What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-08-02 compared with 2022-05-03 · 257 added, 163 removed, 365 unchanged (54% of the section changed)

15 unchanged sentences

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

(iv) Fluctuations in the price and availability of commodities, including supplier freight charges and restaurant distribution expenses;

(iv) Fluctuations in the price and availability of commodities, including supplier freight charges and restaurant distribution expenses, and other impacts of inflation;

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

23 unchanged sentences

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

As of March 27, 2022, we owned and operated 1,166 full-service restaurants and off-premises only kitchens and franchised 333 full-service restaurants and off-premises only kitchens across 47 states, Guam and 15 countries.

As of June 26, 2022, we owned and operated 1,169 full-service restaurants and off-premises only kitchens and franchised 332 full-service restaurants and off-premises only kitchens across 47 states, Guam and 15 countries.

We have four founder-inspired concepts:

1 unchanged sentence

Financial Highlights

Our financial highlights for the thirteen weeks ended March 27, 2022 (“first quarter of 2022”) include the following:

Our financial highlights for the thirteen weeks ended June 26, 2022 include the following:

combined and Outback Steakhouse comparable restaurant sales of (0.4)% and (1.1)%, respectively;

• Increase in Total revenues of 15.5%, as compared to the first quarter of 2021;

• Restaurant-level operating and operating income margins of 17.1% and 9.4%, respectively, as compared to 18.8% and 9.2%, respectively, for the first quarter of 2021;

• Income from operations of $107.3 million, as compared to $91.0 million in the first quarter of 2021;

• Diluted earnings per share of $0.73, as compared to $0.63 for the first quarter of 2021.

• Increase in Total revenues of 4.4%, as compared to the second quarter of 2021;

• Operating income and restaurant-level operating margins of 7.8% and 15.5%, respectively, as compared to 11.6% and 20.3%, respectively, for the second quarter of 2021;

• Income from operations of $87.7 million, as compared to $124.6 million in the second quarter of 2021;

• Loss on extinguishment of debt of $104.7 million and loss on fair value adjustment of derivatives, net, of $17.7 million in connection with the 2025 Notes Partial Repurchase;

• Diluted loss per share of $(0.72), as compared to diluted earnings per share of $0.75 for the second quarter of 2021.

Key Financial Performance Indicators

3 unchanged sentences

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

• Restaurant-level operating margin, Income from operations, Net income and Diluted earnings per share — financial measures utilized to evaluate our operating performance.

• Restaurant-level operating margin, Income from operations, Net (loss) income and Diluted (loss) earnings per share — financial measures utilized to evaluate our operating performance.

Restaurant-level operating margin is widely regarded in the industry as a useful metric to evaluate restaurant-level operating efficiency and performance of ongoing restaurant-level operations, and we use it for these purposes, overall and particularly within our two segments.

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

The following categories of our revenue and operating expenses are not included in restaurant-level operating margin because we do not consider them reflective of operating performance at the restaurant-level within a period:

(i) Franchise and other revenues which are earned primarily from franchise royalties and other non-food and beverage revenue streams, such as rental and sublease income;

(ii) Depreciation and amortization which, although substantially all of which is related to restaurant-level assets, represent historical sunk costs rather than cash outlays for the restaurants;

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

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

operating margin because we do not consider them reflective of operating performance at the restaurant-level within a period:

(i) Franchise and other revenues which are earned primarily from franchise royalties and other non-food and beverage revenue streams, such as rental and sublease income;

(ii) Depreciation and amortization which, although substantially all of which is related to restaurant-level assets, represent historical sunk costs rather than cash outlays for the restaurants;

(iii) General and administrative expense which includes primarily non-restaurant-level costs associated with support of the restaurants and other activities at our corporate offices;

(iv) Asset impairment charges and restaurant closing costs which are not reflective of ongoing restaurant performance in a period.

Restaurant-level operating margin excludes various expenses, as discussed above, that are essential to support the operations of our restaurants and may materially impact our Consolidated Statements of Operations and Comprehensive Income.

As a result, restaurant-level operating margin is not indicative of our consolidated results of operations and is presented exclusively as a supplement to, and not a substitute for, Net income or Income from operations.

In addition, our presentation of restaurant-level operating margin may not be comparable to similarly titled measures used by other companies in our industry;

10 unchanged sentences

Number of restaurants (at end of the period):

MARCH 27, 2022 MARCH 28, 2021

JUNE 26, 2022 JUNE 27, 2021

Outback Steakhouse

25 unchanged sentences

____________________

(1) Restaurant counts as of March 28, 2021 have been adjusted to exclude off-premises only locations included in the table below.

(2) The restaurant counts for Brazil are reported as of February 28, 2022 and 2021, respectively, to correspond with the balance sheet dates of this subsidiary.

(3) International Company-owned Other included two Aussie Grill locations as of March 27, 2022 and March 28, 2021.

International Franchised Other included three Aussie Grill locations as of March 27, 2022 and March 28, 2021.

(1) Previously presented restaurant counts as of June 27, 2021 have been adjusted to exclude off-premises only locations included in the table below.

(2) The restaurant counts for Brazil, including Abbraccio restaurants within International Company-owned Other, are reported as of May 31, 2022 and 2021, respectively, to correspond with the balance sheet dates of this subsidiary.

(3) International Company-owned Other included two Aussie Grill locations as of June 26, 2022 and June 27, 2021.

International Franchised Other included three Aussie Grill locations as of June 26, 2022 and June 27, 2021.

The table below presents the number of our off-premises only kitchens in operation as of the periods indicated:

Number of kitchens (at end of the period) (1):

MARCH 27, 2022 MARCH 28, 2021

JUNE 26, 2022 JUNE 27, 2021

Company-owned 2 4

10 unchanged sentences

The following table sets forth the percentages of certain items in our Consolidated Statements of Operations in relation to Total revenues or Restaurant sales, for the periods indicated:

THIRTEEN WEEKS ENDED

MARCH 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 98.6 % 97.9 % 98.5 % 98.5 %

10 unchanged sentences

Income from operations 7.8 11.6 8.6 10.4

Loss on extinguishment and modification of debt (9.6) (0.2) (4.7) (0.1)

Loss on fair value adjustment of derivatives, net (1.6) — (0.8) —

Other income, net — — — *

Interest expense, net (1.1) (1.4) (1.2) (1.4)

Income before provision for income taxes 8.2 7.7

(Loss) income before provision for income taxes (4.5) 10.0 1.9 8.9

Provision for income taxes 1.0 2.1 1.2 1.4

Net income 6.8 7.1

Net (loss) income (5.5) 7.9 0.7 7.5

net income attributable to noncontrolling interests 0.2 0.2 0.2 0.2

Net income attributable to Bloomin’ Brands

Net (loss) income attributable to Bloomin’ Brands

(5.7) % 7.7 % 0.5 % 7.3 %

________________

(1) As a percentage of Restaurant sales.

1 unchanged sentence

Restaurant sales

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

(dollars in millions) THIRTEEN WEEKS ENDED

For the period ended March 28, 2021 $ 979.5

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

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

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

Comparable restaurant sales (1) 37.8 179.2

Restaurant openings (1) 14.0 26.7

Restaurant closures (7.2)

Effect of foreign currency translation 11.7 8.6

For the period ended March 27, 2022 $ 1,123.6

The increase in Restaurant sales during the thirteen weeks ended March 27, 2022 was primarily due to:

(i) higher comparable restaurant sales primarily attributable to increases in average check per person and (ii) the opening of 37

Restaurant closures (1) (9.8) (16.7)

For the periods ended June 26, 2022 $ 1,108.9 $ 2,232.5

____________________

(1) Summation of quarterly changes for restaurant openings, closures and comparable restaurant sales will not total to annual amounts as the restaurants that meet the definition of each will differ each period based on when the restaurant opened or closed.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

new restaurants not included in our comparable restaurant sales base.

The increase in Restaurant sales during the thirteen weeks ended June 26, 2022 was primarily due to:

(i) higher comparable restaurant sales, primarily in Brazil, (ii) the opening of 42 new restaurants not included in our comparable restaurant sales base and (iii) the effect of foreign currency translation of the Brazilian Real relative to the U.S.

The increase in Restaurant sales was partially offset by the closure of 21 restaurants since March 28, 2021.

The increase in Restaurant sales during the twenty-six weeks ended June 26, 2022 was primarily due to:

(i) higher comparable restaurant sales, primarily attributable to increases in average check per person, (ii) the opening of 45 new restaurants not included in our comparable restaurant sales base and (iii) the effect of foreign currency translation of the Brazilian Real relative to the U.S.

The increase in Restaurant sales was partially offset by the closure of 22 restaurants since December 27, 2020.

1 unchanged sentence

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

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

Average restaurant unit volumes (weekly):

13 unchanged sentences

____________________

(1) Translated at average exchange rates of 5.47 and 5.30 for the thirteen weeks ended March 27, 2022 and March 28, 2021, respectively.

(1) Translated at average exchange rates of 4.89 and 5.45 for the thirteen weeks ended June 26, 2022 and June 27, 2021, respectively, and 5.15 and 5.36 for the twenty-six weeks ended June 26, 2022 and June 27, 2021, respectively.

BLOOMIN’ BRANDS, INC.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Comparable Restaurant Sales, Traffic and Average Check Per Person Increases (Decreases)

Following is a summary of comparable restaurant sales, traffic and average check per person increases (decreases) for the periods indicated:

THIRTEEN WEEKS ENDED

MARCH 27, 2022 MARCH 28, 2021

Comparable Restaurant Sales, Traffic and Average Check Per Person (Decreases) Increases

Following is a summary of comparable restaurant sales, traffic and average check per person (decreases) increases for the periods indicated:

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

Year over year percentage change:

5 unchanged sentences

Combined U.S.

(0.4) % 84.6 % 6.4 % 34.4 %

International

5 unchanged sentences

Combined U.S.

(8.3) % 53.6 % (3.5) % 23.2 %

International

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Combined U.S.

7.9 % 31.0 % 9.9 % 11.2 %

International

5 unchanged sentences

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

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Franchise and other revenues

THIRTEEN WEEKS ENDED

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

Franchise revenues $ 12.6 $ 12.2 $ 26.0 $ 19.0

2 unchanged sentences

____________________

(1) Franchise revenues increased during the thirteen weeks ended March 27, 2022 as compared to the thirteen weeks ended March 28, 2021 primarily due to the impact of COVID-19-related capacity restrictions on 2021 franchise sales.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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

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

COSTS AND EXPENSES

Food and beverage costs

THIRTEEN WEEKS ENDED

(dollars in millions) MARCH 27, 2022 MARCH 28, 2021 CHANGE

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in millions) JUNE 26, 2022 JUNE 27, 2021 CHANGE JUNE 26, 2022 JUNE 27, 2021 CHANGE

Food and beverage costs $ 364.5 $ 312.1 $ 723.8 $ 604.0

% of Restaurant sales 32.9 % 29.6 % 3.3 % 32.4 % 29.7 % 2.7 %

Food and beverage costs increased as a percentage of Restaurant sales during the thirteen weeks ended March 27, 2022 as compared to the thirteen weeks ended March 28, 2021 primarily due to 3.6% from commodity inflation, partially offset by a decrease as a percentage of Restaurant sales of 1.4% from increases in average check per person, primarily driven by an increase in menu pricing.

Food and beverage costs increased as a percentage of Restaurant sales during the thirteen weeks ended June 26, 2022 as compared to the thirteen weeks ended June 27, 2021 primarily due to 4.9% from commodity inflation, partially offset by a decrease as a percentage of Restaurant sales of 1.6% from increases in average check per person, primarily driven by an increase in menu pricing.

Food and beverage costs increased as a percentage of Restaurant sales during the twenty-six weeks ended June 26, 2022 as compared to the twenty-six weeks ended June 27, 2021 primarily due to 4.2% from commodity inflation, partially offset by a decrease as a percentage of Restaurant sales of 1.5% from increases in average check per person, primarily driven by an increase in menu pricing.

In aggregate, our menu pricing increases during 2022 are behind our current level of commodity inflation.

Labor and other related expenses

THIRTEEN WEEKS ENDED

(dollars in millions) MARCH 27, 2022 MARCH 28, 2021 CHANGE

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in millions) JUNE 26, 2022 JUNE 27, 2021 CHANGE JUNE 26, 2022 JUNE 27, 2021 CHANGE

Labor and other related $ 308.8 $ 295.0 $ 621.3 $ 569.6

% of Restaurant sales 27.8 % 28.0 % (0.2) % 27.8 % 28.0 % (0.2) %

Labor and other related expenses decreased as a percentage of Restaurant sales during the thirteen weeks ended March 27, 2022 as compared to the thirteen weeks ended March 28, 2021 primarily due to 1.3% from increases in average check per person and the net benefit of lapping the impact of COVID-19.

This decrease was partially offset by an increase as a percentage of Restaurant sales of 1.2% from wage rate inflation.

Labor and other related expenses decreased as a percentage of Restaurant sales during the thirteen weeks ended June 26, 2022 as compared to the thirteen weeks ended June 27, 2021 primarily due to:

(i) 2.3% from leveraging increased restaurant sales due to the net benefit of lapping the impact of COVID-19, primarily in Brazil, and increases in average check per person and (ii) 0.5% from the impact of certain cost saving initiatives.

These decreases were partially offset by an increase as a percentage of Restaurant sales of 2.9% from higher labor costs primarily due to wage rate inflation.

Labor and other related expenses decreased as a percentage of Restaurant sales during the twenty-six weeks ended June 26, 2022 as compared to the twenty-six weeks ended June 27, 2021 primarily due to:

(i) 2.1% from leveraging increased restaurant sales due to increases in average check per person and the net benefit of lapping the impact of COVID-19, primarily in Brazil, and (ii) 0.4% from the impact of certain cost saving initiatives.

These decreases

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

were partially offset by an increase as a percentage of Restaurant sales of 2.5% from higher labor cost primarily due to wage rate inflation.

Other restaurant operating expenses

THIRTEEN WEEKS ENDED

(dollars in millions) MARCH 27, 2022 MARCH 28, 2021 CHANGE

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in millions) JUNE 26, 2022 JUNE 27, 2021 CHANGE JUNE 26, 2022 JUNE 27, 2021 CHANGE

Other restaurant operating $ 263.5 $ 233.5 $ 522.6 $ 462.7

% of Restaurant sales 23.8 % 22.1 % 1.7 % 23.4 % 22.7 % 0.7 %

Other restaurant operating expenses decreased as a percentage of Restaurant sales during the thirteen weeks ended March 27, 2022 as compared to the thirteen weeks ended March 28, 2021 primarily due to 2.3% from leveraging increased restaurant sales, partially offset by increases as a percentage of Restaurant sales of 1.3% from higher operating expenses including utilities and 0.5% from higher advertising expense.

Other restaurant operating expenses increased as a percentage of Restaurant sales during the thirteen weeks ended June 26, 2022 as compared to the thirteen weeks ended June 27, 2021 primarily due to 2.4% from higher operating expenses including utilities, primarily due to inflation, and 0.6% from higher advertising expense, partially offset by a decrease as a percentage of Restaurant sales of 1.5% from leveraging increased restaurant sales due to the net benefit of lapping the impact of COVID-19, primarily in Brazil, and increases in average check per person.

Other restaurant operating expenses increased as a percentage of Restaurant sales during the twenty-six weeks ended June 26, 2022 as compared to the twenty-six weeks ended June 27, 2021 primarily due to 1.9% from higher operating expenses including utilities, primarily due to inflation, and 0.6% from higher advertising expense, partially offset by a decrease as a percentage of Restaurant sales of 1.9% from leveraging increased restaurant sales due to increases in average check per person and the net benefit of lapping the impact of COVID-19, primarily in Brazil.

General and administrative

General and administrative expense includes salaries and benefits, management incentive programs, related payroll tax and benefits, other employee-related costs and professional services.

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

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

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

Incentive compensation (6.1) (7.6)

Employee stock-based compensation (4.8) (4.7)

Compensation, benefits and payroll tax 2.3 3.7

Travel and entertainment 1.4 3.0

Other (0.1) (0.2)

For the periods ended June 26, 2022 $ 59.2 $ 117.9

Provision for impaired assets and restaurant closings

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in millions) JUNE 26, 2022 JUNE 27, 2021 CHANGE JUNE 26, 2022 JUNE 27, 2021 CHANGE

Provision for impaired assets and restaurant closings $ 0.2 $ 5.2 $ (5.0) $ 2.0 $ 7.4 $ (5.4)

Impairment and closure charges during the periods presented resulted primarily from locations identified for closure.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Income from operations

THIRTEEN WEEKS ENDED

(dollars in millions) MARCH 27, 2022 MARCH 28, 2021 CHANGE

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

(dollars in millions) JUNE 26, 2022 JUNE 27, 2021 CHANGE JUNE 26, 2022 JUNE 27, 2021 CHANGE

Income from operations $ 87.7 $ 124.6 $ (36.9) $ 195.0 $ 215.6 $ (20.6)

% of Total revenues 7.8 % 11.6 % (3.8) % 8.6 % 10.4 % (1.8) %

The increase in Income from operations generated during the thirteen weeks ended March 27, 2022 as compared to the thirteen weeks ended March 28, 2021 was primarily due to increases in average check per person and the net benefit of lapping the impact of COVID-19, as well as higher franchise revenues.

These increases were partially offset by:

(i) commodity and wage rate inflation, (ii) higher operating expenses including utilities and (iii) higher advertising expense.

The decrease in Income from operations generated during the thirteen weeks ended June 26, 2022 as compared to the thirteen weeks ended June 27, 2021 was primarily due to:

(i) commodity inflation, (ii) higher operating expenses including utilities, (iii) higher labor costs primarily due to wage rate inflation, (iv) higher advertising expense and (v) the impact of favorable court rulings in Brazil related to value-added taxes recorded in other revenues during 2021.

These decreases were partially offset by:

(i) increases in average check per person, (ii) the net benefit of lapping the impact of COVID-19 in Brazil, (iii) lower incentive compensation and (iv) the impact of certain cost saving initiatives.

The decrease in Income from operations generated during the twenty-six weeks ended June 26, 2022 as compared to the twenty-six weeks ended June 27, 2021 was primarily due to:

(i) commodity inflation, (ii) higher labor costs primarily due to wage rate inflation, (iii) higher operating expenses including utilities and (iv) higher advertising expense.

These decreases were partially offset by:

(i) increases in average check per person, (ii) the net benefit of lapping the impact of COVID-19 in Brazil and (iii) the impact of certain cost saving initiatives.

Loss on extinguishment and modification of debt and Loss on fair value adjustment of derivatives, net

In connection with the 2025 Notes Partial Repurchase, we 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 during the thirteen weeks ended June 26, 2022.

See Note 8 - Convertible Senior Notes of the Notes to Consolidated Financial Statements for further information.

Provision for income taxes

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

Effective income tax rate (23.0) % 21.1 % (44.1) % 63.2 % 15.9 % 47.3 %

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.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Provision for income taxes

THIRTEEN WEEKS ENDED

MARCH 27, 2022 MARCH 28, 2021 CHANGE

Effective income tax rate 17.0 % 8.6 % 8.4 %

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 our U.S.

and international subsidiaries.

SEGMENT PERFORMANCE

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

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

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

and international.

segment includes all restaurants operating 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:

13 unchanged sentences

See the Overview-Key Performance Indicators and Non-GAAP Financial Measures sections of Management’s Discussion and Analysis for additional details regarding the calculation of restaurant-level operating margin.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

THIRTEEN WEEKS ENDED

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

See the Overview-Key Financial Performance Indicators and Non-GAAP Financial Measures sections of Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional details regarding the calculation of restaurant-level operating margin.

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

Restaurant sales $ 985,927 $ 990,293 $ 2,009,562 $ 1,890,352

4 unchanged sentences

Operating income margin 10.5 % 16.5 % 11.6 % 15.0 %

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Restaurant sales

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

segment Restaurant sales for the period indicated:

(dollars in millions) THIRTEEN WEEKS ENDED

For the period ended March 28, 2021 $ 900.1

segment Restaurant sales for the periods indicated:

(dollars in millions) THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED (1)

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

Restaurant closures (9.8) (16.7)

Comparable restaurant sales (1.3) 122.2

Restaurant openings 6.7 13.7

Restaurant closures (7.2)

For the period ended March 27, 2022 $ 1,023.7

For the periods ended June 26, 2022 $ 985.9 $ 2,009.6

____________________

(1) Summation of quarterly changes will not total to annual amounts as the restaurants that meet the definition of each change category will differ each period based on when the restaurant opened or closed.

The decrease in U.S.

Restaurant sales during the thirteen weeks ended June 26, 2022 was primarily due to the closure of 21 restaurants since March 28, 2021, partially offset by the opening of 14 new restaurants not included in our comparable restaurant sales base.

The increase in U.S.

Restaurant sales during the thirteen weeks ended March 27, 2022 was primarily due to:

Restaurant sales during the twenty-six weeks ended June 26, 2022 was primarily due to:

(i) higher comparable restaurant sales, primarily attributable to increases in average check per person and (ii) the opening of 15 new restaurants not included in our comparable restaurant sales base.

2 unchanged sentences

Income from operations

The increase in U.S.

Income from operations generated during the thirteen weeks ended March 27, 2022 as compared to the thirteen weeks ended March 28, 2021 was primarily due to increases in average check per person and the net benefit of lapping the impact of COVID-19, as well as higher franchise revenues.

These increases were partially offset by:

(i) commodity and wage rate inflation, (ii) higher operating expenses including utilities and (iii) higher advertising expense.

The decrease in U.S.

Income from operations generated during the thirteen and twenty-six weeks ended June 26, 2022 as compared to the thirteen and twenty-six weeks ended June 27, 2021 was primarily due to:

(i) commodity inflation, (ii) higher labor cost primarily due to wage rate inflation, (iii) higher operating expenses including utilities and (iv) higher advertising expense.

These decreases were partially offset by:

(i) increases in average check per person and (ii) the impact of certain cost saving initiatives.

International Segment

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

Restaurant sales $ 122,991 $ 64,934 $ 222,931 $ 144,326

8 unchanged sentences

Restaurant sales

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

(dollars in millions) THIRTEEN WEEKS ENDED

For the period ended March 28, 2021 $ 79.4

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

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

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

Comparable restaurant sales (1) 39.1 57.0

Restaurant openings 5.4

Effect of foreign currency translation 11.7 8.6

For the period ended March 27, 2022 $ 99.9

The increase in international Restaurant sales during the thirteen weeks ended March 27, 2022 was primarily due to higher comparable restaurant sales and the opening of 24 new restaurants not included in our comparable restaurant sales base.

Restaurant openings (1) 7.3 13.0

For the periods ended June 26, 2022 $ 123.0 $ 222.9

____________________

(1) Summation of quarterly changes for restaurant openings and comparable restaurant sales will not total to annual amounts as the restaurants that meet the definition of each will differ each period based on when the restaurant opened.

The increase in international Restaurant sales during the thirteen weeks ended June 26, 2022 was primarily due to:

(i) higher comparable restaurant sales in Brazil, (ii) the effect of foreign currency translation of the Brazilian Real relative to the U.S.

dollar and (iii) the opening of 28 new restaurants not included in our comparable restaurant sales base.

The increase in international Restaurant sales during the twenty-six weeks ended June 26, 2022 was primarily due to:

(i) higher comparable restaurant sales in Brazil, (ii) the opening of 30 new restaurants not included in our comparable restaurant sales base and (iii) the effect of foreign currency translation of the Brazilian Real relative to the U.S.

Income from operations

The increase in international Income from operations generated during the thirteen weeks ended March 27, 2022 as compared to the thirteen weeks ended March 28, 2021 was primarily due to an increase in restaurant operating margin, which includes the recovery of in-restaurant dining from the impact of the COVID-19 pandemic during 2021 and increases in average check per person, partially offset by commodity inflation.

The increase in international Income from operations generated during the thirteen and twenty-six weeks ended June 26, 2022 as compared to the thirteen and twenty-six weeks ended June 27, 2021 was primarily due to an increase in restaurant-level operating margin, which includes:

(i) the recovery of in-restaurant dining in Brazil and the net impact of the COVID-19 pandemic during 2021, and (ii) increases in average check per person, partially offset by commodity inflation.

The increase from international restaurant-level operating margin was partially offset by the impact of favorable court rulings in Brazil related to value-added taxes recorded in other revenues during 2021.

BLOOMIN’ BRANDS, INC.

3 unchanged sentences

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

Consolidated THIRTEEN WEEKS ENDED

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

Consolidated THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

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

6 unchanged sentences

Restaurant-level operating margin 15.5 % 20.3 % 16.3 % 19.6 %

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

Income from operations $ 104,620 $ 165,297 $ 236,846 $ 287,032

6 unchanged sentences

Restaurant-level operating margin 15.1 % 21.7 % 16.3 % 20.5 %

International THIRTEEN WEEKS ENDED

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

International THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

Income from operations $ 14,126 $ 2,470 $ 23,010 $ 6,007

9 unchanged sentences

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

The following table presents the percentages of certain operating cost financial statement line items in relation to Restaurant sales for the periods indicated:

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

THIRTEEN WEEKS ENDED

MARCH 27, 2022 MARCH 28, 2021

JUNE 26, 2022 JUNE 27, 2021

Restaurant sales 100.0 % 100.0 %

3 unchanged sentences

Restaurant-level operating margin 15.5 % 20.3 %

Adjusted net income and Adjusted diluted earnings per share

THIRTEEN WEEKS ENDED

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

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

TWENTY-SIX WEEKS ENDED

JUNE 26, 2022 JUNE 27, 2021

Restaurant sales 100.0 % 100.0 %

Food and beverage costs 32.4 % 29.7 %

Labor and other related 27.8 % 28.0 %

Other restaurant operating 23.4 % 22.7 %

Restaurant-level operating margin 16.3 % 19.6 %

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Adjusted income from operations, Adjusted net income and Adjusted diluted earnings per share

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

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

Operating income margin 7.8 % 11.6 % 8.6 % 10.4 %

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

Total income from operations adjustments — (6,337) — (6,337)

Adjusted income from operations $ 87,719 $ 118,300 $ 194,975 $ 209,298

Adjusted operating income margin 7.8 % 11.0 % 8.6 % 10.2 %

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

Convertible senior notes if-converted method interest adjustment, net of tax (2) — — — 691

Net income attributable to Bloomin’ Brands

Net (loss) income attributable to Bloomin’ Brands

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

Diluted earnings per share $ 0.73 $ 0.63

Income from operations adjustments — (6,337) — (6,337)

Loss on extinguishment and modification of debt (3) 107,630 2,073 107,630 2,073

Loss on fair value adjustment of derivatives, net (4) 17,685 — 17,685 —

Total adjustments, before income taxes 125,315 (4,264) 125,315 (4,264)

Adjustment to provision for income taxes (5) 1,322 1,243 1,322 1,243

Net adjustments 126,637 (3,021) 126,637 (3,021)

Adjusted net income $ 63,002 $ 79,524 $ 138,513 $ 148,386

Diluted (loss) earnings per share (6) $ (0.72) $ 0.75 $ 0.12 $ 1.38

Adjusted diluted earnings per share (7) $ 0.68 $ 0.81 $ 1.48 $ 1.53

2 unchanged sentences

_________________

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

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

(2) For the thirteen weeks ended March 27, 2022 and March 28, 2021, adjusted diluted weighted average common shares outstanding was calculated excluding the dilutive effect of 8,732 and 9,653 shares, respectively, to be issued upon conversion of the 2025 Notes to satisfy the amount in excess of the principal since our convertible note hedge offsets the dilutive impact of the shares underlying the 2025 Notes.

For the thirteen weeks ended March 28, 2021, adjusted diluted weighted average common shares outstanding was also calculated assuming our February 2021 election to settle the principal portion of the 2025 Notes in cash was in effect for the entire period.

(3) The thirteen and twenty-six weeks ended June 26, 2022 include losses in connection with the 2025 Notes Partial Repurchase and Amended Credit Agreement.

See Note 8 - Convertible Senior Notes and Note 7 - Long-term Debt, Net , respectively, of the Notes to Consolidated Financial Statements for additional details.

(4) Fair value adjustments to the conversion feature of the 2025 Notes repurchased, as well as the settlements of the related convertible senior note hedges and warrants in connection with the 2025 Notes Partial Repurchase.

See Note 8 - Convertible Senior Notes of the Notes to Consolidated Financial Statements for additional details.

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

For the thirteen and twenty-six weeks ended June 26, 2022, the primary difference between the GAAP and adjusted effective income tax rates relate to certain non-deductible losses and other tax costs associated with the 2025 Notes Partial Repurchase.

(6) Due to the GAAP net loss, the effect of dilutive securities was excluded from the calculation of GAAP diluted loss per share for the thirteen weeks ended June 26, 2022.

(7) Adjusted diluted weighted average common shares outstanding was calculated excluding the dilutive effect of 7,774 and 11,231 shares for the thirteen weeks ended June 26, 2022 and June 27, 2021, respectively, and 8,253 and 10,442 shares for the twenty-six weeks ended June 26, 2022 and June 27, 2021, respectively, to be issued upon conversion of the 2025 Notes to satisfy the amount in excess of the principal since our convertible note hedge offsets the dilutive impact of the shares underlying the 2025 Notes.

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

For adjusted diluted earnings per share, the calculation includes 3,965 dilutive shares for the thirteen weeks ended June 26, 2022, primarily related to outstanding warrants.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

System-Wide Sales - System-wide sales is a non-GAAP financial measure that includes sales of all restaurants operating under our brand names, whether we own them or not.

2 unchanged sentences

For a summary of sales of Company-owned restaurants, refer to Note 2 - Revenue Recognition of the Notes to Consolidated Financial Statements.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

The following table provides a summary of sales of franchised restaurants for the periods indicated, which are not included in our consolidated financial results.

Franchise sales within this table do not represent our sales and are presented only as an indicator of changes in the restaurant system, which management believes is important information regarding the health of our restaurant concepts and in determining our royalties and/or service fees.

THIRTEEN WEEKS ENDED

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

Outback Steakhouse $ 129 $ 119 $ 258 $ 211

4 unchanged sentences

Outback Steakhouse - South Korea 65 72 143 146

Other 28 27 62 51

International total 93 99 205 197

1 unchanged sentence

_____________________

(1) Franchise sales are not included in Total revenues in the Consolidated Statements of Operations and Comprehensive Income.

(1) Franchise sales are not included in Total revenues in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

Liquidity and Capital Resources

Cash and Cash Equivalents

As of March 27, 2022, we had $97.8 million in cash and cash equivalents, of which $30.1 million was held by foreign affiliates.

As of June 26, 2022, we had $95.3 million in cash and cash equivalents, of which $41.8 million was held by foreign affiliates.

The international jurisdictions in which we have significant cash do not have any known restrictions that would prohibit repatriation.

As of March 27, 2022, we had aggregate accumulated foreign earnings of approximately $30.5 million.

As of June 26, 2022, we had aggregate accumulated foreign earnings of approximately $37.9 million.

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

under the 2017 Tax Cuts and Jobs Act and post-2017 foreign earnings, which we may repatriate to the U.S.

without additional U.S.

without additional material U.S.

federal income tax.

These amounts are not considered indefinitely reinvested in our foreign subsidiaries.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Borrowing Capacity and Debt Service

5 unchanged sentences

2022 payments (195,000) (304,500) (125,000) — (624,500)

Balance as of March 27, 2022 $ 192,500 $ 10,000 $ 230,000 $ 300,000 $ 732,500

Interest rates, as of March 27, 2022 (1) 1.76 % 4.00 % 5.00 % 5.13 %

Principal maturity date April 2026 April 2026 May 2025 April 2029

Balance as of June 26, 2022 $ — $ 400,000 $ 105,000 $ 300,000 $ 805,000

Interest rates, as of June 26, 2022 (1) 2.74 % 5.00 % 5.13 %

Principal maturity date April 2026 May 2025 April 2029

____________________

(1) Interest rate for Term loan A represents the weighted average interest rate.

Interest rate for the revolving credit facility represents the base rate option elected in anticipation of impending repayment.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

As of March 27, 2022, we had $769.3 million in available unused borrowing capacity under our revolving credit facility, net of letters of credit of $20.7 million.

Our Credit Agreement contains various financial and non-financial covenants.

A violation of these covenants could negatively impact our liquidity by restricting our ability to borrow under the revolving credit facility and cause an acceleration of the amounts due under the credit facilities.

See Note 13 - Long-term Debt, Net in our Annual Report on Form 10-K for the year ended December 26, 2021 for further information.

As of March 27, 2022 and December 26, 2021, we were in compliance with our debt covenants.

We believe that we will remain in compliance with our debt covenants during the next 12 months.

(1) Interest rate for revolving credit facility represents the weighted average interest rate as of June 26, 2022.

As of June 26, 2022, we had $580.0 million in available unused borrowing capacity under our revolving credit facility, net of letters of credit of $20.0 million.

Credit Agreement Amendment - On April 26, 2022, we and OSI entered into the Amended Credit Agreement, which included an increase of our existing revolving credit facility from $800.0 million to $1.0 billion and a transition from LIBOR to SOFR as the benchmark rate for purposes of calculating interest under the Senior Secured Credit Facility.

2 unchanged sentences

The transition to SOFR did not materially impact the interest rate applied to our borrowings.

See Note 6 - Long-term Debt, Net for additional details regarding the Amended Credit Agreement.

See Note 7 - Long-term Debt, Net of the Notes to Consolidated Financial Statements for additional details regarding the Amended Credit Agreement.

Our Amended Credit Agreement contains various financial and non-financial covenants.

See Note 13 - Long-term Debt, Net in our Annual Report on Form 10-K for the year ended December 26, 2021 for further information.

As of June 26, 2022 and December 26, 2021, we were in compliance with our debt covenants.

We believe that we will remain in compliance with our debt covenants during the next 12 months.

2025 Notes - On May 25, 2022, we and the Noteholders entered into the Exchange Agreements in which the Noteholders agreed to exchange $125.0 million in aggregate principal amount of our outstanding 2025 Notes for $196.9 million in cash, plus accrued interest, and approximately 2.3 million shares of our common stock.

Convertible Note Hedge and Warrant Transactions - In connection with the 2025 Notes Partial Repurchase, we entered into the Note Hedge Early Termination Agreements and the Warrant Early Termination Agreements.

Upon settlement, we 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.

See Note 8 - Convertible Senior Notes of the Notes to Consolidated Financial Statements for additional details regarding the 2025 Notes Partial Repurchase and related Note Hedge Early Termination Agreements and Warrant Early Termination Agreements.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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

3 unchanged sentences

The amount of actual capital expenditures may be affected by general economic, financial, competitive, legislative and regulatory factors, among other things, including raw material constraints.

Dividends and Share Repurchases - In April 2022, our Board declared a quarterly cash dividend of $0.14 per share, payable on May 25, 2022.

Dividends and Share Repurchases - In July 2022, our Board declared a quarterly cash dividend of $0.14 per share, payable on August 24, 2022.

Future dividend payments are dependent on our earnings, financial condition, capital expenditure requirements, surplus and other factors that our Board considers relevant, as well as continued compliance with the financial covenants in our debt agreements.

1 unchanged sentence

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

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

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Following is a summary of dividends and share repurchases from fiscal year 2015 through March 27, 2022:

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

Following is a summary of dividends and share repurchases from fiscal year 2015 through June 26, 2022:

(dollars in thousands) DIVIDENDS PAID SHARE REPURCHASES TOTAL

7 unchanged sentences

First fiscal quarter 2022 12,559 11,702 24,261

Second fiscal quarter 2022 12,418 35,749 48,167

Total (1) $ 203,202 $ 1,021,032 $ 1,224,234

________________

(1) Subsequent to March 27, 2022, we repurchased $15.6 million of our common stock under a Rule 10b5-1 plan.

Deferred Compensation Programs - The deferred compensation obligation due to managing and chef partners was $11.0 million and $15.5 million as of March 27, 2022 and December 26, 2021, respectively.

(1) Subsequent to June 26, 2022, we repurchased $14.9 million of our common stock under a Rule 10b5-1 plan through July 28, 2022.

Deferred Compensation Programs - The deferred compensation obligation due to managing and chef partners was $7.5 million and $15.5 million as of June 26, 2022 and December 26, 2021, respectively.

We invest in various corporate-owned life insurance policies, which are held within an irrevocable grantor or rabbi trust account for settlement of our obligations under the deferred compensation plans.

The obligation for managing and chef partners’ deferred compensation was fully funded as of March 27, 2022.

The obligation for managing and chef partners’ deferred compensation was fully funded as of June 26, 2022.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Summary of Cash Flows and Financial Condition

Cash Flows - The following table presents a summary of our cash flows provided by (used in) operating, investing and financing activities for the periods indicated:

THIRTEEN WEEKS ENDED

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

TWENTY-SIX WEEKS ENDED

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

Net cash provided by operating activities $ 218,818 $ 283,182

2 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

Operating activities - The increase in net cash provided by operating activities during the thirteen weeks ended March 27, 2022 as compared to the thirteen weeks ended March 28, 2021 was primarily due to the timing of collections of gift card receivables and a decrease in cash paid for interest, partially offset by increased employee compensation payments.

Investing activities - The increase in net cash used in investing activities during the thirteen weeks ended March 27, 2022 as compared to the thirteen weeks ended March 28, 2021 was primarily due to higher capital expenditures.

Financing activities - The increase in net cash used in financing activities during the thirteen weeks ended March 27, 2022 as compared to the thirteen weeks ended March 28, 2021 was primarily due to payment of cash dividends on our common stock and the repurchase of common stock during 2022.

These increases were partially offset by lower net repayments on our revolving credit facility.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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

Operating activities - The decrease in net cash provided by operating activities during the twenty-six weeks ended June 26, 2022 as compared to the twenty-six weeks ended June 27, 2021 was primarily due to the timing of operational payments and receipts and increased employee compensation payments.

Investing activities - The increase in net cash used in investing activities during the twenty-six weeks ended June 26, 2022 as compared to the twenty-six weeks ended June 27, 2021 was primarily due to higher capital expenditures.

Financing activities - The decrease in net cash used in financing activities during the twenty-six weeks ended June 26, 2022 as compared the twenty-six weeks ended June 27, 2021 was primarily due to net draws on the revolving credit facility during 2022, generally used to settle certain outstanding debt obligations, including the 2025 Notes Partial Repurchase and the related Note Hedge Early Termination Agreements, partially offset by the repurchase of common stock and payment of cash dividends on our common stock.

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

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

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

Current assets $ 292,926 $ 352,792

2 unchanged sentences

Working capital (deficit) includes:

(i) Unearned revenue primarily from unredeemed gift cards of $325.3 million and $398.8 million as of March 27, 2022 and December 26, 2021, respectively, and (ii) current operating lease liabilities of $177.6 million and $177.0 million as of March 27, 2022 and December 26, 2021, respectively, with the corresponding operating right-of-use assets recorded as non-current on our Consolidated Balance Sheets.

(i) Unearned revenue primarily from unredeemed gift cards of $309.9 million and $398.8 million as of June 26, 2022 and December 26, 2021, respectively, and (ii) current operating lease liabilities of $178.8 million and $177.0 million as of June 26, 2022 and December 26, 2021, respectively, with the corresponding operating right-of-use assets recorded as non-current on our Consolidated Balance Sheets.

We have, and in the future may continue to have, negative working capital balances (as is common for many restaurant companies).

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

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

Additionally, ongoing cash flows from restaurant operations and gift card sales are typically used to service debt obligations and to make capital expenditures.

Recently Issued Financial Accounting Standards

For a description of recently issued Financial Accounting Standards that we adopted during the thirteen weeks ended March 27, 2022 and, that are applicable to us and likely to have material effect on our consolidated financial statements, but have not yet been adopted, see Note 1 - Description of the Business and Basis of Presentation of the Notes to Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

For a description of recently issued Financial Accounting Standards that we adopted during the twenty-six weeks ended June 26, 2022 and, that are applicable to us and likely to have material effect on our consolidated financial statements, but have not yet been adopted, see Note 1 - Description of the Business and Basis of Presentation of the Notes to Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

BLOOMIN’ BRANDS, INC.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis