DineEquity, Inc. Reports Strong Third Quarter 2013 Results
Applebee's domestic system-wide same-restaurant sales decreased 0.4% for the third quarter of 2013 compared to the same quarter of 2012. The decrease in same-restaurant sales reflected a decline in traffic, partially offset by an increase in average guest check.
DineEquity, Inc. (NYSE: DIN), the parent company of Applebee's Neighborhood Grill & Bar® and IHOP® restaurants, announced financial results for the third quarter of 2013.
“I am pleased with our same-restaurant sales performance in a challenging economic environment. We are building momentum and are on the right track with consumers. We are continuing to execute on our strategy to differentiate both brands, driving both innovation and change,” said Julia A. Stewart, Chairman and Chief Executive Officer of DineEquity, Inc. “During the third quarter, we generated substantial free cash flow, which allowed us to return significant cash to stockholders through the combination of a cash dividend payment and share repurchases. I am confident in our strategy for long-term success.”
Third Quarter 2013 Financial Highlights
- Adjusted net income available to common stockholders was $21.0 million, representing adjusted earnings per diluted share of $1.10 for the third quarter of 2013, which includes approximately $3.8 million in non-recurring termination fees arising from the previously disclosed bankruptcy filing by an Applebee’s franchisee. This compares to $18.9 million, or adjusted earnings per diluted share of $1.03, for the third quarter of 2012. The increase in adjusted net income was due to lower cash interest expense and a decline in general and administrative expenses. The increase was partially offset by, as expected, lower segment profit resulting from the refranchise and sale of 137 Applebee’s company-operated restaurants during the third and fourth quarters of 2012, and a higher tax rate. (See “Non-GAAP Financial Measures” below.)
- GAAP net income available to common stockholders was $18.4 million, or earnings per diluted share of $0.97 for the third quarter of 2013, compared to $58.7 million, or earnings per diluted share of $3.14, for the third quarter of 2012. The decrease in net income was primarily due to the impact of 2012 refranchising asset sales and related lower segment profit. These items were partially offset by lower income tax expense, a decline in general and administrative expenses, and lower interest expense.
- Consolidated general and administrative expenses were $35.3 million for the third quarter of 2013 compared to $48.7 million in the third quarter of 2012. The decrease was primarily due to a non-recurring $9.0 million charge recorded in the third quarter of 2012 related to settlement of litigation that commenced prior to our acquisition of Applebee’s and lower personnel costs.
First Nine Months of 2013 Highlights
- Adjusted net income available to common stockholders was $62.5 million in the first nine months of 2013, representing adjusted earnings per diluted share of $3.26. This compares to $62.6 million, or adjusted earnings per diluted share of $3.44, for the same period in 2012. The decrease was primarily due to lower segment profit as a result of refranchising and a higher tax rate. These items were partially offset by lower cash interest expense and a decline in general and administrative expenses. (See “Non-GAAP Financial Measures” below.)
- GAAP net income available to common stockholders was $53.0 million in the first nine months of 2013, or earnings per diluted share of $2.76, compared to $104.3 million, or earnings per diluted share of $5.66 for the same period in 2012. The decrease in net income was primarily due to the impact of 2012 refranchising asset sales and related lower segment profit. These items were partially offset by lower income tax expense, a decline in general and administrative expenses, and lower interest expense.
- Consolidated general and administrative expenses were $105.0 million in the first nine months of 2013 compared to $125.6 million for the same period of 2012. The decrease was primarily due to a decline in compensation costs and a non-recurring $9.0 million charge recorded in the third quarter of 2012 related to settlement of litigation.
- EBITDA was $211.9 million for the first nine months of 2013. (See “Non-GAAP Financial Measures” below.)
- For the first nine months of 2013, cash flows from operating activities were $102.8 million, principal receipts from long-term receivables were $10.3 million, capital expenditures were $4.5 million, principal payments on capital lease and financing obligations were $7.5 million, the mandatory 1% repayment on the Term Loan principal balance was $2.4 million, and free cash flow was $98.6 million. (See “Non-GAAP Financial Measures” below.)
Same-Restaurant Sales Performance
Third Quarter 2013
- Applebee’s domestic system-wide same-restaurant sales decreased 0.4% for the third quarter of 2013 compared to the same quarter of 2012. The decrease in same-restaurant sales reflected a decline in traffic, partially offset by an increase in average guest check.
