DineEquity, Inc. Announces Solid Second Quarter 2010 Financial Results


SOURCE: DineEquity, Inc.

Applebee’s Posts Third Consecutive Quarter of Domestic System-Wide Same-Restaurant Sales Improvement, IHOP Franchisees Open 21 Restaurants, Company Retires an Additional $26 Million of Securitized Debt

GLENDALE, CA–(Marketwire – July 29, 2010) – DineEquity, Inc. (NYSE: DIN), the parent
company of Applebee’s Neighborhood Grill & Bar and IHOP Restaurants, today
announced financial results for the second quarter 2010. DineEquity’s
financial performance for the second quarter and six months ended June 30,
2010 included the following highlights:

-- For the quarter, IHOP's domestic system-wide same-restaurant sales
   decreased 1.0% and Applebee's domestic system-wide same-restaurant
   sales decreased 1.6% compared to the same periods in 2009, which
   represented Applebee's third consecutive quarter of improvement.
   Year-to-date, IHOP's domestic system-wide same-restaurant sales
   decreased 0.7% and Applebee's domestic system-wide same-restaurant
   sales decreased 2.2%.

-- Securitized debt was reduced by $25.8 million for the second
   quarter 2010 and by $80.7 million in the first six months of 2010
   primarily due to the use of free cash flow for ongoing debt
   retirement efforts.

-- Restaurant operating margins at Applebee's company-operated
   restaurants improved 10 basis points to 14.1% for the second
   quarter 2010 compared to 14.0% for the same quarter of 2009 as
   the Company continued to sustain the restaurant profitability
   improvements achieved over the past two years.

-- Net income available to common stockholders was $7.4 million, or
   $0.42 per diluted share, for the second quarter 2010 compared to net
   income of $18.8 million, or $1.09 per diluted share, for the same
   quarter in 2009. For the first six months of 2010, net income available
   to common stockholders was $20.3 million, or $1.16 per diluted share,
   compared to net income of $49.4 million, or $2.87 per diluted share,
   for the same period in 2009. These decreases were primarily due to
   fewer gains in 2010 with respect to debt repurchases and asset sales
   related to Applebee's company-operated restaurants.

-- Adjusted net income available to common stockholders (see "Non-GAAP
   Financial Measures" below) was $15.7 million, or $0.90 per diluted
   share, for the second quarter 2010 compared to $20.1 million, or
   $1.16 per diluted share, for the same quarter in 2009. For the first
   six months of 2010, adjusted net income available to common stockholders
   was $34.4 million, or $1.97 per diluted share, compared to $39.8
   million, or $2.32 per diluted share, for the same period in 2009.
   These decreases were primarily due to lower operating results, a higher
   income tax rate and increased preferred dividend payments, which were
   partially offset by decreased interest expense.

-- Consolidated G&A expenses increased 8.9% to $37.0 million for the
   second quarter 2010 compared to the same quarter in 2009 primarily
   due to higher expenses for salaries and incentive compensation plans.
   For the first six months of 2010, G&A decreased 4.9% to $77.2 million
   compared to the same period in 2009 primarily due to one-time costs
   of $6.3 million incurred in February 2009 related to the
   establishment of a purchasing co-operative.

-- For the first six months of 2010, cash flows from operating activities
   were $50.3 million, consolidated capital expenditures were $6.9
   million, and free cash flow (see "Non-GAAP Financial Measures" below)
   was $41.0 million.

“We are pleased with our second quarter 2010. Same-restaurant sales results
at both brands were encouraging, with Applebee’s experiencing a third
sequential quarter of improvement as IHOP’s performance continued to be
strong relative to the family dining category. Our business’ significant
free cash flow generation abilities enabled the retirement of more than $80
million of securitized debt year-to-date. And, we recently announced the
sale of 63 company-operated Applebee’s restaurants that will result in a
$105 million financial benefit to the Company,” said Julia A. Stewart,
DineEquity’s chairman and chief executive officer. “Looking ahead, we
remain focused on executing our revitalizing plans for Applebee’s and
ensuring that IHOP creates an insurmountable lead in family dining. Our
plan includes marketing, menu, operational and remodel initiatives that
will differentiate the Applebee’s and IHOP brands and position DineEquity
for a solid financial performance in the second half of 2010.”

Same-Restaurant Sales Performance

IHOP’s domestic system-wide same-restaurant sales decreased 1.0% for the
second quarter 2010 compared to the same quarter in 2009. Same-restaurant
sales reflect a higher average guest check and declines in guest traffic.
This reflected timing impacts related to the Easter and Fourth of July
holidays which negatively impacted results by 40 basis points. IHOP’s
marketing efforts during the quarter included Loaded Country Potatoes and
Pancake Stackers limited-time offers, and its Kids Eat Free dinner
promotion, among other activities.

