UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~June 26, ~~2021~~2022

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number: 001-35625

BLOOMIN’ BRANDS, INC.

(Exact name of registrant as specified in its charter)


Delaware						20-8023465
(State or other jurisdiction of incorporation or organization)						(IRS Employer Identification No.)

2202 North West Shore Boulevard, Suite 500, Tampa, FL 33607

(Address of principal executive offices) (Zip Code)

(813) 282-1225

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock

$0.01 par value

BLMN

The Nasdaq Stock Market LLC

(Nasdaq Global Select Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐

Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~November 1, 2021, 89,249,167~~July 28, 2022, 89,297,078 shares of common stock of the registrant were outstanding.

Table of Contents

BLOOMIN’ BRANDS, INC.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

For the Quarterly Period Ended ~~September~~June 26, ~~2021~~2022

(Unaudited)

TABLE OF CONTENTS


	PART I — FINANCIAL INFORMATION	Page No.

Item 1.	Financial Statements (Unaudited)	3

	Consolidated Financial Statements:

	Consolidated Balance Sheets — S ~~eptember~~June 2 6 , ~~2021~~2022 and December ~~27, 2020~~26, 2021	3

	Consolidated Statements of Operations and Comprehensive (Loss) Income ~~(Loss)~~ — For the Thirteen ~~and Thirty~~-Ni ne and Twenty-Six Weeks Ended ~~September~~June 2 6 , 202 12 and ~~September~~June 2 7 , 2 02 0021	4

	Consolidated Statements of Changes in Stockholders’ Equity — For the Thirteen and TTwenty ~~hirty~~-~~Nine~~-Six Weeks Ended ~~September~~June 2 6 , 202 12 and ~~September~~June 2 7 , 2 02 0021	5

	Condensed Consolidated Statements of Cash Flows — For the T ~~hirty~~-~~Nine~~wenty-Six Weeks Ended ~~September~~Ju ne 2 6 , ~~2021~~2022 and ~~September~~June 2 7 , ~~2020~~2021	7

	Notes to Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3227

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5548

Item 4.	Controls and Procedures	5548

	PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	5649

Item 1A.	Risk Factors	5649

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5649



Item 6.	Exhibits	5750

	Signature	5851

Table of Contents

BLOOMIN’ BRANDS, INC.

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

CONSOLIDATED BALANCE SHEETS

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

SEPTEMBER 26, 2021 DECEMBER 27, 2020
ASSETS
Current assets
Cash and cash equivalents $ 76,337 $ 109,980
Restricted cash and cash equivalents 4,247 428
Inventories 72,433 61,928
Other current assets, net 87,642 151,518
Total current assets 240,659 323,854
Property, fixtures and equipment, net 852,105 887,687
Operating lease right-of-use assets 1,152,268 1,172,910
Goodwill 273,490 271,164
Intangible assets, net 456,058 459,983
Deferred income tax assets, net 161,903 153,883
Other assets, net 82,119 92,626
Total assets $ 3,218,602 $ 3,362,107
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable $ 157,410 $ 141,457
Accrued and other current liabilities 444,591 388,321
Unearned revenue 284,128 381,616
Current portion of long-term debt 11,086 38,710
Total current liabilities 897,215 950,104
Non-current operating lease liabilities 1,196,604 1,217,921
Long-term debt, net 828,065 997,770
Other long-term liabilities, net 130,382 185,355
Total liabilities 3,052,266 3,351,150
Commitments and contingencies (Note 19) 0 0
Stockholders’ equity
Bloomin’ Brands stockholders’ equity
Preferred stock, $0.01 par value, 25,000,000 shares authorized; no shares issued and outstanding as of September 26, 2021 and December 27, 2020 — —
Common stock, $0.01 par value, 475,000,000 shares authorized; 89,248,056 and 87,855,571 shares issued and outstanding as of September 26, 2021 and December 27, 2020, respectively 892 879
Additional paid-in capital 1,115,464 1,132,808
Accumulated deficit (758,870) (918,096)
Accumulated other comprehensive loss (197,670) (211,446)
Total Bloomin’ Brands stockholders’ equity 159,816 4,145
Noncontrolling interests 6,520 6,812
Total stockholders’ equity 166,336 10,957
Total liabilities and stockholders’ equity $ 3,218,602 $ 3,362,107
The accompanying notes are an integral part of these consolidated financial statements.


	JUNE 26, 2022		DECEMBER 26, 2021
ASSETS
Current assets
Cash and cash equivalents	$	95,346	$	87,585
Restricted cash and cash equivalents	101		1,472
Inventories	80,482		79,112

Other current assets, net	116,997		184,623
Total current assets	292,926		352,792


Property, fixtures and equipment, net	852,155		842,012
Operating lease right-of-use assets	1,122,317		1,130,873
Goodwill	278,780		268,444
Intangible assets, net	452,654		453,412
Deferred income tax assets, net	158,110		168,068
Other assets, net	73,053		78,670
Total assets	$	3,229,995	$	3,294,271


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	185,645	$	167,978
Accrued and other current liabilities	412,831		406,894
Unearned revenue	309,863		398,795

Current portion of long-term debt	1,511		10,958
Total current liabilities	909,850		984,625

Non-current operating lease liabilities	1,168,692		1,179,447


Long-term debt, net	800,222		782,107
Other long-term liabilities, net	88,490		125,242
Total liabilities	2,967,254		3,071,421
Commitments and contingencies (Note 15)	0		0


Stockholders’ equity
Bloomin’ Brands stockholders’ equity
Preferred stock, $0.01 par value, 25,000,000 shares authorized; no shares issued and outstanding as of June 26, 2022 and December 26, 2021	—		—
Common stock, $0.01 par value, 475,000,000 shares authorized; 90,151,164 and 89,252,823 shares issued and outstanding as of June 26, 2022 and December 26, 2021, respectively	902		893
Additional paid-in capital	1,169,697		1,119,728
Accumulated deficit	(733,723)		(698,171)
Accumulated other comprehensive loss	(176,054)		(205,989)
Total Bloomin’ Brands stockholders’ equity	260,822		216,461
Noncontrolling interests	1,919		6,389
Total stockholders’ equity	262,741		222,850
Total liabilities and stockholders’ equity	$	3,229,995	$	3,294,271

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

Table of Contents

BLOOMIN’ BRANDS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME ~~(LOSS)~~

(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020
Revenues
Restaurant sales $ 996,718 $ 766,487 $ 3,031,396 $ 2,338,985
Franchise and other revenues 13,745 4,773 43,906 19,071
Total revenues 1,010,463 771,260 3,075,302 2,358,056
Costs and expenses
Food and beverage costs 304,300 230,547 908,272 730,998
Labor and other related 290,246 246,861 859,883 761,667
Other restaurant operating 299,788 207,301 762,531 631,702
Depreciation and amortization 40,827 43,417 122,592 137,469
General and administrative 58,880 57,443 182,590 197,732
Provision for impaired assets and restaurant closings 1,585 (54) 8,962 66,223
Total costs and expenses 995,626 785,515 2,844,830 2,525,791
Income (loss) from operations 14,837 (14,255) 230,472 (167,735)
Loss on extinguishment and modification of debt — — (2,073) (237)
Other income (expense), net 5 1 26 (211)
Interest expense, net (14,245) (18,300) (43,863) (46,647)
Income (loss) before (benefit) provision for income taxes 597 (32,554) 184,562 (214,830)
(Benefit) provision for income taxes (4,454) (14,776) 24,827 (70,210)
Net income (loss) 5,051 (17,778) 159,735 (144,620)
Less: net income (loss) attributable to noncontrolling interests 1,602 (141) 4,879 (116)
Net income (loss) attributable to Bloomin’ Brands 3,449 (17,637) 154,856 (144,504)
Redemption of preferred stock in excess of carrying value — — — (3,496)
Net income (loss) attributable to common stockholders $ 3,449 $ (17,637) $ 154,856 $ (148,000)
Net income (loss) $ 5,051 $ (17,778) $ 159,735 $ (144,620)
Other comprehensive income (loss):
Foreign currency translation adjustment 1,673 (4,095) 5,113 (41,202)
Unrealized (loss) gain on derivatives, net of tax (153) 261 (323) (14,631)
Reclassification of adjustments for loss on derivatives included in Net income (loss), net of tax 1,519 2,962 6,036 6,943
Amortization of terminated interest rate swaps, net of tax 1,479 — 2,950 —
Comprehensive income (loss) 9,569 (18,650) 173,511 (193,510)
Less: comprehensive income (loss) attributable to noncontrolling interests 1,602 (141) 4,879 (780)
Comprehensive income (loss) attributable to Bloomin’ Brands $ 7,967 $ (18,509) $ 168,632 $ (192,730)
Earnings (loss) per share attributable to common stockholders:
Basic $ 0.04 $ (0.20) $ 1.74 $ (1.69)
Diluted $ 0.03 $ (0.20) $ 1.42 $ (1.69)
Weighted average common shares outstanding:
Basic 89,229 87,558 88,890 87,394
Diluted 107,783 87,558 109,410 87,394


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
	JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
Revenues
Restaurant sales	$	1,108,918	$	1,055,227	$	2,232,493	$	2,034,678
Franchise and other revenues	16,244		22,139		33,204		30,161
Total revenues	1,125,162		1,077,366		2,265,697		2,064,839
Costs and expenses
Food and beverage costs	364,459		312,102		723,829		603,972
Labor and other related	308,759		294,999		621,270		569,637
Other restaurant operating	263,529		233,450		522,639		462,743
Depreciation and amortization	41,257		40,539		83,032		81,765
General and administrative	59,246		66,462		117,920		123,710
Provision for impaired assets and restaurant closings	193		5,177		2,032		7,377
Total costs and expenses	1,037,443		952,729		2,070,722		1,849,204
Income from operations	87,719		124,637		194,975		215,635
Loss on extinguishment and modification of debt	(107,630)		(2,073)		(107,630)		(2,073)
Loss on fair value adjustment of derivatives, net	(17,685)		—		(17,685)		—
Other income, net	—		—		—		21
Interest expense, net	(12,548)		(14,990)		(26,181)		(29,618)
(Loss) income before provision for income taxes	(50,144)		107,574		43,479		183,965
Provision for income taxes	11,536		22,688		27,465		29,281
Net (loss) income	(61,680)		84,886		16,014		154,684
Less: net income attributable to noncontrolling interests	1,955		2,341		4,138		3,277
Net (loss) income attributable to Bloomin’ Brands	$	(63,635)	$	82,545	$	11,876	$	151,407



Net (loss) income	$	(61,680)	$	84,886	$	16,014	$	154,684
Other comprehensive (loss) income:
Foreign currency translation adjustment	11,940		10,015		23,223		3,440

Unrealized (loss) gain on derivatives, net of tax	—		(128)		573		(170)
Reclassification of adjustments for loss on derivatives included in Net (loss) income, net of tax	273		1,514		954		4,517
Impact of terminated interest rate swaps included in Net (loss) income, net of tax	2,164		1,471		5,185		1,471
Comprehensive (loss) income	(47,303)		97,758		45,949		163,942
Less: comprehensive income attributable to noncontrolling interests	1,955		2,341		4,138		3,277
Comprehensive (loss) income attributable to Bloomin’ Brands	$	(49,258)	$	95,417	$	41,811	$	160,665

(Loss) earnings per share:
Basic	$	(0.72)	$	0.93	$	0.13	$	1.71
Diluted	$	(0.72)	$	0.75	$	0.12	$	1.38
Weighted average common shares outstanding:
Basic	88,898		89,075		89,127		88,721
Diluted	88,898		109,805		102,045		110,223

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

Table of Contents

BLOOMIN’ BRANDS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)


		BLOOMIN’ BRANDS, INC.																				BLOOMIN’ BRANDS, INC.
		COMMON STOCK			ADDITIONAL PAID-IN CAPITAL				ACCUM- ULATED DEFICIT		ACCUMULATED OTHER COMPREHENSIVE LOSS			NON-CONTROLLING INTERESTS				TOTAL				COMMON STOCK					ADDITIONAL PAID-IN CAPITAL				ACCUM- ULATED DEFICIT				ACCUMULATED OTHER COMPREHENSIVE LOSS				NON-CONTROLLING INTERESTS				TOTAL
		SHARES	AMOUNT										SHARES								AMOUNT
Balance, June 27, 2021		89,211	$	892			$	1,109,904			$	(762,319)				$	(202,188)			$	6,618		$	152,907
Balance, March 27, 2022																					Balance, March 27, 2022	89,185			$	892			$	1,115,458			$	(634,356)			$	(190,431)			$	1,694			$	293,257

Net income		—	—		—				3,449		—			1,602				5,051
Net (loss) income																					Net (loss) income	—			—		—				(63,635)				—				1,955				(61,680)
Other comprehensive income, net of tax	Other comprehensive income, net of tax	—	—		—				—		4,518			—				4,518			Other comprehensive income, net of tax	—			—		—				—				14,377				—				14,377

Cash dividends declared, $0.14 per common share																					Cash dividends declared, $0.14 per common share	—			—		(12,418)				—				—				—				(12,418)
Repurchase and retirement of common stock																					Repurchase and retirement of common stock	(1,761)			(17)		—				(35,732)				—				—				(35,749)
Stock-based compensation	Stock-based compensation	—	—		5,593				—		—			—				5,593			Stock-based compensation	—			—		4,959				—				—				—				4,959

Common stock issued under stock plans (1)	Common stock issued under stock plans (1)	37	—		(42)				—		—			—				(42)			Common stock issued under stock plans (1)	414			4		1,118				—				—				—				1,122
Purchase of noncontrolling interests		—	—		9				—		—			(12)				(3)
Purchase of noncontrolling interests, net of tax of $1,142																					Purchase of noncontrolling interests, net of tax of $1,142	—			—		(3,301)				—				—				539				(2,762)
Distributions to noncontrolling interests	Distributions to noncontrolling interests	—	—		—				—		—			(2,062)				(2,062)			Distributions to noncontrolling interests	—			—		—				—				—				(2,513)				(2,513)
Contributions from noncontrolling interests	Contributions from noncontrolling interests	—	—		—				—		—			374				374			Contributions from noncontrolling interests	—			—		—				—				—				244				244

Retirement of convertible senior note hedges																					Retirement of convertible senior note hedges	—			—		112,956				—				—				—				112,956
Retirement of warrants																					Retirement of warrants	—			—		(97,617)				—				—				—				(97,617)
Issuance of common stock from repurchase of convertible senior notes																					Issuance of common stock from repurchase of convertible senior notes	2,313			23		48,542				—				—				—				48,565
Balance, June 26, 2022																					Balance, June 26, 2022	90,151			$	902	$	1,169,697			$	(733,723)			$	(176,054)			$	1,919			$	262,741

Balance, September 26, 2021		89,248	$	892	$	1,115,464			$	(758,870)	$	(197,670)		$	6,520			$	166,336
Balance, December 26, 2021																					Balance, December 26, 2021	89,253			$	893	$	1,119,728			$	(698,171)			$	(205,989)			$	6,389			$	222,850

Balance, December 27, 2020		87,856	$	879	$	1,132,808			$	(918,096)	$	(211,446)		$	6,812			$	10,957
Cumulative-effect from a change in accounting principle, net of tax		—	—		(47,323)				4,370		—			—				(42,953)
Net income	Net income	—	—		—				154,856		—			4,879				159,735			Net income	—			—		—				11,876				—				4,138				16,014
Other comprehensive income, net of tax	Other comprehensive income, net of tax	—	—		—				—		13,776			—				13,776			Other comprehensive income, net of tax	—			—		—				—				29,935				—				29,935

Cash dividends declared, $0.28 per common share																					Cash dividends declared, $0.28 per common share	—			—		(24,977)				—				—				—				(24,977)
Repurchase and retirement of common stock																					Repurchase and retirement of common stock	(2,312)			(23)		—				(47,428)				—				—				(47,451)
Stock-based compensation	Stock-based compensation	—	—		20,100				—		—			—				20,100			Stock-based compensation	—			—		9,802				—				—				—				9,802

Common stock issued under stock plans (1)	Common stock issued under stock plans (1)	1,392	13		9,870				—		—			—				9,883			Common stock issued under stock plans (1)	897			9		1,998				—				—				—				2,007
Purchase of noncontrolling interests		—	—		9				—		—			(12)				(3)
Purchase of noncontrolling interests, net of tax of $254																					Purchase of noncontrolling interests, net of tax of $254	—			—		(735)				—				—				(3,915)				(4,650)
Distributions to noncontrolling interests	Distributions to noncontrolling interests	—	—		—				—		—			(6,203)				(6,203)			Distributions to noncontrolling interests	—			—		—				—				—				(5,154)				(5,154)
Contributions from noncontrolling interests	Contributions from noncontrolling interests	—	—		—				—		—			1,044				1,044			Contributions from noncontrolling interests	—			—		—				—				—				461				461

Balance, September 26, 2021		89,248	$	892	$	1,115,464			$	(758,870)	$	(197,670)		$	6,520			$	166,336
Retirement of convertible senior note hedges																					Retirement of convertible senior note hedges	—			—		112,956				—				—				—				112,956
Retirement of warrants																					Retirement of warrants	—			—		(97,617)				—				—				—				(97,617)
Issuance of common stock from repurchase of convertible senior notes																					Issuance of common stock from repurchase of convertible senior notes	2,313			23		48,542				—				—				—				48,565
Balance, June 26, 2022																					Balance, June 26, 2022	90,151			$	902	$	1,169,697			$	(733,723)			$	(176,054)			$	1,919			$	262,741

														(CONTINUED...)

Table of Contents

BLOOMIN’ BRANDS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)

BLOOMIN’ BRANDS, INC.
COMMON STOCK ADDITIONAL PAID-IN CAPITAL ACCUM-
ULATED DEFICIT ACCUMULATED OTHER
COMPREHENSIVE LOSS NON-CONTROLLING INTERESTS TOTAL
SHARES AMOUNT
Balance, June 28, 2020 87,534 $ 875 $ 1,123,613 $ (886,248) $ (217,130) $ 8,088 $ 29,198
Net loss — — — (17,637) — (141) (17,778)
Other comprehensive loss, net of tax — — — — (872) — (872)
Stock-based compensation — — 2,712 — — — 2,712
Common stock issued under stock plans (1) 39 — (179) — — — (179)
Distributions to noncontrolling interests — — — — — (745) (745)
Contributions from noncontrolling interests — — — — — 219 219
Balance, September 27, 2020 87,573 $ 875 $ 1,126,146 $ (903,885) $ (218,002) $ 7,421 $ 12,555
Balance, December 29, 2019 86,946 $ 869 $ 1,094,338 $ (755,089) $ (169,776) $ 7,139 $ 177,481
Cumulative-effect from a change in accounting principle, net of tax — — — (4,292) — — (4,292)
Net loss — — — (144,504) — (116) (144,620)
Other comprehensive loss, net of tax — — — — (48,743) (147) (48,890)
Cash dividends declared, $0.20 per common share — — (17,480) — — — (17,480)
Stock-based compensation — 11,072 — — — 11,072
Consideration for preferred stock in excess of carrying value, net of tax — — (3,496) — 517 1,261 (1,718)
Common stock issued under stock plans (1) 627 6 (3,047) — — — (3,041)
Purchase of noncontrolling interests — — (58) — — 1 (57)
Distributions to noncontrolling interests — — — — — (1,083) (1,083)
Contributions from noncontrolling interests — — — — — 366 366
Equity component value of convertible note issuance, net of tax of $650 — — 64,367 — — — 64,367
Sale of common stock warrant — — 46,690 — — — 46,690
Purchase of convertible note hedge — — (66,240) — — — (66,240)
Balance, September 27, 2020 87,573 $ 875 $ 1,126,146 $ (903,885) $ (218,002) $ 7,421 $ 12,555


	BLOOMIN’ BRANDS, INC.
	COMMON STOCK			ADDITIONAL PAID-IN CAPITAL		ACCUM- ULATED DEFICIT		ACCUMULATED OTHER COMPREHENSIVE LOSS		NON-CONTROLLING INTERESTS		TOTAL
	SHARES	AMOUNT
Balance, March 28, 2021	88,855	$	889	$	1,097,639	$	(844,864)	$	(215,060)	$	6,801	$	45,405
Net income	—	—		—		82,545		—		2,341		84,886
Other comprehensive income, net of tax	—	—		—		—		12,872		—		12,872


Stock-based compensation	—	—		9,781		—		—		—		9,781

Common stock issued under stock plans (1)	356	3		2,484		—		—		—		2,487



Distributions to noncontrolling interests	—	—		—		—		—		(2,683)		(2,683)
Contributions from noncontrolling interests	—	—		—		—		—		159		159




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

Balance, December 27, 2020	87,856	$	879	$	1,132,808	$	(918,096)	$	(211,446)	$	6,812	$	10,957
Cumulative-effect from a change in accounting principle, net of tax	—	—		(47,323)		4,370		—		—		(42,953)
Net income	—	—		—		151,407		—		3,277		154,684
Other comprehensive income, net of tax	—	—		—		—		9,258		—		9,258


Stock-based compensation	—			14,507		—		—		—		14,507


Common stock issued under stock plans (1)	1,355	13		9,912		—		—		—		9,925



Distributions to noncontrolling interests	—	—		—		—		—		(4,141)		(4,141)
Contributions from noncontrolling interests	—	—		—		—��		—		670		670



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

________________

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

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

Table of Contents

BLOOMIN’ BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(DOLLARS IN THOUSANDS, UNAUDITED)


		THIRTY-NINE WEEKS ENDED					TWENTY-SIX WEEKS ENDED
		SEPTEMBER 26, 2021		SEPTEMBER 27, 2020			JUNE 26, 2022		JUNE 27, 2021

Cash flows provided by operating activities:	Cash flows provided by operating activities:					Cash flows provided by operating activities:
Net income (loss)		$	159,735	$	(144,620)
Adjustments to reconcile Net income (loss) to cash provided by operating activities:
Net income						Net income	$	16,014	$	154,684
Adjustments to reconcile Net income to cash provided by operating activities:						Adjustments to reconcile Net income to cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	122,592		137,469		Depreciation and amortization	83,032		81,765
Amortization of debt discounts and issuance costs	Amortization of debt discounts and issuance costs	3,441		6,504		Amortization of debt discounts and issuance costs	2,025		2,396
Amortization of deferred gift card sales commissions	Amortization of deferred gift card sales commissions	19,277		15,553		Amortization of deferred gift card sales commissions	13,458		14,436
Provision for impaired assets and restaurant closings	Provision for impaired assets and restaurant closings	8,962		66,223		Provision for impaired assets and restaurant closings	2,032		7,377
Amortization of unrealized loss on terminated interest rate swaps		3,973		—

Non-cash interest expense from terminated interest rate swaps						Non-cash interest expense from terminated interest rate swaps	6,980		1,981
Non-cash operating lease costs	Non-cash operating lease costs	57,791		55,401		Non-cash operating lease costs	41,336		38,073
Provision for expected credit losses and contingent lease liabilities		937		7,420
Inventory obsolescence and spoilage		—		6,835

Stock-based and other non-cash compensation expense	Stock-based and other non-cash compensation expense	20,100		11,072		Stock-based and other non-cash compensation expense	9,802		14,507
Deferred income tax expense (benefit)		3,842		(80,201)
Deferred income tax expense						Deferred income tax expense	8,329		10,300

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

(Gain) loss on disposal of property, fixtures and equipment		(1,218)		1,055
Loss on fair value adjustment of derivatives, net						Loss on fair value adjustment of derivatives, net	17,685		—
Other, net	Other, net	1,408		(2,223)		Other, net	4,935		(1,343)
Change in assets and liabilities	Change in assets and liabilities	(96,594)		(25,517)		Change in assets and liabilities	(94,440)		(43,067)

Net cash provided by operating activities	Net cash provided by operating activities	304,246		54,971		Net cash provided by operating activities	218,818		283,182
Cash flows used in investing activities:	Cash flows used in investing activities:					Cash flows used in investing activities:
Proceeds from disposal of property, fixtures and equipment	Proceeds from disposal of property, fixtures and equipment	7,052		2,088		Proceeds from disposal of property, fixtures and equipment	163		4,828

Capital expenditures	Capital expenditures	(85,339)		(66,956)		Capital expenditures	(76,901)		(51,398)
Other investments, net	Other investments, net	9,202		8,706		Other investments, net	1,000		3,945
Net cash used in investing activities	Net cash used in investing activities	$	(69,085)	$	(56,162)	Net cash used in investing activities	$	(75,738)	$	(42,625)

		(CONTINUED...)					(CONTINUED...)

Table of Contents

BLOOMIN’ BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(DOLLARS IN THOUSANDS, UNAUDITED)


		THIRTY-NINE WEEKS ENDED					TWENTY-SIX WEEKS ENDED
		SEPTEMBER 26, 2021		SEPTEMBER 27, 2020			JUNE 26, 2022		JUNE 27, 2021

Cash flows (used in) provided by financing activities:
Cash flows used in financing activities:						Cash flows used in financing activities:
Proceeds from issuance of long-term debt	Proceeds from issuance of long-term debt	$	200,000	$	—	Proceeds from issuance of long-term debt	$	—	$	200,000

Repayments of long-term debt and finance lease obligations	Repayments of long-term debt and finance lease obligations	(428,364)		(19,798)		Repayments of long-term debt and finance lease obligations	(195,733)		(425,564)
Proceeds from borrowings on revolving credit facilities	Proceeds from borrowings on revolving credit facilities	378,000		505,000		Proceeds from borrowings on revolving credit facilities	624,500		286,000
Repayments of borrowings on revolving credit facilities	Repayments of borrowings on revolving credit facilities	(701,000)		(549,000)		Repayments of borrowings on revolving credit facilities	(304,500)		(599,000)

Financing fees	Financing fees	(5,868)		(3,096)		Financing fees	(853)		(5,868)
Proceeds from issuance of senior notes	Proceeds from issuance of senior notes	300,000		—		Proceeds from issuance of senior notes	—		300,000
Proceeds from issuance of convertible senior notes		—		230,000
Proceeds from issuance of warrants		—		46,690
Purchase of convertible note hedge		—		(66,240)

Issuance costs related to senior notes		(5,546)		(8,416)
Proceeds (payments of taxes) from share-based compensation, net		9,883		(3,041)
Distributions to noncontrolling interests		(6,203)		(1,083)
Contributions from noncontrolling interests		1,044		366
Purchase of limited partnership and noncontrolling interests		(3)		(57)
Payments for partner equity plan		(7,135)		(12,517)

Issuance costs related to senior notes						Issuance costs related to senior notes	—		(5,546)
Repurchase of convertible senior notes						Repurchase of convertible senior notes	(196,919)		—
Proceeds from retirement of convertible senior note hedges						Proceeds from retirement of convertible senior note hedges	131,869		—
Payments for retirement of warrants						Payments for retirement of warrants	(114,825)		—
Proceeds from share-based compensation, net						Proceeds from share-based compensation, net	2,007		9,925
Distributions to noncontrolling interests						Distributions to noncontrolling interests	(5,154)		(4,141)
Contributions from noncontrolling interests						Contributions from noncontrolling interests	461		670
Purchase of noncontrolling interests						Purchase of noncontrolling interests	(4,904)		—
Payments for partner equity plan						Payments for partner equity plan	(5,743)		(4,494)
Repurchase of common stock						Repurchase of common stock	(46,151)		—

Cash dividends paid on common stock	Cash dividends paid on common stock	—		(17,480)		Cash dividends paid on common stock	(24,977)		—
Redemption of subsidiary preferred stock		—		(1,475)
Net cash (used in) provided by financing activities		(265,192)		99,853

Net cash used in financing activities						Net cash used in financing activities	(140,922)		(248,018)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	207		(3,293)		Effect of exchange rate changes on cash and cash equivalents	4,232		128

Net (decrease) increase in cash, cash equivalents and restricted cash		(29,824)		95,369
Net increase (decrease) in cash, cash equivalents and restricted cash						Net increase (decrease) in cash, cash equivalents and restricted cash	6,390		(7,333)
Cash, cash equivalents and restricted cash as of the beginning of the period	Cash, cash equivalents and restricted cash as of the beginning of the period	110,408		67,145		Cash, cash equivalents and restricted cash as of the beginning of the period	89,057		110,408
Cash, cash equivalents and restricted cash as of the end of the period	Cash, cash equivalents and restricted cash as of the end of the period	$	80,584	$	162,514	Cash, cash equivalents and restricted cash as of the end of the period	$	95,447	$	103,075
Supplemental disclosures of cash flow information:	Supplemental disclosures of cash flow information:					Supplemental disclosures of cash flow information:
Cash paid for interest	Cash paid for interest	$	28,787	$	35,425	Cash paid for interest	$	18,862	$	23,748
Cash paid for income taxes, net of refunds	Cash paid for income taxes, net of refunds	$	23,449	$	4,198	Cash paid for income taxes, net of refunds	$	17,191	$	11,883
Supplemental disclosures of non-cash investing and financing activities:	Supplemental disclosures of non-cash investing and financing activities:					Supplemental disclosures of non-cash investing and financing activities:

Leased assets obtained in exchange for new operating lease liabilities	Leased assets obtained in exchange for new operating lease liabilities	$	38,154	$	12,971	Leased assets obtained in exchange for new operating lease liabilities	$	26,415	$	28,261
Leased assets obtained in exchange for new finance lease liabilities	Leased assets obtained in exchange for new finance lease liabilities	$	1,229	$	1,263	Leased assets obtained in exchange for new finance lease liabilities	$	2,417	$	48
Increase (decrease) in liabilities from the acquisition of property, fixtures and equipment	Increase (decrease) in liabilities from the acquisition of property, fixtures and equipment	$	3,006	$	(7,174)	Increase (decrease) in liabilities from the acquisition of property, fixtures and equipment	$	2,545	$	(203)

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

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) ~~- Continued~~

1. Description of the Business and Basis of Presentation

Description of the Business - Bloomin’ Brands (“Bloomin’ Brands” or the “Company”) owns and operates casual, upscale casual and fine dining restaurants. The Company’s restaurant portfolio has 4 concepts: Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar. 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. GAAP”) for complete financial statements. In the opinion of the Company, all adjustments necessary for fair financial statement presentation for the periods presented have been included and are of a normal, recurring nature. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. 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 ~~27, 2020.~~26, 2021.

