What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-08-02 compared with 2022-05-03 · 324 added, 172 removed, 477 unchanged (51% of the section changed)

2 unchanged sentences

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

MARCH 27, 2022 DECEMBER 26, 2021

JUNE 26, 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 March 27, 2022 and December 26, 2021

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

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

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

90,151,164 and 89,252,823 shares issued and outstanding as of June 26, 2022 and December 26, 2021, respectively

Additional paid-in capital 1,169,697 1,119,728

7 unchanged sentences

BLOOMIN’ BRANDS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)

THIRTEEN WEEKS ENDED

MARCH 27, 2022 MARCH 28, 2021

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

JUNE 26, 2022 JUNE 27, 2021 JUNE 26, 2022 JUNE 27, 2021

Restaurant sales $ 1,108,918 $ 1,055,227 $ 2,232,493 $ 2,034,678

10 unchanged sentences

Income from operations 87,719 124,637 194,975 215,635

Loss on extinguishment and modification of debt ( 107,630 ) ( 2,073 ) ( 107,630 ) ( 2,073 )

Loss on fair value adjustment of derivatives, net ( 17,685 ) — ( 17,685 ) —

Other income, net — — — 21

Interest expense, net ( 12,548 ) ( 14,990 ) ( 26,181 ) ( 29,618 )

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

(Loss) income before provision for income taxes ( 50,144 ) 107,574 43,479 183,965

Provision for income taxes 11,536 22,688 27,465 29,281

Net income 77,694 69,798

Net (loss) income ( 61,680 ) 84,886 16,014 154,684

net income attributable to noncontrolling interests 1,955 2,341 4,138 3,277

Net income attributable to Bloomin’ Brands

Net (loss) income attributable to Bloomin’ Brands

$ ( 63,635 ) $ 82,545 $ 11,876 $ 151,407

Net income $ 77,694 $ 69,798

Other comprehensive income:

Net (loss) income $ ( 61,680 ) $ 84,886 $ 16,014 $ 154,684

Other comprehensive (loss) income:

Foreign currency translation adjustment 11,940 10,015 23,223 3,440

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

Unrealized (loss) gain on derivatives, net of tax — ( 128 ) 573 ( 170 )

Reclassification of adjustments for loss on derivatives included in Net (loss) income, net of tax 273 1,514 954 4,517

Impact of terminated interest rate swaps included in Net (loss) income, net of tax 2,164 1,471 5,185 1,471

Comprehensive (loss) income ( 47,303 ) 97,758 45,949 163,942

comprehensive income attributable to noncontrolling interests 1,955 2,341 4,138 3,277

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

Earnings per share:

Comprehensive (loss) income attributable to Bloomin’ Brands $ ( 49,258 ) $ 95,417 $ 41,811 $ 160,665

(Loss) earnings per share:

Basic $ ( 0.72 ) $ 0.93 $ 0.13 $ 1.71

12 unchanged sentences

SHARES AMOUNT

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

Net (loss) income — — — ( 63,635 ) — 1,955 ( 61,680 )

Other comprehensive income, net of tax — — — — 14,377 — 14,377

Cash dividends declared, $ 0.14 per common share

— — ( 12,418 ) — — — ( 12,418 )

Repurchase and retirement of common stock ( 1,761 ) ( 17 ) — ( 35,732 ) — — ( 35,749 )

Stock-based compensation — — 4,959 — — — 4,959

Common stock issued under stock plans (1) 414 4 1,118 — — — 1,122

Purchase of noncontrolling interests, net of tax of $ 1,142

— — ( 3,301 ) — — 539 ( 2,762 )

Distributions to noncontrolling interests — — — — — ( 2,513 ) ( 2,513 )

Contributions from noncontrolling interests — — — — — 244 244

Retirement of convertible senior note hedges — — 112,956 — — — 112,956

Retirement of warrants — — ( 97,617 ) — — — ( 97,617 )

