IHOP 2011 Annual Report Download - page 99

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DineEquity, Inc. and Subsidiaries
Notes to the Consolidated Financial Statements (Continued)
8. Debt (Continued)
81
Maturities of Long-term Debt
At December 31, 2011, the aggregate amounts of existing long-term debt maturing in each of the next five years and
thereafter are as follows:
2012
2013
2014
2015
2016
Thereafter
(In millions)
$ 7.4
7.4
7.4
7.4
7.4
1,381.8
$ 1,418.8
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. 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 over their remaining useful lives. The net proceeds received have been recorded as a financing obligation. A portion
of the lease payments is recorded as a decrease to the financing obligation and a portion is recognized as interest expense. In the
event the lease obligation of any individual property or group of properties is assumed by a qualified franchisee the Company's
continuing involvement will cease. At that time, that portion of the transaction related to that property or group of properties is
expected to be recorded as a sale in accordance with U.S. GAAP and the net book value of those properties will be removed from
the Company's books, along with a ratable portion of the remaining financing obligation.
As of December 31, 2011, the Company's continuing involvement with 80 of the 181 Properties ended by assignment of the
lease obligation to a qualified franchisee or a release from the lessor. In accordance with the accounting described above, the
transactions related to these properties have been recorded as a sale with property and equipment and financing obligations each
reduced by $149.8 million.
In July 2008, the Company entered into a sale-leaseback transaction with respect to its support center in Lenexa, Kansas.
In connection with this transaction, the Company received approximately $39 million in proceeds. The initial term of the leaseback
agreement is 15 years. As the Company had continuing involvement in the form of future subleasing of a substantial portion of
the support center, the transaction was recorded under the financing method as described above. The Company entered into an
agreement to terminate its sublease of the support center effective October 31, 2011, with no remaining continuing involvement.
Accordingly, property and equipment and financing obligations were each reduced by $34.0 million.