Bloomin' Brands Annual Report 2015

Plain-text annual report

BLOOMIN' BRANDS, INC. FORM 10-K (Annual Report) Filed 02/24/16 for the Period Ending 12/27/15 Address Telephone CIK Symbol SIC Code 2202 NORTH WEST SHORE BOULEVARD SUITE 500 TAMPA, FL 33607 813-282-1225 0001546417 BLMN 5812 - Eating Places Industry Conglomerates Sector Conglomerates 12/28 Fiscal Year http://www.edgar-online.com © Copyright 2016, EDGAR Online, Inc. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use. UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-K(Mark One) [X]Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended: December 27, 2015 Or[ ]Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ______ to ______Commission File Number: 001-35625BLOOMIN’ BRANDS, INC.(Exact name of registrant as specified in its charter) Delaware 20-8023465(State or other jurisdiction of incorporation or organization) (I.R.S. EmployerIdentification No.)2202 North West Shore Boulevard, Suite 500, Tampa, Florida 33607(Address of principal executive offices) (Zip Code)(813) 282-1225(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:Title of each class Name of each exchange on which registeredCommon Stock, $0.01 par value The Nasdaq Stock Market LLC(Nasdaq Global Select Market) Securities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ý NO oIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES o NO ýIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for thepast 90 days. YES ý NO oIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to besubmitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). YES ý NO oIndicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not becontained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or anyamendment to this Form 10-K. oIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See thedefinitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.Large accelerated filer ý Accelerated filer oNon-accelerated filer o (Do not check if smaller reporting company) Smaller reporting company oIndicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES o NO ýThe aggregate market value of common stock held by non-affiliates (based on the closing price on the last business day of the registrant’s most recently completedsecond fiscal quarter as reported on the Nasdaq Global Select Market) was $2.5 billion .As of February 19, 2016 , 119,328,868 shares of common stock of the registrant were outstanding.DOCUMENTS INCORPORATED BY REFERENCEPortions of the registrant’s definitive Proxy Statement for its 2016 Annual Meeting of Stockholders, expected to be held on April 22, 2016 , are incorporated byreference into Part III, Items 10-14 of this Annual Report on Form 10-K. Table of ContentsBLOOMIN’ BRANDS, INC.INDEX TO ANNUAL REPORT ON FORM 10-KFor Fiscal Year 2015TABLE OF CONTENTS PAGE NO.PART I Item 1. Business5Item 1A. Risk Factors16Item 1B. Unresolved Staff Comments26Item 2. Properties27Item 3. Legal Proceedings27Item 4. Mine Safety Disclosures28PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities29Item 6. Selected Financial Data32Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations33Item 7A. Quantitative and Qualitative Disclosures About Market Risk66Item 8. Financial Statements and Supplementary Data68Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure116Item 9A. Controls and Procedures116Item 9B. Other Information116PART III Item 10. Directors, Executive Officers and Corporate Governance117Item 11. Executive Compensation117Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters117Item 13. Certain Relationships and Related Transactions, and Director Independence117Item 14. Principal Accounting Fees and Services118PART IV Item 15. Exhibits, Financial Statement Schedules119Signatures1252Table of ContentsBLOOMIN’ BRANDS, INC.PART ICautionary StatementThis Annual Report on Form 10-K (the “Report”) includes statements that express our opinions, expectations, beliefs, plans, objectives,assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements”within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, asamended (the “Exchange Act”). These forward-looking statements can generally be identified by the use of forward-looking terminology,including the terms “believes,” “estimates,” “anticipates,” “expects,” “feels,” “seeks,” “forecasts,” “projects,” “intends,” “plans,” “may,”“will,” “should,” “could” or “would” or, in each case, their negative or other variations or comparable terminology, although not all forward-looking statements are accompanied by such terms. These forward-looking statements include all matters that are not historical facts. Theyappear in a number of places throughout this Report and include statements regarding our intentions, beliefs or current expectationsconcerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industry inwhich we operate.By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances thatmay or may not occur in the future. Although we base these forward-looking statements on assumptions that we believe are reasonable whenmade, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations,financial condition and liquidity, and industry developments may differ materially from statements made in or suggested by the forward-looking statements contained in this Report. In addition, even if our results of operations, financial condition and liquidity, and industrydevelopments are consistent with the forward-looking statements contained in this Report, those results or developments may not beindicative of results or developments in subsequent periods. Important factors that could cause actual results to differ materially fromstatements made or suggested by forward-looking statements include, but are not limited to, those described in the “Risk Factors” section ofthis Report and the following:(i)Economic conditions and their effects on consumer confidence and discretionary spending, consumer traffic, the cost and availabilityof credit and interest rates;(ii)Our ability to compete in the highly competitive restaurant industry with many well-established competitors and new market entrants;(iii)Consumer reactions to public health and food safety issues;(iv)Our ability to comply with governmental laws and regulations, the costs of compliance with such laws and regulations and the effectsof changes to applicable laws and regulations, including tax laws and unanticipated liabilities;(v)Minimum wage increases and additional mandated employee benefits;(vi)Fluctuations in the price and availability of commodities;(vii)Our ability to implement our expansion, remodeling and relocation plans due to uncertainty in locating and acquiring attractive siteson acceptable terms, obtaining required permits and approvals, recruiting and training necessary personnel, obtaining adequatefinancing and estimating the performance of newly opened, remodeled or relocated restaurants;(viii)Our ability to protect our information technology systems from interruption or security breach and to protect consumer data andpersonal employee information;(ix)The effects of international economic, political and social conditions and legal systems on our foreign operations and on foreigncurrency exchange rates;3Table of ContentsBLOOMIN’ BRANDS, INC.(x)Our ability to preserve and grow the reputation and value of our brands;(xi)Seasonal and periodic fluctuations in our results and the effects of significant adverse weather conditions and other disasters orunforeseen events;(xii)Our ability to effectively respond to changes in patterns of consumer traffic, consumer tastes and dietary habits;(xiii)Strategic actions, including acquisitions and dispositions, and our success in integrating any acquired or newly created businesses.(xiv)The effects of our substantial leverage and restrictive covenants in our various credit facilities on our ability to raise additional capitalto fund our operations, to make capital expenditures to invest in new or renovate restaurants and to react to changes in the economy orour industry, and our exposure to interest rate risk in connection with our variable-rate debt; and(xv)The adequacy of our cash flow and earnings and other conditions which may affect our ability to pay dividends and repurchase sharesof our common stock.In light of these risks and uncertainties, we caution you not to place undue reliance on these forward-looking statements. Any forward-looking statement that we make in this Report speaks only as of the date of such statement, and we undertake no obligation to update anyforward-looking statement or to publicly announce the results of any revision to any of those statements to reflect future events ordevelopments. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of futureperformance, unless specifically expressed as such, and should only be viewed as historical data.4Table of ContentsBLOOMIN’ BRANDS, INC.Item 1. BusinessGeneral and History - Bloomin’ Brands, Inc. (“Bloomin’ Brands,” the “Company,” “we,” “us,” and “our” and similar terms mean Bloomin’Brands, Inc. and its subsidiaries except where the context otherwise requires) is one of the largest casual dining restaurant companies in theworld, with a portfolio of leading, differentiated restaurant concepts. We have four founder-inspired concepts: Outback Steakhouse,Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar. Our restaurant concepts range in price point and degreeof formality from casual (Outback Steakhouse and Carrabba’s Italian Grill) to upscale casual (Bonefish Grill) and fine dining (Fleming’sPrime Steakhouse & Wine Bar). During 2015, we sold our Roy’s concept.As of December 27, 2015 , we owned and operated 1,336 restaurants and franchised 171 restaurants across 48 states, Puerto Rico, Guam and22 countries.Our predecessor opened the first Outback Steakhouse restaurant in 1988. In 1996, we expanded the Outback Steakhouse conceptinternationally. OSI Restaurant Partners, LLC (“OSI”) is our primary operating entity. New Private Restaurant Properties, LLC (“PRP”), awholly-owned subsidiary of Bloomin’ Brands, leases our owned restaurant properties primarily to OSI subsidiaries.Financial Information About Segments - During the first quarter of 2015, we recast our segment reporting to include two reportable segments,U.S. and International, which reflects changes made in how we manage our business, review operating performance and allocate resources.The U.S. segment includes all brands operating in the U.S. and brands operating outside the U.S. are included in the International segment.All prior period information was recast to reflect this change. Following is a summary of reporting segments as of December 27, 2015 :SEGMENT CONCEPT GEOGRAPHIC LOCATIONU.S. Outback Steakhouse United States of America, including Puerto Rico Carrabba’s Italian Grill Bonefish Grill Fleming’s Prime Steakhouse & Wine Bar International Outback Steakhouse (1) Brazil, South Korea, Hong Kong, China Carrabba’s Italian Grill (Abbraccio) Brazil________________(1)Includes international franchise locations in 18 countries and Guam.Segment information for fiscal years 2015, 2014 and 2013, which reflects financial information by geographic area, is included inManagement’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 and Note 20 - Segment Reportingof our Notes to Consolidated Financial Statements in Part II, Item 8.OUR SEGMENTSU.S. SegmentOutback Steakhouse - Outback Steakhouse is a casual steakhouse restaurant focused on steaks, signature flavors and Australian decor. TheOutback Steakhouse menu offers seasoned and seared or wood-fire grilled steaks, chops, chicken, seafood, pasta, salads and seasonalspecials. The menu also includes several specialty appetizers, including our signature Bloomin’ Onion ® , and desserts, together with full barservice featuring Australian wine and beer.Carrabba’s Italian Grill - Carrabba’s Italian Grill is a casual authentic Italian restaurant featuring handcrafted dishes. The Carrabba’s ItalianGrill menu includes a variety of Italian pasta, chicken, beef and seafood dishes, small plates, salads and wood-fired pizza. Our ingredients aresourced from around the world and our traditional Italian exhibition kitchen allows consumers to watch handmade dishes being prepared.5Table of ContentsBLOOMIN’ BRANDS, INC.Bonefish Grill - Bonefish Grill is an upscale casual seafood restaurant that specializes in market fresh fish from around the world, wood-grilled specialties and hand-crafted cocktails. In addition, Bonefish Grill offers beef, pork and chicken entrées, as well as several specialtyappetizers, including our signature Bang Bang Shrimp ® , and desserts.Fleming’s Prime Steakhouse & Wine Bar - Fleming’s Prime Steakhouse & Wine Bar is a contemporary steakhouse featuring prime cuts ofbeef, chops, fresh fish, seafood and poultry, salads and side dishes. The steak selection features USDA Prime corn-fed beef, both wet- anddry-aged for flavor and texture, in a variety of sizes and cuts. Fleming’s Prime Steakhouse & Wine Bar offers a large selection of domesticand imported wines, with 100 selections available by the glass.International SegmentWe have cross-functional, local management to support and grow restaurants in each of the countries where we have Company-ownedoperations. Our international operations are integrated with our corporate organization to leverage enterprise-wide capabilities, includingmarketing, finance, real estate, information technology, legal, human resources, supply chain management and productivity.Prior to November 1, 2013, our Outback Steakhouse locations in Brazil were operated as an unconsolidated joint venture (“Brazil JointVenture”). On November 1, 2013, we acquired a controlling interest in the Brazil Joint Venture.As of December 27, 2015 , we owned and operated 166 restaurants and franchised 58 restaurants across 22 countries and Guam.Outback Steakhouse - International Outback Steakhouse restaurants have a menu similar to the U.S. menu with additional variety to meetlocal taste preferences. In addition to the traditional Outback Special sirloin, a typical international menu may feature local beef cuts such asthe Aussie Grilled Picanha in Brazil.Carrabba’s Italian Grill (Abbraccio Cucina Italiana) - In 2015, we opened a Carrabba’s Italian Grill concept restaurant in Brazil, known asAbbraccio Cucina Italiana, which offers a blend of traditional modern Italian dishes. The Abbraccio Cucina Italiana menu varies, withadditional pasta and pizza menu offerings, to account for local tastes and customs. Abbraccio Cucina Italiana also has a range of beverageoptions, including classically inspired cocktails and local favorites with an Italian twist.Restaurant OverviewSelected Sales Data - Following is sales mix by product type and average check per person for Company-owned restaurants during fiscal year2015 : U.S. INTERNATIONAL OutbackSteakhouse Carrabba’sItalian Grill Bonefish Grill Fleming’s Prime Steakhouse & Wine Bar OutbackSteakhouseBrazil OutbackSteakhouseSouth KoreaFood & non-alcoholic beverage89% 85% 78% 72% 82% 98%Alcoholic beverage11% 15% 22% 28% 18% 2% 100% 100% 100% 100% 100% 100% Average check per person ($USD)$22 $21 $25 $72 $15 $17Average check per person (LC) R$48 ₩19,5896Table of ContentsBLOOMIN’ BRANDS, INC.Lunch Expansion - All of our U.S. concepts serve dinner every day of the week. Outback Steakhouse and Carrabba’s Italian Grill are open forlunch on Saturday and Sunday (“weekend lunch”), with many locations also open for lunch Monday through Friday (“weekday lunch”). Mostinternational locations serve lunch and dinner. Following is the percentage of U.S. Outback Steakhouse and Carrabba’s Italian Grill locationsopen for weekday and weekend lunch as of the dates indicated: DECEMBER 27, 2015 DECEMBER 28, 2014 DECEMBER 31, 2013 WEEKEND WEEKDAY WEEKEND WEEKDAY WEEKEND WEEKDAYOutback Steakhouse100% 79% 100% 61% 100% 35%Carrabba’s Italian Grill100% 62% 100% 55% 100% 40%System-wide Restaurant Summary - Following is a system-wide rollforward of restaurants in operation during fiscal year 2015 : DECEMBER 28, 2014 2015 ACTIVITY DECEMBER 27, 2015 U.S. STATE OPENED CLOSED COUNTNumber of restaurants: U.S. Outback Steakhouse Company-owned648 6 (4) 650 Franchised105 — — 105 Total753 6 (4) 755 48Carrabba’s Italian Grill Company-owned242 2 — 244 Franchised1 2 — 3 Total243 4 — 247 32Bonefish Grill Company-owned201 10 (1) 210 Franchised5 — — 5 Total206 10 (1) 215 38Fleming’s Prime Steakhouse & Wine Bar Company-owned66 — — 66 28Roy’s (1) Company-owned20 — (20) — International Company-owned Outback Steakhouse - Brazil (2)63 12 — 75 Outback Steakhouse - South Korea (3)91 5 (21) 75 Other11 9 (4) 16 Franchised55 3 — 58 Total220 29 (25) 224 System-wide total1,508 49 (50) 1,507 ____________________(1)On January 26, 2015, we sold our Roy’s concept.(2)The restaurant counts for Brazil are reported as of November 30, 2015 and 2014, respectively, to correspond with the balance sheet dates of this subsidiary.(3)In the first quarter of 2015, we adopted a policy that relocated international restaurants closed more than 30 days and relocated U.S. restaurants closed more than 60days are considered a closure. Prior periods for South Korea have been revised to conform to the current year presentation.7Table of ContentsBLOOMIN’ BRANDS, INC.RESTAURANT DESIGN AND DEVELOPMENTSite Design - We generally construct freestanding buildings on leased properties, although certain leased sites are also located in stripshopping centers. Construction of a new restaurant typically takes 60 to 180 days from the date the location is leased or under contract andfully permitted. In the majority of cases, future restaurant development will result from the lease of existing third-party retail space. Wetypically design the interior of our restaurants in-house, utilizing outside architects when necessary.Remodel and Relocation Plans - We have an ongoing program across all of our concepts to maintain the relevance of our restaurants’ambience. We also have an ongoing relocation plan, primarily related to the Outback Steakhouse brand. This multi-year relocation plan isfocused on driving additional traffic to our restaurants by moving legacy restaurants from non-prime to prime locations within the same tradearea.Site Selection Process - We have a central site selection team comprised of real estate development, property/lease management and designand construction personnel. This site selection team also utilizes a combination of existing field operations managers, internal developmentpersonnel and outside real estate brokers to identify and qualify potential sites.Restaurant DevelopmentWe utilize the ownership structure and market entry strategy that best fits the needs for a particular market, including Company-owned units,joint ventures and franchises. For each market, we determine whether we will focus on Company-owned units, joint ventures or franchisesbased on demand, cost structure and economic conditions.U.S. Development - We plan to opportunistically pursue unit growth in Outback Steakhouse locations through existing geography fill-in andmarket expansion opportunities based on their current location mix. We believe we have the potential to relocate or add 50 OutbackSteakhouse units over the next three years and increase Fleming’s Prime Steakhouse & Wine Bar units to 100 over time. In the second quarterof 2015, we made the decision to slow Bonefish Grill restaurant development until there is an improvement in our sales results. We believelong-term growth opportunities remain for Bonefish Grill, as the majority of restaurants are located in the southern and eastern U.S., withsignificant geographic expansion potential in the top 100 U.S. markets.International Development - We continue to expand internationally, leveraging established equity and franchise markets in Asia and SouthAmerica, and in strategically selected emerging and high-growth developed markets, focusing on Brazil and China. In March 2015, weopened our first Abbraccio Cucina Italiana in Brazil. The first Fleming’s Prime Steakhouse & Wine Bar in Brazil (“Fleming’s Brazil”) isexpected to open during the first half of fiscal 2016. We will own a 20% interest in Fleming’s Brazil.New restaurant growth in Brazil will be our top international development priority in 2016, as we continue to develop additional concepts inthat market. We see significant potential for growth of Outback Steakhouse in Brazil to 100 restaurants within the next three years.See Item 2 - Properties for disclosure of our international restaurant count by country.RESEARCH & DEVELOPMENT / INNOVATIONWe utilize a global core menu policy to ensure consistency and quality in our menu offerings. Before we add an item to the core menu, ourresearch and development (“R&D”) team performs a thorough review of the item, including conducting consumer research, in order to assistus in determining the viability of adding the item. Internationally, we have teams in our developed markets that tailor our menus to addressthe preferences of local consumers.We continuously evolve our product offerings to improve our efficiency and based on consumer trends and feedback. We have a 12-monthpipeline of new menu and promotional items across all concepts that allows us to quickly make adjustments in response to market demands,when necessary. In addition, we have dedicated resources focused on8Table of ContentsBLOOMIN’ BRANDS, INC.productivity across the portfolio. For new menu items and significant product changes, we have a testing process that includes directconsumer feedback on the product and its pricing. R&D expense was $6.5 million , $5.8 million and $6.4 million for fiscal years 2015 , 2014and 2013 , respectively.INFORMATION SYSTEMSRestaurant-level financial and accounting controls are handled through the point-of-sale (“POS”) system and network in each restaurant thatcommunicates with our corporate headquarters. The POS system is also used to authorize and transmit credit card sales transactions. OurCompany-owned restaurants, and most of our franchise restaurants, are connected through data centers and a portal to provide our corporateemployees and regional partners with access to business information and tools that allow them to collaborate, communicate, train and shareinformation.We continue to invest in our infrastructure to provide a better overall consumer experience, reduce our costs, create efficiencies and enhancesecurity. During 2015 , we implemented a new facilities management solution to reduce maintenance costs and made improvements to ourcentralized inventory management system which monitors our commodity costs. We also made infrastructure enhancements to our restaurantsto improve customer satisfaction.ADVERTISING AND MARKETINGWe generally advertise through national and spot television and radio media. Our concepts have an active public relations program and alsorely on national promotions, site visibility, local marketing, digital marketing, direct mail, billboards and point-of-sale materials to promoteour restaurants. In recent years, we have increased the use of digital advertising which has allowed us to be more efficient with ouradvertising expenditures. Internationally, we have teams in our developed markets that engage local agencies to tailor advertising to eachmarket and develop relevant and timely promotions based on local consumer demand.To help maintain consumer interest and relevance, each concept leverages limited-time offers featuring seasonal specials. We promotelimited-time offers through integrated marketing programs that utilize all of our advertising resources.RESTAURANT OPERATIONSManagement and Employees - The management staff of our restaurants varies by concept and restaurant size. Our restaurants employprimarily hourly employees, many of whom work part-time. The Restaurant Managing Partner has primary responsibility for the day-to-dayoperation of the restaurant and is required to abide by Company-established operating standards. Area Operating Partners are responsible foroverseeing the operations of typically six to 14 restaurants and Restaurant Managing Partners in a specific region.Area Operating Partners, Restaurant Managing Partner and Chef Partner Programs - Area Operating Partners, Restaurant ManagingPartners and Chef Partners generally receive bonuses for providing management and supervisory services to their restaurants based on apercentage of their restaurants’ monthly distributable cash flow (“Monthly Payments”).Restaurant Managing Partners and Chef Partners in the U.S. are eligible to participate in deferred compensation programs. Under thesedeferred compensation programs, the Restaurant Managing Partners and Chef Partners are eligible to receive payments beginning uponcompletion of their five-year employment agreement. We invest in various corporate-owned life insurance policies, which are held within anirrevocable grantor or “rabbi” trust account for settlement of our obligations under the deferred compensation plans.On the fifth anniversary of the opening of each new U.S. Company-owned restaurant, the Area Operating Partner supervising the restaurantduring the first five years of operation receives an additional bonus based upon the average distributable cash flow of the restaurant for thepreceding 24 months. In addition to Monthly Payments and deferred compensation, Area Operating Partners, Restaurant Managing Partnersand Chef Partners in the U.S. whose restaurants9Table of ContentsBLOOMIN’ BRANDS, INC.and concepts achieve certain targets, including sales, profitability and traffic growth, are eligible to receive an annual bonus.Many of our international Restaurant Managing Partners enter into employment agreements and purchase participation interests in the cashdistributions from the restaurants they manage. The amount and terms vary by country. This interest gives the partners the right to receive apercentage of the restaurant’s annual cash flows for the duration of the agreement.Supervision and Training - We require our Area Operating Partners and Restaurant Managing Partners to have significant experience in thefull-service restaurant industry. All Area Operating Partners and Restaurant Managing Partners are required to complete a comprehensivetraining program that emphasizes our operating strategy, procedures and standards. The Restaurant Managing Partners and Area OperatingPartners, together with our Presidents, Regional Vice Presidents, Vice Presidents of Training and Directors of Training, are responsible forselecting and training the employees for each new restaurant.Service - In order to better assess and improve our performance, we use a third-party research firm to conduct an ongoing satisfactionmeasurement program that provides us with industry benchmarking information for our Company-owned and franchise locations in the U.S.We have a similar consumer satisfaction measurement program for our international Company-owned locations. These programs measuresatisfaction across a wide range of experience elements.Food Preparation and Quality Control - We have an R&D facility located in Tampa, Florida that serves as a test kitchen and vendor productqualification site. Our quality assurance team manages internal auditors responsible for supplier evaluations and external third parties whoinspect supplier adherence to quality, food safety and product specification. Our suppliers also utilize third-party labs for food safety andquality verification. Suppliers that do not comply with quality, food safety and other specifications are not utilized until they have correctiveactions in place and are re-certified for compliance. We develop sourcing strategies for all commodity categories based on the dynamics ofeach category. In addition, we require our supplier partners to meet or exceed our quality assurance standards.Our operational teams have multiple touch points in the restaurants ensuring food safety, quality and freshness throughout all phases of thepreparation process. In addition, we employ third-party auditors to verify our standards of food safety, training and sanitation.SOURCING AND SUPPLYWe 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 international operations in Asia and South America. The supplychain management organization is responsible for all food and operating supply purchases as well as a large percentage of purchases of fieldand corporate services.We address the end-to-end costs (from the source to the fork) associated with the products and goods we purchase by utilizing a combinationof global, regional and local suppliers to capture efficiencies and economies of scale. This “total cost of ownership” (“TCO”) approachfocuses on the initial purchase price, coupled with the cost structure underlying the procurement and order fulfillment process. The TCOapproach includes monitoring commodity markets and trends to execute product purchases at the most advantageous times.We have a national distribution program that includes food, beverage, smallwares and packaging goods in all major markets. This program ismanaged by a custom distribution company that only provides products approved for our system. This customized relationship also enablesour staff to effectively manage and prioritize our supply chain.Proteins represent 62% of our global commodity procurement composition, with beef representing 53% of purchased proteins. In 2015 , wepurchased more than 90% of our beef raw materials from four beef suppliers that represent approximately 85% of the total U.S. beefmarketplace. Due to the nature of our industry, we expect to continue purchasing a substantial amount of our beef from a small number ofsuppliers. Other major commodity categories10Table of ContentsBLOOMIN’ BRANDS, INC.purchased include produce, dairy, bread and pasta, and energy sources to operate our restaurants, such as natural gas and electricity.RESTAURANT OWNERSHIP STRUCTURESOur restaurants are Company-owned or operated under franchise arrangements. We generate our revenues primarily from our Company-owned restaurants and secondarily through ongoing royalties from our franchised restaurants and sales of franchise rights.Company-Owned Restaurants - Company-owned restaurants include restaurants wholly-owned by us and restaurants in which we have amajority ownership. Our cash flows from entities in which we have a majority ownership are limited to the portion of our ownership. Theresults of operations of Company-owned restaurants are included in our consolidated operating results and the portion of income or lossattributable to the noncontrolling interests is eliminated in our Consolidated Statements of Operations and Comprehensive Income .We pay royalties on the majority of our Carrabba’s Italian Grill restaurants pursuant to agreements we entered into with the Carrabba’s ItalianGrill founders (“Carrabba’s Founders”). Following is a summary of Carrabba’s royalties and sales in the U.S. subject to royalties as ofDecember 27, 2015 : ROYALTYPERCENTAGE LOCATIONS AS OF DECEMBER 27, 2015U.S. sales, except for qualifying lunch sales, as described below1.0%-1.5% 235U.S. lunch sales for new restaurants opened on or after June 1, 2014 (1)0.5% 6U.S. lunch sales for existing restaurants that began serving weekday lunch on or after June 1, 2014 (2)0.5% 36____________________(1)Lunch sales for new restaurants are defined as sales occurring prior to 4 pm local time Monday through Saturday.(2)Weekday lunch sales for existing restaurants are defined as sales occurring prior to 4 pm local time Monday through Friday.Each Carrabba’s restaurant located outside the United States pays a one-time lump sum fee to the Carrabba’s Founders, which variesdepending on the size of the restaurant. No continuing royalty fee is paid to the Carrabba’s Founders for Carrabba’s restaurants locatedoutside the United States.Unaffiliated Franchise Program - Our unaffiliated franchise agreements grant third parties rights to establish and operate a restaurant usingone of our concepts. Franchised restaurants are required to be operated in accordance with the franchise agreement and in compliance withtheir respective concept’s standards and specifications.In recent years, we updated our standard U.S. and international franchise agreements for all new and renewing franchisees. The majority ofour existing franchisees continue to operate under previous franchise agreements. As each franchise location renews, we expect that thelocation will convert to our then-current franchise agreement.11Table of ContentsBLOOMIN’ BRANDS, INC.Under our franchise agreements, each of our franchisees is required to pay an initial franchise fee and pay monthly royalties based on apercentage of gross restaurant sales. Initial franchise fees are $40,000 for U.S. franchisees and range between $40,000 and $75,000 forinternational franchisees, depending on its market. Some franchisees may also pay administration fees based on a percentage of grossrestaurant sales. Following is a summary of franchise fees based on our current existing unaffiliated franchise agreements:(as a % of gross Restaurant sales)MONTHLY FEES (1)ROYALTY ADMIN.Outback Steakhouse-U.S. (2)3.00% - 5.00% 0.50%Outback Steakhouse-international (3)3.00% - 6.00% n/aBonefish Grill2.50% - 4.00% 0.50%Carrabba’s Italian Grill (2)5.75% n/a_________________(1)Under U.S. franchise agreements executed prior to 2013, each U.S. franchisee is generally required to expend or contribute, on a monthly basis, a minimum of 1.5% to3.5% of each restaurant’s monthly gross sales for local and national advertising. Under U.S. franchise agreements executed in 2013 or after, a U.S. franchisee mustcontribute a percentage of gross sales for national marketing programs and must also spend a certain amount of gross sales on local advertising, up to a maximum of8.0% of gross restaurant sales for combined national marketing and local advertising.(2)Outback Steakhouse and Carrabba’s Italian Grill franchisees with restaurants located in airports pay royalties on gross restaurant sales of 5.00% and 5.75%,respectively, in exchange for increased operational support at those locations. All non-airport Outback Steakhouse franchisees pay royalties on gross restaurant sales of3.00% to 3.50%. As of December 27, 2015 , two franchised Outback Steakhouse restaurants and all franchised Carrabba’s Italian Grill restaurants were located inairports.(3)Royalties under international franchise agreements vary by market.T-Bird Restaurant Group, Inc. (“T-Bird”) is party to an Outback Steakhouse Master Franchise Agreement. T-Bird, through its affiliates, ownsand operates 56 Outback Steakhouse restaurants in California. T-Bird is also party to a separate Outback Steakhouse development agreement,which gives T-Bird the exclusive right to open additional Outback Steakhouse restaurants in California through 2031 and commits T-Bird toopening seven new Outback Steakhouse restaurants in California by January 2022. Each new Outback Steakhouse restaurant that T-Birdopens in California is governed by the Master Franchise Agreement. As of December 27, 2015 , no new Outback Steakhouse restaurants haveopened under T-Bird’s development agreement.COMPETITIONThe restaurant industry is highly competitive with a substantial number of restaurant operators that compete directly and indirectly with us inrespect to price, service, location and food quality, and there are other well-established competitors with significant financial and otherresources. There is also active competition for management personnel, attractive suitable real estate sites, supplies and restaurant employees.In addition, competition is also influenced strongly by marketing and brand reputation. At an aggregate level, all major U.S. casual diningrestaurants and casual dining restaurants in the international markets in which we operate would be considered competitors of our concepts.Further, we face growing competition from the supermarket industry and home delivery services, with improved selections of prepared meals,and from quick service and fast casual restaurants, as a result of higher-quality food and beverage offerings. Internationally, we faceincreasing competition due to an increase in the number of casual dining restaurant options in the markets in which we operate.GOVERNMENT REGULATIONWe are subject to various federal, state, local and international laws affecting our business. Each of our restaurants is subject to licensing andregulation by a number of governmental authorities, which may include, among others, alcoholic beverage control, health and safety,nutritional menu labeling, health care, environmental and fire agencies in the state, municipality or country in which the restaurant is located.U.S. - Alcoholic beverage sales represent 15% of our U.S. restaurant sales. Alcoholic beverage control regulations require each of ourrestaurants to apply to a state authority and, in certain locations, county or municipal authorities12Table of ContentsBLOOMIN’ BRANDS, INC.for a license or permit to sell alcoholic beverages on the premises and to provide service for extended hours and on Sundays.Our restaurant operations are also subject to federal and state laws for such matters as:•immigration, employment, minimum wages, overtime, tip credits, worker conditions and health care;•nutritional labeling, nutritional content, menu labeling and food safety;•the Americans with Disabilities Act, which, among other things, requires our restaurants to meet federally mandated requirements forthe disabled; and•information security, privacy, cashless payments, gift cards and consumer credit, protection and fraud.International - Our restaurants outside of the United States are subject to similar local laws and regulations as our U.S. restaurants, includinglabor, food safety and information security. In addition, we are subject to anti-bribery and anti-corruption laws and regulations.See Item 1A - Risk Factors for a discussion of risks relating to federal, state, local and international regulation of our business.EXECUTIVE OFFICERS OF THE REGISTRANTBelow is a list of the names, ages, positions and a brief description of the business experience of each of our executive officers as ofFebruary 19, 2016 .NAME AGE POSITIONElizabeth A. Smith 52 Chairman of the Board of Directors and Chief Executive OfficerDavid J. Deno 58 Executive Vice President and Chief Financial and Administrative OfficerDonagh M. Herlihy 52 Executive Vice President, Digital and Chief Information OfficerJoseph J. Kadow 59 Executive Vice President, Chief Legal Officer and Assistant SecretaryMichael Kappitt 46 Executive Vice President and President of Carrabba’s Italian GrillPatrick C. Murtha 57 Executive Vice President and President of Bloomin’ Brands InternationalGregg Scarlett 54 Executive Vice President and President of Bonefish GrillSukhdev Singh 52 Executive Vice President, Chief Development Officer and FranchisingJeffrey S. Smith 53 Executive Vice President and President of Outback SteakhouseElizabeth A. Smith was appointed Chairman in January 2012. Since November 2009, Ms. Smith has served as Chief Executive Officer and amember of our Board of Directors. Ms. Smith is a member of the Board of Directors of Hilton Worldwide Holdings, Inc.David J. Deno has served as Executive Vice President and Chief Financial and Administrative Officer since May 2012. From December2009 to May 2012, Mr. Deno served as Chief Financial Officer of the international division of Best Buy Co. Inc.Donagh M. Herlihy joined Bloomin’ Brands as Executive Vice President, Digital and Chief Information Officer in September 2014. Prior tojoining Bloomin’ Brands, Mr. Herlihy was Senior Vice President, Chief Information Officer and eCommerce of Avon Products, Inc. fromMarch 2008 to August 2014.Joseph J. Kadow has served as Executive Vice President, Chief Legal Officer and Assistant Secretary since April 2005.13Table of ContentsBLOOMIN’ BRANDS, INC.Michael Kappitt has served as Executive Vice President and President of Carrabba’s Italian Grill since February 2016. Mr. Kappitt served asSenior Vice President and Chief Marketing Officer from January 2014 to February 2016 and Chief Marketing Officer of Outback from March2011 to December 2013. Prior to joining Bloomin’ Brands, Mr. Kappitt served as Chief Marketing Officer, North America from April 2010to December 2010 and Senior Vice President Global Business Intelligence & Strategy from July 2007 to April 2010 at Burger KingCorporation.Patrick C. Murtha has served as Executive Vice President and President of Bloomin’ Brands International since November 2013. FromJanuary 2006 to March 2013, Mr. Murtha was the Chief Operating Officer of Pizza Hut, Inc.Gregg Scarlett has served as Executive Vice President and President of Bonefish Grill since March 2015. Mr. Scarlett served as Senior VicePresident, Casual Dining Restaurant Operations from January 2013 to March 2015 and Senior Vice President of Operations for OutbackSteakhouse from March 2010 to January 2013.Sukhdev Singh has served as Executive Vice President, Chief Development Officer and Franchising since May 2015. Mr. Singh served asSenior Vice President, Chief Development Officer from January 2014 to May 2015. Prior to joining Bloomin’ Brands, Mr. Singh was ChiefDevelopment Officer for Darden Restaurants from July 2006 to January 2014.Jeffrey S. Smith has served as President of Outback Steakhouse since April 2007 and Executive Vice President since January 2012.EMPLOYEESAs of December 27, 2015 , we employed approximately 100,000 persons, of which approximately 1,100 are corporate personnel. None of ourU.S. employees are covered by a collective bargaining agreement. Various national industry-wide labor agreements apply to certain of ouremployees in Brazil. We consider our employee relations to be good.TRADEMARKSWe regard our Outback ® , Outback Steakhouse ® , Carrabba’s Italian Grill ® , Bonefish Grill ® , and Fleming’s Prime Steakhouse & Wine Bar® service marks and our Bloomin’ Onion ® trademark as having significant value and as being important factors in the marketing of ourrestaurants. We have also obtained trademarks for several of our other menu items and for various advertising slogans. We are aware ofnames and marks similar to the service marks of ours used by other persons in certain geographic areas in which we have restaurants.However, we believe such uses will not adversely affect us. Our policy is to pursue registration of our marks whenever possible and to opposevigorously any infringement of our marks.We license the use of our registered trademarks to franchisees and third parties through franchise arrangements and licenses. The franchiseand license arrangements restrict franchisees’ and licensees’ activities with respect to the use of our trademarks, and impose quality controlstandards in connection with goods and services offered in connection with the trademarks.SEASONALITY AND QUARTERLY RESULTSOur business is subject to seasonal fluctuations. Historically, customer traffic patterns for our established U.S. restaurants are generallyhighest in the first quarter of the year and lowest in the third quarter of the year. International customer traffic patterns vary by market. Forexample, Brazil historically experiences minimal seasonal traffic fluctuations, and South Korea restaurant traffic is generally highest in thefirst quarter of the year and lowest in the second quarter of the year. Additionally, holidays and severe weather may affect sales volumesseasonally in some of our markets.Quarterly results have been and will continue to be significantly affected by general economic conditions, the timing of new restaurantopenings and their associated pre-opening costs, restaurant closures and exit-related costs and impairments of goodwill, definite andindefinite-lived intangible assets and property, fixtures and equipment. In 2014, we changed our fiscal year end, which impacted thecomparability of our quarterly and annual results to prior periods.14Table of ContentsBLOOMIN’ BRANDS, INC.As a result of these and other factors, our financial results for any given quarter may not be indicative of the results that may be achieved for afull fiscal year.ADDITIONAL INFORMATIONWe make available, free of charge, through our internet website www.bloominbrands.com, our Annual Report on Form 10-K, QuarterlyReports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements and amendments to those reports filed or furnished pursuant toSection 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after electronically filing suchmaterial with the Securities and Exchange Commission (“SEC”). You may read and copy any materials filed with the SEC at the Securitiesand Exchange Commission’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. You may obtain information on theoperation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Our reports and other materials filed with the SEC are alsoavailable at www.sec.gov. The reference to these website addresses does not constitute incorporation by reference of the informationcontained on the websites and should not be considered part of this Report.15Table of ContentsBLOOMIN’ BRANDS, INC.Item 1A. Risk FactorsThe risk factors set forth below should be carefully considered. The risks described below are those that we believe could materially andadversely affect our business, financial condition or results of operations, however, they are not the only risks facing us. Additional risks anduncertainties not currently known to us or those we currently view to be immaterial may also materially and adversely affect our business,financial condition or results of operations.Risks Related to Our Business and IndustryChallenging economic conditions may have a negative effect on our business and financial results.Challenging economic conditions may negatively impact consumer spending and thus cause a decline in our financial results. For example,international, domestic and regional economic conditions and the impacts of reduced or stagnant disposable consumer income, financialmarket volatility, social unrest and governmental spending and budget matters and the slow or stagnant pace of economic growth generallyhave had a negative effect on consumer confidence and discretionary spending. This has affected consumer traffic and comparable restaurantsales for us and throughout our industry in recent periods. We believe these factors and conditions will continue to result in a challengingsales environment in the casual dining sector. Continued weakness in or a further worsening of the economy or the other factors mentionedabove, generally or in particular markets in which we operate, and our consumers’ reactions to these trends could result in increased pressurewith respect to our pricing, traffic levels, commodity and other costs and the continuation of our innovation and productivity initiatives,which could negatively impact our business and results of operations. These factors could also cause us to, among other things, reduce thenumber and frequency of new restaurant openings, close restaurants or delay remodeling of our existing restaurant locations. Further, pooreconomic conditions may force nearby businesses to shut down, which could cause our restaurant locations to be less attractive.The restaurant industry is highly competitive. Our inability to compete effectively could adversely affect our business, financial conditionand results of operations.A substantial number of restaurant operators compete directly and indirectly with us with respect to price, service, location and food quality,some of which are well-established with significant resources. There is also active competition for management and other personnel andattractive suitable real estate sites. Consumer tastes, nutritional and dietary trends, traffic patterns and the type, number and location ofcompeting restaurants often affect the restaurant business, and our competitors may react more efficiently, creatively and effectively to thoseconditions. In addition, our competitors may generate or better implement business strategies that improve the value and relevance of theirbrands and reputation, relative to ours. For example, our competitors may better manage pressures from rising commodity prices orimplement menu or technology initiatives, such as remote ordering or social media or mobile technology platforms that expedite or enhancethe customer experience. Further, we face growing competition from the supermarket industry and home delivery services, with theimprovement of their prepared food offerings, and from quick service and fast casual restaurants, as a result of higher-quality food andbeverage offerings by those restaurants. If we are unable to continue to compete effectively, our traffic, sales and margins could decline andour business, financial condition and results of operations would be adversely affected.Food safety and food-borne illness concerns in our restaurants or throughout the industry or supply chain may have an adverse effect onour business by reducing demand and increasing costs.Regardless of the source or cause, any report of food-borne illnesses and other food safety issues, whether at one of our restaurants or in theindustry or supply chain generally, could have a negative impact on our traffic and sales and adversely affect the reputation of our brands.Food safety issues could be caused by suppliers or distributors and, as a result, be out of our control. Health concerns or outbreaks of diseasein a food product could also reduce demand for particular menu offerings. Even instances of food-borne illness, food tampering or foodcontamination occurring solely at restaurants of other companies could result in negative publicity about the food service industry generallyand adversely impact our sales. The occurrence of food-borne illnesses or food safety issues could also adversely affect the price andavailability of affected ingredients, resulting in higher costs and lower margins.16Table of ContentsBLOOMIN’ BRANDS, INC.Our failure to comply with government regulation related to our restaurant operations, and the costs of compliance or non-compliance,could adversely affect our business.We are subject to various federal, state, local and foreign laws affecting our business. Each of our restaurants is subject to licensing andregulation by a number of governmental authorities, which may include, among others, alcoholic beverage control, food safety, nutritionalmenu labeling, health care, environmental and fire agencies in the state, municipality or country in which the restaurant is located. Oursuppliers are also subject to regulation in some of these areas. Any difficulties or inabilities to retain or renew licenses, or increasedcompliance costs due to changed regulations, could adversely affect operations at existing restaurants. Additionally, difficulties in obtainingor failing to obtain the required licenses or approvals could delay or prevent the development of new restaurants.Alcoholic beverage sales represent 14% of our consolidated restaurant sales and are subject to extensive state and local licensing and otherregulations. The failure of a restaurant to obtain or retain a liquor license would adversely affect that restaurant’s operations. In addition, weare subject to “dram shop” statutes in certain states. These statutes generally provide a person injured by an intoxicated person the right torecover damages from an establishment that wrongfully served alcoholic beverages to the intoxicated person.The FDA adopted final regulations to implement federal nutritional disclosure requirements in 2014, and we will be required to comply withthese regulations by the end of 2016. The regulations will require us to include calorie information on our menus, and provide additionalnutritional information upon request. If the costs of implementing or complying with these new requirements exceed our expectations, ourresults of operations could be adversely affected. Furthermore, the effect of such labeling requirements on consumer choices, if any, isunclear. It is possible that we may also become subject to other regulation in the future seeking to tax or regulate high fat and high sodiumfoods in certain of our markets. Compliance with these regulations could be costly.We are subject to various federal and state employment and labor laws and regulations.Various federal and state employment and labor laws and regulations govern our relationships with our employees and affect operating costs,and similar laws and regulations apply to our operations outside of the U.S. These laws and regulations relate to matters includingemployment discrimination, minimum wage requirements, overtime, tip credits, unemployment tax rates, workers’ compensation rates,working conditions, immigration status, tax reporting and other wage and benefit requirements. Any significant additional governmentregulations and new laws governing our relationships with employees, including minimum wage increases, mandated benefits or otherrequirements that impose additional obligations on us, could increase our costs and adversely affect our business and results of operations.As a significant number of our food service and preparation personnel are paid at rates related to the applicable minimum wage, federal, stateand local proposals related to minimum wage requirements or similar matters could, if implemented, materially increase our labor and othercosts. Our ability to respond to minimum wage increases by increasing menu prices would depend on the responses of our competitors andconsumers. Our distributors and suppliers could also be affected by higher minimum wage, benefit standards and compliance costs, whichcould result in higher costs for goods and services supplied to us.We rely on our employees to accurately disclose the full amount of their tip income, and we base our FICA tax reporting on the disclosuresprovided to us by such tipped employees. Inaccurate employee FICA tax reporting could subject us to monetary liabilities, which could harmour business, results of operations and financial condition. In 2015, the IRS issued audit adjustments in aggregate of $6.4 million , for theemployer’s share of FICA taxes related to cash tips allegedly received and unreported by our employees during calendar years 2011 and2012.We are also subject, in the ordinary course of business, to employee claims against us based, among other things, on discrimination,harassment, wrongful termination, or violation of wage and labor laws. These claims may divert our financial and management resources thatwould otherwise be used to benefit our operations. The ongoing expense of any resulting lawsuits, and any substantial settlement payment ordamage award against us, could adversely affect our business and results of operations.17Table of ContentsBLOOMIN’ BRANDS, INC.