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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One) 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended March 31, 2024
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

blmnlogov3.jpg

BLOOMIN’ BRANDS, INC.
(Exact name of registrant as specified in its charter)
Delaware20-8023465
(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 classTrading 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 May 3, 2024, 86,476,371 shares of common stock of the registrant were outstanding.


BLOOMIN’ BRANDS, INC.


INDEX TO QUARTERLY REPORT ON FORM 10-Q
For the Quarterly Period Ended March 31, 2024
(Unaudited)

TABLE OF CONTENTS

 Page No.
Item 1.
 
  
 
 
   
 
Item 2.
Item 3.
Item 4.
 
Item 1.
Item 1A.
Item 2.
Item 5.
Item 6.
  
 
2

BLOOMIN’ BRANDS, INC.

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) 

MARCH 31, 2024DECEMBER 31, 2023
(UNAUDITED)
ASSETS  
Current assets  
Cash and cash equivalents$131,664 $111,519 
Restricted cash and cash equivalents 2,854 
Inventories65,211 75,939 
Other current assets, net101,297 153,002 
Total current assets298,172 343,314 
Property, fixtures and equipment, net1,045,637 1,031,922 
Operating lease right-of-use assets1,087,286 1,084,951 
Goodwill275,680 276,317 
Intangible assets, net441,439 442,985 
Deferred income tax assets, net158,167 159,405 
Other assets, net87,858 85,187 
Total assets$3,394,239 $3,424,081 
LIABILITIES AND STOCKHOLDERS’ EQUITY  
Current liabilities  
Accounts payable$177,713 $189,202 
Current operating lease liabilities171,175 175,442 
Accrued and other current liabilities225,166 255,814 
Unearned revenue320,003 381,877 
Total current liabilities894,057 1,002,335 
Non-current operating lease liabilities1,138,653 1,131,639 
Long-term debt, net951,778 780,719 
Other long-term liabilities, net104,316 97,385 
Total liabilities3,088,804 3,012,078 
Commitments and contingencies (Note 15)
Stockholders’ equity
Bloomin’ Brands stockholders’ equity
Preferred stock, $0.01 par value, 25,000,000 shares authorized; no shares issued and outstanding as of March 31, 2024 and December 31, 2023
  
Common stock, $0.01 par value, 475,000,000 shares authorized; 87,811,312 and 86,968,536 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
878 870 
Additional paid-in capital1,290,765 1,115,387 
Accumulated deficit(809,880)(528,831)
Accumulated other comprehensive loss(179,078)(178,304)
Total Bloomin’ Brands stockholders’ equity302,685 409,122 
Noncontrolling interests2,750 2,881 
Total stockholders’ equity305,435 412,003 
Total liabilities and stockholders’ equity$3,394,239 $3,424,081 
The accompanying notes are an integral part of these unaudited consolidated financial statements.

3

BLOOMIN’ BRANDS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)


THIRTEEN WEEKS ENDED
MARCH 31, 2024MARCH 26, 2023
Revenues  
Restaurant sales$1,179,487 $1,228,234 
Franchise and other revenues15,840 16,512 
Total revenues1,195,327 1,244,746 
Costs and expenses  
Food and beverage357,829 384,214 
Labor and other related343,202 341,542 
Other restaurant operating290,272 282,927 
Depreciation and amortization49,282 46,302 
General and administrative66,776 65,804 
Provision for impaired assets and restaurant closings10,873 3,324 
Total costs and expenses1,118,234 1,124,113 
Income from operations77,093 120,633 
Loss on extinguishment of debt(135,797) 
Interest expense, net(13,616)(12,444)
(Loss) income before provision for income taxes(72,320)108,189 
Provision for income taxes9,970 14,761 
Net (loss) income(82,290)93,428 
Less: net income attributable to noncontrolling interests1,582 2,117 
Net (loss) income attributable to Bloomin’ Brands
$(83,872)$91,311 
Net (loss) income$(82,290)$93,428 
Other comprehensive (loss) income:
Foreign currency translation adjustment(1,931)(1,134)
Net gain on derivatives, net of tax1,157  
Comprehensive (loss) income(83,064)92,294 
Less: comprehensive income attributable to noncontrolling interests1,582 2,117 
Comprehensive (loss) income attributable to Bloomin’ Brands$(84,646)$90,177 
(Loss) earnings per share:
Basic$(0.96)$1.02 
Diluted$(0.96)$0.93 
Weighted average common shares outstanding:
Basic87,024 89,116 
Diluted87,024 98,011 
 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
4

