Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________________________ 
FORM 10-Q
 (Mark One)
x      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2015 
 OR
o         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from                  to                
 
Commission File Number 001-15283
DineEquity, Inc.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or
organization)	 	95-3038279
(I.R.S. Employer Identification No.)	
 	 	 	
450 North Brand Boulevard, Glendale, California (Address of principal executive offices)	 	91203-1903 (Zip Code)	
 
(818) 240-6055
(Registrant’s telephone number, including area code)
 ______________________________________________________________
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x   No  o
 Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  x   No  o
 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x	 	Accelerated filer o	
 	 	 	
Non-accelerated filer o	 	Smaller reporting company o	
(Do not check if a smaller reporting company)	 	 	
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o  No  x  
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 	 	 	
Class	 	Outstanding as of April 24, 2015	
Common Stock, $0.01 par value	 	19,049,811	

Table of Contents

DineEquity, Inc. and Subsidiaries
Index

 	 	 	
 	 	Page	
PART I.	FINANCIAL INFORMATION	2	
 	Item 1—Financial Statements	2	
 	Consolidated Balance Sheets—March 31, 2015 (unaudited) and December 31, 2014	2	
 	Consolidated Statements of Comprehensive Income (unaudited)—Three Months Ended March 31, 2015 and 2014	3	
 	Consolidated Statements of Cash Flows (unaudited)—Three Months Ended March 31, 2015 and 2014	4	
 	Notes to Consolidated Financial Statements	5	
 	Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations	12	
 	Item 3—Quantitative and Qualitative Disclosures about Market Risk	26	
 	Item 4—Controls and Procedures	26	
PART II.	OTHER INFORMATION	26	
 	Item 1—Legal Proceedings	26	
 	Item 1A—Risk Factors	26	
 	Item 2—Unregistered Sales of Equity Securities and Use of Proceeds	26	
 	Item 3—Defaults Upon Senior Securities	27	
 	Item 4—Mine Safety Disclosures	27	
 	Item 5—Other Information	28	
 	Item 6—Exhibits	28	
 	Signatures	29	

1

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements.
DineEquity, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share and per share amounts)

Assets	 	March 31,
2015	 	December 31, 2014	
 	 	(Unaudited)	 	 	
Current assets:	 	 	

Cash and cash equivalents	 	$	133,470	
 	 	$	104,004	
 	
Receivables, net	 	93,532	
 	 	153,498	
 	
Restricted cash	 	40,701	
 	 	52,262	
 	
Prepaid gift cards	 	41,208	
 	 	51,268	
 	
Prepaid income taxes	 	—	
 	 	11,753	
 	
Deferred income taxes	 	34,743	
 	 	30,860	
 	
Other current assets	 	12,905	
 	 	9,239	
 	
Total current assets	 	356,559	
 	 	412,884	
 	
Long-term receivables, net	 	175,579	
 	 	180,856	
 	
Property and equipment, net	 	235,355	
 	 	241,229	
 	
Goodwill	 	697,470	
 	 	697,470	
 	
Other intangible assets, net	 	779,878	
 	 	782,336	
 	
Deferred rent receivable	 	90,920	
 	 	91,117	
 	
Other non-current assets, net	 	41,553	
 	 	42,216	
 	
Total assets	 	$	2,377,314	
 	 	$	2,448,108	
 	
Liabilities and Stockholders’ Equity	 	 	

Current liabilities:	 	 	

Accounts payable	 	$	34,781	
 	 	$	41,771	
 	
Gift card liability	 	119,072	
 	 	179,760	
 	
Accrued advertising	 	22,807	
 	 	10,150	
 	
Accrued employee compensation and benefits	 	10,913	
 	 	25,722	
 	
Dividends payable	 	16,704	
 	 	16,635	
 	
Accrued interest payable	 	3,897	
 	 	14,126	
 	
Income taxes payable	 	11,820	
 	 	—	
 	
Current maturities of capital lease and financing obligations	 	15,125	
 	 	14,852	
 	
Other accrued expenses	 	7,425	
 	 	10,033	
 	
Total current liabilities	 	242,544	
 	 	313,049	
 	
Long-term debt	 	1,300,000	
 	 	1,300,000	
 	
Capital lease obligations, less current maturities	 	94,584	
 	 	98,119	
 	
Financing obligations, less current maturities	 	42,493	
 	 	42,524	
 	
Deferred income taxes	 	311,827	
 	 	319,111	
 	
Deferred rent payable	 	75,096	
 	 	75,375	
 	
Other non-current liabilities	 	22,576	
 	 	20,857	
 	
Total liabilities	 	2,089,120	
 	 	2,169,035	
 	
Commitments and contingencies	 	

 	
 	
Stockholders’ equity:	 	 	

Common stock, $0.01 par value, shares: 40,000,000 authorized; March 31, 2015 - 25,219,105 issued, 19,050,897 outstanding; December 31, 2014 - 25,240,055 issued, 18,953,567 outstanding	 	252	
 	 	252	
 	
 Additional paid-in-capital	 	283,000	
 	 	279,946	
 	
 Retained earnings	 	325,374	
 	 	313,644	
 	
 Accumulated other comprehensive loss	 	(88	)	 	(73	)	
Treasury stock, at cost; shares: March 31, 2015 - 6,168,208; December 31, 2014 - 6,286,488	 	(320,344	)	 	(314,696	)	
Total stockholders’ equity	 	288,194	
 	 	279,073	
 	
Total liabilities and stockholders’ equity	 	$	2,377,314	
 	 	$	2,448,108	

 See the accompanying Notes to Consolidated Financial Statements.

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Table of Contents

DineEquity, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income
(In thousands, except per share amounts)
(Unaudited)

 	 	Three Months Ended	
 	 	March 31,	
 	 	2015	 	2014	
Revenues:	 	 	 	 	
Franchise and restaurant revenues	 	$	141,818	
 	 	$	131,795	
 	
Rental revenues	 	31,402	
 	 	30,753	
 	
Financing revenues	 	2,594	
 	 	4,653	
 	
Total revenues	 	175,814	
 	 	167,201	
 	
Cost of revenues:	 	 	 	 	
Franchise and restaurant expenses	 	52,026	
 	 	45,678	
 	
Rental expenses	 	23,490	
 	 	23,866	
 	
Financing expenses	 	12	
 	 	585	
 	
Total cost of revenues	 	75,528	
 	 	70,129	
 	
Gross profit	 	100,286	
 	 	97,072	
 	
General and administrative expenses	 	34,230	
 	 	34,185	
 	
Interest expense	 	15,646	
 	 	24,969	
 	
Amortization of intangible assets	 	2,500	
 	 	3,071	
 	
Closure and impairment charges, net	 	1,827	
 	 	200	
 	
Loss on extinguishment of debt	 	—	
 	 	6	
 	
(Gain) loss on disposition of assets	 	(9	)	 	927	
 	
Income before income tax provision	 	46,092	
 	 	33,714	
 	
Income tax provision	 	(17,680	)	 	(12,890	)	
Net income	 	28,412	
 	 	20,824	
 	
Other comprehensive (loss) income, net of tax:	 	 	 	 	
Foreign currency translation adjustment	 	(15	)	 	(6	)	
Total comprehensive income	 	$	28,397	
 	 	$	20,818	
 	
Net income available to common stockholders:	 	 	 	 	
Net income	 	$	28,412	
 	 	$	20,824	
 	
Less: Net income allocated to unvested participating restricted stock	 	(372	)	 	(343	)	
Net income available to common stockholders	 	$	28,040	
 	 	$	20,481	
 	
Net income available to common stockholders per share:	 	 	 	 	
Basic	 	$	1.49	
 	 	$	1.09	
 	
Diluted	 	$	1.47	
 	 	$	1.08	
 	
Weighted average shares outstanding:	 	 	 	 	
Basic	 	18,870	
 	 	18,794	
 	
Diluted	 	19,019	
 	 	19,054	

Dividends declared per common share	 	$	0.875	
 	 	$	0.75	
 	
Dividends paid per common share	 	$	0.875	
 	 	$	0.75	

See the accompanying Notes to Consolidated Financial Statements.

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DineEquity, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

 	 	Three Months Ended	
 	 	March 31,	
 	 	2015	 	2014	
Cash flows from operating activities:	 	 	

Net income	 	$	28,412	
 	 	$	20,824	
 	
Adjustments to reconcile net income to cash flows provided by operating activities:	 	 	

Depreciation and amortization	 	7,815	
 	 	8,783	
 	
Non-cash interest expense	 	755	
 	 	1,642	
 	
Deferred income taxes	 	(10,378	)	 	(10,031	)	
Non-cash stock-based compensation expense	 	2,432	
 	 	3,143	
 	
Tax benefit from stock-based compensation	 	4,696	
 	 	3,524	
 	
Excess tax benefit from stock-based compensation	 	(4,526	)	 	(4,455	)	
Closure and impairment charges	 	1,827	
 	 	200	
 	
(Gain) loss on disposition of assets	 	(9	)	 	927	
 	
Other	 	31	
 	 	(396	)	
Changes in operating assets and liabilities:	 	 	

Accounts receivable, net	 	(2,742	)	 	(9,767	)	
Current income tax receivables and payables	 	22,341	
 	 	18,020	
 	
Gift card receivables and payables	 	5,623	
 	 	2,982	
 	
Prepaid expenses and other current assets	 	(1,638	)	 	(751	)	
Accounts payable	 	1,034	
 	 	9,175	
 	
Accrued employee compensation and benefits	 	(14,810	)	 	(14,857	)	
Other accrued expenses	 	267	
 	 	23,877	
 	
Cash flows provided by operating activities	 	41,130	
 	 	52,840	
 	
Cash flows from investing activities:	 	 	

Additions to property and equipment	 	(2,617	)	 	(2,039	)	
Proceeds from sale of property and equipment	 	—	
 	 	681	
 	
Principal receipts from notes, equipment contracts and other long-term receivables	 	4,442	
 	 	3,415	
 	
Other	 	(40	)	 	(55	)	
Cash flows provided by investing activities	 	1,785	
 	 	2,002	
 	
Cash flows from financing activities:	 	 	 	 	
 	
Repayment of long-term debt	 	—	
 	 	(1,200	)	
Principal payments on capital lease and financing obligations	 	(3,165	)	 	(2,695	)	
Repurchase of DineEquity common stock	 	(15,003	)	 	(15,002	)	
Dividends paid on common stock	 	(16,598	)	 	(14,293	)	
Repurchase of restricted stock	 	(2,961	)	 	(1,831	)	
Proceeds from stock options exercised	 	8,206	
 	 	6,623	
 	
Excess tax benefit from stock-based compensation	 	4,526	
 	 	4,455	
 	
Change in restricted cash	 	11,561	
 	 	(3,692	)	
Other	 	(15	)	 	—	
 	
Cash flows used in financing activities	 	(13,449	)	 	(27,635	)	
Net change in cash and cash equivalents	 	29,466	
 	 	27,207	
 	
Cash and cash equivalents at beginning of period	 	104,004	
 	 	106,011	
 	
Cash and cash equivalents at end of period	 	$	133,470	
 	 	$	133,218	
 	
Supplemental disclosures:	 	 	

Interest paid in cash	 	$	28,387	
 	 	$	8,901	
 	
Income taxes paid in cash	 	$	1,172	
 	 	$	2,294	

See the accompanying Notes to Consolidated Financial Statements.

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DineEquity, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)

1. General
 
The accompanying unaudited consolidated financial statements of DineEquity, Inc. (the “Company”) have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The operating results for the three months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the twelve months ending December 31, 2015.
 
The consolidated balance sheet at December 31, 2014 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.
 
These consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.
 
2. Basis of Presentation
 
The Company’s fiscal quarters end on the Sunday closest to the last day of each quarter. For convenience, the fiscal quarters of each year are referred to as ending on March 31, June 30, September 30 and December 31. The first quarter of fiscal 2015 began December 29, 2014 and ended on March 29, 2015. The first quarter of fiscal 2014 began December 30, 2013 and ended on March 30, 2014.
 
The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries that are consolidated in accordance with U.S. GAAP. All intercompany balances and transactions have been eliminated.
 
The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make assumptions and estimates that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities, if any, at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates are made in the calculation and assessment of the following: (a) impairment of tangible and intangible assets, (b) income taxes, (c) allowance for doubtful accounts and notes receivables, (d) lease accounting estimates and (e) contingencies. On an ongoing basis, the Company evaluates its estimates based on historical experience, current conditions and various other assumptions that are believed to be reasonable under the circumstances. The Company adjusts such estimates and assumptions when facts and circumstances dictate. Actual results could differ from those estimates.
 
3. Accounting Policies
 
Accounting Standards Adopted in the Current Fiscal Year
 
In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08,  Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity  (“ASU 2014-08”). The amendments in ASU 2014-08 change the criteria for the reporting of discontinued operations. Under ASU 2014-08, only disposals resulting in a strategic shift that will have a major effect on an entity's operations and financial results will be reported as discontinued operations. ASU 2014-08 also removed the requirement that an entity not have any significant continuing involvement in the operations of the component after disposal to qualify for reporting of the disposal as a discontinued operation. The adoption of ASU 2014-08 as of January 1, 2015 did not have an impact on the Company’s consolidated financial statements.

Newly Issued Accounting Standards Not Yet Adopted

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. Presently, the Company will be required to apply the provisions of ASU 2014-09

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DineEquity, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)

3. Accounting Policies (Continued)

beginning with its first fiscal quarter of 2017, either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. On April 1, 2015, the FASB proposed deferring the effective date by one year such that if deferral is approved, the Company would be required to adopt ASU 2014-09 beginning with its first fiscal quarter of 2018. The FASB also proposed permitting early adoption of the standard, but not before the original effective date of December 15, 2016.

The guidance in ASU 2014-09 supersedes nearly all of the existing general revenue recognition guidance under U.S. GAAP as well as most industry-specific revenue recognition guidance, including guidance with respect to revenue recognition by franchisors. The Company believes the recognition of the majority of its revenues, including franchise royalty revenues, sales of IHOP pancake and waffle dry mix and retail sales at company-operated restaurants will not be affected by ASU 2014-09. Additionally, lease rental revenues are not within the scope of ASU 2014-09 guidance. The Company is currently evaluating the effect that ASU 2014-09 will have on its financial statements and related disclosures and which method of adoption will be used.
 
The Company reviewed all other newly issued accounting pronouncements and concluded that they either are not applicable to the Company or are not expected to have a material effect on the Company's consolidated financial statements as a result of future adoption.
 
4. Stockholders' Equity

Dividends
 
During the three months ended March 31, 2015, the Company paid dividends on common stock of approximately $16.6 million, representing the dividend declared in the fourth quarter of 2014. On February 24, 2015, the Company's Board of Directors declared a first quarter 2015 cash dividend of $0.875 per share of common stock. This dividend was paid on April 10, 2015 to the Company's stockholders of record at the close of business on March 13, 2015. The Company had approximately $16.7 million accrued for this dividend payment at March 31, 2015.

Stock Repurchase Program

In October 2014, the Company's Board of Directors approved a stock repurchase authorization of up to $100 million of DineEquity common stock. Under this program, the Company may repurchase shares on an opportunistic basis from time to time in open market transactions and in privately negotiated transactions based on business, market, applicable legal requirements, and other considerations. The repurchase program does not require the repurchase of a specific number of shares and may be terminated at any time. During the three months ended March 31, 2015, the Company repurchased 140,096 shares of common stock at a cost of $15.0 million. As of March 31, 2015, the Company has repurchased a cumulative total of 160,431 shares of common stock under the current Board authorization at a total cost of $17.0 million. The Company may repurchase up to an additional $83.0 million of common stock under the current Board authorization.

Treasury Stock

Repurchases of DineEquity common stock are included in treasury stock at the cost of shares repurchased plus any transaction costs. Treasury stock may be re-issued when stock options are exercised, when restricted stock awards are granted and when restricted stock units settle in stock upon vesting. The cost of treasury stock re-issued is determined using the first-in, first-out (“FIFO”) method. During the three months ended March 31, 2015, the Company re-issued 258,376 treasury shares at a total FIFO cost of $9.4 million.

5. Income Taxes
 
The Company's effective tax rate was 38.4% for the three months ended March 31, 2015 as compared to 38.2% for the three months ended March 31, 2014.

 The total gross unrecognized tax benefit as of March 31, 2015 and December 31, 2014 was $3.2 million and $3.4 million, respectively, excluding interest, penalties and related tax benefits. The Company estimates the unrecognized tax benefit may decrease over the upcoming 12 months by an amount up to $0.1 million related to settlements with taxing authorities and the lapse of statutes of limitations. For the remaining liability, due to the uncertainties related to these tax matters, the Company is unable to make a reasonably reliable estimate when cash settlement with a taxing authority will occur.

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DineEquity, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)

5. Income Taxes (Continued)

As of March 31, 2015, accrued interest was $4.0 million and accrued penalties were less than $0.1 million, excluding any related income tax benefits. As of December 31, 2014, accrued interest was $3.9 million and accrued penalties were less than $0.1 million, excluding any related income tax benefits. The Company recognizes interest accrued related to unrecognized tax benefits and penalties as a component of its income tax provision recognized in the Consolidated Statements of Comprehensive Income.

The Company files federal income tax returns and the Company or one of its subsidiaries file income tax returns in various state and foreign jurisdictions. With few exceptions, the Company is no longer subject to federal, state or non-United States tax examinations by tax authorities for years before 2008. In the second quarter of 2013, the Internal Revenue Service (“IRS”) issued a Revenue Agent’s Report related to its examination of the Company’s U.S federal income tax return for each of the tax years 2008 to 2010. The Company disagrees with a portion of the proposed assessments and has contested them through the IRS administrative appeals procedures. The appeals process is ongoing. The Company continues to believe that adequate reserves have been provided relating to all matters contained in the tax periods open to examination.

6. Stock-Based Compensation
 
The following table summarizes the components of the Company’s stock-based compensation expense included in general and administrative expenses in the Consolidated Statements of Comprehensive Income for the three months ended March 31, 2015 and 2014:

 	 	Three Months Ended	
 	 	March 31,	
 	 	2015	 	2014	
 	(In millions)	
Total stock-based compensation expense:	 	 	 	 	
Equity classified awards expense	 	$	2.4	
 	 	$	3.2	
 	
Liability classified awards expense (credit)	 	0.3	
 	 	(0.2	)	
Total pre-tax stock-based compensation expense	 	2.7	
 	 	3.0	
 	
Tax benefit	 	(1.0	)	 	(1.1	)	
Total stock-based compensation expense, net of tax	 	$	1.7	
 	 	$	1.9	

As of March 31, 2015, total unrecognized compensation costs of $15.0 million related to restricted stock and restricted stock units and $5.7 million related to stock options are expected to be recognized over a weighted average period of 1.82 years for restricted stock and restricted stock units and 1.80 years for stock options.
 
Equity Classified Awards - Stock Options

The estimated fair value of the stock options granted during the three months ended March 31, 2015 was calculated using a Black-Scholes option pricing model. The following summarizes the assumptions used in the Black-Scholes model:

 	 	 	
Risk-free interest rate	1.56	%	
Weighted average historical volatility	37.5	%	
Dividend yield	3.10	%	
Expected years until exercise	4.50	
 	
Forfeitures	11.0	%	
Weighted average fair value of options granted	$28.37	

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DineEquity, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)

6. Stock-Based Compensation (Continued)

Stock option balances as of March 31, 2015 and activity related to stock options for the three months ended March 31, 2015 were as follows:

 	 	Shares	 	Weighted
Average
Exercise
Price	 	Weighted Average
Remaining
Contractual Term
(in Years)	 	Aggregate
Intrinsic
Value (in Millions)	
Outstanding at December 31, 2014	 	618,115	
 	 	$	53.10	
 	 	 	 	 	
Granted	 	117,511	
 	 	113.72	
 	 	 	 	 	
Exercised	 	(194,648	)	 	42.16	
 	 	 	 	 	
Outstanding at March 31, 2015	 	540,978	
 	 	70.21	
 	 	7.5	 	$20.7	
Vested at March 31, 2015 and Expected to Vest	 	499,627	
 	 	67.67	
 	 	7.4	 	$20.3	
Exercisable at March 31, 2015	 	327,100	
 	 	$	51.83	
 	 	6.4	 	$18.0	
 
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the closing stock price of the Company’s common stock on the last trading day of the first quarter of 2015 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on March 31, 2015. The aggregate intrinsic value will change based on the fair market value of the Company’s common stock and the number of in-the-money options.

Equity Classified Awards - Restricted Stock and Restricted Stock Units

Outstanding balances as of March 31, 2015 and activity related to restricted stock and restricted stock units for the three months ended March 31, 2015 were as follows:

 	 	Restricted
Stock	 	Weighted
Average
Grant Date
Fair Value	 	Restricted
Stock Units	 	Weighted
Average
Grant Date
Fair Value	
Outstanding at December 31, 2014	 	233,818	
 	 	$	70.14	
 	 	41,622	
 	 	$	66.92	
 	
Granted	 	63,728	
 	 	113.62	
 	 	9,695	
 	 	113.72	
 	
Released	 	(61,974	)	 	52.30	
 	 	(13,567	)	 	52.19	
 	
Forfeited	 	(5,413	)	 	72.97	
 	 	—	
 	 	—	
 	
Outstanding at March 31, 2015	 	230,159	
 	 	$	86.91	
 	 	37,750	
 	 	$	86.54	

Liability Classified Awards - Long-Term Incentive Awards
The Company has granted cash long-term incentive awards (“LTIP awards”) to certain employees. Annual LTIP awards vest over a three-year period and are determined using a multiplier from 0% to 200% of the target award based on the total shareholder return of DineEquity, Inc. common stock compared to the total stockholder returns of a peer group of companies. Although LTIP awards are both denominated and paid only in cash, because the multiplier is based on the price of the Company's common stock, the awards are considered stock-based compensation in accordance with U.S. GAAP and are recorded as liabilities based on the closing price of the Company’s common stock as of each period end. For the three months ended March 31, 2015 and 2014, an expense of $0.3 million and a credit of $0.2 million, respectively, were included in total stock-based compensation expense related to the LTIP awards. At March 31, 2015 and December 31, 2014, liabilities of $2.3 million and $4.0 million, respectively, related to LTIP awards were included as part of accrued employee compensation and benefits in the Consolidated Balance Sheets.

7. Segments
 
The Company has two reportable segments: franchise operations (an aggregation of Applebee’s and IHOP franchise operations) and rental operations. The Company also has company-operated restaurant operations and financing operations, but neither of these operations exceeds 10% of consolidated revenues, income before income tax provision or total assets.
 
As of March 31, 2015, the franchise operations segment consisted of (i) 1,991 restaurants operated by Applebee’s franchisees in the United States, two U.S. territories and 15 countries outside the United States; and (ii) 1,637 restaurants operated by IHOP franchisees and area licensees in the United States, two U.S. territories and eight countries outside the United

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DineEquity, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)

7. Segments (Continued)

States. Franchise operations revenue consists primarily of franchise royalty revenues, sales of proprietary products to franchisees (primarily pancake and waffle dry mixes for the IHOP restaurants), IHOP franchise advertising fees and franchise fees.  Franchise operations expenses include IHOP advertising expenses, the cost of IHOP proprietary products, IHOP and Applebee's pre-opening training expenses and other franchise-related costs.

Rental operations revenue includes revenue from operating leases and interest income from direct financing leases. Rental operations expenses are costs of operating leases and interest expense from capital leases on franchisee-operated restaurants. 

At March 31, 2015, the company restaurant operations segment consisted of 23 Applebee’s company-operated restaurants and 13 IHOP company-operated restaurants, all of which are located in the United States. Company restaurant sales are retail sales at company-operated restaurants. Company restaurant expenses are operating expenses at company-operated restaurants and include food, labor, utilities, rent and other restaurant operating costs.
 
Financing operations revenue primarily consists of interest income from the financing of franchise fees and equipment leases and sales of equipment associated with refranchised IHOP restaurants. Financing expenses are primarily the cost of restaurant equipment associated with refranchised IHOP restaurants.
 
Information on segments and a reconciliation to income before income tax provision for the three months ended March 31, 2015 and 2014 were as follows:

 	 	Three Months Ended	
 	 	March 31,	
 	 	2015	 	2014	
 	(In millions)	
Revenues from external customers:	 	 	 	 	
 	 	 	 	 	
Franchise operations	 	$	124.5	
 	 	$	115.5	
 	
Rental operations	 	31.4	
 	 	30.7	
 	
Company restaurants	 	17.3	
 	 	16.3	
 	
Financing operations	 	2.6	
 	 	4.7	
 	
Total	 	$	175.8	
 	 	$	167.2	

Interest expense:	 	 	 	 	
 	 	 	 	 	
Rental operations	 	$	3.5	
 	 	$	3.9	
 	
Company restaurants	 	0.1	
 	 	0.1	
 	
Corporate	 	15.6	
 	 	25.0	
 	
Total	 	$	19.2	
 	 	$	29.0	

Depreciation and amortization:	 	 	 	 	
 	 	 	 	 	
Franchise operations	 	$	2.6	
 	 	$	2.6	
 	
Rental operations	 	3.2	
 	 	3.4	
 	
Company restaurants	 	0.2	
 	 	0.5	
 	
Corporate	 	1.8	
 	 	2.3	
 	
Total	 	$	7.8	
 	 	$	8.8	

Income before income tax provision:	 	 	 	 	
 	 	 	 	 	
Franchise operations	 	$	89.0	
 	 	$	86.1	
 	
Rental operations	 	7.9	
 	 	6.9	
 	
Company restaurants	 	0.8	
 	 	(0.0	)	
Financing operations	 	2.6	
 	 	4.1	
 	
Corporate	 	(54.2	)	 	(63.4	)	
Total	 	$	46.1	
 	 	$	33.7	

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DineEquity, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)

8. Net Income per Share

The computation of the Company's basic and diluted net income per share for the three months ended March 31, 2015 and 2014 was as follows:

 	 	Three Months Ended	
 	 	March 31,	
 	 	2015	 	2014	
 	(In thousands, except per share data)	
Numerator for basic and dilutive income per common share:	 	 	 	 	
Net income	 	$	28,412	
 	 	$	20,824	
 	
Less: Net income allocated to unvested participating restricted stock	 	(372	)	 	(343	)	
Net income available to common stockholders - basic	 	28,040	
 	 	20,481	
 	
Effect of unvested participating restricted stock in two-class calculation	 	2	
 	 	2	
 	
Net income available to common stockholders - diluted	 	$	28,042	
 	 	$	20,483	
 	
Denominator:	 	 	 	 	
Weighted average outstanding shares of common stock - basic	 	18,870	
 	 	18,794	
 	
Dilutive effect of stock options	 	149	
 	 	260	
 	
Weighted average outstanding shares of common stock - diluted	 	19,019	
 	 	19,054	
 	
Net income per common share:	 	 	 	 	
Basic	 	$	1.49	
 	 	$	1.09	
 	
Diluted	 	$	1.47	
 	 	$	1.08	

9. Fair Value Measurements
The Company does not have a material amount of financial assets or liabilities that are required under U.S. GAAP to be measured on a recurring basis at fair value. The Company is not a party to any derivative financial instruments. The Company does not have a material amount of non-financial assets or non-financial liabilities that are required under U.S. GAAP to be measured at fair value on a recurring basis. The Company has not elected to use the fair value measurement option, as permitted under U.S. GAAP, for any assets or liabilities for which fair value measurement is not presently required.
 
The Company believes the fair values of cash equivalents, accounts receivable and accounts payable approximate their carrying amounts due to their short duration.
 
The fair values of non-current financial liabilities at March 31, 2015 and December 31, 2014, determined based on Level 2 inputs, were as follows:

 	 	March 31, 2015	 	December 31, 2014	
 	 	Carrying
Amount	 	Fair Value	 	Carrying
Amount	 	Fair Value	
 	 	(In millions)	
Long-term debt	 	$	1,300.0	
 	 	$	1,347.6	
 	 	$	1,300.0	
 	 	$	1,302.0	

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DineEquity, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)

10. Commitments and Contingencies
 
Litigation, Claims and Disputes
 
The Company is subject to various lawsuits, administrative proceedings, audits, and claims arising in the ordinary course of business. Some of these lawsuits purport to be class actions and/or seek substantial damages. The Company is required under U.S. GAAP to record an accrual for litigation loss contingencies that are both probable and reasonably estimable. Legal fees and expenses associated with the defense of all of the Company's litigation are expensed as such fees and expenses are incurred. Management regularly assesses the Company's insurance coverage, analyzes litigation information with the Company's attorneys and evaluates the Company's loss experience in connection with pending legal proceedings. While the Company does not presently believe that any of the legal proceedings to which it is currently a party will ultimately have a material adverse impact on the Company, there can be no assurance that the Company will prevail in all the proceedings the Company is party to, or that the Company will not incur material losses from them.

Lease Guarantees
 
In connection with the sale of Applebee’s restaurants or previous brands to franchisees and other parties, the Company has, in certain cases, guaranteed or has potential continuing liability for lease payments totaling $373.1 million as of March 31, 2015. This amount represents the maximum potential liability for future payments under these leases. These leases have been assigned to the buyers and expire at the end of the respective lease terms, which range from 2015 through 2048. In the event of default, the indemnity and default clauses in the sale or assignment agreements govern the Company's ability to pursue and recover damages incurred.  No material liabilities have been recorded as of March 31, 2015.

11. Subsequent Events

On April 20, 2015, the Company entered into an asset purchase agreement for the refranchising and sale of related
restaurant assets of 23 Applebee’s company-operated restaurants located in a two-state market area geographically centered
around Kansas City, Missouri. This sale is expected to close in the fiscal third quarter of 2015.

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Cautionary Statement Regarding Forward-Looking Statements
 
Statements contained in this report may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors, which may cause actual results to be materially different from those expressed or implied in such statements. You can identify these forward-looking statements by words such as “may,” “will,” “should,” “expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan” and other similar expressions. You should consider our forward-looking statements in light of the risks discussed under the heading “Risk Factors” in our most recent Annual Report on Form 10-K, as well as our consolidated financial statements, related notes, and the other financial information appearing elsewhere in this report and our other filings with the United States Securities and Exchange Commission. The forward-looking statements contained in this report are made as of the date hereof and the Company assumes no obligation to update or supplement any forward-looking statements.

You should read the following Management's Discussion and Analysis of Financial Condition and Results of Operations in conjunction with the consolidated financial statements and the related notes that appear elsewhere in this report.
 
Overview
 
The following discussion and analysis provides information we believe is relevant to an assessment and understanding of our consolidated results of operations and financial condition. The discussion should be read in conjunction with the consolidated financial statements and the notes thereto included in Item 1 of Part I of this Quarterly Report and the audited consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014. Except where the context indicates otherwise, the words “we,” “us,” “our” and the “Company” refer to DineEquity, Inc., together with its subsidiaries that are consolidated in accordance with United States generally accepted accounting principles (“U.S. GAAP”).
 
Through various subsidiaries, we own, franchise and operate two restaurant concepts: Applebee's Neighborhood Grill & Bar ®  (“Applebee's ® ”), in the bar and grill segment within the casual dining category of the restaurant industry, and International House of Pancakes ®  (“IHOP ® ”), in the family dining category of the restaurant industry. References herein to Applebee's and IHOP restaurants are to these two restaurant concepts, whether operated by franchisees, area licensees or by us. With over 3,600 restaurants combined, 99% of which are franchised, we believe we are one of the largest full-service restaurant companies in the world.

Summary Results of Operations

 	 	Three Months Ended	 	Favorable
(Unfavorable) Variance	
 	 	March 31,	 	 	
 	 	2015	 	2014	 	 	
 	 	(In millions, except per share information)	
Revenue	 	$	175.8	
 	 	$	167.2	
 	 	$	8.6	
 	
Gross profit	 	$	100.3	
 	 	$	97.1	
 	 	$	3.2	
 	
General and administrative expenses	 	34.2	
 	 	34.2	
 	 	(0.0	)	
Interest expense	 	15.6	
 	 	25.0	
 	 	9.3	
 	
Other expenses, net (1)	 	4.3	
 	 	4.2	
 	 	(0.1	)	
Income tax provision	 	17.7	
 	 	12.9	
 	 	(4.8	)	
Net income	 	$	28.4	
 	 	$	20.8	
 	 	$	7.6	
 	
Net income per diluted share	 	$	1.47	
 	 	$	1.08	
 	 	$	0.39	
 	
(1) Amortization of intangible assets, closure and impairment charges, loss on extinguishment of debt and gain or loss on disposition of assets.

Net income for the three months ended March 31, 2015 increased 36.4% compared with the same period of the prior year. This improvement was due to (i) significantly lower interest expense resulting from the refinancing of our long-term debt in the fourth quarter of 2014 at a fixed interest rate approximately 3% lower than prior to the refinancing and (ii) revenue and gross profit growth, primarily stemming from an increase in Applebee's and IHOP domestic same-restaurant sales and IHOP restaurant development over the past twelve months.

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Key Performance Indicators

In evaluating the performance of each restaurant concept, we consider the key performance indicators to be net franchise restaurant development and the percentage change in domestic system-wide same-restaurant sales. Since we are a 99% franchised company, expanding the number of Applebee's and IHOP franchise restaurants is an important driver of revenue growth because we currently do not plan to open any new company-operated restaurants or expand our rental and financing operations, legacies from the IHOP business model we operated under prior to 2003. Growth in both the number of franchise restaurants and sales at those restaurants will drive franchise revenues in the form of higher royalty revenues, additional franchise fees and, in the case of IHOP restaurants, sales of proprietary pancake and waffle dry mix.
   
An overview of these key performance indicators for the three months ended March 31, 2015 is as follows:

 	 	Three Months Ended	
 	 	March 31, 2015	
 	 	Applebee's	 	IHOP	
Percentage increase in domestic system-wide same-restaurant sales	 	2.9%	 	4.8%	
Net franchise restaurant (reduction) development (1)	 	(3)	 	—	
___________________________________
(1)Franchise and area license openings, net of closings
For the three months ended March 31, 2015, IHOP's domestic system-wide same-restaurant sales increased 4.8%. The increase resulted from a higher average customer check as well as an increase in customer traffic. IHOP outperformed the overall restaurant industry as well as the family dining segment in domestic system-wide same-restaurant sales. Based on data from Black Box Intelligence, a restaurant sales reporting firm (“Black Box”), during this same period both the family dining segment and the overall restaurant industry experienced an increase in average customer check that was partially offset by a decrease in customer traffic.
For the three months ended March 31, 2015, Applebee's domestic system-wide same-restaurant sales increased 2.9%. The increase resulted from a higher average customer check partially offset by a slight decline in customer traffic. Based on data from Black Box, Applebee's domestic system-wide same-restaurant sales performance essentially equaled that of the overall restaurant industry and exceeded that of the casual dining segment, both of which experienced an increase in average customer check during this period that was partially offset by a decrease in customer traffic.
During the three months ended March 31, 2015, Applebee's franchisees opened six new restaurants and closed nine restaurants, resulting in a net decrease of three Applebee's franchise restaurants. IHOP franchisees opened seven new restaurants and closed seven restaurants, resulting in no net IHOP franchise restaurant development during the same period. Typically, the majority of gross and net franchise restaurant development takes place in the second half of any given year.
Franchise restaurant closures take place each year for a variety of reasons. The number of Applebee's and IHOP restaurants that were closed during the first quarter of 2015 is comparable to the number that were closed during the first quarter of 2014 and is not considered to be indicative of any trend.
In 2015, we expect IHOP franchisees to open a total of between 50 to 60 new restaurants and Applebee's franchisees to open a total of between 30 to 40 new restaurants. The majority of openings for each brand are expected to be in domestic markets. The actual number of openings in 2015 may differ from both our expectations and development commitments. Historically, the actual number of restaurants developed in a particular year has been less than the total number committed to be developed due to various factors, including economic conditions and franchisee noncompliance with restaurant opening commitments in development agreements. The timing of new restaurant openings also may be affected by various factors including weather-related and other construction delays, difficulties in obtaining timely regulatory approvals and the impact of currency fluctuations on our international franchisees.
Additional detail on each of our key performance indicators is presented under the captions “Restaurant Development Activity” and “Restaurant Data” that follow.

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In evaluating the performance of the consolidated enterprise, we consider the key performance indicators to be cash flows from operating activities and free cash flow (cash from operations, plus receipts from notes and equipment contract receivables, less capital expenditures).

Our cash flows from operating activities and free cash flow for the three months ended March 31, 2015 and 2014 were as follows:

 	Three Months Ended	 	 	
 	March 31,	 	Increase	
 	2015	 	2014	 	(Decrease)	
 	(In millions)	
Cash flows from operating activities	$	41.1	
 	 	$	52.8	
 	 	$	(11.7	)	
Free cash flow	$	41.1	
 	 	$	52.6	
 	 	$	(11.5	)	
The decrease in cash flows from operating activities and free cash flow was primarily due to the impact on working capital of the timing of interest payments and marketing accruals, partially offset by an increase in net income. Additional detail is presented under the caption “Liquidity and Capital Resources.”

Restaurant Development Activity

 	 	Three Months Ended	
 	 	March 31,	
 	 	2015	 	2014	
 	(Unaudited)	
Applebee's Restaurant Development Activity	 	 	 	 	
Summary - beginning of period:	 	 	 	 	
Franchise	 	1,994	
 	 	1,988	
 	
Company restaurants	 	23	
 	 	23	
 	
Total Applebee's restaurants, beginning of period	 	2,017	
 	 	2,011	
 	
Franchise restaurants opened:	 	 	 	 	
Domestic	 	4	
 	 	8	
 	
International	 	2	
 	 	—	
 	
Total franchise restaurants opened	 	6	
 	 	8	
 	
Franchise restaurants closed:	 	 	 	 	
Domestic	 	(4	)	 	(5	)	
International(1)	 	(5	)	 	(3	)	
Total franchise restaurants closed	 	(9	)	 	(8	)	
Net franchise restaurant (reduction) development	 	(3	)	 	—	
 	
Summary - end of period:	 	 	 	 	
Franchise	 	1,991	
 	 	1,988	
 	
Company restaurants	 	23	
 	 	23	
 	
Total Applebee's restaurants, end of period	 	2,014	
 	 	2,011	
 	
 _____________________________________________________
 
(1) Includes the closure of all three restaurants in the country of Honduras.

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 	 	Three Months Ended	

 	 	March 31,	
 	 	2015	 	2014	
 	(Unaudited)	
IHOP Restaurant Development Activity	 	 	 	 	
Summary - beginning of period:	 	 	 	 	
Franchise	 	1,472	
 	 	1,439	
 	
Area license	 	167	
 	 	168	
 	
Company	 	11	
 	 	13	
 	
Total IHOP restaurants, beginning of period	 	1,650	
 	 	1,620	

Franchise/area license restaurants opened:	 	 	 	 	
Domestic franchise	 	6	
 	 	9	
 	
Domestic area license	 	1	
 	 	1	
 	
International franchise	 	—	
 	 	4	
 	
Total franchise/area license restaurants opened	 	7	
 	 	14	
 	
Franchise/area license restaurants closed:	 	 	 	 	
Domestic franchise	 	(6	)	 	(5	)	
Domestic area license	 	(1	)	 	—	
 	
International franchise	 	—	
 	 	(1	)	
International area license	 	—	
 	 	(1	)	
Total franchise/area license restaurants closed	 	(7	)	 	(7	)	
Net franchise/area license restaurant development	 	—	
 	 	7	
 	
Refranchised from Company restaurants	 	1	
 	 	3	
 	
Franchise restaurants reacquired by the Company	 	(3	)	 	—	
 	
Net franchise/area license restaurant (reductions) additions	 	(2	)	 	10	

Summary - end of period:	 	 	 	 	
Franchise	 	1,470	
 	 	1,449	
 	
Area license	 	167	
 	 	168	
 	
Company	 	13	
 	 	10	
 	
Total IHOP restaurants, end of period	 	1,650	
 	 	1,627	

 

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Restaurant Data
 
The following table sets forth the number of “Effective Restaurants” in the Applebee’s and IHOP systems and information regarding the percentage change in sales at those restaurants compared to the same periods in the prior year. Sales at restaurants that are owned by franchisees and area licensees are not attributable to the Company. However, we believe that presentation of this information is useful in analyzing our revenues because franchisees and area licensees pay us royalties and advertising fees that are generally based on a percentage of their sales, and, where applicable, rental payments under leases that partially may be based on a percentage of their sales. Management also uses this information to make decisions about future plans for the development of additional restaurants as well as evaluation of current operations.

 	 	Three Months Ended	
—	
 	 	March 31,	
 	 	2015	 	2014	
 	(Unaudited)	
Applebee's Restaurant Data	 	 	

 	 	 	 	 	
Effective Restaurants(a)	 	 	

Franchise	 	1,992	
 	 	1,985	
 	
Company	 	23	
 	 	23	
 	
Total	 	2,015	
 	 	2,008	

System-wide(b)	 	 	

Sales percentage change(c)	 	3.6	%	 	(0.7	)%	
Domestic same-restaurant sales percentage change(d)	 	2.9	%	 	(0.5	)%	
 	 	 	 	 	
Franchise(b)	 	 	

Sales percentage change(c)	 	3.6	%	 	(0.7	)%	
Domestic same-restaurant sales percentage change(d)	 	2.9	%	 	(0.5	)%	
Average weekly domestic unit sales (in thousands)	 	$	51.1	
 	 	$	49.5	

IHOP Restaurant Data	 	 	

 	 	 	 	 	
Effective Restaurants(a)	 	 	

Franchise	 	1,470	
 	 	1,439	
 	
Area license	 	167	
 	 	169	
 	
Company	 	12	
 	 	11	
 	
Total	 	1,649	
 	 	1,619	

System-wide(b)	 	 	

Sales percentage change(c)	 	6.2	%	 	6.5	 %	
Domestic same-restaurant sales percentage change(d)	 	4.8	%	 	3.9	 %	
 	 	 	 	 	
Franchise(b)	 	 	

Sales percentage change(c)	 	6.0	%	 	6.4	 %	
Domestic same-restaurant sales percentage change(d)	 	4.8	%	 	3.9	 %	
Average weekly domestic unit sales (in thousands)	 	$	37.7	
 	 	$	36.4	

Area License(b)	 	 	

Sales percentage change(c)	 	7.0	%	 	8.0	 %	

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(a)   “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.
 
(b)   “System-wide sales” are retail sales at 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. Unaudited reported sales for Applebee's domestic franchise restaurants, IHOP franchise restaurants and IHOP area license restaurants were as follows:

 	 	Three Months Ended	
 	 	March 31,	
 	 	2015	 	2014	
Reported sales (unaudited)	(In millions)	
 	 	 	 	 	
Applebee's franchise restaurant sales	 	$	1,226.0	
 	 	$	1,183.1	
 	
IHOP franchise restaurant sales	 	$	721.2	
 	 	$	680.3	
 	
IHOP area license restaurant sales	 	$	75.0	
 	 	$	70.1	

 
(c)   “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.
 
(d)   “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 fiscal period, 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. Domestic same-restaurant sales percentage change does not include data on IHOP area license restaurants.  

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Significant Known Events, Trends or Uncertainties Impacting or Expected to Impact Comparisons of Reported or Future Results

Same-restaurant Sales Trends

Applebee’s domestic system-wide same-restaurant sales increased 2.9% for the three months ended March 31, 2015 from the same period in 2014. This marks the fourth consecutive quarter of positive same-restaurant sales sequentially increasing over the previous quarter. The increase resulted from a higher average customer check partially offset by a slight decline in customer traffic. Same-restaurant sales performance for the first quarter of 2015 is not necessarily indicative of results expected for the full year.

IHOP’s domestic system-wide same-restaurant sales increased 4.8% for the three months ended March 31, 2015 from the same period in 2014, the eighth consecutive quarter of positive same-restaurant sales. The increase resulted from a higher average customer check and an increase in customer traffic, which increased for the third consecutive quarter. Same-restaurant sales performance for the first quarter of 2015 is not necessarily indicative of results expected for the full year.

Based on data from Black Box, during the three months ended March 31, 2015 customer traffic declined for the overall restaurant industry as well as for both the casual dining and family dining segments of the restaurant industry. During the first quarter of 2015, we experienced an increase in IHOP customer traffic and a slight decline in Applebee's customer traffic. In the short term, a decline in customer traffic may be offset by an increase in average customer check resulting from an increase in menu prices, a favorable change in product sales mix, or a combination thereof. A sustained decline in same-restaurant customer traffic that cannot be offset by an increase in average customer check could have an adverse effect on our business, results of operations and financial condition.

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We strive to identify and create opportunities for growth in customer traffic and frequency, average check and same-restaurant sales. We focus on building our brands with a long-term view through a strategic combination of menu, media, remodel and development initiatives to continually innovate and evolve both brands. To drive each brand forward, we will seek to innovate and remain actively focused on driving sustainable sales and traffic.

53rd Week in Fiscal 2015

We have a 52/53 week fiscal year that ends on the Sunday nearest to December 31 of each year. In a 52-week fiscal year, each fiscal quarter contains 13 weeks, comprised of two, four-week fiscal months followed by a five-week fiscal month. In a 53-week fiscal year, the last month of the fourth fiscal quarter contains six weeks. Our fiscal 2015, which began on December 29, 2014, will end on January 3, 2016 and will contain 53 weeks.

CONSOLIDATED RESULTS OF OPERATIONS
Comparison of the Three Months Ended March 31, 2015 and 2014 

 	 	 	 	 	 	 	 	 	 	 	 	 	
REVENUE	 	 	 	 	 	 	
 	 	Three Months Ended	 	Favorable
(Unfavorable) Variance	
 	 	March 31,	 	 	
 	 	2015	 	2014	 	 	
 	 	(In millions)	 	 	
Franchise operations	 	$	124.5	
 	 	$	115.5	
 	 	$	9.0	
 	
Rental operations	 	31.4	
 	 	30.7	
 	 	0.7	
 	
Company restaurant operations	 	17.3	
 	 	16.3	
 	 	1.0	
 	
Financing operations	 	2.6	
 	 	4.7	
 	 	(2.1	)	
Total revenue	 	$	175.8	
 	 	$	167.2	
 	 	$	8.6	
 	
Change vs. prior period	 	5.2	%	 	 	 	 	

 The improvement in total revenue compared with the prior year was primarily due to (i) higher IHOP advertising revenues resulting from an agreement with a large majority of franchisees to increase the advertising contribution as a percentage of gross sales, (ii) higher franchise and rental revenues that resulted from a 4.8% increase in IHOP domestic same-restaurant sales, (iii) a 2.9% increase in Applebee's domestic same-restaurant sales and (iv) IHOP restaurant development over the past twelve months. These favorable items were partially offset by a decline in financing revenues of $1.4 million associated with the early termination of two leases in the first quarter of 2014 that did not recur in 2015.

 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
GROSS PROFIT (LOSS)	 	 	 	 	 	 	
 	 	Three Months Ended	 	Favorable
(Unfavorable) Variance	
 	 	March 31,	 	 	
 	 	2015	 	2014	 	 	
 	 	(In millions)	
Franchise operations	 	$	89.0	
 	 	$	86.1	
 	 	$	2.9	
 	
Rental operations	 	7.9	
 	 	6.9	
 	 	1.0	
 	
Company restaurant operations	 	0.8	
 	 	(0.0	)	 	0.8	
 	
Financing operations	 	2.6	
 	 	4.1	
 	 	(1.5	)	
Total segment profit	 	$	100.3	
 	 	$	97.1	
 	 	$	3.2	
 	
Change vs. prior period	 	3.3	%	 	 	 	 	

The improvement in total gross profit compared to the prior year was primarily due to the increases in IHOP and Applebee's domestic same-restaurant sales and IHOP restaurant development that impacted revenue as discussed above, partially offset by the decline in financing revenues.

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Franchise Operations

 	 	Three Months Ended	 	Favorable
(Unfavorable) Variance	
 	 	March 31,	 	 	
 	 	2015	 	2014	 	 	
 	(In millions, except number of restaurants)	
Effective Franchise Restaurants:(1)	 	 	 	 	 	 	
Applebee’s	 	1,992	
 	 	1,985	
 	 	7	
 	
IHOP	 	1,637	
 	 	1,608	
 	 	29	
 	
Franchise Revenues:	 	 	
 	 	 	 	 	
Applebee’s	 	$	52.4	
 	 	$	50.7	
 	 	$	1.7	
 	
IHOP	 	45.4	
 	 	43.6	
 	 	1.8	
 	
IHOP advertising	 	26.7	
 	 	21.2	
 	 	5.5	
 	
Total franchise revenues	 	124.5	
 	 	115.5	
 	 	9.0	
 	
Franchise Expenses:	 	 	 	 	 	 	
Applebee’s	 	1.6	
 	 	1.4	
 	 	(0.2	)	
IHOP	 	7.2	
 	 	6.8	
 	 	(0.4	)	
IHOP advertising	 	26.7	
 	 	21.2	
 	 	(5.5	)	
Total franchise expenses	 	35.5	
 	 	29.4	
 	 	(6.1	)	
Franchise Segment Profit:	 	 	 	 	 	 	
Applebee’s	 	50.8	
 	 	49.3	
 	 	1.5	
 	
IHOP	 	38.2	
 	 	36.8	
 	 	1.4	
 	
Total franchise segment profit	 	$	89.0	
 	 	$	86.1	
 	 	$	2.9	
 	
Gross profit as % of revenue (2)	 	71.5	%	 	74.6	%	 	 	
 _____________________________________________________
(1) Effective Franchise Restaurants are the weighted average number of franchise and area license restaurants open in a given fiscal period, adjusted to account for restaurants open for only a portion of the period.
(2) Percentages calculated on actual amounts, not rounded amounts presented above.

Applebee’s franchise revenue for the three months ended March 31, 2015 increased 3.3% from the same period of the prior year due to a 2.9% increase in domestic same-restaurant sales and a 0.4% increase in the number of Effective Franchise Restaurants open during the period.

The 4.3% increase in IHOP franchise revenue (other than advertising) for the three months ended March 31, 2015 was primarily due to higher royalty revenues resulting from a 4.8% increase in domestic same-restaurant sales and a 1.8% increase in Effective Franchise Restaurants, partially offset by a decrease in licensing revenues.

IHOP’s franchise expenses are substantially higher than Applebee’s primarily due to advertising expenses. Franchise fees designated for IHOP’s national advertising fund and local marketing and advertising cooperatives are recognized as revenue and expense of franchise operations. However, because we have less contractual control over Applebee’s advertising expenditures, that activity is considered to be an agency relationship and therefore is not recognized as franchise revenue and expense. The increases in IHOP advertising revenue and expense for the three months ended March 31, 2015 were due to higher contributions to marketing funds by IHOP franchisees. Franchisee contributions to marketing funds can be impacted by changes in contribution rates, domestic franchise same-restaurant sales and the number of franchise restaurants.

Rental Operations

 	 	Three Months Ended	 	Favorable
(Unfavorable) Variance	
 	 	March 31,	 	 	
 	 	2015	 	2014	 	 	
 	 	(In millions)	
Rental revenues	 	$	31.4	
 	 	$	30.7	
 	 	$	0.7	
 	
Rental expenses	 	23.5	
 	 	23.8	
 	 	0.3	
 	
Rental operations segment profit	 	$	7.9	
 	 	$	6.9	
 	 	$	1.0	
 	
Gross profit as % of revenue (1)	 	25.2	%	 	22.4	%	 	 	
_____________________________________________________
(1) Percentages calculated on actual amounts, not rounded amounts presented above.

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Rental operations relate primarily to IHOP franchise restaurants. Rental income includes revenue from operating leases and interest income from direct financing leases. Rental expenses are costs of prime operating leases and interest expense on prime capital leases on certain franchise restaurants.

Rental segment revenue for the three months ended March 31, 2015 increased compared to the same period of the prior year primarily due to the favorable impact of the increase in IHOP same-restaurant sales on operating leases with sales-contingent rental provisions. Rental segment expenses decreased for the three months ended March 31, 2015 compared to the same period of the prior year primarily due to a decline in interest expense on capital lease obligations.
 
Financing Operations

 	 	Three Months Ended	 	Favorable
(Unfavorable) Variance	
 	 	March 31,	 	 	
 	 	2015	 	2014	 	 	
 	 	(In millions)	
Financing revenues	 	$	2.6	
 	 	$	4.7	
 	 	$	(2.1	)	
Financing expenses	 	0.0	
 	 	0.6	
 	 	0.6	
 	
Financing operations segment profit	 	$	2.6	
 	 	$	4.1	
 	 	$	(1.5	)	
Gross profit as % of revenue (1)	 	99.5	%	 	87.4	%	 	 	
_____________________________________________________
(1) Percentages calculated on actual amounts, not rounded amounts presented above.
 
All financing operations relate to IHOP franchise restaurants. Financing revenues primarily consist of interest income from the financing of equipment leases and franchise fees, as well as sales of equipment associated with refranchised IHOP restaurants. Financing expenses are primarily the cost of restaurant equipment associated with refranchised IHOP restaurants.

The decrease in financing revenue for the three months ended March 31, 2015 was primarily due to fees of $1.4 million associated with the negotiated early termination of two leases in the first quarter of 2014 that did not recur in 2015 and a decrease in interest revenue resulting from the progressive decline in note balances due to repayments. Also, there were no sales of equipment associated with refranchised IHOP restaurants during the three months ended March 31, 2015, which reduced both financing revenue and expense.

Company Restaurant Operations

As of March 31, 2015, company restaurant operations comprised 23 Applebee’s company-operated restaurants in the Kansas City market, 10 IHOP company-operated restaurants in the Cincinnati market and three IHOP restaurants reacquired from franchisees we are operating on a temporary basis until refranchised. For the three months ended March 31, 2015, revenue and segment profit from company restaurant operations increased $1.0 million and $0.8 million, respectively, compared to the same period of the prior year. The higher revenue was due to an increase in same-restaurant sales and an increase in the number of temporarily operated IHOP restaurants. The improvement in segment profit was primarily due to the increase in same-restaurant sales.

On April 20, 2015, we entered into an asset purchase agreement for the refranchising and sale of related restaurant assets of the 23 Applebee’s company-operated restaurants. The sale is expected to close in the fiscal third quarter of 2015.

OTHER EXPENSE AND INCOME ITEMS

 	 	Three Months Ended	 	Favorable
(Unfavorable) Variance	
 	 	March 31,	 	 	
 	 	2015	 	2014	 	 	
 	 	(In millions)	
General and administrative expenses	 	$	34.2	
 	 	$	34.2	
 	 	$	(0.0	)	
Interest expense	 	15.6	
 	 	25.0	
 	 	9.3	
 	
Amortization of intangible assets	 	2.5	
 	 	3.1	
 	 	0.6	
 	
Closure and impairment charges	 	1.8	
 	 	0.2	
 	 	(1.6	)	
(Gain) loss on disposition of assets	 	(0.0	)	 	0.9	
 	 	0.9	
 	
Income tax provision	 	17.7	
 	 	12.9	
 	 	(4.8	)	

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Interest Expense

Interest expense for the three months ended March 31, 2015 decreased by $9.3 million compared to the same period of the prior year. In the fourth quarter of 2014 we refinanced $1.225 billion principal amount of long-term debt that bore interest at a weighted average rate of approximately 7.3% with $1.3 billion principal amount of new long-term debt bearing interest at a fixed rate of 4.277%. Additionally, deferred financing costs associated with the new long-term debt were smaller than those associated with the old long-term debt, resulting in lower non-cash interest expense for the amortization of the deferred financing costs. These items were partially offset by a small increase in the principal amount of long-term debt outstanding.

Amortization of Intangible Assets

Amortization of intangible assets for the three months ended March 31, 2015 decreased compared to the same period of the prior year because assets that arose from the November 2007 acquisition of Applebee's that had an estimated useful life of seven years became fully amortized in November 2014.

Closure and Impairment Charges

Closure and impairment charges were $1.8 million for the three months ended March 31, 2015, comprised of $1.5 million in closure charges and $0.3 million of impairment charges. Approximately $1.1 million of closure charges related to two IHOP franchise restaurants closed during 2015, with approximately $0.4 million related to adjustments for IHOP and Applebee's restaurants closed in prior periods. There were no individually significant closure or impairment transactions for the three months ended March 31, 2014 

During the three months ended March 31, 2015, we performed assessments of whether events or changes in circumstances have occurred that potentially indicate the carrying value of tangible long-lived assets may not be recoverable. No significant impairments were noted in performing the assessments. We also considered whether there were any indicators of potential impairment to our goodwill and indefinite-lived intangible assets. No such indicators were noted.

Gain/Loss on Disposition of Assets
 
We recognized a gain on disposition of assets of less than $0.1 million for the three months ended March 31, 2015 compared to a loss of $0.9 million for the three months ended March 31, 2014. There were no individually significant dispositions during either of these periods.

Provision for Income Taxes
 
Our effective tax rate was 38.4% for the three months ended March 31, 2015, essentially unchanged from an effective rate of 38.2% for the three months ended March 31, 2014.
 
Liquidity and Capital Resources
 
At March 31, 2015, our outstanding long-term debt consisted of $1.3 billion of Series 2014-1 4.277% Fixed Rate Senior Notes, Class A-2 (the “Class A-2 Notes”). We also have a revolving financing facility consisting of Series 2014-1 Variable Funding Senior Notes Class A-1 (the “Variable Funding Notes”), which allows for drawings of up to $100 million of Variable Funding Notes and the issuance of letters of credit. The Class A-2 Notes and the Variable Funding Notes are referred to collectively as the “Notes.” The Notes were issued in a private securitization transaction pursuant to which substantially all of our domestic revenue-generating assets and our domestic intellectual property are held by certain special-purpose, wholly-owned indirect subsidiaries of the Company (the “Guarantors”) that act as guarantors of the Notes and that have pledged substantially all of their assets to secure the Notes.

While the Notes are outstanding, payment of principal and interest is required to be made on the Class A-2 Notes on a quarterly basis. The payment of principal on the Class A-2 Notes may be suspended when the leverage ratio for the Company and its subsidiaries is less than or equal to 5.25x. At March 31, 2015, our leverage ratio was 4.65x (see Exhibit 12.1).

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The Variable Funding Notes were undrawn upon at March 31, 2015 and we have not drawn on them since issuance. At March 31, 2015, $8.9 million was pledged against the Variable Funding Notes for outstanding letters of credit, leaving $91.1 million of Variable Funding Notes available for borrowings. The letters of credit are used primarily to satisfy insurance-related collateral requirements

The Notes are subject to customary rapid amortization events for similar types of financing, including events tied to our failure to maintain the stated debt service coverage (“DSCR”) ratio, the sum of domestic retail sales for all restaurants being below certain levels on certain measurement dates, certain manager termination events, certain events of default and the failure to repay or refinance the Notes on the Class A-2 Anticipated Repayment Date in September 2021. The Notes are also subject to certain customary events of default, including events relating to non-payment of required interest, principal or other amounts due on or with respect to the Notes, failure to maintain the stated debt service coverage ratio, failure to comply with covenants within certain time frames, certain bankruptcy events, breaches of specified representations and warranties and certain judgments.

Failure to maintain a prescribed DSCR ratio can trigger a Cash Trapping Event, A Rapid Amortization Event, a Manager Termination Event or a Default Event as described below. In a Cash Trapping Event, the Trustee is required to retain a certain percentage of cash flow in a restricted account. In a Rapid Amortization Event, all excess Cash Flow is retained and used to retire principal amounts of debt. Key DSCR ratios are as follows:

•DSCR less than 1.75x but equal to or greater than 1.50x - Cash Trapping Event, 50% of Net Cash Flow
•DSCR less than 1.50x - Cash Trapping Event, 100% of Net Cash Flow
•DSCR less than 1.30x - Rapid Amortization Event
•DSCR less than 1.20x - Manager Termination Event
•DSCR less than 1.10x - Default Event

Our DSCR for the reporting period ended March 31, 2015 was 4.95x (see Exhibit 12.1).

Dividends
 
During the three months ended March 31, 2015, we paid dividends on common stock of approximately $16.6 million, representing the dividend declared in the fourth quarter of 2014 of $0.875 per share of common stock. On February 24, 2015, our Board of Directors declared a first quarter 2015 cash dividend of $0.875 per share of common stock. This dividend was paid on April 10, 2015 to our stockholders of record at the close of business on March 13, 2015. We evaluate dividend payments on common stock within the context of our overall capital allocation strategy with our Board of Directors on an ongoing basis, giving consideration to our current and forecast earnings, financial condition, cash requirements and other factors.

Share Repurchases

In October 2014, our Board of Directors approved a stock repurchase authorization of up to $100 million of DineEquity common stock. Under this program, we may repurchase shares on an opportunistic basis from time to time in open market transactions and in privately negotiated transactions based on business, market, applicable legal requirements, and other considerations. The repurchase program does not require the repurchase of a specific number of shares and may be terminated at any time. During the three months ended March 31, 2015, we repurchased 140,096 shares of common stock at a cost of $15.0 million. As of March 31, 2015, we have repurchased a cumulative total of 160,431 shares of common stock under the current Board authorization at a total cost of $17.0 million. We may repurchase up to an additional $83.0 million of common stock under the current Board authorization. We evaluate repurchases of common stock within the context of our overall capital allocation strategy with our Board of Directors on an ongoing basis, giving consideration to our current and forecast earnings, financial condition, cash requirements and other factors.

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Cash Flows
 
In summary, our cash flows for the three months ended March 31, 2015 and 2014 were as follows:

 	 	 	 	 	 	 	 	 	 	 	 	
 	Three Months Ended	 	 	
 	March 31,	 	 	
 	2015	 	2014	 	Variance	
 	(In millions)	
Net cash provided by operating activities	$	41.1	
 	 	$	52.8	
 	 	$	(11.7	)	
Net cash provided by investing activities	1.8	
 	 	2.0	
 	 	(0.2	)	
Net cash used in financing activities	(13.4	)	 	(27.6	)	 	14.2	
 	
Net increase in cash and cash equivalents	$	29.5	
 	 	$	27.2	
 	 	$	2.3	

Operating Activities

Cash provided by operating activities for the three months ended March 31, 2015 decreased $11.7 million compared with the three months ended March 31, 2014. Net income for the three months ended March 31, 2015 increased compared to the same period of 2014, primarily due to lower interest expense resulting from the refinancing of our long-term debt in the fourth quarter of 2014 and an increase in gross profit, primarily due to increases in Applebee's and IHOP domestic same-restaurant sales and IHOP restaurant development over the past twelve months. However, net changes in working capital provided cash of $10.1 million during the first three months of 2015 compared to $28.7 million of cash provided during the first three months of 2014, an unfavorable variance of $18.6 million. This variance is primarily due to the timing of interest payments on long-term debt partially offset by marketing accruals. Our current long-term debt requires quarterly interest payments, whereas interest payments on a significant portion of our long-term debt outstanding during the first quarter of 2014 were required semi-annually in April and October.

Investing Activities
 
Investing activities provided net cash of $1.8 million for the three months ended March 31, 2015. Principal receipts from notes, equipment contracts and other long-term receivables of $4.4 million were partially offset by $2.6 million in capital expenditures. Capital expenditures are expected to be approximately $9 million for fiscal 2015.
 
Financing Activities
 
Financing activities used net cash of $13.4 million for the three months ended March 31, 2015. Cash used in financing activities primarily consisted of cash dividends on our common stock totaling $16.6 million, repurchases of our common stock totaling $15.0 million and repayments of capital lease and financing obligations of $3.2 million. Cash provided by financing activities primarily consisted of a decrease in restricted cash of $11.6 million and a net cash inflow of $9.8 million related to equity compensation awards.
 
Cash and Cash Equivalents

At March 31, 2015, our cash and cash equivalents totaled $133.5 million, including $66.4 million of cash held for gift card programs and advertising funds.

Based on our current level of operations, we believe that our cash flow from operations, available cash and available borrowing capacity under our Variable Funding Notes will be adequate to meet our liquidity needs for the next twelve months.

Free Cash Flow

We define “free cash flow” for a given period as cash provided by operating activities, plus receipts from notes and equipment contract receivables, less additions to property and equipment. We believe this information is helpful to investors to determine our cash available for general corporate purposes and for the return of cash to stockholders pursuant to our capital allocation strategy.

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Free cash flow is considered to be a non-U.S. GAAP measure. Reconciliation of the cash provided by operating activities to free cash flow is as follows:

 	Three Months Ended	 	 	
 	March 31,	 	 	
 	2015	 	2014	 	Variance	
 	(In millions)	
Cash flows provided by operating activities	$	41.1	
 	 	$	52.8	
 	 	$	(11.7	)	
Receipts from notes and equipment contracts receivable	2.6	
 	 	1.8	
 	 	0.8	
 	
Additions to property and equipment	(2.6	)	 	(2.0	)	 	(0.6	)	
Free cash flow	$	41.1	
 	 	$	52.6	
 	 	$	(11.5	)	
This non-U.S. GAAP measure is not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies. Non-U.S. GAAP measures should be considered in addition to, and not as a substitute for, the U.S. GAAP information contained within our financial statements.
The decline in free cash flow for the three months ended March 31, 2015 compared to the same period of the prior year is primarily due to the decrease in cash from operating activities discussed above.
Off-Balance Sheet Arrangements
 
As of March 31, 2015, we had no off-balance sheet arrangements, as defined in Item 303(a)(4) of SEC Regulation S-K.
 
Contractual Obligations and Commitments
 
There were no material changes to the contractual obligations table as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2014.
 
Critical Accounting Policies and Estimates
 
The preparation of financial statements in accordance with U.S. GAAP requires we make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net revenues and expenses in the reporting period. We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. We continually review the estimates and underlying assumptions to ensure they are appropriate for the circumstances. Accounting assumptions and estimates are inherently uncertain and actual results may differ materially from our estimates.
 
A summary of our critical accounting estimates is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2014. During the three months ended March 31, 2015, there were no significant changes in our estimates and critical accounting policies.
 
See Note 3, “Accounting Policies,” in the Notes to Consolidated Financial Statements for a discussion of recently adopted accounting standards and newly issued accounting standards.

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Item 3.  Quantitative and Qualitative Disclosures about Market Risk.
 
There were no material changes from the information contained in the Company’s Annual Report on Form 10-K as of December 31, 2014.

Item 4.  Controls and Procedures.
 
Disclosure Controls and Procedures.
 
The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective at the reasonable assurance level.
 
Changes in Internal Control Over Financial Reporting.
 
There have been no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II. OTHER INFORMATION
 
Item 1.  Legal Proceedings.
 
We are subject to various lawsuits, administrative proceedings, audits, and claims arising in the ordinary course of business. Some of these lawsuits purport to be class actions and/or seek substantial damages. We are required to record an accrual for litigation loss contingencies that are both probable and reasonably estimable. Legal fees and expenses associated with the defense of all of our litigation are expensed as such fees and expenses are incurred. Management regularly assesses our insurance deductibles, analyzes litigation information with our attorneys and evaluates our loss experience in connection with pending legal proceedings. While we do not presently believe that any of the legal proceedings to which we are currently a party will ultimately have a material adverse impact on us, there can be no assurance that we will prevail in all the proceedings we are party to, or that we will not incur material losses from them.

Item 1A.  Risk Factors.
 
There are no material changes from the risk factors set forth under Item 1A of Part I of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 	 	 	 	 	 	 	 	 	 	 	
Purchases of Equity Securities by the Company	
Period	 	Total number of
shares
purchased	 	Average price
paid per
share	 	Total number of
shares purchased as
part of publicly
announced plans or
programs (c)	 	Approximate dollar value of
shares that may yet be
purchased under the
plans or programs (c)	
December 29, 2014 – January 25, 2015 (a)	 	2,650	
 	 	$106.07	 	—	
 	 	$98,000,000	
January 26, 2015 – February 22, 2015	 	—	
 	 	—	 	—	
 	 	$98,000,000	
February 23, 2015 – March 29, 2015 (b)	 	164,785	
 	 	$107.30	 	140,096	
 	 	$83,000,000	
Total	 	167,435	
 	 	$107.29	 	140,096	
 	 	$83,000,000	
(a) These amounts represent shares owned and tendered by employees to satisfy tax withholding obligations arising upon vesting of restricted stock awards.
(b) These amounts include 24,689 shares owned and tendered by employees at an average price of $108.53 to satisfy tax withholding obligations arising upon vesting of restricted awards during the month ended March 29, 2015.
(c)  In October 2014, our Board of Directors approved a stock repurchase authorization of up to $100 million of our common stock. Repurchases are subject to prevailing market prices and may take place in open market transactions and in privately negotiated transactions, based on business, market, applicable legal requirements and other considerations. The program does not require the repurchase of a specific number of shares and may be terminated at any time.

Item 3.  Defaults Upon Senior Securities.
 
None.

Item 4.  Mine Safety Disclosures.
 
Not Applicable.

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Item 5.  Other Information.
 
None.
 
Item 6. Exhibits.

 	 	 	 	
3.1	
 	 	Restated Certificate of Incorporation of DineEquity, Inc. (Exhibit 99.3 to Registrant's Form 8-K filed on December 18, 2012 is incorporated herein by reference).	
3.2	
 	 	Amended Bylaws of DineEquity, Inc. (Exhibit 3.2 to Registrant's Form 8-K filed on June 2, 2008 is incorporated herein by reference).	
*†10.1	
 	 	Employment Agreement between DineEquity, Inc. and Darren M. Rebelez dated April 22, 2015.
	
*12.1	
 	 	Computation of Debt Service Coverage Ratio for the Trailing Twelve Months Ended March 31, 2015 and Leverage Ratio as of March 31, 2015.	
*31.1	
 	 	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.	
*31.2	
 	 	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.	
*32.1	
 	 	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**	
*32.2	
 	 	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**	
101.INS	
 	 	XBRL Instance Document.***	
101.SCH	
 	 	XBRL Schema Document.***	
101.CAL	
 	 	XBRL Calculation Linkbase Document.***	
101.DEF	
 	 	XBRL Definition Linkbase Document.***	
101.LAB	
 	 	XBRL Label Linkbase Document.***	
101.PRE	
 	 	XBRL Presentation Linkbase Document.***	

*    Filed herewith.
 	 	
**	The certifications attached as Exhibits 32.1 and 32.2 accompany this Quarterly Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.	
 	 	
***   	Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.	
 	 	
†	A contract, compensatory plan or arrangement in which directors or executive officers are eligible to participate.	

28

Table of Contents

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 	 	 	 	
 	 	DineEquity, Inc.
(Registrant)	 	

Dated:	April 30, 2015	By:	/s/ Julia A. Stewart	
 	 	 	Julia A. Stewart
Chairman and Chief Executive Officer
(Principal Executive Officer)	

Dated:	April 30, 2015	By:	/s/ Thomas W. Emrey	
 	 	 	Thomas W. Emrey
Chief Financial Officer
(Principal Financial Officer)	

Dated:	April 30, 2015	By:	/s/ Greggory Kalvin	
 	 	 	Greggory Kalvin
Senior Vice President, Corporate Controller
(Principal Accounting Officer)	

29

EXHIBIT 10.1

EMPLOYMENT AGREEMENT
This Employment Agreement (“Agreement”) is made effective as of April 22, 2015 by and between DineEquity, Inc., a Delaware corporation (the “ Corporation ”), and Darren M. Rebelez (the “ Executive ”).
WHEREAS, the Corporation desires to employ Executive on the terms and conditions set forth in this Agreement; and
WHEREAS, the Executive is willing to render services to the Corporation on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual terms and conditions hereof, the Corporation and the Executive hereby agree as follows:
1.    Employment.  The Corporation hereby employs the Executive and the Executive hereby accepts employment with the Corporation upon the terms and conditions hereinafter set forth.
2.    Exclusive Services.  The Executive shall devote all necessary working time, ability and attention to the business of the Corporation during the term of this Agreement and shall not, directly or indirectly, render any material services to any business, corporation, or organization whether for compensation or otherwise, without the prior knowledge and written consent of the Board of Directors of the Corporation (hereinafter referred to as the “ Board ”).  During the Employment Period, the Executive may  (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive’s responsibilities as an employee of the Corporation in accordance with this Agreement and any service on public company boards of directors is approved in advance by the Board. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Executive prior to the effective date of this Agreement, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the effective date of this Agreement shall not thereafter be deemed to interfere with the performance of the Executive’s responsibilities to the Corporation.
3.    Duties.  The Executive is hereby employed as the President, IHOP Business Unit (hereinafter referred to as the “President, IHOP”) of the Corporation and shall render services at the business office of the Corporation to which the Executive is assigned.  The Executive shall have such authority and shall perform such duties as are described in  Exhibit A  attached hereto.
4.    Term.  This Agreement shall have an initial term of three years commencing as of May 4, 2015 (the “ Start Date ”).  This Agreement will automatically renew at the end of the initial term and at the end of each subsequent term, for a subsequent term of one year unless either party gives written notice of non-renewal to the other at least 90 days prior to the

1

EXHIBIT 10.1

expiration of the then current term. Such notice may be given for any or no reason.   This Agreement is subject to earlier termination as hereinafter provided.
5.    Compensation.  As compensation for services rendered under this Agreement, the Executive shall be entitled to receive the following:
a.    Base Salary.  The Executive shall be paid a base salary of at least $575,000 per year, payable in 26 equal bi-weekly installments during the term of this Agreement, prorated for any partial employment month.  Such base salary (“ Base Salary ”) shall be reviewed by the Compensation Committee of the Board (the “ Compensation Committee ”) no less frequently than annually.  The Base Salary may be increased by the Compensation Committee in its discretion, subject to ratification by the Board.  The Base Salary may not be decreased, except in the event of an across the board salary reduction approved by the Board affecting employees of the Corporation at the Chief Officer Level (as defined in  Section 6(a) , below).
b.    Additional Compensation.  The Executive shall be paid such additional compensation and bonuses as may be determined and authorized in the discretion of the Compensation Committee, subject to ratification by the Board.  The Executive’s target bonus, to be payable under the Corporation’s annual incentive plan, shall be 75% of the Executive’s Base Salary.
6.    Benefits.  In addition to the compensation to be paid to the Executive pursuant to Section 5 hereof, the Executive shall further be entitled to receive the following:
a.    Participation in Employee Plans.  The Executive shall be entitled to participate in any health, disability, life insurance, pension, retirement, profit sharing, executive bonus, long term incentive, or deferred compensation plan or any other perquisites and fringe benefits that may be extended generally from time to time to employees of the Corporation at the Chief Officer Level.  For purposes of this Agreement, employees of the Corporation at the “ Chief Officer Level ” shall mean the Chief Executive Officer, the Chief Financial Officer, the President of Applebee’s, the President of IHOP, and such other employees of the Corporation as may from time to time be designated as being at the Chief Officer Level by the Board.
b.    Vacation.  The Executive shall be entitled to vacation in accordance with the Corporation’s vacation or paid time off policy as in effect from time to time for employees of the Corporation at the Chief Officer Level.
c.    Equity and Long-Term Incentive Awards.  The Executive shall be entitled to equity and other long-term incentive awards that may be extended generally from time to time to employees of the Corporation at the Chief Officer Level, as approved by the Compensation Committee or the Board, subject to the terms and conditions of the respective equity and long-term incentive compensation plans and award agreements and the provisions of this Agreement.

2

EXHIBIT 10.1

7.    Reimbursement of Expenses.  Subject to such rules and procedures as from time to time are specified by the Corporation, the Corporation shall reimburse the Executive for reasonable business expenses incurred in the performance of the Executive’s duties under this Agreement.
8.    Confidentiality/Trade Secrets.  The Executive acknowledges that the Executive’s position with the Corporation is one of the highest trust and confidence both by reason of the Executive’s position and by reason of the Executive’s access to and contact with the trade secrets and confidential and proprietary business information of the Corporation.  Both during the term of this Agreement and thereafter, the Executive covenants and agrees as follows:
a.    The Executive shall use best efforts and exercise reasonable diligence to protect and safeguard the trade secrets and confidential and proprietary information of the Corporation, including but not limited to any non-public strategies, business plans, marketing and advertising plans, the identity of its customers and suppliers, its arrangements with customers and suppliers, and its technical and financial data, records, compilations of information, processes, recipes and specifications relating to its customers, suppliers, products and services;
b.    The Executive shall not disclose any of such trade secrets and confidential and proprietary information, except as may be required in the course of the Executive’s employment with the Corporation or by law; and
c.    The Executive shall not use, directly or indirectly, for the Executive’s own benefit or for the benefit of another, any of such trade secrets and confidential and proprietary information.
All original and any copies of files, records, documents, emails, drawings, specifications, memoranda, notes, or other documents relating to the business of the Corporation, including printed, electronic or digital copies thereof, whether prepared by the Executive or otherwise coming into the Executive’s possession, shall be the exclusive property of the Corporation and shall be delivered to the Corporation and not retained by the Executive upon termination of the Executive’s employment for any reason whatsoever or at any other time upon request of the Corporation’s General Counsel or the Board.
9.  Discoveries.  The Executive covenants and agrees to fully inform the Corporation of and disclose to the Corporation all inventions, designs, improvements, discoveries, and processes (“ Discoveries ”) that the Executive has now or may hereafter have during the Executive’s employment with the Corporation and that pertain or relate to the business of the Corporation, including but not limited to the operation and franchising of restaurants, or to any experimental work, products, services, or processes of the Corporation in progress or planned for the future, whether conceived by the Executive alone or with others, and whether or not conceived during regular working hours or in conjunction with the use of any Corporation assets.  The Executive will hold in trust for the sole right and benefit of the Corporation, and will transfer, convey, release and assign to the Corporation all of the Executive’s right, title, and interest, if any, in and

3

EXHIBIT 10.1

to any and all Discoveries, whether or not patentable or registrable under copyright or similar laws, that the Executive has solely or jointly conceived or developed or reduced to practice, or caused to be conceived or developed or reduced to practice, during the period of time that the Executive is employed with the Corporation.

Notwithstanding the foregoing, the Executive is not required to assign, or offer to assign, to the Corporation any invention that fully qualifies under California Labor Code Section 2870, which section is reproduced below:
 	 	
“(a)	Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either:	

(1)	Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or	

(2)	Result from any work performed by the employee for the employer.	

(b)	To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.”	

The Executive will assist the Corporation, or its designee, at the Corporation’s expense, in every proper way to secure and enforce the Corporation’s rights in the Discoveries as set forth above and any copyrights, patents, mask work rights or other intellectual property rights relating thereto in any and all countries, including the disclosure to the Corporation of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments which the Corporation shall deem necessary in order to apply for, obtain and maintain such rights and in order to assign and convey to the Corporation, its successors, assigns and nominees the sole and exclusive rights, title and interest in and to such Discoveries, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto. The Executive will execute or cause to be executed, when it is in the Executive’s power to do so, any such instrument or papers shall continue after the termination of my employment. If the Corporation is unable because of the Executive’s mental or physical incapacity or for any other reason to secure the Executive’s signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Discoveries assigned to the Corporation as set forth above, then the Executive hereby irrevocably designates and appoints the Corporation and its duly authorized officers and agents as the

4

EXHIBIT 10.1

Executive’s agent and attorney in fact, to act for and in the Executive’s behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by the Executive.

10.    Non-Competition.  The Executive covenants and agrees that during the period of the Executive’s employment, the Executive shall not, without the prior written consent of the Chief Executive Officer of the Corporation (the “CEO”) and the Board, directly or indirectly, as an employee, employer, consultant, agent, principal, partner, shareholder, corporate officer, director, or through any other kind of ownership (other than ownership of securities of publicly held corporations of which the Executive owns less than 5% of any class of outstanding securities) or in any other representative or individual capacity, engage in or render any services to any business in North America engaged in the casual dining restaurant industry, the family dining restaurant industry, or in any other segment of the restaurant industry in which the Corporation or any subsidiary of the Corporation may have become involved after the date hereof and prior to the date of termination of the Executive’s employment.  For purposes of this Agreement “casual dining restaurant industry” consists of “sit down table service” restaurants serving alcoholic beverages, with a per guest average guest check within the United States of under $20.00 (adjusted upward each year to recognize Corporation menu price increases). For purposes of this Agreement “family dining restaurant industry” consists of “sit down table service” restaurants, with a per guest average guest check within the United States of under $15.00 (adjusted upward each year to recognize Corporation menu price increases).
11.    Non-Solicitation.  The Executive agrees that during the period of the Executive’s employment, and for a period of 24 months following the effective date of the termination of the Executive’s employment for any reason, the Executive will not, either directly or indirectly, for the Executive or for any third party, except as otherwise agreed to in writing by the then CEO, solicit, induce, recruit, or cause any other person who is then employed by the Corporation to terminate his/her employment for the purpose of joining, associating, or becoming employed with any business or activity that is engaged in the casual dining restaurant industry, the family dining restaurant industry or any other segment of the restaurant industry in which the Corporation may have become involved after the date hereof and prior to the date of any termination of employment.
12.    Remedies for Breach of Covenants of the Executive.
a.    The Corporation and the Executive specifically acknowledge and agree that the foregoing covenants of the Executive in  Sections 8, 9, 10 and 11  are reasonable in content and scope and are given by the Executive for adequate consideration.  The Corporation and the Executive further acknowledge and agree that, if any court of competent jurisdiction or other appropriate authority shall disagree with the parties’ foregoing agreement as to reasonableness, then such court or other authority shall reform or otherwise construe the foregoing covenants as reason dictates.

5

EXHIBIT 10.1

b.    The covenants set forth in Sections 8, 9, and 11 of this Agreement, as provided in Section 13 or 14 , shall continue to be binding upon the Executive, notwithstanding the termination of the Executive’s employment with the Corporation for any reason whatsoever.  Such covenants shall be deemed and construed as separate agreements independent of any other provisions of this Agreement and any other agreement between the Corporation and the Executive.  The existence of any claim or cause of action by the Executive against the Corporation, unless predicated on this Agreement, shall not constitute a defense to the enforcement by the Corporation of any or all such covenants.  It is expressly agreed that the remedy at law for the breach of any such covenant is inadequate and injunctive relief and specific performance shall be available to prevent the breach or any threatened breach thereof.

c.    If the Executive breaches any of the covenants set forth in Sections 8, 9, 10 and 11 of this Agreement, the Executive shall reimburse the Corporation for (i) any long-term incentive compensation received by the Executive from the Corporation during the 12-month period preceding the breach, and (ii) any profits realized from the sale of securities of the Corporation during such 12-month period.
13.    Termination.  This Agreement (other than Sections 8, 9, and 11, as provided in Section 13 or 14 , which shall survive any termination hereof for any reason, including the expiration hereof due to non-renewal (an “ Expiration ”)) may be terminated as follows:
a.    The Corporation may terminate this Agreement and the Executive’s employment hereunder at any time, with or without Cause, upon written notice to the Executive.  The Executive may terminate this Agreement and the Executive’s employment hereunder, at any time, with or without Good Reason.
b.    In the event of termination by the Corporation without Cause or by the Executive for Good Reason, which shall not include a termination due to the Executive’s death or Disability, (i) the effective date thereof shall be stated in a written notice from the Board or the Executive, as the case may be, to the other party, which in the case of a termination for Good Reason shall not be earlier than 30 days from the date such written notice is delivered, and (ii) the Executive shall be entitled to receive (1) within 10 business days following the effective date of such termination the payment of that portion of the Executive’s Base Salary accrued through the date of termination to the extent not previously paid, any annual bonus earned during the prior fiscal year but not yet paid to the Executive, any incurred but unreimbursed expenses owed to the Executive in accordance with the Corporation’s policy or this Agreement, and any accrued but unused vacation pay owed to the Executive in accordance with the Corporation’s policy (the “ Accrued Obligations ”) and (2) all amounts arising from the Executive’s participation in, or benefits under, any employee benefit plans, programs or arrangements, which amounts shall be payable in accordance with the terms and conditions of such employee benefit plans, programs or arrangements (the “ Other Benefits ”). In addition, subject to the Executive’s entering into and not revoking the General Release (the “ Release ”) set forth in  Exhibit B  attached hereto within 30 days after the effective date of termination

6

EXHIBIT 10.1

(i) the Executive shall be entitled to receive all Severance Payments under Section 13(g), (ii) other than with respect to any equity-based awards that are not considered by the Corporation to be an annual equity grant and are granted to the Executive in connection with the commencement of the Executive’s employment, any unvested stock options, stock appreciation rights, restricted stock awards, restricted stock units and any other equity-based awards held by the Executive that are subject only to service or time based vesting conditions (and not performance-based vesting conditions) and that would have vested during the 12-month period following the Executive’s termination will vest as of the day immediately preceding the effective date of termination, (iii) with respect to any equity-based awards granted to the Executive that are not considered by the Corporation to be an annual equity grant and are granted in connection with the commencement of the Executive’s employment, in the event that such termination occurs following the second anniversary of the Start Date, any unvested stock options, stock appreciation rights, restricted stock awards, restricted stock units and any other equity-based awards held by the Executive that are subject only to service or time based vesting conditions (and not performance-based vesting conditions) and that would have vested during the 12-month period following the Executive’s termination will vest as of the day immediately preceding the effective date of termination, (iv) any unvested equity-based or long-term cash-based awards held by the Executive that are subject to any performance-based vesting conditions shall become vested on a prorated basis, based on the portion of the performance period that has elapsed prior to the date of termination, determined in accordance with the Corporation’s administrative practices, and shall be paid at the time such award would have been paid to the Executive had he or she remained employed through the end of the applicable performance period, based on actual performance during such performance period, and (iv) any stock options or stock appreciation rights held by the Executive shall remain exercisable until the earlier of 24 months after the date of termination or their original expiration date. The Severance Payment under  Section 13(g)(i)  shall be made to the Executive within 30 days after the effective date of termination; provided that if such 30-day period straddles two consecutive calendar years, payment shall be made in the second of such years.
c. The Executive’s employment shall terminate automatically upon the Executive’s death. Upon the Disability of the Executive, the Corporation may give to the Executive written notice of its intention to terminate the Executive’s employment. In such event, the Executive’s employment with the Corporation shall terminate effective on the 30th day after receipt of such notice by the Executive (the “ Disability Effective Date ”), provided that, within the 30 days after such receipt, the Executive shall not have returned to perform, with or without reasonable accommodation, the essential functions of his or her position. For purposes of this Agreement, “ Disability ” shall mean the Executive’s inability to perform, with or without reasonable accommodation, the essential functions of his or her position hereunder for a period of 180 consecutive days (or 180 days within any period of 12 consecutive months) due to mental or physical incapacity, as determined by mutual agreement of a physician selected by the Corporation or its insurers and a physician selected by the Executive; provided, however, if the opinion of the Corporation’s physician and the Executive’s physician conflict, the Corporation’s physician and the Executive’s physician

7

EXHIBIT 10.1

shall together agree upon a third physician, whose opinion shall be binding. In the event the Executive’s employment terminates due to death or Disability, the Corporation shall pay to the Executive (i) the Accrued Obligations, (ii) the Other Benefits and (iii) an amount equal to the annual bonus payout for the Executive for such fiscal year based on actual Corporation performance for such fiscal year, prorated pursuant to the terms of the Corporation’s annual bonus plan and payable at the time the annual bonus would have been paid to the Executive had he or she remained employed through the end of such fiscal year.    
d. In the event of termination by the Corporation with Cause, the Executive shall be entitled to receive only the Accrued Obligations and Other Benefits. 
e.    The following shall constitute “Cause”:

(i)  The willful failure by the Executive to substantially perform the Executive’s duties with the Corporation (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the Executive by the Board, which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive’s duties; or

(ii)  The Executive’s willful misconduct that is demonstrably and materially injurious to the Corporation, monetarily or otherwise; or

(iii) The Executive’s commission of such acts of dishonesty, fraud, misrepresentation or other acts of moral turpitude as would prevent the effective performance of the Executive’s duties; or

(iv)  The Executive’s conviction or plea of no contest to a felony or a crime of moral turpitude.

For purposes of this subsection e., no act, or failure to act, on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without the reasonable belief that the Executive’s action or omission was in the best interest of the Corporation.  Notwithstanding the foregoing, the Executive shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of a majority of the non-employee members of the Board at a meeting of such members (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive’s counsel, to be heard before such members of the Board), finding that the Executive has engaged in the conduct set forth above in this  subsection e . and specifying the particulars thereof in detail.

8

EXHIBIT 10.1

f.    The Executive shall have “Good Reason” to effect a termination in the event that the Corporation (i) breaches its obligations to pay any salary, benefit or bonus due hereunder, or (ii) requires the Executive to relocate more than 50 miles from the Executive’s current, principal place of employment, (iii) assigns to the Executive any duties inconsistent with the Executive’s position with the Corporation or significantly and adversely alters the nature or status of the Executive’s responsibilities or the conditions of the Executive’s employment such as the Executive no longer reporting to the Chief Executive Officer of the Corporation, or (iv) reduces the Executive’s base salary and/or bonus opportunity, except for across-the-board reductions similarly affecting all management personnel of the Corporation and all management personnel of any corporation or other entity which is in control of the Corporation; and in the event of any of (i), (ii), (iii) or (iv), the Executive has given written notice to the Board as to the details of the basis for such Good Reason within 30 days following the date on which the Executive alleges the event giving rise to such Good Reason occurred, the Corporation has failed to provide a reasonable cure within 30 days after its receipt of such notice and the effective date of the termination for Good Reason occurs within 180 days after the initial existence of the facts or circumstances constituting Good Reason.  In the event of a termination by the Executive with Good Reason, the Executive will be entitled to all Severance Payments under  Section 13(g) .
g.    The “Severance Payments” consist of the following and, subject to subsection h. of Section 20 , shall be paid as follows:  (i) an amount, in one lump sum, equal to one times the sum of (A) the Executive’s annual Base Salary, at the then current effective annual rate, plus (B) the average of the Executive’s actual bonus attributable, as applicable, to the preceding fiscal year or each of the preceding two or three fiscal years in each case depending upon the Executive’s length of service; and (ii) the payment by the Corporation of premiums on behalf of the Executive, for coverage substantially similar to that provided under the Corporation’s health and life insurance plans, at the same cost to the Executive as was effective immediately prior to termination, and for so long as the Executive elects to continue such coverage up to a 12-month period.  To the extent that the Executive becomes covered under a health or life insurance plan maintained by a subsequent employer, the Executive shall cease to be covered under the same type of plan maintained by the Corporation.  The Executive agrees to notify the Corporation within 30 days after similar health or life benefits become available to the Executive from a subsequent employer. The Executive shall not be entitled to a prorated bonus pursuant to subsection b. of Section 5  for the year in which the Executive is terminated.
h.    In the event of any termination of the Executive other than by the Executive for Good Reason, by the Corporation without Cause or due to the Executive’s death or Disability, the Executive shall be entitled only to the Accrued Obligations and Other Benefits. In the event of any termination of the Executive, all amounts owed by the Executive to the Corporation for any reasons whatsoever will become immediately due and payable and the Corporation will transfer to the Executive any life insurance policy maintained by the Corporation for the Executive’s benefit.

9

EXHIBIT 10.1

i.    In the event of any termination of the Executive by the Executive for Good Reason or by the Corporation without Cause, the Corporation shall provide standard outplacement services at the expense of the Corporation, but not to exceed in total an amount equal to $10,000, from an outplacement firm selected by the Corporation. In order to receive outplacement services, the Executive must begin utilizing the services within 90 days of his or her date of termination.
j.    For purposes of clarity, in the event that the Executive’s employment is terminated upon or after the expiration of this Agreement, the Executive shall be entitled to the Accrued Obligation and shall be eligible for severance benefits as a Participant (as define therein) under the terms of the Corporation’s Amended and Restated Executive Severance and Change in Control Policy (or any successor plan or policy thereof).
14.    Change in Control and Termination Thereafter.  If within 3 months prior to or 24 months following a Change in Control, as defined below, that occurs during the term of his Agreement, the employment of the Executive is terminated by the Corporation without Cause or by the Executive for Good Reason, whether or not the termination occurs during the term of this Agreement, which shall not include a termination due to the Executive’s death or Disability, then the provisions of  Section 13  shall not apply and the following shall apply:
a.    The Executive shall be entitled to receive all Accrued Obligations and Other Benefits. In addition, subject to  subsection h. of Section 20  and subject to the Executive’s entering into and not revoking the Release within 30 days after the effective date of termination, the Executive shall receive the following: (i) a lump sum payment equal to two times the sum of (A) the Executive’s Base Salary in effect immediately prior to the Change in Control, plus (B) the average of the Executive’s actual bonus attributable, as applicable to the preceding fiscal year or each of the preceding two or three fiscal years, in each case depending upon the Executive’s length of service; and (ii) a lump sum payment equal to the bonus to which the Executive would have been entitled under the Corporation’s annual incentive plan for the then current fiscal year, determined based on actual performance for the full performance period, and prorated based on the portion of the performance period that has elapsed prior to the date of termination, determined in accordance with the Corporation’s administrative practices. The payment described in  clause (i) of this subsection a.  shall be made to the Executive within 30 days after the effective date of termination; provided that if such 30-day period straddles two consecutive calendar years, payment shall be made in the second of such years. The payment described in  clause (ii) of this subsection a.  shall be paid at the time the annual bonus would have been paid to the Executive had he or she remained employed through the last day of the applicable fiscal year.
b.    The Corporation shall pay premiums on behalf of the Executive, for coverage substantially similar to that provided under the Corporation’s health and life insurance plans, at the same cost to the Executive as was effective immediately prior to termination, and for so long as the Executive elects to continue such coverage up to a 24 month period.  To the extent that the Executive becomes covered under a health or life

10

EXHIBIT 10.1

insurance plan maintained by a subsequent employer, the Executive shall cease to be covered under the same type of plan maintained by the Corporation.  The Executive agrees to notify the Corporation within 30 days after similar health or life benefits become available to the Executive from a subsequent employer.
c.    Any unvested stock options, stock appreciation rights, restricted stock awards, restricted stock units, and other equity-based awards held by the Executive that are subject only to service or time based vesting conditions (and not performance-based vesting conditions) will vest as of the day immediately preceding the effective date of termination and, to the extent applicable, will become exercisable, and any restrictions or conditions on such equity-based awards shall immediately lapse and be deemed satisfied. Any stock options or stock appreciation rights held by the Executive shall remain exercisable until the earlier of 24 months after the date of termination or their original expiration date.
Upon the occurrence of a Change in Control, the Executive shall, with respect to all outstanding, unvested performance units and any other equity-based and long-term cash-based compensation awards subject to performance-based vesting criteria that are held by the Executive immediately prior to the Change in Control, be deemed to have satisfied any performance-based vesting criteria based on the Corporation’s actual performance through the date of the Change in Control, and following the Change in Control any such awards shall continue to vest based upon the time or service-based vesting criteria, if any, to which the award is subject. If the Executive’s employment terminates in accordance with the terms and conditions of this Section 14(c) after a Change in Control, such performance-based awards shall become immediately and fully vested, and shall be paid to the Executive not later than 30 days after the date of such termination.
d.    The Executive shall be bound by the non-solicitation provisions of Section 11, which shall remain in full force and effect for a period of 24 months following the effective date of the Executive’s termination.
e.    If the Executive dies after signing the Release and prior to receiving Severance Payments to which he or she is entitled pursuant to this Agreement, payment shall be made to the beneficiary designated by the Executive to the Corporation or, in the event of no designation of beneficiary, then to the estate of the deceased Executive.
15.    Definition of Change in Control.  A “Change in Control” shall be deemed to have occurred if:
a.    any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities and Exchange Act of 1934, as amended (the “ Exchange Act ”) (other than the Corporation; any trustee or other fiduciary holding securities under an employee benefit plan of the Corporation; or any Corporation owned, directly or indirectly, by the stockholders of the Corporation in substantially the same proportions as their ownership of Stock of the Corporation) is or becomes after the Effective Date the “beneficial

11

EXHIBIT 10.1

owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Corporation (not including in the securities beneficially owned by such person any securities acquired directly from the Corporation or its affiliates) representing 35% or more of the combined voting power of the Corporation’s then outstanding securities; or
b.    during any period of two consecutive years (not including any period prior to the Effective Date), individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Corporation to effect a transaction described in  subsections a., c. or d. of this Section 15)  whose election by the Board or nomination for election by the Corporation’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof; or
c.    the consummation of a merger or consolidation of the Corporation with any other corporation, other than (A) a merger or consolidation which would result in the voting securities of the Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Corporation, at least 75% of the combined voting power of the voting securities of the Corporation or such surviving entity outstanding immediately after such merger or consolidation or (B) a merger or consolidation effected to implement a recapitalization of the Corporation (or similar transaction) in which no person acquires more than 50% of the combined voting power of the Corporation’s then outstanding securities; or
d.    the stockholders of the Corporation approve a plan of complete liquidation of the Corporation or an agreement for the sale or disposition by the Corporation of all or substantially all of the Corporation’s assets;
provided, that with respect to any non-qualified deferred compensation that becomes payable on account of the Change in Control, the transaction or event described in  subsection a., b., c. or d.  also constitutes a “change in control event,” as defined in Treasury Regulation §1.409A-3(i)(5) if required in order for the payment not to violate Section 409A of the Code.
16.    Parachute Payment Matters.
Notwithstanding any other provision of this Agreement, if by reason of Section 280G of the Code any payment or benefit received or to be received by the Executive in connection with a Change in Control or the termination of the Executive’s employment (whether payable pursuant to the terms of this Agreement (“ Contract Payments ”) or any other plan, arrangements or agreement with the Corporation or an Affiliate (as defined below) (collectively with the Contract Payments, “ Total Payments ”)) would not be deductible (in whole or part) by the Corporation, an Affiliate or other person making such payment or providing such benefit, then

12

EXHIBIT 10.1

the Contract Payments shall be reduced and, if Contract Payments are reduced to zero, other Total Payments shall be reduced (in the reverse order in which they are due to be paid) until no portion of the Total Payments is not deductible by reason of Section 280G of the Code, provided, however, that no such reduction shall be made unless the net after-tax benefit received by the Executive after such reduction would exceed the net after-tax benefit received by the Executive if no such reduction was made.  The foregoing determination and all determinations under this  Section 16  shall be made by the Accountants (as defined below).  For purposes of this  Section 16 , “net after-tax benefit” shall mean (i) the Total Payments that would constitute “parachute payments” within the meaning of Section 280G of the Code, less (ii) the amount of all federal, state and local income taxes payable with respect to such payments calculated at the maximum marginal income tax rate for each year in which the foregoing shall be paid to the Executive (based on the rate in effect for such year as set forth in the Code as in effect at the time of the first payment of the foregoing), less (iii) the amount of excise taxes imposed with respect to the payments and benefits described in (i) above by Section 4999 of the Code.  For purposes of the foregoing determinations, (a) no portion of the Total Payments the receipt or enjoyment of which the Executive shall have effectively waived in writing prior to the date of payment of any Contract Payment shall be taken into account; (b) no portion of the Total Payments shall be taken into account which in the opinion of the Accountants does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (without regard to subsection (A)(ii) thereof); (c) the Contract Payments (and, thereafter, other Total Payments) shall be reduced only to the extent necessary so that the Total Payments in their entirety constitute reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of the Code, in the opinion of the Accountants;  and (d) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments shall be determined by the Accountants in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.  For purposes of this  Section 16 , the term “ Affiliate ” means the Corporation’s successors, any Person whose actions result in a Change in Control or any company affiliated (or which, as a result of the completion of the transactions causing a Change in Control shall become affiliated) with the Corporation within the meaning of Section 1504 of the Code and “ Accountants ” shall mean the Corporation’s independent certified public accountants serving immediately prior to the Change in Control, unless the Accountants are also serving as accountant or auditor for the individual, entity or group effecting the Change in Control, in which case the Corporation shall appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accountants hereunder).  For purposes of making the determinations and calculations required herein, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code, provided that the Accountant’s determinations must be made on the basis of  “substantial authority” (within the meaning of Section 6662 of the Code).  All fees and expenses of the Accountants shall be borne solely by the Corporation.
17.    Arbitration of Disputes.
a.    Any dispute or claim arising out of or relating to this Agreement or any termination of the Executive’s employment, other than with respect to  Sections 8

13

EXHIBIT 10.1

through 12, shall be settled by final and binding arbitration in the greater Los Angeles metropolitan area in accordance with the Commercial Arbitration rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.
b.    Except as provided by applicable law, the fees and expenses of the arbitration panel shall be shared equally by the Executive and the Corporation.
c.    Except as provided by applicable law, the prevailing party in any arbitration brought hereunder shall be entitled to an award of its costs (including expenses and attorneys’ fees), incurred in such arbitration.
18.    No Mitigation.  The Executive shall have no duty to attempt to mitigate the level of benefits payable by the Corporation to the Executive hereunder, by seeking other employment or otherwise.  To the extent that the Executive becomes covered under a health or life insurance plan maintained by a subsequent employer, the Corporation will discontinue the Executive’s coverage; otherwise, the Corporation shall not be entitled to set off against the amounts payable hereunder any amounts received by the Executive from any other source, including any subsequent employer.
19.    Notices.  Any notices to be given hereunder by either party to the other may be effected either by personal delivery in writing or by mail, registered or certified, postage prepaid, with return receipt requested.  Mailed notices shall be addressed as follows: 

a.	If to the Corporation:	
 	 	
 	DineEquity, Inc.	
 	450 N. Brand Boulevard	
 	Glendale, CA 91410	
 	Attn: General Counsel	
 	 	
b.	If to the Executive:
	
 	Darren M. Rebelez
4744 Byron Circle
Irving, TX 75038	

Either party may change its address for notice by giving notice in accordance with the terms of this Section 19 .

20.    General Provisions.

14

EXHIBIT 10.1

a.    Law Governing.  This Agreement shall be governed by, and construed and enforced in accordance with, the internal laws of the State of California, without regard to its conflict of laws rules.
b.    Invalid Provisions.  If any provision of this Agreement is held to be illegal, invalid, or unenforceable, then such provision shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part hereof; and the remaining provisions hereof shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance here from.  Furthermore, in lieu of such illegal, invalid, or unenforceable provision there shall be added automatically as a part of this Agreement a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and still be legal, valid or enforceable.
c.    Entire Agreement.  With the exception of that certain offer letter addressed to the Executive dated April 16, 2015, the General Release of Claims ( Exhibit B ) executed as a condition to receiving certain separation benefits hereunder, and all equity award agreements, this Agreement sets forth the entire understanding of the parties and supersedes all prior agreements or understandings, whether written or oral, with respect to the subject matter hereof and all agreements, acknowledgments, designations and directions of the Executive made or given under any Corporation policy statement or benefit program.  No terms, conditions, warranties, other than those contained herein, and no amendments or modifications hereto shall be binding unless made in writing and signed by the parties hereto.
d.    Binding Effect.  This Agreement shall extend to and be binding upon and inure to the benefit to the parties hereto, their respective heirs, representatives, successors and assigns.  This Agreement may not be assigned by the Executive, but may be assigned by the Corporation to any person or entity that succeeds to the ownership or operation of the business in which the Executive is primarily employed by the Corporation.
e.    Waiver.  The waiver by either party hereto of a breach of any term or provision of this Agreement shall not operate or be construed as a waiver of a subsequent
breach of the same provision by any party or of the breach of any other term or provision of this Agreement.
f.    Titles.  Titles of the paragraphs herein are used solely for convenience and shall not be used for interpretation or construing any work, clause, paragraph, or provision of this Agreement.
g.    Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but which together shall constitute one and the same instrument.
h.    Compliance with IRC Section 409A.   The following provisions shall apply to this Agreement with respect to Section 409A of the Code:

15

EXHIBIT 10.1

(i) The lump sum cash severance payments which are payable under clause (i) of subsection g. of Section 13 and subsection a. of Section 14.  are intended to satisfy the short-term deferral exemption under Treasury Regulation Section 1.409A-1(b)(4) and shall be made not later than the last day of the applicable two and one-half month period with respect to such payment, within the meaning of Treasury Regulation Section 1.409A-1(b)(4).

(ii)  If any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause the Executive to incur any additional tax or interest under Section 409A of the Code or any regulations or Treasury guidance promulgated thereunder, the Corporation shall, after consulting with the Executive, reform such provision to comply with Section 409A of the Code, provided that the Corporation agrees to maintain, to the maximum extent practicable, the original intent and economic benefit the Executive of the applicable provision without violating the provisions of Section 409A of the Code.

(iii)  Notwithstanding any provision to the contrary in this subsection h., if Executive is deemed on the Termination Date to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B) of the Code, then with regard to any payment or the provision of any benefit that is required to be delayed in compliance with Section 409A(a)(2)(B) of the Code such payment or benefit shall not be made or provided (subject to the last sentence hereof) prior to the earlier of (A) the expiration of the six-month period measured from the date of the Executive’s “separation from service” (as such term is defined under Section 409A of the Code) or (B) the date of the Executive’s death (the “ Delay Period ”).  Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this  subsection h . (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed the Executive in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.  Notwithstanding the foregoing, to the extent that the foregoing applies to the provision of any ongoing welfare benefits to the Executive that would not be required to be delayed if the premiums therefore were paid by Executive, the Executive shall pay the full cost of premiums for such welfare benefits during the Delay Period and the Corporation shall pay the Executive an amount equal to the amount of such premiums paid by the Executive during the Delay Period promptly after its conclusion.

i.Withholding.  The Corporation may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulations.

16

EXHIBIT 10.1

IN WITNESS WHEREOF, the Corporation and the Executive have executed this Agreement as of the date and year first above written.
THIS AGREEMENT CONTAINS AN ARBITRATION CLAUSE.

 	
 	 	 	 	
EXECUTIVE:	DineEquity, Inc.:	

By:   /s/ Darren M. Rebelez   	 	By:	    /s/ John B. Jakubek      	
  Darren M. Rebelez	  John B. Jakubek	

 	 	 	 	

17

EXHIBIT 10.1

Exhibit A

Executive’s Authorities and Duties

During the Employment Period, the Executive will serve as President, IHOP, reporting directly to the Chief Executive Officer of the Corporation, with duties, authorities and responsibilities commensurate with such title and office at the Corporation and the Executive’s services shall be performed at the Corporation’s restaurant service center in Glendale, California.

A-1

EXHIBIT 10.1

Exhibit B

General Release

1.General Release by Executive.    In consideration of the benefits provided under Section 13 or 14, as applicable of the Employment Agreement by and between [Executive Name] (“ Executive ”)and DineEquity, Inc., a Delaware corporation, and subject to  Section 2  below, Executive hereby releases and discharges forever the Corporation, and each of its divisions, affiliates and subsidiaries, and each of their present and former directors, officers, employees, trustees, agents, attorneys, administrators, plans, plan administrators, insurers, parent corporations, subsidiaries, divisions, related and affiliated companies and entities, shareholders, members, representatives, predecessors, successors and assigns, and all persons acting by, through, under or in concert with them (hereinafter collectively referred to as the “ Executive Released Parties ”), from and against all liabilities, claims, demands, liens, causes of action, charges, suits, complaints, grievances, contracts, agreements, promises, obligations, costs, losses, damages, injuries, attorneys’ fees, and other legal responsibilities (collectively referred to as “ Claims ”), of any form whatsoever, including, but not limited to, any claims in law, equity, contract, tort, or any claims under the California Labor Code, the California Civil Code, the California Business and Professions Code, the California Fair Employment and Housing Act, Title VII of the Civil Rights Act of 1964, as amended, the Americans With Disabilities Act, the Age Discrimination in Employment Act (“ ADEA ”), as amended by the Older Workers Benefit Protection Act of 1990 (29 U.S.C. §§ 621,  et seq. ), the Sarbanes-Oxley Act of 2002, the Employee Retirement Income Security Act of 1974, or any other local ordinance or federal or state statute, regulation or constitution,  whether known or unknown, unforeseen, unanticipated, unsuspected or latent , which Executive or Executive’s successors in interest now own or hold, or have at any time heretofore owned or held, or may at any time own or hold by reason of any matter or thing arising from any cause whatsoever prior to the date of execution of this Agreement, and without limiting the generality of the foregoing, from all claims, demands and causes of action based upon, relating to, or arising out of: (a) Executive’s employment relationship with the Corporation and/or any of the Executive Released Parties and the termination of that relationship; (b) Executive’s relationship as a shareholder, optionholder or holder of any interest whatsoever in any of the Executive Released Parties; and (c) Executive’s relationship with any of the Executive Released Parties as a member of any boards of directors.
2.    Exclusions from General Release.    Notwithstanding the generality of Section 1, Executive does not release the following claims and rights:
 	 	
(a)	Executive’s rights under this Agreement;	
 	 	
(a)	Executive’s rights as a shareholder and option holder in the Corporation arising after the date hereof;	
 	 	
(b)	any claims for unemployment compensation or any state disability insurance benefits pursuant to the terms of applicable state law;	

B-1

EXHIBIT 10.1

(c)	claims to continued participation in certain of the Corporation’s group benefit plans pursuant to the terms and conditions of the federal law known as COBRA or the comparable California law known as Cal-COBRA;	
 	 	
(d)	any rights vested prior to the date of Executive’s termination of employment to benefits under any Corporation-sponsored retirement or welfare benefit plan;	
 	 	
(e)	Executive’s rights, if any, to indemnity and/or advancement of expenses pursuant to applicable state law, the Corporation’s articles, bylaws or other corporate governance documents, that certain Indemnification Agreement effective as of May 4, 2015 and/or to the protections of any director’ and officers’ liability policies of the Corporation or any of its affiliates; and	
 	 	
(f)	any other right that may not be released by private agreement.	
 	 	
a.	(collectively, the “Executive Unreleased Claims” ).	

3.    Rights Under the ADEA.    Without limiting the scope of the foregoing release of Claims in any way, Executive certifies that this release constitutes a knowing and voluntary waiver of any and all rights or claims that exist or that Executive has or may claim to have under ADEA. This release does not govern any rights or claims that might arise under the ADEA after the date this Agreement is signed by the parties. Executive acknowledges that: (a) the consideration provided pursuant to this Agreement is in addition to any consideration that he would otherwise be entitled to receive; (b) he has been and is hereby advised in writing to consult with an attorney prior to signing this Agreement; (c) he has been provided a full and ample opportunity to review this Agreement, including a period of at least 21 days within which to consider it; (d) to the extent that Executive takes less than 21 days to consider this Agreement prior to execution, Executive acknowledges that he had sufficient time to consider this Agreement with counsel and that he expressly, voluntarily and knowingly waives any additional time; and (e) Executive is aware of his right to revoke this Agreement at any time within the seven-day period following the date on which he executes the Agreement and that the Agreement shall not become effective or enforceable until the calendar day immediately following the expiration of the seven-day revocation period (the “ Effective Date ”). Executive further understands that he shall relinquish any right he has to the consideration specified in this Agreement if he exercises his right to revoke it, and shall instead receive only such consideration as provided in his Employment Agreement. Notice of revocation must be made in writing and must be received by the Senior Vice President, Human Resources of the Corporation, no later than 5:00 p.m. (Pacific Time) on the seventh calendar day immediately following the date on which Executive executes this Agreement.
4.    Unknown Claims.    It is further understood and agreed that Executive waives all rights under Section 1542 of the California Civil Code and/or any statute or common law principle of similar effect in any jurisdiction with respect to any Claims other than the Executive Unreleased Claims. Section 1542 reads as follows:

B-2

EXHIBIT 10.1

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”
Notwithstanding the provisions of Section 1542 or any statute or common law principle of similar effect in any jurisdiction, and for the purpose of implementing a full and complete release and discharge of all claims, Executive expressly acknowledges that this Agreement is intended to include in its effect, without limitation, all claims which Executive does not know or suspect to exist in Executive’s favor at the time of execution hereof, and that the general release agreed upon contemplates the extinguishment of any such claims.
5.    Covenant Not To Sue.    Executive represents and covenants that he has not filed, initiated or caused to be filed or initiated, any Claim, charge, suit, complaint, grievance, action or cause of action against the Corporation or any of the Executive Released Parties. Except to the extent that such waiver is precluded by law, Executive further promises and agrees that he will not file, initiate, or cause to be filed or initiated any Claim, charge, suit, complaint, grievance, action, or cause of action based upon, arising out of, or relating to any Claim, demand, or cause of action released herein, nor shall Executive participate, assist or cooperate in any Claim, charge, suit, complaint, grievance, action or proceeding regarding any of the Executive Released Parties, whether before a court or administrative agency or otherwise, unless required to do so by law. The parties acknowledge that this Agreement will not prevent the Executive from filing a charge with the Equal Employment Opportunity Commission (or similar state agency) or participating in any investigation conducted by the Equal Employment Opportunity Commission (or similar state agency);  provided ,  however , that Executive acknowledges and agrees that any Claims by Executive, or brought on his behalf, for personal relief in connection with such a charge or investigation (such as reinstatement or monetary damages) would be and hereby are barred.
6.    No Assignment.    Executive represents and warrants that he has made no assignment or other transfer, and covenants that he will make no assignment or other transfer, of any interest in any Claim which he may have against the Executive Released Parties, or any of them.
7.    Indemnification of Executive Released Parties.    Executive agrees to indemnify and hold harmless the Executive Released Parties, and each of them, against any loss, claim, demand, damage, expenses, or any other liability whatsoever, including reasonable attorneys’ fees and costs resulting from: (a) any breach of this release by Executive or Executive’s successors in interest; (b) any assignment or transfer, or attempted assignment or transfer, of any Claims released hereunder; or (c) any action or proceeding brought by Executive or Executive’s successors in interest, or any other, if such action or proceeding arises out of, is based upon, or is related to any Claims, demands, or causes of action released herein;  provided ,  however , that this indemnification provision shall not apply to any challenge by Executive of the release of claims under the ADEA, Title VII, or similar discrimination laws, and any right of the Release Parties to recover attorneys’ fees and/

B-3

EXHIBIT 10.1

or expenses for such breach shall be governed by applicable law. It is the intention of the parties that this indemnity does not require payment as a condition precedent to recovery by any of the Executive Released Parties under this indemnity.
8.    Non-Disparagement by Executive.    Executive agrees not to publish or disseminate, directly or indirectly, any statements, whether written or oral, or other verbal or non-verbal communications that clearly communicate an affirmative or negative response to a question or statement, that are or could be harmful to or reflect negatively on any of the Executive Released Parties and/or their businesses, or that are otherwise disparaging of any of the Executive Released Parties and/or their businesses, or any of their past or present or future officers, directors, employees, advisors, or agents in their capacity as such, or any of their policies, procedures, practices, decision-making, conduct, professionalism or compliance with standards. For avoidance of doubt, statements by Executive, which Executive reasonably and in good faith believes to be accurate and truthful, made to the Corporation, or its subsidiaries, affiliates or representatives pursuant to Executive's obligations under  Section 10  hereof shall not be deemed a violation of this  Section 8 . The Chief Executive Officer and the Senior Vice President, Human Resources of the Corporation agree not to publish or disseminate, directly or indirectly, any statements, whether written or oral, or other verbal or non-verbal communications that clearly communicate an affirmative or negative response to a question or statement, that are or could be harmful to or reflect negatively on the Executive, or that are otherwise disparaging of the Executive. For avoidance of doubt, statements by the Chief Executive Officer or the Senior Vice President, Human Resources, which the Chief Executive Officer or the Senior Vice President, Human Resources reasonably and in good faith believes to be accurate and truthful, made pursuant to their obligations under  Section 10  hereof shall not be deemed a violation of this  Section 8 .
9.    Cooperation.    Executive agrees to cooperate fully with the Corporation and its subsidiaries and affiliates in transitioning his duties in response to reasonable requests for information about the business of the Corporation or its subsidiaries or affiliates or Executive’s involvement and participation therein; the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Corporation or its subsidiaries or affiliates which relate to event or occurrences that transpired while Executive was employed by the Corporation; and in connection with any investigation or review by any federal, state or local regulatory, quasi-regulatory or self-governing authority (including, without limitation, the Securities and Exchange Commission) as any such investigation or review relates to events or occurrences that transpired while Executive was employed by the Corporation. Executive’s full cooperation shall include, but not be limited to, being available to meet and speak with officers or employees of the Corporation and/or its counsel at reasonable times and locations, executing accurate and truthful documents, appearing at the Corporation’s reasonable request as a witness at depositions, trials or other proceedings without the necessity of a subpoena, and taking such other actions as may reasonably be requested by of the Corporation and/or its counsel to effectuate the foregoing. In requesting such services, the Corporation will consider other commitments that Executive may have at the time of the request, and Executive’s availability and obligations under this Section shall in all instances reasonably be subject to Executive’s other commitments. The Corporation agrees to reimburse Executive for any reasonable, out-of-pocket travel, hotel and meal expenses incurred in connection with Executive’s performance of obligations pursuant to this

B-4

EXHIBIT 10.1

Section for which Executive has obtained prior, written approval from the Corporation, and the Corporation shall pay Executive $200.00 per hour for any services performed by Executive at the request of the Corporation pursuant to this  Section 9 .
10.    Truthful Testimony; Notice of Request for Testimony.    Nothing in this Agreement is intended to or shall preclude either party from providing testimony that such party reasonably and in good faith believes to be truthful in response to a valid subpoena, court order, regulatory request or other judicial, administrative or legal process or otherwise as required by law. If legally permitted to do so, Executive shall notify the Corporation in writing as promptly as practicable after receiving any such request of the anticipated testimony and at least 10 days prior to providing such testimony (or, if such notice is not possible under the circumstances, with as much prior notice as is possible) to afford the Corporation a reasonable opportunity to challenge the subpoena, court order or similar legal process. Moreover, nothing in this Agreement shall be construed or applied so as to limit any person from providing candid statements that such party reasonably and in good faith believes to be truthful to any governmental or regulatory body or any self-regulatory organization.
DATE                        EXECUTIVE

__________________            ____________________________

B-5

Exhibit 12.1
DINEEQUITY, INC.
Computation of Debt Service Coverage Ratio for the Trailing Twelve Months Ended March 31, 2015 and Leverage Ratio as of March 31, 2015.
(In thousands, except ratios)

Leverage Ratio Calculation:	 	
Indebtedness, net (1)	$	1,296,273	
 	
Covenant Adjusted EBITDA(1)	278,933	
 	
Leverage Ratio	4.65	
 	
Debt Service Coverage Ratio (DSCR) Calculation:	 	
Net Cash Flow (1)	$	280,827	
 	
Debt Service (1)	56,785	
 	
DSCR	4.95	

 	 	
(1) 	Definitions of all components used in calculating the above ratios are found in the Base Indenture and the related Series 2014-1 Supplement to the Base Indenture, dated September 30, 2014, filed as Exhibits 4.1 and 4.2, respectively, to our Current Report on Form 8-K filed on October 3, 2014.	

Exhibit 31.1
 
Certification Pursuant to
Rule 13a-14(a) of the
Securities Exchange Act of 1934, As Amended
 
I, Julia A. Stewart, certify that:
 
1.                                     I have reviewed this Quarterly Report on Form 10-Q of DineEquity, Inc.;
 
2.                                     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.                                     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.                                     The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
(a)                                Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
(b)                                Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
(c)                                 Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
(d)                                Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.                                     The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
(a)                                All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
(b)                                Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 	 	 	
Dated:	April 30, 2015	/s/ Julia A. Stewart	
 	 	Julia A. Stewart
Chairman and Chief Executive Officer
(Principal Executive Officer)	

Exhibit 31.2
 
Certification Pursuant to
Rule 13a-14(a) of the
Securities Exchange Act of 1934, As Amended
 
I, Thomas W. Emrey, certify that:
 
1.                                     I have reviewed this Quarterly Report on Form 10-Q of DineEquity, Inc.;
 
2.                                     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.                                     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.                                     The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
(a)                                Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
(b)                                Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
(c)                                 Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
(d)                                Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.                                     The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
(a)                                All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
(b)                                Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 	 	 	
Dated:	April 30, 2015	/s/ Thomas W. Emrey	
 	 	Thomas W. Emrey Chief Financial Officer
(Principal Financial Officer)	

Exhibit 32.1
 
Certification Pursuant to
18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
 
In connection with the Quarterly Report on Form 10-Q of DineEquity, Inc. (the “Company”) for the quarter ended March 31, 2015, as filed with the Securities and Exchange Commission on April 30, 2015 (the “Report”), Julia A. Stewart, as Chairman and Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of her knowledge, that:
 
(1)                     The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
 
(2)                     The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 	 	 	
Dated:	April 30, 2015	/s/ Julia A. Stewart	
 	 	Julia A. Stewart
Chairman and Chief Executive Officer
(Principal Executive Officer)	
 
This certification accompanies the Quarterly Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act except to the extent the Company expressly and specifically incorporates it by reference in such filing.

Exhibit 32.2
 
Certification Pursuant to
18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
 
In connection with the Quarterly Report on Form 10-Q of DineEquity, Inc. (the “Company”) for the quarter ended March 31, 2015, as filed with the Securities and Exchange Commission on April 30, 2015 (the “Report”), Thomas W. Emrey, as Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge, that:
 
(1)                     The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
 
(2)                     The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 	 	 	
Dated:	April 30, 2015	/s/ Thomas W. Emrey	
 	 	Thomas W. Emrey
Chief Financial Officer
(Principal Financial Officer)	
 
This certification accompanies the Quarterly Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act except to the extent the Company expressly and specifically incorporates it by reference in such filing.