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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 10-Q

(Mark One)

/x/	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2001
OR
/ /	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                to               

Commission File Number 0-8360

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IHOP CORP.
(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)		95-3038279 (I.R.S. Employer Identification No.)
450 North Brand Boulevard, Glendale, California (Address of principal executive offices)		91203-1903 (Zip Code)

(818) 240-6055
(Registrant's telephone number, including area code)

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    Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes /x/  No / /

    Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

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IHOP CORP. AND SUBSIDIARIES
INDEX

				Page
PART I.		FINANCIAL INFORMATION
		Item 1—Financial Statements
		Consolidated Balance Sheets—June 30, 2001 (unaudited) and December 31, 2000		3
		Consolidated Statements of Operations three months and six months ended June 30, 2001 and 2000 (unaudited)		4
		Consolidated Statements of Cash Flows six months ended June 30, 2001 and 2000 (unaudited)		5
		Notes to Consolidated Financial Statements		6
		Item 2—Management's Discussion and Analysis of Financial Condition and Results of Operations		8
PART II.		OTHER INFORMATION
		Item 4—Submission of Matters to a Vote of Security Holders		14
		Item 6—Exhibits and Reports on Form 8-K		14
		(a) Exhibits
		(b) Reports on Form 8-K
		Signatures		15

2

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

IHOP CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)

				June 30, 2001			December 31, 2000
				(Unaudited)
Assets
Current assets
	Cash and cash equivalents			$	5,886		$	7,208
	Receivables, net				36,863			39,600
	Reacquired franchises and equipment held for sale, net				2,907			3,172
	Inventories				610			691
	Prepaid expenses				5,222			431
		Total current assets			51,488			51,102
Long-term receivables					293,162			287,346
Property and equipment, net					216,893			193,624
Reacquired franchises and equipment held for sale, net					17,035			17,973
Excess of costs over net assets acquired, net					10,981			11,196
Other assets					2,531			971
		Total assets		$	592,090		$	562,212
Liabilities and Shareholders' Equity
Current liabilities
	Current maturities of long-term debt			$	9,819		$	8,939
	Accounts payable				12,136			20,588
	Accrued employee compensation and benefits				6,231			6,776
	Other accrued expenses				7,130			7,835
	Deferred income taxes				2,011			3,957
	Capital lease obligations				2,003			1,878
		Total current liabilities			39,330			49,973
Long-term debt					50,232			36,363
Deferred income taxes					50,054			46,585
Capital lease obligations and other					169,895			169,296
Shareholders' equity
	Preferred stock, $1 par value, 10,000,000 shares authorized; none issued				—			—
	Common stock, $.01 par value, 40,000,000 shares authorized: June 30, 2001; 20,606,987 shares issued and 20,399,905 shares outstanding; December 31, 2000; 20,299,091 shares issued and 20,011,341 shares outstanding				206			203
	Additional paid-in capital				73,683			69,655
	Retained earnings				211,274			193,632
	Treasury stock, at cost (207,082 and 287,750 shares at June 30, 2001 and December 31, 2000)				(3,386	)		(5,170	)
	Contribution to ESOP				802			1,675
		Total shareholders' equity			282,579			259,995
		Total liabilities and shareholders' equity		$	592,090		$	562,212

See the accompanying Notes to Consolidated Financial Statements.

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IHOP CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)

					Three Months Ended June 30,						Six Months Ended June 30,
					2001			2000			2001			2000
Revenues
	Franchise operations
		Rent			$	16,130		$	12,697		$	30,574		$	24,418
		Service fees and other				35,056			32,525			70,343			65,461
						51,186			45,222			100,917			89,879
	Sale of franchises and equipment					13,639			8,425			17,238			14,402
	Company operations					18,000			16,657			34,776			34,429
			Total revenues			82,825			70,304			152,931			138,710
Costs and Expenses
	Franchise operations
		Rent				9,179			6,814			17,503			13,105
		Other direct costs				11,861			10,945			23,692			22,366
						21,040			17,759			41,195			35,471
	Cost of sales of franchises and equipment					8,761			5,459			11,552			9,741
	Company operations					17,249			15,938			33,699			32,858
	Field, corporate and administrative					10,432			9,546			19,994			17,809
	Depreciation and amortization					3,667			3,338			7,227			6,652
	Interest					5,286			5,221			10,614			10,821
	Other (income) and expense, net					(143	)		(443	)		(36	)		117
			Total costs and expenses			66,292			56,818			124,245			113,469
Income before income taxes						16,533			13,486			28,686			25,241
Provision for income taxes						6,365			5,192			11,044			9,718
			Net income		$	10,168		$	8,294		$	17,642		$	15,523
Net Income Per Share
	Basic				$	0.50		$	0.41		$	0.88		$	0.78
	Diluted				$	0.49		$	0.41		$	0.86		$	0.77
Weighted Average Shares Outstanding
	Basic					20,272			19,988			20,160			20,026
	Diluted					20,625			20,202			20,522			20,223

See the accompanying Notes to Consolidated Financial Statements.

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IHOP CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

					Six Months Ended June 30,
					2001			2000
Cash flows from operating activities
	Net income				$	17,642		$	15,523
	Adjustments to reconcile net income to cash provided by operating activities
	Depreciation and amortization					7,227			6,652
	Deferred taxes					1,523			2,373
	Contribution to ESOP					802			760
	Change in current assets and liabilities
		Accounts receivable				2,467			4,095
		Inventories				81			433
		Prepaid expenses				(4,791	)		(31	)
		Accounts payable				(8,452	)		(1,616	)
		Accrued employee compensation and benefits				(545	)		(1,962	)
		Other accrued expenses				(705	)		2,335
	Other, net					(1,246	)		778
			Cash provided by operating activities			14,003			29,340
Cash flows from investing activities
	Additions to property and equipment					(47,952	)		(37,473	)
	Additions to notes					(5,850	)		(4,344	)
	Principal receipts from notes and equipment contracts receivable					7,632			6,172
	Additions to reacquired franchises held for sale					(954	)		(698	)
			Cash used in investing activities			(47,124	)		(36,343	)
Cash flows from financing activities
	Proceeds from issuance of long-term debt, including revolving line of credit					26,319			4,700
	Proceeds from sale and lease back arrangements					13,803			7,056
	Repayment of long-term debt, including revolving line of credit					(11,570	)		(4,983	)
	Principal payments on capital lease obligations					(893	)		(624	)
	Treasury stock transactions					(23	)		(4,041	)
	Exercise of stock options					4,163			883
			Cash provided by financing activities			31,799			2,991
Net change in cash and cash equivalents						(1,322	)		(4,012	)
Cash and cash equivalents at beginning of period						7,208			4,176
			Cash and cash equivalents at end of period		$	5,886		$	164
Supplemental disclosures
	Interest paid, net of capitalized amounts				$	10,639		$	10,711
	Income taxes paid					5,646			7,052
	Capital lease obligations incurred					530			1,975

See the accompanying Notes to Consolidated Financial Statements.

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IHOP CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

    1.  General:  The accompanying consolidated financial statements for the three months and six months ended June 30, 2001, have been prepared in accordance with generally accepted accounting principles ("GAAP"). These financial statements have not been audited by independent public accountants but include all adjustments, consisting of normal, recurring accruals, which in the opinion of management of IHOP Corp. and Subsidiaries ("IHOP") are necessary for a fair statement of the financial position and the results of operations for the periods presented. The accompanying consolidated balance sheet as of December 31, 2000, has been derived from audited financial statements, but does not include all disclosures required by GAAP. The results of operations for the three months and six months ended June 30, 2001 are not necessarily indicative of the results to be expected for the full year ending December 31, 2001.

    2.  Segments:  IHOP identifies its operating segments based on the organizational units used by management to monitor performance and make operating decisions. The Franchise Operations segment includes restaurants operated by franchisees and area licensees in the United States, Canada and Japan (see Note 3, below). The Company Operations segment includes company-operated restaurants in the United States. We measure segment profit as operating income, which is defined as income before field, corporate and administrative expense, interest expense, and income taxes. Information on segments and reconciliation to income before income taxes are as follows:

