What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-08 compared with 2023-11-03 · 276 added, 281 removed, 357 unchanged (61% of the section changed)

2 unchanged sentences

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

SEPTEMBER 24, 2023 DECEMBER 25, 2022

MARCH 31, 2024 DECEMBER 31, 2023

Current assets

Cash and cash equivalents $ 131,664 $ 111,519

Restricted cash and cash equivalents — 2,854

Inventories 65,211 75,939

23 unchanged sentences

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

no shares issued and outstanding as of September 24, 2023 and December 25, 2022

no shares issued and outstanding as of March 31, 2024 and December 31, 2023

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

87,171,373 and 87,696,200 shares issued and outstanding as of September 24, 2023 and December 25, 2022, respectively

87,811,312 and 86,968,536 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

Additional paid-in capital 1,290,765 1,115,387

7 unchanged sentences

BLOOMIN’ BRANDS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

THIRTEEN WEEKS ENDED

MARCH 31, 2024 MARCH 26, 2023

Restaurant sales $ 1,179,487 $ 1,228,234

10 unchanged sentences

Income from operations 77,093 120,633

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

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

Loss on extinguishment of debt ( 135,797 ) —

Interest expense, net ( 13,616 ) ( 12,444 )

Income before (benefit) provision for income taxes 45,373 38,613 230,047 82,092

(Benefit) provision for income taxes ( 58 ) 5,563 21,186 33,028

Net income 45,431 33,050 208,861 49,064

(Loss) income before provision for income taxes ( 72,320 ) 108,189

Provision for income taxes 9,970 14,761

Net (loss) income ( 82,290 ) 93,428

net income attributable to noncontrolling interests 1,582 2,117

Net income attributable to Bloomin’ Brands

Net (loss) income attributable to Bloomin’ Brands

$ ( 83,872 ) $ 91,311

Net income $ 45,431 $ 33,050 $ 208,861 $ 49,064

Other comprehensive income:

Net (loss) income $ ( 82,290 ) $ 93,428

Other comprehensive (loss) income:

Foreign currency translation adjustment ( 1,931 ) ( 1,134 )

Unrealized gain on derivatives, net of tax — — — 573

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

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

Comprehensive income 48,534 22,264 215,332 68,213

Net gain on derivatives, net of tax 1,157 —

Comprehensive (loss) income ( 83,064 ) 92,294

comprehensive income attributable to noncontrolling interests 1,582 2,117

Comprehensive income attributable to Bloomin’ Brands $ 47,631 $ 21,200 $ 210,587 $ 63,011

Earnings per share:

Comprehensive (loss) income attributable to Bloomin’ Brands $ ( 84,646 ) $ 90,177

(Loss) earnings per share:

Basic $ ( 0.96 ) $ 1.02

12 unchanged sentences

SHARES AMOUNT

June 25, 2023 87,339 $ 873 $ 1,132,732 $ ( 582,738 ) $ ( 181,943 ) $ 2,944 $ 371,868

Net income — — — 44,528 — 903 45,431

Other comprehensive income — — — — 3,103 — 3,103

Cash dividends declared, $ 0.24 per common share

— — ( 20,901 ) — — — ( 20,901 )

Repurchase and retirement of common stock, including excise tax of $ 45

( 590 ) ( 6 ) — ( 15,995 ) — — ( 16,001 )

Stock-based compensation — — 4,411 — — — 4,411

Common stock issued under stock plans (1) 422 5 9,080 — — — 9,085

Distributions to noncontrolling interests — — — — — ( 1,306 ) ( 1,306 )

Contributions from noncontrolling interests — — — — — 229 229

September 24, 2023 87,171 $ 872 $ 1,125,322 $ ( 554,205 ) $ ( 178,840 ) $ 2,770 $ 395,919

December 31, 2023 86,969 $ 870 $ 1,115,387 $ ( 528,831 ) $ ( 178,304 ) $ 2,881 $ 412,003

Net income — — — 204,116 — 4,745 208,861

Other comprehensive income — — — — 6,471 — 6,471

Net (loss) income — — — ( 83,872 ) — 1,582 ( 82,290 )

Other comprehensive loss, net of tax — — — — ( 774 ) — ( 774 )

Cash dividends declared, $ 0.24 per common share

— — ( 21,075 ) — — — ( 21,075 )

Repurchase and retirement of common stock, including excise tax of $ 93

( 2,072 ) ( 21 ) — ( 52,212 ) — — ( 52,233 )

Repurchase and retirement of common stock ( 6,948 ) ( 69 ) ( 44,000 ) ( 188,834 ) — — ( 232,903 )

Stock-based compensation — — 2,448 — — — 2,448

2 unchanged sentences

Contributions from noncontrolling interests — — — — — 330 330

September 24, 2023 87,171 $ 872 $ 1,125,322 $ ( 554,205 ) $ ( 178,840 ) $ 2,770 $ 395,919

(CONTINUED...)

BLOOMIN’ BRANDS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)

Issuance of common stock from repurchase of convertible senior notes 7,489 74 216,078 — — — 216,152

Retirement of convertible senior note hedges ( 289 ) ( 3 ) 126,543 ( 8,343 ) — — 118,197

Retirement of warrants — — ( 102,213 ) — — — ( 102,213 )

March 31, 2024 87,811 $ 878 $ 1,290,765 $ ( 809,880 ) $ ( 179,078 ) $ 2,750 $ 305,435

BLOOMIN’ BRANDS, INC.

3 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 of $ 17

( 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

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

________________

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

(1) Net of shares withheld for employee taxes.

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

2 unchanged sentences

(DOLLARS IN THOUSANDS, UNAUDITED)

THIRTY-NINE WEEKS ENDED

SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

THIRTEEN WEEKS ENDED

MARCH 31, 2024 MARCH 26, 2023

Cash flows provided by operating activities:

Net income $ 208,861 $ 49,064

Adjustments to reconcile Net income to cash provided by operating activities:

Net (loss) income $ ( 82,290 ) $ 93,428

Adjustments to reconcile Net (loss) income to cash provided by operating activities:

Depreciation and amortization 49,282 46,302

2 unchanged sentences

Provision for impaired assets and restaurant closings 10,873 3,324

Non-cash interest expense from terminated interest rate swaps — 10,014

Non-cash operating lease costs 21,934 21,182

Stock-based compensation expense 2,448 2,904

Deferred income tax (benefit) expense ( 3,610 ) 6,604

Loss on extinguishment and modification of debt — 107,630

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

Deferred income tax expense 797 1,682

Loss on extinguishment of debt 135,797 —

Other, net ( 2,102 ) ( 1,823 )

2 unchanged sentences

Cash flows used in investing activities:

Proceeds received from company-owned life insurance — 14,598

Capital expenditures ( 64,872 ) ( 64,415 )

1 unchanged sentence

Net cash used in investing activities ( 64,585 ) ( 62,945 )

Cash flows used in financing activities:

Repayments of long-term debt and finance lease obligations ( 1,302 ) ( 196,076 )

Cash flows provided by (used in) financing activities:

Proceeds from borrowings on revolving credit facilities 550,000 190,000

Repayments of borrowings on revolving credit facilities ( 296,000 ) ( 260,000 )

Financing fees — ( 1,205 )

Repayments of finance lease obligations ( 703 ) ( 385 )

Principal settlements and repurchase of convertible senior notes ( 2,335 ) —

1 unchanged sentence

Payments for retirement of warrants ( 102,213 ) —

Proceeds from share-based compensation, net 13,878 2,494

Payment of taxes from share-based compensation, net ( 2,397 ) ( 2,778 )

Distributions to noncontrolling interests ( 2,043 ) ( 2,555 )

1 unchanged sentence

Purchase of noncontrolling interests ( 100 ) ( 100 )

Payments for partner equity plan — ( 7,813 )

Repurchase of common stock ( 232,903 ) ( 20,898 )

Cash dividends paid on common stock ( 21,075 ) ( 21,014 )

Net cash used in financing activities ( 147,505 ) ( 170,760 )

Net cash provided by (used in) financing activities 8,758 ( 116,987 )

Effect of exchange rate changes on cash and cash equivalents ( 668 ) ( 30 )

8 unchanged sentences

Leased assets obtained in exchange for new finance lease liabilities $ 3 $ 4,711

Increase in liabilities from the acquisition of property, fixtures and equipment $ 15,486 $ 14,961

(Decrease) increase in liabilities from the acquisition of property, fixtures and equipment $ ( 1,520 ) $ 1,159

Shares issued on settlement of convertible senior notes $ 216,152 $ —

Shares received and retired on exercise of call option under bond hedge upon settlement of convertible senior notes $ ( 8,346 ) $ —

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

3 unchanged sentences

Description of the Business - Bloomin’ Brands (“Bloomin’ Brands” or the “Company”) owns and operates casual, upscale casual and fine dining restaurants.

OSI Restaurant Partners, LLC (“OSI”) is the Company’s primary operating entity.

The Company’s restaurant portfolio has four concepts:

1 unchanged sentence

Additional Outback Steakhouse, Carrabba’s Italian Grill and Bonefish Grill restaurants in which the Company has no direct investment are operated under franchise agreements.

Basis of Presentation - The accompanying interim unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission.

Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States (“U.S.

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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 31, 2023.

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.

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, finance lease liabilities presented within other liabilities that were formerly presented within long-term debt, the separate presentation of current operating lease liabilities on the face of the Consolidated Balance Sheets and the presentation of certain items within the Condensed Consolidated Statements of Cash Flows.

These reclassifications had no effect on previously reported net income.

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 24, 2023 SEPTEMBER 25, 2022 SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

Restaurant sales $ 1,064,413 $ 1,040,375 $ 3,429,977 $ 3,272,868

Franchise and other revenues

Franchise revenues 11,820 11,826 37,911 37,828

Other revenues 3,600 3,562 9,385 10,764

Total Franchise and other revenues 15,420 15,388 47,296 48,592

Total revenues $ 1,079,833 $ 1,055,763 $ 3,477,273 $ 3,321,460

Recently Issued Financial Accounting Standards Not Yet Adopted - In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures,” (“ASU No.

2023-07”) which requires disclosure of significant segment expenses regularly provided to the Company’s chief operating decision-maker (“CODM”).

2023-07 also allows for multiple measures of segment profit (loss) if the CODM utilizes such measures to allocate resources or assess performance.

2023-07 is effective for the Company beginning with the 2024 Form 10-K, with early adoption permitted.

The Company is currently evaluating the impact ASU No.

2023-07 will have on its disclosures.

In December 2023, the FASB issued ASU No.

2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures,” (“ASU No.

2023-09”) which expands existing income tax disclosures, including disaggregation of the Company’s effective income tax rate reconciliation table and income taxes paid disclosures.

2023-09 is effective for the Company beginning with the 2025 Form 10-K, with early adoption permitted.

The Company is currently evaluating the impact ASU No.

2023-09 will have on its disclosures.

In March 2024, the SEC adopted the final rule under SEC Release No.

