IHOP 2008 Annual Report Download - page 113
Download and view the complete annual report
Please find page 113 of the 2008 IHOP annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1 -
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
11
-
12
-
13
-
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53
-
54
-
55
-
56
-
57
-
58
-
59
-
60
-
61
-
62
-
63
-
64
-
65
-
66
-
67
-
68
-
69
-
70
-
71
-
72
-
73
-
74
-
75
-
76
-
77
-
78
-
79
-
80
-
81
-
82
-
83
-
84
-
85
-
86
-
87
-
88
-
89
-
90
-
91
-
92
-
93
-
94
-
95
-
96
-
97
-
98
-
99
-
100
-
101
-
102
-
103 -
104 -
105 -
106 -
107 -
108 -
109 -
110 -
111 -
112 -
113 -
114 -
115 -
116 -
117 -
118 -
119 -
120 -
121 -
122 -
123 -
124
-
125
-
126
-
127
-
128
-
129
-
130
-
131
-
132
-
133
-
134
-
135
-
136
-
137
-
138
-
139
-
140
-
141
-
142
-
143
-
144
-
145
-
146
-
147
-
148
-
149
-
150
-
151
-
152
-
153
-
154
-
155
-
156
-
157
-
158
-
159
-
160
-
161
-
162
 |
 |
DineEquity, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
8. Goodwill and Other Intangible Assets (Continued)
The Company did not have any intangible assets prior to the November 29, 2007 acquisition of
Applebee’s. As of December 31, 2008, intangible assets arising from the Applebee’s acquisition are as
follows:
Not Subject to
Amortization Subject to Amortization
Liquor Franchising Recipes and
Tradename Licenses Rights Menus Leaseholds Total
Balance, December 31, 2006 .... $ — $ — $ — $ — $ — $ —
Acquisition of business ........ 790,000 6,374 200,485 15,730 — 1,012,589
Amortization expense ......... — — (981) (151) — (1,132)
Balance, December 31, 2007 .... 790,000 6,374 199,504 15,579 — 1,011,457
Additions ................. — — — — 7,276 7,276
Purchase price adjustments ..... — (1,695) — — 376 (1,319)
Amortization expense ......... — — (10,027) (2,106) (1,652) (13,785)
Impairment ................ (44,064) — — — — (44,064)
Refranchising .............. — (1,757) — — (1,772) (3,529)
Balance, December 31, 2008 .... $745,936 $ 2,922 $189,477 $13,473 $ 4,228 $ 956,036
Annual amortization expense for next five fiscal years is estimated to be approximately
$13.1 million annually. The weighted average life of the intangible assets subject to amortization is 18.7
and 19.3 years at December 31, 2008 and 2007, respectively.
Gross and net carrying amounts of intangible assets subject to amortization at December 31, 2008
and 2007 are as follows:
December 31, 2008 December 31, 2007
Accumulated Accumulated
Gross Amortization Net Gross Amortization Net
(In thousands)
Franchising rights ......... $200,485 $(11,008) $189,477 $200,485 $ (981) $199,504
Recipes and menus ........ 15,730 (2,257) 13,473 15,730 (151) 15,579
Leaseholds .............. 5,880 (1,652) 4,228 — — —
Total .................... $222,095 $(14,917) $207,178 $216,215 $(1,132) $215,083
9. Captive Insurance Subsidiary
In connection with the acquisition of Applebee’s, the Company acquired Neighborhood
Insurance, Inc., a Vermont corporation and a wholly-owned captive insurance subsidiary of Applebee’s,
which provides Applebee’s and qualified Applebee’s franchisees with workers’ compensation and
general liability insurance. The captive insurance subsidiary ceased writing insurance prior to the
acquisition. Cost of other franchise income includes costs related to the resolution of claims arising
from franchisee participation in the captive insurance program. The Company’s consolidated balance
99