FOR IMMEDIATE RELEASE

Contact:   Carol DiRaimo
           Vice President of Investor Relations
           (913) 967-4109

  Applebee's International Reports Second Quarter 2006 Diluted Net Earnings Per
     Share of $0.27 Including Impairment Charge and Stock-Based Compensation

OVERLAND  PARK,   KAN.,  July  26,  2006  --  Applebee's   International,   Inc.
(Nasdaq:APPB) today reported net earnings of $20.4 million, or $0.27 per diluted
share,  for the second  quarter  ended June 25,  2006 as  compared  to $0.34 per
diluted share for the second  quarter of 2005.  Excluding  impairment  and other
restaurant   closure  costs  of  $3.0  million   ($2.0   million   after-tax  or
approximately  $0.03 per share) and  stock-based  compensation  of $5.2  million
($3.5 million  after-tax or  approximately  $0.05 per share),  net earnings were
$25.9  million,  or $0.34 per diluted  share,  for the second quarter of 2006. A
reconciliation  of  non-GAAP  measurements  to GAAP  results is attached to this
release.

System-wide  domestic  comparable sales for the second quarter of 2006 decreased
1.8  percent.   Company  and  domestic  franchise  restaurant  comparable  sales
decreased  2.0  percent  and  1.7  percent,   respectively,   for  the  quarter.
System-wide  domestic  comparable sales for the year-to-date period through June
increased 0.4 percent,  with domestic franchise  restaurant  comparable sales up
0.7 percent and company comparable sales down 0.4 percent.

The company also reported comparable sales for the June fiscal period, comprised
of the five weeks ended June 25, 2006.  System-wide  domestic  comparable  sales
decreased  3.0  percent  for the June  period.  Comparable  sales  for  domestic
franchise  restaurants  decreased 3.2 percent,  and comparable sales for company
restaurants  decreased  2.5 percent,  reflecting a decrease in guest  traffic of
approximately 5.0 percent, combined with a higher average check.

In addition,  the company reported  comparable sales for the July fiscal period,
comprised of the four weeks ended July 23, 2006. System-wide domestic comparable
sales  decreased  3.6 percent for the July period,  while  comparable  sales for
domestic  franchise  restaurants  decreased  3.4 percent.  Comparable  sales for
company  restaurants  decreased  4.1  percent,  reflecting  a decrease  in guest
traffic of between 5.5 and 6.0 percent, combined with a higher average check.

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<PAGE>



July 26, 2006
Page 2

System-wide  domestic  comparable sales for the year-to-date period through July
have decreased 0.1 percent,  with domestic franchise restaurant comparable sales
up 0.1 percent and company comparable restaurant sales down 0.9 percent.

Lloyd Hill,  chairman and chief executive  officer,  said, "We are  disappointed
that our  efforts  to  broaden  our reach  have been  masked by the  challenging
consumer  spending  environment.  As we are uncertain as to when the environment
will start to improve, we are taking a more conservative view in our outlook for
the remainder of the year.  Despite this  uncertainty,  our  management  team is
focused on putting in place the  building  blocks for the future  success of the
brand."

Dave Goebel,  president and chief  operating  officer,  added,  "These  building
blocks include  sharpening  our focus to enhance our brand appeal.  The new food
that we are developing is the best we have created in our history. By the end of
the year we will have  introduced  more than 20 new or improved  menu items that
are designed to appeal to both the  customer  that is still  frequenting  casual
dining  and the  customer  that is  seeking  value.  We are  also  committed  to
sharpening our advertising to align with our food strategy by having a stronger,
more  straight-forward  message to the consumer that communicates  what's new at
Applebee's.  While our current  results do not reflect the full benefit of these
initiatives, I am confident our strategies are right on track."

