Julia Stewart - Chairman and Chief Executive Officer Gregg Kalvin - Acting Chief Financial Officer and Controller Mark Weisberger - General Counsel Stacy Roughan - Director of Investor Relations

Chris O’Cull - SunTrust Robinson Humphrey Rachael Rothman - Merrill Lynch Michael Gallo – C.L. King Steven Rees - JP Morgan Tom Forte - Telsey Advisory Group

Good day ladies and gentlemen and welcome to the third quarter 2008 DineEquity earnings conference call. My name is Erica and I’ll be your coordinator for today. At this time all participants are in a listen-only mode. We’ll be facilitating a question-and-answer session towards the end of this conference. (Operator Instructions) I would now like to turn the presentation over to your host for today’s call, Ms. Stacy Roughan; you may proceed ma’am.

Good morning and thank you for participating on DineEquity’s third-quarter 2008 conference call. Today with us from management are Julia Stewart, Chairman and CEO; Gregg Kalvin, Acting CFO and Controller and Mark Weisberger, General Counsel. Before I turn the call over to management, let me remind you of our Safe Harbor regarding forward-looking information. Today management may discuss information that is forward-looking and involves known and unknown risks, uncertainties and other factors which may cause the actual results to be materially different than those expressed or implied in such statements. We caution you to evaluate such forward-looking information in the context of these factors which are detailed in today’s news release, as well as in our most recently filed Form 10-Q with the Securities and Exchange Commission. In addition, DineEquity disclaims any intent or obligation to update these forward-looking statements. In conjunction with our prepared remarks today, we have provided additional information on our IR website at www.dineequity.com for your viewing. The document can be found under the Calls and Presentations section of the Investor Relations website, posted as supporting materials for today’s webcast. If you haven’t already done so, we encourage you to download the deck. Additionally on this call we may refer to certain non-GAAP financial measures. These non-GAAP financial measures are described in our news release today and in materials posted on our IR website. Now I would like to turn the call over to Julia Stewart.

Thanks Stacy and good morning everyone. Today we’ll provide you with an overview of the third-quarter 2008, update you on our same-store sales performance, EBITDA enhancement strategies and the steps we have taken to maximize our financial flexibility, but first let’s get started with an update on the solid progress we’ve made with Applebee's re-franchising efforts. With a disciplined and focused effort on executing our plan, we’ve exceeded our 2008 re-franchising goal for company-operated Applebee’s restaurants, with more than 100 locations to date that have been sold or are under agreement to be sold before year-end. Today, we announced the signing of asset purchase agreements or APA’s, for the sale of 66 additional restaurants. This reflects the sale of 22 company-operated Applebee’s in Houston, 37 company Applebee’s in Dallas and the sale of seven company Applebee’s in Albuquerque. These agreements do not contain any financial contingencies. The Texas transactions are expected to close sometime in the fourth-quarter 2008, with Albuquerque expected to close early in the first quarter of 2009. The sale of nearly all of Applebee’s lowest profit performing markets will benefit our financial performance with the elimination of the negative impact these restaurants have on our P&L. More importantly, it transferred the stewardship of these Applebee’s to the hands of experienced restaurant operators, new to the system, who not only are capable of delivering a higher level of performance in these markets, but who also believe in and are committed to our brand revitalization efforts underway. Now we are focused on completing the sale of our remaining higher profit performing markets. We are also pleased that earlier this month we completed the previously announced sale of 15 company-operated Applebee’s in Nevada to Apple American Group. Apple American has now acquired a total of 41 company-operated Applebee’s restaurants in…

Thank you Julie and good morning everyone. Let me first quickly walk through our financial performance for the third-quarter 2008, focusing our discussion around the key performance measures of the business; cover the impact of re-franchising and then touch on our debt ratios. Our third-quarter results reflected the continued positive performance of our core IHOP franchising business and the addition of Applebee’s franchising business. This produced $36.9 million increase in franchise operations profitability, primarily due to a full quarter’s recognition of Applebee’s franchise operations profit and a 6.7% increase in IHOP franchise operations profit. EPS for the quarter was impacted by a non-cash impairment charge of $28.3 million, primarily associated with the sale of some of Applebee’s company owned restaurants in Texas, Nevada and New Mexico. All of the restaurants involved in the transaction were assigned an estimated fair value as part of the purchase price allocation at the time of our acquisition of Applebee’s. Subsequently, we noted deterioration in the real estate values, sales and operating profit at company-operated Applebee’s restaurants since the acquisition in November of last year. We ultimately concluded that the estimated fair value of the restaurants determined in the purchase price allocation was reasonable and appropriate as of the time of the acquisition and that the decline in value related to market events that were subsequent to the acquisition date. This decision resulted in an impairment charge as opposed to an adjustment to the allocated purchase price. Again, this was a non-cash charge. Our earnings per share loss of $0.98 for the third-quarter of 2008 was impacted by an increase in interest expense of $50.5 million, primarily due to Applebee’s acquisition-related debt versus the prior year. Approximately $10 million of this interest expense related to non-cash items were primarily associated with the financing-related costs. Turning…

Thanks, Gregg. First, I want to take this opportunity to thank Gregg as the acting CFO and his entire staff for seamlessly continuing to support our finance and accounting activities through our foreclosed process; we haven’t missed a beat. We’re moving ahead with our CFO search and have completed first-round interviews. I’ve been impressed with the quality of the candidates and the breadth of experience they bring to the table and I’m optimistic about having a new CFO in place before year end. Now as we mentioned on the last call, we expect to remain in compliance with our debt covenants based on current plans; however, our margin of error is expected to be tighter than we’d like next year. As a result, we have identified three key areas of opportunity to pursue, to ensure maximum financial flexibility to meet our debt obligations. First, we have identified and are executing approximately $20 million of profit optimization opportunities to drive EBITDA performance improvement beginning in the fourth quarter of 2008 and continuing through the end of next year. This includes such areas as modifications to our hourly benefits program, leveraging the scale of our combined organizations with the adoption of a single 401k program for all employees, travel expense reductions, changes in vacation policies and reductions in the accrual for incentive based compensation in 2008. We also have renewed our focus on optimizing G&A spend in line with the evolving needs of each business unit and the parent company. To size it for you, each $7 million of increased EBITDA represents an approximate 10 basis point of improvement in our leverage test, so approximately $20 million of EBITDA enhancements would translate into nearly 30 basis points of improvement to our consolidated leverage ratio over the next year. We also have the…

(Operator Instructions) Your first question comes from Chris O’Cull - SunTrust Robinson Humphrey. Chris O’Cull - SunTrust Robinson Humphrey: Let me start off with a question regarding the debt. How does being able to repurchase the debt at a discount influence your decision on the selling price of the Applebee’s units?

I’m not sure I understand the question. Chris O’Cull - SunTrust Robinson Humphrey: Well, if you’re able to retire debt at below par value, does that allow you to sell the units at a lower price in order to repay the debt?

Yes, one doesn’t have anything to do with the other. If that’s where you’re going, retiring the debt at a discount is something we found opportunistically to do and selling the restaurants is something else that we are doing. Chris O’Cull - SunTrust Robinson Humphrey: Okay, so that does not factor into your decision making for the selling value of the units?

No Chris O’Cull - SunTrust Robinson Humphrey: Okay great and then switching to promotions, Julia the last two promotions, I think they probably fell short of your expectations; why wouldn’t you maybe take a more market based approach to some of these value promotions; especially in terms of just the different performance we are seeing in markets across the country.

Are you talking about Applebee’s? Chris O’Cull - SunTrust Robinson Humphrey: Yes.

Well you got two issues going on here. You have a tremendous opportunity with so much marketing power. If you think about it, we shout louder than anyone else in the category and so we know for a fact that in terms of unaided awareness, we have a real opportunity to be out there in the public’s eye shouting loudly. So an aggressive campaign like this Two-for-20 we believe will do just that. That isn’t a take away from the fact that locally franchisees across the country at Applebee’s do additional local marketing efforts, especially with late night promotions and the like. They’re doing different things locally, but on a national level, we have an opportunity to shout louder and harder and I think better than anybody else. Chris O’Cull - SunTrust Robinson Humphrey: The Two-for-20 promotion, it is my understanding that it’s everyday.

