Bloomin Brands, Inc. Overview

Transcription

1 Bloomin Brands, Inc. Overview

2 Forward Looking Statements Certain information contained in this presentation, particularly information regarding future economic performance, finances, and expectations and objectives of management constitutes forward-looking statements. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and generally contain words such as believes, estimates, anticipates, expects, feels, forecasts, seeks, projects, intends, plans, may, will, should, could, would, potential and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the Company s forward-looking statements. These risks and uncertainties include, but are not limited to: local, regional, national and international economic conditions; consumer confidence and spending patterns; price and availability of commodities, such as beef, chicken, shrimp, pork, seafood, dairy, potatoes, onions and energy supplies, which are subject to fluctuation and could increase or decrease more than the Company expects; weather, acts of God and other disasters; the seasonality of the Company s business; inflation or deflation; increases in unemployment rates and taxes; increases in labor and health insurance costs; competition and changes in consumer tastes and the level of acceptance of the Company s restaurant concepts (including consumer acceptance of prices); consumer reaction to public health issues; consumer perception of food safety; demographic trends; the cost of advertising and media; government actions and policies; interest rate changes, compliance with debt covenants and the Company s ability to make debt payments; the availability of credit presently arranged from the Company s revolving credit facilities; and the future cost and availability of credit. These risks and uncertainties may cause actual results to differ materially from those projected or implied by the forward-looking statements. For discussion of some of the important factors that could cause these variations, please consult the Risk Factors section of the Company s Form 10-K filed March 4, 2013, its prospectus dated May 22, 2013 and its other filings with the Securities and Exchange Commission. Forward-looking statements are based on current expectations and assumptions and currently available data and are neither predictions nor guarantees of future events or performance. You should not place undue reliance on forwardlooking statements which speak only as of the date hereof. The Company does not undertake to update or revise any forward-looking statements after they are made, whether as a result of new information, future events, or otherwise, except as required by applicable law. Note: A copy of this presentation and the related appendix can be viewed at in the Investors section 2

3 Strong Platform for Sustainable Growth Diversified portfolio of founder-inspired leading brands Significant opportunities for disciplined growth Culture of continuous innovation and drive for productivity gains Consistent growth in margins with additional room for improvement Strong free cash flow generation and track record of deleveraging 3

4 Differentiated Brands with Leading Market Positions Diversified Brand Portfolio Brand Locations (1) Market Position (2) LTM Restaurant Sales by Concept 769 #1 235 #2 2% 6% 8% 182 #2 13% 53% 65 #4 17% (2) 210 #1 Total: 1,483 (3) Brazil / Korea $4.0 bn Sales (3) Note: Numbers in pie chart don t sum to 100% due to rounding. (1) Includes joint venture and franchise restaurants (2) Per Technomic for 2012 and Euromonitor International for 2011 by restaurant category (3) As of 6/30/2013 and includes 22 Roy s locations 4

5 BLMN Revitalization Plan Introduced Q Enhanced Brand Competitiveness 2 Elevated Organizational Effectiveness 3 Strengthened Restaurant Operating Performance 4 Continuous Productivity Mindset to Fund Growth 5

6 BLMN Continues to Demonstrate Strong Comp Growth 3.6% 3.0% 2.5% 4.3% 1.8% 6.0% 3.9% 5.3% 2.3% 4.5% 5.3% 2.5% 2.8% (2.8%) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q % 0.6% 4.9% 5.4% 3.9% 4.8% 6.3% 3.6% 4.3% 1.5% 1.0% 0.3% (0.4%) (1.7%) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q % 5.6% 7.6% 9.3% 9.6% 10.2% 7.4% 5.9% 6.2% 2.1% 3.5% 1.0% 0.5% 0.2% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q % 5.2% 9.0% 7.3% 11.4% 9.9% 10.1% 0.3% 5.4% 6.8% 4.1% 4.0% 5.0% 3.8% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q

7 BLMN Continues to Demonstrate Strong Comp Growth Core Domestic Blended Comps 3.6% 4.2% 5.0% 5.4% 4.0% 6.5% 3.8% 5.2% 2.4% 3.6% 3.5% 2.4% 2.0% (0.8%) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q (1) Knapp Track Casual Dining 0.8% 0.6% 1.3% 2.1% 1.3% 1.4% 2.0% 0.2% 0.5% (1.2%) (0.8%) (0.9%) (0.4%) (2.3%) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q BLMN Comp Sales Gap to Knapp (2) 1.5% 4.8% 3.4% 4.4% 4.1% 1.9% 5.2% 2.4% 3.2% 2.2% 3.1% 4.3% 3.3% 2.4% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q straight quarters of positive Core Domestic Blended Comps (1) Net of trading day impact primarily associated with Leap Day (2) Calculated as Core Domestic Blended Comps less Knapp Track Casual Dining statistics 7 7

