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 ~~March 27,~~June 26, 2022
or
☐			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 ~~April~~July 28, 2022, ~~88,702,869~~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 ~~March 27,~~June 26, 2022

(Unaudited)

TABLE OF CONTENTS


	PART I — FINANCIAL INFORMATION	Page No.

Item 1.	Financial Statements (Unaudited)	3

	Consolidated Financial Statements:

	Consolidated Balance Sheets — ~~March~~June 2 7 ~~, 202~~2 ~~and December~~ 2 6 , 20 212022 and December 26, 2021	3

	Consolidated Statements of Operations and Comprehensive (Loss) Income — For the Thirteen and Twenty-Six Weeks Ended ~~March~~June 2 76 , 202 2 and ~~March~~June 282 7 , 2 0 21021	4

	Consolidated Statements of Changes in Stockholders’ Equity — For the Thirteen and Twenty -Six Weeks Ended ~~March~~June 2 76 , 202 2 and ~~March~~June 2 87 , 2 0 21021	5

	Condensed Consolidated Statements of Cash Flows — For the ThT ~~irteen~~wenty-Six Weeks Ended ~~March~~Ju ne 2 6 , 2022 and June 2 7 , ~~202~~2 ~~and~~ ~~March~~ 2 8 ~~, 20~~212021	67

	Notes to Consolidated Financial Statements	79

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2127

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3948

Item 4.	Controls and Procedures	3948

	PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	4049

Item 1A.	Risk Factors	4049

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4049



Item 6.	Exhibits	4150

	Signature	4251

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)


		MARCH 27, 2022		DECEMBER 26, 2021			JUNE 26, 2022		DECEMBER 26, 2021
ASSETS	ASSETS					ASSETS
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	97,795	$	87,585	Cash and cash equivalents	$	95,346	$	87,585
Restricted cash and cash equivalents	Restricted cash and cash equivalents	101		1,472		Restricted cash and cash equivalents	101		1,472
Inventories	Inventories	68,803		79,112		Inventories	80,482		79,112

Other current assets, net	Other current assets, net	104,588		184,623		Other current assets, net	116,997		184,623
Total current assets	Total current assets	271,287		352,792		Total current assets	292,926		352,792

Property, fixtures and equipment, net	Property, fixtures and equipment, net	841,120		842,012		Property, fixtures and equipment, net	852,155		842,012
Operating lease right-of-use assets	Operating lease right-of-use assets	1,124,517		1,130,873		Operating lease right-of-use assets	1,122,317		1,130,873
Goodwill	Goodwill	273,474		268,444		Goodwill	278,780		268,444
Intangible assets, net	Intangible assets, net	453,048		453,412		Intangible assets, net	452,654		453,412
Deferred income tax assets, net	Deferred income tax assets, net	162,743		168,068		Deferred income tax assets, net	158,110		168,068
Other assets, net	Other assets, net	77,167		78,670		Other assets, net	73,053		78,670
Total assets	Total assets	$	3,203,356	$	3,294,271	Total assets	$	3,229,995	$	3,294,271

LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities	Current liabilities					Current liabilities
Accounts payable	Accounts payable	$	172,709	$	167,978	Accounts payable	$	185,645	$	167,978
Accrued and other current liabilities	Accrued and other current liabilities	426,415		406,894		Accrued and other current liabilities	412,831		406,894
Unearned revenue	Unearned revenue	325,304		398,795		Unearned revenue	309,863		398,795

Current portion of long-term debt	Current portion of long-term debt	11,220		10,958		Current portion of long-term debt	1,511		10,958
Total current liabilities	Total current liabilities	935,648		984,625		Total current liabilities	909,850		984,625

Non-current operating lease liabilities	Non-current operating lease liabilities	1,172,923		1,179,447		Non-current operating lease liabilities	1,168,692		1,179,447

Long-term debt, net	Long-term debt, net	711,025		782,107		Long-term debt, net	800,222		782,107
Other long-term liabilities, net	Other long-term liabilities, net	90,503		125,242		Other long-term liabilities, net	88,490		125,242
Total liabilities	Total liabilities	2,910,099		3,071,421		Total liabilities	2,967,254		3,071,421
Commitments and contingencies (Note 14)		0		0
Commitments and contingencies (Note 15)						Commitments and contingencies (Note 15)	0		0

Stockholders’ equity	Stockholders’ equity					Stockholders’ equity
Bloomin’ Brands stockholders’ equity	Bloomin’ Brands stockholders’ equity					Bloomin’ Brands stockholders’ equity
Preferred stock, $0.01 par value, 25,000,000 shares authorized; no shares issued and outstanding as of March 27, 2022 and December 26, 2021		—		—
Common stock, $0.01 par value, 475,000,000 shares authorized; 89,185,040 and 89,252,823 shares issued and outstanding as of March 27, 2022 and December 26, 2021, respectively		892		893
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						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						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	Additional paid-in capital	1,115,458		1,119,728		Additional paid-in capital	1,169,697		1,119,728
Accumulated deficit	Accumulated deficit	(634,356)		(698,171)		Accumulated deficit	(733,723)		(698,171)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(190,431)		(205,989)		Accumulated other comprehensive loss	(176,054)		(205,989)
Total Bloomin’ Brands stockholders’ equity	Total Bloomin’ Brands stockholders’ equity	291,563		216,461		Total Bloomin’ Brands stockholders’ equity	260,822		216,461
Noncontrolling interests	Noncontrolling interests	1,694		6,389		Noncontrolling interests	1,919		6,389
Total stockholders’ equity	Total stockholders’ equity	293,257		222,850		Total stockholders’ equity	262,741		222,850
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	3,203,356	$	3,294,271	Total liabilities and stockholders’ equity	$	3,229,995	$	3,294,271

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

(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)


		THIRTEEN WEEKS ENDED			THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
			MARCH 27, 2022			MARCH 28, 2021			JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
Revenues	Revenues							Revenues
Restaurant sales	Restaurant sales		$	1,123,575		$	979,451	Restaurant sales	$	1,108,918	$	1,055,227	$	2,232,493	$	2,034,678
Franchise and other revenues	Franchise and other revenues		16,960			8,022		Franchise and other revenues	16,244		22,139		33,204		30,161
Total revenues	Total revenues		1,140,535			987,473		Total revenues	1,125,162		1,077,366		2,265,697		2,064,839
Costs and expenses	Costs and expenses							Costs and expenses
Food and beverage costs	Food and beverage costs		359,370			291,870		Food and beverage costs	364,459		312,102		723,829		603,972
Labor and other related	Labor and other related		312,511			274,638		Labor and other related	308,759		294,999		621,270		569,637
Other restaurant operating	Other restaurant operating		259,110			229,293		Other restaurant operating	263,529		233,450		522,639		462,743
Depreciation and amortization	Depreciation and amortization		41,775			41,226		Depreciation and amortization	41,257		40,539		83,032		81,765
General and administrative	General and administrative		58,674			57,248		General and administrative	59,246		66,462		117,920		123,710
Provision for impaired assets and restaurant closings	Provision for impaired assets and restaurant closings		1,839			2,200		Provision for impaired assets and restaurant closings	193		5,177		2,032		7,377
Total costs and expenses	Total costs and expenses		1,033,279			896,475		Total costs and expenses	1,037,443		952,729		2,070,722		1,849,204
Income from operations	Income from operations		107,256			90,998		Income from operations	87,719		124,637		194,975		215,635

Loss on extinguishment and modification of debt								Loss on extinguishment and modification of debt	(107,630)		(2,073)		(107,630)		(2,073)
Loss on fair value adjustment of derivatives, net								Loss on fair value adjustment of derivatives, net	(17,685)		—		(17,685)		—
Other income, net	Other income, net		—			21		Other income, net	—		—		—		21
Interest expense, net	Interest expense, net		(13,633)			(14,628)		Interest expense, net	(12,548)		(14,990)		(26,181)		(29,618)
Income before provision for income taxes			93,623			76,391
(Loss) income before provision for income taxes								(Loss) income before provision for income taxes	(50,144)		107,574		43,479		183,965
Provision for income taxes	Provision for income taxes		15,929			6,593		Provision for income taxes	11,536		22,688		27,465		29,281
Net income			77,694			69,798
Net (loss) income								Net (loss) income	(61,680)		84,886		16,014		154,684
Less: net income attributable to noncontrolling interests	Less: net income attributable to noncontrolling interests		2,183			936		Less: net income attributable to noncontrolling interests	1,955		2,341		4,138		3,277
Net income attributable to Bloomin’ Brands			$	75,511		$	68,862
Net (loss) income attributable to Bloomin’ Brands								Net (loss) income attributable to Bloomin’ Brands	$	(63,635)	$	82,545	$	11,876	$	151,407

Net income			$	77,694		$	69,798
Other comprehensive income:
Net (loss) income								Net (loss) income	$	(61,680)	$	84,886	$	16,014	$	154,684
Other comprehensive (loss) income:								Other comprehensive (loss) income:
Foreign currency translation adjustment	Foreign currency translation adjustment		11,283			(6,575)		Foreign currency translation adjustment	11,940		10,015		23,223		3,440

Unrealized gain (loss) on derivatives, net of tax			573			(42)
Reclassification of adjustments for loss on derivatives included in Net income, net of tax			681			3,003
Impact of terminated interest rate swaps included in Net income, net of tax			3,021			—
Comprehensive income			93,252			66,184
Unrealized (loss) gain on derivatives, net of tax								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								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								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								Comprehensive (loss) income	(47,303)		97,758		45,949		163,942
Less: comprehensive income attributable to noncontrolling interests	Less: comprehensive income attributable to noncontrolling interests		2,183			936		Less: comprehensive income attributable to noncontrolling interests	1,955		2,341		4,138		3,277
Comprehensive income attributable to Bloomin’ Brands			$	91,069		$	65,248
Comprehensive (loss) income attributable to Bloomin’ Brands								Comprehensive (loss) income attributable to Bloomin’ Brands	$	(49,258)	$	95,417	$	41,811	$	160,665

Earnings per share:
(Loss) earnings per share:								(Loss) earnings per share:
Basic	Basic		$	0.85		$	0.78	Basic	$	(0.72)	$	0.93	$	0.13	$	1.71
Diluted	Diluted		$	0.73		$	0.63	Diluted	$	(0.72)	$	0.75	$	0.12	$	1.38
Weighted average common shares outstanding:	Weighted average common shares outstanding:							Weighted average common shares outstanding:
Basic	Basic		89,355			88,367		Basic	88,898		89,075		89,127		88,721
Diluted	Diluted		103,454			110,641		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.
																			COMMON STOCK						ADDITIONAL PAID-IN CAPITAL				ACCUM- ULATED DEFICIT		ACCUMULATED OTHER COMPREHENSIVE LOSS		NON-CONTROLLING INTERESTS		TOTAL
																			SHARES			AMOUNT
Balance, March 27, 2022																		Balance, March 27, 2022	89,185			$	892				$	1,115,458			$	(634,356)	$	(190,431)	$	1,694	$	293,257

Net (loss) income																		Net (loss) income	—			—			—				(63,635)		—		1,955		(61,680)
Other comprehensive income, net of tax																		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	—			—			4,959				—		—		—		4,959

Common stock issued under stock plans (1)																		Common stock issued under stock plans (1)	414			4			1,118				—		—		—		1,122
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	—			—			—				—		—		(2,513)		(2,513)
Contributions from noncontrolling interests																		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, December 26, 2021																		Balance, December 26, 2021	89,253			$	893		$	1,119,728			$	(698,171)	$	(205,989)	$	6,389	$	222,850

Net income																		Net income	—			—			—				11,876		—		4,138		16,014
Other comprehensive income, net of tax																		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	—			—			9,802				—		—		—		9,802

Common stock issued under stock plans (1)																		Common stock issued under stock plans (1)	897			9			1,998				—		—		—		2,007
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	—			—			—				—		—		(5,154)		(5,154)
Contributions from noncontrolling interests																		Contributions from noncontrolling interests	—			—			—				—		—		461		461

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

	BLOOMIN’ BRANDS, INC.
	COMMON STOCK			ADDITIONAL PAID-IN CAPITAL				ACCUM- ULATED DEFICIT		ACCUMULATED OTHER COMPREHENSIVE LOSS		NON-CONTROLLING INTERESTS				TOTAL
	SHARES	AMOUNT

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

Net income	—	—		—				75,511		—		2,183				77,694
Other comprehensive income, net of tax	—	—		—				—		15,558		—				15,558
Cash dividends declared, $0.14 per common share	—	—		(12,559)				—		—		—				(12,559)
Repurchase and retirement of common stock	(551)	(6)		—				(11,696)		—		—				(11,702)
Stock-based compensation	—	—		4,843				—		—		—				4,843

Common stock issued under stock plans (1)	483	5		880				—		—		—				885
Purchase of noncontrolling interests, net of tax of $888	—	—		2,566				—		—		(4,454)				(1,888)
Distributions to noncontrolling interests	—	—		—				—		—		(2,641)				(2,641)
Contributions from noncontrolling interests	—	—		—				—		—		217				217

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

BLOOMIN’ BRANDS, INC.
COMMON STOCK ADDITIONAL PAID-IN CAPITAL ACCUM-
ULATED DEFICIT ACCUMULATED OTHER
COMPREHENSIVE LOSS NON-CONTROLLING INTERESTS TOTAL
SHARES AMOUNT
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 — — — 68,862 — 936 69,798
Other comprehensive loss, net of tax — — — — (3,614) — (3,614)
Stock-based compensation — 4,726 — — — 4,726
Common stock issued under stock plans (1) 999 10 7,428 — — — 7,438
Distributions to noncontrolling interests — — — — — (1,458) (1,458)
Contributions from noncontrolling interests — — — — — 511 511
Balance,
March 28, 2021 88,855 $ 889 $ 1,097,639 $ (844,864) $ (215,060) $ 6,801 $ 45,405

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, 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)

THIRTEEN WEEKS ENDED
MARCH 27, 2022 MARCH 28, 2021
Cash flows provided by operating activities:
Net income $ 77,694 $ 69,798
Adjustments to reconcile Net income to cash provided by operating activities:
Depreciation and amortization 41,775 41,226
Amortization of debt discounts and issuance costs 1,065 1,308
Amortization of deferred gift card sales commissions 8,017 8,725
Provision for impaired assets and restaurant closings 1,839 2,200
Non-cash interest expense from terminated interest rate swaps 4,067 —
Non-cash operating lease costs 20,477 19,502
Stock-based and other non-cash compensation expense 4,843 4,726
Deferred income tax expense 3,209 1,571
Other, net 2,229 (829)
Change in assets and liabilities (18,080) (7,201)
Net cash provided by operating activities 147,135 141,026
Cash flows used in investing activities:
Capital expenditures (40,180) (17,411)
Other investments, net 1,030 793
Net cash used in investing activities (39,150) (16,618)
Cash flows used in financing activities:
Repayments of long-term debt and finance lease obligations (2,863) (9,656)
Proceeds from borrowings on revolving credit facilities 90,000 15,000
Repayments of borrowings on revolving credit facilities (160,000) (107,000)
Proceeds from share-based compensation, net 885 7,438
Distributions to noncontrolling interests (2,641) (1,458)
Contributions from noncontrolling interests 217 511
Purchase of noncontrolling interests (1,000) —
Payments for partner equity plan (2,748) (1,747)
Repurchase of common stock (10,402) —
Cash dividends paid on common stock (12,559) —
Net cash used in financing activities (101,111) (96,912)
Effect of exchange rate changes on cash and cash equivalents 1,965 (1,246)
Net increase in cash, cash equivalents and restricted cash 8,839 26,250
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 $ 97,896 $ 136,658
Supplemental disclosures of cash flow information:
Cash paid for interest $ 2,444 $ 10,230
Cash paid for income taxes, net of refunds $ 2,257 $ 2,150
Supplemental disclosures of non-cash investing and financing activities:
Leased assets obtained in exchange for new operating lease liabilities $ 11,515 $ 14,819
Leased assets obtained in exchange for new finance lease liabilities $ 1,313 $ 15
(Decrease) increase in liabilities from the acquisition of property, fixtures and equipment $ (6,178) $ 2,005


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

Cash flows provided by operating activities:
Net income	$	16,014	$	154,684
Adjustments to reconcile Net income to cash provided by operating activities:
Depreciation and amortization	83,032		81,765
Amortization of debt discounts and issuance costs	2,025		2,396
Amortization of deferred gift card sales commissions	13,458		14,436
Provision for impaired assets and restaurant closings	2,032		7,377

Non-cash interest expense from terminated interest rate swaps	6,980		1,981
Non-cash operating lease costs	41,336		38,073


Stock-based and other non-cash compensation expense	9,802		14,507
Deferred income tax expense	8,329		10,300


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



Loss on fair value adjustment of derivatives, net	17,685		—
Other, net	4,935		(1,343)
Change in assets and liabilities	(94,440)		(43,067)






Net cash provided by operating activities	218,818		283,182
Cash flows used in investing activities:
Proceeds from disposal of property, fixtures and equipment	163		4,828


Capital expenditures	(76,901)		(51,398)
Other investments, net	1,000		3,945
Net cash used in investing activities	$	(75,738)	$	(42,625)

	(CONTINUED...)

Table of Contents

BLOOMIN’ BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(DOLLARS IN THOUSANDS, UNAUDITED)


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

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

Repayments of long-term debt and finance lease obligations	(195,733)		(425,564)
Proceeds from borrowings on revolving credit facilities	624,500		286,000
Repayments of borrowings on revolving credit facilities	(304,500)		(599,000)

Financing fees	(853)		(5,868)
Proceeds from issuance of senior notes	—		300,000




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



Cash dividends paid on common stock	(24,977)		—

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)
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	$	95,447	$	103,075
Supplemental disclosures of cash flow information:
Cash paid for interest	$	18,862	$	23,748
Cash paid for income taxes, net of refunds	$	17,191	$	11,883
Supplemental disclosures of non-cash investing and financing activities:

Leased assets obtained in exchange for new operating lease liabilities	$	26,415	$	28,261
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	$	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)

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 26, 2021.

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, with early adoption permitted. The Company is currently evaluating the impact the~~2022. Upon adoption of ASU No. 2021-10 ~~will have on its~~during the fourth quarter of 2022, the Company anticipates government assistance financial statement ~~disclosures.~~footnote disclosures within the 2022 Form 10-K, primarily in connection with employee retention credits provided under the Coronavirus, Aid, Relief and Economic Security (“CARES”) Act.

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

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

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

2. Revenue Recognition

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


		THIRTEEN WEEKS ENDED					THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	(dollars in thousands)		MARCH 27, 2022		MARCH 28, 2021			(dollars in thousands)	JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
Revenues	Revenues							Revenues
Restaurant sales	Restaurant sales		$	1,123,575	$	979,451		Restaurant sales	$	1,108,918	$	1,055,227	$	2,232,493	$	2,034,678
Franchise and other revenues	Franchise and other revenues							Franchise and other revenues
Franchise revenues	Franchise revenues		13,406		6,789			Franchise revenues	12,596		12,221		26,002		19,010
Other revenues(1)	Other revenues(1)		3,554		1,233			Other revenues(1)	3,648		9,918		7,202		11,151
Total Franchise and other revenues	Total Franchise and other revenues		16,960		8,022			Total Franchise and other revenues	16,244		22,139		33,204		30,161
Total revenues	Total revenues		$	1,140,535	$	987,473		Total revenues	$	1,125,162	$	1,077,366	$	2,265,697	$	2,064,839

________________

(1)During the thirteen and twenty-six weeks ended June 27, 2021, the Company recognized $6.3 million of other revenues in connection with favorable court rulings in Brazil regarding the calculation methodology and taxable base of Program of Social Integration (“PIS”) and Contribution for the Financing of Social Security (“COFINS”) taxes. The amount recognized as a result of the favorable court rulings primarily represents refundable PIS and COFINS taxes for prior years, including accrued interest.

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


	THIRTEEN WEEKS ENDED
	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 table includes the 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
		MARCH 27, 2022				MARCH 28, 2021					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	$	595,393	$	8,459	$	547,195	$	2,956	Outback Steakhouse	$	1,168,956	$	16,615	$	1,126,291	$	11,374
Carrabba’s Italian Grill	Carrabba’s Italian Grill	175,628		661		157,686		617		Carrabba’s Italian Grill	345,818		1,458		329,094		1,282
Bonefish Grill	Bonefish Grill	151,416		177		126,974		130		Bonefish Grill	296,888		350		276,010		304
Fleming’s Prime Steakhouse & Wine Bar	Fleming’s Prime Steakhouse & Wine Bar	97,662		—		66,311		—		Fleming’s Prime Steakhouse & Wine Bar	191,595		—		154,412		—
Other	Other	3,536		5		1,893		—		Other	6,305		13		4,545		—
U.S. total	U.S. total	1,023,635		9,302		900,059		3,703		U.S. total	2,009,562		18,436		1,890,352		12,960
International	International									International
Outback Steakhouse Brazil	Outback Steakhouse Brazil	85,301		—		60,848		—		Outback Steakhouse Brazil	185,948		—		104,158		—
Other (1)	Other (1)	14,639		4,104		18,544		3,086		Other (1)	36,983		7,566		40,168		6,050
International total	International total	99,940		4,104		79,392		3,086		International total	222,931		7,566		144,326		6,050
Total	Total	$	1,123,575	$	13,406	$	979,451	$	6,789	Total	$	2,232,493	$	26,002	$	2,034,678	$	19,010

________________

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)	(dollars in thousands)	MARCH 27, 2022		DECEMBER 26, 2021		(dollars in thousands)	JUNE 26, 2022		DECEMBER 26, 2021
Other current assets, net	Other current assets, net					Other current assets, net
Deferred gift card sales commissions	Deferred gift card sales commissions	$	13,033	$	17,793	Deferred gift card sales commissions	$	12,338	$	17,793

Unearned revenue	Unearned revenue					Unearned revenue
Deferred gift card revenue	Deferred gift card revenue	$	314,974	$	387,945	Deferred gift card revenue	$	303,544	$	387,945
Deferred loyalty revenue	Deferred loyalty revenue	8,217		9,386		Deferred loyalty revenue	4,309		9,386
Deferred franchise fees - current	Deferred franchise fees - current	439		443		Deferred franchise fees - current	440		443

Other	Other	1,674		1,021		Other	1,570		1,021
Total Unearned revenue		$	325,304	$	398,795
Total unearned revenue						Total unearned revenue	$	309,863	$	398,795

Other long-term liabilities, net	Other long-term liabilities, net					Other long-term liabilities, net
Deferred franchise fees - non-current	Deferred franchise fees - non-current	$	4,284	$	4,280	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			THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
(dollars in thousands)	(dollars in thousands)		MARCH 27, 2022			MARCH 28, 2021		(dollars in thousands)	JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
Balance, beginning of period			$	17,793		$	19,300
Balance, beginning of the period								Balance, beginning of the period	$	13,033	$	13,502	$	17,793	$	19,300
Deferred gift card sales commissions amortization	Deferred gift card sales commissions amortization		(8,017)			(8,725)		Deferred gift card sales commissions amortization	(5,441)		(5,711)		(13,458)		(14,436)
Deferred gift card sales commissions capitalization	Deferred gift card sales commissions capitalization		4,169			3,499		Deferred gift card sales commissions capitalization	5,436		5,297		9,605		8,796
Other	Other		(912)			(572)		Other	(690)		(540)		(1,602)		(1,112)
Balance, end of period			$	13,033		$	13,502
Balance, end of the period								Balance, end of the period	$	12,338	$	12,548	$	12,338	$	12,548

811

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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


		THIRTEEN WEEKS ENDED			THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
(dollars in thousands)	(dollars in thousands)		MARCH 27, 2022			MARCH 28, 2021		(dollars in thousands)	JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
Balance, beginning of period			$	387,945		$	373,048
Balance, beginning of the period								Balance, beginning of the period	$	314,974	$	306,075	$	387,945	$	373,048
Gift card sales	Gift card sales		50,280			44,169		Gift card sales	65,174		63,921		115,454		108,090
Gift card redemptions	Gift card redemptions		(116,622)			(104,940)		Gift card redemptions	(72,428)		(71,859)		(189,050)		(176,799)
Gift card breakage	Gift card breakage		(6,629)			(6,202)		Gift card breakage	(4,176)		(4,182)		(10,805)		(10,384)
Balance, end of period			$	314,974		$	306,075
Balance, end of the period								Balance, end of the period	$	303,544	$	293,955	$	303,544	$	293,955

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		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

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 assessments were qualitative. In connection with these assessments, the Company did 0t record any impairment charges.

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


	TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 26, 2022
Balance, beginning of the period	$	8,485

Cash payments	(2,308)
Accretion	304
Adjustments	(323)
Balance, end of the period (1)	$	6,158

________________

(1)As of June 26, 2022, the Company had exit-related accruals related to certain closure and restructuring initiatives of $1.6 million recorded in Accrued and other current liabilities and $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 Per Share

In February 2021, the Company provided the trustee of its convertible senior notes due in 2025 (the “2025 Notes”) notice of the Company’s irrevocable election to settle the principal portion of the 2025 Notes in cash and any excess in shares. As a result, subsequent to the election, only the amounts in excess of the principal amount are considered in diluted earnings per share. The amount of the 2025 Notes settled in shares of common stock will have a dilutive impact on diluted earnings per share when the average market price of the Company’s common stock for a given period exceeds the conversion price, which was initially $11.89 per share of common stock.

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

In connection with dividends paid during the ~~thirteen~~twenty-six weeks ended ~~March 27,~~June 26, 2022, the conversion price of the 2025 Notes decreased to ~~$11.82~~$11.74 per share of common stock and the strike price of the related warrants decreased to ~~$16.55~~$16.43 per share of common stock.

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

THIRTEEN WEEKS ENDED
(in thousands, except per share data) MARCH 27, 2022 MARCH 28, 2021
Net income attributable to Bloomin’ Brands $ 75,511 $ 68,862
Convertible senior notes if-converted method interest adjustment, net of tax (1) — 1,381
Diluted net income attributable to Bloomin’ Brands $ 75,511 $ 70,243
Basic weighted average common shares outstanding 89,355 88,367
Effect of dilutive securities:
Stock options 370 709
Nonvested restricted stock units 279 503
Nonvested performance-based share units 276 94
Convertible senior notes (1) 8,732 15,193
Warrants 4,442 5,775
Diluted weighted average common shares outstanding 103,454 110,641
Basic earnings per share $ 0.85 $ 0.78
Diluted earnings per share $ 0.73 $ 0.63


	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)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.

(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 weeks ended June 26, 2022, dilutive excess shares and warrants were excluded from the computation of diluted earnings per share as their effect would be antidilutive.

913

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

THIRTEEN WEEKS ENDED
(shares in thousands) MARCH 27, 2022 MARCH 28, 2021
Stock options 1,417 1,364
Nonvested restricted stock units 217 73
Nonvested performance-based share units 365 431


	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

4.5. Stock-based Compensation Plans

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

THIRTEEN WEEKS ENDED
(dollars in thousands) MARCH 27, 2022 MARCH 28, 2021
Performance-based share units $ 2,619 $ 1,469
Restricted stock units 1,810 2,366
Stock options 377 865
$ 4,806 $ 4,700


	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 thirteen and twenty-six weeks ended 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 2022, the Company granted 0.5 million performance-based share units (“PSUs”) subject to final payout modification by a Relative Total Shareholder Return (“Relative TSR”) modifier. This Relative TSR modifier can adjust the final payout outcome by 75%, 100% or 125% of the achieved performance metric, with the overall payout capped at 200% of the annual target grant. These PSUs have a three-year cliff vesting period and their fair value was estimated using the Monte Carlo simulation model.

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


		THIRTEEN WEEKS ENDED							TWENTY-SIX WEEKS ENDED
		MARCH 27, 2022			MARCH 28, 2021				JUNE 26, 2022			JUNE 27, 2021
Assumptions:	Assumptions:							Assumptions:
Risk-free interest rate (1)	Risk-free interest rate (1)	1.64		%	0.20		%	Risk-free interest rate (1)	1.64		%	0.20		%
Dividend yield (2)	Dividend yield (2)	2.31		%	—		%	Dividend yield (2)	2.31		%	—		%

Volatility (3)	Volatility (3)	49.11		%	48.45		%	Volatility (3)	49.11		%	48.45		%

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

(4)Represents a premium above the per share value of the Company’s common stock for the Relative TSR modifier as of the grant date of 7.9% and 14.3% ~~as of March 27,~~for grants during the twenty-six weeks ended June 26, 2022 and ~~March 28,~~June 27, 2021, respectively.

~~The following represents unrecognized stock-based compensation expense and the remaining weighted average vesting period as of March 27, 2022:~~

UNRECOGNIZED COMPENSATION EXPENSE
(dollars in thousands) REMAINING WEIGHTED AVERAGE VESTING PERIOD (in years)
Performance-based share units $ 21,163 1.6
Restricted stock units $ 12,002 2.2

1014

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

5.The following represents unrecognized stock-based compensation expense and the remaining weighted average vesting period as of 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

6. Other Current Assets, Net

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


(dollars in thousands)	(dollars in thousands)	MARCH 27, 2022		DECEMBER 26, 2021		(dollars in thousands)	JUNE 26, 2022		DECEMBER 26, 2021
Prepaid expenses	Prepaid expenses	$	21,431	$	21,194	Prepaid expenses	$	28,000	$	21,194
Accounts receivable - gift cards, net	Accounts receivable - gift cards, net	8,660		91,248		Accounts receivable - gift cards, net	15,575		91,248
Accounts receivable - vendors, net	Accounts receivable - vendors, net	14,297		11,793		Accounts receivable - vendors, net	12,284		11,793
Accounts receivable - franchisees, net	Accounts receivable - franchisees, net	1,345		1,701		Accounts receivable - franchisees, net	1,720		1,701
Accounts receivable - other, net	Accounts receivable - other, net	21,665		18,353		Accounts receivable - other, net	19,184		18,353
Deferred gift card sales commissions	Deferred gift card sales commissions	13,033		17,793		Deferred gift card sales commissions	12,338		17,793

Company-owned life insurance policies	Company-owned life insurance policies	18,023		17,244		Company-owned life insurance policies	21,501		17,244
Other current assets, net	Other current assets, net	6,134		5,297		Other current assets, net	6,395		5,297
		$	104,588	$	184,623		$	116,997	$	184,623

6.7. Long-term Debt, Net

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


		MARCH 27, 2022				DECEMBER 26, 2021					JUNE 26, 2022				DECEMBER 26, 2021
(dollars in thousands)	(dollars in thousands)	OUTSTANDING BALANCE		INTEREST RATE		OUTSTANDING BALANCE		INTEREST RATE		(dollars in thousands)	OUTSTANDING BALANCE		INTEREST RATE		OUTSTANDING BALANCE		INTEREST RATE
Senior Secured Credit Facility:	Senior Secured Credit Facility:									Senior Secured Credit Facility:
Term loan A (1)	Term loan A (1)	$	192,500	1.76	%	$	195,000	1.60	%	Term loan A (1)	$	—			$	195,000	1.60	%
Revolving credit facility (2)	Revolving credit facility (2)	10,000		4.00	%	80,000		3.75	%	Revolving credit facility (2)	400,000		2.74	%	80,000		3.75	%
Total Senior Secured Credit Facility	Total Senior Secured Credit Facility	202,500				275,000				Total Senior Secured Credit Facility	400,000				275,000

2025 Notes(3)	2025 Notes(3)	230,000		5.00	%	230,000		5.00	%	2025 Notes(3)	105,000		5.00	%	230,000		5.00	%
2029 Notes	2029 Notes	300,000		5.13	%	300,000		5.13	%	2029 Notes	300,000		5.13	%	300,000		5.13	%
Finance lease liabilities	Finance lease liabilities	3,380				2,376				Finance lease liabilities	4,228				2,376

Less: unamortized debt discount and issuance costs(4)	Less: unamortized debt discount and issuance costs(4)	(13,433)				(14,157)				Less: unamortized debt discount and issuance costs(4)	(7,176)				(14,157)
Less: finance lease interest	Less: finance lease interest	(202)				(154)				Less: finance lease interest	(319)				(154)
Total debt, net	Total debt, net	722,245				793,065				Total debt, net	801,733				793,065
Less: current portion of long-term debt	Less: current portion of long-term debt	(11,220)				(10,958)				Less: current portion of long-term debt	(1,511)				(10,958)
Long-term debt, net	Long-term debt, net	$	711,025			$	782,107			Long-term debt, net	$	800,222			$	782,107

________________

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

~~Debt Covenants -~~ AsTable of ~~March 27, 2022 and December 26, 2021, the Company was in compliance with its debt covenants.~~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 “Credit Agreement”), which provides for senior secured financing of up to $1.0 billion consisting of a $200.0 million Term loan A and an $800.0 million revolving credit facility (the “Senior Secured Credit Facility”)., maturing on April 16, 2026.

On April 26, 2022, the Company and OSI entered into the First Amendment to the Second Amended and Restated Credit Agreement and Incremental Amendment (the “Amended Credit Agreement”), which included an increase of the Company’s existing revolving credit facility from $800.0 million to $1.0 billion and a transition from London Inter-Bank Offered Rate (“LIBOR”) to Secured Overnight Financing Rate (“SOFR”) as the benchmark rate for

~~Table of Contents~~

~~BLOOMIN’ BRANDS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED) - Continued~~

purposes of calculating interest under the Senior Secured Credit Facility. At closing, an incremental $192.5 million was drawn on the revolving credit facility to fully repay the outstanding balance of Term loan A. The total indebtedness of the Company remained unchanged as a result of the Amended Credit Agreement.

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


	BASE RATE ELECTION	ADJUSTED TERM SOFR ELECTION
Revolving credit facility	50 to 150 basis points over the Base Rate	150 to 250 basis points over the Adjusted Term SOFR

The transition to SOFR did not materially impact the interest rate applied to the Company’s borrowings. No other material changes were made to the terms of the Company’s Credit Agreement as a result of the Amended Credit Agreement.

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

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


(dollars in thousands)	JUNE 26, 2022
Year 1	$	1,543
Year 2	1,389
Year 3	105,770
Year 4	400,306
Year 5	176
Thereafter	300,044
Total payments	809,228
Less: unamortized debt discount and issuance costs	(7,176)
Less: finance lease interest	(319)
Total principal payments	$	801,733

8. Convertible Senior Notes

2025 Notes - On May 25, 2022, the Company entered into exchange agreements (the “Exchange Agreements”) with certain holders (the “Noteholders”) of the 2025 Notes. The Noteholders agreed to exchange $125.0 million in

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

aggregate principal amount of the Company’s outstanding 2025 Notes for $196.9 million in cash, plus accrued interest, and approximately 2.3 million shares of the Company’s common stock (the “2025 Notes Partial Repurchase”). Under the Exchange Agreements, the total amount of cash paid and number of shares of common stock issued by the Company were based upon the volume-weighted average price per share of the Company’s common stock during a ten-trading day averaging period ending on June 14, 2022. Upon entering into the Exchange Agreements, the conversion feature related to the 2025 Notes repurchased, as well as the settlements of the related 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 was 84.122 shares of common stock per $1,000 principal amount of 2025 Notes, or a total of approximately 19.348 million shares for the total $230.0 million principal amount. This initial conversion rate was equivalent to an initial conversion price of approximately $11.89 per share. In connection with dividends paid during the ~~thirteen~~twenty-six weeks ended ~~March 27,~~June 26, 2022, the conversion rate for the remaining 2025 Notes decreased to approximately ~~$11.82~~$11.74 per share, which represents ~~84.603~~85.185 shares of common stock per $1,000 principal amount of the 2025 Notes, or a total of approximately ~~19.459~~8.944 million shares.

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


(dollars in thousands)	(dollars in thousands)	MARCH 27, 2022		DECEMBER 26, 2021		(dollars in thousands)	JUNE 26, 2022		DECEMBER 26, 2021
Long-term debt, net	Long-term debt, net					Long-term debt, net
Principal	Principal	$	230,000	$	230,000	Principal	$	105,000	$	230,000
Less: debt issuance costs (1)	Less: debt issuance costs (1)	(5,495)		(5,898)		Less: debt issuance costs (1)	(2,321)		(5,898)
Net carrying amount	Net carrying amount	$	224,505	$	224,102	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 result of the 2025 Notes Partial Repurchase.

Following is a summary of interest expense for the 2025 Notes, by component, for the periods indicated:


		THIRTEEN WEEKS ENDED			THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
(dollars in thousands)	(dollars in thousands)		MARCH 27, 2022			MARCH 28, 2021		(dollars in thousands)	JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
Coupon interest	Coupon interest		$	2,875		$	2,875	Coupon interest	$	2,597	$	2,875	$	5,472	$	5,750
Deferred issuance cost amortization			404			381
Debt issuance cost amortization								Debt issuance cost amortization	370		386		774		767
Total interest expense (1)	Total interest expense (1)		$	3,279		$	3,256	Total interest expense (1)	$	2,967	$	3,261	$	6,246	$	6,517

________________

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

Based on the daily closing prices of the Company’s stock during the quarter ended ~~March 27,~~June 26, 2022, the remaining holders of the 2025 Notes are eligible to convert their 2025 Notes during the ~~second~~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

~~Convertible Note Warrant Transactions~~ - The remaining Warrant Transactions have a dilutive effect on the Company’s common stock to the extent that the price of its common stock exceeds the strike price of the Warrant Transactions. The strike price was initially $16.64 per share and is subject to certain adjustments under the terms of the Warrant Transactions. In connection with dividends paid during the ~~thirteen~~twenty-six weeks ended ~~March 27,~~June 26, 2022, the strike price for the remaining Warrant Transactions decreased to ~~$16.55.~~$16.43.

8.9. Other Long-term Liabilities, Net

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


(dollars in thousands)	(dollars in thousands)	MARCH 27, 2022		DECEMBER 26, 2021		(dollars in thousands)	JUNE 26, 2022		DECEMBER 26, 2021
Accrued insurance liability	Accrued insurance liability	$	30,779	$	31,517	Accrued insurance liability	$	29,281	$	31,517

Deferred payroll tax liabilities (1)	Deferred payroll tax liabilities (1)	—		27,302		Deferred payroll tax liabilities (1)	—		27,302
Executive management deferred compensation obligations	Executive management deferred compensation obligations	21,032		23,543		Executive management deferred compensation obligations	19,098		23,543
Other long-term liabilities	Other long-term liabilities	38,692		42,880		Other long-term liabilities	40,111		42,880
		$	90,503	$	125,242		$	88,490	$	125,242

_______________

(1)During the ~~thirteen~~twenty-six weeks ended ~~March 27,~~June 26, 2022, the Company reclassified $27.3 million of payroll taxes deferred under the ~~Coronavirus, Aid, Relief and Economic Security~~CARES Act to current.

9.10. 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 ~~March 27,~~June 26, 2022, ~~$113.3~~$77.5 million remained available for repurchase under the 2022 Share Repurchase Program. Following is a summary of the shares repurchased under the ~~Company’s share repurchase program~~2022 Share Repurchase Program during fiscal year 2022:


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

First fiscal quarter (1)		551	$	21.26	$	11,702
First fiscal quarter							First fiscal quarter	551	$	21.26	$	11,702
Second fiscal quarter							Second fiscal quarter	1,761	$	20.30	35,749
Total common stock repurchases (1)							Total common stock repurchases (1)	2,312	$	20.53	$	47,451

________________

(1)Subsequent to ~~March 27,~~June 26, 2022, the Company repurchased ~~723~~854 thousand shares of its common stock for ~~$15.6~~$14.9 million under a Rule 10b5-1 ~~plan.~~plan through July 28, 2022.

Dividends - The Company declared and paid dividends per share during fiscal year 2022 as follows:


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

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

In ~~April~~July 2022, the Board declared a quarterly cash dividend of $0.14 per share, payable on ~~May 25,~~August 24, 2022 to shareholders of record at the close of business on ~~May 11,~~August 10, 2022.

1318

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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


(dollars in thousands)	(dollars in thousands)	MARCH 27, 2022		DECEMBER 26, 2021		(dollars in thousands)	JUNE 26, 2022		DECEMBER 26, 2021
Foreign currency translation adjustment	Foreign currency translation adjustment	$	(184,197)	$	(195,480)	Foreign currency translation adjustment	$	(172,257)	$	(195,480)
Unrealized loss on derivatives, net of tax	Unrealized loss on derivatives, net of tax	(6,234)		(10,509)		Unrealized loss on derivatives, net of tax	(3,797)		(10,509)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	$	(190,431)	$	(205,989)	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
(dollars in thousands) MARCH 27, 2022 MARCH 28, 2021
Foreign currency translation adjustment $ 11,283 $ (6,575)
Unrealized gain (loss) on derivatives, net of tax 573 (42)
Reclassification of adjustments for loss on derivatives included in Net income, net of tax (1) 681 3,003
Impact of terminated interest rate swaps included in Net income, net of tax 3,021 —
Total unrealized gain on derivatives, net of tax 4,275 2,961
Other comprehensive income (loss) attributable to Bloomin’ Brands $ 15,558 $ (3,614)


	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)See Note 1011 - Derivative Instruments and Hedging Activities for the tax impact of ~~reclassifications.~~reclassifications and the terminated swaps.

~~10.~~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 fixed rate of 3.04% on the notional amount and ~~receives~~received payments from the counterparty based on one-month LIBOR. During 2021, the Company terminated its variable-to-fixed interest rate swap agreements with certain counterparties and as a result, as of ~~March 27, 2022~~December 26, 2021 had interest rate swap agreements remaining with 2 counterparties for an aggregate notional amount of $125.0 million.

~~The Company’s swap agreements have been designated and qualify as cash flow hedges, are recognized on its Consolidated Balance Sheets at fair value and are classified based on the instruments’~~maturity dates. As of March 27, 2022, the Company estimated $8.5 million will be reclassified to Interest expense, net through the November 2022 maturity date of the swaps, including interest expense related to the terminated swap agreements.

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

(dollars in thousands) MARCH 27, 2022 DECEMBER 26, 2021 CONSOLIDATED BALANCE SHEET CLASSIFICATION
Interest rate swaps - liability (1) $ 1,368 $ 3,056 Accrued and other current liabilities
Accrued interest $ 275 $ 276 Accrued and other current liabilities

~~____________________~~

~~(1)See Note 12 -~~ ~~Fair Value Measurements~~ ~~for fair value discussion of the interest rate swaps.~~

~~Table of Contents~~

~~BLOOMIN’ BRANDS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED) - Continued~~

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

THIRTEEN WEEKS ENDED
(dollars in thousands) MARCH 27, 2022 MARCH 28, 2021
Interest rate swap expense recognized in Interest expense, net $ (917) $ (4,044)
Income tax benefit recognized in Provision for income taxes 236 1,041
Total effects on Net income (1) $ (681) $ (3,003)

~~____________________~~

~~(1)Excludes the effects on Net income of terminated interest rate swaps.~~

By utilizing the interest rate swaps, the Company is exposed to credit-related losses in the event that the counterparty fails to perform under the terms of the derivative contract. To mitigate this risk, the Company enters into derivative contracts with major financial institutions based upon credit ratings and other factors. The Company continually assesses the creditworthiness of its counterparties. As of March 27, 2022, 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.

In connection with the Amended Credit Agreement, on April 26, 2022 the Company terminated its remaining variable-to-fixed interest rate swap agreements. Following these terminations, the unrealized losses related to the terminated swap agreements included in Accumulated other comprehensive loss will be amortized to Interest expense, net during 2022.

The Company’s swap agreements were designated and qualified as cash flow hedges, recognized on its Consolidated Balance Sheet at fair value as of December 26, 2021 and classified based on the instruments’maturity dates. As of June 26, 2022, the Company estimated $5.2 million of interest expense from the terminated swap agreements will be reclassified to Interest expense, net through the November 2022 maturity date of the swaps.

~~11.~~

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 period indicated:

(dollars in thousands)

DECEMBER 26, 2021

CONSOLIDATED BALANCE SHEET CLASSIFICATION

Interest rate swaps - liability (1)

3,056

Accrued and other current liabilities

Accrued interest

276

Accrued and other current liabilities

____________________

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

The following table summarizes the effects of the swap agreements on Net (loss) income 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
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)

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	MARCH 27, 2022		DECEMBER 26, 2021		(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	$	1,124,517	$	1,130,873	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	3,055		2,074		Finance lease right-of-use assets (1)	Property, fixtures and equipment, net	3,782		2,074
Total lease assets, net	Total lease assets, net		$	1,127,572	$	1,132,947	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	$	177,633	$	177,028	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	1,220		958		Current finance lease liabilities	Current portion of long-term debt	1,511		958
Non-current operating lease liabilities (2)	Non-current operating lease liabilities (2)	Non-current operating lease liabilities	1,172,564		1,178,998		Non-current operating lease liabilities (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	1,958		1,264		Non-current finance lease liabilities	Long-term debt, net	2,398		1,264
Total lease liabilities	Total lease liabilities		$	1,353,375	$	1,358,248	Total lease liabilities		$	1,351,144	$	1,358,248

________________

(1)Net of accumulated amortization of ~~$3.7~~$4.1 million and $3.3 million as of ~~March 27,~~June 26, 2022 and December 26, 2021, respectively.

(2)Excludes current accrued contingent percentage rent of ~~$4.0~~$4.3 million and $3.5 million, as of ~~March 27,~~June 26, 2022 and December 26, 2021, respectively, and immaterial current and non-current COVID-19-related deferred rent accruals.

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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 INCOME CLASSIFICATION	THIRTEEN WEEKS ENDED			CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME CLASSIFICATION					THIRTEEN WEEKS ENDED			TWENTY-SIX WEEKS ENDED
(dollars in thousands)	(dollars in thousands)			MARCH 27, 2022					MARCH 28, 2021	(dollars in thousands)	CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME CLASSIFICATION	JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
Operating leases (1)	Operating leases (1)	Other restaurant operating		$	45,361		$	44,792		Operating leases (1)		$	45,579	$	43,763	$	90,940	$	88,555
Variable lease cost (2)	Variable lease cost (2)	Other restaurant operating		1,883			777			Variable lease cost (2)	Other restaurant operating	1,619		731		3,502		1,508
Finance leases:	Finance leases:									Finance leases:
Amortization of leased assets	Amortization of leased assets	Depreciation and amortization		337			262			Amortization of leased assets	Depreciation and amortization	356		258		693		520
Interest on lease liabilities	Interest on lease liabilities	Interest expense, net		32			36			Interest on lease liabilities	Interest expense, net	44		31		76		67
Sublease revenue	Sublease revenue	Franchise and other revenues		(2,558)			(835)			Sublease revenue	Franchise and other revenues	(2,436)		(2,825)		(4,994)		(3,660)
Lease costs, net	Lease costs, net			$	45,055		$	45,032		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 ~~$3.0~~$3.1 million and ~~$3.5~~$3.2 million for the thirteen weeks ended ~~March 27,~~June 26, 2022 and ~~March 28,~~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 ~~March 28,~~June 27, 2021.

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

THIRTEEN WEEKS ENDED

TWENTY-SIX WEEKS ENDED

(dollars in thousands)

MARCH 27, 2022

MARCH 28, 2021

(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

48,560

52,717

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

97,255

105,323

~~12.~~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

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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:


		MARCH 27, 2022						DECEMBER 26, 2021							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	$	4,552	$	4,552	$	—	$	6,714	$	6,714	$	—	Fixed income funds	$	13,583	$	13,583	$	—	$	6,714	$	6,714	$	—
Money market funds	Money market funds	9,828		9,828		—		9,039		9,039		—		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	101		101		—		1,472		1,472		—		Money market funds	101		101		—		1,472		1,472		—

Total asset recurring fair value measurements	Total asset recurring fair value measurements	$	14,481	$	14,481	$	—	$	17,225	$	17,225	$	—	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	$	1,368	$	—	$	1,368	$	3,056	$	—	$	3,056	Derivative instruments - interest rate swaps	$	—	$	—	$	—	$	3,056	$	—	$	3,056

Total liability recurring fair value measurements	Total liability recurring fair value measurements	$	1,368	$	—	$	1,368	$	3,056	$	—	$	3,056	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 ~~March 27, 2022 and~~ December 26, 2021, the Company has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives.

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


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

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BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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

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:


		MARCH 27, 2022				DECEMBER 26, 2021				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	$	192,500	$	188,169			$	195,000		$	190,125		Term loan A	$	—	$	—	$	195,000	$	190,125
Revolving credit facility	Revolving credit facility	$	10,000	$	9,750			$	80,000		$	76,926		Revolving credit facility	$	400,000	$	390,000	$	80,000	$	76,926

2025 Notes	2025 Notes	$	230,000	$	441,515			$	230,000		$	447,615		2025 Notes	$	105,000	$	177,031	$	230,000	$	447,615
2029 Notes	2029 Notes	$	300,000	$	286,647			$	300,000		$	304,395		2029 Notes	$	300,000	$	255,000	$	300,000	$	304,395

~~Table of Contents~~14. Income Taxes

~~BLOOMIN’ BRANDS, INC.~~


	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		%

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED) - Continued~~

~~13. Income Taxes~~

THIRTEEN WEEKS ENDED
(dollars in thousands) MARCH 27, 2022 MARCH 28, 2021
Income before provision for income taxes $ 93,623 $ 76,391
Provision for income taxes $ 15,929 $ 6,593
Effective income tax rate 17.0 % 8.6 %

The effective income tax rate for the thirteen weeks ended ~~March 27,~~June 26, 2022 includes the impact of nondeductible losses associated with the 2025 Notes Partial Repurchase which, relative to a pre-tax book loss during the quarter, resulted in a negative effective income tax rate.

The effective income tax rate for the twenty-six weeks ended June 26, 2022 increased by~~8.4~~ 47.3 percentage points as compared to the ~~thirteen~~twenty-six weeks ended ~~March 28,~~June 27, 2021. The increase was primarily due to the ~~change in~~non-deductible losses associated with the ~~amount and mix of forecasted pre-tax book income across~~2025 Notes Partial Repurchase recorded during the ~~Company’s U.S. and international subsidiaries.~~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 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-2021~~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 a portion~~ 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 ~~will be~~has been released during ~~2022. The impact of non-creditable foreign taxes~~the thirteen and ~~the release of the valuation allowance has been considered as part of the~~twenty-six weeks ended June 26, 2022.

The effective income tax rate for the thirteen weeks ended ~~March 27, 2022.~~

~~The Company has a~~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 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 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.

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BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

The effective income tax rates for the thirteen and twenty-six weeks ended ~~March~~June 27, ~~2022 and March 28,~~ 2021 were lower than the statutory rate primarily due to the benefit of FICA tax credits on certain employees’ tips.

~~14.~~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 ~~$7.5~~$8.5 million and $7.1 million for certain of its outstanding legal proceedings as of ~~March 27,~~June 26, 2022 and December 26, 2021, respectively, within Accrued and other current liabilities and Other long-term liabilities on its Consolidated Balance Sheets. While the Company believes that additional losses beyond these accruals are reasonably possible, it cannot estimate a possible loss contingency or range of reasonably possible loss contingencies beyond these accruals.

~~Table of Contents~~

~~BLOOMIN’ BRANDS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED) - Continued~~

The Company intends to defend itself in legal matters. Some of these matters may be covered, at least in part, by insurance if they exceed specified retention or deductible amounts. However, it is possible that claims may be denied by the Company’s insurance carriers, the Company may be required by its insurance carriers to contribute to the payment of claims, or the Company’s insurance coverage may not continue to be available on acceptable terms or in sufficient amounts. The Company records receivables from third party insurers when recovery has been determined to be probable. The Company believes that the ultimate determination of liability in connection with legal claims pending against the Company, if any, in excess of amounts already provided for such matters in the consolidated financial statements, will not have a material adverse effect on its business, annual results of operations, liquidity or financial position. However, it is possible that the Company’s business, results of operations, liquidity, or financial condition could be materially affected in a particular future reporting period by the unfavorable resolution of one or more matters or contingencies during such period.

