What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2020-10-30 compared with 2020-07-31 · 215 added, 201 removed, 764 unchanged (35% of the section changed)

2 unchanged sentences

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA, UNAUDITED)

JUNE 28, 2020 DECEMBER 29, 2019

SEPTEMBER 27, 2020 DECEMBER 29, 2019

Current assets

19 unchanged sentences

Non-current operating lease liabilities 1,230,008 1,279,051

Deferred income tax liabilities 3,262 13,777

Deferred income tax liabilities, net — 13,777

Long-term debt, net 1,112,290 1,022,293

5 unchanged sentences

Preferred stock, $ 0.01 par value, 25,000,000 shares authorized;

no shares issued and outstanding as of June 28, 2020 and December 29, 2019

no shares issued and outstanding as of September 27, 2020 and December 29, 2019

Common stock, $ 0.01 par value, 475,000,000 shares authorized;

87,533,599 and 86,945,869 shares issued and outstanding as of June 28, 2020 and December 29, 2019, respectively

87,572,904 and 86,945,869 shares issued and outstanding as of September 27, 2020 and December 29, 2019, respectively

Additional paid-in capital 1,126,146 1,094,338

9 unchanged sentences

(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

JUNE 28, 2020 JUNE 30, 2019 JUNE 28, 2020 JUNE 30, 2019

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 SEPTEMBER 27, 2020 SEPTEMBER 29, 2019

Restaurant sales $ 766,487 $ 951,816 $ 2,338,985 $ 3,069,145

2 unchanged sentences

Costs and expenses

Cost of sales 180,758 312,679 500,451 664,790

Food and beverage costs 230,547 300,375 730,998 965,165

Labor and other related 246,861 288,552 761,667 908,780

19 unchanged sentences

Foreign currency translation adjustment ( 4,095 ) ( 10,133 ) ( 41,202 ) ( 12,854 )

Unrealized loss on derivatives, net of tax ( 1,556 ) ( 7,239 ) ( 14,892 ) ( 11,620 )

Reclassification of adjustment for loss (gain) on derivatives included in Net (loss) income, net of tax 2,585 130 3,981 ( 234 )

Unrealized gain (loss) on derivatives, net of tax 261 ( 2,036 ) ( 14,631 ) ( 13,656 )

Reclassification of adjustment for loss on derivatives included in Net (loss) income, net of tax 2,962 812 6,943 578

Comprehensive (loss) income ( 18,650 ) ( 1,984 ) ( 193,510 ) 78,899

16 unchanged sentences

SHARES AMOUNT

Balance, March 29, 2020 87,417 $ 874 $ 1,074,081 $ ( 793,992 ) $ ( 189,013 ) $ 8,193 $ 100,143

Balance, June 28, 2020 87,534 $ 875 $ 1,123,613 $ ( 886,248 ) $ ( 217,130 ) $ 8,088 $ 29,198

Net loss — — — ( 17,637 ) — ( 141 ) ( 17,778 )

4 unchanged sentences

Contributions from noncontrolling interests — — — — — 219 219

Equity component value of convertible note issuance, net of tax of $ 650

— — 64,367 — — — 64,367

Sale of common stock warrant — — 46,690 — — — 46,690

Purchase of convertible note hedge — — ( 66,240 ) — — — ( 66,240 )

Balance, June 28, 2020 87,534 $ 875 $ 1,123,613 $ ( 886,248 ) $ ( 217,130 ) $ 8,088 $ 29,198

Balance, September 27, 2020 87,573 $ 875 $ 1,126,146 $ ( 903,885 ) $ ( 218,002 ) $ 7,421 $ 12,555

Balance, December 29, 2019 86,946 $ 869 $ 1,094,338 $ ( 755,089 ) $ ( 169,776 ) $ 7,139 $ 177,481

Cumulative-effect from a change in accounting principle, net of tax — — — ( 4,292 ) — — ( 4,292 )

Net (loss) income — — — ( 126,867 ) — 25 ( 126,842 )

Net loss — — — ( 144,504 ) — ( 116 ) ( 144,620 )

Other comprehensive loss, net of tax — — — — ( 48,743 ) ( 147 ) ( 48,890 )

11 unchanged sentences

Purchase of convertible note hedge — — ( 66,240 ) — — — ( 66,240 )

Balance, June 28, 2020 87,534 $ 875 $ 1,123,613 $ ( 886,248 ) $ ( 217,130 ) $ 8,088 $ 29,198

Balance, September 27, 2020 87,573 $ 875 $ 1,126,146 $ ( 903,885 ) $ ( 218,002 ) $ 7,421 $ 12,555

(CONTINUED...)

BLOOMIN’ BRANDS, INC.

6 unchanged sentences

SHARES AMOUNT

Balance, March 31, 2019 91,647 $ 916 $ 1,099,346 $ ( 714,425 ) $ ( 141,653 ) $ 8,179 $ 252,363

Balance, June 30, 2019 86,827 $ 868 $ 1,099,598 $ ( 792,341 ) $ ( 157,346 ) $ 7,814 $ 158,593

Net income — — — 9,248 — 125 9,373

2 unchanged sentences

— — ( 8,674 ) — — — ( 8,674 )

Repurchase and retirement of common stock ( 5,469 ) ( 55 ) — ( 106,937 ) — — ( 106,992 )

Stock-based compensation — — 4,613 — — — 4,613

Common stock issued under stock plans (1) 29 1 ( 155 ) — — — ( 154 )

Purchase of noncontrolling interests — — ( 157 ) — 34 82 ( 41 )

Distributions to noncontrolling interests — — — — — ( 1,221 ) ( 1,221 )

Contributions from noncontrolling interests — — — — — 401 401

Balance, June 30, 2019 86,827 $ 868 $ 1,099,598 $ ( 792,341 ) $ ( 157,346 ) $ 7,814 $ 158,593

Balance, September 29, 2019 86,856 $ 869 $ 1,095,382 $ ( 783,093 ) $ ( 168,875 ) $ 7,291 $ 151,574

Balance, December 30, 2018 91,272 $ 913 $ 1,107,582 $ ( 920,010 ) $ ( 142,755 ) $ 9,087 $ 54,817

10 unchanged sentences

Contributions from noncontrolling interests — — — — — 866 866

Balance, June 30, 2019 86,827 $ 868 $ 1,099,598 $ ( 792,341 ) $ ( 157,346 ) $ 7,814 $ 158,593

Balance, September 29, 2019 86,856 $ 869 $ 1,095,382 $ ( 783,093 ) $ ( 168,875 ) $ 7,291 $ 151,574

________________

4 unchanged sentences

(DOLLARS IN THOUSANDS, UNAUDITED)

TWENTY-SIX WEEKS ENDED

JUNE 28, 2020 JUNE 30, 2019

Cash flows (used in) provided by operating activities:

THIRTY-NINE WEEKS ENDED

SEPTEMBER 27, 2020 SEPTEMBER 29, 2019

Cash flows provided by operating activities:

Net (loss) income $ ( 144,620 ) $ 104,831

Adjustments to reconcile Net (loss) income to cash (used in) provided by operating activities:

Adjustments to reconcile Net (loss) income to cash provided by operating activities:

Depreciation and amortization 137,469 147,196

9 unchanged sentences

Loss on modification of debt 237 —

Loss on disposal of property, fixtures and equipment 1,014 328

Loss (gain) on disposal of property, fixtures and equipment 1,055 ( 3,217 )

Other, net ( 2,460 ) ( 6,818 )

Change in assets and liabilities ( 25,517 ) ( 160,592 )

Net cash (used in) provided by operating activities ( 3,313 ) 132,443

Net cash provided by operating activities 54,971 180,926

Cash flows used in investing activities:

8 unchanged sentences

(DOLLARS IN THOUSANDS, UNAUDITED)

TWENTY-SIX WEEKS ENDED

JUNE 28, 2020 JUNE 30, 2019

THIRTY-NINE WEEKS ENDED

SEPTEMBER 27, 2020 SEPTEMBER 29, 2019

Cash flows provided by (used in) financing activities:

26 unchanged sentences

Leased assets obtained in exchange for new finance lease liabilities 1,263 200

Decrease in liabilities from the acquisition of property, fixtures and equipment ( 9,666 ) ( 5,494 )

(Decrease) increase in liabilities from the acquisition of property, fixtures and equipment ( 7,174 ) 2,655

The accompanying notes are an integral part of these consolidated financial statements.

