IHOP 2010 Annual Report Download - page 5

designed to keep the brand relevant and foster a real, genuine
connection with our guests. Whether through unique limited-
time offers that leverage IHOP’s core breakfast equities, menu
innovations like the new “Simple & Fit” offerings or expanding
awareness around dinner through programs like “Kids Eat
Free,” we are focused on initiatives that respond to guest
needs and promote IHOP as a favorite destination in family
dining. Franchisees are embracing our next generation
remodel and updating their restaurants in line with our
expectations, while they also continue to open approximately
60 new IHOP restaurants each year. Beyond traditional
restaurant development, IHOP also has made strides with
brand extension activities, particularly around strengthening
our third-party gift card distribution partnership. It is a simple
and effective way to extend the IHOP brand and enhance
consumer awareness that supplements in-restaurant gift
card sales. We are also excited about the testing work we are
conducting around smaller format, streamlined menu and
limited service locations that could prove to be another area
of growth for IHOP franchisees over time.
While competitors strayed from their brand positioning
and employed detrimental discounting strategies during
challenging economic times, IHOP’s dedication to brand
building initiatives enabled us to operate from a position of
strength and maintain our number one position in family
dining. As we look ahead, we will continue to look to optimize
IHOP’s strong brand position and take our strategies to the
next level.
Opportunistic, accretive renancing completed
I am also pleased to report that, in October 2010, we successfully
completed a $1.8 billion renancing of the Company.
With this renancing, we addressed our previously complex
capital structure in a holistic manner while opportunistically
taking advantage of favorable conditions in the debt markets.
The primary goal was to eliminate the renancing risk we
would have faced when all of the securitized debt matured in
2012. We also wanted to put in place a new capital structure
with attractive interest rates, extend our maturities on the
debt, and have the ability to reduce debt and leverage from our
free cash ow over time. Our new bank and bond structure
achieves those objectives. In the process, we also minimized
prepayment penalties associated with replacing our securitized
debt structure and redeemed all of our Series A perpetual
preferred stock in an accretive transaction. More recently, in
February 2011, we secured a lower interest rate on our bank
debt through an opportunistic re-pricing transaction.
We now move forward with a more favorable capital structure
that maximizes our nancial exibility and allows us to focus
on executing our growth plans for both the Applebee’s and
IHOP brands.
The DineEquity difference
Looking ahead, we remain committed to executing our strategic
plan for Applebee’s and IHOP. This includes differentiating
the Applebee’s and IHOP brands with exceptional operations,
strategic marketing, innovative menu offerings and impactful
remodel programs. We rmly believe that offering compelling,
differentiated value propositions and promoting occasion-
based appeal are essential to driving trafc and remaining
relevant to our guests. This targeted, strategic and integrated
approach to brand management, along with our highly
franchised business model, clearly differentiates DineEquity
from the competitive set.
Our approach is further amplied by the strength and
support of our franchisees and team members who continue
to awlessly execute our brand strategies system-wide. We
believe our highly franchised model challenges our brands
to perform at a higher level, as it necessitates collaboration
and fosters better brand management and effective decision-
making across the board. Furthermore, DineEquity’s Shared
Services corporate operating structure is an efcient and
effective platform from which to leverage the collective talents
of not only Shared Services, but also Applebee’s and IHOP
management and team members, to ensure our brands
remain number one in their respective categories.
I express my sincere thanks to our team members, franchisees,
purchasing co-operative, vendor partners, Board of Directors,
and to you, our shareholders, for your steadfast support.
Julia A. Stewart
Chairman and Chief Executive Ofcer
DineEquity, Inc.
and to you, our shareholders, for your steadfast support.
DINE EQUITY 2010
ANNUAL REPORT
14 PAGES + COVER
Trim Size:
8.25 x 10.75
Spot colors:
PMS 268
PMS 179
Overall Satin AQ
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