|
|
|
|
|
(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, 2013
|
|
or
|
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from ______ to ______
|
Delaware
|
|
20-8023465
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
|
|
|
|
|
|
|
Page No.
|
|
|
|
Item 1.
|
3
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
5
|
|
|
|
|
|
6
|
|
|
|
|
|
8
|
|
|
|
|
|
10
|
|
|
|
|
Item 2.
|
25
|
|
|
|
|
Item 3.
|
54
|
|
|
|
|
Item 4.
|
54
|
|
|
|
|
|
|
|
|
|
|
Item 1A.
|
55
|
|
|
|
|
Item 6.
|
55
|
|
|
|
|
|
56
|
|
SEPTEMBER 30,
|
|
DECEMBER 31,
|
||||
|
2013
|
|
2012
|
||||
ASSETS
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
183,658
|
|
|
$
|
261,690
|
|
Current portion of restricted cash
|
3,789
|
|
|
4,846
|
|
||
Inventories
|
70,717
|
|
|
78,181
|
|
||
Deferred income tax assets
|
49,446
|
|
|
39,774
|
|
||
Other current assets, net
|
99,770
|
|
|
103,321
|
|
||
Total current assets
|
407,380
|
|
|
487,812
|
|
||
Restricted cash
|
15,504
|
|
|
15,243
|
|
||
Property, fixtures and equipment, net
|
1,563,443
|
|
|
1,506,035
|
|
||
Investments in and advances to unconsolidated affiliates, net
|
40,973
|
|
|
36,748
|
|
||
Goodwill
|
271,163
|
|
|
270,972
|
|
||
Intangible assets, net
|
541,214
|
|
|
551,779
|
|
||
Deferred income tax assets
|
2,893
|
|
|
2,532
|
|
||
Other assets, net
|
155,557
|
|
|
145,432
|
|
||
Total assets
|
$
|
2,998,127
|
|
|
$
|
3,016,553
|
|
|
|
|
|
||||
|
(CONTINUED...)
|
|
|
SEPTEMBER 30,
|
|
DECEMBER 31,
|
||||
|
2013
|
|
2012
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current Liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
155,445
|
|
|
$
|
131,814
|
|
Accrued and other current liabilities
|
171,272
|
|
|
192,284
|
|
||
Current portion of partner deposits and accrued partner obligations
|
13,566
|
|
|
14,771
|
|
||
Unearned revenue
|
202,204
|
|
|
329,518
|
|
||
Current portion of long-term debt
|
13,341
|
|
|
22,991
|
|
||
Total current liabilities
|
555,828
|
|
|
691,378
|
|
||
Partner deposits and accrued partner obligations
|
77,094
|
|
|
85,762
|
|
||
Deferred rent
|
103,024
|
|
|
87,641
|
|
||
Deferred income tax liabilities
|
130,636
|
|
|
195,874
|
|
||
Long-term debt, net
|
1,447,768
|
|
|
1,471,449
|
|
||
Other long-term liabilities, net
|
261,064
|
|
|
264,244
|
|
||
Total liabilities
|
2,575,414
|
|
|
2,796,348
|
|
||
Commitments and contingencies (see Note 12)
|
|
|
|
|
|
||
Stockholders’ Equity
|
|
|
|
||||
Bloomin’ Brands, Inc. Stockholders’ Equity
|
|
|
|
||||
Preferred stock, $0.01 par value, 25,000,000 shares authorized; no shares issued and outstanding at September 30, 2013 and December 31, 2012
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value, 475,000,000 shares authorized; 124,287,148 and 121,148,451 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively
|
1,243
|
|
|
1,211
|
|
||
Additional paid-in capital
|
1,057,933
|
|
|
1,000,963
|
|
||
Accumulated deficit
|
(624,070
|
)
|
|
(773,085
|
)
|
||
Accumulated other comprehensive loss
|
(16,780
|
)
|
|
(14,801
|
)
|
||
Total Bloomin’ Brands, Inc. stockholders’ equity
|
418,326
|
|
|
214,288
|
|
||
Noncontrolling interests
|
4,387
|
|
|
5,917
|
|
||
Total stockholders’ equity
|
422,713
|
|
|
220,205
|
|
||
Total liabilities and stockholders’ equity
|
$
|
2,998,127
|
|
|
$
|
3,016,553
|
|
|
|||||||
The accompanying notes are an integral part of these consolidated financial statements.
|
|
THREE MONTHS ENDED SEPTEMBER 30,
|
|
NINE MONTHS ENDED SEPTEMBER 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Restaurant sales
|
$
|
957,507
|
|
|
$
|
943,260
|
|
|
$
|
3,047,854
|
|
|
$
|
2,958,747
|
|
Other revenues
|
10,062
|
|
|
9,656
|
|
|
30,821
|
|
|
30,661
|
|
||||
Total revenues
|
967,569
|
|
|
952,916
|
|
|
3,078,675
|
|
|
2,989,408
|
|
||||
Costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of sales
|
317,589
|
|
|
309,420
|
|
|
993,031
|
|
|
960,751
|
|
||||
Labor and other related
|
274,125
|
|
|
270,011
|
|
|
858,020
|
|
|
834,912
|
|
||||
Other restaurant operating
|
246,240
|
|
|
236,318
|
|
|
717,489
|
|
|
686,160
|
|
||||
Depreciation and amortization
|
40,135
|
|
|
38,347
|
|
|
121,220
|
|
|
116,454
|
|
||||
General and administrative
|
61,822
|
|
|
111,633
|
|
|
199,407
|
|
|
259,851
|
|
||||
Provision for impaired assets and restaurant closings
|
121
|
|
|
—
|
|
|
2,706
|
|
|
9,089
|
|
||||
Income from operations of unconsolidated affiliates
|
(1,973
|
)
|
|
(1,268
|
)
|
|
(7,454
|
)
|
|
(5,392
|
)
|
||||
Total costs and expenses
|
938,059
|
|
|
964,461
|
|
|
2,884,419
|
|
|
2,861,825
|
|
||||
Income (loss) from operations
|
29,510
|
|
|
(11,545
|
)
|
|
194,256
|
|
|
127,583
|
|
||||
Loss on extinguishment and modification of debt
|
—
|
|
|
(8,956
|
)
|
|
(14,586
|
)
|
|
(11,807
|
)
|
||||
Other income (expense), net
|
223
|
|
|
83
|
|
|
(127
|
)
|
|
(46
|
)
|
||||
Interest expense, net
|
(17,690
|
)
|
|
(21,173
|
)
|
|
(56,585
|
)
|
|
(66,184
|
)
|
||||
Income (loss) before (benefit) provision for income taxes
|
12,043
|
|
|
(41,591
|
)
|
|
122,958
|
|
|
49,546
|
|
||||
(Benefit) provision for income taxes
|
(91
|
)
|
|
(7,836
|
)
|
|
(30,696
|
)
|
|
8,905
|
|
||||
Net income (loss)
|
12,134
|
|
|
(33,755
|
)
|
|
153,654
|
|
|
40,641
|
|
||||
Less: net income attributable to noncontrolling interests
|
840
|
|
|
2,111
|
|
|
4,269
|
|
|
9,068
|
|
||||
Net income (loss) attributable to Bloomin’ Brands, Inc.
|
$
|
11,294
|
|
|
$
|
(35,866
|
)
|
|
$
|
149,385
|
|
|
$
|
31,573
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
12,134
|
|
|
$
|
(33,755
|
)
|
|
$
|
153,654
|
|
|
$
|
40,641
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
10,697
|
|
|
6,710
|
|
|
(1,979
|
)
|
|
3,197
|
|
||||
Comprehensive income (loss)
|
22,831
|
|
|
(27,045
|
)
|
|
151,675
|
|
|
43,838
|
|
||||
Less: comprehensive income attributable to noncontrolling interests
|
840
|
|
|
2,111
|
|
|
4,269
|
|
|
9,068
|
|
||||
Comprehensive income (loss) attributable to Bloomin’ Brands, Inc.
