IHOP 2009 Annual Report Download - page 99

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DineEquity, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements
1. The Company
The Company was incorporated under the laws of the State of Delaware in 1976 with the name
IHOP Corp. Effective June 2, 2008, the name of the Company was changed to DineEquity, Inc.
(‘‘DineEquity’’). The Company owns and operates two restaurant concepts: Applebee’s Neighborhood
Grill and Bar, or Applebee’s, in the bar and grill segment of the casual dining category of the
restaurant industry, and International House of Pancakes, or IHOP, in the family dining category of
the restaurant industry. The first International House of Pancakes restaurant opened in 1958 in Toluca
Lake, California. Shortly thereafter the Company’s predecessor began developing and franchising
additional restaurants. As of December 31, 2009, there were a total of 1,456 IHOP restaurants of which
1,279 were subject to franchise agreements, 164 were subject to area license agreements and 13 were
company-operated restaurants. IHOP restaurants are located in all 50 states of the United States, two
U.S. territories and in Canada and Mexico.
In November 2007, the Company completed the acquisition of Applebee’s International, Inc.
(‘‘Applebee’s’’), which became a wholly owned subsidiary of the Company. As of December 31, 2009,
there were a total of 2,008 Applebee’s restaurants, of which 1,609 were subject to franchise agreements
and 399 were company-operated restaurants. The restaurants were located in 49 states, 16 countries
outside of the United States and one U.S. territory.
References herein to Applebee’s and IHOP restaurants are to these two restaurant concepts,
whether operated by franchisees, area licensees or the Company. Retail sales at restaurants that are
owned by franchisees and area licensees are not attributable to the Company.
2. Basis of Presentation and Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of DineEquity, Inc. and its wholly
owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
However, the subsidiaries have not guaranteed the obligations of the Company, and the assets of the
subsidiaries generally are not available to pay creditors of the Company. Also, the Company has not
guaranteed the obligations of the subsidiaries, and the assets of the Company generally are not
available to pay creditors of the subsidiaries.
Fiscal Periods
The Company has a 52/53 week fiscal year that ends on the Sunday nearest to December 31 of
each year. For convenience, the Company refers to all fiscal years as ending on December 31 and fiscal
quarters as ending on March 31, June 30 and September 30. The 2009, 2008 and 2007 fiscal years
presented herein ended January 3, 2010, December 28, 2008 and December 30, 2007, respectively. The
2009 fiscal year contained 53 weeks while the 2008 and 2007 fiscal years each contained 52 weeks.
Reclassifications
Certain reclassifications have been made to prior year information to conform to the fiscal 2009
presentation. The reclassifications did not have a material impact on the 2008 and 2007 consolidated
financial statements.
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