What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-01 compared with 2022-08-02 · 254 added, 198 removed, 424 unchanged (52% of the section changed)

41 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 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.

As of September 25, 2022, we owned and operated 1,176 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:

Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar.

Financial Highlights

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

Financial Highlights - Our financial highlights for the thirteen weeks ended September 25, 2022 include the following:

combined and Outback Steakhouse comparable restaurant sales of 1.4% and 2.3%, respectively;

• 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

Key measures that we use in evaluating our restaurants and assessing our business include the following:

• Increase in Total revenues of 4.5%, as compared to the third quarter of 2021;

• Operating income and restaurant-level operating margins of 4.9% and 13.1%, respectively, as compared to 1.5% and 10.3%, respectively, for the third quarter of 2021;

• Operating income of $51.3 million, as compared to $14.8 million in the third quarter of 2021;

• Diluted earnings per share of $0.34 as compared to $0.03 for the third quarter of 2021.

Key Financial Performance Indicators - Key measures that we use in evaluating our restaurants and assessing our business include the following:

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

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• 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 (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 (Loss) Income.

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

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

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:

• 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 is a non-GAAP financial measure 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.

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;

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(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;

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

(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 (Loss) 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 (loss) 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;

• Adjusted restaurant-level operating margin, Adjusted income from operations, Adjusted net income and Adjusted diluted earnings per share — non-GAAP financial measures utilized to evaluate our operating performance.

We believe that our use of non-GAAP financial measures permits investors to assess the operating performance of our business relative to our performance based on U.S.

We believe that our use of these non-GAAP financial measures permits investors to assess the operating performance of our business relative to our performance based on U.S.

GAAP results and relative to other companies within the restaurant industry by isolating the effects of certain items that may vary from period to period without correlation to core operating performance or that vary widely among similar companies.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Selected Operating Data

The table below presents the number of our full-service restaurants in operation as of the periods indicated:

Selected Operating Data - The table below presents the number of our full-service restaurants in operation as of the periods indicated:

Number of restaurants (at end of the period):

JUNE 26, 2022 JUNE 27, 2021

SEPTEMBER 25, 2022 SEPTEMBER 26, 2021

Outback Steakhouse

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____________________

(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.

(1) Previously presented restaurant counts as of September 26, 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 August 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 September 25, 2022 and September 26, 2021.

International Franchised Other included three Aussie Grill locations as of September 25, 2022 and September 26, 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):

JUNE 26, 2022 JUNE 27, 2021

SEPTEMBER 25, 2022 SEPTEMBER 26, 2021

Company-owned 1 3

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

JUNE 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 98.5 % 98.6 % 98.5 % 98.6 %

14 unchanged sentences

Interest expense, net (1.2) (1.4) (1.3) (1.4)

(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 (loss) income (5.5) 7.9 0.7 7.5

Income before provision (benefit) for income taxes 3.7 0.1 2.5 6.0

Provision (benefit) for income taxes 0.6 (0.4) 1.0 0.8

Net income 3.1 0.5 1.5 5.2

net income attributable to noncontrolling interests 0.1 0.2 0.2 0.2

Net (loss) income attributable to Bloomin’ Brands

Net income attributable to Bloomin’ Brands

3.0 % 0.3 % 1.3 % 5.0 %

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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

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

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

Comparable restaurant sales (1) 34.9 212.6

Restaurant openings (1) 18.0 46.0

Effect of foreign currency translation 11.7 8.6

Restaurant closures (1) (8.2) (24.7)

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

Effect of foreign currency translation (1.0) 7.6

For the periods ended September 25, 2022 $ 1,040.4 $ 3,272.9

____________________

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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 during the thirteen weeks ended September 25, 2022 was primarily due to higher comparable restaurant sales and the opening of 42 new restaurants not included in our comparable restaurant sales base.

The increase in Restaurant sales was partially offset by the closure of 22 restaurants since June 27, 2021.

The increase in Restaurant sales during the thirty-nine weeks ended September 25, 2022 was primarily due to:

(i) higher comparable restaurant sales, (ii) the opening of 54 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 25 restaurants since December 27, 2020.

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

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

JUNE 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

Average restaurant unit volumes (weekly):

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(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.

(1) Translated at average exchange rates of 5.18 and 5.15 for the thirteen weeks ended September 25, 2022 and September 26, 2021, respectively, and 5.16 and 5.27 for the thirty-nine weeks ended September 25, 2022 and September 26, 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 (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

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 THIRTY-NINE WEEKS ENDED

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

Year over year percentage change:

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Includes trading day impact from calendar period reporting.

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

(3) Includes the impact of menu pricing changes, product mix and discounts.

The thirteen weeks ended December 25, 2022 will include the impact of Hurricane Ian which is estimated to be 0.3% to U.S.

comparable sales and approximately $0.03 to diluted earnings per share, inclusive of storm-related costs.

BLOOMIN’ BRANDS, INC.

2 unchanged sentences

Franchise and other revenues

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

Franchise revenues $ 11.8 $ 12.9 $ 37.8 $ 31.9

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____________________

(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.

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

COSTS AND EXPENSES

Food and beverage costs

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 CHANGE SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 CHANGE

Food and beverage costs $ 332.9 $ 304.3 $ 1,056.8 $ 908.3

% of Restaurant sales 32.0 % 30.5 % 1.5 % 32.3 % 30.0 % 2.3 %

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.

Food and beverage costs increased as a percentage of Restaurant sales during the thirteen weeks ended September 25, 2022 as compared to the thirteen weeks ended September 26, 2021 primarily due to 3.5% from commodity inflation and 0.5% from product mix.

These increases were partially offset by decreases as a percentage of Restaurant sales of 2.2% from increases in average check per person, primarily driven by an increase in menu pricing, and 0.3% from the impact of certain cost saving initiatives.

Food and beverage costs increased as a percentage of Restaurant sales during the thirty-nine weeks ended September 25, 2022 as compared to the thirty-nine weeks ended September 26, 2021 primarily due to 4.0% from commodity inflation, partially offset by a decrease as a percentage of Restaurant sales of 1.8% from increases in average check per person, primarily driven by an increase in menu pricing.

In aggregate, menu pricing increases during 2022 have trailed the current level of commodity inflation.

Labor and other related expenses

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 CHANGE SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 CHANGE

Labor and other related $ 303.2 $ 290.2 $ 924.5 $ 859.9

% of Restaurant sales 29.1 % 29.1 % — % 28.2 % 28.4 % (0.2) %

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.

Labor and other related expenses were flat as a percentage of Restaurant sales during the thirteen weeks ended September 25, 2022 as compared to the thirteen weeks ended September 26, 2021 primarily due to decreases of 1.7% from leveraging increased restaurant sales due to increases in average check per person and lapping the impact of COVID-19, primarily in Brazil.

These decreases were partially offset by an increase as a percentage of Restaurant sales of 1.8% 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

Labor and other related expenses decreased as a percentage of Restaurant sales during the thirty-nine weeks ended September 25, 2022 as compared to the thirty-nine weeks ended September 26, 2021 primarily due to 2.0% from

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

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.

leveraging increased restaurant sales due to increases in average check per person and lapping the impact of COVID-19, primarily in Brazil.

These decreases were offset by an increase as a percentage of Restaurant sales of 2.0% from higher labor cost primarily due to wage rate inflation.

Other restaurant operating expenses

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 CHANGE SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 CHANGE

Other restaurant operating $ 267.9 $ 299.8 $ 790.6 $ 762.5

% of Restaurant sales 25.8 % 30.1 % (4.3) % 24.2 % 25.2 % (1.0) %

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.

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

See Note 15 - Commitments and Contingencies of the Notes to Consolidated Financial Statements for additional details.

Other restaurant operating expenses decreased as a percentage of Restaurant sales during the thirteen weeks ended September 25, 2022 as compared to the thirteen weeks ended September 26, 2021 primarily due to 6.2% from lapping the Carrabba’s Italian Grill royalty termination and 0.9% from leveraging increased restaurant sales due to lapping the impact of COVID-19, primarily in Brazil, and increases in average check per person.

These decreases were partially offset by increases as a percentage of Restaurant sales of 1.5% from higher operating expenses including utilities, primarily due to inflation, and 1.1% from higher advertising expense.

Other restaurant operating expenses decreased as a percentage of Restaurant sales during the thirty-nine weeks ended September 25, 2022 as compared to the thirty-nine weeks ended September 26, 2021 primarily due to 2.0% from lapping the Carrabba’s Italian Grill royalty termination, and 1.5% from leveraging increased restaurant sales due to increases in average check per person and lapping the impact of COVID-19, primarily in Brazil.

General and administrative

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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)

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

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

Employee stock-based compensation (3.6) (8.3)

Incentive compensation (2.8) (10.4)

Compensation, benefits and payroll tax 2.3 6.0

Travel and entertainment 1.1 4.1

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.