		Franchise Operations			Company Operations			Sales of Franchises and Equipment			Consolidating Adjustments and Other			Consolidated Total
		(In thousands) (Unaudited)
Three Months Ended June 30, 2001
Revenues from external customers		$	51,186		$	18,000		$	13,639		$	—		$	82,825
Intercompany real estate charges (revenues)			1,459			219			—			(1,678	)		—
Depreciation and amortization			1,393			1,079			—			1,195			3,667
Operating income (loss)			22,602			(1,030	)		4,878			5,801			32,251
Field, corporate and administrative															10,432
Interest expense															5,286
Income before income taxes															16,533
Additions to long-lived assets			13,328			337			300			13,258			27,223
Total assets			450,602			42,756			19,942			78,790			592,090
Three Months Ended June 30, 2000
Revenues from external customers		$	45,222		$	16,657		$	8,425		$	—		$	70,304
Intercompany real estate charges (revenues)			1,662			144			—			(1,806	)		—
Depreciation and amortization			1,059			965			—			1,314			3,338
Operating income (loss)			20,564			(948	)		2,966			5,671			28,253
Field, corporate and administrative															9,546
Interest expense															5,221
Income before income taxes															13,486
Additions to long-lived assets			12,433			3,381			215			5,886			21,915
Total assets			393,427			47,221			19,129			74,645			534,422

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    2.  Segments (Continued):  

		Franchise Operations			Company Operations			Sales of Franchises and Equipment			Consolidating Adjustments and Other			Consolidated Total
Six Months Ended June 30, 2001
Revenues from external customers		$	100,917		$	34,776		$	17,238		$	—		$	152,931
Intercompany real estate charges (revenues)			2,779			375			—			(3,154	)		—
Depreciation and amortization			2,694			2,145			—			2,388			7,227
Operating income (loss)			45,166			(2,468	)		5,686			10,910			59,294
Field, corporate and administrative															19,994
Interest expense															10,614
Income before income taxes															28,686
Additions to long-lived assets			28,007			1,512			954			18,433			48,906
Total assets			450,602			42,756			19,942			78,790			592,090
Six Months Ended June 30, 2000
Revenues from external customers		$	89,879		$	34,429		$	14,402		$	—		$	138,710
Intercompany real estate charges (revenues)			3,157			315			—			(3,472	)		—
Depreciation and amortization			2,067			2,022			—			2,563			6,652
Operating income (loss)			40,588			(1,901	)		4,661			10,523			53,871
Field, corporate and administrative															17,809
Interest expense															10,821
Income before income taxes															25,241
Additions to long-lived assets			25,488			4,500			698			7,485			38,171
Total assets			393,427			47,221			19,129			74,645			534,422

    For management reporting purposes, we treat all restaurant lease revenues and expenses as operating lease revenues and expenses, although most of these leases are direct financing leases (revenues) or capital leases (expenses). The accounting adjustments required to bring lease revenues and expenses into conformance with GAAP are included in the Consolidating Adjustments and Other segment. All of IHOP's owned land and restaurant buildings are included in the total assets of the Consolidating Adjustments and Other segment and are leased to the Franchise Operations and Company Operations segments.

    3.  Other Transactions:  The area licensee in Japan negotiated an early termination of the area license agreement as of April 30, 2001 that was originally scheduled to terminate in August 2003. A termination fee of approximately $250,000 was received by IHOP and the area licensee discontinued the operation of the 32 IHOP restaurants in Japan. Royalty income from this area licensee was:

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

    The following table sets forth certain operating data for IHOP restaurants:

					Three Months Ended June 30,						Six Months Ended June 30,
					2001			2000			2001			2000
					(In thousands) (Unaudited)
Restaurant Data
	Effective restaurants(a)
		Franchise				754			690			749			684
		Company				74			71			73			74
		Area license(d)				130			150			141			149
			Total			958			911			963			907
System-wide
	Sales(b)				$	331,131		$	308,663		$	661,829		$	607,485
		Percent increase				7.3	%		10.8	%		8.9	%		10.8	%
	Average sales per effective restaurant				$	346		$	339		$	687		$	670
		Percent increase				2.1	%		3.0	%		2.5	%		2.6	%
	Comparable average sales per restaurant(c)				$	360		$	355		$	715		$	699
		Percent change				(0.2	)%		0.6	%		0.8	%		0.2	%
Franchise
	Sales				$	280,512		$	255,459		$	555,711		$	499,556
		Percent increase				9.8	%		12.4	%		11.2	%		11.7	%
	Average sales per effective restaurant				$	372		$	370		$	742		$	730
		Percent increase				0.5	%		1.6	%		1.6	%		1.5	%
	Comparable average sales per restaurant(c)				$	371		$	367		$	739		$	724
		Percent change				(0.1	)%		0.8	%		1.0	%		0.5	%
Company
	Sales				$	18,000		$	16,657		$	34,776		$	34,429
		Percent change				8.1	%		(7.6	)%		1.0	%		1.2	%
	Average sales per effective restaurant				$	243		$	235		$	476		$	465
		Percent change				3.4	%		(2.1	)%		2.4	%		(1.7	)%
Area License
	Sales				$	32,619		$	36,547		$	71,342		$	73,500
		Percent change				(10.7	)%		10.2	%		(2.9	)%		9.7	%
	Average sales per effective restaurant				$	251		$	244		$	506		$	493
		Percent change				2.9	%		7.5	%		2.6	%		6.7	%

