Dine Brands Global, Inc.DIN
Dine Brands Global, Inc. Income Taxes Disclosure
Income Taxes
The income from continuing operations before income taxes and provision (benefit) for income taxes for the years ended December 28, 2025, December 29, 2024 and December 31, 2023 was as follows:
Income from continuing operations before income tax expense (benefit) | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (In millions) | ||||||||||||||||||||
U.S.(1) | $ | 24.9 | $ | 88.7 | $ | 110.9 | ||||||||||||||
Foreign | 0.3 | 0.8 | 0.8 | |||||||||||||||||
Total | $ | 25.2 | $ | 89.5 | $ | 111.7 | ||||||||||||||
Income tax expense (benefit) from continuing operations | ||||||||||||||||||||
Current | 2025 | 2024 | 2023 | |||||||||||||||||
Federal | $ | 7.2 | $ | 25.0 | $ | 25.6 | ||||||||||||||
State | 2.7 | 3.8 | 0.6 | |||||||||||||||||
Foreign(1) | 1.6 | 2.0 | 2.2 | |||||||||||||||||
Total Current | 11.5 | 30.8 | 28.4 | |||||||||||||||||
Deferred | ||||||||||||||||||||
Federal | (2.1) | (8.1) | (1.2) | |||||||||||||||||
State | (1.3) | 2.0 | (12.6) | |||||||||||||||||
Total Deferred | (3.4) | (6.1) | (13.8) | |||||||||||||||||
Total income tax expense | ||||||||||||||||||||
Federal | 5.1 | 16.9 | 24.4 | |||||||||||||||||
State | 1.4 | 5.8 | (12.1) | |||||||||||||||||
Foreign | 1.6 | 2.0 | 2.2 | |||||||||||||||||
Provision (benefit) for income taxes | $ | 8.1 | $ | 24.7 | $ | 14.5 | ||||||||||||||
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(1) Certain foreign-source income is included in U.S. income from continuing operations before income tax expense, while the related withholding taxes are recorded within foreign income tax expense from continuing operations.
The provision (benefit) for income taxes differs from the statutory Federal income tax for the years ended December 28, 2025, December 29, 2024 and December 31, 2023 as follows:
| 2025 | ||||||||||||||
Amount (in millions) | Percent (%) | |||||||||||||
| U.S Federal statutory tax rate | $ | 5.3 | 21.0 | % | ||||||||||
State and local income taxes, net of federal(1) | $ | 2.0 | 7.8 | % | ||||||||||
Foreign tax effects | ||||||||||||||
| Mexico | ||||||||||||||
| Withholding taxes | 0.5 | 2.0 | % | |||||||||||
| Puerto Rico | ||||||||||||||
| Withholding taxes | 0.3 | 1.4 | % | |||||||||||
Canada | ||||||||||||||
| Withholding taxes | 0.3 | 0.8 | % | |||||||||||
| Other jurisdictions | 0.5 | 2.3 | % | |||||||||||
Total foreign tax effects | $ | 1.6 | 6.5 | % | ||||||||||
| Effect of changes in tax laws or rates enacted in the current period | — | — | % | |||||||||||
Effect of cross-border tax laws | ||||||||||||||
| Foreign tax credit | (1.5) | (6.1) | % | |||||||||||
| Foreign-derived intangible income (FDII) | (0.3) | (1.0) | % | |||||||||||
Total effect of cross-border tax laws | $ | (1.8) | (7.1) | % | ||||||||||
Tax credits | ||||||||||||||
| R&D tax credit | (0.6) | (2.4) | % | |||||||||||
| FICA tip credit | (0.4) | (1.6) | % | |||||||||||
Total tax credits | $ | (1.0) | (4.0) | % | ||||||||||
| Changes in valuation allowances | $ | 0.4 | 1.6 | % | ||||||||||
Nontaxable or nondeductible items | ||||||||||||||
| Nondeductible stock compensation | 1.3 | 5.3 | % | |||||||||||
| Nondeductible officer's compensation | 0.9 | 3.8 | % | |||||||||||
| Other nontaxable or nondeductible items | 0.1 | 0.3 | % | |||||||||||
Total nontaxable or nondeductible items | $ | 2.3 | 9.3 | % | ||||||||||
| Changes in unrecognized tax benefits | $ | (0.8) | (3.2) | % | ||||||||||
| Other adjustments | $ | 0.1 | 0.1 | % | ||||||||||
| Income tax expense | $ | 8.1 | 32.0 | % | ||||||||||
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(1) State taxes in GA, TX, NJ and MI made up the majority (greater than 50%) of the tax effect in this category.