Yes and that’s a shareable appetizer, so basically it’s an appetizer for free if you will and then two on-trays for $20 and that aired starting last week. Chris O’Cull - SunTrust Robinson Humphrey: Okay, one of the questions I guess would be, I know some of your competitions is doing a similar kind of promotion, but it’s for early week rather than for the full week. Do you expect this to affect weekend sales in terms that could be less profitable to franchisees and to the company stores?

Quite the contrary; I’m thrilled that we are doing this all week, which makes our offer far better than the competition and I think drives traffic which obviously creates profitability. So the franchisees are supportive of this promotion and all-in-all I think it provides us frankly a position of strength as opposed to confusing consumers with its only available at a certain time. Chris O’Cull - SunTrust Robinson Humphrey: Okay. So you feel like you’re driving sufficient traffic to make up for maybe the discounted price on the weekends?

That is absolutely the objective. Chris O’Cull - SunTrust Robinson Humphrey: Okay and then lastly regarding some of the changes you made at the restaurant labor line, would you explain the rationale for altering the hourly wage rates and maybe the bonus payouts? Is there any risk that this could affect service levels or is this just you guys trying to get more in line with the market?

No. Let’s talk about your second point first. The bonus was something we changed at the end of the first quarter of 2008 and that was because we determined, after we made the acquisition, that the bonus really didn’t meet our objective and so we put a different bonus plan in play that is far more inducive to sales and profit. I think we mentioned at the end of first quarter that it might take a while for that to have an impact, so you didn’t see much in the second quarter; you truly saw that impact third quarter. It’s just a bonus program that’s designed to give people a bonus incentive based on the things that really are important to us driving top line and bottom line. So that hasn’t had an impact at all on turnover, so that was number two. Number one, the hourly wage rate; that has everything to do with consolidation; you have a lot less turnover, you don’t have to pay people necessarily more money to get them in, cross-training. I mean it’s a combination factor; it’s not any one thing, but none of it in fact is having an impact on our turnover rate. We’ve always done a great job on retention and so these items in conjunction with how hard we’re making an effort to keep people in play is working.

Your next question comes from Rachael Rothman - Merrill Lynch.

I know you mentioned that the stores that you sold are in the process of selling at the lower margin stores; can you help us frame how we should think about 2009 from a company-operated margin perspective, given the elimination of the lower margin stores?

Rachael, like we said because we are smacked in the middle of negotiations, it’s really difficult for us to say. If we’ve got a material change, we’ll do that before the end of the year, but you should think of those restaurants that we sold. I think I said on the last call, I used the technical term “they were the dog” and so you should think of those on the low end of where we’ve been. Definitely not think of those as average. It is our intention right now when we come out with 2009 guidance to provide sort of a substantial update and quantify it and give you where we are with margins, what we’re able to quantify, but it’s really difficult today.

Then in terms of the reduction in your free cash flow guidance, was there any commensurate change in the working capital or can you help us with where the reduction came from, given that EBITDA seemed much stronger than expected and CapEx was in line. So maybe can you just help us break down where that $10 million reduction came from?

Hi Rachael, this is Gregg. Primarily on the slowdown of the Applebee’s business, on the same store sale line, that’s primarily driving the number downwards as we get into the end of the year, so that reduction is the primary factor right now. Now, there are a lot of variables obviously that go into that, but that’s the way you should think of it.

And in terms of the $20 million in incremental G&A savings that you guys are going to start in the fourth quarter, how long should we think about it taking before you hit that run rate?

Well some of it we’ll get in 2008 and the rest of it we’ll get in 2009. So the way you should think about that is an annualized number.

But none of it was in the third quarter, is that correct, because you reiterated your’08 guidance.

Right, none of it was in the third quarter, all of it we just implemented in 2008, going into fourth quarter. So like I said, you’ll see some of it in the fourth quarter. Like the bonus is a good example, right? That’s a 2008 accrual. The bonus change happened and actually, that was third quarter.

