IHOP 2008 Annual Report Download - page 75

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Investing Activities
Net cash provided by investing activities in 2008 was primarily attributable to $61.1 in proceeds
from dispositions of assets, principally the franchising of Applebee’s company-operated restaurants and
$15.8 million in principal receipts from notes and equipment contracts receivable. These inflows were
partially offset by $31.8 million in capital expenditures, of which $25.4 million related to Applebee’s,
consisting of $11.0 million related to company-operated restaurants and $14.4 million related to
corporate activities, primarily Applebee’s restaurant support center in Lenexa, Kansas. Capital
expenditures are expected to decline in 2009 as we do not currently plan to develop any company-
operated Applebee’s restaurants and the support center was completed in 2008.
The following table represents the principal receipts on various receivables due from our
franchisees as of December 31, 2008:
Principal Receipts Due By Period
2009 2010 2011 2012 2013 Thereafter Total
(In thousands)
Equipment leases(1) ................... $7,022 $ 7,044 $ 6,999 $ 6,962 $ 7,308 $118,225 $153,560
Direct financing leases(2) ................ 3,497 4,081 4,769 5,625 6,606 90,939 115,517
Franchise notes and other(3) ............. 7,196 6,013 3,906 3,153 1,730 3,744 25,742
Total ............................. $17,715 $17,138 $15,674 $15,740 $15,644 $212,908 $294,819
(1) Equipment lease receivables extend through the year 2029.
(2) Direct financing lease receivables extend through the year 2024.
(3) Franchise note receivables extend through the year 2027.
Financing Activities
Net cash used by financing activities in 2008 was primarily attributable to the repayment of
long-term debt, capital lease and financing obligations totaling $431.2 million, the payment of
$48.9 million of debt issuance costs and $33.4 million in dividend payments, which were comprised of
$17.4 million of dividends on common stock and $16.0 million of dividends on Series A Preferred
Stock. These outflows were partially offset by proceeds from financing obligations of $370.5 million, the
$35.0 million borrowing against the Lehman Facility discussed above, and the release of $49.2 million
of restricted cash. Effective December 11, 2008, the Company has suspended payments of dividends to
common shareholders for the foreseeable future.
Net cash used in financing activities in 2007 and 2006 was primarily attributable to stock
repurchases, dividend payments, repayment of long-term debt and principal payments on capital lease
obligations, partially offset by stock option exercises.
Share Repurchases and Dividends
In January 2003, our Board of Directors authorized a program to repurchase shares of the
Company’s common stock. As of December 31, 2007, the Board approved the repurchase of up to
7.2 million shares of common stock. During 2007, the Company repurchased approximately 1.3 million
shares of its common stock for $77.0 million. The Company has repurchased 6.3 million shares of its
common stock since the inception of the program at a total cost of $280.0 million. The Company did
not repurchase shares in 2008. In February 2009, the Board of Directors cancelled the authorization to
repurchase any additional shares under this program.
We had accrued $4.75 million as dividends for the Series A Perpetual Preferred Stock as of
December 31, 2008. The dividends were paid in January 2009.
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