Applebee’s domestic system-wide same-restaurant sales decreased 1.6% for
the second quarter 2010, which reflected Applebee’s third quarter of
sequential improvements. Domestic franchise same-restaurant sales decreased
1.3% and company-operated Applebee’s same-restaurant sales decreased 2.6%
for the second quarter 2010 compared to the same quarter in 2009. Results
at Company restaurants reflected declines in guest traffic and a higher
average guest check, including a 1.6% increase in effective pricing, as
well as timing impacts related to the Easter holiday which positively
impacted results by 40 basis points. Applebee’s marketing efforts during
the quarter included the promotion of its Great Tasting and Under 550
Calories and Realburgers Across America menu offerings, as well as the
introduction of Applebee’s new Sizzling Skillet Entrees, among other
activities.

Applebee’s Restaurant Operating Margins

Applebee’s company-operated restaurant operating margin was 14.1% in the
second quarter 2010 compared to 14.0% for the second quarter 2009. The 10
basis point improvement was primarily due to favorable commodity costs
partially offset by increased marketing programs to drive guest traffic.

For the first six months of 2010, Applebee’s company-operated restaurant
operating margin was 14.4% compared to 15.2% for the same period in 2009.
The 80 basis point decline was primarily due to increased marketing
programs to drive guest traffic and higher facility related costs partially
offset by favorable commodity costs and continued improvements in labor
management.

Debt Management

Securitized debt was reduced by $25.8 million during the second quarter
2010 and by $80.7 million year-to-date as a result of open market purchases
and scheduled payments on the Company’s subordinated notes. DineEquity has
reduced its total outstanding debt levels by $405.5 million, or 16.4%,
since the acquisition of Applebee’s in November 2007.

As of the end of the second quarter 2010, DineEquity remained comfortably
in compliance with the debt covenants set forth in the Company’s
securitized debt agreements. The Company’s consolidated leverage ratio was
5.96x compared to a required threshold of 7.0x. Debt service coverage
ratios (DSCR) were 3.48x for IHOP’s securitized debt on a three-month
unadjusted basis and 3.70x for the Applebee’s securitized debt on a
three-month adjusted basis, both compared to a minimum required threshold
of 1.85x. Applebee’s 12-month adjusted DSCR was 3.33x, compared to a
minimum required threshold of 2.25x.

DineEquity has provided supplemental information to this news release
regarding its compliance with its debt covenants, which may be accessed by
visiting the Calls & Presentations section of DineEquity’s Investor
Relations Web site at http://investors.dineequity.com and referring to
supporting materials for the Company’s second quarter 2010 webcast.

Sale of 63 Company-Operated Applebee’s

On July 23, 2010, DineEquity announced that it had entered into an asset
purchase agreement with Apple American Group LLC for the sale of 63
company-operated Applebee’s restaurants located in Minnesota and parts of
Wisconsin. This transaction is accretive to the Company’s consolidated
leverage ratio as defined by its debt covenants and furthers its strategic
objective of transitioning Applebee’s into a more highly franchised
restaurant system over time. Scheduled to close in the fourth quarter 2010,
the transaction is expected to deliver $105 million of financial benefit to
the Company including: 1) the reduction of securitized debt by $28 million
on an after-tax basis, 2) the reduction of sale-leaseback related financing
obligations by $46 million, and 3) the removal of $31 million of operating
lease obligations for debt covenant calculation purposes.

2010 Financial Performance Guidance

DineEquity provided the following update to its fiscal 2010 financial
outlook primarily reflecting the impact of the scheduled sale of 63
company-operated Applebee’s restaurants which is scheduled to be completed
in the fourth quarter 2010:

-- Reduced consolidated cash from operations guidance by $10 million to
   range between $135 and $145 million as the result of the sale of
   Applebee's company-operated restaurants. Key components that comprise
   the change include expected payments of net working capital
   liabilities, income tax payments and reduced profit contribution. This
   compares to the Company's previous expectations of $145 million to $155
   million of consolidated cash from operations in 2010.

-- Reduced consolidated free cash flow to range between $108 and $118
   million due to the reduction in consolidated cash from operations
   expectations. Free cash flow consists of consolidated cash from
   operations plus approximately $16 million generated from the structural
   run-off of the Company's long-term notes receivable. Uses of cash
   include consolidated capital expenditures of approximately $20 million
   and approximately $23 million in preferred stock dividend payments. The
   Company plans to use available free cash flow to fund securitized debt
   reductions.

-- Reduced consolidated securitized debt interest expense expectations to
   range between $170 million and $175 million for 2010, approximately
   $40 million of which is non-cash interest expense, due to more
   aggressive debt retirement efforts in the first half of 2010. This
   compares to the Company's previous expectations of $175 million to
   $180 million.

-- Increased the Company's income tax rate expectations to range between
   35% and 36% compared to previous expectations of approximately 34%.
   This change is primarily related to settlements on state tax audits.

-- Reiterated Applebee's domestic system-wide same-restaurant sales
   performance expectations to range between flat and negative 3% for
   fiscal 2010, with Applebee's franchisees slated to open between 25 and
   30 new restaurants this year.

-- Reiterated operating margin expectations at Applebee's
   company-operated restaurants to range between 13.5% and 14.5% for the
   full year 2010.

-- Reiterated IHOP's domestic system-wide same-restaurant sales
   performance expectations to range between positive 1% and negative 1%
   for fiscal 2010, with IHOP franchisees slated to open between 60 and
   70 new restaurants this year.

-- Reiterated consolidated G&A expense expectations to range between
   $158 million and $161 million for fiscal 2010, including non-cash
   stock based compensation expense and depreciation of approximately
   $20 million.

-- Reiterated depreciation and amortization expectations to range between
   $65 million and $70 million.

Investor Conference Call Today

The Company will host an investor conference call to discuss its second
quarter 2010 financial results today at 11:00 a.m. Eastern Time (8:00 a.m.
Pacific Time). To participate on the call, please dial (888) 713-4211 and
reference pass code 88785262. A live webcast of the call will be available
on DineEquity’s Web site at www.dineequity.com, and may be accessed by
visiting Calls & Presentations under the site’s Investor Information
section. A telephonic replay of the call may be accessed through August 5,
2010 by dialing 888-286-8010 and referencing pass code 50100212. An online
archive of the webcast also will be available on the Investor Information
section of DineEquity’s Web site.

About DineEquity, Inc.

Based in Glendale, California, DineEquity, Inc., through its subsidiaries,
franchises and operates restaurants under the Applebee’s Neighborhood Grill
& Bar and IHOP brands. With more than 3,450 restaurants combined,
DineEquity is the largest full-service restaurant company in the world. For
more information on DineEquity, visit the Company’s Web site located at
www.dineequity.com.

Forward-Looking Statements

There are forward-looking statements contained in this news release. They
use such words as “may,” “will,” “expect,” “believe,” “plan,” or other
similar terminology. These statements involve known and unknown risks,
uncertainties and other factors, which may cause the actual results to be
materially different than those expressed or implied in such statements.
These factors include, but are not limited to: the implementation of
DineEquity, Inc.’s (the “Company”) strategic growth plan; the availability
of suitable locations and terms for sites designated for development; the
ability of franchise developers to fulfill their commitments to build new
restaurants in the numbers and time frames covered by their development
agreements; legislation and government regulation including the ability to
obtain satisfactory regulatory approvals; risks associated with the
Company’s indebtedness; conditions beyond the Company’s control such as
weather, natural disasters, disease outbreaks, epidemics or pandemics
impacting the Company’s customers or food supplies, or acts of war or
terrorism; availability and cost of materials and labor; cost and
availability of capital; competition; potential litigation and associated
costs; continuing acceptance of the International House of Pancakes
(“IHOP”) and Applebee’s brands and concepts by guests and franchisees; the
Company’s overall marketing, operational and financial performance;
economic and political conditions; adoption of new, or changes in,
accounting policies and practices; and other factors discussed from time to
time in the Company’s news releases, public statements and/or filings with
the Securities and Exchange Commission, especially the “Risk Factors”
sections of Annual and Quarterly Reports on Forms 10-K and 10-Q.
Forward-looking information is provided by the Company pursuant to the safe
harbor established under the Private Securities Litigation Reform Act of
1995 and should be evaluated in the context of these factors. In addition,
the Company disclaims any intent or obligation to update these
forward-looking statements.

