IHOP 2010 Annual Report Download - page 119

DineEquity, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
8. Debt (Continued)
the Trustee if the notice is given by the holders of the Notes), may, and the Trustee at the written
request of the holders of at least 25% in aggregate principal amount of the Notes then outstanding
shall, declare the principal of and accrued interest on the Notes to be immediately due and payable.
Registration Rights Agreement for 9.5% Senior Notes due 2018
On the Closing Date, in connection with the issuance of the Notes, the Company entered into a
Registration Rights Agreement (the ‘‘Registration Rights Agreement’’), by and among the Company,
the Guarantors and Barclays Capital Inc. and Goldman, Sachs & Co., as representatives of the initial
purchasers of the Notes.
Pursuant to the Registration Rights Agreement, the Company and the Guarantors agreed to
register with the SEC, exchange notes (the ‘‘Exchange Notes’’), having substantially identical terms as
the Notes, as part of an offer to exchange freely tradable Exchange Notes for the Notes. Pursuant to
the Registration Rights Agreement, the Company and the Guarantors agreed to use their commercially
reasonable efforts to file an exchange offer registration statement with the SEC within 210 days from
October 19, 2010, and to use their commercially reasonable efforts to cause it to become or be
declared effective by the SEC no later than 270 days after October 19, 2010. The Company and the
Guarantors also agreed to use their commercially reasonable efforts to file a shelf registration
statement with the SEC for the resale of the Notes if they cannot complete an exchange offer within
the time periods listed in the preceding sentence and in certain other circumstances as set forth in the
Registration Rights Agreement. The Company and the Guarantors may be required to pay liquidated
damages if they fail to timely comply with the registration and exchange requirements set forth in the
Registration Rights Agreement.
Deferred Financing Costs
In connection with the Credit Agreement and the issuance of the Notes, the Company recorded
approximately $28.2 million of deferred financing costs. These deferred financing costs were amortized
using the effective interest method over the estimated life of the related debt. Amortization of the
deferred financing costs associated with the Credit Agreement and the issuance of the Notes included
in interest expense for the year ended December 31, 2010, was $0.6 million. Approximately $0.8 million
of deferred issuance costs were included in the determination of loss on early retirement of Term Loan
debt. As of December 31, 2010, $26.8 million of deferred financing costs was reported as Other Assets
in the consolidated balance sheets.
Discount on Debt
The Company recorded a discount on debt from the October 2010 Refinancing of $29.6 million.
The discount on debt reflects the difference between the proceeds received from the issuance of the
debt and the face amount to be repaid over the life of the debt. The discount will be amortized as
additional interest expense over the weighted average estimated life of the debt under the effective
interest method. For the year ended December 31, 2010, $0.6 million of the discount was amortized as
additional interest expense under the effective interest method and an additional $0.5 million was
written off in connection with debt retirement and is reflected in the loss on extinguishment of debt
and temporary equity in the consolidated statement of operations.
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