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. Our effective income tax rate in the futurecould 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, changes in tax laws or other legislative changes, including those that may resultfrom the Base Erosion Profit Shifting, or BEPS, initiative being conducted by the Organization for Economic Co-operation and Development,or OECD, the outcome of income tax audits, and any repatriation of non-U.S. earnings for which we have not previously provided for U.S.taxes. Although we believe our tax estimates are reasonable, the final determination of tax audits could be materially different from ourhistorical income tax provisions and accruals. The results of a tax audit could have a material effect on our results of operations or cash flowsin the period or periods for which that determination is made. In addition, our effective income tax rate and our results may be impacted byour ability to realize deferred tax benefits and by any increases or decreases of our valuation allowances applied to our existing deferred taxassets.Increased commodity, energy and other costs could decrease our profit margins or cause us to limit or otherwise modify our menus orincrease prices, which could adversely affect our business.The performance of our restaurants depends on our ability to anticipate and react to changes in the price and availability of food commodities.Our business also incurs significant costs for energy, insurance, labor, marketing and real estate. Prices may be affected due to supply, marketchanges, increased competition, the general risk of inflation, changes in laws, shortages or interruptions in supply due to weather, disease orother conditions beyond our control, or other reasons. Increased prices or shortages could affect the cost and quality of the items we buy orrequire us to raise prices, limit our menu options or implement alternative processes or products. For example, in 2015 , commodity costsincreased by 3.7% and we increased our prices at each of our concepts in the range of 2.1% to 6.4% . We cannot provide any assurance thatwe would be able to successfully offset increased costs by increasing menu prices at levels that are acceptable to our customers or by othermeasures, as our ability to do so depends on a variety of factors, many of which are beyond our control. As result, these events, combinedwith other more general economic and demographic conditions, could impact our pricing and negatively affect our sales and profit margins.Risks associated with our expansion, remodeling and relocation plans may have adverse effects on our operating results.As part of our business strategy, we intend to continue to expand our current portfolio of restaurants. Our current development schedule callsfor the construction of between 40 and 50 new system-wide locations in 2016. A variety of factors could cause the actual results and outcomeof those expansion plans to differ from the anticipated results, including among other things:•the availability of attractive sites for new restaurants;•acquiring or leasing those sites at acceptable prices and other terms;•funding or financing our development;•obtaining all required permits, approvals and licenses on a timely basis;•recruiting and training skilled management and restaurant employees and retaining those employees on acceptable terms;•weather, natural disasters and other events or factors beyond our control resulting in construction or other delays; and•consumer tastes in new geographic regions and acceptance of our restaurant concepts and awareness of our brands in those regions.It is difficult to estimate the performance of newly opened restaurants. Earnings achieved to date by restaurants open for less than two yearsmay not be indicative of future operating results. If new restaurants do not meet targeted performance, it could have a material adverse effecton our operating results, including as a result of any impairment losses that we may be required to recognize. There is also the possibility thatnew restaurants may attract consumers18Table of ContentsBLOOMIN’ BRANDS, INC.away from other restaurants we own, thereby reducing the revenues of those existing restaurants, or that we will incur unrecoverable costs inthe event a development project is abandoned prior to completion.In addition, in an effort to increase same-store sales and improve our operating performance, we continue to make improvements to ourfacilities through our remodeling and relocation programs. We also close underperforming restaurants from time to time in order to improvethe performance of our brands. If the expenses associated with remodels, relocations or closures are higher than anticipated, or remodeled orrelocated restaurants do not perform as expected, these programs may not yield the desired return on investment, which could have a negativeeffect on our operating results.We rely heavily on information technology in our operations and any material failure, weakness, interruption or breach of security couldprevent us from effectively operating our business.Our operations and corporate functions rely heavily on information systems, including point-of-sale processing in our restaurants,management of our supply chain, payment of obligations, collection of cash, data warehousing to support analytics, finance and accountingsystems, mobile technologies to enhance the customer experience and other various processes and procedures, some of which are handled bythird parties. Our ability to efficiently and effectively manage our business depends significantly on the reliability and capacity of thesesystems. The failure of these systems to operate effectively, maintenance problems, upgrading or transitioning to new platforms, or a breachin security relating to these systems could result in delays in consumer service and reduce efficiency in our operations. These problems couldadversely affect our results of operations, and remediation could result in significant, unplanned capital investments.Security breaches of confidential consumer information or personal employee information may adversely affect our business.The majority of our restaurant sales are by credit or debit cards. Other restaurants and retailers have experienced significant security breachesin which credit and debit card information or other personal information of their consumers has been stolen. We also maintain certainpersonal information regarding our employees. All of our technology systems are vulnerable to damage, disability or failures due to physicaltheft, 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 attacks, viruses, worms and other disruptive problems caused by hackers and cybercriminals. A breach in our systems that compromises the information of our consumers or employees could result in widespread negativepublicity, damage to the reputation of our brands, a loss of consumers and legal liabilities.We may in the future become subject to lawsuits or other proceedings for purportedly fraudulent transactions arising out of the actual oralleged theft of our consumers’ credit or debit card information or if consumer or employee information is obtained by unauthorized personsor used inappropriately. Any such claim or proceeding, or any adverse publicity resulting from such an event, may have a material adverseeffect on our business.We face a variety of risks associated with doing business in foreign markets that could have a negative impact on our financialperformance.We have a significant number of restaurants outside the United States, and we intend to continue our efforts to grow internationally. Althoughwe believe we have developed an appropriate support structure for international operations and growth, there is no assurance thatinternational operations will be profitable or international growth will continue. In addition, if we have a significant concentration ofrestaurants in a foreign market the impact of any negative local conditions can have a sizable impact on our results.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 consumerpreferences, diverse government regulations and tax systems, corruption, anti-American sentiment, the ability to source high qualityingredients and other commodities in a cost-effective manner,19Table of ContentsBLOOMIN’ BRANDS, INC.uncertain or differing interpretations of rights and obligations in connection with international franchise agreements and the collection ofongoing royalties from international franchisees, the availability and costs of land, construction and financing, and the availability ofexperienced management, appropriate franchisees and area operating partners.Currency regulations and fluctuations in exchange rates could also affect our performance. We have foreign operations in a total of 22countries and Guam, including direct investments in restaurants in South Korea, Brazil, Hong Kong and China, as well as internationalfranchises. As a result, we may experience losses from fluctuations in foreign currency exchange rates or any hedging arrangements we enterinto to offset such fluctuations, and such losses could adversely affect our overall sales and earnings.We are subject to governmental regulation of our foreign operations, including antitrust and tax requirements, anti-boycott regulations,import/export/customs regulations and other international trade regulations, the USA Patriot Act and the Foreign Corrupt Practices Act. Anynew regulatory or trade initiatives could impact our operations in certain countries. Failure to comply with any such legal requirements couldsubject us to monetary liabilities and other sanctions, which could harm our business, results of operations and financial condition.Loss of key management personnel could hurt our business and inhibit our ability to operate and grow successfully.Our success will continue to depend, to a significant extent, on our leadership team and other key management personnel. If we are unable toattract and retain sufficiently experienced and capable management personnel, our business and financial results may suffer.Our success depends substantially on the value of our brands.Our success depends on our ability to preserve and grow our brands. Brand value and reputation is based in large part on consumerperceptions, which are driven by both our actions and actions beyond our control, such as new brand strategies or their implementation,business incidents, ineffective advertising or marketing efforts, or unfavorable mainstream or social media publicity involving us, ourindustry, our franchisees, or our suppliers. Because we have limited control over the operations of our franchisees, we cannot give assurancethat there will not be differences in product or service quality at franchised restaurants or that our franchisees will otherwise adhere to all ofour operating guidelines and other requirements. Regardless of its basis or validity, any unfavorable publicity could adversely affect publicperception of our brands. If customers perceive that we and our franchisees fail to deliver a consistently positive and relevant experience, ourbrands could suffer and this could have an adverse effect on our business.Our business is subject to seasonal and periodic fluctuations and past results are not indicative of future results.Historically, consumer traffic patterns for our established restaurants are generally highest in the first quarter of the year and lowest in thethird quarter of the year. Holidays may also affect sales volumes seasonally in some of the markets in which we operate. In addition, ourquarterly results have been and will continue to be affected by the timing of new restaurant openings and their associated preopening costs, aswell as restaurant closures and exit-related costs, debt extinguishment and modification costs and impairments of goodwill, intangible assetsand property, fixtures and equipment. As a result of these and other factors, our financial results for any quarter may not be indicative of theresults that may be achieved for a full fiscal year.Significant adverse weather conditions and other disasters or unforeseen events could negatively impact our results of operations.Adverse weather conditions and natural disasters and other unforeseen events, such as winter storms, severe temperatures, thunderstorms,floods, hurricanes and earthquakes, terror attacks, war and widespread/pandemic illness, and the effects of such events on economicconditions and consumer spending patterns, could negatively impact our results of operations. Temporary and prolonged restaurant closuresmay occur and consumer traffic may decline due to the actual or perceived effects from these events. For example, severe winter weatherconditions have impacted our traffic and results of operations in the past.20Table of ContentsBLOOMIN’ BRANDS, INC.We have a limited number of suppliers for our major products and rely on one custom distribution company for our national distributionprogram in the U.S. If our suppliers or custom distributor are unable to fulfill their obligations under their contracts or we are unable todevelop or maintain relationships with these or new suppliers or distributors, if needed, we could encounter supply shortages and incurhigher costs.We depend on frequent deliveries of fresh food products that meet our specifications, and we have a limited number of suppliers for ourmajor products, such as beef. In 2015 , we purchased more than 90% of our beef raw materials from four beef suppliers that representapproximately 85% of the total beef marketplace in the U.S. Due to the nature of our industry, we expect to continue to purchase a substantialamount of our beef from a small number of suppliers. We also use one supplier in the U.S. to process beef raw materials to our specificationsand we use one distribution company to provide distribution services in the U.S. Although we have not experienced significant problems withour suppliers or distributor, if our suppliers or distributor are unable to fulfill their obligations under their contracts, we could encountersupply shortages and incur higher costs.In addition, if we are unable to maintain current purchasing terms or ensure service availability with our suppliers and distributor, we maylose consumers and experience an increase in costs in seeking alternative supplier or distribution services. The failure to develop and maintainsupplier and distributor relationships and any resulting disruptions to the provision of food and other supplies to our restaurant locations couldadversely affect our operating results.Our failure or inability to enforce our trademarks or other proprietary rights could adversely affect our competitive position or the valueof our brand.Our trademarks, including Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill, Fleming’s Prime Steakhouse & Wine Bar andBloomin’ Onion, and other proprietary rights are important to our success and our competitive position. The protective actions that we takemay not be sufficient to prevent unauthorized usage or imitation by others, which could harm our image, brand or competitive position.Furthermore, our ability to protect trademarks and other proprietary rights may be more limited in certain international markets where weoperate.Litigation could have a material adverse impact on our business and our financial performance.We are subject to lawsuits, administrative proceedings and claims that arise in the regular course of business. These matters typically involveclaims by consumers, employees and others regarding issues such as food borne illness, food safety, premises liability, “dram shop” statuteliability, compliance with wage and hour requirements, work-related injuries, promotional advertising, discrimination, harassment, disabilityand other operational issues common to the foodservice industry, as well as contract disputes and intellectual property infringement matters.Significant legal fees and costs in complex class action litigation or an adverse judgment or settlement that is not insured or is in excess ofinsurance coverage could have a material adverse effect on our financial position and results of operations.Our insurance policies may not provide adequate levels of coverage against all claims, and fluctuating insurance requirements and costscould negatively impact our profitability.We are self-insured, or carry insurance programs with specific retention levels or high per-claim deductibles, for a significant portion of ourrisks and associated liabilities with respect to workers’ compensation, general liability, liquor liability, employment practices liability,property, health benefits and other insurable risks. However, there are types of losses we may incur that cannot be insured against or that webelieve are not commercially reasonable to insure, including wage and hour claims. These losses, if they occur, could have a material andadverse effect on our business and results of operations. Additionally, if our insurance costs increase, there can be no assurance that we willbe able to successfully offset the effect of such increases and our results of operations may be adversely affected.21Table of ContentsBLOOMIN’ BRANDS, INC.The food service industry is affected by consumer preferences and perceptions, including the increasing prevalence of food allergies.Changes in these preferences and perceptions may lessen the demand for our products, which would reduce sales and harm our business.Food service businesses are affected by changes in consumer tastes and demographic trends. For instance, if prevailing health or dietarypreferences cause consumers to avoid steak and other products we offer in any of our concepts in favor of foods that are perceived ashealthier, our business and operating results would be harmed. If we are unable to anticipate or successfully respond to changes in consumerpreferences, our results of operations could be adversely affected, generally or in particular concepts or markets. In addition, the increasingprevalence of food allergies and consumers with vegan and gluten-free diets, for example, may cause consumers to choose to dine out lessfrequently or choose other restaurants with different menu options.Failure to maintain effective systems of internal control over financial reporting and disclosure controls and procedures could adverselyaffect the trading price of our common stock.Effective internal control over financial reporting is necessary for us to provide accurate financial information. If we are unable to adequatelymaintain effective internal control over financial reporting, we may not be able to accurately report our financial results, which could causeinvestors to lose confidence in our reported financial information and negatively affect the trading price of our common stock. Furthermore,we cannot be certain that our internal control over financial reporting and disclosure controls and procedures will prevent all possible errorand fraud. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all controlissues and instances of error or fraud, if any, in our company have been detected. These inherent limitations include the realities thatjudgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake, which could have an adverseimpact on our business.Failure to achieve our projected cost savings from our efficiency initiatives could adversely affect our results of operations and eliminatepotential funding for growth opportunities.In recent years, we have identified strategies and taken steps to reduce operating costs and free up resources to reinvest in our business. Thesestrategies include improved supply chain management, implementing labor scheduling tools and integrating restaurant information systemsacross our brands. We continue to evaluate and implement further cost-saving initiatives. However, the ability to reduce our operating coststhrough these initiatives is subject to risks and uncertainties, such as our ability to obtain improved supply pricing and the reliability of anynew suppliers or technology, and we cannot assure that these activities, or any other activities that we may undertake in the future, willachieve the desired cost savings and efficiencies. Failure to achieve such desired savings could adversely affect our results of operations andfinancial condition and curtail investment in growth opportunities.There are risks and uncertainties associated with strategic actions and initiatives that we may implement.From time to time, we consider various strategic actions and initiatives in order to grow and evolve our business and brands and improve ouroperating results. These actions and initiatives could include, among other things, acquisitions or dispositions of restaurants or brands, newjoint ventures, new franchise arrangements and changes to our operating model. There can be no assurance that any such actions or initiativeswill be successful or deliver their anticipated benefits. We may be exposed to new and unforeseen risks and challenges, particularly if weenter into markets or engage in activities with which we have no or limited prior experience, and it may be difficult to predict the success ofsuch endeavors. If we incur significant expenses or divert management, financial and other resources to a strategic initiative that isunsuccessful or does not meet our expectations, our results of operations and financial condition would be adversely affected. Regardless ofthe ultimate success of a strategic initiative, the implementation and integration of new business or operational processes could be disruptiveto our current operations. Even if we test and evaluate an initiative on a limited basis, the diversion of management time and resources couldhave an adverse effect on our business.22Table of ContentsBLOOMIN’ BRANDS, INC.Risks Related to Our IndebtednessOur substantial leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react tochanges in the economy or our industry and expose us to interest rate risk in connection with our variable-rate debt.We are highly leveraged. As of December 27, 2015 , our total indebtedness was $1.3 billion . As of December 27, 2015 , we also had $363.7million in available unused borrowing capacity under our revolving credit facility, including undrawn letters of credit of $29.3 million .Our high degree of 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;•requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on ourindebtedness, thereby reducing our ability to use our cash flow to fund our operations, capital expenditures, dividend payments, sharerepurchases and future business opportunities;•exposing us to the risk of increased interest rates because certain of our borrowings under our senior secured credit facilities (the“Senior Secured Credit Facility”) and the mortgage loan (the “PRP Mortgage Loan”) are at variable rates of interest;•restricting us from making strategic acquisitions or causing us to make non-strategic divestitures;•limiting our ability to obtain additional financing for working capital, capital expenditures, restaurant development, debt servicerequirements, acquisitions and general corporate or other purposes; and•limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitorswho may not be as highly leveraged.We may incur substantial additional indebtedness in the future, subject to the restrictions contained in our Senior Secured Credit Facility andPRP Mortgage Loan. If new indebtedness is added to our current debt levels, the related risks that we now face could increase.We had $859.5 million of variable-rate debt outstanding under our Senior Secured Credit Facility as of December 27, 2015 . In September2014, we entered into variable-to-fixed interest rate swap agreements with eight counterparties to hedge a portion of the cash flows of ourvariable rate debt that had a start date of June 30, 2015 . The swap agreements have an aggregate notional amount of $400.0 million andmature on May 16, 2019 . While these agreements limit our exposure to higher interest rates, an increase in the floating rate could nonethelesscause a material increase in our interest expense due to the total amount of our outstanding variable rate indebtedness.Our debt agreements contain restrictions that limit our flexibility in operating our business.We are a holding company and conduct our operations through our subsidiaries, certain of which have incurred their own indebtedness. Oursubsidiaries’ debt agreements contain various covenants that limit our ability to obtain funds from our subsidiaries through dividends, loans oradvances. In addition, certain of our debt agreements limit our and our subsidiaries’ ability to, among other things, incur or guaranteeadditional indebtedness, pay dividends on, redeem or repurchase our capital stock, make certain acquisitions or investments, incur or permitto exist certain liens, enter into transactions with affiliates or sell our assets to, merge or consolidate with or into, another company. Our debtagreements require us to satisfy certain financial tests and ratios. Our ability to satisfy such tests and ratios may be affected by events outsideof our control.If we breach the covenants under our debt agreements, the lenders could elect to declare all amounts outstanding under the agreements to beimmediately due and payable and terminate all commitments to extend further credit. If we are unable to repay those amounts, the lendersunder the Senior Secured Credit Facility and the PRP Mortgage Loan could23Table of ContentsBLOOMIN’ BRANDS, INC.proceed against the collateral granted to them to secure that indebtedness. We have pledged substantially all of our assets as collateral underour Senior Secured Credit Facility and the PRP Mortgage Loan. If the lenders under the Senior Secured Credit Facility and the PRP MortgageLoan accelerate the repayment of borrowings, we cannot be certain that we will have sufficient assets to repay them.We may not be able to generate sufficient cash to service all of our indebtedness and operating lease obligations, and we may be forced totake other actions to satisfy our obligations under our indebtedness and operating lease obligations, which may not be successful. If wefail to meet these obligations, we would be in default under our debt agreements and the lenders could elect to declare all amountsoutstanding under them to be immediately due and payable and terminate all commitments to extend further credit.Our ability to make scheduled payments on our debt obligations and to satisfy our operating lease obligations depends on our financialcondition and operating performance, which is subject to prevailing economic and competitive conditions and to financial, business and otherfactors, many of which are beyond our control. We cannot be certain that we will maintain a level of cash flow from operating activitiessufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness, or to pay our operating lease obligations. If ourcash flow and capital resources are insufficient to fund our debt service obligations and operating lease obligations, we may be forced toreduce or delay capital expenditures, sell assets, seek additional capital or restructure or refinance our indebtedness. These alternativemeasures may not be successful and may not permit us to meet our scheduled debt service obligations. In the absence of sufficient operatingresults and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations or takeother actions to meet our debt service and other obligations. Our debt agreements restrict our ability to dispose of assets and how we may usethe proceeds from the disposition. We may not be able to consummate those dispositions or to obtain the proceeds that we could otherwiserealize from such dispositions and any such proceeds that are realized may not be adequate to meet any debt service obligations then due. Thefailure to meet our debt service obligations or the failure to remain in compliance with the financial covenants under our debt agreementswould constitute an event of default under those agreements and the lenders could elect to declare all amounts outstanding under them to beimmediately due and payable and terminate all commitments to extend further credit.Our ability to refinance our indebtedness in the future depends on our financial condition, market conditions and other factors.We cannot be certain that our financial condition or credit and other market conditions will be favorable when our PRP Mortgage Loanmatures in 2018 or, if we meet the requirements for extension of a portion thereof, 2019 or when our Credit Facilities mature in 2019, or atany earlier time we may seek to refinance our debt. Although we intend to pay off our PRP Mortgage Loan through proceeds from a sale-leaseback program, we cannot provide any assurance that we will be able to successfully implement such a program or that the terms andconditions of any sale-leaseback transactions will not create additional business and financial risks. Our ability to enter into sale-leasebacktransactions on acceptable financial terms is subject to various uncertainties, including economic and real estate market conditions in therelevant markets. If we are unable to paydown the existing balance or refinance our indebtedness on favorable terms, our financial conditionand results of operations would be adversely affected.Risks Related to Our Common StockOur 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 ourcommon stock could be subject to wide fluctuations in response to a number of factors, some of which may be beyond our control. Thesefactors include actual or anticipated fluctuations in our operating results, changes in, or our ability to achieve, estimates of our operatingresults by analysts, investors or management, analysts’ recommendations regarding our stock or our competitors’ stock, sales of substantialamounts of our common stock by our stockholders, actions or announcements by us or our competitors, the maintenance and growth of thevalue of our24Table of ContentsBLOOMIN’ BRANDS, INC.brands, litigation, legislation or other regulatory developments affecting us or our industry, natural disasters, terrorist acts, war or othercalamities and changes in general market and economic conditions.If we are unable to continue to pay dividends or repurchase our stock, your investment in our common stock may decline in value.In 2015, we initiated a quarterly dividend program. Our Board of Directors also authorized stock repurchase programs commencing in late2014. The continuation of these programs will require the generation of sufficient cash flows and the existence of surplus. Any decisions todeclare and pay dividends and continue stock repurchase programs in the future will be made at the discretion of our Board of Directors andwill depend on, among other things, our results of operations, financial condition, cash requirements, borrowing capacity, contractualrestrictions and other factors that our Board of Directors may deem relevant at the time.Our ability to pay dividends is dependent on our ability to obtain funds from our subsidiaries and to have access to our revolving creditfacility. Based on our credit agreement, restricted dividend payments from OSI to Bloomin’ Brands can be made on an unlimited basisprovided we are compliant with our debt covenants.If we discontinue our dividend or stock repurchase programs, or reduce the amount of the dividends we pay or stock that we repurchase, theprice of our common stock may fall. As a result, you may not be able to resell your shares at or above the price you paid for them.Provisions in our certificate of incorporation and bylaws, our Senior Secured Credit Facility and Delaware law may discourage, delay orprevent a change of control of our company or changes in our management and, therefore, may depress the trading price of our stock.Our certificate of incorporation and bylaws include certain provisions that could have the effect of discouraging, delaying or preventing achange of control of our company or changes in our management.In addition, our Senior Secured Credit Facility includes change of control provisions that require that no stockholder or “group” within themeaning of Section 13(d) of the Exchange Act (other than our former private equity sponsors, our founders and our management stockholdersor other permitted holders) has obtained more than 40% of our voting power.These provisions in our certificate of incorporation, bylaws, and Senior Secured Credit Facility may discourage, delay or prevent a transactioninvolving a change in control of the Company that is in the best interests of our stockholders. Even in the absence of a takeover attempt, theexistence of these provisions may adversely affect the prevailing market price of our common stock if they are viewed as discouraging futuretakeover attempts.Section 203 of the Delaware General Corporation Law may affect the ability of an “interested stockholder” to engage in certain businesscombinations, including mergers, consolidations or acquisitions of additional shares, for a period of three years following the time that thestockholder becomes an “interested stockholder.” An “interested stockholder” is defined to include persons owning directly or indirectly 15%or more of the outstanding voting stock of a corporation. Although we have elected in our certificate of incorporation not to be subject toSection 203 of the Delaware General Corporation Law our certificate of incorporation contains provisions that have the same effect asSection 203, except that they provide that our former private equity sponsors will not be deemed to be “interested stockholders,” regardless ofthe percentage of our voting stock owned by them, and accordingly will not be subject to such restrictions.25Table of ContentsBLOOMIN’ BRANDS, INC.Our ability to raise capital in the future may be limited, which could make us unable to fund our capital requirements.Our business and operations may consume resources faster than we anticipate. In the future, we may need to raise additional funds throughthe issuance of new equity securities, debt or a combination of both. Additional financing may not be available on favorable terms or at all. Ifadequate funds are not available on acceptable terms, we may be unable to fund our capital requirements. If we issue new debt securities, thedebt holders would have rights senior to common stockholders to make claims on our assets, and the terms of any debt could restrict ouroperations, including our ability to pay dividends on our common stock. If we issue additional equity securities, existing stockholders mayexperience dilution, and the new equity securities could have rights senior to those of our common stock. Because our decision to issuesecurities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate theamount, timing or nature of our future offerings. Thus, our stockholders bear the risk of our future securities offerings reducing the marketprice of our common stock and diluting their interest.Item 1B. Unresolved Staff CommentsNot applicable.26Table of ContentsBLOOMIN’ BRANDS, INC.Item 2. PropertiesAs of December 27, 2015 , we owned 20% of our restaurant sites and leased the remaining 80% of our restaurant sites from third parties. Wehad 1,507 system-wide restaurants located across the following states, territories or countries as of December 27, 2015 :U.S.COMPANY-OWNED FRANCHISEAlabama20 Louisiana22 Ohio48 Alabama1Arizona29 Maryland42 Oklahoma11 Alaska1Arkansas11 Massachusetts22 Pennsylvania47 California63California15 Michigan37 Puerto Rico2 Florida2Colorado30 Minnesota9 Rhode Island4 Georgia1Connecticut15 Mississippi2 South Carolina39 Idaho6Delaware3 Missouri16 South Dakota2 Mississippi7Florida222 Montana1 Tennessee36 Montana2Georgia49 Nebraska7 Texas73 Ohio1Hawaii6 Nevada16 Utah6 Oregon7Illinois26 New Hampshire3 Vermont1 Tennessee3Indiana23 New Jersey44 Virginia61 Virginia1Iowa7 New Mexico6 West Virginia8 Washington18Kansas7 New York46 Wisconsin12 Kentucky17 North Carolina65 Wyoming2 Total U.S. company-owned1,170 Total U.S. franchise113INTERNATIONALCOMPANY-OWNED FRANCHISEBrazil (1)78 Australia7 Guam1 Saudi Arabia5China (Mainland)5 Bahamas1 Indonesia4 Singapore2Hong Kong8 Canada3 Japan10 Taiwan5South Korea75 Chile1 Malaysia2 Thailand1 Costa Rica1 Mexico6 United Arab Emirates1 Dominican Republic2 Philippines4 Ecuador1 Qatar1 Total International company-owned166 Total International franchise58____________________(1)The restaurant count for Brazil is reported as of November 2015 to correspond with the balance sheet date of this subsidiary.Following is a summary of the location and leased square footage for our corporate offices, all of which are leased, as of December 27, 2015 :LOCATION USE SQUARE FEET LEASE EXPIRATIONTampa, Florida Corporate Headquarters 168,000 1/31/2025Newport Beach, California Fleming’s Operations Center 3,941 2/28/2017Seoul, Korea Korea Operations Center 6,174 6/30/2017São Paulo, Brazil Brazil Operations Center 11,722 6/30/2019We also have a number of other smaller office locations regionally in China (mainland) and Hong Kong.Item 3. Legal ProceedingsFor a description of our legal proceedings, see Note 19 - Commitments and Contingencies , of the Notes to the Consolidated FinancialStatements of this Report.27Table of ContentsBLOOMIN’ BRANDS, INC.Item 4. Mine Safety DisclosuresNot applicable.28Table of ContentsBLOOMIN’ BRANDS, INC.PART IIItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesMARKET INFORMATION AND DIVIDENDSOur common stock is listed on the Nasdaq Global Select Market under the symbol “BLMN”.In December 2014, our Board of Directors adopted a dividend policy under which it intends to declare quarterly cash dividends on shares ofour common stock. Future dividend payments will depend on earnings, financial condition, capital expenditure requirements and other factorsthat our Board considers relevant. The terms of our debt agreements permit regular quarterly dividend payments, subject to certainrestrictions. The following table sets forth for the periods indicated the high and low sales prices per share of our common stock as reportedon Nasdaq and the dividends declared and paid during the periods indicated: SALES PRICE DIVIDENDSDECLAREDAND PAID (1) 2015 2014 HIGH LOW HIGH LOW 2015First Quarter$26.25 $22.91 $26.45 $21.59 $0.06Second Quarter24.53 20.86 24.96 20.16 0.06Third Quarter23.83 18.00 22.81 15.01 0.06Fourth Quarter19.44 15.90 24.05 17.45 0.06____________________(1)See Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations - DIVIDENDS AND SHARE REPURCHASES .”HOLDERSAs of February 19, 2016 , there were 119 holders of record of our common stock.SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANSThe following table presents the securities authorized for issuance under our equity compensation plans as of December 27, 2015 :(dollars in thousands, except exercise price) (a) (b) (c)PLAN CATEGORY NUMBER OFSECURITIES TO BEISSUED UPONEXERCISE OFOUTSTANDINGOPTIONS,WARRANTS ANDRIGHTS WEIGHTED-AVERAGEEXERCISE PRICE OFOUTSTANDINGOPTIONS, WARRANTSAND RIGHTS NUMBER OFSECURITIESREMAININGAVAILABLE FORFUTURE ISSUANCEUNDER EQUITYCOMPENSATIONPLANS (EXCLUDINGSECURITIESREFLECTED INCOLUMN (a)) (1)Equity compensation plans approved by security holders 9,718 $12.99 2,552____________________(1)The shares remaining available for issuance may be issued in the form of restricted stock, restricted stock units or other stock awards under the 2012 Incentive Plan. Onthe first business day of each fiscal year, the aggregate number of shares that may be issued pursuant to our 2012 Incentive Plan automatically increases by two percentof the total shares then issued and outstanding.29Table of ContentsBLOOMIN’ BRANDS, INC.STOCK PERFORMANCE GRAPHThe following graph depicts the total return to stockholders from August 8, 2012, the date our common stock became listed on the NasdaqGlobal Select Market, through December 27, 2015 , relative to the performance of the Standard & Poor’s 500 Index and the Standard &Poor’s 500 Consumer Discretionary Sector, a peer group. The graph assumes an investment of $100 in our common stock and each index onAugust 8, 2012 and the reinvestment of dividends paid since that date. The stock price performance shown in the graph is not necessarilyindicative of future price performance.AUGUST 8, 2012DECEMBER 31, 2012DECEMBER 31, 2013DECEMBER 28, 2014DECEMBER 27, 2015Bloomin’ Brands, Inc. (BLMN)$100.00$126.03$193.47$191.38$139.38Standard & Poor’s 500100.00102.72135.96156.76157.94Standard & Poor’s Consumer Discretionary100.00107.53153.58168.55186.1630Table of ContentsBLOOMIN’ BRANDS, INC.PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERSThe following table provides information regarding our purchases of common stock during the thirteen weeks ended December 27, 2015 :PERIOD TOTAL NUMBER OFSHARES PURCHASED (1) AVERAGE PRICEPAID PER SHARE TOTAL NUMBER OFSHARES PURCHASEDAS PART OF PUBLICLYANNOUNCED PLANS ORPROGRAMS APPROXIMATE DOLLARVALUE OF SHARESTHAT MAY YET BEPURCHASED UNDERTHE PLANS ORPROGRAMSSeptember 28, 2015 through October 25, 2015 — $— — $40,001,198October 26, 2015 through November 22, 2015 601,779 $16.60 601,779 $30,001,222November 23, 2015 through December 27, 2015 2,651 $16.90 — $30,001,222Total 604,430 601,779 ____________________(1)The Board of Directors authorized the repurchase of $100.0 million of our outstanding common stock as announced publicly in our press release issued on August 4,2015 (the “2015 Share Repurchase Program”). Common shares repurchased during the thirteen weeks ended December 27, 2015 represented shares repurchased underthe 2015 Share Repurchase Program and 2,651 shares withheld for tax payments due upon vesting of employee restricted stock awards. On February 12, 2016, theCompany’s Board of Directors canceled the remaining authorization under the 2015 Share Repurchase Program and approved a new $250.0 million authorization (the“2016 Share Repurchase Program”), as announced publicly in our press release issued on February 17, 2016. The 2016 Share Repurchase Program will expire onAugust 12, 2017 .31Table of ContentsBLOOMIN’ BRANDS, INC.Item 6. Selected Financial Data FISCAL YEAR(dollars in thousands, except per share data)2015 2014 2013 2012 2011Operating Results: Revenues Restaurant sales$4,349,921 $4,415,783 $4,089,128 $3,946,116 $3,803,252Other revenues27,755 26,928 40,102 41,679 38,012Total revenues (1)4,377,676 4,442,711 4,129,230 3,987,795 3,841,264Income from operations (2)230,925 191,964 225,357 181,137 213,452Net income including noncontrolling interests (2) (3)131,560 95,926 214,568 61,304 109,179Net income attributable to Bloomin’ Brands (2) (3)$127,327 $91,090 $208,367 $49,971 $100,005Basic earnings per share$1.04 $0.73 $1.69 $0.45 $0.94Diluted earnings per share$1.01 $0.71 $1.63 $0.44 $0.94Cash dividends declared per common share$0.24 $— $— $— $—Balance Sheet Data: Total assets (4)$3,032,569 $3,338,240 $3,267,421 $3,003,214 $3,337,783Total debt, net (4)1,316,864 1,309,797 1,408,088 1,481,101 2,093,137Total stockholders’ equity (5)421,900 556,449 482,709 220,205 40,297Cash Flow Data: Capital expenditures$210,263 $237,868 $237,214 $178,720 $120,906Repurchase of common stock170,769 930 436 — —____________________Note: This selected consolidated financial data should be read in conjunction with the consolidated financial statements and notes thereto, included in Item 8 of this Report andManagement’s Discussion and Analysis of Financial Condition and Results of Operations, included in Item 7 of this Report.(1)Total revenues in fiscal year 2015 include $24.3 million of higher restaurant sales due to a change in our fiscal year end. Total revenues in fiscal 2014 year include$46.0 million of lower restaurant sales due to a change in our fiscal year end.(2)Fiscal year 2015 results include $4.9 million of higher income from operations due to a change in our fiscal year end and $31.8 million of asset impairments andrestaurant closing costs related to our Bonefish Restructuring and our International and Domestic Restaurant Closure Initiatives (each as defined later). Fiscal year2014 results include $9.2 million of lower income from operations due to a change in our fiscal year end, $26.8 million of asset impairments and restaurant closingcosts related to our International and Domestic Restaurant Closure Initiatives, $24.0 million of asset impairments related to our Roy’s concept and corporate airplanesand $9.0 million of severance related to our organizational realignment. Fiscal year 2013 results include $18.7 million of asset impairments due to our DomesticRestaurant Closure Initiative. Fiscal year 2012 includes $34.1 million of certain executive compensation costs and non-cash stock compensation charges incurred inconnection with the completion of our initial public offering (“IPO”) and $7.4 million of legal and other professional fees, primarily related to a lease amendmentbetween OSI and PRP. Fiscal years 2012 and 2011 results include management fees and other reimbursable expenses of $13.8 million and $9.4 million, respectively,related to a management agreement with our sponsors and founders, which terminated at the time of our IPO.(3)Fiscal years 2015, 2014, 2013 and 2012 include $3.0 million , $11.1 million , $14.6 million and $21.0 million, respectively, of loss on extinguishment and modificationof debt for: (i) the refinancing in 2015 and 2014, the repricing in 2013 and the refinancing in 2012 of our Senior Secured Credit Facility, (ii) the retirement of OSI’ssenior notes in 2012 and (iii) the refinancing of the 2012 CMBS loan in 2012. Fiscal year 2013 includes a $36.6 million gain on remeasurement of a previously heldequity investment related to our Brazil acquisition. Fiscal year 2013 includes a $52.0 million income tax benefit for a U.S. valuation allowance release. Fiscal year2011 includes a $33.2 million gain related to the recovery of a note receivable from an affiliated entity.(4)Total assets and Total debt, net for fiscal years 2014, 2013, 2012, and 2011 include the reclassification of deferred debt issuance costs due to the adoption of ASU2015-03 and ASU 2015-15. See Note 2 - Summary of Significant Accounting Policies of our Notes to Consolidated Financial Statements in Part II, Item 8 for moreinformation.(5)On August 13, 2012, we completed an IPO in which we issued and sold an aggregate of 14,196,845 shares of common stock at a price to the public of $11.00 pershare. We received net proceeds in the offering of $142.2 million after deducting underwriting discounts and commissions and other offering related expenses.32Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONSItem 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsManagement’s discussion and analysis of financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and the related notes.OverviewWe are one of the largest casual dining restaurant companies in the world with a portfolio of leading, differentiated restaurant concepts. As ofDecember 27, 2015 , we owned and operated 1,336 restaurants and franchised 171 restaurants across 48 states, Puerto Rico, Guam and 22countries. We have four founder-inspired concepts: Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s PrimeSteakhouse & Wine Bar.The casual dining restaurant industry is a highly competitive and fragmented industry and is sensitive to changes in the economy, trends inlifestyles, seasonality and fluctuating costs. Operating margins for restaurants can vary due to competitive pricing strategies, labor costs andfluctuations in prices of commodities and other necessities to operate a restaurant, such as natural gas or other energy supplies. Restaurantcompanies tend to be focused on increasing market share, comparable restaurant sales growth and new unit growth. Our industry ischaracterized by high initial capital investment, coupled with high labor costs. As a result, we focus on driving increased sales at existingrestaurants in order to raise margins and profits, because the incremental contribution to profits from every additional dollar of sales above theminimum costs required to open, staff and operate a restaurant is relatively high. Historically, we have focused on restaurant growth withstrong unit level economics.Executive SummaryOur 2015 financial results include:•A decrease in total revenues of 1.5% to $4.4 billion in 2015 as compared to 2014 , driven primarily by the effect of foreigncurrency translation, partially offset by the net benefit of restaurant openings and closures. The decrease from foreign currencytranslation was due to the depreciation of the Brazil Real and South Korea Won.•An increase in combined U.S. comparable restaurant sales of 0.5% in 2015 , primarily due to increases from pricing and productmix, partially offset by decreases in traffic.•Outback International in Brazil (“Outback Brazil”) comparable restaurant sales increased by 6.3% in 2015 due to increases inmenu prices and traffic, partially offset by decreases from product mix.•Operating margin at the restaurant level improved 0.4% in fiscal year 2015 as compared to fiscal year 2014 primarily due to: (i)the impact of certain cost saving initiatives, (ii) higher average unit volumes and (iii) lower marketing expenses. This increase waspartially offset by: (i) commodity inflation, (ii) higher kitchen and labor costs due to higher wage rates and lunch expansion acrosscertain concepts and (iii) product mix.•Income from operations of $230.9 million in 2015 compared to $192.0 million in 2014 , which was primarily due to lowerimpairments and restaurant closing costs, lower general and administrative expense and an increase in operating margin at therestaurant-level, as described above.•Productivity and cost management initiatives provided savings of $70.4 million in 2015 .33Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - ContinuedFollowing is a summary of significant actions we have taken during the year and other factors that impacted our operating results andliquidity in 2015 :Share Repurchase Programs - During fiscal year 2015, we repurchased $170.0 million of our common stock.On February 12, 2016, our Board of Directors canceled the $30.0 million of remaining authorization available under the 2015 ShareRepurchase Program and approved a new $250.0 million authorization (the “2016 Share Repurchase Program”). The 2016 Share RepurchaseProgram will expire on August 12, 2017 .Dividends - In fiscal year 2015, we implemented a dividend program. During fiscal year 2015 , we declared and paid $29.3 million ofdividends.Credit Agreement Amendments - On March 31, 2015, OSI entered into the Fourth Amendment (the “Fourth Amendment”) to its creditagreement (as amended, the “Credit Agreement”), to effect an increase of OSI’s existing revolving credit facility from $600.0 million to$825.0 million in order to fully pay down its existing Term loan B on April 2, 2015. No other material changes were made to the terms of theCredit Agreement as a result of the Fourth Amendment.OSI entered into the Fifth Amendment (the “Fifth Amendment”) to the Credit Agreement on December 11, 2015. The Fifth Amendmentprovided an incremental Term loan A-1 in an aggregate principal amount of $150.0 million and increased certain leverage ratio tests forpurposes of restricted payments and mandatory prepayment requirements. The Fifth Amendment also permits regular quarterly dividendpayments, subject to certain restrictions and permitted loans or advances to repay debt under our 2012 commercial mortgage-backedsecurities loan (the “2012 CMBS loan”) in an aggregate principal amount of $500.0 million .Bonefish Restructuring - On February 12, 2016 , we decided to close 14 Bonefish restaurants (the “Bonefish Restructuring”). We expect tosubstantially complete these restaurant closings by the first quarter of 2019 . In connection with the Bonefish Restructuring, we reassessed thefuture undiscounted cash flows of the impacted restaurants, and as a result, we recognized pre-tax asset impairments of approximately $24.2million during the fiscal year ended December 27, 2015. See Note 4 - Impairments, Disposals and Exit Costs of our Notes to ConsolidatedFinancial Statements in Part II, Item 8 for additional details regarding the Bonefish Restructuring.Macroeconomic Conditions - The combination of macroeconomic and other factors have put considerable pressure on sales in the casualdining industry both domestically and in our Brazil market.•Domestically, the ongoing impacts of reduced or stagnant disposable consumer income, underemployment, national, regional andlocal regulatory and economic conditions and consumer confidence have had a negative effect on discretionary consumer spending.•We have experienced significant foreign currency impact during 2015 due primarily to fluctuations of the Brazil Real and SouthKorean Won relative to the U.S. dollar. During fiscal year 2015 , restaurant sales and operating income were negatively impacted by$119.3 million and $11.0 million , respectively, from changes in foreign currency rates. When the U.S. dollar strengthens comparedto other currencies, the effect is a reduction in revenues and expenses denominated in currencies other than the U.S. dollar. Weanticipate continued foreign currency volatility in fiscal year 2016, primarily with respect to the Brazil Real.Should the macro-economic and other conditions persist domestically and in our Brazil market, we will continue to face increased pressurewith respect to our pricing, traffic levels and commodity costs. We believe that in this environment, we need to maintain our focus on valueand innovation as well as refreshing our restaurant base to continue to drive sales.34Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - ContinuedGrowth StrategiesIn 2016 , our key growth strategies include:•Grow U.S. Sales and Profitability. We plan to continue to remodel and relocate restaurants, introduce innovative menu items thatmatch evolving consumer preferences and use limited-time offers and multimedia marketing campaigns to drive traffic andincrease awareness of lunch. We will also focus on development opportunities for our concepts in the U.S. by opportunisticallyinvesting in new Outback and Fleming’s locations.•Accelerate International Growth. We continue to focus on existing geographic regions in Latin America and Asia, with strategicexpansion in selected emerging and high growth developed markets. Specifically, we are focusing our existing market growth inBrazil and new market growth in China. We expect to open between 40 and 50 system-wide locations in 2016 , with over halfexpected to be international locations.•Drive Long-Term Shareholder Value. We plan to drive long-term shareholder value by reinvesting operational cash flow in ourbusiness, improving our credit profile and returning excess cash to shareholders through share repurchases and dividends.We intend to fund our growth efforts, in part, by utilizing productivity initiatives across our business. Productivity savings will be reinvestedin the business to drive revenue growth and margin improvement.2016 InitiativesOn February 11, 2016, PRP, as borrower, and Wells Fargo Bank, National Association, as lender (the “Lender”), entered into a loanagreement (the “PRP Mortgage Loan”), pursuant to which PRP borrowed $300.0 million. The PRP Mortgage Loan has an initial maturitydate of February 11, 2018 (the “Initial Maturity”) with an option to extend the Initial Maturity for one twelve-month extension period (the“Extension”) provided that certain conditions are satisfied. The PRP Mortgage Loan is collateralized by 148 properties owned by PRP.The proceeds of the PRP Mortgage Loan were used, together with borrowings under our revolving credit facility, to prepay a portion, andfully defease the remainder, of the 2012 CMBS loan. In connection with the extinguishment, we anticipate recognizing a loss of $26.0 millionto $29.0 million during the first quarter of 2016.The PRP Mortgage Loan bears interest, payable monthly, at a variable rate equal to 250 basis points above the seven-day LIBOR, subject toadjustment in certain circumstances.As a result of these transactions, we anticipate interest savings of approximately $12.0 million in fiscal year 2016.Key Performance IndicatorsKey measures that we use in evaluating our restaurants and assessing our business include the following:•Average restaurant unit volumes —average sales per restaurant to measure changes in consumer traffic, pricing and developmentof the brand;•Comparable restaurant sales —year-over-year comparison of sales volumes for Company-owned restaurants that are open 18months or more in order to remove the impact of new restaurant openings in comparing the operations of existing restaurants;35Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued•System-wide sales —total restaurant sales volume for all Company-owned, franchise and unconsolidated joint venture restaurants,regardless of ownership, to interpret the overall health of our brands;•Adjusted restaurant-level operating margin, Adjusted income from operations, Adjusted net income, Adjusted diluted earnings pershare —non-GAAP financial measures utilized to evaluate our operating performance, which definitions, usefulness andreconciliations are described in more detail in the “Non-GAAP Financial Measures” section below; and•Consumer satisfaction scores —measurement of our consumers’ experiences in a variety of key areas.Change in Fiscal Year EndBeginning in 2014, we changed our fiscal year end from a calendar year ending on December 31 to a 52-53 week year ending on the lastSunday in December, effective with fiscal year 2014. In a 52-week fiscal year, each of our quarterly periods comprise 13 weeks. Theadditional week in a 53-week fiscal year is added to the fourth quarter, making that quarter consist of 14 weeks. We made the fiscal yearchange on a prospective basis and did not adjust operating results for prior periods.Fiscal years 2015 and 2014 consisted of the 52 weeks ended December 27, 2015 and December 28, 2014 , respectively, and fiscal year 2013consisted of the twelve months ended December 31, 2013 . The following table presents the impact of the change in our fiscal year on theConsolidated Statements of Operations and Comprehensive Income for the periods ending as indicated:FISCAL YEAR FISCAL YEAR CHANGE IMPACT (in operating days) INCREASE/(DECREASE) (dollars in millions) RESTAURANT SALES NET INCOME ATTRIBUTABLE TOBLOOMIN’ BRANDS2015 2 $24.3 $4.92014 (3) $(46.0) $(9.2)36Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - ContinuedSelected Operating DataThe table below presents the number of our restaurants in operation as of the end of the periods indicated: DECEMBER 27, 2015 DECEMBER 28, 2014 DECEMBER 31, 2013Number of restaurants (at end of the period): U.S. Outback Steakhouse Company-owned650 648 663Franchised105 105 105Total755 753 768Carrabba’s Italian Grill Company-owned244 242 239Franchised3 1 1Total247 243 240Bonefish Grill Company-owned210 201 187Franchised5 5 7Total215 206 194Fleming’s Prime Steakhouse & Wine Bar Company-owned66 66 65Roy’s (1) Company-owned— 20 21International Company-owned Outback Steakhouse - Brazil (2)75 63 48Outback Steakhouse - South Korea (3)75 91 110Other16 11 11Franchised58 55 51Total224 220 220System-wide total1,507 1,508 1,508____________________(1)On January 26, 2015, we sold our Roy’s concept.