What changed in this filing

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Item 1. Financial Statements

2023-05-02 compared with 2022-11-01 · 145 added, 399 removed, 408 unchanged (57% of the section changed)

1 unchanged sentence

CONSOLIDATED BALANCE SHEETS

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

SEPTEMBER 25, 2022 DECEMBER 26, 2021

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

MARCH 26, 2023 DECEMBER 25, 2022

Current assets

Cash and cash equivalents $ 94,441 $ 84,735

Restricted cash and cash equivalents 143 1,472

Inventories 67,898 78,124

23 unchanged sentences

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

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

no shares issued and outstanding as of March 26, 2023 and December 25, 2022

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

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

87,465,214 and 87,696,200 shares issued and outstanding as of March 26, 2023 and December 25, 2022, respectively

Additional paid-in capital 1,141,017 1,161,912

5 unchanged sentences

Total liabilities and stockholders’ equity $ 3,231,793 $ 3,320,425

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

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

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

THIRTEEN WEEKS ENDED

MARCH 26, 2023 MARCH 27, 2022

Restaurant sales $ 1,228,234 $ 1,123,575

2 unchanged sentences

Costs and expenses

Food and beverage costs 332,939 304,300 1,056,768 908,272

Food and beverage 384,214 359,370

Labor and other related 341,542 312,511

5 unchanged sentences

Income from operations 120,633 107,256

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

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

Other income, net — 5 — 26

Interest expense, net ( 12,444 ) ( 13,633 )

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

Income before provision for income taxes 108,189 93,623

Provision for income taxes 14,761 15,929

Net income 93,428 77,694

5 unchanged sentences

Foreign currency translation adjustment ( 1,134 ) 11,283

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

Unrealized gain on derivatives, net of tax — 573

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

9 unchanged sentences

Diluted 98,011 103,454

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

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

BLOOMIN’ BRANDS, INC.

6 unchanged sentences

SHARES AMOUNT

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

— — ( 12,475 ) — — — ( 12,475 )

Repurchase and retirement of common stock ( 1,746 ) ( 18 ) — ( 33,531 ) — — ( 33,549 )

Stock-based compensation — — 2,013 — — — 2,013

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

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

Contributions from noncontrolling interests — — — — — 141 141

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

December 25, 2022 87,696 $ 877 $ 1,161,912 $ ( 706,109 ) $ ( 185,311 ) $ 2,540 $ 273,909

Net income — — — 91,311 — 2,117 93,428

Other comprehensive income, net of tax — — — — 19,149 — 19,149

Other comprehensive loss — — — — ( 1,134 ) — ( 1,134 )

Cash dividends declared, $ 0.24 per common share

— — ( 21,014 ) — — — ( 21,014 )

Repurchase and retirement of common stock ( 4,058 ) ( 41 ) — ( 80,959 ) — — ( 81,000 )

Repurchase and retirement of common stock, including excise tax ( 863 ) ( 9 ) — ( 20,653 ) — — ( 20,662 )

Stock-based compensation — — 2,904 — — — 2,904

Common stock issued under stock plans (1) 632 7 ( 2,785 ) — — — ( 2,778 )

Purchase of noncontrolling interests, net of tax of $ 254

— — ( 735 ) — — ( 3,915 ) ( 4,650 )

Distributions to noncontrolling interests — — — — — ( 2,555 ) ( 2,555 )

Contributions from noncontrolling interests — — — — — 743 743

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

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

BLOOMIN’ BRANDS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)

March 26, 2023 87,465 $ 875 $ 1,141,017 $ ( 635,451 ) $ ( 186,445 ) $ 2,845 $ 322,841

BLOOMIN’ BRANDS, INC.

3 unchanged sentences

SHARES AMOUNT

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

Net income — — — 3,449 — 1,602 5,051

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

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

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

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

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

Contributions from noncontrolling interests — — — — — 374 374

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

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

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

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

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

Cash dividends declared, $ 0.14 per common share

— — ( 12,559 ) — — — ( 12,559 )

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

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

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

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

Purchase of noncontrolling interests, net of tax of $ 888

— — 2,566 — — ( 4,454 ) ( 1,888 )

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

Contributions from noncontrolling interests — — — — — 217 217

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

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

________________

(1) Net of forfeitures and shares withheld for employee taxes.

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

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

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(DOLLARS IN THOUSANDS, UNAUDITED)

THIRTY-NINE WEEKS ENDED

SEPTEMBER 25, 2022 SEPTEMBER 26, 2021

THIRTEEN WEEKS ENDED

MARCH 26, 2023 MARCH 27, 2022

Cash flows provided by operating activities:

9 unchanged sentences

Deferred income tax expense 1,682 3,209

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

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

Other, net ( 1,823 ) 2,229

2 unchanged sentences

Cash flows used in investing activities:

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

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

Capital expenditures ( 64,415 ) ( 40,180 )

1 unchanged sentence

Net cash used in investing activities ( 62,945 ) ( 39,150 )

(CONTINUED...)

BLOOMIN’ BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(DOLLARS IN THOUSANDS, UNAUDITED)

THIRTY-NINE WEEKS ENDED

SEPTEMBER 25, 2022 SEPTEMBER 26, 2021

Cash flows used in financing activities:

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

Repayments of long-term debt and finance lease obligations ( 385 ) ( 2,863 )

1 unchanged sentence

Repayments of borrowings on revolving credit facilities ( 260,000 ) ( 160,000 )

Financing fees ( 1,205 ) ( 5,868 )

Proceeds from issuance of senior notes — 300,000

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

Repurchase of convertible senior notes ( 196,919 ) —

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

Payments for retirement of warrants ( 114,825 ) —

Proceeds from share-based compensation, net 2,494 9,883

(Payments of taxes) proceeds from share-based compensation, net ( 2,778 ) 885

Distributions to noncontrolling interests ( 2,555 ) ( 2,641 )

6 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents ( 30 ) 1,965

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

Net increase in cash, cash equivalents and restricted cash 9,706 8,839

Cash, cash equivalents and restricted cash as of the beginning of the period 84,735 89,057

6 unchanged sentences

Leased assets obtained in exchange for new finance lease liabilities $ 4,711 $ 1,313

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.

Increase (decrease) in liabilities from the acquisition of property, fixtures and equipment $ 1,159 $ ( 6,178 )

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

BLOOMIN’ BRANDS, INC.

11 unchanged sentences

These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 25, 2022.

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

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

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

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

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

Upon adoption of ASU No.

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

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

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

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

These reclassifications had no effect on previously reported net income.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

Revenue Recognition

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 26, 2023 MARCH 27, 2022

Restaurant sales $ 1,228,234 $ 1,123,575

4 unchanged sentences

Total revenues $ 1,244,746 $ 1,140,535

________________

(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

SEPTEMBER 25, 2022 SEPTEMBER 26, 2021

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

Outback Steakhouse $ 536,793 $ 7,447 $ 523,142 $ 9,335

Carrabba’s Italian Grill 159,728 738 159,147 482

Bonefish Grill 130,669 163 134,603 169

Fleming’s Prime Steakhouse & Wine Bar 80,748 — 79,687 —

Other 2,741 17 2,211 3

total 910,679 8,365 898,790 9,989

International

Outback Steakhouse Brazil 105,932 — 74,020 —

Other (1) 23,764 3,461 23,908 2,919

International total 129,696 3,461 97,928 2,919

Total $ 1,040,375 $ 11,826 $ 996,718 $ 12,908

________________

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

Franchise revenues primarily includes revenues from franchised Outback Steakhouse restaurants.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(UNAUDITED) - Continued

THIRTY-NINE WEEKS ENDED

SEPTEMBER 25, 2022 SEPTEMBER 26, 2021

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

THIRTEEN WEEKS ENDED

MARCH 26, 2023 MARCH 27, 2022

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

11 unchanged sentences

________________

(1) Restaurant sales in Brazil increased $ 9.6 million during the thirteen weeks ended March 26, 2023 in connection with value added tax exemptions resulting from recent tax legislation.

See Note 11 - Income Taxes for details regarding the Brazil tax legislation.

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

Franchise revenues primarily includes revenues from franchised Outback Steakhouse restaurants.

Franchise revenues primarily include revenues from franchised Outback Steakhouse restaurants.

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

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

(dollars in thousands) MARCH 26, 2023 DECEMBER 25, 2022

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 THIRTY-NINE WEEKS ENDED

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 26, 2023 MARCH 27, 2022

Balance, beginning of the period $ 17,755 $ 17,793

7 unchanged sentences

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 26, 2023 MARCH 27, 2022

Balance, beginning of the period $ 386,495 $ 387,945

3 unchanged sentences

Balance, end of the period $ 314,096 $ 314,974

Impairments and Exit Costs

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

International 180

Corporate 257

Total impairment losses 8,726

Restaurant closure charges (benefits)

International ( 153 )

Total restaurant closure charges 236

Provision for impaired assets and restaurant closings $ 8,962

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.

The Company’s 2022 and 2021 assessments were qualitative.

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

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

THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 25, 2022

Balance, beginning of the period $ 8,485

Cash payments ( 2,813 )

Accretion 434

Adjustments ( 272 )

Balance, end of the period (1) $ 5,834

________________

(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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

Earnings Per Share

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

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

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

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

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

THIRTEEN WEEKS ENDED

(in thousands, except per share data) MARCH 26, 2023 MARCH 27, 2022

Net income attributable to Bloomin’ Brands

$ 91,311 $ 75,511

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

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

Basic weighted average common shares outstanding 89,116 89,355

8 unchanged sentences

Diluted earnings per share $ 0.93 $ 0.73

________________

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

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

(2) During the 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.

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

THIRTEEN WEEKS ENDED

(shares in thousands) MARCH 26, 2023 MARCH 27, 2022

Stock options 725 1,417

1 unchanged sentence

Nonvested performance-based share units 344 365

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 THIRTY-NINE WEEKS ENDED

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 26, 2023 MARCH 27, 2022

Performance-based share units $ 923 $ 2,619

2 unchanged sentences

$ 2,886 $ 4,806

________________

(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.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

In February 2023, the Company granted performance-based share units (“PSUs”) subject to final payout modification by a Relative Total Shareholder Return (“Relative TSR”) modifier.

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

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

The following table presents a summary of the Company’s PSU activity:

(in thousands, except per unit data) PERFORMANCE-BASED SHARE UNITS WEIGHTED AVERAGE GRANT DATE FAIR VALUE PER UNIT AGGREGATE INTRINSIC VALUE (1)

Outstanding as of December 25, 2022 874 $ 24.83 $ 18,323

Granted 301 $ 29.01

Performance adjustment (2) 154 $ 19.84

Vested ( 470 ) $ 19.84

Forfeited ( 32 ) $ 26.39

Outstanding as of March 26, 2023 827 $ 26.92 $ 20,630

Expected to vest as of March 26, 2023 1,067 $ 26,611

________________

(1) Based on the $ 20.96 and $ 24.94 share price of the Company’s common stock on December 23, 2022 and March 24, 2023, the last trading day of the year ended December 25, 2022 and the thirteen weeks ended March 26, 2023, respectively.

(2) Represents adjustment to 148 % payout for PSUs granted during 2020.

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

THIRTY-NINE WEEKS ENDED

SEPTEMBER 25, 2022 SEPTEMBER 26, 2021

THIRTEEN WEEKS ENDED

MARCH 26, 2023 MARCH 27, 2022

Risk-free interest rate (1) 4.26 % 1.64 %

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 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:

(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 2.7 % and 7.9 % as of March 26, 2023 and March 27, 2022, respectively.

The following represents unrecognized stock-based compensation expense and the remaining weighted average vesting period as of March 26, 2023:

UNRECOGNIZED COMPENSATION EXPENSE

7 unchanged sentences

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

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

(dollars in thousands) MARCH 26, 2023 DECEMBER 25, 2022

Prepaid expenses $ 27,856 $ 29,343

4 unchanged sentences

Deferred gift card sales commissions 13,403 17,755

Company-owned life insurance policies 7,420 17,244

Other current assets, net 4,281 4,671

2 unchanged sentences

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

SEPTEMBER 25, 2022 DECEMBER 26, 2021

MARCH 26, 2023 DECEMBER 25, 2022

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

Senior Secured Credit Facility:

Term loan A (1) $ — $ 195,000 1.60 %

Revolving credit facility (2) 420,000 4.26 % 80,000 3.75 %

Total Senior Secured Credit Facility 420,000 275,000

Senior secured credit facility - revolving credit facility (1) $ 360,000 6.28 % $ 430,000 5.79 %

2025 Notes 105,000 5.00 % 105,000 5.00 %

2 unchanged sentences

unamortized debt discount and issuance costs ( 6,145 ) ( 6,493 )

finance lease interest ( 274 ) ( 154 )

Total debt, net 767,969 833,292

2 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 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 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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.

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

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

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

The Base Rate option is the highest of:

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

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

The interest rate spreads are as follows:

BASE RATE ELECTION ADJUSTED TERM SOFR ELECTION

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

150 to 250 basis points over the Adjusted Term SOFR

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

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

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) SEPTEMBER 25, 2022

Year 1 $ 1,250

Year 3 105,662

Year 4 420,350

Thereafter 300,132

Total payments 828,816

unamortized debt discount and issuance costs ( 6,836 )

finance lease interest ( 274 )

Total principal payments $ 821,706

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

Debt Covenants - As of March 26, 2023 and December 25, 2022, the Company was in compliance with its debt covenants.

Convertible Senior Notes

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 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

2025 Notes - In connection with dividends paid during the thirteen weeks ended March 26, 2023, the conversion rate for the Company’s remaining convertible senior notes due 2025 (“2025 Notes”) decreased to approximately $ 11.49 per share, which represents 87.059 shares of common stock per $ 1,000 principal amount of the 2025 Notes, or a total of approximately 9.141 million shares.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(UNAUDITED) - Continued

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 thirty-nine weeks ended September 25, 2022.

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

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

In connection with dividends paid during the 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) SEPTEMBER 25, 2022 DECEMBER 26, 2021

(dollars in thousands) MARCH 26, 2023 DECEMBER 25, 2022

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 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 THIRTY-NINE WEEKS ENDED

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 26, 2023 MARCH 27, 2022

Coupon interest $ 1,313 $ 2,875

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 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 thirty-nine weeks ended September 25, 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 thirty-nine weeks ended September 25, 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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) SEPTEMBER 25, 2022 DECEMBER 26, 2021

Accrued insurance liability $ 30,419 $ 31,517

Deferred payroll tax liabilities (1) — 27,302

Deferred compensation obligations 28,351 37,514

Other long-term liabilities 28,082 28,909

$ 86,852 $ 125,242

_______________

(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.

Based on the daily closing prices of the Company’s stock during the quarter ended March 26, 2023, the remaining holders of the 2025 Notes are eligible to convert their 2025 Notes during the second quarter of 2023.

Stockholders’ Equity

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

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

As of 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:

During the thirteen weeks ended March 26, 2023, the Company fully utilized the remaining share repurchase authorization under the 2022 Share Repurchase Program.

On February 7, 2023, the Company’s Board approved a new $ 125.0 million authorization (the “2023 Share Repurchase Program”) expiring on August 7, 2024.

As of March 26, 2023, $ 119.4 million remained available for repurchase under the 2023 Share Repurchase Program.

Following is a summary of the shares repurchased during fiscal year 2023:

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

First fiscal quarter (1) 863 $ 23.92 $ 20,645

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 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.

(1) Excludes excise tax on share repurchases.

Subsequent to March 26, 2023, the Company repurchased 291 thousand shares of its common stock for $ 7.2 million under a Rule 10b5-1 plan.

Dividends - The Company declared and paid dividends per share during fiscal year 2023 as follows:

1 unchanged sentence

First fiscal quarter $ 0.24 $ 21,014

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 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 .

In April 2023, the Board declared a quarterly cash dividend of $ 0.24 per share, payable on May 24, 2023 to shareholders of record at the close of business on May 10, 2023 .

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(UNAUDITED) - Continued

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

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

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

Unrealized loss on derivatives, net of tax ( 1,542 ) ( 10,509 )

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

Accumulated Other Comprehensive Loss (“AOCL”) - AOCL consisted of foreign currency translation adjustments as of March 26, 2023 and December 25, 2022.

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 26, 2023 MARCH 27, 2022

Foreign currency translation adjustment $ ( 1,134 ) $ 11,283

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

Unrealized gain on derivatives, net of tax — 573

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

2 unchanged sentences

Other comprehensive (loss) income attributable to Bloomin’ Brands $ ( 1,134 ) $ 15,558

________________

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

Derivative Instruments and Hedging Activities

Cash Flow Hedges of Interest Rate Risk - In October 2018, the Company entered into variable-to-fixed interest rate swap agreements with 12 counterparties to hedge a portion of the cash flows of the Company’s variable rate debt.

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

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

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

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

Following these terminations, the unrealized 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 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

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

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

Accrued interest $ 276 Accrued and other current liabilities

____________________

(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 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 (benefit) for income taxes — 526 330 2,091

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

Terminated interest rate swap agreements:

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

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 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 SEPTEMBER 25, 2022 DECEMBER 26, 2021

(dollars in thousands) CONSOLIDATED BALANCE SHEET CLASSIFICATION MARCH 26, 2023 DECEMBER 25, 2022

Operating lease right-of-use assets Operating lease right-of-use assets $ 1,091,943 $ 1,103,083

7 unchanged sentences

________________

(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.

(1) Net of accumulated amortization of $ 3.0 million and $ 3.6 million as of March 26, 2023 and December 25, 2022, respectively.

(2) Excludes current accrued contingent percentage rent of $ 3.4 million as of March 26, 2023 and December 25, 2022 and immaterial current and non-current COVID-19-related deferred rent accruals.

BLOOMIN’ BRANDS, INC.

2 unchanged sentences

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

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME CLASSIFICATION THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 26, 2023 MARCH 27, 2022

Operating leases (1) Other restaurant operating $ 45,747 $ 45,361

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 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.

(1) Excludes rent expense for office facilities and Company-owned closed or subleased properties of $ 3.0 million for both the thirteen weeks ended March 26, 2023 and March 27, 2022, which is included in General and administrative expense.

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:

THIRTY-NINE WEEKS ENDED

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 26, 2023 MARCH 27, 2022

Cash flows from operating activities:

6 unchanged sentences

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

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

SEPTEMBER 25, 2022 DECEMBER 26, 2021

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

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

MARCH 26, 2023 DECEMBER 25, 2022

(dollars in thousands) TOTAL LEVEL 1 TOTAL LEVEL 1

Cash equivalents:

1 unchanged sentence

Money market funds 8,602 8,602 4,786 4,786

Restricted cash equivalents:

Money market funds 143 143 1,472 1,472 —

Total asset recurring fair value measurements $ 12,488 $ 12,488 $ 8,087 $ 8,087

Accrued and other current liabilities:

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

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

FINANCIAL INSTRUMENT METHODS AND ASSUMPTIONS

Fixed income funds and Money market funds Carrying value approximates fair value because maturities are less than three months.

Derivative instruments The Company’s derivative instruments include interest rate swaps.

Fair value measurements are based on the contractual terms of the derivatives and use observable market-based inputs.

The interest rate swaps are valued using a discounted cash flow analysis on the expected cash flows of each derivative using observable inputs including interest rate curves and credit spreads.

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

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

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

Carrying value after impairment approximates fair value.

The following 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

Operating lease right-of-use assets $ 7,651 $ 1,466

Property, fixtures and equipment 8,928 7,260

________________

(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.

(1) Carrying value approximates fair value because maturities are less than three months.

Interim Disclosures about Fair Value of Financial Instruments - The Company’s 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.

5 unchanged sentences

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

SEPTEMBER 25, 2022 DECEMBER 26, 2021

MARCH 26, 2023 DECEMBER 25, 2022

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

(dollars in thousands)

Senior Secured Credit Facility:

Term loan A $ — $ — $ 195,000 $ 190,125

Revolving credit facility $ 420,000 $ 409,500 $ 80,000 $ 76,926

Senior secured credit facility - revolving credit facility $ 360,000 $ 360,000 $ 430,000 $ 430,000

2025 Notes $ 105,000 $ 233,054 $ 105,000 $ 198,843

2029 Notes $ 300,000 $ 268,212 $ 300,000 $ 260,265

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.

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 26, 2023 MARCH 27, 2022

Income before provision for income taxes $ 108,189 $ 93,623

Provision for income taxes $ 14,761 $ 15,929

Effective income tax rate 13.6 % 17.0 %

The effective income tax rate for the thirteen weeks ended March 26, 2023 decreased by 3.4 percentage points as compared to the thirteen weeks ended March 27, 2022.

This decrease was primarily due to the benefits of Brazil tax legislation that include a temporary reduction in the Brazilian income tax rate from 34 % to 0 % applicable to the thirteen weeks ended March 26, 2023.

In September 2022, the Company’s Brazilian subsidiary received a preliminary injunction authorizing it to benefit from the exemptions enacted by Law 14,148/2021 which provides for emergency and temporary actions that would grant certain industries a 100 % exemption from income tax (IRPJ and CSLL) and federal value added taxes (PIS and COFINS) for a five-year period.

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 the exemptions under this legislation.

The Company will continue to evaluate and assess the exemptions, the status of its preliminary injunction and all other available evidence to determine the exemption status with respect to this subsidiary in future periods.

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”).

1 unchanged sentence

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.

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

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

The Company expects that a portion of post-2022 foreign taxes paid will not be creditable in the United States.

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 thirty-nine weeks ended September 25, 2022.

The effective income tax rate for the thirteen weeks ended March 26, 2023 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 and benefits of Brazil tax legislation that include a temporary reduction in the Brazilian income tax rate from 34 % to 0 %.

Commitments and Contingencies

4 unchanged sentences

The Company evaluates, on a quarterly basis, developments in legal proceedings that could cause an increase or decrease in the amount of the reserve that has been previously recorded, or a revision to the disclosed estimated range of possible losses, as applicable.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

The Company’s legal proceedings range from cases brought by a single plaintiff to threatened class actions with many putative class members.

2 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 $ 8.6 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.

The Company intends to defend itself in legal matters.

3 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,

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(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.

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.

The Company recorded reserves of $ 15.9 million and $ 15.1 million for certain of its outstanding legal proceedings as of March 26, 2023 and December 25, 2022, respectively, within Accrued and other current liabilities on its Consolidated Balance Sheets.

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.

As of March 26, 2023, the undiscounted payments that the Company could be required to make in the event of non-payment by the primary lessees was approximately $ 22.7 million.

The present value of these potential payments discounted at the Company’s incremental borrowing rate as of March 26, 2023 was approximately $ 17.2 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.

As of March 26, 2023 and December 25, 2022, the Company’s recorded contingent lease liability was $ 6.2 million.

Segment Reporting

9 unchanged sentences

(1) Includes franchise locations.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

Segment accounting policies are the same as those described in Note 2 - Summary of Significant Accounting Policies in the Company’s Annual Report on Form 10-K for the year ended December 25, 2022.

3 unchanged sentences

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 26, 2023 MARCH 27, 2022

Total revenues

2 unchanged sentences

Total revenues $ 1,244,746 $ 1,140,535

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

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 26, 2023 MARCH 27, 2022

Segment income from operations

4 unchanged sentences

Total income from operations 120,633 107,256

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

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

Other income, net — 5 — 26

Interest expense, net ( 12,444 ) ( 13,633 )

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

Income before provision for income taxes $ 108,189 $ 93,623

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 26, 2023 MARCH 27, 2022

Depreciation and amortization

3 unchanged sentences

Total depreciation and amortization $ 46,302 $ 41,775

Geographic Areas - International revenues are defined as revenues generated from restaurant sales originating in a country other than the U.S.

The following table details Total revenues by major geographic area for the periods indicated:

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 26, 2023 MARCH 27, 2022

$ 1,092,996 $ 1,036,407

International

Brazil 138,994 90,100

Other 12,756 14,028

Total revenues $ 1,244,746 $ 1,140,535

BLOOMIN’ BRANDS, INC.

2 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements