Lease Disclosures

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

Lease Disclosures

Lease Disclosures The Company engages in leasing activity as both a lessee and a lessor. The Company currently leases from third parties the real property on which approximately 540 IHOP franchisee-operated restaurants and one Applebee's franchisee-operated restaurant are located; the Company (as lessor) subleases the property to the franchisees that operate those restaurants. The Company also leases property it owns to the franchisees that operate approximately 50 IHOP restaurants and one Applebee's restaurant. The Company leases from third parties the real property on which 69 Applebee's company-operated restaurants are located. The Company also leases office space for its principal corporate office in Glendale, California and restaurant support centers in Leawood, Kansas and Raleigh, North Carolina. The Company does not have a significant amount of non-real estate leases.

The Company's existing leases/subleases related to IHOP restaurants generally provide for an initial term of 20 to 25 years, with most having one or more five-year renewal options. Leases related to Applebee's restaurants generally have an initial term of 10 to 20 years, with renewal terms of five to 20 years. Option periods were not included in determining liabilities and right-of-use assets related to operating leases. Approximately 260 of the Company's leases met the sales levels that required variable rent payments to the Company (as lessor), based on a percentage of restaurant sales during the three months ended March 31, 2022. Approximately 40 of the leases met the sales levels that required variable rent payments by the Company (as lessee), based on a percentage of restaurant sales during the three months ended March 31, 2022.

The Company's lease cost for the three months ended March 31, 2022 and 2021 was as follows:

		Three months ended March 31,
		2022		2021
	(In millions)
Finance lease cost:
Amortization of right-of-use assets		$	1.1	$	1.2
Interest on lease liabilities		1.3		1.5
Operating lease cost(1)		21.1		21.3
Variable lease cost		1.7		0.3
Short-term lease cost		0.0		0.0
Sublease income		(26.4)		(24.2)
Lease (income) cost		$	(1.2)	$	0.1

(1)Operating lease cost for the three months ended March 31, 2021 previously disclosed as $25.1 million was overstated due to the inclusion of certain finance lease activity. The correct operating lease cost for the three months ended March 31, 2021 was $21.3 million as reflected in the above table. The overstatement only impacted this note disclosure, and there was no impact to the Consolidated Statement of Comprehensive Income.

Future minimum lease payments under noncancelable leases as lessee as of March 31, 2022 were as follows:

	Finance Leases		Operating Leases
	(In millions)
2022 (remaining nine months)	$	10.8	$	69.2
2023	11.9		77.8
2024	10.2		73.3
2025	8.5		60.7
2026	7.9		51.2
Thereafter	48.4		135.4
Total minimum lease payments	97.7		467.6
Less: interest/imputed interest	(26.6)		(81.5)
Total obligations	71.1		386.1
Less: current portion	(9.9)		(72.5)
Long-term lease obligations	$	61.2	$	313.6

The weighted average remaining lease term as of March 31, 2022 was 9.9 years for finance leases and 6.7 years for operating leases. The weighted average discount rate as of March 31, 2022 was 10.0% for finance leases and 5.5% for operating leases.

During the three months ended March 31, 2022 and 2021, the Company made the following cash payments for leases:

	Three months ended March 31,
	2022		2021
	(In millions)
Principal payments on finance lease obligations	$	2.3	$	2.6
Interest payments on finance lease obligations	$	1.3	$	1.5
Payments on operating leases	$	23.0	$	23.0
Variable lease payments	$	2.1	$	0.3

The Company's income from operating leases for the three months ended March 31, 2022 and 2021 was as follows:

		Three months ended March 31,
		2022		2021
	(In millions)
Minimum lease payments		$	24.4	$	23.8
Variable lease income		3.9		1.6
Total operating lease income		$	28.3	$	25.4

Minimum payments to be received as lessor under noncancelable operating leases as of March 31, 2022 were as follows:

	(In millions)
2022 (remaining nine months)	$	76.8
2023	98.6
2024	90.2
2025	77.2
2026	62.9
Thereafter	133.9
Total minimum rents receivable	$	539.6

The Company's income from real estate leases for the three months ended March 31, 2022 and 2021 was as follows:

		Three months ended March 31,
		2022		2021
	(In millions)
Interest income		$	0.4	$	0.6
Variable lease income		0.1		0.1
Total real estate lease income		$	0.5	$	0.7

Minimum payments to be received as lessor under noncancelable real estate leases as of March 31, 2022 were as follows:

	(In millions)
2022 (remaining nine months)	$	5.3
2023	3.6
2024	1.4
2025	0.7
2026	0.6
Thereafter	2.6
Total minimum rents receivable	14.2
Less: unearned income	(2.1)
Total net investment in real estate leases	12.1
Less: current portion	(5.7)
Long-term investment in real estate leases	$	6.4

