What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-05-03 compared with 2021-11-03 · 234 added, 585 removed, 415 unchanged (66% of the section changed)

2 unchanged sentences

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

SEPTEMBER 26, 2021 DECEMBER 27, 2020

MARCH 27, 2022 DECEMBER 26, 2021

Current assets

26 unchanged sentences

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

no shares issued and outstanding as of September 26, 2021 and December 27, 2020

no shares issued and outstanding as of March 27, 2022 and December 26, 2021

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

89,248,056 and 87,855,571 shares issued and outstanding as of September 26, 2021 and December 27, 2020, respectively

89,185,040 and 89,252,823 shares issued and outstanding as of March 27, 2022 and December 26, 2021, respectively

Additional paid-in capital 1,115,458 1,119,728

7 unchanged sentences

BLOOMIN’ BRANDS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

THIRTEEN WEEKS ENDED

MARCH 27, 2022 MARCH 28, 2021

Restaurant sales $ 1,123,575 $ 979,451

9 unchanged sentences

Total costs and expenses 1,033,279 896,475

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

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

Other income (expense), net 5 1 26 ( 211 )

Income from operations 107,256 90,998

Other income, net — 21

Interest expense, net ( 13,633 ) ( 14,628 )

Income (loss) before (benefit) provision for income taxes 597 ( 32,554 ) 184,562 ( 214,830 )

(Benefit) provision for income taxes ( 4,454 ) ( 14,776 ) 24,827 ( 70,210 )

Net income (loss) 5,051 ( 17,778 ) 159,735 ( 144,620 )

net income (loss) attributable to noncontrolling interests 1,602 ( 141 ) 4,879 ( 116 )

Net income (loss) attributable to Bloomin’ Brands

Income before provision for income taxes 93,623 76,391

Provision for income taxes 15,929 6,593

Net income 77,694 69,798

net income attributable to noncontrolling interests 2,183 936

Net income attributable to Bloomin’ Brands

$ 75,511 $ 68,862

Redemption of preferred stock in excess of carrying value — — — ( 3,496 )

Net income (loss) attributable to common stockholders $ 3,449 $ ( 17,637 ) $ 154,856 $ ( 148,000 )

Net income (loss) $ 5,051 $ ( 17,778 ) $ 159,735 $ ( 144,620 )

Other comprehensive income (loss):

Net income $ 77,694 $ 69,798

Other comprehensive income:

Foreign currency translation adjustment 11,283 ( 6,575 )

Unrealized (loss) gain on derivatives, net of tax ( 153 ) 261 ( 323 ) ( 14,631 )

Reclassification of adjustments for loss on derivatives included in Net income (loss), net of tax 1,519 2,962 6,036 6,943

Amortization of terminated interest rate swaps, net of tax 1,479 — 2,950 —

Comprehensive income (loss) 9,569 ( 18,650 ) 173,511 ( 193,510 )

comprehensive income (loss) attributable to noncontrolling interests 1,602 ( 141 ) 4,879 ( 780 )

Comprehensive income (loss) attributable to Bloomin’ Brands $ 7,967 $ ( 18,509 ) $ 168,632 $ ( 192,730 )

Earnings (loss) per share attributable to common stockholders:

Unrealized gain (loss) on derivatives, net of tax 573 ( 42 )

Reclassification of adjustments for loss on derivatives included in Net income, net of tax 681 3,003

Impact of terminated interest rate swaps included in Net income, net of tax 3,021 —

Comprehensive income 93,252 66,184

comprehensive income attributable to noncontrolling interests 2,183 936

Comprehensive income attributable to Bloomin’ Brands $ 91,069 $ 65,248

Earnings per share:

Basic $ 0.85 $ 0.78

12 unchanged sentences

SHARES AMOUNT

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

Net income — — — 3,449 — 1,602 5,051

Other comprehensive income, net of tax — — — — 4,518 — 4,518

Stock-based compensation — — 5,593 — — — 5,593

Common stock issued under stock plans (1) 37 — ( 42 ) — — — ( 42 )

Purchase of noncontrolling interests — — 9 — — ( 12 ) ( 3 )

Distributions to noncontrolling interests — — — — — ( 2,062 ) ( 2,062 )

Contributions from noncontrolling interests — — — — — 374 374

Balance, September 26, 2021 89,248 $ 892 $ 1,115,464 $ ( 758,870 ) $ ( 197,670 ) $ 6,520 $ 166,336

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

Cumulative-effect from a change in accounting principle, net of tax — — ( 47,323 ) 4,370 — — ( 42,953 )

December 26, 2021 89,253 $ 893 $ 1,119,728 $ ( 698,171 ) $ ( 205,989 ) $ 6,389 $ 222,850

Net income — — — 75,511 — 2,183 77,694

Other comprehensive income, net of tax — — — — 15,558 — 15,558

Cash dividends declared, $ 0.14 per common share

— — ( 12,559 ) — — — ( 12,559 )

Repurchase and retirement of common stock ( 551 ) ( 6 ) — ( 11,696 ) — — ( 11,702 )

Stock-based compensation — — 4,843 — — — 4,843

Common stock issued under stock plans (1) 483 5 880 — — — 885

Purchase of noncontrolling interests — — 9 — — ( 12 ) ( 3 )

Purchase of noncontrolling interests, net of tax of $ 888

— — 2,566 — — ( 4,454 ) ( 1,888 )

Distributions to noncontrolling interests — — — — — ( 2,641 ) ( 2,641 )

Contributions from noncontrolling interests — — — — — 217 217

Balance, September 26, 2021 89,248 $ 892 $ 1,115,464 $ ( 758,870 ) $ ( 197,670 ) $ 6,520 $ 166,336

(CONTINUED...)

BLOOMIN’ BRANDS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)

March 27, 2022 89,185 $ 892 $ 1,115,458 $ ( 634,356 ) $ ( 190,431 ) $ 1,694 $ 293,257

BLOOMIN’ BRANDS, INC.

3 unchanged sentences

SHARES AMOUNT

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

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

Other comprehensive loss, net of tax — — — — ( 872 ) — ( 872 )

Stock-based compensation — — 2,712 — — — 2,712

Common stock issued under stock plans (1) 39 — ( 179 ) — — — ( 179 )

Distributions to noncontrolling interests — — — — — ( 745 ) ( 745 )

Contributions from noncontrolling interests — — — — — 219 219

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

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

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

Cumulative-effect from a change in accounting principle, net of tax — — ( 47,323 ) 4,370 — — ( 42,953 )

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

Net income — — — 68,862 — 936 69,798

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

Cash dividends declared, $ 0.20 per common share

— — ( 17,480 ) — — — ( 17,480 )

Stock-based compensation — 4,726 — — — 4,726

Consideration for preferred stock in excess of carrying value, net of tax — — ( 3,496 ) — 517 1,261 ( 1,718 )

Common stock issued under stock plans (1) 999 10 7,428 — — — 7,438

Purchase of noncontrolling interests — — ( 58 ) — — 1 ( 57 )

Distributions to noncontrolling interests — — — — — ( 1,458 ) ( 1,458 )

Contributions from noncontrolling interests — — — — — 511 511

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

— — 64,367 — — — 64,367

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

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

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

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

________________

4 unchanged sentences

(DOLLARS IN THOUSANDS, UNAUDITED)

THIRTY-NINE WEEKS ENDED

SEPTEMBER 26, 2021 SEPTEMBER 27, 2020

THIRTEEN WEEKS ENDED

MARCH 27, 2022 MARCH 28, 2021

Cash flows provided by operating activities:

Net income (loss) $ 159,735 $ ( 144,620 )

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

Net income $ 77,694 $ 69,798

Adjustments to reconcile Net income to cash provided by operating activities:

Depreciation and amortization 41,775 41,226

2 unchanged sentences

Provision for impaired assets and restaurant closings 1,839 2,200

Amortization of unrealized loss on terminated interest rate swaps 3,973 —

Non-cash interest expense from terminated interest rate swaps 4,067 —

Non-cash operating lease costs 20,477 19,502

Provision for expected credit losses and contingent lease liabilities 937 7,420

Inventory obsolescence and spoilage — 6,835

Stock-based and other non-cash compensation expense 4,843 4,726

Deferred income tax expense (benefit) 3,842 ( 80,201 )

(Gain) loss on disposal of property, fixtures and equipment ( 1,218 ) 1,055

Deferred income tax expense 3,209 1,571

Other, net 2,229 ( 829 )

2 unchanged sentences

Cash flows used in investing activities:

Proceeds from disposal of property, fixtures and equipment 7,052 2,088

Capital expenditures ( 40,180 ) ( 17,411 )

1 unchanged sentence

Net cash used in investing activities ( 39,150 ) ( 16,618 )

(CONTINUED...)

BLOOMIN’ BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(DOLLARS IN THOUSANDS, UNAUDITED)

THIRTY-NINE WEEKS ENDED

SEPTEMBER 26, 2021 SEPTEMBER 27, 2020

Cash flows (used in) provided by financing activities:

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

Cash flows used in financing activities:

Repayments of long-term debt and finance lease obligations ( 2,863 ) ( 9,656 )

1 unchanged sentence

Repayments of borrowings on revolving credit facilities ( 160,000 ) ( 107,000 )

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

Proceeds from issuance of senior notes 300,000 —

Proceeds from issuance of convertible senior notes — 230,000

Proceeds from issuance of warrants — 46,690

Purchase of convertible note hedge — ( 66,240 )

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

Proceeds (payments of taxes) from share-based compensation, net 9,883 ( 3,041 )

Proceeds from share-based compensation, net 885 7,438

Distributions to noncontrolling interests ( 2,641 ) ( 1,458 )

Contributions from noncontrolling interests 217 511

Purchase of limited partnership and noncontrolling interests ( 3 ) ( 57 )

Purchase of noncontrolling interests ( 1,000 ) —

Payments for partner equity plan ( 2,748 ) ( 1,747 )

Repurchase of common stock ( 10,402 ) —

Cash dividends paid on common stock ( 12,559 ) —

Redemption of subsidiary preferred stock — ( 1,475 )

Net cash (used in) provided by financing activities ( 265,192 ) 99,853

Net cash used in financing activities ( 101,111 ) ( 96,912 )

Effect of exchange rate changes on cash and cash equivalents 1,965 ( 1,246 )

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

Net increase in cash, cash equivalents and restricted cash 8,839 26,250

Cash, cash equivalents and restricted cash as of the beginning of the period 89,057 110,408

6 unchanged sentences

Leased assets obtained in exchange for new finance lease liabilities $ 1,313 $ 15

Increase (decrease) in liabilities from the acquisition of property, fixtures and equipment $ 3,006 $ ( 7,174 )

(Decrease) increase in liabilities from the acquisition of property, fixtures and equipment $ ( 6,178 ) $ 2,005

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

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

Description of the Business and Basis of Presentation

3 unchanged sentences

Additional Outback Steakhouse, Carrabba’s Italian Grill and Bonefish Grill restaurants in which the Company has no direct investment are operated under franchise agreements.

Basis of Presentation - The accompanying interim unaudited consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission.

Basis of Presentation - The accompanying interim unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission.

Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States (“U.S.

3 unchanged sentences

These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 26, 2021.

Recently Adopted Financial Accounting Standards - On December 28, 2020, the Company adopted Accounting Standards Update (“ASU”) No.

2020-06, “Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity,” (“ASU No.

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

2020-06 also requires the application of the if-converted method for calculating diluted earnings per share and the treasury stock method is no longer permitted for convertible instruments.

The Company adopted ASU No.

2020-06 using the modified retrospective approach which resulted in a cumulative-effect adjustment that increased (decreased) the following Consolidated Balance Sheet accounts during the first quarter of 2021:

ADJUSTMENT CONSOLIDATED BALANCE SHEET CLASSIFICATION AMOUNT

(in millions)

Deferred tax impact of cumulative-effect adjustment Deferred income tax assets, net $ 14.9

Debt discount reclassification Long-term debt, net $ 59.9

Equity issuance costs reclassification Long-term debt, net $ ( 2.1 )

Debt discount amortization reclassification, net of tax Accumulated deficit $ 4.4

Reversal of separated equity component, net of tax Additional paid-in capital $ ( 47.3 )

After adopting ASU No.

2020-06, the Company’s convertible senior notes due 2025 (the “2025 Notes”) are reflected entirely as a liability since the embedded conversion feature is no longer separately presented within stockholders’ equity.

During 2020, the Company recognized debt discount amortization of $ 6.3 million within Interest expense, net related to its 2025 Notes.

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

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

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

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

Recently Issued Financial Accounting Standards Not Yet Adopted - In November 2021, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No.

2021-10, “Government Assistance (Topic 832):

Disclosures by Business Entities about Government Assistance” (“ASU No.

2021-10”), which requires financial statement footnote disclosure regarding government assistance accounted for by applying a grant or contribution accounting model by analogy.

2021-10 is effective for the Company for the fiscal year ending December 25, 2022, with early adoption permitted.

The Company is currently evaluating the impact the adoption of ASU No.

2021-10 will have on its financial statement disclosures.

Recent accounting guidance not discussed herein is not applicable, did not have, or is not expected to have a material impact to the Company.

Reclassifications - The Company reclassified certain items in the accompanying consolidated financial statements for prior periods to be comparable with the classification for the current period, including, but not limited to, presentation of certain items within the condensed consolidated statements of cash flows and certain notes to the consolidated financial statements.

These reclassifications had no effect on previously reported net income.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

COVID-19 Charges

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

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

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

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

SEPTEMBER 27, 2020

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

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

Other operating charges Other restaurant operating 2,467

Lease guarantee contingent liabilities (2) General and administrative 4,188

Allowance for expected credit losses (3) General and administrative 3,334

Other charges General and administrative 2,624

Right-of-use asset impairment (4) Provision for impaired assets and restaurant closings 25,740

Fixed asset impairment (4) Provision for impaired assets and restaurant closings 31,727

Goodwill and other impairment (5) Provision for impaired assets and restaurant closings 3,096

________________

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

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

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

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

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

Revenue Recognition

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 27, 2022 MARCH 28, 2021

Restaurant sales $ 1,123,575 $ 979,451

4 unchanged sentences

Total revenues $ 1,140,535 $ 987,473

________________

(1) The thirteen and thirty-nine weeks ended September 26, 2021 include an adjustment of $( 3.2 ) million to reduce the Company’s initial recorded estimate and net $ 3.1 million benefit from the recognition of recoverable Program of Social Integration (“PIS”) and Contribution for the Financing of Social Security (“COFINS”) taxes, respectively, within other revenues in connection with favorable court rulings in Brazil regarding the calculation methodology and taxable base.

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

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(UNAUDITED) - Continued

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

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

THIRTEEN WEEKS ENDED

SEPTEMBER 26, 2021 SEPTEMBER 27, 2020

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

Outback Steakhouse $ 523,142 $ 9,335 $ 443,286 $ 1,422

Carrabba’s Italian Grill 159,147 482 124,019 359

Bonefish Grill 134,603 169 100,410 44

Fleming’s Prime Steakhouse & Wine Bar 79,687 — 49,846 —

Other 2,211 3 1,845 —

total 898,790 9,989 719,406 1,825

International

Outback Steakhouse Brazil 74,020 — 32,485 —

Other (1) 23,908 2,919 14,596 2,391

International total 97,928 2,919 47,081 2,391

Total $ 996,718 $ 12,908 $ 766,487 $ 4,216

THIRTY-NINE WEEKS ENDED

SEPTEMBER 26, 2021 SEPTEMBER 27, 2020

MARCH 27, 2022 MARCH 28, 2021

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

11 unchanged sentences

________________

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

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

(1) Includes Restaurant sales for Company-owned Outback Steakhouse restaurants outside of Brazil and Abbraccio restaurants in Brazil.

Franchise revenues primarily includes revenues from franchised Outback Steakhouse restaurants.

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

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

(dollars in thousands) MARCH 27, 2022 DECEMBER 26, 2021

Other current assets, net

4 unchanged sentences

Deferred franchise fees - current 439 443

Other 1,674 1,021

Total Unearned revenue $ 325,304 $ 398,795

2 unchanged sentences

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 27, 2022 MARCH 28, 2021

Balance, beginning of period $ 17,793 $ 19,300

3 unchanged sentences

Balance, end of period $ 13,033 $ 13,502

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 27, 2022 MARCH 28, 2021

Balance, beginning of period $ 387,945 $ 373,048

3 unchanged sentences

Balance, end of period $ 314,974 $ 306,075

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

Impairments and Exit Costs

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

Impairment losses

(1) $ 1,115 $ 332 $ 8,289 $ 55,045

International (1)(2) 28 — 180 3,468

Corporate (3) 19 32 257 6,193

Total impairment losses 1,162 364 8,726 64,706

Restaurant closure charges (benefits)

(1) 423 ( 418 ) 389 1,344

International (1) — — ( 153 ) 173

Total restaurant closure charges (benefits) 423 ( 418 ) 236 1,517

Provision for impaired assets and restaurant closings $ 1,585 $ ( 54 ) $ 8,962 $ 66,223

________________

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

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

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

(3) Corporate impairment charges for the thirty-nine weeks ended September 27, 2020 primarily relate to transformational initiatives.

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

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

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

DESCRIPTION SEPTEMBER 27, 2020

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

Lease right-of-use asset impairments and closing costs Provision for impaired assets and restaurant closings 4,008

Severance and other expenses General and administrative 1,021

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

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

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

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

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 26, 2021

Balance, beginning of the period $ 12,879

Cash payments ( 3,861 )

Accretion 702

Adjustments ( 484 )

Balance, end of the period (1) $ 9,236

________________

(1) As of September 26, 2021, the Company had exit-related accruals associated with closure and restructuring initiatives of $ 3.1 million recorded in Accrued and other current liabilities and $ 6.1 million recorded in Non-current operating lease liabilities on its Consolidated Balance Sheet.

Earnings (Loss) Per Share

The dilutive effect of the 2025 Notes is calculated using the if-converted method which was required upon the Company’s adoption of ASU No.

To the extent the Company has ability to settle its 2025 Notes in shares of its common stock, the principal and conversion spread on the 2025 Notes will have a dilutive impact on diluted earnings per share when the average market price of the Company’s common stock for a given period exceeds the conversion price of $ 11.89 per share of common stock.

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

As a result, subsequent to the election, only the amounts in excess of the principal amount are considered in diluted earnings per share under the if-converted method.

In connection with the offering of the 2025 Notes, the Company entered into the Convertible Note Hedge Transactions and Warrant Transactions described in Note 11 - Convertible Senior Notes.

However, the Convertible Note Hedge Transactions are not considered when calculating dilutive shares given their anti-dilutive impact as an offset to dilution of shares underlying the 2025 Notes.

The Warrant Transactions have a dilutive effect on the Company’s common stock to the extent the price of its common stock exceeds the $ 16.64 strike price of the Warrant Transactions.

See Note 11 - Convertible Senior Notes for additional information regarding the 2025 Notes, Convertible Note Hedge Transactions and Warrant Transactions .

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

Net income (loss) attributable to Bloomin’ Brands

Earnings Per Share

In February 2021, the Company provided the trustee of its convertible senior notes due in 2025 (the “2025 Notes”) notice of the Company’s irrevocable election to settle the principal portion of the 2025 Notes in cash and any excess in shares.

As a result, subsequent to the election, only the amounts in excess of the principal amount are considered in diluted earnings per share.

The amount of the 2025 Notes settled in shares of common stock will have a dilutive impact on diluted earnings per share when the average market price of the Company’s common stock for a given period exceeds the conversion price, which was initially $ 11.89 per share of common stock.

In connection with the offering of the 2025 Notes, the Company entered into warrant transactions (the “Warrant Transactions”), which have a dilutive effect on the Company’s common stock to the extent the price of its common stock exceeds the strike price of the Warrant Transactions, which was initially $ 16.64 .

In connection with dividends paid during the thirteen weeks ended March 27, 2022, the conversion price of the 2025 Notes decreased to $ 11.82 per share of common stock and the strike price of the related warrants decreased to $ 16.55 per share of common stock.

The following table presents the computation of basic and diluted earnings per share for the periods indicated:

THIRTEEN WEEKS ENDED

(in thousands, except per share data) MARCH 27, 2022 MARCH 28, 2021

Net income attributable to Bloomin’ Brands

$ 75,511 $ 68,862

Redemption of preferred stock in excess of carrying value (1) — — — ( 3,496 )

Net income (loss) attributable to common stockholders 3,449 ( 17,637 ) 154,856 ( 148,000 )

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

Diluted net income (loss) attributable to common stockholders $ 3,449 $ ( 17,637 ) $ 155,316 $ ( 148,000 )

Diluted net income attributable to Bloomin’ Brands $ 75,511 $ 70,243

Basic weighted average common shares outstanding 89,355 88,367

6 unchanged sentences

Diluted weighted average common shares outstanding 103,454 110,641

Basic earnings (loss) per share attributable to common stockholders $ 0.04 $ ( 0.20 ) $ 1.74 $ ( 1.69 )

Diluted earnings (loss) per share attributable to common stockholders $ 0.03 $ ( 0.20 ) $ 1.42 $ ( 1.69 )

Basic earnings per share $ 0.85 $ 0.78

Diluted earnings per share $ 0.73 $ 0.63

________________

(1) Consideration paid in excess of carrying value for the redemption of its Abbraccio preferred stock is considered a deemed dividend and, for purposes of calculating earnings per share, reduces net income attributable to common stockholders for the thirty-nine weeks ended September 27, 2020.

See Note 13 - Stockholders’ Equity for additional details.

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

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

(3) Due to the Company’s net loss during the thirteen and thirty-nine weeks ended September 27, 2020, dilutive excess shares, if applicable, and warrants were excluded from the computation of diluted earnings per share as their effect would be antidilutive.

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

Stock options — 5,381 455 5,133

Nonvested restricted stock units 77 797 53 813

Nonvested performance-based share units 376 628 424 595

BLOOMIN’ BRANDS, INC.

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(UNAUDITED) - Continued

Share-based compensation-related weighted average securities outstanding not included in the computation of earnings per share because their effect was antidilutive were as follows, for the periods indicated:

THIRTEEN WEEKS ENDED

(shares in thousands) MARCH 27, 2022 MARCH 28, 2021

Stock options 1,417 1,364

Nonvested restricted stock units 217 73

Nonvested performance-based share units 365 431

Stock-based Compensation Plans

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

Stock options $ 495 $ 992 $ 1,829 $ 2,862

Restricted stock units 2,043 2,303 6,373 6,326

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 27, 2022 MARCH 28, 2021

Performance-based share units $ 2,619 $ 1,469

$ 5,564 $ 2,707 $ 20,015 $ 10,992

Restricted stock units 1,810 2,366

Stock options 377 865

$ 4,806 $ 4,700

(1) The thirty-nine weeks ended September 26, 2021 includes a cumulative life-to-date adjustment for PSUs granted in fiscal years 2019, 2020 and 2021 based on revised Company performance projections of performance criteria set forth in the award agreements.

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

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

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

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

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

The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that the market conditions will be achieved and was applied to the trading price of the Company’s common stock on the date of the grant.

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

THIRTY-NINE WEEKS ENDED

SEPTEMBER 26, 2021

In February 2022, the Company granted 0.5 million performance-based share units (“PSUs”) subject to final payout modification by a Relative Total Shareholder Return (“Relative TSR”) modifier.

This Relative TSR modifier can adjust the final payout outcome by 75 %, 100 % or 125 % of the achieved performance metric, with the overall payout capped at 200 % of the annual target grant.

These PSUs have a three-year cliff vesting period and their fair value was estimated using the Monte Carlo simulation model.

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

THIRTEEN WEEKS ENDED

MARCH 27, 2022 MARCH 28, 2021

Risk-free interest rate (1) 1.64 % 0.20 %

Dividend yield (2) 2.31 % — %

Volatility (3) 49.11 % 48.45 %

3 unchanged sentences

Treasury yield curve in effect as of the grant date for the performance period of the unit.

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

(3) Based on the historical volatility of the Company’s stock over the last seven years.

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

The following represents unrecognized stock-based compensation expense and the remaining weighted-average vesting period as of September 26, 2021:

(4) Represents a premium above the per share value of the Company’s common stock for the Relative TSR modifier as of the grant date of 7.9 % and 14.3 % as of March 27, 2022 and March 28, 2021, respectively.

The following represents unrecognized stock-based compensation expense and the remaining weighted average vesting period as of March 27, 2022:

UNRECOGNIZED COMPENSATION EXPENSE

(dollars in thousands) REMAINING WEIGHTED AVERAGE VESTING PERIOD (in years)

Stock options $ 1,061 0.7

Restricted stock units $ 11,663 1.9

Performance-based share units $ 21,163 1.6

Restricted stock units $ 12,002 2.2

BLOOMIN’ BRANDS, INC.

3 unchanged sentences

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

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

(dollars in thousands) MARCH 27, 2022 DECEMBER 26, 2021

Prepaid expenses $ 21,431 $ 21,194

4 unchanged sentences

Deferred gift card sales commissions 13,033 17,793

Assets held for sale 1,374 3,831

Company-owned life insurance policies 18,023 17,244

Other current assets, net 6,134 5,297

$ 104,588 $ 184,623

________________

(1) See Note 17 - Allowance for Expected Credit Losses for a rollforward of the related allowance for expected credit losses.

Other Assets, Net

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

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

Company-owned life insurance (1) $ 33,799 $ 44,814

Deferred debt issuance costs (2) 6,200 4,694

Liquor licenses 23,296 24,250

Other assets 18,824 18,868

$ 82,119 $ 92,626

________________

(1) During the thirty-nine weeks ended September 26, 2021, the Company withdrew $ 9.1 million from its Company-owned life insurance policies to pay deferred compensation obligations.

(2) Net of accumulated amortization of $ 8.2 million and $ 9.0 million as of September 26, 2021 and December 27, 2020, respectively.

Accrued and Other Current Liabilities

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

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

Accrued rent and current operating lease liabilities $ 184,240 $ 192,369

Accrued payroll and other compensation (1) 126,306 79,291

Accrued insurance 21,412 20,648

Other current liabilities (2) 112,633 96,013

$ 444,591 $ 388,321

________________

(1) During the thirty-nine weeks ended September 26, 2021, the Company reclassified $ 27.3 million of payroll taxes deferred under the Coronavirus, Aid, Relief and Economic Security Act (“CARES Act”) to current.

(2) During the thirty-nine weeks ended September 26, 2021, other current liabilities increased primarily due to an $ 8.7 million increase in accrued interest related to the 2029 Notes.

See Note 10 - Long-term Debt, Net for details regarding the 2029 Notes.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

Long-term Debt, Net

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

SEPTEMBER 26, 2021 DECEMBER 27, 2020

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

MARCH 27, 2022 DECEMBER 26, 2021

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

3 unchanged sentences

Total Senior Secured Credit Facility 202,500 275,000

Former Credit Facility:

Term loan A (1) — 425,000 2.88 %

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

Total Former Credit Facility — 872,000

2025 Notes 230,000 5.00 % 230,000 5.00 %

8 unchanged sentences

(1) Interest rate represents the weighted average interest rate as of the respective periods.

(2) See Note 11 - Convertible Senior Notes for details regarding the 2025 Notes and related hedge and warrant transactions .

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

2020-06, debt discount of $ 59.9 million related to the 2025 Notes was de-recognized and $ 2.1 million of equity issuance costs were reclassified as debt issuance costs during the thirty-nine weeks ended September 26, 2021.

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

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

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

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

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 Company may redeem some or all of the 2029 Notes at any time on or after April 15, 2024, at the redemption prices set forth in the Indenture, plus accrued and unpaid interest.

The Company may also redeem up to 40 % of the 2029 Notes in an amount not greater than the proceeds of certain equity offerings completed before April 15, 2024, at a redemption price equal to 105.125 % of the principal amount thereof, plus accrued and unpaid interest.

In addition, at any time prior to April 15, 2024, the Company may redeem some or all of the 2029 Notes at a price equal to 100 % of the principal amount, plus a make-whole premium, plus accrued and unpaid interest.

The Indenture contains restrictive covenants that limit the ability of the Company and its restricted subsidiaries to, among other things, incur additional indebtedness or issue certain preferred stock;

pay dividends, redeem stock or

(2) Interest rate represents the base rate option elected in anticipation of impending repayment.

Debt Covenants - As of March 27, 2022 and December 26, 2021, the Company was in compliance with its debt covenants.

Credit Agreement Amendment - On April 16, 2021, the Company and its wholly-owned subsidiary OSI Restaurant Partners, LLC (“OSI”), as co-borrowers, entered into the Second Amended and Restated Credit Agreement (the “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 “Senior Secured Credit Facility”).

On April 26, 2022, the Company and OSI entered into the First Amendment to the Second Amended and Restated Credit Agreement and Incremental Amendment (the “Amended Credit Agreement”), which included an increase of the Company’s existing revolving credit facility from $ 800.0 million to $ 1.0 billion and a transition from London Inter-Bank Offered Rate (“LIBOR”) to Secured Overnight Financing Rate (“SOFR”) as the benchmark rate for

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(UNAUDITED) - Continued

make other distributions;

make certain investments;

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

create certain liens;

transfer or sell certain assets;

merge or consolidate;

enter into certain transactions with the Company’s affiliates;

and designate subsidiaries as unrestricted subsidiaries.

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

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

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

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

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

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

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

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

The Company may elect an interest rate at each reset period based on the Base Rate or the Eurocurrency Rate, plus an applicable spread.

purposes of calculating interest under the Senior Secured Credit Facility.

At closing, an incremental $ 192.5 million was drawn on the revolving credit facility to fully repay the outstanding balance of Term loan A.

The total indebtedness of the Company remained unchanged as a result of the Amended Credit Agreement.

Under the Amended Credit Agreement, the Company may elect an interest rate at each reset period based on the Base Rate or Adjusted Term SOFR, plus an applicable spread.

The Base Rate option is the highest of:

(i) the prime rate of Wells Fargo Bank, National Association, (ii) the federal funds effective rate plus 0.5 of 1.0% or (iii) the Eurocurrency rate with a one-month interest period plus 1.0 % (the “Base Rate”).

The Eurocurrency Rate option is the seven, 30, 60, 90 or 180-day Eurocurrency rate, subject to a 0 % floor (the “Eurocurrency Rate”).

(i) the prime rate of Wells Fargo Bank, National Association, (ii) the federal funds effective rate plus 0.5 of 1.0% or (iii) the Adjusted Term SOFR with a one-month interest period plus 1.0 % (the “Base Rate”).

The Adjusted Term SOFR option is the 30, 90 or 180-day SOFR, plus a term SOFR adjustment of 0.10 %, subject to a 0 % floor (the “Adjusted Term SOFR”).

The interest rates are as follows:

BASE RATE ELECTION EUROCURRENCY RATE ELECTION

Term loan A and revolving credit facility 50 to 150 basis points over the Base Rate

150 to 250 basis points over the Eurocurrency Rate

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

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

SCHEDULED QUARTERLY PAYMENT DATES TERM LOAN A

December 26, 2021 through June 30, 2024 $ 2,500

September 29, 2024 through June 29, 2025 $ 3,750

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

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

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

December 25, 2022.

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

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

The Second Amended and Restated Credit Agreement requires a TNLR not to exceed 4.50 to 1.00.

Seasonally annualized Consolidated EBITDA for the quarterly period ended September 26, 2021 was calculated as Consolidated EBITDA for the three consecutive quarters ending September 26, 2021 divided by 77.0 %.

The Second Amended and Restated Credit Agreement limits, subject to certain exceptions, the Company’s ability and the ability of its subsidiaries to:

incur additional indebtedness;

make significant payments;

pay dividends and other restricted payments;

make certain investments;

acquire certain assets;

effect mergers and similar transactions;

and effect certain other transactions with affiliates.

The Company is also limited to $ 200.0 million of aggregate capital expenditures during the year ended December 26, 2021.

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

As of September 26, 2021 and December 27, 2020, the Company was in compliance with its debt covenants.

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

(dollars in thousands) SEPTEMBER 26, 2021

Year 1 $ 11,110

Year 2 10,757

Year 3 11,826

Year 4 246,424

Year 5 274,087

Thereafter 300,000

Total payments 854,204

unamortized debt discount and issuance costs ( 14,871 )

finance lease interest ( 182 )

Total principal payments $ 839,151

Deferred Financing Fees - During the thirty-nine weeks ended September 26, 2021, the Company deferred $ 5.5 million and $ 5.9 million of financing costs incurred in connection with the 2029 Notes and Second Amended Credit Agreement, respectively.

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

BASE RATE ELECTION ADJUSTED TERM SOFR ELECTION

Revolving credit facility 50 to 150 basis points over the Base Rate

150 to 250 basis points over the Adjusted Term SOFR

The transition to SOFR did not materially impact the interest rate applied to the Company’s borrowings.

No other material changes were made to the terms of the Company’s Credit Agreement as a result of the Amended Credit Agreement.

Convertible Senior Notes

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

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

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

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

Net proceeds from the

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

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

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

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

Prior to the close of business on the business day immediately preceding November 1, 2024, holders may convert all or a portion of their 2025 Notes under the following circumstances:

(i) during any calendar quarter commencing after the calendar quarter ending on June 30, 2020, if the last reported sale price per share of the Company’s common stock exceeds 130 % of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;

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

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

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

The 2025 Notes will be redeemable by the Company, in whole or in part, at the Company’s option at any time, and from time to time, on or after May 1, 2023 and on or before the 40 th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2025 Notes to be redeemed, plus accrued and unpaid interest, but only if the last reported sale price per share of the Company’s common stock exceeds 130 % of the conversion price on:

(i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice;

and (ii) the trading day immediately before the date the Company sends such notice.

In addition, calling any of the 2025 Notes for redemption will constitute a make-whole fundamental change with respect to that note, in which case the conversion rate applicable to the conversion of the 2025 Notes will be increased in certain circumstances if it is converted after it is called for redemption.

If a fundamental change occurs prior to the maturity date, holders may require the Company to repurchase all or a portion of their 2025 Notes for cash at a price equal to 100 % of the principal amount of the 2025 Notes to be repurchased, plus accrued and unpaid interest.

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

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

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

In connection with dividends paid during the thirteen weeks ended March 27, 2022, the conversion rate for the 2025 Notes decreased to approximately $ 11.82 per share, which represents 84.603 shares of common stock per $ 1,000 principal amount of the 2025 Notes, or a total of approximately 19.459 million shares.

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

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

(dollars in thousands) MARCH 27, 2022 DECEMBER 26, 2021

Long-term debt, net

Principal $ 230,000 $ 230,000

debt discount (1) — ( 59,862 )

debt issuance costs (1) ( 5,495 ) ( 5,898 )

Net carrying amount $ 224,505 $ 224,102

Equity component (1) $ — $ 64,367

________________

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

2020-06, debt discount and the equity component of the 2025 Notes were de-recognized and $ 2.1 million of issuance costs that were previously allocated to the equity component were reclassified as debt issuance costs during the thirty-nine weeks ended September 26, 2021.

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

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 27, 2022 MARCH 28, 2021

Coupon interest $ 2,875 $ 2,875

Deferred discount amortization — 2,407 — 3,786

Deferred issuance cost amortization 404 381

1 unchanged sentence

________________

(1) The effective rate of the 2025 Notes over their expected life was 5.85 % for the thirteen and thirty-nine weeks ended September 26, 2021 and 13.73 % for the thirteen and thirty-nine weeks ended September 27, 2020.

Based on the daily closing prices of the Company’s stock during the quarter ended September 26, 2021, holders of the 2025 Notes are eligible to convert their 2025 Notes during the fourth quarter of 2021.

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

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

Concurrently with the Company’s entry into the Convertible Note Hedge Transactions, the Company also entered into separate, warrant transactions with the Hedge Counterparties collectively relating to the same number of shares of the Company’s common stock, subject to customary anti-dilution adjustments, and for which the Company received proceeds that partially offset the cost of entering into the Convertible Note Hedge Transactions (the “Warrant Transactions”).

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

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

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

The Convertible Note Hedge Transactions are exercisable upon conversion of the 2025 Notes .

The Convertible Note Hedge Transactions expire upon maturity of the 2025 Notes .

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

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

Based on the daily closing prices of the Company’s stock during the quarter ended March 27, 2022, holders of the 2025 Notes are eligible to convert their 2025 Notes during the second quarter of 2022.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(UNAUDITED) - Continued

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

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

In connection with dividends paid during the thirteen weeks ended March 27, 2022, the strike price for the Warrant Transactions decreased to $ 16.55 .

Other Long-term Liabilities, Net

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

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

(dollars in thousands) MARCH 27, 2022 DECEMBER 26, 2021

Accrued insurance liability $ 30,779 $ 31,517

Chef and Restaurant Managing Partner deferred compensation obligations 18,413 32,306

Deferred payroll tax liabilities (1) — 27,302

Executive management deferred compensation obligations 21,032 23,543

Other long-term liabilities 38,692 42,880

1 unchanged sentence

_______________

(1) During the thirty-nine weeks ended September 26, 2021, the Company reclassified $ 27.3 million of payroll taxes deferred under the CARES Act to current.

(2) The Company’s hedge liability decreased by $ 13.7 million during the thirty-nine weeks ended September 26, 2021 primarily from the termination of certain interest rate swaps.

See Note 14 - Derivative Instruments and Hedging Activities for additional details.

(1) During the thirteen weeks ended March 27, 2022, the Company reclassified $ 27.3 million of payroll taxes deferred under the Coronavirus, Aid, Relief and Economic Security Act to current.

Stockholders’ Equity

Redeemable Preferred Stock - In connection with the development of its Abbraccio Cucina Italiana (“Abbraccio”) concept in 2015, the Company sold preferred shares of its Abbraccio concept (“Abbraccio Shares”) to certain investors.

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

Share Repurchases - On February 8, 2022, the Company’s Board of Directors (the “Board”) approved a share repurchase program (the “2022 Share Repurchase Program”) under which the Company was authorized to repurchase up to $ 125.0 million of its outstanding common stock.

The 2022 Share Repurchase Program will expire on August 9, 2023.

As of March 27, 2022, $ 113.3 million remained available for repurchase under the 2022 Share Repurchase Program.

Following is a summary of the shares repurchased under the Company’s share repurchase program during fiscal year 2022:

(in thousands, except per share data) NUMBER OF SHARES AVERAGE REPURCHASE PRICE PER SHARE AMOUNT

First fiscal quarter (1) 551 $ 21.26 $ 11,702

________________

(1) Subsequent to March 27, 2022, the Company repurchased 723 thousand shares of its common stock for $ 15.6 million under a Rule 10b5-1 plan.

Dividends - The Company declared and paid dividends per share during fiscal year 2022 as follows:

(dollars in thousands, except per share data) DIVIDENDS PER SHARE AMOUNT

First fiscal quarter $ 0.14 $ 12,559

In April 2022, the Board declared a quarterly cash dividend of $ 0.14 per share, payable on May 25, 2022 to shareholders of record at the close of business on May 11, 2022 .

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

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

(dollars in thousands) MARCH 27, 2022 DECEMBER 26, 2021

Foreign currency translation adjustment $ ( 184,197 ) $ ( 195,480 )

2 unchanged sentences

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 27, 2022 MARCH 28, 2021

Foreign currency translation adjustment $ 11,283 $ ( 6,575 )

Unrealized (loss) gain on derivatives, net of tax (1) ( 153 ) 261 ( 323 ) ( 14,631 )

Reclassification of adjustments for loss on derivatives included in Net income (loss), net of tax (2) 1,519 2,962 6,036 6,943

Amortization of terminated interest rate swaps, net of tax 1,479 — 2,950 —

Total unrealized gain (loss) on derivatives, net of tax 2,845 3,223 8,663 ( 7,688 )

Unrealized gain (loss) on derivatives, net of tax 573 ( 42 )

Reclassification of adjustments for loss on derivatives included in Net income, net of tax (1) 681 3,003

Impact of terminated interest rate swaps included in Net income, net of tax 3,021 —

Total unrealized gain on derivatives, net of tax 4,275 2,961

Other comprehensive income (loss) attributable to Bloomin’ Brands $ 15,558 $ ( 3,614 )

________________

(1) Unrealized loss on derivatives is net of tax of $ 5.1 million for the thirty-nine weeks ended September 27, 2020.

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

(1) See Note 10 - Derivative Instruments and Hedging Activities for the tax impact of reclassifications.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

Derivative Instruments and Hedging Activities

1 unchanged sentence

The swap agreements had an aggregate notional amount of $ 550.0 million and mature on November 30, 2022 .

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

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

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

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

During 2021, the Company terminated variable-to-fixed interest rate swap agreements with certain counterparties and as a result, as of March 27, 2022 had interest rate swap agreements remaining with two counterparties for an aggregate notional amount of $ 125.0 million.

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

As of September 26, 2021, the Company estimated $ 16.1 million will be reclassified to Interest expense, net over the next 12 fiscal months, including interest expense related to the terminated swap agreements discussed above.

As of March 27, 2022, the Company estimated $ 8.5 million will be reclassified to Interest expense, net through the November 2022 maturity date of the swaps, including interest expense related to the terminated swap agreements.

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

(dollars in thousands) SEPTEMBER 26, 2021 DECEMBER 27, 2020 CONSOLIDATED BALANCE SHEET CLASSIFICATION

(dollars in thousands) MARCH 27, 2022 DECEMBER 26, 2021 CONSOLIDATED BALANCE SHEET CLASSIFICATION

Interest rate swaps - liability (1) $ 1,368 $ 3,056 Accrued and other current liabilities

Interest rate swaps - liability 1,917 15,640 Other long-term liabilities, net

Total fair value of derivative instruments - liabilities (1) $ 9,419 $ 30,495

Accrued interest $ 275 $ 276 Accrued and other current liabilities

1 unchanged sentence

(1) See Note 12 - Fair Value Measurements for fair value discussion of the interest rate swaps.

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 27, 2022 MARCH 28, 2021

Interest rate swap expense recognized in Interest expense, net $ ( 917 ) $ ( 4,044 )

Income tax benefit recognized in (Benefit) provision for income taxes 526 1,029 2,091 2,410

Total effects on Net income (loss) $ ( 1,519 ) $ ( 2,962 ) $ ( 6,036 ) $ ( 6,943 )

Income tax benefit recognized in Provision for income taxes 236 1,041

Total effects on Net income (1) $ ( 681 ) $ ( 3,003 )

____________________

(1) Excludes the effects on Net income of terminated interest rate swaps.

By utilizing the interest rate swaps, the Company is exposed to credit-related losses in the event that the counterparty fails to perform under the terms of the derivative contract.

1 unchanged sentence

The Company continually assesses the creditworthiness of its counterparties.

As of September 26, 2021, all counterparties to the interest rate swaps had performed in accordance with their contractual obligations.

As of March 27, 2022, all counterparties to the interest rate swaps had performed in accordance with their contractual obligations.

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

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

As of September 26, 2021 and December 27, 2020, the fair value of the Company’s interest rate swaps was in a net liability position, including accrued interest but excluding any adjustment for nonperformance risk, of $ 10.1 million and $ 32.2 million, respectively.

As of September 26, 2021 and December 27, 2020, the Company has not posted any collateral related to these agreements.

If the Company had breached any of these provisions as of September 26, 2021 and December 27, 2020, it could have been required to settle its obligations under the agreements at their termination value of $ 10.1 million and $ 32.2 million, respectively.

In connection with the Amended Credit Agreement, on April 26, 2022 the Company terminated its remaining variable-to-fixed interest rate swap agreements.

Following these terminations, the unrealized losses related to the terminated swap agreements included in Accumulated other comprehensive loss will be amortized to Interest expense, net during 2022.

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

(dollars in thousands) CONSOLIDATED BALANCE SHEET CLASSIFICATION SEPTEMBER 26, 2021 DECEMBER 27, 2020

(dollars in thousands) CONSOLIDATED BALANCE SHEET CLASSIFICATION MARCH 27, 2022 DECEMBER 26, 2021

Operating lease right-of-use assets Operating lease right-of-use assets $ 1,124,517 $ 1,130,873

7 unchanged sentences

________________

(1) Net of accumulated amortization of $ 3.1 million and $ 2.3 million as of September 26, 2021 and December 27, 2020, respectively.

(2) Excludes COVID-19-related deferred rent accruals of $ 2.1 million and $ 12.8 million as of September 26, 2021 and December 27, 2020, respectively, and accrued contingent percentage rent of $ 3.6 million and $ 2.7 million, as of September 26, 2021 and December 27, 2020, respectively.

(3) Excludes COVID-19-related non-current deferred rent accruals of $ 0.6 million and $ 1.2 million as of September 26, 2021 and December 27, 2020, respectively.

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

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

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

(1) Net of accumulated amortization of $ 3.7 million and $ 3.3 million as of March 27, 2022 and December 26, 2021, respectively.

(2) Excludes current accrued contingent percentage rent of $ 4.0 million and $ 3.5 million, as of March 27, 2022 and December 26, 2021, respectively, and immaterial current and non-current COVID-19-related deferred rent accruals.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME CLASSIFICATION THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 27, 2022 MARCH 28, 2021

Operating leases (1) Other restaurant operating $ 45,361 $ 44,792

6 unchanged sentences

________________

(1) Excludes rent expense for office facilities and Company-owned closed or subleased properties of $ 3.2 million and $ 3.6 million for the thirteen weeks ended September 26, 2021 and September 27, 2020, respectively, and $ 9.9 million and $ 10.4 million for the thirty-nine weeks ended September 26, 2021 and September 27, 2020, respectively, which is included in General and administrative expense.

Also excludes certain immaterial supply chain related rent expense included in Food and beverage costs.

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

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

THIRTY-NINE WEEKS ENDED

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

(1) Excludes rent expense for office facilities and Company-owned closed or subleased properties of $ 3.0 million and $ 3.5 million for the thirteen weeks ended March 27, 2022 and March 28, 2021, respectively, which is included in General and administrative expense.

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

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 27, 2022 MARCH 28, 2021

Cash flows from operating activities:

6 unchanged sentences

Level 3 Unobservable inputs that cannot be corroborated by observable market data

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

SEPTEMBER 26, 2021 DECEMBER 27, 2020

MARCH 27, 2022 DECEMBER 26, 2021

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

7 unchanged sentences

Derivative instruments - interest rate swaps $ 1,368 $ — $ 1,368 $ 3,056 $ — $ 3,056

Other long-term liabilities:

Derivative instruments - interest rate swaps 1,917 — 1,917 15,640 — 15,640

Total liability recurring fair value measurements $ 1,368 $ — $ 1,368 $ 3,056 $ — $ 3,056

6 unchanged sentences

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

As of September 26, 2021 and December 27, 2020, the Company has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

Carrying value after impairment approximates fair value.

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

THIRTY-NINE WEEKS ENDED

SEPTEMBER 26, 2021 SEPTEMBER 27, 2020

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

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

Operating lease right-of-use assets (1) 7,651 1,466 70,841 23,567

Property, fixtures and equipment (2) 8,928 7,260 27,978 38,381

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

$ 16,579 $ 8,726 $ 100,749 $ 64,706

____________________

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

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

All other assets were valued using Level 3 inputs.

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

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

See Note 4 - Impairments and Exit Costs for information regarding impairment charges resulting from the fair value measurement performed on a nonrecurring basis during the thirty-nine weeks ended September 27, 2020.

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

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

In assessment of impairment for operating locations, the Company determined the fair values of individual operating locations using an income approach, which required discounting projected future cash flows.

When determining the stream of projected future cash flows associated with an individual operating location, management made assumptions, including highest and best use and inputs from restaurant operations, where necessary, and about key variables including the following unobservable inputs:

revenue growth rates, controllable and uncontrollable expenses, and asset residual values.

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

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

THIRTY-NINE WEEKS ENDED

UNOBSERVABLE INPUTS SEPTEMBER 27, 2020

Weighted-average cost of capital 10.4 % to 11.3 %

Long-term growth rate 1.5 % to 2.0 %

As of March 27, 2022 and December 26, 2021, the Company has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives.

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

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

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

Debt is carried at amortized cost;

1 unchanged sentence

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

SEPTEMBER 26, 2021 DECEMBER 27, 2020

MARCH 27, 2022 DECEMBER 26, 2021

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

3 unchanged sentences

Revolving credit facility $ 10,000 $ 9,750 $ 80,000 $ 76,926

Former Credit Facility:

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

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

2025 Notes $ 230,000 $ 441,515 $ 230,000 $ 447,615

2029 Notes $ 300,000 $ 286,647 $ 300,000 $ 304,395

Allowance for Expected Credit Losses

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

Allowance for expected credit losses, beginning of period $ 3,989 $ 4,566 $ 4,095 $ 199

Adjustment for adoption of ASU No.

2016-13 — — — 1,018

Provision for expected credit losses (1) — 2 — 3,351

Charge-off of accounts ( 2 ) ( 29 ) ( 108 ) ( 29 )

Allowance for expected credit losses, end of period $ 3,987 $ 4,539 $ 3,987 $ 4,539

________________

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

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

The Company is also exposed to credit losses from off-balance sheet lease guarantees primarily related to the divestiture of certain formerly Company-owned restaurant sites.

See Note 19 - Commitments and Contingencies for details regarding these lease guarantees.

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

Income (loss) before (benefit) provision for income taxes $ 597 $ ( 32,554 ) $ 184,562 $ ( 214,830 )

(Benefit) provision for income taxes $ ( 4,454 ) $ ( 14,776 ) $ 24,827 $ ( 70,210 )

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

________________

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.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(UNAUDITED) - Continued

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.

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

The Company expects to increase its general business credit carryforwards in 2021 by approximately $ 5 million to $ 10 million.

The Company currently expects to utilize these tax credit carryforwards within a 10-year period.

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 27, 2022 MARCH 28, 2021

Income before provision for income taxes $ 93,623 $ 76,391

Provision for income taxes $ 15,929 $ 6,593

Effective income tax rate 17.0 % 8.6 %

The effective income tax rate for the thirteen weeks ended March 27, 2022 increased by 8.4 percentage points as compared to the thirteen weeks ended March 28, 2021.

The increase was primarily due to the change in the amount and mix of forecasted pre-tax book income across the Company’s U.S.

and international subsidiaries.

On December 28, 2021, the U.S.

Treasury and the Internal Revenue Service released final regulations that, among other things, provide guidance on several aspects of the foreign tax credit rules.

As part of the guidance issued, these regulations change longstanding foreign tax credit regulations that now make foreign taxes paid to certain countries no longer creditable in the United States.

The Company expects that a portion of post-2021 foreign taxes paid will not be creditable in the United States.

Furthermore, the impact of these regulations will result in the utilization of a portion of existing prior year foreign tax credit carryforwards for which the Company had previously recorded a valuation allowance.

The valuation allowance related to the credits expected to be utilized will be released during 2022.

The impact of non-creditable foreign taxes and the release of the valuation allowance has been considered as part of the effective income tax rate for the thirteen weeks ended March 27, 2022.

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

The effective income tax rate for the thirty-nine weeks ended September 26, 2021 was lower than the statutory rate primarily due to the benefit of FICA tax credits on certain employees’ tips.

The effective income tax rates for the thirteen weeks ended March 27, 2022 and March 28, 2021 were lower than the statutory rate primarily due to the benefit of FICA tax credits on certain employees’ tips.

Commitments and Contingencies

8 unchanged sentences

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

The Company recorded reserves of $ 6.3 million and $ 4.6 million for certain of its outstanding legal proceedings as of September 26, 2021 and December 27, 2020, respectively, within Accrued and other current liabilities and Other long-term liabilities on its Consolidated Balance Sheets.

The Company recorded reserves of $ 7.5 million and $ 7.1 million for certain of its outstanding legal proceedings as of March 27, 2022 and December 26, 2021, respectively, within Accrued and other current liabilities and Other long-term liabilities on its Consolidated Balance Sheets.

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

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

The Company intends to defend itself in legal matters.

2 unchanged sentences

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

The Company believes that the ultimate determination of liability in connection with

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

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

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

1 unchanged sentence

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

As of September 26, 2021, the undiscounted payments that the Company could be required to make in the event of non-payment by the primary lessees was approximately $ 25.9 million.

The present value of these potential payments discounted at the Company’s incremental borrowing rate as of September 26, 2021 was approximately $ 21.2 million.

As of March 27, 2022, the undiscounted payments that the Company could be required to make in the event of non-payment by the primary lessees was approximately $ 24.2 million.

The present value of these potential payments discounted at the Company’s incremental borrowing rate as of March 27, 2022 was approximately $ 20.0 million.

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

As of September 26, 2021, the Company’s recorded contingent lease liability was $ 8.8 million.

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

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

was terminated.

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

As of March 27, 2022 and December 26, 2021, the Company’s recorded contingent lease liability was $ 9.0 million and $ 8.7 million, respectively.

Segment Reporting

18 unchanged sentences

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

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

Excluded from Income from operations for U.S.

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

3 unchanged sentences

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 27, 2022 MARCH 28, 2021

Total revenues

2 unchanged sentences

Total revenues $ 1,140,535 $ 987,473

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

Segment income (loss) from operations

The following table is a reconciliation of segment income from operations to Income before provision for income taxes, for the periods indicated:

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 27, 2022 MARCH 28, 2021

Segment income from operations

$ 132,226 $ 121,735

International 8,884 3,537

Total segment income (loss) from operations 48,706 21,648 341,745 ( 40,177 )

Total segment income from operations 141,110 125,272

Unallocated corporate operating expense ( 33,854 ) ( 34,274 )

Total income (loss) from operations 14,837 ( 14,255 ) 230,472 ( 167,735 )

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

Other income (expense), net 5 1 26 ( 211 )

Total income from operations 107,256 90,998

Other income, net — 21

Interest expense, net ( 13,633 ) ( 14,628 )

Income (loss) before (benefit) provision for income taxes $ 597 $ ( 32,554 ) $ 184,562 $ ( 214,830 )

____________________

(1) The thirteen and thirty-nine weeks ended September 27, 2020 include $ 4.2 million and $ 28.8 million, respectively, of charges that were not allocated to the Company’s segments related to its transformational initiatives, primarily recorded within General and administrative expense and Provision for impaired assets and restaurant closings.

Income before provision for income taxes $ 93,623 $ 76,391

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 27, 2022 MARCH 28, 2021

Depreciation and amortization

3 unchanged sentences

Total depreciation and amortization $ 41,775 $ 41,226

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

THIRTY-NINE WEEKS ENDED

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

Capital expenditures

$ 74,076 $ 45,094

International 8,985 12,567

Corporate 6,513 3,384

Total capital expenditures $ 89,574 $ 61,045

BLOOMIN’ BRANDS, INC.

2 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements