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Item 7. Management’s Discussion and Analysis

2025-02-26 compared with 2024-02-28 · 266 added, 290 removed, 361 unchanged (61% of the section changed)

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Management’s discussion and analysis of financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes.

For discussion of our consolidated and segment-level results of operations, non-GAAP measures, and liquidity and capital resources for fiscal year 2021, see our Annual Report on Form 10-K for the year ended December 25, 2022, filed with the SEC on February 22, 2023.

We have classified the results of operations, non-GAAP measures, and liquidity and capital resources of our Brazil operations as discontinued operations for all periods presented.

Unless otherwise noted, this Management Discussion and Analysis of Financial Condition and Results of Operations does not include discontinued operations.

For discussion of our consolidated and segment-level results of operations, non-GAAP measures, and liquidity and capital resources not included in this Annual Report for fiscal year 2022, see our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 28, 2024.

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

As of December 29, 2024, we owned and operated 1,172 restaurants and franchised 291 restaurants across 46 states, Guam and 12 countries.

We have four founder-inspired concepts:

Our restaurant portfolio includes:

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

Financial Overview - Our financial overview for 2023 includes the following:

Financial Overview - Our financial overview for 2024 from continuing operations includes the following:

combined and Outback Steakhouse comparable restaurant sales of (1.1)% and (1.2)%, respectively;

• Increase in Total revenues of 5.8% as compared to 2022;

• Decrease in Total revenues of (5.2)% as compared to 2023;

• Operating income and restaurant-level operating margins of 3.5% and 13.3%, respectively, as compared to 6.8% and 15.4%, respectively for 2023;

• Operating income of $139.8 million as compared to $282.8 million in 2023;

• Diluted earnings per share of $2.56 as compared to $1.03 in 2022.

Business Strategies - In 2024, our key business strategies include:

• Enhance the Customer Experience to Drive Sustainable Healthy Sales Growth.

We plan to continue to make investments to enhance our core guest experience, upgrade kitchen equipment and technology, increase off-premises dining occasions, remodel and relocate restaurants, invest in digital marketing and data personalization and utilize the Dine Rewards loyalty program and multimedia marketing campaigns to drive sales.

• Diluted (loss) earnings per share of $(0.61) as compared to $2.13 in 2023.

Sale of Majority Ownership of our Brazil Operations - On December 30, 2024, we completed the sale of 67% of our Brazil operations (the “Brazil Sale Transaction”) and entered into amended and restated franchise agreements with all existing restaurants in Brazil.

The balance sheets, results of operations and cash flows of our Brazil operations are reported as discontinued operations for all periods presented.

See Note 3 - Discontinued Operations of the Notes to Consolidated Financial Statements for additional details.

Business Strategies - Our current key business strategies include:

Simplifying the Agenda.

We are focused on our operations, removing menu items and enabling our operators to deliver a great guest experience.

Our transaction to re-franchise our Brazil business will allow our management team to focus on improvements in our domestic operations.

Consistently Deliver Guest-Centric Experience.

We are investing in our product quality, technology and operational execution to ensure guests consistently have a great experience when they interact with our brands across both in-restaurant and off-premises channels.

We believe this will drive increased frequency.

Refine Our Marketing Approach.

We are refining our menu offerings to offer abundant, every day value, which we believe will resonate with the marketplace.

We will continue to offer experiential-driven events with unique items as a way to drive trial to our brands.

Drive Long-Term Shareholder Value .

We plan to drive long-term shareholder value by reinvesting operational cash flow into our business, improving our credit profile and returning excess cash to shareholders through dividends and share repurchases.

• Enrich Engagement Among Stakeholders.

We take the responsibility to our people, customers and communities seriously and continue to invest in programs that support the well-being of those engaged with us.

• Accelerate Growth Opportunities.

We believe a substantial development opportunity remains for our concepts in the U.S.

and internationally through existing geography fill-in and market expansion.

We will continue to pursue U.S.

fill-in opportunities for Outback Steakhouse, Fleming’s Prime Steakhouse & Wine Bar and Carrabba’s Italian Grill across key southern states such as North Carolina, Florida and Texas as well as California.

We will also focus on strategic expansion in Brazil and pursue global franchise opportunities.

We intend to fund our business strategies, drive revenue growth and margin improvement, in part by reinvesting savings generated by cost savings and productivity initiatives across our businesses.

We plan to drive long-term shareholder value by reinvesting into our base business and addressing the state of our asset base, paying down debt and returning excess cash to shareholders through dividends.

We have refined our pipeline to slow new unit growth beginning in 2026.

While we still believe

BLOOMIN’ BRANDS, INC.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Macroeconomic Conditions - The combination of macroeconomic and other factors have put considerable pressure on the casual dining industry.

The ongoing impacts of inflation, rising interest rates, reduced disposable consumer income, access to credit, other national, regional and local regulatory and economic conditions and consumer confidence have had a negative effect on discretionary consumer spending.

Should the macroeconomic and other conditions persist, we will continue to face increased pressure with respect to our pricing, traffic levels and commodity costs.

We believe that in this environment, we need to maintain our focus on value and innovation as well as refreshing our restaurant base through remodels and new restaurant development to continue to drive sales.

there are development opportunities for our concepts in the U.S., we remain focused on driving healthy traffic in our existing restaurants.

We intend to fund our business strategies, drive revenue growth and margin improvement, in part by reinvesting savings generated by cost savings and productivity initiatives across o ur businesses.

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

• Average restaurant unit volumes —average sales (excluding gift card breakage and the benefit of value added tax exemptions in Brazil) per restaurant to measure changes in customer traffic, pricing and development of the brand.

• Comparable restaurant sales —year-over-year comparison of the change in sales volumes (excluding gift card breakage and the benefit of value added tax exemptions in Brazil) for Company-owned restaurants that are open 18 months or more in order to remove the impact of new restaurant openings in comparing the operations of existing restaurants.

• Average restaurant unit volumes —average sales (excluding gift card breakage and, in our discontinued operations, the benefit of value added tax exemptions in Brazil) per restaurant to measure changes in customer traffic, pricing and development of the brand.

• Comparable restaurant sales —year-over-year comparison of the change in sales volumes (excluding gift card breakage and, in our discontinued operations, the benefit of value added tax exemptions in Brazil) for Company-owned restaurants that are open 18 months or more in order to remove the impact of new restaurant openings in comparing the operations of existing restaurants.

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

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

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

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

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

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

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

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

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

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

As a result, restaurant-level operating margin is not indicative of our consolidated results of operations and is presented exclusively as a supplement to, and not a substitute

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

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

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

BLOOMIN’ BRANDS, INC.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

for, Net income or Income from operations.

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

• Adjusted restaurant-level operating margin, Adjusted income from operations, Adjusted net income and Adjusted diluted earnings per share —non-GAAP financial measures utilized to evaluate our operating performance, which definitions, usefulness and reconciliations are described in more detail in the “ Non-GAAP Financial Measures ” section below.

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

Selected Operating Data - The table below presents the number of our restaurants in operation (from both continuing and discontinued operations) as of the periods indicated:

Number of restaurants (at end of the period):

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total 1,116 1,150

International

Company-owned

Outback Steakhouse - Brazil (2) 155 139

Other (2)(3) 36 36

International Franchise

Outback Steakhouse - South Korea 96 92

Other (3) 47 47

International total 330 308

International Franchise total 145 139

Other - Company-owned

Outback Steakhouse - Hong Kong/China 10 19

Discontinued operations - Company-owned

Outback Steakhouse - Brazil (1) 173 155

Other - Brazil (1) 19 17

System-wide total 1,463 1,480

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____________________

(1) Excludes five and 36 off-premises only kitchens as of December 31, 2023 and December 25, 2022, respectively.

One location was Company-owned in the U.S and all others were franchised in South Korea as of December 31, 2023 and December 25, 2022.

(2) The restaurant counts for Brazil, including Abbraccio and Aussie Grill restaurants within International Company-owned Other, are reported as of November 30, 2023 and 2022, respectively, to correspond with the balance sheet dates of this subsidiary.

(3) International Company-owned Other included two and four Aussie Grill locations as of December 31, 2023 and December 25, 2022, respectively.

International Franchised Other included four Aussie Grill locations as of December 31, 2023 and December 25, 2022.

(1) The restaurant counts for Brazil, including Abbraccio and Aussie Grill restaurants within International Company-owned Other - Brazil, are reported as of November 30, 2024 and 2023, respectively, to correspond with the balance sheet dates of this subsidiary.

Following the close of the Brazil Sale Transaction on December 30, 2024, all restaurants in that market operate as unconsolidated franchisees.

See Note 3 - Discontinued Operations of the Notes to Consolidated Financial Statement s for further details.

BLOOMIN’ BRANDS, INC.

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Results of Operations

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

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

(dollars in millions) 2024 2023

For fiscal year 2022 $ 4,352.7

Restaurant sales of prior periods (continuing operations) $ 4,077.8 $ 3,923.9

53rd week restaurant sales (1) (82.7)

For fiscal year 2024 (comparable 52-week presentation) 3,995.1

Restaurant closures (2) (129.6) (30.5)

Comparable restaurant sales (54.5) 75.1

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Effect of foreign currency translation 0.1 (0.6)

Brazil value added tax exemptions (1) 22.5

Restaurant closures (31.5)

For fiscal year 2023 (comparable 52-week presentation) 3,995.1

53rd week restaurant sales (1) 82.7

For fiscal year 2023 (as reported) $ 4,607.4

For fiscal year 2024 and 2023 (as reported) $ 3,866.3 $ 4,077.8

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(1) Fiscal years 2023 and 2022, include $30.2 million and $7.7 million, respectively, of value added tax exemptions resulting from the Brazil tax legislation.

Beginning in the fourth quarter of 2023, we are once again subject to the value added taxes for which we were previously exempt.

See Note 20 - Income Taxes of the Notes to Consolidated Financial Statements for details regarding value added tax exemptions in connection with Brazil tax legislation.

(2) Includes $101.9 million of restaurant sales generated by restaurants closed, primarily in February 2024, in connection with the 2023 Closure Initiative, as defined below.

See Note 4 - Impairments and Exit Costs of the Notes to Consolidated Financial Statements for additional details regarding the 2023 Closure Initiative.

(3) Includes restaurant sales from December 25, 2023 through December 31, 2023, which represents the 53rd week of fiscal year 2023.

The increase in Restaurant sales in 2023 as compared to 2022 was primarily due to:

(i) restaurant sales during the 53rd week of 2023, (ii) higher comparable restaurant sales, (iii) the opening of 66 new restaurants not included in our comparable restaurant sales base, (iv) the effect of foreign currency translation of the Brazilian Real relative to the U.S.

dollar and (v) value added tax exemptions in Brazil.

The increase in Restaurant sales was partially offset by the closure of 35 restaurants since December 26, 2021.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

(1) Fiscal year 2023 included restaurant sales from December 25, 2023 through December 31, 2023, which represents the 53rd week.

(2) Fiscal years 2024 and 2023 include restaurant sales impact from the closure of 73 and 34 restaurants since December 25, 2022 and December 26, 2021, respectively.

(3) Fiscal years 2024 and 2023 include restaurant sales from 27 and 19 new restaurants, respectively, not included in our comparable restaurant sales base.

Average Restaurant Unit Volumes and Operating Weeks

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Average restaurant unit volumes:

- continuing operations

Outback Steakhouse $ 4,004 $ 4,094

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Fleming’s Prime Steakhouse & Wine Bar $ 5,822 $ 5,935

International

Discontinued operations

Outback Steakhouse - Brazil (1) $ 2,874 $ 3,213

Operating weeks:

- continuing operations

Outback Steakhouse 28,636 29,771

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Fleming’s Prime Steakhouse & Wine Bar 3,293 3,418

International

Discontinued operations

Outback Steakhouse - Brazil 8,630 7,670

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(1) Translated at average exchange rates of 5.29 and 5.02 for 2024 and 2023, respectively.

Excludes the benefit of the Brazil value added tax exemptions discussed in Note 20 - Income Taxes of the Notes to Consolidated Financial Statements.

Excludes the benefit of the Brazil value added tax exemptions discussed in Note 3 - Discontinued Operations of the Notes to Consolidated Financial Statements.

BLOOMIN’ BRANDS, INC.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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

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

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

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

2024 (1) 2023 (1)

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Comparable restaurant sales (restaurants open 18 months or more):

- continuing operations (2)

Outback Steakhouse (1.2) % 1.1 %

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Combined U.S.

International

(1.1) % 1.4 %

Discontinued operations

Outback Steakhouse - Brazil (3)(4) (1.4) % 5.5 %

- continuing operations

Outback Steakhouse (4.2) % (4.3) %

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(4.4) % (3.1) %

International

Discontinued operations

Outback Steakhouse - Brazil (3) (4.4) % (1.1) %

Average check per person (5):

- continuing operations

Outback Steakhouse 3.0 % 5.4 %

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Combined U.S.

International

Discontinued operations

Outback Steakhouse - Brazil (3) 2.6 % 6.5 %

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(1) For 2023, comparable restaurant sales, traffic and average check per person compare the 53 weeks from December 26, 2022 through December 31, 2023 to the 53 weeks from December 27, 2021 through January 1, 2023.

(1) For 2024, U.S.

comparable restaurant sales, traffic and average check per person compare the 52 weeks from January 1, 2024 through December 29, 2024 to the 52 weeks from January 2, 2023 through December 31, 2023.

For 2023, U.S.

comparable restaurant sales, traffic and average check per person compare the 53 weeks from December 26, 2022 through December 31, 2023 to the 53 weeks from December 27, 2021 through January 1, 2023.

(2) Relocated restaurants closed more than 60 days are excluded from comparable restaurant sales until at least 18 months after reopening.

(3) Excludes the effect of fluctuations in foreign currency rates and the benefit of the Brazil value added tax exemptions discussed in Note 20 - Income Taxes of the Notes to Consolidated Financial Statements.

(3) Excludes the effect of fluctuations in foreign currency rates and the benefit of the Brazil value added tax exemptions discussed in Note 3 - Discontinued Operations of the Notes to Consolidated Financial Statements.

(4) Includes trading day impact from calendar period reporting.

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

2024 2023 2022

Restaurant sales 97.9 % 97.8 % 97.9 %

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Income from operations 3.5 6.8 7.6

Loss on extinguishment and modification of debt — (2.5)

Loss on extinguishment of debt (3.4) — (2.7)

Loss on fair value adjustment of derivatives, net — — (0.4)

Interest expense, net (1.6) (1.3) (1.3)

Income before provision for income taxes 5.8 3.4

Provision for income taxes 0.4 0.9

Net income 5.4 2.5

(Loss) income before (benefit) provision for income taxes (1.5) 5.5 3.2

(Benefit) provision for income taxes (0.3) 0.4 0.9

Net (loss) income from continuing operations (1.2) 5.1 2.3

Net (loss) income from discontinued operations, net of tax (1.9) 1.0 0.4

Net (loss) income (3.1) 6.1 2.7

net income attributable to noncontrolling interests 0.1 0.2 0.2

Net income attributable to Bloomin’ Brands

Net (loss) income attributable to Bloomin’ Brands (3.2) % 5.9 % 2.5 %

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(1) As a percentage of Restaurant sales.

Fiscal year 2023 as compared to fiscal year 2022

Food and beverage cost decreased as a percentage of Restaurant sales due to 2.0% from increases in average check per person, primarily driven by an increase in menu pricing, and 0.6% from certain cost saving and productivity initiatives, partially offset by an increase of 1.3% from commodity inflation.

Quantitative and Qualitative Disclosures about Market Risk for discussion of our commodity inflation expectations for 2024.

Labor and other related expense increased as a percentage of Restaurant sales primarily due to 1.6% from higher hourly and field management labor costs, primarily due to wage rate inflation, partially offset by decreases of 0.9% from an increase in average check per person and 0.2% from certain cost saving and productivity initiatives.

Other restaurant operating expense decreased as a percentage of Restaurant sales primarily due to:

(i) 0.7% from an increase in average check per person, (ii) 0.3% from certain cost saving and productivity initiatives and (iii) 0.2% from the favorable settlement of certain collective action wage and hour lawsuits.

These decreases were partially offset by increases of 0.9% from higher operating expenses, including utilities, primarily due to inflation, and 0.4% from higher advertising expense.

Depreciation and amortization expense increased primarily due to technology projects and restaurant development.

Fiscal year 2024 as compared to fiscal year 2023 - continuing operations

Food and beverage cost decreased as a percentage of Restaurant sales due to 1.3% from increases in menu pricing and 0.6% from cost-saving and productivity initiatives.

These decreases were partially offset by increases as a percentage of Restaurant sales of 0.5% from unfavorable product mix and 0.5% from commodity inflation.

Labor and other related expense increased as a percentage of Restaurant sales primarily due to 1.6% from higher hourly and field management labor costs, primarily due to wage rate inflation, partially offset by a decrease of 0.6% from an increase in average check per person.

Other restaurant operating expense increased as a percentage of Restaurant sales primarily due to:

(i) 1.1% from higher restaurant-level operating and supply expenses, primarily due to inflation, (ii) 0.5% from higher advertising expense and (iii) 0.4% from higher insurance and legal expense, primarily from lapping the 2023 favorable settlement of certain collective action wage and hour lawsuits.

These increases were partially offset by decreases as a percentage of Restaurant sales of 0.3% from an increase in average check per person and 0.3% from certain cost-saving and productivity initiatives.

Depreciation and amortization expense increased primarily due to restaurant development and technology projects, partially offset by restaurant closures.

BLOOMIN’ BRANDS, INC.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

General and administrative expense increased primarily due to:

(i) legal and professional fees, (ii) compensation and related expenses, (iii) travel expenses and (iv) incentive compensation, partially offset by a decrease in employee stock-based compensation.

Provision for impaired assets and restaurant closings increased primarily due to asset impairment and closure charges during the fourteen weeks ended December 31, 2023 of $33.3 million and $0.9 million within the U.S.

and international segments, respectively, in connection with the closure of three U.S.

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

restaurants (the “2023 Closure Initiative”).

See Note 4 - Impairments and Exit Costs for additional details regarding the 2023 Closure Initiative.

We expect to incur an additional $8 million to $11 million of severance and closure costs in connection with the 2023 Closure Initiative during the thirteen weeks ended March 31, 2024.

Income from operations during 2023 includes a net operating margin increase of approximately 0.2% attributable to Brazil value added tax exemptions (PIS and COFINS) provided by Brazil tax legislation.

See Note 20 - Income Taxes of the Notes to Consolidated Financial Statements for further discussio n regarding Brazil tax legislation.

Loss on extinguishment and modification of debt and Loss on fair value adjustment of derivatives, net during 2022 were in connection with the repurchase of $125.0 million of the outstanding convertible senior notes due in 2025 (the “2025 Notes”) (the “2025 Notes Partial Repurchase”), which is described in further detail within Note 13 - Convertible Senior Notes of the Notes to Consolidated Financial Statements.

Interest expense, net was flat primarily due to:

(i) the lapping of terminated interest rate swap amortization during 2022, (ii) the 2025 Notes Partial Repurchase in May 2022 and (iii) the repayment of Term Loan A in April 2022.

These decreases were offset by an increase in interest expense from higher balances and interest rates on our revolving credit facility.

Provision for income taxes includes a decrease in the effective income tax rate primarily due to the non-deductible losses associated with the 2025 Notes Partial Repurchase recorded during 2022 and the 2023 benefits of Brazil tax legislation, which includes a temporary reduction in the Brazilian income tax rate from 34% to 0%.

We have a blended federal and state statutory rate of approximately 26%.

The effective income tax rate in 2023 was lower than the blended federal and state statutory rate primarily due to the benefit of FICA tax credits on certain tipped wages and benefits of Brazil tax legislation, which includes a temporary reduction in the Brazilian income tax rate from 34% to 0%.

The effective income tax rate in 2022 was higher than the blended federal and state statutory rate primarily due to the non-deductible losses associated with the 2025 Notes Partial Repurchase recorded during 2022, partially offset by the benefit of FICA tax credits on certain tipped wages.

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”).

Provision for impaired assets and restaurant closings increased primarily due to:

(i) asset impairments during Q4 2024 related to 41 older, underperforming restaurants (the “Q4 2024 Restaurant Impairment”), and from the closure of (ii) nine restaurants in Hong Kong and (iii) 36 older, predominately underperforming restaurants within the U.S.

segment (the “2023 Restaurant Closures”).

These increases were partially offset by the Q4 2023 asset impairment and closure charges in connection with the 2023 Restaurant Closures.

Loss on extinguishment of debt and Loss on fair value adjustment of derivatives, net during 2024 were in connection with the repurchase of $ 83.6 million of the outstanding convertible senior notes due in 2025 (the “2025 Notes”) (the “Second 2025 Notes Partial Repurchase”), which is described in further detail within Note 11 - Convertible Senior Notes of the Notes to Consolidated Financial Statements.

Interest expense, net increase d primarily due to higher balances and interest rates on the unhedged portion of our revolving credit facility partially offset by a decrease in interest expense from the Second 2025 Notes Partial Repurchase.

(Benefit) provision for income taxes includes credits we and other restaurant company employers may claim against 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 provision for income taxes.

See Note 20 - Income Taxes of the Notes to Consolidated Financial Statements for further discussion regarding Brazil tax legislation.

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

Resources are allocated and performance is assessed by our Chief Executive Officer, whom we have determined to be our Chief Operating Decision Maker.

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

and international.

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

The change in (Benefit) provision for income taxes is primarily due to FICA tax credits on certain tipped wages partially offset by the 2024 nondeductible losses associated with the Second 2025 Notes Partial Repurchase, relative to the 2024 pre-tax book loss.

We have a blended federal and state statutory rate of approximately 26% for all periods presented.

The effective income tax rate in 2024 was lower than the blended federal and state statutory rate primarily due to the federal and state impact of nondeductible losses associated with the Second 2025 Notes Partial Repurchase, partially offset by the FICA tax credits on certain tipped wages, relative to the 2024 pre-tax book loss.

The effective income tax rate in 2023 was lower than the blended federal and state statutory rate primarily due to the benefit of FICA tax credits on certain tipped wages.

Fiscal year 2023 as compared to fiscal year 2022 - continuing operations

Labor and other related expense increased as a percentage of Restaurant sales primarily due to 1.9% from higher hourly and field management labor costs, primarily due to wage rate inflation, partially offset by decreases of 0.9% from an increase in average check per person and 0.3% from certain cost saving and productivity initiatives.

Other restaurant operating expense decreased as a percentage of Restaurant sales primarily due to:

(i) 0.6% from an increase in average check per person, (ii) 0.4% from the favorable settlement of certain collective action wage and hour lawsuits and (iii) 0.3% from certain cost saving and productivity initiatives.

These decreases were partially offset by increases of 0.9% from higher operating expenses, including utilities, primarily due to inflation, and 0.3% from higher advertising expense.

(Benefit) provision for income taxes includes a decrease in the effective income tax rate primarily due to the non-deductible losses recorded during 2022 associated with the First 2025 Notes Partial Repurchase, which is described in further detail within Note 11 - Convertible Senior Notes of the Notes to Consolidated Financial Statements.

BLOOMIN’ BRANDS, INC.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

We consider each of our U.S.

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

All other operating segments, which include our operations in Hong Kong and China do not meet the quantitative thresholds for determining reportable operating segments.

Resources are allocated and performance is assessed by our Chief Executive Officer, whom we have determined to be our Chief Operating Decision Maker (“CODM”).

We aggregate our U.S.

operating segments into a U.S.

reportable segment.

segment includes all restaurants operating in the U.S.

while restaurants operating outside the U.S.

are included in the international segment.

while franchised restaurants operating outside the U.S.

are included in the international franchise segment.

Revenues for both segments include only transactions with customers and exclude intersegment revenues.

Excluded from Income from operations for U.S.

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

Refer to Note 22 - Segment Reporting of the Notes to Consolidated Financial Statements for reconciliations of segment income from operations to the consolidated operating results.

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.

Operating income is utilized by our CODM as the segment profit or loss measure and to manage the business, review operating performance and allocate resources.

Refer to Note 19 - Segment Reporting of the Notes to Consolidated Financial Statements for reconciliation of segment income from operations to the consolidated operating results.

Summary financial data - Following is a summary of financial data by segment for the periods indicated:

INTERNATIONAL

FISCAL YEAR FISCAL YEAR

(dollars in thousands) 2024 2023 2022

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Total revenues $ 3,857,134 $ 4,053,599 $ 3,911,870

Income from operations $ 377,534 $ 407,860 $ 83,948 $ 57,333

Operating income margin 9.3 % 10.4 % 13.6 % 11.4 %

Restaurant-level operating income $ 618,434 $ 595,997 $ 123,583 $ 90,663

Restaurant-level operating margin 15.4 % 15.4 % 20.5 % 18.5 %

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

INTERNATIONAL

FISCAL YEAR FISCAL YEAR

(dollars in millions) 2023 (dollars in millions) 2023

For fiscal year 2022 $ 3,863.0 For fiscal year 2022 $ 489.7

Comparable restaurant sales 63.1 Restaurant openings (1) 37.7

Restaurant openings (1) 27.2 Effect of foreign currency translation 34.3

Restaurant closures (2) (31.0) Brazil value added tax exemptions (3) 22.5

For fiscal year 2023 (comparable 52-week presentation) (4) 3,922.3 Comparable restaurant sales 18.7

53rd week restaurant sales (5) 82.7 Restaurant closures (2) (0.5)

For fiscal year 2023 (as reported) $ 4,005.0 For fiscal year 2023 $ 602.4

Income from continuing operations $ 250,050 $ 377,534 $ 407,860

Operating income margin, continuing operations 6.5 % 9.3 % 10.4 %

INTERNATIONAL FRANCHISE

(dollars in thousands) 2024 2023 2022

Franchise and other revenues (2)

$ 39,490 $ 41,524 $ 36,202

(1) Includes restaurant sales from 19 and 47 new U.S.

and international restaurants, respectively, not included in our comparable restaurant sales base.

(2) Includes the restaurant sales impact from the closure of 32 and three U.S.

and international restaurants, respectively, since December 26, 2021.

(3) Fiscal years 2023 and 2022 include $30.2 million and $7.7 million, respectively, of value added tax exemptions resulting from the Brazil tax legislation.

Beginning in the fourth quarter of 2023, we are once again subject to the value added taxes for which we were previously exempt under the Brazil tax legislation.

See Note 20 - Income Taxes of the Notes to Consolidated Financial Statements for details regarding value added tax exemptions in connection with the Brazil tax legislation.

(4) Includes $99.2 million of restaurant sales generated by restaurants closed, primarily in February 2024, in connection with the 2023 Closure Initiative.

See Note 4 - Impairments and Exit Costs of the Notes to Consolidated Financial Statements for additional details regarding the 2023 Closure Initiative.

(5) Includes restaurant sales from December 25, 2023 through December 31, 2023, which represents the 53rd week of fiscal year 2023.

Income from continuing operations $ 37,961 $ 39,207 $ 34,216

____________________

(1) The decrease from 2023 to 2024 was primarily due to:

(i) the restaurant sales during the 53rd week of 2023, (ii) the net impact of restaurant closures and openings and (iii) lower comparable restaurant sales.

The increase from 2022 to 2023 was primarily due to the restaurant sales during the 53rd week of 2023 and higher comparable restaurant sales, partially offset by the net impact of restaurant closures and openings.

See Results of Operations - Restaurant Sales for a rollforward of consolidated Restaurant sales.

(2) Includes international royalties from franchisees and royalties from our Brazil operations at our historical 5% intercompany rate.

On December 30, 2024, we entered into franchise agreements in connection with the Brazil Sale Transaction that include royalty rates that are lower than our historical intercompany rates and on the low end of our international franchisee royalty percentage range.

BLOOMIN’ BRANDS, INC.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Income from operations

Income from continuing operations

- The decrease in U.S.

Income from operations generated during 2024 as compared to 2023 was primarily due to:

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

These decreases were partially offset by an increase in average check per person and certain cost saving and productivity initiatives.

International - The increase in international Income from operations generated during 2023 as compared to 2022 was primarily due to value added tax exemptions in Brazil and an increase in restaurant sales, primarily driven by an increase in average check per person and the recovery of in-restaurant dining.

These increases were partially offset by decreases primarily due to higher operating and labor costs, primarily due to inflation, and higher advertising exp ense.

(i) lower restaurant sales, as discussed above, (ii) higher labor, operating and commodity costs, primarily due to inflation, (iii) higher impairment and closure costs and (iv) higher advertising, depreciation and amortization expense.

These decreases were partially offset by an increase in average check per person and the impact of certain cost-saving and produc tivity initiatives.

Non-GAAP Financial Measures

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Adjusted restaurant-level operating margin is Restaurant-level operating margin adjusted for certain items.

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

The following table reconciles consolidated Income from continuing operations and the corresponding margin to restaurant-level operating income from continuing operations and consolidated adjusted restaurant-level operating income and the corresponding margins for the periods indicated:

Consolidated FISCAL YEAR

(dollars in thousands) 2024 2023

Income from operations $ 325,144 $ 330,421

Operating income margin 7.0 % 7.5 %

Income from continuing operations $ 139,808 $ 282,769

Operating income margin, continuing operations 3.5 % 6.8 %

Franchise and other revenues 84,131 90,371

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Provision for impaired assets and restaurant closings 64,291 33,574

Restaurant-level operating income $ 746,297 $ 676,941

Restaurant-level operating income from continuing operations $ 514,931 $ 628,797

Restaurant-level operating margin 13.3 % 15.4 %

Legal and other matters (1) — (3,650)

Asset impairments and closing costs (2) (2,450) —

Asset impairments and closure-related charges (2) 434 (2,450)

Partner compensation (3) — 1,894

Total restaurant-level operating income adjustments 434 (4,206)

Adjusted restaurant-level operating income from continuing operations $ 515,365 $ 624,591

Adjusted restaurant-level operating margin, continuing operations 13.3 % 15.3 %

Restaurant-level operating income from discontinued operations (4) 108,062 117,500

Adjusted restaurant-level operating income $ 623,427 $ 742,091

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(1) Reflects changes in legal reserves in connection with certain collective action wage and hour lawsuits.

(2) Lease remeasurement gains in connection with the 2023 Closure Initiative.

See Note 4 - Impairments and Exit Costs of the Notes to Consolidated Financial Statements for additional details regarding the 2023 Closure Initiative.

(3) Costs incurred in connection with the transition to a new partner compensation program.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Segment Restaurant-level and Adjusted Restaurant-level Operating Income and Corresponding Margins Non-GAAP Reconciliations - The following tables reconcile segment Income from operations and the corresponding margin to segment restaurant-level operating income and adjusted restaurant-level operating income and the corresponding margins for the periods indicated:

(dollars in thousands) 2023 2022

Income from operations $ 377,534 $ 407,860

Operating income margin 9.3 % 10.4 %

Franchise and other revenues 48,546 48,854

Depreciation and amortization 157,878 139,170

General and administrative 98,899 93,401

Provision for impaired assets and restaurant closings 32,669 4,420

Restaurant-level operating income $ 618,434 $ 595,997

Restaurant-level operating margin 15.4 % 15.4 %

Asset impairments and closing costs (1) (2,450) —

Partner compensation (2) 1,894 —

Total restaurant-level operating income adjustments (556) —

Adjusted restaurant-level operating income $ 617,878 $ 595,997

Adjusted restaurant-level operating margin 15.4 % 15.4 %

_________________

(1) Lease remeasurement gains in connection with the 2023 Closure Initiative.

(2) For 2023, includes lease remeasurement gains in connection with the 2023 Restaurant Closures.

See Note 5 - Impairments and Exit Costs of the Notes to Consolidated Financial Statements for additional details regarding the 2023 Restaurant Closures.

(3) Costs incurred in connection with the transition to a new partner compensation program.

International FISCAL YEAR

(dollars in thousands) 2023 2022

Income from operations $ 83,948 $ 57,333

Operating income margin 13.6 % 11.4 %

Franchise and other revenues 15,516 14,959

Depreciation and amortization 25,430 23,397

General and administrative 28,816 23,355

Provision for impaired assets and restaurant closings 905 1,537

Restaurant-level operating income $ 123,583 $ 90,663

Restaurant-level operating margin 20.5 % 18.5 %

Total restaurant-level operating income adjustments — —

Adjusted restaurant-level operating income $ 123,583 $ 90,663

Adjusted restaurant-level operating margin 20.5 % 18.5 %

(4) No adjustments for the periods presented.

Excludes intercompany royalty expense of $25.9 million and $26.4 million for 2024 and 2023, respectively, since the corresponding intercompany royalty revenue is included within Franchise and other revenues from continuing operations and is therefore already excluded from the calculation of restaurant-level operating income.

See Note 3 - Discontinued Operations of the Notes to Consolidated Financial Statements for additional details.

BLOOMIN’ BRANDS, INC.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Adjusted Restaurant-level Operating Margin Non-GAAP Reconciliations (continued) - The following table presents the percentages of certain operating cost financial statement line items in relation to Restaurant sales for the periods indicated:

REPORTED ADJUSTED (1) REPORTED ADJUSTED (1)

Restaurant sales 100.0 % 100.0 % 100.0 % 100.0 %

Food and beverage 30.6 % 30.6 % 31.8 % 31.8 %

Labor and other related 28.8 % 28.7 % 28.2 % 28.2 %

Other restaurant operating 24.4 % 24.6 % 24.5 % 24.3 %

Restaurant-level operating margin 16.2 % 16.1 % 15.6 % 15.7 %

_________________

(1) See the Consolidated Restaurant-level Operating Income and Adjusted Restaurant-level Operating Income and Corresponding Margins Non-GAAP Reconciliations table above for details regarding restaurant-level operating margin adjustments.

For 2023, restaurant-level operating margin adjustments of $1.9 million and ($6.1) million were recorded within Labor and other related expense and Other restaurant operating expense, respectively.

For 2022, all restaurant-level operating margin adjustments were recorded within Other restaurant operating expense.

Adjusted Income from Operations Non-GAAP Reconciliations - The following table reconciles Income from operations and the corresponding margin to adjusted income from operations and the corresponding margin for the periods indicated:

Adjusted Income from Operations Non-GAAP Reconciliations - The following table reconciles Income from continuing operations and the corresponding margin to adjusted income from operations and the corresponding margin for the periods indicated:

(dollars in thousands) 2024 2023

Income from operations $ 325,144 $ 330,421

Operating income margin 7.0 % 7.5 %

Income from continuing operations $ 139,808 $ 282,769

Operating income margin, continuing operations 3.5 % 6.8 %

Total restaurant-level operating income adjustments (1) 434 (4,206)

Asset impairments and closing costs (2)

Asset impairments and closure-related charges (2) 63,009 28,236

Executive transition costs (3) 4,121 —

Strategic initiative fees (4) 6,500 —

Foreign currency hedge gains (5) (15,728) —

Other (6) — 7,546

Total income from operations adjustments 58,336 31,576

Adjusted income from operations, continuing operations $ 198,144 $ 314,345

Adjusted operating income margin, continuing operations 5.0 % 7.5 %

Adjusted income from operations, discontinued operations (7) 34,446 42,375

Adjusted income from operations $ 232,590 $ 356,720

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(2) Includes asset impairment, closure costs and severance in connection with the 2023 Closure Initiative.

Also includes a lease termination gain, net of related asset impairment charges, of $6.7 million related to the closure of one restaurant.

(2) Fiscal year 2024 includes asset impairment, closure costs and severance primarily in connection with:

(i) the 2023 Restaurant Closures, (ii) the closure of nine restaurants in Hong Kong and (iii) the Q4 2024 Restaurant Impairment.

Fiscal year 2023 includes asset impairment, closure costs and severance primarily in connection with the 2023 Restaurant Closures.

(3) Compensation costs and professional fees related to our CEO transition and severance related to other executive level changes.

(4) Represents fees incurred in connection with a project-based strategic initiative.

The costs incurred represent third-party consulting fees related to a strategic initiative to develop revenue growth management capabilities for Outback Steakhouse and are included in General and administrative expense.

Given the magnitude and scope of this initiative and that it is not expected to recur after 2024, we consider these incremental expenses to be distinct from other consulting fees that we incur in the ordinary course of business and not reflective of the ongoing costs to operate our business or operating performance in the period.

(5) Gains in connection with the foreign exchange forward contracts entered into to partially offset foreign currency exchange risk associated with installment payments from the Brazil Sale Transaction.

(6) Primarily includes professional fees, severance and other costs not correlated to our core operating performance during the period.

(7) Includes operating income from our Brazil operations for the periods presented, including intercompany royalty expense.

For 2024, includes non-GAAP adjustments of $68.3 million for impairment of assets held for sale, $3.3 million of transaction related professional fees and $1.5 million of other impairment.

See Note 3 - Discontinued Operations of the Notes to Consolidated Financial Statements for additional details.

BLOOMIN’ BRANDS, INC.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Adjusted Net Income and Adjusted Diluted Earnings Per Share Non-GAAP Reconciliations - The following table reconciles Net income attributable to Bloomin’ Brands to adjusted net income and adjusted diluted earnings per share for the periods indicated:

Adjusted Net Income and Adjusted Diluted Earnings Per Share Non-GAAP Reconciliations - The following table reconciles Net (loss) income attributable to Bloomin’ Brands to adjusted net income and adjusted diluted earnings per share for the periods indicated:

(in thousands, except per share data) 2024 2023

Net income attributable to Bloomin’ Brands $ 247,386 $ 101,907

Net (loss) income attributable to Bloomin’ Brands $ (128,018) $ 247,386

Net (loss) income from discontinued operations, net of tax (75,982) 41,629

Net (loss) income attributable to Bloomin’ Brands from continuing operations (1) (52,036) 205,757

Income from operations adjustments (2) 58,336 31,576

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

Loss on fair value adjustment of derivatives, net (2) — 17,685

Loss on extinguishment of debt (3) 135,797 —

Total adjustments, before income taxes 194,133 31,576

Adjustment to provision for income taxes (4) (13,001) (7,872)

Net adjustments 20,775 130,952

Net adjustments, continuing operations 181,132 23,704

Adjusted net income, continuing operations 129,096 229,461

Adjusted net income, discontinued operations (5) 30,246 38,700

Adjusted net income $ 159,342 $ 268,161

Diluted earnings per share $ 2.56 $ 1.03

Diluted (loss) earnings per share:

Continuing operations $ (0.61) $ 2.13

Discontinued operations (0.88) 0.43

Net diluted (loss) earnings per share $ (1.49) $ 2.56

Adjusted diluted earnings per share

Continuing operations $ 1.45 $ 2.38

Discontinued operations 0.34 0.40

Adjusted diluted earnings per share (6)(7) $ 1.79 $ 2.78

Diluted weighted average common shares outstanding (7) 85,905 96,453

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_________________

(1) Represents net (loss) income from continuing operations less net income attributable to noncontrolling interests.

(2) See the Adjusted Income from Operations Non-GAAP Reconciliations table above for details regarding Income from operations adjustments.

(2) Includes losses primarily in connection with the 2025 Notes Partial Repurchase, including settlements of the related convertible senior note hedges and warrants.

(3) Includes losses in connection with the Second 2025 Notes Partial Repurchase, including settlements of the related convertible senior note hedges and warrants.

See Note 11 - Convertible Senior Notes of the Notes to Consolidated Financial Statements for additional details.

(4) Includes the tax effects of non-GAAP adjustments determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates for all periods presented.

The difference between GAAP and adjusted effective income tax rates during fiscal year 2024 primarily relates to nondeductible losses and other tax costs associated with the Second 2025 Notes Partial Repurchase.

(5) Includes net (loss) income from our Brazil operations for the periods presented and Income from operations adjustments described in footnote 7 of the Adjusted Income from Operations Non-GAAP Reconciliations table above.

For 2024, also includes adjustments for $33.8 million of deferred income tax expense resulting from the Brazil Sale Transaction and the tax effects of non-GAAP adjustments.

For 2023, also includes a $2.9 million adjustment related to a Brazil federal income tax exemption on certain state value added tax benefits.

For 2022, the primary difference between GAAP and adjusted effective income tax rates relates to certain non-deductible losses and other tax costs associated with the 2025 Notes Partial Repurchase.

(4) Adjusted diluted weighted average common shares outstanding was calculated excluding the dilutive effect of 5,067 and 6,089 shares for 2023 and 2022, respectively, to be issued upon conversion of the 2025 Notes to satisfy the amount in excess of the principal since our convertible note hedge offsets the dilutive impact of the shares underlying the 2025 Notes.

See Note 3 - Discontinued Operations of the Notes to Consolidated Financial Statements for additional details regarding the Brazil Sale Transaction.

(6) Adjusted diluted weighted average common shares outstanding for the fiscal years 2024 and 2023 were calculated including the effect of 1.6 million and 5.1 million dilutive securities, respectively, for outstanding 2025 Notes and the effect of 1.0 million and 3.4 million dilutive securities, respectively, for the Warrant Transactions, as defined below.

In connection with the offering of the 2025 Notes, we entered into convertible note hedge transactions (the “Convertible Note Hedge Transactions”) and concurrently entered into warrant transactions relating to the same number of shares of our common stock (the “Warrant Transactions”).

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

price is in excess of the conversion price of the 2025 Notes ($10.60 and $11.14 as of December 29, 2024 and December 31, 2023, respectively), the Convertible Note Hedge Transactions deliver shares to offset dilution from the 2025 Notes, which, in combination with the Warrant Transactions, effectively offset dilution from the 2025 Notes up to the strike price of the Warrant Transactions ($14.84 and $15.60 as of December 29, 2024 and December 31, 2023, respectively).

Adjusted diluted earnings per share and adjusted diluted weighted average common shares outstanding for the fiscal year 2023 have been recast to remove the 5.1 million share benefit of the Convertible Note Hedge Transactions which was previously included as a non-GAAP share adjustment.

(7) Due to a GAAP net loss from continuing operations, antidilutive securities are excluded from diluted weighted average common shares outstanding for the fiscal year 2024.

However, considering the adjusted net income position, adjusted diluted weighted average common shares outstanding incorporates securities that would have been dilutive for GAAP.

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

2 unchanged sentences

For a summary of sales of Company-owned restaurants, refer to Note 4 - Revenue Recognition of the Notes to Consolidated Financial Statements.

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

Franchise sales within this table do not represent our sales and are

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

presented only as an indicator of changes in the restaurant system, which management believes is important information regarding the health of our restaurant concepts and in determining our royalties and/or service fees.

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

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

(dollars in millions) 2024 2023

2 unchanged sentences

Bonefish Grill 9 10

Aussie Grill 2 —

total 553 572

International

International Franchise

Outback Steakhouse - Brazil 487 499

Outback Steakhouse - South Korea 310 354

Other 129 132

International total 458 410

International Franchise total 926 985

Total franchise sales $ 1,479 $ 1,557

____________________

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

Liquidity and Capital Resources

2 unchanged sentences

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

As of December 31, 2023, we had aggregate undistributed foreign earnings of approximately $42.6 million that may be repatriated to the U.S.

without additional material U.S.

federal income tax .

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

As of December 29, 2024, we did not have aggregate undistributed foreign earnings from its consolidated foreign subsidiaries.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Borrowing Capacity and Debt Service

Credit Facilities - Following is a summary of our outstanding credit facilities as of the dates indicated and principal payments and debt issuance during the periods indicated:

SENIOR SECURED CREDIT FACILITY TOTAL CREDIT FACILITIES

TERM LOAN A REVOLVING FACILITY 2025 NOTES 2029 NOTES

REVOLVING CREDIT FACILITY TOTAL CREDIT FACILITIES

SENIOR SECURED CREDIT FACILITY FORMER CREDIT FACILITY 2025 NOTES 2029 NOTES

(dollars in thousands)

5 unchanged sentences

2024 payments (360,000) (1,576,000) — — (1,936,000)

2024 repurchases and conversions — — (84,062) — (84,062)

Balance as of December 29, 2024 (1) $ 710,000 $ — $ 20,724 $ 300,000 $ 1,030,724

Interest rates, as of December 29, 2024 (2) 6.52 % 5.00 % 5.13 %

Principal maturity date April 2026 May 2025 April 2029

Principal maturity date September 2029 May 2025 April 2029

____________________

(1) Subsequent to December 29, 2024, we repaid $140.0 million on our revolving credit facility, primarily with proceeds from the Brazil Sale Transaction.

(2) Interest rate for revolving credit facility represents the weighted average interest rate as of December 29, 2024.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

As of December 29, 2024, we had $474.0 million in available unused borrowing capacity under our revolving credit facility, net of letters of credit of $16.0 million.

Credit Agreement - On April 26, 2022, we 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 our existing revolving credit facility from $800.0 million to $1.0 billion and a transition from the one-month London Inter-Bank Offered Rate (“LIBOR”) rate to the 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.

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

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

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

Credit Agreement - On September 19, 2024, we and OSI, as co-borrowers, entered into the Third Amended and Restated Credit Agreement (the “Credit Agreement”) which provides for senior secured financing of up to $1.2 billion consisting of a revolving credit facility (the “Senior Secured Credit Facility”).

The Senior Secured Credit Facility matures on September 19, 2029 and replaced our prior senior secured financing of up to $1.0 billion (the “Former Credit Facility”).

Our total indebtedness and the interest rate applied to our borrowings remained unchanged as a result of the Credit Agreement.

Our Credit Agreement, as amended, contains various financial and non-financial covenants.

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

See Note 12 - Long-term Debt, Net of the notes to Consolidated Financial Statements for additional details regarding the Amended Credit Agreement.

See Note 10 - Long-term Debt, Net of the notes to Consolidated Financial Statements for additional details regarding the Credit Agreement.

As of December 29, 2024 and December 31, 2023, we were in compliance with our debt covenants.

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

2025 Notes Partial Repurchase - On May 25, 2022, we and certain holders (the “Noteholders”) entered into exchange agreements in which the Noteholders agreed to exchange $125.0 million in aggregate principal amount of the 2025 Notes for $196.9 million in cash, plus accrued interest, and approximately 2.3 million shares of our common stock.

In connection with the 2025 Notes Partial Repurchase, we entered into 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, we received $131.9 million for the Note Hedge Early Termination Agreements and paid $114.8 million for the Warrant Early Termination Agreements.

See Note 13 - Convertible Senior Notes of the Notes to Consolidated Financial Statements for additional details regarding the 2025 Notes Partial Repurchase and related Note Hedge Early Termination Agreements and Warrant Early Termination Agreements.

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

2025 Notes Partial Repurchase - On February 29, 2024, we and certain holders entered into exchange agreements (the “2024 Exchange Agreements”) in which the holders agreed to exchange $83.6 million in aggregate principal amount of our outstanding 2025 Notes for approximately 7.5 million shares of our common stock and $3.3 million in cash, including accrued interest (the “Second 2025 Notes Partial Repurchase”).

Convertible Note Hedge and Warrant Transactions - In connection with the Second 2025 Notes Partial Repurchase, we entered into partial unwind agreements with certain financial institutions relating to a portion of the convertible note hedge transactions (the “2024 Note Hedge Early Termination Agreements”) and a portion of the Warrant Transactions (the “2024 Warrant Early Termination Agreements”) that we previously entered into in connection

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

with the issuance of the 2025 Notes.

Upon settlement, we received a termination payment which consisted of approximately $118.2 million in cash and 0.3 million shares of our common stock for the note hedges and we made a termination payment in an aggregate amount of approximately $102.2 million in cash for the warrants.

See Note 11 - Convertible Senior Notes of the Notes to Consolidated Financial Statements for additional details regarding the Second 2025 Notes Partial Repurchase and related 2024 Note Hedge Early Termination Agreements and 2024 Warrant Early Termination Agreements.

Sources and Uses of Cash

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

We believe that our expected liquidity sources are adequate to fund debt service requirements, lease obligations, capital expenditures and working capital obligations during the 12 months following this filing.

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

Brazil Sale Transaction - On December 30, 2024 we received cash proceeds, net of withheld income taxes, of $103.9 million, in U.S.

dollars based on the exchange rate on the closing date, representing 52% of total proceeds from the Brazil Sale Transaction, and applied the proceeds to our revolving credit facility during the thirteen weeks ended March 30, 2025.

The second installment payment, representing 48% of total proceeds from the Brazil Sale Transaction, is due on December 30, 2025, which we also anticipate applying towards the revolving credit facility.

The remaining 33% ownership interest is subject to a put-call mechanism contained in the shareholders agreement whereby the buyer may cause us to sell or we may cause the buyer to purchase the totality of the remaining interest during the fourth quarter of 2028 at a multiple of earnings defined in the shareholders agreement.

During 2024, we received $15.1 million of cash in connection with forward currency exchange contracts entered into concurrently with the Brazil Sale Transaction to hedge a portion of the foreign currency risk of the related purchase price installment payments.

Capital Expenditures - We estimate that our capital expenditures will total approximately $190 million to $210 million in 2025.

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

Dividends and Share Repurchases - During 2024 and 2023, we declared and paid quarterly cash dividends of $0.24 per share.

In February 2025, our Board declared a quarterly cash dividend of $0.15 per share, payable on March 26, 2025.

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

BLOOMIN’ BRANDS, INC.

1 unchanged sentence

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Brazil Judicial Deposit - During the first half of 2024, we anticipate making a judicial deposit of approximately $45.0 million to $50.0 million in connection with our appeal of an unfavorable court ruling related to our ongoing litigation regarding our eligibility for tax exemptions under the Brazil tax legislation.

The judicial deposit includes the disputed amounts through December 31, 2023 and will be recorded in Other assets, net, on our Consolidated Balance Sheet.

We believe that we will more likely than not prevail in this appeal and accordingly, have not recorded any expense or liability for the disputed amounts.

See Note 20 - Income Taxes of the Notes to Consolidated Financial Statements for further information regarding the Brazil tax legislation and related litigation.

Dividends and Share Repurchases - During 2023 and 2022, we declared and paid quarterly cash dividends of $0.24 and $0.14 per share, respectively.

In February 2024, our Board declared a quarterly cash dividend of $0.24 per share, payable on March 20, 2024.

Following is a summary of our share repurchase programs active during the periods presented as of December 29, 2024 (dollars in thousands):

2 unchanged sentences

2023 February 7, 2023 $ 125,000 $ 67,499 $ 57,501 $ —

Total share repurchase programs $ 179,999

2024 (1) February 13, 2024 $ 350,000 $ 253,195 $ — $ 96,805

________________

(1) Subsequent to December 31, 2023, we repurchased $12.5 million of our common stock authorized under the 2023 Share Repurchase Program under a Rule 10b5-1 plan.

I n February 2024, our Board canceled the remaining $57.5 million of authorization under the 2023 Share Repurchase Program and approved a new $350.0 million authorization.

The 2024 Share Repurchase Program includes capacity above our normal share repurchases activity to provide flexibility in retiring our 2025 Notes at or prior to their May 2025 maturity.

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

The following table presents our dividends and share repurchases for the periods indicated:

(dollars in thousands) DIVIDENDS PAID SHARE REPURCHASES (1)

(dollars in thousands) DIVIDENDS PAID SHARE REPURCHASES TOTAL

Fiscal year 2024 $ 82,574 $ 265,695 $ 348,269

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Total $ 166,316 $ 335,695 $ 502,011

________________

(1) Excludes $0.1 million of excise tax on share repurchases for fiscal year 2023.

Our ability to pay dividends and make share repurchases is dependent on our ability to obtain funds from our subsidiaries, continued compliance with the financial covenants in our debt agreements and the existence of surplus, as well as our earnings, financial condition, capital expenditure requirements and other factors that our Board deems relevant.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Material Cash Requirements - The following table presents current and long-term material cash requirements as of December 29, 2024:

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(3) Projected future interest payments on long-term debt are based on interest rates in effect as of December 29, 2024.

Estimated interest expense includes the impact of variable-to-fixed interest rate swap agreements.

(4) Purchase obligations include agreements to purchase goods or services that are enforceable, legally binding and specify all significant terms, including fixed or minimum quantities to be purchased;

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and the approximate timing of the transaction.

We have purchase obligations with various vendors that consist primarily of inventory, fixtures and equipment and technology.

We have purchase obligations with various vendors that consist primarily of inventory, technology, store-level services and fixtures and equipment.

(5) Includes other long-term liabilities, primarily consisting of deferred compensation obligations, deposits, undiscounted finance leases and other accrued obligations.

Unrecognized tax benefits are excluded from this table since it is not possible to estimate when these future payments may occur.

Future indemnification obligations in connection with the Brazil Sale Transaction, subject to a cap under the terms of the related purchase agreement, and unrecognized tax benefits are excluded from this table since it is not possible to estimate when these future payments may occur.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Summary of Cash Flows and Financial Condition

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

(dollars in thousands) 2023 2022

Net cash provided by operating activities $ 532,421 $ 390,922

Net cash used in investing activities (317,106) (201,138)

Net cash used in financing activities (187,125) (195,501)

Effect of exchange rate changes on cash and cash equivalents 1,448 1,395

Net increase (decrease) in cash, cash equivalents and restricted cash $ 29,638 $ (4,322)

Operating activities - The increase in net cash provided by operating activities during 2023 as compared to 2022 was primarily due to:

(i) higher operational receipts, net of payments, (ii) decreased employee compensation payments and (iii) lower tax payments.

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

Operating activities - The decrease in net cash provided by operating activities during 2024 as compared to 2023 was primarily due to lower net earnings and changes in working capital.

The increase in net cash provided by operating activities during 2023 as compared to 2022 was primarily due to:

(i) higher net earnings, (ii) decreased employee compensation payments and (iii) lower income tax payments.

These increases were partially offset by higher rent and interest payments.

Investing activities - The increase in net cash used in investing activities during 2023 as compared to 2022 was primarily due to higher capital expenditures and a decrease in cash withdrawn from Company-owned life insurance policies .

Financing activities - The decrease in net cash used in financing activities during 2023 as compared to 2022 was primarily due to:

Investing activities - The decrease in net cash used in investing activities during 2024 as compared to 2023 was primarily due to lower capital expenditures and receipt of proceeds from foreign exchange forward contracts .

The increase in net cash used in investing activities during 2023 as compared to 2022 was primarily due to higher capital expenditures and a decrease in cash withdrawn from Company-owned life insurance policies .

Financing activities - The decrease in net cash used in financing activities during 2024 as compared to 2023 was primarily due to higher net draws on the revolving credit facility and net cash received from the 2024 Note Hedge Early Termination Agreements, partially offset by higher repurchases of common stock and lower net proceeds from share-based compensation.

The decrease in net cash used in financing activities during 2023 as compared to 2022 was primarily due to:

(i) a decrease in repurchases of common stock, (ii) higher net proceeds from share-based compensation and (iii) partner equity plan payments during 2022.

These decreases were partially offset by higher payments of cash dividends on our common stock and increased repayments on our debt.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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

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Working capital (deficit) $ (631,817) $ (659,021)

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Working capital (deficit) includes:

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The key estimates and assumptions used in this model are future cash flow estimates, with material changes generally driven by changes in expected use, and the discount rate.

These estimates are subjective and our ability to realize future cash flows and asset fair values is affected by factors such as ongoing maintenance and improvement of the assets, changes in economic conditions and changes in our operating performance.

These estimates are subjective and our ability to realize future cash flows and asset fair values is affected by factors such as the period of time the restaurant has been open, ongoing maintenance and improvement of the assets, changes in economic conditions and changes in our operating performance.

Historically, the change in useful lives of our assets as a result of planned closures or the decision not to renew leases has been a key factor in the impairment we have recognized.

Based on a review of operating results for each of our restaurants, given the current operating environment, the amount of net book value associated with lower performing restaurants that would be deemed at risk for impairment is not material to our consolidated financial statements.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Goodwill and Indefinite-Lived Intangible Assets - Goodwill and indefinite-lived intangible assets are not subject to amortization and are tested for impairment annually in the second fiscal quarter, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

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Any adverse change in these factors could have a significant impact on the recoverability of assets and could have a material impact on our consolidated financial statements.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

If the qualitative assessment is not performed or if we determine that it is not more likely than not that the fair value of the reporting unit exceeds the carrying value, a quantitative approach, using the fair value of the reporting unit, is calculated.

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The carrying value of goodwill and trade names as of December 29, 2024 was $213.3 million and $414.7 million, respectively.

We performed our annual impairment test in the second quarter of 2023 by utilizing the quantitative approach and determined that the excess of fair value over carrying value of our reporting units was substantial.

We performed our annual impairment test in the second quarter of 2024 by utilizing the qualitative approach and determined that there were no events or circumstances to indicate that it was more likely than not that the fair value of any of our reporting units was less than their carrying values.

Sales declines at our restaurants, unplanned increases in commodity or labor costs, deterioration in overall economic conditions and challenges in the restaurant industry may result in future impairment charges.

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Such an economic penalty would typically result from having to abandon a building or equipment with remaining economic value upon vacating a property.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

At the inception of each lease, we evaluate the property and the lease to determine whether the lease is an operating lease or a finance lease.

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For some programs, we maintain stop-loss coverage to limit the exposure relating to certain risks.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

We record a liability for all unresolved and incurred but not reported claims at the anticipated cost below our specified retention levels or per-claim deductible amounts.

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We currently expect to utilize general business tax credit carryforwards within a 10-year period.

However, our ability to utilize these tax credits could be adversely impacted by, among other items, a future “ownership change” as defined under Section 382 of the Internal Revenue Code.

However, our ability to utilize these tax credits could be adversely impacted by, among other items, a future “ownership change” as defined under Section 382 of the Internal Revenue Code as well as the Company’s inability to generate sufficient future taxable income.

A valuation allowance is established against the deferred tax assets when it is more likely than not that some portion or all of the deferred taxes may not be realized.

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As of December 29, 2024, we had $17.1 million of unrecognized tax benefits, including accrued interest and penalties, that if recognized, would impact our effective income tax rate.

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Recently Issued Financial Accounting Standards

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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-K

Item 7. Management’s Discussion and Analysis