What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-03 compared with 2021-08-05 · 221 added, 210 removed, 470 unchanged (48% of the section changed)

14 unchanged sentences

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

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

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

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

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

(iii) Minimum wage increases, additional mandated employee benefits and fluctuations in the cost and availability of employees;

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

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

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

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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

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

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

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

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

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

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

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

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

As of September 26, 2021, we owned and operated 1,159 restaurants and franchised 325 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 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.

Our financial highlights for the thirteen weeks ended September 26, 2021 (“third quarter of 2021”) include the following:

combined and Outback Steakhouse comparable restaurant sales of 25.5% and 18.3%, respectively, relative to the third quarter of 2020, and 9.5% and 6.0%, respectively, relative to the third quarter of 2019;

• Increase in Total revenues of 31.0%, as compared to the third quarter of 2020, and 4.5%, as compared to the third quarter of 2019;

• A $61.9 million charge to Other restaurant operating expense in connection with the Carrabba’s Italian Grill Royalty Termination Agreement, an impact of 6.2% on restaurant-level operating margin;

• Restaurant-level operating margin of 10.3%, as compared to 10.7% and 12.9% for the third quarters of 2020 and 2019, respectively;

• Income (loss) from operations of $14.8 million, as compared to $(14.3) million and $22.0 million in the third quarters of 2020 and 2019, respectively;

• Diluted earnings (loss) per share attributable to common stockholders of $0.03, as compared to $(0.20) and $0.11 in the third quarters of 2020 and 2019, respectively.

Key Performance Indicators

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• Average restaurant unit volumes — average sales (excluding gift card breakage) per restaurant to measure changes in customer traffic, pricing and development of the brand;

• Comparable restaurant sales — year-over-year comparison of sales volumes (excluding gift card breakage) for Company-owned restaurants that are open 18 months or more in order to remove the impact of new restaurant openings in comparing the operations of existing restaurants;

• Comparable restaurant sales — year-over-year comparison of the change in sales volumes (excluding gift card breakage) for Company-owned restaurants that are open 18 months or more in order to remove the impact of new restaurant openings in comparing the operations of existing restaurants;

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

26 unchanged sentences

Number of restaurants (at end of the period):

JUNE 27, 2021 JUNE 28, 2020

SEPTEMBER 26, 2021 SEPTEMBER 27, 2020

Outback Steakhouse

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____________________

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.

Other Company-owned included four and three fast-casual Aussie Grill locations as of September 26, 2021 and September 27, 2020, respectively.

International Franchised Other included three Aussie Grill locations as of September 26, 2021 and September 27, 2020.

International Company-owned Other included two and one Aussie Grill locations as of September 26, 2021 and September 27, 2020, respectively.

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

(3) Franchised Outback Steakhouse - South Korea included 37 and 13 international dark kitchens that offer delivery only as of September 26, 2021 and September 27, 2020, respectively.

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

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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 TWENTY-SIX WEEKS ENDED

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020

Restaurant sales 98.6 % 99.4 % 98.6 % 99.2 %

13 unchanged sentences

Interest expense, net (1.4) (2.4) (1.4) (2.0)

Income (loss) before provision (benefit) for income taxes 10.0 (22.2) 8.9 (11.5)

Provision (benefit) for income taxes 2.1 (6.2) 1.4 (3.5)

Income (loss) before (benefit) provision for income taxes 0.1 (4.2) 6.0 (9.1)

(Benefit) provision for income taxes (0.4) (1.9) 0.8 (3.0)

Net income (loss) 0.5 (2.3) 5.2 (6.1)

7 unchanged sentences

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

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

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

Comparable restaurant sales 218.4 696.1

Restaurant openings 14.0 41.3

Restaurant closures (7.2) (26.0)

Effect of foreign currency translation 2.3 (15.6)

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.

Restaurant closures (4.5) (29.4)

For the periods ended September 26, 2021 $ 996.7 $ 3,031.4

The increase in Restaurant sales during the thirteen weeks ended September 26, 2021 was primarily due to:

(i) higher comparable restaurant sales from in-restaurant dining and strong retention of off-premises sales and (ii) the

BLOOMIN’ BRANDS, INC.

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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:

opening of 31 new restaurants not included in our comparable restaurant sales base.

The increase in Restaurant sales was partially offset by the closure of 15 restaurants since June 26, 2020.

The increase in Restaurant sales during the thirty-nine weeks ended September 26, 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 37 new restaurants not included in our comparable restaurant sales base.

2 unchanged sentences

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020

Average restaurant unit volumes (weekly):

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____________________

(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.

(1) Translated at average exchange rates of 5.15 and 5.34 for the thirteen weeks ended September 26, 2021 and September 27, 2020, respectively, and 5.27 and 4.60 for the thirty-nine weeks ended September 26, 2021 and September 27, 2020, respectively.

BLOOMIN’ BRANDS, INC.

3 unchanged sentences

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020

COMPARABLE TO 2019 (1) COMPARABLE TO 2020 COMPARABLE TO 2019 COMPARABLE TO 2019 (1) COMPARABLE TO 2020 COMPARABLE TO 2019

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Franchise and other revenues

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020

Franchise revenues (1) $ 12.9 $ 4.2 $ 31.9 $ 15.7

3 unchanged sentences

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

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.

Franchise revenues increased during the thirteen and thirty-nine weeks ended September 26, 2021 primarily due to higher franchise sales as a result of the impact of COVID-19 on 2020 franchise sales.

(2) The thirteen and thirty-nine weeks ended September 26, 2021 include an adjustment of $(3.2) million to reduce our initial recorded estimate and net $3.1 million benefit from the recognition of recoverable PIS and COFINS taxes, respectively, within other revenues in connection with favorable court rulings in Brazil regarding the calculation methodology and taxable base for prior years.

COSTS AND EXPENSES

Food and beverage costs

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 CHANGE SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 CHANGE

Food and beverage costs $ 304.3 $ 230.5 $ 908.3 $ 731.0

% of Restaurant sales 30.5 % 30.1 % 0.4 % 30.0 % 31.3 % (1.3) %

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.

Food and beverage costs increased as a percentage of Restaurant sales during the thirteen weeks ended September 26, 2021 as compared to the thirteen weeks ended September 27, 2020 primarily due to 1.0% from commodity inflation partially offset by a decrease as a percentage of Restaurant sales of 0.5% from increases in average check per person including changes in product mix.

Food and beverage costs decreased as a percentage of Restaurant sales during the thirty-nine weeks ended September 26, 2021 as compared to the thirty-nine weeks ended September 27, 2020 primarily due to:

(i) 0.8% from increases in average check per person, primarily driven by reduced discounting, (ii) 0.4% from the impact of certain cost savings initiatives and (iii) 0.3% from inventory obsolescence and spoilage costs during 2020 associated with the COVID-19 pandemic.

These decreases were partially offset by an increase as a percentage of Restaurant sales of 0.2% from commodity inflation.

In 2022, we anticipate approximately 10% commodity inflation.

Labor and other related expenses

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 CHANGE SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 CHANGE

Labor and other related $ 290.2 $ 246.9 $ 859.9 $ 761.7

% of Restaurant sales 29.1 % 32.2 % (3.1) % 28.4 % 32.6 % (4.2) %

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

Labor and other related expenses decreased as a percentage of Restaurant sales during the thirteen weeks ended September 26, 2021 as compared to the thirteen weeks ended September 27, 2020 primarily due to 4.3% from leveraging increased restaurant sales, partially offset by an increase as a percentage of Restaurant sales of 1.1% from wage rate increases.

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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.

Labor and other related expenses decreased as a percentage of Restaurant sales during the thirty-nine weeks ended September 26, 2021 as compared to the thirty-nine weeks ended September 27, 2020 primarily due to 4.4% from leveraging increased restaurant sales and 1.1% from the 2020 impact of net relief pay.

These decreases were partially offset by increases as a percentage of Restaurant sales of 0.6% from wage rate increases and 0.5% from higher management bonus.

In 2022, we anticipate mid-single digit labor cost inflation.

Other restaurant operating expenses

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 CHANGE SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 CHANGE

Other restaurant operating $ 299.8 $ 207.3 $ 762.5 $ 631.7

% of Restaurant sales 30.1 % 27.0 % 3.1 % 25.2 % 27.0 % (1.8) %

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:

During the thirteen weeks ended September 26, 2021, we entered into the Royalty Termination Agreement with the Carrabba’s Founders for $61.9 million in cash.

See Note 19 - Commitments and Contingencies for additional details.

We recorded Carrabba’s Italian Grill royalty expense of $3.0 million during the thirty-nine weeks ended September 26, 2021, and $3.8 million and $6.6 million during fiscal years 2020 and 2019, respectively.

Other restaurant operating expenses increased as a percentage of Restaurant sales during the thirteen weeks ended September 26, 2021 as compared to the thirteen weeks ended September 27, 2020 primarily due to 6.2% from the Carrabba’s Italian Grill royalty termination and 1.2% from higher utilities, rent and operating expense.

These increases were partially offset by decreases as a percentage of Restaurant sales of:

(i) 3.5% from leveraging increased restaurant sales, (ii) 0.6% from lower advertising expense and (iii) 0.4% 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.

Other restaurant operating expenses decreased as a percentage of Restaurant sales during the thirty-nine weeks ended September 26, 2021 as compared to the thirty-nine weeks ended September 27, 2020 primarily due to:

(i) 3.0% from leveraging increased restaurant sales, (ii) 1.3% from lower advertising expense and (iii) 0.3% from a decrease in off-premises related costs.

These decreases were partially offset by increases as a percentage of Restaurant sales of 2.0% from the Carrabba’s Italian Grill royalty termination and 0.6% from higher operating and utilities expense.

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 CHANGE SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 CHANGE

Depreciation and amortization $ 40.8 $ 43.4 $ (2.6) $ 122.6 $ 137.5 $ (14.9)

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.

Depreciation and amortization expense decreased during the thirteen weeks ended September 26, 2021 as compared to the thirteen weeks ended September 27, 2020 primarily due to decreased capital expenditures.

Depreciation and amortization expense decreased during the thirty-nine weeks ended September 26, 2021 as compared to the thirty-nine weeks ended September 27, 2020 primarily due to decreased capital expenditures, impairment and the effect of foreign currency translation.

BLOOMIN’ BRANDS, INC.

4 unchanged sentences

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

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

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

Employee stock-based compensation 2.9 9.1

Incentive compensation 1.8 5.7

Deferred compensation 2.2 2.4

Expected credit losses and contingent lease liabilities 1.1 (6.5)

Transformational costs (1.8) (9.4)

Travel and entertainment (1.1) (3.5)

Severance (1.0) (10.5)

Transformational costs (2.3) (7.6)

Expected credit losses and contingent lease liabilities (0.1) (6.6)

Other 0.8 0.1

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

For the periods ended September 26, 2021 $ 58.9 $ 182.6

Provision for impaired assets and restaurant closings

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 CHANGE SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 CHANGE

Provision for impaired assets and restaurant closings $ 1.6 $ (0.1) $ 1.7 $ 9.0 $ 66.2 $ (57.2)

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.

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

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

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

We also recognized asset impairment charges related to transformational initiatives of $6.3 million during the thirty-nine weeks ended September 27, 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 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 TWENTY-SIX WEEKS ENDED

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 CHANGE SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 CHANGE

Income (loss) from operations $ 14.8 $ (14.3) $ 29.1 $ 230.5 $ (167.7) $ 398.2

% of Total revenues 1.5 % (1.8) % 3.3 % 7.5 % (7.1) % 14.6 %

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.

Income from operations generated during the thirteen weeks ended September 26, 2021 as compared to Loss from operations during the thirteen weeks ended September 27, 2020 was primarily due to higher comparable restaurant sales and lower advertising expense.

These increases were partially offset by:

(i) higher operating and

(i) the Carrabba’s Italian Grill royalty termination, (ii) higher labor costs and commodity inflation and (iii) higher utilities, rent and operating expense.

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.

Income from operations generated during the thirty-nine weeks ended September 26, 2021 as compared to Loss from operations during the thirty-nine weeks ended September 27, 2020 was primarily due to:

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

These increases were partially offset by:

(i) the Carrabba’s Italian Grill royalty termination, (ii) higher labor costs and commodity inflation, (iii) an increase in incentive compensation, (iv) higher operating and utilities expense and (v) higher management bonus.

Interest expense, net

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 CHANGE SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 CHANGE

Interest expense, net $ 14.2 $ 18.3 $ (4.1) $ 43.9 $ 46.6 $ (2.7)

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 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.

The decrease in Interest expense, net for the thirteen weeks ended September 26, 2021 as compared to the thirteen weeks ended September 27, 2020 was primarily due to lower revolver and term loan borrowings and the discontinuance of debt discount amortization related to our 2025 Notes resulting from the adoption of ASU No.

These decreases were partially offset by an increase in interest expense from our 2029 Notes issued in April 2021.

The decrease in Interest expense, net for the thirty-nine weeks ended September 26, 2021 as compared to the thirty-nine weeks ended September 27, 2020 was primarily due to:

(i) lower revolver and term loan borrowings, (ii) the discontinuance of debt discount amortization related to our 2025 Notes resulting from the adoption of ASU No.

2020-06 and (iii) lower interest rates on our unhedged variable rate debt.

These decreases were partially offset by increases in interest expense from our 2025 Notes issued in May 2020 and our 2029 Notes issued in April 2021.

(Benefit) provision for income taxes

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 CHANGE SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 CHANGE

Effective income tax rate (NM) 45.4 % (NM) 13.5 % 32.7 % (19.2) %

________________

NM Not meaningful.

For the thirteen weeks ended September 26, 2021, the benefit for income taxes includes the impact of changes to the estimate of the forecasted full-year effective tax rate relative to prior quarters in 2021.

The benefit of FICA tax credits on certain employees’ tips reduced the effective tax rate as a result of forecasted pre-tax income.

For the thirteen weeks ended September 27, 2020, the benefit of FICA tax credits on certain employees’ tips increased the effective tax rate as a result of forecasted pre-tax book loss.

The effective income tax rate for the thirty-nine weeks ended September 26, 2021 decreased by 19.2 percentage points as compared to the thirty-nine weeks ended September 27, 2020.

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

SEGMENT PERFORMANCE

We consider our restaurant concepts and international markets as operating segments, which reflects how we manage our business, review operating performance and allocate resources.

Resources are allocated and performance is assessed by our CEO, whom we have determined to be our CODM.

We aggregate our operating segments into two reportable segments, U.S.

and international.

segment includes all restaurants operating

Resources are allocated and

BLOOMIN’ BRANDS, INC.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

performance is assessed by our CEO, whom we have determined to be our CODM.

We aggregate our operating segments into two reportable segments, U.S.

and international.

segment includes all restaurants operating in the U.S.

while restaurants operating outside the U.S.

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

During the thirteen and 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.

During the thirteen and thirty-nine weeks ended September 27, 2020, we recorded $4.2 million and $28.8 million, respectively, of pre-tax charges as a part of transformational initiatives.

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.

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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 TWENTY-SIX WEEKS ENDED

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020

Restaurant sales $ 898,790 $ 719,406 $ 2,789,142 $ 2,141,062

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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

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

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

Comparable restaurant sales 177.7 657.8

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Restaurant closures (4.5) (28.8)

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

For the periods ended September 26, 2021 $ 898.8 $ 2,789.1

The increase in U.S.

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.

Restaurant sales during the thirteen weeks ended September 26, 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 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 33 restaurants since March 29, 2020.

Restaurant sales was partially offset by the closure of 15 restaurants since June 26, 2020.

The increase in U.S.

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.

Restaurant sales during the thirty-nine weeks ended September 26, 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 13 new restaurants not included in our comparable restaurant sales base.

The increase in U.S.

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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:

The increase in U.S.

Income from operations generated during the thirteen weeks ended September 26, 2021 as compared to the thirteen weeks ended September 27, 2020 was primarily due to an increase in comparable restaurant sales and lower advertising expense.

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.

(i) the Carrabba’s Italian Grill royalty termination, (ii) higher labor costs and commodity inflation and (iii) higher operating and utilities expense.

Income from operations generated during the thirty-nine weeks ended September 26, 2021 as compared to Loss from operations during the thirty-nine weeks ended September 27, 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 and (v) the impact of certain cost savings initiatives.

These increases were partially offset by:

(i) the Carrabba’s Italian Grill royalty termination, (ii) higher labor costs and commodity inflation, (iii) higher management bonus and (iv) higher operating and utilities expense.

International Segment

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020

Restaurant sales $ 97,928 $ 47,081 $ 242,254 $ 197,923

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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

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

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

Comparable restaurant sales 40.7 38.3

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Restaurant closures — (0.6)

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.

For the periods ended September 26, 2021 $ 97.9 $ 242.3

The increase in international Restaurant sales during the thirteen weeks ended September 26, 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 20 new restaurants not included in our comparable restaurant sales base.

The increase in international Restaurant sales during the thirty-nine weeks ended September 26, 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 24 new restaurants not included in our comparable restaurant sales base, partially offset by the effect of foreign currency translation of the Brazilian Real relative to the U.S.

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.

International Income from operations generated during the thirteen weeks ended September 26, 2021 as compared to Loss from operations during the thirteen weeks ended September 27, 2020 was primarily due to:

(i) higher restaurant sales due to the reopening of restaurant dining rooms and increases in average check per person and (ii) a decrease in off-premises related costs.

These increases were partially offset by:

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

International Income from operations generated during the thirty-nine weeks ended September 26, 2021 as compared to Loss from operations during the thirty-nine weeks ended September 27, 2020 was primarily due to:

(i) higher restaurant sales due to the reopening of restaurant dining rooms and increases in average check per person and (ii) lower labor costs.

These increases were partially offset by:

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

BLOOMIN’ BRANDS, INC.

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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 TWENTY-SIX WEEKS ENDED

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020

Outback Steakhouse $ 118 $ 76 $ 329 $ 250

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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

Consolidated THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020

Income (loss) from operations $ 14,837 $ (14,255) $ 230,472 $ (167,735)

6 unchanged sentences

Restaurant-level operating margin 10.3 % 10.7 % 16.5 % 9.2 %

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020

Income (loss) from operations $ 47,294 $ 29,574 $ 334,326 $ (21,968)

6 unchanged sentences

Restaurant-level operating margin 10.0 % 11.4 % 17.1 % 9.4 %

International THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

International THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020

Income (loss) from operations $ 1,412 $ (7,926) $ 7,419 $ (18,209)

11 unchanged sentences

THIRTEEN WEEKS ENDED

JUNE 27, 2021 JUNE 28, 2020

SEPTEMBER 26, 2021 SEPTEMBER 27, 2020

REPORTED ADJUSTED (1) REPORTED ADJUSTED

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Restaurant-level operating margin 10.3 % 16.8 % 10.7 % 10.7 %

TWENTY-SIX WEEKS ENDED

JUNE 27, 2021 JUNE 28, 2020

THIRTY-NINE WEEKS ENDED

SEPTEMBER 26, 2021 SEPTEMBER 27, 2020

REPORTED ADJUSTED (1) REPORTED ADJUSTED (1)

5 unchanged sentences

_________________

(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

(1) Includes (favorable) unfavorable 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 THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 26, 2021 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020

Royalty termination expense $ (61.9) $ (61.9) $ —

Legal and other matters (2.7) (2.7) —

COVID-19 related costs (i) — — (9.9)

Asset impairments and closing costs — — 2.7

$ (64.6) $ (64.6) $ (7.2)

_________________

(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.

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

BLOOMIN’ BRANDS, INC.

2 unchanged sentences

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(in thousands, except per share data) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020

Income (loss) from operations $ 14,837 $ (14,255) $ 230,472 $ (167,735)

Operating income (loss) margin 1.5 % (1.8) % 7.5 % (7.1) %

Royalty termination expense (1) 61,880 — 61,880 —

Legal and other matters (2) 5,965 — (372) 178

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Severance and other transformational costs (4) — 4,200 — 28,847

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

Asset impairments and closure costs (5) — — — (2,205)

Total income (loss) from operations adjustments 67,845 4,200 61,508 106,038

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_________________

(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.

(1) Payment made to the Carrabba’s Founders in connection with the Royalty Termination Agreement.

See Note 19 - Commitments and Contingencies of the Notes to Consolidated Financial Statements for additional details regarding the Royalty Termination Agreement.

(2) The thirteen and thirty-nine weeks ended September 26, 2021 includes:

(i) an adjustment of $(3.2) million to reduce our initial recorded estimate and net $3.1 million benefit from the recognition of recoverable PIS and COFINS taxes, including accrued interest, respectively, within other revenues as a result of favorable court rulings and (ii) an accrual of $2.7 million for Imposto sobre Serviços (“ISS”), a Brazilian municipal service tax, in connection with royalties from our Brazilian subsidiary over the past five years, including related penalties and interest, recorded within Other restaurant operating expense as a result of an unfavorable Brazilian Supreme Court ruling.

(3) 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.

1 unchanged sentence

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

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

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

(5) Primarily includes a lease termination gain of $2.8 million.

(6) 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.

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

See Note 11 - Convertible Senior Notes of the Notes to Consolidated Financial Statements for details.

(8) 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.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

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.

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

(10) 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 thirty-nine weeks ended September 27, 2020.

(11) For the thirty-nine weeks ended September 26, 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 thirty-nine weeks ended September 26, 2021, adjusted diluted weighted average common shares outstanding was calculated excluding the dilutive effect of 10,476 and 10,453 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 June 27, 2021, we had $101.3 million in cash and cash equivalents, of which $35.0 million was held by foreign affiliates.

Cash flows generated from operating activities and availability under our revolving credit facility are our principal sources of liquidity, which we use for operating expenses, debt payments, development of new restaurants, remodeling or relocating older restaurants and investment in technology.

Cash and Cash Equivalents - As of September 26, 2021, we had $76.3 million in cash and cash equivalents, of which $28.8 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 June 27, 2021, we had aggregate accumulated foreign earnings of approximately $38.8 million.

As of September 26, 2021, we had aggregate accumulated foreign earnings of approximately $34.7 million.

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

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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.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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:

4 unchanged sentences

2021 payments (2,500) (239,000) (425,000) (462,000) — — (1,128,500)

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 %

Balance as of September 26, 2021 $ 197,500 $ 124,000 $ — $ — $ 230,000 $ 300,000 $ 851,500

Weighted-average interest rate, as of September 26, 2021 2.58 % 2.69 % 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.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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.

As of September 26, 2021, we had $655.3 million in available unused borrowing capacity under our revolving credit facility, net of letters of credit of $20.7 million.

During the thirteen weeks ended September 26, 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 19 - Commitments and Contingencies.

This cash payment was primarily funded by borrowings on our revolving credit facility.

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 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.

11 unchanged sentences

and effect certain other transactions with affiliates.

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

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

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 $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.

Other than the annual required minimum amortization premiums of $10.0 million, we do not anticipate any other payments will be required through September 25, 2022.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

See Note 10 - Long-term Debt, Net for additional details regarding the 2029 Notes and Second Amended and Restated Credit Agreement.

As of September 26, 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.

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:

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)

THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020

Net cash provided by operating activities $ 304,246 $ 54,971

Net cash used in investing activities (69,085) (56,162)

2 unchanged sentences

Net (decrease) increase in cash, cash equivalents and restricted cash $ (29,824) $ 95,369

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) 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.

Operating activities - The increase in net cash provided by operating activities during the thirty-nine weeks ended September 26, 2021 as compared to the thirty-nine weeks ended September 27, 2020 was primarily due to an increase in restaurant-level operating margin.

This increase was partially offset by:

(i) cash paid in connection with the Carrabba’s Italian Grill royalty termination, (ii) deferral of payroll tax payments in 2020 as a result of the CARES Act, (iii) higher inventory purchases, (iv) timing of collections of gift card receivables, (v) cash paid to terminate interest rate swap agreements and (vi) timing of operational payments and receipts.

Investing activities - The increase in net cash used in investing activities during the thirty-nine weeks ended September 26, 2021 as compared to the thirty-nine weeks ended September 27, 2020 was primarily due to higher capital expenditures, partially offset by higher proceeds from the disposal of property, fixtures and equipment.

Financing activities - Net cash used in financing activities during the thirty-nine weeks ended September 26, 2021 as compared to net cash provided by financing activities during the thirty-nine weeks ended September 27, 2020 was primarily due to:

(i) higher net repayments on our revolving credit facility, (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 Former Credit Facility.

These decreases were partially offset by:

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

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

(dollars in thousands) SEPTEMBER 26, 2021 DECEMBER 27, 2020

Current assets $ 240,659 $ 323,854

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Working capital (deficit) includes:

(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

(i) Unearned revenue primarily from unredeemed gift cards of $284.1 million and $381.6 million as of September 26, 2021 and December 27, 2020, respectively, and (ii) current operating lease

BLOOMIN’ BRANDS, INC.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

liabilities of $178.6 million and $176.8 million as of September 26, 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).

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 $21.3 million and $28.1 million as of June 27, 2021 and December 27, 2020, respectively.

Deferred Compensation Programs - The deferred compensation obligation due to managing and chef partners was $18.4 million and $28.1 million as of September 26, 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 June 27, 2021.

Other Compensation Programs - Certain U.S.

partners participate in a non-qualified long-term compensation program that we fund as the obligation for each participant becomes due.

The obligation for managing and chef partners’ deferred compensation was fully funded as of September 26, 2021.

DIVIDENDS AND SHARE REPURCHASES

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.

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

We did not pay dividends or repurchase shares of our outstanding common stock during the thirteen weeks ended September 26, 2021.

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

Following is a summary of dividends and share repurchases from fiscal year 2015 through September 26, 2021:

(dollars in thousands) DIVIDENDS PAID SHARE REPURCHASES TOTAL

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Fiscal year 2020 17,480 — 17,480

First fiscal quarter 2021 — — —

Second fiscal quarter 2021 — — —

Fiscal year 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 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.

For a description of recently issued Financial Accounting Standards that we adopted during the thirty-nine weeks ended September 26, 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