Total revenues, excluding advertising revenues

Net income

Consolidated adjusted EBITDA⁽¹⁾⁽²⁾

See “Non-GAAP Financial Measures” and reconciliation of the Non-GAAP financial measure to the respective GAAP financial measure.

Does not conform to the definition of Covenant Adjusted EBITDA as found in the Base Indenture.

GAAP earnings per diluted share for the fourth quarter of 2019 increased 8.2% year-over-year to $1.59.

Adjusted earnings per diluted share for the fourth quarter of 2019 increased 4.7% year-over-year to $1.78. (See “Non-GAAP Financial Measures” and reconciliation of GAAP earnings per diluted share to adjusted earnings per diluted share.)

GAAP earnings per diluted share for fiscal 2019 increased 33.9% year-over-year to $5.85.

Adjusted earnings per diluted share for fiscal 2019 increased 29.4% year-over-year to $6.95. (See “Non-GAAP Financial Measures” and reconciliation of GAAP earnings per diluted share to adjusted earnings per diluted share.)

IHOP’s comparable same-restaurant sales increased 1.1% for the fourth quarter of 2019, achieving the eighth consecutive quarter of sales growth.

Applebee’s franchisees completed three transactions in 2019, bringing new and deeply experienced operators into the domestic system.

IHOP’s franchisees completed over 200 remodels in 2019, bringing the total number of domestic restaurants remodeled to approximately 1,100 since the inception of the current program.

IHOP’s reported system-wide sales for the fourth quarter of 2019 increased 2.1% year-over-year to $882.2 million.

General and administrative expenses for the fourth quarter of 2019 declined 7.8% year-over-year to $41.7 million.

Net income for fiscal 2019 increased 29.9% year-over-year to $104.3 million.

Consolidated adjusted EBITDA for fiscal 2019 increased 18.6% to $273.5 million compared to $230.6 million for fiscal 2018. (See “Non-GAAP Financial Measures” and reconciliation of GAAP net income to consolidated adjusted EBITDA.)

Cash flows from operating activities for fiscal 2019 increased 10.6% to $155.2 million compared to $140.3 million for fiscal 2018.

Adjusted free cash flow for fiscal 2019 increased 5.6% to $148.8 million compared to $140.9 million for fiscal 2018. (See “Non-GAAP Financial Measures” and reconciliation of the Company’s cash provided by operating activities to adjusted free cash flow.)

For 2019, the Company repurchased over 1.3 million shares of its common stock for a total cost of $111.7 million and paid quarterly cash dividends totaling $46.9 million.

IHOP’s comparable same-restaurant sales increased 1.1% for the fourth quarter of 2019.

Applebee’s comparable same-restaurant sales decreased 2.5% for the fourth quarter of 2019.

IHOP’s comparable same-restaurant sales increased 1.1% for 2019.

Applebee’s comparable same-restaurant sales decreased 0.7% for 2019.

GAAP net income available to common stockholders was $26.5 million, or earnings per diluted share of $1.59, for the fourth quarter of 2019. This compares to net income available to common stockholders of $26.1 million, or earnings per diluted share of $1.47, for the fourth quarter of 2018. The increase in net income was primarily due to lower general and administrative expenses. These items were partially offset by a decline in gross profit.

Adjusted net income available to common stockholders was $29.7 million, or adjusted earnings per diluted share of $1.78, for the fourth quarter of 2019. This compares to adjusted net income available to common stockholders of $30.3 million, or adjusted earnings per diluted share of $1.70, for the fourth quarter of 2018. The decrease in adjusted net income was primarily due to lower gross profit and a slightly higher income tax rate. These items were partially offset by a decline in general and administrative expenses. The increase in adjusted earnings per diluted share was due to lower general and administrative expenses and fewer weighted average diluted shares outstanding. (See “Non-GAAP Financial Measures” below.)

General and administrative expenses were $41.7 million for the fourth quarter of 2019 compared to $45.3 million for the fourth quarter of 2018. The improvement was mainly due to lower compensation expenses and a decline in professional services costs.

GAAP net income available to common stockholders was $100.8 million, or earnings per diluted share of $5.85, for 2019. This compares to net income available to common stockholders of $77.6 million, or earnings per diluted share of $4.37, for 2018. The increase in net income was primarily due to higher gross profit as the result of $30 million in franchisor contributions to the Applebee’s national advertising fund made in 2018 that did not recur in 2019. This was partially offset by approximately $8.3 million in debt extinguishment costs related to the refinancing of our long-term debt, which was completed on June 5, 2019.

Adjusted net income available to common stockholders was $119.7 million, or adjusted earnings per diluted share of $6.95, for 2019. This compares to adjusted net income available to common stockholders of $95.5 million, or adjusted earnings per diluted share of $5.37 for fiscal 2018. The increase in adjusted net income was primarily due to higher gross profit as the result of $30.0 million in franchisor contributions to the Applebee’s national advertising fund made in 2018 that did not recur in 2019. (See “Non-GAAP Financial Measures” below.)

General and administrative expenses were approximately $162.8 million for 2019 compared to $166.7 million for 2018. The improvement was mainly due to lower compensation expenses and a decline in professional services costs.