- IHOP’s domestic system-wide same restaurant sales increased 3.6% for the third quarter of 2013 compared to the same quarter of 2012. The increase in same-restaurant sales reflected a higher average guest check, largely due to a favorable shift in product mix. The increase was partially offset by a decline in traffic.
First Nine Months of 2013
- Applebee’s domestic system-wide same-restaurant sales decreased 0.1% for the first nine months of 2013 compared to the same period in 2012. The decrease in same-restaurant sales reflected a decline in traffic, partially offset by an increase in average guest check.
- IHOP’s domestic system-wide same restaurant sales increased 1.7% for the first nine months of 2013 compared to the same period in 2012. The increase in same-restaurant sales reflected a higher average guest check, partially offset by a decline in traffic.
Financial Performance Guidance for Fiscal 2013
- Revised Applebee’s domestic system-wide same-restaurant sales performance to range between negative 0.5% and positive 0.5%. This reflects a narrowing of the range from our previous expectations of between negative 1.5% and positive 1.5%.
- Revised IHOP’s domestic system-wide same-restaurant sales performance to range between positive 2.0% and positive 3.0%. This reflects an increase from previous expectations of between negative 1.5% and positive 1.5%.
- Revised Applebee’s franchisees to develop between 25 and 30 new restaurants, the majority of which are expected to be opened in the U.S. This reflects a reduction from previous expectations of between 40 and 50 new restaurants.
- Reiterated IHOP franchisees and its area licensee to develop between 50 and 60 new restaurants, the majority of which are expected to be domestic openings.
- Revised Franchise segment profit to be between $329 million and $331 million. This reflects an increase from previous expectations of between $312 million and $325 million.
- Revised Company Restaurants segment profit to breakeven. This is net of approximately $2 million of depreciation and amortization. The profit revision reflects a reduction from previous expectations of approximately $1 million on an annualized basis. DineEquity will operate its remaining company-operated restaurants to primarily test new products, operational improvements, technology, and service platforms.
- Revised Rental and Financing segments are expected to generate approximately $40 million in combined profit. This reflects an increase from previous expectations of between $34 million and $35 million in combined profit.
- Revised expectations for consolidated general and administrative expenses to between $142 million and $144 million, including non-cash stock-based compensation expense and depreciation of approximately $16 million.
- Revised expectations for consolidated interest expense to be approximately $101 million. Approximately $6 million is expected to be non-cash interest expense.
- Reiterated the income tax rate to be approximately 38%.
- Revised consolidated cash from operations is expected to range between $102 million and $116 million. This reflects an increase from previous expectations of between $88 million and $102 million. The increase is primarily due to improvements in net income and net working capital.
- Reiterated the structural run-off of the Company’s long-term receivables is expected to be approximately $14 million.
- Reiterated the principal payments on capital leases and financing obligations will be approximately $10 million.
- Revised consolidated capital expenditures are expected to be approximately $7 million. This reflects a reduction from expectations of capital expenditures between $8 million and $10 million.
- Reiterated a mandatory annual repayment of 1% on the current outstanding Term Loan principal balance will be $4.7 million.
- Revised consolidated free cash flow (see "Non-GAAP Measures" below) to range between $93 million and $108 million. This reflects an increase from previous expectations of $77 to $93 million. Consolidated free cash flow is defined as consolidated cash from operations, plus principal receipts from long-term receivables, less principal payments on capital leases and financing obligations, consolidated capital expenditures, and the mandatory annual repayment of 1% on our Term Loan principal balance.
- Reiterated net income allocated to unvested participating restricted stock is expected to total approximately $1.5 million.
- Revised weighted average diluted shares outstanding are expected to be approximately 19.1 million. This reflects an increase from the prior year primarily due to the fourth quarter 2012 conversion of the Series B Convertible Preferred Stock into the Company's common stock. No estimate is made in this number for any potential share repurchases.
- Adjusted earnings per diluted share for fiscal 2013 are expected to be between $4.14 and $4.24.
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 3,600 restaurants combined in 19 countries, over 400 franchisees and approximately 200,000 team members (including franchisee- and company-operated restaurant employees), DineEquity is one of the largest full-service restaurant companies in the world.
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," "free cash flow," and "segment EBITDA." "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 closure and impairment charges, any gain or loss related to debt extinguishment, any intangible asset amortization, any non-cash interest expense, any debt modification costs, any one-time litigation settlement charges, any general and administrative restructuring costs, net of savings, any gain or loss related to the disposition of assets, and any state income tax impact of deferred taxes due to refranchising 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 less interest expense, loss on extinguishment of debt, depreciation and amortization, closure and impairment charges, non-cash stock-based compensation, gain/loss on disposition of assets and other charge backs as defined by its credit agreement. "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 principal payments on capital lease and financing obligations, the mandatory 1% of Term Loan principal balance repayment, and capital expenditures. "Segment EBITDA" for a given period is defined as gross segment profit plus depreciation and amortization as well as interest charges related to the segment. 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 receivables, and the funding of operating activities, capital expenditures and 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, free cash flow and segment EBITDA 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 United States generally accepted accounting principles.
| DineEquity, Inc. and Subsidiaries | ||||||||||||||||||||
| Consolidated Statements of Income | ||||||||||||||||||||
| (In thousands, except per share amounts) | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||||
| Segment Revenues: | ||||||||||||||||||||
| Franchise and restaurant revenues | $ | 127,137 | $ | 182,246 | $ | 379,619 | $ | 587,801 | ||||||||||||
| Rental revenues | 30,990 | 30,920 | 92,724 | 92,096 | ||||||||||||||||
| Financing revenues | 3,156 | 3,152 | 10,223 | 11,394 | ||||||||||||||||
| Total segment revenues | 161,283 | 216,318 | 482,566 | 691,291 | ||||||||||||||||
| Segment Expenses: | ||||||||||||||||||||
| Franchise and restaurant expenses | 44,091 | 95,689 | 130,875 | 313,424 | ||||||||||||||||
| Rental expenses | 24,149 | 24,237 | 72,953 | 73,075 | ||||||||||||||||
| Financing expenses | — | 15 | 245 | 1,586 | ||||||||||||||||
| Total segment expenses | 68,240 | 119,941 | 204,073 | 388,085 | ||||||||||||||||
| Gross segment profit | 93,043 | 96,377 | 278,493 | 303,206 | ||||||||||||||||
| General and administrative expenses | 35,331 | 48,737 | 105,004 | 125,608 | ||||||||||||||||
| Interest expense | 24,979 | 28,896 | 75,230 | 88,767 | ||||||||||||||||
| Amortization of intangible assets | 3,072 | 3,072 | 9,212 | 9,222 | ||||||||||||||||
| Closure and impairment charges | (392 | ) | 420 | 770 | 1,264 | |||||||||||||||
| Loss on extinguishment of debt | — | 2,306 | 36 | 4,917 | ||||||||||||||||
| Debt modification costs | — | — | 1,296 | — | ||||||||||||||||
| Gain on disposition of assets | (72 | ) | (73,650 | ) | (326 | ) | (89,642 | ) | ||||||||||||
| Income before income taxes | 30,125 | 86,596 | 87,271 | 163,070 | ||||||||||||||||
| Income tax provision | (11,395 | ) | (26,023 | ) | (33,365 | ) | (54,215 | ) | ||||||||||||
| Net income | $ | 18,730 | $ | 60,573 | $ | 53,906 | $ | 108,855 | ||||||||||||
| Net income available to common stockholders: | ||||||||||||||||||||
| Net income | $ | 18,730 | $ | 60,573 | $ | 53,906 | $ | 108,855 | ||||||||||||
| Less: Net income allocated to unvested participating restricted stock | (296 | ) | (1,187 | ) | (925 | ) | (2,477 | ) | ||||||||||||
| Less: Accretion of Series B Convertible Preferred Stock | — | (688 | ) | — | (2,033 | ) | ||||||||||||||
| Net income available to common stockholders | $ | 18,434 | $ | 58,698 | $ | 52,981 | $ | 104,345 | ||||||||||||
| Net income available to common stockholders per share: | ||||||||||||||||||||
