What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-11-01 compared with 2022-08-02 · 198 added, 192 removed, 609 unchanged (39% of the section changed)

2 unchanged sentences

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

JUNE 26, 2022 DECEMBER 26, 2021

SEPTEMBER 25, 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 June 26, 2022 and December 26, 2021

no shares issued and outstanding as of September 25, 2022 and December 26, 2021

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

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

88,449,929 and 89,252,823 shares issued and outstanding as of September 25, 2022 and December 26, 2021, respectively

Additional paid-in capital 1,159,722 1,119,728

7 unchanged sentences

BLOOMIN’ BRANDS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021

Restaurant sales $ 1,040,375 $ 996,718 $ 3,272,868 $ 3,031,396

14 unchanged sentences

Interest expense, net ( 12,696 ) ( 14,245 ) ( 38,877 ) ( 43,863 )

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

Income before provision (benefit) for income taxes 38,613 597 82,092 184,562

Provision (benefit) for income taxes 5,563 ( 4,454 ) 33,028 24,827

Net income 33,050 5,051 49,064 159,735

net income attributable to noncontrolling interests 1,064 1,602 5,202 4,879

Net (loss) income attributable to Bloomin’ Brands

Net income attributable to Bloomin’ Brands

$ 31,986 $ 3,449 $ 43,862 $ 154,856

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

Other comprehensive (loss) income:

Net income $ 33,050 $ 5,051 $ 49,064 $ 159,735

Other comprehensive income:

Foreign currency translation adjustment ( 13,041 ) 1,673 10,182 5,113

Unrealized (loss) gain on derivatives, net of tax — ( 153 ) 573 ( 323 )

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

Reclassification of adjustments for loss on derivatives included in Net income, net of tax — 1,519 954 6,036

Impact of terminated interest rate swaps included in Net income, net of tax 2,255 1,479 7,440 2,950

Comprehensive income 22,264 9,569 68,213 173,511

comprehensive income attributable to noncontrolling interests 1,064 1,602 5,202 4,879

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

(Loss) earnings per share:

Comprehensive income attributable to Bloomin’ Brands $ 21,200 $ 7,967 $ 63,011 $ 168,632

Earnings per share:

Basic $ 0.36 $ 0.04 $ 0.49 $ 1.74

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

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

Net income — — — 31,986 — 1,064 33,050

Other comprehensive loss, net of tax — — — — ( 10,786 ) — ( 10,786 )

Cash dividends declared, $ 0.14 per common share

3 unchanged sentences

Common stock issued under stock plans (1) 45 — 487 — — — 487

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

— — ( 3,301 ) — — 539 ( 2,762 )

Distributions to noncontrolling interests — — — — — ( 1,477 ) ( 1,477 )

Contributions from noncontrolling interests — — — — — 141 141

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

September 25, 2022 88,450 $ 884 $ 1,159,722 $ ( 735,268 ) $ ( 186,840 ) $ 1,647 $ 240,145

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

13 unchanged sentences

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

September 25, 2022 88,450 $ 884 $ 1,159,722 $ ( 735,268 ) $ ( 186,840 ) $ 1,647 $ 240,145

BLOOMIN’ BRANDS, INC.

6 unchanged sentences

SHARES AMOUNT

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

Net income — — — 3,449 — 1,602 5,051

2 unchanged sentences

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

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

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

Contributions from noncontrolling interests — — — — — 374 374

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

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

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

4 unchanged sentences

Common stock issued under stock plans (1) 1,392 13 9,870 — — — 9,883

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

Distributions to noncontrolling interests — — — — — ( 6,203 ) ( 6,203 )

Contributions from noncontrolling interests — — — — — 1,044 1,044

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

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

________________

4 unchanged sentences

(DOLLARS IN THOUSANDS, UNAUDITED)

TWENTY-SIX WEEKS ENDED

JUNE 26, 2022 JUNE 27, 2021

THIRTY-NINE WEEKS ENDED

SEPTEMBER 25, 2022 SEPTEMBER 26, 2021

Cash flows provided by operating activities:

16 unchanged sentences

Proceeds from disposal of property, fixtures and equipment 207 7,052

Proceeds received on life insurance policies 14,598 9,270

Capital expenditures ( 137,260 ) ( 85,339 )

5 unchanged sentences

(DOLLARS IN THOUSANDS, UNAUDITED)

TWENTY-SIX WEEKS ENDED

JUNE 26, 2022 JUNE 27, 2021

THIRTY-NINE WEEKS ENDED

SEPTEMBER 25, 2022 SEPTEMBER 26, 2021

Cash flows used in financing activities:

27 unchanged sentences

Leased assets obtained in exchange for new finance lease liabilities $ 2,417 $ 1,229

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

Increase in liabilities from the acquisition of property, fixtures and equipment $ 14,961 $ 3,006

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

26 unchanged sentences

Revenue Recognition

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

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 THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021

Restaurant sales $ 1,040,375 $ 996,718 $ 3,272,868 $ 3,031,396

5 unchanged sentences

________________

(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.

