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On November 29, 2007, IHOP Corp. successfully completed the acquisition of Applebee’s International, Inc. for $25.50 per share in cash, representing a total transaction value of approximately $2.1 billion. With more than 3,250 restaurants, the combination brings together two leading restaurant brands and creates the largest full service restaurant company in the world. IHOP Corp. believes the acquisition of Applebee’s, which now operates as a wholly-owned subsidiary of the Company, represents an opportunity to create significant long-term value for IHOP Corp. shareholders over and above what the Company could had achieved on a standalone basis. Additionally, IHOP believes that its core competencies of re-energizing restaurant brands, franchising and expense management are ideally suited to improve Applebee’s overall brand and financial health.

Over the last five years, IHOP Corp. has successfully re-energized the IHOP brand while transforming its restaurant system into one which is 99% franchised. IHOP Corp. believes that it can employ similar strategies to transform and re-energize Applebee’s. IHOP Corp. intends to franchise a substantial majority of Applebee’s company-operated restaurants and expects to realize significant cost savings as a result. Additionally, management intends to take a comprehensive approach to re-energizing the Applebee’s brand with the goal of returning to positive system-wide same-store sales growth over time as enhanced marketing and operational strategies take hold. This fundamental business transformation, along with the plan to sell Applebee’s-owned real estate, is expected to significantly enhance IHOP Corp.’s cash generating profile.