15 unchanged sentences

as of March 20, 2020 and shifted operations to provide only take-out and delivery service, resulting in significantly reduced traffic in its restaurants.

In early May 2020, the Company began to reopen its restaurant dining rooms with limited seating capacity in compliance with state and local regulations and as of June 28, 2020 had reopened substantially all of its restaurant dining rooms with limited seating capacity.

In early May 2020, the Company began to reopen its restaurant dining rooms with limited seating capacity in compliance with state and local regulations.

As of September 27, 2020, the Company’s restaurant dining rooms have reopened but many are still subject to seating capacity restrictions.

The temporary closure of the Company’s dining rooms and the limitations on seating capacity in its reopened dining rooms have resulted in significantly reduced traffic in the Company’s restaurants.

The negative effect of COVID-19 on the Company’s business was significant during the thirteen and twenty-six weeks ended June 28, 2020.

See Note 2 - COVID-19 Charges for details regarding the financial impact of the COVID-19 pandemic on the Company’s financial results.

The duration and severity of the COVID-19 pandemic and its long-term impact on the Company’s business are uncertain at this time.

The negative effect of COVID-19 on the Company’s business was significant during the thirteen and thirty-nine weeks ended September 27, 2020.

See Note 2 - COVID-19 Charges for details regarding certain charges resulting from the COVID-19 pandemic.

The duration of the COVID-19 pandemic and its long-term impact on the Company’s business are uncertain at this time.

Given the daily evolution of the pandemic and the global responses to curb its spread, the Company may be unable to accurately estimate the effects of the pandemic on its results of operations, financial condition, or liquidity for the foreseeable future.

4 unchanged sentences

The Company’s adoption of ASU No.

2016-13 and its related amendments (“the new credit loss standard”) resulted in a cumulative-effect debit adjustment to the beginning balance of Accumulated deficit of $ 4.3 million, including $ 4.8 million of contingent lease liabilities related to lease guarantees and $ 1.0 million of incremental reserve for credit losses, net of the $ 1.5 million net increase in related deferred tax assets.

Measurement processes and related controls have been implemented by the Company to ensure compliance with the new credit loss standard.

2 unchanged sentences

2018-15, “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40):

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” (“ASU No.

2018-15”), which clarifies the accounting for implementation

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(UNAUDITED) - Continued

Arrangement That Is a Service Contract,” (“ASU No.

2018-15”), which clarifies the accounting for implementation costs in cloud computing arrangements.

costs in cloud computing arrangements.

Under ASU No.

14 unchanged sentences

The Company continues to evaluate the impact of the guidance and may apply other elections, as applicable.

Recently Issued Financial Accounting Standards Not Yet Adopted - Recent accounting guidance not discussed herein is not applicable, did not have, or is not expected to have a material impact to the Company.

Reclassifications - The Company reclassified certain items in the accompanying consolidated financial statements for prior periods to be comparable with the classification for the current period.

These reclassifications had no effect on previously reported net income.

Recently Issued Financial Accounting Standards Not Yet Adopted - In August 2020, the FASB issued ASU No.

2020-06, “Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity,” (“ASU No.

2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity.

Specifically, ASU No.

2020-06 removes the separation models for convertible debt with a cash conversion feature or convertible instruments with a beneficial conversion feature.

As a result, after adopting ASU No.

2020-06, the Company will no longer separately present the embedded conversion feature of its convertible debt within stockholders’ equity.

2020-06 is effective for the Company in the first quarter of 2022, with early adoption permitted and may be adopted using either a full or modified retrospective approach.

Upon adoption interest expense is expected to decrease due to the elimination of debt discount amortization.

The Company is currently evaluating the full effect adopting ASU No.

2020-06 will have on its consolidated financial statements, including the timing and adoption approach.

BLOOMIN’ BRANDS, INC.

2 unchanged sentences

COVID-19 Charges

Following is a summary of the charges recorded in connection with the COVID-19 pandemic for the periods indicated below (dollars in thousands):

CHARGES CONSOLIDATED INCOME STATEMENT CLASSIFICATION THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

JUNE 28, 2020 JUNE 28, 2020

Inventory obsolescence and spoilage (1) Cost of sales $ 1,163 $ 7,345

Following is a summary of the charges recorded in connection with the COVID-19 pandemic for the period indicated (dollars in thousands):

CHARGES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME CLASSIFICATION THIRTY-NINE WEEKS ENDED

SEPTEMBER 27, 2020

Inventory obsolescence and spoilage Food and beverage costs $ 6,748

Compensation for idle employees (1) Labor and other related 28,243

7 unchanged sentences

________________

(1) Includes the write-off of value added tax credits in the twenty-six weeks ended June 28, 2020 related to the purchase of inventory by the Company’s Brazil subsidiary.

(2) Represents relief pay for hourly employees impacted by the closure of dining rooms, net of $ 13.7 million of employee retention tax credits earned during the thirteen and twenty-six weeks ended June 28, 2020.

(1) Represents relief pay for hourly employees impacted by the closure of dining rooms, net of $ 14.4 million of employee retention tax credits earned.

(2) Represents additional contingent liabilities recorded for lease guarantees related to certain former restaurant locations now operated by franchisees or other third parties.

2 unchanged sentences

See Note 4 - Impairments, Exit Costs and Disposals for details regarding COVID-19 Restructuring costs.

(6) Includes impairment of goodwill for the Company’s Hong Kong subsidiary during the twenty-six weeks ended June 28, 2020.

(5) Includes impairment of goodwill for the Company’s Hong Kong subsidiary.

See Note 9 - Goodwill and Intangible Assets, Net for details regarding impairment of goodwill.

1 unchanged sentence

The following table includes the categories of revenue included in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the periods indicated:

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 28, 2020 JUNE 30, 2019 JUNE 28, 2020 JUNE 30, 2019

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 SEPTEMBER 27, 2020 SEPTEMBER 29, 2019

Restaurant sales $ 766,487 $ 951,816 $ 2,338,985 $ 3,069,145

9 unchanged sentences

THIRTEEN WEEKS ENDED

JUNE 28, 2020 JUNE 30, 2019

SEPTEMBER 27, 2020 SEPTEMBER 29, 2019

(dollars in thousands) RESTAURANT SALES FRANCHISE REVENUE RESTAURANT SALES FRANCHISE REVENUE

12 unchanged sentences

(1) Includes Restaurant sales for the Company’s Abbraccio concept in Brazil.