Other  results for the second  quarter and  year-to-date  periods ended June 25,
2006 included:

    o         Net earnings for the 26-week period ended June 25, 2006 were $47.6
              million, or $0.63 per diluted share. This compares to net earnings
              in the same period of 2005 of $59.1 million,  or $0.72 per diluted
              share.  Excluding impairment and other restaurant closure costs of
              $4.6 million ($3.0 million  after-tax or  approximately  $0.04 per
              share) and stock-based compensation of $11.4 million ($7.5 million
              after-tax or  approximately  $0.10 per share),  net earnings  were
              $58.1 million,  or $0.77 per diluted share, for the 26-week period
              ended June 25, 2006.

    o         Total  system-wide  sales for the quarter increased by 5.7 percent
              over the prior year.  System-wide  sales are a non-GAAP  financial
              measure  that   includes   sales  at  all  company  and  franchise
              Applebee's  restaurants,  as reported by franchisees.  The company
              believes that system-wide sales information is useful in analyzing
              Applebee's  market share and growth,  and because  franchisees pay
              royalties and contribute to the national advertising pool based on
              a percentage of their sales.

    o         Applebee's   ended  the  quarter  with  1,860   restaurants   open
              system-wide (507 company and 1,353 franchise restaurants).  During
              the  second  quarter  of  2006,   there  were  35  new  Applebee's
              restaurants  opened  system-wide,  including  10  company  and  25
              franchised restaurants.

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<PAGE>



July 26, 2006
Page 3

    o         The  company  repurchased  469,000  shares of common  stock in the
              second quarter at an average price of $23.38 for an aggregate cost
              of $11.0 million.  For the 26-week period ended June 25, 2006, the
              company  has  repurchased  687,200  shares of  common  stock at an
              average price of $23.48 for an aggregate cost of $16.1 million. As
              of June 25,  2006,  $112.8  million  remains  available  under the
              company's current stock repurchase authorization.

    o         As of June 25,  2006,  the company had total debt  outstanding  of
              $201.7 million,  with $37.2 million  available under its revolving
              credit facility.

BUSINESS OUTLOOK

The company  updated its guidance  with respect to its business  outlook for the
remainder of fiscal year 2006:

    o         Approximately  125 new  restaurants  are expected to open in 2006,
              including  approximately  35 company  restaurants  and at least 90
              franchise   restaurants.   Through  the  second  quarter,  64  new
              restaurants have opened  system-wide,  including 19 company and 45
              franchised  restaurants.  Approximately 6 company  restaurants are
              expected to open in the third quarter, with the balance opening in
              the fourth quarter of the year.  Approximately  20 to 25 franchise
              restaurants  are expected to open in the third  quarter,  with the
              remainder opening in the fourth quarter.

    o         As a result  of the  current  uncertainty  surrounding  the  macro
              consumer  environment and in consideration of recent results,  the
              company now expects system-wide comparable sales for the remainder
              of the year to be in a range from flat to down 4.0 percent,  which
              would result in full year system-wide  comparable sales in a range
              from flat to down 2.0 percent.

    o         Overall restaurant margins before pre-opening expense for the full
              year are  expected to be less than  fiscal  year 2005  results and
              will be  dependent  on  comparable  sales  performance  at company
              restaurants.   Higher  energy  costs,  including  utilities,  fuel
              surcharges and packaging costs, are expected to continue to have a
              negative  impact on margins,  but will be partially  offset by the
              impact of a change in accounting  convention for  smallwares  that
              was  implemented in the second  quarter.  The change in accounting
              convention had a $0.007 per diluted share favorable  impact in the
              quarter and is  expected  to have a favorable  impact of $0.02 for
              the year and $0.03 per diluted share for fiscal year 2007.

    o         General and administrative  expenses, as a percentage of operating
              revenues,  are expected to be in the  low-to-mid  10 percent range
              for  the  full  year,   including   the   impact  of   stock-based
              compensation.

