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What changed in Bloomin' Brands, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Bloomin' Brands, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+361 added−387 removedSource: 10-K (2024-02-28) vs 10-K (2023-02-22)

Top changes in Bloomin' Brands, Inc.'s 2023 10-K

361 paragraphs added · 387 removed · 283 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

79 edited+19 added−27 removed33 unchanged
Biggest changeOutback Steakhouse Company-owned 564 6 (4) 566 Franchised 130 1 (4) 127 Total 694 7 (8) 693 46 Carrabba’s Italian Grill Company-owned 199 1 (1) 199 Franchised 20 — (1) 19 Total 219 1 (2) 218 29 Bonefish Grill Company-owned 178 — (5) 173 Franchised 7 — — 7 Total 185 — (5) 180 30 Fleming’s Prime Steakhouse & Wine Bar Company-owned 64 1 — 65 25 Aussie Grill Company-owned 5 4 (2) 7 1 U.S. total 1,167 13 (17) 1,163 International Company-owned Outback Steakhouse - Brazil (1) 122 17 — 139 Other (1)(2) 33 3 — 36 Franchised Outback Steakhouse - South Korea 78 12 (4) 86 Other (2) 54 3 (10) 47 International total 287 35 (14) 308 System-wide total 1,454 48 (31) 1,471 System-wide total - Company-owned 1,165 32 (12) 1,185 System-wide total - Franchised 289 16 (19) 286 ____________________ (1) The restaurant counts for Brazil, including Abbraccio and Aussie Grill restaurants within International Company-owned Other, are reported as of November 30, 2021 and 2022, respectively, to correspond with the balance sheet dates of this subsidiary.
Biggest changeOutback Steakhouse Company-owned 566 6 (10) 562 Franchised 127 — (1) 126 Total 693 6 (11) 688 46 Carrabba’s Italian Grill Company-owned 199 — (1) 198 Franchised 19 — — 19 Total 218 — (1) 217 29 Bonefish Grill Company-owned 173 — (3) 170 Franchised 7 1 (2) 6 Total 180 1 (5) 176 30 Fleming’s Prime Steakhouse & Wine Bar Company-owned 65 — (1) 64 25 Aussie Grill Company-owned 7 — (3) 4 Franchised — 1 — 1 Total 7 1 (3) 5 1 U.S. total (1) 1,163 8 (21) 1,150 International Company-owned Outback Steakhouse - Brazil (2) 139 16 — 155 Other (2)(3) 36 2 (2) 36 Franchised Outback Steakhouse - South Korea (1) 86 16 (10) 92 Other (3) 47 4 (4) 47 International total 308 38 (16) 330 System-wide total 1,471 46 (37) 1,480 System-wide total - Company-owned 1,185 24 (20) 1,189 System-wide total - Franchised 286 22 (17) 291 ____________________ (1) Excludes 36 and five off-premises only kitchens as of December 25, 2022 and December 31, 2023, respectively.
Company-owned Restaurants - Company-owned restaurants are restaurants wholly-owned by us or in which we have a majority ownership. The results of operations of Company-owned restaurants are included in our consolidated operating results and the portion of income or loss attributable to the noncontrolling interests is eliminated in our Consolidated Statements of Operations and Comprehensive Income (Loss).
Company-owned Restaurants - Company-owned restaurants are restaurants wholly-owned by us or in which we have a majority ownership. The results of operations of Company-owned restaurants are included in our consolidated operating results and the portion of income or loss attributable to the noncontrolling interests is eliminated in our Consolidated Statements of Operations and Comprehensive Income.
Following is a summary of royalty fee percentages based on our existing unaffiliated franchise agreements: (as a % of gross Restaurant sales) MONTHLY ROYALTY FEE PERCENTAGE U.S. franchisees (1) 3.50% - 5.75% International franchisees (2) 2.00% - 5.00% _________________ (1) U.S. franchisees must also contribute a percentage of gross sales for national marketing programs and spend a certain percentage of gross sales on local advertising.
Following is a summary of royalty fee percentages based on our existing unaffiliated franchise agreements: (as a % of gross Restaurant sales) MONTHLY ROYALTY FEE PERCENTAGE U.S. franchisees (1) 3.50% - 5.75% International franchisees (2) 2.75% - 5.00% _________________ (1) U.S. franchisees must also contribute a percentage of gross sales for national marketing programs and spend a certain percentage of gross sales on local advertising.
In addition to base salary, Market Vice Presidents, Area Operating Partners, Restaurant Managing Partners and Chef Partners (“Restaurant Partners”) generally receive performance-based bonuses for providing management and supervisory services to their restaurants, certain of which may be based on a percentage of their restaurants’ monthly operating results or cash flows and/or total controllable income.
In addition to base salary, Restaurant Managing Partners and Chef Partners (“Restaurant Partners”), Area Operating Partners, and Market Vice Presidents generally receive performance-based bonuses for providing management and supervisory services to their restaurants, certain of which may be based on a percentage of their restaurants’ monthly operating results or cash flows and/or total controllable income.
We support words with actions by being good stewards of our communities and engaging with organizations dedicated to cultivating more diverse and inclusive communities, including: • National Urban League • Woman’s Foodservice Forum • Multicultural Foodservice & Hospitality Alliance • National Diversity Council • Autism Speaks • Habitat for Humanity • Big Brothers, Big Sisters • Boys & Girls Clubs • Feeding America (Tampa Bay) • Meals on Wheels • Harvest Food Donation Workplace Safety - Employee health and safety in the workplace is of utmost importance to our Company.
We support words with actions by being good stewards of our communities and engaging with organizations dedicated to cultivating more diverse and inclusive communities, including: • National Urban League • Big Brothers, Big Sisters • Woman’s Foodservice Forum • Boys & Girls Clubs • Multicultural Foodservice & Hospitality Alliance • Feeding America (Tampa Bay) • National Diversity Council • Meals on Wheels • Autism Speaks • Harvest Food Donation • Habitat for Humanity Workplace Safety - Employee health and safety in the workplace is of utmost importance to our Company.
International Development - We continue to pursue international expansion opportunities, leveraging established equity and franchise markets in South America and Asia, and in strategically selected emerging and high-growth developed markets, with a focus on Brazil. All Outback Steakhouse restaurants opened in Brazil since the beginning of 2021 were built utilizing the Joey prototype design.
International Development - We continue to pursue international expansion opportunities, leveraging established equity and franchise markets in South America and Asia, and in strategically selected emerging and high-growth developed markets, with a focus on Brazil. All Outback Steakhouse restaurants opened in Brazil since the beginning of 2021 were built utilizing the Joey design.
Total Rewards - Our total rewards philosophy is to motivate and retain our Team Members by offering, what we believe to be, competitive salary packages. To align Team Member objectives with the Company and ultimately our stockholders, Bloomin’ Brands offers programs that reward long-term performance.
Total Rewards - Our total rewards philosophy is to motivate and retain our Team Members by offering, what we believe to be, competitive salary packages. To align Team Member objectives with our Company and ultimately our stockholders, Bloomin’ Brands offers programs that reward long-term performance.
Scarlett previously served as Executive Vice President, President of Outback Steakhouse from July 2016 to February 2020; Executive Vice President, President of Bonefish Grill from March 2015 to July 2016; Senior Vice President, Casual Dining Restaurant Operations from January 2013 to April 2015; and Senior Vice President of Operations for Outback Steakhouse from March 2010 to January 2013.
Scarlett previously served as Executive Vice President, President of Outback Steakhouse from July 2016 to February 2020; Executive Vice President, President of Bonefish Grill from March 2015 to July 2016; Senior Vice President, Casual Dining Restaurant Operations from January 2013 to April 2015; and Senior Vice President of Operations for Outback Steakhouse from March 2010 to January 2013. Mr.
Development - We opportunistically pursue unit growth across our concepts through existing geography fill-in and market expansion opportunities. During 2021, we opened our first U.S. Outback Steakhouse utilizing a smaller-scaled “Joey” prototype. The Joey prototype was designed to increase return on investment through a reduced restaurant footprint with a more efficient layout.
Development - We opportunistically pursue unit growth across our concepts through existing geography fill-in and market expansion opportunities. During 2021, we opened our first U.S. Outback Steakhouse utilizing a smaller-scaled “Joey” design. The Joey was designed to increase return on investment through a reduced restaurant footprint with a more efficient layout.
Our reports and other materials filed with the SEC are also available at www.sec.gov. The reference to website addresses in this Report does not constitute incorporation by reference of the information contained on the websites and should not be considered part of this Report. 17 Table of Contents BLOOMIN’ BRANDS, INC.
Our reports and other materials filed with the SEC are also available at www.sec.gov. The reference to website addresses in this Report does not constitute incorporation by reference of the information contained on the websites and should not be considered part of this Report. 16 Table of Contents BLOOMIN’ BRANDS, INC.
Offering a selection of classic and signature hand-crafted cocktails, using fresh juices, edible garnishes 5 Table of Contents BLOOMIN’ BRANDS, INC. and house infusions, Bonefish Grill also features a distinct list of wines, which are the perfect match for any food pairing.
Offering a selection of classic and signature hand-crafted cocktails, using fresh juices, edible garnishes and house infusions, Bonefish Grill also features a distinct list of wines, the perfect match for any food pairing. 5 Table of Contents BLOOMIN’ BRANDS, INC.
From our participation at the Women’s Foodservice Forum annual conference to memorable heritage month programs and active community involvement (for example, Juneteenth service activities, Pride sponsorships and engagement, walks and runs for special health-focused causes), our Employee Resource Groups have been instrumental in providing community, support and both personal and professional development for our Team Members.
From our participation at the Women’s Foodservice Forum annual conference to memorable heritage month programs and active community involvement (for example, Juneteenth service activities, Pride sponsorships and engagement, walks and runs for special health-focused causes), our Employee Resource Groups have been instrumental in providing support, a sense of community and both personal and professional development for our Team Members.
Pace previously served as the Company’s Group Vice President and Controller from October 2015 to July 2022 and Vice President, Corporate Controller from July 2013 to October 2015. Suzann Trevisan has served as Senior Vice President, Chief Human Resources Officer since September 2022. Prior to joining Bloomin’ Brands, Ms.
Pace previously served as Group Vice President and Controller from October 2015 to July 2022 and Vice President, Corporate Controller from July 2013 to October 2015. Suzann Trevisan has served as Senior Vice President, Chief Human Resources Officer since September 2022. Prior to joining Bloomin’ Brands, Ms.
Our Company-owned restaurants, and most of our franchised restaurants, are connected through a portal that provides our employees and franchise partners with access to business information and tools that allow them to collaborate, communicate, train and share information. We maintain a robust system to ensure network security and safeguard against data loss. See Item 1A.
Our Company-owned restaurants, and most of our franchised restaurants, are connected through a portal that provides our employees and franchise partners with access to business information and tools that allow them to collaborate, communicate, train and share information. We maintain a system to ensure network security and safeguard against data loss. See Item 1C. Cybersecurity and Item 1A.
We use surveys to seek feedback from our Team Members on a variety of topics that include, but are not limited to, confidence in leadership, our company culture and overall satisfaction with the Company. In 2022, we invested in a comprehensive total rewards survey, the insights from which we are using to define our Value of Employment strategy.
We use surveys to seek feedback from our Team Members on a variety of topics that include, but are not limited to, confidence in leadership, our company culture and overall satisfaction with the Company. We utilize a comprehensive total rewards survey, the insights from which we are using to define our Value of Employment strategy.
We are committed to nurturing an inclusive, service-focused culture, founded on respecting and valuing every person, regardless of gender, race, ethnic origin, religion, sexual orientation, ability or age. We track a variety of workforce statistics to help us understand the gender, racial and ethnic diversity of our U.S.
We are committed to nurturing an inclusive, service-focused culture, founded on respecting and valuing every person, regardless of gender, race, ethnic origin, religion, sexual orientation, ability or age. We track several workforce statistics to help us understand the gender, racial and ethnic diversity of our U.S.
Additional Information - We make available, free of charge, through our internet website www.bloominbrands.com, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after electronically filing such material with the Securities and Exchange Commission (“SEC”).
Additional Information - We make available, free of charge, through our internet website www.bloominbrands.com, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after electronically filing such material with the SEC.
See Item 2. Properties for disclosure of our international restaurant count by country and territory. Outback Steakhouse - Our international Outback Steakhouse restaurants have a menu similar to our U.S. menu with additional variety to meet local taste preferences. In addition to the traditional Outback Special sirloin, a typical international menu may feature local beef cuts.
Properties for disclosure of our international restaurant count by country and territory. Outback Steakhouse - Our international Outback Steakhouse restaurants have a menu similar to our U.S. menu with additional variety to meet local taste preferences. In addition to the traditional Outback Special sirloin, a typical international menu may feature local cuts of beef.
Prior to joining the Company, Mr. Deno was Chief Financial Officer of the international division of Best Buy Co., Inc. from December 2009 to May 2012. Mr. Deno has also previously served as Chief Financial Officer and later Chief Operating Officer of Yum! Brands, Inc. Christopher Meyer has served as Executive Vice President, Chief Financial Officer since April 2019. Mr.
Deno was Chief Financial Officer of the international division of Best Buy Co., Inc. from December 2009 to May 2012. Mr. Deno has also previously served as Chief Financial Officer and later Chief Operating Officer of Yum! Brands, Inc. Christopher Meyer has served as Executive Vice President, Chief Financial Officer since April 2019. Mr.
Each concept held monthly Courageous Conversations and we hosted virtual calls open to the entire company bimonthly to learn about and discuss DE&I issues aligned to the mission and objectives of our five Employee Resource Groups: • Women’s Interests Network (WIN): Committed to accelerating the advancement of women at Bloomin’ Brands through mentorship, education, experience and information sharing; • Black Interests Group (BIG): Focused on elevating and amplifying Black talent through strong networks and mentorship; • BELONG: Fostering an environment for Our People to thrive while celebrating understanding, acceptance and involvement of the LGBTQ+ community and their allies; • ¡Adelante!: Aimed at accelerating and celebrating the Hispanic and Latin Community at Bloomin’ Brands; and • Bloomin’ Balance: Inspiring our community to lead happy, healthy and fulfilled lives through total and balanced wellness.
Each concept held monthly Courageous Conversations and we hosted virtual calls open to the entire company bimonthly to learn about and discuss important topics aligned to the mission and objectives of our five Employee Resource Groups: • Women’s Interests Network (WIN): Committed to accelerating the advancement of women at Bloomin’ Brands through mentorship, education, experience and information sharing; • Black Interests Group (BIG): Focused on elevating and amplifying Black talent through strong networks and mentorship; • BELONG: Fostering an environment for Our People to thrive while celebrating understanding, acceptance and involvement of the LGBTQ+ community and their allies; • ¡Adelante!: Aimed at accelerating and celebrating the Hispanic and Latin Community at Bloomin’ Brands; and • Bloomin’ Balance: Inspiring our Team Members to lead happy, healthy and fulfilled lives through total and balanced wellness.
Following is a summary of sales by occasion, sales mix by product type and average check per person for Company-owned restaurants during 2022: U.S.
Following is a summary of sales by occasion, sales mix by product type and average check per person for Company-owned restaurants during 2023: U.S.
Risk Factors for additional discussion of our cyber security measures. Advertising and Marketing - We advertise through a diverse set of media channels including, but not limited to, national/spot television, radio, social media, search engines and other digital tactics.
Risk Factors for additional discussion of our cybersecurity measures. Advertising and Marketing - We advertise through a diverse set of media channels including, but not limited to, national/spot television, radio, social media, search engines and other digital tactics.
International - Our restaurants outside of the U.S. are subject to similar regional and local laws and regulations as our U.S. restaurants, including COVID-19-related mandates, labor, food safety, data privacy, anti-corruption/anti-bribery and information security. See Item 1A. - Risk Factors for a discussion of risks relating to federal, state, local and international regulation of our business.
International - Our restaurants outside of the U.S. are subject to similar regional and local laws and regulations as our U.S. restaurants, including labor, food safety, data privacy, anti-corruption/anti-bribery and information security. See Item 1A. - Risk Factors for a discussion of risks relating to federal, state, local and international regulation of our business.
The cost of such commodities may fluctuate widely due to government policy and regulation, changing weather patterns and conditions, climate change and other supply and/or demand impacting events such as the COVID-19 pandemic, macroeconomic conditions, geopolitical events or other unforeseen circumstances. Serving safe and high-quality food has always been our priority.
The cost of such commodities may fluctuate widely due to government policy and regulation, changing weather patterns and conditions, climate change and other supply and/or demand impacting events such as pandemics, macroeconomic conditions, geopolitical events or other unforeseen circumstances. Serving safe and high-quality food has always been our priority.
To drive customer engagement, we continue to invest in data and technology infrastructure, including brand websites, digital marketing, online ordering and mobile apps. To increase customer convenience, we are leveraging our online ordering infrastructure to facilitate expanded off-premises dining systems. Additionally, we developed systems to support our customer loyalty program with a focus on increasing traffic to our restaurants.
To drive customer engagement, we continue to invest in data and technology infrastructure, including brand websites, digital marketing, online ordering and mobile apps. To increase customer convenience, we leverage our online ordering infrastructure to facilitate off-premises dining systems. Additionally, we developed systems to support our customer loyalty program with a focus on increasing traffic to our restaurants.
Trevisan held a number of leadership positions with Owens Corning, including Vice President of Human Resources for the composites business from March 2018 to August 2022 and Vice President of Human Resources, Centers of Excellence from June 2015 to March 2018.
Trevisan held a number of leadership positions with Owens Corning, including Vice President of Human Resources for the composites business from March 2018 to August 2022 and Vice President of Human Resources, Centers of Excellence from June 2 015 to March 2018.
Initial franchise fees for full-service restaurants are generally $40,000 for U.S. franchisees and range between $30,000 and $75,000 for international franchisees, depending on the market. Initial franchise fees for international delivery-only kitchens are generally $10,000. Some franchisees may also pay advertising and administration fees based on a percentage of gross restaurant sales.
Initial franchise fees for full-service restaurants are generally $40,000 for U.S. franchisees and range between $30,000 and $75,000 for international franchisees, depending on the market. Some franchisees may also pay advertising and administration fees based on a percentage of gross restaurant sales.
Each of our restaurants is subject to licensing and regulation by a number of governmental authorities, which may include, among others, alcoholic beverage control, health and safety agencies, environmental and fire agencies in the state, municipality or country in which the restaurant is located.
Each of our restaurants is subject to licensing and regulation by a number of governmental authorities, which may include, among others, alcoholic beverage control, health and safety agencies and environmental and fire agencies in the state, municipality or country in which the restaurant is located. U.S. - Alcoholic beverage sales represent 11% of our U.S. restaurant sales.
The U.S. segment includes all restaurants operating in the U.S. while restaurants operating outside the U.S. are included in the international segment. Following is a summary of reportable segments as of December 25, 2022: REPORTABLE SEGMENT (1) CONCEPT GEOGRAPHIC LOCATION U.S.
The U.S. segment includes all restaurants operating in the U.S. while restaurants operating outside the U.S. are included in the international segment. Following is a summary of reportable segments as of December 31, 2023: REPORTABLE SEGMENT (1) CONCEPT GEOGRAPHIC LOCATION U.S.
However, we believe such uses will not adversely affect us. Our policy is to, whenever possible, pursue registration of our marks in countries where we operate and to vigorously oppose any infringement of our marks. We also have registered domain names for each of our concepts.
However, we believe such uses will not 10 Table of Contents BLOOMIN’ BRANDS, INC. adversely affect us. Our policy is to, whenever possible, pursue registration of our marks in countries where we operate and to vigorously oppose any infringement of our marks. We also have registered domain names for each of our concepts.
We deliver on this by ensuring Team Members are trained, understand their role in inclusivity and are held accountable in making our restaurants a place where everyone is valued for who they are and what they bring to the table. 13 Table of Contents BLOOMIN’ BRANDS, INC.
We deliver on this by ensuring Team Members are trained, understand their role in inclusivity and are held accountable in making our restaurants a place where everyone is valued for who they are and what they bring to the table.
We provide future industry leaders with financial support through endowed scholarships at each of these schools to help offset students’ costs of higher education as they pursue degrees and certifications that align with the work we do in hospitality. 14 Table of Contents BLOOMIN’ BRANDS, INC.
Among the support, we provide future industry leaders with financial support through endowed scholarships to help offset students’ costs of higher education as they pursue degrees and certifications that align with the work we do in hospitality. 13 Table of Contents BLOOMIN’ BRANDS, INC.
In addition, during 2022 we implemented a matching gift and volunteer grant program for eligible 501(c)(3) non-profit organizations and provided a limited dollar-for-dollar match or grant for full-time RSC Team Members who made a personal charitable donation or volunteered for a minimum of ten hours during non-working hours.
In addition, during 2022 we implemented an annual matching gift and volunteer grant program for eligible 501(c)(3) non-profit organizations and provided a limited dollar-for-dollar match or grant for full-time RSC Team Members who made a personal charitable donation or volunteered for a minimum of ten hours during non-working hours. 14 Table of Contents BLOOMIN’ BRANDS, INC.
We license the use of our registered trademarks to franchisees and third parties through franchise and license arrangements. The franchise and license arrangements restrict franchisees’ and licensees’ activities with respect to the use of our trademarks and impose quality control standards in connection with goods and services offered in connection with the trademarks. 11 Table of Contents BLOOMIN’ BRANDS, INC.
We license the use of our registered trademarks to franchisees and third parties through franchise and license arrangements. The franchise and license arrangements restrict franchisees’ and licensees’ activities with respect to the use of our trademarks and impose quality control standards in connection with goods and services offered in connection with the trademarks.
Annual strategic talent reviews and succession planning for executive-level roles, senior management and key restaurant leadership positions help ensure consistency in management talent quality. During 2022, approximately 90% of promotions to our Manager in Training program and to Restaurant Managing Partner were internal, which consisted of 33% women and 30% people of color.
Annual strategic talent reviews and succession planning for executive-level roles, senior management and key restaurant leadership positions help ensure consistency in management talent quality. During 2023, approximately 91% of promotions to our Manager in Training program and to Restaurant Managing Partner were internal, which consisted of 42% women and 29% people of color.
We embrace the communities we serve, from feeding first responders to supporting worthy causes, especially in the Tampa Bay area of Florida, home to our Restaurant Support Center (“RSC”).
We embrace the communities we serve, from feeding first responders to supporting non-profit organizations, especially in the Tampa Bay area of Florida, home to our Restaurant Support Center (“RSC”).
Information Systems - We leverage technology to support areas such as digital marketing and customer engagement, business analytics and decision support, restaurant operations and productivity initiatives related to optimizing our staffing, food waste management and supply chain efficiency.
Information Systems - We leverage technology to support areas such as digital marketing and customer engagement, business analytics and decision support, restaurant operations and productivity initiatives related to optimizing our staffing, food waste management and supply chain efficiency. 9 Table of Contents BLOOMIN’ BRANDS, INC.
Fleming’s Prime Steakhouse & Wine Bar - Fleming’s Prime Steakhouse & Wine Bar is a contemporary interpretation of the classic American steakhouse, boasting culinary mastery, signature style and unrivaled attentive service to create memorable dining experiences in a welcoming and lively atmosphere.
Fleming’s Prime Steakhouse & Wine Bar - Fleming’s Prime Steakhouse & Wine Bar is a contemporary interpretation of the classic American steakhouse, boasting culinary mastery, signature style and unrivaled attentive service to create memorable dining experiences for guests.
To facilitate this community engagement, field Team Members volunteer within their communities and RSC Team Members participate in an annual Community Service Day. In 2022, its 14th year, Team Members volunteered nearly 800 hours of service at 15 non-profit organizations in the Tampa Bay area.
To facilitate this community engagement, field Team Members volunteer within their communities and RSC Team Members participate in an annual Community Service Day. In 2023, its 15th year, Team Members volunteered over 800 hours of service at 16 non-profit organizations in the Tampa Bay area.
Restaurant Management - The Restaurant Managing Partner has primary responsibility for the day-to-day operation of the restaurant and is required to follow Company-established operating standards. Area Operating Partners for our casual dining concepts oversee restaurant operations and Restaurant Managing Partners within a specific region. For our Outback Steakhouse brand, Market Vice Presidents oversee multiple Area Operating Partner regions.
Restaurant Management - The Restaurant Managing Partner has primary responsibility for the day-to-day operation of the restaurant and is required to follow Company-established operating standards. Area Operating Partners for our casual dining concepts oversee restaurant operations and Restaurant Managing Partners within a specific region.
Alcoholic beverage sales represent 11% of our U.S. restaurant sales. Alcoholic beverage control regulations require each of our restaurants to apply to a state authority and, in certain locations, county or municipal authorities for a license or permit to sell alcoholic beverages on the premises and, where applicable, a permit to provide service for extended hours and on Sundays.
Alcoholic beverage control regulations require each of our restaurants to apply to a state authority and, in certain locations, county or municipal authorities for a license or permit to sell alcoholic beverages on the premises and, where applicable, a permit to provide service for extended hours, for carry-out or delivery and on Sundays.
HUMAN CAPITAL RESOURCES Employees - As of December 25, 2022, we employed approximately 87,000 Team Members (our employees), of which approximately 750 are corporate personnel, including more than 200 in international markets. 12 Table of Contents BLOOMIN’ BRANDS, INC.
HUMAN CAPITAL RESOURCES Employees - As of December 31, 2023, we employed approximately 87,000 Team Members, of which approximately 750 are corporate personnel, including more than 250 in international markets. 11 Table of Contents BLOOMIN’ BRANDS, INC.
Team Members, including the following as of the period indicated: DECEMBER 25, 2022 KEY STATISTICS WOMEN PEOPLE OF COLOR (1) Restaurant Support Center 63% 21% Operations Leadership 38% 32% Hourly Team Members 52% 49% _________________ (1) Denotes U.S. Team Members that identify as Black/African American, Hispanic/Latinx, Asian, Native American, Pacific Islander or two or more races.
Team Members, including the following as of the period indicated: DECEMBER 31, 2023 KEY STATISTICS WOMEN PEOPLE OF COLOR (1) Restaurant Support Center 61% 23% Operations Leadership (2) 40% 32% Hourly Team Members 52% 50% _________________ (1) Denotes U.S. Team Members that identify as Black/African American, Hispanic/Latinx, Asian, Native American, Pacific Islander or two or more races.
Under the terms of the agreement, advertising fees were reduced to 2.25% of gross sales until December 31, 2023 or upon the earlier occurrence of certain specified events, including the sale of all or substantially all of the assets or equity of Out West, bankruptcy or a liquidation event.
Under the terms of the 2023 Resolution Agreement, advertising fees are reduced to 2.25% of gross sales 8 Table of Contents BLOOMIN’ BRANDS, INC. until December 27, 2026 or upon the earlier occurrence of certain specified events, including the sale of all or substantially all of the assets or equity of Out West, bankruptcy or a liquidation event.
We also developed an informational poster for all our restaurants, in English and Spanish, which provides the phone number, the web address for the reporting form, and a QR code to make it easy for our Team Members to report concerns. Finally, we have migrated to a hybrid work environment in the RSC.
We also developed an informational poster for our U.S. restaurants, in English and Spanish, which provides the phone number, the web address for the reporting form and a QR code to make it easy for our Team Members to report concerns. 12 Table of Contents BLOOMIN’ BRANDS, INC. Finally, we continue to support a hybrid work environment in the RSC.
(2) International Company-owned Other included two and four Aussie Grill locations as of December 26, 2021 and December 25, 2022, respectively. International Franchised Other included three and four Aussie Grill locations as of December 26, 2021 and December 25, 2022, respectively.
(3) International Company-owned Other included four and two Aussie Grill locations as of December 25, 2022 and December 31, 2023, respectively. International Franchised Other included four Aussie Grill locations as of December 25, 2022 and December 31, 2023.
We are investing in a cultural refresh in response to employees returning to the office after two years of working from home and to invigorate connection and inclusivity between the corporate and field teams. Diversity, Equity & Inclusion - We aim to cultivate a welcoming, safe and inclusive environment that celebrates diverse backgrounds and provides equitable access to opportunities.
We are investing in a cultural refresh in response to employees returning to the office and have renewed our RSC Principles & Beliefs to invigorate connection and inclusivity between th e corporate and field teams. Diversity, Equity & Inclusion - We aim to cultivate a welcoming, safe and inclusive environment that celebrates diverse backgrounds and provides equitable access to opportunities.
Our international operations are integrated with our corporate headquarters to leverage enterprise-wide capabilities, including marketing, finance, real estate, information technology, legal, human resources, supply chain management and productivity. As of December 25, 2022, in our international segment, we owned and operated 175 full-service restaurants and franchised 168 full-service restaurants and off-premises only kitchens across 13 countries and Guam.
Our international operations are integrated with our corporate headquarters to leverage enterprise-wide capabilities, including marketing, finance, real estate, information technology, legal, human resources, supply chain management and productivity. As of December 31, 2023, in our international segment, we owned and operated 191 restaurants and franchised 139 restaurants across 13 countries and Guam. See Item 2.
We are currently offering alcohol to-go from certain locations from each of our restaurant concepts.
We also offer alcohol to-go from certain locations from each of our restaurant concepts.
All contributions to the Trust are voluntary, employee-funded and are not solicited from suppliers, customers or friends. Due to the incredible generosity and caring nature of our Team Members, the Trust is able to make meaningful monetary support to our Team Members who experience very difficult, often unexpected and catastrophic issues, in their lives.
Due to the incredible generosity and caring nature of our Team Members, the Trust is able to make meaningful monetary support to our Team Members who experience very difficult, often unexpected and catastrophic issues, in their lives.
OSI Restaurant Partners, LLC (“OSI”), a wholly-owned subsidiary of Bloomin’ Brands, is our primary operating entity. MARKETS As of December 25, 2022, we owned and operated 1,186 full-service restaurants and off-premises only kitchens and franchised 321 full-service restaurants and off-premises only kitchens across 47 states, Guam and 13 countries.
OSI Restaurant Partners, LLC (“OSI”), a wholly-owned subsidiary of Bloomin’ Brands, is our primary operating entity. MARKETS As of December 31, 2023, we owned and operated 1,189 restaurants and franchised 291 restaurants across 47 states, Guam and 13 countries.
On December 27, 2020, we entered into an agreement (the “Resolution Agreement”) with Cerca Trova Southwest Restaurant Group, LLC (d/b/a Out West Restaurant Group) and certain of its affiliates (collectively, “Out West”), a franchisee of 79 Outback Steakhouse restaurants in the western United States as of December 25, 2022.
Effective December 31, 2023, we entered into an Amended & Restated Holistic Agreement (the “2023 Resolution Agreement”) with Cerca Trova Southwest Restaurant Group, LLC (d/b/a Out West Restaurant Group) and certain of its affiliates (collectively, “Out West”), a franchisee of 78 Outback Steakhouse restaurants in the western United States.
Deno has served as Chief Executive Officer and as a member of our Board of Directors since April 2019. Mr. Deno previously served as our Executive Vice President and Chief Financial and Administrative Officer from October 2013 to April 2019 and as Executive Vice President and Chief Financial Officer from May 2012 to October 2013.
Mr. Deno previously served as our Executive Vice President and Chief Financial and Administrative Officer from October 2013 to April 2019 and as Executive Vice President and Chief Financial Officer from May 2012 to October 2013. Prior to joining the Company, Mr.
Since 2017, the Trust has paid approximately $1.9 15 Table of Contents BLOOMIN’ BRANDS, INC. million to the benefit of over 1,400 Team Members who applied for support, including support to Team Members impacted by Hurricane Ian during 2022. We are inspired by the generosity of our Team Members and encourage them to give back to their communities.
Since 2017, the Trust has paid approximately $2.2 million to the benefit of over 1,500 Team Members who applied for support, including Team Members impacted by hurricanes and other natural disasters. We are inspired by the generosity of our Team Members and encourage them to give back to their communities.
General Counsel of Bloomin’ Brands from September 2015 to July 2019 and Vice President and Assistant General Counsel of Bloomin’ Brands from January 2008 to September 2015. She has also served as Secretary of Bloomin’ Brands since February 2016. Gregg Scarlett has served as Executive Vice President, Chief Operating Officer, Casual Dining Restaurants since February 2020. Mr.
General Counsel of Bloomin’ Brands from September 2015 to July 2019 and Vice President and Assistant General Counsel of Bloomin’ Brands from January 2008 to September 2015. She has also served as Secretary of Bloomin’ Brands since February 2016. Brett Patterson has served as Executive Vice President, President of Outback Steakhouse since November 2023. Mr.
Carrabba’s Italian Grill - Offering authentic Italian cuisine passed down from its founders’ family recipes, Carrabba’s Italian Grill uses high quality ingredients to prepare fresh and handmade dishes cooked to order in a lively exhibition kitchen.
The menu also offers a selection of specialty appetizers, including our signature Bloomin’ Onion ® , and desserts, together with full bar service. Carrabba’s Italian Grill - Offering authentic Italian cuisine passed down from its founders’ family recipes, Carrabba’s Italian Grill uses high-quality ingredients to prepare fresh and handmade dishes cooked to order in a lively exhibition kitchen.
In 2022, our Executive Leadership Team (“ELT”) engaged in quarterly diversity, equity and inclusion (“DE&I”) sessions curated and facilitated by a diversity consulting firm. In these sessions, ELT members learned key principles of DE&I and engaged in deep, enriching dialogue around potential gaps in our organization and industry and their individual and collective responsibility for sustaining change.
During 2023, our Executive Leadership Team (“ELT”) continued engaging in sessions curated and facilitated by a diversity consulting firm in partnership with our internal Inclusive Leadership Team. In these sessions, ELT members participated in deep, enriching dialogue around potential gaps in our organization and industry and their individual and collective responsibility for sustaining change.
Meyer previously served as Group Vice President, Finance, Treasury and Accounting from November 2017 to April 2019 and Group Vice President, Financial Planning & Analysis and Investor Relations from September 2014 to November 2017. Kelly Lefferts has served as Executive Vice President, Chief Legal Officer since July 2019. Ms. Lefferts served as Group Vice President and U.S.
Meyer previously served as Group Vice President, Finance, Treasury and Accounting from November 2017 to April 2019 and Group Vice President, Financial Planning & Analysis and Investor Relations from September 2014 to November 2017. In February 2024, Mr.
In addition, Team Members who were quarantined or who had a personal illness related to COVID-19 received pay. Employee Support and Community Engagement - Our commitment to our Team Members does not stop with competitive salaries, development and benefits. In 1999, we created a trust (the “Trust”) to support our Team Members in times of personal hardship.
Employee Support and Community Engagement - Our commitment to our Team Members does not stop with competitive salaries, development and benefits. In 1999, we created a trust (the “Trust”) to support our Team Members in times of personal hardship. All contributions to the Trust are voluntary, employee-funded and are not solicited from suppliers, customers or friends.
Other major commodity categories purchased include seafood, poultry, produce, dairy, bread, oils and pasta and energy sources to operate our restaurants, such as natural gas and electricity.
Due to the nature of our industry, we expect to continue purchasing a substantial amount of beef and pork from a small number of suppliers. Other major commodity categories purchased include seafood, poultry, produce, dairy, bread, oils and pasta and energy sources to operate our restaurants, such as natural gas and electricity.
In addition, improving product offerings and convenience options from quick service and fast-casual restaurants, “ghost” or “dark” kitchens where meals are prepared at a separate takeaway premises rather than a restaurant, and the expansion of home delivery services, together with negative economic conditions, could cause consumers to choose less expensive alternatives than our restaurants.
Further, improving product offerings and convenience options from quick-service and fast-casual restaurants, and the expansion of home delivery services, together with negative economic conditions, could cause consumers to choose less expensive 7 Table of Contents BLOOMIN’ BRANDS, INC. alternatives than our restaurants.
For most U.S. franchisees, there is a maximum of 8.0% of gross restaurant sales for combined national marketing and local advertising. (2) International franchisees must spend a certain percentage of gross sales on local advertising, which varies depending on the market.
(2) International franchisees must spend a certain percentage of gross sales on local advertising, which varies depending on the market.
Every employee, officer and director completes training annually. We also provide annual training to our Restaurant Partners and our RSC Team Members on our Code of Conduct, Preventing Discrimination and Harassment and Anti-Bribery and Anti-Corruption.
We provide annual training to our Restaurant Partners, Area Operating Partners, Market Vice Presidents and RSC Team Members on our Code of Conduct, Preventing Discrimination and Harassment and Anti-Bribery and Anti-Corruption. All field-level employees are also provided Preventing Discrimination and Harassment training.
We have seen improvements in diverse representation among our restaurant management teams and RSC while recognizing there is more work to be done.
Year over year, we have seen improvements in diverse representation among our restaurant management teams and RSC, including an increase of approximately 2% in representation of women within our Operational Leadership and people of color at the RSC, respectively, while recognizing there is more work to be done.
In recent years, we have made investments in a supply chain management system to improve inventory forecasting and replenishment in our restaurants, which helps us manage food quality and cost and reduce food waste. We also 10 Table of Contents BLOOMIN’ BRANDS, INC. continue to invest in a range of tools and infrastructure to support risk management and cyber security.
In past years, we made investments in a supply chain management system to improve inventory forecasting and replenishment in our restaurants, which helps us manage food quality and cost, and reduce food waste.
Out West also entered into a forbearance agreement with its lenders that, in conjunction with the Resolution Agreement, among other things, provides for a pre-determined calculation of available monthly cash (“Available Cash”) that Out West may use to settle its obligations due to us and its lenders. Under the Resolution Agreement, if 9 Table of Contents BLOOMIN’ BRANDS, INC.
Out West also entered into a forbearance agreement with its lenders that, in conjunction with the 2023 Resolution Agreement, provides, among other things, for a pre-determined calculation of available monthly cash (after payment of operating expenses, including rents, royalties, national advertising fees and local marketing expenditures) that Out West may use for capital expenditures and to settle its obligations due to its lenders.
We have a distribution program that includes food, non-alcoholic beverage, smallwares and packaging goods in all major markets. Where applicable, this program is managed by two custom distribution companies that only provide products approved for our system. These customized relationships enable our staff to effectively manage and prioritize our supply chain. Beef represents the majority of purchased proteins.
We also regularly monitor commodity markets and trends to execute product purchases at the most advantageous times. We have a distribution program that includes food, non-alcoholic beverage, smallwares and packaging goods in all major markets. Where applicable, this program is managed by custom distribution companies that only provide products approved for our system.
We maintain a robust incident response plan, conduct periodic tabletop scenarios and present cyber security program updates to our Audit Committee on a quarterly basis. Our integrated point-of-sale system allows us to transact business in our restaurants and communicate sales data through a secure corporate network to our enterprise resource planning system and data warehouse.
Our integrated point-of-sale system allows us to transact business in our U.S. restaurants and communicate sales data through a secure corporate network to our enterprise resource planning system and data warehouse.
Segment As of December 25, 2022, in our U.S. segment, we owned and operated 1,011 full-service restaurants and off-premises only kitchens and franchised 153 full-service restaurants across 47 states. Outback Steakhouse - Outback Steakhouse is a casual steakhouse restaurant concept focused on steaks, bold flavors and Australian decor.
Segment As of December 31, 2023, in our U.S. segment, we owned and operated 998 restaurants and franchised 152 restaurants across 47 states. Outback Steakhouse - Outback Steakhouse is a casual steakhouse restaurant concept focused on steaks, bold flavors and Australian decor. The Outback Steakhouse menu offers seasoned and seared grilled steaks, chops, chicken, seafood, pasta, salads and seasonal specials.
We are constantly working to improve how we support a more inclusive workplace for our Team Members and remain steadfast and relentless toward our goals in diversity and equity. We continually assess our overall racial and gender diversity at Bloomin’ Brands as we strive to reflect the diversity of the communities we serve.
We continually assess our overall racial and gender diversity at Bloomin’ Brands as we strive to reflect the diversity of the communities we serve.
RESOURCES Sourcing and Supply - We take a global approach to procurement and supply chain management, with our corporate team serving all U.S. and international concepts. In addition, we have dedicated supply chain management personnel for our Company-owned international operations in South America and Asia.
In addition, we have dedicated supply chain management personnel for our Company-owned international operations in South America and Asia. The global supply chain management organization is responsible for all food and operating supply purchases as well as a large percentage of purchases of field and corporate services.
Hospitality is at the heart of Fleming’s mission, but guests will see passion for prime steak, seafood, storied wines and handcrafted cocktails reflected across their range of menus. International Segment We have local management to support and grow restaurants in each of the countries where we have Company-owned operations.
Fleming’s Prime Steakhouse & Wine Bar offers an impressive range of USDA Prime steaks, premium seafood entrées, storied wines and fresh hand-crafted cocktails. International Segment We have local management to support and grow restaurants in each of the countries where we have Company-owned operations.
INTERNATIONAL Occasion: Outback Steakhouse Carrabba’s Italian Grill Bonefish Grill Fleming’s Prime Steakhouse & Wine Bar Outback Steakhouse Brazil In-restaurant sales 72 % 67 % 84 % 94 % 85 % Off-premises sales 28 % 33 % 16 % 6 % 15 % 100 % 100 % 100 % 100 % 100 % Sales mix by product type: Food & non-alcoholic beverage 92 % 89 % 81 % 79 % 91 % Alcoholic beverage 8 % 11 % 19 % 21 % 9 % 100 % 100 % 100 % 100 % 100 % Average check per person ($USD) $ 27 $ 24 $ 33 $ 98 $ 11 Average check per person (R$) R$ 57 Delivery - In March 2020, we pivoted to an off-premises only model in response to the COVID-19 pandemic.
INTERNATIONAL Occasion: Outback Steakhouse Carrabba’s Italian Grill Bonefish Grill Fleming’s Prime Steakhouse & Wine Bar Outback Steakhouse Brazil In-restaurant sales 74 % 67 % 84 % 95 % 86 % Off-premises sales 26 % 33 % 16 % 5 % 14 % 100 % 100 % 100 % 100 % 100 % Sales mix by product type: Food & non-alcoholic beverage 92 % 90 % 81 % 79 % 92 % Alcoholic beverage 8 % 10 % 19 % 21 % 8 % 100 % 100 % 100 % 100 % 100 % Average check per person ($USD) $ 28 $ 25 $ 34 $ 100 $ 13 Average check per person (R$) R$ 64 Unaffiliated Franchise Program - Our unaffiliated franchise agreements grant third parties the right to establish and operate a restaurant using one of our concepts.
Information About Our Executive Officers - Below is a list of the names, ages, positions and a brief description of the business experience of each of our executive officers as of February 16, 2023: NAME AGE POSITION David J.
Information About Our Executive Officers - Below is a list of the names, ages, positions and a brief description of the business experience of each of our executive officers as of February 23, 2024: NAME AGE POSITION David Deno 66 Chief Executive Officer Christopher Meyer 52 Executive Vice President, Chief Financial Officer Lissette Gonzalez 50 Executive Vice President, Chief Supply Chain and Operations Excellence Officer Mark Graff 44 Executive Vice President, President of Bonefish Grill and Fine Dining W.
The global supply chain management organization is responsible for all food and operating supply purchases as well as a large percentage of purchases of field and corporate services. We address the end-to-end costs associated with the products and goods we purchase by utilizing a combination of global, regional and local suppliers to capture efficiencies and economies of scale.
We address the end-to-end costs associated with the products and goods we purchase by utilizing a combination of global, regional and local suppliers to capture efficiencies and economies of scale. This “total cost of ownership” approach focuses on the initial purchase price, coupled with the cost structure underlying the procurement and order fulfillment process.
Murtha also previously served as Chairman of the Board and Managing Director of KFC, Japan, Ltd., Chief Operating Officer of Pizza Hut and Chief People Officer of Yum! Restaurants International. Philip Pace has served as Senior Vice President, Chief Accounting Officer since July 2022. Mr.
Prior to that, she served as our Vice President, Restaurant Technology from February 2020 to July 2020 and Director, International Information Technology from June 2015 to February 2020. Philip Pace has served as Senior Vice President, Chief Accounting Officer since July 2022. Mr.
Deno 65 Chief Executive Officer Christopher Meyer 51 Executive Vice President, Chief Financial Officer Kelly Lefferts 56 Executive Vice President, Chief Legal Officer and Secretary Gregg Scarlett 61 Executive Vice President, Chief Operating Officer, Casual Dining Restaurants Patrick Murtha 64 Executive Vice President, Fleming’s and International Philip Pace 48 Senior Vice President, Chief Accounting Officer Suzann Trevisan 51 Senior Vice President, Chief Human Resources Officer David J.
Michael Healy 49 Executive Vice President, Global Business Development and Strategy Kelly Lefferts 57 Executive Vice President, Chief Legal Officer and Secretary Brett Patterson 55 Executive Vice President, President of Outback Steakhouse Gregg Scarlett 62 Executive Vice President, Chief Operating Officer, Casual Dining Restaurants Astrid Isaacs 47 Senior Vice President, Chief Technology Officer Philip Pace 49 Senior Vice President, Chief Accounting Officer Suzann Trevisan 52 Senior Vice President, Chief Human Resources Officer David Deno has served as Chief Executive Officer and as a member of our Board of Directors since April 2019.
In 2022, we purchased our beef raw materials primarily from four beef suppliers in the U.S. and Brazil. Due to the nature of our industry, we expect to continue purchasing a substantial amount of beef from a small number of suppliers.
These customized relationships enable our staff to effectively manage and prioritize our supply chain. Beef and pork represent the majority of purchased proteins in the U.S. and Brazil, respectively. In 2023, our U.S. restaurants purchased beef raw materials primarily from four U.S. beef suppliers and our restaurants in Brazil purchased pork raw materials primarily from four pork suppliers in Brazil.
System-wide Restaurant Summary - Following is a system-wide rollforward of our full-service restaurants in operation during 2022: DECEMBER 26, 2021 2022 ACTIVITY DECEMBER 25, 2022 U.S. STATE Number of restaurants: OPENINGS CLOSURES COUNT U.S.
These investments have improved our cooking consistency, meal pacing and guest satisfaction while also providing a cost-saving opportunity for our Company. 6 Table of Contents BLOOMIN’ BRANDS, INC. System-wide Restaurant Summary - Following is a system-wide rollforward of our restaurants in operation during 2023: DECEMBER 25, 2022 2023 ACTIVITY DECEMBER 31, 2023 U.S.
Removed
The Outback Steakhouse menu offers seasoned and seared or wood-fire grilled steaks, chops, chicken, seafood, pasta, salads and seasonal specials. The menu also offers a selection of specialty appetizers, including our signature Bloomin’ Onion ® , and desserts, together with full bar service.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf we fail to adequately address environmental, social and governance (“ESG”) matters, including those related to climate change and sustainability, it could have an adverse effect on our business, financial condition, and operating results and may damage our reputation. In recent years, there has been an increasing focus from certain investors, customers, consumers, employees and other stakeholders concerning ESG matters.
Biggest changeIn recent years, there has been an increasing focus from certain investors, customers, consumers, employees, state, federal and international governments and agencies, and other stakeholders concerning corporate citizenship and sustainability matters, including practices and disclosures related to environmental stewardship; social responsibility; diversity, equity and inclusion; and workplace rights.
However, if we are unable to fully implement our disaster recovery plans, we may experience delays in recovery of data, inability to perform vital corporate functions, tardiness in required reporting and compliance, failures to adequately support field operations and other breakdowns in normal communication and operating procedures that could have a material adverse effect on our financial condition, results of operation and exposure to administrative and other legal claims.
However, if we are unable to fully implement our disaster recovery plans, we may experience delays in recovery of data, inability to perform vital corporate functions, tardiness in required reporting and compliance, failures to adequately support field operations and other breakdowns in normal communication and operating procedures that could have a material adverse effect on our financial condition, results of operations and exposure to administrative and other legal claims.
Terrorist attacks, heightened security requirements, attack of critical infrastructure, protests, demonstrations, riots, civil disturbance, disobedience, insurrection, customer intimidation, mass shootings or social and other political unrest, such as those seen in recent years, have and may continue to result in restrictions, curfews or other actions and give rise to significant changes in regional and global economic conditions.
Terrorist attacks, heightened security requirements, attacks of critical infrastructure, protests, demonstrations, riots, civil disturbance, disobedience, insurrection, customer intimidation, mass shootings or social and other political unrest, such as those seen in recent years, have and may continue to result in restrictions, curfews or other actions and give rise to significant changes in regional and global economic conditions.
If a virus is transmitted by human contact or respiratory transmission, our employees or guests could become infected, or could choose, or be advised, to avoid gathering in public places, any of which would adversely affect our restaurant guest traffic or perform functions at the corporate level.
If a virus is transmitted by human contact or respiratory transmission, our employees or guests could become infected, or could choose, or be advised, to avoid gathering in public places, any of which would adversely affect our restaurant guest traffic or our ability to perform functions at the corporate level.
The California Consumer Privacy Act, for example, became effective January 1, 2020 and provides a new private right of action to California residents related to data breaches and imposes new disclosure and other requirements on companies with respect to their data collection, use and sharing practices as they relate to California residents.
The California Consumer Privacy Act, for example, became effective January 1, 2020 and provides a private right of action to California residents related to data breaches and imposes disclosure and other requirements on companies with respect to their data collection, use and sharing practices as they relate to California residents.
Due to the nature of our industry, we expect to continue to purchase a substantial amount of our beef from a small number of suppliers. Global economic factors continue to place significant pressure on suppliers, making the supply environment more expensive and causing supply chain issues.
Due to the nature of our industry, we expect to continue to purchase a substantial amount of our beef and pork from a small number of suppliers. Global economic factors continue to place significant pressure on suppliers, making the supply environment more expensive and causing supply chain issues.
Further, if our suppliers or custom distributors are unable to fulfill their obligations under their contracts or we are unable to develop or maintain relationships with these or new suppliers or distributors, if needed, we could encounter supply shortages and incur higher costs.
Further, if our suppliers or distributors are unable to fulfill their obligations under their contracts or we are unable to develop or maintain relationships with these or new suppliers or distributors, if needed, we could encounter supply shortages and incur higher costs.
Although we segment our card data environment and employ a cyber security protection program based upon industry frameworks, as well as scan and improve our environment for any vulnerabilities, perform penetration testing and engage third parties to assess effectiveness of our security measures with oversight by our Audit Committee, there are no assurances that such programs will prevent or detect all potential cyber security breaches or technological failures.
Although we segment our card data environment and employ a cybersecurity protection program based upon industry frameworks, as well as scan and improve our environment for any vulnerabilities, perform penetration testing and engage third parties to assess effectiveness of our security measures with oversight by our Audit Committee, there are no assurances that such programs will prevent or detect all potential cybersecurity breaches or technological failures.
We depend on frequent deliveries of fresh food products that meet our specifications, and we have a limited number of suppliers and distributors for our major products, such as beef.
We depend on frequent deliveries of fresh food products that meet our specifications, and we have a limited number of suppliers and distributors for our major products, such as beef and pork.
In recent years, climate-related issues such drought and flooding in our key supplier region have led to volatility in the prices of our ingredients, such as produce and meats.
In recent years, climate-related issues, including drought and flooding in our key supplier region, have led to volatility in the prices of our ingredients, such as produce and meats.
Inaccurate employee FICA tax reporting could subject us to monetary liabilities, which could harm our business, results of operations and financial condition. 18 Table of Contents BLOOMIN’ BRANDS, INC. Failure to recruit, train and retain high-quality leadership, restaurant-level management and hourly team members may inhibit our ability to operate and grow successfully.
Inaccurate employee FICA tax reporting could subject us to monetary liabilities, which could harm our business, results of operations and financial condition. 17 Table of Contents BLOOMIN’ BRANDS, INC. Failure to recruit, train and retain high-quality leadership, restaurant-level management and hourly team members may inhibit our ability to operate and grow successfully.
A claim or investigation resulting from a cyber or other security threat to our systems and data may have a material adverse effect on our business and distract the management from running the business. Responses to cyber security also has the potential of incurring significant remediation costs, to the extent such costs are not covered by our applicable insurance policies.
A claim or investigation resulting from a cyber or other security threat to our systems and data may have a material adverse effect on our business and distract management from running the business. Responses to cybersecurity also have the potential of incurring significant remediation costs, to the extent such costs are not covered by our applicable insurance policies.
Further, poor economic conditions may force nearby businesses to shut down, which could cause our restaurant locations to be less attractive. 19 Table of Contents BLOOMIN’ BRANDS, INC. The restaurant industry is highly competitive and consumer options for other prepared food offerings continue to expand.
Further, poor economic conditions may force nearby businesses to shut down, which could cause our restaurant locations to be less attractive. 18 Table of Contents BLOOMIN’ BRANDS, INC. The restaurant industry is highly competitive and consumer options for other prepared food offerings continue to expand.
Changes in these rules or their interpretation or changes in underlying assumptions, estimates or judgments by us could significantly change our reported or expected financial performance. Our insurance policies may not provide adequate levels of coverage against all claims, and fluctuating insurance requirements and costs could negatively impact our profitability.
Changes in these rules or their interpretations or changes in underlying assumptions, estimates or judgments by us could significantly change our reported or expected financial performance. Our insurance policies may not provide adequate levels of coverage against all claims, and fluctuating insurance requirements and costs could negatively impact our profitability.
A variety of factors could cause the actual results and outcome of those plans to differ from the anticipated results, including among other things, the availability and terms on which we can lease attractive sites for new or relocated restaurants, availability and terms of funding, recruiting, training and retaining skilled management and restaurant employees, construction or other delays, the availability of construction materials or restaurant equipment, construction and renovation costs and consumer tastes and acceptance of our restaurant concepts and awareness of our brands in new regions.
A variety of factors could cause the actual results and outcome of those plans to differ from the anticipated results, including among other things, the selection of suitable locations for new or relocated restaurants, the availability and terms on which we can lease attractive sites for new or relocated restaurants, availability and terms of funding, recruiting, training and retaining skilled management and restaurant employees, construction or other delays, the availability of construction materials or restaurant equipment, construction and renovation costs and consumer tastes and acceptance of our restaurant concepts and awareness of our brands in new regions.
If we are unable to adequately maintain effective internal control over financial reporting, we may not be able to accurately report our financial results. Furthermore, we cannot be certain that our internal control over financial reporting and disclosure controls and procedures will prevent all possible error and fraud, including through cyber-attacks.
If we are unable to adequately maintain effective internal control over financial reporting, we may not be able to accurately report our financial results. Furthermore, we cannot be certain that our internal control over financial reporting and disclosure controls and procedures will prevent all possible errors and fraud, including through cyber-attacks.
Several jurisdictions also have implemented sick pay/paid time off legislation, which requires employers to provide paid time off to employees, and “just cause” termination legislation, which restricts companies’ ability to terminate employees unless they can prove “just cause” or a “bona fide economic reason” for the termination.
Several jurisdictions also have implemented sick pay/paid time off legislation, which requires employers to provide paid time off to employees, and “just cause” termination legislation, which restricts companies’ abilities to terminate employees unless they can prove “just cause” or a “bona fide economic reason” for the termination.
Our foreign operations are subject to all of the same risks as our U.S. restaurants, as well as additional risks including, among others, international economic, political, social and legal conditions and the possibility of instability and unrest, differing cultures and consumer preferences, diverse government regulations and tax systems, corruption, anti-American sentiment, the ability to source high quality ingredients and other commodities in a cost-effective manner, uncertain or differing interpretations of rights and obligations in connection with international franchise agreements and the collection of ongoing royalties from international franchisees, the availability and costs of land, construction and financing, and the availability of experienced management, appropriate franchisees and area operating partners. 23 Table of Contents BLOOMIN’ BRANDS, INC.
Our foreign operations are subject to all of the same risks as our U.S. restaurants, as well as additional risks including, among others, international economic, political, social and legal conditions and the possibility of instability and unrest, differing cultures and consumer preferences, diverse government regulations and tax systems, cybersecurity threats, corruption, anti-American sentiment, the ability to source high-quality ingredients and other commodities in a cost-effective manner, uncertain or differing interpretations of rights and obligations in connection 21 Table of Contents BLOOMIN’ BRANDS, INC. with international franchise agreements and the collection of ongoing royalties from international franchisees, the availability and costs of land, construction and financing, and the availability of experienced management, appropriate franchisees and operating partners.
Consumer preference on sourcing, or in response to environmental and animal welfare concern may also cause some groups of consumers to select foods other than those that are offered by our restaurants.
Consumer preference on sourcing, or in response to environmental and animal welfare concerns may also cause some groups of consumers to select foods other than those that are offered by our restaurants.
These laws and regulations relate to matters including employment discrimination, minimum wage requirements, scheduling, overtime, tip credits, unemployment tax rates, workers’ compensation rates, working conditions, immigration status, tax reporting and other wage and benefit requirements.
These laws and regulations relate to matters including employment discrimination, pay transparency, minimum wage requirements, scheduling, overtime, tip credits, unemployment tax rates, workers’ compensation rates, working conditions, immigration status, tax reporting and other wage and benefit requirements.
As cyber security risk and applicable laws and regulations evolve, we may incur significant additional costs in technology, third-party services and personnel to maintain systems designed to anticipate and prevent cyber-attacks. We are subject to a variety of continuously evolving laws and regulations regarding privacy, data protection and data security at federal, state and international levels.
As cybersecurity risks and applicable laws and regulations evolve, we may incur significant additional costs in technology, third-party services and personnel to maintain systems designed to anticipate and prevent cyber-attacks. We are subject to a variety of continuously evolving laws and regulations regarding privacy, data protection and data security at federal, state and international levels.
Certain of our debt agreements limit our and our subsidiaries’ abilities to, among other things, incur or guarantee additional indebtedness, pay dividends on, redeem or repurchase our capital stock, make certain acquisitions or investments, incur or permit to exist certain liens, enter into transactions with affiliates or sell our assets to, merge or consolidate with or into, another company.
Certain of our debt agreements limit our and our subsidiaries’ abilities to, among other things, incur or guarantee additional indebtedness, pay dividends above certain thresholds, redeem or repurchase our capital stock, make certain acquisitions or investments, incur or permit to exist certain liens, enter into transactions with affiliates or sell our assets to, merge or consolidate with or into, another company.
If we are unable to continue to compete effectively, our traffic, sales and margins could decline and our business, financial condition and results of operations would be adversely affected. Cyber security breaches of confidential consumer, personal employee and other material information and other threats to our technological systems may adversely affect our business.
If we are unable to continue to compete effectively, our traffic, sales and margins could decline and our business, financial condition and results of operations would be adversely affected. Cybersecurity breaches of confidential consumer, personal employee and other material information and other threats to our technological systems may adversely affect our business.
These factors include actual or anticipated fluctuations in our operating results, changes in or our ability to achieve estimates of our operating results by analysts, investors or management, analysts’ recommendations regarding our stock or our competitors’ stock, sales of substantial amounts of our 30 Table of Contents BLOOMIN’ BRANDS, INC. common stock by our stockholders, actions or announcements by us or our competitors, the maintenance and growth of the value of our brands, litigation, legislation or other regulatory developments affecting us or our industry, widespread/pandemic illness, natural disasters, cyber-attacks, terrorist acts, war or other calamities and changes in general market and economic conditions.
These factors include actual or anticipated fluctuations in our operating results, changes in or our ability to achieve estimates of our operating results by analysts, investors or management, analysts’ recommendations regarding our stock or our competitors’ stock, sales of substantial amounts of our common stock by our stockholders, actions or announcements by us or our competitors, the maintenance and growth of the value of our brands, litigation, legislation or other regulatory developments affecting us or our industry, widespread/pandemic illness, natural disasters, cyber-attacks, terrorist acts, war or other calamities and changes in general market and economic conditions.
We carry insurance programs with specific retention levels or high per-claim deductibles for a significant portion of our risks and associated liabilities with respect to workers’ compensation, general liability, liquor liability, employment practices liability, property, health benefits, cyber security and other insurable risks.
We carry insurance programs with specific retention levels or high per-claim deductibles for a significant portion of our risks and associated liabilities with respect to workers’ compensation, general liability, liquor liability, employment practices liability, property, health benefits, cybersecurity and other insurable risks.
Supply shortages or disruptions caused by inclement weather, climate change, natural disasters, pandemics (including COVID-19), armed conflict, sanctions, financial or solvency issues of our suppliers or distributors, fuel increases or other conditions beyond our control could adversely affect our operations and operating results.
Supply shortages or disruptions caused by inclement weather, climate change, natural disasters, pandemics, armed conflict, sanctions, financial or solvency issues of our suppliers or distributors, fuel increases or other conditions beyond our control could adversely affect our operations and operating results.
Our leverage could have important consequences, including: • making it more difficult for us to make payments on indebtedness; • increasing our vulnerability to general economic, industry and competitive conditions and the various risks we face in our business; 29 Table of Contents BLOOMIN’ BRANDS, INC. • increasing our cost of borrowing or limiting our ability to obtain additional financing if needed; • reducing our ability to use our cash flow to fund our operations, capital expenditures, dividend payments, and future business and strategic opportunities; and • limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors who may not be as highly leveraged.
Our leverage could have important consequences, including: • making it more difficult for us to make payments on indebtedness; • increasing our vulnerability to general economic, industry and competitive conditions and the various risks we face in our business; • increasing our cost of borrowing or limiting our ability to obtain additional financing if needed; • reducing our ability to use our cash flow to fund our operations, capital expenditures, dividend payments, and future business and strategic opportunities; and • limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors who may not be as highly leveraged.
If we issue new debt securities, the debt holders would have rights senior to common stockholders to make claims on our assets, and the terms of any debt could restrict our operations, including our ability to pay dividends on our common stock.
If we issue new debt securities, the debt holders would have rights senior to common stockholders to make claims on our assets, and the terms of any debt could restrict our operations, including our ability to pay dividends above certain thresholds on our common stock.
Although 27 Table of Contents BLOOMIN’ BRANDS, INC. we cannot predict when or where we will be negatively impacted by adverse weather events, to the extent that climate change or other factors result in more frequent, widespread or severe events, it could adversely impact our results.
Although 25 Table of Contents BLOOMIN’ BRANDS, INC. we cannot predict when or where we will be negatively impacted by widespread illnesses or pandemics, adverse weather events, to the extent that climate change or other factors result in more frequent, widespread or severe events, it could adversely impact our results.
Local or regional events or conditions in our international markets could disrupt our business operations and affect our results. In recent years, there were protests in cities throughout the U.S. as well as globally, including in Hong Kong and Brazil, in connection with civil rights, liberties, and social and governmental reform.
Local or regional events or conditions in our international markets could disrupt our business operations and affect our results. In recent years, there were protests in cities throughout the United States as well as globally, including in Hong Kong and Brazil, in connection with civil rights, liberties, and social and governmental reform.
Governmental regulations or other health guidelines concerning operations of stores, including due to the COVID-19 pandemic or other public health emergencies may also cause disruptions in our plans. It is difficult to estimate the performance of newly opened restaurants and whether they may attract customers away from other restaurants we own.
Governmental regulations or other health guidelines concerning the operations of restaurants, including due to public health emergencies, may also cause disruptions in our plans. It is difficult to estimate the performance of newly opened restaurants and whether they may attract customers away from other restaurants we own.
Despite our security measures, our technology systems may be vulnerable to damage, disability or failures due to physical theft, fire, power loss, telecommunications failure or other catastrophic events, as well as from internal and external security breaches, employee error or malfeasance, denial of service, hacking, “phishing” attacks, social engineering, malware, ransomware, viruses, worms and other attacks or disruptive 20 Table of Contents BLOOMIN’ BRANDS, INC. problems, which have increased in sophistication, frequency and duration in recent years.
Despite our security measures, our technology systems may be vulnerable to damage, disability or failures due to physical theft, fire, power loss, telecommunications failure or other catastrophic events, as well as from internal and external security breaches, employee error or malfeasance, denial of service, hacking, “phishing” attacks, social engineering, malware, ransomware, viruses, worms and other attacks or disruptive problems, which have increased in sophistication, frequency and duration in recent years.
We cannot be certain that we will maintain a level of cash flow from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness, or to pay our operating lease obligations. For example, if COVID-19 capacity restrictions reoccur, inflation persists, or our financial position deteriorates, our revenues and liquidity position may decline.
We cannot be certain that we will maintain a level of cash flow from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness, or to pay our operating lease obligations. For example, if inflation persists, or our financial position deteriorates, our revenues and liquidity position may decline.
If we fail to achieve any goals, targets, or objectives we may set with respect to ESG matters, if we do not meet or comply with new regulations or evolving consumer, investor, industry, or stakeholder expectations and standards, including those related to reporting, or if we are perceived to have not responded appropriately to the growing concern for ESG matters, we may face legal or regulatory actions, the imposition of fines, penalties, or other sanctions, adverse publicity, and decreased demand from consumers, or the price of our common stock could decline, any of which could materially harm our reputation or have a material adverse effect on our business, financial condition, or operating results.
If we fail to achieve goals, targets, or objectives we may set with respect to corporate citizenship and sustainability matters, if we do not meet or comply with new regulations or evolving consumer, investor, industry, or stakeholder expectations and standards, including those related to reporting, or if we are perceived to have not responded appropriately to the growing concern for corporate citizenship and sustainability matters, we may face legal or regulatory actions, the imposition of fines, penalties, or other sanctions, adverse publicity, and decreased demand 22 Table of Contents BLOOMIN’ BRANDS, INC. from consumers, or the price of our common stock could decline, any of which could materially harm our reputation or have a material adverse effect on our business, financial condition, or operating results.
The failure to meet our debt service obligations or the failure to remain in compliance with the financial covenants under our debt agreements would constitute an event of default under those agreements and the lenders could elect to declare all amounts outstanding under them to be immediately due and payable and terminate all commitments to extend further credit.
The failure to meet our debt service obligations or the failure to remain in compliance with the financial covenants under our debt agreements would constitute an event of default under those agreements and the lenders could elect to declare all amounts outstanding under them to be immediately due and payable and terminate all commitments to extend further credit. 27 Table of Contents BLOOMIN’ BRANDS, INC.
Regardless of the ultimate success of any initiative, the implementation and integration of new business or operational processes could be disruptive to our current operations. Even if we test and evaluate an initiative on a limited basis, the diversion of management time and resources could have an adverse effect on our business.
Regardless of the ultimate success of any initiative, the implementation and integration of new business or operational processes could be disruptive to our current operations. Even if we test and evaluate an initiative on a limited basis, the diversion of management time and resources could have an adverse effect on our business. 26 Table of Contents BLOOMIN’ BRANDS, INC.
In addition, if any of our suppliers or distributors were unable to fulfill their responsibilities or we were unable to maintain current purchasing terms or ensure service availability and we were unable to locate substitutes in a timely manner, especially given the prolonged effects of COVID-19, we may encounter supply shortages, lose consumers and experience an increase in costs in seeking alternative supplier or distribution services.
In addition, if any of our suppliers or distributors were unable to fulfill their responsibilities or we were unable to maintain current purchasing terms or ensure service availability and we were unable to locate substitutes in a timely manner, we may encounter supply shortages, lose consumers and experience an increase in costs in seeking alternative supplier or distribution services.
A significant financial reporting failure or a lack of sufficient internal control over financial reporting could cause a loss of investor confidence and decline in the market price of our common stock, increase our costs, lead to litigation or result in negative publicity that could damage our reputation. 31 Table of Contents BLOOMIN’ BRANDS, INC.
A significant financial reporting failure or a lack of sufficient internal control over financial reporting could cause a loss of investor confidence and decline in the market price of our common stock, increase our costs, lead to litigation or result in negative publicity that could damage our reputation.
These matters typically involve claims by consumers and others regarding issues such as food borne illness, food safety, premises liability, personal injury, discrimination, “dram shop” statute liability, promotional advertising and other 28 Table of Contents BLOOMIN’ BRANDS, INC. operational issues common to the food service industry, as well as environmental, data privacy, contract disputes and intellectual property infringement matters.
These matters typically involve claims by consumers and others regarding issues such as food borne illness, food safety, premises liability, personal injury, discrimination, “dram shop” statute liability, promotional advertising and other operational issues common to the food service industry, as well as environmental, data privacy, contract disputes and intellectual property infringement matters.
Risks associated with our remodeling, relocation and expansion plans may have adverse effects on our operating results. As part of our business strategy, we intend to continue to remodel, relocate and expand our current portfolio of restaurants. Our 2023 development schedule calls for the construction of approximately 30 to 35 new system-wide locations, with approximately 20 in Brazil.
Risks associated with our remodeling, relocation and expansion plans may have adverse effects on our operating results. As part of our business strategy, we intend to continue to remodel, relocate and expand our current portfolio of restaurants. Our 2024 development schedule calls for the construction of approximately 40 to 45 new system-wide locations, with approximately half in Brazil.
In addition, these threats are constantly evolving, which increases the difficulty of accurately and timely predicting, planning for and protecting against the threat. As a result, our disaster recovery procedures and business continuity plans security may not adequately address all threats we face or protect us from loss. There are risks and uncertainties associated with initiatives that we may implement.
In addition, these threats are constantly evolving, which increases the difficulty of accurately and timely predicting, planning for and protecting against the threat. As a result, our disaster recovery procedures and business continuity plans may not adequately address all threats we face or protect us from loss.
We have disaster recovery procedures and business continuity plans in place to address crisis-level events, including hurricanes and other natural disasters, and back up and off-site locations for recovery of electronic and other forms of data and information, and the COVID-19 pandemic has provided a limited test of our ability to manage our business remotely.
We have disaster recovery procedures and business continuity plans in place to address crisis-level events, including hurricanes and other natural disasters, and back up and off-site locations for recovery of electronic and other forms of data and information, and the ability to manage our business remotely.
We are subject to various federal and state employment and labor laws and regulations. Various employment and labor laws and regulations govern our relationships with our employees throughout the world and affect operating costs.
We are subject to various federal and state employment and labor laws and regulations. We and our vendors are subject to various employment and labor laws and regulations governing relationships with employees throughout the world and changes to laws and regulations may affect operating costs.
Additionally, if our insurance costs increase, there can be no assurance that we will be able to successfully offset the effect of such increases and our results of operations may be adversely affected.
Additionally, if our insurance costs increase, there can be no assurance that we will be able to successfully offset the effect of such increases and our results of operations may be adversely affected. Item 1B. Unresolved Staff Comments Not applicable.
Unforeseen events, for example the COVID-19 pandemic, could make developing forecasts for, and the accounting of, valuation of goodwill and certain other assets slower and more difficult. Should the value of goodwill or other intangible or long-lived assets become impaired, there could be an adverse effect on our financial condition and consolidated results of operations.
Unforeseen events could make developing forecasts for, and the accounting of, valuation of goodwill and certain other assets slower and more difficult. Should the value of goodwill or other intangible or long-lived assets become impaired, there could be an adverse effect on our financial condition and consolidated results of operations. 29 Table of Contents BLOOMIN’ BRANDS, INC.
Our success depends on our ability to preserve and grow our brands. Our brand value and reputation are especially important to differentiate our concepts in the highly competitive casual dining sector to achieve sustainable same-restaurant sales growth and warrant new unit growth.
Our brand value and reputation are especially important to differentiate our concepts in the highly competitive casual dining sector to achieve sustainable same-restaurant sales growth and warrant new unit growth.
Our success will continue to depend, to a significant extent, on our leadership team and other key management personnel. The “great resignation” trend that began in 2021 in the United States has further strained and could continue to strain our ability to keep our restaurants fully staffed.
Our success will continue to depend, to a significant extent, on our leadership team and other key management personnel. The tight labor market in the United States has further strained and could continue to strain our ability to keep our restaurants fully staffed.
During 2022, we purchased: (i) more than 95% of our U.S. beef raw materials from four beef suppliers that represent more than 80% of the total beef marketplace in the U.S. and (ii) more than 95% of our Brazil beef raw materials from four beef suppliers that represent more than 50% of the total beef marketplace in Brazil.
During 2023, we purchased: (i) more than 95% of our U.S. beef raw materials from four beef suppliers that represent a significant portion of the total beef marketplace in the U.S. and (ii) more than 80% of our Brazil pork raw materials from four pork suppliers that represent more than 45% of the total pork marketplace in Brazil.
We may also incur costs of and challenges in ensuring compliance with measures implemented in response to COVID-19, such as requirements for physical barriers or other preventative measures in restaurants or vaccination or testing requirements for our employees, which can vary by the location of the restaurant and may continue to change.
We may also incur costs of and challenges in 23 Table of Contents BLOOMIN’ BRANDS, INC. ensuring compliance with measures implemented in response to a widespread illness or a pandemic, such as requirements for physical barriers or other preventative measures in restaurants or vaccination or testing requirements for our employees, which can vary by the location of the restaurant and may continue to change.
Further, concern over climate change and other environmental sustainability matters, has and may in the future result in new or increased legal and regulatory requirements to reduce or mitigate impacts to the environment, including greenhouse gas emissions regulations, alternative energy policies, water consumption and sustainability initiatives.
Further, concern over climate change and other environmental sustainability matters, has and may in the future result in new or increased legal and federal and state regulatory requirements to provide extensive disclosure regarding and to reduce or mitigate impacts to the environment, including greenhouse gas emissions, alternative energy policies, water consumption, packaging and waste management, responsible sourcing and other sustainability initiatives.
Any significant additional government regulations and new laws governing our relationships with employees, including minimum wage increases, regulations relating to union organizing rights and activities, mandated benefits or other requirements that impose additional obligations on us, including any temporary or permanent measures implemented in response to COVID-19, could increase our costs and adversely affect our business and results of operations.
Any significant additional government regulations and new laws governing relationships with employees, including minimum wage increases, regulations relating to union organizing rights and activities, the employment status of third-party delivery drivers, mandated benefits or other requirements that impose additional obligations on us, could increase our costs and adversely affect our business and results of operations.
Beef is a significant cost to us, and we may also incur higher costs to secure adequate suppliers or make substantial changes to our menu offerings, at the risk of materially 21 Table of Contents BLOOMIN’ BRANDS, INC. adverse harm to our business.
Beef and pork are a significant cost to us, and we may also incur higher costs to secure adequate suppliers or make substantial changes to our menu offerings, at the risk of material adverse harm to our business.
A regional or global health pandemic might also adversely affect our business by disrupting or delaying production and delivery of materials and products in our supply chain and by causing staffing shortages in our stores.
A regional or global health pandemic might also adversely affect our business by disrupting or delaying production and delivery of materials and products in our supply chain and by causing staffing shortages in our stores. There are risks and uncertainties associated with initiatives that we may implement.
Our stock price is subject to volatility. The stock market in general is highly volatile. As a result, the market price of our common stock is similarly volatile. The price of our common stock could be subject to wide fluctuations in response to a number of factors, some of which may be beyond our control.
The price of our common stock could be subject to wide fluctuations in response to a number of factors, some of which may be beyond our control.
Our effective income tax rate and other taxes in the future could be adversely affected by a number of factors, including changes in the mix of earnings in countries with different statutory tax rates, changes in the valuation of deferred tax assets and liabilities, “ownership change” as defined under Section 382 of the Internal Revenue Code, changes in U.S. or foreign tax laws including the impact of Base Erosion and Profits Shifting (“BEPS”) model rules, comprehensive tax reform measures or other legislative changes and the outcome of income tax audits and tax litigation.
Our effective income tax rate and other taxes in the future could be adversely affected by a number of factors, including changes in the mix of earnings in countries with different statutory tax rates, changes in the valuation of deferred tax assets and liabilities, an “ownership change” as defined under Section 382 of the Internal Revenue Code, changes in U.S. or foreign tax laws, including the proposed 15% global minimum tax under the Organization for Economic Co-operation and Development (“OECD”) Pillar Two (“Pillar Two”), Global Anti-Base Erosion rules, uncertainty in the interpretation of tax laws, comprehensive tax reform measures or other legislative changes, and the outcome of income tax audits and tax litigation, such as in Brazil.
These provisions may discourage, delay or prevent a transaction involving a change in control of the Company that is in the best interests of our stockholders. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stock if they are viewed as discouraging future takeover attempts.
Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stock if they are viewed as discouraging future takeover attempts.
Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, our stockholders bear the risk of our future securities offerings reducing the market price of our common stock and diluting their interest.