There’s a little bit in the third quarter Rachael, that’s going to trickle into the third quarter and then from let’s say the beginning of the third quarter, mid third quarter on, it will be over the next 12 months essentially.

That’s a good point. We took that reduction in the third quarter, so you’ll see that the large majority of what I spoke to happened in the fourth quarter, but some of it was third quarter, but the way to think about it is the numbers we gave you for G&A, that’s a 2008 total and then obviously we’ve got lots of things we can do for 2009.

So for 2008, should we expect it now to come in at the lower end of the guidance range, since there was no change in the guidance?

I’m sorry, the lower end of the guidance for which piece?

Of the G&A guidance. Sorry, I think it was maybe 188 to 199 had been your guidance?

Yes, I think you should think in terms of the lower end.

Okay and then can you talk a little bit about what the cash outlay to retire the $58 million or $59 million worth of debt was?

We’re not going to do that. We have chosen not to communicate our discount rate on those bonds.

Your question just on the discount rate or is it also on the source of the funds?

Well, the source of the funds, I’m guessing you used from free cash flow and from the --?

Yes. I’m sorry.

From an accounting perspective, if you buy in a liability at below book value let’s say, is there a gain associated with that?

Yes, there’s a gain on the sale of the bonds and there’s a related tax impact also that we will be paying out. So when we reflect that transaction in the fourth quarter, those numbers will come out in the financial statement, because essentially if your basis in the bond is par and then if you buy a discount you have a gain.

Okay, but the gain was not recognized in the third quarter for the $59 million that would be booked in the fourth quarter?

Part of it was. There were two pieces to the $59 million. There was a $23.5 million piece in Q3 and there was a $35.5 million piece in Q4. So part of it is in the Q3 numbers.

Okay and can you tell us what the Q3 gain was?

The Q3 gain was net of the write-off. We have to write-off certain deferred financing costs with it. The net gain was $2.5 million and it’s reflected in the P&L.

Is it above the line or below the line?

It’s in the cost number.

Is it lumped in with the impairment charge for [Multiple Speakers]?

No, it wouldn’t be in the impairment charge, I think it’s in other. It is in the gain. It’s a single line item on the P&L, I’m looking at. It’s a gain/loss on extinguishment of debt. It’s called out separately. $2.4 million is what’s in the Q3 numbers.

And then it looks like all of the units that were sold are in contract for sale of the new 66 are to operators that are outside of the system?

That is correct.

Tell us maybe what that signals or how we should go about thinking about that? Because I know initially there had been some pretty strong demand from the existing franchisees. Are they just interested in a different market or what should we read into the fact that these are all new franchisees?

I don’t think you should read anything into it. We’ve said from the very beginning that we were going to build a pipeline of new franchisees as well as existing franchisees. If anything I think you should think of it as a positive sign that people believe in the future of Applebee’s and therefore want to get into it. I wouldn’t read anything into it other than you’ve got new and existing franchisees interested in the marketplaces.

Did you guys have bids earlier in the process that may have seemed low in the context at the time, but given what’s happened in the credit markets, maybe seem interesting at this point that you may want to revisit?

No and I think the bigger issue here Rachael is and this is why I have been very hesitant to communicate in a lot of detail. We are as I said in the midst of negotiations for all of the remaining markets, some form of negotiations and have backup buyers. So it’s really a complicated process that we are going through and I’ve tried to be respectful to Phil and his team about letting that process take hold.

Your next question comes from Michael Gallo – C.L. King. Michael Gallo – C.L. King: A couple of questions I had. First, the G&A in the third quarter was lower trend line wise and it had been for the prior couple quarters, yet the guidance was reiterated to be the same. What drove that, whether it was timing differences or anything unusual? I know you’re alluded to some of the accrual changes, but was there anything else unusual in the G&A item in the quarter?

Yes, well third quarter is the quarter in which we took a bonus accrual reduction and so that was the big change in the third quarter.

Also, when we adjusted, we had a vacation policy adjustment also.

: Yes, both those things happened in the third quarter and like we said, we’re guiding on the low end of the G&A number for the full year. Michael Gallo – C.L. King: The second question I have is just on the franchisee financing environment overall. Obviously there’s been a lot of talk about certain lenders either reducing their involvement in the market or exiting it altogether. I was wondering if you could give us some commentary on franchisee financing sources, what you’re seeing there and particularly I guess in terms of your franchisees continuing to have access to capital to either build new units, which certainly is more relevant on the IHOP side or to continue to purchase re-franchised Applebee’s. Thank you.

So, it’s absolutely correct that this is a difficult credit environment. I think when we’ve talked about we’re working with franchisees who are well qualified, that’s a real range of creative financing, including private equity players who’ve got the wear with all the finance all-cash deals or franchisees who have sufficient equity to put in a deal with a regional or a national bank to fund the balance. Essentially, we’re just dealing with all kinds of different folks out there who can do a range of financing and if you think about the deals we announced today, those are all-cash deals, but we are absolutely working with people who have access to capital. We know it’s tougher and that’s absolutely correct, but we are working with folks to come up with sort of different ways that they can get funded, but it’s mainly what I said. Private equity, people who’ve got access to funds, are all all-cash deals. Michael Gallo – C.L. King: Then just a final question, somewhat of a follow-up; could you disclose how many real estate parcels or land etc. were sold with I guess one, the Southern California stores, now that those are closed and two, with the recently announced sales?

: I’m sorry?

He’s asking how many of the 110 restaurants were in those parcels.

Of the sale leaseback restaurants? That’s at 27. Michael Gallo – C.L. King: Okay and the 27, just by coincidence was that the 27 for the Southern Cal?

: No.

In the aggregate over the 110.

Yes. No, the 110 restaurants in total, 27 of them were in the sale leaseback transaction; and they’re sprinkled throughout the 100. Michael Gallo – C.L. King: Okay, so it was pretty much dispersed throughout. There wasn’t it sounds like a big allocation to one of the transactions.

That is correct and that’s going to probably be ongoing. I think people have asked us repeatedly about if those 180 some restaurants are in anywhere, and I’ve always said, they’re sort of sprinkled across the US.

Your next question comes from Steven Rees – JPMorgan. Steven Rees – JPMorgan: Just on the re-franchising, perhaps you can provide some color around what appear to be underperformers that are getting sold first; you spent some time negotiating those deals. What were the issues; was it sales; was it margins, operations and what do you think or what have you gleaned from that experience that you think you can implement across the system from selling these docs first?

Nothing. I think every deal is uniquely different. If Phil has taught me one thing, he has taught me that every single one of these deals just have different issues, the franchisees have different concerns. I think if anything what we’ve learned is to sort of handle each deal separately, working with that particular buyer and what their needs are, what their orientation is, what they may know about the marketplace and what they uniquely are looking for in that transaction. I think as we said in our prepared remarks that the negotiations that we are doing right now, a lot of these folks have interest in more than one marketplace and so that makes for different negotiations, but I truly believe each of the deals is sort of uniquely different. Steven Rees – JPMorgan: Okay, but just from a unit perspective were these underperforming in terms of their overall sales volumes or do they have margin issues or both?

Both. So you really do have to look at every single deal differently. Those buyers have access to the data room, they look at the information. You’re looking at 12 month trailing average, you’re looking at the future, what you think the brand can do and I think a lot of what people have expressed in interest to Phil and the team is that they believe in the future of the brand. They believe in the revitalization. They believe in what we did for IHOP and they believe we will be involved with that again in Applebee’s. So they are in the money and they want to get involved in the business. Steven Rees – JPMorgan: Then when you talk about significantly or potentially significantly reaccelerating the program, is that just from the 110 units you did this year or are you talking about potentially moving up the finish line from what would have been year end 2010?

No; as I said in our remarks, we are under negotiation, some form of negotiation for all of the remaining restaurants. It may or may not come to fruition, that’s why we are absolutely today at least giving people the sense that because Phil and his team is in some form of negotiations with the remaining restaurants, we could accelerate and it also could not happen. I mean this is an interesting environment right now. I at least wanted to signal that, but anything’s possible. Steven Rees – JPMorgan: Okay and then just you made some pretty good progress on the margins, holding food costs relatively flat in a tough commodity environment and then actually getting some good labor savings. As you think about the next sort of two to four quarters, what additional labor or savings if any do you see and how are you thinking about food costs with what looks to be a pretty big new lineup of products coming in ‘09?

Well I think labor we’ve made some real progress and I think we’ll continue that progress with the comments I made about what kinds of things we took into play in really trying to leverage. So I think we may see some continued improvement although we put a lot of those actions into play, so I’m optimistic. On the food cost line, I think the real big issue is the co-op. I said that it looks as if at this point we’ll be able to have a procurement co-op by January 1 2009, so the real value is for those folks to get underway, combine the effort either with skews or with distribution to make some real heavy lifting results in 2009. We started some of that already with the existing procurement team trying to put those systems together, but it’s a lot easier when you have commitments from all of the franchisees that says “yes, I’m willing to buy from the co-op, in terms of giving you full value for the different vendor partners and the different distributions,” so we will see. I think some of the benefit in ‘09 gets I think more fully vetted into 2010, but I think everyone’s hoping that we can move quickly so that we can see the real benefit in 2009. Steven Rees – JPMorgan: Okay and then just finally unfortunate we don’t talk a lot about the IHOP side, but can you just talk about how the franchisees are managing their profitability now that they are seeing a comp slowdown that they haven’t seen in a couple of years and whether or not you think the credit situation impacts them and their ability to grow units in 2009?

Well, first of all we haven’t issued guidance for 2009, but I think it says a lot that in 2008 IHOP hasn’t missed a beat in terms of its development and its progress and it’s certainly out developing everyone else in the category. So I would say at least for the foreseeable future, they are doing extremely well and think about the revitalization efforts that they’ve had in play now for a couple years. They are looking at their development plans, but in the foreseeable future, I don’t see any slowdown. Although we haven’t issued ‘09 guidance, I think you should ask us that question again in February, but the economy is uncertain, so anything’s possible, but I think because of our focus on the things we can control, whether it’s our core plan, the EBITDA enhancement, free cash flow to buy debt down and the sort of effort on all that we are doing, I don’t see anything in the short term, certainly not on the IHOP side.

(Operator Instructions) Your next question comes from Tom Forte - Telsey Advisory Group.

The first question I had was on re-franchising and I wanted to know that to the extent that as a quarter progressed and the credit market tightening got more difficult, I know you talked about how these transactions were cash deals, but how should we think about it based on other comments from Domino’s Pizza and other operators in the restaurant space that have suggested that the ability for companies to get financing or re-franchising transactions has been severely limited in today’s operating environment?

I mean the truth of the matter is like we said each of these deals is in some form of negotiation. We are looking at every single financing alternative and will continue to give you an update. If there is a material change in the fourth quarter, we will bring that forward. If there isn’t, then we’ll communicate that on our next investor call, but I know that people are looking for hard answers, but in this environment, I think the fact that we are in some form of negotiations with everyone in the markets is probably the most positive news we can share.

Then from a competitive standpoint or from a market standpoint, when you think about potential things that may stimulate sales for casual dining restaurants, I wanted to know what your thoughts were on perhaps lower gas prices and then to the extent that you may be seeing a decrease in supply in the bar and grill space either through slower unit growth by the competitions or perhaps in increasing store closures.

At our scale we’re so large at almost 2,000 restaurants in the US. I think it may help in pockets of the country if there is a slowdown in development or there is an unfortunate closure, but I think realistically we’ve really focused our efforts on which is hopefully what came out today. If all of the efforts we are making in our operational improvements, our marketing enhancements, really focusing on the pipeline, I think that is what we can really control and are very focused on. Our franchisees have been incredibly supportive of that and I think that is what you will see for 2009, that’s got to be our real focus.

Your final question comes from Howard Penney - Research Edge.

My question has been asked. Thank you.

(Operator Instructions) And this concludes our question-and-answer portion of the call. I will now like to turn it over to Ms. Julia Stewart for closing remarks.

Well, I appreciate everybody being on the call. Our next call is scheduled for late February. If there is something material we need to disclose in the fourth quarter, we’ll certainly do that, otherwise Happy Halloween and happy holidays. Thank you.

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect and have a wonderful day.