Good day ladies and gentlemen and welcome to the Fourth Quarter 2013 DineEquity Incorporated Earnings Conference Call. My name is Regina and I will be your conference operator for today. At this time all participants are in listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions) Today’s event is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Ken Diptee, Executive Director of Investor Relations. Please go ahead Mr. Diptee.

Thank you. Good morning and welcome to DineEquity’s fourth quarter and fiscal 2013 conference call. Today, I’m joined by Julia Stewart, Chairman and CEO; Tom Emrey, CFO; and Gregg Kalvin, Corporate Controller. Before I turn the call over to Julia and Tom, 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 substantially different than those expressed or implied. We caution you to evaluate such forward-looking information and the context of these factors, which are detailed in today’s press release, as well as in our most recent 10-K filing. The forward-looking statements are made as of today and assume no obligation to update or supplement these statements. We may also refer to certain non-GAAP financial measures, which are described in our press release and are also available on DineEquity’s website. With that, I will now turn the call over to Julia Stewart. Julia?

Thanks, Ken. I’d like to welcome all of you listening in this morning and thank you for participating on DineEquity’s fourth quarter and full-year earnings call. Today, I’ll briefly review some highlights and provide an update on our continued efforts to strengthen our business model and create additional shareholder value. I’ll then turn the call over to Tom for a financial overview and discussion of our 2014 guidance before opening the call for questions. As you saw on our press release this morning, we delivered impressive results for the fourth quarter and for fiscal 2013 as a whole, which marked our first full year of operations as a 99% franchise company since becoming DineEquity. We continue to generate substantial free cash flow and returned approximately $87 million, or 73% to our shareholders through quarterly cash dividends and share repurchases in 2013. At this time, we plan to maintain our current capital allocation strategy, which provides a very attractive dividend yield and affirms our commitment to create value for our shareholders. And while we expect dividends and share repurchases to be the primary components of our strategy, share repurchases will be done opportunistically. We will remain thoughtful as we enter the marketplace. We will also reduce debt when it’s in the best interest of the company to do so. We review our capital allocation strategy on an ongoing basis, but believe that the current plan will help position us to successfully refinance our debt, which is a high priority. We continue to evaluate our options very thoroughly but believe that now is not the right time to refinance. During the course of 2013, we also made significant progress in many key areas. In addition to managing our capital structure, we prudently controlled our G&A and capital spending. I’ll have more on…

Thank you, Julia and good morning everyone. I’ll provide a brief overview of the highlights for the fourth quarter and full year of 2013. We ended 2013 on a strong note reporting fourth quarter adjusted earnings per diluted share of $0.98 and 18% increase over the prior year adjusted earnings per diluted share of $0.83. This includes approximately $1.7 million in closure, transfer and extension fees received primarily in conjunction with the sale between two existing Applebee’s franchisees. In 2013, we received a combined total of $7.8 million in Applebee’s termination, transfer, and extension fees. And I would like to emphasize that we expect the value of any such transactions or the related fees to be minimal in 2014. For 2013, we reported adjusted earnings per diluted share of $4.24 compared to $4.28 per diluted share in 2012. The decline was mainly due to expected lower segment profit as a result of the refranchising of a 154 Applebee’s company-operated restaurants in 2012. This was partially offset by lower cash interest and G&A expenses. Turning to G&A, for the full year, G&A expenses were $143.6 million in line with our guidance for 2013 and down from a $153.2 million in fiscal 2012, primarily due to lower compensation costs and a non-recurring charge of $9.1 million recorded in 2012 related to the settlement of litigation. As disclosed in our 2014 guidance, we expect G&A to be in the range of $144 million to $147 million. We generated strong free cash flow of $120 million for the full year of 2013, compared to approximately $30 million in 2012. Now, it’s important to understand that free cash flow is defined here and is used in our 2014 guidance is net of mandatory debt service payment. The increase in free cash flow for 2012 was…

Thanks Tom. In summary, we had a great year, we generated $120 million in free cash flow, we announced the capital allocation strategy that returns a substantial portion of free cash flow to our shareholders and we’ve made great strides expanding the reach of our brands both domestically and abroad. I’m excited about our strategy to further enhance shareholder value. Our core objectives are to position the company for the long-term success, ensure strong and stable brands and to maintain financial discipline. Now Tom and I would be pleased to answer your questions. Operator?