Non-GAAP Financial Measures

This news release includes references to the Company’s non-GAAP financial
measures “adjusted net income available to common stockholders (adjusted
EPS),” “EBITDA,” and “free cash flow.” Adjusted EPS is computed for a given
period by deducting from net income (loss) available to common stockholders
for such period the effect of any impairment and closure charges, any gain
related to debt extinguishment, any intangible asset amortization, any
non-cash interest expense and any gain or loss related to the disposition
of assets incurred in such period. This is presented on an aggregate basis
and a per share (diluted) basis. The Company defines “EBITDA” for a given
period as income before income taxes (including gain on extinguishment of
debt) less interest expense, depreciation and amortization, impairment and
closure charges, stock-based compensation, gain/loss on sale of assets and
non-cash amounts related to a captive insurance subsidiary. “EBITDAR” for a
given period is defined as EBITDA plus annualized operating lease expense
(Rent). “Free cash flow” for a given period is defined as cash provided by
operating activities, plus receipts from notes and equipment contracts
receivable (“long-term notes receivable”), less dividends paid and capital
expenditures. Management utilizes EBITDA for debt covenant purposes and
free cash flow to determine the amount of cash remaining for general
corporate and strategic purposes after the receipts from long-term notes
receivable, and the funding of operating activities, capital expenditures
and preferred dividends. Management believes this information is helpful to
investors to determine the Company’s adherence to debt covenants and the
Company’s cash available for these purposes. Adjusted EPS, EBITDA and free
cash flow are supplemental non-GAAP financial measures and should not be
considered in isolation or as a substitute for measures of performance
prepared in accordance with generally accepted accounting principles.

                     DINEEQUITY, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF INCOME
                 (In thousands, except per share amounts)
                               (Unaudited)

                                 Three Months Ended     Six Months Ended
                                      June 30,              June 30,
                                --------------------  --------------------
                                  2010       2009       2010       2009
                                ---------  ---------  ---------  ---------
Revenues
   Franchise revenues           $  93,203  $  90,514  $ 188,479  $ 188,724
   Company restaurant sales       210,695    222,268    435,309    461,792
   Rental revenues                 32,187     32,544     66,119     66,253
   Financing revenues               3,838      4,324      7,988      8,437
                                ---------  ---------  ---------  ---------
     Total revenues               339,923    349,650    697,895    725,206
                                ---------  ---------  ---------  ---------
Costs and Expenses
   Franchise expenses              25,950     23,736     50,855     52,034
   Company restaurant expenses    182,048    192,181    374,607    394,037
   Rental expenses                 23,849     24,275     48,249     48,817
   Financing expenses                   2        339        471        346
   General and administrative
    expenses                       36,981     33,959     77,166     81,118
   Interest expense                43,692     45,970     88,570     94,380
   Impairment and closure
    charges                         1,687      2,352      2,196      2,001
   Amortization of intangible
    assets                          3,076      3,018      6,153      6,037
   Gain on extinguishment of
    debt                           (1,055)   (12,449)    (4,640)   (38,803)
   Loss (gain) on disposition
    of assets                         364         (5)       178     (5,142)
   Other expense (income), net        956        (94)     1,945        129
                                ---------  ---------  ---------  ---------
Total costs and expenses          317,550    313,282    645,750    634,954
                                ---------  ---------  ---------  ---------
Income before income taxes         22,373     36,368     52,145     90,252
Provision for income taxes         (8,332)   (11,554)   (18,433)   (28,297)
                                ---------  ---------  ---------  ---------
Net income                      $  14,041  $  24,814  $  33,712  $  61,955
                                =========  =========  =========  =========
Net income                      $  14,041  $  24,814  $  33,712  $  61,955
   Less: Series A preferred
    stock dividends                (5,700)    (4,750)   (11,460)    (9,500)
   Less: Accretion of Series B
    preferred stock                  (603)      (569)    (1,198)    (1,129)
   Less: Net income allocated
    to unvested participating
    restricted stock                 (296)      (719)      (801)    (1,916)
                                ---------  ---------  ---------  ---------
Net income available to common
 stockholders                   $   7,442  $  18,776  $  20,253  $  49,410
                                =========  =========  =========  =========
Net income available to common
 stockholders per share
   Basic                        $    0.43  $    1.11  $    1.18  $    2.93
                                =========  =========  =========  =========
   Diluted                      $    0.42  $    1.09  $    1.16  $    2.87
                                =========  =========  =========  =========
Weighted average shares
 outstanding
   Basic                           17,226     16,929     17,119     16,886
                                =========  =========  =========  =========
   Diluted                         17,560     17,845     17,476     17,625
                                =========  =========  =========  =========





                      DINEEQUITY, INC. AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS
             (In thousands, except share and per share amounts)

                                                     June 30,  December 31,
                                                       2010        2009
                                                    ----------- -----------
                                                    (Unaudited)