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(a)

"Effective restaurants" are the number of restaurants in a given fiscal period adjusted to account for restaurants open for only a portion of the period.

(b)

"System-wide sales" are retail sales of franchisees, area licensees and company-operated restaurants, as reported to IHOP.

(c)

"Comparable average sales" reflects sales for restaurants that are operated for the entire fiscal period in which they are being compared. The restaurants included in the calculations typically will be different from period to period. Comparable average sales do not include data on restaurants located in Florida and Japan.

(d)

Excluding the units in Japan, system-wide sales increased 9.3% for the quarter and 10.5% for the six months ended June 30; effective restaurants grew by 8.0% in the quarter and 7.8% for the six months ended June 30; average sales per effective restaurants increased 1.2% in the quarter and 2.5% for the six months ended June 30, 2001 over the same periods in 2000.

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    The following table summarizes IHOP's restaurant development and franchising activity:

					Three Months Ended June 30,				Six Months Ended June 30,
					2001		2000		2001		2000
					(Unaudited)
RESTAURANT DEVELOPMENT ACTIVITY
IHOP-beginning of period					978		909		968		903
	New openings
		IHOP-developed			18		15		25		22
		Investor and conversion programs			3		2		6		3
		Area license			1		4		3		4
			Total new openings		22		21		34		29
	Closings
		Company and franchise			(3	)	(7	)	(5	)	(8	)
		Area license			(32	)	—		(32	)	(1	)
IHOP-end of period					965		923		965		923
Summary-end of period
	Franchise				774		697		774		697
	Company				70		74		70		74
	Area license				121		152		121		152
			Total IHOP		965		923		965		923
RESTAURANT FRANCHISING ACTIVITY
IHOP-developed					21		12		26		20
Investor and conversion programs					3		2		6		3
Rehabilitated and refranchised					3		2		4		5
			Total restaurants franchised		27		16		36		28
Reacquired by IHOP					(2	)	(3	)	(4	)	(6	)
Closed					(3	)	(2	)	(5	)	(3	)
			Net addition		22		11		27		19

Forward-Looking Statements

    The following discussion and analysis provides information we believe is relevant to an assessment and understanding of IHOP's consolidated results of operations and financial condition. The discussion should be read in conjunction with the consolidated financial statements and notes thereto. Certain forward-looking statements are contained in this report. They use such words as "may," "will," "expect," believe," "plan," or other similar terminology. These statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results to be materially different than those expressed or implied in such statements. These factors include, but are not limited to: availability of suitable locations, and terms for the sites designated for development; legislation and government regulation, including the ability to obtain satisfactory regulatory approvals; conditions beyond IHOP's control such as weather or natural disasters; availability and cost of materials and labor; power outages; higher utility costs; costs and availability of capital; competition; continuing acceptance of the International House of Pancakes and IHOP brands and concepts by guests and franchisees; IHOP's overall marketing, operational and financial performance; economic and political conditions; adoption of new, or changes in accounting policies and practices and other factors discussed from time to time in our Press Releases, Public Statements and/or filings with the Securities and Exchange Commission.

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Forward-looking information is provided by us pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 and should be evaluated in the context of these factors. In addition, we disclaim any intent or obligation to update these forward-looking statements.

General

    IHOP's revenues are recorded in three categories: franchise operations, sales of franchises and equipment, and company operations.

    Franchise operations revenues include payments from franchisees of rents, royalties and advertising fees, proceeds from the sale of proprietary products, interest income received in connection with the financing of franchise and development fees and equipment sales, interest income received from direct financing leases on franchised restaurant buildings, and payments from area licensees of royalties and advertising fees.

    Sale of franchises and equipment and the associated costs of such sales are affected by the number and mix of restaurants franchised. We franchise four types of restaurants: restaurants newly developed by IHOP, restaurants developed by franchisees, restaurants developed by area licensees and restaurants that have been previously reacquired from franchisees. Franchise rights for restaurants newly developed by IHOP normally sell for a franchise fee of $200,000 to $375,000 or more, have minor associated franchise cost of sales and usually include a separate equipment sale in excess of $300,000 that is usually at a price that includes little or no profit margin. Franchise rights for restaurants developed by franchisees normally sell for a franchise fee of $50,000, have minor associated franchise cost of sales and typically do not include an equipment sale. Area license rights, which we are not currently pursuing, have been granted in return for a one-time development fee that is recognized ratably as restaurants are developed in the area. Previously reacquired franchises normally sell for a franchise fee of $100,000 to $375,000 or more, include an equipment sale, and may have substantial costs of sales associated with both the franchise and the equipment. The timing of sales of franchises is affected by the timing of new restaurant openings and the number of restaurants in our inventory of restaurants that are available for refranchising.

    Company operations revenues consist of retail sales at IHOP-operated restaurants.

    We report separately those expenses that are attributable to franchise operations, the cost of sales of franchises and equipment and company operations. Expenses recorded under field, corporate and administrative, depreciation and amortization, and interest relate to franchise operations, sales of franchises and equipment, and company operations.

    Other income and expense, net consists of revenues and expenses not related to IHOP's core business operations. These include gains and losses realized from closing and selling restaurants and are unpredictable in timing and amount.

    Our results of operations are impacted by the timing of additions of new restaurants, and by the timing of the franchising of those restaurants. When a restaurant is franchised, we no longer include in our revenues the retail sales from that restaurant, but we receive a one-time franchise and development fee, periodic interest on the portion of such fee financed by us and recurring payments as described above under franchise operations revenues.

Comparison of the Second Quarter and the Six Months Ended June 30, 2001 to the Second Quarter and Six Months Ended June 30, 2000

    The second quarter and the six months ended June 30, 2001 and 2000 were both comprised of 13 weeks (91 days) and 26 weeks (182 days), respectively.

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System-Wide Retail Sales

    System-wide retail sales include the sales of all IHOP restaurants as reported to IHOP by its franchisees, area licensees and company-operated restaurants. System-wide retail sales grew by 7.3% in the second quarter and by 8.9% in the first six months of 2001 over the same periods in the prior year. Growth in the number of effective restaurants and increases in average per unit sales caused the growth in system-wide sales. "Effective restaurants" are the number of restaurants in operation in a given fiscal period, adjusted to account for restaurants in operation for only a portion of the fiscal period. Effective restaurants grew by 5.2% in the second quarter and by 6.2% in the first six months of 2001 over the same periods in 2000 due to new restaurant development. Newly developed restaurants generally have higher seating capacity and sales than the system-wide averages. System-wide comparable average sales per restaurant (exclusive of area license restaurants in Florida and Japan) declined by 0.2% in the second quarter and grew by 0.8% in the first six months of 2001. Management continues to pursue growth in sales through new restaurant development, advertising and marketing efforts, new products, improvements in customer service and operations, and remodeling of existing restaurants.

Franchise Operations

    Franchise operations revenues are the revenues received by IHOP from its franchisees and include rent, royalties, proprietary product sales, advertising fees and interest. Franchise operations revenues grew by 13.2% in the second quarter and by 12.3% in the first six months of 2001 compared to the same periods of the prior year. Retail sales in franchise restaurants increased 9.8% and 11.2% for the second quarter and first six months of 2001. Effective franchise restaurants grew by 9.3% in the second quarter and by 9.5% in the first six months of 2001 over the same periods in the prior year. Average sales per effective franchise restaurant grew 0.5% in the second quarter and 1.6% in the first six months of 2001.

    Franchise operations costs and expenses include facility rent, advertising, the cost of proprietary products, and other direct costs associated with franchise operations. Franchise operations costs and expenses increased by 18.5% in the second quarter and by 16.1% in the first six months of 2001 over the same periods in the prior year. Increases in franchise operations costs and expenses were generally in line with the growth in franchise operations revenue. However, the percentage increase exceeded that of revenues primarily due to higher rent expense.

    Rent expense has been effected primarily by lease accounting issues not economic ones. Most of the leases and subleases entered into by the company beginning in 2000 have been accounted for as operating leases, whereas most leases prior to 2000 were accounted for as capital leases. As a result, rent income and expense are increasing and interest income and expense related to real estate leases, (and associated receivables and liabilities) are not.

    Sublease transactions with franchisees are structured with little or no margin at inception of the sublease, but with margin improvement over the life of the lease. New unit development will therefore have a negative effect on rent margin percentages. Actual profit margin on rent transactions increased $1.1 million to $7 million in the second quarter, an 18.2% improvement over the $5.9 million rent margin in the second quarter of 2000. This reflects the margin improvement achieved as the subleases mature. The timing of lease transactions also have an impact on rent expense.

    Franchise operations margin as a percent of revenues was 58.9% and 59.2% in the second quarter and first six months of 2001 compared with 60.7% and 60.5% in the same periods of 2000. The decrease in the margin percentage was primarily due to lease accounting issues mentioned above.

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Sales of Franchises and Equipment

    Sales of franchises and equipment increased by 61.9% in the second quarter and by 19.7% in the first six months of 2001 over the comparable periods in the prior year. An increase in the number of restaurants franchised was the primary cause of the increase in sales of franchises and equipment. IHOP franchised 27 restaurants in the second quarter and 36 in the first six months of 2001, compared to 16 and 28 in the same periods of 2000.

    Cost of sales of franchises and equipment increased by 60.5% in the second quarter and by 18.6% in the first six months of 2001. The increase was generally in line with the increase in the sales of franchises and equipment. However, the Company also incurs preopening costs and site related costs that are not directly linked to the number of units franchised within a quarter.

    Margin on sales of franchises and equipment as a percent of applicable revenues was 35.8% and 33.0% in the second quarter and first six months of 2001 compared with 35.2% and 32.4% in the same periods of 2000. The stability in margin reflects the consistency in the mix of units franchised, i.e. IHOP developed, investor developed or refranchised.

Company Operations

    Company operations revenues are retail sales to customers at restaurants operated by IHOP. Company operations revenues increased by 8.1% in the second quarter and by 1.0% in the first six months of 2001 over the same periods in the prior year. An increase in the average sales per IHOP-operated restaurant caused the revenue increase. Effective IHOP-operated restaurants grew by 4.2% in the second quarter and decreased by 1.4% in the first six months of 2001 over the same periods in 2000. Average sales per effective IHOP-operated restaurant increased by 3.4% and 2.4% in the second quarter and first six months of 2001.

    Company operations costs and expenses include food, labor and benefits, utilities and occupancy costs. Company operations costs increased by 8.2% in the second quarter and by 2.6% in the first six months of 2001. Company operations costs were primarily affected by increases in the number of effective restaurants, but were also impacted by increases in certain costs, primarily rent and utilities.

    Company operations margin as a percent of company operations revenues was 4.2% and 3.1% in the second quarter and first six months of 2001 compared with 4.3% and 4.6% in the same periods in the prior year. Company operations margin was negatively impacted by the increases in rent and utility costs described above in the Company operations costs and expenses section.

Other Costs and Expenses

    Field, corporate and administrative costs and expenses increased by 9.3% in the second quarter and by 12.3% in the first six months of 2001 over the same periods in the prior year. The rise in expenses was primarily due to higher compensation and rent expenses. The primary cause of the increases in rent expense was the initiation of a new 10-year lease for the Company's corporate headquarters in late 2000 and the opening of a new regional office in the Rocky Mountain area in early 2001. Field, corporate and administrative expenses were 3.2% and 3.0% of system-wide sales in the second quarter and first six months of 2001 compared to 3.1% and 2.9% in the same periods in 2000.

    Depreciation and amortization expense increased by 9.9% in the second quarter and by 8.6% in the first six months of 2001 over the same periods in 2000. The increases were caused primarily by the addition of new restaurants to the IHOP chain from our restaurant development program.

    Interest expense increased by 1.3% in the second quarter and decreased by 1.9% in the first six months of 2001 compared to the same periods in the prior year. Long term debt increased by

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approximately $15 million since December 31, 2000. However, the Company has benefited from lower interest rates currently available.

Balance Sheet Accounts

    The balance of property and equipment, net at June 30, 2001, increased by 12.0% from December 31, 2000 primarily due to new restaurant development.

Liquidity and Capital Resources

    The Company invests in its business primarily through the development of additional restaurants and, to a lesser extent, through the remodeling of older company-operated restaurants. Also, the Company began repurchasing shares of its common stock in 2000. As of June 30, 2001, the Company has cumulatively repurchased 389,168 shares of its common stock, of which 182,086 shares were contributed to the Employee Stock Ownership Plan. There were 1,000 shares repurchased in the first six months of 2001.

    In the first six months of 2001, IHOP and its franchisees and area licensees developed and opened 34 IHOP restaurants. Of these, we developed and opened 25 restaurants, and franchisees and area licensees developed and opened 9 restaurants. Capital expenditures in the first six months of 2001, which included our portion of the above development program, were $48 million. Funds for investment primarily came from operations, additional long term debt and our revolving line of credit.

    In 2001, IHOP and its franchisees and area licensees plan to develop and open approximately 75 to 85 restaurants. Included in that number is the development of 70 to 75 new restaurants by us and the development of 5 to 10 restaurants by our franchisees and area licensees. Capital expenditure projections for 2001, which include our portion of the above development program, are estimated to be approximately $95 to $105 million. In November 2001, the sixth annual installment of $4.6 million in principal will be due on our 7.79% senior notes due 2002 and the second installment of $3.9 million in principal will be due on our senior notes due 2008. We expect that funds from operations, sale and leaseback arrangements (estimated to be about $40 to $45 million) and other borrowings including our $25 million revolving line of credit will be sufficient to cover our operating requirements, our budgeted capital expenditures and our principal repayments on our senior notes in 2001. At June 30, 2001, $19 million was available to be borrowed under our noncollateralized bank revolving credit agreement.

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Part II. OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders.

    The annual meeting of shareholders (the "Meeting") was held on May 15, 2001. Shareholders voted in person or by proxy for the following purposes.

    (a) Shareholders voted to elect three Class I directors, each to serve for a term of three years, as follows:

    There were no abstentions or broker non-votes. Directors whose terms of office continued after the meeting were Richard K. Herzer, H. Frederick Christie, Michael S. Gordon, Larry Alan Kay, Dennis M. Leifheit, and Patrick W. Rose.

    (b) Shareholders voted to approve and ratify the adoption of the IHOP Corp. 2001 Stock Incentive Plan. 12,483,471 shares were voted in favor of the proposal, 4,078,406 shares were voted against, there were 282,062 abstentions and 2,314,783 broker non-votes.

    (c) Shareholders voted to approve and ratify the appointment of PricewaterhouseCoopers LLP as the Company's independent accountants for the year ending December 31, 2001. 19,117,193 shares were voted in favor of this proposal, 29,683 shares were voted against, there were 11,846 abstentions and no broker non-votes.

Item 6. Exhibits and Reports on Form 8-K.

    (a) Exhibits

    (b) No reports on Form 8-K were filed during the quarter ended June 30, 2001.

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SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		IHOP CORP. (Registrant)
July 31, 2001 (Date)		BY:		/s/ RICHARD K. HERZER Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer)
July 31, 2001 (Date)				/s/ ALAN S. UNGER V.P.-Finance, Treasurer and Chief Financial Officer (Principal Financial Officer)

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IHOP CORP. AND SUBSIDIARIES INDEX
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

IHOP CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share amounts)
IHOP CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited)
IHOP CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
IHOP CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Part II. OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders.
Item 6. Exhibits and Reports on Form 8-K.

SIGNATURES

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EXHIBIT 11.0

IHOP CORP. AND SUBSIDIARIES
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
(In thousands, except per share data)
(Unaudited)

			Three Months Ended June 30,						Six Months Ended June 30,
			2001			2000			2001			2000
NET INCOME PER COMMON SHARE BASIC
	Weighted average shares outstanding			20,272			19,988			20,160			20,026
	Net income available to common shareholders		$	10,168		$	8,294		$	17,642		$	15,523
	Net income per share-basic		$	0.50		$	0.41		$	0.88		$	0.78
NET INCOME PER COMMON SHARE DILUTED
	Weighted average shares outstanding			20,272			19,988			20,160			20,026
	Net effect of dilutive stock options based on the treasury stock method using the average market price.			353			214			362			197
	Total			20,625			20,202			20,522			20,223
	Net income available to common shareholders		$	10,168		$	8,294		$	17,642		$	15,523
	Net income per share-diluted		$	0.49		$	0.41		$	0.86		$	0.77

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EXHIBIT 11.0
IHOP CORP. AND SUBSIDIARIES STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS (In thousands, except per share data) (Unaudited)