Long-Term Debt

9 Months Ended

Sep. 24, 2025

As of September 24, 2025, the Company and certain of its subsidiaries had a credit facility consisting of a five-year $400 million senior secured revolver (with a $25 million letter of credit sublimit). The credit facility included an accordion feature that would allow us to increase the size of the facility to $450 million. Borrowings bear a tiered interest rate, which is based on the Company's consolidated leverage ratio. The maturity date for the credit facility was August 26, 2026.

On October 28, 2025, subsequent to the end of the third quarter, we entered into an amendment to our credit facility. As a result of the amendment, the maturity date of the credit facility was extended to January 29, 2027, the accordion feature was removed, and the capacity of the credit facility was reduced to $325 million. Additionally, pursuant to the amended credit facility we are prohibited from paying dividends and making share repurchases and other general investments are restricted. The credit facility amendment is filed as Exhibit 10.1 to the Current Report on Form 8-K of Denny's Corporation filed with the Securities and Exchange Commission on November 3, 2025.

The credit facility is available for working capital, capital expenditures and other general corporate purposes. The credit facility is guaranteed by the Company and its material subsidiaries and is secured by assets of the Company and its subsidiaries, including the stock of its subsidiaries (other than its insurance captive subsidiary). It includes negative covenants that are usual for facilities and transactions of this type. The credit facility also includes certain financial covenants, including a maximum consolidated leverage ratio of 4.0 times and a minimum consolidated fixed charge coverage ratio of 1.5 times. As of September 24, 2025, our consolidated leverage ratio was 3.98 times and our consolidated fixed charge coverage ratio was 2.07 times. We were in compliance with all financial covenants as of September 24, 2025, and we expect to remain in compliance throughout the remainder of 2025.

As of September 24, 2025, we had outstanding revolver loans of $259.5 million and outstanding letters of credit under the credit facility of $15.9 million. These balances resulted in unused commitments of $124.6 million as of September 24, 2025 under the credit facility.

As of September 24, 2025, borrowings under the credit facility bear interest at a rate of Adjusted Daily Simple SOFR plus 2.25%. Letters of credit under the credit facility bear interest at a rate of 2.38%. The commitment fee, paid on the unused portion of the credit facility, was set to 0.35%.

Prior to considering the impact of our interest rate swaps, described below, the weighted-average interest rate on outstanding revolver loans was 6.73% and 6.98% as of September 24, 2025 and December 25, 2024, respectively. Taking into consideration our interest rate swaps that are designated as cash flow hedges, the weighted-average interest rate of outstanding revolver loans was 5.30% and 5.01% as of September 24, 2025 and December 25, 2024, respectively.

Interest Rate Hedges

We have receive-variable, pay-fixed interest rate swaps to hedge the forecasted cash flows of our floating rate debt. A summary of our interest rate swaps designated as cash flow hedges as of September 24, 2025 is as follows:


Trade Date	Effective Date	Maturity Date	Notional Amount			Fair Value		Fixed Rate
			(In thousands)
October 1, 2015	March 29, 2018	March 31, 2026	$	50,000		$	375	2.37	%
February 15, 2018	March 31, 2020	December 31, 2033	$	192,000	(1)	$	8,501	3.09	%
Total			$	242,000		$	8,876

(1) The notional amounts of the swaps entered into on February 15, 2018 increase periodically until they reach the maximum notional amount of $335 million on August 31, 2033.

Changes in Fair Value of Interest Rate Swaps

To the extent the swaps are highly effective in offsetting the variability of the hedged cash flows, changes in the fair value of the swaps are not included in the Consolidated Statements of Income but are reported as a component of other comprehensive income (loss). Our interest rate swaps are designated as cash flow hedges with unrealized gains and losses recorded as a component of accumulated other comprehensive loss, net.

As of September 24, 2025, the fair value of the swaps designated as cash flow hedges was an asset of $8.9 million, recorded as a component of other noncurrent assets. The designated swaps have an offsetting amount (before taxes) recorded as a component of accumulated other comprehensive loss, net in our Consolidated Balance Sheets. See Note 13 for amounts recorded in accumulated other comprehensive loss related to interest rate swaps. During the year-to-date period ended September 24, 2025, we reclassified $2.8 million from accumulated other comprehensive loss, net as a reduction to interest expense, net. We expect to reclassify $3.7 million from accumulated other comprehensive loss, net as a reduction to interest expense, net in our Consolidated Statements of Income related to swaps designated as cash flow hedges during the next 12 months.

Amortization of Certain Amounts Included in Accumulated Other Comprehensive Loss, Net

At September 24, 2025, we had a total of $61.4 million (before taxes) included in accumulated other comprehensive loss, net related to (i) the discontinuance of hedge accounting treatment related to certain cash flow hedges in prior years and (ii) the fair value of certain swaps at the date of designation as cash flow hedges that are being amortized into our Consolidated Statements of Income as a component of interest expense, net over the remaining term of the related swap.

For the quarter and year-to-date periods ended September 24, 2025, we recorded unrealized losses of $0.9 million and $2.1 million to interest expense, net, respectively. For the quarter and year-to-date periods ended September 25, 2024, we recorded unrealized losses of $0.2 million and $0.5 million to interest expense, net, respectively. We expect to amortize $4.6 million from accumulated other comprehensive loss, net to interest expense, net in our Consolidated Statements of Income related to dedesignated interest rate swaps during the next 12 months.

Debt Issuance Costs Expensed

During the quarter and year-to-date periods ended September 24, 2025, the Company expensed approximately $3.7 million of debt issuance costs as a component of other nonoperating expense (income), net related to a debt issuance no longer considered probable of occurring as a result of the proposed merger of the Company as discussed in Note 17.