(2)The restaurant counts for Brazil are reported as of November 30, 2015, 2014 and 2013, respectively, to correspond with the balance sheet dates of this subsidiary.(3)In the first quarter of 2015, we adopted a policy that relocated international restaurants closed more than 30 days and relocated U.S. restaurants closed more than 60days are considered a closure. Prior periods for South Korea have been revised to conform to the current year presentation.37Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - ContinuedResults of OperationsThe following table sets forth, for the periods indicated, the percentages of certain items in our Consolidated Statements of Operations andComprehensive Income in relation to Total revenues or Restaurant sales, as indicated: FISCAL YEAR 2015 2014 2013Revenues Restaurant sales99.4 % 99.4 % 99.0 %Other revenues0.6 0.6 1.0Total revenues100.0 100.0 100.0Costs and expenses Cost of sales (1)32.6 32.5 32.6Labor and other related (1)27.7 27.6 28.3Other restaurant operating (1)23.1 23.8 23.6Depreciation and amortization4.3 4.3 4.0General and administrative6.6 6.9 6.5Provision for impaired assets and restaurant closings0.8 1.2 0.6Income from operations of unconsolidated affiliates— — (0.2)Total costs and expenses94.7 95.7 94.5Income from operations5.3 4.3 5.5Loss on extinguishment and modification of debt(0.1) (0.3) (0.4)Gain on remeasurement of equity method investment— — 0.9Other expense, net(*) (*) (*)Interest expense, net(1.3) (1.3) (1.8)Income before provision (benefit) for income taxes3.9 2.7 4.2Provision (benefit) for income taxes0.9 0.5 (1.0)Net income3.0 2.2 5.2Less: net income attributable to noncontrolling interests0.1 0.1 0.2Net income attributable to Bloomin’ Brands2.9 % 2.1 % 5.0 %____________________(1)As a percentage of Restaurant sales.*Less than 1/10 th of one percent of Total revenues.38Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - ContinuedRESTAURANT SALESFollowing is a summary of the changes in restaurant sales for fiscal years 2015 and 2014 : FISCAL YEAR(dollars in millions):2015 2014 (1)For fiscal years 2014 and 2013$4,415.8 $4,089.1Change from: Effect of foreign currency translation(119.3) (20.8)Restaurant closings (2)(99.2) (61.7)Divestiture of Roy’s(63.2) —Restaurant openings (3)153.8 144.3Comparable restaurant sales (2)(3)37.7 31.9Change in fiscal year24.3 (46.0)Brazil acquisition— 279.0For fiscal years 2015 and 2014$4,349.9 $4,415.8____________________(1)Activity for fiscal year 2014 has been recast to separately present the effect of foreign currency translation.(2)In the first quarter of 2015, we adopted a policy that relocated international restaurants closed more than 30 days and relocated U.S. restaurants closed more than 60days are considered a closure. Prior period amounts for Restaurant closings and Comparable restaurant sales have been revised to conform to the current yearpresentation.(3)Summation of quarterly changes for restaurant openings and comparable restaurant sales will not total to annual amounts as the restaurants that meet the definition of acomparable restaurant will differ each period based on when the restaurant opened.The decrease in Restaurant sales in 2015 as compared to 2014 was primarily attributable to: (i) the effect of foreign currency translation, dueto the depreciation of the Brazil Real and South Korea Won, (ii) the closing of 84 restaurants since December 31, 2013, (iii) the sale of 20Roy’s restaurants and (iv) lower comparable restaurant sales for Bonefish Grill and Carrabba’s Italian Grill. The decrease in restaurant saleswas partially offset by: (i) the opening of 119 new restaurants not included in our comparable restaurant sales base, (ii) an increase incombined comparable restaurant sales at our existing restaurants, primarily at Outback Steakhouse in the U.S. and Brazil and (iii) twoadditional operating days due to a change in our fiscal year end.The increase in Restaurant sales in 2014 as compared to 2013 was primarily attributable to: (i) the consolidation of restaurant sales generatedby restaurants in Brazil that were acquired November 1, 2013, (ii) the opening of 100 new restaurants not included in our comparablerestaurant sales base and (iii) an increase in U.S. comparable restaurant sales at our existing restaurants. The increase in restaurant sales waspartially offset by: (i) the closing of 59 restaurants since December 31, 2012, (ii) lower comparable restaurant sales in South Korea, (iii) threefewer operating days due to a change in our fiscal year end and (iv) the effect of foreign currency translation.39Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - ContinuedComparable Restaurant Sales and Menu PricesFollowing is a summary of comparable restaurant sales and general menu price increases: FISCAL YEAR 2015 2014 2013Comparable restaurant sales (stores open 18 months or more) (1) (2) (3): U.S. Outback Steakhouse1.8 % 3.1 % 1.6 %Carrabba’s Italian Grill(0.7)% (1.0)% (0.2)%Bonefish Grill(3.3)% 0.5 % — %Fleming’s Prime Steakhouse & Wine Bar1.3 % 3.2 % 4.5 %Combined U.S.0.5 % 2.0 % 1.2 %International Outback Steakhouse - Brazil (4)6.3 % 7.6 % n/aOutback Steakhouse - South Korea(2.0)% (17.7)% (6.4)% Year over year percentage change: Menu price increases (5): U.S. Outback Steakhouse3.3 % 2.9 % 2.5 %Carrabba’s Italian Grill2.1 % 2.7 % 2.2 %Bonefish Grill2.9 % 2.9 % 2.1 %Fleming’s Prime Steakhouse & Wine Bar2.9 % 3.1 % 3.4 %International Outback Steakhouse - Brazil (4)6.4 % 7.1 % n/aOutback Steakhouse - South Korea1.8 % 1.1 % 0.8 %____________________(1)Comparable restaurant sales exclude the effect of fluctuations in foreign currency rates. Relocated international restaurants closed more than 30 days and relocated U.S.restaurants closed more than 60 days are excluded from comparable restaurant sales until at least 18 months after reopening.(2)Fiscal years 2015 and 2014 include $24.3 million higher restaurant sales and $46.0 million lower restaurant sales, respectively, due to a change in our fiscal year end.(3)Traffic for the fourth quarter of 2015 was as follows: Outback Steakhouse (4.9%), Carrabba’s Italian Grill (1.9%), Bonefish Grill (8.4%), Fleming’s Prime Steakhouse& Wine Bar (2.6%), Combined U.S. (4.6%), Outback Steakhouse Brazil (0.6%) and Outback Steakhouse South Korea 4.0%.(4)Effective November 1, 2013, we acquired a controlling interest in the Brazil Joint Venture resulting in the consolidation of 47 restaurants.(5)The stated menu price changes exclude the impact of product mix shifts to new menu offerings and discounts.Our comparable restaurant sales represent the growth from restaurants opened 18 months or more. For fiscal year 2015 , combined U.S.comparable restaurant sales increased due to increases from pricing and product mix, partially offset by decreases in traffic. Customer trafficdecreases were primarily due to Bonefish Grill, where we did not continue higher promotional activities from fiscal year 2014. We haveslowed Bonefish Grill restaurant development until there is improvement in our sales results.For fiscal year 2015 , comparable restaurant sales for Brazil increased primarily due to increases in pricing and traffic, partially offset bydecreases from product mix.Comparable restaurant sales for South Korea decreased for the fiscal year 2015 due to discounts and decreases from product mix, partiallyoffset by increases from menu pricing and traffic. Customer traffic increased in South Korea due to promotional activities. However, webelieve traffic increases were limited by macro-economic conditions and the outbreak of Middle East Respiratory Syndrome (MERS).40Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - ContinuedFor 2014, combined U.S. comparable restaurant sales increased primarily due to increases in general menu prices, partially offset by a shift inthe mix in our product sales.Comparable restaurant sales for Brazil increased for fiscal year 2014 primarily due to increases in general menu prices and traffic, partiallyoffset by a shift in the mix in our product sales.Comparable restaurant sales for South Korea significantly decreased for fiscal year 2014 due to a decrease in traffic and a shift in the mix inour product sales, partially offset by increases from pricing. Customer traffic decreased in South Korea due to macroeconomic conditions thatimpacted discretionary consumer spending, particularly in the casual dining environment.Average Restaurant Unit Volumes and Operating WeeksFollowing is a summary of the average restaurant unit volumes and operating weeks: FISCAL YEAR 2015 2014 2013Average restaurant unit volumes (dollars in thousands): U.S. Outback Steakhouse$3,430 $3,329 $3,230Carrabba’s Italian Grill$2,954 $2,945 $2,998Bonefish Grill$3,019 $3,135 $3,131Fleming’s Prime Steakhouse & Wine Bar$4,247 $4,163 $4,082International Outback Steakhouse - Brazil (1) (2)$4,137 $5,659 n/aOutback Steakhouse - South Korea (3)$2,266 $2,256 $2,677Operating weeks: U.S. Outback Steakhouse33,758 33,687 34,600Carrabba’s Italian Grill12,678 12,467 12,284Bonefish Grill10,731 10,047 9,238Fleming’s Prime Steakhouse & Wine Bar3,432 3,411 3,389International Outback Steakhouse - Brazil (2)3,563 2,859 n/aOutback Steakhouse - South Korea3,939 5,474 5,641____________________(1)Translated at average exchange rates of 3.19 and 2.33 for fiscal years 2015 and 2014, respectively.(2)Effective November 1, 2013, we acquired a controlling interest in the Brazil Joint Venture resulting in the consolidation 47 restaurants.(3)Translated at average exchange rates of 1,130.81 , 1,053.78 and 1,087.95 for fiscal years 2015, 2014 and 2013, respectively. 41Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - ContinuedCOSTS AND EXPENSESCost of sales FISCAL YEAR FISCAL YEAR (dollars in millions):2015 2014 Change 2014 2013 ChangeCost of sales$1,419.7 $1,435.4 $1,435.4 $1,333.8 % of Restaurant sales32.6% 32.5% 0.1% 32.5% 32.6% (0.1)%Cost of sales, consisting of food and beverage costs, increased slightly as a percentage of Restaurant sales in 2015 as compared to 2014 . Theincrease as a percentage of Restaurant sales was primarily due to: (i) 1.2% from higher commodity costs, primarily beef, and (ii) 0.4% fromproduct mix. These increases were largely offset by decreases as a percentage of Restaurant sales due to: (i) 1.0% from the impact of certaincost savings initiatives and (ii) 0.6% from menu price increases.The decrease as a percentage of Restaurant sales in 2014 as compared to 2013 was primarily due to: (i) 0.9% from the impact of certain costsavings initiatives and (ii) 0.7% from menu price increases. The decrease was partially offset by increases as a percentage of Restaurant salesof: (i) 0.7% from higher commodity costs, primarily seafood and beef, and (ii) 0.7% related to lunch expansion, changes in our product mixand promotions.In fiscal year 2016, we expect to incur increased commodity costs of approximately 0.5% . During fiscal 2015, we incurred commodityinflation of 3.7% .Labor and other related expenses FISCAL YEAR FISCAL YEAR (dollars in millions):2015 2014 Change 2014 2013 ChangeLabor and other related$1,205.6 $1,219.0 $1,219.0 $1,157.6 % of Restaurant sales27.7% 27.6% 0.1% 27.6% 28.3% (0.7)%Labor and other related expenses include all direct and indirect labor costs incurred in operations, including distribution expense to RestaurantManaging Partners, costs related to field deferred compensation plans, and other field incentive compensation expenses. Labor and otherrelated expenses increased as a percentage of Restaurant sales for 2015 as compared to 2014 due to: (i) 0.9% from higher kitchen and servicelabor costs due to higher wage rates and lunch expansion across certain concepts and (ii) 0.2% from higher field management compensationbased on individual restaurant performance. These increases were partially offset by decreases as a percentage of Restaurant sales primarilyattributable to: (i) 0.4% from the impact of certain cost savings initiatives, (ii) 0.4% from higher average unit volumes, primarily at OutbackSteakhouse and (iii) 0.1% due to the favorable resolution of a payroll tax audit contingency.Labor and other related expenses decreased as a percentage of Restaurant sales for 2014 as compared to 2013 due to: (i) 0.5% from theacquisition of Brazil, primarily due to higher volumes, (ii) 0.5% from the impact of certain cost savings initiatives; (iii) 0.4% from higheraverage U.S. unit volumes, primarily at Outback Steakhouse and (iv) 0.4% due to expenses from a payroll tax audit contingency recorded in2013. These decreases were partially offset by increases as a percentage of Restaurant sales primarily attributable to: (i) 0.8% of higherkitchen and service labor costs due to lunch expansion across certain concepts and the addition of new restaurant locations and (ii) 0.3% fromlower average unit volumes in South Korea.42Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - ContinuedOther restaurant operating expenses FISCAL YEAR FISCAL YEAR (dollars in millions):2015 2014 Change 2014 2013 ChangeOther restaurant operating$1,006.8 $1,049.1 $1,049.1 $964.3 % of Restaurant sales23.1% 23.8% (0.7)% 23.8% 23.6% 0.2%Other restaurant operating expenses include certain unit-level operating costs such as operating supplies, rent, repairs and maintenance,advertising expenses, utilities, pre-opening costs and other occupancy costs. A substantial portion of these expenses is fixed or indirectlyvariable. The decrease as a percentage of Restaurant sales for 2015 as compared to 2014 was primarily due to the following: (i) 0.6% from adecrease due to marketing efficiencies with a shift to digital advertising from television and lower marketing spend, (ii) 0.3% from higheraverage unit volumes, primarily at Outback Steakhouse and (iii) 0.3% from the impact of certain cost savings initiatives. The decreases werepartially offset by increases as a percentage of Restaurant sales primarily due to: (i) 0.2% from an increase in operating supplies due to lunchexpansion and promotions, (ii) 0.2% from a legal settlement gain in 2014, (iii) 0.1% from higher repairs and maintenance and (iv) 0.1% fromhigher general liability insurance expense.The increase as a percentage of Restaurant sales for 2014 as compared to 2013 was primarily due to the following: (i) 0.4% lower averageunit volumes in South Korea, (ii) 0.2% increase in operating supplies primarily due to lunch expansion and promotions, (iii) 0.1% of higherrestaurant occupancy costs mainly related to rent escalations from existing leases, (iv) 0.1% of higher restaurant utilities associated with newrestaurant locations and lunch expansion across certain concepts, (v) 0.1% higher general liability insurance expense and (vi) 0.1% increase infees due to higher gift card sales. The increases were partially offset by decreases as a percentage of Restaurant sales primarily due to: (i)0.4% from our acquired Brazil restaurants, primarily due to higher volumes, (ii) 0.2% higher U.S. average unit volumes, primarily at OutbackSteakhouse and (iii) 0.2% gain on a legal settlement.Depreciation and amortization FISCAL YEAR FISCAL YEAR (dollars in millions):2015 2014 Change 2014 2013 ChangeDepreciation and amortization$190.4 $190.9 $190.9 $164.1 % of Total revenues4.3% 4.3% —% 4.3% 4.0% 0.3%Depreciation and amortization was flat as a percentage of Total revenues for 2015 as compared to 2014 and was negatively impacted by: (i)the sale of Roy’s in the first quarter of 2015, (ii) lower depreciation for certain information technology assets that fully depreciated in thefourth quarter of 2014 and (iii) lower depreciation for South Korea assets due to impairments related to the International Restaurant ClosureInitiative. These decreases were offset by increases as a percentage of Total revenues primarily due to additional depreciation expense relatedto the opening of new restaurants and the remodeling of existing restaurants.The increase as a percentage of Total revenues for 2014 as compared to 2013 was primarily due to: (i) amortization expense associated withour acquired Brazil operations; (ii) depreciation expense related to new, renovated and relocated restaurants and (iii) the completion ofinternally developed technology projects.43Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - ContinuedGeneral and administrative expensesGeneral and administrative expense includes salaries and benefits, management incentive programs, related payroll tax and benefits, otheremployee-related costs and professional services. Following is a summary of the changes in general and administrative expenses: FISCAL YEAR(dollars in millions):2015 2014For fiscal years 2014 and 2013$304.4 $268.9Change from: Severance(7.7) 9.2Compensation, benefits and payroll tax(7.2) 4.8Foreign currency exchange(6.5) (1.6)Life insurance investments(0.8) 3.2Deferred compensation(0.4) (0.2)Legal & professional fees3.2 1.2Employee stock-based compensation2.9 3.1Termination of split dollar life insurance policies1.9 2.8Incentive compensation0.3 (6.1)Brazil general and administrative— 20.5Other(2.5) (1.4)For fiscal years 2015 and 2014$287.6 $304.4In 2015 , general and administrative expense decreased primarily from the following items:•Severance expense was lower due to expenses associated with an organizational realignment of certain functions during fiscal 2014,partially offset by severance incurred in fiscal 2015 in connection with the International Restaurant Closure Initiative.•Employee compensation, benefits and payroll tax was lower primarily due to lower headcount resulting from our organizationalrealignment in fiscal 2014 and the International Restaurant Closure Initiative, partially offset by higher costs related to additional planbenefits.•The effects of foreign currency exchange, primarily the depreciation of the Brazil Real.•Legal and professional fees were higher due to: (i) certain technology projects supporting the growth of our operations, (ii) legal costsprimarily associated with a litigation settlement and (iii) certain other professional service fees.•Employee stock-based compensation increased due to new grants, partially offset by grants fully vesting and forfeitures.In 2014, general and administrative expense increased primarily from the following items:•Costs associated with our Brazil operations, which we acquired a majority ownership in November 2013.•Severance increased primarily due to an organizational realignment of certain corporate functions.•Employee compensation, benefits and payroll tax were higher primarily due to higher capitalized costs in fiscal year 2013 due to afinancial system project.•Employee stock-based compensation increased due to new grants, partially offset by grants fully vesting and forfeitures.44Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued•In fiscal year 2014, we recognized $1.9 million of net gains related to the termination of split-dollar agreements with certain of ourformer executive officers compared to $4.7 million of net gains in fiscal year 2013.•A net decrease in the cash surrender value of life insurance investments related to our partner deferred compensation programs.•Legal and professional fees increased due to higher legal and tax fees supporting operational activities.•Incentive compensation decreased due to performance against current year objectives.Provision for impaired assets and restaurant closings FISCAL YEAR FISCAL YEAR (dollars in millions):2015 2014 Change 2014 2013 ChangeProvision for impaired assets andrestaurant closings$36.7 $52.1 $(15.4) $52.1 $22.8 $29.3Bonefish Restructuring - On February 12, 2016, we decided to close 14 Bonefish restaurants. In connection with the Bonefish Restructuring,we reassessed the future undiscounted cash flows of the impacted restaurants, and as a result, we recognized pre-tax asset impairments ofapproximately $24.2 million during the fiscal year ended December 27, 2015 . We expect to incur additional charges of approximately $4.5million to $7.5 million over the next five years , including costs associated with lease obligations, employee terminations and other closurerelated obligations.Restaurant Closure Initiatives - In fiscal 2014, we decided to close 36 underperforming international locations, primarily in South Korea (the“International Restaurant Closure Initiative”). In connection with the International Restaurant Closure Initiative, we incurred pre-taxrestaurant closing costs of $6.0 million and $19.7 million during fiscal 2015 and 2014 , respectively. We expect to incur additional charges ofapproximately $1.0 million , including costs associated with lease obligations, employee terminations and other closure related obligations,through the first half of 2016.In the fourth quarter of 2013, we completed an assessment of our domestic restaurant base and decided to close 22 underperforming domesticlocations (the “Domestic Restaurant Closure Initiative”). Approximately $1.6 million , $6.0 million and $18.7 million of pre-tax restaurantclosing costs were incurred during fiscal 2015 , 2014 and 2013 , respectively, in connection with the Domestic Restaurant Closure Initiative.Roy’s - In connection with the decision to sell Roy’s, we recorded pre-tax impairment charges of $13.4 million for Assets held for sale duringfiscal year 2014 .Other Disposals - During the third quarter of 2014, we decided to sell both of our corporate airplanes. In connection with the decision, werecognized pre-tax asset impairment charges of $10.6 million during fiscal year 2014 . During fiscal 2015 , we recognized additional pre-taxasset impairment charges of $0.7 million for corporate aircraft.The remaining restaurant impairment and closing charges resulted from the carrying value of a restaurant’s assets exceeding its estimated fairmarket value, primarily due to locations identified for relocation or closure.See Note 4 - Impairments, Disposals and Exit Costs of the Notes to Consolidated Financial Statements for further information.45Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - ContinuedIncome from operations FISCAL YEAR FISCAL YEAR (dollars in millions):2015 2014 Change 2014 2013 ChangeIncome from operations$230.9 $192.0 $192.0 $225.4 % of Total revenues5.3% 4.3% 1.0% 4.3% 5.5% (1.2)%The increase in income from operations during fiscal year 2015 as compared to fiscal year 2014 was primarily due to lower general andadministrative expense, lower impairments and restaurant closing costs and an increase in operating margin at the restaurant-level.Income from operations decreased in 2014 as compared to 2013 primarily due to: (i) impairments, restaurant and other closing costs related toour International and Domestic Restaurant Closure Initiatives, (ii) asset impairments related to Roy’s and the corporate aircraft, (iii) loweraverage unit volumes at our South Korea restaurants, (iv) higher General and administrative expenses and (v) higher Depreciation andamortization as a percentage of revenue. These decreases were partially offset by an increase in operating margins at the restaurant level.Loss on extinguishment and modification of debt FISCAL YEAR FISCAL YEAR (dollars in millions)2015 2014 Change 2014 2013 ChangeLoss on extinguishment andmodification of debt3.0 11.1 (8.1) 11.1 14.6 (3.5)In connection with the refinancing of our senior secured credit facility, we recognized a loss on extinguishment and modification of debt forfiscal years 2015 and 2014. During fiscal year 2013, we recorded a loss on extinguishment and modification of debt in connection with therepricing of our Term loan B.See Note 12 - Long-term Debt, Net of the Notes to Consolidated Financial Statements for further information.Gain on remeasurement of equity method investmentIn connection with the Brazil acquisition in fiscal year 2013, we recognized a $36.6 million gain on remeasurement to fair value of thepreviously held equity investment in the Brazil Joint Venture. See Note 3 - Acquisitions of the Notes to Consolidated Financial Statements fora further description of this transaction.Other expense, netOther expense, net , includes items deemed to be non-operating based on management’s assessment of the nature of the item in relation to ourcore operations: FISCAL YEAR FISCAL YEAR (dollars in millions):2015 2014 Change 2014 2013 ChangeOther expense, net$(0.9) $(1.2) $0.3 $(1.2) $(0.2) $(1.0)During fiscal year 2015 , we recorded other expense of $0.9 million , primarily in connection with the loss on sale of our Roy’s business.During fiscal year 2014 , other expense was primarily due to the loss on sale of an Outback Steakhouse restaurant in Mexico.46Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - ContinuedInterest expense, net FISCAL YEAR FISCAL YEAR (dollars in millions):2015 2014 Change 2014 2013 ChangeInterest expense, net$56.2 $59.7 $(3.5) $59.7 $74.8 $(15.1)The decrease in net interest expense in fiscal year 2015 as compared to fiscal year 2014 was primarily due to the refinancing of the SeniorSecured Credit Facilities in March 2015 and May 2014 and the repayment of long-term debt during fiscal year 2014. These decreases werepartially offset by additional expense related to the interest rate swaps.The decrease in net interest expense in fiscal year 2014 as compared to fiscal year 2013 was primarily due to the repricing and refinancingof the Senior Secured Credit Facilities in April 2013 and May 2014, respectively.Provision (benefit) for income taxes FISCAL YEAR FISCAL YEAR 2015 2014 Change 2014 2013 ChangeEffective income tax rate23.0% 20.0% 3.0% 20.0% (24.5)% 44.5%The net increase in the effective income tax rate in fiscal year 2015 as compared to fiscal year 2014 was primarily due to a change in theamount and mix of income and losses across our domestic and international subsidiaries and the payroll tax audit settlements.The net increase in the effective income tax rate in fiscal year 2014 as compared to fiscal year 2013 was primarily due to the release of theU.S. valuation allowance in 2013, the exclusion of the gain on remeasurement of our equity method investment in 2013 and a change in theblend of income across our U.S. and international subsidiaries.The effective income tax rate for fiscal year 2015 and fiscal year 2014 was lower than the blended federal and state statutory rate of 38.9%and 38.8%, respectively, primarily due to the benefit of tax credits for FICA taxes on certain employees’ tips.SegmentsDuring the first quarter of 2015, we recast our segment reporting to include two reportable segments, U.S. and International, which reflectschanges made in how we manage our business, review operating performance and allocate resources. The U.S. segment includes all brandsoperating in the U.S. while brands operating outside the U.S. are included in the International segment. All prior period information wasrecast to reflect this change.Our reporting segments are organized based on restaurant concept and geographic location. Resources are allocated and performance isassessed by our Chief Executive Officer (“CEO”), whom we have determined to be our Chief Operating Decision Maker.47Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - ContinuedRevenues for both segments include only transactions with customers and include no intersegment revenues. Excluded from net income fromoperations for U.S. and International are legal and certain corporate costs not directly related to the performance of the segments, interest andother expenses related to our credit agreements and derivative instruments, certain stock-based compensation expenses, certain bonus expenseand certain insurance expenses managed centrally. Following is a reconciliation of segment income from operations to the consolidatedoperating results: FISCAL YEAR(dollars in thousands)2015 2014 2013Segment income from operations U.S.$342,224 $320,561 $314,525International34,597 25,020 57,409Total segment income from operations376,821 345,581 371,934Unallocated corporate operating expense - Cost of sales, Labor and other related and Otherrestaurant operating13,067 14,452 (5,701)Unallocated corporate operating expense - Depreciation and amortization and General andadministrative(158,963) (168,069) (140,876)Unallocated corporate operating expense(145,896) (153,617) (146,577)Total income from operations230,925 191,964 225,357Loss on extinguishment and modification of debt(2,956) (11,092) (14,586)Gain on remeasurement of equity method investment— — 36,608Other expense, net(939) (1,244) (246)Interest expense, net(56,176) (59,658) (74,773)Income before provision (benefit) for income taxes$170,854 $119,970 $172,360U.S. Segment FISCAL YEAR(dollars in thousands)2015 2014 2013Revenues Restaurant sales$3,857,162 $3,832,373 $3,745,071Other revenues22,581 21,906 24,282Total revenues$3,879,743 $3,854,279 $3,769,353Restaurant-level operating margin15.8% 15.4% 15.5%Income from operations342,224 320,561 314,525Operating income margin8.8% 8.3% 8.3%48Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - ContinuedRestaurant salesFollowing is a summary of the change in U.S. segment restaurant sales for fiscal years 2015 and 2014 : FISCAL YEAR(dollars in millions)2015 2014For fiscal years 2014 and 2013$3,832.4 $3,745.1Change from: Restaurant openings (1)66.1 96.1Change in fiscal year22.8 (43.8)Comparable restaurant sales (1)20.1 75.1Divestiture of Roy’s(63.2) —Restaurant closings(21.1) (40.1)For fiscal years 2015 and 2014$3,857.1 $3,832.4____________________(1)Summation of quarterly changes for restaurant openings and comparable restaurant sales will not total to annual amounts as the restaurants that meet the definition of acomparable restaurant will differ each period based on when the restaurant opened.The increase in U.S. Restaurant sales in fiscal year 2015 was primarily attributable to: (i) the opening of 63 new restaurants not included inour comparable restaurant sales base, (ii) two additional operating days during fiscal year 2015 due to a change in our fiscal year end in 2014and (iii) an increase in comparable restaurant sales at our existing restaurants, primarily Outback Steakhouse. The increase in U.S. Restaurantsales was partially offset by: (i) the sale of 20 Roy’s restaurants in January 2015, (ii) the closing of 31 restaurants since December 31, 2013and (iii) lower comparable restaurant sales at Bonefish Grill and Carrabba’s Italian Grill.The increase in U.S. Restaurant sales in fiscal year 2014 was primarily attributable to: (i) the opening of 68 new restaurants not included inour comparable restaurant sales base and (ii) an increase in comparable restaurant sales at our existing restaurants, primarily OutbackSteakhouse. The increase in U.S. Restaurant sales was partially offset by: (i) three fewer operating days during fiscal year 2014 due to achange in our fiscal year end and (ii) the closing of 31 restaurants since December 31, 2013 .Restaurant-level operating marginThe increase in U.S. restaurant-level operating margin in fiscal year 2015 as compared to fiscal year 2014 was primarily due to: (i) the impactof certain cost savings initiatives, (ii) lower marketing expense and (iii) higher average unit volumes. This increase was partially offset by: (i)commodity inflation, (ii) higher kitchen and labor costs due to higher wage rates and lunch expansion across certain concepts and (iii) productmix.The decrease in U.S. restaurant-level operating margin in fiscal year 2014 as compared to fiscal year 2013 , was primarily due to: (i) higherkitchen and labor costs due to higher wage rates and lunch expansion across certain concepts, (ii) commodity inflation, (iii) product mix, (iv)an increase in operating supplies primarily due to lunch expansion and promotions, (v) higher restaurant occupancy costs mainly related torent escalations from existing leases and (vi) higher restaurant utilities associated with new restaurant locations and lunch expansion acrosscertain concepts. This decrease was partially offset by: (i) the impact of certain cost savings initiatives, (ii) menu price increases and (iii)higher average unit volumes.Income from operationsThe increase in U.S. income from operations generated in fiscal year 2015 as compared to fiscal year 2014 was primarily due to: (i) higherrestaurant-level operating income and (ii) lower General and administrative expense. General and administrative expense for the U.S.segment decreased primarily due to lower compensation and benefits driven by49Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continuedour organizational realignment in fiscal 2014 and lower incentive compensation due to performance against current year objectives comparedto prior year. These increases in U.S. income from operations were partially offset by higher impairment and restaurant closing costs,primarily related to the Bonefish Restructuring.The increase in U.S. income from operations generated in fiscal year 2014 as compared to fiscal year 2013 was primarily due to: (i) higherrestaurant-level operating income and (ii) lower General and administrative expense. General and administrative expense for the U.S.segment decreased primarily due to lower deferred and incentive compensation expense due to performance against objectives. Theseincreases to U.S. income from operations were offset by higher depreciation expense related to new, renovated and relocated restaurants.International Segment FISCAL YEAR(dollars in thousands)2015 2014 2013Revenues Restaurant sales$492,759 $583,410 $344,058Other revenues5,174 5,022 15,819Total revenues$497,933 $588,432 $359,877Restaurant-level operating margin19.3% 18.4% 17.4%Income from operations34,597 25,020 57,409Operating income margin6.9% 4.3% 16.0%Restaurant salesFollowing is a summary of the change in International segment restaurant sales for fiscal years 2015 and 2014 : FISCAL YEAR(dollars in millions)2015 2014 (1)For fiscal years 2014 and 2013$583.4 $344.1Change from: Effect of foreign currency translation(119.3) (20.8)Restaurant closings (2)(78.1) (21.6)Brazil acquisition (3)— 279.0Restaurant openings (4)87.7 48.2Comparable restaurant sales (2)(4)17.6 (43.2)Change in fiscal year1.5 (2.2)For fiscal years 2015 and 2014$492.8 $583.5____________________(1)Activity for fiscal year 2014 has been recast to separately present the effect of foreign currency translation.(2)In the first quarter of 2015, we adopted a policy that relocated international restaurants closed more than 30 days and relocated U.S. restaurants closed more than 60days are considered a closure. Prior period amounts for Restaurant closings and Comparable restaurant sales have been revised to conform to the current yearpresentation.(3)Includes restaurant sales for the 47 formerly unconsolidated joint venture restaurants in Brazil that were acquired November 1, 2013. Sales for restaurants opened inBrazil after November 1, 2013 are included in restaurant openings.(4)Summation of quarterly changes for restaurant openings and comparable restaurant sales will not total to annual amounts as the restaurants that meet the definition of acomparable restaurant will differ each period based on when the restaurant opened.The decrease in Restaurant sales in fiscal year 2015 was primarily attributable to: (i) the effect of foreign currency translation of the BrazilReal and South Korean Won relative to the U.S. dollar, (ii) the closing of 53 restaurants since December 31, 2013 and (iii) lower comparablerestaurant sales in South Korea. The decrease in restaurant sales was partially offset by: (i) the opening of 56 new restaurants not included inour comparable restaurant sales base, (ii) an50Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continuedincrease in comparable restaurant sales in Brazil and (iii) two additional operating days during fiscal year 2015 due to a change in our fiscalyear.The increase in Restaurant sales in fiscal year 2014 was primarily attributable to: (i) the acquisition of a controlling interest in our Braziloperations and (ii) the opening of 32 new restaurants not included in our comparable restaurant sales base. The increase in restaurant saleswas partially offset by: (i) lower comparable restaurant sales primarily in South Korea, (ii) the closing of restaurants in South Korea as part ofthe International Restaurant Closure Initiative, (iii) the effect of foreign currency translation of the Brazil Real and South Korean Wonrelative to the U.S. dollar and (iv) three fewer operating days during fiscal year 2014 due to a change in our fiscal year end.Restaurant-level operating marginThe increase in International restaurant-level operating margin in fiscal year 2015 as compared to fiscal year 2014 was primarily due to: (i)higher average unit volumes, (ii) the impact of certain cost saving initiatives and (iii) menu price increases. The increase was partially offsetby: (i) commodity inflation, (ii) higher kitchen and labor costs due to higher wage rates and higher average unit volumes and (iii) additionalcosts associated with the opening of our Abbraccio concept in Brazil.The increase in International restaurant-level operating margin in fiscal year 2014 as compared to fiscal year 2013 was primarily due to (i)increased sales volumes from the consolidation of our Brazil operations, (ii) the impact of certain cost saving initiatives, (iii) lower marketingspend, (iv) lower restaurant occupancy costs, (v) menu price increases and (v) lower commodity costs. The increase was partially offset bydecreases, primarily in South Korea, from: (i) lower average unit volumes, (ii) higher kitchen and labor costs and (iii) product mix.Income from operationsThe increase in International income from operations in fiscal year 2015 as compared to fiscal year 2014 was primarily due to: (i) a decreasein impairment and restaurant closing costs related to the International Restaurant Closure Initiative, (ii) lower General and administrativeexpense and (iii) lower Depreciation and amortization expense. General and administrative expense for the International segment decreasedprimarily due to the impact of foreign currency translation, partially offset by increased compensation and benefits. These increases werepartially offset by the impact of foreign currency translation.The decrease in International income from operations in fiscal year 2014 as compared to fiscal year 2013 was primarily due to: (i) higherGeneral and administrative expense for costs associated with our Brazil operations, which we acquired a majority ownership in November2013, (ii) higher impairments, restaurant and other closing costs related to our International Restaurant Closure Initiative and (iii) higherDepreciation and amortization from the consolidation of our Brazil operations. These decreases were partially offset by an increase inoperating margins at the restaurant level.Non-GAAP Financial MeasuresIn addition to the results provided in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), weprovide non-GAAP measures which present operating results on an adjusted basis. These are supplemental measures of performance that arenot required by or presented in accordance with U.S. GAAP and include the following: (i) system-wide sales, (ii) Adjusted restaurant-leveloperating margins, (iii) Adjusted income from operations and the corresponding margins, (iv) Adjusted net income and (v) Adjusted dilutedearnings per share.Although we believe these non-GAAP measures enhance investors’ understanding of our business and performance, these non-GAAPfinancial measures are not intended to replace accompanying U.S. GAAP financial measures. These metrics are not necessarily comparable tosimilarly titled measures used by other companies.51Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - ContinuedSystem-Wide SalesSystem-wide sales is a non-GAAP financial measure that includes sales of all restaurants operating under our brand names, whether we ownthem or not. Management uses this information to make decisions about future plans for the development of additional restaurants and newconcepts, as well as evaluation of current operations.System-wide sales comprise sales of Company-owned and franchised restaurants and, in historical periods, sales of unconsolidated jointventure restaurants. Prior to November 1, 2013, sales from the acquired 47 restaurants in Brazil were reported as income from unconsolidatedjoint ventures. Subsequent to November 1, 2013, the sales of these restaurants are reported as Company-owned.Following is a summary of sales of Company-owned restaurants: FISCAL YEARCOMPANY-OWNED RESTAURANT SALES (dollars in millions):2015 2014 2013U.S. Outback Steakhouse $2,226 $2,168 $2,142Carrabba’s Italian Grill720 710 706Bonefish Grill623 609 555Fleming’s Prime Steakhouse & Wine Bar280 275 265Other8 71 77Total3,857 3,833 3,745International Outback Steakhouse-Brazil283 310 24Outback Steakhouse-South Korea172 239 289Other38 34 31Total493 583 344Total Company-owned restaurant sales$4,350 $4,416 $4,08952Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - ContinuedThe following table provides a summary of sales of franchised and unconsolidated joint venture restaurants, which are not included in ourconsolidated financial results, and our income from the royalties and/or service fees that franchisees and affiliates pay us based generally on apercentage of sales. The following table does not represent our sales and is 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/orservice fees. FISCAL YEARFRANCHISE SALES (dollars in millions): (1)2015 2014 2013Outback Steakhouse U.S.$340 $323 $317International115 122 335Total455 445 652Carrabba’s Italian Grill9 4 4Bonefish Grill12 13 18Total franchise sales (1)$476 $462 $674Income from franchise and unconsolidated joint ventures (2)$17 $19 $41____________________(1)Franchise sales are not included in Total revenues in the Consolidated Statements of Operations and Comprehensive Income .(2)Represents franchise royalty and the portion of total income related to restaurant operations included in the Consolidated Statements of Operations and ComprehensiveIncome in Other revenues and Income from operations of unconsolidated affiliates, respectively. Income from operations of unconsolidated affiliates for fiscal year2013 includes the results for our Brazil operations for the period from January 1, 2013 to October 31, 2013, which represents the period that such operations wereaccounted for as an equity method investment.Other Non-GAAP Financial MeasuresThe use of other non-GAAP financial measures permits investors to assess the operating performance of our business relative to ourperformance based on U.S. GAAP results and relative to other companies within the restaurant industry by isolating the effects of certainitems that vary from period to period without correlation to core operating performance or that vary widely among similar companies.However, our inclusion of these adjusted measures should not be construed as an indication that our future results will be unaffected byunusual or infrequent items or that the items for which we have made adjustments are unusual or infrequent. We believe that the disclosure ofthese non-GAAP measures is useful to investors as they form the basis for how our management team and Board of Directors evaluate ouroperating performance, allocate resources and establish employee incentive plans.Adjusted restaurant-level operating marginRestaurant-level operating margin is calculated as Restaurant sales after deduction of the main restaurant-level operating costs, whichincludes Cost of sales, Labor and other related and Other restaurant operating expenses. Adjusted restaurant-level operating margin isRestaurant-level operating margin adjusted for certain items, as noted below.53Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - ContinuedThe following tables show the percentages of certain operating cost financial statement line items in relation to Restaurant sales on both aU.S. GAAP basis and an adjusted basis, as indicated: FISCAL YEAR 2015 2014 2013 U.S. GAAP ADJUSTED (1) U.S. GAAP ADJUSTED (2) U.S. GAAP ADJUSTED (3)Restaurant sales100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Cost of sales32.6% 32.6% 32.5% 32.5% 32.6% 32.6%Labor and other related27.7% 27.8% 27.6% 27.6% 28.3% 27.9%Other restaurant operating23.1% 23.1% 23.8% 24.0% 23.6% 23.6% Restaurant-level operating margin16.5% 16.5% 16.1% 15.9% 15.5% 15.9%_________________(1)Includes adjustments for the favorable resolution of payroll tax audit contingencies of $5.6 million, offset by legal settlement costs of $4.0 million, primarily related tothe Cardoza litigation. The payroll audit adjustment was recorded in Labor and other related and the legal settlement was recorded in Other restaurant operating.(2)Includes adjustments primarily related to a $6.1 million legal settlement gain and the reversal of $2.9 million of deferred rent liabilities associated with theInternational and Domestic Restaurant Closure Initiatives, which were recorded in Other restaurant operating.(3)Includes an adjustment of $17.0 million for payroll tax audit contingencies, which were recorded in Labor and other related.54Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - ContinuedAdjusted income from operations, Adjusted net income and Adjusted diluted earnings per shareThe following table reconciles Adjusted income from operations and the corresponding margins, Adjusted net income and Adjusted dilutedearnings per share to their respective most comparable U.S. GAAP measures for fiscal years 2015 , 2014 and 2013 : FISCAL YEAR(dollars in thousands, except per share amounts)2015 2014 2013Income from operations$230,925 $191,964 $225,357Operating income margin5.3% 4.3% 5.5%Adjustments: Restaurant impairments and closing costs (1)33,507 26,841 18,695Payroll tax audit contingency (2)(5,587) — 17,000Purchased intangibles amortization (3)4,334 5,952 560Restaurant relocations, remodels and related costs (4)3,625 249 —Asset impairments and related costs (5)746 24,490 —Transaction-related expenses (6)1,294 1,347 3,888Legal and contingent matters (7)5,843 (6,070) —Severance (8)— 9,045 —Total income from operations adjustments$43,762 $61,854 $40,143Adjusted income from operations$274,687 $253,818 $265,500Adjusted operating income margin6.3% 5.7% 6.4% Net income attributable to Bloomin’ Brands$127,327 $91,090 $208,367Adjustments: Income from operations adjustments43,762 61,854 40,143Loss on disposal of business and disposal of assets (9)1,328 770 —Loss on extinguishment and modification of debt (10)2,956 11,092 14,586Gain on remeasurement of equity method investment (11)— — (36,608)Total adjustments, before income taxes48,046 73,716 18,121Adjustment to provision for income taxes (12)(15,314) (23,996) (84,114)Net adjustments32,732 49,720 (65,993)Adjusted net income$160,059 $140,810 $142,374 Diluted earnings per share$1.01 $0.71 $1.63Adjusted diluted earnings per share$1.27 $1.10 $1.11 Diluted weighted average common shares outstanding125,585 128,317 128,074_________________(1)Represents expenses incurred for the Bonefish Restructuring and the International and Domestic Restaurant Closure Initiatives.(2)Relates to a payroll tax audit contingency adjustment, for the employer’s share of FICA taxes related to cash tips allegedly received and unreported by our employeesduring calendar years 2011 and 2012, which is recorded in Labor and other related expenses. In addition, a deferred income tax adjustment has been recorded for theallowable income tax credits for the employer’s share of FICA taxes expected to be paid, which is included in Provision (benefit) for income taxes and offsets theadjustment to Labor and other related expenses. As a result, there is no impact to Net income from this adjustment. See footnote 12 to this table.(3)Represents non-cash intangible amortization recorded as a result of the acquisition of our Brazil operations.(4)Represents asset impairment charges and accelerated depreciation incurred in connection with our relocation and remodel programs.(5)Represents asset impairment charges and related costs associated with our decision to sell the Roy’s concept and corporate aircraft.(6)Relates primarily to the following: (i) costs incurred with the secondary offerings of our common stock in March 2015, November 2014, March 2014 and May 2013;(ii) costs incurred in 2015 with our sale-leaseback initiative and (iii) costs incurred in 2013 to acquire a controlling ownership interest in our Brazil operations.55Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued(7)Fees and expenses related to certain legal and contingent matters, including the Cardoza litigation, in fiscal year 2015. During fiscal year 2014, we recognized a gainon a legal settlement.(8)Relates to severance expense incurred as a result of our organizational realignment.(9)Primarily represents loss on the sale of: (i) our Roy ’ s business in fiscal 2015 and (ii) one Company-owned Outback Steakhouse location in Mexico in fiscal 2014.(10)Relates to the refinancing of our Senior Secured Credit Facility in December 2015, March 2015 and May 2014 and the repricing in 2013.(11)Represents recognition of a gain on remeasurement of the previously held equity investment in connection with the Brazil acquisition.(12)Income tax effect of adjustments for fiscal year 2015 and 2014, respectively, are calculated based on the statutory rate applicable to jurisdictions in which the abovenon-GAAP adjustments relate. Additionally, for fiscal year 2015, a deferred income tax adjustment has been recorded for the allowable income tax credits for theemployer’s share of FICA taxes expected to be paid. See footnote 2 to this table. For fiscal year 2013, we utilized a normalized annual effective tax rate of 22.0%,which excludes the income tax benefit of the valuation allowance release.Liquidity and Capital ResourcesLIQUIDITYOur liquidity sources consist of cash flow from our operations, cash and cash equivalents and credit capacity under our credit facilities. Weexpect to use cash primarily for general operating expenses, remodeling or relocating older restaurants, the development of new restaurantsand new markets, principal and interest payments on our debt, share repurchases and dividend payments, obligations related to our deferredcompensation plans and investments in technology.We believe that our expected liquidity sources are adequate to fund debt service requirements, operating lease obligations, capitalexpenditures and working capital obligations for the next 12 months. However, our ability to continue to meet these requirements andobligations will depend on, among other things, our ability to achieve anticipated levels of revenue and cash flow and our ability to managecosts and working capital successfully.Cash and Cash Equivalents - As of December 27, 2015 , we had $132.3 million in cash and cash equivalents, of which $51.4 million washeld by foreign affiliates, primarily in South Korea, a portion of which would be subject to additional taxes if repatriated to the United States.The international jurisdictions in which we have significant cash do not have any known restrictions that would prohibit the repatriation ofcash and cash equivalents.Capital Expenditures - We estimate that our capital expenditures will total between $235.0 million and $255.0 million in 2016 . The amountof actual capital expenditures may be affected by general economic, financial, competitive, legislative and regulatory factors, among otherthings, including restrictions imposed by our credit facilities.Bonefish Restructuring - On February 12, 2016, we decided to close 14 Bonefish restaurants. We expect to substantially complete theserestaurant closings through the first quarter of 2019. Total future cash expenditures of $11.0 million to $13.5 million , primarily related tolease liabilities, are expected to occur through October 2024 .56Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - ContinuedCredit Facilities - As of December 27, 2015 , our credit facilities consist of the Senior Secured Credit Facility and the 2012 CMBS loan. SeeNote 12 - Long-term Debt, Net of the Notes to Consolidated Financial Statements for further information. Following is a summary ofprincipal payments and debt issuance from December 31, 2013 to December 27, 2015 : SENIOR SECURED CREDIT FACILITY 2012 CMBS LOAN (1) (dollars in thousands)TERMLOAN A TERM LOANA-1 TERMLOAN B REVOLVINGFACILITY FIRSTMORTGAGELOAN FIRSTMEZZANINELOAN SECONDMEZZANINELOAN TOTALCREDITFACILITIESBalance as of December 31, 2013$— — $935,000 $— $311,644 $86,131 $86,704 $1,419,4792014 new debt (2)300,000 — — 400,000 — — — 700,0002014 payments (2)(3,750) — (710,000) (75,000) (11,879) (1,004) (637) (802,270)Balance as of December 28, 2014296,250 — 225,000 325,000 299,765 85,127 86,067 1,317,2092015 new debt (3)— 150,000 — 565,300 — — — 715,3002015 payments (3)(4)(18,750) — (225,000) (458,300) (10,177) (1,099) (714) (714,040)Balance as of December 27, 2015$277,500 $150,000 $— $432,000 $289,588 $84,028 $85,353 $1,318,469________________(1)See Note 22 - Subsequent Events for additional details regarding the extinguishment of the 2012 CMBS loan.(2)Includes $700.0 million related to a refinancing of our Senior Secured Credit Facility, which did not increase total indebtedness.(3)Includes $215.0 million related to a refinancing of our Senior Secured Credit Facility to repay the remaining Term loan B balance and $150.0 million for anincremental Term loan A-1, which was used to repay a portion of the outstanding revolving credit facility.(4)Subsequent to December 27, 2015 , we made payments of $70.0 million on our revolving credit facility. On February 11, 2016, we drew $185.0 million on ourrevolving credit facility. The drawdowns, together with the proceeds from the PRP Mortgage Loan, were used to prepay a portion, and fully defease the remainder, ofthe 2012 CMBS loan.Following is a summary of our outstanding credit facilities as of December 27, 2015 : OUTSTANDING(dollars in thousands)INTEREST RATE DECEMBER 27, 2015 ORIGINALFACILITY PRINCIPALMATURITY DATE DECEMBER 27, 2015 DECEMBER 28, 2014Term loan A, net of discount of $2.9 million(1)2.26% $300,000 May 2019 $277,500 $296,250Term loan A-1 (2)2.34% 150,000 May 2019 150,000 —Term loan B, net of discount of $10.0 million—% 225,000 — — 225,000Revolving credit facility (1) (3)2.29% 825,000 May 2019 432,000 325,000Total Senior Secured Credit Facility 1,500,000 859,500 846,250First mortgage loan (1)4.13% 324,800 April 2017 289,588 299,765First mezzanine loan9.00% 87,600 April 2017 84,028 85,127Second mezzanine loan11.25% 87,600 April 2017 85,353 86,067Total 2012 CMBS loan 500,000 458,969 470,959Total credit facilities $2,000,000 $1,318,469 $1,317,209________________(1)Represents the weighted-average interest rate for the respective period.(2)On December 11, 2015, OSI entered into the Fifth Amendment to its Credit Agreement which provided an incremental Term loan A-1 in an aggregate principalamount of $150.0 million .