What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-08-05 compared with 2021-04-30 · 345 added, 213 removed, 653 unchanged (46% of the section changed)

2 unchanged sentences

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

MARCH 28, 2021 DECEMBER 27, 2020

JUNE 27, 2021 DECEMBER 27, 2020

Current assets

26 unchanged sentences

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

no shares issued and outstanding as of March 28, 2021 and December 27, 2020

no shares issued and outstanding as of June 27, 2021 and December 27, 2020

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

88,854,861 and 87,855,571 shares issued and outstanding as of March 28, 2021 and December 27, 2020, respectively

89,210,729 and 87,855,571 shares issued and outstanding as of June 27, 2021 and December 27, 2020, respectively

Additional paid-in capital 1,109,904 1,132,808

9 unchanged sentences

(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)

THIRTEEN WEEKS ENDED

MARCH 28, 2021 MARCH 29, 2020

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

JUNE 27, 2021 JUNE 28, 2020 JUNE 27, 2021 JUNE 28, 2020

Restaurant sales $ 1,055,227 $ 576,261 $ 2,034,678 $ 1,572,498

10 unchanged sentences

Income (loss) from operations 124,637 ( 111,912 ) 215,635 ( 153,480 )

Loss on extinguishment and modification of debt ( 2,073 ) ( 237 ) ( 2,073 ) ( 237 )

Other income (expense), net — 581 21 ( 212 )

3 unchanged sentences

Net income (loss) 84,886 ( 92,428 ) 154,684 ( 126,842 )

net income attributable to noncontrolling interests 936 197

net income (loss) attributable to noncontrolling interests 2,341 ( 172 ) 3,277 25

Net income (loss) attributable to Bloomin’ Brands

6 unchanged sentences

Unrealized loss on derivatives, net of tax ( 128 ) ( 1,556 ) ( 170 ) ( 14,892 )

Reclassification of adjustment for loss on derivatives included in Net income (loss), net of tax 3,003 1,396

Reclassification of adjustments for loss on derivatives included in Net income (loss), net of tax 1,514 2,585 4,517 3,981

Amortization of terminated interest rate swaps, net of tax 1,471 — 1,471 —

Comprehensive income (loss) 97,758 ( 120,545 ) 163,942 ( 174,860 )

16 unchanged sentences

SHARES AMOUNT

Balance, March 28, 2021 88,855 $ 889 $ 1,097,639 $ ( 844,864 ) $ ( 215,060 ) $ 6,801 $ 45,405

Net income — — — 82,545 — 2,341 84,886

Other comprehensive income, net of tax — — — — 12,872 — 12,872

Stock-based compensation — — 9,781 — — — 9,781

Common stock issued under stock plans (1) 356 3 2,484 — — — 2,487

Distributions to noncontrolling interests — — — — — ( 2,683 ) ( 2,683 )

Contributions from noncontrolling interests — — — — — 159 159

Balance, June 27, 2021 89,211 $ 892 $ 1,109,904 $ ( 762,319 ) $ ( 202,188 ) $ 6,618 $ 152,907

Balance, December 27, 2020 87,856 $ 879 $ 1,132,808 $ ( 918,096 ) $ ( 211,446 ) $ 6,812 $ 10,957

1 unchanged sentence

Net income — — — 151,407 — 3,277 154,684

Other comprehensive loss, net of tax — — — — ( 3,614 ) — ( 3,614 )

Other comprehensive income, net of tax — — — — 9,258 — 9,258

Stock-based compensation — — 14,507 — — — 14,507

2 unchanged sentences

Contributions from noncontrolling interests — — — — — 670 670

Balance, March 28, 2021 88,855 $ 889 $ 1,097,639 $ ( 844,864 ) $ ( 215,060 ) $ 6,801 $ 45,405

Balance, June 27, 2021 89,211 $ 892 $ 1,109,904 $ ( 762,319 ) $ ( 202,188 ) $ 6,618 $ 152,907

BLOOMIN’ BRANDS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)

BLOOMIN’ BRANDS, INC.

COMMON STOCK ADDITIONAL PAID-IN CAPITAL ACCUM-

2 unchanged sentences

SHARES AMOUNT

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

Net loss — — — ( 92,256 ) — ( 172 ) ( 92,428 )

Other comprehensive loss, net of tax — — — — ( 28,117 ) — ( 28,117 )

Stock-based compensation — — 5,071 — — — 5,071

Common stock issued under stock plans (1) 117 1 ( 356 ) — — — ( 355 )

Distributions to noncontrolling interests — — — — — ( 27 ) ( 27 )

Contributions from noncontrolling interests — — — — — 94 94

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

10 unchanged sentences

Contributions from noncontrolling interests — — — — — 147 147

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

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

________________

(1) Net of forfeitures and shares withheld for employee taxes.

3 unchanged sentences

(DOLLARS IN THOUSANDS, UNAUDITED)

THIRTEEN WEEKS ENDED

MARCH 28, 2021 MARCH 29, 2020

Cash flows provided by operating activities:

TWENTY-SIX WEEKS ENDED

JUNE 27, 2021 JUNE 28, 2020

Cash flows provided by (used in) operating activities:

Net income (loss) $ 154,684 $ ( 126,842 )

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

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

Depreciation and amortization 81,765 94,052

2 unchanged sentences

Provision for impaired assets and restaurant closings 7,377 66,277

Amortization of unrealized loss on terminated interest rate swaps 1,981 —

Non-cash operating lease costs 38,073 36,230

3 unchanged sentences

Deferred income tax expense (benefit) 10,300 ( 58,578 )

Loss on disposal of property, fixtures and equipment 434 796

(Gain) loss on disposal of property, fixtures and equipment ( 709 ) 1,014

Other, net 502 ( 991 )

Change in assets and liabilities ( 43,067 ) ( 51,253 )

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

Net cash provided by (used in) operating activities 283,182 ( 3,313 )

Cash flows used in investing activities:

Proceeds from disposal of property, fixtures and equipment 4,828 422

Capital expenditures ( 51,398 ) ( 53,205 )

5 unchanged sentences

(DOLLARS IN THOUSANDS, UNAUDITED)

THIRTEEN WEEKS ENDED

MARCH 28, 2021 MARCH 29, 2020

TWENTY-SIX WEEKS ENDED

JUNE 27, 2021 JUNE 28, 2020

Cash flows (used in) provided by financing activities:

Proceeds from issuance of long-term debt $ 200,000 $ —

Repayments of long-term debt and finance lease obligations ( 425,564 ) ( 13,242 )

1 unchanged sentence

Repayments of borrowings on revolving credit facilities ( 599,000 ) ( 489,000 )

Financing fees ( 5,868 ) ( 3,096 )

Proceeds from issuance of senior notes 300,000 —

Proceeds from issuance of convertible senior notes — 230,000

Proceeds from issuance of warrants — 46,690

Purchase of convertible note hedge — ( 66,240 )

Issuance costs related to senior notes ( 5,546 ) ( 8,416 )

Proceeds (payments of taxes) from share-based compensation, net 9,925 ( 2,862 )

7 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents 128 ( 2,955 )

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

Net (decrease) increase in cash, cash equivalents and restricted cash ( 7,333 ) 115,386

Cash, cash equivalents and restricted cash as of the beginning of the period 110,408 67,145

6 unchanged sentences

Leased assets obtained in exchange for new finance lease liabilities $ 48 $ 538

Increase (decrease) in liabilities from the acquisition of property, fixtures and equipment 2,005 ( 1,950 )

Decrease in liabilities from the acquisition of property, fixtures and equipment $ ( 203 ) $ ( 9,666 )

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

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

Description of the Business and Basis of Presentation

26 unchanged sentences

In February 2021, the Company made an irrevocable election under the indenture to require the principal portion of its 2025 Notes to be settled in cash and any excess in shares.

Following the irrevocable notice, only the amounts settled in excess of the principal will be considered in diluted earnings per share under the if-converted method.

Following the irrevocable notice, only the amounts expected to be settled in excess of the principal will be considered in diluted earnings per share under the if-converted method.

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.

BLOOMIN’ BRANDS, INC.

3 unchanged sentences

In March 2020, the Company temporarily closed all restaurant dining rooms in the U.S.

to comply with state and local regulations in response to the COVID-19 pandemic (“COVID-19”), which significantly impacted operating results during the thirteen weeks ended March 29, 2020.

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 INCOME (LOSS) CLASSIFICATION THIRTEEN WEEKS ENDED

MARCH 29, 2020

to comply with state and local regulations in response to the COVID-19 pandemic (“COVID-19”).

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

CHARGES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) CLASSIFICATION THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

JUNE 28, 2020 JUNE 28, 2020

Inventory obsolescence and spoilage (1) Food and beverage costs $ 1,163 $ 7,345

Compensation for idle employees (2) Labor and other related 11,388 27,574

Other operating charges Other restaurant operating 2,467 2,467

Lease guarantee contingent liabilities (3) General and administrative — 4,188

5 unchanged sentences

$ 41,729 $ 106,792

(1) Represents relief pay for hourly employees impacted by the closure of dining rooms.

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

(3) Includes reserves to reflect an increase in expected credit losses, primarily related to franchise receivables.

(4) Includes impairments resulting from the remeasurement of assets utilizing projected future cash flows revised for then current economic conditions and the closure of certain restaurants.

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

________________

(1) Includes the write-off of value-added tax credits during 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.

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

(4) Includes additional reserves to reflect an increase in expected credit losses, primarily related to franchise receivables.

(5) Includes impairments resulting from the remeasurement of assets utilizing projected future cash flows revised for then current economic conditions, restructuring charges and the closure of certain restaurants.

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

Revenue Recognition

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

THIRTEEN WEEKS ENDED

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 27, 2021 JUNE 28, 2020 JUNE 27, 2021 JUNE 28, 2020

Restaurant sales $ 1,055,227 $ 576,261 $ 2,034,678 $ 1,572,498

1 unchanged sentence

Franchise revenue 12,221 1,951 19,010 11,500

Other revenue 1,233 2,551

Other revenues (1) 9,918 247 11,151 2,798

Total Franchise and other revenues 22,139 2,198 30,161 14,298

Total revenues $ 1,077,366 $ 578,459 $ 2,064,839 $ 1,586,796

________________

(1) During the thirteen and twenty-six weeks ended June 27, 2021, the Company recognized $ 6.3 million of other revenues in connection with favorable court rulings in Brazil regarding the calculation methodology and taxable base of Program of Social Integration (“PIS”) and Contribution for the Financing of Social Security (“COFINS”) taxes.

The amount recognized as a result of the favorable court rulings primarily represents refundable PIS and COFINS taxes for prior years, including accrued interest, and will be recovered by offsetting future PIS and COFINS taxes due.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(UNAUDITED) - Continued

The following table includes disaggregation of Restaurant sales and Franchise revenue, by restaurant concept and major international market, for the periods indicated:

The following tables include disaggregation of Restaurant sales and franchise revenue, by restaurant concept and major international market, for the periods indicated:

THIRTEEN WEEKS ENDED

MARCH 28, 2021 MARCH 29, 2020

JUNE 27, 2021 JUNE 28, 2020

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

10 unchanged sentences

Total $ 1,055,227 $ 12,221 $ 576,261 $ 1,951

TWENTY-SIX WEEKS ENDED

JUNE 27, 2021 JUNE 28, 2020

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

Outback Steakhouse $ 1,126,291 $ 11,374 $ 877,238 $ 6,677

Carrabba’s Italian Grill 329,094 1,282 240,613 468

Bonefish Grill 276,010 304 198,816 140

Fleming’s Prime Steakhouse & Wine Bar 154,412 — 102,116 —

Other 4,545 — 2,873 —

total 1,890,352 12,960 1,421,656 7,285

International

Outback Steakhouse Brazil 104,158 — 115,593 —

Other (1) 40,168 6,050 35,249 4,215

International total 144,326 6,050 150,842 4,215

Total $ 2,034,678 $ 19,010 $ 1,572,498 $ 11,500

________________

(1) Brazil Restaurant sales 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.

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

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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) MARCH 28, 2021 DECEMBER 27, 2020

(dollars in thousands) JUNE 27, 2021 DECEMBER 27, 2020

Other current assets, net

8 unchanged sentences

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

THIRTEEN WEEKS ENDED

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 27, 2021 JUNE 28, 2020 JUNE 27, 2021 JUNE 28, 2020

Balance, beginning of period $ 13,502 $ 13,049 $ 19,300 $ 18,554

3 unchanged sentences

Balance, end of period $ 12,548 $ 13,624 $ 12,548 $ 13,624

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

THIRTEEN WEEKS ENDED

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 27, 2021 JUNE 28, 2020 JUNE 27, 2021 JUNE 28, 2020

Balance, beginning of period $ 306,075 $ 277,518 $ 373,048 $ 358,757

3 unchanged sentences

Balance, end of period $ 293,955 $ 279,973 $ 293,955 $ 279,973

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

Impairments and Exit Costs

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

THIRTEEN WEEKS ENDED

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 27, 2021 JUNE 28, 2020 JUNE 27, 2021 JUNE 28, 2020

Impairment losses

9 unchanged sentences

________________

and international impairment and closure charges for the thirteen weeks ended March 29, 2020 primarily relate to the COVID-19 pandemic.

and international impairment and closure charges for the thirteen and twenty-six weeks ended June 28, 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 thirteen weeks ended March 29, 2020.

(3) Corporate impairment charges for the thirteen weeks ended March 29, 2020 primarily relate to transformational initiatives.

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

(3) Corporate impairment charges for the twenty-six weeks ended June 28, 2020 primarily relate to transformational initiatives.

COVID-19 Restructuring - During the thirteen and twenty-six weeks ended June 28, 2020, the Company recognized pre-tax asset impairments and closure charges 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 Income (Loss) for the periods indicated (dollars in thousands):

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) CLASSIFICATION THIRTEEN AND TWENTY-SIX WEEKS ENDED

DESCRIPTION JUNE 28, 2020

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

Lease right-of-use asset impairments and closing costs Provision for impaired assets and restaurant closings 3,920

Severance and other expenses General and administrative 1,160

The remaining impairment and closure charges during the periods presented resulted primarily from locations identified for relocation or closure.

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

The Company’s 2021 assessment was qualitative and its 2020 assessment was quantitative.

In connection with these assessments, the Company did no t record any impairment charges.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

Accrued Facility Closure and Other Costs Rollforward - The following table is a rollforward of the Company’s closed facility lease liabilities and other accrued costs associated with the closure and restructuring initiatives, for the period indicated:

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 28, 2021

TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 27, 2021

Balance, beginning of the period $ 12,879

4 unchanged sentences

________________

(1) As of March 28, 2021, the Company had exit-related accruals related to certain closure and restructuring initiatives of $ 3.8 million recorded in Accrued and other current liabilities and $ 8.0 million recorded in Non-current operating lease liabilities on its Consolidated Balance Sheet.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

(1) As of June 27, 2021, the Company had exit-related accruals related to certain closure and restructuring initiatives of $ 3.6 million recorded in Accrued and other current liabilities and $ 6.7 million recorded in Non-current operating lease liabilities on its Consolidated Balance Sheet.

Earnings (Loss) Per Share

4 unchanged sentences

In connection with the offering of the 2025 Notes, the Company entered into the Convertible Note Hedge Transactions and Warrant Transactions described in Note 10 - Convertible Senior Notes.

However, the Convertible Note Hedge Transactions are not considered when calculating dilutive shares given its impact is anti-dilutive.

However, the Convertible Note Hedge Transactions are not considered when calculating dilutive shares given their impact is anti-dilutive.

The impact of the Convertible Note Hedge Transactions would offset the dilutive impact of the shares underlying the 2025 Notes.

1 unchanged sentence

See Note 10 - Convertible Senior Notes for additional information regarding the 2025 Notes, Convertible Note Hedge Transactions and Warrant Transactions .

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

THIRTEEN WEEKS ENDED

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(in thousands, except per share data) JUNE 27, 2021 JUNE 28, 2020 JUNE 27, 2021 JUNE 28, 2020

Net income (loss) attributable to Bloomin’ Brands

15 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 thirteen weeks ended March 29, 2020.

See Note 12 - Stockholders’ Equity for additional details.

(2) Adjustment relates to the 2025 Notes weighted for the portion of the period prior to the Company’s election under the 2025 Notes indenture to settle the principal portion of its 2025 Notes in cash.

(2) Adjustment for interest related to the 2025 Notes weighted for the portion of the period prior to the Company’s election under the 2025 Notes indenture to settle the principal portion of its 2025 Notes in cash.

Effective with the Company’s election, there will be no further numerator adjustments for interest or denominator adjustments for shares required to settle the principal portion.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

(3) Due to the Company’s net loss during the thirteen and twenty-six weeks ended June 28, 2020, dilutive excess shares, if applicable, and warrants were excluded from the computation of diluted earnings per share as their effect would be antidilutive.

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

THIRTEEN WEEKS ENDED

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(shares in thousands) JUNE 27, 2021 JUNE 28, 2020 JUNE 27, 2021 JUNE 28, 2020

Stock options — 5,352 682 5,009

1 unchanged sentence

Nonvested performance-based share units 465 624 448 578

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

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 27, 2021 JUNE 28, 2020 JUNE 27, 2021 JUNE 28, 2020

Stock options $ 469 $ 1,038 $ 1,334 $ 1,870

2 unchanged sentences

$ 9,751 $ 5,071 $ 14,451 $ 8,285

In February 2021, the Company granted 0.3 million performance-based share units (“PSUs”) subject to final payout modification by a Relative Total Shareholder Return (“Relative TSR”) modifier.

These PSUs maintain a three-year cliff vesting period and the underlying adjusted earnings per share performance metric can range from zero to 200 % of the annual target grant.

The grants additionally included a Relative TSR modifier to the final payout outcome, which can adjust the payout by 75 %, 100 % or 125 % of the achieved performance metric, with the overall payout capped at 200 % of the annual target grant.

The Relative TSR is measured by comparing the Company’s Relative TSR to the constituents of the S&P 1500 Restaurants index.

________________

(1) The thirteen and twenty-six weeks ended June 27, 2021 includes a cumulative life-to-date adjustment for PSUs granted in fiscal years 2019, 2020 and 2021 based on revised Company performance projections of performance criteria set forth in the award agreements.

In February 2021, the Company granted 0.3 million performance-based share units (“PSUs”).

These PSUs maintain a three-year cliff vesting period and the underlying adjusted diluted earnings per share performance metric can range from zero to 200 % of the annual target grant.

The grants additionally included a Relative Total Shareholder Return (“Relative TSR”) modifier to the final payout outcome, which can adjust the payout by 75 %, 100 % or 125 % of the achieved performance metric, with the overall payout capped at 200 % of the annual target grant.

The Relative TSR is measured by comparing the Company’s Relative TSR to that of the constituents of the S&P 1500 Restaurants index.

The fair value of PSUs granted was estimated using the Monte Carlo simulation model.