                         Assets

Current assets:
   Cash and cash equivalents                        $    64,120 $    82,314
   Restricted cash                                       60,624      72,690
   Receivables, net                                      75,420     104,690
   Inventories                                           11,966      12,236
   Prepaid income taxes                                      --       7,702
   Prepaid gift cards                                    14,971      19,878
   Prepaid expenses                                      16,663      13,425
   Deferred income taxes                                 19,050      15,444
   Assets held for sale                                   6,237       8,765
                                                    ----------- -----------
     Total current assets                               269,051     337,144
                                                    ----------- -----------
Non-current restricted cash                              45,461      48,173
Restricted assets related to captive insurance
 subsidiary                                               3,898       4,344
Long-term receivables                                   250,399     259,775
Property and equipment, net                             750,270     771,372
Goodwill                                                697,470     697,470
Other intangible assets, net                            843,529     849,552
Other assets, net                                       125,754     133,038
                                                    ----------- -----------
Total assets                                        $ 2,985,832 $ 3,100,868
                                                    =========== ===========
        Liabilities and Stockholders' Equity
Current liabilities:
   Current maturities of long-term debt             $    25,200 $    25,200
   Accounts payable                                      25,210      31,729
   Accrued employee compensation and benefits            30,409      37,397
   Gift card liability                                   60,943     105,465
   Other accrued expenses                                49,918      54,549
   Accrued interest payable                               3,936       3,627
                                                    ----------- -----------
     Total current liabilities                          195,616     257,967
                                                    ----------- -----------
Long-term debt, less current maturities               1,561,224   1,637,198
Financing obligations, less current maturities          304,980     309,415
Capital lease obligations, less current maturities      148,480     152,758
Deferred income taxes                                   362,416     369,127
Other liabilities                                       119,721     117,449
                                                    ----------- -----------
     Total liabilities                                2,692,437   2,843,914

Commitments and contingencies
Preferred stock, Series A                               187,050     187,050
Total stockholders' equity                              106,345      69,904
                                                    ----------- -----------
     Total liabilities and stockholders' equity     $ 2,985,832 $ 3,100,868
                                                    =========== ===========





                     DINEEQUITY, INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (In thousands)
                               (Unaudited)

                                                        Six Months Ended
                                                            June 30,
                                                      --------------------
                                                        2010       2009
                                                      ---------  ---------
Cash flows from operating activities
Net income                                            $  33,712  $  61,955
  Adjustments to reconcile net income to cash flows
   provided by operating activities
    Depreciation and amortization                        32,164     32,382
    Non-cash interest expense                            20,621     19,280
    Gain on extinguishment of debt                       (4,640)   (38,803)
    Impairment and closure charges                        2,196      2,001
    Deferred income taxes                               (13,299)     4,845
    Non-cash stock-based compensation expense             7,300      5,277
    Tax benefit from stock-based compensation             1,249        376
    Excess tax benefit from stock options exercised      (1,968)       (41)
    Loss (gain) on disposition of assets                    178     (5,142)
    Other                                                  (276)    (3,620)
    Changes in operating assets and liabilities
      Receivables                                        27,693     35,384
      Inventories                                           246     (1,009)
      Prepaid expenses                                   14,263      6,070
      Accounts payable                                   (7,196)   (13,931)
      Accrued employee compensation and benefits         (7,073)   (12,617)
      Gift card liability                               (44,523)   (45,254)
      Other accrued expenses                            (10,372)    14,328
                                                      ---------  ---------
        Cash flows provided by operating activities      50,275     61,481
                                                      ---------  ---------
Cash flows from investing activities
    Additions to property and equipment                  (6,859)    (5,899)
    Proceeds from sale of property and equipment and
     assets held for sale                                 2,583     11,260
    Principal receipts from notes and equipment
     contracts receivable                                 8,955      8,206
    Reduction of long-term receivables                    1,863      1,029
    Other                                                 1,121        896
                                                      ---------  ---------
        Cash flows provided by investing activities       7,663     15,492
                                                      ---------  ---------
Cash flows from financing activities
    Proceeds from issuance of long-term debt                 --     10,000
    Repayment of long-term debt                         (74,359)  (101,701)
    Principal payments on capital lease and financing
     obligations                                         (7,946)    (7,047)
    Dividends paid                                      (11,400)    (9,500)
    Repurchase of restricted stock                         (832)      (287)
    Proceeds from stock options exercised                 1,953        308
    Excess tax benefit from stock options exercised       1,968         41
    Payment of accrued debt issuance costs                   --    (20,030)
    Restricted cash related to securitization            14,778     17,293
    Other                                                  (294)      (123)
                                                      ---------  ---------
        Cash flows used in financing activities         (76,132)  (111,046)
                                                      ---------  ---------
    Net change in cash and cash equivalents             (18,194)   (34,073)
    Cash and cash equivalents at beginning of period     82,314    114,443
                                                      ---------  ---------
    Cash and cash equivalents at end of period        $  64,120  $  80,370
                                                      =========  =========





                       NON-GAAP FINANCIAL MEASURES
                (In thousands, except per share amounts)
                              (Unaudited)

Reconciliation of (i) net income available to common stockholders to (ii)
net income available to common stockholders excluding impairment and
closure charges, gain on extinguishment of debt, amortization of intangible
assets, non-cash interest expense and loss (gain) on disposition of assets,
and related per share data:

                                 Three Months Ended     Six Months Ended
                                      June 30,             June 30,
                                --------------------  --------------------
                                  2010       2009       2010       2009
                                ---------  ---------  ---------  ---------
Net income available to common
 stockholders, as reported      $   7,442  $  18,776  $  20,253  $  49,410
Impairment and closure charges      1,687      2,352      2,196      2,001
Gain on extinguishment of debt     (1,055)   (12,449)    (4,640)   (38,803)
Amortization of intangible
 assets                             3,076      3,018      6,153      6,037
Non-cash interest expense          10,250      9,344     20,621     19,280
Loss (gain) on disposition of
 assets                               364         (5)       178     (5,142)
Income tax (provision) benefit     (5,700)      (899)    (9,754)     6,618
Net income allocated to
 unvested participating
 restricted stock                    (327)       (50)      (562)       374
                                ---------  ---------  ---------  ---------
Net income available to
 common stockholders, as
 adjusted                       $  15,737  $  20,087  $  34,445  $  39,775
                                =========  =========  =========  =========

Diluted net income available
 to common stockholders per
 share:
Net income available to common
 stockholders per share, as
 reported                       $    0.42  $    1.09  $    1.16  $    2.87
Impairment and closure charges
 per share                           0.06       0.08       0.08       0.07
Gain on extinguishment of debt
 per share                          (0.04)     (0.42)     (0.16)     (1.33)
Amortization of intangible
 assets per share                    0.11       0.10       0.21       0.21
Non-cash interest expense per
 share                               0.35       0.32       0.71       0.66
Loss (gain) on disposition of
 assets per share                    0.01         --       0.01      (0.18)
Net income allocated to
 unvested participating
 restricted stock per share         (0.02)        --      (0.03)      0.02
Per share effect of dilutive
 calculation adjustments             0.01      (0.01)     (0.01)        --
                                ---------  ---------  ---------  ---------
Diluted net income available to
 common stockholders per share,
 as adjusted                    $    0.90  $    1.16  $    1.97  $    2.32
                                =========  =========  =========  =========

Numerator for basic EPS-income
 available to common
 stockholders, as adjusted      $  15,737  $  20,087  $  34,445  $  39,775
Effect of unvested
 participating restricted stock
 using the two-class method            11         38         28         62
Effect of dilutive securities:
Stock options                          --         --         --         --
Convertible Series B preferred
 stock                                 --        569         --      1,129
                                ---------  ---------  ---------  ---------
Numerator for diluted
 EPS-income available to common
 stockholders after assumed
 conversions, as adjusted       $  15,748  $  20,694  $  34,473  $  40,966
                                =========  =========  =========  =========

Denominator for basic
 EPS-weighted-average shares       17,226     16,929     17,119     16,886
Effect of dilutive securities:
Stock options                         334        362        357        183
Convertible Series B preferred
 stock                                 --        556         --        556
                                ---------  ---------  ---------  ---------
Denominator for diluted
 EPS-weighted-average shares
 and assumed conversions           17,560     17,847     17,476     17,625
                                =========  =========  =========  =========





                       NON-GAAP FINANCIAL MEASURES
                            (In thousands)
                              (Unaudited)

Reconciliation of (i) loss before income taxes to (ii) EBITDA and to (ii)
EBITDAR:

             Trailing Twelve Months Ended June 30, 2010

Loss before income taxes (including gain on extinguishment of
 debt)                                                         $    (1,523)
Interest expense                                                   201,129
Depreciation and amortization                                       65,096
Impairment and closure charges                                     105,290
Non-cash stock-based compensation                                   12,733
Gain on sale of assets                                              (2,023)
Non-cash amounts related to captive insurance subsidiary               332
                                                               -----------
EBITDA                                                             381,034
Annualized operating lease expense                                  96,901
                                                               -----------
EBITDAR                                                        $   477,935
                                                               ===========

Reconciliation of the Company's cash provided by operating activities to
free cash flow:

                                   Six Months Ended
                                       June 30,
                                  ------------------
                                    2010      2009       2010 Guidance*
                                  --------  --------  --------------------
Cash flows from operating
 activities                       $ 50,275  $ 61,481  $ 135,000 to 145,000
Receipts from long-term notes
 receivable                          8,955     8,206         16,000
Dividends paid                     (11,400)   (9,500)       (23,000)
Capital expenditures                (6,859)   (5,899)       (20,000)
                                  --------  --------  --------------------
Free cash flow                    $ 40,971  $ 54,288  $ 108,000 to 118,000
                                  ========  ========  ====================

*Inclusive of expected payments of net working capital liabilities, income
tax payments and reduced profit contribution associated with the scheduled
sale of 63 Applebee's company-operated restaurants in 2010.





Restaurant Data

   The following table sets forth, for the three-month and six-month
periods ended June 30, 2010 and 2009, the number of effective restaurants
in the Applebee's and IHOP systems and information regarding the percentage
change in sales at those restaurants compared to the same periods in the
prior year. "Effective restaurants" are the number of restaurants in a
given period, adjusted to account for restaurants open for only a portion
of the period. Information is presented for all effective restaurants in
the IHOP and Applebee's systems, which includes restaurants owned by the
Company, as well as those owned by franchisees and area licensees. Sales
at restaurants that are owned by franchisees and area licensees are not
attributable to the Company. However, we believe that presentation of
this information is useful in analyzing our revenues because franchisees
and area licensees pay us royalties and advertising fees that are
generally based on a percentage of their sales, as well as rental
payments under leases that are usually based on a percentage of their
sales. Management also uses this information to make decisions about
future plans for the development of additional restaurants as well as
evaluation of current operations.

                                    Three Months          Six Months
                                   Ended June 30,        Ended June 30,
                                 ------------------    ------------------
                                   2010       2009       2010       2009
                                 -------    -------    -------    -------
Applebee's Restaurant Data                      (unaudited)
Effective restaurants(a)
   Franchise                       1,607      1,589      1,605      1,589
   Company                           393        401        395        403
                                 -------    -------    -------    -------
     Total                         2,000      1,990      2,000      1,992
                                 =======    =======    =======    =======
System-wide(b)
   Sales percentage change(c)       (2.5)%     (4.2)%     (2.9)%     (3.3)%
   Domestic same-restaurant
    sales percentage change(d)      (1.6)%     (4.3)%     (2.2)%     (3.6)%
Franchise(e)
   Sales percentage change(c)(g)    (1.8)%      3.1 %     (2.1)%      3.9 %
   Same-restaurant sales
    percentage change(d)            (1.3)%     (4.2)%     (2.0)%     (3.5)%
   Average weekly domestic unit
    sales (in thousands)         $  45.7    $  46.6    $  46.9    $  48.0
Company
   Sales percentage change(c)(g)    (5.2)%    (25.4)%     (5.8)%    (24.5)%
   Same-restaurant sales
    percentage change(d)            (2.6)%     (4.8)%     (3.0)%     (4.0)%
   Average weekly domestic unit
    sales (in thousands)         $  40.4    $  41.9    $  41.5    $  43.3




                                    Three Months          Six Months
                                   Ended June 30,        Ended June 30,
                                 ------------------    ------------------
                                   2010       2009       2010       2009
                                 -------    -------    -------    -------
IHOP Restaurant Data                            (unaudited)
Effective restaurants(a)
   Franchise                       1,290      1,235      1,285      1,230
   Company                            12         11         12         11
   Area license                      164        160        164        159
                                 -------    -------    -------    -------
     Total                         1,466      1,406      1,461      1,400
                                 =======    =======    =======    =======
System-wide(b)
   Sales percentage change(c)        4.1 %      3.6 %      3.7 %      4.6 %
   Domestic same-restaurant
    sales percentage change(d)      (1.0)%     (0.6)%     (0.7)%      0.7 %
Franchise(e)
   Sales percentage change(c)        4.4 %      3.9 %      3.7 %      5.1 %
   Same-restaurant sales
    percentage change(d)            (1.0)%     (0.6)%     (0.7)%      0.7 %
   Average weekly unit sales (in
    thousands)                   $  35.1    $  35.2    $  35.6    $  35.8
Company(f)                          n.m.       n.m.       n.m.       n.m.
Area License(h)
   Sales percentage change(c)        1.0 %      0.9 %      3.7 %     (0.3)%


(a) "Effective restaurants" are the number of restaurants in a given fiscal
    period adjusted to account for restaurants open for only a portion of
    the period. Information is presented for all effective restaurants in
    the IHOP and Applebee's systems, which includes restaurants owned by
    the Company as well as those owned by franchisees and area licensees.