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 ~~March 27,~~June 26, 2022, the undiscounted payments that the Company could be required to make in the event of non-payment by the primary lessees was approximately ~~$24.2~~$23.0 million. The present value of these potential payments discounted at the Company’s incremental borrowing rate as of ~~March 27,~~June 26, 2022 was approximately ~~$20.0~~$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 ~~March 27,~~June 26, 2022 and December 26, 2021, the Company’s recorded contingent lease liability was ~~$9.0~~$8.4 million and $8.7 million, respectively.

~~15. Segment Reporting~~

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BLOOMIN’ BRANDS, INC.

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.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

16. Segment Reporting

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

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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
(dollars in thousands) MARCH 27, 2022 MARCH 28, 2021
Total revenues
U.S. $ 1,036,407 $ 904,918
International 104,128 82,555
Total revenues $ 1,140,535 $ 987,473

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

THIRTEEN WEEKS ENDED
(dollars in thousands) MARCH 27, 2022 MARCH 28, 2021
Segment income from operations
U.S. $ 132,226 $ 121,735
International 8,884 3,537
Total segment income from operations 141,110 125,272
Unallocated corporate operating expense (33,854) (34,274)
Total income from operations 107,256 90,998
Other income, net — 21
Interest expense, net (13,633) (14,628)
Income before provision for income taxes $ 93,623 $ 76,391

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


		THIRTEEN WEEKS ENDED			THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
(dollars in thousands)	(dollars in thousands)		MARCH 27, 2022			MARCH 28, 2021		(dollars in thousands)	JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
Depreciation and amortization	Depreciation and amortization							Depreciation and amortization
U.S.	U.S.		$	34,759		$	33,645	U.S.	$	33,544	$	33,578	$	68,303	$	67,223
International	International		5,537			5,720		International	6,019		5,566		11,556		11,286
Corporate	Corporate		1,479			1,861		Corporate	1,694		1,395		3,173		3,256
Total depreciation and amortization	Total depreciation and amortization		$	41,775		$	41,226	Total depreciation and amortization	$	41,257	$	40,539	$	83,032	$	81,765

2026

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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, including supplier freight charges and restaurant distribution ~~expenses;~~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;

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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 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;

(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 26, 2021.

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 ~~March 27,~~June 26, 2022, we owned and operated ~~1,166~~1,169 full-service restaurants and off-premises only kitchens and franchised ~~333~~332 full-service restaurants and off-premises only kitchens across 47 states, Guam and 15 countries. We have four founder-inspired concepts: Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar.

Financial Highlights

Our financial highlights for the thirteen weeks ended ~~March 27,~~June 26, 2022 ~~(“first quarter of 2022”)~~ include the following:

•U.S. combined and Outback Steakhouse comparable restaurant sales of ~~14.0%~~(0.4)% and ~~9.2%~~(1.1)%, respectively;

•Increase in Total revenues of ~~15.5%~~4.4%, as compared to the ~~first~~second quarter of 2021;

•~~Restaurant-level~~Operating income and restaurant-level operating ~~and operating income~~ margins of ~~17.1%~~7.8% and ~~9.4%~~15.5%, respectively, as compared to ~~18.8%~~11.6% and ~~9.2%~~20.3%, respectively, for the ~~first~~second quarter of 2021;

•Income from operations of ~~$107.3~~$87.7 million, as compared to ~~$91.0~~$124.6 million in the ~~first~~second quarter of 2021;

•Loss on extinguishment of debt of $104.7 million and loss on fair value adjustment of derivatives, net, of $17.7 million in connection with the 2025 Notes Partial Repurchase; and

•Diluted loss per share of $(0.72), as compared to diluted earnings per share of ~~$0.73, as compared to $0.63~~$0.75 for the ~~first~~second quarter of 2021.

Key Financial Performance Indicators

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

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

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

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

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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;

(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;

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~~BLOOMIN’ BRANDS, INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

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

(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; 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 and Comprehensive (Loss) Income. As a result, restaurant-level operating margin is not indicative of our consolidated results of operations and is presented exclusively as a supplement to, and not a substitute for, Net (loss) income or Income from operations. In addition, our presentation of restaurant-level operating margin may not be comparable to similarly titled measures used by other companies in our industry;

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

We believe that our use of non-GAAP financial measures permits investors to assess the operating performance of our business relative to our performance based on U.S. 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 evaluate our operating performance, allocate resources and administer employee incentive 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):	MARCH 27, 2022	MARCH 28, 2021	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	562	567	Company-owned	563	566
Franchised	Franchised	130	131	Franchised	130	131
Total	Total	692	698	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	175	180	Company-owned	174	179
Franchised	Franchised	7	7	Franchised	7	7
Total	Total	182	187	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	64	Company-owned	64	64
Aussie Grill	Aussie Grill			Aussie Grill
Company-owned (1)	Company-owned (1)	7	3	Company-owned (1)	5	4
U.S. total	U.S. total	1,164	1,172	U.S. total	1,160	1,170
International:
International				International
Company-owned	Company-owned			Company-owned
Outback Steakhouse - Brazil (2)	Outback Steakhouse - Brazil (2)	123	110	Outback Steakhouse - Brazil (2)	129	113

Other (1)(3)		33	33
Other (1)(2)(3)				Other (1)(2)(3)	33	33
Franchised	Franchised			Franchised
Outback Steakhouse - South Korea (1)	Outback Steakhouse - South Korea (1)	78	75	Outback Steakhouse - South Korea (1)	77	76
Other (3)	Other (3)	52	57	Other (3)	50	55
International total	International total	286	275	International total	289	277
System-wide total	System-wide total	1,450	1,447	System-wide total	1,449	1,447
System-wide total - Company-owned	System-wide total - Company-owned	1,163	1,156	System-wide total - Company-owned	1,166	1,158
System-wide total - Franchised	System-wide total - Franchised	287	291	System-wide total - Franchised	283	289

____________________

(1)~~Restaurant~~Previously presented restaurant counts as of ~~March 28,~~June 27, 2021 have been adjusted to exclude off-premises only locations included in the table below.

(2)The restaurant counts for Brazil, including Abbraccio restaurants within International Company-owned Other, are reported as of ~~February 28,~~May 31, 2022 and 2021, respectively, to correspond with the balance sheet dates of this subsidiary.

(3)International Company-owned Other included two Aussie Grill locations as of ~~March 27,~~June 26, 2022 and ~~March 28,~~June 27, 2021. International Franchised Other included three Aussie Grill locations as of ~~March 27,~~June 26, 2022 and ~~March 28,~~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):

MARCH 27, 2022

MARCH 28, 2021

Number of kitchens (at end of the period) (1):

JUNE 26, 2022

JUNE 27, 2021

U.S.:

U.S.

Company-owned

International:

International

Company-owned

Franchised - South Korea

System-wide total

____________________

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

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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			THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
			MARCH 27, 2022			MARCH 28, 2021			JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
Revenues	Revenues							Revenues
Restaurant sales	Restaurant sales		98.5	%		99.2	%	Restaurant sales	98.6	%	97.9	%	98.5	%	98.5	%
Franchise and other revenues	Franchise and other revenues		1.5			0.8		Franchise and other revenues	1.4		2.1		1.5		1.5
Total revenues	Total revenues		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)		32.0			29.8		Food and beverage costs (1)	32.9		29.6		32.4		29.7
Labor and other related (1)	Labor and other related (1)		27.8			28.0		Labor and other related (1)	27.8		28.0		27.8		28.0
Other restaurant operating (1)	Other restaurant operating (1)		23.1			23.4		Other restaurant operating (1)	23.8		22.1		23.4		22.7
Depreciation and amortization	Depreciation and amortization		3.7			4.2		Depreciation and amortization	3.7		3.8		3.7		4.0
General and administrative	General and administrative		5.1			5.8		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			0.2		Provision for impaired assets and restaurant closings	*		0.5		0.1		0.4

Total costs and expenses	Total costs and expenses		90.6			90.8		Total costs and expenses	92.2		88.4		91.4		89.6
Income from operations	Income from operations		9.4			9.2		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	(9.6)		(0.2)		(4.7)		(0.1)
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		—			*		Other income, net	—		—		—		*
Interest expense, net	Interest expense, net		(1.2)			(1.5)		Interest expense, net	(1.1)		(1.4)		(1.2)		(1.4)
Income before provision for income taxes			8.2			7.7
(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		1.4			0.6		Provision for income taxes	1.0		2.1		1.2		1.4
Net income			6.8			7.1
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			0.1		Less: net income attributable to noncontrolling interests	0.2		0.2		0.2		0.2
Net income attributable to Bloomin’ Brands			6.6	%		7.0	%
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.

REVENUES

Restaurant sales

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


~~(dollars in millions)~~	~~THIRTEEN WEEKS ENDED~~
~~For the period ended March 28, 2021~~	$	~~979.5~~
~~Change from:~~
~~Comparable restaurant sales~~	~~142.0~~
~~Restaurant openings~~	~~12.4~~
~~Restaurant closures~~	~~(7.2)~~
~~Effect of foreign currency translation~~	~~(3.1)~~

~~For the period ended March 27, 2022~~	$	~~1,123.6~~


(dollars in millions)	THIRTEEN WEEKS ENDED		TWENTY-SIX WEEKS ENDED
For the periods ended June 27, 2021	$	1,055.2	$	2,034.7
Change from:
Comparable restaurant sales (1)	37.8		179.2
Restaurant openings (1)	14.0		26.7
Effect of foreign currency translation	11.7		8.6
Restaurant closures (1)	(9.8)		(16.7)

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

____________________

(1)

~~The increase in Restaurant sales during the thirteen weeks ended March 27, 2022 was primarily due to: (i) higher~~Summation of quarterly changes for restaurant openings, closures and comparable restaurant sales ~~primarily attributable~~will not total to ~~increases in average check per person and (ii)~~annual amounts as the ~~opening~~restaurants that meet the definition of 37each will differ each period based on when the restaurant opened or closed.

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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 42 new restaurants not included in our comparable restaurant sales ~~base.~~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 1721 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			THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
			MARCH 27, 2022			MARCH 28, 2021			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		$	80,552		$	73,433	Outback Steakhouse	$	77,941	$	78,201	$	79,246	$	75,813
Carrabba’s Italian Grill	Carrabba’s Italian Grill		$	67,889		$	60,953	Carrabba’s Italian Grill	$	66,016	$	66,258	$	66,954	$	63,605
Bonefish Grill	Bonefish Grill		$	66,265		$	54,263	Bonefish Grill	$	64,113	$	63,772	$	65,193	$	59,014
Fleming’s Prime Steakhouse & Wine Bar	Fleming’s Prime Steakhouse & Wine Bar		$	117,382		$	80,404	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)		$	53,939		$	43,089	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		7,320			7,383		Outback Steakhouse	7,317		7,362		14,637		14,745
Carrabba’s Italian Grill	Carrabba’s Italian Grill		2,587			2,587		Carrabba’s Italian Grill	2,578		2,587		5,165		5,174
Bonefish Grill	Bonefish Grill		2,285			2,340		Bonefish Grill	2,269		2,337		4,554		4,677
Fleming’s Prime Steakhouse & Wine Bar	Fleming’s Prime Steakhouse & Wine Bar		832			825		Fleming’s Prime Steakhouse & Wine Bar	832		832		1,664		1,657
International	International							International
Outback Steakhouse - Brazil	Outback Steakhouse - Brazil		1,581			1,412		Outback Steakhouse - Brazil	1,644		1,465		3,226		2,877

____________________

(1)Translated at average exchange rates of ~~5.47~~4.89 and ~~5.30~~5.45 for the thirteen weeks ended ~~March 27,~~June 26, 2022 and ~~March 28,~~June 27, 2021, respectively, and 5.15 and 5.36 for the twenty-six weeks ended June 26, 2022 and June 27, 2021, respectively.

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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				THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
			MARCH 27, 2022		MARCH 28, 2021			JUNE 26, 2022		JUNE 27, 2021			JUNE 26, 2022		JUNE 27, 2021

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. (1)	U.S. (1)						U.S. (1)
Outback Steakhouse	Outback Steakhouse		9.2	%	4.1	%	Outback Steakhouse	(1.1)	%	65.8	%		3.9	%	28.8	%
Carrabba’s Italian Grill	Carrabba’s Italian Grill		11.5	%	8.9	%	Carrabba’s Italian Grill	(1.0)	%	84.3	%		5.0	%	38.4	%
Bonefish Grill	Bonefish Grill		21.3	%	(2.9)	%	Bonefish Grill	(1.1)	%	141.2	%		9.2	%	43.5	%
Fleming’s Prime Steakhouse & Wine Bar	Fleming’s Prime Steakhouse & Wine Bar		45.7	%	(2.3)	%	Fleming’s Prime Steakhouse & Wine Bar	6.0	%	182.6	%		23.1	%	55.6	%
Combined U.S.	Combined U.S.		14.0	%	3.3	%	Combined U.S.	(0.4)	%	84.6	%		6.4	%	34.4	%
International	International						International
Outback Steakhouse - Brazil (2)	Outback Steakhouse - Brazil (2)		35.9	%	(21.4)	%	Outback Steakhouse - Brazil (2)	95.7	%	78.8	%		61.1	%	2.7	%

Traffic:	Traffic:						Traffic:
U.S.	U.S.						U.S.
Outback Steakhouse	Outback Steakhouse		(1.0)	%	0.9	%	Outback Steakhouse	(8.7)	%	51.4	%		(5.0)	%	21.9	%
Carrabba’s Italian Grill	Carrabba’s Italian Grill		3.0	%	5.2	%	Carrabba’s Italian Grill	(7.5)	%	57.2	%		(2.5)	%	27.0	%
Bonefish Grill	Bonefish Grill		7.8	%	2.1	%	Bonefish Grill	(8.6)	%	52.4	%		(1.0)	%	22.4	%
Fleming’s Prime Steakhouse & Wine Bar	Fleming’s Prime Steakhouse & Wine Bar		28.8	%	(5.3)	%	Fleming’s Prime Steakhouse & Wine Bar	(2.9)	%	97.0	%		11.1	%	33.5	%
Combined U.S.	Combined U.S.		1.5	%	1.7	%	Combined U.S.	(8.3)	%	53.6	%		(3.5)	%	23.2	%
International	International						International
Outback Steakhouse - Brazil	Outback Steakhouse - Brazil		28.7	%	(14.2)	%	Outback Steakhouse - Brazil	57.8	%	63.0	%		42.0	%	8.9	%

Average check per person (3):	Average check per person (3):						Average check per person (3):
U.S.	U.S.						U.S.
Outback Steakhouse	Outback Steakhouse		10.2	%	3.2	%	Outback Steakhouse	7.6	%	14.4	%		8.9	%	6.9	%
Carrabba’s Italian Grill	Carrabba’s Italian Grill		8.5	%	3.7	%	Carrabba’s Italian Grill	6.5	%	27.1	%		7.5	%	11.4	%
Bonefish Grill	Bonefish Grill		13.5	%	(5.0)	%	Bonefish Grill	7.5	%	88.8	%		10.2	%	21.1	%
Fleming’s Prime Steakhouse & Wine Bar	Fleming’s Prime Steakhouse & Wine Bar		16.9	%	3.0	%	Fleming’s Prime Steakhouse & Wine Bar	8.9	%	85.6	%		12.0	%	22.1	%
Combined U.S.	Combined U.S.		12.5	%	1.6	%	Combined U.S.	7.9	%	31.0	%		9.9	%	11.2	%
International	International						International
Outback Steakhouse - Brazil	Outback Steakhouse - Brazil		7.6	%	(6.4)	%	Outback Steakhouse - Brazil	37.3	%	22.2	%		19.2	%	(4.5)	%

____________________

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

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

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

~~Franchise and other revenues~~

THIRTEEN WEEKS ENDED
(dollars in millions) MARCH 27, 2022 MARCH 28, 2021
Franchise revenues (1) $ 13.4 $ 6.8
Other revenues 3.6 1.2
Franchise and other revenues $ 17.0 $ 8.0

~~____________________~~

~~(1)~~Franchise revenues increased during the thirteen weeks ended March 27, 2022 as compared to the thirteen weeks ended March 28, 2021 primarily due to the impact of COVID-19-related capacity restrictions on 2021 franchise sales.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Franchise and other revenues


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in millions)	JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021
Franchise revenues	$	12.6	$	12.2	$	26.0	$	19.0
Other revenues (1)	3.6		9.9		7.2		11.2
Franchise and other revenues	$	16.2	$	22.1	$	33.2	$	30.2

____________________

(1)During the thirteen and twenty-six weeks ended June 27, 2021, we recognized $6.3 million of other revenues in connection with favorable court rulings in Brazil regarding the calculation methodology and taxable base of PIS and COFINS taxes. The amount recognized as a result of the favorable court rulings primarily represents refundable PIS and COFINS taxes for prior years, including accrued interest.

COSTS AND EXPENSES

Food and beverage costs


		THIRTEEN WEEKS ENDED							THIRTEEN WEEKS ENDED										TWENTY-SIX WEEKS ENDED
(dollars in millions)	(dollars in millions)		MARCH 27, 2022			MARCH 28, 2021				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		$	359.4		$	291.9					Food and beverage costs	$	364.5		$	312.1				$	723.8		$	604.0
% of Restaurant sales	% of Restaurant sales		32.0		%	29.8		%		2.2	%	% 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 ~~March 27,~~June 26, 2022 as compared to the ~~thirteen~~twenty-six weeks ended ~~March 28,~~June 27, 2021 primarily due to ~~3.6%~~4.2% from commodity inflation, partially offset by a decrease as a percentage of Restaurant sales of ~~1.4%~~1.5% from increases in average check per person, primarily driven by an increase in menu pricing.

In aggregate, our menu pricing increases during 2022 are behind our current level of commodity inflation.

Labor and other related expenses


		THIRTEEN WEEKS ENDED							THIRTEEN WEEKS ENDED										TWENTY-SIX WEEKS ENDED
(dollars in millions)	(dollars in millions)		MARCH 27, 2022			MARCH 28, 2021				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		$	312.5		$	274.6					Labor and other related	$	308.8		$	295.0				$	621.3		$	569.6
% of Restaurant sales	% of Restaurant sales		27.8		%	28.0		%		(0.2)	%	% 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 ~~March 27,~~June 26, 2022 as compared to the thirteen weeks ended ~~March 28,~~June 27, 2021 primarily due ~~to 1.3%~~to: (i) 2.3% from ~~increases in average check per person and~~leveraging increased restaurant sales due to the net benefit of lapping the impact of ~~COVID-19. This decrease was~~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 ~~1.2%~~2.9% from higher labor costs primarily due to wage rate inflation.

~~Other restaurant operating expenses~~

THIRTEEN WEEKS ENDED
(dollars in millions) MARCH 27, 2022 MARCH 28, 2021 CHANGE
Other restaurant operating $ 259.1 $ 229.3
% of Restaurant sales 23.1 % 23.4 % (0.3) %

~~Other restaurant operating~~Labor and other related expenses decreased as a percentage of Restaurant sales during the ~~thirteen~~twenty-six weeks ended ~~March 27,~~June 26, 2022 as compared to the ~~thirteen~~twenty-six weeks ended ~~March 28,~~June 27, 2021 primarily due ~~to 2.3%~~to: (i) 2.1% from leveraging increased restaurant sales ~~partially offset by increases as a percentage of Restaurant sales of 1.3% from higher operating expenses including utilities and 0.5% from higher advertising expense.~~

~~Income from operations~~

THIRTEEN WEEKS ENDED
(dollars in millions) MARCH 27, 2022 MARCH 28, 2021 CHANGE
Income from operations $ 107.3 $ 91.0 $ 16.3
% of Total revenues 9.4 % 9.2 % 0.2 %

~~The increase in Income from operations generated during the thirteen weeks ended March 27, 2022 as compared to the thirteen weeks ended March 28, 2021 was primarily~~ due to increases in average check per person and the net benefit of lapping the impact of COVID-19, ~~as well as higher franchise revenues.~~primarily in Brazil, and (ii) 0.4% from the impact of certain cost saving initiatives. These ~~increases~~ decreases

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BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

were partially offset ~~by: (i) commodity and~~by an increase as a percentage of Restaurant sales of 2.5% from higher labor cost primarily due to wage rate ~~inflation, (ii)~~inflation.

Other restaurant operating expenses


	THIRTEEN WEEKS ENDED								TWENTY-SIX WEEKS ENDED
(dollars in millions)	JUNE 26, 2022			JUNE 27, 2021			CHANGE		JUNE 26, 2022			JUNE 27, 2021			CHANGE
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 June 26, 2022 as compared to the thirteen weeks ended June 27, 2021 primarily due to 2.4% from higher operating expenses including utilities, primarily due to inflation, and ~~(iii)~~0.6% from higher advertising ~~expense.~~expense, partially offset by a decrease as a percentage of Restaurant sales of 1.5% from leveraging increased restaurant sales due to the net benefit of lapping the impact of COVID-19, primarily in Brazil, and increases in average check per person.

Other restaurant operating expenses increased as a percentage of Restaurant sales during the twenty-six weeks ended June 26, 2022 as compared to the twenty-six weeks ended June 27, 2021 primarily due to 1.9% from higher operating expenses including utilities, primarily due to inflation, and 0.6% from higher advertising expense, partially offset by a decrease as a percentage of Restaurant sales of 1.9% from leveraging increased restaurant sales due to increases in average check per person and the net benefit of lapping the impact of COVID-19, primarily in Brazil.

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)	THIRTEEN WEEKS ENDED		TWENTY-SIX WEEKS ENDED
For the periods ended June 27, 2021	$	66.5	$	123.7
Change from:

Incentive compensation	(6.1)		(7.6)
Employee stock-based compensation	(4.8)		(4.7)




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

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

Provision for impaired assets and restaurant closings


	THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
(dollars in millions)	JUNE 26, 2022		JUNE 27, 2021		CHANGE		JUNE 26, 2022		JUNE 27, 2021		CHANGE
Provision for impaired assets and restaurant closings	$	0.2	$	5.2	$	(5.0)	$	2.0	$	7.4	$	(5.4)

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

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BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Income from operations


	THIRTEEN WEEKS ENDED									TWENTY-SIX WEEKS ENDED
(dollars in millions)	JUNE 26, 2022			JUNE 27, 2021			CHANGE			JUNE 26, 2022			JUNE 27, 2021			CHANGE
Income from operations	$	87.7		$	124.6		$	(36.9)		$	195.0		$	215.6		$	(20.6)
% of Total revenues	7.8		%	11.6		%	(3.8)		%	8.6		%	10.4		%	(1.8)		%

The decrease in Income from operations generated during the thirteen weeks ended June 26, 2022 as compared to the thirteen weeks ended June 27, 2021 was primarily due to: (i) commodity inflation, (ii) higher operating expenses including utilities, (iii) higher labor costs primarily due to wage rate inflation, (iv) higher advertising expense and (v) the impact of favorable court rulings in Brazil related to value-added taxes recorded in other revenues during 2021. These decreases were partially offset by: (i) increases in average check per person, (ii) the net benefit of lapping the impact of COVID-19 in Brazil, (iii) lower incentive compensation and (iv) the impact of certain cost saving initiatives.

The decrease in Income from operations generated during the twenty-six weeks ended June 26, 2022 as compared to the twenty-six weeks ended June 27, 2021 was primarily due to: (i) commodity inflation, (ii) higher labor costs primarily due to wage rate inflation, (iii) higher operating expenses including utilities and (iv) higher advertising expense. These decreases were partially offset by: (i) increases in average check per person, (ii) the net benefit of lapping the impact of COVID-19 in Brazil and (iii) the impact of certain cost saving initiatives.

Loss on extinguishment and modification of debt and Loss on fair value adjustment of derivatives, net

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

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

Provision for income taxes

THIRTEEN WEEKS ENDED
MARCH 27, 2022 MARCH 28, 2021 CHANGE
Effective income tax rate 17.0 % 8.6 % 8.4 %


	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	%

associated with the ~~amount and mix of forecasted pre-tax book income across our U.S. and international subsidiaries.~~2025 Notes Partial Repurchase recorded during the twenty-six weeks ended June 26, 2022.

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BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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 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. 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 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.

Refer to Note 1516 - Segment Reporting of the Notes to Consolidated Financial Statements for reconciliations of segment income from operations to the consolidated operating results.

Restaurant-level operating margin is widely regarded in the industry as a useful 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						TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 26, 2022			JUNE 27, 2021			JUNE 26, 2022			JUNE 27, 2021
Revenues
Restaurant sales	$	985,927		$	990,293		$	2,009,562		$	1,890,352
Franchise and other revenues	12,700			12,765			25,472			17,624
Total revenues	$	998,627		$	1,003,058		$	2,035,034		$	1,907,976








Restaurant-level operating margin	15.1		%	21.7		%	16.3		%	20.5		%
Income from operations	$	104,620		$	165,297		$	236,846		$	287,032
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

~~U.S. Segment~~

THIRTEEN WEEKS ENDED
(dollars in thousands) MARCH 27, 2022 MARCH 28, 2021
Revenues
Restaurant sales $ 1,023,635 $ 900,059
Franchise and other revenues 12,772 4,859
Total revenues $ 1,036,407 $ 904,918
Restaurant-level operating margin 17.4 % 19.2 %
Income from operations $ 132,226 $ 121,735
Operating income margin 12.8 % 13.5 %

Restaurant sales

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


~~(dollars in millions)~~	~~THIRTEEN WEEKS ENDED~~
~~For the period ended March 28, 2021~~	$	~~900.1~~
~~Change from:~~
~~Comparable restaurant sales~~	~~123.8~~
~~Restaurant openings~~	~~7.0~~

~~Restaurant closures~~	~~(7.2)~~
~~For the period ended March 27, 2022~~	$	~~1,023.7~~


(dollars in millions)	THIRTEEN WEEKS ENDED		TWENTY-SIX WEEKS ENDED (1)
For the periods ended June 27, 2021	$	990.3	$	1,890.4
Change from:
Restaurant closures	(9.8)		(16.7)
Comparable restaurant sales	(1.3)		122.2

Restaurant openings	6.7		13.7
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 ~~March 27,~~June 26, 2022 was primarily due to: (i) higher comparable restaurant sales, primarily attributable to increases in average check per person and (ii) the opening of 1315 new restaurants not included in our comparable restaurant sales base. The increase in U.S. Restaurant sales was partially offset by the closure of 1722 restaurants since December 27, 2020.

Income from operations

The ~~increase~~decrease in U.S. Income from operations generated during the thirteen and twenty-six weeks ended ~~March 27,~~June 26, 2022 as compared to the thirteen and twenty-six weeks ended ~~March 28,~~June 27, 2021 was primarily due to: (i) commodity inflation, (ii) higher labor cost primarily due to wage rate inflation, (iii) higher operating expenses including utilities and (iv) higher advertising expense. These decreases were partially offset by: (i) increases in average check per person and ~~the net benefit of lapping~~(ii) the impact of COVID-19, as well as higher franchise revenues. These increases were partially offset by: (i) commodity and wage rate inflation, (ii) higher operating expenses including utilities and (iii) higher advertising expense.certain cost saving initiatives.

International Segment


		THIRTEEN WEEKS ENDED				THIRTEEN WEEKS ENDED								TWENTY-SIX WEEKS ENDED
(dollars in thousands)	(dollars in thousands)		MARCH 27, 2022				MARCH 28, 2021			(dollars in thousands)	JUNE 26, 2022			JUNE 27, 2021			JUNE 26, 2022			JUNE 27, 2021
Revenues	Revenues									Revenues
Restaurant sales	Restaurant sales		$	99,940			$	79,392		Restaurant sales	$	122,991		$	64,934		$	222,931		$	144,326
Franchise and other revenues	Franchise and other revenues		4,188				3,163			Franchise and other revenues	3,544			9,374			7,732			12,537
Total revenues	Total revenues		$	104,128			$	82,555		Total revenues	$	126,535		$	74,308		$	230,663		$	156,863

Restaurant-level operating margin	Restaurant-level operating margin		16.9		%		14.4		%	Restaurant-level operating margin	17.8		%	3.2		%	17.4		%	9.3		%
Income from operations	Income from operations		$	8,884			$	3,537		Income from operations	$	14,126		$	2,470		$	23,010		$	6,007
Operating income margin	Operating income margin		8.5		%		4.3		%	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 ~~period~~periods indicated:

~~(dollars in millions)~~


(dollars in millions)	THIRTEEN WEEKS ENDED		TWENTY-SIX WEEKS ENDED
For the periods ended June 27, 2021	$	64.9	$	144.3
Change from:
Comparable restaurant sales (1)	39.1		57.0
Effect of foreign currency translation	11.7		8.6
Restaurant openings (1)	7.3		13.0



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.

~~THIRTEEN WEEKS ENDED~~

~~For the period ended March 28, 2021~~

~~79.4~~

~~Change from:~~

~~Comparable restaurant sales~~

~~18.2~~

~~Restaurant openings~~

~~5.4~~

~~Effect of foreign currency translation~~

~~(3.1)~~

~~For the period ended March 27, 2022~~

~~99.9~~

The increase in international Restaurant sales during the thirteen weeks ended ~~March 27,~~June 26, 2022 was primarily due toto: (i) higher comparable restaurant sales in Brazil, (ii) the effect of foreign currency translation of the Brazilian Real relative to the U.S. dollar and (iii) the opening of 2428 new restaurants not included in our comparable restaurant sales base.

The increase in international Restaurant sales during the twenty-six weeks ended June 26, 2022 was primarily due to: (i) higher comparable restaurant sales in Brazil, (ii) the opening of 30 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.

Income from operations

The increase in international Income from operations generated during the thirteen and twenty-six weeks ended ~~March 27,~~June 26, 2022 as compared to the thirteen and twenty-six weeks ended ~~March 28,~~June 27, 2021 was primarily due to an increase in ~~restaurant~~restaurant-level operating margin, which ~~includes~~includes: (i) the recovery of in-restaurant dining ~~from~~in Brazil and the net impact of the COVID-19 pandemic during 2021, and (ii) increases in average check per person, partially offset by commodity inflation. The increase from international restaurant-level operating margin was partially offset by the impact of favorable court rulings in Brazil related to value-added taxes recorded in other revenues during 2021.

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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~~restaurant-level operating income and the corresponding margins for the periods indicated:


Consolidated	Consolidated	THIRTEEN WEEKS ENDED				Consolidated	THIRTEEN WEEKS ENDED								TWENTY-SIX WEEKS ENDED
(dollars in thousands)	(dollars in thousands)		MARCH 27, 2022					MARCH 28, 2021			(dollars in thousands)	JUNE 26, 2022			JUNE 27, 2021			JUNE 26, 2022			JUNE 27, 2021

Income from operations	Income from operations		$	107,256				$	90,998		Income from operations	$	87,719		$	124,637		$	194,975		$	215,635
Operating income margin	Operating income margin		9.4		%			9.2		%	Operating income margin	7.8		%	11.6		%	8.6		%	10.4		%
Less:	Less:										Less:
Franchise and other revenues	Franchise and other revenues		16,960					8,022			Franchise and other revenues	16,244			22,139			33,204			30,161
Plus:	Plus:										Plus:
Depreciation and amortization	Depreciation and amortization		41,775					41,226			Depreciation and amortization	41,257			40,539			83,032			81,765
General and administrative	General and administrative		58,674					57,248			General and administrative	59,246			66,462			117,920			123,710
Provision for impaired assets and restaurant closings	Provision for impaired assets and restaurant closings		1,839					2,200			Provision for impaired assets and restaurant closings	193			5,177			2,032			7,377
Restaurant-level operating income	Restaurant-level operating income		$	192,584				$	183,650		Restaurant-level operating income	$	172,171		$	214,676		$	364,755		$	398,326
Restaurant-level operating margin	Restaurant-level operating margin		17.1		%			18.8		%	Restaurant-level operating margin	15.5		%	20.3		%	16.3		%	19.6		%

U.S.	U.S.	THIRTEEN WEEKS ENDED				U.S.	THIRTEEN WEEKS ENDED								TWENTY-SIX WEEKS ENDED
(dollars in thousands)	(dollars in thousands)		MARCH 27, 2022					MARCH 28, 2021			(dollars in thousands)	JUNE 26, 2022			JUNE 27, 2021			JUNE 26, 2022			JUNE 27, 2021

Income from operations	Income from operations		$	132,226				$	121,735		Income from operations	$	104,620		$	165,297		$	236,846		$	287,032
Operating income margin	Operating income margin		12.8		%			13.5		%	Operating income margin	10.5		%	16.5		%	11.6		%	15.0		%
Less:	Less:										Less:
Franchise and other revenues	Franchise and other revenues		12,772					4,859			Franchise and other revenues	12,700			12,765			25,472			17,624
Plus:	Plus:										Plus:
Depreciation and amortization	Depreciation and amortization		34,758					33,645			Depreciation and amortization	33,545			33,579			68,303			67,224
General and administrative	General and administrative		23,445					21,092			General and administrative	23,648			22,953			47,093			44,045
Provision for impaired assets and restaurant closings	Provision for impaired assets and restaurant closings		58					1,463			Provision for impaired assets and restaurant closings	191			5,676			249			7,139
Restaurant-level operating income	Restaurant-level operating income		$	177,715				$	173,076		Restaurant-level operating income	$	149,304		$	214,740		$	327,019		$	387,816
Restaurant-level operating margin	Restaurant-level operating margin		17.4		%			19.2		%	Restaurant-level operating margin	15.1		%	21.7		%	16.3		%	20.5		%

International	International	THIRTEEN WEEKS ENDED				International	THIRTEEN WEEKS ENDED								TWENTY-SIX WEEKS ENDED
(dollars in thousands)	(dollars in thousands)		MARCH 27, 2022					MARCH 28, 2021			(dollars in thousands)	JUNE 26, 2022			JUNE 27, 2021			JUNE 26, 2022			JUNE 27, 2021

Income from operations	Income from operations		$	8,884				$	3,537		Income from operations	$	14,126		$	2,470		$	23,010		$	6,007
Operating income margin	Operating income margin		8.5		%			4.3		%	Operating income margin	11.2		%	3.3		%	10.0		%	3.8		%
Less:	Less:										Less:
Franchise and other revenues	Franchise and other revenues		4,188					3,163			Franchise and other revenues	3,544			9,374			7,732			12,537
Plus:	Plus:										Plus:
Depreciation and amortization	Depreciation and amortization		5,536					5,720			Depreciation and amortization	6,020			5,565			11,556			11,285
General and administrative	General and administrative		4,928					4,605			General and administrative	5,331			4,116			10,259			8,721
Provision for impaired assets and restaurant closings	Provision for impaired assets and restaurant closings		1,775					707			Provision for impaired assets and restaurant closings	—			(708)			1,775			(1)
Restaurant-level operating income	Restaurant-level operating income		$	16,935				$	11,406		Restaurant-level operating income	$	21,933		$	2,069		$	38,868		$	13,475
Restaurant-level operating margin	Restaurant-level operating margin		16.9		%			14.4		%	Restaurant-level operating margin	17.8		%	3.2		%	17.4		%	9.3		%

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BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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


		THIRTEEN WEEKS ENDED		THIRTEEN WEEKS ENDED
		MARCH 27, 2022			MARCH 28, 2021		JUNE 26, 2022				JUNE 27, 2021

Restaurant sales	Restaurant sales	100.0	%		100.0	%		Restaurant sales	100.0	%		100.0	%

Food and beverage costs	Food and beverage costs	32.0	%		29.8	%		Food and beverage costs	32.9	%		29.6	%
Labor and other related	Labor and other related	27.8	%		28.0	%		Labor and other related	27.8	%		28.0	%
Other restaurant operating	Other restaurant operating	23.1	%		23.4	%		Other restaurant operating	23.8	%		22.1	%

Restaurant-level operating margin	Restaurant-level operating margin	17.1	%		18.8	%		Restaurant-level operating margin	15.5	%		20.3	%

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

Restaurant sales								Restaurant sales	100.0	%		100.0	%

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

Restaurant-level operating margin								Restaurant-level operating margin	16.3	%		19.6	%

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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			THIRTEEN WEEKS ENDED							TWENTY-SIX WEEKS ENDED
(in thousands, except per share data)	(in thousands, except per share data)		MARCH 27, 2022			MARCH 28, 2021		(in thousands, except per share data)	JUNE 26, 2022			JUNE 27, 2021			JUNE 26, 2022			JUNE 27, 2021
Income from operations								Income from operations	$	87,719		$	124,637		$	194,975		$	215,635
Operating income margin								Operating income margin	7.8		%	11.6		%	8.6		%	10.4		%
Adjustments:								Adjustments:

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

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

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

Diluted net (loss) income attributable to Bloomin’ Brands								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 ~~(1)~~(2)								Convertible senior notes if-converted method interest adjustment, net of tax ~~(1)~~(2)	—			—			—			691
Net (loss) income attributable to Bloomin’ Brands								Net (loss) income attributable to Bloomin’ Brands	(63,635)			82,545			11,876			151,407
Adjustments:								Adjustments:
Income from operations adjustments								Income from operations adjustments	—			(6,337)			—			(6,337)
Loss on extinguishment and modification of debt (3)								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)								Loss on fair value adjustment of derivatives, net (4)	17,685			—			17,685			—
Total adjustments, before income taxes								Total adjustments, before income taxes	125,315			(4,264)			125,315			(4,264)
Adjustment to provision for income taxes (5)								Adjustment to provision for income taxes (5)	1,322			1,243			1,322			1,243

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

Diluted net income attributable to Bloomin’ Brands			$	75,511		$	70,243
Convertible senior notes if-converted method interest adjustment, net of tax ~~(1)~~(2)			—			1,381
Net income attributable to Bloomin’ Brands			$	75,511		$	68,862

Diluted earnings per share			$	0.73		$	0.63
Diluted (loss) earnings per share (6)								Diluted (loss) earnings per share (6)	$	(0.72)		$	0.75		$	0.12		$	1.38
Adjusted diluted earnings per share ~~(2)~~(7)	Adjusted diluted earnings per share ~~(2)~~(7)		$	0.80		$	0.72	Adjusted diluted earnings per share ~~(2)~~(7)	$	0.68		$	0.81		$	1.48		$	1.53

Diluted weighted average common shares outstanding(6)	Diluted weighted average common shares outstanding(6)		103,454			110,641		Diluted weighted average common shares outstanding(6)	88,898			109,805			102,045			110,223
Adjusted diluted weighted average common shares outstanding ~~(2)~~(7)	Adjusted diluted weighted average common shares outstanding ~~(2)~~(7)		94,722			95,448		Adjusted diluted weighted average common shares outstanding ~~(2)~~(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.

~~(2)~~(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 ~~March 27, 2022 and March 28, 2021, adjusted~~June 26, 2022.

(7)Adjusted diluted weighted average common shares outstanding was calculated excluding the dilutive effect of ~~8,732~~7,774 and ~~9,653~~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 ~~thirteen~~twenty-six weeks ended ~~March 28,~~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.

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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 2 - Revenue Recognition of the Notes to Consolidated Financial Statements.

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~~BLOOMIN’ BRANDS, INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

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

The following table provides a summary of sales of franchised restaurants for the periods indicated, which are not included in our consolidated financial results. Franchise sales within this table do not represent our sales and are presented only as an indicator of changes in the restaurant system, which management believes is important information regarding the health of our restaurant concepts and in determining our royalties and/or service fees.


		THIRTEEN WEEKS ENDED					THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in millions)	(dollars in millions)		MARCH 27, 2022		MARCH 28, 2021			(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		$	129	$	92		Outback Steakhouse	$	129	$	119	$	258	$	211
Carrabba’s Italian Grill	Carrabba’s Italian Grill		12		10			Carrabba’s Italian Grill	13		12		25		22
Bonefish Grill	Bonefish Grill		3		2			Bonefish Grill	3		3		6		5
U.S. total	U.S. total		144		104			U.S. total	145		134		289		238
International	International							International
Outback Steakhouse - South Korea	Outback Steakhouse - South Korea		78		74			Outback Steakhouse - South Korea	65		72		143		146
Other	Other		34		24			Other	28		27		62		51
International total	International total		112		98			International total	93		99		205		197
Total franchise sales (1)	Total franchise sales (1)		$	256	$	202		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 (Loss) Income.

Liquidity and Capital Resources

Cash and Cash Equivalents

As of ~~March 27,~~June 26, 2022, we had ~~$97.8~~$95.3 million in cash and cash equivalents, of which ~~$30.1~~$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 ~~March 27,~~June 26, 2022, we had aggregate accumulated foreign earnings of approximately ~~$30.5~~$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 not considered indefinitely reinvested in our foreign subsidiaries.

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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									TOTAL CREDIT FACILITIES				SENIOR SECURED CREDIT FACILITY									TOTAL CREDIT FACILITIES
(dollars in thousands)	(dollars in thousands)	TERM LOAN A			REVOLVING FACILITY			2025 NOTES						2029 NOTES				(dollars in thousands)	TERM LOAN A		REVOLVING FACILITY						TOTAL CREDIT FACILITIES			2029 NOTES
Balance as of December 26, 2021	Balance as of December 26, 2021	$	195,000		$	80,000		$	230,000		$	300,000				$	805,000	Balance as of December 26, 2021	$	195,000	$	80,000		$	230,000					$	805,000
2022 new debt	2022 new debt	—			90,000			—			—					90,000		2022 new debt	—		624,500			—						—				624,500
2022 payments	2022 payments	(2,500)			(160,000)			—			—					(162,500)		2022 payments	(195,000)		(304,500)			(125,000)			—					(624,500)
Balance as of March 27, 2022		$	192,500		$	10,000		$	230,000		$	300,000				$	732,500
Balance as of June 26, 2022																		Balance as of June 26, 2022	$	—	$	400,000		$	105,000		$	300,000				$	805,000

Interest rates, as of March 27, 2022 (1)		1.76		%	4.00		%	5.00		%	5.13		%
Interest rates, as of June 26, 2022 (1)																		Interest rates, as of June 26, 2022 (1)			2.74		%	5.00		%	5.13		%
Principal maturity date	Principal maturity date	April 2026			April 2026			May 2025			April 2029							Principal maturity date			April 2026			May 2025			April 2029

____________________

(1)Interest rate for ~~Term loan A~~revolving credit facility represents the weighted average interest ~~rate. Interest~~ rate ~~for the revolving credit facility represents the base rate option elected in anticipation~~as of ~~impending repayment.~~June 26, 2022.

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~~BLOOMIN’ BRANDS, INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

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

As of ~~March 27,~~June 26, 2022, we had ~~$769.3~~$580.0 million in available unused borrowing capacity under our revolving credit facility, net of letters of credit of ~~$20.7~~$20.0 million.

Our 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 revolving credit facility and cause an acceleration of the amounts due under the credit facilities. See Note 13 - ~~Long-term Debt, Net~~ ~~in our Annual Report on Form 10-K for the year ended December 26, 2021 for further information.~~

~~As of March 27, 2022 and December 26, 2021, we were in compliance with our debt covenants. We believe that we will remain in compliance with our debt covenants during the next 12 months.~~

Credit Agreement Amendment - On April 26, 2022, we and OSI entered into the Amended Credit Agreement, which included an increase of our existing revolving credit facility from $800.0 million to $1.0 billion and a transition from LIBOR to SOFR as the benchmark rate for purposes of calculating interest under the Senior Secured Credit Facility. At closing, an incremental $192.5 million was drawn on the revolving credit facility to fully repay the outstanding balance of Term loan A. Our total indebtedness remained unchanged as a result of the Amended Credit Agreement. The transition to SOFR did not materially impact the interest rate applied to our borrowings.

See Note 67 - Long-term Debt, Net of the Notes to Consolidated Financial Statements for additional details regarding the Amended Credit Agreement.

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 revolving credit facility and cause an acceleration of the amounts due under the credit facilities. See Note 13 - Long-term Debt, Net in our Annual Report on Form 10-K for the year ended December 26, 2021 for further information.

As of June 26, 2022 and December 26, 2021, we were in compliance with our debt covenants. We believe that we will remain in compliance with our debt covenants during the next 12 months.

2025 Notes - On May 25, 2022, we and the Noteholders entered into the Exchange Agreements in which the Noteholders agreed to exchange $125.0 million in aggregate principal amount of our outstanding 2025 Notes for $196.9 million in cash, plus accrued interest, and approximately 2.3 million shares of our common stock.

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

See Note 8 - Convertible Senior Notes of the Notes to Consolidated Financial Statements for additional details regarding the 2025 Notes Partial Repurchase and related Note Hedge Early Termination Agreements and Warrant Early Termination Agreements.

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BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Use of Cash

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

We believe that our expected liquidity sources are adequate to fund debt service requirements, lease obligations, capital expenditures and working capital obligations during the 12 months following this filing. However, our ability to continue to meet these requirements and obligations will depend on, among other things, our ability to achieve anticipated levels of revenue and cash flow and our ability to manage costs and working capital successfully.

Capital Expenditures - We estimate that our capital expenditures will total approximately ~~$225~~$200 million to ~~$240~~$210 million in 2022. The amount of actual capital expenditures may be affected by general economic, financial, competitive, legislative and regulatory factors, among other things, including raw material constraints.

Dividends and Share Repurchases - In ~~April~~July 2022, our Board declared a quarterly cash dividend of $0.14 per share, payable on ~~May 25,~~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 our debt agreements.

On February 8, 2022, our Board approved the 2022 Share Repurchase Program under which we are authorized to repurchase up to $125.0 million of our outstanding common stock. The 2022 Share Repurchase Program will expire on August 9, 2023. As of ~~March 27,~~June 26, 2022, we had ~~$113.3~~$77.5 million remaining available for repurchase under the 2022 Share Repurchase Program.

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~~BLOOMIN’ BRANDS, INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

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

Following is a summary of dividends and share repurchases from fiscal year 2015 through ~~March 27,~~June 26, 2022:


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

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

Total (1)	Total (1)	$	190,784	$	985,283	$	1,176,067	Total (1)	$	203,202	$	1,021,032	$	1,224,234

________________

(1)Subsequent to ~~March 27,~~June 26, 2022, we repurchased ~~$15.6~~$14.9 million of our common stock under a Rule 10b5-1 ~~plan.~~plan through July 28, 2022.

Deferred Compensation Programs - The deferred compensation obligation due to managing and chef partners was ~~$11.0~~$7.5 million and $15.5 million as of ~~March 27,~~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 chef partners’ deferred compensation was fully funded as of ~~March 27,~~June 26, 2022.

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BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Summary of Cash Flows and Financial Condition

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


		THIRTEEN WEEKS ENDED					TWENTY-SIX WEEKS ENDED
(dollars in thousands)	(dollars in thousands)	MARCH 27, 2022		MARCH 28, 2021		(dollars in thousands)	JUNE 26, 2022		JUNE 27, 2021
Net cash provided by operating activities	Net cash provided by operating activities	$	147,135	$	141,026	Net cash provided by operating activities	$	218,818	$	283,182
Net cash used in investing activities	Net cash used in investing activities	(39,150)		(16,618)		Net cash used in investing activities	(75,738)		(42,625)
Net cash used in financing activities	Net cash used in financing activities	(101,111)		(96,912)		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	1,965		(1,246)		Effect of exchange rate changes on cash and cash equivalents	4,232		128

Net increase in cash, cash equivalents and restricted cash		$	8,839	$	26,250
Net increase (decrease) in cash, cash equivalents and restricted cash						Net increase (decrease) in cash, cash equivalents and restricted cash	$	6,390	$	(7,333)

Operating activities - The ~~increase~~decrease in net cash provided by operating activities during the ~~thirteen~~twenty-six weeks ended ~~March 27,~~June 26, 2022 as compared to the ~~thirteen~~twenty-six weeks ended ~~March 28,~~June 27, 2021 was primarily due to the timing of ~~collections of gift card receivables~~operational payments and ~~a decrease in cash paid for interest, partially offset by~~receipts and increased employee compensation payments.

Investing activities - The increase in net cash used in investing activities during the ~~thirteen~~twenty-six weeks ended ~~March 27,~~June 26, 2022 as compared to the ~~thirteen~~twenty-six weeks ended ~~March 28,~~June 27, 2021 was primarily due to higher capital expenditures.

Financing activities - The ~~increase~~decrease in net cash used in financing activities during the ~~thirteen~~twenty-six weeks ended ~~March 27,~~June 26, 2022 as compared to the ~~thirteen~~twenty-six weeks ended ~~March 28,~~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 and the repurchase of common stock during 2022. These increases were partially offset by lower net repayments on our revolving credit facility.~~stock.

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~~BLOOMIN’ BRANDS, INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

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

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


(dollars in thousands)	(dollars in thousands)	MARCH 27, 2022		DECEMBER 26, 2021		(dollars in thousands)	JUNE 26, 2022		DECEMBER 26, 2021
Current assets	Current assets	$	271,287	$	352,792	Current assets	$	292,926	$	352,792
Current liabilities	Current liabilities	935,648		984,625		Current liabilities	909,850		984,625
Working capital (deficit)	Working capital (deficit)	$	(664,361)	$	(631,833)	Working capital (deficit)	$	(616,924)	$	(631,833)

Working capital (deficit) includes: (i) Unearned revenue primarily from unredeemed gift cards of ~~$325.3~~$309.9 million and $398.8 million as of ~~March 27,~~June 26, 2022 and December 26, 2021, respectively, and (ii) current operating lease liabilities of ~~$177.6~~$178.8 million and $177.0 million as of ~~March 27,~~June 26, 2022 and December 26, 2021, respectively, with the corresponding operating right-of-use assets recorded as non-current on our Consolidated Balance Sheets. 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.

Recently Issued Financial Accounting Standards

For a description of recently issued Financial Accounting Standards that we adopted during the ~~thirteen~~twenty-six weeks ended ~~March 27,~~June 26, 2022 and, that are applicable to us and likely to have material effect on our consolidated financial statements, but have not yet been adopted, see Note 1 - Description of the Business and Basis of Presentation of the Notes to Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

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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 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 26, 2021 for further information regarding market risk.

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 ~~March 27,~~June 26, 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 ~~March 27,~~June 26, 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 1415 - 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 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 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 ~~March 27,~~June 26, 2022 that were not registered under the Securities ~~Act of 1933.~~Act.

The following table provides information regarding our purchases of common stock during the thirteen weeks ended ~~March 27,~~June 26, 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)
December 27, 2021 through January 23, 2022 — $ — — $ —
January 24, 2022 through February 20, 2022 — $ — — $ 125,000,000
February 21, 2022 through March 27, 2022 550,517 $ 21.26 550,517 $ 113,298,678
Total 550,517 550,517


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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BLOOMIN’ BRANDS, INC.

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*

~~Second Amendment to Officer Employment Agreement, dated as of February 21, 2022, between Bloomin~~’ ~~Brands, Inc. and David J. Deno~~

~~December 26, 2021 Form 10-K, Exhibit 10.48~~

~~10.2~~10.1

First Amendment to the Second Amended and Restated Credit Agreement and Incremental Amendment , dated April 26, 2022, by and among Bloomin’ Brands, Inc., OSI Restaurant Partners, LLC, the guarantors party thereto, the lenders party thereto, and Wells Fargo Bank, National Association, as administrative Agent

April 29, 2022, Form 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

* Management contract or compensatory plan or arrangement required to be filed as an exhibit.

(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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BLOOMIN’ BRANDS, INC.

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:	~~May 3,~~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)

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