1 unchanged sentence

Assumptions used in the Monte Carlo simulation model and the grant date fair value of PSUs granted were as follows for the period indicated:

THIRTEEN WEEKS ENDED

MARCH 28, 2021

TWENTY-SIX WEEKS ENDED

JUNE 27, 2021

Risk-free interest rate (1) 0.20 %

6 unchanged sentences

(3) Represents a 14.3 % premium above the per share value of the Company’s common stock as of the grant date.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

The following represents unrecognized stock-based compensation expense and the remaining weighted-average vesting period as of March 28, 2021:

The following represents unrecognized stock-based compensation expense and the remaining weighted-average vesting period as of June 27, 2021:

UNRECOGNIZED COMPENSATION EXPENSE

3 unchanged sentences

Performance-based share units $ 24,264 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) MARCH 28, 2021 DECEMBER 27, 2020

(dollars in thousands) JUNE 27, 2021 DECEMBER 27, 2020

Prepaid expenses $ 22,668 $ 12,148

11 unchanged sentences

Accrued and other current liabilities consisted of the following as of the periods indicated:

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

(dollars in thousands) JUNE 27, 2021 DECEMBER 27, 2020

Accrued rent and current operating lease liabilities $ 184,486 $ 192,369

4 unchanged sentences

________________

(1) During the thirteen weeks ended March 28, 2021, the Company reclassified $ 27.3 million of payroll taxes deferred under the Coronavirus, Aid, Relief and Economic Security Act (“CARES Act”) to current.

(2) During the thirteen weeks ended March 28, 2021, sales tax payable increased $ 9.2 million due to increased sales during the period.

(1) During the twenty-six weeks ended June 27, 2021, the Company reclassified $ 27.3 million of payroll taxes deferred under the Coronavirus, Aid, Relief and Economic Security Act (“CARES Act”) to current.

(2) During the twenty-six weeks ended June 27, 2021, sales tax payable and income tax payable increased by $ 8.7 million and $ 6.4 million, respectively, due to increased sales and pre-tax income during the period.

BLOOMIN’ BRANDS, INC.

3 unchanged sentences

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

MARCH 28, 2021 DECEMBER 27, 2020

JUNE 27, 2021 DECEMBER 27, 2020

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

3 unchanged sentences

Total Senior Secured Credit Facility 334,000 —

Former Credit Facility:

Term loan A (1) — 425,000 2.88 %

Revolving credit facility (1) — 447,000 2.88 %

Total Former Credit Facility — 872,000

2025 Notes (2) 230,000 5.00 % 230,000 5.00 %

2029 Notes 300,000 5.13 % —

Finance lease liabilities 1,794 2,405

8 unchanged sentences

(3) In connection with the adoption of ASU No.

2020-06, debt discount of $ 59.9 million related to the 2025 Notes was de-recognized and $ 2.1 million of equity issuance costs were reclassified as debt issuance costs during the thirteen weeks ended March 28, 2021.

As of March 28, 2021 and December 27, 2020, the Company was in compliance with its debt covenants.

2029 Notes - Subsequent to March 28, 2021, the Company and its wholly-owned subsidiary OSI Restaurant Partners, LLC (“OSI”), as co-issuers, issued $ 300.0 million aggregate principal amount of senior unsecured notes due 2029 (the “2029 Notes”).

2029 Notes - On April 16, 2021, the Company and its wholly-owned subsidiary OSI Restaurant Partners, LLC (“OSI”), as co-issuers, issued $ 300.0 million aggregate principal amount of senior unsecured notes due 2029 (the “2029 Notes”).

The 2029 Notes were issued pursuant to an Indenture, dated April 16, 2021 (the “Indenture”), by and among the Company, the guarantors named therein, and Wells Fargo Bank, National Association, as trustee.

The 2029 Notes will be guaranteed by each of the Company’s existing and future domestic restricted subsidiaries (other than OSI) that are guarantors or borrowers under its New Senior Secured Credit Facilities (as defined below) or certain other indebtedness.

The 2029 Notes are guaranteed by each of the Company’s existing and future domestic restricted subsidiaries (other than OSI) that are guarantors or borrowers under its Senior Secured Credit Facility (as defined below) or certain other indebtedness.

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

6 unchanged sentences

make certain investments;

create restrictions on the ability of the Company’s restricted subsidiaries to pay dividends or make other payments to the Company;

create restrictions on the ability of the Company’s restricted

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

subsidiaries to pay dividends or make other payments to the Company;

create certain liens;

2 unchanged sentences

enter into certain transactions with the Company’s affiliates;

and designate subsidiaries

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

as unrestricted subsidiaries.

These covenants are subject to a number of important exceptions and qualifications as set forth in the Indenture.

and designate subsidiaries as unrestricted subsidiaries.

These covenants are subject to a number of exceptions and qualifications as set forth in the Indenture.

The Indenture contains customary events of default, including, without limitation, failure to make required payments, failure to comply with certain agreements or covenants, cross-acceleration to certain other indebtedness in excess of specified amounts, certain events of bankruptcy and insolvency, and failure to pay certain judgments.

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

Second Amended and Restated Credit Agreement - On April 16, 2021, the Company and OSI, as co-borrowers, entered into the Second Amended and Restated Credit Agreement (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”).

The New Senior Secured Credit Facility matures on April 16, 2026 and replaces the Company’s prior senior secured financing of up to $ 1.5 billion (the “Senior Secured Credit Facility”).

The commitments under the New Senior Secured Credit Facility may be increased in an aggregate principal amount of up to:

The net proceeds from the 2029 Notes offering were approximately $ 294.5 million, after deducting the initial purchaser’s discount and the Company’s offering expenses.

The net proceeds were used to repay a portion of the Company’s outstanding Term loan A and revolving credit facility in conjunction with the refinancing of its Former Credit Facility.

The Senior Secured Credit Facility matures on April 16, 2026 and replaced the Company’s prior senior secured financing of up to $ 1.5 billion (the “Former Credit Facility”).

The commitments under the Senior Secured Credit Facility may be increased in an aggregate principal amount of up to:

(i) $ 425.0 million or (ii) at the Company’s option, up to an unlimited amount of incremental facilities, so long as the Consolidated Senior Secured Net Leverage Ratio (“CSSNLR”), as defined in the Second Amended and Restated Credit Agreement, is no more than 3.00 to 1.00 as of the last day of the most recent period of four consecutive fiscal quarters ended.

8 unchanged sentences

Fees on letters of credit and daily unused availability under the revolving credit facility will be 150 to 250 basis points and 25 to 40 basis points, respectively.

The following is a summary of required amortization payments for the Term loan A (dollars in thousands):

The following is a summary of required quarterly amortization payments for the Term loan A (dollars in thousands):

SCHEDULED QUARTERLY PAYMENT DATES TERM LOAN A

2 unchanged sentences

September 28, 2025 and December 28, 2025 $ 5,000

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

The Company is required to prepay outstanding amounts under these loans with 50 % of its 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 the Company’s CSSNLR and year end results.

The Senior Secured Credit Facility contains mandatory prepayment requirements for the Term loan A, including the requirement that the Company prepay outstanding amounts under these loans with 50 % of its annual excess cash flow, as defined in the Second Amended and Restated Credit Agreement, commencing with the fiscal year ending

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(UNAUDITED) - Continued

December 25, 2022.

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

Total Net Leverage Ratio (“TNLR”) is the ratio of Consolidated Total Debt (Current portion of long-term debt and Long-term debt, net of cash, excluding the 2025 Notes) to Consolidated EBITDA (earnings before interest, taxes, depreciation and amortization and certain other adjustments as defined in the Second Amended and Restated Credit Agreement).

16 unchanged sentences

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

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

As of June 27, 2021 and December 27, 2020, the Company was in compliance with its debt covenants.

Following is a summary of principal payments of the Company’s total consolidated debt outstanding as of the period indicated:

(dollars in thousands) JUNE 27, 2021

Year 1 $ 11,051

Year 2 10,250

Year 3 10,188

Year 4 245,175

Year 5 289,130

Thereafter 300,000

Total payments 865,794

unamortized debt discount and issuance costs ( 15,576 )

finance lease interest ( 155 )

Total principal payments $ 850,063

Deferred Financing Fees - During the thirteen weeks ended June 27, 2021, t he Company deferred $ 5.5 million and $ 5.9 million of financing costs incurred in connection with the 2029 Notes and Second Amended Credit Agreement, respectively.

Deferred financing fees of $ 3.7 million associated with the revolving credit facility portion of the Second Amended Credit Agreement were recorded in Other assets, net and all other deferred financing fees were recorded in Long-term debt, net.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

Convertible Senior Notes

Convertible Senior Notes - In May 2020, the Company completed a $ 230.0 million principal amount private offering of 5.00 % convertible senior notes due in 2025.

2025 Notes - In May 2020, the Company completed a $ 230.0 million principal amount private offering of 5.00 % convertible senior notes due in 2025.

The 2025 Notes are governed by the terms of an indenture between the Company and Wells Fargo Bank, National Association, as the Trustee.

8 unchanged sentences

(ii) during the five consecutive business days immediately after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of 2025 Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price per share of the Company’s common stock and the conversion rate on each such trading day;

(iii) upon the occurrence of specified corporate

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

events or distributions on the Company’s common stock;

(iii) upon the occurrence of specified corporate events or distributions on the Company’s common stock;

(iv) if the Company calls the 2025 Notes for redemption, and (v) at any time from, and including November 1, 2024 until the close of business on the second scheduled trading day immediately before the maturity date.

4 unchanged sentences

Holders of 2025 Notes who convert their 2025 Notes in connection with a notice of a redemption or a make-whole fundamental change may be entitled to a premium in the form of an increase in the conversion rate of the 2025 Notes .

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

The following table includes the outstanding principal amount and carrying value of the 2025 Notes as of the periods indicated:

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

(dollars in thousands) JUNE 27, 2021 DECEMBER 27, 2020

Long-term debt, net

6 unchanged sentences

(1) In connection with the adoption of ASU No.

2020-06, debt discount and the equity component of the 2025 Notes were de-recognized and $ 2.1 million of issuance costs that were previously allocated to the equity component were reclassified as debt issuance costs during the thirteen weeks ended March 28, 2021.

(2) Debt issuance costs are amortized to Interest expense, net using the effective interest method over the expected life of the 2025 Notes.

The effective rate of the 2025 Notes over their expected life is 5.85 %.

Following is a summary of interest expense for the 2025 Notes, by component, for the period indicated:

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 28, 2021

Following is a summary of interest expense for the 2025 Notes, by component, for the periods indicated:

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 27, 2021 JUNE 27, 2021

Coupon interest $ 2,875 $ 5,750

1 unchanged sentence

Total interest expense $ 3,261 $ 6,517

Based on the daily closing prices of the Company’s stock during the quarter ended March 28, 2021, holders of the 2025 Notes are eligible to convert their 2025 Notes during the second quarter of 2021.

Based on the daily closing prices of the Company’s stock during the quarter ended June 27, 2021, holders of the 2025 Notes are eligible to convert their 2025 Notes during the third quarter of 2021.

In February 2021, the Company provided the trustee of the 2025 Notes notice of its irrevocable election under the 2025 Notes indenture to settle the principal portion of the 2025 Notes upon conversion in cash and any excess in shares.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

Convertible Note Hedge and Warrant Transactions - In connection with the offering of the 2025 Notes , the Company entered into convertible note hedge transactions (the “Convertible Note Hedge Transactions”) with certain of the initial purchasers of the 2025 Notes and/or their respective affiliates and other financial institutions (in this capacity, the “Hedge Counterparties”).

6 unchanged sentences

The Warrant Transactions are exercisable on the expiration dates included in the related forms of confirmation.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

Other Long-term Liabilities, Net

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

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

(dollars in thousands) JUNE 27, 2021 DECEMBER 27, 2020

Accrued insurance liability $ 32,704 $ 32,128

4 unchanged sentences

_______________

(1) During the thirteen weeks ended March 28, 2021, the Company reclassified $ 27.3 million of payroll taxes deferred under the CARES Act to current.

(1) During the twenty-six weeks ended June 27, 2021, the Company reclassified $ 27.3 million of payroll taxes deferred under the CARES Act to current.

(2) The Company’s hedge liability decreased by $ 11.8 million during the twenty-six weeks ended June 27, 2021 primarily from the termination of certain interest rate swaps.

See Note 13 - Derivative Instruments and Hedging Activities for additional details.

Stockholders’ Equity

1 unchanged sentence

During the thirteen weeks ended March 29, 2020, the Company exercised a call option to purchase all outstanding Abbraccio Shares for $ 1.0 million and recorded a reduction to Accumulated deficit and an increase in Net loss applicable to common stockholders of $ 3.5 million for the consideration paid in excess of the Abbraccio Shares’ carrying value.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

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

(dollars in thousands) JUNE 27, 2021 DECEMBER 27, 2020

Foreign currency translation adjustment $ ( 185,443 ) $ ( 188,883 )

1 unchanged sentence

Accumulated other comprehensive loss $ ( 202,188 ) $ ( 211,446 )

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

THIRTEEN WEEKS ENDED

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

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 27, 2021 JUNE 28, 2020 JUNE 27, 2021 JUNE 28, 2020

Foreign currency translation adjustment $ 10,015 $ ( 29,146 ) $ 3,440 $ ( 36,443 )

1 unchanged sentence

Reclassification of adjustments for loss on derivatives included in Net income (loss), net of tax (2) 1,514 2,585 4,517 3,981

Amortization of terminated interest rate swaps, net of tax 1,471 — 1,471 —

Total unrealized gain (loss) on derivatives, net of tax 2,857 1,029 5,818 ( 10,911 )

Other comprehensive loss attributable to Bloomin’ Brands $ ( 3,614 ) $ ( 19,237 )

Other comprehensive income (loss) attributable to Bloomin’ Brands $ 12,872 $ ( 28,117 ) $ 9,258 $ ( 47,354 )

________________

(1) Unrealized loss on derivatives is net of tax of $ 4.6 million for the thirteen weeks ended March 29, 2020.

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

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

See Note 13 - Derivative Instruments and Hedging Activities for the tax impact of reclassifications.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

Derivative Instruments and Hedging Activities

2 unchanged sentences

Under the terms of the swap agreements, the Company pays a weighted-average fixed rate of 3.04 % on the notional amount and receives payments from the counterparty based on the one-month LIBOR rate.

In connection with the refinancing of its Former Credit Facility, on April 16, 2021 the Company terminated its variable-to-fixed interest rate swap agreements with seven counterparties having an aggregate notional amount of $ 275.0 million for a payment of approximately $ 13.3 million, including accrued interest.

Following these terminations, $ 13.4 million of unrealized losses related to the terminated swap agreements included in AOCL will be amortized on a straight-line basis to Interest expense, net over the remaining original term of the terminated swaps.

The Company’s swap agreements have been designated and qualify as cash flow hedges, are recognized on its Consolidated Balance Sheets at fair value and are classified based on the instruments’ maturity dates.

As of March 28, 2021, the Company estimated $ 10.4 million will be reclassified to Interest expense, net over the next 12 fiscal months.

As of June 27, 2021, the Company estimated $ 16.0 million will be reclassified to Interest expense, net over the next 12 fiscal months, including interest expense related to the terminated swap agreements discussed above.

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

(dollars in thousands) MARCH 28, 2021 DECEMBER 27, 2020 CONSOLIDATED BALANCE SHEET CLASSIFICATION

(dollars in thousands) JUNE 27, 2021 DECEMBER 27, 2020 CONSOLIDATED BALANCE SHEET CLASSIFICATION

Interest rate swaps - liability $ 7,437 $ 14,855 Accrued and other current liabilities

4 unchanged sentences

(1) See Note 15 - Fair Value Measurements for fair value discussion of the interest rate swaps.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

THIRTEEN WEEKS ENDED

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 27, 2021 JUNE 28, 2020 JUNE 27, 2021 JUNE 28, 2020

Interest rate swap expense recognized in Interest expense, net $ ( 2,038 ) $ ( 3,482 ) $ ( 6,082 ) $ ( 5,362 )

4 unchanged sentences

The Company continually assesses the creditworthiness of its counterparties.

As of March 28, 2021, all counterparties to the interest rate swaps had performed in accordance with their contractual obligations.

As of June 27, 2021, 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 March 28, 2021 and December 27, 2020, 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 $ 28.2 million and $ 32.2 million, respectively.

As of March 28, 2021 and December 27, 2020, the Company has not posted any collateral related to these agreements.

If the Company had breached any of these provisions as of March 28, 2021 and December 27, 2020, it could have been required to settle its obligations under the agreements at their termination value of $ 28.2 million and $ 32.2 million, respectively.

In connection with the refinancing of its Senior Secured Credit Facility, on April 16, 2021 the Company terminated its variable-to-fixed interest rate swap agreements with seven counterparties having an aggregate notional amount of $ 275.0 million for a payment of approximately $ 13.3 million, including accrued interest.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(UNAUDITED) - Continued

As of June 27, 2021 and December 27, 2020, 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 $ 12.0 million and $ 32.2 million, respectively.

As of June 27, 2021 and December 27, 2020, the Company has not posted any collateral related to these agreements.

If the Company had breached any of these provisions as of June 27, 2021 and December 27, 2020, it could have been required to settle its obligations under the agreements at their termination value of $ 12.0 million and $ 32.2 million, respectively.

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 MARCH 28, 2021 DECEMBER 27, 2020

(dollars in thousands) CONSOLIDATED BALANCE SHEET CLASSIFICATION JUNE 27, 2021 DECEMBER 27, 2020

Operating lease right-of-use assets Operating lease right-of-use assets $ 1,161,650 $ 1,172,910

7 unchanged sentences

________________

(1) Net of accumulated amortization of $ 2.6 million and $ 2.3 million as of March 28, 2021 and December 27, 2020, respectively.

(2) Excludes COVID-19-related deferred rent accruals of $ 7.6 million and $ 12.8 million as of March 28, 2021 and December 27, 2020, respectively, and accrued contingent percentage rent of $ 3.8 million and $ 2.7 million, as of March 28, 2021 and December 27, 2020, respectively.

(3) Excludes COVID-19-related non-current deferred rent accruals of $ 1.0 million and $ 1.2 million as of March 28, 2021 and December 27, 2020, respectively.

(1) Net of accumulated amortization of $ 2.8 million and $ 2.3 million as of June 27, 2021 and December 27, 2020, respectively.

(2) Excludes COVID-19-related deferred rent accruals of $ 3.4 million and $ 12.8 million as of June 27, 2021 and December 27, 2020, respectively, and accrued contingent percentage rent of $ 3.3 million and $ 2.7 million, as of June 27, 2021 and December 27, 2020, respectively.

(3) Excludes COVID-19-related non-current deferred rent accruals of $ 0.8 million and $ 1.2 million as of June 27, 2021 and December 27, 2020, respectively.

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

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

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

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) CLASSIFICATION THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 27, 2021 JUNE 28, 2020 JUNE 27, 2021 JUNE 28, 2020

Operating leases (1) Other restaurant operating $ 43,763 $ 42,776 $ 88,555 $ 88,658

6 unchanged sentences

________________

(1) Excludes rent expense for office facilities and Company-owned closed or subleased properties of $ 3.5 million and $ 3.6 million for the thirteen weeks ended March 28, 2021 and March 29, 2020, 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 March 28, 2021 and March 29, 2020 which is included in Food and beverage costs.

(2) Includes COVID-19-related rent abatement for the thirteen weeks ended March 28, 2021 .

(3) Excludes rental income from Company-owned properties of $ 0.1 million and $ 0.2 million for the thirteen weeks ended March 28, 2021 and March 29, 2020, 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:

THIRTEEN WEEKS ENDED

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

Cash flows from operating activities:

Cash paid for amounts included in the measurement of operating lease liabilities $ 52,717 $ 48,492

(1) Excludes rent expense for office facilities and Company-owned closed or subleased properties of $ 3.2 million and $ 3.3 million for the thirteen weeks ended June 27, 2021 and June 28, 2020, respectively, and $ 6.7 million and $ 6.9 million for the twenty-six weeks ended June 27, 2021 and June 28, 2020, 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 27, 2021 and June 28, 2020 and $ 0.6 million for the twenty-six weeks ended June 27, 2021 and June 28, 2020, which is included in Food and beverage costs.

(2) Includes COVID-19-related rent abatement for all periods presented.

(3) Excludes immaterial rental income from Company-owned properties.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(UNAUDITED) - Continued

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 27, 2021 JUNE 28, 2020

Cash flows from operating activities:

Cash paid for amounts included in the measurement of operating lease liabilities $ 105,323 $ 75,688

Fair Value Measurements

5 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:

MARCH 28, 2021 DECEMBER 27, 2020

JUNE 27, 2021 DECEMBER 27, 2020

(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 March 28, 2021 and December 27, 2020, the Company has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives.

Fair Value Measurements on a Nonrecurring Basis - Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to property, fixtures and equipment, operating lease right-of-use assets, goodwill and other intangible assets, which are remeasured when carrying value exceeds fair value.

Carrying value after

As of June 27, 2021 and December 27, 2020, the Company has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(UNAUDITED) - Continued

impairment approximates fair value.

The following table summarizes the Company’s assets measured at fair value by hierarchy level on a nonrecurring basis, for the period indicated:

Carrying value after impairment approximates fair value.

The following table summarizes the Company’s assets measured at fair value by hierarchy level on a nonrecurring basis, for the periods indicated:

THIRTEEN WEEKS ENDED

MARCH 29, 2020

(dollars in thousands) REMAINING CARRYING VALUE TOTAL IMPAIRMENT

Assets held for sale (1)

JUNE 27, 2021 JUNE 28, 2020

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

Operating lease right-of-use assets (1) $ 5,687 $ 962 $ 32,404 $ 4,028

55,644 19,563

Property, fixtures and equipment (2) 8,192 4,460 9,992 19,595

Goodwill and other assets (3) — — 748 295

$ 13,879 $ 5,422 $ 43,144 $ 23,918

TWENTY-SIX WEEKS ENDED

JUNE 27, 2021 JUNE 28, 2020

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

Assets held for sale (1) $ — $ — $ 1,182 $ 75

Operating lease right-of-use assets (1) 7,651 1,512 85,537 23,591

Property, fixtures and equipment (2) 8,928 6,052 28,390 37,993

Goodwill and other assets (3) — — 748 2,683

2 unchanged sentences

(1) Asset carrying values measured using discounted cash flow models (Level 3).

(2) Carrying values measured using Level 2 inputs to estimate fair value totaled $ 2.5 million.

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

All other assets were valued using Level 3 inputs.

1 unchanged sentence

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

See Note 4 - Impairments and Exit Costs for information regarding impairment charges resulting from the fair value measurement performed on a nonrecurring basis during the thirteen weeks ended March 29, 2020.

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.

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

As a result, the Company has determined that the majority of the inputs used to value its long-lived assets held and used are unobservable inputs that fall within Level 3 of the fair value hierarchy.

3 unchanged sentences

In order to calculate the present value of those future cash flows, the Company discounted cash flow estimates at its weighted-average cost of capital applicable to the country in which the measured assets reside.

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 for the period indicated:

THIRTEEN WEEKS ENDED

UNOBSERVABLE INPUTS MARCH 29, 2020

Weighted-average cost of capital 10.4 %

Long-term growth rate 1.5 % to 2.0 %

Interim Disclosures about Fair Value of Financial Instruments - The Company’s non-derivative financial instruments consist of cash equivalents, accounts receivable, accounts payable and current and long-term debt.

The fair values of cash equivalents, accounts receivable and accounts payable approximate their carrying amounts reported on its Consolidated Balance Sheets due to their short duration.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(UNAUDITED) - Continued

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

UNOBSERVABLE INPUTS JUNE 28, 2020 JUNE 28, 2020

Weighted-average cost of capital 10.9 % 10.4 % to 10.9 %

Long-term growth rate 1.5 % to 2.0 % 1.5 % to 2.0 %

The fair values of cash equivalents, accounts receivable and accounts payable approximate their carrying amounts reported on its Consolidated Balance Sheets due to their short duration.

Debt is carried at amortized cost;

1 unchanged sentence

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

MARCH 28, 2021 DECEMBER 27, 2020

JUNE 27, 2021 DECEMBER 27, 2020

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

3 unchanged sentences

Revolving credit facility $ 134,000 $ 128,850 $ — $ —

Former Credit Facility:

Term loan A $ — $ — $ 425,000 $ 412,250

Revolving credit facility $ — $ — $ 447,000 $ 419,612

2025 Notes $ 230,000 $ 559,450 $ 230,000 $ 413,818

2029 Notes $ 300,000 $ 307,503 $ — $ —

Allowance for Expected Credit Losses

The following table is a rollforward of the Company’s trade receivables allowance for expected credit losses for the periods indicated:

THIRTEEN WEEKS ENDED

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 27, 2021 JUNE 28, 2020 JUNE 27, 2021 JUNE 28, 2020

Allowance for expected credit losses, beginning of period $ 3,997 $ 4,551 $ 4,095 $ 199

4 unchanged sentences

Allowance for expected credit losses, end of period $ 3,989 $ 4,566 $ 3,989 $ 4,566

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.

________________

(1) In March 2020, the Company fully reserved substantially all of its outstanding franchise receivables in response to the economic impact of the COVID-19 pandemic.

2 unchanged sentences

See Note 18 - Commitments and Contingencies for details regarding these lease guarantees.

THIRTEEN WEEKS ENDED

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

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 27, 2021 JUNE 28, 2020 JUNE 27, 2021 JUNE 28, 2020

Income (loss) before provision (benefit) for income taxes $ 107,574 $ ( 128,207 ) $ 183,965 $ ( 182,276 )

1 unchanged sentence

Effective income tax rate 21.1 % 27.9 % 15.9 % 30.4 %

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.

The effective income tax rate for the thirteen and twenty-six weeks ended June 27, 2021 decreased by 6.8 and 14.5 percentage points, respectively, as compared to the thirteen and twenty-six weeks ended June 28, 2020.

These decreases were 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.

As of December 27, 2020, the Company had $ 155.3 million in general business tax credits carryforwards, which have a 20-year carryforward period and are utilized on a first-in, first-out basis.

The Company expects to increase its general business credit carryforwards in 2021 by approximately $ 15 million to $ 25 million.

The Company currently

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

expects to utilize these tax credit carryforwards within a 10 year period.

The Company does not expect to increase its general business credit carryforwards in 2021 and currently expects to utilize these tax credit carryforwards within a 10-year period.

However, the Company’s ability to utilize these tax credits could be adversely impacted by, among other items, a future ownership change as defined under Section 382 of the Internal Revenue Code.

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

The effective income tax rate for the thirteen weeks ended March 28, 2021 was lower than the statutory rate primarily due to the benefit of FICA tax credits on certain employees’ tips.

The effective income tax rate for the thirteen and twenty-six weeks ended June 27, 2021 was lower than the statutory rate primarily due to the benefit of FICA tax credits on certain employees’ tips.

Commitments and Contingencies

Litigation and Other Matters - The Company had $ 4.0 million and $ 4.6 million of liabilities recorded for various legal matters as of March 28, 2021 and December 27, 2020, 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.

In the opinion of management, the amount of ultimate liability with respect to those actions will not have a material adverse impact on the Company’s financial position or results of operations and cash flows.

Litigation and Other Matters - 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.

A reserve is recorded when it is both:

(i) probable that a loss has occurred and (ii) the amount of loss can be reasonably estimated.

There may be instances in which an exposure to loss exceeds the recorded reserve.

The Company evaluates, on a quarterly basis, developments in legal proceedings that could cause an increase or decrease in the amount of the reserve that has been previously recorded, or a revision to the disclosed estimated range of possible losses, as applicable.

The Company’s legal proceedings range from cases brought by a single plaintiff to threatened class actions with many putative class members.

While some matters pending against the Company specify the damages claimed by the plaintiff or class, many seek an unspecified amount of damages or are at very early stages of the legal process.

Even when the amount of damages claimed against the Company are stated, the claimed amount may be exaggerated, unsupported or unrelated to possible outcomes, and as such, are not meaningful indicators of the Company’s potential liability or financial exposure.

As a result, some matters have not yet progressed sufficiently through discovery or development of important factual information and legal issues to enable the Company to estimate an amount of loss or a range of possible loss.

The Company recorded reserves of $ 5.9 million and $ 4.6 million for certain of its outstanding legal proceedings as of June 27, 2021 and December 27, 2020, respectively, within Accrued and other current liabilities and Other long-term liabilities on its Consolidated Balance Sheets.

While the Company believes that additional losses beyond these accruals are reasonably possible, it cannot estimate a possible loss contingency or range of reasonably possible loss contingencies beyond these accruals.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

The Company intends to defend itself in legal matters.

Some of these matters may be covered, at least in part, by insurance if they exceed specified retention or deductible amounts.

However, it is possible that claims may be denied by the Company’s insurance carriers, the Company may be required by its insurance carriers to contribute to the payment of claims, and the Company’s insurance coverage may not continue to be available on acceptable terms or in sufficient amounts.

The Company records receivables from third party insurers when recovery has been determined to be probable.

The Company believes that the ultimate determination of liability in connection with legal claims pending against the Company, if any, in excess of amounts already provided for such matters in the consolidated financial statements, will not have a material adverse effect on its business, annual results of operations, liquidity or financial position.

However, it is possible that the Company’s business, results of operations, liquidity, or financial condition could be materially affected in a particular future reporting period by the unfavorable resolution of one or more matters or contingencies during such period.

Lease Guarantees - The Company assigned its interest, and is contingently liable, under certain real estate leases.

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

As of March 28, 2021, the undiscounted payments that the Company could be required to make in the event of non-payment by the primary lessees was approximately $ 27.3 million.

The present value of these potential payments discounted at the Company’s incremental borrowing rate as of March 28, 2021 was approximately $ 21.6 million.

As of June 27, 2021, the undiscounted payments that the Company could be required to make in the event of non-payment by the primary lessees was approximately $ 27.9 million.

The present value of these potential payments discounted at the Company’s incremental borrowing rate as of June 27, 2021 was approximately $ 22.9 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.

As of March 28, 2021, the Company’s recorded contingent lease liability was $ 9.3 million.

As of June 27, 2021, the Company’s recorded contingent lease liability was $ 10.3 million.

Segment Reporting

18 unchanged sentences

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

Excluded from Income from

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.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(UNAUDITED) - Continued

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.

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

THIRTEEN WEEKS ENDED

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 27, 2021 JUNE 28, 2020 JUNE 27, 2021 JUNE 28, 2020

Total revenues

2 unchanged sentences

Total revenues $ 1,077,366 $ 578,459 $ 2,064,839 $ 1,586,796

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

THIRTEEN WEEKS ENDED

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

Segment income from operations

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 27, 2021 JUNE 28, 2020 JUNE 27, 2021 JUNE 28, 2020

Segment income (loss) from operations

$ 165,297 $ ( 62,921 ) $ 287,032 $ ( 51,542 )

International 2,470 ( 17,070 ) 6,007 ( 10,283 )

Total segment income from operations 125,272 18,166

Total segment income (loss) from operations 167,767 ( 79,991 ) 293,039 ( 61,825 )

Unallocated corporate operating expense (1) ( 43,130 ) ( 31,921 ) ( 77,404 ) ( 91,655 )

Total income (loss) from operations 124,637 ( 111,912 ) 215,635 ( 153,480 )

Loss on extinguishment and modification of debt ( 2,073 ) ( 237 ) ( 2,073 ) ( 237 )

Other income (expense), net — 581 21 ( 212 )

2 unchanged sentences

____________________

(1) The thirteen weeks ended March 29, 2020 includes $ 22.2 million of charges that were not allocated to the Company’s segments related to its transformational initiatives, primarily recorded within General and administrative expense and Provision for impaired assets and restaurant closings.

(1) The thirteen and twenty-six weeks ended June 28, 2020 include $ 2.4 million and $ 24.6 million, respectively, of charges that were not allocated to the Company’s segments related to its transformational initiatives, primarily recorded within General and administrative expense and Provision for impaired assets and restaurant closings.

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

THIRTEEN WEEKS ENDED

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 27, 2021 JUNE 28, 2020 JUNE 27, 2021 JUNE 28, 2020

Depreciation and amortization

4 unchanged sentences

The following table is a summary of capital expenditures by segment for the periods indicated:

THIRTEEN WEEKS ENDED

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

TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 27, 2021 JUNE 28, 2020

Capital expenditures

4 unchanged sentences

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

Subsequent Events

On August 2, 2021, wholly-owned subsidiaries of the Company entered into the Purchase and Sale of Royalty Payment Stream and Termination of Royalty Agreement (the “Royalty Termination Agreement”) with the Carrabba’s Italian Grill founders (the “Carrabba’s Founders”), pursuant to which the Company’s obligation to pay future royalties on U.S.

Carrabba’s Italian Grill restaurant sales and lump sum royalty fees on Carrabba’s Italian Grill restaurants opened outside the U.S.

was terminated.

Upon execution of the Royalty Termination Agreement, the Company made a cash payment of $ 61.9 million to the Carrabba’s Founders, which was recorded in Other restaurant operating expense in its Consolidated Statements of Operations and Comprehensive Income (Loss) during the thirteen weeks ended September 26, 2021.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

1 unchanged sentence

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