Lease Disclosures

Lease Disclosures The Company engages in leasing activity as both a lessee and a lessor. The Company currently leases from third parties the real property on which approximately 540 IHOP franchisee-operated restaurants and one Applebee's franchisee-operated restaurant are located; the Company (as lessor) subleases the property to the franchisees that operate those restaurants. The Company also leases property it owns to the franchisees that operate approximately 50 IHOP restaurants and one Applebee's restaurant. The Company leases from third parties the real property on which 69 Applebee's company-operated restaurants are located. The Company also leases office space for its principal corporate office in Glendale, California and restaurant support centers in Leawood, Kansas and Raleigh, North Carolina. The Company does not have a significant amount of non-real estate leases.

The Company's existing leases/subleases related to IHOP restaurants generally provide for an initial term of 20 to 25 years, with most having one or more five-year renewal options. Leases related to Applebee's restaurants generally have an initial term of 10 to 20 years, with renewal terms of five to 20 years. Option periods were not included in determining liabilities and right-of-use assets related to operating leases. Approximately 260 of the Company's leases met the sales levels that required variable rent payments to the Company (as lessor), based on a percentage of restaurant sales during the three months ended March 31, 2022. Approximately 40 of the leases met the sales levels that required variable rent payments by the Company (as lessee), based on a percentage of restaurant sales during the three months ended March 31, 2022.

The Company's lease cost for the three months ended March 31, 2022 and 2021 was as follows:

		Three months ended March 31,
		2022		2021
	(In millions)
Finance lease cost:
Amortization of right-of-use assets		$	1.1	$	1.2
Interest on lease liabilities		1.3		1.5
Operating lease cost(1)		21.1		21.3
Variable lease cost		1.7		0.3
Short-term lease cost		0.0		0.0
Sublease income		(26.4)		(24.2)
Lease (income) cost		$	(1.2)	$	0.1

(1)Operating lease cost for the three months ended March 31, 2021 previously disclosed as $25.1 million was overstated due to the inclusion of certain finance lease activity. The correct operating lease cost for the three months ended March 31, 2021 was $21.3 million as reflected in the above table. The overstatement only impacted this note disclosure, and there was no impact to the Consolidated Statement of Comprehensive Income.

Future minimum lease payments under noncancelable leases as lessee as of March 31, 2022 were as follows:

	Finance Leases		Operating Leases
	(In millions)
2022 (remaining nine months)	$	10.8	$	69.2
2023	11.9		77.8
2024	10.2		73.3
2025	8.5		60.7
2026	7.9		51.2
Thereafter	48.4		135.4
Total minimum lease payments	97.7		467.6
Less: interest/imputed interest	(26.6)		(81.5)
Total obligations	71.1		386.1
Less: current portion	(9.9)		(72.5)
Long-term lease obligations	$	61.2	$	313.6

The weighted average remaining lease term as of March 31, 2022 was 9.9 years for finance leases and 6.7 years for operating leases. The weighted average discount rate as of March 31, 2022 was 10.0% for finance leases and 5.5% for operating leases.

During the three months ended March 31, 2022 and 2021, the Company made the following cash payments for leases:

	Three months ended March 31,
	2022		2021
	(In millions)
Principal payments on finance lease obligations	$	2.3	$	2.6
Interest payments on finance lease obligations	$	1.3	$	1.5
Payments on operating leases	$	23.0	$	23.0
Variable lease payments	$	2.1	$	0.3

The Company's income from operating leases for the three months ended March 31, 2022 and 2021 was as follows:

		Three months ended March 31,
		2022		2021
	(In millions)
Minimum lease payments		$	24.4	$	23.8
Variable lease income		3.9		1.6
Total operating lease income		$	28.3	$	25.4

Minimum payments to be received as lessor under noncancelable operating leases as of March 31, 2022 were as follows:

	(In millions)
2022 (remaining nine months)	$	76.8
2023	98.6
2024	90.2
2025	77.2
2026	62.9
Thereafter	133.9
Total minimum rents receivable	$	539.6

The Company's income from real estate leases for the three months ended March 31, 2022 and 2021 was as follows:

		Three months ended March 31,
		2022		2021
	(In millions)
Interest income		$	0.4	$	0.6
Variable lease income		0.1		0.1
Total real estate lease income		$	0.5	$	0.7

Minimum payments to be received as lessor under noncancelable real estate leases as of March 31, 2022 were as follows:

	(In millions)
2022 (remaining nine months)	$	5.3
2023	3.6
2024	1.4
2025	0.7
2026	0.6
Thereafter	2.6
Total minimum rents receivable	14.2
Less: unearned income	(2.1)
Total net investment in real estate leases	12.1
Less: current portion	(5.7)
Long-term investment in real estate leases	$	6.4

Lease Disclosures

Lease Disclosures The Company engages in leasing activity as both a lessee and a lessor. The Company currently leases from third parties the real property on which approximately 540 IHOP franchisee-operated restaurants and one Applebee's franchisee-operated restaurant are located; the Company (as lessor) subleases the property to the franchisees that operate those restaurants. The Company also leases property it owns to the franchisees that operate approximately 50 IHOP restaurants and one Applebee's restaurant. The Company leases from third parties the real property on which 69 Applebee's company-operated restaurants are located. The Company also leases office space for its principal corporate office in Glendale, California and restaurant support centers in Leawood, Kansas and Raleigh, North Carolina. The Company does not have a significant amount of non-real estate leases.

The Company's existing leases/subleases related to IHOP restaurants generally provide for an initial term of 20 to 25 years, with most having one or more five-year renewal options. Leases related to Applebee's restaurants generally have an initial term of 10 to 20 years, with renewal terms of five to 20 years. Option periods were not included in determining liabilities and right-of-use assets related to operating leases. Approximately 260 of the Company's leases met the sales levels that required variable rent payments to the Company (as lessor), based on a percentage of restaurant sales during the three months ended March 31, 2022. Approximately 40 of the leases met the sales levels that required variable rent payments by the Company (as lessee), based on a percentage of restaurant sales during the three months ended March 31, 2022.

The Company's lease cost for the three months ended March 31, 2022 and 2021 was as follows:

		Three months ended March 31,
		2022		2021
	(In millions)
Finance lease cost:
Amortization of right-of-use assets		$	1.1	$	1.2
Interest on lease liabilities		1.3		1.5
Operating lease cost(1)		21.1		21.3
Variable lease cost		1.7		0.3
Short-term lease cost		0.0		0.0
Sublease income		(26.4)		(24.2)
Lease (income) cost		$	(1.2)	$	0.1

(1)Operating lease cost for the three months ended March 31, 2021 previously disclosed as $25.1 million was overstated due to the inclusion of certain finance lease activity. The correct operating lease cost for the three months ended March 31, 2021 was $21.3 million as reflected in the above table. The overstatement only impacted this note disclosure, and there was no impact to the Consolidated Statement of Comprehensive Income.

Future minimum lease payments under noncancelable leases as lessee as of March 31, 2022 were as follows:

	Finance Leases		Operating Leases
	(In millions)
2022 (remaining nine months)	$	10.8	$	69.2
2023	11.9		77.8
2024	10.2		73.3
2025	8.5		60.7
2026	7.9		51.2
Thereafter	48.4		135.4
Total minimum lease payments	97.7		467.6
Less: interest/imputed interest	(26.6)		(81.5)
Total obligations	71.1		386.1
Less: current portion	(9.9)		(72.5)
Long-term lease obligations	$	61.2	$	313.6

The weighted average remaining lease term as of March 31, 2022 was 9.9 years for finance leases and 6.7 years for operating leases. The weighted average discount rate as of March 31, 2022 was 10.0% for finance leases and 5.5% for operating leases.

During the three months ended March 31, 2022 and 2021, the Company made the following cash payments for leases:

	Three months ended March 31,
	2022		2021
	(In millions)
Principal payments on finance lease obligations	$	2.3	$	2.6
Interest payments on finance lease obligations	$	1.3	$	1.5
Payments on operating leases	$	23.0	$	23.0
Variable lease payments	$	2.1	$	0.3

The Company's income from operating leases for the three months ended March 31, 2022 and 2021 was as follows:

		Three months ended March 31,
		2022		2021
	(In millions)
Minimum lease payments		$	24.4	$	23.8
Variable lease income		3.9		1.6
Total operating lease income		$	28.3	$	25.4

Minimum payments to be received as lessor under noncancelable operating leases as of March 31, 2022 were as follows:

	(In millions)
2022 (remaining nine months)	$	76.8
2023	98.6
2024	90.2
2025	77.2
2026	62.9
Thereafter	133.9
Total minimum rents receivable	$	539.6

The Company's income from real estate leases for the three months ended March 31, 2022 and 2021 was as follows:

		Three months ended March 31,
		2022		2021
	(In millions)
Interest income		$	0.4	$	0.6
Variable lease income		0.1		0.1
Total real estate lease income		$	0.5	$	0.7

Minimum payments to be received as lessor under noncancelable real estate leases as of March 31, 2022 were as follows:

	(In millions)
2022 (remaining nine months)	$	5.3
2023	3.6
2024	1.4
2025	0.7
2026	0.6
Thereafter	2.6
Total minimum rents receivable	14.2
Less: unearned income	(2.1)
Total net investment in real estate leases	12.1
Less: current portion	(5.7)
Long-term investment in real estate leases	$	6.4

Lease Disclosures

Lease Disclosures The Company engages in leasing activity as both a lessee and a lessor. The Company currently leases from third parties the real property on which approximately 540 IHOP franchisee-operated restaurants and one Applebee's franchisee-operated restaurant are located; the Company (as lessor) subleases the property to the franchisees that operate those restaurants. The Company also leases property it owns to the franchisees that operate approximately 50 IHOP restaurants and one Applebee's restaurant. The Company leases from third parties the real property on which 69 Applebee's company-operated restaurants are located. The Company also leases office space for its principal corporate office in Glendale, California and restaurant support centers in Leawood, Kansas and Raleigh, North Carolina. The Company does not have a significant amount of non-real estate leases.

