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 June ~~26, 2022~~25, 2023
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 July ~~28, 2022, 89,297,078~~27, 2023, 87,097,283 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 June ~~26, 2022~~25, 2023

(Unaudited)

TABLE OF CONTENTS


	PART I — FINANCIAL INFORMATION	Page No.

Item 1.	Financial Statements (Unaudited)	3

	Consolidated Financial Statements:

	Consolidated Balance Sheets — June 2 6 25 , ~~2022~~2023 and December ~~26, 2021~~25, 2022	3

	Consolidated Statements of Operations and Comprehensive Income (Loss) ~~Income~~ — For the Thirteen and ~~Twenty-~~Twenty-Six ~~Six~~Weeks Ended June 2 6 25 , ~~202~~2 2023 and June 2 7 26 , 2 ~~021~~2022	4

	Consolidated Statements of Changes in Stockholders’ Equity — For the Thirteen and ~~Twenty-Six~~Twenty-Six Weeks Ended June 2 6 25 , ~~202~~2 2023 and June 2 7 26 , 2 ~~021~~2022	5

	Condensed Consolidated Statements of Cash Flows — For the T ~~wenty-Six~~Twenty-Six Weeks Ended JuJune 25 ne, 2023 and 2 6June 26 , 2022 ~~and~~ ~~June~~ 2 7 ~~, 2021~~	7

	Notes to Consolidated Financial Statements	98

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2721

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4841

Item 4.	Controls and Procedures	4841

	PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	4942

Item 1A.	Risk Factors	4942

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4942



Item 6.	Exhibits	5043

	Signature	5144

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)~~DATA)


							JUNE 25, 2023		DECEMBER 25, 2022
		JUNE 26, 2022		DECEMBER 26, 2021			(UNAUDITED)
ASSETS	ASSETS					ASSETS
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	95,346	$	87,585	Cash and cash equivalents	$	88,794	$	84,735
Restricted cash and cash equivalents		101		1,472

Inventories	Inventories	80,482		79,112		Inventories	62,327		78,124

Other current assets, net	Other current assets, net	116,997		184,623		Other current assets, net	96,770		183,718
Total current assets	Total current assets	292,926		352,792		Total current assets	247,891		346,577

Property, fixtures and equipment, net	Property, fixtures and equipment, net	852,155		842,012		Property, fixtures and equipment, net	975,986		914,142
Operating lease right-of-use assets	Operating lease right-of-use assets	1,122,317		1,130,873		Operating lease right-of-use assets	1,089,218		1,103,083
Goodwill	Goodwill	278,780		268,444		Goodwill	274,629		273,032
Intangible assets, net	Intangible assets, net	452,654		453,412		Intangible assets, net	445,630		448,326
Deferred income tax assets, net	Deferred income tax assets, net	158,110		168,068		Deferred income tax assets, net	152,387		153,118
Other assets, net	Other assets, net	73,053		78,670		Other assets, net	87,391		82,147
Total assets	Total assets	$	3,229,995	$	3,294,271	Total assets	$	3,273,132	$	3,320,425

LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities	Current liabilities					Current liabilities
Accounts payable	Accounts payable	$	185,645	$	167,978	Accounts payable	$	202,207	$	183,715
Current operating lease liabilities						Current operating lease liabilities	185,362		183,510
Accrued and other current liabilities	Accrued and other current liabilities	412,831		406,894		Accrued and other current liabilities	211,481		217,427
Unearned revenue	Unearned revenue	309,863		398,795		Unearned revenue	312,556		394,215

Current portion of long-term debt		1,511		10,958

Total current liabilities	Total current liabilities	909,850		984,625		Total current liabilities	911,606		978,867

Non-current operating lease liabilities	Non-current operating lease liabilities	1,168,692		1,179,447		Non-current operating lease liabilities	1,132,015		1,148,607

Long-term debt, net	Long-term debt, net	800,222		782,107		Long-term debt, net	763,998		828,507
Other long-term liabilities, net	Other long-term liabilities, net	88,490		125,242		Other long-term liabilities, net	93,645		90,535
Total liabilities	Total liabilities	2,967,254		3,071,421		Total liabilities	2,901,264		3,046,516
Commitments and contingencies (Note 15)		0		0
Commitments and contingencies (Note 13)						Commitments and contingencies (Note 13)

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 June 26, 2022 and December 26, 2021		—		—
Common stock, $0.01 par value, 475,000,000 shares authorized; 90,151,164 and 89,252,823 shares issued and outstanding as of June 26, 2022 and December 26, 2021, respectively		902		893
Preferred stock, $0.01 par value, 25,000,000 shares authorized; no shares issued and outstanding as of June 25, 2023 and December 25, 2022						Preferred stock, $0.01 par value, 25,000,000 shares authorized; no shares issued and outstanding as of June 25, 2023 and December 25, 2022	—		—
Common stock, $0.01 par value, 475,000,000 shares authorized; 87,339,455 and 87,696,200 shares issued and outstanding as of June 25, 2023 and December 25, 2022, respectively						Common stock, $0.01 par value, 475,000,000 shares authorized; 87,339,455 and 87,696,200 shares issued and outstanding as of June 25, 2023 and December 25, 2022, respectively	873		877
Additional paid-in capital	Additional paid-in capital	1,169,697		1,119,728		Additional paid-in capital	1,132,732		1,161,912
Accumulated deficit	Accumulated deficit	(733,723)		(698,171)		Accumulated deficit	(582,738)		(706,109)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(176,054)		(205,989)		Accumulated other comprehensive loss	(181,943)		(185,311)
Total Bloomin’ Brands stockholders’ equity	Total Bloomin’ Brands stockholders’ equity	260,822		216,461		Total Bloomin’ Brands stockholders’ equity	368,924		271,369
Noncontrolling interests	Noncontrolling interests	1,919		6,389		Noncontrolling interests	2,944		2,540
Total stockholders’ equity	Total stockholders’ equity	262,741		222,850		Total stockholders’ equity	371,868		273,909
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	3,229,995	$	3,294,271	Total liabilities and stockholders’ equity	$	3,273,132	$	3,320,425

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

Table of Contents

BLOOMIN’ BRANDS, INC.

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

(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)


		THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED					THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
		JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021			JUNE 25, 2023		JUNE 26, 2022		JUNE 25, 2023		JUNE 26, 2022
Revenues	Revenues									Revenues
Restaurant sales	Restaurant sales	$	1,108,918	$	1,055,227	$	2,232,493	$	2,034,678	Restaurant sales	$	1,137,330	$	1,108,918	$	2,365,564	$	2,232,493
Franchise and other revenues	Franchise and other revenues	16,244		22,139		33,204		30,161		Franchise and other revenues	15,364		16,244		31,876		33,204
Total revenues	Total revenues	1,125,162		1,077,366		2,265,697		2,064,839		Total revenues	1,152,694		1,125,162		2,397,440		2,265,697
Costs and expenses	Costs and expenses									Costs and expenses
Food and beverage costs		364,459		312,102		723,829		603,972
Food and beverage										Food and beverage	351,226		364,459		735,440		723,829
Labor and other related	Labor and other related	308,759		294,999		621,270		569,637		Labor and other related	325,934		308,759		667,476		621,270
Other restaurant operating	Other restaurant operating	263,529		233,450		522,639		462,743		Other restaurant operating	273,338		263,529		556,265		522,639
Depreciation and amortization	Depreciation and amortization	41,257		40,539		83,032		81,765		Depreciation and amortization	47,565		41,257		93,867		83,032
General and administrative	General and administrative	59,246		66,462		117,920		123,710		General and administrative	63,358		59,246		129,162		117,920
Provision for impaired assets and restaurant closings	Provision for impaired assets and restaurant closings	193		5,177		2,032		7,377		Provision for impaired assets and restaurant closings	1,827		193		5,151		2,032
Total costs and expenses	Total costs and expenses	1,037,443		952,729		2,070,722		1,849,204		Total costs and expenses	1,063,248		1,037,443		2,187,361		2,070,722
Income from operations	Income from operations	87,719		124,637		194,975		215,635		Income from operations	89,446		87,719		210,079		194,975
Loss on extinguishment and modification of debt	Loss on extinguishment and modification of debt	(107,630)		(2,073)		(107,630)		(2,073)		Loss on extinguishment and modification of debt	—		(107,630)		—		(107,630)
Loss on fair value adjustment of derivatives, net	Loss on fair value adjustment of derivatives, net	(17,685)		—		(17,685)		—		Loss on fair value adjustment of derivatives, net	—		(17,685)		—		(17,685)
Other income, net		—		—		—		21

Interest expense, net	Interest expense, net	(12,548)		(14,990)		(26,181)		(29,618)		Interest expense, net	(12,961)		(12,548)		(25,405)		(26,181)
(Loss) income before provision for income taxes		(50,144)		107,574		43,479		183,965
Income (loss) before provision for income taxes										Income (loss) before provision for income taxes	76,485		(50,144)		184,674		43,479
Provision for income taxes	Provision for income taxes	11,536		22,688		27,465		29,281		Provision for income taxes	6,483		11,536		21,244		27,465
Net (loss) income		(61,680)		84,886		16,014		154,684
Net income (loss)										Net income (loss)	70,002		(61,680)		163,430		16,014
Less: net income attributable to noncontrolling interests	Less: net income attributable to noncontrolling interests	1,955		2,341		4,138		3,277		Less: net income attributable to noncontrolling interests	1,725		1,955		3,842		4,138
Net (loss) income attributable to Bloomin’ Brands		$	(63,635)	$	82,545	$	11,876	$	151,407
Net income (loss) attributable to Bloomin’ Brands										Net income (loss) attributable to Bloomin’ Brands	$	68,277	$	(63,635)	$	159,588	$	11,876

Net (loss) income		$	(61,680)	$	84,886	$	16,014	$	154,684
Other comprehensive (loss) income:
Net income (loss)										Net income (loss)	$	70,002	$	(61,680)	$	163,430	$	16,014
Other comprehensive income (loss):										Other comprehensive income (loss):
Foreign currency translation adjustment	Foreign currency translation adjustment	11,940		10,015		23,223		3,440		Foreign currency translation adjustment	4,502		11,940		3,368		23,223

Unrealized (loss) gain on derivatives, net of tax		—		(128)		573		(170)
Reclassification of adjustments for loss on derivatives included in Net (loss) income, net of tax		273		1,514		954		4,517
Impact of terminated interest rate swaps included in Net (loss) income, net of tax		2,164		1,471		5,185		1,471
Comprehensive (loss) income		(47,303)		97,758		45,949		163,942
Unrealized gain on derivatives, net of tax										Unrealized gain on derivatives, net of tax	—		—		—		573
Reclassification of adjustments for loss on derivatives included in Net income (loss), net of tax										Reclassification of adjustments for loss on derivatives included in Net income (loss), net of tax	—		273		—		954
Impact of terminated interest rate swaps included in Net income (loss), net of tax										Impact of terminated interest rate swaps included in Net income (loss), net of tax	—		2,164		—		5,185
Comprehensive income (loss)										Comprehensive income (loss)	74,504		(47,303)		166,798		45,949
Less: comprehensive income attributable to noncontrolling interests	Less: comprehensive income attributable to noncontrolling interests	1,955		2,341		4,138		3,277		Less: comprehensive income attributable to noncontrolling interests	1,725		1,955		3,842		4,138
Comprehensive (loss) income attributable to Bloomin’ Brands		$	(49,258)	$	95,417	$	41,811	$	160,665
Comprehensive income (loss) attributable to Bloomin’ Brands										Comprehensive income (loss) attributable to Bloomin’ Brands	$	72,779	$	(49,258)	$	162,956	$	41,811

(Loss) earnings per share:
Earnings (loss) per share:										Earnings (loss) per share:
Basic	Basic	$	(0.72)	$	0.93	$	0.13	$	1.71	Basic	$	0.77	$	(0.72)	$	1.80	$	0.13
Diluted	Diluted	$	(0.72)	$	0.75	$	0.12	$	1.38	Diluted	$	0.70	$	(0.72)	$	1.63	$	0.12
Weighted average common shares outstanding:	Weighted average common shares outstanding:									Weighted average common shares outstanding:
Basic	Basic	88,898		89,075		89,127		88,721		Basic	88,559		88,898		88,838		89,127
Diluted	Diluted	88,898		109,805		102,045		110,223		Diluted	97,401		88,898		97,706		102,045

The accompanying notes are an integral part of these unaudited 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 89,185 $ 892 $ 1,115,458 $ (634,356) $ (190,431) $ 1,694 $ 293,257
Net (loss) income — — — (63,635) — 1,955 (61,680)
Other comprehensive income, net of tax — — — — 14,377 — 14,377
Cash dividends declared, $0.14 per common share — — (12,418) — — — (12,418)
Repurchase and retirement of common stock (1,761) (17) — (35,732) — — (35,749)
Stock-based compensation — — 4,959 — — — 4,959
Common stock issued under stock plans (1) 414 4 1,118 — — — 1,122
Purchase of noncontrolling interests, net of tax of $1,142 — — (3,301) — — 539 (2,762)
Distributions to noncontrolling interests — — — — — (2,513) (2,513)
Contributions from noncontrolling interests — — — — — 244 244
Retirement of convertible senior note hedges — — 112,956 — — — 112,956
Retirement of warrants — — (97,617) — — — (97,617)
Issuance of common stock from repurchase of convertible senior notes 2,313 23 48,542 — — — 48,565
Balance,
June 26, 2022 90,151 $ 902 $ 1,169,697 $ (733,723) $ (176,054) $ 1,919 $ 262,741
Balance,
December 26, 2021 89,253 $ 893 $ 1,119,728 $ (698,171) $ (205,989) $ 6,389 $ 222,850
Net income — — — 11,876 — 4,138 16,014
Other comprehensive income, net of tax — — — — 29,935 — 29,935
Cash dividends declared, $0.28 per common share — — (24,977) — — — (24,977)
Repurchase and retirement of common stock (2,312) (23) — (47,428) — — (47,451)
Stock-based compensation — — 9,802 — — — 9,802
Common stock issued under stock plans (1) 897 9 1,998 — — — 2,007
Purchase of noncontrolling interests, net of tax of $254 — — (735) — — (3,915) (4,650)
Distributions to noncontrolling interests — — — — — (5,154) (5,154)
Contributions from noncontrolling interests — — — — — 461 461
Retirement of convertible senior note hedges — — 112,956 — — — 112,956
Retirement of warrants — — (97,617) — — — (97,617)
Issuance of common stock from repurchase of convertible senior notes 2,313 23 48,542 — — — 48,565
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, March 26, 2023	87,465	$	875	$	1,141,017	$	(635,451)	$	(186,445)	$	2,845	$	322,841

Net income	—	—		—		68,277		—		1,725		70,002
Other comprehensive income	—	—		—		—		4,502		—		4,502
Cash dividends declared, $0.24 per common share	—	—		(20,990)		—		—		—		(20,990)
Repurchase and retirement of common stock, including excise tax of $31	(619)	(6)		—		(15,564)		—		—		(15,570)
Stock-based compensation	—	—		5,138		—		—		—		5,138

Common stock issued under stock plans (1)	493	4		7,567		—		—		—		7,571


Distributions to noncontrolling interests	—	—		—		—		—		(2,085)		(2,085)
Contributions from noncontrolling interests	—	—		—		—		—		459		459








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

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

Net income	—	—		—		159,588		—		3,842		163,430
Other comprehensive income	—	—		—		—		3,368		—		3,368
Cash dividends declared, $0.48 per common share	—	—		(42,004)		—		—		—		(42,004)
Repurchase and retirement of common stock, including excise tax of $48	(1,482)	(15)		—		(36,217)		—		—		(36,232)
Stock-based compensation	—	—		8,042		—		—		—		8,042

Common stock issued under stock plans (1)	1,125	11		4,782		—		—		—		4,793


Distributions to noncontrolling interests	—	—		—		—		—		(4,640)		(4,640)
Contributions from noncontrolling interests	—	—		—		—		—		1,202		1,202







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

										(CONTINUED...)

Table of Contents

BLOOMIN’ BRANDS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)


		BLOOMIN’ BRANDS, INC.																				BLOOMIN’ BRANDS, INC.
		COMMON STOCK			ADDITIONAL PAID-IN CAPITAL				ACCUM- ULATED DEFICIT		ACCUMULATED OTHER COMPREHENSIVE LOSS			NON-CONTROLLING INTERESTS				TOTAL				COMMON STOCK					ADDITIONAL PAID-IN CAPITAL				ACCUM- ULATED DEFICIT				ACCUMULATED OTHER COMPREHENSIVE LOSS				NON-CONTROLLING INTERESTS				TOTAL
		SHARES	AMOUNT										SHARES								AMOUNT
Balance, 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
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	—	—		—				—		12,872			—				12,872			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	—	—		9,781				—		—			—				9,781			Stock-based compensation	—			—		4,959				—				—				—				4,959

Common stock issued under stock plans (1)	Common stock issued under stock plans (1)	356	3		2,484				—		—			—				2,487			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	—	—		—				—		—			(2,683)				(2,683)			Distributions to noncontrolling interests	—			—		—				—				—				(2,513)				(2,513)
Contributions from noncontrolling interests	Contributions from noncontrolling interests	—	—		—				—		—			159				159			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, June 27, 2021		89,211	$	892	$	1,109,904			$	(762,319)	$	(202,188)		$	6,618			$	152,907
Balance, December 26, 2021																					Balance, December 26, 2021	89,253			$	893	$	1,119,728			$	(698,171)			$	(205,989)			$	6,389			$	222,850

Balance, December 27, 2020		87,856	$	879	$	1,132,808			$	(918,096)	$	(211,446)		$	6,812			$	10,957
Cumulative-effect from a change in accounting principle, net of tax		—	—		(47,323)				4,370		—			—				(42,953)
Net income	Net income	—	—		—				151,407		—			3,277				154,684			Net income	—			—		—				11,876				—				4,138				16,014
Other comprehensive income, net of tax	Other comprehensive income, net of tax	—	—		—				—		9,258			—				9,258			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	—			14,507				—		—			—				14,507			Stock-based compensation	—			—		9,802				—				—				—				9,802

Common stock issued under stock plans (1)	Common stock issued under stock plans (1)	1,355	13		9,912				—		—			—				9,925			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	—	—		—				—		—			(4,141)				(4,141)			Distributions to noncontrolling interests	—			—		—				—				—				(5,154)				(5,154)
Contributions from noncontrolling interests	Contributions from noncontrolling interests	—	—		—				—��		—			670				670			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 27, 2021		89,211	$	892	$	1,109,904			$	(762,319)	$	(202,188)		$	6,618			$	152,907
Balance, June 26, 2022																					Balance, June 26, 2022	90,151			$	902	$	1,169,697			$	(733,723)			$	(176,054)			$	1,919			$	262,741

________________

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

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

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 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					TWENTY-SIX WEEKS ENDED
		JUNE 26, 2022		JUNE 27, 2021			JUNE 25, 2023		JUNE 26, 2022

Cash flows provided by operating activities:						Cash flows provided by operating activities:
Net income						Net income	$	163,430	$	16,014
Adjustments to reconcile Net income to cash provided by operating activities:						Adjustments to reconcile Net income to cash provided by operating activities:
Depreciation and amortization						Depreciation and amortization	93,867		83,032
Amortization of debt discounts and issuance costs						Amortization of debt discounts and issuance costs	1,532		2,025
Amortization of deferred gift card sales commissions						Amortization of deferred gift card sales commissions	13,180		13,458
Provision for impaired assets and restaurant closings						Provision for impaired assets and restaurant closings	5,151		2,032

Non-cash interest expense from terminated interest rate swaps						Non-cash interest expense from terminated interest rate swaps	—		6,980
Non-cash operating lease costs						Non-cash operating lease costs	42,884		41,336

Stock-based compensation expense						Stock-based compensation expense	8,042		9,802
Deferred income tax (benefit) expense						Deferred income tax (benefit) expense	(1,164)		8,329

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

Loss on fair value adjustment of derivatives, net						Loss on fair value adjustment of derivatives, net	—		17,685
Other, net						Other, net	(3,515)		4,935
Change in assets and liabilities						Change in assets and liabilities	(36,114)		(94,440)

Net cash provided by operating activities						Net cash provided by operating activities	287,293		218,818
Cash flows used in investing activities:						Cash flows used in investing activities:

Capital expenditures						Capital expenditures	(142,153)		(76,901)
Other investments, net						Other investments, net	1,502		1,163
Net cash used in investing activities						Net cash used in investing activities	(140,651)		(75,738)

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

Repayments of long-term debt and finance lease obligations	Repayments of long-term debt and finance lease obligations	(195,733)		(425,564)		Repayments of long-term debt and finance lease obligations	(816)		(195,733)
Proceeds from borrowings on revolving credit facilities	Proceeds from borrowings on revolving credit facilities	624,500		286,000		Proceeds from borrowings on revolving credit facilities	448,000		624,500
Repayments of borrowings on revolving credit facilities	Repayments of borrowings on revolving credit facilities	(304,500)		(599,000)		Repayments of borrowings on revolving credit facilities	(513,000)		(304,500)

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

Issuance costs related to senior notes		—		(5,546)
Repurchase of convertible senior notes		(196,919)		—

Principal settlements and repurchase of convertible senior notes						Principal settlements and repurchase of convertible senior notes	(214)		(196,919)
Proceeds from retirement of convertible senior note hedges	Proceeds from retirement of convertible senior note hedges	131,869		—		Proceeds from retirement of convertible senior note hedges	—		131,869
Payments for retirement of warrants	Payments for retirement of warrants	(114,825)		—		Payments for retirement of warrants	—		(114,825)
Proceeds from share-based compensation, net	Proceeds from share-based compensation, net	2,007		9,925		Proceeds from share-based compensation, net	4,793		2,007
Distributions to noncontrolling interests	Distributions to noncontrolling interests	(5,154)		(4,141)		Distributions to noncontrolling interests	(4,640)		(5,154)
Contributions from noncontrolling interests	Contributions from noncontrolling interests	461		670		Contributions from noncontrolling interests	1,202		461
Purchase of noncontrolling interests	Purchase of noncontrolling interests	(4,904)		—		Purchase of noncontrolling interests	(100)		(4,904)
Payments for partner equity plan	Payments for partner equity plan	(5,743)		(4,494)		Payments for partner equity plan	—		(5,743)
Repurchase of common stock	Repurchase of common stock	(46,151)		—		Repurchase of common stock	(36,435)		(46,151)

Cash dividends paid on common stock	Cash dividends paid on common stock	(24,977)		—		Cash dividends paid on common stock	(42,004)		(24,977)

Net cash used in financing activities	Net cash used in financing activities	(140,922)		(248,018)		Net cash used in financing activities	(143,214)		(140,922)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	4,232		128		Effect of exchange rate changes on cash and cash equivalents	631		4,232

Net increase (decrease) in cash, cash equivalents and restricted cash		6,390		(7,333)
Net increase in cash, cash equivalents and restricted cash						Net increase in cash, cash equivalents and restricted cash	4,059		6,390
Cash, cash equivalents and restricted cash as of the beginning of the period	Cash, cash equivalents and restricted cash as of the beginning of the period	89,057		110,408		Cash, cash equivalents and restricted cash as of the beginning of the period	84,735		89,057
Cash, cash equivalents and restricted cash as of the end of the period	Cash, cash equivalents and restricted cash as of the end of the period	$	95,447	$	103,075	Cash, cash equivalents and restricted cash as of the end of the period	$	88,794	$	95,447
Supplemental disclosures of cash flow information:	Supplemental disclosures of cash flow information:					Supplemental disclosures of cash flow information:
Cash paid for interest	Cash paid for interest	$	18,862	$	23,748	Cash paid for interest	$	16,951	$	18,862
Cash paid for income taxes, net of refunds	Cash paid for income taxes, net of refunds	$	17,191	$	11,883	Cash paid for income taxes, net of refunds	$	15,356	$	17,191
Supplemental disclosures of non-cash investing and financing activities:	Supplemental disclosures of non-cash investing and financing activities:					Supplemental disclosures of non-cash investing and financing activities:

Leased assets obtained in exchange for new operating lease liabilities	Leased assets obtained in exchange for new operating lease liabilities	$	26,415	$	28,261	Leased assets obtained in exchange for new operating lease liabilities	$	30,249	$	26,415
Leased assets obtained in exchange for new finance lease liabilities	Leased assets obtained in exchange for new finance lease liabilities	$	2,417	$	48	Leased assets obtained in exchange for new finance lease liabilities	$	5,367	$	2,417
Increase (decrease) in liabilities from the acquisition of property, fixtures and equipment		$	2,545	$	(203)
Increase in liabilities from the acquisition of property, fixtures and equipment						Increase in liabilities from the acquisition of property, fixtures and equipment	$	7,522	$	2,545

The accompanying notes are an integral part of these unaudited 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 4four 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.~~25, 2022.

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

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

Reclassifications - The Company reclassified certain items in the accompanying consolidated financial statements for prior periods to be comparable with the classification for the current period, including, but not limited to, finance lease liabilities presented within other liabilities that were formerly presented within long-term debt, the separate presentation of current operating lease liabilities on the face of the Consolidated Balance Sheets and the presentation of certain items within the ~~condensed consolidated statements~~Condensed Consolidated Statements of ~~cash flows and certain notes to the consolidated financial statements.~~Cash Flows. These reclassifications had no effect on previously reported net income.

2. Revenue Recognition

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


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 25, 2023		JUNE 26, 2022		JUNE 25, 2023		JUNE 26, 2022
Revenues
Restaurant sales	$	1,137,330	$	1,108,918	$	2,365,564	$	2,232,493
Franchise and other revenues
Franchise revenues	12,568		12,596		26,091		26,002
Other revenues	2,796		3,648		5,785		7,202
Total Franchise and other revenues	15,364		16,244		31,876		33,204
Total revenues	$	1,152,694	$	1,125,162	$	2,397,440	$	2,265,697

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

~~________________~~

~~(1)~~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											THIRTEEN WEEKS ENDED
		JUNE 26, 2022						JUNE 27, 2021					JUNE 25, 2023				JUNE 26, 2022
(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	$	573,563		$	8,156		$	579,096	$	8,418	Outback Steakhouse	$	576,989	$	8,219	$	573,563	$	8,156
Carrabba’s Italian Grill	Carrabba’s Italian Grill	170,190			797			171,408		665		Carrabba’s Italian Grill	176,666		758		170,190		797
Bonefish Grill	Bonefish Grill	145,472			173			149,036		174		Bonefish Grill	143,458		95		145,472		173
Fleming’s Prime Steakhouse & Wine Bar	Fleming’s Prime Steakhouse & Wine Bar	93,933			—			88,101		—		Fleming’s Prime Steakhouse & Wine Bar	92,851		—		93,933		—
Other	Other	2,769			8			2,652		—		Other	3,474		10		2,769		8
U.S. total	U.S. total	985,927			9,134			990,293		9,257		U.S. total	993,438		9,082		985,927		9,134
International	International											International
Outback Steakhouse Brazil		100,647			—			43,310		—
Other (1)		22,344			3,462			21,624		2,964
Outback Steakhouse - Brazil (1)												Outback Steakhouse - Brazil (1)	119,295		—		100,647		—
Other (1)(2)												Other (1)(2)	24,597		3,486		22,344		3,462
International total	International total	122,991			3,462			64,934		2,964		International total	143,892		3,486		122,991		3,462
Total	Total	$	1,108,918		$	12,596		$	1,055,227	$	12,221	Total	$	1,137,330	$	12,568	$	1,108,918	$	12,596

				TWENTY-SIX WEEKS ENDED
							JUNE 25, 2023						JUNE 26, 2022

(dollars in thousands)												(dollars in thousands)	RESTAURANT SALES		FRANCHISE REVENUES		RESTAURANT SALES		FRANCHISE REVENUES
U.S.												U.S.
Outback Steakhouse												Outback Steakhouse	$	1,205,172	$	16,763	$	1,168,956	$	16,615
Carrabba’s Italian Grill												Carrabba’s Italian Grill	364,708		1,553		345,818		1,458
Bonefish Grill												Bonefish Grill	301,147		266		296,888		350
Fleming’s Prime Steakhouse & Wine Bar												Fleming’s Prime Steakhouse & Wine Bar	195,624		—		191,595		—
Other												Other	7,356		25		6,305		13
U.S. total												U.S. total	2,074,007		18,607		2,009,562		18,436
International												International
Outback Steakhouse - Brazil (1)												Outback Steakhouse - Brazil (1)	241,311		—		185,948		—
Other (1)(2)												Other (1)(2)	50,246		7,484		36,983		7,566
International total												International total	291,557		7,484		222,931		7,566
Total												Total	$	2,365,564	$	26,091	$	2,232,493	$	26,002

________________

(1)Restaurant sales in Brazil increased $9.6 million and $19.2 million during the thirteen and twenty-six weeks ended June 25, 2023, respectively, in connection with value added tax exemptions resulting from tax legislation. See Note 12 - Income Taxes for details regarding the Brazil tax legislation.

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

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

TWENTY-SIX WEEKS ENDED
JUNE 26, 2022 JUNE 27, 2021
(dollars in thousands) RESTAURANT SALES FRANCHISE REVENUES RESTAURANT SALES FRANCHISE REVENUES
U.S.
Outback Steakhouse $ 1,168,956 $ 16,615 $ 1,126,291 $ 11,374
Carrabba’s Italian Grill 345,818 1,458 329,094 1,282
Bonefish Grill 296,888 350 276,010 304
Fleming’s Prime Steakhouse & Wine Bar 191,595 — 154,412 —
Other 6,305 13 4,545 —
U.S. total 2,009,562 18,436 1,890,352 12,960
International
Outback Steakhouse Brazil 185,948 — 104,158 —
Other (1) 36,983 7,566 40,168 6,050
International total 222,931 7,566 144,326 6,050
Total $ 2,232,493 $ 26,002 $ 2,034,678 $ 19,010

~~________________~~

~~(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.

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)	JUNE 26, 2022		DECEMBER 26, 2021		(dollars in thousands)	JUNE 25, 2023		DECEMBER 25, 2022
Other current assets, net	Other current assets, net					Other current assets, net
Deferred gift card sales commissions	Deferred gift card sales commissions	$	12,338	$	17,793	Deferred gift card sales commissions	$	12,694	$	17,755

Unearned revenue	Unearned revenue					Unearned revenue
Deferred gift card revenue	Deferred gift card revenue	$	303,544	$	387,945	Deferred gift card revenue	$	304,942	$	386,495
Deferred loyalty revenue	Deferred loyalty revenue	4,309		9,386		Deferred loyalty revenue	5,391		5,628
Deferred franchise fees - current	Deferred franchise fees - current	440		443		Deferred franchise fees - current	472		460
Other	Other	1,570		1,021		Other	1,751		1,632
Total unearned revenue		$	309,863	$	398,795
Total Unearned revenue						Total Unearned revenue	$	312,556	$	394,215

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	$	4,185	$	4,280	Deferred franchise fees - non-current	$	4,132	$	4,126

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


		THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED					THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	(dollars in thousands)	JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021		(dollars in thousands)	JUNE 25, 2023		JUNE 26, 2022		JUNE 25, 2023		JUNE 26, 2022
Balance, beginning of the period	Balance, beginning of the period	$	13,033	$	13,502	$	17,793	$	19,300	Balance, beginning of the period	$	13,403	$	13,033	$	17,755	$	17,793
Deferred gift card sales commissions amortization	Deferred gift card sales commissions amortization	(5,441)		(5,711)		(13,458)		(14,436)		Deferred gift card sales commissions amortization	(5,383)		(5,441)		(13,180)		(13,458)
Deferred gift card sales commissions capitalization	Deferred gift card sales commissions capitalization	5,436		5,297		9,605		8,796		Deferred gift card sales commissions capitalization	5,340		5,436		9,743		9,605
Other	Other	(690)		(540)		(1,602)		(1,112)		Other	(666)		(690)		(1,624)		(1,602)
Balance, end of the period	Balance, end of the period	$	12,338	$	12,548	$	12,338	$	12,548	Balance, end of the period	$	12,694	$	12,338	$	12,694	$	12,338

~~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 TWENTY-SIX WEEKS ENDED
(dollars in thousands) JUNE 26, 2022 JUNE 27, 2021 JUNE 26, 2022 JUNE 27, 2021
Balance, beginning of the period $ 314,974 $ 306,075 $ 387,945 $ 373,048
Gift card sales 65,174 63,921 115,454 108,090
Gift card redemptions (72,428) (71,859) (189,050) (176,799)
Gift card breakage (4,176) (4,182) (10,805) (10,384)
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.


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 25, 2023		JUNE 26, 2022		JUNE 25, 2023		JUNE 26, 2022
Balance, beginning of the period	$	314,096	$	314,974	$	386,495	$	387,945
Gift card sales	65,338		65,174		118,343		115,454
Gift card redemptions	(70,175)		(72,428)		(188,458)		(189,050)
Gift card breakage	(4,317)		(4,176)		(11,438)		(10,805)
Balance, end of the period	$	304,942	$	303,544	$	304,942	$	303,544

1210

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

4.3. Earnings (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 twenty-six weeks ended June 26, 2022, the conversion price of the 2025 Notes decreased to $11.74 per share of common stock and the strike price of the related warrants decreased to $16.43 per share of common stock.

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


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(in thousands, except per share data)	JUNE 25, 2023		JUNE 26, 2022 (1)		JUNE 25, 2023		JUNE 26, 2022
Net income (loss) attributable to Bloomin’ Brands	$	68,277	$	(63,635)	$	159,588	$	11,876





Basic weighted average common shares outstanding	88,559		88,898		88,838		89,127

Effect of dilutive securities:
Stock options	395		—		398		305
Nonvested restricted stock units	132		—		201		192
Nonvested performance-based share units	—		—		143		143
Convertible senior notes (2)	5,002		—		4,917		8,253
Warrants (2)	3,313		—		3,209		4,025
Diluted weighted average common shares outstanding	97,401		88,898		97,706		102,045

Basic earnings (loss) per share	$	0.77	$	(0.72)	$	1.80	$	0.13
Diluted earnings (loss) per share	$	0.70	$	(0.72)	$	1.63	$	0.12

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~~Due to the Company’s ~~election under~~net loss during the ~~2025 Notes indenture to settle~~thirteen weeks ended June 26, 2022, the ~~principal portion~~effect of dilutive securities was excluded from the ~~2025 Notes in cash. Effective with the Company’s election, there will~~computation of diluted earnings per share as their effect would be ~~no further numerator adjustments for interest or denominator adjustments for shares required to settle the principal portion.~~antidilutive.

(2)During the thirteen weeks ended June 26, 2022, the Company repurchased $125.0 million of the convertible notes due in 2025 ~~Notes~~ and ~~retired~~settled 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~~note hedges and warrants ~~were excluded from the computation of diluted earnings per share as their effect would be antidilutive.~~(the “2025 Notes Partial Repurchase”).

~~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 earnings (loss) ~~earnings~~ per share because their effect was antidilutive were as follows for the periods indicated:


		THIRTEEN WEEKS ENDED		TWENTY-SIX WEEKS ENDED			THIRTEEN WEEKS ENDED		TWENTY-SIX WEEKS ENDED
(shares in thousands)	(shares in thousands)	JUNE 26, 2022	JUNE 27, 2021	JUNE 26, 2022	JUNE 27, 2021	(shares in thousands)	JUNE 25, 2023	JUNE 26, 2022	JUNE 25, 2023	JUNE 26, 2022
Stock options	Stock options	2,563	—	1,870	682	Stock options	689	2,563	707	1,870
Nonvested restricted stock units	Nonvested restricted stock units	485	9	299	41	Nonvested restricted stock units	21	485	70	299
Nonvested performance-based share units	Nonvested performance-based share units	596	465	475	448	Nonvested performance-based share units	581	596	463	475

5.4. Stock-based Compensation Plans

The Company recognized stock-based compensation expense, net of capitalized expense, as follows 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
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.


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 25, 2023		JUNE 26, 2022		JUNE 25, 2023		JUNE 26, 2022
Performance-based share units	$	2,297	$	2,840	$	3,220	$	5,459
Restricted stock units	1,985		2,027		3,948		3,837
Stock options	835		55		835		432

Total stock-based compensation expense, net	$	5,117	$	4,922	$	8,003	$	9,728

In February ~~2022,~~2023, 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.

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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


(in thousands, except per unit data)	PERFORMANCE-BASED SHARE UNITS	WEIGHTED AVERAGE GRANT DATE FAIR VALUE PER UNIT		AGGREGATE INTRINSIC VALUE (1)
Outstanding as of December 25, 2022	874	$	24.83	$	18,323
Granted	301	$	29.01
Performance adjustment (2)	154	$	19.84
Vested	(470)	$	19.84
Forfeited	(32)	$	26.39
Outstanding as of June 25, 2023	827	$	26.92	$	21,308
Expected to vest as of June 25, 2023 (3)	1,067			$	27,486

________________

(1)Based on the $20.96 and $25.76 share price of the Company’s common stock on December 23, 2022 and June 23, 2023, the last trading day of the year ended December 25, 2022 and the twenty-six weeks ended June 25, 2023, respectively.

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

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

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


		TWENTY-SIX WEEKS ENDED							TWENTY-SIX WEEKS ENDED
		JUNE 26, 2022			JUNE 27, 2021				JUNE 25, 2023			JUNE 26, 2022
Assumptions:	Assumptions:							Assumptions:
Risk-free interest rate (1)	Risk-free interest rate (1)	1.64		%	0.20		%	Risk-free interest rate (1)	4.26		%	1.64		%
Dividend yield (2)	Dividend yield (2)	2.31		%	—		%	Dividend yield (2)	3.47		%	2.31		%

Volatility (3)	Volatility (3)	49.11		%	48.45		%	Volatility (3)	51.02		%	49.11		%

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)	$	29.01		$	26.10

________________

(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 grant date per share value of the Company’s common stock for the Relative TSR modifier as of ~~the grant date of~~2.7% and 7.9% ~~and 14.3% for grants~~ during the twenty-six weeks ended June ~~26, 2022~~25, 2023 and June ~~27, 2021,~~26, 2022, respectively.

The following represents unrecognized stock-based compensation expense and the remaining weighted average vesting period as of June 25, 2023:


	UNRECOGNIZED COMPENSATION EXPENSE (dollars in thousands)		REMAINING WEIGHTED AVERAGE VESTING PERIOD (in years)
Performance-based share units	$	14,306	1.7
Restricted stock units	$	11,917	2.0

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

5. Other Current Assets, Net

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


(dollars in thousands)	JUNE 25, 2023		DECEMBER 25, 2022
Prepaid expenses	$	24,387	$	29,343
Accounts receivable - gift cards, net	15,754		85,606
Accounts receivable - vendors, net	15,638		25,385
Accounts receivable - franchisees, net	3,993		2,550
Accounts receivable - other, net	18,094		18,408
Deferred gift card sales commissions	12,694		17,755


Other current assets, net	6,210		4,671
	$	96,770	$	183,718

6. Goodwill and Intangible Assets, Net

Annual Goodwill and Intangible Assets Impairment Assessment - The Company performs its annual assessment for impairment of goodwill and other indefinite-lived intangible assets during its second fiscal quarter. The Company’s 2023 assessment was quantitative and the 2022 assessment was qualitative. In connection with these assessments, the Company did not record any impairment charges.

7. Long-term Debt, Net

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


	JUNE 25, 2023				DECEMBER 25, 2022
(dollars in thousands)	OUTSTANDING BALANCE		INTEREST RATE		OUTSTANDING BALANCE		INTEREST RATE
Senior secured credit facility - revolving credit facility (1)	$	365,000	6.77	%	$	430,000	5.79	%
2025 Notes	104,786		5.00	%	105,000		5.00	%
2029 Notes	300,000		5.13	%	300,000		5.13	%


Less: unamortized debt discount and issuance costs	(5,788)				(6,493)



Long-term debt, net	$	763,998			$	828,507

________________

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

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

8. Convertible Senior Notes

2025 Notes - In connection with dividends paid during the twenty-six weeks ended June 25, 2023, the conversion rate for theCompany’s remaining convertible senior notes due 2025 (the “2025 Notes”) decreased to approximately $11.37 per share, which represents 87.962 shares of common stock per $1,000 principal amount of the 2025 Notes, or a total of approximately 9.217 million shares.

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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) JUNE 26, 2022 DECEMBER 26, 2021
Prepaid expenses $ 28,000 $ 21,194
Accounts receivable - gift cards, net 15,575 91,248
Accounts receivable - vendors, net 12,284 11,793
Accounts receivable - franchisees, net 1,720 1,701
Accounts receivable - other, net 19,184 18,353
Deferred gift card sales commissions 12,338 17,793
Company-owned life insurance policies 21,501 17,244
Other current assets, net 6,395 5,297
$ 116,997 $ 184,623

~~7. Long-term Debt, Net~~

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

JUNE 26, 2022 DECEMBER 26, 2021
(dollars in thousands) OUTSTANDING BALANCE INTEREST RATE OUTSTANDING BALANCE INTEREST RATE
Senior Secured Credit Facility:
Term loan A (1) $ — $ 195,000 1.60 %
Revolving credit facility (2) 400,000 2.74 % 80,000 3.75 %
Total Senior Secured Credit Facility 400,000 275,000
2025 Notes (3) 105,000 5.00 % 230,000 5.00 %
2029 Notes 300,000 5.13 % 300,000 5.13 %
Finance lease liabilities 4,228 2,376
Less: unamortized debt discount and issuance costs (4) (7,176) (14,157)
Less: finance lease interest (319) (154)
Total debt, net 801,733 793,065
Less: current portion of long-term debt (1,511) (10,958)
Long-term debt, net $ 800,222 $ 782,107

~~________________~~

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

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

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

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

~~Table of Contents~~

~~BLOOMIN’ BRANDS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED) - Continued~~

~~Credit Agreement Amendment -~~ On April 16, 2021, the Company and its wholly-owned subsidiary OSI Restaurant Partners, LLC (“OSI”), as co-borrowers, entered into the Second Amended and Restated Credit Agreement (the “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 purposes of calculating interest under the Senior Secured Credit Facility. At closing, an incremental $192.5 million was drawn on the revolving credit facility to fully repay the outstanding balance of Term loan A. The total indebtedness of the Company remained unchanged as a result of the Amended Credit Agreement.

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


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

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

~~As of 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 twenty-six weeks ended June 26, 2022, the conversion rate for the remaining 2025 Notes decreased to approximately $11.74 per share, which represents 85.185 shares of common stock per $1,000 principal amount of the 2025 Notes, or a total of approximately 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) JUNE 26, 2022 DECEMBER 26, 2021
Long-term debt, net
Principal $ 105,000 $ 230,000
Less: debt issuance costs (1) (2,321) (5,898)
Net carrying amount $ 102,679 $ 224,102

~~________________~~

~~(1)~~Debt issuance costs are amortized to Interest expense, net using the effective interest method over the 2025 Notes’ expected life. During the thirteen weeks ended June 26, 2022, the Company wrote off $2.8 million of debt issuance costs as a result of the 2025 Notes Partial Repurchase.


(dollars in thousands)	JUNE 25, 2023		DECEMBER 25, 2022
Principal	$	104,786	$	105,000
Less: debt issuance costs	(1,542)		(1,939)
Net carrying amount	$	103,244	$	103,061

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


		THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED					THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	(dollars in thousands)	JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021		(dollars in thousands)	JUNE 25, 2023		JUNE 26, 2022		JUNE 25, 2023		JUNE 26, 2022
Coupon interest	Coupon interest	$	2,597	$	2,875	$	5,472	$	5,750	Coupon interest	$	1,310	$	2,597	$	2,622	$	5,472
Debt issuance cost amortization	Debt issuance cost amortization	370		386		774		767		Debt issuance cost amortization	198		370		394		774
Total interest expense (1)	Total interest expense (1)	$	2,967	$	3,261	$	6,246	$	6,517	Total interest expense (1)	$	1,508	$	2,967	$	3,016	$	6,246

________________

(1)The effective rate of the 2025 Notes over their expected life is 5.85%. The decrease in interest expense during the thirteen and twenty-six weeks ended June 25, 2023 relates to the 2025 Notes Partial Repurchase in May 2022.

Based on the daily closing prices of the Company’s stock during the quarter ended June ~~26, 2022,~~25, 2023, the remaining holders of the 2025 Notes are eligible to convert their ~~2025 Notes~~notes during the third quarter of ~~2022.~~

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

~~Table of Contents~~

~~BLOOMIN’ BRANDS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED) - Continued~~

The 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 twenty-six weeks ended June 26, 2022, the strike price for the remaining~~ ~~Warrant Transactions~~ ~~decreased to $16.43.~~2023.

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

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

(dollars in thousands) JUNE 26, 2022 DECEMBER 26, 2021
Accrued insurance liability $ 29,281 $ 31,517
Deferred payroll tax liabilities (1) — 27,302
Executive management deferred compensation obligations 19,098 23,543
Other long-term liabilities 40,111 42,880
$ 88,490 $ 125,242

~~_______________~~

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

~~10.~~ Stockholders’ Equity

Share Repurchases - On February ~~8, 2022,~~7, 2023, the Company’s Board of Directors (the “Board”) approved a share repurchase program (the ~~“2022~~“2023 Share Repurchase Program”) under which the Company ~~was~~is authorized to repurchase up to $125.0 million of its outstanding common stock. The ~~2022~~2023 Share Repurchase Program will expire on August ~~9, 2023.~~7, 2024. As of June ~~26, 2022, $77.5~~25, 2023, $103.8 million remained available for repurchase under the ~~2022~~2023 Share Repurchase Program.

Following is a summary of the shares repurchased ~~under the 2022 Share Repurchase Program~~ during fiscal year ~~2022:~~2023:


(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	First fiscal quarter	551	$	21.26	$	11,702	First fiscal quarter	863	$	23.92	$	20,645
Second fiscal quarter	Second fiscal quarter	1,761	$	20.30	35,749		Second fiscal quarter	619	$	25.11	15,539

Total common stock repurchases (1)	Total common stock repurchases (1)	2,312	$	20.53	$	47,451	Total common stock repurchases (1)	1,482	$	24.42	$	36,184

________________

(1)Excludes excise tax on share repurchases. Subsequent to June ~~26, 2022,~~25, 2023, the Company repurchased ~~854~~269 thousand shares of its common stock for ~~$14.9~~$7.3 million under a Rule 10b5-1 ~~plan through July 28, 2022.~~plan.

Dividends - The Company declared and paid dividends per share during fiscal year ~~2022~~2023 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	$	0.24	$	21,014
Second fiscal quarter	Second fiscal quarter	0.14		12,418		Second fiscal quarter	0.24		20,990

Total cash dividends declared and paid	Total cash dividends declared and paid	$	0.28	$	24,977	Total cash dividends declared and paid	$	0.48	$	42,004

In July ~~2022,~~2023, the Board declared a quarterly cash dividend of ~~$0.14~~$0.24 per share, payable on August ~~24, 2022~~25, 2023 to shareholders of record at the close of business on August ~~10, 2022.~~14, 2023.

1814

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

Accumulated Other Comprehensive Loss (“AOCL”) -~~Following are the components~~ AOCL consisted of ~~AOCL~~foreign currency translation adjustments as of ~~the periods indicated:~~June 25, 2023 and December 25, 2022.

(dollars in thousands) JUNE 26, 2022 DECEMBER 26, 2021
Foreign currency translation adjustment $ (172,257) $ (195,480)
Unrealized loss on derivatives, net of tax (3,797) (10,509)
Accumulated other comprehensive loss $ (176,054) $ (205,989)

Following are the components of Other comprehensive income attributable to Bloomin’ Brands 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
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 11 -~~ ~~Derivative Instruments and Hedging Activities~~ ~~for the tax impact of reclassifications and the terminated swaps.~~


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 25, 2023		JUNE 26, 2022		JUNE 25, 2023		JUNE 26, 2022
Foreign currency translation adjustment	$	4,502	$	11,940	$	3,368	$	23,223

Unrealized gain on derivatives, net of tax	—		—		—		573
Reclassification of adjustments for loss on derivatives included in Net income (loss), net of tax	—		273		—		954
Impact of terminated interest rate swaps included in Net income (loss), net of tax	—		2,164		—		5,185
Total gain on derivatives, net of tax	—		2,437		—		6,712

Other comprehensive income attributable to Bloomin’ Brands	$	4,502	$	14,377	$	3,368	$	29,935

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

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

~~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.~~10. 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	JUNE 26, 2022		DECEMBER 26, 2021		(dollars in thousands)	CONSOLIDATED BALANCE SHEET CLASSIFICATION	JUNE 25, 2023		DECEMBER 25, 2022
Operating lease right-of-use assets	Operating lease right-of-use assets	Operating lease right-of-use assets	$	1,122,317	$	1,130,873	Operating lease right-of-use assets	Operating lease right-of-use assets	$	1,089,218	$	1,103,083
Finance lease right-of-use assets (1)	Finance lease right-of-use assets (1)	Property, fixtures and equipment, net	3,782		2,074		Finance lease right-of-use assets (1)	Property, fixtures and equipment, net	10,045		4,679
Total lease assets, net	Total lease assets, net		$	1,126,099	$	1,132,947	Total lease assets, net		$	1,099,263	$	1,107,762

Current operating lease liabilities ~~(2)~~	Current operating lease liabilities ~~(2)~~	Accrued and other current liabilities	$	178,817	$	177,028	Current operating lease liabilities ~~(2)~~	Current operating lease liabilities	$	185,362	$	183,510
Current finance lease liabilities	Current finance lease liabilities	Current portion of long-term debt	1,511		958		Current finance lease liabilities	Accrued and other current liabilities	2,508		1,636
Non-current operating lease liabilities (2)	Non-current operating lease liabilities (2)	Non-current operating lease liabilities	1,168,418		1,178,998		Non-current operating lease liabilities (2)	Non-current operating lease liabilities	1,131,843		1,148,379
Non-current finance lease liabilities	Non-current finance lease liabilities	Long-term debt, net	2,398		1,264		Non-current finance lease liabilities	Other long-term liabilities, net	8,037		3,149
Total lease liabilities	Total lease liabilities		$	1,351,144	$	1,358,248	Total lease liabilities		$	1,327,750	$	1,336,674

________________

(1)Net of accumulated amortization of ~~$4.1~~$3.5 million and ~~$3.3~~$3.6 million as of June ~~26, 2022~~25, 2023 and December ~~26, 2021,~~25, 2022, respectively.

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

2015

Table of Contents

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 Income (Loss) ~~Income~~ for the periods indicated:


		CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME CLASSIFICATION	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED					CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) CLASSIFICATION	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	(dollars in thousands)		JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021		(dollars in thousands)		JUNE 25, 2023		JUNE 26, 2022		JUNE 25, 2023		JUNE 26, 2022
Operating leases (1)		Other restaurant operating	$	45,579	$	43,763	$	90,940	$	88,555
Operating lease cost (1)											Operating lease cost (1)	Other restaurant operating	$	46,237	$	45,579	$	91,984	$	90,940
Variable lease cost ~~(2)~~	Variable lease cost ~~(2)~~	Other restaurant operating	1,619		731		3,502		1,508		Variable lease cost ~~(2)~~	Other restaurant operating	1,629		1,619		3,353		3,502
Finance leases:
Finance lease costs:											Finance lease costs:
Amortization of leased assets	Amortization of leased assets	Depreciation and amortization	356		258		693		520		Amortization of leased assets	Depreciation and amortization	549		356		1,037		693
Interest on lease liabilities	Interest on lease liabilities	Interest expense, net	44		31		76		67		Interest on lease liabilities	Interest expense, net	174		44		310		76
Sublease revenue	Sublease revenue	Franchise and other revenues	(2,436)		(2,825)		(4,994)		(3,660)		Sublease revenue	Franchise and other revenues	(1,635)		(2,436)		(3,343)		(4,994)
Lease costs, net	Lease costs, net		$	45,162	$	41,958	$	90,217	$	86,990	Lease costs, net		$	46,954	$	45,162	$	93,341	$	90,217

________________

(1)Excludes rent expense for office facilities and Company-owned closed or subleased properties of ~~$3.1~~$3.0 million and ~~$3.2~~$3.1 million for the thirteen weeks ended June 25, 2023 and June 26, 2022, ~~and June 27, 2021,~~ respectively, and ~~$6.1~~$6.0 million and ~~$6.7~~$6.1 million for the twenty-six weeks ended June ~~26, 2022~~25, 2023 and June ~~27, 2021,~~26, 2022, respectively, which is included in General and administrative expense.

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

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

TWENTY-SIX WEEKS ENDED

(dollars in thousands)

JUNE 26, 2022

JUNE 27, 2021

(dollars in thousands)

JUNE 25, 2023

JUNE 26, 2022

Cash flows from operating activities:

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

97,255

105,323

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

97,804

97,255

~~13.~~11. Fair Value Measurements

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


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

~~Table of Contents~~

~~BLOOMIN’ BRANDS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED) - Continued~~

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

JUNE 26, 2022 DECEMBER 26, 2021
(dollars in thousands) TOTAL LEVEL 1 LEVEL 2 TOTAL LEVEL 1 LEVEL 2
Assets:
Cash equivalents:
Fixed income funds $ 13,583 $ 13,583 $ — $ 6,714 $ 6,714 $ —
Money market funds 10,670 10,670 — 9,039 9,039 —
Restricted cash equivalents:
Money market funds 101 101 — 1,472 1,472 —
Total asset recurring fair value measurements $ 24,354 $ 24,354 $ — $ 17,225 $ 17,225 $ —
Liabilities:
Accrued and other current liabilities:
Derivative instruments - interest rate swaps $ — $ — $ — $ 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 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


	JUNE 25, 2023				DECEMBER 25, 2022
(dollars in thousands)	TOTAL		LEVEL 1			TOTAL		LEVEL 1
Assets (1):
Cash equivalents:
Fixed income funds	$	11,715	$	11,715		$	3,301	$	3,301
Money market funds	8,880		8,880			4,786		4,786







Total asset recurring fair value measurements	$	20,595	$	20,595		$	8,087	$	8,087

________________

(1)~~All asset carrying values measured using discounted cash flow models (Level 3).~~Carrying value approximates fair value because maturities are less than three months.

~~Table of Contents~~

~~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.

Table of Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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


		JUNE 26, 2022				DECEMBER 26, 2021
		CARRYING VALUE		FAIR VALUE LEVEL 2		CARRYING VALUE			FAIR VALUE LEVEL 2		JUNE 25, 2023				DECEMBER 25, 2022
(dollars in thousands)	(dollars in thousands)						(dollars in thousands)	CARRYING VALUE				FAIR VALUE LEVEL 2				CARRYING VALUE		FAIR VALUE LEVEL 2
Senior Secured Credit Facility:
Term loan A		$	—	$	—				$	195,000		$	190,125
Revolving credit facility		$	400,000	$	390,000				$	80,000		$	76,926

Senior secured credit facility - revolving credit facility														Senior secured credit facility - revolving credit facility	$	365,000	$	365,000	$	430,000	$	430,000

2025 Notes	2025 Notes	$	105,000	$	177,031				$	230,000		$	447,615	2025 Notes	$	104,786	$	241,722	$	105,000	$	198,843
2029 Notes	2029 Notes	$	300,000	$	255,000				$	300,000		$	304,395	2029 Notes	$	300,000	$	269,343	$	300,000	$	260,265

~~14.~~ 12. Income Taxes


		THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED							THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
(dollars in thousands)	(dollars in thousands)	JUNE 26, 2022			JUNE 27, 2021			JUNE 26, 2022			JUNE 27, 2021			(dollars in thousands)	JUNE 25, 2023			JUNE 26, 2022			JUNE 25, 2023			JUNE 26, 2022
(Loss) income before provision for income taxes		$	(50,144)		$	107,574		$	43,479		$	183,965
Income (loss) before provision for income taxes														Income (loss) before provision for income taxes	$	76,485		$	(50,144)		$	184,674		$	43,479
Provision for income taxes	Provision for income taxes	$	11,536		$	22,688		$	27,465		$	29,281		Provision for income taxes	$	6,483		$	11,536		$	21,244		$	27,465
Effective income tax rate	Effective income tax rate	(23.0)		%	21.1		%	63.2		%	15.9		%	Effective income tax rate	8.5		%	(23.0)		%	11.5		%	63.2		%

The effective income tax rate for the thirteen weeks ended June 25, 2023 changed by 31.5 percentage points as compared to the thirteen weeks ended June 26, ~~2022 includes~~2022. This change is primarily due to the ~~impact of nondeductible~~non-deductible losses associated with the 2025 Notes Partial Repurchase which, relative to ~~a pre-tax book loss~~the Loss before provision for income taxes during the ~~quarter,~~thirteen weeks ended June 26, 2022, resulted in a negative effective income tax rate. This change was partially offset by a reduction in the effective tax rate during the thirteen weeks ended June 25, 2023 from benefits of Brazil tax legislation that include a temporary reduction in the Brazilian income tax rate from 34% to 0% and the revaluation of Brazilian deferred tax assets and liabilities as a result of the May 2023 Brazil tax legislation, as defined and further discussed below.

The effective income tax rate for the twenty-six weeks ended June ~~26, 2022 increased~~25, 2023 decreased by ~~47.3~~51.7 percentage points as compared to the twenty-six weeks ended June ~~27, 2021. The increase~~26, 2022. This decrease was primarily due to the benefits of Brazil tax legislation that include a temporary reduction in the Brazilian income tax rate from 34% to 0% for the twenty-six weeks ended June 25, 2023, and the non-deductible losses associated with the 2025 Notes Partial Repurchase recorded during the twenty-six weeks ended June 26, 2022.

~~On December 28,~~ In September 2022, the Company’s Brazilian subsidiary received a preliminary injunction authorizing it to benefit from the exemptions enacted by Law 14,148/2021 ~~the U.S. Treasury~~which provides for emergency and ~~the Internal Revenue Service released final regulations~~temporary actions that ~~among other things, provide guidance on several aspects of the foreign~~grant certain industries a 100% exemption from income tax ~~credit rules. As~~(IRPJ and CSLL) and federal value added taxes (PIS and COFINS) for a five-year period. The injunction was issued as part of an ongoing lawsuit initiated by the ~~guidance issued, these regulations change longstanding foreign~~Company’s Brazilian subsidiary due to the uncertainty regarding the restaurant industry’s eligibility for the exemptions under this legislation.

In May 2023, Brazil enacted tax legislation that prospectively limits the Company’s ability to benefit from the 100% exemption from income tax (IRPJ and CSLL) and federal value added taxes (PIS and COFINS) for the full five-year period (the “May 2023 Brazil tax legislation”). As a result of this legislation, the Company expects to be subject to PIS and COFINS and CSLL beginning in the fourth quarter of 2023 and IRPJ beginning in 2024.

A restaurant company employer may claim a credit ~~regulations that now make foreign~~against its federal income taxes for FICA taxes paid toon certain ~~countries no longer creditable in the United States.~~tipped wages (the “FICA tax credit”). The ~~Company expects~~level of FICA tax credits is primarily driven by U.S. Restaurant sales and is not impacted by costs incurred that ~~a portion~~may reduce Income before provision for income taxes.

Table of ~~post-2022 foreign taxes paid will not be creditable in the United States. Furthermore, the impact of these regulations will result in the utilization of existing prior year foreign~~Contents

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

The effective income tax ~~credit carryforwards~~rates for ~~which the Company had previously recorded a valuation allowance. The valuation allowance related to the credits expected to be utilized has been released during~~ the thirteen and twenty-six weeks ended June ~~26, 2022.~~25, 2023 were lower than the Company’s blended federal and state statutory rate of approximately 26% primarily due to the benefit of FICA tax credits on certain tipped wages, benefits of Brazil tax legislation that include a temporary reduction in the Brazilian income tax rate from 34% to 0%, and the revaluation of Brazilian deferred tax assets and liabilities as a result of the May 2023 Brazil tax legislation.

The effective income tax rate for the thirteen weeks ended June 26, 2022 was lower than the Company’s blended federal and state statutory rate of approximately 26%. The income tax rate includes the impact of ~~nondeductible~~non-deductible losses associated with the 2025 Notes Partial Repurchase which, relative to ~~a pre-tax book loss~~the Loss before provision for income taxes 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.

~~Table of Contents~~

~~BLOOMIN’ BRANDS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED) - Continued~~

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

~~15.~~13. 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~~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 $8.5 million and $7.1 million for certain of its outstanding legal proceedings as of 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.

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

The Company recorded reserves of $16.4 million and $15.1 million for certain of its outstanding legal proceedings as of June 25, 2023 and December 25, 2022, respectively, within Accrued and other current liabilities on its Consolidated Balance Sheets. While the Company believes that additional losses beyond these accruals are

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BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

reasonably possible, it cannot estimate a possible loss contingency or range of reasonably possible loss contingencies beyond these accruals.

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 June ~~26, 2022,~~25, 2023, the undiscounted payments that the Company could be required to make in the event of non-payment by the primary lessees was approximately ~~$23.0~~$21.9 million. The present value of these potential payments discounted at the Company’s incremental borrowing rate as of June ~~26, 2022~~25, 2023 was approximately ~~$17.5~~$16.5 million. In the event of default, the indemnity clauses in the Company’s purchase and sale agreements generally govern its ability to pursue and recover damages incurred. As of June ~~26, 2022~~25, 2023 and December ~~26, 2021,~~25, 2022, the Company’s recorded contingent lease liability was ~~$8.4~~$5.6 million and ~~$8.7~~$6.2 million, respectively.

~~Table of Contents~~

~~BLOOMIN’ BRANDS, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED) - Continued~~

~~16.~~14. 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.~~25, 2022. 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, certain insurance 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~~summary of revenues by 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


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 25, 2023		JUNE 26, 2022		JUNE 25, 2023		JUNE 26, 2022
Revenues
U.S.	$	1,005,229	$	998,627	$	2,098,225	$	2,035,034
International	147,465		126,535		299,215		230,663
Total revenues	$	1,152,694	$	1,125,162	$	2,397,440	$	2,265,697

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BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) - Continued

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


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 25, 2023		JUNE 26, 2022		JUNE 25, 2023		JUNE 26, 2022
Segment income from operations
U.S.	$	103,008	$	104,620	$	236,251	$	236,846
International	20,486		14,126		44,994		23,010
Total segment income from operations	123,494		118,746		281,245		259,856
Unallocated corporate operating expense	(34,048)		(31,027)		(71,166)		(64,881)
Total income from operations	89,446		87,719		210,079		194,975
Loss on extinguishment and modification of debt	—		(107,630)		—		(107,630)
Loss on fair value adjustment of derivatives, net	—		(17,685)		—		(17,685)

Interest expense, net	(12,961)		(12,548)		(25,405)		(26,181)
Income (loss) before provision for income taxes	$	76,485	$	(50,144)	$	184,674	$	43,479

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


		THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED					THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	(dollars in thousands)	JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021		(dollars in thousands)	JUNE 25, 2023		JUNE 26, 2022		JUNE 25, 2023		JUNE 26, 2022
Depreciation and amortization	Depreciation and amortization									Depreciation and amortization
U.S.	U.S.	$	33,544	$	33,578	$	68,303	$	67,223	U.S.	$	39,375	$	33,544	$	77,538	$	68,303
International	International	6,019		5,566		11,556		11,286		International	6,126		6,019		12,045		11,556
Corporate	Corporate	1,694		1,395		3,173		3,256		Corporate	2,064		1,694		4,284		3,173
Total depreciation and amortization	Total depreciation and amortization	$	41,257	$	40,539	$	83,032	$	81,765	Total depreciation and amortization	$	47,565	$	41,257	$	93,867	$	83,032

Geographic Areas - International assets are defined as assets residing in a country other than the U.S. The following table details long-lived assets, excluding goodwill, operating lease right-of-use assets, intangible assets and deferred tax assets, by major geographic area as of the periods indicated:


(dollars in thousands)	JUNE 25, 2023		DECEMBER 25, 2022
U.S.	$	945,616	$	891,379
International
Brazil	108,791		93,972
Other	8,970		10,938
Total long-lived assets	$	1,063,377	$	996,289

International revenues are defined as revenues generated from restaurant sales originating in a country other than the U.S. The following table details Total revenues by major geographic area for the periods indicated:


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 25, 2023		JUNE 26, 2022		JUNE 25, 2023		JUNE 26, 2022
U.S.	$	1,005,229	$	998,627	$	2,098,225	$	2,035,034
International
Brazil	126,245		106,505		265,239		196,605
Other	21,220		20,030		33,976		34,058
Total revenues	$	1,152,694	$	1,125,162	$	2,397,440	$	2,265,697

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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 (the “Securities Act”), 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;

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

(iv)~~Fluctuations in~~Economic conditions and their effects on consumer confidence and discretionary spending, consumer traffic, the ~~price~~cost and availability of ~~commodities, including supplier freight charges~~credit and ~~restaurant distribution expenses, and other impacts of inflation;~~interest rates;

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

(vi)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;

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BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

~~(vi)~~(vii)~~Economic conditions and their effects on consumer confidence and discretionary spending, consumer traffic,~~Fluctuations in the ~~cost~~price and availability of ~~credit~~commodities, including supplier freight charges and ~~interest rates;~~

~~(vii)Our ability~~restaurant distribution expenses, and other impacts of inflation and our dependence on a limited number of suppliers and distributors to ~~recruit~~meet our beef, chicken and ~~retain high-quality leadership, restaurant-level management and team members;~~other major product supply needs;

(viii)The severity, extent and duration of a health 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 in this Report, and the responses of domestic and foreign federal, state and local governments to the pandemic;

(ix)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;

(xi)Our ability to comply with new environmental, social and governance (“ESG”) requirements or our failure to achieve any goals, targets or objectives with respect to ESG matters;

(xii)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;

(xiii)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;~~restaurants, and our cost savings plans to enable reinvestment in our business, due to uncertainty with respect to macroeconomic conditions and the efficiency that may be added by the actions we take;

(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.~~25, 2022.

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

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BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

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.

~~Table of Contents~~

~~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 June ~~26, 2022,~~25, 2023, we owned and operated ~~1,169~~1,187 full-service restaurants and off-premises only kitchens and franchised ~~332~~298 full-service restaurants and off-premises only kitchens across 47 states, Guam and 1513 countries. We have four founder-inspired concepts: Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar.

~~Financial Highlights~~

Financial Overview -

Our financial ~~highlights~~overview for the thirteen weeks ended June ~~26, 2022 include~~25, 2023 includes the following:

•U.S. combined and Outback Steakhouse comparable restaurant sales of ~~(0.4)%~~0.8% and ~~(1.1)%~~0.6%, respectively;

•Increase in Total revenues of ~~4.4%~~2.4%, as compared to the second quarter of ~~2021;~~2022;

•Operating income and restaurant-level operating margins of 7.8% and ~~15.5%~~16.4%, respectively, as compared to ~~11.6%~~7.8% and ~~20.3%~~15.5%, respectively, for the second quarter of ~~2021;~~2022;

•~~Income from operations~~Operating income of ~~$87.7~~$89.4 million, as compared to ~~$124.6~~$87.7 million in the second quarter of ~~2021;~~

•~~Loss on extinguishment of debt of $104.7 million and loss on fair value adjustment of derivatives, net, of $17.7 million in connection with the 2025 Notes Partial Repurchase;~~2022; and

•Diluted earnings per share of $0.70 as compared to diluted loss per share of $(0.72)~~, as compared to diluted earnings per share of $0.75~~ for the second quarter of ~~2021.~~2022.

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)~~breakage and the benefit of value added tax exemptions in Brazil) per restaurant to measure changes in customer traffic, pricing and development of the ~~brand;~~brand.

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

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

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

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BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

are not included in restaurant-level 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;

(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 Income (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 income (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;~~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 these 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.

~~Table of Contents~~

~~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): JUNE 26, 2022 JUNE 27, 2021
U.S.
Outback Steakhouse
Company-owned 563 566
Franchised 130 131
Total 693 697
Carrabba’s Italian Grill
Company-owned 198 199
Franchised 19 20
Total 217 219
Bonefish Grill
Company-owned 174 179
Franchised 7 7
Total 181 186
Fleming’s Prime Steakhouse & Wine Bar
Company-owned 64 64
Aussie Grill
Company-owned (1) 5 4
U.S. total 1,160 1,170
International
Company-owned
Outback Steakhouse - Brazil (2) 129 113
Other (1)(2)(3) 33 33
Franchised
Outback Steakhouse - South Korea (1) 77 76
Other (3) 50 55
International total 289 277
System-wide total 1,449 1,447
System-wide total - Company-owned 1,166 1,158
System-wide total - Franchised 283 289

~~____________________~~

~~(1)Previously presented restaurant counts as of 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 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 June 26, 2022 and June 27, 2021. International Franchised Other included three Aussie Grill locations as of June 26, 2022 and June 27, 2021.

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

Number of kitchens (at end of the period) (1): JUNE 26, 2022 JUNE 27, 2021
U.S.
Company-owned 2 4
International
Company-owned 1 1
Franchised - South Korea 49 32
System-wide total 52 37

~~____________________~~

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

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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):	JUNE 25, 2023	JUNE 26, 2022
U.S.
Outback Steakhouse
Company-owned	562	563
Franchised	127	130
Total	689	693
Carrabba’s Italian Grill
Company-owned	199	198
Franchised	19	19
Total	218	217
Bonefish Grill
Company-owned	170	174
Franchised	5	7
Total	175	181
Fleming’s Prime Steakhouse & Wine Bar
Company-owned	64	64
Aussie Grill
Company-owned	7	5
U.S. total	1,153	1,160
International
Company-owned
Outback Steakhouse - Brazil (1)	148	129

Other (1)(2)	36	33
Franchised
Outback Steakhouse - South Korea	92	77
Other (2)	46	50
International total	322	289
System-wide total	1,475	1,449
System-wide total - Company-owned	1,186	1,166
System-wide total - Franchised	289	283

____________________

(1)The restaurant counts for Brazil, including Abbraccio and Aussie Grill restaurants within International Company-owned Other, are reported as of May 31, 2023 and 2022, respectively, to correspond with the balance sheet dates of this subsidiary.

(2)International Company-owned Other included four and two Aussie Grill locations as of June 25, 2023 and June 26, 2022, respectively. International Franchised Other included three Aussie Grill locations as of June 25, 2023 and June 26, 2022.

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


Number of kitchens (at end of the period) (1):	JUNE 25, 2023	JUNE 26, 2022
U.S.
Company-owned	1	2


International
Company-owned	—	1
Franchised - South Korea	9	49


System-wide total	10	52

____________________

(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 Restaurant sales or Total revenues ~~or Restaurant sales,~~ for the periods indicated:


		THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED					THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
		JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021			JUNE 25, 2023		JUNE 26, 2022		JUNE 25, 2023		JUNE 26, 2022
Revenues	Revenues									Revenues
Restaurant sales	Restaurant sales	98.6	%	97.9	%	98.5	%	98.5	%	Restaurant sales	98.7	%	98.6	%	98.7	%	98.5	%
Franchise and other revenues	Franchise and other revenues	1.4		2.1		1.5		1.5		Franchise and other revenues	1.3		1.4		1.3		1.5
Total revenues	Total revenues	100.0		100.0		100.0		100.0		Total revenues	100.0		100.0		100.0		100.0
Costs and expenses	Costs and expenses									Costs and expenses
Food and beverage costs (1)		32.9		29.6		32.4		29.7
Food and beverage (1)										Food and beverage (1)	30.9		32.9		31.1		32.4
Labor and other related (1)	Labor and other related (1)	27.8		28.0		27.8		28.0		Labor and other related (1)	28.7		27.8		28.2		27.8
Other restaurant operating (1)	Other restaurant operating (1)	23.8		22.1		23.4		22.7		Other restaurant operating (1)	24.0		23.8		23.5		23.4
Depreciation and amortization	Depreciation and amortization	3.7		3.8		3.7		4.0		Depreciation and amortization	4.1		3.7		3.9		3.7
General and administrative	General and administrative	5.3		6.2		5.2		6.0		General and administrative	5.5		5.3		5.4		5.2

Provision for impaired assets and restaurant closings	Provision for impaired assets and restaurant closings	*		0.5		0.1		0.4		Provision for impaired assets and restaurant closings	0.2		*		0.2		0.1

Total costs and expenses	Total costs and expenses	92.2		88.4		91.4		89.6		Total costs and expenses	92.2		92.2		91.2		91.4
Income from operations	Income from operations	7.8		11.6		8.6		10.4		Income from operations	7.8		7.8		8.8		8.6
Loss on extinguishment and modification of debt	Loss on extinguishment and modification of debt	(9.6)		(0.2)		(4.7)		(0.1)		Loss on extinguishment and modification of debt	—		(9.6)		—		(4.7)
Loss on fair value adjustment of derivatives, net	Loss on fair value adjustment of derivatives, net	(1.6)		—		(0.8)		—		Loss on fair value adjustment of derivatives, net	—		(1.6)		—		(0.8)
Other income, net		—		—		—		*

Interest expense, net	Interest expense, net	(1.1)		(1.4)		(1.2)		(1.4)		Interest expense, net	(1.2)		(1.1)		(1.1)		(1.2)
(Loss) income before provision for income taxes		(4.5)		10.0		1.9		8.9
Income (loss) before provision for income taxes										Income (loss) before provision for income taxes	6.6		(4.5)		7.7		1.9
Provision for income taxes	Provision for income taxes	1.0		2.1		1.2		1.4		Provision for income taxes	0.5		1.0		0.9		1.2
Net (loss) income		(5.5)		7.9		0.7		7.5
Net income (loss)										Net income (loss)	6.1		(5.5)		6.8		0.7
Less: net income attributable to noncontrolling interests	Less: net income attributable to noncontrolling interests	0.2		0.2		0.2		0.2		Less: net income attributable to noncontrolling interests	0.2		0.2		0.1		0.2
Net (loss) income attributable to Bloomin’ Brands		(5.7)	%	7.7	%	0.5	%	7.3	%
Net income (loss) attributable to Bloomin’ Brands										Net income (loss) attributable to Bloomin’ Brands	5.9	%	(5.7)	%	6.7	%	0.5	%

________________

(1)As a percentage of Restaurant sales.

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

REVENUES

Restaurant ~~sales~~

Sales -

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

(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

~~____________________~~


(dollars in millions)	THIRTEEN WEEKS ENDED		TWENTY-SIX WEEKS ENDED
For the periods ended June 26, 2022	$	1,108.9	$	2,232.5
Change from:
Restaurant openings (1)	18.0		37.6
Comparable restaurant sales (1)	11.9		87.2
Brazil value added tax exemptions (2)	9.6		19.2
Restaurant closures (1)	(6.6)		(12.0)
Effect of foreign currency translation	(4.5)		1.1

For the periods ended June 25, 2023	$	1,137.3	$	2,365.6

________________

(1)Summation of quarterly changes for restaurant openings, closures 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 or closed.

(2)See Note 12 - Income Taxes of the Notes to Consolidated Financial Statements for details regarding value added tax exemptions in connection with Brazil tax legislation.

Table of Contents

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~~25, 2023 was primarily due to: (i) ~~higher comparable restaurant sales, primarily in Brazil, (ii)~~ the opening of 4250 new restaurants not included in our comparable restaurant sales base, (ii) higher comparable restaurant sales, primarily driven by increases in menu pricing, and (iii) value added tax exemptions in Brazil. The increase was partially offset by the closure of 18 restaurants since March 27, 2022 and the effect of foreign currency translation of the Brazilian Real relative to the U.S. dollar. ~~The increase in Restaurant sales was partially offset by the closure of 21 restaurants since March 28, 2021.~~

The increase in Restaurant sales during the twenty-six weeks ended June ~~26, 2022~~25, 2023 was primarily due to: (i) higher comparable restaurant sales, primarily ~~attributable to~~driven by increases in ~~average check per person,~~menu pricing, (ii) the opening of 4555 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.~~value added tax exemptions in Brazil. The increase in Restaurant sales was partially offset by the closure of 2224 restaurants since December ~~27, 2020.~~26, 2021.

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				TWENTY-SIX WEEKS ENDED			THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
		JUNE 26, 2022		JUNE 27, 2021			JUNE 26, 2022			JUNE 27, 2021			JUNE 25, 2023		JUNE 26, 2022		JUNE 25, 2023		JUNE 26, 2022
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	$	77,941	$	78,201		$	79,246		$	75,813	Outback Steakhouse	$	78,321	$	77,941	$	81,421	$	79,246
Carrabba’s Italian Grill	Carrabba’s Italian Grill	$	66,016	$	66,258		$	66,954		$	63,605	Carrabba’s Italian Grill	$	68,290	$	66,016	$	70,489	$	66,954
Bonefish Grill	Bonefish Grill	$	64,113	$	63,772		$	65,193		$	59,014	Bonefish Grill	$	64,671	$	64,113	$	67,427	$	65,193
Fleming’s Prime Steakhouse & Wine Bar	Fleming’s Prime Steakhouse & Wine Bar	$	112,900	$	105,891		$	115,141		$	93,204	Fleming’s Prime Steakhouse & Wine Bar	$	109,882	$	112,900	$	115,754	$	115,141
International	International											International
Outback Steakhouse - Brazil (1)	Outback Steakhouse - Brazil (1)	$	61,210	$	29,569		$	57,645		$	36,205	Outback Steakhouse - Brazil (1)	$	58,306	$	61,210	$	60,670	$	57,645

Operating weeks:	Operating weeks:											Operating weeks:
U.S.	U.S.											U.S.
Outback Steakhouse	Outback Steakhouse	7,317		7,362			14,637			14,745		Outback Steakhouse	7,321		7,317		14,679		14,637
Carrabba’s Italian Grill	Carrabba’s Italian Grill	2,578		2,587			5,165			5,174		Carrabba’s Italian Grill	2,587		2,578		5,174		5,165
Bonefish Grill	Bonefish Grill	2,269		2,337			4,554			4,677		Bonefish Grill	2,218		2,269		4,466		4,554
Fleming’s Prime Steakhouse & Wine Bar	Fleming’s Prime Steakhouse & Wine Bar	832		832			1,664			1,657		Fleming’s Prime Steakhouse & Wine Bar	845		832		1,690		1,664
International	International											International
Outback Steakhouse - Brazil	Outback Steakhouse - Brazil	1,644		1,465			3,226			2,877		Outback Steakhouse - Brazil	1,891		1,644		3,679		3,226

____________________

(1)Translated at average exchange rates of ~~4.89~~5.06 and ~~5.45~~4.89 for the thirteen weeks ended June 25, 2023 and June 26, 2022, ~~and June 27, 2021,~~ respectively, and ~~5.15~~5.14 and ~~5.36~~5.15 for the twenty-six weeks ended June 25, 2023 and June 26, 2022, ~~and June 27, 2021,~~ respectively. Excludes the benefit of the Brazil value added tax exemptions discussed in Note 12 - Income Taxes of the Notes to Consolidated Financial Statements.

3327

Table of Contents

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 Increases (Decreases) ~~Increases~~

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


		THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED					THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
		JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021			JUNE 25, 2023		JUNE 26, 2022		JUNE 25, 2023		JUNE 26, 2022

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 (restaurants open 18 months or more):										Comparable restaurant sales (restaurants open 18 months or more):
U.S. (1)	U.S. (1)									U.S. (1)
Outback Steakhouse	Outback Steakhouse	(1.1)	%	65.8	%	3.9	%	28.8	%	Outback Steakhouse	0.6	%	(1.1)	%	2.8	%	3.9	%
Carrabba’s Italian Grill	Carrabba’s Italian Grill	(1.0)	%	84.3	%	5.0	%	38.4	%	Carrabba’s Italian Grill	3.5	%	(1.0)	%	5.1	%	5.0	%
Bonefish Grill	Bonefish Grill	(1.1)	%	141.2	%	9.2	%	43.5	%	Bonefish Grill	0.5	%	(1.1)	%	3.4	%	9.2	%
Fleming’s Prime Steakhouse & Wine Bar	Fleming’s Prime Steakhouse & Wine Bar	6.0	%	182.6	%	23.1	%	55.6	%	Fleming’s Prime Steakhouse & Wine Bar	(2.5)	%	6.0	%	0.4	%	23.1	%
Combined U.S.	Combined U.S.	(0.4)	%	84.6	%	6.4	%	34.4	%	Combined U.S.	0.8	%	(0.4)	%	3.1	%	6.4	%
International	International									International
Outback Steakhouse - Brazil (2)	Outback Steakhouse - Brazil (2)	95.7	%	78.8	%	61.1	%	2.7	%	Outback Steakhouse - Brazil (2)	4.1	%	95.7	%	9.1	%	61.1	%

Traffic:	Traffic:									Traffic:
U.S.	U.S.									U.S.
Outback Steakhouse	Outback Steakhouse	(8.7)	%	51.4	%	(5.0)	%	21.9	%	Outback Steakhouse	(5.4)	%	(8.7)	%	(3.5)	%	(5.0)	%
Carrabba’s Italian Grill	Carrabba’s Italian Grill	(7.5)	%	57.2	%	(2.5)	%	27.0	%	Carrabba’s Italian Grill	(0.8)	%	(7.5)	%	0.5	%	(2.5)	%
Bonefish Grill	Bonefish Grill	(8.6)	%	52.4	%	(1.0)	%	22.4	%	Bonefish Grill	(4.4)	%	(8.6)	%	(2.0)	%	(1.0)	%
Fleming’s Prime Steakhouse & Wine Bar	Fleming’s Prime Steakhouse & Wine Bar	(2.9)	%	97.0	%	11.1	%	33.5	%	Fleming’s Prime Steakhouse & Wine Bar	(2.3)	%	(2.9)	%	(1.1)	%	11.1	%
Combined U.S.	Combined U.S.	(8.3)	%	53.6	%	(3.5)	%	23.2	%	Combined U.S.	(4.2)	%	(8.3)	%	(2.4)	%	(3.5)	%
International	International									International
Outback Steakhouse - Brazil	Outback Steakhouse - Brazil	57.8	%	63.0	%	42.0	%	8.9	%	Outback Steakhouse - Brazil	(4.0)	%	57.8	%	(0.9)	%	42.0	%

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	7.6	%	14.4	%	8.9	%	6.9	%	Outback Steakhouse	6.0	%	7.6	%	6.3	%	8.9	%
Carrabba’s Italian Grill	Carrabba’s Italian Grill	6.5	%	27.1	%	7.5	%	11.4	%	Carrabba’s Italian Grill	4.3	%	6.5	%	4.6	%	7.5	%
Bonefish Grill	Bonefish Grill	7.5	%	88.8	%	10.2	%	21.1	%	Bonefish Grill	4.9	%	7.5	%	5.4	%	10.2	%
Fleming’s Prime Steakhouse & Wine Bar	Fleming’s Prime Steakhouse & Wine Bar	8.9	%	85.6	%	12.0	%	22.1	%	Fleming’s Prime Steakhouse & Wine Bar	(0.2)	%	8.9	%	1.5	%	12.0	%
Combined U.S.	Combined U.S.	7.9	%	31.0	%	9.9	%	11.2	%	Combined U.S.	5.0	%	7.9	%	5.5	%	9.9	%
International	International									International
Outback Steakhouse - Brazil	Outback Steakhouse - Brazil	37.3	%	22.2	%	19.2	%	(4.5)	%	Outback Steakhouse - Brazil	8.5	%	37.3	%	10.0	%	19.2	%

____________________

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

(2)Includes trading day impact from calendar period reporting. Excludes the effect of fluctuations in foreign currency ~~rates. Includes trading day impact from calendar period reporting.~~rates and the benefit of the Brazil value added tax exemptions discussed in Note 12 - Income Taxes of the Notes to Consolidated Financial Statements.

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

Franchise and other revenues


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in millions)	JUNE 25, 2023		JUNE 26, 2022		JUNE 25, 2023		JUNE 26, 2022
Franchise revenues	$	12.6	$	12.6	$	26.1	$	26.0
Other revenues	2.8		3.6		5.8		7.2
Franchise and other revenues	$	15.4	$	16.2	$	31.9	$	33.2

Table of Contents

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

~~Franchise and other revenues~~

THIRTEEN WEEKS ENDED 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								TWENTY-SIX WEEKS ENDED									THIRTEEN WEEKS ENDED								TWENTY-SIX WEEKS ENDED
(dollars in millions)	(dollars in millions)	JUNE 26, 2022			JUNE 27, 2021			CHANGE		JUNE 26, 2022			JUNE 27, 2021			CHANGE		(dollars in millions)	JUNE 25, 2023			JUNE 26, 2022			CHANGE		JUNE 25, 2023			JUNE 26, 2022			CHANGE
Food and beverage costs		$	364.5		$	312.1				$	723.8		$	604.0
Food and beverage																		Food and beverage	$	351.2		$	364.5				$	735.4		$	723.8
% of Restaurant sales	% of Restaurant sales	32.9		%	29.6		%	3.3	%	32.4		%	29.7		%	2.7	%	% of Restaurant sales	30.9		%	32.9		%	(2.0)	%	31.1		%	32.4		%	(1.3)	%

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 twenty-six weeks ended June 26, 2022~~as compared to the twenty-six weeks ended June 27, 2021 primarily due to 4.2% from commodity inflation, partially offset by a decrease as a percentage of Restaurant sales of 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 TWENTY-SIX WEEKS ENDED
(dollars in millions) JUNE 26, 2022 JUNE 27, 2021 CHANGE JUNE 26, 2022 JUNE 27, 2021 CHANGE
Labor and other related $ 308.8 $ 295.0 $ 621.3 $ 569.6
% 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 June ~~26, 2022~~25, 2023 as compared to the thirteen weeks ended June ~~27, 2021~~26, 2022 primarily due ~~to: (i) 2.3%~~to 2.4% 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 driven by an increase in menu pricing and ~~(ii) 0.5%~~0.3% from the impact of certain cost saving initiatives. These decreases were partially offset by an increase as a percentage of Restaurant sales of ~~2.9%~~0.9% from ~~higher labor costs primarily due to wage rate~~commodity inflation.

~~Labor~~Food and ~~other related expenses~~beverage costs decreased as a percentage of Restaurant sales during the twenty-six weeks ended June ~~26, 2022~~25, 2023 as compared to the twenty-six weeks ended June ~~27, 2021~~26, 2022 primarily due ~~to: (i) 2.1%~~to 2.3% from ~~leveraging increased restaurant sales due to~~ increases in average check per person driven by an increase in menu pricing and ~~the net benefit of lapping the impact of COVID-19, primarily in Brazil, and (ii) 0.4%~~0.3% from the impact of certain cost saving initiatives. These decreases were partially offset by an increase as a percentage of Restaurant sales of 1.5% from commodity inflation.

Labor and other related expenses


	THIRTEEN WEEKS ENDED								TWENTY-SIX WEEKS ENDED
(dollars in millions)	JUNE 25, 2023			JUNE 26, 2022			CHANGE		JUNE 25, 2023			JUNE 26, 2022			CHANGE
Labor and other related	$	325.9		$	308.8				$	667.5		$	621.3
% of Restaurant sales	28.7		%	27.8		%	0.9	%	28.2		%	27.8		%	0.4	%

Labor and other related expenses increased as a percentage of Restaurant sales during the thirteen weeks ended June 25, 2023 as compared to the thirteen weeks ended June 26, 2022 primarily due to an increase of 1.9% from higher hourly and field management labor costs, primarily due to wage rate inflation. This increase was partially offset by decreases as a percentage of Restaurant sales of 1.0% from leveraging increased comparable restaurant sales and 0.2% from the impact of certain cost saving initiatives.

Labor and other related expenses increased as a percentage of Restaurant sales during the twenty-six weeks ended June 25, 2023 as compared to the twenty-six weeks ended June 26, 2022 primarily due to an increase of 1.7% from higher hourly and field management labor costs, primarily due to wage rate inflation. This increase was partially offset by decreases as a percentage of Restaurant sales of 1.2% from leveraging increased comparable restaurant sales and 0.2% from the impact of certain cost saving initiatives.

Other restaurant operating expenses


	THIRTEEN WEEKS ENDED								TWENTY-SIX WEEKS ENDED
(dollars in millions)	JUNE 25, 2023			JUNE 26, 2022			CHANGE		JUNE 25, 2023			JUNE 26, 2022			CHANGE
Other restaurant operating	$	273.3		$	263.5				$	556.3		$	522.6
% of Restaurant sales	24.0		%	23.8		%	0.2	%	23.5		%	23.4		%	0.1	%

Other restaurant operating expenses increased as a percentage of Restaurant sales during the thirteen weeks ended June 25, 2023 as compared to the thirteen weeks ended June 26, 2022 primarily due to 1.1% from higher operating expenses including utilities, primarily due to inflation, and 0.3% from higher advertising expense. These increases were offset by decreases as a percentage of Restaurant sales of 0.7% from leveraging increased comparable restaurant sales and 0.2% from the impact of certain cost saving initiatives.

3529

Table of Contents

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

~~were partially offset by an increase as a percentage of Restaurant sales of 2.5% from higher labor cost primarily due to wage rate 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 0.6% from higher advertising 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~~25, 2023 as compared to the twenty-six weeks ended June ~~27, 2021~~26, 2022 primarily due to ~~1.9%~~1.3% from higher operating expenses including utilities, primarily due to inflation, and ~~0.6%~~0.3% from higher advertising ~~expense, partially~~expense. These increases were offset by ~~a decrease~~decreases as a percentage of Restaurant sales of ~~1.9%~~1.1% from leveraging increased comparable restaurant sales ~~due to increases in average check per person~~ and ~~the net benefit of lapping~~0.2% from the impact of ~~COVID-19,~~certain cost saving initiatives.

Depreciation and amortization


	THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
(dollars in millions)	JUNE 25, 2023		JUNE 26, 2022		CHANGE		JUNE 25, 2023		JUNE 26, 2022		CHANGE
Depreciation and amortization	$	47.6	$	41.3	$	6.3	$	93.9	$	83.0	$	10.9

Depreciation and amortization increased during the thirteen and twenty-six weeks ended June 25, 2023 as compared to the thirteen and twenty-six weeks ended June 26, 2022 primarily ~~in Brazil.~~due to additional depreciation expense related to technology projects and restaurant development.

General and administrative

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


(dollars in millions)	(dollars in millions)	THIRTEEN WEEKS ENDED		TWENTY-SIX WEEKS ENDED		(dollars in millions)	THIRTEEN WEEKS ENDED		TWENTY-SIX WEEKS ENDED
For the periods ended June 27, 2021		$	66.5	$	123.7
For the periods ended June 26, 2022						For the periods ended June 26, 2022	$	59.2	$	117.9
Change from:	Change from:					Change from:

Incentive compensation	Incentive compensation	(6.1)		(7.6)		Incentive compensation	2.2		3.7
Employee stock-based compensation		(4.8)		(4.7)
Compensation, benefits and payroll tax						Compensation, benefits and payroll tax	0.8		3.4
Travel and entertainment						Travel and entertainment	0.5		1.7
Legal and professional fees						Legal and professional fees	0.3		3.3

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

Other						Other	0.4		(0.8)
For the periods ended June 25, 2023						For the periods ended June 25, 2023	$	63.4	$	129.2

~~Provision for impaired assets and restaurant closings~~Income from operations


		THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED							THIRTEEN WEEKS ENDED									TWENTY-SIX WEEKS ENDED
(dollars in millions)	(dollars in millions)	JUNE 26, 2022		JUNE 27, 2021		CHANGE		JUNE 26, 2022		JUNE 27, 2021		CHANGE		(dollars in millions)	JUNE 25, 2023			JUNE 26, 2022			CHANGE			JUNE 25, 2023			JUNE 26, 2022			CHANGE
Provision for impaired assets and restaurant closings		$	0.2	$	5.2	$	(5.0)	$	2.0	$	7.4	$	(5.4)
Income from operations														Income from operations	$	89.4		$	87.7		$	1.7		$	210.1		$	195.0		$	15.1
% of Total revenues														% of Total revenues	7.8		%	7.8		%	—		%	8.8		%	8.6		%	0.2		%

~~Impairment and closure charges~~The increase in Income from operations generated during the ~~periods presented resulted~~thirteen weeks ended June 25, 2023 as compared to the thirteen weeks ended June 26, 2022 was primarily ~~from locations identified for closure.~~due to: (i) leveraging increased comparable restaurant sales, (ii) the impact of certain cost saving initiatives and (iii) value added tax exemptions in Brazil. These increases were partially offset by: (i) higher labor costs, primarily due to wage rate inflation, (ii) higher operating expenses including utilities, primarily due to inflation, (iii) commodity inflation and (iv) higher depreciation and advertising expense.

The increase in Income from operations generated during the twenty-six weeks ended June 25, 2023 as compared to the twenty-six weeks ended June 26, 2022 was primarily due to: (i) leveraging increased comparable restaurant sales, (ii) the impact of certain cost saving initiatives and (iii) value added tax exemptions in Brazil. These increases were partially offset by: (i) higher labor costs, primarily due to wage rate inflation, (ii) commodity inflation, (iii)

Table of Contents

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, and (iv) higher depreciation and 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.expense.

~~The decrease in Income from operations generated during~~Operating income margin during the thirteen and twenty-six weeks ended June ~~26, 2022 as compared~~25, 2023 includes net increases of approximately 0.4% and 0.3%, respectively, attributable to exemptions from Brazil federal value added taxes (PIS and COFINS) provided by Brazil tax legislation. See Note 12 - Income Taxes of the ~~twenty-six weeks ended June 27, 2021 was primarily due to: (i) commodity inflation, (ii) higher labor costs primarily due~~Notes 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 inConsolidated Financial Statements for further discussion regarding Brazil ~~and (iii) the impact of certain cost saving initiatives.~~tax legislation.

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

In connection with the partial repurchase of our 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 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 %


	THIRTEEN WEEKS ENDED									TWENTY-SIX WEEKS ENDED
(dollars in millions)	JUNE 25, 2023			JUNE 26, 2022			CHANGE			JUNE 25, 2023			JUNE 26, 2022			CHANGE
Income (loss) before provision for income taxes	$	76.5		$	(50.1)		$	126.6		$	184.7		$	43.5		$	141.2
Provision for income taxes	$	6.5		$	11.5		$	(5.0)		$	21.2		$	27.5		$	(6.3)
Effective income tax rate	8.5		%	(23.0)		%	31.5		%	11.5		%	63.2		%	(51.7)		%

The effective income tax rate for the thirteen weeks ended June 25, 2023 changed by 31.5 percentage points as compared to the thirteen weeks ended June 26, ~~2022 includes~~2022. This change is primarily due to the ~~impact of nondeductible~~non-deductible losses associated with the 2025 Notes Partial Repurchase which, relative to ~~a pre-tax book loss~~the Loss before provision for income taxes during the ~~quarter,~~thirteen weeks ended June 26, 2022, resulted in a negative effective income tax rate. This change was partially offset by a reduction in the effective income tax rate during the thirteen weeks ended June 25, 2023 from benefits of Brazil tax legislation that include a temporary reduction in the Brazilian income tax rate from 34% to 0% and the revaluation of Brazilian deferred tax assets and liabilities as a result of the May 2023 Brazil tax legislation.

The effective income tax rate for the twenty-six weeks ended June ~~26, 2022 increased~~25, 2023 decreased by ~~47.3~~51.7 percentage points as compared to the twenty-six weeks ended June ~~27, 2021.~~26, 2022. The ~~increase~~decrease was primarily due to the benefits of Brazil tax legislation that include a temporary reduction in the Brazilian income tax rate from 34% to 0% for the twenty-six weeks ended June 25, 2023, and the non-deductible losses

associated with the 2025 Notes Partial Repurchase recorded during the twenty-six weeks ended June 26, 2022.

See Note 12 - Income Taxes of the Notes to Consolidated Financial Statements for further discussion regarding Brazil tax legislation.

3731

Table of Contents

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

SEGMENT PERFORMANCE

The following is a summary of reporting segments:

REPORTABLE SEGMENT (1)

CONCEPT

GEOGRAPHIC LOCATION

U.S.

Outback Steakhouse

United States of America

Carrabba’s Italian Grill

Bonefish Grill

Fleming’s Prime Steakhouse & Wine Bar

International

Outback Steakhouse

Brazil, Hong Kong/China

Carrabba’s Italian Grill (Abbraccio)

Brazil

_________________

(1)Includes franchise locations.

Revenues for both segments include only transactions with customers and exclude intersegment revenues. Excluded from Income 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, certain insurance expenses and certain bonus expenses.

Refer to Note 1614 - 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~~non-GAAP measure 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							THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
(dollars in thousands)	(dollars in thousands)	JUNE 26, 2022			JUNE 27, 2021			JUNE 26, 2022			JUNE 27, 2021			(dollars in thousands)	JUNE 25, 2023			JUNE 26, 2022			JUNE 25, 2023			JUNE 26, 2022
Revenues	Revenues													Revenues
Restaurant sales	Restaurant sales	$	985,927		$	990,293		$	2,009,562		$	1,890,352		Restaurant sales	$	993,438		$	985,927		$	2,074,007		$	2,009,562
Franchise and other revenues	Franchise and other revenues	12,700			12,765			25,472			17,624			Franchise and other revenues	11,791			12,700			24,218			25,472
Total revenues	Total revenues	$	998,627		$	1,003,058		$	2,035,034		$	1,907,976		Total revenues	$	1,005,229		$	998,627		$	2,098,225		$	2,035,034

Restaurant-level operating margin		15.1		%	21.7		%	16.3		%	20.5		%
Income from operations	Income from operations	$	104,620		$	165,297		$	236,846		$	287,032		Income from operations	$	103,008		$	104,620		$	236,251		$	236,846
Operating income margin	Operating income margin	10.5		%	16.5		%	11.6		%	15.0		%	Operating income margin	10.2		%	10.5		%	11.3		%	11.6		%
Restaurant-level operating income														Restaurant-level operating income	$	154,856		$	149,304		$	342,664		$	327,019
Restaurant-level operating margin														Restaurant-level operating margin	15.6		%	15.1		%	16.5		%	16.3		%

3832

Table of Contents

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Restaurant sales

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

(dollars in millions) 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

~~____________________~~


(dollars in millions)	THIRTEEN WEEKS ENDED		TWENTY-SIX WEEKS ENDED (1)
For the periods ended June 26, 2022	$	985.9	$	2,009.6
Change from:
Restaurant openings	8.1		19.4
Comparable restaurant sales	6.0		57.0
Restaurant closures	(6.6)		(12.0)

For the periods ended June 25, 2023	$	993.4	$	2,074.0

________________

(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~~increase in U.S. Restaurant sales during the thirteen weeks ended June ~~26, 2022~~25, 2023 was primarily due to the ~~closure of 21 restaurants since March 28, 2021, partially offset by the~~ opening of 1415 new restaurants not included in our comparable restaurant sales ~~base.~~base and higher comparable restaurant sales, primarily driven by increases in menu pricing. The increase was partially offset by the closure of 17 restaurants since March 27, 2022.

The increase in U.S. Restaurant sales during the twenty-six weeks ended June ~~26, 2022~~25, 2023 was primarily due ~~to: (i)~~to higher comparable restaurant sales, primarily ~~attributable to~~driven by increases in ~~average check per person~~menu pricing, and ~~(ii)~~ the opening of 1517 new restaurants not included in our comparable restaurant sales base. The increase in ~~U.S.~~ Restaurant sales was partially offset by the closure of 2223 restaurants since December ~~27, 2020.~~26, 2021.

Income from operations

~~The decrease in~~ U.S. Income from operations generated during the thirteen ~~and twenty-six~~weeks ended June 25, 2023 as compared to the thirteen weeks ended June 26, 2022 ~~as compared to the thirteen and twenty-six weeks ended June 27, 2021 was~~decreased slightly primarily due to: (i) ~~commodity inflation, (ii)~~ higher labor ~~cost~~costs, primarily due to wage rate inflation, ~~(iii)~~(ii) higher operating expenses including utilities, primarily due to inflation, (iii) commodity inflation and (iv) higher depreciation and advertising expense. These decreases were partially offset by: (i) ~~increases~~an increase in ~~average check per person~~comparable restaurant sales and (ii) the impact of certain cost saving initiatives.

U.S. Income from operations generated during the twenty-six weeks ended June 25, 2023 as compared to the twenty-six weeks ended June 26, 2022 was flat primarily due to: (i) higher labor costs, primarily due to wage rate inflation, (ii) commodity inflation, (iii) higher operating expenses including utilities, primarily due to inflation, and (iv) higher depreciation and advertising expense. These decreases were partially offset by: (i) an increase in comparable restaurant sales and (ii) the impact of certain cost saving initiatives.

International Segment


		THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED							THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
(dollars in thousands)	(dollars in thousands)	JUNE 26, 2022			JUNE 27, 2021			JUNE 26, 2022			JUNE 27, 2021			(dollars in thousands)	JUNE 25, 2023			JUNE 26, 2022			JUNE 25, 2023			JUNE 26, 2022
Revenues	Revenues													Revenues
Restaurant sales	Restaurant sales	$	122,991		$	64,934		$	222,931		$	144,326		Restaurant sales	$	143,892		$	122,991		$	291,557		$	222,931
Franchise and other revenues	Franchise and other revenues	3,544			9,374			7,732			12,537			Franchise and other revenues	3,573			3,544			7,658			7,732
Total revenues	Total revenues	$	126,535		$	74,308		$	230,663		$	156,863		Total revenues	$	147,465		$	126,535		$	299,215		$	230,663

Restaurant-level operating margin		17.8		%	3.2		%	17.4		%	9.3		%
Income from operations	Income from operations	$	14,126		$	2,470		$	23,010		$	6,007		Income from operations	$	20,486		$	14,126		$	44,994		$	23,010
Operating income margin	Operating income margin	11.2		%	3.3		%	10.0		%	3.8		%	Operating income margin	13.9		%	11.2		%	15.0		%	10.0		%
Restaurant-level operating income														Restaurant-level operating income	$	29,673		$	21,933		$	63,688		$	38,868
Restaurant-level operating margin														Restaurant-level operating margin	20.6		%	17.8		%	21.8		%	17.4		%

3933

Table of Contents

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Restaurant sales

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

(dollars in millions) 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
~~____________________~~


(dollars in millions)	THIRTEEN WEEKS ENDED		TWENTY-SIX WEEKS ENDED
For the periods ended June 26, 2022	$	123.0	$	222.9
Change from:
Restaurant openings (1)	9.9		18.2
Brazil value added tax exemptions (2)	9.6		19.2
Comparable restaurant sales (1)	5.9		30.2
Effect of foreign currency translation	(4.5)		1.1
For the periods ended June 25, 2023	$	143.9	$	291.6

________________

(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.

(2)See Note 12 - Income Taxes of the Notes to Consolidated Financial Statements for details regarding value added tax exemptions in connection with Brazil tax legislation.

The increase in international Restaurant sales during the thirteen weeks ended June ~~26, 2022~~25, 2023 was primarily due to: (i) the opening of 35 new restaurants not included in our comparable restaurant sales base, (ii) value added tax exemptions in Brazil and (iii) higher comparable restaurant sales in Brazil ~~(ii)~~and Hong Kong. The increase was partially offset by the effect of foreign currency translation of the Brazilian Real relative to the U.S. ~~dollar and (iii) the opening of 28 new restaurants not included in our comparable restaurant sales base.~~dollar.

The increase in international Restaurant sales during the twenty-six weeks ended June ~~26, 2022~~25, 2023 was primarily due to: (i) higher comparable restaurant sales in Brazil and Hong Kong, primarily driven by the lapping of Q1 2022 COVID-19 related capacity restrictions, (ii) value added tax exemptions in Brazil and (iii) the opening of 3038 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.~~base.

Income from operations

The increase in international Income from operations generated during the thirteen weeks ended June 25, 2023 as compared to the thirteen weeks ended June 26, 2022 was primarily due to: (i) an increase in restaurant sales, primarily driven by increases in menu pricing, and (ii) value added tax exemptions in Brazil. These increases were partially offset by decreases primarily due to: (i) higher operating costs, (ii) higher labor costs, primarily due to wage rate inflation, (iii) commodity inflation and (iv) higher advertising expense.

The increase in international Income from operations generated during the twenty-six weeks ended June 25, 2023 as compared to the twenty-six weeks ended June 26, 2022 ~~as compared to the thirteen and twenty-six weeks ended June 27, 2021~~ was primarily due toto: (i) an increase in ~~restaurant-level operating margin, which includes: (i)~~restaurant sales, primarily driven by the recovery of in-restaurant dining and increases in ~~Brazil and the net impact of the COVID-19 pandemic during 2021,~~menu pricing, and (ii) value added tax exemptions in Brazil. These increases ~~in average check per person,~~were partially offset by decreases primarily due to: (i) higher operating costs, (ii) higher labor costs, primarily due to wage rate inflation, (iii) 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.inflation and (iv) higher advertising expense.

4034

Table of Contents

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Non-GAAP Financial Measures

~~Restaurant-level~~Consolidated restaurant-level operating income and corresponding margin non-GAAP reconciliations - The following table reconciles consolidated Income from operations and the corresponding margin to restaurant-level operating income and the corresponding margin for the periods indicated:


Consolidated	THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 25, 2023			JUNE 26, 2022			JUNE 25, 2023			JUNE 26, 2022
Income from operations	$	89,446		$	87,719		$	210,079		$	194,975
Operating income margin	7.8		%	7.8		%	8.8		%	8.6		%
Less:
Franchise and other revenues	15,364			16,244			31,876			33,204
Plus:
Depreciation and amortization	47,565			41,257			93,867			83,032
General and administrative	63,358			59,246			129,162			117,920
Provision for impaired assets and restaurant closings	1,827			193			5,151			2,032
Restaurant-level operating income	$	186,832		$	172,171		$	406,383		$	364,755
Restaurant-level operating margin	16.4		%	15.5		%	17.2		%	16.3		%

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


Consolidated		THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
U.S.														U.S.	THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
(dollars in thousands)	(dollars in thousands)	JUNE 26, 2022			JUNE 27, 2021			JUNE 26, 2022			JUNE 27, 2021			(dollars in thousands)	JUNE 25, 2023			JUNE 26, 2022			JUNE 25, 2023			JUNE 26, 2022

Income from operations	Income from operations	$	87,719		$	124,637		$	194,975		$	215,635		Income from operations	$	103,008		$	104,620		$	236,251		$	236,846
Operating income margin	Operating income margin	7.8		%	11.6		%	8.6		%	10.4		%	Operating income margin	10.2		%	10.5		%	11.3		%	11.6		%
Less:	Less:													Less:
Franchise and other revenues	Franchise and other revenues	16,244			22,139			33,204			30,161			Franchise and other revenues	11,791			12,700			24,218			25,472
Plus:	Plus:													Plus:
Depreciation and amortization	Depreciation and amortization	41,257			40,539			83,032			81,765			Depreciation and amortization	39,376			33,545			77,539			68,303
General and administrative	General and administrative	59,246			66,462			117,920			123,710			General and administrative	22,436			23,648			47,941			47,093
Provision for impaired assets and restaurant closings	Provision for impaired assets and restaurant closings	193			5,177			2,032			7,377			Provision for impaired assets and restaurant closings	1,827			191			5,151			249
Restaurant-level operating income	Restaurant-level operating income	$	172,171		$	214,676		$	364,755		$	398,326		Restaurant-level operating income	$	154,856		$	149,304		$	342,664		$	327,019
Restaurant-level operating margin	Restaurant-level operating margin	15.5		%	20.3		%	16.3		%	19.6		%	Restaurant-level operating margin	15.6		%	15.1		%	16.5		%	16.3		%

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

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

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

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


International	THIRTEEN WEEKS ENDED						TWENTY-SIX WEEKS ENDED
(dollars in thousands)	JUNE 25, 2023			JUNE 26, 2022			JUNE 25, 2023			JUNE 26, 2022
Income from operations	$	20,486		$	14,126		$	44,994		$	23,010
Operating income margin	13.9		%	11.2		%	15.0		%	10.0		%
Less:
Franchise and other revenues	3,573			3,544			7,658			7,732
Plus:
Depreciation and amortization	6,125			6,020			12,044			11,556
General and administrative	6,635			5,331			14,308			10,259
Provision for impaired assets and restaurant closings	—			—			—			1,775
Restaurant-level operating income	$	29,673		$	21,933		$	63,688		$	38,868
Restaurant-level operating margin	20.6		%	17.8		%	21.8		%	17.4		%

4135

Table of Contents

BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

Restaurant-level operating margin non-GAAP reconciliations (continued) - The following tables present the percentages of certain operating cost financial statement line items in relation to Restaurant sales for the periods indicated:


		THIRTEEN WEEKS ENDED		THIRTEEN WEEKS ENDED
		JUNE 26, 2022			JUNE 27, 2021		JUNE 25, 2023				JUNE 26, 2022

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

Food and beverage costs		32.9	%		29.6	%
Food and beverage								Food and beverage	30.9	%		32.9	%
Labor and other related	Labor and other related	27.8	%		28.0	%		Labor and other related	28.7	%		27.8	%
Other restaurant operating	Other restaurant operating	23.8	%		22.1	%		Other restaurant operating	24.0	%		23.8	%

Restaurant-level operating margin	Restaurant-level operating margin	15.5	%		20.3	%		Restaurant-level operating margin	16.4	%		15.5	%

		TWENTY-SIX WEEKS ENDED		TWENTY-SIX WEEKS ENDED
		JUNE 26, 2022			JUNE 27, 2021		JUNE 25, 2023				JUNE 26, 2022

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

Food and beverage costs		32.4	%		29.7	%
Food and beverage								Food and beverage	31.1	%		32.4	%
Labor and other related	Labor and other related	27.8	%		28.0	%		Labor and other related	28.2	%		27.8	%
Other restaurant operating	Other restaurant operating	23.4	%		22.7	%		Other restaurant operating	23.5	%		23.4	%

Restaurant-level operating margin	Restaurant-level operating margin	16.3	%		19.6	%		Restaurant-level operating margin	17.2	%		16.3	%

Adjusted net income and adjusted diluted earnings per share non-GAAP reconciliations - The following table reconciles Net income (loss) attributable to Bloomin’ Brands to adjusted diluted earnings per share for the periods indicated:


	THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(in thousands, except share and per share data)	JUNE 25, 2023		JUNE 26, 2022		JUNE 25, 2023		JUNE 26, 2022


Net income (loss) attributable to Bloomin’ Brands	$	68,277	$	(63,635)	$	159,588	$	11,876
Adjustments:

Loss on extinguishment and modification of debt (1)	—		107,630		—		107,630
Loss on fair value adjustment of derivatives, net (1)	—		17,685		—		17,685
Total adjustments, before income taxes	—		125,315		—		125,315
Adjustment to provision for income taxes (2)	—		1,322		—		1,322
Net adjustments	—		126,637		—		126,637
Adjusted net income	$	68,277	$	63,002	$	159,588	$	138,513

Diluted earnings (loss) per share (3)	$	0.70	$	(0.72)	$	1.63	$	0.12
Adjusted diluted earnings per share (4)	$	0.74	$	0.68	$	1.72	$	1.48







Diluted weighted average common shares outstanding (3)	97,401		88,898		97,706		102,045
Adjusted diluted weighted average common shares outstanding (4)	92,399		92,863		92,789		93,792

_________________

(1)For 2022, includes losses primarily in connection with the 2025 Notes Partial Repurchase, including settlements of the related convertible senior note hedges and warrants.

(2)The tax effects of non-GAAP adjustments were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates. For 2022, the primary difference between GAAP and adjusted effective income tax rates relates to certain non-deductible losses and other tax costs associated with the 2025 Notes Partial Repurchase.

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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 TWENTY-SIX WEEKS ENDED
(in thousands, except per share data) JUNE 26, 2022 JUNE 27, 2021 JUNE 26, 2022 JUNE 27, 2021
Income from operations $ 87,719 $ 124,637 $ 194,975 $ 215,635
Operating income margin 7.8 % 11.6 % 8.6 % 10.4 %
Adjustments:
Legal and other matters (1) — (6,337) — (6,337)
Total income from operations adjustments — (6,337) — (6,337)
Adjusted income from operations $ 87,719 $ 118,300 $ 194,975 $ 209,298
Adjusted operating income margin 7.8 % 11.0 % 8.6 % 10.2 %
Diluted net (loss) income attributable to Bloomin’ Brands $ (63,635) $ 82,545 $ 11,876 $ 152,098
Convertible senior notes if-converted method interest adjustment, net of tax (2) — — — 691
Net (loss) income attributable to Bloomin’ Brands (63,635) 82,545 11,876 151,407
Adjustments:
Income from operations adjustments — (6,337) — (6,337)
Loss on extinguishment and modification of debt (3) 107,630 2,073 107,630 2,073
Loss on fair value adjustment of derivatives, net (4) 17,685 — 17,685 —
Total adjustments, before income taxes 125,315 (4,264) 125,315 (4,264)
Adjustment to provision for income taxes (5) 1,322 1,243 1,322 1,243
Net adjustments 126,637 (3,021) 126,637 (3,021)
Adjusted net income $ 63,002 $ 79,524 $ 138,513 $ 148,386
Diluted (loss) earnings per share (6) $ (0.72) $ 0.75 $ 0.12 $ 1.38
Adjusted diluted earnings per share (7) $ 0.68 $ 0.81 $ 1.48 $ 1.53
Diluted weighted average common shares outstanding (6) 88,898 109,805 102,045 110,223
Adjusted diluted weighted average common shares outstanding (7) 92,863 98,574 93,792 97,011

~~_________________~~

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

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

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

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

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

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

~~(7)~~(4)Adjusted diluted weighted average common shares outstanding was calculated excluding the dilutive effect of ~~7,774~~5,002 and ~~11,231~~7,774 shares for the thirteen weeks ended June 25, 2023 and June 26, 2022, ~~and June 27, 2021,~~ respectively, and ~~8,253~~4,917 and ~~10,442~~8,253 shares for the twenty-six weeks ended June ~~26, 2022~~25, 2023 and June ~~27, 2021,~~26, 2022, respectively, to be issued upon conversion of the 2025 Notes to satisfy the amount in excess of the principal since our convertible note hedge offsets the dilutive impact of the shares underlying the 2025 Notes. For the twenty-six weeks ended June 27, 2021, adjusted diluted weighted average common shares outstanding was also calculated assuming our February 2021 election to settle the principal portion of the 2025 Notes in cash was in effect for the entire period. For adjusted diluted earnings per share, the calculation includes 3,965 dilutive shares for the thirteen weeks ended June 26, 2022, primarily related to outstanding warrants.

~~Table~~ These shares were excluded from the calculation of ~~Contents~~GAAP diluted loss per share during the period as their effect would be antidilutive.

~~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.

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				TWENTY-SIX WEEKS ENDED					THIRTEEN WEEKS ENDED				TWENTY-SIX WEEKS ENDED
(dollars in millions)	(dollars in millions)	JUNE 26, 2022		JUNE 27, 2021		JUNE 26, 2022		JUNE 27, 2021		(dollars in millions)	JUNE 25, 2023		JUNE 26, 2022		JUNE 25, 2023		JUNE 26, 2022
U.S.	U.S.									U.S.
Outback Steakhouse	Outback Steakhouse	$	129	$	119	$	258	$	211	Outback Steakhouse	$	131	$	129	$	267	$	258
Carrabba’s Italian Grill	Carrabba’s Italian Grill	13		12		25		22		Carrabba’s Italian Grill	12		13		25		25
Bonefish Grill	Bonefish Grill	3		3		6		5		Bonefish Grill	2		3		5		6
U.S. total	U.S. total	145		134		289		238		U.S. total	145		145		297		289
International	International									International
Outback Steakhouse - South Korea	Outback Steakhouse - South Korea	65		72		143		146		Outback Steakhouse - South Korea	76		65		170		143
Other(1)	Other(1)	28		27		62		51		Other(1)	25		28		52		62
International total	International total	93		99		205		197		International total	101		93		222		205
Total franchise sales ~~(1)~~(2)	Total franchise sales ~~(1)~~(2)	$	238	$	233	$	494	$	435	Total franchise sales ~~(1)~~(2)	$	246	$	238	$	519	$	494

_____________________

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

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

Liquidity and Capital Resources

Cash and Cash Equivalents

As of June ~~26, 2022,~~25, 2023, we had ~~$95.3~~$88.8 million in cash and cash equivalents, of which ~~$41.8~~$34.3 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 June ~~26, 2022,~~25, 2023, we had aggregate ~~accumulated~~undistributed foreign earnings of approximately ~~$37.9~~$40.5 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
(dollars in thousands) TERM LOAN A REVOLVING FACILITY 2025 NOTES 2029 NOTES
Balance as of December 26, 2021 $ 195,000 $ 80,000 $ 230,000 $ 300,000 $ 805,000
2022 new debt — 624,500 — — 624,500
2022 payments (195,000) (304,500) (125,000) — (624,500)
Balance as of June 26, 2022 $ — $ 400,000 $ 105,000 $ 300,000 $ 805,000
Interest rates, as of June 26, 2022 (1) 2.74 % 5.00 % 5.13 %
Principal maturity date April 2026 May 2025 April 2029


	SENIOR SECURED CREDIT FACILITY						TOTAL CREDIT FACILITIES
(dollars in thousands)	REVOLVING CREDIT FACILITY			2025 NOTES						2029 NOTES
Balance as of December 25, 2022	$	430,000		$	105,000		$	300,000			$	835,000
2023 new debt	448,000			—			—				448,000
2023 payments	(513,000)			(214)			—				(513,214)
Balance as of June 25, 2023	$	365,000		$	104,786		$	300,000			$	769,786

Interest rates, as of June 25, 2023 (1)	6.77		%	5.00		%	5.13		%
Principal maturity date	April 2026			May 2025			April 2029

____________________

(1)Interest rate for revolving credit facility represents the weighted average interest rate as of June ~~26, 2022.~~25, 2023.

As of June ~~26, 2022,~~25, 2023, we had ~~$580.0~~$615.2 million in available unused borrowing capacity under our revolving credit facility, net of letters of credit of ~~$20.0~~$19.8 million.

~~Credit Agreement Amendment -~~ ~~On April 26, 2022, we and OSI entered into the Amended Credit Agreement, which included an increase of our existing revolving~~Our credit ~~facility from $800.0 million to $1.0 billion and a transition from LIBOR to SOFR~~agreement, 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 7 -~~ ~~Long-term Debt, Net~~ ~~of the Notes to Consolidated Financial Statements for additional details regarding the Amended Credit Agreement.~~

~~Our Amended Credit Agreement~~amended, contains various financial and non-financial covenants. A violation of these covenants could negatively impact our liquidity by restricting our ability to borrow under the revolving credit facility and cause an acceleration of the amounts due under the credit facilities. See Note 13 - Long-term Debt, Net in our Annual Report on Form 10-K for the year ended December ~~26, 2021~~25, 2022 for further information.

As of June ~~26, 2022~~25, 2023 and December ~~26, 2021,~~25, 2022, 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.~~months and beyond.

~~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.

~~Table of Contents~~

~~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~~development of new restaurants, investment in ~~technology.~~technology, debt payments, dividend payments and share repurchases.

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 ~~approxim~~a~~tely $200~~approximately $240 million to ~~$210~~$260 million in ~~2022.~~2023. 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 July ~~2022,~~2023, our Board declared a quarterly cash dividend of ~~$0.14~~$0.24 per share, payable on August ~~24, 2022.~~25, 2023. 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 June 26, 2022, we had $77.5 million remaining available for repurchase under the 2022 Share Repurchase Program.

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

(dollars in thousands) DIVIDENDS PAID SHARE REPURCHASES TOTAL
Fiscal year 2015 $ 29,332 $ 169,999 $ 199,331
Fiscal year 2016 31,379 309,887 341,266
Fiscal year 2017 30,988 272,736 303,724
Fiscal year 2018 33,312 113,967 147,279
Fiscal year 2019 35,734 106,992 142,726
Fiscal year 2020 17,480 — 17,480
Fiscal year 2021 — — —
First fiscal quarter 2022 12,559 11,702 24,261
Second fiscal quarter 2022 12,418 35,749 48,167
Total (1) $ 203,202 $ 1,021,032 $ 1,224,234

~~________________~~

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

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

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BLOOMIN’ BRANDS, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued

On February 7, 2023, our Board approved the 2023 Share Repurchase Program under which we are authorized to repurchase up to $125.0 million of our outstanding common stock. The 2023 Share Repurchase Program will expire on August 7, 2024. As of June 25, 2023, we had $103.8 million remaining available for repurchase under the 2023 Share Repurchase Program.

Following is a summary of dividends and share repurchases from fiscal year 2022 through June 25, 2023:


(dollars in thousands)	DIVIDENDS PAID		SHARE REPURCHASES		TOTAL
Fiscal year 2022	$	49,736	$	109,999	$	159,735
First fiscal quarter 2023	21,014		20,645		41,659
Second fiscal quarter 2023	20,990		15,539		36,529

Total (1)	$	91,740	$	146,183	$	237,923

________________

(1)Subsequent to June 25, 2023, we repurchased $7.3 million of our common stock under a Rule 10b5-1 plan.

Summary of Cash Flows and Financial Condition

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


		TWENTY-SIX WEEKS ENDED					TWENTY-SIX WEEKS ENDED
(dollars in thousands)	(dollars in thousands)	JUNE 26, 2022		JUNE 27, 2021		(dollars in thousands)	JUNE 25, 2023		JUNE 26, 2022
Net cash provided by operating activities	Net cash provided by operating activities	$	218,818	$	283,182	Net cash provided by operating activities	$	287,293	$	218,818
Net cash used in investing activities	Net cash used in investing activities	(75,738)		(42,625)		Net cash used in investing activities	(140,651)		(75,738)
Net cash used in financing activities	Net cash used in financing activities	(140,922)		(248,018)		Net cash used in financing activities	(143,214)		(140,922)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	4,232		128		Effect of exchange rate changes on cash and cash equivalents	631		4,232

Net increase (decrease) in cash, cash equivalents and restricted cash		$	6,390	$	(7,333)
Net increase in cash, cash equivalents and restricted cash						Net increase in cash, cash equivalents and restricted cash	$	4,059	$	6,390

Operating activities - The ~~decrease~~increase in net cash provided by operating activities during the twenty-six weeks ended June ~~26, 2022~~25, 2023 as compared to the twenty-six weeks ended June ~~27, 2021~~26, 2022 was primarily due ~~to the timing~~to: (i) higher operational receipts, net of ~~operational~~ payments, (ii) lower inventory purchases and ~~receipts and increased~~(iii) decreased employee compensation payments.

Investing activities - The increase in net cash used in investing activities during the twenty-six weeks ended June ~~26, 2022~~25, 2023 as compared to the twenty-six weeks ended June ~~27, 2021~~26, 2022 was primarily due to higher capital expenditures.

Financing activities - The ~~decrease~~increase in net cash used in financing activities during the twenty-six weeks ended June ~~26, 2022~~25, 2023 as compared to the twenty-six weeks ended June ~~27, 2021~~26, 2022 was primarily due to higher payments of cash dividends on our common stock and higher net ~~draws~~repayments on the revolving credit facility, ~~during 2022, generally~~independent of draws used to settle certain outstanding debt obligations ~~including~~discussed below. These increases were partially offset by: (i) a decrease in repurchases of common stock, (ii) partner equity plan payments during 2022 and (iii) lower payments for the purchase of noncontrolling interests.

The twenty-six weeks ended June 26, 2022 also included the 2025 Notes Partial Repurchase and the ~~related Note Hedge Early Termination Agreements, partially offset~~repayment of our Term loan A which were funded by ~~the repurchase of common stock and payment of cash dividends~~draws on our ~~common stock.~~revolving credit facility and proceeds from the 2025 Notes hedge transactions.

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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)	JUNE 26, 2022		DECEMBER 26, 2021		(dollars in thousands)	JUNE 25, 2023		DECEMBER 25, 2022
Current assets	Current assets	$	292,926	$	352,792	Current assets	$	247,891	$	346,577
Current liabilities	Current liabilities	909,850		984,625		Current liabilities	911,606		978,867
Working capital (deficit)	Working capital (deficit)	$	(616,924)	$	(631,833)	Working capital (deficit)	$	(663,715)	$	(632,290)

Working capital (deficit) includes: (i) Unearned revenue primarily from unredeemed gift cards of ~~$309.9~~$312.6 million and ~~$398.8~~$394.2 million as of June ~~26, 2022~~25, 2023 and December ~~26, 2021,~~25, 2022, respectively, and (ii) current operating lease liabilities of ~~$178.8~~$185.4 million and ~~$177.0~~$183.5 million as of June ~~26, 2022~~25, 2023 and December ~~26, 2021,~~25, 2022, 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 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 ~~twenty-six~~thirteen weeks ended June ~~26, 2022~~25, 2023 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~~commodity prices, labor inflation and foreign currency exchange rates and ~~changes in commodity prices.~~interest rates. We believe that there have been no material changes in our market risk since December ~~26, 2021.~~25, 2022. 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~~25, 2022 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, as amended (the “Exchange Act”), 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”))~~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 June ~~26, 2022.~~25, 2023.

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 June ~~26, 2022~~25, 2023 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 1513 - 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”~~Factors,” in our ~~2021~~2022 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~~2022 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~~Conversion of 2025 Notes ~~Partial Repurchase, which is described in further detail within Note 8~~ -~~Convertible Senior Notes~~ During the thirteen weeks ended June 25, 2023, certain holders of ~~the~~our 2025 Notes elected 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~~convert $0.2 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.~~

for a combination of an aggregate of $0.2 million in cash and 9,925 shares of our common stock. The ~~Company’s~~ shares of common stock issued ~~in connection with~~upon conversion of the 2025 Notes ~~Partial Repurchase were not registered under the Securities Act of 1933, as amended (the “Securities Act”), and~~ were issued in reliance onupon the ~~exemption~~exemptions from the registration requirements ~~thereof provided by Section 4(a)(2)~~ of the Securities Act inprovided by Sections 3(a)(9) and 4(a)(2) thereof.

In connection with the conversion of the 2025 Notes, we exercised our rights under certain convertible note hedge transactions during the thirteen weeks ended June 25, 2023 and received a ~~transaction by an issuer not involving a public offering.~~proportionate amount of our common stock.

There were no other sales of equity securities during the thirteen weeks ended June ~~26, 2022~~25, 2023 that were not registered under the Securities Act.

Share Repurchases - The following table provides information regarding our purchases of common stock during the thirteen weeks ended June ~~26, 2022:~~25, 2023:

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


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 27, 2023 through April 23, 2023	227,812	$	24.96	227,812	$	113,669,958
April 24, 2023 through May 21, 2023	124,149	$	24.10	124,149	$	110,677,940
May 22, 2023 through June 25, 2023	266,752	$	25.72	266,752	$	103,817,009
Total	618,713			618,713

____________________

(1)On February ~~8, 2022,~~7, 2023, our Board approved a share repurchase authorization of ~~Directors authorized the repurchase of~~up to $125.0 million of our outstanding common stock as announced in our press release issued on February ~~18, 2022~~16, 2023 (the ~~“2022~~“2023 Share Repurchase Program”). The ~~2022~~2023 Share Repurchase Program will expire on August ~~9, 2023.~~7, 2024.

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Item 6. Exhibits

EXHIBIT
NUMBER

DESCRIPTION OF EXHIBITS

FILINGS REFERENCED FOR
INCORPORATION BY REFERENCE

3.1

~~Fourth~~Fifth Amended and Restated Certificate of Incorporation of Bloomin’ Brands, Inc.

April ~~20, 2022,~~19, 2023, Form 8-K, Exhibit 3.1

~~10.1~~3.2

~~First Amendment to the Second~~Fourth Amended and Restated ~~Credit Agreement~~ ~~and Incremental Amendment, dated April 26, 2022, by and among~~Bylaws of 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,~~19, 2023, 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~~3.2

31.1

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

Filed herewith

31.2

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

Filed herewith

32.1

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

Furnished herewith

32.2

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

Furnished herewith

101.INS

Inline XBRL Instance Document

Filed herewith

101.SCH

Inline XBRL Taxonomy Extension Schema Document

Filed herewith

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Filed herewith

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

Filed herewith

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

Filed herewith

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Filed herewith

104

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

Filed herewith

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

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SIGNATURE

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


Date:	August ~~2, 2022~~1, 2023	BLOOMIN’ BRANDS, INC.
		(Registrant)

		By: /s/ Philip Pace
		Philip Pace Senior Vice President, Chief Accounting Officer (Principal Accounting Officer)

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