(Operator Instructions) Your first question today is from the line of Bryan Elliott with Raymond James. Bryan Elliott – Raymond James: Hey, good morning just a quick question on the guidance on the big picture on the guidance Tom just checking on the working capital assumption and the FCF guidance for 2014, I assume it’s flattish?

Yes, pretty much flat. Bryan C. Elliott – Raymond James: Yes, okay and then the interest guidance would appear that it doesn’t assume any debt pay down?

That’s correct. Bryan C. Elliott – Raymond James: That’s correct okay then there is no reason to assume that…

No, other than the nominal amount of the mandatory payments.

As Tom said in his comments the reason for that is we simply just don’t know the timing, the debt instrument, we don’t know anything at this point and so it would be – I think it would be pretty much where to put that guidance. And obviously if in fact we were to do our refinancing, but alert the investment community immediately. Bryan C. Elliott – Raymond James & Associates: Sure, sure. And then actually the big picture question I guess for you Julia. So you talked at the end of your prepared remarks something about the continued success overseas, internationally. Could you sort of step back with us and sort of maybe draw some scenarios or what do you think each brand might look like five years down the road assuming that things continue to progress at a decent rate with in the emerging markets and global economic growth?

So it’s a great question, and I think it came up on the last call on third quarter. And as I shared then we are in the process of accessing the international side of the business. We brought in a new President for that division, and we will be in a much better place to share that information with you towards the end of this year talking about sort of the short-term and the longer-term opportunities. ,: Bryan C. Elliott – Raymond James & Associates: Fair enough. Thank you

Your next question comes from the line of Will Slabaugh with Stephens. Will E. Slabaugh – Stephens Inc.: Yes, thanks, guys. Julia I wonder if you could give us a little bit more of your thoughts around what has been happening at Applebee’s, where you think that the brand stands right now and sort of the underlying reason for the change there at the top?

So the whole thing with Applebee’s is this is a great brand with a great history. I probably said a million times, we never would have made the acquisition if we didn’t believe in the brand and its future. And certainly, I happened to be a little bias, but I think we have some of the finest franchisees at Applebee’s in all of the restaurant industry. ; : Will E. Slabaugh – Stephens Inc.: Got you. And then just if I could just ask one more on Applebee’s the guidance looks like it could indicate a little bit of a step down from what we’ve seen. So I’m just curious if you are assuming or what you’re assuming rather from a traffic and growth standpoint for next year and if possible you are just giving your new President a little bit of leeway as he works under the position and maybe some new tactics there?

No as I said in my prepared remarks part of our guidance on the 2014 at Applebee’s had a lot to do with the weather that hit very, very hard and we don’t talk about weather. I don’t think I’ve ever talked about weather but as I said in my prepared remarks it was extraordinary. If you look at the sales impact in the first part of the quarter it did have an impact, as you know we have lot of Applebee’s east of the Mississippi and so I think we guided accordingly for the year without a consideration. Will Slabaugh – Stephens Inc.: That makes sense. One more quick one if I could about tablets wondering if you could just talk a little bit more about what an opportunity means to you Applebee’s and what that timeline may look like throughout the year?

We think it will take us the rest of the year maybe a little bit in the 2015 you’re talking over 100,000 tablets at Applebee’s there is nobody in the United States who has never done that. So this is a major piece of work to put them at the bar and on every table. The whole idea behind putting a pay at the table really addresses the touch point that the consumer has really hates to wait for the check and or it gives the guest more control, but it – it also enables us to add on to the check because it literally is asking people throughout the meal would you like another drink, would you like an appetizer, so it has a tremendous upside we think for sales, but it really lets the guest control the experience and frankly one of the other issues and obviously you’re seeing the media like people don’t want credit card to leave their presence. And this enable them to keep their credit card at all times and with fraud and all the issues that people had in the retail sector with credit cards this is an enabler. So think of tablets is a way to help the guest, enhance their guest experience. Doesn’t takeaway from service, doesn’t takeaway from our fabulous food servers that focus on see-you-tomorrow but it does enable and even better guest experience. Will Slabaugh – Stephens Inc.: Okay thank you very much.

Your next question comes from the line of Chris O’Cull with KeyBanc. Christopher O’Cull – KeyBanc Capital Markets Inc.: Thanks. Julia I was pretty impressed with the number of new products and value options at an Applebee’s location, I recently visited, they were testing some new products and should we expect more new products or value categories promoted to Applebee’s this year than last year?

I think you’ll see six menus again this year at Applebee’s. So that is what we did in 2013, so the actual menus will remain the same but I think it’s fair to say we have beefed up our, no pun intended, we have certainly increased enhanced the level of new products, line extension and continuing to look for value proposition. So I think you will see that throughout the year whether will market and advertise all that remains to be same, but certainly you will some of that on the menu. We are testing a great many ideas and options. So I think you happened to be in the market that does a lot of testing, but you will see that throughout the year. Christopher T. O’Cull – KeyBanc Capital Markets Inc.: Did we see any new categories, menu categories, last year? I mean not just line extensions, but flatbreads are becoming more popular in the industry. I don’t think we saw any last year, is there a possibility that we could see a whole new category, a menu category, this year?

Yes, I think there is definitely testing going on both the line extensions and for categories. And frankly as well additional healthy items and most importantly even the way we procure of them. So we are testing everything from back to the house to front of the house on both aspects of the food, it’s tough to elaborate too much Chris because it’s highly competitive, but think of us as testing an awful lot and we will be able to share that after the fact as we go. Christopher T. O’Cull – KeyBanc Capital Markets Inc.: Okay, I am traveling so I may have missed this, but it didn’t look like – I was a little surprised your company did not raise dividends it initiated roughly a year ago. What is the Board’s thinking regarding the dividend?

In my prepared remarks, I talked about the fact that our current notion was to keep the capital allocation strategy as it was in play in preparation for the possibility to resign. So I think that was sort of our way of saying that we’re going to keep things steady as you go at this point and we will be back to the investment community when we have a better sense on the refi. But remind you that we have even the second – I think we have the second highest yield in the restaurant category industry. Christopher T. O’Cull – KeyBanc Capital Markets Inc.: Okay, great. I apologize, I missed that. And then Tom, what was the composition expense in 2013 I think you said it was down, was it at a targeted level payout bill in 2013 compared I mean versus your budget? And then what are some of the gives and takes for the G&A expense guidance for 2014 that you are targeting?

Well, basically the main driver year-over-year is the stock-based comp went up and then we also have a budgeted merit increases as we typically do. But there is nothing really dramatic going on as we go from 2013 to 2014. Christopher T. O’Cull – KeyBanc Capital Markets Inc.: Okay. It looked like some of the low end of the guidance suggested it could be lower year-over-year though in 2014 than 2013. What would drive that?

Chris T. O’Cull – KeyBanc Capital Markets, Inc.: Okay, sorry about that.

So it could be flat.

.: Chris T. O’Cull – KeyBanc Capital Markets, Inc.: Great, thanks, guys.

Your next question is from the line of Michael Kelter with Goldman Sachs. Ivan P. Holman – Goldman Sachs & Co.: Good morning, it’s Ivan sitting in for Michael. I was hoping to kind of loop back to the question around tabletop technologies or tablets within the store. Can you help us understand why you chose tablets over tabletop technologies, what some of the benefits from that might be? And then you had also mentioned how that could potentially help ticket and speed of service. But how do you see it as a driver, as a catalyst for same-store sales particularly as you try to remediate some of the traffic issues you’ve seen? Thank you.

So maybe I misspoke, but if you’ve seen it and I have shown it on television, it’s a tablet that fits on the table. So I guess it’s both, it’s a tablet, but it’s also a pay at the table device, so it physically fits on the table and you can swipe your credit card through it. So perhaps it’s the best of both world, that technology we have been testing for over two years. And the franchisees entered into an agreement late last year with the vendor. But the notion of what does it do for sales, it does a couple of things, because it automatically asks you if you want to reorder a drink, if you want to order an appetizer or remind you about desert, it does a lot of upselling automatically within it sort of the way it works through. Its algorithm includes automatically upselling to every single guest that comes in. And so the odds of me saying to you that every food server in America automatically upsells a drink and appetizer and desert will be naïve, so the reality is that technology enables 100% of the time that you get upsell and then allows the food server to focus more on value-added items other than just taking orders, spending time with the guests, getting to know the guests, getting to know the guest’s name. This notion of see you tomorrow and all of the work we put into the experience at Applebee’s gets enhanced by this technology. But from a sheer dollars and cents sign, it’s all about the suggested selling and that is literally the guests gets to control their experience. You want to leave and not later for your check, you don’t have to. You don’t want to – you literally want to get out, you are in a hurry and you didn’t tell the food server that, here’s an opportunity to do so. So it has real opportunity for enhancing the guest experience, but it also has real financial benefit, because it’s literally a 100% guaranteed suggested selling at every aspect of the 40, 50-minute experience. Ivan P. Holman – Goldman Sachs & Co.: Okay. Thank you very much.

Your next question comes from the line of Peter Saleh with Telsey Advisory Group. Peter M. Saleh – Telsey Advisory Group LLC: Great, thanks. Good morning. I just wanted to ask about, just going back to the tablets, the functionality on the tablet from day one will it allow you to order from the entire menu or will you be limited in how should we be thinking about I guess functionality as we go through 2014? At what point will you be able to order from the entire menu and/or your drinks, appetizers and the main entrees?

Right, so right now today obviously it is a great question, the functionality will evolve. Today I can do second drink, appetizers and desserts. By the end of the year as we evolve the functionality it will be able to do a lot more and integrate with everything from mobile apps to the like. But right now it’s functionality, the second drink, the appetizer, the dessert and the check. But it will do a whole bunch of interaction by the end of the year 2015 interacting with everything from social media to mobile app you name it. It is an evolving technology. Peter Soleil – Kelsey Advisory Group: And can you just talk a little bit about the cost behind this? How much cost you’re putting up versus your partner? What cost is this to your CapEx or your G&A budget?

So there are no cost in any of the line items for the corporation, we don’t have any cost other than the flight cost it would be for our 23 company operated restaurants. But the way to think about the cost is our franchisees have the interaction as I said earlier they sign the contract with the vendor and there is minimal to zero cost, because and the functionality of the tablet is gains and so forth that people can pay for nominal amount. Peter Soleil – Kelsey Advisory Group: Great, thank you very much.

Your next question is from the line of Amod Gautum with JPMorgan. John Ivankoe – JPMorgan Chase & Co.: Hi, thank you. I am on for John Ivankoe. Julia I wanted to punch it in first on the commentary you made around the Applebee’s comp guidance, which as I understand sounds like it’s primarily driven by the first quarter’s weather. I think this is still one of the lower guides to comps for 2014 across the major players in the industry. So is it basically fair to assume that maybe the first quarter would be below the guidance and then you kind of normalized back to that in the subsequent quarters? Could you give us more contexts around why a negative 2% comp might occur for the year just given what happened in the first quarter?

So we don’t guide quarter-to-quarter, we guide for the year and we obviously look at all the factors inherent in the business, I think all of us believe it’s a realistic assessment of the guidance and I think it’s fair to say the economic environment is still lumpy and bumpy. So we thought the guidance was realistic in terms of where we were today and what we were looking at for the year. Certainly for whatever reason it changes dramatically as we’ve done in the past, we would certainly re-guide, but I think right now we think that’s the realistic assessment. John Ivankoe – JPMorgan Chase & Co.: Okay, fair enough. And then thanks for quantifying the numbers around the make whole payment, that was very helpful. Could you just help us understand what drives your thinking around whether that event would just be a refinancing as opposed to potentially taking leverage higher?

Well, that’s a decision we have to make at a time. I couldn’t even – about that now, because it depends on what type of instruments are available to us and what the credit markets are like at that time. So it’s little premature to say that. But it’s a good question and it’s one that we will be answering as we move forward. John Ivankoe – JPMorgan Chase & Co.: Okay. And if just slip one more in the color that you gave on our Franchisee segment profit guidance, I think back of the envelope calculation with gross unit growth in the comps kind of seems to imply that it would be, you could potentially get above that range, so is there any commentary you could give us around maybe unit closures in 2014 or franchise expenses or margins offset?

So let me try to take out the top level and then let Tom try to fill at the top. The guidance on Applebee’s was 40 to 50 restaurants being developed. And we’ve right now the plan is on both brands to have a handful of closures, we don’t have anything major plan for this year, franchisee to franchisee sales as we said in the prepared remarks, nothing of influence or substance of nature on the franchisee to franchisee sales of transfers. Our business sometimes is hard to tell, but right now the day we have nothing major planned or guided in that’s a good level. John Ivankoe – JPMorgan Chase & Co.: Okay.

I don’t know if you wanted to add to that. Enough, okay. John Ivankoe – JPMorgan Chase & Co.: Okay, thanks very much.

Your next question is from the line of Michael Gallo with CL King. Michael W. Gallo – CL King & Associates, Inc.: Hi, good morning. Julia question I have is just on broad-based kind of high level on the Applebee’s brand. You’ve obviously done a lot over the last three or four years with the revamps of the menu and improvement in the products all the remodels which think over 75% of the stores, it’s driving really being able to guess that guest traffic piece going, so I was wondering if you look from a high level what areas you think Applebee’s still has room to improve or is still falling short and how you plan to address those in 2014 and beyond? Thanks.

So it’s a fair comment that we have had several years of comp growth and done a great job on that. And this is the past year or the first year we saw some decline in that. Traffic has been getting it in the positive trajectory as has been all of casual dining has not been as easy and as forthright, and I think it is fair to say, it’s the work I mentioned earlier when someone else asked the question. It’s really focused on differentiating both the brand and the experience, so that’s everything from the service platform to the food, some of the work we’re talking about with the technology. But really looking at everything from the menu to the technology obviously that’s the next step that we’re taking and the experience at the bar, everything that we’re doing is focused on differentiating the brand and I think what we’re doing is trying to take advantage of where we are starting to see the traffic increases and exploring those opportunities throughout the year in 2014 as that makes sense to you. Michael W. Gallo – CL King & Associates, Inc.: It does. And then perhaps I missed it, did you give a closings number expectation of either other brands? Or can we assume smaller numbers or…

No, I had handful, no what I said in my Q&A was a handful, right now what’s planned as a handful of both brands is nothing material. Michael W. Gallo – CL King & Associates, Inc.: Right, okay thank you.

Ladies and gentlemen this concludes the question-and-answer portion of today’s event. I would like to turn the call back over to Julia Stewart, Chairman and CEO.

Thanks operator and thank you for participating this morning. Our next reporting date is scheduled for May 1, 2014. If you have any questions in the meantime, as always feel free to call Ken, Tom or myself. Thank you so much.

Thank you so much for your participation today. And this does conclude the presentation. And you may now disconnect. Have a great day.