|
$
|
21,991
|
|
|
$
|
(29,156
|
)
|
|
$
|
147,406
|
|
|
$
|
34,770
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.09
|
|
|
$
|
(0.31
|
)
|
|
$
|
1.22
|
|
|
$
|
0.29
|
|
Diluted
|
$
|
0.09
|
|
|
$
|
(0.31
|
)
|
|
$
|
1.16
|
|
|
$
|
0.28
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
123,747
|
|
|
114,331
|
|
|
122,624
|
|
|
109,028
|
|
||||
Diluted
|
129,439
|
|
|
114,331
|
|
|
128,464
|
|
|
111,145
|
|
|
BLOOMIN’ BRANDS, INC.
|
|
|
|
|
|||||||||||||||||||||
|
COMMON
STOCK |
|
COMMON
STOCK AMOUNT |
|
ADDITIONAL PAID-IN
CAPITAL |
|
ACCUM- ULATED
DEFICIT |
|
ACCUMULATED
OTHER COMPREHENSIVE LOSS |
|
NON-
CONTROLLING INTERESTS |
|
TOTAL
|
|||||||||||||
Balance, December 31, 2012
|
121,148
|
|
|
$
|
1,211
|
|
|
$
|
1,000,963
|
|
|
$
|
(773,085
|
)
|
|
$
|
(14,801
|
)
|
|
$
|
5,917
|
|
|
$
|
220,205
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
149,385
|
|
|
—
|
|
|
4,269
|
|
|
153,654
|
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,979
|
)
|
|
—
|
|
|
(1,979
|
)
|
||||||
Release of valuation allowance related to purchases of limited partnerships and joint venture interests
|
—
|
|
|
—
|
|
|
15,669
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,669
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
10,841
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,841
|
|
||||||
Exercises of stock options
|
2,921
|
|
|
29
|
|
|
24,652
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,681
|
|
||||||
Repurchase of common stock
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
(370
|
)
|
|
—
|
|
|
—
|
|
|
(370
|
)
|
||||||
Issuance of restricted stock
|
266
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||||
Forfeiture of restricted stock
|
(30
|
)
|
|
—
|
|
|
(21
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21
|
)
|
||||||
Repayments of notes receivable due from stockholders
|
—
|
|
|
—
|
|
|
5,829
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,829
|
|
||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,799
|
)
|
|
(5,799
|
)
|
||||||
Balance, September 30, 2013
|
124,287
|
|
|
$
|
1,243
|
|
|
$
|
1,057,933
|
|
|
$
|
(624,070
|
)
|
|
$
|
(16,780
|
)
|
|
$
|
4,387
|
|
|
$
|
422,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
(CONTINUED...)
|
|
|
BLOOMIN’ BRANDS, INC.
|
|
|
|
|
|||||||||||||||||||||
|
COMMON
STOCK |
|
COMMON
STOCK AMOUNT |
|
ADDITIONAL PAID-IN
CAPITAL |
|
ACCUM- ULATED
DEFICIT |
|
ACCUMULATED
OTHER COMPREHENSIVE LOSS |
|
NON-
CONTROLLING INTERESTS |
|
TOTAL
|
|||||||||||||
Balance, December 31, 2011
|
106,573
|
|
|
$
|
1,066
|
|
|
$
|
874,753
|
|
|
$
|
(822,625
|
)
|
|
$
|
(22,344
|
)
|
|
$
|
9,447
|
|
|
$
|
40,297
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
31,573
|
|
|
—
|
|
|
9,068
|
|
|
40,641
|
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,197
|
|
|
—
|
|
|
3,197
|
|
||||||
Issuance of common stock in connection with initial public offering
|
14,197
|
|
|
142
|
|
|
142,380
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
142,522
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
19,215
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,215
|
|
||||||
Exercises of stock options
|
136
|
|
|
1
|
|
|
883
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
884
|
|
||||||
Repurchase of common stock
|
(36
|
)
|
|
(1
|
)
|
|
316
|
|
|
(431
|
)
|
|
—
|
|
|
—
|
|
|
(116
|
)
|
||||||
Issuance of restricted stock
|
268
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||||
Forfeiture of restricted stock
|
(36
|
)
|
|
—
|
|
|
(138
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(138
|
)
|
||||||
Issuance of notes receivable due from stockholders
|
—
|
|
|
—
|
|
|
(550
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(550
|
)
|
||||||
Repayments of notes receivable due from stockholders
|
—
|
|
|
—
|
|
|
1,661
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,661
|
|
||||||
Purchase of limited partnership and joint venture interests
|
—
|
|
|
—
|
|
|
(18,247
|
)
|
|
—
|
|
|
—
|
|
|
545
|
|
|
(17,702
|
)
|
||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,673
|
)
|
|
(10,673
|
)
|
||||||
Balance, September 30, 2012
|
121,102
|
|
|
$
|
1,211
|
|
|
$
|
1,020,273
|
|
|
$
|
(791,483
|
)
|
|
$
|
(19,147
|
)
|
|
$
|
8,387
|
|
|
$
|
219,241
|
|
|
NINE MONTHS ENDED SEPTEMBER 30,
|
||||||
|
2013
|
|
2012
|
||||
Cash flows provided by operating activities:
|
|
|
|
||||
Net income
|
$
|
153,654
|
|
|
$
|
40,641
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
121,220
|
|
|
116,454
|
|
||
Amortization of deferred financing fees
|
2,673
|
|
|
7,028
|
|
||
Amortization of capitalized gift card sales commissions
|
17,209
|
|
|
15,237
|
|
||
Provision for impaired assets and restaurant closings
|
2,706
|
|
|
9,089
|
|
||
Accretion on debt discounts
|
1,837
|
|
|
647
|
|
||
Stock-based and other non-cash compensation expense
|
16,584
|
|
|
37,954
|
|
||
Income from operations of unconsolidated affiliates
|
(7,454
|
)
|
|
(5,392
|
)
|
||
Deferred income tax benefit
|
(56,146
|
)
|
|
(337
|
)
|
||
Loss on disposal of property, fixtures and equipment
|
321
|
|
|
1,302
|
|
||
Unrealized gain on derivative financial instruments
|
(262
|
)
|
|
(512
|
)
|
||
Gain on life insurance and restricted cash investments
|
(3,464
|
)
|
|
(4,149
|
)
|
||
Loss on extinguishment and modification of debt
|
14,586
|
|
|
11,807
|
|
||
Recognition of deferred gain on sale-leaseback transaction
|
(1,600
|
)
|
|
(1,073
|
)
|
||
Change in assets and liabilities:
|
|
|
|
|
|
||
Decrease (increase) in inventories
|
7,370
|
|
|
(12,939
|
)
|
||
(Increase) decrease in other current assets
|
(15,881
|
)
|
|
4,764
|
|
||
(Increase) decrease in other assets
|
(3,083
|
)
|
|
2,530
|
|
||
Decrease in accounts payable and accrued and other current liabilities
|
(13,188
|
)
|
|
(34,208
|
)
|
||
Increase in deferred rent
|
17,708
|
|
|
11,617
|
|
||
Decrease in unearned revenue
|
(127,330
|
)
|
|
(121,725
|
)
|
||
(Decrease) increase in other long-term liabilities
|
(787
|
)
|
|
2,215
|
|
||
Net cash provided by operating activities
|
126,673
|
|
|
80,950
|
|
||
Cash flows (used in) provided by investing activities:
|
|
|
|
|
|
||
Purchases of life insurance policies
|
(760
|
)
|
|
(60
|
)
|
||
Proceeds from sale of life insurance policies
|
1,071
|
|
|
—
|
|
||
Proceeds from disposal of property, fixtures and equipment
|
3,294
|
|
|
2,567
|
|
||
Proceeds from sale-leaseback transaction
|
—
|
|
|
192,886
|
|
||
Capital expenditures
|
(166,154
|
)
|
|
(134,166
|
)
|
||
Decrease in restricted cash
|
19,280
|
|
|
72,973
|
|
||
Increase in restricted cash
|
(18,470
|
)
|
|
(75,834
|
)
|
||
Return on investment from unconsolidated affiliates
|
267
|
|
|
332
|
|
||
Net cash (used in) provided by investing activities
|
$
|
(161,472
|
)
|
|
$
|
58,698
|
|
|
|
|
|
||||
|
(CONTINUED...)
|
|
|
NINE MONTHS ENDED SEPTEMBER 30,
|
||||||
|
2013
|
|
2012
|
||||
Cash flows used in financing activities:
|
|
|
|
||||
Proceeds from issuance of 2012 CMBS Loan
|
$
|
—
|
|
|
$
|
495,186
|
|
Repayments of long-term debt
|
(37,401
|
)
|
|
(18,949
|
)
|
||
Extinguishment of CMBS loan
|
—
|
|
|
(777,563
|
)
|
||
Extinguishment of senior notes
|
—
|
|
|
(254,660
|
)
|
||
Proceeds from borrowings on revolving credit facilities
|
—
|
|
|
25,000
|
|
||
Repayments of borrowings on revolving credit facilities
|
—
|
|
|
(33,000
|
)
|
||
Financing fees
|
(12,519
|
)
|
|
(5,442
|
)
|
||
Proceeds from the issuance of common stock in connection with initial public offering
|
—
|
|
|
142,522
|
|
||
Proceeds from the exercise of stock options
|
24,681
|
|
|
885
|
|
||
Distributions to noncontrolling interests
|
(5,799
|
)
|
|
(10,673
|
)
|
||
Repayments of partner deposits and accrued partner obligations
|
(17,426
|
)
|
|
(20,869
|
)
|
||
Issuance of notes receivable due from stockholders
|
—
|
|
|
(550
|
)
|
||
Repayments of notes receivable due from stockholders
|
5,829
|
|
|
1,661
|
|
||
Repurchase of common stock
|
(370
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
(43,005
|
)
|
|
(456,452
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(228
|
)
|
|
2,995
|
|
||
Net decrease in cash and cash equivalents
|
(78,032
|
)
|
|
(313,809
|
)
|
||
Cash and cash equivalents at the beginning of the period
|
261,690
|
|
|
482,084
|
|
||
Cash and cash equivalents at the end of the period
|
$
|
183,658
|
|
|
$
|
168,275
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
||
Cash paid for interest
|
$
|
54,416
|
|
|
$
|
59,129
|
|
Cash paid for income taxes, net of refunds
|
17,861
|
|
|
20,406
|
|
||
Supplemental disclosures of non-cash investing and financing activities:
|
|
|
|
|
|
||
Conversion of partner deposits and accrued partner obligations to notes payable
|
$
|
1,051
|
|
|
$
|
5,699
|
|
Purchase of limited partnership interests through accounts payable or notes payable
|
—
|
|
|
17,702
|
|
||
Acquisition of property, fixtures and equipment through accounts payable or capital lease liabilities
|
13,187
|
|
|
9,567
|
|
||
Release of valuation allowance through additional paid-in capital related to purchases of limited partnerships and joint venture interests
|
15,669
|
|
|
—
|
|
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||||||||||||
|
SEPTEMBER 30,
|
|
SEPTEMBER 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Net income (loss) attributable to Bloomin’ Brands, Inc.
|
$
|
11,294
|
|
|
$
|
(35,866
|
)
|
|
$
|
149,385
|
|
|
$
|
31,573
|
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted average common shares outstanding
|
123,747
|
|
|
114,331
|
|
|
122,624
|
|
|
109,028
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Effect of diluted securities:
|
|
|
|
|
|
|
|
||||||||
Stock options
|
5,500
|
|
|
—
|
|
|
5,303
|
|
|
2,028
|
|
||||
Unvested restricted stock
|
192
|
|
|
—
|
|
|
537
|
|
|
89
|
|
||||
Diluted weighted average common shares outstanding
|
129,439
|
|
|
114,331
|
|
|
128,464
|
|
|
111,145
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) per share
|
$
|
0.09
|
|
|
$
|
(0.31
|
)
|
|
$
|
1.22
|
|
|
$
|
0.29
|
|
Diluted earnings (loss) per share
|
$
|
0.09
|
|
|
$
|
(0.31
|
)
|
|
$
|
1.16
|
|
|
$
|
0.28
|
|
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||||||||
|
SEPTEMBER 30,
|
|
SEPTEMBER 30,
|
||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||
Stock options
|
1,328
|
|
|
12,319
|
|
|
1,557
|
|
|
1,178
|
|
Unvested restricted stock
|
—
|
|
|
253
|
|
|
—
|
|
|
—
|
|
|
STOCK OPTIONS
|
|
RESTRICTED STOCK AWARDS
|
|
PERFORMANCE-BASED SHARE UNITS (1)
|
|||
Outstanding at December 31, 2012
|
12,379
|
|
|
299
|
|
|
—
|
|
Granted
|
1,402
|
|
|
266
|
|
|
58
|
|
Exercised or vested
|
(2,921
|
)
|
|
(68
|
)
|
|
—
|
|
Forfeited or expired
|
(502
|
)
|
|
(30
|
)
|
|
(7
|
)
|
Outstanding at September 30, 2013
|
10,358
|
|
|
467
|
|
|
51
|
|
(1)
|
Share unit amounts represent the target number of PSUs considered granted for accounting recognition based on the establishment of performance targets for future years. The actual number of shares that will be earned upon vesting is dependent upon actual performance and may range from
zero
to
200%
of the target number of shares.
|
|
NINE MONTHS ENDED SEPTEMBER 30,
|
||||
|
2013
|
|
2012
|
||
Weighted-average risk-free interest rate
|
1.13
|
%
|
|
1.14
|
%
|
Dividend yield
|
—
|
%
|
|
—
|
%
|
Expected term
|
6.3 years
|
|
|
6.5 years
|
|
Weighted-average volatility
|
48.7
|
%
|
|
48.5
|
%
|
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||||||||||||
|
SEPTEMBER 30,
|
|
SEPTEMBER 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Net revenue from sales
|
$
|
61,844
|
|
|
$
|
58,482
|
|
|
$
|
191,551
|
|
|
$
|
172,608
|
|
Gross profit
|
42,631
|
|
|
40,912
|
|
|
132,130
|
|
|
120,744
|
|
||||
Income from continuing operations
|
9,875
|
|
|
4,761
|
|
|
24,388
|
|
|
18,957
|
|
||||
Net income
|
3,902
|
|
|
2,536
|
|
|
13,957
|
|
|
10,120
|
|
|
|
SEPTEMBER 30,
|
|
DECEMBER 31,
|
||||
|
|
2013
|
|
2012
|
||||
Accrued payroll and other compensation
|
|
$
|
81,729
|
|
|
$
|
108,612
|
|
Accrued insurance
|
|
23,862
|
|
|
22,235
|
|
||
Other current liabilities
|
|
65,681
|
|
|
61,437
|
|
||
|
|
$
|
171,272
|
|
|
$
|
192,284
|
|
|
SEPTEMBER 30,
|
|
DECEMBER 31,
|
||||
|
2013
|
|
2012
|
||||
Senior secured term loan B facility, interest rates of 3.50% and 4.75% at September 30, 2013 and December 31, 2012, respectively (1) (2)
|
$
|
975,000
|
|
|
$
|
1,000,000
|
|
Mortgage loan, weighted average interest rates of 4.01% and 3.98% at September 30, 2013 and December 31, 2012, respectively (3)
|
313,656
|
|
|
319,574
|
|
||
First mezzanine loan, interest rate of 9.00% at September 30, 2013 and December 31, 2012 (3)
|
86,374
|
|
|
87,048
|
|
||
Second mezzanine loan, interest rate of 11.25% at September 30, 2013 and December 31, 2012 (3)
|
86,859
|
|
|
87,273
|
|
||
Other notes payable, uncollateralized, interest rates ranging from 0.58% to 7.00% and from 0.63% to 7.00% at September 30, 2013 and December 31, 2012, respectively (2)
|
6,030
|
|
|
9,848
|
|
||
Sale-leaseback obligations (2)
|
2,375
|
|
|
2,375
|
|
||
Capital lease obligations (2)
|
1,581
|
|
|
2,112
|
|
||
|
1,471,875
|
|
|
1,508,230
|
|
||
Less: current portion of long-term debt
|
(13,341
|
)
|
|
(22,991
|
)
|
||
Less: unamortized debt discount
|
(10,766
|
)
|
|
(13,790
|
)
|
||
Long-term debt, net
|
$
|
1,447,768
|
|
|
$
|
1,471,449
|
|
(1)
|
At
December 31, 2012
,
$50.0 million
of OSI’s outstanding senior secured term loan B facility was at an interest rate of
5.75%
.
|
(2)
|
Represents obligations of OSI.
|
(3)
|
Represents obligations of New PRP (as defined below).
|
•
|
50%
of its “annual excess cash flow” (with step-downs to
25%
and
0%
based upon its consolidated first lien net leverage ratio), as defined in the Credit Agreement, beginning with the fiscal year ending December 31, 2013 and subject to certain exceptions;
|
•
|
100%
of the net proceeds of certain assets sales and insurance and condemnation events, subject to reinvestment rights and certain other exceptions; and
|
•
|
100%
of the net proceeds of any debt incurred, excluding permitted debt issuances.
|
|
|
SEPTEMBER 30, 2012
|
|
|
||||||||||||||||
|
|
|
|
REMAINING FAIR VALUE
|
|
NINE MONTHS ENDED
SEPTEMBER 30, 2012
|
||||||||||||||
|
|
CARRYING VALUE
|
|
LEVEL 1
|
|
LEVEL 2
|
|
LEVEL 3
|
|
TOTAL
LOSSES |
||||||||||
Long-lived assets held and used
|
|
$
|
2,704
|
|
|
$
|
—
|
|
|
$
|
646
|
|
|
$
|
2,058
|
|
|
$
|
7,558
|
|
|
|
NINE MONTHS ENDED
|
UNOBSERVABLE INPUT
|
|
SEPTEMBER 30, 2012
|
Weighted-average cost of capital (1)
|
|
10.4% - 11.2%
|
Long-term growth rates
|
|
3.0%
|
Annual revenue growth rates (2)
|
|
(8.7)% - 4.3%
|
(1)
|
Weighted average of the cost of capital unobservable input range was
10.9%
for the
nine months ended September 30, 2012
.
|
(2)
|
Weighted average of the annual revenue growth rates unobservable input range was
2.6%
for the
nine months ended September 30, 2012
.
|
|
|
SEPTEMBER 30, 2013
|
||||||||||||||
|
|
|
|
FAIR VALUE
|
||||||||||||
|
|
CARRYING VALUE
|
|
LEVEL 1
|
|
LEVEL 2
|
|
LEVEL 3
|
||||||||
Senior secured term loan B facility (1)
|
|
$
|
975,000
|
|
|
$
|
—
|
|
|
$
|
972,563
|
|
|
$
|
—
|
|
Mortgage loan (2)
|
|
313,656
|
|
|
—
|
|
|
—
|
|
|
330,647
|
|
||||
First mezzanine loan (2)
|
|
86,374
|
|
|
—
|
|
|
—
|
|
|
87,453
|
|
||||
Second mezzanine loan (2)
|
|
86,859
|
|
|
—
|
|
|
—
|
|
|
87,945
|
|
||||
Other notes payable (1)
|
|
6,030
|
|
|
—
|
|
|
—
|
|
|
5,697
|
|
|
|
DECEMBER 31, 2012
|
||||||||||||||
|
|
|
|
FAIR VALUE
|
||||||||||||
|
|
CARRYING VALUE
|
|
LEVEL 1
|
|
LEVEL 2
|
|
LEVEL 3
|
||||||||
Senior secured term loan B facility (1)
|
|
$
|
1,000,000
|
|
|
$
|
—
|
|
|
$
|
1,010,000
|
|
|
$
|
—
|
|
Mortgage loan (2)
|
|
319,574
|
|
|
—
|
|
|
—
|
|
|
334,678
|
|
||||
First mezzanine loan (2)
|
|
87,048
|
|
|
—
|
|
|
—
|
|
|
90,371
|
|
||||
Second mezzanine loan (2)
|
|
87,273
|
|
|
—
|
|
|
—
|
|
|
91,423
|
|
||||
Other notes payable (1)
|
|
9,848
|
|
|
—
|
|
|
—
|
|
|
9,230
|
|
(1)
|
Represents obligations of OSI.
|
(2)
|
Represents obligations of New PRP.
|
|
NET INCOME (LOSS) ATTRIBUTABLE TO BLOOMIN’ BRANDS, INC. AND TRANSFERS TO NONCONTROLLING INTERESTS
|
||||||||||||||
|
|||||||||||||||
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||||||||||||
|
SEPTEMBER 30,
|
|
SEPTEMBER 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Net income (loss) attributable to Bloomin’ Brands, Inc.
|
$
|
11,294
|
|
|
$
|
(35,866
|
)
|
|
$
|
149,385
|
|
|
$
|
31,573
|
|
Transfers to noncontrolling interests:
|
|
|
|
|
|
|
|
||||||||
Decrease in Bloomin’ Brands, Inc. additional paid-in capital for
|
|
|
|
|
|
|
|
||||||||
purchase of limited partnership interests
|
—
|
|
|
(18,247
|
)
|
|
—
|
|
|
(18,247
|
)
|
||||
Change from net income (loss) attributable to Bloomin’ Brands,
|
$
|
11,294
|
|
|
$
|
(54,113
|
)
|
|
$
|
149,385
|
|
|
$
|
13,326
|
|
Inc. and transfers to noncontrolling interests
|
|
|
|
(i)
|
The restaurant industry is a highly competitive industry with many well-established competitors;
|
(ii)
|
Challenging economic conditions may affect our liquidity by adversely impacting numerous items that include, but are not limited to: consumer confidence and discretionary spending; the availability of credit presently arranged from our revolving credit facilities; the future cost and availability of credit; interest rates; foreign currency exchange rates; and the liquidity or operations of our third-party vendors and other service providers;
|
(iii)
|
Our ability to expand is dependent upon various factors such as the availability of attractive sites for new restaurants; our ability to obtain appropriate real estate sites at acceptable prices; our ability to obtain all required governmental permits including zoning approvals and liquor licenses on a timely basis; the impact of government moratoriums or approval processes, which could result in significant delays; our ability to obtain all necessary contractors and subcontractors; union activities such as picketing and hand billing that could delay construction; our ability to generate or borrow funds; our ability to negotiate suitable lease terms; our ability to recruit and train skilled management and restaurant employees; and our ability to receive the premises from the landlord’s developer without any delays;
|
(iv)
|
Our results can be impacted by changes in consumer tastes and the level of consumer acceptance of our restaurant concepts (including consumer tolerance of our prices); local, regional, national and international economic and political conditions; the seasonality of our business; demographic trends; traffic patterns and our ability to effectively respond in a timely manner to changes in traffic patterns; changes in consumer dietary habits; employee availability; the cost of advertising and media; government actions and policies; inflation or deflation; unemployment rates; interest rates; exchange rates; and increases in various costs, including construction, real estate and health insurance costs;
|
(v)
|
Weather, natural disasters and other disasters could result in construction delays and also adversely affect the results of one or more restaurants for an indeterminate amount of time;
|
(vi)
|
Our results can be negatively impacted by the effects of acts of war; periods of widespread civil unrest; or actual or threatened armed conflicts or terrorist attacks, efforts to combat terrorism, or other military action affecting countries in which we do business and by the effects of heightened security requirements on local, regional, national, or international economies or consumer confidence;
|
(vii)
|
Our results can be impacted by tax and other legislation and regulation in the jurisdictions in which we operate and by accounting standards or pronouncements;
|
(viii)
|
Our results can be impacted by unanticipated changes in our tax rates, exposure to additional income tax liabilities, or a change in our ability to realize deferred tax benefits;
|
(ix)
|
Minimum wage increases and mandated employee benefits could cause a significant increase in our labor costs;
|
(x)
|
Commodities, including but not limited to, such items as beef, chicken, shrimp, pork, seafood, dairy, produce, potatoes, onions and energy supplies, are subject to fluctuation in price and availability and price could increase or decrease more than we expect;
|
(xi)
|
Our results can be affected by consumer reaction to public health issues;
|
(xii)
|
Our results can be affected by consumer perception of food safety;
|
(xiii)
|
We could face liabilities if we are unable to protect customer credit and debit card data or personal employee information; and
|
(xiv)
|
Our substantial leverage and significant restrictive covenants in our various credit facilities could adversely affect our ability to raise additional capital to fund our operations, limit our ability to make capital expenditures to invest in new, relocate or renovate restaurants, limit our ability to react to changes in the economy or our industry and expose us to interest rate risk in connection with our variable-rate debt.
|
•
|
Grow Comparable Restaurant Sales.
We plan to continue our efforts to remodel our Outback Steakhouse and Carrabba’s Italian Grill restaurants, use limited-time offers and multimedia marketing campaigns to drive traffic, selectively expand the lunch daypart and introduce innovative menu items that match evolving consumer preferences. In addition, in April 2013, we accelerated our restaurant relocation plan primarily related to the Outback Steakhouse brand.
|
•
|
Pursue New Domestic and International Development With Strong Unit Level Economics.
We believe that a substantial development opportunity remains for our concepts in the U.S. and internationally. Our top domestic development priority is Bonefish Grill unit growth. Internationally, we are focusing on developing Outback Steakhouse in the existing markets of South Korea, Hong Kong and Brazil, with strategic expansion in selected emerging and high growth developed markets. We are focusing our new market growth in China, Mexico and South America. During the fourth quarter of 2013, we acquired a a controlling interest in our Brazilian operations, which allows us to participate in what we believe are the ongoing and significant growth opportunities in Brazil. We expect to open between 45 and 55 system-wide locations in 2013 and increase the pace thereafter.
|
•
|
Drive Margin Improvement.
We believe we have the opportunity to increase our margins through leveraging increases in average unit volumes and cost reductions in labor, food, supply chain and restaurant facilities.
|
•
|
Average restaurant unit volumes
—average sales per restaurant to measure changes in customer traffic, pricing and development of the brand;
|
•
|
Comparable restaurant sales
—year-over-year comparison of sales volumes for domestic, Company-owned restaurants that are open 18 months or more in order to remove the impact of new restaurant openings in comparing the operations of existing restaurants;
|
•
|
System-wide sales
—total restaurant sales volume for all Company-owned, franchise and unconsolidated joint venture restaurants, regardless of ownership, to interpret the overall health of our brands;
|
•
|
Adjusted income from operations, Adjusted net income attributable to Bloomin’ Brands, Inc., Adjusted diluted earnings per share and Adjusted diluted earnings per pro forma share
—non-GAAP financial measures utilized to evaluate our operating performance (see “—Non-GAAP Financial Measures” section for further information); and
|
•
|
Customer satisfaction scores
—measurement of our customers’ experiences in a variety of key attributes.
|
|
SEPTEMBER 30,
|
||||
|
2013
|
|
2012
|
||
Number of restaurants (at end of the period):
|
|
|
|
||
Outback Steakhouse
|
|
|
|
||
Company-owned—domestic (1)
|
664
|
|
|
667
|
|
Company-owned—international (1)
|
119
|
|
|
114
|
|
Franchised—domestic
|
106
|
|
|
106
|
|
Franchised and joint venture—international
|
94
|
|
|
83
|
|
Total
|
983
|
|
|
970
|
|
Carrabba’s Italian Grill
|
|
|
|
||
Company-owned
|
237
|
|
|
232
|
|
Franchised
|
1
|
|
|
1
|
|
Total
|
238
|
|
|
233
|
|
Bonefish Grill
|
|
|
|
||
Company-owned
|
181
|
|
|
160
|
|
Franchised
|
7
|
|
|
7
|
|
Total
|
188
|
|
|
167
|
|
Fleming’s Prime Steakhouse and Wine Bar
|
|
|
|
||
Company-owned
|
65
|
|
|
64
|
|
Roy’s
|
|
|
|
||
Company-owned
|
21
|
|
|
22
|
|
System-wide total
|
1,495
|
|
|
1,456
|
|
(1)
|
One Company-owned restaurant in Puerto Rico that was previously included in Outback Steakhouse (international) is now included in Outback Steakhouse (domestic). The prior period has been revised to conform to the current period presentation.
|
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||||||||
|
SEPTEMBER 30,
|
|
SEPTEMBER 30,
|
||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||
Revenues
|
|
|
|
|
|
|
|
|
|||
Restaurant sales
|
99.0
|
%
|
|
99.0
|
%
|
|
99.0
|
%
|
|
99.0
|
%
|
Other revenues
|
1.0
|
|
|
1.0
|
|
|
1.0
|
|
|
1.0
|
|
Total revenues
|
100.0
|
|
|
100.0
|
|
|
100.0
|
|
|
100.0
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales (1)
|
33.2
|
|
|
32.8
|
|
|
32.6
|
|
|
32.5
|
|
Labor and other related (1)
|
28.6
|
|
|
28.6
|
|
|
28.2
|
|
|
28.2
|
|
Other restaurant operating (1)
|
25.7
|
|
|
25.1
|
|
|
23.5
|
|
|
23.2
|
|
Depreciation and amortization
|
4.1
|
|
|
4.0
|
|
|
3.9
|
|
|
3.9
|
|
General and administrative
|
6.4
|
|
|
11.7
|
|
|
6.5
|
|
|
8.7
|
|
Provision for impaired assets and restaurant closings
|
*
|
|
|
—
|
|
|
0.1
|
|
|
0.3
|
|
Income from operations of unconsolidated affiliates
|
(0.2
|
)
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
(0.2
|
)
|
Total costs and expenses
|
97.0
|
|
|
101.2
|
|
|
93.7
|
|
|
95.7
|
|
Income (loss) from operations
|
3.0
|
|
|
(1.2
|
)
|
|
6.3
|
|
|
4.3
|
|
Loss on extinguishment and modification of debt
|
—
|
|
|
(1.0
|
)
|
|
(0.5
|
)
|
|
(0.4
|
)
|
Other income (expense), net
|
*
|
|
|
*
|
|
|
(*)
|
|
|
(*)
|
|
Interest expense, net
|
(1.7
|
)
|
|
(2.2
|
)
|
|
(1.8
|
)
|
|
(2.2
|
)
|
Income (loss) before (benefit) provision for income taxes
|
1.3
|
|
|
(4.4
|
)
|
|
4.0
|
|
|
1.7
|
|
(Benefit) provision for income taxes
|
(*)
|
|
|
(0.9
|
)
|
|
(1.0
|
)
|
|
0.3
|
|
Net income (loss)
|
1.3
|
|
|
(3.5
|
)
|
|
5.0
|
|
|
1.4
|
|
Less: net income attributable to noncontrolling interests
|
0.1
|
|
|
0.3
|
|
|
0.1
|
|
|
0.3
|
|
Net income (loss) attributable to Bloomin’ Brands, Inc.
|
1.2
|
%
|
|
(3.8
|
)%
|
|
4.9
|
%
|
|
1.1
|
%
|
|
|
|
|
|
|
|
|
||||
Net income (loss)
|
1.3
|
%
|
|
(3.5
|
)%
|
|
5.0
|
%
|
|
1.4
|
%
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||
Foreign currency translation adjustment
|
1.1
|
|
|
0.7
|
|
|
(0.1
|
)
|
|
0.1
|
|
Comprehensive income (loss)
|
2.4
|
|
|
(2.8
|
)
|
|
4.9
|
|
|
1.5
|
|
Less: comprehensive income attributable to noncontrolling interests
|
0.1
|
|
|
0.3
|
|
|
0.1
|
|
|
0.3
|
|
Comprehensive income (loss) attributable to Bloomin’ Brands, Inc.
|
2.3
|
%
|
|
(3.1
|
)%
|
|
4.8
|
%
|
|
1.2
|
%
|
(1)
|
As a percentage of Restaurant sales.
|
*
|
Less than 1/10
th
of one percent of Total revenues.
|
|
THREE MONTHS ENDED
|
|
|
|
|
|
NINE MONTHS ENDED
|
|
|
|
|
||||||||||||||||||
|
SEPTEMBER 30,
|
|
|
|
|
|
SEPTEMBER 30,
|
|
|
|
|
||||||||||||||||||
(dollars in millions):
|
2013
|
|
2012
|
|
$ Change
|
|
% Change
|
|
2013
|
|
2012
|
|
$ Change
|
|
% Change
|
||||||||||||||
Restaurant sales
|
$
|
957.5
|
|
|
$
|
943.3
|
|
|
$
|
14.2
|
|
|
1.5
|
%
|
|
$
|
3,047.9
|
|
|
$
|
2,958.7
|
|
|
$
|
89.2
|
|
|
3.0
|
%
|
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||||||||||||
|
SEPTEMBER 30,
|
|
SEPTEMBER 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Average restaurant unit volumes (weekly):
|
|
|
|
|
|
|
|
||||||||
Outback Steakhouse (1)
|
$
|
58,069
|
|
|
$
|
57,922
|
|
|
$
|
62,491
|
|
|
$
|
60,961
|
|
Carrabba’s Italian Grill
|
$
|
54,132
|
|
|
$
|
53,595
|
|
|
$
|
58,085
|
|
|
$
|
58,123
|
|
Bonefish Grill
|
$
|
55,699
|
|
|
$
|
57,847
|
|
|
$
|
60,927
|
|
|
$
|
61,644
|
|
Fleming’s Prime Steakhouse and Wine Bar
|
$
|
66,254
|
|
|
$
|
64,058
|
|
|
$
|
75,515
|
|
|
$
|
72,537
|
|
Operating weeks:
|
|
|
|
|
|
|
|
|
|||||||
Outback Steakhouse (1)
|
8,721
|
|
|
8,795
|
|
|
25,882
|
|
|
26,215
|
|
||||
Carrabba’s Italian Grill
|
3,104
|
|
|
3,042
|
|
|
9,155
|
|
|
9,023
|
|
||||
Bonefish Grill
|
2,347
|
|
|
2,066
|
|
|
6,807
|
|
|
6,009
|
|
||||
Fleming’s Prime Steakhouse and Wine Bar
|
854
|
|
|
841
|
|
|
2,535
|
|
|
2,505
|
|
||||
Year over year percentage change:
|
|
|
|
|
|
|
|
|
|||||||
Menu price increases: (2)
|
|
|
|
|
|
|
|
|
|||||||
Outback Steakhouse
|
2.7
|
%
|
|
2.2
|
%
|
|
2.5
|
%
|
|
2.1
|
%
|
||||
Carrabba’s Italian Grill
|
2.9
|
%
|
|
2.2
|
%
|
|
2.2
|
%
|
|
2.2
|
%
|
||||
Bonefish Grill
|
2.1
|
%
|
|
2.1
|
%
|
|
2.0
|
%
|
|
2.4
|
%
|
||||
Fleming’s Prime Steakhouse and Wine Bar
|
4.5
|
%
|
|
1.8
|
%
|
|
3.2
|
%
|
|
2.2
|
%
|
||||
Comparable restaurant sales (stores open 18 months or more):
|
|
|
|
|
|
|
|
|
|||||||
Outback Steakhouse (1)
|
(0.3
|
)%
|
|
4.4
|
%
|
|
1.7
|
%
|
|
4.0
|
%
|
||||
Carrabba’s Italian Grill
|
—
|
%
|
|
1.0
|
%
|
|
(0.5
|
)%
|
|
2.3
|
%
|
||||
Bonefish Grill
|
(2.7
|
)%
|
|
3.5
|
%
|
|
(0.5
|
)%
|
|
3.9
|
%
|
||||
Fleming’s Prime Steakhouse and Wine Bar
|
4.2
|
%
|
|
4.1
|
%
|
|
4.4
|
%
|
|
5.5
|
%
|
||||
Combined (concepts above)
|
(0.3
|
)%
|
|
3.6
|
%
|
|
1.2
|
%
|
|
3.8
|
%
|
(1)
|
One Company-owned restaurant in Puerto Rico that was previously included in Outback Steakhouse (international) is now included in Outback Steakhouse (domestic). This change affects the calculation of average restaurant unit volumes, operating weeks and comparable restaurant sales. The prior period has been revised to conform to the current period presentation.
|
(2)
|
The stated menu price changes exclude the impact of product mix shifts to new menu offerings.
|
|
THREE MONTHS ENDED
|
|
|
|
NINE MONTHS ENDED
|
|
|
||||||||||||||
|
SEPTEMBER 30,
|
|
|
|
SEPTEMBER 30,
|
|
|
||||||||||||||
(dollars in millions):
|
2013
|
|
2012
|
|
Change
|
|
2013
|
|
2012
|
|
Change
|
||||||||||
Cost of sales
|
$
|
317.6
|
|
|
$
|
309.4
|
|
|
|
|
$
|
993.0
|
|
|
$
|
960.8
|
|
|
|
||
% of Restaurant sales
|
33.2
|
%
|
|
32.8
|
%
|
|
0.4
|
%
|
|
32.6
|
%
|
|
32.5
|
%
|
|
0.1
|
%
|
|
THREE MONTHS ENDED
|
|
|
|
NINE MONTHS ENDED
|
|
|
||||||||||||||
|
SEPTEMBER 30,
|
|
|
|
SEPTEMBER 30,
|
|
|
||||||||||||||
(dollars in millions):
|
2013
|
|
2012
|
|
Change
|
|
2013
|
|
2012
|
|
Change
|
||||||||||
Labor and other related
|
$
|
274.1
|
|
|
$
|
270.0
|
|
|
|
|
$
|
858.0
|
|
|
$
|
834.9
|
|
|
|
||
% of Restaurant sales
|
28.6
|
%
|
|
28.6
|
%
|
|
—
|
%
|
|
28.2
|
%
|
|
28.2
|
%
|
|
—
|
%
|
|
THREE MONTHS ENDED
|
|
|
|
NINE MONTHS ENDED
|
|
|
||||||||||||||
|
SEPTEMBER 30,
|
|
|
|
SEPTEMBER 30,
|
|
|
||||||||||||||
(dollars in millions):
|
2013
|
|
2012
|
|
Change
|
|
2013
|
|
2012
|
|
Change
|
||||||||||
Other restaurant operating
|
$
|
246.2
|
|
|
$
|
236.3
|
|
|
|
|
$
|
717.5
|
|
|
$
|
686.2
|
|
|
|
||
% of Restaurant sales
|
25.7
|
%
|
|
25.1
|
%
|
|
0.6
|
%
|
|
23.5
|
%
|
|
23.2
|
%
|
|
0.3
|
%
|
|
THREE MONTHS ENDED
|
|
|
|
NINE MONTHS ENDED
|
|
|
||||||||||||||||
|
SEPTEMBER 30,
|
|
|
|
SEPTEMBER 30,
|
|
|
||||||||||||||||
(in millions):
|
2013
|
|
2012
|
|
Change
|
|
2013
|
|
2012
|
|
Change
|
||||||||||||
General and administrative
|
$
|
61.8
|
|
|
$
|
111.6
|
|
|
$
|
(49.8
|
)
|
|
$
|
199.4
|
|
|
$
|
259.9
|
|
|
$
|
(60.5
|
)
|
|
THREE MONTHS ENDED
|
|
|
|
NINE MONTHS ENDED
|
|
|
||||||||||||||||
|
SEPTEMBER 30,
|
|
|
|
SEPTEMBER 30,
|
|
|
||||||||||||||||
(in millions):
|
2013
|
|
2012
|
|
Change
|
|
2013
|
|
2012
|
|
Change
|
||||||||||||
Provision for impaired assets and restaurant closings
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
2.7
|
|
|
$
|
9.1
|
|
|
$
|
(6.4
|
)
|
|
THREE MONTHS ENDED
|
|
|
|
NINE MONTHS ENDED
|
|
|
||||||||||||||||
|
SEPTEMBER 30,
|
|
|
|
SEPTEMBER 30,
|
|
|
||||||||||||||||
(dollars in millions):
|
2013
|
|
2012
|
|
Change
|
|
2013
|
|
2012
|
|
Change
|
||||||||||||
Income (loss) from operations
|
$
|
29.5
|
|
|
$
|
(11.5
|
)
|
|
$
|
41.0
|
|
|
$
|
194.3
|
|
|
$
|
127.6
|
|
|
$
|
66.7
|
|
|
THREE MONTHS ENDED
|
|
|
|
NINE MONTHS ENDED
|
|
|
||||||||||||||||
|
SEPTEMBER 30,
|
|
|
|
SEPTEMBER 30,
|
|
|
||||||||||||||||
(in millions):
|
2013
|
|
2012
|
|
Change
|
|
2013
|
|
2012
|
|
Change
|
||||||||||||
Interest expense, net
|
$
|
17.7
|
|
|
$
|
21.2
|
|
|
$
|
(3.5
|
)
|
|
$
|
56.6
|
|
|
$
|
66.2
|
|
|
$
|
(9.6
|
)
|
|
THREE MONTHS ENDED
|
|
|
|
NINE MONTHS ENDED
|
|
|
||||||||||
|
SEPTEMBER 30,
|
|
|
|
SEPTEMBER 30,
|
|
|
||||||||||
|
2013
|
|
2012
|
|
Change
|
|
2013
|
|
2012
|
|
Change
|
||||||
Effective income tax rate
|
(0.8
|
)%
|
|
18.8
|
%
|
|
(19.6
|
)%
|
|
(25.0
|
)%
|
|
18.0
|
%
|
|
(43.0
|
)%
|
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||||||||||||
|
SEPTEMBER 30,
|
|
SEPTEMBER 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
COMPANY-OWNED RESTAURANT SALES (in millions):
|
|
|
|
|
|
|
|
||||||||
Outback Steakhouse
|
|
|
|
|
|
|
|
||||||||
Domestic (1)
|
$
|
507
|
|
|
$
|
509
|
|
|
$
|
1,617
|
|
|
$
|
1,598
|
|
International (1)
|
78
|
|
|
79
|
|
|
235
|
|
|
225
|
|
||||
Total
|
585
|
|
|
588
|
|
|
1,852
|
|
|
1,823
|
|
||||
Carrabba’s Italian Grill
|
168
|
|
|
164
|
|
|
532
|
|
|
524
|
|
||||
Bonefish Grill
|
131
|
|
|
119
|
|
|
415
|
|
|
370
|
|
||||
Fleming’s Prime Steakhouse and Wine Bar
|
56
|
|
|
54
|
|
|
191
|
|
|
182
|
|
||||
Other
|
18
|
|
|
18
|
|
|
58
|
|
|
60
|
|
||||
Total Company-owned restaurant sales
|
$
|
958
|
|
|
$
|
943
|
|
|
$
|
3,048
|
|
|
$
|
2,959
|
|
(1)
|
Company-owned restaurant sales for one location in Puerto Rico that were previously included in Outback Steakhouse (international) are now included in Outback Steakhouse (domestic). The prior period has been revised to conform to the current period presentation.
|
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||||||||||||
|
SEPTEMBER 30,
|
|
SEPTEMBER 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
FRANCHISE AND UNCONSOLIDATED JOINT VENTURE SALES (in millions) (1):
|
|
|
|
|
|
|
|
||||||||
Outback Steakhouse
|
|
|
|
|
|
|
|
||||||||
Domestic
|
$
|
76
|
|
|
$
|
74
|
|
|
$
|
239
|
|
|
$
|
234
|
|
International
|
92
|
|
|
88
|
|
|
280
|
|
|
261
|
|
||||
Total
|
168
|
|
|
162
|
|
|
519
|
|
|
495
|
|
||||
Carrabba’s Italian Grill
|
1
|
|
|
1
|
|
|
3
|
|
|
3
|
|
||||
Bonefish Grill
|
5
|
|
|
5
|
|
|
14
|
|
|
14
|
|
||||
Total franchise and unconsolidated joint venture sales (1)
|
$
|
174
|
|
|
$
|
168
|
|
|
$
|
536
|
|
|
$
|
512
|
|
Income from franchise and unconsolidated joint ventures (2)
|
$
|
11
|
|
|
$
|
9
|
|
|
$
|
34
|
|
|
$
|
30
|
|
(1)
|
Franchise and unconsolidated joint venture sales are not included in revenues in the Consolidated Statements of Operations and Comprehensive Income (Loss).
|
(2)
|
Represents the franchise royalty and the portion of total income related to restaurant operations included in the Consolidated Statements of Operations and Comprehensive Income (Loss) in Other revenues and Income from operations of unconsolidated affiliates, respectively.
|
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||||||||||||
|
SEPTEMBER 30,
|
|
SEPTEMBER 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Income (loss) from operations
|
$
|
29,510
|
|
|
$
|
(11,545
|
)
|
|
$
|
194,256
|
|
|
$
|
127,583
|
|
Transaction-related and payroll tax expenses (1)
|
5,938
|
|
|
37,726
|
|
|
6,642
|
|
|
44,487
|
|
||||
Management fees and expenses (2)
|
—
|
|
|
9,159
|
|
|
—
|
|
|
13,776
|
|
||||
Adjusted income from operations
|
$
|
35,448
|
|
|
$
|
35,340
|
|
|
$
|
200,898
|
|
|
$
|
185,846
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to Bloomin’ Brands, Inc.
|
$
|
11,294
|
|
|
$
|
(35,866
|
)
|
|
$
|
149,385
|
|
|
$
|
31,573
|
|
Transaction-related and payroll tax expenses (1)
|
5,938
|
|
|
37,726
|
|
|
6,642
|
|
|
44,487
|
|
||||
Management fees and expenses (2)
|
—
|
|
|
9,159
|
|
|
—
|
|
|
13,776
|
|
||||
Loss on extinguishment and modification of debt (3)
|
—
|
|
|
8,956
|
|
|
14,586
|
|
|
11,807
|
|
||||
Total adjustments, before income taxes
|
5,938
|
|
|
55,841
|
|
|
21,228
|
|
|
70,070
|
|
||||
Adjustment to (benefit) provision for income taxes (4)
|
(4,047
|
)
|
|
(10,660
|
)
|
|
(62,417
|
)
|
|
(13,377
|
)
|
||||
Net adjustments
|
1,891
|
|
|
45,181
|
|
|
(41,189
|
)
|
|
56,693
|
|
||||
Adjusted net income attributable to Bloomin’ Brands, Inc.
|
$
|
13,185
|
|
|
$
|
9,315
|
|
|
$
|
108,196
|
|
|
$
|
88,266
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings (loss) per share
|
$
|
0.09
|
|
|
$
|
(0.31
|
)
|
|
$
|
1.16
|
|
|
$
|
0.28
|
|
Adjusted diluted earnings per share
|
$
|
0.10
|
|
|
$
|
0.08
|
|
|
$
|
0.84
|
|
|
$
|
0.79
|
|
Adjusted diluted earnings per pro forma share (5) (6)
|
$
|
0.10
|
|
|
$
|
0.07
|
|
|
$
|
0.84
|
|
|
$
|
0.75
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted weighted average common shares outstanding
|
129,439
|
|
|
114,331
|
|
|
128,464
|
|
|
111,145
|
|
||||
Pro forma IPO adjustment (5)
|
—
|
|
|
6,461
|
|
|
—
|
|
|
6,461
|
|
||||
Diluted weighted average common shares outstanding adjustment (6)
|
—
|
|
|
4,374
|
|
|
—
|
|
|
—
|
|
||||
Pro forma diluted weighted average common shares outstanding (5) (6)
|
129,439
|
|
|
125,166
|
|
|
128,464
|
|
|
117,606
|
|
(1)
|
Transaction-related and payroll tax expenses primarily relate to costs incurred in association with the initial public offering and subsequent secondary offering of our common stock completed in August 2012 and May 2013, respectively, costs incurred during the third quarter of 2013 associated with the acquisition of a controlling ownership interest in our Brazilian operations, accrued expenses associated with a payroll tax audit and the refinancing of the 2012 CMBS Loan in March 2012. The expenses related to the initial public offering primarily included $18.1 million of accelerated CEO retention bonus and incentive bonus and $16.0 million of non-cash stock compensation charges for the vested portion of outstanding stock options recorded upon completion of the initial public offering. The expenses associated with a payroll tax audit relate to an IRS proposed issuance of an audit adjustment for the employer’s share of FICA taxes related to cash tips allegedly received and unreported by our tipped employees during calendar year 2010. The cash tips allegedly unreported by the tipped employees are based on an IRS estimate of the aggregate amount of tips directly received by tipped employees from our customers. The potential employer’s FICA tax liability based on the IRS’ preliminary estimate of allegedly unreported tips is
$10.0 million
. We recorded a liability that we believe is appropriate in Accrued and other current liabilities in its Consolidated Balance Sheet at September 30, 2013. The associated expense is included in Labor and other related expenses for the
three months ended September 30, 2013
. In addition, a deferred income tax benefit has been recorded for the allowable income tax credits for the employer share of FICA taxes expected to be paid as result of the assessment. This income tax benefit is included in (Benefit) provision for income taxes and offsets the additional Labor and other related expenses in 2013.
|
(2)
|
Represents management fees, out-of-pocket expenses and certain other reimbursable expenses paid to a management company owned by our Sponsors and Founders under a management agreement with us. In accordance with the terms of an amendment, this agreement terminated immediately prior to the completion of our initial public offering in August 2012 and a termination fee of $8.0 million was paid to the management company in 2012, in addition to a pro-rated periodic fee.
|
(3)
|
Loss on extinguishment and modification of debt is related to the repricing of OSI’s term loan B facility in April 2013, retirement of OSI’s senior notes in August 2012 and the extinguishment of the CMBS Loan in connection with New PRP entering into the 2012 CMBS Loan in March 2012.
|
(4)
|
Adjustment to (benefit) provision for income taxes for the
three and nine months ended September 30, 2013
represents an adjustment to the (Benefit) provision for income taxes to apply a normalized annual effective income tax rate, which excludes the income tax benefit of the valuation allowance release, to Adjusted income before (benefit) provision for income taxes. The normalized 2013 full-year tax rate is more comparable to our expectation for future effective income tax rates. Our expected future effective income tax rate is lower than the U.S. blended federal and state statutory rate because of the continued generation of U.S. tax credits and expected earnings in foreign jurisdictions with lower income tax rates. See calculation below of the income tax effect of adjustments for the
three and nine months ended September 30, 2013
. Adjustment to (benefit) provision for income taxes for the
three and nine months ended September 30, 2012
was calculated using the projected full-year effective income tax rate of
19.1%
.
|
|
|
THREE MONTHS ENDED
|
|
NINE MONTHS ENDED
|
||||
|
|
SEPTEMBER 30, 2013
|
|
SEPTEMBER 30, 2013
|
||||
Income (loss) before (benefit) provision for income taxes
|
|
$
|
12,043
|
|
|
$
|
122,958
|
|
Transaction-related and payroll tax expenses
|
|
5,938
|
|
|
6,642
|
|
||
Loss on extinguishment and modification of debt
|
|
—
|
|
|
14,586
|
|
||
Adjusted income before (benefit) provision for income taxes
|
|
17,981
|
|
|
144,186
|
|
||
Income tax expense at normalized tax rate of approximately 22.0% for the three and nine months ended September 30, 2013, respectively
|
|
3,956
|
|
|
31,721
|
|
||
Less: (Benefit) provision for income taxes
|
|
(91
|
)
|
|
(30,696
|
)
|
||
Adjustment to (benefit) provision for income taxes
|
|
$
|
4,047
|
|
|
$
|
62,417
|
|
(5)
|
Gives pro forma effect to the issuance of shares in the initial public offering as if they were all outstanding on January 1, 2012. There is no effect of this adjustment for the
three and nine months ended September 30, 2013
.
|
(6)
|
On a U.S. GAAP basis, we recognized a Net loss attributable to Bloomin’ Brands, Inc. during the three months ended September 30, 2012 and, therefore, did not report a dilutive effect of stock options and restricted stock awards. Since we generated net income on an adjusted basis, the additional dilutive effect of stock options and restricted stock awards during the three months ended September 30, 2012 is included to appropriately represent the diluted weighted average common shares outstanding. There is no effect of this adjustment on the three months ended September 30, 2013 or the nine months ended September 30, 2013 and 2012 as each of these periods generated Net income attributable to Bloomin’ Brands, Inc. on a U.S. GAAP and adjusted basis.
|
|
NINE MONTHS ENDED SEPTEMBER 30,
|
||||||
|
2013
|
|
2012
|
||||
Net cash provided by operating activities
|
$
|
126,673
|
|
|
$
|
80,950
|
|
Net cash (used in) provided by investing activities
|
(161,472
|
)
|
|
58,698
|
|
||
Net cash used in financing activities
|
(43,005
|
)
|
|
(456,452
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(228
|
)
|
|
2,995
|
|
||
Net decrease in cash and cash equivalents
|
$
|
(78,032
|
)
|
|
$
|
(313,809
|
)
|
•
|
50%
of its “annual excess cash flow” (with step-downs to
25%
and
0%
based upon its consolidated first lien net leverage ratio), as defined in the Credit Agreement, beginning with the fiscal year ending December 31, 2013 and subject to certain exceptions;
|
•
|
100%
of the net proceeds of certain assets sales and insurance and condemnation events, subject to reinvestment rights and certain other exceptions; and
|
•
|
100%
of the net proceeds of any debt incurred, excluding permitted debt issuances.
|
|
|
NINE MONTHS ENDED
|
UNOBSERVABLE INPUT
|
|
SEPTEMBER 30, 2012
|
Weighted-average cost of capital (1)
|
|
10.4% - 11.2%
|
Long-term growth rates
|
|
3.0%
|
Annual revenue growth rates (2)
|
|
(8.7)% - 4.3%
|
(1)
|
Weighted average of the cost of capital unobservable input range was
10.9%
for the
nine months ended September 30, 2012
.
|
(2)
|
Weighted average of the annual revenue growth rates unobservable input range was
2.6%
for the
nine months ended September 30, 2012
.
|
Exhibit Number
|
|
Description of Exhibits
|
|
|
|
10.1
|
|
Form of Restricted Stock Unit Award Agreement for restricted stock granted to directors under the Bloomin’ Brands, Inc. 2012 Incentive Award Plan.
|
|
|
|
10.2
|
|
Form of Restricted Stock Unit Award Agreement for restricted stock granted to employees and consultants under the Bloomin’ Brands, Inc. 2012 Incentive Award Plan.
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
31.2
|
|
Certification of Chief Financial and Administrative Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
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
1
|
|
|
|
32.2
|
|
Certification of Chief Financial and Administrative Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
1
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
Date:
|
November 6, 2013
|
|
BLOOMIN’ BRANDS, INC.
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
By: /s/ David J. Deno
|
|
|
|
David J. Deno
Executive Vice President and Chief Financial and
Administrative Officer
(Principal Financial Officer)
|
|
|
|
Bloomin’ Brands, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
Title:
|
|
|
|
|
|
Date:
|
|
|
|
|
|
Bloomin’ Brands, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
Title:
|
|
|
|
|
|
Date:
|
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q 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 necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects 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 (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 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 under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known 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 designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial 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 conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
November 6, 2013
|
/s/ Elizabeth A. Smith
|
|
|
Elizabeth A. Smith
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q 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 necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects 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 (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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November 6, 2013
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/s/ David J. Deno
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David J. Deno
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Executive Vice President and Chief Financial and Administrative Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the dates and periods covered by the Report.
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Date:
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November 6, 2013
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/s/ Elizabeth A. Smith
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Elizabeth A. Smith
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Chief Executive Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the dates and periods covered by the Report.
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Date:
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November 6, 2013
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/s/ David J. Deno
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David J. Deno
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Executive Vice President and Chief Financial and Administrative Officer
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