| Basic | $ | 0.98 | $ | 3.26 | $ | 2.80 | $ | 5.84 | ||||||||||||
| Diluted | $ | 0.97 | $ | 3.14 | $ | 2.76 | $ | 5.66 | ||||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||
| Basic | 18,831 | 18,006 | 18,898 | 17,859 | ||||||||||||||||
| Diluted | 19,085 | 18,924 | 19,166 | 18,801 | ||||||||||||||||
| Dividends declared per common share | $ | 0.75 | $ | — | $ | 2.25 | $ | — | ||||||||||||
| Dividends paid per common share | $ | 0.75 | $ | — | $ | 2.25 | $ | — | ||||||||||||
| DineEquity, Inc. and Subsidiaries | ||||||||||||
| Consolidated Balance Sheets | ||||||||||||
| (In thousands, except share and per share amounts) | ||||||||||||
September 30, | December 31, | |||||||||||
| (Unaudited) | ||||||||||||
| Assets | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 95,535 | $ | 64,537 | ||||||||
| Receivables, net | 87,276 | 128,610 | ||||||||||
| Prepaid income taxes | 3,619 | 16,080 | ||||||||||
| Prepaid gift cards | 42,840 | 50,242 | ||||||||||
| Deferred income taxes | 24,811 | 21,772 | ||||||||||
| Other current assets | 7,683 | 13,214 | ||||||||||
| Total current assets | 261,764 | 294,455 | ||||||||||
| Long-term receivables | 201,080 | 212,269 | ||||||||||
| Property and equipment, net | 281,432 | 294,375 | ||||||||||
| Goodwill | 697,470 | 697,470 | ||||||||||
| Other intangible assets, net | 797,061 | 806,093 | ||||||||||
| Other assets, net | 108,909 | 110,738 | ||||||||||
| Total assets | $ | 2,347,716 | $ | 2,415,400 | ||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||
| Current liabilities: | ||||||||||||
| Current maturities of long-term debt | $ | 4,720 | $ | 7,420 | ||||||||
| Accounts payable | 33,339 | 30,751 | ||||||||||
| Gift card liability | 93,198 | 161,689 | ||||||||||
| Accrued employee compensation and benefits | 18,063 | 22,435 | ||||||||||
| Accrued interest payable | 35,825 | 13,236 | ||||||||||
| Current maturities of capital lease and financing obligations | 11,974 | 10,878 | ||||||||||
| Other accrued expenses | 20,201 | 21,351 | ||||||||||
| Total current liabilities | 217,320 | 267,760 | ||||||||||
| Long-term debt, less current maturities | 1,204,998 | 1,202,063 | ||||||||||
| Capital lease obligations, less current maturities | 115,351 | 124,375 | ||||||||||
| Financing obligations, less current maturities | 51,930 | 52,049 | ||||||||||
| Deferred income taxes | 349,202 | 362,171 | ||||||||||
| Other liabilities | 98,919 | 98,177 | ||||||||||
| Total liabilities | 2,037,720 | 2,106,595 | ||||||||||
| Commitments and contingencies | ||||||||||||
| Stockholders’ equity: | ||||||||||||
| Common stock, $0.01 par value, shares: 40,000,000 authorized; September 30, 2013 - 25,308,295 issued, 19,029,164 outstanding; December 31, 2012 - 25,362,946 issued, 19,197,899 outstanding | 253 | 254 | ||||||||||
| Additional paid-in-capital | 270,799 | 264,342 | ||||||||||
| Retained earnings | 332,740 | 322,045 | ||||||||||
| Accumulated other comprehensive loss | (157 | ) | (152 | ) | ||||||||
| Treasury stock, at cost; shares: September 30, 2013 - 6,279,131; December 31, 2012 - 6,165,047 | (293,639 | ) | (277,684 | ) | ||||||||
| Total stockholders’ equity | 309,996 | 308,805 | ||||||||||
| Total liabilities and stockholders’ equity | $ | 2,347,716 | $ | 2,415,400 | ||||||||
| DineEquity, Inc. and Subsidiaries | ||||||||||||
| Consolidated Statements of Cash Flows | ||||||||||||
| (In thousands) | ||||||||||||
| (Unaudited) | ||||||||||||
| Nine Months Ended | ||||||||||||
| September 30, | ||||||||||||
| 2013 | 2012 | |||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net income | $ | 53,906 | $ | 108,855 | ||||||||
| Adjustments to reconcile net income to cash flows provided by operating activities: | ||||||||||||
| Depreciation and amortization | 26,516 | 30,756 | ||||||||||
| Non-cash interest expense | 4,635 | 4,547 | ||||||||||
| Loss on extinguishment of debt | 36 | 4,917 | ||||||||||
| Closure and impairment charges | 1,166 | 991 | ||||||||||
| Deferred income taxes | (16,007 | ) | (20,361 | ) | ||||||||
| Non-cash stock-based compensation expense | 7,081 | 8,799 | ||||||||||
| Tax benefit from stock-based compensation | 3,001 | 6,334 | ||||||||||
| Excess tax benefit from share-based compensation | (1,985 | ) | (4,757 | ) | ||||||||
| Gain on disposition of assets | (326 | ) | (89,642 | ) | ||||||||
| Other | 791 | (1,768 | ) | |||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Receivables | 41,698 | 41,422 | ||||||||||
| Current income tax receivables and payables | 7,232 | 12,512 | ||||||||||
| Other current assets | 16,054 | 7,414 | ||||||||||
| Accounts payable | 2,650 | 2,080 | ||||||||||
| Accrued employee compensation and benefits | (4,372 | ) | (6,490 | ) | ||||||||
| Gift card liability | (68,493 | ) | (62,841 | ) | ||||||||
| Other accrued expenses | 29,231 | 25,298 | ||||||||||
| Cash flows provided by operating activities | 102,814 | 68,066 | ||||||||||
| Cash flows from investing activities: | ||||||||||||
| Additions to property and equipment | (4,547 | ) | (13,477 | ) | ||||||||
| Proceeds from sale of property and equipment and assets held for sale | — | 137,449 | ||||||||||
| Principal receipts from notes, equipment contracts and other long-term receivables | 10,254 | 10,276 | ||||||||||
| Other | 282 | 964 | ||||||||||
| Cash flows provided by investing activities | 5,989 | 135,212 | ||||||||||
| Cash flows from financing activities: | ||||||||||||
| Borrowings under revolving credit facilities | — | 50,000 | ||||||||||
| Repayments under revolving credit facilities | — | (50,000 | ) | |||||||||
| Repayment of long-term debt (including premiums) | (2,400 | ) | (184,237 | ) | ||||||||
| Payment of debt modification costs | (1,296 | ) | — | |||||||||
| Principal payments on capital lease and financing obligations | (7,515 | ) | (8,246 | ) | ||||||||
| Repurchase of DineEquity common stock | (24,663 | ) | — | |||||||||
| Dividends paid on common stock | (43,170 | ) | — | |||||||||
| Repurchase of restricted stock | (3,209 | ) | (1,690 | ) | ||||||||
| Proceeds from stock options exercised | 5,585 | 5,443 | ||||||||||
| Excess tax benefit from share-based compensation | 1,985 | 4,757 | ||||||||||
| Change in restricted cash | (3,122 | ) | (8,158 | ) | ||||||||
| Cash flows used in financing activities | (77,805 | ) | (192,131 | ) | ||||||||
| Net change in cash and cash equivalents | 30,998 | 11,147 | ||||||||||
| Cash and cash equivalents at beginning of period | 64,537 | 60,691 | ||||||||||
| Cash and cash equivalents at end of period | $ | 95,535 | $ | 71,838 | ||||||||
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 closure and impairment charges; loss on extinguishment of debt; amortization of intangible assets; non-cash interest expense; debt modification costs; a one-time litigation settlement; general and administrative ("G&A") restructuring costs, net of savings; gain/loss on disposition of assets; and the state income tax impact of deferred taxes due to refranchising, all items net of taxes (as appropriate), and related per share data: | ||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||||
| Net income available to common stockholders, as reported | $ | 18,434 | $ | 58,698 | $ | 52,981 | $ | 104,345 | ||||||||||||
| Closure and impairment charges | (392 | ) | 420 | 770 | 1,264 | |||||||||||||||
| Loss on extinguishment of debt | — | 2,306 | 36 | 4,917 | ||||||||||||||||
| Amortization of intangible assets | 3,072 | 3,072 | 9,212 | 9,222 | ||||||||||||||||
| Non-cash interest expense | 1,581 | 1,502 | 4,635 | 4,547 | ||||||||||||||||
| Debt modification costs | — | — | 1,296 | — | ||||||||||||||||
| Litigation settlement | — | 9,047 | — | 9,047 | ||||||||||||||||
| G&A restructuring costs, net of savings | — | 1,269 | — | 1,269 | ||||||||||||||||
| Gain on disposition of assets | (72 | ) | (73,650 | ) | (326 | ) | (89,642 | ) | ||||||||||||
| Income tax (benefit) provision | (1,592 | ) | 21,652 | (5,937 | ) | 22,943 | ||||||||||||||
| State income tax impact on deferred taxes due to refranchising | — | (6,258 | ) | — | (6,258 | ) | ||||||||||||||
| Net income allocated to unvested participating restricted stock | (45 | ) | 806 | (181 | ) | 990 | ||||||||||||||
| Net income available to common stockholders, as adjusted | $ | 20,986 | $ | 18,864 | $ | 62,486 | $ | 62,644 | ||||||||||||
| Diluted net income available to common stockholders per share: | ||||||||||||||||||||
| Net income available to common stockholders, as reported | $ | 0.97 | $ | 3.14 | $ | 2.76 | $ | 5.66 | ||||||||||||
| Closure and impairment charges | (0.01 | ) | 0.01 | 0.02 | 0.04 | |||||||||||||||
| Loss on extinguishment of debt | — | 0.07 | 0.00 | 0.16 | ||||||||||||||||
| Amortization of intangible assets | 0.10 | 0.10 | 0.30 | 0.30 | ||||||||||||||||
| Noncash interest expense | 0.05 | 0.05 | 0.15 | 0.15 | ||||||||||||||||
| Debt modification costs | — | — | 0.04 | — | ||||||||||||||||
| Litigation settlement | — | 0.29 | — | 0.30 | ||||||||||||||||
| G&A restructuring costs, net of savings | — | 0.04 | — | 0.04 | ||||||||||||||||
| Gain on disposition of assets | (0.00 | ) | (2.39 | ) | (0.01 | ) | (2.93 | ) | ||||||||||||
| State income tax impact on deferred taxes due to refranchising | — | (0.33 | ) | — | (0.33 | ) | ||||||||||||||
| Net income allocated to unvested participating restricted stock | (0.00 | ) | 0.04 | (0.01 | ) | 0.05 | ||||||||||||||
| Rounding | (0.01 | ) | 0.01 | 0.01 | — | |||||||||||||||
| Diluted net income available to common stockholders per share, as adjusted | $ | 1.10 | $ | 1.03 | $ | 3.26 | $ | 3.44 | ||||||||||||
| Numerator for basic EPS-income available to common stockholders, as adjusted | $ | 20,986 | $ | 18,864 | $ | 62,486 | $ | 62,644 | ||||||||||||
| Effect of unvested participating restricted stock using the two-class method | 1 | 18 | 5 | 73 | ||||||||||||||||
| Effect of dilutive securities: | ||||||||||||||||||||
| Convertible Series B preferred stock | — | 688 | — | 2,033 | ||||||||||||||||
| Numerator for diluted EPS-income available to common stockholders after assumed conversions, as adjusted | $ | 20,987 | $ | 19,570 | $ | 62,491 | $ | 64,750 | ||||||||||||
| Denominator for basic EPS-weighted-average shares | 18,831 | 18,006 | 18,898 | 17,859 | ||||||||||||||||
| Effect of dilutive securities: | ||||||||||||||||||||
| Stock options | 254 | 246 | 268 | 270 | ||||||||||||||||
| Convertible Series B preferred stock | — | 672 | — | 672 | ||||||||||||||||
| Denominator for diluted EPS-weighted-average shares and assumed conversions | 19,085 | 18,924 | 19,166 | 18,801 | ||||||||||||||||
| DineEquity, Inc. and Subsidiaries | ||||||||||||
| Non-GAAP Financial Measures | ||||||||||||
| (In thousands) | ||||||||||||
| (Unaudited) | ||||||||||||
Reconciliation of U.S. GAAP income before income taxes to EBITDA: | ||||||||||||
Nine Months | Twelve Months | |||||||||||
| September 30, 2013 | ||||||||||||
| U.S. GAAP income before income taxes | $ | 87,271 | $ | 119,124 | ||||||||
| Interest charges | 87,545 | 117,440 | ||||||||||
| Loss on extinguishment of debt | 36 | 673 | ||||||||||
| Depreciation and amortization | 26,516 | 35,298 | ||||||||||
| Non-cash stock-based compensation | 7,081 | 9,724 | ||||||||||
| Closure and impairment charges | 770 | 3,724 | ||||||||||
| Other | 3,017 | 13,163 | ||||||||||
| Gain on sale of assets | (326 | ) | (13,281 | ) | ||||||||
| EBITDA | $ | 211,910 | $ | 285,865 | ||||||||
Reconciliation of the Company's cash provided by operating activities to "free cash flow" (cash from operations, plus receipts from notes, equipment contracts and other long-term receivables, less consolidated capital expenditures, principal payments on capital leases and financing obligations and the mandatory annual repayment of 1% of our Term Loan principal balance):
| Nine Months Ended | |||||||||||
| September 30, | ||||||||||||
| 2013 | 2012 | |||||||||||
| Cash flows provided by operating activities | $ | 102,814 | $ | 68,066 | ||||||||
| Principal receipts from long-term receivables | 10,
| |||||||||||
