What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-08-05 compared with 2021-04-30 · 281 added, 224 removed, 399 unchanged (56% of the section changed)

41 unchanged sentences

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

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

As of June 27, 2021, we owned and operated 1,163 restaurants and franchised 321 restaurants across 47 states, Guam and 19 countries.

We have four founder-inspired concepts:

1 unchanged sentence

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.

Our financial highlights for the thirteen weeks ended June 27, 2021 (“second quarter of 2021”) include the following:

combined and Outback Steakhouse comparable restaurant sales of 84.6% and 65.8%, respectively, relative to the second quarter of 2020, and 12.1% and 11.3%, respectively, relative to the second quarter of 2019;

• Increase in Total revenues of 86.2% in the second quarter of 2021, as compared to the second quarter of 2020, and 5.4% as compared to the second quarter of 2019;

• Restaurant-level operating margin of 20.3% for the second quarter of 2021, as compared to 2.1% and 15.0% for the second quarters of 2020 and 2019, respectively;

• Income (loss) from operations of $124.6 million in the second quarter of 2021, as compared to $(111.9) million and $43.5 million in the second quarters of 2020 and 2019, respectively;

• Diluted earnings (loss) per share attributable to common stockholders of $0.75 in the second quarter of 2021 as compared to $(1.05) and $0.32 in the second quarters of 2020 and 2019, respectively.

Key Performance Indicators

5 unchanged sentences

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 and Comprehensive Income (Loss).

The following

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

The following categories of our revenue and operating expenses are not included in restaurant-level

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

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:

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.

5 unchanged sentences

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

• Adjusted restaurant-level operating margin, Adjusted income (loss) from operations, Adjusted net income (loss) and Adjusted diluted earnings (loss) 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.

9 unchanged sentences

Number of restaurants (at end of the period):

MARCH 28, 2021 MARCH 29, 2020

JUNE 27, 2021 JUNE 28, 2020

Outback Steakhouse

23 unchanged sentences

____________________

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.

Other Company-owned included four and three fast-casual Aussie Grill locations as of June 27, 2021 and June 28, 2020, respectively.

International Franchised Other included three and two fast-casual Aussie Grill locations as of June 27, 2021 and June 28, 2020, respectively.

International Company-owned Other included two and one fast-casual Aussie Grill locations as of June 27, 2021 and June 28, 2020, respectively.

(2) The restaurant counts for Brazil are reported as of May 31, 2021 and 2020, respectively, to correspond with the balance sheet dates of this subsidiary.

(3) Franchised Outback Steakhouse - South Korea included 32 and 10 international dark kitchens that offer delivery only as of June 27, 2021 and June 28, 2020, respectively.

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

4 unchanged sentences

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

Restaurant sales 97.9 % 99.6 % 98.5 % 99.1 %

10 unchanged sentences

Income (loss) from operations 11.6 (19.3) 10.4 (9.7)

Loss on extinguishment and modification of debt (0.2) (*) (0.1) (*)

Other income (expense), net — 0.1 * (*)

3 unchanged sentences

Net income (loss) 7.9 (16.0) 7.5 (8.0)

net income attributable to noncontrolling interests 0.1 *

net income (loss) attributable to noncontrolling interests 0.2 (0.1) 0.2 *

Net income (loss) attributable to Bloomin’ Brands

4 unchanged sentences

RESTAURANT SALES

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

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

(dollars in millions) THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

For the periods ended June 28, 2020 $ 576.3 $ 1,572.5

Comparable restaurant sales 473.5 479.6

Restaurant openings 13.6 26.6

Restaurant closures (7.2) (26.0)

Effect of foreign currency translation (1.0) (18.0)

Restaurant openings 12.6

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.

For the periods ended June 27, 2021 $ 1,055.2 $ 2,034.7

The increase in Restaurant sales during the thirteen weeks ended June 27, 2021 was primarily due to:

(i) higher comparable restaurant sales from in-restaurant dining and strong retention of off-premises sales and (ii) the opening of 32 new restaurants not included in our comparable restaurant sales base.

