IHOP 2010 Annual Report Download - page 128

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DineEquity, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
8. Debt (Continued)
Retirement of Debt
During the ten-month period prior to the October 2010 Refinancing and the twelve-month period
ended December 31, 2009, the Company recognized the following gains on the early retirement of
debt:
Face Amount
Transaction Date Instrument Retired Cash Paid Gain(1)
(In millions)
March 2010 Class A-2-II-X .............. $ 48.7 $ 43.8 $ 3.5
June 2010 Class A-2-II-X .............. 19.5 18.0 1.1
Total 2010 ................. $ 68.2 $ 61.8 $ 4.6
March 2009 Class A-2-II-X .............. $ 78.4 $ 49.0 $26.4
May 2009 Class A-2-II-A .............. 35.2 24.3 9.6
June 2009 Class A-2-II-X .............. 15.6 12.1 2.8
November, 2009 Class A-2-II-X .............. 53.4 46.5 5.3
December, 2009 Class A-2-II-X .............. 17.0 15.0 1.6
Total 2009 ................. $199.6 $146.9 $45.7
(1) After write-off of the discount and deferred financing costs related to the debt retired.
Scheduled monthly payments on the Series 2007-1 Class M-1 Fixed Rate Term Subordinated Notes
due December 2037 totaled $15.1 million during the ten-month period prior to the October 2010
Refinancing and $15.0 million during the twelve-month period ended December 31, 2009.
During fiscal 2009, the Company received proceeds from disposition of assets and release of
certain reserve funds totaling $11.8 million. As required by the terms of the Applebee’s securitization
agreements (discussed below), these funds were used to retire Series 2007-1 Class A-2-II-X Fixed Rate
Term Senior Notes and Series 2007-1 Class A-2-II-A Fixed Rate Term Senior Notes at face values of
$5.5 million and $6.3 million, respectively.
9. Financing Obligations
On May 19, 2008, the Company entered into a Purchase and Sale Agreement relating to the sale
and leaseback of 181 parcels of real property (the ‘‘Sale-Leaseback Transaction’’), each of which is
improved with a restaurant operating as an Applebee’s Neighborhood Grill and Bar (the ‘‘Properties’’).
On June 13, 2008, the closing date of the Sale-Leaseback Transaction, the Company entered into a
Master Land and Building Lease (‘‘Master Lease’’) for the Properties. The proceeds received from the
transaction were $337.2 million. The Master Lease calls for an initial term of twenty years and four
five-year options to extend the term.
The Company has an ongoing obligation related to the Properties until such time as the lease
related to each of the Properties is assigned to a qualified franchisee in a transaction meeting certain
parameters set forth in the Master Lease. Due to this continuing involvement, the transaction was
recorded under the financing method in accordance with U.S. GAAP governing sale-leaseback
transactions involving real estate. Accordingly, the value of the land, buildings and improvements will
remain on the Company’s books and the buildings and improvements will continue to be depreciated
112