What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-04-30 compared with 2020-10-30 · 284 added, 384 removed, 339 unchanged (66% of the section changed)

12 unchanged sentences

Important factors that could cause actual results to differ materially from statements made or suggested by forward-looking statements include, but are not limited to, the following:

(i) The severity, extent and duration of the COVID-19 pandemic, its impacts on our business and results of operations, financial condition and liquidity, including any adverse impact on our stock price and on the other factors listed below, and the responses of domestic and foreign federal, state and local governments to the pandemic;

(ii) Consumer reactions to public health and food safety issues;

(iii) Our ability to compete in the highly competitive restaurant industry with many well-established competitors and new market entrants;

(iv) Minimum wage increases and additional mandated employee benefits;

(i) Consumer reactions to public health and food safety issues;

(ii) The severity, extent and duration of the COVID-19 pandemic, its impacts on our business and results of operations, financial condition and liquidity, including any adverse impact on our stock price and on the other factors listed below, and the responses of domestic and foreign federal, state and local governments to the pandemic;

(iii) Minimum wage increases and additional mandated employee benefits;

(iv) Our ability to compete in the highly competitive restaurant industry with many well-established competitors and new market entrants;

(v) Economic conditions and their effects on consumer confidence and discretionary spending, consumer traffic, the cost and availability of credit and interest rates;

(vi) Our ability to protect our information technology systems from interruption or security breach, including cyber security threats, and to protect consumer data and personal employee information;

(vi) Our ability to recruit and retain high-quality leadership, restaurant-level management and team members;

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

(vii) Fluctuations in the price and availability of commodities;

(viii) Our ability to comply with governmental laws and regulations, the costs of compliance with such laws and regulations and the effects of changes to applicable laws and regulations, including tax laws and unanticipated liabilities;

(ix) Our ability to effectively respond to changes in patterns of consumer traffic, consumer tastes and dietary habits;

(x) Our ability to implement our remodeling, relocation and expansion plans due to uncertainty in locating and acquiring attractive sites on acceptable terms, obtaining required permits and approvals, recruiting and training necessary personnel, obtaining adequate financing and estimating the performance of newly opened, remodeled or relocated restaurants;

(vii) Our ability to preserve and grow the reputation and value of our brands, particularly in light of changes in consumer engagement with social media platforms and limited control with respect to the operations of our franchisees;

(viii) Our ability to protect our information technology systems from interruption or security breach, including cyber security threats, and to protect consumer data and personal employee information;

(ix) Fluctuations in the price and availability of commodities;

(x) Dependence on a limited number of suppliers and distributors to meet our beef and other major product supply needs;

(xi) The effects of international economic, political and social conditions and legal systems on our foreign operations and on foreign currency exchange rates;

(xii) Our ability to preserve and grow the reputation and value of our brands, particularly in light of changes in consumer engagement with social media platforms;

(xiii) Any impairment in the carrying value of our goodwill or other intangible or long-lived assets and its effect on our financial condition and results of operations;

(xiv) Seasonal and periodic fluctuations in our results and the effects of significant adverse weather conditions and other disasters or unforeseen events;

(xv) The effects of our substantial leverage and restrictive covenants in our various credit facilities on our ability to raise additional capital to fund our operations, to make capital expenditures to invest in new or renovate restaurants and to react to changes in the economy or our industry, and our exposure to interest rate risk in connection with our variable-rate debt;

(xvi) Such other factors as discussed in Part I, Item IA.

Risk Factors of our Annual Report on Form 10-K for the year ended December 29, 2019 and Part I, Item IA.

Risk Factors in this Report.

(xii) Our ability to comply with governmental laws and regulations, the costs of compliance with such laws and regulations and the effects of changes to applicable laws and regulations, including tax laws and unanticipated liabilities, and the impact of litigation;

(xiii) Our ability to effectively respond to changes in patterns of consumer traffic, consumer tastes and dietary habits, including by maintaining relationships with third party delivery apps and services;

(xiv) Our ability to implement our remodeling, relocation and expansion plans due to uncertainty in locating and acquiring attractive sites on acceptable terms, obtaining required permits and approvals, recruiting and training necessary personnel, obtaining adequate financing and estimating the performance of newly opened, remodeled or relocated restaurants;

(xv) Seasonal and periodic fluctuations in our results and the effects of significant adverse weather conditions and other disasters or unforeseen events;

(xvi) The effects of our substantial leverage and restrictive covenants in our various credit facilities on our ability to raise additional capital to fund our operations, to make capital expenditures to invest in new or renovate restaurants and to react to changes in the economy or our industry, and our exposure to interest rate risk in connection with our variable-rate debt;

(xvii) Any impairment in the carrying value of our goodwill or other intangible or long-lived assets and its effect on our financial condition and results of operations;

(xviii) Such other factors as discussed in Part I, Item IA.

Risk Factors of our Annual Report on Form 10-K for the year ended December 27, 2020.

In light of these risks and uncertainties, we caution you not to place undue reliance on these forward-looking statements.

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We are one of the largest casual dining restaurant companies in the world with a portfolio of leading, differentiated restaurant concepts.

As of September 27, 2020, we owned and operated 1,152 restaurants and franchised 312 restaurants across 47 states, Puerto Rico, Guam and 20 countries.

As of March 28, 2021, we owned and operated 1,160 restaurants and franchised 316 restaurants across 47 states, Guam and 20 countries.

We have four founder-inspired concepts:

Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar.

Executive Summary

Our financial results for the thirteen weeks ended September 27, 2020 (“third quarter of 2020”) include the following:

• A decrease in Total revenues of 20.3% in the third quarter of 2020, as compared to the third quarter of 2019, primarily due to:

(i) significantly lower comparable restaurant sales and franchise revenues principally attributable to the COVID-19 pandemic, (ii) the net impact of restaurant closures and openings and (iii) the effect of foreign currency translation of the Brazil Real relative to the U.S.

• Loss from operations of $(14.3) million in the third quarter of 2020, as compared to income from operations of $22.0 million in the third quarter of 2019, was primarily due to:

(i) significantly lower comparable restaurant sales and costs incurred in connection with the COVID-19 pandemic, including incremental delivery related costs, and (ii) certain costs incurred in connection with our transformation initiatives.

These decreases are partially offset by:

(i) reduced advertising, utilities and operating expenses, (ii) a reduction in prep labor hours, offset by higher labor costs, and (iii) cost savings from waste reduction initiatives.

Recent Developments - COVID-19

In response to the COVID-19 pandemic, governmental authorities took dramatic action in an effort to slow the spread of the disease.

Along with many other restaurant businesses across the country, we temporarily limited our services in the U.S.

to carry-out and delivery only beginning March 20, 2020.

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

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

The temporary closure of our dining rooms and the limitations on seating capacity in our reopened dining rooms has resulted in significantly reduced traffic in our restaurants.

It remains uncertain whether customer traffic will return to levels prior to the outbreak of COVID-19.

Even if consumer demand fully recovers, governmental restrictions may continue to limit the capacity of our dining rooms or services we may provide in the future.

As a result, our results for the foreseeable future may be significantly adversely impacted.

In response to the pandemic, we have tightly managed expenses while taking steps to secure our liquidity position .

See the subsection below e ntitled “ Liquidity and Capital Resources ” for furthe r details.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Financial Highlights

Our financial highlights for the thirteen weeks ended March 28, 2021 (“first quarter of 2021”) include the following:

combined and Outback Steakhouse comparable restaurant sales of 3.3% and 4.1%, respectively, relative to the first quarter of 2020 and (7.3)% and (5.8)%, respectively, relative to the first quarter of 2019;

• Decrease in Total revenues of 2.1% in the first quarter of 2021, as compared to the first quarter of 2020;

• Restaurant-level operating margin of 18.8% for the first quarter of 2021, as compared to 12.1% for the first quarter of 2020;

• Decrease in General and administrative expense of $27.6 million, as compared to the first quarter of 2020;

• Income from operations of $91.0 million in the first quarter of 2021, as compared to loss from operations of $41.6 million in the first quarter of 2020;

• Diluted earnings (loss) per share attributable to common stockholders of $0.63 in the first quarter of 2021 as compared to $(0.44) in the first quarter of 2020.

Key Performance Indicators

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• System-wide sales —total restaurant sales volume for all Company-owned and franchise restaurants, regardless of ownership, to interpret the overall health of our brands;

• Restaurant-level operating margin, (Loss) income from operations, Net (loss) income and Diluted (loss) earnings per share — financial measures utilized to evaluate our operating performance.

• Restaurant-level operating margin, Income (loss) from operations, Net income (loss) and Diluted earnings (loss) per share — financial measures utilized to evaluate our operating performance.

Restaurant-level operating margin is widely regarded in the industry as a useful metric to evaluate restaurant level operating efficiency and performance of ongoing restaurant-level operations, and we use it for these purposes, overall and particularly within our two segments.

Our restaurant-level operating margin is expressed as the percentage of our Restaurant sales that Food and beverage costs, Labor and other related and Other restaurant operating (including advertising expenses) represent, in each case as such items are reflected in our Consolidated Statements of Operations.

The following categories of our revenue and operating expenses are not included in restaurant-level operating margin because we do not consider them reflective of operating performance at the restaurant-level within a period:

The following

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

categories of our revenue and operating expenses are not included in restaurant-level operating margin because we do not consider them reflective of operating performance at the restaurant-level within a period:

(i) Franchise and other revenues which are earned primarily from franchise royalties and other non-food and beverage revenue streams, such as rental and sublease income.

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(iv) Asset impairment charges and restaurant closing costs which are not reflective of ongoing restaurant performance in a period.

Restaurant-level operating margin excludes various expenses, as discussed above, that are essential to support the operations of our restaurants and may materially impact our Consolidated Statement of Operations.

As a result, restaurant-level operating margin is not indicative of our consolidated results of operations and is presented exclusively as a supplement to, and not a substitute for, Net (loss) income or (Loss) income from operations.

In addition, our presentation of restaurant-level operating margin may not be comparable to similarly titled measures used by other companies in our industry;

• Adjusted restaurant-level operating margin, Adjusted (loss) income from operations, Adjusted net (loss) income and Adjusted diluted (loss) earnings per share —non-GAAP financial measures utilized to evaluate our operating performance.

• Adjusted restaurant-level operating margin, Adjusted income from operations, Adjusted net income and Adjusted diluted earnings per share —non-GAAP financial measures utilized to evaluate our operating performance.

We believe that our use of non-GAAP financial measures permits investors to assess the operating performance of our business relative to our performance based on U.S.

GAAP results and relative to other companies within the restaurant industry by isolating the effects of certain items that may vary from period to period without correlation to core operating performance or that vary widely among similar companies.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

However, our inclusion of these adjusted measures should not be construed as an indication that our future results will be unaffected by unusual or infrequent items or that the items for which we have made adjustments are unusual or infrequent or will not recur.

1 unchanged sentence

• Customer satisfaction scores —measurement of our customers’ experiences in a variety of key areas.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Selected Operating Data

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Number of restaurants (at end of the period):

SEPTEMBER 27, 2020 SEPTEMBER 29, 2019

MARCH 28, 2021 MARCH 29, 2020

Outback Steakhouse

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Total 187 197

Fleming’s Prime Steakhouse and Wine Bar

Fleming’s Prime Steakhouse & Wine Bar

Company-owned 64 67

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____________________

(1) The restaurant counts for Brazil are reported as of August 31, 2020 and 2019, respectively, to correspond with the balance sheet dates of this subsidiary.

(2) As of September 27, 2020, we had 14 international “dark kitchen” locations that offer delivery and carry-out only.

One of these locations was included within Company-owned Other and 13 were included in Franchised Outback Steakhouse - South Korea.

(3) Includes three and two fast-casual Aussie Grill locations as of September 27, 2020 and September 29, 2019, respectively.

Company-owned and International Franchised Other each include three and two fast-casual Aussie Grill locations as of March 28, 2021 and March 29, 2020, respectively.

International Company-owned Other includes two and one fast-casual Aussie Grill locations as of March 28, 2021 and March 29, 2020, respectively.

(2) The restaurant counts for Brazil are reported as of February 28, 2021 and February 29, 2020, respectively, to correspond with the balance sheet dates of this subsidiary.

(3) As of March 28, 2021, we had 25 international dark kitchens that offer delivery only included in Franchised Outback Steakhouse - South Korea.

In addition, we had one international dark kitchen included within Company-owned Other as of both periods presented.

BLOOMIN’ BRANDS, INC.

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Results of Operations

The following table sets forth, for the periods indicated, the percentages of certain items in our Consolidated Statements of Operations in relation to Total revenues or Restaurant sales, as indicated:

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

The following table sets forth the percentages of certain items in our Consolidated Statements of Operations in relation to Total revenues or Restaurant sales, for the periods indicated:

THIRTEEN WEEKS ENDED

MARCH 28, 2021 MARCH 29, 2020

Restaurant sales 99.2 % 98.8 %

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Total costs and expenses 90.8 104.1

(Loss) income from operations (1.8) 2.3 (7.1) 4.7

Loss on modification of debt — — (*) —

Income (loss) from operations 9.2 (4.1)

Other income (expense), net * (0.1)

Interest expense, net (1.5) (1.2)

(Loss) income before (benefit) provision for income taxes (4.2) 0.9 (9.1) 3.6

(Benefit) provision for income taxes (1.9) (0.1) (3.0) 0.2

Net (loss) income (2.3) 1.0 (6.1) 3.4

net (loss) income attributable to noncontrolling interests (*) * (*) 0.1

Net (loss) income attributable to Bloomin’ Brands

Income (loss) before provision (benefit) for income taxes 7.7 (5.4)

Provision (benefit) for income taxes 0.6 (2.0)

Net income (loss) 7.1 (3.4)

net income attributable to noncontrolling interests 0.1 *

Net income (loss) attributable to Bloomin’ Brands

7.0 % (3.4) %

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RESTAURANT SALES

Following is a summary of the change in Restaurant sales for the periods indicated:

(dollars in millions) THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

For the periods ended September 29, 2019 $ 951.8 $ 3,069.1

Comparable restaurant sales (157.6) (661.3)

Following is a summary of the change in Restaurant sales for the period indicated:

(dollars in millions) THIRTEEN WEEKS ENDED

For the period ended March 29, 2020 $ 996.2

Restaurant closures (18.6)

Effect of foreign currency translation (17.0)

Divestiture of restaurants through refranchising transactions — (11.2)

Restaurant openings 12.6

For the periods ended September 27, 2020 $ 766.5 $ 2,339.0

The decrease in Restaurant sales during the thirteen weeks ended September 27, 2020 was primarily due to:

(i) significantly lower comparable restaurant sales principally attributable to the COVID-19 pandemic, (ii) the closure

Comparable restaurant sales 6.3

For the period ended March 28, 2021 $ 979.5

The decrease in Restaurant sales during the thirteen weeks ended March 28, 2021 was primarily due to lower international comparable restaurant sales, the closure of 37 restaurants since December 29, 2019 and the effect of foreign currency translation of the Brazilian Real relative to the U.S.

The decrease in Restaurant sales was partially offset by higher U.S.

comparable restaurant sales and the opening of 30 new restaurants not included in our comparable restaurant sales base.

BLOOMIN’ BRANDS, INC.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

of 43 restaurants since June 30, 2019 and (iii) the effect of foreign currency translation of the Brazilian Real relative to the U.S.

The decrease in Restaurant sales during the thirty-nine weeks ended September 27, 2020 was primarily due to:

(i) significantly lower comparable restaurant sales principally attributable to the COVID-19 pandemic, (ii) the closure of 51 restaurants since December 30, 2018, (iii) the effect of foreign currency translation of the Brazilian Real relative to the U.S.

dollar and (iv) domestic refranchising.

The decrease in Restaurant sales was partially offset by the opening of 31 new restaurants not included in our comparable restaurant sales base.

Average Restaurant Unit Volumes and Operating Weeks

Following is a summary of the average restaurant unit volumes and operating weeks, for the periods indicated:

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

THIRTEEN WEEKS ENDED

MARCH 28, 2021 MARCH 29, 2020

Average restaurant unit volumes (weekly):

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____________________

(1) Translated at average exchange rates of 5.34 and 3.88 for the thirteen weeks ended September 27, 2020 and September 29, 2019, respectively, and 4.60 and 3.86 for the thirty-nine weeks ended September 27, 2020 and September 29, 2019, respectively.

(1) Translated at average exchange rates of 5.30 and 4.19 for the thirteen weeks ended March 28, 2021 and March 29, 2020, respectively.

BLOOMIN’ BRANDS, INC.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Comparable Restaurant Sales, Traffic and Average Check Per Person Increases (Decreases)

Following is a summary of comparable restaurant sales, traffic and average check per person increases (decreases), for the periods indicated:

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

Comparable Restaurant Sales, Traffic and Average Check Per Person (Decreases) Increases

Following is a summary of comparable restaurant sales, traffic and average check per person (decreases) increases, for the periods indicated:

THIRTEEN WEEKS ENDED

MARCH 28, 2021 MARCH 29, 2020

Comparable to 2019 (1) Comparable to 2020 Comparable to 2019

Year over year percentage change:

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____________________

(1) Represents comparable restaurant sales, traffic and average check per person (decreases) increases relative to fiscal year 2019 for improved comparability due to the impact of COVID-19 on fiscal year 2020 restaurant sales.

(2) Relocated restaurants closed more than 60 days are excluded from comparable restaurant sales until at least 18 months after reopening.

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Includes trading day impact from calendar period reporting.

(3) In Q2 2020, Bonefish Grill replaced guest count with entrée count to measure restaurant traffic.

Bonefish Grill and Combined U.S.

traffic for the thirty-nine weeks ended September 27, 2020 were calculated using the entrée count methodology for Bonefish Grill as if the new methodology was in effect at the start of the fiscal year, which would have increased traffic for Bonefish Grill and Combined U.S.

for the thirteen weekend ended March 29, 2020 by 3.1% and 0.5%, respectively.

(4) Outback Steakhouse Brazil results are reported on a one-month lag and are presented on a calendar basis.

Restaurant sales for Brazil during the first quarter of 2020 (through February 29, 2020) were not materially impacted by the COVID-19 pandemic.

(5) Average check per person includes the impact of menu pricing changes, product mix and discounts.

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Franchise and other revenues

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

THIRTEEN WEEKS ENDED

(dollars in millions) MARCH 28, 2021 MARCH 29, 2020

Franchise revenues (1) $ 6.8 $ 9.5

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(1) Represents franchise royalties, advertising fees and initial franchise fees.

Franchise revenues declined during the thirteen and thirty-nine weeks ended September 27, 2020 primarily due to lower franchise sales and deferral of certain royalties and advertising fees.

Franchise revenues declined during the thirteen weeks ended March 28, 2021 primarily due to lower U.S.

franchise sales and a reduction in the royalty and advertising fee percentages resulting from our December 2020 resolution agreement with Out West, our largest U.S.

COSTS AND EXPENSES

Food and beverage costs

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 Change SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 Change

THIRTEEN WEEKS ENDED

(dollars in millions) MARCH 28, 2021 MARCH 29, 2020 Change

Food and beverage costs $ 291.9 $ 319.7

% of Restaurant sales 29.8 % 32.1 % (2.3) %

Food and beverage costs decreased as a percentage of Restaurant sales during the thirteen weeks ended September 27, 2020 as compared to the thirteen weeks ended September 29, 2019 primarily due to 0.9% from increases in average check per person and 0.8% from cost savings attributable to waste reduction initiatives.

Food and beverage costs decreased as a percentage of Restaurant sales during the thirty-nine weeks ended September 27, 2020 as compared to the thirty-nine weeks ended September 29, 2019 primarily due to 0.4% from increases in average check per person and 0.3% from cost savings attributable to waste reduction initiatives, partially offset by an increase as a percentage of Restaurant sales of 0.3% from commodity inflation and 0.2% related to a reduction in vendor rebates.

Food and beverage costs decreased as a percentage of Restaurant sales during the thirteen weeks ended March 28, 2021 as compared to the thirteen weeks ended March 29, 2020 primarily due to:

(i) 0.9% from increases in average check per person, (ii) 0.9% from cost savings attributable to waste reduction initiatives and (iii) 0.6% from inventory obsolescence and spoilage costs during 2020 associated with the COVID-19 pandemic.

Labor and other related expenses

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 Change SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 Change

THIRTEEN WEEKS ENDED

(dollars in millions) MARCH 28, 2021 MARCH 29, 2020 Change

Labor and other related $ 274.6 $ 309.3

% of Restaurant sales 28.0 % 31.0 % (3.0) %

Labor and other related expenses increased as a percentage of Restaurant sales during the thirteen weeks ended September 27, 2020 as compared to the thirteen weeks ended September 29, 2019 primarily due to:

(i) 2.6% from decreased restaurant sales, (ii) 0.6% from higher labor costs and (iii) 0.3% from employee benefits in response to COVID-19.

These increases were partially offset by a decrease as a percentage of Restaurant sales of 1.8% from lower prep labor hours.

Labor and other related expenses increased as a percentage of Restaurant sales during the thirty-nine weeks ended September 27, 2020 as compared to the thirty-nine weeks ended September 29, 2019 primarily due to:

(i) 3.1% from decreased restaurant sales, (ii) 1.2% from relief pay primarily for hourly employees impacted by the closure of dining rooms due to COVID-19, offset by employee retention tax credits, and (iii) 0.5% from higher labor costs.

These increases were partially offset by a decrease as a percentage of Restaurant sales of 1.7% from lower prep labor hours.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Labor and other related expenses decreased as a percentage of Restaurant sales during the thirteen weeks ended March 28, 2021 as compared to the thirteen weeks ended March 29, 2020 primarily due to 1.8% from lower prep labor hours and 1.5% from decreased relief pay due to the re-opening of our restaurant dining rooms.

These decreases were partially offset by an increase as a percentage of Restaurant sales of 0.3% from wage rate increases.

Other restaurant operating expenses

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 Change SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 Change

THIRTEEN WEEKS ENDED

(dollars in millions) MARCH 28, 2021 MARCH 29, 2020 Change

Other restaurant operating $ 229.3 $ 246.6

% of Restaurant sales 23.4 % 24.7 % (1.3) %

Other restaurant operating expenses increased as a percentage of Restaurant sales during the thirteen weeks ended September 27, 2020 as compared to the thirteen weeks ended September 29, 2019 primarily due to:

(i) the impact of dining room seating capacity restrictions as a result of the COVID-19 pandemic including, 2.5% from decreased restaurant sales and 1.9% from incremental delivery related costs, (ii) 0.5% from gains on the sale of certain U.S.

surplus properties in 2019 and (iii) 0.2% from menu printing costs.

These increases were partially offset by a decrease as a percentage of Restaurant sales of 3.3% from reduced advertising, utilities and operating expenses.

Other restaurant operating expenses increased as a percentage of Restaurant sales during the thirty-nine weeks ended September 27, 2020 as compared to the thirty-nine weeks ended September 29, 2019 primarily due to the impact of shifting to an off-premise only operational model in March 2020 and dining room seating capacity restrictions as a result of the COVID-19 pandemic including, 3.0% from decreased restaurant sales and 1.9% from incremental delivery related costs.

These increases were partially offset by a decrease as a percentage of Restaurant sales of 1.8% from reduced advertising, utilities and operating expenses.

Depreciation and amortization

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 Change SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 Change

Depreciation and amortization $ 43.4 $ 47.9 $ (4.5) $ 137.5 $ 147.2 $ (9.7)

Depreciation and amortization expense decreased during the periods presented primarily due to impairment and the effect of foreign currency translation.

Other restaurant operating expenses decreased as a percentage of Restaurant sales during the thirteen weeks ended March 28, 2021 as compared to the thirteen weeks ended March 29, 2020 primarily due to 2.1% from lower advertising expense and 0.7% from reduced operating and utilities expenses.

This decrease was partially offset by an increase as a percentage of Restaurant sales of 1.2% from incremental delivery related costs.

BLOOMIN’ BRANDS, INC.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Depreciation and amortization

THIRTEEN WEEKS ENDED

(dollars in millions) MARCH 28, 2021 MARCH 29, 2020 Change

Depreciation and amortization $ 41.2 $ 48.3 $ (7.1)

Depreciation and amortization expense decreased during the periods presented primarily due to impairment, decreased capital expenditures and the effect of foreign currency translation.

General and administrative

General and administrative expense includes salaries and benefits, management incentive programs, related payroll tax and benefits, other employee-related costs and professional services.

Following is a summary of the change in General and administrative expense for the periods indicated:

(dollars in millions) THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

For the periods ended September 29, 2019 $ 66.6 $ 209.1

Compensation, benefits and payroll tax (3.6) (9.6)

Legal and professional fees (1.7) (5.7)

Foreign currency exchange (1.3) (3.0)

Following is a summary of the change in General and administrative expense for the period indicated:

(dollars in millions) THIRTEEN WEEKS ENDED

For the period ended March 29, 2020 $ 84.8

Severance (8.5)

Travel and entertainment (1) (0.5) (8.0)

Expected credit losses and contingent lease liabilities (7.6)

Transformational costs (5.3)

Deferred compensation 0.2 (3.3)

Other (2.6) (2.3)

For the periods ended September 27, 2020 $ 57.4 $ 197.7

_________________

(1) Includes managing partner conference costs.

(2) Primarily consists of consulting fees incurred in connection with our transformation initiatives.

Travel and entertainment (3.3)

Compensation, benefits and payroll tax (2.5)

For the period ended March 28, 2021 $ 57.2

Provision for impaired assets and restaurant closings

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 Change SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 Change

THIRTEEN WEEKS ENDED

(dollars in millions) MARCH 28, 2021 MARCH 29, 2020 Change

Provision for impaired assets and restaurant closings $ 2.2 $ 41.3 $ (39.1)

During the thirty-nine weeks ended September 27, 2020, we recognized asset impairment and closure charges of $56.4 million and $3.6 million within the U.S.

During the thirteen weeks ended March 29, 2020, we recognized asset impairment and closure charges of $31.7 million and $3.3 million within the U.S.

and international segments, respectively, primarily related to the COVID-19 pandemic.

Included in the amount for the thirty-nine weeks ended September 27, 2020 were pre-tax asset impairments and closure costs of $20.9 million in connection with the closure of 22 restaurants and from the update of certain cash flow assumptions, including lease renewal considerations.

We also recognized asset impairment charges during the thirty-nine weeks ended September 27, 2020 of $6.2 million which were not allocated to our operating segments, primarily related to transformational initiatives.

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.

See Note 4 - Impairments, Exit Costs and Disposals of the Notes to Consolidated Financial Statements for further information.

We also recognized asset impairment charges of $6.3 million primarily related to transformational initiatives during the thirteen weeks ended March 29, 2020, which were not allocated to our operating segments.

Income (loss) from operations

THIRTEEN WEEKS ENDED

(dollars in millions) MARCH 28, 2021 MARCH 29, 2020 Change

Income (loss) from operations $ 91.0 $ (41.6) $ 132.6

% of Total revenues 9.2 % (4.1) % 13.3 %

Income from operations generated during the thirteen weeks ended March 28, 2021, as compared to Loss from operations during the thirteen weeks ended March 29, 2020 was primarily due to:

(i) the impact of the COVID-19 pandemic during 2020, including asset impairment charges and relief pay, (ii) the impact of restructuring and transformational initiatives during 2020, including severance and impairment charges, (iii) lower advertising expense, (iv) a reduction in prep labor hours, (v) cost savings from our waste reduction initiatives and (vi) reduced operating and utilities expenses.

These increases were partially offset by incremental delivery related costs.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

(Loss) income from operations

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 Change SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 Change

(Loss) income from operations $ (14.3) $ 22.0 $ (36.3) $ (167.7) $ 147.9 $ (315.6)

% of Total revenues (1.8) % 2.3 % (4.1) % (7.1) % 4.7 % (11.8) %

Loss from operations generated during the thirteen weeks ended September 27, 2020, as compared to income from operations during the thirteen weeks ended September 29, 2019 was primarily due to:

These losses were partially offset by:

(i) reduced advertising, utilities and operating expenses, (ii) a reduction in prep labor hours, offset by higher labor costs, and (iii) cost savings from waste reduction initiatives.

Loss from operations generated during the thirty-nine weeks ended September 27, 2020, as compared to income from operations during the thirty-nine weeks ended September 29, 2019 was primarily d ue to:

(i) significantly lower comparable restaurant sales and costs incurred in connection with the COVID-19 pandemic, including asset impairment charges, incremental delivery related costs and relief pay (net of tax credits), and (ii) commodity inflation.

These losses were partially offset by:

(i) reduced advertising, utilities and operating expenses, (ii) a reduction in prep labor hours, offset by higher labor costs, and (iii) cost savings from waste reduction initiatives.

Interest expense, net

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 Change SEPTEMBER 27, 2020 SEPTEMBER 29, 2019 Change

THIRTEEN WEEKS ENDED

(dollars in millions) MARCH 28, 2021 MARCH 29, 2020 Change

Interest expense, net $ 14.6 $ 11.7 $ 2.9

The increase in Interest expense, net for the thirteen weeks ended September 27, 2020 as compared to the thirteen weeks ended September 29, 2019 was primarily due to interest expense from our convertible senior notes issued in May 2020, partially offset by lower outstanding revolving credit facility borrowings and lower interest rates on our unhedged variable rate debt balances.

The increase in Interest expense, net for the thirty-nine weeks ended September 27, 2020 as compared to the thirty-nine weeks ended September 29, 2019 was primarily due to interest expense from our convertible senior notes issued in May 2020 and additional draws on our revolving credit facility, partially offset by lower interest rates on our unhedged variable rate debt balances.

(Benefit) provision for income taxes

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

The increase in Interest expense, net for the thirteen weeks ended March 28, 2021 as compared to the thirteen weeks ended March 29, 2020 was primarily due to interest expense from our 2025 Notes issued in May 2020, partially offset by lower revolver borrowings and lower interest rates on our unhedged variable rate debt.

Provision (benefit) for income taxes

THIRTEEN WEEKS ENDED

MARCH 28, 2021 MARCH 29, 2020 Change

Income (loss) before provision (benefit) for income taxes $ 76.4 $ (54.1) $ 130.5

Provision (benefit) for income taxes $ 6.6 $ (19.7) $ 26.3

Effective income tax rate 8.6 % 36.4 % (27.8) %

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.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

The effective income tax rate for the thirteen weeks ended March 28, 2021 decreased by 27.8 percentage points as compared to the thirteen weeks ended March 29, 2020.

The decrease was primarily due to the benefit of FICA tax credits on certain employees’ tips reducing the effective tax rate in 2021 as a result of forecasted pre-tax book income as compared to increasing the effective tax rate in 2020 as a result of forecasted pre-tax book loss.

SEGMENT PERFORMANCE

17 unchanged sentences

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

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

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.

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

During the thirteen weeks ended March 29, 2020, we recorded $22.2 million of pre-tax charges as a part of transformational initiatives.

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

Refer to Note 21 - Segment Reporting of the Notes to Consolidated Financial Statements for a reconciliation of segment income (loss) from operations to the consolidated operating results.

Restaurant-level operating margin is widely regarded in the industry as a useful metric to evaluate restaurant-level operating efficiency and performance of ongoing restaurant-level operations, and we use it for these purposes, overall and particularly within our two segments.

See the Overview-Key Performance Indicators section of Management’s Discussion and Analysis for additional details regarding the calculation of restaurant-level operating margin.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

Refer to Note 19 - Segment Reporting of the Notes to Consolidated Financial Statements for a reconciliation of segment income from operations to the consolidated operating results.

See the Overview-Key Performance Indicators and Non-GAAP Financial Measures sections of Management’s Discussion and Analysis for additional details regarding the calculation of restaurant-level operating margin.

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 28, 2021 MARCH 29, 2020

Restaurant sales $ 900,059 $ 884,889

2 unchanged sentences

Restaurant-level operating margin 19.2 % 11.5 %

Income (loss) from operations $ 29,574 $ 50,318 $ (21,968) $ 242,167

Operating income (loss) margin 4.1 % 5.9 % (1.0) % 8.7 %

Income from operations $ 121,735 $ 11,379

Operating income margin 13.5 % 1.3 %

Restaurant sales

Following is a summary of the change in U.S.

segment Restaurant sales for the periods indicated:

(dollars in millions) THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

For the periods ended September 29, 2019 $ 835.8 $ 2,737.2

segment Restaurant sales for the period indicated:

(dollars in millions) THIRTEEN WEEKS ENDED

For the period ended March 29, 2020 $ 884.9

Comparable restaurant sales 28.2

Restaurant closures (16.9) (39.8)

Divestiture of restaurants through refranchising transactions — (11.2)

Restaurant openings 5.2

For the periods ended September 27, 2020 $ 719.4 $ 2,141.1

The decrease in U.S.

Restaurant sales during the thirteen weeks ended September 27, 2020 was primarily due to significantly lower comparable restaurant sales principally attributable to the COVID-19 pandemic and the closure of 34 restaurants since June 30, 2019.

The decrease in U.S.

Restaurant sales during the thirty-nine weeks ended September 27, 2020 was primarily due to:

(i) significantly lower comparable restaurant sales principally attributable to the COVID-19 pandemic, (ii) the closure of 42 restaurants since December 30, 2018 and (iii) the refranchising of certain Company-owned restaurants.

The decrease in U.S.

Restaurant sales was partially offset by the opening of nine new restaurants not included in our comparable restaurant sales base.

Income (loss) from operations

The decrease in U.S.

income from operations generated during the thirteen weeks ended September 27, 2020 as compared to the thirteen weeks ended September 29, 2019, was primarily due to significantly lower comparable restaurant sales and costs incurred in connection with the COVID-19 pandemic, including incremental delivery related costs.

These losses were partially offset by:

(i) reduced advertising, operating and utilities expenses, (ii) a reduction in prep labor hours, offset by higher labor costs, and (iii) cost savings from waste reduction initiatives.

loss from operations generated during the thirty-nine weeks ended September 27, 2020, as compared to income from operations during the thirty-nine weeks ended September 29, 2019, was primarily due to:

These losses were partially offset by:

(i) reduced advertising, utilities and operating expenses, (ii) a reduction in prep labor hours, offset by higher labor costs, and (iii) cost savings from waste reduction initiatives.

Restaurant closures (18.2)

For the period ended March 28, 2021 $ 900.1

The increase in U.S.

Restaurant sales during the thirteen weeks ended March 28, 2021 was primarily due to higher comparable restaurant sales principally attributable to the impact of the COVID-19 pandemic on fiscal year 2020 U.S.

Restaurant sales and the opening of nine new restaurants not included in our comparable restaurant sales base.

The increase in U.S.

Restaurant sales was partially offset by the closure of 36 restaurants since December 29, 2019.

Income from operations

The increase in U.S.

Income from operations generated during the thirteen weeks ended March 28, 2021, as compared to the thirteen weeks ended March 29, 2020, was primarily due to:

(i) the impact of the COVID-19 pandemic during 2020, including lower comparable restaurant sales, asset impairment charges and relief pay, (ii) lower advertising expense, (iii) a reduction in prep labor hours and (iv) cost savings from our waste reduction initiatives.

These increases were partially offset by incremental delivery related costs.

BLOOMIN’ BRANDS, INC.

2 unchanged sentences

International Segment

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 28, 2021 MARCH 29, 2020

Restaurant sales $ 79,392 $ 111,348

2 unchanged sentences

Restaurant-level operating margin 14.4 % 18.5 %

(Loss) income from operations $ (7,926) $ 10,550 $ (18,209) $ 31,179

Operating (loss) income margin (16.0) % 8.9 % (8.9) % 9.2 %

Income from operations $ 3,537 $ 6,787

Operating income margin 4.3 % 6.0 %

Restaurant sales

Following is a summary of the change in international segment Restaurant sales for the periods indicated:

(dollars in millions) THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

For the periods ended September 29, 2019 $ 116.0 $ 331.9

Following is a summary of the change in international segment Restaurant sales for the period indicated:

(dollars in millions) THIRTEEN WEEKS ENDED

For the period ended March 29, 2020 $ 111.3

Comparable restaurant sales (21.9)

2 unchanged sentences

Restaurant openings 7.4

For the periods ended September 27, 2020 $ 47.1 $ 197.9

The decrease in international Restaurant sales during the thirteen weeks ended September 27, 2020 was primarily due to significantly lower comparable restaurant sales principally attributable to the COVID-19 pandemic and the effect of foreign currency translation of the Brazilian Real relative to the U.S.

The decrease in international Restaurant sales during the thirty-nine weeks ended September 27, 2020 was primarily due to significantly lower comparable restaurant sales principally attributable to the COVID-19 pandemic and the effect of foreign currency translation of the Brazilian Real relative to the U.S.

The decrease in Restaurant sales was partially offset by the opening of 22 new restaurants not included in our comparable restaurant sales base.

(Loss) income from operations

International loss from operations generated during the thirteen weeks ended September 27, 2020, as compared to income from operations during the thirteen weeks ended September 29, 2019, was primarily due to:

(i) significantly lower comparable restaurant sales and costs incurred in connection with the COVID-19 pandemic, including incremental delivery related costs, and (ii) commodity inflation.

These decreases were partially offset by reduced utilities, operating and advertising expenses and lower labor costs.

International loss from operations generated during the thirty-nine weeks ended September 27, 2020, as compared to income from operations during the thirty-nine weeks ended September 29, 2019, was primarily due to:

(i) significantly lower comparable restaurant sales and costs incurred in connection with the COVID-19 pandemic, including incremental delivery related costs and inventory obsolescence, and (ii) commodity inflation.

These decreases were partially offset by reduced utilities, operating and advertising expenses and lower labor costs.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

For the period ended March 28, 2021 $ 79.4

Outback Steakhouse Brazil results are reported on a one-month lag and are presented on a calendar basis.

Restaurant sales for Brazil during the first fiscal quarter of 2020 (through February 29, 2020) were not materially impacted by the COVID-19 pandemic.

The decrease in international Restaurant sales during the thirteen weeks ended March 28, 2021 was primarily due to lower comparable restaurant sales principally attributable to the impact of the COVID-19 pandemic and the effect of foreign currency translation of the Brazilian Real relative to the U.S.

The decrease in international Restaurant sales was partially offset by the opening of 21 new restaurants not included in our comparable restaurant sales base.

Income from operations

The decrease in international Income from operations generated during the thirteen weeks ended March 28, 2021, as compared to the thirteen weeks ended March 29, 2020, was primarily due to:

(i) lower comparable restaurant sales and costs incurred in connection with the COVID-19 pandemic, including incremental delivery related costs, and (ii) commodity inflation.

These decreases were partially offset by:

(i) lower labor costs, (ii) reduced operating, rent and advertising expenses and (iii) lower impairment and restaurant closure costs.

Non-GAAP Financial Measures

2 unchanged sentences

System-wide sales comprise sales of Company-owned and franchised restaurants.

For a summary of sales of Company-owned restaurants, refer to Note 3 - Revenue Recognition of the Notes to Consolidated Financial Statements.

The following table provides a summary of sales of franchised restaurants, which are not included in our consolidated financial results.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

summary of sales of Company-owned restaurants, refer to Note 3 - Revenue Recognition of the Notes to Consolidated Financial Statements.

The following table provides a summary of sales of franchised restaurants for the periods indicated, which are not included in our consolidated financial results.

Franchise sales within this table do not represent our sales and are presented only as an indicator of changes in the restaurant system, which management believes is important information regarding the health of our restaurant concepts and in determining our royalties and/or service fees.

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

THIRTEEN WEEKS ENDED

(dollars in millions) MARCH 28, 2021 MARCH 29, 2020

Outback Steakhouse $ 92 $ 116

4 unchanged sentences

Outback Steakhouse-South Korea $ 74 $ 54

Other 19 25 45 78

International total $ 98 $ 76

1 unchanged sentence

_____________________

(1) In March 2019, we sold 18 Carrabba’s Italian Grill locations, which are now operated as franchises.

(2) Franchise sales are not included in Total revenues in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Adjusted restaurant-level operating margin - The following tables show the percentages of certain operating cost financial statement line items in relation to Restaurant sales:

THIRTEEN WEEKS ENDED

SEPTEMBER 27, 2020 SEPTEMBER 29, 2019

GAAP ADJUSTED U.S.

GAAP ADJUSTED (1)

Restaurant sales 100.0 % 100.0 % 100.0 % 100.0 %

Food and beverage costs 30.1 % 30.1 % 31.6 % 31.6 %

Labor and other related 32.2 % 32.2 % 30.3 % 30.3 %

Other restaurant operating 27.0 % 27.0 % 25.3 % 25.6 %

Restaurant-level operating margin 10.7 % 10.7 % 12.9 % 12.5 %

THIRTY-NINE WEEKS ENDED

SEPTEMBER 27, 2020 SEPTEMBER 29, 2019

GAAP ADJUSTED (1) U.S.

GAAP ADJUSTED (1)

Restaurant sales 100.0 % 100.0 % 100.0 % 100.0 %

Food and beverage costs 31.3 % 30.9 % 31.4 % 31.4 %

Labor and other related 32.6 % 32.6 % 29.6 % 29.6 %

Other restaurant operating 27.0 % 27.0 % 23.9 % 24.0 %

Restaurant-level operating margin 9.2 % 9.5 % 15.1 % 15.0 %

_________________

(1) Includes unfavorable (favorable) adjustments recorded in Other restaurant operating expense (unless otherwise noted below) for the following activities, as described in the Adjusted (loss) income from operations, Adjusted net (loss) income and Adjusted diluted (loss) earnings per share table below for the periods indicated:

THIRTEEN WEEKS ENDED

SEPTEMBER 29, 2019 THIRTY-NINE WEEKS ENDED

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

Restaurant and asset impairments and closing costs $ 3.8 $ 2.8 $ 4.0

Restaurant relocations and related costs (0.1) (0.1) (0.4)

COVID-19 related costs (1) — (9.9) —

$ 3.7 $ (7.2) $ 3.6

_________________

(1) Includes $7.3 million of adjustments recorded in Food and beverage costs.

(1) Franchise sales are not included in Total revenues in the Consolidated Statements of Operations and Comprehensive Income (Loss).

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Restaurant-level operating margin - The following tables reconcile consolidated and segment (Loss) income from operations and the corresponding margins to Restaurant-level operating income and the corresponding margins for the periods indicated:

Consolidated THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

(Loss) income from operations $ (14,255) $ 21,958 $ (167,735) $ 147,912

Operating (loss) income margin (1.8) % 2.3 % (7.1) % 4.7 %

Restaurant-level operating margin - The following tables reconcile consolidated and segment Income (loss) from operations and the corresponding margins to Restaurant-level operating income and the corresponding margins for the periods indicated:

Consolidated THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 28, 2021 MARCH 29, 2020

Income (loss) from operations $ 90,998 $ (41,568)

Operating income (loss) margin 9.2 % (4.1) %

Franchise and other revenues 8,022 12,100

4 unchanged sentences

Restaurant-level operating margin 18.8 % 12.1 %

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

Income (loss) from operations $ 29,574 $ 50,318 $ (21,968) $ 242,167

Operating income (loss) margin 4.1 % 5.9 % (1.0) % 8.7 %

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 28, 2021 MARCH 29, 2020

Income from operations $ 121,735 $ 11,379

Operating income margin 13.5 % 1.3 %

Franchise and other revenues 4,859 9,608

4 unchanged sentences

Restaurant-level operating margin 19.2 % 11.5 %

International THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

(Loss) income from operations $ (7,926) $ 10,550 $ (18,209) $ 31,179

Operating (loss) income margin (16.0) % 8.9 % (8.9) % 9.2 %

International THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 28, 2021 MARCH 29, 2020

Income from operations $ 3,537 $ 6,787

Operating income margin 4.3 % 6.0 %

Franchise and other revenues 3,163 2,492

2 unchanged sentences

Provision for impaired assets and restaurant closings 707 3,344

Restaurant-level operating (loss) income $ (684) $ 21,695 $ 11,340 $ 65,664

Restaurant-level operating income $ 11,406 $ 20,653

Restaurant-level operating margin 14.4 % 18.5 %

2 unchanged sentences

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Adjusted (loss) income from operations, Adjusted net (loss) income and Adjusted diluted (loss) earnings per share

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

(Loss) income from operations $ (14,255) $ 21,958 $ (167,735) $ 147,912

Operating (loss) income margin (1.8) % 2.3 % (7.1) % 4.7 %

Severance and other transformational costs (1) 4,200 1,908 28,847 5,511

Adjusted restaurant-level operating margin - The following tables show the percentages of certain operating cost financial statement line items in relation to Restaurant sales:

THIRTEEN WEEKS ENDED

MARCH 28, 2021 MARCH 29, 2020

REPORTED ADJUSTED REPORTED ADJUSTED (1)

Restaurant sales 100.0 % 100.0 % 100.0 % 100.0 %

Food and beverage costs 29.8 % 29.8 % 32.1 % 31.5 %

Labor and other related 28.0 % 28.0 % 31.0 % 31.0 %

Other restaurant operating 23.4 % 23.4 % 24.7 % 25.0 %

Restaurant-level operating margin 18.8 % 18.8 % 12.1 % 12.5 %

_________________

(1) Includes unfavorable (favorable) adjustments recorded in Other restaurant operating expense (unless otherwise noted below) for the following activities, as described in the Adjusted income from operations, Adjusted net income and Adjusted diluted earnings per share table below for the period indicated:

THIRTEEN WEEKS ENDED

(dollars in millions) MARCH 29, 2020

Restaurant and asset impairments and closing costs $ 2.8

Restaurant relocations and related costs (0.1)

COVID-19 related costs (1) (6.2)

_________________

(1) Adjustments recorded in Food and beverage costs.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Adjusted income from operations, Adjusted net income and Adjusted diluted earnings per share

THIRTEEN WEEKS ENDED

(in thousands, except per share data) MARCH 28, 2021 MARCH 29, 2020

Income (loss) from operations $ 90,998 $ (41,568)

Operating income (loss) margin 9.2 % (4.1) %

COVID-19-related costs (1) — 48,876

Severance and other transformational costs (2) — 22,232

Restaurant relocations and related costs (3) — 592

1 unchanged sentence

Restaurant and asset impairments and closing costs (4) — (2,797)

Total (loss) income from operations adjustments $ 4,200 $ 128 $ 106,038 $ 9,885

Adjusted (loss) income from operations $ (10,055) $ 22,086 $ (61,697) $ 157,797

Adjusted operating (loss) income margin (1.3) % 2.3 % (2.6) % 5.1 %

Net (loss) income attributable to common stockholders $ (17,637) $ 9,248 $ (148,000) $ 102,569

(Loss) income from operations adjustments 4,200 128 106,038 9,885

Amortization of debt discount (5) 2,407 — 3,786 —

Total income (loss) from operations adjustments $ — $ 69,081

Adjusted income from operations $ 90,998 $ 27,513

Adjusted operating income margin 9.2 % 2.7 %

Net income (loss) attributable to common stockholders $ 68,862 $ (38,107)

Income (loss) from operations adjustments — 69,081

Total adjustments, before income taxes — 69,081

2 unchanged sentences

Net adjustments — 50,582

Adjusted net (loss) income $ (10,590) $ 8,905 $ (62,709) $ 110,751

Diluted (loss) earnings per share attributable to common stockholders (8) $ (0.20) $ 0.11 $ (1.69) $ 1.14

Adjusted diluted (loss) earnings per share (8) $ (0.12) $ 0.10 $ (0.72) $ 1.23

Adjusted net income 68,862 12,475

Convertible senior notes if-converted method interest adjustment, net of tax (7) 1,381 —

Diluted net income (loss) attributable to common stockholders $ 70,243 $ 12,475

Diluted earnings (loss) per share attributable to common stockholders (8) $ 0.63 $ (0.44)

Adjusted diluted earnings per share (8)(9) $ 0.72 $ 0.14

Basic weighted average common shares outstanding 88,367 87,129

Diluted weighted average common shares outstanding (8) 110,641 87,963

Adjusted diluted weighted average common shares outstanding (8)(9) 95,448 87,963

_________________

(1) Severance and other costs incurred as a result of transformational and restructuring activities.

(2) Costs incurred in connection with the economic impact of the COVID-19 pandemic, primarily consisting of fixed asset and right-of-use asset impairments, restructuring charges, inventory obsolescence and spoilage, contingent lease liabilities and current expected credit losses.

(1) Costs incurred in connection with the COVID-19 pandemic, primarily consisting of fixed asset and right-of-use asset impairments, inventory obsolescence and spoilage, contingent lease liabilities and current expected credit losses.

See Note 2 - COVID-19 Charges of the Notes to Consolidated Financial Statements for additional details regarding the impact of certain COVID-19 pandemic related charges on our financial results.

(2) Severance, professional fees and other costs incurred as a result of transformational and restructuring activities.

(3) Asset impairment charges and accelerated depreciation incurred in connection with our relocation program.

(4) Includes a lease termination gain of $2.8 million during the thirty-nine weeks ended September 27, 2020 and asset impairment charges and related costs primarily related to approved closure and restructuring initiatives during 2019.

Amount also includes gains on the sale of certain surplus properties of $3.8 million during 2019.

(5) Amortization of the debt discount related to the issuance of the 2025 Notes.

See Note 12 - Convertible Senior Notes of the Notes to Consolidated Financial Statements for details.

(4) Includes a lease termination gain of $2.8 million.

(5) Income tax effect of the adjustments for the periods presented.

(6) Consideration paid in excess of the carrying value for the redemption of preferred stock of our Abbraccio subsidiary.

(8) Due to the net loss, the effect of dilutive securities was excluded from the calculation of diluted and adjusted diluted loss per share for the thirteen and thirty-nine weeks ended September 27, 2020.

(7) Adjustment relates to the 2025 Notes weighted for the portion of the period prior to our election under the 2025 Notes indenture to settle the principal portion of its 2025 Notes in cash.

(8) Due to the GAAP net loss, the effect of dilutive securities was excluded from the calculation of GAAP diluted loss per share for the thirteen weeks ended March 29, 2020.

For adjusted diluted earnings per share, the calculation includes 834 dilutive shares for the thirteen weeks ended March 29, 2020.

(9) For the thirteen weeks ended March 28, 2021, adjusted diluted weighted average common shares outstanding was calculated (i) assuming our February 2021 election to settle the principal portion of the 2025 Notes in cash was in effect for the entire period and (ii) excluding the dilutive effect of 9,653 shares to be issued upon conversion of the notes to satisfy the amount in excess of the principal since the Convertible Note Hedge Transactions offset the dilutive impact of the shares underlying the 2025 Notes.

The calculation of adjusted diluted earnings per share excludes the convertible senior notes interest adjustment.

BLOOMIN’ BRANDS, INC.

2 unchanged sentences

Liquidity and Capital Resources

Typically, cash flows generated from operating activities and availability under our revolving credit facility are our principal sources of liquidity, which we use for operating expenses, payments on our debt, remodeling or relocating older restaurants, obligations related to our deferred compensation plans and investment in technology.

During 2020, the temporary closure of our dining rooms and the limitations on seating capacity due to the COVID-19 pandemic has resulted in significantly reduced traffic in our restaurants which has negatively impacted our operating cashflows.

In response to the COVID-19 pandemic, we have tightly managed expenses while prioritizing support of our workforce, off-premises business and the safe reopening of our restaurant dining rooms.

In addition, we have taken several precautionary measures to preserve liquidity, including the following:

• suspended our quarterly cash dividend and stock repurchases;

• significantly reduced marketing and tightly managed other expenses;

• substantially limited capital expenditures to facility maintenance in support of our off-premises business and safe reopening of our restaurant dining rooms;

• engaged in constructive dialogue with our landlords regarding rent abatements and deferrals.

The above actions are in addition to the significant cost cutting measures for fiscal 2020 that we announced and implemented earlier in the year.

In addition, on March 16, 2020, in order to increase our cash position and preserve financial flexibility, we drew down substantially all remaining availability under our revolving credit facility.

In May 2020, we issued $230.0 million aggregate principal amount of 5.00% convertible senior notes due 2025.

Net proceeds from the 2025 Notes were approximately $221.6 million, after deducting the initial purchaser’s discounts and commissions and our offering expenses.

See “ 2025 Notes” below for additional details regarding the convertible senior notes.

In June and August 2020, we repaid $360.0 million and $60.0 million, respectively, on our revolving credit facility with cash on hand, a portion of which was proceeds from the 2025 Notes.

Subsequent to September 27, 2020, we repaid $23.0 million on our revolving credit facility.

Cash and Cash Equivalents - As of September 27, 2020, we had $160.0 million in cash and cash equivalents, of which $26.7 million was held by foreign affiliates.

Cash flows generated from operating activities and availability under our revolving credit facility are our principal sources of liquidity, which we use for operating expenses, payments on our debt, remodeling or relocating older restaurants, obligations related to our deferred compensation plans and investment in technology.

Cash and Cash Equivalents - As of March 28, 2021, we had $136.7 million in cash and cash equivalents, of which $34.5 million was held by foreign affiliates.

The international jurisdictions in which we have significant cash do not have any known restrictions that would prohibit repatriation.

As of September 27, 2020, we had aggregate accumulated foreign earnings of approximately $40.0 million.

As of March 28, 2021, we had aggregate accumulated foreign earnings of approximately $35.9 million.

This amount consisted primarily of historical earnings from 2017 and prior that were previously taxed in the U.S.

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These amounts are no longer considered indefinitely reinvested in our foreign subsidiaries.

Closure and Restructuring Initiatives - Total aggregate future undiscounted cash expenditures of $11.0 million to $13.5 million related to lease liabilities for certain closure and restructuring initiatives are expected to occur over the remaining lease terms through January 2029.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Capital Expenditures - We estimate that our capital expenditures will total approxim atel y $170 million to $185 million in 2021.

The amount of actual capital expenditures may be affected by general economic, financial, competitive, legislative and regulatory factors, among other things, including restrictions imposed by our borrowing arrangements.

Under the Amended Credit Agreement, we are limited to $100.0 million of aggregate capital expenditures for the four fiscal quarters through March 28, 2021.

Credit Facilities - As of September 27, 2020, we had $1.2 billion of outstanding borrowings under our Senior Secured Credit Facility and 2025 Notes.

Under the Second Amended and Restated Credit Agreement, we are limited to $200.0 million of aggregate capital expenditures during the year ended December 26, 2021.

Credit Facilities - As of March 28, 2021, we had $1.0 billion of outstanding borrowings under our Senior Secured Credit Facility and 2025 Notes.

Following is a summary of our outstanding credit facilities as of the dates indicated and principal payments and debt issuance during the period indicated:

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2021 payments (9,375) (107,000) — (116,375)

Balance as of September 27, 2020 (1) $ 431,250 $ 555,000 $ 230,000 $ 1,216,250

Weighted-average interest rate, as of September 27, 2020 2.89 % 2.88 % 5.00 %

Balance as of March 28, 2021 $ 415,625 $ 355,000 $ 230,000 $ 1,000,625

Weighted-average interest rate, as of March 28, 2021 2.85 % 2.86 % 5.00 %

Principal maturity date November 2022 November 2022 May 2025

________________

(1) Subsequent to September 27, 2020, we made a payment of $23.0 million on our revolving credit facility.

As of September 27, 2020, we had $425.8 million in available unused borrowing capacity under our revolving credit facility, net of letters of credit of $19.2 million.

Amended Credit Agreement - On May 4, 2020, we and OSI, as co-borrowers, entered into the Amended Credit Agreement which provides relief for the financial covenant to maintain a specified quarterly TNLR.

Without such amendment, violation of financial covenants under the original credit agreement could have resulted in default.

The Amended Credit Agreement waives the TNLR requirement for the remainder of fiscal year 2020 and requires a TNLR based on a seasonally annualized calculation of Consolidated EBITDA not to exceed the following thresholds for the periods indicated:

QUARTERLY PERIOD ENDED MAXIMUM RATIO

March 28, 2021 (1) 5.50 to 1.00

June 27, 2021 (2) 5.00 to 1.00

September 26, 2021 and thereafter (3) 4.50 to 1.00

________________

(1) Seasonally annualized Consolidated EBITDA calculated as Consolidated EBITDA for the fiscal quarter ending March 28, 2021 divided by 34.1%.

(2) Seasonally annualized Consolidated EBITDA calculated as Consolidated EBITDA for the two consecutive quarters ending June 27, 2021 divided by 58.5%.

(3) Seasonally annualized Consolidated EBITDA calculated as Consolidated EBITDA for the three consecutive quarters ending September 26, 2021 divided by 77.0%.

Under the terms of the Amended Credit Agreement, we are required to meet minimum monthly liquidity threshold of $125.0 million through March 28, 2021, calculated as the sum of available capacity under our revolving credit facility, unrestricted domestic cash on hand and up to $25.0 million of unrestricted cash held by foreign subsidiaries.

We are also prohibited from making certain restricted payments, investments or acquisitions until after September 26, 2021, with an exception for investments in our foreign subsidiaries which are capped at $27.5 million.

Repurchasing shares of our outstanding common stock and paying dividends are also restricted until after September 26, 2021.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Interest rates under the Amended Credit Agreement are 275 and 175 basis points above the Eurocurrency Rate and Base Rate, respectively, and letter of credit fees and fees for the daily unused availability under the revolving credit facility are 2.75% and 0.40%, respectively, subject to reversion to rates under the original credit agreement when we are in compliance with the TNLR covenant for the test period ending September 26, 2021.

We are also subject to a 0% Eurocurrency floor under the Amended Credit Agreement.

The Amended Credit Agreement contains term loan mandatory prepayment requirements of 50% of our annual excess cash flow (as defined in the Amended Credit Agreement) after December 27, 2020.

The amount outstanding required to be prepaid may vary based on our leverage ratio and year end results.

Other than the annual required minimum amortization premiums of $34.4 million, we do not anticipate any other payments will be required through September 26, 2021.

As of September 27, 2020 and December 29, 2019, we were in compliance with our debt covenants.

As of March 28, 2021, we had $624.9 million in available unused borrowing capacity under our revolving credit facility, net of letters of credit of $20.1 million.

As of March 28, 2021 and December 27, 2020, we were in compliance with our debt covenants.

We believe that we will remain in compliance with our debt covenants during the next 12 months.

2025 Notes - On May 8, 2020, we completed a $200.0 million principal amount private offering of 5.00% convertible senior notes due 2025 and on May 12, 2020, issued an additional $30.0 million principal amount in connection with the option granted to the initial purchasers as part of the offering.

The 2025 Notes will mature on May 1, 2025, unless earlier converted, redeemed or purchased by us.

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 initial conversion rate applicable to the 2025 Notes is 84.122 shares of common stock per $1,000 principal amount of 2025 Notes, or a total of approximately 19.348 million shares for the total $230.0 million principal amount.

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

We will settle conversions by paying or delivering, as applicable, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, based on the applicable conversion rate.

We expect to settle the principal amount of our outstanding convertible senior notes in cash and any excess in shares.

Net proceeds from this offering were approximately $221.6 million, after deducting the initial purchaser’s discounts and commissions and our offering expenses.

Convertible Note Hedge and Warrant Transactions - In connection with the offering of the 2025 Notes , we entered into Convertible Note Hedge Transactions with the Hedge Counterparties.

Concurrently with our entry into the Convertible Note Hedge Transactions, we also entered into separate Warrant Transactions with the Hedge Counterparties collectively relating to the same number of shares of our common stock.

The portion of the net proceeds from our offering of the 2025 Notes that was used to pay the premium on the Convertible Note Hedge Transactions (calculated after taking into account our proceeds from the Warrant Transactions) was approximately $19.6 million.

See Note 12 - Convertible Senior Notes of the Notes to Consolidated Financial Statements for additional details regarding the convertible senior notes and related hedge and warrant transactions.

2029 Notes - On April 16, 2021, we issued $300.0 million aggregate principal amount of senior unsecured notes due 2029.

The 2029 Notes will mature on April 15, 2029, unless earlier redeemed or purchased by us.

The 2029 Notes bear cash interest at an annual rate of 5.125% payable semi-annually in arrears on April 15 and October 15 of each year, beginning on October 15, 2021.

BLOOMIN’ BRANDS, INC.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

The net proceeds from the 2029 Notes, after deducting the initial purchaser’s discount and our offering expenses, were used to repay a portion of our outstanding Term loan A and revolving credit facility in conjunction with the refinancing of our Senior Secured Credit Facility.

Second Amended and Restated Credit Agreement - On April 16, 2021, we and OSI, as co-borrowers, entered into the Second Amended and Restated Credit Agreement which provides for senior secured financing of up to $1.0 billion consisting of a $200.0 million Term loan A and an $800.0 million revolving credit facility.

The New Senior Secured Credit Facility matures on April 16, 2026 and replaces our prior senior secured financing of up to $1.5 billion.

The Second Amended and Restated Credit Agreement limits, subject to certain exceptions, our ability and the ability of our subsidiaries to:

incur additional indebtedness;

make significant payments;

pay dividends and other restricted payments;

make certain investments;

acquire certain assets;

effect mergers and similar transactions;

and effect certain other transactions with affiliates.

The Second Amended and Restated Credit Agreement also prohibits us from paying certain dividends and making certain restricted payments and acquisitions until we are in compliance with our TNLR covenant for the period ended September 26, 2021.

Our New Senior Secured Credit Facility contains mandatory prepayment requirements for Term loan A.

We are required to prepay outstanding amounts under these loans with 50% of our annual excess cash flow, as defined in the Second Amended and Restated Credit Agreement, commencing with the fiscal year ending December 25, 2022.

The amount of outstanding loans required to be prepaid in accordance with the debt covenants may vary based on our CSSNLR and year end results.

Other than the annual required minimum amortization premiums of $7.5 million, we do not anticipate any other payments will be required through March 27, 2022.

Subsequent to our refinancing of the Senior Secured Credit Facility, we made payments of $20.0 million on our new revolving credit facility, which had an outstanding balance of $251.0 million as of April 30, 2021.

See Note 9 - Long-term Debt, Net for additional details regarding the 2029 Notes and Second Amended and Restated Credit Agreement.

SUMMARY OF CASH FLOWS

The following table presents a summary of our cash flows provided by (used in) operating, investing and financing activities for the periods indicated:

THIRTY-NINE WEEKS ENDED

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 28, 2021 MARCH 29, 2020

Net cash provided by operating activities $ 141,026 $ 28,291

Net cash used in investing activities (16,618) (34,798)

Net cash provided by (used in) financing activities 99,853 (106,444)

Net cash (used in) provided by financing activities (96,912) 342,333

Effect of exchange rate changes on cash and cash equivalents (1,246) 424

Net increase (decrease) in cash, cash equivalents and restricted cash $ 95,369 $ (20,415)

Operating activities - Net cash provided by operating activities decreased du ring the thirty-nine weeks ended September 27, 2020, as compared to the thirty-nine weeks ended September 29, 2019 primarily due to a decrease in net restaurant sales and relief payments made to employees, net of employee retention tax credits as a result of the COVID-19 pandemic.

These decreases were partially offset by:

(i) decreased variable operating costs as a result of lower net restaurant sales, (ii) deferral of payroll tax payments as a result of the CARES Act, (iii) the timing of collections of receivables and payments made, (iv) lower inventory purchases and (v) lower income tax payments.

Investing activities - Net cash used in investing activities during the thirty-nine weeks ended September 27, 2020 primarily consisted of capital expenditures, partially offset by withdrawals from Company-owned life insurance policies.

Net cash used in investing activities during the thirty-nine weeks ended September 29, 2019 primarily consisted of capital expenditures, partially offset by proceeds from the disposal of property, fixtures and equipment and proceeds from sale-leasebac k transactions.

Financing activities - Net cash provided by financing activities during the thirty-nine weeks ended September 27, 2020 primarily consisted of proceeds from issuance of convertible senior notes and related warrants transactions partially offset by:

(i) premium payments for Convertible Note Hedge Transactions, (ii) repayments on our revolving credit facility, net of drawdowns, (iii) the repayments of long-term debt, (iv) payment of cash dividends on our common stock, (v) partner equity plan payments and (vi) issuance costs and financing fees in connection with our 2025 Notes and Amended Credit Agreement.

Net cash used in financing activities during the thirty-nine weeks ended September 29, 2019 primarily consisted of:

(i) the repurchase of common stock, (ii) payment of cash dividends on our common stock, (iii) the repayment of long-term debt and (iv) partner equity plan payments.

Net cash used in financing activities was partially offset by drawdowns on our revolving credit facility, net of repayments.

Net increase in cash, cash equivalents and restricted cash $ 26,250 $ 336,250

Operating activities - Net cash provided by operating activities increased during the thirteen weeks ended March 28, 2021, as compared to the thirteen weeks ended March 29, 2020 primarily due to:

(i) an increase in restaurant-level operating margin and a decrease in relief pay primarily due to the re-opening of our restaurant dining rooms and (ii) timing of operational receipts and payments.

These increases were partially offset by:

(i) lower gift card sales and the timing of collections of gift card receivables and (ii) lower utilization of inventory on hand.

BLOOMIN’ BRANDS, INC.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Investing activities - The decrease in net cash used in investing activities during the thirteen weeks ended March 28, 2021 compared to the thirteen weeks ended March 29, 2020 was primarily due to lower capital expenditures due to restrictions under our credit agreement.

Financing activities - Net cash used in financing activities during the thirteen weeks ended March 28, 2021 compared to net cash provided by financing activities during the thirteen weeks ended March 29, 2020 was primarily due to net repayments on our revolving credit facility during 2021 as compared to net borrowings during 2020, partially offset by:

(i) payment of cash dividends on our common stock during 2020 and (ii) proceeds from the exercise of stock-based compensation during 2021 as compared to payment of taxes from the exercise of stock-based compensation during 2020.

FINANCIAL CONDITION

Following is a summary of our current assets, current liabilities and working capital (deficit) as of the periods indicated:

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

(dollars in thousands) MARCH 28, 2021 DECEMBER 27, 2020

Current assets $ 272,989 $ 323,854

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Working capital (deficit) includes:

(i) Unearned revenue primarily from unredeemed gift cards of $280.1 million and $369.3 million as of September 27, 2020 and December 29, 2019, respectively, and (ii) current operating lease liabilities of $177.7 million and $171.9 million as of September 27, 2020 and December 29, 2019, respectively, with the corresponding operating right-of-use assets recorded as non-current on our Consolidated Balance Sheets.

(i) Unearned revenue primarily from unredeemed gift cards of $315.0 million and $381.6 million as of March 28, 2021 and December 27, 2020, respectively, and (ii) current operating lease liabilities of $176.9 million and $176.8 million as of March 28, 2021 and December 27, 2020, respectively, with the corresponding operating right-of-use assets recorded as non-current on our Consolidated Balance Sheets.

We have, and in the future may continue to have, negative working capital balances (as is common for many restaurant companies).

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Additionally, ongoing cash flows from restaurant operations and gift card sales are typically used to service debt obligations and to make capital expenditures.

Deferred Compensation Programs - The deferred compensation obligation due to managing and chef partners was $32.7 million and $49.0 million as of September 27, 2020 and December 29, 2019, respectively.

We invest in various corporate-owned life insurance policies (“COLI assets”), which are held within an irrevocable grantor or “rabbi” trust account for settlement of our obligations under the deferred compensation plans.

Deferred Compensation Programs - The deferred compensation obligation due to managing and chef partners was $24.2 million and $28.1 million as of March 28, 2021 and December 27, 2020, respectively.

We invest in various corporate-owned life insurance policies, which are held within an irrevocable grantor or “rabbi” trust account for settlement of our obligations under the deferred compensation plans.

The rabbi trust is funded through our voluntary contributions.

The obligation for managing and chef partners’ deferred compensation was fully funded as of September 27, 2020.

We use capital to fund deferred compensation obligations and currently expect cash funding of $9.5 million to $11.5 million for 2020.

We also funded a portion of our 2020 obligation with $9.3 million withdrawn from our COLI assets.

Actual funding of the deferred compensation obligations and future funding requirements may vary significantly depending on the actual performance compared to targets, timing of deferred payments of partner contracts, forfeiture rates, number of partner participants, growth of partner investments and our funding strategy.

The obligation for managing and chef partners’ deferred compensation was fully funded as of March 28, 2021.

Other Compensation Programs - Certain U.S.

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DIVIDENDS AND SHARE REPURCHASES

We did not pay dividends or repurchase any shares of our outstanding common stock during the thirteen weeks ended September 27, 2020.

The terms of our Amended Credit Agreement contain certain restrictions on cash dividends and share repurchases until after September 26, 2021 and we are compliant with our financial covenants.

We did not pay dividends or repurchase any shares of our outstanding common stock during the thirteen weeks ended March 28, 2021.

The terms of our Second Amended and Restated Credit Agreement contain certain restrictions on cash dividends and share repurchases until after TNLR covenant compliance is met for the period ending September 26, 2021.

BLOOMIN’ BRANDS, INC.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Following is a summary of our dividends and share repurchases from fiscal year 2015 through September 27, 2020:

Following is a summary of our dividends and share repurchases from fiscal year 2015 through March 28, 2021:

(dollars in thousands) DIVIDENDS PAID SHARE REPURCHASES TOTAL

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Fiscal year 2019 35,734 106,992 142,726

Fiscal year 2020 17,480 — 17,480

First fiscal quarter 2021 — — —

Total $ 178,225 $ 973,581 $ 1,151,806

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(1) Excludes share repurchases for the settlement of taxes related to equity awards of $180, $447, and $770 for fiscal years 2017, 2016 and 2015, respectively.

Recently Issued Financial Accounting Standards

For a description of recently issued Financial Accounting Standards that we adopted during the thirty-nine weeks ended September 27, 2020 and, that are applicable to us and likely to have material effect on our consolidated financial statements, but have not yet been adopted, see Note 1 - Description of the Business and Basis of Presentation of the Notes to Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

For a description of recently issued Financial Accounting Standards that we adopted during the thirteen weeks ended March 28, 2021 and, that are applicable to us and likely to have material effect on our consolidated financial statements, but have not yet been adopted, see Note 1 - Description of the Business and Basis of Presentation of the Notes to Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

BLOOMIN’ BRANDS, INC.

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 2. Management’s Discussion and Analysis