~~Recently Adopted Financial Accounting Standards~~ - On December 28, 2020, the Company adopted Accounting Standards Update (“ASU”) No. 2020-06, “Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity,” (“ASU No. 2020-06”) which removes the separation models for convertible debt with a cash conversion feature or convertible instruments with a beneficial conversion feature. ASU No. 2020-06 also requires the application of the if-converted method for calculating diluted earnings per share and the treasury stock method is no longer permitted for convertible instruments. The Company adopted ASU No. 2020-06 using the modified retrospective approach which resulted in a cumulative-effect adjustment that increased (decreased) the following Consolidated Balance Sheet accounts during the first quarter of 2021:

~~ADJUSTMENT~~

~~CONSOLIDATED BALANCE SHEET CLASSIFICATION~~

AMOUNT
(in millions)

~~Deferred tax impact of cumulative-effect adjustment~~

~~Deferred income tax assets, net~~

~~14.9~~

~~Debt discount reclassification~~

~~Long-term debt, net~~

~~59.9~~

~~Equity issuance costs reclassification~~

~~Long-term debt, net~~

~~(2.1)~~

~~Debt discount amortization reclassification, net of tax~~

~~Accumulated deficit~~

~~4.4~~

~~Reversal of separated equity component, net of tax~~

~~Additional paid-in capital~~

~~(47.3)~~

After adopting ASU No. 2020-06, the Company’s convertible senior notes due 2025 (the “2025 Notes”) are reflected entirely as a liability since the embedded conversion feature is no longer separately presented within stockholders’ equity. During 2020, the Company recognized debt discount amortization of $6.3 million within Interest expense, net related to its 2025 Notes.

In February 2021, the Company made an irrevocable election under the indenture to require the principal portion of its 2025 Notes to be settled in cash and any excess in shares. Following the irrevocable notice, only the amounts expected to be settled in excess of the principal are considered in diluted earnings per share under the if-converted method.

Recently Issued Financial Accounting Standards Not Yet Adopted - In November 2021, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance” (“ASU No. 2021-10”), which requires financial statement footnote disclosure regarding government assistance accounted for by applying a grant or contribution accounting model by analogy. ASU No. 2021-10 is effective for the Company for the fiscal year ending December 25, 2022. Upon adoption of ASU No. 2021-10 during the fourth quarter of 2022, the Company anticipates government assistance financial statement footnote disclosures within the 2022 Form 10-K, primarily in connection with employee retention credits provided under the Coronavirus, Aid, Relief and Economic Security (“CARES”) Act.

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

Reclassifications - The Company reclassified certain items in the accompanying consolidated financial statements for prior periods to be comparable with the classification for the current ~~period.~~period, including, but not limited to, presentation of certain items within the condensed consolidated statements of cash flows and certain notes to the consolidated financial statements. These reclassifications had no effect on previously reported net income.

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

2. ~~COVID-19 Charges~~

In March 2020, the Company temporarily closed all restaurant dining rooms in the U.S. to comply with state and local regulations in response to the COVID-19 pandemic (“COVID-19”). Following is a summary of charges recorded in connection with the COVID-19 pandemic for the period indicated (dollars in thousands):

~~CHARGES~~

~~CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) CLASSIFICATION~~

~~THIRTY-NINE WEEKS ENDED~~

~~SEPTEMBER 27, 2020~~

~~Inventory obsolescence and spoilage~~

~~Food and beverage costs~~

~~6,748~~

~~Compensation for idle employees (1)~~

~~Labor and other related~~

~~28,243~~

~~Other operating charges~~

~~Other restaurant operating~~

~~2,467~~

~~Lease guarantee contingent liabilities (2)~~

~~General and administrative~~

~~4,188~~

~~Allowance for expected credit losses (3)~~

~~General and administrative~~

~~3,334~~

~~Other charges~~

~~General and administrative~~

~~2,624~~

~~Right-of-use asset impairment (4)~~

~~Provision for impaired assets and restaurant closings~~

~~25,740~~

~~Fixed asset impairment (4)~~

~~Provision for impaired assets and restaurant closings~~

~~31,727~~

~~Goodwill and other impairment (5)~~

~~Provision for impaired assets and restaurant closings~~

~~3,096~~

~~108,167~~

~~________________~~

~~(1)Represents relief pay for hourly employees impacted by the closure of dining rooms, net of $14.4 million of employee retention tax credits earned.~~

~~(2)Represents additional contingent liabilities recorded for lease guarantees related to certain former restaurant locations now operated by franchisees or other third parties.~~

~~(3)Includes additional reserves to reflect an increase in expected credit losses, primarily related to franchise receivables.~~

~~(4)~~Includes impairments resulting from the remeasurement of assets utilizing projected future cash flows revised for then current economic conditions, restructuring charges and the closure of certain restaurants.

~~(5)Includes impairment of goodwill for the Company’s Hong Kong subsidiary.~~

3. Revenue Recognition

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
(dollars in thousands) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020
Revenues
Restaurant sales $ 996,718 $ 766,487 $ 3,031,396 $ 2,338,985
Franchise and other revenues
Franchise revenues 12,908 4,216 31,918 15,716
Other revenues (1) 837 557 11,988 3,355
Total Franchise and other revenues 13,745 4,773 43,906 19,071
Total revenues $ 1,010,463 $ 771,260 $ 3,075,302 $ 2,358,056


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
Revenues
Restaurant sales	$	1,108,918	$	1,055,227	$	2,232,493	$	2,034,678
Franchise and other revenues
Franchise revenues	12,596		12,221		26,002		19,010
Other revenues (1)	3,648		9,918		7,202		11,151
Total Franchise and other revenues	16,244		22,139		33,204		30,161
Total revenues	$	1,125,162	$	1,077,366	$	2,265,697	$	2,064,839

________________

(1)~~The~~During the thirteen and ~~thirty-nine~~twenty-six weeks ended ~~September 26,~~June 27, 2021, ~~include an adjustment~~the Company recognized $6.3 million of ~~$(3.2) million to reduce~~other revenues in connection with favorable court rulings in Brazil regarding the ~~Company’s initial recorded estimate~~calculation methodology and ~~net $3.1 million benefit from the recognition~~taxable base of ~~recoverable~~ Program of Social Integration (“PIS”) and Contribution for the Financing of Social Security (“COFINS”) ~~taxes, respectively, within other revenues in connection with favorable court rulings in Brazil regarding the calculation methodology and taxable base.~~taxes. The ~~net~~ amount recognized as a result of the favorable court rulings primarily represents refundable PIS and COFINS taxes for prior years, including accrued ~~interest, and will be recovered by offsetting future PIS and COFINS taxes due.~~interest.

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


	THIRTEEN WEEKS ENDED
	JUNE 26, 2022				JUNE 27, 2021
(dollars in thousands)	RESTAURANT SALES		FRANCHISE REVENUES		RESTAURANT SALES		FRANCHISE REVENUES
U.S.
Outback Steakhouse	$	573,563	$	8,156	$	579,096	$	8,418
Carrabba’s Italian Grill	170,190		797		171,408		665
Bonefish Grill	145,472		173		149,036		174
Fleming’s Prime Steakhouse & Wine Bar	93,933		—		88,101		—
Other	2,769		8		2,652		—
U.S. total	985,927		9,134		990,293		9,257
International
Outback Steakhouse Brazil	100,647		—		43,310		—
Other (1)	22,344		3,462		21,624		2,964
International total	122,991		3,462		64,934		2,964
Total	$	1,108,918	$	12,596	$	1,055,227	$	12,221

________________

(1)Includes Restaurant sales for Company-owned Outback Steakhouse restaurants outside of Brazil and Abbraccio restaurants in Brazil. Franchise revenues primarily includes revenues from franchised Outback Steakhouse restaurants.

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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


		THIRTEEN WEEKS ENDED									TWENTY-SIX WEEKS ENDED
		SEPTEMBER 26, 2021				SEPTEMBER 27, 2020					JUNE 26, 2022				JUNE 27, 2021
(dollars in thousands)	(dollars in thousands)	RESTAURANT SALES		FRANCHISE REVENUES		RESTAURANT SALES		FRANCHISE REVENUES		(dollars in thousands)	RESTAURANT SALES		FRANCHISE REVENUES		RESTAURANT SALES		FRANCHISE REVENUES
U.S.	U.S.									U.S.
Outback Steakhouse	Outback Steakhouse	$	523,142	$	9,335	$	443,286	$	1,422	Outback Steakhouse	$	1,168,956	$	16,615	$	1,126,291	$	11,374
Carrabba’s Italian Grill	Carrabba’s Italian Grill	159,147		482		124,019		359		Carrabba’s Italian Grill	345,818		1,458		329,094		1,282
Bonefish Grill	Bonefish Grill	134,603		169		100,410		44		Bonefish Grill	296,888		350		276,010		304
Fleming’s Prime Steakhouse & Wine Bar	Fleming’s Prime Steakhouse & Wine Bar	79,687		—		49,846		—		Fleming’s Prime Steakhouse & Wine Bar	191,595		—		154,412		—
Other	Other	2,211		3		1,845		—		Other	6,305		13		4,545		—
U.S. total	U.S. total	898,790		9,989		719,406		1,825		U.S. total	2,009,562		18,436		1,890,352		12,960
International	International									International
Outback Steakhouse Brazil	Outback Steakhouse Brazil	74,020		—		32,485		—		Outback Steakhouse Brazil	185,948		—		104,158		—
Other (1)	Other (1)	23,908		2,919		14,596		2,391		Other (1)	36,983		7,566		40,168		6,050
International total	International total	97,928		2,919		47,081		2,391		International total	222,931		7,566		144,326		6,050
Total	Total	$	996,718	$	12,908	$	766,487	$	4,216	Total	$	2,232,493	$	26,002	$	2,034,678	$	19,010

		THIRTY-NINE WEEKS ENDED
		SEPTEMBER 26, 2021				SEPTEMBER 27, 2020
(dollars in thousands)		RESTAURANT SALES		FRANCHISE REVENUES		RESTAURANT SALES		FRANCHISE REVENUES
U.S.
Outback Steakhouse		$	1,649,433	$	20,709	$	1,320,524	$	8,099
Carrabba’s Italian Grill		488,241		1,764		364,632		827
Bonefish Grill		410,613		473		299,226		184
Fleming’s Prime Steakhouse & Wine Bar		234,099		—		151,962		—
Other		6,756		3		4,718		—
U.S. total		2,789,142		22,949		2,141,062		9,110
International
Outback Steakhouse Brazil		178,178		—		148,078		—
Other (1)		64,076		8,969		49,845		6,606
International total		242,254		8,969		197,923		6,606
Total		$	3,031,396	$	31,918	$	2,338,985	$	15,716

________________

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


(dollars in thousands)	JUNE 26, 2022		DECEMBER 26, 2021
Other current assets, net
Deferred gift card sales commissions	$	12,338	$	17,793

Unearned revenue
Deferred gift card revenue	$	303,544	$	387,945
Deferred loyalty revenue	4,309		9,386
Deferred franchise fees - current	440		443
Other	1,570		1,021
Total unearned revenue	$	309,863	$	398,795

Other long-term liabilities, net
Deferred franchise fees - non-current	$	4,185	$	4,280

The following table is a rollforward of deferred gift card sales commissions for the periods indicated:


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
Balance, beginning of the period	$	13,033	$	13,502	$	17,793	$	19,300
Deferred gift card sales commissions amortization	(5,441)		(5,711)		(13,458)		(14,436)
Deferred gift card sales commissions capitalization	5,436		5,297		9,605		8,796
Other	(690)		(540)		(1,602)		(1,112)
Balance, end of the period	$	12,338	$	12,548	$	12,338	$	12,548

Table of Contents

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 26, 2021 DECEMBER 27, 2020
Other current assets, net
Deferred gift card sales commissions $ 10,832 $ 19,300
Unearned revenue
Deferred gift card revenue $ 274,204 $ 373,048
Deferred loyalty revenue 9,478 8,099
Deferred franchise fees - current 446 469
Total Unearned revenue $ 284,128 $ 381,616
Other long-term liabilities, net
Deferred franchise fees - non-current $ 4,332 $ 4,301

~~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 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020
Balance, beginning of period $ 12,548 $ 13,624 $ 19,300 $ 18,554
Deferred gift card sales commissions amortization (4,841) (3,961) (19,277) (15,553)
Deferred gift card sales commissions capitalization 3,698 3,068 12,494 10,534
Other (573) (146) (1,685) (950)
Balance, end of period $ 10,832 $ 12,585 $ 10,832 $ 12,585

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


		THIRTEEN WEEKS ENDED				THIRTY-NINE WEEKS ENDED					THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	(dollars in thousands)	SEPTEMBER 26, 2021		SEPTEMBER 27, 2020		SEPTEMBER 26, 2021		SEPTEMBER 27, 2020		(dollars in thousands)	JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
Balance, beginning of period		$	293,955	$	279,973	$	373,048	$	358,757
Balance, beginning of the period										Balance, beginning of the period	$	314,974	$	306,075	$	387,945	$	373,048
Gift card sales	Gift card sales	45,036		42,531		153,126		142,619		Gift card sales	65,174		63,921		115,454		108,090
Gift card redemptions	Gift card redemptions	(61,189)		(49,964)		(237,988)		(220,549)		Gift card redemptions	(72,428)		(71,859)		(189,050)		(176,799)
Gift card breakage	Gift card breakage	(3,598)		(2,599)		(13,982)		(10,886)		Gift card breakage	(4,176)		(4,182)		(10,805)		(10,384)
Balance, end of period		$	274,204	$	269,941	$	274,204	$	269,941
Balance, end of the period										Balance, end of the period	$	303,544	$	293,955	$	303,544	$	293,955

~~Table of Contents~~

~~BLOOMIN’ BRANDS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED) - Continued~~

4.3. Impairments and Exit Costs

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
(dollars in thousands) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020
Impairment losses
U.S. (1) $ 1,115 $ 332 $ 8,289 $ 55,045
International (1)(2) 28 — 180 3,468
Corporate (3) 19 32 257 6,193
Total impairment losses 1,162 364 8,726 64,706
Restaurant closure charges (benefits)
U.S. (1) 423 (418) 389 1,344
International (1) — — (153) 173
Total restaurant closure charges (benefits) 423 (418) 236 1,517
Provision for impaired assets and restaurant closings $ 1,585 $ (54) $ 8,962 $ 66,223

~~________________~~

~~(1)~~U.S. and international impairment and closure charges for the thirteen and thirty-nine weeks ended September 27, 2020 primarily relate to the COVID-19 pandemic, including charges related to the COVID-19 Restructuring discussed below. See Note 2 - ~~COVID-19 Charges~~ ~~for details regarding the impact of the COVID-19 pandemic on the Company’s financial results.~~

~~(2)Includes goodwill impairment charges of $2.0 million during the thirty-nine weeks ended September 27, 2020.~~

~~(3)Corporate impairment charges for the thirty-nine weeks ended September 27, 2020 primarily relate to transformational initiatives.~~


	THIRTEEN WEEKS ENDED		TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 27, 2021		JUNE 27, 2021
Impairment losses
U.S.	$	5,768	$	7,174
International	(555)		152
Corporate	209		238
Total impairment losses	5,422		7,564
Restaurant closure benefits
U.S.	(92)		(34)
International	(153)		(153)
Total restaurant closure benefits	(245)		(187)
Provision for impaired assets and restaurant closings	$	5,177	$	7,377

~~COVID-19 Restructuring -~~ During the thirty-nine weeks ended September 27, 2020, the Company recognized pre-tax asset impairments and closure charges in connection with the closure of 22 restaurants and from the update of certain cash flow assumptions, including lease renewal considerations (the “COVID-19 Restructuring”). Following is a summary of the COVID-19 Restructuring charges recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss) for the period indicated (dollars in thousands):

~~CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) CLASSIFICATION~~

~~THIRTY-NINE WEEKS ENDED~~

~~DESCRIPTION~~

~~SEPTEMBER 27, 2020~~

~~Property, fixtures and equipment impairments~~

~~Provision for impaired assets and restaurant closings~~

~~16,932~~

~~Lease right-of-use asset impairments and closing costs~~

~~Provision for impaired assets and restaurant closings~~

~~4,008~~

~~Severance and other expenses~~

~~General and administrative~~

~~1,021~~

~~21,961~~

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

Annual Goodwill and Intangible Asset Impairment Assessment - The Company performs its annual assessment for impairment of goodwill and other indefinite-lived intangible assets during its second fiscal quarter. The Company’s 2022 and 2021 ~~assessment was qualitative and its 2020 assessment was quantitative.~~assessments were qualitative. In connection with these assessments, the Company did 0t record any impairment charges.

~~Table of Contents~~

~~BLOOMIN’ BRANDS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED) - Continued~~

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


	~~THIRTY-NINE~~TWENTY-SIX WEEKS ENDED
(dollars in thousands)	~~SEPTEMBER~~JUNE 26, ~~2021~~2022
Balance, beginning of the period	$	~~12,879~~8,485

Cash payments	~~(3,861)~~(2,308)
Accretion	~~702~~304
Adjustments	~~(484)~~(323)
Balance, end of the period (1)	$	~~9,236~~6,158

________________

(1)As of ~~September~~June 26, ~~2021,~~2022, the Company had exit-related accruals ~~associated with~~related to certain closure and restructuring initiatives of ~~$3.1~~$1.6 million recorded in Accrued and other current liabilities and ~~$6.1~~$4.6 million recorded in Non-current operating lease liabilities on its Consolidated Balance Sheet.

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

4. (Loss) Earnings ~~(Loss)~~ Per Share

The dilutive effect of the 2025 Notes is calculated using the if-converted method which was required upon the Company’s adoption of ASU No. 2020-06. To the extent the Company has ability to settle its 2025 Notes in shares of its common stock, the principal and conversion spread on the 2025 Notes will have a dilutive impact on diluted earnings per share when the average market price of the Company’s common stock for a given period exceeds the conversion price of $11.89 per share of common stock. In February 2021, the Company provided the trustee of its convertible senior notes due in 2025 ~~Notes~~(the “2025 Notes”) notice of the Company’s irrevocable election to settle the principal portion of the 2025 Notes in cash and any excess in shares. As a result, subsequent to the election, only the amounts in excess of the principal amount are considered in diluted earnings per share. The amount of the 2025 Notes settled in shares of common stock will have a dilutive impact on diluted earnings per share ~~under~~when the ~~if-converted method.~~average market price of the Company’s common stock for a given period exceeds the conversion price, which was initially $11.89 per share of common stock.

In connection with the offering of the 2025 Notes, the Company entered into ~~the~~ ~~Convertible Note Hedge Transactions and Warrant Transactions~~ ~~described in Note 11 -~~ ~~Convertible Senior Notes.~~ ~~However, the~~ ~~Convertible Note Hedge Transactions~~ ~~are not considered when calculating dilutive shares given their anti-dilutive impact as an offset to dilution of shares underlying the 2025 Notes.~~ ~~The Warrant Transactions~~warrant transactions (the “Warrant Transactions”), which have a dilutive effect on the Company’s common stock to the extent the price of its common stock exceeds the ~~$16.64~~ strike price of the Warrant ~~Transactions.~~ ~~See Note 11 -~~ ~~Convertible Senior Notes~~ ~~for additional information regarding the 2025 Notes,~~ ~~Convertible Note Hedge~~ Transactions, ~~and~~ ~~Warrant Transactions~~. which was initially $16.64.

~~Table~~In connection with dividends paid during the twenty-six weeks ended June 26, 2022, the conversion price of ~~Contents~~

~~BLOOMIN’ BRANDS, INC.~~the 2025 Notes decreased to $11.74 per share of common stock and the strike price of the related warrants decreased to $16.43 per share of common stock.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED) - Continued~~

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
(in thousands, except per share data) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020
Net income (loss) attributable to Bloomin’ Brands $ 3,449 $ (17,637) $ 154,856 $ (144,504)
Redemption of preferred stock in excess of carrying value (1) — — — (3,496)
Net income (loss) attributable to common stockholders 3,449 (17,637) 154,856 (148,000)
Convertible senior notes if-converted method interest adjustment, net of tax (2) — — 460 —
Diluted net income (loss) attributable to common stockholders $ 3,449 $ (17,637) $ 155,316 $ (148,000)
Basic weighted average common shares outstanding 89,229 87,558 88,890 87,394
Effect of dilutive securities:
Stock options 864 — 913 —
Nonvested restricted stock units 286 — 380 —
Nonvested performance-based share units — — 31 —
Convertible senior notes (2)(3) 10,476 — 12,300 —
Warrants (3) 6,928 — 6,896 —
Diluted weighted average common shares outstanding 107,783 87,558 109,410 87,394
Basic earnings (loss) per share attributable to common stockholders $ 0.04 $ (0.20) $ 1.74 $ (1.69)
Diluted earnings (loss) per share attributable to common stockholders $ 0.03 $ (0.20) $ 1.42 $ (1.69)


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(in thousands, except per share data)	JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
Net (loss) income attributable to Bloomin’ Brands	$	(63,635)	$	82,545	$	11,876	$	151,407


Convertible senior notes if-converted method interest adjustment, net of tax (1)	—		—		—		691
Diluted net (loss) income attributable to Bloomin’ Brands	$	(63,635)	$	82,545	$	11,876	$	152,098

Basic weighted average common shares outstanding	88,898		89,075		89,127		88,721

Effect of dilutive securities:
Stock options	—		1,165		305		937
Nonvested restricted stock units	—		351		192		427
Nonvested performance-based share units	—		—		143		47
Convertible senior notes (1)(2)	—		11,231		8,253		13,212
Warrants (2)	—		7,983		4,025		6,879
Diluted weighted average common shares outstanding	88,898		109,805		102,045		110,223

Basic (loss) earnings per share	$	(0.72)	$	0.93	$	0.13	$	1.71
Diluted (loss) earnings per share	$	(0.72)	$	0.75	$	0.12	$	1.38

________________

(1)Consideration paid in excess of carrying value for the redemption of its Abbraccio preferred stock is considered a deemed dividend and, for purposes of calculating earnings per share, reduces net income attributable to common stockholders for the thirty-nine weeks ended September 27, 2020. See Note 13 - ~~Stockholders’ Equity~~ ~~for additional details.~~

~~(2)~~Adjustment for interest related to the 2025 Notes weighted for the portion of the period prior to the Company’s election under the 2025 Notes indenture to settle the principal portion of ~~its~~the 2025 Notes in cash. Effective with the Company’s election, there will be no further numerator adjustments for interest or denominator adjustments for shares required to settle the principal portion.

~~(3)~~(2)During the thirteen weeks ended June 26, 2022, the Company repurchased $125.0 million of the 2025 Notes and retired the corresponding portion of the related warrants. See Note 8 - Convertible Senior Notes for additional details. Due to the Company’s net loss during the thirteen ~~and thirty-nine~~ weeks ended ~~September 27, 2020,~~June 26, 2022, dilutive excess shares ~~if applicable,~~ and warrants were excluded from the computation of diluted earnings per share as their effect would be antidilutive.

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
(shares in thousands) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020
Stock options — 5,381 455 5,133
Nonvested restricted stock units 77 797 53 813
Nonvested performance-based share units 376 628 424 595

1513

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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


	THIRTEEN WEEKS ENDED		TWENTY-SIX WEEKS ENDED
(shares in thousands)	JUNE 26, 2022	JUNE 27, 2021	JUNE 26, 2022	JUNE 27, 2021
Stock options	2,563	—	1,870	682
Nonvested restricted stock units	485	9	299	41
Nonvested performance-based share units	596	465	475	448

5. Stock-based Compensation Plans

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
(dollars in thousands) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020
Stock options $ 495 $ 992 $ 1,829 $ 2,862
Restricted stock units 2,043 2,303 6,373 6,326
Performance-based share units (1) 3,026 (588) 11,813 1,804
$ 5,564 $ 2,707 $ 20,015 $ 10,992


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
Performance-based share units (1)	$	2,840	$	7,318	$	5,459	$	8,787
Restricted stock units	2,027		1,964		3,837		4,330
Stock options	55		469		432		1,334

	$	4,922	$	9,751	$	9,728	$	14,451

________________

(1)The ~~thirty-nine~~thirteen and twenty-six weeks ended ~~September 26,~~June 27, 2021 includes a cumulative life-to-date adjustment for PSUs granted in fiscal years 2019, 2020 and 2021 based on revised Company performance projections of performance criteria set forth in the award agreements.

In February ~~2021,~~2022, the Company granted ~~0.3~~0.5 million performance-based share units (“PSUs”)~~. These PSUs maintain a three-year cliff vesting period and the underlying adjusted diluted earnings per share performance metric can range from zero~~ subject to ~~200% of the annual target grant. The grants additionally include~~final payout modification by a Relative Total Shareholder Return (“Relative TSR”) modifier. This Relative TSR modifier tocan adjust the final payout outcome ~~which can adjust the payout~~ by 75%, 100% or 125% of the achieved performance metric, with the overall payout capped at 200% of the annual target grant. ~~The Relative TSR is measured by comparing the Company’s Relative TSR to that of the constituents of the S&P 1500 Restaurants index. The~~These PSUs have a three-year cliff vesting period and their fair value ~~of PSUs granted~~ was estimated using the Monte Carlo simulation model. The Monte Carlo simulation model utilizes multiple input variables to estimate the probability that the market conditions will be achieved and was applied to the trading price of the Company’s common stock on the date of the grant.

