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Procurement

3.2% IHOP Market Basket

IHOP’s 2016 full year Market Basket ended down (favorable) by 3.2% versus
full year 2015. This favorability was driven primarily by lower egg costs as we
recovered from Avian Influenza, and lower coffee costs as costs decreased at
origin (Central/South America) with favorable currency exchange rates. Higher

offset some of our favorability.
FAVORABLE pork costs, as well as, strawberry and syrup costs in the grocery category,
Of the 12 product categories we track in the Market Basket (totaling 76 specific
ingredient items), eight cost less in 2016 than they did in 2015. The chart
below shows the IHOP 2016 Market Basket costs versus 2015, by product
category.

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