For the periods ended September 25, 2022 $ 56.1 $ 174.0

BLOOMIN’ BRANDS, INC.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Provision for impaired assets and restaurant closings

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 CHANGE SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 CHANGE

Provision for impaired assets and restaurant closings $ 2.1 $ 1.6 $ 0.5 $ 4.1 $ 9.0 $ (4.9)

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

Income from operations

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 CHANGE SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 CHANGE

Income from operations $ 51.3 $ 14.8 $ 36.5 $ 246.3 $ 230.5 $ 15.8

% of Total revenues 4.9 % 1.5 % 3.4 % 7.4 % 7.5 % (0.1) %

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.

The increase in Income from operations generated during the thirteen weeks ended September 25, 2022 as compared to the thirteen weeks ended September 26, 2021 was primarily due to:

(i) lapping the Carrabba’s Italian Grill royalty termination, (ii) increases in average check per person, (iii) lapping the impact of COVID-19, primarily in Brazil, and (iv) lower share-based and incentive compensation.

These increases were partially offset by:

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

The increase in Income from operations generated during the thirty-nine weeks ended September 25, 2022 as compared to the thirty-nine weeks ended September 26, 2021 was primarily due to:

(i) increases in average check per person, (ii) lapping the Carrabba’s Italian Grill royalty termination, (iii) lapping the impact of COVID-19, primarily in Brazil, and (iv) lower share-based and incentive compensation.

These increases were partially offset by:

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.

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

Interest expense, net

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 CHANGE SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 CHANGE

Interest expense, net $ 12.7 $ 14.2 $ (1.5) $ 38.9 $ 43.9 $ (5.0)

The decrease in Interest expense, net for the thirteen weeks ended September 25, 2022 as compared to the thirteen weeks ended September 26, 2021 was primarily due to:

(i) the 2025 Notes Partial Repurchase in May 2022, (ii) repayment of the Term loan A in April 2022 and (iii) the impact of our April 2021 interest rate swap terminations.

These decreases were partially offset by increases in interest expense from higher balances and interest rates on revolver debt.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

The decrease in Interest expense, net for the thirty-nine weeks ended September 25, 2022 as compared to the thirty-nine weeks ended September 26, 2021 was primarily due to the repayment of Term loan A in April 2022 and the 2025 Notes Partial Repurchase in May 2022.

These decreases were partially offset by increases from the issuance of the 2029 Notes in April 2021.

Provision (benefit) for income taxes

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in millions) SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 CHANGE SEPTEMBER 25, 2022 SEPTEMBER 26, 2021 CHANGE

Income before provision (benefit) for income taxes $ 38.6 $ 0.6 $ 38.0 $ 82.1 $ 184.6 $ (102.5)

Provision (benefit) for income taxes $ 5.6 $ (4.5) $ 10.1 $ 33.0 $ 24.8 $ 8.2

Effective income tax rate 14.4 % (NM) NM 40.2 % 13.5 % 26.7 %

________________

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 our 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.

SEGMENT PERFORMANCE

11 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.

Refer to Note 16 - Segment Reporting of the Notes to Consolidated Financial Statements for reconciliations of segment income from operations to the consolidated operating results.

Restaurant-level operating margin is widely regarded in the industry as a useful non-GAAP measure to evaluate restaurant-level operating efficiency and performance of ongoing restaurant-level operations, and we use it for these

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

purposes, overall and particularly within our two segments.

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

Restaurant sales $ 910,679 $ 898,790 $ 2,920,241 $ 2,789,142

4 unchanged sentences

Operating income margin 7.4 % 5.2 % 10.3 % 11.9 %

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Restaurant sales

1 unchanged sentence

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)

(dollars in millions) THIRTEEN WEEKS ENDED (1) THIRTY-NINE WEEKS ENDED (1)

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

Comparable restaurant sales 12.8 135.1

Restaurant openings 7.3 20.7

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

Restaurant closures (8.2) (24.7)

For the periods ended September 25, 2022 $ 910.7 $ 2,920.2

____________________

(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 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.

Restaurant sales during the thirteen weeks ended September 25, 2022 was primarily due to higher comparable restaurant sales and the opening of 13 new restaurants not included in our comparable restaurant sales base.

The increase was partially offset by the closure of 21 restaurants since June 27, 2021.

The increase in U.S.

Restaurant sales during the thirty-nine weeks ended September 25, 2022 was primarily due to higher comparable restaurant sales and the opening of 16 new restaurants not included in our comparable restaurant sales base.

The increase in U.S.

Restaurant sales was partially offset by the closure of 24 restaurants since December 27, 2020.

Income from operations

The increase in U.S.

Income from operations generated during the thirteen weeks ended September 25, 2022 as compared to the thirteen weeks ended September 26, 2021 was primarily due to lapping the Carrabba’s Italian Grill royalty termination and increases in average check per person.

These increases were partially offset by:

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

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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:

Income from operations generated during the thirty-nine weeks ended September 25, 2022 as compared to the thirty-nine weeks ended September 26, 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.

These decreases were partially offset by increases in average check per person and lapping the Carrabba’s Italian Grill royalty termination.

International Segment

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

Restaurant sales $ 129,696 $ 97,928 $ 352,627 $ 242,254

4 unchanged sentences

Operating income margin 11.9 % 1.4 % 10.7 % 2.9 %

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 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

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

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

Comparable restaurant sales (1) 22.1 77.5

Effect of foreign currency translation 11.7 8.6

Restaurant openings (1) 10.7 25.3

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

Effect of foreign currency translation (1.0) 7.6

For the periods ended September 25, 2022 $ 129.7 $ 352.7

____________________

(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:

The increase in international Restaurant sales during the thirteen weeks ended September 25, 2022 was primarily due to higher comparable restaurant sales in Brazil and the opening of 29 new restaurants not included in our comparable restaurant sales base.

The increase in international Restaurant sales during the thirty-nine weeks ended September 25, 2022 was primarily due to:

(i) higher comparable restaurant sales in Brazil, (ii) the opening of 38 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 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.

The increase in international Income from operations generated during the thirteen weeks ended September 25, 2022 as compared to the thirteen weeks ended September 26, 2021 was primarily due to:

(i) the recovery of in-restaurant dining in Brazil and (ii) increases in average check per person.

These increases were partially offset by decreases primarily due to:

(i) product mix, (ii) labor inflation and (iii) commodity inflation.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

The increase in international Income from operations generated during the thirty-nine weeks ended September 25, 2022 as compared to the thirty-nine weeks ended September 26, 2021 was primarily due to:

(i) the recovery of in-restaurant dining in Brazil and (ii) increases in average check per person.

These increases were partially offset by decreases primarily due to commodity and labor inflation.

Non-GAAP Financial Measures

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 TWENTY-SIX WEEKS ENDED

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

Consolidated restaurant-level operating income and adjusted restaurant-level operating income and corresponding margins non-GAAP reconciliations - The following table reconciles consolidated Income from operations and the corresponding margins to restaurant-level operating income and adjusted restaurant-level operating income and the corresponding margins for the periods indicated:

Consolidated THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

Income from operations $ 51,309 $ 14,837 $ 246,284 $ 230,472

6 unchanged sentences

Restaurant-level operating margin 13.1 % 10.3 % 15.3 % 16.5 %

THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

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

Legal and other matters (2) — 2,761 — 2,761

Total restaurant-level operating income adjustments — 64,641 — 64,641

Adjusted restaurant-level operating income $ 136,248 $ 167,025 $ 501,003 $ 565,351

Adjusted restaurant-level operating margin 13.1 % 16.8 % 15.3 % 18.6 %

_________________

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

See Note 15 - Commitments and Contingencies of the Notes to Consolidated Financial Statements for additional details regarding the Royalty Termination Agreement.

(2) The thirteen and thirty-nine weeks ended September 26, 2021 include an accrual for Imposto sobre Serviços (“ISS”), a Brazilian municipal service tax, in connection with royalties from our Brazilian subsidiary over the past five years, including related penalties and interest, recorded within Other restaurant operating expense as a result of an unfavorable Brazilian Supreme Court ruling.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Segment adjusted restaurant-level operating margin non-GAAP reconciliations - The following tables reconcile segment Income from operations and the corresponding margins to segment restaurant-level operating income and adjusted restaurant-level operating income and the corresponding margins 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

Income from operations $ 68,501 $ 47,294 $ 305,347 $ 334,326

6 unchanged sentences

Restaurant-level operating margin 12.7 % 10.0 % 15.2 % 17.1 %

International THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED

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

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

Total restaurant-level operating income adjustments — 61,880 — 61,880

Adjusted restaurant-level operating income $ 115,498 $ 152,189 $ 442,517 $ 540,005

Adjusted restaurant-level operating margin 12.7 % 16.9 % 15.2 % 19.4 %

________________

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

International THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

Income from operations $ 15,849 $ 1,412 $ 38,859 $ 7,419

6 unchanged sentences

Restaurant-level operating margin 18.5 % 12.8 % 17.8 % 10.7 %

Legal and other matters (1) — 2,761 — 2,761

Total restaurant-level operating income adjustments — 2,761 — 2,761

Adjusted restaurant-level operating income $ 24,013 $ 15,302 $ 62,881 $ 28,777

Adjusted restaurant-level operating margin 18.5 % 15.6 % 17.8 % 11.9 %

________________

(1) The thirteen and thirty-nine weeks ended September 26, 2021 include an accrual for ISS, a Brazilian municipal service tax, in connection with royalties from our Brazilian subsidiary over the past five years, including related penalties and interest, recorded within Other restaurant operating expense as a result of an unfavorable Brazilian Supreme Court ruling.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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

Adjusted restaurant-level operating margin non-GAAP reconciliations (continued) - 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

JUNE 26, 2022 JUNE 27, 2021

SEPTEMBER 25, 2022 SEPTEMBER 26, 2021

REPORTED ADJUSTED REPORTED ADJUSTED (1)

Restaurant sales 100.0 % 100.0 % 100.0 % 100.0 %

3 unchanged sentences

Restaurant-level operating margin 13.1 % 13.1 % 10.3 % 16.8 %

TWENTY-SIX WEEKS ENDED

JUNE 26, 2022 JUNE 27, 2021

THIRTY-NINE WEEKS ENDED

SEPTEMBER 25, 2022 SEPTEMBER 26, 2021

REPORTED ADJUSTED REPORTED ADJUSTED (1)

Restaurant sales 100.0 % 100.0 % 100.0 % 100.0 %

3 unchanged sentences

Restaurant-level operating margin 15.3 % 15.3 % 16.5 % 18.6 %

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

_________________

(1) See the Consolidated restaurant-level operating income and adjusted restaurant-level operating income and corresponding margins non-GAAP reconciliations table above for details regarding the restaurant-level operating margin adjustments.

All restaurant-level operating margin adjustments for the periods presented were recorded within Other restaurant operating expense.

Adjusted income from operations non-GAAP reconciliations - The following table reconciles Income from operations and the corresponding margins to adjusted income from operations and the corresponding margins 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

Income from operations $ 51,309 $ 14,837 $ 246,284 $ 230,472

Operating income margin 4.9 % 1.5 % 7.4 % 7.5 %

Total restaurant-level operating margin adjustments (1) — 64,641 — 64,641

Legal and other matters (2) — 3,204 — (3,133)

2 unchanged sentences

Adjusted operating income margin 4.9 % 8.2 % 7.4 % 9.5 %

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

_________________

(2) The thirteen and thirty-nine weeks ended September 26, 2021 include an adjustment to reduce our initial recorded estimate and net benefit, respectively, from the recognition of recoverable PIS and COFINS taxes, including accrued interest within other revenues as a result of favorable court rulings in Brazil.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Adjusted net income and Adjusted diluted earnings per share non-GAAP reconciliations - The following table reconciles Diluted net income attributable to Bloomin’ Brands to adjusted net income and adjusted 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

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

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

Net (loss) income attributable to Bloomin’ Brands

Net income attributable to Bloomin’ Brands

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

6 unchanged sentences

Adjusted net income $ 31,986 $ 55,416 $ 170,499 $ 203,802

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

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

Adjusted diluted earnings per share (5) $ 0.35 $ 0.57 $ 1.84 $ 2.10

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.

(1) 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.

(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.

(2) See the Adjusted income from operations non-GAAP reconciliations table above for details regarding Income from operations adjustments.

(3) The thirty-nine weeks ended September 25, 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

(4) The tax effect of non-GAAP adjustments were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates.

For the thirty-nine weeks ended September 25, 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.

(5) Adjusted diluted weighted average common shares outstanding was calculated excluding the dilutive effect of 3,690 and 10,476 shares for the thirteen weeks ended September 25, 2022 and September 26, 2021, respectively, and 6,732 and 10,453 shares for the thirty-nine weeks ended September 25, 2022 and September 26, 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 thirty-nine weeks ended September 26, 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.

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 TWENTY-SIX WEEKS ENDED

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

Outback Steakhouse $ 119 $ 118 $ 377 $ 329

8 unchanged sentences

_____________________

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

(1) Includes franchise sales for off-premises only kitchens in South Korea.

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

Liquidity and Capital Resources

Cash and Cash Equivalents

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.

As of September 25, 2022, we had $90.7 million in cash and cash equivalents, of which $34.5 million was held by foreign affiliates.

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

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

As of September 25, 2022, we had aggregate accumulated foreign earnings of approximately $28.6 million.

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

13 unchanged sentences

2022 payments (195,000) (589,500) (125,000) — (909,500)

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 %

Balance as of September 25, 2022 $ — $ 420,000 $ 105,000 $ 300,000 $ 825,000

Interest rates, as of September 25, 2022 (1) 4.26 % 5.00 % 5.13 %

Principal maturity date April 2026 May 2025 April 2029

____________________

(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.

(1) Interest rate for revolving credit facility represents the weighted average interest rate as of September 25, 2022.

As of September 25, 2022, we had $560.0 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.

6 unchanged sentences

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.

As of September 25, 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.

2025 Notes Partial Repurchase - 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.

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

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.

5 unchanged sentences

However, our ability to continue to meet these requirements and obligations will depend on, among other things, our ability to achieve anticipated levels of revenue and cash flow and our ability to manage costs and working capital successfully.

Capital Expenditures - We estimate that our capital expenditures will total approxim a tely $200 million to $210 million in 2022.

Capital Expenditures - We estimate that our capital expenditures will total approximately $200 million to $210 million in 2022.

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 July 2022, our Board declared a quarterly cash dividend of $0.14 per share, payable on August 24, 2022.

Dividends and Share Repurchases - In October 2022, our Board declared a quarterly cash dividend of $0.14 per share, payable on November 23, 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 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:

As of September 25, 2022, we had $44.0 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 September 25, 2022:

(dollars in thousands) DIVIDENDS PAID SHARE REPURCHASES TOTAL

8 unchanged sentences

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

Third fiscal quarter 2022 12,475 33,549 46,024

Total (1) $ 215,677 $ 1,054,581 $ 1,270,258

________________

(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.

(1) Subsequent to September 25, 2022, we repurchased $13.8 million of our common stock under a Rule 10b5-1 plan through October 28, 2022.

Deferred Compensation Programs - The deferred compensation obligation due to managing and chef partners was $5.2 million and $15.5 million as of September 25, 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 June 26, 2022.

The obligation for managing and chef partners’ deferred compensation was fully funded as of September 25, 2022.

BLOOMIN’ BRANDS, INC.

3 unchanged sentences

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

TWENTY-SIX WEEKS ENDED

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

THIRTY-NINE WEEKS ENDED

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

Net cash provided by operating activities $ 292,579 $ 304,246

3 unchanged sentences

Net increase (decrease) in cash, cash equivalents and restricted cash $ 1,764 $ (29,824)

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.

Operating activities - The decrease in net cash provided by operating activities during the thirty-nine weeks ended September 25, 2022 as compared to the thirty-nine weeks ended September 26, 2021 was primarily due to the timing of operational payments and receipts and increased employee compensation payments, partially offset by lapping cash paid in connection with the Carrabba’s Italian Grill royalty termination during 2021.

Investing activities - The increase in net cash used in investing activities during the thirty-nine weeks ended September 25, 2022 as compared to the thirty-nine weeks ended September 26, 2021 was primarily due to higher capital expenditures.

Financing activities - The decrease in net cash used in financing activities during the thirty-nine weeks ended September 25, 2022 as compared the thirty-nine weeks ended September 26, 2021 was primarily due to net draws on the revolving credit facility during 2022, generally used to settle debt obligations in excess of the principal balance due in connection with the 2025 Notes Partial Repurchase, 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) JUNE 26, 2022 DECEMBER 26, 2021

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

Current assets $ 275,710 $ 352,792

2 unchanged sentences

Working capital (deficit) includes:

(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.

(i) Unearned revenue primarily from unredeemed gift cards of $291.8 million and $398.8 million as of September 25, 2022 and December 26, 2021, respectively, and (ii) current operating lease liabilities of $181.4 million and $177.0 million as of September 25, 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).

2 unchanged sentences

Recently Issued Financial Accounting Standards

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.

For a description of recently issued Financial Accounting Standards that we adopted during the thirty-nine weeks ended September 25, 2022 and, that are applicable to us and likely to have material effect on our consolidated

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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