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<PAGE>



July 26, 2006
Page 4

    o         The  effective  income tax rate is now expected to be between 34.5
              and 35.0 percent for the remainder of the year.

    o         Excluding the cost of franchise acquisitions, capital expenditures
              are  expected  to be  between  $135  and  $145  million  in  2006,
              including  costs relating to the  construction  of a new corporate
              headquarters  that  will  open  in the  latter  half of  2007.  In
              addition,  the company completed the acquisition of four franchise
              restaurants in the Houston area in late January for  approximately
              $8.2 million.

    o         The  incremental  impact  of  stock-based   compensation   expense
              resulting  from  the  implementation  of  Statement  of  Financial
              Accounting Standards No. 123R, "Share-Based Payment," is estimated
              to be  approximately  $0.17 per diluted share for the year, with a
              slightly higher proportion recognized in the first quarter.

    o         Based on the foregoing  assumptions and the company's  performance
              through the first half of the year, diluted earnings per share for
              fiscal year 2006 excluding  impairment  charges are expected to be
              in  the  range  of  $1.12  to  $1.22,   including  the  impact  of
              stock-based compensation expense.

A  conference  call to review the second  quarter  2006  results and the current
business outlook will be held on Thursday morning,  July 27, 2006, at 10:00 a.m.
Central Time (11:00 a.m.  Eastern Time).  The conference  call will be broadcast
live over the Internet and a replay will be available  shortly after the call on
the Investors section of the company's website (www.applebees.com).

Applebee's International,  Inc., headquartered in Overland Park, Kan., develops,
franchises and operates  restaurants under the Applebee's  Neighborhood  Grill &
Bar brand,  the largest casual dining concept in the world. As of July 23, 2006,
there were 1,863 Applebee's  restaurants  operating system-wide in 49 states and
16 international  countries.  Additional information on Applebee's International
can be found at the company's website (www.applebees.com).

Certain  statements  contained  in this  release,  including  fiscal  year  2006
guidance as set forth in the Business Outlook section,  are  forward-looking and
based on current  expectations.  There are several risks and uncertainties  that
could cause actual results to differ materially from those described,  including
but not limited to the ability of the  company and its  franchisees  to open and
operate  additional  restaurants  profitably,  the ability of its franchisees to
obtain  financing,  the continued growth of its franchisees,  and its ability to
attract and retain qualified  franchisees,  the impact of intense competition in
the casual dining segment of the restaurant industry, and its ability to control
restaurant  operating costs which are impacted by market  changes,  minimum wage
and other employment laws, food costs and inflation.  For additional  discussion
of the  principal  factors  that could  cause  actual  results to be  materially
different, the reader is referred to the company's Form 10-K for the fiscal year
ended  December 25, 2005.  The company  disclaims any obligation to update these
forward-looking statements.

                                      # # #


<PAGE>

<TABLE>
<CAPTION>
                 APPLEBEE'S INTERNATIONAL, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF EARNINGS
                                   (Unaudited)
                    (in thousands, except per share amounts)