The increase in Restaurant sales was partially offset by the closure of 34 restaurants since March 29, 2020.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

The increase in Restaurant sales during the twenty-six weeks ended June 27, 2021 was primarily due to:

(i) higher comparable restaurant sales from in-restaurant dining and strong retention of off-premises sales and (ii) the opening of 35 new restaurants not included in our comparable restaurant sales base.

The increase in Restaurant sales was partially offset by the closure of 39 restaurants since December 29, 2019 and the effect of foreign currency translation of the Brazilian Real relative to the U.S.

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

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

Average restaurant unit volumes (weekly):

13 unchanged sentences

____________________

(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.

(1) Translated at average exchange rates of 5.45 and 5.15 for the thirteen weeks ended June 27, 2021 and June 28, 2020, respectively, and 5.36 and 4.39 for the twenty-six weeks ended June 27, 2021 and June 28, 2020, respectively.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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

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 TWENTY-SIX WEEKS ENDED

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

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

Year over year percentage change:

26 unchanged sentences

____________________

(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.

(1) Represents comparable restaurant sales, traffic and average check per person increases (decreases) 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.

1 unchanged sentence

Includes trading day impact from calendar period reporting.

(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.

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

3 unchanged sentences

Franchise and other revenues

THIRTEEN WEEKS ENDED

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

Franchise revenues (1) $ 12.2 $ 2.0 $ 19.0 $ 11.5

3 unchanged sentences

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

Franchise revenues increased during the thirteen and twenty-six weeks ended June 27, 2021 primarily due to higher franchise sales partially offset by a reduction in the royalty and advertising fee percentages resulting from our December 2020 resolution agreement with Out West, our largest U.S.

(2) During the thirteen and twenty-six weeks ended June 27, 2021, we recognized $6.3 million of other revenues in connection with favorable court rulings in Brazil regarding the calculation methodology and taxable base of PIS and 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.

COSTS AND EXPENSES

Food and beverage costs

THIRTEEN WEEKS ENDED

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in millions) JUNE 27, 2021 JUNE 28, 2020 Change JUNE 27, 2021 JUNE 28, 2020 Change

Food and beverage costs $ 312.1 $ 180.8 $ 604.0 $ 500.5

% of Restaurant sales 29.6 % 31.4 % (1.8) % 29.7 % 31.8 % (2.1) %

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.

Food and beverage costs decreased as a percentage of Restaurant sales during the thirteen weeks ended June 27, 2021 as compared to the thirteen weeks ended June 28, 2020 primarily due to:

(i) 1.2% from increases in average check per person, primarily driven by reduced discounting and changes in product mix, (ii) 0.2% from the impact of certain cost savings initiatives and (iii) 0.2% from reduced commodity costs, primarily due to vendor rebates.

Food and beverage costs decreased as a percentage of Restaurant sales during the twenty-six weeks ended June 27, 2021 as compared to the twenty-six weeks ended June 28, 2020 primarily due to:

(i) 1.1% from increases in average check per person, primarily driven by reduced discounting and changes in product mix, (ii) 0.6% from the impact of certain cost savings initiatives and (iii) 0.4% from inventory obsolescence and spoilage costs during 2020 associated with the COVID-19 pandemic.

Labor and other related expenses

THIRTEEN WEEKS ENDED

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in millions) JUNE 27, 2021 JUNE 28, 2020 Change JUNE 27, 2021 JUNE 28, 2020 Change

Labor and other related $ 295.0 $ 205.5 $ 569.6 $ 514.8

% of Restaurant sales 28.0 % 35.7 % (7.7) % 28.0 % 32.7 % (4.7) %

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.

Labor and other related expenses decreased as a percentage of Restaurant sales during the thirteen weeks ended June 27, 2021 as compared to the thirteen weeks ended June 28, 2020 primarily due to 11.4% from leveraging increased restaurant sales.

This decrease was partially offset by an increase as a percentage of Restaurant sales of:

(i) 2.4% from the 2020 benefit of employee retention credits from relief pay, (ii) 0.8% from higher management bonus and (iii) 0.2% from wage rate increases.

Labor and other related expenses decreased as a percentage of Restaurant sales during the twenty-six weeks ended June 27, 2021 as compared to the twenty-six weeks ended June 28, 2020 primarily due to 4.3% from leveraging increased restaurant sales and 1.6% from the 2020 impact of net relief pay.

These decreases were partially offset by

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

increases as a percentage of Restaurant sales of 0.8% from higher management bonus and 0.3% from wage rate increases.

Other restaurant operating expenses

THIRTEEN WEEKS ENDED

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in millions) JUNE 27, 2021 JUNE 28, 2020 Change JUNE 27, 2021 JUNE 28, 2020 Change

Other restaurant operating $ 233.5 $ 177.8 $ 462.7 $ 424.4

% of Restaurant sales 22.1 % 30.9 % (8.8) % 22.7 % 27.0 % (4.3) %

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.

Other restaurant operating expenses decreased as a percentage of Restaurant sales during the thirteen weeks ended June 27, 2021 as compared to the thirteen weeks ended June 28, 2020 primarily due to:

(i) 7.8% from leveraging increased restaurant sales, (ii) 3.3% from a decrease in off-premises related costs and (iii) 1.0% from lower advertising expense.

These decreases were partially offset by increases as a percentage of Restaurant sales of 3.0% from higher operating and utilities expense and 0.3% from higher insurance costs.

Other restaurant operating expenses decreased as a percentage of Restaurant sales during the twenty-six weeks ended June 27, 2021 as compared to the twenty-six weeks ended June 28, 2020 primarily due to:

(i) 2.9% from leveraging increased restaurant sales, (ii) 1.7% from lower advertising expense and (iii) 0.3% from a decrease in off-premises related costs.

These decreases were partially offset by an increase as a percentage of Restaurant sales of 0.6% from higher operating and utilities expense.

Subsequent to June 27, 2021, we entered into the Royalty Termination Agreement and made a cash payment of $61.9 million to the Carrabba’s Founders.

See Note 20 - Subsequent Events for additional details regarding the Royalty Termination Agreement.

We recorded Carrabba’s Italian Grill royalty expense of $2.7 million, $3.8 million and $6.6 million during the twenty-six weeks ended June 27, 2021, fiscal year 2020 and fiscal year 2019, respectively.

Depreciation and amortization

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in millions) JUNE 27, 2021 JUNE 28, 2020 Change JUNE 27, 2021 JUNE 28, 2020 Change

Depreciation and amortization $ 40.5 $ 45.8 $ (5.3) $ 81.8 $ 94.1 $ (12.3)

Depreciation and amortization expense decreased during the thirteen weeks ended June 27, 2021 as compared to the thirteen weeks ended June 28, 2020 primarily due to impairment and decreased capital expenditures.

Depreciation and amortization expense decreased during the twenty-six weeks ended June 27, 2021 as compared to the twenty-six weeks ended June 28, 2020 primarily due to impairment, decreased capital expenditures and the effect of foreign currency translation.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

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 period indicated:

(dollars in millions) THIRTEEN WEEKS ENDED

For the period ended March 29, 2020 $ 84.8

Severance (8.5)

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

(dollars in millions) THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

For the periods ended June 28, 2020 $ 55.5 $ 140.3

Employee stock-based compensation 4.7 6.2

Incentive compensation 4.0 3.9

Deferred compensation 2.2 2.4

Expected credit losses and contingent lease liabilities 1.1 (6.5)

Transformational costs (5.3)

Travel and entertainment 0.9 (2.4)

Compensation, benefits and payroll tax (2.5)

For the period ended March 28, 2021 $ 57.2

Severance (1.0) (9.5)

Transformational costs (2.3) (7.6)

Other 1.4 (3.1)

For the periods ended June 27, 2021 $ 66.5 $ 123.7

Provision for impaired assets and restaurant closings

THIRTEEN WEEKS ENDED

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in millions) JUNE 27, 2021 JUNE 28, 2020 Change JUNE 27, 2021 JUNE 28, 2020 Change

Provision for impaired assets and restaurant closings $ 5.2 $ 25.0 $ (19.8) $ 7.4 $ 66.3 $ (58.9)

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.

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.

During the thirteen and twenty-six weeks ended June 28, 2020, we recognized asset impairment and closure charges of $24.8 million and $56.5 million, respectively, within the U.S.

segment, and $0.3 million and $3.6 million, respectively, within the international segment, primarily related to the COVID-19 pandemic.

Included in the amount for the thirteen and twenty-six weeks ended June 28, 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 related to transformational initiatives of $6.3 million during the twenty-six weeks ended June 28, 2020, which were not allocated to our operating segments.

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

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

Income (loss) from operations

THIRTEEN WEEKS ENDED

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in millions) JUNE 27, 2021 JUNE 28, 2020 Change JUNE 27, 2021 JUNE 28, 2020 Change

Income (loss) from operations $ 124.6 $ (111.9) $ 236.5 $ 215.6 $ (153.5) $ 369.1

% of Total revenues 11.6 % (19.3) % 30.9 % 10.4 % (9.7) % 20.1 %

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.

Income from operations generated during the thirteen weeks ended June 27, 2021 as compared to Loss from operations during the thirteen weeks ended June 28, 2020 was primarily due to:

(i) an increase in comparable restaurant sales, (ii) COVID-19 pandemic related asset impairment and closure charges during 2020, (iii) a decrease in off-premises related costs, (iv) lower advertising expense and (v) favorable court rulings in Brazil related to value-added taxes recorded in other revenues.

These increases were partially offset by:

(i) higher operating and

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

utilities expense, (ii) the 2020 benefit of employee retention credits from relief pay, (iii) higher incentive compensation and (iv) higher management bonus.

Income from operations generated during the twenty-six weeks ended June 27, 2021 as compared to Loss from operations during the twenty-six weeks ended June 28, 2020 was primarily due to:

(i) an increase in comparable restaurant sales, (ii) COVID-19 pandemic related charges during 2020, (iii) lower advertising expense, (iv) the 2020 impact of net relief pay, (v) the impact of restructuring and transformational initiatives during 2020 and (vi) the impact of certain cost savings initiatives.

These increases were partially offset by additional:

(i) management bonus, (ii) incentive compensation and (iii) operating and utilities expense.

Interest expense, net

THIRTEEN WEEKS ENDED

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in millions) JUNE 27, 2021 JUNE 28, 2020 Change JUNE 27, 2021 JUNE 28, 2020 Change

Interest expense, net $ 15.0 $ 16.6 $ (1.6) $ 29.6 $ 28.3 $ 1.3

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

The decrease in Interest expense, net for the thirteen weeks ended June 27, 2021 as compared to the thirteen weeks ended June 28, 2020 was primarily due to lower revolver borrowings and lower interest rates on our unhedged variable rate debt, partially offset by interest expense from our 2029 Notes issued in April 2021.

The increase in Interest expense, net for the twenty-six weeks ended June 27, 2021 as compared to the twenty-six weeks ended June 28, 2020 was primarily due to interest expense from our 2025 Notes issued in May 2020 and our 2029 Notes issued in April 2021, partially offset by lower revolver borrowings and lower interest rates on our unhedged variable rate debt.

Provision (benefit) for income taxes

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

Effective income tax rate 21.1 % 27.9 % (6.8) % 15.9 % 30.4 % (14.5) %

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.

SEGMENT PERFORMANCE

3 unchanged sentences

and international.

segment includes all restaurants operating in the U.S.

segment includes all restaurants operating

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

while restaurants operating outside the U.S.

11 unchanged sentences

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

Excluded from Income from operations for U.S.

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

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

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

During the thirteen and twenty-six weeks ended June 28, 2020, we recorded $2.4 million and $24.6 million, respectively, 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.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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.

Refer to Note 19 - Segment Reporting of the Notes to Consolidated Financial Statements for reconciliations of segment income (loss) 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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

Restaurant sales $ 990,293 $ 536,767 $ 1,890,352 $ 1,421,656

2 unchanged sentences

Restaurant-level operating margin 21.7 % 3.2 % 20.5 % 8.4 %

Income from operations $ 121,735 $ 11,379

Operating income margin 13.5 % 1.3 %

Income (loss) from operations $ 165,297 $ (62,921) $ 287,032 $ (51,542)

Operating income (loss) margin 16.5 % (11.7) % 15.0 % (3.6) %

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Restaurant sales

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

segment Restaurant sales for the period indicated:

(dollars in millions) THIRTEEN WEEKS ENDED

For the period ended March 29, 2020 $ 884.9

segment Restaurant sales for the periods indicated:

(dollars in millions) THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

For the periods ended June 28, 2020 $ 536.8 $ 1,421.7

Comparable restaurant sales 453.0 481.4

1 unchanged sentence

Restaurant closures (6.9) (25.4)

For the period ended March 28, 2021 $ 900.1

For the periods ended June 27, 2021 $ 990.3 $ 1,890.4

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.

Restaurant sales during the thirteen weeks ended June 27, 2021 was primarily due to higher comparable restaurant sales from in-restaurant dining and strong retention of off-premises sales and the opening of 11 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

Restaurant sales was partially offset by the closure of 33 restaurants since March 29, 2020.

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.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Restaurant sales during the twenty-six weeks ended June 27, 2021 was primarily due to higher comparable restaurant sales from in-restaurant dining and strong retention of off-premises sales and the opening of 11 new restaurants not included in our comparable restaurant sales base.

The increase in U.S.

Restaurant sales was partially offset by the closure of 38 restaurants since December 29, 2019.

Income (loss) from operations

Income from operations generated during the thirteen weeks ended June 27, 2021 as compared to Loss from operations during the thirteen weeks ended June 28, 2020 was primarily due to:

These increases were partially offset by:

(i) higher operating and utilities expense, (ii) the 2020 benefit of employee retention credits from relief pay, (iii) higher management bonus and (iv) higher incentive compensation.

Income from operations generated during the twenty-six weeks ended June 27, 2021 as compared to Loss from operations during the twenty-six weeks ended June 28, 2020 was primarily due to:

(i) an increase in comparable restaurant sales, (ii) COVID-19 pandemic related charges during 2020, (iii) lower advertising expense, (iv) net relief pay in 2020 and (v) the impact of certain cost savings initiatives.

These increases were partially offset by higher management bonus and higher operating and utilities expense.

International Segment

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 $ 64,934 $ 39,494 $ 144,326 $ 150,842

2 unchanged sentences

Restaurant-level operating margin 3.2 % (21.8) % 9.3 % 8.0 %

Income from operations $ 3,537 $ 6,787

Operating income margin 4.3 % 6.0 %

Income (loss) from operations $ 2,470 $ (17,070) $ 6,007 $ (10,283)

Operating income (loss) margin 3.3 % (41.3) % 3.8 % (6.6) %

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Restaurant sales

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

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

(dollars in millions) THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

For the periods ended June 28, 2020 $ 39.5 $ 150.8

Comparable restaurant sales 20.5 (1.8)

Restaurant openings 6.2 13.9

Effect of foreign currency translation (1.0) (18.0)

Restaurant closures (0.3) (0.6)

Restaurant openings 7.4

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.

For the periods ended June 27, 2021 $ 64.9 $ 144.3

The increase in international Restaurant sales during the thirteen weeks ended June 27, 2021 was primarily due to higher comparable restaurant sales principally attributable to the impact of the COVID-19 pandemic on fiscal year 2020 international Restaurant sales and the opening of 21 new restaurants not included in our comparable restaurant sales base.

The decrease in international Restaurant sales during the twenty-six weeks ended June 27, 2021 was primarily due to the effect of foreign currency translation of the Brazilian Real relative to the U.S.

dollar partially offset by the opening of 24 new restaurants not included in our comparable restaurant sales base.

Income (loss) from operations

International Income from operations generated during the thirteen weeks ended June 27, 2021, as compared to Loss from operations during the thirteen weeks ended June 28, 2020, was primarily due to:

(i) higher restaurant sales due to the reopening of restaurant dining rooms and increases in average check per person, (ii) favorable court rulings in Brazil related to value-added taxes recorded in other revenues and (iii) a decrease in off-premises related costs.

These increases were partially offset by additional:

(i) utilities, rent and operating expense, (ii) higher labor costs and (iii) commodity inflation.

International Income from operations generated during the twenty-six weeks ended June 27, 2021, as compared to Loss from operations during the twenty-six weeks ended June 28, 2020, was primarily due to:

(i) higher restaurant sales from increases in average check per person and the reopening of restaurant dining rooms, (ii) lower labor costs and (iii) favorable court rulings in Brazil related to value-added taxes recorded in other revenues.

These increases were partially offset by additional:

(i) commodity inflation, (ii) utilities and operating expense and (iii) incremental off-premises related costs.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Non-GAAP Financial Measures

2 unchanged sentences

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

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.

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 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

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

Outback Steakhouse $ 119 $ 58 $ 211 $ 174

4 unchanged sentences

Outback Steakhouse-South Korea 72 56 146 110

Other 27 4 51 26

International total 99 60 197 136

5 unchanged sentences

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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

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

Consolidated THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

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

6 unchanged sentences

Restaurant-level operating margin 20.3 % 2.1 % 19.6 % 8.4 %

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 %

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

Income (loss) from operations $ 165,297 $ (62,921) $ 287,032 $ (51,542)

Operating income (loss) margin 16.5 % (11.7) % 15.0 % (3.6) %

Franchise and other revenues 12,765 313 17,624 9,921

4 unchanged sentences

Restaurant-level operating margin 21.7 % 3.2 % 20.5 % 8.4 %

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 %

International THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

Income (loss) from operations $ 2,470 $ (17,070) $ 6,007 $ (10,283)

Operating income (loss) margin 3.3 % (41.3) % 3.8 % (6.6) %

Franchise and other revenues 9,374 1,885 12,537 4,377

2 unchanged sentences

Provision for impaired assets and restaurant closings (708) 296 (1) 3,640

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

Restaurant-level operating income (loss) $ 2,069 $ (8,629) $ 13,475 $ 12,024

Restaurant-level operating margin 3.2 % (21.8) % 9.3 % 8.0 %

2 unchanged sentences

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:

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

THIRTEEN WEEKS ENDED

MARCH 28, 2021 MARCH 29, 2020

JUNE 27, 2021 JUNE 28, 2020

REPORTED ADJUSTED REPORTED ADJUSTED (1)

4 unchanged sentences

Restaurant-level operating margin 20.3 % 20.3 % 2.1 % 2.7 %

TWENTY-SIX WEEKS ENDED

JUNE 27, 2021 JUNE 28, 2020

REPORTED ADJUSTED REPORTED ADJUSTED (1)

Restaurant sales 100.0 % 100.0 % 100.0 % 100.0 %

Food and beverage costs 29.7 % 29.7 % 31.8 % 31.4 %

Labor and other related 28.0 % 28.0 % 32.7 % 32.7 %

Other restaurant operating 22.7 % 22.7 % 27.0 % 27.0 %

Restaurant-level operating margin 19.6 % 19.6 % 8.4 % 8.9 %

_________________

(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)

(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 (loss) from operations, Adjusted net income (loss) and Adjusted diluted earnings (loss) per share table below for the periods indicated:

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

COVID-19 related costs (1) $ (3.7) $ (9.9)

Restaurant relocations, asset impairments and closing costs — 2.7

$ (3.7) $ (7.2)

(1) Adjustments recorded in Food and beverage costs.

_________________

(1) Includes $1.2 million and $7.3 million of adjustments for the thirteen and twenty-six weeks ended June 28, 2020, respectively, recorded in Food and beverage costs.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

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

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

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

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

Operating income (loss) margin 11.6 % (19.3) % 10.4 % (9.7) %

Legal and other matters (1) (6,337) — (6,337) 178

COVID-19-related costs (2) — 30,342 — 79,218

Severance and other transformational costs (3) — 2,415 — 24,647

Restaurant relocations and related costs (3) — 592

Legal and contingent matters — 178

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

Restaurant relocations, asset impairments and closing costs (4) — — — (2,205)

Total income (loss) from operations adjustments (6,337) 32,757 (6,337) 101,838

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

Adjusted operating income margin 9.2 % 2.7 %

Adjusted income (loss) from operations $ 118,300 $ (79,155) $ 209,298 $ (51,642)

Adjusted operating income (loss) margin 11.0 % (13.7) % 10.2 % (3.3) %

Diluted net income (loss) attributable to common stockholders $ 82,545 $ (92,256) $ 152,098 $ (130,363)

Convertible senior notes if-converted method interest adjustment, net of tax (5) — — 691 —

Net income (loss) attributable to common stockholders 82,545 (92,256) 151,407 (130,363)

Income (loss) from operations adjustments (6,337) 32,757 (6,337) 101,838

Loss on extinguishment and modification of debt 2,073 — 2,073 —

Amortization of debt discount (6) — 1,379 — 1,379

Total adjustments, before income taxes (4,264) 34,136 (4,264) 103,217

2 unchanged sentences

Net adjustments (3,021) 27,662 (3,021) 78,244

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

Adjusted net income (loss) $ 79,524 $ (64,594) $ 148,386 $ (52,119)

Diluted earnings (loss) per share attributable to common stockholders (9) $ 0.75 $ (1.05) $ 1.38 $ (1.49)

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

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

Adjusted diluted earnings (loss) per share (9)(10) $ 0.81 $ (0.74) $ 1.53 $ (0.60)

Diluted weighted average common shares outstanding (9) 109,805 87,496 110,223 87,312

1 unchanged sentence

_________________

(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.

(1) The thirteen and twenty-six weeks ended June 27, 2021 includes the recognition of recoverable PIS and COFINS taxes, including accrued interest, within other revenues as a result of favorable court rulings in Brazil during the second quarter of 2021.

(2) Costs incurred in connection with 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.

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.

(3) 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.

(4) Includes asset impairment charges and accelerated depreciation incurred in connection with our relocation program and a lease termination gain of $2.8 million.

(5) Adjustment for interest expense related 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 our 2025 Notes in cash.

The calculation of adjusted diluted earnings per share excludes 2025 Notes interest adjustment.

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

See Note 10 - Convertible Senior Notes of the Notes to Consolidated Financial Statements for details.

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

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

(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.

1 unchanged sentence

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

(9) 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 and twenty-six weeks ended June 28, 2020.

(10) For the twenty-six weeks ended June 27, 2021, adjusted diluted weighted average common shares outstanding was calculated assuming our February 2021 election to settle the principal portion of the 2025 Notes in cash was in effect for the entire period.

For the thirteen and twenty-six weeks ended June 27, 2021, adjusted diluted weighted average common shares outstanding was calculated excluding the dilutive effect of 11,231 and 10,442 shares, respectively, to be issued upon conversion of the 2025 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.

Liquidity and Capital Resources

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.

Cash and Cash Equivalents - As of June 27, 2021, we had $101.3 million in cash and cash equivalents, of which $35.0 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 March 28, 2021, we had aggregate accumulated foreign earnings of approximately $35.9 million.

As of June 27, 2021, we had aggregate accumulated foreign earnings of approximately $38.8 million.

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

3 unchanged sentences

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

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.

Capital Expenditures - We estimate that our capital expenditures will total approxim a tely $140 million to $150 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 raw material constraints and restrictions imposed by our borrowing arrangements.

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:

SENIOR SECURED CREDIT FACILITY TOTAL CREDIT FACILITIES

(dollars in thousands) TERM LOAN A REVOLVING FACILITY 2025 NOTES

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

SENIOR SECURED CREDIT FACILITY FORMER CREDIT FACILITY TOTAL CREDIT FACILITIES

(dollars in thousands) TERM LOAN A REVOLVING FACILITY TERM LOAN A REVOLVING FACILITY 2025 NOTES 2029 NOTES

Balance as of December 27, 2020 $ — $ — $ 425,000 $ 447,000 $ 230,000 $ — $ 1,102,000

1 unchanged sentence

2021 payments — (137,000) (425,000) (462,000) — — (1,024,000)

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

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.

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.

Balance as of June 27, 2021 $ 200,000 $ 134,000 $ — $ — $ 230,000 $ 300,000 $ 864,000

Weighted-average interest rate, as of June 27, 2021 2.59 % 2.59 % 5.00 % 5.13 %

Principal maturity date April 2026 April 2026 May 2025 April 2029

As of June 27, 2021, we had $645.3 million in available unused borrowing capacity under our revolving credit facility, net of letters of credit of $20.7 million.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

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.

On August 2, 2021, we made a cash payment of $61.9 million to the Carrabba’s Founders in connection with the Royalty Termination Agreement detailed in Note 20 - Subsequent Events.

This cash payment was funded primarily by borrowings on our revolving credit facility and the remainder from cash on hand.

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.

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

The net proceeds were used to repay a portion of our outstanding Term loan A and revolving credit facility in conjunction with the refinancing of our Former 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 Senior Secured Credit Facility matures on April 16, 2026 and replaced our Former Credit Facility 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:

7 unchanged sentences

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.

Our Senior Secured Credit Facility contains mandatory prepayment requirements for Term loan A, including the requirement that we 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.

Other than the annual required minimum amortization premiums of $10.0 million, we do not anticipate any other payments will be required through June 26, 2022.

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

As of June 27, 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.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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:

THIRTEEN WEEKS ENDED

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

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

TWENTY-SIX WEEKS ENDED

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

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

Net cash used in investing activities (42,625) (48,001)

1 unchanged sentence

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

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.

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

Operating activities - Net cash provided by operating activities during the twenty-six weeks ended June 27, 2021, as compared to net cash used in operating activities during the twenty-six weeks ended June 28, 2020, was primarily due to:

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

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.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

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.

(i) timing of collections of gift card receivables, (ii) deferral of payroll tax payments in 2020 as a result of the CARES Act, (iii) lower utilization of inventory on hand and (iv) cash paid to terminate interest rate swap agreements.

Investing activities - The decrease in net cash used in investing activities during the twenty-six weeks ended June 27, 2021 as compared to the twenty-six weeks ended June 28, 2020 was primarily due to higher proceeds from the disposal of property, fixtures and equipment and lower capital expenditures.

Financing activities - Net cash used in financing activities during the twenty-six weeks ended June 27, 2021, as compared to net cash provided by financing activities during the twenty-six weeks ended June 28, 2020, was primarily due to:

(i) net repayments on our revolving credit facility during 2021 as compared to net borrowings during 2020, (ii) proceeds from the issuance of the 2025 Notes and related warrants during 2020 and (iii) net repayment of our Term loan A in conjunction with the refinance of our Senior Secured Credit Facility.

These decreases were partially offset by:

(i) proceeds from the issuance of the 2029 Notes, (ii) premium payments for Convertible Note Hedge Transactions during 2020, (iii) payment of cash dividends on our common stock during 2020 and (iv) 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) MARCH 28, 2021 DECEMBER 27, 2020

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

Current assets $ 247,063 $ 323,854

2 unchanged sentences

Working capital (deficit) includes:

(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).

(i) Unearned revenue primarily from unredeemed gift cards of $303.0 million and $381.6 million as of June 27, 2021 and December 27, 2020, respectively, and (ii) current operating lease liabilities of $177.8 million and $176.8 million as of June 27, 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

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

We operate successfully with negative working capital because cash collected on restaurant sales are typically received before payment is due on our current liabilities, and our inventory turnover rates require relatively low investment in inventories.

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 $24.2 million and $28.1 million as of March 28, 2021 and December 27, 2020, respectively.

Deferred Compensation Programs - The deferred compensation obligation due to managing and chef partners was $21.3 million and $28.1 million as of June 27, 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 March 28, 2021.

The obligation for managing and chef partners’ deferred compensation was fully funded as of June 27, 2021.

Other Compensation Programs - Certain U.S.

1 unchanged sentence

DIVIDENDS AND SHARE REPURCHASES

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

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

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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

Following is a summary of our dividends and share repurchases from fiscal year 2015 through June 27, 2021:

(dollars in thousands) DIVIDENDS PAID SHARE REPURCHASES TOTAL

6 unchanged sentences

First fiscal quarter 2021 — — —

Second fiscal quarter 2021 — — —

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

Recently Issued Financial Accounting Standards

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.

For a description of recently issued Financial Accounting Standards that we adopted during the twenty-six weeks ended June 27, 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