33-11275, “The Enhancement and Standardization of Climate-Related Disclosures for Investors,” which requires registrants to include climate-related disclosures in their annual reports, including, but not limited to, material Scope 1 and Scope 2 greenhouse gas emissions, climate-related financial metrics, and governance, oversight and risk management processes for material climate-related risks in their audited financial statements.

The final rule also requires certain disclosures regarding expenses incurred in relation to severe weather events and other natural conditions.

The disclosure requirements are first effective for the Company beginning with the 2026 Form 10-K.

The Company is currently evaluating the impact this rule will have on its disclosures.

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

BLOOMIN’ BRANDS, INC.

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(UNAUDITED) - Continued

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

Revenue Recognition

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

SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

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

Outback Steakhouse $ 526,960 $ 7,517 $ 536,793 $ 7,447

Carrabba’s Italian Grill 165,742 704 159,728 738

Bonefish Grill 128,425 87 130,669 163

Fleming’s Prime Steakhouse & Wine Bar 76,919 — 80,748 —

Other 3,092 16 2,741 17

total 901,138 8,324 910,679 8,365

International

Outback Steakhouse - Brazil (1) 138,187 — 105,932 —

Other (1)(2) 25,088 3,496 23,764 3,461

International total 163,275 3,496 129,696 3,461

Total $ 1,064,413 $ 11,820 $ 1,040,375 $ 11,826

THIRTY-NINE WEEKS ENDED

SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

MARCH 31, 2024 MARCH 26, 2023

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

11 unchanged sentences

________________

(1) Restaurant sales in Brazil increased $ 10.9 million and $ 30.1 million during the thirteen and thirty-nine weeks ended September 24, 2023, respectively, in connection with value added tax exemptions resulting from tax legislation.

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

See Note 14 - Income Taxes for details regarding the Brazil tax legislation.

1 unchanged sentence

Franchise revenues primarily include revenues from franchised Outback Steakhouse restaurants.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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 24, 2023 DECEMBER 25, 2022

(dollars in thousands) MARCH 31, 2024 DECEMBER 31, 2023

Other current assets, net

8 unchanged sentences

Deferred franchise fees - non-current $ 3,975 $ 4,036

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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 24, 2023 SEPTEMBER 25, 2022 SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 31, 2024 MARCH 26, 2023

Balance, beginning of the period $ 18,081 $ 17,755

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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 24, 2023 SEPTEMBER 25, 2022 SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 31, 2024 MARCH 26, 2023

Balance, beginning of the period $ 374,274 $ 386,495

3 unchanged sentences

Balance, end of the period $ 312,283 $ 314,096

Impairments and Exit Costs

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 31, 2024

Impairment losses

Restaurant closure charges (benefits)

International ( 63 )

Total restaurant closure charges 9,021

Provision for impaired assets and restaurant closings $ 10,873

2023 Closure Initiative - During 2023, the Company closed three U.S.

and two international Aussie Grill restaurants and made the decision to close 36 predominantly older, underperforming U.S.

restaurants (the “2023 Closure Initiative”).

The Company has completed all restaurant closures under the 2023 Closure Initiative.

Following is a summary of expenses related to the 2023 Closure Initiative charges recognized in the Consolidated Statements of Operations and Comprehensive (Loss) Income for the period indicated (dollars in thousands):

DESCRIPTION CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME CLASSIFICATION THIRTEEN WEEKS ENDED

MARCH 31, 2024

Asset impairments and closure charges Provision for impaired assets and restaurant closings $ 10,094

Severance and other expenses General and administrative 2,427

Closure-related labor costs Labor and other related 434

The remaining impairment and closure charges during the period presented resulted primarily from locations identified for closure.

BLOOMIN’ BRANDS, INC.

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(UNAUDITED) - Continued

Earnings Per Share

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 24, 2023 SEPTEMBER 25, 2022 SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

Net income attributable to Bloomin’ Brands

(Loss) Earnings Per Share

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

THIRTEEN WEEKS ENDED

(in thousands, except per share data) MARCH 31, 2024 MARCH 26, 2023

Net (loss) income attributable to Bloomin’ Brands

$ ( 83,872 ) $ 91,311

7 unchanged sentences

Diluted weighted average common shares outstanding 87,024 98,011

Basic earnings per share $ 0.50 $ 0.36 $ 2.30 $ 0.49

Diluted earnings per share $ 0.45 $ 0.34 $ 2.08 $ 0.44

_____________

(1) During the thirty-nine weeks ended September 25, 2022, the Company repurchased $ 125.0 million of the convertible notes due in 2025 and settled the corresponding portion of the related warrants (the “2025 Notes Partial Repurchase”).

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 24, 2023 SEPTEMBER 25, 2022 SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

Basic (loss) earnings per share $ ( 0.96 ) $ 1.02

Diluted (loss) earnings per share $ ( 0.96 ) $ 0.93

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

THIRTEEN WEEKS ENDED

(shares in thousands) MARCH 31, 2024 MARCH 26, 2023

Stock options 373 725

2 unchanged sentences

Stock-based Compensation Plans

The Company recognized stock-based compensation expense, net of capitalized expense, as follows for the periods indicated:

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 31, 2024 MARCH 26, 2023

Performance-based share units $ 493 $ 923

Restricted stock units 1,937 1,963

Stock options — 38 835 470

Total stock-based compensation expense, net $ 4,392 $ 1,977 $ 12,395 $ 11,705

(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.

Total stock-based compensation expense, net of capitalized expense $ 2,430 $ 2,886

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(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:

The following table presents a summary of the Company’s performance-based share units (“PSUs”) activity:

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

5 unchanged sentences

Forfeited ( 46 ) $ 27.54

Outstanding as of September 24, 2023 827 $ 26.92 $ 20,101

Expected to vest as of September 24, 2023 (3) 1,067 $ 25,928

Outstanding as of March 31, 2024 826 $ 27.44 $ 23,697

Expected to vest as of March 31, 2024 (3) 489 $ 14,017

________________

(1) Based on the $ 20.96 and $ 24.30 share price of the Company’s common stock on December 23, 2022 and September 22, 2023, the last trading day of the year ended December 25, 2022 and the thirty-nine weeks ended September 24, 2023, respectively.

(1) Based on the $ 28.15 and $ 28.68 share price of the Company’s common stock on December 29, 2023 and March 28, 2024, the last trading day of the year ended December 31, 2023 and thirteen weeks ended March 31, 2024, respectively.

(2) Represents adjustment to 200 % payout for PSUs granted during 2021.

(3) Estimated number of units to be issued upon the vesting of outstanding PSU awards based on Company performance projections of performance criteria set forth in the 2021, 2022 and 2023 PSU award agreements.

(3) Estimated number of units to be issued upon the vesting of outstanding PSUs based on Company performance projections of performance criteria set forth in the 2022, 2023 and 2024 PSU award agreements.

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 24, 2023 SEPTEMBER 25, 2022

THIRTEEN WEEKS ENDED

MARCH 31, 2024 MARCH 26, 2023

Risk-free interest rate (1) 4.37 % 4.26 %

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 grant date per share value of the Company’s common stock for the Relative TSR modifier of 2.7 % and 7.9 % during the thirty-nine weeks ended September 24, 2023 and September 25, 2022, respectively.

The following represents unrecognized stock-based compensation expense and the remaining weighted average vesting period as of September 24, 2023:

(4) Represents a discount below and a premium above the grant date per share value of the Company’s common stock for the relative total shareholder return modifier of ( 1.6 )% and 2.7 % during the thirteen weeks ended March 31, 2024 and March 26, 2023, respectively.

The following represents unrecognized stock-based compensation expense and the remaining weighted average vesting period as of March 31, 2024:

UNRECOGNIZED COMPENSATION EXPENSE

7 unchanged sentences

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

(dollars in thousands) SEPTEMBER 24, 2023 DECEMBER 25, 2022

(dollars in thousands) MARCH 31, 2024 DECEMBER 31, 2023

Prepaid expenses $ 30,626 $ 26,674

6 unchanged sentences

$ 101,297 $ 153,002

Property, Fixtures and Equipment, Net

Property, fixtures and equipment, net, consisted of the following as of the periods indicated:

(dollars in thousands) SEPTEMBER 24, 2023 DECEMBER 25, 2022

Land $ 35,198 $ 37,596

Buildings 1,253,011 1,223,403

Furniture and fixtures 517,689 489,895

Equipment 828,066 739,136

Construction in progress 88,927 41,723

accumulated depreciation ( 1,702,093 ) ( 1,617,611 )

$ 1,020,798 $ 914,142

Goodwill and Intangible Assets, Net

Annual Goodwill and Intangible Assets 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 2023 assessment was quantitative and the 2022 assessment was qualitative.

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

Accrued and Other Current Liabilities

Accrued and other current liabilities consisted of the following as of the periods indicated:

(dollars in thousands) SEPTEMBER 24, 2023 DECEMBER 25, 2022

(dollars in thousands) MARCH 31, 2024 DECEMBER 31, 2023

Accrued payroll and other compensation (1) $ 73,614 $ 98,903

3 unchanged sentences

________________

(1) During 2023, other current liabilities increased primarily due to increased accrued advertising and the timing of accrued property tax and interest payments.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

(1) During the thirteen weeks ended March 31, 2024, accrued payroll and other compensation decreased primarily due to timing of bonus payments and salary accruals.

Long-term Debt, Net

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

SEPTEMBER 24, 2023 DECEMBER 25, 2022

MARCH 31, 2024 DECEMBER 31, 2023

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

6 unchanged sentences

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

Debt Covenants - As of September 24, 2023 and December 25, 2022, the Company was in compliance with its debt covenants.

(2) During the thirteen weeks ended March 31, 2024, the Company repurchased $ 83.6 million of the 2025 Notes and as a result, wrote off $ 0.8 million of debt issuance costs.

See Note 9 - Convertible Senior Notes for additional details.

Debt Covenants - As of March 31, 2024 and December 31, 2023, the Company was in compliance with its debt covenants.

Convertible Senior Notes

2025 Notes - In connection with dividends paid during the thirty-nine weeks ended September 24, 2023, the conversion rate for the Company’s remaining convertible senior notes due 2025 (the “2025 Notes”) decreased to approximately $ 11.26 per share, which represents 88.783 shares of common stock per $ 1,000 principal amount of the 2025 Notes, or a total of approximately 9.303 million shares.

2025 Notes - On February 29, 2024, the Company entered into exchange agreements (the “Exchange Agreements”) with certain holders (the “Noteholders”) of its 5.00 % Convertible Senior Notes due 2025 (the “2025 Notes”).

The Exchange Agreements provided for the Company to deliver and pay at the closing of the transactions on March 5, 2024, an aggregate of approximately 7.5 million shares of Common Stock and $ 3.3 million in cash, including

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

accrued interest, in exchange for $ 83.6 million in aggregate principal amount of the Company’s outstanding 2025 Notes (the “2025 Notes Partial Repurchase”).

In connection with the 2025 Notes Partial Repurchase, the Company recognized a loss on extinguishment of debt of $ 135.8 million and recorded a $ 216.1 million increase to Additional paid-in capital during the thirteen weeks ended March 31, 2024.

In connection with dividends paid during the thirteen weeks ended March 31, 2024, the conversion rate for the Company’s remaining 2025 Notes decreased to approximately $ 11.05 per share, which represents 90.494 shares of common stock per $ 1,000 principal amount of the 2025 Notes, or a total of approximately 1.875 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 24, 2023 DECEMBER 25, 2022

(dollars in thousands) MARCH 31, 2024 DECEMBER 31, 2023

Principal $ 20,724 $ 104,786

debt issuance costs ( 1,342 ) ( 1,939 )

unamortized debt issuance costs (1) ( 178 ) ( 1,138 )

Net carrying amount $ 20,546 $ 103,648

________________

(1) During the thirteen weeks ended March 31, 2024, the Company wrote off $ 0.8 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 24, 2023 SEPTEMBER 25, 2022 SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 31, 2024 MARCH 26, 2023

Coupon interest $ 1,006 $ 1,313

3 unchanged sentences

(1) The effective rate of the 2025 Notes over their expected life is 5.85 %.

The decrease in interest expense during the thirty-nine weeks ended September 24, 2023 relates to the 2025 Notes Partial Repurchase in May 2022.

Based on the daily closing prices of the Company’s stock during the quarter ended September 24, 2023, the remaining holders of the 2025 Notes are eligible to convert their notes during the fourth quarter of 2023.

Based on the daily closing prices of the Company’s stock during the quarter ended March 31, 2024, the remaining holders of the 2025 Notes are eligible to convert their notes during the second quarter of 2024.

Convertible Note Hedge and Warrant Transactions - In connection with the 2025 Notes Partial Repurchase, on February 29, 2024, the Company entered into partial unwind agreements with certain financial institutions (the “Derivative Counterparties”) 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” and together with the Note Hedge Early Termination Agreements, the “Early Termination Agreements”) that were previously entered into by the Company in connection with the issuance of the 2025 Notes.

Pursuant to the Early Termination Agreements, the Derivative Counterparties made a termination payment to the Company which consisted of approximately $ 118.2 million in cash and 0.3 million shares of common stock and the Company made a termination payment to the Derivative Counterparties in an aggregate amount of approximately $ 102.2 million in cash.

In connection with the Note Hedge Early Termination Agreements and the Warrant Early Termination Agreements, the Company recorded a $ 126.5 million increase and a $ 102.2 million decrease, respectively, to Additional paid-in capital during the thirteen weeks ended March 31, 2024.

The Company also recorded a $ 8.3 million increase to Accumulated deficit in connection with the Note Hedge Early Termination Agreements.

The remaining warrants 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 warrants.

In connection with dividends paid during thirteen weeks ended March 31, 2024, the strike price for the remaining warrants decreased to $ 15.47 .

BLOOMIN’ BRANDS, INC.

2 unchanged sentences

Stockholders’ Equity

Share Repurchases - On February 7, 2023, the Company’s Board of Directors (the “Board”) approved a share repurchase program (the “2023 Share Repurchase Program”) under which the Company is authorized to repurchase up to $ 125.0 million of its outstanding common stock.

Share Repurchases - In February 2024, the Company’s Board of Directors (the “Board”) canceled the remaining $ 57.5 million under the Company’s former share repurchase authorization and approved a new $ 350.0 million share repurchase authorization (the “2024 Share Repurchase Program”).

The 2024 Share Repurchase Program includes capacity above the Company’s normal repurchase activity to provide flexibility in retiring the 2025 Notes at or prior to their May 2025 maturity.

The 2024 Share Repurchase Program will expire on August 13, 2025.

As of September 24, 2023, $ 87.9 million remained available for repurchase under the 2023 Share Repurchase Program.

On March 1, 2024, the Company entered into an accelerated share repurchase agreement (the “ASR Agreement”), in connection with the 2024 Share Repurchase Program, with Wells Fargo Bank, National Association (“Wells Fargo”) to repurchase $ 220.0 million of the Company’s common stock.

Under the ASR Agreement, the Company made an aggregate payment of $ 220.0 million to Wells Fargo and received an aggregate initial delivery of approximately 6.5 million shares of common stock on March 4, 2024, representing approximately 80 % of the total shares that were estimated to be repurchased under the ASR Agreement based on the price per share of common stock as of that date.

The exact number of shares the Company repurchased under the ASR Agreement was based generally on the average of the daily volume-weighted average price per share of common stock during the repurchase period, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR Agreement.

On April 23, 2024, the Company received 1.4 million additional shares of common stock from Wells Fargo in connection with the final settlement of the ASR Agreement.

The Company funded the payment under the ASR Agreement, together with the cash portion of the amounts payable under the Exchange Agreements, primarily with borrowings under the revolving credit facility and net proceeds from the Early Termination Agreements.

As of March 31, 2024, $ 130.0 million remained available for repurchase under the 2024 Share Repurchase Program.

Following is a summary of the shares repurchased during fiscal year 2024:

1 unchanged sentence

First fiscal quarter (1) 6,948 $ 27.13 $ 188,500

Second fiscal quarter 619 $ 25.11 15,539

Third fiscal quarter 590 $ 27.03 15,956

Total common stock repurchases (1) 2,072 $ 25.16 $ 52,140

________________

(1) Excludes excise tax on share repurchases.

Subsequent to September 24, 2023, the Company repurchased 365 thousand shares of its common stock for $ 8.6 million through October 31, 2023 under a Rule 10b5-1 plan.

(1) Excludes $ 0.4 million of fees recorded in Additional paid-in capital related to repurchases under the ASR Agreement.

Also excludes $ 44.0 million paid in March 2024 for the repurchase of 1.4 million shares that settled on April 23, 2024 in connection with the ASR Agreement.

Dividends - The Company declared and paid dividends per share during fiscal year 2024 as follows:

1 unchanged sentence

First fiscal quarter $ 0.24 $ 21,075

Second fiscal quarter 0.24 20,990

Third fiscal quarter 0.24 20,901

Total cash dividends declared and paid $ 0.72 $ 62,905

In October 2023, the Board declared a quarterly cash dividend of $ 0.24 per share, payable on November 29, 2023 to shareholders of record at the close of business on November 14, 2023 .

Accumulated Other Comprehensive Loss (“AOCL”) - AOCL consisted of foreign currency translation adjustments as of September 24, 2023 and December 25, 2022.

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

In April 2024, the Board declared a quarterly cash dividend of $ 0.24 per share, payable on May 31, 2024 to shareholders of record at the close of business on May 20, 2024 .

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

(dollars in thousands) MARCH 31, 2024 DECEMBER 31, 2023

Foreign currency translation adjustment $ ( 179,620 ) $ ( 177,689 )

Unrealized gain on derivatives, net of tax — — — 573

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

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

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

Other comprehensive income (loss) attributable to Bloomin’ Brands $ 3,103 $ ( 10,786 ) $ 6,471 $ 19,149

Unrealized gain (loss) on derivatives, net of tax 542 ( 615 )

Accumulated other comprehensive loss $ ( 179,078 ) $ ( 178,304 )

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(UNAUDITED) - Continued

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 31, 2024 MARCH 26, 2023

Foreign currency translation adjustment $ ( 1,931 ) $ ( 1,134 )

Change in fair value of derivatives, net of tax 1,435 —

Reclassification realized in Net (loss) income, net of tax ( 278 ) —

Gain on derivatives, net of tax 1,157 —

Other comprehensive loss attributable to Bloomin’ Brands $ ( 774 ) $ ( 1,134 )

Derivative Instruments and Hedging Activities

Cash Flow Hedges of Interest Rate Risk - In March 2024 and December 2023, OSI entered into 11 interest rate swap agreements with ten counterparties (the “Swap Transactions”) to manage its exposure to fluctuations in variable interest rates.

The Swap Transactions have an aggregate notional amount of $ 375.0 million and include one and two-year tenors with the following terms:

NOTIONAL AMOUNT WEIGHTED AVERAGE FIXED INTEREST RATE (1) EFFECTIVE DATE TERMINATION DATE

$ 100,000,000 4.92 % December 29, 2023 December 31, 2024

100,000,000 4.34 % December 29, 2023 December 31, 2025

175,000,000 4.40 % March 29, 2024 March 31, 2026

$ 375,000,000 4.52 %

____________________

(1) The weighted average fixed interest rate excludes the term SOFR adjustment and interest rate spread described below.

In connection with the Swap Transactions, the Company effectively converted $ 375.0 million of its outstanding indebtedness from the Secured Overnight Financing Rate (“SOFR”), plus a term SOFR adjustment of 0.10 % and a spread of 150 to 250 basis points to the weighted average fixed interest rates within the table above, plus a term SOFR adjustment of 0.10 % and a spread of 150 to 250 basis points.

The Swap Transactions have an embedded floor of minus 0.10 %.

The Swap Transactions have been designated and qualify as cash flow hedges, are recognized on the Company’s Consolidated Balance Sheets at fair value and are classified based on the instruments’ maturity dates.

The Company estimated $ 1.6 million of interest income will be reclassified to Interest expense, net over the next 12 months related to the Company’s Swap Transactions.

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

(dollars in thousands) MARCH 31, 2024 DECEMBER 31, 2023 CONSOLIDATED BALANCE SHEET CLASSIFICATION

Interest rate swaps - asset (1) $ 1,574 $ 320 Other current assets, net

Interest rate swaps - liability $ — $ 253 Accrued and other current liabilities

Interest rate swaps - liability 846 893 Other long-term liabilities, net

Total fair value of derivative instruments - liabilities (1) $ 846 $ 1,146

____________________

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

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

By utilizing the interest rate swaps, the Company is exposed to credit-related losses in the event that the counterparty fails to perform under the terms of the derivative contract.

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

The Company continually assesses the creditworthiness of its counterparties.

As of March 31, 2024, all counterparties to the interest rate swaps performed in accordance with their contractual obligations.

The Company has agreements with each of its derivative counterparties that contain a provision whereby the Company could be declared in default on its derivative obligations if the repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default on indebtedness.

As of December 31, 2023, the fair value of the Company’s interest rate swaps was in a net liability position, including accrued interest but excluding any adjustment for nonperformance risk, of $ 0.8 million.

As of December 31, 2023, the Company has not posted any collateral related to these agreements.

If the Company had breached any of these provisions as of December 31, 2023, it could have been required to settle its obligations under the agreements at their termination value of $ 0.8 million.

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 24, 2023 DECEMBER 25, 2022

(dollars in thousands) CONSOLIDATED BALANCE SHEET CLASSIFICATION MARCH 31, 2024 DECEMBER 31, 2023

Operating lease right-of-use assets Operating lease right-of-use assets $ 1,087,286 $ 1,084,951

7 unchanged sentences

________________

(1) Net of accumulated amortization of $ 4.1 million and $ 3.6 million as of September 24, 2023 and December 25, 2022, respectively.

(2) Excludes immaterial COVID-19-related deferred rent accruals.

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 24, 2023 SEPTEMBER 25, 2022 SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

(1) Net of accumulated amortization of $ 5.4 million and $ 4.7 million as of March 31, 2024 and December 31, 2023, respectively.

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

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

(dollars in thousands) MARCH 31, 2024 MARCH 26, 2023

Operating lease cost (1) Other restaurant operating $ 45,804 $ 45,747

6 unchanged sentences

________________

(1) Excludes rent expense for office facilities and Company-owned closed or subleased properties of $ 3.1 million for the thirteen weeks ended September 24, 2023 and September 25, 2022 and $ 9.1 million for the thirty-nine weeks ended September 24, 2023 and September 25, 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 24, 2023 SEPTEMBER 25, 2022

Cash flows from operating activities:

Cash paid for amounts included in the measurement of operating lease liabilities $ 147,051 $ 145,797

(1) Excludes rent expense for office facilities and Company-owned closed or subleased properties of $ 3.5 million and $ 3.0 million for the thirteen weeks ended March 31, 2024 and March 26, 2023, respectively, which is included in General and administrative expense.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(UNAUDITED) - Continued

The following table is a summary of cash flow impacts to the Company’s Consolidated Financial Statements related to its leases for the periods indicated:

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 31, 2024 MARCH 26, 2023

Cash flows from operating activities:

Cash paid for amounts included in the measurement of operating lease liabilities $ 49,883 $ 48,620

Fair Value Measurements

4 unchanged sentences

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

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:

SEPTEMBER 24, 2023 DECEMBER 25, 2022

(dollars in thousands) TOTAL LEVEL 1 TOTAL LEVEL 1

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

MARCH 31, 2024 DECEMBER 31, 2023

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

Cash equivalents:

1 unchanged sentence

Money market funds 16,178 16,178 — 11,083 11,083 —

Restricted cash equivalents:

Money market funds — — — 2,854 2,854 —

Other current assets, net:

Derivative instruments - interest rate swaps 1,574 — 1,574 320 — 320

Total asset recurring fair value measurements $ 40,472 $ 38,898 $ 1,574 $ 27,094 $ 26,774 $ 320

________________

(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 long-term debt.

Accrued and other current liabilities:

Derivative instruments - interest rate swaps $ — $ — $ — $ 253 $ — $ 253

Other long-term liabilities:

Derivative instruments - interest rate swaps 846 — 846 893 — 893

Total liability recurring fair value measurements $ 846 $ — $ 846 $ 1,146 $ — $ 1,146

Fair value of each class of financial instruments 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 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 March 31, 2024 and December 31, 2023, the Company determined that the credit valuation adjustments were not significant to the overall valuation of its derivatives.

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

2 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 24, 2023 DECEMBER 25, 2022

MARCH 31, 2024 DECEMBER 31, 2023

(dollars in thousands) CARRYING VALUE FAIR VALUE LEVEL 2 CARRYING VALUE FAIR VALUE LEVEL 2

2 unchanged sentences

2029 Notes $ 300,000 $ 278,517 $ 300,000 $ 277,809

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

Income before (benefit) provision for income taxes $ 45,373 $ 38,613 $ 230,047 $ 82,092

(Benefit) provision for income taxes $ ( 58 ) $ 5,563 $ 21,186 $ 33,028

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 31, 2024 MARCH 26, 2023

(Loss) income before provision for income taxes $ ( 72,320 ) $ 108,189

Provision for income taxes $ 9,970 $ 14,761

Effective income tax rate ( 13.8 ) % 13.6 %

The effective income tax rates for the thirteen and thirty-nine weeks ended September 24, 2023 decreased by 14.5 and 31.0 percentage points, respectively, as compared to the thirteen and thirty-nine weeks ended September 25, 2022.

These decreases were primarily due to the 2023 benefits of Brazil tax legislation, which includes a temporary reduction in the Brazilian income tax rate from 34 % to 0 %, and the 2023 income tax exemption on Brazil state

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

value added tax (“VAT”) benefits, as further discussed below.

The decrease for the thirty-nine weeks ended September 24, 2023 was further impacted by the 2022 non-deductible losses associated with the 2025 Notes Partial Repurchase.

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 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.

In May 2023, Brazil enacted tax legislation that prospectively limits the Company’s ability to benefit from the 100 % exemption from income tax (IRPJ and CSLL) and federal value added taxes (PIS and COFINS) for the full five-year period (the “May 2023 Brazil tax legislation”).

As a result of this legislation, the Company expects to be subject to PIS and COFINS and CSLL beginning in the fourth quarter of 2023 and IRPJ beginning in 2024.

During the thirteen weeks ended September 24, 2023, the Company recorded an income tax benefit of approximately $ 2.9 million from a refund of prior year income tax in Brazil resulting from a recent ruling by the Brazilian Superior Court of Justice regarding a federal income tax exemption on certain state VAT benefits.

The effective income tax rate for the thirteen weeks ended March 31, 2024 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.

On January 24, 2024, the Company’s Brazilian subsidiary received an unfavorable second level court ruling related to its ongoing litigation regarding its eligibility for tax exemptions under the Brazil tax legislation, that temporarily granted 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 Company will appeal this ruling, and believes that it will more likely than not prevail in this appeal and accordingly has not recorded any expense or liability for the disputed amounts.

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

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

Restaurant sales and is not impacted by costs incurred that may reduce Income before (benefit) provision for income taxes.

The effective income tax rates for the thirteen and thirty-nine weeks ended September 24, 2023 were 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, benefits of Brazil tax legislation that include a temporary reduction in the Brazilian income tax rate from 34 % to 0 %, and the income tax exemption on Brazil state VAT benefits.

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.

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.

Commitments and Contingencies

Litigation and Other Matters - The Company is subject to legal proceedings, claims and liabilities, such as liquor liability, slip and fall cases, wage and hour and other employment-related litigation, which arise in the ordinary course of business.

A reserve is recorded when it is both:

(i) probable that a loss has occurred and (ii) the amount of loss can be reasonably estimated.

There may be instances in which an exposure to loss exceeds the recorded reserve.

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.

Restaurant sales and is not impacted by costs incurred that may reduce (Loss) income before provision for income taxes.

The effective income tax rate for the thirteen weeks ended March 31, 2024 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 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 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 %.

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

(UNAUDITED) - Continued

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

While some matters pending against the Company specify the damages claimed by the plaintiff or class, many seek unspecified amounts or are at very early stages of the legal process.

Even when the amount of damages claimed against the Company are stated, the claimed amount may be exaggerated, unsupported or unrelated to possible outcomes, and as such, are not meaningful indicators of the Company’s potential liability or financial exposure.

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 intends to defend itself in legal matters.

Some of these matters may be covered, at least in part, by insurance if they exceed specified retention or deductible amounts.

However, it is possible that claims may be denied by the Company’s insurance carriers, the Company may be required by its insurance carriers to contribute to the payment of claims, or the Company’s insurance coverage may not continue to be available on acceptable terms or in sufficient amounts.

The Company records receivables from third party insurers when recovery has been determined to be probable.

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

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

The Company recorded reserves of $ 18.9 million and $ 15.1 million for certain of its outstanding legal proceedings as of September 24, 2023 and December 25, 2022, respectively, within Accrued and other current liabilities on its Consolidated Balance Sheets.

Commitments and Contingencies

Litigation and Other Matters - The Company recorded reserves of $ 9.5 million and $ 13.3 million for certain of its outstanding legal proceedings as of March 31, 2024 and December 31, 2023, respectively, within Accrued and other current 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.

1 unchanged sentence

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

As of September 24, 2023, the undiscounted payments that the Company could be required to make in the event of non-payment by the primary lessees was approximately $ 20.5 million.

The present value of these potential payments discounted at the Company’s incremental borrowing rate as of September 24, 2023 was approximately $ 15.3 million.

As of March 31, 2024, the undiscounted payments that the Company could be required to make in the event of non-payment by the primary lessees was $ 18.9 million.

The present value of these potential payments discounted at the Company’s incremental borrowing rate as of March 31, 2024 was $ 15.1 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 24, 2023 and December 25, 2022, the Company’s recorded contingent lease liability was $ 5.4 million and $ 6.2 million, respectively.

As of March 31, 2024 and December 31, 2023, the Company’s recorded contingent lease liability was $ 4.8 million and $ 5.3 million, respectively.

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 31, 2023.

2 unchanged sentences

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

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

$ 912,972 $ 922,521 $ 3,011,197 $ 2,957,555

International 166,861 133,242 466,076 363,905

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

The following tables summarize Total revenues, Depreciation and amortization, and Income from operations by segment for the periods indicated:

THIRTEEN WEEKS ENDED MARCH 31, 2024

(dollars in thousands) U.S.

INTERNATIONAL CORPORATE CONSOLIDATED

Total revenues $ 1,043,104 $ 152,223 $ — $ 1,195,327

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 24, 2023 SEPTEMBER 25, 2022 SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

Depreciation and amortization $ 39,968 $ 7,261 $ 2,053 $ 49,282

$ 39,829 $ 34,432 $ 117,367 $ 102,735

International 6,231 5,882 18,276 17,438

Corporate 1,938 1,857 6,222 5,030

Total depreciation and amortization $ 47,998 $ 42,171 $ 141,865 $ 125,203

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED

(dollars in thousands) SEPTEMBER 24, 2023 SEPTEMBER 25, 2022 SEPTEMBER 24, 2023 SEPTEMBER 25, 2022

Segment income from operations

$ 68,014 $ 68,501 $ 304,265 $ 305,347

International 22,034 15,849 67,028 38,859

Total segment income from operations 90,048 84,350 371,293 344,206

Unallocated corporate operating expense ( 31,832 ) ( 33,041 ) ( 102,998 ) ( 97,922 )

Total income from operations 58,216 51,309 268,295 246,284

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

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

Income from operations $ 97,484 $ 15,762 $ ( 36,153 ) $ 77,093

THIRTEEN WEEKS ENDED MARCH 26, 2023

(dollars in thousands) U.S.

INTERNATIONAL CORPORATE CONSOLIDATED

Total revenues $ 1,092,996 $ 151,750 $ — $ 1,244,746

Depreciation and amortization $ 38,163 $ 5,919 $ 2,220 $ 46,302

Income from operations $ 133,243 $ 24,508 $ ( 37,118 ) $ 120,633

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

THIRTEEN WEEKS ENDED

(dollars in thousands) MARCH 31, 2024 MARCH 26, 2023

Income from operations $ 77,093 $ 120,633

Loss on extinguishment of debt ( 135,797 ) —

Interest expense, net ( 13,616 ) ( 12,444 )

Income before (benefit) provision for income taxes $ 45,373 $ 38,613 $ 230,047 $ 82,092

(Loss) income before provision for income taxes $ ( 72,320 ) $ 108,189

BLOOMIN’ BRANDS, INC.

2 unchanged sentences

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What changed 10-Q

Item 1. Financial Statements