                                                                    13 Weeks Ended                         26 Weeks Ended
                                                          -----------------------------------    -----------------------------------
                                                             June 25,           June 26,            June 25,            June 26,
                                                               2006               2005                2006                2005
                                                          ---------------    ----------------    ----------------    ---------------
<S>                                                       <C>                <C>                 <C>                 <C>
Operating revenues:
     Company restaurant sales .......................      $    296,128       $    272,703        $    604,027        $    543,161
     Franchise royalties and fees....................            34,306             32,493              70,241              65,501
     Other franchise income..........................               539              1,424                 984               2,489
                                                          ---------------    ----------------    ----------------    ---------------
         Total operating revenues....................           330,973            306,620             675,252             611,151
                                                          ---------------    ----------------    ----------------    ---------------
Cost of company restaurant sales:
     Food and beverage...............................            78,433             72,565             160,669             144,200
     Labor...........................................           100,296             90,115             201,327             178,839
     Direct and occupancy............................            80,411             71,038             159,357             137,405
     Pre-opening expense.............................             1,157              1,268               1,907               2,435
                                                          ---------------    ----------------    ----------------    ---------------
         Total cost of company restaurant sales......           260,297            234,986             523,260             462,879
                                                          ---------------    ----------------    ----------------    ---------------
Cost of other franchise income.......................               281              1,229               1,047               2,048
General and administrative expenses..................            32,320             27,980              67,926              54,926
Amortization of intangible assets....................               204                226                 408                 454
Impairment and other restaurant closure costs........             3,000                --                4,600                 --
Loss on disposition of property and equipment........               430                564               1,007                 861
                                                          ---------------    ----------------    ----------------    ---------------
Operating earnings...................................            34,441             41,635              77,004              89,983
                                                          ---------------    ----------------    ----------------    ---------------
Other income (expense):
     Investment income (loss)........................              (285)               449                 460                 408
     Interest expense................................            (2,985)              (634)             (5,539)               (971)
     Other income....................................               101                584                 237               1,019
                                                          ---------------    ----------------    ----------------    ---------------
         Total other income (expense)................            (3,169)               399              (4,842)                456
                                                          ---------------    ----------------    ----------------    ---------------
Earnings before income taxes.........................            31,272             42,034              72,162              90,439
Income taxes.........................................            10,868             14,544              24,607              31,292
                                                          ---------------    ----------------    ----------------    ---------------
Net earnings.........................................      $     20,404       $     27,490        $     47,555        $     59,147
                                                          ===============    ================    ================    ===============

Basic net earnings per common share..................      $       0.28       $       0.34        $       0.64        $       0.74
                                                          ===============    ================    ================    ===============
Diluted net earnings per common share................      $       0.27       $       0.34        $       0.63        $       0.72
                                                          ===============    ================    ================    ===============

Basic weighted average shares outstanding............            74,112             79,897              74,113              80,295
                                                          ===============    ================    ================    ===============
Diluted weighted average shares outstanding..........            75,083             81,360              75,161              81,861
                                                          ===============    ================    ================    ===============
</TABLE>













<PAGE>




                 APPLEBEE'S INTERNATIONAL, INC. AND SUBSIDIARIES
             RECONCILIATION OF NON-GAAP MEASUREMENTS TO GAAP RESULTS
                                   (Unaudited)
                    (in thousands, except per share amounts)

In addition  to the  results  provided in  accordance  with  Generally  Accepted
Accounting  Principles  ("GAAP")  throughout  this  document,  the  company  has
provided non-GAAP measurements which present operating results on a basis before
impairment and other restaurant closure costs and stock-based compensation.

The company  adopted  the fair value  recognition  provisions  of  Statement  of
Financial Accounting Standards No. 123R,  "Share-Based Payment" ("SFAS 123R") at
the  beginning  of  fiscal  year  2006.   SFAS  123R  requires  all  stock-based
compensation,  including  grants of employee stock options,  to be recognized in
the  statement  of  earnings  based on fair  value.  The  company  adopted  this
accounting treatment using the modified prospective transition method; therefore
results for prior periods have not been restated.  Prior to the adoption of SFAS
123R, the company  accounted for  stock-based  compensation  using the intrinsic
value method  prescribed in Accounting  Principles Board ("APB") Opinion No. 25,
"Accounting for Stock Issued to Employees," and related interpretations.

The company is using earnings  before  impairment and other  restaurant  closure
costs and stock-based  compensation  as a key performance  measure of results of
operations for purposes of evaluating performance  internally.  In addition, the
company's  internal  reporting and budgeting,  as well as the calculation of its
incentive compensation payments,  includes the use of reported amounts excluding
stock-based  compensation.  This non-GAAP measurement is not intended to replace
the presentation of our financial results in accordance with GAAP.  Rather,  the
company believes that the  presentation of earnings before  impairment and other
restaurant  closure  costs  and  stock-based  compensation  provides  additional
information to facilitate the comparison of past and present operations.


<PAGE>



<TABLE>
<CAPTION>
                                                                  13 Weeks Ended                    26 Weeks Ended
                                                           ------------------------------    ------------------------------
                                                             June 25,         June 26,         June 25,         June 26,
                                                               2006             2005             2006             2005
                                                           -------------    -------------    -------------    -------------
<S>                                                        <C>              <C>              <C>              <C>
Impairment and other restaurant closure costs......         $ (3,000)        $    --          $  (4,600)       $     --
Stock-based compensation(a)........................           (5,247)            (571)          (11,412)          (1,067)
Income taxes.......................................            2,781              197             5,507              369
                                                           -------------    -------------    -------------    -------------
  Impairment and other restaurant closure costs
     and stock-based compensation, net of tax......         $ (5,466)        $   (374)        $ (10,505)       $    (698)
                                                           =============    =============    =============    =============

Diluted weighted average shares outstanding........           75,083           81,360            75,161           81,861
                                                           =============    =============    =============    =============

Diluted earnings per share impact of impairment
  and other restaurant closure costs and
  stock-based compensation.........................         $  (0.07)             --          $   (0.14)       $   (0.01)
                                                           =============    =============    =============    =============

Reconciliation of earnings before impairment
  and other restaurant closure costs
  and stock-based compensation to net earnings:
     Earnings before impairment and other
       restaurant closure costs and
       stock-based compensation....................         $ 25,870         $ 27,864         $  58,060        $  59,845
     Impairment and other restaurant closure
       costs and stock-based compensation,
       net of tax..................................           (5,466)            (374)          (10,505)            (698)
                                                           -------------    -------------    -------------    -------------
     Net earnings..................................         $ 20,404         $ 27,490         $  47,555        $  59,147
                                                           =============    =============    =============    =============

Reconciliation of earnings per share before
  impairment and other restaurant closure costs
  and stock-based compensation to reported
  earnings per share:
     Diluted earnings per share before impairment
       and other restaurant closure costs
       and stock-based compensation................         $   0.34         $   0.34         $    0.77        $    0.73
     Diluted earnings per share impact of
       impairment and other restaurant closure
       costs and stock-based compensation..........            (0.07)             --              (0.14)           (0.01)
                                                           -------------    -------------    -------------    -------------
       Reported diluted earnings per share.........         $   0.27         $   0.34         $    0.63        $    0.72
                                                           =============    =============    =============    =============

<FN>
(a)  Stock-based  compensation for the second quarter of 2006 includes  $243,000
     in  cost  of  company  restaurant  sales  and  $5,004,000  in  general  and
     administrative  expenses.  Stock-based  compensation for the 26 weeks ended
     June 25, 2006  includes  $487,000 in cost of company  restaurant  sales and
     $10,925,000   in   general   and   administrative   expenses.   Stock-based
     compensation  for both periods in 2005 represents  restricted stock expense
     which was included entirely in general and administrative expenses.
</FN>
</TABLE>


<PAGE>



The following table contains information derived from the company's consolidated
statements of earnings  expressed as a percentage of total  operating  revenues,
except where otherwise noted. Percentages may not add due to rounding.
<TABLE>
<CAPTION>
                                                                         13 Weeks Ended               26 Weeks Ended
                                                                  ----------------------------  ---------------------------
                                                                     June 25,      June 26,       June 25,       June 26,
                                                                       2006          2005           2006           2005
                                                                  -------------  -------------  -------------  -------------
<S>                                                               <C>           <C>             <C>            <C>
Operating revenues:
     Company restaurant sales................................          89.5%          88.9%         89.5%         88.9%
     Franchise royalties and fees............................          10.4           10.6          10.4          10.7
     Other franchise income..................................           0.2            0.5           0.1           0.4
                                                                  -------------  -------------  -------------  -------------
        Total operating revenues.............................         100.0%         100.0%        100.0%        100.0%
                                                                  =============  =============  =============  =============
Cost of sales (as a percentage of company
     restaurant sales):
     Food and beverage.......................................          26.5%          26.6%         26.6%         26.5%
     Labor...................................................          33.9           33.0          33.3          32.9
     Direct and occupancy....................................          27.2           26.0          26.4          25.3
     Pre-opening expense.....................................           0.4            0.5           0.3           0.4
                                                                  -------------  -------------  -------------  -------------
        Total cost of sales..................................          87.9%          86.2%         86.6%         85.2%
                                                                  =============  =============  =============  =============

Cost of other franchise income (as a percentage of other
     franchise income).......................................          52.1%          86.3%        106.4%         82.3%
General and administrative expenses..........................           9.8            9.1          10.1           9.0
Amortization of intangible assets............................           0.1            0.1           0.1           0.1
Impairment and other restaurant closure costs................           0.9             --           0.7            --
Loss on disposition of property and equipment................           0.1            0.2           0.1           0.1
                                                                  -------------  -------------  -------------  -------------
Operating earnings...........................................          10.4           13.6          11.4          14.7
                                                                  -------------  -------------  -------------  -------------
Other income (expense):
     Investment income (loss)................................          (0.1)           0.1           0.1           0.1
     Interest expense........................................          (0.9)          (0.2)         (0.8)         (0.2)
     Other income............................................            --            0.2            --           0.2
                                                                  -------------  -------------  -------------  -------------
        Total other income (expense).........................          (1.0)           0.1          (0.7)          0.1
                                                                  -------------  -------------  -------------  -------------
Earnings before income taxes.................................           9.4           13.7          10.7          14.8
Income taxes.................................................           3.3            4.7           3.6           5.1
                                                                  -------------  -------------  -------------  -------------
Net earnings.................................................           6.2%           9.0%          7.0%          9.7%
                                                                  =============  =============  =============  =============
</TABLE>


<PAGE>



The  following  table  sets  forth  certain  financial   information  and  other
restaurant data relating to company and franchise restaurants, as reported to us
by franchisees:

<TABLE>
<CAPTION>
                                                               13 Weeks Ended                     26 Weeks Ended
                                                       -------------------------------    -------------------------------
                                                          June 25,          June 26,         June 25,          June 26,
                                                           2006              2005             2006              2005
                                                       -------------     -------------    --------------    -------------
<S>                                                    <C>               <C>              <C>               <C>
Number of restaurants:
     Company:
         Beginning of period.......................           497               437              486               424
         Restaurant openings.......................            10                14               19                27
         Restaurant closings.......................            --                --               (2)               --
         Restaurants acquired from franchisees.....            --                11                4                11
                                                       -------------     -------------    --------------    -------------
         End of period.............................           507               462              507               462
                                                       -------------     -------------    --------------    -------------
     Franchise:
         Beginning of period.......................         1,332             1,257            1,318             1,247
         Restaurant openings.......................            25                16               45                29
         Restaurant closings.......................            (4)               (2)              (6)               (5)
         Restaurants acquired from franchisees.....            --               (11)              (4)              (11)
                                                       -------------     -------------    --------------    -------------
         End of period.............................         1,353             1,260            1,353             1,260
                                                       -------------     -------------    --------------    -------------
     Total:
         Beginning of period.......................         1,829             1,694            1,804             1,671
         Restaurant openings.......................            35                30               64                56
         Restaurant closings.......................            (4)               (2)              (8)               (5)
                                                       -------------     -------------    --------------    -------------
         End of period.............................         1,860             1,722            1,860             1,722
                                                       =============     =============    ==============    =============

Weighted average weekly sales per restaurant:
     Company.......................................     $  45,245         $  46,800        $  46,650         $  47,483
     Domestic franchise............................     $  50,127         $  51,056        $  51,863         $  51,547
     Domestic total................................     $  48,736         $  49,894        $  50,383         $  50,452

Change in comparable restaurant sales:(1)
     Company.......................................        (2.0)%            (1.2)%           (0.4)%            (0.4)%
     Domestic franchise............................        (1.7)%             2.3 %            0.7 %             3.6 %
     Domestic total................................        (1.8)%             1.4 %            0.4 %             2.6 %

Total operating revenues (in thousands):
     Company restaurant sales......................     $ 296,128         $ 272,703        $ 604,027         $ 543,161
     Franchise royalties and fees(2)...............        34,306            32,493           70,241            65,501
     Other franchise income(3).....................           539             1,424              984             2,489
                                                       -------------     -------------    --------------    -------------
     Total.........................................     $ 330,973         $ 306,620        $ 675,252         $ 611,151
                                                       =============     =============    ==============    =============
<FN>
(1)  When computing comparable  restaurant sales,  restaurants open for at least
     18 months are compared from period to period.
(2)  Franchise  royalties  are  generally  4%  of  each  franchise  restaurant's
     reported   monthly  gross  sales.   Reported   franchise  sales  (including
     international restaurants), in thousands, were $859,557 and $820,483 in the
     2006  quarter  and the  2005  quarter,  respectively,  and  $1,764,201  and
     $1,653,480 in the 2006 year-to-date  period and 2005  year-to-date  period,
     respectively.  Franchise fees  typically  range from $30,000 to $35,000 for
     each restaurant opened.
(3)  Other  franchise  income  includes  revenue  from  information   technology
     products and services  provided to certain  franchisees.  In addition,  the
     2005 period includes  insurance  premiums from franchisee  participation in
     our captive insurance program.
</FN>
</TABLE>

<PAGE>


<TABLE>
<CAPTION>
                 APPLEBEE'S INTERNATIONAL, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
                      (in thousands, except share amounts)


                                                                                         June 25,         December 25,
                                                                                           2006               2005
                                                                                      --------------     -------------
                                                       ASSETS
<S>                                                                                   <C>                <C>
Current assets:
     Cash and cash equivalents...................................................      $    6,896         $   13,040
     Short-term investments, at market value.....................................             289                286
     Receivables, net of allowance...............................................          37,706             37,857
     Receivables related to captive insurance subsidiary.........................             503              1,712
     Inventories.................................................................          12,525             20,373
     Prepaid income taxes........................................................              55              3,488
     Prepaid and other current assets............................................          18,339             13,518
                                                                                      --------------     -------------
        Total current assets.....................................................          76,313             90,274
Property and equipment, net......................................................         619,638            590,593
Goodwill.........................................................................         139,111            138,443
Restricted assets related to captive insurance subsidiary........................          17,267             19,329
Other intangible assets, net.....................................................           6,713              8,050
Other assets, net................................................................          33,712             31,899
                                                                                      --------------     -------------
                                                                                       $  892,754         $  878,588
                                                                                      ==============     =============


                                        LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Current portion of long-term debt...........................................      $      283         $      259
     Notes payable...............................................................           4,400              7,900
     Accounts payable............................................................          41,773             63,445
     Accrued expenses and other current liabilities..............................          83,661            100,995
     Loss reserve related to captive insurance subsidiary........................           7,103             10,235
     Accrued dividends...........................................................            --               14,840
     Accrued income taxes........................................................             275               --
                                                                                      --------------     -------------
        Total current liabilities................................................         137,495            197,674
                                                                                      --------------     -------------
Non-current liabilities:
     Long-term debt, less current portion........................................         197,066            180,208
     Deferred income taxes.......................................................          34,235             37,722
     Other non-current liabilities...............................................          55,784             50,374
                                                                                      --------------     -------------
        Total non-current liabilities............................................         287,085            268,304
                                                                                      --------------     -------------
        Total liabilities........................................................         424,580            465,978
                                                                                      --------------     -------------
Stockholders' equity:
     Preferred stock - par value $0.01 per share:  authorized - 1,000,000 shares;
        no shares issued.........................................................            --                 --
     Common stock - par value $0.01 per share:  authorized - 125,000,000 shares;
        issued - 108,503,243 shares..............................................           1,085              1,085
     Additional paid-in capital..................................................         248,656            234,988
     Unearned compensation.......................................................            --               (2,614)
     Retained earnings...........................................................         757,832            710,277
                                                                                      --------------     -------------
                                                                                        1,007,573            943,736
     Treasury stock - 34,133,112 shares in 2006 and 34,304,693 shares
        in 2005, at cost.........................................................        (539,399)          (531,126)
                                                                                      --------------     -------------
        Total stockholders' equity...............................................         468,174            412,610
                                                                                      --------------     -------------
                                                                                       $  892,754         $  878,588
                                                                                      ==============     =============