TWENTY-SIX WEEKS ENDED

JUNE 28, 2020 JUNE 30, 2019

THIRTY-NINE WEEKS ENDED

SEPTEMBER 27, 2020 SEPTEMBER 29, 2019

(dollars in thousands) RESTAURANT SALES FRANCHISE REVENUE RESTAURANT SALES FRANCHISE REVENUE

16 unchanged sentences

The following table includes a detail of assets and liabilities from contracts with customers included on the Company’s Consolidated Balance Sheets as of the periods indicated:

(dollars in thousands) JUNE 28, 2020 DECEMBER 29, 2019

(dollars in thousands) SEPTEMBER 27, 2020 DECEMBER 29, 2019

Other current assets, net

7 unchanged sentences

Deferred franchise fees - non-current $ 4,301 $ 4,599

________________

(1) During the twenty-six weeks ended June 28, 2020, the Company extended the expiration dates of certain awards under its Dine Rewards program to June 30, 2020 in response to the interruption COVID-19 had to the Company’s business.

The following table is a rollforward of deferred gift card sales commissions for the periods indicated:

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 28, 2020 JUNE 30, 2019 JUNE 28, 2020 JUNE 30, 2019

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 SEPTEMBER 27, 2020 SEPTEMBER 29, 2019

Balance, beginning of period $ 13,624 $ 10,488 $ 18,554 $ 16,431

4 unchanged sentences

The following table is a rollforward of unearned gift card revenue for the periods indicated:

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 28, 2020 JUNE 30, 2019 JUNE 28, 2020 JUNE 30, 2019

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 SEPTEMBER 27, 2020 SEPTEMBER 29, 2019

Balance, beginning of period $ 279,973 $ 227,372 $ 358,757 $ 333,794

8 unchanged sentences

The components of Provision for impaired assets and restaurant closings are as follows for the periods indicated:

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 28, 2020 JUNE 30, 2019 JUNE 28, 2020 JUNE 30, 2019

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 SEPTEMBER 27, 2020 SEPTEMBER 29, 2019

Impairment losses

3 unchanged sentences

Total impairment losses $ 364 $ 1,548 $ 64,706 $ 6,962

Restaurant closure expenses

Restaurant closure (benefits) expenses

(1) $ ( 418 ) $ ( 196 ) $ 1,344 $ ( 101 )

International (1) — 39 173 56

Total restaurant closure expenses $ 1,041 $ 8 $ 1,935 $ 112

Total restaurant closure (benefits) expenses $ ( 418 ) $ ( 157 ) $ 1,517 $ ( 45 )

Provision for impaired assets and restaurant closings $ ( 54 ) $ 1,391 $ 66,223 $ 6,917

________________

(1) Includes goodwill impairment charges of $ 2.0 million during the twenty-six weeks ended June 28, 2020.

and international impairment and closure charges for the thirteen and thirty-nine weeks ended September 27, 2020 primarily relate to the COVID-19 pandemic (including charges related to the COVID-19 Restructuring discussed below).

See Note 2 - COVID-19 Charges for details regarding the impact of the COVID-19 pandemic on the Company’s financial results.

(2) Includes goodwill impairment charges of $ 2.0 million during the thirty-nine weeks ended September 27, 2020.

See Note 9 - Goodwill and Intangible Assets, Net for details regarding impairment of goodwill.

During the thirteen and twenty-six weeks ended June 28, 2020, the Company recognized asset impairment and closure charges related to the COVID-19 pandemic of $ 25.0 million and $ 56.3 million, respectively, in the U.S.

segment (including charges related to the COVID-19 Restructuring discussed below) and $ 0.3 million and $ 3.6 million, respectively, in the international segment.

The Company also recognized asset impairment charges related to transformational initiatives of $ 6.3 million during the twenty-six weeks ended June 28, 2020, which were not allocated to its operating segments.

COVID-19 Restructuring - During the thirteen and twenty-six weeks ended June 28, 2020, the Company recognized pre-tax asset impairments and closure costs in connection with the closure of 22 restaurants and from the update of certain cash flow assumptions, including lease renewal considerations (the “COVID-19 Restructuring”).

Following is a summary of the COVID-19 Restructuring charges recognized in the Consolidated Statements of Operations and Comprehensive (Loss) Income for the period indicated (in thousands):

LOCATION OF CHARGE IN THE CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME THIRTEEN AND TWENTY-SIX WEEKS ENDED

DESCRIPTION JUNE 28, 2020

(3) Corporate impairment charges primarily relate to transformational initiatives.

COVID-19 Restructuring - During the thirty-nine weeks ended September 27, 2020, the Company recognized pre-tax asset impairments and closure costs in connection with the closure of 22 restaurants and from the update of certain cash flow assumptions, including lease renewal considerations (the “COVID-19 Restructuring”).

Following is a summary of the COVID-19 Restructuring charges recognized in the Consolidated Statements of Operations and Comprehensive (Loss) Income for the period indicated (dollars in thousands):

LOCATION OF CHARGE IN THE CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME THIRTY-NINE WEEKS ENDED

DESCRIPTION SEPTEMBER 27, 2020

Property, fixtures and equipment impairments Provision for impaired assets and restaurant closings $ 16,932

1 unchanged sentence

Severance and other expenses General and administrative 1,021

The remaining impairment and closing charges during the periods presented resulted primarily from locations identified for remodel, relocation or closure and certain other assets.

Impairment and closure charges during the thirteen and thirty-nine weeks ended September 29, 2019 resulted primarily from locations identified for remodel, relocation or closure and certain other assets.

BLOOMIN’ BRANDS, INC.

2 unchanged sentences

Accrued Facility Closure and Other Costs Rollforward - The following table summarizes the Company’s accrual activity related to certain closure and restructuring initiatives, for the period indicated:

TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 28, 2020

THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 27, 2020

Balance, beginning of the period $ 14,542

5 unchanged sentences

________________

(1) As of June 28, 2020 , the Company had exit-related accruals related to certain closure and restructuring initiatives of $ 4.8 million recorded in Accrued and other current liabilities and $ 11.1 million recorded in Non-current operating lease liabilities on its Consolidated Balance Sheet.

(1) As of September 27, 2020, the Company had exit-related accruals related to certain closure and restructuring initiatives of $ 4.4 million recorded in Accrued and other current liabilities and $ 10.1 million recorded in Non-current operating lease liabilities on its Consolidated Balance Sheet.

Refranchising - During the thirteen weeks ended March 31, 2019, the Company completed the sale of 18 of its existing U.S.

2 unchanged sentences

See Note 20 - Commitments and Contingencies for additional details regarding lease guarantees .

Surplus Property Disposals - During the thirteen weeks ended September 29, 2019, the Company completed the sale of five of its U.S.

surplus properties for cash proceeds of $ 12.7 million, net of certain purchase price adjustments.

The transaction resulted in a net gain of $ 3.6 million, recorded within Other restaurant operating expense in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

(Loss) Earnings Per Share

The following table presents the computation of basic and diluted (loss) earnings per share attributable to common stockholders for the periods indicated:

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(in thousands, except per share data) JUNE 28, 2020 JUNE 30, 2019 JUNE 28, 2020 JUNE 30, 2019

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(in thousands, except per share data) SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 SEPTEMBER 27, 2020 SEPTEMBER 29, 2019

Net (loss) income attributable to Bloomin’ Brands

11 unchanged sentences

________________

(1) Consideration paid in excess of carrying value for the redemption of preferred stock is considered a deemed dividend and, for purposes of calculating earnings per share, reduces net income attributable to common stockholders for the twenty-six weeks ended June 28, 2020.

See Note 14 - Stockholders’ Equity for additional details.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

Weighted-average securities outstanding not included in the computation of (loss) earnings per share attributable to common stock holders because their effect was antidilutive were as follows, for the periods indicated:

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(shares in thousands) JUNE 28, 2020 JUNE 30, 2019 JUNE 28, 2020 JUNE 30, 2019

Weighted-average securities outstanding not included in the computation of net (loss) earnings per share attributable to common stockholders because their effect was antidilutive were as follows, for the periods indicated:

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(shares in thousands) SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 SEPTEMBER 27, 2020 SEPTEMBER 29, 2019

Stock options 5,381 5,408 5,133 4,336

6 unchanged sentences

As a result, upon conversion of the convertible senior notes, only the amounts in excess of the principal amount are considered in diluted earnings per share under the treasury stock method, if applicable.