(b) "System-wide" sales are retail sales at IHOP and Applebee's restaurants
    operated by franchisees and IHOP restaurants operated by area
    licensees, as reported to the Company, in addition to retail sales at
    company-operated restaurants.  Sales at restaurants that are owned by
    franchisees and area licensees are not attributable to the Company.

(c) "Sales percentage change" reflects, for each category of restaurants,
    the percentage change in sales in any given fiscal period compared to
    the prior fiscal period for all restaurants in that category.

(d) "Same-restaurant sales percentage change" reflects the percentage
    change in sales, in any given fiscal period compared to the same weeks
    in the prior year, for restaurants that have been operated throughout
    both fiscal periods that are being compared and have been open for at
    least 18 months. Because of new unit openings and restaurant closures,
    the restaurants open throughout both fiscal periods being compared
    may be different from period to period. Same-restaurant sales
    percentage change does not include data on IHOP restaurants located
    in Florida.

(e) Applebee's franchise restaurant sales were $870.2 million and $886.4
    million for the three months ended June 30, 2010 and 2009,
    respectively, and $1,787.4 million and $1,826.3 million for the six
    months ended June 30, 2010 and 2009, respectively. IHOP franchise
    restaurant sales were $589.2 million and $564.3 million for the three
    months ended June 30, 2010 and 2009, respectively, and $1,188.9
    million and $1,146.3 million for the six months ended June 30, 2010
    and 2009, respectively.

(f) Sales percentage change and same-restaurant sales percentage change
    for IHOP company-operated restaurants are not meaningful ("n.m.")
    due to the relatively small number and test-market nature of the
    restaurants, along with the periodic inclusion of restaurants
    reacquired from franchisees that are temporarily operated by the
    Company.

(g) The sales percentage change for the three and six months ended
    June 30, 2009 for Applebee's franchise and company-operated
    restaurants was impacted by the franchising of 103 company-operated
    restaurants during 2008 and seven company-operated restaurants in
    2009.

(h) Sales at IHOP area license restaurants were $55.0 million and $54.4
    million for the three months ended June 30, 2010 and 2009,
    respectively, and $115.1 million and $110.9 million for the six
    months ended June 30, 2010 and 2009, respectively.





                DINEEQUITY, INC. AND SUBSIDIARIES
                        RESTAURANT DATA

The following table summarizes our restaurant development activity:

                                          Three Months       Six Months
                                         Ended June 30,    Ended June 30,
                                        ----------------  ----------------
                                          2010     2009     2010     2009
                                        -------  -------  ------- --------
                                                    (unaudited)
Applebee's Restaurant Development
 Activity
Total restaurants, beginning of period    1,999    1,992    2,008    2,004
New openings
   Company-developed                         --       --       --       --
   Franchise-developed                        5        5        8       10
                                        -------  -------  ------- --------
     Total new openings                       5        5        8       10
Closings
   Company                                   --       --       (6)      --
   Franchise                                 (3)      (5)      (9)     (22)
                                        -------  -------  ------- --------
     Total closings                          (3)      (5)     (15)     (22)
                                        -------  -------  ------- --------
Total restaurants, end of period          2,001    1,992    2,001    1,992
                                        =======  =======  =======  =======
Summary-end of period
Franchise                                 1,608    1,591    1,608    1,591
Company                                     393      401      393      401
                                        -------  -------  ------- --------
     Total                                2,001    1,992    2,001    1,992
                                        =======  =======  =======  =======



                                          Three Months       Six Months
                                         Ended June 30,    Ended June 30,
                                        ----------------  ----------------
                                          2010     2009     2010     2009
                                        -------  -------  ------- --------
                                                    (unaudited)
IHOP Restaurant Development Activity
Total restaurants, beginning of period    1,461    1,402    1,456    1,396
New openings
   Company-developed                         --       --       --       --
   Franchise-developed                       20       20       26       31
   Area license                               1        3        2        3
                                        -------  -------  ------- --------
     Total new openings                      21       23       28       34
Closings
   Company                                   (2)      --       (2)      --
   Franchise                                 (2)      (3)      (3)      (7)
   Area license                              (2)      (1)      (3)      (2)
                                        -------  -------  ------- --------
     Total new closings                      (6)      (4)      (8)      (9)
                                        -------  -------  ------- --------
Total restaurants, end of period          1,476    1,421    1,476    1,421
                                        =======  =======  =======  =======
Summary-end of period
Franchise                                 1,303    1,249    1,303    1,249
Company                                      10       11       10       11
Area license                                163      161      163      161
                                        -------  -------  ------- --------
     Total                                1,476    1,421    1,476    1,421
                                        =======  =======  =======  =======


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