(1) The thirteen and thirty-nine weeks ended September 26, 2021 include an adjustment of $( 3.2 ) million to reduce the Company’s initial recorded estimate and net $ 3.1 million benefit, respectively, within 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 net 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

SEPTEMBER 25, 2022 SEPTEMBER 26, 2021

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

16 unchanged sentences

(UNAUDITED) - Continued

TWENTY-SIX WEEKS ENDED

JUNE 26, 2022 JUNE 27, 2021

THIRTY-NINE WEEKS ENDED

SEPTEMBER 25, 2022 SEPTEMBER 26, 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) JUNE 26, 2022 DECEMBER 26, 2021

(dollars in thousands) SEPTEMBER 25, 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 TWENTY-SIX WEEKS ENDED

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021

Balance, beginning of the period $ 12,338 $ 12,548 $ 17,793 $ 19,300

7 unchanged sentences

The following table is a rollforward of unearned gift card revenue 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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021

Balance, beginning of the period $ 303,544 $ 293,955 $ 387,945 $ 373,048

4 unchanged sentences

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

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

THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 26, 2021

Impairment losses

$ 5,768 $ 7,174

International 180

1 unchanged sentence

Total impairment losses 8,726

Restaurant closure benefits

( 92 ) ( 34 )

Restaurant closure charges (benefits)

International ( 153 )

Total restaurant closure benefits ( 245 ) ( 187 )

Total restaurant closure charges 236

Provision for impaired assets and restaurant closings $ 8,962

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

Impairment and closure charges during the period 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.

2 unchanged sentences

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

THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 25, 2022

Balance, beginning of the period $ 8,485

4 unchanged sentences

________________

(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 .

(1) As of September 25, 2022, the Company had exit-related accruals related to certain closure and restructuring initiatives of $ 1.5 million recorded in Accrued and other current liabilities and $ 4.3 million recorded in Non-current operating lease liabilities on its Consolidated Balance Sheet.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(UNAUDITED) - Continued

(Loss) Earnings Per Share

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 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

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(in thousands, except per share data) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021

Net income attributable to Bloomin’ Brands

$ 31,986 $ 3,449 $ 43,862 $ 154,856

Convertible senior notes if-converted method interest adjustment, net of tax (1) — — — 460

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

Diluted net income attributable to Bloomin’ Brands $ 31,986 $ 3,449 $ 43,862 $ 155,316

Basic weighted average common shares outstanding 89,192 89,229 89,149 88,890

6 unchanged sentences

Diluted weighted average common shares outstanding 94,736 107,783 99,609 109,410

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

Basic earnings per share $ 0.36 $ 0.04 $ 0.49 $ 1.74

Diluted earnings per share $ 0.34 $ 0.03 $ 0.44 $ 1.42

________________

1 unchanged sentence

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.

(2) During the thirty-nine weeks ended September 25, 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

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 THIRTY-NINE WEEKS ENDED

(shares in thousands) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021

Stock options 2,297 — 2,012 455

1 unchanged sentence

Nonvested performance-based share units 771 376 574 424

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

Stock-based Compensation Plans

The Company recognized stock-based compensation expense as follows 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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021

Performance-based share units (1) $ 67 $ 3,026 $ 5,526 $ 11,813

3 unchanged sentences

________________

(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.

(1) The thirteen and thirty-nine weeks ended September 25, 2022 include a cumulative life-to-date adjustment to decrease expense for PSUs granted in fiscal year 2020 based on revised Company projections of performance criteria set forth in the award agreements.

The thirty-nine weeks ended September 26, 2021 includes a cumulative life-to-date adjustment to increase expense for PSUs granted in fiscal years 2019, 2020 and 2021 based on revised Company 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:

TWENTY-SIX WEEKS ENDED

JUNE 26, 2022 JUNE 27, 2021

THIRTY-NINE WEEKS ENDED

SEPTEMBER 25, 2022 SEPTEMBER 26, 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 % 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:

(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 thirty-nine weeks ended September 25, 2022 and September 26, 2021, respectively.

The following represents unrecognized stock-based compensation expense and the remaining weighted average vesting period as of September 25, 2022:

UNRECOGNIZED COMPENSATION EXPENSE

2 unchanged sentences

Restricted stock units $ 9,673 1.8

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) JUNE 26, 2022 DECEMBER 26, 2021

(dollars in thousands) SEPTEMBER 25, 2022 DECEMBER 26, 2021

Prepaid expenses $ 31,468 $ 21,194

9 unchanged sentences

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

JUNE 26, 2022 DECEMBER 26, 2021

SEPTEMBER 25, 2022 DECEMBER 26, 2021

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

13 unchanged sentences

(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.

(2) Interest rate represents the weighted average interest rate as of September 25, 2022 and the base rate option elected in anticipation of impending repayment as of December 26, 2021.

(3) During the thirty-nine weeks ended September 25, 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.

(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 thirty-nine weeks ended September 25, 2022.

See Note 8 - Convertible Senior Notes for additional details.

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”), maturing on April 16, 2026.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(UNAUDITED) - Continued

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”), maturing on April 16, 2026.

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 purposes of calculating interest under the Senior Secured Credit Facility.

11 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.

As of September 25, 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

(dollars in thousands) SEPTEMBER 25, 2022

Year 1 $ 1,250

8 unchanged sentences

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

The Noteholders agreed to exchange $ 125.0 million in 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

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(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”).

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.

convertible senior note hedges and warrants, were subject to derivative accounting.

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 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.

In connection with dividends paid during the thirty-nine weeks ended September 25, 2022, the conversion rate for the remaining 2025 Notes decreased to approximately $ 11.66 per share, which represents 85.743 shares of common stock per $ 1,000 principal amount of the 2025 Notes, or a total of approximately 9.003 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) JUNE 26, 2022 DECEMBER 26, 2021

(dollars in thousands) SEPTEMBER 25, 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.

During the thirty-nine weeks ended September 25, 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 TWENTY-SIX WEEKS ENDED

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021

Coupon interest $ 1,313 $ 2,875 $ 6,785 $ 8,625

3 unchanged sentences

(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 June 26, 2022, the remaining holders of the 2025 Notes are eligible to convert their 2025 Notes during the third quarter of 2022.

Based on the daily closing prices of the Company’s stock during the quarter ended September 25, 2022, the remaining holders of the 2025 Notes are eligible to convert their 2025 Notes during the fourth 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.

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

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(UNAUDITED) - Continued

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 twenty-six weeks ended June 26, 2022, the strike price for the remaining Warrant Transactions decreased to $ 16.43 .

dividends paid during the thirty-nine weeks ended September 25, 2022, the strike price for the remaining Warrant Transactions decreased to $16.33.

Other Long-term Liabilities, Net

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

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

(dollars in thousands) SEPTEMBER 25, 2022 DECEMBER 26, 2021

Accrued insurance liability $ 30,419 $ 31,517

Deferred payroll tax liabilities (1) — 27,302

Executive management deferred compensation obligations 19,098 23,543

Deferred compensation obligations 28,351 37,514

Other long-term liabilities 28,082 28,909

1 unchanged sentence

_______________

(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.

(1) During the thirty-nine weeks ended September 25, 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 June 26, 2022, $ 77.5 million remained available for repurchase under the 2022 Share Repurchase Program.

As of September 25, 2022, $ 44.0 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:

2 unchanged sentences

Second fiscal quarter 1,761 $ 20.30 35,749

Third fiscal quarter 1,746 $ 19.21 33,549

Total common stock repurchases (1) 4,058 $ 19.96 $ 81,000

________________

(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.

(1) Subsequent to September 25, 2022, the Company repurchased 682 thousand shares of its common stock for $ 13.8 million under a Rule 10b5-1 plan through October 28, 2022.

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

2 unchanged sentences

Second fiscal quarter 0.14 12,418

Third fiscal quarter 0.14 12,475

Total cash dividends declared and paid $ 0.42 $ 37,452

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 .

In October 2022, the Board declared a quarterly cash dividend of $ 0.14 per share, payable on November 23, 2022 to shareholders of record at the close of business on November 9, 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) JUNE 26, 2022 DECEMBER 26, 2021

(dollars in thousands) SEPTEMBER 25, 2022 DECEMBER 26, 2021

Foreign currency translation adjustment $ ( 185,298 ) $ ( 195,480 )

1 unchanged sentence

Accumulated other comprehensive loss $ ( 186,840 ) $ ( 205,989 )

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

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021

Foreign currency translation adjustment $ ( 13,041 ) $ 1,673 $ 10,182 $ 5,113

Unrealized (loss) gain on derivatives, net of tax — ( 153 ) 573 ( 323 )

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

Reclassification of adjustments for loss on derivatives included in Net income, net of tax (1) — 1,519 954 6,036

Impact of terminated interest rate swaps included in Net income, net of tax (1) 2,255 1,479 7,440 2,950

Total gain on derivatives, net of tax 2,255 2,845 8,967 8,663

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

Other comprehensive (loss) income attributable to Bloomin’ Brands $ ( 10,786 ) $ 4,518 $ 19,149 $ 13,776

________________

6 unchanged sentences

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.

Following these terminations, the unrealized loss related to the terminated swap agreements included in Accumulated other comprehensive loss is 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.

As of September 25, 2022, the Company estimated $ 2.2 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.

7 unchanged sentences

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

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

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021

Interest rate swap agreements:

Interest rate swap expense recognized in Interest expense, net $ — $ ( 2,045 ) $ ( 1,284 ) $ ( 8,127 )

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

Income tax benefit recognized in Provision (benefit) for income taxes — 526 330 2,091

Net effects of interest rate swap agreements $ — $ ( 1,519 ) $ ( 954 ) $ ( 6,036 )

1 unchanged sentence

Terminated interest rate swap expense recognized in Interest expense, net $ ( 3,034 ) $ ( 1,992 ) $ ( 10,014 ) $ ( 3,973 )

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

Income tax benefit recognized in Provision (benefit) for income taxes 779 513 2,574 1,023

Net effects of terminated interest rate swap agreements $ ( 2,255 ) $ ( 1,479 ) $ ( 7,440 ) $ ( 2,950 )

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

Total net effects on Net income $ ( 2,255 ) $ ( 2,998 ) $ ( 8,394 ) $ ( 8,986 )

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 JUNE 26, 2022 DECEMBER 26, 2021

(dollars in thousands) CONSOLIDATED BALANCE SHEET CLASSIFICATION SEPTEMBER 25, 2022 DECEMBER 26, 2021

Operating lease right-of-use assets Operating lease right-of-use assets $ 1,115,004 $ 1,130,873

7 unchanged sentences

________________

(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.

(1) Net of accumulated amortization of $ 3.4 million and $ 3.3 million as of September 25, 2022 and December 26, 2021, respectively.

(2) Excludes current accrued contingent percentage rent of $ 3.3 million and $ 3.5 million, as of September 25, 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 (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

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 THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021

Operating leases (1) Other restaurant operating $ 45,817 $ 44,807 $ 136,757 $ 133,362

6 unchanged sentences

________________

(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.

(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 September 25, 2022 and September 26, 2021, respectively, and $ 9.1 million and $ 9.9 million for the thirty-nine weeks ended September 25, 2022 and September 26, 2021, respectively, which is included in General and administrative expense.

(2) Includes COVID-19-related rent abatements for the thirteen and thirty-nine weeks ended September 26, 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:

TWENTY-SIX WEEKS ENDED

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

THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 25, 2022 SEPTEMBER 26, 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:

JUNE 26, 2022 DECEMBER 26, 2021

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

SEPTEMBER 25, 2022 DECEMBER 26, 2021

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

Cash equivalents:

6 unchanged sentences

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

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

Fair value of each class of financial instrument is determined based on the following:

8 unchanged sentences

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

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

THIRTY-NINE WEEKS ENDED

SEPTEMBER 26, 2021

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

4 unchanged sentences

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

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

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

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(UNAUDITED) - Continued

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

Debt is carried at amortized cost;

1 unchanged sentence

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

JUNE 26, 2022 DECEMBER 26, 2021

SEPTEMBER 25, 2022 DECEMBER 26, 2021

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

5 unchanged sentences

2029 Notes $ 300,000 $ 252,471 $ 300,000 $ 304,395

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 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.

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021

Income before provision (benefit) for income taxes $ 38,613 $ 597 $ 82,092 $ 184,562

Provision (benefit) for income taxes $ 5,563 $ ( 4,454 ) $ 33,028 $ 24,827

Effective income tax rate 14.4 % (NM) 40.2 % 13.5 %

________________

NM Not meaningful.

The provision for income taxes for the thirteen weeks ended September 25, 2022 increased primarily due to higher pre-tax book income across the Company’s U.S.

and international subsidiaries.

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

The effective income tax rate for the thirty-nine weeks ended September 25, 2022 increased by 26.7 percentage points as compared to the thirty-nine weeks ended September 26, 2021.

The increase was primarily due to the non-deductible losses associated with the 2025 Notes Partial Repurchase recorded during the thirty-nine weeks ended September 25, 2022.

On September 16, 2022, the Company’s Brazilian subsidiary was granted a preliminary injunction granting it eligibility to benefit from a recent law in Brazil that established several emergency actions by the government to offset the economic effects of the COVID-19 pandemic for the tourism and events sector.

The new law introduced a 100% exemption from Brazilian corporate income tax (IRPJ and CSLL) and federal value-added taxes (PIS and COFINS) for a period of 5 years.

The injunction was issued as part of an ongoing lawsuit initiated by the Company’s Brazilian subsidiary due to the uncertainty regarding the restaurant industry’s eligibility for this exemption.

The Company has not recognized a financial impact for the thirteen-week period ended September 25, 2022 as the Company continues to evaluate the exemption, the uncertainty and impacts of the injunction, and the best courses of action moving forward.

A restaurant company employer may claim a credit against its federal income taxes for FICA taxes paid on certain tipped wages (the “FICA tax credit”).

The level of FICA tax credits is primarily driven by U.S.

Restaurant sales and is not impacted by costs incurred that may reduce pre-tax income.

The effective income tax rate for the thirteen weeks ended September 25, 2022 was lower than the Company’s blended federal and state statutory rate of approximately 26 % primarily due to the benefit of FICA tax credits on certain tipped wages.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

The effective income tax rate for the thirty-nine weeks ended September 25, 2022 was higher than the statutory rate primarily due to the non-deductible losses associated with the 2025 Notes Partial Repurchase recorded during the thirty-nine weeks ended September 25, 2022.

The effective income tax rates for the thirteen and thirty-nine weeks ended September 26, 2021 were lower than the statutory rate primarily due to the benefit of FICA tax credits on certain tipped wages.

On December 28, 2021, the U.S.

3 unchanged sentences

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.

The valuation allowance related to the credits expected to be utilized has been released during the thirty-nine weeks ended September 25, 2022.

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 $ 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.

The Company recorded reserves of $ 8.6 million and $ 7.1 million for certain of its outstanding legal proceedings as of September 25, 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.

4 unchanged sentences

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

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

Lease Guarantees - The Company assigned its interest, and is contingently liable, under certain real estate leases.

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

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

However, it is possible that the Company’s business, results of operations,

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(UNAUDITED) - Continued

liquidity, or financial condition could be materially affected in a particular future reporting period by the unfavorable resolution of one or more matters or contingencies during such period.

Lease Guarantees - The Company assigned its interest, and is contingently liable, under certain real estate leases.

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

As of September 25, 2022, the undiscounted payments that the Company could be required to make in the event of non-payment by the primary lessees was approximately $ 22.4 million.

The present value of these potential payments discounted at the Company’s incremental borrowing rate as of September 25, 2022 was approximately $ 15.7 million.

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

As of September 25, 2022 and December 26, 2021, the Company’s recorded contingent lease liability was $ 7.5 million and $ 8.7 million, respectively.

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

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

was terminated.

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

Segment Reporting

12 unchanged sentences

Excluded from Income from operations for U.S.

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

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

The following table is a summary of Total revenues by segment 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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021

Total revenues

2 unchanged sentences

Total revenues $ 1,055,763 $ 1,010,463 $ 3,321,460 $ 3,075,302

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

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 2021

Segment income from operations

8 unchanged sentences

Interest expense, net ( 12,696 ) ( 14,245 ) ( 38,877 ) ( 43,863 )

(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

Income before provision (benefit) for income taxes $ 38,613 $ 597 $ 82,092 $ 184,562

The following table is a summary of Depreciation and amortization expense by segment 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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 SEPTEMBER 25, 2022 SEPTEMBER 26, 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