For the thirteen and twenty-six weeks ended June 28, 2020, the convertible senior notes have been excluded from the computation of diluted earnings per share as the effect would be antidilutive given the Company’s net loss, and also since the conversion price of the convertible senior notes exceeded the average market price of the Company’s common stock.

Warrants to purchase approximately 19.348 million shares of the Company’s common shares at $ 16.64 per share were outstanding as of June 28, 2020 but were excluded from the computation of diluted earnings per share since the warrants’ strike price was greater than the average market price of the Company’s common stock during the period.

For the thirteen and thirty-nine weeks ended September 27, 2020, the convertible senior notes have been excluded from the computation of diluted earnings per share as the effect would be antidilutive given the Company’s net loss.

Warrants to purchase approximately 19.348 million shares of the Company’s common shares at $ 16.64 per share were outstanding as of September 27, 2020 but were excluded from the computation of diluted earnings per share since the warrants’ strike price was greater than the average market price of the Company’s common stock during the period.

See Note 12 - Convertible Senior Notes for additional information regarding the Company’s convertible senior notes.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

Stock-based Compensation Plans

The Company recognized stock-based compensation expense as follows for the periods indicated:

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 28, 2020 JUNE 30, 2019 JUNE 28, 2020 JUNE 30, 2019

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 SEPTEMBER 27, 2020 SEPTEMBER 29, 2019

Stock options $ 992 $ 1,316 $ 2,862 $ 3,888

2 unchanged sentences

$ 2,707 $ 4,553 $ 10,992 $ 13,541

During the twenty-six weeks ended June 28, 2020, the Company made grants of 0.1 million stock options, 0.4 million time-based restricted stock units and 0.5 million performance-based share units.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

During the thirty-nine weeks ended September 27, 2020, the Company made grants of 0.1 million stock options, 0.5 million time-based restricted stock units and 0.5 million performance-based share units.

Assumptions used in the Black-Scholes option pricing model and the weighted-average fair value of option awards granted were as follows for the periods indicated:

TWENTY-SIX WEEKS ENDED

JUNE 28, 2020 JUNE 30, 2019

THIRTY-NINE WEEKS ENDED

SEPTEMBER 27, 2020 SEPTEMBER 29, 2019

Weighted-average risk-free interest rate (1) 0.90 % 2.34 %

7 unchanged sentences

(2) Dividend yield is the level of dividends expected to be paid on the Company’s common stock over the expected term of the option.

The dividend yield for the thirty-nine weeks ended September 27, 2020 relates to options granted prior the Company’s Amended Credit Agreement which restricts the payment of dividends.

See Note 11 - Long-term Debt, Net for dividend restriction details.

(3) Expected term represents the period of time that the options are expected to be outstanding.

1 unchanged sentence

(4) Based on the historical volatility of the Company’s stock.

The following represents unrecognized stock compensation expense and the remaining weighted-average vesting period as of June 28, 2020 :

The following represents unrecognized stock compensation expense and the remaining weighted-average vesting period as of September 27, 2020:

UNRECOGNIZED COMPENSATION EXPENSE

3 unchanged sentences

Performance-based share units $ 9,233 1.8

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

Other Current Assets, Net

Other current assets, net, consisted of the following as of the periods indicated:

(dollars in thousands) JUNE 28, 2020 DECEMBER 29, 2019

(dollars in thousands) SEPTEMBER 27, 2020 DECEMBER 29, 2019

Prepaid expenses $ 18,837 $ 20,218

7 unchanged sentences

$ 76,837 $ 186,462

________________

(1) Includes $ 3.7 million of Company-owned life insurance policies as of June 28, 2020 transferred to Other current assets, net during the twenty-six weeks ended June 28, 2020 for planned payment of deferred compensation obligations.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

Property, Fixtures and Equipment, Net

Property, fixtures and equipment, net, consisted of the following as of the periods indicated:

(dollars in thousands) JUNE 28, 2020 DECEMBER 29, 2019

(dollars in thousands) SEPTEMBER 27, 2020 DECEMBER 29, 2019

Land $ 40,728 $ 42,570

12 unchanged sentences

Impairment charges — ( 1,973 ) ( 1,973 )

Balance as of June 28, 2020 $ 170,657 $ 100,738 $ 271,395

T he COVID-19 outbreak was considered a triggering event in the thirteen weeks ended March 29, 2020, indicating that the carrying amount of goodwill may not be recoverable.

Balance as of September 27, 2020 $ 170,657 $ 99,081 $ 269,738

T he COVID-19 outbreak was considered a triggering event during the thirteen weeks ended March 29, 2020, indicating that the carrying amount of goodwill may not be recoverable.

As a result, the Company performed a quantitative assessment for all reporting units to determine whether a reporting unit was impaired.

Based on this assessment, which utilized a discounted cash flow analysis, the Company recorded full impairment of goodwill related to its Hong Kong reporting unit of $ 2.0 million, within the international segment, during the thirteen weeks ended March 29, 2020.

Impairment was not recorded for any of the Company’s other reporting units as a result the quantitative assessment.

Impairment was not recorded for any of the Company’s other reporting units as a result of the quantitative assessment.

Annual Goodwill and Intangible Asset Impairment Assessment - The Company performs its annual assessment for impairment of goodwill and other indefinite-lived intangible assets as of the first day of its second fiscal quarter.

Since the Company performed a quantitative assessment on the last day of the first fiscal quarter in 2020, as described above, the Company utilized the same assumptions and analysis in performing a quantitative annual assessment in its second fiscal quarter and concluded that no additional impairment was required.

In 2019, the Company performed a qualitative assessment and did no t record any impairment charges.

Since the Company performed a quantitative assessment on the last day of the first fiscal quarter of 2020, as described above, the Company utilized the same assumptions and analysis in performing a quantitative annual

BLOOMIN’ BRANDS, INC.

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(UNAUDITED) - Continued

assessment in its second fiscal quarter and concluded that no additional impairment was required.

In 2019, the Company performed a qualitative assessment and did no t record any impairment charges.

Other Assets, Net

Other assets, net, consisted of the following as of the periods indicated:

(dollars in thousands) JUNE 28, 2020 DECEMBER 29, 2019

(dollars in thousands) SEPTEMBER 27, 2020 DECEMBER 29, 2019

Company-owned life insurance (1) $ 50,887 $ 60,126

Deferred financing fees (2) 5,909 4,893

Deferred debt issuance costs (2) 5,301 4,893

Liquor licenses 24,250 24,289

2 unchanged sentences

________________

(1) During the twenty-six weeks ended June 28, 2020, the Company reclassified $ 9.1 million of Company-owned life insurance policies to current assets in anticipation of settlement of such policies to pay deferred compensation obligations.

(2) Net of accumulated amortization of $ 7.7 million and $ 6.8 million as of June 28, 2020 and December 29, 2019, respectively.

(1) During the thirty-nine weeks ended September 27, 2020, the Company utilized $ 9.3 million of Company-owned life insurance policies to pay deferred compensation obligations.

(2) Net of accumulated amortization of $ 8.4 million and $ 6.8 million as of September 27, 2020 and December 29, 2019, respectively.

Long-term Debt, Net

Following is a summary of outstanding long-term debt, as of the periods indicated:

JUNE 28, 2020 DECEMBER 29, 2019

SEPTEMBER 27, 2020 DECEMBER 29, 2019

(dollars in thousands) OUTSTANDING BALANCE INTEREST RATE OUTSTANDING BALANCE INTEREST RATE

12 unchanged sentences

(1) Interest rate represents the weighted-average interest rate for the respective periods.

(2) Subsequent to September 27, 2020, the Company made a payment of $ 23.0 million on its revolving credit facility.

(3) See Note 12 - Convertible Senior Notes for details regarding the convertible senior notes and related hedge and warrant transactions .

20 unchanged sentences

The Company is also subject to a 0 % Eurocurrency floor under the Amended Credit Agreement.

Deferred Financing Fees - The Company deferred $ 2.9 million of financing costs incurred in connection with the Amended Credit Agreement.

Deferred financing fees of $ 2.0 million associated with the revolving credit facility portion of the Amended Credit Agreement were recorded in Other assets, net and all other deferred financing fees were recorded in Long-term debt, net.

As of June 28, 2020 and December 29, 2019, the Company was in compliance with its debt covenants.

Deferred Debt Issuance Costs - The Company deferred $ 2.9 million of debt issuance costs incurred in connection with the Amended Credit Agreement.

Deferred debt issuance costs of $ 2.0 million associated with the revolving credit facility portion of the Amended Credit Agreement were recorded in Other assets, net and all other deferred debt issuance costs were recorded in Long-term debt, net during the thirteen weeks ended June 28, 2020.

As of September 27, 2020 and December 29, 2019, the Company was in compliance with its debt covenants.

Convertible Senior Notes

3 unchanged sentences

The 2025 Notes bear cash interest at an annual rate of 5.00 %, payable semi-annually in arrears on May 1 and November 1 of each year, beginning on November 1, 2020.

The 2025 Notes are unsecured obligations and do not contain any financial covenants or restrictions on incurring additional indebtedness, paying dividends or issuing or repurchasing any securities.

Events of default under the

BLOOMIN’ BRANDS, INC.

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(UNAUDITED) - Continued

The 2025 Notes are unsecured obligations and do not contain any financial covenants or restrictions on incurring additional indebtedness, paying dividends or issuing or repurchasing any securities.

Events of default under the indenture for the 2025 Notes include, among other things, a default in the payment when due of the principal of, or the redemption price for, any note and a default for 30 days in the payment when due of interest on any note.

indenture for the 2025 Notes include, among other things, a default in the payment when due of the principal of, or the redemption price for, any note and a default for 30 days in the payment when due of interest on any note.

If an event of default, the principal amount of, and all accrued and unpaid interest on, all of the notes then outstanding will immediately become due and payable.

1 unchanged sentence

This initial conversion rate is equivalent to an initial conversion price of approximately $ 11.89 per share.

The conversion rate will be subject to adjustment upon the occurrence of certain specified events.

The conversion rate is subject to adjustment upon the occurrence of certain specified events.

Noteholders may convert their notes at their option only in the circumstances described in the indenture.

2 unchanged sentences

Upon issuance, the principal amount was separated into a liability and an equity component, such that interest expense reflects the Company’s nonconvertible debt interest rate.

The initial carrying value of the 2025 Notes, excluding the discounts upon original issuance and third party offering costs allocated to the liability, and recorded during the thirteen weeks ended June 28, 2020, is as follows (in thousands):

The initial carrying value of the 2025 Notes, excluding the discounts upon original issuance and third-party offering costs allocated to the liability, and recorded during the thirteen weeks ended June 28, 2020, is as follows (dollars in thousands):

Liability component

11 unchanged sentences

The Convertible Note Hedge Transactions cover, subject to customary anti-dilution adjustments, the number of shares of the Company’s common stock that initially underlie the 2025 Notes , and are expected generally to reduce the potential equity dilution, and/or offset any cash payments in excess of the principal amount due, as the case may be, upon conversion of the 2025 Notes .

The Warrant Transactions could have a dilutive effect on the Company’s

The Warrant Transactions could have a dilutive effect on the Company’s common stock to the extent that the price of its common stock exceeds the strike price of the Warrant Transactions.

BLOOMIN’ BRANDS, INC.

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(UNAUDITED) - Continued

common stock to the extent that the price of its common stock exceeds the strike price of the Warrant Transactions.

The strike price will initially be $ 16.64 per share and is subject to certain adjustments under the terms of the Warrant Transactions.

4 unchanged sentences

Other long-term liabilities, net, consisted of the following, as of the periods indicated:

(dollars in thousands) JUNE 28, 2020 DECEMBER 29, 2019

(dollars in thousands) SEPTEMBER 27, 2020 DECEMBER 29, 2019

Accrued insurance liability $ 32,592 $ 33,818

Chef and Restaurant Managing Partner deferred compensation obligations 35,273 47,831

Deferred payroll tax liabilities (1) 36,092 —

Other long-term liabilities (2) 69,815 56,411

1 unchanged sentence

________________

(1) The increase in Other long-term liabilities during the twenty-six weeks ended June 28, 2020, primarily relates to $ 16.9 million related to deferred payroll tax liabilities (as allowed for in the Coronavirus, Aid, Relief and Economic Security Act), $ 8.6 million of additional contingent lease liabilities subsequent to the adoption of ASU No.

(1) Deferred payroll tax liabilities as allowed for in the Coronavirus, Aid, Relief and Economic Security Act (“CARES Act”).

See Note 19 - Income Taxes for details regarding the CARES Act.

(2) The increase in Other long-term liabilities during the thirty-nine weeks ended September 27, 2020, primarily relates to $ 8.7 million of additional contingent lease liabilities subsequent to the adoption of ASU No.

2016-13 and $ 2.8 million of additional interest rate swap liabilities.

See Note 19 - Income Taxes , Note 20 - Commitments and Contingencies and Note 15 - Derivative Instruments and Hedging Activities , respectively, for details regarding these increases.

See Note 20 - Commitments and Contingencies and Note 15 - Derivative Instruments and Hedging Activities , respectively, for details regarding these increases.

Stockholders’ Equity

9 unchanged sentences

Accumulated Other Comprehensive Loss (“AOCL”) - Following are the components of AOCL as of the periods indicated:

(dollars in thousands) JUNE 28, 2020 DECEMBER 29, 2019

(dollars in thousands) SEPTEMBER 27, 2020 DECEMBER 29, 2019

Foreign currency translation adjustment $ ( 192,569 ) $ ( 152,031 )

2 unchanged sentences

Following are the components of Other comprehensive loss attributable to Bloomin’ Brands for the periods indicated:

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 28, 2020 JUNE 30, 2019 JUNE 28, 2020 JUNE 30, 2019

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 SEPTEMBER 27, 2020 SEPTEMBER 29, 2019

Foreign currency translation adjustment $ ( 4,095 ) $ ( 10,305 ) $ ( 40,538 ) $ ( 13,042 )

Unrealized loss on derivatives, net of tax (1) $ ( 1,556 ) $ ( 7,239 ) $ ( 14,892 ) $ ( 11,620 )

Reclassification of adjustments for loss (gain) on derivatives included in Net (loss) income, net of tax (2) 2,585 130 3,981 ( 234 )

Unrealized gain (loss) on derivatives, net of tax (1) $ 261 $ ( 2,036 ) $ ( 14,631 ) $ ( 13,656 )

Reclassification of adjustments for loss on derivatives included in Net (loss) income, net of tax (2) 2,962 812 6,943 578

Total unrealized gain (loss) on derivatives, net of tax $ 3,223 $ ( 1,224 ) $ ( 7,688 ) $ ( 13,078 )

1 unchanged sentence

________________

(1) Unrealized loss on derivatives is net of tax of $ 0.5 million and $ 2.5 million for the thirteen weeks ended June 28, 2020 and June 30, 2019 and $ 5.2 million and $ 4.0 million for the twenty-six weeks ended June 28, 2020 and June 30, 2019, respectively.

(2) Reclassifications of adjustments for loss (gain) on derivatives are net of tax.

(1) Unrealized gain (loss) on derivatives is net of tax of $ 0.1 million and $( 0.7 ) million for the thirteen weeks ended September 27, 2020 and September 29, 2019 and $( 5.1 ) million and $( 4.7 ) million for the thirty-nine weeks ended September 27, 2020 and September 29, 2019, respectively.

(2) Reclassifications of adjustments for loss on derivatives are net of tax.

See Note 15 - Derivative Instruments and Hedging Activities for the tax impact of reclassifications.

6 unchanged sentences

The following table presents the fair value and classification of the Company’s swap agreements, as of the periods indicated :

(dollars in thousands) JUNE 28, 2020 DECEMBER 29, 2019 CONSOLIDATED BALANCE SHEET CLASSIFICATION

(dollars in thousands) SEPTEMBER 27, 2020 DECEMBER 29, 2019 CONSOLIDATED BALANCE SHEET CLASSIFICATION

Interest rate swaps - liability $ 14,749 $ 7,174 Accrued and other current liabilities

4 unchanged sentences

(1) See Note 17 - Fair Value Measurements for fair value discussion of the interest rate swaps.

On May 4, 2020 , concurrent with entering into the Amended Credit Agreement, the Company de-designated its interest rate swap hedge relationship and modified its hedge documentation to more closely align with certain terms

BLOOMIN’ BRANDS, INC.

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(UNAUDITED) - Continued

of the Amended Credit Agreement.

On May 6, 2020, the Company re-designated the cash flow hedge relationship for the original $ 550.0 million notional amount, resulting in no impact to the Company’s consolidated financial statements as a result of the hedge activity.

The following table summarizes the effects of the swap agreements on Net (loss) income for the periods indicated:

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 28, 2020 JUNE 30, 2019 JUNE 28, 2020 JUNE 30, 2019

Interest rate swap (expense) income recognized in Interest expense, net $ ( 3,482 ) $ ( 175 ) $ ( 5,362 ) $ 316

Income tax benefit (expense) recognized in (Benefit) provision for income taxes 897 45 1,381 ( 82 )

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 SEPTEMBER 27, 2020 SEPTEMBER 29, 2019

Interest rate swap expense recognized in Interest expense, net $ ( 3,991 ) $ ( 1,095 ) $ ( 9,353 ) $ ( 779 )

Income tax benefit recognized in (Benefit) provision for income taxes 1,029 283 2,410 201

Total effects of the interest rate swaps on Net (loss) income $ ( 2,962 ) $ ( 812 ) $ ( 6,943 ) $ ( 578 )

2 unchanged sentences

The Company continually assesses the creditworthiness of its counterparties.

As of June 28, 2020 , all counterparties to the interest rate swaps had performed in accordance with their contractual obligations.

As of September 27, 2020 , all counterparties to the interest rate swaps had performed in accordance with their contractual obligations.

The Company has agreements with each of its derivative counterparties that contain a provision where the Company could be declared in default on its derivative obligations if the repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default on indebtedness.

As of June 28, 2020 and December 29, 2019 , the fair value of the Company’s interest rate swaps was in a net liability position, including accrued interest but excluding any adjustment for nonperformance risk, of $ 40.5 million and $ 24.8 million, respectively.

As of June 28, 2020 and December 29, 2019 , the Company has not posted any collateral related to these agreements.

If the Company had breached any of these provisions as of June 28, 2020 and December 29, 2019 , it could have been required to settle its obligations under the agreements at their termination value of $ 40.5 million and $ 24.8 million, respectively.

As of September 27, 2020 and December 29, 2019 , the fair value of the Company’s interest rate swaps was in a net liability position, including accrued interest but excluding any adjustment for nonperformance risk, of $ 36.5 million and $ 24.8 million, respectively.

As of September 27, 2020 and December 29, 2019 , the Company has not posted any collateral related to these agreements.

If the Company had breached any of these provisions as of September 27, 2020 and December 29, 2019 , it could have been required to settle its obligations under the agreements at their termination value of $ 36.5 million and $ 24.8 million, respectively.

In April 2020, the FASB issued a question and answer document focused on the application of lease accounting guidance to lease concessions provided as a result of COVID-19 (the “Lease Modification Q&A”).

8 unchanged sentences

The following table includes a detail of lease assets and liabilities included on the Company’s Consolidated Balance Sheets as of the periods indicated:

(dollars in thousands) CONSOLIDATED BALANCE SHEET CLASSIFICATION JUNE 28, 2020 DECEMBER 29, 2019

(dollars in thousands) CONSOLIDATED BALANCE SHEET CLASSIFICATION SEPTEMBER 27, 2020 DECEMBER 29, 2019

Operating lease right-of-use assets Operating lease right-of-use assets $ 1,192,035 $ 1,266,548

7 unchanged sentences

________________

(1) Net of accumulated amortization of $ 1.8 million and $ 1.3 million as of June 28, 2020 and December 29, 2019, respectively.

(2) Excludes COVID-19-related deferred rent accruals of $ 18.3 million as of June 28, 2020 and accrued contingent percentage rent of $ 2.7 million and $ 2.4 million, as of June 28, 2020 and December 29, 2019, respectively.

(1) Net of accumulated amortization of $ 2.1 million and $ 1.3 million as of September 27, 2020 and December 29, 2019, respectively.

(2) Excludes COVID-19-related deferred rent accruals of $ 14.4 million as of September 27, 2020 and accrued contingent percentage rent of $ 2.6 million and $ 2.4 million, as of September 27, 2020 and December 29, 2019, respectively.

Following is a summary of expenses and income related to leases recognized in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the periods indicated:

CONSOLIDATED INCOME STATEMENT CLASSIFICATION THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 28, 2020 JUNE 30, 2019 JUNE 28, 2020 JUNE 30, 2019

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME CLASSIFICATION THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 SEPTEMBER 27, 2020 SEPTEMBER 29, 2019

Operating leases (1) Other restaurant operating $ 45,341 $ 45,948 $ 133,999 $ 136,260

6 unchanged sentences

________________

(1) Excludes rent expense for office facilities and Company-owned closed or subleased properties of $ 3.3 million and $ 3.7 million for the thirteen weeks ended June 28, 2020 and June 30, 2019, respectively, and $ 6.9 million and $ 7.2 million for the twenty-six weeks ended June 28, 2020 and June 30, 2019, respectively, which is included in General and administrative expense.

Also excludes certain supply chain related rent expense of $ 0.3 million for the thirteen weeks ended June 28, 2020 and June 30, 2019 and $ 0.6 million for the twenty-six weeks ended June 28, 2020 and June 30, 2019, which is included in Cost of sales.

(2) Excludes rental income from Company-owned properties of $ 0.1 million and $ 0.7 million for the thirteen weeks ended June 28, 2020 and June 30, 2019, respectively, and $ 0.3 million and $ 1.4 million for the twenty-six weeks ended June 28, 2020 and June 30, 2019, respectively.

(1) Excludes rent expense for office facilities and Company-owned closed or subleased properties of $ 3.6 million and $ 3.8 million for the thirteen weeks ended September 27, 2020 and September 29, 2019, respectively, and $ 10.4 million and $ 11.0 million for the thirty-nine weeks ended September 27, 2020 and September 29, 2019, respectively, which is included in General and administrative expense.

Also excludes certain supply chain related rent expense of $ 0.3 million for the thirteen weeks ended September 27, 2020 and September 29, 2019 and $ 1.0 million and $ 0.9 million for the thirty-nine weeks ended September 27, 2020 and September 29, 2019, respectively, which is included in Food and beverage costs.

(2) Excludes rental income from Company-owned properties of $ 0.4 million for the thirteen weeks ended September 29, 2019 and $ 0.3 million and $ 1.8 million for the thirty-nine weeks ended September 27, 2020 and September 29, 2019, respectively.

The following table is a summary of other impacts to the Company’s Consolidated Financial Statements related to its leases for the periods indicated:

TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 28, 2020 JUNE 30, 2019

THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 27, 2020 SEPTEMBER 29, 2019

Cash flows from operating activities:

10 unchanged sentences

Fair Value Measurements on a Recurring Basis - The following table summarizes the Company’s financial assets and liabilities measured at fair value by hierarchy level on a recurring basis as of the periods indicated:

JUNE 28, 2020 DECEMBER 29, 2019

SEPTEMBER 27, 2020 DECEMBER 29, 2019

(dollars in thousands) TOTAL LEVEL 1 LEVEL 2 TOTAL LEVEL 1 LEVEL 2

17 unchanged sentences

The Company also considers its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements.

As of June 28, 2020 and December 29, 2019, the Company has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives.

As of September 27, 2020 and December 29, 2019, the Company has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives.

BLOOMIN’ BRANDS, INC.

5 unchanged sentences

THIRTEEN WEEKS ENDED

JUNE 28, 2020 JUNE 30, 2019

(dollars in thousands) CARRYING VALUE TOTAL IMPAIRMENT CARRYING VALUE TOTAL IMPAIRMENT

SEPTEMBER 27, 2020 SEPTEMBER 29, 2019

(dollars in thousands) REMAINING CARRYING VALUE TOTAL IMPAIRMENT REMAINING CARRYING VALUE TOTAL IMPAIRMENT

Assets held for sale (1)

$ — $ — $ 900 $ 100

Operating lease right-of-use assets (2)

2 unchanged sentences

207 388 395 826

Goodwill and other assets (3) 748 295 — —

$ 207 $ 364 $ 1,588 $ 1,548

TWENTY-SIX WEEKS ENDED

JUNE 28, 2020 JUNE 30, 2019

(dollars in thousands) CARRYING VALUE TOTAL IMPAIRMENT CARRYING VALUE TOTAL IMPAIRMENT

THIRTY-NINE WEEKS ENDED

SEPTEMBER 27, 2020 SEPTEMBER 29, 2019

(dollars in thousands) REMAINING CARRYING VALUE TOTAL IMPAIRMENT REMAINING CARRYING VALUE TOTAL IMPAIRMENT

Assets held for sale (1)

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____________________

(1) Carrying values measured using Level 2 inputs to estimate fair value totaled $ 0.2 million during the twenty-six weeks ended June 30, 2019.

(1) Assets generally measured using third-party market appraisals or executed sales contracts (Level 2).

(2) Carrying values measured using Level 2 inputs to estimate fair value totaled $ 0.2 million during the thirty-nine weeks ended September 29, 2019.

All other assets were valued using Level 3 inputs.

Third-party market appraisals (Level 2) and discounted cash flow models (Level 3) were used to estimate fair value.

(2) Carrying values measured using Level 2 inputs to estimate fair value totaled $ 0.5 million and $ 2.2 million during the thirteen and twenty-six weeks ended June 28, 2020, respectively.

(3) Carrying values measured using Level 2 inputs to estimate fair value totaled $ 2.2 million during the thirty-nine weeks ended September 27, 2020.

All other assets were valued using Level 3 inputs.

Third-party market appraisals (Level 2) and discounted cash flow models (Level 3) were used to estimate fair value.

(3) All assets measured using the quoted market value of comparable assets (Level 2).

(4) Assets generally measured using third-party market appraisals or executed sales contracts (Level 2).

See Note 4 - Impairments, Exit Costs and Disposals for information regarding impairment charges resulting from the fair value measurement performed on a nonrecurring basis during the thirteen and twenty-six weeks ended June 28, 2020.

(4) Other assets generally measured using the quoted market value of comparable assets (Level 2).

Projected future cash flows, including discount rate and growth rate assumptions, are derived from current economic conditions, expectations of management and projected trends of current operating results.

8 unchanged sentences

The following table presents quantitative information related to certain unobservable inputs used in the Company’s Level 3 fair value measurements of Operating lease right-of-use assets and Property, fixtures and equipment for the impairment losses incurred during the periods indicated:

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

UNOBSERVABLE INPUTS JUNE 28, 2020 JUNE 28, 2020

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

UNOBSERVABLE INPUTS SEPTEMBER 27, 2020 SEPTEMBER 27, 2020

Weighted-average cost of capital 11.3 % 10.4 % to 11.3 %

5 unchanged sentences

The following table includes the carrying value and fair value of the Company’s debt by hierarchy level as of the periods indicated:

JUNE 28, 2020 DECEMBER 29, 2019

SEPTEMBER 27, 2020 DECEMBER 29, 2019

CARRYING VALUE FAIR VALUE LEVEL 2 CARRYING VALUE FAIR VALUE LEVEL 2

6 unchanged sentences

The following is a rollforward of the allowance for trade receivable expected credit losses for the periods indicated:

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 28, 2020 JUNE 28, 2020

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 27, 2020 SEPTEMBER 27, 2020

Allowance for credit losses, beginning of period $ 4,566 $ 199

2 unchanged sentences

Provision for expected credit losses 2 3,351

Charge-off of accounts ( 29 ) ( 29 )

Allowance for credit losses, end of period $ 4,539 $ 4,539

2 unchanged sentences

Amounts due from franchisees consist of initial franchise fees, royalty income, and advertising fees.

See Note 7 - Other Current Assets, Net for disclosure of trades receivables by category as of June 28, 2020 and December 29, 2019.

See Note 7 - Other Current Assets, Net for disclosure of trades receivables by category as of September 27, 2020 and December 29, 2019.

Domestic credit card receivables are recorded within Cash and cash equivalents based on their short duration and reasonably assured settlement.

The Company evaluates the collectability of trade receivables based on historical loss experience and risk pool and records periodic adjustments for factors such as deterioration of economic conditions, specific customer circumstances and changes in the aging of accounts receivable balances.

For risk pools where there was no established loss history, S&P speculative-grade default rates are utilized to calculate an estimated loss rate.

Losses are charged off in the period in which they are determined to be uncollectable.

For risk pools where there was no

BLOOMIN’ BRANDS, INC.

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(UNAUDITED) - Continued

established loss history, S&P speculative-grade default rates are utilized to calculate an estimated loss rate.

Losses are charged off in the period in which they are determined to be uncollectable.

The financial condition of the Company’s franchisees is largely dependent on the underlying business trends of its brands and market conditions within the casual dining restaurant industry.

3 unchanged sentences

See Note 20 - Commitments and Contingencies for details regarding these lease guarantees.

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 28, 2020 JUNE 30, 2019 JUNE 28, 2020 JUNE 30, 2019

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 SEPTEMBER 27, 2020 SEPTEMBER 29, 2019

(Loss) income before (benefit) provision for income taxes $ ( 32,554 ) $ 8,713 $ ( 214,830 ) $ 110,882

2 unchanged sentences

On March 27, 2020, the President of the United States signed into law the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”).

Accordingly, the applicable provisions of the CARES Act have been reflected in the Company’s tax provision for the thirteen and twenty-six weeks ended June 28, 2020.

Accordingly, the applicable provisions of the CARES Act have been reflected in the Company’s tax provision for the thirteen and thirty-nine weeks ended September 27, 2020.

The CARES Act, among other items, includes U.S.

corporate tax provisions related to the deferment of employer social security payments, employee retention credits, net operating loss (“NOL”) carryback periods, alternative minimum tax credits, modifications to interest deduction limitations and technical corrections on tax depreciation methods for qualified improvement property (“QIP”).

The effective income tax rate for the thirteen and twenty-six weeks ended June 28, 2020 increased by 24.0 and 23.8 percentage points as compared to the thirteen and twenty-six weeks ended June 30, 2019.

These increases were primarily due to the benefit of the tax credits for FICA taxes on certain employees’ tips and the forecasted 2020 pre-tax book loss.

The effective income tax rate for the thirteen and thirty-nine weeks ended September 27, 2020 increased by 53.0 and 27.2 percentage points as compared to the thirteen and thirty-nine weeks ended September 29, 2019.

These increases were primarily due to the benefit of the tax credits for FICA taxes on certain employees’ tips, the forecasted 2020 pre-tax book loss and changes to the estimate of the forecasted full-year effective tax rate relative to prior quarters in 2020.

As of December 29, 2019, the Company had $ 128.6 million in general business tax credits carryforwards, which have a 20-year carryforward period and are utilized on a first-in, first-out basis.

3 unchanged sentences

The Company has a blended federal and state statutory rate of approximately 26 %.

The effective income tax rate for the thirteen and twenty-six weeks ended June 28, 2020 was higher than the statutory rate primarily due to the benefit of tax credits for FICA taxes on certain employees’ tips.

Deferred Taxes - During the twenty-six weeks ended June 28, 2020, Deferred income tax assets, net increased by $ 56.1 million primarily as a result of losses incurred during the period and tax credits for FICA taxes on certain employees’ tips.

The effective income tax rate for the thirteen and thirty-nine weeks ended September 27, 2020 was higher than the statutory rate primarily due to the benefit of tax credits for FICA taxes on certain employees’ tips.

Deferred Taxes - During the thirty-nine weeks ended September 27, 2020, Deferred income tax assets, net increased by $ 73.3 million primarily as a result of losses incurred during the period and tax credits for FICA taxes on certain employees’ tips.

BLOOMIN’ BRANDS, INC.

2 unchanged sentences

Commitments and Contingencies

Litigation and Other Matters - The Company had $ 4.2 million and $ 3.0 million of liabilities recorded for various legal matters as of June 28, 2020 and December 29, 2019, respectively.

Litigation and Other Matters - The Company had $ 5.2 million and $ 3.0 million of liabilities recorded for various legal matters as of September 27, 2020 and December 29, 2019, respectively.

The Company is subject to legal proceedings, claims and liabilities, such as liquor liability, slip and fall cases, wage-and-hour and other employment-related litigation, which arise in the ordinary course of business and are generally covered by insurance if they exceed specified retention or deductible amounts.

2 unchanged sentences

These leases have varying terms, the latest of which expires in 2032.

As of June 28, 2020, the undiscounted payments that the Company could be required to make in the event of non-payment by the primary lessees was approximately $ 32.6 million .

The present value of these potential payments discounted at the Company’s incremental borrowing rate as of June 28, 2020 was approximately $ 20.5 million .

As of September 27, 2020, the undiscounted payments that the Company could be required to make in the event of non-payment by the primary lessees was approximately $ 29.0 million.

The present value of these potential payments discounted at the Company’s incremental borrowing rate as of September 27, 2020 was approximately $ 20.7 million.

In the event of default, the indemnity clauses in the Company’s purchase and sale agreements govern its ability to pursue and recover damages incurred.

In March 2020, the Company recorded $ 4.2 million of additional contingent lease liability in response to the economic impact of the COVID-19 pandemic.

As of June 28, 2020, the Company’s recorded contingent lease liability was $ 9.6 million.

As of September 27, 2020, the Company’s recorded contingent lease liability was $ 9.7 million.

See Note 2 - COVID-19 Charges for details regarding the impact of the COVID-19 pandemic on the Company’s financial results.

During the third quarter of 2020, the Company received notices of default pertaining to three leases of divested restaurant properties in circumstances where the Company is contingently liable for the unpaid rent of the current operators.

The Company is in communication with these operators and has encouraged the operators to negotiate with their landlords to defer or resolve payments.

The Company believes losses above its recorded reserve are not probable at this time but will continue to closely monitor and assess this situation.

Segment Reporting

16 unchanged sentences

(1) Includes franchise locations.

Segment accounting policies are the same as those described in Note 2 - Summary of Significant Accounting Policies in the Company’s Annual Report on Form 10-K for the year ended December 29, 2019.

Revenues for all segments include only transactions with customers and exclude intersegment revenues.

Excluded from Income from operations for U.S.

and international are certain legal and corporate costs not directly related to the performance of the segments, most stock-based compensation expenses and certain bonus expenses.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(UNAUDITED) - Continued

During the thirteen and twenty-six weeks ended June 28, 2020, the Company recorded $ 2.4 million and $ 24.6 million, respectively, of pre-tax charges as a part of transformational initiatives implemented in connection with its previously announced review of strategic alternatives.

Segment accounting policies are the same as those described in Note 2 - Summary of Significant Accounting Policies in the Company’s Annual Report on Form 10-K for the year ended December 29, 2019.

Revenues for all segments include only transactions with customers and exclude intersegment revenues.

Excluded from Income (loss) from operations for U.S.

and international are certain legal and corporate costs not directly related to the performance of the segments, most stock-based compensation expenses and certain bonus expenses.

During the thirteen and thirty-nine weeks ended September 27, 2020, the Company recorded $ 4.2 million and $ 28.8 million, respectively, of pre-tax charges as a part of transformational initiatives implemented in connection with its previously announced review of strategic alternatives.

These costs were primarily recorded within General and administrative expense and Provision for impaired assets and restaurant closings and were not allocated to the Company’s segments since the Company’s CODM does not consider the impact of transformational initiatives when assessing segment performance.

The following table is a summary of Total revenue by segment, for the periods indicated:

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 28, 2020 JUNE 30, 2019 JUNE 28, 2020 JUNE 30, 2019

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 SEPTEMBER 27, 2020 SEPTEMBER 29, 2019

Total revenues

2 unchanged sentences

Total revenues $ 771,260 $ 967,144 $ 2,358,056 $ 3,117,205

The following table is a reconciliation of Segment (loss) income from operations to (Loss) income before (benefit) provision for income taxes, for the periods indicated:

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 28, 2020 JUNE 30, 2019 JUNE 28, 2020 JUNE 30, 2019

Segment (loss) income from operations

The following table is a reconciliation of Segment income (loss) from operations to (Loss) income before (benefit) provision for income taxes, for the periods indicated:

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 SEPTEMBER 27, 2020 SEPTEMBER 29, 2019

Segment income (loss) from operations

$ 29,574 $ 50,318 $ ( 21,968 ) $ 242,167

International ( 7,926 ) 10,550 ( 18,209 ) 31,179

Total segment (loss) income from operations ( 79,991 ) 85,723 ( 61,825 ) 212,478

Total segment income (loss) from operations 21,648 60,868 ( 40,177 ) 273,346

Unallocated corporate operating expense ( 35,903 ) ( 38,910 ) ( 127,558 ) ( 125,434 )

5 unchanged sentences

The following table is a summary of Depreciation and amortization expense by segment for the periods indicated:

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 28, 2020 JUNE 30, 2019 JUNE 28, 2020 JUNE 30, 2019

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 SEPTEMBER 27, 2020 SEPTEMBER 29, 2019

Depreciation and amortization

7 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements