Document
 
 
 
 
 

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

FORM 10-Q
(Mark One)
 
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended September 30, 2018
 
or
[  ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from ______ to ______
Commission File Number: 001-35625

https://cdn.kscope.io/01d32b88bfd33c29057047b2e318a652-blmnlogov3.jpg

BLOOMIN’ BRANDS, INC.
(Exact name of registrant as specified in its charter)
Delaware
 
20-8023465
(State or other jurisdiction of incorporation or organization)
 
(IRS Employer Identification No.)
2202 North West Shore Boulevard, Suite 500, Tampa, Florida 33607
(Address of principal executive offices) (Zip Code)

(813) 282-1225
(Registrant’s telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES x  NO o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  YES x  NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x Accelerated filer  o Non-accelerated filer o
Smaller reporting company o Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YES  o  NO  x

As of October 30, 2018, 91,901,387 shares of common stock of the registrant were outstanding.
 
 
 
 
 


Table of Contents
BLOOMIN’ BRANDS, INC.



INDEX TO QUARTERLY REPORT ON FORM 10-Q
For the Quarterly Period Ended September 30, 2018
(Unaudited)

TABLE OF CONTENTS

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

2

Table of Contents
BLOOMIN’ BRANDS, INC.


PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA, UNAUDITED)
 
SEPTEMBER 30, 2018
 
DECEMBER 31, 2017
ASSETS
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
78,615

 
$
128,263

Current portion of restricted cash and cash equivalents

 
1,280

Inventories
48,515

 
51,264

Other current assets, net
101,324

 
179,402

Total current assets
228,454

 
360,209

Property, fixtures and equipment, net
1,129,347

 
1,173,414

Goodwill
291,822

 
310,234

Intangible assets, net
505,855

 
522,290

Deferred income tax assets, net
76,236

 
60,486

Other assets, net
119,080

 
135,261

Total assets
$
2,350,794

 
$
2,561,894

LIABILITIES AND STOCKHOLDERS’ EQUITY
 

 
 

Current liabilities
 

 
 

Accounts payable
$
163,738

 
$
185,461

Accrued and other current liabilities
227,867

 
270,840

Unearned revenue
202,277


330,756

Current portion of long-term debt
26,767

 
26,335

Total current liabilities
620,649

 
813,392

Deferred rent
165,702

 
160,047

Deferred income tax liabilities
13,845

 
16,926

Long-term debt, net
1,124,024

 
1,091,769

Long-term portion of deferred gain on sale-leaseback transactions, net
180,302

 
188,086

Other long-term liabilities, net
186,130

 
210,443

Total liabilities
2,290,652

 
2,480,663

Commitments and contingencies (Note 15)


 


Stockholders’ equity
 
 
 
Bloomin’ Brands stockholders’ equity
 
 
 
Preferred stock, $0.01 par value, 25,000,000 shares authorized; no shares issued and outstanding as of September 30, 2018 and December 31, 2017

 

Common stock, $0.01 par value, 475,000,000 shares authorized; 91,853,854 and 91,912,546 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively
919

 
919

Additional paid-in capital
1,108,636

 
1,081,813

Accumulated deficit
(915,925
)
 
(913,191
)
Accumulated other comprehensive loss
(143,276
)
 
(99,199
)
Total Bloomin’ Brands stockholders’ equity
50,354

 
70,342

Noncontrolling interests
9,788

 
10,889

Total stockholders’ equity
60,142

 
81,231

Total liabilities and stockholders’ equity
$
2,350,794

 
$
2,561,894

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

3

Table of Contents
BLOOMIN’ BRANDS, INC.

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


 
THIRTEEN WEEKS ENDED
 
THIRTY-NINE WEEKS ENDED
 
SEPTEMBER 30, 2018

SEPTEMBER 24, 2017

SEPTEMBER 30, 2018

SEPTEMBER 24, 2017
Revenues
 
 
 
 
 
 
 
Restaurant sales
$
949,400

 
$
940,012

 
$
3,063,887

 
$
3,105,027

Franchise and other revenues
15,621

 
15,575

 
49,413

 
41,729

Total revenues
965,021

 
955,587

 
3,113,300

 
3,146,756

Costs and expenses
 

 
 

 
 

 
 

Cost of sales
307,493

 
296,632

 
982,415

 
984,510

Labor and other related
289,023

 
285,325

 
902,006

 
907,580

Other restaurant operating
233,744

 
235,944

 
725,468

 
735,480

Depreciation and amortization
50,571

 
47,826

 
151,473

 
142,479

General and administrative
67,691

 
66,063

 
212,516

 
215,059

Provision for impaired assets and restaurant closings
3,962

 
18,578

 
15,590

 
38,253

Total costs and expenses
952,484

 
950,368

 
2,989,468

 
3,023,361

Income from operations
12,537

 
5,219

 
123,832

 
123,395

Loss on extinguishment and modification of debt

 

 

 
(260
)
Other (expense) income, net
(1
)
 
7,531

 
(6
)
 
14,761

Interest expense, net
(11,600
)
 
(10,705
)
 
(33,229
)
 
(29,389
)
Income before (benefit) provision for income taxes
936

 
2,045

 
90,597

 
108,507

(Benefit) provision for income taxes
(3,317
)
 
(3,248
)
 
(6,516
)
 
17,744

Net income
4,253

 
5,293

 
97,113

 
90,763

Less: net income (loss) attributable to noncontrolling interests
181

 
(290
)
 
922

 
1,422

Net income attributable to Bloomin’ Brands
$
4,072

 
$
5,583

 
$
96,191

 
$
89,341

 
 
 
 
 
 
 
 
Net income
$
4,253

 
$
5,293

 
$
97,113

 
$
90,763

Other comprehensive (loss) income:
 
 
 
 
 
 
 
Foreign currency translation adjustment
(16,349
)
 
6,399

 
(45,044
)
 
17,770

Unrealized gain (loss) on derivatives, net of tax
37

 
370

 
1,221

 
(139
)
Reclassification of adjustment for (gain) loss on derivatives included in Net income, net of tax
(51
)
 
492

 
328

 
1,919

Comprehensive (loss) income
(12,110
)
 
12,554

 
53,618

 
110,313

Less: comprehensive income (loss) attributable to noncontrolling interests
423

 
(306
)
 
1,504

 
1,376

Comprehensive (loss) income attributable to Bloomin’ Brands
$
(12,533
)
 
$
12,860

 
$
52,114

 
$
108,937

 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
Basic
$
0.04

 
$
0.06

 
$
1.04

 
$
0.91

Diluted
$
0.04

 
$
0.06

 
$
1.02

 
$
0.88

Weighted average common shares outstanding:
 
 
 
 
 
 
 
Basic
92,202

 
92,485

 
92,197

 
98,137

Diluted
93,324

 
95,655

 
94,489

 
101,497

 
 
 
 
 
 
 
 
Cash dividends declared per common share
$
0.09

 
$
0.08

 
$
0.27

 
$
0.24

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

4

Table of Contents
BLOOMIN’ BRANDS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)

 
BLOOMIN’ BRANDS, INC.
 
 
 
 

COMMON STOCK

ADDITIONAL PAID-IN CAPITAL
 
ACCUM-ULATED DEFICIT

ACCUMULATED OTHER
COMPREHENSIVE LOSS

NON-CONTROLLING INTERESTS

TOTAL
 
SHARES
 
AMOUNT
 
 
 
 
 
Balance, December 31, 2017
91,913

 
$
919

 
$
1,081,813

 
$
(913,191
)
 
$
(99,199
)
 
$
10,889

 
$
81,231

Net income

 

 

 
96,191

 

 
1,251

 
97,442

Other comprehensive (loss) income, net of tax

 

 

 

 
(44,077
)
 
582

 
(43,495
)
Cash dividends declared, $0.27 per common share

 

 
(25,078
)
 

 

 

 
(25,078
)
Repurchase and retirement of common stock
(4,371
)
 
(43
)
 

 
(98,925
)
 

 

 
(98,968
)
Stock-based compensation

 

 
16,478

 

 

 

 
16,478

Common stock issued under stock plans (1)
4,312

 
43

 
35,752

 

 

 

 
35,795

Change in the redemption value of redeemable interests

 

 
(329
)
 

 

 

 
(329
)
Distributions to noncontrolling interests

 

 

 

 

 
(4,505
)
 
(4,505
)
Contributions from noncontrolling interests

 

 

 

 

 
1,571

 
1,571

Balance, September 30, 2018
91,854

 
$
919

 
$
1,108,636

 
$
(915,925
)
 
$
(143,276
)
 
$
9,788

 
$
60,142

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(CONTINUED...)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


5

Table of Contents
BLOOMIN’ BRANDS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)

 
BLOOMIN’ BRANDS, INC.
 
 
 
 
 
COMMON STOCK
 
ADDITIONAL PAID-IN CAPITAL
 
ACCUM-ULATED DEFICIT
 
ACCUMULATED OTHER
COMPREHENSIVE LOSS
 
NON-CONTROLLING INTERESTS
 
TOTAL
 
SHARES
 
AMOUNT
 
 
 
 
 
Balance, December 25, 2016
103,922

 
$
1,039

 
$
1,079,583

 
$
(756,070
)
 
$
(111,143
)
 
$
12,654

 
$
226,063

Net income

 

 

 
89,341

 

 
1,594

 
90,935

Other comprehensive income (loss), net of tax

 

 

 

 
19,596

 
(76
)
 
19,520

Cash dividends declared, $0.24 per common share

 

 
(23,677
)
 

 

 

 
(23,677
)
Repurchase and retirement of common stock
(13,807
)
 
(138
)
 

 
(272,598
)
 

 

 
(272,736
)
Stock-based compensation

 


 
17,969

 

 

 

 
17,969

Common stock issued under stock plans (1)
1,049

 
11

 
4,617

 
(180
)
 

 

 
4,448

Change in the redemption value of redeemable interests

 

 
(172
)
 

 

 

 
(172
)
Purchase of noncontrolling interests, net of tax of $45

 

 
(713
)
 

 

 
(180
)
 
(893
)
Distributions to noncontrolling interests

 

 

 

 

 
(4,158
)
 
(4,158
)
Contributions from noncontrolling interests

 

 

 

 

 
727

 
727

Cumulative-effect from a change in accounting principle

 

 

 
14,364

 

 

 
14,364

Other

 

 

 

 

 
419

 
419

Balance, September 24, 2017
91,164

 
$
912

 
$
1,077,607

 
$
(925,143
)
 
$
(91,547
)
 
$
10,980

 
$
72,809

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

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

6

Table of Contents
BLOOMIN’ BRANDS, INC.

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


 
THIRTY-NINE WEEKS ENDED
 
SEPTEMBER 30, 2018
 
SEPTEMBER 24, 2017
Cash flows provided by operating activities:
 
 
 
Net income
$
97,113

 
$
90,763

Adjustments to reconcile Net income to cash provided by operating activities:
 

 
 

Depreciation and amortization
151,473

 
142,479

Amortization of deferred discounts and issuance costs
1,930

 
2,240

Amortization of deferred gift card sales commissions
20,151

 
18,530

Provision for impaired assets and restaurant closings
15,590

 
38,253

Stock-based and other non-cash compensation expense
19,692

 
19,775

Deferred income tax (benefit) expense
(1,318
)
 
3,252

Gain on sale of a business or subsidiary

 
(15,787
)
Loss on extinguishment and modification of debt

 
260

Recognition of deferred gain on sale-leaseback transactions
(9,237
)
 
(8,836
)
Other, net
2,177

 
4,690

Change in assets and liabilities
(142,375
)
 
(72,604
)
Net cash provided by operating activities
155,196

 
223,015

Cash flows used in investing activities:
 

 
 

Proceeds from disposal of property, fixtures and equipment
10,453

 
19

Proceeds from sale-leaseback transactions, net
11,332

 
83,866

Proceeds from sale of a business, net of cash divested

 
38,980

Capital expenditures
(146,288
)
 
(183,820
)
Other investments, net
200

 
(1,580
)
Net cash used in investing activities
$
(124,303
)
 
$
(62,535
)
 
 
 
 
 
(CONTINUED...)
 
 
 
 
 

7

Table of Contents
BLOOMIN’ BRANDS, INC.

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


 
THIRTY-NINE WEEKS ENDED
 
SEPTEMBER 30, 2018
 
SEPTEMBER 24, 2017
Cash flows used in financing activities:
 
 
 
Proceeds from issuance of long-term debt, net
$
1,637

 
$
124,443

Repayments of long-term debt
(20,164
)
 
(64,578
)
Proceeds from borrowings on revolving credit facilities, net
378,529

 
467,500

Repayments of borrowings on revolving credit facilities
(329,700
)
 
(417,000
)
Proceeds from failed sale-leaseback transactions, net

 
5,942

Proceeds from share-based compensation, net
35,795

 
4,628

Distributions to noncontrolling interests
(4,505
)
 
(4,158
)
Contributions from noncontrolling interests
1,571

 
727

Purchase of limited partnership and noncontrolling interests
(1,619
)
 
(5,354
)
Repayments of partner deposits and accrued partner obligations
(14,458
)
 
(11,763
)
Repurchase of common stock
(98,968
)
 
(272,916
)
Cash dividends paid on common stock
(25,078
)
 
(23,677
)
Net cash used in financing activities
(76,960
)
 
(196,206
)
Effect of exchange rate changes on cash and cash equivalents
(4,861
)
 
1,972

Net decrease in cash, cash equivalents and restricted cash
(50,928
)
 
(33,754
)
Cash, cash equivalents and restricted cash as of the beginning of the period
129,543

 
136,186

Cash, cash equivalents and restricted cash as of the end of the period
$
78,615

 
$
102,432

Supplemental disclosures of cash flow information:
 

 
 

Cash paid for interest
$
31,376

 
$
27,897

Cash paid for income taxes, net of refunds
9,696

 
28,134

Supplemental disclosures of non-cash investing and financing activities:
 

 
 

Increase in liabilities from the acquisition of property, fixtures and equipment or capital leases
$
5,075

 
$
6,375


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

8

Table of Contents
BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


1.    Description of the Business and Basis of Presentation

Description of the Business - Bloomin’ Brands, Inc., through its subsidiaries (“Bloomin’ Brands” or 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. Each of the Company’s concepts has additional restaurants in which it has no direct investment and are operated under franchise agreements.

Basis of Presentation - The accompanying interim unaudited consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States (“U.S. GAAP”) for complete financial statements. In the opinion of the Company, all adjustments necessary for fair financial statement presentation for the periods presented have been included and are of a normal, recurring nature. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

Recently Adopted Financial Accounting Standards - On January 1, 2018, the Company elected to early adopt Accounting Standards Update (“ASU”) No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” (“ASU No. 2017-04”) on a prospective basis. ASU No. 2017-04 eliminates the second step of goodwill impairment, which requires a hypothetical purchase price allocation. Under ASU No. 2017-04, goodwill impairment is calculated as the amount a reporting unit’s carrying value exceeds its calculated fair value. The adoption of ASU No. 2017-04 did not impact the Company’s Consolidated Financial Statements. Goodwill and indefinite-lived intangible assets are tested for impairment annually, as of the first day of the second fiscal quarter, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

The Company performed its annual assessment for impairment of goodwill and other indefinite-lived intangible assets during the second quarters of 2018 and 2017. In connection with these assessments, the Company did not record any goodwill or indefinite-lived intangible impairment charges.

On January 1, 2018, the Company adopted ASU No. 2014-09 “Revenue Recognition (Topic 606), Revenue from Contracts with Customers” (“ASU No. 2014-09”) using the full retrospective transition method. ASU No. 2014-09 provides a single source of guidance for revenue arising from contracts with customers. Under ASU No. 2014-09, revenue is recognized in an amount that reflects the consideration an entity expects to receive for the transfer of goods and services. The standard also requires additional disclosures about the nature, timing and uncertainty of revenue and cash flows arising from contracts with customers. Under the new standard, the Company recognizes gift card breakage proportional to redemptions, which are highest in the Company’s first fiscal quarter. Previously, under the remote method, the majority of breakage revenue was recorded in the Company’s fourth fiscal quarter corresponding with the timing of the original gift card sale. Advertising fees charged to franchisees, which were previously recorded as a reduction to Other restaurant operating expenses, are recognized as Franchise revenue. In addition, initial franchise and renewal fees are recognized over the term of the franchise agreements. In connection with adoption of ASU No. 2014-09, a cumulative effect adjustment of $33.1 million, net of tax, was recorded as a credit to the ending balance of Accumulated deficit as of December 27, 2015.


9

Table of Contents
BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued

The following table includes a restatement of the Company’s Consolidated Statement of Operations for the retrospective adoption of ASU No. 2014-09 during the periods indicated:
 
THIRTEEN WEEKS ENDED
 
THIRTY-NINE WEEKS ENDED
 
SEPTEMBER 24, 2017
 
SEPTEMBER 24, 2017
(dollars in thousands, except per share data)
AS REPORTED
 
2014-09 IMPACT
 
AS RESTATED
 
AS REPORTED
 
2014-09 IMPACT
 
AS RESTATED
Revenues
 
 
 
 
 
 
 
 
 
 
 
Restaurant sales
$
937,852

 
$
2,160

 
$
940,012

 
$
3,093,297

 
$
11,730

 
$
3,105,027

Franchise and other revenues
11,047

 
4,528

 
15,575

 
32,407

 
9,322

 
41,729

Total revenues
$
948,899

 
$
6,688

 
$
955,587

 
$
3,125,704

 
$
21,052

 
$
3,146,756

Costs and expenses
 
 
 
 
 
 
 
 
 
 
 
Other restaurant operating
$
231,293

 
$
4,651

 
$
235,944

 
$
723,357

 
$
12,123

 
$
735,480

Income from operations
$
3,182

 
$
2,037

 
$
5,219

 
$
114,466

 
$
8,929

 
$
123,395

Income before (benefit) provision for income taxes
$
8

 
$
2,037

 
$
2,045

 
$
99,578

 
$
8,929

 
$
108,507

(Benefit) provision for income taxes
$
(4,038
)
 
$
790

 
$
(3,248
)
 
$
14,280

 
$
3,464

 
$
17,744

Net income
$
4,046

 
$
1,247

 
$
5,293

 
$
85,298

 
$
5,465

 
$
90,763

Net income attributable to Bloomin’ Brands
$
4,336

 
$
1,247

 
$
5,583

 
$
83,876

 
$
5,465

 
$
89,341

 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings per share
$
0.05

 
$
0.01

 
$
0.06

 
$
0.85

 
$
0.06

 
$
0.91

Diluted earnings per share
$
0.05

 
$
0.01

 
$
0.06

 
$
0.83

 
$
0.05

 
$
0.88


The following table includes a restatement of the Company’s Consolidated Balance Sheet as of December 31, 2017 for the retrospective adoption of ASU No. 2014-09:
 
DECEMBER 31, 2017
(dollars in thousands)
AS REPORTED
 
2014-09 IMPACT
 
AS RESTATED
ASSETS
 
 
 
 
 
Deferred income tax assets, net
$
71,499

 
$
(11,013
)
 
$
60,486

Total assets
$
2,572,907

 
$
(11,013
)
 
$
2,561,894

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
Unearned revenue
 
 
 
 
 
Deferred gift card revenue
$
371,455

 
$
(47,827
)
 
$
323,628

Deferred loyalty revenue
6,667

 

 
6,667

Deferred franchise fees - current
105

 
356

 
461

Total Unearned revenue
$
378,227

 
$
(47,471
)
 
$
330,756

Total current liabilities
$
860,863

 
$
(47,471
)
 
$
813,392

Other long-term liabilities, net (1)
$
205,745

 
$
4,698

 
$
210,443

Total liabilities
$
2,523,436

 
$
(42,773
)
 
$
2,480,663

Bloomin’ Brands stockholders’ equity
 
 
 
 
 
Accumulated deficit
$
(944,951
)
 
$
31,760

 
$
(913,191
)
Total Bloomin’ Brands stockholders’ equity
$
38,582

 
$
31,760

 
$
70,342

Total stockholders’ equity
$
49,471

 
$
31,760

 
$
81,231

Total liabilities and stockholders’ equity
$
2,572,907

 
$
(11,013
)
 
$
2,561,894

____________________
(1)
Includes the non-current portion of deferred franchise fees.

See Note 2 - Revenue Recognition for required disclosures under ASU No. 2014-09.


10

Table of Contents
BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued

Effective July 2, 2018, the Company adopted ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU No. 2017-12”), which provides guidance for reporting the economic results of hedging activities and simplifies the disclosures of risk exposures and hedging strategies. Upon adoption, the Company revised its accounting policies and certain disclosures, however there was no impact on its Consolidated Financial Statements. For derivatives that qualify for hedge accounting, any gain or loss on the derivative instrument is recognized in equity as a change to Accumulated other comprehensive loss and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. See Note 12 - Derivative Instruments and Hedging Activities for required disclosures under ASU No. 2017-12.

Recently Issued Financial Accounting Standards Not Yet Adopted - In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02: Leases (Topic 842) (“ASU No. 2016-02”). ASU No. 2016-02 requires the lease rights and obligations arising from lease contracts, including existing and new arrangements, to be recognized as assets and liabilities on the balance sheet. In July 2018, the FASB issued ASU No. 2018-11: Leases (Topic 842): Targeted Improvements (“ASU No. 2018-11”), that allows for an additional transition method, which permits use of the effective date of adoption as the date of initial application of ASU No. 2016-02 without restating comparative period financial statements. ASU No. 2016-02 and ASU No. 2018-11 are effective for the Company in 2019 and the Company will adopt ASU No. 2016-02 using the transition method allowable under ASU No. 2018-11. The Company plans to elect a transition package including practical expedients that require application to comparative periods but do not require it to reassess the classification and initial direct costs of expired or existing contracts and leases. In preparation for adoption, the Company is in the process of implementing a new lease accounting system and is assessing the overall impact of adoption on its financial statements and internal control over financial reporting. Adoption of ASU No. 2016-02 is expected to have an impact on the Company’s Consolidated Balance Sheet due to recognition of right-of-use assets and lease liabilities related to real estate and equipment under operating lease agreements. The adoption will result in a credit to the beginning balance of Accumulated Deficit to derecognize deferred gains on sale-leaseback transactions and a corresponding debit for the related deferred tax assets. At September 30, 2018, deferred gains on sale-leaseback transactions and their related deferred tax assets were $192.7 million and $49.6 million, respectively. There will also be an increase to Other restaurant operating expense in future periods since the Company will not recognize these deferred gains through its statements of operations over the corresponding lease term. During the thirty-nine weeks ended September 30, 2018, the Company recorded $9.2 million of sale-leaseback deferred gain amortization. The Company’s evaluation of ASU No. 2016-02 is ongoing and may identify additional impacts on its Consolidated Financial Statements and related disclosures.

Reclassifications - The Company reclassified certain items in the accompanying Consolidated Financial Statements for prior periods to be comparable with the classification for the current period.

2.    Revenue Recognition

The Company records food and beverage revenues, net of discounts and taxes, upon delivery to the customer. Franchise-related revenues are included in Franchise and other revenues in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income. Royalties, which are a percentage of net sales of the franchisee, are recognized as revenue in the period which the sales are reported to have occurred.

11

Table of Contents
BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued

The following table includes the categories of revenue included in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the periods indicated:
 
THIRTEEN WEEKS ENDED
 
THIRTY-NINE WEEKS ENDED
 
SEPTEMBER 30, 2018
 
SEPTEMBER 24, 2017
 
SEPTEMBER 30, 2018
 
SEPTEMBER 24, 2017
(dollars in thousands)
 
 
(Restated) (1)
 
 
 
(Restated) (1)
Revenues
 
 
 
 
 
 
 
Restaurant sales
$
949,400

 
$
940,012

 
$
3,063,887

 
$
3,105,027

Franchise and other revenues:
 
 
 
 
 
 
 
Franchise revenue
$
12,534

 
$
12,400

 
$
39,883

 
$
33,062

Other revenue
3,087

 
3,175

 
9,530

 
8,667

Total Franchise and other revenues
$
15,621

 
$
15,575

 
$
49,413

 
$
41,729

Total revenues
$
965,021

 
$
955,587

 
$
3,113,300

 
$
3,146,756

____________________
(1)
See Note 1 - Description of the Business and Basis of Presentation for details of the impact of implementing ASU No. 2014-09.

The following tables include the disaggregation of Restaurant sales and Franchise revenue, by restaurant concept and major international market, for the periods indicated:
 
THIRTEEN WEEKS ENDED
 
THIRTY-NINE WEEKS ENDED
 
SEPTEMBER 30, 2018
 
SEPTEMBER 30, 2018
(dollars in thousands)
RESTAURANT SALES
 
FRANCHISE REVENUE
 
RESTAURANT SALES
 
FRANCHISE REVENUE
U.S.
 
 
 
 
 
 
 
Outback Steakhouse (1)
$
498,390

 
$
9,583

 
$
1,591,588

 
$
30,814

Carrabba’s Italian Grill (1)
148,513

 
154

 
485,894

 
458

Bonefish Grill
135,691

 
218

 
441,594

 
691

Fleming’s Prime Steakhouse & Wine Bar
64,652

 

 
218,954

 

Other
1,591

 

 
4,088

 

U.S. Total
$
848,837

 
$
9,955

 
$
2,742,118

 
$
31,963

International
 
 
 
 
 
 
 
Outback Steakhouse-Brazil
$
81,193

 
$

 
$
264,125

 
$

Other
19,370

 
2,579

 
57,644

 
7,920

International Total
$
100,563

 
$
2,579

 
$
321,769

 
$
7,920

Total
$
949,400

 
$
12,534

 
$
3,063,887

 
$
39,883


12

Table of Contents
BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued

 
THIRTEEN WEEKS ENDED
 
THIRTY-NINE WEEKS ENDED
 
SEPTEMBER 24, 2017
 
SEPTEMBER 24, 2017
(dollars in thousands)
RESTAURANT SALES
 
FRANCHISE REVENUE
 
RESTAURANT SALES
 
FRANCHISE REVENUE
U.S.
(Restated) (2)
 
(Restated) (2)
 
(Restated) (2)
 
(Restated) (2)
Outback Steakhouse (1)
$
478,637

 
$
9,573

 
$
1,609,172

 
$
24,538

Carrabba’s Italian Grill (1)
150,943

 
157

 
501,965

 
402

Bonefish Grill
136,134

 
190

 
450,521

 
707

Fleming’s Prime Steakhouse & Wine Bar
60,208

 

 
208,083

 

Other
154

 

 
154

 

U.S. Total
$
826,076

 
$
9,920

 
$
2,769,895

 
$
25,647

International
 
 
 
 
 
 
 
Outback Steakhouse-Brazil
$
95,344

 
$

 
$
282,035

 
$

Other
18,592

 
2,480

 
53,097

 
7,415

International Total
$
113,936

 
$
2,480

 
$
335,132

 
$
7,415

Total
$
940,012

 
$
12,400

 
$
3,105,027

 
$
33,062

____________________
(1)
In 2017, the Company sold 53 Outback Steakhouse restaurants and one Carrabba’s Italian Grill restaurant, which are now operated as franchises.
(2)
See Note 1 - Description of the Business and Basis of Presentation for details of the impact of implementing ASU No. 2014-09.

Gift Card Revenue - Proceeds from the sale of gift cards, which do not have expiration dates, are recorded as deferred revenue and recognized as revenue upon redemption by the customer. Gift cards sold at a discount are recorded as revenue upon redemption of the associated gift cards at an amount net of the related discount. Gift card breakage, the amount of gift cards which will not be redeemed, is recognized using estimates based on historical redemption patterns. If actual redemptions vary from the estimated breakage, gift card breakage income may differ from the amount recorded. The Company periodically updates its estimates used for breakage. Gift card sales that are accompanied by a bonus card to be used by the customer at a future visit result in a separate deferral of a portion of the original gift card sale. Revenue is recorded when the bonus card is redeemed at the estimated fair market value of the bonus card. Approximately 86% of the current deferred gift card revenue is expected to be recognized over the next 12 months.

Gift card sales commissions paid to third-party providers are initially capitalized and subsequently amortized to Other restaurant operating expenses based on historical gift card redemption patterns.

Advertising Fees - Advertising fees charged to franchisees are recognized as Franchise revenue in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income.

Franchise Fees - Initial franchise and renewal fees are recognized over the term of the franchise agreement and renewal period, respectively. The weighted average remaining term of franchise agreements and renewal periods was approximately 15 years as of September 30, 2018.

Loyalty Program - The Company maintains a customer loyalty program, Dine Rewards, in the U.S., where customers have the ability to earn a reward after a number of qualified visits. The Company has developed an estimated value of the partial reward earned from each qualified visit, which is recorded as deferred revenue. Each reward has a maximum value and must be redeemed within three months of earning such reward. The revenue associated with the fair value of the qualified visit is recognized upon the earlier of redemption or expiration of the reward. The Company applies the practical expedient to exclude disclosures regarding loyalty program remaining performance obligations which have original expected durations of one year or less.


13

Table of Contents
BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued

The following table includes a detail of assets and liabilities from contracts with customers included on the Company’s Consolidated Balance Sheets as of the periods indicated:
(dollars in thousands)
SEPTEMBER 30, 2018
 
DECEMBER 31, 2017
Other current assets, net
 
 
 
Deferred gift card sales commissions (1)
$
7,910

 
$
16,231

 
 
 
 
Unearned revenue
 
 
 
Deferred gift card revenue (1)
$
193,283

 
$
323,628

Deferred loyalty revenue
8,535

 
6,667

Deferred franchise fees - current (1)
459

 
461

Total Unearned revenue
$
202,277

 
$
330,756

 
 
 
 
Other long-term liabilities, net
 
 
 
Deferred franchise fees - non-current (1)
$
4,761

 
$
4,698

____________________
(1)
See Note 1 - Description of the Business and Basis of Presentation for details of the impact of implementing ASU No. 2014-09 on the Company’s Consolidated Balance Sheet as of December 31, 2017.

The following table is a rollforward of deferred gift card sales commissions for the periods indicated:
 
THIRTEEN WEEKS ENDED
 
THIRTY-NINE WEEKS ENDED
(dollars in thousands)
SEPTEMBER 30, 2018
 
SEPTEMBER 24, 2017
 
SEPTEMBER 30, 2018
 
SEPTEMBER 24, 2017
Balance, beginning of period
$
9,175

 
$
9,418

 
$
16,231

 
$
15,584

Deferred gift card sales commissions amortization
(4,932
)
 
(4,774
)
 
(20,151
)
 
(18,530
)
Deferred gift card sales commissions capitalization
4,029

 
3,763

 
13,287

 
12,553

Other
(362
)
 
(1,060
)
 
(1,457
)
 
(2,260
)
Balance, end of period
$
7,910

 
$
7,347

 
$
7,910

 
$
7,347


The Company applies the portfolio approach practical expedient to account for gift card contracts and performance obligations. The following table is a rollforward of unearned gift card revenue for the periods indicated:
 
THIRTEEN WEEKS ENDED
 
THIRTY-NINE WEEKS ENDED
(dollars in thousands)
SEPTEMBER 30, 2018
 
SEPTEMBER 24, 2017
 
SEPTEMBER 30, 2018
 
SEPTEMBER 24, 2017
Balance, beginning of period
$
213,286

 
$
201,805

 
$
323,628

 
$
331,803

Gift card sales
54,477

 
54,392

 
189,599

 
193,638

Gift card redemptions
(71,146
)
 
(74,061
)
 
(304,198
)
 
(329,696
)
Gift card breakage (1)
(3,334
)
 
(4,008
)
 
(15,746
)
 
(17,617
)
Balance, end of period
$
193,283

 
$
178,128

 
$
193,283

 
$
178,128

____________________
(1)
See Note 1 - Description of the Business and Basis of Presentation for details of the impact of implementing ASU No. 2014-09 for the thirteen and thirty-nine weeks ended September 24, 2017.


14

Table of Contents
BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued

3.    Impairments and Exit Costs

The components of Provision for impaired assets and restaurant closings are as follows:
 
THIRTEEN WEEKS ENDED
 
THIRTY-NINE WEEKS ENDED
(dollars in thousands)
SEPTEMBER 30, 2018
 
SEPTEMBER 24, 2017
 
SEPTEMBER 30, 2018
 
SEPTEMBER 24, 2017
Impairment losses
 
 
 
 
 
 
 
U.S.
$
1,330

 
$
12,339

 
$
1,725

 
$
13,272

International

 
1,903

 
6,597

 
1,903

Total impairment losses
$
1,330

 
$
14,242

 
$
8,322

 
$
15,175

Restaurant closure expenses
 
 
 
 
 
 
 
U.S.
$
2,650

 
$
4,336

 
$
3,672

 
$
23,078

International
(18
)
 

 
3,596

 

Total restaurant closure expenses
$
2,632

 
$
4,336

 
$
7,268

 
$
23,078

Provision for impaired assets and restaurant closings
$
3,962

 
$
18,578

 
$
15,590

 
$
38,253


Closure Initiatives - Since February 2017, the Company decided to close certain underperforming restaurants in the U.S. and certain Abbraccio restaurants outside of the core markets of São Paulo and Rio de Janeiro in Brazil and in 2016 the Company decided to close certain Bonefish Grill restaurants (collectively, the “Closure Initiatives”). Following is a summary of expenses related to the Closure Initiatives recognized in the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income for the periods indicated:
 
INCOME STATEMENT LOCATION
 
THIRTEEN WEEKS ENDED
 
THIRTY-NINE WEEKS ENDED
(dollars in thousands)
 
SEPTEMBER 30, 2018
 
SEPTEMBER 24, 2017
 
SEPTEMBER 30, 2018
 
SEPTEMBER 24, 2017
Impairment, facility closure and other expenses (1)
Provision for impaired assets and restaurant closings
 
$
2,370

 
$
3,772

 
$
4,002

 
$
21,784

Severance and other expenses
General and administrative
 
338

 

 
570

 
2,948

Reversal of deferred rent liability
Other restaurant operating
 
(469
)
 

 
(616
)
 
(4,761
)
Total
 
 
$
2,239

 
$
3,772

 
$
3,956

 
$
19,971

________________
(1)
The Company recognized asset impairment and closure charges within the International segment related to the Closure Initiatives of $1.0 million during the thirty-nine weeks ended September 30, 2018 and $1.9 million during the thirteen and thirty-nine weeks ended September 24, 2017. All other asset impairment and closure charges for the periods presented were recognized within the U.S. segment.

International Restructuring - During the thirty-nine weeks ended September 30, 2018, the Company recognized asset impairment and closure charges of $9.1 million related to the restructuring of certain international markets, including China.

Surplus Properties - During the thirteen and thirty-nine weeks ended September 24, 2017, the Company recognized impairment charges of $9.5 million within the U.S. segment in connection with the remeasurement of certain surplus properties currently leased to the owners of its former restaurant concepts.

The remaining restaurant impairment and closing charges resulted primarily from locations identified for remodel, relocation or closure.


15

Table of Contents
BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued

Projected Future Expenses and Cash Expenditures - The Company expects to incur additional charges for the Closure Initiatives through Q3 2019, including costs associated with lease obligations, employee terminations and other closure-related obligations. Following is a summary of remaining estimated pre-tax expense and future cash expenditures, by type, as of September 30, 2018:
Estimated future expense (dollars in millions)
CLOSURE INITIATIVES
Lease related liabilities, net of subleases
$
2.0

to
$
2.4

Employee severance and other obligations
0.2

to
0.4

Total estimated future expense
$
2.2

to
$
2.8

 
 
 
 
Total estimated future cash expenditures (dollars in millions) (1)
$
21.6

to
$
26.5

________________
(1)
Future cash expenditures for the Closure Initiatives, primarily related to lease liabilities, are expected to occur over the remaining lease terms with the final term ending in January 2029.

Accrued Facility Closure and Other Costs Rollforward - The following table summarizes the Company’s accrual activity related to facility closure and other costs, primarily associated with the Closure Initiatives, during the thirty-nine weeks ended September 30, 2018:
 
THIRTY-NINE WEEKS ENDED
(dollars in thousands)
SEPTEMBER 30, 2018
Balance, beginning of the period
$
22,709

Charges
11,147

Cash payments
(11,805
)
Adjustments
(3,879
)
Balance, end of the period (1)
$
18,172

________________
(1)
As of September 30, 2018, the Company had exit-related accruals of $5.3 million recorded in Accrued and other current liabilities and $12.9 million recorded in Other long-term liabilities, net in the Consolidated Balance Sheet.


16

Table of Contents
BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued

4.    Earnings Per Share

The following table presents the computation of basic and diluted earnings per share for the periods indicated:
 
THIRTEEN WEEKS ENDED
 
THIRTY-NINE WEEKS ENDED
 
SEPTEMBER 30, 2018
 
SEPTEMBER 24, 2017
 
SEPTEMBER 30, 2018
 
SEPTEMBER 24, 2017
(in thousands, except per share data)
 
 
(Restated) (1)
 
 
 
(Restated) (1)
Net income attributable to Bloomin’ Brands
$
4,072

 
$
5,583

 
$
96,191

 
$
89,341

 
 
 
 
 
 
 
 
Basic weighted average common shares outstanding
92,202

 
92,485

 
92,197

 
98,137

 
 
 
 
 
 
 
 
Effect of diluted securities:
 
 
 
 
 
 
 
Stock options
799

 
2,781

 
1,870

 
2,948

Nonvested restricted stock and restricted stock units
323

 
389

 
409

 
392

Nonvested performance-based share units

 

 
13

 
20

Diluted weighted average common shares outstanding
93,324

 
95,655

 
94,489

 
101,497

 
 
 
 
 
 
 
 
Basic earnings per share
$
0.04

 
$
0.06

 
$
1.04

 
$
0.91

Diluted earnings per share
$
0.04

 
$
0.06

 
$
1.02

 
$
0.88

____________________
(1)
See Note 1 - Description of the Business and Basis of Presentation for details of the Net income and Earnings per share impact of implementing ASU No. 2014-09.

Dilutive securities outstanding not included in the computation of earnings per share because their effect was antidilutive were as follows, for the periods indicated:
 
THIRTEEN WEEKS ENDED
 
THIRTY-NINE WEEKS ENDED
(shares in thousands)
SEPTEMBER 30, 2018
 
SEPTEMBER 24, 2017
 
SEPTEMBER 30, 2018
 
SEPTEMBER 24, 2017
Stock options
3,802

 
6,065

 
2,628

 
5,663

Nonvested restricted stock and restricted stock units
259

 
179

 
129

 
174

Nonvested performance-based share units
214

 
134

 
191

 
256


5.    Stock-based Compensation Plans

The Company recognized stock-based compensation expense as follows:
 
THIRTEEN WEEKS ENDED
 
THIRTY-NINE WEEKS ENDED
(dollars in thousands)
SEPTEMBER 30, 2018
 
SEPTEMBER 24, 2017
 
SEPTEMBER 30, 2018
 
SEPTEMBER 24, 2017
Stock options
$
1,533

 
$
2,705

 
$
5,059

 
$
8,404

Restricted stock and restricted stock units
2,323

 
2,527

 
7,110

 
7,769

Performance-based share units
1,309

 
(235
)
 
3,779

 
1,001

 
$
5,165

 
$
4,997

 
$
15,948

 
$
17,174



17

Table of Contents
BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued

The following table presents a summary of the Company’s stock option activity:
(in thousands, except exercise price and contractual life)
OPTIONS
 
WEIGHTED-AVERAGE EXERCISE PRICE
 
WEIGHTED-AVERAGE REMAINING CONTRACTUAL LIFE (YEARS)
 
AGGREGATE INTRINSIC VALUE
Outstanding as of December 31, 2017
10,051

 
$
14.89

 
5.2
 
$
71,373

Granted
488

 
$
24.01

 
 
 
 
Exercised
(3,926
)
 
$
10.02

 
 
 
 
Forfeited or expired
(265
)
 
$
21.24

 
 
 
 
Outstanding as of September 30, 2018
6,348

 
$
18.34

 
5.9
 
$
20,051

Exercisable as of September 30, 2018
4,125

 
$
17.72

 
4.7
 
$
16,314


Assumptions used in the Black-Scholes option pricing model and the weighted-average fair value of option awards granted were as follows:
 
THIRTY-NINE WEEKS ENDED
 
SEPTEMBER 30, 2018

SEPTEMBER 24, 2017
Assumptions:
 
 
 
Weighted-average risk-free interest rate (1)
2.66
%
 
1.92
%
Dividend yield (2)
1.50
%
 
1.84
%
Expected term (3)
5.8 years

 
6.3 years

Weighted-average volatility (4)
32.76
%
 
33.72
%
 
 
 
 
Weighted-average grant date fair value per option
$
7.23

 
$
5.09

________________
(1)
Risk-free interest rate is the U.S. Treasury yield curve in effect as of the grant date for periods within the expected term 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 Company estimates the expected term based on historical exercise experience for its stock options.
(4)
Based on the historical volatility of the Company’s stock.

The following represents stock option compensation information for the periods indicated:
 
THIRTY-NINE WEEKS ENDED
(dollars in thousands)
SEPTEMBER 30, 2018
 
SEPTEMBER 24, 2017
Intrinsic value of options exercised
$
52,001

 
$
7,752

Excess tax benefits for tax deductions related to the exercise of stock options
$
8,316

 
$
1,257

Cash received from option exercises, net of tax withholding
$
39,329

 
$
7,095


During the thirty-nine weeks ended September 30, 2018, the Company made grants to its employees of 0.4 million time-based restricted stock units and 0.2 million performance-based share units. As of September 30, 2018, the maximum number of shares of common stock available for issuance pursuant to the Bloomin’ Brands, Inc. 2016 Omnibus Incentive Compensation Plan was 4,418,256.


18

Table of Contents
BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued

The following represents unrecognized stock compensation expense and the remaining weighted-average vesting period as of September 30, 2018:
 
UNRECOGNIZED COMPENSATION EXPENSE
(dollars in thousands)
 
REMAINING WEIGHTED-AVERAGE VESTING PERIOD (in years)
Stock options
$
9,718

 
2.4
Restricted stock units
$
17,181

 
2.6
Performance-based share units
$
7,925

 
1.1

6.    Other Current Assets, Net

Other current assets, net, consisted of the following:
(dollars in thousands)
SEPTEMBER 30, 2018
 
DECEMBER 31, 2017
Prepaid expenses
$
43,150

 
$
40,688

Accounts receivable - gift cards, net
11,358

 
66,361

Accounts receivable - vendors, net
5,307

 
19,483

Accounts receivable - franchisees, net
2,912

 
2,017

Accounts receivable - other, net
15,546

 
22,808

Deferred gift card sales commissions (1)
7,910

 
16,231

Assets held for sale
6,510

 
6,217

Other current assets, net
8,631

 
5,597

 
$
101,324

 
$
179,402

_______________
(1)
See Note 1 - Description of the Business and Basis of Presentation for details of the impact of implementing ASU No. 2014-09 on the Company’s Consolidated Balance Sheet as of December 31, 2017.

7.           Other Assets, Net

Other assets, net, consisted of the following:
(dollars in thousands)
SEPTEMBER 30, 2018
 
DECEMBER 31, 2017
Company-owned life insurance
$
63,780

 
$
73,818

Deferred financing fees (1)
6,980

 
8,232

Liquor licenses
24,198

 
24,659

Other assets
24,122

 
28,552

 
$
119,080

 
$
135,261

________________
(1)
Net of accumulated amortization of $4.7 million and $4.1 million as of September 30, 2018 and December 31, 2017, respectively.

8.           Accrued and Other Current Liabilities

Accrued and other current liabilities consisted of the following:
(dollars in thousands)
SEPTEMBER 30, 2018
 
DECEMBER 31, 2017
Accrued payroll and other compensation
$
94,973

 
$
113,636

Accrued insurance
23,245

 
23,482

Other current liabilities
109,649

 
133,722

 
$
227,867

 
$
270,840



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BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued

9.    Long-term Debt, Net

Following is a summary of outstanding long-term debt, as of the periods indicated:
 
SEPTEMBER 30, 2018
 
DECEMBER 31, 2017
(dollars in thousands)
OUTSTANDING BALANCE
 
INTEREST RATE
 
OUTSTANDING BALANCE
 
INTEREST RATE
Senior Secured Credit Facility:
 
 
 
 
 
 
 
Term loan A (1)
$
481,250

 
3.95
%
 
$
500,000

 
3.27
%
Revolving credit facility (1)
650,000

 
3.95
%
 
600,000

 
3.26
%
Total Senior Secured Credit Facility
$
1,131,250

 
 
 
$
1,100,000

 
 
Financing obligations
19,566

 
7.57% to 7.82%

 
19,579

 
7.52% to 7.82%

Capital lease obligations
2,732

 
 
 
2,015

 
 
Other notes payable
959

 
0.00% to 2.18%

 
904

 
0.00% to 2.18%

Less: unamortized debt discount and issuance costs
(3,716
)
 
 
 
(4,394
)
 
 
Total debt, net
$
1,150,791

 
 
 
$
1,118,104

 
 
Less: current portion of long-term debt
(26,767
)
 
 
 
(26,335
)
 
 
Long-term debt, net
$
1,124,024

 
 
 
$
1,091,769

 
 
________________
(1)
Represents the weighted-average interest rate for the respective period.

Debt Covenants - As of September 30, 2018 and December 31, 2017, the Company was in compliance with its debt covenants.

10.     Other Long-term Liabilities, Net

Other long-term liabilities, net, consisted of the following, as of the periods indicated:
(dollars in thousands)
SEPTEMBER 30, 2018
 
DECEMBER 31, 2017
Accrued insurance liability
$
35,269

 
$
35,945

Unfavorable leases (1)
33,567

 
36,661

Chef and Restaurant Managing Partner deferred compensation obligations and deposits
66,470

 
81,083

Other long-term liabilities (2)
50,824

 
56,754

 
$
186,130

 
$
210,443

_______________
(1)
Net of accumulated amortization of $35.9 million and $34.0 million as of September 30, 2018 and December 31, 2017, respectively.
(2)
See Note 1 - Description of the Business and Basis of Presentation for details of the impact of implementing ASU No. 2014-09 on the Company’s Consolidated Balance Sheet as of December 31, 2017.

11.
Stockholders’ Equity

Share Repurchases - On February 16, 2018, the Company’s Board of Directors (the “Board”) canceled the remaining $55.0 million of authorization under the 2017 Share Repurchase Program and approved a new $150.0 million authorization (the “2018 Share Repurchase Program”). The 2018 Share Repurchase Program will expire on August 16, 2019. As of September 30, 2018, $51.0 million remained available for repurchase under the 2018 Share Repurchase Program.


20

Table of Contents
BLOOMIN’ BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) - Continued

Following is a summary of the shares repurchased under the Company’s share repurchase program during fiscal year 2018: