturity of the New Notes is in March 2053, but it is anticipated that, unless earlier prepaid to the extent permitted under the Indenture, the New Notes will be repaid in June 2029. The New Notes were issued in a securitization transaction pursuant to which substantially all of 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 were pledged as collateral to secure the New Notes. The Company used the net proceeds of the offering along with cash on hand to repay the entire outstanding balance of approximately $585 million of the Class A-2-I Notes and to pay fees and expenses incurred in connection with the issuance of the New Notes. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
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 2023 began on January 2, 2023 and ended on April 2, 2023. The first fiscal quarter of 2022 began on January 3, 2022 and ended on April 3, 2022. |
Accounting Standards Adopted in the Current Fiscal Year and Not Yet Adopted | Accounting Standards Adopted in the Current Fiscal Year Additional new accounting guidance became effective for the Company as of the beginning of fiscal 2023 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 The Company reviewed all other newly issued accounting pronouncements and concluded that they either are not applicable to the Company's operations or that no material effect is expected on the Company's financial statements when adoption is required in the future. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table disaggregates franchise revenue by major type for the three months ended March 31, 2023 and 2022: Three Months Ended March 31, 2023 2022 (In thousands) Franchise Revenue: Royalties $ 83,438 $ 75,242 Advertising fees 77,037 70,883 Pancake and waffle dry mix sales and other 17,262 12,931 Franchise and development fees 2,225 2,176 Total franchise revenue $ 179,962 $ 161,232 |
Schedule of Changes in Deferred Revenue | Changes in the Company's contract liability for deferred franchise and development fees during the three months ended March 31, 2023 were as follows: Deferred Franchise Revenue (In thousands) Balance at December 31, 2022 $ 49,493 Recognized as revenue during the three months ended March 31, 2023 (2,117) Fees deferred during the three months ended March 31, 2023 925 Balance at March 31, 2023 $ 48,301 |
Schedule of Remaining Performance Obligations | The balance of deferred revenue as of March 31, 2023 is expected to be recognized as follows: (In thousands) 2023 (remaining nine months) $ 7,277 2024 6,572 2025 5,803 2026 4,952 2027 4,059 Thereafter 19,638 Total $ 48,301 |
Current Expected Credit Losse_2
Current Expected Credit Losses ("CECL") (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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. March 31, 2023 December 31, 2022 (In millions) Accounts receivable $ 72.0 $ 67.5 Gift card receivables 6.3 34.6 Notes receivable 15.9 17.2 Financing receivables: Equipment leases receivable 24.8 26.6 Real estate leases receivable 17.2 18.5 Other 5.2 5.6 141.4 170.0 Less: allowance for credit losses and notes receivable (10.5) (10.3) 130.9 159.7 Less: current portion (93.1) (120.0) Long-term receivables $ 37.8 $ 39.7 |
Schedule of Changes in Allowance for Credit Losses | Changes in the allowance for credit losses during the three months ended March 31, 2023 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, 2022 $ 1.2 $ 3.5 $ 5.3 $ 0.1 $ 0.1 $ 0.1 $ 10.3 Bad debt (credit) expense 1.0 (0.2) 0.1 (0.0) (0.0) 0.0 0.9 Advertising provision adjustment 0.6 (0.3) 0.3 — — — 0.6 Write-offs — (1.3) — — — — (1.3) Recoveries — — — — 0.0 — 0.0 Balance, March 31, 2023 $ 2.8 $ 1.7 $ 5.7 $ 0.1 $ 0.1 $ 0.1 $ 10.5 (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 March 31, 2023 was as follows: Notes receivable, short-term Notes receivable, long-term Lease Receivables Equipment Notes Other (1) Total (In millions) Current $ 4.4 $ 11.5 $ 17.2 $ 24.8 $ 0.1 $ 58.0 30-59 days — — — — — — 60-89 days — — — — — — 90-119 days — — — — — — 120+ days — — — — — — Total $ 4.4 $ 11.5 $ 17.2 $ 24.8 $ 0.1 $ 58.0 (1) Primarily credit 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) 2023 $ 0.5 $ — $ 0.2 $ 0.7 2022 1.5 8.3 — 9.8 2021 10.0 2.5 — 12.5 2020 0.4 1.3 — 1.7 2019 — 0.7 — 0.7 Prior 3.5 4.4 24.6 32.5 Total $ 15.9 $ 17.2 $ 24.8 $ 57.9 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Schedule of Lease Cost | The Company's lease (income) cost for the three months ended March 31, 2023 and 2022 was as follows: Three months ended March 31, 2023 2022 (In millions) Finance lease cost: Amortization of right-of-use assets $ 0.6 $ 1.1 Interest on lease liabilities 0.7 1.3 Operating lease cost 19.2 21.1 Variable lease cost 1.9 1.7 Short-term lease cost 0.0 0.0 Sublease income (29.5) (26.4) Lease income $ (7.1) $ (1.2) |
Schedule of Operating Lease Liability Future Maturity | Future minimum lease payments under noncancellable leases as lessee as of March 31, 2023 were as follows: Finance Operating (In millions) 2023 (remaining nine months) $ 6.3 $ 45.8 2024 7.8 76.8 2025 6.4 66.3 2026 6.0 58.3 2027 4.9 40.1 Thereafter 20.3 122.2 Total minimum lease payments 51.7 409.5 Less: interest/imputed interest (12.2) (72.0) Total obligations 39.5 337.5 Less: current portion (6.2) (57.7) Long-term lease obligations $ 33.3 $ 279.8 |
Schedule of Finance Lease Liability Future Maturity | Future minimum lease payments under noncancellable leases as lessee as of March 31, 2023 were as follows: Finance Operating (In millions) 2023 (remaining nine months) $ 6.3 $ 45.8 2024 7.8 76.8 2025 6.4 66.3 2026 6.0 58.3 2027 4.9 40.1 Thereafter 20.3 122.2 Total minimum lease payments 51.7 409.5 Less: interest/imputed interest (12.2) (72.0) Total obligations 39.5 337.5 Less: current portion (6.2) (57.7) Long-term lease obligations $ 33.3 $ 279.8 |
Schedule of Lease Payments | During the three months ended March 31, 2023 and 2022, the Company made the following cash payments for leases: Three months ended March 31, 2023 2022 (In millions) Principal payments on finance lease obligations $ 1.9 $ 2.3 Interest payments on finance lease obligations 0.7 1.3 Payments on operating leases 20.8 23.0 Variable lease payments 2.1 2.1 |
Schedule of Operating Lease Income | The Company's income from operating leases for the three months ended March 31, 2023 and 2022 was as follows: Three months ended March 31, 2023 2022 (In millions) Minimum lease payments $ 27.2 24.4 Variable lease income 4.3 3.9 Total operating lease income $ 31.5 $ 28.3 |
Schedule of Future Minimum Payments as a Lessor Under Operating Leases | Minimum payments to be received as lessor under noncancellable operating leases as of March 31, 2023 were as follows: (In millions) 2023 (remaining nine months) $ 78.0 2024 95.9 2025 83.2 2026 69.0 2027 51.2 Thereafter 131.0 Total minimum rents receivable $ 508.3 |
Schedule of Direct Finance Lease Income | The Company's income from real estate leases for the three months ended March 31, 2023 and 2022 was as follows: Three months ended March 31, 2023 2022 (In millions) Interest income $ 0.3 $ 0.4 Variable lease income 0.1 0.1 Total real estate lease income $ 0.4 $ 0.5 |
Schedule of Future Minimum Payments as a Lessor Under Direct Financing Leases | Minimum payments to be received as lessor under noncancellable real estate leases as of March 31, 2023 were as follows: (In millions) 2023 (remaining nine months) $ 3.1 2024 2.6 2025 1.8 2026 1.8 2027 1.8 Thereafter 12.4 Total minimum rents receivable 23.5 Less: unearned income (6.3) Total net investment in real estate leases 17.2 Less: current portion (3.0) Long-term investment in real estate leases $ 14.2 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | At March 31, 2023 and December 31, 2022, long-term debt consisted of the following components: March 31, 2023 December 31, 2022 (In millions) Series 2019-1 4.194% Fixed Rate Senior Secured Notes, Class A-2-I $ 585.1 $ 653.0 Series 2019-1 4.723% Fixed Rate Senior Secured Notes, Class A-2-II 594.0 594.0 Series 2022-1 Variable Funding Senior Secured Notes, Class A-1, variable interest rate of 7.37% and 7.29% at March 31, 2023 and December 31, 2022, respectively 100.0 100.0 Debt issuance costs (4.5) (5.1) Long-term debt, net of debt issuance costs 1,274.6 1,341.9 Current portion of long-term debt (100.0) (100.0) Long-term debt $ 1,174.6 $ 1,241.9 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Dividends Declared | Dividends declared and paid per share for the three months ended March 31, 2023 and 2022 were as follows: Three months ended March 31, 2023 2022 Dividends declared per common share $ 0.51 $ 0.46 Dividends paid per common share $ 1.02 $ 0.86 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 March 31, 2023 2022 (In millions) Equity classified awards expense $ 1.8 $ 4.4 Liability classified awards expense 0.7 0.4 Total stock-based compensation expense $ 2.5 $ 4.8 |
Schedule of Stock Option Valuation Assumptions | The following table summarizes the assumptions used in the Black-Scholes model for stock options granted during the three months ended March 31, 2023: Risk-free interest rate 4.4 % Historical volatility 70.9 % Dividend yield 2.7 % Expected years until exercise 4.5 Fair value of options granted $37.35 |
Schedule of Stock Option Activity | Stock option balances at March 31, 2023, and activity for the three months ended March 31, 2023 were as follows: Number of Shares Under Option Weighted Weighted Average Aggregate Outstanding at December 31, 2022 539,575 $ 75.65 Granted 72,291 74.94 Exercised (10,568) 55.36 Expired (472) 72.28 Forfeited (19,621) 79.38 Outstanding at March 31, 2023 581,205 75.80 5.3 $ 1.8 Vested at March 31, 2023 and Expected to Vest 561,092 75.88 5.1 $ 1.8 Exercisable at March 31, 2023 437,962 $ 76.59 4.0 $ 1.7 |
Schedule of Restricted Stock Unit Activity | Outstanding balances as of March 31, 2023, and activity related to restricted stock and restricted stock units for the three months ended March 31, 2023 were as follows: Shares of Restricted Weighted Stock-Settled Restricted Weighted Outstanding at December 31, 2022 355,900 $ 73.57 123,895 $ 62.11 Granted 184,392 75.05 18,856 74.94 Released (121,935) 77.11 (46,228) 63.66 Forfeited (31,735) 73.54 (39,294) 77.23 Outstanding at March 31, 2023 386,622 $ 73.16 57,229 $ 54.49 |
Net Income per Share (Tables)
Net Income per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Computation of the Company’s Basic and Diluted Net Income per Share | The computation of the Company's basic and diluted net income per share is as follows: Three months ended March 31, 2023 2022 (In thousands, except per share data) Numerator for basic and diluted income per common share: Net income $ 27,410 $ 24,850 Less: Net income allocated to unvested participating restricted stock (679) (598) Net income available to common stockholders - basic 26,731 24,252 Effect of unvested participating restricted stock in two-class calculation 1 1 Net income available to common stockholders - diluted $ 26,732 $ 24,253 Denominator: Weighted average outstanding shares of common stock - basic 15,304 16,722 Dilutive effect of stock options 35 36 Weighted average outstanding shares of common stock - diluted 15,339 16,758 Net income per common share: Basic $ 1.75 $ 1.45 Diluted $ 1.74 $ 1.45 |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information by Segment | Information on segments is as follows: Three months ended March 31, 2023 2022 (In millions) Revenues from external customers: Franchise operations $ 180.0 $ 161.2 Rental operations 32.0 28.8 Company restaurants 1.0 39.4 Financing operations 0.8 1.0 Total $ 213.8 $ 230.4 Interest expense: Rental operations $ 1.0 $ 1.1 Company restaurants — 0.8 Corporate 14.7 15.5 Total $ 15.7 $ 17.4 Depreciation and amortization: Franchise operations $ 2.5 $ 2.5 Rental operations 2.6 2.6 Company restaurants — 1.9 Corporate 4.1 2.9 Total $ 9.2 $ 9.9 Gross profit by segment: Franchise operations $ 92.6 $ 83.2 Rental operations 10.4 6.7 Company restaurants — 2.0 Financing operations 0.7 0.9 Total gross profit 103.7 92.8 Corporate and unallocated expenses, net (67.5) (58.6) Income before income taxes $ 36.2 $ 34.2 |
Closure and Impairment Charges
Closure and Impairment Charges (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 months ended March 31, 2023 and 2022 were as follows: Three months ended March 31, 2023 2022 (In millions) Closure charges $ 0.4 $ 0.1 Long-lived tangible asset impairment 0.1 — Total closure and impairment charges $ 0.5 $ 0.1 |
Schedule of Restructuring Reserve by Type of Cost | Closure and impairment charges for the three months ended March 31, 2023 and 2022 were as follows: Three months ended March 31, 2023 2022 (In millions) Closure charges $ 0.4 $ 0.1 Long-lived tangible asset impairment 0.1 — Total closure and impairment charges $ 0.5 $ 0.1 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Non-Current Financial Liabilities | The fair values of the Company's 2019 Class A-2 Notes at March 31, 2023 and December 31, 2022 were as follows: March 31, 2023 December 31, 2022 (In millions) Face Value of Class A-2 Notes $ 1,179.1 $ 1,247.0 Fair Value of Class A-2 Notes $ 1,152.3 $ 1,167.0 |
Cash, Cash Equivalents and Re_2
Cash, Cash Equivalents and Restricted Cash (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash and Cash Equivalents | The components of cash and cash equivalents were as follows: March 31, 2023 December 31, 2022 (In millions) Money market funds $ 25.0 $ 75.0 IHOP advertising funds and gift card programs 89.3 96.7 Other depository accounts 67.3 98.0 Total cash and cash equivalents $ 181.6 $ 269.7 |
Restrictions on Cash and Cash Equivalents | The components of current restricted cash were as follows: March 31, 2023 December 31, 2022 (In millions) Securitized debt reserves $ 31.9 $ 32.4 Applebee's advertising funds 3.8 5.4 Other 1.4 1.1 Total current restricted cash $ 37.1 $ 38.9 |
Revenue - Disaggregation of Fra
Revenue - Disaggregation of Franchise Revenue by Major Type (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Franchise Revenue: | ||
Disaggregation of Revenue [Line Items] | ||
Total franchise revenue | $ 179,962 | $ 161,232 |
Royalties | ||
Disaggregation of Revenue [Line Items] | ||
Total franchise revenue | 83,438 | 75,242 |
Advertising fees | ||
Disaggregation of Revenue [Line Items] | ||
Total franchise revenue | 77,037 | 70,883 |
Pancake and waffle dry mix sales and other | ||
Disaggregation of Revenue [Line Items] | ||
Total franchise revenue | 17,262 | 12,931 |
Franchise and development fees | ||
Disaggregation of Revenue [Line Items] | ||
Total franchise revenue | $ 2,225 | $ 2,176 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - Receivables from Franchise Revenue Transactions - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Billed and unbilled receivables | $ 68.7 | $ 69 |
Billed and unbilled receivables, accumulated allowance for credit loss | $ 2.8 | $ 1.3 |
Revenue - Changes in the Compan
Revenue - Changes in the Company's Contract Liability for Deferred Franchise and Development Fees (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Change in Contract with Customer, Liability [Roll Forward] | |
Balance at December 31, 2022 | $ 49,493 |
Recognized as revenue during the three months ended March 31, 2023 | (2,117) |
Fees deferred during the three months ended March 31, 2023 | 925 |
Balance at March 31, 2023 | $ 48,301 |
Revenue - Deferred Revenue Expe
Revenue - Deferred Revenue Expected to be Recognized (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 48,301 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | 48,301 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | 7,277 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 7,277 |
Performance obligations expected to be satisfied, expected timing | 9 months |
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 | $ 6,572 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 6,572 |
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 | $ 5,803 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 5,803 |
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 | $ 4,952 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 4,952 |
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 | $ 4,059 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 4,059 |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 19,638 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied | $ 19,638 |
Performance obligations expected to be satisfied, expected timing |
Current Expected Credit Losse_3
Current Expected Credit Losses ("CECL") - Narrative (Details) $ in Millions | Mar. 31, 2023 USD ($) lease |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
Operating lease, weighted average remaining lease term | 6 years 2 months 12 days |
Finance lease, weighted average remaining lease term | 6 years 2 months 12 days |
Notes Receivable | Applebee's | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
Accounts and financing receivable, allowance for credit loss | $ | $ 7.4 |
Equipment Notes | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
Operating lease, weighted average remaining lease term | 3 years 8 months 12 days |
Lease Receivables | |
Financing Receivable, Allowance for Credit Loss [Line Items] | |
Number of properties subject to ground leases | lease | 40 |
Finance lease, weighted average remaining lease term | 10 years 7 months 6 days |
Current Expected Credit Losse_4
Current Expected Credit Losses ("CECL") - Components of Receivables (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 72,000 | $ 67,500 |
Gift card receivables | 6,300 | 34,600 |
Notes receivable | 15,900 | 17,200 |
Accounts and financing receivable, before allowance for credit loss | 141,400 | 170,000 |
Less: allowance for credit losses and notes receivable | (10,500) | (10,300) |
Receivables, net | 130,900 | 159,700 |
Less: current portion | (93,119) | (119,981) |
Long-term receivables | 37,800 | 39,700 |
Equipment leases receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing receivables | 24,800 | 26,600 |
Real estate leases receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing receivables | 17,200 | 18,500 |
Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing receivables | $ 5,200 | $ 5,600 |
Current Expected Credit Losse_5
Current Expected Credit Losses ("CECL") - Changes in the Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 10,300 | |
Bad debt (credit) expense | 923 | $ (299) |
Advertising provision adjustment | 600 | |
Write-offs | (1,300) | |
Recoveries | 0 | |
Ending balance | 10,500 | |
Accounts Receivable | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | 1,200 | |
Bad debt (credit) expense | 1,000 | |
Advertising provision adjustment | 600 | |
Write-offs | 0 | |
Recoveries | 0 | |
Ending balance | 2,800 | |
Notes receivable, short-term | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | 3,500 | |
Bad debt (credit) expense | (200) | |
Advertising provision adjustment | (300) | |
Write-offs | (1,300) | |
Recoveries | 0 | |
Ending balance | 1,700 | |
Notes receivable, long-term | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | 5,300 | |
Bad debt (credit) expense | 100 | |
Advertising provision adjustment | 300 | |
Write-offs | 0 | |
Recoveries | 0 | |
Ending balance | 5,700 | |
Lease Receivables | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | 100 | |
Bad debt (credit) expense | 0 | |
Advertising provision adjustment | 0 | |
Write-offs | 0 | |
Recoveries | 0 | |
Ending balance | 100 | |
Equipment Notes | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | 100 | |
Bad debt (credit) expense | 0 | |
Advertising provision adjustment | 0 | |
Write-offs | 0 | |
Recoveries | 0 | |
Ending balance | 100 | |
Other | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | 100 | |
Bad debt (credit) expense | 0 | |
Advertising provision adjustment | 0 | |
Write-offs | 0 | |
Recoveries | 0 | |
Ending balance | $ 100 |
Current Expected Credit Losse_6
Current Expected Credit Losses ("CECL") - Delinquency Status of Receivables (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | $ 58 |
Current | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 58 |
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 |
120+ days | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 0 |
Notes receivable, short-term | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 4.4 |
Notes receivable, short-term | Current | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 4.4 |
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 |
Notes receivable, short-term | 120+ days | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 0 |
Notes receivable, long-term | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 11.5 |
Notes receivable, long-term | Current | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 11.5 |
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 | 17.2 |
Lease Receivables | Current | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 17.2 |
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 | 24.8 |
Equipment Notes | Current | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 24.8 |
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 | 0.1 |
Other | Current | |
Financing Receivable, Past Due [Line Items] | |
Financing receivables | 0.1 |
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 Financing Receivables (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Total | $ 58 |
Total | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2023 | 0.7 |
2022 | 9.8 |
2021 | 12.5 |
2020 | 1.7 |
2019 | 0.7 |
Prior | 32.5 |
Total | 57.9 |
Notes receivable, short and long-term | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2023 | 0.5 |
2022 | 1.5 |
2021 | 10 |
2020 | 0.4 |
2019 | 0 |
Prior | 3.5 |
Total | 15.9 |
Lease Receivables | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2023 | 0 |
2022 | 8.3 |
2021 | 2.5 |
2020 | 1.3 |
2019 | 0.7 |
Prior | 4.4 |
Total | 17.2 |
Equipment Notes | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
2023 | 0.2 |
2022 | 0 |
2021 | 0 |
2020 | 0 |
2019 | 0 |
Prior | 24.6 |
Total | $ 24.8 |
Leases - Narrative (Details)
Leases - Narrative (Details) | Mar. 31, 2023 restaurant lease |
Lessee, Lease, Description [Line Items] | |
Lessor, number of leases requiring additional rent payments based on a percentage of restaurant sales | lease | 275 |
Lessee, number of leases requiring additional rent payments based on a percentage of restaurant sales | lease | 40 |
Finance lease, weighted average remaining lease term | 6 years 2 months 12 days |
Operating lease, weighted average remaining lease term | 6 years 2 months 12 days |
Finance lease, weighted average discount rate, percent | 9.30% |
Operating lease, weighted average discount rate, percent | 5.60% |
IHOP | |
Lessee, Lease, Description [Line Items] | |
Number of franchisee-operated restaurants | 520 |
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 |
Fuzzy's | |
Lessee, Lease, Description [Line Items] | |
Number of company-operated restaurants | 3 |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Finance lease cost: | ||
Amortization of right-of-use assets | $ 0.6 | $ 1.1 |
Interest on lease liabilities | 0.7 | 1.3 |
Operating lease cost | 19.2 | 21.1 |
Variable lease cost | 1.9 | 1.7 |
Short-term lease cost | 0 | 0 |
Sublease income | (29.5) | (26.4) |
Lease income | $ (7.1) | $ (1.2) |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments Under Noncancelable Leases as Lessee (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Finance Leases | |
2023 (remaining nine months) | $ 6.3 |
2024 | 7.8 |
2025 | 6.4 |
2026 | 6 |
2027 | 4.9 |
Thereafter | 20.3 |
Total minimum lease payments | 51.7 |
Less: interest/imputed interest | (12.2) |
Total obligations | $ 39.5 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Current maturities of finance lease and financing obligations |
Less: current portion | $ (6.2) |
Long-term lease obligations | 33.3 |
Operating Leases | |
2023 (remaining nine months) | 45.8 |
2024 | 76.8 |
2025 | 66.3 |
2026 | 58.3 |
2027 | 40.1 |
Thereafter | 122.2 |
Total minimum lease payments | 409.5 |
Less: interest/imputed interest | (72) |
Total obligations | 337.5 |
Less: current portion | (57.7) |
Long-term lease obligations | $ 279.8 |
Leases - Payment for Leases (De
Leases - Payment for Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases [Abstract] | ||
Principal payments on finance lease obligations | $ 1,870 | $ 2,340 |
Interest payments on finance lease obligations | 700 | 1,300 |
Payments on operating leases | 20,800 | 23,000 |
Variable lease payments | $ 2,100 | $ 2,100 |
Leases - Components of Lease In
Leases - Components of Lease Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases [Abstract] | ||
Minimum lease payments | $ 27.2 | $ 24.4 |
Variable lease income | 4.3 | 3.9 |
Total operating lease income | $ 31.5 | $ 28.3 |
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Rental revenues | Rental revenues |
Leases - Future Minimum Payment
Leases - Future Minimum Payments to be Received as Lessor Under Noncancelable Operating Leases (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Leases [Abstract] | |
2023 (remaining nine months) | $ 78 |
2024 | 95.9 |
2025 | 83.2 |
2026 | 69 |
2027 | 51.2 |
Thereafter | 131 |
Total minimum rents receivable | $ 508.3 |
Leases - Schedule of Income Fro
Leases - Schedule of Income From Direct Financing Leases (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases [Abstract] | ||
Interest income | $ 0.3 | $ 0.4 |
Variable lease income | 0.1 | 0.1 |
Total real estate lease income | $ 0.4 | $ 0.5 |
Direct Financing Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Rental revenues | Rental revenues |
Leases - Future Minimum Payme_2
Leases - Future Minimum Payments to be Received as Lessor Under Noncancelable Direct Financing Leases (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Leases [Abstract] | |
2023 (remaining nine months) | $ 3.1 |
2024 | 2.6 |
2025 | 1.8 |
2026 | 1.8 |
2027 | 1.8 |
Thereafter | 12.4 |
Total minimum rents receivable | 23.5 |
Less: unearned income | (6.3) |
Total net investment in real estate leases | 17.2 |
Less: current portion | (3) |
Long-term investment in real estate leases | $ 14.2 |
Long-Term Debt - Schedule of De
Long-Term Debt - Schedule of Debt Components (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Jun. 05, 2019 |
Debt Instrument [Line Items] | ||||
Debt issuance costs | $ (4,500) | $ (5,100) | ||
Long-term debt, net of debt issuance costs | 1,274,600 | 1,341,900 | ||
Current portion of long-term debt | (100,000) | (100,000) | ||
Long-term debt, net, less current maturities | 1,174,564 | 1,241,914 | ||
Series 2019-1 4.194% Fixed Rate Senior Secured Notes, Class A-2-I | ||||
Debt Instrument [Line Items] | ||||
Senior Notes | $ 585,100 | $ 653,000 | ||
Debt interest rate (percent) | 4.194% | 4.194% | 4.194% | |
Series 2019-1 4.723% Fixed Rate Senior Secured Notes, Class A-2-II | ||||
Debt Instrument [Line Items] | ||||
Senior Notes | $ 594,000 | $ 594,000 | ||
Debt interest rate (percent) | 4.723% | 4.723% | 4.723% | |
Series 2022-1 Variable Funding Senior Secured Notes, Class A-1, variable interest rate of 7.37% and 7.29% at March 31, 2023 and December 31, 2022, respectively | ||||
Debt Instrument [Line Items] | ||||
Senior Notes | $ 100,000 | $ 100,000 | ||
Debt interest rate (percent) | 7.37% | 7.29% |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) | 1 Months Ended | 3 Months Ended | |||||||
Mar. 05, 2021 USD ($) | Jun. 05, 2019 USD ($) extensionTerm | Aug. 31, 2022 USD ($) renewalPeriod | Mar. 31, 2020 USD ($) | Mar. 31, 2023 USD ($) extensionTerm Rate | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Aug. 12, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Debt Instrument [Line Items] | |||||||||
Threshold percentage | 50% | ||||||||
Cash sweeping event | Rate | 175% | ||||||||
Rapid amortization event | Rate | 120% | ||||||||
Manager termination event | Rate | 120% | ||||||||
Interest-only debt service coverage ratio, default event | Rate | 110% | ||||||||
Unamortized debt issuance costs | $ 4,500,000 | $ 5,100,000 | |||||||
Gain on extinguishment of debt | $ 1,661,000 | $ 0 | |||||||
Series 2019-1 4.723% Fixed Rate Senior Secured Notes, Class A-2-II and Series 2019-1 4.194% Fixed Rate Senior Secured Notes, Class A-2-I | |||||||||
Debt Instrument [Line Items] | |||||||||
Number of tranches issued | extensionTerm | 2 | ||||||||
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% | ||||||
Debt instrument, face amount | $ 700,000,000 | ||||||||
Make-whole premium | $ 0 | ||||||||
Series 2019-1 4.194% Fixed Rate Senior Secured Notes, Class A-2-I | Ten Year United States Treasury Bill Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 2.15% | ||||||||
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% | ||||||
Debt instrument, face amount | $ 600,000,000 | ||||||||
Make-whole premium | $ 1,800,000 | ||||||||
Series 2019-1 4.723% Fixed Rate Senior Secured Notes, Class A-2-II | Ten Year United States Treasury Bill Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 2.64% | ||||||||
Series 2022-1 Variable Funding Senior Secured Notes, Class A-1, variable interest rate of 7.37% and 7.29% at March 31, 2023 and December 31, 2022, respectively | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt interest rate (percent) | 7.37% | 7.29% | |||||||
Letters of credit outstanding, amount | $ 3,400,000 | ||||||||
Line of credit facility, current borrowing capacity | $ 221,600,000 | ||||||||
Series 2022-1 Variable Funding Senior Secured Notes, Class A-1, variable interest rate of 7.37% and 7.29% at March 31, 2023 and December 31, 2022, respectively | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, maximum borrowing capacity | $ 325,000,000 | $ 325,000,000 | |||||||
Proceeds from credit facility | $ 100,000,000 | ||||||||
Number of renewal periods | renewalPeriod | 2 | ||||||||
Renewal period term (in years) | 1 year | ||||||||
Interest rate percentage after renewal date | 5% | ||||||||
Debt, weighted average interest rate | 7.30% | ||||||||
Debt issuance costs, gross | $ 6,300,000 | ||||||||
Amortization of debt issuance costs | $ 300,000 | ||||||||
Debt issuance costs, net | $ 5,600,000 | ||||||||
Number of additional extensions | extensionTerm | 2 | ||||||||
Additional extension (in years) | 1 year | ||||||||
Series 2022-1 Variable Funding Senior Secured Notes, Class A-1, variable interest rate of 7.37% and 7.29% at March 31, 2023 and December 31, 2022, respectively | Revolving Credit Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 2.50% | ||||||||
Series 2022-1 Variable Funding Senior Secured Notes, Class A-1, variable interest rate of 7.37% and 7.29% at March 31, 2023 and December 31, 2022, respectively | Letter of Credit | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 0.50% | ||||||||
Series 2022-1 Variable Funding Senior Secured Notes, Class A-1, variable interest rate of 7.37% and 7.29% at March 31, 2023 and December 31, 2022, respectively | Letter of Credit | Federal Funds Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 0.50% | ||||||||
Series 2022-1 Variable Funding Senior Secured Notes, Class A-1, variable interest rate of 7.37% and 7.29% at March 31, 2023 and December 31, 2022, respectively | Letter of Credit | Base Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 2% | ||||||||
Series 2022-1 Variable Funding Senior Secured Notes, Class A-1, variable interest rate of 7.37% and 7.29% at March 31, 2023 and December 31, 2022, respectively | |||||||||
Debt Instrument [Line Items] | |||||||||
Letters of credit outstanding, amount | $ 3,500,000 | ||||||||
Line of credit facility, current borrowing capacity | 221,500,000 | ||||||||
Series 2022-1 Variable Funding Senior Secured Notes, Class A-1, variable interest rate of 7.37% and 7.29% at March 31, 2023 and December 31, 2022, respectively | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit facility, maximum borrowing capacity | $ 225,000,000 | ||||||||
Line of credit facility, expired amount | $ 225,000,000 | ||||||||
Proceeds from credit facility | $ 220,000,000 | ||||||||
Repayments of long-term lines of credit | $ 220,000,000 | ||||||||
Line of credit facility, amount outstanding | $ 0 | ||||||||
Amortization of debt issuance costs | 200,000 | ||||||||
Debt issuance costs, net | 1,400,000 | ||||||||
Gain on extinguishment of debt | $ (1,200,000) | ||||||||
Series 2022-1 Variable Funding Senior Secured Notes, Class A-1, variable interest rate of 7.37% and 7.29% at March 31, 2023 and December 31, 2022, respectively | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 2.15% | ||||||||
Line of credit facility, percentage of advances drawn | 60% | ||||||||
Series 2022-1 Variable Funding Senior Secured Notes, Class A-1, variable interest rate of 7.37% and 7.29% at March 31, 2023 and December 31, 2022, respectively | Revolving Credit Facility | Commercial Paper Funding Rate Of Conduit Investor | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 2.15% | ||||||||
Line of credit facility, percentage of advances drawn | 40% | ||||||||
2019 Class A-2 Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, term | 10 years | ||||||||
Additional interest on fixed rate | 5% | ||||||||
Quarterly principal payment | $ 3,250,000 | ||||||||
Covenant compliance, leverage ratio, maximum | Rate | 525% | ||||||||
Ratio of indebtedness to net capital | Rate | 450% | ||||||||
Debt issuance costs, gross | $ 12,900,000 | ||||||||
Amortization of debt issuance costs | 900,000 | $ 500,000 | |||||||
Unamortized debt issuance costs | 4,500,000 | ||||||||
Gain on extinguishment of debt | 1,700,000 | ||||||||
Extinguishment of debt | 67,900,000 | ||||||||
Annual principal payment | $ 13,000,000 | ||||||||
2019 Class A-2 Notes | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Ratio of indebtedness to net capital | Rate | 525% |
Stockholders' Deficit - Dividen
Stockholders' Deficit - Dividends Declared and Paid per Share (Details) - $ / shares | 3 Months Ended | ||||
Feb. 21, 2023 | Dec. 02, 2022 | Feb. 17, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Equity [Abstract] | |||||
Dividends declared per common share (USD per share) | $ 0.51 | $ 0.51 | $ 0.46 | $ 0.51 | $ 0.46 |
Dividends paid per common share (USD per share) | $ 1.02 | $ 0.86 |
Stockholders' Deficit - Narrati
Stockholders' Deficit - Narrative (Details) - USD ($) | 3 Months Ended | 13 Months Ended | |||||
Feb. 21, 2023 | Dec. 02, 2022 | Feb. 17, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Feb. 28, 2019 | |
Equity, Class of Treasury Stock [Line Items] | |||||||
Dividends declared per common share (USD per share) | $ 0.51 | $ 0.51 | $ 0.46 | $ 0.51 | $ 0.46 | ||
Purchase of Company common stock | $ 5,000,000 | $ 41,445,000 | |||||
Reissuance of treasure stock (in shares) | 194,960 | ||||||
Reissuance of treasury stock | $ 584,000 | $ 241,000 | |||||
Treasury Stock | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Reissuance of treasury stock | $ 9,200,000 | ||||||
2019 Repurchase Program | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Stock repurchase program, authorized amount | $ 200,000,000 | ||||||
2022 Repurchase Program | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Stock repurchase program, authorized amount | $ 250,000,000 | ||||||
Purchase of Company common stock (in shares) | 74,860 | 1,224,449 | |||||
Purchase of Company common stock | $ 5,000,000 | $ 83,700,000 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |||
Effective income tax rate (percent) | 24.20% | 27.20% | |
Gross unrecognized tax benefit | $ 2.6 | $ 2.1 | |
Expected change in unrecognized tax benefits | 0.5 | ||
Accrued interest on income taxes | 0.7 | 0.7 | |
Accrued penalties on income taxes, less than | $ 0.1 | $ 0.1 |
Stock-Based Compensation - Comp
Stock-Based Compensation - Components of Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Equity classified awards expense | $ 1.8 | $ 4.4 |
Liability classified awards expense | 0.7 | 0.4 |
Total stock-based compensation expense | $ 2.5 | $ 4.8 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 2,500 | $ 4,800 | |
Accrued employee compensation and benefits | 13,862 | $ 23,456 | |
Restricted Stock and Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total compensation cost not yet recognized | $ 25,600 | ||
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 | $ 4,100 | ||
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 | 200 | |
LTIP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 700 | $ 200 | |
Award vesting period (in years) | 3 years | ||
Accrued employee compensation and benefits | $ 2,800 | $ 2,100 | |
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 | 3 Months Ended |
Mar. 31, 2023 $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 4.40% |
Historical volatility | 70.90% |
Dividend yield | 2.70% |
Expected years until exercise | 4 years 6 months |
Fair value of options granted (USD per share) | $ 37.35 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) $ / shares in Units, $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) $ / shares shares | |
Number of Shares Under Option | |
Outstanding, beginning of period (in shares) | shares | 539,575 |
Granted (in shares) | shares | 72,291 |
Exercised (in shares) | shares | (10,568) |
Expired (in shares) | shares | (472) |
Forfeited (in shares) | shares | (19,621) |
Outstanding, end of period (in shares) | shares | 581,205 |
Vested and expected to vest (in shares) | shares | 561,092 |
Exercisable (in shares) | shares | 437,962 |
Weighted Average Exercise Price Per Share | |
Beginning of period (USD per share) | $ / shares | $ 75.65 |
Granted (USD per share) | $ / shares | 74.94 |
Exercised (USD per share) | $ / shares | 55.36 |
Expired (USD per share) | $ / shares | 72.28 |
Forfeited (USD per share) | $ / shares | 79.38 |
End of period (USD per share) | $ / shares | 75.80 |
Vested and expected to vest (USD per share) | $ / shares | 75.88 |
Exercisable (USD per share) | $ / shares | $ 76.59 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Weighted average remaining contractual term (in years) | 5 years 3 months 18 days |
Weighted average remaining contractual term, vested and expected to vest (in years) | 5 years 1 month 6 days |
Weighted average remaining contractual term, exercisable (in years) | 4 years |
Options, outstanding, intrinsic value | $ | $ 1.8 |
Options, vested and expected to vest, intrinsic value | $ | 1.8 |
Options, vested and expected to vest, exercisable | $ | $ 1.7 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Activity (Details) | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Shares of Restricted Stock | |
Shares of Restricted Stock | |
Beginning of period (in shares) | shares | 355,900 |
Granted (in shares) | shares | 184,392 |
Released (in shares) | shares | (121,935) |
Forfeited (in shares) | shares | (31,735) |
End of period (in shares) | shares | 386,622 |
Weighted Average Grant Date Fair Value | |
Beginning balance (USD per share) | $ / shares | $ 73.57 |
Granted (USD per share) | $ / shares | 75.05 |
Released (USD per share) | $ / shares | 77.11 |
Forfeited (USD per share) | $ / shares | 73.54 |
Ending balance (USD per share) | $ / shares | $ 73.16 |
Stock-Settled Restricted Stock Units | |
Shares of Restricted Stock | |
Beginning of period (in shares) | shares | 123,895 |
Granted (in shares) | shares | 18,856 |
Released (in shares) | shares | (46,228) |
Forfeited (in shares) | shares | (39,294) |
End of period (in shares) | shares | 57,229 |
Weighted Average Grant Date Fair Value | |
Beginning balance (USD per share) | $ / shares | $ 62.11 |
Granted (USD per share) | $ / shares | 74.94 |
Released (USD per share) | $ / shares | 63.66 |
Forfeited (USD per share) | $ / shares | 77.23 |
Ending balance (USD per share) | $ / shares | $ 54.49 |
Net Income Per Share - Computat
Net Income Per Share - Computation of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Numerator for basic and diluted income per common share: | ||
Net income | $ 27,410 | $ 24,850 |
Less: Net income allocated to unvested participating restricted stock | (679) | (598) |
Net income available to common stockholders - basic | 26,731 | 24,252 |
Effect of unvested participating restricted stock in two-class calculation | 1 | 1 |
Net income available to common stockholders - diluted | $ 26,732 | $ 24,253 |
Denominator: | ||
Weighted average outstanding shares of common stock - basic (in shares) | 15,304 | 16,722 |
Dilutive effect of stock options | 35 | 36 |
Weighted average outstanding shares of common stock - diluted (in shares) | 15,339 | 16,758 |
Net income per common share: | ||
Basic (USD per share) | $ 1.75 | $ 1.45 |
Diluted (USD per share) | $ 1.74 | $ 1.45 |
Segments - Narrative (Details)
Segments - Narrative (Details) | 3 Months Ended |
Mar. 31, 2023 territory country restaurant segment | |
Franchisor Disclosure [Line Items] | |
Number of operating segments (segment) | segment | 6 |
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 | 12 |
IHOP | |
Franchisor Disclosure [Line Items] | |
Number of territories in which entity operates (territory) | territory | 2 |
Number of countries in which entity operates (country) | country | 11 |
Franchised Units | Applebee's | |
Franchisor Disclosure [Line Items] | |
Number of restaurants (restaurant) | 1,673 |
Franchised Units | IHOP | |
Franchisor Disclosure [Line Items] | |
Number of restaurants (restaurant) | 1,790 |
Franchised Units | Fuzzy's | |
Franchisor Disclosure [Line Items] | |
Number of restaurants (restaurant) | 134 |
Entity Operated Units | Applebee's | |
Franchisor Disclosure [Line Items] | |
Number of restaurants (restaurant) | 69 |
Entity Operated Units | Fuzzy's | |
Franchisor Disclosure [Line Items] | |
Number of restaurants (restaurant) | 3 |
Segments - Schedule of Segment
Segments - Schedule of Segment Reporting Information by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Rental revenues | $ 31,951 | $ 28,807 |
Total revenues | 213,767 | 230,423 |
Interest expense | 15,700 | 17,400 |
Depreciation and amortization | 9,222 | 9,938 |
Pretax book income (loss) | 36,169 | 34,157 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Pretax book income (loss) | 103,700 | 92,800 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Interest expense | 14,700 | 15,500 |
Depreciation and amortization | 4,100 | 2,900 |
Pretax book income (loss) | (67,500) | (58,600) |
Franchise operations | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Depreciation and amortization | 2,500 | 2,500 |
Pretax book income (loss) | 92,600 | 83,200 |
Rental operations | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Rental revenues | 32,000 | 28,800 |
Interest expense | 1,000 | 1,100 |
Depreciation and amortization | 2,600 | 2,600 |
Pretax book income (loss) | 10,400 | 6,700 |
Company restaurants | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Interest expense | 0 | 800 |
Depreciation and amortization | 0 | 1,900 |
Pretax book income (loss) | 0 | 2,000 |
Financing operations | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Pretax book income (loss) | 700 | 900 |
Franchise operations | ||
Segment Reporting Information [Line Items] | ||
Revenue from contract with customer | 179,962 | 161,232 |
Franchise operations | Franchise operations | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenue from contract with customer | 180,000 | 161,200 |
Company restaurants | ||
Segment Reporting Information [Line Items] | ||
Revenue from contract with customer | 1,057 | 39,416 |
Company restaurants | Company restaurants | ||
Segment Reporting Information [Line Items] | ||
Revenue from contract with customer | 1,000 | 39,400 |
Financing revenues | ||
Segment Reporting Information [Line Items] | ||
Revenue from contract with customer | 797 | 968 |
Financing revenues | Financing operations | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenue from contract with customer | $ 800 | $ 1,000 |
Closure and Impairment Charge_2
Closure and Impairment Charges - Long-lived Tangible Asset Impairment and Closure Charges (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Closure charges | $ 0.4 | $ 0.1 |
Long-lived tangible asset impairment | 0.1 | 0 |
Total closure and impairment charges | $ 0.5 | $ 0.1 |
Closure and Impairment Charge_3
Closure and Impairment Charges - Narrative (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 USD ($) restaurant | Mar. 31, 2022 USD ($) restaurant | |
Goodwill [Line Items] | ||
Closure charges | $ 0.4 | $ 0.1 |
Long-lived tangible asset impairment | $ 0.1 | $ 0 |
IHOP | ||
Goodwill [Line Items] | ||
Number of restaurants related to prior period closure charge revisions | restaurant | 28 | 35 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Non-Current Financial Liabilities (Details) - Level 2 - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Face Value of Class A-2 Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | $ 1,179.1 | $ 1,247 |
Fair Value of Class A-2 Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | $ 1,152.3 | $ 1,167 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - Applebee's - Property Lease Guarantee $ in Millions | Mar. 31, 2023 USD ($) |
Loss Contingencies [Line Items] | |
Potential liability for guaranteed leases | $ 433.4 |
Potential liability for guaranteed leases excluding unexercised option periods | $ 99 |
Cash, Cash Equivalents and Re_3
Cash, Cash Equivalents and Restricted Cash - Schedule of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | $ 181,606 | $ 269,655 |
Money market funds | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | 25,000 | 75,000 |
IHOP advertising funds and gift card programs | IHOP | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | 89,300 | 96,700 |
Other depository accounts | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | $ 67,300 | $ 98,000 |
Cash, Cash Equivalents and Re_4
Cash, Cash Equivalents and Restricted Cash - Schedule of Current Restricted Cash (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Total current restricted cash | $ 37.1 | $ 38.9 |
Securitized debt reserves | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Total current restricted cash | 31.9 | 32.4 |
Applebee's advertising funds | Applebee's | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Total current restricted cash | 3.8 | 5.4 |
Other | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Total current restricted cash | $ 1.4 | $ 1.1 |
Cash, Cash Equivalents and Re_5
Cash, Cash Equivalents and Restricted Cash - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Cash and Cash Equivalents [Abstract] | ||
Non-current restricted cash | $ 16,400 | $ 16,400 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 3 Months Ended | ||||
Apr. 17, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Jun. 05, 2019 | |
Subsequent Event [Line Items] | |||||
Repayments of long-term debt | $ 66,574,000 | $ 0 | |||
Series 2023-1 7.824% Fixed Rate Senior Secured Notes, Class A-2 | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Debt interest rate (percent) | 7.824% | ||||
Debt instrument, face amount | $ 500,000,000 | ||||
Covenant compliance, leverage ratio, maximum | 525% | ||||
Series 2019-1 4.194% Fixed Rate Senior Secured Notes, Class A-2-I | |||||
Subsequent Event [Line Items] | |||||
Debt interest rate (percent) | 4.194% | 4.194% | 4.194% | ||
Debt instrument, face amount | $ 700,000,000 | ||||
Series 2019-1 4.194% Fixed Rate Senior Secured Notes, Class A-2-I | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Repayments of long-term debt | $ 585,000,000 |