8 1 Enhanced Brand Competitiveness Across All Touch Points Menu Innovation Lighter, broader appeal New lunch menus 200+ new items in Service 2012 Complete diagnostic Detailed scorecards SMG customer surveys Customer Price Broad range of price points (barbell menu) Opportunistic purchasing for compelling offers Marketing Repositioned across all brands Increased LTOs, unique promotions Significantly improved ROIs Ambience Completing Outback refresh in 2013 Beginning Carrabba s rollout in 2H

9 : Fresh, Real, Spirited, Together Superior Brand: Broad, Innovative Menu Universal Appeal Beyond Signature Steak: Innovative Promotions: Top Honors: Best Steak 2010, 2011, Consumer Picks Top CDR: #9 9 9

10 : Warm, Authentic, Fresh, Welcoming Superior Brand: Authentic Fresh Italian Food: Innovative Menu and Promotions: Top Honors: Full Service Italian (2012) 2013 Consumer Picks Top CDR: #5 10

11 The Bloomin Brands Playbook: Updating the 360 o Brand Experience at Carrabba s 2013 Objectives Menu Innovation: New, broader menu with lighter options; lunch menu complete Price: A great value for fresh Italian food Ambience: Remodel design complete, with the goal to renovate 40 locations this year Marketing: Innovative marketing programs to address value and lighter varieties Pasta Seconds Campaign Service: Category-leading rankings across service (1) Piloting fully integrated program in June (1) As measured by Service Management Group 11

12 : Innovative, Independent, Polished, Unique 2012 Highly Rated in Six Categories: Top Overall Top Service Top Food Top Facilities Best Seafood Most Popular 2013 Consumer Picks Top Seafood: #1 and Top CDR: #2 Added Sunday brunch; opportunity to expand to other occasions (private dining, curbside, late night) Launching first core menu refresh since 2008; testing to begin in August 2012 Golden Chain Award Winner 4Q 2012 CDR Social Media: #2 12

13 Functional Leadership Concept Presidents 2 Elevated Organizational Effectiveness Elizabeth Smith BLMN Executive Title Past Experience Tenure (yrs) Chairman & Chief Executive Officer 4 Avon Products: President Kraft Foods NA: President US Beverages & Grocery Jeff Smith Outback President 24 Bonefish: Vice President Operations Steve Shlemon Carrabba s President 23 Carrabba s: Vice President Operations Outback: Franchise Partner Stephen Judge Bonefish President <1 Seasons 52: President Skip Fox Fleming s President 12 La Madeleine French Bakery & Café: VP/Operations & New Concepts ClubCorp: Executive VP Rick Scott Roy s President 14 Fleming s: Vice President Operations David Deno Chief Financial Officer 1 Dave Pace Chief Resource Officer 3 Yum! Brands: CFO, COO Best Buy: President of Asia and International CFO Starbucks Coffee Co: President of Partner Resources Yum! Brands: HR & Operations Executive Joe Kadow Chief Legal Officer 19 Baker & Hostetler: Partner Gregg Scarlett SVP of Casual Dining Rest. Ops. 19 Outback: VP of Outback Operations Mandy Shaw SVP Technology and Chief Accounting Officer 10 Bloomin Brands: GVP & Corporate Controller PriceWaterhouseCoopers Mike Nolan Chief Development Officer 1 Panera: Chief Development Officer Roger Chacko John Li Chief Strategy & Market Intelligence Officer Senior Vice President Research & Development 3 USAA: EVP & Chief Marketing Officer Mars: SVP of Competitive & Category Intelligence 3 Kraft Foods: Culinary Director Charlie Weston Chief Information Officer 3 Winn Dixie Stores, Inc.: CIO 13 Senior Team Combines Strong Operational Leadership With Functional Expertise Search Underway for Bloomin Chief Brand Officer Note: shaded boxes reflect changes since IPO 13

14 3 Strengthen Restaurant Level Operating Performance Experienced Field Team Entrepreneurial Culture Highly Attentive Service Differentiated Execution Other than Bonefish, core brand Presidents average 20 years with BLMN Regional field management team averages over 12 years with BLMN Managing Partners have skin in the game Incented for growth Customer surveys implemented in 2009 (SMG) Comprehensive training program SMG Overall Satisfaction Scores Index June 2013 Bonefish Grill 110 Carrabba s 107 Outback 104 Avg of SMG CDR set

15 4 Continuous Productivity Mindset Annual Productivity Savings Deep and talented team with crossfunctional commitment at senior level ($ in millions) $75 Solid pipeline of ideas and new initiatives $48 $46 $43 $59 $50 $50 Productivity savings funding innovation, offsetting food inflation headwinds and increasing margins E 2014E Cumulative Cost Savings Achieved $271 million 15

16 Growth Strategy 16

17 Three Platforms For Sustainable Growth Continuous Productivity Mindset to Fund Investment 1 Grow Comp Sales & Profitability 2 Domestic New Unit Expansion 3 Accelerate Outback International Growth Build Scale, Infrastructure and Systems 17

18 1 Grow Comp Sales & Profitability: The Bloomin Brands Playbook Expand occasions and frequency BLMN Comp Sales Gap to Knapp Casual (1) Focus on $25 billion domestic lunch segment 3.5% 3.4% 3.2% 3.1% 4.3% 3.3% Measured multi-year lunch rollout 2.2% 2.4% Strong remodel and relocation program to enhance growth Q1 Q2 Q3 Q4 Q1 Q BLMN Comp Traffic Gap to Knapp Casual (2) Continue to deliver outstanding brand experience vs competition Ongoing menu and promotional innovation 7.5% 5.5% 4.2% 4.1% 4.9% 4.4% 3.1% 2.7% Q1 Q2 Q3 Q4 Q1 Q (1) Bloomin Brands Core Domestic Company-owned comp sales less Knapp Casual for each time period. Q shown net of trading day due to impact of Leap Day (2) Bloomin Brands Core Domestic Company-owned traffic less Knapp Casual traffic for each time period 18

19 Grow Comp Sales: Lunch Roll-out Saturday / Sunday lunch roll-out complete and continuing to grow Minimal cannibalization on dinner CDR Industry % of Lunch (1) Lunch 29% Other 5% Dinner 66% $25 billion lunch segment Bloomin Lunch Status vs. Industry Outback (Domestic) % of Lunch Evolution FY 2011 FY 2012 Dinner 91% Lunch 9% Dinner 89% Lunch 11% Weekday Lunch Roll-out Status (2) Measured rollout of weekday lunch 50% - 60% 50% - 60% 25% 21% (1) For year ended March 31, 2013, as compiled by NPD/CREST (2) Current is as of June 30, 2013 Current Potential Current Potential 19

20 Grow Comp Sales: Remodels Plan to remodel 130+ stores in 2013 Upgrading Ambience to Match Food 80 Outback locations Finalized new Carrabba s remodel design, with approximately 40 planned in 2013 Select additional renovations across the portfolio Cumulative Outback Remodels E 20

21 Grow Comp Sales: Accelerate Outback Relocations Relocate legacy Outback Steakhouses from B and C to A locations Relocation Examples Target to accelerate an additional relocations in fiscal 2013 Potential for 100 Outback Steakhouse relocations Initial results have shown a 40% traffic lift Weekday lunch Additional dinner lift 21

22 2 Domestic New Unit Expansion Bonefish Primary development vehicle with opportunity to expand to 300 restaurants in 4 6 years Opening well above system average 17 new units opened in 2012 and accelerating in 2013 and beyond Bonefish Penetration Core Established Emerging Expansion Region Households (MM) Store Count (12/31/2012) Avg. Penetration (Households Per Store) Core ,000 Established ,000 Emerging ,000 Expansion na 22

23 Domestic New Unit Expansion Carrabba s Approximately 5 7 new units planned for 2013 Opening well above system average 200 Incremental High Opportunity Trade Areas Identified Carrabba s Penetration Core Established Emerging Expansion Region Households (MM) Store Count (12/31/2012) Avg. Penetration (Households Per Store) Core ,000 Established ,000 Emerging ,000 Expansion na 23

24 3 Platform for International Growth International platform focused on Outback since 1996 Locations by Ownership Type (1) Company Owned / JV (160) Hong Kong China Current base of 210 units in 20 countries (1) Brazil $698 million system-wide sales (2) 108 South Korea Primarily Company-owned and JV locations, a key point of differentiation Middle East Franchise (50) North America 3 Strong infrastructure and leadership to leverage in high CDR growth LATAM and Asia markets Latin America Asia Pacific (1) As of 6/30/2013, Asia Pacific also includes seven restaurants in Australia and 1 in Guam (2) For the LTM period ended June 30, 2013, comprised of $326 million in sales from Company-owned restaurants and $372 million from Franchised and Joint Venture locations 24

25 Platform for International Growth International Growth Priorities Outback Steakhouse Shanghai, China New unit growth in established markets such as South Korea maintain market leadership positions Actively pursue near-term Company- Owned / JV opportunities in high growth markets: Brazil China Mexico Opened 15 units in 2012 Plan to open units in

26 Financial Highlights 26

27 Historical Financial Performance Operating Momentum ($ in millions) Total Revenues Adjusted Operating Income Growth (2) ($ in millions) $237 $3,988 $3,841 $197 $3,628 $ % 5.9% 5.0% Comparable Domestic Restaurant Sales % 4.9% 3.7% Bloomin' Brands % Margin Growth % vs. Prior Year 9.4% 20.3% Source: Company filings (1) 2-year CAGR (2) See appendix for reconciliation of Adjusted operating income to GAAP Income from operations 27

28 Continued Margin Improvement Opportunities Adjusted Operating Income Margin (1) Improved Adjusted operating income margins by 80 bps in 2012 (1) 80 bps improvement 8.6% Continued margin improvement driven by: Long runway of productivity initiatives 5.1% 5.9% Increased fixed cost leverage as we grow existing AUVs Headroom for prudent and modest price increases Peer Median (2) Source: Company filings (1) See appendix for reconciliation of Adjusted operating income to GAAP operating income. The Company s treatment of Adjusted operating income margin may differ from the companies included in the peer group (2) Represents median of Bravo Brio, Brinker, Cheesecake Factory, Darden and Texas Roadhouse as of calendar year

29 Continuous Productivity Pipeline Pipeline of Proven Best Practices Identified to Achieve Annual Savings Target of $50 million Sourcing Scale Food Cost Reduction Supply Chain Efficiencies Head Count & Labor Optimization Facilities 2011 Management Strategic partnerships SKU reduction & spec standardization Minimize waste Leverage supply chain partners to reduce cost & improve quality Improved logistics Enhanced distribution and forecasting Optimize scheduling and head count Lean kitchen and service improvement initiatives Enterprise level repairs and services programs Reduced energy usage 29

30 Update on Q2 Results Q2 Results ($ in millions) Revenue Q Q Total Revenues $1,019 $981 YoY Growth 3.9% 2.7% Core Domestic Blended Comp 2.0% 2.4% Profitability Adjusted Operating Income $69 $51 Margin % 6.7% 5.2% YoY Growth 34.5% 17.0% Adjusted Net Income $32 $19 Margin % 3.1% 2.0% YoY Growth 64.7% 18.0% Adjusted Diluted Pro Forma EPS $0.25 $0.16 YoY Growth 56.3% 17.7% Note: See appendix for reconciliation of Adjusted operating income, Adjusted net income and Adjusted diluted pro forma EPS to their comparable GAAP measures 30

31 Strong Free Cash Flow Generation and Track Record of Deleveraging ($ in millions) Free Cash Flow (1) Historical Net Debt to Adjusted EBITDA (2) $ x $196 $ x 4.5x 3.1x 3.0x $ Current CapEx $58 $60 $121 $179 Capital expenditures plan of $ mm for 2013 Note: Current represents LTM Q (1) Free cash flow defined as Adjusted EBITDA less cash taxes, cash interest, required principal payments, change in net working capital excluding cash, and maintenance capital. Please see appendix for free cash flow reconciliation. (2) Net debt defined as total debt less cash and cash equivalents. Please see appendix for Adjusted EBITDA reconciliation. 31

32 Capital Structure Changes in 2012 & 2013 Sale-leaseback of 67 properties CMBS debt refinanced in Q IPO completed in Q % senior notes retired in Q Term loan & revolver refinanced in Q and re-priced in Q $25 million voluntary payment of term loan in Q Current Capitalization ($ in millions) 6/30/2013 Cash $222 Revolver - Term Loan B 967 Other Debt 11 CMBS 486 Total Debt $1,464 Net Debt / Adj. EBITDA 3.0x Net Adj. Debt / EBITDAR (1) 4.2x Ratings Agency Upgrades! Lower Debt Costs! Source: Company filings and Company data (1) Adjusted for operating leases at 8x rent expense of $140.9 million in

33 Strong Platform for Sustainable Growth Diversified portfolio of founder-inspired leading brands Significant opportunities for disciplined growth Culture of continuous innovation and drive for productivity gains Consistent growth in margins with additional room for improvement Strong free cash flow generation and track record of deleveraging 33

34 Appendix 34

35 Adjusted EBITDA Reconciliation $ in thousands Three months ended Six months ended Years Ended December 31, June 30, June 30, Net income (loss) attributable to Bloomin' ($64,463) $52,968 $100,005 $49,971 $17,440 $74,868 $67,439 $138,091 Provision (benefit) for income taxes (2,462) 21,300 21,716 12,106 3,936 (41,312) 16,741 (30,605) Interest expense, net 115,880 91,428 83,387 86,642 24,037 18,015 45,011 38,895 Depreciation and amortization 186, , , ,482 39,247 40,889 78,107 81,085 EBITDA $235,029 $321,963 $358,797 $304,201 $84,660 $92,460 $207,298 $227,466 Impairments and disposals 192,572 4,915 15,062 7,945 3, ,927 1,471 Stock-based compensation expense 15,215 3,146 3,907 21, ,018 1,462 7,447 Others (gains) losses 884 (1,833) (90) 1, (35) 1, Deal-related expenses (1) 1,157 7,582 25, , Management fees and expenses 9,786 9,550 9,370 13,776 2,291 4,617 (Gain) loss on the extinguishment and modification of debt (158,061) 20,957 14,586 2,851 14,586 Unusual (gain) loss (2) 24,500 (33,150) Adjusted EBITDA $319,925 $338,898 $361,478 $396,305 $91,707 $111,337 $231,976 $252,221 (1) Deal-related expenses incurred in 2011 primarily include costs associated with the sale of our restaurants in Japan and the sale of properties in the sale-leaseback transaction completed on March 14, 2012 in which we sold 67 restaurant properties to two third-party real estate institutional investors then simultaneously leased them back under nine master leases (the Sale-Leaseback Transaction ). Deal-related expenses incurred in the six months ended June 30, 2012 primarily include legal and other professional fees resulting from the amendment and restatement of a lease between OSI and PRP. (2) In November 2011, we received a settlement payment from T-Bird, a limited liability company affiliated with our California franchisees of Outback Steakhouse restaurants, in connection with a settlement agreement that satisfied all outstanding litigation with T-Bird. This litigation began in early 2009, and therefore, we had recorded an allowance for the note receivable for the year ended December 31, In March 2009, we recorded a loss related to our guarantee of an uncollateralized line of credit that permits borrowing of up to a maximum of $24.5 million for our joint venture partner in Roy s. We recorded this loss based on our determination that our performance under the guarantee was probable. 35

36 Free Cash Flow Reconciliation $ in thousands Adjusted EBITDA $319,925 $338,898 $361,478 $396,305 Cash paid for interest 109,023 96,718 72,099 78,216 Cash paid for income taxes, net of refunds 21,342 10,779 27,699 24,276 Required principal payments 13,100 13,100 13,100 9,825 Maintenance capital 28,800 32,500 42,300 37,667 Change in NWC 35,590 (10,271) (19,432) (29,148) Free Cash Flow $112,070 $196,072 $225,712 $275,469 36

37 Adjusted Income from Operations, Adjusted Net Income, Adjusted Diluted EPS, Adjusted Diluted EPS per Pro Forma Share Reconciliation (Continued on Page 38) Three Months Ended Six Months Ended $ in Thousands Years Ended December 31, June 30, June 30, Income from operations $168,911 $213,452 $181,137 $67,886 $48,720 $164,746 $139,128 Transaction-related expenses (1) 1,157 7,583 45, ,761 Management fees and expenses (2) 9,550 9,370 13,776 2,291 4,617 Other gains (33,150) (3,500) Adjusted income from operations $179,618 $197,255 $236,908 $68,590 $51,011 $165,450 $150,506 Net income attributable to Bloomin Brands, Inc. $52,968 $100,005 $49,971 $74,868 $17,440 $138,091 $67,439 Transaction-related expenses (1) 1,157 7,583 45, ,761 Management fees and expenses (2) 9,550 9,370 13,776 2,291 4,617 Other gains (33,150) (3,500) Loss on extinguishment and modification of debt (3) 20,956 14,586 14,586 2,851 Total adjustments, before income taxes 10,707 (16,197) 76,727 15,290 2,291 15,290 14,229 Adjustment to (benefit) provision for income taxes (4) (2,837) 2,689 (12,660) (58,370) (426) (58,370) (2,647) Net adjustments 7,870 (13,508) 64,067 (43,080) $1,865 (43,080) 11,582 Adjusted net income attributable to Bloomin Brands, Inc. $60,838 $86,497 $114,038 $31,788 $19,305 $95,011 $79,021 Diluted earnings per share $0.50 $0.94 $0.44 $0.58 $0.16 $1.08 $0.63 Adjusted diluted earnings per share $0.57 $0.81 $0.99 $0.25 $0.18 $0.74 $0.74 Adjusted diluted earnings per pro forma share $0.51 $0.72 $0.92 $0.25 $0.16 $0.74 $0.65 Diluted weighted average common shares outstanding 105, , , , , , ,255 Pro forma IPO adjustment (5) 14,197 14,197 8,684 14,197 14,197 Pro forma diluted weighted average common shares outstanding (5) 120, , , , , , ,452 Note: All footnotes refer to three and six months ended 2013 and 2012 (1) Transaction-related expenses primarily relate to costs incurred in association with the secondary offering of the Company s common stock completed in May 2013 and the refinancing of the 2012 CMBS Loan in March (2) Represents management fees, out-of-pocket expenses and certain other reimbursable expenses paid to a management company owned by the sponsors and founders under a management agreement with the Company. In accordance with the terms of an amendment, this agreement terminated immediately prior to the completion of the IPO in August (3) Loss on extinguishment and modification of debt is related to the repricing of OSI Restaurant Partner, LLC s term loan B facility in April 2013 and the extinguishment of the previous CMBS loan in connection with New Private Restaurant Properties, LLC, and two of the Company s other indirect wholly-owned subsidiaries, entering into the 2012 CMBS loan in March (4) Adjustment to (benefit) provision for income taxes for the three and six months ended June 30, 2013 represents an adjustment to the (Benefit) provision for income taxes to apply a normalized annual effective income tax rate, which excludes the income tax benefit of the valuation allowance release, to Adjusted income before (benefit) provision for income taxes. The normalized 2013 full-year tax rate is more comparable to the Company s expectation for future effective income tax rates. The Company s expected future effective income tax rate is lower than the U.S. blended federal and state statutory rate because of the continued generation of U.S. tax credits and expected earnings in foreign jurisdictions with lower income tax rates. See calculation below of the income tax effect of adjustments for the three and six months ended June 30, Adjustment to (benefit) provision for income taxes for the three and six months ended June 30, 2012 was calculated using the projected full-year effective income tax rate of 18.6%. 37

38 Adjusted Income from Operations, Adjusted Net Income, Adjusted Diluted EPS, Adjusted Diluted EPS per Pro Forma Share Reconciliation (Continued from Page 37) THREE MONTHS ENDED SIX MONTHS ENDED June 30, 2013 June 30, 2013 Income before (benefit) provision for income taxes $35,152 $110,915 Transaction-related expenses Loss on extinguishment and modification of debt 14,586 14,586 Adjusted income before (benefit) provision for income taxes 50, ,205 Income tax expense at normalized tax rate of approximately 33.8% and 22.0% for the three and six months ended June 30, 2013, respectively (a) 17,058 27,765 Less: (Benefit) provision for income taxes (41,312) (30,605) Adjustment to (benefit) provision for income taxes $58,370 $58,370 (a) Due to the second quarter 2013 income tax valuation allowance release, the Company utilized a normalized annual effective tax rate of 22.0% for the six months ended June 30, As a result, the Adjustment to (benefit) provision for income taxes for the three months ended June 30, 2013 includes approximately $6.0 million of higher income tax effect for the true-up of a normalized tax rate treatment on the first quarter of 2013 which, as previously reported, did not include any adjustments. Excluding the effect of this true-up in the second quarter of 2013, the Adjusted net income attributable to Bloomin Brands, Inc. would have been $37.7 million and Adjusted diluted earnings per pro forma share would have been $0.29 per share for the three months ended June 30, If the normalized tax rate had been applied during the first quarter of 2013, Adjusted net income attributable to Bloomin Brands, Inc. would have been $57.3 million and Adjusted diluted earnings per pro forma share would have been $0.45 per share for the three months ended March 31, 2013 (reported amounts were $63.2 million and $0.50 per share, respectively). (5) Gives pro forma effect to the issuance of shares in the IPO as if they were all outstanding on January 1, There is no effect of this adjustment for the three and six months ended June 30,