Because our decision to issue securities in any future offering will depend on market 28 Table of Contents BLOOMIN’ BRANDS, INC. conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings.
As we have experienced with the COVID-19 pandemic, if a regional or global health pandemic occurs, depending upon its location, duration and severity, our business could be severely affected.
The United States and other countries have experienced, or may experience in the future, outbreaks of viruses or other diseases, including the COVID-19 pandemic. If a regional or global health pandemic occurs, depending upon its location, duration and severity, our business could be severely affected.
Compliance with these laws and 25 Table of Contents BLOOMIN’ BRANDS, INC. regulations can be costly, and any failure or perceived failure to comply with these laws or any breach of our systems could harm our reputation or lead to litigation, which could adversely affect our financial condition.
We are subject to laws relating to information security, cashless payments and consumer credit, protection and fraud. Compliance with these laws and regulations can be costly, and any failure or perceived failure to comply with these laws or any breach of our systems could harm our reputation or lead to litigation, which could adversely affect our financial condition.
The failure to develop and maintain supplier and distributor relationships and any resulting disruptions to the provision of food and other supplies to our restaurant locations could adversely affect our operating results.
The failure to develop and maintain supplier and distributor relationships and any resulting disruptions to the provision of food and other supplies to our restaurant locations could adversely affect our operating results. Our inability or failure to recognize, respond to and effectively manage the accelerated impact of social media could have a material adverse impact on our business.
As of December 25, 2022, our total net indebtedness was $833.3 million and we had $550.0 million in available unused borrowing capacity under our revolving credit facility, net of undrawn letters of credit of $20.0 million.
As of December 31, 2023, our total net indebtedness was $780.7 million and we had $599.2 million in available unused borrowing capacity under our revolving credit facility, net of undrawn letters of credit of $19.8 million.
Changes in tax laws and unanticipated tax liabilities could adversely affect the taxes we pay and our profitability. We are subject to income and other taxes in the United States and numerous foreign jurisdictions.
We are subject to income and other taxes in the United States and numerous foreign jurisdictions.
Failure to comply with any such legal requirements could subject us to monetary liabilities and other sanctions, which could harm our business, results of operations and financial condition.
Failure to comply with any such legal requirements could subject us to monetary liabilities and other sanctions, which could harm our business, results of operations and financial condition. If we fail to adequately address corporate citizenship and sustainability matters, it could have an adverse effect on our business, financial condition, and operating results and may damage our reputation.
Our certificate of incorporation and bylaws include certain provisions (including provisions related to our classified board structure through 2024) that could have the effect of discouraging, delaying or preventing a change of control of our company or changes in our management.
Our certificate of incorporation and bylaws include certain provisions that could have the effect of discouraging, delaying or preventing a change of control of our Company or changes in our management. These provisions may discourage, delay or prevent a transaction involving a change in control of the Company that is in the best interests of our stockholders.
As a result, the nature, timing and impact on our business of potential changes to the current legal and regulatory frameworks are uncertain. It is also difficult to predict what the long-term economic impacts of the ongoing COVID-19 pandemic may be.
As a result, the nature, timing and impact on our business of potential changes to the current legal and regulatory frameworks are uncertain.
In addition, our competitors may generate or better implement business strategies that improve the value and relevance of their brands and reputation, relative to ours. For example, our competitors may more successfully implement menu or technology initiatives, such as remote ordering, social media or mobile technology platforms that expedite or enhance the customer experience.
For example, our competitors may more successfully implement menu or technology initiatives, such as remote ordering, social media or mobile technology platforms that expedite or enhance the customer experience, or artificial intelligence to develop new customer insights.
Increased focus and activism related to ESG may also result in investors reconsidering their investment decisions as a result of their assessment of a company’s ESG practices.
We may also determine that certain changes are required in anticipation of further evolution of consumer preferences and demands. Increased focus and activism related to corporate citizenship and sustainability may also result in investors reconsidering their investment decisions as a result of their assessment of a company’s corporate citizenship and sustainability practices.
The availability of information on social media platforms is virtually immediate as is its impact, and users can post information often without filters or checks on the accuracy of the content posted. Adverse or inaccurate information concerning our Company or concepts may be posted at any time, and such information can quickly reach a wide audience.
Social media allows individuals to access a broad audience of consumers and other interested persons. The availability of information on social media platforms is virtually immediate as is its impact, and users can post information often without filters or checks on the accuracy of the content posted.
We are anticipating mid single digits inflation for both commodities and labor during 2023, but there can be no assurance it will not be greater than that or that we will be able to pass through increased costs in our prices.
We are anticipating 3% to 4% commodity inflation for 2024, but there can be no assurance that our expectations will be accurate or that we will be able to efficiently pass through any increased costs in our prices.
Failure to achieve such desired savings could adversely affect our results of operations and financial condition and curtail investment in growth opportunities. 26 Table of Contents BLOOMIN’ BRANDS, INC. Our success depends substantially on the value of our brands and our ability to execute innovative marketing and consumer relationship initiatives to maintain brand relevance and drive profitable sales growth.
Our success depends substantially on the value of our brands and our ability to execute innovative marketing and consumer relationship initiatives to maintain brand relevance and drive profitable sales growth. Our success depends on our ability to preserve and grow our brands.
Our dependence on a small number of suppliers subjects us to the risks of ingredient shortage, supply interruption, animal disease outbreak, and price volatility. An external disruption or an internal dispute that forces us to sever ties with our suppliers may not enable us to find a suitable replacement in a timely or cost-efficient manner.
Our dependence on a small number of suppliers subjects us to the risks of ingredient shortage, supply interruption, animal disease outbreak, and price volatility.
These demands could require additional transparency, due diligence, and reporting and could cause us to incur additional costs or to make changes to our operations to comply with such demands. We may also determine that certain changes are required in anticipation of further evolution of consumer preferences and demands.
Changing consumer preferences may result in increased demands regarding our products and supply chain and their respective environmental and social impact, including on sustainability. These demands could require additional transparency, due diligence, and reporting and could cause us to incur additional costs or to make changes to our operations to comply with such demands.
These strategies include improved supply chain management, implementing labor scheduling tools and integrating restaurant information systems across our brands. In addition, during 2020, we implemented certain measures to reduce costs and preserve liquidity in response to the impacts of COVID-19.
These strategies include improved supply chain management, implementing labor scheduling tools, improvements in kitchen equipment and integrating restaurant information systems across our brands. We continue to evaluate and implement further cost-saving initiatives.
If we are unable to anticipate or successfully respond to changes in consumer preferences, our results of operations could be adversely affected, generally or in particular concepts or markets. 24 Table of Contents BLOOMIN’ BRANDS, INC. Our relationships with third-party delivery services and ability to grow sales through delivery orders are subject to risks.
If we are unable to anticipate or successfully respond to changes in consumer preferences, our results of operations could be adversely affected, generally or in particular concepts or markets. Changes in tax laws, uncertainty in the judicial interpretation of those laws and unanticipated tax liabilities could adversely affect the taxes we pay and our profitability.
Removed
In addition, the effects on the global economy from the ongoing conflict in the Ukraine, particularly if it escalates or broadens, are uncertain.
Added
Further, it is difficult to predict what impact, if any, the U.S. presidential and congressional elections and their outcomes could have on consumer confidence and discretionary spending. In addition, the effects on the global economy from the ongoing conflicts in Israel and Ukraine, particularly if they escalate or broaden, are uncertain.
Removed
In addition, our competitors may more successfully implement delivery and off-site initiatives or implement other measures to better address COVID-related business risks.
Added
In addition, our competitors may generate or better implement business strategies that improve the value and relevance of their brands and reputation, relative to ours.
Removed
The COVID-19 pandemic has disrupted and may continue to disrupt our business, and could continue to materially and adversely affect our business, revenues, financial condition and results of operations for an extended period of time. The COVID-19 pandemic and related preventative and protective measures have negatively impacted, and may continue to negatively impact, our business globally.
Added
In addition, the rapid 19 Table of Contents BLOOMIN’ BRANDS, INC. evolution and increased adoption of artificial intelligence technologies may increase our cybersecurity risks, including generative artificial intelligence augmenting threat actors’ technological sophistication to enhance existing or create new malware.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following is a summary of our restaurant and kitchen locations by country and territory as of December 25, 2022: COMPANY-OWNED FRANCHISED United States 1,011 United States 153 International: International: Brazil (1) 154 Argentina 2 Japan 9 China (Mainland) 1 Australia 8 Mexico 5 Hong Kong 20 Canada 3 Qatar 5 Total international Company-owned 175 Costa Rica 2 Saudi Arabia 11 Dominican Republic 1 South Korea 121 Guam 1 Total international franchised 168 Total Company-owned 1,186 Total franchised 321 ____________________ (1) The count for Brazil is reported as of November 30, 2022 to correspond with the balance sheet date of this subsidiary.
Biggest changeThe following is a summary of our restaurant locations by country and territory as of December 31, 2023: COMPANY-OWNED FRANCHISED United States (1) 998 United States 152 International: International: Brazil (2) 172 Argentina 3 Japan 9 China (Mainland) 1 Australia 8 Mexico 4 Hong Kong 18 Canada 3 Qatar 6 Total international Company-owned 191 Costa Rica 2 Saudi Arabia 10 Dominican Republic 1 South Korea (1) 92 Guam 1 Total international franchised 139 Total Company-owned 1,189 Total franchised 291 ____________________ (1) Restaurant property counts exclude one and four off-premises only kitchens from Company-owned United States and franchised South Korea totals, respectively.
Item 2. Properties We had 1,507 system wide full-service restaurants and off-premises only kitchens located across 47 states, Guam and 13 countries as of December 25, 2022.
Item 2. Properties We had 1,480 system-wide restaurants located across 47 states, Guam and 13 countries as of December 31, 2023.
INTERNATIONAL TOTAL PERCENTAGE OF TOTAL Company-owned sites 26 — 26 2 % Leased sites: Land, ground and building leases 693 1 694 59 % Space and in-line leases 292 174 466 39 % Total Company-owned restaurant sites 1,011 175 1,186 100 % We also lease corporate offices in Tampa, Florida and São Paulo, Brazil.
INTERNATIONAL TOTAL PERCENTAGE OF TOTAL Company-owned sites 25 — 25 2 % Leased sites: Land, ground and building leases 692 1 693 58 % Space and in-line leases 281 190 471 40 % Total Company-owned restaurant sites 998 191 1,189 100 % We also lease corporate offices in Tampa, Florida and São Paulo, Brazil.
We lease substantially all of our restaurant properties from third parties. As of December 25, 2022, our Company-owned restaurants were located on the following sites by segment: U.S.
(2) The count for Brazil is reported as of November 30, 2023 to correspond with the balance sheet date of this subsidiary. We lease substantially all of our restaurant properties from third parties. As of December 31, 2023, our Company-owned restaurants were located on the following sites by segment: U.S.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers - The following table provides information regarding our purchases of common stock during the thirteen weeks ended December 25, 2022: REPORTING PERIOD TOTAL NUMBER OF SHARES PURCHASED AVERAGE PRICE PAID PER SHARE TOTAL NUMBER OF SHARES PURCHASED AS PART OF PUBLICLY ANNOUNCED PLANS OR PROGRAMS APPROXIMATE DOLLAR VALUE OF SHARES THAT MAY YET BE PURCHASED UNDER THE PLANS OR PROGRAMS (1) September 26, 2022 through October 23, 2022 558,359 $ 19.70 558,359 $ 33,000,386 October 24, 2022 through November 20, 2022 356,949 $ 23.11 356,949 $ 24,750,618 November 21, 2022 through December 25, 2022 455,628 $ 21.40 455,628 $ 15,000,648 Total 1,370,936 1,370,936 ____________________ (1) On February 8, 2022, our Board 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 (the “2022 Share Repurchase Program”).
Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers - The following table provides information regarding our purchases of common stock during the fourteen weeks ended December 31, 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) September 25, 2023 through October 22, 2023 269,131 $ 23.78 269,131 $ 81,461,316 October 23, 2023 through November 19, 2023 137,044 $ 23.35 137,044 $ 78,261,379 November 20, 2023 through December 31, 2023 329,103 $ 25.10 329,103 $ 70,000,707 Total 735,278 735,278 ____________________ (1) On February 7, 2023, our Board approved a share repurchase authorization of up to $125.0 million of our outstanding common stock as announced in our press release issued February 16, 2023 (the “2023 Share Repurchase Program”).
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information - Our common stock is listed on the Nasdaq Global Select Market under the symbol “BLMN”. Dividends - In February 2022, our Board of Directors (our “Board”) reinstated quarterly dividends after a temporary suspension during the COVID-19 pandemic.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information - Our common stock is listed on the Nasdaq Global Select Market under the symbol “BLMN”. Dividends - In February 2022, our Board reinstated quarterly dividends after a temporary suspension during the COVID-19 pandemic.
See Note 7 - Stock-based and Deferred Compensation Plans of the Notes to Consolidated Financial Statements for details regarding the plan.
See Note 6 - Stock-based and Deferred Compensation Plans of the Notes to Consolidated Financial Statements for details regarding the plan.
The graph assumes an investment of $100 in our common stock and in each index on December 29, 2017 (the last business day of the fiscal year of investment), and the reinvestment of dividends paid since that date. The stock price performance shown in the graph is not necessarily indicative of future price performance.
The graph assumes an investment of $100 in our common stock and in each index on December 28, 2018 (the last business day of the fiscal year of investment), and the reinvestment of dividends paid since that date. The stock price performance shown in the graph is not necessarily indicative of future price performance.
Future dividend payments will depend on continued compliance with our financial covenants, as well as our earnings, financial condition, capital expenditure requirements, surplus and other factors that our Board considers relevant. Holders - As of February 16, 2023, there were 109 holders of record of our common stock.
Future dividend payments will depend on continued compliance with our financial covenants, as well as our earnings, financial condition, capital expenditure requirements, surplus and other factors that our Board considers relevant. Holders - As of February 23, 2024, there were 113 holders of record of our common stock.
Securities Authorized for Issuance Under Equity Compensation Plans - The following table presents the securities authorized for issuance under our equity compensation plans as of December 25, 2022: (shares in thousands) (a) (b) (c) PLAN CATEGORY NUMBER OF SECURITIES TO BE ISSUED UPON EXERCISE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS (1) WEIGHTED AVERAGE EXERCISE PRICE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS (2) NUMBER OF SECURITIES REMAINING AVAILABLE FOR FUTURE ISSUANCE UNDER EQUITY COMPENSATION PLANS (EXCLUDING SECURITIES REFLECTED IN COLUMN (a)) (3) Equity compensation plans approved by security holders 4,719 $ 21.43 7,936 ____________________ (1) Includes 1,531 shares issuable in respect to restricted stock units and performance-based share units (assuming target achievement of applicable performance metrics).
Securities Authorized for Issuance Under Equity Compensation Plans - The following table presents the securities authorized for issuance under our equity compensation plans as of December 31, 2023: (shares in thousands) (a) (b) (c) PLAN CATEGORY NUMBER OF SECURITIES TO BE ISSUED UPON EXERCISE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS (1) WEIGHTED AVERAGE EXERCISE PRICE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS (2) NUMBER OF SECURITIES REMAINING AVAILABLE FOR FUTURE ISSUANCE UNDER EQUITY COMPENSATION PLANS (EXCLUDING SECURITIES REFLECTED IN COLUMN (a)) (3) Equity compensation plans approved by security holders 3,174 $ 21.04 6,925 ____________________ (1) Includes 1,449 shares issuable in respect to restricted stock units and performance-based share units (assuming target achievement of applicable performance metrics).
Stock Performance Graph - The following graph depicts total return to stockholders from December 29, 2017 through December 25, 2022, relative to the performance of the Standard & Poor’s 500 index and the Standard & Poor’s 500 Consumer Discretionary index, a peer group.
Stock Performance Graph - The following graph depicts total return to stockholders from December 28, 2018 through December 31, 2023, relative to the performance of the Standard & Poor’s 500 index and the Standard & Poor’s 500 Consumer Discretionary index, a peer group.
DECEMBER 29, 2017 DECEMBER 30, 2018 DECEMBER 29, 2019 DECEMBER 27, 2020 DECEMBER 26, 2021 DECEMBER 25, 2022 Bloomin’ Brands, Inc.
DECEMBER 28, 2018 DECEMBER 29, 2019 DECEMBER 27, 2020 DECEMBER 26, 2021 DECEMBER 25, 2022 DECEMBER 31, 2023 Bloomin’ Brands, Inc.
Subsequent to December 25, 2022, we repurchased the remaining $15.0 million of our common stock authorized under the 2022 Share Repurchase Program under a Rule 10b5-1 plan.
Subsequent to December 31, 2023, we repurchased $12.5 million of our common stock authorized under the 2023 Share Repurchase Program under a Rule 10b5-1 plan.
On February 7, 2023, our Board approved a new share repurchase authorization of up to $125.0 million of our outstanding common stock as announced in our press release issued February 16, 2023 (the “2023 Share Repurchase Program”). The 2023 Share Repurchase Program will expire on August 7, 2024. 34 Table of Contents BLOOMIN’ BRANDS, INC.
In February 2024, our Board canceled the remaining $57.5 million of authorization under the 2023 Share Repurchase Program and approved a new $350.0 million authorization (the “2024 Share Repurchase Program”), as announced in our press release issued on February 23, 2024. The 2024 Share Repurchase Program will expire on August 13, 2025. 33 Table of Contents BLOOMIN’ BRANDS, INC.
Removed
(BLMN) $ 100.00 $ 83.85 $ 105.34 $ 93.07 $ 102.90 $ 105.56 Standard & Poor’s 500 $ 100.00 $ 94.79 $ 126.03 $ 146.68 $ 189.83 $ 156.96 Standard & Poor’s 500 Consumer Discretionary $ 100.00 $ 99.73 $ 129.72 $ 168.59 $ 213.05 $ 135.06
Added
(BLMN) $ 100.00 $ 125.64 $ 111.01 $ 122.72 $ 125.90 $ 175.91 Standard & Poor’s 500 $ 100.00 $ 132.96 $ 154.75 $ 200.27 $ 165.59 $ 208.83 Standard & Poor’s 500 Consumer Discretionary $ 100.00 $ 130.08 $ 169.06 $ 213.64 $ 135.43 $ 192.23

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

107 edited+41 added−44 removed34 unchanged
Biggest changeSegment FISCAL YEAR (dollars in thousands) 2022 2021 Revenues Restaurant sales $ 3,863,016 $ 3,714,848 Franchise and other revenues 48,854 45,133 Total revenues $ 3,911,870 $ 3,759,981 Income from operations $ 407,860 $ 443,887 Operating income margin 10.4 % 11.8 % Restaurant-level operating income $ 595,997 $ 634,680 Restaurant-level operating margin 15.4 % 17.1 % Restaurant sales Following is a summary of the change in U.S. segment Restaurant sales for the period indicated: FISCAL YEAR (dollars in millions) 2022 (1) For fiscal year 2021 $ 3,714.9 Change from: Comparable restaurant sales 150.0 Restaurant openings 29.1 Restaurant closures (31.0) For fiscal year 2022 $ 3,863.0 ____________________ (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.
Biggest changeINTERNATIONAL FISCAL YEAR FISCAL YEAR (dollars in thousands) 2023 2022 2023 2022 Revenues Restaurant sales $ 4,005,053 $ 3,863,016 $ 602,355 $ 489,679 Franchise and other revenues 48,546 48,854 15,516 14,959 Total revenues $ 4,053,599 $ 3,911,870 $ 617,871 $ 504,638 Income from operations $ 377,534 $ 407,860 $ 83,948 $ 57,333 Operating income margin 9.3 % 10.4 % 13.6 % 11.4 % Restaurant-level operating income $ 618,434 $ 595,997 $ 123,583 $ 90,663 Restaurant-level operating margin 15.4 % 15.4 % 20.5 % 18.5 % Restaurant sales - Following is a summary of the change in segment Restaurant sales for the period indicated: U.S.
We plan to drive long-term shareholder value by reinvesting operational cash flow into our business, improving our credit profile and returning excess cash to shareholders through share repurchases and dividends. • Enrich Engagement Among Stakeholders.
We plan to drive long-term shareholder value by reinvesting operational cash flow into our business, improving our credit profile and returning excess cash to shareholders through dividends and share repurchases. • Enrich Engagement Among Stakeholders.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Segment restaurant-level and adjusted restaurant-level operating margin non-GAAP reconciliations - The following tables reconcile segment Income from operations and the corresponding margin to segment restaurant-level operating income and adjusted restaurant-level operating income and the corresponding margins for the periods indicated: U.S.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Segment Restaurant-level and Adjusted Restaurant-level Operating Income and Corresponding Margins Non-GAAP Reconciliations - The following tables reconcile segment Income from operations and the corresponding margin to segment restaurant-level operating income and adjusted restaurant-level operating income and the corresponding margins for the periods indicated: U.S.
On April 26, 2022, we and OSI entered into the First Amendment to the Second Amended and Restated Credit Agreement and Incremental Amendment (the “Amended Credit Agreement”), which included an increase of our existing revolving credit facility from $800.0 million to $1.0 billion and a transition from the one-month London Inter-Bank Offered Rate (“LIBOR”) rate to the Secured Overnight Financing Rate (“SOFR”) as the benchmark rate for purposes of calculating interest under the Senior Secured Credit Facility.
Credit Agreement - On April 26, 2022, we and OSI entered into the First Amendment to the Second Amended and Restated Credit Agreement and Incremental Amendment (the “Amended Credit Agreement”), which included an increase of our existing revolving credit facility from $800.0 million to $1.0 billion and a transition from the one-month London Inter-Bank Offered Rate (“LIBOR”) rate to the Secured Overnight Financing Rate (“SOFR”) as the benchmark rate for purposes of calculating interest under the Senior Secured Credit Facility.
Key Financial Performance Indicators - Key measures that we use in evaluating our restaurants and assessing our business include the following: • Average restaurant unit volumes —average sales (excluding gift card breakage and the benefit of value added tax exemptions in Brazil) per restaurant to measure changes in customer traffic, pricing and development of the brand; • Comparable restaurant sales —year-over-year comparison of the change in sales volumes (excluding gift card breakage and the benefit of value added tax exemptions in Brazil) for Company-owned restaurants that are open 18 months or more in order to remove the impact of new restaurant openings in comparing the operations of existing restaurants; • System-wide sales —total restaurant sales volume for all Company-owned and franchise restaurants, regardless of ownership, to interpret the overall health of our brands; • Restaurant-level operating margin, Income (loss) from operations, Net income (loss) and Diluted earnings (loss) per share —financial measures utilized to evaluate our operating performance.
Key Financial Performance Indicators - Key measures that we use in evaluating our restaurants and assessing our business include the following: • Average restaurant unit volumes —average sales (excluding gift card breakage and the benefit of value added tax exemptions in Brazil) per restaurant to measure changes in customer traffic, pricing and development of the brand. • Comparable restaurant sales —year-over-year comparison of the change in sales volumes (excluding gift card breakage and the benefit of value added tax exemptions in Brazil) for Company-owned restaurants that are open 18 months or more in order to remove the impact of new restaurant openings in comparing the operations of existing restaurants. • System-wide sales —total restaurant sales volume for all Company-owned and franchise restaurants, regardless of ownership, to interpret the overall health of our brands. • Restaurant-level operating margin, Income from operations, Net income and Diluted earnings per share —financial measures utilized to evaluate our operating performance.
The following categories of our revenue and operating expenses 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.
The following categories of revenue and operating expenses are not included in restaurant-level operating income and the corresponding margin because we do not consider them reflective of operating performance at the restaurant-level within a period: (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.
However, implementation of these guidelines necessarily involves the application of judgment, and the treatment of any items not directly addressed by, or changes to, our guidelines will be considered by our disclosure committee. Refer to the reconciliations of non-GAAP measures for descriptions of the actual adjustments made in the current period and the corresponding prior period.
However, implementation of these guidelines involves the application of judgment, and the treatment of any items not directly addressed by, or changes to, our guidelines will be considered by our disclosure committee. Refer to the reconciliations of non-GAAP measures for descriptions of the actual adjustments made in the current period and the corresponding prior 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).
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.
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 and beyond.
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.
Changes in assumptions regarding our level and composition of earnings, tax laws or the deferred tax valuation allowance and the results of tax audits, may materially impact the effective income tax rate.
Changes in assumptions regarding our level and composition of earnings, tax laws or the deferred tax valuation allowance and the results of tax audits and litigation, may materially impact the effective income tax rate.
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).
Our restaurant-level operating margin is expressed as the percentage of our Restaurant sales that Food and beverage costs, Labor and other related expense and Other restaurant operating expense (including advertising expenses) represent, in each case as such items are reflected in our Consolidated Statements of Operations and Comprehensive Income.
We intend to fund our business strategies, drive revenue growth and margin improvement, in part by reinvesting savings generated by cost savings and productivity initiatives across our businesses. 36 Table of Contents BLOOMIN’ BRANDS, INC.
We intend to fund our business strategies, drive revenue growth and margin improvement, in part by reinvesting savings generated by cost savings and productivity initiatives across our businesses. 35 Table of Contents BLOOMIN’ BRANDS, INC.
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. 54 Table of Contents BLOOMIN’ BRANDS, INC.
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. 50 Table of Contents BLOOMIN’ BRANDS, INC.
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.
Excluded from Income from operations for U.S. and international are certain legal and corporate costs not directly related to the performance of the segments, most stock-based compensation expenses, a portion of insurance expenses and certain bonus expenses.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Comparable Restaurant Sales, Traffic and Average Check Per Person Increases (Decreases) Following is a summary of comparable restaurant sales, traffic and average check per person increases (decreases) for the periods indicated: FISCAL YEAR 2022 2021 Year over year percentage change: Comparable restaurant sales (restaurants open 18 months or more): U.S.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Comparable Restaurant Sales, Traffic and Average Check Per Person Increases (Decreases) Following is a summary of comparable restaurant sales, traffic and average check per person increases (decreases) for the periods indicated: FISCAL YEAR 2023 (1) 2022 Year over year percentage change: Comparable restaurant sales (restaurants open 18 months or more): U.S.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Adjusted restaurant-level operating margin non-GAAP reconciliations (continued) - The following table presents the percentages of certain operating cost financial statement line items in relation to Restaurant sales for the periods indicated: FISCAL YEAR 2022 2021 REPORTED ADJUSTED (1) REPORTED ADJUSTED (1) Restaurant sales 100.0 % 100.0 % 100.0 % 100.0 % Food and beverage costs 31.8 % 31.8 % 30.3 % 30.3 % Labor and other related 28.2 % 28.2 % 28.4 % 28.4 % Other restaurant operating 24.5 % 24.3 % 24.8 % 23.2 % Restaurant-level operating margin 15.6 % 15.7 % 16.5 % 18.1 % _________________ (1) See the Consolidated restaurant-level operating income and adjusted restaurant-level operating income and corresponding margins non-GAAP reconciliations table above for details regarding the restaurant-level operating margin adjustments.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Adjusted Restaurant-level Operating Margin Non-GAAP Reconciliations (continued) - The following table presents the percentages of certain operating cost financial statement line items in relation to Restaurant sales for the periods indicated: FISCAL YEAR 2023 2022 REPORTED ADJUSTED (1) REPORTED ADJUSTED (1) Restaurant sales 100.0 % 100.0 % 100.0 % 100.0 % Food and beverage 30.6 % 30.6 % 31.8 % 31.8 % Labor and other related 28.8 % 28.7 % 28.2 % 28.2 % Other restaurant operating 24.4 % 24.6 % 24.5 % 24.3 % Restaurant-level operating margin 16.2 % 16.1 % 15.6 % 15.7 % _________________ (1) See the Consolidated Restaurant-level Operating Income and Adjusted Restaurant-level Operating Income and Corresponding Margins Non-GAAP Reconciliations table above for details regarding restaurant-level operating margin adjustments.
Use of Cash Cash flows generated from operating activities and availability under our revolving credit facility are our principal sources of liquidity, which we use for operating expenses, debt payments, share repurchases and dividend payments, development of new restaurants, remodeling or relocating older restaurants and investment in technology.
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, development of new restaurants, relocating or remodeling older restaurants, investments in technology, dividend payments and share repurchases.
As of December 25, 2022, tax loss carryforwards and credit carryforwards that do not have a valuation allowance are expected to be recoverable within the applicable statutory expiration periods. We currently expect to utilize general business tax credit carryforwards within a 10-year period.
As of December 31, 2023, tax loss carryforwards and credit carryforwards that do not have a valuation allowance are expected to be recoverable within the applicable statutory expiration periods. We currently expect to utilize general business tax credit carryforwards within a 10-year period.
(5) Adjusted diluted weighted average common shares outstanding was calculated excluding the dilutive effect of 6,089 and 9,992 shares for 2022 and 2021, respectively, to be issued upon conversion of the 2025 Notes to satisfy the amount in excess of the principal since our convertible note hedge offsets the dilutive impact of the shares underlying the 2025 Notes.
(4) Adjusted diluted weighted average common shares outstanding was calculated excluding the dilutive effect of 5,067 and 6,089 shares for 2023 and 2022, respectively, to be issued upon conversion of the 2025 Notes to satisfy the amount in excess of the principal since our convertible note hedge offsets the dilutive impact of the shares underlying the 2025 Notes.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued restaurant-level operating margin may not be comparable to similarly titled measures used by other companies in our industry; and • Adjusted restaurant-level operating margin, Adjusted income from operations, Adjusted net income and Adjusted diluted earnings per share —non-GAAP financial measures utilized to evaluate our operating performance, which definitions, usefulness and reconciliations are described in more detail in the “ Non-GAAP Financial Measures ” section below.
In addition, our presentation of restaurant-level operating margin may not be comparable to similarly titled measures used by other companies in our industry. • Adjusted restaurant-level operating margin, Adjusted income from operations, Adjusted net income and Adjusted diluted earnings per share —non-GAAP financial measures utilized to evaluate our operating performance, which definitions, usefulness and reconciliations are described in more detail in the “ Non-GAAP Financial Measures ” section below.
However, our ability to continue to meet these requirements and obligations will depend on, among other things, our ability to achieve anticipated levels of revenue and cash flow and our ability to manage costs and working capital successfully. Capital Expenditures - We estimate that our capital expenditures will total approximately $240 million to $260 million in 2023.
However, our ability to continue to meet these requirements and obligations will depend on, among other things, our ability to achieve anticipated levels of revenue and cash flow and our ability to manage costs and working capital successfully. Capital Expenditures - We estimate that our capital expenditures will total approximately $270 million to $290 million in 2024.
We believe that in this environment, we need to maintain our focus on value and innovation as well as refreshing our restaurant base to continue to drive sales.
We believe that in this environment, we need to maintain our focus on value and innovation as well as refreshing our restaurant base through remodels and new restaurant development to continue to drive sales.
If the qualitative assessment is not performed or if we determine that it is not more likely than not that the fair value of the reporting unit exceeds the carrying value, the fair value of the reporting unit is calculated.
If the qualitative assessment is not performed or if we determine that it is not more likely than not that the fair value of the reporting unit exceeds the carrying value, a quantitative approach, using the fair value of the reporting unit, is calculated.
For discussion of our consolidated and segment-level results of operations, non-GAAP measures, and liquidity and capital resources for fiscal year 2020, see our Annual Report on Form 10-K for the year ended December 26, 2021, filed with the SEC on February 23, 2022.
For discussion of our consolidated and segment-level results of operations, non-GAAP measures, and liquidity and capital resources for fiscal year 2021, see our Annual Report on Form 10-K for the year ended December 25, 2022, filed with the SEC on February 22, 2023.
Outback Steakhouse (6.3) % 18.1 % Carrabba’s Italian Grill (4.3) % 24.6 % Bonefish Grill (4.2) % 24.3 % Fleming’s Prime Steakhouse & Wine Bar 3.0 % 41.7 % Combined U.S. (5.3) % 20.7 % International Outback Steakhouse - Brazil 23.6 % 23.5 % Average check per person (3): U.S.
Outback Steakhouse (4.3) % (6.3) % Carrabba’s Italian Grill 0.3 % (4.3) % Bonefish Grill (3.3) % (4.2) % Fleming’s Prime Steakhouse & Wine Bar (2.0) % 3.0 % Combined U.S. (3.1) % (5.3) % International Outback Steakhouse - Brazil (3) (1.1) % 23.6 % Average check per person (4): U.S.
See Note 13 - Long-term Debt, Net of the notes to Consolidated Financial Statements for additional details regarding the Amended Credit Agreement. As of December 25, 2022 and December 26, 2021, we were in compliance with our debt covenants.
See Note 12 - Long-term Debt, Net of the notes to Consolidated Financial Statements for additional details regarding the Amended Credit Agreement. As of December 31, 2023 and December 25, 2022, we were in compliance with our debt covenants.
Results of Operations The following table sets forth the percentages of certain items in our Consolidated Statements of Operations in relation to Total revenues or Restaurant sales for the periods indicated: FISCAL YEAR 2022 2021 Revenues Restaurant sales 98.6 % 98.5 % Franchise and other revenues 1.4 1.5 Total revenues 100.0 100.0 Costs and expenses Food and beverage costs (1) 31.8 30.3 Labor and other related (1) 28.2 28.4 Other restaurant operating (1) 24.5 24.8 Depreciation and amortization 3.8 4.0 General and administrative 5.3 6.0 Provision for impaired assets and restaurant closings 0.1 0.3 Total costs and expenses 92.5 92.5 Income from operations 7.5 7.5 Loss on extinguishment and modification of debt (2.5) (0.1) Loss on fair value adjustment of derivatives, net (0.4) — Other (expense) income, net (*) * Interest expense, net (1.2) (1.4) Income before provision for income taxes 3.4 6.0 Provision for income taxes 0.9 0.6 Net income 2.5 5.4 Less: net income attributable to noncontrolling interests 0.2 0.2 Net income attributable to Bloomin ’ Brands 2.3 % 5.2 % ____________________ (1) As a percentage of Restaurant sales. * Less than 1/10 th of one percent of Total revenues. 39 Table of Contents BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued COSTS AND EXPENSES The following table sets forth the percentages of certain items in our Consolidated Statements of Operations in relation to Restaurant sales or Total revenues for the periods indicated: FISCAL YEAR 2023 2022 Revenues Restaurant sales 98.6 % 98.6 % Franchise and other revenues 1.4 1.4 Total revenues 100.0 100.0 Costs and expenses Food and beverage (1) 30.6 31.8 Labor and other related (1) 28.8 28.2 Other restaurant operating (1) 24.4 24.5 Depreciation and amortization 4.1 3.8 General and administrative 5.6 5.3 Provision for impaired assets and restaurant closings 0.7 0.1 Total costs and expenses 93.0 92.5 Income from operations 7.0 7.5 Loss on extinguishment and modification of debt — (2.5) Loss on fair value adjustment of derivatives, net — (0.4) Interest expense, net (1.2) (1.2) Income before provision for income taxes 5.8 3.4 Provision for income taxes 0.4 0.9 Net income 5.4 2.5 Less: net income attributable to noncontrolling interests 0.1 0.2 Net income attributable to Bloomin’ Brands 5.3 % 2.3 % ____________________ (1) As a percentage of Restaurant sales.
Financial Highlights - Our financial highlights for 2022 include the following: • U.S. combined and Outback Steakhouse comparable restaurant sales of 4.0% and 2.8%, respectively; • Increase in Total revenues of 7.1%, as compared to 2021; • Operating income and restaurant-level operating margins of 7.5% and 15.6%, respectively, as compared to 7.5% and 16.5%, respectively for 2021; • Operating income of $330.4 million as compared to $309.0 million in 2021; and • Diluted earnings per share of $1.03 as compared to $2.00 in 2021.
Financial Overview - Our financial overview for 2023 includes the following: • U.S. combined and Outback Steakhouse comparable restaurant sales of 1.4% and 1.1%, respectively; • Increase in Total revenues of 5.8% as compared to 2022; • Operating income and restaurant-level operating margins of 7.0% and 16.2%, respectively, as compared to 7.5% and 15.6%, respectively for 2022; • Operating income of $325.1 million as compared to $330.4 million in 2022; and • Diluted earnings per share of $2.56 as compared to $1.03 in 2022.
We have a blended federal and state statutory rate of approximately 26%. The effective income tax rate in 2022 was higher than the blended federal and state statutory rate primarily due to the non-deductible losses associated with the 2025 Notes Partial Repurchase recorded during 2022, partially offset by the benefit of FICA tax credits on certain employees’ tips.
The effective income tax rate in 2022 was higher than the blended federal and state statutory rate primarily due to the non-deductible losses associated with the 2025 Notes Partial Repurchase recorded during 2022, partially offset by the benefit of FICA tax credits on certain tipped wages.
Business Strategies - In 2023, our key business strategies include: • Enhance the 360-Degree Customer Experience to Drive Sustainable Healthy Sales Growth.
Business Strategies - In 2024, our key business strategies include: • Enhance the Customer Experience to Drive Sustainable Healthy Sales Growth.
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): DECEMBER 25, 2022 DECEMBER 26, 2021 U.S.
Selected Operating Data - The table below presents the number of our restaurants in operation as of the periods indicated: Number of restaurants (at end of the period): DECEMBER 31, 2023 DECEMBER 25, 2022 U.S.
Recently Issued Financial Accounting Standards For a description of recently issued Financial Accounting Standards that we adopted in 2022 and, that are applicable to us and likely to have material effect on our consolidated financial statements, but have not yet been adopted, see Note 2 - Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements. 59 Table of Contents BLOOMIN’ BRANDS, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Recently Issued Financial Accounting Standards For a description of recently issued Financial Accounting Standards that we adopted in 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 2 - Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements. 56 Table of Contents BLOOMIN’ BRANDS, INC.
(1) Outback Steakhouse 2.8 % 24.2 % Carrabba’s Italian Grill 3.4 % 32.2 % Bonefish Grill 4.5 % 40.6 % Fleming’s Prime Steakhouse & Wine Bar 12.0 % 60.9 % Combined U.S. 4.0 % 30.5 % International Outback Steakhouse - Brazil (2) 38.3 % 28.7 % Traffic: U.S.
(2) Outback Steakhouse 1.1 % 2.8 % Carrabba’s Italian Grill 3.9 % 3.4 % Bonefish Grill 0.8 % 4.5 % Fleming’s Prime Steakhouse & Wine Bar (0.7) % 12.0 % Combined U.S. 1.4 % 4.0 % International Outback Steakhouse - Brazil (3) 5.5 % 38.3 % Traffic: U.S.
We record a liability for all unresolved and incurred but not reported claims at the anticipated cost that falls below our specified retention levels or per-claim deductible amounts. Our liability for insurance claims was $49.1 million and $53.5 million as of December 25, 2022 and December 26, 2021, respectively.
We record a liability for all unresolved and incurred but not reported claims at the anticipated cost below our specified retention levels or per-claim deductible amounts. Our liability for insurance claims was $45.9 million and $49.1 million as of December 31, 2023 and December 25, 2022, respectively.
Loss on extinguishment and modification of debt and Loss on fair value adjustment of derivatives, net In connection with the repurchase of $125.0 million of the outstanding 2025 Notes (the “2025 Notes Partial Repurchase”), which is described in further detail within Note 14 - Convertible Senior Notes of the Notes to Consolidated Financial Statements, 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 2022.
Loss on extinguishment and modification of debt and Loss on fair value adjustment of derivatives, net during 2022 were in connection with the repurchase of $125.0 million of the outstanding convertible senior notes due in 2025 (the “2025 Notes”) (the “2025 Notes Partial Repurchase”), which is described in further detail within Note 13 - Convertible Senior Notes of the Notes to Consolidated Financial Statements.
(4) Purchase obligations include agreements to purchase goods or services that are enforceable, legally binding and specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction.
(4) Purchase obligations include agreements to purchase goods or services that are enforceable, legally binding and specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. We have purchase obligations with various vendors that consist primarily of inventory, fixtures and equipment and technology.
Income from operations generated during 2022 as compared to 2021 was primarily due to: (i) commodity inflation, (ii) higher labor cost, primarily due to wage rate inflation, (iii) higher operating expenses including utilities and (iv) higher advertising expense.
Income from operations generated during 2023 as compared to 2022 was primarily due to: (i) higher labor costs, primarily due to wage rate inflation, (ii) commodity inflation, (iii) higher operating expenses, including utilities, primarily due to inflation, (iv) higher impairment charges and restaurant closure costs and (v) higher depreciation and advertising expense.
Excludes the benefit of the Brazil tax legislation discussed in Note 21 - Income Taxes of the Notes to Consolidated Financial Statements. 40 Table of Contents BLOOMIN’ BRANDS, INC.
Excludes the benefit of the Brazil value added tax exemptions discussed in Note 20 - Income Taxes of the Notes to Consolidated Financial Statements. 39 Table of Contents BLOOMIN’ BRANDS, INC.
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) or Income (loss) from operations. In addition, our presentation of 37 Table of Contents BLOOMIN’ BRANDS, INC.
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 36 Table of Contents BLOOMIN’ BRANDS, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued for, Net income or Income from operations.
The increase in Restaurant sales in 2022 as compared to 2021 was primarily due to: (i) higher comparable restaurant sales, (ii) the opening of 64 new restaurants not included in our comparable restaurant sales base and (iii) the effect of foreign currency translation of the Brazilian Real relative to the U.S. dollar.
The increase in Restaurant sales in 2023 as compared to 2022 was primarily due to: (i) restaurant sales during the 53rd week of 2023, (ii) higher comparable restaurant sales, (iii) the opening of 66 new restaurants not included in our comparable restaurant sales base, (iv) the effect of foreign currency translation of the Brazilian Real relative to the U.S. dollar and (v) value added tax exemptions in Brazil.
(2) International Company-owned Other included four and two Aussie Grill locations as of December 25, 2022 and December 26, 2021, respectively. International Franchised Other included four and three Aussie Grill locations as of December 25, 2022 and December 26, 2021, respectively. 38 Table of Contents BLOOMIN’ BRANDS, INC.
(3) International Company-owned Other included two and four Aussie Grill locations as of December 31, 2023 and December 25, 2022, respectively. International Franchised Other included four Aussie Grill locations as of December 31, 2023 and December 25, 2022. 37 Table of Contents BLOOMIN’ BRANDS, INC.
Outback Steakhouse 29,308 29,415 Carrabba’s Italian Grill 10,328 10,348 Bonefish Grill 9,056 9,318 Fleming’s Prime Steakhouse & Wine Bar 3,331 3,321 International Outback Steakhouse - Brazil 6,775 5,907 ____________________ (1) Translated at average exchange rates of 5.19 and 5.33 for 2022 and 2021, respectively.
Outback Steakhouse 29,771 29,308 Carrabba’s Italian Grill 10,537 10,328 Bonefish Grill 9,056 9,056 Fleming’s Prime Steakhouse & Wine Bar 3,418 3,331 International Outback Steakhouse - Brazil 7,670 6,775 ____________________ (1) Translated at average exchange rates of 5.02 and 5.19 for 2023 and 2022, respectively.
Overview We are one of the largest casual dining restaurant companies in the world with a portfolio of leading, differentiated restaurant concepts. As of December 25, 2022, we owned and operated 1,186 full-service restaurants and off-premises only kitchens and franchised 321 full-service restaurants and off-premises only kitchens across 47 states, Guam and 13 countries.
Overview We are one of the largest casual dining restaurant companies in the world with a portfolio of leading, differentiated restaurant concepts. As of December 31, 2023, we owned and operated 1,189 restaurants and franchised 291 restaurants across 47 states, Guam and 13 countries.
Following is a summary of our share repurchase program as of December 25, 2022 (dollars in thousands): SHARE REPURCHASE PROGRAM BOARD APPROVAL DATE AUTHORIZED REPURCHASED CANCELLED OR EXPIRED REMAINING 2022 (1) February 8, 2022 $ 125,000 $ 109,999 $ — $ 15,001 ________________ (1) Subsequent to December 25, 2022, we repurchased the remaining $15.0 million of our common stock authorized under the 2022 Share Repurchase Program under a Rule 10b5-1 plan.
Following is a summary of our share repurchase programs active during the periods presented as of December 31, 2023 (dollars in thousands): SHARE REPURCHASE PROGRAM BOARD APPROVAL DATE AUTHORIZED REPURCHASED CANCELLED OR EXPIRED REMAINING 2022 February 8, 2022 $ 125,000 $ 125,000 $ — $ — 2023 (1) February 7, 2023 $ 125,000 54,999 $ — $ 70,001 Total share repurchase programs $ 179,999 ________________ (1) Subsequent to December 31, 2023, we repurchased $12.5 million of our common stock authorized under the 2023 Share Repurchase Program under a Rule 10b5-1 plan.
We will continue to pursue U.S. fill-in opportunities in key states such as Florida and Texas with Outback Steakhouse, and California and Florida with Fleming’s Prime Steakhouse & Wine Bar. We will also focus on geographic regions in South America, with strategic expansion in Brazil, and pursue global franchise opportunities.
We will continue to pursue U.S. fill-in opportunities for Outback Steakhouse, Fleming’s Prime Steakhouse & Wine Bar and Carrabba’s Italian Grill across key southern states such as North Carolina, Florida and Texas as well as California. We will also focus on strategic expansion in Brazil and pursue global franchise opportunities.
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.
In February 2024, our Board declared a quarterly cash dividend of $0.24 per share, payable on March 20, 2024. 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.
Outback Steakhouse $ 3,949 $ 3,822 Carrabba’s Italian Grill $ 3,406 $ 3,283 Bonefish Grill $ 3,213 $ 3,036 Fleming’s Prime Steakhouse & Wine Bar $ 5,845 $ 5,208 International Outback Steakhouse - Brazil (1) $ 3,067 $ 2,286 Operating weeks: U.S.
Outback Steakhouse $ 4,094 $ 3,949 Carrabba’s Italian Grill $ 3,631 $ 3,406 Bonefish Grill $ 3,339 $ 3,213 Fleming’s Prime Steakhouse & Wine Bar $ 5,935 $ 5,845 International Outback Steakhouse - Brazil (1) $ 3,213 $ 3,067 Operating weeks: U.S.
Consolidated restaurant-level operating income and adjusted restaurant-level operating income and corresponding margins non-GAAP reconciliations - Restaurant-level operating margin is calculated as Restaurant sales after deduction of the main restaurant-level operating costs, which includes Food and beverage costs, Labor and other related expenses and Other restaurant operating expenses. Adjusted restaurant-level operating margin is Restaurant-level operating margin adjusted for certain items.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Consolidated Restaurant-level Operating Income and Adjusted Restaurant-level Operating Income and Corresponding Margins Non-GAAP Reconciliations - Restaurant-level operating margin is calculated as Restaurant sales after deduction of the main restaurant-level operating costs, which includes Food and beverage cost, Labor and other related expense and Other restaurant operating expense.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued 2025 Notes Partial Repurchase - On May 25, 2022, we and certain holders (the “Noteholders”) entered into exchange agreements in which the Noteholders agreed to exchange $125.0 million in aggregate principal amount of our outstanding 2025 Notes for $196.9 million in cash, plus accrued interest, and approximately 2.3 million shares of our common stock.
We believe that we will remain in compliance with our debt covenants during the next 12 months and beyond. 2025 Notes Partial Repurchase - On May 25, 2022, we and certain holders (the “Noteholders”) entered into exchange agreements in which the Noteholders agreed to exchange $125.0 million in aggregate principal amount of the 2025 Notes for $196.9 million in cash, plus accrued interest, and approximately 2.3 million shares of our common stock.
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. FISCAL YEAR (dollars in millions) 2022 2021 U.S.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued presented only as an indicator of changes in the restaurant system, which management believes is important information regarding the health of our restaurant concepts and in determining our royalties and/or service fees. FISCAL YEAR (dollars in millions) 2023 2022 U.S.
We aggregate our operating segments into two reportable segments, U.S. and international. The U.S. segment includes all restaurants operating in the U.S. while restaurants operating outside the U.S. are included in the international segment. Revenues for both segments include only transactions with customers and exclude intersegment revenues.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued U.S. segment includes all restaurants operating in the U.S. while restaurants operating outside the U.S. are included in the international segment. Revenues for both segments include only transactions with customers and exclude intersegment revenues.
The international jurisdictions in which we have significant cash do not have any known restrictions that would prohibit repatriation. As of December 25, 2022, we had aggregate undistributed foreign earnings of approximately $23.2 million. These earnings may be repatriated to the U.S. without additional material U.S. federal income tax. These amounts are not considered indefinitely reinvested in our foreign subsidiaries.
As of December 31, 2023, we had aggregate undistributed foreign earnings of approximately $42.6 million that may be repatriated to the U.S. without additional material U.S. federal income tax . These amounts are not considered indefinitely reinvested in our foreign subsidiaries.
As of December 25, 2022, we had $17.9 million of unrecognized tax benefits, including accrued interest and penalties, that if recognized, would impact our effective income tax rate.
As of December 31, 2023, we had $16.7 million of unrecognized tax benefits, including accrued interest and penalties, that if recognized, would impact our effective income tax rate. 55 Table of Contents BLOOMIN’ BRANDS, INC.
We have purchase obligations with various vendors that consist primarily of inventory, kitchen equipment, technology, advertising and restaurant-level service contracts. (5) Includes other long-term liabilities, primarily consisting of deferred compensation obligations, deposits and other accrued obligations. Unrecognized tax benefits are excluded from this table since it is not possible to estimate when these future payments will occur.
(5) Includes other long-term liabilities, primarily consisting of deferred compensation obligations, deposits, undiscounted finance leases and other accrued obligations. Unrecognized tax benefits are excluded from this table since it is not possible to estimate when these future payments may occur.
Outback Steakhouse $ 494 $ 445 Carrabba’s Italian Grill 49 44 Bonefish Grill 11 11 U.S. total 554 500 International Outback Steakhouse - South Korea 296 305 Other (1) 114 112 International total 410 417 Total franchise sales (2) $ 964 $ 917 ____________________ (1) Includes franchise sales for off-premises only kitchens in South Korea.
Outback Steakhouse $ 514 $ 494 Carrabba’s Italian Grill 48 49 Bonefish Grill 10 11 U.S. total 572 554 International Outback Steakhouse - South Korea 354 296 Other (1) 104 114 International total 458 410 Total franchise sales $ 1,030 $ 964 ____________________ (1) Includes franchise sales for off-premises only kitch ens in South Korea.
Adjusted income from operations non-GAAP reconciliations - The following table reconciles Income from operations and the corresponding margin to adjusted income from operations and the corresponding margin for the periods indicated: FISCAL YEAR (dollars in thousands) 2022 2021 Income from operations $ 330,421 $ 308,958 Operating income margin 7.5 % 7.5 % Adjustments: Total restaurant-level operating margin adjustments (1) 5,900 64,641 Severance and other transformational costs (2) — 2,764 Legal and other matters (3) — (3,133) Total income from operations adjustments 5,900 64,272 Adjusted income from operations $ 336,321 $ 373,230 Adjusted operating income margin 7.6 % 9.1 % _________________ (1) See the Consolidated restaurant-level operating income and adjusted restaurant-level operating income and corresponding margins non-GAAP reconciliations table above for details regarding the restaurant-level operating income adjustments.
Adjusted Income from Operations Non-GAAP Reconciliations - The following table reconciles Income from operations and the corresponding margin to adjusted income from operations and the corresponding margin for the periods indicated: FISCAL YEAR (dollars in thousands) 2023 2022 Income from operations $ 325,144 $ 330,421 Operating income margin 7.0 % 7.5 % Adjustments: Total restaurant-level operating income adjustments (1) (4,206) 5,900 Asset impairments and closing costs (2) 28,236 — Other (3) 7,546 — Total income from operations adjustments 31,576 5,900 Adjusted income from operations $ 356,720 $ 336,321 Adjusted operating income margin 7.6 % 7.6 % _________________ (1) See the Consolidated Restaurant-level Operating Income and Adjusted Restaurant-level Operating Income and Corresponding Margins Non-GAAP Reconciliations table above for details regarding restaurant-level operating income adjustments.
The fair value of the trade names is determined through a relief from royalty method. The carrying value of the reporting unit or trade name is compared to its estimated fair value, with any excess of carrying value over fair value deemed to be an impairment. The carrying value of goodwill as of December 25, 2022 was $273.0 million.
The carrying value of the reporting unit or trade name is compared to its estimated fair value, with any excess of carrying value over fair value deemed to be an impairment. The carrying value of goodwill and trade names as of December 31, 2023 was $276.3 million and $414.7 million, respectively.
Income from operations The increase in international Income from operations generated during 2022 as compared to 2021 was primarily due to the recovery of in-restaurant dining in Brazil and increases in average check per person. These increases were partially offset by decreases primarily due to commodity and labor inflation.
International - The increase in international Income from operations generated during 2023 as compared to 2022 was primarily due to value added tax exemptions in Brazil and an increase in restaurant sales, primarily driven by an increase in average check per person and the recovery of in-restaurant dining.
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. Also includes a $4.2 million adjustment during 2021 for the reduction of certain unrecognized tax benefits related to tax positions taken during a prior period.
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.
Excludes $919.7 million related to operating lease renewal options that are reasonably certain of exercise. (2) Includes Senior Secured Credit Facility, 2029 Notes, 2025 Notes and finance lease obligations. Amounts are not reduced by unamortized debt issuance costs and finance lease interest totaling $7.7 million.
Excludes $945.4 million related to operating lease renewal options that are reasonably certain of exercise. (2) Includes Senior Secured Credit Facility, 2029 Notes and 2025 Notes. Amounts are not reduced by unamortized debt issuance costs totaling $5.1 million. (3) Projected future interest payments on long-term debt are based on interest rates in effect as of December 31, 2023.
Critical Accounting Policies and Estimates Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP.
Additionally, ongoing cash flows from restaurant operations and gift card sales are typically used to service debt obli gations and to make capital expenditures. Critical Accounting Policies and Estimates Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Adjusted net income and Adjusted diluted earnings per share non-GAAP reconciliations - The following table reconciles Diluted net income attributable to common stockholders to adjusted net income and adjusted diluted earnings per share for the periods indicated: FISCAL YEAR (in thousands, except share and per share data) 2022 2021 Diluted net income attributable to common stockholders $ 101,907 $ 215,900 Convertible senior notes if-converted method interest adjustment, net of tax (1) — 345 Net income attributable to Bloomin’ Brands 101,907 215,555 Adjustments: Income from operations adjustments (2) 5,900 64,272 Loss on extinguishment and modification of debt (3) 107,630 2,073 Loss on fair value adjustment of derivatives, net (3) 17,685 — Total adjustments, before income taxes 131,215 66,345 Adjustment to provision for income taxes (4) (263) (21,222) Net adjustments 130,952 45,123 Adjusted net income $ 232,859 $ 260,678 Diluted earnings per share $ 1.03 $ 2.00 Adjusted diluted earnings per share (5) $ 2.52 $ 2.70 Diluted weighted average common shares outstanding 98,512 107,803 Adjusted diluted weighted average common shares outstanding (5) 92,423 96,426 _________________ (1) 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.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Adjusted Net Income and Adjusted Diluted Earnings Per Share Non-GAAP Reconciliations - The following table reconciles Net income attributable to Bloomin’ Brands to adjusted net income and adjusted diluted earnings per share for the periods indicated: FISCAL YEAR (in thousands, except per share data) 2023 2022 Net income attributable to Bloomin’ Brands $ 247,386 $ 101,907 Adjustments: Income from operations adjustments (1) 31,576 5,900 Loss on extinguishment and modification of debt (2) — 107,630 Loss on fair value adjustment of derivatives, net (2) — 17,685 Total adjustments, before income taxes 31,576 131,215 Adjustment to provision for income taxes (3) (10,801) (263) Net adjustments 20,775 130,952 Adjusted net income $ 268,161 $ 232,859 Diluted earnings per share $ 2.56 $ 1.03 Adjusted diluted earnings per share (4) $ 2.93 $ 2.52 Diluted weighted average common shares outstanding 96,453 98,512 Adjusted diluted weighted average common shares outstanding (4) 91,386 92,423 _________________ (1) See the Adjusted Income from Operations Non-GAAP Reconciliations table above for details regarding Income from operations adjustments.
Sales declines at our restaurants, unplanned increases in commodity or labor costs, deterioration in overall economic conditions and challenges in the restaurant industry may result in future impairment charges.
Sales declines at our restaurants, unplanned increases in commodity or labor costs, deterioration in overall economic conditions and challenges in the restaurant industry may result in future impairment charges. It is possible that changes in circumstances or changes in our judgments, assumptions and estimates could result in impairment of a portion or all of our goodwill or other intangible assets.
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: FISCAL YEAR (dollars in thousands) 2022 2021 Net cash provided by operating activities $ 390,922 $ 402,455 Net cash used in investing activities (201,138) (104,745) Net cash used in financing activities (195,501) (317,419) Effect of exchange rate changes on cash and cash equivalents 1,395 (1,642) Net decrease in cash, cash equivalents and restricted cash $ (4,322) $ (21,351) Operating activities - The decrease in net cash provided by operating activities during 2022 as compared to 2021 was primarily due to increases and timing of operational payments net of receipts, partially offset by lapping cash paid in connection with the Carrabba’s Italian Grill royalty termination during 2021.
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: FISCAL YEAR (dollars in thousands) 2023 2022 Net cash provided by operating activities $ 532,421 $ 390,922 Net cash used in investing activities (317,106) (201,138) Net cash used in financing activities (187,125) (195,501) Effect of exchange rate changes on cash and cash equivalents 1,448 1,395 Net increase (decrease) in cash, cash equivalents and restricted cash $ 29,638 $ (4,322) Operating activities - The increase in net cash provided by operating activities during 2023 as compared to 2022 was primarily due to: (i) higher operational receipts, net of payments, (ii) decreased employee compensation payments and (iii) lower tax payments.
GAAP and include the following: (i) Restaurant-level and adjusted restaurant-level operating income and the corresponding margins, (ii) Adjusted income from operations and the corresponding margins, (iii) Adjusted net income, (iv) Adjusted diluted earnings per share and (v) system-wide sales.
These are supplemental measures of performance that are not required by or presented in accordance with U.S. GAAP and include the following: (i) Restaurant-level operating income, adjusted restaurant-level operating income and their corresponding margins, (ii) Adjusted income from operations and the corresponding margin, (iii) Adjusted net income, (iv) Adjusted diluted earnings per share and (v) system-wide sales.
Leases - We use judgment to determine the reasonably certain lease term, which in turn, impacts the applicable incremental borrowing rate (“IBR”) used to calculate the initial lease liability for each portfolio of leases. Other assumptions used in determining our incremental borrowing rate include our implied credit rating and an estimate of secured borrowing rates based on comparable market data.
Leases - We use judgment at lease inception to determine the reasonably certain lease term, which in turn, impacts the applicable incremental borrowing rate (“IBR”) used to calculate the initial lease liability for each portfolio of leases.
This lease accounting evaluation may require significant judgment in determining the fair value and useful life of the leased property and the appropriate reasonably certain lease term. These judgments may produce materially different amounts of rent expense in a given reporting period than would be reported if different assumed lease terms were used.
These judgments may produce materially different amounts of rent and depreciation expense in a given reporting period than would be reported if different assumed lease terms were used.
In establishing our reserves, we consider certain actuarial assumptions and judgments regarding economic conditions, and the frequency and severity of claims. The establishment of the reserves utilizing such estimates and assumptions is in part based on the 58 Table of Contents BLOOMIN’ BRANDS, INC.
In establishing our reserves, we consider certain actuarial assumptions and judgments regarding economic conditions, and the frequency and severity of claims. The establishment of the reserves utilizing such estimates and assumptions is in part based on the premise that historical claims experience is indicative of current or future expected activity, which could differ significantly.
COSTS AND EXPENSES Food and beverage costs FISCAL YEAR (dollars in millions) 2022 2021 CHANGE Food and beverage costs $ 1,383.6 $ 1,229.7 % of Restaurant sales 31.8 % 30.3 % 1.5 % Food and beverage costs increased as a percentage of Restaurant sales in 2022 as compared to 2021 primarily due to 3.5% from commodity inflation, partially offset by a decrease as a percentage of Restaurant sales of 2.0% from increases in average check per person, primarily driven by increases in menu pricing.
Fiscal year 2023 as compared to fiscal year 2022 Food and beverage cost decreased as a percentage of Restaurant sales due to 2.0% from increases in average check per person, primarily driven by an increase in menu pricing, and 0.6% from certain cost saving and productivity initiatives, partially offset by an increase of 1.3% from commodity inflation. See Item 7A.
System-wide sales comprise sales of Company-owned and franchised restaurants. For a summary of sales of Company-owned restaurants, refer to Note 4 - Revenue Recognition of the Notes to Consolidated Financial Statements. 51 Table of Contents BLOOMIN’ BRANDS, INC.
System-wide sales comprise sales of Company-owned and franchised restaurants. For a summary of sales of Company-owned restaurants, refer to Note 3 - 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.
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.
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.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Borrowing Capacity and Debt Service Credit Facilities - Following is a summary of our outstanding credit facilities as of the dates indicated and principal payments and debt issuance during the periods indicated: SENIOR SECURED CREDIT FACILITY FORMER CREDIT FACILITY TOTAL CREDIT FACILITIES TERM LOAN A REVOLVING FACILITY TERM LOAN A REVOLVING FACILITY 2025 NOTES 2029 NOTES (dollars in thousands) Balance as of December 27, 2020 $ — $ — $ 425,000 $ 447,000 $ 230,000 $ — $ 1,102,000 2021 new debt 200,000 455,000 — 15,000 — 300,000 970,000 2021 payments (5,000) (375,000) (425,000) (462,000) — — (1,267,000) Balance as of December 26, 2021 195,000 80,000 — — 230,000 300,000 805,000 2022 new debt — 1,239,500 — — — — 1,239,500 2022 payments (195,000) (889,500) — — (125,000) — (1,209,500) Balance as of December 25, 2022 (1) $ — $ 430,000 $ — $ — $ 105,000 $ 300,000 $ 835,000 Interest rates, as of December 25, 2022 (2) 5.79 % 5.00 % 5.13 % Principal maturity date April 2026 May 2025 April 2029 ____________________ (1) Subsequent to December 25, 2022, we repaid $80.0 million on our revolving credit facility.
Borrowing Capacity and Debt Service Credit Facilities - Following is a summary of our outstanding credit facilities as of the dates indicated and principal payments and debt issuance during the periods indicated: SENIOR SECURED CREDIT FACILITY TOTAL CREDIT FACILITIES TERM LOAN A REVOLVING FACILITY 2025 NOTES 2029 NOTES (dollars in thousands) Balance as of December 26, 2021 $ 195,000 $ 80,000 $ 230,000 $ 300,000 $ 805,000 2022 new debt — 1,239,500 — — 1,239,500 2022 payments (195,000) (889,500) (125,000) — (1,209,500) Balance as of December 25, 2022 — 430,000 105,000 300,000 835,000 2023 new debt — 1,079,000 — — 1,079,000 2023 payments — (1,128,000) (214) — (1,128,214) Balance as of December 31, 2023 $ — $ 381,000 $ 104,786 $ 300,000 $ 785,786 Interest rates, as of December 31, 2023 (1) 6.96 % 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 December 31, 2023. 49 Table of Contents BLOOMIN’ BRANDS, INC.
See Note 14 - 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. 2029 Notes - On April 16, 2021, we issued $300.0 million aggregate principal amount of senior unsecured notes due 2029.
Upon settlement, we received $131.9 million for the Note Hedge Early Termination Agreements and paid $114.8 million for the Warrant Early Termination Agreements. See Note 13 - Convertible Senior Notes of the Notes to Consolidated Financial Statements for additional details regarding the 2025 Notes Partial Repurchase and related Note Hedge Early Termination Agreements and Warrant Early Termination Agreements.
The key estimates and 57 Table of Contents BLOOMIN’ BRANDS, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued assumptions used in these models are future cash flow estimates, which are heavily influenced by revenue growth rates, operating margins and capital expenditures.
The key estimates and assumptions used in this assessment are future cash flow estimates, which are heavily influenced by revenue growth rates, operating margins and capital expenditures.
Goodwill and Indefinite-Lived Intangible Assets - Goodwill and indefinite-lived intangible assets are tested for impairment annually in the second fiscal quarter, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. We may elect to perform a qualitative assessment to determine whether it is more likely than not that a reporting unit is impaired.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Goodwill and Indefinite-Lived Intangible Assets - Goodwill and indefinite-lived intangible assets are not subject to amortization and are tested for impairment annually in the second fiscal quarter, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
Financial Condition - Following is a summary of our current assets, current liabilities and working capital (deficit) as of the periods indicated: (dollars in thousands) DECEMBER 25, 2022 DECEMBER 26, 2021 Current assets $ 346,577 $ 352,792 Current liabilities 978,867 984,625 Working capital (deficit) $ (632,290) $ (631,833) Working capital (deficit) includes: (i) Unearned revenue primarily from unredeemed gift cards of $394.2 million and $398.8 million as of December 25, 2022 and December 26, 2021, respectively, and (ii) current operating lease liabilities of $183.5 million and $177.0 million as of December 25, 2022 and December 26, 2021, respectively, with 56 Table of Contents 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) DECEMBER 31, 2023 DECEMBER 25, 2022 Current assets $ 343,314 $ 346,577 Current liabilities 1,002,335 978,867 Working capital (deficit) $ (659,021) $ (632,290) Working capital (deficit) includes: (i) Unearned revenue primarily from unredeemed gift cards of $381.9 million and $394.2 million as of December 31, 2023 and December 25, 2022, respectively, and (ii) current operating lease liabilities of $175.4 million and $183.5 million as of December 31, 2023 and December 25, 2022, respectively, with the corresponding operating right-of-use assets recorded as non-current on our Consolidated Balance Sheets.
The following table reconciles consolidated Income from operations and the corresponding margin to restaurant-level operating income and adjusted restaurant-level operating income and the corresponding margins for the periods indicated: Consolidated FISCAL YEAR (dollars in thousands) 2022 2021 Income from operations $ 330,421 $ 308,958 Operating income margin 7.5 % 7.5 % Less: Franchise and other revenues 63,813 61,292 Plus: Depreciation and amortization 169,617 163,391 General and administrative 234,752 245,616 Provision for impaired assets and restaurant closings 5,964 13,737 Restaurant-level operating income $ 676,941 $ 670,410 Restaurant-level operating margin 15.6 % 16.5 % Adjustments: Royalty termination expense (1) — 61,880 Legal and other matters (2) 5,900 2,761 Total restaurant-level operating income adjustments 5,900 64,641 Adjusted restaurant-level operating income $ 682,841 $ 735,051 Adjusted restaurant-level operating margin 15.7 % 18.1 % _________________ (1) Payment to the Carrabba’s Founders in connection with the Royalty Termination Agreement.
The following table reconciles consolidated Income from operations and the corresponding margin to restaurant-level operating income and adjusted restaurant-level operating income and the corresponding margins for the periods indicated: Consolidated FISCAL YEAR (dollars in thousands) 2023 2022 Income from operations $ 325,144 $ 330,421 Operating income margin 7.0 % 7.5 % Less: Franchise and other revenues 64,062 63,813 Plus: Depreciation and amortization 191,171 169,617 General and administrative 260,470 234,752 Provision for impaired assets and restaurant closings 33,574 5,964 Restaurant-level operating income $ 746,297 $ 676,941 Restaurant-level operating margin 16.2 % 15.6 % Adjustments: Legal and other matters (1) (3,650) 5,900 Asset impairments and closing costs (2) (2,450) — Partner compensation (3) 1,894 — Total restaurant-level operating income adjustments (4,206) 5,900 Adjusted restaurant-level operating income $ 742,091 $ 682,841 Adjusted restaurant-level operating margin 16.1 % 15.7 % _________________ (1) Reflects changes in legal reserves in connection with certain collective action wage and hour lawsuits.
The increase in Restaurant sales was partially offset by the closure of 25 restaurants since December 27, 2020. Average Restaurant Unit Volumes and Operating Weeks Following is a summary of the average restaurant unit volumes and operating weeks for the periods indicated: FISCAL YEAR (dollars in thousands) 2022 2021 Average restaurant unit volumes: U.S.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued Average Restaurant Unit Volumes and Operating Weeks Following is a summary of the average restaurant unit volumes and operating weeks for the periods indicated: FISCAL YEAR (dollars in thousands) 2023 2022 Average restaurant unit volumes: U.S.
The level of FICA tax credits is primarily driven by U.S. Restaurant sales and is not impacted by costs incurred that may reduce pre-tax income. Provision for income taxes for 2022 was not materially impacted by the Brazilian tax legislation discussed above.
In the U.S., a restaurant company employer may claim a credit against its federal income taxes for FICA taxes paid on certain tipped wages (the “FICA tax credit”). The level of FICA tax credits is primarily driven by U.S. Restaurant sales and is not impacted by costs incurred that may reduce Income before provision for income taxes.
We believe that our use of non-GAAP financial measures permits investors to assess the operating performance of our business relative to our performance based on U.S. GAAP results and relative to other companies within the restaurant industry by isolating the effects of certain items that may vary from period to period without correlation 47 Table of Contents BLOOMIN’ BRANDS, INC.
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+5 added−8 removed4 unchanged
Biggest changeIn addition to the market risks identified above, we are subject to business risk as our U.S. beef supply is highly dependent upon a limited number of vendors. If these vendors were unable to fulfill their obligations under their contracts, we could encounter supply shortages and incur higher costs to secure adequate supplies.
Biggest changeExtreme changes in commodity prices or long-term changes could affect our financial results adversely. Currently we do not use financial instruments to hedge our commodity risk. In addition to the market risks identified above, we are subject to business risk as our U.S. beef and Brazil pork supplies are highly dependent upon a limited number of vendors.
Actual results may differ materially from the discussion based upon general market conditions and changes in U.S. and global financial markets. 61 Table of Contents BLOOMIN’ BRANDS, INC.
Actual results may differ materially from the discussion based upon general market conditions and changes in U.S. and global financial markets. 58 Table of Contents BLOOMIN’ BRANDS, INC.
If foreign currency exchange rates depreciate in the countries in which we operate, we may experience declines in our operating results. Currently, we do not use financial instruments to hedge foreign currency exchange rate changes. For 2022, 11.4% of our revenue was generated in foreign currencies.
If foreign currency exchange rates depreciate in the countries in which we operate, we may experience declines in our operating results. Currently, we do not use financial instruments to hedge foreign currency exchange rate changes. For 2023, 13.2% of our revenue was generated in foreign currencies.
A 10% change in average foreign currency rates against the U.S. dollar would have increased or decreased our Total revenues and Net income for our foreign entities by $54.4 million and $3.6 million, respectively. This market risk discussion contains forward-looking statements.
A 10% change in average foreign currency rates against the U.S. dollar would have increased or decreased our Total revenues and Net income for our foreign entities by $67.0 million and $8.5 million, respectively. This market risk discussion contains forward-looking statements.
We manage our exposure to market risk through regular operating and financing activities and by using a combination of fixed-rate and variable-rate debt. The amount of variable-rate debt fluctuates during the year based on our working capital requirements.
We manage our exposure to market risk through regular operating and financing activities, using a combination of fixed-rate and variable-rate debt, and when deemed appropriate, through the use of derivative financial instruments. The amount of variable-rate debt fluctuates during the year based on our working capital requirements.
A significant number of our restaurant team members are paid at rates related to the federal and/or state minimum wage and, accordingly, increases in the minimum wage increase our labor costs.
Labor Inflation Our restaurant operations are subject to federal and state minimum wage and other laws governing such matters as working conditions, overtime and tip credits. A significant number of our restaurant team members are paid at rates related to the federal and/or state minimum wage and, accordingly, increases in the minimum wage increase our labor costs.
As of December 25, 2022, our interest rate risk was primarily from variable interest rate changes on our revolving credit facility, which had an outstanding balance of $430.0 million. 60 Table of Contents BLOOMIN’ BRANDS, INC. We periodically evaluate financial instruments to hedge our exposure to variable interest rates.
As of December 31, 2023, our interest rate risk was primarily from variable interest rate changes on our revolving credit facility, which had an outstanding balance of $381.0 million. We periodically evaluate financial instruments to hedge our exposure to variable interest rates. We use derivative financial instruments as risk management tools and not for speculative purposes.
As of December 25, 2022, approximately 60% of our estimated 2023 annual food purchases are covered by fixed contracts, most of which are scheduled to expire during 2023. During 2021, commodity markets began experiencing elevated levels of inflation across all proteins given strong consumer demand and product shortages due to supply chain disruptions.
As of December 31, 2023, approximately 70% of our estimated 2024 annual food purchases are covered by fixed contracts, most of which are scheduled to expire during 2024. During 2023, we experienced 4.3% commodity inflation in the U.S. and anticipate 3% to 4% commodity inflation for 2024.
We utilize valuation models to estimate the effects of changing interest rates. As of December 25, 2022, a potential change from a hypothetical 150 basis point increase/decrease in short-term interest rates would increase or decrease our annual interest expense by $6.5 million.
DECEMBER 31, 2023 (dollars in thousands) INCREASE DECREASE Change in fair value (1): Interest rate swap $ 5,230 $ (5,427) Change in annual interest expense (1): Variable rate debt $ 3,620 $ (3,620) ________________ (1) The potential change from a hypothetical 200 basis point increase (decrease) in short-term interest rates.
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In addition, higher input costs across labor, fuel, freight and packaging contributed to increases as well. During 2022, we experienced 14.6% commodity inflation and anticipate mid single digits commodity inflation for 2023. Extreme changes in commodity prices or long-term changes could affect our financial results adversely.
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If these vendors were unable to fulfill their obligations under their contracts, we could encounter supply shortages and incur higher costs to secure adequate supplies. See Note 21 - Commitments and Contingencies of the Notes to Consolidated Financial Statements for further details.
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We expect that in most cases increased commodity prices could be passed through to our customers through increases in menu prices.
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During 2023, we experienced 5.3% labor cost inflation in the U.S. Interest Rate Risk Our interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flows by targeting an appropriate mix of variable and fixed-rate debt.
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However, if there is a time lag between the increasing commodity prices and our ability to increase menu prices, or if we believe the commodity price increase to be short in duration and we choose not to pass on the cost increases, our short-term financial results could be negatively affected.
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To manage the risk of fluctuations in variable interest rate debt, we have interest rate swaps with an aggregate notional amount of $200.0 million, with $100.0 million maturing on December 31, 2024 and $100.0 million maturing on December 31, 2025.
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Additionally, from time to time, competitive circumstances could limit menu price flexibility, and in those cases, margins would be negatively impacted by increased commodity prices. Currently we do not use financial instruments to hedge our commodity risk.
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See Note 16 - Derivative Instruments and Hedging Activities of the Notes to Consolidated Financial Statements for further information. 57 Table of Contents BLOOMIN’ BRANDS, INC. We utilize valuation models to estimate the effects of changing interest rates. The following table summarizes the changes to fair value and interest expense under a shock scenario.
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See Note 22 - Commitments and Contingencies of the Notes to Consolidated Financial Statements for further details. Labor Inflation Our restaurant operations are subject to federal and state minimum wage and other laws governing such matters as working conditions, overtime and tip credits.
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This analysis assumes that interest rates change suddenly, as an interest rate “shock”, and continue to increase or decrease at a consistent level above or below the SOFR curve.
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To the extent permitted by competition and the economy, we have mitigated increased costs by increasing menu prices and may continue to do so if deemed necessary in future years. Substantial increases in costs and expenses could impact our operating results to the extent such increases cannot be passed through to our guests.
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During 2022, we experienced 7.8% labor cost inflation and anticipate mid single digits labor cost inflation during 2023. Interest Rate Risk We are exposed to market risk from fluctuations in interest rates, which could affect our consolidated balance sheet, earnings and cash flows.
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As of December 26, 2021, we had interest rate swaps with an aggregate notional amount of $125.0 million. These swaps matured in November 2022 and as of December 25, 2022, we had no financial instruments to hedge our interest rate exposure. See Note 17 - Derivative Instruments and Hedging Activities of the Notes to Consolidated Financial Statements for further information.

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