Applebee’s domestic system-wide comparable same-restaurant sales performance is expected to range between 0% and positive 2.0%.

IHOP’s domestic system-wide comparable same-restaurant sales performance is expected to range between 0% and positive 2.0%.

Domestic development activity by Applebee’s franchisees is expected to result in net closures between 0 and 10 restaurants.

Domestic development activity by IHOP franchisees and area licensees are expected to result in net new openings between 40 and 50 restaurants.

Total segment profit, excluding the company restaurants segment, is expected to be between approximately $385 million and $395 million.

General and administrative expenses are expected to range between approximately $170 million and $175 million, including non-cash stock-based compensation expense and depreciation totaling approximately $45 million. This projection includes approximately $5 million of general and administrative expenses related to the company restaurants segment.

GAAP net income is expected to range between approximately $105 million and approximately $115 million.

Consolidated adjusted EBITDA is expected to range between approximately $275 million and approximately $285 million. This projection includes company restaurants segment EBITDA, which is expected to be between approximately $9 million and approximately $11 million. (See “Non-GAAP Financial Measures” and reconciliation of GAAP net income to consolidated adjusted EBITDA.)

Capital expenditures are expected to be approximately $17 million, inclusive of approximately $4 million related to the company restaurants segment.

GAAP earnings per diluted share is expected to range from $6.40 to $6.60.

Adjusted earnings per diluted share is expected to range from $7.08 to $7.28. (See “Non-GAAP Financial Measures” and reconciliation of GAAP earnings per diluted share to adjusted earnings per diluted share.)

Net income available to common stockholders per diluted share

Closure and impairment charges

Amortization of intangible assets

Non-cash interest expense

Net income

Interest charges on finance leases

All other interest charges

Income tax provision

Depreciation and amortization

Non-cash stock-based compensation

Impairment and closure charges

Consolidated adjusted EBITDA (Non-GAAP)

Revenues:

Franchise revenues:

Royalties, franchise fees and other

Advertising revenue

Total franchise revenues

Company restaurant sales

Rental revenues

Financing revenues

Total revenues

Cost of revenues:

Franchise expenses:

Advertising expenses

Other franchise expenses

Total franchise expenses

Company restaurant expenses

Rental expenses:

Interest expense from finance leases

Other rental expenses

Total rental expenses

Financing expenses

Total cost of revenues

Gross profit

General and administrative expenses

Interest expense, net

Amortization of intangible assets

Closure and impairment charges

Loss on extinguishment of debt

Debt refinancing costs

(Gain) loss on disposition of assets

Income before income tax provision

Income tax provision

Net income

Net income available to common stockholders:

Net income

Less: Net income allocated to unvested participating restricted stock

Net income available to common stockholders

Net income available to common stockholders per share:

Basic

Diluted

Weighted average shares outstanding:

Basic

Diluted

Dividends declared per common share

Dividends paid per common share

Current assets:

Cash and cash equivalents

Receivables, net

Restricted cash

Prepaid gift card costs

Prepaid income taxes

Other current assets

Total current assets

Other intangible assets, net

Operating lease right-of-use asset

Goodwill

Property and equipment, net

Long-term receivables, net

Deferred rent receivable

Non-current restricted cash

Other non-current assets, net

Total assets

Liabilities and Stockholders’ Deficit

Current liabilities:

Current maturities of long-term debt

Accounts payable

Gift card liability

Current maturities of operating lease obligations

Current maturities of finance lease and financing obligations

Accrued employee compensation and benefits

Dividends payable

Deferred franchise revenue, short-term

Other accrued expenses

Total current liabilities

Long-term debt, less current maturities

Operating lease obligations, less current maturities

Finance lease obligations, less current maturities

Financing obligations, less current maturities

Deferred income taxes, net

Deferred franchise revenue, long-term

Other non-current liabilities

Total liabilities

Commitments and contingencies

Stockholders’ deficit:

Preferred stock, $1 par value, 10,000,000 shares authorized, no shares issued and outstanding

Common stock, $0.01 par value; shares: 40,000,000 authorized; December 31, 2019 - 24,925,447 issued, 16,521,921 outstanding; December 31, 2018 - 24,984,898 issued, 17,644,267 outstanding

Additional paid-in-capital

Retained earnings

Accumulated other comprehensive loss

Treasury stock, at cost; shares: December 31, 2019 - 8,403,526; December 31, 2018 - 7,340,631

Total stockholders’ deficit

Total liabilities and stockholders’ deficit

Cash flows from operating activities:

Net income

Adjustments to reconcile net income to cash flows provided by operating activities:

Depreciation and amortization

Non-cash stock-based compensation expense

Non-cash interest expense

Loss on extinguishment of debt

Closure and impairment charges

Deferred income taxes

Deferred revenue

Gain on disposition of assets

Other

Changes in operating assets and liabilities:

Accounts receivable, net

Current income tax receivables and payables

Gift card receivables and payables

Other current assets

Accounts payable

Accrued employee compensation and benefits

Other current liabilities

Cash flows provided by operating activities

Cash flows from investing activities:

Principal receipts from notes, equipment contracts and other long-term receivables

Proceeds from sale of property and equipment

Acquisition of business

Additions to property and equipment

Additions to long-term receivables

Other

Cash flows used in investing activities

Cash flows from financing activities:

Proceeds from issuance of long-term debt

Repayment of long-term debt

Borrowing from revolving credit facilities

Repayment of revolving credit facilities

Dividends paid on common stock

Repurchase of common stock

Principal payments on finance lease obligations

Payment of debt issuance costs

Proceeds from stock options exercised

Tax payments for restricted stock upon vesting

Other

Cash flows used in financing activities

Net change in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

Cash, cash equivalents and restricted cash at end of period

Net income available to common stockholders, as reported

Amortization of intangible assets

Loss on extinguishment of debt

Non-cash interest expense

Administrative reorganization costs

Closure and impairment charges

Debt refinancing costs

Business acquisition costs

Nonrecurring restaurant costs

(Gain) loss on disposition of assets

Net income tax provision for above adjustments

Income tax adjustments⁽¹⁾

Net income allocated to unvested participating restricted stock

Net income available to common stockholders, as adjusted

Diluted net income available to common stockholders per share:

Net income available to common stockholders, as reported

Amortization of intangible assets

Loss on extinguishment of debt

Non-cash interest expense

Administrative reorganization costs

Closure and impairment charges

Debt refinancing costs

Business acquisition costs

Nonrecurring restaurant costs

(Gain) loss on disposition of assets

Income tax adjustments⁽¹⁾

Net income allocated to unvested participating restricted stock

Rounding

Diluted net income available to common stockholders per share, as adjusted

Numerator for basic EPS-income available to common stockholders, as adjusted

Effect of unvested participating restricted stock using the two-class method

Numerator for diluted EPS-income available to common stockholders, as adjusted

Denominator for basic EPS-weighted-average shares

Dilutive effect of stock options

Denominator for diluted EPS-weighted-average shares

Charges related to adjustments resulting from IRS audits for tax years 2011 through 2013

Cash flows provided by operating activities

Receipts from notes and equipment contracts receivable

Additions to property and equipment

Adjusted free cash flow

Dividends paid on common stock

Repurchase of Dine Brands Global common stock

Net income, as reported

Interest charges on finance leases

All other interest charges

Income tax provision

Depreciation and amortization

Non-cash stock-based compensation

Closure and impairment charges

Debt refinancing costs

Loss on extinguishment of debt

(Gain) loss on disposition of assets

Business acquisition costs

Other taxes

Adjusted EBITDA

Applebee’s

Franchise

Company

Total

System-wide^(b)

Domestic sales percentage change^(c)

Domestic same-restaurant sales percentage change^(d)

Franchise^(b)

Domestic sales percentage change^{(c) (e)}

Domestic same-restaurant sales percentage change^(d)

Average weekly domestic unit sales (in thousands)

Franchise

Area license

Total

System-wide^(b)

Sales percentage change^(c)

Domestic same-restaurant sales percentage change^{(d) (f)}

Franchise^(b)

Sales percentage change^(c)

Domestic same-restaurant sales percentage change^(d)

Average weekly unit sales (in thousands)

Area License ^(b)

Sales percentage change^(c)

“Effective Restaurants” are the weighted average number of restaurants open in a given fiscal period, adjusted to account for restaurants open for only a portion of the period. Information is presented for all Effective Restaurants in the Applebee’s and IHOP systems, which includes restaurants owned by franchisees and area licensees as well as those owned by the Company.

“System-wide” sales are retail sales at domestic Applebee’s restaurants operated by franchisees and IHOP restaurants operated by franchisees and area licensees, as reported to the Company, in addition to retail sales at company-operated restaurants. Sales at restaurants that are owned by franchisees and area licensees are not attributable to the Company. An increase or decrease in franchisees’ reported sales will result in a corresponding increase or decrease in our royalty revenue. Unaudited reported sales for Applebee’s domestic franchise restaurants, IHOP franchise restaurants and IHOP area license restaurants for the three and twelve months ended December 31, 2019 and 2018 and sales by company-operated restaurants were as follows:

 Reported sales

Applebee’s domestic franchise restaurant sales

Applebee’s company-operated restaurants

IHOP franchise restaurant sales

IHOP area license restaurant sales

Total

“Sales percentage change” reflects, for each category of restaurants, the percentage change in sales in any given fiscal period compared to the prior fiscal period for all restaurants in that category.

“Domestic same-restaurant sales percentage change” reflects the percentage change in sales, in any given fiscal period, compared to the same weeks in the prior year for domestic restaurants that have been operated throughout both fiscal periods that are being compared and have been open for at least 18 months. Because of new unit openings and restaurant closures, the domestic restaurants open throughout both fiscal periods being compared may be different from period to period.

The franchise sales percentage change for 2019 was impacted by the acquisition of 69 franchise restaurants in December 2018 now reported as company-operated.

IHOP same-restaurant sales data includes area license restaurants beginning in 2019.

Applebee’s Restaurant Development Activity

Franchise

Company restaurants

Total Applebee’s restaurants, beginning of period

Franchise restaurants opened:

Domestic