The Company's existing leases/subleases related to IHOP restaurants generally provide for an initial term of 20 to 25 years, with most having one or more five-year renewal options. Leases related to Applebee's restaurants generally have an initial term of 10 to 20 years, with renewal terms of five to 20 years. Option periods were not included in determining liabilities and right-of-use assets related to operating leases. Approximately 260 of the Company's leases met the sales levels that required variable rent payments to the Company (as lessor), based on a percentage of restaurant sales during the three months ended March 31, 2022. Approximately 40 of the leases met the sales levels that required variable rent payments by the Company (as lessee), based on a percentage of restaurant sales during the three months ended March 31, 2022.

The Company's lease cost for the three months ended March 31, 2022 and 2021 was as follows:

		Three months ended March 31,
		2022		2021
	(In millions)
Finance lease cost:
Amortization of right-of-use assets		$	1.1	$	1.2
Interest on lease liabilities		1.3		1.5
Operating lease cost(1)		21.1		21.3
Variable lease cost		1.7		0.3
Short-term lease cost		0.0		0.0
Sublease income		(26.4)		(24.2)
Lease (income) cost		$	(1.2)	$	0.1

(1)Operating lease cost for the three months ended March 31, 2021 previously disclosed as $25.1 million was overstated due to the inclusion of certain finance lease activity. The correct operating lease cost for the three months ended March 31, 2021 was $21.3 million as reflected in the above table. The overstatement only impacted this note disclosure, and there was no impact to the Consolidated Statement of Comprehensive Income.

Future minimum lease payments under noncancelable leases as lessee as of March 31, 2022 were as follows:

	Finance Leases		Operating Leases
	(In millions)
2022 (remaining nine months)	$	10.8	$	69.2
2023	11.9		77.8
2024	10.2		73.3
2025	8.5		60.7
2026	7.9		51.2
Thereafter	48.4		135.4
Total minimum lease payments	97.7		467.6
Less: interest/imputed interest	(26.6)		(81.5)
Total obligations	71.1		386.1
Less: current portion	(9.9)		(72.5)
Long-term lease obligations	$	61.2	$	313.6

The weighted average remaining lease term as of March 31, 2022 was 9.9 years for finance leases and 6.7 years for operating leases. The weighted average discount rate as of March 31, 2022 was 10.0% for finance leases and 5.5% for operating leases.

During the three months ended March 31, 2022 and 2021, the Company made the following cash payments for leases:

	Three months ended March 31,
	2022		2021
	(In millions)
Principal payments on finance lease obligations	$	2.3	$	2.6
Interest payments on finance lease obligations	$	1.3	$	1.5
Payments on operating leases	$	23.0	$	23.0
Variable lease payments	$	2.1	$	0.3

The Company's income from operating leases for the three months ended March 31, 2022 and 2021 was as follows:

		Three months ended March 31,
		2022		2021
	(In millions)
Minimum lease payments		$	24.4	$	23.8
Variable lease income		3.9		1.6
Total operating lease income		$	28.3	$	25.4

Minimum payments to be received as lessor under noncancelable operating leases as of March 31, 2022 were as follows:

	(In millions)
2022 (remaining nine months)	$	76.8
2023	98.6
2024	90.2
2025	77.2
2026	62.9
Thereafter	133.9
Total minimum rents receivable	$	539.6

The Company's income from real estate leases for the three months ended March 31, 2022 and 2021 was as follows:

		Three months ended March 31,
		2022		2021
	(In millions)
Interest income		$	0.4	$	0.6
Variable lease income		0.1		0.1
Total real estate lease income		$	0.5	$	0.7

Minimum payments to be received as lessor under noncancelable real estate leases as of March 31, 2022 were as follows:

	(In millions)
2022 (remaining nine months)	$	5.3
2023	3.6
2024	1.4
2025	0.7
2026	0.6
Thereafter	2.6
Total minimum rents receivable	14.2
Less: unearned income	(2.1)
Total net investment in real estate leases	12.1
Less: current portion	(5.7)
Long-term investment in real estate leases	$	6.4