Dine Brands Global Inc

Previous wording

Through various subsidiaries, we own and franchise the Applebee's Neighborhood Grill & Bar® (“Applebee's”) concept in the American full-service segment within the casual dining category of the restaurant industry, the International House of Pancakes® (“IHOP”) concept in the mid-scale full-service restaurant segment within the family dining category of the restaurant industry, and the Fuzzy's Taco Shop®(“Fuzzy's”) concept in the Mexican limited-service restaurant segment within the fast-casual dining category of the restaurant industry. References herein to Applebee's®, IHOP® and Fuzzy's Taco Shop® restaurants are to these three restaurant concepts, whether operated by franchisees, area licensees and their sub-licensees (collectively, “area licensees”) or by us. With close to 3,600 restaurants, we believe we are one of the largest full-service restaurant companies in the world.

Current wording

Through various subsidiaries, we own and franchise the Applebee's Neighborhood Grill & Bar® (“Applebee's”) concept in the American full-service segment within the casual dining category of the restaurant industry, the International House of Pancakes® (“IHOP”) concept in the mid-scale full-service restaurant segment within the family dining category of the restaurant industry, and the Fuzzy's Taco Shop®(“Fuzzy's”) concept in the Mexican limited-service restaurant segment within the fast-casual dining category of the restaurant industry. References herein to Applebee's®, IHOP® and Fuzzy's Taco Shop® restaurants are to these three restaurant concepts, whether operated by franchisees, area licensees and their sub-licensees (collectively, “area licensees”) or by us. With over 3,500 restaurants, we believe we are one of the largest full-service restaurant companies in the world.

Previous wording

The effective tax rate for the three and six months ended June 30, 2024 was higher than the rate of the comparable prior periods primarily due to a lower tax deduction related to stock-based compensation.

Current wording

The effective tax rate for the three and nine months ended September 30, 2024 was higher than the rate of the comparable prior periods primarily due to a lower tax deduction related to stock-based compensation.

Previous wording

The following table highlights the primary components of the increase (decrease) in our income before income taxes for the three and six months ended June 30, 2024, compared to our income before income taxes for the comparable prior periods (in millions):

Current wording

The following table highlights the primary components of the increase (decrease) in our income before income taxes for the three and nine months ended September 30, 2024, compared to our income before income taxes for the comparable prior periods (in millions):

Previous wording

Total gross profit for the three months ended June 30, 2024 increased compared with the same period of the prior year due to increased IHOP franchise operations, partially offset by decreased Fuzzy's franchise operations. In addition, income before income taxes for the three months ended June 30, 2024 increased compared to the prior year period due to a lower loss on disposition of assets, a loss on extinguishment of debt in the same period in the prior year, and decreased G&A expenses. The decrease in G&A expenses was primarily attributable to the prior year period expense related to the stopping of the IHOP Flip'd initiative, partially offset by an increase in compensation-related expenses and an increase in depreciation expense.

Current wording

Total gross profit for the nine months ended September 30, 2024 decreased compared with the same period of the prior year due to decreased revenue from franchise and rental operations and increased franchisor advertising contribution. In addition, income before income taxes for the nine months ended September 30, 2024 decreased compared to the prior year period due to increased interest expense, offset by a decrease in G&A expenses, a loss on disposition of assets in the same period in the prior year. The increase in interest expense primarily related to higher-rate securitized notes and borrowings from our revolving line of credit. The decrease in G&A expenses is primarily attributable to expenses related to the stopping of the IHOP Flip'd initiative in the same period of the prior year, a decrease in professional services, a decrease in occupancy costs, and a decrease in compensation-related expenses, offset by an increase in depreciation expense (see G&A Expenses section below for further detail). The decrease in impairment charges is primarily related to the technology that was developed in connection with the IHOP Flip'd initiative that was stopped and the impairment of four IHOP master land and building leases in the same period of the prior year.

Previous wording

See“Consolidated Results of Operations - Comparison of the Three and Six Months Ended June 30, 2024 and 2023” for additional discussion of the changes shown above.

Current wording

See“Consolidated Results of Operations - Comparison of the Three and Nine Months Ended September 30, 2024 and 2023” for additional discussion of the changes shown above.

Previous wording

Our key performance indicators for the three and six months ended June 30, 2024 were as follows:

Current wording

Our key performance indicators for the three and nine months ended September 30, 2024 were as follows:

Previous wording

(1) Franchise and area license restaurant closings, net of openings, during the three and six months ended June 30, 2024.

Current wording

(1) Franchise and area license restaurant closings, net of openings, during the three and nine months ended September 30, 2024.

Previous wording

(2) Change in the weighted average number of franchise, area license and company-operated restaurants open during the three and six months ended June 30, 2024, compared to the weighted average number of those open during the same periods of 2023.

Current wording

(2) Change in the weighted average number of franchise, area license and company-operated restaurants open during the three and nine months ended September 30, 2024, compared to the weighted average number of those open during the same periods of 2023.

Previous wording

Based on data from Black Box Intelligence, a restaurant sales reporting firm (“Black Box”), Applebee's same-restaurant sales for the three and six months ended June 30, 2024 underperformed the casual dining segment of the restaurant industry (excluding Applebee's) during the same period.

Current wording

Based on data from Black Box Intelligence, a restaurant sales reporting firm (“Black Box”), Applebee's same-restaurant sales for the three and nine months ended September 30, 2024 underperformed the casual dining segment of the restaurant industry (excluding Applebee's) during the same period.

Previous wording

Based on data from Black Box, IHOP's decrease in same-restaurant sales for the three and six months ended June 30, 2024 underperformed the family dining segment of the restaurant industry (excluding IHOP) during the same period.

Current wording

Based on data from Black Box, IHOP's decrease in same-restaurant sales for the three and nine months ended September 30, 2024 underperformed the family dining segment of the restaurant industry (excluding IHOP) during the same period.

Previous wording

(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.

Current wording

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

Previous wording

(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 during both fiscal periods that are being compared and have been open for at least 18 months. Because of new restaurant openings and restaurant closures, the domestic restaurants open throughout both fiscal periods being compared may be different from period to period.

Current wording

(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 period, for domestic restaurants that have been operated during both periods that are being compared and have been open for at least 18 months. Because of new restaurant openings and restaurant closures, the domestic restaurants open throughout both fiscal periods being compared may be different from period to period.

Previous wording

The restaurant counts and activity presented above do not include one domestic Applebee's ghost kitchen (small kitchens with no store-front presence, used to fill off-premise orders), eight international Applebee's ghost kitchens and 38 international IHOP ghost kitchens.

Current wording

The restaurant counts and activity presented above include 13 dual-branded international Applebee's and IHOP restaurants at September 30, 2024, and six dual-branded international Applebee's and IHOP restaurants at September 30, 2023, which are tabulated in both brands’ activities. Dual-branded restaurants are defined as restaurants that run two of our concepts and share an entrance, front of the house staff and a kitchen. The restaurant counts and activity presented above do not include one domestic Applebee's ghost kitchen (small kitchens with no store-front presence, used to fill off-premise orders), seven international Applebee's ghost kitchens and 34 international IHOP ghost kitchens.

Previous wording

Total revenue for the three and six months ended June 30, 2024 decreased compared with the same periods of the prior year, primarily due to the decrease in franchise and rental operations revenue. The decrease in franchise operations revenue was primarily attributable to the decrease in domestic same-restaurant sales and the decrease in the number of Applebee's and Fuzzy's effective restaurants, partially offset by increases in the number of effective restaurants and proprietary product sales at IHOP. Rental operations revenue for the three months ended June 30, 2024 decreased compared with the same period of the prior year, primarily due to early lease termination and a decrease in variable sublease income. Rental operations revenue for the six months ended June 30, 2024 decreased compared with the same period of the prior year, primarily due to prior year lease buyouts.

Current wording

Total revenue for the three and nine months ended September 30, 2024 decreased compared with the same periods of the prior year, primarily due to the decrease in franchise and rental operations revenue. The decrease in franchise operations revenue was primarily attributable to the decrease in domestic same-restaurant sales and the decrease in the number of Applebee's and Fuzzy's effective restaurants, partially offset by increases in the number of effective restaurants and proprietary product sales at IHOP. Rental operations revenue for the three months ended September 30, 2024 decreased compared with the same period of the prior year, primarily due to operating lease terminations and a decrease in percentage rent. Rental operations revenue for the nine months ended September 30, 2024 decreased compared with the same period of the prior year, primarily due to prior year lease buyouts and operating lease terminations.

Previous wording

Applebee's franchise fee revenue for the three months ended June 30, 2024 decreased 3.1% as compared with the same period of the prior year, primarily attributable to the unfavorable impact on royalties of a 1.8% decrease in domestic same-restaurant sales and the decrease in the number of effective franchise restaurants, offset by an increase in accelerated franchise fee revenue recognition due to restaurant closures. Applebee's franchise fee revenue for the six months ended June 30, 2024 decreased 4.0% as compared with the same period of the prior year, primarily attributable to the unfavorable impact on royalties of a 3.2% decrease in domestic same-restaurant sales and the decrease in the number of effective franchise restaurants, offset by an increase in accelerated franchise fee recognition due to restaurant closures.

Current wording

Applebee's franchise fee revenue for the three months ended September 30, 2024 decreased 4.0% as compared with the same period of the prior year, primarily attributable to the unfavorable impact on royalties of a 5.9% decrease in domestic same-restaurant sales and a decrease in the number of effective franchise restaurants, offset by improved collections from international franchisees. Applebee's franchise fee revenue for the nine months ended September 30, 2024 decreased 4.0% as compared with the same period of the prior year, primarily attributable to the unfavorable impact on royalties of a 4.1% decrease in domestic same-restaurant sales and the decrease in the number of effective franchise restaurants, offset by an increase in accelerated franchise fee recognition due to restaurant closures.

Previous wording

IHOP's franchise fee revenue for the three and six months ended June 30, 2024 increased 2.5% and 1.8%, respectively, as compared with the same periods of the prior year, primarily due to an increase in the number of effective franchise restaurants and an increase in proprietary product sales, partially offset by a decrease in same-restaurant sales (1.4% and 1.5% decrease in same-restaurant sales, respectively) and a decrease in virtual brand revenue.

Current wording

IHOP's franchise fee revenue for the three months ended September 30, 2024 decreased 1.3% as compared with the same period of the prior year, primarily due to a decrease in domestic same-restaurant sales of 2.1% and a decrease in licensing revenue, partially offset by an increase in the number of effective franchise restaurants and proprietary product sales. IHOP's franchise fee revenue for the nine months ended September 30, 2024 increased 0.8%, as compared with the same period of the prior year, primarily due to an increase in proprietary product sales and the number of effective franchise restaurants, partially offset by a 1.7% decrease in domestic same-restaurant sales and a decrease in virtual brand revenue.

Previous wording

IHOP's franchise expenses for the three and six months ended June 30, 2024 decreased $1.6 million and $0.9 million, respectively, as compared with the same periods of the prior year, primarily due to a decrease in bad debt expense and a decrease in franchisee IT support costs offset by an increase in franchisor advertising contribution.

Current wording

IHOP's franchise expenses for the three months ended September 30, 2024 increased $0.6 million as compared with the same period of the prior year, primarily due to an increase in bad debt expense and an increase in the cost of proprietary product sales. IHOP's franchise expenses for the nine months ended September 30, 2024 decreased $0.2 million as compared with the same period of the prior year, primarily due to a decrease in bad debt expense and a decrease in franchisee IT support costs, partially offset by an increase in franchisor advertising contribution.

Previous wording

Fuzzy's franchise expenses for the three and six months ended June 30, 2024 increased $1.6 million and $2.6 million, respectively, compared with the same periods of the prior year, primarily due to an increase in franchisor advertising contribution and an increase in bad debt expense.

Current wording

Fuzzy's franchise expenses for the three months ended September 30, 2024 decreased $0.2 million as compared with the same period of the prior year primarily due to a decrease in the cost of proprietary product sales. Fuzzy's franchise expenses for the nine months ended September 30, 2024 increased $2.4 million as compared with the same period of the prior year primarily due to an increase in franchisor advertising contribution and an increase in bad debt expense.

Previous wording

Applebee's advertising revenues and expenses for the three months ended June 30, 2024 decreased 2.8% compared to the same period of the prior year primarily due to the decrease in the number of effective franchise restaurants and the decrease in their respective domestic franchise same-restaurant sales. IHOP advertising revenues and expenses for the three months ended June 30, 2024 decreased 0.6% compared to the same period of the prior year, primarily due to a 1.4% decrease in same-restaurant sales, partially offset by an increase in the number of effective franchise restaurants.

Current wording

Applebee's advertising revenues and expenses for the three months ended September 30, 2024 decreased 6.7% compared to the same period of the prior year primarily due to a 5.9% decrease in domestic franchise same-restaurant sales and a decrease in the number of effective franchise restaurants. IHOP advertising revenues and expenses for the three months ended September 30, 2024 decreased 2.2% compared to the same period of the prior year, primarily due to a 2.1% decrease in same-restaurant sales, partially offset by an increase in the number of effective franchise restaurants.

Previous wording

Applebee's advertising revenues and expenses for the six months ended June 30, 2024 decreased 3.5% compared to the same period of the prior year primarily due to a 3.2% decrease in domestic franchise same-restaurant sales and decrease in the number of effective franchise restaurants. IHOP's advertising revenues and expenses for the six months ended June 30, 2024 decreased as compared with the same period of the prior year, primarily due to an increase in the number of effective franchise restaurants and partially offset by a 1.5% decrease in same-restaurant sales.

Current wording

Applebee's advertising revenues and expenses for the nine months ended September 30, 2024 decreased 4.5% compared to the same period of the prior year primarily due to a 4.1% decrease in domestic franchise same-restaurant sales and decrease in the number of effective franchise restaurants. IHOP's advertising revenues and expenses for the nine months ended September 30, 2024 decreased 0.7% as compared with the same period of the prior year, primarily due to a 1.7% decrease in same-restaurant sales partially offset by an increase in the number of effective franchise restaurants.

Previous wording

Rental operations gross profit for the three months ended June 30, 2024 increased as compared to the same period of the prior year, primarily due to operating lease renewals and extensions and an increase in percentage rent.

Current wording

Rental operations gross profit for the three months ended September 30, 2024 decreased compared with the same period of the prior year, primarily due to operating lease terminations and a decrease in percentage rent.

Previous wording

Rental operations gross profit for the six months ended June 30, 2024 decreased as compared to the same period of the prior year, primarily due to prior year lease buyouts partially offset by lease renewals and extensions.

Current wording

Rental operations gross profit for the nine months ended September 30, 2024 decreased as compared to the same period of the prior year, primarily due to prior year lease buyouts and operating lease terminations.

Previous wording

For the three and six months ended June 30, 2023, company restaurant operations consisted of three Fuzzy's restaurants that were acquired in December 2022, of which two were subsequently refranchised in the second quarter of 2023. Company segment restaurant expenses may include costs associated with reacquired restaurants in the process of being refranchised. There were no reacquired restaurants expenses during the six months ended June 30, 2024 and 2023.

Current wording

For the three and nine months ended September 30, 2023, company restaurant operations consisted of three Fuzzy's restaurants that were acquired in December 2022, of which two were subsequently refranchised in the second quarter of 2023. Company segment restaurant expenses may include costs associated with reacquired restaurants in the process of being refranchised. There were no reacquired restaurants expenses during the nine months ended September 30, 2024 and 2023.

Previous wording

Financing revenues primarily consist of interest income from the financing of IHOP equipment leases and franchise fees as well as interest income on notes receivable due from franchisees. Financing expenses are sales and use taxes related to IHOP equipment leases. Financing revenue and gross profit for the three and six months ended June 30, 2024 declined compared to the same periods of the prior year, primarily due to progressive decline in interest income as note balances are repaid.

Current wording

Financing revenues primarily consist of interest income from the financing of IHOP equipment leases and franchise fees as well as interest income on notes receivable due from franchisees. Financing expenses are sales and use taxes related to IHOP equipment leases. Financing revenue and gross profit for the three and nine months ended September 30, 2024 declined compared to the same periods of the prior year, primarily due to progressive decline in interest income as note balances are repaid.

Previous wording

G&A expenses for the six months ended June 30, 2024 increased 0.1% compared to the same period of the prior year, primarily due to an increase in stock-based compensation, depreciation and severance expense offset by the stopping of the IHOP Flip’d initiative in the prior period and a decrease in occupancy costs.

Current wording

G&A expenses for the nine months ended September 30, 2024 decreased 2.1% compared to the same period of the prior year, primarily due to a decrease in incentive compensations, expenses related to the stopping of the IHOP Flip'd initiative in the same period of the prior year, a decrease in professional services and a decrease in occupancy costs, offset by an increase in stock-based compensation, depreciation expense and severance costs.

Previous wording

Interest expense, net for the three months ended June 30, 2024 increased compared to the same periods of the prior year, primarily due to the higher interest rate on our refinanced securitized notes as well as on our Credit Facility, offset by higher interest income.

Current wording

Interest expense, net for the nine months ended September 30, 2024 increased compared to the same periods of the prior year, primarily due to the higher interest rate on our refinanced securitized notes as well as on our Credit Facility, partially offset by the increase in interest income from improved yields.

Previous wording

The Company repaid the entire outstanding balance of approximately $585.1 million of its 2019 Class A-2 Notes during the three months ended June 30, 2023 and recognized a $1.7 million loss on extinguishment of debt from the write-off of the related remaining issuance costs. This loss was offset by a $1.7 million gain on extinguishment of debt from the purchase of $67.9 million of its 2019 Class A-2 Notes under par during the six months ended June 30, 2023.

Current wording

The Company repaid the entire outstanding balance of approximately $585.1 million of its 2019 Class A-2 Notes during the nine months ended September 30, 2023 and recognized a $1.7 million loss on extinguishment of debt from the write-off of the related remaining issuance costs. This loss was offset by a $1.7 million gain on extinguishment of debt from the purchase of $67.9 million of its 2019 Class A-2 Notes under par during the nine months ended September 30, 2023.

Previous wording

The loss on disposition of assets for the three and six months ended June 30, 2023 primarily related to the disposition of certain IHOP Flip'd assets.

Current wording

The loss on disposition of assets for the three and nine months ended September 30, 2023 primarily related to the disposition of certain IHOP Flip'd assets.

Previous wording

Our income tax provision or benefit will vary from period to period in our normal course of business for two reasons: a change in income before income taxes and a change in the effective tax rate. Changes in our income before income taxes were addressed in the preceding sections of“Consolidated Results of Operations - Comparison of the Three and Six Months Ended June 30, 2024 and 2023."

Current wording

Our income tax provision or benefit will vary from period to period in our normal course of business for two reasons: a change in income before income taxes and a change in the effective tax rate. Changes in our income before income taxes were addressed in the preceding sections of“Consolidated Results of Operations - Comparison of the Three and Nine Months Ended September 30, 2024 and 2023."

Previous wording

Our effective tax rate for the three and six months ended June 30, 2024 was higher than the rate of the comparable prior periods primarily due to a lower tax deduction related to stock-based compensation.

Current wording

Our effective tax rate for the three and nine months ended September 30, 2024 was higher than the rate of the comparable prior periods primarily due to a lower tax deduction related to stock-based compensation.

Previous wording

While the Class A-2 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. As of June 30, 2024, our leverage ratio was approximately 4.2x. Therefore, quarterly principal payments are not required.

Current wording

While the Class A-2 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. As of September 30, 2024, our leverage ratio was approximately 4.1x. Therefore, quarterly principal payments are not required.

Previous wording

We may voluntarily repay the Class A-2 Notes at any time; however, if repaid prior to certain dates we would be required to pay make-whole premiums. As of June 30, 2024, there was no make-whole premium associated with voluntary prepayment of the 2019 Class A-2-II Notes. As of June 30, 2024, the make-whole premium associated with voluntary prepayment of the 2023 Class A-2 Notes was approximately $29.7 million. We also would be subject to a make-whole premium in the event of a mandatory prepayment required following certain rapid amortization events or certain asset dispositions. The mandatory make-whole premium requirements are considered derivatives embedded that must be bifurcated for separate valuation. We estimated the fair value of these derivatives to be immaterial as of June 30, 2024, based on the probability-weighted discounted cash flows associated with either event.

Current wording

We may voluntarily repay the Class A-2 Notes at any time; however, if repaid prior to certain dates we would be required to pay make-whole premiums. As of September 30, 2024, there was no make-whole premium associated with voluntary prepayment of the 2019 Class A-2-II Notes. As of September 30, 2024, the make-whole premium associated with voluntary prepayment of the 2023 Class A-2 Notes was approximately $37.8 million. We also would be subject to a make-whole premium in the event of a mandatory prepayment required following certain rapid amortization events or certain asset dispositions. The mandatory make-whole premium requirements are considered derivatives embedded that must be bifurcated for separate valuation. We estimated the fair value of these derivatives to be immaterial as of September 30, 2024, based on the probability-weighted discounted cash flows associated with either event.

Previous wording

As of June 30, 2024, the outstanding balance of the Credit Facility was $100 million. The amount of $1.9 million was pledged against the Credit Facility for outstanding letters of credit, leaving $223.1 million of the Credit Facility available for borrowing at June 30, 2024. It is anticipated that any principal and interest on the Credit Facility outstanding will be repaid in full on or prior to the quarterly payment date in June 2027, subject to two additional one-year extensions at the option of the Company upon the satisfaction of certain conditions. The letters of credit are used primarily to satisfy insurance-related collateral requirements. The weighted average interest rate on Credit Facility borrowings for the period outstanding during the six months ended June 30, 2024 was 7.94%.

Current wording

As of September 30, 2024, the outstanding balance of the Credit Facility was $100 million. The amount of $0.6 million was pledged against the Credit Facility for outstanding letters of credit, leaving $224.4 million of the Credit Facility available for borrowing at September 30, 2024. It is anticipated that any principal and interest on the Credit Facility outstanding will be repaid in full on or prior to the quarterly payment date in June 2027, subject to two additional one-year extensions at the option of the Company upon the satisfaction of certain conditions. The letters of credit are used primarily to satisfy insurance-related collateral requirements. The weighted average interest rate on Credit Facility borrowings for the period outstanding during the nine months ended September 30, 2024 was 7.93%.

Previous wording

Dividends declared and paid per share for the three and six months ended June 30, 2024 and 2023 were as follows:

Current wording

Dividends declared and paid per share for the three and nine months ended September 30, 2024 and 2023 were as follows:

Previous wording

During the six months ended June 30, 2024 and 2023, the Company paid dividends of $15.7 million and $16.0 million, respectively.

Current wording

During the nine months ended September 30, 2024 and 2023, the Company paid dividends of $23.5 million and $31.7 million, respectively.

Previous wording

During the six months ended June 30, 2024, the Company repurchased 269,621 shares of common stock at a cost of $12.0 million. Cumulatively, the Company has repurchased 1,865,399 shares at a cost of $116.7 million under the 2022 Repurchase Program.

Current wording

During the nine months ended September 30, 2024, the Company repurchased 269,621 shares of common stock at a cost of $12.0 million. Cumulatively, the Company has repurchased 1,865,399 shares at a cost of $116.7 million under the 2022 Repurchase Program.

Previous wording

From time to time, we also repurchase shares owned and tendered by employees to satisfy tax withholding obligations on the vesting of restricted stock awards. Shares are deemed purchased at the closing price of our common stock on the vesting date. See Part II, Item 2 for detail on this stock repurchase activity during the six months ended June 30, 2024.

Current wording

From time to time, we also repurchase shares owned and tendered by employees to satisfy tax withholding obligations on the vesting of restricted stock awards. Shares are deemed purchased at the closing price of our common stock on the vesting date. See Part II, Item 2 for detail on this stock repurchase activity during the nine months ended September 30, 2024.

Previous wording

In summary, our cash flows for the six months ended June 30, 2024 and June 30, 2023 were as follows:

Current wording

In summary, our cash flows for the nine months ended September 30, 2024 and September 30, 2023 were as follows:

Previous wording

Cash provided by operating activities is primarily driven by revenues earned and collected from our franchisees, and profit from our rental operations, financing operations and our company-owned restaurant. Cash provided by operating activities increased $9.5 million during the six months ended June 30, 2024 compared to the same period of the prior year. This increase was primarily attributable to a favorable increase in working capital resulting primarily from a shift in timing of marketing payments, partially offset by a decrease in gross segment profit as discussed in the preceding sections of this MD&A.

Current wording

Cash provided by operating activities is primarily driven by revenues earned and collected from our franchisees, and profit from our rental operations, financing operations and our company-owned restaurant. Cash provided by operating activities decreased $1.6 million during the nine months ended September 30, 2024 compared to the same period of the prior year. This decrease was primarily attributable to a decrease in gross segment profit partially offset by a decrease in G&A expenses, as discussed in the preceding sections of this MD&A, and a favorable increase in working capital.

Previous wording

Investing activities used net cash of $1.1 million for the six months ended June 30, 2024 compared to investing activities provided net cash of $16.6 million for the six months ended June 30, 2023. The decrease was primarily attributable to a decrease in capital expenditures compared to the same period of the prior year. The Company increased spending in information technology and other projects in fiscal year 2023.

Current wording

Investing activities used net cash of $0.7 million for the nine months ended September 30, 2024 compared to $26.6 million for the nine months ended September 30, 2023. The decrease in cash used by investing activities of $25.9 million was primarily attributable to a decrease in capital expenditures compared to the same period of the prior year, partially offset by an increase in principal receipts from notes and equipment contracts receivables. The Company increased spending in information technology and other projects in fiscal year 2023.