(3)On March 31, 2015, OSI entered into the Fourth Amendment to its Credit Agreement, to effect an increase of OSI’s existing revolving credit facility from $600.0million to $825.0 million in order to fully pay down its existing Term loan B on April 2, 2015.As of December 27, 2015 , we had $363.7 million in available unused borrowing capacity under our revolving credit facility, net of letters ofcredit of $29.3 million .57Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - ContinuedThe Credit Agreement contains mandatory prepayment requirements for Term loan A and Term loan A-1. We are required to prepayoutstanding amounts under Term loan A and Term loan A-1 with 50% of our annual excess cash flow, as defined in the Credit Agreement.The amount of outstanding Term loan A and Term loan A-1 required to be prepaid may vary based on our leverage ratio and year end results.Other than the required minimum amortization premiums of $19.7 million , we do not anticipate any other payments will be required throughDecember 25, 2016.On February 11, 2016 , PRP, as borrower, and Wells Fargo Bank, National Association, as lender (the “Lender”), entered into a loanagreement (the “PRP Mortgage Loan”), pursuant to which PRP borrowed $300.0 million . The PRP Mortgage Loan has an initial maturitydate of February 11, 2018 (the “Initial Maturity”) with an option to extend the maturity date for one twelve-month extension period (the“Extension”) provided that certain conditions are satisfied. The PRP Mortgage Loan is collateralized by 148 properties owned by PRP. Theproceeds of the PRP Mortgage Loan were used, together with borrowings under our revolving credit facility, to prepay a portion, and fullydefease the remainder, of the 2012 CMBS loan.The PRP Mortgage Loan permits us to refinance or sell the Collateral Properties and the Unencumbered Properties, subject to certain termsand conditions, including that specified release proceeds are applied against the outstanding loan balance. If the PRP Mortgage Loan balanceexceeds $210.0 million on March 1, 2017 or $160.0 million on September 1, 2017 , PRP’s rental income will be applied against theoutstanding loan balance.The PRP Mortgage Loan repayment schedule is as follows (dollars in thousands):PAYMENT DATE INITIAL MATURITY EXTENSIONFebruary 28, 2017 $90,000 $90,000August 31, 2017 50,000 50,000February 11, 2018 (1) 160,000 50,000August 31, 2018 — 50,000February 11, 2019 — 60,000 $300,000 $300,000____________________(1)If the Extension is exercised, the payment date is February 28, 2018.We intend to fund payment of the PRP Mortgage Loan with proceeds from sale-leaseback transactions of our real estate portfolio.Our Credit Agreement and PRP Mortgage Loan contain various financial and non-financial covenants. A violation of these covenants couldnegatively impact our liquidity by restricting our ability to borrow under the revolving credit facility and cause an acceleration of the amountsdue under the credit facilities. See Note 12 - Long-term Debt, Net of the Notes to Consolidated Financial Statements for further information.As of December 27, 2015 and December 28, 2014 , we were in compliance with our debt covenants.Cash Flow Hedges of Interest Rate Risk - In September 2014, we entered into variable-to-fixed interest rate swap agreements with eightcounterparties to hedge a portion of the cash flows of our variable rate debt. The swap agreements have an aggregate notional amount of$400.0 million , a start date of June 30, 2015 , and mature on May 16, 2019 . Under the terms of the swap agreements, we will pay aweighted-average fixed rate of 2.02% on the $400.0 million notional amount and receive payments from the counterparty based on the 30-dayLIBOR rate. W e estimate $5.5 million will be reclassified to interest expense over the next twelve months. See Note 16 - DerivativeInstruments and Hedging Activities of the Notes to Consolidated Financial Statements for further information.58Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - ContinuedSUMMARY OF CASH FLOWSThe following table presents a summary of our cash flows provided by (used in) operating, investing and financing activities for the periodsindicated: FISCAL YEAR(dollars in thousands)2015 2014 2013Net cash provided by operating activities$397,430 $352,006 $377,264Net cash used in investing activities(180,643) (240,342) (346,137)Net cash used in financing activities(241,001) (148,731) (87,127)Effect of exchange rate changes on cash and cash equivalents(9,193) (7,060) 4,181Net decrease in cash and cash equivalents$(33,407) $(44,127) $(51,819)Operating activities - Net cash provided by operating activities increased in 2015 as compared to 2014 primarily as a result of the following:(i) timing of collections of holiday gift card sales from third-party vendors, (ii) lower income tax payments and (iii) lower cash interestpayments. These increases were partially offset by: (i) timing of payments on accounts payable and certain accrual payments, (ii) a decreasein incremental gift card sales and (iii) the cash impact of settlement of obligations associated with the International Restaurant ClosureInitiative.Net cash provided by operating activities decreased in 2014 as compared to 2013 primarily as a result of the following: (i) timing ofcollections of holiday gift card sales from third-party vendors, (ii) higher income tax payments, (iii) an increase in the redemption of giftcards, (iv) higher inventory and (v) higher incentive compensation payments. These decreases were partially offset by an increase in cash dueto: (i) lower cash interest payments and (ii) timing of payments on accounts payable and certain accrual payments.Investing activities FISCAL YEAR(dollars in thousands)2015 2014 2013Capital expenditures$(210,263) $(237,868) $(237,214)Acquisition of business, net of cash acquired— (3,063) (100,319)Purchases of life insurance policies(4,753) (1,682) (4,159)Investment in unconsolidated affiliates(739) — —Proceeds received from life insurance policies14,942 627 1,239Proceeds from sale of a business7,798 — —Net change in restricted cash6,952 (4,101) (8,907)Proceeds from disposal of property, fixtures and equipment5,420 5,745 3,223Net cash used in investing activities$(180,643) $(240,342) $(346,137)Net cash used in investing activities during 2015 consisted primarily of capital expenditures and purchases of Company-owned life insurancepolicies. Net cash used in investing activities was partially offset by the following: (i) proceeds from Company-owned life insurance policies,(ii) proceeds from the sale of Roy’s, (iii) the release of escrow cash related to the Brazil Joint Venture acquisition and (iv) proceeds from thedisposal of property, fixtures and equipment.Net cash used in investing activities during 2014 consisted primarily of: (i) capital expenditures, (ii) the net difference in restricted cash usedand restricted cash received and (iii) net cash paid to acquire certain franchise restaurants. Net cash used in investing activities was partiallyoffset by proceeds from the disposal of property, fixtures and equipment.Net cash used in investing activities during 2013 consisted primarily of (i) capital expenditures, (ii) net cash paid to acquire a controllinginterest in our Brazil operations, (iii) the net difference in restricted cash used and restricted cash59Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continuedreceived and (iv) purchases of Company-owned life insurance policies. Net cash used in investing activities was partially offset by proceedsfrom the disposal of property, fixtures and equipment.Financing activities FISCAL YEAR(dollars in thousands)2015 2014 2013Repayments of debt$(716,376) $(925,873) $(180,805)Repurchase of common stock(170,769) (930) (436)Repayments of partner deposits and accrued partner obligations(42,555) (24,925) (23,286)Cash dividends paid on common stock(29,332) — —Distributions to noncontrolling interests(4,761) (5,062) (8,086)Financing fees(2,010) (4,492) (12,519)Purchase of limited partnership and noncontrolling interests(890) (17,211) —Proceeds from borrowings715,300 816,088 100,000Proceeds from exercise of stock options6,024 9,070 27,786Contributions from noncontrolling interests3,635 1,872 27Excess tax benefits from stock-based compensation733 2,732 4,363Repayments of notes receivable due from stockholders— — 5,829Net cash used in financing activities$(241,001) $(148,731) $(87,127)Net cash used in financing activities during 2015 was primarily attributable to the following: (i) repayments of the Term loan B due to theSenior Secured Credit Facility refinancing in March 2015, repayments of the revolving credit facility and voluntary prepayments, (ii) therepurchase of common stock, (iii) repayments of partner deposits and accrued partner obligations and (iv) payment of cash dividends on ourcommon stock. Net cash used in financing activities was partially offset by the following: (i) drawdowns on the revolving credit facility andproceeds from the incremental Term loan A-1 and (ii) proceeds from the exercise of stock options.Net cash used in financing activities during 2014 was primarily attributable to the following: (i) repayment of the Term loan B due to theSenior Secured Credit Facility refinancing in May 2014 and voluntary repayments, (ii) repayment of borrowings on our revolving creditfacilities and scheduled amortization payments on the 2012 CMBS loan and Term loan A, (iii) repayments of partner deposits and accruedpartner obligations, (iv) the purchase of outstanding limited partnership interests in certain restaurants and (v) financing fees related to theSenior Secured Credit Facility refinancing. Net cash used in financing activities was partially offset by proceeds from the refinancing of theSenior Secured Credit Facility and proceeds from the exercise of stock options.Net cash used in financing activities during 2013 was primarily attributable to: (i) the repayment of long-term debt, (ii) repayments of partnerdeposits and accrued partner obligations, (iii) payments of financing fees for the Amended Term loan B repricing transaction completed inApril 2013 and (iv) distributions to noncontrolling interests. This was partially offset by the receipt of proceeds from the exercise of stockoptions and repayments of notes receivable due from stockholders.60Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - ContinuedFINANCIAL CONDITIONFollowing is a summary of our current assets, current liabilities and working capital:(dollars in thousands)DECEMBER 27, 2015 DECEMBER 28, 2014Current assets$418,644 $598,725Current liabilities814,166 838,284Working capital (deficit) (1)$(395,522) $(239,559)________________(1)We adopted ASU No. 2015-17, with prospective application, resulting in the classification of deferred tax assets and liabilities as noncurrent in the ConsolidatedBalance Sheet as of December 27, 2015. See Note 2 - Summary of Significant Accounting Policies for additional detail regarding the adoption of this standard.Working capital (deficit) totaled ($395.5) million and ($239.6) million as of December 27, 2015 and December 28, 2014 , respectively, andincluded Unearned revenue from unredeemed gift cards of $382.6 million and $376.7 million as of December 27, 2015 and December 28,2014 , respectively. We have, and in the future may continue to have, negative working capital balances (as is common for many restaurantcompanies). We operate successfully with negative working capital because cash collected on restaurant sales is typically received beforepayment 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 used to make capital expenditures, service debt obligations, repurchaseshares and pay dividends.Deferred Compensation ProgramsThe deferred compensation obligation due to managing and chef partners was $133.2 million and $155.6 million at December 27, 2015 andDecember 28, 2014 , respectively. We invest in various corporate-owned life insurance policies, which are held within an irrevocable grantoror “rabbi” trust account for settlement of our obligations under the deferred compensation plans. The rabbi trust is funded through ourvoluntary contributions. During fiscal year 2015 , we received proceeds of $16.2 million from our rabbi trust corporate-owned life insurancepolicies to settle obligations under the deferred compensation plans. The unfunded obligation for managing and chef partners’ deferredcompensation is $74.0 million and $82.6 million as of December 27, 2015 and December 28, 2014 , respectively.We use capital to fund the deferred compensation plans and currently expect annual cash funding of $18.0 million to $22.0 million. Actualfunding of the deferred compensation obligations and future funding requirements may vary significantly depending on the actualperformance compared to targets, timing of deferred payments of partner contracts, forfeiture rates, number of partner participants, growth ofpartner investments and our funding strategy.DIVIDENDS AND SHARE REPURCHASESWe did not declare or pay any dividends on our common stock prior to 2015. In fiscal year 2015, we declared and paid quarterly cashdividends of $0.06 per share. In February 2016, the Board declared a quarterly cash dividend of $0.07 per share, payable on March 10, 2016 .Future dividend payments are dependent on our earnings, financial condition, capital expenditure requirements and other factors that ourBoard considers relevant.In December 2014, our Board approved a share repurchase program (the “2014 Share Repurchase Program”) under which we were authorizedto repurchase up to $100.0 million of our outstanding common stock. As of December 27, 2015 , no shares remain to be repurchased underthis authorization.61Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - ContinuedIn August 2015, our Board approved the 2015 Share Repurchase Program under which we are authorized to repurchase up to $100.0 millionof our outstanding common stock. As of December 27, 2015 , $70.0 million had been repurchased under the 2015 Share Repurchase Program.On February 12, 2016, our Board of Directors canceled the $30.0 million of remaining authorization available under the 2015 ShareRepurchase Program and approved a new $250.0 million authorization (the “2016 Share Repurchase Program”). The 2016 Share RepurchaseProgram will expire on August 12, 2017 .The following table presents our dividends and share repurchases from December 29, 2014 through December 27, 2015 :(dollars in thousands)DIVIDENDS PAID SHARE REPURCHASES TAXES RELATED TOSETTLEMENT OF EQUITYAWARDS TOTALThirteen weeks ended March 29, 2015 (1)$7,423 $70,000 $322 $77,745Thirteen weeks ended June 28, 20157,391 30,000 203 37,594Thirteen weeks ended September 27, 20157,333 59,999 200 67,532Thirteen weeks ended December 27, 20157,185 10,000 45 17,230Total$29,332 $169,999 $770 $200,101________________(1)Includes the repurchase of $70.0 million of our common stock in connection with the secondary public offering by Bain Capital in March 2015.Our ability to pay dividends and make share repurchases is dependent on our ability to obtain funds from our subsidiaries and to have accessto our revolving credit facility. Based on our Credit Agreement, restricted dividend payments from OSI to Bloomin’ Brands can be made onan unlimited basis provided we are compliant with our debt covenants.OFF-BALANCE SHEET ARRANGEMENTSNone.OTHER MATERIAL COMMITMENTSOur contractual obligations, debt obligations and commitments as of December 27, 2015 are summarized in the table below: PAYMENTS DUE BY PERIOD LESS THAN 1-3 3-5 MORE THAN(dollars in thousands)TOTAL 1 YEAR YEARS YEARS 5 YEARSRecorded Contractual Obligations Long-term debt (1)$1,316,864 $31,853 $516,161 $766,946 $1,904Deferred compensation and other partner obligations (2)156,297 21,826 56,252 43,358 34,861Other recorded contractual obligations (3)21,110 4,761 4,565 1,884 9,900Unrecorded Contractual Obligations Interest (4)129,174 57,341 61,873 9,960 —Operating leases960,162 143,866 243,594 178,838 393,864Purchase obligations (5)509,662 216,527 180,790 79,007 33,338Total contractual obligations$3,093,269 $476,174 $1,063,235 $1,079,993 $473,867____________________(1)Includes capital lease obligations. Excludes unamortized discount of $3.5 million . See Footnote 22 - Subsequent Events of our Notes to Consolidated FinancialStatements in Part II, Item 8 for additional details regarding the PRP Mortgage Loan, which is excluded from this table.62Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued(2)Includes deferred compensation obligations, deposits and other accrued obligations due to our restaurant partners. Timing and amounts of payments may varysignificantly based on employee turnover, return of deposits and changes to buyout values.(3)Includes other long-term liabilities, primarily consisting of non-partner deferred compensation obligations, restaurant closing cost liabilities and asset retirementobligations. As of December 27, 2015 , unrecognized tax benefits of $19.4 million were excluded from the table since it is not possible to estimate when these futurepayments will occur.(4)Projected future interest payments on long-term debt are based on interest rates in effect as of December 27, 2015 and assume only scheduled principal payments.Estimated interest expense includes the impact of our variable-to-fixed interest rate swap agreements. As of December 27, 2015 , we had a derivative liability of $10.1million for the interest rate swap agreements recorded in our Consolidated Balance Sheet. See Footnote 22 - Subsequent Events of our Notes to Consolidated FinancialStatements in Part II, Item 8 for additional details regarding the PRP Mortgage Loan interest, which is excluded from this table.(5)Purchase obligations include agreements to purchase goods or services that are enforceable, are legally binding and specify all significant terms, including fixed orminimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. We have purchase obligations withvarious vendors that consist primarily of inventory, restaurant level service contracts, advertising, insurance and technology.Critical Accounting Policies and EstimatesOur discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, whichhave been prepared in accordance with U.S. GAAP. The preparation of these accompanying consolidated financial statements requires us tomake estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure ofcontingent assets and liabilities during the reporting period. We base our estimates on historical experience and on various other assumptionsthat are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying valueof assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under differentassumptions or conditions. We consider an accounting estimate to be critical if it requires assumptions to be made and changes in theseassumptions could have a material impact on our consolidated financial condition or results of operations.Impairment or Disposal of Long-Lived AssetsLong-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not berecoverable. The evaluation is performed at the lowest level of identifiable cash flows independent of other assets. For long-lived assetsdeployed at our restaurants, we review for impairment at the individual restaurant level.When evaluating for impairment, the total future undiscounted cash flows expected to be generated by the asset are compared to the carryingamount. If the total future undiscounted cash flows expected to be generated by the assets are less than the carrying amount, this may be anindicator of impairment. An impairment loss is recognized in earnings when the asset’s carrying value exceeds its estimated fair value. Fairvalue is generally estimated using a discounted cash flow model. The key estimates and assumptions used in this model are future cash flowestimates, with material changes generally driven by changes in expected use, and the discount rate.If actual results are not consistent with our estimates and assumptions used in estimating future cash flows and asset fair values, we may beexposed to losses that could be material. We do not believe there is a reasonable likelihood that there will be a material change in theestimates or assumptions we use to calculate long-lived asset impairment losses.Goodwill and Indefinite-Lived Intangible AssetsGoodwill and indefinite-lived intangible assets are tested for impairment annually in the second fiscal quarter, or whenever events or changesin 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. Inconsidering the qualitative approach, we evaluate factors including, but not limited to, macro-economic conditions, market and industryconditions, commodity cost fluctuations, competitive environment, share price63Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continuedperformance, results of prior impairment tests, operational stability and the overall financial performance of the reporting units.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 unitexceeds the carrying value, the fair value of the reporting unit is calculated. Fair value of a reporting unit is the price a willing buyer wouldpay for the reporting unit and is estimated using a discounted cash flow model. The key estimates and assumptions used in this model arefuture cash flow estimates, which are heavily influenced by growth rates, and the discount rate. The fair value of the trade name is determinedthrough a relief from royalty method.The carrying value of the reporting unit is compared to its estimated fair value, with any excess of carrying value over fair value deemed to bean indicator of potential impairment, in which case a second step is performed comparing the recorded amount of goodwill or indefinite-livedintangible assets to the implied fair value.The carrying value of goodwill as of December 27, 2015 was $300.9 million , which related to our U.S. and International reporting units. Weperformed our annual impairment test in the second quarter of 2015 by utilizing the quantitative approach and determined that the excess offair value over carrying value of our reporting units was substantial. Sales declines at our restaurants, unplanned increases in insurance, commodity or labor costs, deterioration in overall economic conditionsand challenges in the restaurant industry may result in future impairment charges. It is possible that changes in circumstances or changes inour judgments, assumptions and estimates could result in an impairment charge of a portion or all of our goodwill or other intangible assets.Insurance ReservesWe self-insure or maintain high per-claim deductibles for a significant portion of expected losses under our workers’ compensation, generalliability/liquor liability, health, property and management liability insurance programs. For some programs, we maintain stop-loss coverage tolimit the exposure relating to certain risks.We record a liability for all unresolved claims and for an estimate of incurred but not reported claims at the anticipated cost to us. Ourliability for self-insurance claims was $61.5 million and $62.4 million as of December 27, 2015 and December 28, 2014 , respectively. Inestablishing our reserves, we consider certain actuarial assumptions and judgments regarding economic conditions, the frequency and severityof claims and claim development history and settlement practices. Reserves recorded for workers’ compensation and general liability/liquorliability claims are discounted using the average of the one-year and five-year risk free rate of monetary assets that have comparablematurities.We do not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions used to calculate ourself-insured liabilities. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to losses or gainsthat could be material. A 50 basis point change in the discount rate in our self-insured liabilities as of December 27, 2015 , would haveaffected net earnings by $1.0 million in fiscal year 2015 .Stock-Based CompensationWe have a stock-based compensation plan that permits the grant of stock options, stock appreciation rights, restricted stock, restricted stockunits, performance awards and other stock-based awards to our management and other key employees. We account for our stock-basedemployee compensation using a fair value-based method of accounting.We use the Black-Scholes option pricing model to estimate the weighted-average grant date fair value of stock options granted. Expectedvolatilities are based on historical volatilities of our stock and the stock of comparable peer companies. The expected term of options grantedrepresents the period of time that options granted are expected to be outstanding. The simplified method of estimating expected term is usedsince we do not have significant historical64Table of ContentsBLOOMIN’ BRANDS, INC.MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continuedexercise experience for our stock options. Dividend yield is the level of dividends expected to be paid on our common stock over the expectedterm of our options. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effectas of the grant date.Our performance-based share units (“PSUs”) require assumptions regarding the likelihood of achieving certain Company performance criteriaset forth in the award agreements. Assumptions used in our assessment are consistent with our internal forecasts and operating plans andassume achievement of performance conditions .Estimates and assumptions are based upon information currently available, including historical experience and current business and economicconditions. A simultaneous 10% change in our volatility, forfeiture rate, weighted-average risk-free interest rate and term of grant in our stockoption pricing model for fiscal year 2015 would have affected net income by $0.3 million .If we assumed that the PSU performance conditions for stock-based awards were not met, stock-based compensation expense would havedecreased by $3.2 million for fiscal year 2015 . If we assumed that PSU share awards met their maximum threshold, expense would haveincreased by $3.7 million for fiscal year 2015 .Income TaxesDeferred tax assets and liabilities are recognized based on the differences between the financial statement carrying amounts of assets andliabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the tax rates, based on certain judgmentsregarding enacted tax laws and published guidance, in effect in the years in which we expect those temporary differences to reverse. Avaluation allowance is established against the deferred tax assets when it is more likely than not that some portion or all of the deferred taxesmay not be realized. Changes in assumptions regarding our level and composition of earnings, tax laws or the deferred tax valuationallowance and the results of tax audits, may materially impact the effective income tax rate.Our income tax returns, like those of most companies, are periodically audited by U.S. and foreign tax authorities. In determining taxableincome, income or loss before taxes is adjusted for differences between local tax laws and generally accepted accounting principles. A taxbenefit from an uncertain position is recognized only if it is more likely than not that the position is sustainable based on its technical merits.For uncertain tax positions that do not meet this threshold, we recognize a liability. The liability for unrecognized tax benefits requiressignificant management judgment regarding exposures about our various tax positions. These assumptions and probabilities are periodicallyreviewed and updated based upon new information. An unfavorable tax settlement generally requires the use of cash and an increase in theamount of income tax expense we recognize.Recently Issued Financial Accounting StandardsFor a description of recently issued Financial Accounting Standards that we adopted in 2015 and that are applicable to us but have not yetbeen adopted, see Note 2 - Summary of Significant Accounting Policies of the Notes to the Consolidated Financial Statements of this Report.65Table of ContentsBLOOMIN’ BRANDS, INC.Item 7A. Quantitative and Qualitative Disclosures about Market RiskWe are exposed to market risk from changes in interest rates on debt, changes in foreign currency exchange rates and changes in commodityprices.Interest Rate RiskWe are exposed to market risk from fluctuations in interest rates, which could affect our consolidated balance sheet, earnings and cash flows.Stockholders’ equity can be adversely affected by changing interest rates, as after-tax changes in the fair value of interest rate swapsdesignated as cash flow hedges are reflected as increases and decreases to a component of stockholders’ equity.We manage our exposure to market risk through regular operating and financing activities and when deemed appropriate, through the use ofderivative financial instruments. We use derivative financial instruments as risk management tools and not for speculative purposes. See Note16 - Derivative Instruments and Hedging Activities of the Notes to Consolidated Financial Statements for further information.As of December 27, 2015 , our interest rate risk was primarily from variable interest rate changes on our Senior Secured Credit Facility and aportion of our 2012 CMBS loan. To manage the risk of fluctuations in variable interest rate debt, we entered into interest rate swaps for anaggregate notional amount of $400.0 million in 2014 with a start date of June 30, 2015. We also use an interest rate cap to limit the volatilityof the floating rate component of a portion of the 2012 CMBS loan.We utilize valuation models to estimate the effects of changing interest rates. The following table summarizes the changes to fair value andinterest expense under a shock scenario. This analysis assumes that interest rates change suddenly, as an interest rate “shock” and continue toincrease or decrease at a consistent level above or below the LIBOR curve. DECEMBER 27, 2015(dollars in thousands)INCREASE (1) DECREASE (2)Change in fair value: Interest rate swap$2,187 $(23,934) Change in annual interest expense (3): Variable rate debt$4,504 $(2,547)________________(1)The potential change from a hypothetical 100 basis point increase in short-term interest rates.(2)The potential change from a hypothetical basis point decrease in short-term interest rates based on the LIBOR curve with a floor of zero. The curve ranges from ourcurrent interest rate of 19 basis points to 71 basis points.(3)Excludes the floating rate component of the 2012 CMBS loan.Foreign Currency Exchange Rate RiskWe are subject to foreign currency exchange risk for our restaurants operating in foreign countries. We have experienced significant foreigncurrency impact during 2015 due primarily to fluctuations of the Brazil Real and South Korean Won relative to the U.S. dollar. During fiscalyear 2015 , restaurant sales and operating income were negatively impacted by $119.3 million and $11.0 million , respectively, from changesin foreign currency rates. When the U.S. dollar strengthens compared to other currencies, the effect is a reduction in revenues and expensesdenominated in currencies other than the U.S. dollar.66Table of ContentsBLOOMIN’ BRANDS, INC.Our exposures to foreign currency exchange risk are primarily related to fluctuations in the Brazil Real and the South Korea Won relative tothe U.S. dollar. Our operations in other markets consist of Company-owned restaurants on a smaller scale than the markets identified above.To manage a portion of our exchange rate risk, we entered into non-deliverable foreign currency forward contracts in 2015 to offset changesin the value of certain liabilities denominated in South Korean Won. We incurred losses of $0.6 million as a result of changes in the fair valueof foreign currency forward contracts during fiscal year 2015. As of December 27, 2015 , the fair value of the derivative instruments was $0.6million in a liability position.For fiscal year 2015 , 11.4% of our revenue was generated in foreign currencies. We expect the percentage of revenue derived from outsidethe U.S. to increase in future periods as we continue to expand internationally. A 10% change in average foreign currency rates against theU.S. dollar would have increased or decreased our Total revenues and Net income for our consolidated foreign entities by $54.8 million and$0.8 million , respectively, for fiscal year 2015 .Commodity Pricing RiskMany of the ingredients used in the products sold in our restaurants are commodities that are subject to unpredictable price volatility.Although we attempt to minimize the effect of price volatility by negotiating fixed price contracts for the supply of key ingredients, there areno established fixed price markets for certain commodities such as produce and wild fish, and we are subject to prevailing market conditionswhen purchasing those types of commodities. Other commodities are purchased based upon negotiated price ranges established with vendorswith reference to the fluctuating market prices. The related agreements may contain contractual features that limit the price paid byestablishing certain price floors and caps. Extreme changes in commodity prices or long-term changes could affect our financial resultsadversely. We expect that in most cases increased commodity prices could be passed through to our consumers through increases in menuprices. However, if there is a time lag between the increasing commodity prices and our ability to increase menu prices, or if we believe thecommodity price increase to be short in duration and we choose not to pass on the cost increases, our short-term financial results could benegatively affected. Additionally, from time to time, competitive circumstances could limit menu price flexibility, and in those cases marginswould be negatively impacted by increased commodity prices.Our restaurants are dependent upon energy to operate and are impacted by changes in energy prices, including natural gas. We utilizederivative instruments to mitigate some of our overall exposure to material increases in natural gas prices. We record mark-to-market changesin the fair value of our natural gas derivative instruments in earnings in the period of change. We incurred losses of $0.5 million , $0.6 millionand $0.1 million as a result of changes in the fair value of the commodity derivative instruments during fiscal years 2015 , 2014 , and 2013 ,respectively. As of December 27, 2015 and December 28, 2014 , the fair value of the derivative instruments was $0.6 million in a liabilityposition.In addition to the market risks identified above, we are subject to business risk as our U.S. beef supply is highly dependent upon a limitednumber of vendors. If these vendors were unable to fulfill their obligations under their contracts, we could encounter supply shortages andincur higher costs to secure adequate supplies. See Note 19 - Commitments and Contingencies of the Notes to Consolidated FinancialStatements for further details.This market risk discussion contains forward-looking statements. Actual results may differ materially from the discussion based upon generalmarket conditions and changes in U.S. and global financial markets.67Table of ContentsBLOOMIN’ BRANDS, INC.Item 8. Financial Statements and Supplementary DataINDEX TO FINANCIAL INFORMATION PAGE NO. Management’s Annual Report on Internal Control over Financial Reporting69 Report of Independent Registered Certified Public Accounting Firm70 Consolidated Balance Sheets — December 27, 2015 and December 28, 201471 Consolidated Statements of Operations and Comprehensive Income — For Fiscal Years 2015, 2014 and 201372 Consolidated Statements of Changes in Stockholders’ Equity — For Fiscal Years 2015, 2014 and 201373 Consolidated Statements of Cash Flows — For Fiscal Years 2015, 2014 and 201375 Notes to Consolidated Financial Statements7768Table of ContentsBLOOMIN’ BRANDS, INC.Management’s Annual Report on Internal Control over Financial ReportingManagement is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined inExchange Act Rule 13a-15(f). The Company’s internal control over financial reporting includes those policies and procedures that (i) pertainto the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of theCompany; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only inaccordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financialstatements.Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements prepared for external purposes in accordance with generally accepted accounting principles. Because of itsinherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degreeof compliance with the policies or procedures may deteriorate.On May 14, 2013, the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) issued an updated version of itsInternal Control—Integrated Framework (“2013 Framework”). Under the supervision and with the participation of management, includingour Chief Executive Officer and Chief Financial and Administrative Officer, we carried out an evaluation of the effectiveness of our internalcontrol over financial reporting as of December 27, 2015 using the 2013 Framework. Based upon our evaluation, management concluded thatour internal control over financial reporting was effective as of December 27, 2015 .The effectiveness of our internal control over financial reporting as of December 27, 2015 has been audited by PricewaterhouseCoopers LLP,an independent registered certified public accounting firm, as stated in their report which is included herein, and which expresses anunqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 27, 2015 .69Table of ContentsBLOOMIN’ BRANDS, INC.Report of Independent Registered Certified Public Accounting FirmTo the Board of Directors and Stockholders of Bloomin’ Brands, Inc.In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations and comprehensiveincome, of changes in stockholders’ equity and cash flows present fairly, in all material respects, the financial position of Bloomin’ Brands,Inc. and its subsidiaries at December 27, 2015 and December 28, 2014, and the results of their operations and their cash flows for each of thethree years in the period ended December 27, 2015 in conformity with accounting principles generally accepted in the United States ofAmerica. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as ofDecember 27, 2015, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of SponsoringOrganizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements, formaintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financialreporting in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinionson these financial statements and on the Company’s internal control over financial reporting based on our integrated audits. We conductedour audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement andwhether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statementsincluded examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accountingprinciples used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit ofinternal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the riskthat a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessedrisk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our auditsprovide a reasonable basis for our opinions.As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it classifies deferred tax assetsand liabilities on the balance sheet in 2015.A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accountingprinciples. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance ofrecords that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) providereasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of anyevaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, orthat the degree of compliance with the policies or procedures may deteriorate./s/ PricewaterhouseCoopers LLPTampa, FloridaFebruary 24, 201670Table of ContentsBLOOMIN’ BRANDS, INC.CONSOLIDATED BALANCE SHEETS(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) DECEMBER 27, 2015 DECEMBER 28, 2014ASSETS Current Assets Cash and cash equivalents$132,337 $165,744Current portion of restricted cash and cash equivalents6,772 6,829Inventories80,704 80,817Deferred income tax assets— 123,866Assets held for sale784 16,667Other current assets, net198,047 204,802Total current assets418,644 598,725Restricted cash16,265 25,451Property, fixtures and equipment, net1,594,460 1,629,311Goodwill300,861 341,540Intangible assets, net546,837 585,432Deferred income tax assets7,631 6,038Other assets, net147,871 151,743Total assets$3,032,569 $3,338,240LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY Current Liabilities Accounts payable$193,116 $191,207Accrued and other current liabilities206,611 246,243Unearned revenue382,586 376,696Current portion of long-term debt, net31,853 24,138Total current liabilities814,166 838,284Deferred rent139,758 121,819Deferred income tax liabilities53,546 181,125Long-term debt, net1,285,011 1,285,659Other long-term liabilities, net294,662 330,171Total liabilities2,587,143 2,757,058Commitments and contingencies (Note 19) Mezzanine Equity Redeemable noncontrolling interests23,526 24,733Stockholders’ Equity Bloomin’ Brands Stockholders’ Equity Preferred stock, $0.01 par value, 25,000,000 shares authorized; no shares issued and outstanding as of December 27,2015 and December 28, 2014— —Common stock, $0.01 par value, 475,000,000 shares authorized; 119,214,522 and 125,949,870 shares issued andoutstanding as of December 27, 2015 and December 28, 2014, respectively1,192 1,259Additional paid-in capital1,072,861 1,085,627Accumulated deficit(518,360) (474,994)Accumulated other comprehensive loss(147,367) (60,542)Total Bloomin’ Brands stockholders’ equity408,326 551,350Noncontrolling interests13,574 5,099Total stockholders’ equity421,900 556,449Total liabilities, mezzanine equity and stockholders’ equity$3,032,569 $3,338,240 The accompanying notes are an integral part of these consolidated financial statements.71Table of ContentsBLOOMIN’ BRANDS, INC.CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME(IN THOUSANDS, EXCEPT PER SHARE DATA) FISCAL YEAR 2015 2014 2013Revenues Restaurant sales$4,349,921 $4,415,783 $4,089,128Other revenues27,755 26,928 40,102Total revenues4,377,676 4,442,711 4,129,230Costs and expenses Cost of sales1,419,689 1,435,359 1,333,842Labor and other related1,205,610 1,218,961 1,157,622Other restaurant operating1,006,772 1,049,053 964,279Depreciation and amortization190,399 190,911 164,094General and administrative287,614 304,382 268,928Provision for impaired assets and restaurant closings36,667 52,081 22,838Income from operations of unconsolidated affiliates— — (7,730)Total costs and expenses4,146,751 4,250,747 3,903,873Income from operations230,925 191,964 225,357Loss on extinguishment and modification of debt(2,956) (11,092) (14,586)Gain on remeasurement of equity method investment— — 36,608Other expense, net(939) (1,244) (246)Interest expense, net(56,176) (59,658) (74,773)Income before provision (benefit) for income taxes170,854 119,970 172,360Provision (benefit) for income taxes39,294 24,044 (42,208)Net income131,560 95,926 214,568Less: net income attributable to noncontrolling interests4,233 4,836 6,201Net income attributable to Bloomin’ Brands$127,327 $91,090 $208,367 Net income$131,560 $95,926 $214,568Other comprehensive income: Foreign currency translation adjustment(96,194) (31,731) (17,597)Unrealized losses on derivatives, net of tax(6,033) (2,393) —Reclassification of adjustment for loss on derivatives included in net income, net of tax2,235 — —Reclassification of accumulated foreign currency translation adjustment for previously heldequity investment— — 5,980Comprehensive income31,568 61,802 202,951Less: comprehensive (loss) income attributable to noncontrolling interests(8,934) 4,836 6,201Comprehensive income attributable to Bloomin’ Brands$40,502 $56,966 $196,750 Earnings per share: Basic$1.04 $0.73 $1.69Diluted$1.01 $0.71 $1.63Weighted average common shares outstanding: Basic122,352 125,139 122,972Diluted125,585 128,317 128,074 Cash dividends declared per common share$0.24 $— $—The accompanying notes are an integral part of these consolidated financial statements.72Table of ContentsBLOOMIN’ BRANDS, INC.CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY(IN THOUSANDS) BLOOMIN’ BRANDS COMMON STOCK ADDITIONAL PAID-IN CAPITAL ACCUM-ULATED DEFICIT ACCUMULATED OTHER COMPREHENSIVE LOSS NON- CONTROLLING INTERESTS TOTAL SHARES AMOUNT Balance, December 31, 2012121,148 $1,211 $1,000,963 $(773,085) $(14,801) $5,917 $220,205Net income— — — 208,367 — 6,470 214,837Other comprehensive loss,net of tax— — — — (11,617) — (11,617)Release of valuationallowance related topurchases of limitedpartnerships and jointventure interests— — 15,669 — — — 15,669Stock-based compensation— — 14,185 — — — 14,185Excess tax benefit on stock-based compensation— — 4,363 — — — 4,363Common stock issued understock plans, net of forfeituresand shares withheld foremployee taxes3,636 37 27,696 (436) — — 27,297Repayments of notesreceivable due fromstockholders— — 5,829 — — — 5,829Distributions tononcontrolling interests— — — — — (8,086) (8,086)Contributions fromnoncontrolling interests— — — — — 27 27Balance, December 31, 2013124,784 $1,248 $1,068,705 $(565,154) $(26,418) $4,328 $482,709Net income— — — 91,090 — 4,161 95,251Other comprehensive loss,net of tax— — — — (34,124) — (34,124)Stock-based compensation— 17,420 — — — 17,420Excess tax benefit on stock-based compensation— — 2,732 — — — 2,732Common stock issued understock plans, net of forfeituresand shares withheld foremployee taxes1,166 11 9,059 (930) — — 8,140Purchase of limitedpartnership interests, net oftax of $6,785— — (11,662) — — 1,236 (10,426)Transfer to redeemablenoncontrolling interest— — (627) — — — (627)Distributions tononcontrolling interests— — — — — (5,062) (5,062)Contributions fromnoncontrolling interests— — — — — 436 436Balance, December 28, 2014125,950 $1,259 $1,085,627 $(474,994) $(60,542) $5,099 $556,449 (CONTINUED...) 73Table of ContentsBLOOMIN’ BRANDS, INC.CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY(IN THOUSANDS) BLOOMIN’ BRANDS COMMON STOCK ADDITIONAL PAID-IN CAPITAL ACCUM-ULATED DEFICIT ACCUMULATED OTHER COMPREHENSIVE LOSS NON- CONTROLLING INTERESTS TOTAL SHARES AMOUNT Balance, December 28, 2014125,950 $1,259 $1,085,627 $(474,994) $(60,542) $5,099 $556,449Net income— — — 127,327 — 3,228 130,555Other comprehensive (loss)income, net of tax— — — — (86,825) 9 (86,816)Cash dividends declared,$0.24 per common share— — (29,332) — — — (29,332)Repurchase and retirement ofcommon stock(7,645) (76) — (169,923) — — (169,999)Stock-based compensation— — 21,672 — — — 21,672Excess tax benefit on stock-based compensation— — 733 — — — 733Common stock issued understock plans, net of forfeituresand shares withheld foremployee taxes910 9 6,015 (770) — — 5,254Purchase of noncontrollinginterests— — (306) — — — (306)Change in the redemptionvalue of redeemable interests— — (11,548) — — — (11,548)Distributions tononcontrolling interests— — — — — (4,761) (4,761)Contributions fromnoncontrolling interests— — — — — 3,635 3,635Conversion of accruedpartner obligations tononcontrolling interests— — — — — 6,364 6,364Balance, December 27, 2015119,215 $1,192 $1,072,861 $(518,360) $(147,367) $13,574 $421,900The accompanying notes are an integral part of these consolidated financial statements.74Table of ContentsBLOOMIN’ BRANDS, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(IN THOUSANDS) FISCAL YEAR 2015 2014 2013Cash flows provided by operating activities: Net income$131,560 $95,926 $214,568Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization190,399 190,911 164,094Amortization of deferred financing fees2,944 3,116 3,574Amortization of capitalized gift card sales commissions28,205 27,509 23,826Provision for impaired assets and restaurant closings36,667 52,081 22,838Accretion on debt discounts1,778 2,078 2,451Stock-based and other non-cash compensation expense22,725 19,689 21,589Income from operations of unconsolidated affiliates— — (7,730)Deferred income tax expense (benefit)3,996 (13,623) (83,603)Loss on disposal of property, fixtures and equipment1,495 3,608 1,441Unrealized loss on derivative financial instruments644 — —Gain on life insurance and restricted cash investments(2,101) (2,213) (5,284)Loss on extinguishment and modification of debt2,956 11,092 14,586Gain on remeasurement of equity method investment— — (36,608)Loss on disposal of business or subsidiary1,182 770 —Recognition of deferred gain on sale-leaseback transaction(2,121) (2,140) (2,135)Excess tax benefits from stock-based compensation(733) (2,732) (4,363)Change in assets and liabilities: (Increase) decrease in inventories(3,831) (3,126) 3,768Increase in other current assets(43,727) (116,828) (28,336)Decrease (increase) in other assets16,969 9,459 (259)(Decrease) increase in accounts payable and accrued and other current liabilities(9,141) 32,182 10,192Increase in deferred rent17,983 18,746 20,618Increase in unearned revenue6,106 21,030 29,634(Decrease) increase in other long-term liabilities(6,525) 4,471 12,403Net cash provided by operating activities397,430 352,006 377,264Cash flows used in investing activities: Purchases of life insurance policies(4,753) (1,682) (4,159)Proceeds received from life insurance policies14,942 627 1,239Proceeds from disposal of property, fixtures and equipment5,420 5,745 3,223Acquisition of business, net of cash acquired— (3,063) (100,319)Proceeds from sale of a business7,798 — —Capital expenditures(210,263) (237,868) (237,214)Decrease in restricted cash54,782 26,075 29,210Increase in restricted cash(47,830) (30,176) (38,117)Investment in unconsolidated affiliates(739) — —Net cash used in investing activities$(180,643) $(240,342) $(346,137) (CONTINUED...) 75Table of ContentsBLOOMIN’ BRANDS, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(IN THOUSANDS) FISCAL YEAR 2015 2014 2013Cash flows used in financing activities: Proceeds from issuance of senior secured Term loans$150,000 $297,088 $—Extinguishment and modification of senior secured term loan(215,000) (700,000) —Repayments of long-term debt(43,076) (31,873) (80,805)Proceeds from borrowings on revolving credit facilities565,300 519,000 100,000Repayments of borrowings on revolving credit facilities(458,300) (194,000) (100,000)Financing fees(2,010) (4,492) (12,519)Proceeds from the exercise of stock options, net of tax withholdings6,024 9,070 27,786Distributions to noncontrolling interests(4,761) (5,062) (8,086)Contributions from noncontrolling interests3,635 1,872 27Purchase of limited partnership and noncontrolling interests(890) (17,211) —Repayments of partner deposits and accrued partner obligations(42,555) (24,925) (23,286)Repayments of notes receivable due from stockholders— — 5,829Repurchase of common stock(170,769) (930) (436)Excess tax benefits from stock-based compensation733 2,732 4,363Cash dividends paid on common stock(29,332) — —Net cash used in financing activities(241,001) (148,731) (87,127)Effect of exchange rate changes on cash and cash equivalents(9,193) (7,060) 4,181Net decrease in cash and cash equivalents(33,407) (44,127) (51,819)Cash and cash equivalents as of the beginning of the period165,744 209,871 261,690Cash and cash equivalents as of the end of the period$132,337 $165,744 $209,871Supplemental disclosures of cash flow information: Cash paid for interest$53,971 $57,241 $71,397Cash paid for income taxes, net of refunds31,552 56,216 33,673Supplemental disclosures of non-cash investing and financing activities: Conversion of accrued partner obligations to noncontrolling interests$6,364 $— $—Conversion of partner deposits and accrued partner obligations to notes payable— 503 1,875Change in acquisition of property, fixtures and equipment included in accounts payable orcapital lease liabilities3,396 (1,669) 3,050Release of valuation allowance through additional paid-in capital related to purchases oflimited partnerships and joint venture interests— — 15,669Deferred tax effect of purchase of noncontrolling interests— 6,785 — The accompanying notes are an integral part of these consolidated financial statements.76Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS1. Description of BusinessBloomin’ Brands, Inc. (“Bloomin’ Brands” or the “Company”) is one of the largest casual dining restaurant companies in the world, with aportfolio of leading, differentiated restaurant concepts. OSI Restaurant Partners, LLC (“OSI”) is the Company’s primary operating entity andNew Private Restaurant Properties, LLC (“PRP”), another indirect wholly-owned subsidiary of the Company, leases certain of the Company-owned restaurant properties to OSI’s subsidiaries.The Company owns and operates casual, upscale casual and fine dining restaurants. The Company’s restaurant portfolio has four concepts:Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar. Additional Outback Steakhouse,Carrabba’s Italian Grill and Bonefish Grill restaurants in which the Company has no direct investment are operated under franchiseagreements.2 . Summary of Significant Accounting PoliciesBasis of Presentation - The Company’s consolidated financial statements include the accounts and operations of Bloomin’ Brands and itssubsidiaries.To ensure timely reporting, the Company consolidates the results of its Brazil operations on a one -month calendar lag. There were nointervening events that would materially affect the Company’s consolidated financial position, results of operations or cash flows as of andfor the fiscal year ended December 27, 2015 .Principles of Consolidation - All intercompany accounts and transactions have been eliminated in consolidation.The Company consolidates variable interest entities where it has been determined the Company is the primary beneficiary of those entities’operations. The Company is a franchisor of 171 restaurants as of December 27, 2015 , but does not possess any ownership interests in itsfranchisees and generally does not provide financial support to its franchisees. These franchise relationships are not deemed variable interestentities and are not consolidated.Investments in entities the Company does not control, but where the Company’s interest is generally between 20% and 50% and the Companyhas the ability to exercise significant influence over the entity are accounted for under the equity method.Prior to November 1, 2013 , the Company held a 50% ownership interest in PGS Consultoria e Serviços Ltda. (the “Brazil Joint Venture”)through a joint venture arrangement with PGS Participações Ltda (“PGS Par”). Effective November 1, 2013 , the Company acquired acontrolling interest in the Brazil Joint Venture resulting in the consolidation of this entity. Prior to the acquisition, the Company accounted forthe Brazil Joint Venture under the equity method of accounting (see Note 3 - Acquisitions ). The Company’s share of earnings or losses forthe Brazil Joint Venture are recorded in Income from operations of unconsolidated affiliates in its Consolidated Statements of Operations andComprehensive Income .In March 2015 , Bloom Participacoes Ltda. (“BPar”), an indirect wholly-owned subsidiary of the Company, and BPG Participacoes Ltda.