Issuance of common stock from repurchase of convertible senior notes 2,313 23 48,542 — — — 48,565

June 26, 2022 90,151 $ 902 $ 1,169,697 $ ( 733,723 ) $ ( 176,054 ) $ 1,919 $ 262,741

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

10 unchanged sentences

Contributions from noncontrolling interests — — — — — 461 461

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

Retirement of convertible senior note hedges — — 112,956 — — — 112,956

Retirement of warrants — — ( 97,617 ) — — — ( 97,617 )

Issuance of common stock from repurchase of convertible senior notes 2,313 23 48,542 — — — 48,565

June 26, 2022 90,151 $ 902 $ 1,169,697 $ ( 733,723 ) $ ( 176,054 ) $ 1,919 $ 262,741

BLOOMIN’ BRANDS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)

BLOOMIN’ BRANDS, INC.

COMMON STOCK ADDITIONAL PAID-IN CAPITAL ACCUM-

2 unchanged sentences

SHARES AMOUNT

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

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

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

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

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

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

Contributions from noncontrolling interests — — — — — 159 159

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

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

1 unchanged sentence

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

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

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

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

2 unchanged sentences

Contributions from noncontrolling interests — — — — — 670 670

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

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

________________

4 unchanged sentences

(DOLLARS IN THOUSANDS, UNAUDITED)

THIRTEEN WEEKS ENDED

MARCH 27, 2022 MARCH 28, 2021

TWENTY-SIX WEEKS ENDED

JUNE 26, 2022 JUNE 27, 2021

Cash flows provided by operating activities:

9 unchanged sentences

Deferred income tax expense 8,329 10,300

Loss on extinguishment and modification of debt 107,630 2,073

Loss on fair value adjustment of derivatives, net 17,685 —

Other, net 4,935 ( 1,343 )

2 unchanged sentences

Cash flows used in investing activities:

Proceeds from disposal of property, fixtures and equipment 163 4,828

Capital expenditures ( 76,901 ) ( 51,398 )

1 unchanged sentence

Net cash used in investing activities $ ( 75,738 ) $ ( 42,625 )

(CONTINUED...)

BLOOMIN’ BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(DOLLARS IN THOUSANDS, UNAUDITED)

TWENTY-SIX WEEKS ENDED

JUNE 26, 2022 JUNE 27, 2021

Cash flows used in financing activities:

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

Repayments of long-term debt and finance lease obligations ( 195,733 ) ( 425,564 )

1 unchanged sentence

Repayments of borrowings on revolving credit facilities ( 304,500 ) ( 599,000 )

Financing fees ( 853 ) ( 5,868 )

Proceeds from issuance of senior notes — 300,000

Issuance costs related to senior notes — ( 5,546 )

Repurchase of convertible senior notes ( 196,919 ) —

Proceeds from retirement of convertible senior note hedges 131,869 —

Payments for retirement of warrants ( 114,825 ) —

Proceeds from share-based compensation, net 2,007 9,925

7 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents 4,232 128

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

Net increase (decrease) in cash, cash equivalents and restricted cash 6,390 ( 7,333 )

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 $ 2,417 $ 48

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

Increase (decrease) in liabilities from the acquisition of property, fixtures and equipment $ 2,545 $ ( 203 )

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

16 unchanged sentences

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.

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

Upon adoption of ASU No.

2021-10 during the fourth quarter of 2022, the Company anticipates government assistance financial statement footnote disclosures within the 2022 Form 10-K, primarily in connection with employee retention credits provided under the Coronavirus, Aid, Relief and Economic Security (“CARES”) Act.

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

1 unchanged sentence

These reclassifications had no effect on previously reported net income.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

Revenue Recognition

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

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 26, 2022 JUNE 27, 2021 JUNE 26, 2022 JUNE 27, 2021

Restaurant sales $ 1,108,918 $ 1,055,227 $ 2,232,493 $ 2,034,678

4 unchanged sentences

Total revenues $ 1,125,162 $ 1,077,366 $ 2,265,697 $ 2,064,839

________________

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

The amount recognized as a result of the favorable court rulings primarily represents refundable PIS and COFINS taxes for prior years, including accrued interest.

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

THIRTEEN WEEKS ENDED

JUNE 26, 2022 JUNE 27, 2021

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

Outback Steakhouse $ 573,563 $ 8,156 $ 579,096 $ 8,418

Carrabba’s Italian Grill 170,190 797 171,408 665

Bonefish Grill 145,472 173 149,036 174

Fleming’s Prime Steakhouse & Wine Bar 93,933 — 88,101 —

Other 2,769 8 2,652 —

total 985,927 9,134 990,293 9,257

International

Outback Steakhouse Brazil 100,647 — 43,310 —

Other (1) 22,344 3,462 21,624 2,964

International total 122,991 3,462 64,934 2,964

Total $ 1,108,918 $ 12,596 $ 1,055,227 $ 12,221

________________

(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.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(UNAUDITED) - Continued

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

MARCH 27, 2022 MARCH 28, 2021

TWENTY-SIX WEEKS ENDED

JUNE 26, 2022 JUNE 27, 2021

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

14 unchanged sentences

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

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

(dollars in thousands) JUNE 26, 2022 DECEMBER 26, 2021

Other current assets, net

9 unchanged sentences

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

THIRTEEN WEEKS ENDED

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

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 26, 2022 JUNE 27, 2021 JUNE 26, 2022 JUNE 27, 2021

Balance, beginning of the period $ 13,033 $ 13,502 $ 17,793 $ 19,300

Deferred gift card sales commissions amortization ( 5,441 ) ( 5,711 ) ( 13,458 ) ( 14,436 )

1 unchanged sentence

Other ( 690 ) ( 540 ) ( 1,602 ) ( 1,112 )

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

Balance, end of the period $ 12,338 $ 12,548 $ 12,338 $ 12,548

BLOOMIN’ BRANDS, INC.

2 unchanged sentences

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

THIRTEEN WEEKS ENDED

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

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 26, 2022 JUNE 27, 2021 JUNE 26, 2022 JUNE 27, 2021

Balance, beginning of the period $ 314,974 $ 306,075 $ 387,945 $ 373,048

Gift card sales 65,174 63,921 115,454 108,090

1 unchanged sentence

Gift card breakage ( 4,176 ) ( 4,182 ) ( 10,805 ) ( 10,384 )

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

Earnings Per Share

Balance, end of the period $ 303,544 $ 293,955 $ 303,544 $ 293,955

Impairments and Exit Costs

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

Impairment losses

$ 5,768 $ 7,174

International ( 555 ) 152

Corporate 209 238

Total impairment losses 5,422 7,564

Restaurant closure benefits

( 92 ) ( 34 )

International ( 153 ) ( 153 )

Total restaurant closure benefits ( 245 ) ( 187 )

Provision for impaired assets and restaurant closings $ 5,177 $ 7,377

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 2022 and 2021 assessments were qualitative.

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

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

TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 26, 2022

Balance, beginning of the period $ 8,485

Cash payments ( 2,308 )

Accretion 304

Adjustments ( 323 )

Balance, end of the period (1) $ 6,158

________________

(1) As of June 26, 2022, the Company had exit-related accruals related to certain closure and restructuring initiatives of $ 1.6 million recorded in Accrued and other current liabilities and $ 4.6 million recorded in Non-current operating lease liabilities on its Consolidated Balance Sheet .

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

(Loss) 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.

2 unchanged sentences

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

In connection with dividends paid during the twenty-six weeks ended June 26, 2022, the conversion price of the 2025 Notes decreased to $ 11.74 per share of common stock and the strike price of the related warrants decreased to $ 16.43 per share of common stock.

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(in thousands, except per share data) JUNE 26, 2022 JUNE 27, 2021 JUNE 26, 2022 JUNE 27, 2021

Net (loss) income attributable to Bloomin’ Brands

$ ( 63,635 ) $ 82,545 $ 11,876 $ 151,407

Convertible senior notes if-converted method interest adjustment, net of tax (1) — — — 691

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

Diluted net (loss) income attributable to Bloomin’ Brands $ ( 63,635 ) $ 82,545 $ 11,876 $ 152,098

Basic weighted average common shares outstanding 88,898 89,075 89,127 88,721

6 unchanged sentences

Diluted weighted average common shares outstanding 88,898 109,805 102,045 110,223

Basic earnings per share $ 0.85 $ 0.78

Diluted earnings per share $ 0.73 $ 0.63

Basic (loss) earnings per share $ ( 0.72 ) $ 0.93 $ 0.13 $ 1.71

Diluted (loss) earnings per share $ ( 0.72 ) $ 0.75 $ 0.12 $ 1.38

________________

(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.

(2) During the thirteen weeks ended June 26, 2022, the Company repurchased $ 125.0 million of the 2025 Notes and retired the corresponding portion of the related warrants.

See Note 8 - Convertible Senior Notes for additional details.

Due to the Company’s net loss during the thirteen weeks ended June 26, 2022, dilutive excess shares and warrants were excluded from the computation of diluted earnings per share as their effect would be antidilutive.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(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

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(shares in thousands) JUNE 26, 2022 JUNE 27, 2021 JUNE 26, 2022 JUNE 27, 2021

Stock options 2,563 — 1,870 682

3 unchanged sentences

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

THIRTEEN WEEKS ENDED

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 26, 2022 JUNE 27, 2021 JUNE 26, 2022 JUNE 27, 2021

Performance-based share units (1) $ 2,840 $ 7,318 $ 5,459 $ 8,787

2 unchanged sentences

$ 4,922 $ 9,751 $ 9,728 $ 14,451

________________

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

In February 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.

2 unchanged sentences

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

TWENTY-SIX WEEKS ENDED

JUNE 26, 2022 JUNE 27, 2021

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

7 unchanged sentences

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

(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:

(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 % for grants during the twenty-six weeks ended June 26, 2022 and June 27, 2021, respectively.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

The following represents unrecognized stock-based compensation expense and the remaining weighted average vesting period as of June 26, 2022:

UNRECOGNIZED COMPENSATION EXPENSE

2 unchanged sentences

Restricted stock units $ 11,342 1.9

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

Other Current Assets, Net

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

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

(dollars in thousands) JUNE 26, 2022 DECEMBER 26, 2021

Prepaid expenses $ 28,000 $ 21,194

9 unchanged sentences

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

MARCH 27, 2022 DECEMBER 26, 2021

JUNE 26, 2022 DECEMBER 26, 2021

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

12 unchanged sentences

________________

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

(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

(1) Interest rate represents the weighted average interest rate as of December 26, 2021.

(2) Interest rate represents the weighted average interest rate as of June 26, 2022 and the base rate option elected in anticipation of impending repayment as of December 26, 2021.

(3) During the thirteen weeks ended June 26, 2022, the Company repurchased $ 125.0 million of the 2025 Notes.

See Note 8 - Convertible Senior Notes for additional details.

(4) In connection with the Amended Credit Agreement and the partial repurchase of the 2025 Notes, $ 5.7 million of debt issuance costs were written off during the thirteen weeks ended June 26, 2022.

See Note 8 - Convertible Senior Notes for additional details.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(UNAUDITED) - Continued

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.

4 unchanged sentences

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:

The interest rate spreads are as follows:

BASE RATE ELECTION ADJUSTED TERM SOFR ELECTION

3 unchanged sentences

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

As of June 26, 2022 and December 26, 2021, the Company was in compliance with its debt covenants.

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

(dollars in thousands) JUNE 26, 2022

Year 1 $ 1,543

Year 3 105,770

Year 4 400,306

Thereafter 300,044

Total payments 809,228

unamortized debt discount and issuance costs ( 7,176 )

finance lease interest ( 319 )

Total principal payments $ 801,733

Convertible Senior Notes

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.

2025 Notes - On May 25, 2022, the Company entered into exchange agreements (the “Exchange Agreements”) with certain holders (the “Noteholders”) of the 2025 Notes.

The Noteholders agreed to exchange $ 125.0 million in

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

aggregate principal amount of the Company’s outstanding 2025 Notes for $ 196.9 million in cash, plus accrued interest, and approximately 2.3 million shares of the Company’s common stock (the “2025 Notes Partial Repurchase”).

Under the Exchange Agreements, the total amount of cash paid and number of shares of common stock issued by the Company were based upon the volume-weighted average price per share of the Company’s common stock during a ten-trading day averaging period ending on June 14, 2022.

Upon entering into the Exchange Agreements, the conversion feature related to the 2025 Notes repurchased, as well as the settlements of the related convertible senior note hedges and warrants, were subject to derivative accounting.

In connection with the 2025 Notes Partial Repurchase, the Company recognized a loss on extinguishment of debt of $ 104.7 million and a loss on fair value adjustment of derivatives, net of $ 17.7 million, and recorded a $ 48.5 million increase to Additional paid-in capital during the thirteen weeks ended June 26, 2022.

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.

In connection with dividends paid during the twenty-six weeks ended June 26, 2022, the conversion rate for the remaining 2025 Notes decreased to approximately $ 11.74 per share, which represents 85.185 shares of common stock per $ 1,000 principal amount of the 2025 Notes, or a total of approximately 8.944 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) MARCH 27, 2022 DECEMBER 26, 2021

(dollars in thousands) JUNE 26, 2022 DECEMBER 26, 2021

Long-term debt, net

4 unchanged sentences

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

During the thirteen weeks ended June 26, 2022, the Company wrote off $ 2.8 million of debt issuance costs as a result of the 2025 Notes Partial Repurchase.

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

THIRTEEN WEEKS ENDED

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 26, 2022 JUNE 27, 2021 JUNE 26, 2022 JUNE 27, 2021

Coupon interest $ 2,597 $ 2,875 $ 5,472 $ 5,750

Deferred issuance cost amortization 404 381

Debt issuance cost amortization 370 386 774 767

Total interest expense (1) $ 2,967 $ 3,261 $ 6,246 $ 6,517

1 unchanged sentence

(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.

Based on the daily closing prices of the Company’s stock during the quarter ended June 26, 2022, the remaining holders of the 2025 Notes are eligible to convert their 2025 Notes during the third quarter of 2022.

Convertible Note Hedge and Warrant Transactions - In connection with the 2025 Notes Partial Repurchase, the Company entered into partial unwind agreements with certain financial institutions relating to a portion of the convertible note hedge transactions (the “Note Hedge Early Termination Agreements”) and a portion of the Warrant Transactions (the “Warrant Early Termination Agreements”) that were previously entered into by the Company in connection with the issuance of the 2025 Notes.

Upon settlement, the Company received $ 131.9 million for the Note Hedge Early Termination Agreements and paid $ 114.8 million for the Warrant Early Termination Agreements during the thirteen weeks ended June 26, 2022.

In connection with the Note Hedge Early Termination Agreements and the Warrant Early Termination Agreements the Company recorded a $ 113.0 million increase and a $ 97.6 million decrease, respectively, to Additional paid-in capital during the thirteen weeks ended June 26, 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 remaining 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 .

In connection with dividends paid during the twenty-six weeks ended June 26, 2022, the strike price for the remaining Warrant Transactions decreased to $ 16.43 .

Other Long-term Liabilities, Net

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

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

(dollars in thousands) JUNE 26, 2022 DECEMBER 26, 2021

Accrued insurance liability $ 29,281 $ 31,517

4 unchanged sentences

_______________

(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.

(1) During the twenty-six weeks ended June 26, 2022, the Company reclassified $ 27.3 million of payroll taxes deferred under the CARES Act to current.

Stockholders’ Equity

1 unchanged sentence

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:

As of June 26, 2022, $ 77.5 million remained available for repurchase under the 2022 Share Repurchase Program.

Following is a summary of the shares repurchased under the 2022 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 551 $ 21.26 $ 11,702

Second fiscal quarter 1,761 $ 20.30 35,749

Total common stock repurchases (1) 2,312 $ 20.53 $ 47,451

________________

(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.

(1) Subsequent to June 26, 2022, the Company repurchased 854 thousand shares of its common stock for $ 14.9 million under a Rule 10b5-1 plan through July 28, 2022.

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

1 unchanged sentence

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 .

Second fiscal quarter 0.14 12,418

Total cash dividends declared and paid $ 0.28 $ 24,977

In July 2022, the Board declared a quarterly cash dividend of $ 0.14 per share, payable on August 24, 2022 to shareholders of record at the close of business on August 10, 2022 .

BLOOMIN’ BRANDS, INC.

2 unchanged sentences

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

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

(dollars in thousands) JUNE 26, 2022 DECEMBER 26, 2021

Foreign currency translation adjustment $ ( 172,257 ) $ ( 195,480 )

1 unchanged sentence

Accumulated other comprehensive loss $ ( 176,054 ) $ ( 205,989 )

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

THIRTEEN WEEKS ENDED

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

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 26, 2022 JUNE 27, 2021 JUNE 26, 2022 JUNE 27, 2021

Foreign currency translation adjustment $ 11,940 $ 10,015 $ 23,223 $ 3,440

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 )

Unrealized (loss) gain on derivatives, net of tax — ( 128 ) 573 ( 170 )

Reclassification of adjustments for loss on derivatives included in Net (loss) income, net of tax (1) 273 1,514 954 4,517

Impact of terminated interest rate swaps included in Net (loss) income, net of tax (1) 2,164 1,471 5,185 1,471

Total gain on derivatives, net of tax 2,437 2,857 6,712 5,818

Other comprehensive income attributable to Bloomin’ Brands $ 14,377 $ 12,872 $ 29,935 $ 9,258

________________

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

(1) See Note 11 - Derivative Instruments and Hedging Activities for the tax impact of reclassifications and the terminated swaps.

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 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 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) MARCH 27, 2022 DECEMBER 26, 2021 CONSOLIDATED BALANCE SHEET CLASSIFICATION

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

During 2021, the Company terminated its variable-to-fixed interest rate swap agreements with certain counterparties and as a result, as of December 26, 2021 had interest rate swap agreements remaining with two counterparties for an aggregate notional amount of $ 125.0 million.

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 Company’s swap agreements were designated and qualified as cash flow hedges, recognized on its Consolidated Balance Sheet at fair value as of December 26, 2021 and classified based on the instruments’ maturity dates.

As of June 26, 2022, the Company estimated $ 5.2 million of interest expense from the terminated swap agreements will be reclassified to Interest expense, net through the November 2022 maturity date of the swaps.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

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

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

2 unchanged sentences

(1) See Note 13 - Fair Value Measurements for fair value discussion of the interest rate swaps.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

THIRTEEN WEEKS ENDED

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

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 26, 2022 JUNE 27, 2021 JUNE 26, 2022 JUNE 27, 2021

Interest rate swap agreements:

Interest rate swap expense recognized in Interest expense, net $ ( 367 ) $ ( 2,038 ) $ ( 1,284 ) $ ( 6,082 )

Income tax benefit recognized in Provision for income taxes 94 524 330 1,565

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.

To mitigate this risk, the Company enters into derivative contracts with major financial institutions based upon credit ratings and other factors.

The Company continually assesses the creditworthiness of its counterparties.

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.

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.

Net effects of interest rate swap agreements $ ( 273 ) $ ( 1,514 ) $ ( 954 ) $ ( 4,517 )

Terminated interest rate swap agreements:

Terminated interest rate swap expense recognized in Interest expense, net $ ( 2,913 ) $ ( 1,981 ) $ ( 6,980 ) $ ( 1,981 )

Income tax benefit recognized in Provision for income taxes 749 510 1,795 510

Net effects of terminated interest rate swap agreements $ ( 2,164 ) $ ( 1,471 ) $ ( 5,185 ) $ ( 1,471 )

Total net effects on Net (loss) income $ ( 2,437 ) $ ( 2,985 ) $ ( 6,139 ) $ ( 5,988 )

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

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

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

Operating lease right-of-use assets Operating lease right-of-use assets $ 1,122,317 $ 1,130,873

7 unchanged sentences

________________

(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.

(1) Net of accumulated amortization of $ 4.1 million and $ 3.3 million as of June 26, 2022 and December 26, 2021, respectively.

(2) Excludes current accrued contingent percentage rent of $ 4.3 million and $ 3.5 million, as of June 26, 2022 and December 26, 2021, respectively, and immaterial current and non-current COVID-19-related deferred rent accruals.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(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

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

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

(dollars in thousands) JUNE 26, 2022 JUNE 27, 2021 JUNE 26, 2022 JUNE 27, 2021

Operating leases (1) Other restaurant operating $ 45,579 $ 43,763 $ 90,940 $ 88,555

6 unchanged sentences

________________

(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.

(1) Excludes rent expense for office facilities and Company-owned closed or subleased properties of $ 3.1 million and $ 3.2 million for the thirteen weeks ended June 26, 2022 and June 27, 2021, respectively, and $ 6.1 million and $ 6.7 million for the twenty-six weeks ended June 26, 2022 and June 27, 2021, respectively, which is included in General and administrative expense.

(2) Includes COVID-19-related rent abatements for the thirteen and twenty-six weeks ended June 27, 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

TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 26, 2022 JUNE 27, 2021

Cash flows from operating activities:

10 unchanged sentences

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

MARCH 27, 2022 DECEMBER 26, 2021

JUNE 26, 2022 DECEMBER 26, 2021

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

15 unchanged sentences

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

As of March 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.

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

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

Carrying value after impairment approximates fair value.

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

THIRTEEN WEEKS ENDED

JUNE 27, 2021

(dollars in thousands) REMAINING CARRYING VALUE (1) TOTAL IMPAIRMENT

Operating lease right-of-use assets $ 5,687 $ 962

Property, fixtures and equipment 8,192 4,460

$ 13,879 $ 5,422

TWENTY-SIX WEEKS ENDED

JUNE 27, 2021

(dollars in thousands) REMAINING CARRYING VALUE (1) TOTAL IMPAIRMENT

Operating lease right-of-use assets $ 7,651 $ 1,512

Property, fixtures and equipment 8,928 6,052

$ 16,579 $ 7,564

________________

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

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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.

3 unchanged sentences

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

MARCH 27, 2022 DECEMBER 26, 2021

JUNE 26, 2022 DECEMBER 26, 2021

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

5 unchanged sentences

2029 Notes $ 300,000 $ 255,000 $ 300,000 $ 304,395

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

THIRTEEN WEEKS ENDED

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

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 26, 2022 JUNE 27, 2021 JUNE 26, 2022 JUNE 27, 2021

(Loss) income before provision for income taxes $ ( 50,144 ) $ 107,574 $ 43,479 $ 183,965

Provision for income taxes $ 11,536 $ 22,688 $ 27,465 $ 29,281

Effective income tax rate ( 23.0 ) % 21.1 % 63.2 % 15.9 %

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.

The effective income tax rate for the thirteen weeks ended June 26, 2022 includes the impact of nondeductible losses associated with the 2025 Notes Partial Repurchase which, relative to a pre-tax book loss during the quarter, resulted in a negative effective income tax rate.

The effective income tax rate for the twenty-six weeks ended June 26, 2022 increased by 47.3 percentage points as compared to the twenty-six weeks ended June 27, 2021.

The increase was primarily due to the non-deductible losses associated with the 2025 Notes Partial Repurchase recorded during the twenty-six weeks ended June 26, 2022.

On December 28, 2021, the U.S.

2 unchanged sentences

The Company expects that a portion of post-2022 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 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.

Furthermore, the impact of these regulations will result in the utilization 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 has been released during the thirteen and twenty-six weeks ended June 26, 2022.

The effective income tax rate for the thirteen weeks ended June 26, 2022 was lower than the Company’s blended federal and state statutory rate of approximately 26 %.

The income tax rate includes the impact of nondeductible losses associated with the 2025 Notes Partial Repurchase which, relative to a pre-tax book loss during the quarter, resulted in a negative effective income tax rate.

The effective income tax rate for the twenty-six weeks ended June 26, 2022 was higher than the statutory rate primarily due to the non-deductible losses associated with the 2025 Notes Partial Repurchase recorded during the twenty-six weeks ended June 26, 2022.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

The effective income tax rates for the thirteen and twenty-six weeks ended June 27, 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 $ 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.

The Company recorded reserves of $ 8.5 million and $ 7.1 million for certain of its outstanding legal proceedings as of June 26, 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.

6 unchanged sentences

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

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.

As of June 26, 2022, the undiscounted payments that the Company could be required to make in the event of non-payment by the primary lessees was approximately $ 23.0 million.

The present value of these potential payments discounted at the Company’s incremental borrowing rate as of June 26, 2022 was approximately $ 17.5 million.

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

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

As of June 26, 2022 and December 26, 2021, the Company’s recorded contingent lease liability was $ 8.4 million and $ 8.7 million, respectively.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

Segment Reporting

The Company considers its restaurant concepts and international markets as operating segments, which reflects how the Company manages its business, reviews operating performance and allocates resources.

Resources are allocated and performance is assessed by the Company’s Chief Executive Officer (“CEO”), whom the Company has determined to be its Chief Operating Decision Maker (“CODM”).

The Company aggregates its operating segments into two reportable segments, U.S.

and international.

segment includes all restaurants operating in the U.S.

while restaurants operating outside the U.S.

are included in the international segment.

The following is a summary of reporting segments:

12 unchanged sentences

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

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

THIRTEEN WEEKS ENDED

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 26, 2022 JUNE 27, 2021 JUNE 26, 2022 JUNE 27, 2021

Total revenues

2 unchanged sentences

Total revenues $ 1,125,162 $ 1,077,366 $ 2,265,697 $ 2,064,839

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

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 26, 2022 JUNE 27, 2021 JUNE 26, 2022 JUNE 27, 2021

Segment income from operations

4 unchanged sentences

Total income from operations 87,719 124,637 194,975 215,635

Loss on extinguishment and modification of debt ( 107,630 ) ( 2,073 ) ( 107,630 ) ( 2,073 )

Loss on fair value adjustment of derivatives, net ( 17,685 ) — ( 17,685 ) —

Other income, net — — — 21

Interest expense, net ( 12,548 ) ( 14,990 ) ( 26,181 ) ( 29,618 )

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

(Loss) income before provision for income taxes $ ( 50,144 ) $ 107,574 $ 43,479 $ 183,965

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

THIRTEEN WEEKS ENDED

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in thousands) JUNE 26, 2022 JUNE 27, 2021 JUNE 26, 2022 JUNE 27, 2021

Depreciation and amortization

7 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