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


	~~THIRTY-NINE WEEKS ENDED~~
	~~SEPTEMBER 26, 2021~~
~~Assumptions:~~
~~Risk-free interest rate (1)~~	~~0.20~~		%


~~Volatility (2)~~	~~48.45~~		%

~~Grant date fair value per unit (3)~~	$	~~29.73~~


	TWENTY-SIX WEEKS ENDED
	JUNE 26, 2022			JUNE 27, 2021
Assumptions:
Risk-free interest rate (1)	1.64		%	0.20		%
Dividend yield (2)	2.31		%	—		%

Volatility (3)	49.11		%	48.45		%

Grant date fair value per unit (4)	$	26.10		$	29.73

________________

(1)Risk-free interest rate is the U.S. Treasury yield curve in effect as of the grant date for the performance period of the unit.

(2)Dividend yield is the level of dividends expected to be paid on the Company’s common stock over the expected term.

(3)Based on the historical volatility of the Company’s stock over the last seven years.

~~(3)~~(4)Represents a ~~14.3%~~ premium above the per share value of the Company’s common stock for the Relative TSR modifier as of the grant ~~date.~~

~~The following represents unrecognized stock-based compensation expense~~date of 7.9% and 14.3% for grants during the ~~remaining weighted-average vesting period as of September 26, 2021:~~

UNRECOGNIZED COMPENSATION EXPENSE
(dollars in thousands) REMAINING WEIGHTED-AVERAGE VESTING PERIOD (in years)
Stock options $ 1,061 0.7
Restricted stock units $ 11,663 1.9
Performance-based share units $ 20,862 1.5

~~Table of Contents~~

~~BLOOMIN’ BRANDS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED) - Continued~~

~~7. Other Current Assets, Net~~

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

(dollars in thousands) SEPTEMBER 26, 2021 DECEMBER 27, 2020
Prepaid expenses $ 22,944 $ 12,148
Accounts receivable - gift cards, net (1) 8,491 76,808
Accounts receivable - vendors, net (1) 8,568 8,886
Accounts receivable - franchisees, net (1) 1,658 1,007
Accounts receivable - other, net (1) 15,775 16,782
Deferred gift card sales commissions 10,832 19,300
Assets held for sale 1,374 3,831
Other current assets, net 18,000 12,756
$ 87,642 $ 151,518

~~________________~~

~~(1)See Note 17 -~~ ~~Allowance for Expected Credit Losses~~ ~~for a rollforward of the related allowance for expected credit losses.~~

~~8. Other Assets, Net~~

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

(dollars in thousands) SEPTEMBER 26, 2021 DECEMBER 27, 2020
Company-owned life insurance (1) $ 33,799 $ 44,814
Deferred debt issuance costs (2) 6,200 4,694
Liquor licenses 23,296 24,250
Other assets 18,824 18,868
$ 82,119 $ 92,626

~~________________~~

~~(1)During the thirty-nine~~twenty-six weeks ended ~~September~~June 26, 2022 and June 27, 2021, ~~the Company withdrew $9.1 million from its Company-owned life insurance policies to pay deferred compensation obligations.~~

~~(2)Net of accumulated amortization of $8.2 million and $9.0 million as of September 26, 2021 and December 27, 2020,~~ respectively.

~~9. Accrued and Other Current Liabilities~~

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

(dollars in thousands) SEPTEMBER 26, 2021 DECEMBER 27, 2020
Accrued rent and current operating lease liabilities $ 184,240 $ 192,369
Accrued payroll and other compensation (1) 126,306 79,291
Accrued insurance 21,412 20,648
Other current liabilities (2) 112,633 96,013
$ 444,591 $ 388,321

~~________________~~

~~(1)~~During the thirty-nine weeks ended September 26, 2021, the Company reclassified $27.3 million of payroll taxes deferred under the Coronavirus, Aid, Relief and Economic Security Act (“CARES Act”) to current.

~~(2)During the thirty-nine weeks ended September 26, 2021, other current liabilities increased primarily due to an $8.7 million increase in accrued interest related to the 2029 Notes. See Note 10 -~~ ~~Long-term Debt, Net~~ ~~for details regarding the 2029 Notes.~~

~~Table of Contents~~

~~BLOOMIN’ BRANDS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED) - Continued~~

~~10. Long-term Debt, Net~~

~~Following is a summary of outstanding long-term debt, as of the periods indicated:~~

SEPTEMBER 26, 2021 DECEMBER 27, 2020
(dollars in thousands) OUTSTANDING BALANCE INTEREST RATE OUTSTANDING BALANCE INTEREST RATE
Senior Secured Credit Facility:
Term loan A (1) $ 197,500 2.58 % $ —
Revolving credit facility (1) 124,000 2.69 % —
Total Senior Secured Credit Facility 321,500 —
Former Credit Facility:
Term loan A (1) — 425,000 2.88 %
Revolving credit facility (1) — 447,000 2.88 %
Total Former Credit Facility — 872,000
2025 Notes (2) 230,000 5.00 % 230,000 5.00 %
2029 Notes 300,000 5.13 % —
Finance lease liabilities 2,704 2,405
Less: unamortized debt discount and issuance costs (3) (14,871) (67,704)
Less: finance lease interest (182) (221)
Total debt, net 839,151 1,036,480
Less: current portion of long-term debt (11,086) (38,710)
Long-term debt, net $ 828,065 $ 997,770

~~________________~~

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

~~(2)See Note 11 -~~ ~~Convertible Senior Notes~~ ~~for details regarding the 2025 Notes and related hedge and warrant transactions.~~

~~(3)~~In connection with the adoption of ASU No. 2020-06, debt discount of $59.9 million related to the 2025 Notes was de-recognized and $2.1 million of equity issuance costs were reclassified as debt issuance costs during the thirty-nine weeks ended September 26, 2021.

~~2029 Notes~~ - On April 16, 2021, the Company and its wholly-owned subsidiary OSI Restaurant Partners, LLC (“OSI”), as co-issuers, issued $300.0 million aggregate principal amount of senior unsecured notes due 2029 (the “2029 Notes”).

The 2029 Notes were issued pursuant to an Indenture, dated April 16, 2021 (the “Indenture”), by and among the Company, the guarantors named therein, and Wells Fargo Bank, National Association, as trustee. The 2029 Notes are guaranteed by each of the Company’s existing and future domestic restricted subsidiaries (other than OSI) that are guarantors or borrowers under its Senior Secured Credit Facility (as defined below) or certain other indebtedness. The 2029 Notes mature on April 15, 2029, unless earlier redeemed or purchased by the Company. The 2029 Notes bear cash interest at an annual rate of 5.125% payable semi-annually in arrears on April 15 and October 15 of each year, beginning on October 15, 2021.

The Company may redeem some or all of the 2029 Notes at any time on or after April 15, 2024, at the redemption prices set forth in the Indenture, plus accrued and unpaid interest. The Company may also redeem up to 40% of the 2029 Notes in an amount not greater than the proceeds of certain equity offerings completed before April 15, 2024, at a redemption price equal to 105.125% of the principal amount thereof, plus accrued and unpaid interest. In addition, at any time prior to April 15, 2024, the Company may redeem some or all of the 2029 Notes at a price equal to 100% of the principal amount, plus a make-whole premium, plus accrued and unpaid interest.

The Indenture contains restrictive covenants that limit the ability of the Company and its restricted subsidiaries to, among other things, incur additional indebtedness or issue certain preferred stock; pay dividends, redeem stock or

1814

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

~~make other distributions; make certain investments; create restrictions on~~The following represents unrecognized stock-based compensation expense and the ~~ability~~remaining weighted average vesting period as of the Company’s restricted subsidiaries to pay dividends or make other payments to the Company; create certain liens; transfer or sell certain assets; merge or consolidate; enter into certain transactions with the Company’s affiliates; and designate subsidiaries as unrestricted subsidiaries. These covenants are subject to a number of exceptions and qualifications as set forth in the Indenture.June 26, 2022:


	UNRECOGNIZED COMPENSATION EXPENSE (dollars in thousands)		REMAINING WEIGHTED AVERAGE VESTING PERIOD (in years)
Performance-based share units	$	18,045	1.7
Restricted stock units	$	11,342	1.9

The Indenture contains customary events of default, including, without limitation, failure to make required payments, failure to comply with certain agreements or covenants, cross-acceleration to certain other indebtedness in excess of specified amounts, certain events of bankruptcy and insolvency, and failure to pay certain judgments.

6. Other Current Assets, Net

~~The~~Other current assets, net, proceeds from the 2029 Notes offering were approximately $294.5 million, after deducting the initial purchaser’s discount and the Company’s offering expenses. The net proceeds were used to repay a portionconsisted of the ~~Company’s outstanding Term loan A and revolving credit facility in conjunction with~~following as of the ~~refinancing of its Former Credit Facility.~~periods indicated:


(dollars in thousands)	JUNE 26, 2022		DECEMBER 26, 2021
Prepaid expenses	$	28,000	$	21,194
Accounts receivable - gift cards, net	15,575		91,248
Accounts receivable - vendors, net	12,284		11,793
Accounts receivable - franchisees, net	1,720		1,701
Accounts receivable - other, net	19,184		18,353
Deferred gift card sales commissions	12,338		17,793

Company-owned life insurance policies	21,501		17,244
Other current assets, net	6,395		5,297
	$	116,997	$	184,623

7. Long-term Debt, Net

~~Second~~

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


	JUNE 26, 2022				DECEMBER 26, 2021
(dollars in thousands)	OUTSTANDING BALANCE		INTEREST RATE		OUTSTANDING BALANCE		INTEREST RATE
Senior Secured Credit Facility:
Term loan A (1)	$	—			$	195,000	1.60	%
Revolving credit facility (2)	400,000		2.74	%	80,000		3.75	%
Total Senior Secured Credit Facility	400,000				275,000




2025 Notes (3)	105,000		5.00	%	230,000		5.00	%
2029 Notes	300,000		5.13	%	300,000		5.13	%
Finance lease liabilities	4,228				2,376

Less: unamortized debt discount and issuance costs (4)	(7,176)				(14,157)
Less: finance lease interest	(319)				(154)
Total debt, net	801,733				793,065
Less: current portion of long-term debt	(1,511)				(10,958)
Long-term debt, net	$	800,222			$	782,107

________________

(1)Interest rate represents the weighted average interest rate as of December 26, 2021.

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

(3)During the thirteen weeks ended June 26, 2022, the Company repurchased $125.0 million of the 2025 Notes. See Note 8 - Convertible Senior Notes for additional details.

(4)In connection with the Amended ~~and Restated~~ Credit Agreement and the partial repurchase of the 2025 Notes, $5.7 million of debt issuance costs were written off during the thirteen weeks ended June 26, 2022. See Note 8 - Convertible Senior Notes for additional details.

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

Credit Agreement Amendment - On April 16, 2021, the Company and its wholly-owned subsidiary OSI Restaurant Partners, LLC (“OSI”), as co-borrowers, entered into the Second Amended and Restated Credit Agreement (the ~~“Second Amended and Restated Credit~~“Credit Agreement”), which provides for senior secured financing of up to $1.0 billion consisting of a $200.0 million Term loan A and an $800.0 million revolving credit facility (the “Senior Secured Credit Facility”)~~. The Senior Secured Credit Facility matures~~, maturing on April 16, ~~2026 and replaced the Company’s prior senior secured financing of up to $1.5 billion (the “Former Credit Facility”).~~2026.

~~The commitments under~~On April 26, 2022, the ~~Senior Secured Credit Facility may be increased in an aggregate principal amount of up to: (i) $425.0 million or (ii) at~~Company and OSI entered into the ~~Company’s option, up~~First Amendment to ~~an unlimited amount of incremental facilities, so long as the Consolidated Senior Secured Net Leverage Ratio (“CSSNLR”), as defined in~~ the Second Amended and Restated Credit Agreement ~~is no more than 3.00 to 1.00 as~~and Incremental Amendment (the “Amended Credit Agreement”), which included an increase of the ~~last day~~Company’s existing revolving credit facility from $800.0 million to $1.0 billion and a transition from London Inter-Bank Offered Rate (“LIBOR”) to Secured Overnight Financing Rate (“SOFR”) as the benchmark rate for purposes of calculating interest under the Senior Secured Credit Facility. At closing, an incremental $192.5 million was drawn on the revolving credit facility to fully repay the outstanding balance of Term loan A. The total indebtedness of the ~~most recent period~~Company remained unchanged as a result of ~~four consecutive fiscal quarters ended.~~the Amended Credit Agreement.

~~The~~Under the Amended Credit Agreement, the Company may elect an interest rate at each reset period based on the Base Rate or ~~the Eurocurrency Rate,~~Adjusted Term SOFR, plus an applicable spread. The Base Rate option is the highest of: (i) the prime rate of Wells Fargo Bank, National Association, (ii) the federal funds effective rate plus 0.5 of 1.0% or (iii) the ~~Eurocurrency rate~~Adjusted Term SOFR with a one-month interest period plus 1.0% (the “Base Rate”). The ~~Eurocurrency Rate~~Adjusted Term SOFR option is the ~~seven,~~ 30, ~~60,~~ 90 or 180-day ~~Eurocurrency rate,~~SOFR, plus a term SOFR adjustment of 0.10%, subject to a 0% floor (the ~~“Eurocurrency Rate”~~“Adjusted Term SOFR”). The interest ~~rates~~rate spreads are as follows:


	BASE RATE ELECTION	~~EUROCURRENCY RATE~~ADJUSTED TERM SOFR ELECTION
~~Term loan A and revolving~~Revolving credit facility	50 to 150 basis points over the Base Rate	150 to 250 basis points over the ~~Eurocurrency Rate~~Adjusted Term SOFR

~~Fees on letters~~The transition to SOFR did not materially impact the interest rate applied to the Company’s borrowings. No other material changes were made to the terms of ~~credit and daily unused availability under~~ the ~~revolving credit facility are 150 to 250 basis points and 25 to 40 basis points, respectively.~~

~~The following is a summary of required quarterly amortization payments for the Term loan A (dollars in thousands):~~


~~SCHEDULED QUARTERLY PAYMENT DATES~~	~~TERM LOAN A~~
~~December 26, 2021 through June 30, 2024~~	$	~~2,500~~
~~September 29, 2024 through June 29, 2025~~	$	~~3,750~~
~~September 28, 2025 and December 28, 2025~~	$	~~5,000~~

The Senior Secured Credit Facility contains mandatory prepayment requirements for the Term loan A, including the requirement that the Company prepay outstanding amounts under these loans with 50% of its annual excess cash flow, as defined in the Second Amended and RestatedCompany’s Credit Agreement ~~commencing with~~as a result of the ~~fiscal year ending~~

~~Table of Contents~~

~~BLOOMIN’ BRANDS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED) - Continued~~

~~December 25, 2022. The amount of outstanding loans required to be prepaid in accordance with the debt covenants may vary based on the Company’s CSSNLR and year end results.~~

Total Net Leverage Ratio (“TNLR”) is the ratio of Consolidated Total Debt (Current portion of long-term debt and Long-term debt, net of cash, excluding the 2025 Notes) to Consolidated EBITDA (earnings before interest, taxes, depreciation and amortization and certain other adjustments as defined in the Second Amended ~~and Restated~~ Credit Agreement). The Second Amended and Restated Credit Agreement requires a TNLR not to exceed 4.50 to 1.00. Seasonally annualized Consolidated EBITDA for the quarterly period ended September 26, 2021 was calculated as Consolidated EBITDA for the three consecutive quarters ending September 26, 2021 divided by 77.0%.

The Second Amended and Restated Credit Agreement limits, subject to certain exceptions, the Company’s ability and the ability of its subsidiaries to: incur additional indebtedness; make significant payments; sell assets; pay dividends and other restricted payments; make certain investments; acquire certain assets; effect mergers and similar transactions; and effect certain other transactions with affiliates. The Company is also limited to $200.0 million of aggregate capital expenditures during the year ended December 26, 2021. The Second Amended and Restated Credit Agreement also prohibited the Company from paying certain dividends and making certain restricted payments and acquisitions until the Company was in compliance with its TNLR covenant for the period ended September 26, 2021.Agreement.

As of ~~September~~June 26, ~~2021~~2022 and December ~~27, 2020,~~26, 2021, the Company was in compliance with its debt covenants.

Following is a summary of principal payments of the Company’s total consolidated debt outstanding as of the period indicated:


(dollars in thousands)	~~SEPTEMBER~~JUNE 26, ~~2021~~2022
Year 1	$	~~11,110~~1,543
Year 2	~~10,757~~1,389
Year 3	~~11,826~~105,770
Year 4	~~246,424~~400,306
Year 5	~~274,087~~176
Thereafter	~~300,000~~300,044
Total payments	~~854,204~~809,228
Less: unamortized debt discount and issuance costs	~~(14,871)~~(7,176)
Less: finance lease interest	~~(182)~~(319)
Total principal payments	$	~~839,151~~801,733

~~Deferred Financing Fees -~~ During the thirty-nine weeks ended September 26, 2021, the Company deferred $5.5 million and $5.9 million of financing costs incurred in connection with the 2029 Notes and Second Amended Credit Agreement, respectively. Deferred financing fees of $3.7 million associated with the revolving credit facility portion of the Second Amended Credit Agreement were recorded in Other assets, net and all other deferred financing fees were recorded in Long-term debt, net.

~~11.~~8. Convertible Senior Notes

2025 Notes - InOn May ~~2020,~~25, 2022, the Company ~~completed a $230.0~~entered into exchange agreements (the “Exchange Agreements”) with certain holders (the “Noteholders”) of the 2025 Notes. The Noteholders agreed to exchange $125.0 million ~~principal amount private offering of 5.00% convertible senior notes due~~ in 2025. The 2025 Notes are governed by the terms of an indenture between the Company and Wells Fargo Bank, National Association, as the Trustee. The 2025 Notes mature on May 1, 2025, unless earlier converted, redeemed or purchased by the Company. The 2025 Notes bear cash interest at an annual rate of 5.00%, payable semi-annually in arrears on May 1 and November 1 of each year. Net proceeds from the

2016

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

aggregate principal amount of the Company’s outstanding 2025 Notes ~~offering were~~for $196.9 million in cash, plus accrued interest, and approximately ~~$221.6~~2.3 million ~~after deducting the initial purchaser’s discounts and commissions and~~shares of the Company’s ~~offering expenses.~~common stock (the “2025 Notes Partial Repurchase”). Under the Exchange Agreements, the total amount of cash paid and number of shares of common stock issued by the Company were based upon the volume-weighted average price per share of the Company’s common stock during a ten-trading day averaging period ending on June 14, 2022. Upon entering into the Exchange Agreements, the conversion feature related to the 2025 Notes repurchased, as well as the settlements of the related convertible senior note hedges and warrants, were subject to derivative accounting. In connection with the 2025 Notes Partial Repurchase, the Company recognized a loss on extinguishment of debt of $104.7 million and a loss on fair value adjustment of derivatives, net of $17.7 million, and recorded a $48.5 million increase to Additional paid-in capital during the thirteen weeks ended June 26, 2022.

The initial conversion rate applicable to the 2025 Notes iswas 84.122 shares of common stock per $1,000 principal amount of 2025 Notes, or a total of approximately 19.348 million shares for the total $230.0 million principal amount. This initial conversion rate iswas equivalent to an initial conversion price of approximately $11.89 per share. ~~The conversion rate is subject to adjustment upon the occurrence of certain specified events.~~

Prior to the close of business on the business day immediately preceding November 1, 2024, holders may convert all or a portion of their 2025 Notes under the following circumstances: (i) during any calendar quarter commencing after the calendar quarter ending on June 30, 2020, if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for each of at least 20 trading daysIn connection with dividends paid during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (ii) during the 5 consecutive business days immediately after any 5 consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of 2025 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of the Company’s common stock andtwenty-six weeks ended June 26, 2022, the conversion rate ~~on each such trading day; (iii) upon~~for the ~~occurrence of specified corporate events or distributions on the Company’s common stock; (iv) if the Company calls the~~remaining 2025 Notes ~~for redemption, and (v) at any time from, and including November 1, 2024 until the close~~decreased to approximately $11.74 per share, which represents 85.185 shares of ~~business on the second scheduled trading day immediately before the maturity date.~~

~~The 2025 Notes will be redeemable by the Company, in whole or in part, at the Company’s option at any time, and from time to time, on or after May 1, 2023 and on or before the 40~~th ~~scheduled trading day immediately before the maturity date, at a cash redemption price equal to the~~common stock per $1,000 principal amount of the 2025 Notes, ~~to be redeemed, plus accrued~~or a total of approximately 8.944 million shares.

The following table includes the outstanding principal amount and unpaid interest, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on: (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such notice. In addition, calling anycarrying value of the 2025 Notes ~~for redemption will constitute~~as of the periods indicated:


(dollars in thousands)	JUNE 26, 2022		DECEMBER 26, 2021
Long-term debt, net
Principal	$	105,000	$	230,000
Less: debt issuance costs (1)	(2,321)		(5,898)
Net carrying amount	$	102,679	$	224,102

________________

(1)Debt issuance costs are amortized to Interest expense, net using the effective interest method over the 2025 Notes’ expected life. During the thirteen weeks ended June 26, 2022, the Company wrote off $2.8 million of debt issuance costs as a ~~make-whole fundamental change with respect to that note, in which case the conversion rate applicable to the conversion~~result of the 2025 Notes ~~will be increased in certain circumstances if it is converted after it is called for redemption.~~Partial Repurchase.

IfFollowing is a ~~fundamental change occurs prior to the maturity date, holders may require the Company to repurchase all or a portion~~summary of ~~their~~ ~~2025 Notes~~interest expense for ~~cash at a price equal to 100% of the principal amount of~~ the 2025 Notes, by component, for the periods indicated:


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
Coupon interest	$	2,597	$	2,875	$	5,472	$	5,750
Debt issuance cost amortization	370		386		774		767
Total interest expense (1)	$	2,967	$	3,261	$	6,246	$	6,517

________________

(1) ~~to be repurchased, plus accrued and unpaid interest. Holders of~~ ~~2025 Notes~~ ~~who convert their~~ ~~2025 Notes~~ ~~in connection with a notice of a redemption or a make-whole fundamental change may be entitled to a premium in the form of an increase in the conversion~~The effective rate of the 2025 Notes over their expected life is 5.85%.

Based on the daily closing prices of the Company’s stock during the quarter ended June 26, 2022, the remaining holders of the 2025 Notes are eligible to convert their 2025 Notes during the third quarter of 2022.

Convertible Note Hedge and Warrant Transactions - In connection with the 2025 Notes Partial Repurchase, the Company entered into partial unwind agreements with certain financial institutions relating to a portion of the convertible note hedge transactions (the “Note Hedge Early Termination Agreements”) and a portion of the Warrant Transactions (the “Warrant Early Termination Agreements”) that were previously entered into by the Company in connection with the issuance of the 2025 Notes. Upon settlement, the Company received $131.9 million for the Note Hedge Early Termination Agreements and paid $114.8 million for the Warrant Early Termination Agreements during the thirteen weeks ended June 26, 2022. In connection with the Note Hedge Early Termination Agreements and the Warrant Early Termination Agreements the Company recorded a $113.0 million increase and a $97.6 million decrease, respectively, to Additional paid-in capital during the thirteen weeks ended June 26, 2022.

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

~~The following table includes the outstanding principal amount and carrying value of the 2025 Notes as of the periods indicated:~~

(dollars in thousands) SEPTEMBER 26, 2021 DECEMBER 27, 2020
Long-term debt, net
Principal $ 230,000 $ 230,000
Less: debt discount (1) — (59,862)
Less: debt issuance costs (1)(2) (6,296) (5,427)
Net carrying amount $ 223,704 $ 164,711
Equity component (1) $ — $ 64,367

~~________________~~

~~(1)~~In connection with the adoption of ASU No. 2020-06, debt discount and the equity component of the 2025 Notes were de-recognized and $2.1 million of issuance costs that were previously allocated to the equity component were reclassified as debt issuance costs during the thirty-nine weeks ended September 26, 2021.

~~(2)Debt issuance costs are amortized to Interest expense, net using the effective interest method over the 2025 Notes’ expected life.~~

~~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 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020
Coupon interest $ 2,875 $ 2,875 $ 8,625 $ 4,568
Deferred discount amortization — 2,407 — 3,786
Deferred issuance cost amortization 392 215 1,159 343
Total interest expense (1) $ 3,267 $ 5,497 $ 9,784 $ 8,697

~~________________~~

~~(1)~~The ~~effective rate of the 2025 Notes over their expected life was~~ ~~5.85% for the thirteen and thirty-nine weeks ended September 26, 2021 and 13.73% for the~~ ~~thirteen and thirty-nine weeks ended September 27, 2020.~~

Based on the daily closing prices of the Company’s stock during the quarter ended September 26, 2021, holders of the 2025 Notes are eligible to convert their 2025 Notes during the fourth quarter of 2021. In February 2021, the Company provided the trustee of ~~the~~ ~~2025 Notes notice of its irrevocable election under the 2025 Notes indenture to settle the principal portion of~~ ~~the~~ ~~2025 Notes upon conversion in cash and any excess in shares.~~

~~Convertible Note Hedge and Warrant Transactions~~ ~~- In connection with the offering of the~~ ~~2025 Notes, the Company entered into convertible note hedge transactions (the “Convertible Note Hedge Transactions”) with certain of the initial purchasers of the~~ ~~2025 Notes~~ and/or their respective affiliates and other financial institutions (in this capacity, the “Hedge Counterparties”). Concurrently with the Company’s entry into the Convertible Note Hedge Transactions, the Company also entered into separate, warrant transactions with the Hedge Counterparties collectively relating to the same number of shares of the Company’s common stock, subject to customary anti-dilution adjustments, and for which the Company received proceeds that partially offset the cost of entering into the Convertible Note Hedge Transactions (the “Warrant Transactions”).

~~The Convertible Note Hedge Transactions cover, subject to customary anti-dilution adjustments, the number of shares of the Company’s common stock that initially underlie the~~ ~~2025 Notes, and are expected generally to reduce the potential equity dilution in excess of the principal amount due upon conversion of the~~ ~~2025 Notes. The~~remaining Warrant Transactions have a dilutive effect on the Company’s common stock to the extent that the price of its common stock exceeds the strike price of the Warrant Transactions. The strike price iswas initially $16.64 per share and is subject to certain adjustments under the terms of the Warrant Transactions. In connection with dividends paid during the twenty-six weeks ended June 26, 2022, the strike price for the remaining Warrant Transactions decreased to $16.43.

9. Other Long-term Liabilities, Net

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


(dollars in thousands)	JUNE 26, 2022		DECEMBER 26, 2021
Accrued insurance liability	$	29,281	$	31,517

Deferred payroll tax liabilities (1)	—		27,302
Executive management deferred compensation obligations	19,098		23,543
Other long-term liabilities	40,111		42,880
	$	88,490	$	125,242

_______________

(1)During the twenty-six weeks ended June 26, 2022, the Company reclassified $27.3 million of payroll taxes deferred under the CARES Act to current.

10. Stockholders’ Equity

Share Repurchases - On February 8, 2022, the Company’s Board of Directors (the “Board”) approved a share repurchase program (the “2022 Share Repurchase Program”) under which the Company was authorized to repurchase up to $125.0 million of its outstanding common stock. The 2022 Share Repurchase Program will expire on August 9, 2023. As of June 26, 2022, $77.5 million remained available for repurchase under the 2022 Share Repurchase Program. Following is a summary of the shares repurchased under the 2022 Share Repurchase Program during fiscal year 2022:


(in thousands, except per share data)	NUMBER OF SHARES	AVERAGE REPURCHASE PRICE PER SHARE		AMOUNT
First fiscal quarter	551	$	21.26	$	11,702
Second fiscal quarter	1,761	$	20.30	35,749
Total common stock repurchases (1)	2,312	$	20.53	$	47,451

________________

(1)Subsequent to June 26, 2022, the Company repurchased 854 thousand shares of its common stock for $14.9 million under a Rule 10b5-1 plan through July 28, 2022.

Dividends - The ~~Convertible Note Hedge Transactions are exercisable upon conversion~~Company declared and paid dividends per share during fiscal year 2022 as follows:




(dollars in thousands, except per share data)	DIVIDENDS PER SHARE		AMOUNT
First fiscal quarter	$	0.14	$	12,559
Second fiscal quarter	0.14		12,418


Total cash dividends declared and paid	$	0.28	$	24,977

In July 2022, the Board declared a quarterly cash dividend of $0.14 per share, payable on August 24, 2022 to shareholders of record at the ~~2025 Notes. The Convertible Note Hedge Transactions expire upon maturity~~close of ~~the~~ ~~2025 Notes. The Warrant Transactions are exercisable~~business on ~~the expiration dates included in the related forms of confirmation.~~August 10, 2022.

2218

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

~~12. Other Long-term Liabilities, Net~~

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

(dollars in thousands) SEPTEMBER 26, 2021 DECEMBER 27, 2020
Accrued insurance liability $ 31,422 $ 32,128
Chef and Restaurant Managing Partner deferred compensation obligations 18,413 32,306
Deferred payroll tax liabilities (1) 27,302 55,204
Other long-term liabilities (2) 53,245 65,717
$ 130,382 $ 185,355

~~_______________~~

~~(1)During the thirty-nine weeks ended September 26, 2021, the Company reclassified $27.3 million of payroll taxes deferred under the CARES Act to current.~~

~~(2)The Company’s hedge liability decreased by $13.7 million during the thirty-nine weeks ended September 26, 2021 primarily from the termination of certain interest rate swaps. See Note 14 -~~ ~~Derivative Instruments and Hedging Activities~~ ~~for additional details.~~

~~13. Stockholders’ Equity~~

~~Redeemable Preferred Stock~~ - In connection with the development of its Abbraccio Cucina Italiana (“Abbraccio”) concept in 2015, the Company sold preferred shares of its Abbraccio concept (“Abbraccio Shares”) to certain investors. During the thirteen weeks ended March 29, 2020, the Company exercised a call option to purchase all outstanding Abbraccio Shares for $1.0 million and recorded a reduction to Accumulated deficit and an increase in Net loss applicable to common stockholders of $3.5 million for the consideration paid in excess of the Abbraccio Shares’ carrying value.

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


(dollars in thousands)	(dollars in thousands)	SEPTEMBER 26, 2021		DECEMBER 27, 2020		(dollars in thousands)	JUNE 26, 2022		DECEMBER 26, 2021
Foreign currency translation adjustment	Foreign currency translation adjustment	$	(183,770)	$	(188,883)	Foreign currency translation adjustment	$	(172,257)	$	(195,480)
Unrealized loss on derivatives, net of tax	Unrealized loss on derivatives, net of tax	(13,900)		(22,563)		Unrealized loss on derivatives, net of tax	(3,797)		(10,509)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	$	(197,670)	$	(211,446)	Accumulated other comprehensive loss	$	(176,054)	$	(205,989)

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 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020
Foreign currency translation adjustment $ 1,673 $ (4,095) $ 5,113 $ (40,538)
Unrealized (loss) gain on derivatives, net of tax (1) (153) 261 (323) (14,631)
Reclassification of adjustments for loss on derivatives included in Net income (loss), net of tax (2) 1,519 2,962 6,036 6,943
Amortization of terminated interest rate swaps, net of tax 1,479 — 2,950 —
Total unrealized gain (loss) on derivatives, net of tax 2,845 3,223 8,663 (7,688)
Other comprehensive income (loss) attributable to Bloomin’ Brands $ 4,518 $ (872) $ 13,776 $ (48,226)


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
Foreign currency translation adjustment	$	11,940	$	10,015	$	23,223	$	3,440

Unrealized (loss) gain on derivatives, net of tax	—		(128)		573		(170)
Reclassification of adjustments for loss on derivatives included in Net (loss) income, net of tax (1)	273		1,514		954		4,517
Impact of terminated interest rate swaps included in Net (loss) income, net of tax (1)	2,164		1,471		5,185		1,471
Total gain on derivatives, net of tax	2,437		2,857		6,712		5,818

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

________________

(1)~~Unrealized loss on derivatives is net of tax of $5.1 million for the thirty-nine weeks ended September 27, 2020.~~

~~(2)Reclassifications of adjustments for loss on derivatives are net of tax.~~ See Note 1411 - Derivative Instruments and Hedging Activities for the tax impact of ~~reclassifications.~~reclassifications and the terminated swaps.

~~Table of Contents~~

~~BLOOMIN’ BRANDS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED) - Continued~~

~~14.~~11. Derivative Instruments and Hedging Activities

Cash Flow Hedges of Interest Rate Risk - In October 2018, the Company entered into variable-to-fixed interest rate swap agreements with 12 counterparties to hedge a portion of the cash flows of the Company’s variable rate debt. The swap agreements had an aggregate notional amount of $550.0 million and mature on November 30, 2022. Under the terms of the swap agreements, the Company ~~pays~~paid a ~~weighted-average~~weighted average fixed rate of 3.04% on the notional amount and ~~receives~~received payments from the counterparty based on ~~the~~ one-month ~~LIBOR rate.~~

~~In connection with the refinancing of its Former Credit Facility, on April 16,~~LIBOR. During 2021, the Company terminated its variable-to-fixed interest rate swap agreements with 7certain counterparties ~~having~~and as a result, as of December 26, 2021 had interest rate swap agreements remaining with 2counterparties for an aggregate notional amount of ~~$275.0 million for a payment of approximately $13.3 million, including accrued interest.~~$125.0 million.

In connection with the Amended Credit Agreement, on April 26, 2022 the Company terminated its remaining variable-to-fixed interest rate swap agreements. Following these terminations, ~~$13.4 million of~~the unrealized losses related to the terminated swap agreements included in ~~AOCL~~Accumulated other comprehensive loss will be amortized ~~on a straight-line basis~~ to Interest expense, net ~~over the remaining original term of the terminated swaps.~~during 2022.

The Company’s swap agreements ~~have been~~were designated and ~~qualify~~qualified as cash flow hedges, ~~are~~ recognized on its Consolidated Balance ~~Sheets~~Sheet at fair value as of December 26, 2021 and ~~are~~ classified based on the instruments’ maturity dates. As of ~~September~~June 26, ~~2021,~~2022, the Company estimated ~~$16.1~~$5.2 million of interest expense from the terminated swap agreements will be reclassified to Interest expense, net ~~over~~through the ~~next 12 fiscal months, including interest expense related to~~November 2022 maturity date of the ~~terminated swap agreements discussed above.~~swaps.

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

(dollars in thousands) SEPTEMBER 26, 2021 DECEMBER 27, 2020 CONSOLIDATED BALANCE SHEET CLASSIFICATION
Interest rate swaps - liability $ 7,502 $ 14,855 Accrued and other current liabilities
Interest rate swaps - liability 1,917 15,640 Other long-term liabilities, net
Total fair value of derivative instruments - liabilities (1) $ 9,419 $ 30,495
Accrued interest $ 609 $ 1,237 Accrued and other current liabilities

(dollars in thousands)

DECEMBER 26, 2021

CONSOLIDATED BALANCE SHEET CLASSIFICATION

Interest rate swaps - liability (1)

3,056

Accrued and other current liabilities

Accrued interest

276

Accrued and other current liabilities

____________________

(1)See Note 1613 - Fair Value Measurements for fair value discussion of the interest rate swaps.

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
(dollars in thousands) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020
Interest rate swap expense recognized in Interest expense, net $ (2,045) $ (3,991) $ (8,127) $ (9,353)
Income tax benefit recognized in (Benefit) provision for income taxes 526 1,029 2,091 2,410
Total effects on Net income (loss) $ (1,519) $ (2,962) $ (6,036) $ (6,943)

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 September 26, 2021, all counterparties to the interest rate swaps had performed in accordance with their contractual obligations.

The Company has agreements with each of its derivative counterparties that contain a provision where 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.

~~Table of Contents~~

~~BLOOMIN’ BRANDS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED) - Continued~~

As of September 26, 2021 and December 27, 2020, 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 $10.1 million and $32.2 million, respectively. As of September 26, 2021 and December 27, 2020, the Company has not posted any collateral related to these agreements. If the Company had breached any of these provisions as of September 26, 2021 and December 27, 2020, it could have been required to settle its obligations under the agreements at their termination value of $10.1 million and $32.2 million, respectively.


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
Interest rate swap agreements:
Interest rate swap expense recognized in Interest expense, net	$	(367)	$	(2,038)	$	(1,284)	$	(6,082)
Income tax benefit recognized in Provision for income taxes	94		524		330		1,565
Net effects of interest rate swap agreements	$	(273)	$	(1,514)	$	(954)	$	(4,517)
Terminated interest rate swap agreements:
Terminated interest rate swap expense recognized in Interest expense, net	$	(2,913)	$	(1,981)	$	(6,980)	$	(1,981)
Income tax benefit recognized in Provision for income taxes	749		510		1,795		510
Net effects of terminated interest rate swap agreements	$	(2,164)	$	(1,471)	$	(5,185)	$	(1,471)
Total net effects on Net (loss) income	$	(2,437)	$	(2,985)	$	(6,139)	$	(5,988)

~~15.~~12. Leases

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)	(dollars in thousands)	CONSOLIDATED BALANCE SHEET CLASSIFICATION	SEPTEMBER 26, 2021		DECEMBER 27, 2020		(dollars in thousands)	CONSOLIDATED BALANCE SHEET CLASSIFICATION	JUNE 26, 2022		DECEMBER 26, 2021
Operating lease right-of-use assets	Operating lease right-of-use assets	Operating lease right-of-use assets	$	1,152,268	$	1,172,910	Operating lease right-of-use assets	Operating lease right-of-use assets	$	1,122,317	$	1,130,873
Finance lease right-of-use assets (1)	Finance lease right-of-use assets (1)	Property, fixtures and equipment, net	2,349		1,947		Finance lease right-of-use assets (1)	Property, fixtures and equipment, net	3,782		2,074
Total lease assets, net	Total lease assets, net		$	1,154,617	$	1,174,857	Total lease assets, net		$	1,126,099	$	1,132,947

Current operating lease liabilities (2)	Current operating lease liabilities (2)	Accrued and other current liabilities	$	178,563	$	176,791	Current operating lease liabilities (2)	Accrued and other current liabilities	$	178,817	$	177,028
Current finance lease liabilities	Current finance lease liabilities	Current portion of long-term debt	1,087		1,210		Current finance lease liabilities	Current portion of long-term debt	1,511		958
Non-current operating lease liabilities ~~(3)~~(2)	Non-current operating lease liabilities ~~(3)~~(2)	Non-current operating lease liabilities	1,195,996		1,216,666		Non-current operating lease liabilities ~~(3)~~(2)	Non-current operating lease liabilities	1,168,418		1,178,998
Non-current finance lease liabilities	Non-current finance lease liabilities	Long-term debt, net	1,435		974		Non-current finance lease liabilities	Long-term debt, net	2,398		1,264
Total lease liabilities	Total lease liabilities		$	1,377,081	$	1,395,641	Total lease liabilities		$	1,351,144	$	1,358,248

________________

(1)Net of accumulated amortization of ~~$3.1~~$4.1 million and ~~$2.3~~$3.3 million as of ~~September~~June 26, ~~2021~~2022 and December ~~27, 2020,~~26, 2021, respectively.

(2)Excludes ~~COVID-19-related deferred rent accruals of $2.1 million and $12.8 million as of September 26, 2021 and December 27, 2020, respectively, and~~current accrued contingent percentage rent of ~~$3.6~~$4.3 million and ~~$2.7~~$3.5 million, as of ~~September~~June 26, 2022 and December 26, 2021, respectively, and ~~December 27, 2020, respectively.~~

~~(3)Excludes~~immaterial current and non-current COVID-19-related ~~non-current~~ deferred rent ~~accruals of $0.6 million and $1.2 million as of September 26, 2021 and December 27, 2020, respectively.~~

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

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) CLASSIFICATION THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
(dollars in thousands) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020
Operating leases (1) Other restaurant operating $ 44,807 $ 45,341 $ 133,362 $ 133,999
Variable lease cost (2) Other restaurant operating 1,574 (1,677) 3,082 (1,603)
Finance leases:
Amortization of leased assets Depreciation and amortization 280 328 800 985
Interest on lease liabilities Interest expense, net 34 37 101 120
Sublease revenue Franchise and other revenues (3,276) (409) (6,936) (2,195)
Lease costs, net $ 43,419 $ 43,620 $ 130,409 $ 131,306

~~________________~~

~~(1)~~Excludes rent expense for office facilities and Company-owned closed or subleased properties of $3.2 million and $3.6 million for the thirteen weeks ended September 26, 2021 and September 27, 2020, respectively, and $9.9 million and $10.4 million for the thirty-nine weeks ended September 26, 2021 and September 27, 2020, respectively, which is included in General and administrative expense. Also excludes certain immaterial supply chain related rent expense included in Food and beverage costs.

~~(2)Includes COVID-19-related rent abatement for all periods presented.~~accruals.

2520

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BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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


	CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME CLASSIFICATION	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)		JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
Operating leases (1)	Other restaurant operating	$	45,579	$	43,763	$	90,940	$	88,555
Variable lease cost (2)	Other restaurant operating	1,619		731		3,502		1,508
Finance leases:
Amortization of leased assets	Depreciation and amortization	356		258		693		520
Interest on lease liabilities	Interest expense, net	44		31		76		67
Sublease revenue	Franchise and other revenues	(2,436)		(2,825)		(4,994)		(3,660)
Lease costs, net		$	45,162	$	41,958	$	90,217	$	86,990

________________

(1)Excludes rent expense for office facilities and Company-owned closed or subleased properties of $3.1 million and $3.2 million for the thirteen weeks ended June 26, 2022 and June 27, 2021, respectively, and $6.1 million and $6.7 million for the twenty-six weeks ended June 26, 2022 and June 27, 2021, respectively, which is included in General and administrative expense.

(2)Includes COVID-19-related rent abatements for the thirteen and twenty-six weeks ended June 27, 2021.

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

THIRTY-NINE WEEKS ENDED

TWENTY-SIX WEEKS ENDED

(dollars in thousands)

SEPTEMBER 26, 2021

SEPTEMBER 27, 2020

(dollars in thousands)

JUNE 26, 2022

JUNE 27, 2021

Cash flows from operating activities:

Cash paid for amounts included in the measurement of operating lease liabilities

155,661

127,642

Cash paid for amounts included in the measurement of operating lease liabilities

97,255

105,323

~~16.~~13. Fair Value Measurements

Fair value is the price that would be received for an asset or paid to transfer a liability, or the exit price, in an orderly transaction between market participants on the measurement date. Fair value is categorized into one of the following three levels based on the lowest level of significant input:


Level 1						Unadjusted quoted market prices in active markets for identical assets or liabilities
Level 2						Observable inputs available at measurement date other than quoted prices included in Level 1
Level 3						Unobservable inputs that cannot be corroborated by observable market data

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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


		SEPTEMBER 26, 2021						DECEMBER 27, 2020							JUNE 26, 2022						DECEMBER 26, 2021
(dollars in thousands)	(dollars in thousands)	TOTAL		LEVEL 1		LEVEL 2		TOTAL		LEVEL 1		LEVEL 2		(dollars in thousands)	TOTAL		LEVEL 1		LEVEL 2		TOTAL		LEVEL 1		LEVEL 2
Assets:	Assets:													Assets:
Cash equivalents:	Cash equivalents:													Cash equivalents:
Fixed income funds	Fixed income funds	$	7,973	$	7,973	$	—	$	15,404	$	15,404	$	—	Fixed income funds	$	13,583	$	13,583	$	—	$	6,714	$	6,714	$	—
Money market funds	Money market funds	10,308		10,308		—		16,494		16,494		—		Money market funds	10,670		10,670		—		9,039		9,039		—
Restricted cash equivalents:	Restricted cash equivalents:													Restricted cash equivalents:

Money market funds	Money market funds	4,247		4,247		—		428		428		—		Money market funds	101		101		—		1,472		1,472		—

Total asset recurring fair value measurements	Total asset recurring fair value measurements	$	22,528	$	22,528	$	—	$	32,326	$	32,326	$	—	Total asset recurring fair value measurements	$	24,354	$	24,354	$	—	$	17,225	$	17,225	$	—

Liabilities:	Liabilities:													Liabilities:
Accrued and other current liabilities:	Accrued and other current liabilities:													Accrued and other current liabilities:
Derivative instruments - interest rate swaps	Derivative instruments - interest rate swaps	$	7,502	$	—	$	7,502	$	14,855	$	—	$	14,855	Derivative instruments - interest rate swaps	$	—	$	—	$	—	$	3,056	$	—	$	3,056

Other long-term liabilities:
Derivative instruments - interest rate swaps		1,917		—		1,917		15,640		—		15,640

Total liability recurring fair value measurements	Total liability recurring fair value measurements	$	9,419	$	—	$	9,419	$	30,495	$	—	$	30,495	Total liability recurring fair value measurements	$	—	$	—	$	—	$	3,056	$	—	$	3,056

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


FINANCIAL INSTRUMENT						METHODS AND ASSUMPTIONS
Fixed income funds and Money market funds						Carrying value approximates fair value because maturities are less than three months.
Derivative instruments						The Company’s derivative instruments include interest rate swaps. Fair value measurements are based on the contractual terms of the derivatives and use observable market-based inputs. The interest rate swaps are valued using a discounted cash flow analysis on the expected cash flows of each derivative using observable inputs including interest rate curves and credit spreads. The Company also considers its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. As of ~~September~~December 26, 2021, ~~and December 27, 2020,~~ the Company has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives.

~~Table of Contents~~

~~BLOOMIN’ BRANDS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED) - Continued~~

Fair Value Measurements on a Nonrecurring Basis - Assets and liabilities that are measured at fair value on a nonrecurring basis relate primarily to property, fixtures and equipment, operating lease right-of-use assets, goodwill and other intangible assets, which are remeasured when carrying value exceeds fair value. Carrying value after impairment approximates fair value. The following ~~table summarizes~~tables summarize the Company’s assets measured at fair value by hierarchy level on a nonrecurring basis, for the periods indicated:

THIRTY-NINE WEEKS ENDED
SEPTEMBER 26, 2021 SEPTEMBER 27, 2020
(dollars in thousands) REMAINING CARRYING VALUE TOTAL IMPAIRMENT REMAINING CARRYING VALUE TOTAL IMPAIRMENT
Assets held for sale (1) $ — $ — $ 1,182 $ 75
Operating lease right-of-use assets (1) 7,651 1,466 70,841 23,567
Property, fixtures and equipment (2) 8,928 7,260 27,978 38,381
Goodwill and other assets (3) — — 748 2,683
$ 16,579 $ 8,726 $ 100,749 $ 64,706


		THIRTEEN WEEKS ENDED
	JUNE 27, 2021
(dollars in thousands)		REMAINING CARRYING VALUE (1)		TOTAL IMPAIRMENT

Operating lease right-of-use assets		$	5,687	$	962
Property, fixtures and equipment		8,192		4,460

		$	13,879	$	5,422


		TWENTY-SIX WEEKS ENDED
	JUNE 27, 2021
(dollars in thousands)		REMAINING CARRYING VALUE (1)		TOTAL IMPAIRMENT

Operating lease right-of-use assets		$	7,651	$	1,512
Property, fixtures and equipment		8,928		6,052

		$	16,579	$	7,564

~~____________________~~________________

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

~~(2)~~Carrying values measured using Level 2 inputs to estimate fair value totaled $2.2 million for the thirty-nine weeks ended September 27, 2020. All other assets were valued using Level 3 inputs. Third-party market appraisals (Level 2) and discounted cash flow models (Level 3) were used to estimate fair value.Table of Contents

~~(3)Other assets generally measured using the quoted market value of comparable assets (Level 2).~~BLOOMIN’ BRANDS, INC.

~~See Note 4~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - ~~Impairments and Exit Costs~~ for information regarding impairment charges resulting from the fair value measurement performed on a nonrecurring basis during the thirty-nine weeks ended September 27, 2020. Projected future cash flows, including discount rate and growth rate assumptions, are derived from then current economic conditions, expectations of management and projected trends of current operating results. As a result, the Company has determined that the majority of the inputs used to value its long-lived assets held and used are unobservable inputs that fall within Level 3 of the fair value hierarchy.Continued

In assessment of impairment for operating locations, the Company determined the fair values of individual operating locations using an income approach, which required discounting projected future cash flows. When determining the stream of projected future cash flows associated with an individual operating location, management made assumptions, including highest and best use and inputs from restaurant operations, where necessary, and about key variables including the following unobservable inputs: revenue growth rates, controllable and uncontrollable expenses, and asset residual values. In order to calculate the present value of those future cash flows, the Company discounted cash flow estimates at its weighted-average cost of capital applicable to the country in which the measured assets reside.

The following table presents quantitative information related to certain unobservable inputs used in the Company’s Level 3 fair value measurements of Operating lease right-of-use assets and Property, fixtures and equipment for the impairment losses incurred during the period indicated:

THIRTY-NINE WEEKS ENDED
UNOBSERVABLE INPUTS SEPTEMBER 27, 2020
Weighted-average cost of capital 10.4% to 11.3%
Long-term growth rate 1.5% to 2.0%

Interim Disclosures about Fair Value of Financial Instruments - The Company’s non-derivative financial instruments consist of cash equivalents, accounts receivable, accounts payable and current and long-term debt. The fair values of cash equivalents, accounts receivable and accounts payable approximate their carrying amounts reported on its Consolidated Balance Sheets due to their short duration.

~~Table of Contents~~

~~BLOOMIN’ BRANDS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED) - Continued~~

Debt is carried at amortized cost; however, the Company estimates the fair value of debt for disclosure purposes. The following table includes the carrying value and fair value of the Company’s debt by hierarchy level as of the periods indicated:


		SEPTEMBER 26, 2021				DECEMBER 27, 2020				JUNE 26, 2022					DECEMBER 26, 2021
		CARRYING VALUE		FAIR VALUE LEVEL 2		CARRYING VALUE		FAIR VALUE LEVEL 2		CARRYING VALUE			FAIR VALUE LEVEL 2		CARRYING VALUE		FAIR VALUE LEVEL 2
(dollars in thousands)	(dollars in thousands)						(dollars in thousands)
Senior Secured Credit Facility:	Senior Secured Credit Facility:																Senior Secured Credit Facility:
Term loan A	Term loan A	$	197,500	$	192,809			$	—		$	—		Term loan A	$	—	$	—	$	195,000	$	190,125
Revolving credit facility	Revolving credit facility	$	124,000	$	119,390			$	—		$	—		Revolving credit facility	$	400,000	$	390,000	$	80,000	$	76,926
Former Credit Facility:
Term loan A		$	—	$	—			$	425,000		$	412,250
Revolving credit facility		$	—	$	—			$	447,000		$	419,612

2025 Notes	2025 Notes	$	230,000	$	541,719			$	230,000		$	413,818		2025 Notes	$	105,000	$	177,031	$	230,000	$	447,615
2029 Notes	2029 Notes	$	300,000	$	314,001			$	—		$	—		2029 Notes	$	300,000	$	255,000	$	300,000	$	304,395

~~17. Allowance for Expected Credit Losses~~14. Income Taxes


	THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 26, 2022			JUNE 27, 2021			JUNE 26, 2022			JUNE 27, 2021
(Loss) income before provision for income taxes	$	(50,144)		$	107,574		$	43,479		$	183,965
Provision for income taxes	$	11,536		$	22,688		$	27,465		$	29,281
Effective income tax rate	(23.0)		%	21.1		%	63.2		%	15.9		%

The ~~following table is a rollforward of the Company’s trade receivables allowance~~effective income tax rate for ~~expected credit losses for the periods indicated:~~

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
(dollars in thousands) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020
Allowance for expected credit losses, beginning of period $ 3,989 $ 4,566 $ 4,095 $ 199
Adjustment for adoption of ASU No. 2016-13 — — — 1,018
Provision for expected credit losses (1) — 2 — 3,351
Charge-off of accounts (2) (29) (108) (29)
Allowance for expected credit losses, end of period $ 3,987 $ 4,539 $ 3,987 $ 4,539
~~________________~~

~~(1)In March 2020, the Company fully reserved substantially all of its outstanding franchise receivables in response to the economic impact of the COVID-19 pandemic. See Note 2 -~~ ~~COVID-19 Charges~~ ~~for details regarding the impact of the COVID-19 pandemic on the Company’s financial results.~~

~~The Company is also exposed to credit losses from off-balance sheet lease guarantees primarily related to the divestiture of certain formerly Company-owned restaurant sites. See Note 19 -~~ ~~Commitments and Contingencies~~ ~~for details regarding these lease guarantees.~~

~~18. Income Taxes~~

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
(dollars in thousands) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020
Income (loss) before (benefit) provision for income taxes $ 597 $ (32,554) $ 184,562 $ (214,830)
(Benefit) provision for income taxes $ (4,454) $ (14,776) $ 24,827 $ (70,210)
Effective income tax rate (NM) 45.4 % 13.5 % 32.7 %

~~________________~~

~~NM Not meaningful.~~

~~For~~ the thirteen weeks ended ~~September~~June 26, ~~2021, the benefit for income taxes~~2022 includes the impact of ~~changes~~nondeductible losses associated with the 2025 Notes Partial Repurchase which, relative to a pre-tax book loss during the quarter, resulted in a negative effective income tax rate.

The effective income tax rate for the twenty-six weeks ended June 26, 2022 increased by 47.3 percentage points as compared to the ~~estimate~~twenty-six weeks ended June 27, 2021. The increase was primarily due to the non-deductible losses associated with the 2025 Notes Partial Repurchase recorded during the twenty-six weeks ended June 26, 2022.

On December 28, 2021, the U.S. Treasury and the Internal Revenue Service released final regulations that, among other things, provide guidance on several aspects of the ~~forecasted full-year~~foreign tax credit rules. As part of the guidance issued, these regulations change longstanding foreign tax credit regulations that now make foreign taxes paid to certain countries no longer creditable in the United States. The Company expects that a portion of post-2022 foreign taxes paid will not be creditable in the United States. Furthermore, the impact of these regulations will result in the utilization of existing prior year foreign tax credit carryforwards for which the Company had previously recorded a valuation allowance. The valuation allowance related to the credits expected to be utilized has been released during the thirteen and twenty-six weeks ended June 26, 2022.

The effective income tax rate for the thirteen weeks ended June 26, 2022 was lower than the Company’s blended federal and state statutory rate of approximately 26%. The income tax rate includes the impact of nondeductible losses associated with the 2025 Notes Partial Repurchase which, relative to ~~prior quarters~~a pre-tax book loss during the quarter, resulted in ~~2021.~~ a negative effective income tax rate.

The ~~benefit of FICA tax credits on certain employees’ tips reduced the~~ effective income tax rate ~~as a result of forecasted pre-tax income. For~~for the twenty-six weeks ended June 26, 2022 was higher than the statutory rate primarily due to the non-deductible losses associated with the 2025 Notes Partial Repurchase recorded during the twenty-six weeks ended June 26, 2022.

2823

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

~~thirteen weeks ended September 27, 2020, the benefit of FICA tax credits on certain employees’ tips increased the effective tax rate as a result of forecasted pre-tax book loss.~~

The effective income tax ~~rate~~rates for the ~~thirty-nine~~thirteen and twenty-six weeks ended ~~September 26,~~June 27, 2021 ~~decreased by~~19.2 percentage points as compared to the thirty-nine weeks ended September 27, 2020. The decrease was primarily due to the benefit of FICA tax credits on certain employees’ tips reducing the effective tax rate in 2021 as a result of forecasted pre-tax book income as compared to increasing the effective tax rate in 2020 as a result of forecasted pre-tax book loss.

As of December 27, 2020, the Company had $155.3 million in general business tax credit carryforwards, which have a 20-year carryforward period and are utilized on a first-in, first-out basis. The Company expects to increase its general business credit carryforwards in 2021 by approximately $5 million to $10 million. The Company currently expects to utilize these tax credit carryforwards within a 10-year period. However, the Company’s 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.

~~The Company has a blended federal and state statutory rate of approximately 26%. The effective income tax rate for the thirty-nine weeks ended September 26, 2021 was~~were lower than the statutory rate primarily due to the benefit of FICA tax credits on certain employees’ tips.

~~19.~~15. 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.

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 recorded reserves of ~~$6.3~~$8.5 million and ~~$4.6~~$7.1 million for certain of its outstanding legal proceedings as of ~~September~~June 26, ~~2021~~2022 and December ~~27, 2020,~~26, 2021, respectively, within Accrued and other current liabilities and Other long-term liabilities on its Consolidated Balance Sheets. While the Company believes that additional losses beyond these accruals are reasonably possible, it cannot estimate a possible loss contingency or range of reasonably possible loss contingencies beyond these accruals.

The Company intends to defend itself in legal matters. 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

~~Table of Contents~~

~~BLOOMIN’ BRANDS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED) - Continued~~

legal claims pending against the Company, if any, in excess of amounts already provided for such matters in the consolidated financial statements, will not have a material adverse effect on its business, annual results of operations, liquidity or financial position. However, it is possible that the Company’s business, results of operations, liquidity, or financial condition could be materially affected in a particular future reporting period by the unfavorable resolution of one or more matters or contingencies during such period.

Lease Guarantees - The Company assigned its interest, and is contingently liable, under certain real estate leases. These leases have varying terms, the latest of which expires in 2032. As of ~~September~~June 26, ~~2021,~~2022, the undiscounted payments that the Company could be required to make in the event of non-payment by the primary lessees was approximately ~~$25.9~~$23.0 million. The present value of these potential payments discounted at the Company’s incremental borrowing rate as of ~~September~~June 26, ~~2021~~2022 was approximately ~~$21.2~~$17.5 million. In the event of default, the indemnity clauses in the Company’s purchase and sale agreements govern its ability to pursue and recover damages incurred. As of ~~September~~June 26, 2022 and December 26, 2021, the Company’s recorded contingent lease liability was ~~$8.8 million.~~$8.4 million and $8.7 million, respectively.

~~Royalty Termination~~ ~~- On August 2, 2021, wholly-owned subsidiaries~~Table of the Company entered into the Purchase and Sale of Royalty Payment Stream and Termination of Royalty Agreement (the “Royalty Termination Agreement”) with the Carrabba’s Italian Grill founders (the “Carrabba’s Founders”), pursuant to which the Company’s obligation to pay future royalties on U.S. Carrabba’s Italian Grill restaurant sales and lump sum royalty fees on Carrabba’s Italian Grill (and Abbraccio) restaurants opened outside the U.S. was terminated. Upon execution of the Royalty Termination Agreement, the Company made a cash payment of $61.9 million to the Carrabba’s Founders, which was recorded in Other restaurant operating expense in its Consolidated Statements of Operations and Comprehensive Income (Loss) during the thirteen weeks ended September 26, 2021.Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~20.~~(UNAUDITED) - Continued

16. Segment Reporting

The Company considers its restaurant concepts and international markets as operating segments, which reflects how the Company manages its business, reviews operating performance and allocates resources. Resources are allocated and performance is assessed by the Company’s Chief Executive Officer (“CEO”), whom the Company has determined to be its Chief Operating Decision Maker (“CODM”). The Company aggregates its operating segments into 2 reportable segments, U.S. and international. The U.S. segment includes all restaurants operating in the U.S. while restaurants operating outside the U.S. are included in the international segment. The following is a summary of reporting segments:

REPORTABLE SEGMENT (1)

CONCEPT

GEOGRAPHIC LOCATION

U.S.

Outback Steakhouse

United States of America

Carrabba’s Italian Grill

Bonefish Grill

Fleming’s Prime Steakhouse & Wine Bar

International

Outback Steakhouse

Brazil, Hong Kong/China

Carrabba’s Italian Grill (Abbraccio)

Brazil

_________________

(1)Includes franchise locations.

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 ~~27, 2020.~~26, 2021. Revenues for all segments include only transactions with customers and exclude intersegment revenues. Excluded from Income ~~(loss)~~ from operations for U.S. and international are certain legal and corporate costs not directly related to the performance of the segments, most stock-based compensation expenses and certain bonus expenses.

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


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
Total revenues
U.S.	$	998,627	$	1,003,058	$	2,035,034	$	1,907,976
International	126,535		74,308		230,663		156,863
Total revenues	$	1,125,162	$	1,077,366	$	2,265,697	$	2,064,839

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


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
Segment income from operations
U.S.	$	104,620	$	165,297	$	236,846	$	287,032
International	14,126		2,470		23,010		6,007
Total segment income from operations	118,746		167,767		259,856		293,039
Unallocated corporate operating expense	(31,027)		(43,130)		(64,881)		(77,404)
Total income from operations	87,719		124,637		194,975		215,635
Loss on extinguishment and modification of debt	(107,630)		(2,073)		(107,630)		(2,073)
Loss on fair value adjustment of derivatives, net	(17,685)		—		(17,685)		—
Other income, net	—		—		—		21
Interest expense, net	(12,548)		(14,990)		(26,181)		(29,618)
(Loss) income before provision for income taxes	$	(50,144)	$	107,574	$	43,479	$	183,965

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
(dollars in thousands) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020
Total revenues
U.S. $ 912,733 $ 721,738 $ 2,820,709 $ 2,153,315
International 97,730 49,522 254,593 204,741
Total revenues $ 1,010,463 $ 771,260 $ 3,075,302 $ 2,358,056

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

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
(dollars in thousands) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020
Segment income (loss) from operations
U.S. $ 47,294 $ 29,574 $ 334,326 $ (21,968)
International 1,412 (7,926) 7,419 (18,209)
Total segment income (loss) from operations 48,706 21,648 341,745 (40,177)
Unallocated corporate operating expense (1) (33,869) (35,903) (111,273) (127,558)
Total income (loss) from operations 14,837 (14,255) 230,472 (167,735)
Loss on extinguishment and modification of debt — — (2,073) (237)
Other income (expense), net 5 1 26 (211)
Interest expense, net (14,245) (18,300) (43,863) (46,647)
Income (loss) before (benefit) provision for income taxes $ 597 $ (32,554) $ 184,562 $ (214,830)

~~____________________~~

~~(1)~~The thirteen and thirty-nine weeks ended September 27, 2020 include $4.2 million and $28.8 million, respectively, of charges that were not allocated to the Company’s segments related to its transformational initiatives, primarily recorded within General and administrative expense and Provision for impaired assets and restaurant closings.

~~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 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020
Depreciation and amortization
U.S. $ 33,422 $ 35,056 $ 100,645 $ 110,004
International 5,842 5,672 17,128 18,314
Corporate 1,563 2,689 4,819 9,151
Total depreciation and amortization $ 40,827 $ 43,417 $ 122,592 $ 137,469

~~The following table is a summary of capital expenditures by segment for the periods indicated:~~


		THIRTY-NINE WEEKS ENDED					THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	(dollars in thousands)	SEPTEMBER 26, 2021		SEPTEMBER 27, 2020		(dollars in thousands)	JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
Capital expenditures
Depreciation and amortization						Depreciation and amortization
U.S.	U.S.	$	74,076	$	45,094	U.S.	$	33,544	$	33,578	$	68,303	$	67,223
International	International	8,985		12,567		International	6,019		5,566		11,556		11,286
Corporate	Corporate	6,513		3,384		Corporate	1,694		1,395		3,173		3,256
Total capital expenditures		$	89,574	$	61,045
Total depreciation and amortization						Total depreciation and amortization	$	41,257	$	40,539	$	83,032	$	81,765

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BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s discussion and analysis of financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and the related notes. Unless the context otherwise indicates, as used in this report, the term the “Company,” “we,” “us,” “our” and other similar terms mean Bloomin’ Brands, Inc. and its subsidiaries.

Cautionary Statement

This Quarterly Report on Form 10-Q (the “Report”) includes statements that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “feels,” “seeks,” “forecasts,” “projects,” “intends,” “plans,” “may,” “will,” “should,” “could” or “would” or, in each case, their negative or other variations or comparable terminology, although not all forward-looking statements are accompanied by such terms. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Report and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which we operate.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Although we base these forward-looking statements on assumptions that we believe are reasonable when made, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and industry developments may differ materially from statements made in or suggested by the forward-looking statements contained in this Report. In addition, even if our results of operations, financial condition and liquidity, and industry developments are consistent with the forward-looking statements contained in this Report, those results or developments may not be indicative of results or developments in subsequent periods. Important factors that could cause actual results to differ materially from statements made or suggested by forward-looking statements include, but are not limited to, the following:

(i)Consumer reactions to public health and food safety issues;

(ii)The severity, extent and duration of the COVID-19 pandemic, its impacts on our business and results of operations, financial condition and liquidity, including any adverse impact on our stock price and on the other factors listed below, and the responses of domestic and foreign federal, state and local governments to the pandemic;

(iii)Minimum wage increases, additional mandated employee benefits and fluctuations in the cost and availability of employees;

(iv)Fluctuations in the price and availability of ~~commodities;~~commodities, including supplier freight charges and restaurant distribution expenses, and other impacts of inflation;

(v)Our ability to compete in the highly competitive restaurant industry with many well-established competitors and new market entrants;

~~(vi)Economic conditions and their effects on consumer confidence and discretionary spending, consumer traffic, the cost and availability of credit and interest rates;~~

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BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

(vi)Economic conditions and their effects on consumer confidence and discretionary spending, consumer traffic, the cost and availability of credit and interest rates;

(vii)Our ability to recruit and retain high-quality leadership, restaurant-level management and team members;

(viii)Our ability to preserve and grow the reputation and value of our brands, particularly in light of changes in consumer engagement with social media platforms and limited control with respect to the operations of our franchisees;

(ix)Our ability to protect our information technology systems from interruption or security breach, including cyber security threats, and to protect consumer data and personal employee information;

(x)Dependence on a limited number of suppliers and distributors to meet our beef, chicken and other major product supply needs;

(xi)The effects of international economic, political and social conditions and legal systems on our foreign operations and on foreign currency exchange rates;

(xii)Our ability to comply with governmental laws and regulations, the costs of compliance with such laws and regulations and the effects of changes to applicable laws and regulations, including tax laws and unanticipated liabilities, and the impact of any litigation;

(xiii)Our ability to effectively respond to changes in patterns of consumer traffic, consumer tastes and dietary habits, including by maintaining relationships with third party delivery apps and services;

(xiv)Our ability to implement our remodeling, relocation and expansion plans due to uncertainty in locating and acquiring attractive sites on acceptable terms, obtaining required permits and approvals, recruiting and training necessary personnel, obtaining adequate financing and estimating the performance of newly opened, remodeled or relocated restaurants;

(xv)Seasonal and periodic fluctuations in our results and the effects of significant adverse weather conditions and other disasters or unforeseen events;

(xvi)The effects of our ~~substantial~~ leverage and restrictive covenants in our various credit facilities on our ability to raise additional capital to fund our operations, to make capital expenditures to invest in new or renovate restaurants and to react to changes in the economy or our ~~industry, and our exposure to interest rate risk in connection with our variable-rate debt;~~industry;

(xvii)Any impairment in the carrying value of our goodwill or other intangible or long-lived assets and its effect on our financial condition and results of operations; and

(xviii)Such other factors as discussed in Part I, Item IA. Risk Factors of our Annual Report on Form 10-K for the year ended December ~~27, 2020.~~26, 2021.

~~In light of~~Given these risks and uncertainties, we caution you not to place undue reliance on these forward-looking statements. Any forward-looking statement that we make in this Report speaks only as of the date of such statement, and we undertake no obligation to update any forward-looking statement or to publicly announce the results of any revision to any of those statements to reflect future events or developments. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data.

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BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Overview

We are one of the largest casual dining restaurant companies in the world with a portfolio of leading, differentiated restaurant concepts. As of ~~September~~June 26, ~~2021,~~2022, we owned and operated ~~1,159~~1,169 full-service restaurants and off-premises only kitchens and franchised ~~325~~332 full-service restaurants and off-premises only kitchens across 47 states, Guam and 1915 countries. We have four founder-inspired concepts: Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar.

Financial Highlights

Our financial highlights for the thirteen weeks ended ~~September~~June 26, ~~2021 (“third quarter of 2021”)~~2022 include the following:

•U.S. combined and Outback Steakhouse comparable restaurant sales of ~~25.5%~~(0.4)% and ~~18.3%~~(1.1)%, ~~respectively, relative to the third quarter of 2020, and 9.5% and 6.0%, respectively, relative to the third quarter of 2019;~~respectively;

•Increase in Total revenues of ~~31.0%~~4.4%, as compared to the ~~third~~second quarter of ~~2020,~~2021;

•Operating income and ~~4.5%~~restaurant-level operating margins of 7.8% and 15.5%, respectively, as compared to 11.6% and 20.3%, respectively, for the ~~third~~second quarter of ~~2019;~~2021;

•~~A $61.9~~Income from operations of $87.7 million, ~~charge~~as compared to ~~Other restaurant operating expense~~$124.6 million in the second quarter of 2021;

•Loss on extinguishment of debt of $104.7 million and loss on fair value adjustment of derivatives, net, of $17.7 million in connection with the ~~Carrabba’s Italian Grill Royalty Termination Agreement, an impact of 6.2% on restaurant-level operating margin;~~

•~~Restaurant-level operating margin of 10.3%, as compared to 10.7% and 12.9% for the third quarters of 2020 and 2019, respectively;~~

•~~Income (loss) from operations of $14.8 million, as compared to $(14.3) million and $22.0 million in the third quarters of 2020 and 2019, respectively;~~2025 Notes Partial Repurchase; and

•Diluted ~~earnings (loss)~~loss per share ~~attributable to common stockholders~~ of ~~$0.03,~~$(0.72), as compared to ~~$(0.20) and $0.11 in~~diluted earnings per share of $0.75 for the ~~third quarters~~second quarter of ~~2020 and 2019, respectively.~~2021.

Key Financial Performance Indicators

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

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

•Comparable restaurant sales — year-over-year comparison of the change in sales volumes (excluding gift card breakage) 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 ~~(loss)~~ from operations, Net (loss) income ~~(loss)~~ and Diluted (loss) earnings ~~(loss)~~ per share — financial measures utilized to evaluate our operating performance.

Restaurant-level operating margin is widely regarded in the industry as a useful metric to evaluate restaurant-level operating efficiency and performance of ongoing restaurant-level operations, and we use it for these purposes, overall and particularly within our two segments. Our restaurant-level operating margin is expressed as the percentage of our Restaurant sales that Food and beverage costs, Labor and other related expenses and Other restaurant operating expenses (including advertising expenses) represent, in each case as such items are reflected in our Consolidated Statements of Operations and Comprehensive ~~Income~~ (Loss). Income. The following categories of our revenue and operating expenses are not included in restaurant-level

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BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

operating margin because we do not consider them reflective of operating performance at the restaurant-level within a period:

(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.~~income;

(ii)Depreciation and amortization which, although substantially all of which is related to restaurant-level assets, represent historical sunk costs rather than cash outlays for the ~~restaurants.~~restaurants;

(iii)General and administrative expense which includes primarily non-restaurant-level costs associated with support of the restaurants and other activities at our corporate ~~offices.~~offices; and

(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.~~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 ~~(loss)~~ or Income ~~(loss)~~ 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 ~~(loss)~~ from operations, Adjusted net income ~~(loss)~~ and Adjusted diluted earnings ~~(loss)~~ per share — non-GAAP financial measures utilized to evaluate our operating performance.

We believe that our use of non-GAAP financial measures permits investors to assess the operating performance of our business relative to our performance based on U.S. GAAP results and relative to other companies within the restaurant industry by isolating the effects of certain items that may vary from period to period without correlation to core operating performance or that vary widely among similar companies. However, our inclusion of these adjusted measures should not be construed as an indication that our future results will be unaffected by unusual or infrequent items or that the items for which we have made adjustments are unusual or infrequent or will not recur. We believe that the disclosure of these non-GAAP measures is useful to investors as they form part of the basis for how our management team and Board ~~of Directors~~ evaluate our operating performance, allocate resources and administer employee incentive ~~plans; and~~

•~~Customer satisfaction scores~~ ~~— measurement of our customers’ experiences in a variety of key areas.~~plans.

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BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Selected Operating Data

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


Number of restaurants (at end of the period):	Number of restaurants (at end of the period):	SEPTEMBER 26, 2021	SEPTEMBER 27, 2020	Number of restaurants (at end of the period):	JUNE 26, 2022	JUNE 27, 2021
U.S.:
U.S.				U.S.
Outback Steakhouse	Outback Steakhouse			Outback Steakhouse
Company-owned	Company-owned	564	567	Company-owned	563	566
Franchised	Franchised	130	140	Franchised	130	131
Total	Total	694	707	Total	693	697
Carrabba’s Italian Grill	Carrabba’s Italian Grill			Carrabba’s Italian Grill
Company-owned	Company-owned	199	199	Company-owned	198	199
Franchised	Franchised	20	21	Franchised	19	20
Total	Total	219	220	Total	217	219
Bonefish Grill	Bonefish Grill			Bonefish Grill
Company-owned	Company-owned	178	181	Company-owned	174	179
Franchised	Franchised	7	7	Franchised	7	7
Total	Total	185	188	Total	181	186
Fleming’s Prime Steakhouse & Wine Bar	Fleming’s Prime Steakhouse & Wine Bar			Fleming’s Prime Steakhouse & Wine Bar
Company-owned	Company-owned	64	65	Company-owned	64	64
Other
Aussie Grill				Aussie Grill
Company-owned (1)	Company-owned (1)	7	5	Company-owned (1)	5	4
U.S. total	U.S. total	1,169	1,185	U.S. total	1,160	1,170
International:
International				International
Company-owned	Company-owned			Company-owned
Outback Steakhouse—Brazil (2)		113	104
Outback Steakhouse - Brazil (2)				Outback Steakhouse - Brazil (2)	129	113

Other (1)(3)		34	31
Other (1)(2)(3)				Other (1)(2)(3)	33	33
Franchised	Franchised			Franchised
Outback Steakhouse—South Korea (3)		114	88
Outback Steakhouse - South Korea (1)				Outback Steakhouse - South Korea (1)	77	76
Other ~~(1)~~(3)	Other ~~(1)~~(3)	54	56	Other ~~(1)~~(3)	50	55
International total	International total	315	279	International total	289	277
System-wide total	System-wide total	1,484	1,464	System-wide total	1,449	1,447
System-wide total - Company-owned				System-wide total - Company-owned	1,166	1,158
System-wide total - Franchised				System-wide total - Franchised	283	289

____________________

(1)~~U.S. Other Company-owned included four and three fast-casual Aussie Grill locations~~Previously presented restaurant counts as of ~~September 26,~~June 27, 2021 ~~and September 27, 2020, respectively. International Franchised Other~~have been adjusted to exclude off-premises only locations included three Aussie Grill locations as of September 26, 2021 and September 27, 2020. International Company-owned Other included two and one Aussie Grill locations as of September 26, 2021 and September 27, 2020, respectively.in the table below.

(2)The restaurant counts for Brazil, including Abbraccio restaurants within International Company-owned Other, are reported as of ~~August~~May 31, ~~2021~~2022 and ~~2020,~~2021, respectively, to correspond with the balance sheet dates of this subsidiary.

(3)~~Franchised Outback Steakhouse - South Korea~~International Company-owned Other included ~~37 and 13 international dark kitchens that offer delivery only~~two Aussie Grill locations as of ~~September~~June 26, ~~2021~~2022 and ~~September~~June 27, ~~2020, respectively. In addition, we had one international dark kitchen~~2021. International Franchised Other included ~~within Company-owned Other~~three Aussie Grill locations as of ~~both periods presented.~~June 26, 2022 and June 27, 2021.

The table below presents the number of our off-premises only kitchens in operation as of the periods indicated:


Number of kitchens (at end of the period) (1):	JUNE 26, 2022	JUNE 27, 2021
U.S.
Company-owned	2	4


International
Company-owned	1	1
Franchised - South Korea	49	32


System-wide total	52	37

____________________

(1)Excludes virtual concepts that operate out of existing restaurants and sports venue locations.

Table of Contents

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Results of Operations

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


		THIRTEEN WEEKS ENDED				THIRTY-NINE WEEKS ENDED					THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
		SEPTEMBER 26, 2021		SEPTEMBER 27, 2020		SEPTEMBER 26, 2021		SEPTEMBER 27, 2020			JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
Revenues	Revenues									Revenues
Restaurant sales	Restaurant sales	98.6	%	99.4	%	98.6	%	99.2	%	Restaurant sales	98.6	%	97.9	%	98.5	%	98.5	%
Franchise and other revenues	Franchise and other revenues	1.4		0.6		1.4		0.8		Franchise and other revenues	1.4		2.1		1.5		1.5
Total revenues	Total revenues	100.0		100.0		100.0		100.0		Total revenues	100.0		100.0		100.0		100.0
Costs and expenses	Costs and expenses									Costs and expenses
Food and beverage costs (1)	Food and beverage costs (1)	30.5		30.1		30.0		31.3		Food and beverage costs (1)	32.9		29.6		32.4		29.7
Labor and other related (1)	Labor and other related (1)	29.1		32.2		28.4		32.6		Labor and other related (1)	27.8		28.0		27.8		28.0
Other restaurant operating (1)	Other restaurant operating (1)	30.1		27.0		25.2		27.0		Other restaurant operating (1)	23.8		22.1		23.4		22.7
Depreciation and amortization	Depreciation and amortization	4.0		5.6		4.0		5.8		Depreciation and amortization	3.7		3.8		3.7		4.0
General and administrative	General and administrative	5.8		7.4		5.9		8.4		General and administrative	5.3		6.2		5.2		6.0

Provision for impaired assets and restaurant closings	Provision for impaired assets and restaurant closings	0.2		(*)		0.3		2.8		Provision for impaired assets and restaurant closings	*		0.5		0.1		0.4

Total costs and expenses	Total costs and expenses	98.5		101.8		92.5		107.1		Total costs and expenses	92.2		88.4		91.4		89.6
Income (loss) from operations		1.5		(1.8)		7.5		(7.1)
Income from operations										Income from operations	7.8		11.6		8.6		10.4
Loss on extinguishment and modification of debt	Loss on extinguishment and modification of debt	—		—		(0.1)		(*)		Loss on extinguishment and modification of debt	(9.6)		(0.2)		(4.7)		(0.1)
Other income (expense), net		*		*		*		(*)
Loss on fair value adjustment of derivatives, net										Loss on fair value adjustment of derivatives, net	(1.6)		—		(0.8)		—
Other income, net										Other income, net	—		—		—		*
Interest expense, net	Interest expense, net	(1.4)		(2.4)		(1.4)		(2.0)		Interest expense, net	(1.1)		(1.4)		(1.2)		(1.4)
Income (loss) before (benefit) provision for income taxes		0.1		(4.2)		6.0		(9.1)
(Benefit) provision for income taxes		(0.4)		(1.9)		0.8		(3.0)
Net income (loss)		0.5		(2.3)		5.2		(6.1)
Less: net income (loss) attributable to noncontrolling interests		0.2		(*)		0.2		(*)
Net income (loss) attributable to Bloomin’ Brands		0.3	%	(2.3)	%	5.0	%	(6.1)	%
(Loss) income before provision for income taxes										(Loss) income before provision for income taxes	(4.5)		10.0		1.9		8.9
Provision for income taxes										Provision for income taxes	1.0		2.1		1.2		1.4
Net (loss) income										Net (loss) income	(5.5)		7.9		0.7		7.5
Less: net income attributable to noncontrolling interests										Less: net income attributable to noncontrolling interests	0.2		0.2		0.2		0.2
Net (loss) income attributable to Bloomin’ Brands										Net (loss) income attributable to Bloomin’ Brands	(5.7)	%	7.7	%	0.5	%	7.3	%

________________

(1)As a percentage of Restaurant sales.

*Less than 1/10th of one percent of Total revenues.

~~RESTAURANT SALES~~

REVENUES

Restaurant sales

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


(dollars in millions)	(dollars in millions)	THIRTEEN WEEKS ENDED		THIRTY-NINE WEEKS ENDED		(dollars in millions)	THIRTEEN WEEKS ENDED		TWENTY-SIX WEEKS ENDED
For the periods ended September 27, 2020		$	766.5	$	2,339.0
For the periods ended June 27, 2021						For the periods ended June 27, 2021	$	1,055.2	$	2,034.7
Change from:	Change from:					Change from:
Comparable restaurant sales(1)	Comparable restaurant sales(1)	218.4		696.1		Comparable restaurant sales(1)	37.8		179.2
Restaurant openings(1)	Restaurant openings(1)	14.0		41.3		Restaurant openings(1)	14.0		26.7
Effect of foreign currency translation	Effect of foreign currency translation	2.3		(15.6)		Effect of foreign currency translation	11.7		8.6
Restaurant closures(1)	Restaurant closures(1)	(4.5)		(29.4)		Restaurant closures(1)	(9.8)		(16.7)

For the periods ended September 26, 2021		$	996.7	$	3,031.4
For the periods ended June 26, 2022						For the periods ended June 26, 2022	$	1,108.9	$	2,232.5

____________________

(1)

~~The increase in Restaurant sales during the thirteen weeks ended September 26, 2021 was primarily due to: (i) higher~~Summation of quarterly changes for restaurant openings, closures and comparable restaurant sales ~~from in-restaurant dining and strong retention~~will not total to annual amounts as the restaurants that meet the definition of ~~off-premises sales and (ii)~~each will differ each period based on when the restaurant opened or closed.

3732

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BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

The increase in Restaurant sales during the thirteen weeks ended June 26, 2022 was primarily due to: (i) higher comparable restaurant sales, primarily in Brazil, (ii) the opening of 3142 new restaurants not included in our comparable restaurant sales ~~base. The increase in Restaurant sales was partially offset by the closure of 15 restaurants since June 26, 2020.~~

~~The increase in Restaurant sales during the thirty-nine weeks ended September 26, 2021 was primarily due to: (i) higher comparable restaurant sales from in-restaurant dining~~base and strong retention of off-premises sales and (ii) the opening of 37 new restaurants not included in our comparable restaurant sales base. The increase in Restaurant sales was partially offset by the closure of 45 restaurants since December 29, 2019 and(iii) the effect of foreign currency translation of the Brazilian Real relative to the U.S. dollar. The increase in Restaurant sales was partially offset by the closure of 21 restaurants since March 28, 2021.

The increase in Restaurant sales during the twenty-six weeks ended June 26, 2022 was primarily due to: (i) higher comparable restaurant sales, primarily attributable to increases in average check per person, (ii) the opening of 45 new restaurants not included in our comparable restaurant sales base and (iii) the effect of foreign currency translation of the Brazilian Real relative to the U.S. dollar. The increase in Restaurant sales was partially offset by the closure of 22 restaurants since December 27, 2020.

Average Restaurant Unit Volumes and Operating Weeks

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


		THIRTEEN WEEKS ENDED				THIRTY-NINE WEEKS ENDED					THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
		SEPTEMBER 26, 2021		SEPTEMBER 27, 2020		SEPTEMBER 26, 2021		SEPTEMBER 27, 2020			JUNE 26, 2022		JUNE 27, 2021			JUNE 26, 2022		JUNE 27, 2021
Average restaurant unit volumes (weekly):	Average restaurant unit volumes (weekly):									Average restaurant unit volumes (weekly):
U.S.	U.S.									U.S.
Outback Steakhouse	Outback Steakhouse	$	70,849	$	59,929	$	74,163	$	58,771	Outback Steakhouse	$	77,941	$	78,201		$	79,246	$	75,813
Carrabba’s Italian Grill	Carrabba’s Italian Grill	$	61,518	$	47,940	$	62,910	$	46,230	Carrabba’s Italian Grill	$	66,016	$	66,258		$	66,954	$	63,605
Bonefish Grill	Bonefish Grill	$	57,844	$	42,439	$	58,626	$	40,988	Bonefish Grill	$	64,113	$	63,772		$	65,193	$	59,014
Fleming’s Prime Steakhouse & Wine Bar	Fleming’s Prime Steakhouse & Wine Bar	$	95,777	$	58,989	$	94,064	$	59,014	Fleming’s Prime Steakhouse & Wine Bar	$	112,900	$	105,891		$	115,141	$	93,204
International	International									International
Outback Steakhouse - Brazil (1)	Outback Steakhouse - Brazil (1)	$	49,841	$	23,919	$	40,848	$	36,884	Outback Steakhouse - Brazil (1)	$	61,210	$	29,569		$	57,645	$	36,205

Operating weeks:	Operating weeks:									Operating weeks:
U.S.	U.S.									U.S.
Outback Steakhouse	Outback Steakhouse	7,344		7,365		22,089		22,330		Outback Steakhouse	7,317		7,362			14,637		14,745
Carrabba’s Italian Grill	Carrabba’s Italian Grill	2,587		2,587		7,761		7,887		Carrabba’s Italian Grill	2,578		2,587			5,165		5,174
Bonefish Grill	Bonefish Grill	2,327		2,366		7,004		7,300		Bonefish Grill	2,269		2,337			4,554		4,677
Fleming’s Prime Steakhouse & Wine Bar	Fleming’s Prime Steakhouse & Wine Bar	832		845		2,489		2,575		Fleming’s Prime Steakhouse & Wine Bar	832		832			1,664		1,657
International	International									International
Outback Steakhouse - Brazil	Outback Steakhouse - Brazil	1,485		1,358		4,362		4,015		Outback Steakhouse - Brazil	1,644		1,465			3,226		2,877

____________________

(1)Translated at average exchange rates of ~~5.15~~4.89 and ~~5.34~~5.45 for the thirteen weeks ended ~~September~~June 26, ~~2021~~2022 and ~~September~~June 27, ~~2020,~~2021, respectively, and ~~5.27~~5.15 and ~~4.60~~5.36 for the ~~thirty-nine~~twenty-six weeks ended ~~September~~June 26, ~~2021~~2022 and ~~September~~June 27, ~~2020,~~2021, respectively.

3833

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BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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

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


		THIRTEEN WEEKS ENDED						THIRTY-NINE WEEKS ENDED							THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
		SEPTEMBER 26, 2021				SEPTEMBER 27, 2020		SEPTEMBER 26, 2021				SEPTEMBER 27, 2020			JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
		COMPARABLE TO 2019 (1)		COMPARABLE TO 2020		COMPARABLE TO 2019		COMPARABLE TO 2019 (1)		COMPARABLE TO 2020		COMPARABLE TO 2019
Year over year percentage change:	Year over year percentage change:													Year over year percentage change:
Comparable restaurant sales (stores open 18 months or more):	Comparable restaurant sales (stores open 18 months or more):													Comparable restaurant sales (stores open 18 months or more):
U.S. ~~(2)~~(1)	U.S. ~~(2)~~(1)													U.S. ~~(2)~~(1)
Outback Steakhouse	Outback Steakhouse	6.0	%	18.3	%	(10.4)	%	3.5	%	25.3	%	(17.4)	%	Outback Steakhouse	(1.1)	%	65.8	%	3.9	%	28.8	%
Carrabba’s Italian Grill	Carrabba’s Italian Grill	17.1	%	28.8	%	(9.0)	%	10.6	%	35.1	%	(18.1)	%	Carrabba’s Italian Grill	(1.0)	%	84.3	%	5.0	%	38.4	%
Bonefish Grill	Bonefish Grill	5.7	%	36.6	%	(22.5)	%	(2.7)	%	41.2	%	(31.0)	%	Bonefish Grill	(1.1)	%	141.2	%	9.2	%	43.5	%
Fleming’s Prime Steakhouse & Wine Bar	Fleming’s Prime Steakhouse & Wine Bar	28.0	%	59.6	%	(20.3)	%	10.8	%	56.9	%	(29.7)	%	Fleming’s Prime Steakhouse & Wine Bar	6.0	%	182.6	%	23.1	%	55.6	%
Combined U.S.	Combined U.S.	9.5	%	25.5	%	(12.8)	%	4.3	%	31.4	%	(20.7)	%	Combined U.S.	(0.4)	%	84.6	%	6.4	%	34.4	%
International	International													International
Outback Steakhouse - Brazil ~~(3)~~(2)	Outback Steakhouse - Brazil ~~(3)~~(2)	(5.1)	%	109.8	%	(54.8)	%	(18.9)	%	29.4	%	(36.9)	%	Outback Steakhouse - Brazil ~~(3)~~(2)	95.7	%	78.8	%	61.1	%	2.7	%

Traffic:	Traffic:													Traffic:
U.S.	U.S.													U.S.
Outback Steakhouse	Outback Steakhouse	(0.8)	%	14.8	%	(13.6)	%	(2.1)	%	19.6	%	(18.1)	%	Outback Steakhouse	(8.7)	%	51.4	%	(5.0)	%	21.9	%
Carrabba’s Italian Grill	Carrabba’s Italian Grill	12.2	%	27.1	%	(11.7)	%	7.8	%	27.0	%	(15.1)	%	Carrabba’s Italian Grill	(7.5)	%	57.2	%	(2.5)	%	27.0	%
Bonefish Grill	Bonefish Grill	5.2	%	25.6	%	(14.7)	%	(1.7)	%	23.4	%	(19.4)	%	Bonefish Grill	(8.6)	%	52.4	%	(1.0)	%	22.4	%
Fleming’s Prime Steakhouse & Wine Bar	Fleming’s Prime Steakhouse & Wine Bar	14.4	%	48.4	%	(23.3)	%	1.8	%	38.1	%	(26.6)	%	Fleming’s Prime Steakhouse & Wine Bar	(2.9)	%	97.0	%	11.1	%	33.5	%
Combined U.S.	Combined U.S.	2.9	%	19.3	%	(13.6)	%	(0.1)	%	21.9	%	(17.9)	%	Combined U.S.	(8.3)	%	53.6	%	(3.5)	%	23.2	%
International	International													International
Outback Steakhouse - Brazil	Outback Steakhouse - Brazil	1.9	%	62.5	%	(37.6)	%	(8.2)	%	25.2	%	(25.9)	%	Outback Steakhouse - Brazil	57.8	%	63.0	%	42.0	%	8.9	%

Average check per person (4):
Average check per person (3):														Average check per person (3):
U.S.	U.S.													U.S.
Outback Steakhouse	Outback Steakhouse	6.8	%	3.5	%	3.2	%	5.6	%	5.7	%	0.7	%	Outback Steakhouse	7.6	%	14.4	%	8.9	%	6.9	%
Carrabba’s Italian Grill	Carrabba’s Italian Grill	4.9	%	1.7	%	2.7	%	2.8	%	8.1	%	(3.0)	%	Carrabba’s Italian Grill	6.5	%	27.1	%	7.5	%	11.4	%
Bonefish Grill	Bonefish Grill	0.5	%	11.0	%	(7.8)	%	(1.0)	%	17.8	%	(11.6)	%	Bonefish Grill	7.5	%	88.8	%	10.2	%	21.1	%
Fleming’s Prime Steakhouse & Wine Bar	Fleming’s Prime Steakhouse & Wine Bar	13.6	%	11.2	%	3.0	%	9.0	%	18.8	%	(3.1)	%	Fleming’s Prime Steakhouse & Wine Bar	8.9	%	85.6	%	12.0	%	22.1	%
Combined U.S.	Combined U.S.	6.6	%	6.2	%	0.8	%	4.4	%	9.5	%	(2.8)	%	Combined U.S.	7.9	%	31.0	%	9.9	%	11.2	%
International	International													International
Outback Steakhouse - Brazil	Outback Steakhouse - Brazil	(6.0)	%	45.5	%	(16.2)	%	(10.3)	%	5.5	%	(11.0)	%	Outback Steakhouse - Brazil	37.3	%	22.2	%	19.2	%	(4.5)	%

____________________

(1)Represents comparable restaurant sales, traffic and average check per person increases (decreases) relative to fiscal year 2019 for improved comparability due to the impact of COVID-19 on fiscal year 2020 restaurant sales.

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

~~(3)~~(2)Excludes the effect of fluctuations in foreign currency rates. Includes trading day impact from calendar period reporting.

~~(4)~~(3)Average check per person includes the impact of menu pricing changes, product mix and discounts.

Table of Contents

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Franchise and other revenues


		THIRTEEN WEEKS ENDED				THIRTY-NINE WEEKS ENDED				THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in millions)	(dollars in millions)	SEPTEMBER 26, 2021		SEPTEMBER 27, 2020		SEPTEMBER 26, 2021		SEPTEMBER 27, 2020			(dollars in millions)	JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
Franchise revenues ~~(1)~~	Franchise revenues ~~(1)~~	$	12.9	$	4.2	$	31.9	$	15.7		Franchise revenues ~~(1)~~	$	12.6	$	12.2	$	26.0	$	19.0
Other revenues ~~(2)~~(1)	Other revenues ~~(2)~~(1)	0.8		0.6		12.0		3.4			Other revenues ~~(2)~~(1)	3.6		9.9		7.2		11.2
Franchise and other revenues	Franchise and other revenues	$	13.7	$	4.8	$	43.9	$	19.1		Franchise and other revenues	$	16.2	$	22.1	$	33.2	$	30.2

____________________

(1)~~Represents franchise royalties, advertising fees and initial franchise fees. Franchise revenues increased during~~During the thirteen and ~~thirty-nine~~twenty-six weeks ended ~~September 26,~~June 27, 2021, ~~primarily due to higher franchise sales as a result~~we recognized $6.3 million of ~~the impact of COVID-19 on 2020 franchise sales.~~

~~(2)~~The thirteen and thirty-nine weeks ended September 26, 2021 include an adjustment of $(3.2) million to reduce our initial recorded estimate and net $3.1 million benefit from the recognition of recoverable PIS and COFINS taxes, respectively, within other revenues in connection with favorable court rulings in Brazil regarding the calculation methodology and taxable base of PIS and COFINS taxes. The amount recognized as a result of the favorable court rulings primarily represents refundable PIS and COFINS taxes for prior ~~years.~~years, including accrued interest.

COSTS AND EXPENSES

Food and beverage costs


		THIRTEEN WEEKS ENDED								THIRTY-NINE WEEKS ENDED									THIRTEEN WEEKS ENDED								TWENTY-SIX WEEKS ENDED
(dollars in millions)	(dollars in millions)	SEPTEMBER 26, 2021			SEPTEMBER 27, 2020			CHANGE		SEPTEMBER 26, 2021			SEPTEMBER 27, 2020			CHANGE		(dollars in millions)	JUNE 26, 2022			JUNE 27, 2021			CHANGE		JUNE 26, 2022			JUNE 27, 2021			CHANGE
Food and beverage costs	Food and beverage costs	$	304.3		$	230.5				$	908.3		$	731.0				Food and beverage costs	$	364.5		$	312.1				$	723.8		$	604.0
% of Restaurant sales	% of Restaurant sales	30.5		%	30.1		%	0.4	%	30.0		%	31.3		%	(1.3)	%	% of Restaurant sales	32.9		%	29.6		%	3.3	%	32.4		%	29.7		%	2.7	%

Food and beverage costs increased as a percentage of Restaurant sales during the thirteen weeks ended June 26, 2022 as compared to the thirteen weeks ended June 27, 2021 primarily due to 4.9% from commodity inflation, partially offset by a decrease as a percentage of Restaurant sales of 1.6% from increases in average check per person, primarily driven by an increase in menu pricing.

Food and beverage costs increased as a percentage of Restaurant sales during the ~~thirteen~~twenty-six weeks ended ~~September~~June 26, ~~2021~~2022 as compared to the ~~thirteen~~twenty-six weeks ended ~~September~~June 27, ~~2020~~2021 primarily due to ~~1.0%~~4.2% from commodity inflation, partially offset by a decrease as a percentage of Restaurant sales of ~~0.5% from increases in average check per person including changes in product mix.~~

~~Food and beverage costs decreased as a percentage of Restaurant sales during the thirty-nine weeks ended September 26, 2021as compared to the thirty-nine weeks ended September 27, 2020 primarily due to: (i) 0.8%~~1.5% from increases in average check per person, primarily driven by reduced discounting, (ii) 0.4% from the impact of certain cost savings initiatives and (iii) 0.3% from inventory obsolescence and spoilage costs during 2020 associated with the COVID-19 pandemic. These decreases were partially offset by an increase ~~as a percentage of Restaurant sales of 0.2% from commodity inflation.~~in menu pricing.

In aggregate, our menu pricing increases during 2022 ~~we anticipate approximately 10%~~are behind our current level of commodity inflation.

Labor and other related expenses


		THIRTEEN WEEKS ENDED								THIRTY-NINE WEEKS ENDED									THIRTEEN WEEKS ENDED								TWENTY-SIX WEEKS ENDED
(dollars in millions)	(dollars in millions)	SEPTEMBER 26, 2021			SEPTEMBER 27, 2020			CHANGE		SEPTEMBER 26, 2021			SEPTEMBER 27, 2020			CHANGE		(dollars in millions)	JUNE 26, 2022			JUNE 27, 2021			CHANGE		JUNE 26, 2022			JUNE 27, 2021			CHANGE
Labor and other related	Labor and other related	$	290.2		$	246.9				$	859.9		$	761.7				Labor and other related	$	308.8		$	295.0				$	621.3		$	569.6
% of Restaurant sales	% of Restaurant sales	29.1		%	32.2		%	(3.1)	%	28.4		%	32.6		%	(4.2)	%	% of Restaurant sales	27.8		%	28.0		%	(0.2)	%	27.8		%	28.0		%	(0.2)	%

Labor and other related expenses decreased as a percentage of Restaurant sales during the thirteen weeks ended ~~September~~June 26, ~~2021~~2022 as compared to the thirteen weeks ended ~~September~~June 27, ~~2020~~2021 primarily due ~~to 4.3%~~to: (i) 2.3% from leveraging increased restaurant sales due to the net benefit of lapping the impact of COVID-19, primarily in Brazil, and increases in average check per person and (ii) 0.5% from the impact of certain cost saving initiatives. These decreases were partially offset by an increase as a percentage of Restaurant sales of ~~1.1%~~2.9% from higher labor costs primarily due to wage rate ~~increases.~~inflation.

Labor and other related expenses decreased as a percentage of Restaurant sales during the twenty-six weeks ended June 26, 2022 as compared to the twenty-six weeks ended June 27, 2021 primarily due to: (i) 2.1% from leveraging increased restaurant sales due to increases in average check per person and the net benefit of lapping the impact of COVID-19, primarily in Brazil, and (ii) 0.4% from the impact of certain cost saving initiatives. These decreases

Table of Contents

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Labor and other related expenses decreased as a percentage of Restaurant sales during the thirty-nine weeks ended September 26, 2021 as compared to the thirty-nine weeks ended September 27, 2020 primarily due to 4.4% from leveraging increased restaurant sales and 1.1% from the 2020 impact of net relief pay. These decreases were partially offset by ~~increases~~an increase as a percentage of Restaurant sales of ~~0.6%~~2.5% from higher labor cost primarily due to wage rate ~~increases and 0.5% from higher management bonus.~~inflation.

~~In 2022, we anticipate mid-single digit labor cost inflation.~~

Other restaurant operating expenses

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
(dollars in millions) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 CHANGE SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 CHANGE
Other restaurant operating $ 299.8 $ 207.3 $ 762.5 $ 631.7
% of Restaurant sales 30.1 % 27.0 % 3.1 % 25.2 % 27.0 % (1.8) %

~~During the thirteen weeks ended September 26, 2021, we entered into the Royalty Termination Agreement with the Carrabba’s Founders for $61.9 million in cash. See Note 19 -~~ ~~Commitments and Contingencies~~ for additional details. We recorded Carrabba’s Italian Grill royalty expense of $3.0 million during the thirty-nine weeks ended September 26, 2021, and $3.8 million and $6.6 million during fiscal years 2020 and 2019, respectively.


	THIRTEEN WEEKS ENDED								TWENTY-SIX WEEKS ENDED
(dollars in millions)	JUNE 26, 2022			JUNE 27, 2021			CHANGE		JUNE 26, 2022			JUNE 27, 2021			CHANGE
Other restaurant operating	$	263.5		$	233.5				$	522.6		$	462.7
% of Restaurant sales	23.8		%	22.1		%	1.7	%	23.4		%	22.7		%	0.7	%

Other restaurant operating expenses increased as a percentage of Restaurant sales during the thirteen weeks ended ~~September~~June 26, ~~2021~~2022 as compared to the thirteen weeks ended ~~September~~June 27, ~~2020~~2021 primarily due to ~~6.2% from the Carrabba’s Italian Grill royalty termination and 1.2%~~2.4% from higher operating expenses including utilities, ~~rent~~primarily due to inflation, and ~~operating expense. These increases were~~0.6% from higher advertising expense, partially offset by ~~decreases~~a decrease as a percentage of Restaurant sales ~~of: (i) 3.5%~~of 1.5% from leveraging increased restaurant sales ~~(ii) 0.6% from lower advertising expense~~due to the net benefit of lapping the impact of COVID-19, primarily in Brazil, and ~~(iii) 0.4% from a decrease~~increases in ~~off-premises related costs.~~average check per person.

Other restaurant operating expenses ~~decreased~~increased as a percentage of Restaurant sales during the ~~thirty-nine~~twenty-six weeks ended ~~September~~June 26, ~~2021~~2022 as compared to the ~~thirty-nine~~twenty-six weeks ended ~~September~~June 27, ~~2020~~2021 primarily due ~~to: (i) 3.0%~~to 1.9% from ~~leveraging increased restaurant sales, (ii) 1.3%~~higher operating expenses including utilities, primarily due to inflation, and 0.6% from ~~lower~~higher advertising expense, ~~and (iii) 0.3% from a decrease in off-premises related costs. These decreases were~~ partially offset by ~~increases~~a decrease as a percentage of Restaurant sales of ~~2.0%~~1.9% from leveraging increased restaurant sales due to increases in average check per person and the ~~Carrabba’s Italian Grill royalty termination and 0.6% from higher operating and utilities expense.~~net benefit of lapping the impact of COVID-19, primarily in Brazil.

~~Depreciation and amortization~~

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
(dollars in millions) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 CHANGE SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 CHANGE
Depreciation and amortization $ 40.8 $ 43.4 $ (2.6) $ 122.6 $ 137.5 $ (14.9)

Depreciation and amortization expense decreased during the thirteen weeks ended September 26, 2021 as compared to the thirteen weeks ended September 27, 2020 primarily due to decreased capital expenditures.

Depreciation and amortization expense decreased during the thirty-nine weeks ended September 26, 2021 as compared to the thirty-nine weeks ended September 27, 2020 primarily due to decreased capital expenditures, impairment and the effect of foreign currency translation.

~~Table of Contents~~

~~BLOOMIN’ BRANDS, INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued~~

General and administrative

General and administrative expense includes salaries and benefits, management incentive programs, related payroll tax and benefits, other employee-related costs and professional services. Following is a summary of the change in General and administrative expense for the periods indicated:


(dollars in millions)	(dollars in millions)	THIRTEEN WEEKS ENDED		THIRTY-NINE WEEKS ENDED		(dollars in millions)	THIRTEEN WEEKS ENDED		TWENTY-SIX WEEKS ENDED
For the periods ended September 27, 2020		$	57.4	$	197.7
For the periods ended June 27, 2021						For the periods ended June 27, 2021	$	66.5	$	123.7
Change from:	Change from:					Change from:

Incentive compensation						Incentive compensation	(6.1)		(7.6)
Employee stock-based compensation	Employee stock-based compensation	2.9		9.1		Employee stock-based compensation	(4.8)		(4.7)
Incentive compensation		1.8		5.7
Transformational costs		(1.8)		(9.4)
Travel and entertainment		(1.1)		(3.5)

Severance		(1.0)		(10.5)

Expected credit losses and contingent lease liabilities		(0.1)		(6.6)
Other		0.8		0.1
For the periods ended September 26, 2021		$	58.9	$	182.6

Compensation, benefits and payroll tax						Compensation, benefits and payroll tax	2.3		3.7
Travel and entertainment						Travel and entertainment	1.4		3.0

Other						Other	(0.1)		(0.2)
For the periods ended June 26, 2022						For the periods ended June 26, 2022	$	59.2	$	117.9

Provision for impaired assets and restaurant closings


		THIRTEEN WEEKS ENDED						THIRTY-NINE WEEKS ENDED							THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
(dollars in millions)	(dollars in millions)	SEPTEMBER 26, 2021		SEPTEMBER 27, 2020		CHANGE		SEPTEMBER 26, 2021		SEPTEMBER 27, 2020		CHANGE		(dollars in millions)	JUNE 26, 2022		JUNE 27, 2021		CHANGE		JUNE 26, 2022		JUNE 27, 2021		CHANGE
Provision for impaired assets and restaurant closings	Provision for impaired assets and restaurant closings	$	1.6	$	(0.1)	$	1.7	$	9.0	$	66.2	$	(57.2)	Provision for impaired assets and restaurant closings	$	0.2	$	5.2	$	(5.0)	$	2.0	$	7.4	$	(5.4)

During the thirty-nine weeks ended September 27, 2020, we recognized asset impairment and closure charges of $56.4 million and $3.6 million within the U.S. and international segments, respectively, primarily related to the COVID-19 pandemic. Included in the amount for the thirty-nine weeks ended September 27, 2020 were pre-tax asset impairments and closure costs of $20.9 million in connection with the closure of 22 restaurants and from the update of certain cash flow assumptions, including lease renewal considerations. We also recognized asset impairment charges related to transformational initiatives of $6.3 million during the thirty-nine weeks ended September 27, 2020, which were not allocated to our operating segments.

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

~~See Note 4 -~~ ~~Impairments and Exit Costs~~ ~~of the Notes to Consolidated Financial Statements for further information.~~

~~Income (loss) from operations~~

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
(dollars in millions) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 CHANGE SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 CHANGE
Income (loss) from operations $ 14.8 $ (14.3) $ 29.1 $ 230.5 $ (167.7) $ 398.2
% of Total revenues 1.5 % (1.8) % 3.3 % 7.5 % (7.1) % 14.6 %

Income from operations generated during the thirteen weeks ended September 26, 2021 as compared to Loss from operations during the thirteen weeks ended September 27, 2020 was primarily due to higher comparable restaurant sales and lower advertising expense. These increases were partially offset by: (i) the Carrabba’s Italian Grill royalty termination, (ii) higher labor costs and commodity inflation and (iii) higher utilities, rent and operating expense.

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BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Income from operations generated during the thirty-nine weeks ended September 26, 2021 as compared to Loss from operations during the thirty-nine weeks ended September 27, 2020 was primarily due to: (i) higher comparable restaurant sales, (ii) COVID-19 pandemic related charges during 2020, (iii) lower advertising expense, (iv) the impact of restructuring and transformational initiatives during 2020, (v) the 2020 impact of net relief pay and (vi) the impact of certain cost savings initiatives. These increases were partially offset by: (i) the Carrabba’s Italian Grill royalty termination, (ii) higher labor costs and commodity inflation, (iii) an increase in incentive compensation, (iv) higher operating and utilities expense and (v) higher management bonus.

~~Interest expense, net~~


		THIRTEEN WEEKS ENDED						THIRTY-NINE WEEKS ENDED							THIRTEEN WEEKS ENDED									TWENTY-SIX WEEKS ENDED
(dollars in millions)	(dollars in millions)	SEPTEMBER 26, 2021		SEPTEMBER 27, 2020		CHANGE		SEPTEMBER 26, 2021		SEPTEMBER 27, 2020		CHANGE		(dollars in millions)	JUNE 26, 2022			JUNE 27, 2021			CHANGE			JUNE 26, 2022			JUNE 27, 2021			CHANGE
Interest expense, net		$	14.2	$	18.3	$	(4.1)	$	43.9	$	46.6	$	(2.7)
Income from operations														Income from operations	$	87.7		$	124.6		$	(36.9)		$	195.0		$	215.6		$	(20.6)
% of Total revenues														% of Total revenues	7.8		%	11.6		%	(3.8)		%	8.6		%	10.4		%	(1.8)		%

The decrease in ~~Interest expense, net for~~Income from operations generated during the thirteen weeks ended ~~September~~June 26, ~~2021~~2022 as compared to the thirteen weeks ended ~~September~~June 27, ~~2020~~2021 was primarily due to: (i) commodity inflation, (ii) higher operating expenses including utilities, (iii) higher labor costs primarily due to ~~lower revolver~~wage rate inflation, (iv) higher advertising expense and ~~term loan borrowings and~~(v) the ~~discontinuance~~impact of ~~debt discount amortization~~favorable court rulings in Brazil related to ~~our 2025 Notes resulting from the adoption of ASU No. 2020-06.~~value-added taxes recorded in other revenues during 2021. These decreases were partially offset ~~by an increase~~by: (i) increases in ~~interest expense from our 2029 Notes issued~~average check per person, (ii) the net benefit of lapping the impact of COVID-19 in ~~April 2021.~~Brazil, (iii) lower incentive compensation and (iv) the impact of certain cost saving initiatives.

The decrease in ~~Interest expense, net for~~Income from operations generated during the ~~thirty-nine~~twenty-six weeks ended ~~September~~June 26, ~~2021~~2022 as compared to the ~~thirty-nine~~twenty-six weeks ended ~~September~~June 27, ~~2020~~2021 was primarily due to: (i) ~~lower revolver~~commodity inflation, (ii) higher labor costs primarily due to wage rate inflation, (iii) higher operating expenses including utilities and term loan borrowings, (ii) the discontinuance of debt discount amortization related to our 2025 Notes resulting from the adoption of ASU No. 2020-06 and (iii) lower interest rates on our unhedged variable rate debt.(iv) higher advertising expense. These decreases were partially offset byby: (i) increases in ~~interest expense from our 2025 Notes issued~~average check per person, (ii) the net benefit of lapping the impact of COVID-19 in ~~May 2020~~Brazil and ~~our 2029 Notes issued in April 2021.~~(iii) the impact of certain cost saving initiatives.

~~(Benefit) provision for income taxes~~

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 CHANGE SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 CHANGE
Effective income tax rate (NM) 45.4 % (NM) 13.5 % 32.7 % (19.2) %

~~________________~~

~~NM Not meaningful.~~Loss on extinguishment and modification of debt and Loss on fair value adjustment of derivatives, net

~~For~~In connection with the 2025 Notes Partial Repurchase, we recognized a loss on extinguishment of debt of $104.7 million and a loss on fair value adjustment of derivatives, net, of $17.7 million during the thirteen weeks ended ~~September~~June 26, ~~2021,~~2022.

See Note 8 - Convertible Senior Notes of the ~~benefit~~Notes to Consolidated Financial Statements for further information.

Provision for income taxes includes the impact of changes to the estimate of the forecasted full-year effective tax rate relative to prior quarters in 2021. The benefit of FICA tax credits on certain employees’ tips reduced the effective tax rate as a result of forecasted pre-tax income. For the thirteen weeks ended September 27, 2020, the benefit of FICA tax credits on certain employees’ tips increased the effective tax rate as a result of forecasted pre-tax book loss.


	THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
	JUNE 26, 2022		JUNE 27, 2021		CHANGE		JUNE 26, 2022		JUNE 27, 2021		CHANGE


Effective income tax rate	(23.0)	%	21.1	%	(44.1)	%	63.2	%	15.9	%	47.3	%

The effective income tax rate for the ~~thirty-nine~~thirteen weeks ended ~~September~~June 26, ~~2021 decreased~~2022 includes the impact of nondeductible losses associated with the 2025 Notes Partial Repurchase which, relative to a pre-tax book loss during the quarter, resulted in a negative effective income tax rate.

The effective income tax rate for the twenty-six weeks ended June 26, 2022 increased by ~~19.2~~47.3 percentage points as compared to the ~~thirty-nine~~twenty-six weeks ended ~~September~~June 27, ~~2020.~~2021. The ~~decrease~~increase was primarily due to the ~~benefit of FICA tax credits on certain employees’ tips reducing~~non-deductible losses

associated with the ~~effective tax rate in 2021 as a result of forecasted pre-tax book income as compared to increasing~~2025 Notes Partial Repurchase recorded during the ~~effective tax rate in 2020 as a result of forecasted pre-tax book loss.~~twenty-six weeks ended June 26, 2022.

~~SEGMENT PERFORMANCE~~

We consider 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

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BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

performance is assessed by our CEO, whom we have determined to be our CODM. We aggregate our operating segments into two reportable segments, U.S. and international. The U.S. segment includes all restaurants operating in the U.S. while restaurants operating outside the U.S. are included in the international segment. SEGMENT PERFORMANCE

The following is a summary of reporting segments:

REPORTABLE SEGMENT (1)

CONCEPT

GEOGRAPHIC LOCATION

U.S.

Outback Steakhouse

United States of America

Carrabba’s Italian Grill

Bonefish Grill

Fleming’s Prime Steakhouse & Wine Bar

International

Outback Steakhouse

Brazil, Hong Kong/China

Carrabba’s Italian Grill (Abbraccio)

Brazil

_________________

(1)Includes franchise locations.

Revenues for both segments include only transactions with customers and exclude intersegment revenues. Excluded from Income ~~(loss)~~ from operations for U.S. and international are certain legal and corporate costs not directly related to the performance of the segments, most stock-based compensation expenses and certain bonus expenses.

During the thirteen and thirty-nine weeks ended September 27, 2020, we recorded $4.2 million and $28.8 million, respectively, of pre-tax charges as a part of transformational initiatives. These costs were primarily recorded within General and administrative expense and Provision for impaired assets and restaurant closings and were not allocated to our segments since our CODM does not consider the impact of transformational initiatives when assessing segment performance.

Refer to Note 2016 - Segment Reporting of the Notes to Consolidated Financial Statements for reconciliations of segment income ~~(loss)~~ from operations to the consolidated operating results.

Restaurant-level operating margin is widely regarded in the industry as a useful metric to evaluate restaurant-level operating efficiency and performance of ongoing restaurant-level operations, and we use it for these purposes, overall and particularly within our two segments. See the Overview-Key Financial Performance Indicators and Non-GAAP Financial Measures sections of Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional details regarding the calculation of restaurant-level operating margin.

U.S. Segment


		THIRTEEN WEEKS ENDED						THIRTY-NINE WEEKS ENDED							THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
(dollars in thousands)	(dollars in thousands)	SEPTEMBER 26, 2021			SEPTEMBER 27, 2020			SEPTEMBER 26, 2021			SEPTEMBER 27, 2020			(dollars in thousands)	JUNE 26, 2022			JUNE 27, 2021			JUNE 26, 2022			JUNE 27, 2021
Revenues	Revenues													Revenues
Restaurant sales	Restaurant sales	$	898,790		$	719,406		$	2,789,142		$	2,141,062		Restaurant sales	$	985,927		$	990,293		$	2,009,562		$	1,890,352
Franchise and other revenues	Franchise and other revenues	13,943			2,332			31,567			12,253			Franchise and other revenues	12,700			12,765			25,472			17,624
Total revenues	Total revenues	$	912,733		$	721,738		$	2,820,709		$	2,153,315		Total revenues	$	998,627		$	1,003,058		$	2,035,034		$	1,907,976

Restaurant-level operating margin	Restaurant-level operating margin	10.0		%	11.4		%	17.1		%	9.4		%	Restaurant-level operating margin	15.1		%	21.7		%	16.3		%	20.5		%
Income (loss) from operations		$	47,294		$	29,574		$	334,326		$	(21,968)
Operating income (loss) margin		5.2		%	4.1		%	11.9		%	(1.0)		%
Income from operations														Income from operations	$	104,620		$	165,297		$	236,846		$	287,032
Operating income margin														Operating income margin	10.5		%	16.5		%	11.6		%	15.0		%

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BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Restaurant sales

Following is a summary of the change in U.S. segment Restaurant sales for the periods indicated:


(dollars in millions)	(dollars in millions)	THIRTEEN WEEKS ENDED		THIRTY-NINE WEEKS ENDED		(dollars in millions)	THIRTEEN WEEKS ENDED		TWENTY-SIX WEEKS ENDED (1)
For the periods ended September 27, 2020		$	719.4	$	2,141.1
For the periods ended June 27, 2021						For the periods ended June 27, 2021	$	990.3	$	1,890.4
Change from:	Change from:					Change from:
Restaurant closures						Restaurant closures	(9.8)		(16.7)
Comparable restaurant sales	Comparable restaurant sales	177.7		657.8		Comparable restaurant sales	(1.3)		122.2

Restaurant openings	Restaurant openings	6.2		19.0		Restaurant openings	6.7		13.7

Restaurant closures		(4.5)		(28.8)
For the periods ended September 26, 2021		$	898.8	$	2,789.1
For the periods ended June 26, 2022						For the periods ended June 26, 2022	$	985.9	$	2,009.6

____________________

(1)Summation of quarterly changes will not total to annual amounts as the restaurants that meet the definition of each change category will differ each period based on when the restaurant opened or closed.

The decrease in U.S. Restaurant sales during the thirteen weeks ended June 26, 2022 was primarily due to the closure of 21 restaurants since March 28, 2021, partially offset by the opening of 14 new restaurants not included in our comparable restaurant sales base.

The increase in U.S. Restaurant sales during the ~~thirteen~~twenty-six weeks ended ~~September~~June 26, ~~2021~~2022 was primarily due to: (i) higher comparable restaurant sales, ~~from in-restaurant dining and strong retention of off-premises sales~~primarily attributable to increases in average check per person and (ii) the opening of 1115 new restaurants not included in our comparable restaurant sales base. The increase in U.S. Restaurant sales was partially offset by the closure of 1522 restaurants since ~~June 26,~~December 27, 2020.

The increase in U.S. Restaurant sales during the thirty-nine weeks ended September 26, 2021 was primarily due to: (i) higher comparable restaurant sales from in-restaurant dining and strong retention of off-premises sales and (ii) the opening of 13 new restaurants not included in our comparable restaurant sales base. The increase in U.S. Restaurant sales was partially offset by the closure of 44 restaurants since December 29, 2019.

Income ~~(loss)~~ from operations

The ~~increase~~decrease in U.S. Income from operations generated during the thirteen and twenty-six weeks ended ~~September~~June 26, ~~2021~~2022 as compared to the thirteen and twenty-six weeks ended ~~September~~June 27, ~~2020~~2021 was primarily due to: (i) commodity inflation, (ii) higher labor cost primarily due to ~~an increase in comparable restaurant sales~~wage rate inflation, (iii) higher operating expenses including utilities and ~~lower~~(iv) higher advertising expense. These ~~increases~~decreases were partially offset by: (i) ~~the Carrabba’s Italian Grill royalty termination,~~increases in average check per person and (ii) ~~higher labor costs and commodity inflation and (iii) higher operating and utilities expense.~~

U.S. Income from operations generated during the thirty-nine weeks ended September 26, 2021 as compared to Loss from operations during the thirty-nine weeks ended September 27, 2020 was primarily due to: (i) an increase in comparable restaurant sales, (ii) COVID-19 pandemic related charges during 2020, (iii) lower advertising expense, (iv) the 2020 impact of net relief pay and (v) the impact of certain cost ~~savings~~saving initiatives. These increases were partially offset by: (i) the Carrabba’s Italian Grill royalty termination, (ii) higher labor costs and commodity inflation, (iii) higher management bonus and (iv) higher operating and utilities expense.

International Segment


		THIRTEEN WEEKS ENDED						THIRTY-NINE WEEKS ENDED							THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
(dollars in thousands)	(dollars in thousands)	SEPTEMBER 26, 2021			SEPTEMBER 27, 2020			SEPTEMBER 26, 2021			SEPTEMBER 27, 2020			(dollars in thousands)	JUNE 26, 2022			JUNE 27, 2021			JUNE 26, 2022			JUNE 27, 2021
Revenues	Revenues													Revenues
Restaurant sales	Restaurant sales	$	97,928		$	47,081		$	242,254		$	197,923		Restaurant sales	$	122,991		$	64,934		$	222,931		$	144,326
Franchise and other revenues	Franchise and other revenues	(198)			2,441			12,339			6,818			Franchise and other revenues	3,544			9,374			7,732			12,537
Total revenues	Total revenues	$	97,730		$	49,522		$	254,593		$	204,741		Total revenues	$	126,535		$	74,308		$	230,663		$	156,863

Restaurant-level operating margin	Restaurant-level operating margin	12.8		%	(1.5)		%	10.7		%	5.7		%	Restaurant-level operating margin	17.8		%	3.2		%	17.4		%	9.3		%
Income (loss) from operations		$	1,412		$	(7,926)		$	7,419		$	(18,209)
Operating income (loss) margin		1.4		%	(16.0)		%	2.9		%	(8.9)		%
Income from operations														Income from operations	$	14,126		$	2,470		$	23,010		$	6,007
Operating income margin														Operating income margin	11.2		%	3.3		%	10.0		%	3.8		%

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BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Restaurant sales

Following is a summary of the change in international segment Restaurant sales for the periods indicated:


(dollars in millions)	(dollars in millions)	THIRTEEN WEEKS ENDED		THIRTY-NINE WEEKS ENDED		(dollars in millions)	THIRTEEN WEEKS ENDED		TWENTY-SIX WEEKS ENDED
For the periods ended September 27, 2020		$	47.1	$	197.9
For the periods ended June 27, 2021						For the periods ended June 27, 2021	$	64.9	$	144.3
Change from:	Change from:					Change from:
Comparable restaurant sales(1)	Comparable restaurant sales(1)	40.7		38.3		Comparable restaurant sales(1)	39.1		57.0
Restaurant openings		7.8		22.3
Effect of foreign currency translation	Effect of foreign currency translation	2.3		(15.6)		Effect of foreign currency translation	11.7		8.6
Restaurant closures		—		(0.6)

For the periods ended September 26, 2021		$	97.9	$	242.3
Restaurant openings (1)						Restaurant openings (1)	7.3		13.0

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

____________________

(1)Summation of quarterly changes for restaurant openings and comparable restaurant sales will not total to annual amounts as the restaurants that meet the definition of each will differ each period based on when the restaurant opened.

The increase in international Restaurant sales during the thirteen weeks ended ~~September~~June 26, ~~2021~~2022 was primarily due toto: (i) higher comparable restaurant sales ~~principally attributable~~in Brazil, (ii) the effect of foreign currency translation of the Brazilian Real relative to the ~~impact of the COVID-19 pandemic on fiscal year 2020 international Restaurant sales~~U.S. dollar and (iii) the opening of 2028 new restaurants not included in our comparable restaurant sales base.

The increase in international Restaurant sales during the ~~thirty-nine~~twenty-six weeks ended ~~September~~June 26, ~~2021~~2022 was primarily due toto: (i) higher comparable restaurant sales ~~principally attributable to the impact of the COVID-19 pandemic on fiscal year 2020 international Restaurant sales and~~in Brazil, (ii) the opening of 2430 new restaurants not included in our comparable restaurant sales base ~~partially offset by~~and (iii) the effect of foreign currency translation of the Brazilian Real relative to the U.S. dollar.

Income ~~(loss)~~ from operations

~~International~~The increase in international Income from operations generated during the thirteen and twenty-six weeks ended ~~September~~June 26, ~~2021~~2022 as compared to ~~Loss from operations during~~ the thirteen and twenty-six weeks ended ~~September~~June 27, ~~2020~~2021 was primarily due ~~to:~~to an increase in restaurant-level operating margin, which includes: (i) ~~higher restaurant sales due to~~ the ~~reopening~~recovery of ~~restaurant~~in-restaurant dining ~~rooms~~in Brazil and the net impact of the COVID-19 pandemic during 2021, and (ii) increases in average check per person, ~~and (ii) a decrease in off-premises related costs. These increases were~~ partially offset ~~by: (i) higher labor costs, (ii) additional rent, utilities and~~by commodity inflation. The increase from international restaurant-level operating ~~expense, and (iii) commodity inflation.~~

~~International Income from operations generated during the thirty-nine weeks ended September 26, 2021 as compared to Loss from operations during the thirty-nine weeks ended September 27, 2020~~margin was ~~primarily due to: (i) higher restaurant sales due to the reopening of restaurant dining rooms and increases in average check per person and (ii) lower labor costs. These increases were~~ partially offset ~~by: (i) commodity inflation, (ii) additional utilities, operating and rent expense and (iii) incremental off-premises~~by the impact of favorable court rulings in Brazil related ~~costs.~~

to value-added taxes recorded in other revenues during 2021.

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BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Non-GAAP Financial Measures

Restaurant-level operating margin - The following tables reconcile consolidated and segment Income from operations and the corresponding margins to restaurant-level operating income and the corresponding margins for the periods indicated:


Consolidated	THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 26, 2022			JUNE 27, 2021			JUNE 26, 2022			JUNE 27, 2021

Income from operations	$	87,719		$	124,637		$	194,975		$	215,635
Operating income margin	7.8		%	11.6		%	8.6		%	10.4		%
Less:
Franchise and other revenues	16,244			22,139			33,204			30,161
Plus:
Depreciation and amortization	41,257			40,539			83,032			81,765
General and administrative	59,246			66,462			117,920			123,710
Provision for impaired assets and restaurant closings	193			5,177			2,032			7,377
Restaurant-level operating income	$	172,171		$	214,676		$	364,755		$	398,326
Restaurant-level operating margin	15.5		%	20.3		%	16.3		%	19.6		%

U.S.	THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 26, 2022			JUNE 27, 2021			JUNE 26, 2022			JUNE 27, 2021

Income from operations	$	104,620		$	165,297		$	236,846		$	287,032
Operating income margin	10.5		%	16.5		%	11.6		%	15.0		%
Less:
Franchise and other revenues	12,700			12,765			25,472			17,624
Plus:
Depreciation and amortization	33,545			33,579			68,303			67,224
General and administrative	23,648			22,953			47,093			44,045
Provision for impaired assets and restaurant closings	191			5,676			249			7,139
Restaurant-level operating income	$	149,304		$	214,740		$	327,019		$	387,816
Restaurant-level operating margin	15.1		%	21.7		%	16.3		%	20.5		%

International	THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 26, 2022			JUNE 27, 2021			JUNE 26, 2022			JUNE 27, 2021

Income from operations	$	14,126		$	2,470		$	23,010		$	6,007
Operating income margin	11.2		%	3.3		%	10.0		%	3.8		%
Less:
Franchise and other revenues	3,544			9,374			7,732			12,537
Plus:
Depreciation and amortization	6,020			5,565			11,556			11,285
General and administrative	5,331			4,116			10,259			8,721
Provision for impaired assets and restaurant closings	—			(708)			1,775			(1)
Restaurant-level operating income	$	21,933		$	2,069		$	38,868		$	13,475
Restaurant-level operating margin	17.8		%	3.2		%	17.4		%	9.3		%

Table of Contents

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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


	THIRTEEN WEEKS ENDED
	JUNE 26, 2022		JUNE 27, 2021

Restaurant sales	100.0	%	100.0	%

Food and beverage costs	32.9	%	29.6	%
Labor and other related	27.8	%	28.0	%
Other restaurant operating	23.8	%	22.1	%

Restaurant-level operating margin	15.5	%	20.3	%

	TWENTY-SIX WEEKS ENDED
	JUNE 26, 2022		JUNE 27, 2021

Restaurant sales	100.0	%	100.0	%

Food and beverage costs	32.4	%	29.7	%
Labor and other related	27.8	%	28.0	%
Other restaurant operating	23.4	%	22.7	%

Restaurant-level operating margin	16.3	%	19.6	%

Table of Contents

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Adjusted income from operations, Adjusted net income and Adjusted diluted earnings per share


	THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
(in thousands, except per share data)	JUNE 26, 2022			JUNE 27, 2021			JUNE 26, 2022			JUNE 27, 2021
Income from operations	$	87,719		$	124,637		$	194,975		$	215,635
Operating income margin	7.8		%	11.6		%	8.6		%	10.4		%
Adjustments:

Legal and other matters (1)	—			(6,337)			—			(6,337)






Total income from operations adjustments	—			(6,337)			—			(6,337)

Adjusted income from operations	$	87,719		$	118,300		$	194,975		$	209,298
Adjusted operating income margin	7.8		%	11.0		%	8.6		%	10.2		%



Diluted net (loss) income attributable to Bloomin’ Brands	$	(63,635)		$	82,545		$	11,876		$	152,098
Convertible senior notes if-converted method interest adjustment, net of tax (2)	—			—			—			691
Net (loss) income attributable to Bloomin’ Brands	(63,635)			82,545			11,876			151,407
Adjustments:
Income from operations adjustments	—			(6,337)			—			(6,337)
Loss on extinguishment and modification of debt (3)	107,630			2,073			107,630			2,073

Loss on fair value adjustment of derivatives, net (4)	17,685			—			17,685			—
Total adjustments, before income taxes	125,315			(4,264)			125,315			(4,264)
Adjustment to provision for income taxes (5)	1,322			1,243			1,322			1,243

Net adjustments	126,637			(3,021)			126,637			(3,021)
Adjusted net income	$	63,002		$	79,524		$	138,513		$	148,386

Diluted (loss) earnings per share (6)	$	(0.72)		$	0.75		$	0.12		$	1.38
Adjusted diluted earnings per share (7)	$	0.68		$	0.81		$	1.48		$	1.53







Diluted weighted average common shares outstanding (6)	88,898			109,805			102,045			110,223
Adjusted diluted weighted average common shares outstanding (7)	92,863			98,574			93,792			97,011

_________________

(1)The thirteen and twenty-six weeks ended June 27, 2021 include the recognition of recoverable PIS and COFINS taxes, including accrued interest, within other revenues as a result of favorable court rulings in Brazil during the second quarter of 2021.

(2)Adjustment for interest expense related to the 2025 Notes weighted for the portion of the period prior to our election under the 2025 Notes indenture to settle the principal portion of the 2025 Notes in cash.

(3)The thirteen and twenty-six weeks ended June 26, 2022 include losses in connection with the 2025 Notes Partial Repurchase and Amended Credit Agreement. See Note 8 - Convertible Senior Notes and Note 7 - Long-term Debt, Net, respectively, of the Notes to Consolidated Financial Statements for additional details.

(4)Fair value adjustments to the conversion feature of the 2025 Notes repurchased, as well as the settlements of the related convertible senior note hedges and warrants in connection with the 2025 Notes Partial Repurchase. See Note 8 - Convertible Senior Notes of the Notes to Consolidated Financial Statements for additional details.

(5)Income tax effect of the adjustments for the periods presented. For the thirteen and twenty-six weeks ended June 26, 2022, the primary difference between the GAAP and adjusted effective income tax rates relate to certain non-deductible losses and other tax costs associated with the 2025 Notes Partial Repurchase.

(6)Due to the GAAP net loss, the effect of dilutive securities was excluded from the calculation of GAAP diluted loss per share for the thirteen weeks ended June 26, 2022.

(7)Adjusted diluted weighted average common shares outstanding was calculated excluding the dilutive effect of 7,774 and 11,231 shares for the thirteen weeks ended June 26, 2022 and June 27, 2021, respectively, and 8,253 and 10,442 shares for the twenty-six weeks ended June 26, 2022 and June 27, 2021, respectively, to be issued upon conversion of the 2025 Notes to satisfy the amount in excess of the principal since our convertible note hedge offsets the dilutive impact of the shares underlying the 2025 Notes. For the twenty-six weeks ended June 27, 2021, adjusted diluted weighted average common shares outstanding was also calculated assuming our February 2021 election to settle the principal portion of the 2025 Notes in cash was in effect for the entire period. For adjusted diluted earnings per share, the calculation includes 3,965 dilutive shares for the thirteen weeks ended June 26, 2022, primarily related to outstanding warrants.

Table of Contents

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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. Management uses this information to make decisions about future plans for the development of additional restaurants and new concepts, as well as evaluation of current operations. System-wide sales comprise sales of Company-owned and franchised restaurants. For a summary of sales of Company-owned restaurants, refer to Note 32 - 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 presented only as an indicator of changes in the restaurant system, which management believes is important information regarding the health of our restaurant concepts and in determining our royalties and/or service fees.


		THIRTEEN WEEKS ENDED				THIRTY-NINE WEEKS ENDED					THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in millions)	(dollars in millions)	SEPTEMBER 26, 2021		SEPTEMBER 27, 2020		SEPTEMBER 26, 2021		SEPTEMBER 27, 2020		(dollars in millions)	JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
U.S.	U.S.									U.S.
Outback Steakhouse	Outback Steakhouse	$	118	$	76	$	329	$	250	Outback Steakhouse	$	129	$	119	$	258	$	211
Carrabba’s Italian Grill	Carrabba’s Italian Grill	10		8		32		25		Carrabba’s Italian Grill	13		12		25		22
Bonefish Grill	Bonefish Grill	3		2		8		6		Bonefish Grill	3		3		6		5
U.S. total	U.S. total	131		86		369		281		U.S. total	145		134		289		238
International	International									International
Outback Steakhouse-South Korea		73		64		219		174
Outback Steakhouse - South Korea										Outback Steakhouse - South Korea	65		72		143		146
Other	Other	26		19		77		45		Other	28		27		62		51
International total	International total	99		83		296		219		International total	93		99		205		197
Total franchise sales (1)	Total franchise sales (1)	$	230	$	169	$	665	$	500	Total franchise sales (1)	$	238	$	233	$	494	$	435

_____________________

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

~~Table of Contents~~

~~BLOOMIN’ BRANDS, INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued~~

~~Restaurant-level operating margin~~ - The following tables reconcile consolidated and segment Income (loss) from operations and the corresponding margins to Restaurant-level operating income (loss) and the corresponding margins for the periods indicated:

Consolidated THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
(dollars in thousands) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020
Income (loss) from operations $ 14,837 $ (14,255) $ 230,472 $ (167,735)
Operating income (loss) margin 1.5 % (1.8) % 7.5 % (7.1) %
Less:
Franchise and other revenues 13,745 4,773 43,906 19,071
Plus:
Depreciation and amortization 40,827 43,417 122,592 137,469
General and administrative 58,880 57,443 182,590 197,732
Provision for impaired assets and restaurant closings 1,585 (54) 8,962 66,223
Restaurant-level operating income $ 102,384 $ 81,778 $ 500,710 $ 214,618
Restaurant-level operating margin 10.3 % 10.7 % 16.5 % 9.2 %
U.S. THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
(dollars in thousands) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020
Income (loss) from operations $ 47,294 $ 29,574 $ 334,326 $ (21,968)
Operating income (loss) margin 5.2 % 4.1 % 11.9 % (1.0) %
Less:
Franchise and other revenues 13,943 2,332 31,567 12,253
Plus:
Depreciation and amortization 33,421 35,057 100,645 110,005
General and administrative 21,998 19,732 66,043 68,955
Provision for impaired assets and restaurant closings 1,539 (86) 8,678 56,389
Restaurant-level operating income $ 90,309 $ 81,945 $ 478,125 $ 201,128
Restaurant-level operating margin 10.0 % 11.4 % 17.1 % 9.4 %
International THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
(dollars in thousands) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020
Income (loss) from operations $ 1,412 $ (7,926) $ 7,419 $ (18,209)
Operating income (loss) margin 1.4 % (16.0) % 2.9 % (8.9) %
Less:
Franchise and other revenues (198) 2,441 12,339 6,818
Plus:
Depreciation and amortization 5,843 5,672 17,128 18,314
General and administrative 5,060 4,011 13,781 14,413
Provision for impaired assets and restaurant closings 28 — 27 3,640
Restaurant-level operating income (loss) $ 12,541 $ (684) $ 26,016 $ 11,340
Restaurant-level operating margin 12.8 % (1.5) % 10.7 % 5.7 %

~~Table of Contents~~

~~BLOOMIN’ BRANDS, INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued~~

~~Adjusted restaurant-level operating margin -~~ ~~The following tables present the percentages of certain operating cost financial statement line items in relation to Restaurant sales for the periods indicated:~~

THIRTEEN WEEKS ENDED
SEPTEMBER 26, 2021 SEPTEMBER 27, 2020
REPORTED ADJUSTED (1) REPORTED ADJUSTED
Restaurant sales 100.0 % 100.0 % 100.0 % 100.0 %
Food and beverage costs 30.5 % 30.5 % 30.1 % 30.1 %
Labor and other related 29.1 % 29.1 % 32.2 % 32.2 %
Other restaurant operating 30.1 % 23.6 % 27.0 % 27.0 %
Restaurant-level operating margin 10.3 % 16.8 % 10.7 % 10.7 %
THIRTY-NINE WEEKS ENDED
SEPTEMBER 26, 2021 SEPTEMBER 27, 2020
REPORTED ADJUSTED (1) REPORTED ADJUSTED (1)
Restaurant sales 100.0 % 100.0 % 100.0 % 100.0 %
Food and beverage costs 30.0 % 30.0 % 31.3 % 30.9 %
Labor and other related 28.4 % 28.4 % 32.6 % 32.6 %
Other restaurant operating 25.2 % 23.0 % 27.0 % 27.0 %
Restaurant-level operating margin 16.5 % 18.6 % 9.2 % 9.5 %

~~_________________~~

~~(1)Includes (favorable) unfavorable adjustments recorded in Other restaurant operating expense (unless otherwise noted below) for the following activities, as described in the~~ ~~Adjusted income (loss) from operations, Adjusted net income (loss) and Adjusted diluted earnings (loss) per share~~ ~~table below for the periods indicated:~~

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
(dollars in millions) SEPTEMBER 26, 2021 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020
Royalty termination expense $ (61.9) $ (61.9) $ —
Legal and other matters (2.7) (2.7) —
COVID-19 related costs (i) — — (9.9)
Asset impairments and closing costs — — 2.7
$ (64.6) $ (64.6) $ (7.2)

~~_________________~~

~~(i)Includes $7.3 million of adjustments recorded in Food and beverage costs.~~

~~Table of Contents~~

~~BLOOMIN’ BRANDS, INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued~~

~~Adjusted income (loss) from operations, Adjusted net income (loss) and Adjusted diluted earnings (loss) per share~~

THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
(in thousands, except per share data) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020 SEPTEMBER 26, 2021 SEPTEMBER 27, 2020
Income (loss) from operations $ 14,837 $ (14,255) $ 230,472 $ (167,735)
Operating income (loss) margin 1.5 % (1.8) % 7.5 % (7.1) %
Adjustments:
Royalty termination expense (1) 61,880 — 61,880 —
Legal and other matters (2) 5,965 — (372) 178
COVID-19-related costs (3) — — — 79,218
Severance and other transformational costs (4) — 4,200 — 28,847
Asset impairments and closure costs (5) — — — (2,205)
Total income (loss) from operations adjustments 67,845 4,200 61,508 106,038
Adjusted income (loss) from operations $ 82,682 $ (10,055) $ 291,980 $ (61,697)
Adjusted operating income (loss) margin 8.2 % (1.3) % 9.5 % (2.6) %
Diluted net income (loss) attributable to common stockholders $ 3,449 $ (17,637) $ 155,316 $ (148,000)
Convertible senior notes if-converted method interest adjustment, net of tax (6) — — 460 —
Net income (loss) attributable to common stockholders 3,449 (17,637) 154,856 (148,000)
Adjustments:
Income (loss) from operations adjustments 67,845 4,200 61,508 106,038
Loss on extinguishment and modification of debt — — 2,073 —
Amortization of debt discount (7) — 2,407 — 3,786
Total adjustments, before income taxes 67,845 6,607 63,581 109,824
Adjustment to provision for income taxes (8) (15,878) 440 (14,635) (28,029)
Redemption of preferred stock in excess of carrying value (9) — — — 3,496
Net adjustments 51,967 7,047 48,946 85,291
Adjusted net income (loss) $ 55,416 $ (10,590) $ 203,802 $ (62,709)
Diluted earnings (loss) per share attributable to common stockholders (10) $ 0.03 $ (0.20) $ 1.42 $ (1.69)
Adjusted diluted earnings (loss) per share (11) $ 0.57 $ (0.12) $ 2.10 $ (0.72)
Diluted weighted average common shares outstanding (10) 107,783 87,558 109,410 87,394
Adjusted diluted weighted average common shares outstanding (11) 97,307 87,558 97,110 87,394

~~_________________~~

~~(1)Payment made to the Carrabba’s Founders in connection with the Royalty Termination Agreement. See Note 19 -~~ ~~Commitments and Contingencies~~ ~~of the Notes to Consolidated Financial Statements for additional details regarding the Royalty Termination Agreement.~~

~~(2)~~The thirteen and thirty-nine weeks ended September 26, 2021 includes: (i) an adjustment of $(3.2) million to reduce our initial recorded estimate and net $3.1 million benefit from the recognition of recoverable PIS and COFINS taxes, including accrued interest, respectively, within other revenues as a result of favorable court rulings and (ii) an accrual of $2.7 million for Imposto sobre Serviços (“ISS”), a Brazilian municipal service tax, in connection with royalties from our Brazilian subsidiary over the past five years, including related penalties and interest, recorded within Other restaurant operating expense as a result of an unfavorable Brazilian Supreme Court ruling.

~~(3)~~Costs incurred in connection with the COVID-19 pandemic, primarily consisting of fixed asset and right-of-use asset impairments, restructuring charges, inventory obsolescence and spoilage, contingent lease liabilities and current expected credit losses. See Note 2 - ~~COVID-19 Charges~~ ~~of the Notes to Consolidated Financial Statements for additional details regarding the impact of certain COVID-19 pandemic related charges on our financial results.~~

~~(4)Severance, professional fees and other costs incurred as a result of transformational and restructuring activities.~~

~~Table of Contents~~

~~BLOOMIN’ BRANDS, INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued~~

~~(5)Primarily includes a lease termination gain of $2.8 million.~~

~~(6)~~Adjustment for interest expense related to the 2025 Notes weighted for the portion of the period prior to our election under the 2025 Notes indenture to settle the principal portion of our 2025 Notes in cash. The calculation of adjusted diluted earnings per share excludes 2025 Notes interest adjustment.

~~(7)Amortization of debt discount related to the issuance of the 2025 Notes. See Note 11 -~~ ~~Convertible Senior Notes~~ ~~of the Notes to Consolidated Financial Statements for details.~~

~~(8)Income tax effect of the adjustments for the periods presented.~~

~~(9)Consideration paid in excess of the carrying value for the redemption of preferred stock of our Abbraccio concept.~~

~~(10)Due to the GAAP net loss, the effect of dilutive securities was excluded from the calculation of GAAP diluted loss per share for the thirteen and thirty-nine weeks ended September 27, 2020.~~

~~(11)~~For the thirty-nine weeks ended September 26, 2021, adjusted diluted weighted average common shares outstanding was calculated assuming our February 2021 election to settle the principal portion of the 2025 Notes in cash was in effect for the entire period. For the thirteen and thirty-nine weeks ended September 26, 2021, adjusted diluted weighted average common shares outstanding was calculated excluding the dilutive effect of 10,476 and 10,453 shares, respectively, to be issued upon conversion of the 2025 Notes to satisfy the amount in excess of the principal since the Convertible Note Hedge Transactions offset the dilutive impact of the shares underlying the 2025 Notes.

Liquidity and Capital Resources

~~LIQUIDITY~~

Cash and Cash Equivalents

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, debt payments, development of new restaurants, remodeling or relocating older restaurants and investment in technology.

~~Cash and Cash Equivalents~~ - As of ~~September~~June 26, ~~2021,~~2022, we had ~~$76.3~~$95.3 million in cash and cash equivalents, of which ~~$28.8~~$41.8 million was held by foreign affiliates. The international jurisdictions in which we have significant cash do not have any known restrictions that would prohibit repatriation.

As of ~~September~~June 26, ~~2021,~~2022, we had aggregate accumulated foreign earnings of approximately ~~$34.7~~$37.9 million. This amount consisted primarily of historical earnings from 2017 and prior that were previously taxed in the U.S. under the 2017 Tax Cuts and Jobs Act and post-2017 foreign earnings, which we may repatriate to the U.S. without additional material U.S. federal income tax. These amounts are ~~no longer~~not considered indefinitely reinvested in our foreign subsidiaries.

~~Capital Expenditures~~ ~~- We estimate that our capital expenditures will total approxim~~ately $140 million to $150 million in 2021. 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 and restrictions imposed by our borrowing arrangements. Under the Second Amended and Restated Credit Agreement, we are limited to $200.0 million of aggregate capital expenditures during the year ended December 26, 2021.

Table of Contents

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 period indicated:

SENIOR SECURED CREDIT FACILITY FORMER CREDIT FACILITY TOTAL CREDIT FACILITIES
(dollars in thousands) TERM LOAN A REVOLVING FACILITY TERM LOAN A REVOLVING FACILITY 2025 NOTES 2029 NOTES
Balance as of December 27, 2020 $ — $ — $ 425,000 $ 447,000 $ 230,000 $ — $ 1,102,000
2021 new debt 200,000 363,000 — 15,000 — 300,000 878,000
2021 payments (2,500) (239,000) (425,000) (462,000) — — (1,128,500)
Balance as of September 26, 2021 $ 197,500 $ 124,000 $ — $ — $ 230,000 $ 300,000 $ 851,500
Weighted-average interest rate, as of September 26, 2021 2.58 % 2.69 % 5.00 % 5.13 %
Principal maturity date April 2026 April 2026 May 2025 April 2029


	SENIOR SECURED CREDIT FACILITY								TOTAL CREDIT FACILITIES
(dollars in thousands)	TERM LOAN A		REVOLVING FACILITY			2025 NOTES						2029 NOTES
Balance as of December 26, 2021	$	195,000	$	80,000		$	230,000		$	300,000			$	805,000
2022 new debt	—		624,500			—			—				624,500
2022 payments	(195,000)		(304,500)			(125,000)			—				(624,500)
Balance as of June 26, 2022	$	—	$	400,000		$	105,000		$	300,000			$	805,000

Interest rates, as of June 26, 2022 (1)			2.74		%	5.00		%	5.13		%
Principal maturity date			April 2026			May 2025			April 2029

____________________

(1)Interest rate for revolving credit facility represents the weighted average interest rate as of June 26, 2022.

As of ~~September~~June 26, ~~2021,~~2022, we had ~~$655.3~~$580.0 million in available unused borrowing capacity under our revolving credit facility, net of letters of credit of ~~$20.7~~$20.0 million.

~~During~~Credit Agreement Amendment - On April 26, 2022, we and OSI entered into the ~~thirteen weeks ended September 26, 2021, we made a cash payment~~Amended Credit Agreement, which included an increase of ~~$61.9~~our existing revolving credit facility from $800.0 million to $1.0 billion and a transition from LIBOR to SOFR as the ~~Carrabba’s Founders in connection with~~benchmark rate for purposes of calculating interest under the ~~Royalty Termination Agreement detailed in Note 19 -~~ ~~Commitments and Contingencies.~~ ~~This cash payment~~Senior Secured Credit Facility. At closing, an incremental $192.5 million was ~~primarily funded by borrowings~~drawn on ~~our~~the revolving credit ~~facility.~~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.

~~2029 Notes~~See Note 7 - ~~On April 16, 2021, we issued $300.0 million aggregate principal amount~~Long-term Debt, Net of ~~senior unsecured notes due 2029. The 2029~~the Notes mature on April 15, 2029, unless earlier redeemed or purchased by us. The 2029 Notes bear cash interest at an annual rate of 5.125% payable semi-annually in arrears on April 15 and October 15 of each year, beginning on October 15, 2021.to Consolidated Financial Statements for additional details regarding the Amended Credit Agreement.

~~The net proceeds from~~Our Amended Credit Agreement 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 2029 Notes were approximately $294.5 million, after deducting the initial purchaser’s discount and our offering expenses. The net proceeds were used to repay a portion of our outstanding Term loan A and revolving credit facility ~~in conjunction with~~and cause an acceleration of the ~~refinancing of our Former Credit Facility.~~

amounts due under the credit facilities. See Note 13 -

~~Second Amended and Restated Credit Agreement~~Long-term Debt, Net ~~- On April 16,~~in our Annual Report on Form 10-K for the year ended December 26, 2021 ~~we and OSI, as co-borrowers, entered into the Second Amended and Restated Credit Agreement which provides~~ for senior secured financing of up to $1.0 billion consisting of a $200.0 million Term loan A and an $800.0 million revolving credit facility. The Senior Secured Credit Facility matures on April 16, 2026 and replaced our Former Credit Facility financing of up to $1.5 billion.further information.

~~The Second Amended~~As of June 26, 2022 and Restated Credit Agreement limits, subject to certain exceptions, our ability and the ability of our subsidiaries to: incur additional indebtedness; make significant payments; sell assets; pay dividends and other restricted payments; make certain investments; acquire certain assets; effect mergers and similar transactions; and effect certain other transactions with affiliates. The Second Amended and Restated Credit Agreement also prohibited us from paying certain dividends and making certain restricted payments and acquisitions untilDecember 26, 2021, we were in compliance with our ~~TNLR covenant for~~debt covenants. We believe that we will remain in compliance with our debt covenants during the ~~period ended September 26, 2021.~~next 12 months.

~~Our Senior Secured Credit Facility contains mandatory prepayment requirements for Term loan A, including~~2025 Notes - On May 25, 2022, we and the ~~requirement that we prepay outstanding amounts under these loans with 50%~~Noteholders entered into the Exchange Agreements in which the Noteholders agreed to exchange $125.0 million in aggregate principal amount of our ~~annual excess~~outstanding 2025 Notes for $196.9 million in cash, ~~flow, as defined in the Second Amended~~plus accrued interest, and ~~Restated Credit Agreement, commencing~~approximately 2.3 million shares of our common stock.

Convertible Note Hedge and Warrant Transactions - In connection with the ~~fiscal year ending December 25,~~2025 Notes Partial Repurchase, we entered into the Note Hedge Early Termination Agreements and the Warrant Early Termination Agreements. Upon settlement, we received $131.9 million for the Note Hedge Early Termination Agreements and paid $114.8 million for the Warrant Early Termination Agreements during the thirteen weeks ended June 26, 2022. ~~The amount~~

See Note 8 - Convertible Senior Notes of ~~outstanding loans required~~the Notes to ~~be prepaid in accordance with~~Consolidated Financial Statements for additional details regarding the ~~debt covenants may vary based on our CSSNLR~~2025 Notes Partial Repurchase and ~~year end results. Other than the annual required minimum amortization premiums of $10.0 million, we do not anticipate any other payments will be required through September 25, 2022.~~related Note Hedge Early Termination Agreements and Warrant Early Termination Agreements.

5245

Table of Contents

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

~~See Note 10 -~~ ~~Long-term Debt, Net~~ ~~for additional details regarding the 2029 Notes and Second Amended and Restated Credit Agreement.~~Use of Cash

AsCash flows generated from operating activities and availability under our revolving credit facility are our principal sources of ~~September 26, 2021~~liquidity, which we use for operating expenses, debt payments, share repurchases and ~~December 27, 2020, we were~~dividend payments, development of new restaurants, remodeling or relocating older restaurants and investment in ~~compliance with our debt covenants. We believe that we will remain in compliance with our debt covenants during the next 12 months.~~technology.

~~SUMMARY OF CASH FLOWS~~

~~The~~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 ~~table presents a summary~~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 ~~cash flows provided by (used in) operating, investing~~ability to manage costs and ~~financing activities for the periods indicated:~~

THIRTY-NINE WEEKS ENDED
(dollars in thousands) SEPTEMBER 26, 2021 SEPTEMBER 27, 2020
Net cash provided by operating activities $ 304,246 $ 54,971
Net cash used in investing activities (69,085) (56,162)
Net cash (used in) provided by financing activities (265,192) 99,853
Effect of exchange rate changes on cash and cash equivalents 207 (3,293)
Net (decrease) increase in cash, cash equivalents and restricted cash $ (29,824) $ 95,369
working capital successfully.

~~Operating activities~~Capital Expenditures - We estimate that our capital expenditures will total approximately $200 million to $210 million in 2022. The ~~increase in net~~ ~~cash provided~~amount of actual capital expenditures may be affected by ~~operating activities~~ during the thirty-nine weeks ended September 26, 2021 as compared to the thirty-nine weeks ended September 27, 2020 was primarily due to an increase in restaurant-level operating margin. This increase was partially offset by: (i) cash paid in connection with the Carrabba’s Italian Grill royalty termination, (ii) deferral of payroll tax payments in 2020 as a result of the CARES Act, (iii) higher inventory purchases, (iv) timing of collections of gift card receivables, (v) cash paid to terminate interest rate swap agreementsgeneral economic, financial, competitive, legislative and ~~(vi) timing of operational payments and receipts.~~regulatory factors, among other things, including raw material constraints.

~~Investing activities~~Dividends and Share Repurchases - ~~The increase~~In July 2022, our Board declared a quarterly cash dividend of $0.14 per share, payable on August 24, 2022. Future dividend payments are dependent on our earnings, financial condition, capital expenditure requirements, surplus and other factors that our Board considers relevant, as well as continued compliance with the financial covenants in net cash used in investing activities during the thirty-nine weeks ended September 26, 2021 as compared to the thirty-nine weeks ended September 27, 2020 was primarily due to higher capital expenditures, partially offset by higher proceeds from the disposal of property, fixtures and equipment.our debt agreements.

~~Financing activities -~~ ~~Net cash used in financing activities during~~On February 8, 2022, our Board approved the ~~thirty-nine weeks ended September 26, 2021 as compared~~2022 Share Repurchase Program under which we are authorized to net cash provided by financing activities during the thirty-nine weeks ended September 27, 2020 was primarily due to: (i) higher net repayments on our revolving credit facility, (ii) proceeds from the issuance of the 2025 Notes and related warrants during 2020 and (iii) net repaymentrepurchase up to $125.0 million of our ~~Term loan A in conjunction with~~outstanding common stock. The 2022 Share Repurchase Program will expire on August 9, 2023. As of June 26, 2022, we had $77.5 million remaining available for repurchase under the refinance of our Former Credit Facility. These decreases were partially offset by: (i) proceeds from the issuance of the 2029 Notes, (ii) premium payments for Convertible Note Hedge Transactions during 2020, (iii) payment of cash dividends on our common stock during 2020 and (iv) proceeds from the exercise of stock-based compensation during 2021 as compared to payment of taxes from the exercise of stock-based compensation during 2020.

~~FINANCIAL CONDITION~~2022 Share Repurchase Program.

Following is a summary of dividends and share repurchases from fiscal year 2015 through June 26, 2022:


(dollars in thousands)	DIVIDENDS PAID		SHARE REPURCHASES		TOTAL
Fiscal year 2015	$	29,332	$	169,999	$	199,331
Fiscal year 2016	31,379		309,887		341,266
Fiscal year 2017	30,988		272,736		303,724
Fiscal year 2018	33,312		113,967		147,279
Fiscal year 2019	35,734		106,992		142,726
Fiscal year 2020	17,480		—		17,480
Fiscal year 2021	—		—		—
First fiscal quarter 2022	12,559		11,702		24,261
Second fiscal quarter 2022	12,418		35,749		48,167


Total (1)	$	203,202	$	1,021,032	$	1,224,234

________________

(1)Subsequent to June 26, 2022, we repurchased $14.9 million of our ~~current assets, current liabilities and working capital (deficit) as of the periods indicated:~~

(dollars in thousands) SEPTEMBER 26, 2021 DECEMBER 27, 2020
Current assets $ 240,659 $ 323,854
Current liabilities 897,215 950,104
Working capital (deficit) $ (656,556) $ (626,250)
common stock under a Rule 10b5-1 plan through July 28, 2022.

~~Working capital (deficit) includes: (i) Unearned revenue primarily from unredeemed gift cards of $284.1~~Deferred Compensation Programs - The deferred compensation obligation due to managing and chef partners was $7.5 million and ~~$381.6~~$15.5 million as of ~~September~~June 26, 2022 and December 26, 2021, respectively. We invest in various corporate-owned life insurance policies, which are held within an irrevocable grantor or rabbi trust account for settlement of our obligations under the deferred compensation plans. The obligation for managing and ~~December 27, 2020, respectively, and (ii) current operating lease~~chef partners’ deferred compensation was fully funded as of June 26, 2022.

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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:


	TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 26, 2022		JUNE 27, 2021
Net cash provided by operating activities	$	218,818	$	283,182
Net cash used in investing activities	(75,738)		(42,625)
Net cash used in financing activities	(140,922)		(248,018)
Effect of exchange rate changes on cash and cash equivalents	4,232		128

Net increase (decrease) in cash, cash equivalents and restricted cash	$	6,390	$	(7,333)

Operating activities - The decrease in net cash provided by operating activities during the twenty-six weeks ended June 26, 2022 as compared to the twenty-six weeks ended June 27, 2021 was primarily due to the timing of operational payments and receipts and increased employee compensation payments.

Investing activities - The increase in net cash used in investing activities during the twenty-six weeks ended June 26, 2022 as compared to the twenty-six weeks ended June 27, 2021 was primarily due to higher capital expenditures.

Financing activities - The decrease in net cash used in financing activities during the twenty-six weeks ended June 26, 2022 as compared the twenty-six weeks ended June 27, 2021 was primarily due to net draws on the revolving credit facility during 2022, generally used to settle certain outstanding debt obligations, including the 2025 Notes Partial Repurchase and the related Note Hedge Early Termination Agreements, partially offset by the repurchase of common stock and payment of cash dividends on our common stock.

Financial Condition - Following is a summary of our current assets, current liabilities and working capital (deficit) as of ~~$178.6~~the periods indicated:


(dollars in thousands)	JUNE 26, 2022		DECEMBER 26, 2021
Current assets	$	292,926	$	352,792
Current liabilities	909,850		984,625
Working capital (deficit)	$	(616,924)	$	(631,833)

Working capital (deficit) includes: (i) Unearned revenue primarily from unredeemed gift cards of $309.9 million and ~~$176.8~~$398.8 million as of ~~September~~June 26, 2022 and December 26, 2021, respectively, and (ii) current operating lease liabilities of $178.8 million and $177.0 million as of June 26, 2022 and December ~~27, 2020,~~26, 2021, respectively, with the corresponding operating right-of-use assets recorded as non-current on our Consolidated Balance Sheets. We have, and in the future may continue to have, negative working capital balances (as is common for many restaurant companies). We operate successfully with negative working capital because cash collected on restaurant sales ~~are~~is typically received before payment is due on our current liabilities, and our inventory turnover rates require relatively low investment in inventories. Additionally, ongoing cash flows from restaurant operations and gift card sales are typically used to service debt obligations and to make capital expenditures.

~~Deferred Compensation Programs -~~ The deferred compensation obligation due to managing and chef partners was $18.4 million and $28.1 million as of September 26, 2021 and December 27, 2020, respectively. We invest in various corporate-owned life insurance policies, which are held within an irrevocable grantor or rabbi trust account for settlement of our obligations under the deferred compensation plans. The obligation for managing and chef partners’ deferred compensation was fully funded as of September 26, 2021.

~~DIVIDENDS AND SHARE REPURCHASES~~

We did not pay dividends or repurchase shares of our outstanding common stock during the thirteen weeks ended September 26, 2021. The terms of our Second Amended and Restated Credit Agreement contained certain restrictions on cash dividends and share repurchases until after TNLR covenant compliance was met for the period ending September 26, 2021.

~~Following is a summary of dividends and share repurchases from fiscal year 2015 through September 26, 2021:~~

(dollars in thousands) DIVIDENDS PAID SHARE REPURCHASES TOTAL
Fiscal year 2015 $ 29,332 $ 169,999 $ 199,331
Fiscal year 2016 31,379 309,887 341,266
Fiscal year 2017 30,988 272,736 303,724
Fiscal year 2018 33,312 113,967 147,279
Fiscal year 2019 35,734 106,992 142,726
Fiscal year 2020 17,480 — 17,480
Fiscal year 2021 — — —
Total $ 178,225 $ 973,581 $ 1,151,806

Recently Issued Financial Accounting Standards

For a description of recently issued Financial Accounting Standards that we adopted during the ~~thirty-nine~~twenty-six weeks ended ~~September~~June 26, ~~2021~~2022 and, that are applicable to us and likely to have material effect on our consolidated financial statements, but have not yet been adopted, see Note 1 - Description of the Business and Basis of Presentation of the Notes to Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risk from changes in interest rates, changes in foreign currency exchange rates and changes in commodity prices. We believe that there have been no material changes in our market risk since December ~~27, 2020, except as set forth below.~~26, 2021. See Part II, Item 7A., “Quantitative and Qualitative Disclosures about Market Risk,” in our Annual Report on Form 10-K for the year ended December ~~27, 2020~~26, 2021 for further information regarding market risk.

~~Foreign Currency Exchange Rate Risk -~~ We are subject to foreign currency exchange risk for our restaurants operating in foreign countries. Our exposure to foreign currency exchange risk is primarily related to fluctuations in the Brazilian Real relative to the U.S. dollar. If foreign currency exchange rates depreciate in the countries in which we operate, we may experience declines in our operating results. For the thirty-nine weeks ended September 26, 2021, a 10% change in average foreign currency rates against the U.S. dollar would have increased or decreased our Total revenues for our consolidated foreign entities by $27.3 million. The 10% change would not have had a material effect on Net income. Currently, we do not enter into currency forward exchange or option contracts to hedge foreign currency exposures.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We have established and maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of ~~September~~June 26, ~~2021.~~2022.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the thirteen weeks ended ~~September~~June 26, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II: OTHER INFORMATION

Item 1. Legal Proceedings

For a description of our legal proceedings, see Note 1915 - Commitments and Contingencies of the Notes to Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

Item 1A. Risk Factors

In addition to the other information discussed in this report, please consider the factors described in Part I, Item 1A., “Risk Factors” in our ~~2020~~2021 Form 10-K which could materially affect our business, financial condition or future results. There have not been any material changes to the risk factors described in our ~~2020~~2021 Form 10-K, but these are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may adversely affect our business, financial condition or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In connection with the 2025 Notes Partial Repurchase, which is described in further detail within Note 8 - Convertible Senior Notes of the Notes to the Consolidated Financial Statements, the Company delivered to the Noteholders an aggregate amount of 2,313,374 shares of its common stock and $196.9 million, plus accrued interest, in cash in exchange for an aggregate principal amount of $125.0 million of the 2025 Notes. The 2025 Notes Partial Repurchase transaction closed on June 14, 2022.

The Company’s shares of common stock issued in connection with the 2025 Notes Partial Repurchase were not registered under the Securities Act of 1933, as amended (the “Securities Act”), and were issued in reliance on the exemption from the registration requirements thereof provided by Section 4(a)(2) of the Securities Act in a transaction by an issuer not involving a public offering.

There were no other sales of equity securities during the thirteen weeks ended ~~September~~June 26, ~~2021~~2022 that were not registered under the Securities ~~Act of 1933.~~Act.

~~We did not repurchase any shares~~The following table provides information regarding our purchases of ~~our outstanding~~ common stock during the thirteen weeks ended ~~September~~June 26, ~~2021.~~2022:


REPORTING PERIOD	TOTAL NUMBER OF SHARES PURCHASED	AVERAGE PRICE PAID PER SHARE		TOTAL NUMBER OF SHARES PURCHASED AS PART OF PUBLICLY ANNOUNCED PLANS OR PROGRAMS	APPROXIMATE DOLLAR VALUE OF SHARES THAT MAY YET BE PURCHASED UNDER THE PLANS OR PROGRAMS (1)
March 28, 2022 through April 24, 2022	575,005	$	21.48	575,005	$	100,948,905
April 25, 2022 through May 22, 2022	397,542	$	21.26	397,542	$	92,499,003
May 23, 2022 through June 26, 2022	788,382	$	18.96	788,382	$	77,549,262
Total	1,760,929			1,760,929

____________________

(1)On February 8, 2022, our Board of Directors authorized the repurchase of $125.0 million of our outstanding common stock as announced in our press release issued on February 18, 2022 (the “2022 Share Repurchase Program”). The 2022 Share Repurchase Program will expire on August 9, 2023.

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Item 6. Exhibits

EXHIBIT
NUMBER

DESCRIPTION OF EXHIBITS

FILINGS REFERENCED FOR
INCORPORATION BY REFERENCE

3.1

Fourth Amended and Restated Certificate of Incorporation

April 20, 2022, Form 8-K, Exhibit 3.1

10.1

~~Purchase~~First Amendment to the Second Amended and ~~Sale of Royalty Payment Stream~~ Restated Credit Agreement and ~~Termination of Royalty Agreement~~Incremental Amendment , dated ~~August 2, 2021~~April 26, 2022, by and among ~~Carrabba’s Italian Grill, LLC,~~Bloomin’ Brands, Inc., OSI Restaurant Partners, LLC, ~~Mangia Beve, Inc., Mangia Beve II, Inc., Original, Inc., Voss, Inc., John C. Carrabba, III, Damian C. Mandola~~ the guarantors party thereto, the lenders party thereto, and ~~John C. Carrabba, Jr.~~Wells Fargo Bank, National Association, as administrative Agent

~~August 5, 2021~~April 29, 2022, Form ~~10-Q,~~8-K, Exhibit 10.1

10.2

Form of Exchange Agreement, dated as of May 25, 2022, by and between Bloomin’ Brands, Inc. and the applicable Noteholder

May 26, 2022, Form 8-K, Exhibit 10.1

31.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Filed herewith

31.2

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Filed herewith

32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (1)

Furnished herewith

32.2

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (1)

Furnished herewith

101.INS

Inline XBRL Instance Document

Filed herewith

101.SCH

Inline XBRL Taxonomy Extension Schema Document

Filed herewith

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Filed herewith

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

Filed herewith

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

Filed herewith

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Filed herewith

104

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

Filed herewith

(1) These certifications are not deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. These certifications will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates them by reference.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Date:	~~November 3, 2021~~August 2, 2022	BLOOMIN’ BRANDS, INC.
		(Registrant)

		By: /s/ ~~Christopher Meyer~~Philip Pace
		Philip Pace ~~Christopher Meyer~~ ~~Executive~~Senior Vice President, ~~and~~ Chief ~~Financial~~Accounting Officer (Principal ~~Financial and~~ Accounting Officer)

[Remainder of page intentionally left blank]


	UNRECOGNIZED COMPENSATION EXPENSE (dollars in thousands)		REMAINING WEIGHTED-AVERAGE VESTING PERIOD (in years)
Stock options	$	1,061	0.7
Restricted stock units	$	11,663	1.9
Performance-based share units	$	20,862	1.5


	SENIOR SECURED CREDIT FACILITY						FORMER CREDIT FACILITY										TOTAL CREDIT FACILITIES
(dollars in thousands)	TERM LOAN A			REVOLVING FACILITY			TERM LOAN A		REVOLVING FACILITY		2025 NOTES			2029 NOTES
Balance as of December 27, 2020	$	—		$	—		$	425,000	$	447,000	$	230,000		$	—		$	1,102,000
2021 new debt	200,000			363,000			—		15,000		—			300,000			878,000
2021 payments	(2,500)			(239,000)			(425,000)		(462,000)		—			—			(1,128,500)
Balance as of September 26, 2021	$	197,500		$	124,000		$	—	$	—	$	230,000		$	300,000		$	851,500

Weighted-average interest rate, as of September 26, 2021	2.58		%	2.69		%					5.00		%	5.13		%
Principal maturity date	April 2026			April 2026							May 2025			April 2029