(“BPG”) formed a joint venture for the purpose of operating Fleming’s Prime Steakhouse & Wine Bar restaurants in Brazil (“Fleming’sBrazil”). BPG, which includes current and former employees, and current shareholders of Outback Steakhouse in Brazil, holds an 80%ownership interest in Fleming’s Brazil. BPar holds the remaining 20% , which the Company accounts for under the equity method ofaccounting.Fiscal Year - Beginning in 2014, the Company changed its fiscal year end from a calendar year ending on December 31 to a 52 - 53 weekyear ending on the last Sunday in December, effective with fiscal year 2014. In a 52 week fiscal year, each of the Company’s quarterlyperiods comprise 13 weeks. The additional week in a 53 week fiscal year is added to the fourth quarter, making such quarter consist of 14weeks. The Company made the fiscal year change on a prospective basis and did not adjust operating results for prior periods. The followingtable presents the impact of the77Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continuedchange in the Company’s fiscal year on its Consolidated Statements of Operations and Comprehensive Income for the periods indicated:FISCAL YEAR FISCAL YEAR CHANGE IMPACT (in operating days) INCREASE/(DECREASE) (dollars in millions) RESTAURANT SALES NET INCOME ATTRIBUTABLE TOBLOOMIN’ BRANDS2015 2 $24.3 $4.92014 (3) $(46.0) $(9.2)Use of Estimates - The preparation of the accompanying consolidated financial statements in conformity with generally accepted accountingprinciples requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure ofcontingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reportingperiod. Actual results could differ from those estimated.Cash and Cash Equivalents - Cash equivalents consist of investments that are readily convertible to cash with an original maturity date ofthree months or less. Cash and cash equivalents include $60.7 million and $48.0 million , as of December 27, 2015 and December 28, 2014 ,respectively, for amounts in transit from credit card companies since settlement is reasonably assured.Concentrations of Credit and Counterparty Risk - Financial instruments that potentially subject the Company to a concentration of credit riskare vendor and other receivables. Vendor and other receivables consist primarily of amounts due from vendor rebates and gift card resellers,respectively. The Company considers the concentration of credit risk for vendor and other receivables to be minimal due to the paymenthistories and general financial condition of its vendors and gift card resellers.Financial instruments that potentially subject the Company to concentrations of counterparty risk are cash and cash equivalents, restrictedcash and derivatives. The Company attempts to limit its counterparty risk by investing in certificates of deposit, money market funds,noninterest-bearing accounts and other highly rated investments. Whenever possible, the Company selects investment grade counterpartiesand rated money market funds in order mitigate its counterparty risk. At times, cash balances may be in excess of FDIC insurance limits. SeeNote 16 - Derivative Instruments and Hedging Activities for a discussion of the Company’s use of derivative instruments and management ofcredit risk inherent in derivative instruments.Fair Value - Fair value is the price that would be received for an asset or paid to transfer a liability, or the exit price, in an orderly transactionbetween market participants on the measurement date. Fair value is categorized into one of the following three levels based on the lowestlevel of significant input:Level 1Unadjusted quoted market prices in active markets for identical assets or liabilitiesLevel 2Observable inputs available at measurement date other than quoted prices included in Level 1Level 3Unobservable inputs that cannot be corroborated by observable market dataInventories - Inventories consist of food and beverages and are stated at the lower of cost (first-in, first-out) or market.Restricted Cash - The Company has both current and long-term restricted cash balances consisting of amounts: (i) held for fulfillment ofcertain loan provisions, (ii) restricted for the payment of property taxes, (iii) pledged for settlement of deferred compensation plan obligationsand (iv) held in escrow for certain indemnifications associated with the sale of Roy’s.78Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedProperty, Fixtures and Equipment - Property, fixtures and equipment are stated at cost, net of accumulated depreciation. Depreciation iscomputed on the straight-line method over the estimated useful life of the assets. Improvements to leased properties are depreciated over theshorter of their useful life or the lease term, which includes renewal periods that are reasonably assured. Estimated useful lives by major assetcategory are generally as follows:Buildings and building improvements20 to 30 yearsFurniture and fixtures5 to 7 yearsEquipment2 to 7 yearsLeasehold improvements5 to 20 yearsCapitalized software3 to 7 yearsRepair and maintenance costs that maintain the appearance and functionality of the restaurant, but do not extend the useful life of anyrestaurant asset are expensed as incurred. The Company suspends depreciation and amortization for assets held for sale. The cost and relatedaccumulated depreciation of assets sold or disposed are removed from the Company’s Consolidated Balance Sheets, and any resulting gain orloss is generally recognized in Other restaurant operating expense in the Company’s Consolidated Statements of Operations andComprehensive Income .The Company capitalizes direct and indirect internal costs associated with the acquisition, development, design and construction ofCompany-owned restaurant locations as these costs have a future benefit to the Company. Upon restaurant opening, these costs aredepreciated and charged to depreciation and amortization expense. Internal costs of $8.0 million , $8.7 million and $9.1 million werecapitalized during fiscal years 2015 , 2014 and 2013 , respectively.For fiscal years 2015 and 2014 , software development costs of $4.8 million and $5.0 million , respectively, were capitalized. As ofDecember 27, 2015 and December 28, 2014 , there were $27.9 million and $30.6 million , respectively, of unamortized software developmentcosts included in Property, fixtures and equipment in the Company’s Consolidated Balance Sheets .Goodwill and Intangible Assets - Goodwill represents the excess of the purchase price over the fair value of net assets acquired in businesscombinations and is assigned to the reporting unit in which the acquired business will operate. The Company’s indefinite-lived intangibleassets consist of trade names. Goodwill and indefinite-lived intangible assets are tested for impairment annually, as of the first day of thesecond fiscal quarter, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.The Company may elect to perform a qualitative assessment to determine whether it is more likely than not that a reporting unit is impaired.If the qualitative assessment is not performed or if the Company determines that it is not more likely than not that the fair value of thereporting unit exceeds the carrying value, the fair value of the reporting unit is calculated. The carrying value of the reporting unit iscompared to its estimated fair value, with any excess of carrying value over fair value deemed to be an indicator of potential impairment, inwhich case a second step is performed comparing the recorded amount of goodwill or indefinite-lived intangible assets to the implied fairvalue.Definite-lived intangible assets, which consist primarily of trademarks, franchise agreements, reacquired franchise rights, favorable leases,and other long-lived assets, are amortized over their estimated useful lives and are tested for impairment, using the discounted cash flowmethod, whenever events or changes in circumstances indicate that the carrying value may not be recoverable.Derivatives - The Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value ofderivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationshipand apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting.Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecastedtransactions, are considered cash flow hedges. If the derivative qualifies for hedge accounting79Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continuedtreatment, then the effective portion of the gain or loss on the derivative instrument is recognized in equity as a change to Accumulated othercomprehensive loss and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Anyineffective portion of the gain or loss on the derivative instrument is immediately recognized in the Company’s Consolidated Statements ofOperations and Comprehensive Income .The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accountingdoes not apply or the Company elects not to apply hedge accounting. Derivatives not designated as hedges are not speculative and are used tomanage the Company’s exposure to interest rate movements, foreign currency exchange rate movements and other identified risks. Changesin the fair value of derivatives not designated in hedging relationships are recorded directly in earnings. The Company has elected not tooffset derivative positions in the balance sheet with the same counterparty under the same agreement.Deferred Financing Fees - For fees associated with its revolving credit facility, the Company records deferred financing fees related to theissuance of debt obligations in Other assets, net. For fees associated with all other debt obligations, the Company records deferred financingfees in Long-term debt, net.The Company amortizes deferred financing fees to interest expense over the term of the respective financing arrangement, primarily using theeffective interest method. The Company amortized deferred financing fees of $2.9 million , $3.1 million and $3.6 million to interest expensefor fiscal years 2015 , 2014 and 2013 , respectively.Liquor Licenses - The costs of obtaining non-transferable liquor licenses directly issued by local government agencies for nominal fees areexpensed as incurred. The costs of purchasing transferable liquor licenses through open markets in jurisdictions with a limited number ofauthorized liquor licenses are capitalized as indefinite-lived intangible assets and included in Other assets, net. Annual liquor license renewalfees are expensed over the renewal term.Insurance Reserves - The Company self-insures or maintains high per-claim deductibles for a significant portion of expected losses under itsworkers’ compensation, general liability/liquor liability, health, property and management liability insurance programs. The Company recordsa liability for all unresolved claims and for an estimate of incurred but not reported claims at the anticipated cost to the Company. Inestablishing reserves, the Company considers certain actuarial assumptions and judgments regarding economic conditions, the frequency andseverity of claims, claim development history and settlement practices. Reserves recorded for workers’ compensation and general liabilityclaims are discounted using the average of the one -year and five -year risk free rate of monetary assets that have comparable maturities.Redeemable Noncontrolling Interests - The Company consolidates Outback Steakhouse subsidiaries in Brazil and China, each of which havenoncontrolling interests that are permitted to deliver subsidiary shares in exchange for cash at a future date. The Company believes that it isprobable that the noncontrolling interests will become redeemable.The Redeemable noncontrolling interests are reported at their estimated redemption value measured as the greater of estimated fair value atthe end of each reporting period or the historical cost basis of the redeemable noncontrolling interest adjusted for cumulative earnings or lossallocations. The resulting increases or decreases to fair value, if applicable, are recognized as adjustments to Retained earnings, or in theabsence of Retained earnings, Additional paid-in capital. The estimated fair value of Redeemable noncontrolling interests are measuredquarterly using the income approach, based on a discounted cash flow methodology, with projected cash flows as the significant input.Redeemable noncontrolling interests are classified in Mezzanine equity in the Company’s Consolidated Balance Sheets.Share Repurchase - Shares repurchased are retired. The par value of the repurchased shares is deducted from common stock and the excess ofthe purchase price over the par value of the shares is recorded to Accumulated deficit.Revenue Recognition - The Company records food and beverage revenues, net of discounts, upon sale. Initial and developmental franchisefees are recognized as income once the Company has substantially performed all of its material obligations under the franchise agreement,which is generally upon the opening of the franchised restaurant. Continuing80Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continuedroyalties, which are a percentage of net sales of the franchisee, are recognized as income when earned. Franchise-related revenues areincluded in Other revenues in the Company’s Consolidated Statements of Operations and Comprehensive Income .The Company defers revenue for gift cards, which do not have expiration dates, until redemption by the consumer. Gift cards sold at adiscount are recorded as revenue upon redemption of the associated gift cards at an amount net of the related discount. The Company alsorecognizes gift card breakage revenue for gift cards when the likelihood of redemption by the consumer is remote, which the Companydetermined are those gift cards issued on or before three years prior to the balance sheet date. The Company recorded breakage revenue of$22.9 million , $18.8 million and $16.3 million for fiscal years 2015 , 2014 and 2013 , respectively. Breakage revenue is recorded as acomponent of Restaurant sales in the Company’s Consolidated Statements of Operations and Comprehensive Income .Gift card sales commissions paid to third-party providers are initially capitalized and subsequently recognized as Other restaurant operatingexpenses upon redemption of the associated gift card. Deferred expenses of $16.1 million and $15.6 million as of December 27, 2015 andDecember 28, 2014 , respectively, were reflected in Other current assets, net in the Company’s Consolidated Balance Sheets. Gift card salesthat are accompanied by a bonus gift card to be used by the consumer at a future visit result in a separate deferral of a portion of the originalgift card sale. Revenue is recorded when the bonus card is redeemed at the estimated fair market value of the bonus card.The Company collects and remits sales, food and beverage, alcoholic beverage and hospitality taxes on transactions with consumers andreports revenue net of taxes in its Consolidated Statements of Operations and Comprehensive Income .Operating Leases - Rent expense for the Company’s operating leases, which generally have escalating rentals over the term of the lease andmay include rent holidays, is recorded on a straight-line basis over the initial lease term and those renewal periods that are reasonably assured.The difference between rent expense and rent paid is recorded as deferred rent and is included in the Company’s Consolidated BalanceSheets. Payments received from landlords as incentives for leasehold improvements are recorded as deferred rent and are amortized on astraight-line basis over the term of the lease as a reduction of rent expense. Favorable and unfavorable lease assets and liabilities areamortized on a straight-line basis to rent expense over the remaining lease term.Pre-Opening Expenses - Non-capital expenditures associated with opening new restaurants are expensed as incurred and are included inOther restaurant operating expenses in the Company’s Consolidated Statements of Operations and Comprehensive Income .Consideration Received from Vendors - The Company receives consideration for a variety of vendor-sponsored programs, such as volumerebates, promotions and advertising allowances. Advertising allowances are intended to offset the Company’s costs of promoting and sellingmenu items in its restaurants. Vendor consideration is recorded as a reduction of Cost of sales or Other restaurant operating expenses whenrecognized in the Company’s Consolidated Statements of Operations and Comprehensive Income .Impairment of Long-Lived Assets and Costs Associated with Exit Activities - Long-lived assets are reviewed for impairment whenever eventsor changes in circumstances indicate that the carrying value may not be recoverable. The evaluation is performed at the lowest level ofidentifiable cash flows independent of other assets. For long-lived assets deployed at its restaurants, the Company reviews for impairment atthe individual restaurant level. When evaluating for impairment, the total future undiscounted cash flows expected to be generated by theasset are compared to the carrying amount. If the total future undiscounted cash flows of the asset are less than its carrying amount,recoverability is measured by comparing the fair value of the assets to the carrying amount. An impairment loss is recognized in earningswhen the asset’s carrying value exceeds its estimated fair value. Fair value is generally estimated using a discounted cash flow model.81Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedGenerally, restaurant closure costs, including lease termination fees, are expensed as incurred. When the Company ceases using the propertyrights under a non-cancelable operating lease, it records a liability for the net present value of any remaining lease obligations as a result oflease termination, less the estimated sublease income that can reasonably be obtained for the property. Any subsequent adjustments to thatliability as a result of lease termination or changes in estimates of sublease income are recorded in the period incurred. The associatedexpense is recorded in Provision for impaired assets and restaurant closings in the Company’s Consolidated Statements of Operations andComprehensive Income .Restaurant sites and certain other assets to be sold are included in assets held for sale when certain criteria are met, including the requirementthat the likelihood of selling the assets within one year is probable.Advertising Costs - Advertising production costs are expensed in the period when the advertising first occurs. All other advertising costs areexpensed in the period in which the costs are incurred. Advertising expense of $161.6 million , $191.1 million and $182.4 million for fiscalyears 2015 , 2014 and 2013 , respectively, was recorded in Other restaurant operating expenses in the Company’s Consolidated Statements ofOperations and Comprehensive Income .Legal Costs - Settlement costs are accrued when they are deemed probable and reasonably estimable. Legal fees are recognized as incurredand are reported in General and administrative expense in the Company’s Consolidated Statements of Operations and Comprehensive Income.Research and Development Expenses (“R&D”) - R&D is expensed as incurred in General and administrative expense in the Company’sConsolidated Statements of Operations and Comprehensive Income . R&D primarily consists of payroll and benefit costs. R&D was $6.5million , $5.8 million and $6.4 million for fiscal years 2015 , 2014 and 2013 , respectively.Partner Compensation - The Restaurant Managing Partner of each Company-owned U.S. restaurant and the Chef Partner of each Fleming’sPrime Steakhouse & Wine Bar, as well as Area Operating Partners, generally receive bonuses for providing management and supervisoryservices to their restaurants based on a percentage of their associated restaurants’ monthly cash flows (“Monthly Payments”). The expenseassociated with the Monthly Payments for Restaurant Managing Partners and Chef Partners is included in Labor and other related expenses,and the expense associated with the Monthly Payments for Area Operating Partners is included in General and administrative expenses in theCompany’s Consolidated Statements of Operations and Comprehensive Income .Restaurant Managing Partners and Chef Partners in the U.S. that are eligible to participate in a deferred compensation program receive anunsecured promise of a cash contribution to their account (see Note 6 - Stock-based and Deferred Compensation Plans ). On the fifthanniversary of the opening of each new U.S. Company-owned restaurant, the Area Operating Partner supervising the restaurant during thefirst five years of operation receives an additional bonus based upon the average distributable cash flow of the restaurant for the preceding 24months. In addition to Monthly Payments and deferred compensation, Area Operating Partners, Restaurant Managing Partners and ChefPartners in the U.S. whose restaurants and concepts achieve certain targets, including sales, profitability and traffic growth, are eligible toreceive an annual bonus equal to a percentage of the restaurant’s incremental sales increase.The Company estimates future bonuses and deferred compensation obligations to Restaurant Managing, Chef Partners and Area OperatingPartners, using current and historical information on restaurant performance and records the long-term portion of partner obligations in Otherlong-term liabilities, net in its Consolidated Balance Sheets. Deferred compensation expenses for Restaurant Managing and Chef partners areincluded in Labor and other related expenses and bonus expense for Area Operating Partners is included in General and administrativeexpenses in the Company’s Consolidated Statements of Operations and Comprehensive Income .Stock-based Compensation - Stock-based compensation awards are measured at fair value at the date of grant and expensed over their vestingor service periods. Stock-based compensation expense is recognized only for those awards expected to vest. The expense, net of forfeitures, isrecognized using the straight-line method.82Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedForeign Currency Translation and Transactions - For all significant non-U.S. operations, the functional currency is the local currency.Foreign currency denominated assets and liabilities are translated into U.S. dollars using the exchange rates in effect at the balance sheet datewith the translation adjustments recorded in Accumulated other comprehensive loss in the Company’s Consolidated Statements of Changes inStockholders’ Equity. Results of operations are translated using the average exchange rates for the reporting period.The Company recorded foreign currency exchange transaction losses of $1.2 million , $0.7 million and $0.2 million for fiscal years 2015 ,2014 and 2013 , respectively. Foreign currency exchange transaction losses are recorded in General and administrative in the Company’sConsolidated Statements of Operations and Comprehensive Income .Income Taxes - Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences betweenthe financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred income tax assets andliabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences areexpected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in the tax rate is recognized in incomein the period that includes the enactment date of the rate change. A valuation allowance may reduce deferred income tax assets to the amountthat is more likely than not to be realized.The Company records a tax benefit for an uncertain tax position using the highest cumulative tax benefit that is more likely than not to berealized. The Company adjusts its liability for unrecognized tax benefits in the period in which it determines the issue is effectively settled,the statute of limitations expires or when more information becomes available. Liabilities for unrecognized tax benefits, including penaltiesand interest, are recorded in Accrued and other current liabilities and Other long-term liabilities on the Company’s Consolidated BalanceSheets.Recently Adopted Financial Accounting Standards - In November 2015, the Financial Accounting Standards Board (the “FASB”) issuedAccounting Standards Update (“ASU”) 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”(“ASU No.2015-17”), which simplifies the presentation of deferred income taxes. ASU No. 2015-17 provides presentation requirements to classifydeferred tax assets and liabilities as noncurrent in a classified statement of financial position. The Company adopted this standard as ofSeptember 28, 2015, with prospective application. The adoption of ASU No. 2015-17 had no impact on the Company’s ConsolidatedStatements of Operations and Comprehensive Income .In April 2015, the FASB issued ASU No. 2015-03: “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of DebtIssuance Costs” (“ASU No. 2015-03”). ASU No. 2015-03 requires debt issuance costs related to a recognized debt liability to be presented inthe balance sheet as a direct deduction from the carrying amount of the related debt liability. Since ASU No. 2015-03 did not addresspresentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements, the FASB issued ASU No. 2015-15:“Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements” (“ASU No. 2015-15”) in August 2015.83Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedASU No. 2015-15 clarifies that debt issuance costs related to line-of-credit arrangements may be presented as an asset and subsequentlyamortized over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-creditarrangement. ASU No. 2015-03 requires retrospective application. The Company elected to adopt ASU No. 2015-03 and ASU No. 2015-15as of December 27, 2015. Prior periods have been retrospectively recast. The adoption of ASU No. 2015-03 and ASU No. 2015-15 had noimpact on the Company’s Consolidated Statements of Operations and Comprehensive Income and resulted in the following reclassification inthe Company’s Consolidated Balance Sheet as of December 28, 2014 (dollars in thousands):Assets: Other current assets, net$(1,826)Other assets, net$(4,220) Liabilities: Current portion of long-term debt, net$(1,826)Long-term debt, net$(4,220)Recently Issued Financial Accounting Standards Not Yet Adopted - In August 2014, the FASB issued ASU No. 2014-15: “Presentation ofFinancial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a GoingConcern” (“ASU No. 2014-15”). ASU No. 2014-15 will explicitly require management to evaluate whether there is substantial doubt aboutan entity’s ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. The new standard isapplicable for all entities and will be effective for the Company in fiscal year 2016. The Company does not expect ASU No. 2014-15 to havea material impact on its financial position, results of operations and cash flows.In May 2014, the FASB issued ASU No. 2014-09 “Revenue Recognition (Topic 606), Revenue from Contracts with Customers” (“ASU No.2014-09”). ASU No. 2014-09 provides a single source of guidance for revenue arising from contracts with customers and supersedes currentrevenue recognition standards. Under ASU No. 2014-09, revenue is recognized in an amount that reflects the consideration an entity expectsto receive for the transfer of goods and services. On July 9, 2015, the FASB agreed to delay the effective date of ASU 2014-09 by one year.As a result, the new guidance will be effective for the Company in fiscal year 2018 and is applied retrospectively to each period presented oras a cumulative effect adjustment at the date of adoption. The Company has not selected a transition method and is evaluating the impact thisguidance will have on its financial position, results of operations and cash flows.Recent accounting guidance not discussed above is not applicable, did not have, or is not expected to have a material impact to the Company.84Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedOut-of-Period Adjustments - In the third quarter of 2015, the Company identified and corrected errors in accounting for the allocation offoreign currency translation adjustments (“CTA”) to Redeemable noncontrolling interests and fair value adjustments for Redeemablenoncontrolling interests. Management evaluated the materiality of the errors from a qualitative and quantitative perspective and concludedthat the errors were immaterial to the current and prior periods. As a result, the Company recorded the cumulative adjustment in itsConsolidated Statement of Stockholders’ Equity and Consolidated Statement of Operations and Comprehensive Income for fiscal year 2015 : FINANCIAL STATMENT LINEITEM IMPACT IMPACT BY PERIOD CUMULATIVEADJUSTMENT FISCAL YEAR (dollars in thousands) 2013 2014 Q1 2015 Q2 2015 Mezzanine equity: Allocation of CTA to redeemable noncontrollinginterests Redeemable noncontrollinginterests $(1,762) $(2,677) $(2,511) $(2,282) $(9,232)Adjustment for the change in the redemption value ofredeemable interests Redeemable noncontrollinginterests 1,715 1,824 1,856 3,276 8,671Net impact to Mezzanine equity $(47) $(853) $(655) $994 $(561) Bloomin’ Brands stockholders’ equity: Allocation of CTA to redeemable noncontrollinginterests Accumulated othercomprehensive loss $1,762 $2,677 $2,511 $2,282 $9,232Adjustment for the change in the redemption value ofredeemable interests Additional paid-in capital (1,715) (1,824) (1,856) (3,276) (8,671)Net impact to Bloomin’ Brands stockholders’ equity $47 $853 $655 $(994) $561 Other comprehensive income (loss): Allocation of CTA to redeemable noncontrollinginterests Comprehensive incomeattributable to Bloomin’ Brands $1,762 $2,677 $2,511 $2,282 $9,232Allocation of CTA to redeemable noncontrollinginterests Comprehensive (loss) incomeattributable to noncontrollinginterests (1,762) (2,677) (2,511) (2,282) (9,232)Net impact to Other comprehensive income $— $— $— $— $—Reclassifications - The Company reclassified certain items in the accompanying consolidated financial statements for prior periods to becomparable with the classification for the current period. These reclassifications had no effect on previously reported net income.3 . AcquisitionsBrazil Joint Venture - In 2013, the Company completed the acquisition of a controlling interest in the Brazil Joint Venture by purchasing 80%of the issued and outstanding capital stock of PGS Par for $110.4 million . As a result of the acquisition, the Company had a 90% interest andthe former equity holders of PGS Par (“Former Equity Holders”) retained a noncontrolling interest of 10% in the Brazil Joint Venture.In connection with the acquisition, the previously-held equity interest was remeasured at fair value. The difference between the fair value andthe carrying value of the equity interest held resulted in a $36.6 million gain for fiscal year 2013. The fair value assigned to the previouslyheld equity investment in the Brazil Joint Venture was determined using the income approach, based on a discounted cash flow methodology.Included in the Company’s operating results for fiscal year 2013 are Revenues of $23.7 million and net income of $0.8 million for the BrazilJoint Venture.85Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedThe following table presents summarized financial information for 100% of the Brazil Joint Venture for the period ending as indicated: FISCAL YEAR(dollars in thousands)2013 (1)Net revenue from sales$215,050Gross profit$148,229Income from continuing operations$26,945Net income$15,382____________________(1)Summarized financial information for fiscal year 2013 includes results for January 1, 2013 to October 31, 2013, when the Brazil Joint Venture was accounted for as anequity method investment.The purchase agreement provides the Former Equity Holders with options to sell their remaining interests to OB Brasil (the “put options”)and provides OB Brasil with options to purchase such remaining interests (the “call options” and together with the put options, the“Options”), in various amounts and at various times from 2015 through 2018, subject to acceleration in certain circumstances. The purchaseprice under each of the Options is based on a multiple of adjusted earnings before interest, taxes, depreciation and amortization of thebusiness, subject to a possible fair market value adjustment. The Options are embedded features within the noncontrolling interest and areclassified within the Company’s Consolidated Balance Sheets as Redeemable noncontrolling interests.In 2015, certain Former Equity Holders exercised options to sell their remaining interests in the Brazil Joint Venture to the Company for totalcash consideration of $0.9 million . This transaction resulted in a reduction of $0.6 million and $0.3 million of Mezzanine equity andAdditional paid-in capital, respectively, during fiscal year 2015 . As a result of the exercise of the options, the Company owned 90.33% of theBrazil Joint Venture as of December 27, 2015 .In connection with the Company’s acquisition of the Brazil Joint Venture, $7.9 million of the Company’s cash was held in escrow forcustomary indemnification obligations. The Former Equity Holders had an equal amount of cash held in escrow. In 2015, the Company andthe Former Equity Holders agreed to release all escrow cash .Acquisition of Limited Partnership Interests - During 2014, the Company purchased the remaining partnership interests in certain of theCompany’s limited partnerships that either owned or had a contractual right to varying percentages of cash flows in 37 Bonefish Grillrestaurants for an aggregate purchase price of $17.2 million . These transactions resulted in a reduction of $11.7 million in Additional paid-incapital in the Company’s Consolidated Statement of Changes in Stockholders’ Equity during fiscal year 2014.The following table sets forth the effect of the acquisition of the limited partnership interests on stockholders’ equity attributable to Bloomin’Brands for fiscal year 2014: NET INCOME ATTRIBUTABLE TOBLOOMIN’ BRANDS ANDTRANSFERS TONONCONTROLLING INTERESTS FISCAL YEAR(dollars in thousands)2014Net income attributable to Bloomin’ Brands$91,090Transfers to noncontrolling interests: Decrease in Bloomin’ Brands additional paid-in capital for purchase of limited partnership interests(11,662)Change from net income attributable to Bloomin’ Brands and transfers to noncontrolling interests$79,428Acquisition of Franchised Restaurants - Effective March 1, 2014, the Company acquired two Bonefish Grill restaurants from a franchisee fora purchase price of $3.2 million , including customary escrow amounts. The Company’s86Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedConsolidated Statements of Operations and Comprehensive Income includes the results of operations for these restaurants from the date ofacquisition. The pro forma impact of the acquisition on prior periods is not presented as the impact was not material to reported results.The Company allocated the purchase price to the assets acquired less the liabilities assumed based on their estimated fair value on the date ofacquisition with the remaining $2.5 million of the purchase price allocated to goodwill. All goodwill recognized is expected to be deductiblefor tax purposes.4 . Impairments, Disposals and Exit CostsThe components of Provision for impaired assets and restaurant closings are as follows: FISCAL YEAR(dollars in thousands)2015 2014 2013Impairment losses U.S.$27,408 $13,822 $19,761International— 12,690 —Corporate746 10,559 —Total impairment losses$28,154 $37,071 $19,761Restaurant closure expenses U.S.$2,460 $7,334 $3,077International6,053 7,676 —Total restaurant closure expenses$8,513 $15,010 $3,077Provision for impaired assets and restaurant closings$36,667 $52,081 $22,838Bonefish Restructuring - On February 12, 2016 , the Company decided to close 14 Bonefish restaurants (“Bonefish Restructuring”). TheCompany expects to substantially complete these restaurant closings through the first quarter of 2019 . In connection with the BonefishRestructuring, the Company reassessed the future undiscounted cash flows of the impacted restaurants, and as a result, the Companyrecognized pre-tax asset impairments of approximately $24.2 million during the thirteen weeks and fiscal year ended December 27, 2015 ,which were recorded within the U.S. segment.The Company currently expects to incur additional charges of approximately $4.5 million to $7.5 million over the next five years , includingcosts associated with lease obligations, employee terminations and other closure related obligations. Following is a summary of estimatedpre-tax expense by type: ESTIMATED EXPENSE(dollars in millions)Lease related liabilities, net of subleases$4.0to$6.0Employee severance and other obligations$0.5to$1.5Total future cash expenditures of $11.0 million to $13.5 million , primarily related to lease liabilities, are expected to occur through October2024 .Restaurant Closure Initiatives - During 2014, the Company decided to close 36 underperforming international locations, primarily in SouthKorea (the “International Restaurant Closure Initiative”). As of December 27, 2015 , 35 of the 36 locations have closed. In connection withthe International Restaurant Closure Initiative, the Company incurred pre-tax impairment, restaurant and other closing costs of $6.0 millionand $19.7 million during fiscal years 2015 and 2014 , respectively, which were recorded within the International segment.The Company expects to incur additional charges of approximately $1.0 million , including costs associated with lease obligations, employeeterminations and other closure related obligations, through the first half of 2016. Future cash87Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continuedexpenditures of $3.0 million to $4.0 million , primarily related to lease liabilities, are expected to occur through the final lease expiration inMarch 2020 .In the fourth quarter of 2013, the Company completed an assessment of its domestic restaurant base and decided to close 22 underperformingdomestic locations (the “Domestic Restaurant Closure Initiative”). In connection with the Domestic Restaurant Closure Initiative, pre-taximpairment, restaurant and other closing costs of $1.6 million , $6.0 million and $18.7 million were incurred during fiscal years 2015 , 2014and 2013 , respectively, which were recorded within the U.S. segment.Following is a summary of expenses related to the Domestic and International Restaurant Closure Initiatives and the Bonefish Restructuringrecognized in the Company’s Consolidated Statements of Operations and Comprehensive Income (dollars in thousands):DESCRIPTION LOCATION OF CHARGE IN THECONSOLIDATED STATEMENT OFOPERATIONS AND COMPREHENSIVEINCOME FISCAL YEAR 2015 2014 2013Property, fixtures and equipmentimpairments Provision for impaired assets and restaurantclosings $24,204 $11,573 $18,695Facility closure and other expenses Provision for impaired assets and restaurantclosings 7,643 14,137 —Severance and other expenses General and administrative 1,858 4,042 —Reversal of deferred rent liability Other restaurant operating (198) (2,911) — $33,507 $26,841 $18,695Following is a summary of the cumulative restaurant closure initiative and Bonefish Restructuring expenses incurred through December 27,2015 (dollars in thousands):DESCRIPTION LOCATION OF CHARGE IN THECONSOLIDATED STATEMENTS OFOPERATIONS AND COMPREHENSIVEINCOME RESTAURANT CLOSURE INITIATIVES AND RESTRUCTURING DOMESTIC BONEFISH INTERNATIONAL TOTALProperty, fixtures andequipment impairments Provision for impaired assets and restaurantclosings $18,695 $24,204 $11,573 $54,472Facility closure and otherexpenses Provision for impaired assets and restaurantclosings 7,574 — 14,206 21,780Severance and otherexpenses General and administrative 1,035 143 4,722 5,900Reversal of deferred rentliability Other restaurant operating (2,078) — (1,031) (3,109) $25,226 $24,347 $29,470 $79,04388Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedThe following table summarizes the Company’s accrual activity related to facility closure and other costs, primarily associated with theDomestic and International Restaurant Closure Initiatives, during fiscal years 2015 and 2014 :(dollars in thousands)2015 2014Beginning of the year$11,000 $2,232Charges10,358 12,644Cash payments(13,814) (4,086)Adjustments (1)(1,845) 210End of the year (2)$5,699 $11,000________________(1)Adjustments to facility closure and other costs represent changes in sublease assumptions and reductions in the Company’s remaining lease obligations.(2)As of December 27, 2015 and December 28, 2014 , the Company had exit-related accruals of $2.0 million and $4.7 million , respectively, recorded in Accrued andother current liabilities and $3.7 million and $6.3 million , respectively, recorded in Other long-term liabilities, net.Roy’s - On January 26, 2015, the Company sold its Roy’s business to United Ohana, LLC (the “Buyer”), for a purchase price of $10.0 million, less certain liabilities, and recognized a loss on sale of $0.9 million , which was recorded in Other expense, net, during fiscal year 2015 . Thesale agreement contained a provision obligating the Company to pay the Buyer up to $5.0 million , if certain lease contingencies were notresolved prior to April 2018 and the Buyer was damaged. In July 2015, these lease contingencies were satisfactorily resolved.In connection with the sale of Roy’s, the Company continues to provide lease guarantees for certain of the Roy’s locations. Under theguarantees, the Company will pay the rental expense over the remaining lease term in the event of default by the Buyer. The fair value andmaximum value of the lease guarantees is nominal. The maximum amount is calculated as the fair value of the lease payments, net ofsublease assumptions, over the remaining lease term.Following the decision in fiscal year 2014 to sell Roy’s, the Company recorded pre-tax impairment charges of $13.4 million for Assets heldfor sale. This impairment charge was recorded in Provision for impaired assets and restaurant closings in the Company’s ConsolidatedStatements of Operations and Comprehensive Income , within the U.S. segment.Following are the components of Roy’s included in the Company’s Consolidated Statements of Operations and Comprehensive Income forthe following periods: FISCAL YEAR(dollars in thousands)2015 (1) 2014 (2) 2013Restaurant sales$5,729 $68,575 $73,945Loss before income taxes$(831) $(13,612) $(1,844)________________(1)Loss before income taxes includes loss on sale of $0.9 million in fiscal year 2015.(2)Loss before income taxes includes impairment charges of $13.4 million in fiscal year 2014 for Assets held for sale.Other Disposals - During 2014, the Company decided to sell both of its corporate airplanes. In connection with this decision, the Companyrecognized pre-tax asset impairment charges of $10.6 million for fiscal year 2014. In fiscal year 2015 , the Company recognized additionalpre-tax asset impairment charges of $0.7 million . The impairment charges are recorded in Provision for impaired assets and restaurantclosings in the Company’s Consolidated Statements of Operations and Comprehensive Income , within Unallocated corporate overheadexpenses. The Company sold its corporate aircraft during 2015 and 2014 for net proceeds of $2.0 million and $2.5 million , respectively.89Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued5. Earnings Per ShareThe Company computes basic earnings per share based on the weighted average number of common shares that were outstanding during theperiod. Diluted earnings per share includes the dilutive effect of common stock equivalents consisting of restricted stock, restricted stockunits, performance-based share units and stock options, using the treasury stock method. Performance-based share units are considereddilutive when the related performance criterion has been met.The following table presents the computation of basic and diluted earnings per share: FISCAL YEAR(in thousands, except per share amounts)2015 2014 2013Net income attributable to Bloomin’ Brands$127,327 $91,090 $208,367 Basic weighted average common shares outstanding122,352 125,139 122,972 Effect of diluted securities: Stock options2,992 3,079 4,902Nonvested restricted stock and restricted stock units216 91 191Nonvested performance-based share units25 8 9Diluted weighted average common shares outstanding125,585 128,317 128,074 Basic earnings per share$1.04 $0.73 $1.69Diluted earnings per share$1.01 $0.71 $1.63Dilutive securities outstanding not included in the computation of earnings per share because their effect was antidilutive were as follows: FISCAL YEAR(shares in thousands)2015 2014 2013Stock options2,670 3,090 1,348Nonvested restricted stock and restricted stock units27 206 126 . Stock-based and Deferred Compensation PlansStock-based Compensation PlansEquity Compensation Plans - The Company’s 2012 Incentive Plan permits the grants of stock options, stock appreciation rights, restrictedstock, restricted stock units, performance awards and other stock-based awards to officers, employees and directors. Upon adoption andapproval of the 2012 Incentive Plan, all of the Company’s previous equity compensation plans were terminated. Existing awards underprevious plans continue to vest in accordance with the original vesting schedule and will expire at the end of their original term.As of December 27, 2015 , the maximum number of shares of common stock available for issuance pursuant to the 2012 Incentive Plan was10,437,661 . On the first business day of each fiscal year, the aggregate number of shares that may be issued under the 2012 Incentive Planautomatically increases by two percent of the total shares then issued and outstanding. All outstanding stock-based compensation awardscontain certain forfeiture provisions.90Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedThe Company recognized stock-based compensation expense as follows: FISCAL YEAR(dollars in thousands)2015 2014 2013Stock options$10,041 $11,946 $11,168Restricted stock and restricted stock units6,758 3,857 2,026Performance-based share units3,596 1,190 663 $20,395 $16,993 $13,857Stock Options - Beginning in August 2012, stock options generally vest and become exercisable over a period of four years in an equalnumber of shares each year. Stock options have an exercisable life of no more than ten years from the date of grant. The Company settlesstock option exercises with authorized but unissued shares of the Company’s common stock. Stock options granted prior to August 2012generally vest and become exercisable over a period of five years in an equal number of shares each year.The following table presents a summary of the Company’s stock option activity for fiscal year 2015 :(in thousands, except exercise price and contractual life)OPTIONS WEIGHTED- AVERAGE EXERCISE PRICE WEIGHTED- AVERAGE REMAINING CONTRACTUAL LIFE (YEARS) AGGREGATE INTRINSIC VALUEOutstanding as of December 28, 20149,777 $11.59 6.2 $120,461Granted1,184 25.26 Exercised(804) 9.58 Forfeited or expired(439) 21.40 Outstanding as of December 27, 20159,718 $12.99 5.6 $59,427Vested and expected to vest as of December 27, 20159,662 $12.93 5.6 $59,417Exercisable as of December 27, 20156,790 $9.21 4.5 $57,226Assumptions used in the Black-Scholes option pricing model and the weighted-average fair value of option awards granted were as followsfor the periods indicated: FISCAL YEAR 2015 2014 2013Assumptions: Weighted-average risk-free interest rate (1)1.64% 1.82% 1.22%Dividend yield (2)1.00% —% —%Expected term (3)6.3 years 6.3 years 6.3 yearsWeighted-average volatility (4)43.4% 48.4% 48.6% Weighted-average grant date fair value per option$10.11 $11.37 $9.14________________(1)Risk-free rate is the U.S. Treasury yield curve in effect as of the grant date for periods within the contractual life of the option.(2)Dividend yield is the level of dividends expected to be paid on the Company’s common stock over the expected term of the option.(3)Expected term represents the period of time that the options are expected to be outstanding. The simplified method of estimating the expected term is used since theCompany does not have significant historical exercise experience for its stock options.(4)Volatility is based on the historical volatilities of the Company’s stock and the stock of comparable peer companies.91Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedThe following represents stock option compensation information for the periods indicated: FISCAL YEAR(dollars in thousands)2015 2014 2013Intrinsic value of options exercised$11,843 $19,474 $42,661Excess tax benefits for tax deductions related to the exercise of stock options$702 $2,405 $4,304Cash received from option exercises, net of tax withholding$7,440 $9,540 $27,786Fair value of stock options vested$26,643 $36,614 $47,468Tax benefits for stock option compensation expense$4,594 $7,576 $4,381 Unrecognized stock option expense$21,060 Remaining weighted-average vesting period2.5 years Restricted Stock and Restricted Stock Units - Restricted stock and restricted stock units generally vest and become exercisable in an equalnumber of shares each year. Restricted stock and restricted stock units issued to members of the Board of Directors (the “Board”) vest over aperiod of three years . For employees, restricted stock and restricted stock units vest over four years . Following is a summary of theCompany’s restricted stock and restricted stock unit activity for fiscal year 2015 :(shares in thousands)NUMBER OFRESTRICTED STOCK& RESTRICTEDSTOCK UNIT AWARDS WEIGHTED-AVERAGE GRANT DATE FAIR VALUE PERAWARDOutstanding as of December 28, 2014946 $20.08Granted606 22.80Vested(271) 19.68Forfeited(136) 21.44Outstanding as of December 27, 20151,145 $21.48The following represents restricted stock and restricted stock unit compensation information as of December 27, 2015 : FISCAL YEAR(dollars in thousands)2015 2014 2013Fair value of restricted stock vested$5,339 $2,680 $1,597Tax benefits for restricted stock compensation expense$2,303 $1,298 $817 Unrecognized restricted stock expense$18,638 Remaining weighted-average vesting period2.8 years Performance-based Share Units - Beginning in 2013, the Company granted performance-based share units (“PSUs”) to certain employees.Typically, the PSUs vest in an equal number of shares over four years. The number of units that vest is determined for each year based on theachievement of certain Company performance criteria as set forth in the award agreement and may range from zero to 200% of the annualtarget grant. The PSUs are settled in shares of common stock, with holders receiving one share of common stock for each performance-basedshare unit that vests. The fair value of PSUs is based on the closing price of the Company’s common stock on the grant date. Compensationexpense for PSUs is recognized over the vesting period when it is probable the performance criteria will be achieved.92Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedAt December 27, 2015 , the following performance-based share unit (“PSUs”) programs were in progress: TARGET NO. OF PSUsREMAINING TO GRANT (1)(shares in thousands) MAXIMUM PAYOUT(AS A % OF TARGETNO. OF PSUs) (2)AWARD DATE PROGRAM 2/26/2013 2013 Program 29 200%4/24/2013 2013 Grant 6 100%2/27/2014 2014 Program 96 200%2/26/2015 2015 Program 179 200%3/2/2015 2015 Int’l Program 15 100% 324 ________________(1)Represents target PSUs awarded under each of the identified programs that have not been granted for accounting purposes. These PSUs do not result in the recognitionof stock-based compensation expense until the performance target has been set by the Board as of the beginning of each fiscal year. There is no effect of these PSUs onthe Company’s basic or diluted shares outstanding.(2)Assumes achievement of target threshold of Adjusted Net Income goals for the Company or Adjusted Earnings Before Interest, Taxes (“Adjusted EBIT”) for therespective concepts for the 2013 Program or 2013 Grant, achievement of target threshold of the Adjusted EPS goal for the Company for the 2014 Program and 2015program. Assumes achievement of target threshold of Adjusted EBIT for certain international markets for the 2015 Programs.The following table presents a summary of the Company’s PSU activity for fiscal year 2015 :(shares in thousands)PERFORMANCE-BASEDSHARE UNITS WEIGHTED-AVERAGEGRANT DATE FAIR VALUE PERAWARDOutstanding as of December 28, 201492 $25.08Granted (1)184 24.23Vested(67) 24.72Forfeited(43) 24.65Outstanding as of December 27, 2015166 $24.11________________(1)Share unit amounts include the number of PSUs at the target threshold in the current period grant and additional shares earned above target due to exceeding priorperiod performance criteria.The following represents PSU compensation information as of December 27, 2015 : FISCAL YEAR(dollars in thousands)2015Tax benefits for PSU compensation expense (1)$636Unrecognized PSU expense$871Remaining weighted-average vesting period0.3 years________________(1)The Company recognized nominal tax benefits for PSU compensation expense during fiscal years 2014 and 2013.Deferred Compensation PlansRestaurant Managing Partners and Chef Partners - Restaurant Managing Partners and Chef Partners are eligible to participate in deferredcompensation programs. The Company invests in various corporate-owned life insurance policies, which are held within an irrevocablegrantor or “rabbi” trust account for settlement of the obligations under the deferred compensation plans. The deferred compensationobligation due to Restaurant Managing and Chef Partners was $133.2 million and $155.6 million as of December 27, 2015 and December 28,2014 , respectively. The unfunded obligation for Restaurant Managing and Chef Partners’ deferred compensation was $74.0 million and$82.6 million as of December 27, 2015 and December 28, 2014 , respectively.93Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedOther Benefit Plans401(k) Plan - The Company has a qualified defined contribution plan that qualifies under Section 401(k) of the Internal Revenue Code of1986, as amended. The Company incurred contribution costs of $3.7 million , $1.1 million and $2.1 million for the 401(k) Plan for fiscalyears 2015 , 2014 and 2013 , respectively.Deferred Compensation Plan - The Company provides a deferred compensation plan for its highly compensated employees who are noteligible to participate in the 401(k) Plan. The deferred compensation plan allows these employees to contribute a percentage of their basesalary and cash bonus on a pre-tax basis. The deferred compensation plan is unfunded and unsecured.7 . Other Current Assets, NetOther current assets, net, consisted of the following:(dollars in thousands)DECEMBER 27, 2015 DECEMBER 28,2014 (1)Prepaid expenses$30,373 $30,260Accounts receivable - gift cards, net115,926 90,090Accounts receivable - vendors, net10,310 20,582Accounts receivable - franchisees, net1,149 1,159Accounts receivable - other, net21,158 23,846Other current assets, net19,131 38,865 $198,047 $204,802________________(1)The Company elected to adopt ASU No. 2015-03 and ASU No. 2015-15 as of December 27, 2015 resulting in the reclassification of certain unamortized deferredfinancing fees from Other current assets, net to the Current portion of long-term debt, net in the Company’s Consolidated Balance Sheet as of December 28, 2014 . SeeNote 2 - Summary of Significant Accounting Policies for additional detail regarding the adoption of these standards.8. Property, Fixtures and Equipment, NetProperty, fixtures and equipment, net, consisted of the following:(dollars in thousands)DECEMBER 27, 2015 DECEMBER 28, 2014Land$256,906 $262,141Buildings and building improvements1,043,699 998,787Furniture and fixtures392,849 368,638Equipment543,842 531,117Leasehold improvements492,628 457,623Construction in progress23,842 46,025Less: accumulated depreciation(1,159,306) (1,035,020) $1,594,460 $1,629,311At December 27, 2015 , the Company leased $16.6 million and $23.9 million , respectively, of certain land and buildings to third parties.Accumulated depreciation related to the leased building assets of $6.9 million is included in Property, fixtures and equipment as ofDecember 27, 2015 .94Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedDepreciation and repair and maintenance expense is as follows for the periods indicated: FISCAL YEAR(dollars in thousands)2015 2014 2013Depreciation expense$178,855 $177,504 $156,015Repair and maintenance expense107,960 108,392 103,6139 . Goodwill and Intangible Assets, NetGoodwill - The following table is a rollforward of goodwill:(dollars in thousands)U.S. INTERNATIONAL CONSOLIDATEDBalance as of December 31, 2013$170,271 $181,847 $352,118Acquisitions2,461 — 2,461Translation adjustments— (13,018) (13,018)Disposals(21) — (21)Balance as of December 28, 2014$172,711 $168,829 $341,540Translation adjustments— (40,679) (40,679)Balance as of December 27, 2015$172,711 $128,150 $300,861The following table is a summary of the Company’s gross goodwill balances and accumulated impairments as of the periods indicated: DECEMBER 27, 2015 DECEMBER 28, 2014 DECEMBER 31, 2013(dollars inthousands)GROSS CARRYINGAMOUNT ACCUMULATEDIMPAIRMENTS GROSS CARRYINGAMOUNT ACCUMULATEDIMPAIRMENTS GROSS CARRYINGAMOUNT ACCUMULATEDIMPAIRMENTSU.S.$840,881 $(668,170) $840,881 $(668,170) $838,441 $(668,170)International244,616 (116,466) 285,295 (116,466) 298,313 (116,466)Total goodwill$1,085,497 $(784,636) $1,126,176 $(784,636) $1,136,754 $(784,636)The Company performs its annual assessment for impairment of goodwill and other indefinite-lived intangible assets each year during thesecond quarter. The Company did not record any goodwill asset impairment charges during fiscal years 2015 , 2014 or 2013 .95Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedIntangible Assets, net - Intangible assets, net, consisted of the following as of December 27, 2015 and December 28, 2014 : WEIGHTEDAVERAGEAMORTIZATIONPERIOD (IN YEARS) DECEMBER 27, 2015 DECEMBER 28, 2014(dollars inthousands) GROSSCARRYINGVALUE ACCUMULATEDAMORTIZATION NETCARRYINGVALUE GROSSCARRYINGVALUE ACCUMULATEDAMORTIZATION NETCARRYINGVALUETrade namesIndefinite $414,000 $414,000 $414,000 $414,000Trademarks13 82,131 $(32,662) 49,469 83,991 $(30,656) 53,335Favorable leases8 80,909 (42,882) 38,027 87,655 (43,083) 44,572Franchiseagreements5 14,881 (9,777) 5,104 14,881 (8,633) 6,248Reacquiredfranchise rights12 46,447 (7,745) 38,702 70,023 (6,072) 63,951Other intangibles1 9,099 (7,564) 1,535 9,099 (5,773) 3,326Total intangibleassets10 $647,467 $(100,630) $546,837 $679,649 $(94,217) $585,432The Company did not record any indefinite-lived intangible asset impairment charges during fiscal years 2015 , 2014 or 2013 .Definite-lived intangible assets are amortized on a straight-line basis. The following table presents the aggregate expense related to theamortization of the Company’s trademarks, favorable leases, franchise agreements, reacquired franchise rights and other intangibles: FISCAL YEAR(dollars in thousands)2015 2014 2013Amortization expense (1)$16,852 $19,807 $14,405________________(1)Amortization expense is recorded in Depreciation and amortization and Other restaurant operating expense in the Company’s Consolidated Statements of Operationsand Comprehensive Income .The following table presents expected annual amortization of intangible assets as of December 27, 2015 :(dollars in thousands) 2016$15,058201713,087201812,725201912,405202011,673Effective June 1, 2014, OSI and Carrabba’s Italian Grill, LLC (“Carrabba’s”), a wholly owned subsidiary of OSI, entered into a ThirdAmendment to the Royalty Agreement with the founders of Carrabba’s Italian Grill and their affiliated entities (collectively, the “Carrabba’sFounders”). The amendment provides that no continuing royalty fee will be paid to the Carrabba’s Founders for Carrabba’s restaurantslocated outside the United States. Each Carrabba’s restaurant located outside the United States will pay a one-time lump sum royalty fee,which varies depending on the size of the restaurant. The one-time fee is $100,000 for restaurants 5,000 square feet or larger, $75,000 forrestaurants 3,500 square feet or larger but less than 5,000 square feet and $50,000 for restaurants less than 3,500 square feet. In connectionwith the amendment, the Company made a non-refundable payment of $1.0 million to the Carrabba’s Founders for the first ten restaurants of5,000 square feet or more to be located outside the United States. The payment to the Carrabba’s Founders was recorded as a trade name inIntangible Assets, net, in the Company’s Consolidated Balance Sheet.96Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedIn addition, new Carrabba’s restaurants in the U.S. that first opened on or after June 1, 2014 pay a fixed royalty of 0.5 percent on salesoccurring prior to 4 pm local time Monday through Saturday. Existing Carrabba’s restaurants in the U.S. that began serving weekday lunchon or after June 1, 2014 pay a fixed royalty of 0.5 percent on sales occurring prior to 4 pm local time Monday through Friday. In each case,these sales will be excluded in calculating the volume based royalty percentage on sales after 4 pm.10. Other Assets, NetOther assets, net, consisted of the following:(dollars in thousands)DECEMBER 27, 2015 DECEMBER 28,2014 (2)Company-owned life insurance$68,950 $64,067Deferred financing fees (1)3,730 2,697Liquor licenses27,869 27,844Other assets47,322 57,135 $147,871 $151,743________________(1)Net of accumulated amortization of $2.2 million and $1.2 million at December 27, 2015 and December 28, 2014 , respectively.(2)The Company elected to adopt ASU No. 2015-03 and ASU No. 2015-15 as of December 27, 2015 resulting in the reclassification of certain unamortized deferredfinancing fees from Other assets, net to Long-term debt, net in the Company’s Consolidated Balance Sheet as of December 28, 2014 . See Note 2 - Summary ofSignificant Accounting Policies for additional detail regarding the adoption of these standards.11. Accrued and Other Current LiabilitiesAccrued and other current liabilities consisted of the following:(dollars in thousands)DECEMBER 27, 2015 DECEMBER 28, 2014Accrued payroll and other compensation$95,994 $121,548Accrued insurance20,824 19,455Other current liabilities89,793 105,240 $206,611 $246,243Accrued Payroll Taxes - During 2013, the IRS informed the Company that it proposed to issue an audit adjustment for the employer’s shareof FICA taxes related to cash tips allegedly received and unreported by the Company’s tipped employees during calendar year 2010.Subsequently, the IRS indicated that the scope of the proposed adjustment would expand to include the 2011 and 2012 periods. During 2014,the Company settled the calendar year 2010 audit adjustment for $5.0 million . In 2015, the Company settled the calendar year 2011 and 2012audit adjustments for $6.4 million . As of December 27, 2015 and December 28, 2014 , the Company had $3.1 million and $12.0 million ,respectively, recorded in Accrued and other current liabilities in its Consolidated Balance Sheets for payroll tax audits.97Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued12 . Long-term Debt, NetFollowing is a summary of outstanding long-term debt: DECEMBER 27, 2015 DECEMBER 28, 2014(dollars in thousands)OUTSTANDINGBALANCE INTEREST RATE OUTSTANDINGBALANCE INTEREST RATESenior Secured Credit Facility: Term loan A (1)$277,500 2.26% $296,250 2.16%Term loan A-1150,000 2.34% — —%Term loan B— —% 225,000 3.50%Revolving credit facility (1) (2)432,000 2.29% 325,000 2.16%Total Senior Secured Credit Facility859,500 846,250 2012 CMBS loan: First mortgage loan (1)289,588 4.13% 299,765 4.08%First mezzanine loan84,028 9.00% 85,127 9.00%Second mezzanine loan85,353 11.25% 86,067 11.25%Total 2012 CMBS loan458,969 470,959 Capital lease obligations2,632 634 Other long-term debt2,292 0.73% to 7.60% 4,073 0.52% to 7.00%Less: unamortized debt discount(3,061) (6,073) Less: unamortized debt issuance costs(3,468) (6,046) Total debt, net1,316,864 1,309,797 Less: current portion of long-term debt, net(31,853) (24,138) Long-term debt, net$1,285,011 $1,285,659 ________________(1)Represents the weighted-average interest rate for the respective period.(2)Subsequent to December 27, 2015 , the Company made payments of $70.0 million on its revolving credit facility. On February 11, 2016, the Company drew $185.0million . The drawdowns, together with the proceeds from the PRP Mortgage Loan, were used to prepay a portion, and fully defease the remainder, of the 2012 CMBSloan. See Note 22 - Subsequent Events for additional details regarding the PRP Mortgage Loan.Bloomin’ Brands, Inc. is a holding company and conducts its operations through its subsidiaries, certain of which have incurred indebtednessas described below.Credit Agreement Amendments - On May 16, 2014, OSI completed a refinancing of its senior secured credit facility and entered into the ThirdAmendment (“Third Amendment”) to its existing credit agreement, dated October 26, 2012 (as amended, the “Credit Agreement”). TheCredit Agreement, provided for senior secured financing (the “Senior Secured Credit Facility”) of up to $1.125 billion , initially consisting ofa $300.0 million Term loan A, a $225.0 million Term loan B and a $600.0 million revolving credit facility, including letter of credit andswing line loan sub-facilities. The Term loan A and revolving credit facility mature May 16, 2019 . The Term loan A was issued with adiscount of $2.9 million .At closing, $400.0 million was drawn under the revolving credit facility. The proceeds of the Term loan A and the loans made at closingunder the revolving credit facility were used to pay down a portion of Term loan B under the Credit Agreement. The total indebtedness of theCompany remained unchanged as a result of the refinancing.On March 31, 2015, OSI entered into the Fourth Amendment to its Credit Agreement (the “Fourth Amendment”), to effect an increase ofOSI’s existing revolving credit facility from $600.0 million to $825.0 million in order to fully pay down its existing Term loan B on April 2,2015. No other material changes were made to the terms of OSI’s Credit Agreement as a result of the Fourth Amendment.98Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedOSI entered into the Fifth Amendment to its Credit Agreement (the “Fifth Amendment”) on December 11, 2015. The Fifth Amendmentprovided an incremental Term loan A-1 in an aggregate principal amount of $150.0 million , increased certain leverage ratio tests forpurposes of restricted payments and mandatory prepayments and made certain other revisions to the terms of the Credit Agreement asdiscussed below under Debt Covenants and Other Restrictions .The Company may elect an interest rate for the Credit Agreement at each reset period based on the Base Rate or the Eurocurrency Rate. TheBase Rate option is the highest of: (i) the prime rate of Wells Fargo Bank, National Association , (ii) the federal funds effective rate plus 0.5of 1.0% or (iii) the Eurocurrency rate with a one-month interest period plus 1.0% (the “Base Rate”). The Eurocurrency Rate option is theseven , 30 , 60 , 90 or 180-day Eurocurrency rate (“Eurocurrency Rate”). The interest rates are as follows: BASE RATE ELECTION EUROCURRENCY RATE ELECTIONTerm loan A, Term loan A-1 and revolving credit facility75 to 125 basis points over Base Rate 175 to 225 basis points over the Eurocurrency RateFees on letters of credit and the daily unused availability under the revolving credit facility as of December 27, 2015 , were 2.13% and 0.30%, respectively. As of December 27, 2015 , $29.3 million of the revolving credit facility was committed for the issuance of letters of credit andnot available for borrowing.Substantially all of the assets of the Company’s domestic OSI subsidiaries collateralize the Senior Secured Credit Facility.Commercial Mortgage-Backed Securities Loan - Effective March 27, 2012, PRP and two of the Company’s other indirect wholly-ownedsubsidiaries entered into a commercial mortgage-backed securities loan (the “2012 CMBS loan”) with German American Capital Corporationand Bank of America, N.A. The 2012 CMBS loan totaled $500.0 million at origination and was originally comprised of a first mortgage loanin the amount of $324.8 million , collateralized by 261 of the Company’s properties, and two mezzanine loans totaling $175.2 million . Theloans have a maturity date of April 10, 2017 .The first mortgage loan has five fixed-rate components and a floating rate component. The fixed-rate components bear interest at ratesranging from 2.37% to 6.81% per annum. The floating rate component bears interest at a rate per annum equal to the 30-day LondonInterbank Offered Rate (“ 30-day LIBOR ”), (with a floor of 1% ) plus 2.37% . The first mezzanine loan bears interest at a rate of 9.00% perannum, and the second mezzanine loan bears interest at a rate of 11.25% per annum.Subsequent to December 27, 2015 , the Company extinguished the 2012 CMBS loan and PRP entered into a mortgage loan (the “PRPMortgage Loan”). See Note 22 - Subsequent Events for additional details regarding the PRP Mortgage Loan.Debt Covenants and Other Restrictions - Borrowings under the Company’s debt agreements are subject to various covenants that limit theCompany’s ability to: incur additional indebtedness; make significant payments; sell assets; pay dividends and other restricted payments;acquire certain assets; effect mergers and similar transactions; and effect certain other transactions with affiliates. The Credit Agreement alsohas a financial covenant to maintain a specified quarterly Total Net Leverage Ratio (“TNLR”). TNLR is the ratio of Consolidated Total Debt(Current portion of long-term debt and Long-term debt, net) to Consolidated EBITDA (earnings before interest, taxes, depreciation andamortization and certain other adjustments). The TNLR may not exceed a level set at 5.00 to 1.00 through fiscal 2017, with a step down to amaximum level of 4.75 to 1.00 in fiscal 2018 and thereafter.The Fifth Amendment permits regular quarterly dividend payments, subject to certain restrictions, and permits loans or advances to repaydebt under the 2012 CMBS loan in an aggregate principal amount of $500.0 million .At December 27, 2015 and December 28, 2014 , the Company was in compliance with its debt covenants.99Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedLoss on Extinguishment and Modification of Debt - Following is a summary of loss on extinguishment and modification of debt recorded inthe Company’s Consolidated Statements of Operations and Comprehensive Income : FISCAL YEAR(dollars in thousands)2015 (1) 2014 (2) 2013 (3)Refinancing of Senior Secured Credit Facility$2,956 $11,092 $—Repricing of Term loan B— — 14,586Loss on extinguishment and modification of debt$2,956 $11,092 $14,586________________(1)The loss was comprised of write-offs of $1.4 million of deferred financing fees, $1.2 million of unamortized debt discount and third-party financing costs of $0.3million .(2)The loss was comprised of write-offs of $5.5 million of deferred financing fees and $4.9 million of unamortized debt discount and a prepayment penalty of $0.7million .(3)The loss was comprised of a prepayment penalty of $9.8 million , third-party financing costs of $2.4 million and the write-down of $1.2 million each of deferredfinancing fees and unamortized debt discount.Deferred financing fees - The Company deferred $2.0 million and $3.8 million of financing costs incurred in connection with the amendmentsto the Credit Agreement in fiscal years 2015 and 2014, respectively. Following is a summary of the Company’s deferred financing costsrecorded during the periods indicated and their classification on the Consolidated Balance Sheets : FISCAL YEAR 2015 FISCAL YEAR 2014 CONSOLIDATED BALANCE SHEETCLASSIFICATION(dollars in thousands)FIFTH AMENDMENT FOURTH AMENDMENT THIRD AMENDMENT Revolving credit facility$— $1,260 $2,507 Other assets, netTerm loan A— — 1,253 Long-term debt, netTerm loan A-1750 — — Long-term debt, net $750 $1,260 $3,760 Maturities - Following is a summary of principal payments of the Company’s total consolidated debt outstanding as of December 27, 2015 :(dollars in thousands)DECEMBER 27, 2015Year 1$31,853Year 2479,176Year 336,985Year 4766,507Year 5439Thereafter1,904Total (1)$1,316,864________________(1)See Note 22 - Subsequent Events for additional details regarding the payment schedule for the PRP Mortgage Loan.The following is a summary of required amortization payments for Term loan A and Term loan A-1 (dollars in thousands):SCHEDULED QUARTERLY PAYMENT DATES TERM LOAN A TERM LOAN A-1March 31, 2016 through June 30, 2016 $3,750 $1,875September 30, 2016 through June 30, 2018 $5,625 $2,813September 30, 2018 through March 31, 2019 $7,500 $3,750The Credit Agreement contains mandatory prepayment requirements for Term loan A and Term loan A-1. The Company100Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continuedis required to prepay outstanding amounts under its Term loan A and Term loan A-1 with 50% of its annual excess cash flow, as defined inthe Credit Agreement. The amount of outstanding Term loan A and Term loan A-1 required to be prepaid in accordance with the debtcovenants may vary based on the Company’s leverage ratio and year end results.13. Other Long-term Liabilities, NetOther long-term liabilities, net, consisted of the following:(dollars in thousands)DECEMBER 27, 2015 DECEMBER 28, 2014Accrued insurance liability$40,649 $42,922Unfavorable leases, net of accumulated amortization45,375 49,492Chef and Restaurant Managing Partner deferred compensation obligations and deposits134,470 160,330Deferred gain on sale-leaseback transaction, net of accumulated amortization33,154 35,864Other long-term liabilities41,014 41,563 $294,662 $330,171During fiscal years 2014 and 2013, the Company terminated the split-dollar agreements with certain of its former executive officers for cashpayments of $2.0 million and $5.2 million , respectively. Upon termination, the release of the death benefit and related liabilities less theassociated cash termination payment resulted in net gains of $1.9 million and $4.7 million during fiscal years 2014 and 2013, respectively,which were recorded in General and administrative expenses in the Company’s Consolidated Statements of Operations and ComprehensiveIncome . As a result of the terminations, the Company became the sole and exclusive owner of the related split-dollar insurance policies andelected to cancel them.14. Redeemable Noncontrolling InterestsThe Company consolidates subsidiaries in Brazil and China, each of which have noncontrolling interests that are permitted to deliversubsidiary shares in exchange for cash at a future date. The following table presents a rollforward of Redeemable noncontrolling interests forfiscal years 2015 and 2014 : FISCAL YEAR(dollars in thousands)2015 2014Balance, beginning of period$24,733 $21,984Change in redemption value of Redeemable noncontrolling interests2,877 —Net income attributable to Redeemable noncontrolling interests1,005 666Contributions by noncontrolling shareholders— 1,456Foreign currency translation attributable to Redeemable noncontrolling interests(3,944) —Purchase of Redeemable noncontrolling interests (1)(584) —Transfer to redeemable noncontrolling interest— 627Out-of period adjustment - foreign currency translation attributable to Redeemable noncontrolling interests (2)(9,232) —Out-of period adjustment - change in redemption value of Redeemable noncontrolling interests (2)8,671 —Balance, end of period$23,526 $24,733________________(1)In April 2015, certain former equity holders of PGS Par exercised options to sell their remaining interests in the Brazil Joint Venture. See Note 3 - Acquisitions forfurther information.(2)In the third quarter of 2015, the Company identified and corrected errors in accounting for the allocation of foreign currency translation adjustments to Redeemablenoncontrolling interests and fair value adjustments for Redeemable noncontrolling interests. See Note 2 - Summary of Significant Accounting Policies for furtherdetails.101Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued15 . Stockholders’ Equity Secondary Public Offering - In March 2015, Bain Capital Partners, LLC (“Bain Capital”) sold its remaining shares of the Company’scommon stock through an underwritten secondary public offering. The selling stockholders received all of the proceeds from the offering.Pursuant to the underwriting agreement for the secondary public offering, the Company repurchased from the underwriters 2,759,164 of theshares sold by Bain Capital at a cost of $70.0 million .Share Repurchases - In December 2014, the Board approved a share repurchase program (the “2014 Share Repurchase Program”) underwhich the Company was authorized to repurchase up to $100.0 million of its outstanding common stock. As of December 27, 2015 , noshares remained available for purchase under the 2014 Share Repurchase Program.In August 2015, the Board approved a new share repurchase program (the “2015 Share Repurchase Program”) under which the Company isauthorized to repurchase up to $100.0 million of its outstanding common stock.On February 12, 2016, the Company’s Board of Directors canceled the remaining $30.0 million of authorization under the 2015 ShareRepurchase Program and approved a new $250.0 million authorization (the “2016 Share Repurchase Program”). The 2016 Share RepurchaseProgram will expire on August 12, 2017 .Following is a summary of the shares repurchased under the Company’s share repurchase programs: NUMBER OF SHARES (in thousands) AVERAGE REPURCHASEPRICE PER SHARE AMOUNT (dollars in thousands)Thirteen weeks ended March 29, 2015 (1)2,759 $25.37 $70,000Thirteen weeks ended June 28, 20151,370 $21.90 30,000Thirteen weeks ended September 27, 20152,914 $20.59 59,999Thirteen weeks ended December 27, 2015602 $16.60 10,000Total common stock repurchases7,645 $22.24 $169,999________________(1)Includes the repurchase of $70.0 million of the Company’s common stock in connection with the secondary public offering by Bain Capital in March 2015.Dividends - The Company declared and paid dividends per share during the periods presented as follows: DIVIDENDS PER SHARE AMOUNT (dollars in thousands)Thirteen weeks ended March 29, 2015$0.06 $7,423Thirteen weeks ended June 28, 20150.06 7,391Thirteen weeks ended September 27, 20150.06 7,333Thirteen weeks ended December 27, 20150.06 7,185Total cash dividends declared and paid$0.24 $29,332In February 2016, the Board declared a quarterly cash dividend of $0.07 per share, payable on March 10, 2016 to shareholders of record at theclose of business on February 29, 2016 .102Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedAccumulated Other Comprehensive Loss - Following are the components of Accumulated other comprehensive loss (“AOCL”):(dollars in thousands)DECEMBER 27, 2015 DECEMBER 28, 2014Foreign currency translation adjustment$(141,176) $(58,149)Unrealized losses on derivatives, net of tax(6,191) (2,393)Accumulated other comprehensive loss$(147,367) $(60,542)Following are the components of Other comprehensive (loss) income during the periods presented: FISCAL YEAR(dollars in thousands)2015 2014 2013Bloomin’ Brands, Inc.: Foreign currency translation adjustment$(92,259) $(31,731) $(17,597)Out-of period adjustment - foreign currency translation (1)9,232 — —Total foreign currency translation adjustment$(83,027) $(31,731) $(17,597)Unrealized losses on derivatives, net of tax (2)$(6,033) $(2,393) $—Reclassification of adjustment for loss on derivatives included in net income, net of tax (3)2,235 — —Total unrealized losses on derivatives, net of tax$(3,798) $(2,393) $—Reclassification of accumulated foreign currency translation adjustment for previously held equityinvestment— — 5,980Other comprehensive loss attributable to Bloomin’ Brands, Inc.$(86,825) $(34,124) $(11,617) Non-controlling interests: Foreign currency translation adjustment$9 $— $—Other comprehensive income attributable to Non-controlling interests$9 $— $— Redeemable non-controlling interests: Foreign currency translation adjustment$(3,944) $— $—Out-of period adjustment - foreign currency translation (1)(9,232) — —Total foreign currency translation adjustment$(13,176) $— $—Other comprehensive (loss) attributable to Redeemable non-controlling interests$(13,176) $— $—________________(1)In the third quarter of 2015, the Company identified and corrected errors in accounting for the allocation of foreign currency translation adjustments to Redeemablenoncontrolling interests. See Note 2 - Summary of Significant Accounting Policies for further details.(2)Amounts attributable to Bloomin’ Brands, Inc. are net of tax benefit of $3.9 million and $1.5 million for the fiscal years 2015 and 2014 , respectively.(3)Amounts attributable to Bloomin’ Brands, Inc. are net of tax benefit of $1.4 million for fiscal year 2015 .Noncontrolling Interests - In 2015, certain former equity holders of PGS Par contributed approximately $3.2 million to the Company for anoncontrolling interest in a new concept in Brazil (Abbraccio).16 . Derivative Instruments and Hedging ActivitiesInterest Rate Risk - The Company is exposed to certain risk arising from both its business operations and economic conditions. The Companymanages economic risks, including interest rate, primarily by managing the amount, sources and duration of its debt funding and through theuse of derivative financial instruments. The Company’s objectives in using interest rate derivatives are to add stability to interest expense andto manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps.103Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedCurrency Exchange Rate Risk - The Company is exposed to foreign currency exchange rate risk arising from transactions and balancesdenominated in currencies other than the U.S. dollar. The Company may use foreign currency forward contracts to manage certain foreigncurrency exposures.DESIGNATED HEDGESCash Flow Hedges of Interest Rate Risk - On September 9, 2014 , the Company entered into variable-to-fixed interest rate swap agreementswith eight counterparties to hedge a portion of the cash flows of the Company’s variable rate debt. The swap agreements have an aggregatenotional amount of $400.0 million , a start date of June 30, 2015 , and mature on May 16, 2019 . Under the terms of the swap agreements, theCompany pays a weighted-average fixed rate of 2.02% on the $400.0 million notional amount and receive payments from the counterpartybased on the 30-day LIBOR rate.The interest rate swaps, which have been designated and qualify as a cash flow hedge, are recognized on the Company’s ConsolidatedBalance Sheets at fair value and are classified based on the instruments’ maturity dates. Fair value changes in the interest rate swaps arerecognized in AOCL for all effective portions. Balances in AOCL are subsequently reclassified to earnings in the same period that the hedgedinterest payments affect earnings. The Company estimates $5.5 million will be reclassified to interest expense over the next twelve months.The following table presents the fair value of the Company’s interest rate swaps as well as their classification on the Company’s ConsolidatedBalance Sheet:(dollars in thousands)DECEMBER 27, 2015 DECEMBER 28, 2014 CONSOLIDATED BALANCE SHEETCLASSIFICATIONInterest rate swaps - liability$5,142 $2,617 Accrued and other current liabilitiesInterest rate swaps - liability5,007 1,307 Other long-term liabilities, netTotal fair value of derivative instruments (1)$10,149 $3,924 Accrued interest$556 $— Accrued and other current liabilities____________________(1) See Note 17 - Fair Value Measurements for fair value discussion of the interest rate swaps.The following table summarizes the effects of the interest rate swaps on Net income for the period indicated: FISCAL YEAR(dollars in thousands)2015Interest rate swap expense recognized in Interest expense, net (1)$(3,664)Income tax benefit recognized in Provision (benefit) for income taxes1,429Total effects of the interest rate swaps on Net income$(2,235)____________________(1)During fiscal years 2015 and 2014 , the Company did not recognize any gain or loss as a result of hedge ineffectiveness.The Company records its derivatives on the Consolidated Balance Sheets on a gross balance basis. The Company’s interest rate swaps aresubject to master netting arrangements. As of December 27, 2015 , the Company did not have more than one derivative between the samecounterparties and as such, there was no netting.By utilizing the interest rate swaps, the Company is exposed to credit-related losses in the event that the counterparty fails to perform underthe terms of the derivative contract. To mitigate this risk, the Company enters into derivative contracts with major financial institutions basedupon credit ratings and other factors. The Company continually assesses the creditworthiness of its counterparties. As of December 27, 2015and December 28, 2014 , all counterparties to the interest rate swaps had performed in accordance with their contractual obligations.104Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedThe Company has agreements with each of its derivative counterparties that contain a provision where the Company could be declared indefault on its derivative obligations if the repayment of the underlying indebtedness is accelerated by the lender due to the Company’s defaulton indebtedness.As of December 27, 2015 and December 28, 2014 , the fair value of the Company’s interest rate swaps in a net liability position, whichincludes accrued interest but excludes any adjustment for nonperformance risk, was $10.9 million and $4.0 million , respectively. As ofDecember 27, 2015 and December 28, 2014 , the Company has not posted any collateral related to these agreements. If the Company hadbreached any of these provisions as of December 27, 2015 and December 28, 2014 , it could have been required to settle its obligations underthe agreements at their termination value of $10.9 million and $4.0 million , respectively.NON-DESIGNATED HEDGESNon-deliverable Foreign Currency Forward Contracts - During the fourth quarter of 2015, the Company entered into non-deliverable foreigncurrency forward contracts to partially offset the foreign currency exchange gains and losses generated by the remeasurement of certain assetsand liabilities denominated in non-functional currencies. As of December 27, 2015, the Company had $68.5 million of outstanding notionalamounts relating to its foreign currency forward contracts. The Company’s foreign currency forward contracts are subject to master nettingarrangements.Interest Rate Cap - Historically, the Company has been required to maintain an interest rate cap to limit the volatility of the floating ratecomponent of the first mortgage loan within the 2012 CMBS loan. In April 2014, the Company’s rate cap expired. In connection with theexpiration of the rate cap, the Company entered into a replacement rate cap (the “Replacement Rate Cap”), with a notional amount of $48.7million . Under the Replacement Rate Cap, if the 30-day LIBOR rate exceeds 7.00% per annum, the counterparty must pay to the Companysuch excess on the notional amount of the floating rate component. Changes in the fair value of the Replacement Rate Cap were nominal forfiscal years 2015 and 2014 .Commodities - The Company’s restaurants are dependent upon energy to operate and are impacted by changes in energy prices, includingnatural gas. The Company utilizes derivative instruments with a notional amount of $1.5 million to mitigate some of its overall exposure tomaterial increases in natural gas.The following table presents the fair value of the Company’s non-designated derivative instruments as well as their classification on itsConsolidated Balance Sheets:(dollars in thousands)DECEMBER 27, 2015 DECEMBER 28, 2014 CONSOLIDATED BALANCE SHEETCLASSIFICATIONDerivative assets: Foreign currency forward contracts$59 $— Other current assets, net Derivative liabilities: Foreign currency forward contracts$703 $— Accrued and other current liabilitiesCommodities583 566 Accrued and other current liabilities $1,286 $566 105Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedThe following table summarizes the effects of non-designated derivative instruments on Net income for the periods indicated: CONSOLIDATED STATEMENT OFOPERATIONS AND COMPREHENSIVE INCOMECLASSIFICATION FISCAL YEAR(in thousands) 2015 2014 2013Foreign currency forward contractsGeneral and administrative $(644) $— $—CommoditiesOther restaurant operating expense (455) (629) (59)Total $(1,099) $(629) $(59)17 . Fair Value MeasurementsFair Value Measurements on a Recurring Basis - The following table presents the Company’s financial assets and liabilities measured at fairvalue by hierarchy level on a recurring basis as of December 27, 2015 and December 28, 2014 : DECEMBER 27, 2015 DECEMBER 28, 2014(dollars in thousands)TOTAL LEVEL 1 LEVEL 2 TOTAL LEVEL 1 LEVEL 2Assets: Cash equivalents: Fixed income funds$6,333 $6,333 $— $4,602 $4,602 $—Money market funds7,168 7,168 — 7,842 7,842 —Restricted cash equivalents: Fixed income funds551 551 — — — —Money market funds2,681 2,681 — 3,360 3,360 —Other current assets, net: Derivative instruments - foreign currency forwardcontracts59 — 59 — — —Total asset recurring fair value measurements$16,792 $16,733 $59 $15,804 $15,804 $— Liabilities: Accrued and other current liabilities: Derivative instruments - interest rate swaps$5,142 $— $5,142 $2,617 $— $2,617Derivative instruments - commodities583 — 583 566 — 566Derivative instruments - foreign currency forwardcontracts703 — 703 — — —Other long-term liabilities: Derivative instruments - interest rate swaps5,007 — 5,007 1,307 — 1,307Total liability recurring fair value measurements$11,435 $— $11,435 $4,490 $— $4,490Fair value of each class of financial instrument is determined based on the following:FINANCIAL INSTRUMENT METHODS AND ASSUMPTIONSFixed income funds andMoney market funds Carrying value approximates fair value because maturities are less than three months.Derivative instruments The Company’s derivative instruments include interest rate swaps, interest rate caps, foreign currency forward contracts andcommodities. Fair value measurements are based on the contractual terms of the derivatives and use observable market-based inputs. Theinterest rate swaps are valued using a discounted cash flow analysis on the expected cash flows of each derivative using observable inputsincluding interest rate curves and credit spreads. The foreign currency forwards are valued by comparing the contracted forwardexchange rate to the current market exchange rate. Key inputs for the valuation of the foreign currency forwards are spot rates, foreigncurrency forward rates, and the interest rate curve of the domestic currency. The Company incorporates credit valuation adjustments toreflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. As ofDecember 27, 2015 and December 28, 2014, the Company has determined that the credit valuation adjustments are not significant to theoverall valuation of its derivatives.106Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedFair Value Measurements on a Nonrecurring Basis - Assets and liabilities that are measured at fair value on a nonrecurring basis relateprimarily to property, fixtures and equipment, goodwill and other intangible assets, which are remeasured when carrying value exceeds fairvalue. The following table summarizes the fair value remeasurements for Assets held for sale and Property, fixtures and equipment for fiscalyears 2015 , 2014 and 2013 aggregated by the level in the fair value hierarchy within which those measurements fall: 2015 2014 2013(dollars in thousands)CARRYING VALUE TOTALIMPAIRMENT CARRYING VALUE TOTALIMPAIRMENT CARRYING VALUE TOTALIMPAIRMENTAssets held for sale (1)$4,136 $1,028 $9,613 $23,974 $— $—Property, fixtures andequipment (2)3,634 27,126 2,429 13,097 9,990 19,761 $7,770 $28,154 $12,042 $37,071 $9,990 $19,761________________(1)Carrying value approximates fair value with all assets measured using Level 2 inputs. Third-party market appraisals (Level 2) and purchase contracts (Level 2) wereused to estimate the fair value. Refer to Note 4 - Impairments, Disposals and Exit Costs for discussion of impairments related to corporate airplanes and Roy’s.(2)Carrying value approximates fair value. Carrying values for assets measured using Level 2 inputs totaled $2.5 million , $1.8 million and $8.3 million for fiscal years2015 , 2014 and 2013 , respectively. Assets measured using Level 3 inputs, had carrying values of $1.1 million , $0.6 million and $1.6 million for fiscal years 2015 ,2014 and 2013 , respectively. Third-party market appraisals (Level 2) and discounted cash flow models (Level 3) were used to estimate the fair value. Refer to Note 4 -Impairments, Disposals and Exit Costs for discussion of impairments related to restaurant closure initiatives and the Bonefish Restructuring.Fair Value of Financial Instruments - The Company’s non-derivative financial instruments as of December 27, 2015 and December 28, 2014consist of cash equivalents, restricted cash, accounts receivable, accounts payable and current and long-term debt. The fair values of cashequivalents, restricted cash, accounts receivable and accounts payable approximate their carrying amounts reported in the Company’sConsolidated Balance Sheets due to their short duration.Debt is carried at amortized cost; however, the Company estimates the fair value of debt for disclosure purposes. The following table includesthe carrying value and fair value of the Company’s debt as of December 27, 2015 and December 28, 2014 aggregated by the level in the fairvalue hierarchy in which those measurements fall: 2015 2014 FAIR VALUE FAIR VALUE(dollars in thousands)CARRYINGVALUE LEVEL 2 LEVEL 3 CARRYINGVALUE LEVEL 2 LEVEL 3Senior Secured Credit Facility: Term loan A$277,500 $276,459 $— $296,250 $294,769 $—Term loan A-1150,000 149,438 — — — —Term loan B— — — 225,000 222,188 —Revolving credit facility432,000 429,300 — 325,000 322,563 —2012 CMBS loan: Mortgage loan289,588 — 293,222 299,765 — 308,563First mezzanine loan84,028 — 83,608 85,127 — 85,187Second mezzanine loan85,353 — 85,780 86,067 — 86,988Other notes payable931 — 918 2,722 — 2,625Fair value of debt is determined based on the following:DEBT FACILITY METHODS AND ASSUMPTIONSSenior Secured Credit Facility Quoted market prices in inactive markets.2012 CMBS loan Assumptions derived from current conditions in the real estate and credit markets, changes in the underlying collateral andexpectations of management.Other notes payable Discounted cash flow approach. Discounted cash flow inputs primarily include cost of debt rates which are used to derive thepresent value factors for the determination of fair value.107Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued18. Income TaxesThe following table presents the domestic and foreign components of Income before provision for income taxes: FISCAL YEAR(dollars in thousands)2015 2014 2013Domestic$146,331 $124,157 $112,674Foreign24,523 (4,187) 59,686 $170,854 $119,970 $172,360Provision (benefit) for income taxes consisted of the following: FISCAL YEAR(dollars in thousands)2015 2014 2013Current provision: Federal$17,952 $13,364 $21,518State5,962 7,687 10,196Foreign11,384 16,616 9,681 35,298 37,667 41,395Deferred provision (benefit): Federal2,514 (8,842) (83,437)State626 688 (347)Foreign856 (5,469) 181 3,996 (13,623) (83,603)Provision (benefit) for income taxes$39,294 $24,044 $(42,208)Effective Income Tax Rate - The reconciliation of income taxes calculated at the United States federal tax statutory rate to the Company’seffective income tax rate is as follows: FISCAL YEAR 2015 2014 2013Income taxes at federal statutory rate35.0 % 35.0 % 35.0 %State and local income taxes, net of federal benefit2.3 3.2 3.6Valuation allowance on deferred income tax assets1.7 1.5 (30.6)Employment-related credits, net(15.8) (24.2) (22.3)Net life insurance expense(0.3) (0.8) (1.6)Noncontrolling interests(0.8) (1.2) (2.8)Tax settlements and related adjustments(0.1) 1.7 0.7Gain on remeasurement of equity method investment— — (6.8)Foreign rate differential0.6 2.7 (1.4)Other, net0.4 2.1 1.7Total23.0 % 20.0 % (24.5)%The net increase in the effective income tax rate in fiscal year 2015 as compared to fiscal year 2014 was primarily due to a change in theamount and mix of income and losses across the Company’s domestic and international subsidiaries and the payroll tax audit settlements.The net increase in the effective income tax rate in fiscal year 2014 as compared to fiscal year 2013 was primarily due to the release of thedomestic valuation allowance in 2013, the exclusion of gain on remeasurement of equity method investment in 2013 and a change in theblend of income across the Company’s domestic and international subsidiaries.108Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedDeferred Tax Assets and Liabilities - The income tax effects of temporary differences that give rise to significant portions of deferred incometax assets and liabilities are as follows:(dollars in thousands)DECEMBER 27, 2015 DECEMBER 28, 2014Deferred income tax assets: Deferred rent$53,426 $46,226Insurance reserves22,716 22,082Unearned revenue18,029 16,248Deferred compensation65,100 70,849Net operating loss carryforwards8,176 9,193Federal tax credit carryforwards148,447 160,266Partner deposits and accrued partner obligations13,248 18,026Other, net12,658 11,585Gross deferred income tax assets341,800 354,475Less: valuation allowance(4,088) (5,658)Net deferred income tax assets337,712 348,817Deferred income tax liabilities: Less: property, fixtures and equipment basis differences(198,449) (198,532)Less: intangible asset basis differences(150,997) (155,741)Less: deferred gain on extinguishment of debt(34,181) (45,782)Net deferred income tax liabilities$(45,915) $(51,238)Valuation Allowance - In 2013, the Company released $67.7 million of the valuation allowance related to U.S. deferred income tax assetsbased on the expectation that the Company will maintain a cumulative income position in the future to utilize deferred tax assets. Of the $67.7million valuation allowance release, $52.0 million was recorded as income tax benefit and $15.7 million was recorded as an increase toAdditional paid-in capital. As the general business tax credits were expected to be realized due to current year and future year’s income, theportion attributable to future year’s income, or $44.8 million , was released as a discrete event in 2013. The remainder was attributable tocurrent year activity as income was realized and impacted the 2013 effective income tax rate.Undistributed Earnings - A provision for income taxes has not been recorded for United States or additional foreign taxes on undistributedearnings related to the Company’s foreign affiliates as these earnings were and are expected to continue to be permanently reinvested. Theaggregate undistributed earnings of the Company’s foreign subsidiaries for which no deferred tax liability has been recorded is $151.3 millionas of December 27, 2015 . If the Company identifies an exception to its reinvestment policy of undistributed earnings, additional tax liabilitieswill be recorded. It is not practical to determine the amount of unrecognized deferred income tax liabilities on the undistributed earnings.Tax Carryforwards - The amount and expiration dates of tax loss carryforwards and credit carryforwards as of December 27, 2015 are asfollows:(dollars in thousands)EXPIRATION DATE AMOUNTUnited States state loss carryforwards2019-2034 $10,605United States federal tax credit carryforwards2032-2035 $156,708Foreign loss carryforwards2017-Indefinite $34,035Unrecognized Tax Benefits - As of December 27, 2015 and December 28, 2014 , the liability for unrecognized tax benefits was $19.4 millionand $17.6 million , respectively. Of the total amount of unrecognized tax benefits, including accrued interest and penalties, $19.3 million and$18.3 million , respectively, if recognized, would impact the Company’s effective tax rate.109Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedThe following table summarizes the activity related to the Company’s unrecognized tax benefits: FISCAL YEAR(dollars in thousands)2015 2014 2013Balance as of beginning of year$17,563 $17,068 $13,591Additions for tax positions taken during a prior period3,022 2,177 73Reductions for tax positions taken during a prior period(848) (422) (26)Additions for tax positions taken during the current period2,305 2,649 1,960Additions for tax positions on acquisition— — 2,799Settlements with taxing authorities(1,078) (3,935) (488)Lapses in the applicable statutes of limitations(540) (120) (841)Translation adjustments(994) 146 —Balance as of end of year$19,430 $17,563 $17,068The Company recognizes interest and penalties related to uncertain tax positions in Provision (benefit) for income taxes. The Companyrecognized a benefit related to interest and penalties of $0.6 million , an expense of $1.5 million and a benefit of $0.2 million for fiscal years2015 , 2014 and 2013 , respectively. The Company had approximately $1.6 million and $2.2 million accrued for the payment of interest andpenalties at December 27, 2015 and December 28, 2014 respectively.In many cases, the Company’s uncertain tax positions are related to tax years that remain the subject to examination by relevant taxableauthorities. Based on the outcome of these examinations, or a result of the expiration of the statute of limitations for specific jurisdictions, it isreasonably possible that the related recorded unrecognized tax benefits for tax positions taken on previously filed tax returns will change byapproximately $2.0 million to $3.0 million within the next twelve months.Open Tax Years - Following is a summary of the open audit years by jurisdiction: OPEN AUDIT YEARSUnited States federal2007-2014United States states2001-2014Foreign2008-2014The Company was previously under examination by tax authorities in South Korea for the 2008 to 2012 tax years. In connection with theexamination, the Company was assessed an additional $6.7 million of tax obligations. The Company appealed the assessment (“South Koreaappeal”). During fiscal 2013, the Company was required to deposit the amount of the assessment with the South Korea tax authorities.During 2015, the Company lost the South Korea appeal. The Company is currently seeking relief from double taxation through competentauthority. Accordingly, the Company has not recorded any additional tax expense related to the assessment in South Korea.19 . Commitments and ContingenciesOperating Leases - The Company leases restaurant and office facilities and certain equipment under operating leases mainly having initialterms expiring between 2016 and 2032. The restaurant facility leases have renewal clauses primarily from five to 30 years , exercisable at theoption of the Company. Certain of these leases require the payment of contingent rentals leased on a percentage of gross revenues, as definedby the terms of the applicable lease agreement.110Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedTotal rent expense is as follows for the periods indicated: FISCAL YEAR(dollars in thousands)2015 2014 2013Rent expense (1)$164,754 $169,701 $156,720____________________(1)Includes contingent rent expense of $7.4 million , $8.0 million and $6.5 million for fiscal years 2015 , 2014 and 2013 , respectively.As of December 27, 2015 , future minimum rental payments under non-cancelable operating leases are as follows:(dollars in thousands) 2016$143,8662017129,5842018114,010201996,872202081,966Thereafter393,864Total minimum lease payments (1)$960,162____________________(1)Total minimum lease payments have not been reduced by minimum sublease rentals of $1.8 million due in future periods under non-cancelable subleases.Purchase Obligations - Purchase obligations were $509.7 million and $563.2 million at December 27, 2015 and December 28, 2014 ,respectively. These purchase obligations are primarily due within five years, however, commitments with various vendors extend throughApril 2022. Outstanding commitments consist primarily of beverage products, pork, seafood, beef and other food products related to normalbusiness operations and contracts for restaurant level service contracts, advertising, insurance and technology. In 2015 , the Companypurchased more than 90% of its beef raw materials from four beef suppliers that represent approximately 85% of the total beef marketplace inthe U.S.Litigation and Other Matters - In relation to the various legal matters discussed below, the Company had $4.5 million and $1.0 million ofliability recorded as of December 27, 2015 and December 28, 2014 , respectively. During fiscal years 2015 , 2014 and 2013 , the Companyrecognized $4.6 million , $1.2 million and $0.4 million , respectively, in Other restaurant operating in its Consolidated Statements ofOperations and Comprehensive Income for legal settlements.On October 4, 2013, two then-current employees (the “Nevada Plaintiffs”) filed a purported collective action lawsuit against the Company,OSI Restaurant Partners, LLC, and two of its subsidiaries in the U.S. District Court for the District of Nevada (Cardoza, et al. v. Bloomin’Brands, Inc., et al., Case No.: 2:13-cv-01820-JAD-NJK). The complaint alleges violations of the Fair Labor Standards Act by requiringemployees to work off the clock, complete on-line training without pay, and attend meetings in the restaurant without pay. The nationwidecollective action permitted all hourly employees in all Outback Steakhouse restaurants to join. The suit seeks an unspecified amount in backpay for the employees that joined the lawsuit, an equal amount in liquidated damages, costs, expenses, and attorney’s fees. The NevadaPlaintiffs also filed a companion lawsuit in Nevada state court alleging that the Company violated the state break time rules. In November2015, the Company reached a tentative settlement agreement resolving all claims and the cost of class administration for $3.2 million . TheCompany is in process of finalizing the settlement agreement, which will then be submitted to the court for approval. Court approval isrequired before any settlement agreement between the parties becomes final.In addition, the Company is subject to legal proceedings, claims and liabilities, such as liquor liability, sexual harassment and slip and fallcases, which arise in the ordinary course of business and are generally covered by insurance if they exceed specified retention or deductibleamounts. In the opinion of management, the amount of ultimate liability with respect to those actions will not have a material adverse impacton the Company’s financial position or results of operations and cash flows.111Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedInsurance - As of December 27, 2015 , the future payments the Company expects for workers’ compensation, general liability and healthinsurance claims are:(dollars in thousands) 2016$20,909201712,18220188,48120195,19620202,861Thereafter14,162 $63,791Discount rates of 1.08% and 0.83% were used for December 27, 2015 and December 28, 2014 , respectively. A reconciliation of the expectedaggregate undiscounted reserves to the discounted reserves for workers’ compensation, general liability and health insurance claimsrecognized in the Company’s Consolidated Balance Sheets is as follows:(dollars in thousands)DECEMBER 27, 2015 DECEMBER 28, 2014Undiscounted reserves$63,791 $64,157Discount(2,318) (1,780)Discounted reserves$61,473 $62,377 Discounted reserves recognized in the Company ’ s Consolidated Balance Sheets: Accrued and other current liabilities$20,824 $19,455Other long-term liabilities, net40,649 42,922 $61,473 $62,37720 . Segment ReportingDuring the first quarter of 2015, the Company recast its segment reporting to include two reportable segments, U.S. and International, whichreflects changes made in how the Company manages its business, reviews operating performance and allocates resources. The U.S. segmentincludes all brands operating in the U.S. while brands operating outside the U.S. are included in the International segment. All prior periodinformation was recast to reflect this change.The Company’s reporting segments are organized based on restaurant concept and geographic location. Resources are allocated andperformance is assessed by the Company’s Chief Executive Officer, whom the Company has determined to be its Chief Operating DecisionMaker. Following is a summary of reporting segments as of December 27, 2015 :SEGMENT CONCEPT GEOGRAPHIC LOCATIONU.S. Outback Steakhouse United States of America, including Puerto Rico Carrabba’s Italian Grill Bonefish Grill Fleming’s Prime Steakhouse & Wine Bar International Outback Steakhouse (1) Brazil, South Korea, Hong Kong, China Carrabba’s Italian Grill (Abbraccio) Brazil________________(1)Includes international franchise locations in 18 countries and Guam.Segment accounting policies are the same as those described in Note 2 - Summary of Significant Accounting Policies . Revenues for allsegments include only transactions with customers and include no intersegment revenues. Excluded112Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continuedfrom net income from operations for U.S. and International are certain legal and corporate costs not directly related to the performance of thesegments, interest and other expenses related to the Company’s credit agreements and derivative instruments, certain stock-basedcompensation expenses, certain bonus expense and certain insurance expenses managed centrally.The following table is a summary of Total revenue by segment: FISCAL YEAR(dollars in thousands)2015 2014 2013Total revenues U.S.$3,879,743 $3,854,279 $3,769,353International497,933 588,432 359,877Total revenues$4,377,676 $4,442,711 $4,129,230 The following table is a reconciliation of Segment income from operations to Income before provision (benefit) for income taxes : FISCAL YEAR(dollars in thousands)2015 2014 2013Segment income from operations U.S.$342,224 $320,561 $314,525International34,597 25,020 57,409Total segment income from operations376,821 345,581 371,934Unallocated corporate operating expense(145,896) (153,617) (146,577)Total income from operations230,925 191,964 225,357Loss on extinguishment and modification of debt(2,956) (11,092) (14,586)Gain on remeasurement of equity method investment— — 36,608Other expense, net(939) (1,244) (246)Interest expense, net(56,176) (59,658) (74,773)Income before provision (benefit) for income taxes$170,854 $119,970 $172,360The following table is a summary of Depreciation and amortization expense by segment: FISCAL YEAR(dollars in thousands)2015 2014 2013Depreciation and amortization U.S.$151,868 $147,686 $139,657International26,736 29,705 12,496Corporate11,795 13,520 11,941Total depreciation and amortization$190,399 $190,911 $164,094The following table is a summary of capital expenditures by segment: FISCAL YEAR(dollars in thousands)2015 2014 2013Capital expenditures U.S.$153,445 $174,952 $186,575International46,803 55,594 24,116Corporate10,015 7,322 26,523Total capital expenditures$210,263 $237,868 $237,214113Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - ContinuedThe following table sets forth Total assets by segment:(dollars in thousands)DECEMBER 27, 2015 DECEMBER 28, 2014Assets U.S.$2,405,196 $2,376,331International472,518 622,866Corporate154,855 339,043Total assets$3,032,569 $3,338,240International assets are defined as assets residing in a country other than the U.S. The following table details long-lived assets, excludinggoodwill, intangible assets and deferred tax assets, by major geographic area:(dollars in thousands)DECEMBER 27, 2015 DECEMBER 28, 2014U.S.$1,601,691 $1,619,931International156,905 186,574 $1,758,596 $1,806,50521 . Selected Quarterly Financial Data (Unaudited)2015 FISCAL QUARTERS (dollars in thousands, except per share data)FIRST (1) SECOND (1) THIRD (1) FOURTH (1)Total revenues$1,202,059 $1,099,597 $1,026,721 $1,049,299Income from operations97,701 62,585 38,724 31,915Net income62,082 33,056 17,405 19,017Net income attributable to Bloomin’ Brands60,588 32,226 16,811 17,702Earnings per share: Basic$0.48 $0.26 $0.14 $0.15 Diluted$0.47 $0.26 $0.13 $0.142014 FISCAL QUARTERS (dollars in thousands, except per share data)FIRST (2) SECOND (2) THIRD (2) FOURTH (2)Total revenues$1,157,859 $1,110,912 $1,065,454 $1,108,486Income (loss) from operations90,026 62,391 (1,121) 40,668Net income (loss)55,100 27,722 (10,830) 23,934Net income (loss) attributable to Bloomin’ Brands53,733 26,391 (11,443) 22,409Earnings (loss) per share: Basic$0.43 $0.21 $(0.09) $0.18 Diluted$0.42 $0.21 $(0.09) $0.17____________________(1)Total revenues in the first quarter of 2015 include $24.3 million higher restaurant sales due to a change in the Company’s fiscal year end. Income from operations inthe first quarter of 2015 includes $7.7 million of pre-tax impairments and restaurant closing costs incurred in connection with the Domestic and InternationalRestaurant Closure Initiatives. Income from operations in the fourth quarter of 2015 includes $24.2 million of pre-tax asset impairments incurred in connection withthe Bonefish Restructuring. Net income for the second quarter of 2015 includes $2.6 million of loss in connection with a refinancing of the Company’s Senior SecuredCredit Facility. Net income in the first quarter of 2015 includes $4.9 million of less net income due to a change in the Company’s fiscal year end.(2)Total revenues in the first, third and fourth quarters of 2014 include $7.5 million , $6.9 million and $31.6 million , respectively, of lower restaurant sales due to achange in the Company’s fiscal year end. Income (loss) from operations in the first quarter of 2014 includes $4.9 million of pre-tax restaurant closing charges incurredin connection with the Domestic Restaurant Closure Initiative. Income (loss) from operations in the third and fourth quarters of 2014 includes asset impairment chargesof $16.6 million and $7.4 million , respectively, associated with the Company’s decision to sell its Roy’s concept and corporate aircraft. Income (loss) from operationsin the third and fourth quarters of 2014 includes $11.6 million and $10.3 million , respectively, of pre-tax impairments and restaurant closing costs incurred inconnection with the International Restaurant Closure Initiative and $5.4 million and $3.6 million , respectively, of severance114Table of ContentsBLOOMIN’ BRANDS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continuedexpense incurred as a result of the Company’s organizational realignment. Net income (loss) in the first, third and fourth quarters of 2014 includes $1.5 million , $1.4million and $6.3 million , respectively, of less net income due to a change in the Company’s fiscal year end. Net income (loss) for the second quarter of 2014 includesan $11.1 million loss in connection with a refinancing of the Company’s Senior Secured Credit Facility.22 . Subsequent EventsOn February 11, 2016 , PRP, as borrower, and Wells Fargo Bank, National Association, as lender (the “Lender”), entered into a loanagreement (the “PRP Mortgage Loan”), pursuant to which PRP borrowed $300.0 million . The PRP Mortgage Loan has an initial maturitydate of February 11, 2018 (the “Initial Maturity”) with an option to extend the Initial Maturity for one twelve month extension period (the“Extension”) provided that certain conditions are satisfied. The PRP Mortgage Loan is collateralized by 148 properties owned by PRP(“Collateral Properties”). PRP has made negative pledges with respect to an additional 98 properties (“Unencumbered Properties”).The proceeds of the PRP Mortgage Loan were used, together with borrowings under the Company’s revolving credit facility, to prepay aportion, and fully defease the remainder, of the 2012 CMBS loan. In connection with the extinguishment, the Company anticipatesrecognizing a loss of $26.0 million to $29.0 million during the first quarter of 2016. Following the extinguishment of the 2012 CMBS loan,the Company expects the release of $19.3 million of restricted cash.The PRP Mortgage Loan bears interest, payable monthly, at a variable rate equal to 250 basis points above the seven-day LIBOR , subject toadjustment in certain circumstances.The PRP Mortgage Loan permits the Company to refinance or sell the Collateral Properties and the Unencumbered Properties, subject tocertain terms and conditions, including that specified release proceeds are applied against the outstanding loan balance. If the PRP MortgageLoan balance exceeds $210.0 million on March 1, 2017 or $160.0 million on September 1, 2017 , PRP’s rental income will be applied againstthe outstanding loan balance.The PRP Mortgage Loan repayment schedule, including the Extension, is as follows (dollars in thousands):PAYMENT DATE INITIAL MATURITY EXTENSIONFebruary 28, 2017 $90,000 $90,000August 31, 2017 50,000 50,000February 11, 2018 (1) 160,000 50,000August 31, 2018 — 50,000February 11, 2019 — 60,000 $300,000 $300,000____________________(1)If the Extension is exercised, the payment date is February 28, 2018.The Company intends to fund payment of the PRP Mortgage Loan with proceeds from sale-leaseback transactions of our real estate portfolio.115Table of ContentsBLOOMIN’ BRANDS, INC.Item 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureNone.Item 9A. Controls and ProceduresEvaluation of Disclosure Controls and ProceduresWe have established and maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed byus in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, andreported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information isaccumulated and communicated to our management, including our Chief Executive Officer and Chief Financial and Administrative Officer,as appropriate to allow timely decisions regarding required disclosure. We carried out an evaluation, under the supervision and with theparticipation of our management, including our Chief Executive Officer and Chief Financial and Administrative Officer, of the effectivenessof our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Chief ExecutiveOfficer and Chief Financial and Administrative Officer concluded that our disclosure controls and procedures were effective as ofDecember 27, 2015 .Management’s Annual Report on Internal Control over Financial ReportingManagement’s report on our internal control over financial reporting and the attestation report of PricewaterhouseCoopers LLP, ourindependent registered certified public accounting firm, on our internal control over financial reporting are included in Item 8, FinancialStatements and Supplementary Data, of this Annual Report on Form 10-K.Changes in Internal Control over Financial ReportingThere have been no changes in our internal control over financial reporting during our most recent quarter ended December 27, 2015 thathave materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.Item 9B. Other InformationNone.116Table of ContentsBLOOMIN’ BRANDS, INC.PART IIIItem 10. Directors, Executive Officers and Corporate GovernanceThe information required by this item relating to our directors and nominees will be included under the captions “Proposal No. 1: Election ofDirectors—Nominees for Election at this Annual Meeting” and “—Directors Continuing in Office” in our definitive Proxy Statement for the2016 Annual Meeting of Stockholders (“Definitive Proxy Statement”) and is incorporated herein by reference.The information required by this item regarding our Audit Committee will be included under the caption “Proposal No. 1: Election ofDirectors—Board Committees and Meetings” in our Definitive Proxy Statement and is incorporated herein by reference.The information required by this item relating to our executive officers is included under the caption “Executive Officers of the Registrant” inPart I of this Report on Form 10-K.The information required by this item regarding compliance with Section 16(a) of the Securities Act of 1934 will be included under thecaption “Ownership of Securities—Section 16(a) Beneficial Ownership Reporting Compliance” in our Definitive Proxy Statement and isincorporated herein by reference.We have adopted a Business Conduct and Code of Ethics that applies to all employees. A copy of our Business Conduct and Code of Ethics isavailable on our website, free of charge. The Internet address for our website is www.bloominbrands.com, and the Business Conduct andCode of Ethics may be found on our main webpage by clicking first on “Investors” and then on “Corporate Governance” and next on “Codeof Business Conduct and Ethics.”We intend to satisfy any disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of thiscode of ethics by posting such information on our website, on the webpage found by clicking through to “Code of Business Conduct andEthics” as specified above.Item 11. Executive CompensationThe information required by this item will be included under the captions “Proposal No. 1: Election of Directors—Director Compensation”and “Executive Compensation and Related Information” in our Definitive Proxy Statement and is incorporated herein by reference.Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersThe information required by this item will be included under the caption “Ownership of Securities” in our Definitive Proxy Statement and isincorporated herein by reference.The information relating to securities authorized for issuance under equity compensation plans is included under the caption “SecuritiesAuthorized for Issuance Under Equity Compensation Plans” in Item 5 of this Report on Form 10-K.Item 13. Certain Relationships and Related Transactions, and Director IndependenceThe information required by this item relating to transactions with related persons will be included under the caption “Certain Relationshipsand Related Party Transactions,” and the information required by this item relating to director independence will be included under thecaption “Proposal No. 1: Election of Directors—Independent Directors,” in each case in our Definitive Proxy Statement, and is incorporatedherein by reference.117Table of ContentsBLOOMIN’ BRANDS, INC.Item 14. Principal Accounting Fees and ServicesThe information required by this item will be included under the captions “Proposal No. 2: Ratification of Independent Registered CertifiedPublic Accounting Firm—Principal Accountant Fees and Services” and “—Policy on Audit Committee Pre-Approval of Audit andPermissible Non-Audit Services of Independent Registered Certified Public Accounting Firm” in our Definitive Proxy Statement and isincorporated herein by reference.118Table of ContentsBLOOMIN’ BRANDS, INC.PART IVItem 15. Exhibits and Financial Statement Schedules.(a)(1) LISTING OF FINANCIAL STATEMENTSThe following consolidated financial statements of the Company and subsidiaries are included in Item 8 of this Report:•Consolidated Balance Sheets - December 27, 2015 and December 28, 2014•Consolidated Statements of Operations and Comprehensive Income – Fiscal years 2015 , 2014 , and 2013•Consolidated Statements of Changes in Stockholders’ Equity – Fiscal years 2015 , 2014 , and 2013•Consolidated Statements of Cash Flows – Fiscal years 2015 , 2014 , and 2013•Notes to Consolidated Financial Statements(a)(2) FINANCIAL STATEMENT SCHEDULESAll financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient torequire submission of the schedule, or because the information required is included in the consolidated financial statements and notes theretoincluded in this Report.(a)(3) EXHIBITSEXHIBITNUMBER DESCRIPTION OF EXHIBITS FILINGS REFERENCED FOR INCORPORATION BY REFERENCE 2.1 Quota Purchase and Sale Agreement dated October 31, 2013 and effectiveNovember 1, 2013, by and between Bloomin’ Brands, Inc., OutbackSteakhouse Restaurantes Brasil S.A. (formerly known as Bloom HoldcoParticipações Ltda.), PGS Participações Ltda., the equity holders of PGSParticipações Ltda., PGS Consultoria e Serviços Ltda., and BloomParticipações Ltda. 1 December 31, 2013 Form 10-K, Exhibit 2.1 3.1 Second Amended and Restated Certificate of Incorporation of Bloomin’Brands, Inc. Registration Statement on Form S-8, File No.333-183270, filed on August 13, 2012,Exhibit 4.1 3.2 Second Amended and Restated Bylaws of Bloomin’ Brands, Inc. Registration Statement on Form S-8, File No.333-183270, filed on August 13, 2012,Exhibit 4.2 4.1 Form of Common Stock Certificate Amendment No. 4 to Registration Statementon Form S-1, File No. 333-180615, filed onJuly 18, 2012, Exhibit 4.1 10.1 Credit Agreement dated October 26, 2012 among OSI Restaurant Partners,LLC, OSI HoldCo, Inc., the Lenders and Deutsche Bank Trust CompanyAmericas, as administrative agent for the Lenders 1 September 30, 2012 Form 10-Q, Exhibit 10.1 10.2 First Amendment to Credit Agreement, Guaranty and Security Agreementdated as of April 10, 2013 among OSI Restaurant Partners, LLC, OSIHoldCo, Inc., the Subsidiary Guarantors, the Lenders and Deutsche BankTrust Company Americas, as administrative agent for the Lenders March 31, 2013 Form 10-Q, Exhibit 10.1 10.3 Second Amendment to Credit Agreement dated as of January 3, 2014 amongOSI Restaurant Partners, LLC, OSI HoldCo, Inc., the Subsidiary Guarantorsand Deutsche Bank Trust Company Americas, as administrative agent December 31, 2013 Form 10-K, Exhibit 10.3 119Table of ContentsBLOOMIN’ BRANDS, INC.EXHIBITNUMBER DESCRIPTION OF EXHIBITS FILINGS REFERENCED FOR INCORPORATION BY REFERENCE10.4 Third Amendment to Credit Agreement dated as of May 16, 2014 amongOSI Restaurant Partners, LLC, OSI HoldCo, Inc., the Subsidiary Guarantors,Deutsche Bank Trust Company Americas, as administrative agent, collateralagent, L/C issuer, swing line lender and assigning Lender, Deutsche BangAG New York Branch, as assignee and Wells Fargo Bank, NationalAssociation, as successor administrative agent June 29, 2014 Form 10-Q, Exhibit 10.5 10.5 Fourth Amendment to Credit Agreement and Incremental Amendment datedas of March 31, 2015, among OSI Restaurant Partners, LLC, OSI Holdco,Inc., the Subsidiary Guarantors party thereto, the lenders party thereto, andWells Fargo Bank, National Association, as administrative agent March 29, 2015 Form 10-Q, Exhibit 10.1 10.6 Fifth Amendment to Credit Agreement and Incremental Amendment dated asof December 11, 2015, among OSI Restaurant Partners, LLC, OSI Holdco,Inc., the Subsidiary Guarantors party thereto, the lenders party thereto, andWells Fargo Bank, National Association, as administrative agent Filed herewith 10.7 Loan and Security Agreement, dated March 27, 2012, between New PrivateRestaurant Properties, LLC, as borrower, and German American CapitalCorporation and Bank of America, N.A., collectively as lender 1 Amendment No. 1 to Registration Statementon Form S-1, File No. 333-180615, filed onMay 17, 2012, Exhibit 10.10 10.8 First Amendment to Loan and Security Agreement, dated effective January1, 2014, by and among New Private Restaurant Properties, LLC, asborrower, OSI HoldCo I, Inc., as guarantor and Wells Fargo Bank, N.A., astrustee for the registered holders of BAMLL-DB 2012-OSI Trust,Commercial Mortgage Pass-Through Certificates, Series 2012-OSI, as lender December 31, 2013 Form 10-K, Exhibit 10.5 10.9 Mezzanine Loan and Security Agreement (First Mezzanine), dated March 27,2012, between New PRP Mezz 1, LLC, as borrower, and German AmericanCapital Corporation and Bank of America, N.A., collectively as lender Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.11 10.10 First Amendment to Mezzanine Loan and Security Agreement (FirstMezzanine), dated as of January 3, 2014, between New PRP Mezz 1, LLC,as borrower, OSI HoldCo I, Inc., as guarantor, and Athene Annuity & LifeAssurance Company, Thornburg Strategic Income Fund, ThornburgInvestment Income Builder Fund and Newcastle CDO IX, 1 Limited,collectively as lender December 31, 2013 Form 10-K, Exhibit 10.7 10.11 Mezzanine Loan and Security Agreement (Second Mezzanine), dated March27, 2012, between New PRP Mezz 2, LLC, as borrower, and GermanAmerican Capital Corporation and Bank of America, N.A., collectively, aslender Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.12 10.12 First Amendment to Mezzanine Loan and Security Agreement (SecondMezzanine), dated as of January 3, 2014, between New PRP Mezz 2, LLC,as borrower, OSI HoldCo I, Inc., as guarantor, and Annaly CRE HoldingsLLC, as lender December 31, 2013 Form 10-K, Exhibit 10.9 10.13 Environmental Indemnity, dated March 27, 2012, by OSI HoldCo I, Inc. forthe benefit of German American Capital Corporation and Bank of America,N.A. Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.13 120Table of ContentsBLOOMIN’ BRANDS, INC.EXHIBITNUMBER DESCRIPTION OF EXHIBITS FILINGS REFERENCED FOR INCORPORATION BY REFERENCE10.14 Environmental Indemnity, dated March 27, 2012, by OSI RestaurantPartners, LLC and Private Restaurant Master Lessee, LLC for the benefit ofGerman American Capital Corporation and Bank of America, N.A. Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.14 10.15 Environmental Indemnity, dated March 27, 2012, by PRP Holdings, LLC forthe benefit of German American Capital Corporation and Bank of America,N.A. Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.15 10.16 Environmental Indemnity (First Mezzanine), dated March 27, 2012, by OSIHoldCo I, Inc. for the benefit of German American Capital Corporation andBank of America, N.A. Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.16 10.17 Environmental Indemnity (First Mezzanine), dated March 27, 2012, by OSIRestaurant Partners, LLC and Private Restaurant Master Lessee, LLC for thebenefit of German American Capital Corporation and Bank of America, N.A. Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.17 10.18 Environmental Indemnity (First Mezzanine), dated March 27, 2012, by PRPHoldings, LLC for the benefit of German American Capital Corporation andBank of America, N.A. Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.18 10.19 Environmental Indemnity (Second Mezzanine), dated March 27, 2012, byOSI HoldCo I, Inc. for the benefit of German American Capital Corporationand Bank of America, N.A. Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.19 10.20 Environmental Indemnity (Second Mezzanine), dated March 27, 2012, byOSI Restaurant Partners, LLC and Private Restaurant Master Lessee, LLCfor the benefit of German American Capital Corporation and Bank ofAmerica, N.A. Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.20 10.21 Environmental Indemnity (Second Mezzanine), dated March 27, 2012, byPRP Holdings, LLC for the benefit of German American Capital Corporationand Bank of America, N.A. Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.21 10.22 Guaranty of Recourse Obligations, dated March 27, 2012, by OSI HoldCo I,Inc. to and for the benefit of German American Capital Corporation andBank of America, N.A. Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.22 10.23 Guaranty of Recourse Obligations (First Mezzanine), dated March 27, 2012,by OSI HoldCo I, Inc. to and for the benefit of German American CapitalCorporation and Bank of America, N.A. Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.23 10.24 Guaranty of Recourse Obligations (Second Mezzanine), dated March 27,2012, by OSI HoldCo I, Inc. to and for the benefit of German AmericanCapital Corporation and Bank of America, N.A. Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.24 10.25 Amended and Restated Guaranty, dated March 27, 2012, by OSI RestaurantPartners, LLC to and for the benefit of New Private Restaurant Properties,LLC Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.27 10.26 Subordination, Non-Disturbance and Attornment Agreement (New PrivateRestaurant Properties, LLC), dated March 27, 2012, by and between Bank ofAmerica, N.A., German American Capital Corporation, Private RestaurantMaster Lessee, LLC and New Private Restaurant Properties, LLC, with theacknowledgement, consent and limited agreement of OSI RestaurantPartners, LLC Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.25 121Table of ContentsBLOOMIN’ BRANDS, INC.EXHIBITNUMBER DESCRIPTION OF EXHIBITS FILINGS REFERENCED FOR INCORPORATION BY REFERENCE10.27 Royalty Agreement dated April 1995 among Carrabba’s Italian Grill, Inc.,Outback Steakhouse, Inc., Mangia Beve, Inc., Carrabba, Inc., CarrabbaWoodway, Inc., John C. Carrabba, III, Damian C. Mandola, and John C.Carrabba, Jr., as amended by First Amendment to Royalty Agreement datedJanuary 1997 and Second Amendment to Royalty Agreement made andentered into effective April 7, 2010 by and among Carrabba’s Italian Grill,LLC, OSI Restaurant Partners, LLC, Mangia Beve, Inc., Mangia Beve II,Inc., Original, Inc., Voss, Inc., John C. Carrabba, III, Damian C. Mandola,and John C. Carrabba, Jr. Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.6 10.28 Third Amendment to Royalty Agreement made and entered into effectiveJune 1, 2014, by and among Carrabba’s Italian Grill, LLC, OSI RestaurantPartners, LLC, Mangia Beve, Inc., Mangia Beve II, Inc., Original, Inc., Voss,Inc., John C. Carrabba, III, Damian C. Mandola, and John C. Carrabba, Jr. June 29, 2014 Form 10-Q, Exhibit 10.6 10.29 Amended and Restated Operating Agreement for OSI/Fleming’s, LLC madeas of June 4, 2010 by and among OS Prime, LLC, a wholly-owned subsidiaryof OSI Restaurant Partners, LLC, FPSH Limited Partnership and AWA IIISteakhouses, Inc. Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.8 10.30 Amended and Restated Master Lease Agreement, dated March 27, 2012,between New Private Restaurant Properties, LLC, as landlord, and PrivateRestaurant Master Lessee, LLC, as tenant 1 Amendment No. 1 to Registration Statementon Form S-1, File No. 333-180615, filed onMay 17, 2012, Exhibit 10.26 10.31 Lease, dated June 14, 2007, between OS Southern, LLC andSelmon’s/Florida-I, Limited Partnership (predecessor to MVP LRS, LLC), asamended May 27, 2010 Amendment No. 1 to Registration Statementon Form S-1, File No. 333-180615, filed onMay 17, 2012, Exhibit 10.52 10.32 Lease, dated January 21, 2014, between OS Southern, LLC and MVP LRS,LLC December 31, 2013 Form 10-K, Exhibit10.28 10.33* Employee Rollover Agreement for conversion of OSI Restaurant Partners,Inc. restricted stock to Kangaroo Holdings, Inc. restricted stock entered intoby the individuals listed on Schedule 1 thereto Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.4 10.34* OSI Restaurant Partners, LLC HCE Deferred Compensation Plan effectiveOctober 1, 2007 Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.46 10.35* Kangaroo Holdings, Inc. 2007 Equity Incentive Plan, as amended Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.1 10.36* Form of Option Agreement for Options under the Kangaroo Holdings, Inc.2007 Equity Incentive Plan Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.42 10.37* Bloomin’ Brands, Inc. 2012 Incentive Award Plan Amendment No. 4 to Registration Statementon Form S-1, File No. 333-180615, filed onJuly 18, 2012, Exhibit 10.2 10.38* Form of Nonqualified Stock Option Award Agreement for options grantedunder the Bloomin’ Brands, Inc. 2012 Incentive Award Plan December 7, 2012 Form 8-K, Exhibit 10.2 122Table of ContentsBLOOMIN’ BRANDS, INC.EXHIBITNUMBER DESCRIPTION OF EXHIBITS FILINGS REFERENCED FOR INCORPORATION BY REFERENCE10.39* Form of Restricted Stock Award Agreement for restricted stock granted todirectors under the Bloomin’ Brands, Inc. 2012 Incentive Award Plan December 7, 2012 Form 8-K, Exhibit 10.3 10.40* Form of Restricted Stock Award Agreement for restricted stock granted toemployees and consultants under the Bloomin’ Brands, Inc. 2012 IncentiveAward Plan December 7, 2012 Form 8-K, Exhibit 10.4 10.41* Form of Restricted Stock Unit Award Agreement for restricted stock grantedto directors under the Bloomin’ Brands, Inc. 2012 Incentive Award Plan September 30, 2013 Form 10-Q, Exhibit 10.1 10.42* Form of Restricted Stock Unit Award Agreement for restricted stock grantedto employees and consultants under the Bloomin’ Brands, Inc. 2012Incentive Award Plan September 30, 2013 Form 10-Q, Exhibit 10.2 10.43* Form of Performance Unit Award Agreement for performance units grantedunder the Bloomin’ Brands, Inc. 2012 Incentive Award Plan December 7, 2012 Form 8-K, Exhibit 10.5 10.44* Form of Bloomin’ Brands, Inc. Indemnification Agreement by and betweenBloomin’ Brands, Inc. and each member of its Board of Directors and eachof its executive officers Amendment No. 4 to Registration Statementon Form S-1, File No. 333-180615, filed onJuly 18, 2012, Exhibit 10.39 10.45* Bloomin’ Brands, Inc. Executive Change in Control Plan, effectiveDecember 6, 2012 December 7, 2012 Form 8-K, Exhibit 10.1 10.46* Amended and Restated Employment Agreement made and entered intoSeptember 4, 2012 by and between Elizabeth A. Smith and Bloomin’ Brands,Inc. June 30, 2012 Form 10-Q, Exhibit 10.1 10.47* Option Agreement, dated November 16, 2009, by and between KangarooHoldings, Inc. and Elizabeth A. Smith, as amended December 31, 2009 Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.40 10.48* Option Agreement, dated July 1, 2011, by and between Kangaroo Holdings,Inc. and Elizabeth A. Smith Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.41 10.49* Officer Employment Agreement, made and entered into effective May 7,2012, by and among David Deno and OSI Restaurant Partners, LLC Amendment No. 1 to Registration Statementon Form S-1, File No. 333-180615, filed onMay 17, 2012, Exhibit 10.53 10.50* Amendment, dated July 16, 2014, to the Officer Employment Agreement,made and entered into effective May 7, 2012, by and among David Deno andOSI Restaurant Partners, LLC June 29, 2014 Form 10-Q, Exhibit 10.7 10.51* Officer Employment Agreement dated January 23, 2008 and effective April12, 2007 by and among Jeffrey S. Smith and Outback Steakhouse of Florida,LLC, as amended on January 1, 2009 and January 1, 2012 Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.32 10.52* Amended and Restated Employment Agreement dated June 14, 2007,between Joseph J. Kadow and OSI Restaurant Partners, LLC, as amended onJanuary 1, 2009, June 12, 2009, December 30, 2010 and December 16, 2011 Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.29 10.53* Split-Dollar Agreement dated August 12, 2008 and effective March 30,2006, by and between OSI Restaurant Partners, LLC (formerly known asOutback Steakhouse, Inc.) and Joseph J. Kadow Registration Statement on Form S-1, File No.333-180615, filed on April 6, 2012, Exhibit10.48123Table of ContentsBLOOMIN’ BRANDS, INC.EXHIBITNUMBER DESCRIPTION OF EXHIBITS FILINGS REFERENCED FOR INCORPORATION BY REFERENCE 10.54* Employment Offer Letter Agreement, dated as of November 1, 2013,between Bloomin’ Brands, Inc. and Patrick Murtha December 31, 2013 Form 10-K, Exhibit10.55 10.55* Employment Offer Letter Agreement, dated as of July 30, 2014, betweenBloomin’ Brands, Inc. and Donagh Herlihy December 28, 2014 Form 10-K, Exhibit10.58 10.56* Employment Offer Letter Agreement, dated as of March 12, 2015, betweenBloomin’ Brands, Inc. and Gregg Scarlett Filed herewith 10.57* Employment Offer Letter Agreement, dated as of May 4, 2015, betweenBloomin’ Brands, Inc. and Sukhdev Singh Filed herewith 10.58 Registration Rights Agreement among Bloomin’ Brands, Inc. and certainstockholders of Bloomin’ Brands, Inc. made as of April 29, 2014 May 1, 2014 Form 8-K, Exhibit 10.3 21.1 List of Subsidiaries Filed herewith 23.1 Consent of PricewaterhouseCoopers LLP Filed herewith 31.1 Certification of Chief Executive Officer pursuant to Section 302 of theSarbanes-Oxley Act of 2002 Filed herewith 31.2 Certification of Chief Financial and Administrative Officer pursuant toSection 302 of the Sarbanes-Oxley Act of 2002 Filed herewith 32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350,as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 2 Filed herewith 32.2 Certification of Chief Financial and Administrative Officer pursuant to 18U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 2 Filed herewith 101.INS XBRL Instance Document Filed herewith 101.SCH XBRL Taxonomy Extension Schema Document Filed herewith 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document Filed herewith 101.DEF XBRL Taxonomy Extension Definition Linkbase Document Filed herewith 101.LAB XBRL Taxonomy Extension Label Linkbase Document Filed herewith 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document Filed herewith* Management contract or compensatory plan or arrangement required to be filed as an exhibit1 Confidential treatment has been granted with respect to portions of Exhibits 2.1 , 10.1 , 10.7 and 10.30 and such portions have been filedseparately with the Securities and Exchange Commission.2 These certifications are not deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of thatsection. These certifications will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act,except to the extent that the registrant specifically incorporates them by reference.124Table of ContentsBLOOMIN’ BRANDS, INC.SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to besigned on its behalf by the undersigned, thereunto duly authorized. Date:February 24, 2016Bloomin’ Brands, Inc. By: /s/ Elizabeth A. Smith Elizabeth A. SmithChief Executive Officer(Principal Executive Officer)Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf ofthe registrant and in the capacities and on the dates indicated.Signature Title Date /s/ Elizabeth A. Smith Chief Executive Officer and Director(Principal Executive Officer) Elizabeth A. Smith February 24, 2016 /s/ David J. Deno Executive Vice President and Chief Financial and AdministrativeOfficer(Principal Financial and Accounting Officer) David J. Deno February 24, 2016 /s/ Andrew B. Balson Andrew B. Balson Director February 24, 2016 /s/ James R. Craigie James R. Craigie Director February 24, 2016 /s/ David R. Fitzjohn David R. Fitzjohn Director February 24, 2016 /s/ Mindy Grossman Mindy Grossman Director February 24, 2016 /s/ Tara Walpert Levy Tara Walpert Levy Director February 24, 2016 /s/ John J. Mahoney John J. Mahoney Director February 24, 2016 /s/ Chris T. Sullivan Chris T. Sullivan Director February 24, 2016EXHIBIT 10.6EXECUTION VERSIONFIFTH AMENDMENT TO CREDIT AGREEMENT AND INCREMENTAL AMENDMENTFIFTH AMENDMENT TO CREDIT AGREEMENT AND INCREMENTAL AMENDMENT (this “ Amendment ”), dated as ofDecember 11, 2015, among OSI RESTAURANT PARTNERS, LLC, a Delaware limited liability company (the “ Borrower ”), OSIHOLDCO, INC., a Delaware corporation (“ Holdings ”), the Subsidiary Guarantors (as defined in the Credit Agreement referred to below)party hereto, each of the Lenders party hereto that is consenting to the amendments set forth in Section 1 below (collectively, the “Consenting Lenders ”), each of the Lenders party hereto that has committed to make the Incremental Term A-1 Loan (as defined below)(collectively, the “ Incremental Term A-1 Loan Lenders ”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrativeagent (the “ Administrative Agent ”). Unless otherwise indicated, all capitalized terms used herein and not otherwise defined herein shall havethe respective meanings provided such terms in the Credit Agreement referred to below.W I T N E S S E T H:WHEREAS, the Borrower, Holdings, the lenders party thereto (the “ Lenders ”), the Administrative Agent and the other partiesthereto have entered into that certain Credit Agreement, dated as of October 26, 2012 (as amended prior to the date hereof, the “ CreditAgreement ”);WHEREAS, the Borrower hereby requests an Incremental Term A Loan in an aggregate principal amount of $150,000,000, inaccordance with Section 2.16(a) of the Credit Agreement (the “ Incremental Term A-1 Loan ”);WHEREAS, the Incremental Term A-1 Loan is anticipated to be used by the Borrower to repay a portion of the outstandingRevolving Credit Loans and to pay fees and expenses in connection with this Amendment;WHEREAS, subject to the terms of this Amendment, each of the Incremental Term A-1 Loan Lenders party hereto have severallycommitted (such several commitments, the “ Incremental Term A-1 Loan Commitments ”) to make the Incremental Term A-1 Loan;NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency ofwhich are hereby acknowledged, it is agreed as follows:SECTION 1. Amendments to Credit Agreement . Effective as of the Fifth Amendment Effective Date (as defined below) andsubject to the terms and conditions set forth herein and in reliance upon representations and warranties set forth herein, the Credit Agreementis hereby amended as follows:(a) clause (G) of the definition of “Cumulative Growth Amount” in Section 1.01 of the Credit Agreement is hereby amended todelete clause (ii) therein and to renumber clause (iii) as clause (ii);(b) clause (b)(viii) of the definition of “Excess Cash Flow” in Section 1.01 of the Credit Agreement is hereby amended by replacingthe reference therein to “ Section 7.06(g) , (h)(iii) , (i) and (m) ” with “ Section 7.06(g) , (h)(iii) and (m) ”;(c) Section 2.06(b)(i) of the Credit Agreement is hereby amended by replacing the reference in the proviso therein to “2.50:1.00”with “3.00:1.00”;(d) Article VI of the Credit Agreement is hereby amended by adding the following new Section 6.18:“Section 6.18 Compliance with Anti-Corruption Laws and Sanctions . The Borrower will maintain in effect and enforcepolicies and procedures designed to ensure compliance in all material respects by, to the extent applicable, Holdings, the Borrower,the Borrower’s Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicableSanctions.”(e) Article VII of the Credit Agreement is hereby amended by adding the following new Section 7.15:“Section 7.15 Sanctions; Anti-Corruption Laws .(a) None of Holdings, the Borrower or any of the Borrower’s Subsidiaries will directly or, to the knowledge of Holdings,the Borrower or any of the Borrower’s Subsidiaries, indirectly, use the proceeds of any Credit Extension in violation of applicableSanctions or otherwise knowingly make available such proceeds to any Person for the purpose of financing the activities of anySanctioned Person, except to the extent licensed, exempted or otherwise approved by a competent governmental body responsible forenforcing such Sanctions.(b) None of Holdings, the Borrower or any of the Borrower’s Subsidiaries will directly or, to the knowledge of Holdings,the Borrower or any of the Borrower’s Subsidiaries, indirectly, use the proceeds of any Credit Extension for any purpose whichwould breach any Anti-Corruption Laws in any material respect.”(f) Section 7.02(m) of the Credit Agreement is hereby amended by replacing the reference therein to “ Section 7.06(h) , (i) , (j) or(k) ” with “ Section 7.06(h) , (k) or (o) ”;(g) Section 7.02 of the Credit Agreement is hereby amended by adding the following new clause (x):“(x) intercompany Investments (including the creation of intercompany Indebtedness and/or the prepayment of existingintercompany Indebtedness, together with the related Investments and Guarantees of such Indebtedness) relating to the transfer ofcash from the Asian operations of the Borrower and its Restricted Subsidiaries in an aggregate outstanding amount of suchInvestments pursuant to this Section 7.02(x) not to exceed $40,000,000.”(h) Section 7.03(j) of the Credit Agreement is hereby amended by deleting the reference in the “provided, further” clause therein to“or (j) ”;(i) Section 7.06(g) of the Credit Agreement is hereby amended by replacing the reference in the “provided, further” clause thereinto “ Section 7.06(g) , (j) or (m) ” with “ Section 7.06(g) or (m) ”;(j) Section 7.06(i) of the Credit Agreement is hereby deleted in its entirety and replaced with “[Reserved]”;(k) Section 7.06(j) of the Credit Agreement is hereby deleted in its entirety and replaced with “[Reserved]”;2(l) Section 7.06(p) of the Credit Agreement is hereby amended by replacing the reference therein to “2.50:1.00” with “3.00:1.00”;(m) Section 7.06 of the Credit Agreement is hereby amended by adding the following new clause (q):“(q) so long as, on the date of declaration thereof, (i) no Default shall have occurred and be continuing or would resulttherefrom and (ii) immediately after giving effect to such Restricted Payment, the Borrower and the Restricted Subsidiaries shall be inPro Forma Compliance with the Financial Covenant, the Borrower may declare and pay regular quarterly dividends (excluding anyspecial or one-time dividends) that have been approved by the Borrower’s board of directors.”(n) Section 7.13(a) of the Credit Agreement is hereby amended by deleting the following:“, together with the aggregate amount of (1) Restricted Payments made pursuant to Section 7.06(i) and (2) loans and advances toHoldings made pursuant to Section 7.02(m) in lieu of Restricted Payments permitted by Section 7.06(i) ,”(o) Section 7.13(c) of the Credit Agreement is hereby amended by adding the following proviso:“ provided that the Master Lease may be amended, amended and restated or otherwise modified to facilitate financing sought by NewPrivate Restaurant Properties, LLC in a manner reasonably acceptable to the Administrative Agent.”(p) Section 7.14(v) of the Credit Agreement is hereby amended and restated in its entirety as follows:“(v) financing activities, including the issuance of securities, incurrence of debt, payment of dividends, making contributions to thecapital of the Borrower, making loans to, or contributions to the capital of, one or more Specified Lease Entities with the proceeds ofloans and/or Restricted Payments made pursuant to Section 7.02(m) or Section 7.06(o) , making loans to the Borrower andguaranteeing the obligations of the Borrower to the extent not prohibited under this Agreement (it being understood for the avoidanceof doubt, and without limitation, that proceeds received by Holdings from the Borrower pursuant to clauses (c), (g) and (o) of Section7.06 may only be used (or further distributed to a parent for use) for purposes contemplated in such clauses),”SECTION 2. Incremental Term A-1 Loan .(a) The Administrative Agent and each Incremental Term A-1 Loan Lender hereby agrees that this Amendment constitutes anIncremental Loan Request pursuant to Section 2.16(a) of the Credit Agreement.(b) The Borrower hereby acknowledges that the Incremental Term A-1 Loan is being made under Section 2.16(d)(iv)(B) .(c) Each Incremental Term A-1 Loan Lender severally agrees to make a single loan in Dollars to the Borrower on the FifthAmendment Effective Date in accordance with Article II of the3Credit Agreement and this Amendment in an amount equal to its Incremental Term A-1 Loan Commitment set forth opposite suchIncremental Term A-1 Loan Lender’s name on Schedule 1 hereto.(d) On and as of the Fifth Amendment Effective Date, each Incremental Term A-1 Loan Lender (i) shall be deemed to be an“Incremental Term Lender” as defined in the Credit Agreement with an “Incremental Term A Commitment” as defined in the CreditAgreement, (ii) shall perform all of the obligations that a required to be performed by it as such under the Loan Documents and (iii) shall beentitled to the benefits, rights and remedies as such set forth in the Loan Documents.(e) Except to the extent otherwise set forth herein, the terms and conditions applicable to the Incremental Term A-1 Loan shall bethe same as the terms and conditions applicable to the Term A Loans. Without limiting the generality of the foregoing, the parties heretoagree that the Incremental Term A-1 Loan shall (i) bear interest at the same interest rate (including the Applicable Rate) applicable to theoutstanding Term A Loans, (ii) mature on the Maturity Date for the Term A Loans, (iii) share ratably in all payments (including all optionaland mandatory prepayments) with the outstanding Term A Loans and (iv) be repaid (A) in consecutive quarterly installments on the lastBusiness Day of each of March, June, September and December, commencing March 31, 2016, in the aggregate outstanding principal amountas set forth below (which payments shall be reduced as a result of the application of prepayments in accordance with the order of priority setforth in Section 2.06 of the Credit Agreement): FISCAL YEARPAYMENT DATEPRINCIPAL INSTALLMENT2016March 31, 2016$1,875,000June 30, 2016$1,875,000September 30, 2016$2,812,500December 31, 2016$2,812,5002017March 31, 2017$2,812,500June 30, 2017$2,812,500September 30, 2017$2,812,500December 31, 2017$2,812,5002018March 31, 2018$2,812,500June 30, 2018$2,812,500September 30, 2018$3,750,000December 31, 2018$3,750,0002019March 31, 2019$3,750,000Maturity Date for Term A LoansThe aggregate outstandingprincipal amount of allIncremental Term A-1 Loansand (B) on the Maturity Date for the Term A Loans, in the aggregate principal amount of all Incremental Term A-1 Loans outstanding onsuch date.(f) This Amendment shall (i) be deemed to be an “Incremental Amendment” in accordance with Section 2.16(f) of the CreditAgreement and (ii) constitute a “Loan Document” for all purposes of the Credit Agreement and the other Loan Documents.4SECTION 3. Acknowledgement and Confirmation . Each of the Loan Parties party hereto hereby agrees that with respect to eachLoan Document to which it is a party, after giving effect to the Amendment and the transactions contemplated hereunder:(a) all of its obligations, liabilities and indebtedness under such Loan Document, including guarantee obligations, shall, except asexpressly set forth herein or in the Credit Agreement, remain in full force and effect on a continuous basis; and(b) all of the Liens and security interests created and arising under such Loan Document remain in full force and effect on acontinuous basis, and the perfected status and priority to the extent provided for in Section 5.19 of the Credit Agreement of each such Lienand security interest continues in full force and effect on a continuous basis, unimpaired, uninterrupted and undischarged as collateral securityfor the Obligations, to the extent provided in such Loan Documents.SECTION 4. Conditions of Effectiveness of this Amendment . This Amendment shall become effective on the date when thefollowing conditions shall have been satisfied or waived (such date, the “ Fifth Amendment Effective Date ”):(a) The Administrative Agent’s receipt of the following, each of which shall be originals or facsimiles (followed promptly byoriginals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each in form and substancereasonably satisfactory to the Administrative Agent and its legal counsel:(i) this Amendment, duly executed by Holdings, the Borrower, the Subsidiary Guarantors existing as of the FifthAmendment Effective Date, the Administrative Agent, the Required Lenders, the Consenting Lenders and the Incremental Term A-1Loan Lenders;(ii) a Note executed by the Borrower in favor of each Incremental Term A-1 Loan Lender that has requested a Note at leasttwo (2) Business Days in advance of the Fifth Amendment Effective Date;(iii) a certificate of a Responsible Officer of each Loan Party certifying as to the incumbency and genuineness of thesignature of each officer of such Loan Party executing Loan Documents to which it is a party and certifying that (A) the articles orcertificate of incorporation or formation (or equivalent), as applicable, of such Loan Party have not been amended since the date ofthe last delivered certificate, or if they have been amended, attached thereto are true, correct and complete copies of the same,certified as of a recent date by the appropriate Governmental Authority in its jurisdiction of incorporation, organization or formation(or equivalent), as applicable, (B) the bylaws or other governing document of such Loan Party have not been amended since the dateof the last delivered certificate, or if they have been amended, attached thereto are true, correct and complete copies of the same, (C)attached thereto is a true, correct and complete copy of resolutions duly adopted by the board of directors (or other governing body)of Loan Party authorizing and approving the transactions contemplated hereunder and the execution, delivery and performance of thisAmendment and (D) attached thereto is a true, correct and complete copy of such certificates of good standing (including bring downcertificates) from the applicable secretary of state of the state of incorporation, organization or formation (or equivalent), asapplicable, of each Loan Party; and(iv) opinion from Buchanan Ingersoll & Rooney PC, New York counsel to the Loan Parties, substantially in form andsubstance reasonably satisfactory to the Administrative Agent.5(b) Payment of all fees and expenses of the Administrative Agent and Wells Fargo Securities, LLC, and in the case of expenses, tothe extent invoiced at least three (3) Business Days prior to the Fifth Amendment Effective Date (except as otherwise reasonably agreed to bythe Borrower), required to be paid on the Fifth Amendment Effective Date.(c) Payment of all fees to the Lenders required to be paid on the Fifth Amendment Effective Date.(d) Except as set forth in Section 7 of this Amendment, the representations and warranties in Section 8 of this Amendment shall betrue and correct as of the Fifth Amendment Effective Date.For purposes of determining compliance with the conditions specified in this Section 4 , each Lender that has signed this Amendment shall bedeemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consentedto or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender priorto the proposed Fifth Amendment Effective Date specifying its objection thereto.SECTION 5. Costs and Expenses . The Borrower hereby reconfirms its obligations pursuant to Section 10.04 of the CreditAgreement to pay and reimburse the Administrative Agent in accordance with the terms thereof.SECTION 6. Conditions Subsequent . By December 31, 2015 (which date may be extended by the Administrative Agent in its solediscretion), the Borrower shall deliver to the Administrative Agent a certificate of good standing from the secretary of state of the state offormation of Outback of Laurel, LLC.SECTION 7. Consent . The Borrower has informed the Administrative Agent that Outback of Laurel, LLC is currently not in goodstanding in its state of formation as a result of failing to timely file its personal property tax return. Pursuant to Section 6 of this Amendment,the Administrative Agent and the Lenders have given the Borrower until December 31, 2015 to provide evidence that Outback of Laurel,LLC is in good standing. Notwithstanding the foregoing, by their execution hereof, each of the Administrative Agent and the Lenders herebyagree that (i) subject to compliance with Section 6 of this Amendment, such failure to be in good standing shall not constitute a violation ofthe representations, warranties or covenants under the Credit Agreement and (ii) the Borrower may still borrow under the Credit Agreement(including, without limitation, the Incremental Term A-1 Loans).SECTION 8. Representations and Warranties . To induce the Administrative Agent and the other Lenders to enter into thisAmendment, each Loan Party represents and warrants to the Administrative Agent and the other Lenders on and as of the Fifth AmendmentEffective Date that, in each case:(a) except as set forth in Section 7 of this Amendment, the representations and warranties of each Loan Party set forth in Article Vof the Credit Agreement and in each other Loan Document are true and correct in all material respects on and as of the Fifth AmendmentEffective Date with the same effect as though made on and as of such date, except to the extent such representations and warranties expresslyrelate to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date; provided that anyrepresentation and warranty that is qualified as to “materiality,” “Material Adverse Effect” or similar language shall be true and correct (aftergiving effect to any qualification therein) in all respects on such respective dates; and(b) no Default or Event of Default exists and is continuing.6SECTION 9. Reference to and Effect on the Credit Agreement and the Loan Documents .(a) On and after the Fifth Amendment Effective Date, each reference in the Credit Agreement to “this Agreement,” “herein,”“hereto”, “hereof” and “hereunder” or words of like import referring to the Credit Agreement, and each reference in the Notes and each of theother Loan Documents to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, shallmean and be a reference to the Credit Agreement, as amended by this Amendment.(b) The Credit Agreement and each of the other Loan Documents, as specifically amended by this Amendment, are and shallcontinue to be in full force and effect and are hereby in all respects ratified and confirmed.(c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiverof any right, power or remedy of any Lender or the Administrative Agent under any of the Loan Documents, nor constitute a waiver of anyprovision of any of the Loan Documents. Without limiting the generality of the foregoing, the Collateral Documents in effect immediatelyprior to the date hereof and all of the Collateral described therein in existence immediately prior to the date hereof do and shall continue tosecure the payment of all Obligations of the Loan Parties under the Loan Documents, in each case, as amended by this Amendment.SECTION 10. Governing Law . THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCEWITH, THE LAW OF THE STATE OF NEW YORK.SECTION 11. Counterparts . This Amendment may be executed in any number of counterparts and by the different parties heretoon separate counterparts, each of which counterparts when executed and delivered shall be an original, but all of which shall togetherconstitute one and the same instrument. Delivery by facsimile or electronic transmission of an executed counterpart of a signature page to thisAmendment shall be effective as delivery of an original executed counterpart of this Amendment.[The remainder of this page is intentionally left blank.]7IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Amendment as ofthe date first above written. OSI RESTAURANT PARTNERS, LLC, as Borrower By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent OSI HOLDCO, INC., as Holdings By:/s/ Elizabeth Smith Name: Elizabeth Smith Title: Director BLOOMIN’ BRANDS GIFT CARD SERVICES, LLC OS RESTAURANT SERVICES, LLC OUTBACK DESIGNATED PARTNER, LLC OUTBACK KANSAS LLC By: OUTBACK STEAKHOUSE OF FLORIDA, LLC, its member By: OSI RESTAURANT PARTNERS, LLC, its member By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page BONEFISH GRILL GULF COAST OF LOUISIANA, LLC By: BONEFISH/GULF COAST, LIMITED PARTNERSHIP, its managing member By: BONEFISH GRILL, LLC, its general partner By: OSI RESTAURANT PARTNERS, LLC, its managing member By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent BONEFISH OF BEL AIR, LLC BONEFISH GRILL OF FLORIDA, LLC By: BONEFISH GRILL, LLC, its managing member By: OSI RESTAURANT PARTNERS, LLC, its managing member By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent BONEFISH GRILL, LLC By: OSI RESTAURANT PARTNERS, LLC, its managing member By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page BONEFISH KANSAS DESIGNATED PARTNER, LLC By: BONEFISH KANSAS LLC, its member By: BONEFISH GRILL, LLC, its member By: OSI RESTAURANT PARTNERS, LLC, its managing member By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent BONEFISH/ASHEVILLE, LIMITED PARTNERSHIP BONEFISH/CAROLINAS, LIMITED PARTNERSHIP BONEFISH/COLUMBUS-I, LIMITED PARTNERSHIP BONEFISH/CRESCENT SPRINGS, LIMITED PARTNERSHIP BONEFISH/GREENSBORO, LIMITED PARTNERSHIP BONEFISH/GULF COAST, LIMITED PARTNERSHIP BONEFISH/HYDE PARK, LIMITED PARTNERSHIP BONEFISH/SOUTHERN, LIMITED PARTNERSHIP By: BONEFISH GRILL, LLC, its general partner By: OSI RESTAURANT PARTNERS, LLC, its managing member By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page BONEFISH/SOUTH FLORIDA-I, LIMITED PARTNERSHIP By: BONEFISH GRILL OF FLORIDA, LLC, its general partner By: BONEFISH GRILL, LLC, its managing member By: OSI RESTAURANT PARTNERS, LLC, its managing member By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent BONEFISH BEVERAGES, LLC BONEFISH HOLDINGS, LLC CIGI BEVERAGES OF TEXAS, LLC CIGI HOLDINGS, LLC By:/s/ Joseph J. Kadow Name: Joseph J. Kadow Title: Manager OUTBACK BEVERAGES OF TEXAS, LLC OBTEX HOLDINGS, LLC By:/s/ Joseph J. Kadow Name: Joseph J. Kadow Title: Manager OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page BONEFISH BRANDYWINE, LLC BONEFISH DESIGNATED PARTNER, LLC BONEFISH KANSAS LLC By: BONEFISH GRILL, LLC, its member By: OSI RESTAURANT PARTNERS, LLC, its managing member By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent BONEFISH GRILL OF FLORIDA DESIGNATED PARTNER, LLC By: BONEFISH GRILL OF FLORIDA, LLC, its member By: BONEFISH GRILL, LLC, its managing member By: OSI RESTAURANT PARTNERS, LLC, its managing member By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page BFG NEBRASKA, INC. BFG OKLAHOMA, INC. BOOMERANG AIR, INC. CIGI NEBRSKA, INC. CIGI OKLAHOMA, INC. OS MANAGEMENT, INC. OS MORTGAGE HOLDINGS, INC. OSF NEBRASKA, INC. OSF OKLAHOMA, INC. OUTBACK ALABAMA, INC. OUTBACK CATERING, INC. OUTBACK & CARRABBA’S OF NEW MEXICO, INC. By:/s/ David J. Deno Name: David J. Deno Title: Chief Financial and Administrative Officer & Executive Vice President OSI CO-ISSUER, INC. By:/s/ Elizabeth Smith Name: Elizabeth Smith Title: Director OS ASSET, INC. By:/s/ Joseph J. Kadow Name: Joseph J. Kadow Title: Executive Vice President, Chief Legal Officer, Secretary & President CARRABBA’S DESIGNATED PARTNER, LLC CARRABBA’S KANSAS LLC By: CARRABBA’S ITALIAN GRILL, LLC, its member By: OSI RESTAURANT PARTNERS, LLC, its member By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page CARRABBA’S ITALIAN GRILL OF HOWARD COUNTY, INC. By:/s/ Kenneth Russo Name: Kenneth Russo Title: Secretary, Treasurer & President CARRABBA’S ITALIAN GRILL, LLC OS REALTY, LLC OUTBACK STEAKHOUSE OF FLORIDA, LLC PRIVATE RESTAURANT MASTER LESSEE, LLC By: OSI RESTAURANT PARTNERS, LLC, its member By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent CARRABBA’S KANSAS DESIGNATED PARTNER, LLC By: CARRABBA’S KANSAS LLC, its member By: CARRABBA’S ITALIAN GRILL, LLC, its member By: OSI RESTAURANT PARTNERS, LLC, its member By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page CARRABBA’S OF BOWIE, LLC By: CARRABBA’S ITALIAN GRILL, LLC, its managing member By: OSI RESTAURANT PARTNERS, LLC, its member By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent CARRABBA’S OF GERMANTOWN, INC. CARRABBA’S OF WALDORF, INC. By: CARRABBA’S ITALIAN GRILL, LLC, its managing member By: OSI RESTAURANT PARTNERS, LLC, its member By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page CARRABBA’S/BIRMINGHAM 280, LIMITED PARTNERSHIP CARRABBA’S/COOL SPRINGS, LIMITED PARTNERSHIP CARRABBA’S/DEERFIELD TOWNSHIP, LIMITED PARTNERSHIP CARRABBA’S/GREEN HILLS, LIMITED PARTNERSHIP CARRABBA’S/LEXINGTON, LIMITED PARTNERSHIP CARRABBA’S/LOUISVILLE, LIMITED PARTNERSHIP CARRABBA’S/METRO, LIMITED PARTNERSHIP CARRABBA’S/MICHIGAN, LIMITED PARTNERSHIP CARRABBA’S/MONTGOMERY, LIMITED PARTNERSHIP CARRABBA’S/ROCKY TOP, LIMITED PARTNERSHIP By: CARRABBA’S ITALIAN GRILL, LLC, its general partner By: OSI RESTAURANT PARTNERS, LLC, its member By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent By: CARRABBA’S DESIGNATED PARTNER, LLC, its general partner By: CARRABBA’S ITALIAN GRILL, LLC, its member By: OSI RESTAURANT PARTNERS, LLC, its member By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page CARRABBA’S/DC-I, LIMITED PARTNERSHIP CARRABBA’S/MID ATLANTIC-I, LIMITED PARTNERSHIP By: CARRABBA’S ITALIAN GRILL, LLC, its general partner By: OSI RESTAURANT PARTNERS, LLC, its member By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent CIGI/BFG OF EAST BRUNSWICK PARTNERSHIP By: CARRABBA’S ITALIAN GRILL, LLC, its general partner By: OSI RESTAURANT PARTNERS, LLC, its member By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent By: BONEFISH GRILL, LLC, its general partner By: OSI RESTAURANT PARTNERS, LLC, its managing member By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page OUTBACK OF ASPEN HILL, INC. OUTBACK OF GERMANTOWN, INC. By: OUTBACK STEAKHOUSE OF FLORIDA, LLC By: OSI RESTAURANT PARTNERS, LLC, its managing member By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent FREDERICK OUTBACK, INC. By:/s/ Stephen S. Newton Name: Stephen S. Newton Title: Treasurer, President & Secretary OSF/BFG OF DEPTFORD PARTNERSHIP OSF/BFG OF LAWRENCEVILLE PARTNERSHIP By: OUTBACK STEAKHOUSE OF FLORIDA, LLC, its general partner By: OSI RESTAURANT PARTNERS, LLC, its member By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent By: BONEFISH GRILL, LLC, its general partner By: OSI RESTAURANT PARTNERS, LLC, its managing member By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page OSF/CIGI OF EVESHAM PARTNERSHIP OUTBACK/CARRABBA’S PARTNERSHIP By: OUTBACK STEAKHOUSE OF FLORIDA, LLC, its general partner By: OSI RESTAURANT PARTNERS, LLC, its member By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent By: CARRABBA’S ITALIAN GRILL, LLC, its general partner By: OSI RESTAURANT PARTNERS, LLC, its member By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent OUTBACK KANSAS DESIGNATED PARTNER, LLC By: OUTBACK KANSAS LLC, its member By: OUTBACK STEAKHOUSE OF FLORIDA, LLC, its member By: OSI RESTAURANT PARTNERS, LLC, its member By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page OUTBACK STEAKHOUSE WEST VIRGINIA, INC. By:/s/ Joseph J. Kadow Name: Joseph J. Kadow Title: Director, Secretary, Vice President & Treasurer OUTBACK STEAKHOUSE-NYC, LTD. OUTBACK/DC, LIMITED PARTNERSHIP OUTBACK/MID ATLANTIC-I, LIMITED PARTNERSHIP OUTBACK/STONE-II, LIMITED PARTNERSHIP By: OUTBACK STEAKHOUSE OF FLORIDA, LLC, its general partner By: OSI RESTAURANT PARTNERS, LLC, its member By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent OUTBACK CATERING DESIGNATED PARTNER, LLC By: OUTBACK CATERING, INC., its member By:/s/ David J. Deno Name: David J. Deno Title: Chief Financial and Administrative Officer & Executive Vice President OUTBACK OF LAUREL, LLC By: OUTBACK STEAKHOUSE OF FLORIDA, LLC, the Sole Manager By: OSI RESTAURANT PARTNERS, LLC, its members By:/s/ Tian Zhang Name: Tian Zhang Title: Authorized Agent OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, Swing Line Lender, Collateral Agent, an L/C Issuer, a Consenting Lender and Incremental Term A-1 Loan Lender By:/s/ Darcy McLaren Name:Darcy McLaren Title:Director OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page BANK OF AMERICA, N.A., as an Incremental Term A-1 Loan Lender and a Consenting Lender By:/s/ Aron Frey Name:Aron Frey Title:Assistant Vice President OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page JPMORGAN CHASE BANK, N.A., as an Incremental Term A-1 Loan Lender and a Consenting Lender By:/s/ Lauren Baker Lauren Baker Vice President OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page COÖPERATIEVE CENTRALE RAIFFEISEN- BOERENLEENBANK B.A. "RABOBANK NEDERLAND", NEW YORK BRANCH, as an Incremental Term A-1 Loan Lender and a Consenting Lender By:/s/ Adriaan Weststrate Name:Adriaan Weststrate Title:Managing Director By:/s/ Claire Laury Name:Claire Laury Title:Executive Director OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page US BANK NATIONAL ASSOCIATION, as an Incremental Term A-1 Loan Lender and a Consenting Lender By:/s/ Steven L. Sawyer Name:Steven L. Sawyer Title:Senior Vice President OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page REGIONS BANK, as an Incremental Term A-1 Loan Lender and a Consenting Lender By:/s/ Scott C. Tocci Name:Scott C. Tocci Title:Managing Director OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page CITIZENS BANK N.A., as an Incremental Term A-1 Loan Lender and a Consenting Lender By:/s/ John P. Dysart John P. Dysart Sr. Vice President OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page HSBC BANK USA, NATIONAL ASSOCIATION, as an Incremental Term A-1 Loan Lender and a Consenting Lender By:/s/ Rafael De Paoli Name:Rafael De Paoli Title:Senior Vice President OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page FIFTH THIRD BANK, as an Incremental Term A-1 Loan Lender and a Consenting Lender By:/s/ John A. Marian Name:John A. Marian Title:Vice President OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page PNC BANK N.A as an Incremental Term A-1 Loan Lender and a Consenting Lender By:/s/ John Astrab Name:John Astrab Title:Vice President, Relationship Manager OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page TD BANK N.A., as an Incremental Term A-1 Loan Lender and a Consenting Lender By:/s/ Alan Garson Name:Alan Garson Title:Senior Vice President OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page CADENCE BANK NA, as an Incremental Term A-1 Loan Lender and a Consenting Lender By:/s/ John M. Huss Name:John M. Huss Title:Managing Director OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page The Bank of Tokyo-Mitsubishi UFJ, Ltd., as an Incremental Term A-1 Loan Lender and a Consenting Lender By:/s/ Christine Howatt Name:Christine Howatt Title:Authorized Signatory OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page SUMITOMO MITSUI BANKING CORPORATION, as an Incremental Term A-1 Loan Lender and a Consenting Lender By:/s/ David W. Kee Name:David W. Kee Title:Managing Director OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page FIRST TENNESSEE BANK, NATIONAL ASSOCIATION, an Incremental Term A-1 Loan Lender and a Consenting Lender By:/s/ John R. Schmitt Name:John R. Schmitt Title:Senior Vice President OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page USAMERIBANK, as an Incremental Term A-1 Loan Lender and a Consenting Lender By:/s/ Ronald L. Ciganek Name:Ronald L. Ciganek Title:Senior Vice President OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page [FLORIDA COMMUNITY BANK, N.A.], as a Consenting Lender By:/s/ Jonathan Simoens Name:Jonathan Simoens Title:SVP OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page GOLDMAN SACHS BANK USA, as a Consenting Lender By:/s/ Michelle Latzoni Name:MICHELLE LATZONI Title:AUTHORIZED SIGNATORY OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page MORGAN STANLEY BANK, N.A., as a Consenting Lender By:/s/ John Durland Name:John Durland Title:Authorized Signatory OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page DEUTSCHE BANK AG NEW YORK BRANCH, as a Consenting Lender By:/s/ Dusan Lazarov Name:Dusan Lazarov Title:Director By:/s/ Anca Trifan Name:Anca Trifan Title:Managing Director OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature Page RAYMOND JAMES BANK, N.A., as a Consenting Lender By:/s/ Mike Pelletier Name:Mike Pelletier Title:Senior Vice President OSI Restaurant Partners LLCFifth Amendment to Credit Agreement and Incremental AmendmentSignature PageSchedule 1(as of the Fifth Amendment Effective Date)Incremental Term A-1 Loan LenderIncremental Term A-1 Loan CommitmentWells Fargo Bank, National Association$15,000,000.00Bank of America, N.A.$30,000,000.00JPMorgan Chase Bank, N.A.$5,000,000.00Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. “Rabobank Nederland”, New YorkBranch$15,000,000.00U.S. Bank, National Association$10,000,000.00Regions Bank$9,000,000.00Citizens Bank, N.A.$7,500,000.00HSBC Bank USA, National Association$7,500,000.00Fifth Third Bank$10,000,000.00PNC Bank, National Association$10,000,000.00TD Bank, N.A.$10,000,000.00Cadence Bank NA$5,500,000.00The Bank of Tokyo-Mitsubishi UFJ, Ltd.$5,000,000.00Sumitomo Mitsui Banking Corporation$5,000,000.00First Tennessee Bank National Association$3,500,000.00USAmeriBank$2,000,000.00Total$150,000,000.00 Exhibit 10.56 March 12, 2015Gregg ScarlettTampa, FLDear Gregg,This letter agreement confirms the verbal promotional offer extended to you to be Bloomin’ Brands, Inc. (the “Company”) Executive VicePresident, President – Bonefish Grill, reporting to me. Your start date will be March 12, 2015. The terms of your employment will be:You will be employed by a subsidiary of the Company (the “Employer”) and will be paid an annual base salary of $450,000 payable in equalbi-weekly installments.You will continue to be eligible to participate in the Company’s annual bonus program at a target bonus of 85% of your base salary based onboth Company performance against objectives as set forth in the Company bonus program and individual performance. Your bonus payoutfor the 2015 calendar year will be prorated based on your start date through the end of the fiscal year, provided that you remain employed bythe Employer through the payout date. In addition to your annual bonus, you will continue to be eligible for the 2016 annual long-term incentive grant. Per the current plan, you maybe eligible for a target up to 100% of your base salary, which will be subject to company and individual performance.The Company will issue you a one-time grant of 100,000 stock options and a one-time grant of 25,000 restricted stock units. Both grants willhave standard vesting of four years contingent on continued employment with the Company or the Employer. All grants are subject to theterms of our 2012 Equity Plan (the “Plan”) and our standard award agreement. Our standard equity agreement includes a “double trigger”provision to protect you in the event of a change-in-control. The details of the Plan and the form of grant agreement will be provided to youseparately.You will be eligible to participate in the following benefits as applicable and in accordance with the terms of Company policy:•Medical Benefits Plan•Annual Executive Medical Check-Up•Salaried Short-Term Disability Insurance•Salaried Long-Term Disability Insurance•Company Paid Group Term Life Insurance• Company Paid Accidental Death and Dismemberment• Dental Benefits Plan• Vision Benefits Plan• Non-Qualified Deferred Compensation Plan• Comp Meal Benefit Program In the ordinary course of business, pay and benefit plans continue to evolve as business needs and laws change. To the extent the Company orthe Employer determines it to be necessary or desirable to change or eliminate any of the plans or programs in which you participate, suchchanges will apply to you as they do to other similarly situated employees.As a condition of your employment, please note the following:While it is our sincere hope and belief that our relationship will be mutually beneficial, the Company and the Employer do not offeremployment for a specified term. Any statements made to you in this letter and in meetings should not be construed in any manner as aproposed contract for any such term. Both you and the Employer may terminate employment at any time, with or without prior notice, for anyor no reason, and with or without cause.As a further condition of your employment you agree to the following:Restrictive Covenant - Non-competition1. During Employment . You will devote one hundred percent (100%) of your full business time, attention, energies, and effort to thebusiness affairs of the Employer and the Company. Except with the prior written consent of the Employer, during your employment with theCompany or the Employer, you shall not, individually or jointly with others, directly or indirectly, whether for your own account or for that ofany other person or entity, engage in or own or hold any ownership interest in any person or entity engaged in a full service restaurantbusiness, and the you shall not act as an officer, director, employee, partner, independent contractor, consultant, principal, agent, proprietor orin any other capacity for, nor lend any assistance (financial or otherwise) or cooperation to, any such person or entity. You shall not serve onthe board of directors or advisory committee of any other company without the prior consent of the Employer, which consent shall not beunreasonably withheld.2. Post Term. Commencing on termination your employment with the Employer, you shall not, individually or jointly with others, directlyor indirectly, whether for your own account or for that of any other person or entity, engage in or own or hold any ownership interest in anyperson or entity engaged in a full table service restaurant business and that is located or intended to be located anywhere within a radius ofthirty (30) miles of any full table service restaurant owned or operated by the Company, the Employer, their subsidiaries, franchisees oraffiliates, or any affiliates of any of the foregoing, or any proposed full table service restaurant to be owned or operated by any of theforegoing, and you shall not act as an officer, director, employee, partner, independent contractor, consultant, principal, agent, proprietor or inany other capacity for, nor lend any assistance (financial or otherwise) or cooperation to, any such person or entity for the time periodspecified below:a) If your employment with Employer ends for any other reason other than your voluntary resignation, then for a continuousperiod equal to the period of time used for calculating the amount of severance paid to you upon termination, if any; or(b) If your employment with the Employer ends as a result of your voluntary resignation or termination by the Employer forCause (as defined on Schedule 1), for a continuous period of one (1) year. For purposes of this Non-competition clause, restaurants owned or operated by the Company or the Employer shall include all restaurantsowned or operated by the Company, the Employer, their subsidiaries, franchisees or affiliates and any successor entity to the Company, theEmployer, their subsidiaries, franchisees or affiliates, and any entity in which the Company or the Employer, its subsidiaries or any of theiraffiliates has an interest, including but not limited to, an interest as a franchisor. The term “proposed restaurant” shall include all locations forwhich the Company, the Employer, or their franchisees or affiliates is conducting active, bona fide negotiations to secure a fee or leaseholdinterest with the intention of establishing a restaurant thereon.3. Limitation . It shall not be a violation of this Non-competition clause for Employee to own a one percent (1%) or smaller interest in anycorporation required to file periodic reports with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934,as amended, or successor statute.Restrictive Covenant - Non-disclosure; Non-solicitation; Non-piracy4. Except in the performance of the your duties hereunder, at no time during your employment with the Company or the Employer, or at anytime thereafter, shall you, individually or jointly with others, for your benefit of or for the benefit of any third party, publish, disclose, use orauthorize anyone else to publish, disclose or use any secret or confidential material or information relating to any aspect of the business oroperations of the Employer, the Company or any of their affiliates, including, without limitation, any secret or confidential informationrelating to the business, customers, trade or industrial practices, trade secrets, technology, recipes, product specifications, restaurant operatingtechniques and procedures, marketing techniques and procedures, financial data, processes, vendors and other information or know-how ofthe Employer, the Company or any of their affiliates, except (i) to the extent required by law, regulation or valid subpoena, or (ii) to the extentthat such information or material becomes publicly known or available through no fault of your own.5. Moreover, during your employment with the Employer and for two (2) years thereafter, except as is the result of a broad solicitation thatis not targeting employees of the Employer, the Company or any of their franchisees or affiliates, you shall not offer employment to, or hire,any employee of the Employer, the Company or any of their franchisees or affiliates, or otherwise directly or indirectly solicit or induce anyemployee of the Employer, the Company or any of their franchisees or affiliates to terminate his or her employment with the Employer, theCompany or any of their franchisees or affiliates; nor shall you act as an officer, director, employee, partner, independent contractor,consultant, principal, agent, proprietor, owner or part owner, or in any other capacity, of or for any person or entity that solicits or otherwiseinduces any employee of the Employer, the Company or any of their franchisees or affiliates to terminate his or her employment with theEmployer, the Company or any of their franchisees or affiliates. Restrictive Covenant - Company and Employer Property: Duty to Return6. All Employer and Company property and assets, including but not limited to products, recipes, product specifications, training materials,employee selection and testing materials, marketing and advertising materials, special event, charitable and community activity materials,customer correspondence, internal memoranda, products and designs, sales information, project files, price lists, customer and vendor lists,prospectus reports, customer or vendor information, sales literature, territory printouts, call books, notebooks, textbooks, and all other likeinformation or products, including but not limited to all copies, duplications, replications, and derivatives of such information or products,now in your possession or acquired by you while in the employ of the Employer shall be the exclusive property of the Employer and shall bereturned to the Employer no later than the date of your last day of work with the Employer.Restrictive Covenant - Inventions, Ideas, Processes, and Designs7. All inventions, ideas, recipes, processes, programs, software and designs (including all improvements) related to the business of theEmployer or the Company shall be disclosed in writing promptly to the Employer, and shall be the sole and exclusive property of theEmployer, if either (i) conceived, made or used by you during the course of the your employment with the Employer (whether or not actuallyconceived during regular business hours) or (ii) made or used by you for a period of six (6) months subsequent to the termination orexpiration of such employment. Any invention, idea, recipe, process, program, software or design (including an improvement) shall bedeemed “related to the business of the Employer or the Company” if (i) it was made with equipment, facilities or confidential information ofthe Employer or the Company, (ii) results from work performed by you for the Employer or the Company or (iii) pertains to the currentbusiness or demonstrably anticipated research or development work of the Employer or the Company. You shall cooperate with the Employerand its attorneys in the preparation of patent and copyright applications for such developments and, upon request, shall promptly assign allsuch inventions, ideas, recipes, processes and designs to the Employer. The decision to file for patent or copyright protection or to maintainsuch development as a trade secret shall be in the sole discretion of the Employer, and you shall be bound by such decision. You shallprovide, on the back of this Agreement, a complete list of all inventions, ideas, recipes, processes and designs if any, patented or unpatented,copyrighted or non-copyrighted, including a brief description, that you made or conceived prior to your employment with the Employer, andthat, therefore, are excluded from the scope of the employment with the Employer.The restrictive covenants contained in this agreement are given and made by you to induce the Employer to employ you and to enter into thisAgreement with you, and you hereby acknowledge that employment with the Employer is sufficient consideration for these restrictivecovenants. The restrictive covenants shall be construed as agreements independent of any other provision in this Agreement, and theexistence of any claim or cause of action you may have against the Employer or the Company, whether predicated upon this Agreement orotherwise, shall not constitute a defense to the enforcement of any restrictive covenant. The refusal or failure of the Employer or theCompany to enforce any restrictive covenant of this agreement (or any similar agreement) against any other employee, agent, or independentcontractor, for any reason, shall not constitute a defense to the enforcement by the Employer or the Company of any such restrictive covenant,nor shall it give rise to any claim or cause of action by you against the Employer or the Company. You agree that a breach of any of the restrictive covenants contained in this agreement will cause irreparable injury to the Employer and theCompany for which the remedy at law will be inadequate and would be difficult to ascertain and therefore, in the event of the breach orthreatened breach of any such covenants, the Employer and the Company shall be entitled, in addition to any other rights and remedies it mayhave at law or in equity, to obtain an injunction to restrain you from any threatened or actual activities in violation of any such covenants.You hereby consent and agree that temporary and permanent injunctive relief may be granted in any proceedings that might be brought toenforce any such covenants without the necessity of proof of actual damages, and in the event the Employer or the Company does apply forsuch an injunction, you shall not raise as a defense thereto that the Employer or the Company has an adequate remedy at law.For the avoidance of doubt, the termination of this agreement for any reason, shall not extinguish your obligations specified in theserestrictive covenants.ALL PARTIES TO THIS AGREEMENT KNOW AND UNDERSTAND THAT THEY HAVE A CONSTITUTIONAL RIGHT TO A JURYTRIAL. THE PARTIES ACKNOWLEDGE THAT ANY DISPUTE OR CONTROVERSY THAT MAY ARISE OUT OF THISAGREEMENT WILL INVOLVE COMPLICATED AND DIFFICULT FACTUAL AND LEGAL ISSUES.THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF OR RELATING TOTHIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS, WHETHER NOW EXISTING OR HEREAFTERARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. THE PARTIES AGREE THAT ANY OF THEMMAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARYAND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY AND THAT ANYPROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR ANY OF THE CONTEMPLATEDTRANSACTIONS SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUTA JURY.THE PARTIES INTEND THAT THIS WAIVER OF THE RIGHT TO A JURY TRIAL BE AS BROAD AS POSSIBLE. BY THEIRSIGNATURES BELOW, THE PARTIES PROMISE, WARRANT AND REPRESENT THAT THEY WILL NOT PLEAD FOR, REQUESTOR OTHERWISE SEEK TO HAVE A JURY TO RESOLVE ANY AND ALL DISPUTES THAT MAY ARISE BY, BETWEEN ORAMONG THEM.You shall be responsible for the payment of all taxes applicable to payments or benefits received from the Employer or the Company. It is theintent of the Employer and the Company that the provisions of this agreement and all other plans and programs sponsored by the Employerand the Company be interpreted to comply in all respects with Internal Revenue Code Section 409A, however, the Employer and theCompany shall have no liability to you, or any of your successors or beneficiaries, in the event taxes, penalties or excise taxes may ultimatelybe determined to be applicable to any payment or benefit received by you or your successors or beneficiaries.The validity, interpretation, and performance of this agreement shall be governed, interpreted, and construed in accordance with the laws ofthe State of Florida without giving effect to the principles of comity or conflicts of laws thereof. This letter constitutes the full commitments which have been extended to you and shall supersede any prior agreements whether oral orwritten. However, this does not constitute a contract of employment for any period of time. Should you have any questions regarding thesecommitments or your ability to conform to Bloomin’ Brands policies and procedures, please let me know immediately.By signing this offer, you indicate your acceptance of our offer. Please keep one original copy of this offer letter for your personal files.We look forward to having you join us as a member of our executive team. This signed offer letter and any accompanying documentationmust be returned to Pablo Brizi, Group VP - Human Resources by fax at 813-387-8466 or scanned at pablobrizi@bloominbrands.com.Sincerely,/s/ Elizabeth A. SmithLiz SmithChairman and Chief Executive Officer, Bloomin’ Brands, IncI accept the above offer to be employed by Bloomin’ Brands, Inc and I understand the terms as set forth above./s/ Gregg Scarlett 3-12-2015 Gregg Scarlett Date Schedule 1“Cause” shall be defined as:1. Your failure to perform the duties required of you in a manner satisfactory to the Employer, in its sole discretion after the Employerfollows the following procedures: (a) the Employer gives you a written notice (“Notice of Deficiency”) which shall specify the deficiencies inyour performance of duties; (b) you shall have a period of thirty (30) days, commencing on receipt of the Notice of Deficiency, in which tocure the deficiencies contained in the Notice of Deficiency; and (c) in the event you do not cure the deficiencies to the satisfaction of theEmployer, in its sole discretion, within such thirty (30) day period (or if during such thirty (30) day period the Employer determines that youare not making reasonable, good faith efforts to cure the deficiencies to the satisfaction of the Employer), the Employer shall have the right toimmediately terminate your employment for Cause. The provisions of this paragraph (1) may be invoked by the Employer any number oftimes and cure of deficiencies contained in any Notice of Deficiency shall not be construed as a waiver of this paragraph (1) nor prevent theEmployer from issuing any subsequent Notices of Deficiency; or2. Any dishonesty by you in the your dealings with the Company, the Employer or their affiliates; your commission of fraud, negligence inthe performance of your duties; insubordination; willful misconduct; or your conviction (or plea of guilty or nolo contendere), indictment orcharge with respect to, any felony, or any other crime involving dishonesty or moral turpitude; or3. Any violation of the restrictive covenants of this agreement or4. Any violation of any current or future material published policy of the Employer or its Affiliates (material published policies include, butare not limited to, the Employer’s discrimination and harassment policy, management dating policy, responsible alcohol policy, insidertrading policy, ethics policy and security policy); or5. For all purposes of this Agreement, termination for Cause shall be deemed to have occurred in the event of the Employee’s resignationwhen, because of existing facts and circumstances, subsequent termination for Cause can be reasonably foreseen. Exhibit 10.57 May 4, 2015Suk SinghOrlando, FLDear Suk,This letter agreement confirms the verbal promotional offer extended to you to be Bloomin’ Brands, Inc. (the “Company”) Executive VicePresident, Chief Development Officer and Franchising reporting to me. Your start date will be May 4, 2015. The terms of your employmentwill be:You will be employed by a subsidiary of the Company (the “Employer”) and will be paid an annual base salary of $475,000 payable in equalbi-weekly installments.You will be eligible to participate in the Company’s annual bonus program at a target bonus of 85% of your base salary based on bothCompany performance against objectives as set forth in the Company bonus program and individual performance. Your bonus payout for the2015 calendar year will be prorated based on your start date through the end of the fiscal year, provided that you remain employed by theEmployer through the payout date. In addition to your annual bonus, you will continue to be eligible for the 2016 annual long-term incentive grant. Per the current plan, you maybe eligible for a target up to 100% of your base salary, which will be subject to company and individual performance.The Company will issue you a one-time grant of 30,000 restricted stock units. Both grants will have standard vesting of four years contingenton continued employment with the Company or the Employer. All grants are subject to the terms of our 2012 Equity Plan (the “Plan”) andour standard award agreement. Our standard equity agreement includes a “double trigger” provision to protect you in the event of a change-in-control. The details of the Plan and the form of grant agreement will be provided to you separately.You will remain eligible to participate in the following benefits as applicable and in accordance with the terms of Company policy:•Medical Benefits Plan•Annual Executive Medical Check-Up•Salaried Short-Term Disability Insurance•Salaried Long-Term Disability Insurance•Company Paid Group Term Life Insurance• Company Paid Accidental Death and Dismemberment• Dental Benefits Plan• Vision Benefits Plan• Non-Qualified Deferred Compensation Plan• Comp Meal Benefit Program In the ordinary course of business, pay and benefit plans continue to evolve as business needs and laws change. To the extent the Company orthe Employer determines it to be necessary or desirable to change or eliminate any of the plans or programs in which you participate, suchchanges will apply to you as they do to other similarly situated employees.As a condition of your employment, please note the following:While it is our sincere hope and belief that our relationship will be mutually beneficial, the Company and the Employer do not offeremployment for a specified term. Any statements made to you in this letter and in meetings should not be construed in any manner as aproposed contract for any such term. Both you and the Employer may terminate employment at any time, with or without prior notice, for anyor no reason, and with or without cause.As a further condition of your employment you agree to the following:Restrictive Covenant - Non-competition1. During Employment . You will devote one hundred percent (100%) of your full business time, attention, energies, and effort to thebusiness affairs of the Employer and the Company. Except with the prior written consent of the Employer, during your employment with theCompany or the Employer, you shall not, individually or jointly with others, directly or indirectly, whether for your own account or for that ofany other person or entity, engage in or own or hold any ownership interest in any person or entity engaged in a full service restaurantbusiness, and the you shall not act as an officer, director, employee, partner, independent contractor, consultant, principal, agent, proprietor orin any other capacity for, nor lend any assistance (financial or otherwise) or cooperation to, any such person or entity. You shall not serve onthe board of directors or advisory committee of any other company without the prior consent of the Employer, which consent shall not beunreasonably withheld.2. Post Term. Commencing on termination your employment with the Employer, you shall not, individually or jointly with others, directlyor indirectly, whether for your own account or for that of any other person or entity, engage in or own or hold any ownership interest in anyperson or entity engaged in a full table service restaurant business and that is located or intended to be located anywhere within a radius ofthirty (30) miles of any full table service restaurant owned or operated by the Company, the Employer, their subsidiaries, franchisees oraffiliates, or any affiliates of any of the foregoing, or any proposed full table service restaurant to be owned or operated by any of theforegoing, and you shall not act as an officer, director, employee, partner, independent contractor, consultant, principal, agent, proprietor or inany other capacity for, nor lend any assistance (financial or otherwise) or cooperation to, any such person or entity for the time periodspecified below:a) If your employment with Employer ends for any other reason other than your voluntary resignation, then for a continuousperiod equal to the period of time used for calculating the amount of severance paid to you upon termination, if any; or(b) If your employment with the Employer ends as a result of your voluntary resignation or termination by the Employer forCause (as defined on Schedule 1), for a continuous period of one (1) year. For purposes of this Non-competition clause, restaurants owned or operated by the Company or the Employer shall include all restaurantsowned or operated by the Company, the Employer, their subsidiaries, franchisees or affiliates and any successor entity to the Company, theEmployer, their subsidiaries, franchisees or affiliates, and any entity in which the Company or the Employer, its subsidiaries or any of theiraffiliates has an interest, including but not limited to, an interest as a franchisor. The term “proposed restaurant” shall include all locations forwhich the Company, the Employer, or their franchisees or affiliates is conducting active, bona fide negotiations to secure a fee or leaseholdinterest with the intention of establishing a restaurant thereon.3. Limitation . It shall not be a violation of this Non-competition clause for Employee to own a one percent (1%) or smaller interest in anycorporation required to file periodic reports with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934,as amended, or successor statute.Restrictive Covenant - Non-disclosure; Non-solicitation; Non-piracy4. Except in the performance of the your duties hereunder, at no time during your employment with the Company or the Employer, or at anytime thereafter, shall you, individually or jointly with others, for your benefit of or for the benefit of any third party, publish, disclose, use orauthorize anyone else to publish, disclose or use any secret or confidential material or information relating to any aspect of the business oroperations of the Employer, the Company or any of their affiliates, including, without limitation, any secret or confidential informationrelating to the business, customers, trade or industrial practices, trade secrets, technology, recipes, product specifications, restaurant operatingtechniques and procedures, marketing techniques and procedures, financial data, processes, vendors and other information or know-how ofthe Employer, the Company or any of their affiliates, except (i) to the extent required by law, regulation or valid subpoena, or (ii) to the extentthat such information or material becomes publicly known or available through no fault of your own.5. Moreover, during your employment with the Employer and for two (2) years thereafter, except as is the result of a broad solicitation thatis not targeting employees of the Employer, the Company or any of their franchisees or affiliates, you shall not offer employment to, or hire,any employee of the Employer, the Company or any of their franchisees or affiliates, or otherwise directly or indirectly solicit or induce anyemployee of the Employer, the Company or any of their franchisees or affiliates to terminate his or her employment with the Employer, theCompany or any of their franchisees or affiliates; nor shall you act as an officer, director, employee, partner, independent contractor, consultant, principal, agent, proprietor, owner or part owner, or in any other capacity, of or for anyperson or entity that solicits or otherwise induces any employee of the Employer, the Company or any of their franchisees or affiliates toterminate his or her employment with the Employer, the Company or any of their franchisees or affiliates.Restrictive Covenant - Company and Employer Property: Duty to Return6. All Employer and Company property and assets, including but not limited to products, recipes, product specifications, training materials,employee selection and testing materials, marketing and advertising materials, special event, charitable and community activity materials,customer correspondence, internal memoranda, products and designs, sales information, project files, price lists, customer and vendor lists,prospectus reports, customer or vendor information, sales literature, territory printouts, call books, notebooks, textbooks, and all other likeinformation or products, including but not limited to all copies, duplications, replications, and derivatives of such information or products,now in your possession or acquired by you while in the employ of the Employer shall be the exclusive property of the Employer and shall bereturned to the Employer no later than the date of your last day of work with the Employer.Restrictive Covenant - Inventions, Ideas, Processes, and Designs7. All inventions, ideas, recipes, processes, programs, software and designs (including all improvements) related to the business of theEmployer or the Company shall be disclosed in writing promptly to the Employer, and shall be the sole and exclusive property of theEmployer, if either (i) conceived, made or used by you during the course of the your employment with the Employer (whether or not actuallyconceived during regular business hours) or (ii) made or used by you for a period of six (6) months subsequent to the termination orexpiration of such employment. Any invention, idea, recipe, process, program, software or design (including an improvement) shall bedeemed “related to the business of the Employer or the Company” if (i) it was made with equipment, facilities or confidential information ofthe Employer or the Company, (ii) results from work performed by you for the Employer or the Company or (iii) pertains to the currentbusiness or demonstrably anticipated research or development work of the Employer or the Company. You shall cooperate with the Employerand its attorneys in the preparation of patent and copyright applications for such developments and, upon request, shall promptly assign allsuch inventions, ideas, recipes, processes and designs to the Employer. The decision to file for patent or copyright protection or to maintainsuch development as a trade secret shall be in the sole discretion of the Employer, and you shall be bound by such decision. You shallprovide, on the back of this Agreement, a complete list of all inventions, ideas, recipes, processes and designs if any, patented or unpatented,copyrighted or non-copyrighted, including a brief description, that you made or conceived prior to your employment with the Employer, andthat, therefore, are excluded from the scope of the employment with the Employer.The restrictive covenants contained in this agreement are given and made by you to induce the Employer to employ you and to enter into thisAgreement with you, and you hereby acknowledge that employment with the Employer is sufficient consideration for these restrictivecovenants. The restrictive covenants shall be construed as agreements independent of any other provision in this Agreement, and theexistence of any claim or cause of action you may have against the Employer or the Company, whether predicated upon this Agreement orotherwise, shall not constitute a defense to the enforcement of any restrictive covenant. The refusal or failure of the Employer or theCompany to enforce any restrictive covenant of this agreement (or any similar agreement) against any other employee, agent, or independentcontractor, for any reason, shall not constitute a defense to the enforcement by the Employer or the Company of any such restrictive covenant, nor shall it give rise to any claim or cause of action by you against the Employer or the Company.You agree that a breach of any of the restrictive covenants contained in this agreement will cause irreparable injury to the Employer and theCompany for which the remedy at law will be inadequate and would be difficult to ascertain and therefore, in the event of the breach orthreatened breach of any such covenants, the Employer and the Company shall be entitled, in addition to any other rights and remedies it mayhave at law or in equity, to obtain an injunction to restrain you from any threatened or actual activities in violation of any such covenants.You hereby consent and agree that temporary and permanent injunctive relief may be granted in any proceedings that might be brought toenforce any such covenants without the necessity of proof of actual damages, and in the event the Employer or the Company does apply forsuch an injunction, you shall not raise as a defense thereto that the Employer or the Company has an adequate remedy at law.For the avoidance of doubt, the termination of this agreement for any reason, shall not extinguish your obligations specified in theserestrictive covenants.ALL PARTIES TO THIS AGREEMENT KNOW AND UNDERSTAND THAT THEY HAVE A CONSTITUTIONAL RIGHT TO A JURYTRIAL. THE PARTIES ACKNOWLEDGE THAT ANY DISPUTE OR CONTROVERSY THAT MAY ARISE OUT OF THISAGREEMENT WILL INVOLVE COMPLICATED AND DIFFICULT FACTUAL AND LEGAL ISSUES.THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF OR RELATING TOTHIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS, WHETHER NOW EXISTING OR HEREAFTERARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. THE PARTIES AGREE THAT ANY OF THEMMAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARYAND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY AND THAT ANYPROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR ANY OF THE CONTEMPLATEDTRANSACTIONS SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUTA JURY.THE PARTIES INTEND THAT THIS WAIVER OF THE RIGHT TO A JURY TRIAL BE AS BROAD AS POSSIBLE. BY THEIRSIGNATURES BELOW, THE PARTIES PROMISE, WARRANT AND REPRESENT THAT THEY WILL NOT PLEAD FOR, REQUESTOR OTHERWISE SEEK TO HAVE A JURY TO RESOLVE ANY AND ALL DISPUTES THAT MAY ARISE BY, BETWEEN ORAMONG THEM.You shall be responsible for the payment of all taxes applicable to payments or benefits received from the Employer or the Company. It is theintent of the Employer and the Company that the provisions of this agreement and all other plans and programs sponsored by the Employerand the Company be interpreted to comply in all respects with Internal Revenue Code Section 409A, however, the Employer and theCompany shall have no liability to you, or any of your successors or beneficiaries, in the event taxes, penalties or excise taxes may ultimatelybe determined to be applicable to any payment or benefit received by you or your successors or beneficiaries. The validity, interpretation, and performance of this agreement shall be governed, interpreted, and construed in accordance with the laws ofthe State of Florida without giving effect to the principles of comity or conflicts of laws thereof.This letter constitutes the full commitments which have been extended to you and shall supersede any prior agreements whether oral orwritten. However, this does not constitute a contract of employment for any period of time. Should you have any questions regarding thesecommitments or your ability to conform to Bloomin’ Brands policies and procedures, please let me know immediately.By signing this offer, you indicate your acceptance of our offer. Please keep one original copy of this offer letter for your personal files.We look forward to having you join us as a member of our executive team. This signed offer letter and any accompanying documentationmust be returned to Pablo Brizi, Group VP - Human Resources by fax at 813-387-8466 or scanned at pablobrizi@bloominbrands.com.Sincerely,/s/ David DenoDavid DenoEVP, Chief Financial and Administrative Officer, Bloomin’ Brands, IncI accept the above offer to be employed by Bloomin’ Brands, Inc and I understand the terms as set forth above./s/ Suk Singh May 4, 2015 Suk Singh Date Schedule 1“Cause” shall be defined as:1. Your failure to perform the duties required of you in a manner satisfactory to the Employer, in its sole discretion after the Employerfollows the following procedures: (a) the Employer gives you a written notice (“Notice of Deficiency”) which shall specify the deficiencies inyour performance of duties; (b) you shall have a period of thirty (30) days, commencing on receipt of the Notice of Deficiency, in which tocure the deficiencies contained in the Notice of Deficiency; and (c) in the event you do not cure the deficiencies to the satisfaction of theEmployer, in its sole discretion, within such thirty (30) day period (or if during such thirty (30) day period the Employer determines that youare not making reasonable, good faith efforts to cure the deficiencies to the satisfaction of the Employer), the Employer shall have the right toimmediately terminate your employment for Cause. The provisions of this paragraph (1) may be invoked by the Employer any number oftimes and cure of deficiencies contained in any Notice of Deficiency shall not be construed as a waiver of this paragraph (1) nor prevent theEmployer from issuing any subsequent Notices of Deficiency; or2. Any dishonesty by you in the your dealings with the Company, the Employer or their affiliates; your commission of fraud, negligence inthe performance of your duties; insubordination; willful misconduct; or your conviction (or plea of guilty or nolo contendere), indictment orcharge with respect to, any felony, or any other crime involving dishonesty or moral turpitude; or3. Any violation of the restrictive covenants of this agreement or4. Any violation of any current or future material published policy of the Employer or its Affiliates (material published policies include, butare not limited to, the Employer’s discrimination and harassment policy, management dating policy, responsible alcohol policy, insidertrading policy, ethics policy and security policy); or5. For all purposes of this Agreement, termination for Cause shall be deemed to have occurred in the event of the Employee’s resignationwhen, because of existing facts and circumstances, subsequent termination for Cause can be reasonably foreseen.Exhibit 21.1SUBSIDIARY NAME STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATIONAnnapolis Outback, LLC MDBBI International Holdings, Inc. FLBBI Ristorante Italiano, LLC FLBel Air Outback, Inc. MDBFG Alabama Services, Ltd FLBFG Arkansas Services, Ltd FLBFG Colorado Services, Ltd FLBFG Florida Services, Ltd FLBFG Georgia Services, Ltd FLBFG Indiana Services, Limited Partnership FLBFG Louisiana Services, Ltd FLBFG Maryland Services, Ltd FLBFG Nebraska, Inc. FLBFG New Jersey Services, Limited Partnership FLBFG New York Services, Limited Partnership FLBFG North Carolina Services, Ltd FLBFG Oklahoma, Inc. FLBFG Pennsylvania Services, Ltd FLBFG South Carolina Services, Ltd FLBFG Tennessee Services, Ltd FLBFG Virginia Services, Limited Partnership FLBFG/FPS of Marlton Partnership FLBloom Brands Holdings I C.V. NLBloom Brands Holdings II C.V. NLBloom Group Holdings B.V. NLBloom Group Holdings II, B.V. NLBloom Group Restaurants, B.V. NLBloom Group Restaurants, LLC FLBloom No.1 Limited HKBloom No.2 Limited HKBloom Participações, Ltda. BRBloom Restaurantes Brasil S.A. BRBloomin’ Brands Gift Card Services, LLC FLBloomin’ Brands International, LLC FLBloomin Canada Inc. ONBloomin Hong Kong Limited HKBloomin Korea Holding CIBloomin Puerto Rico L.P. CIBonefish Baltimore County, LLC MDBonefish Beverages, LLC TXBonefish Brandywine, LLC MDBonefish Designated Partner, LLC DEBonefish Grill Gulf Coast of Louisiana, LLC FLBonefish Grill International, LLC FLBonefish Grill of Florida Designated Partner, LLC DEBonefish Grill of Florida, LLC DEBonefish Grill of Rogers, Inc. ARBonefish Grill, LLC FLBonefish Holdings, LLC TXBonefish Kansas Designated Partner, LLC DEBonefish Kansas LLC KSBonefish of Bel Air, LLC MDBonefish of Gaithersburg, Inc. MDExhibit 21.1SUBSIDIARY NAME STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATIONBonefish/Anne Arundel, LLC MDBonefish/Asheville, Limited Partnership FLBonefish/Carolinas, Limited Partnership FLBonefish/Centreville, Limited Partnership FLBonefish/Columbus-I, Limited Partnership FLBonefish/Crescent Springs, Limited Partnership FLBonefish/Fredericksburg, Limited Partnership FLBonefish/Glen Burnie, LLC MDBonefish/Greensboro, Limited Partnership FLBonefish/Gulf Coast, Limited Partnership FLBonefish/Hyde Park, Limited Partnership FLBonefish/Newport News, Limited Partnership FLBonefish/Richmond, Limited Partnership FLBonefish/South Florida-I, Limited Partnership FLBonefish/Southern Virginia, Limited Partnership FLBonefish/Southern, Limited Partnership FLBonefish/Virginia, Limited Partnership FLBoomerang Air, Inc. FLCarrabba’s Designated Partner, LLC DECarrabba’s Italian Grill of Howard County, Inc. MDCarrabba’s Italian Grill of Overlea, Inc. MDCarrabba’s Italian Grill of Rogers, Inc. ARCarrabba’s Italian Grill, LLC FLCarrabba’s Kansas Designated Partner, LLC DECarrabba’s Kansas LLC KSCarrabba’s of Bowie, LLC MDCarrabba’s of Germantown, Inc. MDCarrabba’s of Ocean City, Inc. MDCarrabba’s of Pasadena, Inc. MDCarrabba’s of Waldorf, Inc. MDCarrabba’s/Birmingham 280, Limited Partnership FLCarrabba’s/Cool Springs, Limited Partnership FLCarrabba’s/DC-I, Limited Partnership FLCarrabba’s/Deerfield Township, Limited PartnershipFLCarrabba’s/Green Hills, Limited Partnership FLCarrabba’s/Lexington, Limited Partnership FLCarrabba’s/Louisville, Limited Partnership FLCarrabba’s/Metro, Limited Partnership FLCarrabba’s/Miami Beach, Limited Partnership FLCarrabba’s/Michigan, Limited Partnership FLCarrabba’s/Mid Atlantic-I, Limited Partnership FLCarrabba’s/Montgomery, Limited Partnership FLCarrabba’s/Rocky Top, Limited Partnership FLCIGI Alabama Services, Ltd FLCIGI Beverages of Texas, LLC TXCIGI Florida Services, Ltd FLCIGI Holdings, LLC TXCIGI Louisiana Services, Ltd FLCIGI Maryland Services, Ltd FLCIGI Nebraska, Inc. FLCIGI New York Services, Limited Partnership FLCIGI North Carolina Services, Ltd FLCIGI Oklahoma, Inc. FLExhibit 21.1SUBSIDIARY NAME STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATIONCIGI Pennsylvania Services, Ltd FLCIGI South Carolina Services, Ltd FLCIGI Tennessee Services, Ltd FLCIGI Virginia Services, Limited Partnership FLCIGI/BFG of East Brunswick Partnership FLDutch Holdings I, LLC FLFleming’s Beverages, LLC TXFleming’s International, LLC FLFleming’s of Baltimore, LLC MDFlemings Restaurantes do Brasil Ltda. BRFleming’s/Outback Holdings, Inc. TXFPS Florida Services, Ltd FLFPS NEBRASKA, INC. FLFPS Oklahoma, Inc. FLFrederick Outback, Inc. MDHagerstown Outback, Inc. MDNew Private Restaurant Properties, LLC DENew PRP Mezz 1, LLC DENew PRP Mezz 2, LLC DEOBTex Holdings, LLC TXOcean City Outback, Inc. MDOS Asset, Inc. FLOS Management, Inc. FLOS Mortgage Holdings, Inc. DEOS Niagara Falls, LLC FLOS Prime, LLC FLOS Realty, LLC FLOS Restaurant Services, LLC FLOS Southern, LLC FLOS Tropical, LLC FLOSF Alabama Services, Ltd FLOSF Arizona Services, Limited Partnership FLOSF Arkansas Services, Ltd FLOSF Connecticut Services, Limited Partnership FLOSF Delaware Services, Ltd FLOSF Florida Services, Ltd FLOSF Georgia Services, Ltd FLOSF Illinois Services, Ltd FLOSF Indiana Services, Limited Partnership FLOSF Kentucky Services, Ltd FLOSF Louisiana Services, Ltd FLOSF Maryland Services, Ltd FLOSF Massachusetts Services, Ltd FLOSF Michigan Services, Ltd FLOSF Nebraska, Inc. FLOSF Nevada Services, Limited Partnership FLOSF New Jersey Services, Limited Partnership FLOSF New York Services, Limited Partnership FLOSF North Carolina Services, Ltd FLOSF Ohio Services, Ltd FLOSF Oklahoma Services, Limited Partnership FLOSF Oklahoma, Inc. FLOSF Pennsylvania Services, Ltd FLExhibit 21.1SUBSIDIARY NAME STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATIONOSF South Carolina Services, Ltd FLOSF Tennessee Services, Ltd FLOSF Texas Services, Ltd FLOSF Utah Services, Ltd FLOSF Virginia Services, Limited Partnership FLOSF West Virginia Services, Ltd FLOSF/BFG of Deptford Partnership FLOSF/BFG of Lawrenceville Partnership FLOSF/CIGI of Evesham Partnership FLOSI China Venture CIOSI Co-Issuer, Inc. DEOSI HoldCo I, Inc. DEOSI HoldCo II, Inc. DEOSI HoldCo, Inc. DEOSI International, LLC FLOSI Restaurant Partners, LLC DEOSI/Fleming’s, LLC DEOSSIVT, LLC VTOutback & Carrabba’s of New Mexico, Inc. NMOutback Alabama, Inc. ALOutback Beverages of Texas, LLC TXOutback Catering Designated Partner, LLC DEOutback Catering, Inc. FLOutback Designated Partner, LLC DEOutback International Designated Partner, LLC DEOutback Kansas Designated Partner, LLC DEOutback Kansas LLC KSOutback of Aspen Hill, Inc. MDOutback of Calvert County, Inc. MDOutback of Conway, Inc. AROutback of Germantown, Inc. MDOutback of La Plata, Inc. MDOutback of Laurel, LLC MDOutback of Waldorf, Inc. MDOutback Philippines Development Holdings CorporationPIOutback Puerto Rico Designated Partner, LLC DEOutback Steakhouse Brasil Participações Ltda. BROutback Steakhouse International Investments, Co.CIOutback Steakhouse International Services, LLC FLOutback Steakhouse International, L.P. GAOutback Steakhouse International, LLC FLOutback Steakhouse Korea, Ltd. (f/k/a/ Aussie Chung Ltd.)KOOutback Steakhouse of Bowie, Inc. MDOutback Steakhouse of Canton, Inc. MDOutback Steakhouse of Florida, LLC FLOutback Steakhouse of Howard County, Inc. MDOutback Steakhouse of Jonesboro, Inc. AROutback Steakhouse of Rogers, Inc. AROutback Steakhouse of Salisbury, Inc. MDOutback Steakhouse of St. Mary’s County, Inc. MDOutback Steakhouse Restaurantes Brasil, S.A. (f/k/a Bloom Holdco)BROutback Steakhouse West Virginia, Inc. WVOutback Steakhouse-NYC, Ltd. FLExhibit 21.1SUBSIDIARY NAME STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATIONOutback/Carrabba’s Partnership FLOutback/DC, Limited Partnership FLOutback/Fleming’s Designated Partner, LLC DEOutback/Hampton, Limited Partnership FLOutback/Maryland-I, Limited Partnership FLOutback/Memphis, Limited Partnership FLOutback/Mid Atlantic-I, Limited Partnership FLOutback/Southfield, Limited Partnership FLOutback/Stone-II, Limited Partnership FLOutback-Carrabba’s of Hunt Valley, Inc. MDOwings Mills Incorporated MDPerry Hall Outback, Inc. MDPrime Designated Partner, LLC DEPrince George’s County Outback, Inc. MDPrivate Restaurant Master Lessee, LLC DEPrivate Restaurant Properties, LLC DEPRP Holdings, LLC DESnyderman Restaurant Group Inc NJWilliamsburg Square Joint Venture PAXuanmei Food and Beverage (Shanghai) Co., Ltd. CNExhibit 23.1CONSENT OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRMWe hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (No. 333-194295) and S-8 (Nos. 333-183270,333-187035, 333-194261 and 333-202259) of Bloomin’ Brands, Inc. of our report dated February 24, 2016 relating to the financial statementsand the effectiveness of internal control over financial reporting, which appears in this Form 10-K. /s/ PricewaterhouseCoopers LLPTampa, FloridaFebruary 24, 2016Exhibit 31.1CERTIFICATIONI, Elizabeth A. Smith, certify that:1.I have reviewed this Annual Report on Form 10-K of Bloomin’ Brands, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessaryto make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to theperiod covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all materialrespects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (asdefined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange ActRules 13a-15(f) and 15d-15(f)) for the registrant and have:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed underour supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designedunder our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally accepted accounting principles;(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusionsabout the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based onsuch evaluation; and(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during theregistrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materiallyaffected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financialreporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing theequivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reportingwhich are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financialinformation; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant’s internal control over financial reporting. Date:February 24, 2016/s/ Elizabeth A. Smith Elizabeth A. Smith Chief Executive Officer(Principal Executive Officer)Exhibit 31.2CERTIFICATIONI, David J. Deno, certify that:1.I have reviewed this Annual Report on Form 10-K of Bloomin’ Brands, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessaryto make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to theperiod covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all materialrespects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (asdefined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange ActRules 13a-15(f) and 15d-15(f)) for the registrant and have:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed underour supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designedunder our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally accepted accounting principles;(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusionsabout the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based onsuch evaluation; and(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during theregistrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materiallyaffected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financialreporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing theequivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reportingwhich are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financialinformation; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant’s internal control over financial reporting. Date:February 24, 2016/s/ David J. Deno David J. Deno Executive Vice President and Chief Financial and Administrative Officer(Principal Financial Officer)Exhibit 32.1CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THESARBANES-OXLEY ACT OF 2002In connection with the Annual Report of Bloomin’ Brands, Inc. (the “Company”) on Form 10-K for the fiscal year ended December 27, 2015as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Elizabeth A. Smith, Chief Executive Officer of theCompany, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to thebest of my knowledge, that:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany for the dates and periods covered by the Report.Date:February 24, 2016/s/ Elizabeth A. Smith Elizabeth A. Smith Chief Executive Officer(Principal Executive Officer)A signed original of this written statement required by Section 906 has been provided to, and will be retained by, Bloomin’ Brands, Inc. andfurnished to the Securities and Exchange Commission or its staff upon request.Exhibit 32.2CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THESARBANES-OXLEY ACT OF 2002In connection with the Annual Report of Bloomin’ Brands, Inc. (the “Company”) on Form 10-K for the fiscal year ended December 27, 2015as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David J. Deno, Executive Vice President andChief Financial and Administrative Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant toSection 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany for the dates and periods covered by the Report.Date:February 24, 2016/s/ David J. Deno David J. Deno Executive Vice President and Chief Financial and Administrative Officer(Principal Financial Officer)A signed original of this written statement required by Section 906 has been provided to, and will be retained by, Bloomin’ Brands, Inc. andfurnished to the Securities and Exchange Commission or its staff upon request.

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