BLOOMIN’ BRANDS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)
BLOOMIN’ BRANDS, INC.
COMMON STOCKADDITIONAL PAID-IN CAPITALACCUM-
ULATED DEFICIT
ACCUMULATED OTHER
COMPREHENSIVE LOSS
NON-CONTROLLING INTERESTSTOTAL
SHARESAMOUNT
Balance,
December 31, 2023
86,969 $870 $1,115,387 $(528,831)$(178,304)$2,881 $412,003 
Net (loss) income— — — (83,872)— 1,582 (82,290)
Other comprehensive loss, net of tax— — — — (774)— (774)
Cash dividends declared, $0.24 per common share
— — (21,075)— — — (21,075)
Repurchase and retirement of common stock(6,948)(69)(44,000)(188,834)— — (232,903)
Stock-based compensation— — 2,448 — — — 2,448 
Common stock issued under stock plans (1)590 6 (2,403)— — — (2,397)
Distributions to noncontrolling interests— — — — — (2,043)(2,043)
Contributions from noncontrolling interests— — — — — 330 330 
Issuance of common stock from repurchase of convertible senior notes7,489 74 216,078 — — — 216,152 
Retirement of convertible senior note hedges(289)(3)126,543 (8,343)— — 118,197 
Retirement of warrants— — (102,213)— — — (102,213)
Balance,
March 31, 2024
87,811 $878 $1,290,765 $(809,880)$(179,078)$2,750 $305,435 
BLOOMIN’ BRANDS, INC.
COMMON STOCKADDITIONAL PAID-IN CAPITALACCUM-
ULATED DEFICIT
ACCUMULATED OTHER
COMPREHENSIVE LOSS
NON-CONTROLLING INTERESTSTOTAL
SHARESAMOUNT
Balance,
December 25, 2022
87,696 $877 $1,161,912 $(706,109)$(185,311)$2,540 $273,909 
Net income— — — 91,311 — 2,117 93,428 
Other comprehensive loss— — — — (1,134)— (1,134)
Cash dividends declared, $0.24 per common share
— — (21,014)— — — (21,014)
Repurchase and retirement of common stock, including excise tax of $17
(863)(9)— (20,653)— — (20,662)
Stock-based compensation— — 2,904 — — — 2,904 
Common stock issued under stock plans (1)632 7 (2,785)— — — (2,778)
Distributions to noncontrolling interests— — — — — (2,555)(2,555)
Contributions from noncontrolling interests— — — — — 743 743 
Balance,
March 26, 2023
87,465 $875 $1,141,017 $(635,451)$(186,445)$2,845 $322,841 
________________
(1)Net of shares withheld for employee taxes.
The accompanying notes are an integral part of these unaudited consolidated financial statements.
5

BLOOMIN’ BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS, UNAUDITED)

THIRTEEN WEEKS ENDED
MARCH 31, 2024MARCH 26, 2023
Cash flows provided by operating activities:  
Net (loss) income$(82,290)$93,428 
Adjustments to reconcile Net (loss) income to cash provided by operating activities:  
Depreciation and amortization49,282 46,302 
Amortization of debt discounts and issuance costs734 763 
Amortization of deferred gift card sales commissions7,498 7,797 
Provision for impaired assets and restaurant closings10,873 3,324 
Non-cash operating lease costs21,934 21,182 
Stock-based compensation expense2,448 2,904 
Deferred income tax expense797 1,682 
Loss on extinguishment of debt135,797  
Other, net(2,102)(1,823)
Change in assets and liabilities(71,185)14,109 
Net cash provided by operating activities73,786 189,668 
Cash flows used in investing activities:  
Capital expenditures(64,872)(64,415)
Other investments, net287 1,470 
Net cash used in investing activities(64,585)(62,945)
Cash flows provided by (used in) financing activities:
Proceeds from borrowings on revolving credit facilities550,000 190,000 
Repayments of borrowings on revolving credit facilities(296,000)(260,000)
Repayments of finance lease obligations(703)(385)
Principal settlements and repurchase of convertible senior notes(2,335) 
Proceeds from retirement of convertible senior note hedges118,197  
Payments for retirement of warrants(102,213) 
Payment of taxes from share-based compensation, net(2,397)(2,778)
Distributions to noncontrolling interests(2,043)(2,555)
Contributions from noncontrolling interests330 743 
Purchase of noncontrolling interests(100)(100)
Repurchase of common stock(232,903)(20,898)
Cash dividends paid on common stock(21,075)(21,014)
Net cash provided by (used in) financing activities8,758 (116,987)
Effect of exchange rate changes on cash and cash equivalents(668)(30)
Net increase in cash, cash equivalents and restricted cash17,291 9,706 
Cash, cash equivalents and restricted cash as of the beginning of the period114,373 84,735 
Cash, cash equivalents and restricted cash as of the end of the period$131,664 $94,441 
Supplemental disclosures of cash flow information:  
Cash paid for interest$10,011 $6,528 
Cash paid for income taxes, net of refunds$3,189 $2,458 
Supplemental disclosures of non-cash investing and financing activities:  
Leased assets obtained in exchange for new operating lease liabilities$25,679 $11,394 
Leased assets obtained in exchange for new finance lease liabilities$3 $4,711 
(Decrease) increase in liabilities from the acquisition of property, fixtures and equipment$(1,520)$1,159 
Shares issued on settlement of convertible senior notes$216,152 $ 
Shares received and retired on exercise of call option under bond hedge upon settlement of convertible senior notes$(8,346)$ 

The accompanying notes are an integral part of these unaudited consolidated financial statements.
6

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. OSI Restaurant Partners, LLC (“OSI”) is the Company’s primary operating entity. The Company’s restaurant portfolio has four 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 (“SEC”). 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 31, 2023.

Recently Issued Financial Accounting Standards Not Yet Adopted - In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” (“ASU No. 2023-07”) which requires disclosure of significant segment expenses regularly provided to the Company’s chief operating decision-maker (“CODM”). ASU No. 2023-07 also allows for multiple measures of segment profit (loss) if the CODM utilizes such measures to allocate resources or assess performance. ASU No. 2023-07 is effective for the Company beginning with the 2024 Form 10-K, with early adoption permitted. The Company is currently evaluating the impact ASU No. 2023-07 will have on its disclosures.

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” (“ASU No. 2023-09”) which expands existing income tax disclosures, including disaggregation of the Company’s effective income tax rate reconciliation table and income taxes paid disclosures. ASU No. 2023-09 is effective for the Company beginning with the 2025 Form 10-K, with early adoption permitted. The Company is currently evaluating the impact ASU No. 2023-09 will have on its disclosures.

In March 2024, the SEC adopted the final rule under SEC Release No. 33-11275, “The Enhancement and Standardization of Climate-Related Disclosures for Investors,” which requires registrants to include climate-related disclosures in their annual reports, including, but not limited to, material Scope 1 and Scope 2 greenhouse gas emissions, climate-related financial metrics, and governance, oversight and risk management processes for material climate-related risks in their audited financial statements. The final rule also requires certain disclosures regarding expenses incurred in relation to severe weather events and other natural conditions. The disclosure requirements are first effective for the Company beginning with the 2026 Form 10-K. The Company is currently evaluating the impact this rule will have on its disclosures.

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

7

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
2.    Revenue Recognition

The following table includes the disaggregation of Restaurant sales and franchise revenues by restaurant concept and major international market for the periods indicated:
THIRTEEN WEEKS ENDED
MARCH 31, 2024MARCH 26, 2023
(dollars in thousands)RESTAURANT SALESFRANCHISE REVENUESRESTAURANT SALESFRANCHISE REVENUES
U.S.
Outback Steakhouse$603,613 $8,320 $628,183 $8,544 
Carrabba’s Italian Grill184,429 736 188,042 795 
Bonefish Grill144,503 160 157,689 171 
Fleming’s Prime Steakhouse & Wine Bar96,162  102,773  
Other2,189 38 3,882 15 
U.S. total1,030,896 9,254 1,080,569 9,525 
International
Outback Steakhouse - Brazil (1)124,837  122,016  
Other (1)(2)23,754 3,556 25,649 3,998 
International total148,591 3,556 147,665 3,998 
Total$1,179,487 $12,810 $1,228,234 $13,523 
________________
(1)Includes $9.6 million of Restaurant sales during the thirteen weeks ended March 26, 2023 in connection with value added tax exemptions resulting from Brazil tax legislation. See Note 14 - Income Taxes for details regarding the Brazil tax legislation.
(2)Includes Restaurant sales for Company-owned Outback Steakhouse restaurants outside of Brazil and Abbraccio restaurants in Brazil. Franchise revenues primarily include 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)MARCH 31, 2024DECEMBER 31, 2023
Other current assets, net
Deferred gift card sales commissions$13,520 $18,081 
Unearned revenue
Deferred gift card revenue$312,283 $374,274 
Deferred loyalty revenue5,506 5,664 
Deferred franchise fees - current453 473 
Other1,761 1,466 
Total Unearned revenue$320,003 $381,877 
Other long-term liabilities, net
Deferred franchise fees - non-current$3,975 $4,036 
8

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
The following table is a rollforward of deferred gift card sales commissions for the periods indicated:
THIRTEEN WEEKS ENDED
(dollars in thousands)MARCH 31, 2024MARCH 26, 2023
Balance, beginning of the period$18,081 $17,755 
Deferred gift card sales commissions amortization(7,498)(7,797)
Deferred gift card sales commissions capitalization3,914 4,403 
Other(977)(958)
Balance, end of the period$13,520 $13,403 

The following table is a rollforward of unearned gift card revenue for the periods indicated:
THIRTEEN WEEKS ENDED
(dollars in thousands)MARCH 31, 2024MARCH 26, 2023
Balance, beginning of the period$374,274 $386,495 
Gift card sales46,609 53,005 
Gift card redemptions(102,470)(118,283)
Gift card breakage(6,130)(7,121)
Balance, end of the period$312,283 $314,096 

3.    Impairments and Exit Costs

The components of Provision for impaired assets and restaurant closings are as follows for the period indicated:
THIRTEEN WEEKS ENDED
(dollars in thousands)MARCH 31, 2024
Impairment losses
U.S. $1,852 
Restaurant closure charges (benefits)
U.S.9,084 
International(63)
Total restaurant closure charges9,021 
Provision for impaired assets and restaurant closings$10,873 

2023 Closure Initiative - During 2023, the Company closed three U.S. and two international Aussie Grill restaurants and made the decision to close 36 predominantly older, underperforming U.S. restaurants (the “2023 Closure Initiative”). The Company has completed all restaurant closures under the 2023 Closure Initiative. Following is a summary of expenses related to the 2023 Closure Initiative charges recognized in the Consolidated Statements of Operations and Comprehensive (Loss) Income for the period indicated (dollars in thousands):
DESCRIPTIONCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME CLASSIFICATIONTHIRTEEN WEEKS ENDED
MARCH 31, 2024
Asset impairments and closure chargesProvision for impaired assets and restaurant closings$10,094 
Severance and other expensesGeneral and administrative2,427 
Closure-related labor costsLabor and other related434 
$12,955 

The remaining impairment and closure charges during the period presented resulted primarily from locations identified for closure.
9

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
4.    (Loss) Earnings Per Share

The following table presents the computation of basic and diluted (loss) earnings per share for the periods indicated:
THIRTEEN WEEKS ENDED
(in thousands, except per share data)MARCH 31, 2024MARCH 26, 2023
Net (loss) income attributable to Bloomin’ Brands
$(83,872)$91,311 
Basic weighted average common shares outstanding87,024 89,116 
Effect of dilutive securities:
Stock options 401 
Nonvested restricted stock units 269 
Nonvested performance-based share units 286 
Convertible senior notes 4,831 
Warrants 3,108 
Diluted weighted average common shares outstanding87,024 98,011 
Basic (loss) earnings per share$(0.96)$1.02 
Diluted (loss) earnings per share$(0.96)$0.93 

Share-based compensation-related weighted average securities outstanding not included in the computation of (loss) earnings per share because their effect was antidilutive were as follows for the periods indicated:
THIRTEEN WEEKS ENDED
(shares in thousands)MARCH 31, 2024MARCH 26, 2023
Stock options373 725 
Nonvested restricted stock units255 120 
Nonvested performance-based share units467 344 

5.    Stock-based Compensation Plans

The Company recognized stock-based compensation expense as follows for the periods indicated:
THIRTEEN WEEKS ENDED
(dollars in thousands)MARCH 31, 2024MARCH 26, 2023
Performance-based share units$493 $923 
Restricted stock units1,937 1,963 
Total stock-based compensation expense, net of capitalized expense$2,430 $2,886 

10

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
The following table presents a summary of the Company’s performance-based share units (“PSUs”) activity:
(in thousands, except per unit data)PERFORMANCE-BASED SHARE UNITSWEIGHTED AVERAGE GRANT DATE FAIR VALUE PER UNITAGGREGATE
INTRINSIC VALUE (1)
Outstanding as of December 31, 2023818 $26.92 $23,026 
Granted290 $27.26 
Performance adjustment (2)237 $25.40 
Vested(473)$25.40 
Forfeited(46)$27.54 
Outstanding as of March 31, 2024826 $27.44 $23,697 
Expected to vest as of March 31, 2024 (3)489 $14,017 
________________
(1)Based on the $28.15 and $28.68 share price of the Company’s common stock on December 29, 2023 and March 28, 2024, the last trading day of the year ended December 31, 2023 and thirteen weeks ended March 31, 2024, respectively.
(2)Represents adjustment to 200% payout for PSUs granted during 2021.
(3)Estimated number of units to be issued upon the vesting of outstanding PSUs based on Company performance projections of performance criteria set forth in the 2022, 2023 and 2024 PSU award agreements.

Assumptions used in the Monte Carlo simulation model and the grant date fair value of PSUs granted were as follows for the periods indicated:
THIRTEEN WEEKS ENDED
MARCH 31, 2024MARCH 26, 2023
Assumptions:
Risk-free interest rate (1)4.37 %4.26 %
Dividend yield (2)3.49 %3.47 %
Volatility (3)51.41 %51.02 %
Grant date fair value per unit (4)$27.26 $29.01 
________________
(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 discount below and a premium above the grant date per share value of the Company’s common stock for the relative total shareholder return modifier of (1.6)% and 2.7% during the thirteen weeks ended March 31, 2024 and March 26, 2023, respectively.

The following represents unrecognized stock-based compensation expense and the remaining weighted average vesting period as of March 31, 2024:
UNRECOGNIZED COMPENSATION EXPENSE
(dollars in thousands)
REMAINING WEIGHTED AVERAGE VESTING PERIOD (in years)
Performance-based share units$11,215 1.9
Restricted stock units$12,531 2.3

11

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
6.    Other Current Assets, Net

Other current assets, net, consisted of the following as of the periods indicated:
(dollars in thousands)MARCH 31, 2024DECEMBER 31, 2023
Prepaid expenses$30,626 $26,674 
Accounts receivable - gift cards, net9,049 67,424 
Accounts receivable - vendors, net18,568 13,648 
Accounts receivable - franchisees, net3,371 3,671 
Accounts receivable - other, net19,901 18,100 
Deferred gift card sales commissions13,520 18,081 
Other current assets, net6,262 5,404 
$101,297 $153,002 

7.          Accrued and Other Current Liabilities

Accrued and other current liabilities consisted of the following as of the periods indicated:
(dollars in thousands)MARCH 31, 2024DECEMBER 31, 2023
Accrued payroll and other compensation (1)$73,614 $98,903 
Accrued insurance22,064 19,310 
Other current liabilities129,488 137,601 
$225,166 $255,814 
________________
(1)During the thirteen weeks ended March 31, 2024, accrued payroll and other compensation decreased primarily due to timing of bonus payments and salary accruals.

8.    Long-term Debt, Net

Following is a summary of outstanding Long-term debt, net, as of the periods indicated:
MARCH 31, 2024DECEMBER 31, 2023
(dollars in thousands)OUTSTANDING BALANCEINTEREST RATEOUTSTANDING BALANCEINTEREST RATE
Senior secured credit facility - revolving credit facility (1)$635,000 6.94 %$381,000 6.96 %
2025 Notes (2)20,724 5.00 %104,786 5.00 %
2029 Notes300,000 5.13 %300,000 5.13 %
Less: unamortized debt discount and issuance costs (2)(3,946)(5,067)
Long-term debt, net$951,778 $780,719 
________________
(1)Interest rate represents the weighted average interest rate as of the respective periods.
(2)During the thirteen weeks ended March 31, 2024, the Company repurchased $83.6 million of the 2025 Notes and as a result, wrote off $0.8 million of debt issuance costs. See Note 9 - Convertible Senior Notes for additional details.

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

9.    Convertible Senior Notes

2025 Notes - On February 29, 2024, the Company entered into exchange agreements (the “Exchange Agreements”) with certain holders (the “Noteholders”) of its 5.00% Convertible Senior Notes due 2025 (the “2025 Notes”). The Exchange Agreements provided for the Company to deliver and pay at the closing of the transactions on March 5, 2024, an aggregate of approximately 7.5 million shares of Common Stock and $3.3 million in cash, including
12

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
accrued interest, in exchange for $83.6 million in aggregate principal amount of the Company’s outstanding 2025 Notes (the “2025 Notes Partial Repurchase”). In connection with the 2025 Notes Partial Repurchase, the Company recognized a loss on extinguishment of debt of $135.8 million and recorded a $216.1 million increase to Additional paid-in capital during the thirteen weeks ended March 31, 2024.

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

The following table includes the outstanding principal amount and carrying value of the 2025 Notes as of the periods indicated:
(dollars in thousands)MARCH 31, 2024DECEMBER 31, 2023
Principal$20,724 $104,786 
Less: unamortized debt issuance costs (1)(178)(1,138)
Net carrying amount$20,546 $103,648 
________________
(1)During the thirteen weeks ended March 31, 2024, the Company wrote off $0.8 million of debt issuance costs as a result of the 2025 Notes Partial Repurchase.

Following is a summary of interest expense for the 2025 Notes by component for the periods indicated:
THIRTEEN WEEKS ENDED
(dollars in thousands)MARCH 31, 2024MARCH 26, 2023
Coupon interest$1,006 $1,313 
Debt issuance cost amortization158 195 
Total interest expense (1)$1,164 $1,508 
________________
(1)The effective rate of the 2025 Notes over their expected life is 5.85%.

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

Convertible Note Hedge and Warrant Transactions - In connection with the 2025 Notes Partial Repurchase, on February 29, 2024, the Company entered into partial unwind agreements with certain financial institutions (the “Derivative Counterparties”) relating to a portion of the convertible note hedge transactions (the “Note Hedge Early Termination Agreements”) and a portion of the warrant transactions (the “Warrant Early Termination Agreements” and together with the Note Hedge Early Termination Agreements, the “Early Termination Agreements”) that were previously entered into by the Company in connection with the issuance of the 2025 Notes. Pursuant to the Early Termination Agreements, the Derivative Counterparties made a termination payment to the Company which consisted of approximately $118.2 million in cash and 0.3 million shares of common stock and the Company made a termination payment to the Derivative Counterparties in an aggregate amount of approximately $102.2 million in cash. In connection with the Note Hedge Early Termination Agreements and the Warrant Early Termination Agreements, the Company recorded a $126.5 million increase and a $102.2 million decrease, respectively, to Additional paid-in capital during the thirteen weeks ended March 31, 2024. The Company also recorded a $8.3 million increase to Accumulated deficit in connection with the Note Hedge Early Termination Agreements.

The remaining warrants have a dilutive effect on the Company’s common stock to the extent that the price of its common stock exceeds the strike price of the warrants. In connection with dividends paid during thirteen weeks ended March 31, 2024, the strike price for the remaining warrants decreased to $15.47.

13

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
10.    Stockholders’ Equity

Share Repurchases - In February 2024, the Company’s Board of Directors (the “Board”) canceled the remaining $57.5 million under the Company’s former share repurchase authorization and approved a new $350.0 million share repurchase authorization (the “2024 Share Repurchase Program”). The 2024 Share Repurchase Program includes capacity above the Company’s normal repurchase activity to provide flexibility in retiring the 2025 Notes at or prior to their May 2025 maturity. The 2024 Share Repurchase Program will expire on August 13, 2025.

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

Under the ASR Agreement, the Company made an aggregate payment of $220.0 million to Wells Fargo and received an aggregate initial delivery of approximately 6.5 million shares of common stock on March 4, 2024, representing approximately 80% of the total shares that were estimated to be repurchased under the ASR Agreement based on the price per share of common stock as of that date. The exact number of shares the Company repurchased under the ASR Agreement was based generally on the average of the daily volume-weighted average price per share of common stock during the repurchase period, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR Agreement. On April 23, 2024, the Company received 1.4 million additional shares of common stock from Wells Fargo in connection with the final settlement of the ASR Agreement.

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

As of March 31, 2024, $130.0 million remained available for repurchase under the 2024 Share Repurchase Program. Following is a summary of the shares repurchased during fiscal year 2024:
(in thousands, except per share data)NUMBER OF SHARES AVERAGE REPURCHASE PRICE PER SHAREAMOUNT
First fiscal quarter (1)6,948 $27.13 $188,500 
________________
(1)Excludes $0.4 million of fees recorded in Additional paid-in capital related to repurchases under the ASR Agreement. Also excludes $44.0 million paid in March 2024 for the repurchase of 1.4 million shares that settled on April 23, 2024 in connection with the ASR Agreement.

Dividends - The Company declared and paid dividends per share during fiscal year 2024 as follows:
(dollars in thousands, except per share data)DIVIDENDS PER SHAREAMOUNT
First fiscal quarter$0.24 $21,075 

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

Accumulated Other Comprehensive Loss (“AOCL”) - Following are the components of AOCL as of the periods indicated:
(dollars in thousands)MARCH 31, 2024DECEMBER 31, 2023
Foreign currency translation adjustment$(179,620)$(177,689)
Unrealized gain (loss) on derivatives, net of tax542 (615)
Accumulated other comprehensive loss$(179,078)$(178,304)

14

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
Following are the components of Other comprehensive loss attributable to Bloomin’ Brands for the periods indicated:
THIRTEEN WEEKS ENDED
(dollars in thousands)MARCH 31, 2024MARCH 26, 2023
Foreign currency translation adjustment$(1,931)$(1,134)
Change in fair value of derivatives, net of tax1,435  
Reclassification realized in Net (loss) income, net of tax(278) 
Gain on derivatives, net of tax1,157  
Other comprehensive loss attributable to Bloomin’ Brands$(774)$(1,134)

11.    Derivative Instruments and Hedging Activities

Cash Flow Hedges of Interest Rate Risk - In March 2024 and December 2023, OSI entered into 11 interest rate swap agreements with ten counterparties (the “Swap Transactions”) to manage its exposure to fluctuations in variable interest rates. The Swap Transactions have an aggregate notional amount of $375.0 million and include one and two-year tenors with the following terms:
NOTIONAL AMOUNTWEIGHTED AVERAGE FIXED INTEREST RATE (1)EFFECTIVE DATETERMINATION DATE
$100,000,000 4.92%December 29, 2023December 31, 2024
100,000,000 4.34%December 29, 2023December 31, 2025
175,000,000 4.40%March 29, 2024March 31, 2026
$375,000,000 4.52%
____________________
(1)The weighted average fixed interest rate excludes the term SOFR adjustment and interest rate spread described below.

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

The Swap Transactions have been designated and qualify as cash flow hedges, are recognized on the Company’s Consolidated Balance Sheets at fair value and are classified based on the instruments’ maturity dates. The Company estimated $1.6 million of interest income will be reclassified to Interest expense, net over the next 12 months related to the Company’s Swap Transactions.

The following table presents the fair value and classification of the Company’s swap agreements as of the periods indicated:
(dollars in thousands)MARCH 31, 2024DECEMBER 31, 2023CONSOLIDATED BALANCE SHEET CLASSIFICATION
Interest rate swaps - asset (1)$1,574 $320 Other current assets, net
Interest rate swaps - liability$ $253 Accrued and other current liabilities
Interest rate swaps - liability846 893 Other long-term liabilities, net
Total fair value of derivative instruments - liabilities (1)$846 $1,146 
____________________
(1)    See Note 13 - Fair Value Measurements for fair value discussion of the interest rate swaps.

15

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
By utilizing the interest rate swaps, the Company is exposed to credit-related losses in the event that the counterparty fails to perform under the terms of the derivative contract. To mitigate this risk, the Company enters into derivative contracts with major financial institutions based upon credit ratings and other factors. The Company continually assesses the creditworthiness of its counterparties. As of March 31, 2024, all counterparties to the interest rate swaps performed in accordance with their contractual obligations.

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

As of December 31, 2023, the fair value of the Company’s interest rate swaps was in a net liability position, including accrued interest but excluding any adjustment for nonperformance risk, of $0.8 million. As of December 31, 2023, the Company has not posted any collateral related to these agreements. If the Company had breached any of these provisions as of December 31, 2023, it could have been required to settle its obligations under the agreements at their termination value of $0.8 million.

12.    Leases

The following table includes a detail of lease assets and liabilities included on the Company’s Consolidated Balance Sheets as of the periods indicated:
(dollars in thousands)CONSOLIDATED BALANCE SHEET CLASSIFICATIONMARCH 31, 2024DECEMBER 31, 2023
Operating lease right-of-use assetsOperating lease right-of-use assets$1,087,286 $1,084,951 
Finance lease right-of-use assets (1)Property, fixtures and equipment, net9,148 9,941 
Total lease assets, net$1,096,434 $1,094,892 
Current operating lease liabilitiesCurrent operating lease liabilities$171,175 $175,442 
Current finance lease liabilitiesAccrued and other current liabilities2,830 3,197 
Non-current operating lease liabilitiesNon-current operating lease liabilities1,138,653 1,131,639 
Non-current finance lease liabilitiesOther long-term liabilities, net7,072 7,414 
Total lease liabilities$1,319,730 $1,317,692 
________________
(1)Net of accumulated amortization of $5.4 million and $4.7 million as of March 31, 2024 and December 31, 2023, respectively.

Following is a summary of expenses and income related to leases recognized in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the periods indicated:
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME CLASSIFICATIONTHIRTEEN WEEKS ENDED
(dollars in thousands)MARCH 31, 2024MARCH 26, 2023
Operating lease cost (1)Other restaurant operating$45,804 $45,747 
Variable lease costOther restaurant operating2,560 1,724 
Finance lease costs:
Amortization of leased assetsDepreciation and amortization788 488 
Interest on lease liabilitiesInterest expense, net202 136 
Sublease revenueFranchise and other revenues(1,748)(1,708)
Lease costs, net$47,606 $46,387 
________________
(1)Excludes rent expense for office facilities and Company-owned closed or subleased properties of $3.5 million and $3.0 million for the thirteen weeks ended March 31, 2024 and March 26, 2023, respectively, which is included in General and administrative expense.

16

BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued
The following table is a summary of cash flow impacts to the Company’s Consolidated Financial Statements related to its leases for the periods indicated:
THIRTEEN WEEKS ENDED
(dollars in thousands)MARCH 31, 2024MARCH 26, 2023
Cash flows from operating activities:
Cash paid for amounts included in the measurement of operating lease liabilities$49,883 $48,620 

13.    Fair Value Measurements

Fair value is the price that would be received for an asset or paid to transfer a liability, or the exit price, in an orderly transaction between market participants on the measurement date. Fair value is categorized into one of the following three levels based on the lowest level of significant input:
Level 1
Unadjusted quoted market prices in active markets for identical assets or liabilities
Level 2Observable inputs available at measurement date other than quoted prices included in Level 1
Level 3Unobservable inputs that cannot be corroborated by observable market data

Fair Value Measurements on a Recurring Basis - The following table summarizes the Company’s financial assets and liabilities measured at fair value by hierarchy level on a recurring basis as of the periods indicated:
MARCH 31, 2024DECEMBER 31, 2023
(dollars in thousands)TOTALLEVEL 1LEVEL 2TOTALLEVEL 1LEVEL 2
Assets:
Cash equivalents:
Fixed income funds$22,720 $22,720 $ $12,837 $12,837 $ 
Money market funds16,178 16,178  11,083 11,083  
Restricted cash equivalents:
Money market funds   2,854 2,854  
Other current assets, net:
Derivative instruments - interest rate swaps1,574  1,574 320  320 
Total asset recurring fair value measurements$40,472 $38,898 $1,574 $27,094 $26,774 $320 
Liabilities:
Accrued and other current liabilities:
Derivative instruments - interest rate swaps$ $ $ $253 $ $253 
Other long-term liabilities:
Derivative instruments - interest rate swaps846  846 893  893 
Total liability recurring fair value measurements$846 $ $846 $1,146 $ $1,146 

Fair value of each class of financial instruments is determined based on the following:
FINANCIAL INSTRUMENTMETHODS AND ASSUMPTIONS
Fixed income funds and Money market funds
Carrying value approximates fair value because maturities are less than three months.
Derivative instruments
The Company’s derivative instruments include interest rate swaps. Fair value measurements are based on the contractual terms of the derivatives and observable market-based inputs. The interest rate swaps are valued using a discounted cash flow analysis on the expected cash flows of each derivative using observable inputs including interest rate curves and credit spreads. The Company also considers its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. As of March 31, 2024 and December 31, 2023, the Company determined that the credit valuation adjustments were not significant to the overall valuation of its derivatives.

17

BLOOMIN’ BRANDS, INC.

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

Debt is carried at amortized cost; however, the Company estimates the fair value of debt for disclosure purposes. The following table includes the carrying value and fair value of the Company’s debt by hierarchy level as of the periods indicated:
MARCH 31, 2024DECEMBER 31, 2023
(dollars in thousands)CARRYING VALUEFAIR VALUE LEVEL 2CARRYING VALUEFAIR VALUE LEVEL 2
Senior secured credit facility - revolving credit facility$635,000 $635,000 $381,000 $381,000 
2025 Notes$20,724 $53,346 $104,786 $265,896 
2029 Notes$300,000 $278,517 $300,000 $277,809 

14.    Income Taxes
THIRTEEN WEEKS ENDED
(dollars in thousands)MARCH 31, 2024MARCH 26, 2023
(Loss) income before provision for income taxes$(72,320)$108,189 
Provision for income taxes$9,970 $14,761 
Effective income tax rate(13.8)%13.6 %

The effective income tax rate for the thirteen weeks ended March 31, 2024 includes the impact of nondeductible losses associated with the 2025 Notes Partial Repurchase which, relative to a pre-tax book loss during the quarter, resulted in a negative effective income tax rate.

On January 24, 2024, the Company’s Brazilian subsidiary received an unfavorable second level court ruling related to its ongoing litigation regarding its eligibility for tax e