IHOP 2008 Annual Report Download - page 76

The Company has paid regular quarterly dividends of $0.25 per common share since May 2003. A
quarterly cash dividend of $0.25 per common share was paid on November 18, 2008, which was the
fourth dividend payment of 2008. In December 2008, the Board of Directors suspended the payment of
the quarterly cash dividend to common stockholders for the foreseeable future as part of actions the
Company is taking to maximize its financial flexibility. Future dividend declarations on the common
shares may be made at the discretion of the Board of Directors after consideration of the Company’s
earnings, financial condition, cash requirements, future prospects and other factors.
Off-Balance Sheet Arrangements
As of December 31, 2008, we had no off-balance sheet arrangements, as defined in Item 303(a)(4)
of SEC Regulation S-K.
Contractual Obligations and Commitments
The following are our significant contractual obligations and commitments as of December 31,
2008:
Payments Due By Period
More than
Contractual Obligations 1 Year 2-3 Years 4-5 Years 5 Years Total
(in thousands)
Debt ........................... $ 15,000 $ 50,400 $1,398,447 $ 435,000 $1,898,847
Financing obligation ................ 31,125 63,238 63,732 445,402 603,497
Operating leases ................... 88,376 172,322 170,774 1,228,871 1,660,343
Capital leases ..................... 24,731 49,904 49,568 192,789 316,992
Purchase commitments .............. 168,639 36,357 — — 204,996
Other obligations .................. 524 893 — — 1,417
Total minimum payments ............ 328,395 373,114 1,682,521 2,302,062 4,686,092
Less interest ...................... (41,164) (77,593) (70,665) (236,682) (426,104)
$287,231 $295,521 $1,611,856 $2,065,380 $4,259,988
As discussed in Note 20 of the Notes to the Consolidated Financial Statements, effective
January 1, 2007, we adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty
in Income Taxes—an interpretation of FASB Statement No. 109. At December 31, 2008, we had a reserve
for unrecognized tax benefit including potential interest and penalties, net of related tax benefit,
totaling $23.5 million, of which approximately $1.7 million is expected to be paid within one year. For
the remaining liability, due to the uncertainties related to these tax matters, we are unable to make a
reasonably reliable estimate when cash settlement with a taxing authority will occur.
Critical Accounting Policies and Estimates
The preparation of financial statements in accordance with U.S. generally accepted accounting
principles requires us to make estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements and the reported amounts of net revenues and
expenses in the reporting period. We base our estimates and assumptions on current facts, historical
experience and various other factors that we believe to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values of assets and liabilities
and the accrual of costs and expenses that are not readily apparent from other sources. Accounting
assumptions and estimates are inherently uncertain and actual results may differ materially from our
estimates.
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