| 2024 | 2023 | |||||||||||||
| Statutory federal income tax rate | 21.0 | % | 21.0 | % | ||||||||||
| Non-deductibility of goodwill | 0.4 | — | ||||||||||||
| Non-deductibility of officer's compensation | 1.1 | 1.1 | ||||||||||||
| State and other taxes, net of federal tax benefit | 3.9 | 3.8 | ||||||||||||
| State income tax audit settlement | — | (13.5) | ||||||||||||
| Excess tax deficiencies or (benefits) | 1.2 | (0.7) | ||||||||||||
| Change in unrecognized tax benefits | — | 1.1 | ||||||||||||
| Change in valuation allowance | 0.8 | 0.7 | ||||||||||||
| Changes in tax rates and state tax laws | 0.6 | — | ||||||||||||
| General business credits | (0.7) | (0.7) | ||||||||||||
| Other | (0.8) | 0.2 | ||||||||||||
| Effective tax rate | 27.5 | % | 13.0 | % | ||||||||||
The Company or one of its subsidiaries files federal income tax returns and tax returns in various state and international jurisdictions. With few exceptions, the Company is no longer subject to federal tax examinations by tax authorities for years before 2022 and state or non-United States tax examinations by tax authorities for years before 2020.
Disclosed below is a summary of income taxes paid, net of refunds by jurisdiction for the year ended December 28, 2025:
(in millions) | ||||||||
| United States - Federal | $ | 10.9 | ||||||
United States - State and local(1) | 3.3 | |||||||
| Total U.S. Federal, State and local | $ | 14.2 | ||||||
Foreign(1) | 1.7 | |||||||
| Total income taxes paid, net of refunds | $ | 15.9 | ||||||
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(1) The amount of income taxes paid during the year for state and foreign does not meet the 5% disaggregation threshold.
Net deferred tax assets (liabilities) as of December 28, 2025 and December 29, 2024 consisted of the following components:
| 2025 | 2024 | |||||||||||||
| (In millions) | ||||||||||||||
| Lease liabilities | $ | 102.2 | $ | 104.3 | ||||||||||
| Employee compensation | 10.9 | 8.8 | ||||||||||||
Deferred revenue | 37.8 | 38.9 | ||||||||||||
| Tax attributes | 13.2 | 13.5 | ||||||||||||
| Other | 13.8 | 8.1 | ||||||||||||
| Deferred tax assets | $ | 177.9 | $ | 173.6 | ||||||||||
| Valuation allowance | (5.4) | (5.0) | ||||||||||||
| Total deferred tax assets after valuation allowance | $ | 172.5 | $ | 168.6 | ||||||||||
Capitalization and depreciation(1) | (124.6) | (122.1) | ||||||||||||
| Lease assets | (94.8) | (96.1) | ||||||||||||
| Other | (4.3) | (5.0) | ||||||||||||
| Deferred tax liabilities | $ | (223.7) | $ | (223.2) | ||||||||||
| Net deferred tax liabilities | $ | (51.2) | $ | (54.6) | ||||||||||
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(1) Primarily related to the 2007 Applebee's acquisition.
The Company considers new evidence, both positive and negative, that could impact management’s view with regards to future realization of deferred tax assets. Management believes that the future realizability of benefits arising from foreign tax credit carryforwards and certain state net operating loss carryforwards does not meet the more-likely-than-not threshold. In recognition of this risk, there is a valuation allowance of $5.4 million as of December 28, 2025.
The Company had gross operating loss carryforwards for state tax purposes of $112.4 million and $113.7 million as of December 28, 2025 and December 29, 2024, respectively. Certain net operating loss carryforwards will expire in 2029 if not utilized. The Company had income tax credit carryforwards of $7.5 million and $7.5 million as of December 28, 2025 and December 29, 2024, respectively. Certain income tax credit carryforwards will begin to expire in 2029 if not utilized.
The total gross unrecognized tax benefit as of December 28, 2025 and December 29, 2024 was $3.0 million and $2.5 million, respectively, excluding interest, penalties and related income tax benefits. If recognized, these amounts would affect the Company's effective income tax rates.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (In millions) | ||||||||||||||||||||
Beginning unrecognized tax benefit | $ | 2.5 | $ | 3.5 | $ | 2.1 | ||||||||||||||
| Changes for tax positions of prior years | (0.5) | — | — | |||||||||||||||||
| Increases for tax positions related to the current year | 1.1 | 0.4 | 1.9 | |||||||||||||||||
| Decreases relating to settlements and lapsing of statutes of limitations | (0.1) | (1.4) | (0.5) | |||||||||||||||||
Ending unrecognized tax benefit | $ | 3.0 | $ | 2.5 | $ | 3.5 | ||||||||||||||
As of December 28, 2025, the accrued interest was $0.2 million, excluding any related income tax benefits. As of December 29, 2024, the accrued interest and penalties were $0.8 million, excluding any related income tax benefits. The Company recognizes interest accrued related to unrecognized tax benefits and penalties as a component of the income tax provision recognized in the Consolidated Statements of Comprehensive Income.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Mar 5, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 2, 2022 | |
| 2020 | Mar 2, 2021 | |
| 2019 | Feb 24, 2020 | |
| 2018 | Feb 21, 2019 | |
| 2017 | Feb 20, 2018 | |
| 2016 | Mar 1, 2017 | |
| 2015 | Feb 24, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.