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<PAGE>

<TABLE>
<CAPTION>

                 APPLEBEE'S INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (in thousands)


                                                                                      26 Weeks Ended
                                                                              --------------------------------
                                                                                June 25,           June 26,
                                                                                  2006               2005
                                                                              -------------      -------------
 <S>                                                                          <C>                <C>
 CASH FLOWS FROM OPERATING ACTIVITIES:
      Net earnings.......................................................       $  47,555          $  59,147
      Adjustments to reconcile net earnings to net cash provided
       by operating activities:
         Depreciation and amortization...................................          31,577             25,676
         Amortization of intangible assets...............................             408                454
         Stock-based compensation........................................          11,412              1,067
         Other amortization..............................................             156                 63
         Deferred income tax benefit.....................................          (1,046)            (2,294)
         Impairment and other restaurant closure costs...................           4,600               --
         Loss on disposition of property and equipment...................           1,007                861
         Income tax benefit from stock-based compensation................           1,403              3,794
      Changes in assets and liabilities, exclusive of effect
       of acquisitions:
         Receivables.....................................................             148                834
         Receivables related to captive insurance subsidiary.............           1,209             (1,342)
         Inventories.....................................................           7,906              9,014
         Income taxes....................................................           3,708             10,552
         Prepaid and other current assets................................          (7,262)              (217)
         Accounts payable................................................         (18,985)             4,626
         Accrued expenses and other current liabilities..................         (17,509)            (6,902)
         Loss reserve and unearned premiums related to captive
           insurance subsidiary..........................................          (3,132)             1,875
         Other non-current liabilities...................................           4,138              1,759
         Other ..........................................................          (1,461)            (1,177)
                                                                              -------------      -------------
         NET CASH PROVIDED BY OPERATING ACTIVITIES.......................          65,832            107,790
                                                                              -------------      -------------
 CASH FLOWS FROM INVESTING ACTIVITIES:
      Purchases of property and equipment................................         (59,976)           (59,922)
      Change in restricted assets related to captive
        insurance subsidiary.............................................           2,062             (1,417)
      Acquisition of restaurants.........................................          (8,040)           (46,777)
      Proceeds from sale of property and equipment.......................             242               --
                                                                              -------------      -------------
         NET CASH USED BY INVESTING ACTIVITIES...........................         (65,712)          (108,116)
                                                                              -------------      -------------
 CASH FLOWS FROM FINANCING ACTIVITIES:
      Purchases of treasury stock........................................         (16,134)           (68,238)
      Dividends paid.....................................................         (14,840)            (4,867)
      Issuance of common stock upon exercise of stock options............           7,856              9,929
      Shares issued under employee benefit plans.........................           2,318              2,323
      Excess tax benefits from stock-based compensation..................           1,154               --
      Net debt proceeds..................................................          13,382             51,198
                                                                              -------------      -------------
         NET CASH USED BY FINANCING ACTIVITIES...........................          (6,264)            (9,655)
                                                                              -------------      -------------
 NET DECREASE IN CASH AND CASH EQUIVALENTS...............................          (6,144)            (9,981)
 CASH AND CASH EQUIVALENTS, beginning of period..........................          13,040             10,642
                                                                              -------------      -------------
 CASH AND CASH EQUIVALENTS, end of period................................       $   6,896          $     661
                                                                              =============      =============
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